[Federal Register Volume 69, Number 29 (Thursday, February 12, 2004)]
[Notices]
[Pages 6933-6936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3116]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
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  Federal Register / Vol. 69, No. 29 / Thursday, February 12, 2004 / 
Notices  

[[Page 6933]]



DEPARTMENT OF AGRICULTURE


Privacy Act: Proposed New System of Records

AGENCY: Office of the Secretary, USDA.

ACTION: Notice of a proposed new privacy system of records.

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, as amended, 5 U.S.C. 552(a), the United States Department of 
Agriculture (USDA) Food and Nutrition Service (FNS) is giving notice 
that it proposes to establish a new system of records: USDA/FNS-11, 
entitled Information on Persons Identified as Responsible for Serious 
Deficiencies, Proposed for Disqualification, or Disqualified to 
Participate as Principals or Family Day Care Home Operators in the 
Child and Adult Care Food Program (CACFP). This system consists of 
information on individuals (1) who have been identified by an 
administering State agency as having responsibility for serious 
deficiencies in the operation of the CACFP in institutions or sponsored 
centers which operate the program; (2) who have been proposed for 
disqualification from participation in the CACFP as a result of having 
been determined to be responsible for an uncorrected serious deficiency 
in the operation of the program in a institution or sponsored center; 
or (3) who have been disqualified from participation in the CACFP as 
principals of institutions, sponsored centers, or as operators of day 
care homes, as a result of being determined to be responsible for an 
uncorrected serious deficiency in the operation of an institution, a 
sponsored center, or a family day care home that participates in the 
program. Within the system of records, the records of persons who have 
been disqualified from participation in the program will be considered 
to be part of the National Disqualified List, which also includes the 
names of institutions that have been disqualified from participation in 
the CACFP.
    A principal means any individual who holds a management position 
within, or is an officer of, an institution or a sponsored center 
participating in the CACFP, including all members of the institution's 
board of directors or the sponsored center's board of directors. A day 
care home means an organized nonresidential child care program for 
children enrolled in a private home, licensed or approved as a family 
or group day care home and under the auspices of a sponsoring 
organization.
    This list will be made available to State agencies and sponsoring 
organizations that administer and operate the CACFP. For individuals 
who have been identified as having responsibility for a serious 
deficiency at an institution or who have been proposed for termination 
as responsible principals or individuals, the information will include 
the individual's name, the name of the State agency which identified 
the individual as responsible for the serious deficiency or proposed 
the individual to be disqualified, the reason for the serious 
deficiency or proposed disqualification, the name and address of the 
institution with which the individual was associated, and the 
individual's title at that institution. For individuals who have been 
disqualified as a result of being determined to be responsible for an 
uncorrected serious deficiency in the operation of an institution or a 
sponsored center, in addition to the information listed in the 
preceding sentence, the system will include the individual's mailing 
address and date of birth, the effective date of the disqualification, 
and whether the individual owes a debt to the CACFP. For individuals 
who have been disqualified as a result of being determined to be 
responsible for an uncorrected serious deficiency as the operator of a 
family day care home, the information will include name, mailing 
address, date of birth, reason for the disqualification, effective date 
of the disqualification, and whether the individual owes a debt to the 
program.

DATES: Comments must be received on or before March 15, 2004 to be 
assured of consideration. Comments will also be accepted via e-mail if 
sent no later than 11:59 p.m. on March 15, 2004. This notice will be 
effective April 12, 2004 unless modified by a subsequent notice to 
incorporate comments received by the public.

ADDRESSES: Comments should be addressed to: Mr. Terry Hallberg, Chief, 
Program Analysis and Monitoring Branch, Child Nutrition Division, Food 
and Nutrition Service, USDA, Room 638, 3101 Park Center Drive, 
Alexandria, Virginia 22302. Comments will also be accepted via e-mail 
sent to [email protected]. All written submissions will be 
available for public inspection at this location Monday through Friday, 
8:30 a.m.-5 p.m.

FOR FURTHER INFORMATION CONTACT: Susan Fouts at (703) 305-2600.

