[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: 7CFR275.12]



[Page 851-857]

 

                          TITLE 7--AGRICULTURE

 

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

 

PART 275_PERFORMANCE REPORTING SYSTEM--Table of Contents

 

                 Subpart C_Quality Control (QC) Reviews

 

Sec. 275.12  Review of active cases.



    (a) General. A sample of households which were certified prior to, 

or during, the sample month and issued food stamp benefits for the 

sample month shall be selected for quality control review. These active 

cases shall be reviewed to determine if the household is eligible and, 

if eligible, whether the household is receiving the correct allotment. 

The determination of a household's eligibility shall be based on an 

examination and verification of all elements of eligibility (i.e., basic 

program requirements, resources, income, and deductions). The elements 

of eligibility are specified in Sec. Sec. 273.1 and 273.3 through 

273.9. The verified circumstances and the resulting benefit level 

determined by the quality control review shall be compared to the 

benefits authorized by the State agency as of the review date. When 

changes in household circumstances occur, the reviewer shall determine 

whether the changes were reported by the participant and handled by the 

agency in accordance with the rules set forth in Sec. Sec. 273.12, 

273.13 and 273.21, as appropriate. For active cases, the review date 

shall always fall within the sample month, either the first day of a 

calendar or fiscal month or the day of certification, whichever is 

later. The review of active cases shall include: a household case record 

review; a field investigation, except as provided in paragraph (b) of 

this section; the identification of any variances; an error analysis; 

and the reporting of review findings.

    (b) Household case record review. The reviewer shall examine the 

household case record to identify the specific facts relating to the 

household's eligibility and basis of issuance. If the reviewer is unable 

to locate the household case record, the reviewer shall identify as many 

of the pertinent facts as possible from the household issuance record. 

The case record review shall include all information applicable to the 

case as of the review month, including the application and worksheet in 

effect as of the review date. Documentation contained in the case record 

can be used as verification if it is not subject to change and applies 

to the sample month. If during the case record review the reviewer can 

determine and verify the household's ineligibility the review can be 

terminated at that point, provided that if the determination is based on 

information not obtained from the household then the correctness of that 

information must be confirmed as provided in paragraph (c)(2) of this 

section. The reviewer shall utilize information obtained through the 

case record review to complete column (2) of the Integrated Worksheet, 

Form FNS-380, and to tentatively plan the content of the field 

investigation.

    (c) Field investigation. A full field investigation shall be 

conducted for all active cases selected in the sample month except as 

provided in paragraph (b) of this section. A full field investigation 

shall include a review of any information pertinent to a particular case 

which is available through the State Income and Eligibility Verification 

System (IEVS) as specified in Sec. 272.8. If during the field 

investigation the reviewer determines and verifies the household's 

ineligibility, the review can be terminated at that point, provided that 

if the determination is based on information not obtained from the 

household then the correctness of that information must be confirmed as 

provided in paragraph (c)(2) of this section. In Alaska an exception to 

this requirement can be made in those isolated areas not reachable by 

regularly scheduled commercial air service, automobile, or other public 

transportation provided one fully documented attempt to contact the 

household has been made. Such cases may be completed through casefile 

review and collateral contact. The field investigation will include 

interviews with the head of household, spouse, or authorized 

representative; contact with collateral sources of information; and any 

other materials and



[[Page 852]]



activity pertinent to the review of the case. The scope of the review 

shall not extend beyond the examination of household circumstances which 

directly relate to the determination of household eligibility and basis 

of issuance status. The reviewer shall utilize information obtained 

through the field investigation to complete column (3) of the Integrated 

Worksheet, Form FNS-380.

    (1) Personal interviews. Personal interviews shall be conducted in a 

manner that respects the rights, privacy, and dignity of the 

participants. Prior to conducting the personal interview, the reviewer 

shall notify the household that it has been selected, as part of an 

ongoing review process, for review by quality control, and that a 

personal face-to-face interview will be conducted in the future. The 

method of notifying the household and the specificity of the 

notification shall be determined by the State agency, in accordance with 

applicable State and Federal laws. The personal interview may take place 

at the participant's home, at an appropriate State agency certification 

office, or at a mutually agreed upon alternative location. The State 

agency shall determine the best location for the interview to take 

place, but would be subject to the same provisions as those regarding 

certification interviews at Sec. 273.2(e)(2) of this chapter. Those 

regulations provide that an office interview must be waived under 

certain hardship conditions. Under such hardship conditions the quality 

control reviewer shall either conduct the personal interview with the 

participant's authorized representative, if one has been appointed by 

the household, or with the participant in the participant's home. Except 

in Alaska, when an exception to the field investigation is made in 

accordance with this section, the interview with the participant may not 

be conducted by phone. During the personal interview with the 

participant, the reviewer shall:

    (i) Explore with the head of the household, spouse, authorized 

representative, or any other responsible household member, household 

circumstances as they affect each factor of eligibility and basis of 

issuance;

    (ii) Establish the composition of the household;

    (iii) Review the documentary evidence in the household's possession 

and secure information about collateral sources of verification; and

    (iv) Elicit from the participant names of collateral contacts. The 

reviewer shall use, but not be limited to, these designated collateral 

contacts. If required by the State, the reviewer shall obtain consent 

from the head of the household to secure collateral information. If the 

participant refuses to sign the release of information form, the 

reviewer shall explain fully the consequences of this refusal to 

cooperate (as contained in paragraph (g)(1)(ii) of this section), and 

continue the review to the fullest extent possible.

    (2) Collateral contacts. The reviewer shall obtain verification from 

collateral contacts in all instances when adequate documentation was not 

available from the participant. This second party verification shall 

cover each element of eligibility as it affects the household's 

eligibility and coupon allotment. The reviewer shall make every effort 

to use the most reliable second party verification available (for 

example, banks, payroll listings, etc.), in accordance with FNS 

guidelines, and shall thoroughly document all verification obtained. If 

any information obtained by the QC reviewer differs from that given by 

the participant, then the reviewer shall resolve the differences to 

determine which information is correct before an error determination is 

made. The manner in which the conflicting information is resolved shall 

include recontacting the participant unless the participant cannot be 

reached. When resolving conflicting information reviewers shall use 

their best judgement based on the most reliable data available and shall 

document how the differences were resolved.

    (d) Variance identification. The reviewer shall identify any element 

of a basic program requirement or the basis of issuance which varies 

(i.e., information from review findings which indicates that policy was 

applied incorrectly and/or information verified as of the review date 

that differs from that used at the most recent certification action). 

For each element that varies,



[[Page 853]]



the reviewer shall determine whether the variance was State agency or 

participant caused. The results of these determinations shall be coded 

and recorded in column (5) of the Integrated Worksheet, Form FNS-380.

    (1) Variances included in error analysis. Except for those variances 

in an element resulting from one of the situations described in 

paragraph (d)(2) of this section, any variance involving an element of 

eligibility or basis of issuance shall be included in the error 

analysis. Such variances shall include but not be limited to those 

resulting from a State agency's failure to take the disqualification 

action related to SSN's specified in Sec. 273.6(c), and related to work 

requirements, specified in Sec. 273.7(f).

    (2) Variances excluded from error analysis. The following variances 

shall be excluded from the determination of a household's eligibility 

and basis of issuance for the sample month:

    (i) Any variance resulting from the nonverified portion of a 

household's gross nonexempt income where there is conclusive 

documentation (a listing of what attempts were made to verify and why 

they were unsuccessful) that such income could not be verified at the 

time of certification because the source of income would not cooperate 

in providing verification and no other sources of verification were 

available. If there is no conclusive documentation as explained above, 

then the reviewer shall not exclude any resulting variance from the 

error determination. This follows certification policy outlined in Sec. 

273.2(f)(1)(i).

    (ii) Any variance in cases certified under expedited certification 

procedures resulting from postponed verification of an element of 

eligibility as allowed under Sec. 273.2(i)(4)(i). Verification of gross 

income, deductions, resources, household composition, alien status, or 

tax dependency may be postponed for cases eligible for expedited 

certification. However, if a case certified under expedited procedures 

contains a variance as a result of a residency deficiency, a mistake in 

the basis of issuance computation, a mistake in participant 

identification, or incorrect expedited income accounting, the variance 

shall be included in the error determination. This exclusion shall only 

apply to those cases which are selected for QC review in the first month 

of participation under expedited certification.

    (iii) Any variance subsequent to certification in an element of 

eligibility or basis of issuance which was not reported and was not 

required to have been reported as of the review date. The elements 

participants are required to report and the time requirements for 

reporting are specified in Sec. Sec. 273.12(a) and 273.21(h) and (i), 

as appropriate. If, however, a change in any element is reported, and 

the State agency fails to act in accordance with Sec. Sec. 273.12(c) 

and 273.21(j), as appropriate, any resulting variance shall be included 

in the error determination.

    (iv) Any variance in deductible expenses which was not provided for 

in determining a household's benefit level in accordance with Sec. 

