[Federal Register: September 11, 2003 (Volume 68, Number 176)]
[Rules and Regulations]
[Page 53483-53490]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se03-1]
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[[Page 53483]]
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 245
RIN 0584--AD20
Determining Eligibility for Free and Reduced Price Meals in
Schools--Verification Reporting and Recordkeeping Requirements
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends the reporting and recordkeeping
requirements under the National School Lunch Program (NSLP) and School
Breakfast Program (SBP) relating to the verification of applications
for free and reduced price meal benefits under the NSLP and the SBP. In
spite of the efforts of school food authorities and State agencies to
ensure the accuracy of free and reduced price applications, data
indicate that the number of children certified as eligible to receive
free meals exceeds the number of children who are eligible to receive
those meals, given other poverty indicators. This rule requires school
food authorities to report verification activity and results to their
respective State agencies and requires State agencies to analyze and
act on these data and to report school food authority level data to the
Food and Nutrition Service (FNS) beginning with the school year which
starts on July 1, 2004. School food authorities and State agencies are
encouraged to begin to collect and report verification data prior to
the required implementation date. Recordkeeping requirements will be
revised consistent with the reporting requirements. Submission of these
data on a school food authority basis will enable State agencies and
FNS to improve and target oversight activities.
DATES: Effective date: This rule is effective October 14, 2003.
However, the reporting requirements contained in 7 CFR 245.11 will not
be in effect until approved by OMB under the Paperwork Reduction Act.
FNS will publish a notice upon approval of those requirements to
establish the effective date.
Implementation dates: Beginning in School Year 2004-2005, each
school food authority and State agency must collect and report data
elements designated by FNS to their State agency and FNS, respectively.
Contingent upon new funding to support this purpose, beginning in
School Year 2005-2006, FNS will also require each school food authority
and State agency to collect and report to their State agency and FNS,
respectively, additional data concerning the reinstatement of students
who have been terminated as a result of verification.
FOR FURTHER INFORMATION CONTACT: Robert M. Eadie, Chief, Policy and
Program Development Branch, Child Nutrition Division, Food and
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, VA 22302
or by telephone at (703) 305-2590.
SUPPLEMENTARY INFORMATION:
Background
What Was Proposed?
On August 9, 2002, FNS published a proposed rule in the Federal
Register (67 FR 51779) proposing to amend 7 CFR Sec. 245.6a(c) to
require school food authorities to report verification activity and
results to their respective State agencies in support of State agency
and FNS oversight activities. Specifically, the document proposed
amending Sec. 245.6a(c) to require school food authorities to report
certain verification information to the State agency by March 1
annually. The information would be reported on a form designated by
FNS. The information requested on the form would address, but not be
limited to, the characteristics of the verification sample and the
results of verification activity. The preamble to the proposal provided
the following examples of information to be collected: the number of
children approved for free and reduced price meal benefits based on
direct certification, income applications, and categorically eligible
applications; the method of verification sample selection; the number
of applications selected for verification; the number of students on
selected applications; the number of students approved for free meal
benefits and reduced price meal benefits whose eligibility for benefits
were reduced or terminated as the result of verification activities; of
those terminated, the number of non-respondents; and the number of
students reinstated for free or reduced price meal benefits, as of
February 15th of each year.
In addition, the document proposed that Sec. 245.6a(c) would
require school food authorities to retain copies of the information
reported to the State agency and all supporting documents. The proposed
rule also restated the existing requirements that verified applications
and information submitted by households must be readily retrievable by
schools and that school food authorities must retain all documents
submitted by households to confirm eligibility, reproductions of those
documents, or annotations made by the determining official that
indicate which documents were submitted by households and the dates of
submission. The existing requirement that relevant correspondence
between the households selected for verification and the school or
school food authority must be retained was also restated.
FNS also proposed to add a new Sec. 245.11(i) to require each
State agency to collect the annual verification data from each school
food authority in accordance with guidance provided by FNS. To
facilitate the reporting of these data, FNS would provide a data
collection instrument in electronic format. In addition, the proposed
rule required that each State agency analyze these data, determine if
there are potential problems, and formulate corrective actions and
technical assistance activities to support the objective of certifying
only those children eligible for free or reduced price meals. The
availability and review of this information at the State level is
designed to assist State agencies in targeting more rigorous oversight
and technical assistance activities on school food authorities when
their verification activities result in a high termination rate. A high
termination rate may be due to a number of applications either being
changed from free or reduced price
[[Page 53484]]
status to paid status because of documentation provided by households
or because of households' failure to respond to the verification
request.
