The U.S. Department of Agriculture’s Food and Nutrition Service (FNS) administers the program through grants-in-aid to States. The program is administered within most States by it’s designated educational agency, such as New York’s Education Department. In certain States, the program is administered by an alternate agency, such as the State department of health, family and/or social services. At the discretion of the State’s Governor, different agencies may administer the program’s child-care and adult day-care components, such as Wildwood C.A.C.F.P in Colorado. In the State of Virginia, the program is directly administered by the Food and Nutrition Service Mid-Atlantic Regional Office (MARO).
Actual federal assistance provided to States and their designated agencies are in the form of cash reimbursement for meals served, and any other donation by the USDA to provide such meals. Program funds are provided to States through letters of credit issued under the FNS Agency Financial Management System. The States, in turn, use the funds to reimburse institutions for costs of actual operations (e.g. providing meals), as well as to support State administrative expenses. Generally, a State’s claim to cash reimbursement from the USDA is computed by first determining the number of meals served (by category and type), and multiplying the amount of service by a per-unit payment rate, also known as the “reimbursement rate.” The “type” of meal refers to the kind of meal service for which the institution seeks reimbursement, such as breakfasts, lunches, snacks, supplements, and dinners served. The “category” refers to the type of economic need of the child or adult to whom a meal is served, which can be categorized as “paid,” “reduced price,” or “free” meals.
Child-care, adult day-care, and outside-school-hours centers may charge a single fee to cover tuition, meals, and all other day care services to recoup certain costs, however the vast majority of these centers operate non-pricing (free) programs. Nevertheless, all institutions must determine the eligibility of children and adults enrolled at these centers (e.g. low-income, mentally or physically disabled, etc.) for free or reduced price meals because such eligibility determinations affect the reimbursement rates for meals served to the participants. After-school at-risk programs, emergency shelters, and family day care homes are prohibited from charging separately for meals.