Financial Management. Two components: –Demonstrating overall Viability, Capability, and...

Financial Management

Financial Management

• Two components:

– Demonstrating overall Viability, Capability, and Accountability (VCA)

– Showing how you spend CACFP reimbursements

VIABLE, CAPABLE & ACCOUNTABLE

Are you VCA?

Financial Management

• Financial Viability:– Adequate financial resources to:

• Operate the CACFP on a daily basis

• Pay employees and suppliers

*Even during temporary disruptions in CACFP payments*

• Repay overclaims

7 CFR § 226.6(b)(2)(vii)(A)

Financial Management

• Financial Viability:– Demonstrate viability with:

• Audit reports

• Financial statements

• Meeting your financial obligations

7 CFR § 226.6(b)(2)(vii)(A)

Financial Management

• Administrative Capability:– “Appropriate and effective management

practices” to ensure compliance with CACFP regulations

7 CFR § 226.6(b)(2)(vii)(B)

Financial Management

• Administrative Capability:– Demonstrate capability with:

• Policies and procedures

• Having adequate staff

• Training & training documentation

• Organized files and complete records

• Meeting CACFP requirements

7 CFR § 226.6(b)(2)(vii)(B)

Financial Management

• Accountability:– “Internal controls and other

management systems” to ensure fiscal integrity and regulatory compliance

7 CFR § 226.6(b)(2)(vii)(C)

Financial Management

• Accountability:– Demonstrate accountability with:

• Clear record keeping systems

• Providing adequate oversight and monitoring

• Cross-training employees

• Having outside accountants conduct audits

7 CFR § 226.6(b)(2)(vii)(C)

How are you using your CACFP reimbursements?

YOUR COSTS DO NOT DETERMINE YOUR REIMBURSEMENTS

REMEMBER…

Financial Management

• Guiding principles:

– Is the item or service necessary for operating the CACFP?

– Is the amount reasonable?

– Is the item or service an allowable CACFP expense?

Allowable Costs

• Operating Costs– Food– Food service labor– Non-food supplies:

• Paper products (plates, cups, napkins, etc.)• Dishes• Serving utensils• Cleaning products for the kitchen/food service area

– Food service equipment

Allowable Costs

• Administrative Costs– Administrative labor

• For time spent on CACFP paperwork, training, etc.

– Administrative supplies• Paper for CACFP records

• Ink to print CACFP records

• Portion of cost for computer hardware or software

– Administrative services• Portion of cost for an accountant or auditor

• Document storage costs

Allowable Costs

• For all costs:

– Is it CACFP-related?

– Is it primarily for the benefit of participants?

– Did I seek prior approval (if needed)?

– Did I follow proper procurement procedures?

– Did I allocate the cost (if needed)?

– Do I have proper documentation?

Proper Documentation

• Procurement documents

• Itemized receipts or invoices

– Delivery slips

– Donation records

• Allocations

• Payroll records

– Time distribution reports

• Mileage logs

Allocations

• Allocations are needed if the cost:

– Benefits allowable and unallowable activities

– Benefits both CACFP and other program areas

– Benefits CACFP operations in multiple states

– For sponsoring organizations: is both administrative and operational

• Must determine whether a cost is direct or indirect (overhead)

Allocations

• Indirect cost: Cost of items or services that have a common purpose to support overall operations and cannot be readily assigned to a specific program or funding source

• Direct cost: Cost of items or services that can be identified with a specific program or funding source

Allocations

• Indirect cost: allocation or rate must be based on a plan approved by the State Agency and is subject to FNS approval

• Direct cost: – Allocation must be based on use or benefit– Allocation must be pre-approved by the State

Agency

Labor Allocations

• Time distribution reports are required if – An allocation is required and – CACFP reimbursements will be used to pay

for all or part of the employee’s allowable wages or benefits.

• Only the share of the wages and benefits associated with CACFP-related labor may be paid with CACFP funds.