SUPPLEMENTARY INFORMATION:

Statutory Basis

    Section 243(c) of Public Law 106-224, the Agricultural Risk 
Protection Act of 2000, amended Sec. 17(d)(5) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1766 (d)(5)(E)(i) and (ii)) 
requires the USDA to maintain a list of institutions, family day care 
home providers, and individuals that have been terminated or otherwise 
disqualified from participation in the CACFP. The law also requires the 
USDA to make the list available to State agencies for their use in 
reviewing applications to participate and to sponsoring organizations 
to ensure that they do not employ as principals any persons who are 
disqualified from the program. This statutory mandate has been 
incorporated into Sec. 226.6(c)(7) of the CACFP regulations.

Background

    In order to implement this and other provisions of Public Law 106-
243, which was designed to improve the management and integrity of the 
CACFP, the USDA has published an interim rule entitled, ``Child and 
Adult Care Food Program: Implementing Legislative Reforms to Strengthen 
Program Integrity'' (67 FR 43447, June 27, 2002). As amended by the 
interim rule, Sec. 226.6(b)(12) of the CACFP regulations prohibits 
State agencies from approving an institution's application to 
participate in the program if either the institution or any of its 
principals is on the National Disqualified List. This section of the 
regulations also prohibits State agencies from approving an application

[[Page 6934]]

submitted by a sponsoring organization on behalf of a facility if the 
facility or any of its principals is on the National Disqualified List. 
In addition, sponsoring organizations are prohibited (introductory 
paragraph of Sec. 226.16(b) and Sec. 226.6(c)(7)(iv)(B)) from 
submitting an application on behalf of a facility if either the 
facility or any of its principals is on the National Disqualified List 
and are prohibited from employing in a principal capacity any 
individual who is on the National Disqualified List (Sec.Sec. 
226.6(c)(3)(ii)(B), 226.6(c)(6)(ii)(G)(2), and 226.6(c)(7)(iv)(A)).

Inclusion of ``Responsible Principals'' and ``Responsible Individuals'' 
of Institutions in the System of Records

    An institution that operates the CACFP is disqualified from 
participation in the program and placed on the National Disqualified 
List after having been declared seriously deficient; failing to take 
the required corrective action within the stated period of time; being 
notified of the State agency's intent to terminate their program 
agreement; and being offered an administrative review (appeal) of the 
State agency's proposed termination. When a State agency determines 
that an institution is seriously deficient, it must also identify the 
principals or individuals associated with the institution whose actions 
or conduct led to the institution's serious deficiency, and notify 
these persons that (1) they have been determined to be a ``responsible 
principal'' or a ``responsible individual'' for the serious deficiency, 
and (2) the failure to correct the serious deficiencies in the allotted 
time will result in the State agency's proposed termination of the 
institution's agreement and proposed disqualification of the 
institution and the responsible principals and individuals from 
participation in the program. The State agency must submit a copy of 
the notification of serious deficiency, including the names of the 
responsible principals and individuals, to the FNS regional office 
(FNSRO) that oversees the operation of the CACFP in that State.
    If the serious deficiency is not corrected or if the State agency 
determines that the responsible principal(s) and individual(s) should 
be proposed for disqualification independently of the disqualification 
of the institution, it must notify the responsible principals and 
individuals that the State agency proposes to disqualify them and 
include them on the National Disqualified List and offer them an 
administrative review of the State agency's proposed termination. The 
State agency must provide a copy of the notice of proposed 
disqualification to the FNSRO.
    Section 226.6(k)(8) of the regulations requires that, in most 
instances, an individual's appeal will be considered as part of an 
institution's appeal of its proposed termination and disqualification. 
However, the administrative review officer may separate the appeals of 
the institution and the responsible principals and/or responsible 
individuals if (a) the institution does not appeal, but the individual 
wishes to do so or if (b) either the institution or the individual 
demonstrates to the administrative review officer's satisfaction that 
their interests conflict.
    If the appeals of the institution and the responsible principal(s) 
and responsible individual(s) have not been separated by the 
administrative review officer, when the State agency terminates the 
institution's program and disqualifies it from participation in the 
CACFP, it will also disqualify those persons named as ``responsible 
principals'' or ``responsible individuals,'' and will submit a copy of 
the termination notice (including the name(s), birth date(s), and 
address(es) of responsible principals and responsible individuals) to 
the FNSRO. If the institution is not terminated and disqualified but 
the responsible principals and individuals are disqualified, the State 
agency must notify the individuals of the disqualification and send a 
copy of the notice to the FNSRO. The FNSRO will transmit information on 
disqualified institutions and disqualified responsible principals and 
individuals to FNS Headquarters, which will then include the 
individual(s) on the National Disqualified List. State agencies are 
prohibited (Sec. 226.6(b)(12)) from approving the application of an 
institution that employs any person on the National Disqualified List 
in a principal capacity, or of a facility if the facility or any of its 
principals is on the National Disqualified List. Sponsoring 
organizations are prohibited (introductory paragraph of Sec. 226.16(b) 
and Sec. 226.6(c)(7)(iv)(B)) from submitting an application on behalf 
of a facility if either the facility or any of its principals is on the 
National Disqualified List and are prohibited from employing in a 
principal capacity any individual who is on the National Disqualified 
List (Sec.Sec. 226.6(c)(3)(ii)(B), 226.6(c)(6)(ii)(G)(2), and 
226.6(c)(7)(iv)(A)).

