If you’re a sponsor on the Child and Adult Care Food Program (CACFP), there are important new financial rules from state agencies that can impact your funding and how you run your Program. Here’s what you need to know about your CACFP sponsor finances to avoid reimbursement issues and stay compliant.
1. New Bank Account Audits
One of the biggest changes: state agencies will now pick one month from your CACFP bank account and go through every transaction for that time. This is to verify that your CACFP sponsor finances meet Program requirements.
What this means for you:
- Keep your CACFP bank account separate from other funds.
- Every Program deposit and expense must be documented and related to CACFP.
- Missing or unclear transactions can lead to questions, delayed payments, or even having to pay money back.
2. Strict Admin Cost Enforcement
State agencies are now paying closer attention to how much of your sites’ CACFP reimbursement is withheld for sponsor administrative costs.
- This includes things like staff time for paperwork, visiting/auditing sites for compliance, office supplies, and other overhead.
- Only retain up to 15% of your sites’ CACFP reimbursement for these costs.
- The state will review your expenses and do the math to ensure this limit is not exceeded.
What this means for you:
- If you exceed 15%, you could end up having to repay funds to the state agency.
- Keep documentation for how your administrative percentage is calculated and how much you’re retaining to prove you’re meeting this requirement.
- Regularly review administrative costs vs site reimbursement to ensure you’re staying within the allowed limit.
Want help managing your CACFP sponsor finances? CLICK HERE.
3. Deep Dive Expense Review
The state agency isn’t just looking at the totals. They will pick individual expenses – like receipts, invoices, and how the payment was made.
Be ready to show:
- Who was paid
- What it was for
- That it was a CACFP-allowed expense
Unapproved or unclear expenses? That could mean paying back funds.
4. Applicable to ALL Sponsors
In the past, some of these rules only applied to sponsors of affiliated sites.
Not anymore. Whether you work with affiliated or unaffiliated sites, these financial rules apply to everyone now.
To learn more about how all CACFP sponsors are affected by these new rules, CLICK HERE.
What You Can Do Today
- Review your CACFP bank account each month. Make sure every transaction is clear, documented, and complies with Program requirements.
- Watch administrative costs. Track them carefully, and don’t go over 15% of total site reimbursement.
- Save receipts & documentation. Keep receipts, invoices, and proof of payment for all expenses. Keep deposit verifications for all Program income.
- Know these rules now apply to you – regardless of the type of sites you sponsor.
Bottom Line:
State agencies are tightening the rules for CACFP sponsor finances. Keeping your bank account organized, watching administrative costs, and maintaining thorough documentation will help protect your sites’ reimbursement and keep your Program running smoothly.
Don’t miss our next post: “How State Agencies Audit CACFP Sponsor Finances”, where we’ll break down how state agencies look at your finances and what you can expect!