Identifying False Claims and Potential Fraud the CACFP
October 21, 2026
USDA released a memorandum providing guidance to help state agencies recognize warning signs of potential fraud and respond quickly when improper claiming practices are suspected. The guidance reinforces the importance of strong program oversight, accurate recordkeeping, and timely corrective action to protect CACFP funding and maintain public trust.
Why It Matters
While the guidance is directed to state agencies, CACFP sponsors, centers, and family child care homes should also take note. The guidance highlights the types of claiming practices that may trigger scrutiny, investigations, serious deficiency actions, suspensions, and repayment of funds. Maintaining accurate records, documenting attendance, and ensuring claims reflect actual participation are essential safeguards against findings of noncompliance.
USDA Guidance
State agencies serve as the frontline of defense in protecting Child and Adult Care Food Program (CACFP) funds. Effective claims oversight is essential to prevent fiscal waste, ensure compliance, and uphold public trust. As stewards of Federal Program funds, State agencies must remain vigilant in identifying unusual claiming patterns, errors, or practices that could indicate potential fraud. This memorandum provides guidance to help State agencies recognize common red flags, take timely corrective action, and ensure that Program operations remain compliant, transparent, and protective of taxpayer resources.
By reinforcing State agency oversight efforts in institution recordkeeping compliance, you are fulfilling your essential role of safeguarding the integrity of the Program, maximizing the impact of taxpayer dollars, and protecting access to CACFP for participants.
Identifying False Claims and Potential Fraud
Effective claim oversight is essential to prevent fiscal waste, ensure compliance, and uphold public trust. While some errors stem from operator mistakes, others may signal potential fraud requiring decisive action. State agencies should utilize existing resources, such as edit checks, to identify potential fraud and initiate the serious deficiency (SD) (7 CFR 226.6(c)(3)) and suspension processes (7 CFR 226.6(c)(5)(ii)) swiftly to address false or fraudulent claims. When potential fraud is identified, the Food and Nutrition Administration (FNA) recommends initiating both the SD process and the suspension process simultaneously (7 CFR 226.6(c)(3)(iii)). Identifying red flags and taking swift action is critical for protecting taxpayer dollars and maintaining Program integrity.
The table below provides examples for when states must initiate the SD process and should simultaneously start the suspension processes.
Read the full guidance: Identifying False Claims and Potential Fraud in the Child and Adult Care Food Program (CACFP 03-2027).