5000 Claims And Losses

USDA requires states to be accountable for all commodities received through TEFAP and to take appropriate food replacement or claim and collection action in certain situations.

SRS, all participating organizations, warehousemen, food processors, carriers and other persons are subject to a claim determination and the corresponding repayment responsibility as a result of the following:

1. Improper distribution or use of donated foods.
   
   
2. Loss of USDA-donated foods which is caused by neglect, carelessness, and/or willful mishandling. ("Loss" means any quantity of USDA-donated commodities that are unaccounted for or which have become unusable for human consumption.)
   
   
3. Damage to USDA-donated foods which is caused by neglect, carelessness and/or willful mishandling.
   
   

NOTE: Anytime it is discovered or reported that a situation has occurred involving (1), (2), or (3) above, the procedures outlined in Section 3300 are to be followed, with the exception that ANY quantity of USDA food which is unaccounted for must be reported to the Regional Director.

Commodity loss claims may be resolved one of three ways. The organization may: 1) replace the commodities, 2) replace the commodities with similar food with SRS approval, or 3) repay SRS the full USDA value of the loss.

5100 Establishing Claims

A claim is any demand (or basis of a demand) for money or for replacement of a lost or improperly distributed/used commodity. Once the Food Distribution Unit has received all information regarding situations requiring claim action, a claim determination will be made in order to decide the existence or nonexistence of a liability. If it is determined that a claim is necessary, the Food Distribution Unit will do the following:

1. Determine the dollar value of the products involved based upon the USDA replacement cost at the time of the loss or discovery of the loss;
   
   
2. Determine the liable party(s);
   
   
3. Where appropriate, make three formal written demands for repayment or replacement; and/or
   
   
4. Take legal action for recovery.
   

5200 Right To File Claims

1. USDA may assert claims against liable TEFAP participating states.
   
   
2. States may assert claims against liable carriers, warehousemen, processors, participating organizations, or other persons to whom donated foods are delivered. States are required to take appropriate collection actions in order to obtain restitution where liability is involved.
   
   
3. Participating organizations have the right to assert claims. An organization may assert a claim in the event a loss or inappropriate use or distribution of USDA foods has occurred. Such claims may be established against persons or companies with whom the organization has placed the responsibility for care, handling, or distribution of USDA foods (i.e., employees, volunteers, storage facilities, etc.).

Organizations shall always have the right to pursue restitution through appropriate legal channels in addition to claims action taken through this program.