The Community Eligibility Option (CEO) is the newest alternative under the SBP and NSLP that allows schools to provide an alternative to household applications for free and reduced meals to high-poverty schools and school food authorities. Unlike Provision 2, which does not have participation prerequisites, systems choosing to participate in this option must be able to demonstrate high poverty levels in their system. To be eligible, sites must meet a minimum level of students directly certified for free meals in the year prior to implementing the option and agree to serve free lunches and breakfasts to all students (Section 104(a) of the Healthy, Hunger Free Kids Act of 2010).
CEO operates on a 4-year reimbursement cycle. An SFA may participate in CEO for all or some of the schools in the SFA, depending on the eligibility of schools as well as financial considerations, based on the anticipated level of federal reimbursement.
Schools participating in the Community Eligibility Option must apply this option to both the SBP and NSLP. Children at these sites are able to eat meals at no charge for the entire duration CEO is implemented. Reimbursement is based on: 1) claiming percentages derived from the percentage of students directly certified (the number of Identified Students times a multiplier of 1.6); 2) established in the first year; 3) guaranteed for a period of four school years, and 4) may be increased if direct certification percentages rise in that school. Schools must cover with non-federal funds all costs of providing the free meals to students above the amounts provided in federal reimbursement.
Beginning in the 2014-15 school year, all schools that meet a 40% direct certification threshold will be able to participate in this option.
Why Community Eligibility?
Benefits for Schools and Students
Schools using the Community Eligibility Option realize the following benefits:
All students receive all meals at no charge.
Helps low-income students and families
- Parents are assured that students are getting two healthy, nutrient-dense meals a day at school.
- Families’ financial burdens are eased when students eat school meals.
- Families don’t face language, literacy or other access-related issues due to application barriers.
- Students that have access to better nutrition tend to perform better academically.
Increases efficiency and school meal participation
- Lunch lines move more quickly because students no longer have to enter codes or swipe school ID cards, which results in more students eating and overcoming challenges caused by short lunch periods.
- More students eating school meals reduces stigma experienced by low-income students, encouraging others to participate.
- Increased convenience of alternative service models, such as breakfast in the classroom, enables more students to participate.
Reduces administrative costs
- Staff no longer collect, certify or verify applications.
- Fewer staff are needed in the cafeteria to track who qualifies for free meals or collect meal charges.
- Counting and claiming is simplified because staff no longer have to categorize each meal served as paid, reduced-price, or free.
- Staff no longer need to handle payments or track uncollected fees when students can’t afford to pay meal fees.
Community Eligibility and Alternative Breakfast Service Methods
With the Community Eligibility Option, the universal free meals and simplified meal counting and claiming make it easier to offer breakfast in the classroom and other alternative breakfast service methods that encourage participation. A wide body of research shows that implementing an alternative breakfast model is the most effective means to increase participation and achieve the gains in academic success linked to school breakfast consumption. Schools can use a variety of methods, including breakfast in the classroom, “grab and go,” and breakfast after first period. Allowing students to eat in the classroom makes it convenient and accessible to all, and incorporating breakfast into the school day helps families whose early morning schedules make it difficult to fit in breakfast at home. Also, it alleviates the problem of students missing breakfast in the cafeteria for any number of reasons, including school bus schedules or long school security lines.
How the Community Eligibility Option Impacts School Meal Revenue
School districts considering adopting CEO will want to calculate its impact on their federal reimbursements and food service revenue. Districts have the flexibility to implement community eligibility district-wide, in individual schools, or in groups of schools. Additionally, the Identified Student rate (which determines the reimbursement) may be calculated school‐by‐school, for a cluster of schools, or in the aggregate for an entire school district. School districts may want to run different estimates using various models of implementation.
Federal reimbursements for both lunch and breakfast are determined by multiplying the percent of students certified without paper application (Identified Students) by a 1.6 multiplier. The resulting number is the percentage of meals reimbursed at the “free” reimbursement rate, with the rest being reimbursed at the “paid” rate. The Identified Student percentage for a group of schools within a district is calculated by taking the sum of the Identified Students for the group of schools, divided by the sum of student enrollment for the group of schools. Districts should use their most recent Identified Student percentage, and, for the following school year, must use Identified Student and enrollment data calculated on or before April 1.
Resources and calculators are available to assist schools with estimating reimbursements under community eligibility. When districts estimate their expected revenue, they should include an estimated growth in breakfast and lunch participation. The first three states that implemented the Community Eligibility Option experienced an average of an 8% increase in lunch participation and a 17% increase in breakfast participation. For the USDA’s most recent calculator, go to FRAC’s community eligibility page at http://frac.org/community-eligibility/.
How the Community Eligibility Option Works
CEO allows schools with high numbers of low-income children to serve free breakfast and lunch to all students without collecting school meal applications. This option increases participation by children in school meal programs, while schools reduce labor costs and increase their federal revenues, allowing for a healthier student body and a healthier school meal budget.
How it Works
- Schools in high-poverty areas provide free breakfasts and lunches to all students without collecting applications or tracking eligibility in the cafeteria.
- A formula based on the number of students certified without the need for paper applications (called “Identified Students”) is the basis for reimbursements instead of paper applications.
- Any school can use this option when 40% or more students are certified for free meals without a paper application based on their status as in foster care or a Head Start program, homeless, migrant, or living in households that receive SNAP/Food Stamps, TANF cash assistance or FDPIR benefits.
- The reimbursement rate for both lunch and breakfast is determined by multiplying the percent of Identified Students by 1.6. The resulting number is the percent of meals reimbursed at the “free” reimbursement rate, with the rest being reimbursed at the “paid” rate. For example, a school with 50% Identified Students would be reimbursed at the free rate for 80% of the breakfasts and lunches it served (50 x 1.6 = 80) and the remaining 20% would be reimbursed at the paid rate.
- Participating schools are guaranteed to receive the same reimbursement rate (or a higher one if the level of direct certification increases) for 4 years. The Community Eligibility Option has been available in Illinois, Kentucky and Michigan since the start of the 2011-12 school year. Washington, DC, Ohio, West Virginia and New York began offering the option in the 2012-13 school year, with Florida, Georgia, Maryland and Massachusetts starting in the 2013-14 school year. Beginning in the 2014-15 school year, all schools nationwide that meet the 40% Identified Student threshold will be able to participate in this option.
Students at CEO-participating sites receive meals FREE of charge for the entire duration that the school participates.
Unlike Provision 2, CEO must be applied to both the SBP and the NSLP at participating sites, making all meals served to enrolled children free of charge. This largely benefits households.
Increased participation observed with school meal programs (SBP and NSLP)
Increased participation assures that a larger percentage of children are receiving nutritious meals which aides in learning, decreases behavioral problems, and increases exposure to new foods.
CEO does not require application collection, processing, or verification of applications at participating sites.
At first glance, this appears to be the same as Provision 2; however, it is important to note that because CEO does not function on the basis of base vs. non-base years, there is never any distribution, collection, or processing of meal applications. Verification is never required at CEO sites either.
4-year cycle with opportunity to renew at the end of each cycle if system is able to show that participating schools continue to meet the minimum Directly Certified (DC) student percentage of 40% of total enrollment [based on April of prior year].
Systems are given the flexibility to implement CEO at specified sites, clusters of schools, or system-wide at all schools.
For instance, if a system wishes to implement CEO at all school sites in the 2014-15 SY, but finds that a handful of sites are not individually eligible (< 40% DC in April 2014), these low percentage schools may be grouped with other schools, allowing for a ≥ 40% DC average for that group of schools. (Note that the same claiming percentage would apply for each site.)
