State Agency and Sponsor Monitoring - FCCHLearning Support : Minnesota Department of Education

State Agency and Sponsor Monitoring - FCCH

Collection of CACFP Debt from Terminated Providers


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651/582-8526 800/366-8922

FOOD AND NUTRITION SERVICE

NOTICE

DATE: May 25, 2004

TO: SPONSORING AUTHORITIES of

Child and Adult Care Food Program - Family Child Care

SUBJECT: Collection of CACFP Debt from Terminated Providers

FROM:

Linda Rosenbaum-Grubbs, Supervisor

Food and Nutrition Service

Policy

The following text is a clarification from the U.S. Department of Agriculture (USDA) concerning the responsibilities of family childcare sponsors to recover unearned funds from terminated providers and submit to the state agency.

In most instances, any unearned funds paid to a provider by a sponsor must be recovered by the State agency from the sponsor.  The sponsor must decide whether to pursue the collection of the funds from the provider taking into account the impact their action has on their (the sponsor's) viability and any statement it may make regarding their accountability.  It must be noted that no federal funds, including CACFP administrative funds, may be used in the repayment of unearned funds.  

Any decision by the State agency to forgo collection of an obligation incurred by a sponsor on behalf of one of its day care home providers should be the exception rather than the rule.  The State agency may elect not to require the sponsor to repay unearned provider payments only to the extent that the sponsor is able to demonstrate to the State agency's satisfaction that it was not responsible for the overpayment and that it had made every reasonable effort to recover the funds.  Although possible, we can envision few instances where a provider is overpaid in which the sponsor bears none of the responsibility.

 

Although we [USDA] retained, by Regulation, our authority to pursue action against a day care home provider separate and apart from the action of the sponsor, this in no way suggests that the sponsor is no longer responsible for debts it incurs on behalf of its providers by virtue of their failure to comply with program requirements.

Note that the State agency may decide to forgo collection incurred by a sponsor on behalf of a provider only in exceptional cases and only to the extent that the sponsor is able to demonstrate that it (1) was not responsible for the overpayment and (2) had made every reasonable effort to recover the funds.

If you have any questions about this information, please contact the Program Accountability and Improvement team at 651-582-8310, or e-mail to fns@state.mn.us.