[Federal Register: October 31, 2003 (Volume 68, Number 211)]
[Proposed Rules]
[Page 62163-62195]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31oc03-28]
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Part II
Department of Agriculture
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Food and Nutrition Service
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7 CFR Part 247
Commodity Supplemental Food Program--Plain Language, Program
Accountability, and Program Flexibility; Proposed Rule
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 247
RIN 0584-AC84
Commodity Supplemental Food Program--Plain Language, Program
Accountability, and Program Flexibility
AGENCY: Food and Nutrition Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would rewrite the regulations for the
Commodity Supplemental Food Program in ``plain language'' to help
program operators and the general public better understand program
requirements. It would also reduce the time and paperwork burden for
State and local agencies, increase their flexibility in program
operations, and strengthen program accountability. Other changes would
be made to incorporate legislative provisions and improve program
service and caseload management. The effect of this rule will be to
make the Commodity Supplemental Food Program easier to understand and
administer, and more effective and efficient in providing benefits to
eligible persons.
DATES: Please send your comments to reach us on or before December 30,
2003. Comments received after the above date will not be considered in
developing the final rule.
ADDRESSES: You can mail or hand-deliver comments to Lillie F. Ragan,
Assistant Branch Chief, Household Programs Branch, Food Distribution
Division, Food and Nutrition Service, U.S. Department of Agriculture,
Room 500, 3101 Park Center Drive, Alexandria, Virginia 22302-1594.
FOR FURTHER INFORMATION CONTACT: Lillie F. Ragan at the above address
or telephone (703) 305-2662. A regulatory impact analysis has been
prepared for this rule. You may request a copy of the analysis by
contacting us at the above address.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Procedural Matters
III. Background and Discussion of the Proposed Rule
I. Public Comment Procedures
Your written comments on this proposed rule should be specific,
confined to issues pertinent to the proposed rule, and should explain
your reasons for any change recommended. Where possible, you should
reference the specific section or paragraph of the proposal you are
addressing. Comments received after the close of the comment period
(see DATES) will not be considered or included in the Administrative
Record for the final rule.
The comments, including names, street addresses, and other contact
information of commenters, will be available for public review at the
Food and Nutrition Service, Room 500, 3101 Park Center Drive,
Alexandria, Virginia, during regular business hours (8:30 a.m. to 5
p.m.), Mondays through Fridays, except Federal holidays.
II. Procedural Matters
Clarity of the Regulations
Executive Order 12866 requires each agency to write regulations
that are simple and easy to understand. We invite your comments on how
to make these regulations easier to understand, including answers to
questions such as the following:
(1) Are the requirements in the rule clearly stated?
(2) Does the rule contain technical language or jargon that
interferes with its clarity?
(3) Does the format of the rule (grouping and order of sections,
use of headings, paragraphing, etc.) make it more or less clear?
(4) Would the rule be easier to understand if it were divided into
more (but shorter) sections?
(5) Is the description of the rule in the preamble section entitled
``Background and Discussion of the Proposed Rule'' helpful in
understanding the rule? How could this description be more helpful?
Executive Order 12866
This proposed rule has been determined to be significant and was
reviewed by the Office of Management and Budget under Executive Order
12866.
Executive Order 13132
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Prior to drafting this proposed rule, we received input from State and
local agencies at various times. Since the Commodity Supplemental Food
Program (CSFP) is a State-administered, federally funded program, our
regional offices have informal and formal discussions with State and
local officials on an ongoing basis regarding program implementation
and performance. Additionally, Food and Nutrition Service (FNS)
Headquarters and regional office staff receive input from State and
local program staff at the annual national CSFP conference, and at
various other meetings throughout the year. These contacts allow State
and local agencies to provide feedback that forms the basis for
proposals to amend program regulations. We will review all comments
provided during the 60-day comment period following the publication of
this rule and will develop the final rule after due consideration of
the concerns expressed in the comments.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, FNS
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires FNS to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or more in any one
year. Thus, this rule is not subject to the requirements of sections
202 and 205 of the UMRA.
Executive Order 12372
The program addressed in this action is listed in the Catalog of
Federal Domestic Assistance under 10.565, and is subject to the
provisions of Executive Order 12372, which requires intergovernmental
consultation with State and local officials (7 CFR part 3015, Subpart
V, and final rule-related notices published at 48 FR 29114, June 24,
1983, and 49 FR 22676, May 31, 1984).
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The Under
Secretary of Food, Nutrition, and Consumer Services, Eric M. Bost, has
certified that this action will not have a significant impact on a
substantial number of small
[[Page 62165]]
entities. While program participants and State agencies and Indian
Tribal Organizations that administer the programs will be affected by
this rulemaking, the economic effect will not be significant.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The rule is intended to have preemptive effect
with respect to any State or local laws, regulations, or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect.
Prior to any judicial action challenging the application of CSFP rules,
exhaustion of administrative remedies, as set out in 7 CFR 247.33,
would be required.
Regulatory Impact Analysis
The regulatory amendments proposed in this rule will benefit State
and local agencies by reducing the paperwork burden and increasing
flexibility in program administration. Some of the changes will affect
program eligibility, such as the establishment of income eligibility
guidelines, the consideration of average income over the previous year,
and counting the pregnant woman as two in considering income
eligibility. However, these changes are not expected to result in
appreciable changes in program participation or increase program costs.
Other changes will improve program accountability by increasing the
penalties for program violations and requiring the initiation and
pursuit of claims against participants who fraudulently obtain program
benefits. These changes, too, are not expected to result in any
appreciable changes in program participation or costs.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507), this proposed rule will contain information collections that are
subject to review and approval by the Office of Management and Budget
(OMB); therefore, FNS is submitting for public comment the changes in
the information collection burden that would result from adoption of
the proposals in the rule.
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
To be considered, comments must be postmarked on or before December
30, 2003. Please send comments to Lillie F. Ragan, Assistant Branch
Chief, Household Programs Branch, Food Distribution Division, Food and
Nutrition Service, U.S. Department of Agriculture, Room 500, 3101 Park
Center Drive, Alexandria, Virginia 22302-1594, and to Lauren
Wittenberg, Desk Officer, Office of Information and Regulatory Affairs,
Office of Management and Budget (OMB), Washington, DC 20503. All
comments will be summarized and included in the request for OMB
approval of the proposed changes in the information collection burden.
All comments will become a matter of public record. For further
information, or for copies of the information collections discussed
below, please contact Ms. Ragan at the above address or telephone (703)
305-2662.
Title: Food Distribution Forms (This information collection burden
consolidates the reporting and recordkeeping requirements for 7 CFR
parts 240, 247, 250, 251, 252, 253, and 254).
OMB Number: 0584-0293.
Expiration Date: October 31, 2006.
Type of Request: Revision of a currently approved collection.
Abstract: This proposed rule would affect only reporting and
recordkeeping requirements under 7 CFR part 247. The reporting burden
for this part would be reduced from 350,812 hours to 262,983 hours. The
recordkeeping burden for this part would increase from 84 hours to 124
hours. The total information collection burden for OMB Number 0584-0293
would be reduced from 1,154,152 hours to 1,066,363 hours. Below, we
describe all proposed changes under the sections proposed in this rule.
Section 247.4, Agreements. Agreement requirements, currently under
Sec. Sec. 247.3 and 247.6, would be moved to the proposed Sec. Sec.
247.4. We propose to make the Federal-State agreement permanent,
instead of annual, with amendments submitted as needed. The information
collection burden for Federal/State agreements for all food
distribution and child nutrition programs is contained in a separate
information collection--OMB Number 0584-0067. The proposal to make the
Federal-State agreement for the CSFP permanent would require no change
in the information collection burden, as this change was effected
(erroneously, in the case of CSFP) when the agreement for other food
distribution programs was made permanent in 1997. We propose to reduce
the required elements for State agreements with local agencies, and for
local agency agreements with other agencies. We estimate that these
agreements would take 2 hours to complete, instead of the present 8
hours. We also propose to clarify that the duration of agreements
between State and local agencies is determined by the State agency, and
the duration of agreements between local agencies and other agencies is
determined by the local agency. We estimate that 50 agreements between
State and local agencies, and between local agencies and other
agencies, would be completed each year. The total burden for completion
of State and local agency agreements would be reduced from 480 to 100
hours.
Section 247.6, State Plan. State Plan requirements, currently under
Sec. 247.5, would be moved to the proposed Sec. 247.6. We propose to
make the State Plan permanent, with amendments submitted as needed,
instead of annual. We also propose to remove several elements that are
currently required to be included in the State Plan. We estimate that,
on average, one State agency per year would submit a State Plan, which
would require 50 hours to develop, instead of the current 100 hours.
Thus, the total burden for State Plan submissions will be 50 hours.
Since participating State agencies must submit amendments to request
additional caseload for the following year, and to make any other
changes in the Plan, we estimate that all 35 State agencies projected
to be participating in fiscal year 2004 will submit an amendment to the
Plan each year. We estimate that the submission of an amendment will
require about 5 hours on average. Thus, the total burden for the
submission of amendments to the State Plan would be 175 hours. The
total information collection burden for development and submission of
the State Plan and amendments would be reduced from 2,000 to 225 hours.
Section 247.8, Individuals applying to participate in CSFP, and
Sec. 247.16, Certification period. The application process for
individuals applying to participate in CSFP, which is currently under
Sec. 247.7, would be moved to the
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proposed Sec. 247.8. The certification period requirements, which are
also currently under Sec. 247.7, would be moved to the proposed Sec.
247.16. In this rule, we propose to allow State and local agencies to
extend the certification of elderly participants for additional six-
month periods without a formal review of eligibility. Local agencies
would have to confirm the elderly participant's address and continued
interest in receiving CSFP benefits. This change would reduce the time
required for recertification, or contact with, elderly participants
from 30 minutes to 15 minutes (0.25 hrs.). The burden for the twice-
annual recertification of the approximately 381,000 elderly individuals
projected to be participating in fiscal year 2004 would be 190,500
hours. The time required for recertification of women, infants, and
children would remain the same (0.50 hrs.). The burden for the twice-
annual recertification of the 66,000 women, infants, and children
projected to be participating in fiscal year 2004 would be 66,000
hours. The total burden for applications and recertifications would be
reduced from 342,000 hours to 256,500 hours. We propose to remove the
current requirement that the local agency provide a verification of
certification form to participants moving to another location. This
would remove the information collection burden of 110 hours for this
activity.
Section 247.23, State provision of administrative funds to local
agencies. The requirement that State agencies request approval to
retain administrative funds above a specific limit, which is currently
under Sec. 247.11, would be moved to the proposed Sec. 247.23. We
propose to allow all State agencies, regardless of whether they are
involved in storage of commodities, to request approval to retain more
funds. We do not believe, however, that this will result in an increase
in the present information collection burden for this requirement.
Section 247.30, Claims. Under the proposed Sec. 247.30, we propose
to require that the State or local agency pursue a claim against a
participant to recover the value of benefits improperly received or
used if it determines that the participant, or the parent or caretaker
of the participant, received or used the commodities through fraud. The
State agency would have to maintain all records regarding claims
actions taken against participants. Since 7 CFR part 247 and 7 CFR part
250 do not currently address specific criteria relative to the
establishment and pursuit of claims against participants, there is
currently no recordkeeping burden regarding such claims. We estimate
that State and local agencies would initiate a total of 500 claims
actions against participants each year. The recordkeeping burden would
be 5 minutes (0.08 hrs.) for each claims action. The total
recordkeeping burden for claims would be 40 hours.
Section 247.34, Management evaluation system. The requirement that
State agencies perform management evaluations of local agencies, which
is currently under Sec. 247.21, would be moved to the proposed Sec.
247.34. We propose to reduce the requirement for State agency on-site
reviews of local agencies from annual to every two years. Thus, of the
103 local agencies currently participating, 52 would have to be
reviewed each year. The total burden for management evaluations would
be reduced from 480 hours to 416 hours.
Respondents: State, Local, or Tribal Government; program
participants; business or other for profit; nonprofit institutions;
Federal government.
Total Annual Responses: Current: 917,758; Proposed: 1,126,931.
Estimate of Burden: Current: 1,154,152; Proposed: 1,066,363.
The proposed changes in information collection burden for the
reporting and recordkeeping requirements described above are included
in the following table.
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Annual Hours per
responses response Total hours
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Reporting
Section 247.4 State/local agreements:
Present..................................................... 60 8 480
Proposed.................................................... 50 2 100
Section 247.6 State Plan/State Plan amendments:
State Plan:
Present................................................. 20 100 2,000
Proposed................................................ 1 50 50
State Plan amendments:
Present................................................. Included above under State Plan
Proposed................................................ 35 5 175
Sections 247.8, 247.16 Applications/Recertifications:
Present..................................................... 684,000 0.50 342,000
Proposed.................................................... 894,000 0.29 256,500
Verification of certification form:
Present..................................................... 1,325 0.08 110
Proposed.................................................... 0 0 0
Section 247.34 Management reviews:
Present..................................................... 60 8 480
Proposed.................................................... 52 8 416
Recordkeeping
Section 247.30 Records of participant claims:
Present..................................................... 0 0 0
Proposed.................................................... 500 0.08 40
Total
Present........................................... 917,758 .............. ..............
Proposed.......................................... 1,126,931 .............. ..............
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III. Background and Discussion of the Proposed Rule
This rule proposes to rewrite 7 CFR part 247 in ``plain language.''
The proposed plain language format includes a question-and-answer
structure under each section, and removal of the legalistic style that
is currently reflected in the regulations. We have increased the number
of sections to ensure that each section addresses only one specific
program area. Nevertheless, some current sections have been
consolidated or deleted. This rule also proposes to amend provisions of
this part to accomplish several objectives, including:
(1) A reduction of the paperwork burden for State and local
agencies, including making the Federal/State agreement and State Plan
permanent, with amendments submitted as necessary;
(2) An increase in the flexibility of program operators in
providing benefits to eligible population groups, including changes in
the recertification of elderly participants;
(3) An increase in program accountability, including the
requirement that State and local agencies initiate claims against
program participants who improperly obtain benefits as a result of
intentional misrepresentation;
(4) Improvements in program service by requiring that, for a
pregnant woman, each embryo or fetus in utero be counted as a household
member in determining if the household meets the income eligibility
standards; and,
(5) Incorporation of current legislative provisions.
In the following paragraphs, we describe each section of the
proposed new 7 CFR part 247, including an explanation of any changes in
content or format.
Definitions, Section 247.1
In this proposed section, we propose to include definitions
relevant to CSFP, which are currently included under Sec. 247.2. We
propose to remove the definitions of administrative costs, A-90, A-102,
A-110, categorical ineligibility, FMC 74-4, homebound elderly persons,
participants, participation, pregnant women, program, Secretary, SFPD,
and supplemental foods. The meaning of homebound elderly persons,
participants, participation, pregnant women, and program is obvious to
any reader. SFPD is the FNS division that formerly administered CSFP.
Instead of the term categorical ineligibility, we propose to refer
instead to ineligible population groups. Wherever we refer to
administrative costs, its meaning is clear. The numbered circulars are
all obsolete, and have been replaced by other circulars or incorporated
into Federal regulations, as cited in regulatory text. Wherever ``the
Secretary'', or ``supplemental foods'', appears in current regulations
we propose to refer instead to ``the Department'', and to
``commodities'', respectively.
The seven definitions that we propose to add include certification
period, commodities, CSFP, 7 CFR part 250, 7 CFR part 3016, 7 CFR part
3019, and 7 CFR part 3052. A definition of certification period makes
clear the time span of program eligibility before a review of
eligibility is required. Definitions of commodities and CSFP simply
ensure that readers are aware of the purpose of the foods distributed
in the program and the program acronym. 7 CFR part 250 contains the
regulations for donation of foods in USDA food distribution programs. 7
CFR parts 3016 and 3019 are the Departmental regulations for grants and
cooperative agreements with State, local, and Indian tribal
governments, and with nonprofit organizations, respectively. 7 CFR part
3052 is the Departmental regulation for audits of States, local
governments, and nonprofit organizations. All of these regulations are
referred to in this proposed part, and their inclusion in the
definitions would help to ensure that readers understand their
applicability to CSFP.
The definitions that we propose to revise include caseload,
caseload cycle, certification, distributing agency, dual participation,
elderly persons, fiscal year, local agency, nonprofit agency,
postpartum women, State agency, and State agency plan of program
operation and administration. Currently, the caseload cycle begins on
December 1 or 30 days after enactment of appropriations legislation for
the full fiscal year, and extends through November 30. We propose to
establish January 1 through December 31 as the caseload cycle. This
would ensure that the caseload cycle extends for a 12-month period even
in the event of late passage of appropriations legislation. However, if
enactment of a full year's appropriation has been delayed, it may be
necessary to assign caseload on a tentative basis to reflect the amount
of funds available to support the program under a Continuing
Resolution(s). The revised definition of caseload establishes January 1
through December 31 as the caseload cycle, and includes reference to
the caseload cycle rather than the present reference to service over a
``specified period of time''.
We propose to define nonprofit agencies as private agencies or
organizations that have tax-exempt status under 26 U.S.C. 501 of the
Internal Revenue Code (IRC), or that have applied for tax-exempt status
with the Internal Revenue Service (IRS). A discussion of the
eligibility of nonprofit agencies for participation in CSFP, including
the needed tax-exempt status, is contained under the proposed Sec.
247.7.
We propose to delete the definition of distributing agency and to
refer instead to the subdistributing agency, so that definitions of
distributing agency and subdistributing agency will be consistent with
corresponding provisions in 7 CFR part 250. We propose to define
subdistributing agency as an agency that has entered into an agreement
with the State agency to perform functions that would otherwise be
performed by the State, such as entering into agreements with eligible
recipient agencies under which commodities are made available, ordering
commodities and/or making arrangements for the storage and delivery of
such commodities on behalf of eligible recipient agencies. As in 7 CFR
part 250, the definition of subdistributing agency does not include an
agency that is only responsible for providing warehousing space or
making deliveries to specified agencies. We also propose to remove the
requirement that a distributing agency (i.e., subdistributing agency
under this proposed rule) sign an agreement with the Department as well
as with the State agency. This is described in more detail under
Agreements. Under this proposal, we would also eliminate the
description of duties of local agencies currently included in the
definition of local agency, since this information is more
appropriately included in the regulatory text, and include Indian
tribal organizations under the definition. Finally, we propose to
revise the definitions of certification, dual participation, elderly
persons, fiscal year, postpartum women, State agency, and State Plan
for clarification purposes.
The Purpose and Scope of CSFP, Section 247.2
In this proposed section, we propose to describe the purpose and
scope of CSFP, which are currently described under Sec. 247.1. In
paragraph (a), we propose to ask and answer the question, How does CSFP
help participants? We describe, as in current regulations, the purpose
of CSFP as the distribution of nutritious foods, and provision of
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nutrition education, to low-income pregnant, postpartum, and
breastfeeding women, infants, children ages 1 through 5, and the
elderly. We also propose to describe the monthly distribution of foods
to participants based on guide rates established by FNS, and to list
some of the foods characteristically included in the food packages. A
description of the distribution of foods to participants is currently
included under Sec. 247.7(c).
Under paragraph (b), How many persons may be served in CSFP?, we
propose to provide basic information on caseload, and the caseload
cycle, to help the reader understand the scope of the program.
Administering Agencies, Section 247.3
Currently, Sec. 247.3 describes the responsible CSFP administering
agencies at the Federal, State, and local levels, and the requirements
for the State agency to submit a State Plan and enter into agreements
with the Department and other agencies. We propose to include, in this
proposed Sec. 247.3, the description of responsible administering
agencies and the Federal requirements that apply to administration of
CSFP. We propose to include required agreements in the proposed Sec.
247.4 and State Plan requirements in the proposed Sec. 247.6.
In paragraph (a) of this proposed Sec. 247.3, we propose to
include a description of the responsible administering agencies, and to
clarify that the State agency may delegate to a subdistributing agency
(e.g., another State agency or a nonprofit organization) the
responsibility for storage and distribution of commodities, and other
program functions. We also propose to include in this paragraph the
authority for local agencies and subdistributing agencies to delegate
responsibility for specific program functions (e.g., food distribution
or storage) to another agency, with the State agency's approval. This
authority is currently included under Sec. 247.6(c).
While the State agency is provided a great deal of flexibility in
administering the program, and in selecting other agencies to perform
specific program functions, the State agency must itself perform a few
functions. Thus, in paragraph (b) of this proposed section, we propose
to make it clear that the State agency may not delegate the
responsibility for establishing eligibility requirements for which it
has options (such as income limits for women, infants, and children),
or for conducting management reviews of local agencies. Through
management reviews, the State agency determines if the program is being
properly administered, and if corrective actions are needed.
In paragraph (c) of this proposed section, we propose to include
the requirement that State, subdistributing, and local agencies
administer the program in accordance with the provisions of this part,
and with the provisions of 7 CFR part 250 of this chapter, except where
they are inconsistent with this part. The current references to
specific circulars in Sec. 247.3 are deleted, since they are all
obsolete.
Agreements, Section 247.4
Currently, the requirement that State agencies enter into an annual
agreement with the Department to operate the program is included under
Sec. 247.3, as is the requirement that State agencies enter into
agreements with distributing agencies. The requirement that State and
local agencies enter into agreements, and the required contents of
those agreements, are currently included under Sec. 247.6. Also
currently under Sec. 247.6 is the requirement that local agencies and
other agencies selected to perform specific program functions sign an
agreement. We propose to include all agreement requirements in this
proposed Sec. 247.4.
