CACFP Participation Questions and Answers
Management Plans and Budget Questions and Answer
- If a State has an alternate approval system, is it mandatory to have health and fire inspection approvals?
Yes, any State agency approval system must include health and safety inspections.
- A day shelter provides case management and laundry services for homeless people. The participants do not stay at the shelter overnight. Can this shelter participate in the CACFP as an emergency shelter?
Day shelters cannot participate in the CACFP as they do not meet CACFP’s definition of an eligible emergency shelter which is residential in nature [7 CFR 226.2 Definitions, Emergency Shelter].
- A child care center provides 36 – 72-hour emergency care for families in abusive situations. Would this be considered a residential situation prohibiting meals served to these children from being claimed in the CACFP?
Although FNS Instruction 776-4, Rev. 1 Temporary Emergency Care in the CACFP appears to only allow this type of emergency residential care in day care homes, such a situation was not contemplated when the Instruction was written. This is a special situation to protect abused children; therefore, the CACFP could be extended to a center of this type, if the three consecutive calendar days guidelines are applied.
- A child care center operating in the basement of a church has been approved to participate in the CACFP. The church operates a school program which has not been recognized as an accredited school by the State. The school had previously applied for the NSLP and was denied participation because of the non- accreditation. The center wants to serve lunches to the children in attendance at the school and claim the meals through the CACFP. Is this allowable?
In this setting, meals served to children may not be claimed under the CACFP because the children attend the school and not formally enrolled for attendance and care at the center.
- If an organization serving homeless families with children qualifies for the CACFP and it has a separate site which serves only teens under 18, is the site eligible to claim meals?
Yes, if the organization’s primary purpose is to provide temporary shelter and meals to most of the homeless families with children, the site would be considered eligible.
- An OSHCC has school age children in care all day in the summer. Since these children are in care all day in the summer, would enrollment forms still be required?
The CACFP regulations at 7 CFR 226.19 state, “OSHCCs shall be eligible to serve lunches to enrolled children during periods of school vacation.” 7 CFR 226.15(e)(2) outlines the requirement that enrollment forms must be collected for these children for their summer care.
Management Plans and Budget Questions and Answer
1. Is the cost of hiring an accounting firm to perform required taxation accounting an allowable CACFP cost?
The services of an accounting firm to conduct duties related to State taxation department is not a requirement for the management of the CACFP. It is a general business expense to maintain the institution’s nonprofit status with the State and to meet the State’s tax requirement. Therefore, the payment to an accounting firm for services to prepare State tax required information is an unallowable cost [FNS Instruction 796-2, Rev. 4 (VIII I 20)].
2. May sponsoring organizations receive a partial reimbursement for CACFP
business use of an employee’s
No, only the institution’s costs are allowable, not individual expenditures.
3. Is renting space in a private residence allowable?
Yes, when a bona fide arms-length rental exists with an independent third party and the Program share of the cost is reasonable.
- A sponsoring organization plans to have a float in a parade promoting the CACFP and will develop pamphlets to hand out along the parade route, at farmer’s markets, and at other community events. Is this an allowable CACFP cost?
The parade registration and pamphlets can be considered a CACFP outreach cost. The CACFP can be charged 100 percent if the float is strictly promoting the CACFP; but must be allocated if other Programs are being promoted. Another required consideration is the reasonableness of the amount allowed; the cost allowed as reasonable for promotions may be much less than the total cost.
- A sponsoring organization staff member is interested in improving their public speaking and training skills. Is the cost of college or technical school an allowable CACFP cost?
The cost could be a training cost or an employee morale, health and welfare cost or credit. Whatever category, the institution would need to have a description of the benefit included in its compensation policies and be available to all similarly titled employees.
Also, this cost would require specific prior approval from the State agency and there would need to be adequate funds available. Some costs are allowable costs; however, they end up becoming unfunded as there is not enough reimbursement dollars available to cover the approved costs.
- Do any travel costs require approval by the State agency?
All travel costs require prior approval.
7. How is the A-133 Audit cost allocated?
Audits are to be allocated by Program dollars to agency dollars.
EXAMPLE: The CACFP brings cash flow of $250,000 to the institution. The institution earns $900,000 a year from various Federal and non-Federal Programs it administers. The cost of the A-133 audit is $4500. To establish the cost to the CACFP for the A-133 audit, the following calculations are conducted.
$250,000 ÷ $900,000 = 28 percent of the institution’s earnings are CACFP
The Program share of the audit cost is determined by multiplying the cost of the audit by the percent of the institution’s funds that are CACFP — $4500 x 28 percent = $1260.
In addition, if the institution sponsors both centers and DCHs, this amount would have to be further allocated be ween DCHs and centers based upon the CACFP dollars from each of the Programs.
SFSP Frequently asked Questions and Answers
A. Site Eligibility
- What is the difference between an open and a restricted open site?
