Provisions To Improve the Supplemental Nutrition Assistance Program's Quality Control System, 64756-64789 [2023-20023]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food and Nutrition Service

[Federal Register Volume 88, Number 180 (Tuesday, September 19, 2023)]
[Proposed Rules]
[Pages 64756-64789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20023]



[[Page 64755]]

Vol. 88

Tuesday,

No. 180

September 19, 2023

Part IV





Department of Agriculture





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Food and Nutrition Service





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7 CFR Parts 271 and 275





Provisions To Improve the Supplemental Nutrition Assistance Program's 
Quality Control System; Proposed Rule

Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / 
Proposed Rules

[[Page 64756]]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271 and 275

[FNS-2020-0016]
RIN 0584-AE79


Provisions To Improve the Supplemental Nutrition Assistance 
Program's Quality Control System

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Department of Agriculture (the Department) is issuing 
this notice of proposed rulemaking to improve the Food and Nutrition 
Service's (FNS) Supplemental Nutrition Assistance Program (SNAP) 
quality control (QC) system as required in the Agriculture Improvement 
Act of 2018 (2018 Farm Bill). The proposed changes are intended to 
strengthen and improve the integrity and accuracy of the SNAP QC system 
and to better align SNAP with requirements in the Payment Integrity 
Information Act of 2019 (PIIA). These changes include a significant 
adjustment to the SNAP QC system that involves changes to Federal and 
State agency sampling processes, as well as changes to the active case 
review process. Quality Control case sampling and review processes are 
key aspects of the system used to annually assess SNAP payment error 
rates. The Department requests comment on this rule's proposed 
provisions.

DATES:  Written comments must be received on or before November 20, 
2023 to ensure their consideration.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit written comments on this proposed rule. Comments may 
be submitted in writing by one of the following methods:

--Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow 
the online instructions for submitting comments.
--Mail: Send comments to John M., Branch Chief, Quality Control Branch, 
Program Accountability and Administration Division; Food and Nutrition 
Service; 1320 Braddock Place, 5th Floor; Alexandria, Virginia 22314.
--Email: Send comments to [email protected]. Include Docket ID 
Number FNS-2020-0016, ``Provisions to Improve the SNAP QC System'' in 
the subject line of the message.
--All written comments submitted in response to this proposed rule will 
be included in the record and will be made available to the public. 
Please be advised that the substance of the comments and the identity 
of the individuals or entities submitting the comments will be subject 
to public disclosure. FNS will make the written comments publicly 
available on the internet via https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: John M., 703-457-7747, Food and 
Nutrition Service, 1320 Braddock Place, 5th Floor, Alexandria, Virginia 
22314, [email protected].

SUPPLEMENTARY INFORMATION: 
I. Table of Contents
    a. Acronyms or Abbreviations
    b. Severability Clause
II. Background/History
    a. SNAP QC--In General
    b. Farm Bill Provisions
    c. Improper Payment Determinations
    d. Historical Information Supporting Congress' Request for 
Improvement and QC Reform
    i. State QC Integrity Reviews (QCIRs)
    ii. FNS Response
    e. SNAP QC--Current Processes
    f. New Proposed QC Approach
III. General (This section begins discussion of the proposed 
provisions)
    a. Terminology Clean Up
    b. Subpart A--Administration
    i. Staffing Standards
    ii. FNS Access to State Systems
    iii. Federal Monitoring--Federal Subsampling
    iv. Sampling--Federal Sub Sample
    v. Federal Monitoring--Arbitration
    c. Subpart C--Quality Control (QC) Reviews
    i. Sampling--General
    ii. Sampling Plan--Content
    iii. Sampling Plan--Design
    iv. Sample Size--Active and Negative Cases
    v. Sample Size--Alternative Designs
    vi. Sample Selection--Corrections
    vii. Sample Frame--Active Cases
    viii. Sample Universe--Active Cases
    ix. Active Sample Allocation and Weighting
    x. Review of Active Cases--General
    xi. Review of Active Cases--Household Case Record Review
    xii. Review of Active Cases--Field Investigation
    xiii. Review of Active Cases--Personal Interviews
    xiv. Review of Active Cases--Collateral Contacts
    xv. Review of Active Cases--Variance Identification
    xvi. Review of Active Cases--Variances Excluded From the Error 
Analysis
    xvii. Review of Active Cases--Other Findings
    xviii. Review of Active Cases--Reporting of Review Findings
    xix. Review of Active Cases--Disposition of Case Reviews
    d. Subpart E--Corrective Action
    i. Corrective Action Planning--Negative Cases
    ii. Corrective Action Planning--Incomplete Cases
    e. Subpart F--Responsibilities for Reporting on Program 
Performance
    i. Quality Control Review Reports--Mandating the Use of SNAP QC 
System
    f. Subpart G--Program Performance
    i. Determination of State Agency Program Performance--
Determination of Payment Error Rates
    ii. State Agency Error Rates--Completion Rate Penalty
    iii. High Performance Bonuses
    iv. Performance Measures--Program Access Index
    g. Proposed Timeframe for Implementation of QC Sampling and 
Active Review Changes
IV. Procedural Matters
V. Amendatory Text

Acronyms or Abbreviations

Agriculture Improvement Act of 2018 (Pub. L. 115-334), the 2018 Farm 
Bill
Case and Procedural Error Rate, CAPER
Code of Federal Regulations, CFR
Corrective Action Plan, CAP
Department of Justice, DOJ
Federal Quality Control Reviewer, FQCR
Food and Nutrition Act of 2008, FNA
Food and Nutrition Service, FNS
Office of Management and Budget, OMB
Payment Error Rate, PER
Quality Control, QC
Quality Control Reviewer, QCR
Regional Office, RO
Request for Information, RFI
Supplemental Nutrition Assistance Program, SNAP
Supplemental Nutrition Assistance Program's Automated Quality 
Control System, SNAP-QCS
State Quality Control Reviewer, SQCR
U.S. Department of Agriculture, the Department or USDA
U.S. Department of Agriculture Office of Inspector General, USDA OIG

    Severability: The Department proposes that certain individual 
components of this proposed rule are severable and seeks comment on 
that proposal. Specifically, the Department considers changes proposed 
in the following sections to be severable: Staffing Standards; FNS 
Access to State Systems; Federal Monitoring--Arbitration; Review of 
Active Cases--Other Findings; Review of Active Cases--Disposition of 
Case Reviews (with the exception of changes proposed to 7 CFR 
275.12(g)(2)); Corrective Action Planning--Negative Cases; Corrective 
Action Planning--Incomplete Cases; State Agency Error Rates--Completion 
Rate Penalty; and Performance Measures. If a court were to find 
unlawful any or some combination of this rule as finalized, the 
Department still would intend any individual or combination of the 
above sections of

[[Page 64757]]

this proposed rule to stand. The Department seeks comment regarding 
considerations about whether stakeholders consider those and any other 
provisions in this proposed rule severable or not.

Background

SNAP QC--In General

    The Supplemental Nutrition Assistance Program (SNAP) is the 
nation's largest domestic food assistance program for Americans, 
reaching about 40 million people (approximately 12 percent of the 
nation's population) per month during fiscal year 2020.\1\
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    \1\ https://www.ers.usda.gov/topics/food-nutrition-assistance/food-assistance-data-collaborative-research-programs/snap-and-wic-administrative-data/.
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    Although the Federal government funds SNAP benefits, under 7 U.S.C. 
2020(a)(1), State agencies are responsible for general program 
administration of SNAP within their States, including determining the 
eligibility of individuals and households to receive SNAP benefits and 
issuing monthly allotments of benefits.
    However, given the large volume of SNAP cases, complexities of 
eligibility policies, and availability of State options, State agencies 
may issue overpayments or underpayments of SNAP allotments to 
participant households.
    Pursuant to Section 16 of the Food and Nutrition Act of 2008, as 
amended (FNA), each State agency is responsible for monitoring and 
improving its administration of SNAP. A Quality Control (QC) system is 
necessary to help ensure State agencies measure improper payments and 
improve their administration of SNAP. SNAP QC reviews have four goals, 
identified at 7 CFR 275.10(b), which are to provide: (1) a systematic 
method of measuring the validity of the SNAP eligibility caseload; (2) 
a basis for determining all SNAP error rates; (3) a timely, continuous 
flow of information on which to base corrective action at all levels of 
administration; and (4) a basis for establishing State agency liability 
for payment errors that exceed the National performance measure 
pursuant to Section 16(c)(1)(C) of the FNA.
    To comply with Section 16 of the FNA, State agencies conduct 
monthly reviews of a statistically representative sample of both 
participating SNAP households (active cases) and households for whom 
participation was denied, terminated, or suspended (negative cases). 
These reviews measure the accuracy of SNAP eligibility and ongoing 
allotment determinations and ultimately serve as the basis for the SNAP 
payment error rate (PER) and case and procedural error rate (CAPER).\2\ 
The results of these reviews provide feedback on State-by-State and 
national administration of the Program, including how State agencies' 
chosen policy options, waivers, and business processes affect the 
accuracy of their eligibility determinations. In short, the QC system 
allows FNS and the States to assess the integrity of SNAP by 
determining the extent to which the program is operating as required by 
statute and regulations. The system directly measures the accuracy of 
State actions to certify households as eligible for SNAP allotments and 
to determine the amount of those allotments, which are the actions that 
States should prioritize to ensure effective stewardship of taxpayer 
dollars and effective service to households in need.
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    \2\ In fiscal year 2012, the procedures for reviewing cases in 
the negative frame changed to include the State's procedural 
processes in determining a negative case's validity. FNS has 
referred to the negative error rate since then as the case and 
procedural error rate, or CAPER, to reflect this change.
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Farm Bill Provisions

    On December 20, 2018, the President signed Public Law 115-334, the 
Agriculture Improvement Act of 2018 (2018 Farm Bill). Section 4013(b) 
of the 2018 Farm Bill required the Department to issue an interim final 
rule to: (1) ensure the SNAP QC system produces valid statistical 
results; (2) provide for the oversight of contracts entered into by a 
State agency to improve payment accuracy; (3) ensure the accuracy of 
data collected in the QC system; and (4) provide for the evaluation of 
the integrity of the QC system for a minimum of two State agencies per 
fiscal year. Section 4013(e) of the 2018 Farm Bill also required that 
cost sharing for State computerization costs be, in part, contingent on 
State agencies granting FNS access to all State computer systems 
containing documentation and evidence related to SNAP eligibility. The 
Department determined that the most effective way to meet the statutory 
requirements was to issue two rules: (1) an IFR for the non-
discretionary provisions, which FNS believed were necessary to comply 
with the 2018 Farm Bill and would be effective immediately, and (2) a 
proposed rule for the additional, discretionary provisions to improve 
the integrity and data quality of SNAP QC. By doing so, the Department 
ensures that major discretionary changes to SNAP QC go through the full 
notice and comment process, which allows stakeholders an opportunity to 
be part of the rulemaking process.
    The Department codified all the non-discretionary requirements in 
Section 4013(b) in SNAP regulations by publishing the interim final 
rule (IFR) titled, ``Supplemental Nutrition Assistance Program: Non-
Discretionary Quality Control Provisions of the Agricultural 
Improvement Act of 2018'' on August 13, 2021 (86 FR 44575.\3\) A 
correction to that interim final rule was published on September 2, 
2021 (86 FR 49229 \4\) and the final rule was published on April 18, 
2023 (88 FR 23559 \5\).
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    \3\ https://www.govinfo.gov/content/pkg/FR-2023-04-18/pdf/2023-08122.pdf.
    \4\ https://www.govinfo.gov/content/pkg/FR-2021-09-02/pdf/2021-18743.pdf.
    \5\ https://www.govinfo.gov/content/pkg/FR-2023-04-18/pdf/2023-08005.pdf.
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Improper Payment Determinations

    The SNAP QC review process precedes Federal improper payment laws, 
including the Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 
116-117.\6\) These PIIA requirements include: identifying any case that 
a reviewer is unable to determine the accuracy of (known as an 
incomplete case) as an improper payment (31 U.S.C. 3352(c)(2)); and 
measuring technically improper payments, or payments in which a 
recipient was entitled to a payment but the payment failed to follow 
statutory or regulatory requirements (31 U.S.C. 3351(4)). With 
Congress' requirement to improve the SNAP QC system, the Department is 
including proposed changes in this rule that will better align SNAP 
with requirements in PIIA. In addition, the proposed shift in review 
focus for active cases (discussed later) will align the SNAP QC review 
process for determining SNAP payment errors more closely with the 
processes used to determine improper payments in other Federal programs 
that provide benefits to similar populations (e.g., Medicaid and the 
Earned Income Tax Credit).
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    \6\ S.375--116th Congress (2019-2020): Payment Integrity 
Information Act of 2019 [bond] Congress.gov [bond]Library of 
Congress: https://www.congress.gov/bill/116th-congress/senate-bill/375.
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Historical Information Supporting Congress' Request for Improvement and 
QC Reform

    The section that follow discusses challenges FNS faced and overcame 
that impacted the integrity of the QC system in the recent past; 
specifically, the challenges that occurred when State agencies 
introduced bias into the QC system's data. While FNS addressed the

[[Page 64758]]

issues and has since regained confidence in the integrity of the data 
collected by State agencies, additional improvements and changes to the 
QC system will help ensure SNAP's QC system will be less susceptible to 
bias. The historical information below offers context and support for 
Congress' request for improvement and the reform proposals in this 
rule.
    In 2015, an audit of SNAP QC's error rate determination process by 
the Department's Office of Inspector General (OIG)),\7\ and FNS's study 
on Enhancing Completion Rates for SNAP QC Reviews,\8\ both identified 
issues with the reliability of State-reported QC data. The OIG 
recommendations included that FNS amend and enforce its policies to 
ensure payment error rates are accurate and in compliance with 
regulations, and that FNS eliminate the two-comparison allotment test 
process, which is used to determine payment errors. FNS's Completion 
Rate study identified QC system issues including: the performance bonus 
system's creation of financial incentives for State agencies to 
underreport payment errors (which was subsequently eliminated by the 
2018 Farm Bill), and State agencies' improper coding of QC cases as 
incomplete in order to reduce their payment errors.
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    \7\ https://www.usda.gov/oig/webdocs/27601-0002-41.pdf.
    \8\ https://www.fns.usda.gov/snap/enhancing-completion-rates-supplemental-nutrition-assistance-program-snap-quality-control-reviews.
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State QC Integrity Reviews (QCIRs)

    To identify the full extent of the QC data reliability issues, FNS 
began QCIRs in April 2015 and completed reviews of all 53 State 
agencies by September 2016. The purpose of the QCIRs was to validate 
that State agency QC systems did not include bias, as bias impacts the 
integrity of the data. During these reviews, FNS was able to validate 
only 11 State agencies' QC systems for FY 2015 and found data integrity 
issues in the remaining 42 States. As a result, FNS was unable to use 
the States' QC data to establish State or national SNAP payment error 
rates for FY 2015 and FY 2016.
    The findings from the reviews fell into four categories related to 
integrity in the QC system and aligned with ways to mitigate errors. 
The first category centered on inadequate documentation. FNS found more 
than half of the State agencies were not properly documenting 
information in the QC case file, as required in the SNAP QC Review 
Handbook (the FNS-310).\9\ Inadequate documentation prevents FNS from 
having the information needed to do a thorough and independent 
validation of the cases completed by State agencies.
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    \9\ https://fns-prod.azureedge.net/sites/default/files/snap/FNS_310_Handbook.pdf.
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    The second category concerned improper use of error review 
committees. State agencies may use error review committees after State 
quality control reviewers (SQCRs) transmit completed QC cases to FNS, 
to identify corrective actions that may be needed to improve the 
accuracy of eligibility and allotment determinations. However, State 
agencies are strictly prohibited from using error review committees 
prior to the SQCR transmission of completed QC cases to FNS. On August 
1, 2005, after identifying concerns regarding the improper use of error 
review committees, FNS issued a policy memorandum \10\ on the proper 
use of an error review committee to develop corrective action to 
prevent future errors. The memo reiterated that FNS prohibited the use 
of such committees to mitigate errors in cases actively under review. 
Despite this longstanding guidance, in the FY 2015 QCIRs, FNS 
discovered more than half of the State agencies continued to use error 
review committees inappropriately to discuss and mitigate the errors 
found in cases actively under review before submitting review results 
to FNS.
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    \10\ https://fns-prod.azureedge.net/sites/default/files/snap/QCPolicyMemo05-01.pdf.
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    The third category of findings from the QCIRs related to the 
failure of more than half the State agencies to disclose complete case 
information to FNS, as required by 7 CFR 275.23(b). This finding 
included some State agencies refusing to give FNS access to their 
systems for auditing purposes, as required by Section 16(c)(4) of the 
FNA. Section 4013(a)(2) of the 2018 Farm Bill addressed this and 
required State agencies to give FNS access to their State systems for 
QC and oversight purposes. Section 4013(e)(2) of the 2018 Farm Bill 
required cost-sharing for computerization to be conditioned on State 
agencies being able to provide FNS access to their systems for audit 
and inspection purposes. The 2018 IFR codified the requirement to give 
FNS access, and this proposed rule includes the cost-sharing condition 
from Section 4013(e)(2) of the 2018 Farm Bill for State agencies to 
give FNS access.
    The fourth category of findings from the QCIRs found that more than 
half of the State agencies were incorrectly interpreting and applying 
certification policy, sometimes intentionally, to mitigate QC errors. 
For example, during QC reviews, some State agencies were using an 
inappropriate number of weeks or months to determine a household's 
earned income. This approach led to the QC reviewer artificially 
increasing or decreasing the earned income amount of the household, 
with the goal of obtaining a result that more closely matched the 
amount used at the eligibility and allotment determination, thus 
mitigating the likelihood and potential impact of a payment error.
    As a result of FNS's initial integrity findings in 2015, the 
Department of Justice (DOJ) began investigating State agencies for 
violations of Federal law in connection with the underreporting of SNAP 
QC payment errors. Between 2017 and 2021, DOJ settled with eight States 
for False Claims Act allegations of introducing bias into their QC 
processes. In addition, DOJ settled with a contracting company that 
provided QC support to all eight State agencies.

FNS Response

    In January 2016, in response to early findings from the QCIRs, FNS 
issued a policy memorandum \11\ to address concerns with the integrity 
of State agency QC systems. The memorandum reiterated and clarified FNS 
policies that are necessary to prevent bias from entering the QC 
system.
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    \11\ https://www.fns.usda.gov/snap/integrity-snap-quality-control-system.
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    In September 2016, after completing all QCIRs, FNS issued revisions 
to its primary QC case review policy manual, the FNS Handbook 310,\12\ 
to help address FNS' and OIG's concerns regarding the integrity of the 
QC system. These revisions reinforced the January 2016 policy 
memorandum and addressed other issues affecting QC system integrity, 
including documentation and verification in QC reviews. By November 
2016, FNS had trained all Federal quality control reviewers (FQCR) and 
SQCRs on the new manual and integrity-related provisions.
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    \12\ https://www.fns.usda.gov/snap/fns-handbook-310 https://www.fns.usda.gov/snap/fns-handbook-310.
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    During the QCIRs, and while working with State agencies to address 
findings and resolve corrective action plans, FNS found the complex 
structure of QC reviews contributed to not only unintentional mistakes, 
but also to an environment that allowed for both the manipulation and 
mitigation of SNAP QC payment error findings. For instance, the QC 
review begins with an examination of the sample month circumstances for 
a household, which could be any month of the household's certification 
period. However, because of the complexity of Federal SNAP

[[Page 64759]]

certification policy, as well as State SNAP policy options and waivers, 
reviews regularly involve a reviewer assessing household circumstances 
across multiple months. FNS determined this complexity creates an 
opportunity for both purposeful errors and unintentional review 
mistakes and, in some cases, can blur the connection between payment 
errors found during the QC review process and the relevant 
certification actions, which is where errors are occurring.
    Often it is not possible for SQCRs to complete cases due to 
difficulties associated with obtaining verifications for past months 
and securing household cooperation. For instance, to simplify 
administrative procedures, some State agencies have chosen to implement 
a policy that allows them to forego verification of shelter expenses at 
certification if the expenses are not questionable. In the QC system, 
there are no comparable options, and these expenses must always be 
verified. While certification rules allow for a waiver of the 
requirement to verify expenses that are not questionable,\13\ these 
rules do not waive the requirement that correct expenses be used to 
determine program eligibility and allotments. SNAP households may then 
be skeptical of the SQCR's request for verifications of their shelter 
costs since it was not required for the certification worker to 
determine an allotment amount, increasing the odds that the household 
will not comply with the QC review. Additionally, the household may not 
be able to supply verification because they do not have a copy of the 
required record or did not retain it, not having needed it previously. 
In this circumstance, the SQCR would determine the case incomplete 
since the required verifications were unavailable.
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    \13\ As determined by guidelines promulgated pursuant to 7 CFR 
273.2(f)(2).
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    The conclusion that the complexity of SNAP eligibility policy and 
the QC system's complexity played a major role in many of the integrity 
issues led FNS to explore ways to simplify and improve the QC review 
process. On June 1, 2018, the Department published a Request for 
Information (RFI) in the Federal Register (83 FR 25425 \14\) to solicit 
input on how best to simplify and improve the QC system. FNS received 
26 unique comments in response to the publication. This preamble 
references substantive comments from the 2018 RFI in the relevant 
sections that follow.
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    \14\ https://www.federalregister.gov/documents/2018/06/01/2018-11849/request-for-information-supplemental-nutrition-assistance-program-snap-quality-control-integrity-and.
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    FNS also conducted focus groups with stakeholders who work in State 
SNAP QC and certification policy, social science research partners with 
government programs, and hunger advocates on conceptual ideas for the 
proposed provisions in this rule. These focus groups assisted FNS in 
identifying areas of concern, particularly with changing the review 
focus to a narrower eligibility scope.
    Additionally, during national and regional conferences, State and 
Federal staff verbally expressed to FNS an interest in narrowing the QC 
review to focus solely on the eligibility action to simplify the QC 
review and increase compliance with QC review requirements while still 
maintaining a focus on measuring the validity of critical State agency 
decisions. This narrowed focus is consistent with how other social 
safety net programs (e.g., Medicaid, earned income tax credit) measure 
improper payments. These other programs do not measure ongoing 
administration of benefits, as is done in SNAP's current QC review 
process. Creating such an alignment would allow Congress and others to 
compare improper payments more effectively across social safety net 
programs.

