Ss 10-27-09

SUPPORTING STATEMENT FOR

0584-NEW

Financial Status Report

FNS-778 and FNS-778A

John Bedwell

Supplemental Nutrition Assistance Program (SNAP)

Food and Nutrition Service/USDA

Park Center Building, Room 818

3101 Park Center Drive

Alexandria, VA 22302

(703) 305-2397

FAX (703) 605-0695

E-Mail: [email protected]

Background

This submission is to request the approval of two new FNS forms, the FNS-778 and FNS-778A, to replace the standard Financial Status Report, SF-269 (Food Stamp) (FS), and the Financial Status Report Addendum, SF-269A, respectively. The new forms will be used for State agency financial reporting for the Supplemental Nutrition Assistance Program (SNAP) (formerly the Food Stamp Program). This is to request an exception to the Federal Financial Report announced by the Office of Management and Budget (OMB).

On December 7, 2007, OMB published a Federal Register Notice announcing the promulgation of a new Federal Financial Report (FFR) to replace the SF-269. On August 13, 2008, OMB published a Notice which requires Federal agencies to transition to the new form no later than October 1, 2009.

While OMB adopted the new FFR in order to standardize and streamline the financial reporting on Federal grants and agreements, the new form cannot meet the needs of a program as complex as SNAP. SNAP consists of numerous functions and components for which financial data are needed in order for FNS to maintain a high level of program integrity and accountability. All such functions are required by SNAP regulations. Many of the functions are tied to the State Plan, which FNS approves. FNS then monitors the costs against the budget and approved Plan activities.

Since 1980, SNAP has used a program-specific variant approved by OMB that captures total SNAP administrative costs and subdivides it into functional categories. In 1988, OMB published a new version of the SF-269 that captured only total program costs. The approved continued use of the program specific SF-269 variant since 1988 by SNAP represented an approved exception to the general rule. Thus, OMB has previously recognized the complexity and special needs of SNAP in 1980, when it granted the previous exception for SNAP financial reporting. Since then, SNAP has become even more complex. We propose retaining the content of the SF-269 currently used (except for removing obsolete columns) but moving to an FNS form. It would meet FNS needs and would require little change to FNS and State information technology (IT) systems and no change in the data themselves. It would minimize disruption to State agencies, since they could continue using the SNAP financial reporting format to which they are accustomed. For these reasons, FNS is seeking an exception to use the FNS-778 and FNS-778A for SNAP financial reporting.

For a more thorough discussion of the reasons for seeking an exception to use the FNS-778 and FNS-778A, see the March 9, 2009 memorandum from FNS to OMB seeking an exception and the Federal Register Notice published on April 3, 2009 (74 FR 15240) on the FNS-778.

A. Justification

1. Explain the circumstances that make the collection of information necessary.

Section 16(a) of the Food and Nutrition Act of 2008 (the Act) (7 U.S.C. 2011 et.seq.) authorizes the Secretary to pay each State agency an amount equal to 50 percent of most allowable administrative costs involved in each State agency’s operation of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program. Under corresponding SNAP regulations at 7 CFR 277.11(c), State agencies are required to use the standard Financial Status Report (Form SF-269) on a quarterly basis to report program administrative costs to FNS and to support the claims made for Federal funding. Since 1980, SNAP has used a program-specific SF-269 variant approved by the Office of Management and Budget (OMB) that captures total SNAP administrative costs and subdivides it into 26 functional categories. In 1988, OMB published a new version of the SF-269 that captures only total program costs. The continued use of the program-specific variant since then thus represents an exception to the general rule approved by OMB. FNS is proposing to have the FNS-778 replace the SF-269 for SNAP and be an exception to the new Federal Financial Report (FFR). As a separate action, FNS is in the process of publishing a final rule that will do a nomenclature change to remove the references to the SF-269 and replace them with references to the FNS-778. Copies of the current legislative and regulatory references are provided.

If approved, FNS plans to begin the approved data collection for the FNS-778 and FNS-778A on October 1, 2009.

