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EFAP Section 7

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EFAP Procedures Manual Section 7: Fiscal Management and Reporting

All WSDA FA EFAP forms and publications listed in this section are found here.

7.1 Allowable Activities and Expenses

  1. Bill Only Allowable Activities and Expenses.
    1. Lead Agencies and Sub Agencies will ensure that their operations adhere to a policy of good stewardship of public funds. Agencies are allowed to use funds for eligible administrative and operational expenses that are necessary to ensure the efficient and effective operation of the program including direct service expenses, agency indirect expenses, equipment, equipment repairs, and capital improvements.
      1. Pass-through funding issued to Sub Agencies and expended in a way consistent with this Section is an allowable cost.
      2. Unless otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under EFAP.
    2. Allowable costs must:
      1. Be necessary and reasonable for the performance of the grant and be allocable to this program or its purpose.
      2. Be consistent with policies and procedures and other activities of Food Assistance (FA).
      3. Costs incurred in like circumstances must be treated consistently, including being identified as either direct or indirect costs, and administrative or operational in nature.
      4. Be determined in accordance with Generally Accepted Accounting Principles (GAAP).
      5. Be adequately documented per program requirements.
      6. Costs must be incurred during the approved budget period.
      7. Have prior written approval for all capital asset purchases and repairs (equipment purchases, equipment repairs, and capital improvements) of $10,000 or more per unit.
  2. Allocating Costs.
    1. A cost is allocable to EFAP in accordance with the relative benefits received by the program. The standard for allocating a cost to EFAP is met if the cost satisfies any of the following criteria:
      1. The cost is incurred specifically for EFAP.
      2. The cost benefits EFAP and can be distributed in proportions that may be approximated using reasonable methods.
      3. The cost is necessary to the overall operation of the Lead or Sub Agency and is assignable in part to EFAP in accordance with cost principles found in 2 CFR §200.405.
    2. If a Lead or Sub Agency has determined that a cost can be distributed in proportion to EFAP and other funding sources or programs – especially if it involves multiple FA funding sources – then FA will often require documentation of the reasonable method used to identify the proportions billed to EFAP and other FA programs if needed.
    3. For additional guidance on determining allocable costs to EFAP, it is recommended that you speak to an Auditor or Accountant familiar with Cost Allocation Plans.
  3. Allowable Direct Costs.
    1. Allowable direct costs are those that can be identified specifically with EFAP, or that can be directly assigned to such allowable activities relatively easily with a high degree of accuracy. Direct costs may include expenses from activities that are Administrative or Operational in nature.
      1. Administrative costs are “overhead” or general administration costs supporting the overall operation of an organization that are direct charged to EFAP. Administrative activities may include planning, budgeting, accounting, and human resources.
      2. Operational costs are incurred in day-to-day activities distributing food to clients or eligible Sub Agencies.
    2. Lead Agencies and Sub Agencies are allowed to use EFAP funds for costs that are necessary to ensure the efficient and effective operation of the program. Some examples of allowable costs in EFAP include:
      1. Personnel costs – salaries, wages and fringe benefits for personnel related to warehousing or distribution of foods, providing direct client services, or eligible outreach and networking activities.
        1. Incentive compensation is allowable when reasonable and paid in accordance with an agreement entered into prior to the rendering of services (see 2 CFR §200.430(f)).
      2. Travel/Transportation – mileage expenses related to direct provision of this program and services such as costs to pick up and deliver food, or transportation of clients to and from the distribution location, if necessary.
        1. Reimbursement for travel expenditures must comply with state policies published in Chapter 10 of the State Administrative & Accounting Manual (SAAM) at https://ofm.wa.gov/sites/default/files/public/legacy/policy/10.pdf.
        2. Mileage reimbursement and per diem rates must not exceed the rates published in SAAM Ch. 10, Sec. 90, which may be periodically updated. Airfare costs in excess of the customary standard commercial airfare (coach or equivalent), Federal Government contract airfare, or the lowest commercial airfare is unallowable.
