THE USDA COMMODITIES PROGRAM

Second Harvest manages the USDA Commodities program for our 35 county service area. Commodity foods available through Second Harvest typically include products like canned juices, canned meat, dry beans, rice, canned fruits, canned vegetables, peanut butter, spaghetti, and other items. The product is made available through the USDA Emergency Food Assistance Program and is exempt from any shared maintenance fee. Commodities greatly increase the nutritional value of your food offerings.

HOWEVER…

1. They require extra paperwork and have stricter standards. This product takes more time to distribute because standards, distribution quantities, frequency of service and records of clients served must be verified and documented. (See chart, next page.)

2. You must file a monthly inventory report. All unopened cases and loose units on shelves must be inventoried. Additionally, the number of cases and units of product distributed must be recorded on a monthly report that has to reach our office by the fifth of the month. We then compile these reports from all commodity eligible agencies and file a consolidated report to the State of Kentucky, due by the tenth of the month. If not promptly filed, you will lose your eligibility for the Commodities program. We will teach you how to complete this report during your orientation.

3. Commodities cannot be stockpiled. You may only stock a two months' supply of Commodities. This amount varies from agency to agency based on the number of households or clients served each month. Since case quantity varies from product to product we can assist you in determining how many cases of each product to order on your shopping visits.

4. You will be monitored by USDA and/or Second Harvest. The Commonwealth of Kentucky, Department of Agriculture, Division of Food Distribution and/or Second Harvest inspectors will monitor your agency. Inspectors will be checking cleanliness, adequate storage facilities, accurate screening and distribution, and complete records and reports.

5. The possibility of loss poses a financial risk. Commodities are government property until distributed. Losses of Commodities in your possession mean a financial risk for your agency. If a loss occurs, a loss report is required and a determination will be made as to whether your agency will be held financially liable for the loss. This includes losses associated with freezer or cooler failure. When such a loss occurs, if temperatures are not being checked and recorded daily (including weekends), it will be up to the agency to prove that negligence was not involved. We will help you minimize that risk, but it can never be completely eliminated. As long as your agency holds Commodities, it assumes a risk that should not be ignored.

6. All losses must be reported. Losses require administrative action. Commodity losses through theft, spoilage, infestation, contamination, or damage from handling must be immediately reported to Second Harvest. A loss report must be completed and an appropriate follow-up investigation conducted.

7. Tighter standards apply. You don't have the same discretion you have with other food bank product. The below chart highlights the differences.

To sign up for the USDA Commodity Program:

If your agency would like to receive and distribute USDA Commodities, please complete and return the attached Commodity Distribution Agreement. USDA also requires that you keep a copy for your files. You will be provided training on the U.S.D.A. Commidities Program during your orientation session.

THE EMERGENCY FOOD ASSISTANCE PROGRAM (TEFAP) SUB-OUTLET AGREEMENT

THIS AGREEMENT, made and entered into as of the_____ day of _______ by and between the____________________________________________________________ (First Party) here in after referred to as the Emergency Feeding Organization (EFO) and __________________________________________________ (Second Party) (Address of Second Party) hereinafter referred to as the Second Party,

WITNESSETH, THAT:

Whereas, the EFO, in the exercise of its lawful duties, has determined upon the necessity of the performance of the following functions briefly describes as:

The distribution of commodities made available by the United States Department of Agriculture pursuant to 7 U.S.C. 612c to eligible soup kitchens, food banks, food pantries and emergency feeding organizations in accordance with 7 CFR Part 250 and 251 and the Hunger Prevention Act of 1988, P.L. 100-435.

Whereas, the Second Party is available, is eligible as a ________________ (7 CFR 251.5 (a)(3)) to perform this function, and the EFO desires that the Second Party perform this function, beginning ___________ through ____________.

Now, therefore, it is hereby and herewith mutually agreed by and between the parties hereto as follows:

1. The Second Party shall comply with the following requirements and procedures as specified in the Commodities Procedural Instructions for Soup Kitchens and Food Pantries.



1. Shall accept only the amount of commodities which will be used without waste. In the event of any disagreement over amounts to be made available, the determination of the EFO is final.



2. Shall provide facilities, adequate in the opinion of the EFO, for the handling, storage and distribution of commodities and properly safeguard the commodities against theft, spoilage, and other loss. Donated foods are not to be sold, exchanged or otherwise disposed of without the PRIOR approval of the EFO.