273.2(f)(3)(i)(B). This provision allows households to have their 

benefit level determined without providing for a claimed expense when 

the expense is questionable and obtaining verification may delay 

certification. If such a household subsequently provides the needed 

verification for the claimed expense and the State agency does not 

redetermine the household's benefits in accordance with Sec. 273.12(c), 

any resulting variance shall be included in the error determination.

    (v) Any variance resulting from use by the State agency of 

information concerning households or individuals from an appropriate 

Federal source, provided that such information is correctly processed by 

the State agency. An appropriate Federal source is one which verifies: 

Income that it provides directly to the household; deductible expenses 

for which it directly bills the household; or other household 

circumstances which it is responsible for defining or establishing. To 

meet the provisions for correct processing, the eligibility worker must 

have appropriately acted on timely information. In order to be timely, 

information must be the most current that was available to the State 

agency at the time of the eligibility worker's action.

    (vi) Two variances relating to the Immigration and Naturalization 

Service's



[[Page 854]]



(INS) Systematic Alien Verification for Entitlements (SAVE) Program.

    (A) A variance based on a verification of alien documentation by 

INS. The reviewer shall exclude such variance only if the State agency 

properly used SAVE and the State agency provides the reviewer with:

    (1) The alien's name;

    (2) The alien's status; and

    (3) Either the Alien Status Verification Index (ASVI) Query 

Verification Number or the INS Form G-845, as annotated by INS.

    (B) A variance based on the State agency's wait for the response of 

INS to the State agency's request for official verification of the 

alien's documentation. The reviewer shall exclude such variance only if 

the State agency properly used SAVE and the State agency provides the 

reviewer with either:

    (1) The date of request, if the State agency was waiting for an 

automated response; or

    (2) A copy of the completed Form G-845, if the State agency was 

waiting for secondary verification from INS.

    (vii) Subject to the limitations provided in paragraphs 

(d)(2)(vii)(A) through (d)(2)(vii)(F) of this section any variance 

resulting from application of a new Program regulation or implementing 

memorandum (if one is sent to advise State agencies of a change in 

Federal law, in lieu of regulations during the first 120 days from the 

required implementation date.

    (A) When a regulation allows a State agency an option to implement 

prior to the required implementation date, the date on which the State 

agency chooses to implement may, at the option of the State, be 

considered to be the required implementation date for purposes of this 

provision. The exclusion period would be adjusted to begin with this 

date and end on the 120th day that follows. States choosing to implement 

prior to the required implementation date must notify the appropriate 

FNS Regional Office, in writing, prior to implementation that they wish 

the 120 day variance exclusion to commence with actual implementation. 

Absent such notification, the exclusionary period will commence with the 

required implementation date.

    (B) A State agency shall not exclude variances which occur prior to 

the States implementation.

    (C) A State agency which did not implement until after the exclusion 

period shall not exclude variances under this provision.

    (D) Regardless of when the State agency actually implemented the 

regulation, the variance exclusion period shall end on the 120th day 

following the required implementation date, including the required 

implementation date defined in paragraph (d)(2)(vii)(A) of this section.

    (E) For purposes of this provision, implementation occurs on the 

effective date of State agency's written statewide notification to its 

eligibility workers.

    (F) This variance exclusion applies to changes occasioned by final 

regulations or interim regulations. In the case of a final regulation 

issued following an interim regulation, the exclusion applies only to 

significant changes made to the earlier interim regulation. A 

significant change is one which the final regulation requires the State 

agency to implement on or after publication of a final rule.

    (viii) Any variance resulting from incorrect written policy that a 

State agency acts on that is provided by a Departmental employee 

authorized to issue Food Stamp Program policy and that the State agency 

correctly applies. For purposes of this provision, written Federal 

policy is that which is issued in regulations, notices, handbooks, 

category three and four Policy Memoranda under the Policy Interpretation 

Response System, and regional policy memoranda issued pursuant to these. 

Written Federal policy is also a letter from the Food and Nutrition 

Service to a State agency which contains comments on the State agency's 

food stamp manual or instructions.

    (ix) Any variance in a child support deduction which was the result 

of an unreported change subsequent to the most recent certification 

action shall be excluded from the error determination.

    (3) Other findings. Findings other than variances made during the 

review which are pertinent to the food stamp household or the case 

record may be



[[Page 855]]



acted on at the discretion of the State agency. Examples of such 

findings are: an incorrect age of a household member which is unrelated 

to an element of eligibility; an overdue subsequent certification; no 

current application on file; insufficient documentation; incorrect 

application of the verification requirements specified in part 273; and 

deficiencies in work registration procedural requirements. Such 

deficiencies include: inadequate documentation of each household 

member's exempt status; work registration form for each nonexempt 

household member not completed at the time of application and every six 

months thereafter; and the household not advised of its responsibility 

to report any changes in the exempt status of any household member.

