Definition & Uses of Equipment Assistance Funds
Definition
The definition of equipment for the purpose of the ARRA equipment assistance grant is “...articles of nonexpendable, tangible personal property with a useful life of more than one year and a per unit acquisition cost of $5,000 or more (or such lesser amount as the School Food Authority (SFA) uses when reporting equipment as assets in its financial statements).” Local education agencies may use lesser amounts (known as “capitalization thresholds”) to define equipment (i.e., a $2,000 capitalization threshold instead of a $5,000 one). Items classified as supplies under the federal definition may be purchased as equipment with grant funds if the acquisition cost equals or exceeds the local capitalization threshold.
As with all federal funds, the equipment purchases must be allowable. Using these funds to purchase a walk-in freezer for school nutrition programs would be an allowable cost; however, renovation of the school nutrition area would fall under the category of construction costs that must be charged to the school division’s general fund or capital outlay fund. School divisions are required to follow all federal, state, and local procurement laws and regulations.
Reference: USDA regulations at 7 CFR 3016.3 and Office of Management and Budget Circular A-87.
Uses of funds
The equipment purchased with the ARRA equipment assistance grant funds must be used to support the federally assisted school nutrition programs of the school division. Equipment may not be purchased exclusively for programs outside of the NSLP. However, when a school participates in other school meal programs (such as the School Breakfast Program-SBP, afterschool snack-ASP, Fresh Fruit and Vegetable Program- FFVP), in addition to the NSLP, those other meal services may benefit from the ARRA grant-purchased equipment. For example, if a school participating in the NSLP and School Breakfast Program purchases a new refrigerator with the ARRA grant funds, food items for both federal programs may be stored in the refrigerator. Equipment requests may include new equipment, renovation of existing equipment, or replacement of equipment. Equipment for which funds have already been obligated is not eligible for this grant.
As stipulated in the ARRA, priority will be given to school divisions with schools in which at least 50 percent of the students are eligible for free or reduced-price meals. This means, all other things being equal, significant weight must be given to applications for grant funds for schools with at least 50 percent of the student population eligible for free or reduced-price meals to ensure schools falling within this category are given priority for selection. Division-wide percentages may not be used.
VDOE has received inquiries from school division on whether Equipment Assistance Grant Funds may be used for administrative and/or indirect costs. USDA guidance documents clearly state that these funds are to be used solely to purchase needed school food service equipment and may not be used to pay administrative and/or indirect costs.