In paragraph (a), we propose to include all of the current required
agreements between administering agencies. However, we propose to
remove the present requirement that, in addition to the agreement with
the State agency, the subdistributing agency (currently referred to as
the distributing agency) must also sign an agreement with FNS. Since
the State agency is responsible for the administration of the program
at the State level, an agreement between the subdistributing agency and
FNS serves no real purpose. Also in this paragraph, we propose to
clarify that the Federal-State agreement utilized is Form FNS-74.
Currently, a list of the required contents of agreements between
State and local agencies is included under Sec. 247.6(b).
Additionally, under Sec. 247.6(c), the agreement between the local
agency and another agency must state the program responsibilities of
the other agency. In paragraph (b) of this proposed section, we propose
to include the required contents of all agreements, with the exception
of the Federal-State agreement (which is a standard form). We propose
to require that all agreements contain the following:
(1) An assurance that each agency will administer the program in
accordance with the provisions of this part and with the provisions of
7 CFR part 250, unless they are inconsistent with the provisions of
this part.
(2) An assurance that each agency will maintain accurate and
complete records for a period of three years from the end of the fiscal
year to which they pertain, or, if they are related to unresolved
claims actions, audits, or investigations, until those activities have
been resolved.
(3) A statement that each agency receiving commodities for
distribution is responsible for any loss resulting from improper
distribution, or improper storage, care, or handling of commodities.
(4) A statement that each agency receiving program funds is
responsible for any misuse of these funds.
(5) A description of the specific functions that the State,
subdistributing or local agency is delegating to another agency.
(6) A statement that the agreement may be terminated by either
party upon 30 days written notice.
In paragraph (c) of this proposed Sec. 247.4, we propose to list
specific requirements for agreements between State and local agencies,
which are in addition to the requirements of paragraph (b) of this
section. We propose to require that the agreement between State and
local agencies include:
(1) An assurance that the local agency will provide nutrition
education as required under 7 CFR part 247.
(2) An assurance that the local agency will provide information to
participants on the importance of health care and on other health,
nutrition, and public assistance programs, and make referrals as
appropriate, as required under 7 CFR part 247.
(3) An assurance that the local agency will distribute commodities
in accordance with 7 CFR part 247, and with the approved food package
guide rate.
(4) An assurance that the local agency will take steps to prevent
and detect dual participation.
(5) The names and addresses of all certification, distribution, and
storage sites under the jurisdiction of the local agency.
In paragraph (d), we propose to describe the duration of all
required agreements. We propose to make the Federal-State agreement
permanent, and amended at the initiation of State agencies or at the
request of FNS, instead of annual. All amendments must be approved by
FNS. We also propose to clarify that the duration of agreements between
the State agency and local or subdistributing agencies is established
by the State agency. Similarly, we propose to clarify that the State
agency may establish, or permit
[[Page 62169]]
the local or subdistributing agency to establish, the duration of
agreements between the local or subdistributing agency and other
agencies. Current regulations do not address the duration of these
agreements.
State and Local Agency Responsibilities, Section 247.5
Proposed Sec. 247.5 includes an outline of the major
responsibilities of State and local agencies in program administration.
Since current regulations do not include such an outline, it is
necessary to read through all of 7 CFR part 247 to determine the major
responsibilities of the State or local agency in the program. This
section is not, however, meant to be a comprehensive list of all State
or local agency responsibilities. We propose to break out, in three
separate paragraphs, the major responsibilities shared by the State and
local agency, and specific responsibilities of the State agency and
those of the local agency. We are not proposing to impose any new
responsibilities on State or local agencies in this section. While some
of the responsibilities listed are not specifically discussed in
current regulations, they are inherent in the administration of the
program (e.g., ordering commodities and maintaining caseload limits).
State Plan, Section 247.6
Currently, under Sec. 247.3(a), the State agency is required to
submit a State Plan on an annual basis and, under Sec. 247.5, must
submit a State Plan to initiate or continue program operations and to
request additional caseload to expand service to women, infants,
children, and elderly persons. Other State Plan requirements are also
included under the current Sec. 247.5. We propose to include all State
Plan requirements in this proposed Sec. 247.6. In paragraph (a), we
propose to describe the purpose, general format, and duration of the
State Plan. We propose to make the State Plan permanent, rather than
annual, with amendments submitted at the State agency's initiative, or
at FNS request, and with all amendments subject to FNS approval. In
conjunction with this proposal, we also propose to require that the
State agency submit a State Plan to initiate the program, while
removing the requirement for continuing program operations. While a
State Plan to initiate the program must continue to describe the
caseload needed to serve eligible women, infants, children, and the
elderly, we propose to require that requests for additional caseload be
made in amendments to the Plan, as described under paragraph (d) of
this section.
We also propose to remove the language which states that FNS will
assign caseload in approving the State Plan submission, and which
describes the factors that determine the caseload assignment. We
propose to include requirements and procedures for caseload assignment
under the proposed Sec. 247.21. We retain the State agency's option to
submit the State Plan in the format provided in FNS guidance, in an
alternate format, or in combination with other documents required by
Federal regulations. However, we propose to remove the requirement that
FNS receive advance notification of submission in an alternate format.
We propose to encourage the State agency to collaborate with the State
agency administering the Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC) in development of the State Plan
(collaboration with the State WIC agency is required in developing a
plan to prevent and detect dual participation). Likely areas of
collaboration include plans for serving women, infants, and children,
program outreach, and nutrition education. These recommendations for
collaboration with the State WIC agency would incorporate policy
guidance provided to State CSFP and WIC agencies on August 31, 2000. As
at present, the State Plan must be signed by the State agency official
responsible for program operations.
In paragraph (b) of this proposed section, entitled When must the
State Plan be submitted?, we propose to retain the current requirement
that the State agency submit the State Plan by August 15, to receive
approval by the beginning of the fiscal year. We also include unchanged
the requirement that FNS provide written approval or disapproval within
30 days of the receipt of the Plan or amendments, and must indicate the
reason for disapproval. FNS must notify the State agency within 15 days
if further information is required to make a decision on the Plan. We
propose to add, in paragraph (b), that the approval of the State Plan
or amendments is a prerequisite for the assignment of caseload and the
allocation of administrative funds but does not ensure that caseload
and funds will be provided. Program resources are dependent upon
appropriations, which often become available later in the year. As at
present, we propose to include the requirement that a copy of the State
Plan be available for public inspection at the State agency.
In paragraph (c) of this proposed section, we propose to include
the required contents of the State Plan. In the interest of reducing
the paperwork burden for State agencies, we propose to remove several
elements currently required to be included in the State Plan. We do not
believe a description of these activities need be included in the State
Plan, as Federal regulations sufficiently describe the requirements and
the means by which the State agency must comply with them. We propose
to remove the following elements:
(1) The names and addresses of all certification, food
distribution, and storage sites under the jurisdiction of the local
agency.
(2) A description of plans for requesting program expansion. Since
the State Plan would be a one-time submission, expansion, or additional
caseload requests, and plans for opening new sites, would be made in an
amendment to the State Plan, as described previously.
(3) The requirement that the plan for nutrition education services
provide for participant input and an evaluation component.
(4) A description of the manner in which the State agency plans to
monitor local agencies.
(5) A description of plans to involve local agencies and other
parties in the development of the Plan for the next fiscal year. Again,
we are proposing that the Plan no longer be developed and submitted
each year.
(6) A description of the financial management system that will be
utilized.
(7) A description of the procedures for resolving commodity
complaints.
(8) A description of the audit procedures.
(9) A description of procedures used to meet civil rights
requirements.
(10) A description of the fair hearing procedures for participants.
Since the procedures that the State agency must follow are detailed in
the regulations, it is not necessary for the State agency to describe
them in the Plan.
(11) A description of plans to initiate or expand service to
elderly persons, including the means by which the homebound elderly
will be served. We propose to retain only the requirement to address
the means by which the homebound elderly will be served. Until 1986,
the elderly could participate only under three pilot sites. Since
general service to the elderly has long since become a standard part of
the program, it is no longer necessary to specifically describe plans
to serve them.
Currently, the State agency must describe in the State Plan the
manner in which foods are distributed to local agencies and to
participants. We propose to revise this to require that the
[[Page 62170]]
State agency describe the system of storage and distribution of
commodities in the State Plan. Because of the importance of the proper
storage of commodities and their safe and timely distribution to local
agencies, we believe it is important for the State agency to describe
the means by which it will meet these responsibilities. We also propose
to require the State agency to include a description of the standards
it will use in determining if the pursuit of a claim against a
participant is cost-effective, in accordance with the proposed Sec.
247.30(d).
In paragraph (d) of this proposed section, entitled When must the
State agency submit amendments to the State Plan?, we propose to
include the requirement that the State agency submit amendments to FNS
for approval if it desires to amend the State Plan. As at present, the
State agency may submit amendments at any time during the fiscal year.
FNS may also require that the State Plan be amended to reflect changes
in Federal law or policy. This change is necessary since the State Plan
would be made permanent under this rule. We also propose to include the
requirement that, if a State agency would like to receive additional
caseload for the caseload cycle beginning the following January 1, it
must submit an amendment to the Plan that conveys the request for
additional caseload by November 5. The State agency must also describe
any plans for serving women, infants, children, and the elderly at new
sites in this submission. FNS currently allows State agencies until
early November to submit additional caseload requests, as it allows the
State agency sufficient time to review complete participation figures
for the previous fiscal year, which are not available until October.
The State agency cannot meaningfully request additional caseload until
it knows what its base caseload will be, and its base caseload depends
on its actual participation during the past fiscal year. FNS action on
the State agency's request for additional caseload is part of the
caseload assignment process, as described under the proposed Sec.
247.21.
Selection of Local Agencies, Section 247.7
Currently, under section 247.6, a local agency must submit a
written application to the State agency that includes sufficient
information to allow the State agency to determine its eligibility. We
propose to retain this requirement in paragraph (a) of this proposed
Sec. 247.7, entitled How does a local agency apply to participate in
CSFP? We propose to clarify that the information submitted must
describe how the local agency will operate the program. We also propose
to require that, for nonprofit agencies, the application must include
the tax-exempt status of the agency.
Under current regulations, a nonprofit agency must have tax-exempt
status under 26 U.S.C. 501 of the IRC. However, under 26 U.S.C.
501(c)(3) of the IRC, as amended since the current regulatory
requirement was established, organizations are automatically tax-exempt
if they are organized or operated exclusively for religious purposes.
Thus, we propose to clarify that such nonprofit agencies already have
the tax-exempt status required for participation in CSFP. Additionally,
under other USDA food distribution programs, nonprofit organizations
that have applied for tax-exempt status with the IRS, and are moving
toward compliance with the requirements for recognition of tax-exempt
status, are eligible to participate. We propose to include nonprofit
agencies with this provisional tax-exempt status as eligible local
agencies in CSFP as well, and to also propose conditions used in other
programs to determine the continued participation of these
organizations in CSFP. These conditions are described below, under
paragraph (c).
We propose to state, in paragraph (a) of this proposed section,
that, to be eligible to participate in CSFP, a nonprofit agency must
have tax-exempt status under 26 U.S.C. 501 of the IRC, or must have
applied for tax-exempt status with the IRS, and be moving towards such
status. We propose to indicate that organizations organized or operated
exclusively for religious purposes are automatically tax-exempt under
26 U.S.C. 501(c)(3) of the IRC. We also propose to indicate that
organizations required to obtain tax-exempt status must provide
documentation from the IRS that they have obtained such status, or have
applied for it.
In paragraph (b) of this proposed section, entitled On what basis
does the State agency make a decision on the local agency's
application?, we propose to include the basic guidelines that the State
agency must consider in making a decision on approval or denial of the
local agency's application to participate in CSFP. These guidelines do
not constitute an additional requirement. Their inclusion in these
regulations is simply meant to assist State agencies--particularly new
State agencies--in choosing which local agencies to participate. The
criteria are:
(1) The ability of the local agency to operate the program in
accordance with Federal and State requirements.
(2) The need for the program in the projected service area of the
local agency.
(3) The resources available (caseload and funds) for initiating a
program in the local area.
(4) For nonprofit agencies, the tax-exempt status, with appropriate
documentation.
In paragraph (c) of this proposed Sec. 247.7, we propose to
include the actions that the State agency must take if an agency that
has been approved for CSFP participation is subsequently denied tax-
exempt status by the IRS, or does not obtain this status within a
certain period of time. We propose that, if a participating agency's
application for tax-exempt status is subsequently denied by the IRS,
the agency must immediately notify the State agency, which then must
immediately terminate their participation in CSFP. If, after 180 days
of the organization's approval for participation, the agency has not
obtained, and submitted, documentation of its tax-exempt status, the
State agency must terminate the agency's participation in CSFP until
such time as recognition of tax-exempt status is obtained. However, the
State agency may grant an extension of 90 days to an agency if the
agency can demonstrate that its inability to obtain tax-exempt status
within the 180-day period is due to circumstances beyond its control.
In paragraph (d) of this proposed section, we propose to indicate
how much time the State agency has to act on the local agency's
application to participate in CSFP. We propose to extend the period of
time for deciding on approval or denial of the local agency's
application from 30 days to 60 days. With a longer period of time for
review, the State agency would be better able to make a determination
of the local agency's eligibility to participate, and to consider other
applicable criteria as described in paragraph (b) of this proposed
section. We retain the requirement that a notification of denial of the
application be in writing and that the State agency provide for an
appeal of the denial, in accordance with the requirements of the
proposed Sec. 247.35.
We propose to remove current requirements that the State agency
return the application to the local agency if a denial is based on lack
of funds, and justify the need for approval of a local agency in an
area already served by the WIC Program. We do not believe that the
return of the application serves any useful purpose. Although both WIC
and CSFP overlap somewhat
[[Page 62171]]
in the groups that they serve, the differences (especially in CSFP
service to the elderly) are sufficient to justify the existence of both
programs in the same area. However, under the proposed Sec. 247.6,
State agencies are encouraged to coordinate with the WIC State agency
in formulating plans to serve women, infants, and children in common
areas of service.
Individuals Applying To Participate in CSFP, Section 247.8
Currently, the process of applying for program benefits,
determination of eligibility, and participant rights and
responsibilities are included under Sec. 247.7, entitled
``Certification''. We propose to split up these related topics into
several sections for the sake of clarity. In this proposed Sec. 247.8,
we propose to include the specific information applicants must provide
on the application to allow the local agency to make a determination of
eligibility. This information is currently listed under Sec. 247.7(d).
Present regulations require that information be recorded on a
``certification form'', which we refer to as the application. The
information must include, at a minimum, the applicant's name and
address and other information necessary to make a determination of
eligibility. Although ``other information'' must necessarily include
data necessary to determine household income eligibility, and the
applicant's age, or pregnancy, as applicable, we propose to
specifically list the required information for the sake of clarity. We
also propose to include in this section the requirement that each
applicant present some form of identification, which is currently
required under Sec. 247.7(j)(4).
We propose to retain the requirement that the applicant, or adult
parent or guardian of the applicant, sign the application form beneath
a pre-printed statement attesting to the truthfulness of the
information provided, and the applicant's liability to federal
prosecution for deliberate misrepresentation. Presently, the statement
must be read by, or to, the applicant (or adult parent or guardian)
before signing. However, we propose to include in this statement the
notification that information provided may be shared with other
organizations to prevent dual participation. With the consent of the
participant, this information may also be shared with other
organizations to assist in outreach or in eligibility determination for
other public assistance programs. This sharing of information would
help to ensure that program applicants are aware of the benefits
provided by other public assistance programs. These proposed changes
have been included in Sec. 247.36.
Eligibility Requirements, Section 247.9
Currently, the eligibility requirements for CSFP, including the
eligible population categories in the program, are listed under Sec.
247.7(a). We propose to include the eligibility requirements and
eligible population groups in this proposed Sec. 247.9. In paragraph
(a), we propose to include the current eligible population groups, with
changes only to improve clarity. For example, we propose to list each
population group in a numbered format, and to describe each group
fully, as in the definitions listed under the proposed Sec. 247.1.
This avoids the need for the reader to refer to the definitions to see
that, under CSFP, children means persons who are at least one year of
age, but have not reached their sixth birthday.
In paragraph (b), we propose to include the income eligibility
requirements for women, infants, and children. Currently, in order to
be eligible for CSFP, women, infants, and children must have income
eligibility for local benefits under existing Federal, State, or local
food, health, or welfare programs for low-income persons. Although
current regulations contain no parameters with regard to women,
infants, and children, State agencies have established 185 percent of
the Federal Poverty Income Guidelines as the income eligibility
standard for this group, as this conforms to the upper limit used in
the Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC). For the purpose of clarification, we propose to
require, in paragraph (b)(1) of this proposed section, that the State
agency establish household income guidelines for women, infants, and
children that are at or below 185 percent of the Federal Poverty Income
Guidelines, but not below 100 percent of these guidelines. However, in
conformance with the WIC Program, we propose to require that the State
agency accept as income-eligible, regardless of actual income, any
applicant who is: (1) Certified as eligible to receive food stamps
under the Food Stamp Act of 1977, Temporary Assistance for Needy
Families (TANF) under Part A of Title IV of the Social Security Act, or
Medical Assistance (i.e., Medicaid) under Title XIX of the Social
Security Act; or, (2) a member of a family that is certified eligible
to receive assistance under TANF, or a member of a family in which a
pregnant woman or an infant is certified eligible to receive assistance
under Medicaid. We also propose, in paragraph (b)(2), to allow the
State agency to consider women, infants, and children participating in
another Federal, State, or local food, health, or welfare program as
automatically eligible for CSFP if the income eligibility guidelines
for the program are equal to or lower than the established CSFP
guidelines.
We also propose, in paragraph (b)(3), to require that, for a
pregnant woman, each embryo or fetus in utero be counted as a household
member in determining if the household meets the income eligibility
standards for the program. If, for example, a pregnant woman with a 3-
year old child applied for CSFP benefits for herself and her child, the
local agency would consider them a household of three members, and not
two, in determining their eligibility. This provision is already
included as part of eligibility criteria in the WIC Program, and CSFP
State agencies have been authorized to implement it by policy
memorandum.
Currently, elderly persons must have household income at or below
130 percent of the Federal Poverty Income Guidelines published annually
by the Department of Health and Human Services. However, elderly
persons certified before September 17, 1986, are subject to the
eligibility criteria in effect at the time of their certification. On
the date referenced, FNS published an interim rule in the Federal
Register at 51 FR 32895 to implement legislation allowing low-income
elderly persons at all CSFP sites to be served, if resources remained
after providing benefits to all eligible women, infants, and children
at the sites. The rule also established the current income eligibility
guidelines to ensure that the neediest elderly persons received
benefits. Before that date, elderly persons were served only at three
pilot sites in New Orleans, Louisiana, Detroit, Michigan, and Des
Moines, Iowa. Elderly participants in the pilots were subject to the
same income eligibility criteria used for women, infants, and children.
We propose to include the income eligibility requirements for elderly
persons in paragraph (c) of this proposed section, without change from
the current requirements.
Each year, usually in February, the Department of Health and Human
Services publishes the adjusted Federal Poverty Income Guidelines in
the Federal Register. Currently, FNS publishes notification in the
Federal Register each year of the adjusted income guidelines by
household size, including adjustments for 185 percent and 130 percent
of the poverty level, as applicable for specific FNS programs. Although
CSFP regulations do not make any reference to it, CSFP State and local
[[Page 62172]]
agencies are currently notified of the adjusted guidelines for elderly
persons annually. Prior to 2002, this notification was provided through
publication of a separate notice. However, in order to expedite the
implementation of the guidelines, in 2002 we provided notification of
the adjusted guidelines by memorandum. We propose to include, in
paragraph (d) of this proposed section 247.9, reference to the
notification, by memorandum, of the annual adjustment of the income
guidelines by household size, and the effective date of the
adjustments. The notification will provide the adjusted guidelines for
185 percent, 130 percent, and 100 percent, of the poverty guidelines.
We propose to require that the adjusted guidelines be implemented for
the elderly immediately upon receipt of the memorandum, in order to
minimize the time gap between the adjustment of the guidelines and the
cost-of-living adjustment in Social Security benefits, which is made in
January. This requirement would help to ensure that elderly persons
receiving Social Security benefits do not become temporarily ineligible
for CSFP. We propose to require that the adjusted guidelines be
implemented for women, infants, and children at the same time that the
State WIC agency implements the adjusted guidelines for WIC
eligibility. These implementation dates are current practice in CSFP,
even though implementation of adjusted guidelines is not currently
addressed in regulations.
In paragraph (e) of this proposed section 247.9, we propose to more
clearly indicate how income is defined and considered in determining
eligibility for CSFP. In making this clarification, we propose to
include the following WIC regulatory provisions:
(1) Income means gross income before deductions for such items as
income taxes, employees' social security taxes, insurance premiums, and
bonds.
(2) The State agency may exclude from consideration the following
sources of income listed under 7 CFR 246.7(d)(2)(iv):
(i) Any basic allowance for housing received by military services
personnel residing off military installations.
(ii) The value of inkind housing and other inkind benefits.
(3) The State agency must exclude from consideration all income
sources excluded by legislation, and which are listed in 7 CFR
246.7(d)(2)(iv)(C). FNS notifies State agencies of any new forms of
income excluded by statute through program policy memoranda.
(4) The State agency may allow local agencies to consider the
household's average income during the previous 12 months and current
household income to determine which more accurately reflects the
household's status. In instances in which the State makes the decision
to permit local agencies to determine a household's income in this
manner, all local agencies must comply with the State's decision and
apply this method of income determination in situations in which it is
warranted.
