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Economic & Employment Services CSFP Manual Chapter 9

Chapter 9: Claims
I.  Right to File Claims
USDA may assert claims against liable CSFP participating states.

States may assert claims against liable carriers, warehousemen, processors, participating organizations, or other persons who donated foods are delivered. States are required to take appropriate collection actions in order to obtain restitution where liability is involved.  Corrective Action Plans will be established for future monitoring.

Participating organizations have the right to assert claims. An organization may assert a claim in the event a loss or inappropriate use or distribution of USDA foods has occurred.  Such claims may be established against persons or companies with whom the organization has placed the responsibility for care, handling, or distribution of USDA foods (i.e., employees, volunteers, storage facilities, etc.)  Organizations shall always have the right to pursue restitution through appropriate legal channels in addition to claims action taken through the CSFP.
II.  Claims and Losses
A "claim" is any demand (or basis for a demand) for money or for replacement of a lost, damaged or improperly distributed or used commodity. Once DCF has received all information regarding situations requiring claim action, a claim determination will be made in order to decide the existence or nonexistence of a liability.
USDA requires states to be accountable for all commodities received through CSFP and to take appropriate claim and collection action in certain situations. If a claim determination by DCF so indicates, the Local Agency (LA), distribution site, and/or other persons shall reimburse DCF the value of the mishandled food. Claim action may be taken as a result of the following:
  • Improper distribution or use of donated foods.
  • Loss of USDA-donated foods that is caused by neglect, carelessness, and/or willful mishandling. "Loss" means any quantity of USDA-donated commodities that are unaccounted for (including physical count discrepancies), or which have become unusable for human consumption.
  • Damage to USDA-donated foods, which is caused by neglect, carelessness, and/or willful mishandling.

NOTE: Anytime it is discovered or reported that a situation has occurred involving any of the above, the procedures outlined below are to be followed. All losses must be reported to DCF within three (3) working days from the date of discovery.
III.  Establishing Claims
The State agency must establish standards, based on a cost-benefit review, for determining when the pursuit of a claim is cost-effective, and must ensure that local agencies use these standards in determining if a claim is to be pursued.

A.  Claim Against a Local Agency
A claim may be filed if the loss, improper distribution, or damage is assessed to be valued at $100 or greater and/or continues to occur after Corrective Action Plan is established.

B.  Claim Against a Participant
Improper use or receipt of CSFP benefits as a result of dual participation or other program violations may lead to a claim against the individual to recover the value of benefits. A claim my be filed for program violations of food valued at $100 or greater.
If it is determined that a claim is necessary, DCF will do the following:
  • Determine the dollar value of the products involved based upon the USDA replacement cost at the time of the loss or discovery of the loss.
  • Notify USDA as appropriate.
  • Determine the liable party(s).
  • Implement claim action.
  • Where appropriate, make three formal written demands to the liable party for repayment.
  • and/or take legal action for recovery.
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