Facts and Tips for Completing the Budget (Sponsoring Organization of Centers CAC 8A)

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1 Facts and Tips for Completing the Budget (Sponsoring Organization of Centers CAC 8A) The entire budget will be discussed for each worksheet beginning with the Facts and Tips. Read the Facts and Tips for Completing the Budget: Budget Tool must be saved to your Documents before you begin completing the budget. The CACFP is to be operated as a "Non-Profit" program. You must spend all of the funds you receive as reimbursement on allowable, necessary, and reasonable expenses. Any excess balance (over tree months operating cost) must expended. The one line item on this budget that does not self-populate is the Excess Balance from the Previous Year. This amount must be entered. Each Line item on the Budget has its own Worksheet. If you expect to have expenses relating to any line item, a worksheet must be completed. This DOES include ALL expenses necessary to operate the CACFP even if the funding for the expenses comes from other sources. CACFP Income must equal CACFP expenditures. When entering the budget electronically, message boxes will indicate when the income does equal the expenditures. The messages will also indicate if additional income is needed to cover the CACFP expenditures. Additional income is reflected in Worksheet C Other Income. Each cost necessary to operate the CACFP requires approval by the State Agency prior to the institution expending the funds for the cost. Approval levels are General Approval when an item is listed in the budget; Prior Approval for items specifically identified by item and amount in the budget; and Specific Prior Written Approval which are costs that are not allowed unless the State Agency has provided the institution with specific written approval of both the cost and the amount of the cost that can be charged to the Program before the cost is incurred. It is recommended the budget be completed electronically. These forms are not electronically transmitted, but information is electronically populated throughout the budget. For manually preparing the budget, the total numbers from the worksheet must be carried to the Budget page and inserted in the appropriate columns. For electronically preparing the budget, the totals from each worksheet will populate on the Budget page.

2 Facts and Tips for Completing the Budget (Sponsoring Organization of Centers CAC 8A) Continue to read Facts and Tips for Completing the Budget From each worksheet completed, carry the "Total Annual Expense" to the corresponding Line item, first column on the Budget page, "Total Annual Expense". For example, if the "Total Equipment Expense for CACFP" per Worksheet F is $10, then $10 is entered in the first column under Line 12 c for Equipment. From each worksheet completed, carry the "Annual Cost Paid by CACFP Funds" to the corresponding Line item, second column on the Budget page, "CACFP Funded". For example, if the "Annual Cost Paid by CACFP Funds" per Worksheet F is $2,000, then $2,000 is entered in the second column under Line 12 c for Equipment. Other Funding" is the difference between "Total Annual Expense" and "CACFP Funded" (A - B = C). Worksheet P: Sponsored Center s Administrative and Operating Costs will be a consolidation of all operating expense from Sponsored Centers. Sponsoring Organizations of unaffiliated centers must submit a copy of the Sponsored Centers Budget for each Sponsored Center. Sponsoring Organizations of affiliated centers must either complete one Sponsored Centers Budget consolidating costs for ALL of the affiliated centers or complete a separate Sponsored Centers Budget for EACH affiliated center. The amounts from these budgets will be used to complete the Sponsoring Organization of Centers Budget. Submit ONLY COMPLETED WORKSHEETS. Include Specific Prior Written Approval Form for each item requiring such approval. (IF APPLICABLE, WORKSHEET D, F, G, I, J, K AND L) Only if CACFP funds are being used to pay for these items will you submit leases, contracts, insurance policies and any other supporting documentation with the budget. Refer to the Procurement Policy and abide with the guidance for procuring each item listed in the budget. Double check your math and consider having a second party review your work.

3 Sponsoring Organization Profile The Sponsoring Organization of Centers Profile. This form asks for Projected annual income, projected CACFP Administrative Expenditures, and CACFP Operating expenditures Enter Business Name Enter Agreement Number Number of Centers in NC Do you operate the CACFP in other States? Drop down box for yes or no If Yes provide the total number of centers for entire sponsorship and list the other states. Are you a multi-purpose organization operating other programs in addition to CACFP? Another Drop Down box for yes or no. If Yes, list the other programs Respond if funds from any of these programs will be used to perform CACFP functions. Another Drop Down box for yes or no. The rest of this sheet will populate as each Worksheet is completed. Before the form is printed, also type in the name of the person signing the budget and the date it is signed.

