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CSFP Section 6

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CSFP Procedures Manual Section 6: Fiscal Management

6.1 Allowable Activities and Expenses

  1. Bill Only Allowable Activities and Expenses.
    1. Lead Agencies and Sub Agencies are allowed to use funds for CSFP 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.
    2. Pass-through funding issued to Sub Agencies and expended in a way consistent with this section is an allowable cost.
    3. Unless otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under CSFP. Allowable costs must:
      1. Be necessary and reasonable for the performance of the federal award and be allocable to this program or its purpose.
      2. Conform to any limitations or exclusions set forth in the Code of Federal Regulations or the federal award (CSFP) when billing allowable costs and amounts.
      3. Be consistent with policies and procedures and other activities of Food Assistance (FA) (state pass-through agency).
      4. Costs incurred in like circumstances must be treated consistently, including being identified as either direct or indirect costs, and administrative or operational in nature.
      5. Be determined in accordance with Generally Accepted Accounting Principles (GAAP).
      6. Be adequately documented per program requirements.
      7. Costs must be incurred during the approved budget period.
      8. Have prior written approval (from FA and USDA FNS) for all capital asset purchases and repairs (equipment purchases, equipment repairs, and capital improvements) of $10,000 or more per unit.
    4. For additional guidance you may find the 2 CFR Part 200 and 7 CFR Part 247 helpful.
  2. Allocating Costs.
    1. A cost is allocable to CSFP in accordance with the relative benefits received by the program. The standard for allocating a cost to CSFP is met if the cost satisfies any of the following criteria:
      1. The cost is incurred specifically for CSFP.
      2. The cost benefits CSFP 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 CSFP 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 CSFP 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 CSFP and other FA programs if needed.
    3. For additional guidance on determining allocable costs to CSFP you may find 2 CFR §200.405 and 7 CFR §247.25 helpful. We also recommend 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 CSFP, or that can be directly assigned to such activities relatively easily with a high degree of accuracy (see Section 6.1.B, Allocating Costs above). 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 CSFP. 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 recipient agencies (Sub Agencies).
    2. There is no limit on the percentage of awarded program funds Lead Agencies and Sub Agencies may spend on direct charged Administrative or Operational costs specific to CSFP.
    3. Lead Agencies and Sub Agencies are allowed to use CSFP funds for costs that are necessary to ensure the efficient and effective operation of the program. Some examples of allowable costs in CSFP include:
      1. Personnel costs – salaries, wages and fringe benefits for personnel related to warehousing or distribution of CSFP foods, determining the eligibility of CSFP applicants, or outreach and networking activities promoting CSFP.
        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 CSFP food, or transportation of participants to and from the CSFP 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 and for CSFP storage and warehouse areas.
      4. Communications such as telephone, postage, mailing, printing, copying, and associated with CSFP operations and program administration.
      5. Nutrition education for CSFP participants.
      6. Insurance and audit costs.
      7. Other operational costs, such as supplies (including office supplies), lease and repair of equipment directly related to providing services.
  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. As stated in the regulations (2 CFR §200.414), 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 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, 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 costs (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 subaward (regardless of the period of performance of the subawards under the award). MTDCs exclude equipment, capital expenditures, rental costs, participant support costs, and the portion of each subaward 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. Activities not related to CSFP specifically.
      2. SNAP recruitment or promotion activities; USDA Policy FD-143.
      3. 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 and USDA FNS.
      4. Under no circumstances may a participating agency use CSFP funding for the purchase of food.
      5. Purchase of buildings and/or land.
      6. Late fees, fines, interest on borrowed capital such as a line of credit, or losses which could have been covered by permissible insurance.
      7. Expenses reimbursed by other programs.
      8. Expenses incurred outside of the program’s funding period.
      9. Actual losses which could have been covered by permissible insurance (through an approved self-insurance program or by other means).
  6. Types of Reimbursement Program.
    1. All expenses will be categorized on the CSFP Lead Agency Invoice Voucher (AGR-2234) as Indirect, Administration, Operations, Pass-through, or Equipment/Capital Improvements (including repairs). See Section 6.3, Required Expenditure Reports.
  7. CSFP 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 subaward start and end date (typically the federal 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.

6.2 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 CSFP 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 CSFP funds require Food Assistance and USDA FNS 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 CSFP 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 CSFP are an allowable expenditure with prior Food Assistance (FA) and USDA FNS 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 CSFP expenditures as well as requirements named in 2 CFR §200.449.
      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 CSFP 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 the FA standards.
      7. If the Lead Agency allows equipment purchases, equipment repairs, or capital improvements under their CSFP Agreement with the Sub Agency, then the Lead Agency submits the applicable form to FA on behalf of the Sub Agency.
    2. See Section 7, Property Management for additional guidance.

