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Procedures for Unused Federal Admin. Payments


Nutrition Services Division Management Bulletin
Purpose: Policy, Action Required, Beneficial Information
To: Child and Adult Care Food Program Day Care Home Sponsors Number: USDA-CACFP-13-2013
Attention: Food Program Director Date: December 2013
Subject: Child and Adult Care Food Program Procedures for Retaining or Returning Unused Federal Administrative Payments
Reference: The Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296; U.S. Department of Agriculture Policy Memoranda CACFP 06-2011, CACFP 18-2011, CACFP 11-2012, CACFP 24-2012(v.3); California Department of Education Management Bulletins USDA-CACFP-08-2011 and USDA-CACFP-10-2013
Supersedes: California Department of Education Management Bulletin USDA-CACFP-04-2012

This Management Bulletin (MB) provides updated guidance to Child and Adult Care Food Program (CACFP) Day Care Home (DCH) sponsors on the procedures for retaining or returning unused federal administrative payments (UFAP) each Program Year (PY).

Background
In March 2012, the U.S. Department of Agriculture (USDA) issued Policy Memorandum CACFP 11-2012, which allowed state agencies to provide options to DCH sponsors for monthly administrative payments. There are three administrative payment options:
  1. Current administrative rates multiplied by the total homes claimed (rates x homes)
  2. Actual costs (not to exceed rates x homes)
  3. No administrative payments

For additional information about these three administrative payment options, please refer to the California Department of Education (CDE) MB USDA-CACFP-10-2013, available on the CDE DCH Sponsor Administrative Payment Options Web page at http://www.cde.ca.gov/ls/nu/cc/mbusdacacfp102013.asp.

DCH sponsors that choose the rates x homes option can carry over up to 10 percent of any total UFAPs to the following PY. Every year by December 31, sponsors choosing the rates x homes option must submit the final UFAP reporting form and repay any UFAPs in excess of 10 percent to the CDE.

The following procedures do not apply to any sponsors using either of the other two options for receiving administrative payments for the entire program year. DCH sponsors are not required to carry over any UFAP. However, if they choose not to carry over any UFAPs, they must repay the entire amount of the UFAP to the CDE.

Calculating Unused Federal Administrative Payments Available for Carry Over

DCH sponsors are allowed to carry over up to 10 percent of the UFAPs they have received during the PY. For example, if a DCH sponsor received $100,000 in administrative payments during PY 2012–13, the sponsor would be eligible to carry over up to $10,000 of the UFAPs into PY 2013–14.

The CDE uses the following calculation to determine the amount of UFAPs (if any) a sponsor has at the end of each PY:

  1. PY Administrative Payments Received plus Carryover from Previous PY (if any) equals Total Federal Administrative Payments

  2. Actual Administrative Costs minus PY State Meal Reimbursement Retained (if any), minus Audit Reimbursement Funds (if any) or other income (if any) equals Net Expenses

  3. Total Federal Administrative Payments minus Net Expenses equals UFAPs Available to Carry Over

The following requirements apply to DCH sponsors’ use of available UFAPs:

  1. If the UFAPs available to carry over are equal to or less than 10 percent of the federal administrative payments received during the PY, the sponsor may carry over all of the UFAPs.

  2. If the available UFAPs to carry over are greater than 10 percent of the federal administrative payments received during the PY, the sponsor may carry over up to 10 percent of the UFAP and must return any amount in excess of the 10 percent limit.

  3. If the sponsor chooses to carry over less than the full 10 percent, they must return all UFAPs to the CDE that they choose not to carry over.

Example: A DCH sponsor receives $100,000 in administrative payments during PY 2012–13 and had carried over $10,000 from PY 2011–12. The sponsor has $85,000 in actual costs and received $5,000 in audit reimbursement funds. The following table illustrates the CDE’s calculation of available UFAPs:

Item Description Amount

1

Total Federal Administrative Payments from PY 2012–13

$100,000

2

Carryover UFAP from previous program year (if applicable)

+$  10,000

3

Total Federal Administrative Payments

$110,000

4

Actual Administrative Costs

$  85,000

5

State Meal Reimbursement Retained

$           0

6

Audit Reimbursement Funds Received

$    5,000

7

Other Income

             0

8

Net Expenses

$  80,000

9

Total Federal Administrative Payments

$110,000

10

Net Expenses

$  80,000

11

Amount Unused

$  30,000

12

10 percent of Total Federal Administrative Payments from PY 2012–13 (from Line 1)

Maximum amount that may be carried over by sponsor

$  10,000

When applying the calculation of the 10 percent maximum described above, the sponsor may only carry over $10,000 (10 percent of the administrative payments received in PY 2012–13) into the following PY. The DCH sponsor must return to the CDE the $20,000 that exceeds the 10 percent allowable to carry over. Alternatively, the DCH sponsor could return the entire $30,000 to the CDE if they choose not to carry over any of the UFAPs.

To ensure carryover funds are used for CACFP administrative costs in the following PY, DCH sponsors should use these funds on a first-in, first-out basis after receiving approval from the sponsor’s DCH Specialist to carry over the UFAPs to the following PY. The simplest option may be to allocate the carryover UFAPs to salaries.

As described below, the carryover amount approved by the DCH Specialist cannot be increased after the December 31 deadline.

Procedure for Carry Over of Unused Federal Administrative Payments

Each year sponsors may estimate carryover funds on the original budget for the upcoming PY using the worksheet provided with the budget.

By December 15 every year, the CDE will e-mail a spreadsheet to each DCH sponsor using the rates x homes option that shows the calculation of UFAPs and the amount allowable to carry over to the next PY (if any).

By December 31, each sponsor must:
Returning Unused Federal Administrative Payments

By December 31 each year, any sponsors returning UFAPs to the CDE must complete the UFAP form (Form #DCH 07) located in the Download Forms section of the Child Nutrition Information and Payment System (CNIPS). Mail the UFAP form, with a personal or cashier’s check containing your agency’s vendor number, to the CDE’s Cashier Office at the following address:

Cashier Office
California Department of Education
P.O. Box 515006
Sacramento, CA 95851-5006

Note: The CDE will charge a $25 fee if a check is returned for nonpayment.

Questions

If you have any questions regarding this MB, please contact your CACFP Specialist. A contact list of CACFP Specialists is available in the Download Forms section of the CNIPS, Form #CACFP 01. You can also contact Nancy Charpentier, CACFP Unit Office Technician, by phone at 916-327-2991 or by e-mail at ncharpentier@cde.ca.gov to be directed to your CACFP Specialist.

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