Currently, the CSFP regulations do not define income, or list
income exclusions. Thus, it is up to the State or local agency to
determine how they are to define and consider income in determining
eligibility for CSFP. Based on a review of State Plans, we believe that
gross income has generally been used in eligibility determination. We
also believe that the WIC income exclusions listed have generally been
used, as most of them are established by law. However, the lack of
guidance in regulations or policy has resulted in some questions and
uncertainty. We believe that adoption of these proposals would help to
alleviate the confusion in how income should be considered in CSFP, and
would not have a significant impact on participation.
Annual cost-of-living increases in Social Security benefits usually
take effect in January. Since the Department of Health and Human
Services does not usually adjust the Federal Poverty Income Guidelines
until February, these increases make some elderly participants
ineligible for benefits for a few months. Providing the option of
looking at average income over the previous 12 months, as well as
present income, would allow these elderly participants to remain on the
program, instead of being discontinued for a few months each year.
Similar options are already available for WIC, see 7 CFR
246.7(d)(2)(vii), and school lunch, see 7 CFR 245.2(a)(a-2) free and
reduced price eligibility determinations.
Currently, under Sec. 247.7(a), the State has the option to
establish ``nutritional risk'' criteria for CSFP eligibility, and to
require that individuals reside within the local CSFP service area at
the time of application. Under paragraph (f) of this proposed section,
entitled What other options does the State agency have in establishing
eligibility requirements for CSFP?, we propose to include these options
substantially unchanged but reworded in the interest of clarity. As at
present, the State agency may not require that an individual reside in
the area for any fixed period of time.
Distribution and Use of CSFP Commodities, Section 247.10
Currently, Sec. 247.7(c) describes the monthly issuance of CSFP
foods to participants, and allows local agencies the option of
distributing a two-month supply of foods every other month. We propose
to include this option under this proposed Sec. 247.10. However, we
propose to remove the current requirement that the local agency
choosing to distribute foods every other month provide the participant
the option of continuing to receive foods on a monthly basis. Although
the local agency may provide this option, we believe that the
requirement to do so may place an undue burden on the local agency. We
propose to include in this section the requirement that the local
agency require each participant, or participant's proxy, to present
some form of identification before receiving CSFP commodities. This
requirement is currently under Sec. 247.7(j)(4). We also propose to
include in this section current restrictions in the distribution and
use of CSFP commodities that are presently contained in Sec. Sec.
247.7(h) and 247.8(e). As at present, State and local agencies may not
require, or request, that participants make any payments, or provide
any materials or services in connection with the distribution of CSFP
commodities, and may not use commodities to further the political
interests of any person or party. Also, CSFP commodities may be used
for nutrition education for CSFP participants, but may not be used for
outreach, refreshments, or for any purpose other than distribution to
CSFP participants.
Applicants Exceed Caseload Levels, Section 247.11
Currently, under Sec. 247.7(b), if all caseload slots are filled,
the local agency is required to maintain waiting lists of applicants
and, when caseload slots open up, provide benefits to eligible persons
on the waiting list in a specific order of priority. This order of
priority does not apply, however, to the caseload assigned to the
original elderly pilot projects. The current order of priority in
service is:
(1) Pregnant women, breastfeeding women, and infants.
(2) Children ages 1 through 3.
(3) Children ages 4 and 5.
(4) Postpartum women.
(5) Elderly persons.
The local agency must include on the waiting list the date of
application, the population group of the applicant, and information
necessary to be able to contact the applicant if caseload space
[[Page 62173]]
becomes available. Applicants must be notified of their placement on a
waiting list within 20 days of their request for benefits.
As described in the proposed Sec. 247.15, we propose to require
that applicants be notified of their placement on a waiting list, or
their ineligibility or eligibility for benefits, within 10 days from
the date of application. The shorter time period is more reasonable for
applicants seeking food assistance. We also propose to remove the
current provision that protects the original elderly pilot caseload
from the designated priority structure. The continued participation of
the original elderly pilot participants, who are now few in number, is
no longer threatened by limited caseload, since the administering local
agencies have a much larger caseload assignment than they did 15 years
ago.
Rights and Responsibilities, Section 247.12
Currently, under Sec. 247.7, the local agency must inform the
applicant of certain rights and responsibilities in CSFP. We propose to
include the most basic of these rights and responsibilities, listed
below, in this proposed Sec. 247.12. In paragraph (a), which includes
applicant rights, we propose to expand the right to receive benefits
without discrimination to include age, disability, and sex, as well as
race, color, and national origin, in accordance with current laws. The
rights listed include:
(1) Program standards will be applied without discrimination by
race, color, national origin, age, disability, or sex.
(2) The local agency will provide notification of a decision to
deny or terminate CSFP benefits, and of an individual's right to appeal
this decision by requesting a fair hearing.
(3) The local agency will make nutrition education available to all
adult participants, and to parents or guardians of infant and child
participants, and will encourage them to participate.
(4) The local agency will provide information on other nutrition,
health, or assistance programs, and make referrals as appropriate.
In paragraph (b), which includes applicant responsibilities, we
propose to expand the information that must be provided to applicants
to include the prohibition on dual participation, and the possibility
of a claim against an individual who receives benefits improperly as a
result of dual participation or other program violation, in accordance
with provisions under the proposed Sec. 247.30, which addresses
claims. We also propose to add that the applicant must be informed that
any changes in household income or composition must be reported within
10 days after the change becomes known to the household. We believe
that this will aid in deterring dual participation and submission of
fraudulent information. The information that must be provided includes:
(1) Dual participation is not permitted.
(2) Improper receipt of CSFP benefits as a result of dual
participation or other program violations may lead to a claim against
the individual to recover the value of the benefits, and
disqualification from CSFP.
(3) Participants must report changes in income or household
composition within 10 days after the change becomes known to the
household.
We propose to include other applicant or participant rights
currently listed under Sec. 247.7 in separate sections under
notification requirements, provisions for non-English speakers, and
other public assistance programs. The breakout of these provisions into
separate sections is done simply to increase clarity.
Provisions for Non-English or Limited English Speakers, Section 247.13
Currently, under Sec. Sec. 247.7(e) and 247.19(b), if a
significant proportion of the population in an area is composed of non-
English or limited English speaking persons with a common language,
State and local agencies are required to inform such persons of their
rights in the program, and to ensure that other program information,
except application forms, is provided, in an appropriate language.
Additionally, the State agency must ensure that bilingual staff members
or interpreters are available to serve these persons. We propose to
consolidate these two related provisions of current regulations in this
proposed Sec. 247.13. We also propose to clarify that State and local
agencies must inform such persons of their responsibilities, as well as
their rights in the program, as listed in the proposed Sec. 247.12, in
an appropriate language.
Other Public Assistance Programs, Section 247.14
Currently, under Sec. 247.7(f), the local agency is required to
advise participants of the importance of receiving health care, the
types of health services available, and their location. Additionally,
section 1771(e) of the Food, Agriculture, Conservation, and Trade Act
of 1990, Public Law 101-624, amended the Agriculture and Consumer
Protection Act of 1973 (Pub. L. 93-86) to mandate that local agencies
provide participating pregnant women, women with infants and children,
and elderly persons with written information on specific programs that
may affect their health, nutrition, or general welfare. This statutory
provision has been implemented by policy memorandum but has not been
included in the regulations. We propose to combine these regulatory and
legislative requirements in this proposed Sec. 247.14.
Under paragraph (a), we propose to include the specific programs
contained in the law that apply to women, infants and children. For
these applicants, the local agency must provide written information
about Medicaid (42 U.S.C. 1396 et seq.), the Food Stamp Program (7
U.S.C. 2011 et seq.), the Temporary Assistance for Needy Families
(TANF) program under part A of Title IV of the Social Security Act (42
U.S.C. 601 et seq.)(SSA), and the child support enforcement program
established under part D of Title IV of the SSA (42 U.S.C. 651 et
seq.). As required by the law, the State agency must provide local
agencies with materials showing the income standards utilized in the
Medicaid Program (42 U.S.C. 1396 et seq.). In addition to these
programs, we propose to require also that the local agency provide
information on the WIC Program, to allow individuals eligible for both
CSFP and WIC to choose the program in which they wish to participate.
The local agency must also make clear that an individual may not
participate in both CSFP and WIC simultaneously. Local agencies must
also make referrals to these programs, as appropriate.
In paragraph (b), we propose to include the programs referred to in
the law that apply to the elderly. For these applicants, the local
agency must provide written information on the Food Stamp Program, and
supplemental security income and medical benefits provided under Title
XVI (42 U.S.C. 1381 et seq.) and Title XIX (42 U.S.C. 1396 et seq.)
(including medical assistance provided to a qualified medicare
beneficiary--as defined in section 1905(p) (42 U.S.C. 1396d(5)) of the
SSA. Local agencies must also make referrals to these programs, as
appropriate.
Currently, Sec. 247.23(a) states that the value of CSFP benefits
may not be considered as income or resources in other public assistance
programs, or for any purpose under Federal, State or local laws. We
propose to include this statement, substantially unchanged, in
paragraph (c) of this proposed Sec. 247.14.
[[Page 62174]]
Notification of an Applicant's Eligibility or Ineligibility, or
Placement on a Waiting List, Section 247.15
Currently, under Sec. 247.7(f), the State or local agency is
required to notify an applicant in writing of a determination that the
applicant is not eligible for CSFP benefits, and must document and
maintain on file the reason that the applicant is not eligible.
However, there is currently no requirement that the notification be
made within a certain period of time, or that the applicant be notified
of the reason for the denial of benefits. Currently, under Sec.
247.7(b), the local agency is required to notify applicants of their
placement on a waiting list, if no caseload slots are available, and
provides a time limit of 20 days for this notification.
We propose to require, in this proposed Sec. 247.15, that the
local agency provide applicants with notification of their
ineligibility or eligibility for CSFP, or their placement on a waiting
list, within 10 days from the date of application. This is a reasonable
period of time for a decision to be made on eligibility for food
assistance, and to allow ineligible applicants to receive the
information they need to seek other sources of assistance. We propose
to retain the current requirement that notification of ineligibility be
in writing, and include a statement of the individual's right to a fair
hearing to appeal the decision. We propose to require that the written
notification also include the reason that the applicant is ineligible.
We propose to include the requirement to document and maintain on file
the reasons for denying benefits to applicants under the proposed Sec.
247.29, which addresses all reporting and recordkeeping requirements.
We also propose to include in this section a requirement that the
notification of approval of benefits be accompanied by information on
the time, place and means of food distribution (e.g., once a month,
every two months), and the length of the certification period. The
requirement that this information be provided is currently under
section 247.7(f).
Certification Period, Section 247.16
Currently, under Sec. 247.7(g), the State agency must establish a
certification period, which is the period of time participants may
receive CSFP benefits before their eligibility must be reviewed. The
certification period established by the State agency generally may not
exceed six months in length, with the following exceptions:
(1) Pregnant women must be certified for the duration of their
pregnancy, and up to six weeks postpartum.
(2) Elderly persons certified before September 17, 1986, are
subject to the terms and conditions in place at the time of their
original certification.
(3) The certification period for other elderly persons may be
extended for an additional six months without a review of eligibility
criteria if the person's address and continued interest in program
benefits are confirmed and if no women, infants, or children are
waiting to be served.
We propose to include certification period requirements under this
proposed Sec. 247.16. In paragraph (a), we propose to include the
length of the certification period for women, infants, and children
without change. However, to reduce the burden on local agencies, we
propose to allow State agencies to authorize local agencies to extend
the certification period of elderly persons without a review of
eligibility criteria for additional six-month periods (and not just for
one six-month period), if, at each six-month interval, the conditions
listed above are met. However, we propose to state explicitly that
local agencies must have sufficient reason to believe that the elderly
participant continues to meet the income eligibility standards (e.g.,
the elderly person has a fixed income). In conjunction with this
proposed extension of the certification period for the elderly, we
propose to remove the current provision that provides separate
certification period criteria for elderly persons certified before
September 17, 1986.
In paragraph (b) of this proposed section, we propose to require
that the certification period always extends to the final day of the
month in which eligibility expires (e.g., the last day of the month in
which a child reaches his or her sixth birthday). Under current
regulations, the certification period may extend to this date. We
believe that this certification period requirement should be uniform
throughout the program.
Currently, under Sec. 247.7(i), in the event that a CSFP or WIC
participant moves to another area during the certification period, he
or she may receive benefits under the local CSFP agency in the new area
for the duration of the certification period. We propose to include
this right of transfer of certification under paragraph (c) of this
proposed section. We propose to add that, in the case of a WIC
participant, the local agency must first determine that the participant
is also eligible for CSFP, as eligibility requirements in both programs
may not be the same. We also propose to remove the requirement that the
State (or local) agency issue a verification of certification form to
the participant to effect this transfer. We believe that, in most
cases, such a form would be unnecessary, as the participant will have
received notification of the certification period when eligibility was
determined. Alternatively, the local agency in the participant's new
area may simply make a telephone call to the other local agency to
verify the certification period. We propose to state, however, that the
local agency must provide verification of the certification period to
the participant upon request.
Under paragraph (d), we propose to include the current requirement
that the local agency notify the participant at least 15 days before
the expiration of the certification period that eligibility for the
program is about to expire. Currently, this requirement is under Sec.
247.7(f)(4).
Notification of Discontinuance, Section 247.17
Currently, under Sec. 247.7(f)(3), the local agency must provide a
participant who is found, during the certification period, to be no
longer eligible for CSFP benefits with a notification of discontinuance
at least 15 days prior to the effective date of termination from the
program. The notification must include a reason for the participant's
ineligibility, and a statement that the participant may appeal the
discontinuance through the fair hearing process. We propose to include
these notification requirements under this proposed Sec. 247.17, and
to require also that the notification include the effective date of
program termination.
Nutrition Education, Section 247.18
Currently, under Sec. 247.8, two broad goals of nutrition
education are included, and State and local agency responsibilities for
providing nutrition education are described.
The two broad goals address the relationship of proper nutrition to
overall health, and achieving a positive change in food habits through
use of CSFP foods. We propose to include nutrition education
requirements in this proposed Sec. 247.18.
In paragraph (a), we propose to outline the State agency's
responsibilities in providing nutrition education. We propose to
include here the current requirements that the State agency establish
an overall nutrition education plan (which is part of the State Plan),
and ensure that local agencies provide nutrition education in
accordance with the plan. We also include the current requirement that
the
[[Page 62175]]
State agency establish an evaluation procedure to ensure that the
nutrition education provided is effective. The evaluation procedure
must include participant input and must be directed by a nutritionist
or other qualified professional. The evaluation may be performed by the
State or local agency or, by another agency under agreement with the
State or local agency.
In paragraph (b), entitled What type of nutrition education must
the local agency provide?, we propose to clarify nutrition education
requirements by consolidating the two broad goals currently included in
regulations and the current information that the local agency must
provide. We propose to reword the informational requirements to put
more emphasis on the relationship of the program to overall diet and
good health. We also propose to include in this paragraph the current
requirement that the local agency provide nutrition education that is
easily understood, that is related to participants' nutritional needs
and household situations, and that accounts for ethnic and cultural
characteristics whenever possible. We propose that the local agency
provide the participant with information on:
(1) The nutritional value of the foods provided in the program, and
their relationship to the overall dietary needs of the population
groups served.
(2) Nutritious ways to use the foods.
(3) Special nutritional needs of participants and how these needs
may be met.
(4) For pregnant and postpartum women, the benefits of
breastfeeding.
(5) The importance of health care, and the role nutrition plays in
maintaining good health.
(6) The importance of the use of the foods by the participant to
whom they are distributed, and not by another person.
We propose to remove the current language that the local agency
direct program funds to nutrition education for participants and
program staff. Local agencies may choose to meet nutrition education
requirements through use of other available resources, such as those
provided by the Expanded Food, Nutrition and Education Program (EFNEP)
or the Indian Health Service.
Under paragraph (c), entitled To whom must local agencies provide
nutrition education?, we propose to include the present requirement
that local agencies make nutrition education available to all adult
participants, and to parents or guardians of infants and child
participants. We also propose to include the present encouragement to
make nutrition education available to children, where appropriate.
Under paragraph (d), entitled May CSFP foods be used in cooking
demonstrations?, we include the current provision that the State or
local agency, or an agency with which it has signed an agreement, may
use CSFP foods in conducting cooking demonstrations as part of the
nutrition education provided to program participants, but not for other
purposes.
Dual Participation, Section 247.19
Currently, under Sec. 247.7(j), State and local agencies are
responsible for the detection and prevention of dual participation.
Dual participation may entail simultaneous participation in WIC and
CSFP, or simultaneous participation at more than one CSFP site. The
State CSFP agency must agree on a plan with the State WIC agency to
detect and prevent dual participation. The agreement must be in writing
and must be included in the State Plan. To aid in preventing dual
participation, the local agency must check the identification of each
participant. We propose to include the requirements for the prevention
and detection of dual participation without substantial change in
paragraph (a) of this proposed Sec. 247.19.
Currently, when a participant is determined to be committing dual
participation, the participant must be terminated from one of the
programs, and must be notified of termination from the other program,
if, in accordance with Sec. 247.7(k), the local agency exercises the
option to disqualify the participant. In paragraph (b) of this proposed
section, we propose to include the actions that the local agency must
take against an individual determined to be committing dual
participation. We propose to clarify that the local agency may, in some
instances, be required to disqualify a participant determined to be
committing dual participation, in accordance with requirements relative
to program violations in the proposed Sec. 247.20. We also propose to
include that the local agency must initiate a claim against the
participant to recover the value of benefits improperly received, in
accordance with the proposed Sec. 247.30(c).
Program Violations, Section 247.20
Currently, under Sec. 247.7(k), the State agency may disqualify
applicants and participants from CSFP if the applicant, participant,
parent, or caretaker is found to have fraudulently applied for, or
obtained, program benefits. The State agency may establish a period of
disqualification of up to 3 months. Fraud is defined in the current
regulations as the commission of specific actions (which are listed)
taken knowingly, willingly, and deceitfully. In this proposed Sec.
247.20, we propose to list, in paragraph (a), actions which are subject
to disqualification as program violations. Of the current list, we
propose to remove the alteration of program documents to receive
increased benefits or to transfer benefits; this action is included
under intentionally making false or misleading statements, orally or in
writing, which is retained from the current list. We propose to add as
a program violation the physical abuse, or threat of physical abuse, of
program staff. This problem has been related by some State and local
agencies and has already been included as a program violation in
regulations for the WIC Program. Other changes made to the current list
are simply for the purpose of clarification.
In paragraph (b), we propose to describe the disqualification
penalties for committing program violations. We propose to allow the
State agency to establish a disqualification period of up to one year,
instead of up to three months. Additionally, we propose to require that
the State agency require local agencies to disqualify participants from
CSFP for a period of up to one year for program violations that involve
fraud, unless the local agency determines that disqualification would
result in a serious health risk. We also propose to require that State
agencies require local agencies to permanently disqualify participants
who commit three program violations that involve fraud. For purposes of
this program, we propose to clarify that fraud includes the following
actions:
(1) Intentionally making false or misleading statements to obtain
CSFP commodities.
(2) Intentionally withholding information to obtain CSFP
commodities.
(3) Selling CSFP commodities, or exchanging them for non-food
items.
Individuals who commit dual participation may have committed a
fraudulent act and be subject to the required disqualification. CSFP
program operators, as well as those for the WIC Program, have expressed
the need for stronger sanctions against persons committing dual
participation and other program violations. Similar proposals regarding
the strengthening of penalties for program violations were adopted by
the WIC Program in a final rule published in the Federal Register at 65
FR 83248 on December 29, 2000 (effective February 27, 2001). Thus,
these proposals for CSFP would bring
[[Page 62176]]
the program into closer conformance with WIC in the important area of
program integrity. They would also help to assure that CSFP benefits
are available to those that really need the assistance.
In paragraph (c), we propose to include the requirement that the
State or local agency provide an individual with written notification
of disqualification from CSFP at least 15 days before the effective
date of the disqualification. The notification must include the
effective date and period of disqualification, the reason for the
disqualification, and must indicate that the individual may appeal the
disqualification through the fair hearing process. This is in
accordance with the right of the individual to a fair hearing to appeal
other adverse actions, including denial or discontinuance of benefits.
Caseload Assignment, Section 247.21
Currently, the processes of caseload assignment and allocation of
administrative funds are described under Sec. 247.10. We propose to
include caseload assignment in this proposed Sec. 247.21 and to
describe the allocation of administrative funds in the proposed Sec.
247.22. Currently, the order of caseload assignment is:
(1) The three original elderly feeding projects.
(2) Base caseload for each participating State agency, determined
by participation in the previous year.
(3) Expansion caseload requested by participating State agencies.
(4) Caseload for States newly approved to participate in CSFP.
We propose to remove the assignment of caseload to the three
original elderly feeding projects as the first step in the process of
assigning caseload to State agencies. The original intent of this
provision, which was included in the interim rule published in the
Federal Register at 51 FR 32895 on September 17, 1986, was to ensure
adequate caseloads to accommodate the original elderly pilot projects.
Since that time, assigned caseloads have increased dramatically, far
beyond the amount necessary to ensure continued participation of the
elderly pilot participants.
We propose to change the terminology from ``expansion'' caseload to
``additional'' caseload. The term additional caseload is more
appropriate, since it represents the caseload assigned to currently
participating States in addition to the base caseload. The term
expansion implies that the State is planning to expand to new areas of
the State. However, more often caseload is requested to allow service
to additional participants at existing sites, or to return to the base
caseload from the previous year.
