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.1 Basic Issuance Requirements
.11 Delivery of Benefits
Each CWD is responsible for the timely and accurate issuance of benefits to certified eligible households as specified in these regulations. Households comprised of elderly or disabled members who have difficulty reaching an issuance office to obtain their coupon allotments, and households which do not reside in a permanent dwelling or at a fixed mailing address, shall be given assistance in obtaining their benefits. CWDs shall assist these households by arranging for mail issuance of benefits to them; by assisting the households in finding authorized representatives who can act on their behalf; or by using other appropriate means to assure delivery of benefits.
.12 The CWD shall be required to obtain fingerprint images and a photo image of each eligible household member using SFIS equipment, as specified in Section 63-505.14, unless that member meets one or more of the following exemptions.
.121 A household member who has no fingers shall be exempt from the fingerprint image portion of the SFIS process. However, they are still required to participate in the photo image portion of the SFIS process.
.122 A household member who has a medically verified physical condition which renders them unable to comply with SFIS requirements.
.123 A household member who is under the age of 18, unless she/he is applying for Food Stamps as his/her own household, as specified in Section 63-505.141.
.124 Renumbered to Section 63-300.451.
.13 The CWD shall determine on a case-by-case basis when a household member will receive a postponement from the SFIS process. The conditions for a postponement include but are not limited to:
.131 A temporary medical condition that prevents a household member from complying with SFIS requirements for up to 60 days, for example hands that are bandaged due to burns.
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MANUAL LETTER NO. FS-08-02 Effective 7/15/08
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63-601 (Cont.) COUPON ISSUANCE, USE AND REPLACEMENT Regulations
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.132 A household member is a resident of a drug or alcohol treatment and rehabilitation center who is unable to leave that center for physical, mental, or legal reasons. When the resident is unable to comply with SFIS, his/her authorized representative will be required to comply on their behalf. However, that household member will be required to comply with SFIS upon a change in their status within the center which would allow them to come to the CWD, or if they are in the CWD office for another reason.
.133 A household member who is required to participate in the SFIS process and attempts to do so, but is unable to, due to an SFIS equipment problem. The household member shall temporarily receive benefits, and shall be informed that she/he must fulfill the requirements within 60 calendar days.
.134 The household is entitled to expedited service, and the SFIS is incapable of completing the SFIS process in time for the household to participate, as specified in Section 63-301.5. SFIS compliance should occur prior to the issuance of the household's next allotment.
.14 Authorized representatives are not required to comply with SFIS requirements, unless no household member in the household which they represent is required or able to comply with SFIS requirements, or as required at Section 63-601.132.
.15 Issuance and Accountability Systems
The CWD shall establish an issuance and accountability system which will ensure that:
.151 Only certified eligible households receive benefits;
.152 Program benefits are timely distributed in the correct amounts;
.153 Coupons are accepted, stored and protected with due security after delivery to receiving points within the county; and
.154 Coupon issuance and reconciliation activities are properly conducted and accurately reported to FNS.
.2 County Welfare Department (Delegation of Food Coupon Issuance) (See the implementation schedule set forth in Section 63-019.)
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MANUAL LETTER NO. FS-98-03 Effective 7/1/98
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.21 Delegation Guidelines - General: The issuance and storage of food coupons may be handled by the CWD itself, or by another county department through an intracounty agreement. The CWD may also contract with public, private profit, or private nonprofit entities as agents for the issuance and storage of food coupons. Such contracts shall be made only with responsible contractors who possess the ability to perform successfully under the terms and conditions of the proposed contract. The CWD or its contractors may issue coupons using the methods in Section 63-602. All procurements of issuance/storage contracts shall be conducted in accordance with the requirements of Section 63-601, CWD Responsibilities, and Chapter 23-600, Purchase of Service. Section 63-601 shall supersede Chapter 23-600 in any and all areas where the two sets of requirements differ.
.211 Retail Food Stores
The CWD shall not enter into an issuance/storage agent contract with a retail food firm unless the CWD provides evidence to SDSS that such an arrangement is needed to maintain or increase the efficient and effective operation of the Food Stamp Program.
(a) Coupons may be issued inside a retail food store if the issuance is performed by a bank, credit union, or other financial organization independent of the retail store.
(b) Coupons may be issued on-site by a retail store under the following conditions:
(1) The CWD can document that there will be a hardship, not just an inconvenience, to recipients if the retail store is not permitted to issue coupons on-site; or
(2) In the absence of hardship documentation, a retail food firm may perform issuance activities as a subcontractor to a bank, credit union, or other independent financial organization, if there is strict oversight by the financial organization.
