[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Rules and Regulations]
[Pages 72898-72907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33619]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 250 and 251
RIN 0584-AC49
Food Distribution Programs: Implementation of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (Welfare
Reform)
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends provisions of the Food Distribution
Program regulations and the Emergency Food Assistance Program (TEFAP)
regulations to implement certain provisions of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996,
commonly known as Welfare Reform, while generally streamlining and
clarifying these regulations. In accordance with the Welfare Reform
legislation, the provisions contained in this rule address various
changes required by the repeal of section 110 of the Hunger Prevention
Act of 1988, which authorized the former Soup Kitchens/Food Banks
Program, the former beneficiaries of which are now served by an
expanded TEFAP. It amends the definitions relating to organizational
eligibility in TEFAP to reflect the program consolidation, and to
achieve consistency with the Emergency Food Assistance Act of 1983 as
amended by Welfare Reform. Changes to these and other definitions also
provide greater clarity to the regulations. As mandated by Welfare
Reform, this rule also changes the required content and frequency of
submission of the TEFAP State plan of operation, and encourages State
agencies to create advisory boards comprised of public and private
entities with an interest in the distribution of TEFAP commodities. In
addition, this rule broadens the allowable uses of TEFAP administrative
funds at the State and local levels, and provides greater flexibility
for State agencies in meeting the TEFAP maintenance-of-effort
[[Page 72899]]
requirement. Finally, in order to reduce the paperwork burden and
afford State agencies greater flexibility, this rule makes
discretionary changes in TEFAP recordkeeping, monitoring, and reporting
requirements.
EFFECTIVE DATE: This final rule is effective February 28, 2000.
FOR FURTHER INFORMATION CONTACT: Lillie Ragan, Assistant Branch Chief,
Household Programs Branch, Food Distribution Division, Food and
Nutrition Service, U.S. Department of Agriculture, Room 612, 4501 Ford
Avenue, Alexandria, Virginia 22302, or telephone (703) 305-2662.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be not significant for purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget.
Regulatory Flexibility Act
This action has been reviewed with regard to the requirements of
the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The
Administrator of the Food and Nutrition Service (FNS) has certified
that this action will not have a significant economic impact on a
substantial number of small entities. The procedures in this rulemaking
would primarily affect FNS regional offices, and the State distributing
and recipient agencies that administer food distribution programs.
Private enterprises that enter into agreements for the storage of
donated food or meal service management would also be affected. While
some of these entities constitute small entities, a substantial number
will not be affected. Furthermore, any economic impact will not be
significant.
Unfunded Mandate Reform Act
Title II of the Unfunded Mandate Reform Act of 1995, Pub. L. 104-4,
(UMRA), establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, FNS
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires FNS to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or more in any one
year. Thus this proposed rule is not subject to the requirements of
sections 202 and 205 of the UMRA.
Executive Order 12372
These programs are listed in the Catalog of Federal Domestic
Assistance under 10.550, 10.568 and 10.569 and are subject to the
provisions of Executive Order 12372, which requires intergovernmental
consultation with State and local officials (7 CFR part 3015, Subpart V
and final rule-related notices published at 48 FR 29114, June 24, 1983
and 49 FR 22676, May 31, 1984).
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is intended to have preemptive effect
with respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the EFFECTIVE DATE section of the preamble.
There are no administrative procedures which must be exhausted prior to
any judicial challenge to the provisions of this rule or the
application of its provisions.
Paperwork Reduction Act
The reporting and recordkeeping requirements included in 7 CFR
parts 250 and 251 have been approved by the Office of Management and
Budget under OMB No. 0584-0293.
Background
On July 8, 1999, the Department of Agriculture (hereinafter
``USDA'' or ``Department'') published a proposed rule in the Federal
Register (64 FR 36978) to amend provisions of the Food Distribution
Program regulations and the TEFAP regulations to reflect changes
brought about in the administration of food distribution programs by
the Personal Responsibility and Work Opportunity Reconciliation Act of
1996, (hereinafter ``Welfare Reform''). The rule also proposed changes
which would clarify existing regulatory requirements and reduce the
burden associated with the administration of TEFAP. The specific
changes made by this rule were discussed in detail in the preamble to
the proposed rule, which provided a 60-day comment period.
Analysis of Comments Received
The Department received a total of 14 comment letters. Comment
letters were submitted by three State TEFAP agencies, one inter-church
local food pantry, seven food banks on the city, regional, state and
national levels, one national commodity distribution association, one
State community action program association, and one local human
resources council. The 14 commenters were generally enthusiastic in
their support for the rule. Seven of them supported implementation of
the proposed rule without change. Comments received are discussed in
detail below. For a complete understanding of the provisions contained
in this final rule, the reader should refer to the preamble of the
proposed rule.
Definition of Eligible Recipient Agency
As discussed in the proposed rule, a definition of ``eligible
recipient agency'' (ERA) as contained in section 251.3(d) of the
proposed rule is not found in current regulations. This definition was
included in the proposed rule to clarify the types of organizations
eligible to receive TEFAP commodities and administrative funds,
provided they meet all pertinent eligibility criteria. Three comments
were received concerning the list of organizations identified in the
definition of ERA under subparagraph (6).
One commenter expressed concern about the inclusion of ``disaster
relief programs'' as a type of ERA. He said that if the new definition
allows provision of food to such organizations on the same basis as
other ERAs, i.e., without USDA approval, then current regulations must
be clarified. The definition of ERA contained in the Emergency Food
Assistance Act of 1983 (EFAA) includes disaster relief programs as a
type of ERA. Therefore, they were included in the proposed regulatory
definition of ERA. However, as stated above, such organizations would
be required to meet TEFAP eligibility criteria (i.e., if the
organization provides commodities to households, it must administer a
means test; if it uses TEFAP commodities to provide prepared meals, it
must serve predominantly needy persons). This contrasts with the
regulatory requirements governing the distribution of commodities to
disaster organizations for use in providing assistance in
Presidentially declared disasters and situations of distress as set
forth in
[[Page 72900]]
section 250.43 and section 250.44 respectively. Under sections 250.43
and 250.44, State agencies must obtain approval from USDA prior to
making commodities available for distribution to households in disaster
or emergency situations. Once approval is obtained, commodities from
TEFAP (and other food distribution programs) can be made available to
disaster organizations and distributed to disaster victims without
regard to TEFAP eligibility requirements.
