Scope of Services (Professional)

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1. CLAIM SERVICES

1.1 CLAIM SCHEDULE

CACFP Solutions performs all final monthly claim services on a regular schedule at the beginning of each month for the prior month’s claim by using 1 of 2 claim check-in methods:

(a) STANDARD CLAIM CHECK-IN

5th of every month

(b) EARLY CLAIM CHECK-IN (optional):

1st – 4th of every month *

*Must qualify for early check-in and request by the stated cut-off deadline.

1.2 EARLY CLAIM CHECK-IN

Early claim check-in is available upon request when a Client releases an eligible claim early between the 1st – 4th of every month, regardless of weekends or holidays.

The cut-off to request early claim check-in is 2:00 PM on the 4th .

The following criteria must be met for a claim to be eligible for early check-in.

ALL Meal Count / Attendance records and Meal Production Record are complete for the claim.
At least 5 valid receipts were submitted by the 23rd of the claim month to be processed.
All Time Distribution Reports for the claim month have been submitted & approved.
Claims will be ready for filing in 24-hours or less.

1.3 STANDARD CLAIM CHECK-IN

All claims that were not previously accepted for Early Check-In will be automatically checked-in for claim service as-is on the 5th of every month, as early as 12:01 AM, regardless of weekends or holidays.

This means any claim records to be included must be ready no later than the 4th at 11:59 PM.

Claims will be ready for filing in 72 hours or less.
Claim services will be provided for records available at the time of check-in.
It is the Client’s full responsibility to manage their daily recordkeeping, follow CACFP guidelines, and prepare their claim records for timely service.
Requests for claim check-in delays to allow additional time for recordkeeping will not be accepted.
Claim records may not be re-opened for edits after claim finalization procedures are completed.

2. EXPENSE RECORD PROCESSING

2.1 Definitions

Expense records are defined as receipts or labor expense details that meet the criteria to be counted as a valid expense for the CACFP.

Purchase receipts may come in the form of actual purchase receipts, purchase order confirmation forms (such as online orders), or similar documents that demonstrate a CACFP purchase.
Labor Expense Processing is defined as analyzing payroll information from approved CE Budget Details and Time Distribution Reports for the purpose of establishing laborexpense records as an allowable expense under CACFP guidelines.
Labor expense records are automatically generated by the SaaS system based on:

2.2 CLAIM EXPENSE PROCESSING SERVICES

Clients will receive access to a solution that permits the capture + upload of digital receipt copies. Receipts will be processed from those digital copies.

Individual receipt expense records will be created so that the 1) receipt image and 2) expense details produced during processing are available to the Client for review.

The expense record will include any details as to the status of the receipt so the Client will be able to determine if a submitted receipt was accepted or not.

2.3 RECOMMENDATION TO SEPARATE CACFP & NON-CACFP PURCHASE

CACFP Solutions highly recommends that each client separate their CACFP purchases from Non-CACFP purchases.

This prevents CACFP expenses that may be legitimately purchased with CACFP funds from being comingled with other unallowable purchases that should not be purchased with CACFP funds.
This encourages better organization of business expenses which may be valid for the Client’s daycare or afterschool operation but are not valid CACFP expenses.

The processing method applied during standard monthly claim processing (Level 1) assumes the client is submitting valid receipts that contain only allowable items.

Clients should only submit receipts with CACFP-allowable food and non-food items.
Every item on every receipt will be identified as food or non-food during processing, even if the Client has not followed the recommendations and includes receipts that indicate the purchase of unallowable CACFP items.

2.4 EXPENSE RECORDS PROCESSING: LEVEL 1 & 2 METHODS

Regular monthly claim expense processing of receipts or labor expense documentation includes (Level 1) processing, which is outlined in this document. Claims that are scheduled for an administrative review will be re-evaluated and updated if necessary using (Level 2) processing techniques.

2.5 RECEIPT PROCESSING (LEVEL 1)

2.5.1 PRIMARY PURPOSE of (LEVEL 1) RECEIPT PROCESSING

(Level 1) processing is the standard method used during regularly monthly claim service. The primary function of (Level 1) receipt processing is to:

Identify how many (if any) receipts have been submitted for a particular claim month.
Establish a good-faith estimate of total expenses vs. claim reimbursement for that claim month.
Establish a good-faith determination as to whether the claim has “cleared” the program expense requirement. This means that in relation to the claim’s final reimbursement amount, the claim includes adequate expense documentation to demonstrate operation of a non-profit food service.

