[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: 7CFR252.6]

[Page 474]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 252--NATIONAL COMMODITY PROCESSING PROGRAM--Table of Contents
 
Sec. 252.6  Miscellaneous provisions.

    (a) Improper distribution or loss of or damage to donated food. If a 
processor improperly distributes or uses any donated food, or causes 
loss of or damage to a donated food through its failure to provide 
proper storage, care, or handling, FNS shall require the processor to 
pay to the Department the value of the donated food as determined by the 
Department.
    (b) Disposition of damaged or out-of-condition food. Donated food 
which is found to be damaged or out-of-condition and is declared unfit 
for human consumption by Federal, State, or local health officials, or 
by any other inspection services or persons deemed competent by the 
Department, shall be disposed of in accordance with instructions of the 
Department. This instruction shall direct that unfit donated food be 
sold in a manner prescribed by the Department with the net proceeds 
thereof remitted to the Department. Upon a finding by the Department 
that donated food is unfit for human consumption at the time of delivery 
to a recipient agency and when the Department or appropriate health 
officials require that such donated food be destroyed, the processor 
shall pay for any expenses incurred in connection with such donated food 
as determined by the Department. The Department may, in any event, 
repossess damaged or out-of-condition donated food.
    (c) FNS sales verification. FNS may conduct a verification of 
processor reported sales utilizing a statistically valid sampling 
technique. If, as a result of this verification, FNS determines that the 
value of the donated food has not been passed on to recipient agencies 
or if end products have been improperly distributed, FNS may assert a 
claim against the processor. This claim may include a projection of the 
verification sample to the total NCP sales reported by the processor.
    (d) Sanctions. Any processor or recipient agency which has failed to 
comply with the provisions of this part or any instructions or 
procedures issued in connection herewith, or any agreements entered into 
pursuant hereto, may, at the discretion of the Department, be 
disqualified from further participation in the NCP Program. 
Reinstatement may be made at the option of the Department. 
Disqualification shall not prevent the Department from taking other 
action through other available means when considered necessary, 
including prosecution under applicable Federal statutes.
    (e) Embezzlement, misuse, theft, or obtainment by fraud of 
commodities and commodity related funds, assets, or property in child 
nutrition programs. Whoever embezzles, willfully misapplies, steals, or 
obtains by fraud commodities donated for use in the NCP Program, or any 
funds, assets, or property deriving from such donations, or whoever 
receives, conceals, or retains such commodities, funds, assets, or 
property for his own use or gain, knowing such commodities, funds, 
assets, or property have been embezzled, willfully misapplied, stolen, 
or obtained by fraud, shall be subject to Federal criminal prosecution 
under section 12(g) of the National School Lunch Act, as amended, or 
section 4(c) of the Agriculture and Consumer Protection Act of 1973, as 
amended. For the purpose of this paragraph ``funds, assets, or 
property'' include, but are not limited to, commodities which have been 
processed into different end products as provided for by this part, and 
the containers in which commodities have been received from the 
Department.