[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: 7CFR250.13]



[Page 454-458]

 

                          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. 250.13  Distribution and control of donated foods.



    (a) Availability and use of donated foods--(1) General. (i) Donated 

foods shall be available only for distribution and use in accordance 

with the provisions of this part and, with respect to distribution to 

households on all or part of an Indian reservation, of parts 253 and 254 

of this chapter.

    (ii) Donated foods shall not be sold, exchanged or otherwise 

disposed of without the approval of the Department.

    (iii) Donated foods which are provided as part of an approved food 

package or authorized level of assistance may be transferred between 

like recipient agencies only with prior authorization of the 

distributing agency. Donated foods which are provided in addition to the 

State's authorized level of assistance may be transferred between 

recipient agencies which are eligible to receive such foods with the 

prior authorization of the distributing agency. However, the transfer of 

donated foods between unlike recipient agencies (e.g., from schools to 

charitable institutions), which have been provided as part of an 

approved food package or authorized level of assistance, must be 

approved by the appropriate FNSRO.

    (iv) Food donated under section 32 of Public Law 74-320 (7 U.S.C. 

612c) may also be transferred by recipient agencies to eligible 

recipient agencies which are distributing donated foods under part 251 

of this chapter. A transfer between recipient agencies and eligible 

recipient agencies may be made only with the prior approval of the 

distributing agency and the State agency responsible for administering 

TEFAP.

    (v) All transfers of donated foods shall be documented. Such 

documentation shall be maintained in accordance with the recordkeeping 

requirements in Sec. Sec. 250.16 and 251.10(a) of this chapter.

    (2) Quantities. (i) The quantity of donated foods to be made 

available for donation under this part shall be determined in accordance 

with the pertinent legislation and the program obligations of the 

Department, and shall be such as can be effectively distributed to 

further the objectives of the pertinent legislation.

    (ii) Donated foods shall be requested and distributed only in 

quantities which can be consumed without waste in providing food 

assistance for persons eligible under this part. Distributing agencies 

shall impose similar restrictions on recipient agencies.

    (3) Minimum donations. Foods shall be donated only in such 

quantities as will protect the lower truck load freight rate, except as 

the Department determines to be in the best interest of the program.

    (4) Allocations. As foods become available for donation, FNS shall 

notify distributing agencies regarding the donated foods, the class or 

classes of recipient agencies or recipients eligible to receive them, 

and any special terms and conditions of donation and distribution which 

attach to a particular donated food, in addition to the general terms 

and conditions set forth herein.

    When a commodity is available in limited quantities, the Department 

shall allocate such commodities among the States using allocation 

percentages which are based on appropriate participation data for the 

program designated to receive the commodity.



[[Page 455]]



    (5) Commodity value. Distributing agencies shall establish a value 

for each commodity for school food authorities and nonresidential child 

and adult care institutions for purposes of offering and crediting each 

recipient agency with the correct amount of commodities to fulfill 

planned commodity assistance levels (i.e., volume of commodities 

expected to be needed in order to meet the anticipated assistance at the 

local level, as determined by the distributing agency). Each commodity 

value shall be used consistently throughout the State to value 

commodities. The distributing agencies shall document and maintain on 

file for FNS review the method used to determine commodity values. 

Distributing agencies shall notify recipient agencies of the cost-per-

pound used to value commodities at the time a commodity is offered to 

recipient agencies. If the cost used to credit a commodity differs from 

the cost used to offer a commodity, distributing agencies shall also 

advise recipient agencies of the cost used to credit a commodity. To 

value a commodity offered to a recipient agency and to credit a 

commodity towards a recipient agency's planned commodity assistance 

level, distributing agencies shall use one of the following: The actual 

cost-per-pound data used to charge a State's commodity entitlement; the 

estimated cost-per-pound data provided by the Department; or the USDA 

commodity file cost as of a specified date. Actual cost data shall be 

defined as the cost-per-pound for an individual commodity charged to a 

State's entitlement on the Entitlement Food Order Report, which is based 

on the USDA purchase cost. Estimated cost data shall be defined as the 

cost provided by USDA on commodity survey memoranda. The USDA commodity 

file cost shall be defined as the cost that is listed for a commodity as 

of a date specified by the distributing agency. For purposes of 

complying with OMB Circular A-133, Audits of States, Local Governments, 

and Non-Profit Organizations on inventory valuation, recipient agencies 

shall comply with guidance provided by the Food and Nutrition Service. 

