[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR226.18]

[Page 218-220]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 226--CHILD AND ADULT CARE FOOD PROGRAM--Table of Contents
 
                    Subpart E--Operational Provisions
 
Sec. 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 Sec. 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) 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 its normal hours of child care 
operations. For day care homes participating July 29, 2002, the 
sponsoring organization must amend the current agreement no later than 
August 29, 2002;
    (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 agreement with each 
sponsored day care home which specifies the rights and responsibilities 
of both parties. 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, and 
the Department to visit the day care home and review its meal service 
and records during its hours of child care operations;
    (2) The responsibility of the sponsoring organization to train the 
day care home's staff in program requirements;
    (3) The responsibility of the day care home to prepare and serve 
meals which meet the meal patterns specified in Sec. 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;
    (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;

[[Page 219]]

    (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: electing to have the sponsoring organization attempt to 
identify all income-eligible children enrolled in the day care home, 
through collection of free and reduced price applications and/or 
possession by the sponsoring organization or day care home of other 
proof of a child or household's participation in a categorically 
eligible program, and receiving tier I rates of reimbursement for the 
meals served to identified income-eligible children; 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 contained in 
Sec. 226.23(e)(1), and receiving tier I rates of reimbursement for the 
meals served to these children; or 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 State agency's policy to restrict transfers of day care 
homes between sponsoring organizations;
    (14) 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;
    (15) 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 Sec. 226.6(1)(2); and
    (16) 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 shall serve one or more of the following meal 
types:
    (1) Breakfast,
    (2) Lunch,
    (3) Supper and
    (4) Supplemental food.

Reimbursement shall not be claimed for more than two meals and one 
supplement 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 Sec. 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 shall maintain daily records of the number of 
children in attendance and the number of meals, by type, served to 
enrolled children. 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 Sec. 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

[[Page 220]]

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 Sec. 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, as amended by Amdt. 5, 49 FR 18989, May 4, 
1984; 50 FR 8580, Mar. 4, 1985; 52 FR 36907, Oct. 2, 1987; Amdt. 22, 55 
FR 1378, Jan. 14, 1990; 61 FR 25554, May 22, 1996; 62 FR 903, Jan. 7, 
1997; 63 FR 9105, Feb. 24, 1998; 63 FR 9729, Feb. 26, 1998; 64 FR 72261, 
Dec. 27, 1999; 67 FR 43493, June 27, 2002]