Labor Allocations

• Time distribution reports must be:– Done by the employee– Complete

• Account for all activity (not just CACFP labor)

– Filled out after the fact to reflect actual time spent on various duties

– Prepared at least monthly– Signed by the employee– Signed by the employee’s supervisor

Good Financial Management

• Track CACFP reimbursements

• Track CACFP-related expenses

• Monitor non-profit food service status

Is this cost allowable?

Food for meals served to children

A. Allowable

B. Not allowable

C. Allowable if…

Claims for Reimbursement

Food for meals served to children

A. Allowable

B. Not allowable

C. Allowable if

*Need itemized receipts or invoices and delivery slips (if applicable)

Is this cost allowable?

Food for meals served to the staff

A. Allowable

B. Not allowable

C. Allowable if…

Claims for Reimbursement

Food for meals served to the staff

A. Allowable

B. Not allowable

C. Allowable if

* Must perform CACFP-related labor on the day of the meal (includes teachers who serve meals)

* Maintain count of the number of meals served to program adults

* Allowable cost ≠ eligible for reimbursement

Is this cost allowable?

Food for the church’s Sunday spaghetti dinners

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Food for the church’s Sunday spaghetti dinners

A. Allowable

B. Not allowable

C. Allowable if…

Food served to ineligible participants or adults without CACFP duties is not an allowable cost.

Is this cost allowable?

The gas and electricity bill

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

The gas and electricity bill

A. Allowable

B. Not allowable

C. Allowable if…

* Allowable as an indirect cost if the State Agency approved it as part of your indirect cost plan

* Allowable as a direct cost if the State Agency approved the allocation plan

* Must have bill + proof of payment + documentation to support allocation (ex. floor plan with square footage)

Is this cost allowable?

Play equipment

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Play equipment

A. Allowable

B. Not allowable

C. Allowable if…

Play equipment is not necessary for operating the CACFP.

Is this cost allowable?

Salary of the center director

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Salary of the center director

A. Allowable

B. Not allowable

C. Allowable if…

*Must maintain payroll records and time distribution reports.

*Only time spent on CACFP duties may be paid with CACFP funds.

Is this cost allowable?

Paper products (plates, napkins, etc.)

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Paper products (plates, napkins, etc.)

A. Allowable

B. Not allowable

C. Allowable if…

*Need itemized receipts or invoices

Is this cost allowable?

A printer/fax machine/scanner

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

A printer/fax machine/scanner

A. Allowable

B. Not allowable

C. Allowable if…

* Allowable as a direct cost if the State Agency approved the allocation plan

* Must have the receipt/invoice and documentation to support allocation

Is this cost allowable?

An accordion file folder for your records

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

An accordion file folder for your records

A. Allowable

B. Not allowable

C. Allowable if…

*Need itemized receipts or invoices

Is this cost allowable?

Baby bottles

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Baby bottles

A. Allowable

B. Not allowable

C. Allowable if…

*Need itemized receipts or invoices

Is this cost allowable?

Coffee for the staff break room

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Coffee for the staff break room

A. Allowable

B. Not allowable

C. Allowable if…

*Not necessary for operating the CACFP

*Not CACFP-related

Is this cost allowable?

Milk from the corner store

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

Milk from the corner store

A. Allowable

B. Not allowable

C. Allowable if…

*Not itemized

Is this cost allowable?

ServSafe training for your food safety manager(s)

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

ServSafe training for your food safety manager(s)

A. Allowable

B. Not allowable

C. Allowable if…

*Need receipt or invoice and training certificate

Is this cost allowable?

A diploma frame for every staff member’s ServSafe certificate

A. Allowable

B. Not allowable

C. Allowable if…

Is this cost allowable?

A diploma frame for every staff member’s ServSafe certificate

A. Allowable

B. Not allowable

C. Allowable if…

*Unreasonable cost

Questions?