7 CFR Part 246 — Special Supplemental Nutrition Program for Women, Infants and Children

PART 246—SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN Authority: 42 U.S.C. 1786. Source: 50 FR 6121, Feb. 13, 1985, unless otherwise noted. Editorial Note: Nomenclature changes to part 246 appear at 76 FR 35097, June 16, 2011. Subpart A—General § 246.1 General purpose and scope. This part announces regulations under which the Secretary of Agriculture shall carry out the Special Supplemental Nutrition Program for Women, Infants and Children (WIC Program). Section 17 of the Child Nutrition Act of 1966, as amended, states in part that the Congress finds that substantial numbers of pregnant, postpartum and breastfeeding women, infants and young children from families with inadequate income are at special risk with respect to their physical and mental health by reason of inadequate nutrition or health care, or both. The purpose of the Program is to provide supplemental foods and nutrition education, including breastfeeding promotion and support, through payment of cash grants to State agencies which administer the Program through local agencies at no cost to eligible persons. The Program shall serve as an adjunct to good health care during critical times of growth and development, in order to prevent the occurrence of health problems, including drug and other harmful substance abuse, and to improve the health status of these persons. The program shall be supplementary to SNAP; any program under which foods are distributed to needy families in lieu of SNAP benefits; and receipt of food or meals from soup kitchens, or shelters, or other forms of emergency food assistance. [50 FR 6121, Feb. 13, 1985, as amended at 54 FR 51294, Dec. 14, 1989; 58 FR 11506, Feb. 26, 1993; 76 FR 59888, Sept. 28, 2011] § 246.2 Definitions. For the purpose of this part and all contracts, guidelines, instructions, forms and other documents related hereto, the term: 2 CFR part 200, Above-50-percent vendors Affirmative Action Plan A-130 Applicants Authorized supplemental foods Breastfeeding Breastfeeding women Cash-value voucher Categorical eligibility Certification Children Clinic Competent professional authority Competitive bidding Compliance buy Contract brand infant formula Cost containment measure CSFP Days Department Disability Discount Disqualification Documentation Drug (a) A beverage containing alcohol; (b) A controlled substance (having the meaning given it in section 102(6) of the Controlled Substance Act (21 U.S.C. 802(6)); or (c) A controlled substance analogue (having the meaning given it in section 102(32) of the Controlled Substance Act (21 U.S.C. 802(32)). Dual participation EBT Capable Electronic Benefit Transfer Electronic signature Emergency period (1) A presidentially declared major disaster as defined under section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq. (2) A presidentially declared emergency as defined under section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq. (3) A public health emergency declared by the Secretary of HHS under section 319 of the Public Health Service Act (42 U.S.C. 247d). (4) A renewal of such a public health emergency pursuant to section 319. Employee fraud and abuse Exempt infant formula Family Farmer Farmers' market Fiscal year FNS Food costs Food delivery system Food instrument Food sales Full nutrition benefit Health services High-risk vendor Home food delivery contractor Homeless facility Homeless individual (a) Who lacks a fixed and regular nighttime residence; or (b) Whose primary nighttime residence is: (1) A supervised publicly or privately operated shelter (including a welfare hotel, a congregate shelter, or a shelter for victims of domestic violence) designated to provide temporary living accommodation; (2) An institution that provides a temporary residence for individuals intended to be institutionalized; (3) A temporary accommodation of not more than 365 days in the residence of another individual; or (4) A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. IHS Infant formula Institution Infants Inventory audit Local agency Members of populations Migrant farmworker Multi-function equipment Net price Non-contract brand infant formula Nonprofit agency Nutrition education Nutrition Services and Administration (NSA) Costs Nutritional risk OIG Other harmful substances Partially-redeemed food instrument Participant violation Participants Participation (1) The number of persons who received supplemental foods or food instruments during the reporting period; (2) The number of infants who did not receive supplemental foods or food instruments but whose breastfeeding mother received supplemental foods or food instruments during the report period; and (3) The number of breastfeeding women who did not receive supplemental foods or food instruments but whose infant received supplemental foods or food instruments during the report period. Postpartum women Poverty income guidelines Pregnant women Price adjustment Primary contract infant formula Program Proxy Qualified administrative requirement Rebate Recall Remote Indian or Native village Routine monitoring Secretary SFPD Sign or signature Single-function equipment State State agency State alliance State Plan Statewide EBT Supplemental foods Supplemental Nutrition Assistance Program (SNAP), et. seq. Supply chain disruption USDA implementing regulations Vendor Vendor authorization Vendor limiting criteria Vendor overcharge Vendor peer group system Vendor selection criteria Vendor violation WIC WIC-eligible nutritionals for participants with qualifying conditions (hereafter referred to as “WIC-eligible nutritionals”) [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985] Editorial Note: For Federal Register www.govinfo.gov. § 246.3 Administration. (a) Delegation to FNS. (b) Delegation to the State agency. (c) Agreement and State Plan. (2) The written agreement shall include a certification regarding lobbying and, if applicable, a disclosure of lobbying activities, as required by 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415, and part 418. (3) The written agreement must include a statement that supports full use of Federal funds provided to State agencies for the administration of the WIC Program, and excludes such funds from State budget restrictions or limitations including hiring freezes, work furloughs, and travel restrictions. (d) State agency eligibility. (e) State staffing standards. (1) A full-time or equivalent administrator when the monthly participation level exceeds 1,500, or a half-time or equivalent administrator when the monthly participation exceeds 500. (2) At least one full-time or equivalent Program specialist for each 10,000 participants above 1,500, but the State agency need not employ more than eight Program specialists unless the State agency considers it necessary. Program specialists should be utilized for providing fiscal management and technical assistance, monitoring vendors, reviewing local agencies, training, and nutritional services, or other Program duties as assigned by the State agency. (3) For nutrition-related services, one full-time or equivalent nutritionist when the monthly participation is above 1,500, or a half-time or equivalent nutritionist when the monthly participation exceeds 500. The nutritionist shall be named State WIC Nutrition Coordinator and shall meet State personnel standards and qualifications in paragraphs (e)(3) (i), (ii), (iii), (iv), or (v) of this section and have the qualifications in paragraph (e)(3)(vi) of this section. Upon request, an exception to these qualifications may be granted by FNS. The State WIC Nutrition Coordinator shall— (i) Hold a Master's degree with emphasis in food and nutrition, community nutrition, public health nutrition, nutrition education, human nutrition, nutrition science or equivalent and have at least two years responsible experience as a nutritionist in education, social service, maternal and child health, public health, nutrition, or dietetics; or (ii) Be registered or eligible for registration with the American Dietetic Association and have at least two years experience; or (iii) Have at least a Bachelor of Science or Bachelor of Arts degree, from an accredited four-year institution, with emphasis in food and nutrition, community nutrition, public health nutrition, nutrition education, human nutrition, nutrition science or equivalent and have at least three years of responsible experience as a nutritionist in education, social service, maternal and child health, public health nutrition, or dietetics; or (iv) Be qualified as a Senior Public Health Nutritionist under the Department of Health and Human Services guidelines; or (v) Meet the IHS standards for a Public Health Nutritionist; and (vi) Have at least one of the following: Program development skills, education background and experience in the development of educational and training resource materials, community action experience, counseling skills or experience in participant advocacy. (4) A designated breastfeeding promotion coordinator, to coordinate breastfeeding promotion efforts identified in the State plan in accordance with the requirement of § 246.4(a)(9) of this part. The person to whom the State agency assigns this responsibility may perform other duties as well. (5) A staff person designated for food delivery system management. The person to whom the State agency assigns this responsibility may perform other duties as well. (6) The State agency shall enforce hiring practices which comply with the nondiscrimination criteria set forth in § 246.8. The hiring of minority staff is encouraged. (f) Delegation to local agency. [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 52 FR 21236, June 4, 1987; 59 FR 11499, Mar. 11, 1994; 65 FR 83277, Dec. 29, 2000; 71 FR 56728, Sept. 27, 2006; 76 FR 37983, June 29, 2011; 76 FR 59888, Sept. 28, 2011; 81 FR 10449, Mar. 1, 2016; 81 FR 66494, 66495, Sept. 28, 2016] Subpart B—State and Local Agency Eligibility § 246.4 State plan. (a) Requirements. (1) An outline of the State agency's goals and objectives for improving Program operations, to include EBT and/or EBT implementation. (2) A budget for nutrition services and administration funds, and an estimate of food expenditures. (3) An estimate of Statewide participation for the coming fiscal year by category of women, infants and children. (4) The State agency staffing pattern. (5) An Affirmative Action Plan which includes— (i) A list of all areas and special populations, in priority order based on relative need, within the jurisdiction of the State agency, the State agency's plans to initiate or expand operations under the Program in areas most in need of supplemental foods, including plans to inform nonparticipating local agencies of the availability and benefits of the Program and the availability of technical assistance in implementing the Program, and a description of how the State agency will take all reasonable actions to identify potential local agencies and encourage agencies to implement or expand operations under the Program within the following year in the neediest one-third of all areas unserved or partially served; (ii) An estimate of the number of potentially eligible persons in each area and a list of the areas in the Affirmative Action Plan which are currently operating the Program and their current participation, which participant priority levels as specified in § 246.7 are being reached in each of these areas, and which areas in the Affirmative Action Plan are currently operating CSFP and their current participation; and (iii) A list of the names and addresses of all local agencies. (6) Plans to provide program benefits to eligible migrant farmworkers and their families, to Indians, and to homeless individuals. (7) The State agency's plans, to be conducted in cooperation with local agencies, for informing eligible persons of the availability of Program benefits, including the eligibility criteria for participation, the location of local agencies operating the Program, and the institutional conditions of § 246.7(n)(1)(i) of this part, with emphasis on reaching and enrolling eligible women in the early months of pregnancy and migrants. Such information shall be publicly announced by the State agency and by local agencies at least annually. Such information shall also be distributed to offices and organizations that deal with significant numbers of potentially eligible persons, including health and medical organizations, hospitals and clinics, welfare and unemployment offices, social service agencies, farmworker organizations, Indian tribal organizations, organizations and agencies serving homeless individuals, and religious and community organizations in low-income areas. (8) A description of how the State agency plans to coordinate program operations with other services or programs that may benefit participants in, or applicants for, the program. (9) The State agency's nutrition education goals and action plans to include: (i) A description of the methods that will be used to provide drug and other harmful substance abuse information, to promote and support breastfeeding, and to meet the special nutrition education needs of migrant farmworkers and their families, Indians, and homeless persons. (ii) State agencies have the option to provide nutrition education materials to institutions participating in the CACFP at no cost, as long as a written agreement for sharing such materials is in place between the relevant WIC and CACFP entities. State agencies may initiate a sharing agreement with their State-level CACFP counterparts that would apply statewide, or may authorize their local agencies or clinics to initiate a sharing agreement at the local level with their local level CACFP counterparts. (10) For Indian State or local agencies that wish to apply for the alternate income determination procedure in accordance with § 246.7(d)(2)(vii), documentation that the majority of Indian household members have incomes below eligibility criteria. (11) A copy of the procedure manual developed by the State agency for guidance to local agencies in operating the Program. The manual shall include— (i) Certification procedures, including: (A) A list of the specific nutritional risk criteria by priority level which explains how a person's nutritional risk is determined; (B) Hematological data requirements including timeframes for the collection of such data; (C) The procedures for requiring proof of pregnancy, consistent with § 246.7(c)(2)(ii), if the State agency chooses to require such proof; (D) The State agency's income guidelines for Program eligibility; (E) Adjustments to the participant priority system (see § 246.7(e)(4)) to accommodate high-risk postpartum women or the addition of Priority VII; and, (F) Alternate language for the statement of rights and responsibilities which is provided to applicants, parents, or caretakers when applying for benefits as outlined in § 246.7(i)(10) and (j)(2)(i) through (j)(2)(iii). This alternate language must be approved by FNS before it can be used in the required statement. (ii) Methods for providing nutrition education, including breastfeeding promotion and support, to participants. Nutrition education will include information on drug abuse and other harmful substances. Participants will include homeless individuals. (iii) Instructions concerning all food delivery operations performed at the local level, including the list of acceptable foods and their maximum monthly quantities as required by § 246.10(b)(2)(i). (iv) Instructions for providing all records and reports which the State agency requires local agencies to maintain and submit; and (v) Instructions on coordinating operations under the program with drug and other harmful substance abuse counseling and treatment services. (12) A description of the State agency's financial management system. (13) A description of how the State agency will distribute nutrition services and administration funds, including start-up funds, to local agencies operating under the Program. (14) A description of the food delivery system as it operates at the State agency level, including— (i) Type of system. (ii) Vendor limiting and selection criteria. (iii) A sample vendor, farmer and/or farmers' market, if applicable, agreement. (iv) Vendor monitoring. (v) Farmer monitoring. (vi) Options regarding trafficking convictions. (vii) Food instruments and cash-value vouchers. (viii) Names of contractors. (ix) Nutrition services and administration funds conversion (x) Homeless participants. (xi) Infant formula cost containment. (xii) Vendor, farmer and/or farmers' market training. (xiii) Food instrument and cash-value voucher security. (xiv) Participant access determination criteria. (xv) Mobile stores. (xvi) Vendor cost containment. (xvii) Other cost containment systems. (xviii) List of infant formula wholesalers, distributors, and retailers. (xix) A description of how the State agency will replace lost, stolen, or damaged EBT cards and transfer the associated benefits within seven business days. (xx) A description of the procedures established by the State agency to provide customer service during non-business hours that enable participants or proxies to report a lost, stolen, or damaged card, report other card or benefit issues, receive information on the EBT food balance and receive the current benefit end date. The procedures shall address how the State agency will respond to reports of a lost, stolen, or damaged card within one business day of the date of report. (15) The State agency's procedures for accepting and processing vendor applications outside of its established timeframes if the State agency determines there will otherwise be inadequate participant access to the WIC Program. (16) The State agency's plans to prevent and identify dual participation in accordance with § 246.7(l)(1)(i) and (l)(1)(ii). In States where the Program and the CSFP operate in the same area, or where an Indian State agency operates a Program in the same area as a geographic State agency, a copy of the written agreement between the State agencies for the detection and prevention of dual participation shall be submitted. (17) A description of the procedures the State will use to comply with the civil rights requirements described in § 246.8, including the processing of discrimination complaints. (18) A copy of the State agency's fair hearing procedures for participants and the administrative appeal procedures for local agencies, food vendors, farmers and farmers' markets. (19) The State agency's plan to ensure that participants receive required health and nutrition assessments when certified for a period of greater than six months. (20) The State agency's plan to reach and enroll migrants, and eligible women in the early months of pregnancy. (21) The State agency's plan to establish, to the extent practicable, that homeless facilities, and institutions if it chooses to make the Program available to them, meet the conditions established in § 246.7(n)(1)(i) of this part, if residents of such accommodations are to be eligible to receive WIC Program benefits. (22) A plan to provide program benefits to unserved infants and children under the care of foster parents, protective services, or child welfare authorities, including infants exposed to drugs perinatally. (23) A plan to improve access to the Program for participants and prospective applicants who are employed or who reside in rural areas, by addressing their special needs through the adoption or revision of procedures and practices to minimize the time participants and applicants must spend away from work and the distances participants and applicants must travel. The State agency shall also describe any plans for issuance of food instruments and cash-value vouchers to employed or rural participants, or to any other segment of the participant population, through means other than direct participant pick-up, pursuant to § 246.12(r)(4). Such description shall also include measures to ensure the integrity of Program services and fiscal accountability. The State agency will also describe its policy for approving transportation of participants to and from WIC clinics. (24) Assurance that each local agency and any subgrantees of the State agency and/or local agencies are in compliance with the requirements of 2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417 regarding nonprocurement debarment/suspension. (25) A description of the State agency's plans to provide and maintain a drug-free workplace in compliance with requirements in 2 CFR part 180, Government-wide Requirements for Drug-Free Workplace (Financial Assistance) and USDA implementing regulation 2 CFR part 421. (26) A list of all organizations with which the State agency or its local agencies has executed or intends to execute a written agreement pursuant to § 246.26(h) authorizing the use and disclosure of confidential applicant and participant information for non-WIC purposes. (27) The State agency's policies and procedures for preventing conflicts of interest at the local agency or clinic level in a reasonable manner. At a minimum, this plan must prohibit the following WIC certification practices by local agency or clinic employees, or provide effective alternative policies and procedures when such prohibition is not possible: (i) Certifying oneself; (ii) Certifying relatives or close friends; or, (iii) One employee determining eligibility for all certification criteria and issuing food instruments, cash-value vouchers or supplemental food for the same participant. (28) The State agency's plan for collecting and maintaining information on cases of participant and employee fraud and abuse. Such information should include the nature of the fraud detected and the associated dollar losses. (29) The State agency's Universal Identifier number. (30) Plans of alternate operating procedures, commonly referred to as disaster plans, to support the continuation of WIC services during an emergency period as defined at § 246.2, supply chain disruption as defined at § 246.2, and supplemental food recall. State agencies must consider the unique and sudden nature of an emergency period, supplemental food recall, and other supply chain disruptions when developing alternate operating procedures. Alternate procedures must describe the process by which the State agency will minimize the negative impact to WIC operations and services and ensure the availability of authorized supplemental foods, especially infant formula, to the extent feasible. At a minimum, alternate operating procedures must include- (i) A plan to address operation of specific Program areas including- (A) Access to Program records; (B) Alternate certification and benefit issuance; (C) Verification of Certification (VOC) issuance; (D) Food package adjustments; (E) Vendor requirements; (F) Benefit transaction and redemption; and (G) Food delivery systems. (ii) A plan to ensure continuity of WIC services and address the needs of participants with documented qualifying conditions receiving Food Package III, rural areas, Indian tribal organizations, and other priority populations in the affected area as applicable; (iii) A designated emergency contact within the State agency for an emergency period, supplemental food recall, and other supply chain disruptions; (iv) A designated emergency contact within the State agency to address the needs of participants with documented qualifying conditions receiving Food Package III; (v) A plan to establish relationships with relief agencies responsible for disaster and public health emergency planning applicable to the State agency's jurisdiction and participants to support data-informed approaches when responding to an emergency period, supplemental food recall, and other supply chain disruptions; (vi) A plan to limit the disruption of infant formula benefits in the event of an emergency period, supplemental food recall, and other supply chain disruptions; (vii) A communications plan to keep FNS, State and local agency staff, authorized WIC vendors, WIC participants, and the public informed during an emergency period, supplemental food recall, and other supply chain disruptions; (viii) A plan to report to FNS on alternate operating procedures implemented during an emergency period, supplemental food recall, and other supply chain disruptions which includes Program data and information on the impact of benefit use and delivery; and (ix) A plan to adjust State agency specific minimum requirements for the variety and quantity of supplemental foods that a vendor applicant must stock to be authorized. (b) Public comment. (c) Amendments. (d) Retention of copy. [50 FR 6121, Feb. 13, 1985] Editorial Note For Federal Register www.govinfo.gov. § 246.5 Selection of local agencies. (a) General. (b) Application of local agencies. (c) Program initiation and expansion. (1) The State agency will consider the Affirmative Action Plan (see § 246.4(a)(5)) when funding local agencies and expanding existing operations, and may consider how much of the current need is being met at each priority level. The selection criteria cited in paragraph (d)(1) of this section shall be applied to each area or special population before eliminating that area from consideration and serving the next area of special population. The State agency shall consider the number of participants in each priority level being served by existing local agencies in determining when it is appropriate to move into additional areas in the Affirmative Action Plan or to expand existing operations in an area. Additionally, the State agency shall consider the total number of people potentially eligible in each area compared to the number being served. (2) The State agency shall provide a written justification to FNS for not funding an agency to serve the highest priority area or special population. Such justification may include its inability to administer the Program, lack of interest expressed for operating the Program, or for those areas or special populations which are under consideration for expansion of an existing operation, a determination by the State agency that there is a greater need for funding an agency serving an area or special population not operating the Program. The State agency shall use the participant priority system in § 246.7 as a measurement of greater need in such determination. (3) The State agency may fund more than one local agency to