Child and Adult Care Food Program Integrity Act of 2000

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Child and Adult 
Care Food Program Integrity Act of 2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Eligibility criteria for participating organizations.
Sec. 3. Approval of sponsoring organizations; other requirements.
Sec. 4. Termination or suspension of participating organizations.
Sec. 5. Recovery of amounts from institutions.
Sec. 6. Limitation on administrative expenses for certain sponsoring 
                            organizations.
Sec. 7. Limitations on ability of family or group day care homes to 
                            transfer sponsoring organizations.
Sec. 8. Reallocation of audit funds.
Sec. 9. Technical and training assistance for identification and 
                            prevention of fraud and abuse.
Sec. 10. Statewide demonstration projects involving private for-profit 
                            organizations that provide nonresidential 
                            day care services.
Sec. 11. Program for at-risk school children.
Sec. 12. Withholding of funds for failure to provide sufficient 
                            training, technical assistance, and 
                            monitoring.

SEC. 2. ELIGIBILITY CRITERIA FOR PARTICIPATING ORGANIZATIONS.

    Section 17(a)(2) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1766(a)(2)) is amended--
            (1) in subparagraph (B), by inserting ``, or has not been 
        determined to be ineligible to participate in any other Federal 
        program by reason of violation of the requirements of such 
        program'' before ``, for a period'';
            (2) in subparagraph (C), by striking ``; and'' and 
        inserting ``, and in the case of a sponsoring organization, the 
        organization shall employ an appropriate number of monitoring 
        personnel based upon the number and characteristics of child 
        care centers and family or group day care homes sponsored by 
        the organization, as approved by the State (in accordance with 
        regulations developed by the Secretary), to ensure effective 
        oversight of the operations of the child care centers and 
        family or group day care homes;'';
            (3) in subparagraph (D), by striking the period and 
        inserting a semicolon; and
            (4) by adding at the end the following:
                    ``(E) in the case of a sponsoring organization, 
                that such organization has in effect a policy that 
                restricts other employment by employees that interferes 
                with the responsibilities and duties of such sponsoring 
                organization employees with respect to the program; and
                    ``(F) in the case of a private institution that 
                applies for initial participation in the program on or 
                after the date of the enactment of the Child and Adult 
                Care Food Program Integrity Act of 2000, that, if the 
                State requires such institutions to be bonded under 
                State law, regulation, or policy, the institution is 
                bonded in accordance with such law, regulation, or 
                policy.''.

SEC. 3. APPROVAL OF SPONSORING ORGANIZATIONS; OTHER REQUIREMENTS.

