PART 226—CHILD AND ADULT CARE FOOD PROGRAM Authority: Secs. 9, 11, 14, 16, and 17, Richard B. Russell National School Lunch Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765 and 1766). Source: 47 FR 36527, Aug. 20, 1982, unless otherwise noted. Editorial Note: Nomenclature changes to part 226 appear at 70 FR 43261, July 27, 2005. Subpart A—General § 226.1 General purpose and scope. This part announces the regulations under which the Secretary of Agriculture will carry out the Child and Adult Care Food Program. Section 17 of the Richard B. Russell National School Lunch Act, as amended, authorizes assistance to States through grants-in-aid and other means to initiate, maintain, and expand nonprofit food service programs for children and adult participants in non-residential institutions which provide care. The Program is intended to provide aid to child and adult participants and family or group day care homes for provision of nutritious foods that contribute to the wellness, healthy growth, and development of young children, and the health and wellness of older adults and chronically impaired persons. [81 FR 24377, Apr. 25, 2016] § 226.2 Definitions. 2 CFR part 200, Act Administrative costs Administrative review (a) An institution that has been given notice by the State agency of any action or proposed action that will affect their participation or reimbursement under the Program, in accordance with § 226.6(k); (b) A principal or individual responsible for an institution's serious deficiency after the responsible principal or responsible individual has been given a notice of intent to disqualify them from the Program; and (c) A day care home that has been given a notice of proposed termination for cause. Administrative review official Adult Adult day care center Adult day care facility Adult participant Advanced payments At-risk afterschool care center Emergency shelter, At-risk afterschool meal At-risk afterschool care center At-risk afterschool snack At-risk afterschool care center CACFP child care standards Center Child care center Child care facility Children (a) Persons age 12 and under; (b) Persons age 15 and under who are children of migrant workers; (c) Persons with disabilities (d) For emergency shelters, persons age 18 and under; and (e) For at-risk afterschool care centers, persons age 18 and under at the start of the school year. Claiming percentage Current income Day care home Days Department Disclosure Disqualified Documentation (a) The completion of the following information on a free and reduced-price application: (1) Names of all household members; (2) Income received by each household member, identified by source of income (such as earnings, wages, welfare, pensions, support payments, unemployment compensation, social security and other cash income); (3) The signature of an adult household member; and (4) The last four digits of the social security number of the adult household member who signs the application, or an indication that the adult does not possess a social security number; or (b) For a child who is a member of a SNAP or FDPIR household or who is a TANF recipient, “documentation” means the completion of only the following information on a free and reduced price application: (1) The name(s) and appropriate SNAP, FDPIR or TANF case number(s) for the child(ren); and (2) The signature of an adult member of the household; or (c) For a child in a tier II day care home who is a member of a household participating in a Federally or State supported child care or other benefit program with an income eligibility limit that does not exceed the eligibility standard for free or reduced price meals: (1) The name(s), appropriate case number(s) (if the program utilizes case numbers), and name(s) of the qualifying program(s) for the child(ren), and the signature of an adult member of the household; or (2) If the sponsoring organization or day care home possesses it, official evidence of the household's participation in a qualifying program (submission of a free and reduced price application by the household is not required in this case); or (d) For an adult participant who is a member of a SNAP or FDPIR household or is an SSI or Medicaid participant, as defined in this section, “documentation” means the completion of only the following information on a free and reduced price application: (1) The name(s) and appropriate SNAP or FDPIR case number(s) for the participant(s) or the adult participant's SSI or Medicaid identification number, as defined in this section; and (2) The signature of an adult member of the household; or (e) For a child who is a Head Start participant, the Head Start statement of income eligibility issued upon initial enrollment in the Head Start Program or, if such statement is unavailable, other documentation from Head Start officials that the child's family meets the Head Start Program's low-income criteria. Eligible area (a) For the purpose of determining the eligibility of at-risk afterschool care centers, the attendance area of a school in which at least 50 percent of the enrolled children are certified eligible for free or reduced-price school meals; or (b) For the purpose of determining the tiering status of day care homes, the attendance area of a school in which at least 50 percent of the enrolled children are certified eligible for free or reduced-price meals, or the area based on the most recent census data in which at least 50 percent of the children residing in the area are members of households that meet the income standards for free or reduced-price meals. Emergency shelter Enrolled child Enrolled participant Expansion payments Facility Family FDPIR household Fiscal Year FNS FNSRO Food service equipment assistance Food service management company For-profit center (a) A for-profit center serving adults must meet the definition of Adult day care center (b) A for-profit center serving children must meet the definition of Child care center Outside-school-hours care center (1) Twenty-five percent of the children in care (enrolled or licensed capacity, whichever is less) are eligible for free or reduced-price meals; or (2) Twenty-five percent of the children in care (enrolled or licensed capacity, whichever is less) receive benefits from title XX of the Social Security Act and the center receives compensation from amounts granted to the States under title XX. Foster child Free meal (a) A participant from a family which meets the income standards for free school meals, or (b) A foster child, or (c) A child who is automatically eligible for free meals by virtue of SNAP, FDPIR, or TANF benefits, or (d) A child who is a Head Start participant, or (e) A child who is receiving temporary housing and meal services from an approved emergency shelter, or (f) A child participating in an approved at-risk afterschool care program, or (g) An adult participant who is automatically eligible for free meals by virtue of SNAP or FDPIR benefits, or (h) An adult who is an SSI or Medicaid participant. Functionally impaired adult Group living arrangement Head Start participant Household Household contact Income standards Income to the program Independent center Independent governing board of directors Infant cereal Infant formula Institution Internal controls (a) The Program achieves its intended result; (b) Program resources are used in a manner that protects against fraud, abuse, and mismanagement and in accordance with law, regulations, and guidance; and (c) Timely and reliable Program information is obtained, maintained, reported, and used for decision-making. Key Element Reporting System Low-income area Meal component Meals Medicaid Title XIX Medicaid participant Milk National disqualified list New institution Nonpricing program Nonprofit food service Nonresidential Notice OIG Operating costs Outside-school-hours care center For-profit center Participants Participating institution Personal property Persons with disabilities Pricing program Principal Program Program payments Reduced-price meal Reimbursement Renewing institution Responsible principal or responsible individual (a) A principal, whether compensated or uncompensated, who the State agency or FNS determines to be responsible for an institution's serious deficiency; (b) Any other individual employed by, or under contract with, an institution or sponsored center, who the State agency or FNS determines to be responsible for an institution's serious deficiency; or (c) An uncompensated individual who the State agency or FNS determines to be responsible for an institution's serious deficiency. Rural area SSI participant School year Seriously deficient Snack SNAP household SNAP, Sponsored center (1) An affiliated center is a part of the same legal entity as the CACFP sponsoring organization; or (2) An unaffiliated center is legally distinct from the sponsoring organization. Sponsoring organization (1) One or more day care homes; (2) A child care center, emergency shelter, at-risk afterschool care center, outside-school-hours care center, or adult day care center which is a legally distinct entity from the sponsoring organization; (3) Two or more child care centers, emergency shelters, at-risk afterschool care centers, outside-school-hours care center, or adult day care centers; or (4) Any combination of child care centers, emergency shelters, at-risk afterschool care centers, outside-school-hours care centers, adult day care centers, and day care homes. The term “sponsoring organization” also includes an organization that is entirely responsible for administration of the Program in any combination of two or more child care centers, at-risk afterschool care centers, adult day care centers or outside-school-hours care centers, which meet the definition of For-profit center Start-up payments State State agency State agency list (a) Institutions determined to be seriously deficient by the State agency, including the names and mailing addresses of the institutions, the basis for each serious deficiency determination, and the status of the institutions as they move through the possible subsequent stages of corrective action, proposed termination, suspension, agreement termination, and/or disqualification, as applicable; (b) Responsible principals and responsible individuals who have been disqualified from participation by the State agency, including their names, mailing addresses, and dates of birth; and (c) Day care home providers whose agreements have been terminated for cause by a sponsoring organization in the State, including their names, mailing addresses, and dates of birth. State Children's Health Insurance Program (SCHIP) et seq. State licensed healthcare professional Suspended Suspension review Suspension review official Termination for cause TANF recipient Termination for convenience (1) A State agency and the independent center, (2) A State agency and the sponsoring organization, (3) A sponsoring organization and the unaffiliated center, or (4) A sponsoring organization and the day care home. Tier I day care home (b) A day care home that is located in an area served by a school enrolling students in which at least 50 percent of the total number of children enrolled are certified eligible to receive free or reduced price meals; or (c) A day care home that is located in a geographic area, as defined by FNS based on census data, in which at least 50 percent of the children residing in the area are members of households which meet the income standards for free or reduced price meals. Tier II day care home Tier I day care home. Title XVI Title XIX Title XX Tofu Unannounced review USDA implementing regulations Verification Whole grain-rich Whole grains Yogurt [47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982] Editorial Note: For Federal Register www.govinfo.gov. § 226.3 Administration. (a) Within the Department, FNS shall act on behalf of the Department in the administration of the Program. (b) Within the States, responsibility for the administration of the Program shall be in the State agency, except that if FNS has continuously administered the Program in any State since October 1, 1980, FNS shall continue to administer the Program in that State. A State in which FNS administers the Program may, upon request to FNS, assume administration of the Program. (c) Each State agency desiring to take part in the Program shall enter into a written agreement with the Department for the administration of the Program in the State in accordance with the provisions of this part. This agreement shall cover the operation of the Program during the period specified therein and may be extended by consent of both parties. (d) FNSRO shall, in each State in which it administers the Program, have available all funds and assume all responsibilities of a State agency as set forth in this part. (e)(1) As authorized under section 12(l) of the Richard B. Russell National School Lunch Act, FNS may waive provisions of such Act or the Child Nutrition Act of 1966, as amended, and the provisions of this part with respect to a State agency or eligible service provider. The provisions of this part required by other statutes may not be waived under this authority. FNS may only approve requests for a waiver that are submitted by a State agency and comply with the requirements at section 12(l)(1) and the limitations at section 12(l)(4), including that FNS may not grant a waiver that increases Federal costs. (2)(i) A State agency may submit a request for a waiver under paragraph (e)(1) of this section in accordance with section 12(l)(2) and the provisions of this part. (ii) A State agency may submit a request to waive specific statutory or regulatory requirements on behalf of eligible service providers that operate in the State. Any waiver where the State concurs must be submitted to the appropriate FNSRO. (3)(i) An eligible service provider may submit a request for a waiver under paragraph (e)(1) of this section in accordance with section 12(l) and the provisions of this part. Any waiver request submitted by an eligible service provider must be submitted to the State agency for review. A State agency must act promptly on such a waiver request and must deny or concur with a request submitted by an eligible service provider. (ii) If a State agency concurs with a request from an eligible service provider, the State agency must promptly forward to the appropriate FNSRO the request and a rationale, consistent with section 12(l)(2), supporting the request. By forwarding the request to the FNSRO, the State agency affirms: (A) The request meets all requirements for waiver submissions; and, (B) The State agency will conduct all monitoring requirements related to regular Program operations and the implementation of the waiver. (iii) If the State agency denies the request, the State agency must notify the requesting eligible service provider and state the reason for denying the request in writing within 30 calendar days of the State agency's receipt of the request. The State agency response is final and may not be appealed to FNS. [47 FR 36527, Aug. 20, 1982, as amended at 87 FR 57366, Sept. 19, 2022] Subpart B—Assistance to States § 226.4 Payments to States and use of funds. (a) Availability of funds. (b) Center funds. (1) The number of breakfasts served in the Program within the State to participants from families that do not satisfy the eligibility standards for free and reduced-price school meals enrolled in institutions by the national average payment rate for breakfasts for such participants under section 4 of the Child Nutrition Act of 1966; (2) The number of breakfasts served in the Program within the State to participants from families that satisfy the eligibility standards for free school meals enrolled in institutions by the national average payment rate for free breakfasts under section 4 of the Child Nutrition Act of 1966; (3) The number of breakfasts served to participants from families that satisfy the eligibility standard for reduced-price school meals enrolled in institutions by the national average payment rate for reduced-price school breakfasts under section 4 of the Child Nutrition Act of 1966; (4) The number of lunches and suppers served in the Program within the State by the national average payment rate for lunches under section 4 of the National School Lunch Act. (All lunches and suppers served in the State are funded under this provision); (5) The number of lunches and suppers served in the Program within the State to participants from families that satisfy the eligibility standard for free school meals enrolled in institutions by the national average payment rate for free lunches under section 11 of the National School Lunch Act; (6) The number of lunches and suppers served in the Program within the State to participants from families that satisfy the eligibility standard for reduced-price school meals enrolled in institutions by the national average payment rate for reduced-price lunches under section 11 of the National School Lunch Act; (7) The number of snacks served in the Program within the State to participants from families that do not satisfy the eligibility standards for free and reduced-price school meals enrolled in institutions by 2.75 cents; (8) The number of snacks served in the Program within the State to participants from families that satisfy the eligibility standard for free school meals enrolled in institutions by 30 cents; (9) The number of snacks served in the Program within the State to participants from families that satisfy the eligibility standard for reduced-price school meals enrolled in institutions by 15 cents. (c) Emergency shelter funds. (d) At-risk afterschool care center funds. (e) Day care home funds. (1) The number of breakfasts served in the Program within the State to children enrolled in tier I day care homes by the current tier I day care home rate for breakfasts; (2) The number of breakfasts served in the Program within the State to children enrolled in tier II day care homes that have been determined eligible for free or reduced price meals by the current tier I day care home rate for breakfasts; (3) The number of breakfasts served in the Program within the State to children enrolled in tier II day care homes that do not satisfy the eligibility standards for free or reduced price meals, or to children from whose households applications were not collected, by the current tier II day care home rate for breakfasts; (4) The number of lunches and suppers served in the Program within the State to children enrolled in tier I day care homes by the current tier I day care home rate for lunches/suppers; (5) The number of lunches and suppers served in the Program within the State to children enrolled in tier II day care homes that have been determined eligible for free or reduced price meals by the current tier I day care home rate for lunches/suppers; (6) The number of lunches and suppers served in the Program within the State to children enrolled in tier II day care homes that do not satisfy the eligibility standards for free or reduced price meals, or to children from whose households applications were not collected, by the current tier II day care home rate for lunches/suppers; (7) The number of snacks served in the Program within the State to children enrolled in tier I day care homes by the current tier I day care home rate for snacks; (8) The number of snacks served in the Program within the State to children enrolled in tier II day care homes that have been determined eligible for free or reduced price meals by the current tier I day care home rate for snacks; and (9) The number of snacks served in the Program within the State to children enrolled in tier II day care homes that do not satisfy the eligibility standards for free or reduced price meals, or to children from whose households applications were not collected, by the current tier II day care home rate for snacks. (f) Administrative funds. (g) Start-up and expansion funds. (h) Funding assurance. (i) Rate adjustments. Federal Register (1) The rates for meals, including snacks, served in tier I and tier II day care homes shall be adjusted annually, on July 1 (beginning July 1, 1997), on the basis of changes in the series for food at home of the Consumer Price Index for All Urban Consumers published by the Department of Labor. Such adjustments shall be rounded to the nearest lower cent based on changes measured over the most recent twelve-month period for which data are available. The adjustments shall be computed using the unrounded rate in effect for the preceding school year. (2) The rates for meals, including snacks, served in child care centers, emergency shelters, at-risk afterschool care centers, adult day care centers and outside-school-hours care centers will be adjusted annually, on July 1, on the basis of changes in the series for food away from home of the Consumer Price Index for All Urban Consumers published by the Department of Labor. Such adjustment must be rounded to the nearest lower cent, based on changes measured over the most recent twelve-month period for which data are available. The adjustment to the rates must be computed using the unrounded rate in effect for the preceding year. (3) The rate for administrative payments to day care home sponsoring organizations shall be adjusted annually, on July 1, on the basis of changes in the series for all items of the Consumer Price Index for All Urban Consumers published by the Department of Labor. Such adjustments shall be made to the nearest dollar based on changes measured over the most recent twelve-month period for which data are available. (j) Audit funds. (2) State agencies may request an increase in the amount of funds made available under this paragraph. (i) FNS approval for increased funding will be based on the State agency's expressed need for an increase in resources to meet audit requirements, fulfill monitoring requirements, or effectively improve Program management. (ii) The total amount of audit funds made available to any State agency under this paragraph may not exceed 2 percent of Program funds used by the State during the second fiscal year preceding the fiscal year for which the funds are made available. (iii) The amount of assistance provided to a State agency under this paragraph in any fiscal year may not exceed the State's expenditures under §§ 226.6(m) and 226.8 during the fiscal year in which the funds are made available. (k) Method of funding. (l) Special developmental projects. [47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36906, Oct. 2, 1987; 53 FR 52588, Dec. 28, 1988; 62 FR 902, Jan. 7, 1997; 63 FR 9728, Feb. 26, 1998; 69 FR 53536, Sept. 1, 2004; 71 FR 4, Jan. 3, 2006; 71 FR 39518, July 13, 2006; 72 FR 41603, 41604, July 31, 2007; 75 FR 16327, Apr. 1, 2010; 76 FR 34569, June 13, 2011; 78 FR 13451, Feb. 28, 2013; 81 FR 66492, Sept. 28, 2016; 88 FR 57851, Aug. 23, 2023] § 226.5 Donation of commodities. (a) USDA foods available under section 6 of this Act, section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431) or purchased under section 32 of the Act of August 24, 1935 (7 U.S.C. 1431), section 709 of the Food and Agriculture Act of 1965 (7 U.S.C. 1446a-1), or other authority, and donated by the Department shall be made available to each State. (b) The value of such commodities donated to each State for each school year shall be, at a minimum, the amount obtained by multiplying the number of reimbursable lunches and suppers served in participating institutions in that State during the preceding school year by the rate for commodities established under section 6(e) of the Act for the current school year. Adjustments shall be made at the end of each school year to reflect the difference between the number of reimbursable lunches and suppers served during the preceding year and the number served during the current year, and subsequent commodity entitlement shall be based on the adjusted meal counts. At the discretion of FNS, current-year adjustments may be made for significant variations in the number of reimbursable meals served. Such current-year adjustments will not be routine and will only be made for unusual problems encountered in a State, such as a disaster that necessitates institutional closures for a prolonged period of time. CACFP State agencies electing to receive cash-in-lieu of commodities will receive payments based on the number of reimbursable meals actually served during the current school year. [47 FR 36527, Aug. 20, 1982, as amended at 62 FR 23618, May 1, 1997] Subpart C—State Agency Provisions § 226.6 State agency administrative responsibilities. (a) State agency personnel. (1) Administer the Program; (2) Provide sufficient training and technical assistance to institutions; (3) Monitor Program performance; (4) Facilitate expansion of the Program in low-income and rural areas; and (5) Ensure effective operation of the Program by participating institutions. (b) Program applications and agreements. (1) Application procedures for new institutions. (i) Participant eligibility information. (ii) Enrollment information. (A) The total number of children enrolled in all homes in the sponsorship; (B) An assurance that day care home providers' own children whose meals are claimed for reimbursement in the Program are eligible for free or reduced-price meals; (C) The total number of tier I and tier II day care homes that it sponsors; (D) The total number of children enrolled in tier I day care homes; (E) The total number of children enrolled in tier II day care homes; and (F) The total number of children in tier II day care homes that have been identified as eligible for free or reduced-price meals; (iii) Nondiscrimination statement. (iv) Management plan. (A) Detailed information on the organization's management and administrative structure; (B) A list or description of the staff assigned to Program monitoring, in accordance with the requirements set forth at § 226.16(b)(1); (C) An administrative budget that includes projected CACFP administrative earnings and expenses; (D) The procedures to be used by the organization to administer the Program in, and disburse payments to, the child care facilities under its sponsorship; and (E) For sponsoring organizations of family day care homes, a description of the system for making tier I day care home determinations, and a description of the system of notifying tier II day care homes of their options for reimbursement; (v) Budget. (vi) Documentation of licensing/approval. (vii) Documentation of tax-exempt status. (viii) At-risk afterschool care centers. (ix) Documentation of for-profit center eligibility. For-profit center (x) Preference for commodities/cash-in-lieu of commodities. (xi) Providing benefits to unserved facilities or participants Criteria. (B) Documentation. (xii) Presence on the National disqualified list. (xiii) Ineligibility for other publicly funded programs General. (B) Certification. ( 1 ( 2 ( 3 (C) Follow-up. (xiv) Information on criminal convictions. (B) Institutions must submit a certification that neither the institution nor any of its principals has been convicted of any activity that occurred during the past seven years and that indicated a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency; (xv) Certification of truth of applications and submission of names and addresses. (xvi) Outside employment