(For availability of OMB Circulars referenced in this paragraph (a), see 

5 CFR 1310.3.)

    (6) Announcement and delivery of commodities. The Department shall 

make every reasonable effort to arrange commodity deliveries based on 

information obtained from distributing agencies. However, the Department 

shall not be held fiscally responsible for any delay in delivering or 

for nondelivery of donated foods due to any cause. Distributing agencies 

shall maintain monthly distribution schedules which provide for 

equitable and reliable deliveries to recipient agencies, recognize local 

hours of operation, holidays and vacations and, whenever possible, other 

special needs of recipient agencies. Upon request by the recipient 

agency, the distributing agency may make deliveries less frequent than 

monthly when the distributing agency determines that monthly service is 

not cost effective, due to distance or the size of a food order, or 

other necessary reasons, such as seasonal school closures. Distributing 

agencies shall notify recipient agencies of:

    (i) General USDA purchase information at least quarterly;

    (ii) Anticipated State delivery schedules at least quarterly, 

including the types and quantities of commodities available; and

    (iii) Changes in delivery schedules when such changes affect the 

recipient agency.

    (7) Demonstrations and tests. Notwithstanding any other provision of 

this part, a quantity of any food donated for use by any recipient 

agency or recipient may be transferred by the distributing agency or by 

the recipient agency to bona fide experimental or testing agencies, or 

for use in workshops, or for demonstrations or tests relating to the 

utilization of such donated food by the recipient agency or recipient. 

No such transfer by any recipient agency shall be made without the 

approval of the appropriate distributing agency.

    (b) Processing and other costs. The Department shall pay such 

processing, reprocessing, transporting, handling and other charges 

accruing up to the time of transfer of title to distributing agencies as 

is deemed in the best interest of the Department.



[[Page 456]]



    (c) Transfer of title. Title to donated foods shall pass to 

distributing agencies upon their acceptance of donated foods at time and 

place of delivery, limited, however, by the obligation of the 

distributing agency to use such donated foods for the purposes and upon 

the terms and conditions set forth in this part.

    (d) Distribution of donated foods to recipient agencies or 

recipients--(1) Distribution. Donated foods shall be distributed only to 

recipient agencies and recipients eligible to receive them under this 

part (see subpart D). Distributing agencies shall require that welfare 

agencies and disaster organizations distribute donated foods only to 

recipients eligible to receive them under this part. It shall not be 

deemed a failure to comply with the provisions of this part if recipient 

agencies serve meals containing donated foods to persons other than 

those who are eligible under this part, when such persons share common 

preparation, serving or dining facilities with eligible persons (needy 

persons, children, participants in nutrition programs for the elderly) 

and at least one of the following is true:

    (i) Such other persons are common beneficiaries with the eligible 

persons of the program of the recipient agency, or

    (ii) Such other persons are few in number compared to the eligible 

persons and receive their meals as an incident of their service to the 

eligible persons.



Such other persons include, but are not limited to teachers, disaster 

relief workers, and staff members. Nothing in this paragraph shall be 

construed as authorizing allocation or issuance of donated foods to 

recipient agencies in greater quantity than that authorized for the 

assistance of persons eligible under this part.

    (2) Normal food expenditures. Section 416 donated foods shall not be 

distributed to any recipient agencies or recipients whose normal food 

expenditures are reduced because of the receipt of donated foods.

