Compliance Investigations


  1. 1. Investigative Practices
  2. 2. Compliance Buys
  3. 3. Estimate the cost for conducting compliance buys, excluding expenses related to the vendor appeals/administrative review process:
  4. 4. Inventory Audits
  5. 5. Compliance Buy/Inventory Audit Tracking System(s)

1. Investigative Practices

  1. The State agency conducts:
    • Compliance buys (a covert, on-site investigation in which a representative of the Program poses as a participant, parent or caretaker of an infant or child participant, or proxy; transacts one or more food instruments; and does not reveal during the visit that he or she is a Program representative.) - Checked
    • Inventory audits (the examination of food invoices or other proofs of purchase to determine whether a vendor has purchased sufficient quantities of supplemental foods to provide participants the quantities specified on food instruments redeemed by the vendor during a given period of time.)
    • Not applicable (Proceed to the next section.)
  2. The following procedures are used to determine which vendors are selected for a compliance investigation (check all that apply):
    • Vendor is identified by the high-risk vendor identification criteria - Checked
    • Random selection - Checked
    • Geographical considerations - Checked
    • Volume of WIC redemptions - Checked
    • Participant complaints - Checked
    • Other (specify):
  3. The State agency uses standard procedures for conducting and documenting compliance buys and inventory audits:
    • Yes. If yes, please provide the guidelines in the Vendor Management Appendix or cite the Procedure Manual reference: This is the Ross Contract.
    • No
  4. The results of compliance investigations are used to assess the effectiveness of the State agency's high-risk vendor identification criteria:
    • Yes - Checked
    • No
    • If yes, check the items below that describe how the results of compliance investigations are used to assess the effectiveness of high-risk vendor identification criteria:
      • The State agency compares data on the prevalence of vendor violations detected among high-risk versus non-high-risk vendors. - Checked
      • The State agency discards a high-risk vendor identification criterion if compliance investigations of high-risk vendors identified by the criterion result in no vendor violations after ## months.
      • Investigative procedures and training are reevaluated if compliance investigations of high-risk vendors result in the detection of no vendor violations.
      • Other (specify):
  5. How many vendors were authorized as of October 1 of the past fiscal year?1881
    • How many vendors received compliance investigations during the past fiscal year? 112
    • How many vendors who received compliance investigations were high risk during the past fiscal year? 88
    • Did the State agency give priority to high-risk vendors (up to the five percent minimum) in conducting compliance investigations during the past fiscal year?
      • Yes  - Checked
      • No
    • How many of all vendors were high risk during the past fiscal year? 124
    • (The State agency is required by § 246.12(i)(4)(i) to conduct compliance investigations of at least 5 percent of its vendors authorized as of October 1 of each fiscal year, including all high risk vendors up to the 5 percent maximum.)

ADDITIONAL DETAIL: Vendor Management Appendix VMC 672.500,672.505, 672.510 and/or Procedure Manual (cite):

2. Compliance Buys

  1. The State agency conducts the following types of compliance buys:
    • Trafficking buys (exchanging food instruments for cash)  - Checked
    • Safe buys (transacting food instruments for all food items listed to see if the vendor will overcharge)  - Checked
    • Short buys (transacting food instruments for fewer food items than those listed to see if the vendor will charge for food items not received)  - Checked
    • Major substitution buys (exchanging food instruments for non-food items or unauthorized food items that are not similar to those listed)
    • Minor substitution buys (exchanging food instruments for unauthorized food items that are similar to those listed)
    • Other (specify):
  2. Compliance buys are usually conducted by:
    • WIC State agency staff
    • WIC local agency staff
    • State investigators  - Checked
    • Investigators retained on a contract basis (e.g., Pinkerton, Wells Fargo)  - Checked
    • Interns, neighborhood residents, or program participants employed by WIC
    • Another WIC State agency
    • Other (specify):
  3. Who is responsible for ensuring the proper execution of and follow-up on compliance buys:
    • WIC State agency vendor manager  - Checked
    • WIC local agency manager
    • State investigators
    • Contractor
    • Another WIC State agency
    • Other (specify):
  4. If no vendor violations are detected, how many compliance buys does the State agency conduct before closing a compliance investigation:
    • Two
    • Other (specify): 3
  5. If the State agency conducts a standard number of compliance buys per compliance investigation, what is the basis for the prescribed number of buys:
    • State law or regulation  - Checked
    • State agency policy or procedure
    • Level of evidence necessary to impose vendor sanctions
    • Legal counsel's advice  - Checked
    • Other (specify):
  6. The vendor is provided written notification of a violation requiring a pattern of violations in order to sanction the vendor, prior to documenting another violation of the same kind, unless the State agency determines that such notice would compromise the investigation:
    • Yes - Checked
    • No
  7. More than one compliance buy visit is needed to detect a pattern of violations:
    • Yes - Checked
    • No

ADDITIONAL DETAIL: Vendor Management Appendix and/or Procedure Manual (cite): Vendor Management Code, 672.505

3. Estimate the cost for conducting compliance buys, excluding expenses related to the vendor appeals/administrative review process:

$125.-$175 Cost per compliance buy

Unknown

Not applicable

ADDITIONAL DETAIL: Vendor Management Appendix and/or Procedure Manual (cite):

4. Inventory Audits

(If inventory audits are not performed, go to Question 5)

  1. a. The following factors are used to determine which vendors selected for compliance investigations will receive inventory audits rather than/or in addition to compliance buys:
    • Vendor has highest risk based on State agency's high-risk identification criteria
    • Suspicion of vendor exchanging cash for food instruments (trafficking)
    • Inconclusive compliance buy results
    • Complaints
    • Other (specify): Checking possible 50% vendors for proper reporting of Food Stamp eligible foods
  2. The State agency conducts the following types of inventory audits:
    • On-site inventory audits
    • State agency inventory audits (vendor sends records to State agency)  - Checked
    • Local agency inventory audits (vendor sends records to local agency)
    • Other (specify):
  3. Inventory audits are conducted by (check all that apply):
    • WIC State agency staff  - Checked
    • WIC local agency staff
    • State investigators
    • Investigators retained on a contract basis (e.g., Pinkerton's, Wells Fargo)
    • Other (specify):

ADDITIONAL DETAIL: Vendor Management Appendix and/or Procedure Manual (cite):

5. Compliance Buy/Inventory Audit Tracking System(s)

  1. The State agency has a means of recording and tracking staff person hours devoted to investigation activities:
    • Yes - Checked
    • No
    • Not applicable
  2. The State agency has an automated system for tracking investigations that monitors the progress and status of each compliance investigation:
    • Yes - Checked
    • No
    • Not applicable

ADDITIONAL DETAIL: Vendor Management Appendix and/or Procedure Manual (cite):