5 U.S.C. 301; 7 U.S.C. 612c, 612c note, 1431, 1431b, 1431e, 1431 note, 1446a-1, 1859, 2014, 2025; 15 U.S.C. 713c; 22 U.S.C. 1922; 42 U.S.C. 1751, 1755, 1758, 1760, 1761, 1762a, 1766, 3030a, 5179, 5180.
This part prescribes the terms and conditions under which donated foods may be obtained from the Department by Federal, State and private agencies for use in any State in child nutrition programs, nonprofit summer camps for children, charitable institutions, nutrition programs for the elderly, the Commodity Supplemental Food Program, the Special Supplemental Nutrition Program for Women, Infants, and Children, the Food Distribution Programs on Indian Reservations and the assistance of needy persons.
(a)
(b)
(c)
(a) A nonpenal, noneducational public (Federal, State or local) institution,
(b) A nonprofit, tax exempt, private hospital, or
(c) Any other nonprofit, noneducational, tax exempt private institution, including hospitals and facilities caring for needy infants and children, organized to provide charitable or public welfare services in the same place without marked changes and, at the Department's option, approved by a public welfare agency as meeting a definite need in the community by administering to needy persons, and provides a meal service on a regular basis. Charitable institutions include any institution defined as “service institution”; “nonresidential child care institution”; or “school” which is not a commodity school or does not participate in a child nutrition program. For purposes of this paragraph, tax exempt shall mean exempt from income tax under the Internal Revenue Code, as amended, and a charitable institution shall be considered “noneducational” even though educational courses are given, where such courses are incidental to the primary purpose of the charitable institution.
(b) Any other occasion or instance for which, in the determination of the President, Federal assistance is needed to supplement State and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat
(a) The applicable grading branches of the Department's Agricultural Marketing Service (AMS),
(b) The Department's Federal Grain Inspection Service, and
(c) The National Marine Fisheries Service of the U.S. Department of Commerce.
(a) A processor which has entered into a processing contract with contracting agencies in more than one State, or
(b) A processor which has entered into a processing contract with one or more contracting agencies located in a State other than the one in which either the processor's plant or business office is located.
(a) Persons provided service by charitable institutions, who, because of their economic status, are in need of food assistance,
(b) All the members of a household who are certified as in need of food assistance, and
(c) Disaster victims.
(a) The conversion of a donated food or donated foods into a different end product or
(b) The repackaging of a donated food or donated foods.
(b) Any public or nonprofit private classes of preprimary grade when they are conducted in those schools defined in paragraph (a) of this definition having classes of primary or of higher grade;
(c) Any public or nonprofit private residential child care institution, or distinct part of such institution, which operates principally for the care of children, and if private, is licensed to provide residential child care services under the appropriate licensing code by the State or a subordinate level of government,
(d) With respect to the Commonwealth of Puerto Rico, nonprofit child care centers certified as such by the Governor of Puerto Rico.
(b) Any other situation not declared by the President to be a disaster, but which, in the judgment of FCS, warrants the use of USDA commodities for congregate feeding or household distribution.
(a) The State agency that has been designated by the Governor and approved by the United States Department of Health and Human Services (DHHS) to administer nutrition programs for the elderly under title III of the Older Americans Act of 1965, as amended or
(b) The Indian tribal organization which has been approved by DHHS to administer nutrition programs for the elderly under title VI of such act.
(a) The replacement of donated foods with like quantities of domestically produced commercial foods of the same generic identity and of equal or better quality (i.e. cheddar cheese for cheddar cheese, nonfat dry milk for nonfat dry milk, etc.); or
(b) In the case of donated nonfat dry milk, substitution as defined under (a) of this definition or replacement with an equivalent amount, based on milk solids content, of domestically produced concentrated skim milk.
(a)
(b)
(c)
(a)
(1) Verify that recipient agencies registered to participate in the National Commodity Processing (NCP) Program have a current agreement with the distributing agency to receive donated food in accordance with § 252.1(c) and
(2) Report the results of such verification to FCS within timeframes determined by FCS.
(b)
(a)
(b)
(1) The distribution and use of donated foods is in accordance with this part,
(2) Subdistributing agencies, recipient agencies, warehouses, carriers, or other persons to whom donated foods are delivered by the distributing agency are responsible to the distributing agency for any improper distribution or use of donated foods or for any loss of, or damage to, donated foods caused by their fault or negligence,
(3) Subdistributing agencies and recipient agencies have and preserve a right to assert claims against other persons to whom donated foods are delivered for care, handling or distribution, and
(4) Subdistributing agencies and recipient agencies will take action to obtain restitution in connection with claims for improper distribution, use or loss of, or damage to, donated foods.
(c)
(2)
(3)
(d)
(e)
(f)
(a)
(ii) Donated foods shall not be sold, exchanged or otherwise disposed of without the approval of the Department.
(iii) Donated foods which are provided as part of an approved food package or authorized level of assistance may be transferred between like recipient agencies only with prior authorization of the distributing agency. Donated foods which are provided in addition to the State's authorized level of assistance may be transferred between recipient agencies which are eligible to receive such foods with the prior authorization of the distributing agency. However, the transfer of donated foods between unlike recipient agencies (e.g., from schools to charitable institutions), which have been provided as part of an approved food package or authorized level of assistance, must be approved by the appropriate FCSRO.
(iv) Food donated under section 32 of Public Law 74-320 (7 U.S.C. 612c) may also be transferred by recipient agencies to emergency feeding organizations which are distributing donated foods under part 251 of this chapter. A transfer between recipient agencies and emergency feeding organizations may be made only with the prior approval of the distributing agency and the State agency responsible for administering TEFAP.
(v) All transfers of donated foods shall be documented. Such documentation shall be maintained in accordance with the recordkeeping requirements in §§ 250.16 and 251.10(a) of this chapter.
(2)
(ii) Donated foods shall be requested and distributed only in quantities which can be consumed without waste in providing food assistance for persons eligible under this part. Distributing agencies shall impose similar restrictions on recipient agencies.
(3)
(4)
When a commodity is available in limited quantities, the Department shall allocate such commodities among the States using allocation percentages which are based on appropriate participation data for the program designated to receive the commodity.
(5)
(6)
(i) General USDA purchase information at least quarterly;
(ii) Anticipated State delivery schedules at least quarterly, including the types and quantities of commodities available; and
(iii) Changes in delivery schedules when such changes affect the recipient agency.
(7)
(b)
(c)
(d)
(i) Such other persons are common beneficiaries with the eligible persons of the program of the recipient agency, or
(ii) Such other persons are few in number compared to the eligible persons and receive their meals as an incident of their service to the eligible persons.
(2)
(e)
(2) In instances when it is determined by a distributing agency that a claim exists against a subdistributing agency, recipient agency, warehouse, carrier, processor or other person, the distributing agency shall pursue claims in accordance with § 250.15(c).
(f)
(1) Sold in a manner prescribed by the Department with the net proceeds thereof remitted to the Department;
(2) Sold in a manner prescribed by the Department with the proceeds thereof retained for use in accordance with the provisions of § 250.15(f);
(3) Used in such manner as will serve a useful purpose as determined by the Department; or
(4) Destroyed in accordance with applicable sanitation laws and regulations.
(g)
(i) The distributing agency documents that the donated foods were stale, spoiled, out of condition or not in compliance with USDA specifications at the time they were delivered by the Department;
(ii) The donated foods have been provided as part of the State's authorized level of assistance (entitlement) as established by law; or, when the donated foods have been provided in addition to the State's entitlement, but the total amount of the specific donated food which the distributing agency can order is limited by the Department;
(iii) The loss is reported to the FCSRO within three months of the date the donated foods were received in the State, except that for canned commodities the reporting deadline shall be six months after receipt;
(iv) A signed consignee receipt or acceptable written documentation of delivery is submitted to the FCSRO; and
(v) At the request of the Department, the product has been reinspected and has been determined to be stale, spoiled, out of condition or not in compliance with USDA specifications.
(2) In instances in which a recipient agency seeks replacement of donated
(3) Replacement by the vendor shall be made with either the same or similar food agreed to by the Department. Physical replacement shall be on a per-pound or per-case basis. In rare instances, and only with the approval of the Department, distributing agency and recipient agency, vendor replacement will be made with a cash payment to the recipient or distributing agency. Any such cash payments shall be used to purchase replacement commodities which are the same or similar to the original commodities. Cash payments shall be made on the basis of the dollar value established by the Department of the donated food at the time the product was delivered or the cost to the Department for replacement, whichever is higher.
(4) Replacement by the Department shall be with either the same or similar food or by crediting the State's entitlement or cap. Physical replacement shall be on a per-pound or per-case basis. Entitlement or cap crediting shall be equal to the dollar value or the number of pounds which was deducted from the State's entitlement or cap for that shipment. The Department shall arrange for delivery of the replacement donated foods when the quantities to be delivered are sufficient to make it cost effective. Once the Department has replaced the donated foods, the distributing agency shall make arrangements for providing replacement donated foods to the recipient agency which incurred the loss.
(5) In instances in which it is determined that the donated foods were in good condition at the time they were delivered by the Department, the cost of the reinspection shall be borne by the distributing agency and the distributing agency shall follow the claims procedures contained in § 250.15(c) of this part and FCS Instruction 410-1, Non-Audit Claims—FCS Distribution Program.
(h)
(i)
(j)
(k)
(1)
(i) The types and forms of donated foods that are most useful to recipients;
(ii) Commodity specification recommendations; and
(iii) Requests for options regarding package sizes and forms of commodities.
(2)
(3)
(a)
(2)
(3)
(i) A description of the principal warehousing/delivery techniques used by the distributing agency. The description should include:
(A) The frequency of delivery available;
(B) The timeframes for making deliveries;
(C) The type of delivery service offered (to the loading dock or placement in the storeroom); and
(D) The system for recipient agencies to order specific amounts of food from available inventory; and
(ii) An estimate of all costs that will be incurred in administering the Food Distribution Program for the upcoming school year. These costs include transportation, storage and handling of donated foods (if the current distributing agency system does not include delivery to recipient agencies, identification of costs incurred by recipient agencies to pick up commodities at a warehouse and to deliver the food to a centralized storage facility or the individual preparation sites), salaries of persons directly connected with the administration of the program and other
(4)
(i) The cost comparison shall be made between the cost of providing a basic level of service under its current system and the cost of obtaining an equivalent level of service from commercial facilities. This basic level of service shall consist of the transportation, storage and handling of donated food from the time of delivery by the Department to a distributing agency until delivery to a recipient agency's centralized storage facility or individual preparation sites and shall include monthly deliveries of donated food to all recipient agencies except those that have agreed to less frequent deliveries.
(ii) A distributing agency may base its cost comparison on a level of service in excess of the basic level and/or on services not currently provided. In all cases, the comparison must be made on the costs of providing a comparable level of service under the existing system (as identified in § 250.14(a)(2)) versus a commercial system.
(iii) If a distributing agency is unable to locate any commercial facilities expressing interest in providing the basic level of warehousing and distribution services, the distributing agency shall indicate this in its cost comparison submission, together with documentation of its efforts to obtain cost estimates from commercial facilities.
(iv) All initial data regarding the cost of the current warehousing and distribution system and the cost for comparable commercial facilities shall be submitted to the FCSRO by June 30, 1990. Subsequent cost comparisons shall, at a minimum, be submitted to FCS once every three years by March 31.
(5)
(6)
(A) The date of submission of evaluation and cost comparison data indicating that a commercial system is more cost effective and efficient (if no request for approval of an alternate system is made); or
(B) The date of the denial of a request to use an alternative system.
(ii) If at any time FCS determines that the warehousing and distribution system in place is not cost effective or efficient, the distributing agency will be required to reevaluate its system (including a cost comparison and request for continued approval to use an alternative system) in accordance with this subsection within 90 days of notification by the FCSRO.
(7)
(b)
(1) Are sanitary and free from rodent, bird, insect and other animal infestation;
(2) Safeguard against theft, spoilage and other loss;
(3) Maintain foods at proper storage temperatures;
(4) Stock and space foods in a manner so that USDA-donated foods are readily identified;
(5) Store donated food off the floor in a manner to allow for adequate ventilation; and
(6) Take other protective measures as may be necessary.
(c)
(d)
(1) Assurance that the storage facilities will be maintained in accordance with the standards specified in paragraph (b) of this section;
(2) Evidence that donated food shall be clearly identified;
(3) Assurance that an inventory system shall be maintained and an annual physical inventory will be conducted; and reconciled with the inventory records;
(4) Beginning and ending dates of the contract;
(5) A provision for immediate termination of the contract due to noncompliance on the part of the warehouse management;
(6) A provision allowing for termination of the contract for cause by either party upon 30 days written notification;
(7) The amount of any insurance coverage, which has been purchased to protect the value of food items which are being stored; and
(8) Express written consent for inspection and inventory by the distributing agency, subdistributing agency, recipient agency, the Comptroller General, the Department or any of their duly authorized representatives.
(e)
(f)
(i) The rate of distribution;
(ii) Anticipated distribution; and
(iii) Other concerns such as logistical and economic considerations.
(2) In no case may the inventory level of each donated food in storage exceed a six-month supply unless sufficient justification for additional inventory has been submitted and approved. Subdistributing agencies and recipient agencies shall submit justification to the distributing agency in instances where more than a six-month inventory is needed. Justification shall be submitted by the distributing agency to the FCSRO for approval in instances where more than a six-month inventory is needed at the distributing agency level.
(3) The distributing agency shall take corrective action to ensure that excess inventories at all levels are eliminated and shall document actions taken to reduce excessive inventories.
(a)
(i) Distributing and subdistributing agencies assessing distribution charges shall submit a description of their system with all data used in calculating the rate to be used for the upcoming school year to the FCSRO for approval. The initial description and data shall be submitted by June 30, 1990. Updates to this information shall, at a minimum, be submitted to the FCSRO for approval every three years by March 31.
(ii) At least 90 days before increasing distribution charges beyond normal inflation, the distributing/subdistributing agency shall submit to the FCSRO a description of the change together with all data used to calculate the change. FCS will take action on the proposed increase in accordance with paragraph (a)(1)(v) of this section.
(iii) Allowable costs include but are not limited to those program costs referenced in paragraph (f)(2) of this section, i.e. transportation, storage and handling of donated foods, salaries of persons directly connected with the administration of the program and other program related expenses. Examples of other program related expenses are administrative costs such as fringe benefits, travel expenses, rent, utilities, accounting/auditing services, computer services, and the costs of providing program services to recipient agencies such as the cost for administering and monitoring the State's processing program, and technical assistance workshops.
