WPCS Wͬ{DnV~Ta|P|گj/0N_R !bhstP-Z>F %$LWSXF"W$9[6aОn3(dYێGƷGQa*E5&LjYȊ~n;@LԸͼJ>vҗv5!\]n׌H:F".9\z2U>jsT'! K\ESR03l>۹FnajMt7_ X34 _&mLtV^k 8QFP2Zm)mS*O9Ґ6G94ے~D5aZ̠].쓇A7owK(8>"Lz0N`rʗ* wATNk72"{?'a]RIStFݘޏ( og$C5KG [:NxU> 0 0 0 0 0 0 0 0 0 0 0v 0a 0L 07 0" 0  0 0 0 0 0 0 0v 0`! 0J" 04# 0$ 0% 0& 0& 0' 0P( 0) 0V) 0.<* Bj+ B+ B+ B+ D3+ D+, 0<, 0<8- 0Yt- 0f- 023. 0*e. 0_/ 0/ 00 0^1 0:2 062 0}3 03 06g4 0J4 0J4 0:15 0k5 05U*7 07U29 0e9 0g&: 0g: 0e: 0gY; 0g; 0g'< 0g< 0I< 0,>= 0nj= 0~=U.V? 0<? 0? 0~@ 0B 0B 0D 0D 0OE 0tE 0OFU,?H CkHrH 0I BJ DCJ K 0L BM D/M8M 1eN 7~N8NN 0NN 0"O#OUNR %RMR(RNS^ S 1uS 72SwS4SS mS\  `&Times New Roman' OMB CIRCULAR A-133 EOP0Edwards_JX.UNITED STATES DEPARTMENT OF AGRICULTURE   2P+P 0_level1  , 8.` hp x (#823  ..  8.` hp x (#8  2P+P 0_level2  X 8.` hp x (#823  ..  8.` hp x (#8  2P+P 0_level3   8.4` hp x (#823  ..  8.` hp x (#8  2P+P 0_level4   8.` ` hp x (#823  ..  8.` hp x (#8  2P+P 0_level5   8. ` hp x (#823  ..  8.` hp x (#8  2P+P 0_level6   8. ` hp x (#823  ..  8.` hp x (#8  2P+P 0_level7  4 8. ` hp x (#823  ..  8.` hp x (#8  2P+P 0_level8  ` 8.` hp x (#823  ..  8.` hp x (#8  2P+P 0_level9   8.<` hp x (#823  ..  8.` hp x (#8  2PP 0_levsl1  , 8.` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl2  X 8.` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl3   8.4` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl4   8.` ` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl5   8. ` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl6   8. ` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl7  4 8. ` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl8  ` 8.` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levsl9   8.<` hp x (#823  Ԁ  8.` hp x (#8  2PP 0_levnl1  , 8.` hp x (#823   8.` hp x (#8  2PP 0_levnl2  X 8.` hp x (#823   8.` hp x (#8  2PP 0_levnl3   8.4` hp x (#823   8.` hp x (#8  2PP 0_levnl4   8.` ` hp x (#823   8.` hp x (#8  2PP 0_levnl5   8. ` hp x (#823   8.` hp x (#8  2PP 0_levnl6   8. ` hp x (#823   8.` hp x (#8  2PP 0_levnl7  4 8. ` hp x (#823   8.` hp x (#8  2PP 0_levnl8  ` 8.` hp x (#823   8.` hp x (#8  2PP 0_levnl9   8.<` hp x (#823   8.` hp x (#8  6V v4Heading 1  X XXX ` 2(#   A7X` hp x (#A X XXX6: T4Heading 2   2(#   8.` hp x (#8  6X K4Heading 3  o4          XXX6Q V4Heading 4    &p x (#&     8.` hp x (#8 6 4Heading 5   6T G4Heading 6 X 8.` hp x (#8    8.` hp x (#86 4Heading 7   6| o4Heading 8 7*(X75+ ` hp x 5   7+(X7 5+ ` hp x 5  d  d  d  d&'()'dxd'dxd6N k4Heading 9  2(` ` hp x (#2    \RX` hp x (#\ <:Default Para64Hyperlink    .,TEST2 XXX ,*CS-2 2r+[ 0Level 1       X 8.` hp x (#823  ..   8.` hp x (#8  4+ 2Bullet 123  ..<)P :Body Text I3 X  N 2(#  8.` hp x (#8 X </P :Body Text I2    N : (#  8.` hp x (#8  <PP :Body Text I1   8. ` hp x (#8  8.` hp x (#8  0"L .Header    (#  A7X` hp x (#A6 4Body Text< +  :List Bullet3  23  ..  <PP :List Bullet2   8.h` hp x (#8  8.` hp x (#8  0.Strong . ,Title     4  2Quick A.    :8Page Number0A .Footer  (#A7X` hp x (#A< :Body Text In  ?@%2A`Arial? X 8.` hp x (#8   \RX` hp x (#\S\  `&Times New RomanS%2A`Arial< :Outline001_1   GBKr`WingdingsG  ;1 4 <D x (#;   YOX` hp x (#YXXXS\  `&Times New RomanS  Kr`Wingdings:+ 8List Bullet23  ..<+ :List Bullet123  ..<+ :List Bullet 23  ..:+ 8List Number23  ..<+ :List Number323  ..<+ :List Number223  ..<+ :List Number123  ..<+ :List Number 23  ..:  8Body Text 2  ,*Date< :Comment TextXXX2 0Quick    CO<6X9`(CourierC  8. ` hp x (#8   8.` hp x (#8S\  `&Times New RomanS  <6X9`(Courier<:Footnote Ref.PY ,Style   8.44` hp x (#8  A7X` hp x (#A  2 0Quick P   CO<6X9`(CourierC  8.` ` hp x (#8   8.` hp x (#8S\  `&Times New RomanS  .[[,TOC 2    8.` ` hp x (#8   8.` hp x (#8  0oo.Title2S\  `&Times New RomanS XXXS\  `&Times New RomanS <$$ :Footnote Tex    XXX<DD :Normal Inden X 8.` hp x (#8  8.` hp x (#8:)) 8Body Text 3 {dXXX {d< :Body Text Fi d  d  < :Document MapAZ $TahomaAC+[4$X ddCAZ $TahomaA  7+(X7XXXS\  `&Times New RomanS  $Tahomadd h ]'..      lXXXlXXXXlX  K_(XXK (#X̻XXMay2005QZZ)WIC!!G(#USDAXX̻(2$ jd!..      lXXXlXXXXlX   d^=Thin Bottomdxd  a)..      