PART 248—WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP) Authority: 42 U.S.C. 1786. Source: 59 FR 11517, Mar. 11, 1994, unless otherwise noted. Subpart A—General § 248.1 General purpose and scope. This part announces regulations under which the Secretary of Agriculture shall carry out the WIC Farmers' Market Nutrition Program. The dual purposes of the FMNP are: (a) To provide resources in the form of fresh, nutritious, unprepared foods (fruits and vegetables) from farmers' markets to women, infants, and children who are nutritionally at risk and who are participating in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) or are on the waiting list for the WIC Program; and (b) To expand the awareness, use of and sales at farmers' markets. This will be accomplished through payment of cash grants to approved State agencies which administer the FMNP and deliver benefits at no cost to eligible persons. The FMNP shall be supplementary to the food stamp program carried out under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq. § 248.2 Definitions. For the purpose of this part and all contracts, guidelines, instructions, forms and other documents related hereto, the term: Administrative costs Compliance buy Coupon Days Demonstration project Department Eligible foods Farmer Farmers' market Fiscal year FMNP funds FNS Food costs Household In-kind contributions Local agency Matching requirement Nonprofit agency et. seq. Nutrition education OIG Program or FMNP Recipient Roadside stand SFPD Similar programs State State agency State Plan Total FMNP funds WIC et. seq. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49745, Sept. 27, 1995; 64 FR 48076, Sept. 2, 1999; 73 FR 65249, Nov. 3, 2008] § 248.3 Administration. (a) Delegation to FNS. (b) Delegation to State agency. (c) Agreement and State Plan. (2) The written agreement must include a statement that supports full use of Federal funds provided to State agencies for the administration of the FMNP, and excludes such funds from State budget restrictions or limitations, including hiring freezes, work furloughs, and travel restrictions. (d) State agency ineligibility. (e) Coordination with WIC agency. (f) State staffing standards. [59 FR 11517, Mar. 11, 1994, as amended at 76 FR 37983, June 29, 2011; 81 FR 66496, Sept. 28, 2016] Subpart B—State Agency Eligibility § 248.4 State Plan. (a) Requirements. (1) A copy of the agreement between the designated administering State agency and the WIC State agency, if different, for services such as nutrition education, and documentation of coordinated efforts as required in § 248.3(e), as well as copies of agreements with agencies other than the WIC State agency. (2) Estimated number of recipients for the fiscal year, and proposed months of operation. (3) Estimated cost of the FMNP, including a minimum amount necessary to operate the FMNP. (4) Description of how the Program will achieve its dual purposes of providing a nutritional benefit to WIC (or waiting list) participants and expanding the awareness and use of farmers' markets. (5) Outline of administrative staff and job descriptions. (6) Detailed description of the recordkeeping system including, but not limited to, the system for maintaining records pertaining to financial operations, coupon issuance and redemption, and FMNP participation. (7) Detailed description of the financial management system, including, but not limited to documentation of how the State will meet the matching requirement and procedures for obligating funds. (8) Detailed description of the service area including: (i) The number and addresses of participating markets, roadside stands and area WIC clinics including a map outlining the service area and proximity of markets/roadside stands to clinics; and (ii) Estimated number of WIC participants and persons on the WIC waiting list that will receive FMNP coupons. (9) Description of the coupon issuance system including: (i) How the State agency will target areas with highest concentrations of eligible persons and greatest access to farmers' markets within the broadest possible geographic area; (ii) Annual benefit amount per recipient; (iii) Method for instructing recipients on the proper use of FMNP coupons and the purpose of the FMNP; and (iv) Method for ensuring that FMNP coupons are only issued to eligible recipients. (10) Detailed description of the coupon and farmers' market management system including: (i) Criteria for authorizing farmers' markets and/or roadside stands; (ii) Procedures for training farmers and market managers, at authorization, and annually thereafter; (iii) Procedures for monitoring farmers, farmers' markets and/or roadside stands; (iv) Description of system for identifying high risk farmers, farmers' markets and/or roadside stands and procedures for sanctioning farmers, farmers' markets and/or roadside stands; (v) Facsimile of the FMNP coupon; (vi) Identification of the fresh, nutritious, unprepared fruits, vegetables, and herbs