(iv) Distribution charges shall not be assessed for costs which would be unallowable under the Cost Principles in the Department's Uniform Federal Assistance Regulations, 7 CFR part 3015, subpart T. In no case may distribution charges be assessed for costs which are paid for by State Administrative Expense (SAE) funds, State or local appropriated funds or any other funds available to the distributing or subdistributing agency to administer the program. Distribution charges shall not be based on a percentage of the value of the commodities distributed.
(v) FCS shall review the information and inform the distributing agency of the appropriateness of its distribution charges. If it is determined that a distributing agency's proposed distribution charges are excessive or incorporate inappropriate costs, the distributing/subdistributing agency will be required to adjust the distribution charges to reflect an appropriate level or submit further justification sufficient to satisfy the FCSRO that the proposed distribution charges are essential to cover allowable costs and services. This further justification
(vi) Distribution charges, including any excess distribution charges which may accrue (as defined in paragraph (f)(4) of this section) shall be used in accordance with provisions of paragraph (f) of this section.
(2) Whenever a commodity is donated to a State without charge or credit against entitlement, recipient agencies may not be assessed for any part of the intrastate costs of storage and transportation of such commodity that is in excess of the distributing or subdistributing agency's direct costs for such storage and transportation minus any amount that the Department provides to the State to pay such costs under part 251 of this chapter.
(3) Under no circumstances shall recipients be required to make any payments in money, materials, or services for or in connection with the receipt of donated foods, nor shall voluntary contributions be solicited (except for the nutrition programs for the elderly) in connection with the receipt of donated foods for any purpose.
(b)
(c)
(1) Replace the donated food in its distribution program in kind, or, in the case of section 6 donated foods, where replacement in kind may not be practicable, with other similar foods, or
(2) Pay to the Department the value of the donated food as determined by the Department.
(d)
(e)
(f)
(2)
(i) Bad debts;
(ii) Contingencies;
(iii) Contributions and donations;
(iv) Entertainment;
(v) Fines and penalties;
(vi) Governor's expenses;
(vii) Interest and other financial costs;
(viii) Legislative expenses; and
(ix) Losses on other grants.
(3)
(4)
(a)
(i) End products processed from donated foods and
(ii) The determination made as to liability for any improper distribution, use of, loss of, or damage to, such foods and the results obtained from the pursuit of claims by the distributing agency.
(2) Distributing agencies shall require all subdistributing and recipient agencies to maintain accurate and complete records with respect to the receipt, distribution/disposal and inventory of donated foods, including end products processed from donated foods, and with respect to any funds which arise from the operation of the distribution program, including refunds made to recipient agencies by processors in accordance with § 250.30(k).
(3) Unless a distributing agency maintains an offer-and-acceptance system in accordance with § 250.48(e), the distributing agency shall maintain accurate and complete records with respect to amounts and value of commodities refused by school food authorities. School food authorities shall also be required to maintain such records of refusals.
(4) Each processor, food service management company, warehouse, or other entity which contracts with a distributing agency, subdistributing agency or recipient agency shall be required to keep accurate and complete records with respect to the receipt, distribution/disposal, storage and inventory of such foods similar to those required of distributing agencies under this paragraph. Where donated foods have been commingled with commercial foods, the processor shall maintain records which permit an accurate determination of the donated-food inventory. The processor shall also be required to keep formula, recipes, daily or batch production records, loadout sheets, bills of
(5) All recipient agencies shall be required to keep accurate and complete records showing the data and method used to determine the number of eligible persons served by that agency.
(6) Failure by a distributing agency, subdistributing agency, recipient agency, processor, food service management company, warehouse or other entity to maintain records required by this Section shall be considered prima facie evidence of improper distribution or loss of donated foods and the agency, processor or entity shall be subject to the provisions of § 250.13(e).
(b)
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(2) Audits shall be conducted in accordance with the auditing provisions set forth under the Uniform Federal Assistance Regulations (7 CFR part 3015, subpart I) and the FCS Audit Guide for Multi-State Processors. At the discretion of FCS, auditors will be required to attend training sessions conducted by the Department.
(3) The costs of the audits, including those costs associated with training, shall be borne by the processors.
(4) Audit findings relative to those elements associated with the processing of donated food shall be submitted to the processor and to FCS concurrently.
(5) Noncompliance with the audit requirements in paragraph (b)(1) of this section will render the processor ineligible to enter into another processing contract with any contracting agency until the required audit has been conducted and deficiencies corrected.
(6)
(i) Corrective action which has already been taken to eliminate the deficiency;
(ii) Corrective action which the processor proposes to take to eliminate the deficiency;
(iii) The timeframes for the implementation and completion of the corrective action;
(iv) A determination of what caused the deficiency; and
(v) Deficiencies which have been identified that the processor takes exception to and an explanation for the exception.
(a)
(b)
(i) An on-site review of all nutrition programs for the elderly under agreement in accordance with § 250.12(b), at least once every four years, with not fewer than 25 percent of these programs being reviewed each year. These reviews shall also include on-site reviews of the storage facilities of sites receiving donated foods to ensure compliance with § 250.14(b);
(ii) An on-site review of all charitable institutions and nonprofit summer camps for children under agreement in accordance with § 250.12(b), and the food service management companies under contract with these recipient agencies in accordance with § 250.12(d), at a minimum, whenever the distributing agency identifies actual or probable deficiencies in program administration, including compliance with civil rights provisions, through audits, investigations of complaints, reports submitted by recipient agencies, or any other information available to the State agency which, at the discretion of the State agency, warrants an on-site review, or at the request of FCS;
(iii) An on-site review at least once every 2 years of all processors except those that are multi-State processors as defined in § 250.3, with no fewer than 50 percent being reviewed each year;
(iv) An annual on-site review of each storage facility utilized by the distributing agency. On-site reviews conducted by FCS may be considered as contributing to the fulfillment of the minimum coverage required by this paragraph; and
(v) A biennial review of all food service management companies under contract with recipient agencies in accordance with § 250.12(d), except that:
(A) Food service management companies under contract with charitable institutions and nonprofit summer camps for children shall be reviewed in accordance with paragraph (b)(1)(ii) of this section; and,
(B) Food service management companies under contract with schools participating in the National School Lunch Program or commodity schools under part 210 of this chapter, or with schools participating in the School Breakfast Program under part 220 of this chapter, shall be reviewed in accordance with the provisions set forth in parts 210 and 220.
(2) Each distributing agency shall design and implement a system to verify sales of end products to all recipient agencies under that distributing agency's authority in instances when a processor transfers end products to a distributor and the distributor sells the end product to the recipient agencies at a discount and the distributor receives a refund from the processor. At a minimum, such a system must:
(i) At a minimum, provide for a semi-annual review of a statistically valid sample of sales for the previous six-month period for all processors which contract with the distributing agency or contracting agencies under the authority of the distributing agency, including multi-State processors. The sample size must ensure a 95 percent confidence level;
(ii) Support the projection of a claim against the processor when, in the review of the sample, it is determined that the value of donated foods has not been passed on to recipient agencies or when end products have been improperly distributed; and
(iii) Provide for the assessment of claims against the processor in accordance with FCS Instruction 410-1, Non-Audit Claims, Food Distribution Program, in instances when deficiences have been identified.
(iv) Provide for the adjustment of performance reports and processing inventory reports to refect any invalid sales;
(v) Provide for the development and submission by processors to the distributing agency of a corrective action plan designed to correct problems identified during the sales verification; and
(vi) In instances in which the distributing agency has delegated the responsibility of sales verification to processors, the distributing agency must:
(A) Establish guidelines which ensure that the criteria contained in paragraphs (b)(2)(i)-(v) are met;
(B) Ensure that processors report their findings to the distributing agency on a semi-annaul basis in accordance with § 250.30(m);
(C) Review the processor's findings and select a random sub-sample of at least 10 percent of all sales verified by the processor and reverify the sale by contacting the recipient agency by telephone or through written correspondence; and
(D) Submit a copy of the processor's review report and findings and the results of the reverification efforts to the appropriate FCSRO. In instances of
(3) The distributing agency shall submit a report of review findings to each entity reviewed. The report shall include:
(i) Each deficiency found;
(ii) The factors contributing to each deficiency;
(iii) Recommendations for needed corrective action, including timetables for completion and/or claims action to be pursued, if any; and
(iv) Provisions for evaluating effectiveness of corrective actions.
(4) Distributing agencies shall monitor progress toward completion and the effectiveness of corrective actions taken in eliminating program deficiences.
(5) In addition to the review requirements of paragraph (b)(1) of this section, each distributing agency shall make a continuing evaluation of all recipient agencies, and processors by monitoring performance reports, food requests, participation data, and data regarding refunds and discounts to recipient agencies and distributors for the receipt of end products.
(6) Distributing agencies shall, where applicable, require that subdistributing agencies monitor and review their operations in accordance with this paragraph.
(c)
(d)
Any distributing agency which has failed to comply with the provisions of this part or any instructions or procedures issued in connection with it or any agreements entered into pursuant to it, may, at the discretion of the Department, be disqualified from further participation in any distribution program. Reinstatement may be made at the option of the Department. Disqualification shall not prevent the Department from taking other action through other available means when considered necessary, including prosecution under applicable Federal statutes.
Distributing agencies, subdistributing agencies and recipient agencies shall comply with the Department's nondiscrimination regulations (7 CFR parts 15, 15a, and 15b) and the FCS civil rights instructions to ensure that in the operation of the program no person is discriminated against because of race, color, national origin, age, sex or handicap.
Distributing agencies shall investigate promptly complaints received in connection with the distribution or use of donated foods. Irregularities which are disclosed shall be corrected immediately. Serious irregularities shall be promptly reported to the Department. Distributing agencies shall maintain or
(a)
(1) An unmanufactured food product produced in the U.S.; or
(2) A food product that is manufactured in the U.S.
(b)
This section establishes basic performance standards which must be followed by distributing agencies responsible for intrastate distribution of donated commodities and products. The seven standards address the level of service that shall be provided to recipient agencies. The basic standards include the following:
(a)
(b)
(1) Current program regulations,
(2) Summaries of commodity specifications upon request (§ 250.13(j)) and commodity fact sheets,
(3) Results of any test evaluations and surveys,
(4) Advisory council membership recommendations,
(5) Recipes, and
(6) Written procedures for ordering commodities, handling commodities which are stale, spoiled, out-of-condition or not in compliance with specifications (including procedures for replacement by the Department under § 250.13(g)), submitting complaints and other written policy which affects program operations.
(c)
(d)
(1) Obtaining and utilizing commodity acceptability information in accordance with § 250.13(k);
(2) Providing recipient agencies with information regarding commodity availability;
(3) Providing recipient agencies with information regarding commodity assistance levels;
(4) Ordering and allocating donated food based on participation data for those programs which serve meals;
(5) Ensuring the availability of commodities, to the extent possible, in quantities requested and at times specified by recipient agencies;
(6) Permitting recipient agencies to refuse all or a portion of a commodity prior to delivery to the distributing agency if time permits;
(7) Permitting recipient agencies to change orders for Group B (grain, dairy, peanut and oil products) and unlimited bonus commodities prior to submission of an order to the Department;
(8) Providing recipient agencies with ordering options and commodity values (§ 250.13(a)(5));
(9) Offering schools participating in the National School Lunch Program the per meal value of donated food in accordance with § 250.48(c); and
(10) Consider the preparation and storage capabilities of recipient agencies when ordering donated food, including capabilities of such agencies to handle commodity product forms, quantity, packaging and quantities.
(e)
(1) Work with recipient agencies capable of receiving direct shipments to order donated food directly into their warehouses;
(2) Solicit information and recommendations regarding the individual delivery needs of recipient agencies;
(3) Maintain distribution schedules which are equitable and reliable, recognize hours of operation, holidays and vacations and other special needs of recipient agencies;
(4) And make donated food available at least monthly to all recipient agencies except those that have agreed to less frequent deliveries (§ 250.13(a)(6)); however, the distributing agency shall not be held liable for delays in deliveries of donated food when such delays are due to late deliveries of donated food to the distributing agency by the Department.
(f)
(g)
(a)
(b)
(2) A distributing agency or subdistributing agency may contract for processing on behalf of one or more recipient agencies. All recipient agencies
(i) Processors shall utilize either a discount or a refund system as defined in § 250.3 when they sell end products directly to recipient agencies, or
(ii) When selling end products through a distributor, such sales shall be in accordance with paragraph (e) of this section.
(3) Distributing agencies shall permit subdistributing agencies and recipient agencies to enter into processing contracts with a processor under arrangements similar to those described in paragraph (b) (1) or (2) of this section.
(c)
(i) The nutritional contribution which the end product will provide;
(ii) The marketability of the end product;
(iii) The distribution method which the processor intends to utilize;
(iv) Price and yield schedule data;
(v) Any applicable labeling requirements; and
(vi) The ability of the processor to meet the terms and conditions set forth in the regulations.
(2) Standard form contracts shall be prepared or reviewed by the appropriate State legal staff to assure conformity with the requirements of these regulations and of applicable Federal, State and local laws.
(3) The contract shall be signed for the processor by the owner, a partner, or a corporate officer duly authorized to sign the contract, as follows:
(i) In a sole proprietorship, the owner shall sign the contract;
(ii) In a partnership, a partner shall sign the contract;
(iii) In a corporation, a duly authorized corporate officer shall sign the contract.
