It has come to our attention that there is still some question regarding the ability of state agencies and sponsoring organizations to use “stop payments” (suspension of all program reimbursement to institutions or providers) as a tool to enforce an institution or a provider’s compliance with program requirements.
This Instruction provides clarification of the appropriateness of using program funds for child care standards compliance. Section 226.4(a) of program regulations provides that "FNS shall make funds available to each state agency to reimburse Institutions for their costs in connection with food service operations, including administrative expenses .... "It is Incumbent upon Institutions to use program payments only for costs Incurred In operating and administering the program.
This instruction will clarify (1) program eligibility requirements for outside-school-hours care centers (OSHCCs) and (2) the prohibition against program coverage of extracurricular activities in schools operating as OSHCCs.
This instruction is intended to clarify our policy concerning the participation of proprietary Title XX centers as stipulated in the Child Care Food Program regulations.