Section 550. High risk retailers

A. The state agency shall classify each authorized retailer as either high risk, probationary, or nonhigh risk. In accordance with federal regulations (7 CFR 246.12), high risk retailers have demonstrated from prior authorization history a pattern of noncompliance with documented retailer management policies or violations documented from covert, undercover buys. The state agency may also change a retailer's designation to high risk based upon noncompliance documented from onsite monitoring visits or inventory audits. All of these overt and covert visits shall be conducted during hours the retailer is open to the general public, including weekdays, weekends, and holidays.

The state agency may select retailers for compliance monitoring based on statistical trends documented from retailers' redemption patterns. A retailer's designation will only be changed to high risk as result of documented violations identified by compliance investigations or other types of objective monitoring practices used by the state agency. Retailers shall also be changed to high risk if:

1. The retailer has been the subject of a compliance investigation by the state agency and has been cited for five or more chargeable violations within 12 consecutive months;

2. The retailer has received a Supplemental Nutrition Assistance Program civil monetary penalty or WIC program civil monetary penalty and is being retained in lieu of disqualification;

3. The retailer's authorization status is under consideration for possible disqualification during the administrative review or appeal process; or

4. The retailer has been the subject of an inventory audit and the documented results identify a significant discrepancy between the retailer's inventory, purchasing records, and WIC redemption sales.

All retailers classified as high risk shall receive written notification from the state WIC Program to advise them of the retailer's status change prior to the change becoming effective. Retailers shall be designated high risk for a minimum one-year period and will have their status periodically evaluated by the state agency.

B. If a retailer is retained in lieu of disqualification or its status is changed to high risk, a written assurance letter must be submitted to the state agency within 30 calendar days after being notified of this requirement. The retailer's assurance letter must detail the actions the retailer will take to improve its performance.

C. Authorized retailers designated as high risk shall be selected for more frequent onsite and covert monitoring investigations.

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.