Section 2 Sponsor Eligibility & Responsibilities

Transcription

1 Section 2 Sponsor Eligibility & Responsibilities

2 Section 2 Sponsor Eligibility & Responsibilities Eligibility Requirements You are eligible to participate in the CACFP as a DCH sponsor if you: ensure that the day care homes you sponsor are providing organized, non-residential child care; maintain required records and documents; accept final administrative and financial responsibility for the program; attend all required F&N training ; personally manage your DCH program, i.e. you cannot subcontract the management of CACFP operations; provide adequate supervisory/operational personnel to effectively manage and monitor the program; and restrict your employees from securing additional employment that interferes with their CACFP responsibilities and duties. Demonstrating Unmet Need To demonstrate unmet need, DCH sponsoring organizations that are: applying to participate in the CACFP as a new sponsor; or re-applying to participate in the CACFP after a break in service, must document that its participation in the program will help ensure the delivery of meal benefits to previously unserved participants. 2-1

3 Demonstrating Unmet Need (contd.) For returning sponsors, a break in service is defined as any period of time in which a contractor does not have a signed and approved F&N Agreement. This agreement may have been terminated for cause or mutual consent. There is no time frame assigned to the duration of the break in service. What This Means To You You must ensure that the providers you are submitting for approval with your initial application HAVE NOT been a provider for any other CACFP DCH sponsoring organization in the past twelve months! Each provider you list will be checked against F&N s system to ensure they are not currently participating with another sponsor and have not participated in the previous twelve months. Once you are an approved sponsor, you may then accept existing providers who may choose to come under your sponsorship from another sponsor during the open enrollment period. Open enrollment for existing providers is June 1 st through September 30 th of each program year. New providers can be enrolled at any time. Very Important!!! You must certify to the accuracy of this information as provided in the application. Submitting false information is a serious deficiency and could result in placement of you and your organization on the National Disqualified List (NDL). 2-2

4 Training Requirements There are mandatory training requirements for both current and new sponsoring organizations in the CACFP DCH. As part of the application process and prior to executing a F&N Agreement, applying sponsoring organizations must attend program training. You will receive a training certificate after a representative of your organization successfully completes the training. Certificates are awarded in the name of the sponsoring organization, rather than in the name of an individual who completes the training. You should retain the training certificate with your CACFP records. You will be required to submit a copy of this training certificate prior to the approval of your application. Helpful Training Information If The organization previously participated in the CACFP DCH, but terminated for any reason. The organization experienced a complete legal identity change (i.e., the organization is sold) and the principal staff changed. The organization had a name change, but your Federal Employer s Identification Number (FEIN), or other documentation establishing legal identity remained the same, and the principal staff did not change. The organization experienced a complete legal identity change (i.e., the organization is sold) and the principal staff did not change. Then A representative of the organization must complete an Introduction to CACFP DCH Sponsors session prior to resuming participation in the CACFP DCH. A representative of the new organization must complete a Introduction to CACFP DCH Sponsors session as part of the application process to participate in the CACFP DCH. The organization would not be required to attend Introduction to CACFP DCH Sponsors session again. The organization would not be required to attend Introduction to CACFP DCH Sponsors again, unless the Community Operations Monitor determines the current operations would benefit from additional training. Note: Training expenses are an allowable expense if they are included in the sponsor s approved budget. 2-3

5 Ineligibility for Participation You are ineligible to participate as a DCH sponsor if You, your organization, or any of your principals have been convicted of any business related offense that occurred during the 7 years preceding your application. (Note: Business related offenses include: fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or any activity indicating a lack of business integrity). Any member or employee of your organization has entered a children s facility and that person has committed a felony or misdemeanor classified as an offense against the person or family, or as public indecency. Any member of your organization has entered a childrens facility and that person has committed a felony violation of any statute intended to control the possession or distribution of a controlled substance outlined in the Texas Controlled Substance Act. You begin or continue to sponsor any provider who has been, 1) terminated for cause and declared seriously deficient by you or another sponsor, and 2) placed on the National Disqualified List. Your participation during the 7 (seven) years preceding your application in a publicly funded program was ever terminated for violating that program s requirements, and your eligibility to participate was never reinstated. (Note: publicly funded programs are programs funded by public funds, including but not limited to: federal, state, or local government funds). 2-4

