Funding your CACFP Adventure: CACFP Financial Management 2014 CACFP Financial Management Summer Training - Centers 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 Budget and Plan Accounting System and Recordkeeping Incur Food Program Costs Track Food Program Costs & Retain documentation Submit Reimbursement Claim Reimbursement Received Report to DPI (Annually/Quarterly Review and Success

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 2014 CACFP Financial Management Summer Training - Centers 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. To ensure you have the right map…

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

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. 2014 CACFP Financial Management Summer Training - Centers 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

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

CACFP BUDGET Projection – “Road Map” of Upcoming Program Year 2014 CACFP Financial Management Summer Training - Centers 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 All Revenue Available: CACFP Meal Reimbursement CACFP Cash-in-lieu reimbursement Interest earned on CACFP funds and/or other FS income “Other” Non-CACFP Income Unfunded/Unallowable Costs SA Overclaims Interruption in Program Payments Ex. Child Care Fees, Tuition, Headstart, W-2, Donations

Administrative & Operational Costs 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) 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) 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

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

Bank Accounts ACH Payments Must be in agency’s legal name 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

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

* Information per US GAAP 2014 CACFP Financial Management Summer Training - Centers 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 Financial Reports 2014 CACFP Financial Management Summer Training - Centers 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 Types of Accounting Systems: Cash System: Recognizes revenues and costs when cash is received and bills are paid. Accrual System: Recognizes revenues and costs when costs are incurred and uses a payable and receivable system. Modified Accrual System: Certain expenses are reported on an accrual basis. US GAAP: Rules for the accounting of costs and revenues

Accounting System Audits 2014 CACFP Financial Management Summer Training - Centers 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

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

2014 CACFP Financial Management Summer Training - Centers 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

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

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 Monthly Food Receipts Timesheets 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 Sample Calendar Month Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 Claim Submitted (Agency) 6 Claim Process Day (DPI) 7 8 Voucher Date (DPI) 9 10 11 12 13 14 15 16 17 18 19 Check/ACH issued 20 21 22 23 24 25 26 27 29 30 31

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

Reporting: Compliance CACFP Financial Reports CACFP Reviews

Nonprofit Food Service Financial Report (NPFS) 2014 CACFP Financial Management Summer Training - Centers Nonprofit Food Service Financial Report (NPFS) Form PI-1463 (Independent) and PI-1463-A (Sponsors) Report of all ACTUAL CACFP expenditures 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 – even for-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

CACFP Financial Reviews SA Reviews (DPI) Announced or Unannounced Usually occur during a program review Items to have available: Support documentation for NPFS for current and last FFY ALL support documentation for food program costs Bank statements/cancelled checks for food program funds General Ledger, allocation plan, P/L reports Should be able to describe accounting system. How do you pay your bills? Where did CACFP funds go? “It’s at my accountants” – Unacceptable excuse

CACFP Financial Reviews SA Reviews (continued) Any non-food program/unallowable cost found to be paid with CACFP funds will be disallowed. May result in repayment to DPI. CACFP funds exceed CACFP costs = repayment to DPI Appeal-able Action MUST BE ORGANIZED Be able to show and explain your organizations system USDA Reviews Monitoring SA as part of Management Evaluation SA will work with agency on Corrective Action (if needed)

Reach Your CACFP Destination Plan, budget, and organize the funds available will help you to maximize your CACFP reimbursement. No planning, using funds on non-program needs, no accountability of funds spent will result in loss of funding and/or participation

Child and Adult Care Food Program (CACFP) Are You Ready ? 2014 CACFP Financial Management Summer Training - Centers Wisconsin Department of Public Instruction Tony Evers, PhD, State Superintendent April 22, 2014

Which are allowable food costs?   Crab meat Soda Pop Rabbit Food Teacher Meals Refrigerator Milk Beer & Liquor Personal Groceries Spices Bread        

Which are allowable nonfood/kitchen supplies?  Dishes Milk Cups Arts/Crafts Supplies Center garden supplies (min. value)  Toilet paper Cooking utensils Dishwashing detergent Paper towels used in the classrooms        Need to be separated from food supplies on receipts.

What are some “Other” allowable CACFP expenses?  Food Service labor Operational Exp. Admin. Labor Only CACFP % Vended Meals Contracted Service  Kitchen Equipment Gas for Vehicles Only CACFP % Maintenance/Repairs     CACFP funds should always be spent on food and kitchen supplies FIRST

What items should you retain to support your CACFP costs?  Receipts Invoices Payroll (timesheets, paystubs, etc.) Checkbook/check register General Ledger CACFP Claim documentation Bank Statements A shoebox or garbage bag The number to your accountant         Retained for 4 years (3 yrs plus the current)

QUESTIONS

Contact Info Cari Ann Muggenburg, Auditor Community Nutrition Programs Ph. 608-264-9551 E-mail: cari.muggenburg@dpi.wi.gov