policy. (xvii) Bond. (xviii) Compliance with performance standards. (A) Performance Standard 1—Financial viability and financial management. ( 1 Description of need/recruitment. ( 2 Fiscal resources and financial history. ( 3 Budgets. (B) Performance Standard 2—Administrative capability. ( 1 ( 2 ( 3 (C) Performance Standard 3—Program accountability. ( 1 Governing board of directors. ( 2 Fiscal accountability. ( i ( ii ( iii ( iv ( v ( 3 Recordkeeping. ( 4 Sponsoring organization operations. ( i ( ii ( iii ( iv ( 5 Meal service and other operational requirements. ( i ( ii ( iii ( iv ( v ( vi (2) Annual information submission requirements for State agency review of renewing institutions. (i) This paragraph (b)(2) contains the information that must be certified. The State agency must ensure that renewing independent centers certify the following to be true: (A) The institution and its principals are not currently on the National disqualified list, per paragraph (b)(1)(xii) of this section; (B) A list of any publicly funded programs that the sponsoring organization and its principals have participated in, in the past 7 years, is current, per paragraph (b)(1)(xiii)(B) of this section; (C) The institution and its principals have not been determined ineligible for any other publicly funded programs due to violation of that program's requirements, in the past 7 years, per paragraphs (b)(1)(xiii)(B) and (C) of this section; (D) No principals have been convicted of any activity that occurred during the past 7 years and that indicated a lack of business integrity, per paragraph (b)(1)(xiv)(B) of this section; (E) The names, mailing addresses, and dates of birth of all current principals have been submitted to the State agency, per paragraph (b)(1)(xv) of this section; (F) The institution is currently compliant with the required performance standards of financial viability and management, administrative capability, and program accountability, per paragraph (b)(1)(xviii) of this section; and (G) Licensing or approval status of each child care center or adult day care center is up-to-date. (ii) The State agency must ensure that renewing sponsoring organizations certify the following to be true: (A) All of the requirements under paragraph (b)(2)(i) of this section are certified to be true; (B) The management plan on file with the State agency is complete and up to date, per paragraph (b)(1)(iv) of this section; (C) No sponsored facility or principal of a sponsored facility is currently on the National disqualified list, per paragraph (b)(1)(xii) of this section; (D) The outside employment policy most recently submitted to the State agency remains current and in effect, per paragraph (b)(1)(xvi) of this section; (E) Licensing or approval status of each sponsored child care center, adult day care center, or day care home is up-to-date; (F) The list of the sponsoring organization's facilities on file with the State agency is up-to-date; and (G) All facilities under the sponsoring organization's oversight have adhered to Program training requirements. (iii) State agency review of institution information. (A) Management plan. (B) Administrative budget submission. Financial Management in the Child and Adult Care Food Program (C) Presence on the National disqualified list. (D) Ineligibility for other publicly funded programs. (E) Information on criminal convictions. (F) Submission of names and addresses. (G) Outside employment policy. (H) Compliance with performance standards. (I) Licensing. (J) Facility lists. (K) Facility training. (iv) Additional Information collection. (3) State agency notification requirements. (ii) Any renewing institution must be provided written notification indicating whether it has completely and sufficiently met all renewal information requirements within 30 days of the submission of renewal information. Whenever possible, State agencies should provide assistance to institutions whose information is incomplete. (4) Program agreements. (ii) The existence of a valid permanent agreement does not limit the State agency's ability to terminate the agreement, as provided under paragraph (c)(3) of this section. The State agency must terminate the institution's agreement whenever an institution's participation in the Program ends. The State agency must terminate the agreement for cause based on violations by the institution, facility, responsible principals, or responsible individuals, as described in paragraph (c) of this section. The State agency or institution may terminate the agreement at its convenience for considerations unrelated to the institution's performance of Program responsibilities under the agreement. However, any action initiated by the State agency to terminate an agreement for its convenience requires prior consultation with FNS. Termination for convenience does not result in ineligibility for any program authorized under this part or parts 210, 215, 220, or 225 of this chapter. (iii) The Program agreement must include the following requirements: (A) The responsibility of the institution to accept final financial and administrative management of a proper, efficient, and effective food service, and comply with all requirements under this part. (B) The responsibility of the institution to comply with all requirements of title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and the Department's regulations concerning nondiscrimination (parts 15, 15a and 15b of this title), including requirements for racial and ethnic participation data collection, public notification of the nondiscrimination policy, and reviews to assure compliance with the nondiscrimination policy, to the end that no person may, on the grounds of race, color, national origin, sex, age, or disability, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under, the Program. (C) The right of the State agency, the Department, and other State or Federal officials to make announced or unannounced reviews of their operations during the institution's normal hours of child or adult care operations, and that anyone making such reviews must show photo identification that demonstrates that they are employees of one of these entities. (c) Denial of applications and termination of agreements Denial of a new institution's application General. (A) Deny the new institution's application; and (B) Disqualify the new institution and the responsible principals and responsible individuals (e.g., the person who signs the application). (ii) List of serious deficiencies for new institutions. (A) Submission of false information on the institution's application, including but not limited to a determination that the institution has concealed a conviction for any activity that occurred during the past seven years and that indicates a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency; or (B) Any other action affecting the institution's ability to administer the Program in accordance with Program requirements. (iii) Serious deficiency notification procedures for new institutions. (A) Notice of serious deficiency. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 (B) Successful corrective action. 1 ( i ( ii ( 2 ( i ( ii ( iii ( 3 (C) Application denial and proposed disqualification. ( 1 ( 2 ( 3 (D) Program payments. (E) Disqualification. (2) Denial of a renewing institution's application General. initiate initiate (ii) List of serious deficiencies for renewing institutions. (A) Submission of false information on the institution's application, including but not limited to a determination that the institution has concealed a conviction for any activity that occurred during the past seven years and that indicates a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency; (B) Failure to operate the Program in conformance with the performance standards set forth in paragraphs (b)(1)(xviii) and (b)(2)(vii) of this section; (C) Failure to comply with the bid procedures and contract requirements of applicable Federal procurement regulations; (D) Use of a food service management company that is in violation of health codes; (E) Failure by a sponsoring organization of day care homes to properly classify day care homes as tier I or tier II in accordance with § 226.15(f); (F) Failure by a sponsoring organization to properly train or monitor sponsored facilities in accordance with § 226.16(d); (G) Failure to perform any of the other financial and administrative responsibilities required by this part; (H) Failure to properly implement and administer the day care home termination and administrative review provisions set forth at paragraph (l) of this section and § 226.16(l); or (I) Any other action affecting the institution's ability to administer the Program in accordance with Program requirements. (iii) Serious deficiency notification procedures for renewing institutions. (A) Notice of serious deficiency. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 (B) Successful corrective action. 1 ( i ( ii ( 2 ( i ( ii ( iii ( 3 (C) Application denial and proposed disqualification. ( 1 ( 2 ( 3 ( 4 ( 5 (D) Agreement termination and disqualification. ( 1 ( 2 ( 3 (3) Termination of a participating institution's agreement. General. initiate initiate (ii) List of serious deficiencies for participating institutions. (A) Submission of false information on the institution's application, including but not limited to a determination that the institution has concealed a conviction for any activity that occurred during the past seven years and that indicates a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency; (B) Permitting an individual who is on the National disqualified list to serve in a principal capacity with the institution or, if a sponsoring organization, permitting such an individual to serve as a principal in a sponsored center or as a day care home; (C) Failure to operate the Program in conformance with the performance standards set forth in paragraphs (b)(1)(xviii) and (b)(2)(vii) of this section; (D) Failure to comply with the bid procedures and contract requirements of applicable Federal procurement regulations; (E) Failure to return to the State agency any advance payments that exceeded the amount earned for serving eligible meals, or failure to return disallowed start-up or expansion payments; (F) Failure to maintain adequate records; (G) Failure to adjust meal orders to conform to variations in the number of participants; (H) Claiming reimbursement for meals not served to participants; (I) Claiming reimbursement for a significant number of meals that do not meet Program requirements; (J) Use of a food service management company that is in violation of health codes; (K) Failure of a sponsoring organization to disburse payments to its facilities in accordance with the regulations at § 226.16(g) and (h) or in accordance with its management plan; (L) Claiming reimbursement for meals served by a for-profit child care center or a for-profit outside-school-hours care center during a calendar month in which less than 25 percent of the children in care (enrolled or licensed capacity, whichever is less) were eligible for free or reduced-price meals or were title XX beneficiaries; (M) Claiming reimbursement for meals served by a for-profit adult day care center during a calendar month in which less than 25 percent of its enrolled adult participants were title XIX or title XX beneficiaries; (N) Failure by a sponsoring organization of day care homes to properly classify day care homes as tier I or tier II in accordance with § 226.15(f); (O) Failure by a sponsoring organization to properly train or monitor sponsored facilities in accordance with § 226.16(d); (P) Use of day care home funds by a sponsoring organization to pay for the sponsoring organization's administrative expenses; (Q) Failure to perform any of the other financial and administrative responsibilities required by this part; (R) Failure to properly implement and administer the day care home termination and administrative review provisions set forth at paragraph (l) of this section and § 226.16(l); (S) The fact the institution or any of the institution's principals have been declared ineligible for any other publicly funded program by reason of violating that program's requirements. However, this prohibition does not apply if the institution or the principal has been fully reinstated in, or is now eligible to participate in, that program, including the payment of any debts owed; (T) Conviction of the institution or any of its principals for any activity that occurred during the past seven years and that indicates a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency; or (U) Any other action affecting the institution's ability to administer the Program in accordance with Program requirements. (iii) Serious deficiency notification procedures for participating institutions. (A) Notice of serious deficiency. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 (B) Successful corrective action. 1 ( i ( ii ( 2 ( i ( ii ( iii ( 3 (C) Proposed termination and proposed disqualification. ( 1 ( 2 ( 3 ( 4 ( 5 (D) Program payments and extended agreement. ( 1 ( 2 ( 3 1 2 (E) Agreement termination and disqualification. ( 1 ( 2 ( 3 (4) Corrective action timeframes General. (ii) Unlawful practices. (iii) Long-term changes. (5) Suspension of an institution's participation. (i) Public health or safety General. (B) Notice of suspension, serious deficiency, proposed termination, and proposed disqualification. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 (C) Agreement termination and disqualification. ( 1 ( 2 ( 3 (D) Program payments. (ii) False or fraudulent claims General. may initiate at the same time (B) Proposed suspension of participation. ( 1 ( 2 ( 3 ( 4 ( 5 (C) Suspension review. ( 1 ( 2 ( 3 (D) Suspension review decision. ( 1 ( 2 ( 3 ( 4 (E) Program payments. (F) Maximum time for suspension. (6) FNS determination of serious deficiency General. (ii) Serious deficiency notification procedures. (A) Notice of serious deficiency. ( 1 ( 2 ( 3 ( 4 ( 5 (B) Suspension of participation. (C) Successful corrective action. 1 ( 2 ( 3 (D) Proposed disqualification. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 (E) Disqualification. (F) Program payments. (G) Required State agency action. 1 Disqualified institutions. ( 2 Disqualified principals. (7) National disqualified list Maintenance and availability of list. (ii) Effect on institutions. 1 (iii) Effect on sponsored centers. (iv) Effect on individuals. (A) Principal for an institution or a sponsored facility. 2 (B) Principal for a sponsored facility. (C) Serving as a day care home. (v) Removal of institutions, principals, and individuals from the list. (vi) Removal of day care homes from the list. (8) State agency list Maintenance of the State agency list. (A) Institutions determined to be seriously deficient by the State agency, including the names and mailing addresses of the institutions and the status of the institutions as they move through the possible subsequent stages of corrective action, proposed termination, suspension, agreement termination, and/or disqualification, as applicable; (B) Responsible principals and individuals who have been disqualified from participation by the State agency, including their names, mailing addresses, and dates of birth; and (C) Day care home providers whose agreements have been terminated for cause by a sponsoring organization in the State, including their names, mailing addresses, and dates of birth. (ii) Referral of disqualified day care homes to FNS. (iii) Prior lists of disqualified day care homes. (d) Licensing/approval for institutions or facilities providing child care. (1) General. (i) Are licensed or approved by Federal, State, or local authorities, provided that institutions that are approved for Federal programs on the basis of State or local licensing are not eligible for the Program if their licenses lapse or are terminated; or (ii) Are complying with applicable procedures to renew licensing or approval in situations where the State agency has no information that licensing or approval will be denied; or (iii) Demonstrate compliance with applicable State or local child care standards to the State agency, if licensing is not available; or (iv) Demonstrate compliance with CACFP child care standards to the State agency, if licensing or approval is not available; or (v) If Federal, State or local licensing or approval is not otherwise required, at-risk afterschool care centers and outside-school-hours care centers must meet State or local health and safety standards. When State or local health and safety standards have not been established, State agencies are encouraged to work with appropriate State and local officials to create such standards. Meeting these standards will remain a precondition for any afterschool center's eligibility for CACFP nutrition benefits. (2) Health and safety requirements for emergency shelters. (3) CACFP child care standards. (i) Staff/child ratios. (B) Child care centers do not fall below the following staff/child ratios: ( 1 ( 2 ( 3 ( 4 ( 5 (ii) Nondiscrimination. (iii) Safety and sanitation. (B) A current fire/building safety permit or satisfactory report of an inspection conducted by local authorities within the past 12 months shall be submitted. (C) Fire drills are held in accordance with local fire/building safety requirements. (iv) Suitability of facilities. (B) Floors and walls are cleaned and maintained in a condition safe for children. (C) Space and equipment, including rest arrangements for preschool age children, are adequate for the number of age ranges of participating children. (v) Social services. (vi) Health services. (B) A procedure is established to ensure prompt notification of the parent or guardian in the event of a child's illness or injury, and to ensure prompt medical treatment in case of emergency. (C) Health records, including records of medical examinations and immunizations, are maintained for each enrolled child. (Not applicable to day care homes.) (D) At least one full-time staff member is currently qualified in first aid, including artificial respiration techniques. (Not applicable to day care homes.) (E) First aid supplies are available. (F) Staff members undergo initial and periodic health assessments. (vii) Staff training. (viii) Parental involvement. (ix) Self-evaluation. (4) Alternate approval procedures. (e) Licensing/approval for adult day care centers. (1) Are licensed or approved by Federal, State or local authorities, provided that institutions which are approved for Federal programs on the basis of State or local licensing shall not be eligible for the Program if their licenses lapse or are terminated; or (2) Are complying with applicable procedures to renew licensing or approval in situations where the State agency has no information that licensing or approval will be denied. (f) Miscellaneous responsibilities. (1) Annual responsibilities. (i) Inform institutions that are pricing programs of their responsibility to ensure that free and reduced-price meals are served to participants unable to pay the full price; (ii) Provide to all institutions a copy of the income standards to be used by institutions for determining the eligibility of participants for free and reduced-price meals under the Program; (iii) Require centers to submit current eligibility information on enrolled participants, in order to calculate a blended rate or claiming percentage in accordance with § 226.9(b); (iv) Require each sponsoring organization to submit an administrative budget with sufficiently detailed information concerning projected CACFP administrative earnings and expenses, as well as other non-Program funds to be used in Program administration, for the State agency to determine the allowability, necessity, and reasonableness of all proposed expenditures, and to assess the sponsoring organization's capability to manage Program funds. The administrative budget must demonstrate that the sponsoring organization will expend and account for funds in accordance with regulatory requirements, FNS Instruction 796-2 ( Financial Management—Child and Adult Care Food Program (v) Require each institution to issue a media release, unless the State agency has issued a Statewide media release on behalf of all its institutions; (vi) Require each independent center to provide information concerning its licensing/approval status, and require each sponsoring organization to provide information concerning the licensing/approval status of its facilities, unless the State agency has other means of confirming the licensing/approval status of any independent center or facility providing care; (vii) Require each sponsoring organization to submit verification that all facilities under its sponsorship have adhered to the training requirements set forth in Program regulations; and (viii) Comply with the following requirements for tiering of day care homes: (A) Coordinate with the State agency that administers the National School Lunch Program (the NSLP State agency) to ensure the receipt of a list of schools in the State in which at least one-half of the children enrolled are certified eligible to receive free or reduced-price meals. The State agency must provide the list of schools to sponsoring organizations of day care homes by February 15 each year unless the NSLP State agency has elected to base data for the list on a month other than October. In that case, the State agency must provide the list to sponsoring organizations of day care homes within 15 calendar days of its receipt from the NSLP State agency. (B) For tiering determinations of day care homes that are based on school or census data, the State agency must ensure that sponsoring organizations of day care homes use the most recent available data, as described in § 226.15(f). (C) For tiering determinations of day care homes that are based on the provider's household income, the State agency must ensure that sponsoring organizations annually determine the eligibility of each day care home, as described in § 226.15(f). (D) The State agency must provide all sponsoring organizations of day care homes in the State with a listing of State-funded programs, participation in which by a parent or child will qualify a meal served to a child in a tier II home for the tier I rate of reimbursement. (E) The State agency must require each sponsoring organization of family day care homes to submit to the State agency a list of family day care home providers receiving tier I benefits on the basis of their participation in the SNAP. Within 30 days of receiving this list, the State agency will provide this list to the State agency responsible for the administration of the SNAP. (ix) Comply with the following requirements for determining the eligibility of at-risk afterschool care centers: (A) Coordinate with the NSLP State agency to ensure the receipt of a list of schools in the State in which at least one-half of the children enrolled are certified eligible to receive free or reduced-price meals. The State agency must provide the list of schools to independent at-risk afterschool care centers and sponsoring organizations of at-risk afterschool care centers upon request. The list must represent data from the preceding October, unless the NSLP State agency has elected to base data for the list on a month other than October. If the NSLP State agency chooses a month other than October, it must do so for the entire State. (B) The State agency must determine the area eligibility for each independent at-risk afterschool care center. The State agency must use the most recent data available, as described in § 226.6(f)(1)(ix)(A). The State agency must use attendance area information that it has obtained, or verified with the appropriate school officials to be current, within the last school year. (C) The State agency must determine the area eligibility of each sponsored at-risk afterschool care center based on the documentation submitted by the sponsoring organization in accordance with § 226.15(g). (D) The State agency must determine whether the afterschool care programs of at-risk afterschool care centers meet the requirements of § 226.17a(b) before the centers begin participating in the Program. (2) Responsibilities at other time intervals Day care home tiering redeterminations based on school data. (ii) Area eligibility redeterminations for at-risk afterschool care centers. (iii) State agency transmittal of census data. (iv) Additional institution requirements. (A) Require independent centers to submit a budget with sufficiently detailed information and documentation to enable the State agency to make an assessment of the independent center's qualifications to manage Program funds. Such budget must demonstrate that the independent center will expend and account for funds in accordance with regulatory requirements, FNS Instruction 796-2 (“Financial Management in the Child and Adult Care Food Program”), and 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415 and applicable Office of Management and Budget circulars; (B) Request institutions to report their commodity preference; (C) Require a private nonprofit institution to submit evidence of tax exempt status in accordance with § 226.15(a); (D) Require for-profit institutions to submit documentation on behalf of their centers of: ( 1 ( 2 (E) Require for-profit adult care centers to submit documentation that they are currently providing nonresidential day care services for which they receive compensation under title XIX or title XX of the Social Security Act, and certification that not less than 25 percent of enrolled participants in each such center during the most recent calendar month were title XIX or title XX beneficiaries; (F) Request each institution to indicate its choice to receive all, part or none of advance payments, if the State agency chooses to make advance payments available; and (G) Perform verification in accordance with § 226.23(h) and paragraph (m)(4) of this section. State agencies verifying the information on free and reduced-price applications must ensure that verification activities are conducted without regard to the participant's race, color, national origin, sex, age, or disability. (g) Program expansion. (h) Commodity distribution. (i) Standard contract. (1) The institution shall provide the food service management company with a list of the State agency approved child care centers, day care homes, adult day care centers, and outside-school-hours care centers to be furnished meals by the food service management company, and the number of meals, by type, to be delivered to each location; (2) The food service management company shall maintain such records (supported by invoices, receipts or other evidence) as the institution will need to meet its responsibilities under this part, and shall promptly submit invoices and delivery reports to the institution no less frequently than monthly; (3) The food service management company shall have Federal, State or local health certification for the plant in which it proposes to prepare meals for use in the Program, and it shall ensure that health and sanitation requirements are met at all times. In addition, the State agency may require the food service management company to provide for meals which it prepares to be periodically inspected by the local health department or an independent