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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Pass-Through Activity

Notes to SEFA
Note 6 – Rebates from the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

Agencies that participate in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) ALN 10.557 are required to operate a continuous cost containment system for infant formula (7 Code of Federal Regulations [CFR] 246.16a [a]).

Competitive single-supplier rebate contracts with infant formula manufacturers are authorized under 7 CFR 246.16a (c) as a cost containment method. According to the most current Compliance Supplement – 2 CFR Part 200 Appendix XI, 4-10.557, II, paragraph F. Cost Containment Requirements, the most successful strategy for cost containment has been the negotiation of competitive rebate contracts between state agencies and infant formula companies.

Use the Schedule of Expenditures of Federal Awards (SEFA) Note 6 to disclose rebates received from ALN 10.557.

Sample Disclosure Statement for SEFA Note 6: Rebates from the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

During the fiscal year ended Aug. 31, 20CY, the [Agency Name] received cash rebates from infant formula manufacturers in the amount of $________ on sales of formula to participants in the WIC program (ALN 10.557). Rebate contracts with infant formula manufacturers are authorized by 7 CFR  246.16a (c) as a cost containment measure. Rebates represent a reduction of expenditures previously incurred for WIC food benefit costs. Applying the rebates received to such costs enabled the [Agency Name] to extend program benefits to more participants than could have been serviced this fiscal year in the absence of the rebate contract.