CACFP Administrative Manual Section 6.5
Section 6: Financial Management
Section 6.5 Calculation of the Administrative Funding for Family Day Care Home Sponsoring Organizations
The U.S. Department of Agriculture, Food and Nutrition Service (FNS) issued CACFP 06–2011, Child Nutrition Reauthorization 2010: Administrative Payments to Family Day Care Home Sponsoring Organizations, on December 22, 2010. This guidance advises that a simpler method for determining monthly administrative payments had been established by the Healthy, Hunger-free Kids Act (HHFKA). A DCH sponsoring organization’s monthly payment will be based on the statutory formula that will no longer require a comparison with actual expenditures or budgeted administrative costs.
This change has been a standard operating practice for State agencies since 2010, and was formally adopted on August 23, 2023, through the USDA Final Rule: Child Nutrition Program Integrity, by amending Title 7, Code of Federal Regulations (7 CFR), Section 226.12(a) to establish that administrative costs payments are determined only by multiplying the appropriate administrative reimbursement rate by the number of DCHs of the sponsoring organization submitting claims for reimbursement during the month. Administrative reimbursement rates are announced annually in the Federal Register.
Please note: DCH sponsoring organizations are still required to submit annual budgets and remain responsible for correctly accounting for costs and maintaining records and sufficient supporting documentation to demonstrate that the claimed costs were incurred, are allocable to the program, and comply with Federal regulations and policies. The California Department of Social Services (CDSS) must continue to recover reimbursements that are unallowable or that lack adequate documentation. However, historical considerations including the expenditures for administrative costs, the amount of costs approved in the administrative budget, and the 30 percent restriction on the total amount of administrative payments and food service payments for DCH sponsoring organizations, no longer apply in determining the DCH sponsoring organization’s monthly payment.
Calculation of Monthly Administrative Reimbursement
To determine the amount of payment, the State agency must multiply the appropriate administrative reimbursement rate, which is announced annually in the Federal Register, by the number of DCHs of the sponsoring organization submitting a claim for reimbursement during the month.
FNS determines administrative reimbursement by annually adjusting the following base administrative rates as set forth in 7 CFR 226.4(i):
- Initial 50 day care homes, 42 dollars;
- Next 150 day care homes, 32 dollars;
- Next 800 day care homes, 25 dollars;
- Additional day care homes, 22 dollars.
Information regarding the current reimbursement rates can be located on the CDSS CACFP Reimbursement Rates web page. With CDSS approval, a sponsoring organization may carry over a maximum of 10 percent of administrative funds received under 7 CFR 226.12(a)(1) for use in the following fiscal year. If any carryover funds are not obligated or expended in the following fiscal year, they must be returned to the CDSS, as described in 7 CFR 226.7(j). For additional information regarding the carryover process, sponsoring organizations can refer to the Procedures for Unused Federal Administrative Payments.
References: Child Nutrition Reauthorization 2010: Administrative Payments to Family Day Care Home Sponsoring Organizations; Title 7, Code of Federal Regulations (7 CFR), Section 226.12(a); 226.4(i); Final Rule: Child Nutrition Program Integrity.
Questions: A list of program specialists that can assist is found on the CACFP Contact List.
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