lXXXlXXXXlX  Kc(XXK0p x (#X0̻XXA133ComplianceSupplement6p x (#X(#6Q%410.557  1  XX̻(2$ jd!..      lXXXlXXXXlX   db)1dxdhttp://www.fns.usda.gov/wic 35;AGMSY_1a.a.i.1.a.i.1.a.e i.http://www.fns.usda.gov/wic#|x(O$(rd$..      lXXXlXXXXlX\\ps-1\7203A0(9 Z6Times New Roman RegularlX 2, 3#37=CIQYag1.a.i.(1)(a)(i)1)a)ri)0:i+00U jd!..      lXXXlXXXXlX  _       \`XXXX  UNITEDSTATESDEPARTMENTOFAGRICULTURE   $   ?+ hp x (#X?CFDA10.557 SPECIALSUPPLEMENTALNUTRITIONPROGRAMFORWOMEN, ^ INFANTS,ANDCHILDREN(WIC) D  $ K.` hp x (#  X(#KI.  PROGRAMOBJECTIVES  B TheobjectiveoftheSpecialSupplementalNutritionProgramforWomen,InfantsandChildren   (WIC)istoprovidesupplementalnutritiousfoods,nutritioneducation,andreferralstohealth   careforlowincomepersonsduringcriticalperiodsofgrowthanddevelopment.Suchpersons l  includepregnantwomen,breastfeedingwomenuptooneyearpostpartum,nonbreastfeeding R  womenuptosixmonthspostpartum,infants(personsunderoneyearofage),andchildrenunder 8  agefivedeterminedtobeatnutritionalrisk.Interventionduringtheprenatalperiodimproves n  fetaldevelopmentandreducestheincidenceoflowbirthweight,shortgestation,andanemia. T   II.  PROGRAMPROCEDURES     Administration  `  TheU.S.DepartmentofAgriculture(USDA)FoodandNutritionService(FNS)administersthe ^  WICProgramthroughgrantsawardedtoStatehealthdepartmentsorcomparableStateagencies, D Indiantribalgovernments,bandsorintertribalcouncils,orgroupsrecognizedbytheBureauof * IndianAffairs,U.S.DepartmentoftheInterior,ortheIndianHealthService(IHS)oftheU.S.  DepartmentofHealthandHumanServices(HHS).AStateadministeringtheWICProgram  mustsignaFederal/StateAgreementthatcommitsittoobserveapplicablelawsandregulations  incarryingouttheprogram.TheStateagencies,inturn,awardsubgrantstolocalagenciesto r certifyapplicantseligibilityforWICProgrambenefitsanddeliversuchbenefitstoeligible X persons. >  ProgramFunding  < TheWICProgramisagrantprogramthatis100percentfederallyfunded(7CFRsections  246.16(a),(b),and(c)).NoStatematchingrequirementexists.FundsareawardedbyFNSon   thebasisoffundingformulasprescribedintheWICProgramregulations. f! FNSallocatesfederallyappropriatedfundstoWICStateagenciesasgrantswhicharedivided #d intotwoparts:acomponentforfoodcostsandacomponentforNutritionServicesand #J Administration(NSA)costs.ResourcesmadeavailabletoaStateagencyunderthesetwo $0  componentsofitsinitialFederalWICformulagrantmaybemodifiedbythecumulativeeffectof %! thefollowingrequirements: &! ReallocationsandRecoveries Z(# TheWICProgramsauthorizingstatuteandregulationsrequireFNStorecoverunspentfunds *X%   andreallocatethemtoStateagencies. *>&! &   ConversionAuthority   AStateagencythatsubmitsaplantoincreaseWICparticipationunderacostcontainment ^ strategy,asoutlinedunderthe CostContainmentRequirementssectionbelow,inexcessofthe D increasesprojectedbyFNSintheNSAfundsallocationformula,mayshiftaportionofitsfood *z grantcomponenttoitsNSAcomponent.This conversionauthorityisafunctionofthe  `  excessparticipationincreaseandisdeterminedbyFNS(SeeIII.A.2, ActivitiesAllowedor  F UnallowedExceptions).'  , SpendingOptions   FederallegislationandregulationsauthorizeaStateagencytoshiftaportionofitsFederalWIC 8  formulagrantbetweengrantperiods(Federalfiscalyears)(SeeIII.H, PeriodofAvailabilityof n  FederalFunds). T  Rebates   AStateagencymaycontractwithafoodmanufacturertoreceivearebateoneachunitofthe `  manufacturersproductpurchasedwithFoodInstruments(FIs)redeemedbyprogram F  participants.Suchrebatesarecreditsagainstpriorexpendituresmadeduringthemonthinwhich ,| therebatewasearnedforWICfoodcosts(SeeIII.B, AllowableCosts/CostPrinciples). b Vendor,Participant,andLocalAgencyCollections  AStateagencyisauthorizedtoretainFederalprogramfundsrecoveredthroughclaimsaction n againstvendors,participants,andlocalagencies,andtousesuchrecoveriesforprogram T purposes.(SeeIII.B, AllowableCosts/CostPrinciples). : ProgramIncome 8 CertainmiscellaneousreceiptsaStateagencycollectsastheresultofWICprogramoperations  areclassifiedasprogramincome(SeeIII.J, ProgramIncome). | StateFunding *!z AlthoughtheFederalFinancialParticipation(FFP)forWICis100percent,someStates "( voluntarilyappropriatefundsfromtheirownrevenuestoextendWICservicesbeyondthelevel # thatcouldbesupportedbyFederalfundingalone. $ & ` Certification  R&! ApplicantsforWICProgrambenefitsarescreenedatWICclinicsitestodeterminewhetherthey (P# meettheeligibilitycriteriainthefollowingcategories:categorical,residency,income,and (6$  nutritionalrisk(SeeIII.E.1, EligibilityEligibilityforIndividuals).'