1. THE CHILD AND ADULT CARE FOOD PROGRAM playing a vital and integral role in improving the overall quality of care and daily nutritional health of participants SERIOUS DEFICIENT (FDCH) What does it all mean?

2. SERIOUS DEFICIENCY  Serious Deficient means 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 Program operation.  It is NOT THE END OF WORLD!!  It is the first step in successfully addressing the non- compliance, ensuring that Program uniformity and Program integrity is being met.

3. The Process: State, Sponsor & Provider  Proper implementation of the serious deficiency process includes the development of a Corrective Action Plan (CAP).  The CAP must demonstrate that the deficiencies will be fully and permanently corrected.  Sponsor can terminate home agreement for cause if sponsor determined home committed one or more SD  During this process, both sponsor & provider will continue to participate in the Program and receive technical assistance.  Sponsor and provider must work hard to achieve compliance  SA will work with sponsor—sponsor will work with provider

4. How does it begin? State to SponsorSponsor to Provider Administrative Reviews / Monitoring-- Technical Assistance & Follow-Up Visits These reviews and visits are conducted to ensure compliance with Program requirements and to provide technical assistance to reach compliance SA reviews some or all of sponsors related Program records Sponsor reviews some or all of providers Program records How many years are you required to maintain Program records? How many years are providers required to maintain Program records? 3 years plus the current year

5. Next Steps…. SA to SponsorSponsor to Provider SA finished conducting its review of “Baby First” sponsor of homes Sponsor finished conducting its review of all day care homes Baby First was deficient in five Program areas: Training of providers Lack of serious deficient procedures Meal pattern errors Menus Lack of records Sunshine day care home was deficient in four Program areas: Submitted false info on application Failed to attend sponsor training Meal pattern errors Menus problems SA complies findings, determines Baby First is seriously deficient in Program operations and sends Notice of Serious Deficient. Sponsor complies findings, determines Sunshine day care home is seriously deficient in Program operations and sends Notice of Serious Deficient.

6. The SD Notification……. SA to SponsorSponsor to Provider Must identify certain things: Name of chairman of board, executive director, director and any additional individuals determined to be responsible Must identify certain things: Name of provider and any other individual determined to be responsible List all serious deficiencies Action taken to correct Time allotted to correct (not to exceed 90 days) Time allotted to correct (not to exceed 30 days) SD determination cannot be appealed SA must pay all valid claims until SD is corrected Sponsor must pay all valid claims until SD is corrected

7. The SD Notification……. SA to SponsorSponsor to Provider SA assessed fiscal sanction against sponsor---owes money to SA—can be appealed Sponsor can assess fiscal sanction against provider---owes money to sponsor---cannot be appealed Failure to fully and permanently correct w/in allotted time will result in SA sending Notice of Proposed Termination and Disqualification to sponsor and its principals Failure to fully and permanently correct w/in allotted time will result in sponsor sending Notice of Propose Termination and Disqualification of home and its principals Voluntary termination of agreement by organization after receiving notification will result in sponsor’s formal Notice of Termination, Disqualification and sponsor and its principals placement on NDL. Voluntary termination of agreement by provider after receiving notification will result in home’s formal Notice of Termination, Disqualification and placement of home and its principals on NDL.

8. SA….USDA…..Sponsor….CAP….. SA to SponsorSponsor to Provider SA must notify USDA--send copy of institution SD notification Sponsor must notify SA--send copy of provider SD notification Institution must submit CAP detailing internal controls implemented to ensure how you will fully and permanently correct the deficiencies Provider must submit CAP detailing internal controls implemented to ensure how it will fully and permanently correct the deficiencies Timely/Acceptable CAP---SA issues notice of temporarily deferred Follow-up Timely/Acceptable CAP---Sponsor issues notice of temporarily deferred Follow-up Not Timely/Unacceptable/No CAP-- SA issues Notice of Proposed to Termination & Disqualification

9. Acceptable CAP….Sponsor & Provider  Each party must submit CAP within the allotted time frame Remember: sponsor has no more than 90-calendar days from receipt of SD notification to finalize corrections BUT provider has only 30-calendar days to correct deficiencies.  CAP must include supporting documentation and describe the:  What  Who  When  Where  How

10. Acceptable CAP….Sponsor & Provider  CAP addresses each deficiency ensuring full and permanent correction  SA/Sponsor send letter that:  CAP has been submitted timely  CAP fully and permanently detailed how compliances will be met  Sponsor/Provider is in a “temporarily deferred” status Anytime in future, SA/Sponsor can visit to ensure actions are being taken to correct deficiencies HOWEVER, if same deficiencies are identified during follow-up, SA/Sponsor can move to immediately Propose to Terminate and Disqualify—this action is appealable