    (a) Approval of Sponsoring Organizations.--Section 17(d)(1) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1766(d)(1)) is 
amended--
            (1) by striking ``(d)(1) Any eligible public institution'' 
        and inserting ``(d)(1)(A) Any eligible public institution'';
            (2) by striking ``Any eligible private institution'' and 
        inserting ``Subject to subparagraph (B), any eligible private 
        institution'';
            (3)(A) by striking ``(A) has tax exempt status'' and 
        inserting ``(i) has tax exempt status''; and
            (B) by striking ``(B) is currently operating'' and 
        inserting ``(ii) is currently operating''; and
            (4) by adding at the end the following:
    ``(B) In approving the initial application of a sponsoring 
organization for participation in the program, the State shall consider 
whether the sponsoring organization has the administrative capability 
to operate the program (including whether or not the sponsoring 
organization has business experience and management plans appropriate 
to operate the program), would fulfill an identified need under the 
program, and will meet the other requirements of this section. In the 
case of a sponsoring organization of a family or group day care home 
seeking approval for participation in the program on or after the date 
of the enactment of the Child and Adult Care Food Program Integrity Act 
of 2000, the State may limit the number of such sponsoring 
organizations in any geographical area of the State if the State 
determines that a sufficient number of sponsoring organizations, based 
on identified and documented need, are available and able to serve the 
day care homes in the geographical area.''.
    (b) Site Visits.--Section 17(d)(2)(A) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1766(d)(2)(A)) is amended--
            (1) in clause (i), by striking ``; and'' and inserting a 
        semicolon;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
            ``(ii)(I) requires periodic unannounced site visits at not 
        less than 3-year intervals to sponsored child care centers and 
        family or group day care homes to identify and prevent 
        management deficiencies and fraud and abuse under the program;
            ``(II) requires at least one scheduled site visit each year 
        to sponsored child care centers and family or group day care 
        homes to identify and prevent management deficiencies and fraud 
        and abuse under the program and to improve program operations; 
        and
            ``(III) requires at least one scheduled site visit at not 
        less than 3-year intervals to institutions to identify and 
        prevent management deficiencies and fraud and abuse under the 
        program and to improve program operations; and''.
    (c) Program Information.--
            (1) In general.--Section 17(d) of the Richard B. Russell 
        National School Lunch Act (42 U.S.C. 1766(d)) is amended by 
        adding at the end the following:
    ``(3)(A) Upon enrollment of a child in a sponsored child care 
center or family or group day care home participating in the program, 
the center or home (or its sponsoring organization) shall provide to 
the child's parents or guardians information that describes the program 
and its benefits and the name and telephone number of the sponsoring 
organization of the center or home and the State agency involved in the 
operation of the program.
    ``(B) The information described in subparagraph (A) shall be in a 
form and, to the extent practicable, language easily understandable by 
the child's parents or guardians.''.
            (2) Effective date.--In the case of a child that is 
        enrolled in a sponsored child care center or family or group 
        day care home participating in the child and adult care food 
        program under section 17 of the Richard B. Russell National 
        School Lunch Act (42 U.S.C. 1766) before the date of the 
        enactment of this Act, the center or home shall provide 
        information to the child's parents or guardians pursuant to 
        section 17(d)(3) of such Act, as added by paragraph (1), not 
        later than 90 days after the date of the enactment of this Act.
    (d) Allowable Administrative Expenses for Sponsoring 
Organizations.--Section 17(d) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1766(d)), as amended by subsection (c), is further 
amended by adding at the end the following:
    ``(4) The Secretary, in consultation with State agencies and 
sponsoring organizations, shall develop and provide for the 
dissemination to State agencies and institutions, of a list of 
allowable reimbursable administrative expenses for sponsoring 
organizations under the program.''.

SEC. 4. TERMINATION OR SUSPENSION OF PARTICIPATING ORGANIZATIONS.

    Section 17(d) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1766(d)), as amended by section (3), is further amended by 
adding at the end the following:
    ``(5)(A) The Secretary shall establish procedures for the 
termination of participation by institutions and sponsored child care 
centers and family or group day care homes under the program.
    ``(B) Procedures established pursuant to subparagraph (A) shall 
include standards for terminating the participation of an institution 
or sponsored child care center or family or group day care home that--
            ``(i) engages in unlawful practices, falsifies information 
        provided to the State agency, or conceals a criminal 
        background; or
            ``(ii) substantially fails to fulfill the terms of its 
        agreement with the State agency.
    ``(C) Procedures established pursuant to subparagraph (A)--
            ``(i) shall require an entity described in clause (i) or 
        (ii) of subparagraph (B) to undertake corrective action; and
            ``(ii) may require the immediate suspension of operation of 
        the program by an entity described in clause (i) or (ii) of 
        subparagraph (B), without the opportunity for corrective 
        action, if the State agency determines that there is imminent 
        threat to the health or safety of a participant at the entity 
        or the entity engages in any activity that poses a threat to 
        public health or safety.
    ``(D) An institution or sponsored child care center or family or 
group day care home shall be provided a fair hearing in accordance with 
subsection (e)(1) prior to any determination to terminate participation 
by the institution under the program.
    ``(E) The Secretary shall maintain a list of institutions, 
sponsored child care centers, sponsored family or group day care homes, 
and individuals that have been terminated or otherwise disqualified 
from participation in the program. The Secretary shall make such list 
available to State agencies for use in approving or renewing 
applications by institutions, sponsored child care centers, sponsored 
family or group day care homes, and individuals for participation in 
the program.''.

SEC. 5. RECOVERY OF AMOUNTS FROM INSTITUTIONS.

    Section 17(f)(1) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1766(f)(1)) is amended--
            (1) by striking ``(f)(1) Funds paid'' and inserting 
        ``(f)(1)(A) Funds paid''; and
            (2) by adding at the end the following:
    ``(B)(i) The State may recover funds disbursed under subparagraph 
(A) to an institution if the State determines that the institution has 
engaged in fraud or abuse with respect to the program or has submitted 
an invalid claim for reimbursement.
    ``(ii) Amounts recovered under clause (i)--
            ``(I) may be paid by the institution to the State over a 
        period of 1 or more years; and
            ``(II) shall not be paid from funds used to provide meals 
        and supplements.
    ``(iii) An institution shall be provided a fair hearing in 
accordance with subsection (e)(1) prior to any determination to recover 
funds under this subparagraph.''.

