[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR248.12]

[Page 483-484]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 248_WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)--Table of Contents
 
                    Subpart E_State Agency Provisions
 
Sec. 248.12  FMNP costs.

    (a) General.--(1) Composition of allowable costs. In general, a cost 
item will be deemed allowable if it is reasonable and necessary for FMNP 
purposes and otherwise satisfies allowability criteria set forth in 7 
CFR 3016.22 and this part. FMNP purposes include the administration and 
operation of the FMNP. Program costs supported by State matching 
contributions must meet the same criteria for allowability as costs 
supported by Federal funds. Allowable FMNP costs may be classified as 
follows:
    (i) Food costs and administrative costs. Food costs are the costs of 
food benefits provided to FMNP recipients. Administrative costs are the 
costs associated with providing FMNP benefits and services to recipients 
and generally administering the FMNP. Specific examples of allowable 
administrative costs are listed in paragraph (b) of this section. Except 
as provided in Sec. 248.14(g) of this part, a State agency's 
administrative costs under the FMNP may not exceed 17 percent of its 
total FMNP costs. Any costs incurred for food and/or administration 
above the Federal grant level will be the State agency's responsibility.
    (ii) Market development or technical assistance costs. Market 
development or technical assistance costs are those costs under Sec. 
248.14(h) incurred to promote the development of farmers' markets in 
socially or economically disadvantaged areas, or remote rural areas, 
where individuals eligible for participation in the program have limited 
access to locally grown fruits and vegetables. Subject to a 
determination by the Secretary under Sec. 248.14(h), a State agency 
may, during any fiscal year, use not more than 2 percent of total 
program funds for such market development or technical assistance.
    (iii) Direct and indirect costs. Direct costs are food and 
administrative costs incurred specifically for the FMNP. Indirect costs 
are administrative costs that benefit multiple programs or activities, 
and cannot be identified to any one without effort disproportionate to 
the results achieved. In accordance with the provisions of 7 CFR part 
3016, a claim for reimbursement of indirect costs shall be supported by 
an approved allocation plan for the determination of such costs. An 
indirect cost rate developed through such an allocation plan may not be 
applied to a base that includes food costs.
    (2) Costs allowable with prior approval. A State or local agency 
must obtain prior approval in accordance with 7 CFR 3016.22 before 
charging to the FMNP any capital expenditures and other cost items 
designated by 7 CFR 3016.22 as requiring such approval.
    (3) Unallowable costs. Costs that are not reasonable and necessary 
for FMNP purposes, or that do not otherwise satisfy the cost principles 
of 7 CFR 3016.22, are unallowable. Notwithstanding any other provision 
of part 3016 or this part, the cost of constructing or operating a 
farmers' market is unallowable. Unallowable costs may never be claimed 
for Federal reimbursement or counted toward the State matching 
requirement.
    (b) Specified allowable administrative costs. Allowable 
administrative costs include the following:
    (1) The costs associated with the provision of nutrition education 
which meets the requirements of Sec. 248.9 of this part.
    (2) The costs of FMNP coupon issuance, or recipient education 
covering proper coupon redemption procedures.
    (3) The cost of outreach services.
    (4) The costs associated with the food delivery process, such as 
printing FMNP coupons, processing redeemed coupons, and training market 
managers on the food delivery system.
    (5) The cost of monitoring and reviewing Program operations.
    (6) The cost of FMNP training.
    (7) The cost of required reporting and recordkeeping.
    (8) The cost of determining which local WIC sites will be utilized.
    (9) The cost of recruiting and authorizing farmers/farmers' markets 
to participate in the FMNP.

[[Page 484]]

    (10) The cost of preparing contracts for farmers/farmers' markets 
and local WIC providers.
    (11) The cost of developing a data processing system for redemption 
and reconciliation of FMNP coupons.
    (12) The cost of designing program training and informational 
materials.
    (13) The cost of coordinating FMNP implementation responsibilities 
between designated administering agencies.

[59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49747, Sept. 27, 1995]