Funding your CACFP Adventure: CACFP Financial Management

Funding your CACFP Adventure:CACFP Financial Management Sponsors and Independent Child and Adult Care Centers CACFP Summer Conference May 21, 2014

Map of CACP Financial Management

CACFP Map Key • Agency: The organization name on the CACFP Application. Same as the name on the federal tax-exempt status (non-profit) or the legal name of the agency (for-profit). • Child and Adult Care Food Program (CACFP): Federally funded program through USDA and administered in WI by the Department of Public Instruction. Provides reimbursement for eligible meals served to enrolled participants. Sometimes referred to as the “Food Program”. • Nonprofit Food Service Financial Report (NPFS): DPI form required from all participating agencies (for-profit and non-profit) that is used to report actual food program expenditures and earned food program revenue. Annually = Independent and Quarterly = Sponsors. • United States Department of Agriculture (USDA): The federal branch of government that oversees and regulates the CACFP administered to State Agencies.

CACFP Map Key • Department of Public Instruction (DPI): The Department in the State of WI that administers the CACFP to participating institutions. • Institution: A licensed center that contracts with the DPI to administer the CACFP to it’s enrolled participants. Also referred to as an “Agency”. Two types: • Independent: One site participating in the CACFP. • Sponsoring Organization (SO): Two or more sites participating in the CACFP. • Affiliated - same legal entity as the Institution/Agency. • Unaffiliated – no affiliation with Sponsor – SO must be non-profit

Child and Adult Care Food Program IS NOT “Free” money Funding for personal expenses To purchase soda/coffee for teachers, non-healthy and/or not enough food and snacks for participants Entitlement Program For the disorganized IS • Federally Funded • Passed through DPI • a FOOD Program • Healthy meals to eligible participants • Optional Program • Except in Head Start • Heavily Administered • Detailed program requirements.

Planning: What you will need • Project Reimbursement • Project Expenditures (Budget) • Bank Account in the Agency Name • Accounting System • Written Policy and Procedures

CACFP Reimbursement • CACFP Reimbursement is based upon: • Number of meals approved to claim • Eligibility of the enrolled participants • The funds you receive will not cover all of your allowable FP costs.

Other Source of Income • CACFP is part of your overall organization. • Funds received to run organization must also be available to fund CACFP costs not covered by reimbursement. • Examples: Headstart, Tuition, W-2, Fundraising, Private Donations • Food Stamps is not another source of income for the center. • Report projected Source and Amount on Budget

Resources Available • Guidance Memorandum #2 • Reimbursement Calculation Worksheet • Child Care: http://fns.dpi.wi.gov/fns_centermemos • Adult Care: http://fns.dpi.wi.gov/fns_adultmemos

CACFP BUDGET • Projection – “Road Map” of Upcoming Program Year • Costs must be Allowable, Reasonable, in accordance to FNS Instruction • All Revenue Available to fund CACFP • Budget Summary submitted with online application • Figures Updated every year. • Detailed Budget (Attachment G) for Sponsors • Required every three years – uploaded to online application – NEW FFY2015

Administrative & Operational Costs Administrative • Monitoring • Claim • Compiling • Submitting • Reconciling • Accounting / Bookkeeping Operational • Kitchen • Meals • Preparation • Delivery • Menus • Purchasing / Vended Meals

Frequent Allowable CACFP Costs(list is not all inclusive) Allowable • Food (consumable) • Kitchen Supplies/Nonfood • Contract / Vended Meals • Food Program Personnel • Admin & Operational • # of CACFP hours must be tracked • Employee CACFP Travel • e.g. Grocery shopping, DPI training • Audit Services • CACFP Portion • Equipment Purchase/Rental

Food Costs • Costs in purchasing ingredients for menu items (Food Supplies) AND/OR the cost of purchasing itemized CACFP meals from an outside vendor (Contracted Service) that are served to the participants • Should be at least 40-50% of budget • For healthy, reimbursable meals at least ½ of reimbursement on food costs.

Food Supplies • Consumable food products used to create menu items served to program participants. • Costs can include delivery costs. • Taxes must be paid with non-CACFP funds (tax-exempt). • Report on the Food Supplies/Food Costs line on budget and NPFS.

Food Vendors / FSMC • Outside food service, not related to agency. • Contract approved with DPI • Provide all CACFP components. • Report as Contracted Services on CACFP Budget and Financial Report • Independent: Report as “Other” cost and specify.

Food Service Labor All wages, salaries, employee benefits, and the share of the employee taxes paid by the agency.

Operational Food Service Labor • Menu planning • Production Records • Food purchasing • Cooking • Serving the food • Cleaning-up after the meal • Meal Attendance

Food Service Labor is also… • Time spent completing required records • HSIR and HSIS • Monthly claim • Financial reports • Supervision of day-to-day food service operations These are Administrative costs

Administrative Costs • Sponsors: No more than 15% of CACFP meal reimbursement can be spent on administrative costs without State Agency waiver. • Independent Centers: Not an issue because CACFP meal reimbursement is usually spent on operational costs, any leftover should be less than 15%.

Administrative Costs • CACFP Administrative Costs should never be higher then CACFP Operational Costs. • It should cost an agency more to prepare and serve the meals then doing the paperwork and monitoring of the program.

