Reimbursement for CACFP Audit Costs
The Early Childhood Development Act of 2020 (Senate Bill (SB) 98, Chapter 24, Statutes of 2020) authorized the transfer of child care and development programs administered by the California Department of Education to the California Department of Social Services (CDSS) effective July 1, 2021. The content on this page may not be current and involves the Child and Adult Care Food Program (CACFP) that has moved to CDSS. Visit the CDSS CACFP web page or call 1-833-559-2420 for more information.
Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information
To: Child and Adult Care Food Program Agencies
Attention: Food Program Managers
Date: November 2016
Reference: Title 7, Code of Federal Regulation (CFR), Part 226.8, Child and Adult Care Food Program
Supersedes: Management Bulletin NSD-CACFP-07-2008
Subject: Reimbursement for Child and Adult Care Food Program Audit Costs
This management bulletin (MB) advises agencies participating in the Child and Adult Care Food Program (CACFP) about federal funding that may be available for reimbursement of costs associated with an annual audit or program-specific audit if the agency receives and expends $750,000 or more in federal awards during its fiscal year. This MB also clarifies the amount of reimbursement an agency is eligible to receive for the auditing costs associated with a CACFP-related annual audit and the process for requesting reimbursement.
Audit cost reimbursement will only be considered if the CACFP funds were audited in accordance with the Office of Management and Budget’s (OMB’s) Circular A-133 Compliance Supplement for Audits of States, Local Governments, and Non-Profit Organizations, Section 10.558, and the audit report includes the appropriate information, as specified in the California Department of Education (CDE) Audit Guide, Section 426, dated August 2020. The following conditions must be met in order to be eligible for audit cost reimbursement:
- Audit costs are reasonable and approved in the agency’s CACFP budget.
- An independent certified public accountant (CPA) conducted the audit.
- The agency paid the audit engagement fees in full.
- The appropriate Annual Audit Status Certification form is on file with the CDE Audits and Investigations Division (A&I).
- The annual audit report includes all required financial information and schedules.
- The agency has no outstanding child nutrition accounts receivable with the CDE.
In addition, the agency must submit the following documents to A&I:
- A copy of the engagement letter between the agency and CPA delineating the scope of audit work and fees.
- The CPA’s itemized invoices listing the cost for each program/fund audited.
- A copy of the audit report.
- A copy of all cancelled checks (front and back) substantiating full payment of the CPA audit fees.
Audit Cost Reimbursement Calculation
Federal CACFP audit cost reimbursement is based on a pro-rata methodology in which the amount of reimbursement is generally determined by dividing the agency’s federal CACFP funding by the agency’s total amount of federal and state expended financial assistance, then multiplying the resulting pro-rata factor by the fees charged by the CPA for performing the audit. Accordingly, the formula for determining the amount of federal audit cost reimbursement is:
- Federal CACFP funding (a) divided by (÷) total federal and state financial assistance (b) = pro-rata factor
- Pro-rata factor multiplied by (×) CPA's audit fees (c) = maximum amount of audit cost reimbursement (d)
Sample Calculation—Annual Audit
(a) ÷ (b) = pro-rata factor
$300,000 ÷ $1,000,000 = 0.30
Program-specific Audit Cost Reimbursement Calculation
For agencies submitting a CACFP program-specific audit report, the amount of reimbursement is generally determined by dividing the agency’s federal CACFP funding by the total federal and state CACFP funding and then multiplying the resulting pro-rata factor by the fees charged by the CPA for performing the agency’s program-specific audit. Accordingly, the formula for determining the amount of program-specific federal audit cost reimbursement is:
- Federal CACFP funding (e) divided by (÷) federal and state CACFP funds (f) = pro-rata factor
- Pro-rata factor multiplied by (×) CPA's audit fees (g) = maximum amount of audit cost reimbursement (h)
Sample Calculation—Program-specific Audit
(e) ÷ (f) = pro-rata factor
$540,000 ÷ $750,000 = 0.72
Requests for audit cost reimbursement along with the required documents should be mailed or emailed to:
California Department of Education
Audits and Investigations Division
1430 N Street, Suite 5319
Sacramento, CA 95814
If you have any questions regarding receiving federal CACFP audit cost reimbursement, please contact Laura Langston, Audit Manager, at 916-323-5752 or by e-mail at email@example.com.