This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

52581 

Vol. 76, No. 163 

Tuesday, August 23, 2011 

DEPARTMENT OF AGRICULTURE 

Food and Nutrition Service 

7 CFR Part 277 

RIN 0584–AD99 

Automated Data Processing and 

Information Retrieval System 

Requirements 

AGENCY: Food and Nutrition Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This rule proposes to amend 

Supplemental Nutrition Assistance 

Program (SNAP)—formerly the Food 

Stamp Program) regulations to 

implement the Food, Conservation, and 

Energy Act of 2008 (the Farm Bill), 

which requires adequate system testing 

before and after implementation of a 

new State automatic data processing 

(ADP) and information retrieval system, 

including the evaluation of data from 

pilot projects in limited areas for major 

systems changes, before the Secretary 

approves the system to be implemented 

more broadly. It also provides that 

systems be operated in accordance with 

an adequate plan for continuous 

updating to reflect changed policy and 

circumstances, and for testing the effects 

of the system on access by eligible 

households and on payment accuracy. 

This proposed rule would also specify 

the requirements for submission of a test 

plan. Further, the rule proposes 

changing the due date of an Advance 

Planning Document Update (APDU) 

from 90 days after to 60 days prior to the 

expiration of the Federal financial 

participation (FFP) approval and revises 

language regarding the Federal share of 

costs in consolidated information 

technology (IT) operations to specify 

that the threshold for service agreements 

applies to federally aided public 

assistance programs, rather than to 

SNAP alone. In addition, this rule 

proposes to amend the SNAP 

regulations relating to the establishment 

of an automated data processing and 

information retrieval system and to 

provide clarifications and updates 

which have occurred since this section 

was last updated in 1996. 

DATES: Comments must be received on 

or before October 24, 2011. 

ADDRESSES: The Food and Nutrition 

Service, USDA, invites interested 

persons to submit comments on this 

proposed rule. Comments may be 

submitted by one of the following 

methods: 

• Preferred method: Federal 

eRulemaking Portal: Go to http:// 

www.regulations.gov; follow the online 

instructions for submitting comments 

on docket FNS–2009–0020. 

• Mail: Comments should be 

addressed to Neva Terry, Director, State 

Systems Office, Food and Nutrition 

Service—USDA, 3101 Park Center 

Drive, Room 820, Alexandria, VA 

22302–1500. 

• Hand Delivery or Courier: Deliver 

comments to the Food and Nutrition 

Service, State Systems Office, 3101 Park 

Center Drive, Room 820, Alexandria, 

Virginia 22302–1500, during business 

hours of 9 a.m.–4:30 p.m. Eastern Time, 

from Monday–Friday, excluding Federal 

holidays. 

All 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 

comments publicly available on the 

Internet via http://www.regulations.gov. 

All written submissions will be 

available for public inspection at the 

address above during regular business 

hours. 

FOR FURTHER INFORMATION CONTACT: 

Questions regarding this rulemaking 

should be addressed to Neva Terry, 

Director, State Systems Office, at the 

above address if mailed, by telephone at 

(703) 605–4315 or via the Internet at 

neva.terry@fns.usda.gov. 

SUPPLEMENTARY INFORMATION: 

I. Additional Information on Comment 

Filing 

Written Comments 

Comments on the proposed rule 

should be specific, confined to issues 

pertinent to the proposal, and explain 

the reason for any change you 

recommend. Where possible, you 

should reference the specific section or 

paragraph of the proposed rule you are 

addressing. We may not consider or 

include in the Administrative Record 

those comments received after the close 

of the comment period or comments 

delivered to an address other than that 

listed above. 

II. Procedural Matters 

Executive Order 12866 and Executive 

Order 13563 

Executive Orders 12866 and 13563 

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). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

This proposed rule has been 

designated non-significant under 

section 3(f) of Executive Order 12866. 

Regulatory Flexibility Act 

This rule has been reviewed with 

regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). It has been certified that this 

rule would not have significant 

economic impact on a substantial 

number of small entities. State agencies 

which administer SNAP will be affected 

to the extent that they implement new 

State automated systems or major 

changes to existing systems. 

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 to State, local, or 

tribal governments, in the aggregate, or 

to 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 


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Department to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

more cost-effective or least burdensome 

alternative that achieves the objectives 

of the rule. 

This rule contains no Federal 

mandates (under the regulatory 

provisions of Title II of the UMRA) that 

impose costs on State, local, or tribal 

governments or to the private sector of 

$100 million or more in any one year. 

This rule is, therefore, 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 No. 

10.561. For the reasons set forth in the 

final rule in 7 CFR part 3015, Subpart 

V and related Notice published at [48 

FR 29114 for SNP; 48 FR 29115 for 

FSP], June 24, 1983, this Program is 

excluded from the scope of Executive 

Order 12372, which requires 

intergovernmental consultation with 

State and local officials. 

Executive Order 13132 

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 13132 

(Prior Consultation With State Officials, 

Nature of Concerns and the Need To 

Issue This Rule, and Extent to Which 

We Meet Those Concerns). FNS has 

considered the impact of this rule on 

State and local governments and 

determined that this rule does not have 

Federalism implications. This proposed 

rule does not impose substantial or 

direct compliance costs on State and 

local governments. Therefore, under 

Section 6(b) of the Executive Order, a 

federalism summary impact statement is 

not required. 

Executive Order 12988 

This 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 implementation. Prior to 

any judicial challenge to the provisions 

of this rule or the application of its 

provisions, all applicable administrative 

procedures must be exhausted. 

Executive Order 13175 

E.O. 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. 

In late 2010 and early 2011, USDA 

engaged in a series of consultative 

sessions to obtain input by Tribal 

officials or their designees concerning 

the affect of this and other rules on 

tribes or Indian Tribal governments, or 

whether this rule may preempt Tribal 

law. In regard to this rule, no adverse 

comments were offered at those 

sessions. Further, the policies contained 

in this rule would not have Tribal 

implications that preempt Tribal law. 

Reports from the consultative sessions 

will be made part of the USDA annual 

reporting on Tribal Consultation and 

Collaboration. USDA will offer future 

opportunities, such as webinars and 

teleconferences, for collaborative 

conversations with Tribal leaders and 

their representatives concerning ways to 

improve rules with regard to their affect 

on Indian country. 

We are unaware of any current Tribal 

laws that could be in conflict with the 

proposed rule. We request that 

commenters address any concerns in 

this regard in their responses. 

Civil Rights Impact Analysis 

FNS has reviewed this proposed rule 

in accordance with the Department 

Regulation 4300–4, ‘‘Civil Rights Impact 

Analysis,’’ to identify and address any 

major civil rights impacts the rule might 

have on minorities, women, and persons 

with disabilities. After a careful review 

of the rule’s intent and provisions, and 

the characteristics of SNAP households 

and individual participants, FNS has 

determined that there are no civil rights 

impacts in this proposed rule. All data 

available to FNS indicate that protected 

individuals have the same opportunity 

to participate in SNAP as non-protected 

individuals. 

FNS specifically prohibits the State 

and local government agencies that 

administer the Program from engaging 

in actions that discriminate based on 

age, race, color, sex, handicap, religious 

creed, national origin, or political 

beliefs. SNAP nondiscrimination policy 

can be found at 7 CFR 272.6 (a). Where 

State agencies have options, and they 

choose to implement a certain 

provision, they must implement it in 

such a way that it complies with the 

regulations at 7 CFR 272.6. 

Discrimination in any aspect of program 

administration is prohibited by these 

regulations, the Food Stamp Act of 1977 

(the Act), the Age Discrimination Act of 

1975 (Pub. L. 94–135), the 

Rehabilitation Act of 1973 (Pub. L. 93– 

112, section 504), and title VI of the 

Civil Rights Act of 1964 (42 U.S.C. 

2000d). Enforcement action may be 

brought under any applicable Federal 

law. Title VI complaints shall be 

processed in accord with 7 CFR part 15. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. Chapter 35; see 5 CFR part 

1320) requires that 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. This 

proposed rule contains information 

collections that are subject to review 

and approval by OMB; therefore, FNS 

has submitted an information collection 

under 0584–0083, which contains the 

changes in burden from adoption of the 

proposals in the rule, for OMB’s review 

and approval. 

Comments on the information 

collection in this proposed rule must be 

received by October 24, 2011. 

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 Neva Terry, 

Director, State Systems Office, Food and 

Nutrition Service, U.S. Department of 

Agriculture, 3101 Park Center Drive, 

Room 820, Alexandria, VA 22302–1500. 

For further information, or for copies of 

the information collection requirements, 

please contact Neva Terry 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 


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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. 

This is a revision of a currently 

approved collection. The new 

provisions in this rule, which do not 

increase burden hours, affect the 

information collection requirements that 

will be merged into OMB Control 

Number 0584–0083, once approved by 

OMB. The current burden inventory for 

this collection is 0584–0083. These 

changes are contingent upon OMB 

approval under the Paperwork 

Reduction Act of 1995. When the 

information collection requirements 

have been approved, FNS will publish 

a separate action in the Federal Register 

announcing OMB’s approval. 

Title: Supporting Statement for 

Paperwork Reduction Act Submission. 

OMB Number: 0584–0083. 

Expiration Date: 12/31/2013. 

