• The department examines business integrity prior to authorizing WIC vendors. This may include a review of lease and purchase records to ensure that a business was acquired in good faith. In an effort to evade or circumvent an existing WIC or SNAP sanction, a vendor may transfer ownership of a business for inadequate consideration and through cash transactions that are difficult to verify or trace. The department therefore proposes to promulgate rules to only authorize vendors that can demonstrate the business was purchased in good faith with a verifiable form of payment.
• The department conducts audits of WIC vendors to detect fraud, waste, and abuse, and to meet federal program integrity standards. Audits may include a review of documentation to verify that a vendor had the inventory of authorized foods for which it received reimbursement by the WIC program. Invoices indicating that a vendor purchased authorized foods with cash cannot be adequately verified and present a significant opportunity for fraud. The department therefore proposes to establish rules that require WIC vendors to use verifiable forms of payment for WIC purchases reimbursed by the WIC program.
• Section DHS 149.08 requires vendors to maintain “inventory and accounting records.” These records may be reviewed in the course of audits intended to detect and prevent fraud, waste, and abuse. The department proposes to promulgate rules defining inventory and accounting records in order to provide greater clarity to WIC vendors about minimum documentation requirements for participation in the program. • Chapter DHS 149 has not been substantially revised since July 1, 2008. The department proposes to update, correct, or clarify any outdated provisions in order to reflect current definitions, standards, and best practices. There is no reasonable alternative to the proposed rulemaking. The current rule contains outdated provisions that do not reflect current operational and integrity standards for the program.
4. Detailed explanation of statutory authority for the rule (including the statutory citation and language):
The Wisconsin State Legislature explicitly directed the department to promulgate rules governing WIC in the following statutory section:
(a) The department shall promulgate rules to establish all of the following:
1. Minimum qualification standards for the authorization of vendors and for the awarding of a contract to an entity under sub. (3m). 2. Standards of operation for authorized vendors and food distribution centers, including prohibited practices.
3. Minimum requirements for participants, including prohibited practices.
4. Procedures for approving or denying an application to be a participant, including appeal procedures.
5. Estimate of amount of time that state employees will spend developing the rule and of other resources necessary to develop the rule:
The department estimates that it will take approximately 600 hours to develop the proposed rule changes. This includes the time required for research and analysis, coordinating an advisory committee, rule drafting, preparing any related documents, holding a public hearing, and communicating with affected persons and groups.
6. List with description of all entities that may be affected by the proposed rule:
The department or designated WIC State Agency, WIC vendors, and WIC vendor applicants.
7. Summary and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
On July 13, 2016, Title 7 CFR Part 246 was amended to require implementation of EBT in the WIC program by October 2020. The department proposes to conform ch. DHS 149 to federal requirements and guidance. 8. Anticipated economic impact of implementing the rule:
The proposed rule is anticipated to have little to no economic impact if promulgated.
Contact Person:
Carrie Coenen
(608) 267-9744
