The Department has systems to detect vendors who abuse or defraud the program. These systems identify vendors who, through misinformation or lack of training, may intentionally or unintentionally violate federal regulations, program policies, procedures, or the terms of the vendor agreement. Per federal regulations, vendors are accountable for employees' actions in accepting eWIC cards within their stores.
The Department shall determine the type and level of action to be applied against vendors following the rules outlined in Subpart E of the Ill. Adm. Code 672. The program's objectives can best be met through education, training, and the voluntary cooperation of vendors, participants, and the state and local WIC programs.
To ensure the program's integrity, it is necessary to impose corrective actions and sanctions consistently against vendors who violate federal regulations and program policies and procedures. Several types of actions may be applied:
- Administrative Warning Letter
- Monetary Fines
- Probationary Status
- One Year Disqualification
- Two Year Disqualification
- Three Year Disqualification
- Permanent Disqualification
- Civil Money Penalty (CMP) sanction may be imposed if the program determines disqualification would result in inadequate participant access.
A. Vendor Fraud/Abuse
A vendor who defrauds or abuses the WIC Program is liable to prosecution under applicable federal and state laws. Vendors who have willfully misapplied, stolen, or fraudulently obtained program funds shall be subject to a fine of not more than $25,000 or imprisonment for not more than five years, or both if the value of the funds is $100 or more. If the value is less than $100.00, the penalties are a fine of not more than $1,000.00 or imprisonment for not more than one (1) year or both. The WIC Fraud and Abuse Act (720 ILCS 5/17B-1 et seq.) also sanctions WIC fraud and abuse.
B. Federal Violations, Sanctions, and Disqualification
Federally Mandated Vendor Sanctions are defined in 7 CFR Part 246.12. They are imposed in response to flagrant violations of program policies.
- The program does not have to provide the vendor with a prior warning that violations occurred before imposing any of the sanctions described.
- A pattern of violations does not need to be present when applying for a permanent disqualification.
- Those violations identified as requiring a pattern are assigned sanctions based upon at least two independent documented violations during any compliance buy investigation. A pattern can be established during a single review of the vendor's redemption records when conducting inventory audits. It depends on the magnitude of shortfalls and the period over which they occur.
