As a CACFP sponsor, July marks the start of one of the most important planning windows of the year: preparing your annual budget for the October 1 submission.
The CACFP fiscal year runs October 1 through September 30, which means your organization’s FY2027 budget needs to be drafted, reviewed, and submitted to your state agency before fall. Timelines vary by state, so check with your state agency for your specific submission deadline. Whether this is your first budget cycle or your fifteenth, taking time now to understand what’s changed puts your organization in a stronger position when October arrives.
Here’s what you need to know heading into FY2027.
CACFP is heading into FY2027 with strong momentum. According to the USDA FY2027 Budget request for the Food and Nutrition Service, federal funding for the program is projected to increase to $4.73 billion, up from $4.52 billion in FY2026. That increase reflects both rising participation and adjustments for food inflation.
On the participation side, the USDA projects that 1.823 billion meals will be served through CACFP in FY2027 — an increase of more than 29 million meals (approximately 1.6 percent) over the current year. Centers are expected to serve approximately 1.496 billion of those meals, while family day care homes account for an estimated 327 million. (Source: USDA FY2027 Budget, Table FNS-16)
What does this mean for your budget? If your sponsorship is growing — adding sites, enrolling more children, or expanding meal service — your projected reimbursement revenue should reflect that growth. And if participation has been steady, the reimbursement rate increases (more on that below) still work in your organization’s favor.
CACFP meal reimbursement rates are updated every July 1. According to the USDA FY2027 Budget, rates are projected to increase by approximately 2 percent for FY2027, reflecting adjustments for food inflation.
The official 2026–2027 CACFP reimbursement rates have not yet been published. The rates take effect July 1, 2026 and are typically published by the USDA in late spring. The current rates in effect are for the 2025–2026 program year. We’ll update this section the moment the new rates are released.
Once the new rates are released, make sure you’re building your revenue projections on the updated numbers — not the rates from the prior period. Even a small rate difference compounds across thousands of meals and can throw off your entire budget if you’re working from outdated numbers.
If you need help understanding how rates apply to your specific program type (centers vs. homes, Tier I vs. Tier II), the USDA CACFP Reimbursement Rates page has the full breakdown by program type and meal category.
(Note: As of June 1, 2026, the Food and Nutrition Service is now the Food and Nutrition Administration.)
One of the most encouraging trends heading into FY2027 is that several states have taken steps to strengthen support for CACFP at the local level. According to the National CACFP Association:
These are just two examples — more states are exploring similar approaches. The same NCA report found that 40 percent of sponsoring organizations said their administrative funds don’t fully cover their CACFP expenses. If your state has introduced new funding streams, grants, or policy changes that affect your sponsorship, your FY2027 budget submission is the time to account for them.
For a deeper look at what states are doing, the National CACFP Association published a helpful overview: State Policies Shaping the Future of CACFP.
Your annual CACFP budget is more than a compliance requirement — it’s a financial plan that projects your organization’s revenue and allowable expenses for the fiscal year. Here’s what it should cover:
Revenue: Project your anticipated CACFP reimbursement based on the number of meals your sites expect to serve, the reimbursement rates in effect, and any state-level supplemental funding your organization receives.
Allowable Costs: Your budget must include both administrative and operational expenses.
Administrative costs include items like staff salaries for training and monitoring, travel for site visits, office supplies, accounting, eligibility determinations, and recordkeeping software. Operational costs include food, food service supplies, food service equipment, and food service labor directly tied to meal production.
All costs must be allowable, reasonable, and necessary — and only the share of costs that benefit the CACFP can be assigned to the program. If your organization runs multiple programs, you’ll need a cost allocation plan that explains how shared costs are divided. (Source: USDA Guidance for Management Plans and Budgets)
CACFP software as an allowable expense: CACFP software is an allowable administrative cost that can be included in your budget. If you’re considering adding or switching software for the next program year, the annual budget process is the natural window to plan for it — since many sponsor decisions around budgets, agreements, and systems lock in before October 1.
Budget Revisions: If your circumstances change during the year — you add or lose sites, your lease renews at a different rate, or participation shifts significantly — you’ll need to submit a budget revision to your state agency for approval before making changes. Revisions are not approved retroactively, so plan ahead. (Source: USDA Guidance for Management Plans and Budgets)
For a full walkthrough of the budgeting process, check out KidKare’s CACFP Budget Guide for Sponsors and CACFP Annual Budget Overview.
Preparing your annual budget doesn’t have to be stressful if you break it into manageable steps. Here’s a checklist based on the CACFP fiscal year. Your state agency may have different deadlines — check with them early so you’re working to the right schedule.
July
August
September
KidKare is a 100% Food Program–allowable expense — it’s used exclusively for CACFP, which means it can be included in your organization’s budget as an administrative cost.
For sponsors managing multiple sites, KidKare moves much of the manual CACFP work online. Here’s what that looks like in practice:
Manage your core CACFP operations in one place. Food lists, menu creation and distribution, enrollment records, verification of CACFP expenses and receipts, labor tracking, and claims processing — all in one platform instead of scattered across spreadsheets, paper, and inboxes.
Protect eligible reimbursement. KidKare runs 250+ edit checks on claims, flagging issues at the site level before they ever reach your office or the state. That means fewer disallowed meals, fewer corrections at month-end, and more defensible claims.
Access your data when you need it, anywhere. With 300+ reports, your organization can pull meal counts, attendance, claims history, and participation trends across every site — whether you’re at your desk or in the field. That data is the foundation of accurate revenue projections at budget time.
Empower your field review staff with online monitoring tools. Give your monitors the tools to conduct site reviews with documentation that’s already organized and accessible — enrollment forms, income eligibility records, site review documentation, and corrections with a full audit trail, all online. Monitors complete site reviews up to 60% faster when everything is built to hold up.
Beacon — a claims readiness command center that brings claim issues and reimbursement at risk into one place, so your organization can act before claim time, not after.
KidKare is backed by 30+ years in CACFP and 85,000+ users across all 50 states.
Want to see what KidKare could look like for your organization? Schedule a 15-minute planning conversation →
Here are the references used in this article, along with additional tools to support your FY2027 budget prep:
