In the Matter of Whitney's Market WIC Vendor No. W7001.

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1996).

 STATE OF MINNESOTA

 IN COURT OF APPEALS

 C1-97-1215

In the Matter of Whitney's Market WIC Vendor No. W7001.

 Filed January 20, 1998

 Affirmed

 Lansing, Judge

Minnesota Department of Health

Agency File No. 12-0900-10987-2

Phillip S. Resnick, Scott J. Seiler, Resnick & Seiler, P.L.L.P., 1925 Rand Tower, 527 Marquette Avenue South, Minneapolis, MN 55402 (for relator Whitney's Market)

Hubert H. Humphrey III, Attorney General, Wendy Willson Legge, Assistant Attorney General, 525 Park Street, Suite 200, St. Paul, MN 55103 (for respondent Minnesota Department of Health)

Considered and decided by Lansing, Presiding Judge, Huspeni, Judge, and Willis, Judge.

 U N P U B L I S H E D O P I N I O N

 LANSING, Judge

The Minnesota Department of Health disqualified Whitney's Market as a vendor in a supplemental food program. Whitney's challenges the disqualification as based on an unlawful notice procedure and as unsupported by the record. Because the record supports the commissioner's decision and because the commissioner did not violate a federal or departmental notice rule in its disqualification process, we affirm.

 FACTS

Whitney's Market, Inc., was approved as a vendor for the Special Supplemental Food program for Women, Infants and Children (WIC) in 1992. As an approved vendor Whitney's is authorized to accept WIC vouchers as payment for specifically described foods. The authorization allows Whitney's to accept a voucher, enter the total price of the food purchase on the back of the voucher, and deposit it at its bank as if it were a check. The voucher is paid through WIC's authorized bank. Each approved vendor is required to sign a guarantee that obligates the vendor to comply with the WIC policies and procedures set out in federal regulations and state rules and the provisions of the guarantee.

In the summer of 1996 a WIC compliance specialist received a report that Whitney's was exchanging WIC vouchers for cash. The compliance specialist met with Whitney's owner and manager on August 1, 1996, and informed him that the department had received reports of violations. The compliance specialist cautioned the owner-manager that exchanging WIC vouchers for cash violated not only WIC rules but other laws and that vendors were allowed to provide only WIC-approved foods in exchange for the vouchers. The compliance specialist then went through a questionnaire with the owner-manager to ensure his understanding of the mandatory procedures. The responses to the questionnaire demonstrated that the owner-manager understood the WIC rules and regulations. After the meeting, the compliance specialist sent a follow-up letter to the owner-manager, reiterating the proper procedures and reminding him that any violations of the guarantee or applicable regulations would result in disqualification.

In September 1996 the Attorney General's office conducted a covert investigation to determine whether Whitney's was complying with WIC rules. In the first transaction, no WIC rule was violated. Following that transaction, the compliance specialist received a report or reports that Whitney's was exchanging unauthorized food for vouchers. In October and November 1996, the Attorney General's office conducted two covert transactions at Whitney's. In the October transactions, three of the five products purchased with the WIC vouchers were not WIC-approved foods. In the November transaction, four of the five products purchased were not WIC-approved foods. In both transactions the cashier failed to verify the signature on the voucher against the signature on the certification folder.

After further investigating Whitney's method of arriving at the total price entered on the voucher, the compliance specialist notified Whitney's that it was disqualified from WIC program participation for three years. The notification stated that Whitney's had violated WIC rules prohibiting exchanging nonauthorized food for vouchers, not checking the signature of a participant, and charging the WIC program for foods not provided to the customers. Whitney's requested a contested-case hearing. The ALJ determined that the department had proved its allegations of unauthorized food and unverified signature violations, but not the violation on charging for food not received. The ALJ also concluded that because the department failed to provide Whitney's with notice of the violations and an opportunity to correct the violations, the disqualification should be reversed.

The commissioner accepted the ALJ's findings on the violations for unauthorized food and unverified signatures. It further found that Whitney's had charged for items not provided and that Whitney's had adequate notice of the violations to impose a 36-month disqualification. Whitney's appeals the commissioner's decision.

 D E C I S I O N

The standard of judicial review in a contested administrative case is governed by Minn. Stat. § 14.69 (1996). Under this statute, a court may reverse or modify an agency's decision only if "substantial rights" of the parties have been prejudiced because of the agency's decision and the decision violates constitutional provisions, exceeds statutory authority or the agency's jurisdiction, is made using unlawful procedures, is affected by error of law or unsupported by substantial evidence, or is otherwise arbitrary or capricious. Id. An agency's decision has a presumption of correctness. Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977). We defer to the agency's factfinding process and consider only whether substantial evidence supports the agency's decision. Dokmo v. Independent Sch. Dist. No. 11, Anoka-Hennepin, 459 N.W.2d 671, 674-75 (Minn. 1990).

Whitney's makes two arguments for reversal on appeal: (1) that the department's disqualification is invalid because it violated the Code of Federal Regulations and its own rules by failing to notify Whitney's of an actual violation and to provide information on how to correct the violations before imposing sanctions; and (2) that the commissioner's finding that Whitney's charged WIC for food not received is unsupported by substantial evidence and cannot be relied on as a basis for disqualification.

 I

To support its argument that the federal regulations require a pre-sanction notice and opportunity to correct a violation, Whitney's cites 7 C.F.R. § 246.12(K)(I), which provides in pertinent part:

The State agency shall establish policies which determine the type and level of sanctions to be applied against food vendors, based upon the severity and nature of the Program violations observed, and such other factors as the State agency determines appropriate, such as whether the offenses represented vendor policy or whether they represented the actions of an individual employer who did not understand Program rules, and whether prior warning or an opportunity for correction was provided to the vendor.