      3. Space costs – rent or lease payments for facilities and costs of power, heat and water for space. When direct charged, these facilities are typically occupied by program staff, for EFAP storage, activities, and warehouse areas.
      4. Communications such as telephone, postage, mailing, printing, copying, and associated with EFAP operations and program administration.
      5. Nutrition education for EFAP clients.
      6. Insurance and audit costs.
      7. The transport, storing, handling, repackaging, processing, and distribution of foods.
      8. Other operational costs, such as supplies (including office supplies), lease and repair of equipment directly related to providing services.
      9. Essential non-food items, limited to the allowable percentage as outlined in the Agreement (up to 25 percent of an agency's allocation). These items include cleaning supplies, dental adhesive, deodorant, detergent, diapers, dish soap, facial tissue, feminine products, hand soap, paper towels, napkins, shampoo, shaving products, teeth/denture cleaner products, toilet paper, and toothbrushes.
  4. Allowable Indirect Costs.
    1. Indirect costs (also known as “facilities and administrative costs”—defined in 2 CFR §200.414) are those costs incurred for a common or joint purpose benefitting more than one cost objective and not readily assignable to the cost objectives specifically benefitted without effort disproportionate to the results achieved. An agency may charge its indirect costs proportionally.
      1. “Facilities” is defined as depreciation on buildings, equipment, and capital improvement, interest on debt associated with certain buildings, equipment, and capital improvements, and operations and maintenance expenses.
      2. “Administration” is defined as general administration and general expenses such as the director's office, accounting, personnel, and all other types of expenditures not directly or easily attributable to this program.
    2. Any non-federal entity (Lead or Sub Agency) that does not have a current negotiated (including provisional) federal indirect cost rate, except state and local government, and Indian Tribe Indirect Cost Proposals, may elect to charge a de minimis rate of 15 percent of modified total direct costs (MTDC) which may be used indefinitely.
      1. No documentation is required to justify the 15 percent de minimis indirect cost rate.
      2. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a recipient chooses to negotiate for a rate, which the recipient may apply to do at any time.
      3. Indirect charges may not exceed the de minimis rate of 15 percent unless the agency has a federally approved negotiated indirect cost rate.
    3. If a Lead or Sub Agency has a negotiated indirect cost rate approved by its cognizant agency, the Lead or Sub Agency must indicate their intent to use the approved rate in the Agreement (as applicable), submit a copy of its approved Negotiated Indirect Cost Rate Agreement (NICRA) letter to FA or their Lead Agency (if a Sub Agency), and send rate updates as changes occur throughout the Agreement period.
      1. Entities that would like to negotiate an indirect cost rate must contact their cognizant agency. For assignments of cognizant agencies see 2 CFR §200.1.
    4. All agencies, whether charging a de minimis rate of 15 percent or utilizing a negotiated indirect cost rate must use the modified total direct cost (MTDC) as the base. MTDC is defined in 2 CFR §200.1 as all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each Agreement (regardless of the period of performance of the subawards under the award). MTDC exclude equipment, capital expenditures, rental costs, participant support costs, and the portion of each Agreement in excess of $50,000. Other items may be excluded only when necessary to avoid serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.
    5. As described in 2 CFR §200.403, costs must be consistently charged as either indirect or direct costs but may not be double charged or inconsistently charged as both.
  5. Shall Not Be Reimbursed for Unallowable Expenses.
    1. Funds awarded under the Agreement shall not be used for:
      1. The cost of alteration of facilities and purchase of Capital Assets ($10,000 or greater), not required specifically for the program, without prior approval from FA.
      2. Purchase of buildings and/or land.
      3. Payment of mortgages or leases with option to buy.
      4. Late fees, fines, interest on borrowed capital such as a line of credit, or losses which could have been covered by permissible insurance.
