CACFP Administrative Manual Section 6.3

Section 6: Financial Management

Section 6.3 Center Expenditure Tracking and Nonprofit Food Service Status

All agencies must have a separate Child and Adult Care Food Program (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

School Food Authorities (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.

Nonprofit Food Service Status

A center, whether it is public, nonprofit, or for-profit, must operate a nonprofit food service operation. Nonprofit food service includes all food service operations conducted by the center principally for the benefit of enrolled participants. All program reimbursement funds are used solely for the operation or improvement of the CACFP. A center must have procedures for comparing food service costs to CACFP reimbursement to ensure they maintain a nonprofit food service. If a center’s accounting system shows an account balance for the food service program, that account balance cannot at any time exceed six 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 Child Nutrition Programs (CNP) operated by the agency.

Note: Program operators with excess funds in the CACFP may transfer funds only for costs that are allowable within the CNP that receives the transferred excess funds. For more information, refer to the California Department of Education MB CNP-04-2019: Transferring Excess Funds between Child Nutrition Programs.

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.

Questions: A list of program specialists that can assist is found on the CACFP Contact List.

This institution is an equal opportunity provider.
Esta institución es un proveedor que ofrece igualdad de oportunidades.

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CDSS Child and Adult Care Food Program
744 P Street, MS 9-13-290
Sacramento, CA 95814