Simplified counting and claiming with CEO
Like the non-base years of Provision 2 and 3, CEO allows schools to simply track totals at the POS. Also like Provision 2, CEO applies percentages to meals when completing the monthly claim for reimbursement. The good news is that 1) CEO never requires a meal count by status (like Provision 2 and 3 do in base years) and 2) the percentage applied to total meals served by site does not fluctuate from month to month as observed with Provision 2. To determine how many free meals can be claimed at each CEO-participating site, the system must first take the established DC percentage and multiply this by a factor of 1.6 (i.e., 45% DC in April 2012 x 1.6 = 72%. Therefore, 72% of all first meals served to students in the 2012-13 SY will be claimed as free.) Any remaining meals will be claimed at the “paid” rate.
CEO claiming percent (percentage of free meals claimed) may be increased from one SY to the next for a site (or sites) if prior year April data shows an increase in DC children.
For example, if a school site experiences an influx of new students in the 2012-13 SY, many of which are DC, this increased reimbursement can be captured in the following 2013-14 SY (based off of April 2013 DC data).
When participating in CEO, it becomes the school system’s responsibility to cover the difference (using non-federal sources) between federal reimbursement and the cost of providing meals at no charge.
Participating schools no longer receive money from students for their meals. It is usually the belief that increased participation (on account of all student meals being served free) will cover most of the income versus reimbursement gap, but systems can’t really know until implementation occurs.
Cost Associated with Expansion
As meals become available to students free of charge, schools will begin to see increases in meal participation. This is great for multiple reasons; however, the question “is there sufficient room for this significantly increased participation?” must be considered.
Criteria to Participate
In order to participate in CEO, each participating school (or group of schools) must have, in the year prior to participating, a DC percentage that is 40% or higher. School systems also must participate in both the SBP and NSLP to be eligible. In addition, systems, prior to being approved for participation in CEO, must agree to the following while participating: 1) to serve all children at participating schools free breakfasts and lunches for four successive years; 2) to pay from sources other than federal funds, the costs of serving breakfast and lunch that are in excess of federal assistance received; 3) to not collect free and reduced applications from households in participating schools; 4) to count total breakfasts and lunches served to students, and 5) to not be a residential child care institution as that term is set forth in the definition of “School” in 7 CFR 210.2.
Percentage DC and student participation drives reimbursement AND maximal reimbursement is essential when no longer collecting income from students for meals served.
A system needs to be in place to encourage meal participation (informational flyers sent to households, planned menu made available to students/households, etc.). Another essential piece of the puzzle is direct certification. Systems need knowledgeable staff to assist in identifying the maximum number of DC children by site (DC by SNAP, TANF, or FDPIR; by appearance on homeless list; or by association). This is particularly important each year as the percentage DC established determines if the claim percentage (percentage of total student meals claimed as free) can be increased for the following SY.
Is Community Eligibility Right for My School?
To be eligible, your SFA, school or group of schools must meet the minimum 40% identified student percentage. This percentage may be determined school-by-school, by the entire SFA, or in a grouping of schools within the SFA.
Before adopting CEO, schools must calculate its impact on their federal reimbursements and food service revenue. The federal reimbursements for both lunch and breakfast are determined by multiplying the percentage of students directly certified by a 1.6 multiplier. The resulting number is the percentage of meals reimbursed at the “free” reimbursement rate, with the rest being reimbursed at the “paid” rate. Districts have the flexibility to implement CEO and determine the direct certification rate community wide, school-by-school, or as groups of schools. (USDA SP 23-2011 Community Eligibility Option: Guidance).
Schools should also consider the percentage of students who might qualify for free or reduced priced meals, but do not “match” under direct certification when deciding between Provision 2 and the Community Eligibility Option.
In addition, schools will have to adjust their administrative process so that claims for meals served are based on the school’s claiming percentage and meal counts. Schools that rely on “at-risk” funding will need to assess how the alternative method for determining at-risk will affect their funding (see “How will this policy change affect my ‘at-risk’ funding?” – pocket) (http://frac.org/community-eligiblity/).