(4) At a minimum, each processing contract shall include:
(i) The names and telephone numbers of the contracting agency and processor;
(ii) A description of each end product, the quantity of each donated food and the identification of any other ingredient which is needed to yield a specific number of units of each end product (except that the contracting agency may permit the processor to specify the total quantity of any flavorings or seasonings which may be used without identifying the ingredients which are, or may be, components of flavorings or seasonings), the total weight of all ingredients in the batch formula, the yield factor for each donated food, and any pricing information provided by the processor in addition to that required in paragraph (c)(4)(iii) of this section as requested by the contracting agency and a thorough explanation of what this additional pricing information represents. The yield factor is the percentage of the donated food which must be returned in the end product to be distributed to eligible recipient agencies. For substitutable donated foods, at least 100 percent of the donated food provided to the processor must be physically contained in the end products with no allowable tolerance;
(iii) The contract value of each donated food to be processed and, where processing is to be performed only on a fee-for-service basis as defined in § 250.3, the fee-for-service;
(iv) A provision for:
(A) Termination of the contract upon thirty days written notice by the contracting agency or the processor and
(B) Immediate termination of the contract when there has been noncompliance with its terms and conditions by the contracting agency or the processor;
(v) In the event of contract termination, a provision for disposition of donated foods and end products in the processor's inventories or payment of funds in accordance with paragraph (j) of this section;
(vi) A provision for inspection and certification during processing, where applicable, by the appropriate acceptance service in accordance with paragraphs (g) and (h) of this section;
(vii) A provision that end products containing donated foods that are not substitutable under paragraph (f) of this section shall be delivered only to eligible recipient agencies and that end products containing both substitutable and non-substitutable donated foods may be delivered and sold in accordance with the requirements of paragraph (d) and (e) of this section;
(viii) Provisions that the processor shall:
(A) Fully account for all donated foods delivered into its possession by production and delivery to the contracting agency or eligible recipient agencies of an appropriate number of units of end products meeting the contract specifications, and where end products are sold through a distributor, that the processor remains full accountable for the donated foods until refunds or any other credits equal to their contracted value have been made to eligible recipient agencies in accordance with paragraph (k) of this section or to distributing agencies in accordance with paragraph (n)(2) of this section;
(B) Furnish to the contracting agency prior to the delivery of any donated foods for processing documentation that a performance supply and surety bond from a surety company listed in the most recent U.S. Department of Treasury Circular 570, an irrevocable letter of credit or an escrow account has been obtained in an amount that is sufficient to protect the contract value of all donated foods. Since the distributing agency is held liable by FCS for any donated foods provided to a processor the distributing agency shall determine the dollar value of the performance supply and surety bond, irrevocable letter of credit or the escrow account taking into consideration the
(
(
(
(C) Use or dispose of the containers in which donated foods are received from the Department in accordance with the instructions of the contracting agency;
(D) Apply as credit against the processing fee or return to the contracting agency and identify:
(
(
(E) Substitute donated foods with commercially purchased foods only in accordance with paragraph (f) of this section;
(F) Meet the requirements of paragraph (i) of this section for labeling end products;
(G) Maintain accurate and complete records pertaining to the receipt, disposal, and inventory of donated foods in accordance with § 250.16;
(H) Submit processing performance reports in accordance with paragraph (m) of this section; and
(I) Submit annual reconciliation reports and make payments to distributing agencies for any inventory remaining at the termination of the contract in accordance with paragraph (n)(3) of this section.
(ix) A provision that approval of the contract by distributing agency shall not obligate that agency or the Department to deliver donated foods for processing;
(x) A description of the processor's quality control system and assurance that an effective quality control system will be maintained for the duration of the contract;
(xi) In instances when the processor is a multi-State processor as defined in § 250.3, a provision that the processor agrees to obtain an independent audit by a certified public accountant in accordance with § 250.18(b);
(xii) A requirement that inventory drawdowns shall be limited to the actual amount of donated foods contained in the end product. Additional commodity required to account for production loss shall be obtained from non-donated foods;
(xiii) A provision that the fee-for-service or value pass-through system to be used for the sale of end products to recipient agencies shall be described and be consistent with paragraphs (d) and (e) of this section.
(xiv) In instances when the distributing agency has delegated the responsibility for sales verification for end products provided by a distributor to recipient agencies at a discount, assurance that the processor will submit sales verification data to the distributing agency in accordance with § 250.30(m)(l); and
(xv) A provision that the contracting agency shall give the processor a list of all recipient agencies eligible to purchase end products under the contract and provide updates for any changes which occur during the contract period.
(xvi) A provision that the processor shall not assign the processing contract or delegate any aspect of processing under a subcontract or other arrangement without the written consent of the contracting agency and the distributing agency.
(xvii) A provision that the processor shall provide pricing information summaries and updated pricing information summaries as required in paragraphs (d)(3) and (e)(2) of this section.
(xviii) A provision that the processor shall maintain documentation which demonstrates that the level of the processor's commercial production has not been reduced, as required in paragraph (f)(1)(iii) of this section.
(d)
(i) A refund system as defined in § 250.3 and in accordance with paragraph (k) of this section; or
(ii) A discount system which provides the price of each unit of end product purchased by eligible recipient agencies to be discounted by the stated contract value of the donated foods contained therein; or
(iii) An alternative value pass-through system under which the value of the donated food contained in each unit of end product shall be passed to
(2) When a processor delivers end products produced under a fee-for-service contract, the processor shall separately identify on the bill for the recipient agency the agreed-upon fee-for-service and any delivery costs.
(3) Processors shall provide pricing information summaries to contracting agencies and contracting agencies shall provide this information to recipient agencies as soon as possible after contract approval. If this pricing information changes during the contract period, processors shall provide updated pricing information to the contracting agency 30 days prior to the effective date of the change, which, in turn, shall provide this updated information to eligible recipient agencies.
(e)
(1) When a processor transfers end products to a distributor for delivery and sale to recipient agencies, such sales shall be under:
(i) A refund system as defined in § 250.3 and in accordance with paragraph (k) of this section; or
(ii) A hybrid system which provides a refund for the contract value of the donated food shall be provided to the distributor in accordance with paragraph (k) of this section and the price of each unit of end product purchased by eligible recipient agencies through a distributor shall be discounted by the contract value of the donated foods contained therein; or
(iii) An alternative value pass-through system under which the contract value of the donated food contained in each unit of end product shall be passed on to the recipient agency and which has been approved by FCS in accordance with paragraph (d)(1)(iii) of this section; or
(iv) When a processor arranges for delivery of processed end products produced under fee-for-service contracts by distributors, the products shall be delivered and invoiced using one of the following procedures:
(A) The recipient agency is billed by the processor for the fee-for-service and the distributor bills the recipient agency for the storage and delivery of the end products; or
(B) The processor arranges for the delivery of end products through a distributor on behalf of the recipient agency. In this system, the processor's invoice must include both the fee-for-service and the distributor's charges as separate, clearly identifiable charges.
(2) Processors shall provide pricing information summaries to contracting agencies and contracting agencies shall provide this information to recipient agencies as soon as possible after contract approval. If this pricing information changes during the contract period, the processor shall provide updated pricing information to the contracting agency, which, in turn, shall provide this information to the eligible recipient agencies.
(f)
(i) Only butter, cheese, corn grits, cornmeal, flour, macaroni, nonfat dry milk, peanut butter, peanut granules, roasted peanuts, rice, rolled oats, rolled wheat, shortening, vegetable oil, and spaghetti may be substitutable as defined in § 250.3 and such other food as FCS specifically approves as substitutable under paragraph (f)(4) of this section (substitution of meat and poultry items shall not be permitted),
(ii) All components of commercial foods substituted for those donated must be of U.S. origin and be identical
(iii) Processors shall maintain documentation that they have not reduced their level of commercial production because of participation in the State processing program.
(2) Documentation must be maintained by both parties in accordance with § 250.16. Where commercial food is authorized to be substituted for any donated food specifically listed in paragraph (f)(1)(i) of this section, the processor shall maintain records to substantiate that it continues to acquire on the commercial market sufficient purchases of substitutable food for commercial production and any amounts necessary to meet the 100 percent yield requirement. When there is substitution, the donated foods shall be used by the processor and shall not otherwise be sold or disposed of in bulk form. The applicable Federal acceptance service shall, upon request by the Department, the contracting agency or the distributing agency determine if the quality analysis meets the requirements set forth by the Agricultural Stabilization and Conservation Service (ASCS) in the original inspection of donated foods and, in the case of concentrated skim milk replacing donated nonfat dry milk, determine if the concentrated skim milk contains the amount of milk solids as specified in the contract. When donated foods are nonsubstitutable, the applicable Federal acceptance service shall ensure against unauthorized substitutions, and verify that quantities of donated foods used are as specified in the contract.
(3) When concentrated skim milk is used to replace donated nonfat dry milk, the contract shall also specify (in addition to the requirements in paragraph (c) of this section):
(i) The percent of milk solids that, at a minimum, must be contained in the concentrated skim milk;
(ii) The weight ratio of concentrated skim milk to donated nonfat dry milk;
(A) The weight ratio is the weight of concentrated skim milk which equals one pound of donated nonfat dry milk, based on milk solids;
(B) In calculating this weight, nonfat dry milk shall be considered as containing 96.5 percent milk solids;
(C) If more than one concentration of concentrated skim milk is to be used, a separate weight ratio must be specified for each concentration;
(iii) The processor's method of verifying that the milk solids content of the concentrated skim milk is as stated in the contract;
(iv) A requirement that inventory drawdowns of donated nonfat dry milk shall be limited to an amount equal to the amount of concentrated skim milk, based on the weight ratio, used to produce the end product;
(v) A requirement that the contract value of donated food for a given amount of concentrated skim milk used to produce an end product is the value of the equivalent amount of nonfat dry milk, based on the weight ratio of the two foods;
(vi) A requirement that the concentrated skim milk shall be produced in a USDA approved plant or in a plant approved by the appropriate regulatory authority for the processing of Grade A milk products; and
(vii) A requirement that documentation sufficient to substantiate compliance with the contract provisions shall be maintained in accordance with § 250.16(a)(4).
(4) Processor may request approval to substitute commercial foods for donated foods not specifically listed in paragraph (f)(1)(i) of this section by submitting such request to FCS in writing and satisfying all requirements of paragraphs (f)(1)(ii) and (iii) of this section. FCS will notify the processor in writing of authorization to substitute commercial foods for donated foods not listed in paragraph (f)(1)(i) of this section and such authorization shall apply for the duration of all current contracts entered into by the processor pursuant to this section.
(5) Title to the substituted food shall transfer to the contracting agency upon the initiation of the processing of the end product containing the substituted food. Title to the equivalent amount of donated food shall transfer
(g)
(1) That even with ample notification time, the processor cannot secure the services of a grader,
(2) That the cost for a grader would be unduly excessive relative to the value of foods being processed and that production runs cannot be combined or scheduled to enable prorating of the costs of services among the purchasers of end products, or
(3) The documented urgency of the recipient agency's need for the end product precludes the use of acceptance services.
(h)
(2) In the case of substitutable donated foods, in deciding whether to require acceptance and certification, the contracting agency should consider the dollar value of the donated foods delivered to the processor.
(3) When contracting agencies require certification in accordance with paragraph (h) (1) or (2) of this section, the degree of acceptance and certification necessary under the processing contract shall be determined by the appropriate Federal acceptance service after consultation with the distributing agency concerning the type and volume of the donated foods and anticipated value of end products to be processed. The cost of this service shall also be borne by the processor.
(i)
(2) Labels on all end products shall meet applicable Federal labeling requirements.
(3) When a processor makes any claim with regard to an end product's contribution toward meal requirements of any child nutrition program, the processor shall follow procedures established by FCS, the Food Safety and Inspection Service of the Department, the National Marine Fisheries Service of the U.S. Department of Commerce or other applicable Federal agencies for approval of such labels.
(j)
(i) With respect to nonsubstitutable commodities, the processor shall:
(A) Return the commodities to the contracting agency;
(B) Pay the contracting agency for the commodities based on the Department's replacement costs, determined by using the most recent data provided by the Department; or
(C) Pay the contracting agency for the commodities based on the contract value stated in the processor's contract;
(D) Pay the contracting agency the CCC unrestricted sales price;
(ii) With respect to substitutable commodities, the processor shall:
(A) With the concurrence of any affected contracting agencies, transfer the donated foods to the accounts of other contracting agencies with which the processor has contracts;
(B) Return the foods donated to the contracting agency;
(C) Replace the commodities with the same foods of equal or better quality as certified in accordance with paragraph (f)(2) of this section and deliver such foods to the contracting agency;
(D) Pay the contracting agency for the commodities based on the Department's replacement costs, determined by using the most recent data provided by the Department; or
(E) Pay the contracting agency for the commodities based on the contract value stated in the processor's contract.
(F) Pay the contracting agency the CCC unrestricted sales price.
(2) When a processor's contract is terminated at the processor's request or due to noncompliance or negligence on the part of the processor and commodities remaining in the processor's inventory are transported pursuant to paragraph (j)(1)(i)(A), (j)(1)(ii)(B) or (j)(1)(ii)(C) of this section, the processor shall pay the transportation costs.
(3) Funds received by distributing agencies upon termination of contracts shall be used in accordance with FCS Instruction 410-1, Non-Audit Claims, Food Distribution Program.
(k)
(2) In instances when refunds are to be provided to distributors which have sold end products to recipient agencies at a discount, distributors shall submit refund applications to processors within 30 days from the close of the month in which the sales were made of the date of sale to recipient agencies in order to receive benefits.
(3) Not later than 30 days after receipt of the application by the processor, the processor shall make a payment to the recipient agency or distributor equal to the stated contract value of the donated foods contained in the purchased end products covered by the refund application, except that processors may group together refund applications for a single recipient agency on a Federal fiscal quarterly basis if the total anticipated refund due that recipient agency during the quarter is 25 dollars or less. Copies of requests for refunds and payments to recipient agencies and/or distributors shall be forwarded to the appropriate distributing agency by the processor.
(l)
(m)
(i) A list of all recipient agencies purchasing end products under the contract;
(ii) Donated-food inventory at the beginning of the reporting period;
(iii) Amount of donated foods received during the reporting period;
(iv) Amount of donated foods transferred to and/or from existing inventory;
(v) Number of units approved end products delivered to each eligible recipient agency during the reporting period and the number of pounds of each donated food represented by these delivered end products;
(vi) Donated food inventory at the end of the reporting period;
(vii) [Reserved].
(viii) In instances in which sales verification has been delegated to the processor pursuant to § 250.19(b)(2), sales verification findings shall be reported as an attachment to the December and June performance reports in whatever format the State distributing agency deems necessary.
(ix) A certification statement that sufficient donated foods are in inventory or on order to account for the quantities needed for production of end products for State processing contracts and that the processor has on hand or on order adequate quantities of foods purchased commercially to meet the processor's production requirements for commercial sales.
(2) In addition to reporting the information identified in paragraph (m)(1) of this section, processors which substitute concentrated skim milk for donated nonfat dry milk shall also report the following information for the reporting period:
(i) The number of pounds of nonfat dry milk used in commercial products sold to outlets which are not recipient agencies; and
(ii) The number of pounds of concentrated skim milk, and the percent of milk solids contained therein, used in end products sold to recipient agencies.
(3) Distributing agencies shall review and analyze reports submitted by processors to ensure that performance under each contract is in accordance with the provisions set forth in this section.
(n)
(2) For processors substituting concentrated skim milk for donated nonfat dry milk, distributing agencies shall review the processors’ monthly performance reports to ensure that:
(i) Donated nonfat dry milk inventory is being drawn down based on the amount of milk solids contained in the concentrated skim milk which was used in end products sold to eligible recipient agencies;
(ii) An amount of milk solids equivalent to the amount in the donated nonfat dry milk is contained in end products sold to eligible recipient agencies; and
(iii) Donated nonfat dry milk is not being sold in bulk form.
(3) The last monthly performance report for the contract period, as required in paragraph (m)(1) of this section, shall serve as the annual reconciliation report. As a part of the annual reconciliation, a processor which has entered into a contract with the contracting agency for the next year shall pay the distributing agency, at the contract value, for any donated food inventory held which is in excess of the inventory level which has been approved by the State distributing agency. A processor whose contract has been completed or terminated shall return or pay for commodities as required by subsection (j).
