Policy Memo 111
DOH-CACFP: Number 111 (06/06)
TO: Sponsoring Organizations of Day Care Homes
FROM: Jeanne Culver, State Director, Child and Adult Care Food Program
SUBJECT: Questions and Answers about the Serious Deficiency Process
I. Purpose and Scope
The purpose of this memorandum is to offer guidance on the serious deficiency process for day care home providers. The questions came from a variety of sources, including sponsors, NYS CACFP and other State Agencies. The answers are from a USDA, Food and Nutrition Service, guidance memo that was recently received by CACFP, with some interpretation from the State. The questions and answers are arranged by steps in the seriously deficient process.
II. Determination of Serious Deficiencies and Notice of Serious Deficiencies to Day Care Homes
- If a day care home has its license or registration revoked, suspended or denied, must the sponsor declare the provider seriously deficient?
Answer: Not necessarily. When a day care home loses its day care license or registration, the provider simply becomes ineligible to participate in CACFP, and is not necessarily seriously deficient. However, if the provider loses his/her license for an imminent threat to the health and safety of the children, the sponsor should name the provider seriously deficient and suspend the home's participation. Providers who lose their license in this way may end up operating as a provider in another state, in which case we would not want that provider to be able to participate in CACFP.
- During a monitoring visit, the monitor identifies a problem that is not a serious deficiency, but requires the provider to take corrective action. Can the provider self-terminate at this point, without action by the sponsor?
Answer: Yes, the provider can terminate his/her agreement with the sponsor "for convenience" at any time, as long as a serious deficiency notice has not been issued.
- If a day care home provider refuses to accept the certified letter with the serious deficiency notice, what should the sponsor do next?
Answer: It would be appropriate to attempt another delivery either by regular mail or an in-person delivery. A refused letter can be counted as received if it is returned and marked, "refused". If the return receipt (green card) is not returned, sponsors may consider the letter received after five days from the date the letter was sent. Please note that some sponsors have begun to send the notices by both regular and certified mail.
- Is there a maximum amount of time (e.g. 30 or 60 days) that can elapse between the discovery of the serious deficiency and the issuance of the notice by the sponsor?
Answer: Yes. A notice of serious deficiency should be issued within a few days of identifying the problem, but not more than 30 days. Extensive delays in issuing a notice of serious deficiency circumvent the intent of the Agricultural Risk Protection Act of 2000 (ARPA) to shorten the time between identification and resolution of a serious deficiency. A delay may weaken the sponsor's position in an appeal if the sponsor later proposes to terminate the provider.
- Does the sponsor have to declare a provider seriously deficient when CACFP staff or a NYS Department of Health Investigator identify the serious deficiency?
Answer: Yes. The sponsor has a legal agreement with the provider and is the entity that must issue the serious deficiency notice and proceed through the process. CACFP may initiate the serious deficiency process with the sponsor as the result of a finding from an on-site review, from a confirmed complaint, or following an investigation.
III. Corrective Action by Day Care Home Providers
- Is there a time limit between the expiration of the time allowed for corrective action and the issuance of the notice of proposed termination?
Answer: No, there is no set time limit. However, if the provider has failed to respond to the notice of serious deficient and does not submit corrective actions within the time frame set by the sponsor (but not more than 30 days), the sponsor must issue the notice of proposed termination and right to appeal as soon as the deadline for corrective action has passed.
- What is "permanent" corrective action?
Answer: If the same serious deficiency is discovered again, the corrective action by the provider was not permanent. The sponsor may immediately move to issue a notice of proposed termination, without going back through the entire process, because the provider has already had one opportunity to resolve the serious deficiency. However, depending on the circumstances, the sponsor may choose to start the serious deficiency process over. This may occur when a long period of time has elapsed from the initial serious deficiency to the repeated problem.
- When should the finding of serious deficiency be withdrawn or rescinded?
Answer: The finding of serious deficiency is withdrawn only when the corrective action plan is fully implemented and is determined to be permanent and complete. A statement by the provider that the problem will be corrected does not constitute permanent and complete correction.
IV. Appeals for Proposed Termination and Suspension
- What if a provider does not want an in-person hearing? Can the sponsor offer the provider a choice of a review of the written record or an in-person hearing?
Answer: Yes. However, the sponsor must have both options stated in their serious deficiency policy. The timeframes for either type of an appeal are the same.
- What does a "review of the written record" mean?
Answer: A review of the written record means the impartial hearing official will base their decision only on the written records submitted by the sponsor and the provider. If the provider chooses this option, there is no right to appear in person.
- The sponsor is required to pay only the valid part of the provider's claim during the serious deficiency process and appeals. What does this mean?
Answer: Sponsors must disallow any portion of a provider's claim that it knows to be invalid; such as, meals that do not meet components, claims over capacity, and claims for children who were not in care. Sponsors may hold a provider's claim pending verification of its accuracy when fraud is suspected. However, the sponsor must notify CACFP and the provider that claims are being held for validation.
V. National Disqualified List (NDL)
- How many years must the sponsor retain records related to a terminated and disqualified provider?
Answer: Records must be kept for as long as the provider remains on the NDL; for seven years or until the debt is repaid.
- Will sponsors have access to the NDL? How will sponsors know if a provider is on the NDL?
Answer: Yes. Sponsors will have access to the NDL maintained by USDA in the future. In the meantime, CACFP maintains a list of terminated providers that is consulted whenever an application (DOH-3705) for a new provider is submitted for approval. Sponsors should always ask new providers if they ever participated in CACFP before and obtain a completed transfer form (DOH-4219), when applicable.
- What is the process that should be used if a provider on the NDL requests removal from the list?
Answer: Federal regulations (7 CFR 226) state, "Once included on the NDL, a day care home will remain on the list until such time as the State Agency determines that the serious deficiency that led to its placement on the list have been corrected or until seven years have elapsed. However, if the day care home has failed to repay debts owed under the Program, it will remain on the list until the debt has been repaid." Sponsors wishing to reinstate a disqualified provider must submit a written request on behalf of the provider and include documentation that the serious deficiency was permanently corrected.
Please contact a CACFP Homes Nutritionist at 1-800-942-3858, ext. 27104, if you have any questions about the serious deficiency process for day care home providers.