[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR226.15]

[Page 215-218]
 
                          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. 226.15  Institution provisions.


    (a) Tax exempt status. Except for proprietary title XIX and title XX 
centers, and sponsoring organizations of such centers, institutions must 
be public, or have tax exempt status under the Internal Revenue Code of 
1986.
    (b) New applications and renewals. Each institution must submit to 
the State agency with its application all information required for its 
approval as set forth in Sec. 226.6(b) and 226.6(f). Such information 
must demonstrate that a new institution has the administrative and 
financial capability to operate the Program in accordance with this part 
and with the performance standards set forth in Sec. 226.6(b)(1)(xvii), 
and that a renewing institution has the administrative and financial 
capability to operate the Program in accordance with this part and with 
the performance standards set forth in Sec. 226.6(b)(2)(vii).
    (c) Responsibility. Each institution shall accept final 
administrative and financial responsibility for Program operations. No 
institution may contract out for management of the Program.
    (d) Staffing. Each institution shall provide adequate supervisory 
and operational personnel for management and monitoring of the Program.
    (e) Recordkeeping. Each institution shall establish procedures to 
collect and maintain all program records required under this part, as 
well as any records required by the State agency. Failure to maintain 
such records shall be grounds for the denial of reimbursement for meals 
served during the period covered by the records in question and for the 
denial of reimbursement for costs associated with such records. At a 
minimum, the following records shall be collected and maintained:

[[Page 216]]

    (1) Copies of all applications and supporting documents submitted to 
the State agency;
    (2) Documentation of the enrollment of each participant at child 
care centers (except for outside-school-hours care centers) and adult 
day care centers. All types of centers must maintain information used to 
determine eligibility for free or reduced-price meals in accordance with 
Sec. 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 elementary 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 Sec. 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 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. Each sponsoring organization of 
day care homes shall determine which of the day care homes under its 
sponsorship are eligible as tier I day care homes. A sponsoring 
organization may use current school or census data provided by the State 
agency or free and reduced

[[Page 217]]

price applications collected from day care home providers in making a 
determination for each day care home. When using elementary school or 
census data for making tier I day care home determinations, a sponsoring 
organization shall first consult school data, except in cases in which 
busing or other bases of attendance, such as magnet or charter schools, 
result in school data not being representative of an attendance area's 
household income levels. In these cases, census data should generally be 
consulted instead of school data. A sponsoring organization may also use 
census data if, after reasonable efforts are made, as defined by the 
State agency, the sponsoring organization is unable to obtain local 
elementary school attendance area information. A sponsoring organization 
may also consult census data after having consulted school data which 
fails to support a tier I day care home determination for rural areas 
with geographically large elementary school attendance areas, for other 
areas in which an elementary school's free and reduced price enrollment 
is above 40 percent, or in other cases with State agency approval. 
However, if a sponsoring organization believes that a segment of an 
otherwise eligible elementary school attendance area is above the 
criteria for free or reduced price meals, then the sponsoring 
organization shall consult census data to determine whether the homes in 
that area qualify as tier I day care homes based on census data. If 
census data does not support a tier I classification, then the 
sponsoring organization shall reclassify homes in segments of such areas 
as tier II day care homes unless the individual providers can document 
tier I eligibility on the basis of their household income. When making 
tier I day care home determinations based on school data, a sponsoring 
organization shall use attendance area information that it has obtained, 
or verified with appropriate school officials to be current, within the 
last school year. Determinations of a day care home's eligibility as a 
tier I day care home shall be valid for one year if based on a 
provider's household income, three years if based on school data, or 
until more current data are available if based on census data. However, 
a sponsoring organization, State agency, or FNS may change the 
determination if information becomes available indicating that a home is 
no longer in a qualified area. The State agency shall not routinely 
require annual redeterminations of the tiering status of tier I day care 
homes based on updated elementary school data.
    (g) Payment to employees. No institution that is a sponsoring 
organization of family day care homes and that employs more than one 
person is permitted to base payment (including bonuses or gratuities) to 
its employees, contractors, or family day care home providers solely on 
the number of new family day care homes recruited for the sponsoring 
organization's Program.
    (h) Claims submission. Each institution shall submit claims for 
reimbursement to the State agency in accordance with Sec. 226.10.
    (i) Program agreement. Each institution shall enter into a Program 
agreement with the State agency in accordance with Sec. 226.6(b)(4).
    (j) Commodities. Each institution receiving commodities shall ensure 
proper commodity utilization.
    (k) Special Milk Program. No institution may participate in both the 
Child and Adult Care Food Program and the Special Milk Program at the 
same time.
    (l) Elderly feeding programs. Institutions which are school food 
authorities (as defined in part 210 of this chapter) may use facilities, 
equipment and personnel supported by funds provided under this part to 
support a nonprofit nutrition program for the elderly, including a 
program funded under the Older Americans Act of 1965 (42 U.S.C. 3001 et 
seq.).
    (m) Regulations and guidance. Each institution must comply with all 
regulations issued by FNS and the Department, all instructions and 
handbooks issued by FNS and the Department to clarify or explain 
existing regulations, and all regulations, instructions and handbooks 
issued by the State agency that are consistent with the provisions 
established in Program regulations.

[[Page 218]]

    (n) Information on WIC. Each institution must ensure that parents of 
enrolled children are provided with current information on the benefits 
and importance of the Special Supplemental Nutrition Program for Women, 
Infants, and Children (WIC) and the eligibility requirements for WIC 
participation.

[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 50 
FR 8580, Mar. 4, 1985; 52 FR 15298, Apr. 28, 1987; 52 FR 36907, Oct. 2, 
1987; 53 FR 52590, Dec. 28, 1988; 54 FR 26724, June 26, 1989; Amdt. 22, 
55 FR 1378, Jan. 14, 1990; 56 FR 58174, Nov. 16, 1991; 61 FR 25554, May 
22, 1996; 62 FR 903, Jan. 7, 1997; 62 FR 23619, May 1, 1997; 63 FR 9105, 
Feb. 24, 1998; 64 FR 72260, Dec. 27, 1999; 67 FR 43490, June 27, 2002; 
69 FR 53544, Sept. 1, 2004]