The proposed rule would also require that the State agency report
to FNS, not later than April 15th of each year, the results of each
school food authority's verification activities, submitted in
accordance with Sec. 245.6a(c), and any ameliorative actions the State
agency has taken or intends to take in those school food authorities
with high numbers of applications changed due to verification
activities. FNS intends to provide for the electronic submission of
these data.
Additionally, the proposed rule included in 7 CFR Part 245 a
definition of the term ``FNS'' which means ``the Food and Nutrition
Service of the Department of Agriculture''. This definition was
inadvertently not included in this Part in earlier editions and FNS
proposed to add the definition at 7 CFR 245.2(b-2) for the sake of
clarity and completeness.
Has FNS Taken Other Actions To Address Over-Certification?
FNS has taken several actions to address the issues associated with
over-certification. On January 21, 2000, FNS published a notice in the
Federal Register (65 FR 3409) soliciting States and school food
authorities to participate in pilot projects to test alternate
application, approval and verification procedures for free and reduced
price eligibility determinations. Twenty-one school food authorities
operated pilot projects. These pilot sites conducted alternative
certification or verification processes for three consecutive school
years, beginning in School Year 2000-2001. Preliminary data has shown
the alternative methods have, to varying degrees, deterred and detected
misreporting of eligibility information. FNS is currently conducting an
in-depth analysis of the administrative data presented, to date, from
the pilot sites. While the information derived from the pilots is not
nationally representative, pilot activities have provided FNS with
insight on the efficacy of the existing application and verification
processes and on alternatives to those processes. This final rule is
intended to complement pilot activities by collecting information on
verification activity nationwide.
Discussion of Comments and Their Resolution
How Many Comments Were Received?
During the 60 day comment period, 99 comment letters were received:
81 from State and local agencies administering the school programs; 12
from advocacy groups; 5 from the general public, and 1 from the food
industry. In accordance with the Paperwork Reduction Act of 1995 (44
U.S.C 3507), the public was invited to send comments on the proposed
information collection to the Office of Management and Budget (OMB).
OMB received 12 comments on the information collection aspects of the
proposed rule.
What Did Commenters Say About the Proposed Rule?
Discussion of General Comments
In general, the commenters were supportive of ensuring that free
and reduced price meal benefits only go to eligible children and gave a
number of suggestions outside the scope of the proposed rule to address
this problem. Some examples of suggested ideas are: hold households
accountable for the information submitted on their application;
eliminate publication of income eligibility guidelines; have other
programs/agencies take more responsibility in regards to free and
reduced price benefit determinations; consider/research reasons why
households are not responding to verification requests (e.g., moved,
limited English proficiency, undocumented immigrants, migrants, lack of
understanding of the concept of verification); use the additional costs
that the proposal would incur to provide universal free school meals to
all children; and specify that the verification notification needs to
be provided in a language that the families of participating children
can understand. Additional studies of the issue of over-certification
were also suggested.
A few commenters expressed concern that the proposed rule did not
address the inadequacies of the verification process (such as non-
respondents and language barriers). Several commenters recommended that
FNS delay any changes to the verification requirements until completion
of the pilot projects and the analysis of the results. As previously
stated, the purpose of this regulation is to establish a method to
obtain data about verification results as another step in the overall
goal of improved program integrity. The requirements for the reporting
of verification activities contained in this rule will complement the
pilot activities. The data collection is a tool for FNS to better
analyze current verification procedures and results. The information,
when reviewed and analyzed, may lead to other proposals in the future
to further refine the entire certification and verification process.
The ideas that were suggested will also be kept in mind for future
rulemaking.
Discussion of Comments on the Proposed Burden Under the Paperwork
Reduction Act
Over fifty commenters discussed the burden that the proposed
requirements would place on school food authorities and State agencies.
The general consensus is that the proposed reporting and recordkeeping
requirements are too burdensome and the estimated annual reporting and
recordkeeping burden hours under the Paperwork Reduction Act of 1995
are too low. We have reviewed the burden hours and have adjusted the
estimate to account for the fact that there will be differences in the
amount of time required to complete the report based on the size of the
school food authority. Small school food authorities, which constitute
the majority of participating school food authorities, may only have a
small number of verified applications to summarize, while larger school
food authorities will have numerous verified applications to summarize.
