[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: 7CFR226.9]

[Page 201]
 
                          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. 226.9  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. 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) The State agency shall 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 that 
annually, for each institution on the basis of the number of enrolled 
participants eligible for free, reduced-price, and paid meals; 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 
Sec. 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]

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