Documenting Employee Time and Effort in the CACFP

This Management Bulletin (MB) provides updated guidance to agencies participating in the Child and Adult Care Food Program (CACFP) regarding federal requirements pertaining to documentation of time and effort for employees whose salaries and wages are paid for with CACFP funds. This MB supersedes California Department of Education (CDE) Office of Child Nutrition Services Notification Number 84-223, issued in November 1984, and Child Nutrition and Food Distribution Division Policy Memorandum 38-708: Allowable Administrative Costs Instruction for Day Care Home Sponsors issued in June 1988.

Note: School food authorities that participate in the CACFP (i.e., food service directors, school business officials, district superintendents, and school administrators) must follow the time and effort documentation requirements explained in SNP-06-2014, located on the CDE School Nutrition Programs Management Bulletins web page.

All other agencies participating in the CACFP must follow the requirements explained below:

Background

Title 2, Code of Federal Regulations (2 CFR), Part 225, Appendix B, Item 8.h, requires employees who are paid with federal funds to document their time and effort within the federal program. The federally funded portion of the employee’s salary must be equivalent to the actual time and effort the individual spends on duties directly associated with that federal program.

Personnel Activity Report Definition

All CACFP employees whose compensation is paid at least in part with CACFP funds must maintain time distribution reports—also known as personnel activity reports (PAR). The purpose of a PAR is to ensure that agencies participating in the CACFP do not use CACFP funds to compensate employees for time spent working on non-CACFP activities, which is not allowed under the terms and conditions of the CACFP federal award (U.S. Department of Agriculture [USDA] Food and Nutrition Service (FNS) Instruction 796-2, Revision 4 [FNS 796-2, Rev. 4], Section VIII I 23 c[2] and [3]).

A PAR should provide an after-the-fact certification of an employee’s actual labor. PARs must be signed after the employee’s tasks are completed. A separate PAR must be kept for each employee and the PAR requirements apply to both exempt (i.e., salaried) and nonexempt (i.e., paid hourly) employees per 2 CFR, Part 230, Appendix B, Item 8.m.

A PAR is not required if an employee charges 100 percent of their labor to the CACFP, and the CACFP activities are listed on the employee’s duty statement. In this case, the agency may use a standard timesheet to document the hours the employee worked. The timesheet must accurately reflect labor worked and must be signed at the end of the pay period by the employee and supervisor after the tasks are completed.

Personnel Activity Report Documentation Requirements

The requirements for a PAR or equivalent documentation, which can be found in 2 CFR, Part 225, Appendix B, Item 8.h(5), and FNS 796-2, Rev. 4, Section VIII I 23 c(3), state that a PAR must: 

• State the employer’s name and the employee’s name and position
  
  
• Show the actual after-the-fact breakdown of the employee’s hourly work schedule for CACFP and non-CACFP activities, and the actual after-the-fact breakdown of the employee’s administrative and operating labor worked within the CACFP activities
  
  
• Account for the total activity for which the employee is compensated, including part-time work or overtime (total activity means all of the time an employee worked, not just the amount of time the employee spends on activities directly associated with the CACFP)
  
  
• Be prepared at least monthly and coincide with one or more pay periods
  
  
• Be signed and dated by the employee and supervisor after the tasks are completed

Budgeted or estimated labor reporting is not allowable. For example, an employee may not estimate that they complete approximately four hours every day for CACFP activities and four hours every day for non-CACFP activities. The PAR must accurately reflect the actual hours worked on CACFP and non-CACFP activities each day.

Neither the CDE nor federal regulations require agencies participating in the CACFP to use a specific PAR form. A sample PAR is available in the Download Forms section of the Child Nutrition Information and Payment System (CNIPS), Form ID CACFP 73. The agency may use this sample PAR, or its own PAR, as long as the PAR satisfies all of the federal requirements found in 2 CFR, Part 225, Appendix B, Item 8.h(5), and in FNS 796-2, Rev. 4, Section VIII I 23 c(3).

The CACFP participating agency must keep all PARs, timesheet documents, and duty statements on site for at least three years plus the current fiscal year, or longer, pending the outcome of an administrative review or audit (2 CFR Section 226.10[d]).

Other Personnel Activity Report Documentation Requirements for Center Sponsors and Sponsors of Unaffiliated Centers

Administrative funds are provided to day care home sponsors based on the current USDA reimbursement rate multiplied by the number of providers approved on their program. Sponsoring agencies of centers may apply no more than 15 percent of their annual reimbursement to administrative costs (FNS 796-2, Rev. 4, sections VI C 2 and IX B 3 c[4]). Administrative costs consist of all administrative activities including: 

• Eligibility determinations
• Claim preparations
• Monitoring
• Training

Operating costs that include food and food service labor are not considered administrative costs. Sponsoring agencies may use any amount of reimbursement to cover operating costs.

Summary

Federal regulations pertaining to documentation of employee time and effort require that employees paid in part from CACFP funds must document all labor charges through the use of PARs or equivalent documentation. If an agency participating in the CACFP pays for the CACFP share of its labor costs with CACFP funds and fails to maintain proper PARs, the California Department of Social Services may issue a finding that disallows the costs and may bill the agency’s general fund for repayment.

Contact Information

If you have any questions regarding this MB, please contact your CACFP specialist. A contact list of CACFP specialists is also available in the Download Forms section of the CNIPS, Form ID CACFP 01. You can also contact the CACFP Office Technician by email at CACFPinfo@dss.ca.gov to be directed to your CACFP specialist.

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