Type of Request: Revision of a 

currently approved collection; 

Abstract: This proposed rule will 

have no impact on the State agency 

workload with regard to the additional 

testing requirements, as rigorous testing 

is already part of any well-managed 

systems project. Most State agencies 

will recognize the similarities between 

the documents already prepared during 

customary System Development Life 

Cycle (SDLC) processes, and those 

required by the SNAP APD approval 

processes. Although FNS is proposing to 

require information from State agencies 

on their plans for adequate system 

testing, FNS believes this information is 

already part of the regular SDLC 

process; it should already be in the State 

agencies’ possession and only needs to 

be submitted to FNS for review and 

approval. 

Further, information collections 

associated with maintenance and 

operation (M&O) procurements 

prescribed under 7 CFR 277.18 would 

be reduced as systems move past their 

implementation phase. Currently, State 

agencies are required to submit to FNS 

Implementation APDs (IAPD) for M&O 

of their ADP systems. As proposed, 

State agencies would no longer be 

required to submit this IAPD 

information unless they contain 

significant changes such as system 

development through modifications 

and/or enhancements. State agencies 

will continue to be asked to provide 

copies to FNS of the requests for 

proposals and contracts relating to 

system M&O. 

Currently it is estimated that up to 53 

State agencies may submit on an average 

of five (5) APD, Plan, or Update 

submission for a total of 265 annual 

responses at an average estimate of 2.5 

hours per respondent. The reporting 

burden is 662.5 hours. In addition, FNS 

estimated that up to 53 State agencies 

may submit on an average of 5 APD, 

Plan, or Update submission and 

approximately 265 records at an average 

estimate of .11 minutes per 

recordkeeper for an estimated total of 

29.15 recordkeeping burden for this 

activity hours per recordkeeper. Since 

this proposed rule will lessen the 

burden for submittal of M&O IAPDs it 

is now estimated that the burden will 

lessen to four (4) APD, Plan or Update 

submittals. 

The average burden per response, the 

annual burden hours and the 

annualized cost to respondents are 

summarized in the charts which follow. 

REPORTING ESTIMATES OF HOUR BURDEN

Affected public Activity Number of 

respondents 

Frequency of 

response 

Total annual 

responses 

Time per 

response 

Annual reporting burden 

State Agencies ...................... Other APD Plan or Update.53 4 212 2.5 530 

RECORDKEEPING BURDEN

Activity Number of 

recordkeepers 

Number of 

records per 

respondent 

Est. total 

annual records 

Hours per 

recordkeeper 

Total 

burden 

Other APD Plan or Update .................................................. 53 4 212 0.11 23.32 

ANNUALIZED COST TO RESPONDENTS

Type of survey instruments 

Reporting and 

recordkeeping 

burden 

Hourly wage 

rate 

Respondent 

cost—prior to 

Federal cost 

sharing 

Other APD Plan or Update ............................ 553.32 $33.29 $18,420 

Total ......................................................... ......................................................................... 7,463.26 33.29 246,310 

E-Government Act Compliance 

The Food and Nutrition Service is 

committed to complying with the EGovernment 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. 

III. Background 

Section 4121 of the Food, 

Conservation and Energy Act of 2008 

amends subsection 16(g) of the Food 

and Nutrition Act of 2008 (7 U.S.C. 

2016) to require adequate system testing 

before and after implementation of a 

new State ADP and information 

retrieval system, including the 

evaluation of data from pilot projects in 

limited areas for major systems changes, 

before the Secretary approves the 

system to be implemented more 

broadly. It also provides that systems be 

operated in accordance with an 

adequate plan for continuous updating 

to reflect changed policy and 

circumstances, and for testing the effects 


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52584 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 

of the system on access by eligible 

households and on payment accuracy. 

Systems development or acquisition, 

whether in the public or private sector, 

goes through a detailed process of 

planning, analysis, preparation, 

budgeting, and negotiation. In order to 

receive Federal funding to develop, 

acquire, and/or implement information 

systems (IS) that support the operation 

of FNS programs there are policies and 

procedures that State agencies must 

follow. This is referred to as the 

Advance Planning Document (APD) 

process which employs common 

industry standards that are required for 

any well-planned and executed Systems 

Development Life Cycle (SDLC) project. 

The preparation, submission, review, 

approval, and use of the APD process 

and its related documents for project 

planning, management, and control 

purposes comprise the successive steps 

through which a State agency can meet 

Federal oversight requirements and 

subsequently receive Federal written 

prior approval and financial 

participation in IT projects. 

In developing this proposed rule, FNS 

has drawn on its experience with State 

IS and with systems for Electronic 

Benefits Transfer in the SNAP. FNS 

views this rule as having minimal 

impact on State agency workload with 

regard to the additional testing 

requirements, as rigorous testing is 

already part of any well-managed IS 

project. Most State agencies will 

recognize the similarities between the 

documents already prepared during 

customary SDLC processes, and those 

proposed to be required by the SNAP 

APD approval processes. This regulation 

proposes to codify the testing standards 

already found in well managed State 

projects in order to assure that all State 

agencies meet those standards. 

Many State agencies already include 

testing and pilot projects as well as 

some form of graduated roll out when 

implementing major systems. System 

testing is part of the overall project 

management and risk management 

planning process; testing is essential for 

successful system implementation 

outcomes. In the past few years, some 

State agencies have attempted 

aggressive implementation schedules of 

major system and program changes, 

which have had adverse effects on 

household access to SNAP benefits and 

payment accuracy. Section 4121 of the 

Farm Bill reflects Congress’ concern that 

USDA use the Federal approval process 

to more deliberately review and monitor 

State agencies’ plans for major system 

implementations, and encourage all 

State agencies to implement new 

systems using sound testing practices. 

Since the access of needy people to 

nutrition assistance is dependent upon 

the proper functioning of SNAP 

automated systems, FNS is now 

required to ensure that all eligibility 

systems are adequately reviewed and 

tested. 

The law requires accountability for 

ensuring test results are satisfactory 

prior to system implementation as a 

condition for continued funding of the 

project. If a State makes a decision to 

proceed to the next phase of the project 

(a ‘‘go/no-go’’ decision point, such as 

testing or pilot) when significant errors 

have been identified but are not 

resolved satisfactorily to support the 

decision to proceed, FNS can suspend 

or disallow Federal funds in whole or in 

part until the problems are resolved. 

Section 277.18 of the FNS regulations 

addresses the Establishment of an 

Automated Data Processing and 

Information Retrieval System. Section 

277.18(n) (Basis for continued Federal 

financial participation) is proposed to 

be amended as a result of Section 4121 

of the Farm Bill regarding IS testing. In 

addition, this regulation proposes to add 

or modify the following requirements: 

• Change the Annual APDU due date 

from 90 days after anniversary of 

approval to 60 days prior to the 

expiration of the FFP approval; 

• Revise language regarding Federal 

share of costs in consolidated IT 

operations, consistent with the 

Department of Health and Human 

Services (DHHS), to specify the 

threshold for service agreements applies 

to federally aided public assistance 

programs, rather than to SNAP alone; 

and 

• Propose clarification and 

simplification of existing regulations 

relating to the APD process. 

1. What changes is FNS proposing for 

277.18(n), basis for continued Federal 

financial participation, as a result of the 

Food, Conservation and Energy Act of 

2008? 

FNS is proposing to move section 

277.18(n) (Basis for continued Federal 

financial participation) and renumber it 

as 277.18(g). In addition, proposed 

language is being added to describe 

FNS’ expectations for a detailed testing 

plan starting at User Acceptance Testing 

(UAT) through pilot testing and 

including opportunities for State agency 

and/or Federal reviews prior to UAT as 

well as after the system is fully 

implemented. 

State agencies would submit a test 

plan which describes how all system 

testing will be conducted in order to 

verify that the system complies with 

SNAP requirements and system design 

specifications. The level of detail 

specified in proposed section 

277.18(g)(2) would be provided to FNS 

prior to the State agency beginning its 

testing of the system. The test plan 

would include a contingency plan 

component which identifies alternative 

strategies that may be used if specific 

risk events occur, such as a failure of 

test results to support a decision to 

proceed to the next phase of the project. 

Examples include alternative schedule 

activities, staffing plans and emergency 

responses to reduce the impact of risk 

events. 

2. What would need to be addressed in 

the contingency plan for testing? 

Under the pressures of an overly 

optimistic schedule, a State agency may 

feel compelled to move forward with a 

project even when testing results 

indicate that the system is not ready for 

the next step. The purpose of a testing 

contingency plan is to assure FNS that 

the State agency has an agreed upon 

alternative in place if testing indicates 

that the system is not ready to progress 

to the next stage. The plan should 

address what steps will be taken in 

response to an excessive failure rate or 

‘‘no-go’’ decision at any point in the 

testing process. Such steps might 

include: Delaying or revising staffing 

plans; rescheduling training; adjusting 

pilot plans; and/or extending, 

rescheduling or redeploying testing 

resources such as space, contractor and 

state staff, servers and other equipment. 

Plans might include researching, in 

advance, the authority to exercise 

personnel policies, utilize overtime pay 

or compensatory time, or to withdraw or 

reschedule approved discretionary 

leave. It should also include plans for 

revising other dependent schedules 

such as those for legacy system 

maintenance or the implementation of 

required annual mass changes. The plan 

should address who has the authority to 

activate contingency procedures and 

how decisions will be made. 

Contingency plans should address both 

project and business dependencies. 

Although FNS would not dictate exactly 

what must be included, the plan would 

be expected to demonstrate the State 

agency’s awareness that testing is, by 

definition, the period when problems 

are identified which may result in 

delays. The plan must demonstrate that 

the State agency is prepared to adjust 

and ‘‘fall back’’ to a sustainable position 

to continue testing when necessary, and 

not allow a project to proceed with 

unacceptable risks in order to stay on 

schedule. 


