08 VENDOR PROGRAM VIOLATIONS

(1) The Department may take actions such as disqualification, civil money penalties (CMP) in lieu of disqualification and claims, for Program violations and non-compliance with the WIC Vendor Agreement as described in this section. The vendor shall be given the opportunity to appeal any adverse action following procedures in 1200-15-2-.10. (2) The vendor is responsible for its owners, officers, managers, agents, and employees who commit vendor violations. (3) The vendor shall make inventory and other required records and all vouchers on hand available upon request of the Department. (4) The WIC Vendor Agreement will be terminated, if the Department identifies a conflict of interest between the vendor and Program staff who administer the Program on behalf of USDA and the Department. (5) Compliance with the WIC Vendor Agreement will be verified by activities conducted by Program staff. This includes on-site routine monitoring visits, the auditing of the vendor’s invoices to confirm sufficient stock was on hand to transact vouchers, and computer monitoring of food prices and voucher redemption activity. In addition, investigators from Department staff, or under contract with the Department, may pose as participants to conduct compliance purchases. (6) Non-compliance is cause for sanctions against the WIC vendor, as described in the WIC Vendor Handbook. These sanctions include disqualification, a civil money penalty (CMP) in lieu of disqualification, in addition to other remedies available by law. Prior warning is not required before sanctions are issued. The Program may use installment plans for the collection of CMP’s. However, if the WIC vendor does not honor an installment plan for a CMP, the WIC vendor shall be disqualified for the same corresponding length of time as the original disqualification. Specific sanctions and periods of enforcement are found in the WIC Vendor Handbook. The following is a description of these sanctions. Subparts (a)-(d) are federally mandated; (e)-(f) are State established. (a) Permanent disqualification for: 1. conviction by a court of competent jurisdiction of trafficking in WIC vouchers, or 2. conviction by a court of competent jurisdiction of selling firearms, ammunition, explosives, or controlled substances, as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802), in exchange for WIC vouchers. (b) Six-year disqualification for: 1. one or more incidences of investigative finding of trafficking in WIC vouchers; or 2. one or more incidences of investigative finding of selling firearms, ammunition, explosives, or controlled substances. (c) Three-year disqualification for: 1. one or more incidence of investigative finding of the sale of alcohol, alcoholic beverages, or tobacco products in exchange for WIC vouchers; 2. a pattern of claiming reimbursement for more of a WIC food item than the vendor’s documented inventory shows was on hand for a specific time period; 3. a pattern of overcharging; 4. a pattern of receiving, transacting, and/or redeeming WIC vouchers outside of authorized channels including a vendor’s location not contracted to accept WIC vouchers and/or from someone other than the person who signed the WIC voucher at the WIC Clinic; 5. a pattern of charging for WIC foods not provided to the participant at the time of the transaction; or 6. a pattern of providing credit or non-food items (e.g., paper towels, tissues) in exchange for WIC vouchers, (other than alcohol, alcoholic beverages, tobacco products, cash, firearms, ammunition, explosives, or controlled substances, which only require one (1) incidence). (d) One-year disqualification for: 1. a pattern of providing non-WIC foods and/or a quantity of WIC food greater than allowed on the WIC vouchers. (e) One-year disqualification for first violation for: 1. providing false information on the “Vendor Application for Authorization to Participate in the Tennessee WIC Program”; 2. providing false information on the WIC Grocer Price Report Card; 3. failing to allow any authorized WIC representative the right to inspect vouchers on hand; 4. failing to withhold deposit of WIC vouchers for up to seven (7) days upon request of an authorized WIC representative; or 5. failing to produce bills of lading or invoices upon request of an authorized WIC representative. (f) Six-month disqualification for first violation and one-year disqualification for second violation for: 1. failing to reimburse the WIC Program for a claim of reimbursement regarding one or more WIC vouchers; 2. failing to lower prices on approved WIC foods upon request of an authorized WIC representative; 3. failing to allow employee training on WIC procedures including having in place an effective policy and program to prevent trafficking; 4. failing of ownership/management to be knowledgeable of WIC procedures and be accountable for employee actions; 5. collecting reimbursement from a WIC participant(s) for a voucher(s) returned unpaid from the WIC Program’s bank contractor; 6. failing to treat all WIC participants the same regardless of race, color, national origin, age, gender, disability, religious or political belief; 7. failing to meet minimum stock requirements for approved WIC foods including having stock within eligible product dates; 8. failing to provide suitable hours and an environment for participant access including, but not limited to, not restricting the hours to redeem WIC vouchers, not keeping WIC participants from using a check-out available to all other customers, and not acting in a way that abuses or embarrasses a WIC participant; 9. failing to offer WIC participants any courtesies offered other customers including, but not limited to, bonus cards, multiplying of coupon values, and additional products for free; 10. requiring WIC participants to sign WIC vouchers without first entering the redeemed date and/or redeemed amount; 11. failing to obtain a signature on WIC vouchers at the time of the transaction; 12. redeeming WIC vouchers not valid for the month in which they are redeemed; or 13. failing to conduct WIC transactions only on the vendor’s premises. (7) WIC vendors who are disqualified by the Food Stamp Program or another State WIC Agency may also be disqualified by the Program for the same length of time, unless doing so would place a hardship on participants, and is not subject to administrative or judicial review under the WIC Program. (8) A civil money penalty may be imposed when disqualification would place a hardship upon participants who normally redeemed their vouchers at that particular location. This includes a decision for disqualification made by the Program, the Food Stamp Program or another State WIC Agency. The participant access determination must be made in writing by the Department and is not subject to challenge by the vendor. This determination is to be based on the availability of at least one other vendor within a reasonable distance of the vendor to be disqualified. The other vendor(s) must be reachable by participants using available transportation such as automobile, public transit, and/or walking without geographic barriers. Such barriers might include, but are not limited to, interstate highways, rivers, bridges not open to foot traffic, and steep terrain. A civil money penalty issued in lieu of permanent disqualification shall be $10,000. For any other period of disqualification, the CMP shall be based on ten (10) percent of the vendor’s average WIC redeemed dollar amount for the previous six-month period multiplied by the number of months the vendor would have been disqualified but shall not exceed $10,000 for each violation or $40,000 for multiple violations. (9) When a vendor previously assessed a federally mandated sanction for any of the one, three, or six-year periods is to be sanctioned again for any of these violations, the disqualification period shall be doubled. If a CMP is to be issued, the amount of the CMP shall be doubled up to the $40,000 maximum stated in (8) above. When a vendor previously assessed a federally mandated sanction twice for any of these violations commits any one of them for the third time or greater, the disqualification period shall be doubled. A CMP shall not be issued in these situations. (10) When a vendor previously assessed a State established sanction for any of the six-month or one-year periods is to be sanctioned again for any of these violations and a CMP is to be issued, the CMP shall be doubled up to the limits stated in (8) above. A CMP shall not be issued in lieu of disqualification for the third time or greater. (11) A WIC vendor committing fraud or abuse of the Program is subject to prosecution under applicable federal, State, or local laws. (12) Except for vendor name, address, and authorization status, the Department must restrict the use or disclosure of confidential vendor information to those entities listed in 7 CFR Part 246.26(e). Authority: T.C.A. §§4-5-202, 4-5-204, and 68-1-106. Administrative History: Original rule filed August 24, 2000; effective November 7, 2000. Repeal and new rule filed February 8, 2002; effective April 24, 2002. Amendment filed July 1, 2004; effective September 14, 2004.