Comingling CACFP Funds is Risky
Do you ever feel like you’re juggling too many things at once when it comes to managing your business finances? It’s understandable to want to simplify things by using your general business account for all transactions, including those related to the Child and Adult Care Food Program (CACFP).
However, there can actually be many drawbacks to co-mingling CACFP funds with your normal business expenses. It could cost you time and money (as well as unnecessary headaches) when your next administrative review comes around.
Why Is This?
- Transparent financial management is a CACFP requirement.
- Clients are required to clearly document how they spend Program funds.
- It’s easier to demonstrate Program income and expenses when they are not mixed with other income and expenses that are irrelevant to the Program.
- Co-mingled bank accounts make it harder to decipher Program vs regular daycare transactions.
- Co-mingled bank accounts require clients to divulge/provide personal business records during administrative reviews, instead of only providing what is relevant to the Program.
- Using a co-mingled bank account requires a client to provide additional documentation that otherwise would not be required during an administrative review.
- Using a separate bank account for CACFP income & purchases clearly demonstrates that Program funds are being exclusively used for Program expenses.
Discover Why a Separate CACFP Account is a Game-Changer
- Helps clients stay compliant with CACFP financial management guidelines
- Better transparency for how Program funds are spent
- Simplifies financial management oversight
- Easier recordkeeping – eliminates the need to manually separate Program expenses from other daycare expenses
- Reduces the risk of errors and accidental misuse of Program funds
- Helps prevent confusion and/or requiring additional documentation during administrative reviews
- Makes it easier to compare Program expenses to the CACFP budget and determine if adjustments are needed
Setting up a separate CACFP bank account may initially seem like an unnecessary hassle, but it’s actually one of the simplest ways to set up your Program for success. It helps you effectively manage your CACFP finances, provides better control and transparency over Program spending, and simplifies the documentation that will be required for your next administrative review. It’s an extra step today that will save you many steps in the future.
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