serve the same area or special population as long as more than one local agency is necessary to serve the full extent of need in that area or special population. (d) Local agency priority system. (1) The State agency shall consider the following priority system, which is based on the relative availability of health and administrative services, in the selection of local agencies: (i) First consideration shall be given to a public or a private nonprofit health agency that will provide ongoing, routine pediatric and obstetric care and administrative services. (ii) Second consideration shall be given to a public or a private nonprofit health or human service agency that will enter into a written agreement with another agency for either ongoing, routine pediatric and obstetric care or administrative services. (iii) Third consideration shall be given to a public or private nonprofit health agency that will enter into a written agreement with private physicians, licensed by the State, in order to provide ongoing, routine pediatric and obstetric care to a specific category of participants (women, infants or children). (iv) Fourth consideration shall be given to a public or private nonprofit human service agency that will enter into a written agreement with private physicians, licensed by the State, to provide ongoing, routine pediatric and obstetric care. (v) Fifth consideration shall be given to a public or private nonprofit health or human service agency that will provide ongoing, routine pediatric and obstetric care through referral to a health provider. (2) The State agency must, when seeking new local agencies, publish a notice in the local media (unless it has received an application from a local public or nonprofit private health agency that can provide adequate services). The notice will include a brief explanation of the Program, a description of the local agency priority system (outlined in this paragraph (d)), and a request that potential local agencies notify the State agency of their interest. In addition, the State agency will contact all potential local agencies to make sure they are aware of the opportunity to apply. If an application is not submitted within 30 days, the State agency may then select a local agency in another area. If sufficient funds are available, a State agency will give notice and consider applications outside the local area at the same time. (e) Disqualification of local agencies. (i) When the State agency determines noncompliance with Program regulations; (ii) When the State's Program funds are insufficient to support the continued operation of all its existing local agencies at their current participation level; or (iii) When the State agency determines, following a review of local agency credentials in accordance with paragraph (f) of this section, that another local agency can operate the Program more effectively and efficiently. (2) The State agency may establish its own criteria for disqualification of local agencies. The State agency shall notify the local agency of any State-established criteria. In addition to any State established criteria, the State agency shall consider, at a minimum— (i) The availability of other community resources to participants and the cost efficiency and cost effectiveness of the local agency in terms of both food and nutrition services and administration costs; (ii) The percentages of participants in each priority level being served by the local agency and the percentage of need being met in each participant category; (iii) The relative position of the area or special population served by the local agency in the Affirmative Action Plan; (iv) The local agency's place in the priority system in paragraph (d)(1) of this section; and (v) The capability of another local agency or agencies to accept the local agency's participants. (3) When disqualifying a local agency under the Program, the State agency shall— (i) Make every effort to transfer affected participants to another local agency without disruption of benefits; (ii) Provide the affected local agency with written notice not less than 60 days in advance of the pending action which includes an explanation of the reasons for disqualification, the date of disqualification, and, except in cases of the expiration of a local agency's agreement, the local agency's right to appeal as set forth in § 246.18; and (iii) Ensure that the action is not in conflict with any existing written agreements between the State and the local agency. (f) Periodic review of local agency qualifications. [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985; 65 FR 53527, Sept. 5, 2000; 71 FR 56728, Sept. 27, 2006] § 246.6 Agreements with local agencies. (a) Signed written agreements. (b) Provisions of agreement. (1) Complies with all the fiscal and operational requirements prescribed by the State agency pursuant to debarment and suspension requirements and if applicable, the lobbying restrictions of 2 CFR part 200, subpart E, and USDA implementing regulations 2 CFR part 400, part 415, and part 417, and FNS guidelines and instructions, and provides on a timely basis to the State agency all required information regarding fiscal and Program information; (2) Has a competent professional authority on the staff of the local agency and the capabilities necessary to perform the certification procedures; (3) Makes available appropriate health services to participants and informs applicants of the health services which are available; (4) Prohibits smoking in the space used to carry out the WIC Program during the time any aspect of WIC services are performed; (5) Has a plan for continued efforts to make health services available to participants at the clinic or through written agreements with health care providers when health services are provided through referral; (6) Provides nutrition education services, including breastfeeding promotion and support, to participants, in compliance with § 246.11 and FNS guidelines and instructions; (7) Implements a food delivery system prescribed by the State agency pursuant to § 246.12 and approved by FNS; (8) Maintains complete, accurate, documented and current accounting of all Program funds received and expended; (9) Maintains on file and has available for review, audit, and evaluation all criteria used for certification, including information on the area served, income standards used, and specific criteria used to determine nutritional risk; and (10) Does not discriminate against persons on the grounds of race, color, national origin, age, sex or handicap; and compiles data, maintains records and submits reports as required to permit effective enforcement of the nondiscrimination laws. (c) Indian agencies. (d) Health and human service agencies. (e) Health or human service agencies and private physicians. (f) Outreach/Certification In Hospitals. (1) Advises potentially eligible individuals that receive inpatient or outpatient prenatal, maternity, or postpartum services, or that accompany a child under the age of 5 who receives well-child services, of the availability of program services; and (2) To the extent feasible, provides an opportunity for individuals who may be eligible to be certified within the hospital for participation in the WIC Program. [50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11500, Mar. 11, 1994; 63 FR 63974, Nov. 18, 1998; 76 FR 59889, Sept. 28, 2011; 81 FR 66495, Sept. 28, 2016] Subpart C—Participant Eligibility § 246.7 Certification of participants. (a) Integration with health services. (b) Program referral and access. (1) The State agency shall provide each local WIC agency with materials showing the maximum income limits, according to family size, applicable to pregnant women, infants, and children up to age 5 under the medical assistance program established under Title XIX of the Social Security Act (in this section, referred to as the “Medicaid Program”). The local agency shall, in turn, provide to adult individuals applying or reapplying for the WIC Program for themselves or on behalf of others, written information about the Medicaid Program. If such individuals are not currently participating in Medicaid but appear to have family income below the applicable maximum income limits for the program, the local agency shall also refer these individuals to Medicaid, including the referral of infants and children to the appropriate entity in the area authorized to determine eligibility for early and periodic screening, diagnostic, and treatment (EPSDT) services, and, the referral of pregnant women to the appropriate entity in the area authorized to determine presumptive eligibility for the Medicaid Program, if such determinations are being offered by the State. (2) State agencies shall provide WIC services at community and migrant health centers, Indian Health Services facilities, and other federally health care supported facilities established in medically underserved areas to the extent feasible. (3) Local agencies may provide information about other potential sources of food assistance in the local area to adult individuals applying or reapplying in person for the WIC Program for themselves or on behalf of others, when such applicants cannot be served because the Program is operating at capacity in the local area. (4) Each local agency that does not routinely schedule appointments shall schedule appointments for employed adult individuals seeking to apply or reapply for participation in the WIC Program for themselves or on behalf of others so as to minimize the time such individuals are absent from the workplace due to such application. (5) Each local agency shall attempt to contact each pregnant woman who misses her first appointment to apply for participation in the Program in order to reschedule the appointment. At the time of initial contact, the local agency shall request an address and telephone number where the pregnant woman can be reached. (c) Eligibility criteria and basic certification procedures. (i) Reside within the jurisdiction of the State (except for Indian State agencies). Indian State agencies may establish a similar requirement. All State agencies may determine a service area for any local agency, and may require that an applicant reside within the service area. However, the State agency may not use length of residency as an eligibility requirement. (ii) Meet the income criteria specified in paragraph (d) of this section. (iii) Meet the nutritional risk criteria specified in paragraph (e) of this section. (2)(i) At certification, the State or local agency must require each applicant to present proof of residency (i.e., location or address where the applicant routinely lives or spends the night) and proof of identity. The State or local agency must also check the identity of participants, or in the case of infants or children, the identity of the parent or guardian, or proxies when issuing food, cash-value vouchers or food instruments. The State agency may authorize the certification of applicants when no proof of residency or identity exists (such as when an applicant or an applicant's parent is a victim of theft, loss, or disaster; a homeless individual; or a migrant farmworker). In these cases, the State or local agency must require the applicant to confirm in writing his/her residency or identity. Further, an individual residing in a remote Indian or Native village or an individual served by an Indian tribal organization and residing on a reservation or pueblo may establish proof of residency by providing the State agency their mailing address and the name of the remote Indian or Native village. (ii) For a State agency opting to require proof of pregnancy, the State agency may issue benefits to applicants who claim to be pregnant (assuming that all other eligibility criteria are met) but whose conditions (as pregnant) are not visibly noticeable and do not have documented proof of pregnancy at the time of the certification interview and determination. The State agency should then allow a reasonable period of time, not to exceed 60 days, for the applicant to provide the requested documentation. If such documentation is not provided as requested, the woman can no longer be considered categorically eligible, and the local agency would then be justified in terminating the woman's WIC participation in the middle of a certification period. (3) A State, a State agency, and an Indian Tribal Organization (including, an Indian tribe, band, or group recognized by the Department of the Interior; or an intertribal council or group which is an authorized representative of Indian tribes, bands or groups recognized by the Department of the Interior and which has an ongoing relationship with such tribes, bands or groups for other purposes and has contracted with them to administer the Program) serving as a State agency, may limit WIC participation to United States citizens, nationals, and qualified aliens as these terms are defined in the Immigration and Nationality Laws (8 U.S.C. 1101 et seq. (4) The certification procedure shall be performed at no cost to the applicant. (d) Income criteria and income eligibility determinations. (1) Income eligibility guidelines. (i) Local agency income eligibility guidelines. (ii) Annual adjustments in the income guidelines. (iii) Implementation of the income guidelines. On or before July 1 each year, each State agency shall announce and transmit to each local agency the State agency's family size income guidelines, unless changes in the poverty income guidelines issued by the Department of Health and Human Services do not necessitate changes in the State or local agency's income guidelines. The State agency may implement revised guidelines concurrently with the implementation of income guidelines under the Medicaid program established under Title XIX of the Social Security Act (42 U.S.C. 1396 of et seq. (2) Income eligibility determinations. (i) Timeframes for determining income. (ii) Definition of “Income”. (A) Monetary compensation for services, including wages, salary, commissions, or fees; (B) Net income from farm and non-farm self-employment; (C) Social Security benefits; (D) Dividends or interest on savings or bonds, income from estates or trusts, or net rental income; (E) Public assistance or welfare payments; (F) Unemployment compensation; (G) Government civilian employee or military retirement or pensions or veterans' payments; (H) Private pensions or annuities; (I) Alimony or child support payments; (J) Regular contributions from persons not living in the household; (K) Net royalties; and (L) Other cash income. Other cash income includes, but is not limited to, cash amounts received or withdrawn from any source including savings, investments, trust accounts and other resources which are readily available to the family. (iii) Use of a State or local health care definition of “Income”. (iv) Income exclusions. ( 1 ( 2 (B) The value of inkind housing and other inkind benefits, shall be excluded from consideration as income in determining an applicant's eligibility for the program. (C) Loans, not including amounts to which the applicant has constant or unlimited access. (D) Payments or benefits provided under certain Federal programs or acts are excluded from consideration as income by legislative prohibition. The payments or benefits which must be excluded from consideration as income include, but are not limited to: ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 ( 10 ( 11 ( 12 ( 13 ( 14 ( 15 ( 16 ( 17 ( 18 ( 19 ( 20 ( 21 ( 22 ( 23 ( 24 ( 25 ( 26 ( 27 ( 28 ( 29 ( 30 ( 31 ( 32 ( 33 ( 34 ( 35 (v) Are applicants required to document income eligibility? Adjuctively/automatically income eligible applicants. (B) Other applicants. (C) Exceptions. (D) Verification. (vi) Adjunct or automatic income eligibility. ( 1 ( 2 (B) The State agency may accept, as evidence of income within Program guidelines, documentation of the applicant's participation in State-administered programs not specified in this paragraph that routinely require documentation of income, provided that those programs have income eligibility guidelines at or below the State agency's Program income guidelines. (C) Persons who are adjunctively income eligible, as set forth in paragraphs (d)(2)(vi)(A) of this section, shall not be subject to the income limits established under paragraph (d)(1) of this section. (vii) Income eligibility of pregnant women. (viii) Income eligibility of Indian applicants. (ix) Are instream migrant farmworkers and their family members required to document income eligibility? (e) Nutritional risk. Except as stated in paragraph (e)(1)(v) of this section, at least one determination of nutritional risk must be documented at the time of certification in order for an income eligible applicant to receive WIC benefits. (1) Determination of nutritional risk. Required nutritional risk data. ( 1 ( 2 ( 3 (B) Height or length and weight measurements and, with the exceptions specified in paragraph (e)(1)(v) of this section, hematological tests, shall be obtained for all participants, including those who are determined at nutritional risk based solely on the established nutritional risk status of another person, as provided in paragraphs (e)(1)(iv) and (e)(1)(v) of this section. (ii) Timing of nutritional risk data. Weight and height or length. (B) Hematological test for anemia. 1 ( 2 ( 3 (iii) Breastfeeding dyads. (iv) Infants born to WIC mothers or women who were eligible to participate in WIC. (v) Presumptive eligibility for pregnant women. (vi) Regression. (2) Nutritional risk criteria. (i) Detrimental or abnormal nutritional conditions detectable by biochemical or anthropometric measurements, such as anemia, underweight, overweight, abnormal patterns of weight gain in a pregnant woman, low birth weight in an infant, or stunting in an infant or child; (ii) Other documented nutritionally related medical conditions, such as clinical signs of nutritional deficiencies, metabolic disorders, pre-eclampsia in pregnant women, failure to thrive in an infant, chronic infections in any person, alcohol or drug abuse or mental retardation in women, lead poisoning, history of high risk pregnancies or factors associated with high risk pregnancies (such as smoking; conception before 16 months postpartum; history of low birth weight, premature births, or neonatal loss; adolescent pregnancy; or current multiple pregnancy) in pregnant women, or congenital malformations in infants or children, or infants born of women with alcohol or drug abuse histories or mental retardation. (iii) Dietary deficiencies that impair or endanger health, such as inadequate dietary patterns assessed by a 24-hour dietary recall, dietary history, or food frequency checklist; and (iv) Conditions that predispose persons to inadequate nutritional patterns or nutritionally related medical conditions, such as homelessness or migrancy. (3) Nutritional risk priorities. (4) Nutritional risk priority system. OR, (i) Priority I. (ii) Priority II. (iii) Priority III. (iv) Priority IV. (v) Priority V. (vi) Priority VI. (vii) Priority VII. (f) Processing standards. (1) Waiting lists. (2) Timeframes for processing applicants. (ii) The processing timeframes shall begin when the individual visits the local agency during clinic office hours to make an oral or written request for Program benefits. To ensure that accurate records are kept of the date of such requests, the local agency shall, at the time of each request, record the applicant's name, address and the date. The remainder of the information necessary to determine eligibility shall be obtained by the time of certification. Medical data taken prior to certification may be used as provided in paragraph (g)(4) of this section. (iii) The local agency shall act on applications within the following timeframes: (A) Special nutritional risk applicants shall be notified of their eligibility or ineligibility within 10 days of the date of the first request for Program benefits; except that State agencies may provide an extension of the notification period to a maximum of 15 days for those local agencies which make written request, including a justification of the need for an extension. The State agency shall establish criteria for identifying categories of persons at special nutritional risk who require expedited services. At a minimum, however, these categories shall include pregnant women eligible as Priority I participants, and migrant farmworkers and their family members who soon plan to leave the jurisdiction of the local agency. (B) All other applicants shall be notified of their eligibility or ineligibility within 20 days of the date of the first request for Program benefits. (iv) Each local agency using a retail purchase system shall issue a food instrument(s) and if applicable cash-value voucher(s) to the participant at the same time as notification of certification. Such food instrument(s) and cash-value vouchers shall provide benefits for the current month or the remaining portion thereof and shall be redeemable immediately upon receipt by the participant. Local agencies may mail the initial food instrument(s) and if applicable cash-value vouchers with the notification of certification to those participants who meet the criteria for the receipt of food instruments through the mail, as provided in § 246.12(r)(4). (v) Each local agency with a direct distribution or home delivery system shall issue the supplemental foods to the participant within 10 days of issuing the notification of certification. (g) Certification periods. A/an: Will be certified: (i) Pregnant woman For the duration of her pregnancy, and up to the last day of the month in which the infant becomes six weeks old or the pregnancy ends (for example, if the infant is born June 4, six weeks after birth would be July 16, and certification would end July 31). (ii) Postpartum woman Up to the last day of the sixth month after the baby is born or the pregnancy ends (postpartum). (iii) Breastfeeding woman Approximately every six months. The State agency may permit its local agencies to certify a breastfeeding woman up to the last day of the month in which her infant turns 1 year old, or until the woman ceases breastfeeding, whichever occurs first. (iv) Infant Approximately every six months. The State agency may permit its local agencies to certify an infant under six months of age up to the last day of the month in which the infant turns 1 year old, provided the quality and accessibility of health care services are not diminished. (v) Child Approximately every six months ending with the last day of the month in which a child reaches his/her fifth birthday. The State agency may permit its local agencies to certify a child for a period of up to one year, provided the local agency ensures that the child receives the required health and nutrition assessments, as set forth in § 246.11(e)(3). (2) The State agency may authorize local agencies under its jurisdiction to establish shorter certification periods than outlined in paragraph (g)(1) of this section on a case-by-case basis. If the State agency exercises this option, it shall issue guidance for use by local agencies in establishing the shorter periods. (3) In cases where there is difficulty in appointment scheduling for persons referenced in paragraphs (g)(1) (iii), (iv) and (v) of this section, the certification period may be shortened or extended by a period not to exceed 30 days. (h) Mandatory and optional mid-certification actions. (1) Mandatory reassessment of income eligibility mid-certification. (ii) Mandatory disqualification mid-certification for income ineligibility. (2) Mandatory sanctions or other actions for participant violations. Participant violation (3) Optional mid-certification actions. (i) A State agency may allow local agencies to disqualify a participant for failure to obtain food instruments, cash-value vouchers or supplemental foods for several consecutive months. As specified by the State agency, proof of such failure includes failure to pick up supplemental foods, cash-value vouchers or food instruments, nonreceipt of food instruments or cash-value vouchers (when mailed instruments or vouchers are returned), or failure to have an electronic benefit transfer card revalidated for purchase of supplemental foods; or (ii) If a State agency experiences funding shortages, it may be necessary to discontinue Program benefits to some certified participants. The State agency must explore alternatives (such as elimination of new certifications) before taking such action. In discontinuing benefits, the State agency will affect the least possible number of participants and those whose nutritional and health status would be least impaired by the action. When a State agency elects to discontinue benefits due to insufficient funds, it will not enroll new participants during that period. The State may discontinue benefits by: (A) Disqualifying a group of participants; and/or, (B) Withholding benefits from a group with the expectation of providing benefits again when funds are available. (i) Certification forms. (1) Name and address; (2) Date of initial visit to apply for participation; (3) An indication of whether the applicant was physically present at certification and, if not, the reason why an exception was granted or a copy of the document(s) in the file which explains the reason for the exception; (4) A description of the document(s) used to determine residency and identity or a copy of the document(s) used or the applicant's written statement when no documentation exists; (5) Information regarding income eligibility for the Program as specified in paragraph (d) of this section as follows: (i) A description of the document(s) used to determine income eligibility or a copy of the document(s) in the file; (ii) An indication that no documentation is available and the reason(s) why or a copy of the applicant's written statement explaining such circumstances; or (iii) An indication that the applicant has no income. (6) The date of certification and the date nutritional risk data were taken if different from the date of certification; (7) Height or length, weight, and hematological test results; (8) The specific nutritional risk conditions which established eligibility for the supplemental foods. Documentation should include health history when appropriate to the nutritional risk condition, with the applicant's or applicant's parent's or caretaker's consent; (9) The signature and title of the competent