CACFP Policy Memo Number 11

DOH-CACFP: Number 11 (7/95)

TO: CACFP Sponsoring Organizations of Day Care Centers

FROM: Jeanne Colegrove, State Director, Child and Adult Care Food Program

SUBJECT: Administrative Budgets/Administrative Payments

Through this communication, the CACFP is reminding Sponsoring Organizations of Day Care Homes of the regulations regarding full reimbursement of administrative expenses. Sponsors that do not follow the required procedures will be required to reimburse CACFP for excess payments.

Federal regulations define the maximum reimbursement as follows:

"Sponsoring organizations for day care homes shall receive payments for administrative costs. During any fiscal year, administrative costs payments to a sponsoring organization may not exceed the lesser of (1) actual expenditures for the costs of administering the Program less income to the Program, or (2) the amount of administrative costs approved by the State agency in the sponsoring organization's budget, or (3) the sum of the products obtained by multiplying each month the sponsoring organization's participating homes by the current administrative payments for day care home sponsors.

"During any fiscal year, administrative payments to a sponsoring organization may not exceed 30 percent of the total amount of the administrative payments and food service payments for day care home operations." (7 CFR 226.12 (a))

In other words, a Sponsoring Organization is not allowed to keep administrative payments that are more than the actual expenditures reported on their monthly claim forms, or more than the administrative costs shown in their approved budget. Therefore, a Sponsoring Organization should take the following steps to make certain that it is able to retain the full amount of the administrative payments to which it is entitled:

  1. Update, by budget category, Program expenditures on the monthly Day Care Home Claim for Reimbursement (DOH-3709). Updates should be done on a regular basis to accurately reflect approved, allowable Program expenses. The total expenditures reported on the last September claim or before 90 days after September 30 of each year will be used by CACFP as a Sponsor's annual actual expenditures.
  2. Request a budget amendment(s). The total approved budget should always be greater than or equal to the anticipated administrative payments from CACFP. Budget amendments may be requested any time during a fiscal year; however, all budget amendments for a given fiscal year must be processed and approved by CACFP by September 30. Submit budget amendments in writing. It is recommended that CACFP receive all final budget amendments no later than September 15. Budget amendments should identify which budget categories will be increased and/or decreased and include a brief justification for the changes.

If you have any questions regarding the regulation or CACFP procedures, please call the CACFP Fiscal Unit at 1-800-942-3858.