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UNITED STATES DEPARTMENT OF AGRICULTURE
CFDA 10.557 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC) I. PROGRAM OBJECTIVES
The objective of the Special Supplemental Nutrition Program for Women, Infants and Children
(WIC) is to provide supplemental nutritious foods, nutrition education, and referrals to health care
for low-income persons during critical periods of growth and development. Such persons include
low-income pregnant women, breast-feeding women up to one year postpartum,
non-breast-feeding women up to six months postpartum, infants (persons under one year of age),
and children under age five determined to be at nutritional risk. Intervention during the prenatal
period improves fetal development and reduces the incidence of low birth weight, short gestation,
and anemia.
II. PROGRAM PROCEDURES
WIC Program regulations are found in 7 CFR part 246.
Administration
The U.S. Department of Agriculture (USDA) Food and Consumer Service (FCS) administers the
WIC program through grants awarded to State health departments or comparable State agencies,
Indian tribal governments, bands or intertribal councils, or groups recognized by the Bureau of
Indian Affairs, U.S. Department of the Interior, or the Indian Health Service (IHS) of the U.S.
Department of Health and Human Services. These WIC State agencies, in turn, award subgrants
to local agencies to certify applicants' eligibility for WIC program benefits and deliver such
benefits to eligible persons. Organizations eligible to serve as WIC local agencies include public
or private non-profit health agencies, human service agencies which provide health services, and
IHS health units.
Funding of WIC Program Costs
The WIC program is a grant program that is 100 percent federally-funded (7 CFR sections
246.16(a), (b), and (c)). No State matching requirement exists. Funds are awarded by FCS on
the basis of funding formulas prescribed in the WIC program regulations.
FCS allocates federally-appropriated funds to WIC State agencies as grants which are divided into
two parts: a grant for food costs and a grant for nutrition services and administrative (NSA) costs.
The objectives of the food grant funding formula are to provide program stability by maintaining
each State agency's prior year operating level and to encourage program growth by providing a
greater share of funds to those State agencies receiving comparatively less than their fair share of
funds based on their WIC eligible population. The NSA funding formula strives to preserve a
reasonable measure of funding stability, while promoting funding levels that provide equivalent
service to participants, and to promote incentives for reducing food costs so that more persons
may be served.
Resources available to a State agency for program purposes under the two components of its
initial Federal WIC formula grant may be modified by the cumulative effect of the following
requirements:
Reallocations and Recoveries
The WIC program's authorizing statute and regulations require FCS to recover unspent funds and
reallocate them to State agencies.
Conversion Authority
A State agency that achieves WIC participation increases under a cost containment strategy, as
outlined under the "Cost Containment Requirements" section below, in excess of the increases
projected by FCS in the NSA funds allocation formula, may shift a portion of its food grant
component to its NSA component. This "conversion authority" is a function of the "excess"
participation increase and is determined by FCS.
Spending Options
Federal legislation and regulations authorize a State agency to shift a portion of its Federal WIC
formula grant between grant periods (Federal fiscal years).
Rebates
A State agency may contract with a food manufacturer to receive a rebate on each unit of the
manufacturer's product purchased with food instruments (FI) redeemed by program participants.
Such rebates are credits against prior expenditures made during the month in which the rebate
was earned for WIC food costs. Rebates held in State accounts are exempt from the interest
provisions of the Cash Management Improvement Act (CMIA) and 31 CFR part 205.
Vendor and Participant Collections
A State agency is authorized to retain Federal program funds recovered through claims action
against vendors and participants and to use such recoveries for program purposes. Like rebates,
post-payment vendor and participant collections are credits against prior expenditures for WIC
food costs. Such credits may be applied to expenditures for food in the fiscal year in which the
collection is received or in the fiscal year in which the food instrument resulting in the collection
was issued. Pre-payment vendor collections are improper payments prevented, not recoveries of
food outlays. Therefore, they represent credits to vendor billings, not prior expenditures. The
State agency may credit up to 100 percent of its vendor and participant collections for NSA costs.