3. Second Party shall not charge any individual for USDA foods distributed, or services related to the distribution of USDA foods, or request contributions from recipients to defray administrative costs. Maintain an accurate Commodity Application Register for sites distributing food to households for home consumption, including; 1) the number of households to whom food is distributed; 2) the names and addresses of all persons or households receiving foods; 3) the type of documentation used to determine need (income eligibility); 4) the distribution rate used for each item per distribution; 5) dates of food distribution; 6) household size; 7) signature of household; 8) and documentation of racial and ethnic data. A "household" is defined as an economic unit which is a group of related or unrelated people who share all significant income and expenses of its members, and is characterized by sharing expenses such as food, housing, medical costs, and household insurance. More than one economic unit may live in the same household. Separate economic units living in the same household are characterized by prorating of expenses and have economic independence of each other.



4. Shall maintain accurate and complete records of receipt, disposal and inventory of commodities Consolidated Report (KY-FD-27-FB). Ensure that Soup Kitchens keep daily records of the number of meals served, date served and type of meal served (breakfast, lunch, dinner). The report shall be submitted to the EFO within five (5) days following the end of the month.



5. Shall submit such reports as are required by the EFO in a timely fashion. Failure to submit timely reports may be a basis for cancellation of this agreement.



6. All instances of lost or unaccounted for commodities are to be recorded on a Donated Food Loss Report (KY-FD-25-FB) and submitted to the EFO within five (5) days of the discovery of the loss. Lost commodities are those which, for any reason cannot be demonstrated by records or other evidence, satisfactory to the EFO, to have been delivered to or to be available in good condition for delivery to, needy persons or households for whom they were donated by the United States Department of Agriculture. Commodities may be lost through theft, damage, spoilage, infestation, improper distribution, sale or exchange, diversion to an improper use or similar causes.



7. The Second Party accepts full responsibility for compliance with the provisions of this agreement, including liability for any commodities lost through its negligence.



8. The Second Party shall distribute USDA food for consumption only to households whose eligibility can be determined by self declaration of gross income through completion of an Income Declaration Form Commodity Application Register (KY-FD-30-FB) indicating income below the levels shown for the appropriate household size in the table below. (Income scale is based on current food stamp eligibility criteria as determined by the state. Said criteria are subject to change as required by federal or state law or regulation.) The EFO reserves the right upon written notice to the Second Party to adjust the eligibility criteria as necessary.

Income Eligibility Scale

Household Eligibility for USDA Foods

(Effective July 1, 2004 to June 30, 2005)

---

Household Size	Per Month
1	$1,037
2	$1,390
3	$1,744
4	$2,097
5	$2,450
6	$2,803
7	$3,156
8	$3,509
Each Additional Family Member	$ +354




9. The Second Party shall distribute foods to eligible households in the amounts shown in the Household Distribution Rate (KY-FD-54-FB).
   
   The EFO with prior approval from the Kentucky Department of Agriculture reserves the right upon written notice to the Second Party to adjust the distribution rate set forth in the Household Distribution Rate as necessary based upon the amount of commodities made available by USDA to the state for distribution to qualifying participants. The Second Party specifically agrees that its rate of distribution will not exceed the statewide uniform rate as determined by the Kentucky Department of Agriculture. The Second Party may reduce its rate of distribution of a commodity(s) on the condition there is/are an insufficient quantity of the commodity(s) to ensure all needy households will be served. However, if deemed necessary, the rate may be reduced with prior approval from the EFO. In addition, households will be permitted to refuse any part of an allotment that they do not intend to use.



10. Households shall reside in the specified geographic location served by the EFO at the time of applying for assistance, but length of residency shall not be used as an eligibility criterion..



11. In accordance with 7 CFR Section 251.9(6)(g), the distribution of commodities shall not be used as a means for furthering the political interest of any individual party..



12. The Commodities Procedural Instructions for Soup Kitchens and Food Pantries dated July 1, 1992, and revised 1997 Procedural Instructions for The Emergency Assistance Program (TEFAP) is hereby incorporated as if attached..



13. The EFO retains the right to exclude any local organizations from program participation. The EFO is to be notified immediately, in writing, of a cancellation of a local agreement and the reasons for cancellation..