Under Sec. 247.10, State agencies are currently eligible to
receive additional caseload if their monthly average participation
during the preceding July through September or the prior fiscal year,
or their participation during the month of September, equaled at least
90 percent of their assigned caseload level for the preceding caseload
cycle. In addition to using participation in the month of September to
meet the 90 percent caseload utilization requirement for the purpose of
obtaining additional caseload, the month of September is also included
in the determination of base caseload. In some instances, State
agencies that cannot sustain an average participation rate of 90
percent over a prolonged period of time will significantly increase
participation in the month of September in order to obtain additional
caseload and administrative funds for the following caseload cycle.
As discussed in detail below, the Farm Security and Rural
Investment Act of 2002 (Pub. L. 107-171, 116 Stat. 134 (May 13, 2002)),
requires that the Department provide State agencies with a grant per
assigned caseload slot, adjusted annually to reflect inflation, to pay
administrative costs. This change significantly increased the amount of
funds available to support the program in 2003, and will continue to
provide an enhanced, stable, and predictable administrative grant per
assigned caseload slot. As a result, States are expected to more fully
utilize assigned caseload. However, the establishment of an
administrative grant per caseload slot also provides a greater
incentive for States to request caseload in excess of what they can
utilize. To ensure that additional caseload slots are allocated to
States that are most likely to use them, we propose to implement more
realistic, rigorous performance measures. The revised performance
measures include (1) an increase in the caseload utilization
requirement from 90 percent to 95 percent, and (2) the removal of
participation during the month of September from the computation that
determines base caseload and a State's eligibility for additional
caseload.
In developing these proposals, we analyzed the performance of State
agencies over the last three fiscal years. Based on this analysis, and
the availability of a specific enhanced level of administrative funds,
it has been determined that State agencies can reasonably be expected
to meet these more rigorous measures. While these measures may
negatively impact a small number of States in any given year, they will
have a positive impact on the program as whole by facilitating
assignment of caseload slots to State agencies most likely to utilize
them based on past performance. The allocation of caseload slots to
such State agencies will ensure that the nutritional needs of low-
income women, infants, children, and elderly persons are more fully
met. We are specifically requesting comments on the removal of the
month of September.
Currently, under Sec. 247.10, State agencies are assigned the
lesser of an equal share of caseload available for expansion (up to
each State's expansion request), or the amount that FNS determines
State agencies need and can effectively manage. The criteria for making
this determination are currently described in general terms under Sec.
247.5(a), as ``demographic data'' and ``past performance of the State
agency''. We propose to include, in this proposed section, the more
specific factors that FNS considers in assigning additional caseload to
State agencies. The specific factors proposed here are those that we
have used over the last few years, and that were described in policy
guidance provided to State agencies in April 1999. The factors, in
descending order of importance, include:
(1) Program participation of women, infants, and children, and the
elderly in the State in the previous fiscal year.
(2) The percentage of caseload utilized by the State in the
previous caseload cycle.
(3) Program participation trends in the State in previous fiscal
years.
(4) Other information provided by the State agency in support of
the request.
We propose to remove the current option to simply assign an equal
amount of additional caseload to all States making requests. Since
program needs and performances of States differ widely, it would not be
a wise use of program resources to assign an equal amount of caseload
to all.
We also propose to include the specific factors that FNS considers
in determining how much caseload to assign to States approved to begin
participation in the program. The factors include:
(1) Justification provided by the State agency which includes names
and locations of local agencies, the areas within the State that will
be served, the amount of caseload necessary to support service to these
areas; and
(2) The total amount of caseload for new States that program funds
will support.
[[Page 62177]]
We do not propose to change other important aspects of the caseload
assignment process, including:
(1) Base caseload may not exceed the total caseload assigned in the
previous year.
(2) Priority in assignment of additional caseload, or caseload for
newly approved States, is given to requests to serve women, infants,
and children over requests to serve the elderly.
(3) Priority in assignment of caseload is given to currently
participating States over requests from non-participating States.
Under paragraph (b), we propose to respond to the question, When
does FNS assign caseload to State agencies? We propose to revise the
date by which FNS must assign caseload to December 31, or within 30
days after enactment of appropriations legislation for the full fiscal
year. Currently, FNS must assign caseload by December 1, or 30 days
after enactment of appropriations legislation. However, because of late
appropriations in several years, caseload has often been assigned later
than December 1. Hence, this proposed change reflects what has come to
be current practice. We are also proposing to change the caseload cycle
to conform to the proposed change in the timing of caseload assignment,
as described under the proposed section 247.1.
Under paragraph (c), we propose to describe the means by which
State agencies may request additional caseload for the next caseload
cycle. As proposed under section 247.6(d), the State agency would be
required to submit a request for additional caseload by November 5, as
an amendment to the State Plan. The submission must also describe plans
to serve women, infants, and children, and elderly, at new sites.
Allocation and Disbursement of Administrative Funds to State Agencies,
Section 247.22
Currently, the allocation and disbursement of administrative funds
to State and local agencies are addressed under Sec. Sec. 247.9 and
247.10. We propose to address FNS's allocation and disbursement of
administrative funds to State agencies in this proposed Sec. 247.22,
and to address the provision of funds by State agencies to local
agencies in the proposed Sec. 247.23.
In paragraph (a), we propose to include the current requirement
that, in order to receive administrative funds, the State agency must
have signed an agreement with FNS, in accordance with the proposed
Sec. 247.4(a)(1), and must have an approved State Plan, in accordance
with the proposed Sec. 247.6(a).
The total amount of appropriated funds available each year for the
administrative support of State and local agencies is established by
law. In 1990, section 1771(d)(2) of Public Law 101-624 amended section
5(a)(2) of Public Law 93-86 to increase the maximum level of
administrative funding available for State and local agencies from 15
percent of the program appropriation to 20 percent. Additionally, in
1996, section 402(b)(3) of the Federal Agriculture Improvement and
Reform Act of 1996, Public Law 104-127, amended section 5 of Public Law
93-86 to mandate that the Department provide up to 20 percent of food
funds carried over from the previous year for administrative support of
State and local agencies.
Section 4201(b) of the Farm Security and Rural Investment Act of
2002 amended section 5 of Public Law 93-86 to mandate that the
Department provide State agencies with a grant per assigned caseload
slot, adjusted annually to reflect inflation, to pay administrative
costs. It also deleted the limitation of total administrative funding
for the program of 20 percent of the program appropriation and of food
funds carried over from the previous year. Section 4201(b)(2)
stipulates the per-caseload slot amounts State agencies are to receive
in fiscal year 2003, and for subsequent fiscal years. For fiscal year
2003, the grant per assigned caseload slot is $51.49, an amount equal
to the per-caseload slot amount provided in fiscal year 2001 ($50.89),
adjusted by the percentage change between: (1) The value of the State
and local government price index, as published by the Bureau of
Economic Analysis of the Department of Commerce, for the 12-month
period ending June 30, 2001; and (2) the value of that index for the
12-month period ending June 30, 2002. For subsequent fiscal years, the
amount of the grant per assigned caseload slot is equal to the amount
of the grant per assigned caseload slot for the preceding fiscal year,
adjusted by the percentage change between: (1) The value of the State
and local government price index, as published by the Bureau of
Economic Analysis of the Department of Commerce, for the 12-month
period ending June 30 of the second preceding fiscal year; and (2) the
value of that index for the 12-month period ending June 30 of the
preceding fiscal year. In paragraph (b) of this proposed section, we
propose to include the current legislative mandates for allocating
administrative funds to State agencies. Although the statutory changes
described above are already in effect, we are amending the regulations
at this time to incorporate these changes.
We propose to remove current language under Sec. 247.10(b) that
describes the formula once used for the separate allocation of
administrative funds to support the distribution of surplus commodities
provided to CSFP for distribution to households. This separate
allocation of funds was eliminated by section 1771(d)(2) of Public Law
101-624.
In paragraph (c), we propose to include a description of the means
by which State agencies access administrative funds. As currently
described under Sec. 247.9(g), FNS provides funds to State agencies on
a quarterly basis, through a Letter of Credit, unless other funding
arrangements have been made with FNS. The State agency obtains the
funds by electronically accessing its Letter of Credit account.
State Provision of Administrative Funds to Local Agencies, Section
247.23
Currently, section 247.10(b) addresses the amount of federal
administrative funds that State agencies may retain to meet State-level
costs each fiscal year, and the provision of the remaining funds to
local agencies for their use in meeting program costs. The amount of
funds that State agencies may retain is determined by a specific
formula, and may not exceed $30,000. We propose to include these
provisions substantially unchanged in paragraph (a) of this proposed
Sec. 247.23. We do not propose to change the formula, or the maximum
amount of funds that State agencies may retain.
Under current regulations, the State agency may request approval
from FNS to retain more than the maximum amount provided by the formula
in any fiscal year. In paragraph (b), we propose to retain the State's
option to request to retain more funds than allowed by formula.
However, we propose to remove the limitation of this option to State
agencies that provide warehouse services. Although food storage costs
may make up a large part of a State agency's administrative costs,
other administrative functions may also put a strain on State funds,
and require the State agency to request to retain a larger share. As at
present, however, State agencies must justify to FNS the need for the
larger amount of funds, and must ensure that local agencies will not be
unduly burdened by a reduction in their administrative funding.
Currently, under Sec. 247.10(b)(6), the State agency must
apportion funds among local agencies according to their
[[Page 62178]]
respective needs. We propose to include this provision in paragraph (c)
of this proposed Sec. 247.23, and also to include the statement that
the State agency must apportion funds in a manner that ensures that the
funds will be used to achieve program objectives.
Recovery and Redistribution of Caseload and Administrative Funds,
Section 247.24
Currently, under Sec. 247.10(c), FNS may recover, and reassign,
caseload slots that are not being utilized, and may recover, and
reallocate, administrative funds that are not being utilized. In
redistributing these resources, FNS must use the same procedures used
in the initial assignment of the resources. We propose to include in
Sec. 247.24 FNS's authority to recover and redistribute caseload and
administrative funds. The redistribution of resources will be
accomplished using the same procedures described in the proposed
Sec. Sec. 247.21(a) and 247.22(b). FNS will reassign caseload using
the most up-to-date data on participation and caseload utilization, as
well as other information provided by State agencies. We propose to
make clear that whether a State agency voluntary gives up caseload
slots or FNS takes action to recover caseload slots, the State must use
95 percent of its original caseload allocation to be eligible for
expansion caseload.
We are requesting that State and local agencies provide specific
comments regarding procedures FNS should use in recovering caseload and
administrative funds (e.g., is there a specific time during the
caseload cycle that should be used to determine if there is a need to
recover caseload and administrative funds?).
The current limitation, found at Sec. 247.10(b)(4), which allows
FNS to recover no more than 25 percent of a State agency's
administrative funds allocation during any fiscal year is included in
this proposed rule. However, we are considering increasing or
eliminating the 25 percent limitation. Therefore, we are requesting
specific comments regarding what, if any, limitation should be imposed,
and the potential impact on program administration at the State and
local level should the current limitation be increased or eliminated.
We also propose to clarify that in instances in which the State agency
requests that FNS recover any portion of its assigned caseload, no
limitation, should one be retained, will apply.
Allowable Uses of Administrative Funds and Other Funds, Section 247.25
Currently, under Sec. 247.11, State and local agencies may use
administrative funds only for costs identified by Federal regulations
or circulars as allowable, and determined by the State agency to be
necessary to carry out the program. Some examples of allowable costs in
CSFP are included, as well as a list of costs allowable only with prior
approval of FNS. Current regulations describe unallowable costs as
those costs ``not applicable to program objectives'' and include some
examples.
Currently, under Sec. 247.14, State and local agencies may use the
procurement and property management requirements established by their
State and local regulations in procuring equipment or services with
program funds, and utilizing and disposing of the equipment, provided
that they do not conflict with the requirements of applicable Federal
regulations.
Currently, Sec. 247.12 contains the requirements for the use of
program income, which is income directly generated from program
activities. Program income does not include income from the sale of
property. The State agency is currently required to use program income
to further program objectives.
We propose to include regulatory guidance on allowable uses of
administrative funds, program income, and funds recovered as a result
of claims actions, in this proposed Sec. 247.25. In paragraph (a), we
propose to state that administrative funds may be used for costs that
are necessary to ensure the efficient and effective administration of
the program, in accordance with 7 CFR part 3016 and 7 CFR part 3019. 7
CFR part 3016 contains the rules for management of Federal grants to
State, local, and Indian tribal governments, and incorporates the
provisions of OMB Circular A-87 (Cost Principles for State and Local
Governments) relating to allowable costs. 7 CFR part 3019 contains the
grants management rules for nonprofit organizations and incorporates
the provisions of OMB Circular A-122 relating to allowable costs. Since
a discussion of the principles that determine whether specific costs
are allowable is contained in the OMB circulars, we propose to include
reference to the circulars as well as the Federal regulations.
Reference to FMC 74-4 is removed, as this document has been superseded
by the regulations and the OMB circulars. We also propose to include,
in proposed Sec. 247.25(a), some examples of allowable costs,
including: Storing, transporting, and distributing foods, eligibility
determination, program outreach, nutrition education, audits and fair
hearings, monitoring and review of program operations, and
transportation of participants to and from the local agency, as
necessary. This list is meant only to be representative of allowable
costs in the program and is not meant to exclude other costs. If there
is a question as to whether a particular cost is allowable, State and
local agencies should refer to the above documents, or contact FNS.
In paragraph (b), we propose to include the examples of unallowable
costs currently included in the regulations and make clear that the
applicable Federal regulations must be referenced to determine if other
costs are allowable or not.
Currently, under Sec. 247.11(c), specific costs that require FNS
approval are listed. These include automatic data processing equipment
and system purchases, capital expenditures over $2,500, rental or lease
of facilities or equipment, and management studies performed by
agencies or organizations other than the State or local agencies.
However, the OMB Circulars referenced above, and parts 3016 and 3019 of
this title, which incorporated their provisions, do not currently
include rental or lease costs or management studies as costs requiring
prior FNS approval. The regulations also currently define equipment as
items with a cost of $5,000 or more per unit. Accordingly, we propose
to amend 7 CFR part 247 to conform with these revisions.
We propose to remove the current prior approval requirements for
rental or lease costs and the cost of management studies. In paragraph
(c) of this proposed Sec. 247.25, we propose to require prior approval
for capital expenditures, but to clarify that capital expenditures
include the acquisition of facilities or equipment, or enhancements to
such capital assets, with a cost per unit of at least $5,000. We also
propose to clarify that equipment includes automated information
systems, automated data processing equipment, and other computer
hardware and software, which are currently listed separately from
capital expenditures. Equipment costs per unit under $5,000 are
considered supplies, and not capital expenditures, and may be made
without prior FNS approval.
We propose to include the requirements for procuring property and
services with program funds, and utilizing and disposing of property,
in paragraph (d) of this proposed section, rather than in a separate
section, as at
[[Page 62179]]
present. The use of administrative funds to procure property or
services is an allowable cost (sometimes requiring FNS approval) and
thus is appropriate to include in this section. We propose to include
again the reference to 7 CFR parts 3016 and 3019, as these are the
current Federal regulations that apply to procurement of property and
services with program funds. As at present, State or local agencies may
follow procurement procedures established by State or local regulations
as long as these procedures do not conflict with Federal regulations.
Also, as at present, Federal regulations do not relieve State or local
agencies from responsibilities established in contracts relating to
procurement of property, equipment, or services.
In paragraph (e), we propose to include the current requirements
for the use of program income, rather than in a separate section. As at
present, State and local agencies must use program income--income
directly generated from program activities--for allowable program
costs, in accordance with 7 CFR part 3016. We propose to provide two
examples of program income: The sale of packing containers or pallets,
and the salvage of commodities. We also state, as in current
regulations, that program income does not include interest earned from
administrative funds.
In paragraph (f), we propose to address the use of funds recovered
as a result of claims against subdistributing and local agencies, and
against participants. Currently, the State agency must use funds
recovered through claims actions against subdistributing and local
agencies in accordance with the provisions of 7 CFR 250.15 and FNS
Instruction 410-1. We propose to incorporate this requirement in this
paragraph for the sake of clarity. We also propose to require that the
State agency use funds recovered as a result of claims against
participants for allowable program costs. We propose to allow the State
agency to authorize local agencies to utilize such funds for allowable
program costs incurred at the local level, rather than returning them
to the State. This authority is being proposed for State agencies
since, in some instances, these funds can be used more efficiently and
effectively at the local level.
Return of Administrative Funds, Section 247.26
Section 247.18 of the current regulations addresses closeout
procedures. Under current procedures, if a State agency does not use
all of the funds allocated to it for the fiscal year, FNS recovers the
unused funds at the end of the fiscal year. If, in the following fiscal
year, OMB reapportions the recovered funds, FNS reallocates them to all
State agencies. FNS reallocates to each State agency a share of the
total reapportioned funds that is proportionate to its share of the
total assigned caseload for the year in which the reallocation takes
place.
As discussed in detail above, the Farm Security and Rural
Investment Act of 2002 requires that the Department provide State
agencies with a grant per assigned caseload slot to pay administrative
costs. The law limits the amount of administrative funds provided State
agencies to the amount provided under the formula described in proposed
Sec. 247.22. Therefore, administrative funds recovered at the end of
the year and reapportioned by OMB will be used to support the program
by generating caseload and the administrative funding that must
accompany it. Such funds will not be reallocated to State agencies in
the form of administrative funds in addition to the mandated grant per
slot. We propose to include a description of this process in this
proposed section 247.26.
Financial Management, Section 247.27
Currently, under Sec. 247.9, State and local agencies must
establish a financial management system that provides an accurate,
current, and complete disclosure of the financial status of the
program. Among the various aspects of the program's financial status,
the State agency's system must include:
(1) An accounting of all property and other assets procured with
program funds.
(2) An accounting of all program funds received and expended each
fiscal year.
(3) The accurate completion of required reports, and the
maintenance of records identifying the source and use of administrative
funds and program income (currently required under Sec. 247.12).
(4) Prompt resolution of audits and claims.
(5) Prompt disbursement of funds for program costs.
(6) Assurance that local agencies will develop and implement a
financial management system that allows them to meet Federal
requirements.
We propose to include financial management requirements for State
and local agencies in this proposed Sec. 247.27. In paragraph (a), we
propose to state that State and local public agencies must establish a
financial management system in accordance with the provisions of 7 CFR
part 3016, and that nonprofit organizations must follow financial
management requirements contained under 7 CFR part 3019. We also
propose to include the current statement that the State agency's
financial management system must provide accurate, current, and
complete disclosure of the financial status of the program, including
an accounting of all program funds received and expended each fiscal
year. We also propose to include the current requirement that the State
agency must ensure that local agencies develop and implement a
financial management system that allows them to meet Federal
requirements.
In paragraph (b), we propose to include some of the important
components of the State agency's financial management system, which are
treated in more detail in 7 CFR part 3016. These include:
(1) Prompt and accurate payment of allowable costs.
(2) Timely disbursement of funds to local agencies.
(3) Timely and appropriate resolution of claims and audit findings.
(4) Maintenance of records identifying the receipt and use of
administrative funds, funds recovered as a result of claims actions,
property and other assets procured with program funds, and the
generation and use of program income (as defined under the proposed
Sec. 247.25(e)).
Storage and Inventory of Commodities, Section 247.28
Currently, under Sec. 247.4, the State agency is required to
protect commodities from theft, spoilage, damage or destruction, or
other loss. Other requirements relating to the storage of commodities
are contained in 7 CFR 250.14, and pertain also to CSFP. Currently,
under Sec. 247.13(c), a physical inventory of all foods at each
storage and distribution site is required on an annual basis. We
propose to include, in this proposed Sec. 247.28, the current
requirements for storage and inventory of commodities, with only minor
changes.
Under paragraph (a), we propose to include the current requirement
that State and local agencies must provide for storage of commodities
to ensure their protection from theft, spoilage, damage or destruction,
or other loss. We propose to state specifically that State and local
agencies may contract with commercial facilities to store and
distribute commodities, which is presently contained under Sec. 250.14
of this chapter. We also propose to indicate that the required
standards for warehousing and distribution systems,
[[Page 62180]]
and for contracts with storage facilities, are contained under Sec.
250.14 of this chapter.
Under paragraph (b) of this proposed section, we propose to include
the current requirement that a physical inventory of all USDA
commodities be conducted annually at each State and local agency
storage and distribution site where these commodities are stored. We
also propose to include the current requirement under 7 CFR 250.14 that
results of the physical inventory be reconciled with inventory records
and maintained on file by the State or local agency.
Reports and Recordkeeping, Section 247.29
Currently, under Sec. Sec. 247.9 and 247.13, State and local
agencies are required to maintain records to demonstrate that the
receipt, disposal, and inventory of commodities, and the use of
administrative funds, are in accordance with program regulations.
Records must also indicate the results of any claims brought by the
State agency. Also, under current Sec. Sec. 247.7 and 247.20, State
and local agencies are required to maintain records relating to
applicant eligibility and fair hearings. Additionally, under 7 CFR
250.16(a)(5), State and local agencies must maintain records related to
the determination of participant eligibility for receipt of foods.
Currently, under Sec. Sec. 247.13 and 247.18, the State agency
must report financial data on Form SF-269, on a quarterly basis, and
must submit a closeout report, using this form, within 90 days of the
end of the fiscal year. The State agency must submit data on the
receipt, disposal, and inventory of commodities on a monthly basis,
utilizing Form FNS-153, Monthly Report of the Commodity Supplemental
Food Program. Each local agency must submit data on racial/ethnic
participation on an annual basis, utilizing Form FNS-191, Racial/Ethnic
Group Participation.