which are eligible for purchase under the Program; (vii) Description of FMNP coupon replacement policy; (viii) Procedures for handling recipient and farmer/farmers' market complaints. (11) Detailed description of the FMNP coupon redemption process including: (i) Procedures for ensuring the secure transportation and storage of FMNP coupons; (ii) System for identifying and reconciling FMNP coupons; (iii) Timeframes for FMNP coupon redemption by recipients; submission for payment by markets, and payment by the State agency; (12) System for ensuring that FMNP coupons are redeemed only by authorized farmers, farmers' markets and/or roadside stands and only for eligible foods. (13) System for identifying FMNP coupons which are redeemed or submitted for payment outside valid dates or by unauthorized farmers, farmers' markets and/or roadside stands. (14) A copy of the written agreement to be used between the State agency and authorized farmers, farmers' markets and/or roadside stands. In those States which authorize farmers' markets, but not individual farmers, this agreement shall specify in detail the role of and procedures to be used by farmers' markets for monitoring and sanctioning farmers, and the appropriate procedures to be used by a farmer to appeal a sanction or disqualification imposed by a farmers' market. (15) If available, information on the change in consumption of fresh fruits and vegetables by recipients. This information shall be submitted as an addendum to the State Plan and shall be submitted at such a date specified by the Secretary. (16) If available, information on the effects of the program on farmers' markets. This information shall be submitted as an addendum to the State Plan and shall be submitted at such a date specified by the Secretary. (17) A description of the procedures the State agency will use to comply with the civil rights requirements described in § 248.7(a), including the processing of discrimination complaints. (18) State agencies which have not previously participated in the FMNP, shall provide the following additional information: (i) A statement assuring that if the State agency receives Federal funds, as specified under § 248.14 to operate the FMNP, and applies those funds to similar programs operated in the previous fiscal year with State or local funds, the amount of State and local funds that were available to similar programs in the fiscal year preceding the first year of operation shall not be reduced. The State agency shall include data in the State Plan showing that it did not reduce the amount of State and local funds available to the similar program in the preceding fiscal year. (ii) A capability statement which includes a summary description of any prior experience with farmers' market projects or programs, including information and data describing the attributes of such projects or programs. (19) For States making expansion requests, documentation which demonstrates: (i) The need for an increase in funding; (ii) That the use of the increased funding will be consistent with serving WIC participants, or persons on a waiting list for WIC benefits, by expanding benefits to more persons, by enhancing current benefits, or a combination of both, and expanding the awareness and use of farmers' markets; (iii) The ability to satisfactorily operate the existing FMNP; (iv) The management capabilities of the State agency to expand; and (v) Whether, in the case of a State agency that intends to use the funding to increase the value of the Federal share of the benefits received by a recipient, the funding provided will increase the rate of coupon redemption. (20) For those State agencies requesting the extra 2 percent administrative rate for market development or technical assistance to promote such development in disadvantaged areas or remote rural areas, an explanation of their justification and plans for the use of such funds. (b) Amendments. (c) Retention of copy. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49746, Sept. 27, 1995; 64 FR 48076, Sept. 2, 1999; 73 FR 65249, Nov. 3, 2008] § 248.5 Selection of new State agencies. In selecting new State agencies, the Department will use objective criteria to rank and approve State plans submitted in accordance with § 248.4. In making this ranking, the Department will consider the amount of funds necessary to successfully operate the FMNP in the State compared with other States and with the total amount of funds available to the FMNP. Approval of a State Plan does not equate to an obligation on the part of the Department to fund the FMNP within that State agency. [64 FR 48076, Sept. 2, 1999] Subpart C—Recipient Eligibility § 248.6 Recipient eligibility. (a) Eligibility for certification. (b) Limitations on certification. (c) Recipient or household benefit allocation. § 248.7 Nondiscrimination. (a) Civil rights requirements. (1) Notification to the public of the nondiscrimination policy and complaint rights of recipients and potentially eligible persons, which may be satisfied through the Department's required nondiscrimination statement on brochures and publications; (2) Review and monitoring activity to ensure FMNP compliance with the nondiscrimination laws and regulations; (3) Establishment of grievance procedures for handling recipient complaints based on sex and handicap. (b) Complaints. [59 FR 11517, Mar. 11, 1994, as amended at 73 FR 65249, Nov. 3, 2008] Subpart D—Recipient Benefits § 248.8 Level of benefits and eligible foods. (a) General. (b) The value of the Federal benefits received. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49746, Sept. 27, 1995; 73 FR 65250, Nov. 3, 2008] § 248.9 Nutrition education. (a) Goals. (b) Requirement. Subpart E—State Agency Provisions § 248.10 Coupon and market management. (a) General. (1) Only farmers, farmers' markets and roadside stands authorized by the State agency may redeem FMNP coupons. Only farmers authorized by the State agency or that have a valid agreement with an authorized farmers' market may redeem coupons. (2) The State agency shall establish criteria for the authorization of individual farmers, farmers' markets and roadside stands. Any authorized farmer, farmers' market and roadside stand must agree to sell recipients only those foods identified as eligible by the State agency, in exchange for FMNP coupons. Individuals who exclusively sell produce grown by someone else, such as wholesale distributors, cannot be authorized to participate in the FMNP, except individuals employed by a farmer otherwise qualified under these regulations, or individuals hired by a nonprofit organization to sell produce at farmers' markets or roadside stands on behalf of local farmers. (3) The State agency shall ensure that an appropriate number of farmers, farmers' markets and/or roadside stands are authorized for adequate recipient access in the area(s) proposed to be served and for effective management of the farmers, farmers' markets and/or roadside stands by the State agency. The State agency may establish criteria to limit the number of authorized farmers, farmers' markets and/or roadside stands. (4) The State agency shall ensure that face-to-face training is conducted prior to start up of the first year of FMNP participation of a farmers' market and individual farmer. The face-to-face training shall include at a minimum those items listed in paragraph (d) of this section. (5) Authorized farmers shall display a sign stating that they are authorized to redeem FMNP coupons. (6) Authorized farmers, farmers' markets and roadside stands shall comply with the requirements of Title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, Department of Agriculture regulations on non-discrimination (7 CFR parts 15, 15a and 15b), and FNS Instructions as outlined in § 248.7. (7) The State agency shall ensure that there is no conflict of interest between the State or local agency and any participating farmer, farmers' market and roadside stand. (b) Farmers' market agreements. (1) The farmer, farmers' market and roadside stand shall: (i) Provide such information as the State agency may require for its periodic reports to FNS; (ii) Assure that FMNP coupons are redeemed only for eligible foods; (iii) Provide eligible foods at the current price or less than the current price charged to other customers; (iv) Accept FMNP coupons within the dates of their validity and submit such coupons for payment within the allowable time period established by the State agency; (v) In accordance with a procedure established by the State agency, mark each transacted coupon with a farmer identifier. In those cases where the agreement is between the State agency and the farmer, each transacted FMNP coupon shall contain a farmer identifier and shall be batched for reimbursement under that identifier. In those cases where the agreement is between the State agency and the farmers' market, each transacted FMNP coupon shall contain a farmer identifier and be batched for reimbursement under a farmers' market identifier. (vi) Accept training on FMNP procedures and provide training to farmers and any employees with FMNP responsibilities on such procedures; (vii) Agree to be monitored for compliance with FMNP requirements, including both overt and covert monitoring; (viii) Be accountable for actions of farmers or employees in the provision of foods and related activities; (ix) Pay the State agency for any coupons transacted in violation of this agreement; (x) Offer FMNP recipients the same courtesies as other customers; (xi) Comply with the nondiscrimination provisions of USDA regulations as provided in § 248.7; and (xii) Notify the State agency if any farmer, farmers' market and/or roadside stand ceases operation prior to the end of the authorization period. (2) The farmer, farmers' market and roadside stand shall not: (i) Collect sales tax on FMNP coupon purchases; (ii) Seek restitution from FMNP recipients for coupons not paid by the State agency; (iii) Issue