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Agency Information Collection Activities: Proposed Collection; Comment Request-Supplemental Nutrition Assistance Program: Federal Financial Report (FNS-778) and Financial Status Report Addendum (FNS-778A)

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Food and Nutrition Service, USDA.




In accordance with the Paperwork Reduction Act of 1995, the Food and Nutrition Service (FNS) is publishing for public comment, a summary of a proposed information collection. The collection establishes a new financial report that will replace the SF-269 (Food Stamp) report currently used by State agencies to report expenditures in the Supplemental Nutrition Assistance Program (formerly the Food Stamp Program).


Written comments must be received on or before June 2, 2009.


Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments may be sent to Jane Duffield, Chief, State Administration Branch, Supplemental Nutrition Assistance Program, Food and Nutrition Service, USDA, 3101 Park Center Drive, Room 818, Alexandria, VA 22302. Comments may also be submitted via fax to the attention of Ms. Duffield at 703-605-0795 or via e-mail to Comments will also be accepted through the Federal eRulemaking Portal. Go to and follow the online instructions for submitting comments electronically.

All written comments will be open for public inspection at the office of the Food and Nutrition Service during regular business hours (8:30 a.m. to 5 p.m. Monday through Friday) at 3101 Park Center Drive, Room 818, Alexandria, Virginia 22302.

All responses to this notice will be summarized and included in the request for Office of Management and Budget approval. All comments will become a matter of public record.

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Requests for additional information or copies of this information collection should be directed to Jane Duffield at (703) 605-4385.

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Title: Supplemental Nutrition Assistance Program: Federal Financial Report Forms.

OMB Number: Not Yet Assigned.

Expiration Date: Not Yet Determined.

Type of Request: New collection.

Abstract: Section 16(a) of the Food and Nutrition Act of 2008 (the Act) (7 U.S.C. 2011 et seq.) authorizes the Secretary to pay each State agency an amount equal to 50 percent of most allowable administrative costs involved in each State agency's operation of the Supplemental Nutrition Assistance Start Printed Page 15241Program (SNAP) (formerly known as the Food Stamp Program). In fiscal year 2007, FNS paid State agencies $2.8 billion in reimbursement for their SNAP administrative costs. Under corresponding SNAP regulations at 7 CFR 277.11(c), State agencies are required to use the standard Financial Status Report (Form SF-269) on a quarterly basis to report program administrative costs to FNS and to support the claims made for Federal funding. Since 1980, the SNAP has used a program-specific SF-269 variant approved by the Office of Management and Budget (OMB) that captures total SNAP administrative costs and subdivides it into 26 functional categories. In 1988, OMB published a new version of the SF-269 that captures only total program costs. The continued use of the program-specific variant since then thus represents an exception to the general rule approved by OMB.

The requirement to use the SF-269 for financial reporting originated in OMB Circular A-102 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments). However, on December 7, 2007, OMB published a Federal Register Notice announcing the promulgation of a new Federal Financial Report (FFR) and directing Federal grant-making agencies to begin requiring their grantees to use it not later than September 30, 2008 (72 FR 69248). Subsequently, on August 13, 2008, OMB published a Notice which requires Federal agencies to transition to the new form no later than October 1, 2009. The new FFR would replace the SF-269, other standard forms, and agency-specific and program-specific financial reports.

While OMB adopted the new FFR in order to standardize and streamline the financial reporting on Federal grants and agreements, the new form cannot meet the needs of a program as complex as SNAP. This is because:

1. SNAP consists of numerous functions and components for which financial data is needed in order for FNS to maintain a high level of program integrity and accountability. All such functions are required by SNAP regulations. FNS uses the reported data to monitor the actual cost of each function against budgeted amounts approved for each State agency. Many of these functions also have a component in the State Plan. Where the SF-269 currently used for SNAP financial reporting captures financial data on 26 FSP functions, the new FFR captures only total program costs. Examples of needs that cannot be met with capturing only total program costs include:

a. Certification. A disproportionate share of total SNAP administrative funding supports the cost of certifying households eligible for SNAP benefits. Being the largest category in SNAP, changes in certification activity and caseload can easily impact both certification and total costs, both in the aggregate and in the cost per case. This function is also affected by a funding reduction under section 16(k) of the Act for common costs allocable to the SNAP but built into States' block grants under the Temporary Assistance to Needy Families (TANF) Program. FNS monitors to ensure that the offset occurred in full. Changes in certification costs and monitoring the offset would be lost in the total costs data captured by the new FFR.