professional authority making the nutritional risk determination, and, if different, the signature and title of the administrative person responsible for determining income eligibility under the Program; and (10) A statement of the rights and obligations under the Program. The statement must contain a signature space, and must be read by or to the applicant, parent, or caretaker. It must contain the following language or alternate language as approved by FNS (see § 246.4(a)(11)(i)), and be signed by the applicant, parent, or caretaker after the statement is read: I have been advised of my rights and obligations under the Program. I certify that the information I have provided for my eligibility determination is correct, to the best of my knowledge. This certification form is being submitted in connection with the receipt of Federal assistance. Program officials may verify information on this form. I understand that intentionally making a false or misleading statement or intentionally misrepresenting, concealing, or withholding facts may result in paying the State agency, in cash, the value of the food benefits improperly issued to me and may subject me to civil or criminal prosecution under State and Federal law. (11) If the State agency exercises the authority to use and disclose confidential applicant and participant information for non-WIC purposes pursuant to § 246.26(d)(2), a statement that: (i) Notifies applicants that the chief State health officer (or the governing authority, in the case of an Indian State agency) may authorize the use and disclosure of information about their participation in the WIC Program for non-WIC purposes; (ii) Must indicate that such information will be used by State and local WIC agencies and public organizations only in the administration of their programs that serve persons eligible for the WIC Program; and, (iii) Will be added to the statement required under paragraph (i)(10) of this section. This statement must also indicate that such information can be used by the recipient organizations only for the following: (A) To determine the eligibility of WIC applicants and participants for programs administered by such organizations; (B) To conduct outreach for such programs; (C) To enhance the health, education, or well-being of WIC applicants and participants currently enrolled in those programs; (D) To streamline administrative procedures in order to minimize burdens on participants and staff; and, (E) To assess and evaluate a State's health system in terms of responsiveness to participants' health care needs and health care outcomes. (j) Notification of participant rights and responsibilities. (1) During the certification procedure, every Program applicant, parent or caretaker shall be informed of the illegality of dual participation. (2) At the time of certification, each Program participant, parent or caretaker must read, or have read to him or her, the statement provided in paragraph (i)(10) of this section (or an alternate statement as approved by FNS). In addition, the following sentences (or alternate sentences as approved by FNS) must be read: (i) “Standards for eligibility and participation in the WIC Program are the same for everyone, regardless of race, color, national origin, age, handicap, or sex.” (ii) “You may appeal any decision made by the local agency regarding your eligibility for the Program.” (iii) “The local agency will make health services, nutrition education and breastfeeding support available to you, and you are encouraged to participate in these services.” (3) If the State agency implements the policy of disqualifying a participant for not picking up supplemental foods, cash-value vouchers or food instruments in accordance with paragraph (h)(3)(i) of this section, it shall provide notice of this policy and of the importance of regularly picking up cash-value vouchers, food instruments or supplemental foods to each participant, parent or caretaker at the time of each certification. (4) At least during the initial certification visit, each participant, parent or caretaker shall receive an explanation of how the local food delivery system operates and shall be advised of the types of health services available, where they are located, how they may be obtained and why they may be useful. (5) Persons found ineligible for the Program during a certification visit shall be advised in writing of the ineligibility, of the reasons for the ineligibility, and of the right to a fair hearing. The reasons for ineligibility shall be properly documented and shall be retained on file at the local agency. (6) A person who is about to be suspended or disqualified from program participation at any time during the certification period shall be advised in writing not less than 15 days before the suspension or disqualification. Such notification shall include the reasons for this action, and the participant's right to a fair hearing. Further, such notification need not be provided to persons who will be disqualified for not picking up cash-value vouchers, supplemental foods or food instruments in accordance with paragraph (h)(3)(i) of this section. (7) When a State or local agency pursues collection of a claim pursuant to § 246.23(c) against an individual who has been improperly issued benefits, the person shall be advised in writing of the reason(s) for the claim, the value of the improperly issued benefits which must be repaid, and of the right to a fair hearing. (8) Each participant, parent or caretaker shall be notified not less than 15 days before the expiration of each certification period that certification for the Program is about to expire. (9) If a State agency must suspend or terminate benefits to any participant during the participant's certification period due to a shortage of funds for the Program, it shall issue a notice to such participant in advance, as stipulated in paragraph (j)(6) of this section. (10) During WIC certification, every Program applicant, parent, or caretaker shall be informed that selling or offering to sell WIC benefits, cash-value vouchers, paper food instruments, EBT cards, supplemental foods, or breast pumps in person, in print, or on-line is a participant violation. (k) Transfer of certification. (2) The State agency shall require the receiving local agency to accept Verification of Certification cards from participants, including participants who are migrant farmworkers or members of their families, who have been participating in the Program in another local agency within or outside of the jurisdiction of the State agency. A person with a valid Verification of Certification card shall not be denied participation in the receiving State because the person does not meet that State's particular eligibility criteria. (3) The Verification of Certification card is valid until the certification period expires, and shall be accepted as proof of eligibility for Program benefits. If the receiving local agency has waiting lists for participation, the transferring participant shall be placed on the list ahead of all waiting applicants. (4) The Verification of Certification card shall include the name of the participant, the date the certification was performed, the date income eligibility was last determined, the nutritional risk condition of the participant, the date the certification period expires, the signature and printed or typed name of the certifying local agency official, the name and address of the certifying local agency and an identification number or some other means of accountability. The Verification of Certification card shall be uniform throughout the jurisdiction of the State agency. (l) Dual participation. (1) In conjunction with WIC local agencies, the prevention and identification of dual participation within each local agency and between local agencies under the State agency's jurisdiction, including actions to identify suspected instances of dual participation at least semiannually. The State or local agency must take follow-up action within 120 days of detecting instances of suspected dual participation; (2) In areas where a local agency serves the same population as an Indian State agency or a CSFP agency, and in areas where geographical or other factors make it likely that participants travel regularly between contiguous local service areas located across State agency borders, entering into an agreement with the other agency for the detection and prevention of dual participation. The agreement must be made in writing and included in the State Plan; (3) Immediate termination from participation in one of the programs or clinics for participants found in violation due to dual participation; and (4) In cases of dual participation resulting from intentional misrepresentation, the collection of improperly issued benefits in accordance with § 246.23(c)(1) and disqualification from both programs in accordance with § 246.12(u)(2). (m) Certification of persons in homeless facilities and institutions. (i) Establish, to the extent practicable, that the homeless facility meets the following conditions with respect to resident WIC participants: (A) The homeless facility does not accrue financial or in-kind benefit from a person's participation in the Program, e.g., by reducing its expenditures for food service because its residents are receiving WIC foods; (B) Foods provided by the WIC Program are not subsumed into a communal food service, but are available exclusively to the WIC participant for whom they were issued; (C) The homeless facility places no constraints on the ability of the participant to partake of the supplemental foods, nutrition education and breastfeeding support available under the Program; (ii) Contact the homeless facility periodically to ensure continued compliance with these conditions; and (iii) Request the homeless facility to notify the State or local agency if it ceases to meet any of these conditions. (2) The State agency may authorize or require local agencies to make the Program available to applicants who meet the requirements of paragraph (c) of this section, but who reside in institutions which meet the conditions of paragraphs (n)(1)(i)(A)-(C) of this section with respect to resident WIC participants. (3) The State or local agency shall attempt to establish to the best of its ability,whether a homeless facility or institution complies with the conditions of paragraphs (n)(1)(i) (A)-(C) of this section with respect to WIC participants. If caseload slots are available, full certification periods shall be provided to the following: (i) Participants who are residents of a homeless facility or institution which has been found to be in compliance with the conditions of paragraph (n)(1)(i)(A)-(C) of this section; (ii) Participants who are residents of a homeless facility or institution whose compliance with the conditions of paragraphs (n)(1)(i)(A)-(C) of this section has not yet been established; and (iii) Participants for whom no other shelter alternative is available in the local agency's service delivery area. (4) If a homeless facility or institution has been determined to be noncompliant during the course of a participant's initial certification period, participants applying for continued benefits may be certified again, but the State agency shall discontinue issuance of WIC foods, except infant formula, to the participant in such accommodation until the accommodation's compliance is achieved or alternative shelter arrangements are made. If certified, such participants shall continue to be eligible to receive all other WIC benefits, such as nutrition education, including breastfeeding promotion and support, and health care referral services. (5) The State agency shall continue to the end of their certification periods the participation of residents of a homeless facility or institution which ceases to comply with the conditions of paragraphs (n)(1)(i)(A)-(C) of this section. (6) As soon as the State or local agency determines that a homeless facility/institution does not meet the conditions of paragraphs (n)(1)(i) (A)-(C) of this section, it shall refer all participants using such accommodation to any other accommodations in the area which meet these conditions. (n) Drug and other harmful substance abuse screening. (1) Be limited to the extent the State agency deems necessary to fulfill the referral requirement of § 246.4(a)(8) of this part and the drug and other harmful substance abuse information requirement of § 246.11(a)(3) of this part; and (2) Be integrated into certification process as part of the medical or nutritional assessment. (o) Are applicants required to be physically present at certification? In general. (2) Exceptions Disabilities. (A) A medical condition that necessitates the use of medical equipment that is not easily transportable; (B) A medical condition that requires confinement to bed rest; and (C) A serious illness that may be exacerbated by coming in to the WIC clinic. (ii) Receiving ongoing health care. (iii) Working parents or caretakers. and and (iv) Infants under 8 weeks of age. (p) Certification of qualified aliens. et seq. [50 FR 6121, Feb. 13, 1985] Editorial Note: For Federal Register www.govinfo.gov. § 246.8 Nondiscrimination. (a) Civil rights requirements. (1) Notification to the public of the nondiscrimination policy and complaint rights of participants and potentially eligible persons; (2) Review and monitoring activity to ensure Program compliance with the nondiscrimination laws and regulations; (3) Collection and reporting of racial and ethnic participation data as required by title VI of the Civil Rights Act of 1964, which prohibits discrimination in federally assisted programs on the basis of race, color, or national origin; and (4) Establishment of grievance procedures for handling complaints based on sex and handicap. (b) Complaints. (c) Non-English materials. [50 FR 6121, Feb. 13, 1985, as amended at 73 FR 11312, Mar. 3, 2008] § 246.9 Fair hearing procedures for participants. (a) Availability of hearings. (b) Hearing system. (c) Notification of appeal rights. (d) Request for hearing. (e) Time limit for request. (f) Denial or dismissal of request. (1) The request is not received within the time limit set by the State agency in accordance with paragraph (e) of this section; (2) The request is withdrawn in writing by the appellant or a representative of the appellant; (3) The appellant or representative fails, without good cause, to appear at the scheduled hearing; or (4) The appellant has been denied participation by a previous hearing and cannot provide evidence that circumstances relevant to Program eligibility have changed in such a way as to justify a hearing. (g) Continuation of benefits. (h) Rules of procedure. (i) Hearing official. (1) Administer oaths or affirmations if required by the State; (2) Ensure that all relevant issues are considered; (3) Request, receive and make part of the hearing record all evidence determined necessary to decide the issues being raised; (4) Regulate the conduct and course of the hearing consistent with due process to ensure an orderly hearing; (5) Order, where relevant and necessary, an independent medical assessment or professional evaluation from a source mutually satisfactory to the appellant and the State agency; and (6) Render a hearing decision which will resolve the dispute. (j) Conduct of the hearing. (1) Examine, prior to and during the hearing, the documents and records presented to support the decision under appeal; (2) Be assisted or represented by an attorney or other persons; (3) Bring witnesses; (4) Advance arguments without undue interference; (5) Question or refute any testimony or evidence, including an opportunity to confront and cross-examine adverse witnesses; and (6) Submit evidence to establish all pertinent facts and circumstances in the case. (k) Fair hearing decisions. (2) The decision by the hearing official shall summarize the facts of the case, specify the reasons for the decision, and identify the supporting evidence and the pertinent regulations or policy. The decision shall become a part of the record. (3) Within 45 days of the receipt of the request for the hearing, the State or local agency shall notify the appellant or representative in writing of the decision and the reasons for the decision in accordance with paragraph (k)(2) of this section. If the decision is in favor of the appellant and benefits were denied or discontinued, benefits shall begin immediately. If the decision concerns disqualification and is in favor of the agency, as soon as administratively feasible, the local agency shall terminate any continued benefits, as decided by the hearing official. If the decision regarding repayment of benefits by the appellant is in favor of the agency, the State or local agency shall resume its efforts to collect the claim, even during pendency of an appeal of a local-level fair hearing decision to the State agency. The appellant may appeal a local hearing decision to the State agency, provided that the request for appeal is made within 15 days of the mailing date of the hearing decision notice. If the decision being appealed concerns disqualification from the Program, the appellant shall not continue to receive benefits while an appeal to the State agency of a decision rendered on appeal at the local level is pending. The decision of a hearing official at the local level is binding on the local agency and the State agency unless it is appealed to the State level and overturned by the State hearing official. (4) The State and local agency shall make all hearing records and decisions available for public inspection and copying; however, the names and addresses of participants and other members of the public shall be kept confidential. (l) Judicial review. [50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21236, June 4, 1987; 59 FR 11503, Mar. 11, 1994; 71 FR 56730, Sept. 27, 2006; 73 FR 11312, Mar. 3, 2008] Subpart D—Participant Benefits § 246.10 Supplemental foods. (a) General. (b) State agency responsibilities. (i) Establish criteria in addition to the minimum Federal requirements in table 4 to paragraph (e)(12) of this section for the supplemental foods in their States, except that the State agency may not selectively choose which eligible fruits and vegetables are available to participants. These State agency criteria could address, but not be limited to, other nutritional standards, competitive cost, State-wide availability, and participant appeal. For eligible fruits and vegetables, State agencies may restrict packaging, e.g., (ii) Make food package adjustments to better accommodate participants who are homeless. At the State agency's option, these adjustments would include, but not be limited to, issuing authorized supplemental foods in individual serving-size containers to accommodate lack of food storage or preparation facilities. (iii) Authorize package sizes, in addition to those authorized to fulfill paragraph (b)(2)(i) of this section, that increase participant variety and choice, except WIC formula, which must be authorized in sizes that correspond with the maximum monthly allowances per paragraphs (e)(9) and (11) of this section. (2) State agencies must: (i) Identify the brands of foods and package sizes that are acceptable for use in the Program in their States in accordance with the requirements of this section; all State agencies must authorize at least one package size (or combination of package sizes) that equal or add up to the maximum monthly allowances of all authorized supplemental foods in each of the food packages. State agencies must also provide to local agencies, and include in the State Plan, a list of acceptable foods and their maximum monthly allowances as specified in tables 1 through 4 to paragraphs (e)(9) through (12) of this section; and (ii) Ensure that local agencies: (A) Make available to participants the maximum monthly allowances of authorized supplemental foods, except as noted in paragraph (c) of this section, inform participants about the maximum monthly allowances of authorized supplemental foods to which they are entitled as a Program participant and any food substitution options as specified in tables 1 through 3 to paragraphs (e)(9) through (11) of this section that the State agency authorizes, and abide by the authorized substitution rates for WIC food substitutions as specified in tables 1 through 3 to paragraphs (e)(9) through (11); (B) Make available to participants more than one food from each WIC food category except for the categories of peanut butter and eggs, and any of the WIC-eligible fruits and vegetables (fresh or processed) in each authorized food package as listed in paragraph (e) of this section; (C) Authorize only a competent professional authority to prescribe the categories of authorized supplemental foods in quantities that do not exceed the regulatory maximum and are appropriate for the participant, taking into consideration the participant's nutritional and breastfeeding needs; and (D) Advise participants or their caretaker, when appropriate, that the supplemental foods issued are only for their personal use. However, the supplemental foods are not authorized for participant use while hospitalized on an in-patient basis. In addition, consistent with § 246.7(m)(1)(i)(B), supplemental foods are not authorized for use in the preparation of meals served in a communal food service. This restriction does not preclude the provision or use of supplemental foods for individual participants in a nonresidential setting ( e.g., e.g., (c) Nutrition tailoring. (1) Medically or nutritionally warranted ( e.g., (2) A participant refuses or cannot use the maximum monthly allowances, or chooses to take less than the maximum monthly allowance; or (3) The quantities necessary to supplement another program's contribution to fill a medical prescription would be less than the maximum monthly allowances. (d) Medical documentation Supplemental foods requiring medical documentation. (i) Any non-contract brand infant formula; (ii) Any infant formula prescribed to an infant, child, or adult who receives Food Package III (see paragraph (e)(3) of this section); (iii) Any exempt infant formula; (iv) Any WIC-eligible nutritional; (v) Any authorized supplemental food issued to participants who receive Food Package III; and (vi) Any contract brand infant formula that does not meet the requirements in table 4 to paragraph (e)(12) of this section. (2) Medical documentation for other supplemental foods. (ii) The State agency has the discretion to require medical documentation for any contract brand infant formula other than the primary contract infant formula and may decide that some contract brand infant formula may not be issued under any circumstances. (3) Medical determination. (i) Made a medical determination that the participant has a qualifying condition as described in paragraphs (e)(1) through (7) of this section that dictates the use of the supplemental foods, as described in paragraph (d)(1) of this section; and (ii) Provided the written documentation that meets the technical requirements described in paragraphs (d)(4)(ii) and (iii) of this section. (4) Technical requirements Location. (ii) Content. (A) The name of the authorized WIC formula (infant formula, exempt infant formula, WIC-eligible nutritional) prescribed, including amount needed per day; (B) The authorized supplemental food(s) appropriate for the qualifying condition(s) and their prescribed amounts; (C) Length of time the prescribed WIC formula and/or supplemental food is required by the participant; (D) The qualifying condition(s) for issuance of the authorized supplemental food(s) requiring medical documentation, as described in paragraphs (e)(1) through (7) of this section; and (E) Signature, date, and contact information (or name, date, and contact information), if the initial medical documentation was received by telephone and the signed document is forthcoming, of the health care professional licensed by the State to write prescriptions in accordance with State laws. (iii) Written confirmation General. (B) Medical documentation provided by telephone. i.e., (5) Medical supervision requirements. (e) Food packages. (1) Food Package I—Infants birth through 5 months Participant category served. (ii) Infant feeding age categories Birth through 5 months. (iii) Infant formula requirements. (iv) Physical forms. (A) The participant's household has an unsanitary or restricted water supply or poor refrigeration; (B) The person caring for the participant may have difficulty in correctly diluting concentrated or powder forms; or (C) The WIC infant formula is only available in ready-to-feed. (v) Authorized category of supplemental foods. (2) Food Package II—Infants 6 through 11 months Participant category served. (ii) Infant food packages. (iii) Infant formula requirements. (iv) Authorized categories of supplemental foods. (3) Food Package III—Participants with qualifying conditions Participant category served and qualifying conditions. (ii) Non-authorized issuance of Food Package III. (A) Infants whose only condition is: ( 1 ( 2 (B) Women and children who have a food intolerance to lactose or milk protein that can be successfully managed with the use of one of the other WIC food packages ( i.e., (C) Any participant solely for the purpose of enhancing nutrient intake or managing body weight without an underlying qualifying condition. (iii) Restrictions on the issuance of WIC formulas in ready-to-feed (RTF) forms. (A) If a ready-to-feed form better accommodates the participant's condition; or (B) If it improves the participant's compliance in consuming the prescribed WIC formula. (iv) Unauthorized WIC costs. e.g., (v) Authorized categories of supplemental foods. (vi) Coordination with medical payors and other programs that provide or reimburse for formulas. (4) Food Package IV-A and B—Children 1 through 4 years Participant category served. i.e., (ii) Authorized categories of supplemental foods. (5) Food Package V-A and B—Pregnant and partially (mostly) breastfeeding women Participant categories served. (ii) Authorized categories of supplemental foods. (6) Food Package VI—Postpartum women Participant categories served. (ii) Authorized categories of supplemental foods. (7) Food Package VII—Fully breastfeeding Participant categories served. (ii) Authorized categories of supplemental foods. (8) Supplemental foods—Maximum monthly allowances, options and substitution rates, and minimum requirements. (9) Full nutrition benefit and maximum monthly allowances supplemental foods for infants in Food Packages I, II, and III. Table 1 to Paragraph (e)(9) Foods 1 Fully Formula Fed (FF) Partially (mostly) Breastfed (BF/FF) Fully Breastfed (BF) Food Packages I-FF Food Packages II-FF Food Packages IBF/FF & III BF/FF Food Packages II BF/FF & III BF/FF Food Food WIC Formula 2 3 4 5 6 7 8 A: FNB = Up to 806 fl oz. MMA= 823 fl reconstituted liquid concentrate or 832 fl oz RTF or 870 fl oz reconstituted powder FNB = Up to 624 fl oz. MMA = 630 fl oz reconstituted liquid concentrate or 643 fl oz RTF or 696 fl oz reconstituted powder A: FNB = Up to 364 fl oz. MMA = 388 fl oz reconstituted liquid concentrate or 384 fl oz RTF or 435 fl oz reconstituted powder FNB = Up to 312 fl oz. MMA = 315 fl oz reconstituted liquid concentrate or 338 fl oz RTF or 384 fl oz reconstituted powder N/A N/A. B: FNB = Up to 884 fl oz. MMA = 896 fl oz reconstituted liquid concentrate or 913 fl oz RTF or 960 fl oz reconstituted powder B: FNB = Up to 442 fl oz. MMA = 460 fl oz reconstituted liquid concentrate or 474 fl oz RTF or 522 fl oz reconstituted powder Infant Cereal 9 10 11 N/A 8 oz N/A 8 oz N/A 16 oz. Infant food fruits and vegetables 9 10 11 12 13 N/A 128 oz N/A 128 oz N/A 128 oz. Infant food meat 9 10 N/A N/A N/A N/A N/A 40 oz. Notes: 1 2 i.e., 3 4 5 6 7 8 9 10 11 12 13 (10) Maximum monthly allowances of supplemental foods in Food Packages IV through VII. Table 2 to Paragraph (e)(10) Foods 1 Children Women Food Package IV Food Package V 2 Food Package VI 3 Food Package VII 4 5 Juice, single strength 6 7 64 fl oz 64 fl oz 64 fl oz 64 fl oz. Milk, fluid 8 9 10 11 12 13 14 15 A: 12 qt. 8 9 11 12 14 8 10 11 12 13 14 16 qt. 8 10 11 12 13 15 16 qt. 8 10 11 12 13 15 16 qt. 8 10 11 12 13 15 Breakfast cereal 16 36 oz 36 oz 36 oz 36 oz. Eggs 17 1 dozen 1 dozen 1 dozen 2 dozen. Fruits and vegetables 18 19 $24.00 CVV A: $43.00 CVV. $43.00 CVV $47.00 CVV. Whole wheat or whole grain bread 20 24 oz 48 oz 48 oz 48 oz. Fish (canned) 21 22 6 oz A: 10 oz. 10 oz 20 oz. Mature Legumes and/or 23 1 lb dry or 64 oz canned Or 18 oz 1 lb dry or 64 oz canned And 18 oz 1 lb dry or 64 oz canned Or 18 oz 1 lb dry or 64 oz canned And 18 oz. Note: 1 2 3 4 5 6 7 8 e.g., 9 10 11 i.e., 12 13 14 15 16 17 18 i.e., 19 20 21 FDA.gov/fishadviceandEPA.gov/fishadvice. 