cash change for purchases that are in an amount less than the value of the FMNP coupon(s). (3) Neither the State agency nor the farmer, farmers' market nor a roadside stand has an obligation to renew the agreement. Either the State agency or the farmer, farmers' market or a roadside stand may terminate the agreement for cause after providing advance written notification. (4) The State agency may deny payment to the farmer, farmers' market or roadside stand for improperly redeemed FMNP coupons and may demand refunds for payments already made on improperly redeemed coupons. (5) The State agency may disqualify a farmer, farmers' market or roadside stand for FMNP abuse. The farmer, farmers' market and/or roadside stand has the right to appeal a denial of an application to participate, a disqualification, or a FMNP sanction by the State agency. Expiration of a contract or agreement with a farmer, farmers' market or roadside stand, and claims actions under § 248.20, are not appealable. (6) A farmer, farmers' market or a roadside stand which commits fraud or engages in other illegal activity is liable to prosecution under applicable Federal, State or local laws. (7) Agreements may not exceed 3 years. (c) Farmer agreements for State agencies which do not authorize farmers. (d) Annual training for farmers/farmers' market managers. (1) Eligible food choices; (2) Proper FMNP coupon redemption procedures, including deadlines for submission of coupons for payment; (3) Equitable treatment of FMNP recipients, including the availability of produce to FMNP recipients that is of the same quality and cost as that sold to other customers; (4) Civil rights compliance and guidelines; (5) Guidelines for storing FMNP coupons safely; and (6) Guidelines for cancelling FMNP coupons, such as punching holes or rubber stamping. (e) Monitoring and review of farmers, farmers' markets, roadside stands and local agencies. (1) Where coupon reimbursement responsibilities are delegated to farmers' market managers, farmers' market associations, or nonprofit organizations, the State agency may establish bonding requirements for these entities. Costs of such bonding are not reimbursable administrative expenses. (2) Each State agency shall rank participating farmers, farmers' markets and roadside stands by risk factors, and shall conduct annual, on-site monitoring of at least 10 percent of farmers, 10 percent of farmers' markets and 10 percent of roadside stands which shall include those farmers, farmers' markets and roadside stands identified as being the highest risk.Mandatory high-risk indicators are a proportionately high volume of FMNP coupons redeemed by a farmer as compared to other farmers within the farmers' market and within the State, recipient complaints, and farmers and farmers' markets in their first year of FMNP operation. States are encouraged to formally establish other high risk indicators for identifying potential problems. If additional high risk indicators are established, they shall be set forth in the farmers/farmers' market agreement and in the State Plan. If application of the high-risk indicators results in fewer than 10 percent of farmers and farmers' markets as high-risk, the State agency shall randomly select additional farmers and farmers' markets to be monitored in order to meet the 10 percent minimum. The high-risk indicators listed above generally apply to a State agency already participating in the FMNP. A State agency participating in the FMNP for the first time shall, in lieu of applying the high-risk indicators, randomly select 10 percent of its participating farmers, 10 percent of its participating farmers' markets, and 10 percent of its participating roadside stands for monitoring visits. (3) The following shall be documented for all on-site farmers, farmers' markets, and roadside stands monitoring visits. At a minimum, documentation must include the names of the farmer, farmers' market or roadside stand and the reviewer; date of review; nature of problem(s) detected or the observation that the farmer, farmers' market or roadside stand appears to be in compliance with FMNP requirements; a record of interviews with recipients, market managers and/or farmers; and the signature of the reviewer. The State agency shall do so after a reasonable delay when necessary to protect the identity of the reviewer(s) or the integrity of the investigation. After the farmer/farmers' market has been informed of any deficiencies detected by the monitoring visit, and instances where the farmer/farmers' market will be permitted to continue participation, the farmer/farmers' market shall provide plans as to how the deficiencies will be corrected. (4) At least every 2 years, the State agency shall review all local agencies within its jurisdiction. WIC State agency reviews of WIC local agencies, which include reviews of FMNP practices, may contribute to meeting the requirement that all local agencies be reviewed once every 2 years. (f) Control