[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR215.12]

[Page 77-78]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 215--SPECIAL MILK PROGRAM FOR CHILDREN--Table of Contents
 
Sec. 215.12  Claims against schools or child-care institutions.

    (a) State agencies, or FNSROs where applicable, shall disallow any 
portion of a claim and recover any payment made to a School Food 
Authority or child-care institution that was not properly payable under 
this part. State agencies will use their own procedures to disallow 
claims and recover overpayments already made.
    (b) [Reserved]
    (c) The State Agency may refer any matter in connection with this 
section to FNSRO and CND for determination of the action to be taken.
    (d) Each State agency shall maintain all records pertaining to 
action taken under this section. Such records shall be retained for a 
period of three years after the date of the submission of the final 
Financial Status Report, except that, if audit findings have not been 
resolved, the records shall be retained beyond the three-year period as 
long as required for the resolution of the issues raised by the audit.
    (e) If CND does not concur with the State Agency action in paying a 
claim or a reclaim, or in failing to collect an overpayment FNSRO shall 
assert a claim against the State Agency for the amount of such claim, 
reclaim or overpayment. In all such cases, the State Agency shall have 
full opportunity to submit to CND evidence or information concerning the 
action taken. If in the determination of CND, the State Agency's action 
was unwarranted, the State Agency shall promptly pay to FNS the amount 
of the claim, reclaim, or overpayment.
    (f) The amounts recovered by the State Agency from schools and 
child-care institutions may be utilized, first, to make reimbursement 
payments for

[[Page 78]]

milk served during the fiscal year for which the funds were initially 
available, and second, to repay any State funds expended in the 
reimbursement of claims under the program and not otherwise repaid. Any 
amounts recovered which are not so utilized shall be returned to FNS in 
accordance with the requirements of Sec. 215.5(c).
    (g) With respect to schools or child-care institutions in which 
FNSRO administers the Program, when FNSRO disallows a claim or a portion 
of a claim, or makes a demand for refund of an alleged overpayment, it 
shall notify the School Food Authority or child-care institutions of the 
reasons for such disallowance or demand and the School Food Authority or 
child-care institutions shall have full opportunity to submit evidence 
or to file reclaim for any amount disallowed or demanded in the same 
manner afforded in this section to schools or child-care institutions 
administered by State Agencies.
    (h) The Secretary shall have the authority to determine the amount 
of, to settle, and to adjust any claims arising under the Program, and 
to compromise or deny such claim or any part thereof. The Secretary 
shall also have the authority to waive such claims if the Secretary 
determines that to do so would serve the purposes of the Program. This 
provision shall not diminish the authority of the Attorney General of 
the United States under section 516 of Title 28, U.S. Code, to conduct 
litigation on behalf of the United States.


(47 FR 745, Jan. 7, 1982 (44 U.S.C. 3506; secs. 804, 816 and 817, Pub. 
L. 97-35; 95 Stat. 521-535 (42 U.S.C. 1753, 1756, 1759, 1771 and 1785))

[32 FR 12587, Aug. 31, 1967, as amended by Amdt. 5, 37 FR 14686, July 
22, 1972; Amdt. 13, 39 FR 28418, Aug. 7, 1974; Amdt. 14, 41 FR 31175, 
July 27, 1976; 47 FR 745, Jan. 7, 1982; Amdt. 24, 47 FR 14133, Apr. 2, 
1982]