agency to determine bacteria levels in the meals being prepared. These bacteria levels shall conform to the standards which are applied by the local health authority with respect to the level of bacteria which may be present in meals prepared or served by other establishments in the locality. Results of these inspections shall be submitted to the institution and to the State agency; (4) The meals served under the contract shall conform to the cycle menus upon which the bid was based, and to menu changes agreed upon by the institution and food service management company; (5) The books and records of the food service management company pertaining to the institution's food service operation shall be available for inspection and audit by representatives of the State agency, of the Department, and of the U.S. General Accounting Office at any reasonable time and place, for a period of 3 years from the date of receipt of final payment under the contract, or in cases where an audit requested by the State agency or the Department remains unresolved, until such time as the audit is resolved; (6) The food service management company shall operate in accordance with current Program regulations; (7) The food service management company shall not be paid for meals which are delivered outside of the agreed upon delivery time, are spoiled or unwholesome at the time of delivery, or do not otherwise meet the meal requirements contained in the contract; (8) Meals shall be delivered in accordance with a delivery schedule prescribed in the contract; (9) Increases and decreases in the number of meal orders may be made by the institution, as needed, within a prior notice period mutually agreed upon in the contract; (10) All meals served under the Program shall meet the requirements of § 226.20; (11) All breakfasts, lunches, and suppers delivered for service in outside-school-hours care centers shall be unitized, with or without milk, unless the State agency determines that unitization would impair the effectiveness of food service operations. For meals delivered to child care centers and day care homes, the State agency may require unitization, with or without milk, of all breakfasts, lunches, and suppers only if the State agency has evidence which indicates that this requirement is necessary to ensure compliance with § 226.20. (j) Procurement provisions. (k) Administrative reviews for institutions and responsible principals and responsible individuals General. (2) Actions subject to administrative review. (i) Application denial. (ii) Denial of sponsored facility application. (iii) Notice of proposed termination. (iv) Notice of proposed disqualification of a responsible principal or responsible individual. (v) Suspension of participation. (vi) Start-up or expansion funds denial. (vii) Advance denial. (viii) Recovery of advances. (ix) Claim denial. (x) Claim deadline exceptions and requests for upward adjustments to a claim. (xi) Overpayment demand. (xii) Other actions. (3) Actions not subject to administrative review. (i) FNS decisions on claim deadline exceptions and requests for upward adjustments to a claim. (ii) Determination of serious deficiency. (iii) State agency determination that corrective action is inadequate. (iv) Disqualification and placement on State agency list and National disqualified list. (v) Termination. (vi) State agency or FNS decision regarding removal from the National disqualified list. (vii) State agency's refusal to consider an application submitted by an institution or facility on the National disqualified list. (4) Provision of administrative review procedures to institutions and responsible principals and responsible individuals. (i) Annually to all institutions; (ii) To an institution and to each responsible principal and responsible individual when the State agency takes any action subject to an administrative review as described in paragraph (k)(2) of this section; and (iii) Any other time upon request. (5) Procedures. (i) Notice of action. (ii) Time to request administrative review. (iii) Representation. (iv) Review of record. (v) Opposition. (vi) Hearing. (vii) Administrative review official. (viii) Basis for decision. (ix) Time for issuing a decision. (x) Final decision. (6) Federal audit findings. (7) Record of result of administrative reviews. (8) Combined administrative reviews for responsible principals and responsible individuals. (9) Abbreviated administrative review. (i) The information submitted on the application was false (see paragraphs (c)(1)(ii)(A), (c)(2)(ii)(A), and (c)(3)(ii)(A) of this section); (ii) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities is on the national disqualified list (see paragraph (b)(12) of this section); (iii) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities is ineligible to participate in any other publicly funded program by reason of violation of the requirements of the program (see paragraph (b)(13) and (c)(3)(ii)(S) of this section); or (iv) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities has been convicted for any activity that indicates a lack of business integrity (see paragraphs (b)(14) and (c)(3)(ii)(T) of this section). (10) Effect of State agency action. (i) Overpayment demand. (ii) Recovery of advances. (iii) Program payments. (11) State liability for payments. (ii) FNS will notify the State agency of its liability for reimbursement at least 30 days before liability is imposed. The timeframe for written notice from FNS is an administrative requirement and may not be used to dispute the State's liability for reimbursement. (iii) The State agency may submit, for FNS review, information supporting a request for a reduction in the State's liability, a reconsideration of the State's liability, or an exception to the 60-day deadline, for exceptional circumstances. After review of this information, FNS will recover any improperly paid Federal funds. (l) Administrative reviews for day care homes General. (2) Actions subject to administrative review. (3) Actions not subject to administrative review. (4) Provision of administrative review procedures to day care homes. (i) Annually to all day care homes; (ii) To a day care home when the sponsoring organization takes any action subject to an administrative review as described in paragraph (l)(2) of this section; and (iii) Any other time upon request. (5) Procedures. (i) Uniformity. (ii) Representation. (iii) Review of record and opposition. (iv) Administrative review official. (v) Basis for decision. (vi) Time for issuing a decision. (vii) Final decision. (m) Program assistance General. (2) Review priorities. (3) Review content. (i) Recordkeeping; (ii) Meal counts; (iii) Administrative costs; (iv) Any applicable instructions and handbooks issued by FNS and the Department to clarify or explain this part, and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part; (v) Facility licensing and approval; (vi) Compliance with the requirements for annual updating of enrollment forms; (vii) Compliance with the requirements for submitting and ensuring the accuracy of the annual renewal information; (viii) If an independent center, observation of a meal service; (ix) If a sponsoring organization, training and monitoring of facilities, including the timing of reviews, as described in § 226.16(d)(4)(iii); (x) If a sponsoring organization, implementation of the household contact system established by the State agency pursuant to paragraph (m)(5) of this section; (xi) If a sponsoring organization of day care homes, the requirements for classification of tier I and tier II day care homes; and (xii) All other Program requirements. (4) Review of sponsored facilities. (5) Household contacts. (6) Frequency and number of required institution reviews. (i) At least once every 3 years, independent centers and sponsoring organizations that operate 1 to 100 facilities must be reviewed. A sponsoring organization review must include reviews of 10 percent of the sponsoring organization's facilities. (ii) At least once every 2 years, sponsoring organizations that operate more than 100 facilities, that conduct activities other than CACFP, that have been identified during a recent review as having serious management problems, or that are at risk of having serious management problems must be reviewed. These reviews must include reviews of 5 percent of the sponsoring organization's first 1,000 facilities and 2.5 percent of the sponsoring organization's facilities in excess of 1,000. (iii) At least once every 2 years, independent centers that conduct activities other than CACFP, that have been identified during a recent review as having serious management problems, or that are at risk of having serious management problems must be reviewed. (iv) New sponsoring organizations that operate five or more facilities must be reviewed within the first 90 days of Program operations. (n) Program irregularities. (o) Child care standards compliance. (p) Sponsoring organization agreement. (2) At a minimum, the standard agreement must require day care homes and centers to: (i) Allow visits by sponsoring organizations or State agencies to review meal service and records; (ii) Promptly inform the sponsoring organization about any change in its licensing or approval status; (iii) Meet any State agency approved time limit for submission of meal records; and (iv) Distribute to parents a copy of the sponsoring organization's notice to parents if directed to do so by the sponsoring organization. (3) The agreement must include the right of day care homes and centers to receive timely reimbursement. The sponsoring organization must pay program funds to day care homes and centers within 5 working days of receipt from the State agency. (4) The State agency must include in this agreement its policy to restrict transfers of day care homes among sponsoring organizations. The policy must restrict the transfers to no more frequently than once per year, except under extenuating circumstances, such as termination of the sponsoring organization's agreement or other circumstances defined by the State agency. (5) The State agency may, at the request of the sponsoring organization, approve an agreement developed by the sponsoring organization. (q) Following its reviews of institutions and facilities under §§ 226.6(m) and 226.23(h) conducted prior to July 1, 1988, the State agency shall report data on key elements of program operations on a form designated by FNS. These key elements include but are not limited to the program areas of meal requirements, determination of eligibility for free and reduced price meals, and the accuracy of reimbursement claims. These forms shall be submitted within 90 days of the completion of the data collection for the institutions except that, if the State has elected to conduct reviews of verification separate from its administrative reviews, the State shall retain data until all key elements have been reviewed and shall report all data for each institution on one form within 90 days of the completion of the data collection for all key elements for that institution. States shall ensure that all key element data for an institution is collected during a 12-month period. (r) WIC program information. (1) Participating family day care homes and sponsored child care centers receive this information, and periodic updates of this information, from their sponsoring organizations or the State agency; and (2) The parents of enrolled children also receive this information. [47 FR 36527, Aug. 20, 1982] Editorial Note: For Federal Register www.govinfo.gov. § 226.7 State agency responsibilities for financial management. (a) This section prescribes standards of financial management systems in administering Program funds by the State agency and institutions. (b) Financial management system. (1) State agencies must also have a system in place for: (i) Annually reviewing at least 1 month's bank account activity of all sponsoring organizations against documents adequate to support that the financial transactions meet Program requirements. The State agency may expand the review to examine additional months of bank account activity if discrepancies are found. If the State agency identifies and is unable to verify any expenditures that have the appearance of violating Program requirements, or if the discrepancy is significant, the State agency must refer the sponsoring organization's bank account activity to the appropriate State authorities. (ii) Annually reviewing actual expenditures reported of Program funds and the amount of meal reimbursement funds retained from centers, if any, for administrative costs for all sponsoring organizations of unaffiliated centers. State agencies must reconcile reported expenditures with Program payments to ensure that funds are fully accounted for, and use the reported actual expenditures as the basis for selecting a sample of expenditures for validation. If the State agency identifies and is unable to verify any expenditures that have the appearance of violating Program requirements, the State agency must refer the sponsoring organization's bank account activity to the appropriate State authorities. (iii) Monitoring and reviewing the institutions' documentation of their nonprofit status to ensure that all Program reimbursement funds are used solely for the conduct of the food service operation or to improve food service operations, principally for the benefit of children or adult participants. (2) The financial management system standards for institutional recordkeeping and reporting must: (i) Prohibit claiming reimbursement for meals provided by a child or an adult participant's family, except as authorized at §§ 226.18(e) and 226.20(b)(2), (g)(1)(ii), and (g)(2)(ii); and (ii) Allow the cost of meals served to adults who perform necessary food service labor under the Program, except in day care homes. (c) Management evaluations and audits. (d) Reports. (e) Annual plan. (f) Rate assignment. (g) Budget approval. (1) For sponsoring organizations of centers, the State agency is prohibited from approving the sponsoring organization's administrative budget, or any amendments to the budget, if the administrative budget shows the Program will be charged for administrative costs in excess of 15 percent of the meal reimbursements estimated to be earned during the budget year. However, the State agency may waive this limit if the sponsoring organization provides justification that it requires Program funds in excess of 15 percent to pay its administrative costs and if the State agency is convinced that the institution will have adequate funding to provide meals meeting the requirements of § 226.20. The State agency must document all waiver approvals and denials in writing and provide a copy of all such letters to the appropriate FNSRO. (2) For sponsoring organizations of day care homes seeking to carry over administrative funds, as described in § 226.12(a)(3), the State agency must require the budget to include an estimate of the requested administrative fund carryover amount and a description of the purpose for which those funds would be obligated or expended by the end of the fiscal year following the fiscal year in which they were received. In approving a carryover request, State agencies must take into consideration whether the sponsoring organization has a financial management system that meets Program requirements and is capable of controlling the custody, documentation, and disbursement of carryover funds. As soon as possible after fiscal year close-out, the State agency must require sponsoring organizations carrying over administrative funds to submit an amended budget for State agency review and approval. The amended budget must identify the amount of administrative funds actually carried over and describe the purpose for which the carry-over funds have been or will be used. (h) Start-up and expansion payments. (i) Advance payments. (j) Recovery of overpayments. (k) Claims processing. (l) Participation controls. [47 FR 36527, Aug. 20, 1982] Editorial Note: For Federal Register www.govinfo.gov. § 226.8 Audits. (a) Unless otherwise exempt, audits at the State and institution levels must be conducted in accordance with 2 CFR part 200, subpart F, Appendices X and XI, Data Collection Form and Compliance Supplement, respectively and USDA implementing regulations 2 CFR parts 400, 415 and 416. State agencies must establish audit policy for for-profit institutions. However, the audit policy established by the State agency must not conflict with the authority of the State agency or the Department to perform, or cause to be performed, audits, reviews, agreed-upon procedures engagements, or other monitoring activities. (b) The funds provided to the State agency under § 226.4(j) may be made available to institutions to fund a portion of organization-wide audits made in accordance with 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. The funds provided to an institution for an organization-wide audit must be determined in accordance with 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. (c) Funds provided under § 226.4(j) may be used by the State agency to conduct program-specific audits of institutions not subject to organization-wide audits, or for which the State agency considers program specific audits to be needed. The State agency may use any funds remaining after all required program-specific audits have been performed to conduct administrative reviews or agreed-upon procedures engagements of institutions. (d) Funds provided under § 226.4(j) may only be obligated during the fiscal year for which those funds are allocated. If funds provided under § 226.4(i) are not sufficient to meet the requirements of this section, the State agency may then use available State administrative expense funds to conduct audits, provided that the State agency is arranging for the audits and has not passed the responsibility down to the institution. (e) Full use of Federal funds. (f) In conducting management evaluations, reviews, or audits in a fiscal year, the State agency, FNS, or OIG may disregard an overpayment if the overpayment does not exceed $600. A State agency may establish, through State law, regulation or procedure, an alternate disregard threshold that does not exceed $600. This disregard may be made once per each management evaluation, review, or audit per Program within a fiscal year. However, no overpayment is to be disregarded where there is substantial evidence of violations of criminal law or civil fraud statutes. (g) While OIG shall rely to the fullest extent feasible upon State sponsored audits, OIG may, whenever it considers necessary: (1) Make audits on a statewide basis; (2) Perform on-site test audits; (3) Review audit reports and related working papers of audits performed by or for State agencies. (h) State agencies are not required to provide a hearing to an institution for State actions taken on the basis of a Federal audit determination. If a State agency does not provide a hearing in such situations, FNS will provide a hearing, upon request, in accordance with procedures set forth in § 226.6(k). [47 FR 36527, Aug. 20, 1982, as amended at 50 FR 8580, Mar. 4, 1985; 51 FR 4295, Feb. 4, 1986; 52 FR 5526, Feb. 25, 1987; 53 FR 52590, Dec. 28, 1988; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 67 FR 43490, June 27, 2002; 69 FR 53543, Sept. 1, 2004; 70 FR 43261, July 27, 2005; 71 FR 5, Jan. 3, 2006; 71 FR 30563, May 30, 2006; 72 FR 41607, July 31, 2007; 76 FR 37982, June 29, 2011; 81 FR 66493, Sept. 28, 2016] Subpart D—Payment Provisions § 226.9 Assignment of rates of reimbursement for centers. (a) The State agency shall assign rates of reimbursement, not less frequently than annually, on the basis of family-size and income information reported by each institution. However, no rates should be assigned for emergency shelters and at-risk afterschool care centers. Assigned rates of reimbursement may be changed more frequently than annually if warranted by changes in family-size and income information. Assigned rates of reimbursement shall be adjusted annually to reflect changes in the national average payment rates. (b) Except for emergency shelters and at-risk afterschool care centers, the State agency must either: (1) Require that institutions submit each month's figures for meals served daily to participants from families meeting the eligibility standards for free meals, to participants from families meeting the eligibility standards for reduced-price meals, and to participants from families not meeting such guidelines; or (2) Establish claiming percentages, not less frequently than annually, for each institution on the basis of the number of enrolled participants eligible for free, reduced-price, and paid meals, except that children who only participate in emergency shelters or the at-risk afterschool care component of the Program must not be considered to be enrolled participants for the purpose of establishing claiming percentages; or (3) Determine a blended per-meal rate of reimbursement, not less frequently than annually, by adding the products obtained by multiplying the applicable national average payment rate of reimbursement for each category (free, reduced-price, paid) by the claiming percentage for that category. (c) States have two methods of reimbursing institutions. The method chosen by the State agency must be applied to all institutions participating in the Program in that State. These methods are: (1) Meals times rates payment, which involves reimbursing an institution for meals served at the assigned rate for each meal. This method entails no comparison to the costs incurred by the institution for the meal service; and, (2) Meals times rates or actual costs, whichever is the lesser, which involves reimbursing an institution for meals served at the assigned rate for each meal or at the level of the costs actually incurred by the institution for the meal service. This method does entail a comparison of the costs incurred to the meal rates, with the costs being a limiting factor on the level of reimbursement an institution may receive. (d) In those States where the State agency has chosen the option to implement a meals times rates payment system State-wide, the State agency may elect to pay an institution's final claim for reimbursement for the fiscal year at higher reassigned rates of reimbursement for lunches and suppers; however, the reassigned rates may not exceed the applicable maximum rates of reimbursement established under § 210.11(b) of the National School Lunch Program regulations. In those States which use the method of comparing meals times rates or actual costs, whichever is lesser, the total payments made to an institution shall not exceed the total net costs incurred for the fiscal year. [47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 53 FR 52590, Dec. 28, 1988; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 71 FR 5, Jan. 3, 2006; 72 FR 41607, July 31, 2007; 75 FR 16327, Apr. 1, 2010] § 226.10 Program payment procedures. (a) If a State agency elects to issue advance payments to all or some of the participating institutions in the State, it must provide such advances no later than the first day of each month to those eligible institutions electing to receive advances in accordance with § 226.6 (f)(3)(iv)(F). Advance payments shall equal the full level of claims estimated by the State agency to be submitted in accordance with paragraph (c) of this section, considering prior reimbursement claims and other information such as fluctuations in enrollment. The institution may decline to receive all or any part of the advance. (b) For each fiscal year, the amount of payment made, including funds advanced to an institution, shall not exceed the amount of valid reimbursement claimed by that institution. To ensure that institutions do not receive excessive advance payments, the State agency shall observe the following procedures: (1) After three advance payments have been made to an institution, the State agency shall ensure that no subsequent advance is made until the State agency has validated the institution's claim for reimbursement for the third month prior to the month for which the next advance is to be paid. (2) If the State agency has audit or monitoring evidence of extensive program deficiencies or other reasons to believe that an institution will not be able to submit a valid claim for reimbursement, advance payments shall be withheld until the claim is received or the deficiencies are corrected. (3) Each month the State agency shall compare incoming claims against advances to ensure that the level of funds authorized under paragraph (a) of this section does not exceed the claims for reimbursement received from the institution. Whenever this process indicates that excessive advances have been authorized, the State agency shall either demand full repayment or adjust subsequent payments, including advances. (4) If, as a result of year end reconciliation as required by 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, the State agency determines that reimbursement earned by an institution during a fiscal year is less than the amount paid, including funds advanced to that institution, the State agency shall demand repayment of the outstanding balance or adjust subsequent payments. (c) Claims for Reimbursement must report information in accordance with the financial management system established by the State agency, and in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the final Report of the Child and Adult Care Food Program (FNS 44) required under § 226.7(d). In submitting a Claim for Reimbursement, each institution must certify that the claim is correct and that records are available to support that claim. (1) Prior to submitting its consolidated monthly claim to the State agency, each sponsoring organization must perform edit checks on each facility's meal claim. At a minimum, the sponsoring organization's edit checks must: (i) Verify that each facility has been approved to serve the types of meals claimed; and (ii) Compare the number of children or eligible adult participants enrolled for care at each facility, multiplied by the number of days on which the facility is approved to serve meals, to the total number of meals claimed by the facility for that month. Discrepancies between the facility's meal claim and its enrollment must be subjected to more thorough review to determine if the claim is accurate. (2) Sponsoring organizations of unaffiliated centers must make available to the State agency an annual report detailing actual expenditures of Program funds and the amount of meal reimbursement funds retained from centers, if any, for administrative costs for the year to which the claims apply. The report must use the same cost categories as the approved annual budget submitted by the sponsoring organization. (3) Sponsoring organizations of for-profit child care centers or for-profit outside-school-hours care centers must submit the number and percentage of children in care—enrolled or licensed capacity, whichever is less—that documents that at least 25 percent are eligible for free or reduced-price meals or are title XX beneficiaries. Sponsoring organizations must not submit a claim for any for-profit center in which less than 25 percent of the children in care—enrolled or licensed