[30 Pa.B. 6853]
[Continued from previous Web Page] § 1103.5. Minimum inventory.
(a) A store shall have available on the premises at the time of the certification or recertification onsite review, and maintain at all times thereafter while participating as a WIC authorized store, minimum inventory requirements of allowable foods.
(b) Minimum inventory requirements of allowable foods are as follows:
(1) Formula.
(i) Contract milk-based formula with iron:
(A) Sixty-two 13 ounce cans of liquid concentrate.
(B) Twenty-five 32 ounce cans of ready-to-feed.
(C) Six 14.1 ounce cans of powdered.
(ii) Contract soy-based formula:
(A) Thirty-one 13 ounce cans of liquid concentrate.
(B) Twenty-five 32 ounce cans of ready-to-feed.
(C) Six 14 ounce cans of powdered.
(iii) Other standard formulas specified on the WIC check are not minimum inventory requirements. The store shall be able to provide these within 72 hours after a participant makes a request for the formula.
(2) Milk.
(i) Fluid whole, vitamin D fortified, fourteen 1/2 gallons or quart equivalent.
(ii) Fluid skim or low fat, vitamin A and D fortified, four 1/2 gallons or quart equivalent.
(iii) Nonfat dry, 2 pounds, in 1 or 2 pound containers.
(iv) Evaporated, twelve 12 ounce cans.
(3) Natural domestic cheese. One pound each of three varieties prepacked in 8 or 16 ounce packages.
(4) Grade ''A '' eggs. Five, 1 dozen containers.
(5) Juices.
(i) Three varieties with a total of nine 46 ounce containers.
(ii) Frozen concentrated or shelf stable concentrated, two varieties with a total of nine 11.5 to 12 ounce containers.
(iii) Infant, three varieties with a total of fifteen 4 ounce individual containers.
(6) Cereal.
(i) Adult, five varieties in 8 ounce or larger packages totaling at least 72 ounces.
(ii) Infant, two varieties, totaling at least 32 ounces.
(7) Peanut butter. Five 15 to 18 ounce containers.
(8) Dried peas and beans. Two varieties, 1 pound each.
(9) Tuna. Four 6 to 6.5 ounce cans, chunk, light, packed in water.
(10) Carrots. Two pounds of whole, unpeeled fresh carrots in 1 or 2 pound cello pack, or two cans of sliced carrots in 14 to 20 ounce cans.
(c) Annual publication of WlC food list. The Department will publish in the Pennsylvania Bulletin, no later than September 15 of each year, the name of the contract brand of formula and, if applicable, the names of allowable brands of foods, and the maximum price permitted for those allowable foods for which the Department establishes a maximum price.
(d) Waivers. The Department may grant minimum inventory waivers for allowable foods listed in subsection (e) under the following circumstances:
(1) For a WIC authorized store, the Department has no current reported purchases of the allowable foods based upon WIC checks redeemed by the store.
(2) For a store seeking certification, the Department has no current reported purchases of the allowable foods based upon WIC checks redeemed by the WIC authorized store closest to the store applying for certification.
(3) The store occupies the same physical location as a prior WIC authorized store, the waiver was granted to the prior WIC authorized store, and the application for certification from the new owner is received by the Department within 3 months after the date the prior WIC authorized store's certification to participate in the WIC Program terminated.
(e) Waiverable allowable foods. These foods are:
(1) Contract milk based with iron ready-to-feed infant formula.
(2) Contract milk based with iron powdered infant formula.
(3) Contract soy based ready-to-feed infant formula.
(4) Contract soy based powdered infant formula.
(5) Nonfat dry milk.
(6) Evaporated milk.
(7) Carrots.
(8) Tuna.
(f) Expiration of waivers. A minimum inventory waiver of an allowable food granted by the Department shall expire upon the presentation to the store, on behalf of a participant, of a WIC check for the purchase of that allowable food. The WIC authorized store shall provide the food item within 72 hours after presentation of the WIC check.
§ 1103.6. Waiting list.
(a) Placement of stores on the waiting list. The Department will place on a waiting list eligible stores as follows:
(1) A store that seeks to become a WIC authorized store if no store slots are open in the trade area where the store is located.
(2) When the total number of stores seeking certification or recertification is greater than the total number of store slots available for the trade area, and the store meets all selection criteria and has prices within the maximum allowable costs of Food Prescription One and Food Prescription Two, but is denied authorization because its weighted price is higher than other stores meeting all selection and limitation criteria.
(3) A store that seeks to apply during a moratorium as set forth in § 1103.1(c) (relating to certification and recertification reviews).
(4) When a store slot is open and the store seeking certification is located within 1 mile of a WIC authorized store, if the Department determines that there is not sufficient WIC participant shopping within the 1-mile area to support an additional WIC authorized store.
(b) Certification review of stores on waiting list. The Department will ensure that all stores on the waiting list in a trade area will be reviewed when a store slot becomes available in the trade area, or when stores in the trade area are reviewed during the next contemporaneous certification/recertification review process. The only exception to reviewing all stores on the waiting list is when a store slot opens as a result of a change of ownership of a store and the store, under new ownership, applies for certification under section § 1105.4(c) (relating to change of ownership of a WIC authorized store). The Department will review the store under its new ownership to determine if the store should receive certification.
