FNS-759 reg citation

Food and Nutrition Service, USDA

§ 275.3

Performance Reporting System as required in this part of the regulations.
The staff used to conduct QC reviews
shall not have prior knowledge of either the household or the decision
under review. Where there is prior
knowledge, the reviewer must disqualify her/himself. Prior knowledge is
defined as having:
(1) Taken any part in the decision
that has been made in the case; (2) any
discussion of the case with staff who
participated in the decision; or (3) any
personal knowledge of or acquaintance
with persons in the case itself. To ensure no prior knowledge on the part of
QC or ME reviewers, local project area
staff shall not be used to conduct QC or
ME reviews; exceptions to this requirement concerning local level staff may
be granted with prior approval from
FNS. However, local personnel shall
not, under any circumstances, participate in ME reviews of their own project
areas.

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[Amdt. 160, 45 FR 15898, Mar. 11, 1980, as
amended by Amdt. 266, 52 FR 3407, Feb. 4,
1987]

§ 275.3 Federal monitoring.
The Food and Nutrition Service shall
conduct the review described in this
section to determine whether a State
agency is operating the Food Stamp
Program and the Performance Reporting System in accordance with program requirements. The Federal reviewer may consolidate the scheduling
and conduct of these reviews to reduce
the frequency of entry into the State
agency. FNS regional offices will conduct additional reviews to examine
State agency and project area operations, as considered necessary to determine compliance with program requirements. FNS shall notify the State
agency of any deficiencies detected in
program or system operations. Any deficiencies detected in program or system operations which do not necessitate long range analytical and evaluative measures for corrective action
development shall be immediately corrected by the State agency. Within 60
days of receipt of the findings of each
review established below, State agencies shall develop corrective action addressing all other deficiencies detected
in either program or system operations

and shall ensure that the State agency’s own corrective action plan is
amended and that FNS is provided this
information at the time of the next formal semiannual update to the State
agency’s Corrective Action Plan, as required in § 275.17.
(a) Reviews of State Agency’s Administration/Operation of the Food Stamp Program. FNS shall conduct an annual review of certain functions performed at
the State agency level in the administration/operation of the program. FNS
will designate specific areas required
to be reviewed each fiscal year.
(b) Reviews of State Agency’s Management Evaluation System. FNS will review each State agency’s management
evaluation system on a biennial basis;
however, FNS may review a State
agency’s management evaluation system on a more frequent basis if a regular review reveals serious deficiencies
in the ME system. The ME review will
include but not be limited to a determination of whether or not the State
agency is complying with FNS regulations, an assessment of the State agency’s methods and procedures for conducting ME reviews, and an assessment
of the data collected by the State agency in conducting the reviews.
(c) Validation of State Agency error
rates. FNS shall validate each State
agency’s payment error rate and
underissuance error rate, as described
in § 275.23(c), during each annual quality control review period. Federal validation reviews shall be conducted by
reviewing against the Food Stamp Act
and the regulations, taking into account any FNS-authorized waivers to
deviate from specific regulatory provisions. FNS must validate the State
agency’s negative case error rate, as
described in § 275.23(d), when the State
agency’s payment error rate for an annual review period appears to entitle it
to an increased share of Federal administrative funding for that period as outlined in § 277.4(b)(2) of this chapter, and
its reported negative case error rate for
that period is less than two percentage
points above the national weighted
mean negative case error rate for the
prior fiscal year. However, this requirement will not preclude the Federal review of any negative case for other reasons as determined appropriate by

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§ 275.3

7 CFR Ch. II (1–1–10 Edition)

FNS. Any deficiencies detected in a
State agency’s QC system shall be included in the State agency’s corrective
action plan. The findings of validation
reviews shall be used as outlined in
§ 275.23(e)(6).
(1) Payment error rate. The validation
review of each State agency’s payment
error rate shall consist of the following
actions:
(i) FNS will select a subsample of a
State agency’s completed active cases,
as follows:
(A) For State agencies that determine their active sample sizes in accordance with § 275.11(b)(1)(ii), the Federal review sample for completed active cases is determined as follows:
Average monthly reviewable
caseload (N)
31,489 and over ......................
10,001 to 31,488 .....................
10,000 and under ....................

Federal subsample target
(n′)
n′=400
n′=.011634 N+33.66
n′=150

(B) For State agencies that determine their active sample sizes in accordance with § 275.11(b)(1)(iii), the Federal review sample for completed active cases is determined as follows:
Average monthly reviewable
caseload (N)

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60,000 and over ......................
10,001 to 59,999 .....................
10,000 and under ....................

