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Guidance on Reallocation of CACFP Audit Funds

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PDF Icon Policy Memo (92.06 KB)
DATE: March 19, 2014
SUBJECT: Guidance on Reallocation of Child and Adult Care Food Program (CACFP) Audit Funds
TO: Regional Directors
Special Nutrition Programs
All Regions
State Directors
Child Nutrition Programs
All States

This memorandum provides the information needed to conduct the fiscal year (FY) 2014 reallocation of CACFP audit funds. Reallocation is the process by which state agencies can request additional CACFP audit funds above their initial authorized funding level. The availability of CACFP audit funds for reallocation in future years cannot be guaranteed. State agencies that request funds should focus their need for resources on audit activities that are critical to CACFP.

The following are the key requirements related to the reallocation of CACFP audit funds.

  1. Requests must be for allowable uses of CACFP audit funds, including:
    • funding the CACFP portion of organization-wide audits and the resulting CACFP audit resolution activities;
    • conducting, handling and processing CACFP-related audits and performing the resulting audit resolution activities, and;
    • conducting administrative reviews of CACFP, provided that all required program specific audits have been performed.
  2. Allowable costs include, but are not limited to: salaries, the purchase of equipment, information technology and systems projects (please see Attachment A, Guidance for ITS Procurements), technical assistance to CACFP organizations and state agency staff and travel expenses. However, to be funded, such costs must be incurred strictly to meet the audit requirements of §226.8 and, subsequent to the completion of the administrative review requirements of §226.6.
  3. State agency requests must be submitted to regional offices (ROs) by Monday, April 14, 2014. Requests must include a justification for funds that describes what activity will be performed and why the activity is needed. It is critical this year that all ROs complete and submit Attachment B, Fiscal Year (FY) 2014 CACFP Audit Reallocation Request.
  4. The reallocated funds must be obligated by Sept. 30, 2015 and expended by Dec. 15, 2015.
  5. The amount of state Administrative Expense (SAE) funds that a state agency anticipates carrying over into FY 2014, as indicated on the SAE Funds Reallocation Report (FNS-525), will be a factor in approval of reallocated audit funds. A state agency that does not anticipate having SAE carryover funds will have higher priority to receive reallocated audit funds.
  6. Effective use of the reallocated audit funds received by a state agency in previous fiscal years will be considered if funds become available for reallocation in future years.
  7. State agencies that receive reallocated CACFP audit funds must report on the use of funds on the Federal Financial Report (SF-425). State agencies must submit an SF-425 report to the Financial Management Director in the Regional Office no later than 90 days after the end of each FY.

The following are the roles and responsibilities of the RO and Headquarters.

Regional Offices
  • Review the state agency’s justification for funds which includes a description of what activity will be performed and why the activity is needed.
  • Recommend for approval only requests meeting the above guidelines.
  • Rank each state agency’s request recommended for approval from high to low priority based on the RO’s perceived needs of state agencies and discussions with each state agency. A discussion of the reasons for each ranking must be included along with the RO’s recommendation.
  • Review all reallocation requests recommended for approval.
  • Make final funding determinations based on the availability of funds and the merits of the individual requests.
  • Prioritize the requests based on RO recommendations if the requests exceed the amount of funds available.
  • Issue allowances to ROs with reallocation adjustments.
By May 5, 2014, ROs must submit to Headquarters:
  1. All reallocation requests recommended for approval;
  2. Supporting justifications, Attachment B; and
  3. A ranking of each state agency’s request, high priority to low priority

Requests must be submitted by Monday, May 5th to allow time for requests to be reviewed and prioritized so that Headquarters can fund the requests in May 2014. Due to the time limitations for reallocating CACFP audit funds, if requests are not received by this date, they may not be considered.

The following table provides some key Audit Reallocation dates:

Key Dates
April 14, 2014
May 5, 2014
May 2014
Sept. 30, 2015
Dec. 15, 2015
SAs submit requests to RO
ROs submit to FNS HQ all state agency proposals and Attachment Bs
FNS HQ notifies ROs of results
Reallocated funds must be fully obligated
Reallocated funds must be fully expended

State agencies should contact their regional office with any questions.

Cynthia Long
Deputy Administrator
Child Nutrition Programs


Page updated: April 07, 2023

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.