CACFP Administrative Manual Section 6.3CACFP Administrative Manual Section 6.3: Center Expenditure Tracking and Nonprofit Food Service Status.
Section 6: Financial Management
Section 6.3 Center Expenditure Tracking and Nonprofit Food Service Status
All agencies must have a separate CACFP food service account or a separate accounting code for the CACFP. Agencies must maintain records of receipt and disbursement of all CACFP funding. All expenses funded by CACFP reimbursement must be allocated for CACFP use only and must be substantiated by invoices and receipts.
Expenditure Tracking—School Food Authorities Only
SFAs participating in the CACFP are required to track their CACFP respective revenues and expenditures separately. The California School Accounting Manual does not require SFAs to use the Child Development Fund to account for CACFP funds. SFAs may account for CACFP funds in the Child Development Fund (Fund 12), the Cafeteria Fund (either Fund 13 or Fund 61), or the General Fund (Fund 01). For more information, please refer to MB SNP-27-2015; CACFP-07-2015: SFA Revenue and Expenditure Tracking for the CACFP and SNP located on the CDE CACFP MB web page.
Nonprofit Food Service Status
A center, whether it is public, nonprofit, or for-profit, must operate a nonprofit food service operation. If a center’s accounting system shows a profit for the food service program, that profit cannot at any time exceed three months’ average expenses.
If a center’s profit does exceed this excess balance threshold, the center must develop a corrective action plan for proper use of excess funds. The excess funds must be reflected and approved in the CNIPS budget for the program year in which they are expended. The following are examples of ways that agencies may use excess funds to benefit CACFP participants:
- Expand menus to include a larger variety of foods including the amount and variety of whole grains, fresh vegetables, and fruits
- Serve hot meals
- Fund CACFP-related nutrition education training for staff members
- Improve kitchen facilities and equipment
Although it is highly encouraged to use excess funds to improve or expand the nonprofit school food service for the benefit of program participants within that program, or allocate these as start-up funds for the following year, excess funds in the CACFP may also be used for allowable costs related to other CNP operated by the agency. Note, program operators with excess funds in the CACFP or the SFSP may transfer funds only for costs that are allowable within the CNP that receives the transferred excess funds. For more information, refer to CDE MB CNP-04-2019: Transferring Excess Funds between Child Nutrition Programs located on the CDE CACFP MB web page.
References: 7 CFR, sections 226.6, 226.7(g), 226.15(b), and 226.16(b)(1); MB CNP-04-2019 Transferring Excess Funds between Child Nutrition Programs, and MB SNP-27-2015, CACFP-07-2015 SFA Revenue and Expenditure Tracking for the CACFP and SNP; USDA FNS Instruction 796-2, Revision 4