The Child and Adult Care Food Program (CACFP) provides critical funding to help your center serve nutritious meals. However, even small financial management errors can lead to CACFP adverse actions, resulting in withheld reimbursements, repayment of funds received, or even Program termination.
To protect your reimbursement and keep your center compliant, it’s essential to recognize common mistakes that can trigger adverse actions. Below, we’ll cover some of the top financial and operational errors that lead to problems.
1. Purchasing Unallowable Items
CACFP funds must be spent exclusively on allowable Program expenses. Continuing to purchase unallowable items with these funds—even unintentionally—can lead to adverse actions and paying funds back to your sponsor or state agency.
Some Common Types of Unallowable Purchases:
- Foods: Coffee, sodas, alcoholic beverages, ice cream, candy, cookies/cake, toaster pastries, and even premium items such as spare ribs, shrimp, and rib-eye steak.
- Supplies: Coffee filters, Kleenex, baby wipes, pacifiers, diapers, air fresheners, toilet paper, bathroom cleaners, planters/gardening supplies, and pest control products.
- Personal Items: Clothing, feminine products, household items, restaurant meals, and even quick snacks in the checkout line.
- Business expenses: Party decorations, bathroom supplies, door mats, most office supplies, petroleum/fuel receipts, and playground equipment.
💡 Need tips on which foods are allowable? Click here to access USDA’s Food Buying Guide!
2. Missing or Inadequate Receipts
CACFP requires documented proof – receipts – for all purchases made with Program funds. (Yes, all of them!)
Missing or incomplete documentation can lead to some of your expenses being considered unallowable – even if allowable items were purchased. You could also be required to pay back CACFP funds spent on purchases that don’t have receipts.
In addition to having the receipts, you must have financial records showing how you purchased these (bank or credit card statements, etc.). Even when you have all of your receipts, you can still face CACFP adverse actions if your financial documents are not in order.
Common Mistakes:
- Having incomplete financial records, such as bank statements or general ledger.
- Not keeping all receipts for food and supply purchases.
- Having illegible receipts (faint or blurry text, etc.)
- Not making sure receipts contain key details, such as:
- Store name
- Date
- Descriptions & prices for all items
- Total purchase amount
- Acceptable payment method
💡 Need help with your financial records? Click here!
3. Inaccurate Payroll Records
If CACFP funds are used to pay some of your staff, you must keep detailed payroll records. Neglecting to do this can result in CACFP adverse actions, including financial penalties.
Common Mistakes:
- Not tracking hours for staff paid partially with CACFP funds.
- Not maintaining daily timesheets, including hours spent on CACFP tasks.
- Not keeping your CACFP budget updated with new staff changes.
- Claiming more staff labor than allowed on your CACFP budget
4. Claiming Ineligible Meals
Claims for reimbursement must be accurate and based on eligible meals served to eligible participants. Errors here can result in paying CACFP funds back later during an audit.
Common Mistakes:
- Claiming meals for participants without current enrollment/income eligibility forms.
- Misclassifying or miscalculating participants’ income eligibility on forms.
- Overclaiming meals due to attendance miscounts.
- Not correctly documenting meals served on field trips.
- Incorrectly recording meals served to staff or non-participants.
Protect Yourself from CACFP Adverse Actions
Avoiding these common mistakes is critical to protecting your center’s reimbursement. Doing so can significantly reduce your risk of CACFP adverse actions.
Want some tips to help you avoid these mistakes? Keep an eye out for our next post: “How to Avoid CACFP Adverse Actions: A Simple Checklist.” Stay tuned! 🚀