[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR226.10]



[Page 207-209]

 

                          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. 226.10  Program payment procedures.



    (a) If a State agency elects to issue advance payments to all or 

some of the participating institutions in the State, it must provide 

such advances no later than the first day of each month to those 

eligible institutions electing to receive advances in accordance with 

Sec. 226.6 (f)(3)(vi). Advance payments shall equal the full level of 

claims estimated by the State agency to be submitted in accordance with 

paragraph (c) of this section, considering prior reimbursement claims 

and other information such as fluctuations in enrollment. The 

institution may decline to receive all or any part of the advance.

    (b) For each fiscal year, the amount of payment made, including 

funds advanced to an institution, shall not exceed the amount of valid 

reimbursement claimed by that institution. To ensure that institutions 

do not receive excessive advance payments, the State agency shall 

observe the following procedures:

    (1) After three advance payments have been made to an institution, 

the State agency shall ensure that no subsequent advance is made until 

the State agency has validated the institution's claim for reimbursement 

for the third month prior to the month for which the next advance is to 

be paid.

    (2) If the State agency has audit or monitoring evidence of 

extensive program deficiencies or other reasons to believe that an 

institution will not be able to submit a valid claim for reimbursement, 

advance payments shall be withheld until the claim is received or the 

deficiencies are corrected.

    (3) Each month the State agency shall compare incoming claims 

against advances to ensure that the level of funds authorized under 

paragraph (a) of this section does not exceed the claims for 

reimbursement received from the institution. Whenever this process 

indicates that excessive advances have been authorized, the State agency 

shall either demand full repayment or adjust subsequent payments, 

including advances.

    (4) If, as a result of year end reconciliation as required by the 

Department's Uniform Federal Assistance Regulations (7 CFR part 3015), 

the State agency determines that reimbursement earned by an institution 

during a fiscal year is less than the amount paid, including funds 

advanced to that institution, the State agency shall demand repayment of 

the outstanding balance or adjust subsequent payments.

    (c) Claims for Reimbursement shall report information in accordance 

with the financial management system established by the State agency, 

and in sufficient detail to justify the reimbursement claimed and to 

enable the State agency to provide the final Report of the Child and 

Adult Care Food Program (FNS 44) required under



[[Page 208]]



Sec. 226.7(d). In submitting a Claim for Reimbursement, each 

institution shall certify that the claim is correct and that records are 

available to support that claim. For each month in which independent 

for-profit child care centers and independent for-profit outside-school-

hours care centers claim reimbursement, they must submit the number and 

percentage of children in care (enrolled or licensed capacity, whichever 

is less) that documents at least 25 percent are eligible for free or 

reduced-price meals or are title XX beneficiaries. Sponsoring 

organizations of for-profit child care centers or for-profit outside-

school-hours care centers must submit the number and percentage of 

children in care (enrolled or licensed capacity, whichever is less) that 

documents that at least 25 percent are eligible for free or reduced-

price meals or are title XX beneficiaries. Sponsoring organizations of 

such centers must not submit a claim for any for-profit center in which 

less than 25 percent of the children in care (enrolled or licensed 

capacity, whichever is less) during the claim month were eligible for 

free or reduced-price meals or were title XX beneficiaries. Independent 

for-profit adult day care centers shall submit the percentages of 

enrolled adult participants receiving title XIX or title XX benefits for 

the month claimed for months in which not less than 25 percent of 

enrolled adult participants were title XIX or title XX beneficiaries. 

