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Community Agencies Corp. of NJ v. New Jersey Dep't of Agriculture

January 15, 2010

COMMUNITY AGENCIES CORP. OF NJ, DOROTHY KNAUER, DOLLIE MUSA, KARL E. BECKER, TERENCE J. DWYER, AND DOROTHEA HOFFNER, APPELLANTS,
v.
NEW JERSEY DEPARTMENT OF AGRICULTURE, CHILD AND ADULT FOOD CARE PROGRAM, RESPONDENT.



On appeal from the New Jersey Department of Agriculture, Child and Adult Food Care Program, Agreement No. 07-13-963.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued Telephonically December 9, 2009

Before Judges Reisner and Yannotti.

Community Agencies Corp. of N.J. (CACNJ), Dorothy Knauer (Knauer), Dollie Musa (Musa), Karl E. Becker (Becker), Terence Dwyer (Dwyer) and Dorothea R. Hoffner (Hoffner) appeal from a final determination of the New Jersey Department of Agriculture (NJDOA or department), which terminated and disqualified appellants from future participation in the Child and Adult Care Feeding Program (CACFP). For the reasons that follow, we reverse and remand for further proceedings.

I.

We briefly summarize the facts pertinent to our decision. The CACFP is a food service program established by the United States Department of Agriculture (USDOA), under the authority of the National School Lunch Act, 42 U.S.C.A. §§ 1751-1769e, and the Child Nutrition Act of 1966, 42 U.S.C.A. §§ 1771-1790. The purpose of the CACFP is to "safeguard the health and well-being of the Nation's children" by encouraging the "consumption of nutritious" foods. 42 U.S.C.A. § 1751.

The CACFP provides states with federal "grants-in-aid and other means" to initiate and maintain nonprofit food service programs for children in institutions providing child care." 42 U.S.C.A. § 1766(a)(1). States enter into agreements with the USDOA in which they agree to comply with all applicable federal laws and regulations governing the program. The states, in turn, distribute the funds pursuant to reimbursement agreements (RA) with local program sponsors who have been approved to participate in the CACFP. 7 C.F.R. §§ 226.1, 226.6(b)(4).

In January 2007, CAC and the NJDOA executed an RA governing CAC's participation in the CACFP during the 2007 federal fiscal year, which began on October 1, 2006. The agreement expired on September 30, 2007. It appears that in 2007, CAC provided food services to eligible children enrolled at a child care center called Wellspring II (Wellspring). In June 2007, the NJDOA conducted an onsite inspection of Wellspring's food service program and reviewed certain documents related thereto. NJDOA's representatives met with Musa and Esther Speight (Speight), who were both involved in the operation of the CACFP at Wellspring.

On June 26, 2007, the NJDOA issued a letter to CAC, which was addressed to Musa. The NJDOA identified certain operational deficiencies in the CACFP at Wellspring. According to the NJDOA, those deficiencies related to: (1) missing and/or incorrect applications from program beneficiaries that resulted in the misclassification of children in free versus reduced-rate reimbursements; (2) inaccurate meal counts; (3) inadequacies of the menus; (4) discrepancies between the attendance records and the number of meals served; (5) and failure to produce sanitation, training, and monitoring documentation; and (6) non-compliance with certain lunch service requirements.

In its June 26, 2007 letter, the NJDOA also stated that CAC's misclassification of children had resulted in an overclaim of $249.97 for April 2007. The NJDOA directed CAC to return that amount within thirty days. In addition, the NJDOA directed CAC to submit a corrective action plan and certain documentation by July 17, 2007. CAC did not respond to the NJDOA's letter.

On August 10, 2007, the NJDOA issued another letter to CAC, which also was addressed to Musa. In this letter, the NJDOA stated that CAC's failure to respond by August 14, 2007, to its earlier letter would result in a determination that CAC's operation of the CACFP at Wellspring was "seriously deficient[.]" CAC did not respond to this letter.

Musa submitted a voucher dated September 3, 2007, to the NJDOA seeking reimbursement for meals served at Wellspring in August 2007. On October 18, 2007, the NJDOA sent CAC a letter, which was addressed to Musa, advising that it was withholding the previously identified overclaim of $249.97 from the reimbursement sought for the meals served in August 2007.

In its letter of October 18, 2007, the NJDOA also said that CAC had not addressed the deficiencies identified in the department's June 26, 2007 letter. The NJDOA stated that CAC's failure to respond to future requests for information and corrective action would result in a determination that its operation of the CACFP was "'seriously ...


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