CACFP Resources Serious Deficiency Process: Corrective Action Plan

Serious Deficiency Process and Corrective Action Plan for Program Operators

The Child and Adult Care Food Program (CACFP) regulations define seriously deficient as the status of an institution determined by the state agency to be non-compliant in one or more aspects of its operation of the program. The serious deficiency process offers a way for the California Department of Social Services (CDSS) to take required action while allowing program operators to correct serious program problems and ensuring due process. The serious deficiency process protects program integrity by removing program operators and responsible principals or individuals who are unable or unwilling to correct serious programmatic problems, and preventing them from returning to the program until approval for participation is granted by the USDA’s Food and Nutrition Services (FNS) Western Regional Office (WRO).

The serious deficiency process includes six steps that begin when the CDSS identifies a serious deficiency.

  1. Identify the serious deficiency(ies)
     
  2. Issue a notice of serious deficiency
     
  3. Receive and review the program operator’s corrective action plan (CAP)
     
  4. Issue a notice of temporary deferral of the serious deficiency if the CAP is approved, or issue a notice of proposed termination and disqualification, including appeal procedures, if the CAP does not fully and completely correct the identified serious deficiencies (or if no CAP is received)
     
  5. Provide an appeal hearing, if requested, of the proposed termination and disqualification
     
  6. Issue a notice of final termination and disqualification if the appeal is denied or if the allotted time for the appeal request passes without receiving an acceptable CAP, and submit the program operator and RPI(s) information to the FNS WRO to be placed on the National Disqualified List (NDL); or issue a notice of temporary deferral if the appeal is upheld.

The purpose of this page is to review the steps of the serious deficiency process in detail, which can be accessed directly from choosing one of the links below:

Review the serious deficiency process

Clarify expectations for acceptable CAPs

Review the proposed termination and proposed disqualification process

Review the termination and disqualification process

Review what is needed to request removal from the NDL

Collection of debts, including interest

The Serious Deficiency

Pursuant to Title 7, Code of Federal Regulations (7 CFR), Section 226.6 (c)(3), if a program operator is determined to be non-compliant in one or more aspects of its CACFP operations, the CDSS must issue a serious deficiency notification to the program operator and any identified responsible principals and/or individuals (RPI). Once a program operator is declared seriously deficient, the following procedures must be followed:

  1. The CDSS sends an electronic notice of serious deficiency through Adobe Sign to the program operator's email and any identified RPI's email(s). The notice is considered received by the program operator or RPI(s) five days after being sent to the last known email address(es). The notice also specifies:
     
    • The serious deficiencies, including appropriate citations from the CACFP regulations
       
    • Actions to be taken to correct the serious deficiencies
       
    • The time allotted to correct the serious deficiency
       
    • That the serious deficiency determination is not appealable
       
    • That failure to fully and permanently correct the serious deficiencies in the CDSS’ proposed termination of the program operator’s CACFP agreement, and the proposed disqualification of the program operator and the RPI(s) 
       
    • That the program operator's voluntary termination of its CACFP agreement after being determined seriously deficient will result in the program operator’s formal termination and disqualification and placement of the program operator and its RPI(s) on the NDL
       
  2. The CDSS records that the program operator and its RPI(s) are seriously deficient in the state tracking system, noting the basis for the serious deficiency determination.
     
  3. At the same time, the CDSS issues the notice of serious deficiency to the program operator and the RPI(s), the CDSS provides the notice of serious deficiency and supporting documentation to the FNS Western Region Office (WRO).
     
  4. The program operator submits a CAP that details the internal controls implemented to ensure that the serious deficiencies are fully and permanently corrected.
     
  5. If the CAP is acceptable, the serious deficiency determination for the program operator and the RPI(s) is temporarily deferred.

Corrective Action Plan Guidance

In response to the serious deficiency notice, program operators must submit in writing to the CDSS sufficient documentation of corrective actions taken which fully and permanently correct each serious deficiency. The submitted documents must include the internal controls implemented to prevent the serious deficiencies from happening in the future. If the CDSS determines that the corrective actions fully and permanently correct each serious deficiency, then the CDSS will temporarily defer its serious deficiency determination.

