How CACFP Works

CACFP Background: Licensed family childcare homes (FCCHs) in CACFP receive different reimbursement rates based on their income and location. Tier 1 FCCH providers receive higher rates. Tier 1 FCCH providers are those in low-income areas or who are, themselves, individuals with low incomes. Overall, FCCHs generally serve more children from families with low income than childcare centers.
Study context: The Child Care Nutrition Enhancement Act is a recently introduced piece of legislation that would eliminate tiered CACFP reimbursements. Due to COVID-19, tiering was temporarily suspended. Structured interviews were conducted with Tier 1 and 2 FCCH providers in California to better understand the impact of eliminated tiers.
Findings: With high reimbursement rates, providers reported that CACFP reduced the financial burden and concerns for families. FCCH providers from both tiers advocated for eliminating tiers and increasing the reimbursement rate overall as food costs increase.
Recommendations: Eliminate the tiered reimbursement system and provide higher reimbursement rates for all child care providers participating in CACFP. These recommendations support the Child Care Nutrition Enhancement Act.

Background: Family childcare homes (FCCH) are one kind of childcare environment that can receive support from Child and Adult Care Food Program (CACFP). In order to participate, FCCHs must work with a sponsoring organization. Sponsors oversee logistics of participation, including administrative and financial management and ensuring FCCH training and compliance with CACFP requirements. The number of sponsors in the United States is declining, as the number of participating FCCHs declines. The decrease in sponsors raises concerns for equitable access to CACFP. The brief performed semi-structured interviews with 15 California CACFP family home sponsors to understand their challenges.
Sponsor Concerns: A primary concern of sponsors is inadequate administrative reimbursement. The interviewed sponsors emphasized two main impacted areas. First, sponsors lack tools to support non-English-speaking childcare providers. Second, sponsors lack resources to hire staff needed to complete sponsor tasks. As a consequence, sponsors lack resources to work with new FCCHs. A second primary concern of sponsors is the challenges that accompany FCCH visits. Sponsors are required to visit FCCHs three times at least three times a year. Twice must be unannounced, and one must be during a meal or snack. Sponsors report that visits are time-consuming and expensive, can be difficult to coordinate at a time providers will be present, and present staff safety concerns. Recommendations: Sponsors must be adequately supported through funding and training resources, and virtual alternatives to in-person visits could be explored.

The two-tiered meal reimbursement system instituted in 1997 within the child care homes portion of the Child and Adult Care Food Program added new duties for sponsoring organizations. Is the reimbursement of sponsors' administrative costs adequate now that tiering has added income status determination and accounting to their duties? As the number of sponsors declines, is the CACFP readily accessible to family child care homes?

The analysis in this report uses data from the 2019 National Survey of Early Care and Education (NSECE) to compare the general characteristics of childcare providers, both centers and day care homes, by CACFP participation status and eligibility. The NSECE is a nationally representative survey of childcare providers sponsored by the Office of Planning, Research and Evaluation (OPRE) in the Administration for Children and Families of the U.S. Department of Health and Human Services. The analysis also uses a follow-up data set to understand how the COVID-19 pandemic affected provider operations and CACFP participation.

Explanation of Child Nutrition Programs, including CACFP, version 24, "report describes how each program operates under current law, focusing on eligibility rules, participation and funding

The attention to CACFP gets to the core of issues of equitable access. The program is meant to financially support centers and homes that provide care for the children of low-income parents who are likely to be working at one or more low-wage jobs. One of the great ironies of the US food system is its employment of some of the most poorly paid workers in America—those who work on farms or in meat-packing plants, food-processing facilities, fast food chains, restaurants, grocery stores, and grocery delivery services—many of them immigrants, perhaps undocumented.9 History tells us it is no coincidence that providers of childcare are also among these low-wage workers, are predominantly women of color, and may well qualify for federal food assistance themselves.

The authors recommended that CACFP-administering agencies (1) dedicate resources to support the translation of CACFP materials into multiple languages; (2) increase outreach to promote awareness and provide nutrition training to license-exempt providers who are likely to be unaware of CACFP; (3) increase reimbursement rates; and (4) reimburse providers for additional meals.