22 23 (11) Maximum monthly allowances of supplemental foods for children and women with qualifying conditions in Food Package III. Table 3 to Paragraph ( e Foods 1 Children Women A: 12 through 23 months A: Pregnant 2 Postpartum 3 Fully Breastfeeding 4 5 Juice, single strength 6 7 64 fl oz 64 fl oz 64 fl oz 64 fl oz. WIC formula 8 9 Up to 455 fl oz liquid concentrate Up to 455 fl oz liquid concentrate Up to 455 fl oz liquid concentrate Up to 455 fl oz liquid concentrate. Milk, fluid 10 11 12 13 14 15 16 17 A: 12 qt. 10 11 13 14 16 10 12 13 14 15 16 16 qt. 10 12 13 14 15 17 16 qt. 10 12 13 14 15 17 16 qt. 10 12 13 14 15 17 Breakfast cereal 18 19 36 oz 36 oz 36 oz 36 oz. Eggs 20 1 dozen 1 dozen 1 dozen 2 dozen. Fruits and vegetables 21 22 23 $24.00 CVV A: $43.00 CVV. $43.00 CVV 47.00 CVV. Whole wheat or whole grain bread 24 24 oz 48 oz 48 oz 48 oz. Fish (canned) 25 26 6 oz A: 10 oz. 10 oz 20 oz. Mature Legumes and/or 27 1 lb dry or 64 oz canned 1 lb dry or 64 oz canned 1 lb dry or 64 oz canned 1 lb dry or 64 oz canned Note: 1 2 3 4 5 6 7 8 9 10 e.g., 11 12 13 14 15 16 17 18 19 20 21 i.e., 22 23 24 must 25 FDA.gov/fishadviceandEPA.gov/fishadvice. 26 27 (12) Minimum requirements and specifications for supplemental foods. Table 4 to Paragraph ( e Categories/foods Minimum requirements and specifications WIC FORMULA: Infant Formula All authorized infant formulas must: Exempt Infant Formula All authorized exempt infant formula must: WIC-eligible Nutritionals 1 Certain enteral products that are specifically formulated and commercially manufactured (as opposed to a naturally occurring foodstuff used in its natural state) to provide nutritional support for individuals with a qualifying condition, when the use of conventional foods is precluded, restricted, or inadequate. Such WIC-eligible nutritionals must serve the purpose of a food, meal, or diet (may be nutritionally complete or incomplete) and provide a source of calories and one or more nutrients; be designed for enteral digestion via an oral or tube feeding; and may not be a conventional food, drug, flavoring, or enzyme. MILK, MILK ALTERNATIVES, AND MILK SUBSTITUTIONS: Cow's Milk 2 Must conform to FDA Standard of Identity for whole, reduced-fat, low-fat, or nonfat milks (21 CFR 131.110). Must be pasteurized. Only unflavored milk is permitted. May be fluid, shelf-stable, evaporated (21 CFR 131.130), or dry. e.g., e.g., Goat's Milk Must be pasteurized. Only unflavored milk is permitted. May be fluid, shelf-stable, evaporated, or dry ( i.e., Plant-based Milk Alternatives Must contain ≤10 g of added sugars per cup and be fortified to meet the following nutrient levels (amounts are provided per cup): 276 mg calcium, 8 g protein, 500 IU vitamin A, 100 IU (2.5 µg) vitamin D, 24 mg magnesium, 222 mg phosphorus, 349 mg potassium, 0.44 mg riboflavin, and 1.1 mcg vitamin B12, in accordance with FDA-issued fortification guidelines. May be flavored or unflavored. Cheese Domestic cheese made from 100 percent pasteurized milk. Must conform to FDA Standard of Identity (21 CFR part 133); Monterey Jack, Colby, natural Cheddar, Swiss, Brick, Muenster, Provolone, part-skim or whole Mozzarella, pasteurized process American, or blends of any of these cheeses are authorized. Plant-based Cheese Alternatives Must contain a minimum of 250 mg of calcium and 6.5 g of protein per 1.5 ounces. Plant-based curd cheeses are not authorized. Yogurt (cow's milk) Must be pasteurized, conform to FDA Standard of Identity (21 CFR 131.200) and contain ≤16 grams of added sugar and a minimum of 106 IU (2.67 micrograms) of vitamin D per 8 ounces. May be plain or flavored. Yogurts that are fortified with vitamin A and other nutrients may be allowed at the State agency's option. Yogurts sold with accompanying mix-in ingredients such as granola, candy pieces, honey, nuts, and similar ingredients are not authorized. Drinkable yogurts are not authorized. Plant-based Yogurt Alternatives Must contain ≤16 g of added sugars and a minimum of 250 mg of calcium, 6.5 g of protein, and 106 IU (2.67 micrograms) of vitamin D per 8 ounces. May be plain or flavored. Tofu Must contain a minimum of 100 mg of calcium per 100 g of tofu. May not contain added fats, sugars, oils, or sodium. JUICE Must be pasteurized 100 percent unsweetened fruit juice. Must contain at least 30 mg of vitamin C per 100 mL of juice. Must conform to FDA Standard of Identity as appropriate (21 CFR part 146) or vegetable juice must conform to FDA Standard of Identity as appropriate (21 CFR part 156). Except for 100 percent citrus juices, State agencies must verify the vitamin C content of all State-approved juices. Juices that are fortified with other nutrients may be allowed at the State agency's option. Juice may be fresh, from concentrate, frozen, canned, or shelf stable. Blends of authorized juices are allowed. EGGS Fresh shell domestic hens' eggs or dried eggs mix (must conform to FDA Standard of Identity in 21 CFR 160.105) or pasteurized liquid whole eggs (must conform to FDA Standard of Identity in 21 CFR 160.115). BREAKFAST CEREAL (READY-TO-EAT AND INSTANT AND REGULAR HOT CEREALS) Must contain a minimum of 28 mg iron per 100 g dry cereal. FRUITS AND VEGETABLES (FRESH AND PROCESSED) 3 4 5 6 7 Any variety of fresh (as defined by 21 CFR 101.95) whole or cut fruit without added sugars. i.e., i.e., i.e., 4 WHOLE WHEAT BREAD, WHOLE GRAIN BREAD, AND WHOLE GRAIN OPTIONS: Bread Whole wheat bread Whole grain bread 8 Whole Grain Options Brown rice, wild rice, quinoa, bulgur (cracked wheat), oats, whole-grain barley, millet, triticale, amaranth, cornmeal (including blue), corn masa flour, whole wheat macaroni (pasta) products, whole wheat bread products ( i.e., i.e., i.e., e.g., i.e., i.e., e.g., FISH (CANNED) 4 Light tuna (must conform to FDA Standard of Identity (21 CFR 161.190)); Scomber scombrus, Scomber japonicas 9 e.g., MATURE LEGUMES, PEANUT BUTTER, AND PEANUT BUTTER SUBSTITUTIONS: Mature Legumes (dry beans and peas) 10 Any type of mature dry beans, peas, or lentils in dry-packaged and canned 4 11 11 Peanut Butter Peanut butter and reduced-fat peanut butter must conform to FDA Standard of Identity (21 CFR 164.150); creamy or chunky, regular, or reduced-fat, salted or unsalted forms are allowed. Peanut butters with added marshmallows, honey, jelly, chocolate, or similar ingredients are not authorized. Nut and Seed Butters Must provide comparable nutritive value to peanut butter ( i.e., INFANT FOODS: Infant Cereal Infant cereal must contain a minimum of 45 mg of iron per 100 g of dry cereal. 12 Infant Fruits Any variety of single ingredient commercial infant food fruit without added sugars, starches, or salt ( i.e., 13 Infant Vegetables Any variety of single ingredient commercial infant food vegetables without added sugars, starches, or salt ( i.e., 14 Infant Meat Any variety of commercial infant food meat or poultry as a single major ingredient, with added broth or gravy. Added sugars or salt ( i.e., 15 Note: 1 e.g., e.g., 2 3 4 e.g., 5 e.g., 6 7 8 i.e., 9 10 11 e.g., 12 13 e.g., e.g., e.g., 14 e.g., e.g., 15 e.g., e.g., (f) USDA purchase of commodity foods. (2) The State agency must: (i) Distribute the commodity foods to its local agencies or participants; and (ii) Ensure satisfactory storage facilities and conditions for the commodity foods, including documentation of proper insurance. (g) Infant formula manufacturer registration. et seq. (h) Rounding up. (1) Infant formula. e.g., (i) For State agencies that use rounding up of infant formula, the FNB is determined over the timeframe (the number of months) that the participant receives the food package. In any given month of the timeframe, the monthly issuance of reconstituted fluid ounces of infant formula may exceed the maximum monthly allowance or fall below the FNB; however, the cumulative average over the timeframe may not fall below the FNB without individual tailoring to allow “up to” amounts to support breastfeeding. In addition, the State agency must: (A) Use the methodology described in paragraph (h)(1)(ii) of this section for calculating and dispersing the rounding up option; (B) Issue infant formula in whole containers that are all the same size; and (C) Disperse the number of whole containers as evenly as possible over the timeframe with the largest monthly issuances given in the beginning of the timeframe. (ii) The methodology to calculate rounding up and dispersing infant formula to the next whole container over the food package timeframe is as follows: (A) Multiply the FNB amount for the appropriate food package and feeding option (e.g., Food Package IA fully formula fed, IA-FF (see paragraph (e)(1) of this section)) by the timeframe the participant will receive the food package to determine the total amount of infant formula to be provided. (B) Divide the total amount of infant formula to be provided by the yield of the container (in reconstituted fluid ounces) issued by the State agency to determine the total number of containers to be issued during the timeframe that the food package is prescribed. (C) If the number of containers to be issued does not result in a whole number of containers, the State agency must round up to the next whole container in order to issue whole containers. (2) Infant foods. (ii) State agencies that use the rounding up option for infant foods must: (A) Use the methodology described in paragraph (h)(2)(iii) of this section for calculating and dispersing the rounding up option; (B) Issue infant foods in whole containers; and (C) Disperse the number of whole containers as evenly as possible over the timeframe (the number of months the participant will receive the food package). (iii) The methodology to round up and disperse infant food is as follows: (A) Multiply the maximum monthly allowance for the infant food by the timeframe the participant will receive the food package to determine the total amount of food to be provided. (B) Divide the total amount of food provided by the container size issued by the State agency ( e.g., (C) If the number of containers to be issued does not result in a whole number of containers, the State agency must round up to the next whole container in order to issue whole containers. (i) Plans for cultural substitutions. (2) FNS will evaluate a State agency's plan for substitution of foods for different cultural eating patterns based on the following criteria: (i) Any proposed substitute food must be nutritionally equivalent or superior to the food it is intended to replace. (ii) The proposed substitute food must be widely available to participants in the areas where the substitute is intended to be used. (iii) The cost of the substitute food must be assessed and comparable to the cost of the food it is intended to replace. (3) FNS will make a determination on the proposed plan based on the evaluation criteria specified in paragraph (i)(2) of this section, as appropriate. The State agency shall substitute foods only after receiving the written approval of FNS. [89 FR 28518, Apr. 18, 2024, as amended at 91 FR 37781, June 24, 2026] § 246.11 Nutrition education. (a) General. (2) The State agency shall ensure that nutrition education, including breastfeeding promotion and support, as appropriate, is made available to all participants. Nutrition education may be provided through the local agencies directly, or through arrangements made with other agencies. At the time of certification, the local agency shall stress the positive, long-term benefits of nutrition education and encourage the participant to attend and participate in nutrition education activities. However, individual participants shall not be denied supplemental foods for failure to attend or participate in nutrition education activities. (3) As an integral part of nutrition education, the State agency shall ensure that local agencies provide drug and other harmful substance abuse information to all pregnant, postpartum, and breastfeeding women and to parents or caretakers of infants and children participating in the program. Drug and other harmful substance abuse information may also be provided to pregnant, postpartum, and breastfeeding women and to parents or caretakers of infants and children participating in local agency services other than the Program. (b) Goals. (1) Emphasize the relationship between nutrition, physical activity and health with special emphasis on the nutritional needs of pregnant, postpartum, and breastfeeding women, infants and children under five years of age, and raise awareness about the dangers of using drugs and other harmful substances during pregnancy and while breastfeeding. (2) Assist the individual who is at nutritional risk in improving health status and achieving a positive change in dietary and physical activity habits, and in the prevention of nutrition-related problems through optimal use of the supplemental foods and other nutritious foods. This is to be taught in the context of the ethnic, cultural and geographic preferences of the participants and with consideration for educational and environmental limitations experienced by the participants. (c) State agency responsibilities. (1) Develop and coordinate the nutrition education component of Program operations with consideration of local agency plans, needs and available nutrition education resources. (2) Provide in-service training and technical assistance for professional and para-professional personnel involved in providing nutrition education to participants at local agencies. The State agency shall also provide training on the promotion and management of breastfeeding to staff at local agencies who will provide information and assistance on this subject to participants. (3) Identify or develop resources and educational materials for use in local agencies, including breastfeeding promotion and instruction materials, taking reasonable steps to include materials in languages other than English in areas where a significant number or proportion of the population needs the information in a language other than English, considering the size and concentration of such population and, where possible, the reading level of participants. (4) Develop and implement procedures to ensure that nutrition education is offered to all adult participants and to parents and guardians of infant or child participants, as well as child participants, whenever possible. (5) Monitor local agency activities to ensure compliance with provisions set forth in paragraphs (c)(7), (d), and (e) of this section. (6) Establish standards for participant contacts that ensure adequate nutrition education in accordance with paragraph (e) of this section. (7) Establish standards for breastfeeding promotion and support which include, at a minimum, the following: (i) A policy that creates a positive clinic environment which endorses breastfeeding as the preferred method of infant feeding; (ii) A requirement that each local agency designate a staff person to coordinate breastfeeding promotion and support activities; (iii) A requirement that each local agency incorporate task-appropriate breastfeeding promotion and support training into orientation programs for new staff involved in direct contact with WIC clients; and (iv) A plan to ensure that women have access to breastfeeding promotion and support activities during the prenatal and postpartum periods. (8) Determine if local agencies or clinics can share nutrition educational materials with institutions participating in the Child and Adult Care Food Program established under section 17 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766) at no cost to that program, if a written materials sharing agreement exists between the relevant agencies. (d) Local agency responsibilities. (1) Make nutrition education, including breastfeeding promotion and support, available or enter into an agreement with another agency to make nutrition education available to all adult participants, and to parents or caretakers of infant and child participants, and whenever possible and appropriate, to child participants. Nutrition education may be provided through the use of individual or group sessions. Educational materials designed for Program participants may be utilized to provide education to pregnant, postpartum, and breastfeeding women and to parents or caretakers of infants and children participating in local agency services other than the program. (2) Develop an annual local agency nutrition education plan, including breastfeeding promotion and support, consistent with the State agency's nutrition education component of Program operations and in accordance with this part and FNS guidelines. The local agency shall submit its nutrition education plan to the State agency by a date specified by the State agency. (e) Participant contacts. (2) During each six-month certification period, at least two nutrition contacts shall be made available to all adult participants and the parents or caretakers of infant and child participants, and wherever possible, the child participants themselves. (3) Nutrition education contacts shall be made available at a quarterly rate to parents or caretakers of infant and child participants certified for a period in excess of six months. Nutrition education contacts shall be scheduled on a periodic basis by the local agency, but such contacts do not necessarily need to take place in each quarter of the certification period. (4) The local agency shall document in each participant's certification file that nutrition education has been given to the participant in accordance with State agency standards, except that the second or any subsequent nutrition education contact during a certification period that is provided to a participant in a group setting may be documented in a masterfile. Should a participant miss a nutrition education appointment, the local agency shall, for purposes of monitoring and further education efforts, document this fact in the participant's file, or, at the local agency's discretion, in the case of a second or subsequent missed contact where the nutrition education was offered in a group setting, document this fact in a master file. (5) An individual care plan shall be provided for a participant based on the need for such plan as determined by the competent professional authority, except that any participant, parent, or caretaker shall receive such plan upon request. (6) Contacts shall be designed to meet different cultural and language needs of Program participants. [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 58 FR 11507, Feb. 26, 1993; 59 FR 11503, Mar. 11, 1994; 65 FR 53528, Sept. 5, 2000; 71 FR 56731, Sept. 27, 2006; 73 FR 11312, Mar. 3, 2008; 76 FR 59889, Sept. 28, 2011; 89 FR 28528, Apr. 18, 2024] Subpart E—State Agency Provisions § 246.12 Food delivery methods. (a) General. (1) Management. (2) Design. (3) FNS oversight. (4) 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415. (b) Uniform food delivery systems. (c) No charge for authorized supplemental foods. (d) Compatibility of food delivery system. (e) Retail food delivery systems: General. (f) Retail food delivery systems: Food instrument and cash-value voucher requirements General. (2) Printed food instruments and cash-value vouchers. (i) Authorized supplemental foods. (ii) First date of use. (iii) Last date of use. (iv) Redemption period. (v) Serial number. (vi) Purchase price. (vii) Signature space. (3) Vendor identification. (4) Split tender transactions. (g) Retail food delivery systems: Vendor authorization General. (2) Vendor limiting criteria. (3) Vendor selection criteria. (i) Minimum variety and quantity of supplemental foods. (ii) Business integrity. (iii) Current SNAP disqualification or civil money penalty for hardship. (iv) Provision of incentive items. (A) The State agency may approve any of the following incentive items to be provided by above-50-percent vendors to customers, at the discretion of the State agency: ( 1 ( 2 ( 3 ( 4 (B) The following incentive items are prohibited for above-50-percent vendors to provide to customers: ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 (C) For-profit goods or services offered by the above-50-percent vendor to WIC participants at a fair market value based on comparable for-profit goods or services of other businesses are not incentive items subject to approval or prohibition, except that such goods or services must not constitute a conflict of interest or result in a liability for the WIC Program. (4) Vendor selection criteria: competitive price. (i) Vendors that meet the above-50-percent criterion. (A) Must distinguish these vendors from other authorized vendors in its peer group system or its alternative cost containment system approved by FNS by establishing separate peer groups for above-50-percent vendors or by placing above-50-percent vendors in peer groups with other vendors and establishing distinct competitive price selection criteria and allowable reimbursement levels for the above-50-percent vendors; (B) Must reassess the status of new vendors within six months after authorization to determine whether or not the vendors are above-50-percent vendors, and must take necessary follow-up action, such as terminating vendor agreements or reassigning vendors to the appropriate peer group; (C) Must compare above-50-percent vendors' prices against the prices of vendors that do not meet the above-50-percent criterion in determining whether the above-50-percent vendors have competitive prices and in establishing allowable reimbursement levels for such vendors; and (D) Must ensure that the prices of above-50-percent vendors do not inflate the competitive price criteria and allowable reimbursement levels for the peer groups or result in higher total food costs if program participants transact their food instruments at above-50-percent vendors rather than at other vendors that do not meet the above-50-percent criterion. To comply with this requirement, the State agency must compare the average cost of each type of food instrument redeemed by above-50-percent vendors against the average cost of the same type of food instrument redeemed by regular vendors. The average cost per food instrument may be weighted to reflect the relative proportion of food instruments redeemed by each category of vendors in the peer group system. The State agency must compute statewide average costs per food instrument at least quarterly to monitor compliance with this requirement. If average payments per food instrument for above-50-percent vendors exceed average payments per food instrument to regular vendors, then the State agency must take necessary action to ensure compliance, such as adjusting payment levels. Where EBT systems are in use, it may be more appropriate to compare prices of individual WIC food items to ensure that average payments to above-50-percent vendors do not exceed average payments for the same food item to comparable vendors. If FNS determines that a State agency has failed to ensure that above-50-percent vendors do not result in higher costs to the program than if participants transact their food instruments at regular vendors, FNS will establish a claim against the State agency to recover excess food funds expended and will require remedial action. A State agency may exclude partially-redeemed food instruments from a quarterly cost neutrality assessment based on an empirical methodology approved by FNS. A State agency may not exclude food instruments from the quarterly cost neutrality assessment based on a rate of partially-redeemed food instruments. (E) Must determine whether vendor applicants are expected to be above-50-percent vendors. The State agency must ask vendor applicants whether they expect to derive more than 50 percent of their annual revenue from the sale of food items from transactions involving WIC food instruments. This question applies whether or not the State agency chooses to authorize above-50-percent vendors. A vendor who answers in the affirmative must be treated as an above-50-percent vendor. The State agency must further assess a vendor who answers in the negative, by first calculating WIC redemptions as a percent of total food