As with Provision 2, schools must also consider their ability to handle the larger number of students likely to participate in the meal programs and their ability to implement new procedures and administer a new program.
The Food Research and Action Center (FRAC) has worked with schools using the Community Eligibility Option pilot program and can assist schools in determining whether CEO is right for them. Resources and calculators are available to assist schools with estimating reimbursements under community eligibility. FRAC also maintains a link to the USDA’s most recent calculator for reimbursement under Community Eligibility (http://frac.org/community-eligibility/).
How Do I Implement Community Eligibility?
The requirements for SFAs and school participation, eligibility, reimbursement and reporting under the Community Eligibility Option are set forth in Section 11(a)(1)(F) of the Richard B. Russell National School Lunch Act. In addition, the USDA has provided CEO guidance in Sections I, II and III in Memorandum SP 23-2011, issued on March 15, 2011. (http://www.fns.usda.gov/cnd/governance/Policy-Memos/2011/SP23-2011_os.pdf). The USDA will issue full regulations prior to the 2014-15 school year.
Community Eligibility FAQs
What is the Community Eligibility Option (CEO)?
- An alternative to the traditional processes associated with the School Breakfast (SBP) and National School Lunch Programs (NSLP).
- Available to qualifying (high poverty) local educational agencies (LEAs) and schools in all states beginning with school year (SY) 2014-15.
- No application processing or verification done at participating sites.
- Allows for a simplified counting and claiming system.
- Allows for all students to receive free meals under the SBP and NSLP.
When will CEO become an option for schools in Louisiana?
CEO will be implemented nationwide on July 1, 2014 (SY 2014-15).
Who is eligible to participate in CEO?
- LEAs and schools must meet a minimum level of Identified Students (≥ 40% of enrolled students) for free meals in the year prior to (on or before April 1st) implementing CEO;
- LEAs and schools must agree to serve free lunches and breakfasts to all students; and
- LEAs and schools must agree to cover with non-federal funds any cost of providing free meals to all students above amounts provided in federal assistance.
What is an Identified Student?
An “Identified Student” is one that has a free status due to categorical eligibility. Simply put, it represents a child who received their eligibility status without having to submit an application. Directly certified (DC) students (and their siblings) are considered Identified Students. In addition, any child identified as participating in the Temporary Assistance for Needy Families (TANF), Food Distribution Program on Indian Reservations (FDPIR) program (by means other than application submission), Head Start programs, any child deemed homeless, migrant, or runaway by the local homeless liaison, or any child deemed foster due to the submission of official documents is also considered an “Identified Student.”
What are Directly Certified students?
Per the United States Department of Agriculture (USDA) Eligibility Guidance Manual for School Meals, direct certification is the process under which LEAs certify children who are members of households (HHs) receiving assistance under Supplemental Nutrition Assistance Program (SNAP), TANF, or FDPIR meals, without further application, based on information provided by the state/local agency administering those programs.
Do all school sites under an LEA have to participate in CEO?
No. The LEA does not have to apply CEO to all sites. The LEA may select individual sites (meeting Identified Student requirements) or may cluster sites together if one or more sites in that cluster would not be eligible if it were to stand alone. Note that the average Identified Student percentage from the cluster of sites must be ≥ 40%.
Does CEO have to apply for both the SBP and the NSLP at selected sites?
Yes. The LEA must apply CEO to both the SBP and the NSLP at participating sites.
When can an LEA begin implementation of CEO?
LEAs approved for CEO must implement it at the beginning of the school year.
How long will the state agency approve an LEA to participate in CEO?
CEO operates on a 4-year cycle. There are no distinguishing base or non-base years with the CEO as there are with Provision 2.
Once approved for CEO, are LEAs locked into a 4-year cycle?