Additinal recommendations
Eliminate tiering
Monitoring flexibilities
Easy to use software
National Promotional Campaign
Address Research Gaps

Providers of child day care services operating out of their homes may be reimbursed for meals and snacks served to participating children through USDA's Child and Adult Care Food Program (CACFP). To participate, these homes must be sponsored by a public or private organization that recruits the homes, trains them to follow CACFP rules, monitors compliance with the rules, and handles meal reimbursement claims and payments. CACFP reimburses sponsors for the administrative expenses incurred in conducting these activities. In 1996, Congress instituted a meal reimbursement system to better target benefits to low-income providers and children. The system created new administrative tasks for sponsors and a need for more time to be spent on some of the tasks conducted previously. This situation has raised concerns as to the adequacy of reimbursements. The decline in the number of CACFP sponsors--a 6-percent drop between 1995 and 2001--has further added to the concern. To address the issue, this study explores the administrative cost reimbursement system for CACFP sponsors that oversee the family child care homes portion of the CACFP. Costs reported by sponsors on average were about 5 percent higher than allowable reimbursement amounts. The report also presents and discusses alternative administrative reimbursement systems used by other Federal programs.

Context: The child and adult care food program (CACFP) transitioned from the oversight of the California Department of Education (CDE) to the California Department of Social Services (CDSS) July 1, 2021. This project was intended to inform the CDSS of administrative challenges and potential improvements of the CACFP. CACFPR and the National Policy Institute (NPI) interviewed independent childcare centers across the administrative regions of the CDSS. Specifically, CACFP and NPI interviewed independent childcare centers that directly contract with the state, those that operate under sponsors, and sponsors themselves.
Findings: Benefits and Challenges: Key benefits included food reimbursement, ability to support low-income families and communities, and access to nutrition guidelines. Independent childcare centers that operate under sponsors reported benefits of administrative oversight and provision of software. Benefits also included having a reliable source to ask questions and help ensure compliance with nutrition guidelines. Key challenges spanned across administrative challenges, technological challenges, and the difficulty of offering adequate culturally responsive food options. Independent childcare centers directly contracting with the state identified more challenges than those operating under sponsors.
Findings: Recommendations: Primary recommendations involved online chat-rooms and telephone access to improve communication with CACFP staff, and online and streamlined paperwork to reduce paperwork load. Additional recommendations included further support for meeting nutrition standards, and in preparation for administrative reviews. Childcare centers also recommended additional CACFP materials to share with families, and further guidance for offering culturally responsive options. Sponsors recommended more consistent, program-specific report communication from the state. Sponsors also requested more supportive relationships from CDSS and analysts, and quarterly meetings with other sponsors.

Differences in child nutrition programs (NSLP, SBP, CACFP, CACFP-At Risk AfterSchool, SFSP, SSO, Summer EBT, SMP, FFVP). Most of the programs are "appropriated entitlements” meaning that funding is mandatory but given through annual appropriations acts depending on participation levels. The biggest programs are the National School Lunch Program (NSLP) and School Breakfast Program (SBP) operating in 90,000+ schools. Federal funding is primarily done through per-meal cash reimbursements which differ based on the child’s eligibility which depends if the meal price is free, reduced-price, or paid. Some programs also get "entitlement commodities” which are foods purchased by the USDA for distribution. Additionally, the USDA keeps up to 3.5% of annual funding for federal administration and each state also receives administrative payments. Spending has increased over time due to higher participation in free meal programs and the creation of new programs (eg: Summer EBT). Federal subsidies are highest for the meals given to children from low-income families and there are 2 main paths for certification. One is a household application which depends on the household income leading to either free or reduced-price means. Then there is the categorical eligibility where children are eligible if they participate in programs like SNAP or if they are in foster care, homeless, a migrant, or a runaway youth. The Health, Hunger-Free Kids Act of 2010 required the USDA to align school meal nutrition standards with the Dietary Guidelines for Americans creating certain standards for amounts of fruits, vegetables, grains, dairy, and meats/meat alternatives. During the summer there are different programs that provide free or reduced meals which are Summer Food Service Program, Seamless Summer Option, and Summer EBT.

We found that the rate of access was 90% for children in home-based care and 86% for childcare centers. That is, low-income children in New Mexico who received a childcare subsidy were very likely to also receive CACFP-subsidized meals while in care, and even more so if they used their subsidy with a home-based provider.

A useful first step would be creation of a database of state CACFP policies, following the model of the Child Care Development Fund Policies Database supported by the US Administration for Children and Families.14 This database and others like it enable researchers to systematically consider differences in state regulations and policies as they investigate variations in child outcomes over time. Such research is needed to identify policies and practices that maximize low-income children’s health outcomes and their access to the federal nutrition programs designed for their benefit. Once policy best practices are evident, state policymakers could use the database of state CACFP policies for benchmarking purposes.