§ 1103.7. Inadequate participant access.
(a) The Department will consider whether there is inadequate participant access when considering whether to place a store on probation, rather than deny recertification, for failure to meet selection and limitation criteria in § 1103.4(a) and (b) (relating to selection and limitation criteria; authorization process) during recertification reviews.
(b) The Department may also consider whether there is inadequate participant access when deciding whether to place on probation a store undergoing a change of ownership under § 1105.4(b) and (c) (relating to change of ownership of a WIC authorized store).
(c) Inadequate participant access is any of the following:
(1) Ten or more participants whose specific nationality, ethnicity or religious dietary needs can not be served properly by another WIC authorized store located in accordance with one of the following:
(i) Less than 3 miles of the store for counties with WIC participant density less than 25 participants per square mile.
(ii) Less than 2 miles of the store for counties with WIC participant density of 25 to 100 participants per square mile.
(iii) Less than 1 mile of the store for counties with WIC participant density greater than 100 participants per square mile.
(2) Ten or more participants will be required to travel in accordance with one of the following:
(i) Three or more miles to the next closest WIC authorized store for counties with WIC participant density less than 25 participants per square mile.
(ii) Two or more miles to the next closest WIC authorized store for counties with WIC participant density of 25 to 100 participants per square mile.
(iii) One or more miles to the next closest WIC authorized store for counties with WIC participant density greater than 100 participants per square mile.
(3) A participant has a physical disability that cannot be accommodated by another WIC authorized store in accordance with one of the following:
(i) Within 3 miles of the store for counties with WIC participant density less than 25 participants per square mile.
(ii) Within 2 miles of the store for counties with WIC participant density of 25 to 100 participants per square mile.
(iii) Within 1 mile of the store for counties with WIC participant density greater than 100 participants per square mile.
(4) Ten or more participants are affected by physical barriers or conditions which make normal travel to another WIC authorized store impractical.
(5) One hundred or more participants but less than 200 participants use WIC checks to purchase allowable foods at the store and the distance to the next closest WIC authorized store exceeds 2 miles.
(6) Two hundred or more participants but less than 300 participants use WIC checks to purchase allowable foods at the store and the distance to the next closest WIC authorized store exceeds 1 mile.
(7) Three hundred or more participants use WIC checks to purchase allowable foods at the store and the distance to the next closest WIC authorized store exceeds 3/10 of a mile.
(8) A WIC authorized store changes ownership without the Department receiving prior notice sufficient to arrange other accommodations for participants.
CHAPTER 1105. REQUIREMENTS OF WIC AUTHORIZED STORES § 1105.1. Training.
(a) Initial training. Following certification, the local agency shall provide initial training for the personnel a certified store designates. The training shall be mandatory and shall occur within 30 days after the date of certification. A store receiving certification may not accept WIC checks prior to having its designated personnel attend the initial mandatory training.
(b) Annual training. The Department will provide for WIC authorized stores annual training which is designed to prevent WIC Program errors and abuses and to improve WIC Program services. The following apply to annual training:
(1) A WIC authorized store shall ensure that at least one representative from the store who is responsible for training store personnel on the WIC Program shall attend.
(2) Attendance is mandatory.
(3) The Department will offer each WIC authorized store two opportunities to attend.
(4) The Department will ensure that annual training is offered to a WIC authorized store either within the county in which it is located or in an adjoining county within the appropriate local agency's jurisdiction.
(5) Failure to have at least one representative attend training shall result in the Department imposing sanctions against the WIC authorized store as in § 1107.1a(d)(16) (relating to disqualifications).
(c) Corrective training. The Department will provide corrective training as set forth in §§ 1103.2 and 1105.6 (relating to probationary certification; and monitoring of WIC authorized stores). Attendance is mandatory.
§ 1105.2. Overcharge recovery system.
(a) Quarterly price reports. A WIC authorized store shall provide to the Department, in a format prescribed by the Department, the highest prices the store charged for allowable foods during the previous quarter for which the Department collects prices. The report shall be known as the Quarterly Price Report. A store may submit its Quarterly Price Report by mail or fax. If submitted by mail, the Quarterly Price Report shall be postmarked no later than the 15th of the month following the end of the calendar quarter. If submitted by fax, the Quarterly Price Report must be received by the Department by the 15th of the month following the end of the calendar quarter.
(b) Department review. The Department will review WIC check amounts redeemed by a WIC authorized store against the prices reported on the store's Quarterly Price Report to determine and collect overcharges owed to the Department.
(c) Determination of maximum redemption amount of each WIC check. For each WIC check redeemed for which the store was reimbursed for the sale of foods for which the Department collects prices, the Department will determine the maximum amount for which the WIC authorized store could have redeemed the check based upon prices provided in the Quarterly Price Reports supplied by the store.