Another commenter recommended that the definition be revised to
make summer camps and child nutrition programs which receive assistance
through other Federal nutrition assistance programs ineligible for
TEFAP commodities and administrative funds. As discussed in the
proposed rule, Welfare Reform defines ERA to include summer camps for
children and child nutrition programs. Therefore, the Department does
not have the authority to categorically exclude such organizations from
participation in the program.
The same commenter requested that the definition be revised to
eliminate reference to the Nutrition Program for the Elderly (NPE), and
add ``other nutrition projects that serve on-site or home-delivered
meals to needy elderly people'' since sites participating in NPE
receive Federal support from other sources. As discussed above, the
list of organizations contained in the definition of ERA in the
proposed rule reflects the organizations listed in the definition of
ERA in the EFAA. The Department lacks the authority to exclude a
clearly eligible organizational type from participation in the program.
In addition, revising the definition in the manner suggested would not
make ineligible those NPE sites that meet the eligibility criteria.
Another commenter requested that community action programs be
specifically mentioned as a type of EFO, and noted that they were
mentioned in the preamble of the proposed rule, but not in the
regulatory text. Specific reference to community action programs was
included in the preamble of the proposed rule as an example of the
types of organizations that could be considered an EFO. However, such
reference does not appear in the regulatory text because it is not
included in the definition set forth in the EFAA. Furthermore, it would
be impossible to identify all the different types of organizations that
could be considered an EFO. This in no way, however, affects their
eligibility to participate in the program.
We appreciate the recommendations made by the commenters. However,
for the reasons described above, this final rule retains the definition
of ERA as originally proposed.
Eligible Recipient Agency Eligibility Criteria
Section 251.5(a)(2) of the proposed rule would limit the
eligibility of organizations providing prepared meals to those which
serve ``predominantly needy'' persons. Two commenters, although
enthusiastic supporters of implementation of the proposed rule without
change, expressed concern about the ``new'' standard. They believe that
the new standard will require additional monitoring to ensure that it
does not restrict access of the needy to TEFAP. The EFAA requires that
TEFAP commodities be used to provide assistance to those in need. Prior
to Welfare Reform, TEFAP regulations (7 CFR part 251) only addressed
the distribution of TEFAP commodities to households through
organizations which impose a means test. With the consolidation of the
Soup Kitchen/Food Bank Program (SK/FB) into TEFAP, it became necessary
to establish requirements relative to the distribution of commodities
to organizations which provide prepared meals to ensure that such
organizations are providing nutrition assistance to the needy. Upon
reviewing the provisions relative to the distribution of SK/FB
commodities contained in section 250.52, it was determined that
limiting participation of organizations that provide prepared meals to
those that serve ``predominantly'' needy persons would meet the
requirements of the EFAA. In addition, this limitation is no more
stringent than the limitations that were placed on State agencies in
the distribution of SK/FB commodities. Therefore, the Department does
not expect needy persons to be adversely affected as a result of
establishing this criterion for these types of organizations. Thus,
this provision is retained in section 251.5(a)(2) as proposed.
Another commenter was concerned about the provision contained in
section 251.5(a)(3)(iii) of the proposed rule which states that
organizations ``organized or operated exclusively for religious
purposes'' are automatically tax exempt under Internal Revenue Service
(IRS) rules. The commenter expressed concern that States and ERAs may
be unfamiliar with IRS rules, and asked if organizations would be
allowed to simply self-declare that they meet this definition, or if
they would be required to provide documentation. Under IRS rules, such
organizations effectively self-declare their status, i.e., once having
claimed the tax exemption, they are deemed to possess it unless
successfully challenged by the IRS. Therefore, the rule did not propose
to require State agencies to obtain documentation.
Some of the comments have led the Department to believe that the
language of the proposed rule regarding eligibility of organizations
for TEFAP is in need of further clarification. Section 251.2(c)(2)
states that ``[p]rior to making donated foods or administrative funds
available, State agencies must enter into a written agreement with
eligible recipient agencies to which they plan to distribute donated
foods and/or administrative funds. State agencies must ensure that
eligible recipient agencies in turn enter into a written agreement with
eligible recipient agencies to which they plan to distribute donated
foods and/or administrative funds before donated foods or
administrative funds are transferred between any two eligible recipient
agencies.'' However, section 251.5(a) of the proposed rule speaks only
in terms of commodities and does not mention administrative funds,
leading to possible confusion. Therefore, section 251.5(a) of the
proposed rule is revised to specifically include administrative funds.
Recipient Eligibility Criteria
One commenter recommended that the criteria for recipient
eligibility under section 251.5(b) of the proposed rule be expanded to
include ``needy persons in situations of emergency and distress due to
disasters.'' As discussed in detail above, commodities are made
available for distribution to households in disasters and situations of
emergency and distress in accordance with the provisions contained in
sections 250.43 and 250.44. These provisions permit TEFAP commodities
to be distributed to households without regard to income only after
proper authorization has been obtained.
Two commenters recommended that section 251.5(b)(2), which requires
the use of income-based standards in determining a household's
eligibility to receive TEFAP commodities, be removed and replaced with
language that would permit the use of non-income-based eligibility
criteria. The EFAA does not explicitly require income-based standards
to be met by TEFAP recipients. However, TEFAP regulations have always
required the use of such criteria. This requirement is necessary in
order to ensure that only those households in need of assistance
[[Page 72901]]
receive commodities. In addition, it is consistent with eligibility
requirements for other nutrition assistance programs, as well as other
types of Federal assistance, such as the Temporary Assistance to Needy
Families Program.
Reduction in Administrative Burden (State Agreements with Eligible
Recipient Agencies and TEFAP State Distribution Plan)
Several commenters expressed interest in reductions in
administrative burdens beyond those set forth in the proposed rule. The
Department believes it has come close to the proper balance between
reduced administrative burden and sufficient program accountability.
However, in reviewing the provisions contained in the proposed rule, it
has been determined that the administrative burden can be further
reduced by making minor changes in the following requirements. Section
251.2(d)(1)(iii) of the proposed rule would require the agreement to
include ``the name of the person responsible for administering the
program in the receiving eligible recipient agency.'' With the move to
permanent agreements, it is prudent to avoid requiring information that
could change frequently. Therefore, the final rule is revised to remove
subparagraph (iii) in section 251.2(d)(1) of the proposed rule.