SNAP QC--Current Processes

    To assist the reader in understanding the review process changes 
being proposed, this section discusses how the QC review process is 
currently structured. The SNAP QC system \15\ consists of two tiers, a 
State tier and a Federal tier. At the State agency level, a 
statistician develops a sampling plan consistent with Federal 
regulations at 7 CFR 275.11 that the State agency then submits to FNS 
for approval. Each month, according to that sampling plan, State 
agencies select a sample of active cases (7 CFR 275.12) and negative 
cases (7 CFR 275.13) from the universe of their SNAP caseload and 
conduct reviews of the cases to determine the accuracy of the 
determination and allotment amount. Active cases are comprised of those 
households who are participating in SNAP and negative cases are 
comprised of cases in which the State agency acted to deny, terminate, 
or suspend a household or applicant (7 CFR 275.10(a)).
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    \15\ Discussed throughout 7 CFR 275.
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    SQCRs must schedule and conduct face-to-face interviews with 
households selected for review in the active sample frame (7 CFR 
275.12(c)(1)).\16\ There are few exceptions to a face-to-face interview 
for QC. For instance, State agencies may conduct telephonic interviews 
for hard-to-reach Alaskan households (7 CFR 275.12(c)) or in situations 
of a declared disaster using the SNAP waiver process (7 CFR 272.3(c)). 
SQCRs use the information gathered during interviews along with 
information in the case files, various databases, and documentation 
from collateral contacts, such as neighbors, banks, and employers, 
during the review (7 CFR 275.12(c)(2)).
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    \16\ FNS temporarily provided State agencies the flexibility to 
conduct QC interviews by telephone to assist State agencies in case 
completion during the COVID-19 public health emergency. The 
flexibilities have been extended through September 2024.
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    The review itself consists of an examination of a random month 
during a case's certification period, called the sample month (7 CFR 
275.12(a). SQCRs verify all factors of eligibility and allotment 
issuance for that sample month and calculate an allotment amount based 
off that information, which is referred to as the household budget 
calculation (7 CFR 275.12(e)). They then compare that calculated amount 
to the amount that was issued to the household for that month This is 
called Comparison I. If Comparison I results in the household budget 
calculation producing an allotment amount for the sample month that is 
either over or under the household's authorized issuance amount for 
that month, in an amount that exceeds the current fiscal year's 
threshold for excluding small errors,\17\ the SQCR will conduct a 
second comparison, called Comparison II. With Comparison II, the SQCR 
would then examine the month in which the most recent certification 
action occurred. The SQCR would correct any mistakes made at the time 
of this certification action, compute another budget, calculate an 
allotment amount based on those findings, and compare the SQCR budget 
for the certification action to the amount that was authorized at the 
certification action. If there is also a difference in the SQCR's 
budget and the authorized budget for Comparison II, the SQCR uses the 
lesser of the two determined error amounts as the case's payment 
error.\18\ After States transmit cases to FNS, any QC finding of an 
overissuance must be reported to the State office responsible for 
claims, and underissuance cases must be reported to the State offices 
responsible for

[[Page 64760]]

supplements, to evaluate and address whether an action must be taken on 
the reviewed cases (7 CFR 275.12(f)). This requirement is not impacted 
by this rule.
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    \17\ Under Section 16(c)(1)(A)(ii) of the FNA, the tolerance 
level for excluding small errors is $37 for fiscal year 2014, 
adjusted by the percentage adjustment of thrifty food plan for each 
subsequent fiscal year. The most recently announced threshold, for 
FY 2023, is $54.
    \18\ As previously noted, the OIG's 2015 report recommended that 
this two-comparison allotment test be eliminated.
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    For all active frame cases,\19\ SQCRs enter their data into either 
a paper or automated version of the form FNS-380, Worksheet for QC 
Reviews (OMB Control Number: 0584-0074; Expiration Date: 07/31/2025), 
to document the information needed to make a determination about the 
accuracy of the case (7 CFR 275.21(b)). State agencies also code the 
results of the reviews for all active cases onto the FNS-380-1, the QC 
Review Schedule (OMB Control Number: 0584-0299; Expiration Date: 07/31/
2023; currently under review with OMB) (7 CFR 275.21(b)). State 
agencies then submit the completed forms through SNAP's Federally 
funded automated computer system, SNAP Quality Control System (SNAP-
QCS), for transmission to FNS (7 CFR 275.21(b)(1)). For negative frame 
cases, State agencies complete form FNS-245, Negative Case Review 
Schedule (OMB Control Number: 0584-0034; Expiration Date: 1212/31/2024) 
(7 CFR 275.21(b)). and submit completed forms through SNAP-QCS (7 CFR 
275.21(b)(1)).
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    \19\ QC cases in the active frame are comprised of households 
certified prior to or during the sample month and issued a SNAP 
allotment for the sample month. QC review years follow the Federal 
fiscal year from October through September the following year.
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    FNS then works to validate the State agency findings. FQCRs, who 
are in FNS regional offices, review a subsample of the active cases 
reviewed by State agencies (7 CFR 275.3(d)(1)(i)). The subsample is 
comprised not only of cases State agencies complete, but also of all 
active cases the State agencies selected but were unable to complete, 
and all cases that were determined by the State agency to be ``not 
subject to review.'' \20\ After FQCRs identify the cases for the 
subsample, they then request the relevant QC case file documents from 
the State agencies and conduct a comprehensive, independent review of 
each case (7 CFR 275.3(d)(1)(ii)).\21\ After case reviews are complete 
and final determinations made, FNS calculates two error rates: (1) the 
payment error rate (PER) for the active sampling frame (7 CFR 
275.3(d)(1)); and (2) the case and procedural error rate (CAPER) for 
the negative sampling frame (7 CFR 275.3(d)(3)). FNS also calculates an 
annual application timeliness rate for State agencies with data from 
the active sampling frame.
---------------------------------------------------------------------------

    \20\ ``Not Subject to Review'' is a term that refers to cases 
that are not subject to quality control review. This means they do 
not meet the requirements to be reviewed by a QC reviewer. Examples 
include cases under active investigation by the State's fraud unit 
and cases where the household did not receive an allotment for the 
sample month under review.
    \21\ The FQCR review may result in agreement or disagreement 
with the State's findings. When there is a disagreement, the State 
can dispute the Federal finding. If the State office and RO cannot 
agree on the outcome of a case, the State may appeal to the national 
arbitrator, a neutral third party whose decisions are final.
---------------------------------------------------------------------------

    The PER is based on the difference between the amount of allotments 
issued to households and the amount those households should have 
received had their cases been processed correctly (7 CFR 275.23(b)). 
The overall PER is the sum of two breakdowns: underpayment and 
overpayment error rates. For CAPER, the review of negative actions 
considers procedural aspects of case processing in addition to whether 
the action to deny, suspend, or terminate a household was accurate. 
Procedural components of this review include timeliness of the action 
and accuracy of the household notification, among other things. The 
negative review results in a determination of whether the negative 
actions were valid or invalid (7 CFR 275.13(c)(1)). The CAPER is based 
on what percentage of the negative actions reviewed were invalid 
compared to the total number of negative actions processed by the State 
agency.

New Proposed QC Approach

    The rest of this preamble will share the Department's proposals for 
this rulemaking. The Department proposes to improve the SNAP QC active 
review process using lessons learned from the QCIRs, the OIG audit, the 
completion rate study on QC, the 2018 RFI \22\ on QC, and other 
activities, such as technical assistance, that FNS has completed since 
FY 2015. As such, the Department is proposing a different active case 
review that: (1) would be less complicated, thus making it easier for 
State agencies and households to comply with, FNS to oversee, and less 
susceptible to bias; and (2) would still be capable of collecting 
detailed program information regarding State agency administration and 
the over and under issuance of SNAP allotments. In addition, the 
proposed active review would resolve an ongoing concern from OIG about 
how SNAP QC's use of Comparison I and Comparison II resulted in a 
measurement from two different points in time.
---------------------------------------------------------------------------

    \22\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
---------------------------------------------------------------------------

    SNAP regulations require all SNAP State agencies to operate a QC 
system (7 CFR 275.10(a)). Although the 2018 IFR increased various 
reporting and recordkeeping requirements for State agencies to comply 
with the 2018 Farm Bill, the active review process for the SNAP QC 
system has remained relatively unchanged since February 1984 (49 FR 
6292) \23\ and can be improved upon. Since SNAP's QC system existed at 
least 25 years prior to the first Federal improper payment laws, such 
as the Improper Payments Information Act of 2002 (IPIA). SNAP's active 
QC review methodology and processes require adjustment to come into 
alignment with other Federal programs where the improper payment 
determination procedures were created after the first Federal improper 
payment laws and associated regulations and guidance came into 
existence.
---------------------------------------------------------------------------

    \23\ https://archives.federalregister.gov/issue_slice/1984/2/17/6278-6313.pdf#page=33.
---------------------------------------------------------------------------

    The proposed process would change the active case review to focus 
on eligibility actions instead of a random, point-in-time review for 
each case. This proposed change would eliminate the two-comparison 
allotment tests (Comparison I and Comparison II) from the QC review and 
instead focus on eligibility determinations, consider cases that a 
State agency cannot validate as total dollar errors, and alter the 
sampling and sampling plan requirements to correspond to the changed 
review focus.
    To help the reader understand the flow of the proposed provisions 
that follow, the provisions are organized in the same order as existing 
regulations found in the Code of Federal Regulations at 7 CFR part 275. 
It is important to note, this is a proposed rule that requires public 
comment before a final rule may implement any changes to SNAP's QC 
system. The Department proposes the following provisions for comment.

General

    Prior to discussing the provisions, the Department would like to 
convey that this rule is very technical in nature. The provisions 
discussed include specific detail about QC review processes and 
detailed statistical formulas necessary to carry out the QC process. 
The Department will continue to explain technical information 
throughout this proposed rule when able; however, in areas where 
precision and specific vocabulary are necessary to accurately convey 
the proposal, such as with statistical formulae, an explanation in more 
colloquial terms could result in an inaccurate portrayal of the 
proposed concepts. Thus, the technical language will remain.

[[Page 64761]]

Terminology Updates

    In 7 CFR parts 271 and 275, the Department proposes to update or 
remove outdated and duplicative terminology and update currently 
applicable terminology to reflect the proposed review process. The 
following terms are no longer current: ``negative case error rate'' (or 
``negative error rate'') and ``Immigration and Naturalization Services 
(INS).'' Therefore, the Department proposes to change these to ``case 
and procedural error rate (CAPER)'' \24\ and ``United States 
Citizenship and Immigration Services (USCIS),'' respectively. The 
Department proposes to update the definition of ``overissuance'' to 
remove reference to paper food stamp coupons. The Department proposes 
to revise the definitions for ``active case,'' ``error,'' ``review 
date,'' and ``sample month'' in 7 CFR 271.2 to reflect changes made by 
this proposed rule. Additionally, the term ``active case error rate'' 
is currently used interchangeably with the term ``payment error rate'' 
throughout 7 CFR 275. To avoid confusion, the Department proposes to 
use ``payment error rate'' consistently throughout 7 CFR 275.
---------------------------------------------------------------------------

    \24\ In fiscal year 2012, the procedures for reviewing cases in 
the negative frame, changed to include the State's procedural 
processes in determining a negative case's validity. FNS has 
referred to the negative error rate since then as the case and 
procedural error rate, or CAPER, to reflect this change.
---------------------------------------------------------------------------

Subpart A--Administration

7 CFR 275.2(b)--Staffing Standards

    The Department proposes to add a provision in the Staffing 
Standards section under 7 CFR 275.2(b) to specify the expectation that 
State agencies ensure the independence and objectivity of the merit 
staff performing QC case reviews. The QC integrity reviews found 
instances where State agency managers were putting undue influence on 
SQCRs to find that the eligibility worker's initial determination was 
correct, as opposed to independently focusing on the accuracy of the 
case, which is the purpose of the QC review. A separate audit completed 
by USDA OIG further supported these findings, as well as action by DOJ 
to settle allegations of violations of Federal law with eight State 
agencies. These findings provide substantial evidence that SQCRs 
reporting in the organizational structure to the same individuals 
responsible for overseeing eligibility determinations has an adverse 
effect on their ability to objectively review cases and determine 
errors. To address these issues and ensure the accuracy of the PER and 
CAPER estimates, the Department proposes to require a new provision in 
7 CFR 275.2(b) that State agencies take proactive measures to ensure 
SQCRs work independently and are free from undue influence by ensuring 
the staff used to conduct QC reviews operate independently from those 
responsible for overseeing the eligibility determination process to 
ensure objective and accurate assessments of the Performance Reporting 
System. For example, QC staff would not have the same immediate 
supervisor or director as the eligibility staff.
    In addition, the Department proposes to clarify the components that 
constitute prior knowledge for purposes of staff disqualification under 
7 CFR 275.2(b). The focus on integrity and bias in SNAP's QC system 
generated concerns in State agencies about SQCRs unintentionally 
biasing the QC process. FNS has heard from State agencies, anecdotally, 
that QC workers were concerned that a staff person might know 
information about a household one of their colleagues was reviewing but 
felt that disclosing that information would be considered a prohibited 
practice. The Department proposes to address this issue by removing the 
current language at 7 CFR 275.2(b) and adding a modified provision to 
QC's Staffing Standards at 7 CFR 275.2(b)(2) clarifying that even 
though State agency staff must disqualify themselves from directly 
working on a QC review if they have prior knowledge of a household, 
they are allowed to participate in a QC review as a collateral contact 
\25\ of the household. In such situations, the staff must follow the 
governing rules regarding collateral contacts at 7 CFR 273.2(f)(4)(ii).
---------------------------------------------------------------------------

    \25\ For a definition of collateral contact, see 7 CFR 
273.2(f)(4)(ii)--https://www.ecfr.gov/current/title-7/subtitle-B/chapter-II/subchapter-C/part-273#p-273.2(f)(4)(ii).
---------------------------------------------------------------------------

7 CFR 275.2(d)--FNS Access to State Systems

    Section 4013(e)(2) of the 2018 Farm Bill--which amends Section 
16(g)(1)(A) of the Food and Nutrition Act of 2008 (codified as 7 U.S.C. 
2025(g)(1)(A))--specifies that cost sharing for computerization for 
systems is an allowable SNAP administrative expense only when, among 
other criteria, the Secretary determines the systems to be accessible 
to the Department for review and audit purposes. Therefore, to 
implement this statutory provision, in the paragraph at 7 CFR 275.2(d), 
the Department is requiring cost sharing for State agency system costs 
to be conditioned on, in part, FNS having access to all State agency 
records and systems in which those records are contained.\26\ The 
Department believes this will incentivize State agencies to make the 
necessary changes to come into compliance with the requirement of 
allowing remote access to State agency computer systems so that Federal 
QC staff have access to the full case record for all QC sampled cases 
to ensure the accuracy of the collected data. FNS will continue to work 
with State agencies collaboratively to establish data sharing and 
system integrity agreements to facilitate the required systems access. 
This new sentence in 7 CFR 275.2(d) will reference existing regulations 
and procedures for the suspension or disallowance of administrative 
funds found at 7 CFR 277.16 if State agencies do not comply with the 
requirement.
---------------------------------------------------------------------------

    \26\ State systems contain information on participants in a 
multitude of different programs, each of which can have (as some 
currently do) statutory and regulatory language prohibiting the 
disclosure of such information outside of said program. As such, the 
State systems must be able to limit user access to SNAP information 
only before sharing the system with FNS for SNAP QC purposes to 
ensure compliance with Federal law.
---------------------------------------------------------------------------

7 CFR 275.3(d)--Sampling--Federal Sub Sample

    To be consistent with the changes proposed for State agency 
sampling in 7 CFR 275.11, discussed later in this rule, the Department 
proposes at 7 CFR 275.3(d)(1)(i)(A) to only have one minimum Federal 
subsampling calculation table to determine the Federal subsampling pull 
for the re-review of active cases. In addition to the change in Federal 
subsample size, the Department also proposes the Federal subsample be 
allocated across five strata in order to capture cases from each of the 
points in time where the State agency makes a determination to 
authorize or re-authorize benefits and to be consistent with the 
weighting that is proposed to determine the State agency's sampling 
frame. The five strata reflect all the possible action types and 
reporting periods. Since the reporting system and certification period 
length assigned at certification impact the number of reports that will 
end up in the sampling universe under the proposed sampling procedures, 
the five strata as well as weighting are used to ensure that all types 
of households are included in the sampling universe and to even out 
selection probabilities so that all cases have a chance to be selected 
for sampling in determining the SNAP PER. The five strata are based on 
the combination of action types (i.e., certification, recertification, 
and when a required monthly, quarterly, or periodic

[[Page 64762]]

report is due and an allotment is issued in the following month) and 
reporting period (i.e., less than six months, exactly six months, and 
more than six months). FNS chose certifications, recertifications, and 
required reports with allotments in the following month because they 
are points in which the State agency must make an eligibility 
determination or terminate the household from the Program. FNS based 
the proposed strata on an analysis of the FY 2017 SNAP QC data (see 
table).

------------------------------------------------------------------------
 Strata      Action type      Reporting period   Frequency    Percentage
------------------------------------------------------------------------
A.......  Certification/     Less than 6                365          4.9
           recertification.   months.
B.......  Redetermination..  Less than 6                 94          1.3
                              months.
C.......  Certification/     Exactly 6 months.        3,873         52.2
           recertification.
D.......  Redetermination..  Exactly 6 months.        1,628         21.9
E.......  Any *............  More than 6              1,457         19.6
                              months.
------------------------------------------------------------------------
* Includes the three actions: certification, recertification, and
  redetermination.

    The proposed changes to determine the Federal subsample would be 
necessary to determine State agency PERs based on the new proposed 
methodology. Under the proposed changes, the Federal subsample size 
would be determined using the following table:

------------------------------------------------------------------------
Average monthly reviewable caseload (N)   Federal subsample target (n')
------------------------------------------------------------------------
60,000 and over........................  n' = 400.
10,001 to 59,999.......................  n' = .005 N + 100.
10,000 and under.......................  n' = 150.
------------------------------------------------------------------------

    Once the Federal subsample size n' is determined using Table 1 
above, the Federal subsample must be allocated across the five strata 
proportionally to the State final weights to ensure the Federal 
subsample is self-weighting and there is no loss of precision due to 
differential sampling probabilities. The Federal subsample size for 
each stratum shall be determined as follows:
[GRAPHIC] [TIFF OMITTED] TP19SE23.097

    In the table formulas above: N is the sampling universe/monthly 
caseload; F is the sampling frame; n is the state sampling size; n' is 
the Federal subsample size; W is the state sampling weights; and W' is 
the Federal sampling weights. For stratum i, the Federal subsample size 
n'i shall be proportional to the sum of the final state 
weights for that stratum, nixWi = Ni, in other words

[[Page 64763]]

[GRAPHIC] [TIFF OMITTED] TP19SE23.098

This means that the final weight for the cases selected for the Federal 
subsample from stratum i, W'i, is given by:
[GRAPHIC] [TIFF OMITTED] TP19SE23.099

for every i, which is a constant across the strata.

7 CFR 275.3(d)(4)(i)(A)--Federal Monitoring--Arbitration

    Currently, when there is a dispute between a State agency and FNS 
regarding a finding (whether a case was correct, overissued, 
underissued, or was ineligible as of the review date) or disposition 
(whether a case was complete, not subject to review, incomplete, or the 
case was deselected) of a QC case, the State agency may request 
arbitration from the FNS Arbitrator. FNS's Arbitrator is the SNAP 
Administrative and Judicial Review Branch. This Branch includes 
administrative review officers who serve as a neutral third party, as 
they do not directly work with SNAP certification policy or quality 
control. The disputes subject to arbitration are limited to 
disagreements over finding or disposition only and the arbitrator's 
decision on a case is considered final and not subject to subsequent 
appeal. Any other disagreements should be handled through an informal 
resolution process, which is separate from the arbitration process.
    FNS issued a policy memorandum dated November 7, 2003, that 
provided procedures for arbitrating application processing timeliness 
(APT) disagreements when the APT measure was first introduced. FNS 
intended the memorandum to be temporary, covering FY 2003 only, but did 
not identify an expiration date. The preamble in the final rule, 
Quality Control Provisions of the Mickey Leland Childhood Hunger Relief 
Act (62 FR 29652 \27\), published June 2, 1997, detailed the reasoning 
for why arbitrations were only to be used for finding and disposition 
disagreements. The Department noted that arbitrating ``agree cases,'' 
which encompasses disagreements solely on APT, would adversely impact 
the accuracy and timeliness of the arbitration process. FNS discovered 
in 2017 that some FNS regional offices were still allowing their State 
agencies to arbitrate APT-only disagreements. The FNS national office 
provided clarification through policy guidance, but to clarify the 
Department's original intent in the 1997 Rule, the Department proposes 
to update language in 7 CFR 275.3(d)(4)(i)(A) to clarify that, other 
than those circumstances specified in regulations, other disagreements 
would not be provided arbitration rights.
---------------------------------------------------------------------------

    \27\ https://www.federalregister.gov/documents/1997/06/02/97-13946/food-stamp-program-quality-control-provisions-of-the-mickey-leland-childhood-hunger-relief-act.
---------------------------------------------------------------------------

    In addition, current regulations instruct State agencies to send 
arbitration requests to their FNS regional office, addressed to the 
attention of the FNS Arbitrator. Over time, FNS found that by providing 
the Arbitrator's contact information for State agencies to make direct 
arbitration requests, FNS was not only able to provide better customer 
service, but also have a more efficient request process. Therefore, the 
Department proposes to update its regulations at 7 CFR 275.3(d)(4)(iv) 
to require that a State agency send its request for arbitration 
directly to the FNS Arbitrator and copy the appropriate FNS regional 
office.

Subpart C--Quality Control (QC) Reviews

7 CFR 275.11--Sampling--General

    Currently, the universe (all cases with the possibility of being 
selected for the QC sample) for SNAP's active frame includes all 
households receiving SNAP allotments in any given sample month. Under 
this proposed rule, the active frame sample universe would no longer 
include all households receiving SNAP allotments in any given sample 
month. Instead, only those households that experienced an eligibility 
action--i.e., certification for SNAP, recertification for SNAP, or 
requirement to submit a required monthly, quarterly, or periodic report 
in the sample month and an allotment is issued in the following month--
would constitute the universe for the active frame. The following 
paragraphs in this preamble explain the proposed new sampling plan in 7 
CFR 275.11, which would then be reviewed according to the proposed 
sampling review procedures in 7 CFR 275.12.