Sponsoring organizations of such adult day care centers shall submit the 

percentage of enrolled adult participants receiving title XIX or title 

XX benefits for each center for the claim. Sponsoring organizations of 

such centers shall not submit claims for adult day care centers in which 

less than 25 percent of enrolled adult participants were title XIX or 

title XX beneficiaries for the month claimed. Prior to submitting its 

consolidated monthly claim to the State agency, each sponsoring 

organization must perform edit checks on each facility's meal claim. At 

a minimum, the sponsoring organization's edit checks must:

    (1) Verify that each facility has been approved to serve the types 

of meals claimed;

    (2) Compare the number of children enrolled for care at each 

facility, multiplied by the number of days on which the facility is 

approved to serve meals, to the total number of meals claimed by the 

facility for that month. Discrepancies between the facility's meal claim 

and its enrollment must be subjected to more thorough review to 

determine if the claim is accurate; and

    (3) Detect block claiming (as defined in Sec. 226.2) by any 

facility. If block claiming is detected, the sponsoring organization 

must not include that facility among those facilities receiving less 

than three reviews during the current year, in accordance with Sec. 

226.16(d)(4), and must ensure that any facility submitting a block claim 

receives an unannounced review within 60 days of the discovery of the 

block claim. If, in the course of conducting this review, the sponsoring 

organization determines that there is a logical explanation for the 

facility to regularly submit a block claim, the sponsoring organization 

must note this in the facility's review file and is not required to 

conduct an unannounced visit after other block claims detected during 

the current year. In addition, if a State agency determines that the 

conduct of all required unannounced reviews within 60 days will impose 

unwarranted burdens on a particular sponsoring organization, the State 

agency may provide that sponsoring organization with up to 30 additional 

days to complete the required unannounced reviews.

    (d) All records to support the claim shall be retained for a period 

of three years after the date of submission of the final claim for the 

fiscal year to which they pertain, except that if audit findings have 

not been resolved, the records shall be retained beyond the end of the 

three year period as long as may be required for the resolution of the 

issues raised by the audit. All accounts and records pertaining to the 

Program shall be made available, upon request, to representatives of the 

State agency, of the Department, and of the U.S. General Accounting 

Office for audit or review, at a reasonable time and place.

    (e) Unless otherwise approved by FNS, the Claim for Reimbursement 

for



[[Page 209]]



any month shall cover only Program operations for that month except if 

the first or last month of Program operations in any fiscal year 

contains 10 operating days or less, such month may be added to the Claim 

for Reimbursement for the appropriate adjacent month; however, Claims 

for Reimbursement may not combine operations occurring in two fiscal 

years. A final Claim for Reimbursement shall be postmarked and/or 

submitted to the State agency not later than 60 days following the last 

day of the full month covered by the claim. State agencies may establish 

shorter deadlines at their discretion. Claims not postmarked and/or 

submitted within 60 days shall not be paid with Program funds unless FNS 

determines that an exception should be granted. The State agency shall 

promptly take corrective action with respect to any Claim for 

Reimbursement as determined necessary through its claim review process 

or otherwise. In taking such corrective action, State agencies may make 

upward adjustments in Program funds claimed on claims filed within the 

60 day deadline if such adjustments are completed within 90 days of the 

last day of the claim month and are reflected in the final Report of the 

Child and Adult Care Food Programs (FNS-44) for the claim month which is 

required under 226.7(d). Upward adjustments in Program funds claimed 

which are not reflected in the final FNS-44 for the claim month shall 

not be made unless authorized by FNS. Downward adjustments in Program 

funds claimed shall always be made without FNS authorization regardless 

of when it is determined that such adjustments are necessary.

    (f) If, based on the results of audits, investigations, or other 

reviews, a State agency has reason to believe that an institution, child 

or adult care facility, or food service management company has engaged 

in unlawful acts with respect to Program operations, the evidence found 

in audits, investigations, or other reviews is a basis for non-payment 

of claims for reimbursement.



[47 FR 36527, Aug. 20, 1982, as amended by Amdt. 5, 49 FR 18988, May 4, 

1984; 50 FR 26975, July 1, 1985; 53 FR 52590, Dec. 28, 1988; Amdt. 22, 

55 FR 1378, Jan. 14, 1990; 62 FR 23618, May 1, 1997; 69 FR 53543, Sept. 

1, 2004; 70 FR 43261, July 27, 2005]