However, larger districts may also have automated information systems
that will provide some or all of the information to complete the
report, thereby reducing their overall burden hours. We have taken
these different circumstances into consideration and have adjusted the
burden hours as follows: School food authorities average burden hours
have been increased from 16,342 to 32,684, an average of 2 hours per
school food authority. State agency average burden hours are increased
per response from 8 to 24 hours. This results in an increase of annual
burden hours from 432 to 1,296 for State agencies. We submitted the
revised burden to OMB for approval.
A few commenters questioned the need for requiring additional data
collection by school food authorities beyond the current requirements.
Specifically, commenters stated that most school food authorities do
not currently track data regarding the number of students whose
benefits were terminated and who were then reinstated (due to
submission of required documentation or a change in household
circumstances) for free or reduced price meals by February 15. The
Department is concerned about the
[[Page 53485]]
students that are terminated as a result of verification activities.
Data regarding the number of students that reapply and are re-certified
for free or reduced price meals would be beneficial in analyzing the
over-certification issue. Commenters expressed concern that this data
element would be labor intensive since it is not currently being
collected. The Department is mindful of the commenters' concerns about
this burden and recognizes that this requirement would result in
additional administrative burden at a time when school food authorities
are faced with serious fiscal and staff constraints. In order to
balance the need for this data with the additional economic burden on
school food authorities, the Department is modifying the implementation
date for this data element, as well as attempting to secure additional
funds to enable school food authorities to enhance their data
collection and reporting systems. Therefore, reporting and collecting
this data will be required for the School Year 2005-2006 contingent
upon new funding to support this purpose. However, the implementation
date for other data collection and reporting remains as proposed. The
Department encourages school food authorities and State agencies to
collect and report any or all verification data elements to their
respective State agency before the required dates regardless of the
availability of additional budgetary assistance.
Discussion of Comments on Public Law 104-4: Unfunded Mandates Reform
Act of 1995
One of the requirements for agencies when promulgating regulations
is an assessment required by Public Law 104-4 the Unfunded Mandates
Reform Act of 1995, of the impact of the proposed changes on State,
local and tribal governments and the private sector. The threshold for
this assessment is $100 million in any one year. One commenter took
issue with FNS' assessment that the proposed rule contained no Federal
mandates of $100 million. The commenter stated that there is no
estimate of the overall time required to complete the entire
verification, reporting, review and analysis at the State agency as
``Each State agency must analyze these data, determine if there are
potential problems, and formulate corrective action * * *''. The
commenter indicated that the assumption was inaccurate and the
procedures will create a significant burden on State agencies
administering these programs.
Upon further review, FNS continues to believe that 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. However, as discussed
earlier, FNS has modified the burden hours from the proposed rule on
the data collection and reporting requirements in order to address
burden concerns. It is important to note that the determination of
burden hours is based only on the compilation of data and the
completion of the report. The analysis of the reported data and the
corrective action and technical assistance activities are not part of
the data collection and reporting burden as State agencies are
obligated to ensure that school food authorities administer the program
in accordance with program regulations. Therefore, program oversight,
corrective action, and technical assistance resulting from the data
reported are part of the overall administrative responsibility of State
agencies.
Discussion of Comments on the Need for Guidance
Over 20 commenters discussed the need for additional guidance on
the procedures for the State agency's responsibilities outlined in the
proposal. Many stated that the proposal language was vague and that
definitions of ``corrective action'', ``rigorous oversight activity'',
and ``ameliorative actions'' are needed. Commenters also indicated that
there is a need to be more specific as to what the State agency is
expected to do when reviewing questionable reports.
The Department envisions that State agencies will note trends and
notify school food authorities of these trends as well as provide
training and technical assistance to school food authorities as needed.
Also, in response to these concerns, FNS is developing guidance
materials supporting the State agency's role in this effort, including
an outline of possible review techniques and suggested technical
assistance, which will be provided prior to the implementation date of
this rule.
Discussion of Comments on Deadlines
Some commenters discussed the deadlines for school food authorities
to submit accumulated data to the State agency and for States agencies
to submit consolidated data to FNS. Most suggested that the deadlines
are too short and should be extended in order for the data to be
collected, compiled and analyzed. A particular concern to commenters
was the short turn around for collecting and reporting the information
on students that are reinstated after termination due to verification.