We propose to include the reporting and recordkeeping requirements
in this proposed Sec. 247.29. In paragraph (a), we propose to
consolidate recordkeeping requirements from this part and from 7 CFR
part 250 without substantial change. However, in the interest of
clarity, we propose to be more specific in referring to some of the
areas for which records must be maintained. We propose to require State
and local agencies to maintain accurate and complete records relating
to the receipt, disposal, and inventory of commodities, the receipt and
disbursement of administrative funds and other funds, eligibility
determinations, fair hearings, and other program activities. We propose
to retain the present language that State and local agencies must also
maintain records pertaining to liability for any improper distribution,
use of, loss of, or damage to commodities, and the results obtained
from the pursuit of claims arising in favor of the State or local
agency. At present, all records must be retained for a period of three
years from the end of the fiscal year to which they pertain, or, if
they are related to unresolved claims actions, audits, or
investigations, until those activities have been resolved. Also, all
records must be available during normal business hours for use in
management reviews, audits, or investigations, except medical case
records of participants (unless they are the only source of
certification data). We propose to remove current language under Sec.
247.13 that all reports must be traceable to their source
documentation. While it is true that the data in reports must coincide
with source data, we do not believe that it is necessary to state this
in the regulations. We also propose to remove the language indicating
that FNS will use reports in evaluating the program performance of
State and local agencies, which need not be stated in the regulations.
In paragraph (b) of this proposed section, we propose to include
the reporting requirements. Currently, under 7 CFR 250.17(a), the FNS-
153 is required to be submitted monthly, but FNS may require less
frequent submission, or submission in another format, if this is
determined to be sufficient to meet program needs. This allows FNS to
reduce the reporting requirement in the future without regulatory
action. For the sake of clarity, we propose to incorporate this
language into this section. We also propose to include the major data
elements that are reported on the FNS-153: The number of program
participants in each population category; the distribution and receipt
of commodities; beginning and ending inventories; and quarterly use of
administrative funds. A number of years ago, a policy change moved the
quarterly reporting of administrative funds use to the FNS-153 from the
previous quarterly submission of the SF-269.
Although the CSFP regulations currently reference the SF-269,
Financial Status Report, that reference is imprecise because the
underlying Departmental regulations at 7 CFR part 3016 recognize two
variations of this form: The SF-269 (Long Form) and the SF-269A (Short
Form). OMB Circular A-102 and 7 CFR part 3016 require Federal grant-
making agencies to require one or the other of these forms for use by
their grantees in reporting the status of funds for non-construction
programs. We have required the SF-269A for this purpose because this
form is more appropriate for programs that do not have matching
requirements or other complicating transactions. Therefore, we propose
to clarify in this regulation the existing requirement for State
agencies to use the SF-269A in reporting end-of-year financial data.
Since use of administrative funds is reported quarterly on the FNS-153,
we propose, in this new section, to formally require the SF-269A to be
submitted only at the end of the fiscal year, as the closeout report.
For the same reason, we propose to remove the current requirement,
under Sec. 247.18(a), that the State agency submit a preliminary
financial report within 30 days of the end of the fiscal year. We also
propose to remove the current language that refers to submittal of Form
FNS-155. This form, which also reports data on commodity inventories,
is not required for CSFP, and was included in this part in error.
Currently, under Sec. 247.23(b), FNS may require that State and
local agencies provide data collected in the program to aid in the
evaluation of the effect of program benefits on the low-income
populations served. Such data requests must not include information on
particular individuals. We propose to include this requirement, without
change, in paragraph (c) of this proposed Sec. 247.29.
Claims, Section 247.30
Currently, under Sec. 247.17, FNS must pursue a claim against the
State agency if it determines that the State or local agency has
misused program funds through negligence, fraud, theft, embezzlement,
or other causes. The State agency must repay to FNS the full value of
the misused funds. Currently, the requirements for pursuit of claims
for the loss, or improper distribution, of commodities are contained
under 7 CFR 250.15(c). FNS may initiate and pursue a claim against the
State agency for commodities improperly distributed, or lost, stolen,
spoiled or damaged as a result of improper care, storage, or handling.
The State agency has the option of replacing the misused commodities
with like foods. The State agency is responsible for initiating and
pursuing claims against local agencies, subdistributing agencies, or
other agencies or organizations for such losses.
We propose to include the basic requirements for the initiation and
pursuit of claims for the misuse of
[[Page 62181]]
program funds and commodities in this proposed Sec. 247.30, without
substantial change from current requirements. We propose to address
actions in response to misuse of funds in paragraph (a), and to address
actions in response to the loss of commodities in paragraph (b). We
propose to include in the regulations reference to 7 CFR 250.15(c) for
procedural requirements relative to claims.
Under 7 CFR 250.15, State agencies are required to pursue claims
for improper distribution or loss of commodities. However, specific
criteria relative to the establishment and pursuit of claims against
CSFP participants are not currently addressed in 7 CFR parts 247 or
250. We propose to establish such criteria in paragraph (c) of this
proposed section. The WIC Program, under 7 CFR 246.23(c), requires that
a State agency initiate a claim to recover the value of benefits
improperly obtained or disposed of as the result of a participant
violation. We propose to include a similar requirement, but to tie the
initiation and pursuit of claims to those cases involving fraud, as
defined in these regulations. As under the proposed Sec. 247.20, we
propose to consider the selling of CSFP commodities, or their exchange
for non-food items, as fraud, in addition to intentional false or
misleading statements or the withholding of information by the
participant, or the parent or caretaker. The State or local agency must
also disqualify the participant from CSFP, unless the local agency
determines that disqualification would result in a serious health risk,
in accordance with the requirements of proposed Sec. 247.20(b). The
State or local agency must advise the participant of the opportunity to
appeal the claim through the fair hearing process, in accordance with
proposed Sec. 247.33(a).
In paragraph (d) of this proposed section, we propose to address
the procedures that State and local agencies must follow in pursuing
claims against participants. We propose to include the following
requirements, which correspond to similar requirements in the WIC
regulations:
(1) The State agency must establish standards, based on a cost-
benefit review, for determining when the pursuit of a claim is cost-
effective, and must ensure that local agencies use these standards in
determining if a claim is to be pursued.
(2) The local agency must issue a letter demanding repayment for
the value of the commodities improperly received or used.
(3) If repayment is not made in a timely manner, the local agency
must take additional collection actions that are cost-effective, in
accordance with the standards established by the State agency.
(4) The local agency must maintain all records regarding claims
actions taken against participants, in accordance with proposed Sec.
247.29.
We believe that inclusion of these criteria would prove an
effective deterrent, and would help to ensure that more program
resources will be available to those who really need the assistance.
These benefits would outweigh the small extra burden placed on State
and local agencies in initiating and pursuing claims. State and local
agencies would be able to exercise their judgment in determining if the
actions necessary to recover the value of improperly obtained benefits
are cost-effective, in accordance with the State-established standards.
Audits and Investigations, Section 247.31
Currently, requirements for Federal and State-sponsored audits are
contained under Sec. 247.15. Under Sec. 247.16, the Department is
authorized to conduct investigations of any allegation that the State
or local agency has not complied with Federal regulations. We propose
to address audit requirements and the Department's authority to conduct
investigations in this proposed Sec. 247.31. Legislation, and
subsequent regulatory action by the Department, have modified
requirements for State-sponsored audits somewhat, and this proposed
section contains the amended requirements. All changes to current
provisions described here merely reflect current audit requirements
contained in 7 CFR part 3052, which contains the audit requirements for
State and local governments and for nonprofit organizations.
The Single Audit Act of 1984 (31 U.S.C. 7501 et seq.), and the
Single Audit Act Amendments of 1996 (Pub. L. 104-156), amended Federal
requirements for State-sponsored audits of agencies operating Federal
programs. The OMB implemented the laws by publishing OMB Circular A-
133, on June 30, 1997, and the Department implemented the provisions of
the law and circular by publishing regulations under 7 CFR part 3052 on
August 29, 1997. OMB Circular A-128 was repealed, while OMB Circular A-
102 now addresses only Federal agency audits.
The audit requirements were amended to increase the dollar
threshold that determines when an audit is required from $25,000 to
$300,000. Thus, Federal regulations do not require State and local
governments or nonprofit organizations which expend less than $300,000
in Federal awards in any fiscal year to have an audit for that year.
This allows limited resources for audits to be used more efficiently.
However, the new audit requirements require State and local agencies to
have an audit conducted for each fiscal year in which they expend at
least $300,000 in Federal awards, as detailed in 7 CFR part 3052. Thus,
fewer agencies are now required to conduct audits; however, for those
agencies that are required to conduct them, the requirement is now
annual, instead of the two-year audit cycles previously required. As
before, not all of the programs administered by an agency must be
included in the audit, if the agency chooses to conduct a single, and
not a program-specific, audit. The new audit requirements also modified
the way in which auditors select which of the agency's programs are to
be included in a single audit.
In paragraph (a) of this proposed Sec. 247.31, we propose to
describe the purpose of an audit, as currently described under Sec.
247.15(d). In paragraph (b), we propose to clarify that the Department
may conduct an audit of the program at the State or local agency level
at its discretion, and may conduct an investigation of an allegation
that the State or local agency has not complied with program
requirements.
In paragraph (c), we propose to include the following current
responsibilities of the State agency in responding to a Departmental
audit:
(1) The State agency must provide access to records or documents
compiled by State or local agencies or contractors.
(2) The State agency must submit a corrective action plan, with
time frames for implementation and completion of corrective actions,
and must take additional actions, if determined necessary by the
Department.
In paragraph (d), we propose to include the current requirements
under 7 CFR part 3052, as described above, that determine when a State
and local agency audit is required. We propose to clarify that the
value of CSFP commodities distributed by the agency or organization
must be considered as part of the Federal award, in determining if an
audit is required.
In paragraph (e) of this proposed Sec. 247.31, we propose to note
that State and local agency audits must be conducted in accordance with
the requirements of 7 CFR part 3052. We also propose to include current
requirements that State and local
[[Page 62182]]
agencies are responsible for follow-up and corrective actions in
response to audit findings. Lastly, we propose to include that the
State agency must ensure that local agencies meet audit requirements,
and must ensure that all State or local agency audit reports are
available for FNS review.
Termination of Agency Participation, Section 247.32
Currently, under Sec. 247.18, FNS may terminate a State agency's
participation in CSFP, in whole or in part, if the State agency does
not comply with program requirements. The State agency must terminate a
local agency's program, in whole or in part, if the State agency or FNS
determines that the local agency has not complied with program
requirements. Termination of a program must be effected by written
notification, including the reasons and effective date. The State
agency must provide the local agency with an opportunity to appeal the
action. The State or local agency may also terminate its program, in
whole or in part, by written notification to the administering agency
(FNS or the State agency, as applicable), stating the reasons and
effective date. Finally, program participation may also be terminated,
in whole or in part, upon the agreement of both parties. The specific
actions and procedures in program termination are more fully described
in 7 CFR part 3016.
In paragraph (a) of this proposed Sec. 247.32, we propose to
describe when a State agency's program participation may be terminated,
in whole or in part, without change to current requirements. However,
for clarification, we propose to include the reference that 7 CFR part
3016 contains the specific actions and procedures relative to program
termination. We propose to remove the description of specific
procedures relating to the return and recovery of funds currently
included under Sec. 247.18, as these procedures are included in 7 CFR
part 3016. We also propose to include a reference to the requirement,
in the proposed Sec. 247.4(b), that either party to the program
agreement provide 30 days' written notice of termination of the
agreement.
In paragraph (b), we propose to describe when a local agency's
program participation may be terminated, in whole or in part. In
accordance with the language contained in 7 CFR part 3016, we propose
to state that the State agency may terminate a local agency's
participation, or may be required to terminate the local agency's
participation, in whole or in part, if the local agency does not comply
with program requirements. This would allow the State agency to take
less drastic actions than termination, whether complete or partial, in
response to less serious violations. It also preserves the right of
FNS, as the awarding agency, to require termination if the State agency
does not take the action. We also propose to clarify in this paragraph
that termination requires 30 days' written notification, in accordance
with the agreements signed to operate the program.
Fair Hearing Procedures, Section 247.33
Currently, under Sec. 247.20, the State agency must establish a
fair hearing process to allow individuals to appeal the denial or
discontinuance of CSFP benefits, or disqualification from CSFP. The
specific procedures that the State agency is required to include in
this process are also described in this section. We propose to include
the fair hearing requirements in this proposed Sec. 247.33, with a
clearer explanation of the nature and purpose of a fair hearing, and
the procedures that State and local agencies must follow in providing
individuals with an opportunity to request a hearing, and in conducting
the hearing. Additionally, in paragraph (a) of this proposed section,
we propose to include the appeal of a claim brought against a
participant as one of the adverse actions for which a fair hearing may
be requested.
In paragraph (f) of this proposed section, we include the current
provision that a participant who appeals the discontinuance of benefits
within the 15-day advance notification period required under
Sec. Sec. n 247.17 and 247.20 must be permitted to continue to receive
benefits until a decision on the appeal is made (unless the
certification period ends before the decision is made). However, we
propose to include that, if the hearing decision finds that a
participant received program benefits fraudulently, the local agency
must include the value of benefits received for the period of time that
the hearing was pending, as well as for any previous period, in its
initiation and pursuit of a claim against the participant.
Management Reviews, Section 247.34
Currently, under Sec. 247.21, FNS and the State agency must
establish a management evaluation system to assess the accomplishment
of program objectives and compliance with program regulations. Specific
responsibilities of FNS and the State agency are outlined. Currently,
as part of its management review, the State agency must conduct annual
reviews of local agencies that include a review of all aspects of
program administration. More frequent reviews may be conducted if the
State agency determines that this is necessary. The evaluation must
include on-site reviews, including reviews of storage facilities. The
State agency must then identify problem areas and follow up to ensure
that all problems are corrected.
We propose to include the management review requirements for State
agencies in this proposed Sec. 247.34, but to remove the FNS
requirements. While FNS will continue its role in program oversight,
these regulations should address only requirements for State and local
agencies in monitoring the program. In paragraph (a), we propose to
clarify that State agencies must establish a management review system
to ensure that local agencies, subdistributing agencies, and other
agencies conducting program activities meet program requirements and
objectives. As part of the system, the State agency must perform on-
site reviews of local agencies that include an evaluation of all
aspects of program administration, and must also review program
reports, including financial and inventory reports, food orders, and
audits, on an ongoing basis. As at present, on-site reviews must
include a review of all storage facilities. However, to reduce the
burden on State agencies in conducting reviews, we propose to require
that the State agency perform on-site reviews of local agencies and
storage facilities at least once every two years, instead of annually.
We believe that, in most cases, effective communication and review of
reports, in conjunction with the less frequent on-site reviews, will be
sufficient to ensure the effective and efficient operation of the
program at the local level.
In paragraph (b), we propose to clearly state what the State agency
must do if it finds that a local agency or subdistributing agency is
deficient in any aspect of program administration. As at present, the
State agency must record all deficiencies identified during the review,
and ensure that the deficiencies are corrected within a reasonable
period of time. Currently, the State agency must also require local
agencies to establish review procedures for their programs irrespective
of their program success or efficiency. We propose to state instead
that, to ensure improved efficiency in program operations for the
future, the State agency may require that local agencies adopt specific
review procedures for their programs.
[[Page 62183]]
Local Agency Appeals of State Agency Actions, Section 247.35
Currently, under Sec. 247.22, the State agency must establish a
hearing procedure to allow local agencies to appeal any State agency
decision that adversely affects a local agency's program participation.
Such adverse action may include a denial or termination of
participation, or a claim against the local agency. We propose to
include this requirement in this proposed Sec. 247.35 without
substantial change. As at present, the State agency must include
specific procedures to allow the local agency to make an adequate
presentation of its case at the hearing. The hearing decision must be
made by an impartial person, and must be based solely on the evidence
presented at the hearing and on program legislation and regulations. We
propose only to revise the format to include three separate paragraphs
in this new section, and to reduce the detail in current regulatory
language to improve clarity.
Confidentiality of Applicants or Participants, Section 247.36
Currently, under Sec. 247.23(c), State and local agencies must
restrict the use or disclosure of information provided by program
applicants or participants to only those persons directly connected
with the administration or enforcement of the program. We propose to
include the requirements for protection of confidentiality of program
applicants or participants in this proposed Sec. 247.36. In paragraph
(a), we propose to clarify that the disclosure of information to
persons connected to the enforcement of the program includes those
persons investigating or prosecuting program violations. This includes
State or local agency WIC administrators investigating dual
participation in CSFP and WIC. We also propose to allow the State or
local agency to exchange information related to the determination of an
individual's eligibility for other health or welfare programs, or for
program outreach, with the participant's consent. Before doing this,
however, the State agency must sign an agreement with the administering
agencies for those programs to ensure that the information will be used
only for the specified purposes, and that agencies receiving the
information will not further share it. This exchange of information is
currently allowed in the WIC program, and allows WIC agencies to
provide information necessary for CSFP and other agencies to
effectively outreach to, and enroll, eligible individuals. It is
important that CSFP regulations also allow this sharing of information
to ensure that CSFP agencies may similarly assist WIC agencies.
Currently, under Sec. 247.16(b), the State agency must protect the
confidentiality, and other rights in the program, of any person making
allegations or complaints against any participant or program official,
except as necessary to conduct an investigation, hearing, or judicial
proceeding. We propose to include this requirement in paragraph (b) of
this proposed section, as it relates to the protection of the
confidentiality of program applicants or participants.
Civil Rights Requirements, Section 247.37
Currently, under Sec. 247.19, the State agency must comply with
the requirements of Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.), FNS Civil Rights Instruction 113-2, and the
Department's regulations (7 CFR Part 15) regarding nondiscrimination.
We propose to include civil rights requirements under this proposed
Sec. 247.37, and to add references to the more recent legislation
relating to nondiscrimination, including Title IX of the Education
Amendments of 1972 (20 U.S.C. 1681 et seq.), Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 790 et seq.), the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and Titles II and
III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.). In accordance with the legislation, we also propose to amend the
current regulatory language to state that no person shall, on the
grounds of race, color, national origin, age, sex, or disability, be
subjected to discrimination under the program. We also propose to
include in this proposed section the current instructions under Sec.
247.19 for the filing of a complaint of discrimination.
We propose to delete the current Sec. 247.23(d), which indicates
how interested persons may acquire program information and includes a
list of the addresses of all FNS Regional Offices. We believe that
program materials provided by State and local agencies and information
on the FNS Web site at http://www.fns.usda.gov/fns are readily
accessible sources of program contacts and information, and may also be
more easily revised in the event any changes are made regarding this
information.
List of Subjects in 7 CFR Part 247
Agricultural commodities, Food assistance programs, Infants and
children, Maternal and child health, Public assistance programs,
nutrition, women, aged.
Accordingly, 7 CFR part 247 is proposed to be revised to read as
follows:
PART 247--COMMODITY SUPPLEMENTAL FOOD PROGRAM
Sec.
247.1 Definitions.
247.2 The purpose and scope of CSFP.
247.3 Administering agencies.
247.4 Agreements.
247.5 State and local agency responsibilities.
247.6 State Plan.
247.7 Selection of local agencies.
247.8 Individuals applying to participate in CSFP.
247.9 Eligibility requirements.
247.10 Distribution and use of CSFP commodities.
247.11 Applicants exceed caseload levels.
247.12 Rights and responsibilities.
247.13 Provisions for non-English or limited English speakers.
247.14 Other public assistance programs.
247.15 Notification of eligibility or ineligibility of applicant.
247.16 Certification period.
247.17 Notification of discontinuance of participant.
247.18 Nutrition education.
247.19 Dual participation.
247.20 Program violations.
247.21 Caseload assignment.
247.22 Allocation and disbursement of administrative funds to State
agencies.
247.23 State provision of administrative funds to local agencies.
247.24 Recovery and redistribution of caseload and administrative
funds.
247.25 Allowable uses of administrative funds and other funds.
247.26 Return of administrative funds.
247.27 Financial management.
247.28 Storage and inventory of commodities.
247.29 Reports and recordkeeping.
247.30 Claims.
247.31 Audits and investigations.
247.32 Termination of agency participation.
247.33 Fair hearings.
247.34 Management reviews.
247.35 Local agency appeals of State agency actions.
247.36 Confidentiality of applicants or participants.
247.37 Civil rights requirements.
Authority: Sec. 5, Pub. L. 93-86, 87 Stat. 249, as added by Sec.
1304(b)(2), Pub. L. 95-113, 91 Stat. 980 (7 U.S.C. 612c note); sec.
1335, Pub. L. 97-98, 95 Stat. 1293 (7 U.S.C. 612c note); sec. 209,
Pub. L. 98-8, 97 Stat. 35 (7 U.S.C. 612c note); sec. 2(8), Pub. L.
98-92, 97 Stat. 611 (7 U.S.C. 612c note); sec. 1562, Pub. L. 99-198,
99 Stat. 1590 (7 U.S.C. 612c note); sec. 101(k), Pub. L. 100-202;
sec. 1771(a), Pub. L 101-624, 101 Stat. 3806 (7 U.S.C. 612c note);
sec. 402(a), Pub. L. 104-127, 110 Stat. 1028 (7 U.S.C. 612c note).
Sec. 247.1 Definitions.
Following is a list of definitions that apply to the Commodity
Supplemental Food Program (CSFP).