of FMNP coupons. (2) The State agency shall ensure that there is secure transportation and storage of unissued FMNP coupons. (3) The State agency shall design and implement a system of review of FMNP coupons to detect errors. At a minimum, the errors the system must detect are a missing recipient signature, a missing farmer and/or market identification, and redemption by a farmer outside of the valid date. The State agency shall implement procedures to reduce the number of errors in transactions, where possible. (g) Payment to farmers/farmers' markets. (h) Reconciliation of FMNP coupons. (2) The State agency shall use uniform FMNP coupons within its jurisdiction. (3) FMNP coupons must include, at a minimum, the following information: (i) The last date by which the recipient may use the coupon. This date shall be no later than November 30 of each year. (ii) A date by which the farmer or farmers' market must submit the coupon for payment. When establishing this date, State agencies shall take into consideration the date financial statements are due to the FNS, and allow time for the corresponding coupon reconciliation that must be done by the State agency prior to submission of financial statements. Currently, financial statements are due to FNS by January 30. (iii) A unique and sequential serial number. (iv) A denomination (dollar amount). (v) A farmer identifier for the redeeming farmer when agreements are between the State agency and the farmer. (vi) In those instances where State agencies have agreements with farmers' markets, there must be a farmer identifier on each coupon and a market identifier on the cover of coupons which are batched by the market manager for reimbursement. (i) Instructions to recipients. (1) A list of names and addresses of authorized farmers, farmers' markets and roadside stands at which FMNP coupons may be redeemed. (2) A description of eligible foods and the prohibition against cash change. (3) An explanation of their right to complain about improper farmer/farmers' market practices with regard to FMNP responsibilities and the process for doing so. (j) Recipients and farmer/farmers' market complaints. (k) Recipients and farmer/farmers' market sanctions. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49746, Sept. 27, 1995; 73 FR 65250, Nov. 3, 2008; 81 FR 66496, Sept. 28, 2016] § 248.11 Financial management system. (a) Disclosure of expenditures. (b) Internal controls. (c) Record of expenditures. (d) Payment of costs. (e) Identification of obligated funds. (f) Resolution of audit findings. (g) Reconciliation of food instruments. (h) Transfer of cash. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49747, Sept. 27, 1995; 81 FR 66496, Sept. 28, 2016] § 248.12 FMNP costs. (a) General Composition of allowable costs. (i) Food costs and administrative costs. (ii) Market development or technical assistance costs. (iii) Direct and indirect costs. (2) Costs allowable with prior approval. (3) Unallowable costs. (b) Specified allowable administrative costs. (1) The costs associated with the provision of nutrition education which meets the requirements of § 248.9 of this part. (2) The costs of FMNP coupon issuance, or recipient education covering proper coupon redemption procedures. (3) The cost of outreach services. (4) The costs associated with the food delivery process, such as printing FMNP coupons, processing redeemed coupons, and training market managers on the food delivery system. (5) The cost of monitoring and reviewing Program operations. (6) The cost of FMNP training. (7) The cost of required reporting and recordkeeping. (8) The cost of determining which local WIC sites will be utilized. (9) The cost of recruiting and authorizing farmers/farmers' markets to participate in the FMNP. (10) The cost of preparing contracts for farmers/farmers' markets and local WIC providers. (11) The cost of developing a data processing system for redemption and reconciliation of FMNP coupons. (12) The cost of designing program training and informational materials. (13) The cost of coordinating FMNP implementation responsibilities between designated administering agencies. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49747, Sept. 27, 1995; 81 FR 66496, Sept. 28, 2016; 83 FR 14174, Apr. 3, 2018] § 248.13 FMNP income. Program income means gross income the State agency earns from grant supported activities. It includes fees for services performed and receipts from the use or rental of real or personal property acquired with Federal grant funds, but does not include proceeds from the disposition of such property. The State agency shall retain Program income earned during the agreement period and use it for Program purposes in accordance with the addition method described in 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. Fines, penalties or assessments paid by local agencies or farmers/farmers' markets are also deemed to be FMNP income. The State agency shall ensure that the sources and