sales in existing WIC-authorized stores owned by the vendor applicant. Second, the State agency must calculate or request from the vendor applicant the percentage of anticipated food sales by type of payment, i.e. (F) Must determine whether a currently authorized vendor meets the above-50-percent criterion, based on the State agency's calculation of WIC redemptions as a percent of the vendor's total foods sales for the same period. If WIC redemptions are more than 50 percent of the total food sales, the vendor must be deemed to be an above-50-percent vendor. As an initial step in identifying above-50-percent vendors, the State agency may compare each vendor's WIC redemptions to Supplemental Nutrition Assistance Program redemptions for the same period. If more than one WIC State agency authorizes a particular vendor, then each State agency must obtain and add the WIC redemptions for each State agency that authorizes the vendor to derive the total WIC redemptions. If Supplemental Nutrition Assistance Program redemptions exceed WIC redemptions, no further assessment is required since the vendor would not be an above-50-percent vendor. For vendors whose WIC redemptions exceed their Supplemental Nutrition Assistance Program redemptions, or if this comparison of redemptions was not made, the State agency must obtain from these vendors a statement of the total amount of revenue derived from the sale of foods that could be purchased using Supplemental Nutrition Assistance Program benefits. The State agency must also obtain from these vendors documentation (such as tax documents or other verifiable documentation) to support the amount of food sales claimed by the vendor. After evaluating the documentation received from the vendor, the State agency must calculate WIC redemptions as a percent of total food sales and classify the vendor as meeting or not meeting the above-50- percent criterion. State agencies may use additional methods, if approved by FNS. (ii) Implementing effective peer groups. (A) At least two criteria for establishing peer groups, one of which must be a measure of geography, such as metropolitan or other statistical areas that form distinct labor and products markets, unless the State agency receives FNS approval to use a single criterion; (B) Routine collection of vendor shelf prices at least every six months following authorization to monitor vendor compliance with paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii) of this section and to ensure State agency policies and procedures dependent on shelf price data are efficient and effective. FNS may grant an exemption from this shelf price collection requirement if the State agency demonstrates to FNSs' satisfaction that an alternative methodology for monitoring vendor compliance with paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii) of this section is efficient and effective and other State agency policies and procedures are not dependent on frequent collection of shelf price data. Such exemption would remain in effect until the State agency no longer meets the conditions on which the exemption was based, until FNS revokes the exemption, or for three years, whichever occurs first; (C) Assessment of the effectiveness of the peer groupings and competitive price criteria at least every three years and modification, as necessary, to enhance system performance. The State agency may change a vendor's peer group whenever the State agency determines that placement in an alternate peer group is warranted. (iii) Subsequent price increases. (iv) Exceptions to competitive price criteria. (v) Exemptions from the vendor peer group system requirement. (A) The State agency chooses not to authorize any vendors that derive more than 50 percent of their revenue from food sales from WIC food instruments, and the State agency demonstrates to FNS that establishing a vendor peer group system would be inconsistent with efficient and effective operation of the program, or that its alternative cost containment system would be as effective as a peer group system; or (B) The State agency determines that food instruments redeemed by vendors that meet the above-50-percent criterion comprise less than five percent of the total WIC redemptions in the State in the fiscal year prior to a fiscal year in which the exemption is effective; and the State agency demonstrates to FNS that its alternative vendor cost containment system would be as effective as a vendor peer group system and would not result in higher costs if program participants redeem food instruments at vendors that meet the above-50-percent criterion rather than at vendors that do not meet this criterion. (vi) Cost containment certification. (vii) Limitation on private rights of action. (5) On-site preauthorization visit. (6) Sale of store to circumvent WIC sanction. (7) Impact on small businesses. (8) Application periods. (9) Data collection at authorization. (10) List of infant formula wholesalers, distributors, and retailers licensed under State law or regulations, and infant formula manufacturers registered with the Food and Drug Administration (FDA). (i) Notification to vendors. Infant formula, Contract brand infant formula Non-contract brand infant formula (ii) Type of license. (iii) Exclusions from list. (A) Specifically required or authorized by State law or regulations; or (B) The entity does not carry infant formula. (h) Retail food delivery systems: Vendor agreements General Entering into agreements. (ii) Delegation to local agencies. (2) Standard vendor agreement. (3) Vendor agreement provisions. (i) Acceptance of food instruments and cash value vouchers. (ii) No substitutions, cash, credit, refunds, or exchanges. (A) The vendor may not provide unauthorized food items, nonfood items, cash, or credit (including rain checks) in exchange for food instruments or cash-value vouchers. The vendor may not provide refunds or permit exchanges for authorized supplemental foods obtained with food instruments or cash-value vouchers, except for exchanges of an identical authorized supplemental food item when the original authorized supplemental food item is defective, spoiled, or has exceeded its “sell by,” “best if used by,” or other date limiting the sale or use of the food item. An identical authorized supplemental food item means the exact brand and size as the original authorized supplemental food item obtained and returned by the participant. (B) The vendor may provide only the authorized infant formula which the vendor has obtained from sources included on the list described in paragraph (g)(11) of this section to participants in exchange for food instruments specifying infant formula. (iii) Treatment of participants, parents/caretakers, and proxies. (iv) Time periods for transacting food instruments and cash-value vouchers. (v) Purchase price on food instruments and cash-value vouchers. (vi) Signature on food instruments and cash-value vouchers. (vii) Sales tax prohibition. (viii) Food instrument and cash-value voucher redemption. (ix) Vendor claims. (x) No charge for authorized supplemental foods or restitution from participants. (xi) Split tender for cash-value vouchers. (xii) Training. (xiii) Vendor training of staff. (xiv) Accountability for owners, officers, managers, and employees. (xv) Monitoring. (xvi) Recordkeeping. (xvii) Termination. (xviii) Change in ownership or location or cessation of operations. (xix) Sanctions. (xx) Conflict of interest. (xxi) Criminal penalties. (xxii) Not a license/property interest. (xxiii) Compliance with vendor agreement, statutes, regulations, policies, and procedures. (xxiv) Nondiscrimination regulations. (xxv) Compliance with vendor selection criteria. (xxvi) Reciprocal SNAP disqualification for WIC Program disqualifications. (xxvii) EBT minimum lane coverage. (xxviii) EBT third-party processing costs and fees. (xxix) EBT interchange fees. (xxx) EBT ongoing maintenance and operational costs. (xxxi) Compliance with EBT operating rules, standards and technical requirements. (4) Purchase price and redemption procedures. (5) Sanction schedule. (6) Actions subject to administrative review and review procedures. (7) Notification of program changes. (8) Allowable and prohibited incentive items for above-50-percent vendors. (i) The State agency must provide written approval or disapproval (including by electronic means such as electronic mail or facsimile) of requests from above-50-percent vendors for permission to provide allowable incentive items to customers; (ii) The State agency must maintain documentation for the approval process, including invoices or similar documents showing that the cost of each item is either less than the $2 nominal value limit, or obtained at no cost, unless the State agency provides the vendor with a list of pre-approved incentive items at the time of authorization; and (iii) The State agency must define prohibited incentive items. (i) Retail food delivery systems: Vendor training General requirements. (2) Content. (3) Delegation. (4) Documentation. (j) Retail food delivery systems: Monitoring vendors and identifying high-risk vendors General requirements. (2) Routine monitoring. (3) Identifying high-risk vendors. (4) Compliance investigations. High-risk vendors. (ii) Randomly selected vendors. (iii) Prioritization. (5) Monitoring report. (6) Documentation Monitoring visits. (A) the date of the monitoring visit, inventory audit, or compliance buy; (B) the name(s) and signature(s) of the reviewer(s); and (C) the nature of any problem(s) detected. (ii) Compliance buys. (A) the date of the buy; (B) a description of the cashier involved in each transaction; (C) the types and quantities of items purchased, current shelf prices or prices charged other customers, and price charged for each item purchased, if available. Price information may be obtained prior to, during, or subsequent to the compliance buy; and (D) the final disposition of all items as destroyed, donated, provided to other authorities, or kept as evidence. (k) Retail food delivery systems: Vendor claims System to review food instruments and cash-value vouchers for vendor claims. (2) Delaying payment and establishing a claim. (3) Opportunity to justify or correct. (4) Timeframe and offset. (5) Food instruments and cash-value vouchers redeemed after the specified period. (l) Retail food delivery systems: Vendor sanctions Mandatory vendor sanctions Permanent disqualification. (A) Disqualification of the vendor would result in inadequate participant access; or (B) The vendor had, at the time of the violation, an effective policy and program in effect to prevent trafficking; and the ownership of the vendor was not aware of, did not approve of, and was not involved in the conduct of the violation. (ii) Six-year disqualification. (A) One incidence of buying or selling food instruments, or cash-value vouchers, for cash (trafficking); or (B) One incidence of selling firearms, ammunition, explosives, or controlled substances as defined in 21 U.S.C. 802, in exchange for food instruments or cash-value vouchers. (iii) Three-year disqualification. (A) One incidence of the sale of alcohol or alcoholic beverages or tobacco products in exchange for food instruments or cash-value vouchers; (B) A pattern of claiming reimbursement for the sale of an amount of a specific supplemental food item which exceeds the store's documented inventory of that supplemental food item for a specific period of time; (C) A pattern of vendor overcharges; (D) A pattern of receiving, transacting and/or redeeming food instruments or cash-value vouchers outside of authorized channels, including the use of an unauthorized vendor and/or an unauthorized person; (E) A pattern of charging for supplemental food not received by the participant; or (F) A pattern of providing credit or non-food items, other than alcohol, alcoholic beverages, tobacco products, cash, firearms, ammunition, explosives, or controlled substances as defined in 21 U.S.C. 802, in exchange for food instruments or cash-value vouchers. (iv) One-year disqualification. (A) A pattern of providing unauthorized food items in exchange for food instruments or cash-value vouchers, including charging for supplemental foods provided in excess of those listed on the food instrument; or (B) A pattern of an above-50-percent vendor providing prohibited incentive items to customers as set forth in paragraph (g)(3)(iv) of this section, in accordance with the State agency's policies and procedures required by paragraph (h)(8) of this section. (v) Second mandatory sanction. (vi) Third or subsequent mandatory sanction. (vii) Disqualification based on a SNAP disqualification. (viii) Voluntary withdrawal or nonrenewal of agreement. (ix) Participant access determinations. (x) Civil money penalty formula. (A) Determine the vendor's average monthly redemptions for at least the 6-month period ending with the month immediately preceding the month during which the notice of adverse action is dated; (B) Multiply the average monthly redemptions figure by 10 percent (.10); (C) Multiply the product from paragraph (l)(1)(x)(B) of this section by the number of months for which the store would have been disqualified. This is the amount of the civil money penalty, provided that the civil money penalty shall not exceed the maximum amount specified in § 3.91(b)(3)(v) of this title for each violation. For a violation that warrants permanent disqualification, the amount of the civil money penalty shall be the maximum amount specified in § 3.91(b)(3)(v) of this title for each violation. When during the course of a single investigation the State agency determines a vendor has committed multiple violations, the State agency must impose a CMP for each violation. The total amount of civil money penalties imposed for violations investigated as part of a single investigation may not exceed the amount specified in § 3.91(b)(3)(v) of this title as the maximum penalty for violations occurring during a single investigation. (xi) Notification to FNS. (xii) Multiple violations during a single investigation. (2) State agency vendor sanctions. General requirements. (ii) SNAP civil money penalty for hardship. (A) Include notification that it will take such disqualification action in its sanction schedule; and (B) Determine if disqualification of the vendor would result in inadequate participant access in accordance with paragraph (l)(8) of this section. If the State agency determines that disqualification of the vendor would result in inadequate participant access, the State agency may not disqualify the vendor or impose a civil money penalty in lieu of disqualification. The State agency must include documentation of its participant access determination and any supporting documentation in each vendor's file. (iii) A mandatory sanction by another WIC State agency. (A) Include notification that it will take such action in its sanction schedule; and (B) Determine if disqualification of the vendor would result in inadequate participant access in accordance with paragraph (l)(8) of this section. If the State agency determines that disqualification of the vendor would result in inadequate participant access, the State agency must impose a civil money penalty in lieu of disqualification, except that the State agency may not impose a civil money penalty in situations in which the vendor has been assessed a civil money penalty in lieu of disqualification by the other WIC State agency. Any civil money penalty in lieu of disqualification must be calculated in accordance with paragraph (l)(2)(x) of this section. The State agency must include documentation of its participant access determination and any supporting documentation in each vendor's file. (3) Notification of violations. (i) Prior to imposing a sanction for a pattern of violative incidences, the State agency must either provide such notice to the vendor, or document in the vendor file the reason(s) for determining that such notice would compromise an investigation. (ii) The State agency may use the same method of notification which the State agency uses to provide a vendor with adequate advance notice of the time and place of an administrative review in accordance with § 246.18(b)(3). (iii) If notification is provided, the State agency may continue its investigation after the notice of violation is received by the vendor, or presumed to be received by the vendor, consistent with the State agency's procedures for providing such notice. (iv) All of the incidences of a violation occurring during the first compliance buy visit must constitute only one incidence of that violation for the purpose of establishing a pattern of incidences. (v) A single violative incidence may only be used to establish the violations set forth in paragraphs (l)(1)(ii)(A), (l)(1)(ii)(B), and (l)(1)(iii)(A) of this section. (4) Administrative reviews. (5) Installment plans. (6) Failure to pay a civil money penalty. (7) Actions in addition to sanctions. (8) Participant access determination criteria. (9) Termination of agreement. (m) Home food delivery systems. (1) Procurement. (2) Accountability. (i) Home food delivery contractors are paid only after the delivery of authorized supplemental foods to participants; (ii) A routine procedure exists to verify the correct delivery of authorized supplemental foods to participants, and, at a minimum, such verification occurs at least once a month after delivery; and (iii) Records of delivery of supplemental foods and bills sent or payments received for such supplemental foods are retained for at least three years. Federal, State, and local authorities must have access to such records. (n) Direct distribution food delivery systems. (1) Storage and insurance. (2) Inventory. (3) Procurement. (4) Availability. (5) Accountability. (o) Participant parent/caretaker, proxy, vendor, farmer, farmers' market, and home food delivery contractor complaints. (p) Food instrument and cash-value voucher security. (q) Food instrument and cash-value voucher disposition. (r) Issuance of food instruments, cash-value vouchers and authorized supplemental foods. (1) Parents/caretakers and proxies. (2) Signature requirement. (3) Instructions. (4) Food instrument and cash-value voucher pick up. (5) Maximum issuance of food instruments and cash-value voucher. (6) Any authorized vendor. (s) Payment to vendors, farmers and home food delivery contractors. (t) Conflict of interest. (u) Participant violations and sanctions General requirements. (2) Mandatory disqualification. General. (ii) Exceptions to mandatory disqualification. (iii) Terminating a mandatory disqualification. (3) Warnings before sanctions. (4) Fair hearings. (5) Referral to law enforcement authorities. (v) Farmers and farmers' markets. (1) The agreement must include the following provisions, although the State agency may determine the exact wording. The farmer or farmers' market must: (i) Assure that the cash-value voucher is redeemed only for eligible fruits and vegetables as defined by the State agency; (ii) Provide eligible fruits and vegetables at the current price or less than the current price charged to other customers; (iii) Accept the cash-value voucher within the dates of their validity and submit such vouchers for payment within the allowable time period established by the State agency; (iv) Redeem the cash-value voucher in accordance with a procedure established by the State agency. Such procedure must include a requirement for the farmer or farmers' market to allow the participant, authorized representative or proxy to pay the difference when the purchase of fruits and vegetables exceeds the value of the cash-value vouchers (also known as a split tender transaction); (v) Accept training on cash-value voucher procedures and provide training to any employees with cash-value voucher responsibilities on such procedures; (vi) Agree to be monitored for compliance with program requirements, including both overt and covert monitoring; (vii) Be accountable for actions of employees in the provision of authorized foods and related activities; (viii) Pay the State agency for any cash-value vouchers transacted in violation of this agreement; (ix) Offer WIC participants, parent or caretakers of child participants or proxies the same courtesies as other customers; (x) Comply with the nondiscrimination provisions of USDA regulations as provided in § 248.7; and (xi) Notify the State agency if any farmers' market ceases operation prior to the end of the authorization period. (2) The farmer or farmers' market must not: (i) Collect sales tax on cash-value voucher purchases; (ii) Seek restitution from WIC participants, parent or caretakers of child participants or proxies for cash-value vouchers not paid or partially paid by the State agency; (iii) Issue cash change for purchases that are in an amount less than the value of the cash-value voucher; (3) Neither the State agency nor the farmer or farmers' market has an obligation to renew the agreement. The State agency, the farmer, or farmers' market may terminate the agreement for cause after providing advance written notification. (4) Farmer agreements for State agencies that do not authorize farmers. (5) The State agency may deny payment to the farmer or farmers' market for improperly redeemed cash-value vouchers and may demand refunds for payments already made on improperly redeemed vouchers. (6) The State agency may disqualify a farmer or farmers' market for WIC Program abuse. The farmer or farmers' market has the right to appeal a denial of an application to participate, a disqualification, or a program sanction by the State agency. Expiration of an agreement with a farmer or farmers' market and claims actions under § 246.23, are not appealable. (7) A farmer or farmers' market which commits fraud or engages in other illegal activity is liable to prosecution under applicable Federal, State or local laws. (8) Monitoring farmers and farmers' markets. (ii) Compliance buys. (A) The date of the buy; (B) A description of the farmer (and farmers' market, as appropriate) involved in each transaction; (C) The types and quantities of items purchased, current retail prices or prices charged other customers, and price charged for each item purchased, if available. Price information may be obtained prior to, during, or subsequent to the compliance buy; and (D) The final disposition of all items as destroyed, donated, provided to other authorities, or kept as evidence. (w) EBT General. (2) EBT exemptions. (i) There are unusual technological barriers to implementation; (ii) Operational costs are not affordable within the nutrition services and administration grant of the State agency; or (iii) It is in the best interest of the program to grant the exemption. (3) Implementation date. (x) Electronic benefit requirements General. (2) Electronic benefits. (i) Authorized supplemental foods. (ii) First date of use. (iii) Last date of use. (iv) Benefit issuance identifier. (3) Vendor identification. (y) EBT management and reporting. (2) If a State agency plans to incorporate additional programs in the EBT system of the State, the State agency shall consult with State agency officials responsible for administering the programs prior to submitting the Planning APD (PAPD) document and include the outcome of those discussions in the PAPD submission to the Department for approval. (3) Each State agency shall have an active EBT project by August 1, 2016. Active EBT project is defined as a formal process of planning, implementation, or statewide implementation of WIC EBT. (4) Annually as part of the State plan, the State agency shall submit EBT project status reports. At a minimum, the annual status report shall contain: (i) Until operating EBT statewide, an outline of the EBT implementation goals and objectives as part of the goals and objectives in § 246.4(a)(1), to demonstrate the State agency's progress toward statewide EBT implementation; (ii) If operating EBT statewide, any information on future EBT changes and procurement updates affecting present operations; and (iii) Such other information the Secretary may require. (5) The State agency shall be responsible for EBT coordination and management. (z) EBT food delivery methods: Vendor requirements General. (2) Minimum lane coverage. (i) Superstores and supermarkets. (ii) All other vendors. (iii) The State agency shall determine the number of appropriate POS terminals for authorized farmers and farmers' markets; (iv) For newly authorized WIC vendors deemed necessary for participant access by the State agency, the vendor shall be provided one POS terminal unless the State agency determines other factors in this location warrant additional terminals; (v) Any authorized vendor who has been equipped with a POS terminal by the State agency may submit evidence additional terminals are necessary after the initial POS terminals are installed; (vi) The State agency may provide authorized vendors with additional POS terminals above the minimum number required by this paragraph in order to permit WIC participants to obtain a shopping list or benefit balance, as long as the number of terminals provided does not exceed the number of lanes in the vendor location; (vii) The State agency may remove excess POS terminals if actual redemption activity warrants a reduction consistent with the redemption levels outlined in paragraphs (z)(2)(i) through (ii) of this section. (3) Payment to vendors, farmers and farmers' markets. (aa) Imposition of costs on vendors, farmers and farmers' markets Cost prohibition. (2) Cost sharing. (3) Fees Third-party processor costs and fees. (ii) Interchange fees. (4) Statewide operations. (i) Pay ongoing maintenance, processing fees or operational costs for any vendor, farmer or farmers' market utilizing multi-function systems and equipment, unless the State agency determines that the vendor is necessary for participant access. The State agency shall continue to pay ongoing maintenance, processing fees and operational costs of single-function equipment; (ii) Authorize a vendor, farmer, or farmers' market that cannot successfully demonstrate EBT capability in accordance with State agency requirements, unless the State agency determines the vendor is necessary for participant access. (bb) EBT Technical standards and requirements. (i) Operating rules, standards and technical requirements as established by the Secretary; and (ii) Other industry standards identified by the Secretary. (2) The State agency shall