2.5.2 WHAT (LEVEL 1) RECEIPT PROCESSING DOES NOT INCLUDE

(Level 1) processing is not for the purpose of identifying, lining out, or otherwise, deducting unallowable items from expense record calculations.

Claim processors assume the receipt is a valid receipt produced from a legitimate purchase.
CACFP Solutions does not compare the receipt against any financial record to verify the amount to verify the legitimacy of receipts.
Claim processors are not responsible for taking measures to specifically identify or adjust an expense record when unallowable items are obviously included on the receipts.
If an unallowable item is observed during processing, the expense record will processed as usual but will be flagged to indicate something unallowable appeared on the receipt. This is considered a professional courtesy and is not a service CACFP Solutions is required to perform during receipt processing.
It is the Client’s complete responsibility to submit valid receipts that meet CACFP guidelines and do not contain non-allowable purchases.
Inclusion of unallowable items will result in inaccurate claim reporting of “Reimbursement vs. Expenses” analysis results. This analysis is important to confirm whether sufficient valid expenses have been documented for a claim to prove the operation of a non-profit food service.

DISCLAIMER: CACFP Solutions is not responsible for any corrective action measures required by TDA, including the requirement to repay CACFP funds, that may be caused by the inclusion of unallowable items on receipts, or the inclusion of receipts that are not procured from a legitimate purchase.

2.6 LABOR-EXPENSE PROCESSING (LEVEL 1)

2.6.1. PRIMARY PURPOSE OF (LEVEL 1) LABOR-EXPENSE PROCESSING

(Level 1) processing is the standard method used during regularly monthly claim service. The primary function of (Level 1) Labor-Expense processing are the same for labor-expense records as they are for receipt processing, as described in 2.5.1.

2.6.2 WHAT (LEVEL 1) LABOR-EXPENSE PROCESSING DOES NOT INCLUDE

(Level 1) processing is not for the purpose of specifically collecting payroll records for each month and creating a precise labor-expense record for each employee.

To protect the confidential information for each client and their staff, (Level 1) processing should provide a sufficient estimation of valid labor-expense totals for a claim month – if the Client has maintained updated budget and payroll data with CACFP Solutions.

2.6.3 LABOR-EXPENSE RECORDS ARE AUTOMATICALLY GENERATED

This may be completed by CACFP Solutions staff or directly by the SaaS system depending on when this is reviewed in relation to deployment of the upgraded SaaS system.

A labor-expense record for an applicable claim will automatically be created for the Client’s claim when these criteria are met for the claim:

1 - An approved Budget is on file for the CE that identifies:

Employees who participate in CACFP activities.
The approved budget identifies the maximum percentage of the employee’s payroll expenses that may be counted as a CACFP labor expense.

2 - There is a valid Time Distribution Report (TDR) on file.

To be considered a valid TDR, the report must meet these criteria:

The Claim Month reported on the TDR is for the claim month being processed.
The TDR has been completed and signed by the employee.
The TDR has been approved by a supervisor.

2.6.4 CLIENT'S RESPONSIBILITY TO MAINTAIN UPDATED BUDGET DETAILS ON FILE

CACFP Solutions relies heavily on the assumption that each CE’s budget is accurate when preparing expense methods using Level-1 processing. It is the Client’s responsibility to work with CACFP Solutions to ensure all budget categories are reviewed regularly and updated as needed.

2.6.5 MINIMUM LABOR PERCENTAGE IS USED FOR EXPENSE RECORDS

The percent of CACFP hours reported on the TDR will be applied in the creation of the expense report if the percentage is lower than the percentage assigned to the employee on the approved budget. If the percentage on the TDR is higher than the percentage assigned on the approved budget, the lower percentage from the TDR will be used.

DISCLAIMER: CACFP SOLUTIONS IS NOT RESPONSIBLE FOR ANY CORRECTIVE ACTION OR CACFP REPAYMENTS THAT ARE CAUSED BY THE INCLUSION OF LABOR-EXPENSE RECORDS THAT CANNOT BE LATER PROVEN BY A COMPARISON OF ACTUAL PAYROLL DOCUMENTATION DURING AN ADMINISTRATIVE REVIEW OR ANY SIMILAR AUDIT PROCESS.

2.7 RECEIPT PROCESSING (LEVEL 2)

2.7.1 PURPOSE OF (LEVEL 2) RECEIPT PROCESSING

All of the recommendations and guidelines provided in 2.6.1 still apply. (Level 2) processing is an enhanced claim processing method that is applied to claims specifically selected for evaluation during an administrative review. It is expected that the Client has been following all recommendations prior to any (Level 2) processing taking place.

