OAR 333-054-0060: Vendor Disqualifications

(1) A vendor may not apply for authorization during a period of disqualification from the WIC Program. (2) The Authority shall not accept a vendor’s voluntary withdrawal from the WIC Program as an alternative to disqualification. In addition, the Authority may not use non-renewal as an alternative to disqualification. (3) The Authority shall disqualify a vendor that does not pay, partially pays or fails to timely pay, a CMP assessed in lieu of disqualification, for the length of the disqualification corresponding to the violation for which the CMP was assessed. (4) In order to participate in the WIC program after a vendor is disqualified, it must apply for authorization after the disqualification period has passed. (5) The Authority shall disqualify a vendor for a period corresponding to the most serious sanction during the course of a single investigation when the Authority determines the vendor has committed multiple violations. The Authority shall include all violations in the notice of administrative action. If a sanction for a specific violation is not upheld after the hearing or appeal, the Authority may impose a sanction for any remaining violations. (6) If the basis for disqualification of a vendor is for violation of OAR 333-054-0050(8), the effective date of the disqualification is the date the vendor received notice, either actual or constructive, of the disqualification. (7) The Authority may disqualify a vendor that has been disqualified or assessed a CMP in lieu of disqualification by another WIC state agency for a mandatory sanction. (a) The length of the disqualification shall be for the same length of time as the disqualification by the other WIC state agency or, in the case of a CMP in lieu of disqualification assessed by the other WIC state agency, for the same length of time for which the vendor would otherwise have been disqualified. The disqualification may begin at a later date than the sanction imposed by the other WIC state agency. (b) If the Authority determines that disqualification of a vendor would result in inadequate participant access, the Authority shall impose a CMP in lieu of disqualification. (8) The Authority shall disqualify a vendor who has been disqualified from the SNAP. The disqualification shall be for the same length of time as the SNAP disqualification, although it may begin at a later date than the SNAP disqualification. Such disqualification by the WIC program shall not be subject to administrative or judicial review under the WIC program. (a) The Authority may disqualify a vendor who has been assessed a CMP in lieu of disqualification in the SNAP, as provided in 7 CFR § 278.6. The length of such disqualification shall correspond to the period for which the vendor would otherwise have been disqualified in the SNAP. The Authority shall determine if the disqualification of a vendor would result in inadequate participant access prior to disqualifying a vendor for SNAP disqualification pursuant to section (8) of this rule or for any of the violations listed in this rule. If the Authority determines that disqualification of the vendor would result in inadequate participant access, the Authority shall not disqualify or impose a CMP in lieu of disqualification. The Authority shall include participant access documentation in vendor files. (b) The Authority shall provide the appropriate FNS office with a copy of the notice of adverse action and information on vendors it has disqualified. This information shall include the vendor’s name, address, identification number, the type of violation(s), length of the disqualification, or the length of the disqualification corresponding to the violation for which a SNAP CMP was assessed. (9) Disqualification from the WIC Program may result in disqualification as a retailer in the SNAP. Such disqualification may not be subject to administrative or judicial review under the SNAP. (10) Prior to disqualifying a vendor, the Authority shall determine if disqualification of the vendor would result in inadequate participant access. (a) If the Authority determines that disqualification of the vendor would result in inadequate participant access, the Authority shall not disqualify the vendor and shall impose a CMP in lieu of disqualification. (b) The Authority shall include documentation of its participant access determination and any supporting documentation in the vendor’s file. (c) The Authority shall not impose a CMP in lieu of disqualification for third or subsequent sanctions, even if the disqualification results in inadequate participant access. (d) The Authority shall not impose a CMP in lieu of disqualification for trafficking or an illegal sales conviction, even if the disqualification results in inadequate participant access. (11) Pursuant to 7 CFR 246.12 (l)(1), the Authority shall use the following formula to calculate a CMP imposed in lieu of disqualification: (a) Determine the vendor’s average monthly redemptions for at least the six-month period ending with the month immediately preceding the month during which the notice of administrative action is dated; (b) Multiply the average monthly redemptions figure by 10 percent (.10); and (c) Multiply the product from subsection (11)(b) of this rule by the number of months for which the store would have been disqualified. This is the amount of the CMP, provided that the CMP shall not exceed $11,000 for each violation. For a violation that warrants permanent disqualification, the amount of the CMP shall be $11,000. The Authority shall impose a CMP for each violation when during the course of a single investigation the Authority determines a vendor has committed multiple violations. The total amount of CMPs imposed for violations cited as part of a single investigation shall not exceed $49,000. (12) The Authority shall use the formula in subsections (11)(a) through (c) of this rule to calculate a CMP in lieu of disqualification for any violation under OAR 333-054-0050(8). The Authority has the discretion to reduce the amount of this CMP in quarterly increments, after reviewing the following criteria: (a) Whether the vendor had other WIC violations or complaints within the 12 months immediately preceding the month the notice of administrative action is dated; (b) The degree of severity of the violations and complaints; (c) If the vendor being sanctioned is part of a multi-store chain, whether there is a pattern within the corporation of violations and the seriousness of those violations; and (d) The degree of cooperation shown by the vendor, demonstrated by the vendor’s willingness to schedule staff training and to make changes in store operations based on the Authority recommendations. (13) The Authority shall, where appropriate, refer vendors who abuse the WIC Program to appropriate federal, state or local authorities for prosecution under applicable statutes. (14) A vendor who commits fraud or abuse of the program is subject to prosecution under applicable federal, state or local laws. A vendor who has embezzled, willfully misapplied, stolen or fraudulently obtained program funds, assets, or property shall be subject to a fine of not more than $25,000 or imprisonment for not more than five years or both, if the value of the funds is $100 or more. If the value is less than $100, the penalties are a fine of not more than $1,000 or imprisonment for not more than one year or both. (15) A vendor may be subject to actions in addition to the sanctions in this rule, such as claims by the Authority of reimbursement for improperly redeemed food instruments and penalties outlined in 7 CFR § 246.12(1)(2)(i). (16) The Authority shall use the following criteria to determine inadequate participant access: (a) The availability of other authorized vendors within a 15-mile radius; and (b) Geographic barriers. (17) Any time the Authority uses criteria in section (16) of this rule, the Authority shall include participant access documentation in the vendor file. (18) The Authority shall not reimburse for food instruments submitted by a vendor for payment during a period of disqualification. (19) A vendor is not entitled to receive any compensation for revenues lost as a result of a disqualification. [Publications: Publications referenced are available from the agency.]