      5. Compensating for financial food loss.
      6. Expenses reimbursed by other programs.
      7. Expenses incurred outside of the program’s funding period.
      8. Actual losses which could have been covered by permissible insurance (through an approved self-insurance program or by other means).
      9. Purchase of expired food. 
      10. Airfare costs in excess of the customary standard commercial airfare (coach or equivalent), Federal Government contract airfare, or the lowest commercial airfare. 
      11. Activities not related to EFAP.
      12. Administrative and/or indirect expenses above the allowable Administration Cap. 
      13. Essential non-food expenses above the allowable percentage as outlined in the Agreement.
      14. Meal Programs. 
      15. Purchase of gift cards. 
      16. Costs of organized fundraising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred to raise capital or obtain contributions. 
      17. Expenditures in conflict with decisions made at the Biennial Meeting. 
  6. Types of Expense Categories.
    1. All expenses will be categorized on the EFAP Lead Agency Invoice Voucher (AGR-2229) as Indirect, Administration, Food Bank Operations, Food Pantry Operations, or Equipment/Capital Improvements (including repairs). Expenses must be categorized consistently and in alignment with GAAP, FA policies and/or the Agency's policies if more restrictive.
  7. EFAP is a Reimbursement Program.
    1. Goods and services must be received and paid for before becoming eligible for reimbursement.
      1. No payment by FA will be made in advance of or in anticipation of services or receipt of supplies.
      2. Goods or services must have been incurred, received, or rendered within the funding period and those allowable costs must have been paid to be considered eligible for reimbursement.
        1. The term “incurred” is defined as when a Lead Agency or Sub Agency becomes liable for a cost, which is further defined as when the purchase is made, or the services have been rendered.
        2. Costs are reportable for the month in which the expenditure is incurred.
      3. A Lead Agency must reimburse the Sub Agency before requesting reimbursement from FA for the allowable costs of the Sub Agency. The Lead Agency must also not pay a Sub Agency or their expenses in advance of activities, goods, or services being received.
    2. Note: Any allowable costs that are incurred between October 1st through June 30th of the funding period must be submitted to FA for reimbursement prior to FA’s state fiscal year close annually. Additionally, any allowable costs that are incurred between June 30th and September 30th of the funding period are also eligible as excess claims but must be submitted to FA for reimbursement prior to the end of the federal fiscal year close annually.
  8. Funds Must Not be Carried Over.
    1. Funds must not be carried over from one fiscal year start and end date (typically the state fiscal year) to the next.
      1. All funds must be expended for the applicable budget period.
      2. Any unspent allocations at the end of the applicable budget period will be reduced (unobligated) from the Lead Agency’s budget by an amendment.
  9. Administrative Funds Are Returned Proportionately to the Agreement Budget.
    1. ​Lead Agencies returning unexpended funds to FA during the Agreement period must return administrative funds in an amount proportionate to the Agreement budget unless administrative funds have already been transferred to another budget category during the course of the Agreement. 

7.2 Allowable Capital Asset Purchases and Repairs

  1. Allowable Capital Asset Purchases and Repairs.
    1. Capital assets are defined as any tangible nonexpendable personal property with a useful life of more than one year with a unit cost (likely including ancillary costs) of $10,000 or greater. This includes collections of capital assets and/or repairs of capital assets with a total cost of $10,000 or greater. They are all capitalized, unless otherwise noted (SAAM 30.20.20).
      1. Procurement of equipment, equipment repairs, and capital improvements funded entirely or in part by EFAP funding must comply with the Equipment and Equipment Repairs Procurement Guidelines (AGR-454) and Capital Improvement Procurement Guidelines (AGR-898). Equipment, equipment repairs, and capital improvements over $10,000 whether paid for entirely or in part with EFAP funds require Food Assistance (FA) pre-approval. If your agency has internal equipment procurement and capital improvement policies that are more restrictive, then you should adhere to the stricter of the two policies.
