The Emergency Food Assistance Program Handbook

Transcription

1 Texas Department of Agriculture The Emergency Food Assistance Program Handbook

2 The Emergency Food Assistance Program Handbook Table of Contents 1000 Introduction 2000 Eligibility and Application Requirements 3000 Program Agreement 4000 Managing the Program 5000 Visits, Reviews, and Audits 6000 Civil Rights 7000 Procurement 8000 Denials, Terminations, and Appeals 9000 Terms, Definitions, and Acronyms Notification and TEFAP Handbook Online Resources Frequently Asked Questions

3 Section 1000 Introduction Table of Contents Program Description... 2 Administration... 2 Other Programs... 3 Funding... 4 Appeals... 4 The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 1000, Introduction Page 1

4 1000 Introduction Program Description The Emergency Food Assistance Program (TEFAP) was authorized under Federal Public Law 98-8, Title II, as amended. In August 1996, TEFAP was amended by federal welfare reform legislation. The amendment included a requirement for states to consolidate TEFAP and another commodity assistance program, the Soup Kitchen and Food Bank (SKFB) Program, into a single program. The consolidated commodity assistance program, TEFAP, was implemented December 1, In Texas, TEFAP operated under the name Texas Commodity Assistance Program (TEXCAP) until Administration The Texas Department of Agriculture (TDA) has an agreement with the United States Department of Agriculture (USDA) to administer TEFAP in Texas, and does so in accordance with federal and state requirements. These requirements can be referenced in the Code of Federal Regulations (CFR) at 7 CFR Parts 250 and 251 and Texas Administrative Code (TAC) at Title 4, Part 1, Chapter 24. TDA distributes funds and USDA Foods to participating contracting entities (CEs), that is, nonprofit organizations and public agencies, that determine the eligibility of applicants, receive, store, transport and distribute USDA Foods to eligible participants, and conduct nutrition education activities for eligible participants. TDA's responsibilities include the following tasks: Administering TEFAP in Texas The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 1000, Introduction Page 2

5 Disbursing administrative funds Assisting CEs in the operation and management of the program Reviewing the program to ensure that reimbursement is used for program purposes and USDA Foods are distributed to eligible participants CEs responsibilities include the following tasks: Complying with the terms of the Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Department of Agriculture and the Application for Participation/Plan of Operation Implementing and operating an approved financial management system Maintaining program records Submitting claims for reimbursement. Other Programs TDA administers TEFAP through agreements with nonprofit organizations or public agencies in Texas. TDA also administers the following USDA programs: National School Lunch Program (NSLP) School Breakfast Program (SBP) Special Milk Program (SMP) Child and Adult Care Food Program (CACFP) Summer Food Service Program (SFSP) Food Distribution Program (FDP) Commodity Supplemental Food Program (CSFP), in limited areas Senior Farmers Market Nutrition Program (SFMNP), in limited areas Farmers Market Nutrition Program (FMNP), in limited areas Food Assistance for Disaster Relief Organizations may receive additional information about these programs by contacting Food and Nutrition Texas Department of Agriculture PO Box Austin, TX TEX-MEAL ( ) The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 1000, Introduction Page 3

6 If an organization is approved to participate in more than one program at the same time, the CE must ensure that it will maintain separate records for each program and attribute costs to the appropriate program. Funding Each year, USDA Foods and administrative funding are provided to TDA by USDA to administer and operate TEFAP in Texas. TDA uses USDA monies to fund approved administrative costs associated with the operation of TEFAP. Appeals CEs have the right to appeal any adverse action TDA take that affects participation in TEFAP, including the denial of an application. Refer to Section 8000, Denials, Terminations, and Appeals, for additional information regarding appeal rights. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 1000, Introduction Page 4

7 Section 2000 Eligibility and Application Requirements Table of Contents Eligibility Requirements... 3 Organizational Structure and General Requirements... 4 Organizational Structure... 4 Tax Exemption... 4 Special Filing for Small Tax-Exempt Organizations... 4 IRS Automatic Revocation of Exemption List... 4 Single Audit Requirements... 5 Debarment Certification... 5 Initial Applications and Renewals... 7 Initial Applicants... 7 Renewing Contracting Entities... 8 Application... 8 Budget... 8 Training... 8 Site Information... 9 General Requirements... 9 Authorized Representatives for Contracting Entities... 9 Amendments to the Commodity Agreement... 9 Dun and Bradstreet Data Universal Numbering System (DUNS) Selection of Contracting Entities (CEs) Review of Applications Selection of Contracting Entities The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 1

8 Food Banks Alternate and Additional Contracting Entities Visit Prior to Approval of Initial Applications and Renewals The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 2

9 Section 2000 Eligibility As a contracting entity (CE) for The Emergency Food Assistance Program (TEFAP), the organization accepts final administrative and financial responsibility for all sites at which the CE operates or delegates (to an approved subdistributing agency 1 or distribution site 2 ) program activities. Eligibility Requirements CEs, subdistributing agencies, and distribution sites must demonstrate adequate administrative and financial responsibility to manage an efficient and effective food distribution system to be considered to receive and distribute USDA Foods through TEFAP. An organization may be eligible to participate in TEFAP if the organization takes the following actions: Accepts final administrative and financial responsibility for program operations Is a non-profit organization or a public agency Attends all required Texas Department of Agriculture (TDA) training Provides adequate supervisory and operational personnel to effectively manage and monitor TEFAP operations Assumes responsibility for distributions of USDA Foods within contracted service areas Improves the accessibility to USDA Foods for all needy residents throughout the month and shortens the intervals between distributions Includes the needs of the elderly, persons with disabilities, shut-ins, and persons with transportation difficulties in plans to expand or improve USDA Foods services EXAMPLES: Special efforts may include encouraging shut-ins to designate a proxy, arranging separate USDA Foods lines or pick-up times for elderly or disabled persons, and having volunteers help with applications. Cooperates, as necessary, with TDA to identify an area(s) within a contracted service area where subdistributing agencies or distribution sites may be needed. 1 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. 2 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 3

10 Organizational Structure and General Requirements Organizational Structure An organization is eligible to participate in TEFAP as a CE, subdistributing agency, or distribution agency only if it is a nonprofit organization with tax-exempt status or a public agency. Tax Exemption. Non-profit organizations must acquire and maintain tax-exempt status from the U.S. Internal Revenue Service (IRS) either individually or as part of a group ruling. Although the IRS does not require certain organizations (e.g., church organizations) to seek formal determination of tax-exemption, the IRS may issue a determination after application. If an organization acquired tax-exempt status under a group ruling, it must submit proof of affiliation with the parent organization that was given tax-exempt status. If the IRS has given an organization tax-exempt status because it is a non-profit organization, the organization must submit either a formal determination of tax-exempt status from the IRS or proof of participation in another federally funded program that requires an IRS determination of tax-exempt status. If an organization does not submit this proof of tax-exempt status, the application will be denied. If the IRS revokes tax-exempt status, the CE must notify TDA immediately. Special Filing for Small Tax-Exempt Organizations. The IRS maintains specific filing requirements for small tax-exempt organizations whose annual gross receipts are normally $50,000 or less. The Pension Protection Act of 2006 (PPA) requires these organizations to file Annual Electronic Filing Requirements for Small Exempt Organizations (Form 990-N (also known as the e-postcard)), or Short Form Return of Organizations Exempt from Income Tax (Form 990-EZ). Failure to comply with the PPA could result in revocation of an organization s tax-exempt status. Additional information about the filing requirements, as well as information on how to apply for a tax exemption, can be found at IRS Automatic Revocation of Exemption List. CEs, subdistributing agencies, and distribution sites must maintain their tax-exempt status. (Exceptions include governmental and many faith-based organizations.) The IRS maintains a list of organizations that lose their taxexempt status at Exemption-List. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 4

11 At least annually, TDA will review the IRS list to ensure CEs have the required tax exempt status. At initial application and at least annually afterward, CEs must check the list to ensure that their subdistributing agencies and distribution sites are not on the list. If any organization appears on the list, the CE must take the following steps: 1. Notify the subdistributing agency or distribution site in writing that it has 30 days to provide documentation that it has applied for reinstatement of tax-exempt status. If the organization does not provide documentation within 30 days, the organization will be terminated from TEFAP. 2. Forward documentation of IRS recognition of tax-exempt status to TDA within 180 days of the notification specified in step 1. If the organization does not provide proof within 180 days, the organization will be terminated from TEFAP. A CE may grant one 90-day extension if the subdistributing agency or distribution site demonstrates that its inability to obtain appropriate status during the initial period was due to circumstances beyond the organization s control. Single Audit Requirements. Nonprofit and nonfederal organizations must submit one or more of the following to verify their compliance with Single Audit Act requirements: A copy of an organization-wide or program-specific audit that has been determined to meet the requirements of the Single Audit Act A completed Annual Audit form (via TX-UNPS or paper), certifying that the CE will obtain, if necessary, an acceptable audit that meets the requirements of the Single Audit Act Refer to TEFAP Handbook, Section 5000, Visits, Reviews, and Audits, Audits for specific information related to audit requirements. Debarment Certification. Debarment is an action taken by a debarring official to exclude a person or entity from participating in covered contracts. A person or entity excluded this way is debarred. TDA requires CEs to provide debarment certifications for covered contracts. Three types of covered contracts exist: 1. Any nonprocurement transaction that involves federal funds of any amount. This type of transaction includes (but is not limited to) a subgrant between TDA and the CE or between the CE and either its subdistributing agency or distribution site. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 5

12 2. Any procurement contract for goods or services at or above the small-purchase threshold of $50, Any procurement contract for goods or services where a person or entity will have a critical influence on or substantive control over the covered transaction. Such a person or entity includes (but is not limited to) a o consultant, o principal investigator, o provider of audit services required by TDA or a federal funding source, or o researchers. TDA offers the following three options for CEs to provide debarment certification for subdistributing agencies or for distribution sites: Search the website The System for Award Management (SAM) and print the page that shows the person or entity is not debarred. Store the printed page with the covered contract records. Include the following debarment certification in the CE s subcontracts: By signing this Agreement, the subdistributing agency or distribution site certifies that neither it nor any principal is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this Contract by any federal department or agency or by the State of Texas. Obtain from the person or entity TDA s Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion for Covered Contracts (Form H2048). TDA will terminate the Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Department of Agriculture ( Commodity Agreement ) if an organization fails to provide one of the options above for any subdistributing agency, distribution site, person, or entity that meets the above criteria. Any contract that contains federal assistance and that is held by a CE who is excluded from entering into such contracts will be considered void, effective on the date of exclusion. For a copy of Certification Regarding Debarment Suspension, Ineligibility and Voluntary Exclusion for Covered Contracts (Form H2048), go to choose Programs, choose The Emergency Food Assistance Program, choose TEFAP Administration and Forms, and enter the form number in the appropriate field. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 6

13 Initial Applications and Renewals Initial Applicants In the initial application process, applicants should submit a complete Commodity Agreement, which is a permanent agreement between TDA and the CE. The Application for Participation/Plan of Operation must be completed online in the Texas United Nutrition Programs System (TX- UNPS) at It must be submitted annually with all necessary supporting documentation. The Application for Participation/Plan of Operation provides information about the organization and how it plans to operate TEFAP. If a potential CE submits an incomplete or incorrect application, TDA will request in writing that the information needed to complete the application be submitted within thirty days. An incomplete Application for Participation/Plan of Operation will delay participation in TEFAP. If incomplete items are not corrected, an organization will not be eligible to participate. Upon approval of the Commodity Agreement and Application for Participation/ Plan of Operation, the CE will receive a copy of the signed Commodity Agreement. The Application for Participation/Plan of Operation will be approved through TX-UNPS. TDA will not issue USDA Foods or reimbursement for administrative costs prior to executing the Commodity Agreement and approving the Application for Participation/Plan of Operation. TDA s Food and Nutrition program specialist can answer questions and provide technical assistance. As part of the application process, an organization must meet the following requirements: 1. Provide proof of tax-exempt status if the organization is a non-profit organization 2. Demonstrate adequate administrative and financial responsibility to manage an effective food distribution system 3. Identify and execute agreements with subdistributing agencies that will be responsible for distributing, transporting, or storing USDA Foods 4. Provide information for each proposed distribution and storage site 5. Visit each site before operating, in any capacity, TEFAP at the site 6. Submit a complete management plan that includes staffing needs and an administrative budget 7. Certify that the CE will train administrative and site personnel The Commodity Agreement is a legally binding document that specifies the rights and responsibilities of both the CE and TDA. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 7

14 Renewing Contracting Entities Renewing CEs must complete the Application for Participation/Plan of Operation online in TX- UNPS at It must be submitted annually with all necessary supporting documentation. This application, which provides information about the organization and how it plans to operate TEFAP, is approved through TX-UNPS. Each renewing CE must meet the following requirements: 1. Provide proof of that it has maintained tax-exempt status if the organization is a nonprofit organization (For more information, see IRS Automatic Revocation of Exemption List in this handbook section.) 2. Identify and execute agreements with subdistributing agencies that will be responsible for distributing, transporting, or storing USDA Foods 3. Provide information for each proposed distribution and storage site 4. Visit each site before operating, in any capacity, TEFAP at the site 5. Submit a management plan that includes an administrative budget 6. Certify that the CE will train administrative and site personnel The Commodity Agreement is a legally binding document that specifies the rights and responsibilities of both the CE and TDA. Application Budget. During the application approval process and as requested by TDA thereafter, CEs must submit budgets to project the costs of distributing USDA Foods during a specified period. NOTE: A budget is a planning document and is not the amount TDA will reimburse the CE. Training. CEs must train each staff member before they assume any TEFAP duty at one or more distribution and storage sites. To ensure compliance with state and federal regulations, the staff and volunteers of CEs, subdistributing agencies, and distribution sites must be trained and supervised, as appropriate to their assignments in the following activities: Properly transporting, storing, handling, and using USDA Foods Applying eligibility criteria for households Ensuring client rights (including civil rights requirements) Following complaint and monitor review procedures Processing applications or requests for meals in the contracted service area, including, when necessary, assisting applicant households to complete their applications Referring residents of other contracted service areas to locations where they may apply for USDA Foods The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 8