This authority is in addition to the conversion authority related to cost containment initiatives
outlined above (Section 17(f)(23) of the Child Nutrition Act of 1966, as amended (42 USC
1786(f)(23).
Program Income
Certain miscellaneous receipts a State agency collects as the result of WIC program operations
are classified as program income (7 CFR 246.15).
State Funding
Although the Federal financial participation (FFP) for WIC is 100 percent, some States voluntarily
appropriate funds from their own revenues to extend WIC services beyond the level that could be
supported by Federal funding alone.
Certification
Applicants for WIC program benefits are screened at WIC clinic sites to determine whether they
meet the eligibility criteria in the following categories: categorical, residency, income, and
nutritional risk (7 CFR sections 246.7(c), (d), (e), and (g)).
Benefits
The WIC program provides participants with specific nutritious supplemental foods, nutrition
education, and health services referrals at no cost. The authorized supplemental foods are
prescribed from standard food packages according to the category and nutritional need of the
participant. The seven food packages available are described in detail in WIC program
regulations (7 CFR section 246.10). In general, infants receive iron-fortified formula,
iron-fortified infant cereal, and fruit juices high in vitamin C. Participating women and children
receive fortified milk and/or cheese, eggs, hot or cold cereals high in iron, fruit and vegetable
juices high in vitamin C, and either peanut butter or dry beans/peas. In addition to these foods,
certain breast-feeding women also receive tuna, carrots, and both peanut butter and dry
beans/peas.
About 75 percent of the WIC program's annual appropriation is used to provide WIC participants
with monthly food package benefits. The remainder is used to provide additional benefits and to
manage the program. Additional benefits provided to WIC participants include nutrition
education, breast-feeding promotion and support activities, and client services, such as diet and
health assessments, referral services for other health care and social services, and coordination
activities.
Food Benefit Delivery
Supplemental foods are provided to participants in any one of the following three ways (7 CFR
section 246.12(b)):
Direct Distribution (used only in Mississippi and parts of Illinois)
The State agency and/or its agent purchases supplemental foods in bulk and issues them to
participants at designated distribution points.
Home Delivery (used in Vermont and parts of Ohio)
Contractual arrangements with dairies provide for the delivery of supplemental foods directly to
participants' homes.
Retail Purchase System (used by most States)
Negotiable food instruments (FIs) are issued directly to individual participants and the participants
exchange them for authorized supplemental foods at retail stores. Two types of retail systems are
used: voucher systems and check systems. In a voucher system, the vendor submits the voucher
directly to the State agency for payment; in a check system, vendors deposit checks to their bank
accounts and the State reimburses the banks. A participant must use an FI within 30 days of its
issuance date, and the vendor must submit the FI for payment within 90 days of the issuance.
Each FI issued to a participant must have a unique serial number. The State agency is required to
reconcile all redeemed FIs to issuance records (generally created at the local agency level) by
serial number within 150 days of the first valid date for participant use.
A State agency must adjust previously reported obligations for WIC food costs in order to
account for actual FI redemptions and other changes in the status of FIs. A State agency is also
subject to claims action for the value of redeemed, unreconciled FIs. While the State agency is
required to reconcile all redeemed FIs to issuance records, FCS may determine that the
reconciliation process has been satisfactorily completed if certain conditions have been met.
These conditions are: (1) the State can demonstrate that all reasonable management efforts were
devoted to achieving 100 percent reconciliation; and (2) 99 percent or more of redeemed FIs were
reconciled (7 CFR section 246.23(a)(4)).
Cost Containment Requirements
In an effort to use their food funding more efficiently, all WIC State agencies in the 50 States, the
District of Columbia, Puerto Rico, Guam, the Virgin Islands, American Samoa, and most Indian
Tribal State agencies have implemented cost containment activities (7 CFR sections 246.16(j)
through (o)).
The Child Nutrition and WIC Reauthorization Act of 1989 (Public Law 101-147), enacted
November 10, 1989, requires WIC State agencies to explore the feasibility of implementing one of
four acceptable cost containment initiatives: competitive bidding, rebates, home delivery, or
direct distribution. A substantial portion of WIC's participation increases is attributable to the
success of cost containment measures. Reducing the average food cost per person enables WIC
to reach more participants with a given amount of funds. The most successful strategy has been
the negotiation of competitive rebate contracts between State agencies and infant formula
companies. Such contracts provide for the State agency to receive rebates on infant formula used
in the program.
