national association of credit specialists of...

NATIONAL ASSOCIATION OF CREDIT SPECIALISTS

OF THE FARM SERVICE AGENCY

A FEDERAL MANAGERS ASSOCIATION CONFERENCE

ANNUAL REPORT 2004 - 2005 ANNUAL CONVENTION

JUNE 27-29, 2005

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TABLE OF CONTENTS

OFFICERS & BOARD OF DIRECTORS _________________________________________3 ZONE REPRESENTATIVES 2004 / 2005 _______________________________________4 FARM LOAN PROGRAMS COMMITTEE ________________________________________5 FARM PROGRAMS COMMITTEE_____________________________________________6 INFORMATION TECHNOLOGY COMMITTEE _____________________________________7 MANAGEMENT PERSONNEL COMMITTEE______________________________________8 LEGISLATIVE ISSUES COMMITTEE ___________________________________________9 MEMBERSHIP COMMITTEE _______________________________________________10

NACS OFFICER REPORTS _____________________________________________11

PRESIDENT'S REPORT ______________________________________________12 VICE PRESIDENT'S REPORT __________________________________________14 SECRETARY'S REPORT______________________________________________16 PAST PRESIDENT’S REPORT _________________________________________17

TREASURER’S REPORTS______________________________________________18

TREASURER'S ANNUAL REPORT ______________________________________19 2005 NACS MEMBERSHIP SUMMARY___________________________________20 NET WORTH STATEMENT________________________________________________21 BUDGET REPORT JAN-DEC 2004 ______________________________________22 BUDGET REPORT AS OF 6/10/05_______________________________________23 CASH FLOW REPORT________________________________________________24 2005 WUNDER FUND ACTIVITY REPORT ________________________________25

ZONE REPRESENTATIVES REPORTS ___________________________________26

ZONE A ANNUAL REPORT ____________________________________________27 ZONE B ANNUAL REPORT ____________________________________________28 ZONE C ANNUAL REPORT ____________________________________________30 ZONE D ANNUAL REPORT ____________________________________________32

COMMITTEE REPORTS________________________________________________34

FARM LOAN PROGRAM COMMITTEE ___________________________________35 FARM LOAN PROGRAM COMMITTEE RESOLUTIONS____________________36

FARM PROGRAMS COMMITTEE _______________________________________51 FARM PROGRAMS COMMITTEE RESOLUTIONS ________________________52

INFORMATION TECHNOLOGY COMMITTEE _____________________________58 INFORMATION TECHNOLOGY COMMITTEE RESOLUTIONS ______________60

MANAGEMENT/PERSONNEL COMMITTEE ______________________________72 MANAGEMENT/PERSONNEL RESOLUTIONS___________________________73 OTHER TOPICS FOR DISCUSSION ___________________________________82

LEGISLATIVE ISSUES COMMITTEE ____________________________________86 LEGISLATIVE ISSUES April 2005 _____________________________________89 FEDERAL MANAGERS ASSOCIATION 2005 ISSUES AGENDA _____________91

2004 ANNUAL CONVENTION IN LOUISVILLE KENTUCKY ___________________93

JUNE 13, 2004 BOARD MEETING _______________________________________94 NACS-FSA ANNUAL MEETING – JUNE 14, 2004 ___________________________97 AUDIT COMMITTEE REPORT_________________________________________114

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AUDIT COMMITTEE REPORT PACS RAFFLE ____________________________115 FARM LOAN PROGRAM COMMITTEE RESOLUTIONS_____________________116 FARM PROGRAMS COMMITTEE RESOLUTIONS_________________________130 INFORMATION TECHNOLOGY COMMITTEE RESOLUTIONS _______________136 MANAGEMENT/PERSONNEL COMMITTEE RESOLUTIONS ________________142 LEGISLATIVE ISSUES COMMITTEE RESOLUTIONS ______________________151 MINUTES OF BOARD MEETING, APRIL 12, 2005 _________________________158

CONSTITUTION AND BY-LAWS ________________________________________165

ARTICLE I - NAME __________________________________________________165 ARTICLE II - OBJECTIVES____________________________________________165 ARTICLE III - MEMBERSHIP __________________________________________165 ARTICLE IV - GOVERNMENT _________________________________________166 ARTICLE V - DUTIES OF OFFICERS AND BOARD OF DIRECTORS___________168 ARTICLE VI - MEETINGS_____________________________________________168 ARTICLE VII - AMENDMENTS _________________________________________168

BY-LAWS __________________________________________________________169

ARTICLE I - DUES AND FISCAL YEAR __________________________________169 ARTICLE II - QUORUM_______________________________________________169 ARTICLE III - FINANCES _____________________________________________169 ARTICLE IV - AMENDMENTS OF BY-LAWS ______________________________170 ARTICLE V - MEETINGS _____________________________________________170

RAY TURKNET BLOOD, SWEAT & TEARS AWARD _______________________171

NACS PAST PRESIDENTS ____________________________________________172

HONORARY MEMBERSHIP ___________________________________________173

"WUNDER FUND" ___________________________________________________174

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Building Rural America NATIONAL ASSOCIATION OF CREDIT SPECIALISTS

of the USDA – Farm Service Agency

A Federal Managers Association Conference

NACS - FSA Officers & Board of Directors

2004 / 2005 PRESIDENT VICE PRESIDENT Bill Mahanay Melissa Cummins 1410 East Iron Avenue, Suite #12 316 W Boone Ave, Suite 568 Salina, KS 67401 Spokane, WA 99201 W - 785-825-8269 ext. 29 W - 509-323-3021 FAX - 785-825-1533 FAX - 509-323-3074 H - 785-823-8639 H - 509-325-2128 W - [email protected] W - [email protected] H - [email protected] H - [email protected] SECRETARY TREASURER Cheryl McGraw Mike Gibbs 955 Prestonsburg Street #3 350 Veterans Parkway North, Room 102 West Liberty, KY 41472 Moultrie, GA 31788 W- 606-743-3410 W - 229-985-3176 ext. 115 Fax 606-743-4342 H – 606-422-6912 Fax - 229-985-7812 W - [email protected] H - 229 -324-7622 H – [email protected] W – [email protected] H- [email protected] PAST PRESIDENT

Betsy Senter 113 S. Madison St., Suite 102 Winner, SD 57580 W - 605-842-0603 ext.120 FAX - 605-842-0738 H - 605-835-8420

w - [email protected] H - [email protected]

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Zone Representatives 2004 / 2005

Zone A Rep Alternate Dan Mattson Stu Skidmore Rt. 1, Box 2 1251 S. 2nd Ave., Room 103 Grangeville, ID 83530 Okanogan, WA 98840 W - 208-983-1050 Ext. 106 W – 509-422-3292 FAX - 208-983-0519 FAX – 509-422-0532 W - [email protected] W- [email protected] Zone B Rep Rich Holter Melody Julian 505 S. Pennsylvania Salem, SD Ness City, KS 67560-2198 W – 605-425-2217 ext. 109 W – 785-798-3614 FAX – 605-425-2080 FAX – 785-798-3793 W – [email protected] W – [email protected] H – [email protected] Zone C Rep Dan Walsh Jerry Hines 1406 S. Heaton 200 N. High St., Room 540 Knox, IN 46534 Columbus, OH 43215 W - 574-772-3066 W - 614-255-2458 FAX - 574-772-7466 FAX - 614-255-2543 W - [email protected] W - [email protected] Zone D Rep Brent Gremillion Jean Smith 111 N. Main Street, Suite #1 P.O. Box 70 Opelousas, LA 70570 Alamo, TN 38001 W - 337-948-8288 Ext. 104 W – 731-772-1822 Fax – 337-948-8288 FAX - W - [email protected] W – [email protected]

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Farm Loan Programs Committee

2004 / 2005 E-mail [email protected]

ZONE A REPRESENTATIVE Nancy Seger 2145 Basin Street SW, Suite A Ephrata, WA 98823-9617 W - (509) 754-2463 ext. 2 FAX - (509) 754-4705 [email protected]

ZONE A ALTERNATE Bardell Faux 1630 23rd Avenue Suite 601 Lewiston, ID 83501 W - (208) 746-9621 ext. 2 FAX - (208) 798-3164 [email protected]

ZONE B REPRESENTATIVE John Vogt 113 N Norton Norton, KS 67654- W - (785) 877-5667 FAX - (785) 877-2286 [email protected] (OR) [email protected]

ZONE B ALTERNATE Mark L. Huntington 235 W. Hope Vinita, OK 74301 W - (918) 256-6882 FAX - (918) 256-2407 [email protected]

ZONE C REPRESENTATIVE ** Mike Priest 146 E. County Road 200 N. New Castle, IN 47362 W - (765) 529-2303 ext. 112 FAX - (765) 521-8174 [email protected]

ZONE C ALTERNATE Cleveland (Pete) Adamson 5213 Pocahontas Trail Providence Forge, VA 23140- W - (804) 287-1527 FAX - (804) 287-1713 [email protected]

ZONE D REPRESENTATIVE Tonya M. Washington Suite 113 Federal Building 207 S. Jefferson Star City, AR 71667 W - (870) 628-5381 ext. 110 FAX - (870) 628-3942 [email protected] **Chairperson

ZONE D ALTERNATE Aubrey Sapp 103 North zoneb St. Bonifay, FL 32425- W - (850) 547-4277 FAX - (850) 547-2674 [email protected] (OR) [email protected]

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Farm Programs Committee


ZONE A REPRESENTATIVE Ross Ballard 2871 Commerce Way Ogden, UT 84401 W - (801) 629-0575 ext. 24 FAX - (801) 629-0574 [email protected]

ZONE A ALTERNATE Lisa Butler 3530 W. Orchard Ct Visalia, CA 93277 W - (559) 734-8732 FAX - (559) 732-2805 [email protected]

ZONE B REPRESENTATIVE ** Allen Hall PO Box 189 Albion, NE 68620- W - (402) 395-2621 ext. 110 FAX - (402) 395-2318 [email protected] (OR) [email protected]

ZONE B ALTERNATE Steve Showalter PO Box 123 Keosaugua, IA 52526- W - (319) 293-3178 FAX - (319) 293-3192 [email protected] (OR) [email protected]

ZONE C REPRESENTATIVE Tim Neuhardt 1326 E Center PO Box 35 Ithaca, MI 48847- W - (517) 875-3900 ext. 2 FAX - (517) 875-4500 [email protected] (OR) [email protected]

ZONE C ALTERNATE John Simmons 1115 E. 4th St. Marion, IN 46952- W - (765) 668-8983 ext. 113 FAX - (765) 664-6437 [email protected] (OR) [email protected]

ZONE D REPRESENTATIVE Tim Vonderfecht 2304 SW Main Blvd. Lake City, FL 32025 W - (386) 752-8447 FAX - (386) 752-8278 [email protected]

ZONE D ALTERNATE Jean Smith 1179 South Dupree Avenue Brownsville, TN 38012 W - (731) - () FAX - (731) 772-7880 [email protected] (OR) [email protected]

**Chairperson

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Information Technology Committee


ZONE A REPRESENTATIVE ** Everett Purrington 2145 Basin Street SW Ste A Ephrata, WA 98823 W - (509) 754-2463 ext. 119 FAX - (509) 754-4705 [email protected] (OR) [email protected]

ZONE A ALTERNATE Jack Suesz 3113 East Main Lewiston, ID 83501-3368 W - (208) 746-9621 FAX - (208) 798-3164 [email protected]

ZONE B REPRESENTATIVE Melody Julian P.O. Box 339 Hwy. 283 and Airport Road Ness City, KS 67560-2198 W - (785) 798-3614 H - () FAX - (785) 798-3793 [email protected]

ZONE B ALTERNATE

ZONE C REPRESENTATIVE Sue Meyer 31 Duncan Street Warsaw, NY 14569- W - (716) 786-3118 FAX - (716) 786-8544 [email protected]

ZONE C ALTERNATE Sharon Harris 975 E. Washington Street Suite 1 Winchester, IN 47394 W - (765) 584-4505 ext. 153 FAX - (765) 584-1939 [email protected]

ZONE D REPRESENTATIVE William Husband 1049 W. Summers Drive P.O. Box 310 Abbeville, LA 70511-0310 W - (337) 893-5781 ext. 2 FAX - (337) 893-9225 [email protected]

ZONE D ALTERNATE Robin Hampton Wilkes County FSA Office P.O. Box 470 Wilkesboro, NC 28697- W - (336) 838-3622 ext. 113 FAX - (336) 838-0797 [email protected]

**Chairperson

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Management Personnel Committee 2004/2005

E-mail [email protected] **ZONE A MEMBER Stu Skidmore 1251 2nd Ave. S, Room 103 Okanogan, WA 98840-9723 Email - Work:[email protected] - Home:[email protected] Phone: Work:(509) 422-3292 ext. FAX:(509) 422-0532 Home: (509) 826-1308

ZONE A ALTERNATE Rob Lowe 20W. 100 S Jerome, Idaho 83338-5396 Email - Work:[email protected] - Work:(208) 324-4325 ext. 108 FAX:(208) 324-6483

ZONE B MEMBER Diane Jo Hiles 400 First Avenue East Suite 1 Clark, South Dakota 57225 Email - Work:[email protected] - [email protected] Work:(605) 532-3686 ext. 2 FAX:(605) 532-3951 Home: (605) 854-3660

ZONE B ALTERNATE Mark Moser P.O. Box 218 Wayne, Nebraska 68787 Email - Work:[email protected] - Work:(402) 375-2453 ext. 109 FAX:(402) 375-4419

ZONE C MEMBER William Lau 1363 Burnett Drive Xenia, Ohio 45385-5681 Email - Work:[email protected] - Work:(937) 372-4479 ext. FAX:(937) 372-8774 Home: (513) 932-5315

ZONE C ALTERNATE Thomas Kuklinski 254 Goddard Road P.O. Box 1938 Lewiston, Maine 04241 Email – Work: [email protected] Work: (207) 753-9400 FAX: (207) 783-4101 Home: (207) 346-3473

ZONE D MEMBER Bob Parris 105 Corporate Drive Suite G Spartanburg, South Carolina 29306 Email - Work:[email protected] Home: [email protected] Work:(864) 814-2471 ext. 109 FAX:(864) 814-4773

ZONE D ALTERNATE Gretchen Thomas 3831 Palisades Drive Suite D Tuscaloosa, AL 35405 Email - Work: [email protected] Home: [email protected] Work:(205) 553-1733 FAX:(205) 553-1729

** Chairperson

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Legislative Issues Committee


ZONE A REPRESENTATIVE Debbie Higgs Farm Service Agency 340 N. 600 E. Richfield, UT 84701 W - (435) 896-5489 FAX - (435) 896-4819 [email protected]

ZONE A ALTERNATE Scott Bown 1860 North 100 East North Logan, UT 84341- W - (435) 753-5480 ext. 18 FAX - (435) 755-2117 [email protected] [email protected]

ZONE B REPRESENTATIVE Kelly McMillin 6113 43rd Street, Suite C-1 Lubbock, TX 79407 W - (806) 785-5644 FAX - (806) 785-5975 [email protected]

ZONE B ALTERNATE Gerald Green 158 Cass-Caid Dr Center, Tx 75935 W - (936) 598-5557 FAX - (936) 598-8957 [email protected]

ZONE C REPRESENTATIVE ** Helena Pitcock 108 Reynolds Rd. Glasgow, KY 42141- W - (270) 678-1081 FAX - (270) 678-1706 [email protected] (OR) [email protected]

ZONE C ALTERNATE Polly Anderson UDSA/FSA/LSPMD 1250 Maryland Avenue, SW Room 506 Washington, DC 20024-0523 W - (202) 720-2558 FAX - (202) 690-1196 [email protected]

ZONE D REPRESENTATIVE Mike Brown Johnston Co. FSA Office P.O. Box 180 Smithfield, NC 27577-0180 W - (919) 934-7156 FAX - (919) 934-5170 [email protected]

ZONE D ALTERNATE Leo Beatty P.O. Box 37 Decatur, MS 39327 W - (601) 635-2556 FAX - (601) 635-3680 [email protected]

**Chairperson

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Membership Committee


ZONE A Chris Reninger

9173 W. Barnes Way Suite B Boise, ID 83709-1555 W - (208) 378-5681

FAX - (208) 378-5678 [email protected]

ZONE B Clayton E. Ketcham

PO Box 836 Choteau, MT 59422- W - (406) 466-5351

FAX - (406) 466-5328 [email protected]

ZONE C Maureen Mausbach

P.O. Box 151 David City, NE 68632-

W - (402) 367-3074 ext. 120 FAX - (402) 367-3331

[email protected]

ZONE D Denise M. Lickteig

918 26th Street P.O. Box 268 Auburn, NE 68305

W - (402) 274-4987 ext. 107 FAX - (402) 274-4314

[email protected]

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NACS OFFICER REPORTS

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PRESIDENT'S REPORT

A year that began like any other became a year like no other. Agency efforts to comply with the President’s management initiatives and issues pertaining to a significant budget shortfall forced the association and senior management officials to address an ever increasing number of concerns throughout the year. As I prepare this report it is evident that pay for performance, e-gov, budget, staffing and a plethora of related issues will continue to challenge the organization in the coming year. Although there were an abundance of distractions and delays, I am pleased to report that the 2004 / 2005 committees, task force representatives and board members performed admirably. I am pleased with the progress made by committee and task force members working on the quick hire questionnaires, recruitment and retention issues, farm loan program streamlining rules, simplifying the 1962-1 procedures and form, Farm Business Plan issues, performance management provisions, budget and performance management issues, risk assessment guidelines and many other issues. I am also pleased with the committee work on resolutions under less than optimum conditions. Many of the goals established by the board in June of 2004 were attained. The membership brochure and recruitment letter were updated. Incentives were established to encourage members to attend the national convention, zone meeting attendance was increased and steps were taken to further enhance communications through the use of member surveys. A few goals that were placed on the back burner to allow board members to address more critical issues will be re-evaluated by the new board and may be carried forward for completion in 2006. I would like to thank each member for doing what you can to fulfill the objectives of the organization. I would like to thank committee and task force members for being the voice of our membership and rural Americans as we strive to improve programs, services and working conditions. I would like to thank Everett Purrington, Mark Drewitz and Denise Lickteig for maintaining the NACS web site and database, which allow the organization to efficiently and effectively serve members. Last but not least, I would like to thank members of the 2004 / 2005 board. Fellow board members were like a steady stream that moved a mountain. I will be forever grateful for their support, their words of wisdom, their positive and professional attitude, and for the exceptional service that they provided to an exceptional organization.

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Serving NACS has been one of the most demanding and rewarding experiences of my life. The sleepless nights, worries and stress will soon be forgotten. The rewards of having worked with and for such a fantastic group of individuals will last a lifetime. Thank you for allowing me the opportunity to serve. William L. Mahanay President, NACS FSA

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VICE PRESIDENT'S REPORT It has been a pleasure serving the National Association of Credit Specialists as your Vice President during the 2004/2005 year. As Vice President, my main responsibility was in assisting our Committees in fulfilling their responsibilities. Your Committees worked very hard to present the resolutions submitted by the membership during a challenging year. Due to the fact FSA’s budget was not released until after January 1, 2005, we were unable to schedule our Committee meetings as early in the year as we would like. However, the Farm Loan Program, Information Technology, and Management/Personnel Committee all visited the National Office in the spring of 2005. The IT committee traveled to St. Louis to meet with IT Management. Due to the fact that there were a small number of Farm Program Committee resolutions, and that the response was not received until late April, it was determined the committee would not visit Washington, D.C. this year. It has been suggested an evaluation of this committee be undertaken at the Orlando convention. The membership submitted a total of 130 resolutions at the 2004 Convention. Seventy-nine of these were adopted and presented to the National Office. The final dispensation of the resolutions may be found in this report. I would like to thank all members for their hard work during the past year. Committees reported that meetings with our National Office colleagues were excellent. The final resolutions with National Office responses were also posted on the www.nacsfsa.org web site, and are contained in this report. I urge every member to review these, and then take the time to think about submitting a resolution for next year. Our committees were active on your behalf in other ways. Stu Skidmore, M/P Chair (Washington), was very instrumental in rewriting the job announcements for the District Director position, making FLP staff more competitive for the position. He also worked with Kansas City on writing questions for the FLM and DD Quick Hire questions. Our IT Committee was very active in working with St. Louis in regard to our automation needs. We should take pride in the confidence and respect management officials in this area have for NACS members working on IT issues. Everett Purrington (Washington) and his committee once again report a great meeting in St. Louis, reviewing and discussing up-coming software needs and IT issues.

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The Farm Loan Program Committee chaired by Mike Priest (Indiana) also reported a good meeting with Carolyn and division staff. They coordinated feedback on how the 1962-1 will fit in with the FBP. There will be many issues with FBP, and members are encouraged to work with FBP coordinators and through NACS to make proposals to continue to improve this new tool. The Farm Loan Program Committee is also working with National Office to review the new forms as they are prepared for the streamlined regulations. Millie Turner (Pennsylvania) and the membership committee once again are working hard with fundraising so that NACS can continue to support attendance at conventions and FMA. Members who have ideas in regard to this area should submit them to the Membership Committee during or after the convention. The Farm Program Committee Chaired by Allen Hall (Nebraska) worked hard getting responses back from the National Office. Although the committee did not go to Washington, D.C., we appreciate their hard work and enthusiasm in looking at issues on the program side that affect those of us doing FLP work. Our Legislative Committee was Chaired by Helena Pitcock (Kentucky). She did an outstanding job coordinating NACS activities at the FMA conventions. Considering Helena lost her home earlier in the year, we appreciate the fact that she continued to step up and fulfill her NACS commitment – she is an inspiration to all of us! Over 60 Congressional visits were made during the “Day on the Hill”. Given the challenging budget situation, support for FLP funding appears to be strong at this point. Although the Vice President is the “coordinator” of the committees, the person holding the office doesn’t do the heavy lifting! As you can see, the Committees make it happen. There is more to be accomplished. We do not know what tomorrow will bring, but I am confident that many talented members will step up and offer their services on next year’s committees. We need to keep a positive attitude and look for solutions to our challenges. Members can read individual committee reports and final resolutions comments in this report. I urge every member to consider serving at some point on a committee. It’s a rewarding experience, and provides you with an opportunity to get to know the managers who develop policies effecting our daily work lives. Melissa J. Cummins NACS National Vice President

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SECRETARY'S REPORT The 2004-2005 year has been an interesting, informative year. Since this has been my first year on the board, I have relied heavily on those who have been involved with the board before me, and would like to especially thank Melissa Cummins, Everett Purrington, and Bill Mahanay for helping to keep me on track this year. With their assistance, we have been able to achieve every communication goal that was set forth at the beginning of the year. I’m proud to report, we have submitted six National Newsletters to communicate important information to our members, as well as several surveys and questionnaires, and Zone Newsletters. There have also been various communications back and forth between members and the board regarding particular issues and concerns. These types of communications are always important to keep the board informed of the happenings around the country. There’s no way that we can tackle a problem if we are not even aware that it exists, so I would like to thank those who have spoken up and made these concerns known. The meetings with National Office personnel have been an enjoyable experience as it keeps the communication lines open. We were well received and national office personnel were willing to hear our concerns and work toward achieving a resolution. Many of the matters are works in progress as the targets are moving targets in relation to staffing, workload measurement, etc. But as these targets change so do our strategies for ensuring employee representation. We never know what the future holds, but you can rest assured that your NACS board constantly works toward ensuring your interests are being represented. Thank you for the opportunity to serve on the 2004-2005 NACS board. I have enjoyed the challenging experience and invite anyone who is interested to also run for a board position or serve on a committee. Until you have, you are missing out on the inner workings of the organization. Get involved. You’ll be glad you did!

Cheryl McGraw NACS National Secretary

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PAST PRESIDENT’S REPORT Farm Service Agency and NACS-FSA continue to evolve as new challenges are presented to us. It appears evident now that budgets will provide the largest challenges. FSA will continue to have to do more with less and right now that looks like it may be less employees. How we get there and what cuts the agency can live with will be the critical question. It is imperative that state associations and members establish a good working relationship with their state leaders. These relationships go way beyond the current crisis and help members establish long term working relationships. The same can be said for relations with your representatives and senators in Congress. You need to work on these relationships over time and establish good working relationships with their staff. The next Farm Bill is fast approaching and input from customers and employees are welcomed by congressional staff. NACS-FSA needs to continue to work on these relationships and make sure our concerns are brought to the table. We were able to accomplish a lot with the last Farm Bill by working with the Senate Ag Committee and the House Ag Committee. We can accomplish a lot more if we work together! Looking back over the past twelve months, NACS-FSA has been very active and successful even with budget setbacks. President Bill Mahanay has done an excellent job of representing NACS-FSA in discussions with FSA management. NACS-FSA has been involved in discussions involving staffing, FTEs and WL/WM. You can be assured that your association has been well represented in Washington, D.C., and our interests were expressed in a professional and thorough manner. I was impressed with the way NACS-FSA members have made a positive influence on the Federal Managers Association (FMA). This organization will continue to make changes and become more effective in the Federal community. All members need to be involved with FMA and legislative efforts! As I complete my tenure on the NACS-FSA board, I can look back at many tough roads and many successes. I have had the good fortune to be involved with NACS-FSA through reorganization and the “new” FSA. It has been exciting and challenging! An experience I’ll never forget! Thank you for allowing me to serve on the board and be a part of leading this association! It has been great! Betsy Senter NACS-FSA Past President

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TREASURER’S REPORTS

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TREASURER'S ANNUAL REPORT

It has been a pleasure to serve as your NACS Treasurer this year. I have enjoyed meeting many new members, some in person, but many by phone. The NACS Board has been amazing in terms of time and effort spent representing you, the membership. It is evident that our leaders in Washington respect this organization very much. The highlight of the year for me was again the FMA Convention. NACS was represented by one of the largest groups ever. Having the opportunity to walk the halls of congress to inform our leaders about NACS and FMA is a very humbling experience. All members should plan to attend the FMA convention. It is a great experience. The following pages are respectfully submitted as a compilation of reports to disclose all financial activity for the past 12 months. Due to the conservative approach to spending by our President, Bill Mahanay, our net worth has increased by $5,680.43 over last year, while setting forth $3,000 as incentives to attend our FMA and NACS Conventions. Much credit must be given to Millie Turner and her assistants who have created an excellent source of funds for us. Thank You. Sincerely, Mike Gibbs

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2005 NACS MEMBERSHIP SUMMARY

# OF PAID POSSIBLE # OF PAID POSSIBLE STATE MEMBERS DELEGATES STATE MEMBERS DELEGATES ALABAMA 28 4 MISSOURI 27 4 ARKANSAS 44 5 MONTANA/WYOMING 36 4 CAL/NV/AZ 41 5 NEBRASKA 45 5 COLORADO 11 3 NEW MEXICO FLORIDA 13 3 NEW YORK 26 4 GEORGIA 29 4 NORTH CAROLINA 38 4 HAWAII NORTH DAKOTA 44 5 IDAHO 25 3 OHIO 29 4 ILLINOIS 44 5 OKLAHOMA 37 4 INDIANA 29 4 PENNSYLVANIA 27 4 IOWA 63 5 PUERTO RICO KANSAS 48 5 SOUTH CAROLINA 10 2 KENTUCKY 45 5 SOUTH DAKOTA 22 3 LOUISIANA 25 3 TENNESSEE 32 4 MAINE 11 3 TEXAS 88 5 MARYLAND 1 2 UTAH 14 3 MASS/CT/RI 2 2 VIRGINIA MICHIGAN 24 3 WASHINGTON 18 3 MINNESOTA 61 5 W. VIRGINIA MISSISSIPPI 46 5 WISCONSIN 27 4 NATIONAL OFFICE 13 3

TOTAL: 1123

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National Association of Credit Specialists Net Worth Statement

As of June 10, 2005

Assets Bank Accounts Regular Checking $11,535.90 Money Market $27,865.93 Certificate of Deposit $15,560.11 Total Assets $54,961.94 Liabilities 0.00 Net Worth $54,961.94

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BUDGET REPORT JAN-DEC 2004 (01012004 THROUGH 12/31/2004 Category Description 05/27/2004 Budget Actual Difference INFLOWS Dues $23,660 $25,500 $ 1,840.00 Fund Raising $10,500 $10,500 Interest income$395 $ 300 $95 Other income $500 $1,500 $1000.00 TOTAL INCOME $24,555 $37,800 $13,245.00 OUTFLOWS Annual Reports $ 0 $ 300 $ 300.00 Awards $ 0 $ 900 $900.00 Bank Charges 0 $ 50 $50.00 Board Travel FMA Annual Meeting $4,913.74 $4,925 $ 11.26 FMA MidYear Conference 0 $2,000 $2,000.00 National Convention 0 $2,700 $2,700.00 Zone Meetings $2,536.10 $3,000 $ 463.90 State Assn. Meetings 0 $2,000 $2,000.00 Other Board Travel $ 300 $300.00 Total Board travel $7,449.84 $ 14,925 $7,475.16 Committees 0 $ 7,200 $ 7,200.00 Host State 0 $ 1,500 $ 1,500.00 Legislative CommFMA Conv. $1,913.59 $ 1,925 $11.41 Postage 0 $ 50 $50.00 Supplies $ 500.00 $ 600 $100.00 Web Page 0 $ 300 $300.00 FSA Nat. Conv. Attendance Incentive 0 $2,100 $ 2,100.00 FMA Convention Attendance Incentive 0 $1,000 $ 1,000.00 Zone A Meeting $ 883.32 $1,250 $366.68 Zone B meeting $ 1,511.45 $1,850 $338.55 Zone C Meeting $1,426.98 $1,800 $373.02 Zone D Meeting $1,860.00 $2,050 $190.00 TOTAL OUTFLOWS $15,545.18 $37,800 $22,254.82 NET INCOME/LOSS $9,009.82 $9,009.82

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BUDGET REPORT AS OF 6/10/05 BUDGET ACTUAL DIFFERENCEINFLOWS Dues $24,000.00 $22,660.00 ($1,340.00)Fund Raising $10,000.00 $0.00 ($10,000.00)Interest $500.00 $634.89 $134.89From Cash or Savings $3,000.00 $2,500.00 ($500.00)Other $1,700.00 $1,700.00 Total Inflows $37,500.00 $27,494.89 ($10,005.11)

OUTFLOWS Annual Reports $100.00 $0 $100.00 Awards $900.00 $268.73 $631.27 Bank Charges $50.00 $117.40 ($67.40)Board Travel WDC Fall Meeting $950.00 $603.67 $346.33

FMA Annual Meeting $5,400.00 $2,295.57 $3,104.43

FMA mid year $500.00 $0.00 $500.00 National Conv. $3,600.00 $0.00 $3,600 Zone Meetings $3,000.00 $1,906.29 $1,093.71 State Meetings $1,000.00 $0.00 $1,000.00 Total Board Travel $14,450.00 $4,805.53 $9,644.47

Committees: Convention $7,200.00 $0.00 $7,200 NACS Convention Incentive $2,000.00 $0.00 $2,000 Host State $1,500.00 $1,500.00 $0.00 Leg. Comm.-FMA Conv. $2,400.00 $1,492.24 $907.76 FMA Attendance Incentive $1,000.00 $1,100.00 ($100.00)Postage $50.00 $117.43 ($67.43)Supplies $300.00 $29.99 $270.01 Web Page $300.00 $269.45 $30.552004 Convention Expense $0.00 $900.00 ($900.00)Fundraiser Expense $0.00 $200.00 ($200.00)Membership/Rewards-States $120.00 $0.00 $120.00Zone Meetings $6,950.00 $6,524.00 $426.00TOTAL OUTFLOWS $37,320.00 $17,324.77 $19,995.23NET INCOME/LOSS $180.00 $10,170.12 $9,990.12

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CASH FLOW REPORT INFLOWS Regular Dues $22,460.00 Retiree Dues $200.00 Other $1,700.00 Interest Checking $70.67 Money Market $220.23 CD $343.99

$634.89 (total interest earned)

From Money Mkt $2,500.00 Total Inflows $27,494.89 OUTFLOWS

04 Convention Expense $900.00

05 Convention Expense $1,768.73

Board Travel

WCD Fall Meeting $603.67

Zone Meetings $1,906.29 FMA Convention $2,295.57 FMA Leg Comm $1,492.24 FMA Incentive $1,100.00

$4,887.81 (total FMA expense)

Bank Charges, Supplies & Postage $264.82

Fundraiser Expense $200.00

05 Zone Mtg Expenses $6,524.00

Internet Fees $269.45 Total Outflows $17,324.77 Surplus 10,170.12

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2005 WUNDER FUND ACTIVITY REPORT

As of 6-10-05

Beginning Balance $4,162.00

Plus Donations $714.00 Plus Account Growth $899.00 Less Withdrawals $0.00

Ending Balance $5,775.00

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ZONE REPRESENTATIVES REPORTS

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ZONE A ANNUAL REPORT Dan Mattson was the Zone A Representative from July 2004 through the upcoming National Convention in June of 2005. Zone A had a good year. We had excellent representation at our Zone Meeting held February 24th through 26th in Salt Lake City, Utah. There were many FSA NACS members in attendance including members from Washington, Montana, Wyoming, New Mexico, Nevada, and Hawaii. The Zone meeting was organized by a dedicated group of RD and FSA employees. Without the joint cooperation of the employees in our Agencies the meeting would not have been as successful as it was. This year our FSA speakers included Veldon Hall, Doug Frago, Don Sanders, John Nassif, and Debbie Stokes. They all gave good presentations and were able to answer questions raised by the Zone A members who were present. Zone A thanks these individuals for taking time out of their busy schedules to attend the Zone A Meeting. Discussion this year centered on the financial woes of the Farm Service Agency. With over $40 million dollars in reduced Salary and Expense for fiscal year 2005 all employees will be affected. Implementation of web based computer systems are moving along. Once again Stream Lining was discussed hopefully this will be a reality and behind us by this time next year. Wyoming reported that their association has increased membership to the point where they may form their own association, at this time they are affiliated with Montana. Thanks goes out to those members in Montana and Wyoming who have made this a possibility. New Mexico has added two new members recently, so congratulations also go out to them! Colorado has elected new officials and is working toward increasing participation in NACS. During the Zone meeting Stu Skidmore announced his intention to run for Zone A Representative. Dan Mattson Zone A Representative

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ZONE B ANNUAL REPORT Upon being elected Zone B Rep I thought that the responsibility would be overwhelming and wondered what I had gotten myself into. After all, I had not served as the alternate and was not completely familiar with the duties of the office. What I had not taken into consideration were all of the NACS state and national officers as well as committee members who were willing to lend their experience, support, and efforts. Any success to be claimed in Zone B can be attributed to these dedicated people. One of the more unglamorous jobs within NACS is to serve on one of the committees as they do not get a lot of recognition for their work behind the scenes. Zone B is privileged to have the following committee members who served this year: Melody Julian - Information Technology, John Vogt – Farm Loan Programs, Diane Jo Hiles – Management/Personnel, Allen Hall – Farm Programs, and Kelly McMillin – Legislative Issues. A special thanks goes out to Denise Lickteig who took over the NACS fundraising raffle from Millie Turner. The extent to which Zone B members step up and involve themselves in the organization continues to impress me. It seems that I’m seeing more first-time faces at both the Zone B meetings and national conventions. My thanks to the state presidents who tolerated my numerous emails and frantic, last minute requests for information. Also, due to their efforts I can report at the time of this writing it appears that we have approximately 28 new members in Zone B this fiscal year. It was an honor and educational experience to be able on behalf of Zone B to take part in the NACS Fall Board Meeting November 30th and our meeting with the National Office December 1st and 2nd. I just wish that every FSA employee had the opportunity to travel to Washington D.C. and tour the National Office. The task of splitting up to be able to find, let alone meet with, the various NO officials at our appointed times was a logistical feat. That trip alone made my entire year serving on the board. I learned more about NACS and FSA in that week than I could have possibly imagined. Our Zone B meeting was held in Oklahoma City January 10th – 12th and for once we had favorable traveling weather which led to an excellent turnout. I always look forward to heading south that time of the year and was not disappointed other than I would like to have stayed longer. Mark Huntington and his crew are to be commended for their effort and success. Considering the current challenges being face within Government and FSA, the speakers were particularly relevant: Doug Frago - DAFO, Carolyn Cooksie - DAFLP, Terry Tanner – Chief, Guaranteed Loan Group, Farm Credit Applications

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Division, Glenn Richter – Chief, Loan Operations Division, and Joe Migyanka – Human Capital Management Consultant. Their presentations on budget shortages, reduced staffing, and program issues were relevant, interesting, and reinforced by belief that NACS has an important role to play through the FSA Tomorrow process. Our affiliation with FMA has added a whole new dimension to NACS membership. We tend to forget the time and effort entirely separate from NACS that Eric Guenther puts into representing us in Zone 5. Thank you, Eric, from all of us in Zone B. Two workhorses that have been pulling together for two years now are NACS Past President Betsy Senter and President Bill Mahanay. I sometimes wonder where they get their time, energy and keep up their enthusiasm. They are true champions of our cause and are one of the main reasons NACS has achieved so many successes. Despite outward appearances, I know they both sometimes feel overwhelmed and that their efforts go unrecognized. I assured them that they are appreciated, are tremendous assets to the Agency and Association. If you happen to see them or even email a question be sure to also thank them for all that they have done. Before closing, please keep in mind that all of you have something to offer to the organization. You are all trained professionals with years of service who have particular talents and experiences that would lend well to improving the working conditions of your fellow employees and the service that they provide to our customers. Start by accepting a NACS position within your respective state organization then attend a Zone meeting and maybe even a National convention. The friendships you develop and work you see being done will keep you coming back. Thank you again for allowing me to serve NACS and Zone B. Rich Holter Zone B Representative

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ZONE C ANNUAL REPORT This has been another eventful and challenging year. The 1165 issue is still unresolved to many of us and has been put on the back burner. “FSA TOMORROW” looms before us as FSA is going through a budget shortfall. As usual the NACS members have “stepped up to the plate” in dealing with these issues. Zone C members have worked hard this year in many different capacities. Zone C Committee Members and their alternates have contributed time and effort with their respective resolutions and federal register comments. A special thanks goes to those who have worked so hard on these committees: members; Sue Meyer, Mike Priest, Bill Lau, Tim Neuhardt, Helena Pitcock, and alternates; John Simmons, Sharon Harris, Pete Adamson, Thomas Kuklinski, Polly Anderson. Again Millie Turner has done a great job on the Membership Committee with the NACS Raffle. A very special thanks goes to Darren Metzger for serving on the Farm Business Plan task force. Darren has put many many hours into this project and represented Zone C well. Your Alternate Zone C Representative Jerry Hines has been very active in getting the NACS data base corrected and I want to thank Jerry for his work in that area as well as all the other help he has given me this year. Eight Zone C members attended and participated in the National FMA Convention April 10-13 and were very active in the “Day on the Hill”. All these members have put in long hours working in your behalf. They all had a very busy year and THANK YOU for your dedication. The Zone C meeting was held March 3, 4, and 5th, 2005 in Indianapolis, Indiana at the Omni Hotel. The meeting was well planned and very informative. We had the largest attendance of any zone meeting held this year. I want to thank the Indiana Associations for a very good Zone Meeting and also thank all who attended. Zone C was very fortunate to have Cheryl McGraw serve on the National Board this year as the NACS Secretary. Cheryl has done a tremendous job in this capacity and will serve us well in the future. Zone C is fortunate to recruit new members and an effort is being made to recognize those new members and I want to thank all involved in recruiting new members. As with new members along comes retirement and Zone C lost 2 very active members this year in Glen Yeager from Wisconsin and Bill Lau from Ohio. Both Glen and Bill have contributed much to NACS over the years and will be missed. I know I have missed other retirements and I wish all retirees the best. As I get closer to that magical date I

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think about all of the good friends I have met by being involved in NACS and FMA. I want to encourage each and every one of you to become more involved in your association. I am always impressed with the dedication of those members who step up and work so hard for this association! I know I will see more of our members step up and contribute their own time to further such a worthy cause. I want to again THANK YOU for your support during the past year and look forward to the new challenges in NACS’s future. I will leave you with this quote “If it is to be, it is up to me”. Dan Walsh Zone C Representative.

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ZONE D ANNUAL REPORT I have had a truly rewarding and awesome year serving as your Zone D Representative. In addition to being able to meet many new people in this position, I had the opportunity to accompany the NACS Board on my first trip to Washington, DC. What a great experience it was to see our agency’s wheels turn and to be able to put faces with names that we have heard about over the years. In Zone D we have some exceptional individuals who volunteer their time and effort to support NACS, and on behalf of Zone D’s membership, I would like to thank them first. Mike Gibbs from Georgia is concluding his first term as NACS Treasurer and Robin Hampton is a former NACS President and has been on the Farm Business Plan task force this past year. Thank you both for your contributions. Jean Smith served as my Alternate Zone D Representative this past year. Jean also served as an alternate member on the Farm Program Committee. The following NACS members served you on committees this past year: Tim Vonderfecht (FP), Tonya Washington (FLP), Aubrey Sapp (FLP-Alt), Bob Parris (MP), Gretchen Thomas (MP-Alt), William Husband (IT), Robin Hampton (IT-Alt), Michael Brown (LI), Leonard “Leo” Beatty (LI-Alt), Mike Sullivan (Membership) and P.L. Jowers (Membership-Alt). Zone D held a great Zone Meeting in Mobile, Alabama on February 17-19. Our friends from Alabama did an excellent job and the participants enjoyed their fine southern hospitality. Many issues were debated and discussed, and our National Office speakers shared with us current events along with answering many questions from our membership. The overall message of the meeting was that there will be many changes on the horizon and no doubt, many challenges also. I have no doubt that NACS and members of Zone D will handle these challenges in a professional manner. Two individuals from Zone D stepped forward and announced their candidacy for NACS Board positions for 2005-2006. Jean Smith announced her candidacy for Zone D Representative and Mike Gibbs announced his candidacy for a 2nd term as NACS Treasurer. Both of these individuals have held leadership positions in the past and I believe Zone D will be well represented by these two individuals on the NACS Board. Michael Brown and Mike Gibbs represented Zone D and the FMA convention held in April. They participated in the annual “Day on the Hill” where they met with Representatives and Senators regarding FSA and NACS issues. During the meeting, much debate and discussion was held regarding many issues. Next year, the farm bill will be coming up for debate and I would like to see Zone D with a good turnout at this meeting next year in order to express NACS concerns.

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We are privileged this year to have our Annual Convention in Orlando, Florida. I would like to personally thank the Florida folks for all of the time and tireless efforts they have put into making this convention a success and one to remember for NACS and for your families as well. In closing, I would like to thank you again for letting me serve as your Zone D Representative this past year. One comment that I would like to leave with you is that life is short and we should not take anything for granted. The difference that we can make today, personally and as an organization, can and will affect our lives and our jobs tomorrow. Last but not least, I would like to thank Bill Mahanay and the other NACS Board members for their tireless efforts. Brent Gremillion Zone D Representative

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COMMITTEE REPORTS

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FARM LOAN PROGRAM COMMITTEE The committee traveled to Washington, D.C. to meet with Carolyn Cooksie, the National Division Directors and their staff members on April 20, 2005 to discuss the 2004 Resolutions and other items of interest regarding FLP. We would like to thank Veldon Hall, Jim Radintz, James Flickinger and their staffs for the open discussion, hospitality and their support for the resolution process. We also met with Bill Cobb and staff to discuss Farm Loan Program Streamlining. There were 24 resolutions sent to the National Office for discussion. I am pleased to report that 21 had a favorable or positive response. Other activities done through the year:

- Review and comments on proposed changes to the 1962-1 Form - Review Federal Registers - Comments on the proposed form numbering system - Discussion on other issues, FSA forms and regulations

I would especially like to thank the FLP Committee members and alternates for their time and efforts this year. The 2004 FLP Committee Members and Alternates are: Zone A- Nancy Seger, WA and Bardell Faux, ID, Alt. Zone B- John Vogt, KS and Mark Huntington, OK, Alt. Zone C- Mike Priest, IN and Pete Adamson, VA, Alt. Zone D- Tonya Washington, AK and Aubrey Sapp, FL, Alt. I have enjoyed working with all of you this year. J. Michael Priest, Chairperson, Farm Loan Program Committee

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FARM LOAN PROGRAM COMMITTEE RESOLUTIONS

RESOLUTION 1

CONCERN: FLP goals are established at National level then sent to the State for State’s to set State goals. Employees delivering the programs are not adequately consulted during the process. PROPOSED SOLUTION: Prior to setting of National and State goals, representative associations be consulted for input on setting of specific goals. NATIONAL OFFICE RESPONSE: National and State level annual performance goals are based on several factors, including past performance, current economic forecasts for the agricultural sector and funding levels. At the beginning of each fiscal year, Farm Loan Chiefs are given the opportunity to provide input on performance targets and the targets are discussed at the annual Farm Loan Policy Meetings. These inputs, along with the previously identified factors, are considered when developing performance goals for the following fiscal year. State employees are encouraged to work closely with their field office employees and the employee associations when setting goals for the State. NACS DISCUSSION: National Office is advising employees to get involved at the State level. N.O. will not force the SED to contact field employees for input. We encourage the state associations to request the SED to allow employee input when setting goals for the state or individual office.

RESOLUTION 2

CONCERN: On the direct application, 410-1, block 10 needs to be revised to include “LLC’s and Trust’s” as a type of operation. PROPOSED SOLUTION: Change both forms to include this information as required. FMI FSA 410-1 already has that selection, but did exclude “Joint Operation”. That will need to be added again. The FMI will need revised. Guarantee application: 1980-25 & 1980-28. Add “LLC’s and Trusts” as type of operation to block 10. These changes are needed to correlate with regulations and who FSA can provide assistance to.

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NATIONAL OFFICE RESPONSE: The latest version of form FSA 410-1, dated 9-10-03, includes check boxes to identify LLC’s and trusts. In addition, the form states that unless you select one of the other boxes, individuals operating together will be considered a joint operation.

The latest version of form FSA 1980-25, dated 3-22-04, includes check boxes to identify LLC’s, trusts and joint operations. Form FSA 1980-28, also dated 3-22-04, includes check boxes to identify LLC’s, trusts and joint operations. Therefore, no changes are needed. NACS DISCUSSION: The resolution concerns have been addressed. The National Office has made changes to the forms as needed.

RESOLUTION 3

CONCERN: On both guaranteed loan applications, 1980-28 and 1980-25, blocks need to be provided to add lender ID, payment amount and payment frequency. PROPOSED SOLUTION: Change the forms to include this information as required. NATIONAL OFFICE RESPONSE: The lender ID is available from the lenders agreement as well as other sources. The payment frequency and amount should be provided in the loan narrative that accompanies the application. We receive over 12,000 applications per year and are hesitant to impose additional requirements for data that are available elsewhere. No changes to the loan application forms are planned at this time. NACS DISCUSSION: NACS understands the National Office position. However, we encourage the National Office to incorporate changes to make all information available on one form when possible.

RESOLUTION 4

CONCERN: When the producer comes into the USDA Service Center to file an acreage report with Farm Programs they also are asked to supply the same information to Farm Loan Programs for the purposes of cash flows and previous year’s history. PROPOSED SOLUTION: Work with the program sponsors of Farm Programs and Farm Loan Programs software development to incorporate the new GIS acreage reporting tool into the Web Farm Business Plan (WFBP). The producer should then be able to report once and data would be available for both divisions of FSA. NATIONAL OFFICE RESPONSE: The goal of the agency is to eventually share data across program lines. Currently, Farm Loan Programs (FLP) applications do not share data between themselves. FLP priority is to reengineer our

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applications toward one time data entry for FLP information. Farm Programs (FP) is at the beginning steps of reengineering their applications. With their reengineering efforts, FP is sharing with us the direction they are taking so that in the future we’ll be able to share data across program lines. In the meantime, look forward to one time data entry for FLP producer information. Farm Loan Programs’ (FLP) Program Development and Economic Enhancement Division (PDEED) has assembled a task force and is currently reviewing possible uses of GIS and GPS uses for FLP. Once policies have been developed regarding the use of GIS and GPS for FLP, program uses and the need for possible training will be addressed. NACS DISCUSSION: The National Office is working towards the goal of one time data entry and sharing producer information between FLP and FP. The reality is that funding cuts in I.T. will delay implementing these enhancements.

RESOLUTION 5

CONCERN: The NIR guide exhibit 20 paragraph 20 subparagraph B question 16 appears to be in direct conflict with the Form FSA 1962-1 and the form’s FMI. The question states that the FHP table K and the FSA 1962-1 “must be consistent with one another reflecting the amounts and when payments are to be made to each creditor, the source of the funds with which the payment is to be made.” The question implies that all income from every source and all debts to each creditor should be stated on the form to make the form consistent with the FHP table K. In the case of non-farm income which is common today, non-farm income may be used to pay debts, both farm and non-farm debts. Form FSA 1962-1 and the FMI clearly state the form is an agreement regarding FSA chattel security. Non-farm income should therefore, not be shown, nor should debts paid from non-farm income be shown unless FSA has a lien on the income. This is in conflict with the NIR guide. PROPOSED SOLUTION: A rewrite of question #16 in the NIR guide is needed that will add clarification of the meaning of “consistency. NATIONAL OFFICE RESPONSE: We agree with this resolution. At this time, both the NIR process and the use and structure of Form FSA 1962-1 are under review. This issue will be addressed in this process. NACS DISCUSSION: The NIR task force developed a new form of review (FLIPRA). The pilot for this program will be implemented later this year.

RESOLUTION 6

CONCERN: Form 1980-03 with a revision date of 01-05-04 states under part B-Servicing Review-SELS, question number 18. “For loans of credit (LOC) or annual operating loans, is the sale of normal income security being reported to the lender and adequately documented?” It appears that the first four words of the sentence should have been “For Lines of Credit (LOC). . . .” It appears to have been an error in spelling.

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PROPOSED SOLUTION: In question #18, change “For Loans of Credit (LOC). . . “To “For lines of Credit (LOC). . . “. NATIONAL OFFICE RESPONSE: We have checked the 01-05-04 version of the form and it correctly states “For Lines of Credit (LOC).” The procedure notice this form was issued under also has the correct spelling. Evidently this form was made available electronically before the Procedure Notice was issued and the correction was made. NACS DISCUSSION: NACS agrees. The error on the form is corrected.

RESOLUTION 7

CONCERN: Form RD 440-21, “Chattel Appraisal” has not been revised since April, 1997. (This revision only changed the Agency acronym from FmHA to RD). Form RD 440-21 lacks essential needed information such as: effective date of valuation/inspection, date of report, appraisal report consist of ____ pages, scope, and intended use of the report, definition of value, references and sources used for value, appraiser’s certification. Simply put, the form needs to be updated to include this required information. PROPOSED SOLUTION: Incorporate items similar to KS Exhibit 11 of 1-FLP par.142 (attached) to either Form RD 440-21 and/or Farm Business Plan Software. The present Agency Form is insufficient and lacks in documentation to the loan approval official, as well as oversight by the Agency. See attached example form. NATIONAL OFFICE RESPONSE: The Chattel Appraisal form has been incorporated into the Farm Business Plan. The revised form is generated from equipment and livestock entered in the balance sheet section of the Farm Business Plan. Users can flag balance sheet if the chattel values were provided by a contractor, lender or FSA. The section relating to remaining equity has been removed. That information is now found in the Collateral Analysis section of the system. The new form has livestock information and equipment information in separate sections for easier reading. The form includes total values, date, signature and title. On the balance sheet users have the option to document further information related to the appraisal in the note section. NACS DISCUSSION: NACS agrees. The National Office states that within FBP appraisal; the user has the option to provide additional documentation for the appraisal in the note section of the Balance Sheet.

RESOLUTION 8

CONCERN: The FSA 410-1 does not have a place to check if individual members of an entity are veterans or not. This causes a problem when entering the individuals in SCIMS, because you need to enter a veteran code for FLP before it will let you proceed. Also, when you go into MAC to link the information from SCIMS a veteran code is required. This can delay getting the application

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entered because you have to obtain the information, when it could easily be provided on the application. PROPOSED SOLUTION: Update the 410-1 to include a yes/no box for veteran status under item number 34 of the application form. NATIONAL OFFICE RESPONSE: Form FSA 410-1 asks the question whether or not a applicant is a veteran; however, it does not ask it of the individual members of an entity. On the next revision to the form, we will consider your suggestion. NACS DISCUSSION: The National Office states they will consider the suggested revision the next time they revise the form 410-1 which should be around January 2006.

RESOLUTION 9

CONCERN: When a borrower commits an act that requires FSA to send a 1962-A5 letter, there is no place in AgCredit that this tracking can be monitored. This letter must be sent even before OIG determination can be made; and OIG determination is the first option after determining the type of non-monetary default. PROPOSED RESOLUTION: Add a tracking code for the 1962-A5 letter. Once the time frame is up for the restitution offered in the 1962-A5 letter, then an OIG opinion need can be determined. NATIONAL OFFICE RESPONSE: We agree with this resolution. However, this change will probably not be implemented in the MAC program until the overall servicing procedure is changed in the streamlining process. NACS DISCUSSION: NACS agrees with the response and will monitor to see that it is corrected in the Streamlining regulations.

RESOLUTION 10

CONCERN: Often loans are closed and then it is determined that all of the loan funds are not needed. 3-FI appears to instruct loan officials to order a loan check, mark it as “not negotiable” and send it to the SLKCFO with Form 1940-10. This is not correct procedure and causes numerous problems. Example: a youth loan is closed for $3,000, but only $2,500 was needed due to lower feed expense. The animal is sold and the amount borrowed is repaid. However, there is still a $500 balance due on the loan. Submitting the check for cancellation does not cause the loan to be shown as paid in full. PROPOSED SOLUTION: The only place where the proper instructions could be located is in the FMI for Form 1940-10, wherein it states specifically that “for closed loans where there are excess loan funds, the funds should be requested and then remitted on the account as a refund. This is the only way that the loan

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can be shown with a zero balance. These instructions should be very specific and incorporated into Handbook 3-FI. NATIONAL OFFICE RESPONSE: This resolution was referred to the Finance Office and the following response was provided: “The field office must request the remaining amount and cancel the check because the advances must equal the promissory note. An option for the field would be to de-obligate the amount not advanced and execute a new promissory note for the amount that the borrower received. The Finance Office requires a copy of the new note with the loan de-obligation request.”

We recognize that the existing procedure is unwieldy, and will work with Financial Management Division and the Finance Office to develop a simpler transaction to reduce or cancel undisbursed loan obligations when the borrower does not need all of the loan funds. NACS DISCUSSION: NACS prefers the second option whereby the National Office will work with the Finance Office to develop a more simplified method to deal with the situation.

RESOLUTION 11

CONCERN: Page 5-5, dated 5/8/03, 2-FLP amendment 14 states in regard to “financial history” that “the financial history should support cash flow projections and include three years of income and expenses and three years of balance sheets.” There is no requirement that allows FSA to request three years preceding the year of the loan. PROPOSED SOLUTION: Add sufficient language to 2-FLP for FSA to request, at a minimum, three most recent years of operation proceeding the year of the application. NATIONAL OFFICE RESPONSE: We do not feel that a change to FSA Handbook 2-FLP is required. 2-FLP is written to give lenders the necessary flexibility in addressing various situations that may arise, thereby allowing them to obtain financial information from loan applicants that best represents current operations. There may be situations where financial data from the three most recent years is not indicative of current operations. If an approving official believes that the information the lender submitted does not reflect the best available information, he or she has the authority to request additional information from the lender as provided by Par. 69 B of 2-FLP. NACS DISCUSSION: NACS agrees with the National Office response. FSA has the authority to request additional information from lenders as provided in 2-FLP, Par. 69.

RESOLUTION 12

CONCERN: Page 5-5, dated 5/8/03, 2-FLP amendment 14 states in regard to “production history” that “the application should include three years of production

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history (SEL only). There is no requirement that allows FSA to request 3 years preceding the year of the loan. PROPOSED SOLUTION: Add sufficient language to 2-FLP for FSA to request, at a minimum, three most recent years of production proceeding the year of the application. NATIONAL OFFICE RESPONSE: We do not feel that a change to FSA Handbook 2-FLP is required. 2-FLP is written to give lenders the necessary flexibility in addressing various situations that may arise, thereby allowing them to obtain financial information from loan applicants that best represents current operations. There may be situations where financial data from the three most recent years is not indicative of current operations. If an approving official believes that the information the lender submitted does not reflect the best available information, he or she has the authority to request additional information from the lender as provided by Par. 69 B of 2-FLP. NACS DISCUSSION: NACS agrees with the National Office response. FSA has the authority to request additional information from lenders as provided in 2-FLP, Par. 69.

RESOLUTION 13

CONCERN: Handbook 1-FLP, par. 146 A states “Both full-time and part-time FSA appraisers/reviewers must acquire State certified general appraiser status within 3 years from being designated as an appraiser/reviewer. In addition, the appraiser/reviewer must meet State experience requirements for obtaining a State certified general license.” Completing the required educational coursework alone, in addition to the reviewer responsibilities, make this endeavor virtually impossible to complete this task, and still obtain the report writing hours for experience in each state. Each state varies on what they consider for experience in obtaining state certification and there is no uniform or fair standard or measurement to impose this Agency requirement. In addition, the educational and experience requirements established in each state require a time frame that needs to be met for licensure and certification PROPOSED SOLUTION: Revise this regulation to state: “Both full time and part time FSA appraisers/reviewers must acquire State certified general appraiser status within their respective state of Agency employment, according to the State statutes or Agency individual development plan as approved by the SED.” NATIONAL OFFICE RESPONSE: In most states, real estate appraisal reviews count towards experience requirements in addition to completing actual appraisals. Many states have a limit as to the amount of experience that is permitted from appraisal reviews that may be awarded. In addition, for certified general status, all states have the experience requirement of at least 3,000 hours of which 1,500 hours must be in non-residential appraisal work with a minimum time that experience can be gained over no less than 30 months. These minimums are established at a national level by the Appraiser Qualification Board of The Appraisal Foundation. State statutes generally do not have a time limit

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that an appraiser can be in training. The process that each state uses to award experience credit does vary and the need to have established requirements for any training program within FSA at a national level is essential for fair and equitable treatment of all designated appraisers/reviewers within the Agency. Handbook 1-FLP, Par 146 A provides designated appraiser/reviewers a process which, if needed and justified, for an extension of the training period. The three year training requirement in the Handbook provides a measure from which all designated appraisers/reviewers are held accountable. NACS DISCUSSION: NACS agrees that 1-FLP, Par. 146 allows a time extension for the appraiser/reviewer to complete training requirements. NACS would encourage the National Office to advise SED’s to allow the designated appraiser adequate time at work to complete the necessary appraisal training hours. Obtaining appraisal certification should be the designated appraisers primary duty at work.

RESOLUTION 14

CONCERN: There is not a clarification of an applicant or co-applicant in the FSA guarantee loan program regulation, 2-FLP definitions. Lenders participating in the Farm Service Agency’s guaranteed loan program often do not distinguish between a loan applicant/borrower and a loan co-applicant/co-borrower. They treat entity applicants and individual members of the entity equally the same. Often calling them both the applicant/borrower. FSA regulations in accordance with 1910-A, 1910.1 (B) and 1910.3 (c) are specific. Direct loan applicants and co-applicants must carry the same weight when determining eligibility, i.e. both must participate in the operation of the farm business. FSA Guarantee loan regulations under 2-FLP are silent on the eligibility requirement of the loan co-applicant, especially when it fails to address participation in the operation of the farm business. Exhibit 2 of 2-FLP does define a loan applicant but not a loan co-applicant. Paragraph 109 (A) of 2- FLP does state that “an applicant and anyone who will execute the promissory note must meet eligibility criteria. “However this paragraph does not address participation in the operation of the farm operation as one of the eligibility criteria”. PROPOSED SOLUTION: Clarify or expand the definition of eligible loan applicant/co-applicant in paragraph 109 (A) and Exhibit 2 of 2-FLP. If the definition is to remain the same as it presently reads, than allow the lender to recognize both the entity and members of the entity equally the same as loan applicants/borrowers, with no distinction between applicant and co-applicant. NATIONAL OFFICE RESPONSE: We agree that there is inconsistency between the Direct and Guaranteed loan regulations with respect to the treatment of loan

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co-applicants. We are working to resolve the inconsistency, which involves interpretation of statutory language in the CONACT. We have requested guidance from the Office of General Counsel concerning what latitude we have to resolve the inconsistency in a way that does not create additional complexity for lenders, applicants, or field staff. Any necessary revisions to regulations and handbooks will be made when legal advice has been received and a policy determination has been made. NACS DISCUSSION: The National Office agrees that there is inconsistency between loan regulations. They have requested guidance from OGC to determine the latitude available to resolve the problem. The National Office is hopeful OGC will accept their suggestion, otherwise it will probably take legislation to change it.

RESOLUTION 15

CONCERN: Calculating yields for direct loan borrowers is a very burdensome and time consuming process for both the borrower and FLP staff. Often, the quality of information is questionable and duplicated for those borrowers who report acres and yields to crop insurers. In areas that have extended and widespread disasters such as drought, substituting the county average for the borrower’s individual yield doesn’t gain anything for the borrower, as the whole county may have had a near zero yield. PROPOSED SOLUTION: Utilize APH’s for those insured crops where the information is available. NATIONAL OFFICE RESPONSE: It is important to remember that the production history is to be used as a guide for developing farm business plans. The history, particularly an average, may or may not be an accurate reflection of production expectations. A comparison of projections to a positive, negative or neutral trend is probably a better indicator of whether a production projection is reasonable. When the regulations are streamlined, the borrower will be required to provide only three years of production, income and expense records, reducing the burden on the borrower and the county office staff. We do see validity for using APH for the reasons cited in the resolution. APH appears to be a very good source for evaluating and supporting production projections. We will incorporate use of both borrower actual records and APH information in the final Handbook language covering development of Farm Business Plans. NACS DISCUSSION: The National Office will incorporate the use of APH yield information in the final handbook language covering the development of Farm Business Plan. Yield calculations must comply with CONACT statutory rules. We will have the flexibility to use either actual records or APH record yields.

RESOLUTION 16

CONCERN: Farm Service Agency is a provider of supervised credit. A part of our mission is to provide financial counseling to our customers. Many of our existing customers and new applicants have significant outstanding balances on credit

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cards. It is important to obtain updated liability balances in order to prepare accurate financial statements. Many times we are unable to obtain the accurate information from our customers that are needed to provide meaningful financial counseling. PROPOSED SOLUTION: Allow FSA credit officials to obtain credit reports, at the cost to the government, as a part of the year end analysis process. NATIONAL OFFICE RESPONSE: Credit reports may be requested in conjunction with a year-end analysis at this time, with the cost paid by FSA. However, value of credit report information varies widely across the country. We believe that in most cases, the cost to obtain credit reports as a part of the year-end analysis process will be greater than the benefit that will be received. The type of credit reports obtained by FSA do not always contain the most up-to-date information since many creditors report to the credit bureaus quarterly or semi-annually, instead of monthly. Borrowers should have their most recent credit card statements readily available. This is much more accurate then the credit report and less costly. Buying credit reports does consume administrative funds (program loan cost type “A” funds); therefore credit reports should only be purchased when there is likely to be a benefit, not automatically in every case. In this day of computers, it is also reasonable to believe that the borrower can obtain accurate information that reflects the status of their account on a daily basis. This would be fast, up to the minute, accurate information that is much more reliable, expeditious and more cost effective. In the new handbook resulting from streamlining, we will clarify that credit reports may be requested in conjunction with a year-end analysis in certain situations. NACS DISCUSSION: We concur with the response. The National Office will clarify in the Streamlining regulations that credit reports may be requested in conjunction with a year end analysis in certain situations.

RESOLUTION 17

CONCERN: the 2 FLP Handbook Par. 265 A states that PLP lenders will perform an annual analysis in accordance with the requirements established in the Lender's Agreement. Many of the PLP Lender's Agreements do not reference FSA submission requirements for the annual analysis. The agency must assume nothing will be submitted when no reference to it is made. PROPOSED SOLUTION: FSA should require PLP Lender's Agreements to either include annual analysis submission requirements or specifically state within the agreement that no information will be sent to FSA as part of the annual analysis. NATIONAL OFFICE RESPONSE: The assumption is correct. If the PLP lenders Credit Management System does not require submission of annual analysis information then FSA will not receive any. FSA is to review the analysis information when FSA performs the lender review. If PLP lenders had to submit annual analysis information to FSA for review then they should not be a PLP lender. As an alternative to your proposed solution we will amend the handbook

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to specifically state that PLP lenders do not submit annual analysis information to FSA.

NACS DISCUSSION: We concur with the response. However, we would recommend that the National Office not amend the handbook rules. There are situations where a borrower has both direct and guaranteed loans and it is helpful to see another lenders analysis.

RESOLUTION 18

CONCERN: 2-FLP subordination approval authority by the National Office is difficult for lenders to work with effectively and timely. PROPOSED SOLUTION: Delegate authority from DAFLP to the SED to approve or reject subordinations of guaranteed loan security. NATIONAL OFFICE RESPONSE: 2-FLP does require that subordinations involving hard collateral be approved by DAFLP only. However, the recently issued amendment 20 to 2-FLP provided additional subordination authority at the State level as long as no additional monies are being advanced. If additional funds are being advanced then DAFLP approval is required. Our discussions with the Office of Management and Budget allow us to use subordinations only under DAFLP exception authority. NACS DISCUSSION: The National Office replied that amendment 20 to 2-FLP(dated 8/25/04) provides additional subordination authority to the SED. This should improve FSA’s ability to work with other lenders. They advised that OMB does not like to weaken FSA’s lien position with subordinations.

RESOLUTION 19

CONCERN: 2 FLP par. 181 C and 7 CFR 762.127 (d) requires current appraisals (not more than 12 months old) or appraisals updated by a qualified appraiser. N.O. has taken the position that the PLP agreement and Credit Management System take precedence over 2 FLP. In some instances, FSA is accepting appraisals over 10 years old based on the lender’s internal policies or “evaluations” completed by someone other than an appraiser. USPAP determines the standards for an appraisal but does not determine when an appraisal is required – that is an FSA decision. PROPOSED SOLUTION: DAFLP should require that PLP agreements and lenders follow the appraisal requirements in 2 FLP. NATIONAL OFFICE RESPONSE: The National Office does not allow PLP agreements and the Credit Management System (CMS) to take precedence over published regulations. The PLP agreement and related CMS are intended to be consistent with the guidance provided in Handbook 2-FLP. To the extent possible, the PLP allows lenders to make and service guaranteed loans in the same manner as other loans in their portfolio, which is a primary

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benefit of participating in the PLP. When evaluating a lender’s request for PLP status, we review the CMS to ensure the lender’s policies are in accordance with FSA regulations and statutory requirements. Additionally, we include standard language in each CMS requiring the lender to follow USPAP appraisal standards. If you have identified specific instances where CMS language is inconsistent with the regulation which is exposing the Agency to increased risk of loss, please advise the National Office. NACS DISCUSSION: The National Office doesn’t allow PLP agreements and Credit Management System(CMS) to take precedence over regulations. They request field offices to notify them of specific instances where CMS language is inconsistent with regulations.

RESOLUTION 20

CONCERN: The new Farm Business Plan (FBP) software needs three additional features/options to make it effective in the field. PROPOSED SOLUTION: 1) While the internet based system has several advantages, the software needs to be available on our laptops to allow us to perform these duties in the field. The PCFHP’s ability to take it with you was very effective and the lack of this feature with the FBP software is 10 steps backward. 2) An additional field should be included within the credit presentation part to address the level of environmental review that is required for the proposed loan or servicing action (categorical exclusion, Class 1 or Class 2). 3) There should be a report option which will track chattel security in the system as per the attached spreadsheets. NATIONAL OFFICE RESPONSE: The Farm Business Plan is an Commercial-Off-the-Shelf (COTS) software for web use only. There are no plans to purchase a desk top version. However, the National Office does agree that there may be a need to develop an electronic version of forms FSA 2037 and 2038 that will populate the Farm Business Plan. These forms replaced the Farm and Home Plan and are used information collection. Currently the forms are available electronically on the USDA e-forms web site. However, the information does not flow into the Farm Business Plan. This could be an enhancement to the system in later generations.

The Farm Business Plan Team has already looked into the future for upcoming enhancements to the system. One enhancement the team agreed on was to develop a ‘Credit Action’ to address environmental reviews. The plan is to have the loan application steps incorporated into or linked with the Farm Business Plan. This would include eligibility activities, feasibility, application tracking and all other business processes related to the application process.

The Farm Business Plan Team has established a process for collecting enhancement recommendations related to the Farm Business Plan made by State and Service Center members. Recommendations made are to be submitted to the FBP State Coordinator. The coordinators were instructed to

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post these recommendations on the FBP Forum. The Farm Business Plan Team, made up of field and National Office members will review the recommendations for adoption or rejection. NACS DISCUSSION: The Farm Business Team has established a process for collecting recommendations to enhance FBP. This team is comprised of field and National Office members who review recommendations for adoption or rejection. NACS encourages members to submit recommendations for enhancements to the FBP team.

RESOLUTION 21

CONCERN: Form FSA 1980-38 “Lenders Agreement” confused the lender in completion of block 5. It states: “The following sub-offices of the lender are covered under this agreement”, followed by a box to check and beside it stating “All offices.” Often times the main bank has one name while a branch bank has another. If the main bank/lender completes the form and simply checks the box, FSA does not know operating names of their branch banks, thus causing the branch bank to complete a form or having duplicate/additional agreements floating around. PROPOSED SOLUTION: Revise the form in block 5 to state: “The following sub-offices of the lender are covered under the agreement and listed as follows:” and remove the box to check “All offices”. NATIONAL OFFICE RESPONSE: We agree there is a potential for confusion, and will consider a revision for clarification the next time the form is revised. NACS DISCUSSION: The National Office agrees it is a source of confusion and will consider a revision for clarification the next time the form is revised. NACS will monitor the progress.

RESOLUTION 22

CONCERN: Several work load scheduling items are a necessity for particular assistance code types. As a result we are recommending that certain WLS items automatically complete upon closing of that assistance type. PROPOSED SOLUTION: Have the above mentioned WLS automatically complete when a particular Assistance code is completed. Automated completion of these items would allow more time for employees to work in other needed areas, such as the routine servicing areas. NATIONAL OFFICE RESPONSE: We are not sure which WLS items are being referred to; however, 98 percent of all loan making workload scheduling (WLS) items are automatically created and completed when information such as application completed date are entered in MAC. By entering an application received date in MAC, WLS items are created for first letter of incomplete application, CAIVRS, application completed date, etc.

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Many times when an application is received, the county office does not know which assistance code will be used; MAC does not require data entry into the field until the an approval decision is entered on the application. If the decision is a rejection or withdrawal, MAC may never record an assistance code for the loan request.

Moreover, MAC moves to the Web, WLS will be enhanced and reengineered using the Web’s modern tools to save time and eliminate duplicate effort. We will continue to utilize the MAC taskforce to assure field input and evaluation of changes to the system. NACS DISCUSSION: The National Office response is that as MAC moves to the web, WLS will continue to be enhanced and reengineered to save user time and eliminate duplicate effort. NACS is concerned that some loan servicing activities are not counted. This committee encourages members to advise NACS committees of specific items that are not being counted.

RESOLUTION 23

CONCERN: MAC does not allow input of applications without a loan amount being input. National Office indicates that anytime a 410-1 is submitted without information, it is the County Office responsibility to act on the application, even though additional information is required to fully complete the application; i.e. loan amounts, purposes, signatures & etc. With electronic records being the direction for the future, MAC needs to be more user friendly by allowing the input of an application as received, even though an amount was not originally specified by the applicant. This will also aid in the future for litigation and information searches should the applications be disposed and only electronic records remain. State office support indicates that the technicians should always input a dollar amount when inputting the application (lie to the computer) and change the record at a later date. This is not prudent as there may never be an amount input due to administrative withdrawal and the agency has basically falsified the record. PROPOSED SOLUTION: Change MAC to allow input of applications when dollar amounts and loan purposes are not originally furnished by an applicant. NATIONAL OFFICE RESPONSE: Receipt of applications is covered in FmHA Instruction 1910-A. We are not aware of any guidance which requires action on an application that has not been signed. FmHA Instruction 1910-A, section 1910.4(b) does require FSA staff to assist loan applicants in completing their application.

Entry of an incomplete loan application in MAC does not require entry of the requested loan amount. There is a requested loan amount on the MAC entry screen but the field is not required for initial entry when an application is received- it may be entered only if known. Initial entry of a loan application requires minimal information, including the application received date, whether the request is for an initial or subsequent loan, whether the request is for a direct or

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guaranteed loan, the fund code. We have confirmed this with a field office using a test loan application. Additional information may be entered into MAC as it becomes available. This process is covered in the MAC manual, available on-line.

MAC does not require the loan amount to be entered until final disposition is recorded and the decision is approval, in which case the loan amount would be known, and the county office ready to go to the loan processing section of MAC and print the Form 1940-1. The loan amount is not a required entry for applications that are withdrawn or rejected as a final disposition. NACS DISCUSSION: The FLP committee agrees with the response.

RESOLUTION 24

CONCERN: FSA has come a long way with automation, but is still needs to strive to have every form used as a fillable form. Two forms that still are not converted include the 1965-13 (Assumption Agreement) and the Form 440-9 (Supplemental Payment Agreement). There are probably other forms that also need to be computerized. PROPOSED SOLUTION: Automate all forms we use in the delivery and servicing of FLP loans as fillable forms. NATIONAL OFFICE RESPONSE: We concur with this resolution. Form FSA 440-9, Supplemental Payment Agreement, will be sent to Forms and Graphics to be converted so the form is fillable. Form 1956-13, Assumption Agreement, is on the FSA form site as a fillable form. http://165.221.16.90/dam/ffasforms/currentforms.asp . NACS DISCUSSION: The forms mentioned are prefillable now. Members are encouraged to contact NACS if they find forms that are not fillable or find other problems with the forms. The National Office desires all forms be easy to use.

2004 FLP Committee:

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FARM PROGRAMS COMMITTEE The Farm Program Committee does not have much to report. National office response to the resolutions was not received until the end of March. Authorization had been obtained from Mr. Frago to send 2 committee members to the national office. An executive decision was made not to send any members in recognition of tight budget situations The committee does plan on discussing the resolutions with Mr. John Johnson, Deputy Administrator for Farm Programs, at this years convention. The NACS Discussion listed in the following report are issues we want to visit with Mr. Johnson about. With the Farm Program Committee being unable to obtain a meeting with the national office 2 of the last 3 years many may question the value of this committee. As NACS members we need to work harder at making this committee of value to our organization and to FSA as a whole. We all need to spend some time asking our fellow employees what they see as things that need to be improved to make the programs more manageable for employees and producers. True leaders will take time to help others with their problems. It is also important that we all take the time to learn about egov and the availability of programs to the public. Our knowledge of the programs can help our clients to become more productive and efficient in their operations. The FSA Strategic Plan places a lot of emphasis on removing stove pipes in the Agency. The NACS Farm Program Committee can help with the removal. Allen D. Hall, Farm Program Committee Chairperson

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FARM PROGRAMS COMMITTEE RESOLUTIONS RESOLUTION 1

CONCERN: ECP funds cannot be used to restore private field roads, bridges, and crossings. Private roads, bridges, and crossings are necessary for farmers to carry out many agricultural practices (i.e. get to fields, allow livestock access to water or grazing areas). When these are destroyed by natural disasters, there is no assistance for farmers to make the needed repairs and it can be very costly for them to complete on their own, thus endangering cash flow and viability. These types of repairs are often more costly than other practices which are eligible for ECP assistance, and many times these types of repairs are needed before other eligible practices can be started. PROPOSED SOLUTION: Allow ECP funds to be used to restore private field roads and crossings if it affects the viability. NATIONAL OFFICE RESPONSE: The ECP operates on very limited funds and the repair and/or replacement of roads and bridges, as you noted, is a very costly endeavor. In order to ensure that ECP funds are used in the most efficient manner possible and to help as many producers as possible, cost-share assistance for roads and bridges are not allowed under the ECP. NACS DISCUSSION ITEMS: What is the annual budget for ECP and do these funds have a history of being fully utilized. The proposed solution recommends funds be used for this purpose only if it affects viability of the operation. Circumstances can exist where roads or bridges need to be fixed to obtain access to repair other damage that presently qualifies for funding.

RESOLUTION 2

CONCERN: CRP farms often have numerous fields and tracts. When a farm is reconstituted, the software wipes out all the CRP information on the old farm, thus not bringing forward the information to the new farm number. All tracts and fields in the Conservation Reserve must then be loaded in farm maintenance and compliance files under the correct new farm number or numbers. This is a very time consuming task.

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PROPOSED SOLUTION: Update Reconstitution software to include division/combination of CRP acreage as DCP acres is updated during the reconstitution process. This would eliminate the necessity of reloading the entire contract. NATIONAL OFFICE RESPONSE: CRP acres are maintained at the farm and tract level in the farm and tract record application. During a farm division or farm combination, the tract level CRP data is not deleted or altered; it remains on its respective tract throughout the reconstitution process. During a tract division, the county office employee is required to enter the CRP acres that are applicable to each resulting tract. During a tract combination, the CRP acres from all combined tracts are added together for the resulting tract. NACS DISCUSSION ITEMS: The national office indicates in their response that data has to be entered from data that is already been enter. The resolution was asking that the system be changed so the data did not have to be entered again.

RESOLUTION 3

CONCERN: CCC-633, Loan Deficiency Payment Certification and Application, is very confusing for the producer to complete. For example, the word “producer” is used for both tenant and share rent landlord. A landlord may not think or consider or think of themselves as a producer as it applies to this form. PROPSED SOLUTION: Modify the form to identify the signature blocks as operator and landlord/owner. NATIONAL OFFICE RESPONSE: The 2002 Act states that the Secretary shall make Modifying the CCC-633 LDP signature blocks to indicate operator and landlord/owner may cause confusion among other “entities” that are considered a producer for loan and LDP purposes; therefore, the CCC-633 LDP form will not be modified. The instructions for completing the CCC-633 LDP form will be modified to include the definition of producer. Modification to the instruction should help clarify who is considered a “producer” for LDP purposes. NACS DISCUSSION ITEMS: The first sentence in the response makes no sense when you read it. National office says they will modify the instructions. When can we expect to see this done???

RESOLUTION 4

CONCERN: Ballots for COC elections do not indicate that a Power of Attorney (POA) is not applicable. This ineligible ballot submitted by an unknowing individual, based on Handbook 15-AO, could determine the applicant who will serve on the County Committee. In some cases, the win-loss margin is as close as two or three votes. The voter should be aware that a power of attorney is not applicable.

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PROPOSED SOLUTION: Add a statement on the ballot to acknowledge that Power of Attorney is not applicable. NATIONAL OFFICE RESPONSE: This is a DAFO issue and has been turned over to Ken Nagel to investigate feasibility. NACS DISCUSSION ITEMS: The committee has contacted Mr. Nagel but at this time has no response.

RESOLUTION 5

CONCERN: With many programs administered by FSA, individual may qualify for payments for several different farms and shares. This causes multiple payments to be issued to an individual costing the government money in writing, sorting, and processing each transaction. PROPOSED SOLUTION: Enhancements are needed for the software so that each program will recognize the social security number together to print one payment and one summary transaction statement for the producer. This will save money, paper, and employee resources. Individual transaction statement may be printed by farm number for filing purposes. NATIONAL OFFICE RESPONSE: When MIDAS is completed this functionally will be available. NACS DISCUSSION ITEMS: The Strategic plan says that MIDAS will be implemented in December 2005 and staff will be trained prior to that. Does that mean that starting in December this functionally will be available or will there be several phases to MIDAS implementation.

RESOLUTION 6

CONCERN: GIS/GPS technology is becoming an increasingly important tool in FSA. FLP is still not consistently receiving training in this area for its potential applications to FLP programs, such as real estate appraisals, farm visits, chattel appraisals, farm planning, environmental reviews, conservation easements. It is the understanding that the National Office determines the number of employees that can be trained. The STO is then responsible for determining who will be trained. PROPOSED SOLUTION: As this appears to be a localized State Office problem, perhaps the National Office can reaffirm equitable treatment as the need arises. NATIONAL OFFICE RESPONSE: SEDs should continue to have the responsibility for selecting personnel who get trained in their states. NACS DISCUSSION ITEMS: . Committee is not sure that this is really a Farm Program issue. Farm Programs does not control who gets trained as long as the programs they oversee are implemented in this regard.

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RESOLUTION 7

CONCERN: Both FSA and FCIC require acreage reports for participation in their programs. There are often discrepancies between the information reported to each agency and it also requires double reporting for the producer. This process also requires, in most cases, the producer to complete. PROPOSED SOLUTION: Acreage reports are moved to a web based program that is accessible to both agencies (FSA and FCIC) and producers. This would provide for consistency between the agencies as well as allowing producers to complete acreage reports at any time and location they choose. NATIONAL OFFICE RESPONSE: A common information system between RMA and FSA is being created. USDA is contracted with Tarelton University to coordinate this functionality. NACS DISCUSSION ITEMS: What is the status of the contract with Tarelton University. Is there a time frame we will be seeing implementation in this area.

RESOLUTION 8

CONCERN: All CRP acres are required to be identified on the official aerial photography and all CLUs are identifying on the aerial photography. However, there is not a requirement for any conservation easements from inventory farms to be so recorded nor is there a requirement for debt for nature contracts to be recorded which causes problems for offices and producers alike

PROPOSED SOLUTION: Revise 2–CP to require that conservation easements on inventory farms and debt for nature contracts be delineated on the official aerial photography. NATIONAL OFFICE RESPONSE: CEPD agrees that the location data is essential for property management and enforcement of the terms and conditions of the contract and easement documents. Furthermore, the location of these conservation areas will assist county offices in properly identifying areas that should not be counted as crop land for purposes of providing program benefits and payments. NACS DISCUSSION ITEMS: The National office agrees with the resolution but makes no indication that they are going to proceed with a fix. We need to ask for a commitment to fix a problem. How big of problem can this create for a land owner in the future when the agency asked for restitution when they did not use the tools at their disposal to properly track the acres.

RESOLUTION 9

CONCERN: On price support loans, when bales are being redeemed receipt numbers are entered manually on a partial redemption. If a receipt number is entered incorrectly, the technician entering the receipt numbers is unaware of the error until the entire redemption is processed. At that point, software will tell you there is an incorrect bale. You have to

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go back to the beginning and revise the number, and then continue. This is time consuming and inefficient.

PROPOSED SOLUTION: Add a flag on the PPC94000 screen that will notify you if there is no bale receipt with that number, or that bale has already been redeemed. This would save lots of time for the technician to be able to correct the error on the spot instead of having to walk back through the entire process. NATIONAL OFFICE RESPONSE: The user has the option of choosing the receipts from a list rather than entering the receipt numbers manually. However, if entered manually, the user must enter all numbers before the program does a compare to determine if the receipt numbers exist in the loan. When prompted that the receipt number is not on file, the user has the opportunity of correcting the receipt number. The data entered is not lost. To view and correct numbers that are not displayed on the screen, the user must roll the screen up or down. Therefore, adding a flag on Screen PPC94000 is not necessary. NACS DISCUSSION ITEMS: Based upon the National Office response it appears that the needed information is available on the system.

RESOLUTION 10

CONCERN: Often times, FSA programs are implemented throughout the crop year and an earlier completed CCC-36, Assignment of Payment, and CCC-37, Joint Payment Authorization, do not cover these programs. This results in producers receiving FSA payments that are not subject to the CCC-36 and CCC-37. This often results in the FLP accounts of borrowers becoming delinquent. The Security Agreement that a borrower signs grants a security interest in all program payments. FSA has not allowed this in the past as the regulations do not specifically state that you can do so.

PROPOSED SOLUTION: Allow CCC-36 and CCC-37 to cover all future payments and future implemented programs unless otherwise designated.

NATIONAL OFFICE RESPONSE: This is a Financial Management Division issue and has been forwarded to them.

NACS DISCUSSION ITEMS: The committee is attempting to follow up with FMD on this. At this time we have no response.

RESOLUTION 11

CONCERN: At the present time CRP software needs to be changed so that when we enter a contract or even an offer, into the system, we load it not just by farm number, but by tract and field numbers as well. Up to this point, we have always put the tract and field numbers on the manual CRP-2, but when we loaded them into the system the software only asks for the farm number. We had to go to the Farm Maintenance file and input the CRP acres by tract. Then at certification time, we would have to remember that the acreage was enrolled to certify it properly.

PROPOSED SOLUTION: The contract needs to be loaded by tract and field number to allow the software to automatically transport this data to the maintenance files and

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compliance files based on the effective date to save having to load this same information three times. NATIONAL OFFICE RESPONSE: CRP agrees with the letter writer and is working to develop modernized CRP contract software that includes tract and field numbers. NACS DISCUSSION ITEMS: When can we expect to see the modernized CRP contract software.

Respectfully submitted by the 2004/2005 Farm Program Committee: __________________________________

__________________________________

Ross Ballard, Zone A Allen D. Hall, Zone B, Chairperson __________________________________

__________________________________

Timothy Neuhardt, Zone C Tim Vonderfecht, Zone D

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INFORMATION TECHNOLOGY COMMITTEE June 1, 2005

The IT Committee met with the NASE IT Committee, John Nassif, Jim McCoy, Glen Richter, Glen Piefer, and staff to discuss the 2004-05 resolutions and other IT issues of concern to the field. We had a good discussion on all resolutions and were able to preview a few of the upcoming IT projects St. Louis is working. Please refer to the Resolutions for details on our discussions. John and his staff were very willing to meet with us, listen to our concerns and do what they can to accommodate the field staff. Main topics discussed in addition to the Resolutions were:

♦ FLPIDS – the main page is the same as the one you use for the Farm Business Plan. Go to “Farm Loan Programs” link from the FSA Intranet page. I would encourage each of you to read the News Flash and Coming events links on that page. These links provide current information on the progress of FLP software development. For example the “New customer information application” has just been announced on the News Flash page.

♦ DALRS - on the web is in production but due to funding may not be out till 2008. ♦ FBP – enhancements will be made in accordance with the existing contract. Be

sure to email suggestions to your state coordinator. ♦ MAC - DLS - on the web and Work Load Tacking – no target date at this time

due to lack of funding. They have held their first development meeting in January 2005.

♦ FLPRA – will replace the NIR and is scheduled to be piloted this fall with full nationwide implementation in FY 2006.

♦ FFIS and EFT – See the April 18 notes posted on the NACS web site. ♦ OIP and the listing of FLP contact information on the web for customers. If your

data is not correct please contact your state OIP coordinator. You can check your area by going to http://oip.usda.gov/scripts/ndisapi.dll/oip_agency/index?state=us&agency=fsa

♦ See additional comments posted to the Web Site on April 18, 2005. We also met with a contractor, Booze Allen, who has been hired to prepare a report for OMB to determine savings of moving all business functions to a Web environment. The results will determine funding for the FLPDS project which encompasses all FLP functions such as the FBP, AgCredit, Reports, eDalr$, Customer Information, FLPRA (replaces NIR), and DLS (MAC).

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The major issue with IT development is funding, or rather lack thereof. This is hampering FSA’s ability to get the above programs to the field timely as well as enhance exiting software like the FBP. The IT divisions are also facing some personnel cuts that will slow down these projects. Respectfully Submitted, /s/ Everett W. Purrington, Chairperson, Information Technology Committee

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INFORMATION TECHNOLOGY COMMITTEE RESOLUTIONS RESOLUTION 1

CONCERN: This agency and the public are moving toward new technology such as Palm Pilots and tablet PCs. This technology offers great potential to provide better service to our customers PROPOSED SOLUTION: As existing PCs are replaced, they should be replaced with notebook PCs that can be utilized in the field. NATIONAL OFFICE RESPONSE: The Service Center Common Computing Environment (CCE) initiative is beginning to pursue Tablet PC technology for the County-based agencies. As part of the FY 2004 CCE buy, Tablet PC’s were added as a configuration purchase option. The Tablet PC’s will support mobility of the field office workforce and allow them to electronically collect data directly in the field working with their customers. Due to limited funding availability in FY 2004, FSA was not able to purchase any Tablet PC’s as part of the FY 2004 CCE buy. In addition, the Tablet PC configuration that was offered as part of the FY 2004 CCE buy did not come with outside viewable screens. Especially with GIS, FSA felt that the Tablet PC’s with the outside viewable screens would be more beneficial to the agency. CCE is planning on doing a buy in early FY 2005 for the purchase of Tablet PC’s with the outside viewable screens. Again in FY 2005, funding availability will determine whether FSA will be able to participate in the FY 2005 CCE Tablet PC buy. We agree that there is great potential in the use of this technology and the need is being weighed against other agency priorities, when it comes to FY 2005 funding availability. NACS DISCUSSION Due to funding this has not happened yet. We are in favor of testing and purchasing the equipment. As to purchasing equipment based on individual needs – this will not happen as it would be cost prohibitive for the agency verses buying FLM’s/CED’s all the same equipment at once.

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RESOLUTION 2

CONCERN: When WLS items are updated, the MAC screen gives the user the option of establishing the next due date. When this is done MAC automatically establishes a follow-up date that is the same as the new due date. This can result in delayed follow-ups and servicing of accounts. PROPOSED SOLUTION: Establish a minimum window between due date and follow-up date of 30 days for all WLS items that don’t have a pre-established follow-up timeframes of 30 days or more at this time. NATIONAL OFFICE RESPONSE: This is a good suggestion and it will be taken into consideration when the Web software is developed. We are limiting the modifications we are doing in MAC. NACS DISCUSSION WLS will be changed with the new web system that should resolve this issue and thus no enhancement to MAC will be made.

RESOLUTION 3

CONCERN: In order to fully utilize the Information Technology available, it would be beneficial and significantly improve efficiency if a "Search" type process within the FSA web site could be developed which would allow the user to enter a subject or topic and be directed to all applicable Notices, regulation and CFR references. PROPOSED SOLUTION: That a "Search" be developed similar to the Forms search which would allow FSA employees the opportunity to research topics within the FSA regulations, Notices and CFR, as well as other resource material, on a National and State level to improve the efficiency of this type of research. This would significantly reduce time needed for research of, in particular, those actions which are only utilized on an occasional basis and if utilized would reduce questions to State Specialists and assist in assuring the most current directives were being implemented. NATIONAL OFFICE RESPONSE: There are a number of web locations available for searching the type of information requested. One of those is the Document Management Information System (DMIS) that contains FSA directives and notices. The DMIS web site is located at: http://dmis.fsa.usda.gov/rware/home.html#89227 This is only available on the FSA INTRANET. Some handbooks are excluded (per WDC) due to content information. Example: warehouse examiners handbooks that include information with formulas used for calculations.

DMIS search feature: If you don't know the handbook number, you can drill down by categories until you find it (slower process). If you know its number, you can: Click in the Current FSA Handbooks box

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Click on the Word "Search" on top of the page Type, for example, "7-ADM" in the "Search for" field Click the "Boolean" radio button Click on "Search" to the right of the "Search for" field box (All handbooks that reference "7-ADM" come up.) Go to the one you want Click on the button that looks like a gray page with a red acrobat symbol on it. (Then the handbook comes up.) Code of Federal Regulations (CFRs) Web site is at: www.gpoaccess.gov/cfr/index.html and is maintained by the US Government Printing Office (GPO). Some farm program handbooks are public at: http://www.fsa.usda.gov/dafp/psd/# There is a notice Web site to search for notices at:www.fsa.usda.gov/dam/forms/notices.asp Other web sites with a variety of regulatory information can be found at these locations: National Archives & Records Administration Code of Federal Regulations:http://www.access.gpo.gov/nara/cfr/cfr-table-search.html Search the US Code:http://uscode.house.gov/search/criteria.php

GPO Access: The Federal Register Main Page:http://www.gpoaccess.gov/fr/index.html USDA Departmental Regulations, Notices, Manuals, and Secretary’s Memoranda:http://www.usda.gov/da/property/DR.htm Index of OCIO/Directives/DR:http://www.usda.gov/ocio/directives/DR/ NACS DISCUSSION We asked that all these links be placed on one web page and posted to the FLPDS site under News and Events. We also requested that all FLP manuals be posted in PDF format on this site.

RESOLUTION 4

CONCERN: Users of laptop have no administrative capabilities for dealing with problems with their laptop while in travel status. This results in situations where the employee has a useless laptop and cannot complete their intended work until they return to the office and have the help desk or state IT person fix it. PROPOSED SOLUTION: Make the primary user of the laptop a member of the administrators group on their machine only. NATIONAL OFFICE RESPONSE: The policy for granting administrative permissions on laptops in the field is determined by the CCE I/O Lab. A request

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to have a waiver for specific individuals should be addressed to the I/O Lab through the Director, Telecommunications & Security Center. The waiver should address the impact of not having administrative permissions and should specify what these individuals need to be able to do with their laptops. NACS DISCUSSION Due to computer security the above process will need to be followed. Administrative authority for all laptops will not be granted enmasse.

RESOLUTION 5

CONCERN: Several of our security instrument forms no longer are continuous forms, and do not have an area indicated for initials. PROPOSED SOLUTION: Change such forms as 440-4A, 440-15, 1962-1, 1940-17, & 1940-1 to list an initials area for borrower(s) on each page where a signature isn't required. NATIONAL OFFICE RESPONSE: The National Office agrees with the concept of including lines for producer’s initials when a form is printed on multiple pages. As forms are being revised and automated they will include spaces for initials. As for the above mentioned forms; 440-4A has been modified by the Farm Business Plan and it includes lines for initials, 440-15 will be obsolete; 1940-17 is being revised; both 1962-1 and the 1940-1 will be revised as part of Farm Business Plan. NACS DISCUSSION The 1940-1 is being changed and will be posted to the Forms site on the intranet. They hope to reduce it to one page eliminating the need for initials.

RESOLUTION 6

CONCERN: 2-FLP paragraph 224 E limits Interest Assistance (IA) Agreements to ten years. Currently this is not tracked or is there anywhere that reminds us of the expiration date. There are concerns that some agreements have been approved that will exceed the ten years which is an obvious liability issue. PROPOSED SOLUTION: Develop a GLS flag and develop a reporting capability for IA accounts that establishes the final eligibility date for each IA customer. NATIONAL OFFICE RESPONSE: There is an MRE Report available to State Offices that shows the 10-year term limit on interest assistance agreements. It is available through GLS MRE, under Guaranteed Loan Data - FSA - “10-Year Term Limits on IA Agreements”. The report is sorted by Servicing Office and lists each interest assisted loan with the date of the 10-year IA limit. There is also an outstanding RFA, written in November 2002 that requested an edit be added to GLS to prevent a Loan Guarantee Request from being entered if it was requesting interest assistance that would exceed the 10-year limit. This RFA is currently ranked #2 on the list of Desirable RFAs. It has been given this

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lower priority status because National Office is expecting to rewrite the IA regulations, which would affect the edits that should be added.

NACS DISCUSSION Contact your State office to obtain a copy of the MRE report of interest assistance. This report is available only to the State Offices. The IT Committee has asked that it be made available to the field as well.

RESOLUTION 7

CONCERN: MAC's AgCredit has been very helpful in determining servicing actions to follow. With AgCredit going to the web in August 2004 the WLS link will be lost. The use of AgCredit data and related WLS codes for workload will be lost. PROPOSED SOLUTION: NTO notify the field timely as to the change, work with Budget to correct the queries, and notify the servicing office to do manual counts as necessary. Concurrently IT should create a report that be run on the Web AgCredit program to provide the data for the manual count to insert for workload. NATIONAL OFFICE RESPONSE: AgCredit will be on the Web but the county will still be able to do WLS for servicing actions in MAC to count for workload. NACS DISCUSSION The AgCredit system includes a Query function for workload and this is being run and entered by National Office for mid year workload reporting.

RESOLUTION 8

CONCERN: The form FmHA 1940-1 "Request for Obligation of Funds" completed in MAC is hard to read after print out. This is due to the fact that the information entered in to the form does not print out in bold type. It would be easier to read if the information was in bold type. PROPOSED SOLUTION: Change the MAC system to that information entered into the form is printed out in bold type or redesign the form to make the form easier to read. NATIONAL OFFICE RESPONSE: The national office is currently revising the 1940-1 form. Many unnecessary items are being removed from the form. When the new form is complete, MAC will be updated with the new form. This should make the form easier to read because there won't be as much information on the form. The Web Direct Loan System is currently being designed and will take this recommendation into consideration. NACS DISCUSSION Use the version off the forms site. A revised version will be posted soon.

RESOLUTION 9

CONCERN: The DALR$ 2000 V 2.4 program required that the proposed loan servicing date be entered into the basic borrower information screen. The exact same loan servicing date must be entered again in the existing loan screen. In the process of making changes

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to the loan servicing date (accrual date) in the existing loan screen, it is easy to forget to change the proposed loan servicing date (accrual date) in the basic borrower information screen.

PROPOSED SOLUTION: Revise the program so that the loan servicing date only has to be entered in the basic borrower information screen once and auto-fills the same date (accrual date) in the existing loan screen. NATIONAL OFFICE RESPONSE: Not an issue: DALR$ 2000 v3.7 (current version) the loan officer does not have to reenter the servicing date. NACS DISCUSSION No comment

RESOLUTION 10

CONCERN: GIS and GPS have many uses in the FLP programs, however FLP personnel are not being trained nor informed of the benefits of this technology. Examples include: 1. Marking location of hazardous materials; 2. Marking locations and boundaries of conservation easements and wetland easements; 3. Creating and or mapping a legal description for FO applications; 4. Using a copy of aerial photo on laptop/handheld while conducting farm visit to verify property and boundaries; 5. Use in conjunction with real estate appraisals; 6. Combined with street atlas it will provide detailed directions to sites; 7. Overlay topo for use of historical and endangered species determinations. PROPOSED SOLUTION: Include/provide for FLP personnel to have training in GIS/GPS, so they can take advantage of this technology. NATIONAL OFFICE RESPONSE: Work with FLP GIS Coordinator to allow their field personnel to participate in current FSA GIS/GPS trainings managed and run by ITSD. NACS DISCUSSION This continues to be a concern and National Office is aware and in support of FLP being trained in GIS/GPS. Problem in funds to pay for training. Suggest you work through your state GIS coordinator to obtain training but understand the states do not have training funds either.

RESOLUTION 11

CONCERN: SCIMS does not identify individuals as FLP borrowers. This is recommended so that offices other than the servicing center will be flagged that a particular borrower is an FLP borrower. It would also reduce the duplication of entering all information in SCIMS and then having to enter only the FLP flag in name and address. PROPOSED SOLUTION: Modify SCIMS to allow an FLP flag that will download to the SYS 36. NATIONAL OFFICE RESPONSE: A request for adding the FLP flag to SCIMS has been made, awaiting modification.

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NACS DISCUSSION This is now a high priority and will be implemented as a “program participation” that will include FLP, FP programs, NRCS, RD etc.

RESOLUTION 12

CONCERN: With present EFT capabilities, FLP employees can only enter one vendor at a time per borrower to pay per day at loan closing. This causes employees to have to do one transaction each day for each vendor on a borrower. PROPOSED SOLUTION: Change EFT requirements to allow more than one vendor to be paid at a time.

NATIONAL OFFICE RESPONSE: This would make the issuing of disbursements easier however; it would require changes to both the EFT and PLAS. The 1C transaction would need a vendor identifier added to the input transaction and the EFT system would need unique identifiers added to the file for the 1C to match. Currently the 1C uses the State, County, ID Number and Loan Number. NACS DISCUSSION John agreed to look into the possibility of doing this, however it will require modifications to the 1C transaction and the EFT system. With the 1C transaction moving to the web under the Loan making system it is not known if this will be implemented.

RESOLUTION 13

CONCERN: An X needs to be placed next to CNCI on the first page of the AI screen in order to get the non-capitalized amount on the second page of the AI screen. Many times it is possible that the non-cap interest is not being calculated because not all personnel are aware that the X needs to be placed by CNCI. PROPOSED SOLUTION: Have the AI screens reflect non-cap interest rather than having to input an X to have non-cap interest calculated. NATIONAL OFFICE RESPONSE: The CNCI field actually requires a Y to be entered to perform the non-capitalized interest computation. However, for servicing purposes all interest after 04-30-92 is capitalized interest. On the AI status screen the total payoff (TPOF) field systematically computes the amount to pay the loan in full as of the effective date of the payoff. The non-capitalized interest amount is included in the calculations. No change to this screen is recommended. Non-cap interest is automatically calculated and displayed on the second page of the AI screen. There is no need to enter an X (or Y) in the CNCI field. The following fields on the AI screens can be used to determine the unpaid non-cap interest: NCLA - NCCA = unpaid non-cap interest DNLA - DNCA = unpaid deferred non-cap interest

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DFLA - DFCA = unpaid deferral CPIN reflects the total unpaid balance of non-cap interest, deferred non-cap interest, and deferral.

NACS DISCUSSION Use the PF screen for pay offs as this includes all debts due and has a warning for the ER.

RESOLUTION 14

CONCERN: When pulling AI screens to verify payments and payoffs, SAA are not being reflected in the payoff amount and is very easy to overlook an SAA. PROPOSED SOLUTION: When a loan has an SAA, the TPOF on the AI screen should reflect a warning that an Equity Recapture account exists. NATIONAL OFFICE RESPONSE: An equity record establishes its individual loan number. The AI status screen is viewed by specific loan number and therefore would not reflect information pertinent to the loan number established by the equity record. The ER status screen is used to view equity recapture information. The LA screen which lists all loans and pay-off information does display a message that the payoff amount is incomplete if an equity record exists. The PF screen which is used to obtain pay-off balance by loan also displays a message that the pay-off amount is incomplete when an equity record exists. No change to the AI status screen is recommended. Shared Appreciation Agreement (SAA) is not reflected in the payoff because a payoff amount doesn't exist for the Equity Record until the SAA is triggered and an appreciation amount is established. The AI screen was not set up to be the source for obtaining a payoff. The PF screen should be used, and there is a warning to indicate that an Equity Record exists. NACS DISCUSSION Use the PF screen for pay offs as this includes all debts due and has a warning for the ER.

RESOLUTION 15

CONCERN: We need one place and one place only to get a complete payoff on loans. The current PF screen can be confusing. The number next to payoff amount is sometimes not the total payoff. This has caused problems with misreading of PF screens. PROPOSED SOLUTION: Develop a true PF screen. The screen only needs to show unpaid principal, unpaid interest, daily accrual and total payoff amount in one clean accurate screen. NATIONAL OFFICE RESPONSE: The Finance Office does not use the PF screen however; the field office should have a screen to use for pay-offs that is all inclusive. The payoff should include all principal, interest, non-cap interest, etc.

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On the PF screen the total payoff amount is found in the last column (TOTAL) on the line labeled PAYOFF. Several accounts were checked that included all of the following on a single loan: unpaid loan balances, miscellaneous expenses, non-cap interested, deferral, and installment set-aside. In all instances, the PF screen accurately reflected the total payoff amount for the loan. NACS DISCUSSION Use the PF screen for pay offs as this includes all debts due and has a warning for the ER. John asked for a resolution on how the field would like this screen to look for easier reading.

RESOLUTION 16

CONCERN: USDA has acquired Arcview software and is digitizing soil surveys and othroquad photos. Assessors and various government entities are developing digital maps and datasets that are of use to FSA staff, especially appraisers and environmental coordinators. A CRP extension to Arcview has been developed to support Farm Programs. PROPOSED SOLUTION: Advocate in the Steering Committee and elsewhere that FSA:

1. develop an appraisers and an environmental officers Arcview extension to automate repetitive tasks in support of these positions.

2. State IT Administrators need to include the staff appraiser and environmental coordinator in the “global group” with access to all servers.

3. pursue all possible uses of GIS-GPS and the Arcview software by Farm Loan Approval Officials.

NATIONAL OFFICE RESPONSE: In reference to numbers 1 & 2 above, building the tool can be accomplished to support the program, and should ease the workload responsibilities of Farm Loans staff, provided detailed, accurate requirements are laid down for this effort. Through formal requirements gathering, definition and refinement processes, site/staff surveys, and defined software development processes, the needed application(s) can be delivered. To be ultimately successful, IT staff and all key stakeholders must be actively involved in the development of this solution. In reference to #3 above, again a detailed site/staff survey and requirements gathering process must be implemented to ensure useful end results. NACS DISCUSSION Training is a major issue and funds are not available this FY.

RESOLUTION 17

CONCERN: Agency computers have ArcGIS software however the use of this software is very complex. Appraisers and loan officers have information analysis needs involving real estate location, topographic features, soil productivity, and land use. GIS allows the analysis and display of multiple layers of data, such as currently available in support of CRP.

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PROPOSED SOLUTION: The agency needs to develop an “extension” to support the use of ArcGIS. This extension would simplify the display of land use by cropland, pasture, woodland, site, roads & waste. The extension would list by class the acres by soil types found in the cropland and calculate the average soil productivity index. NATIONAL OFFICE RESPONSE: Building the tool can be accomplished to support the program, and could help with the display of map layers and calculation of needed indices for Farm Loans staff, provided detailed, accurate requirements are laid down for this effort. Through formal requirements gathering, definition and refinement processes, site/staff surveys, and defined software development processes, the needed application(s) can be delivered. To be ultimately successful, IT staff and all key stakeholders must be actively involved in the development of this solution. NACS DISCUSSION Training is a major issue and funds are not available this FY.

RESOLUTION 18

CONCERN: When the producer comes into the USDA Service Center to file an acreage report with Farm Programs they also are asked to supply the same information to Farm Loan Programs for the purposes of cash flows and previous years history. PROPOSED SOLUTION: Work with the program sponsors of Farm Programs and Farm Loan Programs software development to incorporate the new GIS acreage reporting tool into the Web Farm Business Plan (WFBP). The producer should then be able to report once and data would be available for both divisions of FSA. NATIONAL OFFICE RESPONSE:. The goal of the agency is to eventually share data across program lines. FLP priority is to reengineer our applications toward one time data entry for FLP information. Farm Programs (FP) is at the beginning steps of reengineering their applications. With their reengineering efforts, FP is sharing with us the direction they are taking so that in the future we’ll be able to share data across program lines. In the meantime, look forward to one time data entry for FLP producer information. NACS DISCUSSION No comment.

RESOLUTION 19

CONCERN: The web portal for the Office Information Profile System (OIP) indicates the CED as the contact for FSA in the Service Center and provides the CED’s email address. If the potential FLP customer emails the CED the FLP person responsible to respond may not get the email timely. PROPOSED SOLUTION: Add the FLP loan official’s to the OIP showing appropriate areas of coverage. Provide the automated forwarding to the County Office email address when the user clicks on the email address shown on the

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web site. (I.E. click on________ and the window opened to send the email pre-fills the cc: to__________) NATIONAL OFFICE RESPONSE: Work has been completed to modify OIP to include the FLP Managers information. The OIP version is in Acceptance Testing. Deployment strategy will be discussed at the next FLP Steering Committee. NACS DISCUSSION Contact you state coordinator to have your office information updated or corrected. National Office will also consider using the SC email address instead of individual email of the CED or FLM.

RESOLUTION 20

CONCERN: Many offices have purchased copy machines with networking capabilities that can copy, scan and FAX. After investing resources for this equipment they have been unable to get the copiers connected to the network because they were not purchased by CCE. PROPOSED SOLUTION: IT staff and CCE should make a commitment to network the copiers. NATIONAL OFFICE RESPONSE: We do have some issues that must be addressed before a decision can be made. The first being, that there are several different makes/models of copiers in the Service Center Offices. The drivers for these copiers would have to be certified in the CCE IO Lab before they could be deployed and the copiers connected to the network. FSA would have to survey the Service Center Offices to determine the makes/models of FSA copiers that are network capable. This would give FSA and CCE a better idea of how many “drivers” would need certification from the CCE IO Lab. A determination would need to be made as to whether these drivers would be installed on the network server or on the workstations. If installed on the network servers, the drivers would have to be digitally signed drivers before they could be installed and certified by the CCE IO Lab. If installed on the workstations, the drivers would not have to be digitally signed, but they would have to be XP compatible drivers and the driver would have to be installed on every workstation that needs to interface with the copier. Secondly, a determination would need to be made on whether there are enough network ports to connect the copiers at the Service Center level. Depending on the number of makes/models of copiers in the Service Center Offices, this could put a burden on the CCE IO Lab in testing and certifying the drivers, along with their existing workload. In previous decisions with CCE on this issue, the response was that they were evaluating as part of a FAX solution, the “all-in-one” fax, printer, and scanner systems that most major manufacturers have available. This kind of machine would allow for copying and printing on the network. FSA will contact CCE regarding the status of the “all-in-one” solution and to revisit the copier issue.

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NACS DISCUSSION This will be passed along to ITS. However, due to the variety of equipment in the field and the need to make them all CCE compliant prior to networking them, it is unlikely ITS or FSA will have the time and funds to accomplish this. Respectfully Submitted, __________________________ _________________________ Everett Purrington, Zone A Melody Julian, Zone B __________________________ _________________________ Sue Meyer, Zone C William Husband, Zone D ___________________________________ John Nassif, Chief Farm Credit Applications

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MANAGEMENT/PERSONNEL COMMITTEE The Management/Personnel Committee of the National Association of Credit Specialists met with the National Office Division Directors and their staffs on March 16 & 17, 2005 to discuss the resolutions adopted at the national convention in Louisville, KY. in June 2004. We also discussed some of the 2003 Management/Personnel Resolutions that we felt were as yet unresolved and several other Management/Personnel issues. We met with Doug Frago, Deputy Administrator for Field Operations, John Chott, Jr, Assistant to the Deputy Administrator for Field Operations, John Williams, Deputy Administrator for Management, Pat Farmer, Director, Human Resource Division WDC, Barbara Boyd, Branch Chief, Special Projects, Planning & Coordination Staff (sitting in for Gary Helding) and Donald Saunders, Chief, Employment Branch, KCMO. The meeting was very informative and we had frank and open discussions regarding all of our resolutions as well as other issues that the Management/Personnel Committee brought forward including four concerns from the 2003 Resolutions. We would like to express our thanks to the National Office staff for their support of the NACS Resolution process and their willingness to meet with us on such short notice. I would personally like to express my thanks to each of the Management/Personnel Committee members and alternates for their hard work and dedication to NACS. 2004/2005 Management Committee Members and Alternates Zone A Stu Skidmore, WA; Rob Lowe, ID; Alt. Zone B Diane Jo Hiles, SD; Mark Moser, NE; Alt. Zone C Bill Lau, OH; Zone D Bob Parris, SC; Stu Skidmore, Chairperson, Management/Personnel Committee

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MANAGEMENT/PERSONNEL RESOLUTIONS RESOLUTION 1

CONCERN: Expired national notices often remain in effect beyond the expiration date. Appeals have been lost because decisions were made based on expired notices. PROPOSED SOLUTION: NACS proposes to work with management to put in place a system to reissue expired notices or issue an amendment to revise (the) handbook. NATIONAL OFFICE RESPONSE: We agree that expired notices are a concern. Farm Loan Programs has committed to do a better job either reissuing notices or incorporation the necessary provisions in the appropriate handbook prior to expiration of the notice. Further, Farm Loan Programs will continue to work with other program areas that issue notices/handbooks impacting Farm Loan staff to assure that notices and handbooks are kept current. NACS Discussion: All Divisions agreed that the Agency needs to do a better job to see that this is not happening. Employees do have the EPP capability to check on the accuracy of their pay information.

RESOLUTION 2

CONCERN: With the expected retirement of many FLMs over the next 3-5 years and the resulting influx of new FLOTs, FSA needs to formally address farm management training for the many newer employees in credit positions. With the increasing number of new FLOTs without direct farm backgrounds and/or college farm management education, these employees are in a much more difficult position in dealing with customers and lenders regarding farm management issues. Examples of this are marketing plans, crop and livestock revenue insurance decisions, capital purchases, leasing arrangements, depreciation, improving crop and livestock efficiency and management, tax and record keeping issues, etc. PROPOSED SOLUTION: FSA should consider courses provided by the American Society of Farm Managers and Rural Appraisers (ASFMRA). Specifically: M-10-Principles of Farm Management, this course may be

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completed online. This would be a good course for a FLOT or less experienced FLO. M-20Economics of Farm Management; this is a higher level course that would be beneficial to someone who is beyond the level of M-10. With agricultural operations becoming more sophisticated, the FSA credit staff needs to completely understand the operation in order to help meet the applicant’s financial needs. This type of training would directly address the need for a staff able to provide supervised credit. NATIONAL OFFICE RESPONSE: The Deputy Administrator for Farm Loan Program intends to work with the Human Resources Division to establish a task force to re-evaluate the existing FLOT Training Program early in fiscal year 2005. The task force will be charged with recommending revisions to modify and improve the existing program and will consider all options available for farm management training. NACS DISCUSSION: This project is being lead by Carolyn Cooksie. DAM feels that the 2006 Budget will allow for this project to be funded since they will not have to take the difference of the President’s raise and Congress’s raise out of their Budget. It was unclear of the status of the Task Force addressing FLO Position. The FLO position has been identified as a mission critical position and is one of the top five highlighted positions.

RESOLUTION 3:

CONCERN Currently the Leave and Earnings Statement does not indicate whether health insurance premiums are deducted before taxes. If an error is found regarding premium conversion, the correction can only be made to future pay periods and not retroactively due to IRS regulations. PROPOSED SOLUTION: Establish a section on the Leave and Earning Statement and the Employee Personal Page to show what is deducted before taxes – FEHB premiums and TSP contributions. NATIONAL OFFICE RESPONSE: The Leave and Earnings Statement currently does not have a specific Premium Conversion participant indicator. The National Finance Center’s Personal Page provides an explanation of Premium Conversion, but does not clearly indicate that an employee participates. The Human Resources Division agrees that a Premium Conversion participant indicator would be beneficial to employees in determining their correctness of pay and agrees to request, through the Agency’s Ag Pug representative, to explore the feasibility of such an indicator on both the Leave and Earnings Statement and NFC’s Personal Page. The results of that review and subsequent action, if any, will be communicated to NACS. NACS DISCUSSION: This was established by law. It has to be changed by NFC. HRD agreed to include it in there list of updates to NFC. Ag Pug is a group that reviews requests to change policy.

RESOLUTION 4:

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CONCERN: Notice PM 2398 allows National Office staff to submit applications for Net Training courses through the GoLearn website. This opportunity was not made available to field staff. PROPOSED SOLUTION: Online training opportunities should be made available to all staff and applications should be accepted from any interested employee. NATIONAL OFFICE RESPONSE: Budgeting for obtaining licenses for web-based training offered through AgLearn (the successor to GoLearn) is provided from different sources. During fiscal year 2004, CCE provided funding for 20% of the employees in each State Office. The agency is currently negotiating with AgLearn to provide licenses and cost effective online training for all FSA employees. We will keep NACS apprised of the results. NACS DISCUSSION: AgLearn should be available to all employees. They would like a list of suggested courses that should be added. USDA does not readily have staff available to develop courses online so the development process is slow. The firewall license is also an issue being dealt with. It was suggested that a task force be formed to develop training that employees need.

RESOLUTION 5

CONCERN: Currently employees must sign a waiver to opt out of FEHB premium conversions. When a change is made by an employee to FEHB, the Administrative Section must input this change into their current personnel software. The concern is that the administrative personnel sometimes forgets to select either participating or not participating in premium conversion. If administrative personnel forget to select the participating premium conversion, the software automatically selects not participating. This causes the employee to pay their FEHB premiums with post-tax dollars, thus resulting in a higher taxable wage. If the correct premium conversion is not selected and an error is found at a later date, the correction can only be made to future pay periods and not retroactively, due to IRS regulations. PROPOSED SOLUTION: Change the software that administrative personnel utilize to make changes to FEHB to automatically select participating in premium conversion. If they have a waiver on file then they can then make that selection to not participate in premium conversion. This would reduce a step for administrative personnel and ensure all eligible employees receive this benefit. NATIONAL OFFICE RESPONSE: The Human Resources Division will submit a request to the Administrative Management Development Center to modify I*CAMS to change the current Premium Conversion default of “No” to a mandatory field with a required “Yes/No” selection for all applicable FEHB transactions (no default). NACS will be kept apprised of the results of this initiative. NACS DISCUSSION: This cannot be changed through ICAMS. It has to be requested through NFC. With ICAMS conversion to NFC, this request will be

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included in that process. HRD stated that the employee needs to make a conscious decision and that there will be no default. It will be a required field.

RESOLUTION 6

CONCERN: Notice 16 AO requires that all offices will provide basic FLP services. Some offices do not have a PT assigned FLP responsibility. PROPOSED SOLUTION: Ensure that there is at least one PT in each county who is assigned FLP duties. NATIONAL OFFICE RESPONSE: It is management’s goal to ensure that a PT or other qualified employee to be available in every Service Center office to provide servicing to FLP borrowers. However, funding for staff is a major controlling factor. While 16-AO does state that in Type 1 offices a PT shall be assigned FLP as a “primary” responsibility, Type 2 and 3 offices are to be staffed “adequately” to provide FLP servicing. A CED could provide the servicing needs. SEDs are attempting to manage Service Center program delivery as best as possible within their limited resources. This issue will be discussed in-depth during the National Farm Loan Program training in Nashville in December. NACS DISCUSSION: With the budget/staffing constraints, future 1165 Plans will most likely eliminate Type 2 & 3 Offices. States need to look at what makes sense in their location for adequate delivery of FLP.

RESOLUTION 7:

CONCERN: There is no workload item to capture time FLP employees contribute while detailed to other offices. This results in time gained for the receiving office and no credit given to the office contributing the time. Thus, the giving office loses personnel as a result of lost workload. PROPOSED SOLUTION: Create a workload item that captures time spent detailed to other offices, including state office, DD and other county offices. NATIONAL OFFICE RESPONSE: NACS is correct that offices do not capture time in their workload report for employees who are detailed to another office. This is true of both GS and CO employees. The employees are completing units in the other county office during their detail that convert to NWD’s on the workload reports. If there was a work item in the employees’ home office workload report to capture the days on detail, the employees’ time would then be counted twice. Many states have county offices complete a memo at workload time that lists the contributions employees may have made during the year in support of the State Office or another county office. It is suggested that State Offices keep details in mind when completing staffing distribution. NACS DISCUSSION: A task force is in place to recommend a system to replace the present system. This task force is made up of a broad cross section of employees.

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RESOLUTION 8 CONCERN: One of the 2002-2003 adopted resolutions involved training for FLOs. The national office response stated that employees may wish to seek individual training through online courses, independent training courses, etc. HRD agreed to provide a listing of available training courses to NACS so the training courses could be published. However, these training courses have not been made available. PROPOSED RESOLUTION: Develop a system for notifying employees of the courses available through HRD, OPM’s GoLearn, as well as any CD-type training materials available. Maybe even establish a library tape system whereby these CD materials may be checked out by employees and then returned once the training is completed. NATIONAL OFFICE RESPONSE: Website links to OPM and HRD training are available on the HRD website. Learning Center Libraries are located in HRD Training Offices in Washington, DC and Kansas City, as well as some State Offices, where educational videos, CDs and books are available to all employees. The content of those libraries is available on the HRD website. Please refer to the response to Resolution 4 for information on online training available through AgLearn. HRD will shortly issue communication to all employees regarding the availability of training resources in the HRD Learning Centers. NACS DISCUSSION: All employees should be completing a Individual Development Plan (IDP). This is the only vehicle to ensure training needs are met.

RESOLUTION 9

CONCERN: Employees of the FSA have unique experiences and abilities needed by international organizations that provide micro credit lending assistance to developing countries. These organizations, such as ACDI-VOCA receive grants from the USDA food programs to deliver advice to credit cooperatives that function similarly to the farm loan programs. FSA employees can assist in developing business plans, collateral supervision and other loan administration tasks better then most commercial lenders due to the emphasis on supervised lending. Currently, only a few employees are permitted to use administrative or official leave to accept these assignments. Most are asked to use their annual leave. The assignments are on a volunteer basis, with no payment other than out-of-pocked expenses. PROPOSED SOLUTION: FSA should adopt a policy allowing employees to use up to 15 days admin leave each year (similar to military leave) to complete agency-approved volunteer assignments. These assignments would need to utilize job-related skills, benefit a non-profit or governmental entity and be scheduled with the least possible conflict to normal duty assignments.

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NATIONAL OFFICE RESPONSE: An initiative such as this must be consistent with Departmental policy on volunteerism. HRD is tasked with contacting the Department to explore the feasibility of this resolution. NACS will be kept apprised of the outcome. NACS DISCUSSION: NO is waiting on a response from OPM and OGC to insure that this is authorized.

RESOLUTION 10 CONCERN: GIS and GPS have many uses in the FLP programs. However FLP personnel are not being trained nor informed of the benefits of this technology. Examples include: (1) marking location of hazardous materials; (2) marking locations and boundaries of conservation easements and wetland easements; (3) creating or mapping a legal description for FO applications; (4) using a copy of aerial photo on laptop/handheld while conducting farm visits to verify property and boundaries; (5) use in conjunction with real estate appraisals; (6) combine with street atlas to provide detailed directions to sites; and (7) overlay topo for use of historical and endangered species determinations.

PROPOSED SOLUTION: Include/provide for FLP personnel to have training in GIS/GPS so they can take advantage of this technology. NATIONAL OFFICE RESPONSE: Farm Loan Program’s Program Development and Economic Enhancement Division (PDEED) is currently reviewing possible uses of GIS and GPS. NACS’s concern has been forwarded to PDEED for consideration. Once policies have been developed regarding the uses of GIS/GPS in FLP, they will be communicated to all applicable parties. NACS DISCUSSION: This needs to be reviewed in the NO by John Johnson and Carolyn Cooksie.

RESOLUTION 11

CONCERN: FLP goals are established at the national level and then sent to states to set state goals. Employees delivering the programs are not adequately consulted during the process. PROPOSED SOLUTION: Prior to setting of national and state goals, representative associations should be consulted for input on setting specific goals. NATIONAL OFFICE RESPONSE: National and State level annual performance goals are based on several factors, including past performance, current economic forecasts for the agricultural sector and funding levels. At the beginning of each fiscal year, Farm Loan Chiefs are given the opportunity to provide input on performance targets and the targets are discussed at the annual Farm Loan Policy meetings. These inputs, along with the previously identified factors, are considered when developing performance goals for the following

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fiscal year. State employees are encouraged to work closely with field office employees and the employee associations when setting goals for the State.

NACS DISCUSSION: 2006 will have a five tier system. The future Performance Plans will be developed on the NO Goals and Objectives of the Agency.

RESOLUTION 12

CONCERN: Vacancy announcements for CED positions list description of duties that include directing and managing Farm Loan Programs. This appears to be a violation of AO-16. PROPOSED SOLUTION: Require the states to advertise all CED positions in a consistent manner throughout the nation. NATIONAL OFFICE RESPONSE: The Human Resources Division will issue a notice to States specifying language to be used in the description of duties on CED vacancy announcements. This language will be consistent with CED position descriptions in Handbook 27-PM. NACS DISCUSSION: NO will follow-up. This should not be happening. They will communicate with DAFO.

RESOLUTION 13

CONCERN: In order to utilize the information technology available, it would be beneficial and significantly improve efficiency if a “search” type process within the FSA website could be developed which would allow the user to enter a subject or topic and be directed to all applicable notices, regulations and CFR references. PROPOSED SOLUTION: That a “search” be developed similar to the forms search which would allow FSA employees the opportunity to research topics within the FSA regulations, notices and CFR, as well as other resource material on a national and state level to improve the efficiency of this type of research. This would significantly reduce time needed for research of, in particular, those actions which are only utilized on an occasional basis and if utilized, would reduce questions to state specialists and assist in assuring the most current directives are being implemented. NATIONAL OFFICE RESPONSE: There are a number of web locations available for searching the type of information requested. One of those is the Document Management Information system. The DMIS website is located at: http://dmis.fsa.usda.gov/rware/home.hmtl#89227. DMIS is only available on the FSA INTRANET. Some handbooks are excluded (per WDC) due to content information. Example: warehouse examiners handbooks that include information with formulas used for calculation. DMIS offers the following search features:

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• If the handbook number is unknown, you can drill down by category until located

• If handbook number is known: -click in the “Current FSA Handbooks” box - click on the word “search” on top of the page - type the handbook number (for example, 7-ADM) in the “search for” field - click the “Boolean” radio button - click on “search” to the right of the “search for” field (all handbooks that reference 7-ADM will come up) - go to the appropriate handbook - click on the button that looks like a gray page with a red acrobat symbol to bring up the handbook. The following additional websites are available for access:

Code of Federal Regulations at www.gposccess.gov/cfr/index.hmtl Some Farm Program handbooks at http://.fsa.usda.govdafp/psd/# FSA notices at www.fsa.usda.gov/dam/forms/notices.asp National Archives & Records Administration Code of Federal

Regulations at http://www.access.gpo.gov/nara/cfr-table-search.hmtl Search the US Code at http://uscode.house.gov/search/criteria/php GPO access: The Federal Register Main Page at

http://www.gpoaccess.gov/fr/index.hmtl USDA Departmental Regulations, Notices, Manuals and Secretary’s

Memoranda at http://www.usda.gov/da/property/DR.htm Index of OCIO/Directives/DR at

http://www.usda.gov/ocio/directives/DR/

NACS DISCUSSION: NO agreed that a “Google” type search would be helpful.

RESOLUTION 14

CONCERN: In many State Offices, the Farm Program responsibility is divided among several GS-13 Program Specialists. The entire Farm Loan Program is managed by a single GS-13 Farm Loan Chief, assisted by GS-12 Program Specialists. The GS-12 Farm Loan Specialists have duties comparable in complexity to the GS-13 Farm Program Specialists. Farm Loan has sub-responsibilities of Loan Making (direct and guaranteed), Loan Servicing, Appraisal and Environmental whose duties are often more complex than the counterpart positions of Price Support, Conservation, Compliance and Production Adjustment. PROPOSED SOLUTION: Farm Loan Specialist positions need to be reevaluated in light of their duties and responsibilities. Management is encouraged to establish the Farm Loan Specialists (including Appraisers) as GS-12/13 positions depending on duties assigned. NATIONAL OFFICE RESPONSE: The Classification Standards for the GS-1145 Agricultural Program Specialist series and the GS-1165 Loan Specialist are quite different. The standard for the GS-1145 series, which is used for State Office

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Program Specialist positions, allows the establishment of separate “key program specialist positions in production adjustment, price support, conversation and similar positions. If classification criteria is fully met, each of these program areas may support a GS-13 “key specialist”. In contrast, the standard for the GS-1165 series provides only a single “agricultural” specialization appropriate for FSA Loan Specialist positions. There is no provision for breaking this specialization into separate program areas. GS-12 is the highest grade that can be supported for nonsupervisory Farm Loan Specialist in FSA’s State Offices. At the GS-12 level, Appraisers “use knowledge of a wide range of appraisal concepts, principles and practices to appraise and/or review the appraisals of properties with complex characteristics and to analyze complicated valuation problems. This may include resolving value problems with limited comparable sales, multiple or questionable ownerships, numerous encumbrances (e.g., easements and rights of way that conflict with the proposed uses), various possible, highest and best uses that may be entirely different from current use, unusual physical constraints, sensitive environmental concerns, etc. This responsibility level is consistent with the work performed by FSA Appraisers and the position is appropriately classified as GS-12. NACS DISCUSSION: Perhaps all Program Specialists without regard to whether or not they work in the Farm Program or Farm Loan Program environment should be classified within the GS-1145 series.

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OTHER TOPICS FOR DISCUSSION

1) Many FSA managers have not had training on implementing a multi-tier evaluation system. For a performance based system to work, employees must have confidence in the manager who is evaluating them. What training plans are being formulated to assure there is consistency from state to state, and that managers are competent to implement a performance based evaluation system as opposed to the current pass/fail system. AGENCY RESPONSE Additional training is planned. The initial rollout for 2005 had to be completed within a very short timeframe that did not allow for extensive training.

2) The Perot Study clearly indicates the current Workload/Work Measurement

system is not providing the type of data needed by the Agency in order to evaluate budget and staffing needs. How do you foresee BPMS being used in the creation of a system to measure work performed by the employees? AGENCY RESPONSE There is presently a task force in place working on recommending a system to replace the present system. The task force is made up of a broad cross section of employees.

3) Many employees see BPMS as “pay for performance”. First, is this the case,

and if so, how will the Agency assure there are adequate funds available to reward outstanding employees given the current budget shortfall predicted by the Agency. Additionally, for FY 2006 will the National Office be issuing guidelines requiring awards be linked to specific performance goals? AGENCY RESPONSE BPMS is not yet a pay for performance system but maybe in the future. For FY 2006 there will be no linkage between awards and performance goals.

4) Employees were recently given a list of goals from which to select to “link” performance to the strategic plan. It appears the list was developed by line managers. For state office FP and FLP Specialists, the choices do not appear to be realistic. The Specialists do not have access to the data to monitor the goals given, nor as non-managers are they within the responsibility of these positions. For example, one choice is to make progress toward using EFT 95% of the time for both the FP and the FLP Specialist. A Specialist has a) no information as to what the achievement rate is, and b) are not in the chain of command to insist to this be done. Why would this be an evaluation item for a Specialist’s performance? Another one is assuring that 100% of payment applications are accurate and complete. FLP Specialists have nothing to do routine collection and remittance of payments, monitoring or otherwise, and have no access to information to determine whether payments are accurate, or when they are made by the borrower without accessing each borrower’s account information

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individually through the Finance Office. Another one is making sure UCC continuations are processed prior to expiration. Unless the Specialist would happen to catch a lapsed one during an office review, they have no way of monitoring this. Will these items be reviewed and refined prior to entering into the multi-tier rating system? Are State Office Staff supposed to set up redundant monitoring systems and make the county staff report these things so Specialists can monitor them? AGENCY RESPONSE The HRD staff stressed that the task force that recommended the present goals that are contained in the Performance Plan Matrix were examples to use and were developed by a cross section of employees. NACS DISCUSSION There was quite a discussion regarding the apparent lack of training given to front line managers and the apparent disparity that has resulted. Don Saunders stressed that the criteria has to be as finite as possible, that it be measurable and attainable. It sounds as though HRD will be reviewing the matrix and improving training prior to adopting the multi-tier evaluation system in 2006.

5) Has DAFO established a follow-up with the SED’s to insure that the 1165 plans

were implemented as submitted? AGENCY RESPONSE DAFO had established a review and follow-up of the 1165 plans for every two years. The review was due in the fall of 2004 and will be completed when the states reorganization project is completed this year.

6) Who should be the supervisor of a non-supervisor FLM, FLM or DD and how is

that person selected? AGENCY RESPONSE Can be either, up to SED. Grandfathered FLM positions will become FLO positions when FLM’s leave.

7) With the advent of the new performance based rating system, how do we insure

employees that they will receive a fair rating in those cases where the rating supervisor is located a great distance away, visits the work site infrequently and is unfamiliar with the work that the employees perform? AGENCY RESPONSE The National Office would hope that the supervisor completing the rating would rely upon input from the day to day supervisor. NACS DISSCUSSION They realize that this reliance is not ideal and in some cases might not exist. However, the specificity of elements in the new performance work plan should assist the rating supervisor in rating those employees located away from the supervisor’s headquarters office.

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8) Has the PM Notice regarding the new comp time for travel been issued and what is its affect on non-exempt employees and FLSA OT? Our state (WA) was allegedly told by DAFO that employees who travel on weekends for the benefit of the agency are no longer eligible for OT and can only receive comp time. Please clarify. AGENCY RESPONSE The Notice has not been issued but will go out in 2 weeks. It will have no affect on FLSA or Title 5 overtime. Its purpose is to allow those employees that are affected to claim comp time for travel that they are presently not permitted to claim.

9) IRM Notice 349 deals with the contact person for FLP. It has been noted that states appear to be ignoring this Notice and have either no contact person listed or the wrong one. AGENCY RESPONSE The National Office will look into this matter. NACS DISCUSSION We stressed that it was not an individual states problem or regional but nationwide.

10) During the 2004 NACS convention in KY a number of questions were submitted

by the audience to the NO for response. A question posed to DAM regarding the issue of complexity being used to support DD grade levels but not used to support FLM grade levels was unanswered. Why wasn’t complexity utilized rather than supervisory criteria to support FLM grade levels? AGENCY RESPONSE The FLM’s fall under 1165 series guidelines which are supervisory in nature. DD’s fall under the 1145 series which does utilize complexity as a grade controlling issue. The DAM speculated that this reasoning was a basis for the distinction between complexity being used for the DD grade and not for the FLM grade. This issue will be further reviewed by a classification/personnel specialist.

11) Online Exit Interviews: Are those interviews being used, what are the results and

what are we learning from the employees leaving the Agency?

AGENCY RESPONSE HRD explained that confidentiality limits discussion on specific positions (i.e., FLM’s) as only one quarter has been completed and not a lot of FLM’s have left the Agency. NACS DISCUSSION The Online Exit is not used as much as they expected, but it is being used more than the hard copy of the exit interview. It appears that employee awareness of the Online exit interview process needs to be improved. This could be made a part of the final paperwork that is completed when an employee leaves the

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Agency. This interview process needs to be completed for all employees separating from the Agency including retirees, resignations and involuntary terminations.

12) Training History in ICAMS: What determines the training that is entered into the

ICAMS Training?

AGENCY RESPONSE HRD explained that any formal training should be documented in ICAMS. NACS DISCUSSION Discussion was held on what formal training was. Examples were given. This will need to be looked into as what appears should be formal training, has not been treated as such. The documentation of the training is for the benefit of both the Agency and the employee. The Agency can support that the training has been given and the employee can support that the training has been received.

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LEGISLATIVE ISSUES COMMITTEE The 2004-2005 Legislative Issues Committee members are as follows; Member Alternate Debra Higgs – UT, Zone A no alternate from Zone A Kelly McMillin – TX, Zone B Gerald (Bubba) Green – TX, Zone B Helena Pitcock – KY, Zone C (Chairperson) Polly Anderson – DC, Zone C Mike Brown – NC, Zone D Leo Beatty – MS, Zone D The Legislative Committee has worked this past year with resolutions that require legislation in order to enact. We brought forward previous resolutions from last year that continue to need the attention of our lawmakers. For example, abolishing term limits on direct loans, and requesting Congress to mandate agencies extend coverage of 50% of the professional liability insurance premiums to non-supervisory Federal Managers. Other very important issues were outlined and discussed during the Day on the Hill, as well, with Federal Managers from other agencies during our business sessions at the FMA Convention. Some such issues are as follows:

• Adequate Funding for FSA Loan Programs • Human Capital Issues • Effectively work toward increasing the loan limits for Direct FO and OL • Support the funding and utilization of the Federal Student Loan Repayment

Program • Legislation to ensure the business of the federal government is conducted in the

public interest (For more details on these issues, please refer to the complete list of Issue Briefs included in this report). FSA was very well represented at the FMA Convention, and more particularly, the “Day on the Hill”. We had 24 members converge upon Capital Hill to discuss issues of concern with our legislators. In addition to our members, there were also 4 NACS-RD members present for the “Day on the Hill”. With this number, we collectively met with 65 legislators, or their aides, to bring to their attention these much needed changes or enhancements in our programs and services to customers. NACS-FSA had more members present for the Day on the Hill than any other agency within FMA! We were

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very well pleased with our attendance and especially from key states that have their Representatives serving as Chairs of key committees such as Agriculture. This year’s FMA Convention was titled “The Silent Patriot…America’s Civil Servant”. The training presented focused on “Modern Approaches to Transforming the Civil Service”. The keynote speaker was U.S. Representative Jon Porter of Nevada, Chairman of the House Government Reform Subcommittee on the Federal Workforce and Agency Organization (formerly the Subcommittee on the Civil Service and Agency Organization). The training day began with the first of four panels of experts – Ron Sanders, Office of Personnel Management (OPM) Associate Director for Strategic Human Resources. The second discussion was led by Comptroller General of the United States, David Walker, who provided the Government Accountability Office’s perspective. The third panel featured Marta Perez, OPM Associate Director for Human Capital Leadership and Merit Systems Accountability; Dr. David Chu, Undersecretary of Defense for Personnel and Readiness, and Hannah Sistare, Director of the Human Resources Management Consortium at the National Academy of Public Administration. Finally, the fourth panel discussion centered on the theme of our Convention this year specifically the pervasive challenge of dispelling negative public perceptions of Federal employees. Delegates heard the compelling views of subject-matter experts Pat McGinnis of the Council for Excellence in Government, Max Stier of the Partnership for Public Service, Stephen Barr of The Washington Post, and Steven Watkins from The Federal Times. The business of the Federal Managers Association, electing new board members for the Vice President, Treasurer and Zone Presidents, was also conducted. Even though the Legislative Committee’s primary responsibility is to prepare for and attend the FMA Convention and Day on the Hill, we also monitor and work on resolutions for the committee. Several of these resolutions are repeats from previous years but we will continue to work toward getting some type of acceptable response from lawmakers. During the past year, the Legislative Committee was also involved with the Tobacco Buyout legislation discussion. We participated in a teleconference with the National Office to discuss concerns about the payments that would be going to our customers, now known as the Tobacco Transition Payment Program (TTPP). Due to FSA mortgages and liens, we felt we should have a valid lien on the payments that would be paid soon under the TTPP. This, however, was not the case. We were informed that OGC had determined that we did not have valid liens on the tobacco quotas and they were not tied to the real estate. We were advised that the payments would be made directly to the farmers/producers unless they choose to give us an assignment, or if they were delinquent, we could collect through offset. We were able to receive answers to our questions first hand and for those states so heavily involved in the Tobacco Buyout, this allowed us to be able to plan for the transition. Not only did the Legislative Committee participate, but we included the FLP Chiefs from NC, KY and VA, along with Pete Adamson, FLM from VA. Attached to this report are the resolutions passed during the convention in 2004. The Legislative Committee is different from the other NACS Committees in that we do not receive responses from the National Office for our resolutions, but must take these issues directly to Capitol Hill. Also in this report, you will find the NACS Legislative

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Issue Briefs and the FMA Issue Briefs that were carried to Capitol Hill and discussed with our Representatives. I would like to thank the dedicated members that attended the FMA Convention and the Day on the Hill for your support and hard work for a very worthwhile cause. We need more members to become involved in this process and be willing to make contacts with their Senators and Congressman. It does make a difference! HELENA PITCOCK Legislative Issues Committee Chairperson 2004-2005 Attachments: 2004 LI Committee Resolutions 2004 NACS Legislative Issue Brief 2004 FMA Issue Brief

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Building Rural America National Association of Credit

Specialists of the

USDA – Farm Service Agency A Federal Managers Association

Conference

LEGISLATIVE ISSUES April 2005

The National Association of Credit Specialists of the Farm Service Agency (NACS-FSA) is a professional organization, which strives to enhance FSA’s delivery of programs and services to our rural customers. NACS-FSA’s membership consists of loan officials and program managers who administer the FSA Title V Credit programs. NACS-FSA is affiliated with the Federal Managers Association (FMA), an organization that represents over 200,000 federal managers, which advocates excellence in public service through effective management and professionalism. In order to enhance FSA programs, services and efficiency to the fullest extent possible, a number of provisions will require legislative action. We ask for your support in making the legislative changes that are necessary to accomplish the following:

1) Abolish term limits on direct loans – Arbitrary term limits place unnecessary burdens on customers at a time when they are growing in their business and unable to obtain private/commercial credit at reasonable rates and terms. Loan customers are moving to commercial credit in a manner which is consistent with their operation. Therefore, term limits are placing burdensome administrative requirements on both the customer and the agency. We solicit your support in removing term limits.

2) Adequate Funding for loan programs – The Farm Loan Programs (FLP) has

achieved a high standard of quality in the whole FSA portfolio. Delinquencies and losses are at all time lows. OMB’s PART Report was very favorable for Farm Loan Programs and we achieved a moderately effective score. Despite improved lending practices, funding of loan programs continues to decline. We encourage and recommend that funding be maintained to meet customer demand.

3) Human capital – FSA and Farm Loan Programs is not unlike other

government agencies in facing a crisis with potential retirees. We estimate that 50% of our loan managers will be eligible to retire in the next 3 years. There is a 2 year training curve to get new loan staff trained. We need to plan for this crisis by hiring trainees and the funding needs to be appropriated for the required training.

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4) Effectively work toward increasing the loan limits for our Direct Loan Programs. The current limits of $200,000.00 for Farm Ownership Loans and $200,000.00 for Operating Loans were set over 20 years ago. Production costs and real estates values have greatly increased over the past 20 years. These low lending limits are greatly limiting our ability to help beginning farmers and Socially Disadvantaged Farmers.

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FEDERAL MANAGERS ASSOCIATION 2005 ISSUES AGENDA 02/18/05

ENSURING EFFICIENT AND EFFECTIVE GOVERNMENT • Congress should pass legislation to ensure that the business of the Federal

government is conducted in the public interest and in a manner that provides for public accountability, efficient delivery of services, reasonable cost savings, and prevention of unwarranted government expenses.

• Congress should prevent Federal agencies from converting government functions to private-sector performance without the benefit of public-private competition.

• Congress should examine and review recent changes to OMB Circular A76. • Congress should ensure that the process for the 2005 round of BRAC is fair and

accountable, and does not compromise our defense readiness. • Congress should maintain a strong public depot system by rejecting efforts to turn

the majority of military upgrade and repair work over to the private sector. • Congress should pass permanent authorizing legislation to eliminate the Federal

Prison Industries mandatory-source requirement government-wide. • Congress should support and promote adequate funding for information technology

(IT) hardware and software enhancements for Federal agencies. • Congress should scrutinize all past and current models of loan asset sales to the

private sector before expanding such sales to other Federal agencies. • Congress should seek to maintain adequate staffing levels and funding in USDA’s

Farm Service Agency field offices to ensure the proper servicing of loan programs. INVESTING IN HUMAN CAPITAL • Congress should support H. Con. Res. 40 and S. Con. Res. 8 to ensure parity in

annual pay increases for Federal civilian employees and military personnel and support resolutions.

• Congress should pass legislation creating a new pay system that provides a premium pay status for Federal managers and supervisors.

• Congress should monitor the implementation and training of managers on legislation that provided increased workforce flexibilities for managers.

• Congress should seek to close the pay gap between blue-collar employees in the Federal Wage System and their private-sector counterparts.

• Congress should pass legislation to makes student-loan repayments tax-free for Federal employees.

• Congress should ensure that Federal Student Loan Repayment Programs are fully appropriated and utilized by agencies.

• Congress should pass legislation to include other critical positions under the term “law enforcement officer,” affording them the same benefits.

• Congress should pass legislation (H.R. 294) to extend the tax benefits to civilian employees serving in military combat zones at parity with their military counterparts.

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STRENGTHENING CIVIL SERVICE • Congress should work closely with the Office of Personnel Management (OPM),

affected agencies and employee groups in developing new personnel systems that ensure merit principles.

• Congress should pass H.R. 633, legislation to help offset the dramatic rise in health insurance premiums under the Federal Employees Health Benefits Program.

• Congress should pass legislation to allow Federal retirees to pay their FEHBP insurance premiums out of pre-tax earnings.

• Congress should pass legislation (H.R. 147) to repeal the Government Pension Offset and Windfall Elimination Provision.

• Revise P.L. 104-208 to include other Federal officials in agency reimbursement of up to 50 percent of the cost of the annual professional liability insurance premium.

• Congress should work with OPM to improve agency participation in the Federal government’s telework/telecommuting program.

• As part of any broad pay reforms, ensure that the additional responsibilities of Federal managers and supervisors are reflected in their compensation.

For more information contact Thomas Richards at the FMA National Office at

(703) 683-8700 or [email protected]

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2004 ANNUAL CONVENTION IN LOUISVILLE KENTUCKY

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JUNE 13, 2004 BOARD MEETING Minutes

Louisville, Kentucky

President Bill Mahanay called the meeting to order at 8:00 a.m. Present were Vice President Mike Priest, Secretary Melissa Cummins, Treasurer Aubrey Sapp, Past President Betsy Senter, Dan Mattson - Zone A, Mark Moser - Zone B, Dan Walsh - Zone C, and Mike Gibbs - Zone D Recommendations were made to Bill for the Audit Committee from the Zone Representatives. They included Scott Bown, UT, Carolyn Blecha, OK, John Simmons, IN and Gretchen Thomas, AL. Recommendations were made for the Election Committee. These included Nels Christiansen, CA, Gerald Green, TX, Jerry Hines, OH and Tonya Washington, AR. Bill reviewed the convention agenda. No changes or additions were noted. Candidates that have announced at this time were Melissa Cummins, Vice President, Mike Gibbs, Treasurer and Cheryl McGraw, Secretary. No one present was aware at that time of other candidates. During the Question and Answer session the zone representatives will gather questions and bring them up front. Questions are to be submitted in writing. Those we do not have time to submit will be compiled and sent in for a later response. Bill will ask Thomas Richards to introduce the sponsors that FMA obtained. Farmer Mac is sponsoring a break and there will be a luncheon for all FMA eligible members sponsored by Wright and Company and Blue Cross/Blue Shield. Mike Styles, FMA President will introduce the sponsors during the luncheon. Helena Pitcock, Convention Co-Chair will present the convention agenda during the opening session. Mike Sullivan, LA has been asked to be the Parliamentarian. Mike Priest will present the convention rules and introduce the committees. There will be an announcement to encourage any member to attend committee meetings of their choice. Board members are also encouraged to sit in on meetings.

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Mike Priest and Betsy Senter will get the plaques from Eric Guenther. Everett Purrington, Denise Lickteig and Mark Drewitz have contributed a lot to NACS by maintaining the web-site and data base. They need to be recognized for this. Mike Priest moved that each be given $100 for this year. The motion was seconded by Dan Walsh. Motion passed. There is an automation room if Board members or Committees need copies. There is an order sheet to complete. We also need to encourage people to visit the IT demos. If people don’t visit, St. Louis will not continue to set this up at future conventions. The agenda for the joint session was reviewed. Mike Priest and Betsy Senter will attend the State President’s meeting. NACS voted to present John Williams, Deputy Administrator for Management with a plaque in appreciation of his support for our meetings and addressing our concerns in a diligent, professional manner. Bill will present this during the Tuesday session. Zone Representatives need to make copies of the resolutions that have been submitted so they can review them during the zone meetings Tuesday afternoon. Changes or additions must come from the Committee or from a Zone. Zone need to have any proposals in writing and have someone lined up to move and 2nd as to the change or addition of a resolution. Betsy clarified that Sunday evening there will be separate meetings for first time attendees and committee orientation. Bill Mahanay and Tami Wilson, President of NASE will introduce the National Office speakers on Tuesday. Bill emphasized Board members should have questions ready for the speakers. Zone meetings need to end by 5 p.m. on Tuesday. Mike Gibbs asked if it was appropriate for his alternate to run the meeting since he was running for National Office. Bill indicated he should let Brent run the Tuesday meeting while Mike is giving candidate speeches and Mike should run the meeting on Wednesday while Brent was campaigning for the Zone Representative position. It was also suggested that zone representative elections should be held after the election of officers. Aubrey will ask P.L. Jowers to give the Tuesday morning invocation. Allen Hall, NE will lead the pledge. There was discussion regarding closing out between treasurers. There needs to be a clear line – i.e. does the “old” or “new” treasurer pay the convention bills. It was suggested the Treasurer’s report be convention to convention, as it is confusing to have the report on the calendar year, with a switch in the middle. Delegate certification will be between 7-8 a.m. on Monday. Aubrey and Melissa will certify the credentials.

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All awards will be presented at the banquet in order to keep the meeting moving. Melissa mentioned there are three items, which need to be brought before the membership. These involve training at the convention, use of the Wunder Fund and rotating convention sites. This will be part of the Secretary’s report. Zone representatives stated that we need to develop a protocol for selecting the zone meeting sites. NACS-RD tends to pick the location in some zones and just inform FSA where it will be. On Wednesday morning the Secretary and Treasurer will set up the delegate seating. The Banquet agenda was reviewed. The Board was encouraged to write goals for presentation during the “Old Board/New Board” meeting on Thursday morning. Committee surveys also need to be turned in. Aubrey asked to what extent we would discuss the FMA dues increase. Bill stated it is on the agenda to allow members an opportunity to discuss it. However, if there are no motions to the contrary, our constitution and by-laws require NACS members to be FMA members and we will proceed accordingly. The increase goes into effect on July 1, 2004. Members may be able to make deduction changes through employee express. Bill is corresponding with national office personnel in an effort to streamline the process. Aubrey moved and Dan Walsh seconded to allow shifting of funds between categories. This was discussed via e-mail and approved by the Board. There will also be $400 for membership incentives paid out. Stu Skidmore from WA will take photographs during the convention. Denise Lickteig, NE will assist with typing during the proceedings. Bill thanked the members for their hard work during the year and for the professional attitude shown by all. There being no further business, the meeting adjourned at 10:10 a.m. Respectfully Submitted By, Melissa Cummins, Secretary, NACS FSA

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NACS-FSA ANNUAL MEETING – JUNE 14, 2004 Louisville, Kentucky

President Bill Mahanay called the NACS-FSA 32nd Annual Convetion to order at 11:40 am. He thanked the Kentucky delegation for all of their coordination of the meeting. He thanked all attendees for coming to help improve FSA. President Mahanay introduced the 2003-2004 Board. Mike Priest, IN – Vice President Melissa Cummins, WA – Secretary Aubrey Sapp, FL – Treasurer Betsy Senter, SD – Past President Dan Mattson, ID – Zone A Representative Mark Moser, NE – Zone B Representative Dan Walsh, IN – Zone C Representative Mike Gibbs, GA – Zone D Representative The members of the 2003-2004 committees were introduced. Farm Loan Programs Committee Nels Christensen, CANVAZ Bardell Faux, ID, Alternate John Vogt, KS, Chairperson Allen Hall, NE, Alternate Darren Metzger, OH Susan Meyer, NY, Alternate Al Taylor, MS John Dodds, TN, Alternate Farm Programs Committee Lisa Butler, CANVAZ Mark Williams, CANVAZ, Alternate Craig Argabright, ND Steve Showalter, IA, Alternate Timothy Neuhardt, MI Thomas Kuklinski, ME, Alternate Jean Smith, TN, Chairperson Tim Vonderfecht, FL, Alternate

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Information Technology Committee Everett Purrington, WA Steve King, WA, Alternate Jim Dark, KS Gerald Green, TX, Alternate Cheryl McGraw, KY, Chairperson John Simmons, IN, Alternate Brent Gremillion, LA Shari Gaeth, AR, Alternate Legislative Issues Committee Dan Mattson, ID Scott Bown, UT, Alternate John Cowan, TX, Chairperson Randy Milloy, TX, Alternate Helena Pitcock, KY Polly Anderson, NTO, Alternate P.L. Jowers, GA Thomas Simmons, NC, Alternate Membership Committee Clayton Ketcham, MT Denise Lickteig, NE Millie Turner, PA, Chairperson Mike Sullivan, LA The committees were thanked for their dedication and work throughout the year. President Mahanay appointed the following persons to serve on the Audit Committee. Scott Bown, UT, Chairperson Carolyn Blecha, OK John Simmons, IN Gretchen Thomas, AL President Mahanay appointed the following persons to serve on the Election Committee. Nels Christensen, CANVAZ Gerald Green, TX Jerry Hines, OH, Chairperson Tanya Washington, AR President Mahaney appointed Mike Sullivan, LA, to serve as parliamentarian during the course of the business meeting. Mike informed the convention body that the meeting would be governed in accordance with the Robert’s Rules of Order, Tenth Edition. Helena Pitcock, KY, presented the Convention Agenda as amended. She made a motion to accept the agenda as amended. Dan Walsh, IN, seconded the motion. The motion carried. President Mahanay reminded the convention attendees of the FMA sponsored luncheon and the Farmer MAC sponsored break. He also encouraged everyone to participate in the committee meetings and encouraged persons to serve on committees.

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President Mahanay announced the FMA – USDA Conference meeting to be held at 4:30 p.m. He also announced the retirement training to be held at 5:15 p.m. Vice President Mike Priest presented the convention rules as outlined on Page 118 of the Annual Report. The rules are as follows:

1) All resolutions, amended and consolidated, are to be presented to the convention floor in writing, according to the approved format, after having been discussed, prioritized, and recommended by the appropriate committee or zone.

2) Rules and procedures shall be suspended during the meeting of the convention

for the purpose of allowing full discussion of the proposed resolutions. Non-members must request permission from the committee chair to enter the discussion.

3) Committee reports shall be in the following format:

THE ___________________ COMMITTEE MET AT THE GALT HOUSE IN LOUISVILLE, KENTUCKY TO REVIEW RESOLUTIONS SUBMITTED BY THE MEMBERSHIP. THE FOLLOWING RESOLUTIONS ARE RECOMMENDED FOR ADOPTION: Concern: Proposed Solution: THE FOLLOWING RESOLUTIONS ARE RECOMMENDED FOR NON-ADOPTION: Concern: Proposed Solution: Respectfully submitted by the 2003-2004 _________________ Committee. ________________________ _____________________________ Zone A Zone B ________________________ _____________________________ Zone C Zone D (The committee chair shall be designated following their Zone.)

Mike Priest, IN, made a motion to adopt the convention rules as presented. Dan Walsh, IN, seconded the motion. Betsy Senter, SD, clarified that all resolutions should be numbered consecutively. The motion carried. Vice President Mike Priest introduced the committee members and alternates. Those in attendance asked to stand and be recognized.

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Millie Turner, PA, announced that NACS-FSA would be holding a silent auction throughout the convention. She announced that there would be three 50/50 raffles each day. There would be three winners from each raffle from the NACS-FSA 50% daily. The remaining 50% daily would be distributed to the following funds: Monday – Wunder Fund Tuesday – Federal Employees Education Assistance Fund (FEEA) Wednesday – FMA/PAC National Office attendees were announced. The location of the IT demonstration room was announced. NACS-FSA recognized John Williams, Deputy Administrator for Management with a plaque for working with NACS to assist in resolving difficult management issues and providing resources for NACS meetings and to answer questions and provide information at other time. Remarks from the Administrator, Jim Little: Mr. Williams presented opening remarks on behalf of FSA Administrator Jim Little, who was unable to attend due to testifying before Congress. Mr. Little expressed thanks to NACS for contributions by members and all employee’s hard work. Mr. Little summarized the contributions made by FSA in regard to the farmers and ranchers we serve. Included was net cash farm income at an all time high of $63 billion; land values at an all time high average of $1270 per acre, farm equity at $1.161 trillion and ag exports forecast at $59 billion. Mr. Little discussed the President’s Management Initiatives and how they will improve the way we do business. The new Farm Business Plan is and example. This new tool will assist FSA in meeting the President’s Management Initiatives by making our programs more customer-centric and web-based, and allow customer access from places of business, home, or FSA’s service centers. Decision making will be done more timely. Other improvements include SCIMS, online CCC funds control system, the automated CRP signup application, on-line T&A system and the Secretary’s Customer Statement which FSA employees played a major role in developing. Mr. Little complimented the dedication of FSA employees, indicating we have a great future ahead and he looks forward to moving forward with us. He also noted many customers will have the opportunity to do business from their homes, places of business or even the local library due to increased technology. In closing, Mr. Little indicated he appreciates the good work that each employee performs for FSA, rural America and the Nation as a whole, and he also appreciates the work the organization does for the Agency. Best wishes for a good conference were also offered Carolyn Cooksie, Deputy Administrator Farm Loan Programs Ms. Cooksie stated this year’s convention was special due to the fact it was being held in her home state of Kentucky. She stated there is a lot going on in FLP, and summarized some of the main issues and initiatives:

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Funding: The year started our slowly, but has picked up. We are behind on funding all requests for Direct Farm Operating loans. We will start the next FY with a back-log, estimated at 24million dollars. There has been a lot of activity in Guaranteed FO this year. They plan to shift funds from G-OL to G-FO and Direct OL in order to try and cover all loan requests. Even with the moving of funds, there should be adequate money to fund all Guaranteed loan requests, except those with Interest Assistance. FY 2005: We will probably see some cuts in funding, but not drastically reduced. Given the budget outlook for the government, this would not be too bad. To date the 100 FTEs requested for FLP by the President is still in the appropriations bill. Attrition is accelerating. Additionally, a lack of trained FLP Program Technicians is becoming a big problem. This is showing up in deficiencies uncovered during reviews. Streamlining: The comment period was extended 15 days, and has now closed. Over 1600 comments were received, over 500 on the family farm definition alone. The reason for the family farm definition proposal was due to the battles they had with NAD over the current definition being somewhat subjective. However, due to the comments they will probably leave it unchanged at this time. It will take some time to finalize the rule due to the volume of comments received. She expressed appreciation for the comments and the time effort put into them. Pigford and other Litigation: This is still on-going. They are trying not to bring new rotations into the National Office, but they are still getting a steady stream of late claims. FSA is the only one meeting the time-frames set by the court, but we still have to respond. The Monitor was extended to 2007. The Monitor is reporting a large number of delinquent borrowers have appealed to her office (261). These delinquent accounts will probably not cash flow. FSA will get adverse publicity, however we have no choice but to follow our regulations. In fact following the regulation is what we can defend. We need to follow the regs to the letter and let the publicity take its course. There are also numerous cases that did not appeal to the Monitor that will have to be accelerated. On Keepseagle, discovery has taken place. The Agency feels fairly positive about this case at this time. Garcia and Love are fairly dormant at this time. She is optimistic the Agency will be allowed to litigate these cases, which did not happen in Pigford. Even if we lose on litigation, the Agency would have much more say in any settlement. Farm Business Plan: They are in week 10 of training. It is turning out great and she is very pleased about how the new plan is being accepted. Test scores are high overall. The training will be complete by the end of September. They will have a meeting the end of June to begin planning for Phase II. They won’t have the funds to provide the same type of training for Phases II and III, so we will have to plan for how to train staff on the new elements. The goal is by the end of October we won’t be able to obligate any loans without using the FBP. In order to effectively us the new system, we cannot have people using alternative methods. Otherwise, the reports generated won’t be reliable. In Phase II we will be looking at what types of reports will be useful to management. NIR: A task force has been looking at the NIR process, particularly in light of the new FBP. NIR finds problems after the fact. We need real change, hopefully by 2006. They

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are going to try and show indicators before the problems develop. The hope is to make the process less labor intensive and have better data. As can be seen, there is a lot going on – change will help the field. Its not change for change sake. She feels we are on the cusp of innovation in FLP. We are willing to change and together we will continue to be successful. She expressed appreciation for the hard work and great attitude of the staff. Salomon Ramirez, Assistant Deputy Administrator for Farm Programs Mr. Johnson was unable to attend due to a prior commitment. Mr. Ramirez expressed appreciation for the invitation. He has been in Washington, D.C. just about 1 year. He gave a handout about the farm bill and status of various programs. John Chott, Assistant Deputy Administrator for Management Mr. Frago also had a prior commitment and could not attend. He thanked NACS for the invitation and noted these types of meetings are important. They enjoy all the meetings, including zones. He also noted that Mr. Frago and Ms. Cooksie have a very close working relationship. Staffing: Right now the ceiling in 13,444 for funding. This includes GS and CO. This is actually above the budget ceiling by about 200. Due to the “float” (vacancies, etc) they have been able to maintain that level. However, with cost increases, budget, pay raises, etc. they have had to release temporary employees and tighten hiring. They had up to 4200 temps. This has been reduced to 1500 and will continue to be reduced to about 1000. County Committees come out of the temps. He noted that temps CAN perform FLP work. This has been clarified to SEDs and AOs. We must get to the budgeted ceiling so we have instituted hiring controls – not a freeze. All hires must be cleared through DAFO. Since 1/26/2004, 500 positions were requested, and they have released 59% of these requests. FSA is currently at the level we need to be for GS and are ½ way there for CO. They have realized a savings of 10 million dollars.

1165. This has been painful for all. All states but one have a confirmed plan. The one state was misunderstanding the process. The appreciate NACS providing assistance. Actually, this has been implemented with minimal disruption. A notice has been sent to SEDs telling them plans will be reviewed every 2 years. The next review will be in 2005.

Closings and Consolidations: A list was developed for NRCS, RD and FSA. Less than 40 FSA offices were identified for closing. The list is in the Secretary’s office. They have no news on the status. There are more shared management offices being established. They need to look harder at this, but there is no “master plan”. State Office Staffing: This is another area that needs to be examined. A lot of FLP state office staff work in the field. Not all this work is probably being captured. There is no consistency between states. They are trying to develop a model for state offices.

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Customer Comment Card: This is being piloted in 50 counties throughout the country. There was a proposal at one time to have a customer receipt for every contact with the public, but this would be very cumbersome and generate a lot of paper. WE have about 17 million FP and 800,000 FLP contacts per year. However a lot of the existing records fulfill documenting contact. The Customer Comment card would be a compromise, and allows both positive and negative comments to be submitted. COC: There is a new ballot process for this year. The Farm Bill also gives the Secretary the authority to appoint committee members in order to obtain some diversity. This is currently under intense scrutiny. It won’t happen this hear. Although we have minority advisors, they cannot vote, so at times they feel they aren’t really a part of the process. We do need more diversity on COCs. Mr. Chott thanked NACS again for the invitation and stated it was an honor to be at the convention. Dennis Taitano – Budget Director Mr. Taitano thanked NACS for the invitation to speak at the convention. The dialogue is beneficial to the Agency. Budget Outlook for 2004: We did not get what we asked for – we were 61 million short, which translated to 40 M less due to the deficit, terrorism, etc. The Department of Agriculture and other entities not part of Homeland Security, Defense or entitlements like Social Security are competing for decreasing dollars. The challenge is to demonstrate how our use of dollars meets or exceeds expectations. Staff should be aware that 16-20M of the pay increase had to be absorbed by the Agency. When Congress increases the raise over the President’s budget, they don’t appropriate extra money to pay for it. Also, inflationary increases to operate haven’t been reflected. FSA was able to mitigate some of the shortfall because we had carryover dollars. We also looked at IT, where we could defer projects. We also did belt tightening in travel, equipment and by reducing temporary employees. Currently, we are trending in the right direction by controlling costs. The actions we are taking today are necessary as we position for FY 2005. With temps coming down we can hold the line on permanent employees. He is not projecting much carryover into 2005. FY 2005 – We are still hoping for the 100 FLP FTEs. The House appropriations bill was marked up and so far they are still there. If salaries go up 3.5% instead of the 1.5% proposed by the President, it will cost the Agency about 20 million dollars. So far the 2005 request for FLP funding 500M higher than 2004. The subsidy estimates are also way down from 2004. Challenges for 2005:

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• holding funding levels in the President’s request • trying to modernize conflicts with staffing – must demonstrate the results from the

funds. • IT modernization and GIS have to keep moving. We can’t realize efficiencies

without moving this forward. Contributions to rural America must be linked to spending resources. Demonstrating performance – value added. What is the tax-payer getting for their money. If we add dollars, how much does performance go up.

• Effectively communicating expectations within the Agency. We must look at things strategically. How does each COF support these goals.

John Williams, Deputy Administrator for Management IT convergence has been 3 years coming. They are trying to get it in place by October 1, 2004. The Secretary plans to notify Congress of this. After that the 280 affected employees will be notified. There is a plan to provide service in the future, probably regionally. It’s still in the planning stages, and will take several years to become fully functional. The President’s Management Initiatives – there are several, but he will address Human Capital today. The other include fiscal management, e-gov, outsourcing and budget and program integration. There are 2 primary objectives; linking performance to Agency objectives. There is a government wide move toward “pay for performance”. In Agriculture, we have no plans to do this, but we have been asked to better link individual performance with Agency goals and objectives. Mr. Williams complemented NASE for being very strong in bringing forth problems with the pass/fail system. After much discussion and thinking, they engaged a task force. They will convene the end of the month to take a hard look at where we go in the future. All GS-14s and above must have specific links to Agency goals and objectives. It is difficult to make meaningful distinctions with pass/fail. They are asking all managers to identify some linkage to Agency goals and objectives. Eventually, this will cascade down to all employees. How do we then connect this to awards and recognition? We will probably have to move away from pass/fail. Employees need to realize there is no system without problems. Results have to be measurable – it will evolve over time. It’s going to be a major undertaking. He would like to see change in awards and recognition. They need to so some serious soul searching on these issues. They are also planning to focus on leadership development in the future also. Don Sanders, Chief, Employment Branch, Kansas City Mr. Sanders passed out information on the Student Employment Program and Career Intern Program.

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Retirement projections for the workforce are significant. In FLP 30% of 1165 employees will be eligible fore retirement in the next 3-5 years. This statistic is driving Human Capital issues. This will result in loss of knowledge base, which is our most critical asset. If any group potentially could lose 35% it could e a crises. Some will stay beyond their retirement eligible date, however we must be prepared. Attrition rates for FLOTS is a concern. It’s higher than we would like to see. The potential exit of employees also gives us the opportunity to up-grade skills and competencies. We need to focus more on competencies. Core competencies are things that can take the KSAs and make it happen. For example, communication and interpersonal skills are critical, otherwise KSAs are meaningless. We need to look at how we identify those to be selected. Technical skills are more important today, focusing on those things is important. Assessment tools to rate candidates is a concern. Ms. Cooksie is a powerful advocate to improve the assessment tool for 1165 positions, and revising these so emphasis is off the KSA and incorporates those competencies that are important in the new business environment. This revision will be betted through a focus group. They are also planning this process for 1101 and 1145 positions. USA Staffing will be replaced by Quick Hire. This system will help us better rate our candidates. It should be on-line by August. In future they hope to have a hiring manager’s interview guide. This is to make sure all things that should be considered are considered. We need to do better Workforce Planning. This is a first step at the field manager’s level. The overall recruitment strategy is focusing on regional recruitment teams which are already in place. The concept is to align human resource people from state offices which are involved in recruiting. We need a diverse applicant pool. These teams will play an important role in achieving this. Each of the 5 teams has an SED as Chairperson. This group recommended a strategic partnership with MANERS (Minority Agricultural and Natural Resource Students). These students have demonstrated the competencies we need for the FLOT program. USDA has put together a college diversity recruitment program and they have started with Cal Poly and Iowa State. On the Human Resource side all they can do is make sure they talent is there. Hiring managers need training on behavior based interview processes. Emphasis must be on performance. The best way to predict the future performance is by evaluating past behavior. We need to be sure we are making the best selections. Dennis Taitano – work load/work measurement issues We need meaningful information for management. This system is one of a number of processes in FSA that needs to be evaluated in their current strategic management environment. The real challenge in measuring results is determining what we are measuring and how to do it. How are you using the information you collect?

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Contractor Study. Perot Systems conducted a study of our current system. There were executive level briefings regarding the results. SEDs should have received a copy as well as association presidents. They wanted an independent, objective evaluation of the current system. This included three elements: Process, Human Factors, Technology. Process: The strength is its well established, is functioning as designed and is adequate for budget processes. A weakness is that data is not available in a timely manner. Its also a complex collection process, with multiple failure points. They questioned the 6 minute interval, and the fact there is no T&A interface. Human Factors: Strengths is the extensive knowledge and the able support of the system. The weakness is a strong perception that the data can be manipulated. The contractor felt this was a perception only – the data doesn’t bear that out. Lack of confidence can influence apathy in interfacing with the system. Technology. There were no strength identified. The weakness is there is poor data accessibility, its outdated and the accuracy of the data collected is in question. General Conclusions were its functional for budget forecasting, but doesn’t support management decision making. It costs a lot to maintain, the technology is out-dated and it does not support a results focus management. Next Steps – changes are needed. Field participation is needed. They are looking at bringing in a task force in July to look at short and long term recommendations. We need to determine what is meaningful and streamline the categories. This has to be an all Agency effort. The Agency must determine what are the key activities we need to track and relate that to other information collection systems. We need to be able to Benchmark – how well are we doing? 75% of what we capture has always been there. How do we capture the other 25%? We also need to coordinate with other Agencies. Steve Sanders, Office of the Chief Information Officer IT convergence is one of the things Frank Shehan is emphasizing. As a result of this process, there will be a different help desk environment. People should feel free to report if the level of service expected is not received. President Bill Mahanay reconvened the meeting on June 16, 2004 at 10:32 am. P.L. Jowers, GA, gave the invocation. Allen Hall, NE, led the Pledge of Allegiance. President Mahanay asked the Kentucky delegation to rise and thanked them for the coordination and hosting of the Convention. President Mahanay thanked Everett Purrington, WA, for being the webmaster of the NACS-FSA website. He recognized Mark Drewitz, MN, for working as the assistant webmaster and Denise Lickteig, NE, for maintaining the membership database.

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President Mahanay gave the President’s Report. He commented on the work of the Association toward the established goals. Vice President Mike Priest gave the Vice President’s Report. He reviewed the work of the committees over the past year. Secretary Melissa Cummins gave the Secretary’s Report. She reported that six newsletters were published and posted to the website throughout the year. She reviewed the meetings held throughout the year. She indicated that the following ideas were presented to the Board.

1) The National Convention be held at a location annually in the central part of the country for easy travel access.

2) The idea of continuing to hold a training session during the National Convention. 3) The use of the Wunder Fund and the distribution of the funds from it.

She thanked persons who assisted her in the completion of her duties during the year. Treasurer Aubrey Sapp gave the Treasurer’s Report. He gave a brief overview of the financial information that is in the Annual Report. Clarification was made to acknowledge that the Wunder Fund is not included as a part of the financial position because it is invested in a separate account. Gerald Green, TX, moved that the Treasurer’s Report be accepted. Robin Hampton, NC, seconded the motion. Allen Hall, NE, called a point of order that the Treasurer’s Report cannot be acted upon as the credentials report has not been presented. The motion was tabled. Past President Betsy Senter gave the Past President’s Report. She commented on the work of the Board over the past year. She commented the 1165 issue and the work done on it this year. She commented on the relationship of NACS-FSA with FMA. Mike Gibbs, GA, gave the Zone D Representative’s Report. He reported that the Zone D meeting was held in Greensboro, NC. There are seven new state presidents in Zone D. There eight first time convention attendees. There are 279 members in Zone D. The 2005 Zone meeting will be held in Mobile, AL. Dan Walsh, IN, gave the Zone C Representative’s Report. He reported nine first time convention attendees. The Zone meeting was held in Peoria, IL. There are 322 members in Zone C. March 3-5, 2005 will be the 2005 Zone meeting in Indianapolis, IN. Mark Moser, NE, gave the Zone B Representative’s Report. There are 447 members in Zone D. Zone meeting was held in Wichita, KS. The 2005 Zone meeting will be held February 10-12 in Oklahoma City, OK. He reported four first time convention attendees. Stu Skidmore, WA, gave the Zone A Representative’s Report. He reported that Zone meeting was held in Boise, ID. The 2005 Zone meeting will be held in Salt Lake City,

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UT. There are 156 members in Zone A. They are working with Oregon to form an association. He reported one first time convention attendees. Past Presidents in attendance were recognized and thanked for their dedication to the association. Those in attendance were:

Betsy Senter, SD Robin Hampton, NC Scott Bown, UT Eric Guenther, KS Millie Turner, PA Clayton Ketcham, MT Norbert Soltwedel, IL Steve Pratt, KY James Monroe, MI

President Mahanay asked all members to stand and become seated as their first convention attendance was called as the roll of twenty-seven conventions was read. Don VanVliet, PA, was recognized for attending the most conventions. Secretary Melissa Cummins presented the credentials report. There were 95 delegates and 17 alternates certified. Don VanVliet, PA, moved the accept the credentials report. Eric Guenther, KS, seconded the motion. The motion carried. Secretary Melissa Cummins presented the minutes of the last annual meeting as printed in the 2003-2004 Annual Report. Nancy Seger, WA, moved to dispense with the reading of the minutes and approve the minutes as written. Scott Bown, UT, seconded the motion. The motion carried. Gerald Green, TX, moved to accept the Treasurer’s Report as amended. Robin Hampton, NC, seconded the motion. The motion carried. Scott Bown, UT, presented the Audit Committee’s Report. Scott acknowledged the work of the Treasurer Aubrey Sapp and the completeness of the financial records. The members of the Audit Committee (Carolyn Blecha, OK, John Simmons, IN, and Gretchen Thomas, AL) were Debbie Higgs, UT, moved to accept the Audit Committee’s Report. Nels Christensen, CANVAZ, seconded the motion. The motion carried. Don VanVliet, PA, served as historian and gave comments regarding the NACS-FSA history book. President Mahanay recessed the meeting at 12:02 p.m. President Mahanay reconvened the meeting at 12:21 p.m. Parliamentarian Sullivan addressed the convention regarding the method by which the delegates would be voting.

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Millie Turner, PA, presented the Membership Committee’s Report. She recognized the members of the committee. She stated that membership numbers stayed even for the past year. She talked about the need for getting retired members to stay as members. Awards were given to Montana, Ohio, and Alabama for having 100% membership. Millie Turner moved to accept the Membership Committee’s Report. Clayton Ketcham, MT, seconded the motion. The motion carried. Farm Program Committee Jean Smith, TN, Chairperson, presented the committee report and thanked the committee for their work. She reported the grammatical and numerical changes to the report. Craig Agrabright, ND, seconded the motion. Motion carried. Information Technology Committee Cheryl McGraw, KY, Chairperson, presented the committee report. She reported the grammatical changes to the report. John Simmons, IN, seconded the motion. Leo Beatty, MS, moved that Resolution 1 be amended to change the concern and proposed solution. Shawna Harrod, AR, seconded the motion. Motion carried. John Dodds, TN, moved that Resolution 13 be amended to strike the words “on borrower” from the proposed solution. Harold Mills, MS, seconded the motion. Motion carried. Janet Wyatt, NC, moved that Resolution 21 be removed. Carolyn Blecha, OK, seconded the motion. Motion carried. Janet Wyatt, NC, moved that Resolution 10 be amend the concern to add “7. Overlay topo for use of historical and endangered species determinations.” Priscilla Howell, AR, seconded the motion. Motion carried. Allen Hall, NE, moved that a resolution be added to the reported under the adopt portion of the report. Gerald Green, TX, seconded the motion. Motion carried. Cheryl McGraw, KY, moved that Resolution 10 be removed from the Information Technology Report. Bill Lau, OH, seconded the motion. The Chair ruled that the motion carried. A division of the house was called. Motion carried. Janet Wyatt, NC, moved to amend Resolution 17 to change in the proposed solution “Farm Loan Managers” to “Loan Approval Officials”. Danny Belcher, NC, seconded the motion. Motion carried. The motion to accept the report carried. Legislative Issues Committee John Cown, TX, Committee Chair, thanked the committee for their work on the committee over the past year. He presented the report and moved the report be adopted. P.L. Jowers, GA, seconded the motion.

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Polly Anderson, NTO, moved that Resolution 4 be moved from adopt to non-adopt. Tim Neuhardt, MI, seconded the motion. Motion carried. Polly Anderson, NTO, moved that Resolution 8 be moed from adopt to non-adopt. Tim Neuhardt, MI, seconded the motion. Motion failed. Cheryl McGraw, KY, moved that Resolution 15 be moved from non-adopt to adopt and strike the words beginning “I am………is as follows:”. John Simmons, IN, seconded the motion. Motion failed. The motion to adopt the report as amended carried. Management/Personnel Committee John Dorrill, AL, Chairperson, thanked the committee for their work on the committee this year. He presented the report and made the grammatical errors. He moved that the report be adopted. Stu Skidmore, WA, seconded the motion. Carolyn Blecha, OK, moved that Resolution 8 be moved from adopt to non-adopt. Steve Showalter, IA, seconded the motion. Motion carried. Cheryl McGraw, KY, moved that Resolution 10 as amended and removed from the Information Technology Report be added to the adopt portion of the report. John Simmons, IN, seconded the motion. Norbert Soltwedel, IL, amended the motion to remove Resolution 12. Jim Monroe, MI, seconded the motion. Motion carried. Motion as amended carried. Norbert Soltwedel, IL, moved to amend Resolution 17 and move from non-adopt to adopt. Wesley Cramer, IN, seconded the motion. Motion carried. Bill Lau, OH, moved that Resolution 15 be moved from non-adopt to adopt. Cheryl McGraw, KY, seconded the motion. Motion carried. John Cowan, TX, moved that Resolution 9 be moved from adopt to non-adopt. Melody Julian, KS, seconded the motion. Motion carried. Bill Lau, OH, moved that Resolution 24 be moved from non-adopt to adopt. Dan Walsh, IN, seconded the motion. Motion failed. The motion to adopt the report as amended carried. President Mahanay recessed the meeting at 2:40 p.m. President Mahanay reconvened the meeting at 3:05 p.m. Farm Loan Programs Committee

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John Vogt, KS, Chairperson, presented the committee report and thanked the committee members for their work. He moved that the report be accepted with grammatical changes noted. Darren Metzger, OH, seconded that motion. Carolyn Blecha, OK, moved that Resolution 19 be amended to delete the verbage after “2-FLP” in the proposed solution. Mark Huntington, OK, seconded the motion. Motion carried. Craig Argabright, ND, moved that Resolution 24 from non-adopt section of the adopted Management/Personnel Report and amend the resolution. Dwight Jurey, KS, seconded the motion. Motion carried. John Dodds, TN, moved that Resolution 8 be moved from adopt to non-adopt. Jean Smith, TN, seconded the motion. Motion failed. Janet Wyatt, NC, moved that Resolution 2 be amended to make grammatical changes to the concern. Michael Brown, NC, seconded the motion. Motion carried. