CACFP Performance Bond Requirements Explained
The Texas Department of Agriculture requires non-government sponsoring organizations who want to participate in the Child and Adult Care Food Program (CACFP) to post a surety bond.
This type of bond, also called a CACFP performance bond, is required to ensure that sponsoring organizations handle public funds only for the benefit of the program. They are also required to be able to submit all their financial records if the Department of Agriculture requests them.
Misusing public funds or violating applicable laws in other ways can trigger a claim against the NGO, and the funds obtained through the claim will be used to provide compensation to third parties affected by the unlawful actions of the NGO.
To find out more about CACFP performance bonds, including how to calculate the bond’s amount and cost, read on the Questions section below.
For other types of surety bonds in Texas, consult our dedicated page. If you still have questions, call us at (877)-514-5146 and we’d be happy to help!
Questions about Cacfp Performance Bond
How much does a CACFP performance bond cost?
To calculate the cost involved for your organization, you must first know the total bond amount required. The total amount refers to your maximum liability under the bond’s term and is calculated using the following formula:
(Total Enrollment) x (Current Free Reimbursement Rate for Meal Type) x 90.
Total enrollment refers to your anticipated enrollment and the bond’s amount can be adjusted to go up or down to reflect any changes in your enrollment and reimbursement. You can also request to be relieved of the CACFP bond requirement, if you can show that your organization has “accumulated three years of successful administrative and financial history within the preceding seven years by submitting a written request to TDA.”
Calculating Your Premium
Once you have contacted the Department of Agriculture and have clarified your total bond amount, you can get a rough estimate of your yearly premium cost. If you have good credit, the cost can be as little as 1%, but it can go up to 10% or sometimes more if your credit score is compromised.
Other factors, such as financial strength and industry experience, can also be considered. Be sure to check out our “What Does a Surety Bond Cost”? page for more information.
How can I get bonded with bad credit?
Getting bonded with bad credit is possible in 99% of cases, the only difference being the yearly premium. Since sureties consider your credit score and credit report as a way to measure your likelihood of triggering a claim, they try to offset the risk by charging a higher premium.
However, even if you have a high premium, there is additional information you can submit to influence the surety’s decision. That includes financial statements, a resume with your experience, and others.
Be sure to check out our page on bad credit surety bonds for more information.
How do I apply for a CACFP bond?
We have a quick and simple way for you to apply for your bond. Start by submitting our online application, which asks for some basic information about your business, such as contact and ownership information and whether you have previous claims.
Afterwards, we will get in touch with you to give you a personalized free bond quote. If you proceed with your application, we will let you know what other documentation we need and help you with any questions you have.
Typically, it takes us between 24 and 48 hours to process your application and get your bond signed. We will mail you the original bond form and send you digital copies via email upon request.
If at any time during your application you are experiencing difficulties, we’re here to help. Simply call us at (877)-514-5146!
Keep in mind that CACFP performance bonds need to be renewed annually. Choose Lance Surety Bonds and we’ll make sure you never forget your deadlines by sending renewal reminders ahead of time.