Frequent Unallowable CACFP Costs(lists are not all inclusive) Unallowable • Bad Debts, Fines, Penalties • Non food program food costs • Coffee, non-CACFP personnel meals (i.e. driver, maintenance, non-employee/family member) • Entertainment • “Family Night”, catering costs • Purchase of food/supplies for personal use • Money received must be kept in food program account. Must have strict internal policy. • Undocumented Expenses • i.e. “Payroll” for Owner with no documentation worked in Program

Resources for Allowable/Unallowable Costs • Guidance Memorandum #11 • Summary of CACFP Allowable Costs • User friendly, searchable, Excel reference • Child Care: http://fns.dpi.wi.gov/fns_centermemos • Adult Care: http://fns.dpi.wi.gov/fns_adultmemos • FNS Instruction 796-2 (rev. 4) • Electronic copy available on our website at http://fns.dpi.wi.gov/files/fns/pdf/fmgrev4.pdf • Derived from OMB Circulars and Federal Regulations for Financial Management for federal funding. • CACFP Budget • http://fns.dpi.wi.gov/fns_cacfpapps

Bank Accounts • ACH Payments • https://apps.dpi.wi.gov/AidsBanking/login • Must be in agency’s legal name • W-9 verified by DPI • Must have two people responsible • Reimbursement will no longer be issued via check • Notify DPI immediately with changes

Accounting Systems Acceptable • Center credit card • Center checking account • Charge Account at local store • Invoice or COD • Food delivery vendor Unacceptable • Cash • Including cash-back • Third party checks • Food Stamps * Information per US GAAP

Accounting System • Method of tracking expenses and revenue in your organization • Cash/Accrual/Modified Accrual • Compliance with US Generally Accepted Accounting Principles (US GAAP) • Resource: http://www.fasab.gov/accepted.html or Ask your staff Accountant • Items should not be purchased with CASH. • Financial Reports • General Ledger / Check Register; Profit/Loss Statement; and Balance Sheet • Co-mingled CACFP funds with Agency funds • Method of separation (ie. independent account codes) • Approved allocation plan for shared costs

Accounting System • Audits • Annual Review of Organizations financials by independent party • A-133 Single Audit Required if expend over $500,000/year in federal dollars (non-profits only) • Single Audit Clearinghouse http://harvester.census.gov/sac/index.html • Pdf copy required to be uploaded to Online Application – NEW • Less than $500,000 - Annual report/review from independent outside party should be conducted annually. • For-profits: Compliance review by outside accountant • Annual Report of organizations financial condition • Should be completed when federal tax filing is completed. • Good resource: www.irs.gov

Policy and Procedures • Written descriptions that tell the who, what, where and how of each process of organization. • No “required” format. • Understandable to all parties involved. • Check and Balance for organization processes • Training / Turnover in job duties • Used in job evaluation process • Reviewed and updated frequently • Actually followed • CACFP Financial Procedures required • Purchasing; accounting/payment of bills; recordkeeping

Participation: On Your Way • Approved Application • Incurring costs (Documentation) • Monthly Reimbursement

Cost Documentation • Menus • Production Records (if applicable) • Receipts/Invoices • Dated detail receipt of actual items purchased or showing where CACFP funds were spent. • Financial Records • Revenue and Expenditure report • General ledger; Journal ledger; checking ledger • Bank statements for account federal funds are deposited • Payroll documentation (timesheets; payroll checks/register; federal time reporting sheets) • Required for all employees funded with federal funds

Receipts/Invoices At a Minimum • Date of purchase • Itemized • Description • Quantity • Price • Method of payment • Separate Food/Nonfood/Non-CACFP

Organization Weekly • Food Receipts • Timesheets Monthly • Bank Statements • Payroll records • General Ledger • Claim Reimbursement • Receipts by date and vendor Retain 3 years + Current

Participation: On Your Way • Approved Application • Incurring costs (Documentation) • Monthly Reimbursement

Remember! The CACFP funds are replacing funds you are now spending

Claims Processing • Claims Processed every Tuesday (next business day if falls on Holiday) • Only one claim per Program per “week” • Can be amended up until process date • Reimbursement received within two weeks from process date (unless Holiday or Federal/State shutdown).

Illustration of Claim Payment

Reimbursement • Amount known when claim processed • Any fiscal action due will automatically be deducted from claim until paid in full • Resources: • Guidance Memo 2 – How reimbursement is calculated • Guidance Memo 3 – Everything want to know about submitting claims

Reporting: Compliance • CACFP Financial Reports • CACFP Reviews

Nonprofit Food Service Financial Report (NPFS) • Form PI-1463 (Independent) and PI-1463-A (Sponsors) • Report of all ACTUAL CACFPexpenditures incurred during the reporting period. • Costs should equal expenditures charged to food service program plus any additional expenses covered with non-CACFP funds. • Amounts must be supported by actual documentation – NO ESTIMATES • Forms can be found under Guidance Memo 11

Nonprofit Food Service Financial Report (NPFS) • CACFP revenue should be reported using the accrual method (as earned, not received). • Additional program income must be reported (e.g. interest income, rebates) • Additional non-program income must be reported • Total Costs less Program income = non-program income • Required for ALL CACFP agencies – evenfor-profit

Nonprofit Food Service Financial Report (NPFS) Due Dates Independent • Annual Report • Reporting period: October 1 – September 30 • Due Date: November 1st • Submit via: • E-mail: cari.muggenburg@dpi.wi.gov • Fax: (608) 267-0363 • Regular Mail E-mail if need extension

Nonprofit Food Service Financial Reports (NPFS) Due Dates Sponsoring Organization • 1st Quarter • Reporting period: October 1 – December 31 • Due Date: March 1st • 2nd Quarter • Reporting period: January 1 – March 31 • Due Date: June 1st • 3rd Quarter • Reporting period: April 1 – June 30 • Due Date: September 1st • 4th Quarter • Reporting period: July 1 – September 30 • Due Date: December 1st E-mail if need extension PI-1463-A (front page)

Reporting: Compliance • CACFP Financial Reports • CACFP Reviews

Funding your CACFP Adventure: CACFP Financial Management