1. A. Purpose and Terminology
  2. B. Policies and Procedures
  3. C. Allowable/Unallowable Costs
  4. D. Technical Assistance

A. Purpose and Terminology

The Hunger Relief Tax Check-Off Program offers grants to existing Foodbanks, funded under the Emergency Food Program, to purchase food for distribution to needy households and related supplies (see the Emergency Food Program section of the Program Manual for details). The Hunger Relief Tax Check-Off Program works to supplement the food distributed through the Emergency Food Program (EFP) and supports the Department's mission to provide an emergency response to hunger and to increase food security for low-income households and individuals residing in Illinois. Funding is made available through a designated fund in the State Treasury which allows Illinois residents to make voluntary contributions to the fund while filing their state income taxes. Funding for this program is limited and may not be available on an annual basis. When funds are available, grant amounts are determined by the same federally-approved formula used in the EFP, which is based upon 60% of the people in poverty and 40% of the unemployed people in each contracted Foodbank's geographic service area relative to those figures for the entire State of Illinois. Issuance of award amounts is subject to DHS approval of Foodbank proposals establishing how funding will be utilized for program implementation during the fiscal year and the food distribution methodology to be employed. The following terminology is used in the Hunger Relief Tax Check-Off Program:

Distribution Site - Location where the eligible recipient agency actually distributes commodities to needy persons for household consumption or serves prepared meals to needy persons. May be a pantry, soup kitchen or homeless shelter.

EFP - Emergency Food Program - State-level abbreviation for the Federal program name TEFAP (The Emergency Food Assistance Program).

Foodbank - A not for profit public or charitable institution or organization that maintains an established operation involving the provision of food or edible commodities, or the products of food or edible commodities, to food pantries, soup kitchens, homeless shelters, or other food or feeding centers that, as an integral part of their normal activities, provide meals or food to feed needy persons on a regular basis.

Food Pantry - A public or private non-profit organization that distributes food to eligible families or individuals, including food from other non-government sources.

Fiscal Year -  A twelve-month period used for accounting and reporting purposes.

SFY - The State Fiscal Year (SFY), from July 1 to June 30.

Homeless Shelter - A facility that provides temporary residence and at least one meal a day to homeless people for a period not to exceed 24 months.

Household -  A group of related or non-related individuals living as one economic unit who buy and cook food together. It also means a single individual living alone.

Non-Discrimination - A State and Federally-mandated policy which prohibits discrimination at all levels of food distribution on the basis of race, color, national origin, sex, age, or disability.

Soup Kitchen - A public or charitable organization that maintains an established feeding operation to provide food to needy homeless persons on a regular basis, without charge.