2. Indicate how, by whom, and for what purpose the information is to be used.

State agencies must submit forms FNS-778 to receive State administrative funding and FNS-778A to receive benefits and comply with applicable legislation. If a respondent does not respond, the respondent is subject to withholding of administrative funds or termination from program participation.

The FNS-778 will be completed by State agencies on a quarterly basis with a final report 90 days after the end of the Federal fiscal year (FY). The form requests the administrative costs in total and by functional category. The form reports the administrative costs to operate SNAP at the State level and supports the claims for Federal funding. FNS uses the reported data to monitor the actual cost of each function against budgeted amounts approved for each State agency. FNS also uses the data to ensure that the Federal rate of reimbursement is appropriate for each function and that the State agency has met its matching requirement. FNS also uses the data to look at both total costs and cost per case.

The FNS-778A will be completed by State agencies on a quarterly basis with a final report 90 days after the end of the Federal fiscal year. The form requests the program cash-out benefits where FNS has approved the issuance of checks or electronic cash payments in lieu of electronic benefit transfer (EBT) benefits. It is reported by those few States with an FNS-approved project. The report supports the claims for Federal funding. FNS uses the reported data to monitor the actual benefit cost for these projects in each State agency along with participation trends. FNS also uses the data to look at both total costs and cost per case. The actual cost data (along with participation trends) helps us to estimate, budget, and set funding levels for these costs for the upcoming fiscal year.

3. Use of Information Technology and Burden Reduction.

FNS makes every effort to comply with the E-Government Act, 2002 by providing electronic submission in lieu of paper where feasible. While FNS does not require State and local agencies to integrate current information technology into their management system, it does encourage them to do so.

The current information system, the Food Programs Reporting System (FPRS), allows all forms to be reported electronically for all programs. State agencies have the option to report electronically or via paper submission for all forms. In the fourth quarter of FY 2008, approximately 88.7 percent of the total respondents in this submission reported the SF-269 (FS) electronically to FPRS, at https://fprs.fns.usda.gov.

4. Efforts to Identify Duplication Use of Similar Information.

This collection is not duplicated. FNS solely monitors SNAP and requires cost data to fund and exercise oversight of the program.

5. Impacts Small Businesses or Other Small Entities.

Although smaller State agencies are involved in this data collection effort, they deliver the same program benefits and perform the same function as any other State agency. Thus, they maintain the same kinds of information on file. While a county or local agency may report to the State agency, it is the State agency that reports to FNS for the entire State. All States have populations in excess of 100,000 people according to the July 2008 population estimate by the Census Bureau. None of our State respondents are small entities.

6. Consequences of Collecting the Information Less Frequently.

Eliminating the collection of administrative cost and benefit data would violate Section 16(a) of the Act’s funding mechanism. It would also mean that FNS

could not track administrative and benefit costs data for program evaluation.

7. Special Circumstances Relating to the Guideline of 5 CFR 1320.5.

There are no special circumstances which cause this information to be conducted in a manner that is inconsistent with 5 CFR 1320.5.

8. Comments in Response to the Federal Register Notice and Efforts to Consult Outside Agency.

On April 3, 2009, the Agency published a notice in the Federal Register (74 FR 15240). One comment was received and it suggested additional reporting. The suggestion was adopted in part. The comment analysis is attached. No State agencies objected to the FNS-778.

Consultation with users of the FNS-778 and FNS-778A (and their predecessor form, the SF-269 and SF-269A) has been a continuous process over the years leading up to FNS proposing the revised data collection for FY 2010.

9. Explanation of Any Payment or Gift to Respondents.

No payments or gifts will be awarded to respondents.

10. Assurance of Confidentiality Provided to Respondents.

No assurance of confidentiality is provided to respondents.

11. Justification for Sensitive Questions.

There are no questions of a sensitive nature.

12. Estimates of Hour Burden Including Annualized Hourly Costs.

The proposed instruments FNS-778 and FNS-778A (Attachment A) are proposed to be implemented for FY 2010.

FNS anticipates that there will be approximately 4,646 burden hours used for this data collection. Each respondent must submit four quarterly reports for the fiscal year followed by one final one after the fiscal year. The number of respondents was determined based on FY 2008 reporting.