(4) Distributing agencies shall certify the accuracy of the annual reconciliation report and forward it to the FCS Regional Office. Such report shall be postmarked no later than 90 days following the close of the contract year. All monies shall be used in accordance with FCS Instruction 410-1, Non-Audit Claims, Food Distribution Program.
(5) Distributing agencies shall not submit food requisitions for processors reporting no sales activity during the prior year's contract period unless documentation is submitted by the processor which outlines specific plans for product promotion or sales expansion.
(o)
(2) In addition to the reporting requirements in paragraph (o)(1) of this section, for each processor which substitutes concentrated skim milk for donated nonfat dry milk the distributing agency shall also report the following information for the reporting period:
(i) The number of pounds of nonfat dry milk used in commercial products sold to nonprogram outlets; and
(ii) The number of pounds of concentrated skim milk and the percent of milk solids contained therein used in end products sold to recipient agencies.
(p)
(1) Giving that agency an opportunity to review all such contracts to determine whether end products to be provided contribute to required nutritional standards for reimbursement under the applicable regulations for such program (7 CFR parts 210, 225, and 226) or are otherwise suitable for use in such program;
(2) Consulting with the agency with regard to the labeling requirements for the end products; and
(3) Otherwise requesting technical assistance as needed from that agency.
(q)
(1) Review all processing contracts and provide guidance, including written recommendations for termination, where necessary, to distributing agencies concerning any contracts which do not meet the requirements of this section;
(2) Allow distributing agencies 30 days to respond to any recommendation concerning contracts not meeting the requirements of this section;
(3) Review and analyze the processing inventory reports required by paragraph (o) of this section to ensure that no additional donated foods shall be distributed to processors with excess inventories until such inventories have been reduced;
(4) Assist distributing agencies in reducing such inventories; and
(5) Review annual reconciliation reports required by paragraph (n) of this section and ensure that payments for commodities have been made.
(r)
(s)
(t)
(a)
(i) The name and location of the summer camp(s);
(ii) Number of camps or sites;
(iii) Number of sessions to be offered during camping season;
(iv) Number of adults and children participating in the activities of the summer camp at each session;
(v) Total number of days meals will be served;
(vi) Total number of meals to be served daily;
(vii) Assurance that tax exempt status will be maintained;
(viii) Indication of whether the summer camp(s) will employ the services of a food service management company;
(ix) Assurance that a brochure or public announcement of open admission policy will be provided and that the summer camp agrees to maintain racial/ethnic data;
(x) Assurance that a physical inventory will be conducted and reconciled at the end of the camping session; and
(xi) Assurance that any excess inventory will, at the distributing agency's option, be returned to the distributing agency for redonation or transferred in accordance with § 250.13(a)(1).
(2) Distributing agencies shall distribute donated foods only after determining that the number of adults participating in camp activities, as compared with the number of children 18 years of age and under, is not unreasonable in light of the nature of the camp and the characteristics of the children in attendance. Persons 19 years of age and over, including program directors, counselors and others who engage in recreational, educational, and direct administrative functions, are to be considered as adults participating in the activities of a summer camp. Employees whose presence on camp premises is solely for the purpose of performing duties such as cooking, gardening, property maintenance or similar support functions
(3) Distributing agencies shall authorize the transfer or redonation of all donated foods remaining in summer camps at the end of the camping season in accordance with § 250.13 (a) or (g) respectively.
(4) Nonprofit summer camps for children may employ food service management companies to conduct food service operations in accordance with § 250.12(d).
(b)
(c)
(a)
(i) The name and location of the charitable institution;
(ii) Total number of days meals will be served;
(iii) Average daily number of participants;
(iv) Total number of meals by type to be served daily to needy persons;
(v) Data that show the number of needy persons receiving benefits under another means-tested program or financial data that show the total annual amount of funds received by the institution that are derived, respectively, from (A) subsidized income and (B) nonsubsidized income. For the purpose of this section “subsidized income” shall mean income from public tax funds which are provided on behalf of participants that have been determined to be in need of financial assistance through a means-tested program such as Medicaid or income received through private federally tax exempt contributions which are provided for the care of participants which the institution had determined to be in need of financial assistance. “Nonsubsidized income” shall mean all other income, including payments made on behalf of participants by persons legally responsible for their support;
(vi) Indication of whether the charitable institution will employ the services of a food service management company to conduct its food service operations;
(vii) Assurance that proper inventory controls will be maintained; and
(viii) Assurance that all reports will be submitted as required by the distributing agency.
(2) Adult correctional institutions are eligible to receive donated foods as charitable institutions, to the extent that needy persons are served, if they conduct rehabilitation programs that are:
(i) Available to either a majority of the total inmate population (including inmates awaiting trial or sentencing) or to a majority of sentenced inmates; and
(ii) Of sufficient scope to permit participation for a minimum of 10 hours per week per inmate by either a majority of the total inmate population or a majority of sentenced inmates.
(3) Charitable institutions may employ food service management companies to conduct food service operations in accordance with § 250.12(d).
(b)
(c)
(a)
(b)
(2)
(A) This quantity will be reduced to the extent that a State Agency on Aging elects to receive cash in lieu of donated foods in accordance with paragraph (c) of this section and
(B) The quantity of donated foods to be provided to any State Agency on Aging for any fiscal year shall not be adjusted on the basis of meal reports or estimates submitted after July 1 of such fiscal year.
(ii) Notwithstanding the provisions of paragraph (b)(2)(i) of this section, in any fiscal year in which compliance with paragraph (b)(2)(i) of this section costs more than the amounts authorized to be appropriated under the Older Americans Act of 1965, as amended for that fiscal year, the Secretary shall reduce the cents per meal level determined pursuant to paragraph (b)(2)(i) of this section for that fiscal year as necessary to meet the authorization of appropriations for that fiscal year. If such action is necessary, the per meal level will be reduced uniformly for
(c)
(2) When a State Agency on Aging elects to receive cash payments in lieu of donated foods, that election shall be binding on the State Agency on Aging for the entire fiscal year to which it pertains, and FCS shall make cash payments to the State Agency on Aging equivalent in value to the donated foods that would otherwise have been provided. Cash payments shall be made for each fiscal quarter by means of Letters of Credit issued by FCS through the appropriate U.S. Treasury Regional Disbursing Office or, where applicable, by means of U.S. Treasury checks, based on the best data available to FCS as to the number of meals to be served by nutrition programs for the elderly administered by each State Agency on Aging during that fiscal quarter.
(3) In instances when it is necessary to reduce the annual level of assistance specified in paragraph (b)(2)(i) of this section, the level will be reduced in accordance with paragraph (b)(2)(ii) of this section. Once it has been established that the reduced per meal level will be sufficient to avoid any further adjustment, any remaining funds (up to the level of assistance specified in paragraph (b)(2)(i) of this section) will be disbursed so that each State will receive an equal amount on a per meal basis.
(4) To be eligible for reimbursement by FCS, claims for cash payment for meals served by nutrition programs for the elderly shall be submitted by State Agencies on Aging and Indian Tribal Organizations no later than 90 days following the close of the Federal fiscal quarter for which payment is claimed.
(5) The State Agency on Aging desiring to receive funds under this paragraph shall enter into a written agreement with FCS pursuant to § 250.12(a) to:
(i) Promptly and equitably disburse any cash it receives in lieu of donated foods to nutrition programs for the elderly after consideration of the needs of such programs and the availability of other resources, including any donated foods available under paragraph (b) of this section;
(ii) Establish such procedures as may be necessary to ensure that the cash disbursements are used by nutrition programs for the elderly solely for the purpose of purchasing U.S. agricultural commodities and other foods of U.S. origin for their food service operations;
(iii) Maintain and retain for 3 years from the close of the Federal fiscal year to which they pertain complete and accurate records of:
(A) All amounts received and disbursed under paragraph (c) of this section and
(B) The manner in which consideration was given to the needs and resources as required by paragraph (c)(5)(i) of this section; and
(iv) Permit representatives of the Department and of the General Accounting Office of the United States to inspect, audit, and copy such records at any reasonable time.
(6) Funds provided under paragraph (c) of this section shall be subject to the Department's Uniform Federal Assistance Regulations (7 CFR part 3015).
(d)
(a)
(b)
(2)
(A) Description of disaster situation;
(B) Number of people requiring meals;
(C) Period of time for which commodities are requested; and
(D) Quantity and types of food needed for congregate meal service.
(ii) In addition, organizations shall report to the distributing agency the number and location of sites providing congregate meal service as such sites are established.
(c)
(2)
(A) Description of disaster situation;
(B) Identification of the specific area(s) included in the request;
(C) Number of households affected;
(D) Explanation as to why the distribution of commodities to households is warranted;
(E) Anticipated distribution period;
(F) Method(s) of distribution available;
(G) Quantity and types of food needed for distribution;
(H) Statement of assurance that simultaneous disaster food stamp benefits and commodity assistance will not be provided to individual households; and
(I) Description of the system that will be implemented to prevent dual participation.
(ii) In addition, information on the number and location of sites where commodities are to be distributed shall be provided to the distributing agency as such sites are established.
(3)
(i) Name of household member applying for assistance;
(ii) Address;
(iii) Number of household members; and
(iv) Statement signed by the household certifying that the household:
(A) Is in need of food assistance;
(B) Understands that misrepresentation of need, and the sale or exchange of the donated food, are prohibited and could result in a fine, imprisonment, or both;
(C) Is not residing in a shelter which provides food assistance; and
(D) Is not receiving disaster food stamp benefits.
(d)
(e)
(f)
(g)
(a)
(b)
(2)
(A) Description of the situation of distress;
(B) Number of people requiring meals and congregate meal service period; and
(C) Quantity and types of food needed.
(ii) In addition, information on the number and location of sites providing meals shall be submitted to the distributing agency as such sites are established.
(c)
(2)
(A) Description of the situation of distress;
(B) Explanation as to why the distribution of commodities to households is warranted;
(C) Identification of the specific area(s) included in the request;
(D) Anticipated distribution period;
(E) Number of households expected to participate;
(F) Quantity and types of food needed for distribution;
(G) Statement of assurance that simultaneous disaster food stamp benefits and commodity assistance will not be provided to individual households; and
(H) Description of the system that will be implemented to prevent dual participation.
(ii) In addition, information on the number and location of sites shall be provided to the distributing agency as such sites are established.
(3)
(i) Name of household member applying for assistance;
(ii) Address;
(iii) Number of household members; and
(iv) Statement signed by the household certifying that the household:
(A) Is in need of food assistance;
(B) Understands that misrepresentation of need, and the sale or exchange of the donated food are prohibited and could result in a fine, imprisonment, or both;
(C) Is not residing in a shelter which provides food assistance; and
(D) Is not receiving disaster food stamp benefits.
(d)
(e)
(f)
(g)
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(1) The name of the public welfare agency or agencies which will be responsible for certification of households;
(2) The manner in which donated food will be distributed, including, but not limited to, the identity of the agency that will distribute donated foods, the storage and distribution facilities to be used and the method of financing;
(3)
(4) The method or methods that will be used to verify the information upon which the certification of eligibility is based, including the kinds of documentary evidence that applicants are required to furnish to obtain certification;
(5) Provisions for periodically reviewing the certifications of households to discover any change in their status which would necessitate a change in the determination of eligibility. The eligibility of households shall be reviewed at least every three months, except that such reviews may be made at longer periods, not to exceed 12 months, provided that such longer periods are based upon a determination by the certifying agency that the income and resources available to such households will probably remain essentially unchanged during such period;
(6) Provisions for identifying each person who has been designated to receive donated foods for a household;
(7) Assurance that the distribution of donated foods shall not be used as a means to further the political interest of any individual or party, and that there shall be no discrimination against recipients of donated foods because of race, color, national origin, sex, age or handicap;
(8) Assurance that:
(i) Citizenship or durational residence requirements shall not be imposed as a condition of eligibility and
(ii) Recipients shall not be requiref to make any payments in money, materials or services, for or in connection with the receipt of donated foods, and that they shall not be solicited in connection with the receipt of donated foods for voluntary cash contributions for any purpose;
(9) The manner in which the distributing agency plans to supervise the program; and
(10) Definitions of any terms used which cannot be determined by reference to Webster's New International Dictionary (third edition).
(e)
(2)
(i) Its approval or disapproval of any or all of the estimated expenditures; and
(ii) The amount of funds which will be made available.
(3)
(4)
(5)
(6)
(A) The distributing agency is not administering the Food Distribution Program in accordance with its plan of operation approved by FCS and the provisions of this part;
(B) The amount of funds which the distributing agency requested from FCS is in excess of actual need, based on reports of expenditures and current projections of program needs; or
(C) Circumstances or conditions justify the return, reallocation or transfer of funds to accomplish the purposes of this part.
(ii) The distributing agency shall return to FCS within 90 days following the close of each Federal fiscal year any funds received under paragraph (e) of this section which are obligated at that time.
(7)
(f)
(1) Maintain and retain for three years from the close of the Federal fiscal year to which they pertain, complete and accurate records of all amounts received and disbursed under paragraph (e) of this section,
(2) Keep such accounts and records as may be necessary to enable FCS to determine whether there has been compliance with this section, and
(3) Permit representatives of the Department and of a General Accounting Office of the United States to inspect, audit and copy such records and accounts at any reasonable time.
(a)
(b) In addition to complying with the provisions identified in paragraph (a) of this section, distributing agencies shall also comply with the provisions set forth in part 253, Food Distribution Program on Indian Reservations or part 254, Food Distribution Program in Oklahoma, as applicable.
(a)
(2) School food authorities which do not participate in the National School Lunch Program or as commodity schools under part 210 of this chapter or in the School Breakfast Program under part 220 of this chapter may receive such commodities as the Secretary may designate, provided the schools are public schools or private schools determined by the Internal Revenue Service to be exempt from income tax under section 501(c)(3) of the Internal Revenue Code of 1954 or, in the Commonwealth of Puerto Rico, certified as nonprofit by the Governor; and operate a nonprofit school food service. Such schools shall be eligible to receive only those commodities acquired under section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431) to the extent that such commodities become available and the Secretary has determined that surpluses of such commodities exist and surplus quantities are sufficient to distribute to nonprogram schools.
