Serious Deficiency Process For Institutions

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Serious Deficiency ProcessFor Institutions
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Key Terms

• Institution
• Sponsor
• Facility
• Termination
• Disqualification
• The SD process

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Serious Deficiency Process

• 1st SD - Youve got a Serious Problem!
• 2nd Written Notice of SD
• 3rd Corrective Action Chance to correct
  problem
• 4th - Proposed Termination / Disqualification if
  CA is inadequate

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What is a Serious Deficiency?

• Two critical factors Frequency and Severity
• Frequency How often does it occur?
• Isolated error or
• Systemic problem

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What is a Serious Deficiency? (cont)

• Severity How bad is the error?
• Financial Viability
• Administrative Capability
• Accountably operate the Program

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SD or Not? You Be the Judge

• Independent center in CACFP for 5 years
• Excellent records during review 3 years ago
• Now reviewer finds
• Center/home claiming same number of snacks for
  weeks
• Snacks exceeds number of enrollment forms
• Attendance records show fewer kids than snacks
• 2 months of meal counts menus missing
• 1/3 of menus dont meet the meal pattern

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What Next?

• Serious Deficiency Notice
• The most important step

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Serious Deficiency Notice

• Declare the Institution SD
• Detailed description the SDs reference
  supporting documents
• Outcome of corrective action (CA)
• Deadline for CA
• Name persons who caused the SD
• (Responsible Principals and Individuals)

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SD Notice (cont)

• 6. SD determination cannot be appealed
• 7. Inadequate CA by deadline
• Proposed termination of agreement
• Proposed disqualification
• 8. Continue to receive CACFP payments during
• CA
• 9. Voluntary termination disqualification

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Who gets the Notice?

• Executive Director
• Board Chair
• If no Board Chair, then equivalent individual
• Public entities
• For-profits
• Nonprofits

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Who gets the Notice? (cont.)

• Top management/application signer
• Depends on organization
• Public (supervisor/department head)
• For-profit (owner)
• Corporation/Limited liability corporation (LLC)
  (president/manager)
• Tribal organization (chief/tribal chairman)
• Military base (commander, supervisor of person
  signing application)

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Who is a Principal?

• Managers/supervisors
• Officers
• Board members
• Others as appropriate

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Not All Principals are Responsible Principals

• Result of their action or inaction
  that led to the SD

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Responsible Individuals

• Employees
• Contractors
• Volunteers, unpaid family members

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Responsible Principals Individuals

• RPs Two by virtue of position
• Executive Director
• Board Chair 
• Other responsible principals
• RIs Only when involved in egregious acts

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What Else Must Be Done?

• Send copy of SD Notice to FNSRO
• Place institution on the SA list

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The State Agency List

• All institutions declared SD in their State
• All RPs/RIs referred to FNS
• Effective internal management tool
• Track deadlines for issuing notices
• Track institutions progress

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Corrective Action

• Regs set maximum timeframes for completing CA
• SD Notice must specify
• Outcomes needed to correct the SD
• Deadline for taking action

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CA Timeframes

• Maximum of 90 days - most SDs
• More than 90 days - SDs involving management
  systems or processes
• Less than 30 days - SDs involving unlawful
  practices

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Corrective Action ? Up to 90 Days

• Training
• Monitoring
• Certain recordkeeping problems
• Some performance standards problems

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Corrective Action ? Over 90 Days

• Longer period for corrective action
• Computer system changes
• Certain personnel
• Must have CA plan  
• Within 90 days
• Milestones for completing specific tasks
• Final completion date

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Corrective Action ? Up to 30 Days

• Unlawful practices
• Concealing
• Past performance problems
• Criminal background
• Submitting
• False or fraudulent claims
• False information on application

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30 Days From When?

• New definition of Notice
• Received upon delivery
• By mail either certified mail return receipt,
  or
• Equivalent private mail service
• Received on date sent
• Fax, or
• Email
• If undeliverable, considered received 5 days
  after it was sent

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Is the SD Fully and Permanently Corrected?

• Review documentation
• Onsite review

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Is There Always a Chance for CA?

•  

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Mistaken Identity

• ABC Child Care Center
• 1st time applying to CACFP
• Anonymous tip that ABC has conviction
• SD notice
• 5 days to show allegation untrue

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Loose Ends on CA

• The SD remains until CA is completed
• SA may require CA plans for long-term changes
• SA will respond to same problem found on future
  reviews depending on various factors
• Promise to do better is NEVER adequate CA

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SD is Corrected

• Rescind SD determination
• Copy to FNSRO
• Update SA list

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SD is Not Corrected

• Notice of Proposed Termination/DQ
• Send to
• Executive Director
• Board Chair
• RP/RIs
• Copy to FNSRO
• Update SA list

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Notice of Proposed Termination/DQ

• SA notice proposes to
• Terminate institutions agreement
• Disqualify institution RP/Ris
• Notice must specify
• Basis for SAs actions
• Procedures for appeal
• Program payments continue during appeal
• Voluntary termination disqualification

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If the Institution Fails to Appeal

• Notice of Termination Disqualification is sent
  to
• Executive Director
• Board Chair
• RP/RIs
• Copy to FNSRO
• Update SA list

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Termination/DQ Notice

• Date agreement will be terminated
• Institution RP/RIs disqualified and on National
  DQ List
• Basis for SA action no timely appeal or SA won
  appeal

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Status of Program Payments

• General rule Participation, including
  payments, continues during the SD process
• Two exceptions
• New institutions declared seriously deficient
• Suspended institutions
• SAs continues to pay valid claims

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Status of Program Payments (cont.)

• SA will only pay valid portion of claim
• SA review institutions claim
• Determine valid portion
• Pay valid portion
• Deny invalid portion

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Serious Deficiency ProcessFor Institutions