Policy Memo 152H
DOH-CACFP: Number 152H (02/11), Supercedes 26H (8/97)
TO: CACFP Sponsoring Organizations of Day Care Homes Receiving Advance Payments
FROM: Lynne Oudekerk, State Director, Child and Adult Care Food Program
SUBJECT: Advance Payment Recovery Procedure
I. Purpose and ScopeBy Federal regulation, the Child and Adult Care Food Program (CACFP) must recover outstanding administrative and operating advance payments each fiscal year. This memorandum will describe the procedure that CACFP follows to recover payments advanced to Sponsors of Day Care Homes.
II. Background Information
Sponsors have the opportunity to request an administrative advance and/or an operating advance payment when completing their initial New Sponsor Application - Part 2 for Sponsoring Organizations of Day Care Homes (CACFP-112). Thereafter, Sponsors may send a letter to CACFP requesting a change in advance status at any time. CACFP no longer allows Sponsors partial advances. In the future, Sponsors will have the ability to electronically request an administrative and/or operating advance using the CACFP Information and Payment System (CIPS).
Advance payments are funds that CACFP issues in October, at the beginning of the Federal fiscal year. The new year advance is based on the September claim activity. The amount of the advance(s) is then adjusted monthly, based on the current month's administrative and/or meal reimbursement. The new fiscal year advance will be issued to Sponsors after the prior fiscal year advance has been completely recovered and new year Federal funds are available.
CACFP will recover advances over a two month period to minimize the impact on Sponsors. The advance recovery process begins with the processing of the August claim each year. In the first month of the advance recovery, the entire outstanding advance will be recovered and only one-half of the advance amount for the following month will be issued. In the second month, the entire outstanding advance will be recovered and no advance amount will be issued. The recovery process results in Sponsors receiving checks that are considerably smaller than usual.
Sponsors receiving operating advance payments may institute an advance recovery procedure to recover advance payments made to Providers. The recovery process should be similar to the process used by CACFP. It is recommended that Sponsors notify Providers before an advance recovery process is implemented. Throughout the advance process Sponsors are still responsible to make payments to Providers within five business days from the receipt of the check or electronic deposit.
Sponsors in receipt of advance funds that cease participation, stop claiming, or are closed or terminated during the Federal fiscal year, are still responsible to return the full amount of the outstanding advance. Failure to return or recover the advance will result in the collection process in accordance with Chapter 55 of the New York State Finance Law and FNS Instruction 420-1. In addition, the Sponsor and responsible individuals will be named seriously deficient, in accordance with:
7CFR226.6(c)(3)(ii)(E) Failure to return to the State agency any advance payments that exceeded the amount earned for serving eligible meals, or failure to return disallowed start-up or expansion payments.
If the advance(s) remains outstanding, CACFP will disqualify the Sponsor and the responsible principals from participation in CACFP and place the individuals and Sponsor on the National Disqualification List (Ndl). All parties and the Sponsor will remain on the Ndl until the outstanding debt is paid in full. Placement on the Ndl will directly affect the responsible individuals and the Sponsor's participation in other Child Nutrition Programs.
III. Summary of Changes
Sponsors are eligible to request operating advance payments while participating in CACFP. Advance payments issued each Federal fiscal year must be recovered in full before the new year advance is issued, or when a Sponsor no longer participates in CACFP. The Sponsor and responsible individuals will be named seriously deficient when the full amount of the advance is not returned or recovered during any fiscal year. Sponsors may choose to withdraw their request for advance payments at any time.
Although Sponsors receive less money during the months CACFP recovers the advance, regulations require that the Sponsor still comply with all CACFP requirements. Sponsors that find the recovery process difficult should request that CACFP discontinue the advance payments so that the reimbursement checks are more consistent throughout the year.
If you have any questions, please contact the CACFP Resource Management and Operations Unit at the following telephone numbers: 518-402-7400 or 1-800-942-3858, ext. 27106.