7 CFR 275.11(a)(1)-(2)--Sampling Plan--Content and Criteria

    Currently, at 7 CFR 275.11(a), State agencies have two options for 
designing their minimum QC sampling size: a standard or a reduced 
sample size. The Department proposes to remove the language about 
alternative sampling designs at 7 CFR 275.11(a)(2) since, unlike the 
current methodology, the proposed methodology would not be conducive to 
State agencies utilizing a reduced sample size due to issues with 
reliability of the estimates that would result from the sample size 
reduction. This would include the removal of alternative sampling 
related rules in subsections 7 CFR 275.11(a)(2)(iii) and 7 CFR 
275.11(a)(2)(iv). In addition, the Department proposes to add language 
in section 7 CFR 275.11(a)(2)(ii) about the sample size selection to 
help State agencies ensure they follow the procedures set forth in 
subsections (b), (c), (d), (e), and (f).

7 CFR 275.11(a)(3)--Sampling Plan--Design

    Computer programs and systems that assist in selecting probability 
samples have progressed considerably since the publication of the 
current QC regulations in 1977. Now, systematic sampling is but one of 
the many possible ways to select a probability or random sample, and 
there are new statistical software tools available that can easily draw 
a random sample without using systematic sampling. The Department 
proposes to amend the recommendation at 7 CFR 275.11(a)(3) that State 
agencies should primarily utilize systematic sampling to also recommend 
that State agencies be open to considering other sampling software 
tools.
    In addition, the Department proposes to revise the language at 7 
CFR 275.11(a)(3), describing the proposed active sampling design. This 
revised language provides specific details about how State agencies 
would need to design their new sampling procedures

[[Page 64764]]

to align with the new review process, including how to construct the 
new sampling frame and which variables to use to create the proposed 
strata (discussed further below). The revision would also clarify that 
each month, State agencies must select a sample size equal to one 
twelfth of the annual sample size specified in 7 CFR 275.11(b) (rounded 
to the next whole number) to ensure the sample accurately reflects the 
entire year of SNAP cases.

7 CFR 275.11(b)(1)-(2)--Sample Size--Active Cases and Negative Cases

    The Department proposes to simplify and standardize the active case 
review process by (1) eliminating the current allowance for choosing 
between two different possible sample sizes and (2) increasing the 
current sample size for active cases specified in 7 CFR 
275.11(b)(1)(iii) by 30 percent. Increasing the overall sample size 
ensures that the new sampling design would deliver the same level of 
precision as the current sampling design by providing for sufficient 
sample sizes within each stratum. Without this increase in overall 
sample size and proper allocation among the strata, the new design 
would over-represent cases with shorter reporting periods and under-
represent those with longer reporting periods. Having a larger overall 
sample size is necessary to ensure statistical validity of the sample, 
which results in a more precise PER estimate. The Department proposes 
to remove the choice of the other sample size option, currently 
described at 7 CFR 275.11(b)(1)(ii), because in order for the new 
sampling methodology to provide a basis for calculating a national PER, 
all States must follow the same sampling design; therefore, a second 
option is no longer appropriate. Given the proposed deletion of 7 CFR 
275.11(b)(1)(ii), the Department proposes to re-designate the remaining 
paragraphs of 7 CFR 275.11(b)(1) that follow paragraph 7 CFR 
275.11(b)(1)(i).
    In the final rule published on June 11, 2010, titled, 
``Supplemental Nutrition Assistance Program: Quality Control Provisions 
of Title IV of Public Law 107-171'' (75 FR 33422),\28\ the regulations 
pertaining to SNAP negative case reviews (the review of cases that were 
denied, terminated, or suspended) were changed to emphasize customer 
service. This rule required State agencies to determine whether the 
action on the negative case under review was correct and whether the 
State agency correctly notified the household or participant \29\ in 
clearly understandable language of the adverse action on their case.
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    \28\ https://www.govinfo.gov/content/pkg/FR-2010-06-11/pdf/2010-13446.pdf.
    \29\ Not all adverse actions are against an entire household. 
Sometimes an adverse action will occur against a specific 
participant in a household.
---------------------------------------------------------------------------

    The Department implemented this change in FY 2012, and later began 
informally referring to the associated error rate as the case and 
procedural error rate, as opposed to the negative error rate, to 
reflect the change in focus. This practice of referring to the error 
rate for negative case reviews as CAPER continues today and is the 
commonplace term State agencies and FNS use. As such, the Department 
proposes to amend 7 CFR 275.11(b)(2)(i) to include the explanation that 
negative case reviews result in determining the ``case and procedural 
error rate.''
    The Department found State agencies typically utilize the minimum 
annual sampling size for their negative case samples. Just as with the 
proposed removal of the alternative active case sampling design 
discussed earlier, the Department proposes to amend 7 CFR 
275.11(b)(2)(i) to remove the alternative design option for the 
negative sample size so that sample sizes are standard, provide more 
precision for error rate estimates, and align with the language used 
for the selection of active cases in 7 CFR 275.11(b)(1)(i).

7 CFR 275.11(b)(4)--Sample Size--Alternative Designs

    Consistent with the proposed removal of alternative design options 
for both the active and negative sampling frames, the Department also 
proposes to remove the regulatory provisions at 7 CFR 275.11(b)(4) 
through 7 CFR 275.11(b)(4)(iii) since those paragraphs discuss the 
options for State agencies concerning alternative QC sampling sizes.

7 CFR 275.11(c)(2)--Sample Selection--Corrections

    To ensure they select enough cases to review annually, State 
agencies often pull supplemental samples when they find they do not 
have enough cases to meet FNS requirements. FNS refers to this act of 
pulling a supplemental sample in current regulations at 7 CFR 
275.11(c)(2) as a `correction.' Corrections can be necessary for many 
reasons but most often occur because some cases in the sample were 
later determined to be not subject to QC review or because an increase 
in the average monthly reviewable caseload necessitated an increase in 
monthly sample size. The Department proposes to amend the provisions 
regarding corrections at 7 CFR 275.11(c)(2) to clarify that the new 
procedures for sample size, sample selection, sample frame, and sample 
allocation in proposed paragraphs 7 CFR 275.11(b), (c), (e), and (g) 
are also applicable to corrections, or in other words, when State 
agencies pull additional cases to compensate for under sampling.

7 CFR 275.11(e)--Sample Frame

    Current regulations at 7 CFR 275.11(e) allow State agencies a 
`choice' in what their sampling frame must include. The Department 
proposes to remove language concerning the `choice' of the sampling 
frame since the Department's proposed methodology requires State 
agencies to use a specific frame for sampling.

7 CFR 275.11(e)--Sample Frame--Active Cases

    The Department proposes to change its active case sampling frame 
description at 7 CFR 275.11(e)(1) to include only households that 
either experienced an initial certification action, a recertification 
action, or were required to submit a required monthly, quarterly, or 
periodic report in the sampling month and an allotment is issued in the 
following month. As noted earlier, this simplified QC process would 
shift the review focus to when an eligibility action occurred rather 
than a review of a random month within a household's certification 
period.
    The simplification of only reviewing the eligibility action would 
ease compliance with QC requirements for both recipients and SQCRs by 
eliminating the complex aspects of the current review process and by 
making the SNAP review consistent with other benefit programs' improper 
payment review procedures. The complexities of the current process can 
contribute to State agencies having low QC case review completion rates 
and to, the integrity issues discussed throughout this proposed rule.

7 CFR 275.11(f)--Sample Universe--Active Cases

    Regulations at 7 CFR 275.11(f)(1) inform State agencies which cases 
they must exclude from their sampling frames. Consistent with proposed 
changes in this rule to the sampling frame, the Department is also 
proposing corresponding changes for those cases the State agency must 
exclude. The Department proposes to amend one condition and remove one 
condition from the current list of excludable households for review at 
7 CFR 275.11(f)(1).

[[Page 64765]]

    The Department proposes to amend the provision at 7 CFR 
275.11(f)(1)(iv) that addresses the exclusion of a household appealing 
an adverse action when the review date falls within the time period 
covered by continuing participation pending a fair hearing, or in other 
words, the time the household continues to receive benefits while they 
await their fair hearing. Instead of the condition being ``when the 
review date falls within the time period covered by continuing 
participation pending the hearing,'' the Department proposes to exclude 
all cases under review where the household is appealing an adverse 
action for any of the sampled actions, since the benefit determination 
is subject to change based on the result of the appeal.
    The Department also proposes to remove the condition for exclusion 
at 7 CFR 275.11(f)(1)(v) that indicates a household can be excluded 
when the household is receiving restored benefits but is not 
participating based upon an approved application. This condition no 
longer applies to the new proposed sampling method because only 
approved applications will be included in the sample. As such, only the 
instruction that, ``Other households excluded from the active case 
universe during the review process are identified in 7 CFR 275.12(g)'' 
would remain in this paragraph.

7 CFR 275.11(g)-(h)--Active Sample Allocation and Weighting

    In order for the new sampling method to be reflective of the SNAP 
caseload, the Department proposes to add two new paragraphs at 7 CFR 
275.11(g), entitled ``Active sample allocation'' and 7 CFR 275.11(h), 
entitled ``Weighting,'' which will describe how State agencies would 
allocate the sample across the strata defined in the new sampling 
design and compute the weights needed to make the sample representative 
of the sample universe/target population.
    As described earlier, the Department proposes to add requirements 
at 7 CFR 275.11(g) for the active sample allocation so that active 
cases are allocated to five pre-defined strata. These five strata are 
based on the combination of action type (i.e., certification, 
recertification, and when a required monthly, quarterly, or periodic 
report is due and an allotment is issued in the following month) and 
reporting period (i.e., less than six months, six months, and more than 
six months). This proposed change would ensure the resulting allocation 
will contain sufficient sample sizes within each stratum and cases from 
each stratum are represented in the sample.
    In addition, the Department proposes to add a section, 7 CFR 
275.11(h) ``Weighting'' to illustrate how to compute the weights needed 
to make the sample representative of the universe/target population. 
The new sampling design samples cases with unequal probabilities across 
the strata and, therefore, some cases have higher selection 
probabilities than others. State agencies must provide FNS the data 
necessary to compute the weights. To compensate for the unequal 
probabilities of selection across the strata, the Department is 
proposing the following formula for the weights Wi:

Wi = (Ni/Fi) x (Fi/
ni) = Ni/ni for i = a,b,c,d,e,

Where:

--Wi is the weight for cases sampled from stratum i (the 
new proposed sampling design has five strata);
--Ni is the size of stratum i in the sampling universe/
target population;
--Fi is the size of stratum i in the sampling frame;
--ni is the number of cases sampled from stratum i.
--Fi/ni is in the inverse of the sampling 
probability for cases sampled from stratum i (also called sampling 
weight), while Ni/Fi represents the post-
stratification weights and corrects for the biases in the sampling 
frame. This ensures the sample represents the sampling universe, 
i.e., the SNAP caseload.

    State agencies would be responsible for providing to FNS the counts 
Ni, Fi, and ni (for i = a,b,c,d,e).

7 CFR 275.12--Review of Active Cases--General

    By focusing only on eligibility actions, the Department anticipates 
the information obtained through the modified QC review process will be 
more useful for program improvement purposes, as it will be focused on 
the main touchpoints of a SNAP case and will be collected closer in 
time to those touchpoints. Currently, SNAP's error rates are a 
combination of errors measured at random points of time within a 
household's certification period and at points of eligibility. By 
narrowing the review, FNS would issue an error rate derived from the 
time of most recent eligibility action for all cases reviewed. This 
would allow FNS to more accurately identify where errors are occurring 
and allow State agencies to correct more effectively the causes of 
error at certification or the point of most recent eligibility action. 
FNS would also be collecting information at a point in time that is 
closer to when many actions and their corresponding errors are 
occurring, making the monitoring of State agency performance timelier 
than is possible under the current QC system.
    Under the new proposed methodology, the PER would be representative 
of points in time when households have an obligation to report or 
confirm their circumstances and attest the information is accurate. In 
addition, at those points in time, the State agency also has an 
obligation to verify those household circumstances and accurately 
determine the household's eligibility and benefit level. With this new 
approach, payment errors would specifically reflect errors made 
directly as a result of the benefit determination process, a connection 
that has proven challenging with the current review system due to the 
distance in time between the selected review month and the action 
causing the errors. By identifying errors in a timelier manner, FNS 
could raise deficiencies in program operations more quickly and 
effectively, and State agencies and FNS would be able to address the 
root causes of errors more quickly than under the current QC system.
    Another significant impact of moving from a random ``point in 
time'' review of the present QC system to this modified ``eligibility 
action-only'' review is that FNS would no longer require SQCRs to re-
create all of a household's sample month circumstances for a random 
month within a certification period. Currently, to review the sample 
month (which can be at any point in time during a household's 
certification period), SQCRs must collect and validate the household's 
circumstances for that new month, which most of the time does not exist 
in the case record, to determine whether the allotment they received 
that month is accurate for what they should have received based on 
those circumstances. In order to determine whether the sample month's 
allotment determination by the SQCR is accurate, the SQCR must often 
request information about household circumstances for the past months 
in between the sample month and the most recent certification month, if 
they are not one in the same, making the review process very complex 
and prone to inaccurately applying QC policy since it relies on the 
ability to collect information from SNAP households for, in some 
instances, a year or more in the past. The reason these are so 
challenging to obtain is that SNAP households do not always have stable 
incomes, bank accounts, and contracts with cellular phone carriers or 
other utility companies, for example, that

[[Page 64766]]

would make verifications easy to recall months later.\30\
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    \30\ Enhancing SNAP Quality Control Completion Rates Final 
Report, January 2016, https://fns-prod.azureedge.us/sites/default/files/ops/SNAPQCCompletion.pdf.
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    In the new approach, SQCRs would still be required to verify the 
household's circumstances for the sample month; however, the sample 
month would be the month the action took place, eliminating the need to 
look at previous months. As a result, the process would require fewer 
months to review, and much of the information a SQCR needs to verify 
the household's circumstances and determine the allotment's accuracy 
should already be available in the case record. In addition, if 
verifications do not already exist in the case record and SQCRs must 
either obtain this information from the SNAP household or collateral 
contacts, it would be less challenging for them to produce verification 
from the previous month or two than it would be for them to produce 
verification issued at some point in the previous four to twelve 
months, as is necessitated under the current system. Since this change 
would make obtaining verifications less challenging, compliance from 
households and collateral contacts will likely increase and SQCRs would 
be able to complete more of their QC case reviews, resulting in a more 
accurate PER.
    Given the proposed change in review focus, FNS considered whether 
an ex parte review, in which the SQCR relies solely on the case record 
and does not contact the household, would be appropriate. FNS 
determined that relying solely on an ex parte review for QC reviews 
would not be appropriate for several reasons. First, the purpose of the 
QC review is to determine the accuracy of the allotment authorized by 
the State, and to accomplish that purpose, SQCRs must verify all 
household circumstances in the sample month. However, using allowable 
administrative flexibilities, many States choose to ease verification 
requirements at certification to reduce the administrative burden on 
applicants. As a result, verifications of all household circumstances 
may not be included in the case record and available for QC reviewers. 
Generally accepted government auditing standards (GAGAS) require 
reviewers to obtain sufficient, appropriate evidence to provide a 
reasonable basis for addressing review objectives and supporting their 
findings and conclusions.\31\ If SQCRs rely solely on the information 
in the case record, they may not have sufficient evidence from which to 
assess the accuracy of eligibility and benefit determinations. In 
addition, GAGAS require reviewers to have a certain level of 
independence when conducting quality control evaluations and audits, 
and to avoid situations that could lead reasonable and informed third 
parties to conclude they are not independent and thus are not capable 
of exercising impartial judgment.\32\ If SQCRs were to rely solely on 
the information in the case record, they may not be able to 
independently review all elements of eligibility and benefit 
determinations.
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    \31\ See Section 5.08 of the Government Auditing Standards, GAO 
21-368G, April 2021, Government Auditing Standards: 2018 Revision 
Technical Update April 2021 (Supersedes GAO-18-568G) [bond] U.S. 
GAO.
    \32\ See Section 3.19 of the Government Auditing Standards, GAO 
21-368G, April 2021, Government Auditing Standards: 2018 Revision 
Technical Update April 2021 (Supersedes GAO-18-568G) [bond] U.S. 
GAO.
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    This proposed review would still require a complete and independent 
review of the household's circumstances to assess whether the State 
agency accurately determined the household's eligibility and SNAP 
benefit amount. By focusing on the eligibility action and not on a 
random sample month, FNS hopes to place greater emphasis for corrective 
action on making more accurate benefit determinations through better 
documentation, verification, and accountability.
    The change in review procedure would also eliminate the current 
SNAP QC Comparison I and Comparison II process when determining a QC 
case's reportable error (an error that is above the current fiscal year 
threshold for excluding small errors).\33\ As described earlier, SQCRs 
and FQCRs conduct up to two assessments, Comparison I and Comparison 
II, to determine the final error amount in a case. In Comparison I, the 
reviewer determines the accuracy of the benefit received by the 
household based on the household's sample month circumstances. If the 
reviewer finds an error above the national error tolerance threshold 
(presently $54) in Comparison I, the reviewer completes Comparison II 
by examining the accuracy of the certification action that authorized 
the sample month's benefits. The final error amount is the lesser error 
amount of the two comparisons. In OIG's audit report titled, ``FNS 
Quality Control Process for SNAP Error Rate,'' \34\ OIG asserted that 
these comparisons measure two different points in time and suggested 
FNS should take action to increase consistency in the PER measure. FNS 
has determined the improvements to the quality and consistency of QC 
data inherent with the proposed approach would address OIG's concerns 
regarding the Comparison I and II processes. Along with these changes, 
the Department also proposes to eliminate the concept of ``as of the 
review date'' throughout 7 CFR 275.12, since eligibility actions would 
now be the critical focus of the QC review and this phrase would no 
longer be meaningful.
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    \33\ See Section 16(c)(1)(A)(ii) of the FNA or 7 CFR 
275.12(f)(2).
    \34\ OIG Audit Report 27601-0002-41.
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7 CFR 275.12(b)--Review of Active Cases--Household Case Record Review

    The process of reviewing a case in QC has several distinct 
components, including the household case record review, where the 
reviewer gathers information and evidence from the case record to 
determine what occurred in the case and to plan for the next fact-
finding phase.
    The Department proposes to amend the regulations at 7 CFR 275.12(b) 
to update the case record review provisions to reflect the new proposed 
review process. The proposed change specifies that the case record must 
include the initial certification or recertification application or, 
the monthly, quarterly, or periodic report, and QC worksheets 
applicable to the sample month determination. Documentation contained 
in the eligibility case record is allowable as verification, but only 
if the evidence used in the eligibility determination meets or exceeds 
QC verification standards found in the FNS Handbook 310. The Department 
also proposes to eliminate the requirement at 275.12(b) that reviewers 
examine the household issuance record for pertinent information if they 
cannot find the household's case record, as the case record review 
would be an essential component of the active review process. Under the 
proposed rule, situations where the case record could not be located 
would result in an incomplete case and, therefore, the total dollar 
amount issued would be reported as an error. Further discussion on 
incompletes becoming total dollar errors is in this preamble under the 
heading, Review of active cases--Disposition of case reviews.
    The purpose of this proposed change is two-fold. First, including 
dropped/incomplete cases in the error amount would strengthen integrity 
by acting as a deterrent against the types of dropped-case manipulation 
that previously led to unreliable State PER data reporting, discussed 
in the history part of this preamble. Second, by including dropped/
incomplete cases now

[[Page 64767]]

excluded from the improper payment rate calculation, the proposed 
change would align SNAP with PIIA and other Federal programs, as noted 
in an audit released on July 6, 2016, by the General Accounting 
Office.\35\
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    \35\ GAO 16-708-T, https://www.gao.gov/products/GAO-16-708T.
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7 CFR 275.12(c)--Review of Active Cases--Field Investigation

    The field investigation is another fact-finding phase of the QC 
review and includes interviewing the household and collateral contacts. 
Collateral contacts can include, for example, individuals, 
organizations, governmental agencies, and businesses that hold relevant 
information on the household's circumstances.
    While conducting QCIRs, FNS staff found that State agencies do not 
widely use technology to collect documentary evidence during the field 
investigation phase. For example, while some SQCRs have access to 
digital scanners or cellular phone cameras to make electronic copies of 
verifications, many SQCRs have no access to these technologies during 
the field investigation or were not aware the use of electronic devices 
was a permissible way of obtaining documentary evidence that could not 
be brought back to the office.
    Additionally, in the 2018 RFI,\36\ FNS asked for recommendations to 
encourage greater use of technology that could enhance the accuracy of 
case reviews. A prevalent response was that more funding and grants 
from the Federal Government would assist in State agencies using 
additional technology. The Department emphasizes here that, under 
current regulations at 7 CFR 277.3, expenditures for technology to aid 
in program administration, including in association with QC reviews, 
qualifies for reimbursement up to 50 percent.
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    \36\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
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    FNS hopes that promoting the use of technology in regulations to 
collect documentary evidence from both households and collateral 
contacts would encourage State agencies to offer households better 
customer service by limiting the need to send in a physical copy of 
documentary evidence, a step that can prove challenging for many. 
Therefore, the Department proposes to amend paragraph 7 CFR 275.12(c) 
to provide that the use of technology is not only permitted, but 
encouraged, to obtain verification, including copies of documentary 
evidence from households and collateral contacts, so long as the 
privacy of the household and the information gathered are protected 
pursuant to applicable Federal and State privacy laws.