6 Organizational Structure and Tax Exempt Status You must be a public institution or a nonprofit, tax-exempt organization to sponsor day care homes in the DCH program. You must acquire and maintain tax-exempt status from the U.S. Internal Revenue Service (IRS) either individually or as part of a group ruling prior to application for CACFP participation. If you acquire tax-exempt status under a group ruling, you must submit proof of your affiliation with the parent organization that was given tax-exempt status. Failure to submit your formal determination of tax-exempt status with your application will result in application denial! Non-Profit Financial Management and Food Service A sponsor must operate a nonprofit food service principally for the benefit of enrolled children and must document the operation of that food service. Nonprofit status does not require that the institution operate at a break-even or loss. Nonprofit status is determined by: 1. Identifying all nonprofit food service revenues, 2. Deducting allowable net expenses, 3. Identifying the excess of all nonprofit food service revenues over nonprofit food service expenses, and 4. Verifying that any excess of revenues over expenses is retained and used only in the nonprofit food service program. Food service revenue includes: CACFP reimbursement. Income to the Program, which is income earned from activities supported by the food service. All other funds used or restricted for use in the nonprofit food service, such as donations. 2-5

7 A sponsor can maintain a maximum of three months' net cash resources, i.e. income minus expenditures, in this account. If a sponsor approaches the maximum amount allowed in the nonprofit food service account, they should contact their Community Operations office for assistance. Additional information about the tax filing requirements for small businesses with gross receipts under $25,000 or less can be found at Failure to comply these tax filing instructions could result in an organization s tax-exempt status being revoked. If the IRS ever revokes your tax-exempt status after program approval, you must notify F&N. Demonstrating Administrative Capability F&N must ensure that a new (or returning) sponsor has the capability to administer the CACFP DCH program in a satisfactory manner. DCH sponsors must document their financial viability, administrative capability, and internal controls for accountability (VCA). The VCA standards were put into place by USDA to address the problem of new or returning sponsors approved for participation that had very little chance of success. Consequently, only those organizations that demonstrate adequate VCA will be approved for program participation! 2-6

8 VCA Standard 1 Financial Viability To demonstrate financial viability, new/renewing sponsors must demonstrate the following: 1. Adequate financial resources to operate the CACFP on a daily basis and adequate sources of funds to withstand temporary interruptions in program payments and/or fiscal claims against it. This is typically demonstrated by comprehensive financial records or through the acquisition of a performance bond. 2. Costs funded from program reimbursements are necessary, reasonable, and allowable. These costs are documented on the budget section of the application. 3. Funds are spent and accounted for in accordance with program regulations and instructions. VCA Standard 2 Administrative Capability To demonstrate administrative capability, new/renewing sponsors must document that appropriate and effective management practices are in effect to ensure that the program operates in accordance with regulations. Sponsoring organizations must provide a detailed accounting of the staff resources they will devote to monitoring facilities and must have written personnel policies and procedures in place. Note! If administrative reviews are available, the findings cited in those reviews will be used by F&N to determine both financial viability and administrative capability. Having a proven track record is important for a new or renewing sponsor to demonstrate these standards! 2-7

9 VCA Standard 3 Program Accountability The final standard program accountability refers to the new/renewing sponsor s ability to track and monitor its own action in two areas: Program funds, and Meal service. Accountability for this program means Program funds are being spent for the purpose of providing quality meals that meet program requirements. Documentation must be submitted on your application that demonstrates: 1. The nonprofit organization s governing board of directors provides adequate oversight of the program. 2. The new/renewing sponsor has a financial system with management controls, specified in writing, that accounts for: all program funds and property received, held, and disbursed; all program expenses incurred; accurate and timely claims processing; and a system of safeguards and controls to prevent and detect improper financial activities by employees. 3. The new/renewing sponsor maintains records to document compliance with program requirements including, but not limited to budgets, accounting records, approved budget amendments, training plan, and monitoring plan. 4. The new/renewing sponsor maintains documentation that demonstrates that their meals meet meal pattern requirements, civil rights requirements are met, files are maintained and only eligible meals are claimed. 2-8