We recognize the commenters' concerns regarding the reporting
deadlines and to alleviate some of the burden, we have modified, as
discussed earlier in this preamble, the implementation date of the data
element regarding reinstated students. Because the remaining data
elements that were discussed in the proposed rule are based on data
that is already collected, the Department is not changing the reporting
deadlines of March 1st for each school food authority to submit data to
their respective State agency, as well as the April 15th date for State
agencies to submit the aggregated data to FNS.
Three commenters requested a delay in the implementation of the
rule. FNS does not feel that a delay in implementation for collection
and reporting of existing data is warranted due to the urgency in
finding a solution to the issue of over-certification. However, it is
important to note that the first report on the majority of data
elements will not be due from the school food authorities to the State
agencies until March 1, 2005 and the first reports from the State
agencies to FNS are not due until April 15, 2005.
Over 20 commenters requested an extension to the comment period for
the proposed rule. Again, due to the urgency of the over-certification
issue, FNS believes that the 60-day comment period for the proposed
rule was sufficient.
Discussion of Comments on Concerns That the Rule Will Have Adverse
Results
Some commenters expressed concern that the proposed rule may have
adverse effects on eligible children. Specific comments on this issue
are: (1) Verification has been shown to discourage participation by
needy children, and (2) some efforts by State agencies to assure that
only eligible children are certified may inadvertently impede program
participation by some needy children. While FNS recognizes and shares
the concerns about discouraging participation of eligible children, FNS
does not believe that this rule will have any adverse results. The rule
does not change existing certification and verification requirements,
and should not change the way that school food authorities interact
with families applying for benefits. The rule merely requires analysis
and reporting of information, by school food authorities and State
[[Page 53486]]
agencies, related to existing certification and verification
requirements.
Discussion of Comments on Data Presented by FNS and Need for Rulemaking
Two commenters suggested that the preamble overstated the strength
of available data and that the preamble should have included a more
careful discussion of the limitations of verification data. These
comments specifically stated that FNS should not, especially in the
context of a call for better analysis, present misleading data and
questionable analysis without any discussion of its meaning and
soundness of the methodology employed. The commenters also felt that
the actions described in the preamble were an example of the type of
cursory use of data that could lead State agencies to take harmful or
ineffective steps in response to the verification data. Further, they
recommended that the preamble to the proposed rule should have clearly
addressed the limitations of verification data and, thus, the
conclusions that may be drawn from analyses of these data. In response
to these concerns, it is the intent of this rule to simply provide
information in order to provide a broader understanding of the over-
certification problem. This rule is intended to provide information
about the verification problem by collecting data nationally. At this
point in time, FNS does not have enough information to discuss any
conclusions that may result from collection and analysis of this data.
A few commenters discussed the background information provided in
the preamble to the proposal. In particular, they noted that the
preamble stated that when State agencies conducted comprehensive on-
site evaluations of school food authorities the resulting findings
indicate that school food authorities have been determining free and
reduced price eligibility correctly. Commenters agree with this
conclusion and stated that this indicates that the problem does not lie
with administrative procedures and measures taken by school food
authorities and State agencies, but likely with household reporting.
Other commenters said that requiring school food authorities and State
agencies to annually collect, review and report a massive amount of
data to confirm what is already known, is counter-productive--a waste
of scarce and valuable resources.
In response to these commenters, we reiterate that the purpose of
this rule is to better understand these issues in order to determine
our course of action to correct problems with certification as well as
the verification process. The purpose of this rule is to gather and
assess the results of verification as a means to compare the initial
certification decisions and the disposition of verified applications
when households are asked to provide information confirming their
current eligibility.
Some commenters discussed the statement made in the preamble that
there is a 27% over certification of students eligible for free meals
based on a comparison of NSLP data and Current Population Survey (CPS)
data. These commenters mentioned that CPS data might not be the best
source of data to compare with NSLP data.
The CPS, a joint project between the Bureau of Labor Statistics and
the Bureau of the Census, is a well established, technically sound
survey that is used for, among other things, official U.S. unemployment
and poverty estimates. In conjunction with FNS program data, the CPS is
one of the best sources of information to use in understanding the
problem of certification inaccuracy. One of the strengths of CPS is
that it includes the non-institutionalized population of the United
States and is designed to include undocumented persons and migrants in
the sample. We know that these groups are hard to capture with surveys.
However, the CPS does not rely solely on the sample's ability to fully
record these groups--the CPS data are adjusted to reflect the Census'
best estimate of the size of the undocumented population. FNS believes
that the use of CPS data is a critical tool available in understanding
the magnitude of the over-certification problem.
