[Federal Register Volume 60, Number 233 (Tuesday, December 5, 1995)]
[Proposed Rules]
[Pages 62227-62229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29569]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 60, No. 233 / Tuesday, December 5, 1995 /
Proposed Rules
[[Page 62227]]
DEPARTMENT OF AGRICULTURE
Food and Consumer Service
7 CFR Part 226
RIN 0584-AB19
Child and Adult Care Food Program: Overclaim Authority
AGENCY: Food and Consumer Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes an amendment to the Child and Adult Care
Food Program (CACFP) regulations which would explicitly authorize the
Department and State agencies to assess overclaims against institutions
that fail to abide by CACFP recordkeeping requirements. This authority
has been successfully challenged in several judicial rulings on the
grounds that such authority was not specifically established in program
regulations. This rule serves to affirm the Department's authority to
assess overclaims for recordkeeping infractions and to clarify any
regulatory ambiguities or inconsistencies regarding overclaims
authority.
DATES: To be assured of consideration, comments must be postmarked no
later than February 5, 1996.
ADDRESSES: Comments should be addressed to Mr. Robert M. Eadie, Chief,
Policy and Program Development Branch, Child Nutrition Division, Food
and Consumer Service, Department of Agriculture, 3101 Park Center
Drive, Room 1007, Alexandria, Virginia 22302. Comments in response to
this rule may be inspected at the address above during normal business
hours, 8:30 a.m. to 5:00 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Eadie or Mr. Edward
Morawetz at the above address or by telephone at 703-305-2620.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed 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 (5 U.S.C. 601-612). The Administrator of
the Food and Consumer Service has certified that this action will not
have a significant economic impact on a substantial number of small
entities. There will be no significant impact because this rule
represents only a clarification of current procedures.
Executive Order 12372
This Program is listed in the Catalog of Federal Domestic
Assistance under No. 10.558 and is subject to the provisions of
Executive Order 12372, which requires intergovernmental consultation
with State and local officials (7 CFR Part 3015, Subpart V, and final
rule related notice published in 48 FR 29114, June 24, 1983).
Information Collection
This proposed rule contains no new information collection
requirements. In accordance with the Paperwork Reduction Act of 1980
(44 U.S.C. 3507), current reporting and recordkeeping requirements for
Part 226 were approved by the Office of Management and Budget under
Control Number 0584-0055.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
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
of the final rule. All available administrative procedures must be
exhausted prior to any judicial challenge to the provisions of this
rule or the application of its provisions. In the Child and Adult Care
Food Program, the administrative procedures are set forth under the
following regulations: (1) Institution appeal procedures in 7 CFR
Sec. 226.6(k); and (2) Disputes involving procurement by State agencies
and institutions must follow administrative appeal procedures to the
extent required by 7 CFR Sec. 226.22 and 7 CFR Part 3015.
Background
The Child and Adult Care Food Program (CACFP) is authorized by
section 17 of the National School Lunch Act, as amended (42 U.S.C.
1766). Section 17(n) of that Act stipulates that ``States and
institutions participating in the program shall keep accounts and
records as may be necessary to enable the Secretary to determine
whether there has been compliance with the requirements of this
section.'' Furthermore, the CACFP regulations include a number of
requirements relating to recordkeeping: Section 226.7(m) requires State
agencies to establish standards for institutional recordkeeping;
Section 226.15(e) prescribes the minimum recordkeeping requirements for
institutions in the CACFP; Section 226.10(c) requires institutions to
certify that records are available to support reimbursement claims; and
Section 226.10(d) establishes a timeframe for record retention.
Moreover, Section 226.6(f)(1) requires that the Program agreement
between the State agency and each institution stipulate that each
participating institution must agree to comply with all regulatory
requirements including these recordkeeping requirements. Finally, the
importance with which the Department views an institution's
recordkeeping responsibilities is found in Section 226.6(c)(4), where
failure to maintain adequate records is specifically listed as a
serious deficiency for which termination of an institution's
participation may be appropriate.
On numerous occasions, the Department and State agencies have used
the authority in the regulatory provisions cited above to recover funds
paid to institutions which did not have records necessary to support
claims for reimbursement. However, this authority has been successfully
challenged in court cases in Arkansas and California. In both cases,
assessment of overclaims against institutions which were based on
inadequate or missing records were
[[Page 62228]]
overturned by the courts on the grounds that the CACFP regulations do
not specifically authorize overclaims for those reasons.
In recognition of the fact that State agencies may review an
institution's performance under the CACFP as infrequently as once every
four years, effective administration depends on access to complete
documentation of program activities for an entire review period. Such
documentation is necessary for the Department and State agencies to
maintain a check on possible fraud, abuse and mismanagement in the
Program. Without proper records concerning the content and number of
meals served, and documentation of participants' income category, there
is no evidence that such participants were fed in accordance with basic
program requirements, and no assurance that program funds were spent as
mandated in the law and in the regulations.
Accordingly, the Department is proposing to amend Sections
226.14(a), 226.15(e) and 226.16(e), and to add new Sections 226.17(c),
226.18(g), 226.19(c), and 226.19a(c) to the CACFP regulations to
clarify that failure to adhere to CACFP recordkeeping requirements may
be used as a basis for State agencies to assess overclaims against
sponsors.