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3. How will FNS assess the adequacy of 

a State agency’s system test plan? 

As proposed, FNS would review a 

State agency’s overall plan to ensure 

that risk is mitigated and managed to 

the extent feasible. FNS’ examination of 

State agencies’ plans would include, but 

not be limited to, the following areas: 

Risk management, rigorous 

methodologies, industry standards, 

professional test management, 

repeatable test processes, specific pass/ 

fail metrics, adequate time allotted for 

testing, and an unbiased decisionmaking process. 

FNS intends to use a pro-active 

analysis of State test plans. Results from 

the UAT and Pilot Test and others, if 

appropriate, would be evaluated from a 

system perspective as well as a program 

perspective to determine whether their 

outcomes can be considered successful. 

Although successful UAT and Pilot 

Test are commonly used decision 

points, ‘‘go/no-go’’ points may be 

established at any milestone in the 

SDLC to assess the project status and 

determine if continuing to the next 

phase is in the best interest of the 

project. The project should not advance 

to the next phase until all critical 

criteria are satisfactorily addressed. FFP 

could be in jeopardy if the State agency 

advances to the next phase without FNS 

approval. 

4. What data will a State agency need 

to provide to FNS to demonstrate its 

system testing is adequate? 

The State agency will need to provide 

a preliminary test plan in its initial 

IAPD, a final test plan prior to the start 

of the testing phase, and test results 

throughout the testing phase. FNS 

proposes to evaluate the initial 

information provided by a State agency 

to determine if the State agency’s plans, 

methodology, results tracking and 

analysis approach are adequate, and 

whether additional information is 

needed. FNS intends to work with the 

State agency to determine what 

information is practicable and require 

only information that is necessary and 

not otherwise available. FNS would 

expect to negotiate the reporting 

requirements necessary to evaluate 

system performance with each State 

agency. 

5. What would be considered adequate 

system testing? 

Even before State testing begins, 

‘‘adequate testing’’ should include 

holding the system developer 

responsible for delivering a product that 

has been thoroughly tested by the 

developer and is ready for UAT. 

Adequate testing includes ensuring that 

high standards for test results are set 

and met before the system is considered 

to have passed the tests and be ready for 

the next phase. However, once 

delivered, the State agency must 

validate that the system meets the 

performance expectations and all 

functional requirements described in 

the functional design specifications 

document. Testing methodology must 

be rigorous and results must be 

documented thoroughly. If errors are 

identified in the system’s functionality 

or performance, the fixes the developer 

makes to the system to resolve these 

errors should be regression tested. 

Regression testing is the process that 

requires the users to validate that the 

error has been fixed and that the fix 

does not adversely impact the system in 

other ways. Only when these conditions 

are met can testing be considered 

adequate to demonstrate that the system 

is ready for pilot. 

Documentation of the results of 

performance and UAT of the system 

before the system is piloted in a 

production environment needs to be 

provided to FNS and FNS concurrence 

to advance from testing to pilot will be 

a condition for continued FFP. Also, the 

State agency needs to provide 

documentation to FNS of the pilot 

evaluation. FNS’ approval to implement 

the system more broadly will also be a 

condition for continued FFP. 

6. What is meant by UAT? 

User Acceptance Testing (UAT) is a 

crucial part of the integration and 

testing phase of the SDLC. UAT is 

necessary to confirm that the developed 

system meets all State agency functional 

and technical requirements. Testers 

should work with users early in the 

project to define system criteria for 

meeting user needs, incorporate them 

into the acceptance test plan, and create 

detailed test scripts. UAT should be 

conducted in a user environment in 

which simulated or real target platforms 

and infrastructures are used. This 

environment should be separate from 

the development and production 

environments, but as similar to the 

production environment as possible. 

Typically, a separate test environment is 

set up for testing by developers and an 

additional test environment is set up for 

UAT. 

UAT is a final test of the complete 

SDLC that is conducted prior to pilot 

and implementation and the point at 

which the State agency ‘‘accepts’’ the 

system. It involves testing the system 

capabilities as documented in the 

system design, and is a precursor to 

accepting delivery of the system. 

Functional demonstrations and 

acceptance testing should be completed 

prior to implementation of the pilot. 

FNS staff may participate to a limited 

extent in the functional demonstrations 

and acceptance testing. 

7. What are the components of a 

successful UAT? 

A State agency should develop a 

formal test plan for UAT that includes 

real-life scenarios and establishes error 

severity levels, error tracking software, 

results reporting, and regression testing. 

The system should be tested from endto-end, including both normal and 

abnormal conditions such as user 

mistakes. Once the UAT plan is 

executed, an acceptance decision is 

made based on the results of this testing, 

followed by users’ sign-off upon 

successful completion of the UAT plan. 

8. What is the purpose of the Pilot Test? 

The purpose of the Pilot Test (Pilot) 

is to provide the State agency with a 

smaller scale shakedown test prior to 

expansion. Most State agencies 

recognize the need for Pilot project 

operations and first implement systems 

on a small scale. The length of the Pilot 

would need to be agreed upon by the 

State agency and FNS. Some of the 

factors that would need to be taken into 

consideration will be the size of the 

Pilot; the rate of phase-in of the Pilot 

caseload; and the track record, if any, of 

the system being implemented. A Pilot 

is important for more than just 

providing a dry run for the computer 

system. It is also an opportunity for 

State agencies to determine and ensure 

that that all parties (e.g. recipients and 

State/local staffs) are comfortable with 

the system, the State agency’s approach 

to training is effective, and any program 

and system interfaces are effective. This 

rule does not remove the latitude 

provided to State agencies in choosing 

the Pilot sites. State agencies should, 

however, take into consideration how 

well the Pilot’s caseload represents the 

demands on the fully operational 

system. 

The Pilot is a key milestone in project 

development and occurs when a fully 

functional prototype system is available 

for testing, but before statewide 

implementation. The Pilot needs to 

include operating all components of the 

system in a live environment. The State 

agency should define its own ‘‘go/nogo’’ criteria and FNS may also establish 

additional ‘‘go/no-go’’ criteria and 

decision points for continuing with 

system implementation of the project. In 

some cases, FNS may make approval of 

Federal funds for implementation 

conditional on the result of the Pilot. 


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52586 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 

FNS may also participate in the Pilot to 

assist and corroborate the findings of the 

State agency. 

Under this proposal, State agencies 

would likely be reporting activity to 

FNS for the duration of the Pilot, which 

would provide FNS with an opportunity 

to monitor Pilot activities, anticipate the 

success of the Pilot, and determine if 

rollout may occur. The State agency 

must allow sufficient time after the Pilot 

period to evaluate Pilot results and 

secure FNS concurrence for rollout. 

Pilot tests may also be necessary in 

limited areas for major system changes. 

FNS proposes to interpret the limited 

area as not synonymous with a 

geographic area, but rather focus on a 

limited scale or scope of the Pilot. 

9. How does a State agency move 

forward and expand beyond the pilot 

phase? 

Upon successful completion of the 

Pilot project, the State agency would 

have to receive written approval from 

FNS before expanding beyond the Pilot. 

This rule proposes at paragraph 

277.18(g)(2)(ii) that State agencies 

operate Pilot projects until a state of 

routine operation is reached with the 

full caseload in the Pilot area (usually 

a minimum duration of three months). 

This waiting period would permit the 

system to work through all functions 

and potential system problems. 

10. Does FNS propose to certify system 

testing and outcomes? 

No. To ‘‘certify’’ a system generally 

means that the certifying entity verifies 

through independent evaluation that a 

fixed set of standardized tests have been 

passed or criteria on a standard 

checklist have been met. The certifying 

agency issues some sort of statement or 

document attesting to the certification, 

which may have legal implications. FNS 

does not certify systems or system 

testing. FNS may, however, conduct pre 

and/or post implementation reviews. 

These reviews would be intended to: 

Evaluate system performance and 

accuracy; verify that functional 

requirements were met; ensure that the 

policy to be administered is accurate; 

analyze data capture, integrity edits and 

calculations; verify that UAT was 

thorough and successfully completed; 

and, ensure that the system interfaces 

successfully with other programs and 

external entities, including EBT. FNS 

may conduct reviews either onsite or by 

examining relevant documents provided 

by the State agency. Post 

implementation reviews may be 

conducted once the system is fully 

operational Statewide. These system 

reviews encompass technical and 

security components as well as program 

and financial aspects. Reviews by FNS 

are a function of its regulatory oversight 

authority. Resolution of any issues 

identified or completion of corrective 

action required by FNS, and subsequent 

closure of a report, review or project 

does not constitute ‘‘certification.’’ 

11. Why is FNS proposing changes to 

the annual Advanced Planning 

Document Update (APDU) due date? 

FNS proposes in paragraph 

277.18(c)(3)(i)(C) to align the due date 

for the annual APDU from the current 

requirement of within 90 days after the 

anniversary date of the original APD 

approval to the current Department of 

Health and Human Services (DHHS) 

requirement of 60 days prior to the 

expiration of the FFP approval. 

Although this proposal shortens the 

timeframe provided to State agencies for 

submission of annual updates, since 

most APDs are submitted to both USDA 

and DHHS, FNS believes creating 

consistency on this due date would 

simplify the process for State agencies 

and increase the likelihood that the 

document will be submitted timely to 

both Departments. 

12. Why is FNS proposing a change to 

the provision regarding service 

agreements? 