7 CFR 275.12(c)(1)--Review of Active Cases--Personal Interviews

    QC regulations currently require SQCRs to conduct a face-to-face 
personal interview for all households. Under current regulations at 7 
CFR 275.12(c)(1), only specific circumstances allow telephone 
interviews to be used in lieu of face-to-face interviews for the QC 
field investigation. Seventy percent of State agency responses to the 
RFI \37\ question about the interview process included requests that 
telephone interviews be an acceptable interview method instead of face-
to-face, citing reports of QC staff regularly traveling long distances 
only to find households failing to meet for the scheduled interview 
times, resulting in lost time and wasted administrative funds. During 
FNS's QCIRs, SQCRs raised concerns about staff safety while conducting 
the required face-to-face interviews outside of the local office. 
Finally, comments on the RFI from non-profit organizations presented 
that face-to-face interviews may be more challenging for SNAP's working 
households to comply with.
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    \37\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
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    In considering the various comments provided by different 
stakeholders, the Department determined that switching to telephone 
interviews as the primary interview method will continue to meet the 
needs of the proposed QC review changes in this rule. As a result, the 
Department proposes to revise the QC personal interview regulation at 7 
CFR 275.12(c)(1) to require that telephone interviews be the default 
interview format, and require that State agencies inform households 
that a face-to-face interview is an option available to them by 
request. This change will not only address the concerns brought forth 
by commenters but may also have a positive impact on State agency 
completion rates since the increased flexibility that telephone 
interviewing allows will provide more households the opportunity to 
comply with the QC review process. The reason the Department proposes 
standardizing the telephonic interview as the default interview mode as 
opposed to making it another interview option is to ensure fair 
treatment for all sampled households during the QC review process. In 
addition, because of this change, the Department proposes to eliminate 
the exception at 7 CFR 275.12(c)(1) available to remote, isolated 
households in Alaska because this proposed change will cause the 
exception to be unnecessary.
    Regulations at 7 CFR 275.12(c)(1)(iii) require that, during the 
personal interview, reviewers must review with the household all 
documentary evidence in the household's possession and secure 
information about collateral sources of verification. The Department 
proposes to amend the provisions at 7 CFR 275.12(c)(1)(iii) to codify 
that during the personal interview, reviewers would also be required to 
review with the household all documentary evidence that is already in 
the case file and request new documentary evidence from the household, 
as needed. This is a best practice of State agencies and, by codifying 
this requirement, FNS seeks to ensure greater consistency in the 
interview process as well as accountability for the quality and scope 
of interviews, a vital component in the QC review process.

7 CFR 275.12(c)(1)-(2)--Review of Active Cases--Collateral Contacts

    During, prior to, or after the personal interview, the SQCR may 
need to contact a collateral contact of the household who can be used 
as a source to verify household circumstances. Because State law might 
require an SQCR to obtain consent from the head of household to contact 
collateral contacts FNS codified the provision at 7 CFR 
275.12(c)(1)(iv), which currently reads, ``If required by the State, 
the reviewer shall obtain consent from the head of the household to 
secure collateral information.'' However, FNS has since discovered the 
language of 7 CFR 275.12(c)(1)(iv) is being interpreted differently by 
States. For example, some States without such laws are still mandating 
consent be obtained, which has created roadblocks for SQCRs and 
resulted in preventing the SQCR from being able to complete cases. It 
is imperative that SQCRs accurately complete as many QC cases as 
possible without any unnecessary burdens. Therefore, the Department 
proposes to amend the language at 7 CFR 275.12(c)(1)(iv) to clarify its 
intent by linking obtaining consent to the presence of a State law.
    Currently, regulations at 7 CFR 275.12(c)(2) require SQCRs to 
obtain verification from collateral contacts in all instances when 
adequate documentation is not available from the household. The current 
regulatory provision does not address situations when there is 
inadequate documentation in the case file. Therefore, the Department 
proposes to

[[Page 64768]]

amend 7 CFR 275.12(c)(2) to require the reviewer to obtain verification 
from collateral contacts in all instances when adequate documentation 
is not available.

7 CFR 275.12(d)--Review of Active Cases--Variance Identification

    According to Section 2(b) of the PIIA,\38\ an improper payment 
includes ``any payment that should not have been made or that was made 
in an incorrect amount, under a statutory, contractual, administrative, 
or other legally applicable requirement.'' Per Section 2(c), when an 
agency cannot discern whether a payment was proper because of lacking 
or insufficient documentation, the payment shall be treated as an 
improper payment. The Department proposes to amend and reorganize 7 CFR 
275.12(d), as discussed in the three sections that follow, to reflect 
the new review focus and align it with requirements in PIIA. In 
addition, consistent with what was noted earlier, all references under 
7 CFR 275.12(d) regarding the ``sample month'' would either be changed 
to ``action under review'' or eliminated, where applicable.
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    \38\ 31 U.S.C. 3351.
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7 CFR 275.12(d)(2)--Review of Active Cases--Variances Excluded From 
Error Analysis

    Regulations at 7 CFR 275.12(d) define a `variance' as a review 
finding that policy was applied incorrectly or that information 
verified as of the review date differs from the information used at the 
most recent certification action. The Department is also proposing to 
allow fewer opportunities for variance exclusion from the error 
analysis. There are two reasons for this proposal: (1) a more 
restrictive review focus in accordance with PIIA specifications on 
which errors are and are not considered payment errors; and (2) the 
change in review focus to reviewing only the household's eligibility 
determination versus a point in time analysis. As such, the Department 
proposes to eliminate regulations at 7 CFR 275.12(d)(2)(i), (iii), and 
(ix). These provisions are related to variances associated with 
countable income unable to be verified at the time of certification, 
changes in household circumstances that were not yet required to be 
reported as of the review date, and changes to child support orders 
that occurred after the most recent certification action, respectively, 
and no longer align with the new review focus. Provisions (ii) and 
(viii) regarding variances resulting from postponed verification for 
expedited service households and from incorrect written Federal policy, 
respectively, would be revised, as further discussed below, and 
references to Immigration and Naturalization Services (INS) would be 
updated.
    FNS found in its QCIRs that inadequate documentation in household 
eligibility case records presents challenges for reviewers to complete 
cases, particularly in expedited service cases where verification of 
certain elements of eligibility is postponed. In these cases, the QC 
reviewer must rely solely on the eligibility case record to determine 
what verification was postponed and if any variances in benefits 
resulting from the postponed verification qualify to be excluded from 
the error rate calculation, called a variance exclusion. In these 
cases, a lack of required documentation should result in forfeiture of 
the variance exclusion since the reviewer cannot validate if regulatory 
requirements regarding verification were followed accurately. Current 
regulations are not clear that a lack of documentation means the 
exclusion does not apply, and some State agencies have used this 
ambiguity to apply the variance exclusion inappropriately. Therefore, 
the Department proposes to amend the language at 7 CFR 275.12(d)(2)(ii) 
to clarify that, for this exclusion to apply, the case record must 
include clear documentation indicating which elements of verification 
were postponed. Otherwise, if an eligibility worker does not 
sufficiently document an element to indicate they properly postponed 
it, the exclusion would not apply and any variances arising from errors 
related to the element would then be included in the error 
determination process.
    The Department proposes to amend the current regulatory language at 
7 CFR 275.12(d)(2)(viii) [re-designated as 7 CFR 275.12(d)(2)(vii)] 
regarding policy memoranda for clarity. Instead of specifying 
categories of policy memoranda, as exists now, the Department proposes 
to generalize the concept to be all-inclusive of SNAP policy memoranda 
issued.

7 CFR 275.12(d)(3)--Review of Active Cases--Other Findings

    The regulations at 7 CFR 275.12(d) define a variance as a review 
finding that policy was applied incorrectly or that information 
verified as of the review date differs from the information used at the 
most recent certification action while the regulations at 7 CFR 
275.12(d)(1) and (2) further describe which variances are included in 
and excluded from the error analysis. Regulations at 7 CFR 275.12(d)(3) 
describe findings other than variances; however, there is currently no 
requirement to report these findings to a local office. When a SQCR 
does report a finding other than a variance, they do so through a 
notification comment that is sent along with the case's official QC 
results. The lack of a requirement to report these findings can lead 
SQCRs to bypass those issues, thereby reducing the local eligibility 
office's ability to determine whether a change in the case record is 
warranted following the QC review. This is important to address, 
because currently it is possible for a SQCR to learn information about 
a household's current circumstances that do not affect the sample month 
under review but could affect the household's ongoing SNAP allotment 
after the sample month. For example, a SQCR conducts an interview with 
a household in May for a case selected for the March sample month. 
During the interview, the SQCR finds that a household member recently 
started a new job that increased the household's earned income over the 
income limit for its household size but failed to report this 
information to the State agency within the required time frames. The 
new earnings are excludable from the review because they occurred after 
the sample month, but the household is required to report this change 
and it may impact the household's ongoing SNAP allotment in future 
months.
    As a result, the Department is proposing to amend 7 CFR 
275.12(d)(3) by adding that the State QC office would be required to 
notify the local office of these other findings in all cases, 
regardless of the error impact those deficiencies may have on the case. 
The Department believes this notification is essential to good 
management of the Program, because it provides information about 
inaccuracies in the case file to eligibility staff, enabling them to 
correct the issue, prevent future errors from occurring, and 
potentially provide improved customer service to households. The 
Department also proposes to remove the following examples from the same 
paragraph since the household would not have been eligible for benefits 
according to SNAP rules at 7 CFR 273, and therefore, any benefits 
issued to such households are considered improper payments under PIIA: 
\39\ an overdue subsequent certification and no current application on 
file. Additionally, the Department proposes to remove the following 
examples from the same paragraph since

[[Page 64769]]

the change in review focus would no longer exclude them from variances 
cited in the QC review: insufficient documentation and incorrect 
application of the verification requirements specified in part 273.
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    \39\ https://www.whitehouse.gov/wp-content/uploads/2018/06/M-18-20.pdf; Page 8.
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    Currently, at 7 CFR 275.12(d)(3), State agencies have the 
discretion to act on findings other than error variances discovered 
during the review, which are pertinent to the SNAP household or the 
case record. Such findings may include, for example, the incorrect age 
of a household member that is unrelated to an element of eligibility 
and deficiencies in work registration procedural requirements, among 
others. The Department proposes to maintain this State agency 
discretion to act or not act on additional information discovered 
during the QC review.

7 CFR 275.12(f)--Review of Active Cases--Reporting of Review Findings

    Consistent with the changes made at 7 CFR 275.12(d)(3), where SQCRs 
would be required to document all variances discovered in the review 
and not just those causing a reportable error, the Department proposes 
to revise regulations at 7 CFR 275.12(f)(1) and (f)(2) to require 
reviewers include all variances in their individual review findings 
reports for both eligibility and basis of issuance variances, 
respectively. Changes in both sections would also remove the reference 
to `sample month', as this would be consistent with the shift in review 
focus from a point in time to the eligibility action under review.

7 CFR 275.12(g)--Review of Active Cases--Disposition of Case Reviews

    As noted, proposed updates to the active review would be more 
reflective of improper payment requirements for PIIA, which requires a 
more thorough reporting of errors. Currently, FNS ``charges'' State 
agencies a penalty for having a low QC completion rate. This penalty is 
part of the calculation that determines the State agency's PER. This 
method is unique to SNAP. Other programs that report for PIIA, follow a 
different process, whereby any case they are unable to complete for QC 
results in a total dollar error. In SNAP, reviewers drop cases for 
which they cannot verify an element of eligibility or basis for the 
benefit amount. For instance, if a case indicates the household 
received earned income, and the household is unable to provide 
verification or a collateral contact that can validate the information, 
the reviewer drops the case as incomplete.
    To be consistent with PIIA, the Department proposes to amend 7 CFR 
275.12(g)(1) so that, as with other Federal programs, all cases that 
cannot be completed, regardless of the reason, would result in the 
reporting of an error for the total allotment issued for the action 
under review. The Department requests public comment for considerations 
of circumstances it should consider in implementing this policy.
    The Department is also seeking feedback on whether there should be 
a threshold applied to completion rates in the proposed error rate 
calculation methodology, similar to the current percent completion 
threshold which requires a penalty be applied to a State agency's error 
rate if it fails to complete at least 98 percent of its minimum QC case 
load.
    Current regulations at 7 CFR 275.12(g)(1)(ii) list instances in 
which the household's unwillingness to cooperate in completing a QC 
review has the effect of a refusal to cooperate. Those instances 
include when the household fails to respond to mail sent Certified 
Mail-Return Receipt Requested; when the household fails to attend an 
agreed upon interview; and when the household does not return a signed 
release of information after agreeing to do so or after receiving one 
through Certified Mail-Return Receipt Requested. FNS received input 
from State agencies through various meetings with the American Public 
Human Services Association (APHSA) that the use of certified mail is 
prohibitively expensive and that delivery and service issues with the 
United States Postal Service (USPS) have presented challenges even when 
using Certified Mail-Return Receipt Requested.
    APHSA members requested reviewers be provided an opportunity to use 
a process similar to the Request for Contact (RFC) process used for 
unclear information, as found in 7 CFR 273.12(c)(3)(i)(A). FNS 
determined the use of a modified RFC process; whereby households that 
fail to respond to the request are suspended from SNAP for one month, 
with opportunity to verify their circumstances during that time, prior 
to having their SNAP participation terminated; is appropriate for QC 
purposes. This new process would be referred to as a request for 
quality control contact or RFQCC. Allowing a RFQCC will help State 
agencies complete cases and reduce the number of incomplete cases that, 
under the new process, would count as total dollar errors. The 
availability of this process will ensure integrity in the Program by 
encouraging households to cooperate with the QC process. It will also 
protect access to the Program for those households that do cooperate as 
required, as current regulations do not provide an additional month for 
the household to cooperate before the State must pursue termination of 
their participation. In addition, commonly known issues with mail 
delivery necessitate other allowable processes for States to utilize in 
gaining household cooperation. For that reason, the Department proposes 
to revise 7 CFR 275.12(g)(1)(ii) by reordering the examples and adding 
the previously mentioned RFQCC process as an alternative way to respond 
to households that either refuse or fail to ever respond to 
communication from State QC to cooperate with the QC review. Similar to 
the RFC process outlined in 7 CFR 273.12(c)(3)(i)(B)(2), if the 
household fails to respond to the RFQCC, the reviewer will inform the 
State and the State will send a notice of adverse action that suspends 
the household for one month to allow the household an opportunity to 
cooperate with QC prior to termination. If the household does not 
cooperate with QC by the deadline provided in the notice of adverse 
action, the reviewer must notify the State agency of the household's 
refusal and the State must follow through with terminating the 
household as stated at 7 CFR 275.12(g)(1)(ii).
    The proposed review process would also require an update to 
regulations at 7 CFR 275.12(g)(2) regarding active cases that are not 
subject to review. The Department proposes to eliminate the current 
provisions at 7 CFR 275.12(g)(2)(iv) and 7 CFR 275.12(g)(2)(ix) 
pertaining to households receiving restored benefits and households not 
receiving benefits in the sampled month, because the provisions would 
no longer be relevant to the way cases would be sampled. In addition, 7 
CFR 275.12(g)(2)(x) would be removed because all cases in which the 
household is unable to be reached for the QC review would result in a 
total dollar error amount for the eligibility action under review, as 
mentioned above, and, therefore, no longer be considered a case not 
subject to review. As a result of the proposed changes, the Department 
would also reorganize the section to accommodate the removals and 
additions.

Subpart E--Corrective Action

7 CFR 275.16(b)(2)--Corrective Action Planning--Negative Cases

    In 2012, the Department changed the negative case review process in 
the final rule titled, Supplemental Nutrition Assistance Program: 
Quality Control

[[Page 64770]]

Provisions of Title IV of Public Law 107-171 (75 FR 33421),\40\ from a 
review of the accuracy of a denial, termination, or suspension to a 
process that incorporated a customer service review of those actions, 
including whether the State agency accurately informed the household of 
the reason for the action and whether the State agency's procedures 
were correct. Since that change, the requirement at 7 CFR 275.16(b)(2) 
for State agencies to implement a corrective action plan (CAP) whenever 
its CAPER rose above one percent has become impractical, as exceeding 
the one percent threshold became routine because of the new review 
procedures. State agencies have informed FNS of their concerns in 
various ways, including through conferences and advisory group 
meetings, since the first CAPER release in calendar year 2013. In the 
2018 RFI,\41\ FNS requested feedback from commenters regarding the 
factors FNS should consider in revising the current CAP requirement for 
negative cases. FNS received ten comments about changes to CAP 
requirements and three suggested a threshold change for CAPs required 
on CAPERs. However, those three commenters overwhelmingly agreed the 
threshold should be increased. FNS based the current threshold on the 
previous negative case review process and now agrees that the threshold 
should be adjusted to better accommodate the process implemented in FY 
2012.
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    \40\ https://www.govinfo.gov/content/pkg/FR-2010-06-11/pdf/2010-13446.pdf.
    \41\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
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    Consequently, the Department is proposing that a State agency would 
be required to implement a CAP when its CAPER is higher than the 
national CAPER for a given fiscal year. To do so, the Department 
proposes to amend 7 CFR 275.16(b)(2) by removing the phrase ``of 1 
percent or more in negative cases'' and adding in its place the phrase 
``above the national average CAPER.'' However, because FNS has received 
only limited and mainly anecdotal feedback from State agencies since 
the changes, the Department is seeking additional comments through this 
rulemaking regarding when State agencies would be required to implement 
a CAP to improve their CAPER.

7 CFR 275.16(b)(4)--Corrective Action Planning--Incomplete Cases

    The CAP requirement at 7 CFR 275.16(b)(4) for incomplete cases is 
another area that State agencies have questioned. A CAP is currently 
required whenever a State agency is unable to complete more than 5 
percent of its annual QC caseload. The Department received comments to 
the 2018 RFI \42\ on factors to consider in revising the current CAP 
requirement in this area. Ten commenters provided comments on factors 
to consider if revising the current CAP requirements. The commenters, 
which included eight State agencies, provided the following to 
consider: adjust the completion rate because a 95 percent completion 
rate is unreasonable and unattainable for many State agencies; utilize 
the Federal regression rate penalty only if State agencies are not 
completing cases in accordance with Federal rules and regulations; 
adjust acceptable levels of performance before corrective action occurs 
based on trends and current data; and initiate CAPs only when FQCRs 
demonstrates that incomplete cases were completed by FQCRs and SQCRs 
had the ability to complete the case in the same manner. The Department 
considered these comments but determined that, due to the proposed new 
handling of incomplete cases as complete dollar amount errors, the most 
appropriate revision to this threshold would be to eliminate the CAP 
requirement altogether for active cases.
---------------------------------------------------------------------------

    \42\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
---------------------------------------------------------------------------

    Since this rule proposes to count the full allotment for incomplete 
cases as an error, the Department has concluded that the development of 
a separate CAP for active cases would be duplicative and unnecessary. 
This is due, in part, to the fact that an excess number of dropped 
cases would result in higher PERs and the Department has procedures, 
namely the liability and sanction process, to respond to high PERs.
    For negative cases, current rules related to dispositioning a case 
as incomplete in the negative sample frame stipulate that State 
agencies may list as incomplete only those cases where the whole case 
file cannot be located. This largely stems from long-standing 
requirements that eligibility workers fully document their case files 
in sufficient detail to permit a reviewer to determine the 
reasonableness and accuracy of the determination. As a practical 
matter, the incidence of incomplete negative cases by State agencies is 
extremely low. For example, for FY 2019, there were no dropped cases in 
the negative sample frame.
    For these reasons, the Department is proposing to remove the 
provision at 7 CFR 275.16(b)(4). As a result, current regulations at 7 
CFR 275.16(b)(5) will be redesignated as 7 CFR 275.16(b)(4).

Subpart F--Responsibilities for Reporting on Program Performance

7 CFR 275.21(b)(1)--Quality Control Review Reports--Mandating the Use 
of SNAP QC System

    In 2013, FNS successfully implemented a web-based electronic QC 
review system (SNAP-QCS) for State agencies to input their QC case 
review data, including the documentary evidence to support case 
reviews. Therefore, the Department is proposing to require State 
agencies to use the Federally funded SNAP-QCS.
    The primary purpose of SNAP-QCS is to provide a central location to 
house QC review cases which can be accessed at both the State and 
Federal levels. SNAP-QCS provides complete audit and status tracking 
for each case. All changes, beyond drafts, are available (where 
authorized) for comparison to prior iterations. SNAP-QCS contains edit 
check rules that prevent the submission by any user of information that 
violates business logic or other policy/regulatory guidance. In all 
cases, SNAP-QCS informs users of the nature of the rule violation in a 
manner that allows for correction of any such violation.
    Since its inception, SNAP-QCS has replaced numerous State agency 
legacy systems. The system provides the following functionality: the 
creation of worksheets and review schedules (FNS 380, FNS-245 and FNS-
380-1) \43\ by the States, workflow management for State review 
worksheets and schedules; the Federal subsampling of QC review cases, 
the creation of review notes and findings by FQCRs, detailed workflow 
management for the Federal review process; tracking of case-related 
information, reporting tools for workflow and case characteristics, and 
analysis tools for advanced QC finding reports.
---------------------------------------------------------------------------

    \43\ FNS 380--OMB Form 0584-0074; FNS 245-OMB Form 0584-0034; 
FNS 380-1--OMB Form 0584-0299.
---------------------------------------------------------------------------

    FNS requested comments in the 2018 RFI \44\ as to whether the 
Department should mandate SNAP-QCS for all QC Worksheets. Ten State 
agency respondents commented on such a mandate. Four State agencies 
expressed support for mandated use of SNAP-QCS because they currently 
use it and asserted that it would allow for improved consistency in the 
submittal of required information to FNS across States. One State 
agency indicated it

[[Page 64771]]

had no concerns about the mandate because State agencies would retain 
the option to maintain their own internal automated QC system and 
upload the results into SNAP-QCS. However, four State agencies objected 
to the mandated use of SNAP-QCS. One State agency noted SNAP-QCS does 
not account for special budgeting rules, such as waivers, and other 
commenters expressed concerns related to State system variability 
resulting in system modifications, increased work, and inefficient use 
of State agency staff time (e.g., double data entry).
---------------------------------------------------------------------------

    \44\ https://www.govinfo.gov/content/pkg/FR-2018-06-01/pdf/2018-11849.pdf.
---------------------------------------------------------------------------

    The Department appreciates all comments submitted. Most State 
agency commenters who opposed the requirement to use SNAP-QCS did not 
have experience using the automated version of the system. The 
Department understands there is a learning curve when a new reviewer 
begins using SNAP-QCS. FNS anticipates that mandating the use of SNAP-
QCS will improve data integrity and expects that the edit checks would 
assist in accurate data collection. Therefore, the Department proposes 
to mandate the use of SNAP-QCS at 7 CFR 275.21(b)(1). This includes 
using the Auto-FNS Form 380, FNS Form 380-1, and FNS Form 245, and 
upload all documentation necessary to understand the disposition and 
findings for each sampled case.