The origins of CACFP being a result of the “war on poverty” and its important update in 2017 to coincide with the Health, Hunger-Free Kids Act of 2010. The nutritional standards are governed by federal regulations and include: at least 1 serving of whole grains a day. Sugar limits for breakfast cereals (>6g) and yogurt (>23g). Milk should also be unflavored, using whole milk for children below one and unflavored low-fat or skim milk for children 2-5 years old. Tier reimbursement: higher reimbursement for those in Tier I but highest among low-income childcare centers compared to daycare homes. The USDA Food and Nutrition service tracks participation, issues guidance, and creates tools like recipes and worksheets. State agencies like education and health departments approve sponsors, disperse the funds, and monitor compliance. Sponsors are entities that help center and family childcare providers with the administrative paperwork. The childcare providers, and sometimes the state auditors and sponsors oversee the menu planning and food sourcing. The article talks about how national participation is low and how most programs meet nutritional standards but compliance is still imperfect. Childcare providers constantly point to the burden of paperwork, understaffing, and inflexible nutritional standards as barriers to their participation. Finally, the reimbursements can cover food costs but generally don’t account for labor costs. The policy recommendations: streamlining of administrative paperwork, increasing reimbursements to account for labor and healthy food costs, and simplify communication between state agencies and food vendors so the burden does not fall on providers.

There is a 2-tiered reimbursement system within CACFP. Tier 1 is a higher reimbursement for providers in low-income areas, those serving low-income families, or providers who meet the low-income guidelines themselves. Tier 2 is lower reimbursement for providers who do not meet the criteria of economic vulnerability. There was a temporary elimination of tiers that led to nutritional improvements and economic stability for both providers and families. There are barriers to CACFP participation, like the high food costs that often exceed reimbursement rates. Also, for those in tier 2, the paperwork may be even more difficult and take longer. There is also a discomfort expressed by providers with the 3 annual sponsor visits (2 of which are unannounced). A final barrier is the strict nutritional requirements that providers struggle to meet. The article recommends policy shifts to eliminate the tiered system, simplify administration, and provide ALL providers with the financial means to meet the nutritional standard. Additionally, increasing reimbursement rates can improve nutritional adequacy. Virtual monitoring during the pandemic can be used to permanently improve the program.

The CACFP Sponsor and Provider Characteristics Study is focused on the child care component of the CACFP, which provides federal funds for meals and snacks served to children in public or private child care centers, Head Start programs, outside-school-hours care centers, afterschool care programs, emergency shelters, and day care homes. The study also covered centers that participate in the At-Risk Afterschool (At-Risk) component, which provides meals to children and youth through age 18.

Policymakers or advocates who see CACFP primarily to support employment of low-income mothers by subsidizing their caregivers may not be concerned about the low rates of participation among low-income children, especially among those in exclusive parental care. However, because many poor women use unlicensed care and such care is eligible for general childcare subsidies, making unlicensed providers eligible for CACFP should also promote employment among low-income women. The exclusion of unlicensed providers is even more problematic for those who emphasize CACFP’s nutritional goals because children in unlicensed homes and exclusive parental care miss out on a nutritional benefit provided to equally needy children in licensed care. Finally, CACFP may be seen primarily to supplement other childcare subsidy programs or other food assistance programs. In this case, it might be more efficient to increase assistance in these other programs directly (if they are inadequate), rather than through the CACFP program that fails to reach many low-income children.

The program also indirectly supports the operational livelihood of program-enrolled facilities, which—through their care of children (and eligible adults)—provide an essential service and foundation for the community’s economic health by enabling workforce engagement among adults with dependents.

Fortunately, this issue has not gone completely unnoticed. Democratic and Republican senators recently came together to cosponsor the Expanding Childcare in Rural America Act of 2023, demonstrating this issue’s ability to overcome partisan politics. Unfortunately, the important connection between rural America’s childcare crisis and the documented underuse of CACFP has received minimal recognition in the literature and policy discourse to date (with Erinosho and colleagues’ conclusions regarding the dearth of rural CACFP sponsors being an exception11). With the White House working alongside federal agencies and local partners to rejuvenate rural economies via initiatives such as the Rural Partners Network and with Congress considering policies to address the national childcare crisis, the time is now to study and address rural disparities in the reach of CACFP.