Section 251.6(a)(1) of the proposed rule would require State
agencies to include ``[a] designation of the State agency responsible
for distributing commodities and administrative funds provided under
this part, the address of such agency, and the name of the agency
official entrusted with binding signature authority'' in their
distribution plan. Under Welfare Reform, TEFAP State plans are to be
submitted every four years instead of annually, which was the previous
regulatory requirement. Thus, while TEFAP State plans do not have the
potential to be permanent, as do State agreements with ERAs, the plans
are now of sufficient duration to justify a re-evaluation of this
provision. The Department has determined that the name of the agency
official entrusted with binding signature authority also falls into the
category of information that could change frequently. Therefore, the
final rule is amended to remove this element of the requirement in
section 251.6(a)(1) of the proposed rule.
Disbursement of Administrative Funds
Two commenters, although both generally supporting implementation
of the proposed rule without change, expressed concern that the new
requirements in section 251.8 for documenting the 40 percent pass-
through of administrative funds may require additional monitoring.
Section 251.8(d)(3) of the current regulations requires, as mandated by
the EFAA, that State agencies pass through 40 percent of TEFAP
administrative funds to emergency feeding organizations (EFOs). Current
regulations also restrict the distribution of TEFAP administrative
funds to EFOs. (The proposed rule would amend the definition of EFO in
a way that does not materially affect the pass-through requirement.)
While section 251.8 of the proposed rule retains the 40 percent pass-
through requirement, the rule would permit the distribution of TEFAP
administrative funds to non-EFOs. However, as discussed in the preamble
to the proposed rule, State agencies which pass through 40 percent of
such funds to ERAs that are EFOs, as defined in section 251.3, will be
considered to have met the pass-through requirement. The Department
will continue to monitor the distribution of TEFAP administrative funds
by State agencies to ensure that they are in compliance with this
requirement. Therefore, while TEFAP administrative funds may be
distributed to non-EFOs under the provisions contained in the proposed
rule, monitoring activities at the State or local level will not be
affected.
Allowable Administrative Costs, Non-USDA Commodities
Upon further review of the proposed rule, the Department has
identified a need to revise section 251.8 to clarify provisions
relative to the distribution of TEFAP administrative funds to cover
costs associated with the distribution of non-USDA commodities. Section
251.5(a) of the proposed rule requires that all organizations,
including those that distribute only non-USDA commodities, must qualify
as ERAs in all respects under section 251.3(d) in order to receive
TEFAP administrative funds. Section 251.8(d) of the proposed rule
refers to ``organizations which distribute only non-USDA commodities.''
For the sake of clarity, this rule revises section 251.8(d) to remove
the term ``organizations'' and replaces it with ``ERA.''
Recordkeeping and Reporting Requirements
The proposed rule's reduction in the administrative burden for
TEFAP drew the most praise from commenters. It was the factor most
often noted by those who merely wrote to urge speedy implementation of
the rule. However, one commenter expressed concern about the amendment
to section 251.10(d)(2) which eliminates the requirement that State
agencies report to FNS on a quarterly basis the total number of
households served in TEFAP. While the commenter noted that this
requirement has already been eliminated by TEFAP Policy Memorandum No.
12, dated December 23, 1997, the State agency has continued to collect
and maintain such data. These data have been used to document the
success of the program and for allocating resources at the local level.
The Department is aware that such information is used by some ERAs and
State agencies for various purposes. However, as discussed in the
preamble to the proposed rule, the information is no longer useful to
FNS. Therefore, while section 251.10(d)(2) of the proposed rule would
no longer require that State agencies report such information to FNS,
it does not prohibit State agencies from collecting household
participation data from ERAs.
One commenter recommended that requirements associated with
maintaining inventory records be kept to a minimum. While these
requirements were not addressed in the proposed rule, TEFAP agencies
have raised a number of questions and concerns about this issue. The
Department is in the process of preparing guidance which will clarify
what the Federal requirements are and explain the minimum requirements
a State agency could choose to adopt in order to comply with the
regulations.
Monitoring Requirements
Commenters were all in favor of the proposed rule's reduction in
TEFAP monitoring requirements. However, one commenter recommended that
sections 251.2(d)(2)(i) and 251.10(e) be revised to permit State
agencies to delegate to ERAs with which States have agreements, the
authority to conduct reviews of ERAs with which those ERAs in turn have
agreements. Only in instances in which deficiencies are identified
would the ERA be required to report to the State agency, which would
assist in effecting corrective action. The Department is appreciative
of the need to reduce the administrative burden as much as possible,
but this goal must be balanced with the need for a certain level of
accountability necessary to insure program integrity. The Department
does not believe this balance can be achieved if State agencies are
allowed to delegate authority for conducting reviews of ERAs to other
ERAs. There must be a unified, independent and objective review
authority. Therefore, the
[[Page 72902]]
Department cannot adopt this recommendation.
The commenter also expressed concern about the burden associated
with selecting ERAs for review based on the dollar value of TEFAP
commodities distributed or deficiencies that have been identified
through various means. As discussed in the preamble to the proposed
rule, State agencies would be afforded flexibility to develop a system
for selecting ERAs for review. No selection criteria are mandated. The
criteria listed in the preamble are merely suggestions regarding how to
select sites for review. The only requirement is that the system must
ensure that deficiencies in program administration are detected and
resolved in an effective and efficient manner.
In reviewing the provisions contained in section 251.10, the
Department has determined the following changes are necessary for
clarification purposes. First, section 251.10(e)(3) of the proposed
rule is being revised to include civil rights in the list of areas to
be covered during a review, given the fact the revised FNS Instruction
113-3 will specify that on-site civil rights reviews be conducted at
the frequency established in section 251.10(e). Since these reviews
must be conducted at the same frequency, State agencies will likely
consolidate civil rights and program reviews into one effort. Second,
section 251.2(d)(2)(i) of the proposed rule would prohibit State
agencies from delegating the authority to establish eligibility
criteria for organizations or recipients, or for conducting reviews of
ERAs. The prohibitions on delegating authority to establish eligibility
criteria are then repeated in section 251.5(c). For the sake of
consistency, section 251.10(e)(1) of the proposed rule is being revised
to include the prohibition on the delegation of authority to conduct
reviews.
Maintenance of Effort
Two commenters, although both generally supporting implementation
of the proposed rule without change, were concerned about the new
requirements for documenting the State maintenance-of-effort
requirement, in section 251.10(h). The commenters suggested
``additional monitoring'' would be needed to insure compliance. This
requirement is applied to State agencies, and compliance is monitored
by the Department. Therefore, it will have no impact on monitoring
activities at the State or local level.