Subpart G--Program Performance

7 CFR 275.23(b)(2)--Determination of State Agency Program Performance--
Determination of Payment Error Rates

    To accurately apply the new sampling method to determine State 
agency program performance, the Department proposes to amend the 
language at 7 CFR 275.23(b)(2)(i)(A) to clarify what the quantities 
y1, b1, x1, and X1 in the 
PER determination formula are and that X1 should be weighted 
(using Wi) to account for the differential selection 
probabilities of the new sampling design. The Department also proposes 
to amend the language at 7 CFR 275.23(b)(2)(i)(B) to clarify what the 
quantities y2, b2, x2, and 
X2 in the formula are and that X2 should be 
weighted (using Wi) to account for the differential 
selection probabilities of the new sampling design. The Department also 
proposes to remove language about stratified sample designs covered by 
both provisions because it would no longer apply when using the 
proposed sampling method.
    To avoid confusion with the notation introduced in the new 
paragraph 7 CFR 275.11(g), Active sample allocation, the Department 
proposes to change the notation of ``u'' to ``Z'' in paragraph 7 CFR 
275.23(b)(2)(i)(C). In addition, the Department proposes to remove and 
rephrase language about the quantity ``Z'' to make its definition 
clearer.
    The assignment of error rates by FNS, whether for active or 
negative cases, has occurred only infrequently in the past. Typically, 
FNS made assignments because of extraneous circumstances beyond a State 
agency's control, such as when a large disaster impedes its ability to 
complete cases. However, situations do arise in which FNS must assign 
rates to State agencies due to other reasons. FNS assigned multiple 
State agency error rates in FY 2017 due to data integrity issues and 
found that greater clarity in regulations at 7 CFR 275.23(b)(2)(ii) is 
necessary. First, the Department proposes to amend the regulation to 
reflect the name change of the error rates for negative cases and 
clarify that assigned rates could be used in the determination of 
liability status, subject to 7 CFR 275.23(d). Second, the Department 
proposes to amend the paragraph by adding a statement at the end of the 
section to indicate that under no circumstance, would an assigned rate 
be eligible for appeal unless the rate resulted in a liability amount, 
per 7 CFR 275.23(d). While these clarifications are consistent with 
current practice and law, the Department maintains that the additional 
language adds emphasis.

7 CFR 275.23(b)(2)(iii)--State Agency Error Rates--Completion Rate 
Penalty

    The Department proposes to change the current penalties applied to 
State agencies that fail to complete 98 percent of their active QC 
caseload as described in 7 CFR 275.23(b)(2)(iii) by changing the 
application of the penalty to apply to any State agency that fails to 
sample the required minimum annual sample size, while also increasing 
the impact of the penalty. Since State agencies would report all active 
cases with a disposition of incomplete as a total dollar error for the 
sampled action under review, the Department believes there is a 
sufficient deterrent to past State agency practices of dispositioning 
cases as incomplete to avoid errors. Still, situations exist where a 
State agency may not sample the minimum sample size. For FY 2022, a 
total of seven States did not sample enough cases to meet the minimum 
regulatory requirement for active and negative sample frames. This 
could happen in situations beyond the control of the State agency, such 
as when a natural disaster impedes the State agency's ability to sample 
and complete its required QC reviews. This could also occur in 
situations that are within the State agency's control to prevent, such 
as when a State agency fails to sufficiently staff the QC unit and is 
subsequently unable to complete the required minimum sample size.
    Specifically, the Department seeks input on the proposal to apply 
an adjustment penalty to a State agency's error rate when the State 
agency fails to sample enough cases to complete the minimum sample size 
in any given sample month, including the following: (1) if the changes 
proposed to the current penalty formula are sufficient and (2) whether 
FNS should distinguish in how it applies the penalty based on whether a 
State agency cannot sample its minimum sample size due to situations 
beyond its control.

7 CFR 275.24--High Performance Bonuses

    Section 4013(d) of the 2018 Farm Bill removed the requirement for 
the Secretary to award performance bonus payments to State agencies and 
prohibited the Secretary from awarding performance bonuses in calendar 
year 2019 for FY 2018 performance. The 2018 Farm Bill also required the 
Department to establish performance criteria relating to actions taken 
to correct errors, reduce rates of error, improve eligibility 
determinations and any other indicators of effective administration 
determined by the Secretary.
    To ensure SNAP performance bonuses are removed from regulations 
throughout 7 CFR 275.24, the Department proposes to amend current 
regulations at 7 CFR 275.24 with this rulemaking and replace that 
language with performance criteria, as directed by Congress pursuant to 
Section 4013(d)(3) of the 2018 Farm Bill. The performance criteria 
mirror current language at 7 CFR 275.24 but removes all references to 
bonuses and adjusts the language, grammar, and structure of the 
provision accordingly. The Department proposes these performance 
criteria because they mirror prior performance bonus criteria, which 
the Department believes, based on prior experience with performance 
bonuses, are informative measures of performance.

7 CFR 275.24(a)(3)--Performance Measures--Program Access Index

    As one of the technical changes, the Department proposes to remove 
the fourth sentence in subparagraph 7 CFR 275.24(a)(3)(i) as it is no 
longer necessary to allow an exception to calculating the program 
access index rate for the State of California as the State converted 
its cash out program to allow households to receive SNAP. Therefore, 
the Department can use actual SNAP participant numbers for

[[Page 64772]]

their calculation and the sentence is unnecessary.

Proposed Timeframe for Implementation of QC Sampling and Active Review 
Changes

    The Department recognizes the significant sampling and active 
review changes will require lead time and technical assistance for 
State agencies to come into compliance for implementation. The 
Department is considering establishing an implementation date of two 
full fiscal years after publication of the final rule. For example, if 
a final rule were published in March of 2027, the Department would 
establish an implementation date of October of 2029. The Department 
seeks input on this implementation timeline.
    To summarize, the simplification of the QC review is expected to 
benefit several stakeholders. Households would benefit from no longer 
having to provide verifications for multiple months in the 
certification period if their case is selected for QC review, SQCRs and 
FQCRs would have an equally robust but less complicated active case 
review to conduct, and the Department and Congress would benefit from 
both an improvement in the quality of information that comes out of the 
reviews and by being able to compare improper payments more effectively 
across government social safety net programs.
    In addition, simplifying the QC review in the proposed manner would 
also allow State agencies to implement more timely corrective actions. 
Timely corrective actions should reduce the compounding impact of 
improper payments as State agencies would be able to correct systemic 
errors and implement policies or processes more immediately, thus 
improving customer service to recipients, State agencies, and the 
American taxpayer.
    The Department acknowledges some of the most impactful changes for 
State agencies administering SNAP and households sampled for review 
include (1) the shift in review of the action that authorized the 
allotment; (2) the handling of cases that cannot be validated, and (3) 
the introduction of the RFQCC process. The Department asks for and 
welcomes comment on all provisions in this proposed rulemaking, and we 
also request comments on potential impacts, direct and indirect, of 
these changes on State agencies and SNAP households. The Department 
reiterates this is a proposed rule, and we will consider all comments 
provided before a final rule implements any changes to SNAP's QC 
system.

Procedural Matters

Executive Order 12866, 13563, and 14094

    Executive Orders 12866, 13563, and 14094 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Under 
Executive Order 12866, as amended, OMB's Office of Information and 
Regulatory Affairs (OIRA) determines whether a regulatory action is 
significant and, therefore, subject to OMB review. This proposed rule 
has been determined to likely be significant under E.O. 12866, as 
amended, and is being reviewed by the Office of Management and Budget 
(OMB) in conformance with Executive Order 12866.
    Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. The analysis below outlines the impacts that the 
Department anticipates may result from this proposed rule, if 
finalized, and was prepared pursuant to the above-mentioned executive 
orders.

Summary of Total Cost Impacts

    A regulatory impact analysis (RIA) must be prepared for rules which 
are determined to be significant under Section 3(f)(1) of E.O. 12866, 
as amended ($200 million or more in economic effects in any one year). 
USDA does not anticipate this proposed rule is likely to have an 
economic impact of $200 million or more in any one year, and therefore, 
does not meet the definition of significant under Section 3(f)(1) of 
E.O. 12866 as amended. This proposed rule will not impact SNAP 
participants' benefit levels. Overall household burden will increase 
due to the increase in case samples required by the new process, not by 
adding additional burden to individual households.
    The Department expects several of the proposed rule provisions to 
impact State Administrative Expenses (SAE) or FNS administrative costs. 
The rule includes the following changes expected to have measurable 
impacts:

--Section 275.11(b)(1)(iii) modifies the active case sample size 
formulas for State reviewers and Federal re-reviewers, increasing the 
sample size by 30 percent, to maintain the current level of precision.
--Section 275.11(3)(1) changes the active case sampling frame from all 
households to those with an action, including initial certification, 
recertification, and the submission of monthly, quarterly, or periodic 
reports.
--Section 275.12(b) clarifies that reviewers will only be required to 
examine households' circumstances for the month that the action took 
place, eliminating the need for comparing households' circumstances at 
the month of action versus the month of the review. As a result of the 
changes to the active case reviews, the shift to only reviewing 
eligibility actions will result in collecting less information about 
the household since only the point of eligibility will be reviewed, 
rather than a random point in time during a household's certification, 
which requires the collection of a new month's circumstances, not one 
that's already in the case record.
--Section 275.11(g) specifies that the active sample is divided into 
five strata, allowing the sample to be representative of the SNAP 
caseload.
--Section 275.12(d)(3) requires SQCRs to notify local offices of all 
non-error causing variances found in the review.
--Section 275.21(b)(1) mandates that SQCRs use the SNAP-QC system for 
QC reporting, rather than using their State systems.

    Below in Table E.1 is a summary of the combined impacts of these 
provisions on both State Agencies and the Federal Government. The 
Annual Baseline column shows the current annual costs for each row. The 
columns with FY headers are the difference between the annual baseline 
and new procedures resulting from this rule change in that specific 
fiscal year, with FY 2024 being the first implementation year and the 
first year in which the discount rate is applied. The Total column 
shows the sum of the five FY columns: the costs over the first five 
years of implementation. As noted previously, there are no anticipated 
impacts on SNAP allotments, but there are some expected costs for SNAP 
households as a result of the increased number of sampled households. 
Cost savings are anticipated after the implementation year, in FY 2026, 
due to expected reductions in the time needed for a caseworker to 
perform a QC review in under the new rule from 8.98 to 6.33 hours.

[[Page 64773]]



                                   Table E.1--Summary of Total Cost Impacts **
----------------------------------------------------------------------------------------------------------------
  Impacts on state administrative    Baseline:         Annualized cost differences from pre-rule baseline
  expense (cost in nominal FY 2024  ----------------------------------------------------------------------------
               $000s)                 FY 2024    FY 2025    FY 2026    FY 2027    FY 2028    FY 2029     Total
----------------------------------------------------------------------------------------------------------------
New Sampling Procedures............  $11,370.3   $3,393.4    -$950.9    -$950.9    -$950.9    -$950.9    -$410.2
Training...........................        0.0      974.2        0.0        0.0        0.0        0.0      974.2
Reporting all variances............        0.0        0.0      411.5      411.5      411.5      411.5    1,646.0
Record keeping.....................       59.8        0.0       17.9       17.9       17.9       17.9       71.6
Help Desk **.......................       70.0        0.0      210.0      210.0      210.0      210.0      840.0
Require all States use QCS **......      175.0        0.0      525.0      525.0      525.0      525.0   22,100.0
                                    ----------------------------------------------------------------------------
    Total..........................   11,675.1    4,367.6      213.5      213.5      213.5      213.5   55,221.6
----------------------------------------------------------------------------------------------------------------
                                             Discounted Cost Impact
----------------------------------------------------------------------------------------------------------------
7 percent..........................   11,675.1    4,081.9      186.5      174.3      162.9      152.2    4,757.7
3 percent..........................   11,675.1    4,240.4      201.2      195.4      189.7      184.2    5,010.9
----------------------------------------------------------------------------------------------------------------
                               Impacts on Household Burden (cost in nominal 000s)
----------------------------------------------------------------------------------------------------------------
Increase in Household Burden for           0.0       49.5       49.5       49.5       49.5       49.5      247.5
 Newly Sampled Cases...............
----------------------------------------------------------------------------------------------------------------
                                             Discounted Cost Impact
----------------------------------------------------------------------------------------------------------------
7 percent..........................        0.0       46.3       43.2       40.4       37.8       35.3      203.0
3 percent..........................        0.0       48.1       46.7       45.3       44.0       42.7      226.7
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.
** These costs are incurred only by the Federal Government.

    The net present value of costs to State and Federal governments 
over five years is $4,76 million at a seven percent discount rate and 
$5,01 million at a three percent discount rate. The net present value 
of costs to SNAP participants over five years is $203.0 thousand at a 
seven percent discount rate and $226.7 thousand at a three percent 
discount rate. Annualized in perpetuity, the government costs are 
$333.04 ($150.33) thousand per year at a seven (three) percent discount 
rate, and participant costs are $14.21 ($6.80) thousand per year at a 
seven (three) percent discount rate.
    This rule change will result in substantive benefits for QC 
reviewers. By changing the active case review to focus on eligibility 
determinations (certifications, recertifications, and submission of 
required reports), the rule will result in the SNAP QC process being 
better aligned with how other Federal programs measure payment accuracy 
and with PIIA. The proposed changes are also expected to simplify QC 
reviews, which in turn will improve the quality of the reviews and of 
the information collected. The time spent by each caseworker in QC 
review is anticipated to drop from 8.98 to 6.33 hours per case, which 
will result in -$950.9 thousands in savings per year, even accounting 
for the expected increase in 13,649 QC reviews per year (see Table 
E.3). Simplifying the process and focusing on eligibility actions will 
also allow for more timely corrective actions.

Implementation Costs (State and Federal Administrative Expense)

    Developing New Sampling Plans. Statisticians from each of the 53 
State Agencies will need to develop new sampling plans for active 
cases. It will take an estimated 40 hours for each State Agency to 
develop a plan. Given an hourly rate of $47.81 (the median hourly wage 
for a statistician, according to the Bureau of Labor Statistics (BLS)), 
the total one-time cost is $101,400 (Table E.2). Because these are 
State Administrative Expenses for which the Federal Government 
reimburses States, $50,700 will be borne by the Federal Government and 
$50,700 will be borne by State Agencies.
    Training SQCRs on new review procedures. SQCRs will need to be 
trained in the changes to the active case QC review process. There are 
approximately 634 SQCRs. Training will take an estimated 40 hours. At 
an hourly rate of $27.83 (the median hourly rate for a social worker, 
according to the BLS at time of analysis), the total cost for training 
will be $705,800. Because these are State Administrative Expenses for 
which the Federal Government reimburses States, $352,900 will be borne 
by the Federal Government and $352,900 will be borne by State Agencies.
    Training SQCRs on entering data into the SNAP QC system. All SQCRs 
will be required to enter QC review data into the SNAP QC system. 
Currently, 263 SQCRs of an estimated 634 SQCRs nationwide are entering 
QC data into the SNAP QC system. Therefore, based on this estimate, an 
additional 371 SQCRs will need to be trained on how to enter data into 
SNAP-QCS by making the system mandatory. This training will take an 
estimated 26 hours. At an average social worker rate of $27.83, the 
cost for this training will be $268,400. Because these are State 
Administrative Expenses for which the Federal Government reimburses 
States, $134,200 will be borne by the Federal Government and $134,200 
will be borne by State Agencies.
    Longer time initially processing cases. During the first year, 
reviewers are expected to take an estimated 2 hours longer to review 
each case as they become accustomed to the changes in QC. With an 
estimated 59,149 cases, at $27.83 an hour, the one-year cost is 
$3,292,100. Because these are State Administrative Expenses for which 
the Federal Government reimburses States, $1,646,100 will be borne by 
the Federal Government and $1,646,100 will be borne by State Agencies.
    These one-time implementation costs will total an estimated 
$4,367,700, of which $2,183,900 will be borne by the Federal Government 
and $2,183,900 borne by State Agencies.

[[Page 64774]]



                                      Table E.2--Implementation Costs (State and Federal Administrative Expense) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Additional time
                                                                       Develop     Train SQCRs on       Train QC        for SQCRs to          Total
                                                                       sampling      new review      revisers to use   process active    implementation
                                                                         plan        procedures         QC system           cases             cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Impacted....................................................         53.0             634.0             371.0          59,146.1  ................
Time (hours).......................................................         40.0              40.0              26.0               2.0  ................
Hourly rate........................................................        $47.8             $27.8             $27.8             $27.8  ................
Total Cost ($000)..................................................       $101.4            $705.8            $268.4          $3,292.1          $4,367.7
Federal Share ($000)...............................................        $50.7            $352.9            $134.2          $1,646.1          $2,183.9
State Share ($000).................................................        $50.7            $352.9            $134.2          $1,646.1          $2,183.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.

Annual Operational Costs and Cost Savings (State Administrative 
Expense)

    Impact of changes in sample size and review procedures. Currently, 
SQCRs review 45,497 active cases per year.\45\ It takes an average of 
8.908908 hours per review. The median hourly rate for a social worker 
is $27.83. Thus, the cost of performing QC reviews is currently an 
estimated $11,370,300. (Table E.3)) Under the proposal, SQCRs will 
review about 59,146 cases per year, an increase of 30 percent. However, 
after the first year, the average time per review is expected to drop 
from 8.908908 hours to 6.33 hours. This is because reviewers will only 
be required to examine households' circumstances for the month that the 
action took place, eliminating the need for comparing households' 
circumstances at the month of action versus the month of the review. 
The cost of performing QC reviews is estimated to be $10,419,400, a 
savings of $950,900. Because these are State Administrative Expenses 
the savings will be equally split between the Federal Government and 
State Agencies, with each saving $475,450.
---------------------------------------------------------------------------

    \45\ The changes in sampling procedures only affect active 
cases, not negative cases.
---------------------------------------------------------------------------

    New requirement to report non-error causing variances. Currently, 
States are not required to report non-error causing variances back to 
local SNAP offices. Section 275.12(d)(3) will require SQCRs to notify 
the local office of deficiencies in all cases, regardless of the error 
impact on the case. Little is known about how many variances of these 
kinds are currently reported, how many non-error causing variances will 
be reported under the requirement, or how long it takes to report such 
variances. Some cases will have no non-error causing variances, whereas 
others may have multiples of these variances. FNS is assuming that the 
additional time will average 15 minutes per case. This average is not 
meant to assume that all cases will have variances to report; rather, 
it is an average to balance cases with many variances to report against 
cases that have no additional variances to report. Using the hourly 
rate of $27.83 for a social worker times 59,146 cases (this is equal to 
30 percent more than the FY 2017 actives QC case load, as required by 
the proposed sampling methodology) times 15 minutes per case yields a 
cost estimate of about $411,500, of which nearly $205,750 will be borne 
by the Federal Government and $205,750 will be borne by State Agencies.
    Record keeping for more cases. States are required to keep records 
of all State QC reviews. It is estimated that the record keeping takes 
about 3 minutes per case, and that will be unchanged under the proposed 
system. However, because the number of cases is increasing by 13,649, 
using the average hourly rate of $27.83 for a social worker, the cost 
will increase by an estimated $17,900. This cost will be split between 
the Federal Government ($8,950) and State Agencies ($8,950).
    New requirement to attest the validity of the sampling plan. State 
Agencies will now be required to provide an annual statement attesting 
to the validity of the sampling plan. The time to provide the statement 
is estimated to be 12 minutes. Each of the 53 State Agencies will have 
a SNAP manager provide this statement. According to the Bureau of Labor 
and Statistics, the median rate for a general manager is $55.41 at time 
of analysis. Thus, the cost is $600 per year, $300 borne by the Federal 
Government and $300 borne by State Agencies.
    Increased QC help desk support. FNS will be required to provide 
increased help desk support. Currently, FNS contracts for one staff 
member to provide this support, at an annual cost of $70,000. FNS 
anticipates needing to contract for three additional people, for an 
additional cost of $210,000. This cost will be entirely borne by the 
Federal Government.
    Additional QC data storage. FNS currently stores the SNAP QC data 
on six servers, at an annual cost of $27,333.33 per server, or $164,000 
total. In addition, the storage costs are currently $11,000 per year. 
With all States using the SNAP QC data system and the increased sample 
size, FNS anticipates that these costs will quadruple, to $656,000 for 
the servers and $44,000 for storage, for a total of $700,000. The 
additional cost will total $492,000 for the servers and $33,000 for 
storage, for a total of $525,000. This cost will be entirely borne by 
the Federal Government.
    The total annual administrative cost of the changes to the QC 
review process is estimated to be $214,100. Because some costs, such as 
help desk support and additional data storage, are not shared with 
State Agencies, the estimated cost to the Federal Government is 
$474,600. State Agencies are expected to save $260,500 annually due to 
the reduced case processing time.

Annual Household Administrative Burden

    As discussed previously, the changes to the case sampling 
procedures will result in an overall increase in the number of cases 
sampled each year, from 45,497 annually to 59,146 (an increase of 
13,649 cases). As described in the Paperwork Reduction Act section of 
this proposed rule, the burden to an individual household selected for 
review is not expected to change and will remain about 30 minutes per 
household. However, since the number of cases selected will increase, 
overall household burden will also increase. The increase is expected 
to cost $49,477.6 annually (13,649 cases x .5 hours per case x minimum 
wage of $7.25).

Uncertainties

    While this proposed rule is expected to improve SNAP program 
integrity, it is

[[Page 64775]]

unclear whether the rule provisions will result in additional sanctions 
or liabilities being imposed on State Agencies as a result of these 
proposed changes.

