CACFP Training Administrative Budget Guidance Family Day Care Home Sponsors

1. CACFP Training Administrative Budget Guidance Family Day Care Home Sponsors

2. Administrative Budget Guidance For Family Day Care Home Sponsors 7 CFR 226.7(g)

3. Preparing the CACFP Administrative Budget • Each fiscal year every sponsor must: • Certify the sponsor has read the: • ODE Administrative Budget Guidance & Instructions, • FNS Instruction 796–2 rev 3, Financial Management in the Child and Adult Care Food Program. • Submit an administrative budget, including carryover funds if applicable • ODE CNP reviews the budget to ensure the individual line items are: • Necessary • Reasonable • Allowable

4. All required tabs must be completed, including: • Coversheet • Budget Schedules A-F • Documentation • Submit any items requested by ODE CNP

5. Administrative Reimbursement • Payments will be made based on the homes times rates calculation • There is no guarantee that payments will cover actual costs incurred • Organizations must maintain solvency to meet CACFP eligibility requirements

6. General Budget Criteria To be allowable, the costs: • Must represent an actual operating/administrative cost, • Are necessary, reasonable and allowable, • Have Prior Approval or Specific Prior Written Approval by ODE CNP, when applicable; • Are authorized or not prohibited under state or local laws or regulations; • Conform to any limitations or exclusions; • Are accorded consistent treatment through the application of generally accepted accounting principles; • Cannot be assignable or included as a cost to any other federally financed program; • Are the net of all applicable credits; • Are properly allocated; and adequately documented

7. Budget as a Management Tool • Sponsors use the budget when: • Making spending decisions, and • Charging expenses to the program. • Sponsors must: • Review the budget periodically, • Regularly track and reconcile, and • Make amendments

8. Other Funds The budget must demonstrate the institution’s ability to manage the CACFP Family Day Care Home Sponsorship. If the sponsor is paying for essential expenses with funding from other resources, this must be recorded on the “Budget” tab on the Excel Budget Workbook. ODE CNP staff may request additional information. All sponsors must complete this tab, regardless of using Other Funds to manage this program

9. Mid-Year Budget Revisions • Small amounts of money may be shifted between line items in the approved budget, provided the: • Total dollar amount of the budget is not increased, and • No line item is increased by $1,000 or 10 percent, whichever is less. • Sponsors must submit budget revisions whenever changes to the following line items are made: • Salaries and benefits • Equipment • Software • Travel • Consultant/contract services  NOTE: ODE CNP approval for revisions to any of these categories must be received before making proposed expenditures

10. Eligibility of Costs • FNS Instruction 796-2, Rev. 3 • Office of Financial Management and Budget (OMB) Circular A-122; • OMB Circular A-87, U.S. Department of Agriculture (USDA) Management Improvement Guidance; and • ODE CNP policies, and manuals

11. Disclosure: • Information that must be disclosed: • All related party transactions; • Less-than-arms-length transactions; • Ownership interests in equipment, supplies or facilities, and • Costs requiring special consideration NOTE:Failing to disclose required information will result in the disallowance of the cost and may subject the institution, its principals, employees and others to the administrative and legal remedies available to the ODE CNP and FNS

12. Prior Approval • Certain costs require prior approval. These are costs that, by type or amount, require additional disclosure for ODE CNP to make an informed decision about allowable costs. When disclosed properly, ODE CNP approval of the budget indicates that the item is approved, unless ODE CNP specifically disallows the cost in writing • All sponsors must complete the Documentation tab on the Excel Budget Workbook. The sponsor must properly document these items

13. Specific Prior Written Approval Certain costs are not allowed unless ODE CNP has provided the sponsor with specific prior written approval of the cost. • Costs are not customarily incurred in the routine operation of the CACFP. Examples: • All less-than-arms-length transactions; • Compensation to members of non-profit institutions trustees, directors, associates, and officers or their immediate families; • All special lease arrangements NOTE: The sponsor must identify and request approval of these costs during the annual budget approval process or submit a separate request to ODE CNP. All sponsors must complete the Documentation tab on the Excel Budget Workbook. The sponsor must properly document these items

14. Depreciation • Depreciation is the expense associated with the use of equipment, vehicles and facilities in the program • All depreciation claimed for federal reimbursement must be documented • All records must be retained during the life of the equipment for three years • Depreciation is based on acquisition cost and the life expectancy of the asset. Refer to FNS Instruction 796-2 Rev. 3 for additional information on depreciation

15. Use Allowance • Use allowance may be used in lieu of depreciation • Depreciation and Use Allowance may not be used for a single set of assets • Maximum annual rate for use allowances for buildings and improvements cannot exceed two percent of the acquisition cost • Rate cannot exceed six and two-thirds percent of the acquisition cost • Refer to FNS Instruction 796-2 Rev. 3 for additional information

16. Direct and Indirect Cost Allocation • Allocated Direct Costs: • Benefits of a direct cost cannot be specifically identified; • Direct cost benefits both allowable and unallowable activities, or the cost • Benefits more than one State for multi-state institutions NOTE: ODE CNP must provide the sponsor with specific prior written approval of the method that the institution will use to prorate the cost

17. Direct and Indirect Cost Allocation • Indirect Costs: • Must have a current approved indirect cost plan from their cognizant agency • If ODE-CACFP is the cognizant agency, the sponsor must apply and be approved for an ODE-approved restricted cost allocation plan

18. Finalizing the Budget • Check and recheck all math calculations in the budget to make sure the budget includes all anticipated expenses • Record sponsor explanations in appropriate fields • Submit all requested support documents including job descriptions; rental or lease agreements with the budget. Attach or write clarifications whenever necessary for explanation • Report items requiring prior approval on the Documentation tab • Submit a copy of the retirement plan(s) if sponsor has not previously submitted it to ODE CNP • Keep a copy of the budget submitted for approval, with all supporting documentation, for your own records • Budgets must have approval of the sponsoring organization’s Board of Directors before ODE CNP can approve the budget. Submit the approval date when submitting the budget

19. USDA Non-Discrimination Statement In accordance with Federal law and U.S. Department of Agriculture policy, this institution is prohibited from discrimination on the basis of race, color, national origin, sex, age or disability To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW, Washington, D.C. 20250-9410 or call, toll free (866) 632-9992 (voice). TDD users can contact USDA through local relay or the Federal relay at (800) 877-8339 (TDD) or (866) 377-8642 (relay voice users) USDA is an equal opportunity provider and employer.

20. ODE CNP Contact Information Oregon Department of Education Child Nutrition Programs 255 Capitol St. NE Salem, OR 97310 Phone: 503-947-5902 Website: http://www.ode.state.or.us/search/results/?id=209