.212 CWD Responsibility for Issuance/Storage Activities
The CWD retains final responsibility for food coupon issuance/storage and is liable for the activity of its contracted issuance/storage agents. In addition, the CWD is strictly liable for all losses of coupons, which occur prior to depositing the coupons with the postal service, even if those losses are the result of the performance of issuance, security, or accountability duties by another party. Section 63-603.17 establishes the parameters of county liability for coupons lost after they are deposited with the U.S. Postal Service.
.22 Procurement of Issuance/Storage Contracts
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MANUAL LETTER NO. FS-98-03 Effective 7/1/98
Page 380.1
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.221 Open and Free Competition
All issuance/storage contract procurements shall be conducted in a manner which maximizes open and free competition in accordance with Section 23-602, Code of Conduct.
.222 Competitive Bidding Procurements
Issuance/storage services which are not performed by the CWD or another public agency must be procured through the competitive bidding process (see Section 63-601.23), except as indicated in .223 and .224 below. The competitive bidding process shall be used to acquire an issuance/storage contractor whenever an existing contract expires or is terminated, or to effect a major contractual change.
.223 United States Postal Services (USPS) Contracts
Contracts with USPS are not procured through the competitive bidding process. Terms of the USPS contracts are contained in an agreement between the United States Department of Agriculture (USDA) and the USPS; however, the CWD may negotiate with USPS on terms and conditions which do not conflict with the provisions specified in the USDA/USPS agreement.
.224 Negotiated Procurements
Under certain circumstances, the competitive bidding process may be waived and the negotiation process used instead. The provisions of Section 23-650, Procurement by Negotiation, establish the procedures and circumstances under which the CWD may use negotiated procurements.
.225 Procurement Records
At a minimum, the CWD shall maintain the following in the procurement files: the contract, and information justifying the procurement method used, the basis for the contract selection or rejection and the basis for the transaction fee. These records shall be maintained for three (3) years after the CWD makes the final payment or until all other pending matters pertaining to this contract are closed, whichever is later.
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MANUAL LETTER NO. FS-98-03 Effective 7/1/98
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63-601 (Cont.) COUPON ISSUANCE, USE AND REPLACEMENT Regulations
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.23 Competitive Bidding Process
The competitive bidding process includes, but is not limited to, advertising, invitations for Bid (IFB), as defined by Section 23-601.22 or Request for Proposal (RFP), as defined by Section 23-601.23, sealed bids, public opening of sealed bids, and selection of the most satisfactory bidder. CWDs desiring to use the RFP process shall comply with Sections 23-610(b) and (c). The CWD shall ensure that a new contract is operative as an existing contract expires so as to maintain service to participants without interruption. Prior to expiration, if a CWD elects not to continue contracting for issuance/storage services, the CWD shall ensure that coupon issuance/storage is provided so that services are not discontinued (refer to Section 63-601.264).
.231 Advertising of Contract Procurement
The CWD shall utilize advertising mechanisms via mass media to provide potential bidders with a notice of CWD's intent to request bids, in accordance with Section 23-610(f). The notice of intent shall include a statement of the CWD's intent, a description of the services to be performed, and a description of the bidding procedure. Additionally, the CWD shall solicit bids from an adequate number of qualified sources.
.232 Invitation for Bid (IFB) or Request for Proposal (RFP)
(a) The IFB or RFP shall include all applicable information required by Section 23-610(d) plus:
(1) A request for verification of bidder's insurance coverage (see Section 63-601.3);
(2) The duration of the contract (refer to Section 63-601.242);
(3) An accurate description of the services to be performed and the specific procedures which must be observed in handling the issuance, reporting, and accounting of food coupons;
(4) The method of payment or reimbursement (see Section 63-601.243); and
(5) Instructions for bidders to sign completed bids.
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
(b) IFBs and RFPs do not require the prior approval of SDSS.
(c) Amendments or corrections to IFB/RFP shall be made in accordance with Section 23-610(g).
.233 Review and Selection Process
(a) Review Criteria
The CWD shall develop criteria for reviewing and evaluating IFBs and RFPs. At a minimum, the criteria shall determine contractor integrity, fiscal responsibility, record of past performance, and financial and technical resources.
(b) Bid Openings
All bids shall be publicly opened in accordance with Sections 23-612.1-.6.
(c) Evaluation of Bids
Upon receipt and opening of all bids, the CWD shall review and evaluate the bids utilizing the established criteria (see (a) above).
(d) Contract Award
The CWD shall award the contract in accordance with the provisions of Section 23-620.
.234 Rejection of Bids
(a) The CWD shall reject bids or proposals in accordance with the provisions of Section 23-615.
.235 Late Bids
The CWD shall comply with the procedures required by Sections 23-611.14 and .15 for handling late bids.
.236 Protests
The CWD shall handle complaints and protests in accordance with the provisions of Section 23-624.
