ADMINISTRATIVE ERROR REDUCTION.

SEC. 126. ADMINISTRATIVE ERROR REDUCTION. (a) Federal Support for Training and Technical Assistance.—Section 21 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769b–1) is amended by adding at the end the following:“(f) Administrative Training and Technical Assistance Material.—In collaboration with State educational agencies, local educational agencies, and school food authorities of varying sizes, the Secretary shall develop and distribute training and technical assistance material relating to the administration of school meals programs that are representative of the best management and administrative practices.“(g) Federal Administrative Support.—“(1) Funding.—“(A) In general.—Out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subsection—“(i) on October 1, 2004, and October 1, 2005, $3,000,000; and“(ii) on October 1, 2006, October 1, 2007, and October 1, 2008, $2,000,000.“(B) Receipt and acceptance.—The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subparagraph (A), without further appropriation.“(C) Availability of funds.—Funds transferred under subparagraph (A) shall remain available until expended.“(2) Use of funds.—The Secretary may use funds provided under this subsection—“(A) to provide training and technical assistance and material related to improving program integrity and administrative accuracy in school meals programs; and“(B) to assist State educational agencies in reviewing the administrative practices of local educational agencies, to the extent determined by the Secretary.”.(b) Selected Administrative Reviews.—(1) In general.—Section 22(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769c(b)) is amended by adding at the end the following:“(3) Additional review requirement for selected local educational agencies.—118 STAT. 764 “(A) Definition of selected local educational agencies.—In this paragraph, the term ‘selected local educational agency’ means a local educational agency that has a demonstrated high level of, or a high risk for, administrative error, as determined by the Secretary. “(B) Additional administrative review.—In addition to any review required by subsection (a) or paragraph (1), each State educational agency shall conduct an administrative review of each selected local educational agency during the review cycle established under subsection (a). “(C) Scope of review.—In carrying out a review under subparagraph (B), a State educational agency shall only review the administrative processes of a selected local educational agency, including application, certification, verification, meal counting, and meal claiming procedures. “(D) Results of review.—If the State educational agency determines (on the basis of a review conducted under subparagraph (B)) that a selected local educational agency fails to meet performance criteria established by the Secretary, the State educational agency shall—“(i) require the selected local educational agency to develop and carry out an approved plan of corrective action; “(ii) except to the extent technical assistance is provided directly by the Secretary, provide technical assistance to assist the selected local educational agency in carrying out the corrective action plan; and “(iii) conduct a followup review of the selected local educational agency under standards established by the Secretary. “(4) Retaining funds after administrative reviews.—“(A) In general.—Subject to subparagraphs (B) and (C), if the local educational agency fails to meet administrative performance criteria established by the Secretary in both an initial review and a followup review under paragraph (1) or (3) or subsection (a), the Secretary may require the State educational agency to retain funds that would otherwise be paid to the local educational agency for school meals programs under procedures prescribed by the Secretary. “(B) Amount.—The amount of funds retained under subparagraph (A) shall equal the value of any overpayment made to the local educational agency or school food authority as a result of an erroneous claim during the time period described in subparagraph (C).“(C) Time period.—The period for determining the value of any overpayment under subparagraph (B) shall be the period—“(i) beginning on the date the erroneous claim was made; and“(ii) ending on the earlier of the date the erroneous claim is corrected or—“(I) in the case of the first followup review conducted by the State educational agency of the local educational agency under this section after 118 STAT. 765 July 1, 2005, the date that is 60 days after the beginning of the period under clause (i); or“(II) in the case of any subsequent followup review conducted by the State educational agency of the local educational agency under this section, the date that is 90 days after the beginning of the period under clause (i).“(5) Use of retained funds.—“(A) In general.—Subject to subparagraph (B), funds retained under paragraph (4) shall—“(i) be returned to the Secretary, and may be used—“(I) to provide training and technical assistance related to administrative practices designed to improve program integrity and administrative accuracy in school meals programs to State educational agencies and, to the extent determined by the Secretary, to local educational agencies and school food authorities;“(II) to assist State educational agencies in reviewing the administrative practices of local educational agencies in carrying out school meals programs; and“(III) to carry out section 21(f); or“(ii) be credited to the child nutrition programs appropriation account.