      2. Allowable equipment purchases and equipment repairs:
        1. The purchase of equipment and equipment repairs to be used in EFAP is an allowable expenditure. For details see: Equipment Procurement Request/Approval Form (AGR-2204) or Equipment Repair Request/Approval Form (AGR-2615), as applicable.
      3. Allowable capital improvement expenses:
        1. Capital improvements required to operate EFAP are an allowable expenditure with prior FA approval. For details see: Capital Improvement Procurement Request/Approval Form (AGR-2308).
          1. The cost of alteration of facilities not required specifically for the program is an unallowable cost.
        2. Capital improvements include expenditures to acquire non-movable capital assets (e.g. drive-in freezer or cooler), or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that are permanently located that materially increase their value or useful life.
        3. Capital improvements are most easily approved for buildings that are owned by the Lead Agency or Sub Agency. Capital improvements may be approved if a building is leased under certain circumstances. Be advised that a lease term minimum may apply.
      4. Financing costs (including interest) to acquire, construct, or replace capital assets are allowable, subject to other requirements of EFAP.
      5. Procurement and bid process requirements for capital assets will vary depending on the cost of the item or capacity project and/or funding sources. See the applicable procurement guidelines on the FA EFAP website for more details.
      6. Lead Agencies must have written capital asset procurement and inventory policies as well as capital asset management and inventory policies that at a minimum meet FA standards.
      7. If the Lead Agency allows equipment purchases, equipment repairs, or capital improvements under their EFAP Agreement with the Sub Agency, then the Lead Agency submits the applicable form to FA on behalf of the Sub Agency.
    2. See Section 8, Property Management for additional guidance.

7.3 Invoicing and Administration

  1. Administrative and Indirect activities and expenses are allowable up to the Administration Cap. The combined total Administrative and Indirect may not be greater than 20% of the total award. 
    1. The Lead Agency is limited up to twenty percent (20%) administrative costs of the total award.
    2. The combined administrative costs cannot exceed twenty percent (20%) of the total award, even if the combined total of the administrative funding for the Lead Agency, and its dual role of either Food Bank, and/or Food Pantry is greater than the twenty percent (20%) of the total award.
    3. A Food Bank or a Food Pantry is limited to fifteen percent (15%) of their individual award total for administrative costs. 
    4. The Administration Cap includes administrative direct expenses and indirect expenses but excludes the “up to one percent (1%)” of total award for allowable dues.
  2. Essential non-food expenses will be reimbursed up to twenty five percent (25%) of the organization's allocated funds. 
    1. Essential non-food expenses include cleaning supplies, dental adhesive, deodorant, detergent, diapers, dish soap, facial tissue, feminine products, hand soap, paper towels, napkins, shampoo, shaving products, teeth/denture cleaner products, toilet paper, and toothbrushes.
  3. Equipment purchases, equipment repairs and capital improvements are allowable expenses as follows:
    1. Reimbursement will be limited to expenses allowed by the Washington State Administrative and Accounting Manual (SAAM) capitalization policy: the capitalization threshold for equipment purchases, equipment repairs, and capital improvements is $10,000 or more. Prior WSDA FA approval is required for any capitalization expenditure of $10,000 or more.
    2. Reimbursement will not be paid for indirect costs related to equipment purchases, equipment repairs, or capital improvement projects.

7.4 Required Invoicing and Data Reports

  1. Required expenditure and data reports. EFAP is supported with both state and federal funding, separate reporting required.
    1. Each Lead Agency reports the total activity for themselves and their Sub Agencies, if applicable. The Lead Agency expenditure and data information is reported in the required Lead Agency Invoice Voucher (EFAP State: AGR-2229, EFAP State (Enhanced): 2229E, EFAP State (Supplemental): 2229S, EFAP Federal: AGR-2471 [SFY 2024 only]); the Sub Agency’s expenditure and data information is reported in the Sub Agency Invoice Voucher (EFAP State: AGR-2226, EFAP Federal: AGR-2478 [SFY 24 only]) provided by Food Assistance (FA) and located on the FA Forms and Publications webpage. Note: Lead Agencies may submit an alternative Sub Agency Invoice Voucher for FA approval.