10 Single Audit Act Compliance You must submit one or more of the following forms to verify your compliance with the Single Audit Act requirements: A copy of an organization-wide or program-specific audit that has been determined to meet the requirements of the Single Audit Act; A complete Form H1569, Single Audit Identification Data, certifying that you will obtain an acceptable audit meeting Single Audit Act requirements; or A completed Form H1569 certifying your exemption from Single Audit Act requirements. Debarment Certification You must certify that you (and any subcontractors you may have) have not been excluded from entering into contracts supported by federal funds if the contract is: Valued at more than $25,000 and contains federal assistance; With a principal investigator ( such as a consultant); or For audit services required under the terms of the contract. Performance Bond Requirements Important!!! If you are a nonprofit, tax-exempt organization with fewer than three years of administrative and financial history, you must submit a performance bond to insure government funding against misuse. This bond must be equal to, or exceed, the value of your projected annual reimbursements. And, the bond must be obtained from a surety company certified in the most recent U.S. Treasury Circular 570 to issue bonds to federally funded programs. 2-9

11 Important Considerations! TDA F&N will deny your relief from the bonding requirement if you have an outstanding financial obligation to TDA. You cannot use CACFP funds to pay for any costs that you incur while obtaining a performance bond until your application for participation is approved. The continuing cost of maintaining and renewing a required bond IS an allowable use of CACFP funds. When obtaining your bond, it is best to get a bonding amount that includes your for sure providers as well as any probable ones that may come on board. 2-10

12 Governing Body Awareness An important part of your application process is documenting that your governing body is aware of the responsibilities and liabilities of operating and participating in the CACFP. Your documentation should include: Minutes from an official meeting of your governing body that documents its decision to participate in the CACFP and is signed by the Secretary of the Board; and/or A written declaration by each member of your governing body that states they are aware of program responsibilities and liabilities. Documentation of governing body members You must maintain and submit a list of governing body members with the following information: Full legal name; Complete home mailing address; Complete home street address, if different from above; Phone number Date of Birth Relationship with any other members or employees of the organization; and Compensation, if any, that they receive for services provided to the organization. You may also be required to submit the minutes of governing body meetings with your notes including the date of the meeting, items discussed and action taken, all members who were present, and the names of members who voted on the action items. 2-11

13 Other Important Considerations! Primary Business Office You must provide the complete physical address of the primary business office where you will maintain program records and perform all essential program management functions. You must notify F&N in advance if you ever change the location of your primary business office. You must maintain all current business records at this location and these records must be available from 8:00 am to 5:00 pm, Monday through Friday. You must be available to your providers and F&N by telephone. You must provide voice mail service and contact, within 24 hours, a provider or F&N staff member who has left a message. Provider Record Keeping Requirements As the sponsor, you must keep each provider s agreement and all amendments for at least three years from the end of your program year. Additionally, providers must maintain records of enrollment, meal counts and attendance records in their homes. Provider Appeal Procedures Providers must be allowed to appeal any adverse action that you take which negatively affects their participation in the program. Consequently, you must develop and submit to TDA F&N the appeal procedure you plan to use with your providers. If you participate in activities other than the CACFP, you may designate staff within your organization to hear a provider appeal. No individual who might be affected by an appeal decision may hear the appeal. If you do not participate in activities other than the CACFP, you must identify an individual or organization outside of your organization to hear the appeals, e.g., private mediation services, professional organizations. For example: Providers who participate in the CACFP may not hear appeals. 2-12

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