Presenters: Barbara Smith and Belva Brennan April 12, 2012

1. Presenters: Barbara Smith and Belva Brennan April 12, 2012 USDA, Food and Nutrition Service, Child Nutrition Division Program Analysis and Monitoring Branch Child And Adult care food programSeriously deficient (SD)to Thenational disqualified list (NDL)

2. Seriously DeficientLearning Objectives • Serious Deficient Defined and Reg. Citations • SD process • Targeted Management Evaluation “SD” Findings

3. SeriouslyDeficient (SD) Defined 7 CFR 226.2 “…the status of an institution or a day care home that has been determined to be non-compliant in one or more aspects of its operation of the Program…”

4. SD Process Reg Citations • For New Institutions… • 226.6(c)(1) • For Renewing Institutions… 226.6(c)(2) • For Participating Institutions… 226.6(c)(3) • For Day Care Homes… 226.16(l)

5. Serious Deficiency Process What exactly is the “serious deficiency process”? EVERYTHINGafter a SD declared… • begins with the SD determination and • ends with the resolution of the SD

6. Serious Deficiency Process • SD notice is sent by certified mail (or equivalent private delivery) • Include name(s) of RPI(s), SDs and request for CAP • SA must maintain a State agency list including SD information

7. Serious Deficiency Process • In response to the SD notice, the institution or provider must submit a CAP • Acceptable CAP includes: • Name(s) of institution/provider and RPIs; Location; RPI birth dates; assurance that SDs are fully and permanently corrected.

8. Serious Deficiency Process • An Acceptable CAP also answers these questions: • What are the serious deficiency(ies) and the procedures that will be implemented to address the serious deficiency(ies)? • Who will address the serious deficiency?

9. Serious Deficiency Process • An Acceptable CAP also answers these questions: • When will the procedure for addressing the serious deficiency be implemented? • Wherewill the CAP documentation be retained?

10. Serious Deficiency Process • An Acceptable CAP also answers these questions: • How will the new procedure(s) be transmitted to staff and facilities? • Additional supporting documentation

11. Serious Deficiency Process • States must submit the SD notice and documentation to their FNSRO • DCH SO must provide SD notice and documentation to the State agency • If the CAP is deemed acceptable, SD determination is temporarily deferred.

12. Serious Deficiency Process • If a timely CAP is not submitted or no CAP is submitted: • A NPTD, with appeal rights is sent • If SA action is upheld, a NTD is sent to institution or provider and RPIs

13. Serious Deficiency Process • If SA action is not upheld… • SD determination is temporarily deferred • Institution is not terminated but still must implement CA

14. Serious Deficiency Process • SD fully and permanently corrected… SD temporarily deferred • SD not fully and permanently corrected ...SA issues NTPD

15. FY2010 and FY2011 TME Findings

16. Serious Deficiency Process • Use of “SD” warnings • Inadequate description of SDs and/or corrective action • NSDs or other documents lacked required information • Failure to name RPIs

17. TME Findings: SA Level • Failure to issue SD-related correspondence to institution officers • Exceeding Corrective Action time periods • Failure to use “abbreviated” appeals

18. TME Findings: SA Level • Self-terminate or Terminate for Convenience • Failure to issue NSD on a timely basis • No State agency list or list not complete/current

19. TME Findings: SA Level • Non-compliant appeals process/ procedures • Failure to resolve appeals within regulatory timeframes • Failure to issue Notice of Proposed Termination/Disqualification (NPTD)

20. TME Findings: SO Implementation and SA Oversight • Inadequate description of SDs and/or corrective action in NSD • NSDs or other documents lack required information • Failure to issue SD-related correspondence to institution officers, if applicable

21. TME Findings: SO Implementation and SA Oversight • “Promise” not to do it again • Rescission of NSD w/o evaluation/receipt of corrective action • Failure to use SD process when license is revoked

22. FNS CND Findings • Multiple Terminations • Institutions Terminated w/o RPIs • “Trial Periods” as NDL removal prerequisite • Removing DCH providers w/o adequate Corrective Action • Failure to collect interest on debt

23. National Disqualified List (NDL) Learning Objectives • NDL Authority • Provide guidance on what is required for submissions to the NDL • Removal from NDL process to include: • FNS expectations of acceptable CAP • Collection of Debt and interest • New Web-Based NDL System

24. The National Disqualified List • 42 U.S.C. 1766 (d)(5)(E)(i) and (ii), the Richard B. Russell National School Lunch Act • § 226.6(c)(7) of the Program regulations

25. Submissions to the NDL • Institution: • Name and Address • Termination date; • Amount of debt owed, if any, noting the RPI; • Reason/s for the disqualification

26. Submissions to the NDL • RPI: • Name • Address • Date of birth; and • Position in the institution

27. Submissions to the NDL • Provider: • Name(s) of the provider; • Address; • Date of Birth; • Termination date; • Amount of debt owed, if any; • Name of the individual’s sponsor; and • Reason(s) for the disqualification

28. Submissions to the NDL • Accurate and complete information • Incomplete submissions returned • Review by FNS Regional Office

29. Removal from the NDL • No removal if there is a debt owed • After 7 years from termination • “Reinstated” records retained 3 years • Early removal requests

30. End of 7 Years • If debt remains upon completing 7 years, no removal. • Institution/RPIs/Providers remain on the State agency list. • Upon reapplication, SA must ensure serious deficiencies are fully resolved prior to approving the application

31. Early Removal Requests Institutions and RPIs: • SA submits supportive documentation • FNS RO reviews documentation • FNS National Office concurrence

32. Early Removal Requests Day Care Home Providers: • § 226.6(c)(7)(vi) gives SAs authority to remove providers from NDL • FNS’ responsibility

33. Early Removal Requests Corrective Action Plans: • For institutions, § 226.6(c), requires the submission of corrective actions taken to the State agency. • For providers, § 226.16(k)(3)(F)(ii) requires the submission of corrective actions to the sponsoring organization.

34. Debt Collection • 7 CFR §226.14 • Repayment plan • Effect on NDL • Uncollectible Debt

35. Debt Collection • Assessment of Interest • Interest accrual on debts • Responsibility of the State Agency

36. Debt Collection Example See Handout

37. Debt Interest Rate • One uniform rate (Current Value of Funds Rate) • CVFR is published annually at http://www.fns.treas.gov

38. The NDL System • MOVING FORWARD

39. Web-Based NDL System • A robust, scalable and expandable web-based application for NDL • Replaces the MS Access NDL application • Integration with the USDA e-Authentication system

40. Web-Based NDL System Access • Sponsoring Organization: e-Auth Level 1 • State Agency: e-Auth Level 2 • FNS Regional Office: e- Auth Level 2 • FNS National Office: e-Auth Level 2

41. Web-Based NDL System Projected Timeline • Client Verification Testing Period – April to May 2012 (CND and FNS RO staff) • Training Webinars for State agency staff - June 2012 and prior to implementation date • System Forms: OMB Approval Clearance Process begins mid-June 2012 • Launching Live – Beginning of FY2013 (Estimation)

42. THANK YOU! QUESTIONS ?????