7 C.F.R. § 246.12(K)(I) (1997). Contrary to Whitney's argument, this regulation does not require any prior warning or opportunity for correction. The regulation only requires the state agency to base its sanctions on the severity and nature of the violations observed and lists additional factors that are appropriate for agency consideration. But the regulation leaves the determination of other factors to the state agency.

The Minnesota disqualification rule, which Whitney's points to next, does not include any requirement of a pre-sanction notice or opportunity to correct. See Minn. R. 4617.0085 (1995). The only notice required by the disqualification rule is 15 days advance notice of disqualification. Minn. R. 4617.0085, subp. 1 (1995). It is undisputed that the department gave Whitney's 15 days advance notice of the disqualification.

Whitney's argues that the SONAR (Statement of Need and Reasonableness) provided as a basis for adopting the department's WIC rules should be enforced. The SONAR states: "Included in the notice is information regarding the evidence, the rule or policy and a statement that the vendor will be disqualified if the violation is not corrected." The department did not provide this specific notice to Whitney's.

In finding that Whitney's received adequate notice that it was violating WIC procedures, the commissioner relied on evidence that the compliance specialist (1) notified Whitney's she had received information that it had violated WIC rules, (2) ascertained at an in-person meeting that Whitney's understood the rules and detailed the importance of following all WIC rules and the consequences of violation, and (3) sent a follow-up letter reiterating the importance of following all WIC rules.

In addition to the reasons listed by the commissioner, we conclude that it is also significant that Whitney's had specific notice in the guarantee it signed that participation in the program could be terminated by any violation of the guarantee. Under the guarantee, Whitney's agreed to provide only the foods, amounts, and brands identified on each voucher being redeemed. The guarantee also required Whitney's to verify the signature of the person tendering the voucher by comparing it to a list of signatures of persons authorized to redeem the vouchers. The guarantee provided that the vendor is responsible for all actions of its employees in negotiating a voucher. The WIC rules, consistent with the guarantee, indicate that sanctions will be imposed for first offenses in the rules' differentiation between sanctions for a first offense and a subsequent offense. Minn. R. 4617.0085 (1995).

The department argues, and we recognize, that a SONAR is not a promulgated rule. See Minnesota Educ. Ass'n v. Minnesota State Bd. of Educ., 449 N.W.2d 846, 849 (Minn. App. 1993). But the SONAR is an integral part of the rulemaking process which is critical to providing interpretation of the rule. See Minnesota Chamber of Commerce v. Minnesota Pollution Control Agency, 469 N.W.2d 100, 104 (Minn. App. 1991), review denied (Minn. July 24, 1991) (agreeing with ALJ's determination that agency's SONAR commenting on the proprosed rule's impact supported conclusion that decision not arbitrary or capricious). The department should anticipate that a SONAR will be given weight in interpreting and applying rules.

On the facts of this case, however, we decline to apply the SONAR to reverse the disqualification for the following reasons: (1) the federal rules do not require the notice referred to in the SONAR; (2) the agency rule does not require the notice; (3) the guarantee that Whitney's Market signed specifically states that any violation will result in disqualification; (4) the guarantee is consistent with the rules providing different penalties for a first and second offense; (5) Whitney's did not demonstrate that it relied on the SONAR; and (6) the nature of the violations demonstrate that Whitney's knew that it was violating WIC rules by providing unauthorized food because the vouchers were manipulated to reflect the cost of the WIC-approved foods rather than the cost of nonapproved food that the customer received.

 II

The remaining issue raised by Whitney's relates to the commissioner's finding that Whitney's charged for products not received and charged prices in excess of the product cost. Whitney's argues, first, that the findings are unsupported by substantial evidence and, second, that relying on the excess charges in imposing a sanction is arbitrary and capricious.

Substantial evidence is interpreted to mean more than a scintilla of evidence or enough relevant evidence so that one with a reasonable mind would accept it as adequate to support the conclusion. Cable Communications Bd. v. Nor-West Cable Communications Partnership, 356 N.W.2d 658, 668 (Minn. 1984) (citing Reserve Mining, 256 N.W.2d at 825).

The commissioner found that Whitney's charged more in both covert transactions than the price of the foods received. The price difference was the excess between the price of the goods actually received and the goods that should have been received according to the voucher. The ALJ found that Whitney's had a policy of exchanging unauthorized foods for WIC vouchers and that its cashiers were trained to ring up the price of WIC-approved foods regardless of what the consumer actually received. The testimony and exhibits support these findings and the findings of the commissioner on that issue.

The rule governing disqualification states that a vendor who "charges the WIC program for foods not received by a participant" shall be disqualified. Minn. R. 4617.0085, subp. 2(C)(8) (1995). Although this provision more logically describes a transaction in which no food is received by the customer, its plain language also encompasses the transaction in which Whitney's substituted a WIC-approved product price for the unapproved product. The record adequately supports the commissioner's finding that Whitney's charged for WIC-approved foods that were not received. We note that the commissioner found that but for the 36-month maximum, Whitney's would have been disqualified for 90 months because of multiple violations. See Minn. R. 4617.0085, subp. 2 (1995). Thus, even if these violations were not considered, the 36-month disqualification would not change. For all these reasons, we conclude that the commissioner's decision to disqualify Whitney's from participation for 36 months was not arbitrary or capricious.

  Affirmed.