[[Page 62184]]
Breastfeeding women means women up to one year postpartum who are
breastfeeding their infants.
Caseload means the number of persons the State agency may serve on
an average monthly basis over the course of the caseload cycle.
Caseload cycle means the period from January 1 through the
following December 31.
Certification means the use of procedures to determine an
applicant's eligibility for the program.
Certification period means the period of time that a participant
may continue to receive program benefits without a review of his or her
eligibility.
Children means persons who are at least one year of age but have
not reached their sixth birthday.
Commodities means nutritious foods purchased by USDA to supplement
the diets of CSFP participants.
CSFP means the Commodity Supplemental Food Program.
Department means the U.S. Department of Agriculture.
Dual participation means simultaneous participation by an
individual in CSFP and the WIC Program, or in CSFP at more than one
distribution site.
Elderly persons means persons at least 60 years of age.
Fiscal year means the period from October 1 through the following
September 30.
FNS means the Food and Nutrition Service.
Infants means persons under one year of age.
Local agency means a public or private nonprofit agency, including
an Indian tribal organization, which enters into an agreement with the
State agency to administer CSFP at the local level.
Nonprofit agency means a private agency or organization with tax-
exempt status under the Internal Revenue Code, or that has applied for
tax-exempt status with the Internal Revenue Service.
Postpartum women means women up to one year after termination of
pregnancy.
7 CFR part 250 means the Department's regulations pertaining to the
donation of foods for use in USDA food distribution programs.
7 CFR part 3016 means the Department's regulations pertaining to
administrative requirements for grants and cooperative agreements with
State, local, and Indian tribal governments.
7 CFR part 3019 means the Department's regulations pertaining to
administrative requirements for grants and cooperative agreements with
nonprofit organizations.
7 CFR part 3052 means the Department's regulations pertaining to
audits of States, local governments, and nonprofit organizations.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Trust Territory of the Pacific Islands, and the Northern Mariana
Islands.
State agency means the agency designated by the State to administer
CSFP at the State level; an Indian tribe or tribal organization
recognized by the Department of the Interior that administers the
program for a specified tribe or tribes; or, the appropriate area
office of the Indian Health Service of the Department of Health and
Human Services.
State Plan means the document that describes the manner in which
the State agency intends to administer the program in the State.
Subdistributing agency means an agency or organization that has
entered into an agreement with the State agency to perform functions
normally performed by the State, such as entering into agreements with
eligible recipient agencies under which commodities are made available,
ordering commodities and/or making arrangements for the storage and
delivery of such commodities on behalf of eligible recipient agencies.
WIC Program means the Special Supplemental Nutrition Program for
Women, Infants, and Children.
Sec. 247.2 The purpose and scope of CSFP.
(a) How does CSFP help participants? Through CSFP, the Department
provides nutritious commodities to help State and local agencies meet
the nutritional needs of low-income pregnant, postpartum, and
breastfeeding women, infants, children ages 1 through 5, and elderly
persons. Through local agencies, each participant receives a monthly
package of commodities, based on food package guide rates developed by
FNS, with input from State and local agencies. Food packages include
such nutritious foods as infant formula and cereal, juices, canned
fruits and vegetables, canned meat or poultry and other protein items,
and grain products such as pasta, as well as other foods. Participants
also receive nutrition education.
(b) How many persons may be served in CSFP? State agencies may
serve eligible persons up to the caseload limit assigned to them by
FNS. Caseload is the number of persons that may be served on an average
monthly basis over the course of the caseload cycle, which extends from
January 1 through the following December 31.
Sec. 247.3 Administering agencies.
(a) What agencies are responsible for administering CSFP? CSFP is
administered at the Federal level by the Department's Food and
Nutrition Service (FNS), which provides commodities, assigns caseload,
and allocates administrative funds to State agencies. State agencies
are responsible for administering the program at the State level. The
State agency may select local agencies to administer the program in
local areas of the State. The State agency must provide guidance to
local agencies on all aspects of program operations. The State agency
may also select subdistributing agencies (e.g., another State agency, a
local governmental agency, or a nonprofit organization) to distribute
or store commodities, or to perform other program functions on behalf
of the State agency. Local or subdistributing agencies may also select
other agencies to perform specific program functions (e.g., food
distribution or storage), with the State agency's approval. Although
the State agency may select other organizations to perform specific
activities, the State agency is ultimately responsible for all aspects
of program administration.
(b) Are there specific functions that the State agency cannot
delegate to another agency?
Yes. The State agency may not delegate the performance of the
following functions to another agency:
(1) Establishing eligibility requirements, in accordance with the
options provided to the State agency under Sec. 247.9.
(2) Establishing a management review system and conducting reviews
of local agencies, in accordance with Sec. 247.34.
(c) What Federal requirements must State, subdistributing, and
local agencies follow in administering CSFP? State, subdistributing,
and local agencies must administer the program in accordance with the
provisions of this part, and with the provisions contained in part 250
of this chapter, unless they are inconsistent with the provisions of
this part.
Sec. 247.4 Agreements.
(a) What agreements are necessary for agencies to administer CSFP?
The following agreements are necessary for agencies to administer CSFP:
(1) Agreements between FNS and State agencies. Each State agency
must enter into an agreement with FNS (Form FNS-74, the Federal-State
Agreement) prior to receiving commodities or administrative funds.
(2) Agreements between State agencies and local or subdistributing
[[Page 62185]]
agencies. The State agency must enter into written agreements with
local or subdistributing agencies prior to making commodities or
administrative funds available to them. The agreements must contain the
information specified in paragraph (b) of this section. Agreements
between State and local agencies must also contain the information
specified in paragraph (c) of this section. Copies of all agreements
must be kept on file by the parties to the agreements.
(3) Agreements between local and subdistributing agencies and other
agencies. The State agency must ensure that local and subdistributing
agencies enter into written agreements with other agencies prior to
making commodities or administrative funds available to these other
agencies. The agreements must contain the information specified in
paragraph (b) of this section. Copies of all agreements must be kept on
file by the parties to the agreements.
(b) What are the required contents of agreements? All agreements
described under paragraphs (a)(2) and (a)(3) of this section must
contain the following:
(1) An assurance that each agency will administer the program in
accordance with the provisions of this part and with the provisions of
part 250 of this chapter, unless they are inconsistent with the
provisions of this part.
(2) An assurance that each agency will maintain accurate and
complete records for a period of three years from the close of the
fiscal year to which they pertain, or longer if the records are related
to unresolved claims actions, audits, or investigations.
(3) A statement that each agency receiving commodities for
distribution is responsible for any loss resulting from improper
distribution, or improper storage, care, or handling of commodities.
(4) A statement that each agency receiving program funds is
responsible for any misuse of program funds.
(5) A description of the specific functions that the State,
subdistributing, or local agency is delegating to another agency.
(6) A statement that the agreement may be terminated by either
party upon 30 days' written notice.
(c) What other assurances or information must be included in
agreements between State and local agencies? In addition to the
requirements under paragraph (b) of this section, agreements between
State and local agencies must contain the following:
(1) An assurance that the local agency will provide, or cause to be
provided, nutrition education to participants, as required in Sec.
247.18.
(2) An assurance that the local agency will provide information to
participants on other health, nutrition, and public assistance
programs, and make referrals as appropriate, as required in Sec.
247.14.
(3) An assurance that the local agency will distribute commodities
in accordance with the approved food package guide rate.
(4) An assurance that the local agency will take steps to prevent
and detect dual participation, as required in Sec. 247.19.
(5) The names and addresses of all certification, distribution, and
storage sites under the jurisdiction of the local agency.
(d) What is the duration of required agreements? All agreements
between FNS and State agencies are considered permanent, but may be
amended at the initiation of State agencies or at the request of FNS.
All amendments must be approved by FNS. The State agency establishes
the duration of agreements it signs with local agencies or
subdistributing agencies. The State agency may establish, or permit the
local or subdistributing agency to establish, the duration of
agreements between local or subdistributing agencies and other
agencies.
Sec. 247.5 State and local agency responsibilities.
State and local agencies are responsible for administering the
program in accordance with the provisions of this part, and with the
provisions of part 250 of this chapter, as applicable. Although the
State agency may delegate specific responsibilities to another agency,
the State agency is ultimately responsible for all aspects of program
administration. Following is an outline of the major responsibilities
of State and local agencies; it is not intended to be all-inclusive.
(a) What are the major responsibilities shared by State and local
agencies? The major responsibilities shared by State and local agencies
include:
(1) Entering into required agreements.
(2) Ordering commodities for distribution.
(3) Storing and distributing commodities.
(4) Establishing procedures for resolving complaints about
commodities.
(5) Complying with civil rights requirements.
(6) Maintaining accurate and complete records.
(7) Conducting program outreach.
(b) What are the major State agency responsibilities? The major
responsibilities of State agencies include:
(1) Completing and submitting the State Plan.
(2) Selecting local agencies to administer the program in local
areas of the State.
(3) Determining caseload needs, and submitting caseload requests to
FNS.
(4) Assigning caseload, and allocating administrative funds, to
local agencies.
(5) Establishing eligibility requirements, in accordance with the
options provided to the State agency under Sec. 247.9. (This function
may not be delegated to another agency.)
(6) Establishing nutritional risk criteria and a residency
requirement for participants, if such criteria are to be used.
(7) Establishing a financial management system that effectively
accounts for funds received for program administration.
(8) Developing a plan for the detection and prevention of dual
participation, in coordination with CSFP local agencies and with the
State WIC agency.
(9) Developing a plan for providing nutrition education to
participants.
(10) Establishing appeals and fair hearing procedures for local
agencies and program participants.
(11) Developing a management review system and conducting reviews
of local agencies. (This function may not be delegated to another
agency.)
(12) Determining and pursuing claims, and establishing standards
for pursuit of claims against participants.
(13) Ensuring compliance with Federal audit requirements.
(14) Providing guidance to local agencies, as needed.
(c) What are the major local agency responsibilities? The major
local agency responsibilities include:
(1) Determining eligibility of applicants in accordance with
eligibility criteria established by the State agency.
(2) Complying with fiscal and operational requirements established
by the State agency.
(3) Ensuring that participation does not exceed the caseload
assigned by the State agency.
(4) Issuing foods to participants in accordance with the
established food package guide rates.
(5) Providing nutrition education and information on the
availability of other nutrition and health assistance programs to
participants.
(6) Informing applicants of their rights and responsibilities in
the program.
(7) Meeting the special needs of the homebound elderly, to the
extent possible.
(8) Pursuing claims against participants.
[[Page 62186]]
Sec. 247.6 State Plan.
(a) What is the State Plan? The State Plan is a document that
describes how the State agency will operate CSFP and the caseload
needed to serve eligible applicants. The State agency must submit the
State Plan to FNS for approval. Once submitted and approved, the State
Plan is considered permanent, with amendments submitted at the State
agency's initiative, or at FNS request. All amendments are subject to
FNS approval. The State Plan may be submitted in the format provided in
FNS guidance, in an alternate format, or in combination with other
documents required by Federal regulations. The State agency is
encouraged to collaborate with the State WIC agency in developing the
State Plan, for example, in developing plans for serving women,
infants, and children, program outreach, and nutrition education.
(Collaboration with the State WIC agency is required in preventing and
detecting dual participation.) The State Plan must be signed by the
State agency official responsible for program administration. A copy of
the State Plan must be kept on file at the State agency for public
inspection.
(b) When must the State Plan be submitted? The State Plan must be
submitted by August 15 to take effect for the fiscal year beginning in
the following October. FNS will provide notification of the approval or
disapproval of the State Plan within 30 days of receipt, and will
notify the State agency within 15 days of receipt if additional
information is needed. Disapproval of the Plan will include a reason
for the disapproval. Approval of the Plan is a prerequisite to the
assignment of caseload and allocation of administrative funds, but does
not ensure that caseload and funds will be provided.
(c) What must be included in the State Plan? The State Plan must
include:
(1) The names and addresses of all local agencies and
subdistributing agencies with which the State agency has entered into
agreement.
(2) The income eligibility standards to be used for women, infants,
and children, and the options to be used relating to income or other
eligibility requirements, as provided under Sec. 247.9.
(3) The nutritional risk criteria to be used, if the State chooses
to establish such criteria.
(4) A description of plans for serving women, infants, children,
and elderly participants and the caseload needed to serve them.
(5) A description of plans for conducting outreach to women,
infants, children, and the elderly.
(6) A description of the system for storing and distributing
commodities.
(7) A description of plans for providing nutrition education to
participants.
(8) A description of the means by which the State agency will
detect and prevent dual participation, including collaboration with the
State WIC agency, and a copy of the agreement signed with the State WIC
agency to accomplish this.
(9) A description of the standards the State agency will use in
determining if the pursuit of a claim against a participant is cost-
effective.
(10) A description of the means by which the State will meet the
needs of the homebound elderly.
(11) Copies of all agreements entered into by the State agency.
(d) When must the State agency submit amendments to the State Plan?
The State agency must submit amendments to FNS to reflect any changes
in program operations or administration described in the State Plan,
and to request additional caseload for the following caseload cycle.
FNS may also require that the State Plan be amended to reflect changes
in Federal law or policy. The State agency may submit amendments to the
State Plan at any time during the fiscal year, for FNS approval. The
amendments will take effect immediately upon approval, unless otherwise
specified by FNS. If a State agency would like to receive additional
caseload for the caseload cycle beginning the following January 1, it
must submit an amendment to the Plan which conveys the request for
additional caseload by November 5. The State agency must also describe
in this submission any plans for serving women, infants, children, and
the elderly at new sites. FNS action on the State agency's request for
additional caseload is part of the caseload assignment process, as
described under Sec. 247.21.
Sec. 247.7 Selection of local agencies.
(a) How does a local agency apply to participate in CSFP? Local
agencies wishing to participate in CSFP must submit a written
application to the State agency. The application must describe how the
local agency will operate the program and, for nonprofit agencies, must
include the agency's tax-exempt status. To be eligible to participate
in CSFP, a nonprofit agency must have tax-exempt status under the
Internal Revenue Code (IRC), or have applied for tax-exempt status with
the Internal Revenue Service (IRS), and be moving towards such status.
Nonprofit agencies organized or operated exclusively for religious
purposes are automatically tax-exempt under the IRC. Nonprofit agencies
required to obtain tax-exempt status must provide documentation from
the IRS that they have obtained such status, or have applied for it.
(b) On what basis does the State agency make a decision on the
local agency's application? The State agency must approve or disapprove
the local agency's application based on the following criteria:
(1) The ability of the local agency to operate the program in
accordance with Federal and State requirements.
(2) The need for the program in the projected service area of the
local agency.
(3) The resources available (caseload and funds) for initiating a
program in the local area.
(4) For nonprofit agencies, the tax-exempt status, with appropriate
documentation.
(c) What must the State agency do if a nonprofit agency approved
for CSFP is subsequently denied tax-exempt status by the IRS, or does
not obtain this status within a certain period of time? In accordance
with paragraph (a) of this section, the State agency may approve a
nonprofit agency that has applied to the IRS for tax-exempt status, and
is moving toward compliance with the requirements for recognition of
tax-exempt status. However, if the IRS subsequently denies a
participating agency's application for recognition of tax-exempt
status, the agency must immediately notify the State agency of the
denial. The State agency must terminate the agency's agreement and
participation immediately upon notification. If documentation of
recognition of tax-exempt status is not received within 180 days of the
effective date of the agency's approval to participate in CSFP, the
State agency must terminate the agency's participation until such time
as recognition of tax-exempt status is obtained. However, the State
agency may grant an extension of 90 days if the agency demonstrates
that its inability to obtain tax-exempt status in the 180-day period is
due to circumstances beyond its control.
(d) How much time does the State agency have to make a decision on
the local agency's application? The State agency must inform the local
agency of approval or denial of the application within 60 days of its
receipt. If the application is denied, the State agency must provide a
written explanation for the denial, along with notification of the
[[Page 62187]]
local agency's right to appeal the decision, in accordance with Sec.
247.35. If the application is approved, the State and local agency must
enter into an agreement in accordance with the requirements of Sec.
247.4.
Sec. 247.8 Individuals applying to participate in CSFP.
(a) What information must individuals applying to participate in
CSFP provide? To apply for CSFP benefits, the applicant, or the adult
parent or guardian of the applicant, must provide the following
information on the application:
(1) Name and address, including some form of identification for
each applicant.
(2) Household income.
(3) Other information related to eligibility, such as age or
pregnancy, as applicable.
(b) What else is required on the application form? After informing
the applicant (or adult parent or guardian) of his or her rights and
responsibilities, in accordance with Sec. 247.12, the local agency
must ensure that the applicant, or the adult parent or guardian of the
applicant, signs the application form beneath the following pre-printed
statement. The statement must be read by, or to, the applicant (or
adult parent or guardian) before signing.
This application is being completed in connection with the
receipt of Federal assistance. Program officials may verify
information on this form. I am aware that deliberate
misrepresentation may subject me to prosecution under applicable
State and Federal statutes. I am also aware that the information
provided may be shared with other organizations to detect and
prevent dual participation. I have been advised of my rights and
obligations under the program. I certify that the information I have
provided for my eligibility determination is correct to the best of
my knowledge.
I authorize the release of information provided on this
application form to other organizations administering assistance
programs for use in determining my eligibility for participation in
other public assistance programs and for program outreach purposes.
(Please indicate decision by placing a checkmark in the appropriate
box.)
YES [ballot]
NO [ballot]
Sec. 247.9 Eligibility requirements.
(a) Who is eligible for CSFP? To be eligible for CSFP, individuals
must fall into one of the following population groups:
(1) Infants, i.e., persons under one year of age.
(2) Children, i.e., persons who are at least one year of age but
have not reached their sixth birthday.
(3) Pregnant women.
(4) Breastfeeding women, up to one year after giving birth (post-
partum).
(5) Post-partum women, up to one year after termination of
pregnancy.
(6) Elderly persons, i.e., persons at least 60 years of age.
(b) What are the income eligibility requirements for women,
infants, and children? (1) The State agency must establish household
income limits that are at or below 185 percent of the Federal Poverty
Income Guidelines published annually by the Department of Health and
Human Services, but not below 100 percent of these guidelines. However,
the State agency must accept as income-eligible, regardless of actual
income, any applicant who is:
(i) Certified as eligible to receive food stamps under the Food
Stamp Act of 1977 (7 U.S.C. 2011 et seq.), Temporary Assistance for
Needy Families (TANF) under Part A of Title IV of the Social Security
Act (42 U.S.C. 601 et seq.), or Medical Assistance (i.e., Medicaid)
under Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(ii) A member of a family that is certified eligible to receive
assistance under TANF, or a member of a family in which a pregnant
woman or an infant is certified eligible to receive assistance under
Medicaid.
(2) The State agency may consider women, infants, and children
participating in another Federal, State, or local food, health, or
welfare program as automatically eligible for CSFP if the income
eligibility limits for the program are equal to or lower than the
established CSFP limits.
(3) For a pregnant woman, the State agency must count each embryo
or fetus in utero as a household member in determining if the household
meets the income eligibility standards.
(c) What are the income eligibility requirements for elderly
persons? The State agency must use a household income limit at or below
130 percent of the Federal Poverty Income Guidelines. Elderly persons
in households with income at or below this level must be considered
eligible for CSFP benefits (assuming they meet other requirements).
However, elderly persons certified before September 17, 1986 (i.e.,
under the three elderly pilot projects) must remain subject to the
eligibility criteria in effect at the time of their certification.
(d) When must the State agency revise the CSFP income guidelines to
reflect the annual adjustments of the Federal Poverty Income
Guidelines? Each year, FNS will notify State agencies, by memorandum,
of adjusted income guidelines by household size at 185 percent, 130
percent, and 100 percent of the Federal Poverty Income Guidelines. The
memorandum will reflect the annual adjustments to the Federal Poverty
Income Guidelines issued by the Department of Health and Human
Services. The State agency must implement the adjusted guidelines for
elderly applicants immediately upon receipt of the memorandum. However,
for women, infants, and children applicants, the State agency must
implement the adjusted guidelines at the same time that the State WIC
agency implements the adjusted guidelines in WIC.
(e) How is income defined and considered as it relates to CSFP
eligibility? (1) Income means gross income before deductions for such
items as income taxes, employees' social security taxes, insurance
premiums, and bonds.
(2) The State agency may exclude from consideration the following
sources of income listed under the WIC regulations at Sec.
246.7(d)(2)(iv) of this chapter:
(i) Any basic allowance for housing received by military services
personnel residing off military installations.
(ii) The value of inkind housing and other inkind benefits.
(3) The State agency must exclude from consideration all income
sources excluded by legislation, which are listed in Sec.
246.7(d)(2)(iv)(C) of this chapter. FNS will notify State agencies of
any new forms of income excluded by statute through program policy
memoranda.
(4) The State agency may authorize local agencies to consider the
household's average income during the previous 12 months and current
household income to determine which more accurately reflects the
household's status. In instances in which the State makes the decision
to authorize local agencies to determine a household's income in this
manner, all local agencies must comply with the State's decision and
apply this method of income determination in situations in which it is
warranted.
(f) What other options does the State agency have in establishing
eligibility requirements for CSFP? (1) The State agency may require
that an individual be at nutritional risk, as determined by a physician
or by local agency staff.
(2) The State agency may require that an individual reside within
the service area of the local agency at the time of application for
CSFP benefits. However, the State agency may not require that an
individual reside within the area for any fixed period of time.
[[Page 62188]]
Sec. 247.10 Distribution and use of CSFP commodities.