15 Site Information. CEs must serve a county or other identifiable service area that directly or indirectly (through subdistributing agencies) distributes USDA Foods to emergency feeding organizations such as food pantries, soup kitchens, and housing authorities. Prior to operating TEFAP at a specific site where USDA Foods are distributed or stored, the organization must conduct a visit to the site to verify that it will operate in full compliance with the requirements mandated in the Commodity Agreement and the Application for Participation/ Plan of Operation. Refer to TEFAP Handbook Section 4000, Managing the Program, Site Requirements, and Monitoring by CEs, for specific instructions. General Requirements. Initially, and at least annually thereafter, CEs must means test each household to determine its eligibility for USDA Foods for home consumption. Refer to TEFAP Handbook, Section 4000, Managing the Program, Income, and Exceptions to Income Eligibility Requirements, for specific instructions. CEs will distribute USDA Foods to eligible participants through prepared meals that are served on-site and food packages that may be used for home consumption. CEs must make reasonable efforts to safeguard against households dual participation in TEFAP. At a minimum, CEs must 1) maintain a record of distributions to households to deter abuse and 2) train staff and volunteers to inquire whether a household receives USDA Foods from other sources. Authorized Representatives for Contracting Entities. As designated on the organization s Application for Participation/Plan of Operation and/or on Certification of Authority for External Users (Form FND-101), an authorized representative is any individual who is individually authorized on behalf of the contracting organization to make written agreements with TDA, sign documents or reports about the agreement, and present claims for reimbursement, when appropriate. An authorized representative can be an employee of the organization, a volunteer, or a consultant. Amendments to the Commodity Agreement. The Application for Participation/Plan of Operation stipulates that CEs will perform according to the Commodity Agreement, supporting documents, and approved amendments. Therefore, approved amendments to the Application for Participation/ Plan of Operation do not require an amendment to the Commodity Agreement. CEs will request amendments to Form H1523, the Application for Participation/Plan of Operation, and TDA will respond to requests in TX-UNPS. CEs must include all supporting documentation to complete the amendment request. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 9

16 CEs must request an application amendment whenever they wish to take the following actions: Add or eliminate an authorized representative Note: CEs must also complete and submit Certificate of Authority for External Users (Form FND-101,) when adding or eliminating an authorized representative. Make any other change that could potentially affect reimbursement Dun and Bradstreet Data Universal Numbering System (DUNS). Nonfederal agencies and organizations that do business with the Federal government must use the Dun and Bradstreet Data Universal Numbering System (DUNS) as their identifier. The DUNS number will not replace the Employer Identification Number (EIN), but will become an identifier for a nonfederal entity to apply for funding under a Federal assistance program. The DUNS number is a nine-digit number issued by Dun & Bradstreet to each business located in the Dun & Bradstreet database having a unique, separate, and distinct operation. The DUNS number is random and the digits have no apparent significance. It is a tool of the federal government to track how federal money is distributed. To obtain a DUNS number free of charge, call Dun & Bradstreet using the toll-free number, and indicate that the organization is a Federal grant applicant/prospective applicant. Organizations can also request a DUNS number at Please be advised the waiting period to obtain a DUNS number can be anywhere from 24 to 72 hours, or several weeks, so organizations should request their numbers as soon as possible. Organizations applying for participation in any of the federal nutrition programs administered by TDA must obtain and provide to TDA their DUNS number with their application for participation. Selection of Contracting Entities (CEs) TDA will only approve the participation of a CE that has submitted an application with sufficient information to enable a determination of eligibility. Review of Applications TDA will notify the CE of the approval or denial of a complete application within thirty days of receipt. If TDA denies the application, TDA will notify the organization in writing of the reasons for the denial and explain the right to appeal. Refer to Section 8000, Denials, Terminations, and Appeals, for additional information. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 10

17 Selection of Contracting Entities USDA Foods and administrative funds are issued by USDA to TDA for service areas that TDA and its CEs pre-determine. TDA will approve applications and agreements only from organizations that will serve eligible participants in these areas. TDA gives preference to organizations that have an established system for the receipt, storage, transportation, and distribution of USDA Foods. However, TDA does not contract exclusively with such organizations. Food Banks. Food banks operate in all pre-determined service areas of Texas, and food banks have an established system for the receipt, storage, transportation, and distribution of USDA Foods. Food banks 1) directly serve USDA Foods recipients; and 2) indirectly serve USDA Foods recipients through agreements with other agencies and organizations, such as food pantries and soup kitchens. As a result, TDA contracts with food banks to distribute USDA Foods in TEFAP. Alternate and Additional Contracting Entities. At TDA s discretion, TDA may contract with organizations that lack an established system for the receipt, storage, transportation, and distribution of USDA Foods to operate TEFAP. TDA might choose to contract with such an organization if, for example, a food bank cannot serve a predetermined service area. Because TDA contracts with these organizations, they become CEs. There are two types of TEFAP CEs that are not food banks. 1. alternate contracting entity Organizations other than food banks that contract with TDA to distribute USDA Foods to the needy residents of a county or counties. Unless otherwise specified by TDA, food bank CEs will receive, handle, store, and distribute fair shares of USDA Foods to alternate CEs. Fair-share allocations must be based on the number of residents in the counties served by the alternate CEs who live at or below the federal poverty level and the number of unemployed residents. 2. additional contracting entity organizations that contract with TDA to distribute USDA Foods to the following persons: o o All needy persons who reside in an identifiable portion of a county or counties Specific groups of needy persons (such as the elderly or disabled) who reside in a county or counties The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 11

18 Additional CEs have service areas that overlap other contracted service areas. Unless otherwise specified by TDA, food bank CEs will receive, handle, store, and distribute to additional CEs a fair share of USDA Foods, based on historical or projected USDA Foods usage rates (such as the number of meals and/or households served), or by another method, as specified by TDA. NOTE: Additional CEs receive Priority 1 TEFAP distributions (see Distribution Priorities in this handbook section). TDA coordinates with the appropriate food bank CE to determine the need for alternate and additional CEs and, if necessary, to determine if eligible agencies or organizations are available and willing to distribute USDA Foods. Alternate and additional CEs receive their allocations of USDA Foods from CEs that are food banks. If a food bank CE is not available to distribute USDA Foods to alternate or additional CEs, TDA will provide a different means for distribution (such as commercial distribution or delivery directly from USDA). Visit Prior to Approval of Initial Applications and Renewals TDA conducts a visit prior to approval of an applicant s administrative offices and sites to assess the potential for successful program operations and to verify information provided in the application. Prior to approving the Application for Participation/Plan of Operation, TDA may visit all CEs that did not participate in the program during the previous program year; all CEs that, as a result of significant operational problems noted during the previous program prior year, have been determined by TDA to need a visit prior to approval; and all sites that TDA has determined to need a visit prior to approval. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 2, Eligibility and Application Requirements Page 12

19 Section 3000 Program Agreement Table of Contents Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Department of Agriculture and Application for Participation/Plan of Operation... 2 Agreements Between Contracting Entity and Subdistributing Agencies... 3 Financial Management System... 3 Administrative Costs... 4 Allowable Administrative Costs... 4 Unallowable Administrative Costs... 5 Adding or Deleting Allowable Costs... 6 Special Transportation Funds... 6 Reimbursing Non-USDA Foods Costs... 7 Allocation by a 60/40 Formula... 7 Allocation by Usage Rates... 7 Alternate Allocation Methods... 7 Shared Maintenance Fees... 7 Reimbursement Limits: Letters of Credit... 8 Reimbursement Rates... 8 Actual Reimbursement Rate... 8 Notification of Change in Reimbursement Rate... 8 Claims for Reimbursement... 8 Annual TEFAP Budgets... 8 The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 1

20 3000 Program Agreement Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Department of Agriculture and Application for Participation/Plan of Operation The Texas Department of Agriculture (TDA) will approve the Application for Participation/Plan of Operation, which stipulates that a contracting entity (CE) will perform according to the Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Deparment of Agriculture ( Commodity Agreement); Application for Participation/Plan of Operation; supporting documents; and approved amendments. The Commodity Agreement provides the terms and conditions for participation in The Emergency Food Assistance Program (TEFAP). These terms and conditions relate to the following topics: Use, storage, and disposition of USDA Foods Accountability Certification Debarment, suspension, ineligibility, or voluntary exclusion for covered contracts Federal lobbying Subcontracts for goods and services Civil rights Program payments NOTE: TDA may terminate the Commodity Agreement, as provided by federal regulations, state rules, and the terms and conditions of the agreement. Additionally, the agreement may be terminated immediately by mutual consent or by TDA, without mutual consent, for material breach of the agreement. After TDA has approved the Application for Participation/Plan of Operation, it can be amended only with TDA s consent. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 2

21 NOTE: It has come to the attention of TDA that a private company, Federal Publishing Limited, Inc. (aka Federal Publication), of Miramar, Florida, is marketing a publication entitled USDA United States Department of Agriculture and FDA Food and Drug Administration Compliance Journal This publication is not issued or approved by the United States Department of Agriculture (USDA), nor is it required for CEs participation in TEFAP. TDA offers materials and guidance regarding compliance with TEFAP at no cost at Additionally, the USDA provides, at no cost, materials and guidance at or Agreements Between Contracting Entity and Subdistributing Agencies If a CE is unable to fulfill one or more of the requirements identified in the Commodity Agreement and Application for Participation/Plan of Operation, the CE may be able to enter into a written agreement with a subdistributing agency to fulfill these requirements. These agreements are subject to TDA approval. TDA will approve or deny these agreements during the application process. Financial Management System A CE must maintain a financial management system that provides accurate, current and complete disclosure of the financial status of the CE s TEFAP operation. This system must ensure the following: Accounting records are supported by source documentation, including canceled checks, paid bills, payroll, and contract and subcontract award documents. Records identify the source and application of funds and contain information about program reimbursement claimed and paid by TDA, authorization, obligations, unobligated balances, assets, liabilities, outlays, and income. Records include accurate, current, and complete reports concerning program participation and the financial results of the program. Audits are completed yearly to determine, at a minimum, the fiscal integrity of financial transactions and reports and compliance with laws, regulations, and TDA guidelines. A systematic method is maintained to resolve audit and review findings and recommendations. Requests for claim adjustments are submitted to TDA within 60 days of the claim month. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 3

22 Administrative Costs TDA determines the necessity and acceptability of administrative cost incurred by a CE in accordance with federal regulations and state rules. CEs can reference these requirements in the 1. Code of Federal Regulations (CFR) at 7 CFR Part 251; 2. Texas Administrative Code (TAC) at Title 4, Part 1, Chapter 24; and 3. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR Part 200. From available federal funds, TDA reimburses CEs their allowable direct and indirect costs of processing, transporting, and distributing USDA Foods. In addition, at the end of each federal fiscal year, after reimbursing all timely received claims of costs of distributing USDA Foods, TDA will reallocate remaining funds to reimburse the allowable costs of distributing non-usda Foods. Allowable Administrative Costs The following costs are specifically identified as allowable costs: Actual, direct and indirect costs of transporting, processing, repackaging, storing, and handling USDA Foods. As applicable, other costs that are reasonably attributable to distributing USDA Foods, including cost of supplies, printing, record-keeping, auditing, publishing USDA Foods information, training material, and announcements of distributions. CEs may claim direct and indirect expenses. Except for the party who actually pays an expense, there is no difference between a direct and an indirect expense. Example: A CE directly pays the costs of storing USDA Foods in its own warehouse, or in storage space it leases, and indirectly pays for the same expense when reimbursing a subagency for the subagency s cost of storing TEFAP foods. Allowable expenses, direct and indirect, are those incurred by a CE in order to comply with the terms and conditions of the Commodity Agreement. Allowable expenses relate to receiving, handling, storing, and distributing USDA Foods, in the following broad categories: Storage facilities Equipment Salaries Transportation Other (requires itemization and explanation) The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 4

23 Though cost allocation methodologies are not mandated by TDA, such methodologies must be reasonable. Examples: Determining salary costs of less than full-time employees may necessitate the ongoing use of time sheets. The cost of storage and office space in a multi-purpose facility can be determined using the percentage of square footage as the basis. Examples of Allowable Expenses: Accounting services Advertising program availability Audits Bonding costs Depreciation and Use Allowance Employee salary and fringe benefit Legal expenses in contracting and subcontracting Maintenance and supplies Transportation (including costs of permits/licenses to transport commodities) Travel for program purposes Cost of meals served to volunteers Building and office space USDA Foods storage costs Unallowable Administrative Costs Expenditures by a CE that are not applicable to TEFAP objectives are unallowable costs, which are identified in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200). Unallowable costs include the following: Bad debts because of uncollectible accounts and other claims and related costs including repayment of audit exceptions Contributions to a contingency reserve or similar provisions for unforeseen events Contributions and donations including USDA Foods and other donated food, labor, and supplies Entertainment including amusements, social activity, and related costs such as meals, beverages, lodging, rentals, transportation, and gratuities Fines or penalties resulting from violations of or failure to comply with federal, state, or local laws and regulations Salary and other expenses of the governor and state and local legislators Costs resulting from non-reimbursement of expenses under other programs Value of in-kind donations Administrative costs not included in the CE s approved budget Capital expenditures for: The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 5

24 o Acquisition of land or interest in land o Acquisition or construction of buildings or facilities o Alterations to existing buildings or facilities o Nonexpendable equipment o Repairs that increase the material value or the useful life of buildings, facilities, or nonexpendable equipment o Other capital assets including vehicles Fund-raising expenses incurred to raise capital or to obtain contributions such as financial campaigns, endowment drives, and solicitation of gifts and bequests Rental or lease of buildings, facilities, or equipment if the rental or lease agreement includes a purchase option or if the rental extends beyond the termination date for the program operations Rental or use charges for equipment or space owned by a CE Reimbursement for the distribution of USDA Foods that exceeds allocated caseload Costs incurred for rearrangement and alteration of facilities not required specifically for the program Actual losses that could have been covered by permissible insurance (through an approved self-insurance program or otherwise) If costs paid with TEFAP administrative funds were not allowable, the CE submits an amended claim to remove the disallowed costs. TDA recovers the money in the next claim period. If there are no funds available to cover the unallowable costs, the TDA sends a demand letter to the CE to recover the unallowable costs. TDA may require a corrective action plan (CAP) to prevent future improper use of administrative funds. Adding or Deleting Allowable Costs If necessary to ensure the equitable distribution of USDA Foods, TDA may, after consulting with the affected CEs and other stakeholders identified by TDA, change policy to add or delete reimbursable costs of distributing USDA Foods. Special Transportation Funds According to the terms and conditions of individual TDA contracts and based on the availability of administrative funds, TDA may provide special transportation funds to CEs to offset the costs of distributing USDA Foods to rural or difficult-to-serve program recipients. NOTE: TDA may limit special transportation funds reimbursements to the costs of distributing USDA Foods. If TDA chooses to reimburse the costs of distributing non-usda Foods with special transportation funds, such reimbursements will occur only if funds are available during reallocation. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 6

