Child Nutrition Emergency Operational Costs Reimbursement Programs: Q&As #3

Child Nutrition Emergency Operational Costs Reimbursement Programs: Q&A #3 Assurance Statements

1. Which Child Nutrition (CN) Program operators must provide their State agency with an assurance statement in order to receive a payment in either of the reimbursement programs?

School Meal Programs and Child and Adult Care Food Program (CACFP) operators must provide their State agency with an assurance statement that they will file a claim within the required time period if they did not file any valid claims during September – December 2020, or later.

As a reminder, assurance statements require that a program operator who has temporarily paused their Child Nutrition Program operations to resume by filing a claim no later than:

For CACFP: A month occurring within 90 days after the conclusion of the public health emergency.

2. Is an assurance statement still required if a claim has already been filed by the program operator for a month after December 2020?

No. A valid claim filed for any month after December 2020 (i.e. January 2021 onwards) confirms participation in the CN programs and therefore may serve in lieu of an assurance statement provided to the State agency.

3. What are the documentation requirements for assurance statements?

Assurance statements must:

• Be in writing (all forms of written communication are acceptable, including web- based/digital formats);
• Be signed or submitted by the program operator or their authorized representative and contain that individual’s contact information and;
• Display the date on which the assurance was submitted to the State agency

4. Are State agencies required to solicit assurance statements from school food authorities (SFAs) and CACFP operators who have been determined to be owed a payment based on one or more of the applicable calculation formulas, but have not resumed operations per question #1?

Yes. State agencies are required to calculate and offer payments to all eligible program operators, including those whose operations are still temporarily paused.

5. Must the State accept an assurance statement from a program operator who is owed a payment based on one or more of the applicable calculation formulas, but has not resumed Child Nutrition Program operations?

Yes. State agencies must accept assurance statements from program operators who are eligible to receive a payment.

6. Will FNS issue a template to State agencies to use for soliciting and documenting assurances?

No. FNS has no plans to issue a template for program operator assurance statements at this time, but State agencies are encouraged to develop their own template.

7. May State agencies establish additional requirements or conditions attached to assurance statements?

No. State agencies may not establish additional requirements as a condition of receiving any payment owed to a program operator under the statutory formula.

8. Is there any established deadline for providing or documenting an assurance statement?

State agencies requesting an assurance statement from a program operator should do so in accordance with the key dates and deadlines required by FNS, per SP-06, CACFP-05-2021. The State agency must liquidate (i.e., pay out to local program operators) all funds provided for emergency operational costs by January 31, 2022.

9. If a program operator resumed operations prior to the September – December 2020 timeframe but was forced to suspend operations again prior to September 2020, are they exempt from providing an assurance statement?

No. In line with statutory requirements, if any program operator that is due a payment per the formula was not operating during the September – December 2020 eligibility period and remains inactive, they must provide their State agency with an assurance that they will resume operations by the required deadlines.

10. If a Child Nutrition program operator suspended operations in one Child Nutrition Program but has since resumed operations in another Child Nutrition Program (or Programs), is an assurance statement still required?

It depends on the programs operated and under which Emergency Operational Costs Reimbursement Program a payment is owed.

In order to receive a payment under the CACFP Emergency Operational Costs Reimbursement Program, CACFP operators who have temporarily paused their CACFP participation must still provide an assurance statement, regardless of whether they were actively participating in other Child Nutrition Programs during the applicable timeframe.

Payment Calculations

12. May a program operator receive payments using the calculation for “new” program operators if they did not operate during one or more of the reference months in 2019, even if they were already operating in prior months during that same reference period?

A “new” program operator is one that is operating for the first time, and generally speaking, did not file claims during the March-June 2019 reference period because it was not yet participating in the Child Nutrition Programs. If an SFA or CACFP institution or provider was already participating and had meal claims in any of the prior months during the 2019 reference period, it may not be considered “new”.

13. May State agencies allow sponsors of affiliated centers to also retain up to 15% of the payment to cover administrative expenses?

Sponsoring organizations of affiliated centers may follow the same processes they use to distribute monthly meal reimbursements, which includes retention of up to 15% for administrative expenses, as applicable.

14. If a sponsored unaffiliated CACFP center or a day care home provider has transferred to a new sponsoring organization since March-June 2020, to which sponsoring organization (previous or current) should the share of administrative reimbursement be paid?

