Section 600. Sanctions and administrative actions

A. Each federal fiscal year, the state agency shall conduct compliance investigations on a minimum of 5.0% of authorized retailers (7 CFR 246.12), including completing investigations of all high risk retailers, all probationary retailers, and selective nonhigh risk retailers. The state agency will conduct at least two compliance buys at each retailer selected for an investigation.

B. The state agency shall provide written notification to the authorized retailer of the investigation results, including the retailer's violation of any statutes or regulations governing its participation in the WIC Program. Once an investigation has been closed, retailers with documented violations shall receive a final written report of the agency's findings. The final report will identify what administrative action shall be taken by the state agency against the authorized retailer.

C. Violations shall be categorized as either state agency or federally mandated. For federally mandated violations, a pattern consisting of four documented incidents of the same violation must occur during a single investigation unless a pattern requirement is not required by federal regulations.

D. For federally mandated violations including overcharge, fraud, trafficking in food instruments, selling firearms, ammunition, explosives, controlled substances, alcohol or alcoholic beverages, or tobacco products, the state agency may not provide the retailer with prior written notice that a violation or violations were documented before imposing administrative sanctions. This notification decision will be made on a case-by-case basis, depending on the type of federally mandated violation documented and if it is determined that notification would compromise the investigation.

E. The type of documented violation dictates the administrative action taken including:

1. Provision of a written warning;

2. Imposition of a technical penalty fine;

3. Assessment of a civil monetary penalty (CMP) in lieu of disqualification; or

4. Disqualification of an authorized retailer.

The total period of disqualification imposed for state agency violations identified as part of a single investigation may not exceed one year. The state agency reserves the right to waive a disqualification requirement if the state agency determines that inadequate participant access would exist if the authorization were terminated.

F. The state agency shall use a multitier sanction schedule that consists of:

Class:	Description:	Description:	Administrative Actions:
A	Technical program violations	Represents procedural and food instrument handling errors.	$100 fine assessed per documented incident, as outlined in the Sanction/Violation schedule, including repeat incidents of the same violation, plus a written warning sent to the retailer.
B	Serious program violations	Represents noncompliance errors documented by compliance investigations, inventory audits, or noncompliance with provisions outlined in the retailer agreement.	One-year disqualification for eight or more technical program violations, as outlined in the Sanction/Violation schedule, within a consecutive 12-month period of time; or One-year disqualification, if a pattern of noncompliance exists, as outlined in the Sanction/Violation schedule.
C	Critical program violations	Represents mandatory federal sanctions that require a pattern of noncompliance, i.e., overcharging.	Four documented incidents during a single investigation as outlined in the Sanction/Violation schedule – Three-year disqualification; or One documented incident as outlined in the Sanction/Violation schedule during a single investigation if a pattern is not required – Three year disqualification.
D	Major program violations	Represents mandatory federal sanctions, i.e., administrative finding of trafficking	Six-year disqualification – only one documented incident is required as outlined in the Sanction/Violation schedule; or Permanent disqualification – only one documented incident is required, as outlined in the Sanction/Violation schedule.
E	Warning	Represents a documented violation, but does not warrant points being assessed and/or a fine being charged.	Written warning sent to the retailer.

The date on which violations become effective is determined by the date indicated on the final compliance investigation letter. Class A, B, and E violations have an active life of one year, a Class C violation has an active life of three years, and a Class D violation has an active life of six years or permanent disqualification.

G. If, within a 12-month period, a retailer has three documented incidents of failure to meet the minimum stocking requirement or failure to properly stamp 50 or more deposited food instruments, then the retailer shall be disqualified for a one-year period unless the state agency determines that inadequate participant access would exist if the authorization were terminated.

H. All documented overcharges or payments for ineligible food items identified during a compliance investigation shall be considered a retailer claim and be subject to repayment.

I. Copies of any investigative evidence collected by the state agency during a compliance investigation shall be available to the authorized retailer, upon request, after the investigation has been closed and the retailer is notified in writing of the final compliance investigation results.

J. A retailer may apply for WIC authorization after the retailer has finished the disqualification period. There is no automatic reinstatement of a retailer once the disqualification period has ended.

K. The state agency shall not issue sanctions solely as a result of complaints submitted by participants.

Historical Notes

Derived from Volume 24, Issue 19, eff. May 26, 2008; amended, Virginia Register Volume 25, Issue 22, eff. July 6, 2009; Volume 29, Issue 12, eff. March 13, 2013.

Statutory Authority

§ 32.1-12 of the Code of Virginia; 7 CFR Part 246.