25 Reimbursing Non-USDA Foods Costs At the end of a federal fiscal year, after reimbursing CEs their allowable costs of distributing USDA Foods, TDA will reallocate available administrative funds and reimburse eligible CEs for costs of distributing non-usda Foods. Allocation by a 60/40 Formula Each year, after reserving funds needed for program operation, TDA allocates available administrative funds to CEs and alternate CEs by county, using a 60/40 formula. The 60/40 formula is based 60% on the number of county residents who live at or below the official poverty line, and 40% of the number of county residents who are unemployed. EXCEPTION: TDA allocates administrative funds to CEs and additional CEs (whose service areas are the same or overlap) based on USDA Foods usage information (see TEFAP Handbook, Section 3000, Program Agreement, Allocation by Usage Rates ). Allocation by Usage Rates TDA may contract with CEs serving the same or overlapping areas. For service areas that are the same or overlap, TDA allocates a fair share of administrative funds based on USDA Foods usage rates. USDA Foods usage rates are determined using historical and/or projected information on the number of meals and/or households served or using other information, as appropriate. Alternate Allocation Methods As necessary, TDA may elect an alternate method of allocating administrative funds to CEs. An alternate method may replace or complement the current allocating method, as necessary, to ensure that TEFAP is available in areas where poor economic conditions are known to exist, ensure that all recipient groups have access to USDA Foods, and/or distribute USDA Foods in an equitable manner. In addition, TDA may modify the terms of any Commodity Agreement or contract, as needed, to ensure that reimbursements from administrative funds are equitable. However, before changing allocation methods or modifying contracts, TDA will consult with affected CEs and will provide notification of the change. Shared Maintenance Fees Shared maintenance fees are not an allowable administrative cost. TDA will not reimburse this expenditure. CEs may directly charge recipient agencies (RAs) their usual and customary shared maintenance fees. At its discretion, TDA can require CEs to reduce or waive shared maintenance fees. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 7

26 Reimbursement Limits: Letters of Credit After USDA notifies TDA of Texas' share of federal administrative funds, TDA calculates each CE s share of funds. Individual notices to CEs include Letter of Credit amounts, which are the reimbursement limits for the program year. TDA may divide a CE s yearly reimbursement limit into monthly reimbursement limits. NOTE: TDA may reimburse above Letter of Credit levels only if reallocated or if other funds become available. Reimbursement Rates Actual Reimbursement Rate Actual reimbursement rates or amounts depend on the amount of available administrative funds and the allocation method used. Notification of Change in Reimbursement Rate TDA will provide prior notice to CEs of a change in the allocation and/or the reimbursement rate or amount. Claims for Reimbursement TDA reimburses CEs for their actual, allowable costs of storing, transporting and distributing USDA Foods, as administrative funds are available, according to the terms and conditions of the Commodity Agreement. Annual TEFAP Budgets During the annual application approval process and as requested by TDA thereafter, CEs must submit budgets to project the costs of storing, transporting, and distributing USDA Foods during a specified period. NOTE: A budget is a planning document and is not the amount that TDA will reimburse the CE. The Emergency Food Assistance Program Handbook Texas Department of Agriculture July 2015 Section 3, Program Agreement Page 8

27 Section 4000 Managing the Program Table of Contents Guidance Documents... 4 Terms and Conditions... 4 Fraud and Negligence... 5 Procedure for Reporting Fraud... 5 Sites... 5 Site Requirements... 5 Subdistributing Agencies... 5 Distribution Sites... 6 Public Information... 8 How to Inform the Public... 8 Language of Program Materials... 9 Training and Staff Responsibilities... 9 Contracting Entity Training... 9 Staff Training... 9 Eligibility Determinations... 9 Household Application Intake Forms Created by Contracting Entities Adding Pages to Form H Persons Requesting Meals Income Countable Income and Income Exclusions Maximum Allowable Income Exceptions to Income Eligibility Requirements Categorically Eligible Households That Exceed 185% of the Federal Poverty Level Residency Identity and Citizenship Certification Periods Households Households That Exceed 185% of the Federal Poverty Level Confidentiality The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 1

28 Participant Rights and Responsibilities Refusal of USDA Foods Participant Referral Request Monitoring by CEs Appeals Administrative Review Time Restriction for Request Denial or Dismissal of Request Continuation of Benefits Administrative Review Official (ARO) Conducting a Hearing Final Decision Allocation Bonus Foods Entitlement Foods Alternate Methods of Allocation Distribution Sites Distribution Sites as Emergency Food Providers Alternate CEs Additional CEs Distribution Distribution Priorities Non-Needy Persons Who Eat at Priorities 1 and Day Period to Meet Priority 1 Needs Distribution Quantities Distribution to Contracted Service Area Direct Shipments Receipt and Inspection of USDA Foods Electronic Receipting for USDA Foods Inspection of USDA Foods Storage Temperature Air Circulation First In, First Out (FIFO) Stacking Protection of Stored Food Storage of Food during Summer Months Storage at Subdistributing Agencies Storage Facility Review Inventory Requirements Perpetual Inventory Date of Possession Physical Inventory Distribution Site, Additional CE, and Alternate CE Inventory Requirements The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 2

29 Determining Inventory Levels of USDA Foods Reporting Inventory Levels of USDA Foods to TDA Food Losses Holds and Recalls Disposal of Out-of-Condition USDA Foods Reimbursement of Claims Filing and Submitting Monthly Claims Identifying Costs Separately End-of-the-Year Due Date Reallocation of Administrative Funds Adjusted Claims Program Documentation Retention Period Availability of Records Statistics by County Backpack Program Distribution Site Responsibilities Permission Slips Signature for Receipt Storage and Use Records Contracting Entity s Responsibilities Agreement Distribution Plan Information for the Application for Participation/Plan of Operation Site Visits Complaints USDA Foods Complaint Form F&N Complaint Form Disaster and Distress Situations Prohibited Actions Payment for USDA Foods Join an Organization Restricted Practices USDA Foods to Child and Adult Care Food Program Organizations Activities Unrelated to USDA Foods The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 3

30 Section 4000 Managing the Program Guidance Documents While operating The Emergency Food Assistance Program (TEFAP), contracting entities (CEs) must comply with program requirements found in the following: Commodity (USDA Foods) Agreement Between Contracting Entity (CE) and Texas Department of Agriculture ( Commodity Agreement ) Application for Participation/Plan of Operation Supporting documents Federal and State rules United States Department of Agriculture (USDA) policies, as issued by that agency Texas Department of Agriculture (TDA) policies as set forth in this handbook Terms and Conditions CEs must comply with the terms and conditions of the Commodity Agreement, Application for Participation/Plan of Operation, federal regulations, state rules, and the policies in this handbook, including the following: Controlling inventory Completing and submitting an annual inventory report Completing and maintaining a record of storage facility reviews (completed in conjunction with the annual inventory) Reporting changes that may affect the terms and conditions Agreeing to be monitored by USDA and TDA Reviewing and monitoring subdistributing agencies and distribution sites to ensure program compliance The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 4

31 Fraud and Negligence fraud The intentional concealment or willful misrepresentation of information to receive USDA Foods. negligence Improper distribution or use of USDA Foods; or failure to properly store, handle, or care for the food). misuse of USDA Foods Includes (but is not limited to) selling, trading, or giving them to ineligible persons. CEs assume financial liability for negligent or fraudulent administration of TEFAP, if they are aware of such activity but choose not to report to TDA. Procedure for Reporting Fraud CEs should create and follow written procedures for fraud or misuse of foods. CEs must immediately report suspected fraud or misuse of USDA Foods to TDA. When reporting, include information on the amount of USDA Foods involved, location of the incident, suspected parties, and other details and facts. 1 Sites Site Requirements CEs must accept final administrative and financial responsibility for subdistributing agencies and distribution sites. During the application process, CEs are required to visit each site as provided in TEFAP Handbook, Section 2000, Eligibility and Application Requirements, Site Information. Throughout the program, CEs must revisit each site to monitor program operations and to verify compliance with program requirements according to the Commodity Agreement and the Application for Participation/Plan of Operation. Refer to the topic Monitoring by CEs in this handbook section for specific instructions related to these visits. Subdistributing Agencies When selecting sites where USDA Foods will be stored and later distributed, CEs must evaluate the ability of subdistributing agencies to consistently store USDA Foods at that site while complying with the Commodity Agreement and Application for Participation/Plan of Operation. CEs should refer to the Commodity Agreement and Application for Participation/Plan of Operation for a complete list of program requirements that must be met at each distributing agency. These requirements include the following: 1 To read more about fraud, see TEFAP Handbook, Section 8000, Denials, Terminations, and Appeals. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 5

32 Reviewing storage facilities that house USDA Foods and maintaining a record of findings Providing to TDA, at the time of a TDA compliance review or at TDA s request, a copy of the current health inspection certificate and current pest control records for the distributing agencies Complying with all requirements for receiving, distributing, transporting and storing USDA Foods as provided in the Commodity Agreement, TDA policy, and USDA regulations and instructions, including requirements relating to dry, chilled, and frozen product received directly from USDA Prohibiting the sale, trade, or disposal of USDA Foods without TDA approval Entering into agreements with subdistributing agencies or distribution sites. Responsibilities include compliance with federal regulations; state rules and policies; terms and conditions similar to the CE s agreement with TDA, including the requirements of the Commodity Agreement, Application for Participation/Plan of Operation, amendments, and addenda Training each staff member before they assume any TEFAP duty at one or more distribution, storage, or certification sites Training each staff member during each program year thereafter, including, at a minimum, in the required civil rights curriculum Documenting all staff training and retaining this documentation with the CE s records Requiring subdistributing agencies and distribution sites to adhere to the following requirements: Maintaining program information Determining the eligibility of applicants who apply for USDA Foods Training subdistributing agencies and distribution sites staff and volunteers Maintaining confidentiality of household information Prohibiting certain activities at distribution sites that are unrelated to the distribution of USDA Foods Monitoring and reviewing subdistributing agencies and distribution sites compliance with program requirements as provided in federal regulations, state rules and policies at each site where USDA Foods are stored or distributed Notifying TEFAP applicants and participants in writing of their right to an administrative review Distribution Sites When selecting sites where USDA Foods will be distributed, CEs should evaluate the administrative cost of distributing USDA Foods at that site and the ability of the organization to consistently distribute in full compliance with the Commodity Agreement and Application for Participation/Plan of Operation. CEs must ensure that all distribution sites operate according to the terms and conditions of the Commodity Agreement and Application for Participation/Plan of Operation. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 6

33 CEs should evaluate a potential distribution site and the need for a site coordinator, separate and apart from the organization s administrative staff. At each of a CE s distribution sites, the CE should plan for and instruct site coordinators on the proper handling of USDA Foods. CEs must ensure that all USDA Foods are returned to one of the CE s storage sites or properly stored at the site according to the terms and conditions of the Commodity Agreement and Application for Participation/Plan of Operation. CEs should refer to the Commodity Agreement for a complete list of program requirements that must be met at each distribution site. These requirements include the following: Providing to TDA or the subdistributing agency, at the time of a compliance review or monitor review, a copy of the current health inspection certificate and current pest control records for the distributing agency Providing, at the request of TDA or the subdistributing agency, a copy of the current health inspection certificate and current pest control records for the distributing agency Complying with all requirements for receiving, distributing, transporting and storing USDA Foods as provided in this agreement, TDA policy, and USDA regulations and instructions, including requirements relating to dry, chilled, and frozen product received directly from USDA Distributing USDA Foods only to persons (or, if applicable, to distribution sites) who have been determined eligible to participate in TEFAP Prohibiting the sale, trade, or disposal of USDA Foods without TDA approval Prohibiting requiring USDA Food recipients or, if applicable, distribution sites, to pay for USDA Foods in money, materials, or service Entering into agreements with distribution sites. Responsibilities include compliance with federal regulations; state rules and policies; terms and conditions similar to the CE s agreement with TDA, including the requirements of the Commodity Agreement, Application for Participation/Plan of Operation, amendments, and addenda Training each staff member before they assume any TEFAP duty at one or more distribution and storage sites Training each staff member during each program year thereafter, including, at a minimum, in the required civil rights curriculum Documenting staff training and retaining this documentation with the CE s records The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 7

34 Requiring distribution sites to adhere to the following requirements: Maintaining program information Determining the eligibility of applicants who apply for USDA Foods Training distribution sites staffs and volunteers Maintaining confidentiality of household information Prohibiting certain activities at distribution sites that are unrelated to the distribution of USDA Foods Monitoring and reviewing distribution sites compliance with program requirements as provided in federal regulations, state rules and policies at each site where USDA Foods are stored or distributed Notifying TEFAP applicants and participants in writing of their right to an administrative review Public Information CEs must inform the public of distributions of USDA Foods. Public notices must meet the following requirements: Target needy 2 households whose members are unemployed or have low incomes and households that include elderly or disabled people Include the locations of distribution sites Provide the days and hours of distributions (or, if applicable, notify the public that a regularly scheduled distribution is unavailable and provide an explanation) How to Inform the Public Suggested methods to advertise the availability of USDA Foods include, but are not limited to, the following: The media (TV, radio, and newspaper) Civic and religious organizations City and county governments Social service organizations, upon request NOTE: TDA encourages CEs to inform the public of all USDA Foods distributions (not just mass distributions). 2 A needy person is one who, because of economic status, is eligible to receive food assistance from a public or private, nonprofit institution. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 8

