Promoting Stronger Vendor Integrity and Oversight in WIC

Dear WIC State Agency Directors,

In her first week at the U.S. Department of Agriculture (USDA), Secretary Brooke Rollins sent each of you a letter highlighting her priorities for the nutrition programs. In this letter, she noted her commitments to taking swift action to minimize instances of fraud, waste, and program abuse and encouraging states to choose policy options that protect both participants and the taxpayer. Under her leadership and to fulfill those commitments, the Food and Nutrition Service (FNS) is seeking your partnership in strengthening program integrity.

It is critically important for USDA’s nutrition assistance programs to serve American taxpayers as efficiently as possible. In WIC, program integrity efforts ensure resources are invested wisely to maximize the benefit for eligible women, infants, and children. Accordingly, FNS is committed to supporting WIC state agency efforts to combat vendor fraud, waste and abuse. State agencies should make every effort to increase oversight of WIC vendors through the strategies outlined below.

• Background checks help prevent bad actors from abusing WIC. The vendor selection process is the first line of defense in preventing bad actors from becoming authorized in the program. In addition to current business integrity efforts, state agencies are encouraged to complete background checks on new vendor applicants for a more thorough review of their business history and standing. In general, state agencies may not authorize a vendor applicant that has received a conviction or civil judgment that indicates a lack of business integrity in the last six years.¹ As a reminder, state agencies may also reassess an authorized vendor at any time using the most up-to-date vendor selection criteria and must terminate vendor agreements that fail to meet the criteria.²
• Vendor training is a critical component of vendor management. To ensure vendors understand program requirements and potential consequences of noncompliance, state agencies should ensure they provide timely, thorough, and effective training to all WIC vendors. FNS recommends state agencies train vendors during the fiscal year they are authorized or as close to their authorization period as possible. While state agencies have historically trained vendors in the months prior to the fiscal year of authorization, this can lead to both inefficiencies and training gaps as many vendors experience a high level of staff turnover.
• Monitoring, investigation, and corrective action are crucial for managing vendors. Once authorized, state agency oversight efforts remain critical for ensuring compliance with program requirements. Routine monitoring helps state agencies identify the types and levels of abuse and errors across vendors and quickly respond by taking corrective actions, as appropriate. State agencies are required to monitor a minimum of 5%³ and investigate a minimum of 5%⁴ of their vendor population annually, calculated based on the number of vendors authorized as of October 1. State agencies must ensure that high-risk vendors are prioritized for investigations up to the 5% threshold.⁵ FNS strongly recommends that state agencies reassess their methods for monitoring and investigations, including their high-risk indicators, with a goal of surpassing the 5% minimum. State agencies should also ensure that their monitoring policies are up to date. This includes reviewing the criteria for monitoring the vendor population for compliance, the criteria for determining which vendors will receive routine monitoring, and the procedures for routine monitoring visits.
• States must identify high-risk vendors and should continue to improve their high-risk criteria. In addition to routine monitoring, state agencies must identify high-risk vendors at least once a year using the FNS-developed criteria and/or other statistically based criteria specific to the state agency and approved by FNS.⁶ Now that all state agencies have implemented EBT statewide, FNS recommends that state agencies ensure their high-risk indicators are effective in a modern marketplace with EBT. State agencies can assess the effectiveness of their high-risk criteria by comparing the outcomes of high-risk compliance investigations to randomly chosen compliance investigations. With effective indicators, WIC staff should be more likely to find program violations when investigating high-risk vendors, in comparison to randomly chosen vendors.
• Compliance investigations provide a window into vendor violations. To carry out effective compliance investigations and ensure compliance with program regulations, state agencies are encouraged to use both compliance buys and inventory audits. As the two different methods assess distinct vendor violations, FNS recommends state agencies update procedures and train staff to conduct both types of investigative visits.

Thank you for your partnership and commitment to state agency program integrity efforts throughout the WIC vendor management process. By tightening vendor oversight efforts throughout the entire vendor management process – from vendor selection to monitoring and investigations – you are helping to safeguard the integrity of the program, maximize the impact of taxpayer dollars, and protect WIC benefits for participants.

For further information, please see WIC regulations at 7 CFR Part 246.12 and the WIC Vendor Management and Food Delivery Handbook, the latter of which serves as a valuable technical assistance resource for WIC State agency staff.

We thank you for your continued service to WIC participants. Please reach out to your FNS regional office with any questions or requests for technical assistance.

Sincerely,

James C. Miller
Administrator
Food and Nutrition Service
United States Department of Agriculture

¹ 7 CFR 246.12(g)(3)(ii)
² 7 CFR 246.12(g)(3)
³ 7 CFR 246.12(j)(2)
⁴ 7 CFR 246.12(j)(4)
⁵ 7 CFR 246.12(j)(4)(i)
⁶ 7 CFR 246.12(j)(4)(i)