b. Nutrition Education. This area of the program has seen a dramatic increase in terms of activity and costs in recent years. The goal of SNAP-Ed is to improve the likelihood that persons eligible for SNAP will make healthy food choices within a limited budget and choose physically active lifestyles consistent with the current Dietary Guidelines for Americans and MyPyramid. State agencies submit a SNAP-Ed plan to FNS for approval each year and FNS monitors the costs against the budget and approved plan activities. The SF-269 collection of the costs of this vital and increasing activity is necessary for program accountability and management. It would be buried in the total costs data captured by the new FFR.

c. Fraud Control. The Food and Nutrition Act authorizes FNS to pay the costs of State SNAP investigations and prosecutions. States agencies are required to investigate any allegation of a suspected intentional program violation by recipients and refer the positive cases for administrative hearings or prosecution which can lead to disqualification of the recipient. The SF-269 reporting for this functional category allows FNS to track and monitor these State costs for Federal reimbursement.

d. For the sake of brevity, we will not go into every functional component. However, we should note that many of the cost components are tied to individual State Plans. They are also tied to the FNS-366A, Budget Projection, which uses the same cost categories as the SF-269.

2. Costs incurred by State agencies to conduct some SNAP functions are reimbursed at rates other than the standard 50 percent rate. For example FNS reimburses 100 percent of the costs of administering the program's Employment and Training (E&T) component, up to a stated ceiling. E&T administrative costs beyond that ceiling are reimbursed at 50 percent, and some E&T cost items are ineligible for 100 percent reimbursement altogether. To monitor State agencies' compliance with these requirements, FNS must collect data on State agencies' costs of both 100 percent and 50 percent E&T activity. However, these distinctions would be lost in the total cost data captured by the new FFR.

3. Since the costs of most SNAP functions are reimbursed at the 50 percent rate, FNS must capture data on costs supported by resources from within each State. That is, FNS must ensure that each State agency has met its matching requirement.

The options available to FNS are limited. They include:

Option 1: Instructing State agencies to shift to the new FFR.

Adopting this option would require a sweeping re-tooling of FNS and State agency information technology (IT) systems to accommodate the new format. FNS recognizes that the re-tooling is inevitable because Federal awarding agencies and their grantees will begin using the new FFR for financial reporting on most Federal programs. As already noted, however, the new FFR may be satisfactory for discretionary project and research grants where only total program costs are meaningful, but it cannot meet the needs of SNAP. The only way FNS could obtain the data needed for SNAP monitoring and oversight would be to require each State agency to submit one FFR covering SNAP's total administrative costs and another FFR on each component/function (26 in all). Such a procedure would be expensive to implement and burdensome for State agencies to comply with. The data gathered, thereby, would also be misleading; each SNAP function would be reported as if it were a discrete categorical program. A State agency would end up submitting 26 FFRs under the same grant agreement.

Option 2: Capturing total SNAP administrative costs on the new FFR and devising an addendum to capture the subset applicable to each function/component.

This option would enable FNS to acquire the data needed for SNAP monitoring and oversight without requiring State agencies to submit a separate FFR on each function. While it would be less burdensome in that regard, this option would, nonetheless, suffer from other drawbacks of Option 1. Specifically, it would also require the massive IT re-tooling. In addition, it would entail extensive developmental Start Printed Page 15242work to create an addendum, obtain authorization to use it, publish it, train State officials on its use, and construct the electronic programming to capture, analyze, and store the data. Since the data themselves would be substantially the same as those currently collected, FNS believes that re-arranging the data solely for the sake of change would not add value.

Option 3: Retaining the existing reporting requirement.

This option would entail retaining the content of the SF-269 currently used for SNAP financial reporting, but would require FNS to recast that document as an FNS form rather than a government-wide standard form. It would have the advantages of the other options without their drawbacks. Specifically, it would require little change to FNS and State IT systems and no change in the data themselves. It would minimize disruption to State agencies, since they could continue using the SNAP financial reporting format to which they are accustomed. For these reasons, FNS has decided to adopt Option 3.

Accordingly, FNS is proposing to establish a new program-specific financial reporting form that would continue to collect the same data in the same sequence as the SF-269 currently used in SNAP. FNS use of the SF-269 (FS) for SNAP is currently approved under OMB Control No. 0348-0039, but that information collection authorization is expected to be eliminated government-wide. Therefore, FNS is proposing to assign the current SF-269 (FS) report for SNAP a new FNS form number and to put the new program-specific form into a new information collection package. The new form would look nearly identical to the current SF-269 (FS) except for the new FNS form number and OMB control number. These Federal changes for SNAP would not affect State agencies data collection and reporting, or FNS' automated system's budget and cost analysis. States would report on the new form which would essentially retain the current line items, cost categories, and data sequence but will have a new form number. We should note that four categories have been removed from the form because they are obsolete (coupon issuance, 75% fraud, 75% ADP development, and 63% ADP development). FNS proposes to seek OMB approval of the new financial reporting form and new information collection package as an exception to the FFR.