State Responsibilities
A State administering the WIC program must sign a Federal/State Agreement that commits it to
observe applicable laws and regulations in carrying out the program (7 CFR section 246.3(c)).
Section 17 of the Child Nutrition Act of 1966 (42 USC 1786), the authorizing legislation for the
WIC Program, prescribes the basic goals of the WIC program. States are required to establish an
ongoing management evaluation system; to conduct monitoring reviews of each local agency at
least biennially, including on-site reviews of 20 percent of the clinics in each local agency; and to
monitor 10 percent of their authorized vendors annually (7 CFR section 246.12(i)). The State
must also ensure corrective action is taken in response to the detection of program deficiencies
and fully document the results of reviews and corrective action plans. Monitoring of local
agencies encompasses evaluation of management, certification, nutrition education, civil rights
compliance, accountability, financial management systems, and food delivery systems (7 CFR
section 246.19(b)).
State and local agencies prepare a WIC Local Agency Directory Report (FCS-648), updated as
needed, to inform FCS of additions, deletions, or address changes for the local agencies
administering the WIC Program. FCS uses the data to maintain and issue a current WIC Local
Agency Directory. This directory is used by FCS and State and local agencies to provide
potential Program participants with the correct name, address and phone number of the nearest
WIC local agency. FCS also uses this information for mailings of publications and other
important information.
Federal Oversight and Compliance Mechanisms
FCS oversees State operations through an organization consisting of headquarters and seven
regional offices. Federal program oversight encompasses review of 11 functional areas of the
program, including vendor management, management information systems, funds management,
certification and eligibility, nutrition services, and food delivery/food instrument accountability.
Each year FCS Regional Offices evaluate one or more of these areas or other related areas in
those States that they determine are in most need of review.
Although FCS uses technical assistance extensively to promote improvements in State operation
of the WIC Program, enforcement mechanisms are also present. The misuse of funds through
State or local agency negligence or fraud may result in the assessment of a claim (7 CFR section
246.23(a)). Claims may be established for funds lost due to food instrument theft or
embezzlements or for unreconciled food instruments (7 CFR sections 246.23(a)(2) and (4)). FCS
has other mechanisms to recover other losses and the cost of negligence. For other forms of
noncompliance, FCS has the authority to give notice and, if improvements do not occur, withhold
administrative funds for failure to implement program requirements (7 CFR section 246.19(a)(2)).
FCS has identified the following circumstances that may be indicators of noncompliance with
WIC program requirements: (1) redeemed FIs which the issuing local agencies had reported as
voided or unclaimed; (2) a large number of consecutively numbered, unreconciled FIs issued by
the same local agency; (3) FIs that appear to have been validly issued and used but, nevertheless,
fail to match existing issuance records; and, (4) participants that redeemed all of their FIs on the
same day as they were issued.
III. COMPLIANCE REQUIREMENTS
In developing the audit procedures to test compliance with the requirements for a Federal
program, the auditor should first look to Part 2, Matrix of Compliance Requirements, to
identify which of the 14 types of compliance requirements described in Part 3 are
applicable and then look to Parts 3 and 4 for the details of the requirements.
A. Activities Allowed or Unallowed
Funds allocated to a State agency for food must be expended to purchase supplemental foods for
participants or to redeem food instruments issued for that purpose. Funds allocated for NSA
must be used for the costs incurred by the State or local agency to provide participants with
nutrition education, breast-feeding promotion and support, and referrals to other social and
medical service providers and to conduct participant certification, caseload management, food
benefit delivery, vendor management, voter registration and program management (7 CFR
sections 246.14(a) through (d)).
There are two exceptions to the preceding rules. Funds allocated for NSA costs but not needed
for such costs may be applied to food costs (7 CFR section 246.14(a)(2)). Funds allocated for
food costs may be applied to NSA costs as a result of exceeding participation levels projected by
the Federal funding formula and/or vendor/participant collections (7 CFR sections 246.14(e) and
246.16(f)).
