1. Presenters: Barbara Smith and Belva Brennan April 12, 2012 USDA, Food and Nutrition Service, Child Nutrition Division Program Analysis and Monitoring Branch

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

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

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

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

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

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

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

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

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

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

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

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

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

15. FY2010 and FY2011 TME Findings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

36. Debt Collection Example See Handout

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

38. The NDL System MOVING FORWARD

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

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

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

42. THANK YOU! QUESTIONS ?????