In the case that a day care home provider transferred to a new sponsor since the reimbursement period, the administrative reimbursement should be paid by the State agency to the Sponsoring organization that the day care home resided under during the applicable reimbursement period.
For unaffiliated centers, the agreement to provide a share of administrative funds only exists with the current sponsoring organization, which would typically receive and process the payment from the State agency. In such cases, the share of administrative funding may be retained by the current sponsoring organization.

Program Operator Eligibility

15. If a program operator is currently declared seriously deficient or has outstanding administrative review findings (i.e., they are not presently in good standing), are they still eligible for payments?

Yes. If a program operator has not been terminated or suspended pending termination from the applicable Child Nutrition program(s), they are eligible to receive payments under either or both reimbursement programs, regardless of their current standing.

16. If a program operator filed valid claims during an applicable reference period but terminated their participation in the Child Nutrition Programs prior to September 2020 (i.e. no intent to return to CN operations), are they entitled to a payment?

No. A program operator who terminated their participation in the Child Nutrition Programs (i.e. their agreement with the State agency or sponsoring organization) prior to the September – December 2020 claims period is not entitled to an emergency operational costs reimbursement payment.

17. If a program operator filed valid claims during both an applicable reference month as well as the months September – December 2020, and have since terminated their participation in the Child Nutrition Programs (i.e. no intent to return to CN operations), are they still owed a payment under the Child Nutrition Emergency Operational Costs Reimbursement Programs?

Program operators that submitted valid claims for an applicable reference month as well as during the months of September - December 2020 may be entitled to an emergency costs payment.

18. Are payments owed to CACFP unaffiliated centers and day care homes that have left their previous sponsoring organization and have not yet established an agreement under another sponsor?

In order to receive a payment, a CACFP unaffiliated center or day care home must be operating the CACFP under an agreement with an approved sponsoring organization per the requirements for sponsored facilities as described at 7 CFR 226.18(b).

19. If a program operator has been suspended (pending termination) or terminated from the Child Nutrition Program(s) for which they would otherwise be due a calculated payment, are they still eligible for that payment?

If an institution, day care home, or unaffiliated center has been suspended or terminated from their participation in the CACFP for cause, or if they have been placed on the National Disqualified List, they are not eligible to receive a payment.

Financial Management

20. For accounting purposes, which Federal fiscal year are Child Nutrition Emergency Operational Costs funds considered to be tied to?

Funds awarded to States under the Child Nutrition Emergency Operational Costs Reimbursement Programs should be treated as FY 2021 funding, in line with their award date during that same fiscal year and the period performance end date, September 30, 2021.

21. What program activities may continue to occur following the September 30, 2021 obligation deadline through the January 31, 2022 liquidation deadline?

State agencies may continue to disburse or further adjust any payments that were obligated on or prior to the September 30, 2021 obligation deadline through January 31, 2022.

22. Are Child Nutrition Emergency Operational Costs payments tax deductible?

FNS is not aware of an authority that would allow or preclude tax deductibility of CN Emergency Operational Cost Payments. FNS encourages State agencies to work with their counsel to determine the extent to which Child Nutrition Emergency Operational Costs payments may be tax deductible within their jurisdiction.

Reporting

23. What information will FNS collect from State agencies regarding calculation and disbursement of payments under the Emergency Operational Costs Reimbursement Program?

FNS will review reports submitted by State agencies summarizing the use of these funds by program operators as well as State agencies’ use of the funds for administrative purposes.

Monitoring and Operations

24. How will State agencies monitor the use of Emergency Operational Costs Reimbursement Program funds?

State agencies will monitor the use of Emergency Operational Costs Reimbursement Program funds during their normal review of a program operator’s financial management and    Nonprofit Food Service account.

25. If a State agency finds that a program operator incorrectly implemented the Child Nutrition Emergency Operational Costs Reimbursement Programs, what action should they take?

If implementation issues are found during a review, State agencies should not require unnecessary corrective action or utilize the serious deficiency process, which is reserved for egregious regulatory noncompliance.

26. Are CACFP program operators required to amend their budget to reflect the receipt and expenditure of funds under the CACFP Emergency Operational Costs Reimbursement Program?

CACFP program operators should follow their State agency’s normal requirements and procedures for making budget amendments, as applicable. FNS encourages State agencies to streamline and simplify any budget amendment requirements in order to support program operators and provide flexibility during this challenging time.