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Assessing Costs in the CACFP

EO Guidance Document #
FNS Document #
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Policy Memos
Guidance Documents
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PDF Icon Policy Memo (63.92 KB)
PDF Icon Memo Attachment (179.13 KB)
DATE: February 25, 2015
SUBJECT: Assessing Costs in the Child and Adult Care Food Program
TO: Regional Directors
Special Nutrition Programs
Financial Management
All Regions
State Directors
Child Nutrition Programs
All States

The attached tip sheet on “Assessing Costs in the Child and Adult Care Food Program (CACFP)” provides guidance on the process state agencies and sponsors should use when considering proposed uses of the nonprofit food service account funds for CACFP-related costs.

State agencies and institutions have the discretion to determine the allow-ability of institutions to use nonprofit food service account funds to pay for costs following cost principle guidelines. In determining what proposed costs and related activities may be supported by the nonprofit food service account, an institution and state agency should assess the allow-ability of costs by considering the activity’s impact in supporting the operation and/or improvement of the CACFP. In doing so, an institution and state agency must consider whether the proposed cost is reasonable, necessary, and allocable in accordance with 2 CFR Part 200 “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E – Cost Principles.”

The cost principles serve an extremely important function in considering proposed costs and assisting program operators in better understanding how nonprofit food service account funds are being used. The cost principles must be used for the purpose of cost determination and are not intended to dictate the extent of financial assistance for a particular cost objective.

Program operators should direct questions regarding this memorandum to the appropriate state agency. State agencies should direct questions to the appropriate FNS regional office.

Sarah Smith-Holmes
Director, Program Monitoring and Operational Support Division
Child Nutrition Programs


Page updated: January 10, 2022

The contents of this guidance document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.