Submission of False or Fraudulent Claims The submission of a false or fraudulent claim constitutes a serious deficiency for participating institutions. If an institution knowingly files a false or fraudulent claim for reimbursement, the State agency must declare the institution and RP/Is seriously deficient; for example, an institution filing a claim for meals that it did not serve, an institution that claims more than two meals and a snack per child, or reporting children as eligible for free meals on the claim without supporting income eligibility applications. Fraud is defined as a willful act commenced with the to deceive or cheat, in order Specific Intent to cause some financial detriment to another and to engender personal financial gain. A misrepresentation is fraudulent if the (a) knows or believes that the matter is not as he represents it to be, (b) does not have the confidence in the accuracy of his representation that he states or implies, or (c) knows that he does not have the basis for his representation that he states or implies. If the agency or sponsoring organization cannot prove these conditions without any doubt, FNS advises that a charge of knowingly filing a fraudulent claim not be used. As part of the adverse action, the State agency has the option to suspend the institution and RP/Is from Program participation, including Program payments, until the serious deficiency has been resolved [7 CFR 226.6(c)(5)(ii)]. Proposed Suspension When the State agency proposes to suspend an institution’s participation, including Program payments for the submission of a false or fraudulent claim, the State agency must issue a combined notice of serious deficiency and proposed suspension. The institution and RP/Is must be notified in writing that the State agency intends to suspend the institution’s participation (including all Program payments) unless the institution requests a review of the proposed suspension. The notice must state: The serious deficiencies found; That the State agency is proposing to suspend the institution’s and RP/Is’ Program participation, including the payment of claims; The effective date of the suspension (this cannot be earlier than 10 days after the institution receives the notice); That the institution can appeal the proposed suspension; The contact information for the suspension review official; That a suspension review must be requested within 10 days of receipt of the notice;
Submission of False or Fraudulent Claims The submission of a false or fraudulent claim constitutes a serious deficiency for participating institutions. If an institution knowingly files a false or fraudulent claim for reimbursement, the State agency must declare the institution and RP/Is seriously deficient; for example, an institution filing a claim for meals that it did not serve, an institution that claims more than two meals and a snack per child, or reporting children as eligible for free meals on the claim without supporting income eligibility applications. Fraud is defined as a willful act commenced with the Specific Intent to deceive or cheat, in order to cause some financial detriment to another and to engender personal financial gain. A misrepresentation is fraudulent if the (a) knows or believes that the matter is not as he represents it to be, (b) does not have the confidence in the accuracy of his representation that he states or implies, or (c) knows that he does not have the basis for his representation that he states or implies. If the agency or sponsoring organization cannot prove these conditions without any doubt, FNS advises that a charge of knowingly filing a fraudulent claim not be used. As part of the adverse action, the State agency has the option to suspend the institution and RP/Is from Program participation, including Program payments, until the serious deficiency has been resolved [7 CFR 226.6(c)(5)(ii)]. Proposed Suspension When the State agency proposes to suspend an institution’s participation, including Program payments for the submission of a false or fraudulent claim, the State agency must issue a combined notice of serious deficiency and proposed suspension. The institution and RP/Is must be notified in writing that the State agency intends to suspend the institution’s participation (including all Program payments) unless the institution requests a review of the proposed suspension. The notice must state: The serious deficiencies found; That the State agency is proposing to suspend the institution’s and RP/Is’ Program participation, including the payment of claims; The effective date of the suspension (this cannot be earlier than 10 days after the institution receives the notice); That the institution can appeal the proposed suspension; The contact information for the suspension review official; That a suspension review must be requested within 10 days of receipt of the notice;
USDA_CACFP_Serious_Deficiency_Handbook.docx