[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR247.30]



[Page 418-419]

 

                          TITLE 7--AGRICULTURE

 

    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents

 

Sec. 247.30  Claims.



    (a) What happens if a State or local agency misuses program funds? 

If FNS determines that a State or local agency has misused program funds 

through negligence, fraud, theft, embezzlement, or other causes, FNS 

must initiate and pursue a claim against the State agency to repay the 

amount of the misused funds. The State agency will be given the 

opportunity to contest the claim. The State agency is responsible for 

initiating and pursuing claims against subdistributing and local 

agencies if they misuse program funds.

    (b) What happens if a State or local agency misuses program 

commodities? If a State or local agency misuses program commodities, FNS 

must initiate a claim against the State agency to recover the value of 

the misused commodities. The procedures for pursuing claims resulting 

from misuse of commodities are detailed in Sec. 250.15(c) of this 

chapter. Misused commodities include commodities improperly distributed 

or lost, spoiled, stolen, or damaged as a result of improper storage, 

care, or handling. The State agency is responsible for initiating and 

pursuing claims against subdistributing agencies, local agencies, or 

other agencies or organizations if they misuse program commodities. The 

State agency must use funds recovered as a result of claims for 

commodity losses in accordance with Sec. 250.15(c) of this chapter.

    (c) What happens if a participant improperly receives or uses CSFP 

benefits through fraud? The State agency must



[[Page 419]]



ensure that a local agency initiates a claim against a participant to 

recover the value of CSFP commodities improperly received or used if the 

local agency determines that the participant, or the parent or caretaker 

of the participant, fraudulently received or used the commodities. For 

purposes of this program, fraud includes intentionally making false or 

misleading statements, or intentionally withholding information, to 

obtain CSFP commodities, or the selling or exchange of CSFP commodities 

for non-food items. The local agency must advise the participant of the 

opportunity to appeal the claim through the fair hearing process, in 

accordance with Sec. 247.33(a). The local agency must also disqualify 

the participant from CSFP for a period of up to one year, unless the 

local agency determines that disqualification would result in a serious 

health risk, in accordance with the requirements of Sec. 247.20(b).

    (d) What procedures must be used in pursuing claims against 

participants? The State agency must establish standards, based on a 

cost-benefit review, for determining when the pursuit of a claim is 

cost-effective, and must ensure that local agencies use these standards 

in determining if a claim is to be pursued. In pursuing a claim against 

a participant, the local agency must:

    (1) Issue a letter demanding repayment for the value of the 

commodities improperly received or used;

    (2) If repayment is not made in a timely manner, take additional 

collection actions that are cost-effective, in accordance with the 

standards established by the State agency; and

    (3) Maintain all records regarding claims actions taken against 

participants, in accordance with Sec. 247.29.



(Approved by the Office of Management and Budget under control number 

0584-0293)