Policy Memo 180

DOH-CACFP: Number 180 (11/16), Supersedes Number 79 (12/02), 100 (09/04) and 107 (7/05)

TO: All CACFP Sponsoring Organizations

FROM: Dwight LaDu, State Director, Child and Adult Care Food Program

SUBJECT: Audit Requirements for Nonprofits and For-Profits

  1. Purpose and Scope
  2. The purpose of this memorandum is to provide all Child and Adult Care Food Program (CACFP) Sponsoring Organizations (Sponsors) and independent centers with information on revisions to the Office of Management and Budget (OMB) Circulars' audit requirements.

  3. Background Information
  4. OMB's requirements for federal award programs is titled "Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards" (also known as the "Super Circular") which can be found at http://www.health.ny.gov/prevention/nutrition/cacfp/docs/omb_super_circular.

    The "Super Circular" combines and replaces OMB Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133. In the past, OMB required audits be completed annually for agencies that expended more than $500,000 in Federal funds. This threshold has increased to $750,000. This is effective for an agency which fiscal year ends on or after December 31, 2015.

  5. Summary of Requirements
  6. CACFP Sponsors that do not expend $750,000 or more in Federal funds during a fiscal year, are not required to obtain an audit and the cost of an audit would not be a CACFP allowable expense.

    All Sponsors and independent centers that expend $750,000 or more in Federal funds during a fiscal year are required to have an organization-wide audit conducted by a Certified Public Accountant (CPA) in accordance with the Compliance Supplement for CACFP, CFDA 10.558. Some examples of Federal funds are CACFP meal reimbursement, Head Start, tuition subsidy from NYC Human Resources Administration (HRA), the NYC Administration for Children's Services or the county Department of Social Services.

    This applies to all types of CACFP participating organizations (private, nonprofit and for-profit agencies, schools, universities, municipalities, hospitals, Native American tribes, etc).

    If an audit is required, the allocated cost associated with the CACFP portion of the audit is an allowable CACFP expense; however, CACFP does not reimburse Sponsors directly for the cost of an audit.

    Cost principles and procedures for the audit fall under the guidance in Title 48 - Federal Acquisition Regulations System, Chapter 1, Subchapter E - General Contracting Requirements, Part 31 - Contract Cost Principles and Procedures.

    Beginning with reports for the December 31, 2015 fiscal year end, the organization-wide audit must be submitted electronically to the Federal Audit Clearinghouse (https://harvester.census.gov/facweb) within the 30 calendar days after receipt of the auditor's report or within nine months of the end of the Sponsor's fiscal year, whichever is earlier.

    An organization-wide Generally Accepted Auditing Standards (GAGAS) compliant (Yellow Book) audit report, if required because of other additional New York State Department of Health (NYS DOH) contract funding, must be submitted to the New York State Department of Health's Audit Clearinghouse within nine months of the end of the Sponsor's fiscal year. A Single Audit report submitted to the Federal Audit Clearinghouse, because of other Federal award expenditures not having passed through NYS DOH, will satisfy NYS DOH's reimbursement contract GAGAS report submission requirements.

    The mailing address is:

    New York State Department of Health Audit Unit
    Corning Tower Room 2560
    Albany, New York 12237-0041

    When CACFP Sponsors do not submit audit reports within the required timeframe the Federal Regulations (3052.225) and the "Super Circular" require State agencies to take prompt action. If audits are not submitted, CACFP may name the Sponsor seriously deficient in it's operation of CACFP. This can lead to termination of the agreement with the State and disqualify the Sponsor and principals from participation in CACFP for 7 years.

    Questions regarding these audit procedures or the requirements should be directed to the NYS DOH Audit Clearinghouse at (518)-473-3920.