The Agency will continue to make use of CPS and other data sources
in assessing certification accuracy.
Specific Comments
Sections 245.6a(c) and 245.11(i)
Two commenters wanted to replace ``State agency'' with ``FNS'' as
the recipient of school food authorities' report verification
information. However, since State agencies are responsible for ensuring
school food authority compliance with program requirements, including
accurate and timely reporting, it is more appropriate to require that
school food authorities report data to the State agencies, not to FNS.
State agencies (1) need to receive data to focus their efforts; (2) are
in the best position to ensure accurate reporting; and (3) are
responsible for all aspects of program operations within their States.
The final rule will continue to require that school food authorities
report verification information to their respective State agencies.
Section 245.11(i)
Another comment questioned why ``high termination rates'' should
trigger more rigorous oversight activities on the part of the State
agency. This comment went on to state that this part of the proposal
seems to be completely at odds with the statement in the preamble that
``School food authorities generally have been determining free and
reduced price eligibility in accordance with the regulatory
requirements * * *''.
If the State agency sees that the school food authority has
submitted data that has a high termination rate, then the State agency
will need to work with that school food authority to see if it has
taken appropriate actions to ensure accuracy of the application
process. State agencies are expected to develop technical assistance
activities in conjunction with school food authorities to assure that
they are utilizing direct certification to its fullest, providing
appropriate translations (if needed), and/or providing appropriate
follow-up to households that do not respond to verification requests,
if needed. School food authorities should use the data collected to
determine what improvements are needed in their certification and
verification procedures (i.e. single versus multi-child applications,
additional assistance for parents, use of other/additional verification
procedures). School food authorities also should notify State agencies
of what technical assistance is needed and in what form (training,
materials, etc.) in order to improve the verification process. FNS will
provide training, technical assistance, additional translations and the
like, for school food authorities and State agencies to assist them in
analyzing how their procedures could be improved and in developing/
supplying technical assistance and training. This provision is adopted
as proposed in this final regulation, as FNS will be providing guidance
and resources to assist school food authorities and State agencies in
addressing the issue of high termination rates.
Numerous commenters discussed concerns with the proposed regulatory
requirement in Sec. 245.11(i) that ``Each State agency must analyze
these data, determine if there are potential problems, and formulate
corrective actions and technical assistance activities that will
support the objective of certifying only those children eligible for
free or reduced price meals.'' Some
[[Page 53487]]
of the concerns with this requirement are that it penalizes the school
food authority for a high termination rate and creates an incentive to
reduce the number of terminations. Commenters were also concerned that
this focus could reduce the ability of State agencies to provide
technical assistance in other significant areas like improved nutrition
and menu planning. Commenters went on to say that there should be more
emphasis on the number of children determined eligible who are not
participating in the NSLP and SBP and that a high level of application
information changed due to verification requests is not necessarily a
negative reflection upon the school food authorities. Corrective action
should not be required solely on the number of applications changed due
to verification efforts.
Again, we emphasize that the regulation is designed to have State
agencies collect and analyze information on the results of school food
authorities verification activities in order to improve oversight,
corrective action, and technical support with the objective of
certifying only those children who are eligible for free and reduced
price meals. A high rate of terminations resulting from verification
activities is one indicator that there could be an underlying problem
with the school food authorities certification actions. It may show,
for example, areas where the school food authority needs technical
assistance on certain application procedures. However, it is important
that school food authorities and State agencies continue to do as much
as possible to ensure that eligible children are not inadvertently
hindered from receiving their appropriate level of benefits due to the
procedures of the school food authority or State agency. The corrective
action and technical assistance required by this rulemaking is not
directed toward the verification termination rate per se, but rather
toward other issues, such as ensuring that school food authorities are
utilizing direct certification to its fullest, providing appropriate
translations if there is a large foreign population, and/or providing
appropriate follow-up to households when there is no response to a
verification request.
How Will the State Agency Transmit the Data to FNS?
The proposed regulation indicated that State agencies would collect
the data on verification activities already completed by school food
authorities in accordance with existing regulation at 7 CFR 245.6a(c).
State agencies would then consolidate that information in a format
designated by FNS. FNS is designing the format to minimize the burden
on State agencies while still providing FNS with the data needed to
formulate any additional measures to improve the certification and
verification processes. We will be working with our cooperators prior
to issuing the final format in order to obtain their input regarding
the best manner to summarize the information from the school food
authority level.