Alien Provisions
Two commenters requested that the rule make clear that
organizations are not required to determine the citizenship status of
any recipient pursuant to the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (Pub. L. 104-208). As noted in the preamble
to the proposed rule, the provisions of Welfare Reform affecting aliens
do not require that States in any way restrict access of aliens to
TEFAP. Welfare Reform gives States the option to provide, or not
provide, program benefits to any individual who is not a citizen or a
qualified alien. As discussed in the preamble to the proposed rule, the
Department intends to publish a separate rulemaking to incorporate the
provisions of Welfare Reform regarding eligibility of aliens for TEFAP
and other food distribution programs.
Miscellaneous Comments
One commenter expressed concerns about the various problems
involved in dealing with commodity losses and the procedures involved
in establishing claims for those losses. The Department appreciates the
comments provided and will consider them in developing proposals for a
separate rulemaking aimed at addressing issues associated with
commodity losses and claims.
Another commenter requested that an indemnification for product
liability be granted by USDA to States and ERAs, referencing the Good
Samaritan Act. Such language could also be included in all agreements
between States and ERAs and between ERAs. As praiseworthy as this
recommendation is, unfortunately the Good Samaritan Food Donation Act
(Pub. L. 101-610) applies to donors of food only. Therefore, USDA lacks
the authority to extend its protections to distributors of such food.
List of Subjects
7 CFR Part 250
Aged, Agricultural commodities, Business and industry, Food
assistance programs, Food donations, Food processing, Grant programs-
social programs, Indians, Infants and children, Commodity loan
programs, Reporting and recordkeeping requirements, School breakfast
and lunch programs, Surplus agricultural commodities.
7 CFR Part 251
Aged, Agricultural commodities, Business and industry, Food
assistance programs, Food donations, Grant programs-social programs,
Indians, Infants and children, Commodity loan programs, Reporting and
recordkeeping requirements, School breakfast and lunch programs,
Surplus agricultural commodities.
Accordingly, 7 CFR parts 250 and 251 are amended as follows:
PART 250--DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS
TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION
1. The authority citation for part 250 continues to read as
follows:
Authority: 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.
Sec. 250.3 [Amended]
2. In Sec. 250.3, the definitions of Food bank and Soup kitchen are
removed.
Sec. 250.13 [Amended]
3. In Sec. 250.13:
a. Paragraph (a)(1)(iv) is amended by removing the words
``emergency feeding organizations'' wherever they appear and adding the
words ``eligible recipient agencies'' in their place.
b. The last sentence of paragraph (k)(2) is amended by removing the
words ``, including, for example, State Food Distribution Advisory
Council Reports''.
Sec. 250.24 [Amended]
4. In Sec. 250.24, paragraph (b)(4) is removed, and paragraphs
(b)(5) and (b)(6) are redesignated as paragraphs (b)(4) and (b)(5),
respectively.
Sec. 250.41 [Amended]
5. In Sec. 250.41, the first sentence of paragraph (a)(1) is
amended by removing the words ``With the exception of section 110
commodities, which are to be distributed in accordance with the
provisions of Sec. 250.52, the'' and adding in their place ``The''.
Sec. 250.52 [Removed]
6. Section 250.52 is removed.
PART 251--THE EMERGENCY FOOD ASSISTANCE PROGRAM
1. The authority citation for part 251 continues to read as
follows:
Authority: 7 U.S.C. 7501-7516.
Sec. 251.1 [Amended]
2. In Sec. 251.1, the word ``Temporary'' is removed.
3. In Sec. 251.2:
a. Paragraph (a) is amended by adding the heading ``Food and
Nutrition Service.'';
[[Page 72903]]
b. Paragraph (b) is amended by adding the heading ``State
Agencies.'', by removing the words ``emergency feeding organizations''
and by adding the words ``eligible recipient agencies'' in their place;
c. Paragraph (c) is revised; and
d. Paragraph (d) is added.
The revision and addition read as follows:
Sec. 251.2 Administration.
* * * * *
(c) Agreements. (1) Agreements between Department and States. Each
State agency that distributes donated foods to eligible recipient
agencies or receives payments for storage and distribution costs in
accordance with Sec. 251.8 must perform those functions pursuant to an
agreement entered into with the Department. This agreement will be
considered permanent, with amendments initiated by State agencies, or
submitted by them at the Department's request, all of which will be
subject to approval by the Department.
(2) Agreements between State agencies and eligible recipient
agencies, and between eligible recipient agencies. Prior to making
donated foods or administrative funds available, State agencies must
enter into a written agreement with eligible recipient agencies to
which they plan to distribute donated foods and/or administrative
funds. State agencies must ensure that eligible recipient agencies in
turn enter into a written agreement with any eligible recipient
agencies to which they plan to distribute donated foods and/or
administrative funds before donated foods or administrative funds are
transferred between any two eligible recipient agencies. All agreements
entered into must contain the information specified in paragraph (d) of
this section, and be considered permanent, with amendments to be made
as necessary, except that agreements must specify that they may be
terminated by either party upon 30 days' written notice. State agencies
must ensure that eligible recipient agencies provide, on a timely
basis, by amendment to the agreement, or other written documents
incorporated into the agreement by reference if permitted under
paragraph (d) of this section, any information on changes in program
administration, including any changes resulting from amendments to
Federal regulations or policy.
(d) Contents of agreements between State agencies and eligible
recipient agencies and between eligible recipient agencies. (1)
Agreements between State agencies and eligible recipient agencies and
between eligible recipient agencies must provide:
(i) That eligible recipient agencies agree to operate the program
in accordance with the requirements of this part, and, as applicable,
part 250 of this chapter; and
(ii) The name and address of the eligible recipient agency
receiving commodities and/or administrative funds under the agreement.
(2) The following information must also be identified, either in
the agreement or other written documents incorporated by reference in
the agreement:
(i) If the State agency delegates the responsibility for any aspect
of the program to an eligible recipient agency, each function for which
the eligible recipient agency will be held responsible; except that in
no case may State agencies delegate responsibility for establishing
eligibility criteria for organizations in accordance with
Sec. 251.5(a), establishing eligibility criteria for recipients in
accordance with Sec. 251.5(b), or conducting reviews of eligible
recipient agencies in accordance with Sec. 251.10(e);
(ii) If the receiving eligible recipient agency is to be allowed to
further distribute TEFAP commodities and/or administrative funds to
other eligible recipient agencies, the specific terms and conditions
for doing so, including, if applicable, a list of specific
organizations or types of organizations eligible to receive commodities
or administrative funds;
(iii) If the use of administrative funds is restricted to certain
types of expenses pursuant to Sec. 251.8(e)(2), the specific types of
administrative expenses eligible recipient agencies are permitted to
incur;
(iv) Any other conditions set forth by the State agency.