`R&i )% & ,  Benefits   TheWICProgramprovidesparticipantswithspecificnutritioussupplementalfoods,nutrition ^  education,andhealthservicesreferralsatnocost.Theauthorizedsupplementalfoodsare D prescribedfromstandardfoodpackagesaccordingtothecategoryandnutritionalneedofthe *z participant.ThesevenfoodpackagesavailablearedescribedindetailinWICProgram  ` regulations.',  F About75percentoftheWICProgramsannualappropriationisusedtoprovideWIC   participantswithmonthlyfoodpackagebenefits.Theremainderisusedtoprovideadditional   servicestoparticipantsandtomanagetheprogram.AdditionalservicesprovidedtoWIC p  participantsincludenutritioneducation,breastfeedingpromotionandsupportactivities,and V  clientservices,suchasdietandhealthassessments,referralservicesforotherhealthcareand <  socialservices,andcoordinationactivities. "r   FoodBenefitDelivery    Supplementalfoodsareprovidedtoparticipantsinanyoneofthefollowingthreeways(7CFR ~  section246.12(b)): d DirectDistributionFoodDeliverySystems(usedinMississippi,theSanFelipeIndianTribal b OrganizationinNewMexico,andinpartsofIllinois,Idaho,WestVirginia,andtheAcoma H CanoncitoLagunaHospitalBoardofNewMexico) . TheStateagencyand/oritsagentpurchasessupplementalfoodsinbulkandissuesthemto  participantsatdesignateddistributionfacilities. r HomeFoodDeliverySystems(usedinVermontandinpartsofAlaska,NorthDakota,Texas,and  p Utah) V Arrangementswithhomefooddeliverycontractorsprovideforthedeliveryofsupplemental  foodsdirectlytoparticipantshomes.  RetailFoodDeliverySystem(usedbymostStateagencies) H! NegotiableFIsareissueddirectlytoindividualparticipants,whoexchangethemforauthorized "F supplementalfoodsatretailstoresapprovedasvendorsbytheStateagency.Twotypesof #, systemsareusedtoredeemtheFIs:vouchersystemsandchecksystems.Inavouchersystem, $  thevendorsubmitstheFIsdirectlytotheStateagencyforpayment;inachecksystem,vendors %  depositFIstotheirbankaccountsandtheStatereimbursesthemthroughtheirbanks.Generally, &! aparticipantmustuseanFIwithin30daysofthefirstdateofuseprintedontheFI;andthe t'" vendormustsubmittheFIforpaymentwithin90daysofthatdate. Z(# EachFIissuedtoaparticipantmusthaveauniqueserialnumber.AStateagencyisrequiredto *X%  determinetheultimatedispositionofallFIsbyserialnumberwithin150daysofthefirstvalid *>&! dateforparticipantuse.TheStateagencymustadjustpreviouslyreportedobligationsforWIC +$'" foodcostsinordertoaccountforactualFIredemptionsandotherchangesinthestatusofFIs. , (# &  CostContainmentRequirements   Inanefforttousetheirfoodfundingmoreefficiently,allWICStateagenciesinthe50States, ^ theDistrictofColumbia,PuertoRico,Guam,theVirginIslands,AmericanSamoa,andmost D IndianTribalStateagencieshaveimplementedcostcontainmentmeasures.Reducingthe *z averagefoodcostperpersonenablesWICtoreachmoreparticipantswithagivenamountof  ` funds.Themostsuccessfulstrategyhasbeenthenegotiationofcompetitiverebatecontracts  F betweenStateagenciesandinfantformulacompanies.SuchcontractsprovidefortheState  , agencytoreceiverebatesoninfantformulausedintheprogram.Othercostcontainment   measuresusedbyStateagenciesincludecompetitivebiddingforjuice,infantcereal,andinfant   juice;selectionofretailvendorsbasedoncompetitiveprices;settingmaximumredemption    amountsforFIs;authorizingtheuseofstoreorgenericbrandsofsupplementalfoods;andusing t  ahomedeliveryordirectdistributionfooddeliverysystem.' ' Z   FederalOversightandComplianceMechanisms  X  FNSoverseesStateoperationsthroughanorganizationconsistingofheadquartersandseven   regionaloffices.Federalprogramoversightencompassesreviewoftheninefunctionalareasof  theprogram:OrganizationandManagement;FundingandParticipation;VendorManagement;  InformationSystems;Certification,Eligibility,andCoordination;NutritionServices;Civil h Rights;MonitoringandAudits;andFoodDelivery.EachyearFNSregionalofficesevaluateas