(d) Determination of overcharges. The Department will compare the maximum amount for which a WIC authorized store could have redeemed a WIC check based upon the prices in the store's Quarterly Price Report, against the actual amount for which each WIC check accepted by the store during a reporting quarter was redeemed, to determine any overcharge owed to the Department.
(e) Pursuit of reimbursement. The Department will seek reimbursements from a WIC authorized store for the store's overcharges totaling $10 or more for a calendar quarter.
(f) Reimbursement of overcharges. A WIC authorized store shall submit reimbursement of overcharges to the Department within 20-calendar days of the date on the Department's billing notice for the overcharge, unless the WIC authorized store disputes the overcharge determination.
(g) Overcharge disputes. A WIC authorized store that disputes an overcharge billing shall submit the basis for its dispute in writing to the Department, postmarked within 15-calendar days of the date on the Department's billing notice. Upon resolution of an overcharge dispute, any overcharge the Department determines to be owing shall be due within 15-calendar days of the mailing date on the Department's notification of its resolution of the dispute.
(h) Sanctions. The Department will impose a sanction against a WIC authorized store under § 1107.1a(d)(14) (relating to disqualifications) if the store fails to pay overcharges due within the time required under subsections (f) and (g).
(i) Disqualification. The Department may disqualify a WIC authorized store if the store's reported prices on the Quarterly Price Report exceed the current maximum allowable cost as published by the Department for Food Prescription One or Food Prescription Two, set forth in § 1103.4(a)(6)(i) and (ii) (relating to selection and limitation criteria; authorization process).
§ 1105.3. Terms and conditions of participation.
(a) General terms and conditions. A WIC authorized store shall adhere to this subsection. Failure to do so shall result in the imposition of sanctions as in § 1107.1 (relating to imposition of sanctions). A WIC authorized store shall:
(1) Adhere to all applicable statutes and State and Federal regulations regulating the WIC Program, including the nondiscrimination provisions of 7 CFR Parts 15, 15a, 15b and 246, and this part.
(2) Inform the public of its participation in the WIC Program by displaying at least one WIC decal supplied by the Department in a place conspicuously visible to the general public.
(3) Monitor, supervise and be accountable for the actions of employes in the handling of WIC checks, the selling of allowable foods, and the performance of other conduct related to the WIC Program.
(4) Maintain the minimum inventory of allowable foods on the premises.
(5) Ensure that allowable foods are properly stored and refrigerated.
(6) Ensure that there are no stale dated allowable foods on the sales floor.
(7) Provide the Department, on the Quarterly Price Report Form provided by the Department, the highest prices of allowable foods specified on the report form.
(8) Maintain a clean and sanitary store.
(9) Provide orientation and training to employes regarding applicable regulations governing the WIC Program.
(10) Maintain a copy of the current WIC food list at each check-out aisle.
(11) Send at least one representative who is responsible for training store personnel on the WIC Program to WIC Program training annually, or more often if required by the Department under § 1105.1(c) (relating to training).
(12) Immediately notify the Department when store ownership changes, when store operations cease on a permanent or temporary basis, or when any other circumstance impacting service to participants occurs.
(13) Allow Federal, State, Department and local agency representatives who are involved in monitoring the store's compliance with statutes and regulations governing the WIC Program, to visit the store to observe its procedures for accepting and handling WIC checks and to conduct announced or unannounced onsite reviews to determine compliance with applicable Federal and State regulations.
(14) Provide Federal, State, Department and local agency representatives who are involved in monitoring the store's compliance with statutes and regulations governing the WIC Program, access to all WIC checks accepted by the store and on its premises at the time of an onsite review.
(15) Provide Federal, State, Department and local agency representatives who are involved in monitoring the store's compliance with statutes and regulations governing the WIC Program, access to price and inventory records during an onsite review.
(16) Agree that neither the Department nor the WIC authorized store has an obligation to renew the store's authorization to participate in the WIC Program.
(17) Agree that the store's authorization to participate in the WIC Program shall become void when ownership of the store changes.
(18) Display the current shelf price of each allowable food either on the allowable food, on the shelf immediately above or below the allowable food, or prominently on an allowable food price list easily located by participants and clearly visible to them.
(19) Not transfer or assign its WIC certification or recertification to another person or entity.
(20) Reimburse the Department for funds received through transactions involving WIC checks which were not conducted in accordance with this part.
(21) Maintain price and inventory records for allowable foods for a minimum period of 6 months from the date of receipt of the inventory.
(b) Terms and conditions of participation with regard to participants. A WIC authorized store shall serve participants as set forth in this subsection. The Department will impose sanctions against a WIC authorized store that fails to do so, as set forth in § 1107.1. A WIC authorized store shall:
(1) Provide allowable foods to participants only as authorized on the WIC food list and as specified on the WIC check.
(2) Not encourage or discourage a participant from purchasing allowable foods specified on the WIC check.
(3) Provide allowable foods to participants at or below the current price the store charges other customers.
(4) Not seek restitution or payment from participants for WIC checks not reimbursed by the Department, or contact participants concerning WIC transactions that occur in the store.
