[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: 7CFR249.20]

[Page 515-516]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 249_SENIOR FARMERS' MARKET NUTRITION PROGRAM (SFMNP)--Table of Contents
 
                   Subpart G_Miscellaneous Provisions
 
Sec. 249.20  Claims and penalties.


    (a) Claims against State agencies. (1) If FNS determines through a 
review of the State agency's reports, program or financial analysis, 
monitoring, audit, or otherwise, that any SFMNP funds provided to a 
State agency for food or

[[Page 516]]

administrative purposes were, through State agency negligence or fraud, 
misused or otherwise diverted from SFMNP purposes, a formal claim will 
be assessed by FNS against the State agency. The State agency must pay 
promptly to FNS a sum equal to the amount of the administrative funds or 
the value of coupons and/or eligible foods so misused or diverted.
    (2) If FNS determines that any part of the SFMNP funds received, 
coupons printed, and/or eligible foods otherwise lost by a State agency 
were lost as a result of theft, embezzlement, or unexplained causes, the 
State agency must, on demand by FNS, pay to FNS a sum equal to the 
amount of the money or the value of the SFMNP funds or coupons/eligible 
foods so lost.
    (3) The State agency will have full opportunity to submit evidence, 
explanation or information concerning alleged instances of noncompliance 
or diversion before a final determination is made in such cases.
    (4) FNS is authorized to establish claims against a State agency for 
unreconciled SFMNP coupons, and/or for failure to comply with the terms 
of duly executed CSA program contracts or agreements. When a State 
agency can demonstrate that all reasonable management efforts have been 
devoted to reconciliation and 99 percent or more of the SFMNP coupons 
issued, or of the eligible foods contracted for delivery by the CSA 
program, have been accounted for by the reconciliation process, FNS may 
determine that the reconciliation process has been completed to 
satisfaction.
    (b) Interest charge on claims against State agencies. If an 
agreement cannot be reached with the State agency for payment of its 
debts or for offset of debts on its current Letter of Credit within 30 
days from the date of the first demand letter from FNS, FNS will assess 
an interest (late) charge against the State agency. Interest accrual 
shall begin on the 31st day after the date of the first demand letter, 
bill or claim, and shall be computed monthly on any unpaid balance as 
long as the debt exists. From a source other than the SFMNP, the State 
agency shall provide the funds necessary to maintain SFMNP operations at 
the grant level authorized by FNS.