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Serious Deficiency Process Updates--Day Care Homes

This Management Bulletin (MB) provides updates to MB USDA-CACFP-06-2010, Serious Deficiency Process—Day Care Home Providers, and provides guidance and instruction on the implementation of the serious deficiency (SD) process for day care home (DCH) providers operating the Child and Adult Care Food Program (CACFP). In accordance with Title 7, Code of Federal Regulations (7 CFR), Section 226.6(c)(3)(ii)(R), failure by a sponsoring organization to properly implement and administer the DCH termination and administrative review provisions set forth at paragraph (l) of this section and Section 226.16(l) is an SD, and could jeopardize the sponsoring organization’s participation in the CACFP.

Corrective Action

U.S. Department of Agriculture (USDA) Policy Memo CACFP 14-2012 (page 5) Sample Corrective Action Plan for a Provider, states that at a minimum the following information must be included in the provider’s corrective action:

• The provider’s full name, address, and date of birth
• Each SD and the procedures to be implemented to correct the issue
• The time frame for implementation of the procedures to correct the issue
• The location where records will be kept associated with correcting the issue
• Supporting documentation as described in the Corrective Action Plan (CAP) Guidance section

Per the USDA, the location of the provider’s CAP does not have to be specific. The provider can indicate that the CAP is maintained at their home address and ensure the CAP is available upon request.

Proposed Termination and Proposed Disqualification

If the request for appeal has been forwarded to the sponsor’s hearing officer, and the provider submits documentation to the hearing officer that the hearing officer identifies as an acceptable CAP, the hearing officer may refer the documentation back to the sponsor for their review and approval. If the sponsor accepts the provider’s documentation, the sponsor must notify the hearing officer in writing that the sponsor accepts the provider’s CAP. The hearing officer will then issue a letter to the sponsor and provider that dismisses the appeal.

If the hearing officer determines that the sponsor’s findings are unsubstantiated or, without input from the sponsor, determines that the provider’s CAP permanently corrects the SD, the hearing officer may make a determination to overturn the sponsor’s proposed actions. If the hearing officer determines that the sponsor has properly implemented the SD process and the provider has not provided adequate proof to overturn the proposed actions, the hearing officer must uphold the proposed actions.

Terminating Providers in the Child Nutrition Information and Payment System

The sponsor must access the Child Nutrition Information and Payment System (CNIPS) and terminate the provider on the date the sponsor: (1) determines a provider is terminated; or (2) receives the hearing officer’s decision to uphold the sponsor’s proposed termination action.

Sponsors must complete the following steps in the CNIPS to ensure that the provider is immediately identified as terminated and disqualified, which prevents the provider from joining  another sponsor during any lapse of time before the sponsor notifies the California Department of Education (CDE) of the termination:

1. Access the CNIPS
   1. Select Applications
   2. Select Application Packet—DCH Sponsor
   3. Select Provider Application(s)

2. Select Provider
   1. Select Details
   2. Drop Provider
      1. In the empty box, enter cancellation date (this date is either the day after the appeal deadline or in the case of an appeal, the date the hearing officer issues the decision)
      2. Enter cancellation code (select Provider Terminated)
      3. Enter cancellation reason (SD)
   3. Select Save

Removal from the National Disqualified List

In accordance with 7 CFR Section 226.6(c)(7)(v), once the provider is included on the National Disqualified List (NDL), the provider (responsible individual) remains on the list until such time as the USDA’s Food and Nutrition Service, in consultation with the state agency, determines that the SD that led to their placement on the list has been corrected, or until seven years have lapsed since they were disqualified from participation. However, if the provider has failed to repay debts owed under the program, they will remain on the list until they have paid their debts. The following process is used to remove a provider from the NDL prior to seven years:

• The disqualified provider must submit a written request to be removed from the NDL to the sponsor that terminated and disqualified the provider. The request must include a CAP, detailing how and by when the provider will ensure compliance with federal regulations and program guidance.

Note: If the sponsor does not accept the provider’s written request, the sponsor must respond to the provider in writing detailing why they denied the request.

• If the sponsor agrees that the submitted documentation permanently corrects the SD, the sponsor must forward a written request to the CDE asking the provider be removed from the NDL. The request must include a copy of the provider’s written request and CAP.

• If the CDE does not accept the sponsor’s written request, the CDE will notify the sponsor in writing detailing why the request is denied.

• If the CDE agrees with the sponsor’s request to remove the provider from the NDL, the CDE will forward a written request to the USDA’s Western Regional Office (WRO) asking that the provider be removed from the NDL. The CDE’s request must include the sponsor’s written request, and the provider’s written request and CAP.

• If the WRO does not accept the CDE’s request, the WRO will notify the CDE in writing detailing why the request is denied.

• If the WRO agrees with the CDE’s request to remove the provider from the NDL, the WRO will forward a request to the USDA’s headquarters’ (HQ) office. The request will include the CDE’s written request, the sponsor’s written request, and the provider’s written request and CAP.

• If the HQ office does not accept the WRO’s request, the HQ office will notify the WRO in writing detailing why the request is denied. The WRO will notify the CDE in writing, and the CDE will notify the sponsor in writing.

• If the HQ office agrees with the WRO’s request to remove the provider from the NDL, the provider will be removed from the NDL and HQ office will notify the WRO in writing. The WRO will notify the CDE in writing, the CDE will notify the sponsor in writing, and the sponsor will notify the provider in writing.

• Once the provider has been removed from the NDL, the provider may apply for participation in the CACFP.

Please share this information with your agency’s management, monitors, hearing officials, and other business personnel, as appropriate.

If you have any questions regarding the MB, please contact Michele Vasquez, Program Integrity Unit, by phone at 916-445-7368 or by e-mail at mvasquez@cde.ca.gov.

Related Content

• Serious Deficiency Process for Day Care Homes - USDA-CACFP-06-2010: Management bulletin regarding the serious deficiency process for day care home providers.