(5) Not seek restitution or payment from participants for allowable foods when the price the store charges for the allowable foods exceeds the ''Not to Exceed'' amount on the WIC check.
(6) Not request personal addresses, telephone numbers or other personal identification of participants.
(7) Offer participants the same courtesies offered other customers, and not distinguish or identify participants from other customers.
(8) Provide services to participants without regard to race, color, age, sex, religion, national origin or disability.
(9) Give trading stamps to participants for purchases made with WIC checks if trading stamps are given for cash purchases.
(10) Accept cents-off coupons, a store discount card or other discounts from participants for allowable foods, and deduct the savings in calculating the total purchase price entered into the ''Pay Exactly'' amount on WIC checks.
(11) Accept ''buy one get one free'' coupons and manufacturers' promotional free product offers from participants.
(c) Terms and conditions of participation with regard to WIC check processing and redemption. A WIC authorized store shall adhere to the requirements of this subsection with regard to WIC check processing and redemption. The Department will impose sanctions against a WIC authorized store that fails to do so, as set forth in § 1107.1. A WIC authorized store shall:
(1) Treat the acceptance of a WIC check as a financial transaction between only the Department and the WIC authorized store, not the participant.
(2) Accept a WIC check only if the WIC check is made payable to that specific WIC authorized store, unless the Department has provided written authorization otherwise to the store.
(3) Accept a WIC check only if the participant, endorser or proxy presents the WIC check on or between the ''First Day to Use'' and the ''Last Day to Use'' designations on the WIC check.
(4) Accept a WIC check only if a valid WIC identification card is presented at the time of redemption.
(5) Accept a WIC check only if the signature of the participant, endorser or proxy is obtained, at the time of purchase, on the WIC check, and the signature on the WIC check matches the signature on the WIC identification card.
(6) Accept a WIC check only if there is no visible alteration on the WIC check.
(7) Charge the WIC Program only for the types and quantities of allowable foods specified on the WIC check and selected for purchase by the participant, endorser or the participant's proxy.
(8) Record in ink, on each WIC check immediately after completion of the WIC transaction and prior to the participant, endorser or proxy signing the WIC check, the actual purchase amount of the transaction net of any cents-off coupons or other discounts.
(9) Properly correct an error made in recording the ''Pay Exactly'' amount of a WIC check by drawing a single line through the incorrect amount and writing the correct amount above or below the error and having the participant, endorser or proxy initial next to the corrected amount. No other corrections are permissible.
(10) Not alter any information on the WIC check as presented by the participant, endorser or proxy.
(11) Not provide substitute items, rainchecks or cash reimbursement for allowable foods that are unavailable.
(12) Not provide cash or credit for a WIC check.
(13) Not provide change for the difference between the ''Not to Exceed'' and the ''Pay Exactly'' amounts on the WIC check nor for any coupons tendered during the WIC transaction.
(14) Not refund money or provide exchanges to replace allowable foods returned by participants, endorsers or proxies.
(15) Not accept a WIC check as payment for items other than allowable foods specified on the WIC check.
(16) Not charge the WIC Program for allowable foods not received by the WIC participant or for allowable foods provided in excess of those listed on the WIC check.
(17) Not charge the WIC Program for the sale of an amount of an allowable food which exceeds the store's documented inventory of that food item covering the period of time under review and in which the sale was made.
(18) Deposit WIC checks accepted by it directly to its bank account no later than 45 days after the ''First Day to Use'' date on the WIC check.
(19) Not receive, transact, redeem or otherwise dispose of a WIC check outside of check redemption procedures set forth in this section.
(20) Not use a WIC check for the purchase of any commodity or the payment of any debt.
(21) Not collect sales tax on allowable food purchases.
(22) Reimburse the Department for payments the store has received for improperly executed WIC checks.
(d) The Department will deny payment to a WIC authorized store for WIC checks which the store did not process under subsection (c).
§ 1105.4. Change of ownership of a WIC authorized store.
(a) A certification or recertification is void when a change of ownership of a WIC authorized store occurs.
(b) To allow uninterrupted service to participants subsequent to a change of ownership, the Department may accept an application for certification from the prospective new owner of a WIC authorized store prior to a change of ownership.
(c) When a change of ownership occurs and inadequate participant access as defined in § 1103.7(c)(8) (relating to inadequate participant access) would result, the store under the new ownership may receive probationary certification for a period not to exceed 6 months if the State conducts an immediate onsite visit followed by a complete certification visit at the store. Until the immediate onsite visit is conducted, the new owner may not accept WIC checks. As soon as possible within the 6-month probationary period or during the next recertification process, whichever occurs first, the store under the new ownership shall compete with stores on the waiting list in the trade area for the store slot.
(d) The Department will not accept an application for certification from a store that has been provided notice of disqualification or is serving a disqualification if an individual who had at least a 10% ownership interest in the store has at least a 10% ownership interest in the applicant or such ownership interest has been transferred or sold to immediate family members of the individual.
§ 1105.6. Monitoring of WIC authorized stores.