What Other Changes Are Being Made to the Rule?
In order to help reduce the burden on State agencies, and to allow
FNS to obtain the data in a timely and accurate form, State agencies
must submit a consolidated electronic file to FNS that transmits the
required verification information for all the school food authorities
under its administration. The proposed rule required school food
authorities to report certain verification information to the State
agency on a form designated by FNS. FNS will also develop a prototype
form, which specifies the data elements that must be collected from
each school food authority and reported to FNS. FNS will not provide a
mandatory form for school food authorities to report to their State
agencies. State agencies may adopt this prototype form, or may develop
their own paper or electronic reporting forms to collect this data from
school food authorities, as long as all required data elements are
collected from each school food authority. FNS will issue guidance for
State agencies on the requirements and procedures for collecting school
food authority data and transmitting it to FNS.
What Technical Amendment Is Included in This Rule?
On January 11, 2001, the Department issued an interim regulation
(66 FR 2195) to implement a provision of the Agricultural Risk
Protection Act of 2000, Public Law 106-224. An amendment to 7 CFR 245.2
in that regulation redesignated paragraph (a-3) ``Documentation'' as
paragraph (a-4) and added a new paragraph (a-3) ``Disclosure'' in its
place. The Department inadvertently neglected to amend sections 245.5
and 245.6 to remove the obsolete citation and add the new citation in
its place. This rule corrects that error.
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.
Regulatory Impact Analysis
A regulatory impact analysis of the rule identified that these
provisions will place a small additional burden on school food
authorities and State agency staff and budgets. However, the new effort
required will be an extension of existing reporting, record keeping,
analysis, and ameliorative action, therefore the budget cost of this
rule will be minimal. The analysis also indicated that reporting
activities for both school food authorities and State agencies would
improve understanding of certification problems. As a result of data
extraction activities, school food authorities may more closely
understand and utilize the data from the completed verification
activities. School food authorities will be more equipped to respond to
problems that they identify themselves through the reporting activity.
In addition, State agencies will be more equipped to provide technical
assistance to the school food authorities. The analysis indicated that
the data would help FNS to evaluate the efficacy of the existing
application and verification processes and alternatives to those
processes. Additional nationally representative data on the efficacy of
these processes are necessary to guide FNS policy concerning over-
certification.
Regulatory Flexibility Act
This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act (5 U.S.C. 601-612). Pursuant to that
review, Eric M. Bost, Under Secretary for Food, Nutrition, and Consumer
Services, has certified that this rule will not have a significant
economic impact on a substantial number of small entities. By requiring
the reporting of verification information, this rule would result in
critical information being gathered and enable State agencies and FNS
to take measures that would increase the level of accountability of the
NSLP. FNS does not anticipate any adverse fiscal impact resulting from
implementation of this rulemaking. Although there may be some burdens
associated with this rule, the burdens would not be significant and
would be outweighed by the benefits to programs reporting the
information to the State agency and FNS.
Public Law 104-4
Unfunded Mandate Reform Act of 1995 (UMRA) Title II of UMRA
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private
[[Page 53488]]
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. This rule is,
therefore, not subject to the requirements of sections 202 and 205 of
the UMRA.
Executive Order 12372
The National School Lunch Program and School Breakfast Program are
listed in the Catalog of Federal Domestic Assistance under No. 10.555
and 10.556. These programs are 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
notice at 48 FR 29115, June 24, 1983).
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under section (6)(b)(2)(B) of Executive Order 13132. The
Food and Nutrition Service (FNS) has considered the impact of this rule
on State and local governments and has determined that this rule does
not have Federalism implications. This rule does not impose substantial
or direct compliance costs on State and local governments. Therefore,
under Section 6(b) of the Executive Order, a federalism summary impact
statement is not required.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It 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 impede its full implementation. This rule
is not intended to have retroactive effect unless that is specified in
the Effective Date section of the preamble. Before any judicial
challenge to the provisions of this rule or the application of its
provisions, all administrative procedures that apply must be followed.
The only administrative appeal procedures relevant to this rule are the
hearings that schools must provide for decisions relating to
eligibility for free and reduced price meals (7 CFR 245.7 for the NSLP
and SBP, in schools).