                                                        Table E.3--Annual Operating Costs and Savings (Changes From Current Procedures) *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Current    Proposed
              Annual variable costs                 Current    Proposed  Difference  Current  Proposed  Difference    hourly     hourly   Difference   Current cost    Proposed cost  Difference
                                                     units      units                 hours     hours       ($)      rate ($)   rate ($)      ($)        ($000's)        ($000's)      ($000's)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Processing Active Cases..........................  45,497.00  59,146.10   13,649.10     8.98      6.33      -2.65       27.83      27.83       0.00        11,370.30       10,419.40     -950.90
Reporting all non-error causing Variances........       0.00  59,146.00   59,146.00     0.25      0.25       0.00       27.83      27.83       0.00             0.00          411.50      411.50
Record Keeping...................................  45,497.00  59,146.10   13,649.10     0.05      0.05       0.00       27.83      27.83       0.00            59.80           77.70       17.90
Attest Sample Plan...............................      53.00      53.00        0.00     0.00      0.20       0.20       55.41      55.41       0.00             0.00            0.60        0.60
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Fixed Costs                                                                                                    Current   Proposed
                                                                                                                    unit cost  unit cost
                                                                                                                          ($)        ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Help Desk Support................................       1.00       4.00        3.00      N/A       N/A        N/A   70,000.00  70,000.00       0.00            70.00          280.00      210.00
Servers..........................................       6.00      24.00       18.00      N/A       N/A        N/A   27,333.33  27,333.33       0.00           164.00          656.00      492.00
Storage..........................................       1.00       4.00        3.00      N/A       N/A        N/A   11,000.00  11,000.00       0.00            11.00           44.00       33.00
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Annual Costs...........................  .........  .........  ..........  .......  ........  ..........  .........  .........  ..........       11,675.10       11,889.20      214.10
    Federal Share................................  .........  .........  ..........  .......  ........  ..........  .........  .........  ..........      5,95960.05        6,434.60      474.55
    State Share..................................  .........  .........  ..........  .......  ........  ..........  .........  .........  ..........      5,75715.05        5,454.60     -260.45
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. The entities impacted by this 
rule are State SNAP agencies that conduct QC reviews, which are not 
considered small entities for purposes of this analysis.
    Pursuant to our review, the Department certifies that this rule 
will not have a significant impact on a substantial number of small 
entities.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and Tribal 
governments, and the private sector. Under section 202 of the UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local or Tribal 
governments, in the aggregate, or the private sector, of $100 million 
or more in any one year. When such a statement is needed for a rule, 
Section 205 of the UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This rule does not contain Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local and Tribal 
governments, or the private sector of $100 million or more in any one 
year. Thus, the rule is not subject to the requirements of sections 202 
and 205 of the UMRA.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
Number 10.551. For the reasons set forth in the Final Rule codified in 
7 CFR part 3015, subpart V and the related Notice (48 FR 29115), this 
Program is excluded from the scope of Executive Order 12372, which 
requires intergovernmental consultation with State and local officials.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under Section (6)(b)(2)(B) of Executive Order 13121.
    The Department has considered the impact of this proposed rule, 
with comment, on State and local governments and has determined that 
this rule does not have federalism implications. Therefore, under 
Section 6(b) of the Executive Order, a federalism summary is not 
required.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is intended to have preemptive effect 
with respect to any State or local laws, regulations, or policies which 
conflict with its provisions or which would otherwise impede its full 
and timely implementation. This rule is not intended to have 
retroactive effect unless so specified in the Effective Dates section 
of the final rule. Prior to any judicial challenge to the provisions of 
the final rule, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed the proposed rule, Provisions to Improve the 
Supplemental Nutrition Assistance Program's QC System, in accordance 
with the Department Regulation 4300-004, Civil

[[Page 64776]]

Rights Impact Analysis to identify and address any major civil rights 
impacts the proposed rule may have on participants on the basis of 
race, color, national origin, sex, and disability. A comprehensive 
Civil Rights Impact Analysis (CRIA) was conducted on the proposed rule, 
including an analysis of data and provisions contained in the proposed 
rule. The CRIA outlines outreach and mitigation strategies to lessen 
any possible civil rights impacts. The CRIA concludes the provisions of 
the proposed rule will impact the statistical design and active case 
review process, as well as clarify and update current regulations. The 
proposed rule would result in more SNAP households being selected for 
QC review in the active frame. The demographic profile of SNAP 
participants includes minorities, persons with disabilities, and the 
elderly; thus, program participants in these groups may be selected for 
QC review in the active frame. Additionally, the proposed rule will 
require State agencies to revise their review procedures, possibly 
resulting in less onerous reviews for a larger number of cases. The 
Department finds that the implementation of mitigation strategies and 
monitoring by the FNS Civil Rights Division and FNS SNAP may lessen 
these impacts. If necessary, the FNS Civil Rights Division will propose 
further mitigation and outreach strategies to alleviate impacts that 
may result from the implementation of the proposed rule.

Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes. This regulation has possible 
Tribal implications, so consultation is required. FNS attended a Tribal 
consultation meeting on May 1, 2019, in Washington, DC and virtually to 
a Nevada meeting on December 6, 2022, where the changes to this rule 
were explained. No questions or concerns were brought to FNS's 
attention about this rule by any members of either meeting. If further 
consultation is requested, the Office of Tribal Relations will work 
with FNS to ensure quality consultation is provided.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320), requires that the Office of Management and Budget (OMB) approve 
all collections of information by a Federal agency from the public 
before they can be implemented. Respondents are not required to respond 
to any collection of information unless it displays a current, valid 
OMB control number. We are seeking a new OMB Control Number for these 
new, existing, and changing provisions in this rule and, once OMB 
approves the information collection request burden associated with this 
rulemaking, we will submit a request to merge the burden hours into 
their respective OMB Control Numbers. Once the merge is approved the 
newly assigned OMB control number can be discontinued. The current 
burden inventories for this collection are found in OMB-0584-0074, 
Expiration Date: 07/30/2025; 0584-0299, Expiration Date: 07/31/2023, 
and 0584-0303, Expiration Date: 1/31/2024. These changes are contingent 
upon OMB approval under the Paperwork Reduction Act of 1995. 
Additionally, when the information collection requirements have been 
approved, FNS will publish a separate action in the Federal Register 
announcing OMB's approval.
    Comments on the information collection in this proposed rule must 
be received by November 20, 2023.
    Send comments to the Office of Information and Regulatory Affairs, 
OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also 
send a copy of your comments to John McCleskey, Branch Chief, Quality 
Control Branch, Program Administration and Nutrition Division, 1320 
Braddock Place, 5th Floor; Alexandria, Virginia 22314. For further 
information, or for copies of the information collection requirements, 
please contact John McCleskey at the address indicated above. Comments 
are invited on: (1) whether the proposed collection of information is 
necessary for the proper performance of the Agency's functions, 
including whether the information will have practical utility; (2) the 
accuracy of the Agency's estimate of the proposed information 
collection burden, including the validity of the methodology and 
assumptions used; (3) ways to enhance the quality, utility and clarity 
of the information to be collected; and (4) ways to minimize the burden 
of the collection of information on those who are to respond, including 
use of appropriate automated, electronic, mechanical, or other 
technological collection techniques or other forms of information 
technology.
    All responses to this request for comments will be summarized and 
included in the request for OMB approval. All comments will also become 
a matter of public record.
    Title: Provisions to Improve the Supplemental Nutrition Assistance 
Program's Quality Control System.
    OMB Number: 0584-NEW.
    Expiration Date: Not Yet Determined.
    Type of Request: New collection.
    Abstract: Section 16 of the Act provides the legislative basis for 
the operation of the QC system. Part 275, Subpart C, of SNAP 
regulations implements the legislative mandates found in section 16. 
Regulations at 7 CFR 275.1, 275.14(d) and 275.21(a) and (b)(1) provide 
the regulatory basis for the QC reporting requirements. Section 11(a) 
of the Act provides the legislative basis for the recordkeeping 
requirements. Existing SNAP regulations at 7 CFR 275.4 specifically 
address record retention requirements for QC including form FNS-380, 
FNS-380-1, and the sampling plans found in 7 CFR 275 of the 
regulations.
    Component (1) Form FNS-380 [OMB Control Number: 0584-0074], is a 
SNAP worksheet used to determine eligibility and benefits for 
households selected for review in the QC sample of active SNAP cases. 
This form provides a systematic means of aiding the State's Quality 
Control Reviewer in analyzing the case record, planning and doing field 
investigation and gathering, comparing, analyzing and evaluating data. 
FNS estimates that while this rule will require thirty percent more 
cases (households) be reviewed for QC, the rule does not change the 
existing burden on households, and will effectively decrease the 
ongoing burden for 53 State agencies by 20,151 hours annually. In 
addition, in order to implement the changes of the rule in the first 
year, the rule will add 196,915.17 startup burden hours for State 
agencies. These startup hours include 40 hours of training for 263 
State QC reviewers on just the new review procedures for active cases, 
64 hours to train 371 reviewers on using both SNAPQCS's automated FNS 
380 worksheet and the new review procedures for active cases, and FNS 
is including 2.75 hours of additional time for State agencies to 
complete the FNS 380 worksheet for each case review to properly review 
and document according to the new procedures for the active case 
review. The revised total ongoing burden associated with this rule for 
this component is 385,844.12 reporting and recordkeeping burden

[[Page 64777]]

hours and the first year's total reporting and recordkeeping burden due 
to rulemaking including the startup hours is 196,915.17 hours, bringing 
the total burden in the first year of implementation of the rule to 
582,759.29 reporting and recordkeeping hours for this component.
    Component (2) FNS 380-1 [OMB Control Number: 0584-0299], is SNAP's 
QC Review Schedule which collects QC and household characteristics 
data. The information needed to complete this form is obtained from the 
SNAP case record and State quality control findings. The information is 
used to monitor and reduce errors, develop policy strategies, and 
analyze household characteristic data. FNS estimates this rule will 
require 53 State agencies a revised total of 63,853.892 ongoing 
reporting and recordkeeping burden hours annually for this component of 
this collection. This is an increase of 14,735.33 burden hours. An 
estimated total of 742 additional startup hours are necessary for the 
first year's implementation of components within this collection for 
this rule. This startup includes 2 hours for 371 State QC reviewers to 
be trained on how to use SNAPQCS's automated FNS 380-1 worksheet. The 
revised total reporting and recordkeeping ongoing burden hours for the 
first year 64,595.89 hours.
    Component (3) In the 275 regulations [OMB Control Number: 0584-
0303], each State agency is required to develop a QC sampling plan that 
demonstrates the integrity of its case selection procedures. The QC 
system is designed to measure each State agency's payment error rate 
based on a statistically valid sample of SNAP cases. A State agency's 
payment error rate represents the proportion of cases that were 
reported through a QC review as being ineligible, overissued and 
underissued as well as the proportion of SNAP allotments that were 
either overissued or underissued to SNAP households. The FNS 311 
Handbook is used by State agencies as a reference tool for creating 
their sampling plans. The current ongoing reporting and recordkeeping 
burden for this collection is 2,829 hours. FNS estimates this rule will 
require 53 State agencies a revised total of 2,829 ongoing reporting 
and recordkeeping hours and an additional 2,120 startup reporting 
burden hours for this first year of implementation of components within 
this rule. These startup hours include 40 hours for 53 State agency 
statisticians to update their State's sampling procedures to comply 
with the new sampling requirements of this rule. The first year of 
implementation for this component of the rule will require a total of 
4,949 reporting and recordkeeping burden hours.
    In total, FNS estimates this rule will decrease the overall ongoing 
burden associated with these three collections by 5,416 reporting 
burden hours. The overall total burden for these three components 
associated with the rule will require 53 State agencies, a total of 
422,951 ongoing reporting and recordkeeping burden hours and 59,146 
households 29,573 ongoing reporting burden hours annually. FNS also 
estimates this rule will require State agencies an additional 
199,777.17 startup burden hours to implement the changes in this rule. 
Therefore, a grand total of 652,302 reporting and recordkeeping burden 
hours are estimated for this first year of implementation for this 
rule. This rule affects the three components of the QC process 
mentioned above, the use of (1) FNS forms 380, (2) FNS 380-1 and (3) 
the creation of the State QC Sampling plan attestation. The average 
burden per response and the annual startup and ongoing burden hours are 
explained below and summarized in the charts that follow.

Ongoing Reporting and Recordkeeping Burden

    FNS 380: A SNAP worksheet used to determine eligibility and 
allotment amounts for households selected for review in the QC sample 
of active SNAP cases.
    Reporting Respondents for this Proposed Rule: 59,199 (59,146 
Individuals/Households and 53 State, Local and Tribal Government).
    Estimated reporting responses for this Rule: 473,172 responses 
(59,146 for Individuals/Households and 473,172 for State, Local and 
Tribal Government).
    Estimated hours per reporting response: 6.58 hours (0.5 hours for 
Individuals/Households and 6.08 hours for State, Local and Tribal 
Government).
    Estimated Responses per Respondent to report for this Rule: 7812.81 
(7,811.81 responses per State agency and 1 response per Household).
    Estimated Reporting hours for this Rule: 384,449 hours (354,876 
hours for State agencies and 29,573 burden hours for Households).
    Estimated Records to keep per respondent for this Rule: 59,146 
records for State agencies and there is no recordkeeping burden imposed 
on Individuals/Households.
    Estimated hours per recordkeeping response: 0.0236 hour.
    Estimated Total Recordkeeping hours for this Rule: 1,396 hours.
    Estimated Total Ongoing Annual Reporting and Recordkeeping Burden 
for this rule: 385,845 hours.
    Rule impacting ongoing reporting and recordkeeping burden: -20,151 
hours.
    FNS 380-1: SNAP's QC Review Schedule which collects QC and 
household characteristics data.
    Respondents for this Proposed Rule: 53 State, Local, and Tribal 
Government.
    Estimated Responses for this Proposed Rule: 59,146 responses.
    Estimated Responses per Respondent to report for this Proposed 
Rule: 1,115.96 responses.
    Estimated hours to report each response: 1.056 hours.
    Estimated Total Reporting burden for this Rule: 62,458 hours.
    Estimated Records to keep for this Proposed Rule: 59,146 responses.
    Estimated Number of Records to keep per respondent for this Rule: 
1,115.96 records per respondent to keep.
    Estimated hours per recordkeeping response: 0.0236 hour.
    Estimated Total Recordkeeping burden for this Rule: 1,395.84 hours.
    Estimated Annual reporting and recordkeeping Burden on Respondents 
for this Proposed Rule: 63,853.89 hours.
    Rule impacting ongoing reporting and recordkeeping burden: 
+14,735.33 hours.

FNS 275 Rules: Sampling Plan, 3rd Party Contractors, Arbitration, Good 
Cause, New Investment

    Estimated Respondents for this Proposed Rule: 53 State, Local, and 
Tribal Government.
    Estimated Number of Responses per Respondent to report for this 
Proposed Rule: 129 responses.
    Estimated hours to report for each response: 21.91 hours.
    Estimated Total Reporting Burden for this rule: 2826 hours.
    Estimated Records to keep for this Rule: 246 records.
    Estimated Records to keep per respondent for this Rule: 4.64 
records per respondent.
    Estimated hours to keep records for each response: 0.118 hours.
    Estimated Total Recordkeeping burden for this Rule: 2.7612 hours.
    Estimated annual reporting and recordkeeping Burden on Respondents 
for this Proposed Rule: 545 hours.
    Rule impacting ongoing reporting and recordkeeping burden: 0 hours.
    Estimated Grand Total Reporting and Recordkeeping Ongoing burden 
for this rule: 2,828.75 hours.
    Estimated Total Rule impacting ongoing reporting and recordkeeping 
burden: 0 hours.

[[Page 64778]]

Startup Reporting and Recordkeeping Burden

    FNS 380:
    Reporting Respondents for this Proposed Rule: 687 State, Local and 
Tribal Government (53 State agencies and 634 State QC reviewers).
    Estimated Number of startup reporting responses for this Rule: 
237,218 responses.
    Estimated hours per reporting response: .83 hours.
    Estimated Number of annual Reporting hours for this Rule: 196,915 
hours.
    Estimated Total Recordkeeping startup hours for this Rule: 0 hours.
    Estimated Total startup year Burden for this Rule: 196,915 hours.
    FNS 380-1:
    Reporting Respondents for this Proposed Rule: 371 State QC 
Reviewers.
    Estimated Number of startup reporting responses per respondent for 
this Rule: 1 response.
    Estimated hours per reporting response: 2 hours.
    Estimated Number of annual Reporting hours for this Rule: 742 hours 
for State reviewers.
    Estimated Total startup year Reporting and Recordkeeping Burden for 
this Rule: 742 hours.
    FNS 275:
    Reporting Respondents for this Proposed Rule: 53 State, Local and 
Tribal Government.
    Estimated Number of startup reporting responses for this Rule: 53 
responses.
    Estimated hours per reporting response: 40 hours.
    Estimated Number of Responses per Respondent to report for this 
Rule: 1 response.
    Estimated Number of annual Reporting hours for this Rule: 2,120 
hours.
    Estimated Total Recordkeeping startup hours for this Rule: 0 hours.
    Estimated Total startup Burden for this component of this Rule: 
2,120 hours.
    Estimated Grand Total Reporting and Recordkeeping Startup burden 
for this rule: 452,524.40 hours.
    Estimated Grand Total Reporting and Recordkeeping burden for first 
year for this rule: 652,302 hours.

                                                         Table A.1--Revised I/H Reporting Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Reporting burden for individuals/households FNS 380, OMB 0584-0074
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Revised      Revised
                                                   Estimated    Estimated     Revised     number of    estimated     Previous    Difference   Difference
         Reg. section            Description of    number of    responses      total        burden       total      submission     due to       due to
                                    activity      respondents      per         annual     hours per      burden    total hours    program    adjustments
                                                                respondent   responses     response      hours                    changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
275.12 (c)(1).................  Personal            59,146.00            1    59,146.00          0.5       29,573       22,748  ...........       +6,825
                                 Interviews--Ind
                                 ividuals or
                                 Households.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Individuals & Households Grand Total            59,146.00  ...........    59,146.00  ...........       29,573  ...........  ...........       +6,825
     Reporting Burden Hours.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Table A.2--Revised State agency (SA) Reporting and Recordkeeping Burden 0584-0074
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Revised     Revised
                                                     Est number   Estimated     Revised    number of   estimated     Previous    Difference   Difference
          Reg. section             Description of        of       responses      total       burden      total      submission     due to       due to
                                      activity      respondents      per         annual    hours per     burden    total hours    program    adjustments
                                                                  respondent   responses    response     hours                    changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Reporting Burden for State Agencies FNS 380, OMB 0584-0074
--------------------------------------------------------------------------------------------------------------------------------------------------------
275.12 (b).....................  Household Case              53     1,115.96       59,146          2      118,292   136,490.37      -18,199  ...........
                                  Record Review.
275.12 (c).....................  Field                       53     1,115.96       59,146          2      118,292   159,238.77      -40,947  ...........
                                  investigation.
275.12 (c)(1)..................  Personal                    53     1,115.96       59,146        0.5       29,573    22,748.40        6,825  ...........
                                  interviews.
275.12 (d)(1)..................  Variance                    53     1,115.96       59,146        0.5       29,573    40,947.11      -11,374  ...........
                                  identification.
275.12 (e).....................  Error analysis...           53     1,115.96       59,146        0.5       29,573    22,748.40        6,825  ...........
275.12 (f).....................  Reporting of                53     1,115.96       59,146       0.25       14,786          n/a       14,786  ...........
                                  review findings.
275.12 (d)(3)..................  Reporting all               53     1,115.96       59,146       0.25       14,786          n/a       14,786  ...........
                                  variances to
                                  Local offices.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub Total Reporting Burden....................           53     7,811.72      414,021       6.08      354,875      382,173      -27,298            0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Recordkeeping Burden for State Agencies FNS 380, OMB 0584-0074
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  FNS 380 Recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
275.4..........................  Record Retention.           53     1,115.96       59,146     0.0236        1,396     1,073.73   322.113568  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Grand Total Reporting & Recordkeeping Burden..           53  ...........      473,167    0.75295      356,271      383,247      -26,976            0
--------------------------------------------------------------------------------------------------------------------------------------------------------


                         Table A.3--State Agency (SA) Reporting Startup Burden 0584-0074
----------------------------------------------------------------------------------------------------------------
                                                                                          Startup      Startup
                                                  Estimated    Estimated     Startup     number of    estimated
         Reg. section           Description of    number of    responses      annual       burden       total
                                   activity      respondents      per       responses    hours per      burden
                                                               respondent                 response      hours
----------------------------------------------------------------------------------------------------------------
         Reporting Burden Hours for State Agencies FNS 380, OMB 0584-0074 STARTUP Hours First Year Only
----------------------------------------------------------------------------------------------------------------
275.12 (d)(1)................  Variance                   53     1,115.96       59,146         0.75    44,359.41
                                identification.

[[Page 64779]]

 
275.12 (e)...................  Error analysis..           53     1,115.96       59,146         0.75    44,359.41
275.12 (f)...................  Reporting of               53     1,115.96       59,146          0.5    29,572.94
                                review findings.
275.12 (d)(3)................  Reporting                  53     1,115.96       59,146         0.75    44,359.41
                                findings to
                                Local offices.
275.12.......................  Training State            263            1          263           40    10,520.00
                                Agency QC
                                reviewers on
                                New Actives
                                Process only.
275.12 and 275.21 (b)(1).....  Train reviewers           371            1          371           64    23,744.00
                                on New Actives
                                Process AND
                                train new
                                SNAPQCS users
                                (reviewers) how
                                to use SNAPQCS
                                for 380.
----------------------------------------------------------------------------------------------------------------
    Grand Total STARTUP Hours Reporting Burden           687   345.294789      237,218       106.75   196,915.17
     Only.
----------------------------------------------------------------------------------------------------------------


                                                                 Table A.4--State Agency (SA) Reporting Revised Burden 0584-0299
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Revised
                                                                                     Estimated    Estimated     Revised     number of       Revised        Previous      Difference   Difference
                  Reg. section                        Description of  activity       number of    responses      total        burden       estimated      submission       due to       due to
                                                                                    respondents      per         annual     hours per    total annual     total hours     program    adjustments
                                                                                                  respondent   responses     response    burden hours                     changes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               FNS 380-1 Reporting for State Agencies OMB Control Number 0584-0299
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
275.12(f)......................................  Reporting of Review Findings.....           53     1,115.96       59,146        1.056      62,458.049       48,044.83    14,413.22  ...........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Grand Total Reporting Burden Hours Only.......................................           53     1,115.96        59146        1.056      62,458.049  ..............    14,413.22  ...........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reg. section                                          Description of activity        Estimated    Estimated      Annual      Ongoing       Number of      Previously    Differences  Differences
                                                                                     number of    responses    responses    number of    annual burden    submission       due to       due to
                                                                                    respondents      per                      burden       hours per     total burden     program    adjustments
                                                                                                  respondent                hours per      response                       changes
                                                                                                                             response
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 FNS 380-1 Recordkeeping Ongoing
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
275.4..........................................  Record Retention.................           53     1,115.96       59,146       0.0236     1395.842768      1,073.7292     322.1136  ...........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Grand Total Affected Public...................................................           53     2,231.92      118,292         1.08      63,853.892       49,118.56    14,735.33  ...........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                              Table A.5--State Agency (SA) Startup Burden 0584-0299
----------------------------------------------------------------------------------------------------------------
                                                                                                        Startup
                                                                   Estimated                 Startup   number of
                                   Description  of    Estimated    responses     Startup    number of    annual
          Reg. section                activity        number of       per         annual      burden     burden
                                                     respondents   respondent   responses   hours per  hours per
                                                                                             response   response
----------------------------------------------------------------------------------------------------------------
           FNS 380-1 Reporting for State Agencies OMB Control Number 0584-0299 STARTUP First Year Only
----------------------------------------------------------------------------------------------------------------
275.21 (b)(1)..................  Train new State             371            1          371          2        742
                                  agency reviewers
                                  how to use
                                  SNAPQCS for 380-1.
----------------------------------------------------------------------------------------------------------------
    Grand Total STARTUP Hours Reporting Burden Only          371            1          371          2        742
----------------------------------------------------------------------------------------------------------------


                                                  Table A.6--State Agency (SA) Revised Burden 0584-0303
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Revised
                                                 Estimated     Estimated     Revised       Revised     estimated     Previous    Difference   Difference
         Reg. section           Description of   number of     responses      total       number of      total      submission     due to       due to
                                   activity     respondents       per         annual    burden hours     burden    total hours    program    adjustments
                                                              respondent    responses   per response     hours                    changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            275 Regs Reporting OMB 0584-0303
--------------------------------------------------------------------------------------------------------------------------------------------------------
275.11(a)(1)-(a)(2)..........  Sampling Plan..           53             1           53            20        1,060        1,060            0            0
275.2(c)(1)(i)...............  Use of 3rd                 3             1            3          0.25         0.75         0.75            0            0
                                Party
                                Contractors--N
                                otification of
                                intent to hire.
275.2(c)(1)(ii)..............  Use of 3rd                 3             1            3           0.5          1.5          1.5            0            0
                                Party
                                Contractors--S
                                ubmission of
                                signed
                                contract and
                                tasks.

[[Page 64780]]

 
275.2(c)(1)(iii).............  Use of 3rd                 3             1            3           0.5          1.5          1.5            0            0
                                Party
                                Contractors--S
                                ubmission of
                                completed
                                deliverables.
275.2(c)(1)(iv)..............  Use of 3rd                 3             1            3          0.08         0.24         0.24            0            0
                                Party
                                Contractors--N
                                otification of
                                training
                                sessions.
275.2(c)(4)..................  Arbitration               12             3           36            34        1,224        1,224            0            0
                                Process.
273.23(f)....................  Good Cause                 1             1            1           160          160          160            0            0
                                Process.
275.23(h)....................  New Investment             9             1            9            32          288          288            0            0
                                Plan Template
                                Form FNS 74 A.
275.23(h)(4).................  New Investment             9             2           18             5           90           90            0            0
                                Progress
                                Report
                                Template Form
                                FNS 74 B.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub-Total Reporting Burden................           53   2.433962264          129   21.90689922     2,825.99     2,825.99            0            0
--------------------------------------------------------------------------------------------------------------------------------------------------------
275.4........................  Sampling Plan             53             1           53        0.0236       1.2508       1.2508            0
                                Record
                                Retention.
275.4........................  Arbitration               12             3           36        0.0236       0.8496       0.8496            0
                                Process Record
                                Retention.
275.4........................  Good Cause                 1             1            1        0.0236       0.0236       0.0236            0
                                Process Record
                                Retention.
275.4........................  New Investment             9             1            9        0.0236       0.2124       0.2124            0
                                Plan Template
                                Form FNS 74 A
                                Record
                                Retention.
275.4........................  New Investment             9             2           18        0.0236       0.4248       0.4248            0
                                Progress
                                Report
                                Template Form
                                FNS 74 B
                                Record
                                Retention.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Recordkeeping Total.......................           53    2.20754717          117        0.0236       2.7612       2.7612            0
--------------------------------------------------------------------------------------------------------------------------------------------------------


                              Table A.7--State Agency (SA) Startup Burden 0584-0303
----------------------------------------------------------------------------------------------------------------
                                                                                          Revised      Revised
                                                  Estimated    Estimated     Revised     number of    estimated
         Reg. section           Description of    number of    responses      total        burden       total
                                   activity      respondents      per         annual     hours per      burden
                                                               respondent   responses     response      hours
----------------------------------------------------------------------------------------------------------------
                             275 Regs Reporting STARTUP OMB Control Number 0584-0303
----------------------------------------------------------------------------------------------------------------
275.11.......................  Implement new              53            1           53           40        2,120
                                sampling plan.
----------------------------------------------------------------------------------------------------------------
    Grand Total Reporting Burden...............           53  ...........           53  ...........        2,120
----------------------------------------------------------------------------------------------------------------


               Table A.8--Summary of Grand Total Annual Reporting & Recordkeeping Burden Estimates
----------------------------------------------------------------------------------------------------------------
                                 Description of
                                    activity         Estimated        Annual         Number of       Estimated
       Form or citation            (ongoing or       number of       responses     burden hours    total burden
                                    start up)       respondents                    per response        hours
----------------------------------------------------------------------------------------------------------------
380 SA........................  Ongoing.........              53         473,172         0.75295      353,272.00
380 I/H.......................  Ongoing.........          59,146          59,146             0.5       29,573.00
380-1.........................  Ongoing.........              53         118,292          1.0796       63,854.00
275...........................  Ongoing.........              53             246              20           2,828
380 SA........................  Startup.........              53         236,584            2.75         162,651
380 SA Staff train on Review    Startup.........             263             263              40       10,520.00
 process.
380 SA Staff train on Review    Startup.........             371             371              64       23,744.00
 process and SNAPQCS.
380-1 SA Staff for SNAPQCS....  Startup.........             371             371               2             742
275 Regulations...............  Startup.........              53              53              40           2,120
----------------------------------------------------------------------------------------------------------------
    Grand Total Reporting and Recordkeeping               59,886         888,498              98      649,304.00
     Burden for Rule.
----------------------------------------------------------------------------------------------------------------


[[Page 64781]]


                            Table A.8--Summary of Current and Rule Associated Burden
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
OMB control number 0074                                                        Rule related       Rule related
                                                                              revised ongoing        new startup
----------------------------------------------------------------------------------------------------------------
Estimated Total No. Respondents........................             45,550             13,649                687
Estimated Average No. Responses per Respondent.........           6.991833               0.97            345.294
Estimated Total Annual Responses.......................         318,478.00         154,689.00            237,218
Estimated Average Hours per Response...................               0.00  .................               0.83
Estimated Total Annual Burden Hours Requested..........            582,759            385,844         196,915.17
Current OMB Inventory..................................            405,997            405,997  .................
Difference Due to Rulemaking...........................            176,762          (-20,152)         196,915.17
----------------------------------------------------------------------------------------------------------------
OMB control number 0299                                                        Rule related       Rule related
                                                                             revised ongoing         new startup
----------------------------------------------------------------------------------------------------------------
Estimated Total No. Respondents........................              53.00                 53                371
Estimated Average No. Responses per Respondent.........          2,238.925          2,231.920                  1
Estimated Total Annual Responses.......................        118,663.000        118,291.760                371
Estimated Average Hours per Response...................            0.54654            0.54607                  2
Estimated Total Annual Burden Hours Requested..........         64,854.000        64595.89205                742
Current OMB Inventory..................................             49,119             49,119  .................
Difference Due to Rulemaking...........................             15,477             14,735                742
----------------------------------------------------------------------------------------------------------------
OMB control number 0303                                                        Rule related       Rule related
                                                                             revised ongoing         new startup
----------------------------------------------------------------------------------------------------------------
Estimated Total No. Respondents........................              53.00                 53                 53
Estimated Average No. Responses per Respondent.........             4.6420              4.642                  1
Estimated Total Annual Responses.......................                246                426                  1
Estimated Average Hours per Response...................            11.4989            11.4989                 40
Estimated Total Annual Burden Hours Requested..........              4,949              4,949              2,120
Current OMB Inventory..................................              2,829              2,825                  0
Difference Due to Rulemaking...........................                  0                 10               2120
----------------------------------------------------------------------------------------------------------------

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act, 
2002 to promote the use of the internet and other information 
technologies to provide increased opportunities for citizen access to 
Government information and services, and for other purposes.

List of Subjects

7 CFR Part 271

    Grant programs--social programs, Reporting and recordkeeping 
requirements.

7 CFR Part 275

    Grant programs--social programs, Reporting and recordkeeping 
requirements.
    Accordingly, 7 CFR parts 271 and 275 are proposed to be amended as 
follows:

PART 271--GENERAL INFORMATION AND DEFINITIONS

0
1. The authority citation for part 271 continues to read as follows:

    Authority:  7 U.S.C. 2011-2036.

0
2. In Sec.  271.2:
0
a. Revise the definition of ``active case'';
0
b. Remove the definition ``active case error rate'';
0
c. Add in alphabetical order a definition for ``Case and Procedural 
Error Rate (CAPER)'';
0
d. Revise the definitions of ``error'' and ``negative case'';
0
e. Remove the definition of ``negative case error rate'';
0
f. Revise the last sentence in the definition of ``payment error 
rate'';
0
g. Revise the definitions ``review date'' and ``sample month'';
0
h. Remove ``INS'' and add in its place ``USCIS'' in the definition of 
``Systematic Alien Verification for Entitlements (SAVE)''; and
0
i. Remove the definition ``Underissuance error rate. (See Underpayment 
error rate.)'',
    The revisions and additions read as follows:


Sec.  271.2  Definitions.

* * * * *
    Active case means a case where households experienced an 
eligibility action during the sample month which resulted in an 
issuance of benefits. For purposes of this definition, an eligibility 
action refers to initial certification, recertification, or submission 
of a required monthly, quarterly, or periodic report in the sample 
month and a benefit allotment is issued in the following month.
* * * * *
    Case and Procedural Error Rate (CAPER) means an estimate of the 
proportion of denied, suspended, or terminated cases where the 
household was incorrectly denied, suspended, or terminated or where 
procedural deficiencies exist. This estimate will be expressed as a 
percentage of completed negative quality control reviews.
* * * * *
    Error for active cases results when a determination is made by a 
quality control reviewer that a household that experienced an 
eligibility action--as described in the definition of ``active case'' 
in this section--was ineligible, received an incorrect allotment, or 
was determined ``incomplete'' by the QC reviewer. Thus, errors in 
active cases involve dollar loss to either the participant 
(underissuance) or the government (overissuance). For negative cases, 
an ``error'' means that the reviewer determines that the decision or 
process to deny, suspend, or terminate a household was incorrect.
* * * * *
    Negative case means a case where there was an action to deny, 
suspend, or

[[Page 64782]]

terminate a household during the sample month.
* * * * *
    Payment error rate * * * Each component error rate is the value of 
benefits either overissued or underissued expressed as a percentage of 
all allotments issued to completed active sample cases.
* * * * *
    Review date for quality control active cases means the date an 
eligibility action was taken to authorize the allotment. The ``review 
date'' for quality control negative cases, depending on the 
characteristics of individual State systems, could be the date on which 
the eligibility worker makes the decision to suspend, deny, or 
terminate the case, the date on which the decision is entered into the 
eligibility system, or the date of the notice to the client. For no 
case is the ``review date'' the day the quality control review is 
conducted. State agencies must consistently apply the same definition 
for review date to all sampled cases of the same classification.
* * * * *
    Sample month means the month of the sample frame from which a case 
is selected (e.g., the January sample month, for active cases, shall be 
comprised of a selection of cases where the household was certified in 
January, recertified in January, or required to have submitted a 
monthly, quarterly, or periodic report in January resulting in an 
issuance of benefits in February. The January sample month for negative 
cases would be comprised of all cases that were denied, terminated, or 
suspended in January).
* * * * *

PART 275--PERFORMANCE REPORTING SYSTEM

0
3. The authority citation for part 275 continues to read as follows:

    Authority: 7 U.S.C. 2011-2036.

0
4. In Sec.  275.2, revise paragraph (b) and add a sentence to the end 
of paragraph (d) to read as follows:


Sec.  275.2  State agency responsibilities.

* * * * *
    (b) Staffing standards. The State agency shall employ sufficient 
staff to perform all aspects of the Performance Reporting System as 
required in this part.
    (1) The State agency shall ensure that the staff used to conduct QC 
reviews operate independently from those responsible for overseeing the 
eligibility determination process to ensure objective and accurate 
assessments of the Performance Reporting System.
    (2) The staff used to conduct QC reviews shall not have prior 
knowledge of either the household or the decision under review. Where 
there is prior knowledge, the reviewer must disqualify themselves. To 
ensure no prior knowledge on the part of QC or ME reviewers, local 
project area staff shall not be used to conduct QC or ME reviews; 
exceptions to this requirement concerning local level staff may be 
granted with prior approval from FNS. However, local personnel shall 
not, under any circumstances, participate in ME reviews of their own 
project areas. Prior knowledge is defined as having:
    (i) Taken any part in the eligibility determination that has been 
made in the case;
    (ii) Discussed the case with staff who participated in the 
decision; or
    (iii) Personal knowledge of or acquaintance with persons in the 
case itself.
    (3) Nothing in this part shall preclude a State-level staff person 
to be used as a collateral contact for purposes of the QC review. Such 
contact must, however, be limited to those same rules governing all 
other collateral contacts, including privacy-related rules, found in 7 
CFR 273.2(f)(4)(ii).
* * * * *
    (d) * * * Non-compliance with this requirement, as determined by 
the Secretary, may result in the suspension or disallowance of Federal 
reimbursements for costs of the administration of SNAP for the 
system(s) found to be out of compliance, pursuant to 7 CFR 277.16.
0
5. In Sec.  275.3:
0
a. Revise paragraph (d)(1)(i);
0
b. Revise the paragraph (d)(3) heading'
0
c. Remove ``negative case error rate'' and add in its place ``case and 
procedural error rate'' in paragraph (d)(3) introductory text;
0
d. Add a sentence at the end of paragraph (d)(4)(i)(A);
0
e. Remove the phrase ``appropriate FNS regional office addressed to the 
attention of the FNS Arbitrator'' and add in its place the phrase ``FNS 
Arbitrator and copy the appropriate FNS regional office'' in paragraph 
(d)(4)(iv) introductory text; and
0
f. Remove the word ``may'' and add in its place the word ``must'' in 
the second sentence of paragraph (d)(4)(iv) introductory text.
    The revision and addition read as follows:


Sec.  275.3  Federal monitoring.

* * * * *
    (d) * * *
    (1) * * *
    (i) FNS will select a subsample of a State agency's active cases, 
as follows:
    (A) The Federal review sample for active cases is determined as 
follows:

                    Table 1 to Paragraph (d)(1)(i)(A)
------------------------------------------------------------------------
Average monthly reviewable caseload (N)   Federal subsample target (n')
------------------------------------------------------------------------
60,000 and over........................  n' = 400.
10,001 to 59,999.......................  n' = .005 N + 100.
10,000 and under.......................  n' = 150.
------------------------------------------------------------------------

    (B) In the above formula, n' is the minimum number of Federal 
review sample cases which must be selected when conducting a validation 
review, except that FNS may select a lower number of sample cases if:
    (1) The State agency does not report a change in sampling 
procedures associated with a revision in its required sample size 
within 10 days of effecting the change; or
    (2) The State agency does not complete the number of case reviews 
specified in its approved sampling plan.
    (C) The reduction in the number of Federal cases selected will be 
equal to the number of cases that would have been selected had the 
Federal sampling interval been applied to the State agency's shortfall 
in its required sample size. This number may not be exact due to random 
starts and rounding.
    (D) In the above formula, N is the State agency's minimum active 
case sample size as determined in accordance with Sec.  275.11(b)(1).
    (E) Once the minimum Federal subsample size n' is determined, the 
Federal subsample must be

[[Page 64783]]

proportionally allocated across the five strata, defined in Sec.  
275.11(g), to the State final weights to ensure there is no loss of 
precision due to differential sampling probabilities. The Federal 
subsample size for each stratum shall be determined as follows:
[GRAPHIC] [TIFF OMITTED] TP19SE23.100

    (1) In the formulas in the table above, N is the sampling universe/
monthly caseload; F is the sampling frame; n is the State sampling 
size; n' is the Federal subsample size; W is the State sampling 
weights; and W' is the Federal sampling weights.
    (2) For stratum i, the Federal subsample size n'i shall 
be proportional to the final State weight for that stratum, Wi, in 
other words
[GRAPHIC] [TIFF OMITTED] TP19SE23.101


This means that the sampling probability for cases in stratum i is 
Wi/W and the final weight for the cases selected for the 
Federal subsample from stratum i, W'i, is given by:
[GRAPHIC] [TIFF OMITTED] TP19SE23.102


for every i, which is a constant across the strata. This makes the 
Federal subsample self-weighting.
* * * * *
    (3) Case and procedural error rate. * * *
* * * * *
    (4) * * *
    (i) * * *
    (A) * * * No other types of disagreement are eligible for 
arbitration.
* * * * *
0
6. In Sec.  275.11:
0
a. Revise paragraphs (a) introductory text, (a)(1) through (3), and 
(b)(1) and (2);
0
b. Remove paragraph (b)(4);
0
c. Revise paragraphs (c)(1) and (2), (e) introductory text, (e)(1), and 
(f)(1);
0
d. Redesignate paragraph (g) as paragraph (i); and
0
e. Add new paragraph (g) and paragraph (h).
    The revisions and additions read as follows


Sec.  275.11  Sampling.

    (a) Sampling plan. Each State agency shall develop a quality 
control sampling plan that is compliant with this section and 
demonstrates the integrity of its sampling procedures.
    (1) Content. The sampling plan shall include a complete description 
of the frame, the method of sample selection, and methods for 
estimating characteristics of the population and their sampling errors 
that the State

[[Page 64784]]

agency will apply when conducting its quality control procedures. The 
description of the sample frames shall include: source, availability, 
accuracy, completeness, components, location, form, frequency of 
updates, deletion of cases not subject to review, and structure. The 
description of the methods of sample selection shall include procedures 
for: estimating caseload size, addressing corrections, computation of 
sampling intervals and random starts (if any), stratification, 
identifying sample cases, correcting over-or under sampling, and 
monitoring sample selection and assignment. The State agency shall 
provide FNS with a schedule for completion of each step in the sampling 
procedures contained in this section.
    (2) Criteria. All sampling plans shall:
    (i) Conform to principles of probability sampling; and (ii) Select 
an overall quality control sample size in accordance with paragraphs 
(b) through (f) of this section.
    (3) Design. Each State agency shall, over the course of the annual 
review period, implement a sample design each month for both active and 
negative case samples. For the active case sample selection, the State 
agency shall define the sampling frame as the monthly list of active 
cases as defined in 7 CFR 271.2. This list reflects a subset of all the 
active SNAP cases in a given month. This list will then be stratified 
for sample selection based on action type and the length of the 
certification or reporting period. Within each of these strata, each 
month, the State agency may select a systematic sample or use another 
method of random selection (e.g., sorting the cases in a random order 
and selecting the first `m' number of cases required to meet the 
monthly sample target) of cases to equal the overall sample size 
required for the year, divided evenly by twelve.
* * * * *
    (b) * * *
    (1) Active cases. (i) All active cases shall be selected in 
accordance with procedures specified in this section, and the review 
findings shall be included in the calculation of the State agency's 
payment error rate. A State agency shall select a sample that is 
divided equally across 12 months. Sample size is specified as follows:

                     Table 1 to Paragraph (b)(1)(i)
------------------------------------------------------------------------
Average monthly reviewable caseload (N)   Minimum annual sample size (n)
------------------------------------------------------------------------
60,000 and over........................  n = 1,326.
12,942 to 59,999.......................  n = 390 + [0.0199(N-12,941)].
Under 12,942...........................  n = 390.
------------------------------------------------------------------------

    (ii) In the formulas in paragraph (b)(1)(i) of this section, n is 
the required active case sample size. This is the minimum number of 
active cases subject to review which must be selected during the annual 
review period. One-twelfth of this value shall be selected each month, 
rounded to the next whole number (e.g., if the yearly sample size is 
1,326 then 111 would be sampled monthly). In the same formulas, N is 
the average monthly participating caseload subject to quality control 
review (i.e., cases which are included in the active universe defined 
in paragraph (e)(1) of this section) during the annual review period.
    (2) Negative cases. (i) All negative cases shall be selected in 
accordance with procedures specified in this section, and the review 
findings shall be included in the calculation of the State agency's 
case and procedural error rate.
    (ii) The minimum number of negative cases to be selected and 
reviewed by a State agency during each annual review period shall be 
determined as follows:

                     Table 2 to Paragraph (b)(2)(ii)
------------------------------------------------------------------------
  Average monthly reviewable negative
              caseload (N)                Minimum annual sample size (n)
------------------------------------------------------------------------
5,000 and over.........................  n = 680
684 to 4,999...........................  n = 150 + [ 0.1224(N-683)]
Under 684..............................  n = 150
------------------------------------------------------------------------

    (iii) In the formulas in paragraph (b)(2)(ii) of this section, n is 
the required negative sample size. This is the minimum number of 
negative cases subject to review which must be selected each review 
period.
    (iv) In the formulas in paragraph (b)(2)(ii) of this section, N is 
the average monthly number of negative cases which are subject to 
quality control review (i.e., cases which are part of the negative 
universe defined in paragraph (e)(2) of this section) during the annual 
review period.
* * * * *
    (c) * * *
    (1) Substitutions. Once a case has been identified for inclusion in 
the sample by a predesigned sampling procedure, substitutions are not 
acceptable. An active case must be reviewed each time it is selected 
for the sample. If a case is selected more than once for the negative 
sample as the result of separate and distinct instances of denial, 
suspension, or termination, it must be reviewed each time.
    (2) Corrections. Under sampling must be corrected during the annual 
review period. Oversampling may be corrected at the State agency's 
option. Cases which are dropped to compensate for oversampling shall be 
reported as not subject to review. Because corrections must not bias 
the sample results, cases which are dropped to compensate for 
oversampling must comprise a random subsample of all cases selected 
(including those completed, not completed, and not subject to review). 
Cases which are added to the sample to compensate for under sampling 
must be randomly selected from the entire frame in accordance with the 
sample size, sample selection, sampling frame, and sample allocation 
procedures specified in paragraphs (b), (c) (e), and (g) of this 
section. All sample adjustments must be fully documented and available 
for review by FNS.
* * * * *
    (e) Sample frame. The State agency shall select cases for quality 
control review from a sample frame. Complete

