[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: 7CFR253.11]



[Page 542-544]

 

                          TITLE 7--AGRICULTURE

 

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

 

PART 253_ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR HOUSEHOLDS 

ON INDIAN RESERVATIONS--Table of Contents

 

Sec. 253.11  Administrative funds for State agencies.



    (a) Payments. Within the limitation of funds available to carry out 

the provisions of this part, FNS shall, beginning with fiscal year 1980, 

make available to each State agency 75 percent of approved 

administrative costs. Any approval for payment of funds in excess of 75 

percent shall be based on compelling justification that such additional 

amounts are necessary for the effective operation of the Food 

Distribution Program on an Indian reservation. Compelling justification 

may include, but not be limited to, such factors as the need for a 

larger Federal contribution during a State agency's first year of 

operation of the program, and the need to assure that no State agency 

currently operating the program receives a level of funding that would 

cause a diminution of program services. Administrative costs must be 

included in annual or revised budget information submitted by the State 

agency to FNS for approval prior to the contribution of Federal funds. 

Administrative costs must be allowable under part 277 of this chapter.

    (b) Use of funds by State agencies. Any funds received under this 

section shall be used for any costs which are allowable under part 277 

of this chapter and which are incurred in operating the Food 

Distribution Program for households on a reservation. The value of 

services rendered by volunteers, part 277 notwithstanding, shall be 

allowable to meet the matching administrative costs requirements for the 

Food Distribution Program. In no event shall such funds be used to pay 

any portion of such expenses if reimbursement or payment therefor is 

claimed or made available from any other Federal source. State agencies 

shall also adhere to the provisions of part 277 of this chapter, as 

apply to the Food Distribution Program, which establish:

    (1) Uniform requirements for the adminstration of funds to State 

agencies; and

    (2) Principles for determining costs applicable to activities 

assisted by the Food Stamp Program funds provided to State agencies. The 

provisions of part 277 are generally adaptable to this section and the 

appropriate provisions shall be used in complying with paragraphs (b) 

and (f) of this section.

    (c) Application for funds. (1) Any State agency administering a Food 

Distribution Program that desires to receive administrative funds under 

this section shall submit form SF-424, ``Application for Federal 

Assistance,'' to the appropriate FNS Regional Office at least three 

months prior to the beginning of a Federal fiscal year. The application 

shall include budget information, reflecting by category of expenditure 

the State agency's best estimate of the total amount to be expended in 

the administration of the program during the fiscal year. FNS may 

require that detailed information be submitted by the



[[Page 543]]



State agency to support or explain the total estimated amounts shown for 

each budget cost category. As required by 7 CFR part 3015, Subpart V, 

agencies of State government shall submit the application for Federal 

assistance to the State clearinghouse before submitting it to the FNSRO. 

ITOs shall not be subject to this requirement.

    (2) Approval of the application by FNS shall be a prerequisite to 

the payment of any funds to State agencies.

    (d) Availability of funds. (1) FNS shall review and evaluate the 

budget information submitted by the State agency in relationship to the 

State agency's plan of operation and any other factors which may be 

relevant to FNS' determination as to whether the estimated expenditures 

itemized by budget category are reasonable and justified. FNS shall give 

written notification to the State agency of (i) its approval or 

disapproval of any or all of the itemized expenditures, (ii) the amount 

of funds which will be made available, and (iii) the period for which 

funds are available.

    (2) FNS shall review and evaluate applications submitted by State 

agencies for administrative funds available under this section in the 

following order of priority and shall give preference in making payments 

of funds under this section in the same order of priority:

    (i) Applications from State agencies which desire to continue a Food 

Distribution Program now in operation,

    (ii) Applications from State agencies, in the order received, which 

FNS determines are immediately capable of effectively and efficiently 

administering the Program, and

    (iii) Applications from other States agencies, in the order 

received.

    (e) Method of payment to State agencies. (1) Payments are made to 

State agencies through a Letter of Credit or an advance by Treasury 

check. The Letter of Credit funding method shall be used by FNS except 

when the advances to be made within a 12 month period are estimated to 

be less than $120,000. However, FNS may, at its option, reimburse a 

State agency by Treasury check regardless of the amount in response to a 

valid claim submitted by the State agency.

