Presentation on theme: "1 15% Cap. 2 Why the Cap is Necessary Center reimbursement covers admin. & operating costs (like school meal rates) More $ kept for admin = less $ for."— Presentation transcript:
2 Why the Cap is Necessary Center reimbursement covers admin. & operating costs (like school meal rates) More $ kept for admin = less $ for meals “ Retained ” means the amount of money the sponsor keeps for its admin. costs Audits/reviews found 25-30% approved with even more retained 15% consistent with school meal program admin costs
3 What the Interim Rule Does Applies cap to: Approved budget estimate Actual retention during the year
7 Center Sponsor Administrative Costs Claims preparation F/RP eligibility determinations Monitoring Training Must conform to 796-2
8 Suggestion or Goal? The cap is not a: Suggestion Goal Guarantee Floor (minimum)
9 Mandate The cap is a: Ceiling (maximum) Applies to all administrative costs at the sponsor and sponsored center level
10 Sponsored Center Administrative Costs Included in the cap because: Law limits the amount of CACFP funds retained for administrative costs - not who pays the costs Not including sponsored center admin. costs = incentive to shift costs to evade cap
11 How the Cap Works: Budgets Sponsor must report all admin. costs on budget –Including all sponsored center administrative costs –SAs must revise application budget documents for center sponsors to capture all admin. costs
12 How the Cap Works: Monthly Retention Three factors: 1.Amount of reimbursement actually earned 2.Annual limit of 15 percent 3.Cannot exceed monthly allowable costs
13 How the Cap Works: Sponsor Responsibilities Sponsors must: Monitor monthly retention on year-to-date basis Monitor actual vs. projected reimbursement earnings Adjust retention to stay within “cap”
14 Retention Question Question: Is a sponsor prohibited from retaining more than 15% in a month? Answer: No. Sponsors can vary recovery of monthly amounts, but cannot retain more than 15% for the year.
15 Example 1: ABC Center Sponsor Retention October (1st month budget year) Reimbursement ($13,200) earned X 15%:$ 1,980 Actual admin costs & retention:$ 4,486 Approved budget =$ 22,500 Actual expenses -$ 4,486 Available for remainder of year = $ 18,014
16 Key Considerations Sponsors & SA must track actual admin. costs Time major expenditures throughout the year
17 Mistakes, Errors & Misconduct Problem: Sponsor retains more than approved Resolution: ID causes, require corrective action –Restore funds to sponsored centers or CNP Account –Improve fiscal procedures –Escalate SA oversight Serious deficiency when appropriate
18 Recap State agencies : –Apply 15% cap to budgets –Monitor retention practices of sponsors Center sponsors : –Prepare budgets that reflect 15% cap –Establish internal controls to ensure proper retention –Maintain records to demonstrate compliance
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