This rulemaking also contains a technical change to the CACFP
regulations which would transfer two recordkeeping responsibilities
established for sponsoring organizations from Section 226.16(e) to
Section 226.15(e).
Accordingly, the Department proposes to amend Sections 226.15(e)
and 226.16(e) by moving Section 226.16(e) (1)-(2) to Section 226.15(e)
under redesignated paragraphs (10) and (12).
List of Subjects in 7 CFR Part 226
Day care, Food assistance programs, Grant programs-health, infants
and children, Records, Reporting and recordkeeping requirements,
Surplus agricultural commodities.
Accordingly, 7 CFR Part 226 is proposed to be amended as follows:
PART 226--CHILD AND ADULT CARE FOOD PROGRAM
1. The authority citation for Part 226 continues to read as
follows:
Authority: Secs. 9, 11, 14, 16, and 17, National School Lunch
Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765 and 1766).
2. In Sec. 226.14, the introductory text of paragraph (a) is
amended by adding a new sentence after the first sentence to read as
follows:
Sec. 226.14 Claims against institutions.
(a) * * * State agencies may consider claims for reimbursement not
properly payable if an institution does not comply with the
recordkeeping requirements contained in this part. * * *
* * * * *
3. In Sec. 226.15:
a. The introductory text of paragraph (e) is revised;
b. Paragraphs (e)(10), (e)(11) and (e)(12) are redesignated as
paragraphs (e)(11), (e)(13) and (e)(14);
c. New paragraphs (e)(10) and (e)(12) are added;
d. Newly redesignated paragraph (e)(11) is amended by removing the
word ``and'' at the end of the paragraph;
e. Newly redesignated paragraph (e)(13) is amended by adding the
word ``and'' after the semicolon at the end of the paragraph; and
f. Newly redesignated paragraph (e)(14) is amended by removing the
first word ``Maintain'' from the paragraph.
The additions and revisions specified above read as follows:
Sec. 226.15 Institution provisions.
* * * * *
(e) Recordkeeping. Each institution shall establish procedures to
collect and maintain all necessary program records. Failure to maintain
such records shall be grounds for denial of reimbursement for meals
served during the period covered by the records in question and for the
denial of reimbursement for costs associated with such records. At a
minimum, the following records shall be collected and maintained:
* * * * *
(10) Information concerning the dates and amounts of disbursement
to each child care facility or adult day care facility with which it
has a program agreement;
* * * * *
(12) Information concerning the location and dates of each child
care or adult day care facility review, any problems noted, and the
corrective action prescribed and effected;
* * * * *
4. In Sec. 226.16, paragraph (e) is revised to read as follows:
Sec. 226.16 Sponsoring organization provisions.
* * * * *
(e) Each sponsoring organization shall comply with the
recordkeeping requirements established in Secs. 226.10(d) and 226.15(e)
and any recordkeeping requirements established by the State agency in
order to justify the administrative payments made in accordance with
Sec. 226.12(a). Failure to maintain such records shall be grounds for
the denial of reimbursement for the costs associated with those records
during the period covered by the records in question.
* * * * *
5. In Sec. 226.17, a new paragraph (c) is added to read as follows:
Sec. 226.17 Child care center provisions.
* * * * *
(c) Each child care center shall comply with the recordkeeping
requirements established in Secs. 226.10(d) and 226.15(e), and the
recordkeeping requirements contained in this section. Failure to
maintain such records shall be grounds for the denial of reimbursement
for meals served during the period covered by the records in question
and for the denial of reimbursement for costs associated with such
records.
6. In Sec. 226.18, a new paragraph (g) is added to read as follows:
Sec. 226.18 Day care home provisions.
* * * * *
(g) Each day care home shall comply with the recordkeeping
requirements established in Secs. 226.10(d) and 226.15(e), and the
recordkeeping requirements contained in this section. Failure to
maintain such records shall be grounds for the denial of reimbursement
for meals served during the period covered by the records in question.
7. In Sec. 226.19, a new paragraph (c) is added to read as follows:
Sec. 226.19 Outside-school-hours care center provisions.
* * * * *
(c) Each outside-school-hours care center shall comply with the
recordkeeping requirements established in Secs. 226.10(d) and
226.15(e), and the recordkeeping requirements contained in this
section. Failure to maintain such records shall be grounds for the
denial of reimbursement for meals served during the period covered by
the records in question and for the denial of reimbursement for costs
associated with such records.
8. In Sec. 226.19a, a new paragraph (c) is added to read as
follows:
Sec. 226.19a Adult day care center provisions.
* * * * *
(c) Each adult day care center shall comply with the recordkeeping
requirements established in Secs. 226.10(d) and 226.15(e), and the
recordkeeping requirements contained in this section. Failure to
maintain such records shall
[[Page 62229]]
be grounds for the denial of reimbursement for meals served during the
period covered by the records in question and for the denial of
reimbursement for costs associated with such records.
Dated: November 27, 1995.
William E. Ludwig,
Administrator.
[FR Doc. 95-29569 Filed 12-4-95; 8:45 am]
BILLING CODE 3410-30-U