(b)
(2)
(ii) For each school year, the national average value of donated foods to be provided to States for distribution to commodity schools shall not be less than the amount specified in paragraph (b)(2)(i) of this section, plus an amount equal to the national average payment established under section 4 of the National School Lunch Act, as amended, for each lunch served by such schools:
(c)
(2)
(3)
(d)
(e)
(f)
(2) If the distributing agency demonstrates on the basis of existing records that it is maintaining an effective offer-and-acceptance system as defined in § 250.3, there can be no refusal
(g)
(a)
(b)
(2)
(c)
(d)
(a)
(b)
(c)
(a)
(b)
(c)
(a)
(1)
(2)
(3)
(i) Document, to the satisfaction of the food bank, that they serve meals predominantly to needy persons; and
(ii) Do not employ a means test to determine eligibility for such meals.
(b)
(c)
(1) The name and location of the organization;
(2) Total number of meals expected to be served or commodities provided to households for home consumption during the agreement period, to be determined as follows:
(i) The total number of meals to be served in a congregate meal setting shall be determined by projecting the average number of meals to be served daily and the number of days meals will be served during the agreement period; and
(ii) The number of needy households to be provided food for home consumption shall be determined by projecting the number of households to be served during the agreement period (in accordance with the method set by the distributing agency) which meet the eligibility criteria which the distributing agency has determined appropriate pursuant to paragraph (a)(2) of this section;
(3) For congregate meal service, indication of whether the organization will employ the services of a food service management company to conduct its food service operations;
(4) Assurance that proper inventory controls will be maintained;
(5) Assurance that all reports will be submitted as required by the distributing agency; and
(6) In instances in which the donated food will be made available to an institution for household distribution, assurance that the food bank will ensure that the institution distributing the commodities will:
(i) Comply with the limitation on unrelated activities established under § 251.10(f) of this chapter; and
(ii) Limit distribution of the donated food to those households which meet the eligibility criteria as determined appropriate by the distributing agency pursuant to paragraph (a)(2) of this section.
(d)
(2) The distributing agency shall notify the appropriate FCSRO of the amount of the donated food it will accept no later than 30 days prior to the beginning of the shipping period.
(3) The distributing agency shall accept or adjust the data reported in the agreement by soup kitchens and food banks to determine the number of meals to be served to needy persons and the number of needy households to be served in order to allocate the donated food in an equitable manner that ensures that commodities will not be made available in quantities in excess of anticipated use or the ability of the organization to accept and store the commodities.
(4) In instances in which a State determines that it will not accept its full allocation, the Department will reallocate these commodities in a fair and equitable manner among those States that accept the full amount of their allocations and request additional amounts.
(e)
(f)
(g)
Interested persons desiring information concerning the program may make written request to the following Regional Offices:
(a) Northeast Region, Food and Consumer Service, USDA, 10 Causeway Street, Boston, Massachusetts 02222-1065 for the following States: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
(b) Mid-Atlantic Region, Food and Consumer Service, USDA, Mercer Corporate Park, Corporate Blvd., CN 02150, Trenton, New Jersey 08650, for the following States: Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands and West Virginia.
(c) Southeast Region, Food and Consumer Service, USDA, 1100 Spring Street, NW, Atlanta, Georgia 30367, for the following States: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee.
(d) Midwest Region, Food and Consumer Service, USDA, 50 East Washington Street, Chicago, Illinois 60602, for the following States: Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.
(e) Mountain Plains Region, Food and Consumer Service, USDA, 2420 West 26th Avenue, Room 430-D, Denver, Colorado 80211, for the following States: Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Utah and Wyoming.
(f) Southwest Region, Food and Consumer Service, USDA, 1100 Commerce Street, Room 5-C-30, Dallas, Texas 75242, for the following States: Arkansas, Louisiana, New Mexico, Oklahoma and Texas.
(g) Western Region, Food and Consumer Service, USDA, 550 Kearney Street, Room 400, San Francisco, California 94108 for the following States: Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Nevada, Oregon, Trust Territory and Washington.
7 U.S.C. 7501-7516.
This part announces the policies and prescribes the regulations necessary to carry out certain provisions of the Temporary Emergency Food Assistance Act of 1983, (7 U.S.C. 612c
(a) Within the United States Department of Agriculture (the “Department”), the Food and Consumer Service (FCS) shall have responsibility for the distribution of food commodities and allocation of funds under the part.
(b) Within the States, distribution to emergency feeding organizations and receipt of payments for storage and distribution shall be the responsibility of the State agency which has: (1) Been designated for such responsibility by the Governor or other appropriate State executive authority; and (2) entered into an agreement with the Department for such distribution and receipt in accordance with paragraph (c) of this section.
(c) Each State agency that distributes donated foods to emergency feeding organizations or receives payments for storage and distribution costs in accordance with § 251.8 shall perform those functions pursuant to an agreement entered into with the Department. This agreement shall be considered permanent, with amendments initiated by distributing agencies, or submitted by them at the Department's request, all of which shall be subject to approval by the Department. Such State agencies shall enter into a written agreement with eligible emergency feeding organizations. This agreement shall provide that emergency feeding organizations agree to operate the program in accordance with the requirements of this part, and, as applicable, part 250 of this chapter. The agreement shall be considered permanent, with amendments to be made as necessary. State agencies shall ensure that emergency feeding organizations provide, on a timely basis, by amendment to the agreement, any information on changes in program administration, including, but not limited to, any changes resulting from amendments to Federal regulations or policy.
For the purposes of this part:
(a) The terms used in this part that are defined in part 250 of this chapter shall have the meanings ascribed to them therein.
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(c)
(2) FCS shall promptly notify State agencies regarding their allocation of commodities to be made available under this part.
(3) State agencies shall notify the appropriate FCSRO of the amount of the commodities they will accept not later than 30 days prior to the beginning of the shipping period.
(d)
(1) Request commodities only in quantities which can be utilized without waste in providing food assistance to needy persons under this part;
(2) Ensure that no emergency feeding organization receives commodities in excess of anticipated use, based on inventory records and controls, or in excess of its ability to accept and store such commodities; and
(3) Establish distribution rates, based on household size, to be used by emergency feeding organizations which provide commodities to needy persons in households.
(e)
(f)
(1) The Department will reimburse the State agency at the current flat rate for such processing.
(2) Minimum yields and product specifications established by the Department shall be met by the processor.
(3) The State shall require the processor to meet State and local health standards.
(4) The external shipping containers of processed products shall be clearly labeled “Donated by the U.S. Department of Agriculture—Not to be Sold or Exchanged”. Internal packaging shall be clearly marked “Donated by the U.S. Department of Agriculture—Processed Under Agreement with the State of
(5) Processors and State agencies shall also meet the basic minimum requirements of § 250.15.
(g)
(h)
(i)
(j)
(k)
(l)
(i) When the loss arises from the State agency's improper distribution or use of any commodities or failure to provide proper storage, care, or handling; and
(ii) When the State agency fails to pursue claims arising in its favor, fails to provide for the rights to assert such claims, or fails to require its emergency feeding organizations to provide for such rights.
(2) If the State agency itself causes the loss of commodities and the value exceeds $250, the State agency shall immediately transmit the claim determination to the FCS Regional Office, fully documented as to facts and findings. Except as provided in paragraph (l)(4) of this section, if the State agency itself causes the loss of commodities, and the value does not exceed $250, the State agency shall immediately return funds equal to the claim amount to FCS.
(3) If the State agency determines that a claim exists against an emergency feeding organization, warehouseman, carrier or any other entity and the value of the lost commodities exceeds $2500, the State agency shall immediately transmit the claim determination to the appropriate FCS Regional Office, fully documented as to facts and findings. If FCS determines from its review of the claim determination that a claim exists, the State agency shall make demand for restitution upon the entity liable immediately upon receipt of notice from the FCS Regional Office. Except as provided in paragraph (l)(4) of this section, if the State agency determines that a claim exists in favor of the State agency against an emergency feeding organization, warehouseman, carrier or any other entity and the value of the lost commodities does not exceed $2500, the State agency shall immediately proceed to collect the claim.
(4) No claim determination shall be required where the value of the lost commodities is $100 or less. However, no such claim shall be disregarded where:
(i) There is evidence of fraud or a violation of Federal, State or local criminal law; or
(ii) Program operations would be adversely affected.
(5) The State agency shall maintain records and substantiating documents, on all claims actions and adjustments including documentation of those cases in which no claim was asserted because of the minimal amount involved.
(6) In making final claim determinations for commodity losses incurred by emergency feeding organizations when there is no evidence of fraud or negligence, State agencies and FCS Regional Offices, as applicable, shall consider the special needs and circumstances of the emergency feeding organizations, and adjust the claim and/or conditions for claim collection as appropriate. These special needs and circumstances include but are not limited to the emergency feeding organization's use of volunteers and limited financial resources and the effect of the claim on the organization's ability to meet the food needs of low-income populations.
(a)
(b)
(a)
(1) A description of the criteria established in accordance with § 251.5(b) for determining that applicant households are in need of food assistance under this part;
(2) The rates for distributing commodities to households in accordance with § 251.4(d)(3);
(3) A description of the program monitoring system including a detailed explanation of any factors which may contribute to the State requesting approval of exceptions to conducting the minimum number of reviews required by § 251.10(e);
(4) A description of the State's formula for allocating administrative funds among State agencies and emergency feeding organizations, including, if applicable, soup kitchens and food banks receiving administrative funds in connection with commodities which are made available under section 110 of the Hunger Prevention Act of 1988 in accordance with § 251.8(d)(1); and
(5) A description of the State's contribution toward the matching requirements as described under § 251.9(e).
(b)
(a)
(1)
(2)
(b)
(a)
(b)
(c)
(2) Upon notification by the FCS Regional Office that an agreement has been entered into in accordance with § 251.2(c) of this part, FCS shall issue a grant award pursuant to FCS Instruction 407-3 (Grant Award Process), and promptly make funds available to each State agency within the State's allocation either through issuance of a letter of credit or a U.S. Treasury check pursuant to submission of the SF-270, Request for Advance or Reimbursement. State agencies shall receive funds through a letter of credit if program payments are more than $120,000 for the year. To the extent funds are available
(3) Each State agency shall return to FCS any funds made available under this section either through the original allocation or through subsequent reallocations which are unobligated as of the end of the fiscal year for which they were made available. Such return shall be made as soon as practicable but in no event later than 30 days following demand made by FCS.
(d)
(i)
(A) Transporting, storing, handling, repackaging, processing, and distributing commodities incurred after they are received by the organization;
(B) Costs associated with determinations of eligibility, verification, and documentation;
(C) Costs of providing information to persons receiving USDA commodities concerning the appropriate storage and preparation of such commodities;
(D) Costs involved in publishing announcements of times and locations of distribution; and
(E) Costs of recordkeeping, auditing, and other administrative procedures required for program participation.
(ii)
(2)
(ii) In instances in which administrative funds are made available in connection with section 110 commodities and the State agency responsible for the distribution of TEFAP commodities and funds is not also responsible for the distribution of section 110 commodities, the State agency responsible for the administration of TEFAP shall enter into an agreement with the soup kitchens/food banks (as described in § 250.52(c) of this chapter) requesting the funds, or with the State agency responsible for the distribution of section 110 commodities, which will then enter into agreements with those soup kitchens and food banks. The agreement with the soup kitchen or food bank shall require compliance with the provisions of this section and § 251.10(a) and (e).
(3)
(A) Provided by the State agency to emergency feeding organizations as either reimbursement or advance payment for administrative costs incurred by emergency feeding organizations in accordance with paragraph (d)(1) of this section, except that emergency feeding organizations may retain advance payments only to the extent that they actually incur such costs; or
(B) Directly expended by the State agency to cover administrative costs
(ii) State agencies shall not charge for commodities made available under this part to emergency feeding organizations.
(e)
(a)
(b)
(c)
(1)
(2)
(ii) In order for a third-party in-kind contribution to qualify as a State-level administrative cost for purposes of meeting the match, all of the following criteria shall be met:
(A) In its administration of food assistance programs, the State has performed this type of function over a sustained period of time in the past;
(B) The function was not previously performed by the State on behalf of emergency feeding organizations; and
(C) The State would normally perform the function as part of its responsibility in administering TEFAP or related food assistance programs if it were not provided as an in-kind contribution.
(d)
(e)
(f)
(g)
(a)
(2) In addition to maintaining financial records in accordance with 7 CFR part 3016, State agencies which receive funds under this part shall maintain records to document the amount of funds paid to emergency feeding organizations for the actual storage and distribution costs incurred by any emergency feeding organization. State agencies shall ensure that emergency feeding organizations maintain records as required by this paragraph.
(3) Each distribution site shall keep accurate and complete records showing the data and method used to determine the number of eligible households served at that site.
(4) Each distribution site shall collect for each household participating in the program the name of the household member receiving commodities, the address of the household (to the extent practicable), the number of persons in the household, and the basis for determining that the household is eligible to receive commodities.
(5) All records required by this section shall be retained by the emergency feeding organization for a period of 3 years from the close of the Federal Fiscal Year to which they pertain.
(b)
(c)
(d)
(2) Each State agency shall complete and submit to the FCSRO reports to ensure that excessive inventories of donated foods are not maintained, in accordance with the requirements of § 250.17(a) of this chapter. Such reports shall also include the total number of households served in the State since the previous report submittal, based upon current information received from emergency feeding organizations.
(e)
(2) Unless specific exceptions are approved in writing by the FCS Regional Office, the State monitoring system shall include:
(i) An annual review of at least 25 percent of all emergency feeding organizations and a review of all such organizations not less frequently than once every four years; and
(ii) An annual review of one-third or 50, whichever is fewer, of all distribution sites within the State, to be conducted, to the maximum extent feasible, simultaneously with actual distribution and/or eligibility determinations.
(3) In selecting distribution sites for review, the State shall rank all the sites according to the number of participating households during the previous Federal fiscal quarter and select for review the first 25 sites, or first one-sixth of all sites, whichever is fewer, which served the greatest number of households.
(4) Each review must encompass eligibility determinations, food ordering procedures, storage and warehousing practices, inventory controls, approval of distribution sites, and reporting and recordkeeping requirements.
(5) Upon concurrence by FCS, reviews of emergency feeding organizations or distribution sites which have been conducted by FCS Regional Office personnel may be incorporated into the minimum coverage required by paragraph (e)(2) of this section.
(6) The State agency shall submit a report of review findings to each emergency feeding organization. The report shall include: (i) A description of each deficiency found and factors contributing to each; (ii) requirements for corrective actions; and (iii) timetable for completion of corrective action. The State agency shall monitor each emergency feeding organization's implementation of corrective action identified in the report.
(7) State agencies shall ensure that emergency feeding organizations which receive administrative funds in connection with commodities made available under section 110 of the Hunger Prevention Act of 1988 are reviewed at the frequency stipulated in paragraph (e)(2)(i) of this section to ensure compliance with the provisions contained in § 251.8.