establish policy permitting the replacement of EBT cards and the transfer of participant benefit balances within no more than seven business days following notice by the participant or proxy to the State agency. (3) The State agency shall establish procedures to provide customer service during non-business hours that enable participants or proxies to report a lost, stolen, or damaged card, report other card or benefit issues, receive information on the EBT food balance and receive the current benefit end date. The State agency shall respond to any report of a lost, stolen, or damaged card within one business day of the date of report. If a State agency seeks to implement alternatives to the minimum service requirements, the agency must submit the plan to FNS for approval. (cc) National universal product codes (UPC) database. [65 FR 83278, Dec. 29, 2000, as amended at 70 FR 29579, May 24, 2005; 70 FR 71722, Nov. 29, 2005; 71 FR 56731, Sept. 27, 2006; 73 FR 68995, Dec. 6, 2007; 73 FR 11312, Mar. 3, 2008; 74 FR 555, Jan. 6, 2009; 74 FR 51758, Oct. 8, 2009; 75 FR 15603, Mar. 30, 2010; 76 FR 59889, Sept. 28, 2011; 79 FR 12299, Mar. 4, 2014; 81 FR 10449, Mar. 1, 2016; 81 FR 18447, Mar. 31, 2016; 81 FR 66494, Sept. 28, 2016; 89 FR 28528, Apr. 18, 2024] § 246.13 Financial management system. (a) Disclosure of expenditures. (b) Internal control. (c) Record of expenditures. (d) Payment of costs. (e) Identification of obligated funds. (f) Resolution of audit findings. (g) Use of minority- and women-owned banks. (h) Adjustment of expenditures. (i) Transfer of cash. (j) Local agency financial management. [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 65 FR 83286, Dec. 29, 2000; 81 FR 66494, Sept. 28, 2016] § 246.14 Program costs. (a) General. (i) Direct costs. (ii) Indirect costs. (2) Program funds may not be used to pay for retroactive benefits. Except as provided in paragraph (e) of this section and §§ 246.16(g) and 246.16(h) of this part, funds allocated by FNS for food purchases may not be used to pay nutrition services and administration costs. However, nutrition services and administration funds may be used to pay for food costs. (b) What costs may I charge to the food grant? (i) Acquiring supplemental foods provided to State or local agencies or participants, whichever receives the supplemental food first; (ii) Warehousing supplemental foods; and (iii) Purchasing and renting breast pumps. (2) For costs to be allowable, the State agency must ensure that food costs do not exceed the customary sales price charged by the vendor, home food delivery contractor, or supplier in a direct distribution food delivery system. In addition, food costs may not exceed the price limitations applicable to the vendor. (c) Specified allowable nutrition services and administration costs. (1) The cost of nutrition education and breastfeeding promotion and support which meets the requirements of § 246.11. During each fiscal year, each State agency shall expend, for nutrition education activities and breastfeeding promotion and support activities, an aggregate amount that is not less than the sum of one-sixth of the amount expended by the State agency for costs of NSA and an amount equal to its proportionate share of the national minimum expenditure for breastfeeding promotion and support activities. The amount to be spent on nutrition education shall be computed by taking one-sixth of the total fiscal year NSA expenditures. The amount to be spent by a State agency on breastfeeding promotion and support activities shall be an amount that is equal to at least its proportionate share of the national minimum breastfeeding promotion expenditure as specified in paragraph (c)(1) of this section. The national minimum expenditure for breastfeeding promotion and support activities shall be equal to $21 multiplied by the number of pregnant and breastfeeding women in the Program, based on the average of the last three months for which the Department has final data. On October 1, 1996 and each October 1 thereafter, the $21 will be adjusted annually using the same inflation percentage used to determine the national administrative grant per person. If the State agency's total reported nutrition education and breastfeeding promotion and support expenditures are less than the required amount of expenditures, FNS will issue a claim for the difference. The State agency may request prior written permission from FNS to spend less than the required portions of its NSA grant for either nutrition education or for breastfeeding promotion and support activities. FNS will grant such permission if the State agency has sufficiently documented that other resources, including in-kind resources, will be used to conduct these activities at a level commensurate with the requirements of this paragraph (c)(1). However, food costs used to purchase or rent breast pumps may not be used for this purpose. Nutrition education, including breastfeeding promotion and support, costs are limited to activities which are distinct and separate efforts to help participants understand the importance of nutrition to health. The cost of dietary assessments for the purpose of certification, the cost of prescribing and issuing supplemental foods, the cost of screening for drug and other harmful substance use and making referrals to drug and other harmful substance abuse services, and the cost of other health-related screening shall not be applied to the expenditure requirement for nutrition education and breastfeeding promotion and support activities. The Department shall advise State agencies regarding methods for minimizing documentation of the nutrition education and breastfeeding promotion and support expenditure requirement. Costs to be applied to the one-sixth minimum amount required to be spent on nutrition education and the target share of funds required to be spent on breastfeeding promotion and support include, but need not be limited to— (i) Salary and other costs for time spent on nutrition education and breastfeeding promotion and support consultations whether with an individual or group; (ii) The cost of procuring and producing nutrition education and breastfeeding promotion and support materials including handouts, flip charts, filmstrips, projectors, food models or other teaching aids, and the cost of mailing nutrition education or breastfeeding promotion and support materials to participants; (iii) The cost of training nutrition or breastfeeding promotion and support educators, including costs related to conducting training sessions and purchasing and producing training materials; (iv) The cost of conducting evaluations of nutrition education or breastfeeding promotion and support activities, including evaluations conducted by contractors; (v) Salary and other costs incurred in developing the nutrition education and breastfeeding promotion and support portion of the State Plan and local agency nutrition education and breastfeeding promotion and support plans; and (vi) The cost of monitoring nutrition education and breastfeeding promotion and support activities. (2) The cost of Program certification, nutrition assessment and procedures and equipment used to determine nutritional risk, including the following: (i) Laboratory fees incurred for up to two hematological tests for anemia per individual per certification period. The first test shall be to determine anemia status. The second test may be performed only in follow up to a finding of anemia when deemed necessary for health monitoring as determined by the WIC State agency; (ii) Expendable medical supplies; (iii) Medical equipment used for taking anthropometric measurements, such as scales, measuring boards, and skin fold calipers; and for blood analysis to detect anemia, such as spectrophotometers, hematofluorometers and centrifuges; and (iv) Salary and other costs for time spent on nutrition assessment and certification. (3) The cost of outreach services. (4) The cost of administering the food delivery system, including the cost of transporting food. (5) The cost of translators for materials and interpreters. (6) The cost of fair hearings, including the cost of an independent medical assessment of the appellant, if necessary. (7) The cost of transporting participants to clinics when prior approval for using Program funds to provide transportation has been granted by the State agency and documentation that such service is considered essential to assure Program access has been filed at the State agency. Direct reimbursement to participants for transportation cost is not an allowable cost. (8) The cost of monitoring and reviewing Program operations. (9) The cost, exclusive of laboratory tests, of screening for drug and other harmful substance use and making referrals for counseling and treatment services. (10) The cost of breastfeeding aids which directly support the initiation and continuation of breastfeeding. (d) Costs allowable with approval. (e) Use of funds recovered from vendors, participants, or local agencies. (2) These recovered funds may be used in the fiscal year: (i) In which the initial obligation was made; (ii) In which the claim arose; (iii) In which the funds are collected; or (iv) after the funds are collected. (3) The State agency may not credit any recoveries until: (i) In the case of a vendor claim, the vendor has had the opportunity to correct or justify the error or apparent overcharge in accordance with § 246.12(k)(3); (ii) In the case of a participant, any administrative hearing requested in accordance with § 246.9 has been completed; or (iii) In the case of a local agency claim, any administrative review requested in accordance with the local agency agreement has been completed. (4) The State agency must report vendor, participant, and local agency recoveries to FNS through the normal reporting process; (5) The State agency must keep documentation supporting the amount and use of these vendor, participant, and local agency recoveries. (f) Use of funds received as rebates from manufacturers. [50 FR 6121, Feb. 13, 1987, as amended at 52 FR 21237, June 4, 1987; 53 FR 25314, July 6, 1988; 54 FR 18091, Apr. 27, 1989; 58 FR 11507, Feb. 26, 1993; 59 FR 11503, Mar. 11, 1994; 63 FR 63974, Nov. 18, 1998; 64 FR 67999, Dec. 6, 1999; 64 FR 70178, Dec. 16, 1999; 65 FR 83286, Dec. 29, 2000; 71 FR 56731, Sept. 27, 2006; 73 FR 11312, Mar. 3, 2008; 76 FR 59889, Sept. 28, 2011; 81 FR 66494, Sept. 28, 2016] § 246.15 Program income other than grants. (a) Interest earned on advances. provided (b) Other Program income. [50 FR 6121, Feb. 13, 1985, as amended at 63 FR 63974, Nov. 18, 1998; 64 FR 13324, Mar. 18, 1999; 71 FR 56731, Sept. 27, 2006; 81 FR 66494, Sept. 28, 2016] § 246.16 Distribution of funds. (a) General. (1) Authorized appropriations to carry out the provisions of this section may be made not more than 1 year in advance of the beginning of the fiscal year in which the funds shall become available for disbursement to the State agencies. The funds shall remain available for the purposes for which appropriated until expended. (2) In the case of appropriations legislation providing funds through the end of a fiscal year, the Secretary shall issue to State agencies an initial allocation of funds provided under such legislation not later than the expiration of the 15-day period beginning on the date of the enactment and subsequent allocation of funds shall be issued not later than the beginning of each of the second, third and fourth quarters of the fiscal year. (3) Allocations of funds pursuant to paragraph (a)(2) of this section shall be made as follows: The initial allocation of funds to State agencies shall include not less than 1/3 1/4 (4) In the case of legislation providing funds for a period that ends prior to the end of a fiscal year, the Secretary shall issue to State agencies an initial allocation of funds not later than the expiration of the 10-day period beginning on the date of enactment. In the case of legislation providing appropriations for a period of not more than 4 months, all funds must be allocated to State agencies except those reserved by the Secretary to carry out paragraph (a)(6) of this section. (5) In any fiscal year unused amounts from a prior fiscal year that are identified by the end of the first quarter of the fiscal year shall be recovered and reallocated not later than the beginning of the second quarter of the fiscal year. Unused amounts from a prior fiscal year that are identified after the end of the first quarter of the fiscal year shall be recovered and reallocated on a timely basis. (6) Up to one-half of one percent of the sums appropriated for each fiscal year, not to exceed $5,000,000, shall be available to the Secretary for the purpose of evaluating Program performance, evaluating health benefits, providing technical assistance to improve State agency administrative systems, preparing reports on program participant characteristics, and administering pilot projects, including projects designed to meet the special needs of migrants, Indians, rural populations, and to carry out technical assistance and research evaluation projects for the WIC Farmers' Market Nutrition Program. (b) Distribution and application of grant funds to State agencies. (1) The State agency shall ensure that all Program funds are used only for Program purposes. As a prerequisite to the receipt of funds, the State agency shall have executed an agreement with the Department and shall have received approval of its State Plan. (2) Notwithstanding any other provision of law, all funds not made available to the Secretary in accordance with paragraph (a)(6) of this section shall be distributed to State agencies on the basis of funding formulas which allocate funds to all State agencies for food costs and NSA costs incurred during the fiscal year for which the funds had been made available to the Department. Final State agency grant levels as determined by the funding formula and State agency breastfeeding promotion and support expenditure targets will be issued in a timely manner. (3) When may I transfer funds from one fiscal year to another? Back spend authority. (ii) Spend forward authority. (B) Funds spent forward will not affect the amount of funds allocated to the State agency for any fiscal year. Funds spent forward must be the first funds expended by the State agency for costs incurred in the next fiscal year. (iii) Reporting requirements. (c) Allocation formula. (1) Use of participation data in the formula. (2) How is the amount of NSA funds determined? (i) Fair share target funding level determination. (ii) Base funding level. (iii) Fair share allocation. (iv) Operational adjustment funds. (v) Operational level. (3) Allocation of food benefit funds. (i) Fair share target funding level determination. (B) The Department may adjust the respective amounts of food funds that would be allocated to a State agency which is outside the 48 contiguous states and the District of Columbia when the State agency can document that economic conditions result in higher food costs for the State agency. Prior to any such adjustment, the State agency must demonstrate that it has successfully implemented voluntary cost containment measures, such as improved vendor management practices, participation in multi-state agency infant formula rebate contracts or other cost containment efforts. The Department may use the Thrifty Food Plan amounts used in SNAP, or other available data, to formulate adjustment factors for such State agencies. (ii) Prior year grant level allocation. (iii) Inflation/fair share allocation. (B) In the event funds still remain after completing the distribution in paragraph (c)(3)(iii)(A) of this section, these funds shall be allocated to all State agencies including those with a stability allocation at, or greater than, their fair share allocation. Each State agency which can document the need for additional funds shall receive additional funds based on the difference between its prior year grant level and its fair share allocation. State agencies closest to their fair share allocation shall receive first consideration. (iv) Migrant services. 9/10 9/10 (v) Special provisions for Indian State agencies. (4) Adjustment for new State agencies. (d) Distribution of funds to local agencies. (1) Distribute funds to cover expected food cost expenditures and/or distribute caseload targets to each local agency which are used to project food cost expenditures. (2) Allocate funds to cover expected local agency NSA costs in a manner which takes into consideration each local agency's needs. For the allocation of NSA funds, the State agency shall develop an NSA funding procedure, in cooperation with representative local agencies, which takes into account the varying needs of the local agencies. The State agency shall consider the views of local agencies, but the final decision as to the funding procedure remains with the State agency. The State agency shall take into account factors it deems appropriate to further proper, efficient and effective administration of the program, such as local agency staffing needs, density of population, number of persons served, and availability of administrative support from other sources. (3) The State agency may provide in advance to any local agency any amount of funds for NSA deemed necessary for the successful commencement or significant expansion of program operations during a reasonable period following approval of a new local agency, a new cost containment measure, or a significant change in an existing cost containment measure. (e) Recovery and reallocation of funds. (2) Performance standards. (i) The amount allocated to any State agency for food benefits in the current fiscal year shall be reduced if such State agency's food expenditures for the preceding fiscal year do not equal or exceed 97 percent of the amount allocated to the State agency for such costs. Such reduction shall equal the difference between the State agency's preceding year food expenditures and the performance expenditure standard amount. For purposes of determining the amount of such reduction, the amount allocated to the State agency for food benefits for the preceding fiscal year shall not include food funds expended for food costs incurred under the spendback provision in paragraph (b)(3)(i) of this section or conversion authority in paragraph (g) of this section. Temporary waivers of the performance standard may be granted at the discretion of the Department. (ii) Reduction of NSA grant. (iii) Spend forward funds. (f) How do I qualify to convert food funds to NSA funds based on increased participation? Requirements. (i) Approved plan. (ii) Participation increases achieved. (A) The State agency increases its participation level through measures that are not in the nutritional interests of participants; or (B) It is not otherwise allowable under program regulations. (2) Limitation. (i) To cover NSA expenditures in the current fiscal year that exceed the State agency's NSA grant for the current fiscal year and any NSA funds which the State agency has spent forward into the current fiscal year; and (ii) To ensure that the State agency maintains the level established for the per participant NSA grant for the current fiscal year. (3) Maximum amount. (g) How do I qualify to convert food funds to NSA funds for service to remote Indian or Native villages? Eligible State agencies. (2) Limitation. (i) In providing services (including the full cost of air transportation and other transportation) to remote Indian or Native villages; and (ii) To provide breastfeeding support in those areas that exceed the State agency's NSA grant for the current fiscal year and any NSA funds which the State agency has spent forward into the current fiscal year. (h) What happens at the end of the fiscal year in which food funds are converted? (i) How do converted funds affect the calculation of my prior year food grant and base NSA grant? (j) Inflation adjustment of the fruit and vegetable voucher. (1) Adjustment year. (2) Base value of the fruit and vegetable voucher. (i) $24 for children; (ii) $43 for pregnant and postpartum women; and (iii) $47 for breastfeeding (fully and partially (mostly)) women. (3) Adjusted value of the fruit and vegetable voucher. (i) Multiplied by the inflation adjustment described in paragraph (j)(4) of this section; and (ii) Subject to rounding as described in paragraph (j)(5) of this section. (4) Inflation adjustment. (5) Rounding. [50 FR 6121, Feb. 13, 1985] Editorial Note: For Federal Register www.govinfo.gov. § 246.16a Infant formula and authorized foods cost containment. (a) Who must use cost containment procedures for infant formula? (1) State agencies with home delivery or direct distribution food delivery systems; (2) Indian State agencies with 1,000 or fewer participants in April of any fiscal year, which are exempt for the following fiscal year; (3) State agencies granted a waiver under paragraph (e) of this section; and (4) State agencies granted a postponement under paragraph (f) of this section. (b) What cost containment procedures must be used? (c) What is the single-supplier competitive system? (i) Provide a minimum of 30 days between the publication of the solicitation and the date on which the bids are due, unless exempted by the Secretary; and (ii) Publicly open and read all bids aloud on the day the bids are due. (2) How must a State agency structure the bid solicitation? Single solicitation. (ii) Separate solicitations. (3) What is the size limitation for a State alliance? (4) On what types and physical forms of infant formula must bids be solicited? Type of infant formula Physical forms of infant formula Infant formula requirements (i) For a single solicitation, the solicitation must require bidders to specify a rebate amount for the following: A single milk-based infant formula (primary contract infant formula); bidders must specify the brand name of the milk-based infant formula for which the rebate is being specified Concentrated liquid, powdered, and ready-to-feed Meets requirements under § 246.10(e)(1)(iii) and § 246.10(e)(2)(iii) and suitable for routine issuance to the majority of generally healthy, full-term infants. (ii) For separate solicitations, the solicitation must require bidders to specify a rebate amount for the following: (A) A single milk-based infant formula (primary milk-based contract brand infant formula); bidders must specify the brand name of the milk-based infant formula for which the rebate is being specified Concentrated liquid, powdered, and ready-to-feed Meets requirements under § 246.10(e)(1)(iii) and § 246.10(e)(2)(iii) and suitable for routine issuance to the majority of generally healthy, full-term infants. (B) A single soy-based infant formula (primary soy-based contract brand infant formula); bidders must specify the brand name of the soy-based infant formula for which the rebate is being specified Concentrated liquid, powdered, and ready-to-feed Meets requirements under § 246.10(e)(1)(iii) and § 246.10(e)(2)(iii). (5) A State agency must award the contract(s) to the responsive bidder(s) offering the lowest total monthly net price for infant formula or the highest monthly rebate (subject to paragraph(c)(4)(ii) of this section) for a standardized number of units of infant formula. To be responsive, a bidder must submit a bid by the deadline set by the State agency that conforms to the solicitation and must meet requirements at 246.16a and set forth in the bid solicitation. The State agency must calculate the lowest net price using the lowest national wholesale cost per unit for a full truckload of the infant formula on the date of the bid opening. (i) Calculating the standardized number of units of infant formula. e.g., e.g., i.e., (ii) Determining the lowest total monthly net price or highest rebate. (iii) Highest rebate limitation. (6) What data must be provided to bidders? (7) How is the rebate to be calculated on all other contract brand infant formulas? (i) Calculation of percentage discounts. (ii) Calculation of rebate amount. (iii) Calculation of rebates during contract term. (iv) Cent-for-cent rebate adjustments. (8) What is the first choice of issuance for infant formula? (9) Under what circumstances may the State agency issue other contract brand formulas? (d) What is an alternative cost containment system? (1) How must the State agency structure the bid solicitation? (2) How does the State agency conduct the cost comparison? Establishing infant formula cost containment savings. Savings under the single-supplier competitive system. (B) Savings under an alternative cost containment system. (C) General. (ii) Nutrition services and administration cost adjustment. (iii) Final cost comparison. (e) How does a State agency request a waiver of the requirement for a single-supplier competitive system? (1) The difference between the single-supplier competitive system and the alternative cost containment system is less than 3 percent of the savings anticipated under the latter system and not more than $100,000 per annum. (2) The single-supplier competitive system would be inconsistent with the efficient or effective operation of the program. Examples of justifications FNS will not accept for a waiver, include, but are not limited to: preservation of participant preference for otherwise nutritionally equivalent infant formulas; maintenance of health care professionals' prerogatives to prescribe otherwise nutritionally equivalent infant formulas for non-medical reasons; potential loss of free or otherwise discounted materials to WIC clinics and other health care facilities; potential inability of a manufacturer selected in accordance with applicable State procurement procedures to supply contractually-specified amounts of infant formula; and the possibility of interrupted infant formula supplies to retail outlets as a consequence of entering into a contract with a single manufacturer. (f) How does a State agency request a postponement of the requirement for a continuously operated cost containment system for infant formula? (g) May a State agency implement cost containment systems for other supplemental foods? (1) Provide notification to FNS by means of the State agency's State Plan. (2) Comply with paragraphs (c)(2) and (k) of this section. (3) Provide a minimum of 30 days between the publication of the solicitation and the date on which the bids are due, unless exempted by the Secretary. The State must publicly open and read all