capacity, whichever is less—during the claim month were eligible for free or reduced-price meals or were title XX beneficiaries. (4) For each month they claim reimbursement, independent for-profit child care centers and independent for-profit outside-school-hours care centers must submit the number and percentage of children in care—enrolled or licensed capacity, whichever is less—that documents at least 25 percent are eligible for free or reduced-price meals or are title XX beneficiaries. However, children who only receive at-risk afterschool meals or snacks must not be considered in determining this eligibility. (5) For each month they claim reimbursement, independent for-profit adult day care centers must submit the percentages of enrolled adult participants receiving title XIX or title XX benefits for months in which not less than 25 percent of enrolled adult participants were title XIX or title XX beneficiaries. For the claim, sponsoring organizations of adult day care centers must submit the percentage of enrolled adult participants receiving title XIX or title XX benefits for each center. Sponsoring organizations must not submit claims for adult day care centers for months in which less than 25 percent of enrolled adult participants were title XIX or title XX beneficiaries. (d) All records to support the claim shall be retained for a period of three years after the date of submission of the final claim for the fiscal year to which they pertain, except that if audit findings have not been resolved, the records shall be retained beyond the end of the three year period as long as may be required for the resolution of the issues raised by the audit. All accounts and records pertaining to the Program shall be made available, upon request, to representatives of the State agency, of the Department, and of the U.S. Government Accountability Office for audit or review, at a reasonable time and place. (e) Unless otherwise approved by FNS, the Claim for Reimbursement for any month shall cover only Program operations for that month except if the first or last month of Program operations in any fiscal year contains 10 operating days or less, such month may be added to the Claim for Reimbursement for the appropriate adjacent month; however, Claims for Reimbursement may not combine operations occurring in two fiscal years. A final Claim for Reimbursement shall be postmarked and/or submitted to the State agency not later than 60 days following the last day of the full month covered by the claim. State agencies may establish shorter deadlines at their discretion. Claims not postmarked and/or submitted within 60 days shall not be paid with Program funds unless FNS determines that an exception should be granted. The State agency shall promptly take corrective action with respect to any Claim for Reimbursement as determined necessary through its claim review process or otherwise. In taking such corrective action, State agencies may make upward adjustments in Program funds claimed on claims filed within the 60 day deadline if such adjustments are completed within 90 days of the last day of the claim month and are reflected in the final Report of the Child and Adult Care Food Programs (FNS-44) for the claim month which is required under 226.7(d). Upward adjustments in Program funds claimed which are not reflected in the final FNS-44 for the claim month shall not be made unless authorized by FNS. Downward adjustments in Program funds claimed shall always be made without FNS authorization regardless of when it is determined that such adjustments are necessary. (f) If, based on the results of audits, investigations, or other reviews, a State agency has reason to believe that an institution, child or adult care facility, or food service management company has engaged in unlawful acts with respect to Program operations, the evidence found in audits, investigations, or other reviews is a basis for non-payment of claims for reimbursement. [47 FR 36527, Aug. 20, 1982, as amended by Amdt. 5, 49 FR 18988, May 4, 1984; 50 FR 26975, July 1, 1985; 53 FR 52590, Dec. 28, 1988; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 62 FR 23618, May 1, 1997; 69 FR 53543, Sept. 1, 2004; 70 FR 43261, July 27, 2005; 71 FR 39519, July 13, 2006; 72 FR 41607, July 31, 2007; 75 FR 16327, Apr. 1, 2010; 76 FR 22798, Apr. 25, 2011; 76 FR 34571, June 13, 2011; 81 FR 66492, Sept. 28, 2016; 88 FR 57855, Aug. 23, 2023] § 226.11 Program payments for centers. (a) Requirement for agreements. (b) Institutions Edit checks of sponsored centers. (2) Child and adult care institutions. (3) For-profit center exception. (c) Reimbursement Child and adult care institutions. (2) At-risk afterschool care institutions. (3) Emergency shelters. (4) For-profit center exception. (5) Computation of reimbursement. (i) Actual counts. (ii) Claiming percentages. (iii) Blended rates. (d) Limits on reimbursement. (e) Institution recordkeeping. [47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 52 FR 36907, Oct. 2, 1987; 53 FR 52590, Dec. 28, 1988; 62 FR 23618, May 1, 1997; 69 FR 53543, Sept. 1, 2004; 70 FR 43262, July 27, 2005; 71 FR 5, Jan. 3, 2006; 72 FR 41607, July 31, 2007; 75 FR 16327, Apr. 1, 2010; 76 FR 34571, June 13, 2011] § 226.12 Administrative payments to sponsoring organizations for day care homes. (a) General. (1) Sponsoring organizations will receive reimbursement for the administrative costs of the sponsoring organization in an amount that is not less than the product obtained each month by multiplying: (i) The number of day care homes of the sponsoring organization submitting a claim for reimbursement during the month, by (ii) The appropriate administrative rates announced annually in the Federal Register (2) FNS determines administrative reimbursement by annually adjusting the following base administrative rates, as set forth in § 226.4(i): (i) Initial 50 day care homes, 42 dollars; (ii) Next 150 day care homes, 32 dollars; (iii) Next 800 day care homes, 25 dollars; (iv) Additional day care homes, 22 dollars. (3) With State agency approval, a sponsoring organization may carry over a maximum of 10 percent of administrative funds received under paragraph (a)(1) of this section for use in the following fiscal year. If any carryover funds are not obligated or expended in the following fiscal year, they must be returned to the State agency, as described in § 226.7(j). (4) State agencies must recover any administrative funds not properly payable, as described in FNS Instruction 796-2. (b) Start-up and expansion payments. (2) Sponsoring organizations which apply for start-up or expansion payments shall evidence: (i) Public status or tax exempt status under the Internal Revenue Code of 1986; (ii) An organizational history of managing funds and ongoing activities (i.e., administering public or private programs); (iii) An acceptable and realistic plan for recruiting day care homes to participate in the Program (such as the method of contacting providers), which may be based on estimates of the number of day care homes to be recruited and information supporting their existence, and in the case of sponsoring organizations applying for expansion payments, documentation that the day care homes to be recruited are located in low-income or rural areas; and (iv) An acceptable preliminary sponsoring organization management plan including, but not limited to, plans for preoperational visits and training. (3) The State agency shall deny start-up and expansion payments to applicant sponsoring organizations which fail to meet the criteria of paragraph (b)(2) of this section or which have not been financially responsible in the operation of other programs funded by Federal, State, or local governments. The State agency shall notify the sponsoring organization of the reasons for denial and allow the sponsoring organization full opportunity to submit evidence on appeal as provided for in § 226.6(k). Any sponsoring organization applying for start-up or expansion funds shall be notified of approval or disapproval by the State agency in writing within 30 calendar days of filing a complete and correct application. If a sponsoring organization submits an incomplete application, the State agency shall notify the sponsoring organization within 15 calendar days of receipt of the application and shall provide technical assistance, if necessary, to the sponsoring organization for the purpose of completing its application. (4) Sponsoring organizations which apply for and meet the criteria for start-up or expansion payments shall enter into an agreement with the State agency. The agreement shall specify: (i) Activities which the sponsoring organization will undertake to initiate or expand Program operations in day care homes; (ii) The amount of start-up or expansion payments to be issued to the sponsoring organization, together with an administrative budget detailing the costs which the sponsoring organization shall incur, document, and claim; (iii) The time allotted to the sponsoring organization for the initiation or expansion of Program operations in family day care homes; (iv) The responsibility of the applicant sponsoring organization to repay, upon demand by the State agency, start-up or expansion payments not expended in accordance with the agreement. (5) Upon execution of the agreement, the State agency shall issue a start-up or expansion payment to the sponsoring organization in an amount equal to not less than one, but not more than two month's anticipated administrative reimbursement to the sponsoring organization as determined by the State agency. However, no sponsoring organization may receive start-up or expansion payments for more than 50 day care homes. Eligible sponsoring organizations with fewer than 50 homes under their jurisdiction at the time of application for start-up payments may receive such payments for up to 50 homes, less the number of homes under their jurisdiction. Eligible sponsoring organizations applying for expansion funds may receive at a maximum such payments for up to 50 homes at the currently assigned administrative payment for the first 50 homes. In determining the amount of start-up or expansion payments to be made to a sponsoring organization, the State agency shall consider the anticipated level of start-up or expansion costs to be incurred by the sponsoring organization and alternate sources of funds available to the sponsoring organization. (6) Upon expiration of the time allotted to the sponsoring organization for initiating or expanding Program operations in day care homes, the State agency shall obtain and review documentation of activities performed and costs incurred by the sponsoring organization under the terms of the start-up or expansion agreement. If the sponsoring organization has not made every reasonable effort to carry out the activities specified in the agreement, the State agency shall demand repayment of all or part of the payment. The sponsoring organization may retain start-up or expansion payments for all day care homes which initiate Program operations. However, no sponsoring organization may retain any start-up or expansion payments in excess of its actual costs for the expenditures specified in the agreement. [47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at 53 FR 52590, Dec. 28, 1988; 63 FR 9728, Feb. 26, 1998; 67 FR 43490, June 27, 2002; 88 FR 57856, Aug. 23, 2023] § 226.13 Food service payments to sponsoring organizations for day care homes. (a) Payments will be made only to sponsoring organizations operating under an agreement with the State agency for the meal types specified in the agreement served to enrolled nonresident children and eligible enrolled children of day care home providers, at approved day care homes. Each State agency must base reimbursement to each approved day care home on daily meal counts recorded by the provider. (b) Each sponsoring organization shall report each month to the State agency the total number of meals, by type (breakfasts, lunches, suppers, and snacks) and by category (tier I and tier II), served to children enrolled in approved day care homes. Prior to submitting its consolidated monthly claim to the State agency, each sponsoring organization must conduct reasonable edit checks on the day care homes' meal claims which, at a minimum, include those edit checks specified at § 226.10(c). (c) Each sponsoring organization shall receive payment for meals served to children enrolled in approved day care homes at the tier I and tier II reimbursement rates, as applicable based on daily meal counts taken in the home, and as established by law and adjusted in accordance with § 226.4. However, the rates for lunches and suppers shall be reduced by the value of commodities established under § 226.5(b) for all sponsoring organizations for day care homes which have elected to receive commodities. For tier I day care homes, the full amount of food service payments shall be disbursed to each day care home on the basis of the number of meals served, by type, to enrolled children. For tier II day care homes, the full amount of food service payments shall be disbursed to each day care home on the basis of the number of meals served to enrolled children by type, and by category (tier I and tier II) as determined in accordance with paragraphs (d)(2) and (d)(3) of this section. However, the sponsoring organization may withhold from Program payments to each home an amount equal to costs incurred for the provision of Program foodstuffs or meals by the sponsoring organization on behalf of the home and with the home provider's written consent. (d) As applicable, each sponsoring organization for day care homes shall: (1) Require that tier I day care homes submit the number of meals served, by type, to enrolled children. (2) Require that tier II day care homes in which the provider elects not to have the sponsoring organization identify enrolled children who are eligible for free or reduced price meals submit the number of meals served, by type, to enrolled children. (3) Not more frequently than annually, select one of the methods described in paragraphs (d)(3) (i)-(iii) of this section for all tier II day care homes in which the provider elects to have the sponsoring organization identify enrolled children who are eligible for free or reduced price meals. In such homes, the sponsoring organization shall either: (i) Require that such day care homes submit the number and types of meals served each day to each enrolled child by name. The sponsoring organization shall use the information submitted by the homes to produce an actual count, by type and by category (tier I and tier II), of meals served in the homes; or (ii) Establish claiming percentages, not less frequently than semiannually, for each such day care home on the basis of one month's data concerning the number of enrolled children determined eligible for free or reduced-price meals. Sponsoring organizations shall obtain one month's data by collecting either enrollment lists (which show the name of each enrolled child in the day care home), or attendance lists (which show, by days or meals, the rate of participation of each enrolled child in the day care home). The State agency may require a sponsoring organization to recalculate the claiming percentage for any of its day care homes before the required semiannual calculation if the State agency has reason to believe that a home's percentage of income-eligible children has changed significantly or was incorrectly established in the previous calculation. Under this system, day care homes shall be required to submit the number of meals served, by type, to enrolled children; or (iii) Determine a blended per-meal rate of reimbursement, not less frequently than semiannually, for each such day care home by adding the products obtained by multiplying the applicable rates of reimbursement for each category (tier I and tier II) by the claiming percentage for that category, as established in accordance with paragraph (d)(3)(ii) of this section. The State agency may require a sponsoring organization to recalculate the blended rate for any of its day care homes before the required semiannual calculation if the State agency has reason to believe that a home's percentage of income-eligible children has changed significantly or was incorrectly established in the previous calculation. Under this system, day care homes shall be required to submit the number of meals served, by type, to enrolled children. [47 FR 36527, Aug. 20, 1982, as amended at 62 FR 903, Jan. 7, 1997; 62 FR 5519, Feb. 6, 1997; 63 FR 9105, Feb. 24, 1998; 69 FR 53544, Sept. 1, 2004; 72 FR 41603, July 31, 2007; 88 FR 57856, Aug. 23, 2023] § 226.14 Claims against institutions. (a) State agencies shall disallow any portion of a claim for reimbursement and recover any payment to an institution not properly payable under this part. State agencies may consider claims for reimbursement not properly payable if an institution does not comply with the recordkeeping requirements contained in this part. The State agency may permit institutions to pay overclaims over a period of one or more years. However, the State agency must assess interest beginning with the date stipulated in the State agency's demand letter, or 30 days after the date of the demand letter, whichever date is later. Further, when an institution requests and is granted an administrative review of the State agency's overpayment demand, the State agency is prohibited from taking action to collect or offset the overpayment until the administrative review is concluded. The State agency must maintain searchable records of funds recovery activities. If the State agency determines that a sponsoring organization of centers has spent more than 15 percent of its meal reimbursements for a budget year for administrative costs (or more than any higher limit established pursuant to a waiver granted under § 226.7(g)), the State agency must take appropriate fiscal action. In addition, except with approval from the appropriate FNSRO, State agencies shall consider claims for reimbursement not payable when an institution fails to comply with the recordkeeping requirements that pertain to records directly supporting claims for reimbursement. Records that directly support claims for reimbursement include, but are not limited to, daily meal counts, menu records, and enrollment and attendance records, as required by § 226.15(e). State agencies shall assert overclaims against any sponsoring organization of day care homes which misclassifies a day care home as a tier I day care home unless the misclassification is determined to be inadvertent under guidance issued by FNS. However, the State agency shall notify the institution of the reasons for any disallowance or demand for repayment, and allow the institution full opportunity to submit evidence on appeal as provided for in § 226.6(k). Miminum State agency collection procedures for unearned payments shall include: (1) Written demand to the institution for the return of improper payments; (2) if, after 30 calendar days, the institution fails to remit full payment or agree to a satisfactory repayment schedule, a second written demand for the return of improper payments sent by certified mail return receipt requested; and (3) if, after 60 calendar days, the institution fails to remit full payment or agree to a satisfactory repayment schedule, the State agency shall refer the claim against the institution to appropriate State or Federal authorities for pursuit of legal remedies. (b) In the event that the State agency finds that an institution which prepares its own meals is failing to meet the meal requirements of § 226.20, the State agency need not disallow payment or collect an overpayment arising out of such failure if the institution takes such other action as, in the opinion of the State agency, will have a corrective effect. However, the State agency shall not disregard any overpayments or waive collection action arising from the findings of Federal audits. (c) If FNS does not concur with the State agency's action in paying an institution or in failing to collect an overpayment, FNS shall notify the State agency of its intention to assert a claim against the State agency. In all such cases, the State agency shall have full opportunity to submit evidence concerning the action taken. The State agency shall be liable to FNS for failure to collect an overpayment, unless FNS determines that the State agency has conformed with this part in issuing the payment and has exerted reasonable efforts to recover the improper payment. [47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at 50 FR 8580, Mar. 4, 1985; 53 FR 52590, Dec. 28, 1988; 62 FR 903, Jan. 7, 1997; 64 FR 72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002; 69 FR 53544, Sept. 1, 2004; 76 FR 34571, June 13, 2011] Subpart E—Operational Provisions § 226.15 Institution provisions. (a) Tax exempt status. (b) New applications and renewals. (c) Responsibility. (d) Staffing. (e) Recordkeeping. (1) Copies of all applications and supporting documents submitted to the State agency; (2) Documentation of the enrollment of each participant at centers (except for outside-school-hours care centers, emergency shelters, and at-risk afterschool care centers). All types of centers, except for emergency shelters and at-risk afterschool care centers, must maintain information used to determine eligibility for free or reduced-price meals in accordance with § 226.23(e)(1). For child care centers, such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. (3) Documentation of: The enrollment of each child at day care homes; information used to determine the eligibility of enrolled providers' children for free or reduced price meals; information used to classify day care homes as tier I day care homes, including official source documentation obtained from school officials when the classification is based on school data; and information used to determine the eligibility of enrolled children in tier II day care homes that have been identified as eligible for free or reduced price meals in accordance with § 226.23(e)(1). Such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. (4) Daily records indicating the number of participants in attendance and the daily meal counts, by type (breakfast, lunch, supper, and snacks), served to family day care home participants, or the time of service meal counts, by type (breakfast, lunch, supper, and snacks), served to center participants. State agencies may require family day care homes to record meal counts at the time of meal service only in day care homes providing care for more than 12 children in a single day, or in day care homes that have been found seriously deficient due to problems with their meal counts and claims. (5) Except at day care homes, daily records indicating the number of meals, by type, served to adults performing labor necessary to the food service; (6) Copies of invoices, receipts, or other records required by the State agency financial management instruction to document: (i) Administrative costs claimed by the institution; (ii) Operating costs claimed by the institution except sponsoring organizations of day care homes; and (iii) Income to the Program. (7) Copies of all claims for reimbursement submitted to the State agency; (8) Receipts for all Program payments received from the State agency; (9) If applicable, information concerning the dates and amounts of disbursement to each child care facility or adult day care facility under its auspices; (10) Copies of menus, and any other food service records required by the State agency; (11) If applicable, information concerning the location and dates of each child care or adult day care facility review, any problems noted, and the corrective action prescribed and effected; (12) Information on training session date(s) and location(s), as well as topics presented and names of participants; and (13) Documentation of nonprofit food service to ensure that all Program reimbursement funds are used: (i) Solely for the conduct of the food service operation; or (ii) to improve such food service operations, principally for the benefit of the enrolled participants. (14) For sponsoring organizations, records documenting the attendance at annual training of each staff member with monitoring responsibilities. Training must include instruction, appropriate to the level of staff experience and duties, on the Program's meal patterns, meal counts, claims submission and claim review procedures, recordkeeping requirements, and an explanation of the Program's reimbursement system. (f) Day care home classifications. (g) Area eligibility determinations for at-risk afterschool care centers. (h) Payment to employees. (i) Claims submission. (j) Program agreement. (k) Commodities. (l) Special Milk Program. (m) Elderly feeding programs. et seq. (n) Regulations and guidance. (o) Information on WIC. [47 FR 36527, Aug. 20, 1982] Editorial Note: For Federal Register www.govinfo.gov. § 226.16 Sponsoring organization provisions. (a) Each sponsoring organization shall comply with all provisions of § 226.15. (b) Each sponsoring organization must submit to the State agency with its application all information required for its approval, and the approval of the facilities under its jurisdiction, as set forth in §§ 226.6(b) and 226.6(f). The application must demonstrate that the institution has the administrative and financial capability to operate the Program in accordance with the Program regulations. In addition to the information required in §§ 226.6(b) and 226.6(f), the application must include: (1) A sponsoring organization management plan and administrative budget, in accordance with §§ 226.6(b)(1)(iv), 226.6(b)(1)(v), 226.6(b)(2)(i), 226.6(f)(2)(i), and 226.7(g), which includes information sufficient to document the sponsoring organization's compliance with the performance standards set forth at § 226.6(b)(1)(xviii) and 226.6(b)(2)(vii). As part of its management plan, a sponsoring organization of day care homes must document that, to perform monitoring, it will employ the equivalent of one full-time staff person for each 50 to 150 day care homes it sponsors. As part of its management plan, a sponsoring organization of centers must document that, to perform monitoring, it will employ the equivalent of one full-time staff person for each 25 to 150 centers it sponsors. It is the State agency's responsibility to determine the appropriate level of staffing for monitoring for each sponsoring organization, consistent with these specified ranges and factors that the State agency will use to determine the appropriate level of monitoring staff for each sponsor. The monitoring staff equivalent may include the employee's time spent on scheduling, travel time, review time, follow-up activity, report writing, and activities related to the annual updating of children's enrollment forms. Sponsoring organizations that were participating in the Program on July 29, 2002, were to have submitted, no later than July 29, 2003, a management plan or plan amendment that meets the monitoring staffing requirement. For sponsoring organizations of centers, the portion of the administrative costs to be charged to the Program may not exceed 15 percent of the meal reimbursements estimated or actually earned during the budget