    (e) Error analysis. The reviewer shall analyze all appropriate 

variances in completed cases, in accordance with paragraph (d) of this 

section, which are based upon verified information and determine whether 

such cases are either eligible, eligible with a basis of issuance error, 

or ineligible. The review of an active case determined ineligible shall 

be considered completed at the point of the ineligibility determination. 

For households determined eligible, the review shall be completed to the 

point where the correctness of the basis of issuance is determined, 

except in the situations outlined in paragraph (g) of this section. In 

the event that a review is conducted of a household which is receiving 

restored or retroactive benefits for the sample month, the portion of 

the allotment which is the restored or retroactive benefit shall be 

excluded from the determination of the household's eligibility and/or 

basis of issuance. A food stamp case in which a household member(s) 

receives public assistance shall be reviewed in the same manner as all 

other food stamp cases, using income as received. The determination of a 

household's eligibility and the correctness of the basis of issuance 

shall be determined based on data entered on the computation sheet as 

well as other information documented on other portions of the Integrated 

Worksheet, Form FNS-380, as appropriate.

    (f) Reporting of review findings. All information verified to be 

incorrect during the review of an active case shall be reported to the 

State agency for appropriate action on an individual case basis. This 

includes information on all variances in elements of eligibility and 

basis of issuance in both error and nonerror cases. In addition, the 

reviewer shall report the review findings on the Integrated Review 

Schedule, Form FNS-380-1, in accordance with the following procedures:

    (1) Eligibility errors. If the reviewer determines that a case is 

ineligible, the occurrence and the total allotment issued in the sample 

month shall be coded and reported. Whenever a case contains a variance 

in an element which results in an ineligibility determination and there 

are also variances in elements which would cause a basis of issuance 

error, the case shall be treated as an eligibility error. The reviewer 

shall also code and report any variances that directly contributed to 

the error determination. In addition, if the State agency has chosen to 

report information on all variances in elements of eligibility and basis 

of issuance, the reviewer shall code and report any other such variances 

which were discovered and verified during the course of the review.

    (2) Basis of issuance errors. If the reviewer determines that food 

stamp allotments were either overissued or underissued to eligible 

households in the sample month, in an amount exceeding $25.00, the 

occurrence and the amount of the error shall be coded and reported. The 

reviewer shall also code and report any variances that directly 

contributed to the error determination. In addition, if the State agency 

has chosen to report information on all variances in elements of 

eligibility and basis of issuance, the reviewer shall code and report 

any other such variances which were discovered and verified during the 

course of the review.

    (3) Automated Federal Information Exchange System Errors. Variances 

resulting from the use by the State agency of information received from 

automated Federal information exchange systems, which are excluded in 

accordance with



[[Page 856]]



Sec. 275.12(d)(2)(v), shall be coded and reported as variances. They 

shall not, however, be used in determining a State's error rates.

    (g) Disposition of case reviews. Each case selected in the sample of 

active cases must be accounted for by classifying it as completed, not 

completed, or not subject to review. These case dispositions shall be 

coded and recorded on the Integrated Review Schedule, Form FNS-380-1.

    (1) Cases reported as not complete. Active cases shall be reported 

as not completed if the household case record cannot be located and the 

household itself is not subsequently located; if the household case 

record is located but the household cannot be located unless the 

reviewer attempts to locate the household as specified in this 

paragraph; or if the household refuses to cooperate, as discussed in 

this paragraph. All cases reported as not complete shall be reported to 

the State agency for appropriate action on an individual case basis. 

Without FNS approval, no active case shall be reported as not completed 

solely because the State agency was unable to process the case review in 

time for it to be reported in accordance with the timeframes specified 

in Sec. 275.21(b)(2).

    (i) If the reviewer is unable to locate the participant either at 

the address indicated in the case record or in the issuance record and 

the State agency is not otherwise aware of the participant's current 

address, the reviewer shall attempt to locate the household by 

contacting at least two sources which the State agency determines are 

most likely to be able to inform the reviewer of the household's current 

address. Such sources include but are not limited to:

    (A) The local office of the U.S. Postal Service;

    (B) The State Motor Vehicle Department;

    (C) The owner or property manager of the residence at the address in 

the case record; and

    (D) Any other appropriate sources based on information contained in 

the case record, such as public utility companies, telephone company, 

employers, or relatives. Once the reviewer has attempted to locate the 

household and has documented the response of each source contacted, if 

the household still cannot be located and the State agency has 

documented evidence that the household did actually exist, the State 

agency shall report the active case as not subject to review. In these 

situations documented evidence shall be considered adequate if it either 

documents two different elements of eligibility or basis of issuance, 

such as a copy of a birth certificate for age and pay status for income; 

or documents the statement of a collateral contact indicating that the 

household did exist. FNS Regional Offices will monitor the results of 

the contacts which State agencies make in attempting to locate 

households.