applications of Program income are fully documented. [59 FR 11517, Mar. 11, 1994, as amended at 81 FR 66496, Sept. 28, 2016] § 248.14 Distribution of funds. (a) Conditions for receipt of Federal funds Matching of funds Match amount. (ii) Sources of matching contributions. (iii) Failure to match. (2) State Plan and agreement. (b) Distribution of FMNP funds to previously participating State agencies. (c) Ratable reduction. (d) Expansion of participating State agencies and establishment of new State agencies. (1) Of the remaining funds, 75 percent shall be made available to State agencies already participating in the FMNP that wish to serve additional recipients. If this amount is greater than that necessary to satisfy all State plans approved for additional recipients, the unallocated amount shall be applied toward satisfying any unmet need in paragraph (d)(2) of this section. (2) Of the remaining funds, 25 percent shall be made available to State agencies that have not participated in the FMNP in any prior fiscal year. If this amount is greater than that necessary to satisfy the approved State Plans for new States, the unallocated amount shall be applied toward satisfying any unmet need in paragraph (d)(1) of this section. The Department reserves the right not to fund every State agency with an approved State Plan. (3) In any fiscal year, any FMNP funds that remain unallocated after satisfying the requirements of paragraphs (d)(1) and (d)(2) of this section, shall be reallocated in accordance with paragraph (k) of this section. (e) Expansion for current State agencies. (1) Whether the State agency utilized at least 80 percent of its prior year food grant. States that did not spend at least 80 percent of their prior year food grant may still be eligible for expansion funding if, in the judgment of the Department, good cause existed which was beyond the management control of the State, such as severe weather conditions, or unanticipated decreases in participant caseload in the WIC Program. (2) Documentation supporting the funds expansion request as outlined in § 248.4(a)(19). (f) Funding of new State agencies. (g) Administrative funding. (h) Market development. (i) Transfer of funds. (j) Recovery of unused funds. (k) Reallocation of funds. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49747, Sept. 27, 1995; 60 FR 57148, Nov. 14, 1995; 64 FR 48076, Sept. 2, 1999; 73 FR 65251, Nov. 3, 2008; 81 FR 66496, Sept. 28, 2016] § 248.15 Closeout procedures. (a) General. (b) Grant closeout procedures. (1) FNS may disqualify a State agency's participation under the FMNP, in whole or in part, or take such remedies as may be 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. (2) FNS may disqualify the State agency or restrict its participation in the FMNP when both parties agree that continuation under the FMNP would not produce beneficial results commensurate with the further expenditure of funds. (3) Upon termination of a grant, the affected agency shall not incur new obligations after the effective date of the disqualification, 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 farmers/farmers' markets. (4) A grant closeout shall not affect the retention period for, or Federal rights of access to, FMNP records as specified in § 248.24(b) and (c). The closeout of a grant does not affect the responsibilities of the State agency regarding property or with respect to any FMNP income for which the State 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 State or local auditors. Audits performed in accordance with § 248.18 may serve as final audits providing such audits meet the needs of requesting agencies. If the grant is closed out without an 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. [59 FR 11517, Mar. 11, 1994, as amended at 81 FR 66496, Sept. 28, 2016] § 248.16 Administrative appeal of State agency decisions. (a) Requirements. (b) Postponement pending decision. (1) In a case where an adverse action affects a local agency or farmer/farmers' market, a postponement is appropriate where the State agency finds that recipients would be unduly inconvenienced by the adverse action. In addition, the State agency may determine other relevant criteria to be considered in deciding whether or not to postpone an adverse action. (2) In a case where a recipient appeals the termination of benefits, that recipient shall continue to receive FMNP benefits until the hearing official reaches a decision or the expiration of the current FMNP season, whichever occurs first. Applicants who are denied benefits may appeal the denial, but shall not receive benefits while awaiting the decision. (c) Procedure. (1) Written notification of the adverse action, the cause(s) for the action, and the effective date of the action, including the State agency's determination of whether the action shall be postponed under paragraph (b) of this section if it is appealed, and the opportunity for a hearing. Such notification shall be provided within a reasonable