Service agreements are used when IT 

services are to be provided by a 

centralized State facility or another 

State or local agency. The current 

regulatory language at paragraph 

277.18(f)(6) references the need to 

obtain FNS approval when these 

equipment and services will primarily 

support the SNAP by billing it for more 

than 50 percent of the total charges 

made to all users. FNS is proposing to 

modify this language at paragraph 

277.18(e)(6) to clarify that the 50 

percent threshold for service agreements 

applies to the sum total of all Federal 

public assistance programs and not just 

the SNAP portion. This modification 

would make the FNS language more 

consistent with that of DHHS, which 

does not identify any specific programs 

in its regulatory language relating to 

service agreements. 

13. Why is FNS proposing additional 

changes to the Automated Data 

Processing and Information Retrieval 

System requirements section of the 

regulations beyond those mandated by 

the Farm Bill? 

The last changes made to § 277.18 

were in 1996. Since then FNS has 

identified provisions in this section of 

the regulations that need clarification 

and enhancement to improve the 

public’s understanding of the process. 

Some subsections would be moved and 

renumbered to improve the flow and 

clarity of the entire section and improve 

its usefulness as a reference for 

regulatory authority. 

FNS’ intent is to stress the importance 

of project management and risk 

management in the system planning 

process. These are not new concepts, 

but this renewed emphasis is to assist 

State agencies’ focus on these areas in 

order to increase the likelihood of 

positive outcomes. 

14. How is FNS changing the current 

order in § 277.18 and moving provisions 

within the section? 

Paragraph 277.18(a) (Scope and 

application) provides an introductory 

statement for the rest of the section. It 

currently contains a sentence regarding 

cost allocation which has been moved to 

paragraph 277.18(j) (General cost 

requirements). 

Paragraph 277.18(d) (APD content 

requirements) contains a discussion on 

the cost allocation plan for the Planning 

APD (PAPD). This is clarified and 

moved to new paragraph 

277.18(d)(1)(vii). 

Paragraph 277.18(e) (APD update) is 

moved and renumbered as 277.18 (d)(3). 

Paragraph 277.18(f) (Service 

agreements) language which requires a 

State agency to maintain a copy of its 

service agreements in its files for 

Federal review is moved from the 

introductory paragraph to a new 

paragraph 277.18(e)(9) and the entire 

paragraph is moved and renumbered as 

277.18(e). 

Paragraph 277.18(g) (Conditions for 

receiving FFP), is moved and 

renumbered as 277.18(f). 

Paragraph 277.18(h) (Emergency 

acquisition requirements), is moved and 

renumbered as 277.18(i). 

Paragraph 277.18(i) (Cost 

determination and claiming costs) is 

renamed as General cost requirements, 

moved, and renumbered as 277.18(j). 

Paragraph 277.18(j) (Procurement 

requirements) is moved and renumbered 

as 277.18(c)(2)(iii). 

Paragraph 277.18(n) (Basis for 

continued Federal financial 

participation) is moved and renumbered 

as 277.18(g) 

Paragraph 277.18(o) (Disallowance of 

Federal financial participation) is 

moved and renumbered as 277.18(h). 

Paragraph 277.18(p) (ADP system 

security requirements and review 

process) is moved and renumbered as 

277.18(m). 

No changes are being made to 

paragraph 277.18(k) (Access to the 

system and records). 


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FNS removed paragraph 277.18(m) 

(Use of ADP systems) as it was 

determined to be unnecessary. 

15. What terminology changes would be 

made in this proposed rule? 

There are two terminology changes 

made in § 277.18. All instances of the 

use of the ‘‘Food Stamp Program’’ or 

‘‘FSP’’ are changed to the 

‘‘Supplemental Nutrition Assistance 

Program’’ or ‘‘SNAP’’ the name made 

effective by the Food, Conservation, and 

Energy Act of 2008 on October 1, 2008. 

In addition, all instances of the use of 

‘‘Automated Data Processing’’ (ADP) 

would be changed to ‘‘Information 

System’’ (IS) or to ‘‘Information 

Technology’’ (IT), as appropriate given 

the context of their use. 

16. What changes is FNS making to the 

definitions § 277.18(b)? 

This paragraph currently provides 

definitions for 18 terms commonly used 

in the remainder of this section. Some 

definitions are antiquated and therefore 

would be removed, globally replaced (as 

discussed in the previous question); or 

renamed. Others would be incorporated 

in the subsection that specifically 

addresses that topic, such as Feasibility 

Study. Four definitions are added to this 

section which are not related to new 

requirements, but intended to provide a 

ready reference summary for terms used 

in this section: acquisition, project, 

Commercial Off-the- Shelf software, and 

enhancements. 

17. Why are definitions proposed to be 

added for ‘‘acquisition’’ and ‘‘project’’? 

In paragraph 277.18(b) (Definitions), 

the terms ‘‘acquisition’’ and ‘‘project’’ 

are changed to clarify the difference 

between the two. FNS added these 

definitions to assist the reader in noting 

that projects and acquisitions are 

separate events and while they may be 

related in the holistic view of the 

project, the review requirements and 

submission thresholds vary as discussed 

in paragraph 277.18(c). 

18. Why is the definition of Commercial 

Off-the-Shelf software added to the 

regulation? 

In paragraph 277.18(b) (Definitions), 

FNS added the definition of Commercial 

Off-the-Shelf (COTS) products which 

are beginning to find a place in the 

Human Services sector. A definition is 

added to specify FNS’ criteria for 

software to be considered COTS, and 

clarify where Federal ownership rules 

do and do not apply to COTS products. 

19. Why is a definition for 

‘‘Enhancement’’ added? 

State agencies often make corrective 

and adaptive changes in the course of 

normal maintenance and operations of a 

system. For extensive renovation or 

replacement of a system, a State agency 

would undertake a detailed planning 

process. Enhancements to a system 

often fall somewhere in between. By 

providing a definition of 

‘‘enhancement’’ this regulation will help 

State agencies understand the 

distinctions, and know when an 

enhancement may represent a 

substantial enough change in system 

functionality to require FNS approval. 

Guidance presented in FNS Handbook 

901, ‘‘Advance Planning Documents’’ as 

well as this rulemaking clarifies when 

enhancements may require prior 

approval via the submission of 

documentation to FNS. 

20. Why would FNS expand the 

definition of Implementation APD? 

The definition would be expanded to 

delineate the major activities of the 

System Development Life Cycle (SDLC) 

that are expected to occur during the 

Implementation Phase, which the 

Implementation APD encompasses. 

These major activities are defined as 

design, development, testing, and 

implementation. The intent is to 

provide clarification to State agencies 

that the APD process follows that of the 

SDLC and mirrors State government and 

industry standards. 

21. Why would the APDU definition be 

revised? 

In paragraph 277.18(b) (Definitions), 

FNS clarifies that the APDU is more 

than an annual report as the current 

definition states. The APDU is an 

annual or as needed report of activities 

as well as a request for continuation of 

funding, either at the current or an 

updated funding amount. The APDU 

reports the status of activities as well as 

changes to the project’s scope, schedule, 

budget, cost allocation or procurement 

strategy. As previously defined, it may 

have been implied this was simply a 

report and did not emphasize the 

importance of this update as a 

requirement for continuing funding for 

the project. FNS often approves funding 

or project approval for a specified 

period of time during the project. The 

mechanism to ensure that funding and 

project approval continues for future 

development through project 

completion is the APDU, either annual 

or as needed, whichever is appropriate 

for the conditions of a specific project. 

The phrase ‘‘self-certification’’ was 

removed as this is not the intent of the 

APDU. 

22. Why is FNS waiving the annual 

APDU if an As Needed APDU has been 

submitted? 

In paragraph 277.18(c)(3)(i)(C) FNS 

includes a provision for FNS to waive 

the annual APDU or reset the APD 

anniversary date to coincide with the As 

Needed APDU, if appropriate. 

Recognizing that many State agencies 

which submit As Needed APDUs may 

be duplicating their efforts when 

submitting annual APDUs, FNS hopes 

to alleviate this burden by waiving the 

submission of the Annual APDU until 

the following year or modifying the 

Annual APDU due date to be one year 

from the approval of the As Needed 

APDU . This is intended to lessen the 

State reporting burden. 

23. Are State agencies required to 

approve all IS acquisitions no matter 

how small? 

In paragraph 277.18(c)(4) (Approval 

by the State agency) FNS is revising the 

language to allow the State agency to 

delegate approval authority to any 

subordinate entity for those acquisitions 

of IS equipment and services not 

requiring prior approval by FNS. The 

State agency is free to set its own preapproval thresholds so long as those 

thresholds do not exceed the FNS preapproval thresholds. 

24. Why is FNS making changes to the 

APD content requirements in 

paragraphs 277.18(c), 277.18(d) and 

277.18(e)? 

Language on content requirements for 

an PAPD, Implementation APD (IAPD), 

Annual APDU and As Needed APDU is 

being revised to allow FNS to be more 

responsive to States that are 

implementing IS and to revise 

requirements in the future by policy 

rather than regulation if circumstances 

warrant. Detailed guidance on the 

specific content can be found in FNS 

Handbook 901, ‘‘Advanced Planning 

Documents.’’ 

25. Why is FNS making changes to the 

dollar thresholds for prior approval of 

IS procurements? 

FNS proposes in 277.18(c)(1) and 

277.18(c)(2) to align the dollar 

thresholds for prior approval for IS 

procurements to the current Department 

of Health and Human Services (DHHS) 

requirement of $6 million versus the 

current FNS requirement of $5 million. 

Also, FNS proposes to align the dollar 

thresholds for prior approval of contract 

amendments to the current DHHS 

requirement of 20 percent 


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(cumulatively) of base contract costs. 