N manyoftheseareasaspossiblewithinavailableresourceconstraints,focusingonthoseareas 4 theyconsidermostneedofreview. j AlthoughFNSusestechnicalassistanceextensivelytopromoteimprovementsinStateoperation  oftheWICProgram,enforcementmechanismsarealsopresent.Themisuseoffundsthrough  Stateorlocalagencynegligenceorfraudmayresultintheassessmentofaclaim(7CFRsection  246.23(a)).ClaimsmaybeestablishedforfundslostduetoFItheftorembezzlementsorfor z unreconciledFIs(7CFRsections246.23(a)(2)and(4)).FNShasothermechanismstorecover ` otherlossesandthecostofnegligence.Forotherformsofnoncompliance,FNShasthe F authoritytogivenoticeand,ifimprovementsdonotoccur,withholdadministrativefundsfor ,| failuretoimplementprogramrequirements(7CFRsection246.19(a)(2)).  b FNShasidentifiedthefollowingcircumstancesthatmayindicatenoncompliancewithWIC ! programrequirements:(1)redeemedFIswhichtheissuinglocalagencieshadreportedas " voidedorunclaimed;(2)alargenumberofconsecutivelynumbered,unreconciledFIsissuedby # thesamelocalagency;(3)redeemedFIsthatappeartohavebeenvalidlyissuedbutfailtomatch r$ issuancerecords;and,(4)participantsthattransactedalloftheirFIsonthesamedayasthey X%  wereissued. >&!! & z SourceofGoverningRequirements  '<#" TheWICProgramisauthorizedbysection17oftheChildNutritionActof1966(42USC )$#  1786).Programregulationsarefoundat7CFRpart246.'z'5 *%$ &   AvailabilityofOtherProgramInformation   Foradditionalinformation,contacttheapplicableFNSregionaloffice.Regionaloffice ^  telephoneanddatafaxnumbers,andtheStateseachregionalofficeservesmaybefoundon D FNSswebsite(4d iO  5  .  http://www.fns.usda.gov/wic.|8Mex  608iD8Mex  7Newr8). *z  III.  COMPLIANCEREQUIREMENTS'6  ( IndevelopingtheauditprocedurestotestcompliancewiththerequirementsforaFederal   program,theauditorshouldfirstlooktoPart2,MatrixofComplianceRequirements,to l  identifywhichofthe14typesofcompliancerequirementsdescribedinPart3are R  applicableandthenlooktoParts3and4forthedetailsoftherequirements.  8   A.  ActivitiesAllowedorUnallowed  6   X1. ` GeneralRule    X E. ` hp x (#X(#Ea. FundsallocatedtoaStateagencyforfoodmustbeexpendedtopurchase B  supplementalfoodsforparticipantsortoredeemFIsissuedforthat (x  purpose.Whensupplementalfoodsareprovidedtoparticipantsviadirect ^  distribution,therelatedwarehousefacilitiescostsshallbeallowablefood D costs.Foodfundscanalsobeusedtopurchasebreastpumpsfor * participants(7CFRsection246.14(a)and(b)).  b. FundsallocatedforNSAmustbeusedforthecostsincurredbytheState n orlocalagencytoprovideparticipantswithnutritioneducation,breast T feedingpromotionandsupport,andreferralstoothersocialandmedical : serviceproviders;andtoconductparticipantcertification,caseload  p management,foodbenefitdelivery,vendormanagement,voter V registration,andprogrammanagement(42USC1786(h)(1)(C)(ii); < 7CFRsections246.14(c)and(d)). "  X E.` hp x (# X(#E2. ` Exceptions    X E. ` hp x (#X(#Ea. Fundsallocatedforfoodcostsmaybeconverted(beappliedtoNSA ."~ costs):(1)asaresultofaStatesplantoexceedparticipationlevels #d projectedbytheFederalfundingformula;or(2)afterrecoveryasvendor #J orparticipantcollections.Conversionduetoplannedparticipation $0  increasesisallowedonlyifsuchincreasesareexpectedtoresultfroman %! approvedcostcontainmentplan(7CFRsections246.14(e)and246.16(f)). &! b. FundsallocatedforNSAcostsbutnotneededforsuchcostsmaybe Z(#  appliedtofoodcosts(7CFRsection246.14(a)(2)). @)$   E.` ` hp x (# X(#E&   3. ` DistinguishingWICfromNonWICServices   UndernocircumstancesmaytheWICNSAgrantcomponentbechargedforcosts ^ thataredemonstrablyoutsidethescopeoftheWICProgram.WICservicesmay D  include:(a)somescreening(excludinglaboratorytests);(b)referralsforother *z medical/socialservices,suchasimmunizations,prenatal(beforebirth)care,  ` perinatalcare(nearthetimeofbirthfromthe28thweekofpregnancythrough28  F daysfollowingbirth),andwellchildcareand/orfamilyplanning;and(c)follow  , uponparticipantsreferredforsuchservices.However,thecostoftheservices   performedbyotherhealthcareorsocialserviceproviderstowhichtheparticipant   hasbeenreferredshallnotbechargedtotheWICgrant.Forexample,thecostto    screen,refer,andfollowuponimmunizationsforWICparticipantsmaybe t  chargedtotheWICgrant,but,thecosttoadministertheshot,ortopurchasethe Z  vaccineorvaccinerelatedequipment,maynotbechargedtotheWICgrant. @  Ahematologicaltestforanemia,suchasahemoglobin,hematocrit,orfree >  erythrocyteprotoporphyrintest,istheonlylaboratorytestrequiredtodeterminea $ personseligibilityforWIC(7CFRsection246.7(e)(1)).Accordingly,thecost   ofhematologicaltestsforanemiaistheonlylaboratorycostthatmaybecharged  toaWICgrant.'D   E.