timeframe established by the State agency and in advance of the effective date of the action. (2) The opportunity to appeal the action within the time specified by the State agency in its notification of adverse action. (3) Adequate advance notice of the time and place of the hearing to provide all parties involved sufficient time to prepare for the hearing. (4) The opportunity to present its case and at least one opportunity to reschedule the hearing date upon specific request. The State agency may set standards on how many hearing dates can be scheduled, provided that a minimum of two hearing dates is allowed. (5) The opportunity to confront and cross-examine adverse witnesses. (6) The opportunity to be represented by counsel, or in the case of a recipient appeal, by a representative designated by the recipient, if desired. (7) The opportunity to review the case record prior to the hearing. (8) An impartial decision maker, whose decision as to the validity of the State agency's action shall rest solely on the evidence presented at the hearing and the statutory and regulatory provisions governing the FMNP. The basis for the decision shall be stated in writing, although it need not amount to a full opinion or contain formal findings of fact and conclusions of law. (9) Written notification of the decision in the appeal, within 60 days from the date of receipt of the request for a hearing by the State agency. (d) Continuing responsibilities. (e) Judicial review. (f) Additional appeals procedures for State agencies which authorize farmers' markets and not individual farmers. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49748, Sept. 27, 1995; 60 FR 57148, Nov. 14, 1995] Subpart F—Monitoring and Review of State Agencies § 248.17 Management evaluations and reviews. (a) General. (b) Responsibilities of FNS. (1) If FNS determines that the State agency has failed, without good cause, to demonstrate efficient and effective administration of its FMNP or has failed to comply with the requirements contained in this section or the State Plan, FNS may withhold an amount up to 100 percent of the State agency's administrative grant. (2) 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 § 248.20. Before carrying out any sanction against a State agency, the following procedures will be followed: (i) FNS will notify the chief departmental officer of the administering agency in writing of the deficiencies found and of FNS' intention to withhold administrative funds unless an acceptable corrective action plan is submitted by the State agency to FNS within 45 days after mailing of notification. (ii) The State agency shall develop a corrective action plan, including timeframes for implementation to address the deficiencies and prevent their future recurrence. (iii) If the corrective action plan is acceptable, FNS will notify the chief departmental officer of the administering agency in writing within 30 days of receipt of the plan. The letter will advise the State agency 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 has been taken, FNS will assess such action, and if necessary, 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. Compliance buys can be required if, during FNS management evaluations by regional offices, a State agency is found to be out of compliance with its responsibility to monitor and review farmers, farmers' markets and roadside stands. (v) If an acceptable corrective action plan is not submitted within 45 days, or if corrective action is not completed according to the schedule established in the corrective action plan, FNS may withhold the award of FMNP administrative funds. If the 45-day warning period ends in the fourth quarter of a fiscal year, FNS may elect not to withhold funds until the next fiscal year. FNS will notify the chief departmental officer of the administering State agency. (vi) If compliance is achieved before the end of the fiscal year in which the FMNP administrative funds are withheld, the funds withheld may be restored to the State agency. FNS is not required to restore funds withheld beyond the end of the fiscal year for which the funds were initially awarded. (c) Responsibilities of State agencies. (1) The State agency shall establish evaluation and review procedures and document the results of such procedures. The procedures shall include, but are not limited to: (i) Annual monitoring reviews of participating farmers, farmers' markets and roadside stands, including on-site reviews of a minimum of 10 percent of farmers, 10 percent of farmers' markets, and 10 percent of roadside stands, which includes those farmers, farmers' markets, and roadside stands identified as being the highest risk. First year of operation in the FMNP shall be considered a high-risk indicator. More frequent reviews may be performed as the State agency deems necessary. (ii) Conducting monitoring reviews of all local agencies within the State agency's jurisdiction at least once every 2 years. Monitoring