FNS believes creating consistency on 

these dollar thresholds would simplify 

the process for State agencies. 

26. Why would FNS remove the 

requirement that a system be used for 

the lifespan specified in the cost benefit 

analysis of the Implementation Advance 

Planning Document? 

The requirements for the cost benefits 

analysis in paragraph 277.18(d)(2)(vii) 

included a statement indicating the 

period of time the State agency intended 

to use the proposed equipment or 

system. Paragraph 277.18(m) required 

that systems designed, developed or 

installed with FFP be used for the 

period of time specified in the cost 

benefit analysis. These were determined 

to be unnecessary and therefore have 

been removed. These were originally 

meant to assure that a system was kept 

in use long enough to reach the ‘‘break 

even’’ date determined in the cost 

benefit analysis. However, experience 

has shown that many facts and 

assumptions used in that analysis 

change significantly over the life of the 

system, likely making the break even 

date, and therefore the anticipated 

lifespan inaccurate. Furthermore, State 

agencies often keep systems in use long 

past the anticipated lifespan due to 

budget pressures, and consider system 

replacement only when driven by 

technological necessity, such as 

unsupportable platforms, outdated 

programming languages, or the 

excessive cost of maintaining antiquated 

systems. Finally, the advance planning 

period and SDLC associated with a 

large-scale, complex project require that 

State agencies begin the process of 

system replacement years before their 

legacy systems reach the true end of 

their lifespan and become 

insupportable. 

27. Is FNS changing the requirements 

for an Emergency Acquisition Request 

(EAR)? 

No, the changes in paragraph 

277.18(h) regarding EARs, as in 

paragraph 277.18(i), only clarify the 

relationship of emergency acquisition 

requirements to general acquisition 

requirements. The existing language 

might have been interpreted to mean 

that FNS may recognize the need for a 

State agency to act quickly, but does not 

actually approve anything until after the 

receipt of an approvable IAPD following 

the emergency action. The revised 

language is intended to clarify that FNS 

does provide formal conditional 

approval of EARs, assuring financial 

support for up to 90 days, until an 

approvable IAPD is submitted. If 

complete documentation is not received 

within that timeframe, costs may be 

disallowed. 

28. Why is FNS renaming the paragraph 

currently called ‘‘Cost determination 

and claiming costs’’? 

In paragraph 277.18(i)(Cost 

determination and claiming costs), FNS 

is renaming the paragraph as ‘‘General 

cost requirements’’ to increase 

consistency within the section. In the 

paragraph on Development costs, FNS is 

inserting a reference to the cost 

principles set forth in OMB Circular A– 

87 (2 CFR part 225). This Circular 

establishes principles and standards for 

determining costs for Federal awards 

carried out through grants, cost 

reimbursement contracts, and other 

agreements with State and local 

governments and federally-recognized 

Indian tribal governments 

(governmental units). The paragraph on 

Budget authority, clarifies that an As 

Needed APDU report, as well as an 

amended budget, would be required for 

FNS approval. 

29. What is the purpose of adding a 

discussion of Commercial Off-the-Shelf 

(COTS) software to the regulation? 

In paragraph 277.18(l) (Ownership 

rights), FNS clarifies that software 

packages which meet the definition of 

COTS at paragraph 277.18(b) are not 

subject to the ownership provisions of 

this paragraph. Along with longestablished licensed COTS products 

such as operating systems, database 

software and desktop/office software, 

FNS recognizes the potential of COTS 

software in the Human Services sector 

to provide a proprietary framework and/ 

or tool set which can be used to 

standardize, simplify and speed the 

process of building public domain 

modules, objects or processes within it. 

The addition of language about COTS 

products seeks to recognize exceptions 

to the overarching ownership provisions 

in the rule. However, a clarification in 

the language emphasizes that FFP 

would not be available for COTS 

products developed specifically for the 

SNAP program. 

30. What is the impact of the language 

added to Disallowance of FFP? 

Current regulatory language at 

paragraph 277.18 (o) states that FFP in 

a project can be disallowed for failure to 

comply with the criteria, requirements, 

and other undertakings described in the 

approved or modified APD. The 

language makes it more consistent with 

DHHS regulations and allows FNS 

flexibility in dealing with these 

occurrences by giving FNS the options 

of suspending or disallowing a part of 

the funding. 

31. Why is FNS removing Appendix A 

to Part 277 (Principles for Determining 

Costs Applicable to Administration of 

the SNAP by State Agencies)? 

FNS is removing Appendix A to Part 

277 (Principles for Determining Costs 

Applicable to Administration of the 

SNAP by State Agencies) because it is 

now obsolete and has been replaced by 

an updated version of OMB Circular A– 

87 Cost Principals for State, Local, and 

Indian Tribal Governments as found at 

2 CFR 225. As a result of this removal, 

FNS is also relocating two provisions 

and updating references to Appendix A 

in other sections. 

FNS is relocating one provision from 

Appendix A to another section to 

enhance the information provided in 

that section. The section to be enhanced 

includes: paragraph 277.13(b) 

(nonexpendable personal property) to 

increase the $1,000 threshold for capital 

expenditures to $5,000, as currently 

provided for in Appendix A. 

References to Appendix A included in 

eight other regulatory sections would be 

changed to refer to OMB Circular A–87 

(2 CFR 225). These sections include: 

272.1 (159) Amendment (385) which 

relates to funding; 274.12(k)(2) which 

relates to costs; 276.4(d) which relates to 

disallowance; 277.6(b)(6) which relates 

to costs; 277.9(c)(2) which relates to 

costs; 277.13(g) which relates to 

copyrights; 277.16(b)(2) which relates to 

disallowance; and 277.18(i)(1) which 

relates to costs. In addition, although 

§ 277.4 does not currently contain a 

reference to Appendix A, FNS is adding 

a reference to OMB Circular A–87 (2 

CFR 225) as this section relates to 

funding and allowable costs. 

32. Does FNS plan to provide additional 

guidance for State agencies to assist 

their implementing this rulemaking? 

Yes, FNS plans to update the FNS 

Handbook 901, ‘‘Advance Planning 

Documents,’’ and provide other training 

and technical assistance materials, once 

the final rulemaking is issued. FNS 

invites suggestions for areas in which 

guidance would be useful. At this time, 

the following items have been 

tentatively identified for further 

guidance: 

• When system enhancements may 

require prior approval; 

• PAPD requirements, including: 

proposed budget and cost allocation 

plan; 

• IAPD requirements, including: cost 

benefit analysis, project management 

plan; resource requirements statement; 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 52589 

cost allocation plan; implementation 

plan; training plan; and test plan. 

List of Subjects in 7 CFR Part 277 

Food stamps, Fraud, Government 

procedure, Grant programs—social 

programs, Records, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, 7 CFR Part 277 is proposed to 

be amended as set forth below: 

PART 277—PAYMENTS OF CERTAIN 

ADMINISTRATIVE COSTS OF STATE 

AGENCIES 

1. The authority citation for part 277 

continues to read as follows: 

Authority: 7 U.S.C. 2011–2036. 

2. In § 277.13: 

a. Revise the figure ‘‘$1,000’’ to read 

‘‘$5,000’’ wherever it occurs in the 

following paragraphs: 

i. (b)(2)(iii)(A); 

ii. (b)(3)(i); 

iii. (b)(3)(ii) introductory text; 

iv. (c) introductory text; and 

v. (e)(3) introductory text; and 

b. Revise paragraphs (b)(2)(iii)(A) and 

(b)(3) to read as follows: 

§ 277.13 Property. 

* * * * * 

(b) * * * 

(2) * * * 

(iii) When the State agency no longer 

has need for such property in any of its 

federally financed activities, the 

property may be used for the State 

agency’s own official activities in 

accordance with the following 

standards: 

(A) If the property had a total 

acquisition cost of less than $1,000, the 

State agency may use the property 

without reimbursement to FNS. 

* * * * * 

(3) Disposition. If the State agency has 

no need for the property, disposition of 

the property shall be made as follows: 

(i) If the property had a total 

acquisition cost of less than $1,000 per 

unit, the State agency may sell the 

property and retain the proceeds. 

(ii) If the property had an acquisition 

cost of $1,000 or more per unit, the State 

agency: 

(A) If instructed to ship the property 

elsewhere, the State agency shall be 

reimbursed with an amount which is 

computed by applying the percentage of 

the State agency’s participation in the 

cost of the property to the current fair 

market value of the property, plus any 

shipping or interim storage costs 

incurred. 

(B) If instructed to otherwise dispose 

of the property, the State agency shall be 

reimbursed by FNS for the cost incurred 

in such disposition. 

(C) If disposition or other instructions 

are not issued by FNS within 120 days 

of a request from the State agency the 

State agency shall sell the property and 

reimburse FNS an amount which is 

computed by applying the percentage of 

FNS participation in the cost of the 

property to the sales proceeds. The State 

agency may, however, deduct and retain 

from FNS’ share $500 or 10 percent of 

the proceeds, whichever is greater, for 

the State agency selling and handling 

expenses. 

3. Revise § 277.18 to read as follows: 

§ 277.18 State Systems Advance Planning 

Document (APD) process. 

(a) Scope and application. This 

section establishes conditions for initial 

and continuing authority to claim 

Federal financial participation (FFP) for 

the costs of the planning, development, 

acquisition, installation and 

implementation of Information 

System(IS) equipment and services used 

in the administration of the 

Supplemental Nutrition Assistance 

Program and as prescribed by 

appropriate Food and Nutrition Service 

(FNS) directives and guidance (i.e., FNS 

Handbook 901, OMB Circulars, etc.). 

(b) Definitions. 

Acquisition means obtaining supplies 

or services through a purchase or lease, 

regardless of whether the supplies or 

services are already in existence or must 

be developed, created, or evaluated. 

Advance Planning Document for 

project planning or Planning APD (APD 

or PAPD) means a brief written plan of 

action that requests FFP to accomplish 

the planning activities necessary for a 

State agency to determine the need for, 

feasibility of, projected costs and 

benefits of an IS equipment or services 

acquisition, plan the acquisition of IS 

equipment and/or services, and to 

acquire information necessary to 

prepare an Implementation APD. 

Advance Planning Document Update 

(APDU) means a document submitted 

annually (Annual APDU) by the State 

agency to report the status of project 

activities and expenditures in relation to 

the approved Planning APD or 

Implementation APD; or on an as 

needed (As Needed APDU) basis to 

request funding approval for project 

continuation when significant project 

changes occur or are anticipated. 

Commercial Off-the-Shelf (COTS) 

means proprietary software products 

that are ready-made and available for 

sale to the general public at established 

catalog or market prices in which the 

software vendor is not positioned as the 

sole implementer or integrator of the 

product. 

Enhancement means modifications 

which change the functions of software 

and hardware beyond their original 

purposes, not just to correct errors or 

deficiencies which may have been 

present in the software or hardware, or 

to improve the operational performance 

of the software or hardware. Software 

enhancements that substantially 

increase risk or cost or functionality will 

require submission of an IAPD or an As 

Needed IAPDU. 

Implementation Advance Planning 

Document or Implementation APD 

(IAPD) means a written plan of action 

requesting FFP to acquire and 

implement information system (IS) 

services and/or equipment. The 

Implementation APD includes the 

design, development, testing, and 

implementation phases of the project. 

Information System (IS) means a 

combination of hardware and software, 

data, and telecommunications that 

performs specific functions to support 

the State agency, or other Federal, State, 

or local organization. 

Project means a related set of 

information technology related tasks, 

undertaken by a State, to improve the 

efficiency, economy and effectiveness of 

administration and/or operation of its 

human services programs. A project 

may also be a less comprehensive 

activity such as office automation, 

enhancements to an existing system, or 

an upgrade of computer hardware. 

Request for Proposal or RFP means 

the document used for public 

solicitations of competitive proposals 

from qualified sources as outlined in 

§ 277.14(g)(3). 

(c) Requirements for FNS prior 

approval of IS projects.—(1) General 

prior approval requirements. The State 

agency shall request prior FNS approval 

by submitting the Planning APD, the 

Implementation APD, the draft 

acquisition instrument, and/or the 

justification for the sole source 

acquisition if applicable, as specified in 

paragraph (c)(2) of this section. A State 

agency must obtain written approval 

from FNS to receive federal financial 

participation of any of the following 

activities: 

(i) When it plans a project to enhance 

or replace its IS that it anticipates will 

have total project costs in Federal and 

State funds of $6 million or more. 

(ii) Any IS competitive acquisition 

that costs more than $6 million in 

Federal and State funds. 

(iii) When the State agency plans to 

acquire IS equipment or services noncompetitively from a nongovernmental 


srobinson on DSK4SPTVN1PROD with PROPOSALS
52590 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 

source, and the total State and Federal 

cost is more than $1 million. 

(iv) For the acquisition of IS 

equipment or services to be utilized in 

an Electronic Benefit Transfer (EBT) 

system regardless of the cost of the 

acquisition in accordance with 7 CFR 

274.12 (EBT issuance system approval 

standards). 

(2) Specific prior approval 

requirements. (i) For IS projects which 

require prior approval, as specified in 

paragraph (c)(1) of this section, the State 

agency shall obtain the prior written 

approval of FNS for: 

(A) Conducting planning activities, 

entering into contractual agreements or 

making any other commitment for 

acquiring the necessary planning 

services; 

(B) Conducting design, development, 

testing or implementation activities, 

entering into contractual agreements or 

making any other commitment for the 

acquisition of IS equipment or services. 

(ii) For IS equipment and services 

acquisitions requiring prior approval as 

specified in paragraph (c)(1) of this 

section, prior approval of the following 

documents associated with such 

acquisitions is also required: 

(A) Requests for Proposals (RFPs). 

Unless specifically exempted by FNS, 

the State agency shall obtain prior 

written approval of the RFP before the 

RFP may be released. However, RFPs for 

acquisition estimated to cost up to $6 

million or competitive procurements 

from non-governmental sources and 

which are an integral part of the 

approved APD, need not receive prior 

approval from FNS. The State agency 

shall submit a written request to get 

prior written approval to acquire IS 

equipment or services noncompetitively from a nongovernmental 

source when the total State and Federal 

cost is more than $1 million State 

agencies shall submit RFPs under this 

threshold amount on an exception basis. 

The State agency shall obtain prior 

written approval from FNS for RFPs 

which are associated with an EBT 

system regardless of the cost. 

(B) Contracts. All contracts must be 

submitted to FNS. Unless specifically 

exempted by FNS, the State agency shall 

obtain prior written approval before the 

contract may be signed by the State 

agency. However, contracts for 

competitive procurements costing up to 

$6 million and for noncompetitive 

acquisitions from nongovernmental 

sources costing up to $1 million and 

which are an integral part of the 

approved APD need not be submitted to 

FNS. State agencies shall submit 

contracts under this threshold amount 

on an exception basis. The State agency 

shall obtain prior written approval from 

FNS for contracts which are associated 

with an EBT system regardless of the 

cost. 

(C) Contract amendments. All 

contract amendments must be submitted 

to FNS. Unless specifically exempted by 

FNS, the State agency shall obtain prior 

written approval from FNS of any 

contract amendments which 

cumulatively exceed 20 percent of the 

base contract costs before being signed 

by the State agency. The State agency 

shall obtain prior written approval from 

FNS for contracts which are associated 

with an EBT system regardless of the 

cost. 

(iii) Procurement requirements.—(A) 

Procurements of IS equipment and 

services are subject to § 277.14 

(procurement standards) regardless of 

any conditions for prior approval 

contained in this section, except the 

requirements of § 277.14(b)(1) and (2) 

regarding review of proposed contracts. 

Those procurement standards include a 

requirement for maximum practical 

open and free competition regardless of 

whether the procurement is formally 

advertised or negotiated. 

(B) The standards prescribed by 

§ 277.14, as well as the requirement for 

prior approval in this paragraph (c), 

apply to IS services and equipment 

acquired primarily to support SNAP 

regardless of the acquiring entity. 

(C) The competitive procurement 

policy prescribed by § 277.14 shall be 

applicable except for IS services 

provided by the agency itself, or by 

other State or local agencies. 

(iv) The State agency must obtain 

prior written approval from FNS, as 

specified in paragraphs (c)(2)(i) and (ii) 

of this section, to claim and receive 

reimbursement for the associated costs 

of the IS acquisition. 

(3) Document submission 

requirements.—(i) For IS projects 

requiring prior approval as specified in 

paragraphs (c)(1) and (2)of this section, 

the State agency shall submit the 

following documents to FNS for 

approval: 

(A) Planning APD as described in 

paragraph (d)(1) of this section. 

(B) Implementation APD as described 

in paragraph (d)(2) of this section. 

(C) Annual APDU as described in 

paragraph (d)(3) of this section. The 

Annual APDU shall be submitted to 

FNS 60 days prior to the expiration of 

the FFP approval, unless the submission 

date is specifically altered by FNS. In 

years where an As Needed APDU is 

required, as described in paragraph 

(c)(3)(i)(D) of this section, FNS may 

waive or modify the requirement to 

submit the annual APDU. 

(D) As Needed APDU as described in 

paragraph (d)(4) of this section. As 

Needed APDU are required to obtain a 

commitment of FFP whenever 

significant project changes occur. 

Significant project changes are defined 

as changes in cost, schedule, scope or 

strategy which exceed FNS-defined 

thresholds or triggers. Without such 

approval, the State agency is at risk for 

funding of project activities which are 

not in compliance with the terms and 

conditions of the approved APD and 

subsequently approved APDU until 

such time as approval is specifically 

granted by FNS. 

(E) Acquisition documents as 

described in § 277.14(g). 

(F) Emergency Acquisition Requests 

as described in paragraph (i) of this 

section. 

(ii) The State agency must obtain prior 

FNS approval of the documents 

specified in paragraph (c)(3)(i) of this 

section in order to claim and receive 

reimbursement for the associated costs 

of the IS acquisition. 

(4) Approval by the State agency. 

Approval by the State agency is required 

for all documents and acquisitions 

specified in § 277.18 prior to submission 

for FNS approval. However, the State 

agency may delegate approval authority 

to any subordinate entity for those 

acquisitions of IS equipment and 

services not requiring prior approval by 

FNS. 

(5) Prompt action on requests for prior 

approval. FNS will reply promptly to 

State agency requests for prior approval. 

If FNS has not provided written 

approval, disapproval or a request for 

additional information within 60 days 

of FNS’ acknowledgment of receipt of 

the State agency’s request, the request 

will be deemed to have provisionally 

met the prior approval requirement in 

this paragraph (c). However, provisional 

approval will not exempt a State agency 

from having to meet all other Federal 

requirements which pertain to the 

acquisition of IS equipment and 

services. Such requirements remain 

subject to Federal audit and review. 

(d) APD content requirements—(1) 

Planning APD (PAPD). The PAPD is a 

written plan of action to acquire 

proposed services or equipment and to 

perform necessary activities to 

investigate the feasibility, system 

alternatives, requirements and resources 

needed to replace, modify or upgrade 

the State agency’s IS. The PAPD shall 

contain adequate documentation to 

demonstrate the need to undertake a 

planning process, as well as a thorough 

description of the proposed planning 

activities, and estimated costs and 


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timeline, as specified by FNS in 

Handbook 901. 

(2) Implementation APD (IAPD). The 

IAPD is a written plan of action to 

acquire the proposed IS services or 

equipment and to perform necessary 

activities to design, develop, acquire, 

install, test, and implement the new IS. 

The Implementation APD shall contain 

detailed documentation of planning and 

preparedness for the proposed project, 

as enumerated by FNS in Handbook 

901, demonstrating the feasibility of the 

project, thorough analysis of system 

requirements and design, a rigorous 

management approach, stewardship of 

Federal Funds, a realistic schedule and 

budget, and preliminary plans for key 

project phases. 

(3) Annual APDU content 

requirements. The Annual APDU is a 

yearly update to ongoing IS projects 

when planning or implementation 

activities occur. The Annual APDU 

shall contain documentation on the 

project activity status and a description 

of major tasks, milestones, budget and 

any changes, as specified by FNS in 

Handbook 901. 

(4) As Needed APDU content 

requirements. The As Needed APDU 

document shall contain the items as 

defined in paragraph (c)(3)(i)(D) of this 

section with emphasis on the area(s) 

where changes have occurred or are 

anticipated that triggered the 

submission of the APDU, as detailed by 

FNS in Handbook 901. 

(e) Service agreements. The State 

agency shall execute service agreements 

when IS services are to be provided by 

a State central IT facility or another 

State or local agency. Service Agreement 

means the document signed by the State 

or local agency and the State or local 

central IT facility whenever an IT 

facility provides IT services to the State 

or local agency. Service agreements 

shall: 

(1) Identify the IS services that will be 

provided; 

(2) Include a schedule of rates for 

each identified IS service, and a 

certification that these rates apply 

equally to all users; 

(3) Include a description of the 

method(s) of accounting for the services 

rendered under the agreement and 

computing services charges; 

(4) Include assurances that services 

provided will be timely and satisfactory; 

(5) Include assurances that 

information in the IS as well as access, 

use and disposal of IS data will be 

safeguarded in accordance with 

provisions of § 272.1(c) (disclosure) and 

§ 277.13 (property); 

(6) Require the provider to obtain 

prior approval from FNS pursuant to 

paragraph (c)(1) of this section for IS 

equipment and IS services that are 

acquired from commercial sources 

primarily to support federally aided 

public assistance programs and require 

the provider to comply with § 277.14 

(procurement standards) for 

procurements related to the service 

agreement. IS equipment and services 

are considered to be primarily acquired 

to support federally aided public 

assistance programs when the Programs 

may reasonably be expected to either be 

billed for more than 50 percent of the 

total charges made to all users of the IS 

equipment and services during the time 

period covered by the service 

agreement, or directly charged for the 

total cost of the purchase or lease of IS 

equipment or services; 

(7) Include the beginning and ending 

dates of the period of time covered by 

the service agreement; and 

(8) Include a schedule of expected 

total charges to the Program for the 

period of the service agreement. 

(9) State Agency Maintenance of 

Service Agreements. The State agency 

will maintain a copy of each service 

agreement in its files for Federal review 

upon request. 

(f) Conditions for receiving Federal 

financial participation (FFP).—(1) A 

State agency may receive FFP at the 50 

percent reimbursement rate for the costs 

of planning, design, development or 

installation of IS and information 

retrieval systems if the proposed system 

will: 

(i) Assist the State agency in meeting 

the requirements of the Food and 

Nutrition Act of 2008, as amended; 

(ii) Meet the Automation of Data 

Processing/Computerization of 

Information Systems Model Plan 

program standards specified in 

§ 272.10(b)(1) through (3) of this 

chapter, except the requirements in 

§ 272.10(b)(2)(vi), (b)(2)(vii), and 

(b)(3)(ix) of this chapter to eventually 

transmit data directly to FNS; 

(iii) Be likely to provide more efficient 

and effective administration of the 

program; and 

(iv) Be compatible with such other 

systems utilized in the administration of 

other State agency programs including 

the program of Temporary Assistance 

for Needy Families (TANF). 

(2) State agencies seeking FFP for the 

planning, design, development or 

installation of IS shall develop State 

wide systems which are integrated with 

TANF. In cases where a State agency 

can demonstrate that a local, dedicated, 

or single function (issuance or 

certification only) system will provide 

for more efficient and effective 

administration of the program, FNS may 

grant an exception to the State wide 

integrated requirement. These 

exceptions will be based on an 

assessment of the proposed system’s 

ability to meet the State agency’s need 

for automation. Systems funded as 

exceptions to this rule, however, should 

be capable to the extent necessary, of an 

automated data exchange with the State 

agency system used to administer 

TANF. In no circumstances will funding 

be available for systems which duplicate 

other State agency systems, whether 

presently operational or planned for 

future development. 

(g) Basis for continued Federal 

financial participation (FFP).—(1) FNS 

will continue FFP at the levels approved 

in the Planning APD and the 

Implementation APD provided that 

project development proceeds in 

accordance with the conditions and 

terms of the approved APD and that IS 

resources are used for the purposes 

authorized. FNS will use the APDU to 

monitor IS project development. The 

submission of the Update as prescribed 

in § 277.18(d) for the duration of project 

development is a condition for 

continued FFP. In addition, periodic 

onsite reviews of IS project 

development and State and local agency 

IS operations may be conducted by or 

for FNS to assure compliance with 

approved APDs, proper use of IS 

resources, and the adequacy of State or 

local agency IS operations. 

(2) Pre-implementation. The State 

agency must demonstrate through 

thorough testing that the system meets 

all program functional and performance 

requirements. FNS may require a preimplementation review of the system to 

validate system functionality prior to 

State agency testing. 

(i) Testing. The State agency must 

provide a complete test plan prior to the 

start of the testing phase. The State 

agency must provide documentation to 

FNS of the results of performance and 

User Acceptance Testing (UAT) before 

the system is piloted in a production 

environment. FNS concurrence to 

advance from testing to pilot is a 

condition for continued FFP. All aspects 

of program eligibility must be tested to 

ensure that the system makes accurate 

eligibility determinations in accordance 

with federal regulations and approved 

state policies, and that system 

functionality meets the required 

functional specifications. The State 

agency shall describe how all system 

testing will be conducted and the 

resources to be utilized in order to 

verify the system complies with SNAP 

requirements, system design 

specifications, and performance 

standards including responsiveness, 


srobinson on DSK4SPTVN1PROD with PROPOSALS
52592 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 

usability, capacity, and security. Testing 

includes but is not limited to unit 

testing, integration testing, performance 

testing, end-to-end testing, UAT, and 

regression testing. During UAT detailed 

scripts covering all areas of program 

functionality shall be used so that any 

errors identified can be replicated, 

corrected, and re-tested. 

At a minimum, the Test Plan shall 

address: 

(A) The types of testing to be 

performed; 

(B) The organization of the test team 

and associated responsibilities; 

(C) Test database generation; 

(D) Test case development; 

(E) Test schedule; 

(F) Documentation of test results; 

(G) Acceptance testing shall include 

functional requirements testing, error 

condition handling and destructive 

testing, security testing, recovery 

testing, controls testing, stress and 

throughput performance testing, and 

regression testing; 

(H) The decision criteria, including 

specific test results which must be met 

before the State may exit the testing 

phase, the roles or titles of the 

individuals responsible for verifying 

that these criteria have been met, and 

the sign-off process which will 

document that the criteria have been 

met. 

(I) FNS may require any or all of these 

tests to be repeated in instances where 

significant modifications are made to 

the system after these tests are initially 

completed or if problems that surfaced 

during initial testing warrant a retest. 

FNS reserves the right to participate and 

conduct independent testing, as 

necessary, during UAT and at 

appropriate times during system design, 

development, implementation, and 

operations. 

(ii) Pilot. Prior to statewide rollout of 

the system there must be a test of the 

fully operational system in a live 

production environment. Pilots must 

operate until a state of routine operation 

is reached with the full caseload in the 

pilot area. The design of this pilot shall 

provide an opportunity to test all 

components of the system as well as the 

data conversion process and system 

performance. The duration of the pilot 

must be for a sufficient period of time 

to thoroughly evaluate the system 

(usually a minimum duration of three 

months). The State agency must provide 

documentation to FNS of the pilot 

evaluation. FNS approval to implement 

the system more broadly is a condition 

for continued FFP. 

(iii) Post-implementation Review. 

After the system is fully implemented 

FNS may conduct a review to validate 

that program policy is correctly applied, 

whether project goals and objectives 

were met, that IS equipment and 

services are being properly used and 

accurate inventory records exist, and the 

actual costs of the project. 

(h) Disallowance of Federal financial 

participation (FFP). If FNS finds that 

any acquisition approved under the 

provisions of § 277.18(c) fails to comply 

with the criteria, requirements, and 

other undertakings described in the 

approved or modified APD, payment of 

FFP may be suspended or may be 

disallowed in whole or in part. 