Inclusion of Operators of Family Day Care Homes in the System of 
Records

    The operator of a family day care home will be placed on the 
National Disqualified List only after having been declared seriously 
deficient by the operator's sponsoring organization; failing to take 
the required corrective action within the stated period of time; being 
notified of the sponsoring organization's intent to terminate the 
operator's CACFP agreement; and being offered an administrative review 
of the sponsoring organization's proposed termination. If the operator 
of the family day care home fails to exercise his/her appeal rights, or 
if he/she loses the appeal, the sponsoring organization will terminate 
the operator's program agreement and will submit a copy of the 
termination notice (including the name, mailing address and date of 
birth of the family day care home operator, the effective date of the 
termination, the reasons for the termination, and whether the operator 
owes a debt to the program) to the State agency. The State agency will 
forward the information to FNS, which will include the family day care 
home operator on the National Disqualified List. The National 
Disqualified List is maintained at FNS Headquarters, and will be shared 
with other State administering agencies and sponsoring organizations.

Period of Time on the National Disqualified List

    Once placed on the National Disqualified List, a responsible 
principal or individual or the operator of a family day care home will 
remain on the list for 7 years from the effective date of the 
disqualification or until acceptable corrective action is taken. Also, 
no responsible principal or individual or operator of a family day care 
home can be removed from the list until any debt owed to the program is 
repaid in full, even if the full 7 years has elapsed.
    In order for a responsible principal or individual to be removed 
from the National Disqualified List, he/she must demonstrate to the 
satisfaction of both the State agency and FNS that appropriate 
corrective action has been taken. In order for a family day care home 
operator to be removed from the National Disqualified List, he/she must 
demonstrate to the satisfaction of the State agency that appropriate 
corrective action has been taken.

Purpose of the National Disqualified List

    The purpose of maintaining a National Disqualified List and making 
it

[[Page 6935]]

available to State agencies and sponsoring organizations is to provide 
these entities with a tool for promoting CACFP integrity by preventing 
several situations from occurring. First, it prevents institutions 
whose CACFP agreements were terminated for cause in one State from 
simply moving to another State and reapplying for program 
participation. Second, it prevents individuals responsible for fraud or 
serious mismanagement from continuing to be involved in CACFP 
administration by forming a new corporate entity and entering the 
program under a different organizational name. Third, it prevents 
individuals associated with a disqualified institution from re-entering 
the CACFP as a family day care home provider, as a principal with 
another institution, or as a principal in a sponsored center. Finally, 
it prevents family day care home providers terminated for cause by one 
sponsoring organization from re-entering the CACFP under the auspices 
of a different sponsoring organization.

Reason for This Notice

    Because this system of records contains personal information about 
individuals (i.e., names, birth dates, and addresses) as well as the 
nature of the serious deficiency for which they were responsible, the 
Privacy Act of 1974, as amended, requires publication of a notice in 
the Federal Register announcing the existence and character of the 
system of records and the routine uses to which it is put. Therefore, 
FNS is proposing the following routine use for this system of records 
in order to fully comply with this legislative mandate. This system of 
records is routinely updated and the data on individuals who have been 
disqualified from participation in the CACFP is made available to all 
State agencies and sponsoring organizations administering the program.
    A ``Report on a New System,'' required by 5 U.S.C. 552a(r), as 
implemented by OMB Circular A-130, was sent to the Chair, Senate 
Committee on Governmental Affairs, the Chairman, House Committee on 
Government Reform, and to the Administrator, Office of Information and 
Regulatory Affairs, of the Office of Management and Budget on or before 
February 12, 2004.