of local agencies shall encompass, but not be limited to, evaluation of management, accountability, certification, nutrition education, financial management systems, and coupon management systems. WIC State agency reviews of local agencies conducted for the WIC Program may contribute to meeting the FMNP requirement that all local agencies be reviewed once every two years if the reviews include reviews of FMNP practices. When the WIC State agency conducts a review of the local agency outside of the FMNP season, a review of documents and procedural plans of the FMNP, rather than actual FMNP activities, is acceptable. (iii) Instituting the necessary follow-up procedures to correct identified problem areas. (2) On its own initiative or when required by FNS, the State agency shall provide special reports on FMNP activities, and take positive action to correct deficiencies in FMNP operations. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49748, Sept. 27, 1995; 73 FR 65251, Nov. 3, 2008] § 248.18 Audits. (a) Federal access to information. (b) State agency response. (c) Corrective action. (d) State sponsored audits. [59 FR 11517, Mar. 11, 1994, as amended at 81 FR 66496, Sept. 28, 2016] § 248.19 Investigations. (a) Authority. (b) Confidentiality. Subpart G—Miscellaneous Provisions § 248.20 Claims and penalties. (a) Claims against State agencies. (2) If FNS determines that any part of the FMNP funds received by a State agency; or coupons, were lost as a result of theft, embezzlement, 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 FMNP coupons 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 is authorized to establish claims against a State agency for unreconciled FMNP coupons. When a State agency can demonstrate that all reasonable management efforts have been devoted to reconciliation and 99 percent or more of the FMNP coupons issued have been accounted for by the reconciliation process, FNS may determine that the reconciliation process has been completed to satisfaction. (b) Interest charge on claims against State agencies. (c) Penalties. § 248.21 Procurement and property management. (a) Requirements. (b) Contractual responsibilities. (c) State regulations. (d) Property acquired with program funds. [59 FR 11517, Mar. 11, 1994, as amended at 81 FR 66496, Sept. 28, 2016] § 248.22 Nonprocurement debarment/suspension, drug-free workplace, and lobbying restrictions. The State agency shall ensure compliance with the requirements of the Department's regulations governing nonprocurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417), drug-free workplace (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace), and the Department's regulations governing restrictions on lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415 and part 418), where applicable. [81 FR 66497, Sept. 28, 2016] § 248.23 Records and reports. (a) Recordkeeping requirements. (1) Records shall include, but not be limited to, information pertaining to financial operations, FMNP coupon issuance and redemption, equipment purchases and inventory, nutrition education, and civil rights procedures. (2) All records shall be retained for a minimum of 3 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 3-year period, the records shall be kept until all issues are resolved, or until the end of the regular 3-year period, whichever is later. If FNS deems any of the FMNP records to be of historical interest, it may require the State agency to forward such records to FNS whenever the State agency is disposing of them. (3) Records for nonexpendable property acquired in whole or in part with FMNP 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 of the Comptroller General of the United States to inspect, audit, and copy. Any reports resulting from such examinations shall not divulge names of individuals. (b) Financial and recipient reports. (1) Number and type of recipients (Federal and non-Federal). (2) Value of coupons issued. (3) Value of coupons redeemed. (c) Source documentation. (d) Certification of reports. (e) Use of reports. [59 FR 11517, Mar. 11, 1994, as amended at 81 FR 66496, Sept. 28, 2016] § 248.24 Other provisions. (a) No aid reduction. et seq. (b) Statistical information. (c) Confidentiality. (d) Program evaluations. [59 FR 11517, Mar. 11, 1994, as amended at 76 FR 37983, June 29, 2011] § 248.25 FMNP 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, Guam, Hawaii, Idaho, Nevada, Oregon, Trust Territory of the Pacific Islands, the Northern Mariana Islands, Washington: U.S. Department of Agriculture, FNS, Western Region, 90 Seventh Street, Suite #10-100, San Francisco, California 94103. [59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49748, Sept. 27, 1995; 60 FR 57148, Nov. 14, 1995; 73 FR 65251, Nov. 3, 2008] § 248.26 OMB control number. The collecting of information requirements for part 248 have been approved by the Office of Management and Budget and assigned OMB control number 0584-0477. [60 FR 49748, Sept. 27, 1995]