(i) Emergency acquisition 

requirements. The State agency may 

request FFP for the costs of IS 

equipment and services acquired to 

meet emergency situations in which: 

(1) The State agency can demonstrate 

to FNS an immediate need to acquire IS 

equipment or services in order to 

continue operation of SNAP; and the 

State agency can clearly document that 

the need could not have been 

anticipated or planned for and 

precludes the State from following the 

prior approval requirements of 

paragraph (c) of this section. FNS may 

provide FFP in emergency situations if 

the following conditions are met: 

(2) The State agency must submit a 

written request to FNS prior to the 

acquisition of any IS equipment or 

services. The written request shall 

include: 

(i) A brief description of the IS 

equipment and/or services to be 

acquired and an estimate of their costs; 

(ii) A brief description of the 

circumstances which result in the State 

agency’s need to proceed with the 

acquisition prior to fulfilling approval 

requirements at paragraph (c) of this 

section; and 

(iii) A description of the adverse 

impact which would result if the State 

agency does not immediately acquire 

the IS equipment and/or services. 

(3) Upon receipt of a written request 

for emergency acquisition FNS shall 

provide a written response to the State 

agency within 14 days. The FNS 

response shall: 

(i) Inform the State agency that the 

request has been disapproved and the 

reason for disapproval; or, 

(ii) FNS recognizes that an emergency 

situation exists and grants conditional 

approval pending receipt of the State 

agency’s formal submission of the IAPD 

information specified at paragraph (d)(2) 

of this section within 90 days from the 

date of the State agency’s initial written 

request. 

(iii) If FNS approves the request 

submitted under paragraph (i)(1) of this 

section, FFP will be available from the 

date the State agency acquires the IS 

equipment and services. 

(iv) If the complete IAPD submission 

required by paragraph (d)(2) of this 

section is not received by FNS within 90 

days from the date of the initial written 

request, costs may be subject to 

disallowance. 

(j) General cost requirements.—(1) 

Cost determination. Actual costs must 

be determined in compliance with OMB 

Circular A–87 (2 CFR 225) and an FNS 

approved budget, and must be 

reconcilable with the approved FNS 

funding level. A State agency shall not 

claim reimbursement for costs charged 

to any other Federal program or uses of 

IS systems for purposes not connected 

with SNAP. The approved APD cost 

allocation plan includes the methods 

which will be used to identify and 

classify costs to be claimed. This 

methodology must be submitted to FNS 

as part of the request for FNS approval 

of funding as required in paragraph (d) 

of this section. Operational costs are to 

be allocated based on the statewide cost 

allocation plan rather than the APD cost 

plan. Approved cost allocation plans for 

ongoing operational costs shall not 

apply to IS system development costs 

under this section unless 

documentation required under 

paragraph (c) of this section is 

submitted to and approvals are obtained 

from FNS. Any APD-related costs 

approved by FNS shall be excluded in 

determining the State agency’s 

administrative costs under any other 

section of this part. 

(2) Cost identification for purposes of 

FFP claims. State agencies shall assign 

and claim the costs incurred under an 

approved APD in accordance with the 

following criteria: 

(i) Development costs. Using its 

normal departmental accounting 

system, in accordance with the cost 

principles set forth in OMB Circular A– 

87 (2 CFR 225), the State agency shall 

specifically identify what items of costs 

constitute development costs, assign 

these costs to specific project cost 

centers, and distribute these costs to 

funding sources based on the specific 

identification, assignment and 

distribution outlined in the approved 

APD. The methods for distributing costs 

set forth in the APD should provide for 

assigning identifiable costs, to the extent 

practicable, directly to program/ 

functions. The State agency shall amend 

the cost allocation plan required by 

§ 277.9 (administrative cost principles) 

to include the approved APD 

methodology for the identification, 

assignment and distribution of the 

development costs. 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Proposed Rules 52593 

(ii) Operational costs. Costs incurred 

for the operation of an IS shall be 

identified and assigned by the State 

agency to funding sources in accordance 

with the approved cost allocation plan 

required by § 277.9 (administrative cost 

principles). 

(iii) Service agreement costs. States 

that operate a central data processing 

facility shall use their approved central 

service cost allocation plan required by 

OMB Circular A–87 (2 CFR part 225) to 

identify and assign costs incurred under 

service agreements with the State 

agency. The State agency shall then 

distribute these costs to funding sources 

in accordance with paragraphs (j)(2)(i) 

and (ii) of this section. 

(3) Capital expenditures. The State 

agency shall charge the costs of IT 

equipment having unit acquisition costs 

or total aggregate costs, at the time of 

acquisition, of more than $25,000 by 

means of depreciation or use allowance, 

unless a waiver is specifically granted 

by FNS. If the equipment acquisition is 

part of an APD that is subject to the 

prior approval requirements of 

paragraph (c)(2) of this section, the State 

agency may submit the waiver request 

as part of the APD. 

(4) Claiming costs. Prior to claiming 

funding under this section the State 

agency shall have complied with the 

requirements for obtaining approval and 

prior approval of paragraph (c) of this 

section. 

(5) Budget authority. FNS approval of 

requests for funding shall provide 

notification to the State agency of the 

budget authority and dollar limitations 

under which such funding may be 

claimed. FNS shall provide this amount 

as a total authorization for such funding 

which may not be exceeded unless 

amended by FNS. FNS’s determination 

of the amount of this authorization shall 

be based on the budget submitted by the 

State agency. Activities not included in 

the approved budget, as well as 

continuation of approved activities 

beyond scheduled deadlines in the 

approved plan, shall require FNS 

approval of an As Needed APD Update 

as prescribed in paragraphs (c)(3)(i)(D) 

and (d)(4) of this section, including an 

amended State budget. Requests to 

amend the budget authorization 

approved by FNS shall be submitted to 

FNS prior to claiming such expenses. 

(k) Access to the system and records. 

Access to the system in all aspects, 

including but not limited to design, 

development, and operation, including 

work performed by any source, and 

including cost records of contractors 

and subcontractors, shall be made 

available by the State agency to FNS or 

its authorized representatives at 

intervals as are deemed necessary by 

FNS, in order to determine whether the 

conditions for approval are being met 

and to determine the efficiency, 

economy and effectiveness of the 

system. Failure to provide full access to 

all parts of the system may result in 

suspension and/or termination of SNAP 

funds for the costs of the system and its 

operation. 

(l) Ownership rights—(1) Software.— 

(i) The State or local government shall 

include a clause in all procurement 

instruments which provides that the 

State or local government shall have all 

ownership rights in any software or 

modifications thereof and associated 

documentation designed, developed or 

installed with FFP under this section. 

(ii) FNS reserves a royalty-free, 

nonexclusive, and irrevocable license to 

reproduce, publish, or otherwise use 

and to authorize others to use for 

Federal Government purposes, such 

software, modifications, and 

documentation. 

(iii) Proprietary operating/vendor 

software packages which meet the 

definition of COTS at paragraph 

277.18(b) shall not be subject to the 

ownership provisions in paragraphs 

(l)(1)(i) and (ii) of this section. FFP is 

not available for development costs for 

proprietary application software 

developed specifically for SNAP. 

(2) Information Systems equipment. 

The policies and procedures governing 

title, use and disposition of property 

purchased with FFP, which appear at 

§ 277.13 (property) are applicable to IS 

equipment. 

(m) Information system security 

requirements and review process—(1) 

Information system security 

requirements. State and local agencies 

are responsible for the security of all IS 

projects under development, and 

operational systems involved in the 

administration of SNAP. State and local 

agencies shall determine appropriate IS 

security requirements based on 

recognized industry standards or 

compliance with standards governing 

security of Federal information systems 

and information processing. 

(2) Information security program. 

State agencies shall implement and 

maintain a comprehensive IS Security 

Program for IS and installations 

involved in the administration of the 

SNAP. IS Security Programs shall 

include the following components: 

(i) Determination and implementation 

of appropriate security requirements as 

prescribed in paragraph (m)(1) of this 

section. 

(ii) Establishment of a security plan 

and, as appropriate, policies and 

procedures to address the following 

areas of IS security: 

(A) Physical security of IS resources; 

(B) Equipment security to protect 

equipment from theft and unauthorized 

use; 

(C) Software and data security; 

(D) Telecommunications security; 

(E) Personnel security; 

(F) Contingency plans to meet critical 

processing needs in the event of shortor long-term interruption of service; 

(G) Emergency preparedness; and 

(H) Designation of an Agency IS 

Security Manager. 

(iii) Periodic risk analyses. State 

agencies shall establish and maintain a 

program for conducting periodic risk 

analyses to ensure that appropriate, 

cost-effective safeguards are 

incorporated into new and existing 

systems. In addition, risk analyses shall 

be performed whenever significant 

system changes occur. 

(3) IS security reviews. State agencies 

shall review the security of IS involved 

in the administration of SNAP on a 

biennial basis. At a minimum, the 

reviews shall include an evaluation of 

physical and data security, operating 

procedures, and personnel practices. 

State agencies shall maintain reports of 

their biennial IS security reviews, 

together with pertinent supporting 

documentation, for Federal review upon 

request. 

(4) Applicability. The security 

requirements of this section apply to all 

IS systems used by State and local 

governments to administer SNAP. 

Dated: August 10, 2011. 

Audrey Rowe, 

Administrator, Food and Nutrition Service. 

[FR Doc. 2011–20796 Filed 8–22–11; 8:45 am] 

BILLING CODE 3410–30–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2011–0596; Directorate 

Identifier 2008–SW–37–AD] 

RIN 2120–AA64 

Airworthiness Directives; Eurocopter 

Canada Ltd. Model BO 105 LS A–3 

Helicopters 

AGENCY: Federal Aviation 

Administration, DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: This document proposes 

superseding an existing airworthiness 

directive (AD) for Eurocopter Canada 


srobinson on DSK4SPTVN1PROD with PROPOSALS