(a) Purpose and types of monitoring of WIC authorized stores. Federal, State or local representatives will conduct announced and unannounced onsite reviews of WIC authorized stores to determine compliance with applicable Federal and State regulations, and to investigate complaints regarding a store. The types of onsite reviews that may be conducted for monitoring purposes are high risk reviews, routine reviews and training buys.
(b) High risk reviews. The Department will monitor all high risk stores. The Department will use either compliance investigations or inventory audits as methods to monitor high risk stores. The Department also may conduct compliance buys and inventory audits on stores that have not been identified as high risk stores.
(1) Compliance investigations. The following standards apply:
(i) The Department will conduct at least two compliance buys during a compliance investigation.
(ii) The Department will not notify the WIC authorized store that a compliance buy is scheduled.
(iii) The Department will provide written notification to the WIC authorized store of the results of each compliance buy, including the store's violation of a statute or regulation governing its participation in the WIC Program, unless subparagraph (viii) applies.
(iv) The Department will provide to the personnel of the WIC authorized store mandatory corrective training after two compliance buys detect violations of statutes or regulations governing the store's participation in the WIC Program.
(v) The Department will conduct a third compliance buy at the WIC authorized store after store personnel have attended mandatory corrective training.
(vi) The Department will impose a sanction in accordance with § 1107.1 (relating to imposition of sanctions) against the store if three compliance buys detect violations of statutes or regulations governing the store's participation in the WIC Program. If multiple violations are found during the compliance investigation, the Department will impose the sanction against the store for the term corresponding to the most serious violation.
(vii) The Department will close the compliance investigation on a WIC authorized store if no violations of a statute or regulation governing the store's participation in the WIC Program are discovered after two consecutive compliance buys.
(viii) The Department may withhold notification of compliance buy results, and may withhold providing training or conducting further compliance investigations, when fraudulent activities by the WIC authorized store are indicated during a compliance investigation or by local agency or participant complaint.
(2) Inventory audits. The Department will disqualify the WIC authorized store when an inventory audit establishes the claim of reimbursement for authorized food in excess of documented inventory. No warning letters will be issued.
(c) Routine reviews. The Department will use reviews as follows to determine whether a WIC authorized store is in compliance with the selection and limitation criteria in § 1103.4(a) and (b) (relating to selection and limitation criteria; authorization process) and terms and conditions of participation in § 1105.3 (relating to terms and conditions of participation):
(1) The Department will not notify the WIC authorized store that a routine review is scheduled.
(2) The Department will provide written notification to the WIC authorized store of the results of each routine review, including violation of a statute or regulation governing the store's participation in the WIC Program.
(3) The Department will conduct a second routine review of the WIC authorized store if the first routine review detects violations of a statute or regulation governing the store's participation in the WIC Program.
(4) The Department will provide to the personnel of the WIC authorized store mandatory corrective training after two routine reviews detect violations of a statute or regulation governing the store's participation in the WIC Program.
(5) The Department will conduct a third routine review of a WIC authorized store after store personnel have attended mandatory corrective training.
(6) The Department will impose a sanction in accordance with § 1107.1 against a store if a third routine review detects violations of a statute or regulation governing the store's participation in the WIC Program. If multiple violations are found during the routine reviews, the Department will impose the sanction against the store for the term corresponding to the most serious violation.
(d) Training buys. The Department will use training buys to monitor WIC check transaction procedures and compliance with statutes and regulations governing the store's participation in the WIC Program. The following standards shall apply:
(1) The Department will not notify the WIC authorized store that a training buy is scheduled.
(2) The Department will provide written notification to the WIC authorized store of the results of each training buy, including violations of a statute or regulation governing the store's participation in the WIC Program.
(3) The Department will conduct a second training buy at the WIC authorized store if the first training buy detects violations of a statute or regulation governing the store's participation in the WIC Program.
(4) The Department will provide the personnel of the WIC authorized store mandatory corrective training after two training buys detect violations of a statute or regulation governing the store's participation in the WIC Program.
(5) The Department will conduct a third training buy at the WIC authorized store after store personnel have attended the mandatory corrective training.
(6) The Department will impose a sanction in accordance with § 1107.1 against a store if a third training buy detects violations of a statute or regulation governing the store's participation in the WIC Program. If multiple violations are found during the training buys, the Department will impose the sanction against the store for the term corresponding with the most serious violation.
(e) Use of law enforcement agency. The Department may utilize a law enforcement agency in the investigation of a WIC authorized store or other store suspected of trafficking WIC checks or other fraud or abuse of the WIC Program.
(f) Reimbursement. The Department will seek reimbursement from a WIC authorized store that received funds improperly due to a violation of regulations governing the store's participation in the WIC Program discovered during monitoring reviews. The Department will send notice to the store of the amount of money to be reimbursed to the WIC Program. The store shall make payment within 20 days from the date of the notice.
CHAPTER 1107. SANCTIONS § 1107.1. Imposition of sanctions.