(f)
(i) The person(s) conducting the activity makes clear that the activity is not part of TEFAP and is not endorsed by the Department (impermissible activities include information not related to TEFAP placed in or printed on bags, boxes, or other containers in which commodities are distributed). Recipes or information about commodities, dates of future distributions, hours of operations, or other Federal, State, or local government programs or services for the needy may be distributed without a clarification that the information is not endorsed by the Department;
(ii) The person(s) conducting the activity makes clear that cooperation is not a condition of the receipt of TEFAP commodities (cooperation includes contributing money, signing petitions, or conversing with the person(s)); and
(iii) The activity is not conducted in a manner that disrupts the distribution of TEFAP commodities.
(2) Emergency feeding organizations and distribution sites shall ensure that activities unrelated to the distribution of TEFAP foods are conducted in a manner consistent with paragraph (f)(1) of this section.
(3)
(4)
(g)
(h)
Sec. 416, Agricutural Act of 1949 (7 U.S.C. 1431).
(a)
(b)
(c)
The terms used in this part that are defined in §§ 250.3 and 251.3 shall have the meanings ascribed to them therein, except as set forth in this section.
(a)
(b)
(1) They are distributed to eligible recipient agencies in processed form, at which time the recipient agency takes title;
(2) They are disposed of because they are damaged or out-of-condition; or
(3) Title is transferred to the NCP Program processor upon termination of the agreement.
(c)
(d)
(e)
(a)
(b)
(c)
(1) The processor shall submit to FCS end product data schedules which include a description of each end product to be processed, the quantity of each donated food and any other ingredient which is needed to yield a specific number of units of each end product. FCS may permit processors to specify the total quantity of any flavorings or seasonings which may be used without identifying the ingredients which are, or may be, components of seasonings or flavorings. The end product data schedule shall provide pricing information supplied by the processor as requested by FCS and a thorough explanation of what this pricing information represents. The end product data schedule shall be made a part of the NCP agreement.
(2) When determining the value of the donated food, the processor shall use the agreement value of the donated
(3) The processor shall demonstrate to the satisfaction of FCS that internal controls are in place to insure that duplicate reporting of sales under the NCP Program and any other food distribution program does not occur.
(4) The processor shall use a method of selling end products to recipient agencies which ensures that the price of each case of end product is reduced by the agreement value of the donated commodity and ensures proper accountability. In line with FCS guidelines and subject to FCS approval, the processor shall select one or more of the following donated food value return systems to use during the term of the agreement. Regardless of the method used, processors shall provide pricing information summaries to recipient agencies as soon as possible after contract approval by FCS. If the pricing information changes during the contract period, processors shall provide updated pricing information to FCS and the recipient agencies 30 days prior to the effective date. Regardless of the method chosen for selling end products, the processor shall reduce his inventory only by the amount of donated food represented by the discount or refund placed on the end product.
(i)
(A)
(B)
(ii)
(A)
(B)
(C)
(iii)
(5) The processor shall furnish to FCS prior to the ordering of any donated food for processing, a performance supply and surety bond obtained from surety companies listed in the current Department of Treasury Circular 570 or an irrevocable letter of credit to cover the amount of inventory on hand and on order.
(6) The processor shall draw down inventory only for the amount of donated food used to produce the end product. In instances in which concentrated skim milk is substituted for nonfat dry milk, the processor shall draw down donated nonfat dry milk inventory only in an amount equal to the amount of concentrated skim milk, based on milk solids content, used to produce the end product. Processors shall ensure that an amount equivalent to 100 percent of the donated food provided to the processor under the NCP Program is physically contained in end products. Additional commodities required to account for loss of donated food during production shall be obtained from non-donated food.
(7)(i) Only butter, cheese, corn grits, cornmeal, flour, macaroni, nonfat dry milk, peanut butter, peanut granules, roasted peanuts, rice, rolled oats, rolled wheat, shortening, vegetable oil, and spaghetti may be substituted as defined in § 252.2 and such other food as FCS specifically approves as substitutable under paragraph (c)(7)(i)(A) of this section (substitution of meat and poultry items shall not be permitted).
(A) Processors may request approval to substitute commercial foods for donated foods not listed in paragraph (c)(7)(i) of this section by submitting such request to FCS in writing and satisfying the requirements of paragraph (c)(7) of this section. FCS will notify the processor in writing of authorization to substitute commercial foods for donated foods not listed in paragraph (c)(7)(i) of this section and such authorization shall apply for the duration of all current contracts entered into by the processor pursuant to this section.
(B) The processor shall maintain records to substantiate that it continues to acquire on the commercial market amounts of substitutable food consistent with their levels of non-NCP Program production and to document the receipt and disposition of the donated food.
(C) FCS shall withhold deliveries of donated food from processors that FCS determines have reduced their level of non-NCP Program production because of participation in the NCP Program.
(ii) When the processor seeks FCS approval to substitute donated nonfat dry milk with concentrated skim milk under paragraph (c)(7)(i)(A) of this section, an addendum must be added to the request which states:
(A) The percent of milk solids that, at a minimum, must be contained in the concentrated skim milk;
(B) The weight ratio of concentrated skim milk to donated nonfat dry milk:
(
(
(
(C) The processor's method of verifying that the milk solids content in the concentrated skim milk is as stated in the request;
(D) A requirement that the concentrated skim milk shall be produced in a USDA approved plant or in a plant approved by an appropriate regulatory authority for the processing of Grade A milk products; and
(E) A requirement that the contact value of donated food for a given amount of concentrated skim milk used to produce an end product is the value of the equivalent amount of donated nonfat dry milk, based on the weight ratio of the two foods.
(iii) Substitution must not be made solely for the purpose of selling or disposing of the donated commodity in commercial channels for profit.
(8) The processor shall be liable for all donated food provided under the agreement. The processor shall immediately report to FCS any loss or damage to donated food and shall dispose of
(9) The processor shall submit to FCS monthly performance reports reflecting the sale and delivery of end products during the month.
(i) The processor shall ensure that the monthly performance report is postmarked no later than the last day of the month following the month being reported. The processor shall identify the month of delivery for each sale reported. The sale and delivery of end products for any prior month may be included on the monthly performance report. The processor monthly performance report shall include:
(A) The donated food inventory at the beginning of the reporting month;
(B) Amount of donated food received from the Department during the reporting month;
(C) Amount of donated food transferred to and/or from existing inventory;
(D) A list of all recipient agencies purchasing end products and the number of units of end products delivered to each during the report month;
(E) The net price paid for each unit of end product and whether the sale was made under a discount or refund system;
(F) When the sale is made through a distributor, the name of the distributor;
(G) The amount of inventory drawdown represented by reported sales; and
(H) the donated food inventory at the end of the reporting month.
(ii) In addition to reporting the information identified in paragraph (c)(9)(i) of this section, processors substituting concentrated skim milk for donated nonfat dry milk shall report the following information for the reporting period:
(A) The number of pounds of nonfat dry milk used in commercial products sold to outlets which are not recipient agencies; and
(B) The number of pounds of concentrated skim milk and the percent of milk solids contained therein, used in end products sold to recipient agencies.
(iii) At the end of each agreement period, there will be a final 90 day reconciliation period in which processors may adjust NCP sales for any month.
(10) The processor shall maintain complete and accurate records of the receipt, disposal and inventory of donated food including end products processed from donated food.
(i) The processor shall keep production records, formulae, recipes, daily or batch production records, loadout sheets, bills of lading, and other processing and shipping records to substantiate the use of the donated food and the subsequent redelivery to an eligible recipient agency.
(ii) The processor shall document that sales reported on monthly performance reports, specified in paragraph (c)(9) of this section were made only to eligible recipient agencies and that the normal wholesale price of the product was discounted or a refund payment made for the agreement value of the donated commodity.
(iii) When donated food is commingled with commercial food, the processor shall maintain records which will permit an accurate determination of the donated commodity inventory.
(iv) The processor shall make all pertinent records available for inspection and review upon request by FCS, its representatives and the General Accounting Office (GAO). All records must be retained for a period of three years from the close of the Federal fiscal year to which they pertain. Longer retention may be required for resolution of an audit or of any litigation.
(11) The processor shall obtain, upon FCS request, Federal acceptance service grading and review of processing activities and shall be bound by the terms and conditions of the grading and/or review.
(12) The processor shall indemnify and save FCS and the recipient agency free and harmless from any claims, damages, judgments, expenses, attorney's fees, and compensation arising out of physical injury, death, and/or property damage sustained or alleged to have been sustained in whole or in part by any and all persons whatsoever as a result of or arising out of any act or omission of the processor, his/her agents or employees, or caused or resulting from any deleterious substance,
(13) The processor shall be liable for payment for all uncommitted food inventory remaining at agreement termination.
(i) When agreements are terminated at the request of the processor or at FCS’ request because there has been noncompliance on the part of the processor with the terms and conditions of the agreement, or if any right of FCS is threatened or jeopardized by the processor, the processor shall pay FCS an amount equal to the CCC unrestricted sales price, the cost CCC of replacement on the date the agreement is terminated, or the agreement value of donated commodities, whichever is highest, for the inventory, plus any expenses incurred by FCS.
(ii) When the agreements are terminated at FCS’ request where there has been no fault or negligence on the part of the processor, the processor shall pay FCS an amount equal to the CCC unrestricted sales price, the cost to CCC of replacement on the date the agreement is terminated, or the agreement value of the donated commodities, whichever is highest, for the inventory, unless FCS and the processor mutually agree on another value.
(14) The processor shall not assign the processing contract or delegate any aspect of processing under a subcontract or other arrangement without the written consent of FCS. The subcontractor shall be required to become a party to the processing contract and conform to all conditions contained in that contract.
(15) The processor shall comply fully with the provisions of the NCP agreement and all Federal regulations and instructions relevant to the NCP Program.
(16) The processor shall label end products in accordance with § 250.15(j) and, when end products contain vegetable protein products, in accordance with 7 CFR part 210, 225, or 226 appendix A.
(17) The processor shall return to FCS any funds received from the sale of donated food containers and the market value or the price received from the sale of any by-products of donated food or commercial food which has been substituted for donated food.
(18) For any year in which a processor receives more than $250,000 in donated food, the processor shall obtain an independent audit conducted by a Certified Public Accountant (CPA) for that year. Processors receiving $75,000 to $250,000 in donated food each year shall obtain an independent audit conducted by a CPA every two years and those receiving less than $75,000 in donated food each year shall obtain an independent audit conducted by a CPA every three years. Processors in the three year audit cycle shall move into the two year audit cycle when the value of donated food received reaches $75,000. If the Department determines that the audit is not acceptable or that the audit has disclosed serious deficiencies, the processor shall be subject to additional audits by OIG at the request of FCS.
(i) Audits shall be conducted in accordance with the auditing provisions set forth under the
(ii) The costs of the audits shall be borne by the processor.
(iii) Audit findings shall be submitted by the processors to FCS.
(iv) Noncompliance with the audit requirement contained in this part will render the processor ineligible to enter into another processing contract until the required audit has been conducted and deficiencies corrected.
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(d)
(e)
The information collection and reporting requirements contained in this part have been approved by the Office of Management and Budget under control number 0584-0325.
91 Stat. 958 (7 U.S.C. 2011-2027), unless otherwise noted.
This part describes the terms and conditions under which: commodities (available under part 250 of this chapter) may be distributed to households on or near all or any part of any Indian reservation, the program may be administered by capable Indian tribal organizations, and funds may be obtained from the Department for the costs incurred in administering the program. This part also provides for the concurrent operation of the Food Distribution Program and the Food Stamp Program on Indian reservations when such concurrent operation is requested by an ITO.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(1) The agency of State government, including the local offices thereof, which enters into an agreement with FCS for the distribution of commodities on all or part of an Indian reservation, and
(2) The ITO of any Indian tribe, determined by the Department to be capable of effectively administering a Food Distribution Program, which enters into an agreement with FCS for the distribution of commodities on all or part of an Indian reservation.
(i)
(a)
(b)
(1) Except as provided in paragraph (b)(2) of this section, when the Food Distribution Program is operating on all or part of a reservation, all eligible households within those boundaries may participate in the Food Distribution Program, or, if the ITO has elected concurrent operation of the Food Stamp Program, may elect to participate in either program, without regard to whether the household is an Indian tribal household.
(2) FCS may determine, based on the number of non-Indian tribal households located on all or part of a reservation, that concurrent operation is necessary. When such a determination has been made all households residing in such areas may apply to participate in either the Food Stamp or the Food Distribution Program.
(c)
(d)
(a)
(b)
(2) In the case where the Indian reservation boundaries cross State lines, the ITO and appropriate State agencies may jointly request FCS approval that a single State agency administer the Food Distribution Program on all or part of the Indian reservation.
(3) An agency of State government responsible for administering the Food Distribution Program may contract Program functions to an ITO. These functions include, but are not limited to, outreach, preparation of bilingual materials, commodity issuance, determination of food preferences of households, publicizing uses of commodities, and transportation and on-site delivery services. The State agency may also use the ITO in prescreening translations, interpretive services and other noncertification functions. The State agency shall not contract responsibility for certification activities such as interviews or eligibility determinations with an ITO that has been determined incapable of administering the Food Distribution Program. In all cases the State agency shall retain full responsibility for program administration.
(c)
(2) The appropriate ITO for other areas, in order to qualify as reservations for the provisions of this part, must show to FCS:
(i) That the ITO exercises governmental jurisdiction over a geographic area(s) which enjoys legal recognition from the Federal or a State government and is set aside for the use of Indians;
(ii) A clear and precise description of the boundaries of such geographic area(s).
(d)
(e)
(i) Order and properly store commodities,
(ii) Certify eligible households,
(iii) Arrange for physical issuance of commodities,
(iv) Keep appropriate records and submit required reports,
(v) Budget and account for administrative funds,
(vi) Determine the food preferences of households, and
(vii) Conduct on-site reviews of certification and distribution procedures and practices.
(2) The Food and Consumer Service (FCS) shall make a determination of potential Indian Tribal Organization (ITO) capability within 30 days of receipt of a completed application for the Food Distribution Program. FCS shall promptly advise ITOs of the need for additional information if an incomplete application is received.
(3) FCS shall, if requested by an ITO which has been determined by FCS to be potentially capable of administering a Food Distribution Program, provide the ITO's designees with appropriate training and technical assistance to prepare the ITO to take over program administration. In determining what training and technical assistance are necessary, FCS shall consult with the ITO and other sources, such as the BIA.
(a)
(i) Consult in good faith with the ITO on the reservation where the appropriate agency of the State government is responsible for administering the Food Distribution Program.
(ii) A State agency which is not an ITO shall submit its plan of operation, budget and any substantive subsequent amendments to the ITO for comment at least 45 days prior to submission of the plan, budget or amendment to FCS. Comments by the ITO shall be attached to the plan, budget or amendment which is submitted to FCS. This paragraph does not apply to amendments required by FCS under § 253.7(a)(1).