Assuming the Client has been following recommendations reported to the Client by CACFP solutions during monthly services, Level-2 processing is intended to help eliminate any avoidable findings during an administrative review by adjusting the claim expense records to eliminate the unallowable items from being included in the calculations.

If a Client has not followed CACFP recommendations for expense submissions, (Level 2) processing may result in an expense shortage for that claim that had not previously been identified after unallowable items are deducted from the
receipt(s) during (Level 2) analysis.

(LEVEL 2) RECEIPT PROCESSING INCLUDES:

All the steps described in (Level 1).
Specific attempt to identify unallowable items on receipts and deduct them from the receipt totals produced.
Re-calculation of food vs. non-food totals to adjust for any deducted items.
Adjusted claim reports to reflect a revised analysis of “Reimbursement vs. Expenses” outcomes.

2.7.2 Client's Responsibility to Submit Valid Receipts

Inclusion of unallowable items during (Level 1) processing will result in inaccurate claim reporting of “Reimbursement vs. Expenses” analysis results.

This analysis is important to confirm whether sufficient valid expenses have been documented for a claim to prove the operation of a non-profit food service.

(Level 2) processing may reveal that the claim documents do not support the Client’s requirement to operate a non-profit food service. This is why CACFP Solutions strongly recommends that each Client separate their CACFP purchases from nonCACFP purchases.

DISCLAIMER: CACFP SOLUTIONS IS NOT RESPONSIBLE FOR ANY CORRECTIVE ACTION MEASURES REQUIRED BY TDA, INCLUDING THE REQUIREMENT TO REPAY CACFP FUNDS, THAT MAY BE CAUSED BY THE INCLUSION OF UNALLOWABLE ITEMS ON RECEIPTS, OR THE INCLUSION OF RECEIPTS THAT ARE NOT PROCURED FROM A LEGITIMATE PURCHASE.

2.8 LABOR-EXPENSE PROCESSING (LEVEL 2)

2.8.1 PURPOSE OF (LEVEL 2) LABOR-EXPENSE PROCESSING

All of the recommendations and guidelines provided in 2.6.1- 2.7.1 still apply. (Level 2) processing is an enhanced claim processing method that is applied to claims specifically selected for evaluation during an administrative review. It is expected that the Client has been following all recommendations prior to any (Level 2) processing taking place.

Since the Client will submit actual payroll documentation as step in the administrative review preparation procedures, claim processors will use the actual payroll records, the TDR details, and the CE Budget Details to update the existing laborexpense records to replace the previous estimations with precise labor expenses.

Assuming the Client has been following recommendations reported to the Client by CACFP solutions during monthly services, (Level 2) processing is intended to help eliminate any avoidable findings during an administrative review
by adjusting the claim’s labor-expense records to precisely report labor-expense details for the claim based on:

Approved Budget details
Approved Time Distribution Report
Actual payroll records provided by the Client.

The adjustments to expense records will be relatively small if the Client has followed all recommendations reported during monthly services.

(LEVEL 2) LABOR-EXPENSE PROCESSING INCLUDES:

Collection of actual payroll records, such as paystubs or payroll reports.

Re-calculation of actual labor expenses for each employee based on TDR, CE Budget, and payroll records.
Removal of any labor-expense records that do not have valid payroll documentation available.
Adjusted claim reports to reflect a revised analysis of “Reimbursement vs. Expenses” outcomes.

2.8.2 Client's Responsibility to Submit Valid Payroll Records

This analysis is important to confirm whether sufficient valid expenses have been documented for a claim to prove the operation of a non-profit food service.

DISCLAIMER: CACFP SOLUTIONS IS NOT RESPONSIBLE FOR ANY CORRECTIVE ACTION MEASURES REQUIRED BY TDA, INCLUDING THE REQUIREMENT TO REPAY CACFP FUNDS, THAT MAY BE CAUSED BY ANY LABOREXPENSE SHORTAGE WHEN COMPARED TO REIMBURSEMENT AMOUNT.

3. PROCESSING DEADLINES & FEES (EXPENSE RECORDS)

3.1 DEADLINES FOR PROCESSING EXPENSE RECORDS POST-CLAIM FINALIZATION

Since expense records do not play a role in the direct calculation of the claim reimbursement, CACFP Solutions will continue to accept and process expense records at no additional charge for a limited period after Claim Services are performed on that claim per the Expense Submission Deadline Schedule.

