[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR226.13]

[Page 187-188]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 226--CHILD AND ADULT CARE FOOD PROGRAM--Table of Contents
 
                      Subpart D--Payment Provisions
 
Sec. 226.13  Food service payments to sponsoring organizations for day care homes.

    (a) Payments shall 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.
    (b) Each sponsoring organization shall report each month to the 
State agency the total number of meals, by type (breakfasts, lunches, 
suppers, and supplements) and by category (tier I and tier II), served 
to children enrolled in approved day care homes.
    (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, and as established by law 
and adjusted in accordance with Sec. 226.4. However, the rates for 
lunches and suppers shall be reduced by the value of commodities 
established under Sec. 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

[[Page 188]]

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]