Federal subsample target
(n′)
n′=400
n′=.005 N+100
n′=150

(C) In the above formula, n’ is the
minimum number of Federal review
sample cases which must be selected
when conducting a validation review,
except that FNS may select a lower
number of sample cases if:
(1) The State agency does not report
a change in sampling procedures associated with a revision in its required
sample size within 10 days of effecting
the change; and/or
(2) The State agency does not complete the number of case reviews specified in its approved sampling plan.
(D) The reduction in the number of
Federal cases selected will be equal to
the number of cases that would have
been selected had the Federal sampling
interval been applied to the State
agency’s shortfall in its required sample size. This number may not be exact
due to random starts and rounding.
(E) In the above formula, N is the
State agency’s minimum active case

sample size as determined in accordance with § 275.11(b)(1).
(ii) FNS Regional Offices will conduct case record reviews to the extent
necessary to determine the accuracy of
the State agency’s findings using the
household’s certification records and
the State agency’s QC records as the
basis of determination. The FNS Regional Office may choose to verify any
aspects of a State agency’s QC findings
through telephone interviews with participants or collateral contacts. In addition, the FNS Regional Office may
choose to conduct field investigations
to the extent necessary.
(iii) Upon the request of a State
agency, the appropriate FNS Regional
Office will assist the State agency in
completing active cases reported as not
completed due to household refusal to
cooperate.
(iv) FNS will also review the State
agency’s sampling procedures, estimation procedures, and the State agency’s system for data management to
ensure compliance with §§ 275.11 and
275.12.
(v) FNS validation reviews of the
State agency’s active sample cases will
be conducted on an ongoing basis as
the State agency reports the findings
for individual cases and supplies the
necessary case records. FNS will begin
the remainder of each State agency’s
validation review as soon as possible
after the State agency has supplied the
necessary information regarding its
sample and review activity.
(2) Underissuance error rate. The validation review of each State agency’s
underissuance error rate shall occur as
a result of the Federal validation of the
State agency’s payment error rate as
outlined in paragraph (c)(1) of this section.
(3) Negative case error rate. The validation review of each State agency’s negative case error rate shall consist of
the following actions:
(i) FNS will select a subsample of a
State agency’s completed negative
cases, as follows:
Average monthly reviewable
negative caseload (N)
5,000 and over ........................
501 to 4,999 ............................
Under 500 ...............................

Federal subsample target
(n′)
n′=160
n′=.0188 N+65.7
n′=75

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Food and Nutrition Service, USDA

§ 275.3

(A) In the above formula, n’ is the
minimum number of Federal review
sample cases which must be selected
when conducting a validation review,
except that FNS may select a lower
number of sample cases if:
(1) The State agency does not report
a change in sampling procedures associated with a revision in its required
sample size within 10 days of effecting
the change; and/or
(2) The State agency does not complete the number of case reviews specified in its approved sampling plan.
(B) The reduction in the number of
Federal cases selected will be equal to
the number of cases that would have
been selected had the Federal sampling
interval been applied to the State
agency’s shortfall in its required sample size. This number may not be exact
due to random starts and rounding.
(C) In the above formula, N is the
State agency’s minimum negative case
sample size as determined in accordance with § 275.11(b)(2).
(ii) FNS Regional Offices will conduct case record reviews to the extent
necessary to determine whether the
household case record contained sufficient documentation to justify the
State agency’s QC findings of the correctness of the State agency’s decision
to deny, suspend or terminate a household’s participation.
(iii) FNS will also review each State
agency’s negative case sampling and
review procedures against the provisions of §§ 275.11 and 275.13.
(iv) FNS will begin each State agency’s negative sample case validation
review as soon as possible after the
State agency has supplied the necessary information, including case
records and information regarding its
sample and review activity.
(4) Arbitration. (i) Whenever the State
agency disagrees with the FNS regional office concerning individual QC
case findings and the appropriateness
of actions taken to dispose of an individual case, the State agency may request that the dispute be arbitrated on
a case-by-case basis by an FNS Arbitrator, subject to the following limitations.
(A) The State agency may only request arbitration when the State agency’s and FNS regional office’s findings

