School districts audit reveals lack of “Buy American” compliance

9 Aug
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Buy American - cafeteria

The California State Auditor found late last month that California’s schools are failing to follow one specific federal rule — keep food local and “Buy American.”

Districts participating in the National School Lunch or Breakfast Program are required to comply with all requirements of federal law for purchasing commercial food products served in the school meals programs, including those outlined in the Buy American provision (42 USC 1760, 7 CFR 210.21). This provision indicates that a district must, to the maximum extent practicable, purchase foods that are produced in the United States or processed in the United States “substantially using” agricultural commodities that are produced in the United States. According to a U.S. Department of Agriculture Memorandum issued in February 2016, a domestic commodity or product is deemed to be “substantially using” domestic agricultural commodities when over 51 percent of the final processed product consists of agricultural commodities produced in the United States.

There are limited exceptions to the Buy American requirement. A nondomestic food product may be purchased for use in the district’s food service program only as a last resort when the product is not produced or manufactured in the United States in sufficient and reasonable quantities of a satisfactory quality, or when competitive bids reveal the costs of a United States product are significantly higher than the nondomestic product. In such cases, the district must retain documentation justifying the exception.

The audit checked the food purchases of six school districts — Elk Grove, Fresno, Los Angeles, San Diego, San Francisco and Stockton — and found that all six had purchased foreign food without enough documentation to rationalize their orders. In addition, only San Diego and San Francisco had regularly included Buy American language within their contracts with food suppliers. When other entities purchase foods on behalf of a district (such as food service management companies, group purchasing organizations or cooperatives of schools), the district has an obligation to ensure that such entities comply with this requirement.

For more information on the audit, read The Sacramento Bee’s coverage here.

CSBA Guidance

For further information, see the USDA’s Memorandum SP 24-2016, “Compliance with and Enforcement of the Buy American Provision in the National School Lunch Program,” available on the USDA’s website here.

CSBA updated its sample board policy and administrative regulation BP/AR 3551 – Food Service Operations/Cafeteria Fund in May 2017 to add information about the Buy American provision. At the same time, the samples were revised to reflect recent federal and state guidance on how to handle unpaid meal charges.

Districts are encouraged to review and update their policies and regulations to ensure that staff responsible for food procurement are aware of and comply with the Buy American requirement.  Districts also must ensure that contractors are aware the requirement by including the provision in solicitations, contracts and product specifications and requiring bidder assurance of compliance or a justifiable exception.

In accordance with the Federal Uniform Guidance (2 CFR 200.318), districts then need to follow up to ensure that contractors comply with the terms, conditions and specifications of their contracts or purchase orders.  The USDA Memorandum clarifies that this can be accomplished by reviewing product labels and/or delivery notices to ensure that the product label designates the United States or its territories as the country of origin, and periodically reviewing storage facilities, freezers, refrigerators, dry storage and warehouses. The California Department of Education will monitor district compliance during administrative reviews of the district’s food services operations.

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