35 Language of Program Materials When a significant proportion of the population that a CE serves is composed of non-english or limited English speaking persons who speak the same language, the CE shall provide program materials to such persons in a language they understand. Translation of TEFAP materials is an allowable administrative expense. 3 Training and Staff Responsibilities Contracting Entity Training The staff and volunteers of CEs, subagencies, and distribution sites must be trained and supervised, as appropriate to their assignments, in the following tasks: Properly transporting, storing, handling, and using USDA Foods Applying eligibility criteria for households Ensuring client rights (including civil rights requirements) Following complaint and administrative review procedures Processing household applications or requests for meals in the contracted service area, including, when necessary, assisting applicant households to complete their applications Referring residents from other contracted service areas to locations where they may apply for USDA Foods Staff Training After a CE s application has been approved, it must conduct training for administrative and site personnel before they assume any TEFAP duty at one or more sites. Further, CEs must train each individual during each program year thereafter. CEs should notify all personnel, in writing, of the date, time, location, and importance of attending a training session. CEs must document staff training and retain this documentation with TEFAP records. Eligibility Determinations Initially, and at least annually thereafter, means test each household to determine its eligibility for USDA Foods for home consumption. (See Income in this handbook section for more information.) 3 For more about allowable expenses, see TEFAP Handbook, Section 3000, Allowable Administrative Costs. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 9

36 CEs, subdistributing agencies, and distribution sites must distribute USDA Foods to eligible households in an equitable manner. The subdistributing agency or distribution site must use the same criteria that is used for all households to determine the eligibility of the personnel or volunteers of the subdistributing agency or distribution site who apply for USDA Foods. Household Application At the time of its initial application and when reapplying for USDA Foods, a household must agree to provide sufficient information to determine eligibility, including the following: Name of household member applying Address (if available) Number of household members The self-reporting of household s gross income Signature of a household member Only the information above is required to obtain USDA Foods. NOTES: The household member signing the application must be at least 18 years of age unless no household member is 18 years of age. A household may designate, in writing, a person other than a household member to apply for and/or provide information on behalf of the household. Such a person is referred to as a proxy. The Participant Application for USDA Foods (Form H1555) contains federally required information. TDA prefers that CEs use this form to intake participants. Only the information collected on the Participant Application for USDA Foods (Form H1555) is required for a participant to obtain USDA Foods. Intake Forms Created by Contracting Entities CEs may create their own forms to collect federally required information as well as additional data (such as social security numbers) for other services for example, clothing aid or assistance with bills. The federally required information to determine TEFAP eligibility must be collected before the CE requests additional data. The collection of additional data must not be a real or perceived barrier to participation in TEFAP. Therefore, if a CE creates its own form, the form must specify that a participant will receive USDA Foods through TEFAP even if a participant refuses to provide the additional data. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 10

37 Adding Pages to Form H1555 If a CE uses the Participant Application for USDA Foods (Form H1555) then adds extra pages to collect additional data, the extra pages must specify that a participant will receive USDA Foods through TEFAP even if a participant refuses to provide the additional data. The information to determine TEFAP eligibility must be collected before the CE requests additional data. CEs can obtain the Participant Application for USDA Foods (Form H1555) at choose Programs, choose The Emergency Food Assistance Program, choose TEFAP Administration and Forms, and enter the form number in the appropriate field. To receive USDA Foods through TEFAP, CEs must not request or require a TEFAP applicant to provide proof of income unless the information provided is questionable, proof of identification or citizenship, and/or a driver s license, or birth certificate. Households must agree to the following: Cooperate (to the extent the household is capable) to clarify or provide information needed to establish eligibility Repay, on demand, to the CE the value of USDA Foods received if an error in eligibility is found because of erroneous information provided by the household Not sell or exchange USDA Foods Report changes in circumstances, such as income or household size NOTE: During a certification period, CEs must act on reported changes affecting eligibility or amount of benefits and document changes that include pertinent information (such as a change of address). CEs must act on other changes only when/if the household requests recertification. Persons Requesting Meals Organizations serving meals containing USDA Foods in a congregate setting 4 are not required to determine income eligibility of persons who request a meal. 4 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 11

38 Income Except as provided in Exceptions to Income Eligibility Requirements (in this handbook section), means tests of households are used to determine their eligibility for USDA Foods distributed by TEFAP. The eligibility process is as follows. Obtain a verbal report from the household of total weekly, monthly, or yearly gross earned and unearned income. Proof of income is not required unless the information provided is questionable. NOTE: Gross earned income is the amount before deductions. If income is from farming or selfemployment, eligibility is based on net income. Determine the net earned income of farmers and self-employed persons by subtracting the cost of doing business from gross earnings. Determine the household's total countable income (see Countable Income and Income Exclusions ) by adding together the gross earned and unearned incomes of all household members. EXCEPTION: Add the net earned income of any household members who are farmers or selfemployed. Compare countable income to the maximum allowable income for the household, which varies according to household size. Determine the household to be either eligible for USDA Foods if countable income is equal to or less than the maximum allowable income amount, or ineligible for USDA Foods if countable income exceeds the maximum allowable income amount. USDA annually publishes the TEFAP Income Eligibility Guidelines (Form H1640), which contains household qualifying income cut-offs for annual, monthly, and weekly income levels per number of household members. The eligibility guidelines cover the period from July 1 of one year through June 30 of the following year. TDA releases this information to each CE s executive director via . The income guideline tables are also published on the TDA website at Choose Programs, choose The Emergency Food Assistance Program, choose TEFAP Administration and Forms, and enter the form number in the appropriate field. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 12

39 Countable Income and Income Exclusions Most household income is countable, which means that it is used to determine the household's eligibility for TEFAP. Countable income includes wages, Social Security benefits, most veteran's benefits, and other types of benefits. However, some household income and assistance must be excluded as income, which means that it is not used to determine the household's eligibility for TEFAP. Excluded income and assistance include the following: Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) Vendor payments Loans In-kind benefits Rebate checks resulting from the economic stimulus act Filipino Veterans Equity Compensation Fund payments authorized by the American Recovery and Reinvestment Act of 2009 (ARRA) for certain veterans or surviving spouses of veterans who served in the military of the Government of the Commonwealth of the Philippines during World War II A lump sum or periodic payments from the Cobell settlement Family Subsistence Supplemental Allowance National Flood Insurance Program (NFIP) payments Medicare Prescription Drug Card Subsidy Certain other types of benefits To contact the TDA Food and Nutrition program specialist with questions, commodityoperations@texasagriculture.gov or call TexMeal ( ). Maximum Allowable Income The maximum allowable income amounts for households must increase in proportion to household size increases. However, except as otherwise specified, the income limits must not exceed 185% of the federal poverty level for same-size households, as published by the United States Office of Management and Budget. The TEFAP Income Eligibility Guidelines (Form H1640) contains information about yearly, monthly, and weekly maximum allowable income limits of households (at 185% of federal poverty level). To download the form, go to choose Programs, choose The Emergency Food Assistance Program, choose TEFAP Administration and The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 13

40 Forms, and enter the form number in the appropriate field. NOTE: Gross income limits of less than 185% of federal poverty levels (such as 100% or 150% of poverty levels) are subject to the review and approval of TDA or the appropriate CE. Exceptions to Income Eligibility Requirements Categorically Eligible A household is automatically (or categorically) eligible for USDA Foods if it currently receives assistance from one of the following programs: Supplemental Nutrition Assistance Program (SNAP), formerly Food Stamps Temporary Assistance for Needy Families (TANF) Supplemental Security Income (SSI) National School Lunch Program (NSLP) free or reduced-price meals Non-institutional Medicaid Households That Exceed 185% of the Federal Poverty Level A household with countable income that exceeds 185% of the federal poverty level for a samesize household (but is otherwise eligible) can, under certain circumstances, receive USDA Foods. The household must currently be paying or, during the month of application, must have paid an expense (of any amount) that was a direct result of a household crisis. The crisis must have occurred during the month the household applied for TEFAP or during the six consecutive months immediately prior to the application month. Characteristics of a Household Crisis Unexpected Costs of a Household Crisis (The CE or distribution site may define and document other circumstances.) 1. Unexpected 1. Necessary medical treatment of a household member 2. Temporary 2. Burial expenses of a household member 3. Uncontrolled loss of employment 3. Beyond the household s control 4. The repair or replacement, because of a household disaster 5, of the household s home, home contents, or vehicle 5 Household disasters may include fire, flood, hurricane, tornado, and other circumstances or incidents as defined and documented by the CE, subdistributing agency, or distribution site. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 14

41 The subdistributing agency or distribution site will document the reason that a household needs crisis food assistance and will estimate the number of months (up to a maximum of six) the household will need such food assistance. Residency To qualify for USDA Foods distributed for home consumption, members of households must be Texas residents. Household members meet residency requirements if currently living in the state for any reason other than a vacation. CEs must not impose a durational residency requirement for TEFAP eligibility. If an individual slept in the area the night before applying or plans to sleep in the area the same night of applying, then the individual qualifies as a resident. Identity and Citizenship There are no citizenship requirements for participation in TEFAP. CEs cannot require applicants to prove citizenship. To receive USDA Foods through TEFAP, CEs must not require a household to prove identity or clarify or prove citizenship or alien status. Certification Periods Households The certification period is a period of consecutive months during which a household is eligible to receive distribution of USDA Foods. To continue receiving USDA Foods after a certification period has ended, the household must be recertified by reapplying and meeting eligibility requirements again. In addition, a certification period begins the first month the household receives the USDA Foods, and may not exceed 12 months. Households That Exceed 185% of the Federal Poverty Level The distributing agency or distribution site can certify households for crisis food need up to six consecutive months. Certification periods of less than six months may be extended to six months. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 15

42 Some circumstances require a seven to twelve month certification period. TDA must approve, in writing, certification periods of seven to twelve months. An unlimited number of crisis food assistance certification periods is available to each household. The director must base each certification period on proof of new circumstances that demonstrate crisis food need. Confidentiality CEs, subdistributing agencies, and distribution sites must protect the confidentiality of any information that has been provided on an application for eligibility. The information may only be used to determine eligibility for program benefits and to verify income. Do not release any information that contains a program participant's name or other individual information. Participant Rights and Responsibilities. The TEFAP Participant Agreement, Rights, Obligations, and Fair Hearing Request form is available at Choose Programs, The Emergency Food Assistance Program, TEFAP Administration and Forms, then input the form s name into the appropriate field. Refusal of USDA Foods. Recipients may refuse any USDA Foods they cannot use or do not want. Refusal will not affect eligibility. Participant Referral Request. If a participant objects to the religious character of a site, the site must fill out the Beneficiary Referral Request form and refer the participant to a different site. The form is available at Choose Programs, The Emergency Food Assistance Program, TEFAP Administration and Forms, then input the form s name into the appropriate field. Sites may contact CEs for help locating a different site. If necessary, CEs may contact TDA for assistance. The different site may have a religious affiliation, as long as the participant does not object. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 16

43 Monitoring by CEs CEs must monitor their administrative and site personnel and subdistributing agencies to take the following steps: Ensure program compliance Investigate reported problems Determine whether to operate a site during the following program year Verify and ensure proper use of USDA Foods CEs record and track compliance or operational issues 6 on their compliance monitoring forms. NOTE: TDA recommends that CEs select sites for review where site supervisors have had a poor performance record during previous program years or where supervisors were unable to implement or complete corrective action. Depending on the nature of the previous performance problems, TDA may not approve such sites at time of renewal. Independently or in coordination with TDA, as appropriate, CEs will review subdistributing agencies and the distribution sites served by those agencies to take the following steps: Evaluate their operations and activities (including evaluating the extent to which the agencies inform the needy population of the availability of USDA Foods) Ensure program compliance, according to the terms and conditions of their agreements, including (but not limited to) the following: o Receiving, handling, distributing, and using USDA Foods, according to the Commodity Agreement and Application for Participation/Plan of Operation o Adhering to nondiscrimination requirements o Providing needy persons and households equal access to USDA Foods (including the elderly, persons with disabilities, and homebound persons) o Means-testing households o Evaluating the frequency of meal service or USDA Foods distribution, the quantity of USDA Foods included in meals or commodity packages, and other factors, as may be necessary 6 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 17

44 Appeals CEs, subdistributing agencies, and sites must notify an applicant in writing of the right to an appeal at the time of initial certification as well as at denial or termination of benefits. This notification must include the right to an appeal and the method by which an administrative review may be requested. Such notification is not required at the expiration of a certification period. Administrative Review An applicant or recipient has the right to request a fair hearing through an administrative review 7 of the adverse action 8 of a subdistributing agency or distribution site that will deny or terminate benefits. The recipient or applicant must follow these steps: 1. To receive an administrative review, an applicant can ask a distributing agency or distribution site to complete an administrative review of the adverse action. 2. If the applicant or recipient is dissatisfied with the result of the administrative review, the recipient can ask the CE for an administrative review of the decision of the distributing agency or distribution site. 3. If the applicant or recipient is dissatisfied with the result of the administrative review, the recipient can ask TDA for an administrative review of the CE s decision. TDA must take the following action: 1. Review the original request of the applicant or recipient and the administrative findings of the CE 2. Conduct a fair hearing 3. Inform both the applicant or recipient and the CE of its decision The decision of TDA is final. Time Restriction for Request An individual has the right to request an administrative review at any time within sixty days of receiving notice of adverse action to deny or terminate benefits. 7 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. 8 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 18

45 Denial or Dismissal of Request A request for an administrative review shall not be denied or dismissed unless the request is not received within the time identified in Time Restriction for Request (in this handbook section) or the request is withdrawn in writing by the applicant or the applicant s proxy. Continuation of Benefits Participants who timely request an administrative review shall continue to receive TEFAP benefits until the Administrative Review Official 9 reaches a decision. Applicants who are denied benefits at initial certification or at subsequent recertifications may appeal the denial but shall not receive benefits while awaiting a final determination by the administrative review official. Administrative Review Official (ARO) The ARO 10 is a TDA-appointed official who makes the final decision on an adverse action 11 being appealed. Conducting a Hearing The hearing shall be accessible to the applicant. TDA will provide the applicant with a minimum of ten days advance written notice of the time and place of the hearing and shall enclose the rules of procedure. TDA will also provide the applicant or representative an opportunity to take the following steps: Examine, prior to and during hearing, the documents and records presented to support the decision under appeal Be assisted or represented by an attorney or other persons Bring witnesses Advance arguments without undue interference Question or refute any testimony or evidence, including an opportunity to confront and cross-examine adverse witnesses Submit evidence to establish all pertinent facts and circumstances in the case Final Decision The ARO makes a decision based on a complete review of the administrative record and sends a copy of the decision to the applicant or participant by certified mail, return receipt requested. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 19