4. Section 251.3 is revised to read as follows:
Sec. 251.3 Definitions.
(a) The terms used in this part that are defined in part 250 of
this chapter have the meanings ascribed to them therein, unless a
different meaning for such a term is defined herein.
(b) Charitable institution (which is defined differently in this
part than in part 250 of this chapter) means an organization which--
(1) Is public, or
(2) Is private, possessing tax exempt status pursuant to
Sec. 251.5(a)(3); and
(3) Is not a penal institution (this exclusion also applies to
correctional institutions which conduct rehabilitation programs); and
(4) Provides food assistance to needy persons.
(c) Distribution site means a location where the eligible recipient
agency actually distributes commodities to needy persons for household
consumption or serves prepared meals to needy persons under this part.
(d) Eligible recipient agency means an organization which--
(1) Is public, or
(2) Is private, possessing tax exempt status pursuant to
Sec. 251.5(a)(3); and
(3) Is not a penal institution; and
(4) Provides food assistance--
(i) Exclusively to needy persons for household consumption,
pursuant to a means test established pursuant to Sec. 251.5 (b), or
(ii) Predominantly to needy persons in the form of prepared meals
pursuant to Sec. 251.5(a)(2); and
(5) Has entered into an agreement with the designated State agency
pursuant to Sec. 251.2(c) for the receipt of commodities or
administrative funds, or receives commodities or administrative funds
under an agreement with another eligible recipient agency which has
signed such an agreement with the State agency or another eligible
recipient agency within the State pursuant to Sec. 251.2(c); and
(6) Falls into one of the following categories:
(i) Emergency feeding organizations (including food banks, food
pantries and soup kitchens);
(ii) Charitable institutions (including hospitals and retirement
homes);
(iii) Summer camps for children, or child nutrition programs
providing food service;
(iv) Nutrition projects operating under the Older Americans Act of
1965 (Nutrition Program for the Elderly), including projects that
operate congregate Nutrition sites and projects that provide home-
delivered meals; and
(v) Disaster relief programs.
(e) Emergency feeding organization means an eligible recipient
agency which provides nutrition assistance to relieve situations of
emergency and distress through the provision of food to needy persons,
including low-income and unemployed persons. Emergency feeding
organizations have priority over other eligible recipient agencies in
the distribution of TEFAP commodities pursuant to Sec. 251.4(h).
(f) Food bank means a public or charitable institution that
maintains an established operation involving the provision of food or
edible commodities, or the products of food or edible commodities, to
food pantries, soup kitchens, hunger relief centers, or other food or
feeding centers that, as an
[[Page 72904]]
integral part of their normal activities, provide meals or food to feed
needy persons on a regular basis.
(g) Food pantry means a public or private nonprofit organization
that distributes food to low-income and unemployed households,
including food from sources other than the Department of Agriculture,
to relieve situations of emergency and distress.
(h) Formula means the formula used by the Department to allocate
among States the commodities and funding available under this part. The
amount of such commodities and funds to be provided to each State will
be based on each State's population of low-income and unemployed
persons, as compared to national statistics. Each State's share of
commodities and funds shall be based 60 percent on the number of
persons in households within the State having incomes below the poverty
level and 40 percent on the number of unemployed persons within the
State. The surplus commodities will be allocated to States on the basis
of their weight (pounds), and the commodities purchased under section
214 of the Emergency Food Assistance Act of 1983 will be allocated on
the basis of their value (dollars). In instances in which a State
determines that it will not accept the full amount of its allocation of
commodities purchased under section 214 of the Emergency Food
Assistance Act of 1983, the Department will reallocate the commodities
to other States on the basis of the same formula used for the initial
allocation.
(i) State agency means the State government unit designated by the
Governor or other appropriate State executive authority which has
entered into an agreement with the United States Department of
Agriculture under Sec. 251.2(c).
(j) Soup kitchen means a public or charitable institution that, as
an integral part of the normal activities of the institution, maintains
an established feeding operation to provide food to needy homeless
persons on a regular basis.
(k) Value of commodities distributed means the Department's cost of
acquiring commodities for distribution under this part.
5. In Sec. 251.4:
a. The words ``emergency feeding organization'', ``emergency
feeding organizations'' and ``emergency feeding organization's'' are
removed wherever they appear in the section, and the words ``eligible
recipient agency'', ``eligible recipient agencies'' and ``eligible
recipient agency's'' respectively are added in their place;
b. Paragraph (c)(1) is amended by removing the reference to
``Sec. 251.3(d)'' and adding a reference to ``Sec. 251.3(h)'' in its
place;
c. Paragraph (d)(3) is removed;
d. Paragraph (f)(5) is amended by removing the reference
``Sec. 250.15'' and adding in its place the reference ``Sec. 250.30'';
e. Paragraphs (g) and (h) are revised;
f. Paragraph (j) is amended by adding the words ``that has signed
an agreement with the respective State agencies'' after the words
``eligible recipient agency'';
The revisions read as follows:
Sec. 251.4 Availability of commodities.
* * * * *
(g) Availability and control of donated commodities. Donated
commodities will be made available to State agencies only for
distribution and use in accordance with this part. Except as otherwise
provided in paragraph (f) of this section, donated commodities not so
distributed or used for any reason may not be sold, exchanged, or
otherwise disposed of without the approval of the Department. However,
donated commodities made available under section 32 of Pub. L. 74-320
(7 U.S.C. 612c) may be transferred by eligible recipient agencies
receiving commodities under this part, or recipient agencies, as
defined in Sec. 250.3 of this chapter, to any other eligible recipient
agency or recipient agency which agrees to use such donated foods to
provide without cost or waste, nutrition assistance to individuals in
low-income groups. Such transfers will be effected only with prior
authorization by the appropriate State agency and must be documented.
Such documentation shall be maintained in accordance with
Sec. 251.10(a) of this part and Sec. 250.16 of this chapter by the
distributing agency and the State agency responsible for administering
TEFAP and made available for review upon request.
(h) Distribution to eligible recipient agencies--priority system
and advisory boards. (1) State agencies must distribute commodities
made available under this part to eligible recipient agencies in
accordance with the following priorities:
(i) First priority. When a State agency cannot meet all eligible
recipient agencies' requests for TEFAP commodities, the State agency
must give priority in the distribution of such commodities to emergency
feeding organizations as defined under Sec. 251.3(e). A State agency
may, at its discretion, concentrate commodity resources upon a certain
type or types of such organizations, to the exclusion of others.
