Code of Federal Regulations Title 7. Agriculture § 7.276.3 Negligence or fraud

(1) FNS may determine that a State agency has been negligent in the certification of applicant households if a State agency disregards SNAP requirements contained in the Food and Nutrition Act of 2008, the regulations issued pursuant to the Act, the FNS–approved State Plan of Operation and a loss of Federal funds results or a State agency implements procedures which deviate from SNAP requirements contained in the Food and Nutrition Act of 2008, the SNAP regulations, the FNS–approved State Plan of Operation without first obtaining FNS approval, and the implementation of the procedures results in a loss of Federal funds.

(2) In computing amounts of losses of Federal funds due to negligence, FNS may use actual, documented amounts or amounts which have been determined through the use of statistically valid projections. When a statistically valid projection is used, the methodology will include a 95 percent, one-sided confidence level.

(3) FNS will base its determinations of negligence on information drawn from any of a number of sources. These information sources include, but are not limited to, State and Federal Performance Reporting reviews, State and Federal audits and investigations, State corrective action plans and any required reports.

(4) Failure by the State agency to remit payment upon demand, within the specified time period, may result in FNS recovering the lost funds through offsets to the State agency's Letter of Credit, in accordance with § 277.16(c).