6.3 Required Expenditure Reports

  1. Expenditure Reports Are Due to Food Assistance (FA) Monthly.
    1. FA provides an updated CSFP Lead Agency Invoice Voucher (AGR-2234) through the FA website to Lead Agencies annually.
    2. Lead Agencies must submit monthly invoice vouchers. These must be accompanied by an expanded general ledger showing all program costs for goods and services received and paid for. The ledger should include: date of expense, vendor, memo or description, and cost. On the CSFP Lead Agency Invoice Voucher (AGR-2234), these expenses should be broken out by budget category.
      1. Reimbursement to Sub Agencies, if any, will be determined by the Lead Agency.
        1. For Sub Agencies’ expenses, the Lead Agency shall include in the general ledger at least the aggregate amounts spent by all Sub Agencies in the Pass-through budget category.
      2. FA staff may, at its discretion, ask for additional backup documentation.
      3. The Lead Agency should follow their agency’s policies for signatures.
    3. The signed CSFP Lead Agency Invoice Voucher (AGR-2234), along with the detailed expanded general ledgers, should be emailed to your regional representative by the 20th of each month following the month the costs were incurred or claimed.
  2. Federal and State Fiscal Year Timelines.
    1. If the federal CSFP budget has not been finalized, the program will run on a continuing resolution and expenditure limits will be put into place (i.e., monthly reimbursements not to exceed 1/12 of total estimated budget). Once the federal budget is finalized, the Lead Agency will be reimbursed for all eligible expenses claimed but not yet paid.  
    2. Billing adjustments for costs incurred in prior months but within the budget period are allowable and have effective period restrictions due to the close of the state’s fiscal year.
      1. Billing adjustments can be made on invoice vouchers for November through June for all allowable CSFP costs incurred between October 1st and June 30th not previously submitted for reimbursement or paid, however:
        1. Those allowable costs must be submitted to FA for reimbursement prior to FA’s state fiscal year end close annually; and
        2. Any allowable costs that were incurred between October 1st through June 30th discovered after the state fiscal year end close are not eligible for reimbursement or as excess claims in the new state fiscal year.
    3. Billing adjustments are allowable on August and September invoices for allowable CSFP costs incurred between July 1st and September 30th which were not previously submitted for reimbursement or paid.
  3. Excess Claims.
    1. At the end of the federal fiscal year after all Lead Agency invoices are accounted for, FA will determine if there are any CSFP administrative funds remaining to be spent. If there are any funds remaining, FA will reallocate those to Lead Agencies with excess claims.
    2. In this process, excess claims for expenses incurred between July through September may be eligible for reimbursement if additional administrative funds are available. This narrow timeframe is due to the close of the state fiscal year in June of each year.
    3. Lead Agencies may submit excess claims on behalf of themselves and their Sub Agencies on their monthly invoice voucher in the months of July through September. There is no guarantee of additional funding available for these excess claims. Contact your regional representative for additional details.
    4. Note: FA reserves the right to implement excess claims for periods other than the end of the Federal Fiscal Year. 
  4. Failure to Submit Expenditure Reports.
    1. FA may recapture unclaimed funds if the Lead Agency does not submit expenditure reports in a timely manner.
      1. If the Lead Agency fails to submit a CSFP Lead Agency Invoice Voucher (AGR-2234) and/or other reports for three consecutive months, FA may elect to suspend or terminate the Agreement.
  5. CSFP Monthly Invoice Voucher and Request for Reimbursement Information.
    1. Entering Information:
      1. The excel workbook tabs are linked and protected. You may only enter information into the green highlighted cells. Once you enter the Lead Agency information on the October tab of the form, it will auto populate the rest of the month tabs with this information:
        1. Lead Agency Name and Address - Note: this must match exactly the information on file with the WA State Office of Financial Management for your Statewide Vendor Registration.
        2. Total Yearly Budget – See Agreement/Amendment for details.
        3. Agreement Number (K####) - See the CSFP Agreement Face Sheet for details.
        4. Statewide Vendor Number (SWV) - See the CSFP Agreement Face Sheet for details.
      2. Note: invoice vouchers will not be processed for reimbursement if they are missing any of the above information or if the information is not accurate.
    2. Expenditure Detail Section:
      1. “Total Yearly Budget” – this column represents your estimated subaward for the current fiscal year. Note that you may only enter the budget amount from the October tab of the workbook, once entered it will auto populate the other tabs.
      2. “Expended this Period” – this column represents your applicable expenses from the month that you are reporting on.
      3. “Billing Adjustment” – this column is used if you make a fiscal error, need to make an adjustment to the fiscal portion of a previously submitted report, or to claim expenses not previously submitted for reimbursement that were incurred in a prior month (but within the budget period).
        1. Note: if the Lead Agency reimburses a Sub Agency in the month that is being reported on, but the Sub Agency incurred the expense in a prior month, then that expense should be reported in the Billing Adjustment column.
      4. “Net Amount Requested” – this column represents the total “Expended this Period” column combined with the “Billing Adjustment” column. This is your total amount requested for the month.
      5. “Requested to be Paid” – this column represents the amount that you expect to be reimbursed in a particular month. This amount cannot exceed the “Net Amount Requested” for that month (unless the organization has previously approved excess claims on file, that they wish to be paid for: Oct-June only); however, it can be less (generating an excess claim).
      6. NOTE: If the “Request to be Paid” amount is less than the “Net Amount Requested” the result will be an “Excess Claim.” If additional program funds are made available at the end of the federal fiscal year, your “Excess Claims” incurred between July and September may be paid at that time. Excess claims show in the FA Reconciliation section of the invoice.
      7. “Year to Date Balance” – this column represents the “Total Yearly Budget” column minus the “Requested to be Paid” column. This reflects the amount of money left in your allocation after your request for payment is processed. This column may not have a negative balance in any row.
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CSFP Procedures Manual Table of Contents
Section 5 Section 7
Revision History
Section 6 Revision 2025-04-23