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USDA/FNS RIN: 0584-AC24 Publication ID: Fall 2010 
Title: Child and Adult Care Food Program: Improving Management and Program Integrity 
Abstract: This rule amends the Child and Adult Care Food Program (CACFP) regulations. The changes in this rule result from the findings of State and Federal program reviews and from audits and investigations conducted by the Office of Inspector General. This rule revises: State agency criteria for approving and renewing institution applications; program training and other operating requirements for child care institutions and facilities; and State and institution-level monitoring requirements. This rule also includes changes that are required by the Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (Pub. L. 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336). The changes are designed to improve program operations and monitoring at the State and institution levels and, where possible, to streamline and simplify program requirements for State agencies and institutions (95-024). 
Agency: Department of Agriculture(USDA)  Priority: Other Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 7 CFR 226 
Legal Authority: 42 USC 1766; PL 103-448; PL 104-193; PL 105-336 
Legal Deadline:  None

Statement of Need: In recent years, State and Federal program reviews have found numerous cases of mismanagement, abuse, and, in some instances, fraud by child care institutions and facilities in the CACFP. These reviews revealed weaknesses in management controls over program operations and examples of regulatory noncompliance by institutions, including failure to pay facilities or failure to pay them in a timely manner; improper use of program funds for non-program expenditures; and improper meal reimbursements due to incorrect meal counts or to mis-characterized or incomplete income eligibility statements. In addition, audits and investigations conducted by the Office of Inspector General (OIG) have raised serious concerns regarding the adequacy of financial and administrative controls in CACFP. Based on its findings, the OIG recommended changes to CACFP review requirements and management controls.

Summary of the Legal Basis: Some of the changes proposed in the rule are discretionary changes being made in response to deficiencies found in program reviews and OIG audits. Other changes codify statutory changes made by the Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (Pub. L. 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336).

Alternatives: This proposed interim final rule is under development and alternatives are not yet articulated. FNS is working with State agencies to identify reasonable alternatives to implement the changes mandated by law. FNS will be developing extensive guidance materials in conjunction with agency cooperators to meet the objectives of the statute.

Anticipated Costs and Benefits: This rule contains changes designed to improve management and financial integrity in the CACFP. When implemented, these changes would affect all entities in CACFP, from USDA to participating children and children's households. These changes will primarily affect the procedures used by State agencies in reviewing applications submitted by, and monitoring the performance of, institutions which are participating or wish to participate in the CACFP. Those changes which would affect institutions and facilities will not, in the aggregate, have a significant economic impact. Data on CACFP integrity is limited, despite numerous OIG reports on individual institutions and facilities that have been deficient in CACFP management. While program reviews and OIG reports clearly illustrate that there are weaknesses in parts of the program regulations and that there have been weaknesses in oversight, neither program reviews, OIG reports, nor any other data sources illustrate the prevalence and magnitude of CACFP fraud and abuse. This lack of information precludes USDA from estimating the amount of money lost due to fraud and abuse or the reduction in fraud and abuse the changes in this rule will realize.

Risks: With the interim final rule in place and operational, risk of integrity problems is reduced. The final rule will use comments from stakeholders to further improve the rule.

Timetable:
Action Date FR Cite
NPRM  09/12/2000  65 FR 55103 
NPRM Comment Period End  12/11/2000   
Interim Final Rule  06/27/2002  67 FR 43448 
Interim Final Rule Effective  07/29/2002   
Interim Final Rule Comment Period End  12/24/2002   
Interim Final Rule  09/01/2004  69 FR 53502 
Interim Final Rule Effective  10/01/2004   
Interim Final Rule Comment Period End  09/01/2005   
Final Action  02/00/2011   
Regulatory Flexibility Analysis Required: No  Government Levels Affected: Local, State 
Small Entities Affected: No  Federalism: Yes 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Related RINs: Merged with 0584-AC94 
Agency Contact:
James F Herbert
Regulatory Review Specialist
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive,
Alexandria, VA 22302
Phone:703 305-2572
Email: james.herbert@fns.usda.gov

 
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