5P-1.004. Penalties and Sanctions

(1) Child Nutrition Programs and Food Distribution Programs.

(a) Seriously Deficient.

1. A Sponsor or Recipient Agency, and its principals, including their board members, corporate officials, and the officials identified on the Sponsor or Recipient Agency’s application in the Florida Automated Nutrition System shall be declared by the department as Seriously Deficient if:

a. The Sponsor or Recipient Agency fails to comply with provisions outlined in the Child Nutrition Programs Agreement FDACS 01716, Rev. 06/23, which is hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-15795, and by email request to the department at [e-mail];

b. The Sponsor or Recipient Agency has failed to submit or implement a Corrective Action included in a previously issued Administrative Review, Claim Review, Sponsor Review, Site Review, Site Visit, Technical Assistance Visit, Recipient Agency Review or Inventory Reconciliation;

c. The Sponsor or Recipient Agency is noncompliant with applicable procurement procedures and contract requirements of 2 CFR 200, revised as of January 1, 2021, which is hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-15796, and by email request to the department at InfoFNWfdacs.gov;

d. The Sponsor or Recipient Agency submitted false information to the department;

e. If the Sponsor failed to return to the department any start-up, advance, or improper payments which exceeded the amount earned for serving meals in accordance with Section 7 CFR 225.16, or failure to submit all Claims for Reimbursement in any prior year, provided these claims for reimbursement are not under dispute; or

f. Program violations are identified for ten percent (10%) or ten (10), whichever is greater, of the Sponsor’s or Recipient Agency’s sites. Such violations include the following:

(I) Noncompliance with the meal service time restrictions set forth in Sections 7 CFR 210.10(l)(1)-(2) or 7 CFR 225.16(c), revised as of January 1, 2021, which are hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-15797, and by email request to the department at [e-mail].;

(II) Failure to maintain adequate records in accordance with Section 2 CFR 200, or Sections 7 CFR 210.15, 7 CFR 220.7(e)(13), 7 CFR 220.8(a)(3), 7 CFR 220.9(a), or 7 CFR 225.15(c) revised as of January 1, 2021, which are hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-15798, and by email request to the department at [e-mail];

(III) Failure to adjust meal orders to conform to variations in the number of participants;

(IV) The simultaneous service of more than one meal to any participant;

(V) The claiming of Program payments for meals not served to participants;

(VI) Service of fifty percent (50%) of meals or greater which did not include required quantities of all meal components;

(VII) Off-site meal consumption occurs for fifty percent (50%) or greater of participants.

g. The Sponsor or Recipient Agency has notice of a Stop-Sale Order issued by the department, the Florida Department of Health, or the Department of Business and Professional Regulations to a Food Service Management Company that has yet to be lifted and the Sponsor or Recipient Agency continues to obtain foods from the Food Service Management Company.

h. The Recipient Agency distributes USDA Foods or related funds to a Sub-Distributing Agency without an executed agreement.

i. The Sponsor or Recipient Agency has failed to safely store and control ten percent (10%) or $10,000, whichever is greater, of USDA Foods including, but not limited to, improper distribution or foods lost, spoiled, stolen, sold or damaged as a result of improper storage, care, or handling.

j. The Recipient Agency failed to publicly notice dates of distribution at ten percent (10%) or ten (10), whichever is greater, sites as required in FNS Instruction 113-1 Form FNS-620 (1-99), which is hereby adopted and incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-09518.

k. The Sponsor’s or Recipient Agency’s tax exempt status is revoked by the Internal Revenue Service pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986 also resulting in immediate termination per subparagraph 5P-1.004(1)(b)4., F.A.C.

2. The department will notify the Sponsor or Recipient Agency in a Notice of Action via email that the Sponsor or Recipient Agency has been declared Seriously Deficient, the causes for Seriously Deficient status, and the required Corrective Actions to bring the Sponsor back into compliance with chapter 595, F.S., and the rules adopted thereunder. The Sponsor or Recipient Agency will have thirty (30) days from the date it receives the Notice of Action to submit a corrective action plan with supporting documentation to the department online at https://fans.FDACS.gov, or by mail to 600 S. Calhoun Street (H2), Tallahassee, FL 32399.

a. The corrective action plan must include:

I. Each identified program deficiency;

II. The corrective action required;

III. The timeframe by which the corrective action will be, or was completed; and

IV. Documentation to demonstrate corrective action was completed as prescribed in the Administrative Review Report.

b. Upon receipt of the Sponsor or Recipient Agency’s corrective action plan, the department shall determine if the corrective action plan permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions. If the corrective action plan permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions, the department will temporarily rescind the Sponsor’s or Recipient Agency’s Seriously Deficient status and the Sponsor or Recipient Agency may continue to operate the program.

c. If after thirty (30) days from the date of receipt for the Notice of Action, the Sponsor or Recipient Agency fails to respond to the Notice of Action or the corrective action plan does not permanently correct all causes for being declared Seriously Deficient and implement the required Corrective Actions, the department shall move to terminate the Sponsor or Recipient Agency under paragraph (b) of this rule.