4 Worksheet A: Administrative Funding From CACFP Centers This worksheet computes the amount of Administrative Funding to be used by the Sponsoring Organization (SO). It is based on the projected meal reimbursement of the Sponsored Centers. Sponsoring Organizations have the right to keep up to 15% to use toward administrative costs. They keep this amount from the reimbursement for their centers. We have found that Sponsoring Organizations of Affiliated Centers do not on a normal basis use CACFP funds for their administrative costs. This worksheet is designed to capture both reimbursement from affiliated and unaffiliated centers. For your information, affiliated centers are those that are owned by the Sponsoring Organization and they share the same FID number. Unaffiliated centers are those who are independent and who are contracting with the Sponsoring Organization to manage their CACFP program. Enter the amount of total Meal Reimbursement for both Affiliated and Unaffiliated centers in Column 1 in the appropriate lines. Column 2 reflects the percentage the SO charges to administer the CACFP, up to 15%. Column 3 reflects the Maximum amount of Sponsor Fee s. The worksheet automatically calculated the amounts.

5 Worksheet B: Reimbursement for CACFP Centers If Worksheet A is electronically completed, then some of Worksheet B will complete by itself. You will have to enter the amount of Cash in Lieu projected to be earned by the Sponsored Centers for this next year. This amount is carried to Line 9 b.

6 Worksheet C: Other Income Available for CACFP Administrative and Operations This worksheet will reflect the other income the SO will have available to meet any additional expenditures that are above the amount received from CACFP for administrative expenses. There are also lines for the SO to reflect the other income available to the sponsored centers. This amount is only reflected on this worksheet and will be used by the State Agency to ensure that sufficient additional funds are available for the CACFP operations by the Sponsored Centers. This also is used by the State Agency to determine that you are financially viable. There may be times when the Federal funds are not available and you do have to continue operating.

7 Worksheets D: Administrative Labor Administrative Labor is the cost of the person administering the CACFP including duties such as evaluating the Income Eligibility Applications, preparing the CACFP claim, providing training, and other duties. You may not plan to use CACFP funds for these expenditures but we require you to reflect the costs in your budget. You will make the decision whether you use CACFP funds for the cost. This will be the last column in this worksheet. The worksheet asks for the following: Employee Name This is the person performing the administrative duties related to CACFP. Example: Tom Jones Duties These are the CACFP duties. They will equal 100% of the time represented in Column 4, the Total Hours for CACFP. Example: a = 35%, b = 25%, d = 40% Gross Monthly Wages Amount of wages for the month. Example: $2,000 Total Hours Worked Per Month The average for a month is Example: Total Hours for CACFP The number of hours this employee performed CACFP duties. Example: 20 Percent of Total Hours Worked for CACFP Electronically, the spreadsheet will compute this for you, but if you are manually completing this worksheet, you will divide the Total Hours for CACFP by the Total Hours. Example: 20/ =.1154 or 11.54% Total Required Employer Taxes This is the matching FICA that employer s pay for their employees and any unemployment taxes. Example: $150 Total Required Employer Taxes to CACFP This is the amount of the total taxes multiplied by the percentage relating to CACFP from Column 5. Example: $150 x 11.54% = $17.31 Monthly Cost for CACFP This is the total CACFP cost for the month which includes the labor attributed to CACFP from Column 2 times Column 5 plus the amount computed in Column 7. Example: (2,000 x.1154) + (150 x.1154) = $248.11

8 Worksheets D: Administrative Labor (cont.) Total Annual Food Service Expense Amount of the Monthly Cost for CACFP multiplied by 12 months for an annual amount. Example: $ x 12 = $2, Total Applied CACFP Funds Determine how much of the annual cost for CACFP will be paid for with CACFP funds or if other funds will be used. These are allowable costs however it will be up to each business owner to determine how they plan to spend their CACFP reimbursement. Specific Prior Written Approval will be necessary if any of the administrative employees are also a member of the nonprofit institution, a trustee, director, associate, officer or the immediate family. This only required if CACFP funds are being used for that employee s salary.