Civil Rights Impact Analysis
Under USDA Regulation 4300-4, Civil Rights Impact Analysis, FNS has
reviewed this final rule to identify and address any major civil rights
impacts the final rule might have on minorities, women, and persons
with disabilities. After a careful review of the rule's intent and
provisions, FNS has determined that this final rule will not in any way
limit or reduce participants ability to participate in the Child
Nutrition Programs on the basis of an individual's or group's race,
color, national origin, sex, age, or disability. FNS found no factors
that would negatively and disproportionately affect any group of
individuals.
Paperwork Reduction Act of 1995
The information collection burden for the general reporting
requirements in place prior to this rule are approved under OMB Number
0584-0026. This rule contains burdens that were included in the burden
estimate in the proposed rule, Determining Eligibility for Free and
Reduced Price Meals in Schools--Verification Reporting and
Recordkeeping Requirements, published on August 9, 2002 at 67 FR 51779.
In accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 3507,
the information reporting and recordkeeping requirements included in
the proposed rule outlined the changes in the information collection
burden. OMB accepted public comments on FNS' estimated reporting and
recordkeeping burden. Commenters indicated that the proposed reporting
and recordkeeping requirements are too burdensome and the proposed
estimated annual reporting and recordkeeping burden hours under the
Paperwork Reduction Act of 1995 are too low. We have reviewed the
burden hours and have adjusted the estimate to account for the fact
that there will be a significant disparity in the amount of time
required to report the data elements based on the size of the school
food authority. We have taken these different circumstances into
consideration and have adjusted the burden hours as follows: School
food authorities average burden hours have been increased from 16,342
to 32,684, an average of 2 hours per school food authority. State
agency average burden hours are increased per response from 8 to 24.
This results in an increase of the total annual burden hours from 432
to 1296 for State agencies. FNS is requesting approval of the data
collection instruments from OMB in the near future. Implementation of
the data collection elements of the rule is contingent upon OMB
approval under the Paperwork Reduction Act.
Estimated Annual Reporting Burden
----------------------------------------------------------------------------------------------------------------
Annual number Annual Average burden Annual burden
Section of respondents frequency per response hours
----------------------------------------------------------------------------------------------------------------
School food authorities report verification information to State agency
----------------------------------------------------------------------------------------------------------------
Existing........................ .............. 0 0 0 0
Proposed........................ 245.6a(c) 16,342 1 2 hours 32,684
Total Reporting Burden:
Total Existing.............. 0
Total Proposed.............. 24,513
Change.......................... +24,513
---------------------------------
[[Page 53489]]
State agencies report district level data to FNS
----------------------------------------------------------------------------------------------------------------
Existing........................ .............. 0 0 0 0
Proposed........................ 245.11(i) 54 1 24 hours 1,296
Total Reporting Burden:
Total Existing.............. 0
Total Proposed.............. 1,296
Change.......................... +1,296
----------------------------------------------------------------------------------------------------------------
Estimated Annual Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
Annual number Annual Average burden Annual burden
Section of respondents frequency per response hours
----------------------------------------------------------------------------------------------------------------
School food authorities maintain summary of verification efforts
----------------------------------------------------------------------------------------------------------------
Existing........................ 245.6a(c) 16,342 1 .75 12,256
Proposed........................ 245.6a(c) 16,342 1 .85 13,891
Total Recordkeeping Burden:
Total Existing.............. 12,256
Total Proposed.............. 13,891
Change.......................... +1,635
---------------------------------
State agencies retain district level data
----------------------------------------------------------------------------------------------------------------
Existing........................ .............. 0 0 0 0
Proposed........................ 245.11(i) 54 1 1 54
Total Recordkeeping Burden:
Total Existing.............. 0
Total Proposed.............. 54
Change.......................... +54
----------------------------------------------------------------------------------------------------------------
Government Paperwork Elimination Act (GPEA)
In compliance with GPEA, 44 U.S.C. 3504, the Food and Nutrition
Service is committed to implementing electronic reporting and
recordkeeping processes whenever it is feasible to help minimize
information collection burdens on the public. The required data
elements will be specified by FNS. State agencies may develop paper or
electronic reporting forms to collect this data from school food
authorities, as long as all required data elements are collected from
each school food authority.
List of Subjects in 7 CFR Part 245
Food assistance programs, Grant programs-education, Civil rights,
Food and Nutrition Service, Grant programs-health, Infants and
children, Milk, Reporting and recordkeeping requirements, School
breakfast and lunch programs.