14. Second Party accepts full responsibility for all foods until they have been distributed to eligible recipients..



15. Second Party agrees not to diminish normal expenditures for food because of receipt of federal food commodities, but to use this distribution as a supplement to their other food sources..



16. Second Party agrees to comply with instructions of the EFO in regard to transfer of all donated commodities remaining in EFO's possession or control at the time of termination..



17. Second Party assumes all risks of loss and to indemnify and hold the EFO, it's offices, agents and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines, or judgements, including costs, attorneys' and witnesses' fees, and expenses incident thereto, for injuries (including death) to persons and for loss of, damage to, or destruction of property arising out of or in connection with this contract..



18. Second Party specifically understands and agrees that the EFO may revise the terms of this contract to reflect the requirements of any USDA approved state plan for emergency food distribution authorized by the provisions of Public Law 98-8 (7 U.S.C. 612c) as amended..



2. TERMINATION
   
   Either party shall have the right to terminate this agreement for convenience at any time upon 30 days written notice served upon the other party by certified or registered mail with return receipt requested. In addition, either party may terminate this agreement immediately for cause upon written notice served upon the other party by registered or certified mail with return receipt requested.



3. DISCRIMINATION (BECAUSE OF RACE, COLOR, NATIONAL ORIGIN, SEX, AGE, or DISABILITY) PROHIBITED


1. The Second Party is to operate in accordance with the U.S. Department of Agriculture Policy, which prohibits discrimination on the basis of race, color, sex, age, religion, national origin, or disability. Also, the Second Party agrees to post in conspicuous places notices setting forth the provisions of this nondiscrimination clause and on program participant's application.



2. The Second Party agrees to comply with all applicable federal and state laws and regulations pertaining to the recognition and protection of the civil rights of persons to whom services are rendered and to applicants for such services during the performance of this contract.


4. DISCRIMINATION (BECAUSE OF HANDICAP) PROHIBITED



1. The Second Party agrees to comply with the provisions of Section 504 of the Rehabilitation Act of 1973, P.L. 93?112, and applicable federal regulations relating thereto prohibiting discrimination against otherwise qualified disabled individuals under any program or activity receiving federal assistance.



2. The Second Party agrees to comply with the provisions of the Americans with Disabilities Act of 1990, P.L. 101.336.


5. ACCESS TO AND MAINTENANCE OF RECORDS



1. The Second Party agrees that the EFO and/or the USDA, Kentucky Department of Agriculture, the Comptroller General of the United States and/or the Kentucky Auditor of Public Accounts, and/or any of their duly authorized representative or agents including independent auditors, shall have access to any books, documents, papers, and records of the Second Party which are directly pertinent to this contract for the purpose of making audit, examination, excerpts, and transcriptions. Information from these records shall be provided to authorized personnel only.



2. The Second Party agrees to maintain all records pertaining to this contract for a period of not less than (3) years plus current year after all matters pertaining to this contract (i.e., audit, settlement of audit exceptions, disputes,) are resolved in accordance with applicable federal and/or state laws, regulations, and policies (except as may otherwise be specified in this contract).



3. The Second Party agrees to permit staff of the EFO, persons acting for the EFO, and/or staff designated by appropriate federal and state agencies, to monitor and evaluate services being performed. The Second Party also agrees to submit all records and documentation of service provisions in regard to contract services when requested for monitoring purposes.


6. CONFLICT-OF-INTEREST LAWS AND PRINCIPLES
   
   The Second Party hereby certifies by his/her signature hereinafter that he/she is legally entitled to enter into the subject contract with the EFO and certifies that he/she is not and will not be violating either directly or indirectly any conflict of interest statute (KRS 45A.330-45A.340, 45A.990, 164.390, 210.110, 210.990 (1), or any other applicable statute) or principle by the performance of this contract.



7. CHOICE OF LAW AND FORUM PROVISION
   
   All questions as to the execution, validity, interpretation and performance of this Agreement shall be governed by the laws of the Commonwealth of Kentucky. Furthermore, the parties hereto agree that any legal action which is brought on the basis of this Agreement shall be filed in the Commonwealth of Kentucky.



8. CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION, LOWER TIER COVERED TRANSACTIONS:
   
   The Second Party hereby certifies the following by signing of this agreement:

1. That neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any federal department or agency.



2. The instructions for certification, which are an integral part of this certification, have been read and agreed to by the Second Party.