[[Page 64785]]

coverage of the sample universes, as defined in paragraph (f) of this 
section, must be assured so that every case subject to quality control 
review has an equal or known chance of being selected in the sample. 
Since the SNAP quality control review process requires an active and 
negative sample, two corresponding sample frames are also required.
    (1) Active cases. The sample frame shall consist of all active 
cases as defined in 7 CFR 271.2. Cases which did not experience any of 
these eligibility actions in the sample month shall be removed prior to 
sampling. State agencies must use a list of certified and recertified 
cases as well as the household's report due date for the following 
reporting systems: monthly, quarterly, and simplified.
* * * * *
    (f) * * *
    (1) Active cases. The universe for active cases shall include all 
households in which any of the following eligibility actions occurred 
in the sample month: initial certification, recertification, or a 
required monthly, quarterly, or periodic report was due during the 
sample month and a benefit allotment is issued in the following month. 
The following shall be excluded from the sampling frame:
    (i) A household receiving Disaster-SNAP benefits under the 
authority of the Food and Nutrition Act of 2008, as amended, and the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act;
    (ii) A household which is under investigation for an intentional 
Program violation, including a household with a pending administrative 
disqualification hearing;
    (iii) A household appealing an adverse action which was the result 
of an eligibility action taken during the sample month; or
    (iv) Other households excluded from the active case universe during 
the review process are identified in 7 CFR 275.12(g).
* * * * *
    (g) Active sample allocation. States shall stratify both the sample 
universe and the sampling frame specified in paragraphs (e)(1) and 
(f)(1) of this section according to the five strata described in 
paragraphs (g)(1)(i) through (v) of this section. If not all 5 strata 
exist, the State shall allocate the full sample across the existing 
strata according to the following guidelines:
[GRAPHIC] [TIFF OMITTED] TP19SE23.103

    (1) In table 3 to paragraph (g) introductory text, strata a through 
e have the following action types and reporting periods:
    (i) Stratum a--Action type: initial certification or re-
certification; Reporting period: less than 6 months;
    (ii) Stratum b--Action type: redetermination based on a monthly, 
quarterly or periodic report; Reporting period: less than 6 months;
    (iii) Stratum c--Action type: initial certification or 
recertification; Reporting period: 6 months;
    (iv) Stratum d--Action type: redetermination based on a monthly, 
quarterly or periodic report; Reporting period: 6 months;
    (v) Stratum e--Action type: all; Reporting period: more than 6 
months.
    (2) State agencies shall allocate 10 percent of the sample to 
stratum a and 10 percent of the sample to stratum b. The remaining 80 
percent of the sample should be allocated in a manner proportionate to 
the size of the strata in the sample universe as described in table 3 
to paragraph (g) introductory text.
    (3) If a State agency does not have stratum a or b or both, it 
shall allocate the full sample size proportionately to the size of the 
existing strata in the sample universe.
    (4) In the formulas in table 3 to paragraph (g) introductory text, 
N represents the sample universe (i.e., the total number of eligible 
SNAP cases) and Na (for example) represents the number of 
SNAP cases in the universe that belong to stratum a; F represents the 
total number of eligible SNAP cases in the sampling frame (i.e., the 
list of eligible SNAP cases having one of the three actions in the 
month of selection) and Fa (for example) represents the 
number of SNAP cases in the frame that belong to stratum a; n 
represents the total sample size and na (for example) 
represents the number of SNAP cases selected from stratum a meeting the 
stratum requirements.
    (5) Within each stratum the State agency shall select the 
designated number of cases at random or using a systematic method upon 
a random sort of the cases. If in any strata the number of cases to be 
sampled exceeds the actual number in the frame, the State shall select 
all of the cases in that stratum. For example, if the proposed sample 
size for stratum a is greater than Fa then the State agency 
shall take all Na SNAP cases for stratum a, hence 
na = Fa, and allocate (n-na-
nb) to the last three

[[Page 64786]]

strata proportionately to the size of these strata in the sample 
universe (N).
    (h) Weighting. Given that the active stratified sampling design 
oversamples some strata and under-samples others, weighting is 
necessary. The weights for the active cases sample are defined as 
follows:

Wi = (Ni/Fi) x (Fi/
ni) = Ni/ni for i=a,b,c,d,e

    State agencies are responsible for providing to FNS the counts 
Ni, Fi, and ni (for i=a,b,c,d,e) as 
part of the sampling plan described at 7 CFR 275.11(a)(4).
* * * * *
0
7. In Sec.  275.12:
0
a. Revise paragraphs (a) and (b);
0
b. Add a sentence at the end of paragraph (c) introductory text;
0
c. Revise paragraphs (c)(1) introductory text and (c)(1)(iii) ;
0
d. Remove the phrase ``the State'' and add in its place the phrase 
``State law'' in the third sentence of paragraph (c)(1)(iv);
0
e. Add the phrase ``or in the case file'' at the end of the first 
sentence of paragraph (c)(2);
0
f. Remove the phrase ``as of the review date'' and add in its place the 
phrase ``by the reviewer'' and remove the phrase ``at the most recent 
certification action)'' and add in its place the phrase ``in the 
eligibility action under review)'' in paragraph (d) introductory text;
0
g. Remove the phrase ``for the sample month'' in paragraph (d)(2) 
introductory text;
0
h. Add a sentence after the second sentence and remove the last 
sentence of paragraph (d)(2)(ii);
0
i. Remove paragraphs (d)(2)(iii) and (ix);
0
j. Redesignate paragraphs (d)(2)(iv) through (viii) as paragraphs 
(d)(2)(iii) through (d)(2)(vii);
0
k. Remove the phrase ``Immigration and Naturalization Service's (INS)'' 
and add in its place the phrase ``United States Citizenship and 
Immigration Services (USCIS)'' in newly redesignated paragraph 
(d)(2)(v) introductory text;
0
l. Remove ``INS'' and add in its place ``USCIS'' in newly redesignated 
paragraphs (d)(2)(v)(A) introductory text, (d)(2)(v)(A)(3) (two 
occurrences), (d)(2)(v)(B) introductory text, and (d)(2)(v)(B)(2);
0
m. Remove the phrase ``category three and four Policy Memoranda under 
the Policy Interpretation Response System'' and add in its place the 
phrase, ``FNS policy memoranda'' in newly redesignated paragraph 
(d)(2)(vii);
0
n. Revise paragraph (d)(3);
0
o. Remove the phrase ``in the sample month'' and add in its place ``as 
an error'' in the first sentence of paragraph (f)(1) and revise the 
last sentence of paragraph (f)(1);
0
p. Remove the phrase ``in the sample month'' in the first sentence of 
paragraph (f)(2) and revise the last sentence of paragraph (f)(2);
0
q. Add a sentence to the end of paragraph (g)(1) introductory text;
0
r. Revise paragraphs (g)(1)(ii) and (g)(2)(i) and (ii);
0
s. Remove paragraphs (g)(2)(iv), (ix), and (x);
0
t. Redesignate paragraphs(g)(2)(v) through (viii) as paragraphs 
(g)(2)(iv) through (vii); and
0
u. Revise newly redesignated paragraphs (g)(2)(vi) and (vii).
    The revisions and additions read as follows:


Sec.  275.12  Review of active cases.

    (a) General. A sample of households that experienced an eligibility 
action--i.e., certified for SNAP, recertified for SNAP, or required to 
have submitted a monthly, quarterly, or periodic report in the sample 
month which resulted in an issuance of benefits in the following month, 
shall be selected for active case review. These active cases shall be 
reviewed to determine if the household was eligible and, if eligible, 
whether the household received the correct allotment. The determination 
of a household's eligibility shall be based on an examination and 
verification of all elements of eligibility (i.e., non-financial 
eligibility requirements, resources, income, and deductions). The 
verified circumstances and the resulting benefit level determined by 
the quality control review shall be compared to the benefits authorized 
by the State agency. The review of active cases shall include: a 
household case record review; a field investigation; the identification 
of any variances; an error analysis; and the reporting of review 
findings.
    (b) Household case record review. The reviewer shall examine the 
household case record to identify the facts relating to the household's 
eligibility and basis of issuance. The case record review shall include 
all information applicable to the eligibility action under review, 
including the application and, as applicable, the monthly, quarterly, 
or periodic report and worksheet in effect as of the review date. 
Documentation contained in the case record should be used as 
verification if it was verified using documentary evidence at the time 
of the certification action. If during the case record review the 
reviewer can determine and verify the household's ineligibility, the 
review can be terminated at that point, provided that, if the 
determination is based on information not obtained from the household, 
the correctness of that information is confirmed as specified in 
paragraph (c)(2) of this section. The reviewer shall utilize 
information obtained through the case record review to complete column 
(2) of the Form FNS-380, and to tentatively plan the content of the 
field investigation.
    (c) * * * In obtaining documentary evidence and collateral contact 
verification, the State agency is encouraged to utilize technology to 
assist in the gathering of documentary evidence, however the State 
agency shall ensure it preserves the privacy and confidentiality of the 
household regardless of what technology it uses.
    (1) Personal interviews. State agencies shall conduct interviews in 
a manner that respects the rights, privacy, and dignity of the 
participants. The personal interview shall be a telephone interview 
unless the household requests a face-to-face interview or indicates 
they lack access to a telephone. Prior to conducting the personal 
interview, the reviewer must notify the household that it has been 
selected, as part of an ongoing review process, for review by quality 
control, that a personal interview will be conducted in the future, and 
that the household may request a face-to-face interview in lieu of a 
telephone interview. For face-to-face interviews, the interview may 
take place at the participant's home, at an appropriate State agency 
certification office, by secure video call, or at a mutually agreed 
upon alternative location. Should a face-to-face interview be 
warranted, the State agency shall determine the best location for the 
face-to-face interview, taking into account input from the household, 
including any hardship conditions or disability needs of the household. 
If the household meets any of the hardship conditions at 7 CFR 
273.2(e)(2), the quality control reviewer shall either conduct the 
personal interview with the participant's authorized representative, if 
one has been appointed by the household, or at a place of the 
participant's choosing. During the personal interview with the 
participant, the reviewer shall:
* * * * *
    (iii) Request and review with the household documentary evidence in 
the case file, as well as documentary evidence that may be in the 
household's possession, and secure information about collateral sources 
of verification; and
* * * * *
    (d) * * *
    (2) * * *

[[Page 64787]]

    (ii) * * * For this exclusion to apply, the case record must 
include documentation specifying the elements of eligibility for which 
verification was postponed.
    (3) Other findings. All QC review findings must be reported to the 
local office by the State agency. However, State agencies may determine 
if and how to act upon findings made during the review that are 
pertinent to the case record but do not result in a variance. For 
example, the State may establish its own procedures for cases when a 
household member's age is shown incorrectly in the case record, if 
their age is unrelated to an element of eligibility.
* * * * *
    (f) * * *
    (1) * * * In addition, the reviewer shall code and report any other 
variances related to eligibility which were discovered and verified 
during the course of the review and the State agency shall notify the 
local office of all variances in elements of eligibility.
    (2) * * * The reviewer shall code and report any other variances in 
the basis of issuance which were discovered and verified during the 
course of the review and the State agency shall notify local offices of 
all variances in elements of the basis of issuance.
    (g) * * *
    (1) * * * The total allotment issued, shall be coded and reported 
as an error when the case is reported as not complete.
* * * * *
    (ii) If a household refuses to cooperate with the quality control 
reviewer and the State agency has taken other administrative steps to 
obtain that cooperation without obtaining it, the household shall be 
notified of the penalties for refusing to cooperate with respect to 
termination and reapplication and of the possibility that its case will 
be referred for investigation for willful misrepresentation. If a 
household refuses to cooperate after such notice, the reviewer must 
attempt to complete the case and shall report the household's refusal 
to the State agency for termination of its participation without regard 
for the outcome of that attempt. For a determination of refusal to be 
made, the household must be able to cooperate but clearly demonstrate 
that it will not take actions that it can take and that are required to 
complete the quality control review process. In certain circumstances, 
the household may demonstrate that it is unwilling to cooperate by not 
taking actions after having been given every reasonable opportunity to 
do so, even though the household or its members do not state that the 
household refuses to cooperate. Examples of when a household appears to 
be unwilling to cooperate with a QC review that have the effect of a 
refusal to cooperate shall include:
    (A) The household does not attend an agreed upon interview with the 
reviewer and then does not contact the reviewer within 10 calendar days 
of the date of the scheduled interview to reschedule the interview.
    (B) The household does not return a signed release of information 
statement to the reviewer within 10 calendar days of either agreeing to 
do so or receiving a request from the reviewer sent Certified Mail-
Return Receipt Requested.
    (C) The household does not respond to any communication sent from 
the reviewer, and either:
    (1) The household has not responded to a letter sent to the 
household's current known address via Certified Mail-Return Receipt 
requesting a response within 30 calendar days of the date of receipt, 
or
    (2) The household has not responded to a written request for 
quality control contact (RFQCC). The RFQCC, sent by the State agency at 
the reviewer's request, must have advised the household of the 
following: that quality control is trying to contact them for a review; 
the requirement of the household to cooperate with the quality control 
review; the penalties for not responding to the RFQCC and not 
cooperating with the quality control review; and the contact 
information the household must use to get in touch with the quality 
control reviewer or office. The RFQCC must have afforded the household 
at least 10, but no more than 15 calendar days to respond from the date 
on the letter. RFQCC requests from the reviewer must be fulfilled by 
the State agency.
    (i) If the household does not respond to the RFQCC by the deadline 
provided in the request, the reviewer must report the household's 
failure to respond to the State agency and request the State agency 
issue a notice of adverse action to suspend the household for one month 
before a termination becomes effective. The notice of adverse action 
must include the reason the household's benefits were suspended, an 
explanation that the consequence for failing to respond to quality 
control during the suspension period is for their benefits to be 
terminated for refusal to cooperate with quality control, and the 
quality control reviewer's or office's contact information.
    (ii) If the household does not respond to the RFQCC, but does 
respond during the period of suspension and cooperates with quality 
control, the reviewer must notify the State agency to reinstate the 
household without requiring a new application and issue the allotment 
for the month of suspension.
    (D) In these and other situations, if there is any question as to 
whether the household has merely failed to cooperate, as opposed to 
refused to cooperate, the household shall not be reported to the State 
agency for termination.
* * * * *
    (2) * * *
    (i) Death of all members of a household if they died after the 
eligibility action but before the review could be undertaken or 
completed;
    (ii) The household moved out of State after the eligibility action 
but before the review could be undertaken or completed;
* * * * *
    (vi) A case incorrectly listed in the active frame; or
    (vii) A household appealing the eligibility action under review.


Sec.  275.13  [Amended]

0
8. In Sec.  275.13:
0
a. Amend paragraph (c)(2) introductory text by removing the words 
``Immigration and Nationalization Services (INS)'' and adding in their 
place ``USCIS'' and removing the words ``Systematic Alien Verification 
for Entitlements (SAVE)'' and adding in their place ``SAVE''; and
0
b. Amend paragraph (c)(2)(iii) by removing ``INS'' and adding in its 
place ``USCIS'' in both occurrences.


Sec.  275.16  [Amended]

0
9. In Sec.  275.16:
0
a. Remove the phrase ``of 1 percent or more in negative cases'' and add 
in its place the phrase ``above the national average CAPER'' in 
paragraph (b)(2);
0
b. Remove paragraph (b)(4); and
0
c. Redesignate paragraph (b)(5) as paragraph (b)(4).
0
10. In Sec.  275.21, revise paragraph (b)(1) to read as follows:


Sec.  275.21  Quality control review reports.

* * * * *
    (b) * * *
    (1) The State agency shall use SNAP-QCS, FNS's automated, web-based 
QC System for State agency users, to input, edit, and upload supporting 
evidence and information necessary to understand the disposition and 
findings for all active and negative sampled cases.
* * * * *
0
11. In Sec.  275.23:
0
a. Remove the words ``active case, payment, and negative case error 
rate''

[[Page 64788]]

and add in its place the words ``payment and case and procedural error 
rates'' in paragraph (b) introductory text;
0
b. Remove the words ``active case error rate, payment error rate, and 
negative case error rate'' and add in its place the words ``payment and 
case and procedural error rates'' in paragraph (b)(1);
0
c. Revise paragraphs (b)(2)(i)(A) and (B) and (b)(2)(ii) and (iii);
0
d. Revise the second and third sentences in paragraph (c); and
0
e. Revise the second sentence in paragraph (d)(1).
    The revisions read as follows:


Sec.  275.23  Determination of State agency program performance.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (A) Y1' = y1 + b1 (X1-
x1), where Y1' is the estimated average value of 
allotments overissued to eligible and ineligible households in the full 
Quality Control (QC) sample; y1 is the average value of 
allotments overissued to eligible and ineligible households in the re-
review sample according to the Federal finding; b1 is the 
estimated regression coefficient through a regression of the Federal 
findings of allotments overissued to eligible and ineligible households 
on the corresponding State agency findings; x1 is the re-
review average value of allotments overissued to eligible and 
ineligible households according to State agency findings; and 
X1 is the weighted average value of allotments overissued to 
eligible and ineligible households in the full QC sample according to 
State agency's findings. Based on the sample design, only X1 
is weighted to account for the probability of selection in the full QC 
sample.
    (B) Y2' = y2 + b2(X2-
x2), where Y2' is the estimated average value of 
allotments underissued to households included in the active error rate; 
y2 is the average value of allotments underissued to 
participating households in the re-review sample according to the 
Federal finding; b2 is the estimated regression coefficient 
obtained through a regression of the Federal findings of allotments 
underissued to participating households on the corresponding State 
agency findings; x2 is the re-review average value of 
allotments underissued to participating households according to State 
agency findings; and X2 is the weighted average value of 
allotments underissued to participating households in the full QC 
sample according to the State agency's findings. Based on the sample 
design, only X2 is weighted to account for the probability 
of selection in the full QC sample.
* * * * *
    (b) * * *
    (2) * * *
    (ii) If FNS determines that a State agency has sampled incorrectly, 
estimated improperly, or has deficiencies in its QC data management 
system, FNS will correct the State agency's payment error rate and case 
and procedural error rate based upon a correction to that aspect of the 
State agency's QC system which is deficient. If FNS cannot accurately 
correct the State agency's deficiency, FNS will assign the State agency 
a payment error rate or case and procedural error rate based upon the 
best information available. After consultation with the State agency, 
the assigned payment error rate can then be used in a liability 
determination, if applicable per the rules governing liabilities at 7 
CFR 275.23(d). State agencies shall have the right to appeal the 
assignment of an error rate in this situation in accordance with the 
procedures of part 283 of this chapter. State agencies assigned error 
rates that do not result in the determination of a liability amount, as 
discussed in 7 CFR 275.23(d), are not eligible for appeal.
    (iii) Should a State agency fail to sample and disposition its 
required minimum annual sample size for the fiscal year, FNS shall 
adjust the State agency's regressed error rate using the following 
equations:
    (A) r1'' = r1' + 5(1-C)S1, where 
r1'' is the adjusted regressed overpayment error rate, 
r1' is the regressed overpayment error rate computed from 
the formula in paragraph (b)(2)(i)(C) of this section, C is the State 
agency's rate of completion of its required sample size expressed as a 
decimal value, and S1 is the standard error of the State 
agency sample overpayment error rate. If a State agency completes all 
of its required sample size, then r1'' = r1'.
    (B) r2'' = r2' + 5(1-C)S2, where 
r2'' is the adjusted regressed underpayment error rate, 
r2' is the regressed underpayment error rate computed from 
the formula in paragraph (b)(2)(i)(C) of this section, C is the State 
agency's rate of completion of its required sample size expressed as a 
decimal value, and S2 is the standard error of the State 
agency sample underpayment error rate. If a State agency completes all 
of its required sample size, then r2'' = r2'.
* * * * *
    (c) * * * FNS shall determine and announce the national average 
payment error rate for the fiscal year by June 30 following the end of 
the fiscal year and shall determine and announce the national average 
case and procedural error rate for the fiscal year by September 30 
following the end of the fiscal year. At those times, FNS shall notify 
all State agencies of their individual payment and case and procedural 
error rates, respectively, and payment error rate liabilities, if any.
* * * * *
    (d) * * *
    (1) * * * The national performance measure is the sum of the 
products of each State agency's payment error rate multiplied by that 
State agency's proportion of the total value of allotments issued for 
the fiscal year using the most recent issuance data available at the 
time the State agency is notified of its payment error rate. * * *
0
12. Revise Sec.  275.24 to read as follows:


Sec.  275.24  Performance measures.

    (a) Performance measures. FNS will measure performance for the 
following categories of performance measures:
    (1) Payment accuracy. FNS will assess State agencies annually for 
individual and overall payment accuracy, including measurements for 
overpayments and underpayments of SNAP benefits issued based on the 
results of cases reviewed in the actives sampling frame.
    (i) Improvements in payment accuracy. FNS will assess the 
percentage point decrease in a State agency's combined payment error 
rates based on the comparison of the State agency's validated payment 
error rates for the performance measurement year to those of the 
previous fiscal year.
    (ii) [Reserved]
    (2) Case and procedural errors. FNS will assess State agencies 
annually to produce case and procedural error rates based on the 
results of cases reviewed in the negative sampling frame.
    (i) Most improved case and procedural error rate. FNS will assess 
the percentage point decrease in a State agency's case and procedural 
error rates, based on the comparison of the State agency's performance 
measurement year's validated quality control case and procedural error 
rates for the performance measurement year with to those of the 
previous fiscal year.
    (ii) [Reserved]
    (3) Program access index (PAI). FNS will annually assess the degree 
to which each State agency provides low-income people access to SNAP 
benefits. The PAI is the ratio of participants to persons with incomes 
below 125 percent of poverty, as calculated in accordance with 
paragraph (a)(3)(i) of this section.

[[Page 64789]]

    (i) Data. For the number of participants (numerator), FNS will use 
the administrative annual counts of participants minus the average 
amount of new participants certified under special disaster program 
rules by the State agency averaged over the calendar year. For the 
number of people below 125 percent of poverty (denominator), FNS will 
use the Census Bureau's American Community Survey (ACS) count of people 
below 125 percent of poverty for the same calendar year. FNS will 
reduce the count in each State where a Food Distribution Program on 
Indian Reservations (FDPIR) program is operated by the administrative 
counts of the number of individuals who participate in this program 
averaged over the calendar year.
    (ii) [Reserved]
    (4) Application processing timeliness. FNS will annually assess the 
timeliness of processed applications for each State agency.
    (i) Data. FNS will use quality control data to determine each State 
agency's rate of application processing timeliness.
    (ii) Timely processed applications. A timely processed application 
is one that provides an eligible applicant the ``opportunity to 
participate'' as defined in 7 CFR 274.2, within thirty days for normal 
processing or 7 days for expedited processing. New applications that 
are processed outside of this standard are untimely for this measure, 
except for applications that are properly pended in accordance with 7 
CFR 273.2(h)(2) because verification is incomplete and the State agency 
has taken all the actions described in 7 CFR 273.2(h)(1)(i)(C). Such 
applications will not be included in this measure. Applications that 
are denied will not be included in this measure.
    (b) [Reserved]

Cynthia Long,
Administrator, Food and Nutrition Service.
[FR Doc. 2023-20023 Filed 9-18-23; 8:45 am]
BILLING CODE 3410-30-P