(a) The Department may disqualify a store or impose a civil money penalty in lieu of disqualification for reasons of program abuse. In the case of fraud, trafficking, sale of alcohol or alcoholic beverages or tobacco products the Department will not provide the store with a prior warning that violations were occurring before imposing the sanctions. For other serious program violations or offenses, the Department may choose to not provide the store with prior warning that violations were occurring before imposing the sanctions. The store may appeal a Department decision pertaining to disqualification, denial of application to participate, or other adverse actions that affect participation during the agreement performance period in accordance with § 1113.1 (relating to right to appeal). Expiration of an agreement with a store, disqualification of a store as a result of disqualification from the Food Stamp Program, and the Department's determination regarding inadequate participant access are not subject to review.
(b) The Department will disqualify a store which has been disqualified from the Food Stamp Program unless the Department determines that the disqualification of the store would result in inadequate participant access under § 1103.7 (relating to inadequate participant access). If the Department determines that disqualification of the store would result in inadequate participant access under § 1103.7, the Department will give the store the option of paying a civil money penalty in lieu of WIC disqualification.
(c) The Department will disqualify a store for WIC Program violations in § 1107.1a (relating to disqualifications) unless the Department determines that disqualification of the store under § 1107.1a(b)--(d) would result in inadequate participant access. In that case, the Department will give the store the option of paying a civil money penalty in lieu of disqualification. The Department will not impose a civil money penalty in lieu of disqualification for third or subsequent sanctions for violations.
(d) Disqualification from the WIC Program may result in disqualification as a retailer in the Food Stamp Program. The disqualification may not be subject to administrative or judicial review under the Food Stamp Program.
(e) In addition to imposing a sanction against a WIC authorized store that commits fraud or abuse of the WIC Program, the Department may prosecute or make a referral for prosecution of the WIC authorized store to a criminal prosecution agency for prosecution under applicable Federal, State or local laws.
(f) A WIC authorized store that has a sanction imposed against it by the Department for accepting a WIC check for items other than those specified on the WIC check shall also reimburse the Department for monies received for the purchase of these items with the WIC check.
(g) The Department may impose a sanction against a WIC authorized store for failing to remit any amount demanded due to violations of statutes or regulations governing its participation in the WIC Program within the time frame in § 1105.2(f) and (g) (relating to reimbursement of overcharges) or the notice given by the Department under § 1105.6(f) (relating to monitoring of WIC authorized stores).
§ 1107.1a. Disqualifications.
(a) Permanent disqualiflcation. The Department will permanently disqualify a WIC authorized store convicted of trafficking in WIC checks or selling firearms, ammunition, explosives or controlled substances (as defined in section 102 of the Controlled Substances Act (21 U.S.C.A. § 802)) in exchange for WIC checks. The Department will not compensate the store for revenues lost as a result of the violation.
(b) Six-year disqualification. The Department will disqualify a WIC authorized store for 6 years for either of the following:
(i) One incidence of buying or selling WIC checks for cash (trafficking).
(ii) One incidence of selling firearms, ammunition, explosives, or controlled substances as defined in section 102 of the Controlled Substances Act, in exchange for WIC checks.
(c) Three-year disqualification. The Department will disqualify a WIC authorized store for 3 years for any of the following violations:
(1) One incidence of the sale of alcohol or alcoholic beverages or tobacco products in exchange for WIC checks.
(2) A pattern of claiming reimbursement for the sale of an amount of a specific allowable food, which exceeds the store's documented inventory of that specific allowable food item for a specific period of time. A pattern may be established during a single inventory audit encompassing a 2-month period when a WIC authorized store's records indicate that the WIC authorized store's redemptions for a specific allowable food exceed the WIC authorized store's documented inventory for that allowable food.
(3) Two or more incidences of charging participants more for an allowable food than non-WIC customers or charging participants more than the current shelf price.
(4) Two or more incidences of receiving, transacting or redeeming WIC checks outside of authorized channels, including the use of an unauthorized store or an unauthorized person, or both.
(5) Two or more incidences of charging for allowable food not received by the participant.
(6) Two or more incidences of providing credit or nonfood items, other than alcohol, alcoholic beverages, tobacco products, cash, firearms, ammunition, explosives, or controlled substances as defined in section 102 of the Controlled Substances Act, in exchange for WIC checks.
(d) One-year disqualification. The Department will disqualify a WIC authorized store for 1 year for any of the following violations:
(1) Two or more incidences of providing unauthorized food items in exchange for WIC checks, including charging for allowable food provided in excess of those listed on the WIC check.
(2) Having stale-dated allowable food on the sales floor.
(3) Failing to maintain on the premises at all times minimum inventory requirements of an allowable food.
(4) Failing to request the participant's WIC identification card prior to accepting a WIC check.
(5) Accepting a WIC check made payable to another store without prior written approval from the Department.
(6) Failing to maintain a clean and sanitary store.
(7) Failing to properly store and refrigerate allowable foods.
(8) Closure of the store by a city, local or county health department.
(9) Charging or demanding that a participant pay for an allowable food with the participant's own money or with another WIC check for purchases made with a WIC check.