0
Accordingly, 7 CFR Part 245 is amended as follows:
PART 245--DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS
AND FREE MILK IN SCHOOLS
0
1. The authority citation continues to read as follows:
Authority: 42 U.S.C. 1752, 1758, 1759a, 1772, 1773, and 1779.
0
2. In Sec. 245.2:
0
a. Redesignate paragraph (c) as paragraph (b-3);
0
b. Redesignate paragraph (b-2) as paragraph (c); and
0
c. Add a new paragraph (b-2) to read as follows:
Sec. 245.2 Definitions.
* * * * *
(b-2) FNS means the Food and Nutrition Service, United States
Department of Agriculture.
* * * * *
Sec. 245.5 [Amended]
0
3. In Sec. 245.5:
0
a. Remove the citation ``Sec. 245.2(a-3)'' in paragraph (a)(1)(iii)
and add the citation ``Sec. 245.2(a-4)(1)(i)'' in its place; and
0
b. Remove the citation ``Sec. 245.2(a-3)'' in paragraph (a)(1)(iv) and
add the citation ``Sec. 245.2(a-4)(1)(ii)'' in its place.
Sec. 245.6 [Amended]
0
4. In Sec. 245.6:
0
a. Remove the citation ``Sec. 245.2(a-3)(2)'' in paragraph (b) and add
the citation ``Sec. 245.2(a-4)(2)'' in its place; and
0
b. Remove the citations ``Sec. 245.2(a-3)(1)(i),'' ``Sec. 245.2(a-
3)(1)(ii),'' and ``Sec. 245.2(a-3)(2)'' in paragraph (c) introductory
text and add the citations ``Sec. 245.2(a-4)(1)(i),'' ``Sec. 245.2(a-
4)(1)(ii),'' and ``Sec. 245.2(a-4)(2),'' respectively, in their
places.
0
5. In Sec. 245.6a, revise paragraph (c) to read as follows:
Sec. 245.6a Verification requirements.
* * * * *
(c) Verification reporting and recordkeeping requirements. No later
than March 1, 2005 and by March 1st each year thereafter, each school
food authority must report information related to its annual
verification activity to the State agency in accordance with guidelines
provided by FNS. These required data elements will be specified by FNS.
Contingent upon new funding
[[Page 53490]]
to support this purpose, FNS will also require each school food
authority to collect and report the number of students who were
terminated as a result of verification but who were reinstated as of
February 15th. The first report containing this data element would be
required in the school year beginning July 1, 2005 and each school year
thereafter. State agencies may develop paper or electronic reporting
forms to collect this data from school food authorities, as long as all
required data elements are collected from each school food authority.
School food authorities shall retain copies of the information reported
under this section and all supporting documents for a minimum of 3
years. All verified applications must be readily retrievable on an
individual school basis and include all documents submitted by the
household for the purpose of confirming eligibility, reproductions of
those documents, or annotations made by the determining official which
indicate which documents were submitted by the household and the date
of submission. All relevant correspondence between the households
selected for verification and the school or school food authority must
be retained. School food authorities are encouraged to collect and
report any or all verification data elements before the required dates.
* * * * *
0
4. In Sec. 245.11, add a new paragraph (i) to read as follows:
Sec. 245.11 Action by State agencies and FNSROs.
* * * * *
(i) No later than March 1, 2005 and by March 1st each year
thereafter, each State agency must collect annual verification data
from each school food authority as described in Sec. 245.6a(c) and in
accordance with guidelines provided by FNS. Each State agency must
analyze these data, determine if there are potential problems, and
formulate corrective actions and technical assistance activities that
will support the objective of certifying only those children eligible
for free or reduced price meals. No later than April 15, 2005 and by
April 15 each year thereafter, each State agency must report to FNS the
verification information in a consolidated electronic file that has
been reported to it as required under Sec. 245.6a(c), by school food
authority, and any ameliorative actions the State agency has taken or
intends to take in school food authorities with high levels of
applications changed due to verification. Contingent upon new funding
to support this purpose, FNS will also require each State agency to
report the aggregate number of students who were terminated as a result
of verification but who were reinstated as of February 15th. The first
report containing this data element would be required in the school
year beginning July 1, 2005 and each school year thereafter. State
agencies are encouraged to collect and report any or all verification
data elements before the required dates.
Dated: September 5, 2003.
Eric M. Bost,
Under Secretary, Food, Nutrition and Consumer Service.
[FR Doc. 03-23190 Filed 9-10-03; 8:45 am]
BILLING CODE 3410-30-U