A successful CAP includes:

  1. Name(s) of the program operator and the RPIs associated with the serious deficiencies
     
  2. Address of the program operator
     
  3. Dates of birth for all RPIs associated with the serious deficiency
     
  4. Policies and procedures or other official documentation which ensures the serious deficiency has been fully and permanently corrected
     
  5. Details of the serious deficiencies which address the following questions:
     
    • What are the serious deficiencies and the procedures that the program operator will implement to address the serious deficiencies?
       
    • Who will address the serious deficiency? List the names and positions of personnel who will be responsible for each task.
       
    • When will the program operator implement the procedures for addressing the serious deficiencies? Program operators must provide a timeline identifying the implementation of procedures; for example, procedures done daily, weekly, monthly, or annually, and the initial implementation date.
       
    • Where will the program operators retain the CAP documentation?
       
    • How will the program operator inform staff and facilities or providers of the new policies and procedures, for example, in a handbook, training, Web site, etc.
        

A successful CAP has enough detail explaining what will be done, how it will be done, when it will be done, and by whom it will be done. The CAP also describes where the changes will be housed, for example, maintained in the program operator’s administrative procedures manual and in the minutes of a board meeting.

Access the following link for an example provided by the USDA of an acceptable CAP: ABC-DEF Daycare Center Example CAP Letter.

Program operators must include additional supporting documentation with the CAP which may include copies of income eligibility forms, enrollment forms, enrollment rosters, staff training documentation, site monitoring reports, menus, Child Nutrition labels or manufacturers’ product analysis sheets or recipes, attendance records, meal count forms, itemized food receipts, etc.

Corrective action must be taken by the program operator within a reasonable timeframe. The CDSS is prohibited from allowing more than 90 days for corrective action unless a long-term exception is approved in special circumstances. 

Proposed Termination and Proposed Disqualification

If the program operator fails to implement timely corrective action to fully and permanently correct the serious deficiencies cited, the program operator and its RPI(s) will be notified that the CDSS is proposing to terminate the program operator's CACFP agreement and to disqualify the program operator and its RPI(s).

  1. The CDSS sends an electronic notice of proposed termination and disqualification through Adobe Sign to the program operator’s email and any identified RPI’s email(s). The notice is considered received by the program operator or RPI(s) five days after being sent to the last known email address(es). The notice of proposed termination and disqualification will specify:
     
    • That the CDSS is proposing to terminate the program operator’s CACFP agreement and to disqualify the program operator and its RPI(s).
       
    • The basis for the actions, including regulatory citations
       
    • That if the program operator voluntarily terminates its CACFP agreement after receiving the notice of proposed termination and disqualification, the program operator and its RPI(s) will still be terminated and disqualified and placed on the NDL
       
    • The procedures for submitting an appeal of the proposed actions which can be found on the CDSS CACFP Appeal Process Web page.
       
    • That the program operator may continue to participate in the CACFP and receive reimbursement for eligible meals served and allowable administrative expenses incurred until its appeal or administrative review is completed.
       
  2. The CDSS records that the program operator and its RPI(s) are proposed for termination and disqualification in the state tracking system, noting the basis for the serious deficiency determination.
     
  3. The CDSS provides the notice of proposed termination and disqualification and supporting documentation to the FNS WRO.
     
  4. During this time period, the program operator may still submit a CAP that details the internal controls implemented to ensure that the serious deficiencies are fully and permanently corrected.
     
  5. If the CAP is acceptable, or if the program operator prevails in an appeal, the proposed termination and disqualification is rescinded and the serious deficiency determination for the program operator and the RPI(s) is temporarily deferred.

Termination and Disqualification

If the program operator fails to implement successful corrective action, when the time allotted for requesting an appeal expires, or when the appeal official upholds the CDSS’ proposed termination and disqualification action, the CDSS will terminate the program operator’s CACFP agreement and disqualify the program operator and the RPI(s).