or disposition of an individual QC case
disagree.
(B) The arbitration review shall be
limited to the point(s) within the Federal findings or disposition that the
State agency disputes. However, if the
arbitrator in the course of the review
discovers a mathematical error in the
computational sheet, the arbitration
shall correct the error while calculating the allotment.
(ii) The FNS Arbitrator(s) shall be an
individual or individuals who are not
directly involved in the validation effort.
(iii) With the exception of the restrictions contained in paragraph
(c)(4)(iii), for an arbitration request to
be considered, it must be received by
the appropriate FNS regional office
within 20 calendar days of the date of
receipt by the State agency of the regional office case findings. In the event
the last day of this time period falls on
a Saturday, Sunday, or Federal or
State holiday, the period shall run to
the end of the next work day. The
State agency shall be restricted in its
eligibility to request arbitration of an
individual case if that case was not disposed of and the findings reported in
accordance with the timeframes specified in § 275.21(b)(2). For each day late
that a case was disposed of and the
findings reported, the State agency
shall have one less day to request arbitration of the case.
(iv) When the State agency requests
arbitration, it shall submit all required
documentation to the appropriate FNS
regional office addressed to the attention of the FNS Arbitrator. The FNS
regional office QC staff may submit an
explanation of the Federal position regarding a case to the FNS Arbitrator.
(A) A complete request is one that
contains all information necessary for
the arbitrator to render an accurate,
timely decision.
(B) If the State agency’s request is
not complete the arbitrator shall make
a decision based solely on the available
documents.
(v) The FNS Arbitrator shall have 20
calendar days from the date of receipt
of a State agency’s request for arbitration to review the case and make a decision.

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§ 275.4

7 CFR Ch. II (1–1–10 Edition)

(5) Household cooperation. Households
are required to cooperate with Federal
QC reviewers. Refusal to cooperate
shall result in termination of the
household’s eligibility. The Federal reviewer shall follow the procedures in
§ 275.12(g)(1)(ii) in order to determine
whether a household is refusing to cooperate with the Federal QC reviewer.
If the Federal reviewer determines that
the household has refused to cooperate,
as opposed to failed to cooperate, the
household shall be reported to the
State agency for termination of eligibility.
(d) Assessment of Corrective Action. (1)
FNS will conduct will conduct a comprehensive annual assessment of a
State agency’s corrective action process by compiling all information relative to that State agency’s corrective
action efforts, including the State
agency’s system for data analysis and
evaluation. The purpose of this assessment and review is to determine if:
identified deficiencies are analyzed in
terms of causes and magnitude and are
properly included in either the State or
Project Area/Management Unit corrective action plan; the State agency is
implementing corrective actions according to the appropriate plan; target
completion dates for reduction or
elimination of deficiencies are being
met; and, corrective actions are effective. In addition, FNS will examine the
State agency’s corrective action monitoring and evaluative efforts. The assessment of corrective action will be
conducted at the State agency, project
area, and local level offices, as necessary.
(2) In addition, FNS will conduct onsite reviews of selected corrective actions as frequently as considered necessary to ensure that State agencies
are implementing proposed corrective
actions within the timeframes specified in the State agency and/or Project
Area/Management Unit corrective action plans and to determine the effectiveness of the corrective action. The
on-site reviews will provide State agencies and FNS with a mechanism for
early detection of problems in the corrective action process to minimize

losses to the program, participants, or
potential participants.
[Amdt. 160, 45 FR 15898, Mar. 11, 1980, as
amended by Amdt. 237, 47 FR 57669, Dec. 28,
1982; Amdt. 260, 49 FR 6303, Feb. 17, 1984;
Amdt. 266, 52 FR 3407, Feb. 4, 1987; 53 FR 1604,
Jan. 21, 1988; 54 FR 23951, June 5, 1989; Amdt.
309, 55 FR 1672, Jan. 18, 1990; Amdt. 328, 56 FR
60051, Nov. 27, 1991; Amdt. 366, 62 FR 29658,
June 2, 1997; Amdt. 373, 64 FR 38294, July 16,
1999; 68 FR 59523, Oct. 16, 2003]

§ 275.4

Record retention.

(a) The State agency shall maintain
Performance Reporting System records
to permit ready access to, and use of,
these records. Performance Reporting
System records include information
used in data analysis and evalution,
corrective action plans, corrective action monitoring records in addition to
ME review records and QC review
records as explained in paragraphs (b)
and (c) of this section. To be readily accessible, system records shall be retained and filed in an orderly fashion.
Precautions should be taken to ensure
that these records are retained without
loss or destruction for the 3-year period
required by these regulations. Information obtained on individual households
for Performance Reporting System
purposes shall be safeguarded in accordance with FNS policies on disclosure of information for the Food Stamp
Program.
(b) ME review records consist of thorough documentation of review findings,
sources from which information was
obtained, procedures used to review
Food Stamp Program requirements including sampling techniques and lists,
and ME review plans. The State agency
must submit documented evidence of
review findings to the FNS Regional
Office upon request for purposes of
evaluating State corrective action
plans.
(c) QC review records consist of
Forms FNS–380, Worksheet for Integrated TANF, Food Stamps and Medicaid Quality Control Reviews, FNS–
380–1, Integrated Review Schedule,
FNS–245, Negative Quality Control Review Schedule, and Form FNS–248, Status of Sample Selection and Completion; other materials supporting the review decision; sample lists; sampling
frames; tabulation sheets; and reports

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