Beware of Penalties Under New State Budget

Last month, we provided a general overview of the new state budget, which amends the State School Aid Act (“SSAA”) for State fiscal year 2025-2026. We are now drawing attention to SSAA Section 164k to highlight potential penalties resulting from non-compliance.

Section 164k mandates that schools comply with the following, or risk losing 5% of designated Section 22b funding for school districts, or Section 81 funding for ISDs, during the period of noncompliance if a violation is reported and confirmed:

• Ensure that all food made available to a student in the breakfast or lunch program complies with all federal rules and regulations related to school meals.
• To the extent practicable under federal regulations, require each student’s household to complete the child nutrition and benefits application, as provided by MDE, for free and reduced-price meals, regardless of whether the school opts to provide universal breakfast or lunch.
• No longer provide financial incentives for students to attend pupil membership count day beginning with the February 2026 count day.
• Ensure that student survey questions and results are made available to the public, posted on the school’s website, and that parents and legal guardians are notified of the survey. For purposes of this section, “survey” includes any survey from the school or from the local, state, or federal government.

Schools should take steps to ensure compliance with Section 164k to reduce the risk of incurring penalties. If you have questions regarding Section 164k compliance, please contact a Thrun attorney.