Slide 1 Welcome to the CACFP Annual Training called Recipe for - PDF document

Slide 1 Welcome to the CACFP Annual Training called “ Recipe for Success during CACFP Recipe for Success Reviews ” , hosted by Oregon During CACFP Reviews Department of Education Child Nutrition Programs. This session will Financial Management for Child Centers, including:  Outside School Hour Care Centers discuss common review findings for  Afterschool At-Risk Meal & Snack Programs  Homeless/Emergency Shelter Programs Financial Management of Centers,  Adult Programs including Outside School Hour Care Fueling Oregon’s Future Centers, Afterschool At-Risk Meal & Snack Programs, Homeless / Emergency Shelter Programs and Adult Programs. Slide 2 The first situation we will discuss Situation #1 involves tracking allowable CACFP expenses incurred for the operation of Tracking of CACFP expenses incurred for the Program. Allowable costs are the operation of the Program. necessary, reasonable and authorized • Allowable costs. • Unallowable During the review the Child Nutrition Fueling Oregon’s Future 2 Specialist requests to review all allowable receipts and payroll documentation the sponsor has on file that support CACFP expenses incurred for the test period. The sponsor provides documentation for CACFP expenses that were charged to Program funds which includes: food receipts and invoices. In reviewing the documentation provided, the Child Nutrition Specialist observes that the food receipts include costs for unallowable food items and unallowable food service supplies. The receipts and invoices documented purchases for crayons, toilet paper, bottled water, soda and candy. The costs of these items were not subtracted from the receipt totals.

Slide 3 Situation # 1 is a finding. (click) The Why CACFP expense documentation provided does not separate allowable Unallowable costs charged to CACFP funds from unallowable costs. • Receipts containing unallowable costs  (click) The receipts FNS 796-2 rev 4 (VIII A-G) 7 CFR 226.15(e)(6) for food and non- food service supplies Fueling Oregon’s Future 3 included costs for unallowable items such as crayons, toilet paper, bottled water, soda, and candy. The sponsor must document that unallowable items purchased are not charged to the CACFP. (click) FNS 796-2 Rev 4 (VIII A-G) and (click) 7CFR 226.15(e)(6) describe the allowable costs that may be charged to the CACFP

Slide 4 Now let’s discuss corrections to prevent How To Correct this finding. Unallowable costs charged to CACFP To correct, the sponsor would need to • Develop a system and implement procedures to develop and implement a system to track CACFP expenses track all CACFP expenses including: • a procedure that ensures receipts containing Fueling Oregon’s Future 4 unallowable CACFP food items and unallowable non- food service supplies are clearly identified and the cost of the unallowable items are not charged to CACFP funds,

Slide 5 The second situation we will discuss Situation #2 involves the inability of the sponsor to demonstrate nonprofit foodservice. Sponsor is unable to demonstrate nonprofit Nonprofit foodservice is demonstrated food service • CACFP income exceeds CACFP expenses when Program funds (CACFP • All allowable costs are not documented reimbursement income) are used only for allowable Program expenses and when all allowable program expenses Fueling Oregon’s Future 5 incurred are paid for with Program funds. If excess Program funds exist, they must be retained and used only in the nonprofit food service program. During the review, the Child Nutrition Specialist compares the CACFP reimbursement received during the test month with the expenditures documented on receipts for the month. (click) The comparison shows the sponsor received $2525.00 in CACFP reimbursement and spent $1015.00 in food and supplies. When asked, the sponsor states they do not have an accounting system in place to track CACFP income and expenses separately from non-program income and expenses. (click) The Sponsor reconciles the checking account monthly, but the account activity is not tracked to show the amount of CACFP reimbursement received and the amount of expenditures made on CACFP allowable food service costs. The sponsor reports they have determined that the CACFP balance is zero, as they are sure all CACFP program income is spent each month.

Slide 6 Situation #2 has two findings. (click) The Why first finding is that the sponsor is Unable to demonstrate nonprofit food unable to demonstrate nonprofit food service • CACFP expenses meet or exceed CACFP income service. The Program income received Balance of CACFP account is unknown by the sponsor is greater than the • No assurance that CACFP funds support only program food service activities allowable Program expenses 7 CFR 226.15(e)(13), Guidance for Mgmt. Plans & Budgets p.16, documented by the sponsor. (click) The FNS 796-2 rev 4 (VI C) second finding is the sponsor is not Fueling Oregon’s Future 6 able to document the CACFP fund account balance. Let ’ s discuss the first finding: (click) Sponsors must operate a nonprofit food service principally for the benefit of enrolled participants and maintain records documenting the operation of the food service. CACFP funds may be comingled (or combined) with other funds in one single bank account, but if they are comingled the sponsor must be able to track CACFP income and expenses separately from other funds. The Sponsor must be able to show that reimbursement received from the CACFP is spent only on food service expenses. The expenses for the food service must meet or exceed the CACFP reimbursement. (click) Because they do not have an accounting system in place to track CACFP program income and expenses, the sponsor is unable to ensure that the CACFP funds they receive are being used to support only CACFP food service activities. Additionally, without an accounting system in place, the sponsor is unable to demonstrate that all allowable expenses incurred in running the CACFP are being paid with Program funds. (click) 7CFR226.15(e)(13) and (click) page 16 of the USDA Guidance

for Management Plans and Budgets describe the requirement to track comingled funds. (click) FNS 796-2 Rev 4 (VI C) provides the requirements for making sure CACFP funds support only CACFP Food Service activities. Slide 7 Now let’s discuss corrections you can How To Correct make to prevent these findings from A procedure to track CACFP occurring. income & expenses • Create and maintain a fund account for Program income and expenses In order to correct, the sponsor must Demonstrate nonprofit food implement a procedure to account for service • Charge all allowable Program expenses to the receipt and expenditure of all Program funds CACFP funds. Elements to be included Fueling Oregon’s Future 7 in the procedure:: • Create a CACFP fund account . A fund account is a type of recordkeeping system (software program or manual) used to track income and expenses for a specific program, in this case the CACFP program. The purpose of the fund account is to document how much money was received, how much was spent and what is was spent on. • Set up the fund account to track all CACFP revenue and allowable CACFP expense transactions . This would involve setting up a Chart of Accounts by assigning account codes for individual income and expense categories in the CACFP fund account. • Maintain the CACFP fund account , ensuring CACFP income and