      1. The EFAP State Lead Agency Invoice Voucher (AGR-2229) includes financial data and non-financial data (clients served and pounds of food distributed data).
      2. The EFAP Federal Lead Agency Invoice Voucher (AGR-2471) includes only financial data.
    2. There are multiple tabs in the Lead Agency and Sub Agency Invoice Voucher that include instructions, year rollup (auto populates), each month in the state fiscal year, and the closeout report (auto populates most fields).
    3. The Lead Agency reports are due to FA by the 20th of the month following the month in which the costs were incurred, or the client activity occurred. Even if a Lead Agency doesn’t have any fiscal activity, it still must submit the Lead Agency invoice voucher, including any client activity. FA may require the last report of each fiscal year, the June report, be submitted earlier than July 20th.
    4. The Lead Agency determines report due dates for Sub Agencies.
  2. The Lead Agency and Sub Agency Invoice Vouchers include the following sections:
    1. Expenditure Detail:
      1. The invoice voucher includes compiled costs by budget category, incurred for the Lead Agency and their Sub Agencies.
        1. The Lead Agency must reimburse Sub Agency before requesting reimbursement from FA.
        2. Costs are reportable for the month in which the expenditures are incurred, and goods must be received prior to reimbursement.
      2. The Lead Agency must include with each monthly invoice voucher a detailed Expanded General Ledger indicating the EFAP costs charged each month by the budget category in which they are charging costs.
        1. Additional documentation is required for equipment, equipment repairs, and capital improvements of $5,000 or more.
        2. For Sub Agencies’ expenses, the Lead Agency must include, in the detailed Expanded General Ledger, at least the aggregate amounts spent by all Food Pantries and Food Banks by budget category.
      3. Sub Agencies backup expenditure documentation will be determined by the Lead Agency.
        1. Costs are reportable for the month in which the expenditures are incurred, and goods must be received prior to reimbursement.
      4. FA staff may, at its discretion, request additional backup documentation for charged expenditures.
    2. Food Purchases Report:
      1. Lead Agencies must break out and report the amount of EFAP funds spent on food purchases by Food Pantries and Food Bank distribution centers (if applicable). This must include funding spent for special dietary needs food.
        1. Special Dietary Needs (SDN) Food is identified as a unique expenditure category on the EFAP Invoice Voucher. This refers to food purchases that meet the nutritional needs of special populations.
        2. Food purchased without the purpose of meeting a special dietary need as defined above should be included in the expenditure details under either Food Pantry or Food Bank operations as applicable.
    3. Clients Served:
      1. For demographic reporting, there are four different groups of Food Pantry clients: Full-service clients, supplemental clients, special dietary needs clients, and kids weekend bags clients. FA requires Lead Agencies and Food Pantry Sub Agencies to report full-service client data but also requests that you report client data for special dietary needs, supplemental, and kid’s weekend bags. This data is critical in telling the story of your unique hunger relief efforts that are taking place in your county and the state.
        1. Full-service clients (mandatory): Food Pantries must report full-service clients, including special dietary needs clients. A full-service distribution must include at least three of any of the five main food groups as identified by USDA and are expected to supply full-service clients with nutritionally balanced meals.
          1. The number of full-service clients by age group and households served each month.
          2. The number of new clients.
            1. A new client is defined as the first time a client visits ANY Food Pantry in the state of Washington in a calendar year (starting January 1 of each year).
          3. The number of returning clients.
            1. A returning client is defined as any subsequent visit a client makes to ANY Food Pantry in the state of Washington in a calendar year (starting January 1 of each year).
        2. Supplemental clients (optional): Food Pantries typically offer clients additional food that is not part of a complete food bag. Supplemental clients are clients who receive only items that are comprised of fewer than 3 of the 5 food groups and nothing else.
