DAR File No. 41611

Workforce Services, Housing and Community Development

Rule R990-101

Qualified Emergency Food Agencies Fund (QEFAF)

Notice of Proposed Rule

(Amendment)

DAR File No.: 41611
Filed: 05/08/2017 03:35:13 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the amendment is to put into effect changes to the method of determining distributions from the Qualified Emergency Food Agencies Fund (QEFAF) in conjunction with recent amendments to the QEFAF authorizing statute (S.B. 224, from the 2017 General Session).

Summary of the rule or change:

Recent changes to the State Community Services Act have amended the method of determining distributions from QEFAF, which provides funding for food pantries and similar organizations. Specifically, the statutory changes eliminate the requirement that QEFAF reimbursements be tied directly to the number of pounds of food donated each year. The proposed changes described here provide a revised method of determining how QEFAF funds are to be distributed, clarify the reimbursement process and timelines, and make related technical changes.

Statutory or constitutional authorization for this rule:

• Subsection 35A-8-1009(7)

Anticipated cost or savings to:

the state budget:

There are no costs or savings to the state budget because the changes do not affect the QEFAF funding levels set by the Legislature.

local governments:

There are no costs or savings to local governments because the changes do not affect the QEFAF funding levels set by the Legislature, and because the changes use existing funding levels as the baseline for funding distributions.

small businesses:

There will be no costs to small businesses to comply with these changes because the changes do not affect the QEFAF funding levels set by the Legislature, and because small businesses do not receive QEFAF funding, per statute.

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

There will be no costs to persons other than small businesses, businesses, or local government entities to comply with these changes because there are no costs or fees associated with these proposed changes, and because the changes do not affect the QEFAF funding levels set by the Legislature.

Compliance costs for affected persons:

There are no compliance costs for this change to anyone, including affected persons, because the proposed changes do not affect the compliance responsibilities of qualified agencies receiving QEFAF funds.

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

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business.

Jon Pierpont, Executive Director

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

Workforce Services
Housing and Community Development
140 E BROADWAY
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Nathan White at the above address, by phone at 801-526-9647, by FAX at , 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:

07/03/2017

This rule may become effective on:

07/10/2017

Authorized by:

Jon Pierpont, Executive Director

R990. Workforce Services, Housing and Community Development.

R990-101. Qualified Emergency Food Agencies Fund (QEFAF).

R990-101-1. Designation as a Qualified Emergency Food Fund Agency.

(1) A qualified emergency food agency, hereinafter referred to as Qualified 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 or a municipality 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.

(2) For initial designation as a Qualified Agency, an organization must file an application with, and must be approved by, the State Community Services Office (SCSO) before receiving distributions under Utah Code Section 35A-8-1009. The application form and instructions are available on the SCSO Website at http://housing.utah.gov/scso/qefaf.

(3) After initial designation as a Qualified 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 or a municipality must continue to operate a program which has, as the program's primary purpose , to warehouse and distribute food to other agencies and organizations providing food and food ingredients to low-income persons ,[;] or provide food and food ingredients directly to low-income persons.

(4) All entities applying to be designated as a Qualified Agency must submit a list of current members of the entity's[its] Board of Directors 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 Qualified Agency's Memorandum of Understanding each year.

 

R990-101-2. Use of Funds.

Funds received from the QEFAF program must be expended by the Qualified Agency only for purposes related to warehousing and distributing food and food ingredients to other agencies and organizations providing food and food ingredients to low-income persons, or providing food and food ingredients directly to low-income persons.

 

R990-101-3. Allowable Expenditures.

(1) 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.

(2) 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.

(3) 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.

(4) Direct staff costs [-]-- [is defined as ]S[s]alaries 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 are allowable only to the extent the staff are engaged in the activities described in this section and must be supported by time and activity reports.

[(5) 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.]

( 5[6]) Administrative e[E]xpenditures - QEFAF funds expended by a Qualifying Agency for administrative costs shall not exceed 5% of the total distributions received by that Qualifying Agency 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.]

 

R990-101-4. 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 as provided in R990-101-3( 5[6]), 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. Expenditures not specifically listed in R990-101-3 are not allowed.

 

R990-101-5. Submission of Claims.

(1) A Qualified Agency may [can]not submit more than one claim per month. Claims must be submitted online using the Web Grants system at the following website address: http://www.webgrants.community.utah.gov

(2) QEFAF funds expended prior to the end of the fiscal year but not reimbursed as of the end of the fiscal year may be submitted as claims within a reasonable time after the fiscal year ends.[Claims must be based on the number of eligible pounds of food donated to Qualified Agency during the state fiscal year valued at the rate of $0.12 per pound.]

 

R990-101-6. Determination of Funding Amounts; Needs Assessment; Discretionary Funds. [ Limited Funds Available. ]

(1) For purposes of this section, the following definitions apply:

(a) "Available appropriation amount" means eighty percent (80%) of the total QEFAF funds appropriated to SCSO for a given fiscal year.