46 The decision shall be binding on the CE s organization and shall summarize the facts of the case, specify the reasons for the decision, and identify the supporting evidence and the pertinent regulations. Allocation Bonus Foods TDA allocates bonus USDA Foods by actual food truckloads or by dollar value increments. When allocating bonus foods, TDA uses each service area s 60/40 formula 12. TDA may use alternate allocation methods when the 60/40 formula does not yield allocation amounts that correlate with USDA transportation logistics. Entitlement Foods TDA allocates funds for entitlement of USDA Foods according to the service area s 60/40 formula 13. Then each CE, using its share of entitlement, requests from TDA the USDA Foods it wants to receive and distribute. Alternate Methods of Allocation As determined necessary, TDA may adopt a new method of allocating USDA Foods and/or modify the terms of any or all Commodity Agreements or contracts to ensure that USDA Foods are available in areas where poor economic conditions are known to exist, offered to all recipient groups, and distributed in an equitable manner. Distribution Sites CEs and subdistributing agencies receive, handle, store, and distribute USDA Foods to distribution sites that distribute, or agree to distribute, USDA Foods exclusively to needy persons and/or needy households. Unless otherwise specified by TDA, CEs and subdistributing agencies must allocate to distribution sites a fair share of USDA Foods on a first-come, first-serve basis, based on historical or projected usage rates (such as the number of meals and/or households served). Distribution of USDA Foods must be according to TDA priorities. See Distribution Priorities in this handbook section. 12 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. 13 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 20

47 CEs' and subdistributing agencies methods of allocating USDA Foods to distribution sites are subject to TDA's review and approval. Distribution Sites as Emergency Food Providers In addition to the examples in Distribution Priorities in this handbook section, distribution sites are emergency food providers if they either distribute, or agree to distribute, USDA Foods to means-tested, needy households, or as an ingredient of prepared meals provided to any person upon request or to homeless persons. NOTE: When necessary, CEs and subdistributing agencies identify organizations as emergency food providers using the best information available, including an assessment that receipt of USDA Foods is (or will be) critical to the organization's ongoing operations. At a minimum, the organization must state that it serves needy persons only. Alternate CEs Alternate CEs are organizations other than food banks that contract with TDA to distribute USDA Foods to the needy residents of a county or counties. Unless otherwise specified by TDA, CEs will receive, handle, store, and distribute fair shares of USDA Foods to alternate CEs. Fair-share allocations must be based on the number of residents in the counties served by the alternate CEs who live at or below the federal poverty level and the number of unemployed residents. NOTE: Alternate CEs receive Priority 1 TEFAP distributions (see Distribution Priorities in this handbook section). Additional CEs Additional CEs are organizations other than food banks that contract with TDA to distribute USDA Foods to eligible persons who reside in an identifiable portion of a county or counties, or specific groups of needy persons (such as the elderly or) who reside in a county or counties. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 21

48 Additional CEs have service areas that overlap other contracted service areas. Unless otherwise specified by TDA, CEs will receive, handle, store, and distribute to additional CEs a fair share of USDA Foods, based on historical or projected USDA Foods usage rates (such as the number of meals and/or households served), or by another method, as specified by TDA. NOTE: Additional CEs receive Priority 1 TEFAP distributions (see Distribution Priorities ). Distribution The method of distributing USDA Foods directly to recipients is subject to the review and approval of TDA and/or CEs. At a minimum, USDA Foods must be distributed in an equitable manner, on a first-come, first-serve basis, and at intervals that are at least monthly. Distribution Priorities CEs must allocate and distribute USDA Foods by the following priorities: Priority 1 To recipient agencies (RAs) that provide emergency food assistance (i.e., hunger relief agencies, soup kitchens, and like agencies; food pantries; alternate and additional CEs; and shelters for children or battered women) Priority 2 To RAs that provide non-emergency, prepared meals to needy persons (i.e., group treatment centers and other group living arrangements). Priority 2 is for USDA Foods that remain only after Priority 1 needs are met. Priority 3 To RAs that provide non-emergency, prepared meals to groups that include both needy and non-needy persons. However, the groups must be predominantly needy. Priority 3 is for USDA Foods that remain after Priority 2 needs are met. Predominantly needy means that more than 50% of the persons served by the RA are needy or more than 50% of the persons in the area where the RA is located, or from which it draws its clientele, are needy. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 22

49 In order for RAs to receive USDA Foods under Priority 3, they must demonstrate to the CE that they serve predominantly needy persons. RAs may demonstrate they serve predominantly needy persons by providing documentation which verifies the socioeconomic conditions of the area in which the RA is located or from which it draws its clientele. Such documentation includes (but is not limited to) poverty, unemployment, vagrancy, or welfare program usage rates. Priority 3 gives CEs flexibility in their efforts to reach a greater number of needy persons. However, CEs must continue to periodically assess the food assistance needs of the residents of their service areas and, as feasible and necessary, to develop partnerships with recipient agencies that serve only the needy. Additionally, CEs must continue to assess the needs of specific groups or categories of needy persons, such as the elderly and/or people living in rural or difficult-to-serve areas. The requirement for CEs to develop needy-only outlets for USDA Foods conforms to the program s primary goal of distributing to needy people and, over time, may reduce the amount of USDA Foods distributed to Priorities 2 and 3. TDA will continue to monitor the distribution of USDA Foods to ensure that CEs adhere to priorities. If supported by review findings or other information, TDA will request corrective action as appropriate. Non-Needy Persons Who Eat at Priorities 1 and 2 Under Priorities 1 and 2, RAs that serve meals are intended to serve the meals to needy persons. However, non-needy persons who participate in the operation of a food assistance program, such as staff or volunteers, may eat meals containing USDA Foods prepared for needy persons under both of the following limited conditions: The number of non-needy persons is few compared to the number of needy persons. Eating off-premises is not practical for the non-needy persons. 90-Day Period to Meet Priority 1 Needs Except as provided below, during the 90 days following the receipt of a shipment of USDA Foods, a CE must distribute the USDA Foods to Priority 1 RAs only. Following the 90-day period, a CE may distribute remaining USDA Foods to Priority 2 RAs; and, if USDA Foods remain after Priority 2 RAs needs have been met, the CE may then distribute USDA Foods to Priority 3 RAs. EXCEPTION: A CE that documents that all Priority 1 RAs needs have been met (as requested or as actually needed based on available data) may distribute USDA Foods to Priority 2 RAs prior to expiration of the 90-day period described above. If the CE then documents that all Priority 2 RAs needs have been met, the CE may distribute remaining USDA Foods to Priority 3 RAs prior to expiration of the 90-day period described above. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 23

50 Distribution Quantities CEs should distribute to households for home consumption in an equitable way according to the following considerations: Household size Available resources Days and hours of operation The expected demand for USDA Foods Other factors and circumstances that the CE determines are necessary NOTE: TEFAP is intended to provide USDA Foods to households that meet family size and income requirements. See TEFAP Handbook, Section 11000, TEFAP Guidelines for Distribution of USDA Foods. NOTE: USDA Foods recipients may refuse any food item they cannot use or do not want. Distribution to Contracted Service Area CEs assume final administrative and financial responsibility for distributions of USDA Foods within the contracted service area. A CE s efforts to meet the needs of eligible participants in the CE s service area include the following: Improving the accessibility of USDA Foods for eligible individuals Cooperating with TDA to identify areas within a contracted service area where subdistributing agencies, alternate CEs, or additional CEs may be needed NOTE: TDA may require corrective action by a CE to expand services to areas where TDA is unable (or chooses not) to contract with alternate or additional CEs. A corrective action plan must include time frames and action steps for locating or developing subdistributing agencies or distribution sites to expand services. Direct Shipments CEs receive direct shipments of USDA Foods. Unless otherwise specified by TDA, additional CEs and alternate CEs receive distributions of USDA Foods from CEs. Receipt and Inspection of USDA Foods CEs, subdistributing agencies, distribution sites, and others authorized to possess USDA Foods must ensure that the USDA Foods are safeguarded. Any entity that stores USDA Foods for any period of time must become familiar with and adhere to state and local health codes that apply to stored food products. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 24

51 Electronic Receipting 14 for USDA Foods CEs must receipt electronically into Texas Unified Nutrition Programs System (TX-UNPS) at within 24 hours for USDA Foods shipments received. TDA must then receipt electronically into the USDA s Web-based Supply Chain Management (WBSCM) 15 system within 24 hours. The entire receipting process, including CE and TDA responsibilities, must be complete within 48 hours. This requirement applies to all shipments of USDA Foods. USDA requires shipment receipts to be entered within 48 hours in order to meet contractual requirements and to provide prompt payment to vendors. Inspection of USDA Foods CEs must inspect USDA shipments to ensure the product and quantity is as identified on the delivery or pick-up document (that is, bill of lading or invoice) and that the product is in good condition. If the product is in questionable condition (that is, damaged or spoiled) or the quantity is not correct, then the CE must take the following steps: 1. Note an exception on the delivery or pick-up document when signing 2. Obtain the signature of delivery/warehouse personnel on the delivery or pick-up document 3. Notify TDA immediately Storage The USDA requires CEs, subdistributing agencies, and distribution sites who store USDA Foods to use storage practices that prevent premature deterioration of food. Additionally, the areas in which USDA Foods are stored must be maintained in good condition. Temperature CEs must follow instructions for storage temperatures. The temperature requirements are provided in TEFAP Handbook, Section 11000, Resources, Temperature Requirements. CEs should verify food temperatures on delivery and annotate the receiving document when proper temperatures are exceeded. 14 See The Emergency Food Assistance Program Handbook, Section 9000, Terms, Definitions, and Acronyms, for a definition of this term. 15 See The Emergency Food Assistance Program Handbook, Section 9000, Terms, Definitions, and Acronyms, for a definition of this term. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 25

52 NOTE: USDA Foods Fact Sheets 16 ( may provide shelf life information for a product at various temperatures (i.e., flour or cornmeal at 40, 70, and 90 degrees Fahrenheit). Products should not spoil during the shelf life; however, storage at higher temperatures increases the likelihood of insect infestation and may shorten shelf life. Therefore, when possible, products must be stored at temperatures recommended by USDA. Cooler and freezer temperatures must be checked and recorded during regular business hours, and during shut-down or vacation periods a minimum of every other day, immediately after a power loss is known or suspected, and late each Friday afternoon and early each Monday morning (if operations are suspended during weekends). Use Temperature Record (Form H1639) to record temperatures. Air Circulation Frozen, chilled, and dry storage areas must have air circulation. USDA Foods must be stored on pallets or shelves with four inches of clearance from the floor and walls and two feet of clearance from the ceiling. First In, First Out (FIFO) USDA Foods with the oldest pack date or contract number, which USDA places on product cases, should be stored in front and used before other USDA Foods. Stacking Stacks of USDA Foods should be sufficiently low so that the product at the bottom will not burst or be crushed by the weight of the product above, cross-stacked, away from steam, heat, or moisture, and shrinkwrapped if stored at the top of a storage rack. 16 Also referred to as Household USDA Foods Fact Sheet The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 26

53 Protection of Stored Food CEs must ensure that USDA Foods are in good condition by taking the following steps: Checking all products frequently for deterioration Inspecting for tears in sacks and for broken cartons Maintaining all storage areas in a clean and orderly condition Storing foods away from pesticides, cleaning supplies, and paper products Using security measures to prevent theft Inspecting storage areas monthly and exterminating as necessary NOTE: CEs must recover foods from torn sacks or broken cartons and repackage any foods that remain in good condition. CEs must dispose of spoiled foods as instructed in Food Losses in this handbook section. Storage of Food during Summer Months The USDA prefers that flour, grain, and pasta products be refrigerated during warm months. Liability for loss of perishable food includes loss of flour or grain products caused by failure to refrigerate the food. See TEFAP Handbook, Section 11000, Resources, General Temperature Guide for Storing Foods. NOTES: Warm weather may continue after September 30 and, as a result, refrigerated products returned to dry storage after that date may mold or spoil. CEs should either refrigerate flour, grain, and pasta products until they are distributed, or CEs should delay returning these products to dry storage until temperatures are suitable. CEs should inform RAs if items are stored in cooler space, so that RAs also store the foods in cooler space. Storage at Subdistributing Agencies TDA must give prior approval for USDA Foods to be stored at the site of a subdistributing agency. Refer to Storage in this handbook section for additional information related to storing USDA Foods. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 27

54 Storage Facility Review CEs must annually review facilities where USDA Foods are stored. CEs must document the results of each storage facility review and retain the documentation for three years following the end of the federal fiscal year in which the review was done. Additionally, CEs must require subdistributing agencies and distribution sites that store USDA Foods to review their storage facilities annually. CEs should schedule the storage facility review to coincide with the semi-annual inventory of USDA Foods reported to TDA on June 30 of each year. CEs will report a loss of USDA Foods discovered as a result of either the semi-annual inventory of USDA Foods or the storage facility review on Report of Loss of USDA Foods (Form H1639). CEs must correct deficiencies discovered during a storage facility review and report the results to TDA. A CE s storage facility review must ensure that the facility, at a minimum, meets these requirements: Sanitary Free from animal and insect infestation Secure from theft, spoilage, and other loss Maintained at proper temperatures Used appropriately to store food (e.g., the product is stored off of the floor, boxes are safely stacked with USDA labels visible, and containers are spaced for proper ventilation) In compliance with other standards, as appropriate Inventory Requirements CEs must maintain complete and accurate records of USDA Foods that the CE has received and distributed. CEs must differentiate between USDA Foods and other purchased or donated foods. All CEs, subdistributing agencies, and distribution sites are responsible for good inventory management. Good practices include requesting only an amount of food that can be used without waste, preventing excess inventory levels, and detecting damage or spoilage. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 28