          1. Though clients receiving solely supplemental food must be tracked separately from full-service clients, clients who pick up the supplemental items and the full-service products must be included in the full-service count only.
        3. Special dietary needs clients (optional): New and returning clients. Special dietary needs clients are reported in both the full-service clients’ data and the special dietary needs clients’ data. In addition, Food Pantries may track clients who receive special dietary bags, and whether or not the Food Pantry uses EFAP funds to purchase SDN food. As identified by the WA State legislature, these groups include infants under one year of age, children with disabilities, pregnant and lactating women, people with chronic diseases such as cancer and diabetes, people with Acquired Immune Deficiency Syndrome (AIDS), people with lactose intolerance, people with chewing difficulties, alcoholics, intravenous drug users, and people with cultural food preferences.
        4. Kids weekend bag clients (optional): New and returning clients. Kids weekend bag clients that are full-service are reported in both the full-service clients’ data and the kids weekend bag clients’ data. In addition, Food Pantries may track clients who receive kids weekend bags. Bags are expected to supply clients with nutritionally balanced meals. Bags must include at least three of any of the five main food groups as identified by USDA and provide food for at least two days.
          1. Bags that do not meet the definition above should be considered supplemental.
        5. Total kids weekend bags (optional): The total number of kids weekend bags distributed each month.
        6. Sub Agency match (mandatory, as required by the Lead Agency): Sub Agencies have an additional section for tracking match.
    4. Pounds of Food Distributed:
      1. The number of pounds of food distributed to clients by Food Pantries – all sources. The number of pounds of food (all sources) its Food Bank(s) delivered to the EFAP Food Pantries, if applicable.
        1. Food Pantry full service (mandatory): The total number of pounds of food (all sources) distributed to full-service clients by the Lead Agency and Food Pantry Sub Agencies. This includes full-service special dietary foods.
        2. Food Bank distribution center (mandatory, if applicable): The number of pounds of food (all sources) distributed to EFAP Food Pantries by the Food Bank(s).
        3. Supplemental (optional): The number of pounds (all sources) of food distributed to supplemental clients. In order to quantify the additional food that providers sometimes offer clients; providers have the option to additionally track supplemental pounds of food.
        4. Kids weekend bags (optional): The number of pounds of food (all sources) distributed through Kids Weekend Bags.
  3. Failure to submit expenditure and data reports.
    1. FA may recapture unclaimed funds if the Lead Agency does not submit invoice vouchers in a timely manner.
      1. If the Lead Agency fails to file an invoice voucher within any two consecutive month period, FA may elect to terminate the Agreement.
      2. The Lead Agency may recapture unclaimed funds or terminate the Agreement with the Sub Agency based on the same criteria as long as it is not inconsistent with the Agreement.
  4. EFAP Closeout Report required:
    1. The Lead Agency must submit closeout reports after the close of each fiscal year as required by FA, during the transfer of obligations to another Lead Agency, or upon termination of the Agreement for any reason.
      1. The Closeout Report is located on the last tab of the Fiscal Invoice Voucher.
    2. The closeout report must accurately reflect the work completed, the funds expended by the Lead Agency during the Agreement period, the demographics required by FA, and the reporting of the required match.
  5. Lead Agencies must complete reports throughout the Agreement period.
    1. FA Annual Equipment Inventory (AGR-2201) and FA Capital Improvement Inventory (AGR-2614) report(s) as applicable - See Section 8.2.D, Annual Reporting of Capital Assets.
    2. Monthly Invoice Vouchers – Client data and expenditure information.
    3. Other reports as required.
  6. Required reports and schedule of submittals for Lead Agencies.​
  7. Lead Agencies determine due dates for Sub Agency reporting.
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EFAP Procedures Manual Table of Contents
Section 6 Section 8
Revision History
Section 7 Revision 2025-09-30