11. Unacceptable CAP….Sponsor & Provider  Not submitting a CAP  Not submitting a timely CAP  Not responding to each deficiency identifying actions to fully and permanently correct  SA/Sponsor must move to send Notice to Propose to Terminate and Disqualify— this action can be appealed

12. Notice of Proposed Termination and Disqualification  SA/Sponsor will send detailed letter informing respective parties that:  CAP was submitted timely but inadequate/ unacceptable Failed to ensure full and permanent correction of each deficiencies  Right to appeal this action— SA/sponsor attach hearing procedures Written notification must be received by SA within 15-calendar days of receipt of proposed actions--- not later than close of business (5 pm) on the deadline date Same procedures for providers must be applied uniformly except receipt time.  SA sends copy to USDA—Sponsor sends copy to SA

13. Suspension of FDCH  A Sponsor must immediately suspend the providers CACFP participation if:  Home has been cited for health or safety violations by a State licensing official  Sponsor determines there is an imminent threat to health and safety of any participants  Home has/is engaged in activities that threaten public health or safety and licensing officials cannot conduct an immediate visit  Sponsor must issue a notice of suspension, serious deficiency and propose to terminate the day care home’s agreement 13

14. Suspension Notice to FDCH  The notice must:  Specify the serious deficiencies found and home’s opportunity to appeal proposed termination  State that participation (including all Program payments) will remain suspended until the administrative review is conducted  Inform home if administrative review official overturns suspension, home may claim for eligible meals during the suspension  Termination will result in placement on NDL  Voluntarily termination after receipt of notice will be terminated for cause and disqualified 14

15. Sponsor’s Suspension Due to False/Fraudulent Claims  Sponsor knowingly submits false or fraudulent claims  SA:  issues notice to propose to suspend participation and payment  Identify effective date of suspension  Duration of suspension—up to 120 days

16. False/Fraudulent Claims  Inform sponsor---action can be appealed  sponsor must submit written appeal request  Notify USDA  Must ensure that sponsored facilities continue to receive reimbursement for eligible meals served during the suspension period.  Must pay any valid unpaid claims for eligible meals served AND allowable administrative costs incurred during the suspension

17. Notice of “Final” Termination and Disqualification  Sponsor/provider didn’t appeal Notice of Proposed Termination and Disqualification OR Suspension  Sponsor/provider appealed Notice of Proposed Termination and Disqualification OR Suspension  Hearing Official upheld SA/sponsor decision  SA/sponsor must immediately notify respective parties of decision  Effective date of termination and disqualification  If sponsor/provider owes debt, must be repaid  Sponsor/provider/responsible parties are placed on (NDL) National Disqualifying List

18. National Disqualifying List Question: How long does the sponsor/provider and the responsible individual remain on this list?  3 years  5 years  7 years Answer: 7 years If sponsor/provider/RPI owes a debt, remain on list until debt is paid in full (interest in accrued); Less than 7 years, if sponsor request re-application, only after acceptable CAP is submitted; USDA and SA must both concur; home must submit request to SA

19. What happens if Sponsor/Provider’s Appeal is Upheld ?  Hearing Official renders decision upholding the sponsor/provider  SA/sponsor must immediately notify the respective parties---the proposed termination and disqualification is “rescinded”  No further action is necessary---sponsor/provider is in good standings again  Suspension is overturned  SA must notify sponsor and disburse all suspended administrative payments; same rule applies for home.

20. RECAP

21. What Actions Can Be Appealed?  Under the Serious Deficiency Process:  Suspension to participate due to submission of false/fraudulent claims  Suspension of payment due to submission of false/fraudulent claims  Adverse fiscal sanctions resulting from administrative review/technical assistance/follow-up visit  Proposed to Terminate and Disqualify

22. What Actions CANNOT Be Appealed? Under the serious deficiency process:  Declared Serious Deficient  Determination that CAP is unacceptable  Final Termination and Disqualification

23. Main Objective  Stay in Program compliance  When in doubt of Program operations, STAY in contact with your Specialist; sponsor stays in touch with provider  SA/sponsor here to assist and provide technical assistance  If declared SD, submit timely CAP that addresses all deficiencies ensuring internal controls to fully and permanently correct problem areas  It’s Still Not the End of the World?  If you appeal adverse actions—make sure your case is strong- bring any and all documentations

24. Summary  WIN Appeal  You’re in good standings, adverse action is rescinded

25. Summary  LOSE Appeal  SA/sponsor must complete serious deficiency process Proposed to terminate and disqualify Final termination and disqualification Placed on National Disqualifying List

26. Summary  SA/sponsor:  wants respective parties to remain in good standings  wants respective parties to maintain appropriate records  wants to help in any way possible to stay in compliance  doesn’t want any sponsor/provider to lose money and to go through the Serious Deficient process