9 Worksheet E: Administrative Fringe Benefits This worksheet is used to reflect any benefits paid to employees with CACFP duties and responsibilities. Such as health insurance, dental insurance, life insurance and/or retirement. Ensure that any benefit offered to one employee is also offered to everyone. Also ensure that you are following your employee handbooks. Employee Name The electronic version of the spreadsheet will carry over the names of the employees listed on Worksheet D. Type of Benefit List the type of benefit by the letters, you do not have to spell out each type. Except for any other, define it. Total Cost per Month Provide the total cost for these benefits. Percentage Attributed to Food Service This percentage is the amount computed based on the time spent on CAFFP from Worksheet D. Electronically it will populate for you. Percentage Paid by Employee This percentage added to the Percentage Attributed to Food Service will equal 100%. Total Monthly Amount Attributed to Food Service The amount computed from Column 3 times Column 4. Annual Expense for CACFP - This is Column 6 times 12 months. Annual Applied CACFP Funds Again the decision will be made as to whether CACFP funds will be used for this cost.

10 Worksheet F: Administrative Equipment This Worksheet list any equipment purchases that will be made in the upcoming fiscal year that will be directly expensed. You must be sure to follow federal procurement guidelines. If the SO wants to use CACFP money towards an expected purchase, Specific Prior Written Approval must be obtained first before the purchase is made. This form is attached to this budget, but we will discuss the form in detail at the end of this training. As a reminder for these types of expenses you will need at least three comparison quotes for each item to be submitted. Type of Equipment List the equipment that is going to be purchased. Example: Laptop Total Amount Cost Cost of the Item. Example: $300 Percent Allocated to CACFP Use a cost allocation method to determine the amount to be attributed to CACFP. This method must be submitted with the worksheet if CACFP funds are going to be used for the cost.

11 Worksheet F: Administrative Equipment (cont.) Total Equipment Expense for Food Service This will be the total cost of the item times the percentage attributed to CACFP. Annual Applied CACFP Funds A decision will be made if CACFP funds will be used for the purchase of this item. If they are using CACFP funds, then specific prior written approval is needed and three comparison quotes. Less Than Arms Length (Yes / No) Will this transaction be a Less Than Arms Length transaction, meaning it is a transaction under which one party to the transaction is able to control or substantially influence the action of the others. Less than Arms Length Transactions must be disclosed and justification provided. They also must receive Specific Prior Written Approval.

12 Worksheet G: Administrative Equipment (Depreciation) This cost item is listed in FNS Instruction Rev. 4 under the cost item #13 entitled Depreciation and Use Allowance. Depreciation and use allowances are means of allocating the cost of fixed assets to periods benefiting from asset use. The depreciation method used for the program should be consistent with the method used by the institution for its other federal sponsored and non-federal sponsored activities. Ensure compliance with Federal procurement guidelines. Type of Equipment Generally these are large ticket items such as a copier. Items that are defined by the IRS as needing to be depreciated. Example: Copier Purchased Date This is the date the item was purchased in the past or the expected date of purchase within this program year. Example: January 2, 2015 Depreciation Method An acceptable accounting method of depreciation would be straight-line, double declining, or any other method approved by the IRS (Internal Revenue Service). Total Original Cost Cost of the item. Example: $10,000 Percent Allocated to CACFP - Use a cost allocation method to determine the amount to be attributed to CACFP. This method must be submitted with the worksheet if CACFP funds are going to be used for the cost. Example: 10% based on a cost allocation using the total number of copies for CACFP as compared to the total number of copies used for the entire business (10/100 = 10%) Total Annual Depreciation Expense for Food Service - Computation of Total Original Cost times the Percent Allocated to CACFP calculated by the depreciation method. Example: $10,000 divided by 5 for Straight Line depreciation = $2,000, then x 10% = $200 Annual Applied Funds Determine if CACFP funds are to be used for this purchase or was used in the past and the depreciation cost for the prior year is being accounted for this year. If CACFP funds are used, you will need to submit the depreciation schedule if it was a prior year purchase. If you are planning to make the purchase in this year and use CACFP funds, you will need to submit three quotes for the item, the cost allocation plan, and a request for Specific Prior Written Approval. Less Than Arms Length (Yes / No) Will this transaction be a Less Than Arms Length transaction, meaning it is a transaction under which one party to the transaction is able to control or substantially influence the action of the others. Less than Arms Length Transactions must be disclosed and justification provided. They also must receive Specific Prior Written Approval.