` hp x (#` X(#E B.  AllowableCosts/CostPrinciples  4   E.` ` hp x (#X(#E1. ` ApplicableCredits 2  Thefollowingitemsarecreditsagainstcurrentvendorbillingsorprior  expenditures: v   E. ` hp x (#` X(#Ea. Rebates󀄀Rebatesarecreditsagainstpriorexpendituresforfoodcosts, $t madeduringthemonthinwhichtherebatewasearned.  Z b. VendorCollections󀄀Postpaymentvendorcollectionsarefundscollected  throughclaimsassessedagainstfoodvendorsforerrorsandovercharges.   Prepaymentvendorcollectionsareimproperpaymentspreventedasa ! resultofreviewsofFIspriortopayment;theyarecreditsagainstvendor j" billings. P# c. ParticipantCollections󀄀Thesearerecoveriesofimproperlyissuedfood $N  benefitsastheresultofaparticipant,guardianorcaretakerintentionally %4! makingafalseormisleadingstatementorwithholdinginformation. &" d. LocalAgencyCollections!Thesearefundscollectedasaresultofclaims x(#  assessedagainstlocalagenciesforprogramfundsthatweremisusedor ^)$! otherwisedivertedfromprogrampurposesduetolocalagencynegligence D*%" orfraud. *+z&#   E.` ` hp x (# X(#EAStateagencymustrecognize,use,andaccountfortheseitemsinaccordance ,(($ withprogramregulations.Atitsdiscretion,theStateagencymaycreditvendor, -)% participant,andlocalagencycollectionsagainstexpendituresforfoodand/or  NSAcosts.TheStateagencymayapplyvendor,participant,andlocalagency  collectionstofoodand/orNSAexpendituresof:(1)thefiscalyearinwhichthe | initialobligationwasmade;(2)thefiscalyearinwhichtheclaimarose;(3)the b fiscalyearinwhichthecollectionisreceived;or(4)thefiscalyearfollowingthe H fiscalyearinwhichthecollectionisreceived(42USC1786(f)(21);7CFR . ~ section246.14(e)).  d  &  2. ` CapitalExpenditures    E. ` hp x (#` X(#Ea. FNShasauthorizedWICStateandlocalagenciestochargethefull p  acquisitioncostofnoncomputerequipmentcostinglessthan$25,000per V  unitwithoutobtainingpriorFNSapproval,andtoallowlocalagencies <  undertheiroversighttodolikewise.FNSregionalofficesretainthe "r  discretiontoapplyalowerdollarthresholdtoanindividualStateagency X  andtothelocalagenciesunderitsoversight,providedcertain >  requirementsapplyandtheStateagencyreceiveswrittennotice. $   E.` hp x (# X(#Eb. AutomatedDataProcessingProjects'  V    ` E.` hp x (#X(#E(1)  FNSauthorizesWICStateagenciestomakeautomateddata 0 processing(ADP)acquisitionswithatotalprojectcostofupto f $24,999withoutpriorFNSapproval.Instead,WICStateagencies L mustnotifytheFNSRegionalOfficeinwritingofsuchpurchases 2 within60daysoftheexpenditureorcontractexecution.ADP  acquisitionswithatotalprojectcostof$25,000to$499,999  requireawrittenrequestforpriorapprovalfromtheFNSRegional  Office,includinganexplanationofthepurchase(s),descriptionof z needs,andotherinformationappropriatetotheproposed ` acquisition(costallocation,procurementdocuments,etc,as F appropriate). ,| (2)  WICStateagenciesarerequiredtosubmitanAdvancePlanning  * Document(APD)torequestpriorapprovalofautomation ! acquisitionswithatotalprojectcostof$500,000ormore.Prior " approvalfromFNSisrequiredforsuchcoststobeallowable # chargestotheWICgrant. r$  ` E. ` hp x (#X(#Ec. OtherCapitalAssetsPurchasesofothercapitalassets,suchasbuildings,  &p!  landandimprovementstobuildingsorlandthatmateriallyincreasetheir 'V"! valueorusefullife,costingmorethan$5000continuetorequireprior '<#"  approvalfromFNS(7CFRsection3016.22). ("$#   E.` hp x (# X(#E&   C.  CashManagement    XE.` hp x (#X(#ETheWICprogramissubjecttotheprovisionsoftheCashManagementImprovementAct ^ (CMIA).However,rebatesheldinStateaccountsareexemptfromtheinterest D provisionsoftheCMIA(42USC1786(h)(8)(J);7CFRsection246.15(a)). *z  XE.` hp x (#X(#E E.  