year, unless the State agency grants a waiver in accordance with § 226.7(g). A sponsoring organization of centers must include in the administrative budget all administrative costs, whether incurred by the sponsoring organization or its sponsored centers. If at any point a sponsoring organization determines that the meal reimbursements estimated to be earned during the budget year will be lower than that estimated in its administrative budget, the sponsoring organization must amend its administrative budget to stay within the 15 percent limitation (or any higher limit established pursuant to a waiver granted under § 226.7(g)) or seek a waiver. Failure to do so will result in appropriate fiscal action in accordance with § 226.14(a). (2) An application for participation, or renewal materials, for each facility accompanied by all necessary supporting documentation; (3) Timely information concerning the eligibility status of facilities (such as licensing/approval actions); (4) For sponsoring organizations applying for initial participation, if required by State law, regulation, or policy, a bond in the form prescribed by such law, regulation, or policy; (5) A copy of the sponsoring organization's notice to parents, in a form and, to the maximum extent practicable, language easily understandable by the participant's parents or guardians. The notice must inform them of their facility's participation in CACFP, the Program's benefits, the name and telephone number of the sponsoring organization, and the name and telephone number of the State agency responsible for administration of CACFP; (6) If the sponsoring organization chooses to establish procedures for determining a day care home seriously deficient that supplement the procedures in paragraph (l) of this section, a copy of those supplemental procedures. If the State agency has made the sponsoring organization responsible for the administrative review of a proposed termination of a day care home's agreement for cause, pursuant to § 226.6(l)(1), a copy of the sponsoring organization's administrative review procedures. The sponsoring organization's supplemental serious deficiency and administrative review procedures must comply with paragraph (l) of this section and § 226.6(l); (7) A copy of their outside employment policy. The policy must restrict other employment by employees that interferes with an employee's performance of Program-related duties and responsibilities, including outside employment that constitutes a real or apparent conflict of interest; (8) For sponsoring organizations of day care homes, the name, mailing address, and date of birth of each provider; and (9) For sponsoring organizations of unaffiliated centers, the name and mailing address of each center. (c) Each sponsoring organization shall accept final administrative and financial responsibility for food service operations in all facilities under its jurisdiction. (d) Each sponsoring organization must provide adequate supervisory and operational personnel for the effective management and monitoring of the program at all facilities it sponsors. Each sponsoring organization must employ monitoring staff sufficient to meet the requirements of paragraph (b)(1) of this section. At a minimum, Program assistance must include: (1) Pre-approval visits to each facility for which application is made to discuss Program benefits and verify that the proposed food service does not exceed the capability of the child care facility; (2) Training on Program duties and responsibilities to key staff from all sponsored facilities prior to the beginning of Program operations. At a minimum, such training must include instruction, appropriate to the level of staff experience and duties, on the Program's meal patterns, meal counts, claims submission and review procedures, recordkeeping requirements, and reimbursement system. Attendance by key staff, as defined by the State agency, is mandatory; (3) Additional mandatory training sessions, as defined by the State agency, for key staff from all sponsored facilities not less frequently than annually. At a minimum, this training must include instruction, appropriate to the level of staff experience and duties, on the Program's meal patterns, meal counts, claims submission and review procedures, recordkeeping requirements, and reimbursement system. (4)(i) Review elements. (A) The meal pattern; (B) Licensing or approval; (C) Attendance at training; (D) Meal counts; (E) Menu and meal records; and (F) The annual updating and content of enrollment forms (if the facility is required to have enrollment forms on file, as specified in §§ 226.15(e)(2) and 226.15(e)(3)). (ii) Reconciliation of meal counts. (iii) Frequency and type of required facility reviews. (A) At least two of the three reviews must be unannounced; (B) At least one unannounced review must include observation of a meal service; (C) At least one review must be made during each new facility's first four weeks of Program operations; and (D) Not more than six months may elapse between reviews. (E) The timing of unannounced reviews must be varied so that they are unpredictable to the facility; and (F) All types of meal service must be subject to review and sponsoring organizations must vary the meal service reviewed. (iv) Averaging of required reviews. (v) Follow-up reviews. (vi) Notification of unannounced reviews. (vii) Other requirements pertaining to unannounced reviews. (viii) Imminent threat to health or safety. (5) For sponsoring organizations, as part of their monitoring of facilities, compliance with the household contact requirements established pursuant to § 226.6(m)(5) of this part. (e) Each sponsoring organization shall comply with the recordkeeping requirements established in §§ 226.10(d) and 226.15(e) and any recordkeeping requirements established by the State agency in order to justify the administrative payments made in accordance with § 226.12(a). Failure to maintain such records shall be grounds for the denial of reimbursement. (f) The State agency may require a sponsoring organization to enter into separate agreements for the administration of separate types of facilities (child care centers, day care homes, adult day care centers, emergency shelters, at-risk afterschool care centers, and outside-school-hours care centers). (g) Each sponsoring organization electing to receive advance payments of program funds for day care homes shall disburse the full amount of such payments within five working days of receipt from the State agency. If the sponsor requests the full operating advance to which it is entitled, the advances to day care homes shall be the full amount which the sponsor expects the home to earn based on the number of meals projected to be served to enrolled children during the period covered by the advance multiplied by the applicable payment rate as specified in § 226.13(c). If a sponsor elects to receive only a part of the operating advance to which it is entitled, or if the full operating advance is insufficient to provide a full advance to each home, the advance shall be disbursed to its homes in a manner and an amount the sponsor deems appropriate. Each sponsor shall disburse any reimbursement payments for food service due to each day care home within five working days of receipt from the State agency. Such payment shall be based on the number of meals served to enrolled children at each day care home, less any payments advanced to such home. However, the sponsoring organization may withhold from Program payments to each home an amount equal to food service operating costs incurred by the sponsoring organization in behalf of the home and with the home provider's written consent. If payments from the State agency are not sufficient to provide all day care homes under the sponsoring organization's jurisdiction with advance payments and reimbursement payments, available monies shall be used to provide all due reimbursement payments before advances are disbursed. (h) Sponsoring organizations shall make payments of program funds to child care centers, adult day care centers, emergency shelters, at-risk afterschool care centers, or outside-school-hours care centers within five working days of receipt from the State agency, on the basis of the management plan approved by the State agency, and may not exceed the Program costs documented at each facility during any fiscal year; except in those States where the State agency has chosen the option to implement a meals times rates payment system. In those States which implement this optional method of reimbursement, such disbursements may not exceed the rates times the number of meals documented at each facility during any fiscal year. (i) Disbursements of advance payments may be withheld from facilities which fail to submit reports required by § 226.15(e). (j) A for-profit organization shall be eligible to serve as a sponsoring organization for for-profit centers which have the same legal identity as the organization, but shall not be eligible to sponsor for-profit centers which are legally distinct from the organization, day care homes, or public or private nonprofit centers. (k) Before sponsoring organizations expend administrative funds to assist family day care homes in becoming licensed, they shall obtain the following information from each such home: a completed free and reduced price application which documents that the provider meets the Program's income standards; evidence of its application for licensing and official documentation of the defects that are impeding its licensing approval; and a completed CACFP application. These funding requests are limited to $300 per home and are only available to each home once. (l) Termination of agreements for cause General. (2) List of serious deficiencies for day care homes. (i) Submission of false information on the application; (ii) Submission of false claims for reimbursement; (iii) Simultaneous participation under more than one sponsoring organization; (iv) Non-compliance with the Program meal pattern; (v) Failure to keep required records; (vi) Conduct or conditions that threaten the health or safety of a child(ren) in care, or the public health or safety; (vii) A determination that the day care home has been convicted of any activity that occurred during the past seven years and that indicated a lack of business integrity. A lack of business integrity includes fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any other activity indicating a lack of business integrity as defined by the State agency, or the concealment of such a conviction; (viii) Failure to participate in training; or (ix) Any other circumstance related to non-performance under the sponsoring organization-day care home agreement, as specified by the sponsoring organization or the State agency. (3) Serious deficiency notification procedures. (i) Notice of serious deficiency. (A) The serious deficiency(ies); (B) The actions to be taken by the day care home to correct the serious deficiency(ies); (C) The time allotted to correct the serious deficiency(ies) (as soon as possible, but not to exceed 30 days); (D) That the serious deficiency determination is not subject to administrative review. (E) That failure to fully and permanently correct the serious deficiency(ies) within the allotted time will result in the sponsoring organization proposed termination of the day care home's agreement and the proposed disqualification of the day care home and its principals; and (F) That the day care home's voluntary termination of its agreement with the sponsoring organization after having been notified that it is seriously deficient will still result in the day care home's formal termination by the sponsoring organization and placement of the day care home and its principals on the National disqualified list. (ii) Successful corrective action. (iii) Proposed termination of agreement and proposed disqualification. (A) Inform the day care home that it may continue to participate and receive Program reimbursement for eligible meals served until its administrative review is concluded; (B) Inform the day care home that termination of the day care home's agreement will result in the day care home's termination for cause and disqualification; and (C) State that if the day care home seeks to voluntarily terminate its agreement after receiving the notice of intent to terminate, the day care home will still be placed on the National disqualified list. (iv) Program payments. (v) Agreement termination and disqualification. (4) Suspension of participation for day care homes. (i) General. (ii) Notice of suspension, serious deficiency, and proposed termination. (A) Specify the serious deficiency(ies) found and the day care home's opportunity for an administrative review of the proposed termination in accordance with § 226.6(l); (B) State that participation (including all Program payments) will remain suspended until the administrative review is concluded; (C) Inform the day care home that if the administrative review official overturns the suspension, the day care home may claim reimbursement for eligible meals served during the suspension; (D) Inform the day care home that termination of the day care home's agreement will result in the placement of the day care home on the National disqualified list; and (E) State that if the day care home seeks to voluntarily terminate its agreement after receiving the notice of proposed termination, the day care home will still be terminated for cause and disqualified. (iii) Agreement termination and disqualification. (iv) Program payments. (m) Sponsoring organizations of day care homes or unaffiliated centers must not make payments to employees or contractors solely on the basis of the number of homes or centers recruited. However, employees or contractors may be paid or evaluated on the basis of recruitment activities accomplished. [47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at 48 FR 21530, May 13, 1983; 50 FR 8580, Mar. 4, 1985; 50 FR 26975, July 1, 1985; 53 FR 52591, Dec. 28, 1988; 63 FR 9729, Feb. 26, 1998; 64 FR 72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002; 69 FR 53544, Sept. 1, 2004; 71 FR 5, Jan. 3, 2006; 72 FR 41608, July 31, 2007; 76 FR 34571, June 13, 2011; 78 FR 13451, Feb. 28, 2013; 88 FR 57856, Aug. 23, 2023] § 226.17 Child care center provisions. (a) Child care centers may participate in the Program either as independent centers or under the auspices of a sponsoring organization; provided, however, that public and private nonprofit centers shall not be eligible to participate in the Program under the auspices of a for-profit sponsoring organization. Child care centers participating as independent centers shall comply with the provisions of § 226.15. (b) All child care centers, independent or sponsored, shall meet the following requirements (1) Child care centers must have Federal, State, or local licensing or approval to provide day care services to children. Child care centers, which are complying with applicable procedures to renew licensing or approval, may participate in the Program during the renewal process, unless the State agency has information that indicates that renewal will be denied. If licensing or approval is not available, a child care center may participate if it demonstrates compliance with the CACFP child care standards or any applicable State or local child care standards to the State agency. (2) Except for for-profit centers, child care centers shall be public, or have tax exempt status under the Internal Revenue Code of 1986. (3) Each child care center participating in the Program must serve one or more of the following meal types—breakfast; lunch; supper; and snack. Reimbursement must not be claimed for more than two meals and one snack or one meal and two snacks provided daily to each child. (4) Each child care center participating in the Program shall claim only the meal types specified in its approved application in accordance with the meal pattern requirements specified in § 226.20. For-profit child care centers may not claim reimbursement for meals served to children in any month in which less than 25 percent of the children in care (enrolled or licensed capacity, whichever is less) were eligible for free or reduced price meals or were title XX beneficiaries. However, children who only receive at-risk afterschool snacks and/or at-risk afterschool meals must not be included in this percentage. Menus and any other nutritional records required by the State agency shall be maintained to document compliance with such requirements. (5) A child care center with preschool children may also be approved to serve a breakfast, snack, and supper to school-age children participating in an outside-school-hours care program meeting the criteria of § 226.19(b) that is distinct from its day care program for preschool-age children. The State agency may authorize the service of lunch to such participating children who attend a school that does not offer a lunch program, provided that the limit of two meals and one snack, or one meal and two snacks, per child per day is not exceeded. (6) A child care center with preschool children may also be approved to serve a snack to school age children participating in an afterschool care program meeting the requirements of § 226.17a that is distinct from its day care program for preschool children, provided that the limit of two meals, and one snack, or one meal and two snacks, per child per day is not exceeded. (7) A child care center may utilize existing school food service facilities or obtain meals from a school food service facility, and the pertinent requirements of this part shall be embodied in a written agreement between the child care center and school. The center shall maintain responsibility for all Program requirements set forth in this part. (8) Child care centers shall collect and maintain documentation of the enrollment of each child, including information used to determine eligibility for free and reduced price meals in accordance with § 226.23(e)(1). In addition, Head Start participants need only have a Head Start statement of income eligibility, or a statement of Head Start enrollment from an authorized Head Start representative, to be eligible for free meal benefits under the CACFP. Such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. (9) Each child care center must maintain daily records of time of service meal counts by type (breakfast, lunch, supper, and snacks) served to enrolled children, and to adults performing labor necessary to the food service. (10) Each child care center must require key staff, as defined by the State agency, to attend Program training prior to the center's participation in the Program, and at least annually thereafter, on content areas established by the State agency. (c) Each child care center shall comply with the recordkeeping requirements established in § 226.10(d), in paragraph (b) of this section and, if applicable, in § 226.15(e). Failure to maintain such records shall be grounds for the denial of reimbursement. (d) If so instructed by its sponsoring organization, a sponsored center must distribute to parents a copy of the sponsoring organization's notice to parents. (e) Unaffiliated sponsored child care centers must enter into a written permanent agreement with the sponsoring organization. The agreement must specify the rights and responsibilities of both parties. At a minimum, the agreement must include the provisions set forth in paragraph (b) of this section. (f) Independent child care centers must enter into a written permanent agreement with the State agency. The agreement must specify the rights and responsibilities of both parties as required by § 226.6(b)(4). At a minimum, the agreement must include the provisions set forth in paragraph (b) of this section. [47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36907, Oct. 2, 1987; 53 FR 52591, Dec. 28, 1988; 54 FR 26724, June 26, 1989; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1, 1997; 63 FR 9729, Feb. 26, 1998; 64 FR 72261, Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR 53546, Sept. 1, 2004; 70 FR 43262, July 27, 2005; 72 FR 41608, July 31, 2007; 75 FR 16328, Apr. 1, 2010; 78 FR 13451, Feb. 28, 2013; 88 FR 57856, Aug. 23, 2023] § 226.17a At-risk afterschool care center provisions. (a) Organizations eligible to receive reimbursement for at-risk afterschool snacks and at-risk afterschool meals Eligible organizations. (i) Organizations must meet the definition of an At-risk afterschool care center (ii) Organizations must operate an eligible afterschool care program, as described in paragraph (b) of this section. (iii) Organizations must meet the licensing/approval requirements in § 226.6(d)(1). (iv) Except for for-profit centers, at-risk afterschool care centers must be public, or have tax-exempt status under the Internal Revenue Code of 1986 or be currently participating in another Federal program requiring nonprofit status. (v) Organizations eligible to be reimbursed for at-risk afterschool meals must be located in one of the eligible States designated by law or selected by the Secretary as directed by law. (2) Limitations. (A) Serve the at-risk afterschool snacks and/or at-risk afterschool meals to children who are participating in an approved afterschool care program; and (B) Not exceed the authorized capacity of the at-risk afterschool care center. (ii) In any calendar month, a for-profit center must be eligible to participate in the Program as described in the definition of For-profit center in § 226.2. However, children who only receive at-risk afterschool snacks and/or at-risk afterschool meals must not be considered in determining this eligibility. (b) Eligible at-risk afterschool care programs Eligible programs. (i) Be organized primarily to provide care for children after school or on weekends, holidays, or school vacations during the regular school year (an at-risk afterschool care center may not claim snacks during summer vacation, unless it is located in the attendance area of a school operating on a year-round calendar); (ii) Have organized, regularly scheduled activities (i.e., in a structured and supervised environment); (iii) Include education or enrichment activities; and (iv) Except for Emergency shelters (2) Eligibility limitation. (c) Eligibility requirements for children. Persons with disabilities (d) Licensing requirements for at-risk afterschool care centers. (e) Application procedures Application. (2) Required information. (i) An indication that the applicant organization meets the eligibility criteria for organizations as specified in paragraph (a) of this section; (ii) A description of how the afterschool care program(s) meets the eligibility criteria in paragraph (b) of this section; (iii) In the case of a sponsoring organization, a list of all applicant afterschool care centers; (iv) Documentation that permits the State agency to confirm that all applicant afterschool care centers are located in an eligible area, as described in paragraph (i) of this section; and (v) Other information required as a condition of eligibility in the CACFP must be submitted with an application for participation in accordance with § 226.6(b)(1). (f) State agency action on applications State agency approval. (2) Agreements. (i) Unaffiliated sponsored afterschool care centers must enter into a written permanent agreement with the sponsoring organization. The agreement must specify the rights and responsibilities of both parties. At a minimum, the agreement must include the applicable provisions set forth in this section. (ii) Independent afterschool care centers must enter into a written permanent agreement with the State agency. The agreement must specify the rights and responsibilities of both parties as required by § 226.6(b)(4). At a minimum, the agreement must include the applicable provisions set forth in this section. (g) Application process in subsequent years. (h) Changes to participating centers. (i) Area eligibility. Eligible area (1) Definition. (2) Data used. (3) Frequency of area eligibility determinations. (j) Cost of at-risk afterschool snacks and meals. (k) Limit on daily reimbursements. (l) Meal pattern requirements for at-risk afterschool snacks and at-risk afterschool meals. (m) Time periods for snack and meal services At-risk afterschool snacks. (2) At-risk afterschool meals. (n) Reimbursement rates. (o) Recordkeeping requirements. (1) Daily attendance rosters, sign-in sheets or, with State agency approval, other methods which result in accurate recording of daily attendance; (2) The number of at-risk afterschool snacks prepared or delivered for each snack service and/or, in eligible States, the number of at-risk afterschool meals prepared or delivered for each meal service; (3) The number of at-risk afterschool snacks served to participating children for each snack service and/or, in eligible States, the number of at-risk afterschool meals served to participating children for each meal service; and (4) Menus for each at-risk afterschool snack service and each at-risk afterschool meal service. (p) Reporting requirements. (q) Monitoring requirements. [72 FR 41608, July 31, 2007, as amended at 75 FR 16328, Apr. 1, 2010; 78 FR 13451, Feb. 28, 2013; 88 FR 57856, Aug. 23, 2023] § 226.18 Day care home provisions. (a) Day care homes shall have current Federal, State or local licensing or approval to provide day care services to children. Day care homes which cannot obtain their license because they lack the funding to comply with licensing standards may request a total limit per home of $300 in administrative funds from a sponsoring organization to assist them in obtaining their license. Day care homes that, at the option of their sponsoring organization, receive administrative funds for licensing-related expenses must complete documentation requested by their sponsor as described in § 226.16(k) prior to receiving any funds. The agreement must be signed by the sponsoring organization and the provider and must include the provider's full name, mailing address, and date of birth. Day care homes which are complying with applicable procedures to renew licensing or approval may participate in the Program during the renewal process, unless the State agency has information which indicates that renewal will be denied. If licensing or approval is not available, a day care home may participate in the Program if: (1) It receives title XX funds for providing child care; or (2) It demonstrates compliance with CACFP child care standards or applicable State or local child care standards to the State agency. (b) Day care homes participating in the program shall operate under the auspices of a public or private nonprofit sponsoring organization. Sponsoring organizations shall enter into a written permanent agreement with each sponsored day care home which specifies the rights and responsibilities of both parties. Nothing in the preceding sentence shall be construed to limit the ability of the sponsoring organization to suspend or terminate the permanent agreement in accordance with § 226.16(l). This agreement shall be developed by the State agency, unless the State agency elects, at the request of the sponsor, to approve an agreement developed by the sponsor. At a minimum, the agreement shall embody: (1) The right of the sponsoring organization, the