    (ii) If a household refuses to cooperate with the quality control 

reviewer and the State agency has taken other administrative steps to 

obtain that cooperation without obtaining it, the household shall be 

notified of the penalities for refusing to cooperate with respect to 

termination and reapplication, and of the possibility that its case will 

be referred for investigation for willful misrepresentation. If a 

household refuses to cooperate after such notice, the reviewer may 

attempt to complete the case and shall report the household's refusal to 

the State agency for termination of its participation without regard for 

the outcome of that attempt. For a determination of refusal to be made, 

the household must be able to cooperate, but clearly demonstrate that it 

will not take actions that it can take and that are required to complete 

the quality control review process. In certain circumstances, the 

household may demonstrate that it is unwilling to cooperate by not 

taking actions after having been given every reasonable opportunity to 

do so, even though the household or its members do not state that the 

household refuses to cooperate. Instances where the household's 

unwillingness to cooperate in completing a quality control review has 

the effect of a refusal to cooperate shall include the following:

    (A) The household does not respond to a letter from the reviewer 

sent Certified Mail-Return Receipt Requested within 30 days of the date 

of receipt;



[[Page 857]]



    (B) The household does not attend an agreed upon interview with the 

reviewer and then does not contact the reviewer within 10 days of the 

date of the scheduled interview to reschedule the interview; or

    (C) The household does not return a signed release of information 

statement to the reviewer within 10 days of either agreeing to do so or 

receiving a request from the reviewer sent Certified Mail-Return Receipt 

Requested. However, in these and other situations, if there is any 

question as to whether the household has merely failed to cooperate, as 

opposed to refused to cooperate, the household shall not be reported to 

the State agency for termination.

    (2) Cases not subject to review. Active cases which are not subject 

to review, if they have not been eliminated in the sampling process, 

shall be eliminated in the review process. In addition to cases listed 

in Sec. 275.11(f)(1), these shall include:

    (i) Death of all members of a household if they died before the 

review could be undertaken or completed;

    (ii) The household moved out of State before the review could be 

undertaken or completed;

    (iii) The household, at the time of the review, is under active 

investigation for intentional Food Stamp Program violation, including a 

household with a pending administrative disqualification hearing;

    (iv) A household receiving restored benefits in accordance with 

Sec. 273.17 but not participating based upon an approved application 

for the sample month;

    (v) A household dropped as a result of correction for oversampling;

    (vi) A household participating under disaster certification 

authorized by FNS for a natural disaster;

    (vii) A case incorrectly listed in the active frame;

    (viii) A household appealing an adverse action when the review date 

falls within the time period covered by continued participation pending 

the hearing;

    (ix) A household that did not receive benefits for the sample month; 

or

    (x) A household that still cannot be located after the reviewer has 

attempted to locate it in accordance with paragraph (g)(1)(i) of this 

section.

    (h) Demonstration projects/SSA processing. Households correctly 

classified for participation under the rules of a demonstration project 

which establishes new FNS-authorized eligibility criteria or modifies 

the rules for determining households' eligibility or allotment level 

shall be reviewed following standard procedures provided that FNS does 

not modify these procedures to reflect modifications in the treatment of 

elements of eligibility or basis of issuance in the case of a 

demonstration project. If FNS determines that information obtained from 

these cases would not be useful, then they may be excluded from review. 

A household whose most recent application for participation was 

processed by Social Security Administration personnel shall be reviewed 

following standard procedures. This includes applications for 

recertification, provided such an application is processed by the SSA as 

allowed in Sec. 273.2(k)(2)(ii).



[Amdt. 260, 49 FR 6306, Feb. 17, 1984; 49 FR 14495, Apr. 12, 1984, as 

amended by Amdt. 264, 51 FR 7207, Feb. 28, 1986; Amdt. 295, 52 FR 29658, 

Aug. 11, 1987; 53 FR 39443, Oct. 7, 1988; 53 FR 44172, Nov. 2, 1988; 

Amdt. 324, 55 FR 48834, Nov. 23, 1990; Amdt. 362, 61 FR 54292, Oct. 17, 

1996; Amdt. 366, 62 FR 29659, June 2, 1997; Amdt. 373, 64 FR 38296, July 

16, 1999; 67 FR 41619, June 19, 2002]