Eligibility   (  XE.` hp x (#X(#E 1. ` EligibilityforIndividuals    XE.` ` hp x (#X(#E ApplicantsforWICProgrambenefitsarescreenedatWICclinicsitesto 4  determinetheirWICeligibility.Exceptinlimitedcircumstances,WICapplicants j  mustbephysicallypresentforsuchscreeningsandmustprovideproofofidentity. P  Tobecertifiedeligible,WICapplicantsmustmeetthefollowingeligibility 6  criteria(7CFRsections246.7(c),(d),(e),(g),and(l)):' b     E. ` hp x (#` X(#Ea. Categorical󀄀Eligibilityisrestrictedtopregnant,postpartum,andbreast z  feedingwomen,infants,andchildrenuptotheirfifthbirthday(7CFR `  sections246.2(definitionofeachcategory)and246.7(c)). F   e (03r/ /""  ,E.` hp x (# X(#E   ,B+ hp x (#X(#Bji2  b  .3     Residency󀄀AnapplicantmustmeettheStateagencysresidency D requirement.ExceptinthecaseofIndianStateagencies,theapplicant * mustresideinthejurisdictionoftheState.IndianStateagenciesmay  requireapplicantstoresidewithintheirjurisdiction.AllStateagencies  maydesignateserviceareasforanylocalagency,andmayrequirethat  applicantsresidewithintheservicearea.AStateagencymustestablish r procedures,inaccordancewithguidancefromFNS,topreventthesame X individualfromreceivingduplicatebenefitsthroughparticipationatmore > thanonelocalagency.Exceptunderlimitedcircumstances,WIC $t applicantsmustpresentproofofresidencyatcertification(42USC  Z 1786(f)(23);7CFRsections246.7(c)(1))and246.7(l)(2)).jiVj݌ @ Ќ -  X(#  ,hX(#-   E. ` hp x (# X(#Ec. Income󀄀Anapplicantmustmeetanincomestandardestablishedbythe   Stateagencyorbedeterminedtobeautomatically(adjunctively)income ! eligiblebasedondocumentationofhis/hereligibility,orcertainfamily j" memberseligibility,forthefollowingFederalprograms:(1)Temporary P# AssistanceforNeedyFamilies(formerlyAidToFamiliesWith 6$ DependentChildren);(2)Medicaid;or(3)FoodStamps.Stateagencies %l  mayalsodetermineanindividualautomaticallyincomeeligible,basedon &R! documentationofhis/hereligibilityforcertainStateadministered &8"  programs.Withlimitedexceptions,applicantswhoarenotadjunctivelyor '#! automaticallyincomeeligibleforWICmustprovidedocumentationof ($" familyincomeattheirinitialorsubsequentcertification(42USC )$# 1786(d)(3)(D);7CFRsections246.2(definitionof family),246.7(c), *%$ and246.7(d)). f+&%  IncomeGuidelines󀄀TheincomestandardestablishedbytheStateagency -d(& maybeupto185percentofthepovertyincomeguidelinesissued -J)' annuallybyHHSorStateorlocalincomeguidelinesusedforfreeand  reducedpricehealthcare.However,inusinghealthcareguidelines,the  incomeguidelinesforWICmustbebetween100and185percentofthe | povertyincomeguidelines.Localagencyincomeguidelinesmayvaryas b longastheyarebasedontheguidelinesusedforfreeandreducedprice H healthcare(7CFRsection246.7(d)(1)).TheWICincomeeligibility . ~ guidelinesareissuedeachyearintheFederalRegisterandareavailable  d onFNSsWICwebsite(4g iO  5  .  http://www.fns.usda.gov/wic.twh  6(wi    ` E.h` hp x (#X(#E(a) h Line5aFederalOutlaysColumn(07)LocalLevel  NutritionEducation󀄀representstotaloutlaysand  unliquidatedobligationsmadeforlocallevelnutrition h educationcostssupportedbyFederalgrantfundsand N programincome.' VZ 4 (b) h Line5aFederalOutlaysColumn(08)LocalLevel 2 BreastfeedingPromotionandSupportrepresentstotal  outlaysandunliquidatedobligationsmadeforlocallevel  breastfeedingpromotionandsupportcostssupportedby  Federalgrantfundsandprogramincome. z (c) h Line5bStateOutlays󀄀Column(07)LocalLevel (x NutritionEducationrepresentstotaloutlaysand ^ unliquidatedobligationsmadeforlocallevelnutrition D educationcostssupportedbyStateappropriatedfundsplus  * thedollarvalueofanyinkindcontributionsreceivedfrom ! anyFederal,Stateorlocalfundingsource. " (d) h Line5bStateOutlays󀄀Column(08)LocalLevelBreast T$ feedingPromotionandSupportrepresentstotaloutlays :%  andunliquidatedobligationsmadeforlocallevelbreast  &p!  feedingpromotionandsupportcostssupportedbyState 'V"! appropriatedfundsplusthedollarvalueofanyinkind '<#" contributionsreceivedfromanyFederal,Stateorlocal ("$# fundingsource. )%$    E. ` hp x (#hX(#E(Referto7CFRsection246.14(c)) f+&%  & F  g. SubrecipientReporting󀄀AStateagencymayrequirelocalagenciesunder  itsoversighttoreportfinancialinformationtheStateagencyneedsto   preparereportsidentifiedabove.Thesereportsshouldbetestedduring | auditsofsubrecipients. b  X E.