State agency, the Department, and other State and Federal officials to make announced or unannounced reviews of the day care home's operations and to have access to its meal service and records during normal hours of operation. (2) The responsibility of the sponsoring organization to require key staff, as defined by the State agency, to receive Program training prior to the day care home's participation in the Program, and at least annually thereafter, on content areas established by the State agency, and the responsibility of the day care home to participate in that training; (3) The responsibility of the day care home to prepare and serve meals which meet the meal patterns specified in § 226.20; (4) The responsibility of the day care home to maintain records of menus, and of the number of meals, by type, served to enrolled children; (5) The responsibility of the day care home to promptly inform the sponsoring organization about any change in the number of children enrolled for care or in its licensing or approval status; (6) The meal types approved for reimbursement to the day care home by the State agency; (7) The right of the day care home to receive in a timely manner the full food service rate for each meal served to enrolled children for which the sponsoring organization has received payment from the State agency. However, if, with the home provider's consent, the sponsoring organization will incur costs for the provision of program foodstuffs or meals in behalf of the home, and subtract such costs from Program payments to the home, the particulars of this arrangement shall be specified in the agreement. The sponsoring organization must not withhold Program payments to any family day care home for any other reason, except that the sponsoring organization may withhold from the provider any amounts that the sponsoring organization has reason to believe are invalid, due to the provider having submitted a false or erroneous meal count; (8) The right of the sponsoring organization or the day care home to terminate the agreement for cause or, subject to stipulations by the State agency, convenience; (9) A prohibition of any sponsoring organization fee to the day care home for its Program administrative services; (10) If the State agency has approved a time limit for submission of meal records by day care homes, that time limit shall be stated in the agreement; (11) The responsibility of the sponsoring organization to inform tier II day care homes of all of their options for receiving reimbursement for meals served to enrolled children. These options include: (i) Receiving tier I rates for the meals served to eligible enrolled children, by electing to have the sponsoring organization identify all income-eligible children through the collection of free and reduced-price applications and the sponsoring organization or day care home's possession of other proof of a child or household's participation in a categorically eligible program; (ii) Receiving tier I rates for the meals served to eligible enrolled children, by electing to have the sponsoring organization identify only those children for whom the sponsoring organization or day care home possess documentation of the child or household's participation in a categorically eligible program, under the expanded categorical eligibility provision, as described in § 226.23(e)(1); or (iii) Receiving tier II rates of reimbursement for all meals served to enrolled children; (12) The responsibility of the sponsoring organization, upon the request of a tier II day care home, to collect applications and determine the eligibility of enrolled children for free or reduced price meals; (13) The right of the tier II day care home to assist in collecting applications from households and transmitting the applications to the sponsoring organization. However, a tier II day care home may not review the collected applications. The sponsoring organizations may prohibit a tier II day care home from assisting in collection and transmittal of applications if the day care home does not comply with the process, as described in § 226.23(e)(2)(viii); (14) The State agency's policy to restrict transfers of day care homes between sponsoring organizations; (15) The responsibility of the day care home to notify their sponsoring organization in advance whenever they are planning to be out of their home during the meal service period. The agreement must also state that, if this procedure is not followed and an unannounced review is conducted when the children are not present in the day care home, claims for meals that would have been served during the unannounced review will be disallowed; (16) The day care home's opportunity to request an administrative review if a sponsoring organization issues a notice of proposed termination of the day care home's Program agreement, or if a sponsoring organization suspends participation due to health and safety concerns, in accordance with § 226.6(1)(2); and (17) If so instructed by its sponsoring organization, the day care home's responsibility to distribute to parents a copy of the sponsoring organization's notice to parents. (c) Each day care home must serve one or more of the following meal types—breakfast, lunch, supper, and snack. Reimbursement may not be claimed for more than two meals and one snack, or one meal and two snacks, provided daily to each child. (d) Each day care home participating in the program shall serve the meal types specified in its approved application in accordance with the meal pattern requirements specified in § 226.20. Menu records shall be maintained to document compliance with these requirements. Meals shall be served at no separate charge to enrolled children; (e) Each day care home must maintain on file documentation of each child's enrollment and must maintain daily records of the number of children in attendance and the number of meals, by type, served to enrolled children. Such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. Each tier II day care home in which the provider elects to have the sponsoring organization identify enrolled children who are eligible for free or reduced price meals, and in which the sponsoring organization employs a meal counting and claiming system in accordance with § 226.13(d)(3)(i), shall maintain and submit each month to the sponsoring organization daily records of the number and types of meals served to each enrolled child by name. Payment may be made for meals served to the provider's own children only when (1) such children are enrolled and participating in the child care program during the time of the meal service, (2) enrolled nonresident children are present and participating in the child care program and (3) providers' children are eligible to receive free or reduced-price meals. Reimbursement may not be claimed for meals served to children who are not enrolled, or for meals served at any one time to children in excess of the home's authorized capacity or for meals served to providers' children who are not eligible for free or reduced-price meals. (f) The State agency may not require a day care home or sponsoring organization to maintain documentation of home operating costs. (g) Each day care home shall comply with the recordkeeping requirements established in § 226.10(d) and in this section. Failure to maintain such records shall be grounds for the denial of reimbursement. [47 FR 36527, Aug. 20, 1982] Editorial Note: For Federal Register www.govinfo.gov. § 226.19 Outside-school-hours care center provisions. (a) Outside-school-hours care centers may participate in the Program either as independent centers or under the auspices of a sponsoring organization; Provided, however, (b) All outside-school-hours care centers, independent or sponsored, shall meet the following requirements: (1) In accordance with § 226.6(d)(1), if Federal, State or local licensing or approval is not otherwise required, outside-school-hours care centers must meet State or local health and safety standards. When State or local health and safety standards have not been established, State agencies are encouraged to work with appropriate State and local officials to create such standards. Meeting these standards will remain a precondition for any outside-school-hours care center's eligibility for CACFP nutrition benefits. In cases where Federal, State or local licensing or approval is required, outside-school-hours care centers that are complying with applicable procedures to renew licensing or approval may participate in the Program during the renewal process, unless the State agency has information that indicates the renewal will be denied. (2) Except for for-profit centers, outside-school-hours care centers shall be public, or have tax-exempt status under the Internal Revenue Code of 1986. (3) Nonresidential public or private nonprofit schools which provide organized child care programs for school children may participate in the Program as outside-school-hours care centers if: (i) Children participate in a regularly scheduled program that meets the criteria of paragraph (b)(1) of this section. The program is organized for the purpose of providing services to children and is distinct from any extracurricular programs organized primarily for scholastic, cultural, or athletic purposes; and (ii) Separate Program records are maintained. (4) Outside-school-hours care centers shall be eligible to serve one or more of the following meal types: breakfasts, snacks and suppers. In addition, outside-school-hours care centers shall be eligible to serve lunches to enrolled children during periods of school vacation, including weekends and holidays, and to children attending schools which do not offer a lunch program. Notwithstanding the eligibility of outside-school-hours care centers to serve Program meals to children on school vacation, including holidays and weekends, such centers shall not operate under the Program on weekends only. (5) Each outside-school-hours care center participating in the Program shall claim only the meal types specified in its approved application and served in compliance with the meal pattern requirements of § 226.20. Reimbursement may not be claimed for more than two meals and one snack provided daily to each child or for meals served to children at any one time in excess of authorized capacity. For-profit centers may not claim reimbursement for meals served to children in any month in which less than 25 percent of the children in care (enrolled or licensed capacity, whichever is less) were eligible for free or reduced price meals or were title XX beneficiaries. (6) Each outside-school-hours care center must require key operational staff, as defined by the State agency, to attend Program training prior to the center's participation in the Program, and at least annually thereafter, on content areas established by the State agency. Each meal service must be supervised by an adequate number of operational personnel who have been trained in Program requirements as outlined in this section. Operational personnel must ensure that: (i) Meals are served only to children and to adults who perform necessary food service labor; (ii) Meals served to children meet the meal pattern requirements specified in § 226.20; (iii) Meals served are consumed on the premises of the centers; (iv) Accurate records are maintained; and (v) The number of meals prepared or ordered is promptly adjusted on the basis of participation trends. (7) Each outside-school-hours care center shall accurately maintain the following records: (i) Information used to determine eligibility for free or reduced price meals in accordance with § 226.23(e)(1); (ii) Number of meals prepared or delivered for each meal service; (iii) Daily menu records for each meal service; (iv) Number of meals served to children at each meal service; (v) Number of children in attendance during each meal service; (vi) Number of meals served to adults performing necessary food service labor for each meal service; and (vii) All other records required by the State agency financial management system. (8) An outside-school-hours care center may utilize existing school food service facilities or obtain meals from a school food service facility, and the pertinent requirements of this part shall be embodied in a written agreement between the outside-school-hours care center and the school. The center shall maintain responsibility for all Program requirements set forth in this part. (c) Each outside-school-hours care center shall comply with the recordkeeping requirements established in § 226.10(d), in paragraph (b) of this section and, if applicable, in § 226.15(e). Failure to maintain such records shall be grounds for the denial of reimbursement. (d) Unaffiliated sponsored outside-school-hours-care centers must enter into a written permanent agreement with the sponsoring organization. The agreement must specify the rights and responsibilities of both parties. At a minimum, the agreement must include the provisions set forth in paragraph (b) of this section. (e) Independent outside-school-hours care centers must enter into a written permanent agreement with the State agency. The agreement must specify the rights and responsibilities of both parties as required by § 226.6(b)(4). At a minimum, the agreement must include the provisions described in paragraph (b) of this section. [47 FR 36527, Aug. 20, 1982, as amended at 52 FR 36907, Oct. 2, 1987; 54 FR 26724, June 26, 1989; Amdt. 22, 55 FR 1378, Jan. 14, 1990; 56 FR 58175, Nov. 16, 1991; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1, 1997; 64 FR 72261, Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR 53546, Sept. 1, 2004; 70 FR 43262, July 27, 2005; 72 FR 41603, 41610, July 31, 2007; 88 FR 57857, Aug. 23, 2023] § 226.19a Adult day care center provisions. (a) Adult day care centers may participate in the Program either as independent centers or under the auspices of a sponsoring organization; provided, however, that public and private nonprofit centers shall not be eligible to participate in the Program under the auspices of a for-profit sponsoring organization. Adult day care centers participating as independent centers shall comply with the provisions of § 226.15. (b) All adult day care centers, independent or sponsored, shall meet the following requirements: (1) Adult day care centers shall provide a community-based group program designed to meet the needs of functionally impaired adults through an individual plan of care. Such a program shall be a structured, comprehensive program that provides a variety of health, social and related support services to enrolled adult participants. (2) Adult day care centers shall provide care and services directly or under arrangements made by the agency or organization whereby the agency or organization maintains professional management responsibility for all such services. (3) Adult day care centers shall have Federal, State or local licensing or approval to provide day care services to functionally impaired adults (as defined in § 226.2) or individuals 60 years of age or older in a group setting outside their home or a group living arrangement on a less than 24-hour basis. Adult day care centers which are complying with applicable procedures to renew licensing or approval may participate in the Program during the renewal process, unless the State agency has information which indicates that renewal will be denied. (4) Except for for-profit centers, adult day care centers shall be public, or have tax-exempt status under the Internal Revenue Code of 1986. (5) Each adult day care center participating in the Program must serve one or more of the following meal types—breakfast, lunch, supper, and snack. Reimbursement may not be claimed for more than two meals and one snack, or one snack and two meals, provided daily to each adult participant. (6) Each adult day care center participating in the Program shall claim only the meal types specified in its approved application in accordance with the meal pattern requirements specified in § 226.20. Participating centers may not claim CACFP reimbursement for meals claimed under part C of title III of the Older Americans Act of 1965. Reimbursement may not be claimed for meals served to persons who are not enrolled, or for meals served to participants at any one time in excess of the center's authorized capacity, or for any meal served at a for-profit center during a calendar month when less than 25 percent of enrolled participants were title XIX or title XX beneficiaries. Menus and any other nutritional records required by the State agency shall be maintained to document compliance with such requirements. (7) An adult day care center may obtain meals from a school food service facility, and the pertinent requirements of this part shall be embodied in a written agreement between the center and school. The center shall maintain responsibility for all Program requirements set forth in this part. (8) Adult day care centers shall collect and maintain documentation of the enrollment of each adult participant including information used to determine eligibility for free and reduced price meals in accordance with § 226.23(e)(1). (9) Each adult day care center must maintain daily records of time of service meal counts by type (breakfast, lunch, supper, and snacks) served to enrolled participants, and to adults performing labor necessary to the food service. (10) Each adult day care center shall maintain records on the age of each enrolled person. In addition, each adult day care center shall maintain records which demonstrate that each enrolled person under the age of 60 meets the functional impairment eligibility requirements established under the definition of “functionally impaired adult” contained in this part. Finally, each adult day care center shall maintain records which document that qualified adult day care participants reside in their own homes (whether alone or with spouses, children or guardians) or in group living arrangements as defined in § 226.2. (11) Each adult day care center must require key operational staff, as defined by the State agency, to attend Program training prior to the facility's participation in the Program, and at least annually thereafter, on content areas established by the State agency. Each meal service must be supervised by an adequate number of operational personnel who have been trained in Program requirements as outlined in this section. (c) Each adult day care center shall comply with the recordkeeping requirements established in § 226.10(d), in paragraph (b) of this section and, if applicable, in § 226.15(e). Failure to maintain such records shall be grounds for the denial of reimbursement. (d) Unaffiliated sponsored adult day care centers must enter into a written permanent agreement with the sponsoring organization. The agreement must specify the rights and responsibilities of both parties. At a minimum, the agreement must address the provisions set forth in paragraph (b) this section. (e) Independent adult day care centers must enter into a written permanent agreement with the State agency. The agreement must specify the rights and responsibilities of both parties as required by § 226.6(b)(4). At a minimum, the agreement must include the provisions described in paragraph (b) of this section. [53 FR 52591, Dec. 28, 1988, as amended by Amdt. 22, 55 FR 1378, Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 23619, May 1, 1997; 64 FR 72261, Dec. 27, 1999; 67 FR 43493, June 27, 2002; 69 FR 53546, Sept. 1, 2004; 72 FR 41610, July 31, 2007; 88 FR 57857, Aug. 23, 2023] § 226.20 Requirements for meals. (a) Meal components. (1) Fluid milk. (i) Children 1 year old. (ii) Children 2 through 5 years old. (iii) Children 6 years old and older. (iv) Adults. 3/4 (2) Vegetables. 1/2 (i) Pasteurized, full-strength vegetable juice may be used to fulfill the entire requirement. Vegetable juice or fruit juice may only be served at one meal, including snack, per day. (ii) Cooked dry beans, peas, and lentils may be counted as either a vegetable or as a meat alternate, but not as both in the same dish. (3) Fruits. 1/4 1/2 (i) Pasteurized, full-strength fruit juice may be used to fulfill the entire requirement. Fruit juice or vegetable juice may only be served at one meal, including snack, per day. (ii) A vegetable may be used to meet the entire fruit requirement at lunch and supper. When two vegetables are served at lunch or supper, two different kinds of vegetables must be served. (4) Grains Enriched and whole grains. (A) At least one serving per day, across all eating occasions of bread, cereals, and grains, must be whole grain-rich, as defined in § 226.2. Whole grain-rich is the term designated by FNS to indicate that the grain content of a product is between 50 and 100 percent whole grain with any remaining grains being enriched. (B) A serving may contain whole grain-rich or enriched bread, cornbread, biscuits, rolls, muffins, and other bread products; or whole grain-rich, enriched, or fortified cereal grain, cooked pasta or noodle products, or breakfast cereal; or any combination of these foods. (ii) Breakfast cereals. (iii) Desserts. (5) Meats/meat alternates Serving meats/meat alternates. (A) Lean meat, poultry, or fish; (B) Alternate protein products; (C) Cheese, or an egg; (D) Cooked dry beans, peas, and lentils; (E) Peanut butter; or (F) Any combination of these foods. (ii) Nuts and seeds. (A) Nut and seed meals or flours may credit only if they meet the requirements for alternate protein products established in appendix A of this part. (B) Acorns, chestnuts, and coconuts do not credit as meat alternates because of their low protein and iron content. (iii) Yogurt. 1/2 (A) Yogurt may be plain or flavored, unsweetened, or sweetened; (B) Through September 30, 2025, yogurt must contain no more than 23 grams of total sugars per 6 ounces. By October 1, 2025, yogurt must contain no more than 12 grams of added sugars per 6 ounces (2 grams of added sugars per ounce); (C) Noncommercial or commercial standardized yogurt products, such as frozen yogurt, drinkable yogurt products, homemade yogurt, yogurt flavored products, yogurt bars, yogurt covered fruits or nuts, or similar products are not creditable; and (D) For adults, yogurt may only be used as a meat alternate when it is not also being used as a fluid milk substitute in the same meal. (iv) Tofu and soy products. (v) Beans, peas, and lentils. (vi) Other meat alternates. (b) Infant meals Feeding infants. (2) Breastmilk and iron-fortified formula. (i) Parent or guardian provided breastmilk or iron-fortified formula. (ii) Breastfed infants. (3) Solid foods. (4) Infant meal pattern. (i) Birth through 5 months Breakfast. (B) Lunch or supper. (C) Snack. (ii) 6 through 11 months. (A) Breakfast, lunch, or supper. 1/2 (B) Snack. 1/2 1/4 1/2 (5) Infant meal pattern table. Table 1 to Paragraph ( b Infants Birth through 5 months 6 through 11 months Breakfast, Lunch, or Supper 4-6 fluid ounces breast milk 1 2 6-8 fluid ounces breast milk 1 2 0- 1 2 2 3 0-4 tablespoons meat, fish, poultry, whole egg, cooked dry beans, peas, and lentils; or 0-2 ounces of cheese; or 0-4 ounces (volume) of cottage cheese; or 0-4 ounces or 1 2 4 5 0-2 tablespoons vegetable or fruit, or a combination of both. 5 6 Snack 4-6 fluid ounces breast milk 1 2 2-4 fluid ounces breast milk 1 2 0- 1 2 3 7 0- 1 4 3 7 0- 1 2 2 3 0- 1 4 3 5 7 8 0-2 tablespoons vegetable or fruit, or a combination of both. 5 6 1 2 3 4 5 6 7 8 (c) Meal patterns for children age 1 through 18 and adult participants. (1) Breakfast. Table 2 to Paragraph ( c [Select the appropriate components for a reimbursable meal] Meal components and food items 1 Minimum quantities Ages 1-2 Ages 3-5 Ages 6-12 Ages 13-18 2 Adult participants Fluid milk 4 fluid ounces 3 6 fluid ounces 4 8 fluid ounces 5 8 fluid ounces 5 8 fluid ounces 6 Vegetables, fruits, or portions of both 7 1 4 1 2 1 2 1 2 1 2 Grains 8 1 2 1 2 1 ounce equivalent 1 ounce equivalent 2 ounce equivalents. 1 2 3 4 5 6 3 4 7 8 (2) Lunch and supper. Table 3 to Paragraph ( c [Select the appropriate components for a reimbursable meal] Meal components and food items 1 Minimum quantities Ages 1-2 Ages 3-5 Ages 6-12 Ages 13-18 2 Adult participants Fluid milk 4 fluid ounces 3 6 fluid ounces 4 8 fluid ounces 5 8 fluid ounces 5 8 fluid ounces 6 Meats/meat alternates 7 1 ounce equivalent 1 1 2 2 ounce equivalents 2 ounce equivalents 2 ounce equivalents. Vegetables 8 1 8 1 4 1 2 1 2 1 2 Fruits 8 1 8 1 4 1 4 1 4 1 2 Grains 9 1 2 1 2 1 ounce equivalent 1 ounce equivalent 2 ounce equivalents. 1 2 3 4 5 6 3 4 7 8 9 (3) Snack. Table 4 to Paragraph ( c [Select two of the five components for a reimbursable snack] Meal components and food items 1 Minimum quantities Ages 1-2 Ages 3-5 Ages 6-12 Ages 13-18 2 Adult participants Fluid milk 4 fluid ounces 3 4 fluid ounces 4 8 fluid ounces 5 8 fluid ounces 5 8 fluid ounces 6 Meats/meat alternates 7 1 2 1 2 1 ounce equivalents 1 ounce equivalents 1 ounce equivalents. Vegetables 8 1 2 1 2 3 4 3 4 1 2 Fruits 8 1 2 1 2 3 4 3 4 1 2 Grains 9 1 2 1 2 1 ounce equivalent 1 ounce equivalent 1 ounce equivalents. 