  1. The CDSS sends an electronic notice of  termination and disqualification through Adobe Sign to the program operator’s email and any identified RPI’s email(s). The notice is considered received by the program operator or RPI(s) five days after being sent to the last known email address(es). The notice of termination and disqualification will specify:
    • That the program operator's CACFP agreement will be terminated on a specific date, and that the institution and the RPI(s) will be disqualified on a specific date.
  2. The CDSS records that the program operator and its RPI(s) are terminated and disqualified in the state tracking system, and the CACFP agreement is terminated. 
  3. The CDSS provides the notice of proposed termination and disqualification, the names and birth dates of the RPI(s), and the full amount of any determined debt associated with the program operator and/or the RPI(s), along with any additional supporting documentation to the FNS WRO.
  4. The FNS WRO uses the information provided by the CDSS to record the disqualified program and its RPI(s) on the NDL where they will stay for a minimum of seven years. If any debt is associated with the disqualification, the program operator and RPI(s) will stay on the NDL until the debt is repaid in full.

Removal from the National Disqualified List

The CACFP regulations require that a disqualified program operator or RPI remain on the NDL for seven years or until any outstanding debt is repaid, whichever is longer, unless the FNS in consultation with the CDSS determines that the serious deficiencies that led to a program operator’s or RPI’s placement on the list have been corrected. If the program operator corrects the serious deficiencies by removing the RPI from a position associated with the CACFP and all debts are paid, the CDSS may request the program operator be removed from the NDL, but the RPI would remain on the list for seven years. The RPI could be removed earlier if a CAP is approved, all debts are paid, and the CDSS receives approval for early removal from the USDA FNS.

The process to remove a program operator or RPI from the NDL is as follows:

The program operator sends an official request to the CDSS to be removed from the NDL. The request must include:

A detailed justification letter explaining the situation that led to being placed on the NDL. The request letter must also explain the corrective action plan which must include a list of all the original serious deficiencies and what actions were taken and implemented to fully and permanently correct all the serious deficiencies.
 
  1. If the CDSS supports the program operator’s request, the CDSS forwards the removal request letter and documents provided by the program operator to the FNS WRO. In addition to the program operator documents, the CDSS must include:
     
    • The original notice of serious deficiency
       
    • The original notice of proposed termination and disqualification
       
    • The original notice of final termination and disqualification
       
    • Any additional correspondence relating to the serious deficiency process for a particular program operator or RPI (such as a prior notice of successful corrective action/temporary deferment of the serious deficiency, information relating to the program operator’s debt, or information concerning the RPIs’ dates of birth)
       
    • A detailed explanation of the actions taken by the program operator or RPI to fully and permanently correct the serious deficiency, including but not limited to, the elimination of any outstanding debt
       
    • The documentation the CDSS used to decide to submit the removal request on behalf of the program operator
       
    • A statement which clearly stipulates whether the request is for removal of the:
       
    • Program operator
       
    • Program operator and all associated RPIs
       
    • Some or all of the RPIs, but not the program operator
       
  2. The FNS WRO reviews the documentation submitted by the CDSS to ensure that it is complete and provides sufficient information for the USDA FNS National Office to complete its review of the request. The FNS WRO must indicate why it supports or opposes the request.
     
  3. The USDA FNS National Office reviews the request and determines whether it agrees with the CDSS’ recommendation. The USDA FNS National Office notifies the FNS WRO of its decision. The effective date of the NDL removal is the date the USDA FNS National Office processes the removal request.

Debt Collection Associated with Terminated and Disqualified Agencies/Responsible Principals and/or Individuals

In accordance with federal regulations, program operators and RPIs will remain on the NDL until the debt, with all incurred interest, is repaid. Interest continues to accrue throughout the entire period the program operator and RPIs remain on the NDL.

For questions about the CACFP serious deficiency process, please send your email to CACFP.SD@dss.ca.gov.

This institution is an equal opportunity provider.
Esta institución es un proveedor que ofrece igualdad de oportunidades.