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FSA announces changes for issuance of program payments and loan proceedsKansas Bill R. Fuller, State Executive Director of the Kansas U.S. Department of Agriculture Farm Service Agency announced Dec. 10 that payment centralization has occurred which affects FSA payments and loan disbursements and repayments. There will no longer be any paper checks issued at a FSA county office. All program payments, commodity loan disbursements and facility loan disbursements will be issued by the Federal Reserve Bank through direct deposit electronic funds transfer or through the U.S. Treasury when a paper check is issued. FSA county offices will process all payments through the web-based National Payment System which will transmit the payment record to the Federal Reserve Bank or U.S. Treasury for processing. This new payment centralization will provide automated accounting initiatives to strengthen internal controls within FSA to mitigate the risk for erroneous payments. Producers shall be aware that there may be a delay in receiving payments or loan proceeds in certain situations. If the producer has a direct deposit on file and the payment does not need to be issued jointly, then the payment should be received in the producer's bank account within two days after the county office has electronically certified and signed the payment through NPS. When the payment needs to be issued jointly or a producer does not have a direct deposit on file, then a paper check would be issued through U.S. Treasury after the county office has electronically certified and signed the payment through NPS. Processing time is at least three days for U.S. Treasury to issue the paper check and an additional two to seven days for mailing, a total of five to 10 days for a paper check to be received. The county office can either request the paper check be sent directly to the producer or directly to the county office, depending on the situation. For example, if a lienholder on the commodity pledged for a marketing assistance commodity loan wants the loan proceeds made jointly to the producer and lien holder, the county office will electronically certify and sign the payment through NPS and then the U.S. Treasury will issue a paper check made jointly to the producer and lienholder. This check will be received in five to 10 days either by the producer or the county office, depending on what the FSA county office requested. In addition, when a producer is making a loan repayment, or a warehouse is making a loan repayment on commodity delivered under a CCC-681-1, Authorization for Delivery of Loan Collateral for Sale, the payment needs to be the exact amount needed to repay quantity involved in the repayment. It is important that producers and warehouses communicate with the applicable FSA county office before a loan is repaid to ensure the correct amount is submitted. If you have any questions, contact your local FSA county office at the USDA Service Center. USDA is an equal opportunity employer and provider. 12/22/08 Date: 12/18/08
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