[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: 7CFR274.9]

[Page 800]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 274--ISSUANCE AND USE OF COUPONS--Table of Contents
 
Sec. 274.9  Closeout of a coupon issuer.

    (a) Definition of responsibilities. Whenever the services of a 
coupon issuer or bulk storage point are terminated, the State agency 
shall perform the responsibilities described below. If a coupon issuer 
or bulk storage point has more than one functioning unit and one of 
these facilities is terminated, the coupon issuer or bulk storage point 
shall fulfill the responsibilities described in paragraphs (b) and (c) 
of this section. The coupon issuer or bulk storage point shall notify 
the State agency of the pending termination of any of its services prior 
to the actual termination. The State agency shall promptly notify FNS as 
provided in Sec. 274.1(d).
    (b) Closeout accountability. The State agency shall perform a 
closeout audit of a coupon issuer or bulk storage point within 30 days 
of termination of the issuance or storage point. The State agency shall 
report the findings of the audit to FNS immediately upon its completion. 
If the audit determines that the final Form FNS-250 is incorrect, the 
State agency shall promptly provide a corrected report to FNS.
    (c) Transfer of coupon inventory. (1) Prior to the transfer of 
coupon inventory to another coupon issuer or bulk storage point, the 
State agency shall perform an actual physical count of coupons on hand.
    (2) The State agency shall transfer the inventory to another coupon 
issuer or bulk storage point, preferably within the same project area. 
The transfer of coupons shall be properly reported and documented by 
both the point being terminated and the point receiving the inventory.
    (d) Maintenance of participant service. (1) At least 30 days before 
actual termination of a coupon issuer, the State agency shall notify 
project area participants of the impending closure. Notification shall 
include identification of alternative issuance locations and available 
public transportation. The State agency shall post notices at the 
offices of the coupon issuer of the impending closure and may use mass 
media or notices with allotments to advise participants about the 
expected closure of the issuance office.
    (2) If closure of the issuer will affect a substantial portion of 
the caseload or a specific geographic area, the State agency shall take 
whatever action is necessary to maintain participant service without 
interruption.
    (3) If a coupon issuer or bulk storage point is to be closed for 
noncompliance with contractual requirements and alternative issuance 
facilities or systems are not readily available, the State agency may 
continue to use the coupon issuer or bulk storage point for a limited 
time. In this situation, the State agency shall perform weekly onsite 
reconciliations of coupon issuance. The State agency shall continue to 
actively seek other issuance or storage alternatives.