55 Perpetual Inventory An ongoing accounting system that requires daily entries to document the amounts of food added to or removed from storage. Date of Possession CEs must record the date of possession of USDA Foods on the perpetual inventory. The date of possession of USDA Foods by a CE is the date the CE accepts delivery directly from USDA. Subdistributing agencies, additional CEs, alternate CEs, and distribution sites take possession and are responsible for USDA Foods on the date the foods are picked up or delivered from the CE. CEs agreements with subdistributing agencies and distribution sites must include chain of custody responsibilities for USDA Foods at any time prior to distribution to participants. For example, CEs must ensure the ongoing responsibility of subdistributing agencies that indirectly distribute USDA Foods to recipients through other agencies, organizations, and distribution sites. NOTE: If applicable, the possession date may be the pickup delivery day from a commercial distributor or a food processing company. Physical Inventory A semi-annual process to account for all USDA Foods received since the last physical inventory and to report those on hand at the time of the report. TDA will provide a Physical Inventory Report spreadsheet semi-annually to complete and submit. Distribution Site, Additional CE, and Alternate CE Inventory Requirements As necessary, CEs may establish and apply their own inventory controls to distribution sites, additional CEs, and alternate CEs and to all agents. CEs must establish inventory controls which are sufficient to ensure that the USDA Foods are safeguarded and used and distributed as intended. If indicated by review findings or other information received, TDA may impose corrective action to require CEs to implement any inventory controls deemed necessary for any distribution sites, additional CEs, and alternate CEs or agents who receive USDA Foods. Determining Inventory Levels of USDA Foods A CE s USDA Foods inventory may not exceed six month s supply without approval from USDA. Inventory levels are calculated based on historical food usage in typical months. To determine the months on-hand of a USDA Food: take the accumulated inventory balance at the end of the month to be reported and divide that number by the average monthly quantity of the food item distributed to recipient agencies. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 29

56 EXAMPLE: 1,000 units of canned peaches on hand 250 units of canned peaches distributed in a typical month = 4 months of canned peaches in inventory For foods that have no historical data, base estimates on typical usage of similar foods. For example, if using whole-grain rotini for the first time, develop inventory estimates by averaging the usage of other pasta products in a typical month, e.g., whole-grain macaroni. Keep in mind that certain USDA Foods, such as shelled eggs or fresh produce, have shorter shelf lives than the six month limit. Those foods must be managed in a way that allows them to be consumed while in optimal condition. CEs that have an excess of six months supply of any USDA Food may be required to submit a justification for the excess inventory. Reporting Inventory Levels of USDA Foods to TDA Quarterly, each CE will submit the TEFAP Physical Inventory and Months on Hand Supply report on a TDA-provided spreadsheet. This report will gather quarterly physical counts, book counts, and usage rates of USDA Foods within the fiscal year of TEFAP participation. For the June and December reporting periods, CEs must conduct and report both physical and book counts. For the March and September reporting periods, CEs must conduct and report only book counts. TDA reports excess inventory to USDA for each June and December reporting periods on Form FNS-155. Refer to the table below for required reporting periods and deadlines. Table 1: CE Inventory Reporting Timeframe TDA Provides Spreadsheet On or Around CE Inventory Reporting Period CE Report Due 5 th Business Day of these Months** February 28 March 1-31 April May 31 June 1-30 July August 31 September 1-30 October November 30 December 1-31 January The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 30

57 **The CE must submit a completed report to TDA five business days following the CE inventory reporting period. If a CE has more than six months inventory, the CE must also include a corrective action plan (CAP) for reducing inventory. The CE places the CAP in the comments column of the report. Examples of acceptable CAPs include reduce the shared maintenance fee, eliminate the shared maintenance fee, and transfer the excess inventory to a different CE. An unacceptable CAP lacks specificity to the point that it will not result in inventory reduction. TDA will provide the TEFAP Physical Inventory and Months on Hand Supply spreadsheet on or around November 30 and May 31 of each year. The reporting periods then continue through December 31 and June 30. The CE must submit a completed report to TDA five business days after the end of each reporting period. After receipt of the CE s TEFAP Physical Inventory and Months on Hand Supply report, TDA may conduct an on-site monitoring visit to verify inventory. Food Losses In the event of a food loss, CEs must complete and submit to the TDA Food and Nutrition program specialist Report of Loss of USDA Foods (Form H1638) and any other supporting documentation 17, including documents provided by subdistributing agencies and distribution sites. The form should be submitted within 30 days of a loss; and should explain how and why the loss occurred. If TDA determines that the value of the donated food loss (or improper use or loss of funds) does not exceed $500, then TDA is not required to pursue a claim. If, however, the loss occurred as a result of theft, embezzlement, willful misapplication, or fraud, then TDA must either pursue claim actions or forward the claim determination to the USDA s Food and Nutrition Service Regional Office (FNSRO), regardless of the amount of loss. CEs should file claims when losses occur because of negligence (that is, improper distribution or use of USDA Foods; or failure to properly store, handle, or care for the food). 17 Examples of supporting documentation include photographs; the confirmation document of the local health official who inspects the food loss; or a receipt or invoice from a landfill that verifies destruction of the food loss. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 31

58 Sometimes, food loss results from a natural event a hurricane, flood, or general power outage. If TDA determines that a loss is the result of such an event rather than either negligence or failure to comply with an agreement or contract, then TDA is not required to pursue a claim. TDA must notify the FNSRO, however, if such a loss s value exceeds $500, regardless of the cause. Holds and Recalls When USDA notifies TDA of a hold or recall, TDA sends an blast to CEs. The contains the hold or recall information. In some cases, the also directs CEs to TX-UNPS, where CEs respond to a survey. Via the survey, CEs report the amount of affected product in their possession, as well as whether the product was delivered to subagencies. If the USDA Foods are on hold, the CE segregates the product until USDA either releases the hold or provides further information. If the USDA Foods are recalled, TDA instructs CEs ways to dispose of the product. For more information, see the USDA Food Safety website at Disposal of Out-of-Condition USDA Foods Disposal of out-of-condition USDA Foods must comply with state and local health rules. USDA Foods are out-of-condition if they are damaged, spoiled, or infested, and cannot be salvaged. CEs must contact TDA if some USDA Foods can be salvaged. Otherwise, a CE must take the following steps: 1. Obtain from a federal, state or local health official a written statement that the USDA Foods are unfit for human consumption Note: If a federal, state or local health official is not available to inspect foods to determine if they are out-of-condition, then CEs, subdistributing agencies, and distribution sites may, with TDA approval, use other community resources, e.g., individuals who provide inspection services, nurses or others whose training, experience or background in medical, health or related fields qualify them to determine if food is fit for human consumption. 2. Obliterate carton labels 3. Destroy food and ensure that it is inedible 4. Transport unsalvageable, out-of-condition USDA Foods to a landfill for proper disposal The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 32

59 Reimbursement of Claims Filing and Submitting Monthly Claims A CE s claim is the actual participation report submitted for the purpose of receiving financial assistance with administrative costs associated with TEFAP operations. TDA reimburses claims depending on the availability of funds. CEs must submit monthly reimbursement claims in TX-UNPS. The claims should include allowable costs of distributing USDA Foods and foods donated from other sources. Only a person authorized on Certificate of Authority for External Users (Form FND-101) may enter the claim in TX-UNPS. NOTE: Monthly reimbursement claims should be received by TDA in TX-UNPS within 60 days after the claim month has ended. Identifying Costs Separately Monthly claims must separately identify direct and indirect costs of distributing USDA Foods. In addition, CEs may include on claims the reimbursable costs of distributing non-usda Foods. NOTE: As authorized by contracts and as funds are available, CEs must include special transportation costs on monthly claims, as instructed by TDA. End-of-the-Year Due Date All claims must be submitted no later than November 29, which is 60 days after the close of the federal fiscal year. TDA will not accept claims for reimbursement of costs of distributing USDA Foods after this date. Reallocation of Administrative Funds After the end-of-the-year due date, and after TDA has reimbursed all CEs as it determines to be appropriate, TDA will take the following steps: Use the appropriate allocation method to reallocate funds and reimburse any remaining allowable costs of distributing USDA Foods to CEs who exceed their Letter of Credit amounts With any remaining funds, reimburse CEs their allowable costs of distributing non- USDA Foods The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 33

60 Adjusted Claims TDA may suspend a CE s payments if the CE submits repeated adjusted claims. The suspension remains in effect until the CE can demonstrate that it has procedures in place to produce a final claim on time each month. NOTE: Adjusted claims that result from a TDA review of a CE must be submitted to the TDA commodity program specialist. If TDA processes an adjusted claim for a month in the current program year, TDA will reconcile any overpayment or underpayment against any outstanding claims for the current program year. If the outstanding claims are not sufficient to reconcile the adjusted claim, TDA will process payment to the CE for any underpayment and will require the CE to submit any remaining overpayment. Program Documentation TDA is able to observe a CE s daily operation of the program only when conducting compliance reviews and audits. Therefore, TDA must rely on the records that a CE retains to determine compliance with program requirements and verify the reimbursement to which the CE is entitled. If a CE s records do not support eligibility or claims for reimbursement, the CE will be required to repay the unsupported amount. Retention Period CEs must retain all documents relating to participation in the program, such as claims and supporting documents that are specific to a particular program year, for three years from the end of that program year. These documents include, but are not limited to, financial and supporting documents and statistical records. EXAMPLE: All documents specific to TEFAP program year 2013 must be retained until September 30, EXCEPTION: If audit findings, claims, litigation, or investigation findings have not been resolved, all forms and records must be retained beyond the required time period until all issues are resolved. These issues are considered resolved when a final order is issued in litigation, or when the CE and TDA sign a written agreement indicating that the audit findings, claims, or investigation findings have been resolved. Availability of Records Each CE, as well as each of its subdistributing agencies and distribution sites, must allow TDA, The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 34

61 USDA, U.S. Government Accountability Office (GAO), and representatives of other appropriate agencies to inspect facilities and records and to audit, examine, and copy records during normal working hours. CEs must maintain separate records for each subdistributing agency and distribution site, and TEFAP records must be maintained separately from records of other programs. CEs must make records available to TDA upon request. Such records include, but are not limited to, the following: CE findings of subdistributing agencies Number of participants served NOTE: If the Commodity Agreement and Application for Participation/Plan of Operation are terminated or not renewed, a CE must retain all records and make them available upon request. Statistics by County CEs are required to provide annual statistics by county in the areas served. This information is based on data from the previous program year and is due by November 30 of each year. This information should be submitted to the TDA Food and Nutrition program specialist electronically on a spreadsheet, with the fields listed in the order below: 1. Name of CE 2. Name of county 3. Number of subdistributing agencies and distribution sites in the county 4. The quantity of USDA Foods received by the CE for the program year (total pounds) 5. Total value of USDA Foods received by the CE for the program year 6. Quantity of USDA Foods distributed by the CE for the program year (total pounds) 7. Quantity of USDA Foods distributed by county for the program year 8. Percentage of total USDA Foods distributed by county 9. Total amount of TEFAP administrative funds that have been reimbursed to the CE during the program year 10. Total administrative CE expense for the program year 11. TEFAP administrative expense for county for the program year Backpack Program Distribution sites (for instance, schools) 18 may provide USDA Foods to children through programs such as the Backpack Program. Children must be eligible for free or reduced-price meals or free milk to be eligible for the Backpack Program. 18 The language in this section refers to schools, but a distribution site may be located in other facilities. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 35

62 Distribution Site Responsibilities Permission Slips Permission slips must include at least the following information: 1. A brief description of the way that the program works 2. Clauses that allows parents or guardians to opt in or out of the program 3. The nondiscrimination statement found in TEFAP Handbook, Section 6000, Civil Rights, Public Notification Schools will keep on file the returned permission slips. Signature for Receipt. A school representative (or the agency that receives the USDA Foods for the school) must sign a receipt to indicate that the food was received. Storage and Use. Schools must meet federal storage requirements for USDA Foods. Foods must be stored at least four inches off the floor, in a pest-free area, and in a temperature-controlled environment. Schools must use earlier distributions first. For example: Food delivered on October 1 must be distributed before food distributed on October 20. Records. On each distribution day, schools must record the names of participants. TDA recommends that schools report this information to CEs monthly. Optionally, the monthly report could contain the following details: School name Month and year School s Backpack Buddy coordinator Week number of distribution (week 1, week 2, week 3, etc.) Date of distribution Stories of ways the food helped participants Comments Concerns Contracting Entity s Responsibilities Agreement. TDA recommends an agreement between the CE and the school agency. The agreement should specify the information below: The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 36

63 Distribution plan (see Distribution Plan, below) Contact information for school personnel responsible for the program Schools reporting requirements (at a minimum: names of participants on each distribution date) Statement certifying that school personnel understand and agree to the proper use of USDA Foods USDA s civil rights assurance language 19 Distribution Plan. The CE s to CommodityOperations@TexasAgriculture.gov a distribution plan, which must include the following information: 1. How will the backpacks be distributed? For example, weekly, near dismissal, in the office, etc. 2. What is the certification period? For example, 3 distributions, 6 distributions, the entire school year, etc. 3. The specification that the school must record the names of participants that receive USDA Foods each distribution. TDA recommends that schools report this information monthly. After TDA approves the distribution plan, the CE may use the plan for all Backpack Program schools. Information for the Application for Participation/Plan of Operation. The CE must include schools that participate in the Backpack Program on the CE s list of subdistributing agencies and distribution sites by county that is submitted annually with the Application for Participation/Plan of Operation. Site Visits. At least once each program year, CEs must visit each participating school during distribution times to ensure that the school meets the terms of its agreement. Complaints CEs should keep in mind that factors affecting USDA purchases of USDA Foods include market conditions; the amounts, types, and costs of foods available; and price support requirements. In addition, when purchasing USDA Foods, USDA considers the recommendations of CEs, subdistributing agencies, and distribution sites. USDA and TDA appreciate the input of CEs, distributing agencies, and distribution sites. 19 For more information, contact TDA s Food and Nutrition program specialist at commodityoperations@texasagriculture.gov or The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 37