(ii) Second priority. After a State agency has distributed TEFAP
commodities sufficient to meet the needs of all emergency feeding
organizations, the State agency must distribute any remaining program
commodities to other eligible recipient agencies which serve needy
people, but do not relieve situations of emergency and distress. A
State agency may, at its discretion, concentrate commodity resources
upon a certain type or types of such organizations, to the exclusion of
others.
(2) Delegation. When a State agency has delegated to an eligible
recipient agency the authority to select other eligible recipient
agencies, the eligible recipient agency exercising this authority must
ensure that any TEFAP commodities are distributed in accordance with
the priority system set forth in paragraphs (h)(1)(i) and (h)(1)(ii) of
this section. State agencies and eligible recipient agencies will be
deemed to be in compliance with the priority system when eligible
recipient agencies distribute TEFAP commodities to meet the needs of
all emergency feeding organizations under their jurisdiction prior to
making commodities available to eligible recipient agencies which are
not emergency feeding organizations.
(3) Existing networks. Subject to the constraints of paragraphs
(h)(1)(i) and (h)(1)(ii) of this section, State agencies may give
priority in the distribution of TEFAP commodities to existing food bank
networks and other organizations whose ongoing primary function is to
facilitate the distribution of food to low-income households, including
food from sources other than the Department.
(4) State advisory boards. Each State agency receiving TEFAP
commodities is encouraged to establish a State advisory board
representing all types of entities in the State, both public and
private, interested in the distribution of such commodities. Such
advisory boards can provide valuable advice on how resources should be
allocated among various eligible outlet types, what areas have the
greatest need for food assistance, and other important issues that will
help States to use their program resources in the most efficient and
effective manner possible. A State agency may expend TEFAP
administrative funds to support the activities of an advisory board in
accordance with Sec. 251.8 of this part.
* * * * *
6. Section 251.5 is revised to read as follows:
[[Page 72905]]
Sec. 251.5 Eligibility determinations.
(a) Criteria for determining eligibility of organizations. Prior to
making commodities or administrative funds available, State agencies,
or eligible recipient agencies to which the State agency has delegated
responsibility for the distribution of TEFAP commodities or
administrative funds, must ensure that an organization applying for
participation in the program meets the definition of an ``eligible
recipient agency'' under Sec. 251.3(d). In addition, applicant
organizations must meet the following criteria:
(1) Agencies distributing to households. Organizations distributing
commodities to households for home consumption must limit the
distribution of commodities provided under this part to those
households which meet the eligibility criteria established by the State
agency in accordance with paragraph (b) of this section.
(2) Agencies providing prepared meals. Organizations providing
prepared meals must demonstrate, to the satisfaction of the State
agency, or eligible recipient agency to which they have applied for the
receipt of commodities or administrative funds, that they serve
predominantly needy persons. State agencies may establish a higher
standard than ``predominantly'' and may determine whether organizations
meet the applicable standard by considering socioeconomic data of the
area in which the organization is located, or from which it draws its
clientele. State agencies may not, however, require organizations to
employ a means test to determine that recipients are needy, or to keep
records solely for the purpose of demonstrating that its recipients are
needy.
(3) Tax-exempt status. Private organizations must--
(i) Be currently operating another Federal program requiring tax-
exempt status under the Internal Revenue Code (IRC), or
(ii) Possess documentation from the Internal Revenue Service (IRS)
recognizing tax-exempt status under the IRC, or
(iii) If not in possession of such documentation, be automatically
tax exempt as ``organized or operated exclusively for religious
purposes'' under the IRC, or
(iv) If not in possession of such documentation, but required to
file an application under the IRC to obtain tax-exempt status, have
made application for recognition of such status and be moving toward
compliance with the requirements for recognition of tax-exempt status.
If the IRS denies a participating organization's application for
recognition of tax-exempt status, the organization must immediately
notify the State agency or the eligible recipient agency, whichever is
appropriate, of such denial, and that agency will terminate the
organization's agreement and participation immediately upon receipt of
such notification. If documentation of IRS recognition of tax-exempt
status has not been obtained and forwarded to the appropriate agency
within 180 days of the effective date of the organization's approval
for participation in TEFAP, the State agency or eligible recipient
agency must terminate the organization's participation until such time
as recognition of tax-exempt status is actually obtained, except that
the State agency or eligible recipient agency may grant a single
extension not to exceed 90 days if the organization can demonstrate, to
the State agency's or eligible recipient agency's satisfaction, that
its inability to obtain tax-exempt status within the 180 day period is
due to circumstances beyond its control. It is the responsibility of
the organization to document that it has complied with all IRS
requirements and has provided all information requested by IRS in a
timely manner.
(b) Criteria for determining recipient eligibility. Each State
agency must establish uniform Statewide criteria for determining the
eligibility of households to receive commodities provided under this
part for home consumption. The criteria must:
(1) Enable the State agency to ensure that only households which
are in need of food assistance because of inadequate household income
receive TEFAP commodities;
(2) Include income-based standards and the methods by which
households may demonstrate eligibility under such standards; and
(3) Include a requirement that the household reside in the
geographic location served by the State agency at the time of applying
for assistance, but length of residency shall not be used as an
eligibility criterion.
(c) Delegation of authority. A State agency may delegate to one or
more eligible recipient agencies with which the State agency enters
into an agreement the responsibility for the distribution of
commodities and administrative funds made available under this part.
State agencies may also delegate the authority for selecting eligible
recipient agencies and for determining the eligibility of such
organizations to receive commodities and administrative funds. However,
responsibility for establishing eligibility criteria for organizations
in accordance with paragraph (a) of this section, and for establishing
recipient eligibility criteria in accordance with paragraph (b) of this
section, may not be delegated. In instances in which State agencies
delegate authority to eligible recipient agencies to determine the
eligibility of organizations to receive commodities and administrative
funds, eligibility must be determined in accordance with the provisions
contained in this part and the State plan. State agencies will remain
responsible for ensuring that commodities and administrative funds are
distributed in accordance with the provisions contained in this part.
7. Section 251.6 is revised to read as follows:
Sec. 251.6 Distribution plan.