Under no circumstances may the WIC grant be charged for costs which are demonstrably outside
the scope of the WIC program. The cost for some screening (exclusive of laboratory tests),
referrals for other medical/social services, such as immunizations, prenatal (before birth)/perinatal
(near the time of birth from the 28th week of pregnancy through 28 days following birth) care,
well child care and/or family planning, and follow-up on participants referred for such services,
may be charged to the Federal WIC grant. However, the cost of the services performed by other
health care/social service providers to which the participant has been referred shall not be charged
to the WIC grant. For example, the cost to screen, refer, and follow-up on immunizations for
WIC participants may be charged to the WIC grant; but, the cost to administer the shot, the
vaccine, and vaccine-related equipment may not be charged to the WIC grant.
B. Allowable Costs/Cost Principles
Rebates, vendor collections (post-payment vendor collections are funds collected by the recovery
of claims assessed against food vendors for errors and overcharges; pre-payment vendor
collections are improper payments prevented as a result of reviews of food instruments prior to
payment) and participant collections (collections for improperly issued food benefits as the result
of a participant, guardian or caretaker intentionally making a false or misleading statement or
withholding information) are credits against vendor billings or prior expenditures. A State agency
must recognize, use, and account for these items in accordance with program regulations. A
State agency's failure to do so could result in overclaims against its Federal WIC grant and in cash
management problems.
C. Cash Management
The WIC program is subject to the provisions of the Cash Management Improvement Act
(CMIA); however, rebates are exempt from the interest provisions of the CMIA and its
implementing regulations (Section 17(h)(8)(iii)(L) of the Child Nutrition Act) (42 USC
1786(h)(8)(iii)(L)).
E. Eligibility
1. Eligibility for Individuals
Applicants for WIC Program benefits are screened at WIC clinic sites to determine whether they
meet the following eligibility criteria (7 CFR sections 246.7(c), (d), (e) and (g)).
a. Categorical Eligibility is restricted to pregnant, postpartum, and breast-feeding women,
infants, and children up to their fifth birthday (7 CFR sections 246.2 (definition of each category)
and 246.7(c)).
b. Residency An applicant must meet the State agency's residency requirement. Except in the
case of Indian State agencies, the applicant must reside in the jurisdiction of the State. Indian
State agencies may require applicants to reside within their jurisdiction. All State agencies may
designate service areas for any local agency, and may require that applicants reside within the
service area (7 CFR section 246.7(c)(1)).
c. Income An applicant must meet an income standard established by the State agency or be
determined to be automatically income-eligible based on documentation of his/her eligibility, or
certain family members' eligibility, for the following Federal programs: (1) Temporary Assistance
for Needy Families (formerly Aid To Families With Dependent Children); (2) Medicaid; or (3)
Food Stamps, i.e., adjunctive income-eligible. State agencies may also determine an individual
automatically income-eligible based on his/her eligibility for certain State-administered programs
(7 CFR sections 246.2 (definition of "family"), 246.7(c), and 246.7(d)).
Income Guidelines: The income standard established by the State agency may be up to 185
percent of the income poverty guidelines issued annually by the Department of Health and Human
Services or State or local income guidelines used for free and reduced-price health care.
However, in using health care guidelines, the income guidelines for WIC must be between 100
and 185 percent of poverty guidelines. Local agency income guidelines may vary as long as they
are based on the guidelines used for free and reduced-price health care (7 CFR section
246.7(d)(1)).
Income Determination: Except for applicants determined automatically income-eligible, income is
based on gross income and other cash readily available to the family or economic unit. Certain
Federal payments and benefits are excluded from the computation of income. In addition, the
State agency may exclude the value of military families' off-base housing allowances but must
implement such exclusion uniformly for all military families (7 CFR section 246.7(d)(2)(iv)).
At a minimum, in-stream (away from home base) migrant farm workers and their families with
expired Verification of Certification cards shall meet the State agency's income standard provided
that the income of the family is determined at least once every 12 months (7 CFR section
246.7(d)(2)(viii)).