13 Worksheet H: Administrative Supplies These are durable supplies that do not meet the definition of equipment. This includes the items such as copy paper, toner, and postage. Enter the Item A list is provided however these items may not always be used and there are spaces for other types of office supplies if the institution does incur the cost for CACFP purposes. Example: Copy paper Total Annual Cost The cost expected for the item for a year. Example: $100 Percentage Allocated to Food Service A cost allocation plan will need to be used if the items are not used 100% by CACFP. The cost allocation plan will also have to be submitted with the budget. For example, one method to determine the cost allocation for copy paper would be to know that one ream of paper out of a box of twelve is used for CACFP, so the cost allocation would be 1/12 = 8.33%. Total Annual Expense for CACFP Food Service The annual cost of the items times the Percentage Allocated to Food Service. Example: $100 x 8.33% = $8.33 for the annual cost for copy paper Annual Applied CACFP Funds Determine if this cost will be paid with CACFP funds. These items need the General Approval for being included in the budget.

14 Worksheet I: Communications Costs for communication services & supplies must be purchased or leased by the institution and do require specific prior written approval. Item Several line items are already included in the budget. They can be used or others can be substituted. Carrier Name Example: AT&T Phone Number List one number Total Monthly Cost Provide the monthly cost Number of Months In most cases this would be 12 for an entire year Percentage Allocated to Food Service Most likely this would not be 100% CACFP. Determine the time the phone service is used for CAFP purposes. Use a cost allocation plan of comparing minutes used for CACFP purposes with the overall total used minutes. This cost allocation plan will also have to be submitted with the budget if CACFP funds are used for these costs. Total Annual Expense for Food Service Operation This is Column 4 times Column 5 times Column 6 Annual Applied CACFP Funds Decision as to the amount that will paid with CACFP funds

15 Worksheet J: Rent and Utilities This worksheet is used for reflecting the rent and utilities for the SO. To complete this worksheet the following steps are taken: There is a drop down box to indicate if this is a Less than Arms Length Transaction, if the space is rented, or if it is a home office or corporate office Provide information pertaining to the Lessor/Landlord Name Address Contact Person Telephone Number Terms of the Lease Lease Cost Allocation Plan Monthly Amount of Lease Agreement Monthly amount of Utilities Total Lease and Utilities Percentage of Space and Time Allocated to CACFP This is determined using the cost allocation plan attached to this budget. It uses the total space available as compared to the space used for CACFP and the total time the space is used as compared to the time used for CACFP. Complete the cost allocation plan and carry the percentage from that sheet to this line. Monthly Cost for CACFP Line C time Line D Annual Expense for CACFP Operations - Line E times 12 months Annual Costs Paid by CACFP Funds Another decision as to whether CACFP funds are to be used for this expense. If CACFP funds are used, the cost allocation plan, the contracts and three comparison costs will need to be submitted with the budget.