(a) What are the requirements for distributing CSFP commodities to
participants? The local agency must distribute a package of commodities
to participants each month, or a two-month supply of commodities to
participants every other month, in accordance with the food package
guide rates established by FNS.
(b) What must the local agency do to ensure that commodities are
distributed only to CSFP participants? The local agency must require
each participant, or participant's proxy, to present some form of
identification before distributing commodities to that person.
(c) What restrictions apply to State and local agencies in the
distribution of CSFP commodities? State and local agencies must not
require, or request, that participants make any payments, or provide
any materials or services, in connection with the receipt of CSFP
commodities. State and local agencies must not use the distribution of
CSFP commodities as a means of furthering the political interests of
any person or party.
(d) What are the restrictions for the use of CSFP commodities? CSFP
commodities may not be used for outreach, refreshments, or for any
purposes other than distribution to, and nutrition education for, CSFP
participants.
Sec. 247.11 Applicants exceed caseload levels.
(a) What must the local agency do if the number of applicants
exceeds the local agency's caseload level? If all caseload has been
filled, the local agency must maintain a waiting list of individuals
who apply for the program. In establishing the waiting list, the local
agency must include the date of application, the population group of
the applicant, and information necessary to allow the local agency to
contact the applicant when caseload space becomes available. Unless
they have been determined ineligible, applicants must be notified of
their placement on a waiting list within 10 days of their request for
benefits.
(b) What are the requirements for serving individuals on the
waiting list once caseload slots become available? When caseload slots
open up, the local agency must provide benefits to eligible individuals
on the waiting list in the following order of priority:
(1) Pregnant women, breastfeeding women, and infants.
(2) Children ages 1 through 3.
(3) Children ages 4 and 5.
(4) Postpartum women.
(5) Elderly persons.
Sec. 247.12 Rights and responsibilities.
(a) What information regarding an individual's rights in CSFP must
the local agency provide to the applicant? The local agency is
responsible for informing the applicant, orally or in writing, of the
following:
(1) Program standards are applied without discrimination by race,
color, national origin, age, disability, or sex.
(2) The local agency will provide notification of a decision to
deny or terminate CSFP benefits, and of an individual's right to appeal
this decision by requesting a fair hearing, in accordance with Sec.
247.33(a).
(3) The local agency will make nutrition education available to all
adult participants, and to parents or guardians of infant and child
participants, and will encourage them to participate.
(4) The local agency will provide information on other nutrition,
health, or assistance programs, and make referrals as appropriate.
(b) What information regarding an individual's responsibilities in
CSFP must the local agency provide to the applicant? In addition to the
written statement required by Sec. 247.8(b), the local agency is
responsible for informing the applicant, orally or in writing, of the
following:
(1) Individuals may not receive both CSFP and WIC benefits
simultaneously, and may not receive CSFP benefits at more than one CSFP
site simultaneously.
(2) Improper receipt of CSFP benefits as a result of dual
participation or other program violations may lead to a claim against
the individual to recover the value of the benefits, and may lead to
disqualification from CSFP.
(3) Participants must report changes in household income or
composition within 10 days after the change becomes known to the
household.
Sec. 247.13 Provisions for non-English or limited English speakers.
(a) What must State and local agencies do to ensure that non-
English or limited English speaking persons are aware of their rights
and responsibilities in the program? If a significant proportion of the
population in an area is comprised of non-English or limited English
speaking persons with a common language, the State agency must ensure
that local agencies inform such persons of their rights and
responsibilities in the program, as listed under Sec. 247.12, in an
appropriate language. State and local agencies must ensure that
bilingual staff members or interpreters are available to serve these
persons.
(b) What must State and local agencies do to ensure that non-
English or limited English speaking persons are aware of other program
information? If a significant proportion of the population in an area
is comprised of non-English or limited English speaking persons with a
common language, the State agency must ensure that local agencies
provide other program information, except application forms, to such
persons in an appropriate language.
Sec. 247.14 Other public assistance programs.
(a) What information on other public assistance programs must the
local agency provide to women, infants, and children applicants? The
local agency must provide CSFP applicants eligible for both CSFP and
WIC with written information on the WIC Program, to assist them in
choosing the program in which they wish to participate. Additionally,
the local agency must provide women, infants, and children applicants
with written information on the following nutrition, health, or public
assistance programs, and make referrals to these programs as
appropriate:
(1) The Medicaid Program, which is the medical assistance program
established under Title XIX of the Social Security Act (42 U.S.C. 1396
et seq.), and other health insurance programs for low-income households
in the State. The State agency must provide local agencies with
materials showing the income standards utilized in the Medicaid
Program.
(2) The Temporary Assistance for Needy Families (TANF) program
under part A of Title IV of the Social Security Act (42 U.S.C. 601 et
seq.).
(3) The Child Support Enforcement Program under part D of Title IV
of the Social Security Act (42 U.S.C. 651 et seq.).
(4) The Food Stamp Program (7 U.S.C. 2011 et seq.).
(b) What information on other public assistance programs must the
local agency provide to elderly applicants? The local agency must
provide elderly applicants with written information on the following
programs, and make referrals, as appropriate:
(1) Supplemental security income benefits provided under title XVI
of the Social Security Act (42 U.S.C. 1381 et seq.).
(2) Medical assistance provided under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.), including medical assistance
provided to a qualified Medicare beneficiary (42 U.S.C. 1395(p) and
1396d(5)).
[[Page 62189]]
(3) The Food Stamp Program (7 U.S.C. 2011 et seq.).
(c) Is the value of CSFP benefits counted as income or resources
for any other public assistance programs? No. The value of benefits
received in CSFP may not be considered as income or resources of
participants or their families for any purpose under Federal, State, or
local laws, including laws relating to taxation and public assistance
programs.
Sec. 247.15 Notification of eligibility or ineligibility of
applicant.
(a) What is the timeframe for notifying an applicant of eligibility
or ineligibility for CSFP benefits? Local agencies must notify
applicants of their eligibility or ineligibility for CSFP benefits, or
their placement on a waiting list, within 10 days from the date of
application.
(b) What must be included in the notification of eligibility or
ineligibility? The notification of eligibility must include information
on the time, location, and means of food distribution, and the length
of the certification period. Notification of ineligibility must be in
writing, and must include the reason the applicant is not eligible, and
a statement of the individual's right to a fair hearing to appeal the
decision.
Sec. 247.16 Certification period.
(a) How long is the certification period? (1) Women, infants, and
children. For women, infants, and children, the State agency must
establish certification periods that may not exceed 6 months in length.
However, pregnant women must be certified to participate for the
duration of their pregnancy and for up to six weeks post-partum.
(2) Elderly persons. For elderly persons, the State agency must
establish certification periods that may not exceed 6 months in length.
However, the State agency may authorize local agencies to extend the
certification period without a formal review of eligibility for
additional 6-month periods, as long as the following conditions are
met:
(i) The person's address and continued interest in receiving
program benefits are verified.
(ii) The local agency has sufficient reason to believe that the
person still meets the income eligibility standards (e.g., the elderly
person has a fixed income).
(iii) No eligible women, infants, or children are waiting to be
served.
(b) On what day of the final month does the certification period
end? The certification period extends to the final day of the month in
which eligibility expires (e.g., the last day of the month in which a
child reaches his or her sixth birthday).
(c) Does the certification period end when a participant moves from
the local area in which he or she was receiving benefits? No. The State
agency must ensure that local agencies serve a CSFP participant, or WIC
participant (if also eligible for CSFP), who moves from another area to
an area served by CSFP, and whose certification period has not expired.
The participant must be given the opportunity to continue to receive
CSFP benefits for the duration of the certification period. If the
local agency has a waiting list, the participant must be placed on its
waiting list ahead of all other waiting applicants. The local agency
that determined the participant's eligibility must provide verification
of the extent of the certification period to the participant upon
request.
(d) What must the local agency do to ensure that participants are
aware of the expiration of the certification period? The local agency
must notify program participants in writing at least 15 days before the
expiration date that eligibility for the program is about to expire.
Sec. 247.17 Notification of discontinuance of participant.
(a) What must a local agency do if it has evidence that a
participant is no longer eligible for CSFP benefits during the
certification period? If a local agency has evidence that a participant
is no longer eligible for CSFP benefits during the certification
period, it must provide the participant with a written notification of
discontinuance at least 15 days before the effective date of
discontinuance.
(b) What must be included in the notification of discontinuance?
The notification of discontinuance must include the effective date of
discontinuance, the reason for the participant's ineligibility, and a
statement of the individual's right to appeal the discontinuance
through the fair hearing process, in accordance with Sec. 247.33(a).
Sec. 247.18 Nutrition education.
(a) What are the State agency's responsibilities in ensuring that
nutrition education is provided? The State agency must establish an
overall nutrition education plan and must ensure that local agencies
provide nutrition education to participants in accordance with the
plan. The State agency must also establish an evaluation procedure to
ensure that the nutrition education provided is effective. The
evaluation procedure must include participant input and must be
directed by a nutritionist or other qualified professional. The
evaluation may be conducted by the State or local agency, or by another
agency under agreement with the State or local agency.
(b) What type of nutrition education must the local agency provide?
The local agency must provide nutrition education that can be easily
understood by participants and is related to their nutritional needs
and household situations. The local agency must provide nutrition
education that includes the following information, which should account
for specific ethnic and cultural characteristics whenever possible:
(1) The nutritional value of CSFP foods, and their relationship to
the overall dietary needs of the population groups served.
(2) Nutritious ways to use CSFP foods.
(3) Special nutritional needs of participants and how these needs
may be met.
(4) For pregnant and postpartum women, the benefits of
breastfeeding.
(5) The importance of health care, and the role nutrition plays in
maintaining good health.
(6) The importance of the use of the foods by the participant to
whom they are distributed, and not by another person.
(c) To whom must local agencies provide nutrition education? The
local agency must make nutrition education available to all adult
participants and to parents or guardians of infants and child
participants. Local agencies are encouraged to make nutrition education
available to children, where appropriate.
(d) May CSFP foods be used in cooking demonstrations? Yes. The
State or local agency, or another agency with which it has signed an
agreement, may use CSFP foods to conduct cooking demonstrations as part
of the nutrition education provided to program participants, but not
for other purposes.
Sec. 247.19 Dual participation.
(a) What must State and local agencies do to prevent and detect
dual participation? The State agency must work with the State WIC
agency to develop a plan to prevent and detect dual participation, in
accordance with an agreement signed by both agencies. The State agency
must also work with local agencies to prevent and detect dual
participation. In accordance with Sec. 247.12(b)(1), the local agency
must inform applicants that dual participation is not allowed and must
check the identification of all
[[Page 62190]]
participants when they are certified or recertified.
(b) What must the local agency do if a CSFP participant is found to
be committing dual participation? A participant found to be committing
dual participation must be discontinued from one of the programs (WIC
or CSFP), or from participation at more than one CSFP site. Whenever an
individual's participation in CSFP is discontinued, the local agency
must notify the individual of the discontinuance, in accordance with
Sec. 247.17. The individual may appeal the discontinuance through the
fair hearing process, in accordance with Sec. 247.33(a). In accordance
with Sec. 247.20(b), if the dual participation resulted from the
participant, or the parent or caretaker of the participant, making
false or misleading statements, or intentionally withholding
information, the local agency must disqualify the participant from
CSFP, unless the local agency determines that disqualification would
result in a serious health risk. The local agency must also initiate a
claim against the participant to recover the value of CSFP benefits
improperly received, in accordance with Sec. 247.30(c).
Sec. 247.20 Program violations.
(a) What are program violations in CSFP? Program violations are
actions taken by CSFP applicants or participants, or the parents or
caretakers of applicants or participants, to obtain or use CSFP
benefits improperly. Program violations include the following actions:
(1) Intentionally making false or misleading statements, orally or
in writing.
(2) Intentionally withholding information pertaining to eligibility
in CSFP.
(3) Selling commodities obtained in the program, or exchanging them
for non-food items.
(4) Physical abuse, or threat of physical abuse, of program staff.
(5) Committing dual participation.
(b) What are the penalties for committing program violations? If
applicants or participants, or the parents or caretakers of applicants
or participants, commit program violations, the State agency may
require local agencies to disqualify the applicants or participants for
a period of up to one year. However, if the local agency determines
that disqualification would result in a serious health risk, the
disqualification may be waived. For program violations that involve
fraud, the State agency must require local agencies to disqualify the
participant from CSFP for a period of up to one year, unless the local
agency determines that disqualification would result in a serious
health risk. The State agency must require local agencies to
permanently disqualify a participant who commits three program
violations that involve fraud. For purposes of this program, fraud
includes:
(1) Intentionally making false or misleading statements to obtain
CSFP commodities.
(2) Intentionally withholding information to obtain CSFP
commodities.
(3) Selling CSFP commodities, or exchanging them for non-food
items.
(c) What must the local agency do to notify the individual of
disqualification from CSFP? The local agency must provide the
individual with written notification of disqualification from CSFP at
least 15 days before the effective date of disqualification. The
notification must include the effective date and period of
disqualification, the reason for the disqualification, and a statement
that the individual may appeal the disqualification through the fair
hearing process, in accordance with Sec. 247.33(a).
Sec. 247.21 Caseload assignment.
(a) How does FNS assign caseload to State agencies? Each year, FNS
assigns a caseload to each State agency to allow persons meeting the
eligibility criteria listed under Sec. 247.9 to participate in the
program, up to the caseload limit. To the extent that resources are
available, FNS assigns caseload to State agencies in the following
order:
(1) Base caseload. (i) Each State agency entering its second year
of program participation receives caseload equal to the amount assigned
it in its first year of participation.
(ii) Each State agency that has participated in two or more
caseload cycles receives caseload in an amount equal to its highest
average monthly participation in one of the two periods of the previous
fiscal year listed below. However, the State agency may not receive a
base caseload in excess of its total caseload assignment for the
previous cycle. The two periods are:
(A) The full fiscal year; or
(B) The final quarter of the fiscal year.
(2) Additional caseload. Each participating State agency may
request, and receive, additional caseload to increase service to women,
infants, and children, and the elderly. Requests by State agencies to
increase service to women, infants, and children receive priority over
requests to increase service to the elderly. State agencies which did
not utilize at least 95 percent of their assigned caseload in one of
the periods of the previous fiscal year listed under paragraph
(a)(1)(ii) of this section are not eligible for additional caseload. Of
the State agency's request for additional caseload, FNS assigns an
amount that it determines the State needs and can efficiently utilize.
In making this determination, FNS considers the factors listed below,
in descending order of importance. If all reasonable requests for
additional caseload cannot be met, FNS assigns it to those States that
are most likely to utilize it. The factors are:
(i) Program participation of women, infants, and children, and the
elderly in the State, in the previous fiscal year;
(ii) The percentage of caseload utilized by the State in the
previous caseload cycle;
(iii) Program participation trends in the State in previous fiscal
years; and
(iv) Other information provided by the State agency in support of
the request.
(3) New caseload. Each State agency requesting to begin
participation in the program, and with an approved State Plan, may
receive caseload to serve women, infants, and children, and the
elderly, as requested in the State Plan. State agency requests to
initiate service to women, infants, and children receive priority over
requests to initiate service to the elderly. Of the State agency's
caseload request, FNS assigns caseload in an amount that it determines
the State needs and can efficiently utilize. This determination is made
based on information contained in the State Plan and on other relevant
information. However, if all caseload requests cannot be met, FNS will
assign caseload to those States that are most likely to utilize it.
(b) When does FNS assign caseload to State agencies? FNS must
assign caseload to State agencies by December 31 of each year, or
within 30 days after enactment of appropriations legislation covering
the full fiscal year, whichever comes later. Caseload assignments for
the previous caseload cycle will remain in effect, subject to the
availability of sufficient funding, until caseload assignments are made
for the current caseload cycle.
(c) How do State agencies request additional caseload for the next
caseload cycle? In accordance with Sec. 247.6(d), a State agency that
would like additional caseload for the next caseload cycle (beginning
the following January 1) must submit a request for additional caseload
by November 5, as an amendment to the State Plan. The State agency must
also describe plans for serving women, infants, and children, and the
elderly, at new sites in this submission.
[[Page 62191]]
Sec. 247.22 Allocation and disbursement of administrative funds to
State agencies.
(a) What must State agencies do to be eligible to receive
administrative funds? In order to receive administrative funds, the
State agency must have signed an agreement with FNS to operate the
program, in accordance with Sec. 247.4(a)(1), and must have an
approved State Plan.
(b) How does FNS allocate administrative funds to State agencies?
(1) As required by law, each fiscal year FNS allocates to each State
agency an administrative grant per assigned caseload slot, adjusted
each year for inflation.
(2) For fiscal year 2003, the amount of the grant per assigned
caseload slot is equal to the per-caseload slot amount provided in
fiscal year 2001, adjusted by the percentage change between:
(i) The value of the State and local government price index, as
published by the Bureau of Economic Analysis of the Department of
Commerce, for the 12-month period ending June 30, 2001; and
(ii) The value of that index for the 12-month period ending June
30, 2002.
(3) For subsequent fiscal years, the amount of the grant per
assigned caseload slot is equal to the amount of the grant per assigned
caseload slot for the preceding fiscal year, adjusted by the percentage
change between:
(i) The value of the State and local government price index, as
published by the Bureau of Economic Analysis of the Department of
Commerce, for the 12-month period ending June 30 of the second
preceding fiscal year; and
(ii) The value of that index for the 12-month period ending June 30
of the preceding fiscal year.
(c) How do State agencies access administrative funds? FNS provides
administrative funds to State agencies on a quarterly basis, by means
of a Letter of Credit, unless other funding arrangements have been made
with FNS. The State agency obtains the funds by electronically
accessing its Letter of Credit account.
Sec. 247.23 State provision of administrative funds to local
agencies.
(a) How much of the administrative funds must State agencies
provide to local agencies for their use? The State agency must provide
to local agencies for their use all administrative funds it receives,
except that the State agency may retain for its own use the amount
determined by the following formula:
(1) 15 percent of the first $50,000 received.
(2) 10 percent of the next $100,000 received.
(3) 5 percent of the next $250,000 received.
(4) A maximum of $30,000, if the administrative grant exceeds
$400,000.
(b) May a State agency request to retain more than the amount
determined by the above formula in the event of special needs? Yes, the
State agency may request approval from FNS to retain a larger amount
than is allowed under the formula prescribed in paragraph (a) of this
section. However, in making its request, the State agency must provide
justification of the need for the larger amount at the State level, and
must ensure that local agencies will not suffer undue hardship as a
result of a reduction in administrative funds.
(c) How must the State agency distribute funds among local
agencies? The State agency must distribute funds among local agencies
on the basis of their respective needs, and in a manner that ensures
the funds will be used to achieve program objectives.
Sec. 247.24 Recovery and redistribution of caseload and
administrative funds.
(a) May FNS recover and redistribute caseload and administrative
funds assigned to a State agency? Yes. FNS may recover and redistribute
caseload and administrative funds assigned to a State agency during the
fiscal year. FNS will redistribute these resources to other State
agencies in accordance with the provisions of 247.21(a) and 247.22(b).
In reassigning caseload, FNS will use the most up-to-date data on
participation and the extent to which caseload is being utilized, as
well as other information provided by State agencies. In instances in
which FNS recovers caseload slots, the State agency must use 95 percent
of its original caseload allocation to be eligible for expansion
caseload.
(b) Is there a limit on the amount of caseload slots or
administrative funds that FNS may recover? Yes. Caseload will be
recovered and reassigned only to the extent permitted by recovered
administrative funding. FNS will not involuntarily recover caseload
that would result in the recovery of more than 25 percent of the
State's administrative funds. However, in instances in which the State
agency requests that FNS recover any portion of its assigned caseload,
the 25 percent limitation will not apply.
Sec. 247.25 Allowable uses of administrative funds and other funds.
(a) What are allowable uses of administrative funds provided to
State and local agencies?
Administrative funds may be used for costs that are necessary to
ensure the efficient and effective administration of the program, in
accordance with parts 3016 and 3019 of this title. Part 3016 of this
title contains the rules for management of Federal grants to State,
local, and Indian tribal governments, and part 3019 of this title
contains the grants management rules for nonprofit organizations. These
departmental regulations incorporate by reference OMB Circulars A-87
(Cost Principles for State and Local Governments) and A-122 (Cost
Principles for Non-Profit Organizations), which set out the principles
for determining whether specific costs are allowable. Some examples of
allowable costs in CSFP include:
(1) Storing, transporting, and distributing foods.
(2) Determining the eligibility of program applicants.
(3) Program outreach.
(4) Nutrition education.
(5) Audits and fair hearings.
(6) Monitoring and review of program operations.
(7) Transportation of participants to and from the local agency, if
necessary.
(b) What are unallowable uses of administrative funds? In addition
to those costs determined to be unallowable by the principles contained
in the OMB circulars referenced in paragraph (a) of this section,
specific examples of unallowable uses of administrative funds in CSFP
include:
(1) The cost of alteration of facilities not required specifically
for the program.
(2) Actual losses which could have been covered by permissible
insurance (through an approved self-insurance program or by other
means).
(c) What costs are allowable only with prior approval of FNS?
Capital expenditures, which include the acquisition of facilities or
equipment, or enhancements to such capital assets, with a cost per unit
of at least $5,000, are allowable only with prior approval of FNS.
Examples of equipment include automated information systems, automated
data processing equipment, and other computer hardware and software.