In the Summer Food Service Program (SFSP), there are three common types of sites: open sites, closed enrolled sites, and camps (residential and nonresidential). Open sites are those where meals are made available to all children in the area on a first come, first served basis. Both open and restricted open sites must serve children in geographical areas where 50 percent or more of the children residing in the school attendance area are eligible for free or reduced-price school meals. This percentage must be documented by data provided by public or non-profit private school officials, census data, welfare or education agencies, zoning commissions, or other appropriate sources.
An open site becomes a restricted open site when a sponsor chooses to restrict or limit the site’s attendance for reasons of security, safety, or control. A site that would normally be approved as a traditional open site may not be approved as a restricted open site as a matter of preference or convenience; the sponsor must demonstrate to the satisfaction of the State agency that a legitimate reason exists to limit access to the site [7 CFR 225.2].
- What is a closed enrolled site?
Closed enrolled sites serve only an identified group of children enrolled at the site. To qualify as a closed enrolled site, at least 50 percent of the enrolled children must be from households that meet the income eligibility guidelines. Sponsors can document an enrolled site’s eligibility by:
- Obtaining lists by names and eligibility status of enrolled children for free and reduced-price meals from schools where the children receive meals under the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). Parental consent forms are not required for the local school food authority (SFA) to provide this information to SFSP sponsors:
- Asking the parent or guardian of each enrolled child to complete an income eligibility form;
- Using school data to establish area eligibility for the site, rather than using the income eligibility form; or
- Using census data to establish area eligibility for the site, rather than using the income eligibility form [7 CFR 225.2; SFSP Memorandum, Closed Enrolled Sites, November 17, 2002].
3. What standards should be used in determining whether SFSP open sites are too close in proximity?
When evaluating proposed SFSP sites, the State agency must ensure that the area the site proposes to serve is not or will not be served in whole or in part by another site, unless it can be demonstrated to the satisfaction of the State agency that each site will serve children not served by any other site in the same area for the same meal [7 CFR 225.6(d)(1)(ii)].
States have discretion, therefore, in determining whether sites are targeting the same area or children. To support access to summer meals, it may be appropriate for States to allow sites in relatively close physical proximity to operate in the community, each serving its own participants. Sponsors should be able to explain why differences in the population of children they intend to serve require multiple sites in close proximity. For example, an open site at an elementary school may attract primarily young children, while an open site at a nearby teen center may attract primarily teens. Therefore, the State may determine that even though these sites are in relatively close physical proximity they attract different groups of children who may not be otherwise served.
Sites also may be close in proximity but separated by a physical barrier that limits access. For example, sites located on opposite sides of a busy highway may be close in proximity, but access to the sites is restricted due to inability of the children to safely cross the highway. The State may determine that the sites are serving different children based on the physical conditions that restrict access. Additionally, sites located in close proximity may be required to have the same mealtimes or shorter mealtimes to avoid the possibility of children traveling from one site to another.
4. **When using school data to determine area eligibility for SFSP, is there a particular month that sponsors must reference?
For purposes of the SFSP, areas in which poor economic conditions exist are those school attendance areas where at least 50 percent of the children are eligible for free or reduced-price school meals under the National School Lunch Program (NSLP) and the School Breakfast Program (SBP) [7 CFR 225.2].
To minimize administrative burden on the NSLP State agency, SFSP State agencies should use the data that is reported by the NSLP State agency for use in the Child and Adult Care Food Program (CACFP). While SFSP regulations do not require State agencies to designate the use of school data from one particular month, FNS encourages using school data from the month designated for CACFP, usually October. However, at the discretion of the SFSP State agency, data from a more recent month may be used if the data would establish area eligibility for an otherwise ineligible site.
5. In determining area eligibility, may eligibility be based on NSLP participation rates or must it be based only on enrollment data?
When relying on NSLP data, area eligibility must be based on the percentage of enrolled students eligible for free or reduced-price meals, not on participation data. NSLP enrollment data generate the percentage of students eligible for free or reduced-price meals based on the entire school population. The expectation is that the school enrollment data will reflect economic characteristics similar to that of the community from which the student population is drawn.
Participation data, on the other hand, consider only the children who participate in the NSLP, resulting in a less complete and accurate snapshot of the economic characteristics of the school, and therefore the surrounding community.
- When determining area eligibility of a school, can the percentage of children eligible for free or reduced-price school meals at another school in the same attendance area be used?
Yes, if a high school with less than 50 percent free or reduced-price school enrollment is located in the attendance area of a middle school where 50 percent or more of the enrolled children are eligible for free or reduced-price meals, for example, the high school would be area eligible.
- How do you determine a site’s area eligibility in cases where children regularly attend schools outside a designated area, for example, where there is busing or school choice?