` hp x (# X(#E 2. ` PerformanceReporting 󀄀NotApplicable'F  `  X E.` ` hp x (#X(#E 3. ` SpecialReporting 󀄀NotApplicable    XE.` hp x (#` X(#E&  M.  SubrecipientMonitoring l    Stateagenciesmustestablishanongoingmanagementevaluationsystemwhichincludes j  atleastthemonitoringoflocalagencyoperations,thereviewoflocalagencyfinancial P  andparticipationreports,thedevelopmentofcorrectiveactionplans,themonitoringof 6  theimplementationofcorrectiveactionplans,andonsitereviews.Theonsitereviews   oflocalagenciesshallincludeevaluationofmanagement,certification,nutrition   education,civilrightscompliance,accountability,financialmanagementsystems,and   fooddeliverysystems.Thesereviewsmustbeconductedoneachlocalagencyatleast ~  onceeverytwoyears,includingonsitereviewsofaminimumof20percentofthe d clinicsineachlocalagencyoroneclinic,whicheverisgreater(7CFRsection246.19(b)).' l  J  XE.` hp x (#X(#E&  N.  SpecialTestsandProvisions  H  X 1. ` FoodInstrumentDisposition    X XE.` hp x (#X(#E ComplianceRequirement 󀄀AStateagencymustaccountforthedispositionofallFIs T within150daysoftheFIsfirstvaliddateforparticipantuse.TheStateagencymust : identifyallFIsaseitherissuedorvoided;andidentifyissuedFIsaseitherredeemedor  p unredeemed.RedeemedFIsmustbeidentifiedasoneofthefollowing:(1)validly V issued,(2)lostorstolen,(3)expired,(4)duplicate,or(5)notmatchingvalidenrollment < andissuancerecords.Stateagenciesgenerallydothisbyanalyzingcomputerreportsthat " providedetailedissuanceandredemptioninformationoneachFI(7CFRsection  246.12(q)).    AuditObjective 󀄀DeterminewhethertheStateagencysFIdispositionprocesscomplies L" withtheforegoingrequirement.'  2#  X XE.` hp x (#X(#E& ( SuggestedAuditProcedures  $0   X E.` ` hp x (#X(#Ea. ` ObtainanunderstandingoftheStateagencysprocessfortrackingFIs.Ata &! minimum,thisincludesascertaininghowtheStateagency: t'"  E. ` hp x (#` X(#E(1) IdentifiestheultimatedispositionofeveryFI;and'($ ")r$ (2) FollowsuponredeemedFIsthatcannotbematchedwithvalidissuances * &  (Stateagenciesdothisbycontactingtheissuinglocalagenciesandby +'! othermeans). ,'"  E.` ` hp x (# X(#Eb. ` AscertainwhethertheStateagencyprovideswrittenguidancetolocalagencieson  howtofollowuponissuedFIs(redeemedandunredeemed).   X E.` hp x (#` X(#Ec. ` InspectdispositionreportstoascertainthattheStateagency: D  X E. ` hp x (#X(#E(1) ReconcileditsrecordstoissuedFIsonaonetoonebasiswithinthe150 B daytimeframesetbyregulation;  ( (2) FolloweduponredeemedFIsthatwerenotvalidlyissuedandvalidly   used,inordertodeterminetheirultimatedisposition; l  (3) Obtainedexplanationsforidentifieddiscrepancies;and j  (4) Adjusteditsaccountingrecordsandexternalreportsinordertoreflectthe   resultsofthedispositionprocess.    E.` ` hp x (# X(#Ed. ` UsingStateagencydispositionreportsforoneormoremonthsoftheauditperiod, \  verifytheStateagencysnonreconciliationrateforredeemedFIs.TheState B  agencyshouldusethefollowingstepsinperformingthenonreconciliationrate (x  calculation: ^    E.` hp x (#` X(#E(1) DeterminetotalFIsredeemed     E. ` hp x (#X(#E(2) DeterminetotalredeemedFIsinitiallyidentifiedasunreconciled(listedas j redeemedwithnorecordofissuanceonexceptionreport) P (3) DeterminetotalredeemedFIsfinallyidentifiedasunreconciled(after N followupwithlocalagencies/clinics) 4 (4) Calculatetheunreconciledrate(#3dividedby#1)  (5) CalculatetotalvalueofFIsredeemed @   E.` hp x (# X(#E(6) CalculatetotalvalueofFIsfinallyidentifiedasunreconciled  >   E.` ` hp x (#X(#E& X  2. ` ReviewofFoodInstrumentstoEnforcePriceLimitationsandDetectErrors    XE.` hp x (#` X(#EComplianceRequirement !AStateagencyoperatingaretailfooddeliverysystemmust ^ takethefollowingactionstoensurethatpaymentsofWICfoodfundstovendors D conformtoprogramregulationsandtheStateagencysvendoragreement: *z   XE. ` hp x (#X(#Ea. FIReviewProcess󀄀TheStateagencymusthaveinplaceaprocessfor  ( reviewingall,orarepresentativesampleof,FIssubmittedbyvendorsfor   redemption.Thereviewisdoneonanaggregatebasisratherthanona   vendorbasis.BecauseofthewidedisparityinthenumberofFIs   processedbyStateagencies,therearenocriteriafordeterminingwhat p  constitutesarepresentativesample,otherthanthatitmustbea V  representativesampleofFIssubmitted.Ataminimum,thisprocessmust <   beabletodetect:'X L "r   ` E.