64 USDA Foods Complaint Form CEs may use the USDA Foods Complaint form to report specific issues involving USDA Foods. Such issues include (but are not limited to) quality, acceptability, and packaging. The form is available on the TDA website at select The Emergency Food Assistance Program, click on TEFAP Administration & Forms, then enter the form name in the appropriate field. F&N Complaint Form CEs may use the F&N Complaint Form to give TDA feedback concerning program problems or general suggestions. This complaint form is available on the TDA website at select The Emergency Food Assistance Program, click on TEFAP Administration & Forms, then enter the form name in the appropriate field. Disaster and Distress Situations USDA distributes foods through TEFAP in order to provide nutrition during situations of emergency and distress. CEs must obtain approval from TDA prior to diverting USDA Foods from intended purposes in order to assist victims of disasters. Prohibited Actions Payment for USDA Foods CEs must not require, solicit, or accept payment from TEFAP applicants or participants in money, materials, or services for, or in connection with, receiving USDA Foods. Additionally, USDA Foods must not be sold or disposed of through commercial methods. NOTE: This policy does not restrict any person or persons from volunteering services in their communities, as they choose when such volunteer services are not conditions for receiving USDA Foods. Join an Organization CEs must not require an agency, organization, individual or a household to join, attend meetings of or pay dues to a specific organization as a condition for receiving, distributing or using USDA Foods. Restricted Practices USDA Foods to Child and Adult Care Food Program Organizations CEs may distribute USDA Foods to Child and Adult Care Food Program organizations that are also participating in TEFAP. However, distribution to such eligible organizations should be made only if the needs of all emergency-feeding organizations, such as hunger relief agencies, The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 38

65 soup kitchens, and food pantries, have been met. Refer to Distribution Priorities in this handbook section for additional information. Activities Unrelated to USDA Foods A person(s) conducting an activity at a USDA Foods distribution site that is unrelated to USDA food distribution must take the following precautions: Make it clear that the activity is not a part of TEFAP, is not endorsed by USDA or TDA, and is not a condition for receiving USDA Foods Ensure that the activity does not disrupt the serving of meals or USDA food distribution TDA investigates claims of violations of unrelated activity requirements. CEs investigate claims of violations by subdistributing agencies and distribution sites. NOTE: Claims of unrelated activity violations may include the distribution of written material, on or with food packages or during meal service, to participants from sources other than federal, state, or local governments. The Emergency Food Assistance Program Handbook Texas Department of Agriculture September 2016 Section 4000, Managing the Program Page 39

66 Section 5000 Visits, Reviews, and Audits Table of Contents Visits Prior to Approval... 2 Reviews... 2 Two Types of Reviews...3 Compliance Reviews by Texas Department of Agriculture... 3 Contracting Entities and Subdistributing Agencies...3 Distribution Sites...3 Monitor Reviews by Contracting Agencies... 4 Subdistributing Agency and Distribution Site Reviews...4 Examination of Records... 5 Contracting Entity and Distributing Agency Records... 5 Subdistributing Agency and Distribution Site Records... 6 Findings... 6 Contracting Entities and Subdistributing Agencies... 6 Corrective Action Plan...6 Violation Examples...7 Subdistributing Agency and Distribution Sites... 7 Examples of Corrective Action Plans... 8 Contracting Entity Plan...8 Subdistributing Agency and Distribution Site Plan...8 Audits... 8 General Policy Purpose of Audits... 9 Value of USDA Foods for Audits...9 Audit Scope and Frequency Procedures for Compliance with Audit Requirements Sanctions for Noncompliance Other Audits The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 1

67 Section 5000 Visits, Reviews, and Audits Visits Prior to Approval The Texas Department of Agriculture (TDA) visits, prior to approval, an applicant contracting entity s administrative offices and sites to assess the potential for successful operations of The Emergency Food Assistance Program (TEFAP). See TEFAP Handbook, Section 2000, Eligibility and Application Requirements, Visit Prior to Approval of Initial Applications and Renewals. Reviews The Texas Department of Agriculture (TDA) reviews contracting entities (CEs), subdistributing agencies, and distribution sites to achieve the following: Evaluate their TEFAP operations and activities Ensure program compliance, according to the terms and conditions of Commodity (USDA Foods) Agreement Between Contracting Entity and Texas Department of Agriculture Application for Participation/Plan of Operation including the following: o Storage and warehousing practices o Inventory controls and accountability o Civil rights compliance o Financial management systems o Approval and monitoring of subdistributing agencies and distribution sites to ensure program compliance o Reporting and record keeping o Other aspects of their programs, as determined by TDA CEs also review subdistributing agencies and distribution sites. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 2

68 Two Types of Reviews There are two types of reviews: 1. compliance review The review TDA conducts of its CEs or their subdistributing agencies, and the review a CE conducts of its subdistributing agencies. 2. monitor review The review a CE or TDA conducts of a distribution site. Each type of review and its frequency is discussed below. Compliance Reviews 1 by Texas Department of Agriculture Contracting Entities and Subdistributing Agencies When TDA reviews a CE, TDA also reviews the CE s subdistributing agencies (if any exist). A subdistributing agency is a food bank that contracts with a CE that is a food bank to receive, store, and deliver USDA Foods. Annually, TDA reviews at least 25% of all CEs and subdistributing agencies, and each of these organizations no less than every four years. NOTE: TDA may review subdistributing agencies without coordinating with TDA CEs. In addition, subdistributing agencies are subject to review by USDA. Distribution Sites A distribution site 2 is a place where an emergency feeding organization distributes USDA Foods to needy persons, including food for home consumption. TDA annually reviews one-tenth or 20 (whichever is fewer) distribution sites. If feasible, at least one review is conducted at a distribution site during meal service, at a time when USDA Foods are distributed to households, and/or when household eligibility is being determined. TDA determines distribution site reviews first by risk-based assessment then by random sample. At least half of the distribution sites receive a review on the risk-based approach; the remaining distribution sites receive a review by random sample. 1. Risk-based assessment. TDA evaluates all distribution sites based on the following risk factors: Value of USDA Foods Amount of administrative funds received History of complaints History of program violations Length of time operating TEFAP 1 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. 2 For a full definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 3

69 Length of time since last review Known turnover of director or key staff Other applicable factors 2. Random sample. Distribution sites not selected for a risk-based review are subject to be selected by random sample. NOTE: TDA may review distribution sites without coordinating with CEs. In addition, distribution sites are subject to review by USDA. Monitor Reviews 3 by Contracting Agencies CEs review subdistributing agencies and distribution sites to ensure program compliance and proper use of USDA Foods. If reviews reveal problems, CEs must take appropriate action, including following the instructions in this handbook section. Subdistributing Agency and Distribution Site Reviews As applicable, CEs will annually review at least 50% of subdistributing agencies and distribution sites no less than every two years, and one-tenth or 20, whichever is fewer, of distribution sites (including sites operated by subdistributing agencies and sites operated by other agencies that receive USDA Foods from subdistributing agencies). To the extent feasible, CEs will schedule reviews to coincide with meal service, distributions to households, and/or when household eligibility is being determined. The CE ranks all sites according to the number of meals and/or households served during the previous federal fiscal quarter (as described in the note below), and includes in the review sample the first one-sixth or 25 sites, whichever is fewer, that served the most meals and/or households. EXAMPLE: If a CE distributes USDA Foods to 100 subdistributing agencies and distribution sites, then the annual review sample of those organizations is 50 (that is, 50% of 100 = 50). If, together, the 50 subdistributing agencies and distribution sites distribute USDA Foods to 1,000 distribution sites, the review sample of distribution sites is 50. The CE determines the number of sites using the formula: the lesser of one-third of sites or 50 sites, and 50 is less than one-third of 1,000. Finally, the CE determines the number of the largest distribution sites to be included with the 50 review sites. In this example, the number of the largest sites to be reviewed is 3 For a full definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 4

70 25. To determine how many of the largest sites must be reviewed, the CE ranked all the sites by size, and then identified the less of one-sixth of all sites or 25 sites, and 25 is less than one-sixth of 1,000. The remaining 25 distrubution sites are selected at random. NOTE: When selecting the first 25 (or one-sixth) sites, as required above, meal sites do not easily compare to household sites. However, CEs may use any reasonable formula, including the following: 240 meals served monthly equals one household served monthly. For example, a site serving 240,000 meals per month is equal in size to a site that serves 1,000 households. Examination of Records Contracting Entity and Distributing Agency Records As part of a compliance review 4, TDA determines whether a CE or subdistributing agency has complied with the terms and conditions of the 1. Commodity Agreement (if applicable), 2. agreement between the CE and subdistributing agency (if applicable), and 3. TEFAP requirements. When preparing for a compliance review, a CE or subdistributing agency must make all TEFAPrecords available to the reviewers. During a review, TDA may also look at the following: Documents concerning the application for participation Storage and warehousing practices Inventory controls CE approval and monitor review of subdistributing agencies and distribution sites to ensure TEFAP compliance All required TEFAP forms Budget records (applicable only to CEs) Records of training Cost allocation records Records of subcontracting Procurement records Single audit records Civil rights compliance Other aspects of the program, as determined by TDA 4 For a definition of this term, see TEFAP Handbook, Section 9000, Terms, Definitions, and Acronyms. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 5

71 Subdistributing Agency and Distribution Site Records Independently or as appropriate, in coordination with TDA, CEs will review subdistributing agencies and distribution sites to accomplish the following: Evaluate operations and activities Assess the extent to which the subdistributing agency or distribution site informs the needy population of the availability of USDA Foods Ensure program compliance according to the terms and conditions of agreements, including, but not limited to, the following: o Receiving, handling, distributing, and/or using USDA Foods according to TDA requirements o Adherence to nondiscrimination requirements o Providing needy persons and households equal access to USDA Foods (including the elderly, persons with disabilities, and homebound persons) o Means testing households o Evaluating the frequency of meal service or USDA Foods distribution, the quantity of USDA Foods included in meals or USDA Foods packages, and other factors, as may be necessary Findings Contracting Entities and Subdistributing Agencies If TDA compliance review finds violations, TDA will provide the CE with a written report of review findings that includes the following details: Each violation found The factors contributing to each violation Recommendations for corrective action (as agreed to and signed by the CE), including 1) timetables for completion and 2) claims action to be pursued (if any) Provisions to monitor or evaluate progress and the effectiveness of corrective action(s) Each CE is responsible for receiving the findings for its subdistributing agencies. TDA may mail, , or present the written report at the end of the review. Corrective Action Plan To address noncompliance, CEs and subdistributing agencies must submit a corrective action plan (CAP). CEs submit CAPS to TDA; subdistributing agencies submit CAPs to their CEs. CAPs 1) state how the organization will correct program violations and 2) include the following details: The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 6

72 An outline of actions to be taken The expected outcome of each action The target date for completion of each action The date by which each violation will be eliminated For example: A CAP is required if the CE receives a finding for failing to maintain administrative records. In such a case, the CE will provide, in writing, the following: The steps to rectify the lack of record maintenance What the result of those steps would be The target date for each step, including the end date for the corrective action TDA will perform a follow-up review of a CE to ensure that the CE implemented the CAP and corrected violations. A CE will perform a follow-up review of a subdistributing agency to ensure that the subdistributing agency implemented the CAP and corrected violations. Violation Examples Violations include, but are not limited to, the following: Failure to maintain adequate site or administrative records Failure to follow competitive bid procedures Failure to comply with civil rights laws and regulations Submittal of false information to TDA Noncompliance with food distribution requirements Failure to adjust USDA Food orders to conform to variations in the number of participants Claims for reimbursement for administrative costs that were not related to operation Subdistributing Agency and Distribution Sites If a CE monitor review finds violations, the subdistributing agency or distribution site must submit a CAP to the CE. The CE must provide TDA with a copy of the CAP. The CAP must adequately address program violations. The CE may return an incomplete or inadequate CAP to a subdistributing agency or distribution site for additional clarification. Additionally, the CE may amend or modify the CAP of a subdistributing agency or distribution site based on new information, changes in circumstances, or progress to date. The CE may also extend time frames for a distribution site s good faith efforts to correct violations or problems in order to comply with requirements. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 7

73 After the subdistributing agency or distribution site implements its CAP, it must submit a final disposition report to the CE, which must send a copy of the final disposition report to TDA. The CE must perform a follow-up review to ensure that the distribution site corrected violations. TDA may terminate the CE s Commodity Agreement if 1. the CE does not follow up to ensure the violations have been corrected, or 2. the subdistributing agency or distribution site refuses or fails to correct violations, but the CE does not terminate the part of the agreement with the subdistributing agency or distribution site for receiving and using USDA Foods. Examples of Corrective Action Plans Contracting Entity Plan During a compliance review, TDA may discover violations. TDA may require a CE to develop, within a specified time frame, a CAP. If TDA finds violations at a subdistributing agency, TDA requires the CE to request and enforce the subdistributing agency s CAP. For example, TDA may require a CE to have a plan to develop food providers in an area where needy persons have little or no access to USDA Foods. TDA will monitor the CAP and may extend the time frame if the CE attempts to locate and develop food providers, but did not receive an application within the original time frame from a qualified agency or organization. Or, TDA may take other action as indicated by the actions of the CE and other circumstances. Subdistributing Agency and Distribution Site Plan During a monitor review, a CE may discover violations. TDA may require corrective action by the subdistributing agency or distribution site. A CAP might include, for instance, a plan to develop, within a specified time frame, a system for maintaining records of USDA Foods distributions to households. After monitoring the subdistributing agency or distribution site s progress, the CE may take the following action, as warranted by the circumstances: Determine that corrective action is complete Take steps to terminate that portion of the agreement for receiving and using USDA Foods Extend the corrective action time frame Audits General Policy CEs subject to audit must be audited on a single (organization-wide) audit basis by independent auditors according to the the Uniform Administrative Requirements, Cost Principles, and Audit Requriement for Federal Awards (2 Code of Federal Regulations Part 200). The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 8