(b) "Designated amount" means the amount of QEFAF funds designated to be available for a Qualified Agency in a given fiscal year, without taking into account the award of any discretionary funds. Designated amounts shall be calculated as follows:

(i) For existing Qualified Agencies:

(A) For fiscal years 2018, 2019, and 2020, by calculating the yearly average of the amount of QEFAF funds allowed to the Qualified Agency over the preceding four (4) fiscal years, or if the Qualified Agency has been designated as a Qualified Agency for a shorter period of time, by calculating the yearly average of the amount of QEFAF funds allowed to the Qualified Agency during the period since it was designated as a Qualified Agency;

(B) For all subsequent fiscal years, as determined by SCSO in its discretion and in consultation with a needs assessment as described in Subsection (3);

(ii) For new Qualified Agencies, as determined by SCSO in its discretion and in consultation with a needs assessment as described in Subsection (3), or if no needs assessment has been completed, as determined by SCSO in its discretion after taking into account:

(A) The needs of the Qualified Agency;

(B) SCSO's available funding;

(C) The Qualified Agency's other sources of funding;

(D) The needs of the community being served by the Qualified Agency;

(E) Any other relevant factors.

(c) "Discretionary funds" means any QEFAF funds which are not included in the available appropriation amount, or which are returned or recouped from a Qualified Agency under Section R990-101-9.

(2) Each Qualified Agency may submit claims under Section R990-101-5 up to the Qualified Agency's designated amount in each fiscal year. The sum total of all claims submitted by all Qualified Agencies shall not exceed the available appropriation amount. If the available appropriation amount is insufficient to fund all the Qualified Agencies in their designated amounts, the funding for each Qualified Agency shall be reduced on a pro rata basis relative to the available appropriation amount.

(3) SCSO shall conduct, or cause to be conducted, a needs assessment for use in determining the designated amounts for existing and new Qualified Agencies as described in Subsection (2) above. Following the initial needs assessment, SCSO may conduct, or cause to be conducted, updated needs assessments at its discretion.

(4) Each Qualified Agency shall cooperate with any requests for information, inspection, or other review of the Qualified Agency's activities made in conjunction with developing a needs assessment. The results of each needs assessment shall be made available to the Qualified Agencies.

(5) A Qualified Agency may submit a request for discretionary funds through the process described in Section R990-109-5. Discretionary funds are limited, and no Qualified Agency has any entitlement to receive discretionary funds for any purpose.

(6) SCSO shall evaluate requests for discretionary funds based on the factors described in Subsection (1)(b)(ii).

[Funds available under the QEFAF program are limited. In the event funds deposited into the QEFAF are insufficient to meet the claims for distribution received, the SCSO will make distributions to Qualified Agencies in the order in which the claims are received by SCSO. The time of submission, as recorded in the Web Grants system, will be used to determine the order in which claims are received by SCSO.]

 

[R990-101-7. Eligible Pounds.

(1) Eligible pounds means the aggregate number of pounds of food and food ingredients, as defined in Utah Code Section 59-12-102 that are donated to the Qualified Agency during the fiscal year and for which Utah sales or use tax was paid by the person donating the food or food ingredients.

(2) Eligible pounds cannot be carried over to a succeeding fiscal year.

(3) Food or food ingredients procured through corporate donations, the grocery rescue program, or directly from the manufacturer are not eligible poundage for the QEFAF program.

(4) Produce donated from home gardeners, commercial gardeners and gardening programs, as well as meat, poultry, eggs and other food and food ingredients donated by farmers, ranchers and others, are not eligible poundage for the QEFAF program.

(5) Once eligible poundage of food and food ingredients has been reported by one Qualified Agency, poundage shared with other community partners cannot be claimed a second time.

(6) It is the responsibility of the Qualified Agency to know and properly document the source of all donated poundage claimed.]

 

R990-101- 7[8]. Recordkeeping Requirements.

Each Qualified Agency must maintain;

(1) receipts and other original records for donations of food and food ingredients, including schedules and work papers supporting claims made under the OEFAF program for a period of five years following the date of the claim,

(2) 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 Section 35A-8-1009 and R990-101-2, and

(3) 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 claim.

 

R990-101-8[9]. Monitoring.

SCSO will monitor Qualified Agency claims and may conduct one or more site visits to inspect records supporting the claims being made[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 35A-8-1009(8) and rule R990-101-3. The Qualified Agency agrees to provide all information requested by SCSO in performing this monitoring responsibility and will make such records available, upon reasonable notice, for said monitoring.

 

R990-101-9[10]. Return of Unused Funds; Overpayment Recoupment.

(1) If a Qualified Agency does not use all the QEFAF funds it receives in the same fiscal year in which those funds are awarded, the unused funds shall be returned to SCSO at the conclusion of the fiscal year.[Amounts to a 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 must be immediately returned to the State.]

(2) Expenditures of QEFAF funds determined by audit to be unallowable because the funds were used for purposes not specified above under R990-101-2 or expenditures which are not supported by adequate source documentation shall be;

([a]) immediately returned to SCSO[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 purposes specified in R990-101-2 and R990-101-3.

 

R990-101-10[11]. Training and Technical Assistance.

SCSO agrees to provide training and technical assistance to a Qualified Agency for help in accessing and submitting a claim online using the Web Grants system. The 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: [July 1, 2013]2017

Authorizing, and Implemented or Interpreted Law: 35A-8-1004