“(B) State share.—A State educational agency may retain not more than 25 percent of an amount recovered under paragraph (4), to carry out school meals program integrity initiatives to assist local educational agencies and school food authorities that have repeatedly failed, as determined by the Secretary, to meet administrative performance criteria.“(C) Requirement.—To be eligible to retain funds under subparagraph (B), a State educational agency shall—“(i) submit to the Secretary a plan describing how the State educational agency will use the funds to improve school meals program integrity, including measures to give priority to local educational agencies from which funds were retained under paragraph (4); “(ii) consider using individuals who administer exemplary local food service programs in the provision of training and technical assistance; and “(iii) obtain the approval of the Secretary for the plan.”. (2) Interpretation.—Nothing in the amendment made by paragraph (1) affects the requirements for fiscal actions as described in the regulations issued pursuant to section 22(a) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769c(a)).(c) Training and Technical Assistance.—Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) is amended—(1) in subsection (e)—(A) by striking “(e) Each” and inserting the following:“(e) Plans for Use of Administrative Expense Funds.—“(1) In general.—Each”; and118 STAT. 766(B) by striking “After submitting” and all that follows through “change in the plan.” and inserting the following:“(2) Updates and information management systems.—“(A) In general.—After submitting the initial plan, a State shall be required to submit to the Secretary for approval only a substantive change in the plan. “(B) Plan contents.—Each State plan shall, at a minimum, include a description of how technology and information management systems will be used to improve program integrity by—“(i) monitoring the nutrient content of meals served;“(ii) training local educational agencies, school food authorities, and schools in how to use technology and information management systems (including verifying eligibility for free or reduced price meals using program participation or income data gathered by State or local agencies); and“(iii) using electronic data to establish benchmarks to compare and monitor program integrity, program participation, and financial data.“(3) Training and technical assistance.—Each State shall submit to the Secretary for approval a plan describing the manner in which the State intends to implement subsection (g) and section 22(b)(3) of the Richard B. Russell National School Lunch Act.”;(2) by redesignating subsection (g) as subsection (j); and(3) by inserting after subsection (f) the following:“(g) State Training.—“(1) In general.—At least annually, each State shall provide training in administrative practices (including training in application, certification, verification, meal counting, and meal claiming procedures) to local educational agency and school food authority administrative personnel and other appropriate personnel, with emphasis on the requirements established by the Child Nutrition and WIC Reauthorization Act of 2004 and the amendments made by that Act. “(2) Federal role.—The Secretary shall—“(A) provide training and technical assistance to a State; or“(B) at the option of the Secretary, directly provide training and technical assistance described in paragraph (1).“(3) Required participation.—In accordance with procedures established by the Secretary, each local educational agency or school food authority shall ensure that an individual conducting or overseeing administrative procedures described in paragraph (1) receives training at least annually, unless determined otherwise by the Secretary.“(h) Funding for Training and Administrative Reviews.—“(1) Funding.—“(A) In general.—On October 1, 2004, and on each October 1 thereafter, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subsection $4,000,000, to remain available until expended.118 STAT. 767“(B) Receipt and acceptance.—The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subparagraph (A), without further appropriation.“(2) Use of funds.—“(A) In general.—Except as provided in subparagraph (B), the Secretary shall use funds provided under this subsection to assist States in carrying out subsection (g) and administrative reviews of selected local educational agencies carried out under section 22 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769c).“(B) Exception.—The Secretary may retain a portion of the amount provided to cover costs of activities carried out by the Secretary in lieu of the State.“(3) Allocation.—The Secretary shall allocate funds provided under this subsection to States based on the number of local educational agencies that have demonstrated a high level of, or a high risk for, administrative error, as determined by the Secretary, taking into account the requirements established by the Child Nutrition and WIC Reauthorization Act of 2004 and the amendments made by that Act.“(4) Reallocation.—The Secretary may reallocate, to carry out this section, any amounts made available to carry out this subsection that are not obligated or expended, as determined by the Secretary.”.