In cases of school sites, the use of school data would typically be permissible. In other cases, it is best to refer to SFSP 03-2013, Determining Area Eligibility Based on School Data, November 23, 2012, available at http://www.fns.usda.gov/sites/default/files/SP06-2013os.pdf for specific guidance on this issue.
B. Sponsor or Site Approval
1. May a traditional institution that participates in CACFP during the school year switch to the SFSP for the summer?
Generally, traditional institutions that participate in CACFP may not claim reimbursement under SFSP [7 CFR 225.15(a)(2)]. However, CACFP institutions that have substantial changes in activities or enrollment or develop a separate food service program for children who are not enrolled in the CACFP, and meet SFSP eligibility criteria, may be approved to participate in the SFSP. Institutions may not switch back and forth between participation in CACFP and participation in SFSP to serve the same children.
Institutions that are approved for both the CACFP and the SFSP must ensure that the same children are not served meals in both programs and separate records must be kept for each
program [FNS Instruction 782-4, Revision 2].
2. Are there any restrictions on afterschool programs switching from the at-risk afterschool meals component of the CACFP during the school year to SFSP during the summer when school is not in session?
Generally, organizations that serve meals or snacks to children only through the at-risk afterschool meals component of CACFP during the school year may serve meals to all children through age 18 under SFSP during the summer months, subject to approval of their SFSP application by the State agency. For more information on streamlined participation requirements for CACFP institutions in good standing, please refer to [SFSP 06-2014: Available Flexibilities for CACFP At-risk Sponsors and Centers Transitioning to Summer Food Service Program, November 8, 2013 available at http://www.fns.usda.gov/sites/default/files/SP%2006_CACFP%2003_SFSP%2006-2014os.pdf].
However, a traditional child care center that also serves at-risk afterschool meals or snacks (e.g., the center has enrolled pre-school children in care during the day, but also serves at-risk afterschool meals or snacks to school-age children) may receive reimbursement under SFSP during the summer only for meals served to children who participate in the afterschool program during the school year. See Question B1 above for information regarding eligibility of the traditional child care component.
3. What is the NSLP Seamless Summer Option and how do the requirements differ from SFSP?
The NSLP Seamless Summer Option (SSO) offers a streamlined approach to feeding children in the summer. SFAs participating in the NSLP and SBP may offer meals through the SSO. Once approved, schools located in eligible areas may serve free meals to children, age 18 years and under. The same NSLP and SBP rules apply to meal services provided through the SSO.
Meals served under the SSO are reimbursed at the “free” rates prescribed by the Department of Agriculture (USDA) for school meals and snacks. Suppers are reimbursed at the NSLP free rate.
At camps operating the SSO, only those meals served to children who are eligible for free or reduced-price school meals are eligible for reimbursement at the free rate. Meals served to children who are ineligible for free or reduced-price meals are not reimbursable.
In both the SSO and the SFSP, sites must be located within the attendance area of a school where at least 50 percent of the children are eligible for free or reduced-price school meals in order to qualify as area eligible.
4. Under what circumstances may summer schools participate in SFSP?
Sponsors that administer SFSP at sites where an accredited summer school is in session must ensure that these sites are open to all children residing in the school attendance area served by the site, in addition to the children enrolled in the summer school program [7 CFR 225.14(d)(2)]. If the site is not open to the children of the community but provides meals only to enrolled summer school students, the site is not eligible to receive reimbursement for meals through SFSP
or the SSO. The NSLP and SBP are available to any school that hosts an academic summer school where access to meal services is limited to children enrolled in the summer school program. For more information on how these options differ, refer to the following comparison chart at http://www.fns.usda.gov/sites/default/files/SFSP_SeamlessComparisonChart.pdf.
- Is there a required number of children who must attend a site in order for the site to be approved to participate?
While there is no minimum requirement of child attendance at an SFSP site, it is important that a sponsor adequately evaluate the needs of an area it hopes to serve prior to finalizing site operations. Adequate Program planning requires an accurate estimate of the number of children that will be served so that the total potential reimbursement can be calculated. For new sites, sponsors can estimate the potential number of participating children by contacting schools and other organizations in the area to determine the number of children within a short walking distance to the site.
- **How many sites may a sponsor be approved to operate?
All sponsors may be approved to operate a maximum of 200 sites and serve a maximum total average daily attendance of 50,000 children. However, sponsors must demonstrate financial and administrative capability for Program operations for all sites at which they propose to conduct a food service. The State agency has the authority to limit the number of sites for a sponsor if Program requirements outlined in 7 CFR 225.14(c) are not met to the satisfaction of the State agency. Exceptions to these limits may be approved by the State agency if the sponsor can demonstrate that it has the capability to manage a larger program.
- May a site have two separate meal services, operated by two different sponsors?