This study explored barriers and facilitators of ECE participation in CACFP, and identified strategies to promote participation by eligible programs

Key barriers to CACFP participation included cumbersome enrollment and reimbursement paperwork, strict eligibility requirements, concerns about non-compliance penalties, strict meal patterns, low-reimbursement levels, and lack of on-site cooking facilities. Facilitators identified by participants were the outreach and technical assistance provided by stakeholders and sponsors, paperwork organizational systems established by sponsors, and trainings and nutrition education provided by stakeholders and sponsors

The study objectives specified in the Act concern the impact of reimbursement tiering on the number of family child care homes participating in the CACFP, the number of CACFP sponsoring agencies, and the total number of licensed child care homes, independent of their
participation in the CACFP.

Background: U.S. Child and Adult Care Food Program (CACFP) provides tiered reimbursements for meals served in eligible family childcare homes (FCCH). Higher tier 1 reimbursements apply to providers who operate in low-income communities or are personally living on a low income. Tier 2 reimbursements apply to all other FCCHs. The tiered structure is intended to direct resources toward low-income families. However, the same program requirements apply to all FCCHs, which presents administrative burdens that can limit access to CACFP.
The Context of The Study: The USDA temporarily waived tiered reimbursements in response to increased food insecurity during the COVID-19 pandemic. The waving of tiers allowed all FCCHs to access higher reimbursement rates, and tier 2 providers’ reimbursements more than doubled. California FCCH providers were surveyed about their experiences with the higher reimbursement rates. 518 surveys were analyzed to understand providers’ perceptions of current impacts and future challenges of the reinstated tier system.
Survey Findings: Impacts of Higher Reimbursement Rates: Over half of the providers across tier 1 and 2 reported the following impacts: ability to pay less out of pocket for food costs, serve a greater variety of foods, and serve better quality foods. Additional reports included the following impacts: ability to serve more meals and snacks, choose more options children like, and not charge families more for childcare or food costs. The vast majority of providers across tier 1 and tier 2 also reported that it was easier to implement CACFP’s nutrition guidelines. Significantly more tier 2 providers reported benefits from the higher reimbursement rate, overall.
Survey Findings: Anticipated Changes After Tier Reinstatement: Providers across tier 1 and 2 reported that they would have to charge families more for childcare and decrease the variety of foods provided. Under half of providers reported that they anticipated withdrawing from CACFP or ending their childcare business after tiers returned.
Recommendations: Increased reimbursement rates for all FCCHs may support increased FCCH participation in CACFP, and ensure that more children benefit from nutritious meals and snacks.

A look at license-exempt care and the CACFP in three states: Illinois, Louisiana, Oregon. CACFP is inaccessible to the majority of license-exempt home-based childcare providers because many states do not allow them to participate in the program. Due to this exclusion many vulnerable populations like children from immigrant families don’t get access to nutritious food. Food insecurity affects 1 in 8 children as of 2021 and the article refers to the license-exempt home-based childcare providers as an “untapped potential” for public health intervention. This is because there are 11.5 million children cared for in LEHBCC settings and these providers are more likely to serve infants, toddlers, children with disabled, and parents working non-traditional hours. However, state-level discretion can hinder whether children can access CACFP. The article lists some barriers such as the administrative burden, inadequate support from CACFP sponsors especially for small home-based providers, the unannounced visits that are particularly challenging for at-home care providers, and the rural and immigrant communities who have accessibility and language barriers. The paper outlines recommendations for nutrition policy such as broadening eligibility, creating financial incentives for sponsors, making federal policy more flexible, and working with community organizations to reach underserved populations.

Explains what is CACFP, the history of CACFP, history of its laws and regulations for context of current standards, and the latest opportunity for comment

This paper describes facilitators, barriers, and potential strategies to promote participation in the Child and Adult Care Food Program (CACFP) by family child care homes (FCCHs). 

The brief reports results of a survey of 277 CACFP-participating Family Childcare Home (FCCH) providers showed, and interviews with 10 FCCH providers, 5 sponsors, and 5 family-recipients. FCCH providers are individuals who offer childcare in residential home settings. Sponsors are public or nonprofit private organizations that manage the administration of CACFP to licensed family childcare homes and childcare centers. Family-recipients are the families of the children who receive the meals reimbursed by CACFP.
Only half of qualifying providers participate in CACFP, and participation is declining especially for FCCH. This is partially due to insufficient reimbursement. Based on survey and interview data, policymakers propose additional meal imbursements to reverse these trends.
CACFP reimburses up to 2 meals and 1 snack daily, provided they meet the nutrition requirements. On average, providers want 4 meals and snacks (in total, not respectively) offered daily to better serve the children in their care. For many children, the meals they receive in family childcare are the only meals they are guaranteed throughout the day. Reimbursement of additional meals would provide resources to enhance child nutrition and food insecurity.