Allowable Costs for Water

The USDA does not provide any separate funding or reimbursement for the potable water requirement and SFAs cannot claim reimbursement for water. However, SFAs may use funds from the nonprofit school food service account (NSFSA) to cover the allowable costs of providing potable water to students. An allowable cost is a cost that is considered reasonable, necessary, and allocable to the school nutrition programs. Some examples of possible allowable costs associated with providing potable water to students are listed below.

• Purchasing pitchers or cups that would be filled with water from the faucet or provided to students to fill with water from the faucet.
• Purchasing a 5-gallon dispenser for water. This cost would be allowable if the SFA has determined that this method of providing water is cost efficient and practical.
• Covering the cost of testing tap water and water fountains that will be used by students. The U.S. Environmental Protection Agency (EPA) recommends that all schools routinely test drinking water for lead and perform regular maintenance to ensure that drinking water is safe.

The determination of whether these costs are allowable for an individual SFA depends on their specific circumstances. Costs related to the purchase of potable water for consumption by students must always be reasonable, necessary, and allocable to the school nutrition programs. An allowable cost for one SFA might not be an allowable cost for another.

For guidance on how to determine allowable costs for the NSFSA, refer to the “General Criteria for Allowable Costs” section (page 13) of the USDA’s manual, Indirect Costs: Guidance for State Agencies & School Food Authorities.