[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR226.11]

[Page 211-212]
 
                          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.  226.11  Program payments for centers.

    (a) Payments shall be made only to institutions operating under an 
agreement with the State agency for the meal types specified in the 
agreement served at approved child care centers, adult day care centers, 
emergency shelters, and outside-school-hours care centers. A State 
agency may develop a policy under which centers are reimbursed for meals 
served in accordance with provisions of the Program in the calendar 
month preceding the calendar month in which the agreement is executed, 
or the State agency may develop a policy under which centers earn 
reimbursement only for meals served in approved centers on or after the 
effective date of the Program agreement. If the State agency's policy 
permits centers to earn reimbursement for meals served prior to the 
execution of a Program agreement, Program reimbursement must not be 
received by the center until the agreement is executed.
    (b) Each child care institution or outside-school-hours care 
institution must report each month to the State agency the total number 
of meals, by type (breakfast, lunch, supper, and snack), served to 
children, except that such reports must be made for a for-profit center 
only for calendar months during which not less than 25 percent of the

[[Page 212]]

children in care (enrolled or licensed capacity, whichever is less) were 
eligible for free or reduced price meals or were title XX beneficiaries. 
Each adult day care institution shall report each month to the State 
agency the total number of meals, by type (breakfasts, lunches, suppers, 
and supplements), served to adult participants, except that such reports 
shall be made for a for-profit center only for calendar months during 
which no less than 25 percent of enrolled adult participants were title 
XIX or title XX beneficiaries. Prior to submitting its consolidated 
monthly claim to the State agency, each sponsoring organization must 
conduct reasonable edit checks on the sponsored centers' meal claims 
which, at a minimum, include those edit checks specified at Sec.  
226.10(c).
    (c) Each State agency must base reimbursement to each child care 
institution or outside-school-hours institution on the number of meals, 
by type (breakfast, lunch, supper, and snack), served to children 
multiplied by the assigned rates of reimbursement, except that 
reimbursement must be payable to for-profit child care centers or for-
profit outside-school-hours care centers only for calendar month during 
which at least 25 percent of children in care (enrolled or licensed 
capacity, whichever is less) were eligible for free or reduced price 
meals or were title XX beneficiaries. Each State agency must base 
reimbursement to each adult day care institution on the number of meals, 
by type, served to adult participants multiplied by the assigned rates 
of reimbursement, except that reimbursement must be payable to for-
profit adult day care centers only for calendar months during which at 
least 25 percent of the enrolled adult participants were beneficiaries 
of title XIX, title XX, or a combination of titles XIX and XX. In 
computing reimbursement, the State agency must either:
    (1) Base reimbursement to child care centers and adult day care 
centers on actual time of service meal counts, and multiply the number 
of meals, by type, served to participants eligible to receive free 
meals, served to participants eligible to receive reduced-price meals, 
and served to participants from families not meeting such standards by 
the applicable national average payment rate; or
    (2) Apply the applicable claiming percentage or percentages to the 
total number of meals, by type, served to participants and multiply the 
product or products by the assigned rate of reimbursement for each meal 
type; or
    (3) Multiply the assigned blended per meal rate of reimbursement by 
the total number of meals, by type, served to participants.
    (d) If the State agency elects to reimburse its institutions 
according to the lesser of rates or actual costs, total Program payments 
to an institution during any fiscal year, including any cash payments in 
lieu of commodities, shall not exceed allowable Program operating and 
administrative costs, less income to the Program. The State agency may 
limit payments for administrative costs to the amount approved in the 
annual administrative budget of the institution. The State agency may 
prohibit an institution from using payments for operating costs to pay 
for administrative expenses.
    (e) Each institution shall maintain records as prescribed by the 
State agency's financial management system.

[47 FR 36527, Aug. 20, 1982, as amended at 48 FR 21530, May 13, 1983; 52 
FR 36907, Oct. 2, 1987; 53 FR 52590, Dec. 28, 1988; 62 FR 23618, May 1, 
1997; 69 FR 53543, Sept. 1, 2004; 70 FR 43262, July 27, 2005; 71 FR 5, 
Jan. 3, 2006]