An Indian State agency, or a State agency acting on behalf of an Indian local agency, may submit
reliable data that proves to FCS that the majority of Indian households in a local agency service
area have incomes at or below the State agency's income guidelines. In such cases, FCS may
authorize the State agency to permit the use of an abbreviated income screening process whereby
an applicant affirms, in writing, that its family income is within the State agency's prescribed
guidelines.
State agencies may instruct local agencies to consider family income over the preceding 12 months or the family's current rate of income, whichever indicator more accurately reflects the family's income status. However, applicants in which an adult member is unemployed shall have income determined based on the period of unemployment. A State or local agency may require verification of information which it determines necessary to confirm income eligibility. d. Nutritional Risk A competent professional authority (e.g., physician, nutritionist, registered
nurse, or other health professional) must determine that the applicant is at nutritional risk.
Nutritional risk is defined by each State agency within broad guidelines set forth in WIC
legislation and regulations. At a minimum, this determination must be based on measurement of
height or length and weight, and on a hematological test for anemia. Such anemia testing is
required of all applicants except infants under six months of age and, at the State or local agency's
discretion, children who are determined to be within the normal range at their last certification.
The determination of nutritional risk may be based on referral data provided by a competent
professional authority who is not on the WIC staff (7 CFR sections 246.2 (definitions of
competent professional authority and nutritional risk) and 246.7(e)).
When an applicant meets all eligibility criteria, he/she is determined by WIC clinic staff to be
eligible for program benefits. Certification periods are assigned to each participant based on
categorical status for women, infants, and children (7 CFR section 246.7(g)).
A WIC local agency assigns each eligible person a priority classification according to the
classification system described in 7 CFR section 246.7(e)(4). A person's priority assignment
reflects the severity of his/her nutritional risk. If the local agency cannot immediately place the
person on the program for lack of an available caseload slot, the person is placed on a waiting list.
Caseload vacancies are filled from the waiting list in priority classification order. State agencies
are expected to target program outreach and caseload management efforts toward persons at
greatest nutritional risk (i.e., those in the highest priority classifications).
Pregnant women are certified for the duration of their pregnancy and for up to six weeks
postpartum. Breast-feeding women may be certified for six-month intervals ending with the
breast-fed infant's first birthday. Infants are certified at intervals of approximately six months,
except that infants under six months of age may be certified for a period extending up to the
child's first birthday, provided the quality and accessibility of health care services are not
diminished. Children are certified for six-month intervals ending with the month in which the
child reaches the fifth birthday. Non-breast-feeding women are certified for up to six months
postpartum.
2. Eligibility for Group of Individuals or Area of Service Delivery - Not Applicable
3. Eligibility of Subrecipients
A State agency may award WIC subgrants only to organizations meeting the definition of "local
agency" in 7 CFR section 246.2. Such organizations are identified under "Program Procedures"
above.
H. Period of Availability of Federal Funds
A State agency may spend up to 1 percent of its total WIC formula grant for food costs of the
fiscal year preceding and/or food or NSA costs of the fiscal year following the fiscal year for
which the grant was awarded. This feature, known as "backspend" and "spendforward," is unique
to the WIC Program. Under certain conditions related to cost containment strategies, a State
agency may spend forward a maximum of 3 or 5 percent and/or backspend a maximum of 3
percent of its formula food grant award. The 3 percent backspend and the 3 and 5 percent
spendforward provisions incorporate, and are not in addition to the 1 percent
backspend/spendforward provisions. A State agency's total spending options may never exceed 3
or 5 percent, as applicable, of its food grant (7 CFR section 246.16(b)(3)) (Section 17(I)(3) of the
Child Nutrition Act) (42 USC 1786(I)(3)).
I. Procurement and Suspension and Debarment
1. Procurement
FCS authorizes WIC State and local agencies to purchase equipment having a cost of less than the
threshold established by FCS without prior approval from FCS. This policy does not apply to
purchases of automated data processing (ADP) equipment with a unit cost less than $25,000, if
the equipment is related to a multi-unit procurement with a total project cost (including
equipment, software and/or contracted services costs) of $25,000 or more, such as a statewide
automation system or a large replacement plan. Such purchases continue to require prior
approval from FCS (see ADP Projects).