16 Worksheet K: Insurance This worksheet will reflect the insurances required to be carried by the SO. Insurance policies are required to be submitted if CACFP funds are used for the expenditure. Type of Insurance Policy # Name of Company Total Insurance Cost Percentage Allocated to CACFP If less than 100% a cost allocation plan must also be submitted. Annual Cost to Food Service Operation Annual Applied CACFP Funds

17 Worksheet L: Administrative Contracted Services This worksheet is used for items such as the accountant, or other purchased services (usually professionally services). Item Several types of Contracted Services are listed. You do not have use these but can list the ones you do expect to have. Total Cost of Service The cost. Percentage Allocated to Food Service Again a cost allocation plan will be necessary if the costs are not 100% CACFP related. The cost allocation plan will have to be submitted with the budget if CACFP funds are used for the cost. Total Annual Expense for Food Service Operation Column 2 multiplied by Column 3 Annual Applied CACFP Funds How much of Column 4 will be paid for with CACFP funds. Any time CACFP funds are used, the cost allocation plan and all contracts will need to be submitted with the budget. The proper procurement procedures will also be adhered to. Which means that you will need to submit three quotes for the contracted services. Less Than Arms Length Transaction As we discussed before, these would be transactions where one party has control or influence into the decision.

18 Worksheet M: Administrative Travel These are the expenses involved in administering the CACFP such as travel for training or CACFP conferences. Enter the rate for mileage first in the spreadsheet. The Federal rate for travel is acceptable. At this time that rate is.56. You can use up to this amount, not more. Employee Name Example: Lucille Hall Travel Purpose and Location Example: Training / Raleigh Total Number of Miles Example: 100 Monthly Average Cost - This number will compute by multiplying the number of miles by the rate. Example: 100 x.56 = $56.00 Transportation Costs - This column would be used to reflect any costs that are incurred other than those reimbursed by the flat mileage rate. Such as a rental car and the gas costs. Meals and Lodging Costs involved in traveling overnight for CACFP purposes. Example: Training in Raleigh, involves an over night stay and a per diem is paid to the person attending the training. Example: Hotel = $65 + Per Diem for food = $40 totals $105 Number of Months for Food Service Determine how many months during the fiscal year that traveling is going to occur. Example: 1 month for training in Raleigh

19 Worksheet M: Administrative Travel (cont.) Average Annual Costs This will compute based on the costs in Columns 4, 5 and 6 times the Number of Months from Column 7. Example: ($56 + $105) x 1 = $161 Percent Allocated to Food Service Again if the travel is completely related to CACFP this would be 100% but if there are other reasons for the travel, it would need to be cost allocated. This method of cost allocation will have to be submitted with the budget. Total Annual Expense for food Service Operation - This is taking into consideration if the travel is cost allocated and the amount in this column is computed by multiplying Column 8 by Column 9. Example: $161 x 100% = $161 Annual Applied CACFP Funds Decision to be made if CACFP funds will be used to pay for these expenses. These items need General Approval in the budget. Submit any contracts involved if rental cars are used.

20 Worksheet N: Administrative Training This worksheet is used to reflect any costs associated with doing CACFP training. Type of Purchases Rental of a room to hold the training is one example that we see on budgets Total Annual Cost Percentage Allocated to Food Service Again a cost allocation plan will be necessary if the cost is not 100% related to CACFP. Total Annual Expense for Food Service Operation This is the amount of the expenditure from Column 2 by the Percentage in Column 3. Annual Applied CACFP Funds Again the decision as to whether CACFP funds will be used for this expense. This does require Prior Approval in the budget.

21 Worksheet O: Indirect Costs Indirect costs must be supported by the cost allocation plan that assigns an indirect cost rate. The SO must also submit a copy of the document that shows the indirect cost rate from their cognizant agency. Most Indirect costs are computed on the labor costs of the organization. Amount of Costs to be used for Computing the Indirect costs Rate Total Indirect Costs Amount to be Paid with CACFP Funds

22 Worksheet P: Sponsored Center s Administrative & Operating Costs This worksheet is used to consolidate the administrative and operating costs from each of the sponsored centers budgets.

23 Summary The Budget page shows how each category was electronically completed. The first page shows how the Total Annual Expenses column compares to the CACFP Funded Column. The Administrative Funding from CACFP Centers in Line 9(a) should equal the figure shown in Line 14 (Total Administrative Expenditures) in the CACFP Funded column. This means that the Sponsoring Organization has shown how they expect to spend all their CACFP reimbursement on CACFP foodservice related categories.