tive practices of school food authorities, 
to the extent determined by the Sec-
retary; and 
‘‘(III) to carry out section 21(e); 
or 
‘‘(ii) be credited to the child nutrition 
programs appropriation account. 
‘‘(B) STATE SHARE.—Subject to subpara-
graph (C), a State educational agency may re-
tain not more than 25 percent of an amount re-
covered under paragraph (4), to carry out school 
meals program integrity initiatives to assist 
school food authorities and local educational 
agencies that have repeatedly failed (as deter-
mined by the Secretary) to meet administrative 
performance criteria. 
‘‘(C) REQUIREMENT.—To be eligible to re-
tain funds under subparagraph (B), a State edu-
cational agency shall—
‘‘(i) submit to the Secretary a plan de-
scribing how the State educational agency 
will use the funds to improve school meals 
program integrity, including measures to 
give priority to school food authorities and
local educational agencies from which funds 
were retained under paragraph (4); and 
‘‘(ii) obtain the approval of the Sec-
retary for the plan.’’. 
(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’’; and 
(B) by striking ‘‘After submitting’’ and all 
that follows through ‘‘change in the plan.’’, and 
inserting the following: 
‘‘(2) UPDATES AND INFORMATION MANAGEMENT 
SYSTEMS.—After submitting the initial plan, a State 
shall be required to submit to the Secretary for ap-
proval only a substantive change in the plan. Each 
State plan shall at a minimum include a description 
of how technology and information management sys-
tems will be used to improve program integrity by—
‘‘(A) monitoring the nutrient content of 
meals served;
‘‘(B) training schools and school food au-
thorities how to utilize technology and informa-
tion management systems for activities such as 
menu planning, collecting point of sale data, 
processing applications for free and reduced 
price meals and verifying eligibility for free and 
reduced price meals using existing databases to 
access program participation or income data col-
lected by State or local educational agencies; and 
‘‘(C) using electronic data to establish 
benchmarks to compare and monitor program 
integrity, program participation, and financial 
data across schools and school food authorities. 
‘‘(3) TRAINING AND TECHNICAL ASSISTANCE.—
Each State shall submit to the Secretary for approval 
a plan describing the manner in which the State in-
tends to implement subsection (g) and section 
22(b)(3) of the Richard B. Russell National School 
Lunch Act (as added by section 208 of the Child Nu-
trition Improvement and Integrity Act).’’; 
(2) by redesignating subsection (g) as subsection 
(i); 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 proce-
dures) to school food authority administrative per-
sonnel and other appropriate personnel, with empha-
sis on the requirements established by the Child Nu-
trition Improvement and Integrity Act and the 
amendments made by that Act. 
‘‘(2) FEDERAL ROLE.—The Secretary shall—
‘‘(A) provide training and technical assist-
ance (including training materials and informa-
tion developed under subsections (e) and (f) of 
section 21 of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1769b–1)) to a 
State to assist the State in carrying out para-
graph (1); or 
‘‘(B) at the option of the Secretary, directly 
provide training and technical assistance de-
scribed in paragraph (1). 
‘‘(3) THIRD-PARTY CONTRACTING.—In carrying 
out this subsection, the Secretary or a State may con-
tract with a third party under procedures established 
by the Secretary.
‘‘(4) REQUIRED PARTICIPATION.—Under proce-
dures established by the Secretary that consider the 
various needs and circumstances of school food au-
thorities, each school food authority or local edu-
cational agency shall ensure that an individual con-
ducting or overseeing administrative procedures de-
scribed in paragraph (1) receives training at least 
annually, unless determined otherwise by the Sec-
retary. 
‘‘(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 appro-
priated, the Secretary of the Treasury shall 
transfer to the Secretary of Agriculture to carry 
out this subsection $4,000,000, to remain avail-
able until expended. 
‘‘(B) RECEIPT AND ACCEPTANCE.—The Sec-
retary shall be entitled to receive, shall accept, 
and shall use to carry out this subsection the 
funds transferred under subparagraph (A), with-
out 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 school food authorities and 
local educational agencies under section 22(b)(3)
of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1769c(b)(3)). 
‘‘(B) EXCEPTION.—The Secretary may re-
tain 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 in this subsection to States based on 
the number of local educational agencies that have 
demonstrated a high level of or a high risk for admin-
istrative error, as determined by the Secretary, taking 
into account the requirements established by the Child 
Nutrition Improvement and Integrity Act and the 
amendments made by that Act. 
‘‘(4) REALLOCATION.—The Secretary may reallo-
cate, to carry out this section, any amounts made 
available to carry out this subsection that are not ob-
ligated or expended, as determined by the Secretary.’’.