3.2 POLICY FOR ACCEPTING RECEIPT RECORDS POST-CLAIM FINALIZATION

Receipts are accepted for additional processing without exception, though receipt records submitted after the Expense Submission Deadline for the applicable claim will incur additional fees for late processing.

Late claim processing fees are outlined in Exhibit C – Pricing & Billing Summary.
Any late processing fees will accrue during a service month and billed once monthly as a separate invoice from the regular monthly service invoice.
CACFP Solutions can make available an itemized breakdown of the individual late processing fees upon request.

3.3 POLICY FOR CREATING NEW LABOREXPENSE RECORDS POST-CLAIM FINALIZATION

******Time Distribution Reports will only be accepted through the Expense Submission Deadline – no exceptions.****

Following that deadline, any outstanding Time Distribution Reports that are incomplete for any reason will no longer eligible for use in the creation of a labor expense record for the employee associated with that Time Distribution Report.

3.4 DEADLINES FOR EXPENSE RECORD SUBMISSION

The standard deadline for submitting receipts or valid TDRs is the last day of the month following the actual claim month. Depending on the record type and date, this allows approximately 30-60 days to submit them.

TDRs submitted after the deadline will not be accepted for processing.
Any additional receipts submitted by the deadline will be processed as a late receipt.
Additional fees for late processing will be billed on a single invoice once monthly. See Exhibit C for pricing.

Expense Record Deadlines By Claim Month

Claim Month	Receipt Processing Deadline
January	02/28
February	03/31
March	04/30
April	05/31
May	06/30
June	07/31
July	08/31
August	09/30
September	10/31
October	11/30
November	12/31
December	01/31

4. ACCOUNT PLANS & PROGRAM CONSULTING

4.1 Ongoing Program Training & Support

CACFP Solutions offers ongoing program support as part of each Client’s Account Plan:

Monitor CACFP policy changes and inform the Client of relevant changes and what they mean for the Client. If applicable, CACFP Solutions will support the Client in implementing any necessary changes to remain Program-compliant.
Offer ongoing program training and support as needed to new or existing staff.

4.2 Reports, Alerts, Reminders for Transparency

CACFP Solutions will provide report and alerts via email, text, and via customer dashboards and other system reports to provide transparency to the Client regarding program results or potential issues. The Client is expected to utilize the tools to help them self-manage areas of the Program which may require review (at a minimum) or additional actions.

4.3 Scheduled Program "Check-Ins" Throughout the Year

CACFP Solutions will monitor the Client’s program outcomes and offer a personal check-in / “Program Evaluation” three (3) times annually. The purpose is to perform a detailed program analysis, identify any non-compliance areas, offer suggestions to improve program benefits or resolve other issues or concerns raised by CACFP Staff or by the Client. These reports will only be shared with the client.

4.4 Support in Scheduling and Documenting Required Site Visits (Monitor Reviews)

CACFP Solutions will establish a schedule for the purpose of reminding the Client when they are due to conduct a monitor review at their facility. CACFP Solutions staff support the client by providing the information that is necessary to be reviewed during the process, as well as documenting the results per details provided by the client.

4.5 Tracking of Required CACFP Program Training

CACFP Solutions will monitor the status of annual required training and training of new staff throughout the year. Reminders will be provided to help the Client identify what outstanding training requirements are not met. Results can be tracked by CACFP Solutions staff by Program Year.

5. PROJECT-BASED PROGRAM SUPPORT

5.1 Project Scope of Services

CACFP Solutions will provide project support as it relates to various recurring events:

ANNUAL CE CONTRACT RENEWALS
o Support the preparation and submission of required records.
ADMINISTRATIVE REVIEWS (AUDITS)
o Support the preparation and submission of required records.
o Support the preparation of Corrective Action Plans as required.
o Support the implementation of any corrective action measures, where possible and within the scope of these Professional Services.
AMENDMENTS TO CE APPLICATION DETAILS OR BUDGET
o Support the preparation and submission of required records.

5.2 Any Other Projects Require Separate Agreement

Any other projects that may occur are not within the scope of the related Order for Services and would be ordered separately and subject to separate invoicing.

Assisting the client with projects is contingent on the Client’s cooperation with preparation, document collection, and responses to staff who are responsible for assisting with the projects within the specified deadlines.

5.3 Cooperation & Participation Required by Client to Perform Services

Time is of the essence and certain deadlines must be met by the Client to proceed with project duties.