(10) Securing the signature of the participant, endorser or proxy prior to completing the ''Pay Exactly'' box on the WIC check.
(11) Overcharging the WIC Program by charging sales tax.
(12) Having or charging prices which exceed the current maximum allowable costs established by the Department and published in the Pennsylvania Bulletin for either Food Prescription One or Food Prescription Two set forth in § 1103.4(a)(6)(i) and (ii) (relating to selection and limitation criteria; authorization process).
(13) Giving monetary change to an authorized individual who tenders a WIC check.
(14) Failing to remit payment for an overcharge within the specified time frame under either §§ 1105.2(f) and (g) or 1105.6(f) (relating to overcharge recovery system; or monitoring of WIC authorized stores).
(15) Physically altering or changing on the face of a WIC check the store name, food type or quantity, participant information, date or printed dollar amount.
(16) Failing to have at least one representative of the store attend required training.
(e) Second mandatory sanction. When a WIC authorized store, which previously has been assessed a sanction for any of the violations in subsections (b)--(d), receives another sanction for any of these violations, the Department will double the second sanction. The Department will double civil money penalties up to the limits allowed under § 1107.3(c) (relating to civil money penalties).
(f) Third or subsequent mandatory sanction. When a WIC authorized store, which previously has been assessed two or more sanctions for any of the violations listed in subsections (b)--(d), receives another sanction for any of these violations, the Department will double the third sanction and all subsequent sanctions. The Department will not impose civil money penalties in lieu of disqualification for third or subsequent sanctions for violations listed in subsections (b)--(d).
(g) Multiple violations during a single investigation. When during the course of a single investigation the Department determines a WIC authorized store has committed multiple violations, the Department will disqualify the WIC authorized store for the period corresponding to the most serious violation. However, the Department will include all violations in the notice of disqualification action.
(h) Disqualification based on a Food Stamp Program disqualification. The Department will disqualify a WIC authorized store which has been disqualified from the Food Stamp Program. The disqualification shall be for the same length of time as the Food Stamp Program disqualification, but may begin at a later date than the Food Stamp Program disqualification. Under 7 CFR 246.12(k)(1)(vii) and 1113.1(b)(3) (relating to right to appeal), the WIC program disqualification is not subject to administrative or judicial review under the WIC Program.
(i) Voluntary withdrawal or nonrenewal of agreement. The Department will not accept voluntary withdrawal of the WIC authorized store from the WIC Program as an alternative to disqualification for the violations listed in subsections (a)--(d), but will enter the disqualification on the record. The Department will not permit the store to use nonrenewal of a store agreement as an alternative to disqualification.
(j) Other violations. For any violation of a statute or regulation governing the store's participation in the WIC Program which is not specifically classified in subsections (a)--(d), the Department will determine the appropriate type and level of sanction to be imposed upon the store based upon the nature and severity of the violation. A disqualification imposed under this subsection will not exceed 1 year.
(k) Advance notice. The Department will provide a WIC authorized store at least 30 days advance notice of the effective date of any disqualifications and, if appropriate, an opportunity to appeal the disqualification under § 1113.1 (relating to right to appeal).
(l) Certification following expiration of disqualification period. A store that has been disqualified from the WIC Program may apply for certification following expiration of the disqualification period. If the store chooses to apply for certification after expiration of the disqualification, the Department will not consider the prior disqualification from the WIC Program when determining eligibility. The store will be considered in accordance with § 1103.4 (relating to selection and limitation criteria; authorization process) or placed on a waiting list in accordance with § 1103.6 (relating to waiting list).
§ 1107.2. Civil money penalties.
(a) Option available in lieu of a disqualification. The Department may offer to a store the option of paying a civil money penalty in lieu of a denial of recertification or a disqualification required under § 1107.1 (relating to imposition of sanctions), only if the Department finds inadequate participant access as set forth in § 1103.7 (relating to inadequate participant access). The Department will not provide this option for third or subsequent violations in § 1107.1a(b)--(d) (relating to disqualifications).
(b) Calculation of civil money penalty.
(1) For civil money penalties in lieu of disqualifications under § 1107.1a(b), (c) and (d)(1), the Department will calculate the civil money penalty for each violation identified by multiplying 10% of the average monthly total value of WIC checks redeemed for the most recent 6-month period by the number of months the store would be disqualified under § 1107.1. If 6 months of information relating to the monthly value of WIC checks redeemed is not available, the Department will calculate the monthly average based upon the number of months for which information is available.
(2) For disqualifications identified in § 1107.1a(d)(2)--(16), the Department will calculate the civil money penalty for each violation identified by multiplying 5% of the average monthly total value of WIC checks redeemed for the most recent 6-month period by the number of months the store would be disqualified under § 1107. 1. For stores which are denied recertification for which this option is available, the Department will multiply 5% of the average monthly total value of WIC checks for the most recent 6-month period by 6 months to determine the civil money penalty to be paid. If 6 months of information relating to the monthly value of WIC checks redeemed is not available, the Department will calculate the monthly average based upon the number of months for which information is available.