` hp x (# X(#E(1)  Redeemedmonetaryamountsthatexceedthemaximummonetary   purchaseamountsestablishedbytheStateagencyforeachtypeof   FI.  (2)  Othererrors,includingpurchasepricemissing;participant, J parent/caretaker,orproxysignaturemissing;vendoridentification 0 missing;FIstransactedorredeemedafterthespecifiedtime f period;andalteredpurchaseprice. L (3)  QuestionableFIswhich,whiletheymaynotclearlycontainerrors,  neverthelessrequirefollowuptodetermineifanerrorhas  occurred. v  ` E. ` hp x (#X(#Eb. FollowuponErroneousorQuestionableFIs󀄀TheStateagencymust $t followuponFIscontainingerrorsandotherquestionableFIsdetected  Z throughthisprocesswithin120daysfollowingdetection.Regulationsat @ 7CFRsections246.12(k)(2)through(k)(5)describeappropriatefollow & upactions(7CFRsection246.12(k)).     XE.` hp x (# X(#E AuditObjective! TodeterminewhethertheStateagencyssystemforreviewingFIs j" detectsandfollowsuponerroneousorquestionableFIs. P#  X XE.` hp x (#X(#E SuggestedAuditProcedures  $N   X E.` ` hp x (#X(#Ea. ` ObtainanunderstandingoftheStateagencysprocessfordetectingerroneousor &! questionableFIs. '" b. ` ReviewtheStateagencysreportsorotherdocumentationofthereviewprocess, @)$  showingtheresultsforindividualFIsduringtheauditperiod.Selectasampleof &*v%! FIsredeemedthatarecoveredbythisdocumentationandanalyzeittoidentify  +\&" anyFIscontainingerrors.IftheStateagencydoesnotreviewallFIs,thendraw +B'# thesamplefromonlythoseFIstheStateagencydidreview.ComparetheFIs ,(($ containingerrorspertheStateagencysdocumentationagainsttheresultsof -)% analyzingthesampleinordertodeterminewhethertheStateagencysreview  processdetectedallerroneousorquestionableFIs.  c. ` DeterminethattheStateagencyfolloweduponallFIsforwhichitsreview D processdetectederrorsorquestionableitemswithintherequired120day *z timeframe. 3.  ComplianceInvestigationsofHighRiskVendors   `   XE.` hp x (#` X(#E ComplianceRequirement 󀄀AStateagencyoperatingaretailfooddeliverysystemmust   conductcomplianceinvestigations,whichconsistofinventoryauditsand/orcompliance   buys,onaminimumof5percentofthevendorsauthorizedasofOctober1ofeachyear.   AStateagencymustconductcomplianceinvestigationsonitshighriskvendorsuptothe p  5percentminimum.Highriskvendorsareidentifiedatleastonceannuallyusingcriteria V  developedbyFNS,and/orotherstatisticallybasedcriteriadevelopedbytheStateagency <  andapprovedbyFNS.Ifthenumberofhighriskvendorsexceeds5percentofthetotal, "r  thentheStateagencymustprioritizevendorsforinvestigativepurposesbasedontheir X  potentialfornoncomplianceand/orloss.Ifthenumberofhighriskvendorsfallsshortof >  5percentofthetotal,theStateagencymustrandomlyselectenoughadditionalvendors $ tomeetthe5percentrequirement.Whenacomplianceinvestigationdisclosesvendor   violations,theStateagencymusttakeappropriateactionagainstthevendor.Suchaction  includesdelayingpaymentorestablishingaclaimifaviolationaffectspaymenttothe  vendor;imposingsanctionsmandatedbyprogramregulationsforcertainstated l violations;andimposingother,lessseveresanctionsprescribedbytheStateagencys R sanctionscheduleforlesserviolations(7CFRsections246.2(definitionsof compliance 8 buy, highriskvendorand inventoryaudit),246.12(j)(4)(i)through(iii),5XX  n XX5 246.12(k)(2)through(4),and246.12(l)(1)and(2)). T  AuditObjective !DeterminewhethertheStateagencymaderequiredcompliance  investigationsandtookappropriateactionsagainstvendors.   SuggestedAuditProcedures F   XE.` ` hp x (#X(#E a. ` InspecttheStateagencysvendorfilesordatabasetoidentifythevendors D designatedashighrisk,andtodeterminethetotalnumberofvendorsforwhich  * complianceinvestigationswererequiredduringtheauditperiod. ! b. ` InspectrecordstodeterminewhethertheStateagencymadetherequired n# complianceinvestigationsandestablishedclaimsagainstvendorsortookother T$ appropriateactionbasedonthefindings. :%     E.` hp x (#` X(#E