Food and Nutrition Service (FNS) Child and Adult Care Food Program

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Agriculture

View on Federal Program Inventory

PROGRAM METRICS

$4,245 M

in FY 2025 outlays, with a

89.5%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    12/2015 - 01/2018


    Confidence interval:

    There is no confidence level associated with the estimate


    Margin of error:

    +/-0.0

Causes

-Address/Location- For Child and Adult Care Food Program (CACFP) Family Day Care Homes (FDCH), sponsors determine geographic eligibility based on either: a) the FDCH is located within attendance area of a school in which at least 50 percent of the enrolled children are certified eligible for free or reduced-priced meals; b) the FDCH is located within a Census Block Group or Tract in which at least 50 percent of the children live in households with incomes at or below 185 percent of federal poverty guidelines, or if a weighted average of the percent of eligible children in up to three adjacent Census Block Groups is at least 50 percent. Although FDCHs are classified as Tier II by default, those meeting the above eligibility criteria are classified as Tier I which has a higher reimbursement rate. For At-Risk Afterschool programs, to be eligible to participate in the At-Risk Afterschool Meals component of CACFP, a Program must be located in an eligible area. Area eligibility determinations must be based on the total number of children approved for free and reduced-price school meals. A site is eligible if it is located in the attendance area of a public school (an elementary, middle, or high school) where at least 50 percent of the students are eligible for free or reduced-price meals under the National School Lunch Program. -Financial- For FDCHs, sponsors determine provider income eligibility based on either: a) the FDCH provider's household income is at or below 185 percent of the federal poverty guidelines for their household size; or, b) the FDCH provider is eligible for Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and/or Food Distribution Program on Indian Reservations (FDPIR). Although FDCHs are classified as Tier II by default, those meeting the above eligibility criteria are classified as Tier I, which has a higher reimbursement rate. In centers, participants from households with incomes at or below 130 percent of poverty are eligible for free meals. Participants in centers with household incomes between 130 percent and 185 percent of poverty are eligible for meals at a reduced price. Institutions must determine each enrolled participant's eligibility for free and reduced-price meals served in centers. -Household Size- For FDCHs, sponsors determine provider income eligibility based on either: a) the FDCH provider's household income is at or below 185 percent of the federal poverty guidelines for their household size; or, b) the FDCH provider is eligible for SNAP, TANF, and/or FDPIR. Although FDCHs are classified as Tier II by default, those meeting the above eligibility criteria are classified as Tier I, which has a higher reimbursement rate. In centers, participants from households with incomes at or below 130 percent of poverty are eligible for free meals. Participants in centers with household incomes between 130 percent and 185 percent of poverty are eligible for meals at a reduced price. Institutions must determine each enrolled participant's eligibility for free and reduced-price meals served in centers. Percent poverty is calculated by comparing pre-tax cash income against a set of money income thresholds, adjusted for household size. -Receiving Benefits from Other Sources - For FDCHs, providers must submit self-reported information on benefits received from other sources to their sponsors, so that sponsors can determine provider's eligibility for Tier 1 reimbursement. Program staff must compute provider self-reported benefits received from other sources in combination with the providers income. Children whose families receive benefits from SNAP, FDPIR, or State programs funded through TANF are categorically eligible for free meals in childcare centers. Adults who receive SNAP benefits, FDPIR, Social Security Income, or Medicaid benefits are categorically eligible for free meals at adult day cares. In all settings, providers must self-report with care to avoid misreporting their benefits received from other sources.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M
Amount of overpayments outside the agency's control $312.05 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $312.05 M

Underpayment root cause Underpayment amount
Amount of underpayments $133.74 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $133.74 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $0.0 M

