Many centers participating in the Child and Adult Care Food Program (CACFP) assume that working with a sponsor shields them from getting into serious trouble. However, sponsored sites can still face the CACFP Serious Deficiency Process and even be placed on the National Disqualified List (NDL) if they do not follow CACFP rules.
If a sponsor or state agency identifies major compliance issues at your center, your sponsor must begin the CACFP Serious Deficiency Process. This gives you a chance to fix problems while still protecting the Program’s integrity. Let’s take a look at each step in detail, and – more importantly – how you can avoid being declared seriously deficient (SD).
Step 1: Serious Deficiency Determination
The CACFP Serious Deficiency Process kicks off when the sponsor or state agency identifies major compliance issues at your center.
Serious violations include:
- Spending CACFP funds on unallowable expenses.
- Not spending enough on approved foods & supplies.
- Not keeping accurate financial records, including reimbursements & expenses.
- Failure to keep an accurate and up-to-date CACFP budget.
- Repeated late claim submissions.
- Falsified or inaccurate meal claim records.
- Not following CACFP meal pattern requirements.
💡 WANT TO LEARN MORE? Check out our other blog post here.
During this stage, the sponsor documents the problems and prepares a formal notice to send to your center.
Step 2: Notice of Serious Deficiency
Next, your sponsor sends you a Notice of Serious Deficiency, which includes:
- The specific violations.
- The individual(s) at your center responsible for these actions
- Instructions to correct them.
- A deadline.
💡 IMPORTANT: You can’t appeal this decision, but you still have a chance to correct the problems before things get worse.
Step 3: Opportunity for Corrective Action
In response to the formal notice, your center must submit a Corrective Action Plan (CAP) with the following information:
- Detailed steps you’ve taken to fix the problems.
- How you’ll prevent them from happening again.
Your sponsor reviews your corrective action plan to ensure it fully and permanently resolves the issues. If it does, then your serious deficiency may be deferred so you can continue participating in the CACFP.
💡 IMPORTANT: You only have 30 days to correct a serious deficiency.
Step 4: Notice of Proposed Termination & Disqualification
If your corrective action plan fails to permanently correct the problems, your sponsor issues you a Notice of Proposed Termination and Disqualification.
This means:
- You risk losing your ability to participate in CACFP.
- Your center – and staff – could be placed on the National Disqualified List (NDL).
At this point, you can appeal. Your notice includes instructions on how to request a hearing.
💡 IMPORTANT: Submit your appeal within 15 days to avoid being immediately advanced to step 5.
Step 5: Notice of Official Termination and Disqualification
If you lose the appeal – or if you don’t appeal at all – your sponsor issues a Notice of Termination and Disqualification.
This means:
- Your center is officially removed from CACFP.
- Your center and applicable staff are placed on the NDL.
This means you cannot participate in CACFP and other USDA programs.
Once on the NDL, you must wait at least 7 years to be removed, unless all outstanding CACFP debts are repaid sooner and specific requirements are met. Early removal is a rigorous process requiring state agency approval before you can be reinstated.
To see who’s on the NDL, click here.
So…How Do You Avoid the CACFP Serious Deficiency Process?
No one wants to experience this, but there’s good news – it IS avoidable!
Here are some ways:
- Fix issues as soon as they come up.
- Maintain accurate financial records.
- Keep detailed records of reimbursements and expenses.
- Use CACFP funds ONLY for allowable expenses.
- Spend all CACFP funds on food, supplies, and staff for the Program.
- Follow your budget and purchase accordingly.
- Keep accurate meal records (meal counts, attendance, menus, etc.).
- Follow CACFP meal pattern requirements.
- Submit monthly claims on time.
- Attend required training.
The Bottom Line
The CACFP Serious Deficiency Process isn’t meant to punish centers. Instead, it protects Program integrity. By staying informed and diligently following guidelines, it is possible to avoid serious deficiency.
What’s Next?
Now that you know how the CACFP Serious Deficiency Process works, you might be wondering what happens after a center is placed on the National Disqualified List (NDL)? How do you get off it?
Don’t miss our next post: “What Is the CACFP Disqualified List and How to Get Off It?”—where we’ll break down the consequences of NDL placement and how you can be removed. Stay tuned! 🚀