Community and Culture, Housing and Community Development, Community Services

Rule R202-101

Qualified Emergency Food Agencies Fund (QEFAF)

Notice of Proposed Rule

(New Rule)

DAR File No.: 33252
Filed: 12/08/2009 08:02:20 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the rule is to clarify allowable and non-allowable expenses under the Qualified Emergency Food Agencies Fund (QEFAF) program.

Summary of the rule or change:

Rules and regulations of allowable and non-allowable expenditures for the QEFAF program.

State statutory or constitutional authorization for this rule:

• Section 9-4-1409

Anticipated cost or savings to:

the state budget:

The proposed rule is meant to clarify the statute and provide greater understanding on the use of QEFAF funds. The proposed rule will not create any additional compliance requirements, as such the proposed rule will not cause any cost to the state budget. No savings are anticipated either, as the proposed rule simply clarifies the use of funds appropriated for the QEFAF program.

local governments:

Associations of local government may qualify for the QEFAF program. The proposed rule simply provides clarification of the existing statute. As such, the proposed rule does not require any additional requirements for local government and will not result in an increased cost. The proposed rule does clarify how the funds may be used but this is not expected to create any savings to local government as the funds are limited to storing, distributing, or directly providing food to low-income persons.

small businesses:

No costs or savings are expected to small businesses. In order to qualify for the QEFAF program, the agency must be a 501(c)(3), or an association of governments which operates a program to store, distribute, or directly provide food to low-income persons. Small businesses pay federal taxes and are not classified as a 501(c)(3), nor are they an association of governments, therefore they cannot qualify for the QEFAF program.

persons other than small businesses, businesses, or local governmental entities:

In order to qualify for the QEFAF program, the agency must be a 501(c)(3) or an association of governments which operates a program to store, distribute, or directly provide food to low-income persons. The proposed rule will only provide qualified agencies with clarification on the use of QEFAF funds.

Compliance costs for affected persons:

The proposed rule will not create any compliance costs, it is meant to provide clarification on how QEFAF funds may be used. Agencies are currently complying with statute for the QEFAF program, the proposed rule simply provides great direction and clarification on the use of QEFAF funds.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will pose no fiscal impact.

Palmer DePaulis, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Community and Culture
Housing and Community Development, Community Services
324 S STATE ST
SALT LAKE CITY, UT 84111-2388

Direct questions regarding this rule to:

• Jonathan Hardy at the above address, by phone at 801-538-8650, by FAX at 801-538-8888, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/01/2010

This rule may become effective on:

02/08/2010

Authorized by:

Palmer DePaulis, Executive Director

R202. Community and Culture, Housing and Community Development, Community Services.

R202-101. Qualified Emergency Food Agencies Fund (QEFAF).

R202-101-1. Designation as a Qualified Emergency Food Fund Agency.

A. A qualified emergency food agency is an organization that is: a) exempt from federal income taxation under Section 501(c)(3), Internal Revenue Code; or b) an association of governments which, as part of its activities operates a program that has as the program's primary purpose to i) warehouse and distribute food to other agencies and organizations providing food and food ingredients to low-income persons; or ii) provide food and food ingredients directly to low-income persons. For initial designation, an organization shall file an application with the State Community Services Office (SCSO) and must be approved as a qualified emergency food agency before receiving distributions under Utah Code Section 9-4-1409. The application form and instructions are available on the SCSO Website at http://housing.utah.gov/scso/qefaf.html

B. After initial designation as a qualified emergency food agency, a non-profit 501(c)(3) organization must maintain a current Charitable Solicitations Permit issued by the Utah Department of Commerce, Division of Consumer Protection per Utah Code Section 13-22-6 or be exempt under Utah Code Section 13-22-8. An association of governments must continue to operate a program which has, as the program's primary purpose to i) warehouse and distribute food to other agencies and organizations providing food and food ingredients to low-income persons; or ii) provide food and food ingredients directly to low-income persons.

C. All organizations shall submit a current Board Roster and contact information for the individual primarily responsible for maintaining the organization's financial records. This information should be submitted with the signed copies of the Memorandum of Understanding each year.

 

R202-101-2. Use of Funds.

Funds received from the Qualified Emergency Food Agency Fund must be expended by the Qualified Agency only for purposes related to: a) warehousing and distributing food and food ingredients to other agencies and organizations providing food and food ingredients to low-income persons; or b) providing food and food ingredients directly to low-income persons.

 

R202-101-3. Allowable Expenditures.

A. Warehousing - Expenditures directly related to receiving, sorting, weighing, handling, and storing of food and food ingredients, including direct staff costs for warehousing activities, scales, fork lifts, pallet jacks, shelving, refrigeration equipment, supplies for food storage, and space costs associated with the warehousing activity such as utilities, insurance, cleaning supplies, pest control, and minor repairs and maintenance.

B. Distributing - Expenditures directly related to packaging and transporting food and food ingredients to other agencies and organizations which provide food and food ingredients to qualified low-income individuals and households, including direct staff costs, transportation equipment costs such as refrigeration units, insurance on vehicles used exclusively to pick up and drop off food and food ingredients, fuel, licensing, repairs and maintenance.