This policy relieves WIC State agencies of submitting requests for prior approval of relatively
small equipment purchases which have traditionally been accepted to be reasonable and necessary
to conduct WIC program operations, such as copiers, vehicles, and personal computers and
monitors required for individual work stations.
ADP Projects
FCS authorizes WIC State agencies to make ADP acquisitions with a total project cost of up to
$24,999 without prior FCS approval. Instead, WIC State agencies must notify the FCS Regional
Office in writing of such purchases within 60 days of the expenditure or contract execution. ADP
acquisitions with a total project cost of $25,000 to $499,999 require a written request for prior
approval from the FCS Regional Office, including an explanation of the purchase(s), description
of needs, and other information appropriate to the proposed acquisition (cost allocation,
procurement documents, etc, as appropriate).
WIC State agencies are required to submit an Advanced Planning Document (APD) to request
prior approval of automation acquisitions with a total project cost of $500,000 or more. Prior
approval from FCS is required for such costs to be allowable charges to the WIC grant (7 CFR
section 3016.22).
Purchases of other capital assets, such as buildings, land and improvements to buildings or land
that materially increase their value or useful life, costing more than $5000, continue to require
prior approval from FCS.
2. Suspension and Debarment
There are no provisions unique to this program. Refer to Part 3 of the Compliance Supplement
for these requirements.
J. Program Income
Program income is to be treated as a credit against prior expenditures. Currently, the following
are the only funds FCS is aware of that WIC State agencies receive that are classified as program
income: (1) royalties from printed publications; (2) nominal fees, not to exceed costs, for
reproducing or mailing publications, videotapes, posters, etc.; (3) interest earned on rebate funds
for infant formula and other foods; and, (4) general grants not tied directly to foods redeemed, but
made for inclusion of food items in a State's food package (such as Welch's grants). A State
agency may use program income for any combination of food and NSA costs (7 CFR section
246.15(b)).
L. Reporting
1. Financial Reporting
The WIC program does not use the standard financial reports.
a. SF-269, Financial Status Report - Not Applicable
b SF-270, Request for Advance or Reimbursement - Not Applicable
c. SF-271, Outlay Report and Request for Reimbursement for Construction Program - Not
Applicable
d. SF-272, Federal Cash Transaction Report - Not Applicable
e. FCS-227, WIC Program Annual Closeout Report (OMB No. 0584-0427) - This report
replaces the annual SF-269, Financial Status Report, as the official document used by WIC State
agencies to provide the data needed by FCS to conduct the annual reconciliation and closeout of
grants which is required by 7 CFR section 3016. The FCS-227 discloses WIC program funds and
costs according to WIC's two grant components, food and NSA. The FCS-227 presents the
status of the report year grant and costs adjusted by the spending options unique to WIC which
allow a small portion of WIC grant funds to be shifted between Federal fiscal years. The
FCS-227 is the State's official validation of the final status of its grant and costs for the report
year.
Key Line Items - The following line items contain critical information:
1. Line 9 Gross Outlays and Unliquidated Obligations For Report Year Program Costs - reflects
the total of the State agency's outlays and unliquidated obligations for report year WIC program
costs.
2. Line 10a Rebates - reflects the total annual credit to the Federal grant as a result of rebates
collected.
3. Line 10b Program Income - reflects the total amount of gross income received by the State
directly generated by a grant-supported activity, or earned only as a result of the grant agreement
during the grant period.