    (2) The Letter of Credit funding method shall be done in conjunction 

with Treasury Department procedures, Treasury Circular No. 1075 and 

through an appropriate Treasury Regional Disbursing Office (RDO). The 

Standard Form 183, ``Request for Payment on Letter of Credit and Status 

of Funds Report,'' shall be correctly prepared and certified by a duly 

appointed official of the State for requesting payment from an RDO.

    (3) The advance by Treasury check method shall be done by use of the 

Standard Form 270, ``Request for Advance or Reimbursement,'' and 

procedures associated with its use. State agencies receiving payments 

under this method may request payments before cash outlays are made.

    (4) Any State agency receiving payment under the Letter of Credit 

method or the advance by Treasury check method shall have in place and 

in operation, a financial management system which meets the standards 

for fund control and accountability prescribed in part 277 of this 

chapter, as amended. The State agency shall demonstrate on a continuing 

basis its willingness and ability to have and to function within 

procedures that will minimize the time lapse between the transfer of 

funds and its disbursement to meet obligations. For any State agency 

which does not meet the requirement of this paragraph, the reimbursement 

by Treasury check method shall be the preferred method for FNS to make 

payments to that State agency.

    (f) Accounting for funds. Each State agency which receives 

administrative funds under this section shall establish and maintain an 

effective system of fiscal control and accounting procedures. 

Expenditures and accountability of such funds shall be in accordance 

with the appropriate provisions of part 277. The accounting procedures 

maintained by the State agency shall be such as to accurately reflect 

the receipt, expenditure and current balance of funds provided by FNS 

and to facilitate the prompt preparation of reports required by FNS. The 

accounting procedures shall also provide for segregation of costs 

specifically identifiable to the Food Distribution Program from any 

other costs incurred by the State



[[Page 544]]



agency. Any budget revisions by a State agency which require the 

transfer of funds from an approved cost category to another shall be in 

accordance with the budget revision procedures set forth in OMB Circular 

No. A-102, Attachment K, and shall be approved by FNS prior to any 

transfer of funds.

    (g) Return, reduction, and reallocation of funds. (1) FNS may 

require State agencies to return prior to the end of the fiscal year any 

or all unobligated funds received under this section, and may reduce the 

amount it has apportioned or agreed to pay to any State agency if FNS 

determines that:

    (i) The State agency is not administering the Food Distribution 

Program in accordance with its plan of operation approved by FNS and the 

provisions of this part, or

    (ii) The amount of funds which the State agency requested from FNS 

is in excess of actual need, based on reports of expenditures and 

current projections of Program needs.

    (iii) Circumstances or conditions justify the return reallocation or 

transfer of funds to accomplish the purpose of this part.

    (2) The State agency shall return to FNS within 90 days following 

the close of each Federal fiscal year any funds received under this 

section which are unobligated at that time.

    (h) Records, reports, audits. (1) The State agency shall:

    (i) Keep such accounts and records as may be necessary to enable FNS 

to determine whether there has been compliance with this section, and

    (ii) Adhere to the retention and custodial requirements for records 

set forth in Sec. 277.4 of this chapter.

    (2) The State agency receiving funds either through a Treasury RDO 

Letter of Credit system or Treasury check shall submit quarterly reports 

to FNS on Form SF-269, ``Financial Status Report,'' by the 30th day 

after close of the reporting quarter and shall submit such other reports 

as may be required by FNS.

    (3) The appropriate provisions of part 277 are adaptable to this 

section for additional guidance.



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

0584-0071)



(44 U.S.C. 3506)



[44 FR 35928, June 19, 1979, as amended at 47 FR 746, Jan. 7, 1982. 

Redesignated and amended by Amdt. 1, 47 FR 14137, Apr. 2, 1982, as 

amended at 62 FR 53731, Oct. 16, 1997. Redesignated at 64 FR 73385, Dec. 

30, 1999.]