A participating LEA or school may stop participating in CEO during the 4-year cycle by notifying the state agency no later than June 30th of the SY prior to when they wish to return to normal counting and claiming procedures. This will allow sufficient time for the LEA to prepare for the certification process for the coming SY.
What are the LEA’s responsibilities during CEO (all years of the cycle)?
During the 4-year cycle, school sites implementing CEO will perform the same responsibilities. These are as follows:
- Obtain state agency approval to operate the SBP and NSLP using CEO procedures in some or all schools in the LEA;
- LEAs and schools must meet a minimum level of students directly certified for free meals in the year prior to (and each year following) implementing the option;
- Agree to serve free lunches and breakfasts to all students;
- Not collect free and reduced price meal applications for HHs in participating schools during the period of participation;
- Pay, with sources other than federal funds, the cost of serving breakfasts and lunches free of charge to students, that are in excess of the federal assistance received;
- Count total breakfasts and lunches served to students; and
- Not be a residential child care institution (RCCI) as that term is set forth in the definition of “School” in 7 CFR 210.2.
What are Claiming Percentages?
Reimbursement for a school in the first year under CEO is based on the percentage of “Identified Students” as of April 1st (or before) of the SY prior to the first year of electing benefits. The percentage of Identified Students is then multiplied by the USDA multiplier (currently 1.6) to determine the total percentage of meals reimbursed at the federal free reimbursement rate. The percentage derived from this calculation must not exceed 100%. Any remaining percentage that may exist is then applied to total meals to determine the number of meals to claim for paid reimbursement.
USAD may change the CEO multiplier in the future, but can only adjust it between 1.3 and 1.6. Please note that once a 4-year CEO cycle has begun, LEAs always lock in the multiplier for a least four years.
What if the percentage of Identified Students increases (on or before April 1st) from one SY to the next?
LEAs will then be presented with the option of applying either the percentages used in the prior year of participation or the current year’s newly calculated percentage (new Identified Student percentage multiplied by the USDA multiplier/factor) when creating monthly claims for reimbursement.
Here is an example:
Site XYZ wishes to participate in CEO beginning in SY 2014-15.
- As of April 1, 2014, Site XYZ has an Identified Student percentage of 50% (450 Identified Students/900 total enrolled students x 100). 50% x USDA multiplier (1.6) = 80% to be claimed for free reimbursement.
- By April 1, 2015, Site XYZ has a higher Identified Student percentage of 75% (675 Identified Students/900 total enrolled students x 100). The site can now claim all reimbursable lunches as free (75% x 1.6 = > 100%).
What if the percentage of Identified Students decreases (on or before April 1st) from one SY to the next?
If the Identified Student percentage decreases from one year to the next, the LEA must revert back to the claiming percentages used in year one of the CEO cycle.
Here is an example:
Site ABC wishes to participate in CEO beginning in SY 2015-16.
- As of April 1, 2015, Site ABC has an Identified Student percentage of 45% (450 Identified Students/1,000 total enrolled students x 100). 45% x USDA multiplier (1.6) = 72% to be claimed for free reimbursement.
- By April 1, 2016, Site ABC has a lower Identified Student percentage of 42% (420 Identified Students/1,000 total enrolled students x 100). The site cannot use the currently calculated Identified Student percentage since it has not increased from the prior year. The site must revert back to the original percentages used in year 1 of the CEO cycle.
What are the benefits associated with CEO implementation?
- Decreases the burden associated with meal application distribution, collection, and processing as meal applications cannot be used in any year of participation;
- Participating sites do not participate in Verification for any year of participation;
- Allows for a simplified point of service (POS). All students eat meals at no charge and only total meal counts are needed without regard to eligibility status. Therefore, tokens/name tags/scanners are no longer needed; and
- Allows for a simplified claiming procedure. The same percentages can be applied every month and in all years (if LEA opts to use originally determined percentages during the entire cycle) to the total meal counts collected.
DEPARTMENT OF EDUCATION LOUISIANA BELIEVES