Prevention

-Change Process- Released Summaries on Child and Adult Care Food Program (CACFP) Integrity Studies: The Food and Nutrition Service (FNS) released summaries of two integrity studies - the Erroneous Payments in Childcare Centers Study (EPICCS) and a Family Day Care Home (FDCH) meal claiming error feasibility study. EPICCS presented key findings relating to broad patterns in CACFP error and highlighted areas for improvement. The improper payment estimates from this study are used as a baseline for calculating annual improper payments, with adjustments using administrative data. The FDCH feasibility study aimed to estimate improper payment rates in FDCHs by using existing data from State monitoring reviews. Child Nutrition (CN) Program Integrity Final Rule Implementation: The CN Program Integrity Final Rule made several changes to the program's oversight process. One provision, which took effect just prior to the start of FY 2025, requires State agencies to increase the frequency of their monitoring of sponsoring organizations with recently identified serious management problems, and sponsors determined to be at risk for serious management problems. Another provision that also took effect just prior to the start of FY 2025 strengthens the States' review of sponsoring organizations' finances. -Automation- Non-competitive Technology Innovation Grants (nTIGs): In FY 2025, FNS released $28M in nTIG funds for CN State agencies to improve information technology (IT) systems. FNS works with grant recipients who are using nTIG funds to develop, improve, and maintain CN IT systems. FNS expects that the overall improvement of IT systems by nTIG recipients administering CACFP will improve the State agency's ability to train, monitor, provide technical assistance, and complete corrective actions. FY 2025 CN State Agency Conference: This December 2024 conference served as a forum for information exchange across States on topics including but not limited to enhancing program integrity. A general session was specifically dedicated to program integrity, and it covered topics like improper payment measurement and fraud investigations. Area Eligibility map updates: FNS updated its Area Eligibility map in October 2024 with new data for FY 2025 and features improving user-friendliness. The map is one tool used by sponsors and States to assist when making tiering determinations for FDCHs. Outlier detection using statistical modeling: FNS has developed a statistical model in cooperation with USDA's National Agricultural Statistics Service. The model uses State-submitted administrative data and detects inconsistencies between data elements, and in comparison to historical trends. In FY 2025, FNS established procedures for monthly runs of the model with compilation and documentation of potential outlier trends.
-Change Process- Released Summaries on Child and Adult Care Food Program (CACFP) Integrity Studies: The Food and Nutrition Service (FNS) released summaries of two integrity studies - the Erroneous Payments in Childcare Centers Study (EPICCS) and a Family Day Care Home (FDCH) meal claiming error feasibility study. FNS used EPICCS results as a baseline for calculating annual improper payments in CACFP centers, with adjustments using administrative data. The results of the FDCH feasibility study help shape methodology for future studies as FNS continues to invest in the identification of a method for assessing meal claiming error in FDCH. The EPICCS research provides FNS with fresh information on root causes that will allow the agency to tailor its corrective actions for the next handful of years. Child Nutrition (CN) Program Integrity Final Rule Implementation: The CN Program Integrity Final Rule codified an increase in the allowed allocation of audit funds a State can request. The funds are utilized for the purposes of conducting audits, handling audit resolution activities, performing monitoring of CACFP institutions, and improving State CACFP integrity staffing and systems. -Automation- Non-competitive Technology Innovation Grants (nTIGs): FNS expects that the overall improvement of information technology (IT) systems by nTIG recipients administering CACFP will improve the State agency's ability to train, monitor, provide technical assistance, and complete corrective actions. FY 2025 CN State Agency Conference: The conference provided the opportunity for State and local agencies to participate in technical training, share best practices or lessons learned, and expand program knowledge. Area Eligibility map updates: Sponsors and States use the Area Eligibility map to assist with accurate assessments when making tiering determinations for FDCHs. Keeping the map up to date and improving user experience advances data integrity by reducing error in these determinations. Outlier detection using statistical modeling: FNS and USDA's National Agricultural Statistics Service developed a statistical model to detect inconsistencies in administrative data submissions from States. In FY 2025, FNS established procedures for monthly runs of the model with compilation and documentation of potential outlier trends. FNS will continue to analyze results for model adjustment and validation.

Given the highly decentralized nature of the Child and Adult Care Food Program (CACFP), it is cost prohibitive for the Food and Nutrition Service (FNS) to calculate annual improper payment rates and dollar values using a census approach. Instead, FNS must rely on estimates developed through periodic studies. FNS has developed a measurement methodology for the Family Day Care Home (FDCH) Tiering Decision component of the program, an interim measurement for the FDCH meal claiming component, and a separate methodology for the remaining components of Child Care Centers and Adult Day Care Facilities via the Erroneous Payments in Child Care Centers Study (EPICCS). Because requirements vary significantly by program component, a full and rigorous assessment of the rate of improper payments is extremely complex. Due to the complex and periodic nature of improper payment estimation in CACFP, FNS places priority on updating the methodology as a corrective action. While other corrective actions target improper payment reduction in a more direct manner, FNS is unable to quantify the effects of these actions without a new baseline. As such, collecting and analyzing newer data is essential for assessing the adequacy of current and past actions, as well as informing FNS for new potential future corrective actions. FNS is committed to and actively working on improving its methodology and data quality for estimating improper payments.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Automation, Change Process Automation, Change Process
Underpayments Automation, Change Process Automation, Change Process