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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63-601 (Cont.) COUPON ISSUANCE, USE AND REPLACEMENT Regulations
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.24 Issuance/Storage Contract Requirements
.241 Contract Provisions
All issuance/storage contracts must:
(a) Meet all of the requirements of MPP Chapter 23-600, Purchase of Services.
(b) Contain specific provisions setting forth the duties and responsibilities, as set forth in MPP Chapters 63-600 and 63-700 of the issuance/storage agent including any duties or responsibilities required of the CWD by those regulations but delegated by the CWD to the issuance/storage agent.
(c) Provide that the issuance/storage agent will comply with all state and federal statutes, regulations, and instructions applicable to the Food Stamp Program.
.242 Contract Duration
Except USPS contracts, for which there is no time limitation, all issuance/storage contracts shall contain a specified duration period determined by the county. Each contract shall contain an effective date and a termination date. The contract duration period may be extended one time only for a maximum one-year period.
.243 Transaction Fee
(a) Issuance/storage contracts shall specify a fee per transaction for all services provided under the contractual agreement.
(b) Contracts which exceed one year in duration (see Section 63-601.242) may include a provision allowing for an adjustment in the transaction fee on an annual basis in accordance with Section 23-621.16. Such an adjustment shall be specified in the IFB/RFP and the contract.
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.244 Contract Amendments
(a) Changes Requiring Competitive Bid
Amendments to contracts which result in a major change shall not be allowed without re-bidding. Major changes shall include but not be limited to the following:
(1) An increase in the transaction fee except for annual rate adjustments which are provided for in the original contract under Section 63-601.243;
(2) A decrease in issuance/storage services;
(3) A change in the type of issuance/storage system, unless SDSS has determined that the proposed change is not in fact a major change;
(4) An addition of a new geographical service area;
(5) A deletion of any issuance site
(b) Amendment Process
Competitive bidding is not required for amendments to existing contracts which do not result in major changes.
.25 Reporting and Shipping Codes
Prior to contract implementation the CWD shall contact FNS and obtain reporting and/or shipping code(s) for the issuance agent/bulk storage point.
.26 CWD Contracts with Issuance Agents/Bulk Storage Points Close-out procedures.
The Close-out procedures shall be met whenever all or any part of an issuance agent's or bulk storage point's operations are to be terminated.
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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63-601 (Cont.) COUPON ISSUANCE, USE AND REPLACEMENT Regulations
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.261 Notification of Planned Closure
Wherever it becomes known by the CWD that any contract issuance agent or bulk storage point will terminate all or any part of its food stamp issuance/storage operations, the CWD shall immediately notify SDSS of the planned closure. The CWD shall also inform FNS of the planned closure.
.262 During the period of time between the notification of termination and the agent's actual discontinuance of issuance/storage activity, the CWD shall make a determination regarding the final disposition of the agent's coupon inventory. At the time of the transfer of coupon inventory to another coupon issuer or bulk storage point, the CWD shall perform an actual physical count of coupons on hand. Coupons shall be disposed of in the following ways:
(a) Self-issuance counties - Those counties that maintain coupon inventories for issuance/storage by the CWD shall transfer the terminating agent's coupon inventory to the CWD's inventory on, or before, the termination date of the agent's contract.
(b) Noncounty Issuance - CWDs which do not themselves maintain an inventory of food coupons shall use the following methods to dispose of the closing agent's coupon inventory:
(1) Interagent Transfer - CWDs may transfer a closing agent's inventory to one or more contract issuance/storage agents operating within their county. The agents receiving the coupons shall be contacted prior to such transfer. The agent shall maintain sufficient insurance coverage to accommodate the increased inventory as required by Section 63-601.31.
(2) Intercounty Transfers - In cases where the CWD cannot transfer the closing agent's coupon inventory to another agent(s) operating within the county, the CWD shall contact other CWDs in its immediate geographic area in order to determine whether the coupons can be transferred to another CWD.
(3) When the CWD is unable to dispose of the closing agent's coupon inventory through either interagent or intercounty transfer, the CWD shall assume the storage and reporting responsibility as a temporary bulk storage point for these coupons.
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
(4) Reporting requirements - The final FNS-250 which is submitted by the agent to the CWD shall show the transfer of all inventory and a zero ending inventory. Proper documentation of coupon transfer FNS-300 or its USPS equivalent shall accompany the FNS-250. The CWD, upon receipt of the final FNS-250, shall verify the accuracy of the report and transmit it to FNS with a copy to CDSS.
.263 Close-Out Audit
Once closure of the agency has taken place, the CWD shall arrange for a close-out audit to be performed within 30 days of the termination date. Copies of the report of audit findings shall be submitted to CDSS and to FNS immediately upon completion. If the audit determines that the final FNS 250 is incorrect, the CWD shall promptly provide a corrected report to CDSS and FNS.