SEC. 6. LIMITATION ON ADMINISTRATIVE EXPENSES FOR CERTAIN SPONSORING 
              ORGANIZATIONS.

    Section 17(f)(2) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1766(f)(2)) is amended by adding at the end the 
following:
    ``(C)(i) Except as provided in clause (ii), a sponsoring 
organization of a day care center may reserve not more than 15 percent 
of the funds provided under paragraph (1) for the administrative 
expenses of the organization.
    ``(ii) A State may waive the requirement in clause (i) with respect 
to a sponsoring organization if the organization provides justification 
to the State that the organization requires funds in excess of 15 
percent of the funds provided under paragraph (1) to pay such 
administrative expenses.''.

SEC. 7. LIMITATIONS ON ABILITY OF FAMILY OR GROUP DAY CARE HOMES TO 
              TRANSFER SPONSORING ORGANIZATIONS.

    Section 17(f)(3) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1766(f)(3)) is amended by striking subparagraph (D) and 
inserting the following:
                    ``(D) Limitations on ability of family or group day 
                care homes to transfer sponsoring organizations.--
                            ``(i) In general.--Subject to clause (ii), 
                        a State agency shall limit the ability of a 
                        family or group day care home to transfer from 
                        a sponsoring organization to another sponsoring 
                        organization more frequently than once a year.
                            ``(ii) Good cause.--The State agency may 
                        permit or require a family or group day care 
                        home to transfer from a sponsoring organization 
                        to another sponsoring organization more 
                        frequently than once a year for good cause (as 
                        determined by the State agency). Such good 
                        cause may include circumstances where the 
                        sponsoring organization of the family or group 
                        day care home ceases to participate in the 
                        child and adult care food program.''.

SEC. 8. REALLOCATION OF AUDIT FUNDS.

    (a) In General.--Section 17(i) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1766(i)) is amended--
            (1) by striking ``(i) The Secretary shall'' and inserting 
        the following:
    ``(i) Audit Funds.--
            ``(1) In general.--The Secretary shall''; and
            (2) by adding at the end the following:
            ``(2) Reallocation of funds.--
                    ``(A) Return to the secretary.--For each fiscal 
                year, any amounts allocated to a State under this 
                subsection that are not obligated during the fiscal 
                year shall be returned to the Secretary in accordance 
                with procedures established by the Secretary.
                    ``(B) Reallocation by the secretary.--The Secretary 
                shall allocate any amounts returned under subparagraph 
                (A) among States that demonstrate a need for the 
                amounts, for the purposes described in paragraph (1), 
                in accordance with procedures established by the 
                Secretary.
            ``(3) Annual report.--Each State agency administering the 
        program that receives amounts for a fiscal year for the purpose 
        of conducting audits of participating institutions pursuant to 
        paragraph (1) shall prepare and submit to the Secretary a 
        report that contains a summary description of the results of 
        the audits and other activities conducted with such amounts.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2000, or the date of the enactment of this 
Act, whichever occurs later.

SEC. 9. TECHNICAL AND TRAINING ASSISTANCE FOR IDENTIFICATION AND 
              PREVENTION OF FRAUD AND ABUSE.

    Section 17(q)(1) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1766(q)(1)) is amended by adding at the end the 
following: ``As part of such training and technical assistance, the 
Secretary shall provide training on a continuous basis to State 
agencies, and shall ensure that such training is provided to sponsoring 
organizations, for the identification and prevention of fraud and abuse 
under the program and to improve management of the program.''.

SEC. 10. STATEWIDE DEMONSTRATION PROJECTS INVOLVING PRIVATE FOR-PROFIT 
              ORGANIZATIONS THAT PROVIDE NONRESIDENTIAL DAY CARE 
              SERVICES.

    (a) In General.--Section 17(p) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1766(p)) is amended--
            (1) in the first sentence of paragraph (1), by striking ``2 
        statewide demonstration projects'' and inserting ``statewide 
        demonstration projects in 4 States''; and
            (2) in paragraph (3)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(C) in 2 other States, as approved by the Secretary 
        through a competitive application process.''.
    (b) Effective Date.--The Secretary of Agriculture may carry out 
demonstration projects in States described in section 17(p)(3)(C) of 
the Richard B. Russell National School Lunch Act, as added by 
subsection (a)(2)(C), beginning no earlier than October 1, 2001.

SEC. 11. PROGRAM FOR AT-RISK SCHOOL CHILDREN.

    Section 17(r) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1766(r)) is amended--
            (1) in paragraph (2), by inserting ``meals or'' before 
        ``supplements'';
            (2) in paragraph (4)--
                    (A) in the heading, by striking ``Supplement'' and 
                inserting ``Meal and supplement'';
                    (B) in subparagraph (A)--
                            (i) by striking ``only for'' and all that 
                        follows through ``(i) a supplement'' and 
                        inserting ``only for one meal per child per day 
                        and one supplement per child per day'';
                            (ii) by striking ``; and'' and inserting a 
                        period; and
                            (iii) by striking clause (ii);
                    (C) in subparagraph (B), by striking ``Rate.--A 
                supplement'' and inserting the following: ``Rates.--
                            ``(i) Meals.--A meal shall be reimbursed 
                        under this subsection at the rate established 
                        for free meals under subsection (c).
                            ``(ii) Supplements.--A supplement''; and
                    (D) in subparagraph (C), by inserting ``meal or'' 
                before ``supplement''; and
            (3) by adding at the end the following:
            ``(5) Limitation.--The Secretary shall limit reimbursement 
        under this subsection for meals served under a program to 
        institutions located in 6 States, as approved by the Secretary 
        through a competitive application process.''.

SEC. 12. WITHHOLDING OF FUNDS FOR FAILURE TO PROVIDE SUFFICIENT 
              TRAINING, TECHNICAL ASSISTANCE, AND MONITORING.

    Section 7(a)(9)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1776(a)(9)(A)) is amended by inserting after ``the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751 et seq.)'' the following: 
``(including the requirement to provide sufficient training, technical 
assistance, and monitoring of the child and adult care food program 
under section 17(k) of the Richard B. Russell National School Lunch 
Act)''.

Summary: (Sec. 2) Revises CACFP eligibility criteria for participating organizations to require that they have not been determined ineligible for participation in any other Federal program as a result of program requirement violations. Requires sponsoring organizations to: (1) employ an appropriate number of monitoring personnel to ensure effective oversight of the operations; and (2) have in effect a policy that restricts other employment by employees interfering with CACFP responsibilities. Requires private institutions that apply for initial participation in CACFP to be bonded, if required by State law.
(Sec. 3) Revises provisions for CACFP institutional approval and applications. Requires the State agency to determine that the sponsoring organization is administratively capable of operating the program described in its application, and would fulfill an identified need under CACFP. Allows a State to limit the number of sponsoring organizations in a geographical area if a sufficient number are available and able to serve day care homes in that area. Sets forth requirements relating to: (1) site visits; (2) CACFP program information for parent's or guardians; and (3) allowable administrative expenses for sponsoring organizations.
(Sec. 4) Directs the Secretary to establish procedures for termination or suspension of participating organizations.
(Sec. 5) Allows a State to recover certain disbursed funds upon determining that the institution has engaged in fraud or abuse with respect to CACFP or has submitted an invalid claim for reimbursement.
Allows State agencies to withhold reimbursements temporarily without a hearing for up to 90 days under specified conditions.
(Sec. 6) Prohibits sponsoring organizations from reserving for administrative expenses any more than 15 percent of the CACFP payment; but allows States to waive such limitation if the organization provides justification for exceeding such amount.
(Sec. 7) Requires State agencies to limit the ability of family or group day care homes to transfer from one sponsoring organization to another more frequently than once a year. Authorizes State agencies to permit or require such homes to transfer from one sponsoring organization to another more frequently than once a year for good cause.
(Sec. 8) Requires a State to return, and the Secretary to reallocate to other States on the basis of need, any audit funds allocated under CACFP that are not obligated by the State for that fiscal year.
(Sec. 9) Directs the Secretary to provide continuous training to State agencies, and ensure that it is provided to sponsoring organizations, in identifying and preventing fraud and abuse and in improving management of CACFP.