C. Providing - Expenditures directly related to providing food and food ingredients directly to low-income individuals and households, including direct staff costs for client intake, case management, meal preparation and/or delivery of meals to home-bound clients or congregate meal sites; operational expenditures, including telephones, computer systems used to track client eligibility, food intake and distribution; staff and volunteer training costs such as food safety training; food handler's permits; and other direct costs which are reasonable and necessary.

D. Direct staff costs - is defined as salaries and wages, employer's payroll taxes, and fringe benefits for staff directly involved in collecting, transporting, receiving, weighing, sorting, handling, and packaging food and food ingredients; dispensing food and food ingredients directly to eligible clients; preparing, serving and/or delivering meals to eligible clients; and providing case management services directly to eligible food bank clients. Personnel costs for staff who also work in non-QEFAF supported activities must be supported by time and activity reports.

E. Food and food ingredients - reasonable and necessary purchases of food and food ingredients that are warehoused, distributed, and/or provided directly to eligible low-income individuals and households is allowable.

F. Administrative Expenditures - QEFAF funds expended for administrative costs shall not exceed 5% of the total distributions received under the QEFAF program for any fiscal year. Any QEFAF funds unexpended as of the end of Qualifying Agency's fiscal year should be clearly identified and treated as temporarily restricted funds.

 

R202-101-4. Non-Allowable Expenditures.

Expenditures that do not directly pertain to warehousing, distributing, or providing food and food ingredients to low-income persons, other than the maximum 5% administrative costs mentioned above, are not allowed. Specifically, expenditures associated with soliciting or promoting cash or food donations, recognizing donors and volunteers, and transportation costs other than picking up and delivering food and food ingredients are not allowed. Any other expenditure not specifically listed under the sections above not allowed.

 

R202-101-5. Submission of Claims.

A. Claims shall be submitted no more frequent than monthly. Claims must be submitted by the Qualified Agency online using the Web Grants system at the following website address: http://www.webgrants.community.utah.gov

B. Claims shall be based on the eligible pounds of food donated to Qualified Agency during the fiscal year beginning July 1, 2009 and ending June 30, 2010 valued at the rate of $0.12 per pound.

 

R202-101-6. Limited Funds Available.

Funds available under the Qualified Emergency Food Agency Fund are limited. In the event funds deposited into the Qualified Emergency Food Agency Fund are insufficient to meet the claims for distribution received, the State Community Services Office (SCSO) shall make distributions to Qualified Agencies in the order that SCSO receives the claims. The time submitted as recorded in the Web Grants system shall be used to determine the order in which claims are received by SCSO.

 

R202-101-7. Eligible Pounds.

Eligible pounds shall mean the aggregate number of pounds of food and food ingredients, as defined in Utah Code Section 59-12-102 that are a) donated to Qualified Agency on or after July 1, 2009; and b) for which Utah sales or use tax was paid by the person donating the food or food ingredients.

 

R202-101-8. Recordkeeping Requirements.

A. Qualified Agency agrees to maintain receipts and other original records for donations of food and food ingredients, including schedules and work papers supporting claims made under the Qualified Emergency Food Agency Fund program. Such records must be maintained for a period of three years following the date of the last refund for fiscal year ending June 30, 2010.

B. Qualified Agency agrees to maintain a financial management system that provides accurate, current, and complete disclosure of the receipt and disbursements of all QEFAF funds, including accounting records that are supported by source documentation sufficient to determine that QEFAF funds were expended only for purposes as stated in Utah Code 9-4-1409 and the Use of Funds section above.

C. Qualified Agency agrees to maintain effective control and accountability for all QEFAF funds and all property, equipment, and other assets acquired with QEFAF funds. Qualified Agency agrees to adequately safeguard all such assets and assure they are used solely for authorized purposes. Such records must be maintained by Qualified Agency for a period of five years following the date of the last refund for fiscal year ending June 30, 2010.

 

R202-101-9. Monitoring.

SCSO will monitor Qualified Agency's claims and may conduct one or more site visits to inspect records supporting the pounds of food and food ingredients claimed. SCSO may also review financial records to determine that distributions received are expended in accordance with Utah Code Section 9-4-1409(8). Qualified Agency agrees to provide all information needed by SCSO in performing this monitoring responsibility and will make such records available, upon reasonable notice, for said monitoring.

 

R202-101-10. Overpayment Recoupment.

A. Amounts claimed by Qualified Agency under this agreement that are determined by audit to be ineligible for reimbursement because a) such claims were based on ineligible food or food ingredient donations; or b) lack of adequate documentation to support the total poundage of food or food ingredient donations claimed shall be immediately returned to the State.

B. Expenditures of QEFAF funds determined by audit to be unallowable because 1) funds were used for purposes not specified above under Use of Funds; or 2) expenditures not supported by adequate source documentation shall be a) immediately returned to the State; or b) properly segregated in the Qualified Agency's accounting records and identified as temporarily restricted until such time as those funds are used for the purposed specified under Use of Funds above.

 

R202-101-11. Training and Technical Assistance.

SCSO agrees to provide training and technical assistance to Qualified Agency in regards to accessing and submitting a claim online using the Web Grants system. Qualified Agency is responsible for ensuring that its staff receives such training and assistance.

 

KEY: Qualified Emergency Food Agencies Fund, QEFAF, antipoverty programs, community action programs

Date of Enactment or Last Substantive Amendment: January 8, 2010

Authorizing, and Implemented or Interpreted Law: 9-4-1409