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Food Program Benefits for Child Care Centers


	What is the Food Program? Benefits for Family Child Care Homes Benefits for Child Care Centers USDA Meal Pattern Other Information Earn Extra Money for Your Child Care

How does the food program help a child care center?

Any non profit child care center can participate in the Child and Adult Care Food Program (CACFP), and any for profit center can participate as long as 25% of the children you serve come from low income families.

What do you get?

The quick answer: cash reimbursement.

The USDA will reimburse a child (or adult day) care center for a portion of their food costs as long as the center serves meals that meet federal standards. So participating in the CACFP is an easy way to bring in more money without increasing the fees you charge your parents.

These payments, typically referred to as meal reimbursements, are made based on a formula for the number of children you feed at a given meal times the rate of reimbursement for that meal. The rate of reimbursement varies based on several factors, including the type of meal served and income levels of the children. Specifically, there are three different levels of meal reimbursement defined by the USDA:

Breakfast
Lunch & Dinner/Supper
Snacks (a morning snack, afternoon snack, and evening snack)

In the lower 48 states, for example, the highest level of reimbursement for lunch & dinner is $2.47 per child served (for the 2007-2008 fiscal year, which runs July 2007 - June 2008). So if you serve 60 children at a lunch, you can receive $148.20 for that lunch! (In Alaska and Hawaii, the reimbursement is even higher).

However, the rates vary based on the income levels of the children. The USDA has defined three different income levels:

Free - The highest level of reimbursement, this is given to children whose household income is less than 130% of the poverty level (about $26k per year for a family of four).
Reduced - The middle level of reimbursement, this is given to children whose household income is less than 185% of the poverty level (about $38k per year for a family of four).
Paid / Base / Denied - The lowest level of reimbursement, this is given for all other children.

So each time you enroll a child, you'll have to have the child's parents fill out an income eligibility application. In for-profit centers, at least 25% of those children must be in the Free or Reduced category to participate (so even if the rest of the parents choose not to fill out the income information, you'll still be able to participate and get reimbursement for all children). In non-profit centers, none of the children need to qualify as free or reduced. When you sign up with a Food Program Sponsor, you'll get a lot of training on exactly how to handle these income eligibility applications, so you can let them worry about the details.

For specific information on the reimbursement rates, click here.

Average Monthly Paycheck

The amount you get paid each month will vary depending on the number of meals & snacks you serve, and depending upon the mix of incomes of the children you serve. Child care centers offering drop-in care and serving 6 meals & snacks a day to 200+ children who come and go throughout the day can obviously expect to receive a much bigger check each month than those serving to a smaller number of children for just one or two meals.

However, let's make a few assumptions and show you how much you would be paid. Assume:

You serve 60 children:
- 10 children are classified by income as Free
- 20 children are classified by income as Reduced
- 30 children don't classify as either, so fall into the Base category
Each is served a Breakfast, Lunch, and afternoon snack
You're open each weekday

In this scenario, you'd receive $1,782.90 each month. Larger centers serving more low income children can see reimbursements as high as $10,000 per month.

What do you have to do?

Participating in the Food Program is almost a no-brainer for child care centers. After all, who doesn't want a few thousand extra dollars each month? But in order to get that money, you do have to do some work.

As a child care center, you can participate in the Food Program by signing an agreement directly with your state agency. This makes you an independent center. The nice thing about this arrangement is that you get to keep 100% of the reimbursement rates. But that is really the only advantage to being an independent center. You are also legally responsible for following every CACFP rule -- no matter what -- so that means you must have someone on staff that knows all those Food Program rules, and is an expert at handling paperwork and bureaucracy. The state agency will come out and audit your center once every three years (and sometimes more often), and if they find you've made any mistakes, they will demand that you repay a portion of the funds you've received from the Food Program over the years. This could amount to tens of thousands of dollars, and is unfortunately not as rare as it should be. And if the state agency views the mistake as serious, they can take steps to bar your center from receiving other federal funds.

Alternatively, you can participate in the CACFP by signing up with a Sponsoring organization. Sponsoring organizations will assume all of your liability, so you don't have to worry about paying funds back, or about any other potential liability introduced by paperwork mistakes. They will also visit your center relatively frequently, both to help train your staff, and to make sure you're following their procedures. In exchange, they can keep up to 15% of your center's reimbursement (different Sponsors will charge different admin fee percentages).

Regardless whether you sign up independently or participate with a Sponsor, you must keep daily attendance records and counts of children served at individual meals, must get specific food program enrollments filled out for each child at your center, and must note on a daily basis what foods are being served (along with the quantities of food prepared). Minute Menu makes this much easier, by providing a very easy software interface to ensure all these records are kept properly, and submits that to your Sponsor electronically.

How do you get started?

First, you must decide whether you're going to participate independently or with a Sponsor. If you do choose to go with a Sponsor, your Sponsor will train you on all the details of the Food Program, including all the details of what foods to serve at each meal, how to do your paperwork, and more. Typically, several Sponsors serve the same area, so you can pick any one you like. When choosing a Sponsor, consider the following:

What is the admin fee rate the Sponsor charges? Obviously, the lower, the better.
Does the Sponsor take the time necessary to explain all your paperwork requirements, proper menu planning tips, and the USDA meal pattern in detail?
How available are they for questions or concerns?
Do they use Minute Menu? If they do, you'll be able to review all your claim details on-line, and know what your monthly payments are soon as they've been calculated by the Sponsor. In addition, you'll have a very easy to use paperwork system that helps make sure you've done all paperwork properly. If they don't, you may have a greater likelihood of making paperwork mistakes (which result in reductions to your meal reimbursement).

Your state Food Program agency should be able to get you a list of all the Sponsors who serve your area. (Typically, the state food program agency is different than the state child care licensing agencies; but if you call your state child care licensing agency, they will probably be able to refer you to your state Food Program agency. Click here for a list of state food program agencies.) Also, check back on this web site soon, as we hope to add a Sponsor search feature later this year.