[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: 7CFR226.12]



[Page 210-212]

 

                          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. 226.12  Administrative payments to sponsoring organizations for 

day care homes.



    (a) General. Sponsoring organizations for day care homes shall 

receive payments for administrative costs. During any fiscal year, 

administrative costs payments to a sponsoring organization may not 

exceed the lesser of (1) actual expenditures for the costs of 

administering the Program less income to the Program, or (2) the amount 

of administrative costs approved by the State agency in the sponsoring 

organization's budget, or (3) the sum of the products obtained by 

multiplying each month the sponsoring organization's:

    (i) Initial 50 day care homes by 42 dollars;

    (ii) Next 150 day care homes by 32 dollars;

    (iii) Next 800 day care homes by 25 dollars; and

    (iv) Additional day care homes by 22 dollars.





During any fiscal year, administrative payments to a sponsoring 

organization may not exceed 30 percent of the total amount of 

administrative payments and food service payments for day care home 

operations.



[[Page 211]]



    (b) Start-up and expansion payments. (1) Prospective sponsoring 

organizations of day care homes, participating sponsoring organizations 

of child care centers or outside-school-hours care centers, independent 

centers, and participating sponsoring organizations of less than 50 

homes which meet the criteria in paragraph (b)(2) of this section shall 

be entitled to receive start-up payments to develop or expand successful 

Program operations in day care homes. Participating sponsoring 

organizations of day care homes which meet the criteria in paragraph 

(b)(2) of this section shall be entitled to receive expansion payments 

to initiate or expand Program operations in day care homes in low-income 

or rural areas. The State agency shall approve start-up payments only 

once for any eligible sponsoring organization, but may approve expansion 

payments for any eligible sponsoring organization more than once, 

provided that: the request must be for expansion into an area(s) other 

than that specified in their initial or prior request; and 12 months has 

elapsed since the sponsoring organization has satisfied all obligations 

under its initial or prior expansion agreement. Eligible sponsoring 

organizations which have received start-up payments shall be eligible to 

apply for expansion payments at a date no earlier than 12 months after 

it has satisfied all its obligations under its start-up agreement with 

the State agency.

    (2) Sponsoring organizations which apply for start-up or expansion 

payments shall evidence:

    (i) Public status or tax exempt status under the Internal Revenue 

Code of 1986;

    (ii) An organizational history of managing funds and ongoing 

activities (i.e., administering public or private programs);

    (iii) An acceptable and realistic plan for recruiting day care homes 

to participate in the Program (such as the method of contacting 

providers), which may be based on estimates of the number of day care 

homes to be recruited and information supporting their existence, and in 

the case of sponsoring organizations applying for expansion payments, 

documentation that the day care homes to be recruited are located in 

low-income or rural areas; and

    (iv) An acceptable preliminary sponsoring organization management 

plan including, but not limited to, plans for preoperational visits and 

training.

    (3) The State agency shall deny start-up and expansion payments to 

applicant sponsoring organizations which fail to meet the criteria of 

paragraph (b)(2) of this section or which have not been financially 

responsible in the operation of other programs funded by Federal, State, 

or local governments. The State agency shall notify the sponsoring 

organization of the reasons for denial and allow the sponsoring 

organization full opportunity to submit evidence on appeal as provided 

for in Sec. 226.6(k). Any sponsoring organization applying for start-up 

or expansion funds shall be notified of approval or disapproval by the 

State agency in writing within 30 calendar days of filing a complete and 

correct application. If a sponsoring organization submits an incomplete 

application, the State agency shall notify the sponsoring organization 

within 15 calendar days of receipt of the application and shall provide 

technical assistance, if necessary, to the sponsoring organization for 

the purpose of completing its application.

    (4) Sponsoring organizations which apply for and meet the criteria 

for start-up or expansion payments shall enter into an agreement with 

the State agency. The agreement shall specify:

    (i) Activities which the sponsoring organization will undertake to 

initiate or expand Program operations in day care homes;

    (ii) The amount of start-up or expansion payments to be issued to 

the sponsoring organization, together with an administrative budget 

detailing the costs which the sponsoring organization shall incur, 

document, and claim;

    (iii) The time allotted to the sponsoring organization for the 

initiation or expansion of Program operations in family day care homes;

    (iv) The responsibility of the applicant sponsoring organization to 

repay, upon demand by the State agency, start-up or expansion payments 

not expended in accordance with the agreement.



[[Page 212]]



    (5) Upon execution of the agreement, the State agency shall issue a 

start-up or expansion payment to the sponsoring organization in an 

amount equal to not less than one, but not more than two month's 

anticipated administrative reimbursement to the sponsoring organization 

as determined by the State agency. However, no sponsoring organization 

may receive start-up or expansion payments for more than 50 day care 

homes. Eligible sponsoring organizations with fewer than 50 homes under 

their jurisdiction at the time of application for start-up payments may 

receive such payments for up to 50 homes, less the number of homes under 

their jurisdiction. Eligible sponsoring organizations applying for 

expansion funds may receive at a maximum such payments for up to 50 

homes at the currently assigned administrative payment for the first 50 

homes. In determining the amount of start-up or expansion payments to be 

made to a sponsoring organization, the State agency shall consider the 

anticipated level of start-up or expansion costs to be incurred by the 

sponsoring organization and alternate sources of funds available to the 

sponsoring organization.

    (6) Upon expiration of the time allotted to the sponsoring 

organization for initiating or expanding Program operations in day care 

homes, the State agency shall obtain and review documentation of 

activities performed and costs incurred by the sponsoring organization 

under the terms of the start-up or expansion agreement. If the 

sponsoring organization has not made every reasonable effort to carry 

out the activities specified in the agreement, the State agency shall 

demand repayment of all or part of the payment. The sponsoring 

organization may retain start-up or expansion payments for all day care 

homes which initiate Program operations. However, no sponsoring 

organization may retain any start-up or expansion payments in excess of 

its actual costs for the expenditures specified in the agreement.



[47 FR 36527, Aug. 20, 1982; 47 FR 46072, Oct. 15, 1982, as amended at 

53 FR 52590, Dec. 28, 1988; 63 FR 9728, Feb. 26, 1998; 67 FR 43490, June 

27, 2002]