    (e) Improper distribution, loss of or damage to donated foods. (1) 

If a distributing agency improperly distributes or uses any donated 

foods or causes loss of or damage to a donated food through its failure 

to provide proper storage, care or handling, the provisions set forth in 

Sec. 250.15(c) shall apply.

    (2) In instances when it is determined by a distributing agency that 

a claim exists against a subdistributing agency, recipient agency, 

warehouse, carrier, processor or other person, the distributing agency 

shall pursue claims in accordance with Sec. 250.15(c).

    (f) Disposition of damaged or out-of-condition foods. Donated foods 

which are found to be damaged or out-of-condition and are declared unfit 

for human consumption by Federal, State or local health officials, or by 

other inspection services or persons deemed competent by the Department, 

shall be disposed of in accordance with instructions of the Department. 

Such instructions may direct that unfit donated food be:

    (1) Sold in a manner prescribed by the Department with the net 

proceeds thereof remitted to the Department;

    (2) Sold in a manner prescribed by the Department with the proceeds 

thereof retained for use in accordance with the provisions of Sec. 

250.15(f);

    (3) Used in such manner as will serve a useful purpose as determined 

by the Department; or

    (4) Destroyed in accordance with applicable sanitation laws and 

regulations.



Upon a finding by the Department that donated food are unfit for human 

consumption at the time of delivery to the distributing agency and when 

the Department or appropriate health officials require that such donated 

foods be destroyed, the Department may pay to the distributing agency 

any expenses incurred in connection with such donated foods as 

determined by the Department. The Department may, in any event, 

repossess damaged or out-of-condition donated foods.

    (g) Replacement of damaged commodities. (1) The Department shall 

replace donated foods received by distributing or recipient agencies 

when:

    (i) The distributing agency documents that the donated foods were 

stale, spoiled, out of condition or not in compliance with USDA 

specifications at the time they were delivered by the Department;



[[Page 457]]



    (ii) The donated foods have been provided as part of the State's 

authorized level of assistance (entitlement) as established by law; or, 

when the donated foods have been provided in addition to the State's 

entitlement, but the total amount of the specific donated food which the 

distributing agency can order is limited by the Department;

    (iii) The loss is reported to the FNSRO within three months of the 

date the donated foods were received in the State, except that for 

canned commodities the reporting deadline shall be six months after 

receipt;

    (iv) A signed consignee receipt or acceptable written documentation 

of delivery is submitted to the FNSRO; and

    (v) At the request of the Department, the product has been 

reinspected and has been determined to be stale, spoiled, out of 

condition or not in compliance with USDA specifications.

    (2) In instances in which a recipient agency seeks replacement of 

donated foods, the recipient agency shall submit the information listed 

above to its distributing agency. The distributing agency shall promptly 

submit the information to the FNSRO.

    (3) Replacement by the vendor shall be made with either the same or 

similar food agreed to by the Department. Physical replacement shall be 

on a per-pound or per-case basis. In rare instances, and only with the 

approval of the Department, distributing agency and recipient agency, 

vendor replacement will be made with a cash payment to the recipient or 

distributing agency. Any such cash payments shall be used to purchase 

replacement commodities which are the same or similar to the original 

commodities. Cash payments shall be made on the basis of the dollar 

value established by the Department of the donated food at the time the 

product was delivered or the cost to the Department for replacement, 

whichever is higher.

    (4) Replacement by the Department shall be with either the same or 

similar food or by crediting the State's entitlement or cap. Physical 

replacement shall be on a per-pound or per-case basis. Entitlement or 

cap crediting shall be equal to the dollar value or the number of pounds 

which was deducted from the State's entitlement or cap for that 

shipment. The Department shall arrange for delivery of the replacement 

donated foods when the quantities to be delivered are sufficient to make 

it cost effective. Once the Department has replaced the donated foods, 

the distributing agency shall make arrangements for providing 

replacement donated foods to the recipient agency which incurred the 

loss.