CACFP Solutions is under no obligation to continue project services, or to rush the typical allotted time to complete certain activities, if the client is not producing requested information by the stated deadlines, or if the client is not responding to CACFP Solutions’ staff in a timely manner. Cooperation includes, but is not limited to:

Promptly notifying CACFP Solutions staff of any communications from TDA, USDA, licensing authorities, or any other agencies representing a matter that may impact the CE’s CACFP participation.
Adhering to Project Plans developed and provided for each relevant project.
o Promptly submitting requested materials by the stated deadlines.
o Promptly responding to requests within 3 business days.
o Cooperating with scheduling time with CACFP Solutions staff for online meeting and screen-sharing sessions where necessary to support the client in submitting information in UNPS, to TDA, or other officials who have requested information as part of the common projects outlined.

6. DISCLAIMERS FOR PROFESSIONAL SERVICES

6.1 Strict Adherence to CACFP Guidelines

All claims must be processed per CACFP guidelines – no exceptions.

6.2 Claim Holds

Claims will not be placed on hold to allow additional time for record updates or completion.

6.3 Account Preparedness

Customer will make available all prepared accounts and claim documents necessary for CACFP Solutions to perform all Professional Services.

6.4 Billing for Childcare + At-Risk Combo Sites

Childcare sites who also participate in the at-risk program will be treated as 1 claim for the purpose of calculating Average Reimbursement / billing details.

6.5 CN Label Verification

Customer is responsible for monitoring all CN label or Product Analysis usage and expiration dates for their sites. CACFP Solutions will process Daily Meal Production Records per the CN or PA data that is linked to the menu in the system.

6.6 Alternate Forms

Use of any alternate forms that will require processing must be authorized by CACFP Solutions at least 60 days in advance.

6.7 Claim Overrides by Customer

CACFP Solutions will not be responsible for any incorrect or inconsistent data present in any SaaS application records that results from edits made by the Customer’s staff.

6.8 Changes to Program Guidelines

CACFP Solutions makes every reasonable effort to remain informed of all Program changes. As a precautionary measure, Customer will promptly inform CACFP Solutions of any upcoming policy or guideline changes that impact the Professional Services being
performed.

6.9 Program Compliance

CACFP Solutions is not a sponsoring organization and therefore does not strictly enforce CACFP guidelines for Clients. However, adherence to CACFP guidelines and recommendations by CACFP Solutions staff is critical to the CE’s success. CACFP Solutions is not required to continue providing service under any circumstances if it becomes clear that the Client is blatantly disregarding CACFP guidelines or otherwise committing fraudulent acts, including but not limited to: falsifying reported claim menus, meal counts, attendance, enrollment record details, providing illegitimate receipts, or otherwise reporting false or inaccurate information with respect to the CACFP and services that CACFP Solutions is to perform on the Client’s behalf in support of their program operation.

6.10 Client Holds Final Responsibility

The Client retains full and final responsibility for preparation of all records, including menus, meal counts, enrollments, expense records, CE application materials, or any other similar records required to participate in the CACFP. While CACFP Solutions will do everything reasonably appropriate to support the client in their CACFP operation, CACFP Solutions is not responsible for any decisions or findings made by TDA representatives and offers no guarantee of results due to the number of variables outside the company’s control.

6.11 Recommend Consultation with CPA

Clients are responsible for consulting with a Certified Professional Accountant (CPA) to receive guidance in deciding on the best approach for categorizing CACFP reimbursements in the Client’s business and accounting software. The way CACFP reimbursements are treated in part determines the recommended approach for organizing and reporting business expenses outside of the CACFP claiming process. CACFP Solutions can offer suggested best practices based on experience; however, this is not a replacement for independently consulting with a CPA.

6.12 Agency

It is understood and agreed between CACFP Solutions and Client that CACFP Solutions may act as Client’s agent with the authority to perform certain acts incidental to the Scope of Services, including the following:

Review materials submitted by Client for accuracy.
Collect information by the Client for preparation of materials required to participate in the program.
Prepare various program records for Client’s final review and acceptance.
Participate in electronic meetings, which include screen-sharing sessions, for the purpose of supporting the client in the process of uploading, entering, and/or submitting documentation or information required to participate in the program.

IT IS UNDERSTOOD AND AGREED THAT CLIENT HAS THE FULL AND FINAL RESPONSIBILITY FOR THE ABOVE ACTIONS AND HAS THE RIGHT TO CONTROL THE MEANS AND DETAILS OF THE PROCESS BY WHICH THE ABOVE TASKS ARE PERFORMED.

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Phone: 512-657-8036

Phone: 512-657-8036
10900 Research Blvd Ste 160C
Austin, Texas, 78759