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Serious Deficiency Process: Corrective Action Plan

Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information

To: Child and Adult Care Food Program Agencies

Number: USDA-CACFP-17-2012

Attention: Food Program Director

Date: September 2012

Subject: Serious Deficiency Process and Acceptable Corrective Action Plans, National Disqualified List Procedures, and Debt Collection Process

Reference: The Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296; Title 7, Code of Federal Regulations, sections 226.6(c) and 226.6(k); and U.S. Department of Agriculture Policy Memo CACFP 14-2012

This Management Bulletin (MB) provides guidance on the regulatory serious deficiency (SD), termination and disqualification, and debt collection processes that the California Department of Education (CDE) follows for agencies participating in the Child and Adult Care Food Program (CACFP). This MB does not cover the processes that Day Care Home (DCH) sponsors must follow for DCH providers as that guidance was issued in MB USDA-CACFP-06-2010. The CDE will update MB USDA-CACFP-06-2010 in fall 2012.


The CDE is required to ensure that all agencies participating in the CACFP comply with all federal regulations. It is incumbent upon the CDE to initiate the SD process as the first step in successfully addressing an agency’s non-compliance with one or more aspects of its program operations. Proper implementation of the SD process includes the development of a corrective action plan (CAP). A CAP allows the CACFP agency to continue program participation and receive technical assistance from the CDE. It is critical to the integrity of the CACFP, the effectiveness of the SD process, and the National Disqualified List (NDL) that CDE consistently apply these procedures.

This MB will:

The Serious Deficiency Process

Pursuant to Title 7, Code of Federal Regulations (7 CFR), Section 226.6 (c)(3), if an agency is determined to be non-compliant in one or more aspects of its CACFP operations, the CDE must issue an SD notification to the agency and any identified responsible principals and/or individuals (RPI).

Once an agency is declared seriously deficient, the following procedures must be followed:

  1. The CDE sends a Notice of SD by certified mail return receipt (or equivalent private delivery) to the agency and any identified RPI. If the CDE does not receive the return receipt for the Notice of SD, the CDE sends the Notice of SD by fax as a second attempt, and by e-mail as a last resort. The Notice of SD identifies the name of the Chairman of the Board, President of the Board, Executive Director/Director, owner, and any additional individuals determined to be RPIs. The Notice of SD identifies all serious deficiencies as defined in 7 CFR Section 226.6(c) for agencies. The notice also specifies:
  1. The CDE places the name(s) of the RPIs on the state list (noting the basis for the SD determination).
  1. The agency submits a CAP that details the internal controls implemented to ensure that the SDs are fully and permanently corrected. A successful CAP includes:
  1. At the same time the CDE issues the Notice of SD to the agency and the RPIs, the CDE provides the Notice of SD and supporting documentation to the U.S. Department of Agriculture (USDA) Western Region Office (WRO) for the purpose of determining compliance with CACFP requirements in 7 CFR, Section 226.6(c).
  1. If the CAP is acceptable, the SD determination for the agency and the RPIs is temporarily deferred.
Corrective Action Plan Guidance

In accordance with 7 CFR sections 226.6(c)(1)(iii)(b), (2)(iii)(b), and (3)(iii)(b), agencies must submit to the CDE sufficient documentation of corrective actions taken to fully and permanently correct each SD. If the CDE determines that the corrective actions fully and permanently correct each SD, then the CDE will temporarily defer its SD determination.

The submission of a CAP must include the following information:

Agencies must include additional supporting documentation with the CAP. This might include copies of income eligibility forms, enrollment forms, enrollment rosters, staff training documentation, site monitoring reports, menus, Child Nutrition labels or manufacturers’ product analysis sheets or recipes, attendance records, meal count forms, itemized food receipts, etc.
Termination and Disqualification Process

If agencies either do not submit a CAP, the CAP submitted is not timely, or the submitted CAP is not acceptable, the CDE sends a Notice of Proposed Termination and Disqualification, with appeal rights, by certified mail return receipt (or equivalent private delivery) to the agency and the RPIs. If the CDE does not receive the return receipt from the agency, the CDE sends the Notice of Proposed Termination by fax as a second attempt, and by e-mail as a last resort.

If the agency files an appeal and the action taken by the CDE is upheld, the CDE sends the agency and all RPIs a Notice of Termination and Disqualification and requests that the USDA place the agency and the RPIs on the NDL with the full amount of any determined debt associated with both the agency and/or RPIs. The purpose of the NDL is to ensure that these RPIs are currently ineligible to participate in CACFP as part of a different agency, as agency principals, or as DCH providers.

Removal from the National Disqualified List

The CACFP regulations require that a disqualified agency or RPI remain on the NDL for seven years or until any outstanding debt is repaid, whichever is longer, unless the USDA in consultation with the CDE determines that the serious deficiency(ies) that led to their placement on the list has(ve) been corrected. If the agency corrects the SDs by removing the RPI from a position associated with the CACFP and all debts are paid, the CDE may request the agency be removed from the NDL, but the RPI would remain on the list for seven years. The RPI could be removed earlier if a CAP is approved, all debts are paid, and the CDE receives approval for early removal from the USDA.

The process to remove an agency or RPI from the NDL is as follows:

  1. The CDE forwards a request to remove the agency or RPI from the NDL to the USDA WRO. The request must include:
  1. The USDA WRO reviews the documentation submitted by the CDE to ensure that it is complete and provides sufficient information for the USDA National Office to complete its review of the request. The USDA WRO must indicate why it supports or opposes the request.
  1. The USDA National Office reviews the request and determines whether it agrees with the CDE’s recommendation. The USDA National Office notifies the USDA WRO of its decision. The effective date of the NDL removal is the date the USDA National Office processes the removal request.
Debt Collection Associated with Terminated and Disqualified Agencies/Responsible Principals and/or Individuals

In accordance with 7 CFR, Section 226.14, agencies and RPIs will remain on the NDL until the debt, with all incurred interest, is repaid. Interest continues to accrue throughout the entire period the agency and RPIs remain on the NDL.


If your agency has questions regarding this MB, please contact the CACFP Specialist assigned to your agency. You will find a list of contact information for specialists in the Download Forms section of the Child Nutrition Information and Payment System. You may also contact Nancy Charpentier, CACFP Office Technician, by phone at 916-327-2991 or by e-mail at

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