(b) Termination.

1. If the Sponsor or Recipient Agency has failed to submit a corrective action plan with supporting documentation that permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions, the Sponsor or Recipient Agency has failed to repay all assessed fiscal action, or meet all requirements of its repayment schedule agreement, the Sponsor or Recipient Agency will be terminated from the program for seven (7) years.

2. If any Sponsor or Recipient Agency commits a Child Nutrition Programs and Food Distribution Programs violation involving fraud, the Sponsor or Recipient Agency will be immediately terminated for seven (7) years. For purposes of this rule, fraud includes:

a. Intentionally making false or misleading statements, orally or in writing or the intentional submission of false or misleading information to the department;

b. Intentionally withholding information pertaining to eligibility or ineligibility;

c. Selling commodities obtained in Food Distribution Programs, or exchanging them for non-food items; or

d. Distributing or permitting the distribution of unrelated program materials or conducting unrelated activities at a food distribution site in a manner inconsistent with the provisions of 7 CFR 251.10(f)(1), incorporated in Rule 5P-1.001, F.A.C.

3. After seven (7) years, the Sponsor or Recipient Agency may reapply for any Child Nutrition or Food Distribution Program. When reapplying, the Sponsor or Recipient Agency must meet all federal and state requirements of a School Food Authority or organization that did not operated the program in the year prior to the current year, in the respective programs for which they are applying.

4. A Sponsor whose tax-exempt status is revoked by the Internal Revenue Service (IRS) pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986 shall be terminated from a Child Nutrition Program until such time as the Sponsor’s tax-exempt status is reinstated by the IRS and documentation is provided by the Sponsor showing the effective date of exemption.

5. A Sponsor or Recipient Agency that has an organizational conflict of interest and is unable, or appears to be unable, to be impartial in conducting a procurement action involving a related organization, or a Sponsor or Recipient Agency or an employee, officer, or agent of the Sponsor or Recipient Agency that has a real or apparent conflict of interest in the selection, award, or administration of a purchase or contract shall be terminated.

6. While terminated, Sponsors or Recipient Agencies, and its principals, including their board members, corporate officials, and the officials identified on the Sponsor or Recipient Agency’s application in the Florida Automated Nutrition System at the time of the conduct resulting in the termination shall not participate in any Child Nutrition or Food Distribution Program, to include receiving USDA Foods, conducting business as a contractor, providing consulting services, or obtaining program related funds by any other means.

(2) Farmers’ Market Nutrition Programs.

(a) This rule sets forth the guidelines the department will follow in imposing the penalties authorized under 7 CFR 248.10, revised as of January 1, 2021, which is adopted and incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-15799, and by email request to the department at [e-mail], and section 595.501, F.S. The purpose of the guidelines is to give notice of the range of penalties that will be imposed for a single violation. These guidelines list aggravating and mitigating factors that, if present, will reduce or increase the penalties to be imposed against the Farmer or Farmers’ Market by the department. No aggravating factors will be applied to increase a fine imposed for a single violation above the maximum as provided in 7 CFR 248.20 or $5,000 for violations of chapter 595, F.S., or the rules adopted thereunder. The guidelines in this rule chapter are based upon a single count violation of each provision listed. Multiple counts of the violated provision or a combination of the listed violations will be added together to determine a total penalty and will be grounds for enhancement of penalties.

(b) The department will enforce compliance with this rule chapter by issuing a sanction for violations of 7 CFR 248, previously incorporated in paragraph (2)(a) of this rule.

(c) Nothing in this chapter shall limit the ability of the department to informally dispose of sanctions by settlement agreement, consent order, or other lawful means.

(d) Rule Not All-Inclusive. This rule contains illustrative violations. It does not, and is not intended to encompass all possible violations of statute or department rule that might be committed by any person. The absence of any violation from this rule chapter shall in no way be construed to indicate that the violation does not cause harm to the public or is not subject to a penalty. In any instance where the violation is not listed in this rule chapter, the penalty will be determined by consideration of:

1. The closest analogous violation, if any, that is listed in this rule; and,

2. The mitigating or aggravating factors listed in this rule.

(e) Aggravating and Mitigating Factors. The department will consider aggravating and mitigating factors in determining penalties for violations of 7 CFR 248, previously incorporated in paragraph (2)(a) of this rule, and this rule chapter. The factors shall be applied against each single count of the listed violation.