B. Policies and Procedures

  1. Funding: All funding under this program is limited to current Emergency Food Program (EFP) providers (i.e., contracted Foodbanks). Program availability is limited to donations collected by way of a designated fund in the State Treasury that allows Illinois residents to make voluntary contributions to the fund while filing their state income taxes. The funds must be obligated by the end of the agreement period and expended by the end of the lapse period. When funds are available, grant amounts are determined by the same federally-approved formula used in the EFP, which is based upon 60% of the people in poverty and 40% of the unemployed people in each contracted Foodbank's geographic service area relative to those figures for the entire State of Illinois. Issuance of funding is subject to DHS approval of Foodbank proposals establishing how funding will be utilized for program implementation during the fiscal year and the food distribution methodology to be employed.
  2. Funding Proposal: Funding for the Hunger Relief Tax Check-Off Program is limited and may not be available on an annual basis. When funds are available, a notice is issued to current providers (i.e., contracted Foodbanks). Current providers are required to submit funding proposals and budgets establishing how funding will be utilized for program implementation during the fiscal year and the food distribution methodology to be employed. Provider proposals and budgets require DHS approval prior to the issuance of funding.
  3. 501(c)(3): If the provider is not a governmental entity, the provider must be a federally tax exempt, non-profit agency legally authorized to operate in the State of Illinois with a Not-for-Profit Corporation Charter from the Illinois Secretary of State and verification from the Internal Revenue Service of exemption from federal income tax liability under the applicable Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code. Each provider must submit documentation of not-for-profit status and their 501(c)(3) status. Each provider must certify that it complies with all provisions of the Federal Internal Revenue Code, the Illinois Revenue Act, and all rules promulgated thereunder, including withholding provisions and timely deposits of employee taxes and unemployment insurance taxes. Also, an annual report must be on file with the Secretary of State that the provider is a not-for-profit provider. This report will be sent, by the Secretary of State, to each provider's registered agent 45 to 60 days in advance of the date of the provider's incorporation. A provider can contact the Secretary of State, Office/Annual Report Section at (217) 782-6961 with any questions or conflict resolutions.
  4. Records: The provider must maintain written policies and procedures regarding its fiscal activities, including but not limited to, payroll, purchasing, cash management, relevant fee schedules, contracts and risk management. The provider must submit and have on file a copy of their Annual Report to the Internal Revenue Service Form 990 and an Annual Report to the Attorney General Form AG 990. The provider must show proof that its governing body has approved a budget at least annually. All fiscal records are to be maintained for at least five years after the end of the fiscal year to which they relate. Failure to maintain adequate records to document the expenditure of IDHS funds creates a presumption in favor of the Department for recovery of the funds. The provider must have on file the by-laws, policies and procedures and a current organization chart. The provider must maintain policies concerning the hiring, termination, evaluation and discipline of staff. Also, the provider must have policies on non-discrimination in hiring, employment, sexual harassment as well as written job descriptions of employee's duties and responsibilities.
  5. Fiscal Audits: If deemed necessary, a program and fiscal audit will be conducted by the IDHS Office of Contract Administration.
  6. Match Requirements: The Hunger Relief Tax Check-Off Program does not require a match of funds.
  7. Recovery: The Office of Contract Administration (OCA) is responsible for financial reconciliation and financial recovery of unspent funds. As part of the funds recovery procedure, the Office of Contract Administration will send to each provider an "Informal Notice" letter containing the state fiscal year, the provider's name, and FEIN number and the amount of IDHS funds provided to each provider. The letter will also include a Grant Reconciliation Report to be completed by each provider. The provider will have fifteen days from the receipt of the informal notice to request, in writing, an informal hearing on lapsed funds or a plan of correction dealing with other violations. If the informal hearing does not result in a resolution of the lapsed funds, a "Formal Notice to Recover Lapsed Funds" letter will be sent by registered mail to the provider. The provider will then have thirty-five days to request, in writing, a Formal Hearing. At the end of thirty-five days, if no request has been received, the OCA may proceed to recover the amount of funds. If the provider does not have an upcoming fiscal year contract from which to deduct the lapsed funds owed, the Bureau of Collections will establish a collection amount in the name of the provider. The Bureau of Collections will generate an invoice and mail it to the provider for payment. The provider will then receive monthly billing statements. The debt may also be referred by the IDHS to the Attorney General's Office if the debt remains unpaid for one year.
  8. Program Payments: Upon approval of a program proposal and budget, providers will receive a prospective payment as prescribed by the Department. Receipt of funds, food purchases, and any approved distribution and handling costs will be verified by on-site field monitoring.
  9. Provider Responsibilities: Hunger Relief Tax Check-Off Program providers must maintain accurate fiscal records, including ledgers, receipts, invoices and food purchase orders, to verify the dollar amounts, quantities and types of food items purchased. Providers must also maintain accurate fiscal records for any allowable and approved distribution and handling costs (i.e., fuel, freight, warehousing costs) directly associated with the storage, handling and distribution of food purchased with Hunger Relief Tax Check-Off funding. Providers are required to maintain inventory and distribution records verifying the methodology used to distribute the food purchased with Hunger Relief Tax Check-Off funding. Compliance with all documentation requirements will be verified by on-site field monitoring. A Hunger Relief Tax Check-Off Program close-out report is required to be submitted by providers by the end of the agreement period in which funding is available. The close-out report must include, at a minimum, a description of approved food purchases (dollar amounts, quantities and types), any approved distribution and handling costs, the food distribution methodology and a listing of participating distribution sites.

C. Allowable/Unallowable Costs

In accordance with State legislation for the Hunger Relief Tax Check-Off Program, allowable expenditures are limited to the purchase of food for distribution to needy households and related supplies. Expenditures must be reasonable and appropriate and must be reported at the price actually paid. Documentation must be maintained to substantiate all Hunger Relief Tax Check-Off Program expenditures.

Allowable Costs:

  1. Food Purchase: Nutritional food items purchased in bulk by contracted EFP Foodbanks for distribution to households in need.
  2. Distribution & Handling Costs: Distribution and handling costs (i.e., fuel, freight, warehousing costs) directly associated with the storage, handling and distribution of food purchased with Hunger Relief Tax Check-Off Funds.

Unallowable Costs: Anything other than what is outlined above is deemed unallowable.

If a provider has any doubt about whether or not a certain expenditure is allowable, they should contact the Department.

D. Technical Assistance

DHS is available to advise the provider, if needed, on the policy and procedures of the program.