.264 Maintenance of Participant Service
(a) At least 30 days before actual termination of a coupon issuance contract, the CWD shall notify program participants of the impending closure of the issuance site. Notification shall include identification of alternative issuance locations and available public transportation. The CWD shall post notices at the offices of the coupon issuer of the impending closure and may use mass media or ATP stuffers to advise participants about the expected closure of the issuance office.
(b) Whenever an issuance facility is closed, the CWD shall take the appropriate action to maintain participant service without interruption.
(c) If a coupon issuance agency or bulk storage point is to be closed for noncompliance with contractual requirements and alternative issuance facilities or systems are not readily available, the CWD may continue to use the coupon issuance agency or bulk storage point for a limited time. In these situations, the CWD shall perform weekly onsite reconciliations of coupon issuance. The CWD shall continue to actively seek other issuance or storage alternatives.
.27 CWD Monitoring of Issuance Agents
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MANUAL LETTER NO. FS-94-02 Effective 2/1/94
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Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-601 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.271 CWD Monitoring Responsibility - Issuance Agent/Bulk Storage Points
The CWDs shall have procedures for monitoring coupon issuers/bulk storage point, including their own operation if they are selfissuers, to assure that their day-to-day operations comply with these regulations, and to identify and correct deficiencies and violations of program requirements.
.272 Onsite Audits
(a) The CWD shall have a financial and compliance onsite audit of each coupon issuance agency and bulk storage point conducted at least once a year. All offices or units of a coupon issuer/bulk storage point are subject to this audit requirement. The CWD audit shall be based on the specific activities performed by each coupon issuer or bulk storage point. A physical inventory of coupons shall be taken at each location and that count compared with perpetual inventory records and the monthly reports of the coupon issuer or bulk storage point.
(b) The annual financial and compliance onsite audit conducted at each coupon issuance agency and bulk storage point shall include, but not be limited to, the following audit requirements and responsibilities:
(1) Percentage of expired and/or altered ATPs that were cashed.
(2) Percentage of duplicate ATPs that were cashed, as well as the original ATP (CWD only).
(3) Internal control system:
(A) Access to work area
(B) Reconciliation process
(C) Separation of duties
(4) Hours of operation
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MANUAL LETTER NO. FS-90-01 Issued 7/1/90
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63-601 (Cont.) COUPON ISSUANCE, USE AND REPLACEMENT Regulations
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
(5) Food coupon replacement system
(A) Centrally (onsite)
(B) Locally (nearby) "replacement" office
(6) Security system
(7) Recorded inventory versus actual amount on hand
(8) The process for handling partial/defective coupons
(9) The process for destroying coupons
(10) The record keeping system
(11) Comparison of the number of food coupons issued as recorded by the issuance/storage site to the contract cost.
(c) The CWD is responsible for the required audit. The CWD may have the audit performed by another unit of county government or contract with an independent certified public accountant. CWDs may use the results of audits of coupon issuance/storage agency by independent audit or accounting firms so long as the food coupon issuance/storage operations of the agent are included in the audit. Except in unusual circumstances, the Postal Inspection Service will conduct onsite audits of post office issuance operations.
.3 Security Guidelines for Non-Bank Issuing Agencies
In accordance with its state-delegated responsibilities, the CWD is financially liable for all food coupons distributed to it and its agents and is responsible for insuring that adequate storage facilities are provided for the coupons.
Maximum security is provided by bank storage of the bulk supply with a working supply of coupons being transferred to and from the issuance office by armored car services on a daily basis. If banks are not available for storage, the bulk supply of coupons shall be kept in a courthouse vault or other facility with bank-type security. If working supplies of coupons must be stored in the issuance office overnight, this supply shall be limited to a one- or two-day supply and strict security measures shall be instituted at the office.
CALIFORNIA-DSS-MANUAL-FS
MANUAL LETTER NO. FS-90-01 Issued 7/1/90
Page 389
FOOD STAMP REGULATIONS
Regulations COUPON ISSUANCE, USE AND REPLACEMENT 63-602 (Cont.)
63-601 COUNTY WELFARE DEPARTMENT RESPONSIBILITIES (Continued) 63-601
.31 Personnel Bonding and Insurance Coverage
All personnel connected with the handling of coupons shall be bonded (with the exception of United States Postal Service employees) and sufficient insurance shall be carried to cover any loss of coupons.
.4 Repealed by Manual Letter No. FS-91-03, effective 3/1/91.
NOTE: Authority cited: Sections 10554 and 18904, Welfare and Institutions Code. Reference: 7 CFR 272.4(f); 7 CFR 274.1; 7 CFR 274.2; 7 CFR 274.7; Food and Consumer Services Administrative Notice 96-13, dated December 7, 1995; and Sections 10554 and 18904, Welfare and Institutions Code.