(d) What procedures must State and local agencies use in procuring
property, equipment, or services with program funds, and disposing of
such property or equipment? The procedures that State and local
agencies must follow in procuring property, equipment, or services with
program funds, or disposing of such property or equipment, are
contained in parts 3016 and 3019 of this title. State, local, and
Indian tribal governments must comply with part 3016 of this title,
while
[[Page 62192]]
nonprofit subgrantees must comply with part 3019 of this title. State
and local agencies may use procurement procedures established by State
and local regulations as long as these procedures do not conflict with
Federal regulations. Federal regulations do not relieve State or local
agencies from responsibilities established in contracts relating to
procurement of property, equipment, or services. The State agency is
the responsible authority regarding the settlement of all contractual
and administrative issues arising out of procurements for the program.
(e) What is program income and how must State and local agencies
use it? Program income is income directly generated from program
activities. It includes, for example, income from the sale of packing
containers or pallets, and the salvage of commodities. Program income
does not include interest earned from administrative funds. State and
local agencies must use program income for allowable program costs, in
accordance with part 3016 of this title.
(f) How must State and local agencies use funds recovered as a
result of claims actions?
The State agency must use funds recovered as a result of claims
actions against subdistributing or local agencies in accordance with
the provisions of Sec. 250.15 of this chapter. The State agency must
use funds recovered as a result of claims actions against participants
for allowable program costs. The State agency may authorize local
agencies to use such funds for allowable program costs incurred at the
local level.
Sec. 247.26 Return of administrative funds.
(a) Must State agencies return administrative funds that they do
not use at the end of the fiscal year? Yes. If, by the end of the
fiscal year, a State agency has not obligated all of its allocated
administrative funds, the unobligated funds must be returned to FNS.
(b) What happens to administrative funds that are returned by State
agencies at the end of the fiscal year? If, in the following fiscal
year, OMB reapportions the returned administrative funds, the funds are
used to support the program. Such funds are not returned to State
agencies in the form of administrative funds in addition to the
legislatively mandated grant per assigned caseload slot.
Sec. 247.27 Financial management.
(a) What are the Federal requirements for State and local agencies
with regard to financial management? State and local public agencies
must maintain a financial management system that complies with the
Federal regulations contained in part 3016 of this title, while
nonprofit organizations must comply with the Federal regulations
contained in part 3019 of this title. The State agency's financial
management system must provide accurate, current, and complete
disclosure of the financial status of the program, including an
accounting of all program funds received and expended each fiscal year.
The State agency must ensure that local agencies develop and implement
a financial management system that allows them to meet Federal
requirements.
(b) What are some of the major components of the State agency's
financial management system? In addition to other requirements, the
State agency's financial management system must provide for:
(1) Prompt and accurate payment of allowable costs.
(2) Timely disbursement of funds to local agencies.
(3) Timely and appropriate resolution of claims and audit findings.
(4) Maintenance of records identifying the receipt and use of
administrative funds, funds recovered as a result of claims actions,
program income (as defined under Sec. 247.25(e)), and property and
other assets procured with program funds.
Sec. 247.28 Storage and inventory of commodities.
(a) What are the requirements for storage of commodities? State and
local agencies must provide for storage of commodities that protects
them from theft, spoilage, damage or destruction, or other loss. State
and local agencies may contract with commercial facilities to store and
distribute commodities. The required standards for warehousing and
distribution systems, and for contracts with storage facilities, are
included under Sec. 250.14 of this chapter.
(b) What are the requirements for the inventory of commodities? A
physical inventory of all USDA commodities must be conducted annually
at each storage and distribution site where these commodities are
stored. Results of the physical inventory must be reconciled with
inventory records and maintained on file by the State or local agency.
Sec. 247.29 Reports and recordkeeping.
(a) What recordkeeping requirements must State and local agencies
meet? State and local agencies must maintain accurate and complete
records relating to the receipt, disposal, and inventory of
commodities, the receipt and disbursement of administrative funds and
other funds, eligibility determinations, fair hearings, and other
program activities. State and local agencies must also maintain records
pertaining to liability for any improper distribution, use of, loss of,
or damage to commodities, and the results obtained from the pursuit of
claims arising in favor of the State or local agency. All records must
be retained for a period of three years from the end of the fiscal year
to which they pertain, or, if they are related to unresolved claims
actions, audits, or investigations, until those activities have been
resolved. All records must be available during normal business hours
for use in management reviews, audits, investigations, or reports of
the General Accounting Office, except medical case records of
participants (unless they are the only source of certification data).
(b) What reports must State and local agencies submit to FNS? State
agencies must submit the following reports to FNS:
(1) SF-269A, Financial Status Report. The State agency must submit
the SF-269A, Financial Status Report, to report the financial status of
the program at the close of the fiscal year. This report must be
submitted within 90 days after the end of the fiscal year. Obligations
must be reported for the fiscal year in which they occur. Revised
reports may be submitted at a later date, but FNS will not be
responsible for reimbursing unpaid obligations later than one year
after the end of the fiscal year in which they were incurred.
(2) FNS-153, Monthly Report of the Commodity Supplemental Food
Program and Quarterly Administrative Financial Status Report. The State
agency must submit the FNS-153 on a monthly basis. FNS may permit the
data contained in the report to be submitted less frequently, or in
another format. The report must be submitted within 30 days after the
end of the reporting period. On the FNS-153, the State agency reports:
(i) The number of program participants in each population category
(e.g., infants, children, and elderly).
(ii) The receipt and distribution of commodities, and beginning and
ending inventories, as well as other commodity data.
(iii) On a quarterly basis, the cumulative amount of administrative
funds expended and obligated, and the amount remaining unobligated.
(3) FNS-191, Racial/Ethnic Group Participation. Local agencies must
submit a report of racial/ethnic
[[Page 62193]]
participation each year, using the FNS-191.
(c) Is there any other information that State and local agencies
must provide to FNS? FNS may require State and local agencies to
provide data collected in the program to aid in the evaluation of the
effect of program benefits on the low-income populations served. Any
such requests for data will not include identification of particular
individuals.
Sec. 247.30 Claims.
(a) What happens if a State or local agency misuses program funds?
If FNS determines that a State or local agency has misused program
funds through negligence, fraud, theft, embezzlement, or other causes,
FNS must initiate and pursue a claim against the State agency to repay
the amount of the misused funds. The State agency will be given the
opportunity to contest the claim. The State agency is responsible for
initiating and pursuing claims against subdistributing and local
agencies if they misuse program funds.
(b) What happens if a State or local agency misuses program
commodities? If a State or local agency misuses program commodities,
FNS may initiate a claim against the State agency to recover the value
of the misused commodities. The procedures for pursuing claims
resulting from misuse of commodities are detailed in Sec. 250.15(c) of
this chapter. Misused commodities include commodities improperly
distributed or lost, spoiled, stolen, or damaged as a result of
improper storage, care, or handling. The State agency is responsible
for initiating and pursuing claims against subdistributing agencies,
local agencies, or other agencies or organizations if they misuse
program commodities. The State agency must use funds recovered as a
result of claims for commodity losses in accordance with Sec. 250.15
of this chapter.
(c) What happens if a participant improperly receives or uses CSFP
benefits through fraud? The State agency must ensure that a local
agency initiates a claim against a participant to recover the value of
CSFP commodities improperly received or used if the local agency
determines that the participant, or the parent or caretaker of the
participant, fraudulently received or used the commodities. For
purposes of this program, fraud includes intentionally making false or
misleading statements, or intentionally withholding information, to
obtain CSFP commodities, or the selling or exchange of CSFP commodities
for non-food items. The local agency must advise the participant of the
opportunity to appeal the claim through the fair hearing process, in
accordance with Sec. 247.33(a). The local agency must also disqualify
the participant from CSFP for a period of up to one year, unless the
local agency determines that disqualification would result in a serious
health risk, in accordance with the requirements of Sec. 247.20(b).
(d) What procedures must be used in pursuing claims against
participants? The State agency must establish standards, based on a
cost-benefit review, for determining when the pursuit of a claim is
cost-effective, and must ensure that local agencies use these standards
in determining if a claim is to be pursued. In pursuing a claim against
a participant, the local agency must:
(1) Issue a letter demanding repayment for the value of the
commodities improperly received or used.
(2) If repayment is not made in a timely manner, take additional
collection actions that are cost-effective, in accordance with the
standards established by the State agency.
(3) Maintain all records regarding claims actions taken against
participants, in accordance with Sec. 247.29.
Sec. 247.31 Audits and investigations.
(a) What is the purpose of an audit? The purpose of an audit is to
ensure that:
(1) Financial operations are properly conducted.
(2) Financial reports are fairly presented.
(3) Proper inventory controls are maintained.
(4) Applicable laws, regulations, and administrative requirements
are followed.
(b) When may the Department conduct an audit or investigation of
the program? The Department may conduct an audit of the program at the
State or local agency level at its discretion, or may investigate an
allegation that the State or local agency has not complied with Federal
requirements. An investigation may include a review of any State or
local agency policies or practices related to the specific area of
concern.
(c) What are the responsibilities of the State agency in responding
to an audit by the Department? In responding to an audit by the
Department, the State agency must:
(1) Provide access to any records or documents compiled by the
State or local agencies, or contractors.
(2) Submit a response or statement to FNS describing the actions
planned or taken in response to audit findings or recommendations. The
corrective action plan must include time frames for implementation and
completion of actions. FNS will determine if actions or planned actions
adequately respond to the program deficiencies identified in the audit.
If additional actions are needed, FNS will schedule a follow-up review
and allow sufficient time for further corrective actions. The State
agency may also take exception to particular audit findings or
recommendations.
(d) When is a State or local agency audit required? In accordance
with part 3052 of this title, which contains the Department's
regulations pertaining to audits of States, local governments, and
nonprofit organizations, a State or local government agency, or a
nonprofit organization, that expends $300,000 or more in Federal awards
in a fiscal year must have a single, or a program-specific, audit
conducted for that year. The value of CSFP commodities distributed by
the agency or organization must be considered part of the Federal
award. Federal regulations do not require agencies and organizations
that expend less than this amount in Federal awards in a fiscal year to
have an audit for that year.
(e) What are the requirements for State or local agency audits?
State and local agency audits must be conducted in accordance with the
requirements of part 3052 of this title. State and local agencies are
responsible for follow-up and corrective actions in response to audit
findings. The State agency must ensure that local agencies meet audit
requirements. The State agency must ensure that all State or local
agency audit reports are available for FNS review.
Sec. 247.32 Termination of agency participation.
(a) When may a State agency's participation in CSFP be terminated?
While the following paragraphs describe the circumstances and basic
procedures in termination of local agency programs, specific actions
and procedures relating to program termination are more fully described
in part 3016 of this title.
(1) Termination by FNS. FNS may terminate a State agency's
participation in CSFP, in whole or in part, if the State agency does
not comply with the requirements of this part. FNS must provide written
notification to the State agency of termination, including the reasons
for the action, and the effective date.
(2) Termination by State agency. The State agency may terminate the
program, in whole or in part, upon
[[Page 62194]]
written notification to FNS, stating the reasons and effective date of
the action. In accordance with Sec. 247.4(b)(6), which relates to the
termination of agreements, either party must provide 30 days' written
notice.
(3) Termination by mutual agreement. The State agency's program may
also be terminated, in whole or in part, if both parties agree the
action would be in the best interest of the program. The two parties
must agree upon the conditions of the termination, including the
effective date.
(b) When may a local agency's participation in CSFP be terminated?
While the following paragraphs describe the circumstances and basic
procedures in termination of local agency programs, specific actions
and procedures relating to program termination are more fully described
in part 3016 of this title.
(1) Termination by State agency. The State agency may terminate a
local agency's participation in CSFP, or may be required to terminate a
local agency's participation, in whole or in part, if the local agency
does not comply with the requirements of this part. The State agency
must notify the local agency in writing of the termination, the reasons
for the action, and the effective date, and must provide the local
agency with an opportunity to appeal, in accordance with Sec. 247.35.
(2) Termination by local agency. The local agency may terminate the
program, in whole or in part, upon written notification to the State
agency, stating the reasons and effective date of the action. In
accordance with Sec. 247.4(b)(6), which relates to the termination of
agreements, either party must provide 30 days' written notice.
(3) Termination by mutual agreement. The local agency's program may
also be terminated, in whole or in part, if both the State and local
agency agree that the action would be in the best interest of the
program. The two parties must agree upon the conditions of the
termination, including the effective date.
Sec. 247.33 Fair hearings.
(a) What is a fair hearing? A fair hearing is a process that allows
a CSFP applicant or participant to appeal an adverse action, which may
include the denial or discontinuance of program benefits,
disqualification from the program, or a claim to repay the value of
commodities received as a result of fraud. State and local agencies
must ensure that CSFP applicants and participants understand their
right to appeal an adverse action through the fair hearing process,
which includes providing written notification of the individual's right
to a fair hearing along with notification of the adverse action. Such
notification is not required at the expiration of a certification
period.
(b) What are the basic requirements the State agency must follow in
establishing procedures to be used in fair hearings? The State agency
must establish simple, clear, uniform rules of procedure to be used in
fair hearings, including, at a minimum, the procedures outlined in this
section. The State agency may use alternate procedures if approved by
FNS. The rules of procedure must be available for public inspection and
copying.
(c) How may an individual request a fair hearing? An individual, or
an individual's parent or guardian, may request a fair hearing by
making a clear expression, verbal or written, to a State or local
agency official, that an appeal of the adverse action is desired.
(d) How much time does an individual have to request a fair
hearing? The State or local agency must allow an individual at least 60
days from the date the agency mails or gives the individual the
notification of adverse action to request a fair hearing.
(e) When may a State or local agency deny a request for a fair
hearing? The State or local agency may deny a request for a fair
hearing when:
(1) The request is not received within the time limit established
in paragraph (d) of this section.
(2) The request is withdrawn in writing by the individual
requesting the hearing or by an authorized representative of the
individual.
(3) The individual fails to appear, without good cause, for the
scheduled hearing.
(f) Does the request for a fair hearing have any effect on the
receipt of CSFP benefits? Participants who appeal the discontinuance of
program benefits within the 15-day advance notification period required
under Sec. Sec. 247.17 and 247.20 must be permitted to continue to
receive benefits until a decision on the appeal is made by the hearing
official, or until the end of the participant's certification period,
whichever occurs first. However, if the hearing decision finds that a
participant received program benefits fraudulently, the local agency
must include the value of benefits received during the time that the
hearing was pending, as well as for any previous period, in its
initiation and pursuit of a claim against the participant.
(g) What notification must the State or local agency provide an
individual in scheduling the hearing? The State or local agency must
provide an individual with at least 10 days' advance written notice of
the time and place of the hearing, and must include the rules of
procedure for the hearing.
(h) What are the individual's rights in the actual conduct of the
hearing? The individual must have the opportunity to:
(1) Examine documents supporting the State or local agency's
decision before and during the hearing.
(2) Be assisted or represented by an attorney or other persons.
(3) Bring witnesses.
(4) Present arguments.
(5) Question or refute testimony or evidence, including an
opportunity to confront and cross-examine others at the hearing.
(6) Submit evidence to help establish facts and circumstances.
(i) Who is responsible for conducting the fair hearing, and what
are the specific responsibilities of that person? The fair hearing must
be conducted by an impartial official who does not have any personal
stake or involvement in the decision and who was not directly involved
in the initial adverse action that resulted in the hearing. The hearing
official is responsible for:
(1) Administering oaths or affirmations, as required by the State.
(2) Ensuring that all relevant issues are considered.
(3) Ensuring that all evidence necessary for a decision to be made
is presented at the hearing, and included in the record of the hearing.
(4) Ensuring that the hearing is conducted in an orderly manner, in
accordance with due process.
(5) Making a hearing decision.
(j) How is a hearing decision made? The hearing official must make
a decision that complies with Federal laws and regulations, and is
based on the facts in the hearing record. In making the decision, the
hearing official must summarize the facts of the case, specify the
reasons for the decision, and identify the evidence supporting the
decision and the laws or regulations that the decision upholds. The
decision made by the hearing official is binding on the State or local
agency.
(k) What is the time limit for making a hearing decision and
notifying the individual of the decision? A hearing decision must be
made, and the individual notified of the decision, in writing, within
45 days of the request for the hearing. The notification must include
the reasons for the decision.
(l) How does the hearing decision affect the individual's receipt
of CSFP benefits? If a hearing decision is in favor of an applicant who
was denied CSFP benefits, the receipt of benefits must begin within 45
days from the date that the hearing was requested, if the
[[Page 62195]]
applicant is still eligible for the program. If the hearing decision is
against a participant, the State or local agency must discontinue
benefits as soon as possible, or at a date determined by the hearing
official.
(m) What must be included in the hearing record? In addition to the
hearing decision, the hearing record must include a transcript or
recording of testimony, or an official report of all that transpired at
the hearing, along with all exhibits, papers, and requests made. The
record must be maintained in accordance with Sec. 247.29(a). The
record of the hearing must be available for public inspection and
copying, in accordance with the confidentiality requirements under
Sec. 247.36(b).
(n) What further steps may an individual take if a hearing decision
is not in his or her favor? If a hearing decision upholds the State or
local agency's action, the State or local agency must describe to the
individual any State-level review or rehearing process, and the right
of the individual to pursue judicial review of the decision.
Sec. 247.34 Management reviews.
(a) What must the State agency do to ensure that local agencies
meet program requirements and objectives? The State agency must
establish a management review system to ensure that local agencies,
subdistributing agencies, and other agencies conducting program
activities meet program requirements and objectives. As part of the
system, the State agency must perform an on-site review of all local
agencies, and of all storage facilities utilized by local agencies, at
least once every two years. As part of the on-site review, the State
agency must evaluate all aspects of program administration, including
certification procedures, nutrition education, civil rights compliance,
food storage practices, inventory controls, and financial management
systems. In addition to conducting on-site reviews, the State agency
must evaluate program administration on an ongoing basis by reviewing
financial reports, audit reports, food orders, inventory reports, and
other relevant information.
(b) What must the State agency do if it finds that a local agency
is deficient in a particular area of program administration? The State
agency must record all deficiencies identified during the review and
institute follow-up procedures to ensure that local agencies and
subdistributing agencies correct all deficiencies within a reasonable
period of time. To ensure improved program performance in the future,
the State agency may require that local agencies adopt specific review
procedures for use in reviewing their own operations and those of
subsidiaries or contractors. The State agency must provide copies of
review reports to FNS upon request.
Sec. 247.35 Local agency appeals of State agency actions.
(a) What recourse must the State agency provide local agencies to
appeal a decision that adversely affects their participation in CSFP?
The State agency must establish a hearing procedure to allow local
agencies to appeal a decision that adversely affects their
participation in CSFP--e.g., the denial or termination of a local
agency's participation in the program. The adverse action must be
postponed until a decision on the appeal is made.
(b) What must the State agency include in the hearing procedure to
ensure that the local agency has a fair chance to present its case? The
hearing procedure must provide the local
(1) Adequate advance notice of the time and place of the hearing.
(2) An opportunity to review the record before the hearing, and to
present evidence at the hearing.
(3) An opportunity to confront and cross-examine witnesses.
(4) An opportunity to be represented by counsel, if desired.
(c) Who conducts the hearing and how is a decision on the appeal
made? The hearing must be conducted by an impartial person who must
make a decision on the appeal that is based solely on the evidence
presented at the hearing, and on program legislation and regulations. A
decision must be made within 60 days from the date of the request for a
hearing, and must be provided in writing to the local agency.
Sec. 247.36 Confidentiality of applicants or participants.
(a) Can the State or local agency disclose information obtained
from applicants or participants to other agencies or individuals? State
and local agencies must restrict the use or disclosure of information
obtained from CSFP applicants or participants to persons directly
connected with the administration or enforcement of the program,
including persons investigating or prosecuting program violations. The
State or local agency may exchange participant information with other
health or welfare programs for the purpose of preventing dual
participation. In addition, with the consent of the participant, as
indicated on the application form, the State or local agency may share
information obtained with other health or welfare programs for use in
determining eligibility for those programs, or for program outreach.
However, the State agency must sign an agreement with the administering
agencies for these programs to ensure that the information will be used
only for the specified purposes, and that agencies receiving such
information will not further share it.
(b) Can the State or local agency disclose the identity of persons
making a complaint or allegation against another individual
participating in or administering the program? The State or local
agency must protect the confidentiality, and other rights, of any
person making allegations or complaints against another individual
participating in, or administering CSFP, except as necessary to conduct
an investigation, hearing, or judicial proceeding.
Sec. 247.37 Civil rights requirements.
(a) What are the civil rights requirements that apply to CSFP?
State and local agencies must comply with the requirements of Title VI
of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of
the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), Section 504
of the Rehabilitation Act of 1973 (29 U.S.C. 790 et seq.), the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and Titles II and
III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.). State and local agencies must also comply with the Department's
regulations on nondiscrimination (Parts 15, 15a, and 15b of this
title), and with the provisions of FNS Instruction 113-2, including the
collection of racial/ethnic participation data and public notification
of nondiscrimination policy. State and local agencies must ensure that
no person shall, on the grounds of race, color, national origin, age,
sex, or disability, be subjected to discrimination under the program.
(b) How does an applicant or participant file a complaint of
discrimination? CSFP applicants or participants who believe they have
been discriminated against should file a discrimination complaint with
the USDA Director, Office of Civil Rights, Room 326W, Whitten Building,
1400 Independence Avenue, SW., Washington, DC 20250-9410 or telephone
(202) 720-5964.
Dated: September 25, 2003.
Eric M. Bost,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 03-27305 Filed 10-30-03; 8:45 am]
BILLING CODE 3410-30-U