    Dated: February 5, 2004.
Ann M. Veneman,
Secretary.
USDA/FNS-11

SYSTEM NAME:
    USDA/FNS-11, Information on Persons Identified as Responsible for 
Serious Deficiencies, Proposed for Disqualification, or Disqualified to 
Participate as Principals or Family Day Care Home Operators in the 
Child and Adult Care Food Program (CACFP).

SECURITY CLASSIFICATION:
    None.

SYSTEM LOCATION:
    This system of records is under the control of the Deputy 
Administrator, Special Nutrition Programs, Food and Nutrition Service, 
United States Department of Agriculture, 3101 Park Center Drive, 
Alexandria, Virginia 22302. The data on individuals who have been 
identified or proposed for disqualification because of responsibility 
for a serious deficiency in an institution or sponsored center which 
operates the CACFP will be maintained at the FNS Regional Office which 
oversees the State agency which has made the determination of serious 
deficiency or proposed the disqualification. The data on individuals 
who have been disqualified from participation in the CACFP will be 
maintained in the Child Nutrition Division of the Food and Nutrition 
Service.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    The system consists of information on individuals that have been 
determined to be responsible for serious deficiencies, proposed for 
disqualification, or disqualified from participation in the CACFP. The 
list will include both individuals disqualified based on responsibility 
for serious deficiencies in the operation of CACFP independent centers 
and sponsoring organizations based on regulations in place before July 
29, 2002, as well as all individuals that are disqualified from CACFP 
participation after July 29, 2002.

CATEGORIES OF RECORDS IN THE SYSTEM:
    For individuals who have been determined to be responsible for a 
serious deficiency at an institution or who have been proposed for 
disqualification as responsible principals or individuals of a 
seriously deficient institution: individual's name, name and address of 
the institution, title or position held with institution, reason for 
determination of serious deficiency or proposed disqualification, name 
of the State agency making the determination of serious deficiency or 
proposing disqualification.
    For individuals who have been disqualified as responsible 
principals or individuals: all of the information in the previous 
paragraph, plus the individual's mailing address, the individual's date 
of birth, the effective date of the disqualification and whether the 
individual owes a debt to the CACFP.
    For family day care home providers: individual's name, address, 
date of birth, reason for disqualification, name of the sponsoring 
organization, state agency imposing disqualification, termination date, 
and whether any debt is owed to the CACFP.
    Since State agencies were not required to collect the mailing 
addresses or birth date of disqualified responsible principals and 
individuals and operators of family day care homes prior to July 29, 
2002, this information may not be available for individuals 
disqualified from the CACFP before this date.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    42 U.S.C. 1766 (d)(5)(E)(i) and (ii), the Richard B. Russell 
National School Lunch Act.

PURPOSE:
    To promote integrity in the CACFP by providing State administering 
agencies and sponsoring organizations with the names of institutions, 
family day care home operators and individuals that have been 
terminated or otherwise disqualified from participating in the CACFP. 
Once disqualified, these institutions, individuals, and day care home 
operators will be prohibited from participating in the program for 7 
years from the effective date of the disqualification. Institutions and 
individuals associated with institutions may be removed from the list 
earlier if the State agency and FNS concur that the serious deficiency 
that caused their placement on the list has been corrected; operators 
of family day care homes may be removed earlier if the State agency 
concurs that the serious deficiency that caused their placement on the 
list has been corrected. However, no institution, individual, or family 
day care home operator may be removed from the list if they owe a debt 
to the CACFP.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:
    (1) USDA/FNS will disclose information from this system of records 
on individuals who have been disqualified from participation in the 
CACFP to every agency, whether State or FNS, that administers the CACFP 
directly in the States or at the Federal level, and to every sponsoring 
organization participating in the program. The information will be 
available to the State agency Directors