    (5) In instances in which it is determined that the donated foods 

were in good condition at the time they were delivered by the 

Department, the cost of the reinspection shall be borne by the 

distributing agency and the distributing agency shall follow the claims 

procedures contained in Sec. 250.15(c) of this part and FNS Instruction 

410-1, Non-Audit Claims--FNS Distribution Program.

    (h) Redonations. Whenever a distributing agency has any donated food 

on hand which it cannot efficiently utilize, it shall immediately make a 

request to the appropriate FNSRO, in writing, for instructions as to the 

disposition of such donated food. Distributing agencies requesting 

authority from the Department to make redonation of any donated foods 

shall, upon the Department's request, have such donated foods federally 

inspected. Expenditures incurred by the distributing agency as a result 

of redonation shall be handled in accordance with Sec. 250.15(e).

    (i) Embezzlement, misuse, theft, or obtainment by fraud of donated 

foods and donated food-related funds, assets, or property. 

Notwithstanding paragraph (c) of this section concerning transfer of 

title to donated foods, whoever embezzles, willfully misapplies, steals, 

or obtains by fraud, donated foods or any funds, assets, or property 

deriving from donated foods or whoever receives, conceals, or retains 

such donated foods, funds, assets, or property for his/her own use or 

gain, knowing such donated foods, 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 (42 U.S.C. 1760(g)) or section 

4(c) of the Agriculture and Consumer Protection Act of 1973, as amended 

(7 U.S.C. 612c note).



[[Page 458]]



For the purpose of this paragraph ``funds, assets, or property'' 

include, but are not limited to funds accruing from the sources 

identified in Sec. 250.15(f) (1) and (2), donated foods which have been 

processed into different end products as provided for under subpart C of 

this part, and the containers in which donated foods have been received 

from the Department. Distributing agencies shall immediately notify 

FNSRO of any suspected violation of section 12(g) or section 4(c) to 

allow the Department, in conjunction with the U.S. Department of 

Justice, to determine whether Federal criminal prosecution under section 

12(g) or section 4(c) is warranted. Prosecution of violations by the 

Federal Government shall not relieve any distributing agency of its 

obligation to obtain recovery for improperly distributed or lost donated 

foods, as required by Sec. 250.15(c).

    (j) Commodity specifications. Distributing agencies shall make 

summaries of commodity specifications available to recipient agencies 

upon request.

    (k) Commodity acceptability reports. To ensure that the Department 

is kept apprised of the commodities and packaging that are preferred by 

recipients and participating agencies, information shall be collected as 

follows:

    (1) Information collection. Distributing agencies shall obtain 

information from recipient agencies which reflects:

    (i) The types and forms of donated foods that are most useful to 

recipients;

    (ii) Commodity specification recommendations; and

    (iii) Requests for options regarding package sizes and forms of 

commodities.

    (2) Samples and representation. The distributing agency shall 

collect information from recipient agencies from each of the following 

program categories: The National School Lunch Program, the Child and 

Adult Care Food Program, the Nutrition Program for the Elderly, the 

Commodity Supplemental Food Program, and the Food Distribution Program 

on Indian Reservations. At a minimum, distributing agencies shall obtain 

this information from a sample of at least 10 percent or 100 recipient 

agencies in each program category, whichever is less. To ensure that the 

sample is representative of all recipient agencies, distributing 

agencies shall consider the size and geographic location of all 

recipient agencies within the State and alternate among them so that 

over time each recipient agency is provided an opportunity to express 

its views. Distributing agencies are encouraged to extract information 

regarding commodity acceptability from all available sources.

    (3) Timeframes for submission. Distributing agencies shall submit 

commodity acceptability reports to the appropriate FNSRO by April 30th 

of each year on form FNS-663.



[53 FR 20426, June 3, 1988, as amended at 53 FR 22469, June 16, 1988; 53 

FR 27475, July 21, 1988; 58 FR 39120, July 22, 1993; 62 FR 53730, Oct. 

16, 1997; 64 FR 72902, Dec. 29, 1999; 67 FR 65015, Oct. 23, 2002]