The Financial Status Report Addendum (SF-269A (FS)) is used by State agencies for quarterly reporting of program cash-out benefits where FNS has approved the issuance of checks or electronic cash payments in lieu of electronic benefit transfer (EBT) benefits. This program benefit report also is a program-specific form approved by OMB. Final reports are due December 30 for the preceding Federal fiscal year. As with the expenditure report for administrative costs, FNS is proposing to give the program benefit expenditure report a new FNS form number while keeping the current line items and one program benefit cost category on that report. We believe the consistency between the line items in the two financial reports (for administrative costs and for program benefits) would avoid confusion and would continue to promote standardization between the two forms within the State for SNAP. The new form would look nearly identical to the current program specific SF-269A (FS) used by SNAP, except for the new FNS form number.

Copies of the proposed new FNS-778, Financial Status Report, and FNS-778A, Financial Status Report Addendum, are displayed at the end of this notice.

Currently, the program regulations at 7 CFR 277.11(c) specifically mention the use of the “standard Financial Status Report (Form SF-269) to report program costs.” Since the new forms will report the same line items and cost categories as their predecessors and accomplish the same purpose as the SF-269 (FS) and SF-269(A) (FS) for SNAP, FNS is planning to do a final rule to make a nomenclature change to the current regulations to refer to the new forms. Thus, 7 CFR 277.11(c) will then read “State agencies shall use the Form FNS-778 to report program costs.” The final rule will go on to change the other references to the SF-269 in 277.11(c) and (d) to conform to the new form FNS-778. That change will be made via a final rule, will be on a separate track and will not delay the changeover to the new form under the Paperwork Reduction Act provisions.

FNS plans to extend the use of the current SF-269 (FS) and SF-269A (FS) through the end of the Fiscal Year 2009 reporting cycle. That is, the last reports submitted in the old format will be the final reports on State agencies' Fiscal Year 2009 awards; these reports will be due December 30, 2009. Use of the new reports FNS-778 and FNS-778A will begin with financial reporting for Fiscal Year 2010. As with the current financial reports, the new financial status reports will be due 30 days after the end of the calendar quarters to which they pertain, and a final report will be due 90 days after the end of the fiscal year. Thus, the first reports using the new FNS-778 and FNS-778A will be due January 30, 2010, and the final reports for that fiscal year will be due December 30, 2010.

State agencies should continue to use the old form that was in use for a prior year to amend reports for that prior year. State agencies may amend a prior year report in FNS' Food Programs Reporting System (FPRS).

Respondents: State agencies that administer SNAP.

Number of Respondents: 53.

Estimated Number of Responses per Respondent:

Financial Status Report (FNS-778): 53 State agencies averaging 5 responses per respondent for the current fiscal year and an estimated 3 responses per year for prior year adjustments and corrections (if needed).

Estimated Total Annual Responses (FNS-778): 424.

Financial Status Report Addendum (FNS-778A): 7 State agencies averaging 5 responses per respondent.

Estimated Total Annual Responses (FNS-778A): 35.

Estimated Total Annual Burden on Respondents: 4,646.

The State agencies submit the financial status report (FNS-778) for the current year for administrative costs at an estimate of 16.8 hours per respondent, or 4,452 total hours. The 53 State agencies submit revised expenditure reports on the FNS-778 (for prior years) for which we estimate 1 hour per respondent for an additional 159 hours annually. The use of the electronic system will minimize the burden to State agencies for a revised report. Seven (7) State agencies will submit the FNS-778A which is estimated at 1 hour per respondent or a total of 35 hours annually.

Affected publicFormsNumber of respondentsFrequency of responseTotal annual responsesTime per response (hrs)Annual burden hours
State AgenciesFNS-778 (Initial Submission)53526516.84,452.00
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FNS-778 (for 2-year revisions)5331591159.00
Total Burden Estimates534594,646.00
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Dated: March 31, 2009.

E. Enrique Gomez,

Acting Administrator, Food and Nutrition Service.

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[FR Doc. E9-7509 Filed 4-2-09; 8:45 am]