1. Aggravating Factors:

a. The violation caused, or has the potential to cause, serious injury to a person.

b. The violation endangered the public safety or welfare.

c. Previous violations within the preceding three years for the same or a similar offense that resulted in imposition of sanctions, issuance of a Notice of Action, or suspension.

d. The violation occurred for more than twenty-four (24) hours.

e. The Farmer or Farmers’ Market impeded, or otherwise failed to cooperate with, the department’s inspection or investigation.

f. Whether the violation resulted from negligence or an intentional act.

g. The cost of the enforcement action.

h. The number of other violations proven in the same proceeding.

i. The benefit to the farmer or farmers’ market.

2. Mitigating Factors:

a. Any documented efforts at Corrective Action by the Farmer or Farmers’ Market.

b. Whether intentional actions of another party prevented the Farmer or Farmers’ Market from complying with the applicable laws or rules.

c. Financial hardship.

d. Acts of God or nature that impairs the ability of the Farmer or Farmers’ Market to comply with 7 CFR 248, previously incorporated in paragraph (2)(a) of this rule.

e. The violation has a low risk of, or did not result in, harm to the public health, safety, or welfare.

f. The farmer/farmers’ market took corrective action within twenty-four (24) hours of receiving written notification of the violation.

g. The disciplinary history of the Farmer or Farmers’ Market committing the violation.

h. If a repeat violation, whether three (3) years has passed since the prior violation.

i. A statement, in writing, provided to the department during an investigation declaring acceptance of responsibility for a violation.

(f) The provisions of this rule chapter shall not be construed so as to prohibit or limit any other civil action or criminal prosecution that may be brought.

(g) In addition to the penalties established in this rule, the department reserves the right to seek to recover any other costs, penalties, attorney’s fees, service fees, and damages allowed by law. Additionally, the department reserves the right to seek to recover any costs, penalties, attorney’s fees, service fees, and costs resulting from a payment that is returned for insufficient funds to the department.

(h) Penalties.

1. Notice of Non-Compliance. Any department investigation or inspection which reveals minor violations of this rule chapter in which the department determines that the Farmer or Farmers’ Market was unaware of the rule or unclear as to how to comply with it will result in the issuance of a Notice of Non-Compliance as the department’s first response to the violation.

2. Minor Violations. A violation of this rule chapter is a minor violation if it does not result in economic or physical harm to a person or adversely affect the public health, safety, or welfare or create a significant threat of such harm. Minor violations shall result in imposition of a fine not to exceed $1,000.00. The following violations shall be considered minor violations:

a. Issue cash exchange for purchases that are in an amount less than the value of the Farmers’ Market Nutrition Program coupon(s);

b. Failure to provide equitable treatment to Farmers’ Market Nutrition Program recipients, including availability of produce to Farmers’ Market Nutrition Program recipients that is of the same quality and cost as that sold to other customers;

c. Failure to notify the department of ceased operations prior to the end of the authorization period; or

d. Redemption of Farmers’ Market Nutrition Program coupon(s) for ineligible foods.

3. Major Violations. A violation of this rule chapter is a major violation if it results in economic or physical harm to a person or adversely affects the public health, safety, or welfare, or creates a significant threat of such harm. Major violations shall result in the imposition of an administrative fine not to exceed $5,000.00 for violations of Chapter 595, F.S., and the rules adopted thereunder, or the maximum set forth in 7 CFR 248.10(k), or a sanction, or disqualification as prescribed in 7 CFR 248.10(k) previously incorporated in paragraph (2)(a) of this rule. The following violations shall be considered major violations:

a. Noncompliance with the nondiscrimination provisions of the USDA regulations as provided in 7 CFR 248.7 previously incorporated in paragraph (2)(a) of this rule;

b. Improper Farmers’ Market Nutrition Program coupon redemption procedures; or

c. Deliberate fraud as specified in 7 CFR 248.20(c), previously incorporated in paragraph (2)(a) of this rule.

(i) Nothing in this rule chapter shall prohibit the department and person charged with a violation from resolving violations prior to the hearing or review of written documentation pursuant to Rule 5P-1.002, F.A.C., or from negotiating a settlement. The department is authorized to utilize all available remedies to ensure compliance including administrative action, civil actions, and referrals for criminal prosecution. The cost of any enforcement proceeding may be added to any penalty imposed. The department shall enforce a failure to comply with an agreement to resolve violations or a settlement agreement with the penalties and remedies provided in the agreement.

(j) Failure to timely appeal the agency action listed in a Notice of Action shall result in the entry of a Default Final Determination against the Farmer or Farmer’s Market responsible for the violation.

Rulemaking Authority 570.07(23), 595.404(4), (10), (11) FS. Law Implemented 595.404, 595.501, 570.971, 1001.42(16) FS. History–New 9-5-77, Amended 9-6-78, 10-17-78, 10-23-79, 1-7-81, 8-12-81, 4-27-82, 6-28-83, Formerly 6A-7.421, 6A-7.0421, Amended 6-21-18, 12-16-18, 9-5-23.