bids aloud on the day the bids are due. (4) Issue separate solicitations for authorized foods if any alliance served a monthly average of more than 100,000 infants during the preceding 12-month period. (h) What are the implementation time frames for Indian State agencies that lose their exemption from the infant formula cost containment requirement? (i) What are the penalties for failure to comply with the cost containment requirements? (j) What provisions are prohibited to be included in cost containment contracts? (1) Prescribe conditions that would void, reduce the savings under or otherwise limit the original contract if the State agency solicited or secured bids for, or entered into, a subsequent cost containment contract to take effect after the expiration of the original contract; (2) Does not include the registration and certification requirements in § 246.10(g); (3) Require infant formula manufacturers to submit bids on more than one of the systems specified in the invitation for bids; or (4) Require infant formula manufacturers to provide gratis infant formula or other items. (k) What are the requirements for infant formula and authorized food rebate invoices? (l) What are the requirements for the national cost containment bid solicitation and selection for infant formula? (1) FNS will solicit bids and select the winning bidder(s) for infant formula cost containment contracts only if two or more State agencies with retail food delivery systems request FNS to conduct bid solicitation and selection on their behalf. FNS will conduct the bid solicitation and selection process only and will not award or enter into any infant formula cost containment contract on behalf of the individual State agencies. Each State agency will individually award and enter into infant formula cost containment contract(s) with the winning bidder(s). State agencies must obtain the rebates directly from the infant formula manufacturer(s). FNS will conduct the bid solicitation in accordance with this paragraph (l) and the competitive bidding procurement procedures of the State agency with the highest infant participation in the bid group on whose behalf bids are being solicited. Any bid protests and contractual disputes are the responsibility of the individual State agencies to resolve. (2) FNS will make a written offer to all State agencies to conduct bid solicitation and selection on their behalf at least once every 12 months. FNS will send State agencies a copy of the draft Request for Rebates when making the offer to State agencies. Only State agencies that provide the information required by this paragraph (l)(2) in writing, signed by a responsible State agency official, by certified mail, return receipt requested or by hand delivery with evidence of receipt within 15 days of receipt of the offer will be included in the national bid solicitation and selection process. Each interested State agency must provide: (i) A statement that the State agency requests FNS to conduct bid solicitation and selection on its behalf; (ii) A statement of the State agency's minimum procurement procedures applicable to competitive bidding (as defined in § 246.2) for infant formula cost containment contracts and supporting documentation; (iii) A statement of any limitation on the duration of infant formula cost containment contracts and supporting documentation; (iv) A statement of any contractual provisions required to be included in infant formula cost containment contracts by the State agency; (v) The most recent available average monthly number of infant participants less those infant participants who are exclusively breastfed and those who are issued exempt infant formula. The average monthly participation level must be based on at least 6 months of participation data. (vi) Infant formula usage rates by type (e.g., milk-based or soy-based), form (e.g., concentrated, powdered, ready-to-feed), container size, and supporting documentation; (vii) A statement of the termination date of the State agency's current infant formula cost containment contract; and (viii) Any other related information that FNS may request. (3) If FNS determines that the number of State agencies making the request provided for in paragraph (l)(2) of this section does not comply with the requirements of paragraph (c)(2) of this section, FNS shall, in consultation with such State agencies, divide such State agencies into more than one group and solicit bids for each group. These groups of State agencies are referred to as “bid groups.” In determining the size and composition of the bid groups, FNS will, to the extent practicable, take into account the need to maximize the number of potential bidders so as to increase competition among infant formula manufacturers and the similarities in the State agencies' procurement and contract requirements (as provided by the State agencies in accordance with paragraphs (l)(2)(ii), (l)(2)(iii), and (l)(2)(iv) of this section). FNS reserves the right to exclude a State agency from the national bid solicitation and selection process if FNS determines that the State agency's procurement requirements or contractual requirements are so dissimilar from those of the other State agencies in any bid group that the State agency's inclusion in the bid group could adversely affect the bids. (4) For each bid group formed pursuant to paragraphs (l)(2) and (l)(3) of this section, FNS will use for soliciting bids the competitive bidding procurement procedures of the State agency in the group with the highest infant participation. To the extent not inconsistent with the requirements of this paragraph (l), FNS will use that set of procedures in soliciting the bids for that bid group of State agencies. FNS will notify each State agency in the bid group of the choice and provide them each a copy of the procurement procedures of the chosen State agency. Each State agency must provide FNS a written statement, signed by a responsible State agency official, by certified mail, return receipt requested or by hand delivery with evidence of receipt stating whether that State agency is legally authorized to award an infant formula cost containment contract pursuant to that set of procedures within 10 days of the receipt of the notification. If the State agency determines it is not legally authorized to award an infant formula cost containment contract pursuant to those procedures, that State agency may not continue in that round of the national bid solicitation and selection. (5) At a minimum, in soliciting bids FNS will address the following: (i) Unless FNS determines that doing so would not be in the best interest of the Program, bids will be solicited for either: (A) A single contract for each State agency under which the winning bidder will be required to supply and provide rebates on all infant formulas produced by that manufacturer (except exempt infant formulas) that are issued by the State agency. If that manufacturer does not produce a soy-based infant formula, the winning bidder will be required to subcontract with another manufacturer for a soy-based infant formula and the winning bidder will be required to pay a rebate on the soy-based infant formula; or (B) Two separate contracts for each State agency. Under the first contract, the winning bidder will supply and provide a rebate on all the milk-based infant formulas the winning bidder produces (except exempt infant formulas) that are issued by the State agency and under the second contract the winning bidder will supply and provide a rebate on all the soy-based infant formulas the winning bidder produces (except exempt infant formulas) that are issued by the State agency. (ii) The infant formula cost containment contract(s) to be entered into by the State agencies and infant formula manufacturers must provide for a constant net price for infant formula for the full term of the infant formula cost containment contract(s). (iii) The duration of the infant formula cost containment contracts for each bid group will be determined by FNS in consultation with the State agencies. The term will be for a period of not less than 2 years, unless the law applicable to a State agency regarding the duration of infant formula cost containment contracts is more restrictive than this paragraph (l)(5)(iii). In such cases, the term of the contract for only that State agency will be for one year, with the option provided to the State agency to extend the contract for a specified number of additional years (to be determined by FNS in consultation with the State agency). The date on which the individual State agencies' current infant formula cost containment contracts terminate may vary, so the infant formula cost containment contracts awarded by the State agencies within a bid group may begin on different dates. (iv) FNS will not prescribe conditions that are prohibited under paragraph (j) of this section. (v) FNS will solicit bids for rebates only from infant formula manufacturers. FNS may limit advertising to contacting in writing each infant formula manufacturer which has registered with the Secretary of Health and Human Services under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et seq. (6) FNS will select the winning bidder(s). The winning bidder(s) will be the responsive and responsible bidder(s) meeting the specifications and all bid terms and conditions which offers the lowest net price weighted to take into account infant formula usage rates and infant participation. In all instances the winning bidder(s) will be those which singly or in combination yield the greatest aggregate savings based on the net price weighted to take into account the infant formula usage rates. To break a tie between 2 equally low bids, FNS will select the bidder to be awarded the infant formula cost containment contract by a drawing by lot limited to the bidders which submitted those bids. (7) Once FNS has conducted bid selection, a State agency may decline to award the infant formula cost containment contract(s) only if the State agency determines that awarding the contract(s) would not be in the best interests of its Program, taking into account whether the national bid solicitation and selection would achieve a lower aggregate savings. (8) As soon as practicable after selecting the winning bid(s), FNS will notify the affected State agencies in writing of the bid results, including the name(s) of the winning bidder(s). If a State agency chooses to request approval to decline to award the infant formula cost containment contract(s) in accordance with paragraph (l)(7) of this section, it must notify FNS in writing, signed by a responsible State agency official, together with supporting documentation, by certified mail, return receipt requested or by hand delivery with evidence of receipt within 10 days of the State agency's receipt of this notification of bid results. (9) If FNS approves any State agency's request to decline to award the infant formula cost containment contract(s) in accordance with paragraphs (l)(7) and (l)(8) of this section, FNS will notify the bidders of the decision. If two or more State agencies remain in the group, FNS will require the bidders to indicate in writing whether they wish to withdraw or modify their bids within 5 days of receipt of this notification. FNS will again permit State agencies to decline to award the infant formula cost containment contract(s) in accordance with paragraphs (l)(7) and (l)(8) of this section. If FNS approves these additional State agency requests to decline contract awards, FNS may conduct a resolicitation of bids in accordance with this paragraph (l). (m) What are the penalties for disclosing the amount of the bid or discount practices prior to the time bids are opened? (n) What minimum recall-related provisions must be included in infant formula cost containment contracts? (1) Allow infant formula to be issued in all unit sizes that may exceed the maximum monthly allowance. The State agency and contracted infant formula manufacturer must prioritize unit sizes that most closely provide the maximum monthly allowance; (2) Allow the issuance of non-contract brand infant formulas without medical documentation, with the exception of participants receiving Food Package III as defined in § 246.10(e)(3); and (3) When any contract brand infant formula of the contracted manufacturer is the subject of a recall, require the contracted infant formula manufacturer to: (i) Provide the State agency with an action plan, within a timeline established within the contract, which includes supply data, to meet infant formula demand and limit disruption to Program participants in the affected jurisdiction(s); and (ii) Pay rebates on competitive, non-contract brand infant formula that meets the definition of infant formula at 7 CFR 246.2. [65 FR 51224, Aug. 23, 2000, as amended at 73 FR 11313, Mar. 3, 2008; 73 FR 21811, Apr. 23, 2008; 76 FR 59889, Sept. 28, 2011; 88 FR 86562, Dec. 14, 2023; 90 FR 58508, Dec. 17, 2025] § 246.17 Closeout procedures. (a) General. (b) Fiscal year closeout reports. (1) Shall submit to FNS, within 30 days after the end of the fiscal year, preliminary financial reports which show cumulative actual expenditures and obligations for the fiscal year, or part thereof, for which Program funds were made available; (2) Shall submit to FNS, within 120 days after the end of the fiscal year, final fiscal year closeout reports; (3) May submit revised closeout reports. FNS will reimburse State agencies for additional costs claimed in a revised closeout report up to the State's original grant level, if costs are properly justified and if funds are available for the fiscal year pertaining to the request. FNS will not be responsible for reimbursing State agencies for unreported expenditures later than one year after the end of the fiscal year in which they were incurred. (c) Grant closeout procedures. (1) FNS may disqualify a State agency's participation under the Program, in whole or in part, or take such remedies as may be legal and appropriate, whenever FNS determines that the State agency failed to comply with the conditions prescribed in this part, in its Federal-State Agreement, or in FNS guidelines and instructions. FNS will promptly notify the State agency in writing of the disqualification together with the effective date. A State agency shall disqualify a local agency by written notice whenever it is determined by FNS or the State agency that the local agency has failed to comply with the requirements of the Program. (2) FNS or the State agency may disqualify the State agency or restrict its participation in the Program when both parties agree that continuation under the Program would not produce beneficial results commensurate with the further expenditure of funds. The State agency or the local agency may disqualify the local agency or restrict its participation in the Program under the same conditions. The two parties shall agree upon the conditions of disqualification, including the effective date thereof, and, in the case of partial disqualification, the portion to be disqualified. (3) Upon termination of a grant, the affected agency shall not incur new obligations for the disqualified portion after the effective date, and shall cancel as many outstanding obligations as possible. FNS will allow full credit to the State agency for the Federal share of the noncancellable obligations properly incurred by the State agency prior to disqualification, and the State agency shall do the same for the local agency. (4) A grant closeout shall not affect the retention period for, or Federal rights of access to, grant records as specified in § 246.25. The closeout of a grant does not affect the State or local agency's responsibilities regarding property or with respect to any Program income for which the State or local agency is still accountable. (5) A final audit is not a required part of the grant closeout and should not be needed unless there are problems with the grant that require attention. If FNS considers a final audit to be necessary, it shall so inform OIG. OIG will be responsible for ensuring that necessary final audits are performed and for any necessary coordination with other Federal cognizant audit agencies or the State or local auditors. Audits performed in accordance with § 246.20 may serve as final audits providing such audits meet the needs of requesting agencies. If the grant is closed out without the audit, FNS reserves the right to disallow and recover an appropriate amount after fully considering any recommended disallowances resulting from an audit which may be conducted later. [50 FR 6121, Feb. 13, 1985, as amended at 71 FR 56731, Sept. 27, 2006; 81 FR 66494, Sept. 28, 2016; 83 FR 14173, Apr. 3, 2018] § 246.18 Administrative review of State agency actions. (a) Adverse actions subject to administrative reviews Vendor appeals Adverse actions subject to full administrative reviews. (A) Denial of authorization based on the application of the vendor selection criteria for minimum variety and quantity of authorized supplemental foods (§ 246.12(g)(3)(i)), or on a determination that the vendor is attempting to circumvent a sanction (§ 246.12(g)(6)); (B) Termination of an agreement for cause; (C) Disqualification; and (D) Imposition of a fine or a civil money penalty in lieu of disqualification. (ii) Adverse actions subject to abbreviated administrative reviews. (A) Denial of authorization based on the vendor selection criteria for business integrity or for a current SNAP disqualification or civil money penalty for hardship (§ 246.12(g)(3)(ii) and (g)(3)(iii)); (B) Denial of authorization based on the application of the vendor selection criteria for competitive price (§ 246.12(g)(4)); (C) The application of the State agency's vendor peer group criteria and the criteria used to identify vendors that are above-50-percent vendors or comparable to above-50-percent vendors; (D) Denial of authorization based on a State agency-established vendor selection criterion if the basis of the denial is a WIC vendor sanction or a SNAP withdrawal of authorization or disqualification; (E) Denial of authorization based on the State agency's vendor limiting criteria (§ 246.12(g)(2)); (F) Denial of authorization because a vendor submitted its application outside the timeframes during which applications are being accepted and processed as established by the State agency under § 246.12(g)(8); (G) Termination of an agreement because of a change in ownership or location or cessation of operations (§ 246.12(h)(3)(xvii)); (H) Disqualification based on a trafficking conviction (§ 246.12(l)(1)(i)); (I) Disqualification based on the imposition of a SNAP civil money penalty for hardship (§ 246.12(l)(2)(ii)); and (J) Disqualification or a civil money penalty imposed in lieu of disqualification based on a mandatory sanction imposed by another WIC State agency (§ 246.12(l)(2)(iii)). (K) A civil money penalty imposed in lieu of disqualification based on a SNAP disqualification under § 246.12(l)(1)(vii) and, (L) Denial of an application based on a determination of whether an applicant vendor is currently authorized by SNAP. (iii) Actions not subject to administrative reviews. (A) The validity or appropriateness of the State agency's vendor limiting criteria (§ 246.12(g)(2)) or vendor selection criteria for minimum variety and quantity of supplemental foods, business integrity, and current Supplemental Nutrition Assistance Program disqualification or civil money penalty for hardship (§ 246.12(g)(3)); (B) The validity or appropriateness of the State agency's selection criteria for competitive price (§ 246.12(g)(4)), including, but not limited to, vendor peer group criteria and the criteria used to identify vendors that are above-50-percent vendors or comparable to above-50-percent vendors; (C) The validity or appropriateness of the State agency's participant access criteria and the State agency's participant access determinations; (D) The State agency's determination to include or exclude an infant formula manufacturer, wholesaler, distributor, or retailer from the list required pursuant to § 246.12(g)(11); (E) The validity or appropriateness of the State agency's prohibition of incentive items and the State agency's denial of an above-50-percent vendor's request to provide an incentive item to customers pursuant to § 246.12(h)(8); (F) The State agency's determination whether to notify a vendor in writing when an investigation reveals an initial violation for which a pattern of violations must be established in order to impose a sanction, pursuant to § 246.12(l)(3); (G) The State agency's determination whether a vendor had an effective policy and program in effect to prevent trafficking and that the ownership of the vendor was not aware of, did not approve of, and was not involved in the conduct of the violation (§ 246.12(l)(1)(i)(B)); (H) Denial of authorization if the State agency's vendor authorization is subject to the procurement procedures applicable to the State agency; (I) The expiration of a vendor's agreement; (J) Disputes regarding food instrument or cash-value voucher payments and vendor claims (other than the opportunity to justify or correct a vendor overcharge or other error, as permitted by § 246.12(k)(3); and (K) Disqualification of a vendor as a result of disqualification from SNAP (§ 246.12(l)(1)(vii)). (2) Effective date of adverse actions against vendors. (3) Local agency appeals Adverse actions subject to full administrative reviews. (A) Denial of a local agency's application; (B) Disqualification of a local agency; and (C) Any other adverse action that affects a local agency's participation. (ii) Actions not subject to administrative reviews. (A) Expiration of the local agency's agreement; and (B) Denial of a local agency's application if the State agency's local agency selection is subject to the procurement procedures applicable to the State agency; (iii) Effective date of adverse actions against local agencies. (4) Farmer or farmers' market appeals Adverse actions. (ii) Effective date of adverse actions against farmers or farmers' markets. (b) Full administrative review procedures. (1) Written notification of the adverse action, the procedures to follow to obtain a full administrative review and the cause(s) for and the effective date of the action. When a vendor is disqualified due in whole or in part to violations in § 246.12(l)(1), such notification must include the following statement: “This disqualification from WIC may result in disqualification as a retailer in SNAP. Such disqualification is not subject to administrative or judicial review under SNAP.” (2) The opportunity to appeal the adverse action within a time period specified by the State agency in its notification of adverse action. (3) Adequate advance notice of the time and place of the administrative review to provide all parties involved sufficient time to prepare for the review. (4) The opportunity to present its case and at least one opportunity to reschedule the administrative review date upon specific request. The State agency may set standards on how many review dates can be scheduled, provided that a minimum of two review dates is allowed. (5) The opportunity to cross-examine adverse witnesses. When necessary to protect the identity of WIC Program investigators, such examination may be conducted behind a protective screen or other device (also referred to as an “in camera” examination). (6) The opportunity to be represented by counsel. (7) The opportunity to examine prior to the review the evidence upon which the State agency's action is based. (8) An impartial decision-maker, whose determination is based solely on whether the State agency has correctly applied Federal and State statutes, regulations, policies, and procedures governing the Program, according to the evidence presented at the review. The State agency may appoint a reviewing official, such as a chief hearing officer or judicial officer, to review appeal decisions to ensure that they conform to approved policies and procedures. (9) Written notification of the review decision, including the basis for the decision, within 90 days from the date of receipt of the request for an administrative review from a vendor, farmer, or farmer's market, and within 60 days from the date of receipt of a local agency's request for an administrative review. These timeframes are only administrative requirements for the State agency and do not provide a basis for overturning the State agency's adverse action if a decision is not made within the specified timeframe. (c) Abbreviated administrative review procedures. (1) Written notification of the adverse action, the procedures to follow to obtain an abbreviated administrative review, the cause(s) for and the effective date of the action, and an opportunity to provide a written response; and (2) A decision-maker who is someone other than the person who rendered the initial decision on the action and whose determination is based solely on whether the State agency has correctly applied Federal and State statutes, regulations, policies, and procedures governing the Program, according to the information provided to the vendor, farmer, or farmers' market concerning the cause(s) for the adverse action and the response from the vendor, farmer, or farmers' market. (3) Written notification of the review decision, including the basis for the decision, within 90 days of the date of receipt of the request for an administrative review. This timeframe is only an administrative requirement for the State agency and does not provide a basis for overturning the State agency's adverse action if a decision is not made within the specified timeframe. (d) Continuing responsibilities. (e) Finality and effective date of decisions. (f) Judicial review. [65 FR 83266, Dec. 29, 2000, as amended at 70 FR 71724, Nov. 29, 2005; 73 FR 68998, Dec. 6, 2007; 73 FR 21811, Apr. 23, 2008; 74 FR 557, Jan. 6, 2009; 74 FR 51759, Oct. 8, 2009; 79 FR 12300, Mar. 4, 2014] Subpart F—Monitoring and Review § 246.19 Management evaluation and monitoring reviews. (a) Management evaluations and reviews. (2) The State agency must submit a corrective action plan, including implementation timeframes, within 60 days of receipt of an FNS management evaluation report containing a finding that the State agency did not comply with program requirements. If FNS determines through a management evaluation or other means that during a fiscal year the State