(2) The plan of operation shall describe the manner in which commodities will be distributed, including, but not limited to, the storage and distribution facilities to be used, the procedures to assure ongoing consultation with the ITO where the appropriate agency of the State government administers the Program, the method by which the food preferences of households shall be determined, the manner in which the State agency plans to supervise the Food Distribution Program, and plans by which the State agency will control dual participation. The plan shall also include by reference or otherwise the following assurances:
(i) No household on any Indian reservation shall be permitted to participate simultaneously in the Food Stamp
(ii) The value of the commodities provided to any eligible household shall not be considered income or resources for any purposes under any Federal, State, or local laws, including, but not limited to, laws relating to taxation, welfare, and public assistance programs; and no State agency shall decrease any assistance otherwise provided to a household because of the receipt of commodities.
(iii) The distribution of commodities shall not be used as a means for furthering the political interest of any individual or party.
(iv) There shall be no discrimination in the certification of applicant households or in the distribution of commodities because of sex, race, color, age, political beliefs, religion, handicap or national origin.
(v) Households shall not be required to make any payments in money, materials or services for, or in connection with, the receipt of commodities; and they shall not be solicited in connection with the receipt of commodities for voluntary cash contributions for any purpose.
(vi) Adequate personnel, including supervisory personnel, to review the Food Distribution Program shall be provided to ensure compliance with the requirements of this part.
(vii) Use of disclosure of information obtained from food distribution applicant households, exclusively for the Food Distribution Program, shall be restricted to persons directly connected with the administration or enforcement of the provisions of the Food Distribution Programs as defined in part 283 of this subchapter, the Food Stamp Act or regulations, or with other Federal or federally aided, means-tested assistance programs such as title IV-A (AFDC), XIX (Medicaid), or XVI (SSI), or with general assistance programs that are subject to the joint processing requirements specified in § 273.2(j)(2).
(b)
(c)
(d)
(2) The State agency shall ensure that offices serving reservations subject to the criteria in paragraph (d)(1) of this section provide sufficient bilingual staff for the timely processing of non-English speaking applicants.
(3) The State agency shall develop estimates of the numbers of low-income, single-language minority households by using census data (including the Census Bureau's Current Population Report: Population Estimates and Projections, Series P-25, No. 627) and knowledge of the reservation. Local Bureau of Census offices, Community Services Administration offices, Community Action agencies, Bureau of Indian Affairs, Indian Health Services, planning agencies, the ITO and school officials may be important sources of
(e)
(f)
(1) State agency training programs shall cover eligibility criteria, certification procedures, commodity ordering, storage and distribution practices, household rights and responsibilities and other job-related responsibilities. The content of the training material shall be reviewed and revised periodically to correct deficiencies in program operations or reflect changes in policy and procedures.
(2) The State agency shall allow public attendance at formal certification training sessions in accordance with § 274.2(e)(1)(iv).
(3) FCS shall review the effectiveness of State agency training based on information obtained from field reviews, administrative analyses and other sources.
(g)
(h)
(i)
(1) The State agency shall review program operations at least annually, document program deficiencies and establish and implement specific plans of corrective action for deficiencies noted.
(2) Reviews of operations shall include, but not be limited to, certification of households, determination of food preferences, distribution of commodities, fair hearing procedures, commodity inventories and timeliness and accuracy of reports to FCS.
(3) Program reviews and corrective action plans shall be available to FCS upon request.
(j)
(k)
(1) Take action against any State agency under § 283.9(g) of this part with respect to administrative funds available from FCS for use by the State agency or (2) disqualify the State agency from further distribution of commodities to households. Disqualification of the State agency shall not prevent FCS or the Department from taking other actions, including prosecution under applicable Federal statutes, when deemed necessary. Reinstatement shall be contingent upon approval by FCS of the State agency's plan for corrective action or determination by FCS that the State agency has complied with any other requirements for reinstatement which FCS may set forth. These provisions apply to all State agencies, regardless of whether the Program is administered by an agency of the State government or an ITO. If the ITO is disqualified as a State agency, an appropriate agency of State government shall administer the Food Distribution Program on the reservation. If an agency of State government is disqualified as the State agency for the Food Distribution Program on the reservation, the ITO may request in writing a capability determination for program administration in accordance with § 283.4.
(l)
(i) Whether or not the reservation definition is met;
(ii) The capability of an ITO to administer the Food Distribution Program;
(iii) Sanctions taken under § 283.5(k) or § 283.9(g); or
(iv) The Federal matching percentage level of administrative funding made available by FCS.
(2) At the time FCS advises the State agency or ITO of its determination, FCS shall also advise the State agency or ITO of its right to appeal and, except for appeals of funding determinations, shall advise the State agency or ITO of its right to request either a meeting to present its position in person or a review of the record. On appeals of funding determinations, FCS shall advise the State agency or ITO that it may indicate if it wishes a meeting, however, FCS need schedule a meeting only if FCS determines a meeting is warranted to reach a proper adjudication of the matter. Otherwise, FCS shall review supportive information submitted by the State agency or ITO in paragraph (l)(3)(ii) of this section.
(3)
(ii)
(4)
(5)
(6)
(m)
(1)
(A) FCS shall determine tribal eligibility and capability to administer the Food Distribution Program on Indian Reservations within 60 days of receipt of a completed application. If an incomplete application is received, FCS shall within 15 days, notify the ITO of what additional information is required. The processing time for the capability determination shall start from the date the additional information is received by FCS.
(B) Upon FCS’ determination that the ITO will administer the Food Distribution Program on Indian Reservations, FCS shall expeditiously plan for and provide needed training and technical assistance to facilitate timely commencement of tribal administrative responsibilities. The ITO shall have 120 days from FCS’ determination in paragraph (m)(1)(i)(A) of this section to submit and have approved a plan of operation, operating manuals, and to commence program operations under the regulations as specified in this part. Extensions may be granted by FCS to ITOs if good cause is shown.
(C) If FCS determines that an ITO is not capable of administering the Food Distribution Program on Indian Reservations, FCS shall direct the State to continue program operations and submit a new plan of operation and to commence program operations under the regulations as specified in this part within 120 days from FCS’ determination in paragraph (m)(1)(i)(A) of this section.
(ii) If an ITO currently administers the Food Distribution Program on Indian Reservations, the timeframes specified in paragraph (m)(1)(i) of this section apply except that:
(A) FCS shall determine tribal eligibility and capability to administer the Food Distribution Program on Indian Reservations within 30 days of receipt of a completed application.
(B) If FCS determines that the ITO will not administer the Food Distribution Program on Indian Reservations, FCS shall direct the ITO to continue program operations until the State government can commence program operations. The State government shall have 120 days from FCS’ determination in paragraph (m)(1)(i)(A) of this section to submit and have approved a plan of operation and to commence program operations under the regulations as specified in this part.
(iii) If an ITO does not currently participate in a Food Distribution Program on Indian Reservations, the timeframes in paragraph (m)(1)(i) of this section apply except that if FCS determines that an ITO cannot administer the program, FCS shall direct the
(iv) Extensions to the above implementation timeframe (except for those timeframes set forth in paragraphs (m)(1) (i)(A) and (ii)(A) of this section) may be granted by FCS to ITOs or State government agencies if there is compelling justification involving circumstances which were not reasonably foreseeable and which are not the fault of the ITO or the State agency and which circumstances present extraordinary problems that would render earlier implementation impossible.
(a)
(i) An individual living alone.
(ii) An individual living with others, but customarily purchasing food and preparing meals for home consumption separate and apart from the others.
(iii) A group of individuals living together for whom food is customarily purchased in common and for whom meals are prepared together for home consumption.
(2)
(i)
(ii)
(iii)
(iv)
(v)
(3)
(b)
(2) No person shall participate in the Food Distribution Program on an Indian reservation unless the person is legally a resident of the United States. A further discussion of “legal residency” is provided in § 283.6(a)(3)(iv).
(c)
(2) If FCS determines that a State or local general assistance program applies criteria of need the same as or similar to, those applied under any of the federally aided public assistance programs, households in which all members are included in such a general assistance grant, shall, if otherwise eligible under this part, be determined to be eligible to participate in the Food Distribution Program while receiving such grants without regard to the income and resources of household members.
(d)
(2)
(i) The cash value of life insurance policies and pension funds, including funds in pension plans with interest penalties for early withdrawals, such as a Keogh plan or an Individual Retirement Account (IRA), as long as the funds remain in the pension plans.
(ii) Any governmental payments which are designated for the restoration of a home damaged in a disaster, if the household is subject to a legal sanction if the funds are not used as intended, for example payments made by the Department of Housing and Urban Development through the individual and family grant program of disaster loans or grants made by the Small Business Administration.
(iii) Resources, such as those of students or self-employed persons, which have been prorated as income. The treatment of self-employment income is explained in § 283.7(b)(1)(iii).
(iv) Resources which are excluded by express provision of Federal statute. The following is the current listing of resources excluded by Federal statute:
(A) Payment received under the Alaska Native Claims Settlement Act (Pub. L. 92-203, section 21(a) or the Sac and Fox Indian claims agreement Pub. L. 94-189);
(B) Payments received by certain Indian tribal members under Pub. L. 94-114, section 6, regarding submarginal land held in trust by the United States;
(C) Payments received by certain Indian tribal members under Pub. L. 94-540 regarding the Grand River Bank of Ottawa Indians;
(D) Reimbursements from the Uniform Relocation Assistance and Real Property Acquistion Policy Act of 1970 (Pub. L. 91-646, section 216);
(E) Earned income tax credits received before January 1, 1980, as a result of Pub. L. 95-600, the Revenue Act of 1978.
(F) Payments received from the youth incentive entitlement pilot projects, the youth community conservation and improvement projects and the youth employment and training programs under title IV of the Comprehensive Employment and Training Act Amendments of 1978 (Pub. L. 95-524).
(3)
(4)
(e)
(ii) The income eligibility standards for the Food Distribution Program shall be adjusted each January 1 and July 1, as necessary, to reflect changes in the Food Stamp Program income eligibility limits and standard deductions.
(2)
(i) Earned income shall include:
(A) All wages and salaries of an employee.
(B) The total gross income from a self-employment enterprise, including the net profit from the sale of any capital goods or equipment related to the business. Ownership of rental property shall be considered a self-employment enterprise. Payments from a roomer and returns on rental property shall be considered self-employment income.
(C) Training allowances from vocational and rehabilitative programs recognized by Federal, State or local governments, such as the Work Incentive Program, and programs authorized by the Comprehensive Employment and Training Act, to the extent they are not a reimbursement.
(ii) Unearned income shall include, but not be limited to:
(A) Assistance payments from Federal or Federally aided public assistance programs, such as Supplemental Security Income (SSI) or Aid to Families with Dependent Children (AFDC), General Assistance (GA) programs, or other assistance programs based on need.
(B) Annuities; pensions; retirement; veteran's or disability benefits; worker's or unemployment compensation; old-age, survivors, or social security benefits; strike benefits; foster care payments for children or adults.
(C) Support or alimony payments made directly to the household from nonhousehold members.
(D) Scholarships, education grants, fellowships, deferred payment loans for education, veteran's education benefit and the like in excess of amounts excluded under paragraph (e)(3)(iii) of this section.
(E) Payments from Government-sponsored programs, dividends, interest, royalties, and all other direct money payments from any source which can be construed to be a gain or benefit.
(F) The earned or unearned income of an individual disqualified from participation in the Food Stamp Program for fraud shall continue to be counted as income, less the pro rata share for the disqualified member. Procedures for calculating this pro rata share are described in § 283.7.
(iii) Income shall not include the following:
(A) Monies withheld from an assistance payment, earned income or other income source, or monies received from any income source which are voluntarily or involuntarily returned to repay a prior overpayment received from that income source.
(B) Child support payments received by AFDC recipients which must be transferred to the agency administering title IV-D of the Social Security Act of 1935, as amended, to maintain AFDC eligibility.
(3)
(i) Any gain or benefit which is not in the form of money payable directly to the household, including:
(A)
(B)
(ii) Any income in the certification period which is received too infrequently or irregularly to be reasonably anticipated, but not in excess of $30 in a quarter.
(iii) Education loans on which payment is deferred, grants scholarships, fellowships, veterans’ educational benefits, and the like to the extent that they are used for tuition and mandatory school fees. Mandatory fees are those charged to all students or those charged to all students within a certain curriculum. For example, uniforms, lab fees, or equipment charged to all students to enroll in a chemistry course would be excluded. However, transportation, supplies, and textbook expenses are not uniformly charged to all students and, therefore, would not be excluded as mandatory fees.
(iv) All loans, including loans from private individuals as well as commercial institutions, other than education loans on which repayment is deferred.
(v) Reimbursements for past or future expenses to the extent they do not exceed actual expenses. For example, reimbursements of flat allowances for job or training related expenses such as travel per diem, uniforms, and transportation to and from the job or training site are excluded as income.
(vi) Monies received and used for care and maintenance of a third party beneficiary who is not a household member.
(vii) The earned income (as defined in paragraph (e)(2)(i) of this section) of children who are members of the household, who are students at least half time and who have not attained their eighteenth birthday. The exclusion shall continue to apply during temporary interruptions in school attendance due to semester or vaction breaks, provided the child's enrollment will resume following the break. Individuals are considered children for purposes of this provision if they are under the parental control of another household member.
(viii) Money received in the form of a nonrecurring lump sum payment, including but not limited to, income tax refunds, rebates, or credits; retroactive lump-sum social security, SSI, public assistance, railroad retirement benefits or other payments, or retroactive lump-sum insurance settlements; refunds of security deposits on rental properties or utilities or lump-sum payments arising from land interests held in trust for, or by, a tribe. These payments shall be counted as resources in the month received unless specifically excluded from consideration as a resource by other Federal law.
(ix) The cost of producing self-employment income. The procedures for computing the cost of producing self-employment income are described in § 283.7(b)(1)(iii).
(x) Any income that is specifically excluded by any other Federal statute from consideration as income. The following Federal statutes provide such an exclusion.
(A) Reimbursements from the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (Pub. L. 91-646, section 216).
(B) Payments received under the Alaska Native Claims Settlement Act (Pub. L. 92-203, section 21(a)).
(C) Any payment to volunteers under Title II (RSVP, foster grandparents, and others) and title III (SCORE and ACE) of the Domestic Volunteer Services Act of 1973 (Pub. L. 93-113), as amended. Payments under title I (VISTA) to volunteers shall be excluded for those individuals receiving federally donated commodities, food stamps, or public assistance at the time they joined the title I program, except that households which are receiving an income exclusion for a VISTA or other title I subsistence allowance at the time of implementation of these rules shall continue to receive an income exclusion for VISTA for the length of their volunteer contract in effect at the time of implementation of these rules. Temporary interruptions in food distribution shall not alter the exclusion once an initial determination has been made. New applicants who are not receiving federally donated commodities, food stamps or public assistance at the time they joined VISTA shall have these volunteer payments included as earned income.