The 53 State agencies submit the Financial Status Report (FNS-778) for the current year for administrative costs at an estimate of 16.8 hours per respondent which is submitted (5) five times per year for a total of annual responses of 265 = 4,452 hours. The 53 State agencies submit revised expenditure reports on the FNS-778 for prior years (3) three times per year for which we estimate 1 hour per respondent for an additional 159 hours annually. The use of the electronic system FPRS will minimize the burden for a revised report as only changed information will need to be re-keyed. Seven (7) State agencies will submit the FNS-778A (5) five times per year which is estimated at 1 hour per respondent or a total of 35 hours annually. The Bureau of Labor Statistics, Occupational Employment and Wages, May 2007, at the web site http:www.bls.gov/oes/current/oes211093.htm, reports that the hourly wage rate for State, Local and Tribal agencies data clerk is $16.92. The total burden estimate for respondents is $39,305.16 because State agencies are reimbursed by FNS for 50 percent of their administrative costs. The estimated annual burden and cost to respondents are as follows:

Table A.12.1: Reporting Burden Estimates

AFFECTED PUBLIC	FORMS	NUMBER OF RESPONDENTS	NUMBER OF ANNUAL REPORTS	TOTAL ANNUAL RESPONSES	TIME PER RESPONS. (HRS)	ANNUAL BURDEN HOURS	HOURLY WAGE RATE	COST TO PUBLIC
REPORTING BURDEN
STATE AGENCIES	FNS-778 (Initial Submission)	53	5	265	16.8	4,452.00	$ 16.92	$ 37,663.92
	FNS-778 (for 2-year Revisions)	53	3	159	1	159.00	$ 16.92	$1,345.14
	FNS-778A	7	5	35	1	35.00	$ 16.92	$ 296.10
Total Burden Estimates		53		459		4,646.00	$ 16.92	$ 39,305.16

Reporting Using the New Forms

FNS-778 FNS-778A

1. State and local government

cost @ $16.92/per staff hour $78,018 $592

2. Less 50% Federal reimbursement 39,009 296

3. Net cost to State and local

government 39,009 296

Respondent Cost 39,009 296 = $39,305

The estimate of respondent cost is based on the burden estimates developed in A.12.1 above. Functions performed by State and local agency staff are valued at $16.92 per staff hour. See Attachment B for the respondent cost.

13. Estimates of Other Total Annual Cost Burden to Respondents or

Record Keepers.

There are no capital/start-up costs associated with the current information collection.

14. Provide Estimates of Annualized Cost to the Federal Government.

The annual cost to the Federal Government to collect and use the data for the FNS-778 and FNS-778A is estimated at $105,873 for FY 2010. This cost includes (1) the cost of printing reporting forms; (2) reviewing and approving the data, data entry and retrieval, and monitoring the cost data; (3) automated system costs; and (4) the Federal share of State agencies’ burden costs to report the data. These costs are operational costs only. The 2009 Federal Salary Table was used to determine the estimated cost to the Federal Government for a Program Analyst, GS 11 step 5 for 539 total hours in compiling the information collection. (See Federal Cost Estimate Table in Attachment B which breaks the cost down by form.)

15. Explain the Reasons for any Program Changes or Adjustments.

This is a new collection with a proposed burden of 4,646 hours for FY 2010. The forms FNS-778 and FNS-778A are the proposed replacements for the SF-269 (FS) and SF-269A (FS) respectively for SNAP. Agencies are now accountable for carrying the burdens associated with obtaining exemption to use program specific forms in lieu of the SF-425, which does not meet our program needs. Therefore, this is a program change.

16. Plans for Tabulation and Publication and Project Time Schedule.

FNS publishes a State Activity Report on an annual basis that provides administrative costs for selected functions for the last fiscal year.

17. Reason(s) Display of OMB Expiration Date Is Inappropriate.

The agency will display the expiration date for OMB approval of the information collection on all instruments.

18. Exceptions to Certification for Paperwork Reduction Act Submissions.

There are no exceptions to the certification statement.

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