4. Line 10c Vendor/Participant Collections - reflects the amount of post-payment vendor
collections (i.e., funds collected by the recovery of claims assessed against food vendors for errors
and overcharges) and participant collections. Pre-payment vendor collections are not reported in
this line as they represent credits to vendor billings, not credits to gross expenditures. Participant
collections are funds collected for improperly issued food benefits as the result of a participant,
guardian or caretaker making a false or misleading statement or withholding information.
f. FCS-227A, Addendum to WIC Program Annual Closeout Report - NSA Expenditures (OMB
No. 0584-0427) - The FCS-227A is prepared annually by State agencies to report (1) NSA
expenditures by function for the fiscal year being closed out (2) the method by which NSA
expenditures were charged as indirect costs, and (3) the method by which the indirect cost
amount was determined. FCS uses the amounts reported in nutrition education and
breast-feeding promotion and support, two of the four functional categories on the FCS-227A, to
determine whether the State agencies met the statutory minimum spending level for those
functions.
Key Line Items - The following line items and columns contain critical information for State-level
activities.
1. Line 5a Federal Outlays - Column (03) - State-Level Nutrition Education -represents total
outlays and unliquidated obligations made for State-level nutrition education costs supported by
Federal grant funds and program income.
2. Line 5a Federal Outlays - Column (04) - State-Level Breast-feeding Promotion and Support -
represents total outlays and unliquidated obligations made for State-level breast-feeding
promotion and support costs supported by Federal grant funds and program income.
3. Line 5b State Outlays - Column (03) - State-Level Nutrition Education -represents total
outlays and unliquidated obligations made for State-level nutrition education costs supported by
State-appropriated funds plus the dollar value of any in-kind contributions received from any
Federal, State or local funding source.
4. Line 5b State Outlays - Column (04) - State-Level Breast-feeding Promotion and Support -
represents total outlays and unliquidated obligations made for State-level breast-feeding
promotion and support costs supported by State-appropriated funds plus the dollar value of any
in-kind contributions received from any Federal, State or local funding source.
Key Line Items - The following line items and columns contain critical information for local-level
activities - Outlays and unliquidated obligations made by local agencies or made by the State
agency for local clinics or other units in local communities which directly provide benefits to
participants.
1. Line 5a Federal Outlays - Column (07) - Local-Level Nutrition Education - represents total outlays and unliquidated obligations made for local-level nutrition education costs supported by Federal grant funds and program income. 2. Line 5a Federal Outlays - Column (08) - Local-Level Breast-feeding Promotion and
Support - represents total outlays and unliquidated obligations made for local-level breast-feeding
promotion and support costs supported by Federal grant funds and program income.
3. Line 5b State outlays - Column (07) - Local-Level Nutrition Education -represents total
outlays and unliquidated obligations made for local-level nutrition education costs supported by
State-appropriated funds plus the dollar value of any in-kind contributions received from any
Federal, State or local funding source.
4. Line 5b State outlays - Column (08) - Local-Level Breast-feeding Promotion and Support -
represents total outlays and unliquidated obligations made for local-level breast-feeding
promotion and support costs supported by State-appropriated funds plus the dollar value of any
in-kind contributions received from any Federal, State or local funding source.
(Refer to 7 CFR section 246.14(c))
g. FSC-498, WIC Monthly Financial Management and Participation Report (OMB No.
0584-0045) - A State agency is required to submit monthly financial and program performance
(participation) data (7 CFR section 246.25(b)).
Each WIC State agency uses the FCS-498 to report projected and actual Federal food
expenditures and participation for each month of the fiscal year. Participation for any given
month equals the number of individuals who received supplemental foods or food instruments
during that month plus the number of infants who received no supplemental foods or food
instruments, but were breast-fed by participating women during that month.
The FCS-498 also reports actual NSA expenditures and unliquidated obligations and the source
of funds available to support both food and NSA expenditures. The reporting of State-supported
food expenditures and participation is optional. The States and FCS use this information for
program monitoring, funds management, budget projections, monitoring caseload, policy
development, and responding to requests from Congress and the interested public.
Key Line Items - The following line items contain critical information:
1. Line 1 Gross Obligation - reflects the amount of money, net of vendor and participant collections and program income, used to fund food outlays that a State agency estimates it will spend for each month's food orders or FI issuances. 2. Line 2 Estimated Rebate - reflects the amount of money that a State agency estimates it will
receive for rebates.