(c) Limitation of Penalties. The amount of the civil money penalty will not exceed $10,000 for each violation. When, during the course of a single investigation, the Department determines a store has committed multiple violations, the Department will impose a civil money penalty for each violation. The total amount of civil money penalties imposed for violations investigated as part of a single investigation will not exceed $40,000.
(d) Written agreement. If the Department offers and the store agrees to pay a civil money penalty in lieu of disqualification, the Department and store shall set forth the terms of the agreement in writing. The terms may include a probationary period during which the Department may conduct monitoring to ensure action has been taken by the store to correct problems. The agreement will be effective when it is signed by the Director of the Division of WIC or the Director's designee.
(e) Payment of the civil money penalty. If a WIC authorized store does not pay, only partially pays, or fails to timely pay a civil money penalty assessed in lieu of disqualification, the Department will disqualify the WIC authorized store for the length of the disqualification corresponding to the violation for which the civil money penalty was assessed. If a civil money penalty is assessed for more than one violation, the Department will impose the disqualification for the period corresponding to the most serious violation. The Department may permit payment of civil money penalties by installments.
(f) Outstanding financial liabilities. Payment of the civil money penalty, unless specifically provided for in a written agreement between the Department and the store, does not relieve the store of any other past or future financial liability incurred by the store by reason of its participation in the WIC Program. This includes, by way of example, payment to the Department of outstanding overcharges for the acceptance of WIC checks for the sale of unauthorized foods.
CHAPTER 1113. LOCAL AGENCY AND STORE APPEALS. § 1113.1. Right to appeal.
(a) A store or local agency adversely affected by a Division of WIC action has the right to appeal. The right of appeal shall be granted when a local agency's or store's application to participate in the WIC Program is denied; or during the course of an agreement or period of authorization, when a local agency or store is disqualified; or when any other adverse action during the period of authorization which affects participation is taken against the store or local agency by the Division of WIC.
(b) The following actions are not subject to appeal:
(1) The expiration of a WIC authorization.
(2) The Division of WIC's determination regarding participant access.
(3) Disqualification from the WIC program of a store as a result of disqualification from the Food Stamp Program.
(c) The appeal process is designed to secure and protect the interest of both the store or local agency and the Division of WIC and to ensure equitable treatment for all involved.
(d) Except for permanent disqualifications assessed under § 1107.1a(a) (relating to disqualifications), the Department may take adverse action against a store after 30 days advance notification.
(e) In the case of a disqualification of a local agency, the Department will provide at least 60 days advance notice.
§ 1113.2. Appeal procedures.
(a) Notification. At the time the Division of WIC denies an application of a store, or disqualifies a WIC authorized store or takes an adverse action against a local agency or store during a period in which the local agency or store is authorized, the Division of WIC will notify the local agency or store of its right to an administrative appeal.
(b) Form of appeal. The appeal shall be made by the local agency or store or its authorized representative, in writing, stating the reasons for the appeal.
(c) Time for filing an appeal. The appeal shall be filed with the Director of the Division of WIC within 30 days after any final decision by the Division of WIC.
(d) Scheduling the hearing.
(1) The Director of the Division of WIC shall forward the appeal to the office of the hearing examiner.
(2) The hearing examiner shall set a time, date and place for the hearing.
(3) The hearing examiner shall send notice to the local agency or store, or its authorized representative, at least 10 days in advance of the date of the hearing.
(4) The hearing examiner shall schedule the hearing to be held within 21 days after the date of receipt by the Division of WIC of the local agency or store appeal.
(5) The Department or the appellant may request in writing that the hearing be rescheduled for another time or date and the hearing examiner shall consider the request.
(e) Hearing examiner. The Secretary will appoint a hearing examiner to preside over the appeal. The person shall be an impartial decision-maker, whose decision as to the validity of the Department's action shall rest solely on the evidence presented at the hearing and the statutory and regulatory provisions governing the WIC program, and who may not have participated in the decision made by the Division of WIC or have any personal stake in the outcome.
(f) Hearing procedures.
(1) The local agency or store may be assisted or represented by an attorney or other authorized representative.
(2) The local agency or store, or its authorized representative, may examine, prior to and during the hearing, the documents and records considered by the Division of WIC in reaching its decision under appeal.
(3) The hearing shall be open to the public.
(4) Each party shall have the opportunity to present and cross-examine witnesses.
(5) Each party may present oral or documentary evidence and arguments to support its position in narrative form.
(6) Each party may object to or attempt to refute any testimony or other evidence presented by the other party.
(g) Supersession. Subsection (d) supersedes 1 Pa. Code § 35.105 (relating to notice of nonrulemaking procedures). Subsection (e) supersedes 1 Pa. Code § 35.185 (relating to designation of presiding officers). Subsection (f) supplements 1 Pa. Code § 31.21 (relating to appearance in person) and supersedes 1 Pa. Code §§ 31.22 and 31.23 (relating to appearance by attorney; and other representation prohibited at hearings).
[Pa.B. Doc. No. 00-2255. Filed for public inspection December 22, 2000, 9:00 a.m.]
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