Computation of Reimbursement

Claims Calculations Options

7 CFR 226.11(c)(5) explains the methods available to a state agency to compute reimbursement. 


  1. Actual counts. This one is the most straightforward. The number of meals served to each participant in each income eligibility category is multiplied by the reimbursement rate for that meal or snack. In order to calculate a claim this way, the site needs to be taking meal counts by name (not headcount).
  2. Claiming percentages. This method assumes that you do not have meal counts by name. So, instead we divide up the meals into Free, Reduced and Paid in the same proportion as the participants overall and then do the same math as above.  You have the option to either round down or use conventional rounding, which allows the My Food Program claim estimates to match exactly the claim amounts calculated by state agencies with different rounding protocols.
  3. Blended rates. This method also assumes that you do not have meal counts by name. Instead of dividing up the meals into Free, Reduced and Paid, we calculate a "weighted average" reimbursement rate for each meal type based on the proportion of participants overall. Then we multiply the weighted average meal rate by the total meals by type.


The sponsor selects the claims calculation options in Site Details under Reimbursement Method

IMPORTANT NOTE

The number of participants in each income eligibility category is determined by two things:


1. The method that your state uses to determine which participants are included (see article: FRP Classification Method)


2. The tier status of the family day care home and/or the income forms entered into My Food Program except for at-risk afterschool program and emergency shelters. All participants in at-risk afterschool meals programs and emergency shelters are automatically placed in the "Free" category.

Claim Distribution for Sites Other than Family Child Care Homes

My Food Program uses the FRP Classification Method and the additional information to calculate a total claim. For site types other than Family Child Care Homes, we then break that claim down into:

  • Operating
    • Food Service Reimbursement
    • Cash in Lieu of Commodities
  • Admin


This distribution is included at the bottom of the Claim Summary Report.

Administrative Funds

Sponsors are allowed to spend up to 15% of their Food Program funds on administrative costs. 


  • If you are self-sponsored (i.e. signed up directly with the state agency) then those funds are kept within your organization. 
  • If you have a sponsor, then the administrative funds are retained by the sponsor in return for taking on the administrative responsibilities.


To calculate the amount of money in the claim that is set aside for administrative funds, we look at the "Sponsor Percentage" field in Site Details

Cash-in-Lieu of commodities is a separate payment made for lunches and suppers only. Since this is a direct payment for food service, it is not included in the calculations for administrative funds.

This is how My Food Program calculates Administrative Funds:

  1. Take the total claim value and subtract the cash-in-lieu of commodities amount.
  2. Multiply the result from step #1 by the sponsor percentage. We call this the Admin Funds.

Operating Funds

Operating Funds are the amount leftover after taking out administrative funds and also includes cash-in-lieu of commodities.

This is how My Food Program calculates Operating Funds:


Method #1

Take the total claim value and subtract the administrative funds. We call this the Operating Funds.


Method #2

  1. Take the total claim value and subtract the cash-in-lieu of commodities amount.
  2. Multiply the result from step #1 by (100% - sponsor percentage). We call this the Food Service Reimbursement.
  3. Take the result from step #2 and add back in the cash-in-lieu of commodities amount. We call this the Operating Funds.

Example Calculation

Let's take a look at a sample claim calculation.

Let's start with the Admin Funds. How did My Food Program get that answer?


We started by taking the total claim and subtracting cash-in-lieu

  • Total Claim $5114.01 - Cash-in-Lieu of $419.70 = $4694.31


Next, we multiplied it by the sponsor percentage, which in this case was 12%

  • $4694.31 x 12% = $563.32


Now let's look at the Operating Funds. How did My Food Program get that answer?


Method #1 is easy! Just take the total claim and subtract the administrative funds

  • Total Claim $5114.01 - Admin Funds $563.32 = $4550.69


You will get the same result with Method #2. Start the same way as above by subtracting cash-in-lieu by the total claim.

  • Total Claim $5114.01 - Cash-in-Lieu of $419.70 = $4694.31


Next, multiply that result by 100 - sponsor percentage, or in this case 88%

  • $4694.31 x 88% = $4130.99


To get the total Operating Funds, add back in the cash-in-lieu:

  • $4130.99 + 419.70 = $4550.69

Still need help? Message Us