[[Page 6936]]

and staff members who make decisions about application approval or 
termination from participation in the program or, in the case of 
sponsoring organizations, make hiring decisions or submit applications 
for approval of family day care home operators to the State agency.
    (2) USDA/FNS may disclose information from this system of records 
to the Department of Justice when: (a) The agency or any component 
thereof; or (b) any employee of the agency in his or her official 
capacity where the Department of Justice has agreed to represent the 
employee; or (c) the United States Government is a party to litigation 
or has an interest in such litigation, and by careful review, the 
agency determines that the records are both relevant and necessary to 
the litigation, and the use of such records by the Department of 
Justice is therefore deemed by the agency to be for a purpose that is 
compatible with the purpose for which the agency collected the records.
    (3) USDA/FNS may disclose information from this system of records 
to a court or adjudicative body in a proceeding when: (a) The agency or 
any component thereof; or (b) any employee of the agency in his or her 
official capacity; or (c) any employee of the agency in his or her 
individual capacity where the agency has agreed to represent the 
employee; or (d) the United States Government is a party to litigation 
or has an interest in such litigation, and by careful review, the 
agency determines that the records are both relevant and necessary to 
the litigation, and the use of such records is therefore deemed by the 
agency to be for a purpose that is compatible with the purpose for 
which the agency collected the records.
    (4) USDA/FNS may disclose information from this system of records 
when a record on its face, or in conjunction with other records, 
indicates a violation or potential violation of law, whether civil, 
criminal or regulatory in nature, and whether arising by general 
statute or particular program statute, or by regulation, rule, or order 
issued pursuant thereto, disclosure may be made to the appropriate 
agency, whether Federal, foreign, State, local, or Tribal, or other 
public authority responsible for enforcing, investigating or 
prosecuting such violation or charged with enforcing or implementing 
the statute, or rule, regulation, or order issued pursuant thereto, if 
the information disclosed is relevant to any enforcement, regulatory, 
investigative or prosecutive responsibility of the receiving entity.
    (5) USDA/FNS may disclose information from this system of records 
to a Member of Congress or to a congressional staff member in response 
to an inquiry of the congressional office made at the written request 
of the constituent about whom the record is maintained.
    (6) USDA/FNS may disclose information from this system of records 
to the National Archives and Records Administration or to the General 
Services Administration for records management inspections conducted 
under 44 U.S.C. 2904 and 2906.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Records are maintained on computer disks, in computer files on the 
FNS network, and in file folders at FNS Regional offices and at FNS 
Headquarters; information on individuals who have been disqualified 
from participation in the CACFP will also be available in a password-
protected environment on the Internet.

RETRIEVABILITY:
    Records are retrieved by the individual's name.

SAFEGUARDS:
    Access to records is limited to those persons who process the 
records for the specific routine uses stated above. Computer disks are 
kept in physically secured rooms or cabinets. Files on the network are 
only available to persons with authorized access to the network. Paper 
records are segregated and physically stored in locked cabinets. 
Internet access will be restricted to those State agency or sponsoring 
organization staff with a need to know the list's contents and with 
password access to the list.

RETENTION AND DISPOSAL:
    Once placed on the National Disqualified List, a responsible 
principal or individual or the operator of a family day care home will 
remain on the list for 7 years from the effective date of the 
disqualification or until acceptable corrective action is taken. Also, 
no responsible principal or individual or operator of a family day care 
home can be removed from the list until any debt owed to the CACFP is 
repaid in full, even if the full 7 years has elapsed.

SYSTEM MANAGER AND ADDRESS:
    Director, Child Nutrition Division, Food and Nutrition Service, 
United States Department of Agriculture, 3101 Park Center Drive, Room 
638, Alexandria, Virginia 22302.

NOTIFICATION PROCEDURE:
    Individuals may request from the system manager identified above 
information regarding this system of records or whether the system 
contains records pertaining to them. Any individual requesting such 
information must provide his or her name, birth date, and address.

RECORD ACCESS PROCEDURES:
    Individuals may obtain information about records in the system 
pertaining to them by submitting a written request to the system 
manager listed above. The envelope and letter should be marked 
``Privacy Act Request'' and must include the name and address of the 
individual for whom the request is made.

CONTESTING RECORD PROCEDURES:
    Before being included in this system of records, operators of day 
care homes, responsible principals, and responsible individuals have 
been afforded the right to an administrative review of the findings 
that led to the action to disqualify them from CACFP participation. 
Therefore, the procedures set forth in this provision are not intended 
as an additional method of appeal.
    Individuals desiring to contest or amend information maintained in 
the system should direct their requests to the System Manager listed 
above. The request should state the reason(s) for contesting the 
information and provide any available documentation to support the 
requested action.

RECORD SOURCE CATEGORIES:
    Information in this system is provided to FNS by State agencies 
that administer the CACFP in the States.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
    None.
[FR Doc. 04-3116 Filed 2-11-04; 8:45 am]
BILLING CODE 3410-30-P