agency has failed, without good cause, to demonstrate efficient and effective administration of its program, or has failed to comply with its corrective action plan, or any other requirements contained in this part or the State Plan, FNS may withhold an amount up to 100 percent of the State agency's nutrition services and administration funds for that year. (3) Sanctions imposed upon a State agency by FNS in accordance with this section (but not claims for repayment assessed against a State agency) may be appealed in accordance with the procedures established in § 246.22. Before carrying out any sanction against a State agency, the following procedures will be followed: (i) FNS will notify the Chief State Health Officer or equivalent in writing of the deficiencies found and of FNS' intention to withhold nutrition services and administration funds unless an acceptable corrective action plan is submitted by the State agency to FNS within 60 days after mailing of notification. (ii) The State agency shall develop a corrective action plan with a schedule according to which the State agency shall accomplish various actions to correct the deficiencies and prevent their future recurrence. (iii) If the corrective action plan is acceptable, FNS will notify the Chief State Health Officer or equivalent in writing within 30 days of receipt of the plan. The letter approving the corrective action plan will describe the technical assistance that is available to the State agency to correct the deficiencies. The letter will also advise the Chief State Health Officer or equivalent of the sanctions to be imposed if the corrective action plan is not implemented according to the schedule set forth in the approved plan. (iv) Upon notification from the State agency that corrective action as been taken, FNS will assess such action, and, if necessary, will perform a follow-up review to determine if the noted deficiencies have been corrected. FNS will then advise the State agency of whether the actions taken are in compliance with the corrective action plan, and whether the deficiency is resolved or further corrective action is needed. (v) If an acceptable corrective action plan is not submitted within 60 days, or if corrective action is not completed according to the schedule established in the corrective action plan, FNS may withhold nutrition services and administration funds through a reduction of the State agency Letter of Credit or by assessing a claim against the State agency. FNS will notify the Chief State Health Officer or equivalent of this action. (vi) If compliance is achieved before the end of the fiscal year in which the nutrition services and administration funds are withheld, the funds withheld shall be restored to the State agency's Letter of Credit. FNS is not required to restore funds withheld if compliance is not achieved until the subsequent fiscal year. If the 60-day warning period ends in the fourth quarter of a fiscal year, FNS may elect not to withhold funds until the next fiscal year. (b) State agency responsibilities. (2) Monitoring of local agencies must encompass evaluation of management, certification, nutrition education, breastfeeding promotion and support, participant services, civil rights compliance, accountability, financial management systems, and food delivery systems. If the State agency delegates the signing of vendor agreements, vendor training, or vendor monitoring to a local agency, it must evaluate the local agency's effectiveness in carrying out these responsibilities. (3) The State agency shall conduct monitoring reviews of each local agency at least once every two years. Such reviews shall include on-site reviews of a minimum of 20 percent of the clinics in each local agency or one clinic, whichever is greater. The State agency may conduct such additional on-site reviews as the State agency determines to be necessary in the interest of the efficiency and effectiveness of the program. (4) The State agency must promptly notify a local agency of any finding in a monitoring review that the local agency did not comply with program requirements. The State agency must require the local agency to submit a corrective action plan, including implementation timeframes, within 60 days of receipt of a State agency report of a monitoring review containing a finding of program noncompliance. The State agency must monitor local agency implementation of corrective action plans. (5) As part of the regular monitoring reviews, FNS may require the State agency to conduct in-depth reviews of specified areas of local agency operations, to implement a standard form or protocol for such reviews, and to report the results to FNS. No more than two such areas will be stipulated by FNS for any fiscal year and the areas will not be added or changed more often than once every two fiscal years. These areas will be announced by FNS at least six months before the beginning of the fiscal year. (6) The State agency shall require local agencies to establish management evaluation systems to review their operations and those of associated clinics or contractors. [50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11508, Mar. 11, 1994; 76 FR 59890, Sept. 28, 2011] § 246.20 Audits. (a) Federal audit responsibilities. (2) The State agency may take exception to particular audit findings and recommendations. The State agency shall submit a response or statement to FNS as to the action taken or a proposed corrective action plan regarding the findings. A proposed corrective action plan developed and submitted by the State agency shall include specific timeframes for its implementation and for completion of correction of deficiencies and their causes. (3) FNS will determine whether Program deficiencies have been adequately corrected. If additional corrective action is necessary, FNS shall schedule a follow-up review, allowing a reasonable time for such corrective action to be taken. (b) State audit responsibilities. (2) Each State agency shall make all State or local agency sponsored audit reports of Program operations under its jurisdiction available for the Department's review upon request. The cost of these audits shall be considered a part of nutrition services and administration costs and may be funded from the State or local agency nutrition services and administration funds, as appropriate. For purposes of determining the Program's pro rata share of indirect costs associated with organization-wide audits, the cost of food shall not be considered in the total dollar amount of the Program. [50 FR 6121, Feb. 13, 1985, as amended at 71 FR 56731, Sept. 27, 2006; 81 FR 66494, Sept. 28, 2016; 83 FR 14173, Apr. 3, 2018] § 246.21 Investigations. (a) Authority. (b) Confidentiality. Subpart G—Miscellaneous Provisions § 246.22 Administrative appeal of FNS decisions. (a) Right to appeal. (1) FNS will send a written notice by Certified Mail-Return Receipt Requested to the state agency or otherwise ensure receipt of such notice by the agency when asserting a sanction against a State agency as specified in § 246.19(a). (2) A State agency aggrieved by a sanction asserted against it may file a written request with the Director, Administrative Review Division, U.S. Department of Agriculture, Food and Nutrition Service, 3101 Park Center Drive, Alexandria, Va. 22302, for a hearing or a review of the record. Such request shall be sent by Certified Mail-Return Receipt Requested and postmarked within 30 days of the date of receipt of the sanction notice. The envelope containing the request shall be prominently marked “REQUEST FOR REVIEW OR HEARING.” The request shall clearly identify the specific FNS sanction(s) being appealed and shall include a photocopy of the FNS notice of sanction. If the State agency does not request a review of hearing within 30 days of receipt of the notice, the administrative decision on the sanctions will be considered final. (b) Acknowledgment of request. (1) The acknowledgment will include the name and address of the FNS Administrative Review Officer to review the sanction; (2) The acknowledgment will also notify the State agency that within 30 days of the receipt of the acknowledgment, the State agency shall submit three sets of the following information to the Administrative Review Officer— (i) A clear, concise identification of the issue(s) in dispute; (ii) The State agency's position with respect to the issue(s) in dispute; (iii) The pertinent facts and reasons in support of the State agency's position with respect to the issue(s) in dispute and a copy of the specific sanction notice provided by FNS; (iv) All pertinent documents, correspondence and records which the State agency believes are relevant and helpful toward a more thorough understanding of the issue(s) in dispute; (v) The relief sought by the State agency; (vi) The identity of the person(s) presenting the State agency's position when a hearing is involved; and (vii) A list of prospective State agency witnesses when a hearing is involved. (c) FNS action. (2) When a hearing is requested, the FNS Administrative Review Officer will make a final determination within 30 days after the hearing, and the final determination will take effect upon delivery of the written notice of this final decision to the State agency. (3) When a review is requested, the FNS Administrative Review Officer will review information presented by a State agency and will make a final determination within 30 days after receipt of that information. The final determination will take effect upon delivery of the written notice of this final decision to the State agency. § 246.23 Claims and penalties. (a) Claims against State agencies. (2) If FNS determines that any part of the Program funds received by a State agency; or supplemental foods, either purchased or donated commodities; or food instruments or cash-value vouchers, were lost as a result of thefts, embezzlements, or unexplained causes, the State agency shall, on demand by FNS, pay to FNS a sum equal to the amount of the money or the value of the supplemental foods, food instruments, or cash-value vouchers so lost. (3) The State agency shall have full opportunity to submit evidence, explanation or information concerning alleged instances of noncompliance or diversion before a final determination is made in such cases. (4) FNS will establish a claim against any State agency that has not accounted for the disposition of all redeemed food instruments and cash-value vouchers and taken appropriate follow-up action on all redeemed food instruments and cash-value vouchers that cannot be matched against valid enrollment and issuance records, including cases that may involve fraud, unless the State agency has demonstrated to the satisfaction of FNS that it has: (i) Made every reasonable effort to comply with this requirement; (ii) Identified the reasons for its inability to account for the disposition of each redeemed food instrument or cash-value voucher; and (iii) Provided assurances that, to the extent considered necessary by FNS, it will take appropriate actions to improve its procedures. (b) Interest charge on claims against State agencies. (c) Claims Claims against participants. Procedures. (ii) Types of restitution. (iii) Disposition of claims. (2) Claims against the State agency. (3) Delegation of claims responsibility. (d) Penalties. [50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21238, June 4, 1987; 65 FR 83288, Dec. 29, 2000; 71 FR 56731, Sept. 27, 2006; 72 FR 68998, Dec. 6, 2007; 79 FR 12300, Mar. 4, 2014] § 246.24 Procurement and property management. (a) Requirements. (b) Contractual responsibilities. (c) State regulations. (d) Property acquired with Program funds. [50 FR 6121, Feb. 13, 1985, as amended at 59 FR 11508, Mar. 11, 1994; 81 FR 66494, 66495, Sept. 28, 2016] § 246.25 Records and reports. (a) Recordkeeping requirements. (1) Records shall include, but not be limited to, information pertaining to financial operations, food delivery systems, food instrument issuance and redemption, equipment purchases and inventory, certification, nutrition education, including breastfeeding promotion and support, civil rights and fair hearing procedures. (2) All records shall be retained for a minimum of three years following the date of submission of the final expenditure report for the period to which the report pertains. If any litigation, claim, negotiation, audit or other action involving the records has been started before the end of the three-year period, the records shall be kept until all issues are resolved, or until the end of the regular three-year period, whichever is later. If FNS deems any of the Program records to be of historical interest, it may require the State or local agency to forward such records to FNS whenever either agency is disposing of them. (3) Records for nonexpendable property acquired in whole or in part with Program funds shall be retained for three years after its final disposition. (4) All records shall be available during normal business hours for representatives of the Department and the Comptroller General of the United States to inspect, audit, and copy. Any reports or other documents resulting from the examination of such records that are publicly released may not include confidential applicant or participant information. (b) Financial and participation reports Monthly reports. (A) Actual and projected participation; (B) Actual and projected food funds expenditures; (C) Actual and projected rebate payments received from manufacturers. (D) A listing by source year of food and NSA funds available for expenditure; and, (E) NSA expenditures and unliquidated obligations. (ii) State agencies must require local agencies to report such financial and participation information as is necessary for the efficient management of food and NSA funds expenditures. (2) Annual reports. (ii) State agencies must submit itemized NSA expenditure reports annually as an addendum to their WIC Program closeout reports, as required by § 246.17(b)(2). (iii) The State agency must submit local agency breastfeeding participation data on an annual basis to FNS. (3) Biennial reports. Participant characteristics report. (ii) Civil rights report. (c) Other reports. (d) Source documentation. (e) Certification of reports. (f) Use of reports. (g) Extension of reporting deadline. [50 FR 6121, Feb. 13, 1985, as amended at 52 FR 21238, June 4, 1987; 53 FR 15653, May 3, 1988; 59 FR 11508, Mar. 11, 1994; 65 FR 53528, Sept. 5, 2000; 71 FR 56731, Sept. 27, 2006; 72 FR 24183, May 2, 2007; 76 FR 59890, Sept. 27, 2011; 81 FR 66494, Sept. 28, 2016] § 246.26 Other provisions. (a) No aid reduction. (b) Statistical information. (c) Medical information. (d) Confidentiality of applicant and participant information WIC purposes. (ii) Except as otherwise permitted by this section, the State agency must restrict the use and disclosure of confidential applicant and participant information to persons directly connected with the administration or enforcement of the WIC Program whom the State agency determine have a need to know the information for WIC Program purposes. These persons may include, but are not limited to: personnel from its local agencies and other WIC State or local agencies; persons under contract with the State agency to perform research regarding the WIC Program, and persons investigating or prosecuting WIC Program violations under Federal, State or local law. (2) Non-WIC purposes. Use by WIC State and local agencies. (ii) Disclosure to public organizations. (3) Child abuse and neglect reporting. (4) Release forms. (5) Access to information by applicants and participants. (e) Confidentiality of vendor information. (1) Persons directly connected with the administration or enforcement of the WIC Program or SNAP who the State agency determines have a need to know the information for purposes of these programs. These persons may include personnel from its local agencies and other WIC State and local agencies and persons investigating or prosecuting WIC or SNAP violations under Federal, State, or local law; (2) Persons directly connected with the administration or enforcement of any Federal or State law or local law or ordinance. Prior to releasing the information to one of these parties (other than a Federal agency), the State agency must enter into a written agreement with the requesting party specifying that such information may not be used or redisclosed except for purposes directly connected to the administration or enforcement of a Federal, or State law; and (3) A vendor that is subject to an adverse action, including a claim, to the extent that the confidential information concerns the vendor subject to the adverse action and is related to the adverse action. (4) At the discretion of the State agency, all authorized vendors and vendor applicants regarding vendor sanctions which have been imposed, identifying only the vendor's name, address, length of the disqualification or amount of the civil money penalty, and a summary of the reason(s) for such sanction provided in the notice of adverse action. Such information may be disclosed only following the exhaustion of all administrative and judicial review, in which the State agency has prevailed, regarding the sanction imposed on the subject vendor, or the time period for requesting such review has expired. (f) Confidentiality of SNAP retailer information. (g) USDA and the Comptroller General. (h) Requirements for use and disclosure of confidential applicant and participant information for non-WIC purposes. (1) Designation by chief State health officer. (2) Notice to applicants and participants. (3) Written agreement and State plan. (i) Specify that the receiving organization may use the confidential applicant and participant information only for: (A) Establishing the eligibility of WIC applicants or participants for the programs that the organization administers; (B) Conducting outreach to WIC applicants and participants for such programs; (C) Enhancing the health, education, or well-being of WIC applicants or participants who are currently enrolled in such programs, including the reporting of known or suspected child abuse or neglect that is not otherwise required by State law; (D) Streamlining administrative procedures in order to minimize burdens on staff, applicants, or participants in either the receiving program or the WIC Program; and/or (E) Assessing and evaluating the responsiveness of a State's health system to participants' health care needs and health care outcomes; and (ii) Contain the receiving organization's assurance that it will not use the information for any other purpose or disclose the information to a third party. (i) Subpoenas and search warrants. (1) Subpoena procedures. (i) Upon receiving the subpoena, immediately notify its State agency; (ii) Consult with legal counsel for the State or local agency and determine whether the information requested is in fact confidential and prohibited by this section from being used or disclosed as stated in the subpoena; (iii) If the State or local agency determines that the information is confidential and prohibited from being used or disclosed as stated in the subpoena, attempt to quash the subpoena unless the State or local agency determines that disclosing the confidential information is in the best interest of the Program. The determination to disclose confidential information without attempting to quash the subpoena should be made only infrequently; and, (iv) If the State or local agency seeks to quash the subpoena or decides that disclosing the confidential information is in the best interest of the Program, inform the court or the receiving party that this information is confidential and seek to limit the disclosure by: (A) Providing only the specific information requested in the subpoena and no other information; and, (B) Limiting to the greatest extent possible the public access to the confidential information disclosed. (2) Search warrant procedures. (i) Upon receiving the search warrant, immediately notify its State agency; (ii) Immediately notify legal counsel for the State or local agency; (iii) Comply with the search warrant; and, (iv) Inform the individual(s) serving the search warrant that the information being sought is confidential and seek to limit the disclosure by: (A) Providing only the specific information requested in the search warrant and no other information; and (B) Limiting to the greatest extent possible the public access to the confidential information disclosed. (j) Data collection related to local agencies. (i) The name of each local agency; (ii) The city in which each local agency was headquartered and the name of the state; (iii) The amount of funds provided to the participating organization, i.e., the amount of federal funds provided for nutrition services and administration to each participating local agency; and (iv) The type of participating organization, e.g., government agency, educational institution, non-profit organization/secular, non-profit organization/faith-based, and “other.” (2) On or before August 31, 2007, and each subsequent year through 2010, State agencies must report to FNS data as specified in paragraph (j)(1) of this section for the prior Federal fiscal year. State agencies must submit this data in a format designated by FNS. (k) Program evaluations. [50 FR 6121, Feb. 13, 1985, as amended at 53 FR 35301, Sept. 13, 1988; 65 FR 83288, Dec. 29, 2000; 71 FR 56731, Sept. 27, 2006; 72 FR 24184, May 2, 2007; 73 FR 21811, Apr. 23, 2008; 76 FR 37983, June 29, 2011] § 246.27 Program information. Any person who wishes information, assistance, records or other public material shall request such information from the State agency, or from the FNS Regional Office serving the appropriate State as listed below: (a) Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont: U.S. Department of Agriculture, FNS, Northeast Region, 10 Causeway Street, room 501, Boston, Massachusetts 02222-1066. (b) Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, Puerto Rico, Virginia, Virgin Islands, West Virginia: U.S. Department of Agriculture, FNS, Mid-Atlantic Region, Mercer Corporate Park, 300 Corporate Boulevard, Robbinsville, New Jersey 08691-1598. (c) Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee: U.S. Department of Agriculture, FNS, Southeast Region, 61 Forsyth Street, SW., room 8T36, Atlanta, Georgia 30303. (d) Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin: U.S. Department of Agriculture, FNS, Midwest Region, 77 West Jackson Boulevard—20th Floor, Chicago, Illinois 60604-3507. (e) Arkansas, Louisiana, New Mexico, Oklahoma, Texas: U.S. Department of Agriculture, FNS, Southwest Region, 1100 Commerce Street, room 5-C-30, Dallas, Texas 75242. (f) Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Utah, Wyoming: U.S. Department of Agriculture, FNS, Mountain Plains Region, 1244 Speer Boulevard, suite 903, Denver, Colorado 80204. (g) Alaska, American Samoa, Arizona, California, the Commonwealth of the Northern Mariana Islands, Guam, Hawaii, Idaho, Nevada, Oregon, Washington: U.S. Department of Agriculture, FNS, Western Region,90 Seventh Street, Suite #10-100, San Francisco, California 94103. [50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 59 FR 11508, Mar. 11, 1994; 71 FR 56733, Sept. 27, 2006; 73 FR 11314, Mar. 3, 2008] § 246.28 OMB control numbers. The following control numbers have been assigned to the information collection requirements in 7 CFR part 246 by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-511. 7 CFR part 246 section where requirements are described Current OMB control no. .4(a) (8), (9), (11) 0584-0386 .5 0584-0043 .6 0584-0043 .7(a) 0584-0386 .7(e), (h), (j) 0584-0043 .7(n) 0584-0386 .7(i) 0584-A536 .10 0584-A536 .11(a)(3) 0584-0386 .11(d) 0584-0043 .12(f), (i), (i)(3), (j) 0584-0043 .14(d)(1) 0584-0043 .16(c) 0584-0043 .17(c)(1) 0584-0043 .19 0584-0043 .20(a) 0584-0043 .25(a), (b) 0584-0043, 0584-0347 [50 FR 6121, Feb. 13, 1985, as amended at 53 FR 15653, May 3, 1988; 54 FR 51295, Dec. 14, 1989; 58 FR 11507, Feb. 26, 1993] § 246.29 Waivers of program requirements. (a) Required conditions. (1) The qualified administrative requirement cannot be implemented during any part of the emergency period or supply chain disruption. (2) The waiver or modification is necessary to serve participants and does not substantially weaken the nutritional quality of supplemental foods. (3) The waiver or modification would not result in material impairment of any statutory or regulatory rights of participants or potential participants as set forth at 7 CFR 246.8 or 7 CFR parts 15, 15a and 15b. (4) The waiver or modification would not create a barrier to participation. (5) The waiver or modification would not create additional eligibility requirements for participation. (6) The waiver or modification would comply with 7 CFR 246.13(b). (7) The waiver or modification must offer substitution options with similar nutritional quality, that most closely provide the maximum monthly allowance of supplemental foods, and that do not create new supplemental food categories as set forth in 7 CFR 246.10(e)(12) Table 4. (8) A State agency that requests a waiver or modification meets additional requirements for the request and approval as determined necessary by FNS. (b) Timeframes for waiver request and use. (2) Waiver duration. (i) A waiver or modification established during an emergency period may be available for the emergency period and up to 60 days after the end of the emergency period. (ii) A waiver or modification established during a supply chain disruption may be available for: (A) a period of up to 45 days from the date of waiver issuance and renewed with at least 15 days' notice provided by the Secretary; and (B) no more than 60 days after the supply chain disruption declaration

ceases to exist. (c) State agency waiver requests. (1) The qualified administrative requirement the State agency is requesting to modify or waive (including the statutory or regulatory citation) and an explanation for why it cannot be met; (2) Justification for why the waiver is necessary to continue WIC services; (3) An explanation that the waiver meets the conditions set forth in 7 CFR 246.29(a); (4) The emergency period or supply chain disruption under which the request is being made; (5) The period for which the flexibility is being requested. [88 FR 86563, Dec. 14, 2023, as amended at 90 FR 58508, Dec. 17, 2025]

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