74 A CE is exempt from the single audit requirement if it is one of the following: A Federal entity A military base An Indian tribal government A nonprofit CE and does not expend the level of federal financial assistance as described in Audit Scope and Frequency in this handbook section Purpose of Audits Audits are conducted to determine the following: Financial operations are conducted properly. Expenditures of program funds comply with applicable laws and regulations. Internal procedures meet the objectives of federally assisted programs. Financial statements are correct. Financial reports contain accurate information. Value of USDA Foods for Audits Each CE must obtain an annual audit if it expends more than $500,000 in Federal grants during the CE s fiscal year. For each CE s fiscal year beginning January 1, 2015, or after, the threshold is $750,000. The value of USDA Foods must be considered part of Federal grants. For audit purposes, CEs must consider all USDA Foods distributed or used during the fiscal year as expended. The value of expended USDA Foods may be determined by the fair market value (FMV) at the time the foods are received by the CE or by one of the following: 1. The USDA purchase price (cost-per-pound) 2. The estimated cost-per-pound data provided by USDA at the beginning of the program year 3. The USDA commodity file cost as of a date specified by TDA A method of determining the value of USDA Foods must be chosen for audit purposes. Once a CE has selected a method of determining the value of USDA Foods, it must use that method consistently in all of its audit activities and must maintain a record of the means of valuing USDA Foods for audit purposes. In most cases, it would be easier for a CE to use one of the options provided rather than having to determine the FMV at the time of the receipt of the USDA Foods. FMV information can usually be found in the bill of lading, on the Web-Based Supply Chain Management (WBSCM), The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 9

75 or in the Texas Unified Nutrition Programs System (TX-UNPS). The value applied to USDA Foods for audit purposes does not apply for other purposes. Audit Scope and Frequency The frequency and scope of audits are determined by the amount and source of federal financial assistance expended in any year. If the federal financial assistance that a CE expends in one year exceeds $500,000, then the CE must have an organization-wide audit conducted for that year. If the federal financial assistance that a CE expends in one year is less than $500,000, then the CE is exempt from the single audit requirement. The threshold will increase to $750,000 for each CE s fiscal year beginning on January 1, 2015 or after. EXCEPTION: CEs who are subject to single audit requirements may elect to obtain a programspecific audit, if 100% of the their federal financial assistance results from their participation in the TEFAP. CEs subject to single audit must obtain the audits on a yearly basis unless they are one of the following: State or local government that is required by constitution or statute, in effect on January 1, 1987, to undergo audits less frequently than annually. This requirement must still be in effect for the biennial period under audit. Nonprofit organization that has obtained biennial audits for all biennial periods ending between July 1, 1992, and January 1, 1995 (30-month period). All consecutive audits obtained during this 30-month period must have been on a biennial basis. Any interruption in the biennial process during this 30-month period disqualifies the sponsor from being able to obtain a biennial audit for the CE s fiscal years beginning after June 30, A nonprofit organization that meets one of the following: o Started operating a federal program for the first time during the 30-month period stated above o Had already been in existence and had been obtaining biennial Generally Accepted Accounting Standards (GAAS) financial statement audits prior to participating in a federal program o Continued a biennial audit cycle when participating in the federal program If biennial audits are conducted, they must include both years. However, if an organization is subject to the audit requirements and has a financial audit performed annually, the organization must also obtain a single audit on an annual basis. CEs who are exempt from the single audit requirement remain subject to any audit requirements prescribed by state or local laws or regulations. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 10

76 Procedures for Compliance with Audit Requirements Organizations that are not exempt from the single audit requirement must arrange for an audit to be conducted by one of the following: An independent auditor A local government accountant An independent certified public accountant An independent public accountant, licensed on or after December 31, 1970, whose license or certificate is still valid As a condition of eligibility for participation in TEFAP, TDA requires that CEs submit documentation of compliance with single audit requirements. CEs must submit as proof of eligibility one or more of the following forms of documentation of compliance: A copy of an audit for a specific fiscal year which has been determined to meet the requirements of the Single Audit Act A completed audit form, submitted via TX-UNPS or paper, showing that the CE will obtain, if required, an acceptable audit that meets the requirements of the Single Audit Act TDA will notify CEs of due dates for audits six months after the end of the fiscal year for which the audit is due, and eight months after the end of the fiscal year for which the audit is due. The first notification will be sent by standard, first-class mail. The second notification will be sent by USPS certified mail, return receipt requested, and standard first-class mail. In this letter, TDA will notify a CE of the following: TDA must receive the audit on or before the due date specified in this notice. If TDA does not receive the audit by the specified due date, TDA will terminate the Commodity Agreement effective the first day of the month following the month in which the audit was due. The CE has the right to appeal this decision. If a CE submits an audit that does not meet single audit requirements, TDA will notify the CE that the audit is unacceptable. The CE will be given 30 calendar days from the date on the notification letter to submit an acceptable audit. If the CE does not submit an acceptable audit by the specified time frame, TDA will notify the CE of the following: The CE failed to provide an acceptable audit within the specified time frames. TDA must receive an acceptable audit by the due date specified in this notification. If TDA does not receive an acceptable audit by the specified due date, TDA will The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 11

77 terminate the Commodity Agreement effective the first day of the month following the due date specified in the above mentioned notification. The CE has the right to appeal this decision. If TDA does not receive an acceptable audit by the specified due date, TDA will notify the CE that the CE failed to provide an acceptable audit by the specified due date, and TDA terminated the Commodity Agreement effective the first day of the month following the specified due date. When the audit is completed, a CE must submit an original and two copies to the Food and Nutrition program specialist. CEs should review and accept the completed audit before submitting the audit to. If corrective action is necessary, the CE should work with the auditing firm to develop a corrective action plan. If the audit is organization-wide but the TEFAP is not specifically audited, the CE must submit a letter from the auditor stating that the program was included in the random sampling process but was not selected for audit. Sanctions for Noncompliance TDA must receive an acceptable audit within nine months of the last day of the current fiscal year if CE is submitting an annual audit, or second fiscal year included in the biennial audit period, if CE is submitting a biennial audit. TDA may terminate the Commodity Agreement, effective the first day of the month following the month in which the audit was due, if either of the following conditions is true: TDA does not receive the audit by the specified due date. The CE submits an audit that does not meet requirements of the Single Audit Act. TDA will notify the CE in writing that the audit is unacceptable. CEs must submit an acceptable audit within 30 calendar days of the date of the notice. If TDA determines that extenuating circumstances resulted in a CE s inability to submit an acceptable audit, TDA may conduct an audit, either directly or through contract with a third party. The CE must pay all costs associated with such an audit. CEs have the right to appeal any decision TDA makes that adversely affects a CE s participation in the program. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 12

78 Once a Commodity Agreement has been terminated for failure to comply with the Single Audit Act, the CE must provide an acceptable audit for any outstanding audit year(s) and comply with the requirements of the Single Audit Act in order to be eligible to participate in TDA s food programs. Other Audits TDA retains, both for itself and for the federal government, the right to conduct additional audits as necessary. If serious deficiencies such as fraud or misuse of funds occur and corrective action would not be practical, TDA will immediately terminate the Commodity Agreement to eliminate participation in TEFAP. The Emergency Food Assistance Program Texas Department of Agriculture July 2015 Section 5000, Visits, Reviews, and Audits Page 13

79 Section 6000 Civil Rights Table of Contents Protected Classes... 2 Title VI of the Civil Rights Act of Public Notification... 2 Compliance Reviews... 5 Training... 5 Complaints... 6 The Collection of Racial and Ethnic Data... 6 Section 504 of the Rehabilitation Act of Program Accessibility... 7 Public Notification... 8 Employment... 8 Designation of Section 504 Coordinator... 8 Complaint/Grievance Procedures... 8 Self-Evaluation of Services... 8 Americans with Disabilities Act... 9 Services... 9 Employment... 9 The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 1

80 6000 Civil Rights Protected Classes Each contracting entity (CE) is responsible for ensuring that all persons have equal access to the program. The CE, subdistributing agency, and distribution site cannot discriminate in employment or program participation based on the following classes: Race Color National origin Sex Age Disability A CE must strictly adhere to and enforce the provisions of Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act (ADA). The additional protected classes included in the nondiscrimination statement and complaintfiling procedures below apply to other USDA programs and employment activities. Title VI of the Civil Rights Act of 1964 Public Notification As part of the CE s public notification responsibilities, each CE, subdistributing agency, and distribution site must do the following: Display the U.S. Department of Agriculture nondiscrimination poster ("...And Justice For All") in a prominent place that is visible to participants at all times Make program information available to the public upon request Be able to provide information materials related The Emergency Food Assistance Program (TEFAP) in languages other than English, if the need exists Provide the following nondiscrimination statement and complaint-filing procedures in all applications and program-related information intended for current and potential participants: The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 2

81 In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, sex, disability, age, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA. Persons with disabilities who require alternative means of communication for program information (e.g. Braille, large print, audiotape, American Sign Language, etc.), should contact the Agency (State or local) where they applied for benefits. Individuals who are deaf, hard of hearing or have speech disabilities may contact USDA through the Federal Relay Service at (800) Additionally, program information may be made available in languages other than English. To file a program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, (AD-3027) found online at: and at any USDA office, or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW Washington, D.C ; (2) fax: (202) ; or (3) program.intake@usda.gov. This institution is an equal opportunity provider. The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 3

82 In Spanish the nondiscrimination and complaint-filing procedure is: De conformidad con la Ley Federal de Derechos Civiles y los reglamentos y políticas de derechos civiles del Departamento de Agricultura de los EE. UU. (USDA, por sus siglas en inglés), se prohíbe que el USDA, sus agencias, oficinas, empleados e instituciones que participan o administran programas del USDA discriminen sobre la base de raza, color, nacionalidad, sexo, discapacidad, edad, o en represalia o venganza por actividades previas de derechos civiles en algún programa o actividad realizados o financiados por el USDA. Las personas con discapacidades que necesiten medios alternativos para la comunicación de la información del programa (por ejemplo, sistema Braille, letras grandes, cintas de audio, lenguaje de señas americano, etc.), deben ponerse en contacto con la agencia (estatal o local) en la que solicitaron los beneficios. Las personas sordas, con dificultades de audición o discapacidades del habla pueden comunicarse con el USDA por medio del Federal Relay Service [Servicio Federal de Retransmisión] al (800) Además, la información del programa se puede proporcionar en otros idiomas. Para presentar una denuncia de discriminación, complete el Formulario de Denuncia de Discriminación del Programa del USDA, (AD-3027) que está disponible en línea en: y en cualquier oficina del USDA, o bien escriba una carta dirigida al USDA e incluya en la carta toda la información solicitada en el formulario. Para solicitar una copia del formulario de denuncia, llame al (866) Haga llegar su formulario lleno o carta al USDA por: (1) correo: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW Washington, D.C ; (2) fax: (202) ; o (3) correo electrónico: program.intake@usda.gov. Esta institución es un proveedor que ofrece igualdad de oportunidades. The nondiscrimination statement must be printed in its entirety on all program documents that are intended for the public. The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 4

83 Program-related written materials must be provided to all current and potential program participants with the nondiscrimination statement and complaint-filing procedures included. Note: When human likenesses are used in program materials, reasonable efforts must be made to depict racial balance. Compliance Reviews Compliance reviews help to ensure that civil rights requirements are fulfilled at each level of program administration, including the application approval process and the federal and state monitoring efforts. The Texas Department of Agriculture (TDA) will determine whether the CE and its subdistributing agencies and distribution sites comply with civil rights requirements before approving the initial application to participate. TDA determines CE compliance by examining the Application for Participation/Plan of Operation, and supporting documentation, as well as by conducting a pre-approval visit to verify the information. During compliance reviews, TDA will also evaluate compliance with civil rights requirements. Training The CE, subdistributing agency, and distribution site personnel must be trained in all aspects of civil rights before assuming any TEFAP duty and every program year thereafter. Volunteers who regularly interact (i.e., have contact at recurring normal intervals) with program applicants and participants or determine eligibility must receive full civil rights training on an annual basis. Volunteers who handle personal information of applicants and participants must also receive full training. Full training, according to FNS Instruction 113-1, Civil Rights Compliance and Enforcement Nutrition Programs and Activities includes, but is not limited to, the following: Collection and use of data Effective public notification systems Complaint procedures Compliance review techniques Resolution of noncompliance Requirements for reasonable accommodations of persons with disabilities Requirements for language assistance Conflict resolution Customer service The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 5

84 Volunteers who do not handle personal information and only infrequently interact (i.e., seldom or rarely) with program applicants and participants must receive, at a minimum, limited civil rights training (i.e., customer service and any other subject matter applicable to each volunteer s role and responsibilities). As not all the subjects for full civil rights training are required, this training may be less time intensive than the full training provided to the frontline volunteers who regularly interact with or handle personal information of program applicants and participants. Volunteers who do not interact in any way with program applicants and participants and who do not handle personal information do not need civil rights training. If there is a concern that any volunteer cannot understand and/or abide by the training and civil rights requirements, then that volunteer should not interact in any way with program applicants and participants or handle personal information. Refer to TEFAP Handbook, Section 11000, Resources, Civil Rights Guides for Food and Nutrition, for information on civil rights training materials. Complaints Each CE, subdistributing agency, and distribution site must have procedures for processing complaints. The site personnel of each CE, subdistributing agency, and distribution site must be able to provide documentation of the procedures and an explanation of the complaint process. If a complaint is filed with a CE, subdistributing agency, or distribution site, the organization must forward it to USDA immediately. The organization should send a courtesy copy to TDA Commodity Operations at commodityoperations@texasagriculture.gov. Alternatively, the organization may call TEX-MEAL ( ) for submittal information. The Collection of Racial and Ethnic Data Federal guidance exempts CEs from collecting racial and ethnic data. The only required information for TEFAP eligibility is specified in TEFAP Handbook Section 4000, Managing the Program, Household Application. CEs may collect additional information, such as racial and ethnic data. The collection of additional data, however, must not be a real or perceived barrier to participation. In other words, a CE must allow an applicant to supply only the federally required information to receive TEFAP foods. If a CE creates a customized intake form, the form must state clearly that an applicant can receive TEFAP foods by providing only the information specified in TEFAP Handbook, Section 4000, Managing the Program, Household Application. The Emergency Food Assistance Program Texas Department of Agriculture December 2015 Section 6000, Civil Rights Page 6