1 2 3 4 5 6 3 4 7 8 9 (d) Food preparation. (e) Unavailability of fluid milk Temporary. (2) Continuing. (f) Grain substitutions. (g) Modifications and variations in reimbursable meals and snacks as described in paragraphs (a) through (c) of this section Modifications for disability reasons. (i) In order to receive Federal reimbursement when a modified meal does not meet the meal pattern requirements specified in this section, the institution or facility must obtain from the household a written medical statement signed by a State licensed healthcare professional. By October 1, 2025, institutions and facilities must also accept a medical statement signed by a registered dietitian. The medical statement must provide sufficient information about the child or adult participant's dietary restrictions, such as foods to be omitted and recommended alternatives, if appropriate. Modified meals that meet the meal pattern requirements in this section are reimbursable with or without a medical statement. (ii) Institutions and facilities must ensure that parents and guardians, and their children when age-appropriate at institution or facility discretion; adult participants; and persons on behalf of adult participants have notice of the procedure for requesting meal modifications for disabilities and the process for procedural safeguards related to meal modifications for disabilities. See §§ 15b.6(b) and 15b.25 of this title. (iii) Expenses incurred when making meal modifications that exceed Program reimbursement rates must be paid by the institution or facility; costs may be paid from the institution or facility's nonprofit food service account. (iv) A parent, guardian, adult participant, or a person on behalf of an adult participant may supply one or more components of the reimbursable meal as long as the institution or facility provides at least one required meal component. (2) Variations for non-disability reason (ii) Expenses incurred from variations that exceed program reimbursement rates must be paid by the institution or facility; costs may be paid from the institution or facility's nonprofit food service account. (iii) A parent, guardian, adult participant, or a person on behalf of an adult participant may supply one component of the reimbursable meal as long as the component meets the requirements described in this section and the institution or facility provides the remaining components. (3) Fluid milk substitutes for non-disability reasons. (ii) If an institution or facility chooses to offer one or more fluid milk substitutes for non-disability reasons, the fluid milk substitutes must provide, at a minimum, the nutrients listed in the following table. Fluid milk substitutes must be fortified in accordance with fortification guidelines issued by the Food and Drug Administration. Table 5 to Paragraph ( g ii Nutrient Per cup Calcium 276 mg. Protein 8 g. Vitamin A 150 mcg. retinol activity equivalents (RAE). Vitamin D 2.5 mcg. Magnesium 24 mg. Phosphorus 222 mg. Potassium 349 mg. Riboflavin 0.44 mg. Vitamin B-12 1.1 mcg. (iii) Expenses incurred when providing fluid milk substitutes that exceed Program reimbursements must be paid by the participating institution or facility; costs may be paid from the institution or facility's nonprofit food service account. (h) Special variations. (i) Meals prepared in schools. (j) Meal planning. (k) Time of meal service. (l) Sanitation. (m) Donated commodities. (n) Family style meal service. (1) A sufficient amount of prepared food must be placed on each table to provide the full required portions of each of the components, as outlined in paragraphs (c)(1) and (2) of this section, for all children or adults at the table and to accommodate supervising adults if they wish to eat with the children and adults. (2) Children and adults must be allowed to serve the meal components themselves, with the exception of fluids (such as milk). During the course of the meal, it is the responsibility of the supervising adults to actively encourage each child and adult to serve themselves the full required portion of each meal component of the meal pattern. Supervising adults who choose to serve the fluids directly to the children or adults must serve the required minimum quantity to each child or adult. (3) Institutions and facilities which use family style meal service may not claim second meals for reimbursement. (o) Offer versus Serve. (i) For adults One of the four food (B) Two of the five (C) One of the four (ii) For children. Two of the five (2) In pricing programs, the price of the reimbursable meal must not be affected if a participant declines a food item. (p) Prohibition on using foods and beverages as punishments or rewards. (q) Severability. [81 FR 24377, Apr. 25, 2016, as amended at 81 FR 75677, Nov. 1, 2016; 83 FR 56716, Nov. 30, 2017; 84 FR 50292, Sept. 25, 2019; 85 FR 7855, Feb. 12, 2020; 85 FR 74850, Nov. 24, 2020; 86 FR 57547, Oct. 18, 2021; 87 FR 4127, Jan. 27, 2022; 87 FR 7007, Feb. 7, 2022; 89 FR 32088, Apr. 25, 2024; 91 FR 25080, May 8, 2026] § 226.21 Food service management companies. (a) Any institution may contract with a food service management company. An institution which contracts with a food service management company must remain responsible for ensuring that the food service operation conforms to its agreement with the State agency. All procurements of meals from food service management companies must adhere to the procurement standards set forth in § 226.22 and comply with the following procedures intended to prevent fraud, waste, and Program abuse: (1) All proposed contracts shall be publicly announced at least once 14 calendar days prior to the opening of bids. The announcement shall include the time and place of the bid opening; (2) The institution shall notify the State agency at least 14 calendar days prior to the opening of the bids of the time and place of the bid opening; (3) The invitation to bid shall not provide for loans or any other monetary benefit or terms or conditions to be made to institutions by food service management companies; (4) Nonfood items shall be excluded from the invitation to bid, except where such items are essential to the conduct of the food service; (5) The invitation to bid shall not specify special meal requirements to meet ethnic or religious needs unless special requirements are necessary to meet the needs of the participants to be served; (6) The bid shall be publicly opened; (7) All bids totaling $50,000 or more shall be submitted to the State agency for approval before acceptance. All bids shall be submitted to the State agency for approval before accepting a bid which exceeds the lowest bid. State agencies shall respond to any request for approval within 10 working days of receipt; (8) The institutions shall inform the State agency of the reason for selecting the food service management company chosen. State agencies may require institutions to submit copies of all bids submitted under this section. (b) The institution and the food service management company shall enter into a standard contract as required by § 226.6(i). However, public institutions may, with the approval of the State agency, use their customary form of contract if it incorporates the provisions of § 226.6(i). (c) A copy of the contract between each institution and food service management company shall be submitted to the State agency prior to the beginning of Program operations under the subject contract. (d) Each proposed additional provision to the standard form of contract shall be submitted to the State agency for approval. (e) A food service management company may not subcontract for the total meal, with or without milk, or for the assembly of the meal. [47 FR 36527, Aug. 20, 1982, as amended at 53 FR 52594, Dec. 28, 1988; 83 FR 63791, Dec. 12, 2018; 88 FR 57857, Aug. 23, 2023] § 226.22 Procurement standards. (a) General. (b) Compliance. (1) Procurements by public institutions comply with applicable State or local laws and standards set forth in 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR parts 400 and 415; and (2) Procurements by private nonprofit institutions comply with standards set forth in 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR parts 400 and 415. (c) Geographic preference. (2) For the purpose of applying the optional geographic preference in paragraph (c)(1) of this section, “unprocessed locally grown or locally raised agricultural products” means only those agricultural products that retain their inherent character. The effects of the following food handling and preservation techniques will not be considered as changing an agricultural product into a product of a different kind or character: Cooling; refrigerating; freezing; size adjustment made by peeling, slicing, dicing, cutting, chopping, shucking, and grinding; forming ground products into patties without any additives or fillers; drying/dehydration; washing; packaging (such as placing eggs in cartons), vacuum packing and bagging (such as placing vegetables in bags or combining two or more types of vegetables or fruits in a single package); addition of ascorbic acid or other preservatives to prevent oxidation of produce; butchering livestock and poultry; cleaning fish; and the pasteurization of milk. [88 FR 57857, Aug. 23, 2023, as amended at 89 FR 32092, Apr. 25, 2024] § 226.23 Free and reduced-price meals. (a) The State agency must not enter into a Program agreement with a new institution until the institution has submitted, and the State agency has approved, a written policy statement concerning free and reduced-price meals to be used in all child and adult day care facilities under its jurisdiction, as described in paragraph (b) of this section. The State agency must not require an institution to revise its free and reduced-price policy statement or its nondiscrimination statement unless the institution makes a substantive change to either policy. Pending approval of a revision to these statements, the existing policy must remain in effect. (b) Institutions that may not serve meals at a separate charge to children (including emergency shelters, at-risk afterschool care centers, and sponsoring organizations of emergency shelters, at-risk afterschool care centers, and day care homes) and other institutions that elect to serve meals at no separate charge must develop a policy statement consisting of an assurance to the State agency that all participants are served the same meals at no separate charge, regardless of race, color, national origin, sex, age, or disability and that there is no discrimination in the course of the food service.This statement shall also contain an assurance that there will be no identification of children in day care homes in which meals are reimbursed at both the tier I and tier II reimbursement rates, and that the sponsoring organization will not make any free and reduced price eligibility information concerning individual households available to day care homes and will otherwise limit the use of such information to persons directly connected with the administration and enforcement of the Program. (c) Independent centers and sponsoring organizations of centers which charge separately for meals shall develop a policy statement for determining eligibility for free and reduced-price meals which shall include the following: (1) The specific criteria to be used in determining eligibility for free and reduced-price meals. The institution's standards of eligibility shall conform to the Secretary's income standards; (2) A description of the method or methods to be used in accepting applications from families for free and reduced-price meals. These methods will ensure that applications are accepted from households on behalf of a foster child and children who receive SNAP, FDPIR, or TANF assistance, or for adult participants who receive SNAP, FDPIR, SSI, or Medicaid assistance; (3) A description of the method or methods to be used to collect payments from those participants paying the full or reduced price of the meal which will protect the anonymity of the participants receiving a free or reduced-price meal; (4) An assurance which provides that the institution will establish a hearing procedure for use when benefits are denied or terminated as a result of verification: (i) A simple, publicly announced method for a family to make an oral or written request for a hearing; (ii) An opportunity for the family to be assisted or represented by an attorney or other person in presenting its appeal; (iii) An opportunity to examine, prior to and during the hearing, the documents and records presented to support the decision under appeal; (iv) That the hearing shall be held with reasonable promptness and convenience to the family and that adequate notice shall be given to the family as to the time and place of the hearing; (v) An opportunity for the family to present oral or documentary evidence and arguments supporting its position; (vi) An opportunity for the family to question or refute any testimony or other evidence and to confront and cross-examine any adverse witnesses; (vii) That the hearing shall be conducted and the determination made by a hearing official who did not participate in making the initial decision; (viii) The determination of the hearing official shall be based on the oral and documentary evidence presented at the hearing and made a part of that hearing record; (ix) That the family and any designated representatives shall be notified in writing of the decision of the hearing official; (x) That a written record shall be prepared with respect to each hearing, which shall include the decision under appeal, any documentary evidence and a summary of any oral testimony presented at the hearing, the decision of the hearing official, including the reasons therefor, and a copy of the notification to the family of the decision of the hearing official; and (xi) That such written record of each hearing shall be preserved for a period of three years and shall be available for examination by the family or its representatives at any reasonable time and place during such period; (5) An assurance that there will be no overt identification of free and reduced-price meal recipients and no discrimination against any participant on the basis of race, color, national origin, sex, age, or handicap; (6) An assurance that the charges for a reduced-price lunch or supper will not exceed 40 cents, that the charge for a reduced-price breakfast will not exceed 30 cents, and that the charge for a reduced-price snack will not exceed 15 cents. (d) Each institution shall annually provide the information media serving the area from which the institution draws its attendance with a public release, unless the State agency has issued a Statewide media release on behalf of all institutions. All media releases issued by institutions other than emergency shelters, at-risk afterschool care centers, and sponsoring organizations of emergency shelters, at-risk afterschool care centers, or day care homes must include the Secretary's Income Eligibility Guidelines for Free and Reduced-Price Meals. The release issued by all emergency shelters, at-risk afterschool care centers, and sponsoring organizations of emergency shelters, at-risk afterschool care centers, or day care homes, and by other institutions which elect not to charge separately for meals, must announce the availability of meals at no separate charge. The release issued by child care institutions which charge separately for meals shall announce the availability of free and reduced-price meals to children meeting the approved eligibility criteria. The release issued by child care institutions shall also announce that a foster child, or a child who is a member of a household receiving SNAP, FDPIR, or TANF assistance, or a Head Start participant is automatically eligible to receive free meal benefits. The release issued by adult day care centers which charge separately for meals shall announce the availability of free and reduced-price meals to participants meeting the approved eligibility criteria. The release issued by adult day care centers shall also announce that adult participants who are members of SNAP or FDPIR households or who are SSI or Medicaid participants are automatically eligible to receive free meal benefits. All releases shall state that meals are available to all participants without regard to race, color, national origin, sex, age or disability. (e)(1) Application for free and reduced-price meals. (ii) Except as provided in paragraph (e)(1)(iv) of this section, the application for children shall contain a request for the following information: (A) The names of all children for whom application is made; (B) The names of all other household members; (C) The last four digits of the social security number of the adult household member who signs the application, or an indication that the adult does not possess a social security number. (D) The income received by each household member identified by source of income (such as earnings, wages, welfare, pensions, support payments, unemployment compensation, social security, and other cash income received or withdrawn from any other source, including savings, investments, trust accounts, and other resources); (E) A statement which includes substantially the following information: ( 1 ( 2 (F) The signature of an adult member of the household which appears immediately below a statement that the person signing the application certifies that all information furnished is true and correct; that the application is being made in connection with the receipt of Federal funds; that Program officials may verify the information on the application; and that the deliberate misrepresentation of any of the information on the application may subject the applicant to prosecution under applicable State and Federal criminal statutes. (iii) Except as provided in paragraph (e)(1)(v) of this section, the application for adults shall contain a request for the following information: (A) The names of all adults for whom application is made; (B) The names of all other household members; (C) The last four digits of the social security number of the adult household member who signs the application, or an indication that the adult does not possess a social security number. (D) The income received by source of income (such as earnings, wages, welfare, pensions, support payments, unemployment compensation, social security, and other cash income received or withdrawn from any other source, including savings, investments, trust accounts and other resources); (E) A statement which includes substantially the following information: “The Richard B. Russell National School Lunch Act requires the information on this meal benefit form. You do not have to give the information, but if you do not, we cannot approve the participant for free or reduced-price meals. You must include the last four digits of the social security number of the adult household member who signs the meal benefit form. The last four digits of the social security number are not required when you list a Supplemental Nutrition Assistance Program (SNAP), Food Distribution Program on Indian Reservations (FDPIR) or other FDPIR identifier, SSI or Medicaid case number for the participant receiving meal benefits or when you indicate that the adult household member signing the application does not have a social security number. We will use your information to determine if the participant is eligible for free or reduced-price meals, and for administration and enforcement of the CACFP;” and (F) The signature of an adult member of the household which appears immediately below a statement that the person signing the application certifies that all information furnished is true and correct; that the application is being made in connection with the receipt of Federal funds; that Program officials may verify the information on the application; and that the deliberate misrepresentation of any of the information on the application may subject the applicant to prosecution under applicable State and Federal criminal statutes. (iv) If they so desire, households applying on behalf of children who are members of SNAP or FDPIR households who are TANF recipients may apply under this paragraph rather than under the procedures described in paragraph (e)(1)(ii) of this section. In addition, households of children enrolled in tier II day care homes who are participating in a Federally or State supported child care or other benefit program with an income eligibility limit that does not exceed the eligibility standard for free and reduced price meals may apply under this paragraph rather than under the procedures described in paragraph (e)(1)(ii) of this section. Households applying on behalf of children who are members of SNAP or FDPIR households; children who are TANF recipients; or for children enrolled in tier II day care homes, other qualifying Federal or State program, shall be required to provide: (A) For the child(ren) for whom automatic free meal eligibility is claimed, their names and SNAP, FDPIR, or TANF case number; or for the households of children enrolled in tier II day care homes, their names and other program case numbers (if the program utilizes case numbers); and (B) The signature of an adult member of the household as provided for in paragraph (e)(1)(ii)(G) of this section. In accordance with paragraph (e)(1)(ii)(F) of this section, if a case number is provided, it may be used to verify the current certification for the child(ren) for whom free meal benefits are claimed. Whenever households apply for children not receiving SNAP, FDPIR, or TANF benefits; or for tier II homes, other qualifying Federal or State program benefits, they must apply in accordance with the requirements set forth in paragraph (e)(1)(ii) of this section. (v) If they so desire, households applying on behalf of adults who are members of SNAP or FDPIR households or SSI or Medicaid participants may apply for free meal benefits under this paragraph rather than under the procedures described in paragraph (e)(1)(iii) of this section. Households applying on behalf of adults who are members of SNAP or FDPIR households or SSI or Medicaid participants shall be required to provide: (A) The names and SNAP or FDPIR case numbers or SSI or Medicaid assistance identification numbers of the adults for whom automatic free meal eligibility is claimed; and (B) The signature of an adult member of the household as provided in paragraph (e)(1)(iii)(F) of this section. In accordance with paragraph (e)(1)(iii)(G) of this section, if a SNAP or FDPIR case number or SSI or Medicaid assistance identification number is provided, it may be used to verify the current SNAP, FDPIR, SSI, or Medicaid certification for the adult(s) for whom free meal benefits are being claimed. Whenever households apply for benefits for adults not receiving SNAP, FDPIR, SSI, or Medicaid benefits, they must apply in accordance with the requirements set forth in paragraph (e)(1)(iii) of this section. (vi) A sponsoring organization of day care homes may identify enrolled children eligible for free and reduced price meals (i.e., tier I rates), without distributing free and reduced price applications, by documenting the child's or household's participation in or receipt of benefits under a Federally or State supported child care or other benefit program with an income eligibility limit that does not exceed the eligibility standard for free and reduced price meals. Documentation shall consist of official evidence, available to the tier II day care home or sponsoring organization, and in the possession of the sponsoring organization, of the household's participation in the qualifying program. (vii) If a tier II day care home elects to assist in collecting and transmitting the applications to the sponsoring organization, it is the responsibility of the sponsoring organization to establish procedures to ensure the provider does not review or alter the application. The household consent form must explain that: (A) The household is not required to complete the income eligibility form in order for their children to participate in CACFP: (B) The household may return the application to either the sponsoring organization or the day care home provider; (C) By signing the letter and giving it to the day care home provider, the household has given the day care home provider written consent to collect and transmit the household's application to the sponsoring organization; and (D) The application will not be reviewed by the day care home provider. (2) Letter to households. (i) The income standards for reduced-price meals, with an explanation that households with incomes less than or equal to the reduced-price standards would be eligible for free or reduced-price meals (the income standards for free meals shall not (ii) How a participant's household may make application for free or reduced-price meals; (iii) An explanation that an application for free or reduced price benefits cannot be approved unless it contains complete “documentation” as defined in § 226.2. (iv) The statement: “In the operation of child feeding programs, no person will be discriminated against because of race, color, national origin, sex, age, or disability”; (v) A statement to the effect that participants having family members who become unemployed are eligible for free or reduced-price meals during the period of unemployment, provided that the loss of income causes the family income during the period of unemployment to be within the eligibility standards for those meals; (vi) An explanation that households receiving free and reduced-price meals must notify appropriate institution officials during the year of any decreases in household size or increases in income of over $50 per month or $600 per year or— (A) In the case of households of enrolled children that provide a SNAP, FDPIR or TANF case number to establish a child's eligibility for free meals, any termination in the child's certification to participate in the SNAP, FDPIR or TANF Programs, or (B) In the case of households of adult participants that provide a food stamp or FDPIR case number or an SSI or Medicaid assistance identification number to establish an adult's eligibility for free meals, any termination in the adult's certification to participate in the SNAP, FDPIR, SSI or Medicaid Programs. (3) In addition to the information listed in paragraph (e)(2) of this section pricing institutions must include in their letter to household an explanation that indicates that: (i) The information in the application may be verified at any time during the year; and (ii) how a family may appeal a decision of the institution to deny, reduce, or terminate benefits as described under the hearing procedure set forth in paragraph (c)(4) of this section. (4) Determination of eligibility. (i) The reason for the denial of benefits, e.g., income in excess of allowable limits or incomplete application; (ii) Notification of the right to appeal; (iii) Instructions on how to appeal; and (iv) A statement reminding the household that they may reapply for free or reduced-price benefits at any time during the year, The reasons for ineligibility shall be properly documented and retained on file at the institution. (5) Appeals of denied benefits. (f) Free, reduced-price and paid meal eligibility figures must be reported by institutions to State agencies at least once each year and shall be based on current family-size and income information of enrolled participants. Such information shall be no more than 12 months old. (g) Sponsoring organizations for family day care homes shall ensure that no separate charge for food service is imposed on families of children enrolled in participating family day care homes. (h) Verification of eligibility. (1) Verification procedures for nonpricing programs. (i) The application has been correctly and completely executed by the household; (ii) The institution has correctly determined and classified the eligibility of enrolled participants for free or reduced price meals or, for family day care homes, for tier I or tier II reimbursement, based on the information included on the application submitted by the household; (iii) The institution has accurately reported to the State agency the number of enrolled participants meeting the criteria for free or reduced price meal eligibility or, for day care homes, the number of participants meeting the criteria for tier I reimbursement, and the number of enrolled participants that do not meet the eligibility criteria for those meals; and (iv) In addition, the State agency may conduct further verification of the information provided by the household on the approved application for program meal eligibility. If this effort is undertaken, the State agency shall conduct this further verification for nonpricing programs in accordance with the procedures described in paragraph (h)(2) of this section. (2) Verification procedures for pricing programs. (A) If a SNAP, FDPIR or TANF case number is provided for a child, verification for such child shall include only confirmation that the child is included in a currently certified SNAP or FDPIR household or is a TANF recipient; or (B) If a SNAP or FDPIR case number or SSI or Medicaid assistance identification number is provided for an adult, verification for such adult shall include only confirmation that the adult is included in a currently certified SNAP or FDPIR household or is currently certified to receive SSI or Medicaid benefits. (ii) State agencies shall perform verification