3. Line 4 Actual Outlays - reflects the amount of payments for redeemed food instruments or the
total amount of redeemed documents approved by the WIC program for payment, minus vendor
and participant collections and program income used to fund food outlays for the report month.
The State's WIC program food cost ledger account should support this amount.
4. Line 5 Rebates Billed - reflects the dollar value of bills or invoices submitted by the State to
food manufacturers, such as infant formula companies, for rebate payments.
5. Line 11 Total Federal Participation - reflects the actual number of federally-supported participants for elapsed months. The participation counts should be supported by FI issuance records and participant files. 6. Line 16c Total Year-to-Date Administrative Costs - reflects cumulative year-to-date payments
made for WIC program NSA costs incurred up to the report month minus those payments funded
with program income.
2. Performance Reporting - Not Applicable
3. Special Reporting - Not Applicable
N. SPECIAL TESTS AND PROVISIONS
1. One-to-One Reconciliation
Compliance Requirement - A State agency must reconcile all redeemed FIs to issuance records
within 150 days of the FI's first valid date for participant use. The State agency must determine
whether each redeemed FI was: (1) validly issued and validly used; (2) used after being lost,
stolen, or voided; (3) validly issued but used outside its valid use dates; (4) used pursuant to a
duplicate issuance (either two FIs bearing the same serial number or a participant receiving
duplicate benefits); or, (5) otherwise not matching issuance records. State agencies generally do
this by analyzing computer reports that provide detailed issuance and redemption information on
each FI redeemed (7 CFR section 246.12(n)(1)).
Audit Objective - Determine whether the State agency's FI reconciliation process complies with
the one-to-one reconciliation requirement.
Suggested Audit Procedures
a. Obtain an understanding of the State agency's process for reconciling redeemed FIs. At a
minimum, this includes determining how the State agency:
(1) Identifies the ultimate disposition of every redeemed FI; and
(2) Follows up on redeemed FIs that cannot be matched with valid issuances (State agencies do
this by contacting the issuing local agencies and by other means).
b. Determine whether written guidance on how to follow up on unreconciled FIs exists for local agencies. c. Determine through inspection of reconciliation reports that the State agency:
(1) Reconciled its records to issued FIs on a one-to-one basis within the 150 day time frame set
by regulation;
(2) Followed-up on FIs that were not validly issued and validly used, in order to determine their
ultimate disposition;
(3) Obtained explanations for identified discrepancies; and
(4) Adjusted its accounting records and external reports in order to reflect the results of the
reconciliation process.
d. Using State agency reconciliation reports for the last month of the audit period, verify the
State agency's non-reconciliation rate. The non-reconciliation rate should not exceed one percent.
The State agency should use the following steps in performing the non-reconciliation rate
calculation:
(1) Determine total FIs redeemed (2) Determine total redeemed FIs initially identified as unreconciled (listed as redeemed with no record of issuance on exception report) (3) Determine total redeemed FIs finally identified as unreconciled (after follow-up with local agencies/clinics) (4) Calculate the unreconciled rate (#3 divided by #1) (5) Calculate total value of FIs redeemed (6) Calculate total value of FIs finally identified as unreconciled
2. Management Evaluations
Compliance Requirement - State agencies must establish an ongoing management evaluation
system which includes at least the monitoring of local agency operations, the review of local
agency financial and participation reports, the development of corrective action plans, the
monitoring of the implementation of corrective action plans, and on-site visits. Monitoring of the
local agencies shall include evaluation of management, certification, nutrition education, civil
rights compliance, accountability, financial management systems, and food delivery systems.
These reviews must be conducted on each local agency at least once every two years, including
on-site reviews of a minimum of 20 percent of the clinics in each local agency or one clinic,
whichever is greater (7 CFR section 246.19(b)).
Audit Objective - Determine whether the State agency has conducted the required local agency
management reviews and that the local agency management reviews cover the required areas.
Suggested Audit Procedures
a. Ascertain that the State agency conducts the required local agency management reviews,
including on-site visits of a minimum of 20 percent of the clinics in each local agency or one
clinic, whichever is greater.
b. Ascertain that the local agency management reviews include required areas.
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