(D) Income derived from certain submarginal land of the United States which is held in trust for certain Indian tribes (Pub. L. 94-114, section 6).
(E) Payments received by certain Indian tribal members under Pub. L. 94-540 regarding the Grand River Band of Ottawa Indians.
(F) Payments from the Crisis Intervention Program (CIP) administered by the Community Services Administration (CSA).
(G) Payments received from the youth incentive entitlement pilot projects, the youth community conservation and improvement projects and the youth employment and training programs under title IV of the Comprehensive Employment and Training Act Amendments of 1978 (Pub. L. 95-524).
(f)
(2) Households shall also receive a deduction for the actual costs for the care of a child or other dependent when necessary for a household member to accept or continue employment or attend training or pursue education which is preparatory to employment. This deduction shall not exceed the maximum allowable deduction for dependent care costs allowable under the Food Stamp Program in the 48 States and the District of Columbia.
(a)
(2)
(3)
(4)
(5)
(6)
(i)
(ii)
(iii)
(iv)
(v)
(7)
(8)
(9)
(10)
(i)
(ii)
(b)
(ii) Income anticipated during the certification period shall be counted as income only in the month it is expected to be received, unless the income is averaged.
(iii)(A) Self-employment income which represents a household's annual support including the net profit from the sale of any capital goods or equipment related to the business shall be annualized over a 12-month period, even if the income is received in only a short period of time. For example, self-employment income received by farmers shall be averaged over a 12-month period if the income represents the farmer's annual support.
(B) Self-employment income which represents only a part of a household's annual support, including the net profit from the sale of any capital goods or equipment related to the business, shall be averaged over the period of time the income is intended to cover. For example, self-employed vendors who work only in the summer and supplement their income from other sources during the balance of the year shall have their self-employment income averaged over the summer months rather than a 12-month period.
(C) For the period of time over which self-employment income is determined, the State agency shall add all gross self-employment income, exclude the cost of producing the self-employment income and divide the net self-employment income by the number of months over which the income will be averaged. The allowable costs of producing self-employment income include but are not limited to, the identifiable costs of labor, stock, raw materials, seed and fertilizer, interest paid to purchase income producing property, insurance premiums, and taxes paid on income producing property.
(D) In determining net self-employment income, payments on the principal of the purchase price of income-producing real estate and capital assets, equipment, machinery, and other durable goods, net losses from previous periods, Federal, State, and local income taxes, money set aside for retirement purposes, and other work-related personal expenses (such as transportation to and from work) will not be allowable costs of doing business.
(iv) The monthly net self-employment income shall be added to any other earned income received by the household. The total monthly earned income, less the 20 percent earned income deduction, shall then be added to all monthly unearned income received by the household.
(v) Allowable costs for dependent care shall be subtracted from the household's total monthly income to determine net monthly income.
(vi) The total net monthly income shall be compared to the income eligibility standard for the appropriate household size to determine the household's eligibility.
(2)
(ii) Certification periods shall conform to calendar months. The first month in the certification period of initial applicants shall be the month in which eligibility is determined. For example, if a household submits an application in late January and the household is determined eligible on the fifth working day which falls in February, a six-month certification period would include February through July. Upon recertification, the certification period will begin with the month following the last month of the previous certification period.
(iii) A household shall be assigned a certification period for as long a period as the household's circumstances are expected to remain sufficiently stable such that the household is expected to continue to meet the program's eligibility standards. In no event shall a certification period exceed one year.
(3)
(ii)
(iii)
(B) In State agencies that have elected joint public assistance or general assistance and Food Distribution processing, the notice of adverse action shall be considered timely if the advance notice period conforms to that period of time defined by the State agency as an adequate notice period for its public or general assistance caseload, provided that the period includes at least 10 days from the date the notice is mailed to the date upon which the action becomes effective. In circumstances other than joint processing, the advance notice shall be considered timely if the advance notice period includes at least 10 and no more than 20 days from the date the notice is mailed to the date upon which the action becomes effective.
(C) The notice of adverse action shall be considered adequate if it explains in easily understandable language: The reason for the proposed action, the household's right to request a fair hearing, when the proposed action will take effect, the telephone number and address of someone to contact for additional information and the availability of continued benefits. If there is an individual or organization available which provides free legal representation, the notice shall also advise the household of the availability of the service. The State agency shall consult with the ITO in developing the notice of adverse action.
(D) The State agency shall continue distribution of commodities to the household after the end of the adverse notice period if the household requests a fair hearing during the advance notice period.
(c)
(2) If the State agency determines that the household is no longer eligible or reduces the amount of commodities due the household because the household has lost a member or members, the State agency shall provide the household with a notice of adverse action not later than ten days after the change is reported. If the reported change increases the amount of commodities due the household, the household shall be notified that the increase shall be effective not later than the month following the date the change was reported.
(d)
(2) The State agency shall approve or deny a household's application for recertification and notify the household of that determination prior to the expiration of the household's current certification period. Households applying for recertification in the last month of the current certification period must be provided an opportunity to obtain commodity distribution on an uninterrupted basis.
(3) The State agency shall continue distribution of commodities to the household denied at the point of recertification if the household timely requests a fair hearing.
(e)
(2)
(3)
(ii) During the time a household member is disqualified, the eligibility and food distribution benefits of any remaining household members shall be determined as follows:
(A)
(B)
(C)
(f)
(2) The State agency shall process all applications for PA or GA as applications for the Food Distribution Program as well, unless the household clearly indicates on a space on the application that the household does not want commodities. The State agency shall conduct a single interview for PA or GA and Food Distribution Program eligibility, unless the State agency is unable to do so within the Food Distribution Program processing standards specified in § 283.7(a)(7) and § 283.7(a)(9). In such cases the State agency shall provide separate certification for PA or GA and Food Distribution Program eligibility.
(3) The State agency may verify those factors of eligibility which must be verified for PA or GA, under PA or GA rules, but must follow the Food Distribution Program rules for all other factors.
(4) PA households have the same reporting requirements as any other food distribution household. PA households which report a change in circumstances to the PA worker shall be considered to have reported the change for food distribution purposes. All of the requirements pertaining to reporting changes for PA households shall be applied to GA households in project areas where GA and food distribution cases are processed jointly.
(5) The State agency must follow all Food Distribution Program timeliness
(g)
(2)
(ii)
(3)
(4)
(5)
(6)
(i) The request is not received within the time period specified in paragraph (g)(4) of this section;
(ii) The request is withdrawn in writing by the household or its representative; or
(iii) The household or its representative fails, without good cause, to appear at the scheduled hearing.
(7)
(i) Advise the household or its representative of the name, address, and the phone number of the person to notify in the event it is not possible for the household to attend the scheduled hearing.
(ii) Specify that the State agency will dismiss the hearing request if the household or its representative fails to appear for the hearing without good cause.
(iii) Include the State agency hearing procedures and any other information that would provide the household with an understanding of the proceedings, and that would contribute to the effective presentation of the household's case.
(iv) Explain that the household or representative may examine the casefile prior to the hearing.
(8)
(i) Administer oaths or affirmations if required by the State;
(ii) Ensure that all relevant issues are considered;
(iii) Request, receive and make part of the record all evidence determined necessary to decide the issues being raised;
(iv) Regulate the conduct and course of the hearing consistent with due process to ensure an orderly hearing; and
(v) Render a hearing decision in the name of the State agency, in accordance with paragraph (g)(11) of this section, which will resolve the dispute.
(9)
(10)
(i) Examine all documents and records to be used at the hearing at a reasonable time before the date of the hearing, as well as during the hearing. The contents of the casefile, including the application forms and documents of verification used by the State agency shall be made available, provided the confidential information is protected from release. The State agency shall provide a free copy of the relevant portions of the casefile if requested by the household or its representative. Confidential information that is protected from release and other documents or records which the household will not otherwise have an opportunity to contest or challenge shall not be introduced at the hearing or affect the hearing official's decision.
(ii) Present the case or have it presented by a legal counsel or other person.
(iii) Bring witnesses.
(iv) Advance arguments without undue interference.
(v) Question or refute any testimony or evidence, including an opportunity to confront and cross-examine adverse witnesses.
(vi) Submit evidence to establish all pertinent facts and circumstances in the case.
(11)
(ii) A decision by the hearing official shall be binding on the State agency and shall summarize the facts of the case, specify the reasons for the decision and identify the supporting evidence and the pertinent FCS regulations. The decision shall become a part of the record.
(iii) The household shall be advised of the decision of the hearing official and of the right to pursue judicial review.
(12)
(ii) An agency conference for households requesting an immediate resolution by a higher authority of an eligibility issue shall be scheduled within four working days of the request unless the household requests that it be scheduled later or states that it does not wish to have an agency conference.
(a)
(b)
(c)
(1) Adequate and appropriate storage facilities are maintained. The facilities shall be clean and neat and safe-guarded against theft, damage, insects, rodents and other pests.
(2) Department recommended dunnage, stacking and ventilation methods are followed.
(3) Commodities are stacked in a manner which facilitates an accurate inventory.
(4) Commodities are issued on a first-in, first-out basis.
(5) Commodities held in storage for a protracted period of time are reinspected prior to issuance.
(6) Out-of-condition commodities are disposed of in accordance with Department approved methods.
(7) Notification is provided to certified households of the location of distribution sites and days and hours of distribution.
(8) An adequate supply of commodities which are available from the Department is on hand at all distribution sites.
(9) Sufficient distribution sites, either stationary or mobile, are geographically located or routed in relation to population density of eligible households.
(10) Days and hours of distribution are sufficient for caseload size and convenience.
(11) Households are advised they may refuse any commodity not desired, even if the commodities are prepackaged by household size.
(12) Emergency issuance of commodities will be made to households certified for expedited service in accordance with the provisions of § 283.7(b)(9).
(13) Eligible households or authorized representatives are identified prior to the issuance of commodities.
(14) Authorized signatures are obtained for commodities issued and the issue date recorded.
(15) Posters are conspicuously displayed advising program participants to accept only those commodities, and in such quantities, as will be consumed by them.
(16) Complete and current records are kept of all commodities received, issued, transferred, and on hand and of any inventory overages, shortages, and losses.
(17) A list of commodities offered by the Department is displayed at distribution sites so that households may indicate preferences for future orders.
(d)
(e)
(f)
(a)
(b)
(1) Uniform requirements for the adminstration of funds to State agencies; and
(2) Principles for determining costs applicable to activities assisted by the Food Stamp Program funds provided to State agencies. The provisions of part 277 are generally adaptable to this section and the appropriate provisions shall be used in complying with paragraphs (b) and (f) of this section.
(c)
(2) Approval of the application by FCS shall be a prerequisite to the payment of any funds to State agencies.
(d)
(2) FCS shall review and evaluate applications submitted by State agencies for administrative funds available under this section in the following order of priority and shall give preference in making payments of funds under this section in the same order of priority:
(i) Applications from State agencies which desire to continue a Food Distribution Program now in operation,
(ii) Applications from State agencies, in the order received, which FCS determines are immediately capable of effectively and efficiently administering the Program, and
(iii) Applications from other States agencies, in the order received.
(e)
(2) The Letter of Credit funding method shall be done in conjunction with Treasury Department procedures, Treasury Circular No. 1075 and through an appropriate Treasury Regional Disbursing Office (RDO). The Standard Form 183, “Request for Payment on Letter of Credit and Status of Funds Report,” shall be correctly prepared and certified by a duly appointed official of the State for requesting payment from an RDO.
(3) The advance by Treasury check method shall be done by use of the Standard Form 270, “Request for Advance or Reimbursement,” and procedures associated with its use. State agencies receiving payments under this method may request payments before cash outlays are made.
(4) Any State agency receiving payment under the Letter of Credit method or the advance by Treasury check method shall have in place and in operation, a financial management system which meets the standards for fund control and accountability prescribed in part 277 of this chapter, as amended. The State agency shall demonstrate on a continuing basis its willingness and ability to have and to function within procedures that will minimize the time lapse between the transfer of funds and its disbursement to meet obligations. For any State agency which does not meet the requirement of this paragraph, the reimbursement by Treasury check method shall be the preferred method for FCS to make payments to that State agency.
(f)
(g)
(i) The State agency is not administering the Food Distribution Program in accordance with its plan of operation approved by FCS and the provisions of this part, or
(ii) The amount of funds which the State agency requested from FCS is in excess of actual need, based on reports of expenditures and current projections of Program needs.
(iii) Circumstances or conditions justify the return reallocation or transfer of funds to accomplish the purpose of this part.
(2) The State agency shall return to FCS within 90 days following the close of each Federal fiscal year any funds received under this section which are unobligated at that time.
(h)
(i) Keep such accounts and records as may be necessary to enable FCS to determine whether there has been compliance with this section, and
(ii) Adhere to the retention and custodial requirements for records set forth in § 277.4 of this chapter.
(2) The State agency receiving funds either through a Treasury RDO Letter of Credit system or Treasury check shall submit quarterly reports to FCS on Form SF-269, “Financial Status Report,” by the 30th day after close of the reporting quarter and shall submit such other reports as may be required by FCS.
(3) The appropriate provisions of part 277 are adaptable to this section for additional guidance.
Pub. L. 97-98, sec. 1338; Pub. L. 95-113.
This part sets the requirement under which commodities (available under part 250 of this chapter) may be distributed to households residing in FCS service areas in Oklahoma. This part also sets the conditions for administration of the Food Distribution Program by eligible Oklahoma tribes determined capable by the Department.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(a)
(b) Section 253.4 Administration, does not apply and is replaced by § 254.3.
(c)
(d)
(e)
(a)
(b)
(i) Order and properly store commodities,
(ii) Certify eligible households,
(iii) Arrange for physical issuance of commodities,
(iv) Keep appropriate records and submit required reports,
(v) Budget and account for administrative funds,
(vi) Determine the food preferences of households, and
(vii) Conduct on-site reviews of certification and distribution procedures and practices.
(2) FCS shall make a determination of potential ITO capability within 60 days of receipt of a completed application for the Food Distribution Program. FCS may, however, extend the period for determination of ITO capability if FCS finds that a given ITO's eligibility under § 254.3 is difficult to establish.
(3) FCS shall, if requested by an ITO which has been determined by FCS to be potentially capable of administering a Food Distribution Program, provide the ITO's designees with appropriate training and technical assistance to prepare the ITO to take over program administration. In determining what training and technical assistance are necessary, FCS shall consult with the ITO and other sources, such as the BIA.
(c)
(a)
(b)
(c)