Meal services may be operated by different sponsors at a site; however, the site may not exceed the maximum number of meals allowed under the regulations [7 CFR 225.16(b)]. For example, if a sponsor is approved to serve only lunch at a site, a different sponsor may be approved to serve breakfast or a snack at the same site, if the total number and type of meal services served at the site do not exceed the maximum allowed under the regulations.
C. Financial Management
1. If a SFSP site is administered by a nonprofit institution does it automatically meet the requirement to conduct a nonprofit food service under SFSP?
The purpose of the SFSP is to assist States in conducting nonprofit food service programs for children during the summer months and at other approved times [7 CFR 225.1, 7 CFR 225.6(e)(1)]. The institution’s status as public or private nonprofit cannot be used as evidence that the institution is operating a nonprofit food service. Nonprofit status is determined by the scope of the food service activities conducted and the use of the food service revenues.
A sponsor is operating a nonprofit food service if the food service operations are principally for the benefit of participating children and all the Program reimbursement funds are used solely for the operation or improvement of such food service.
- Are private nonprofit organizations required to have Internal Revenue Service tax-exempt status in order to be eligible to participate in the SFSP?
Yes. Private nonprofit sponsors must have tax exempt status under the Internal Revenue Code of 1986 in order to be eligible to participate in the SFSP [7 CFR 225.2]. Additionally, all sponsors must maintain records and supporting documentation to permit reviewers and auditors to evaluate and verify that the sponsor and the SFSP were operated on a nonprofit basis.
- May a CACFP sponsor establish a separate organization using a separate tax identification number to participate in the SFSP?
CACFP sponsors may not establish separate entities using separate tax identification numbers to serve the same children under different Child Nutrition Programs in order to avoid Program restrictions or to earn higher reimbursement. However, if there is a legitimate need for a separate organization and that organization has sufficient differences in activities and management and serves children who are not enrolled in the CACFP, it may be approved to participate in SFSP if it meets SFSP eligibility criteria. This will generally apply to organizations participating in the at-risk afterschool meals component of the CACFP. The organizations must ensure that the same children are not served meals in both Programs and keep separate records for each Program [FNS Instruction 782-4, Revision 2].
- Are nonprofit food service programs required to break even or maintain a negative account balance?
Managing a nonprofit food service does not require that a sponsor break even or operate at a loss. The nonprofit compliance is determined using the nonprofit food service revenues. All income to the Program must be retained and used for the sole purpose of operating a nonprofit food service. The sponsor is limited to allocating costs to the Program for allowable expenses of serving meals to eligible participants.
- Must a sponsor maintain SFSP funds in a separate account?
No. Sponsors are not required to maintain SFSP funds in a separate account. However, sponsors must be able to account for the receipt, obligation, and expenditure of all SFSP funds [OMB Circular A-110, Section 22(i)].
When a sponsor’s total food service is not conducted principally for the benefit of its own SFSP participants, the non-Program and Program components of the food service operation must be tracked separately. Through this separation, the sponsor must ensure that the nonprofit food service Program component does not support any non-Program food service activities, such as vending or catering operations or adult meal services.
Unallowable support occurs when non-Program costs are assigned to the nonprofit food service or when Program revenues are used for unallowable expenses or not retained for use in then on profit food service. The sponsor must maintain accounting records documenting proper cost allocation between the Program and non-Program components of its food service operation. The State agency must ensure through the review process that all SFSP reimbursements are used solely for conducting nonprofit food service operations. If the sponsor operates more than one Child Nutrition Program, SFSP reimbursements may be used for allowable costs relating to any of the Child Nutrition Programs.
- How should a state agency respond if it determines that a sponsor is using funds improperly?
If a state agency finds that a sponsor is using funds for expenses that are not allowable under any of the Child Nutrition Program operated by the sponsor, it must require corrective action. If funds were used for unallowable costs, the State should require the sponsor to replenish the funds to the Program. It should be emphasized that USDA funds may not be used to restore funds used for unallowable costs, but funds must come from another source.
If the sponsor is found to be seriously deficient and does not take appropriate corrective action, the State agency may consider termination of the agreement with the sponsor and recover funds used for unallowable costs [7 CFR 225.11].
- If reimbursements are made based on “meals times rates” how does a State have authority to collect funds that were used improperly?
Although under the simplified summer rules reimbursements are now based on meals times rates, sponsors still must comply with Program requirements. This means that the sponsor must operate a nonprofit food service, must use Program funds only for allowable expenses, and must comply with all Program regulations and policy guidance [FNS Instruction 796-4, Revision 4].
Sponsors that violate Program requirements may be assessed an overclaim if meal claims were determined to be inaccurate. Additionally, where it is determined that Program funds were used for an unallowable expense, sponsors may be required to repay the portion of the reimbursement that was attributable to the Program violation. Requiring a sponsor to repay Program funds is an appealable action [7 CFR 225.13].