Eligibility element/information needed Description of the eligbility element/information
Address/location Information regarding where the applicant/recipient lived, owned property, or was physically present in a specific location
Financial The financial position or status of a beneficiary, recipient, or their family
Household Number of family members in a household
Receiving Benefits from Other Sources Beneficiary or recipient is receiving benefits from an additional source

Additional information

The Food and Nutrition Service (FNS) conducted several studies over several years to identify a reliable method for measuring Child and Adult Care Food Program (CACFP) Family Day Care Home (FDCH) meal counting error. To date, this effort has not generated a cost-effective solution to the agency's improper payment reporting challenge. Due to this lack of a feasible methodology, FNS has not reported on meal counting error in the past. Following consultation with USDA's Office of Inspector General (OIG) and the Office of Management and Budget (OMB), FNS will report an interim estimate of meal counting error in FY 2025, informed by the findings and limitations of past research. In the recent Family Day Care Homes Meal Claims Feasibility Study, the meal claiming error rates were 20.0% and 18.9% from two different approaches using the data collected by the study. However, the sampling method was not nationally representative, and these results are not generalizable, as the study was meant to serve as a feasibility test. Additionally, these estimates include overclaims due to meals served outside the service window or due to exceeding the provider's maximum capacity approved by the State. After discussion with OMB, FNS is using 20.0% as the meal counting error rate in FDCHs for FY 2025 reporting. This is the highest estimate from recent feasibility studies, so the agency believes it places an upper bound on improper payments due to meal counting error. The report detailing the study specifies that this estimate includes causes of error that FNS generally excludes from its criteria for measuring meal counting error in other programs, indicating that it is known to be an overstatement of error. As FNS continues to research approaches to measuring meal claiming error, FNS will consider this an interim estimate and will replace it once the agency has established a more suitable method.

Reduction target

10.27 %

The Food and Nutrition Service (FNS) has a comprehensive system of internal controls that include State agency (SA)-led Administrative Reviews (ARs) of sponsors, FNS-led Management Evaluations (MEs) of SAs, and various meal claim validation checks conducted by sponsors, SAs and FNS. FNS, the States, and sponsors developed these controls over many years. FNS periodically evaluates and adjusts its AR and ME processes in response to evolving risk in the programs. FNS believes that these controls, a combination of on-site reviews, off-site reviews of documentation, and automated edits checks, are the right tools to identify program error that leads to improper payments. These are resource-intensive processes. However, FNS believes that the agency, the SAs, and sponsors have adequate human capital and information system resources to carry them out effectively. Federal reimbursement for state administrative expenses (SAE), federal grants for State technology projects (Technology Innovation Grants or TIGs), and the federal budget for Child Nutrition payment accuracy, among other resources, fund these systems and oversight activities.

-Training and Technical Assistance- The 2026 USDA Budget Explanatory Notes for the Food and Nutrition Service (FNS) assumes $53,212,000 for Training and Technical Assistance. Effective and continual training and technical assistance are necessary to help states properly administer the Child Nutrition Programs and to ensure States are equipped to identify and prevent fraud and abuse. The increase is due to inflation. The decrease in full time equivalents (FTEs) is focused on restructuring the workforce and seeking efficiencies in operations. -Child Nutrition Studies- The Budget assumes $21,918,000 to conduct a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively, which include improving public health, and nutrition. This program line supports the critical evaluations needed for the Child Nutrition Programs, including the Federal staff needed to oversee this vital work. The increase is due to inflation. The decrease in FTEs is focused on restructuring the workforce and seeking efficiencies in operations. -Child Nutrition Payment Accuracy- The Budget assumes $16,189,000 to support FNS's robust Federal oversight, monitoring, and technical assistance, which are essential to the identification, prevention and resolution of erroneous payments. The increase is due to inflation. The decrease in FTEs is focused on restructuring the workforce and seeking efficiencies in operations.

The Food and Nutrition Service (FNS) Child and Adult Care Food Program (CACFP) has implemented binding agreements to operate the program according to all program rules. FNS has a robust review process that includes State-level review of local program operators and FNS-level reviews of States to ensure program integrity within the program. FNS Regional Offices are completing three (3) Management Evaluations (MEs) per region, each of which also includes a local level review where FNS staff accompany State agencies (SAs) on reviews of operators. MEs provide a periodic assessment of SA operations and administration and can result in a report of findings, which require the SA to correct any problems. This helps to ensure that SAs are properly monitoring certification and meal counting at the local level and are working with local operators to reduce improper payments. Additionally, at the federal level, senior executives are held responsible for program oversight and integrity via the annual strategic planning process and performance system.

$133.74 M