on a random sample of no less than 3 percent of the approved free and reduced price applications in an institution which is a pricing program. (iii) Households shall be informed in writing that they have been selected for verification and they are required to submit the requested verification information to confirm their eligibility for free or reduced-price benefits by such date as determined by the State agency. Those households shall be informed of the type or types of information and/or documents acceptable to the State agency and the name and phone number of an official who can answer questions and assist the household in the verification effort. (iv) Households of enrolled children selected for verification shall also be informed that if they are currently certified to participate in SNAP, FDPIR or TANF they may submit proof of that certification in lieu of income information. In those cases, such proof shall consist of a current “Notice of Eligibility” for SNAP, FDPIR or TANF benefits or equivalent official documentation issued by a SNAP, Indian Tribal Organization, or welfare office which shows that the children are members of households or assistance units currently certified to participate in SNAP, FDPIR or TANF. An identification card for any of these programs is not acceptable as verification unless it contains an expiration date. Households of enrolled adults selected for verification shall also be informed that if they are currently certified to participate in SNAP or FDPIR or SSI or Medicaid Programs, they may submit proof of that certification in lieu of income information. In those cases, such proof shall consist of: (A) A current “Notice of Eligibility” for SNAP or FDPIR benefits or equivalent official documentation issued by a SNAP, Indian Tribal Organization, or welfare office which shows that the adult participant is a member of a household currently certified to participate in the SNAP Program or FDPIR. An identification card is not acceptable as verification unless it contains an expiration date; or (B) Official documentation issued by an appropriate SSI or Medicaid office which shows that the adult participant currently receives SSI or Medicaid assistance. An identification card is not acceptable as verification unless it contains an expiration date. All households selected for verification shall be advised that failure to cooperate with verification efforts will result in a termination of benefits. (v) Sources of information for verification may include written evidence, collateral contacts, and/or systems of records. (A) Written evidence (B) Collateral contact (C) Systems of records (vi) Verification by State agencies of receipt of SNAP, FDPIR, TANF, SSI or Medicaid benefits shall be limited to a review to determine that the period of eligibility is current. If the benefit period is found to have expired, or if the household's certification has been terminated, the household shall be required to document their income eligibility. (vii) The State agency may work with the institution to verify the documentation submitted by the household on the application; however, the responsibility to complete the verification process may not be delegated to the institution. (viii) If a household refuses to cooperate with efforts to verify, or the verification of income indicates that the household is ineligible to receive benefits or is eligible to receive reduced benefits, the State agency shall require the pricing program institution to terminate or adjust eligibility in accordance with the following procedures. Institution officials shall immediately notify families of the denial of benefits in accordance with paragraphs (e)(4) and (e)(5) of this section. Advance notification shall be provided to families which receive a reduction or termination of benefits 10 calendar days prior to the actual reduction or termination. The 10-day period shall begin the day the notice is transmitted to the family. The notice shall advise the household of: (A) The change; (B) the reasons for the change; (C) notification of the right to appeal the action and the date by which the appeal must be requested in order to avoid a reduction or termination of benefits; (D) instructions on how to appeal; and (E) the right to reapply at any time during the year. The reasons for ineligibility shall be properly documented and retained on file at the institution. (ix) When a household disagrees with an adverse action which affects its benefits and requests a fair hearing, benefits shall be continued as follows while the household awaits the hearing: (A) Households which have been approved for benefits and which are subject to a reduction or termination of benefits later in the same year shall receive continued benefits if they appeal the adverse action within the 10-day advance notice period; and (B) Households which are denied benefits upon application shall not received benefits. (3) State agencies shall inform institution officials of the results of the verification effort and the action which will be taken in response to the verification findings. This notification shall be made in accordance with the procedures outlined in § 226.14(a). (4) If the verification results disclose that an institution has inaccurately classified or reported the number of participants eligible for free, reduced-price or paid meals, the State agency shall adjust institution rates of reimbursement retroactive to the month in which the incorrect eligibility figures were reported by the institution to the State agency. (5) If the verification results disclose that a household has not reported accurate documentation on the application which would support continued eligibility for free or reduced-price meals, the State agency shall immediately adjust institution rates of reimbursement. However, this rate adjustment shall not become effective until the affected households have been notified in accordance with the procedures of paragraph (h)(2)(vi) of this section and any ensuing appeals have been heard as specified in paragraph (h)(2)(viii) of this section. (6) Verification procedures for sponsoring organizations of day care homes. (i) Disclosure of children's free and reduced price meal eligibility information to certain programs and individuals without parental consent. (1) Persons authorized to receive eligibility information. (2) Disclosure of children's names and free or reduced price meal eligibility status. (i) A Federal education program; (ii) A State health program or State education program administered by the State or local education agency; (iii) A Federal, State, or local means-tested nutrition program with eligibility standards comparable to the National School Lunch Program (i.e., food assistance programs for households with incomes at or below 185 percent of the Federal poverty level); or (iv) A third party contractor assisting in verification of eligibility efforts by contacting households who fail to respond to requests for verification of their eligibility. (3) Disclosure of all eligibility information. (i) Persons directly connected with the administration or enforcement of programs authorized under the Richard B. Russell National School Lunch Act or the Child Nutrition Act of 1966. This means that all eligibility information obtained for the Child and Adult Care Food Program may be disclosed to persons directly connected with administering or enforcing regulations under the National School Lunch Program, Special Milk Program, School Breakfast Program, Summer Food Service Program, and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) (Parts 210, 215, 220, 225 and 246, respectively, of this chapter); (ii) The Comptroller General of the United States for purposes of audit and examination; and (iii) Federal, State, and local law enforcement officials for the purpose of investigating any alleged violation of the programs listed in paragraphs (i)(2) and (i)(3) of this section. (4) Use of free and reduced price meals eligibility information by programs other than Medicaid or the State Children's Health Insurance Program (SCHIP). (j) Disclosure of children's free or reduced price meal eligibility information to Medicaid and/or SCHIP, unless parents decline. (1) The State agency must ensure that: (i) The child care institution and health insurance program officials have a written agreement that requires the health insurance program agency to use the eligibility information to seek to enroll children in Medicaid and SCHIP; and (ii) Parents/guardians are notified that their eligibility information may be disclosed to Medicaid or SCHIP and given an opportunity to decline to have their children's eligibility information disclosed, prior to any disclosure. (2) Use of children's free and reduced price meal eligibility information by Medicaid/SCHIP. (k) Notifying households of potential uses and disclosures of children's free and reduced price meal eligibility information. (1) For disclosures to programs, other than Medicaid or SCHIP, that are permitted access to children's eligibility information, without parent/guardian consent, the State agency or child care institution, as appropriate, must notify parents/guardians at the time of application that their children's free or reduced price meal eligibility information may be disclosed. The State agency or child care institution, as appropriate, must add substantially the following statement to the statement required under paragraph (e)(1)(ii)(F) of this section, “We may share your eligibility information with education, health, and nutrition programs to help them evaluate, fund, or determine benefits for their programs; auditors for program reviews; and law enforcement officials to help them look into violations of program rules.” For children determined eligible for free meals through direct certification, the notice of potential disclosure may be included in the document informing parents/guardians of their children's eligibility for free meals through direct certification. (2) For disclosure to Medicaid or SCHIP, the State agency or child care institution, as appropriate, must notify parents/guardians that their children's free or reduced price meal eligibility information will be disclosed to Medicaid and/or SCHIP unless the parent/guardian elects not to have their information disclosed and notifies the State agency or child care institution, as appropriate, by a date specified by the State agency or child care institution, as appropriate. Only the parent or guardian who is a member of the household or family for purposes of the free and reduced price meal application may decline the disclosure of eligibility information to Medicaid or SCHIP. The notification must inform parents/guardians that they are not required to consent to the disclosure, that the information, if disclosed, will be used to identify eligible children and seek to enroll them in Medicaid or SCHIP, and that their decision will not affect their children's eligibility for free or reduced price meals. The notification may be included in the letter/notice to parents/guardians that accompanies the free and reduced price meal application, on the application itself or in a separate notice provided to parents/guardians. The notice must give parents/guardians adequate time to respond if they do not want their information disclosed. The State agency or child care institution, as appropriate, must add substantially the following statement to the statement required under paragraph (e)(1)(ii)(F) of this section, “We may share your information with Medicaid or the State Children's Health Insurance Program, unless you tell us not to. The information, if disclosed, will be used to identify eligible children and seek to enroll them in Medicaid or SCHIP.” For children determined eligible for free meals through direct certification, the notice of potential disclosure and opportunity to decline the disclosure may be included in the document informing parents/guardians of their children's eligibility for free meals through direct certification process. (l) Other disclosures. (1) The consent must identify the information that will be shared and how the information will be used. (2) There must be a statement informing parents and guardians that failing to sign the consent will not affect the child's eligibility for free or reduced price meals and that the individuals or programs receiving the information will not share the information with any other entity or program. (3) Parents/guardians must be permitted to limit the consent only to those programs with which they wish to share information. (4) The consent statement must be signed and dated by the child's parent or guardian who is a member of the household for purposes of the free and reduced price meal application. (m) Agreements with programs/individuals receiving children's free or reduced price meal eligibility information. (1) The State agency or child care institution, as appropriate, should have a written agreement or MOU with programs or individuals receiving eligibility information, prior to disclosing children's free and reduced price meal eligibility information. The agreement or MOU should include information similar to that required for disclosures to Medicaid and SCHIP specified in paragraph (m)(2) of this section. (2) For disclosures to Medicaid or SCHIP, the State agency or child care institution, as appropriate, must have a written agreement with the State or local agency or agencies administering Medicaid or SCHIP prior to disclosing children's free or reduced price meal eligibility information to those agencies. At a minimum, the agreement must: (i) Identify the health insurance program or health agency receiving children's eligibility information; (ii) Describe the information that will be disclosed; (iii) Require that the Medicaid or SCHIP agency use the information obtained and specify that the information must be used to seek to enroll children in Medicaid or SCHIP; (iv) Require that the Medicaid or SCHIP agency describe how they will use the information obtained; (v) Describe how the information will be protected from unauthorized uses and disclosures; (vi) Describe the penalties for unauthorized disclosure; and (vii) Be signed by both the Medicaid or SCHIP program or agency and the State agency or child care institution, as appropriate. (n) Penalties for unauthorized disclosure or misuse of children's free and reduced price meal eligibility information. [47 FR 36527, Aug. 20, 1982] Editorial Note: For Federal Register www.govinfo.gov. Subpart F—Food Service Equipment Provisions § 226.24 Property management requirements. Institutions and administering agencies shall follow the policies and procedures governing title, use, and disposition of equipment obtained by purchase, whose cost was acquired in whole or part with food service equipment assistance funds in accordance with 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable. [48 FR 41142, Sept. 14, 1983, as amended at 71 FR 39519, July 13, 2006; 81 FR 66492, Sept. 28, 2016] Subpart G—Other Provisions § 226.25 Other provisions. (a) Grant closeout procedures. (b) State requirements. (c) Value of assistance. (d) Maintenance of effort. (e) Fraud penalty. (f) Claims adjustment authority. (g) Program evaluations. (h) Drinking water. (i) Fines. (i) Failed to correct severe mismanagement of the Program; (ii) Disregarded a Program requirement of which the institution or its facility had been informed; or (iii) Failed to correct repeated violations of Program requirements. (2) FNS may direct the State agency to establish a fine against any institution when it has determined that the institution or its facility has committed one or more acts under paragraph (i)(1) of this section. (3) Funds used to pay a fine established under this paragraph must be derived from non-Federal sources. In calculating an assessment, the State agency must calculate the fine based on the amount of Program reimbursement earned by the institution or its facility for the most recent fiscal year for which full year data is available, provided that the fine does not exceed the equivalent of: (i) For the first fine, 1 percent of the amount of meal reimbursement earned for the fiscal year; (ii) For the second fine, 5 percent of the amount of meal reimbursement earned for the fiscal year; and (iii) For the third or subsequent fine, 10 percent of the amount of meal reimbursement earned for the fiscal year. (4) The State agency must inform FNS at least 30 days prior to establishing the fine under this paragraph. The State agency must send the institution written notification of the fine established under this paragraph and provide a copy of the notification to FNS. The notification must: (i) Specify the violations or actions which constitute the basis for the fine and indicate the amount of the fine; (ii) Inform the institution that it may appeal the fine and advise the institution of the appeal procedures established under § 226.6(k); (iii) Indicate the effective date and payment procedures should the institution not exercise its right to appeal within the specified timeframe. (5) Any institution subject to a fine under paragraph (i)(1) of this section may appeal the State agency's determination. In appealing a fine, the institution must submit to the State agency any pertinent information, explanation, or evidence addressing the Program violations identified by the State agency. Any institution seeking to appeal the State agency determination must follow State agency appeal procedures. (6) The decision of the State agency review official is final and not subject to further administrative or judicial review. Failure to pay a fine established under this paragraph may be grounds for suspension or termination. (7) Money received by the State agency as a result of a fine established under this paragraph against an institution and any interest charged in the collection of these fines must be remitted to FNS, and then remitted to the United States Treasury. [47 FR 36527, Aug. 20, 1982, as amended at 53 FR 52597, Dec. 28, 1988; 54 FR 13049, Mar. 30, 1989; 69 FR 53547, Sept. 1, 2004; 71 FR 39519, July 13, 2006; 72 FR 24183, May 2, 2007; 76 FR 37982, June 29, 2011; 81 FR 24383, Apr. 25, 2016; 81 FR 66492, Sept. 28, 2016; 88 FR 57858, Aug. 23, 2023; 90 FR 30826, May 12, 2025] § 226.26 Program information. Persons seeking information about this Program should contact their State administering agency or the appropriate FNSRO. The FNS website has contact information for State agencies at https://www.fns.usda.gov/fns-contacts https://www.fns.usda.gov/fns-regional-offices. [88 FR 57858, Aug. 23, 2023] § 226.27 Information collection/recordkeeping—OMB assigned control numbers. 7 CFR section where requirements are described Current OMB control number 226.3-226.4 0584-0055 226.6-226.10 0584-0055 226.14-226.16 0584-0055 226.23-226.24 0584-0055 [50 FR 53258, Dec. 31, 1985] Appendix A to Part 226—Alternate Foods for Meals Alternate Protein Products A. What are the criteria for alternate protein products used in the Child and Adult Care Food Program? 1. An alternate protein product used in meals planned under the provisions in § 226.20 must meet all of the criteria in this section. 2. An alternate protein product whether used alone or in combination with meat or meat alternate must meet the following criteria: a. The alternate protein product must be processed so that some portion of the non-protein constituents of the food is removed. These alternate protein products must be safe and suitable edible products produced from plant or animal sources. b. The biological quality of the protein in the alternate protein product must be at least 80 percent that of casein, determined by performing a Protein Digestibility Corrected Amino Acid Score (PDCAAS). c. The alternate protein product must contain at least 18 percent protein by weight when fully hydrated or formulated. (“When hydrated or formulated” refers to a dry alternate protein product and the amount of water, fat, oil, colors, flavors or any other substances which have been added). d. Manufacturers supplying an alternate protein product to participating schools or institutions must provide documentation that the product meets the criteria in paragraphs A.2. through c of this appendix. e. Manufacturers should provide information on the percent protein contained in the dry alternate protein product and on an as prepared basis. f. For an alternate protein product mix, manufacturers should provide information on: (1) The amount by weight of dry alternate protein product in the package; (2) Hydration instructions; and (3) Instructions on how to combine the mix with meat or other meat alternates. B. How are alternate protein products used in the Child and Adult Care Food Program? 1. Schools, institutions, and service institutions may use alternate protein products to fulfill all or part of the meat/meat alternate component discussed in § 226.20. 2. The following terms and conditions apply: a. The alternate protein product may be used alone or in combination with other food ingredients. Examples of combination items are beef patties, beef crumbles, pizza topping, meat loaf, meat sauce, taco filling, burritos, and tuna salad. b. Alternate protein products may be used in the dry form (nonhydrated), partially hydrated or fully hydrated form. The moisture content of the fully hydrated alternate protein product (if prepared from a dry concentrated form) must be such that the mixture will have a minimum of 18 percent protein by weight or equivalent amount for the dry or partially hydrated form (based on the level that would be provided if the product were fully hydrated). C. How are commercially prepared products used in the Child and Adult Care Food Program? Schools, institutions, and service institutions may use a commercially prepared meat or meat alternate product combined with alternate protein products or use a commercially prepared product that contains only alternate protein products. [65 FR 12442, Mar. 9, 2000] Appendix B to Part 226 [Reserved] Appendix C to Part 226—Child Nutrition (CN) Labeling Program 1. The Child Nutrition (CN) Labeling Program is a voluntary technical assistance program administered by the Food and Nutrition Service (FNS) in conjunction with the Food Safety and Inspection Service (FSIS), and Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA), and National Marine Fisheries Service of the U.S. Department of Commerce (USDC) for the Child Nutrition Programs. This program essentially involves the review of a manufacturer's recipe or product formulation to determine the contribution a serving of a commercially prepared product makes toward meal pattern requirements and a review of the CN label statement to ensure its accuracy. CN labeled products must be produced in accordance with all requirements set forth in this rule. 2. Products eligible for CN labels are as follows: (a) Commercially prepared food products that contribute significantly to the meat/meat alternate component of meal pattern requirements of 7 CFR 210.10, 225.21, and 226.20 and are served in the main dish. (b) Juice drinks and juice drink products that contain a minimum of 50 percent full-strength juice by volume. 3. For the purpose of this appendix the following definitions apply: (a) CN label (b) The CN logo (c) The CN label statement (1) The product identification number (assigned by FNS), (2) The statement of the product's contribution toward meal pattern requirements of 7 CFR 210.10, 220.8, 225.21, and 226.20. The statement shall identify the contribution of a specific portion of a meat/meat alternate product toward the meat/meat alternate, bread/bread alternate, and/or vegetable/fruit component of the meal pattern requirements. For juice drinks and juice drink products the statement shall identify their contribution toward the vegetable/fruit component of the meal pattern requirements, (3) Statement specifying that the use of the CN logo and CN statement was authorized by FNS, and (4) The approval date. For example: (d) Federal inspection 4. Food processors or manufacturers may use the CN label statement and CN logo as defined in paragraph 3 (b) and (c) under the following terms and conditions: (a) The CN label must be reviewed and approved at the national level by the Food and Nutrition Service and appropriate USDA or USDC Federal agency responsible for the inspection of the product. (b) The CN labeled product must be produced under Federal inspection by USDA or USDC. The Federal inspection must be performed in accordance with an approved partial or total quality control program or standards established by the appropriate Federal inspection service. (c) The CN label statement must be printed as an integral part of the product label along with the product name, ingredient listing, the inspection shield or mark for the appropriate inspection program, the establishment number where appropriate, and the manufacturer's or distributor's name and address. (1) The inspection marking for CN labeled non-meat, non-poultry, and non-seafood products with the exception of juice drinks and juice drink products is established as follows: (d) Yields for determining the product's contribution toward meal pattern requirements must be calculated using the Food Buying Guide for Child Nutrition Programs 5. In the event a company uses the CN logo and CN label statement inappropriately, the company will be directed to discontinue the use of the logo and statement and the matter will be referred to the appropriate agency for action to be taken against the company. 6. Products that bear a CN label statement as set forth in paragraph 3(c) carry a warranty. This means that if a food service authority participating in the child nutrition programs purchases a CN labeled product and uses it in accordance with the manufacturer's directions, the school or institution will not have an audit claim filed against it for the CN labeled product for noncompliance with the meal pattern requirements of 7 CFR 210.10, 220.8, 225.21, and 226.20. If a State or Federal auditor finds that a product that is CN labeled does not actually meet the meal pattern requirements claimed on the label, the auditor will report this finding to FNS. FNS will prepare a report of the findings and send it to the appropriate divisions of FSIS and AMS of the USDA, National Marine Fisheries Services of the USDC, Food and Drug Administration, or the Department of Justice for action against the company. Any or all of the following courses of action may be taken: (a) The company's CN label may be revoked for a specific period of time; (b) The appropriate agency may pursue a misbranding or mislabeling action against the company producing the product; (c) The company's name will be circulated to regional FNS offices; (d) FNS will require the food service program involved to notify the State agency of the labeling violation. 7. FNS is authorized to issue operational policies, procedures, and instructions for the CN Labeling Program. To apply for a CN label and to obtain additional information on CN label application procedures write to: CN Labels, U.S. Department of Agriculture, Food and Nutrition Service, Nutrition and Technical Services Division, 3101 Park Center Drive, Alexandria, Virginia 22302. [49 FR 18457, May 1, 1984; 49 FR 45109, Nov. 15, 1984]