(a) Contents of the plan. The State agency must submit for approval
by the appropriate FNS Regional Office a plan which contains:
(1) A designation of the State agency responsible for distributing
commodities and administrative funds provided under this part, and the
address of such agency;
(2) A plan of operation and administration to expeditiously
distribute commodities received under this part;
(3) A description of the standards of eligibility for recipient
agencies, including any subpriorities within the two-tier priority
system; and
(4) A description of the criteria established in accordance with
Sec. 251.5(b) which must be used by eligible recipient agencies in
determining the eligibility of households to receive TEFAP commodities
for home consumption.
(b) Plan submission. A complete plan will be required for Fiscal
Year 2001, to be submitted no later than August 15, 2000. Thereafter, a
complete plan must be submitted every 4 years, due no later than August
15 of the fiscal year prior to the end of the 4 year cycle.
(c) Amendments. State agencies must submit amendments to the
distribution plan to the extent that such amendments are necessary to
reflect any changes in program operations or administration as
described in the plan, or at the request of FNS, to the appropriate FNS
Regional Office.
8. Section 251.7 is revised to read as follows:
Sec. 251.7 Formula adjustments.
(a) Commodity adjustments. The Department will make annual
adjustments to the commodity allocation for each State, based on
updated unemployment statistics. These adjusted allocations will be
effective for
[[Page 72906]]
the entire fiscal year, subject to reallocation or transfer in
accordance with this part.
(b) Funds adjustments. The Department will make annual adjustments
of the funds allocation for each State based on updated unemployment
statistics. These adjusted allocations will be effective for the entire
fiscal year unless funds are recovered, withheld, or reallocated by FNS
in accordance with Sec. 251.8(f).
9. In Sec. 251.8:
a. Paragraph (a) is amended by removing the reference
``Sec. 251.3(d)'' and adding in its place the reference
``Sec. 251.3(h)'';
b. Paragraph (b) is amended by removing the reference ``part 3015''
and adding in its place the reference ``part 3016 or part 3019, as
applicable.'';
c. Paragraph (c)(1) is amended by removing the words ``U.S.
Treasury Department checks or'';
d. Paragraph (c)(2) is amended by:
1. removing the words ``FNS Instruction 407-3 (Grant Award
Process)'' and adding in their place the words ``procedures established
by FNS'';
2. removing from the first sentence the words ``either'' and ``or a
U.S. Treasury check pursuant to submission of the SF-270, Request for
Advance or Reimbursement'';
3. removing the second sentence; and
4. removing reference to ``Sec. 251.8(e)'' and in its place adding
reference to ``paragraph (f) of this section'';
e. Paragraphs (d) and (e) are redesignated as paragraphs (e) and
(f), and new paragraph (d) is added; and
f. Newly redesignated paragraph (e) is revised.
The addition and revision read as follows:
Sec. 251.8 Payment of funds for administrative costs.
* * * * *
(d) Priority for eligible recipient agencies distributing USDA
commodities. State agencies and eligible recipient agencies
distributing administrative funds must ensure that the administrative
funding needs of eligible recipient agencies which receive USDA
commodities are met, relative to both USDA commodities and any non-USDA
commodities they may receive, before such funding is made available to
eligible recipient agencies which distribute only non-USDA commodities.
(e) Use of funds. (1) Allowable administrative costs. State
agencies and eligible recipient agencies may use funds made available
under this part to pay the direct expenses associated with the
distribution of USDA commodities and commodities secured from other
sources to the extent that the commodities are ultimately distributed
by eligible recipient agencies which have entered into agreements in
accordance with Sec. 251.2. Direct expenses include the following,
regardless of whether they are charged to TEFAP as direct or indirect
costs:
(i) The intrastate and interstate transport, storing, handling,
repackaging, processing, and distribution of commodities; except that
for interstate expenditures to be allowable, the commodities must have
been specifically earmarked for the particular State or eligible
recipient agency which incurs the cost;
(ii) Costs associated with determinations of eligibility,
verification, and documentation;
(iii) Costs of providing information to persons receiving USDA
commodities concerning the appropriate storage and preparation of such
commodities;
(iv) Costs involved in publishing announcements of times and
locations of distribution; and
(v) Costs of recordkeeping, auditing, and other administrative
procedures required for program participation.
(2) State restriction of administrative costs. A State agency may
restrict the use of TEFAP administrative funds by eligible recipient
agencies by disallowing one or more types of expenses expressly allowed
in paragraph (e)(1) of this section. If a State agency so restricts the
use of administrative funds, the specific types of expenses the State
will allow eligible recipient agencies to incur must be identified in
the State agency's agreements with its eligible recipient agencies, or
set forth by other written notification, incorporated into such
agreements by reference.
(3) Agreements. In order to be eligible for funds under paragraph
(e)(1) of this section, eligible recipient agencies must have entered
into an agreement with the State agency or another eligible recipient
agency pursuant to Sec. 251.2(c).
(4) Pass-through requirement-local support to emergency feeding
organizations. (i) Not less than 40 percent of the Federal Emergency
Food Assistance Program administrative funds allocated to the State
agency in accordance with paragraph (a) of this section must be:
(A) Provided by the State agency to emergency feeding organizations
that have signed an agreement with the State agency as either
reimbursement or advance payment for administrative costs incurred by
emergency feeding organizations in accordance with paragraph (e)(1) of
this section, except that such 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 incurred by, or on behalf of, emergency feeding organizations in
accordance with paragraph (e)(1) of this section.
(ii) Any funds allocated to or expended by the State agency to
cover costs incurred by eligible recipient agencies which are not
emergency feeding organizations shall not count toward meeting the
pass-through requirement.
(iii) State agencies must not charge for commodities made available
under this part to eligible recipient agencies.
* * * * *
10. In Sec. 251.9:
a. The words ``emergency feeding organization'' and ``emergency
feeding organizations'' are removed wherever they appear in the
section, and added in their place are the words ``eligible recipient
agency'' and ``eligible recipient agencies'' respectively;
b. Paragraph (a) is revised;
c. Paragraph (c) introductory text and paragraph (c)(2)(i) are
amended by removing the references ``3016.24(b)(1)'' and ``3016.24(c)
through 3016.24(f)'' and adding the reference ``part 3016 or 3019, as
applicable'' in their place;
d. Paragraph (e) is removed, and paragraphs (f) and (g) are
redesignated as paragraphs (e) and (f), respectively;
e. Newly redesignated paragraph (e) is amended by removing the
words ``SF-269, Financial Status Report'' and adding the words ``FNS-
667, Report of TEFAP Administrative Costs'' in their place.
f. Newly redesignated paragraph (f) is amended by removing the
reference ``SF-269'' wherever it appears and adding the reference
``FNS-667'' in its place.
The revision reads as follows:
Sec. 251.9 Matching of funds.
(a) State matching requirement. The State must provide a cash or
in-kind contribution equal to the amount of TEFAP administrative funds
received under Sec. 251.8 and retained by the State agency for State-
level costs or made available by the State agency directly to eligible
recipient agencies that are not emergency feeding organizations as
defined in Sec. 251.3(e). The State agency will not be required to
match any portion of the Federal grant passed through for
administrative costs incurred by emergency feeding organizations or
directly expended by the State agency for such costs in
[[Page 72907]]
accordance with Sec. 251.8(e)(4) of this part.
* * * * *
11. In Sec. 251.10:
a. Paragraph (a) is revised;
b. Paragraph (b) is amended by adding the words ``commodities
distributed for home consumption and meals prepared from'' after the
word ``law,'';
c. Paragraph (c) is amended by adding the words ``for home
consumption or availability of meals prepared from commodities'' after
the word ``foods''.
d. Paragraphs (d) and (e) are revised;
e. Paragraph (f) is amended by:
1. removing the words ``emergency feeding organizations and
distribution sites'', ``emergency feeding organization or distribution
site'' and ``emergency feeding organization's or distribution site's''
wherever they appear, and adding in their place the words ``eligible
recipient agencies'', ``eligible recipient agency'' and ``eligible
recipient agency's'' respectively;
2. adding the words ``or meal service'' after the word ``foods'' in
paragraph (f)(1) introductory text;
3. adding the words ``for home consumption or prepared meals
containing TEFAP commodities'' after the word ``commodities'' in
paragraph (f)(1)(ii);
4. adding the words ``or meal service'' at the end of paragraph
(f)(1)(iii);
5. adding the words ``or meal service'' after the word ``foods'' in
paragraph (f)(2); and
6. removing the words ``the distribution of commodities by'' in
paragraph (f)(4);
f. Paragraph (g) is amended by removing the words ``emergency
feeding organizations'' and adding in their place ``eligible recipient
agencies'';
g. Paragraph (h) is revised.
The revisions read as follows:
Sec. 251.10 Miscellaneous provisions.
(a) Records. (1) Commodities. State agencies, subdistributing
agencies (as defined in Sec. 250.3 of this chapter), and eligible
recipient agencies must maintain records to document the receipt,
disposal, and inventory of commodities received under this part that
they, in turn, distribute to eligible recipient agencies. Such records
must be maintained in accordance with the requirements set forth in
Sec. 250.16 of this chapter. Eligible recipient agencies must sign a
receipt for program commodities which they receive under this part for
distribution to households or for use in preparing meals, and records
of all such receipts must be maintained.
(2) Administrative funds. In addition to maintaining financial
records in accordance with 7 CFR part 3016, State agencies must
maintain records to document the amount of funds received under this
part and paid to eligible recipient agencies for allowable
administrative costs incurred by such eligible recipient agencies.
State agencies must also ensure that eligible recipient agencies
maintain such records.
(3) Household information. Each distribution site must collect and
maintain on record for each household receiving TEFAP commodities for
home consumption, 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 for home
consumption.
(4) Record retention. All records required by this section must be
retained for a period of 3 years from the close of the Federal Fiscal
Year to which they pertain, or longer if related to an audit or
investigation in progress. State agencies may take physical possession
of such records on behalf of their eligible recipient agencies.
However, such records must be reasonably accessible at all times for
use during management evaluation reviews, audits or investigations.
* * * * *
(d) Reports. (1) Submission of Form FNS-667. Designated State
agencies must identify funds obligated and disbursed to cover the costs
associated with the program at the State and local level. State and
local costs must be identified separately. The data must be identified
on Form FNS-667, Report of Administrative Costs (TEFAP) and submitted
to the appropriate FNS Regional Office on a quarterly basis. The
quarterly report must be submitted no later than 30 calendar days after
the end of the quarter to which it pertains. The final report must be
submitted no later than 90 calendar days after the end of the fiscal
year to which it pertains.
(2) Reports of excessive inventory. Each State agency must complete
and submit to the FNS Regional Office reports to ensure that excessive
inventories of donated foods are not maintained, in accordance with the
requirements of Sec. 250.17(a) of this chapter.
(e) State monitoring system. (1) Each State agency must monitor the
operation of the program to ensure that it is being administered in
accordance with Federal and State requirements. State agencies may not
delegate this responsibility.
(2) Unless specific exceptions are approved in writing by FNS, the
State agency monitoring system must include:
(i) An annual review of at least 25 percent of all eligible
recipient agencies which have signed an agreement with the State agency
pursuant to Sec. 251.2(c), provided that each such agency must be
reviewed no less frequently than once every four years; and
(ii) An annual review of one-tenth or 20, whichever is fewer, of
all eligible recipient agencies which receive TEFAP commodities and/or
administrative funds pursuant to an agreement with another eligible
recipient agency. Reviews must be conducted, to the maximum extent
feasible, simultaneously with actual distribution of commodities and/or
meal service, and eligibility determinations, if applicable. State
agencies must develop a system for selecting eligible recipient
agencies for review that ensures deficiencies in program administration
are detected and resolved in an effective and efficient manner.
(3) Each review must encompass, as applicable, eligibility
determinations, food ordering procedures, storage and warehousing
practices, inventory controls, approval of distribution sites,
reporting and recordkeeping requirements, and civil rights.
(4) Upon concurrence by FNS, reviews of eligible recipient agencies
which have been conducted by FNS Regional Office personnel may be
incorporated into the minimum coverage required by paragraph (e)(2) of
this section.
(5) If deficiencies are disclosed through the review of an eligible
recipient agency, the State agency must submit a report of the review
findings to the eligible recipient agency and ensure that corrective
action is taken to eliminate the deficiencies identified.
* * * * *
(h) Maintenance of effort. The State may not reduce the expenditure
of its own funds to provide commodities or services to organizations
receiving funds or services under the Emergency Food Assistance Act of
1983 below the level of such expenditure existing in the fiscal year
when the State first began administering TEFAP, or Fiscal Year 1988,
which is the fiscal year in which the maintenance-of-effort requirement
became effective, whichever is later.
Dated: December 21, 1999.
Samuel Chambers, Jr.,
Administrator.
[FR Doc. 99-33619 Filed 12-28-99; 8:45 am]
BILLING CODE 3410-30-U