[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR250.16]

[Page 455-456]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 250--DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION--Table of Contents
 
                 Subpart B--General Operating Provisions
 
Sec. 250.16  Maintenance of records.

    (a) General requirements. (1) Accurate and complete records shall be 
maintained with respect to the receipt, distribution/use and inventory 
of donated foods including:
    (i) End products processed from donated foods and
    (ii) The determination made as to liability for any improper 
distribution, use of, loss of, or damage to, such foods and the results 
obtained from the pursuit of claims by the distributing agency.

Such records shall also be maintained with respect to the receipt and 
disbursement of funds arising from the operation of the distribution 
program, including the determination as to the amount of payments to be 
made by any processor, upon termination of processing contracts.
    (2) Distributing agencies shall require all subdistributing agencies 
to maintain accurate and complete records with respect to the receipt, 
distribution/disposal, and inventory of donated foods, including end 
products processed from donated foods. Subdistributing agencies and 
recipient agencies must document any funds that arise from the operation 
of the distribution program, including refunds made to recipient 
agencies by a processor in accordance with Sec. 250.30(k). Further, 
these documents should allow

[[Page 456]]

an independent determination of the specific accounts that benefit from 
these funds.
    (3) Unless a distributing agency maintains an offer-and-acceptance 
system in accordance with Sec. 250.48(e), the distributing agency shall 
maintain accurate and complete records with respect to amounts and value 
of commodities refused by school food authorities. School food 
authorities shall also be required to maintain such records of refusals.
    (4) Each processor, food service management company, warehouse, or 
other entity which contracts with a distributing agency, subdistributing 
agency or recipient agency shall be required to keep accurate and 
complete records with respect to the receipt, distribution/disposal, 
storage and inventory of such foods similar to those required of 
distributing agencies under this paragraph. Where donated foods have 
been commingled with commercial foods, the processor shall maintain 
records which permit an accurate determination of the donated-food 
inventory. The processor shall also be required to keep formula, 
recipes, daily or batch production records, loadout sheets, bills of 
lading, and other processing and shipping records to substantiate the 
use made of such foods and their subsequent redelivery, in whatever 
form, to any distributing agency, subdistributing agency or recipient 
agency. Processors must maintain records which will permit a 
determination regarding compliance with the contracting provisions 
required by Sec. 250.30(f) (3) and (4) as well as maintain records used 
as the basis for compiling the processor performance reports required by 
Sec. 250.30(m).
    (5) All recipient agencies shall be required to keep accurate and 
complete records showing the data and method used to determine the 
number of eligible persons served by that agency.
    (6) Failure by a distributing agency, subdistributing agency, 
recipient agency, processor, food service management company, warehouse 
or other entity to maintain records required by this Section shall be 
considered prima facie evidence of improper distribution or loss of 
donated foods and the agency, processor or entity shall be subject to 
the provisions of Sec. 250.13(e).
    (b) Length of maintenance. All records required by this Section 
shall be retained for a period of three years from the close of the 
fiscal year to which they pertain. However, in instances when claims 
action and/or audit findings have not been resolved, the records shall 
be retained as long as required for the resolution of such action or 
findings.

[53 FR 20426, June 3, 1988, as amended at 67 FR 65015, Oct. 23, 2002]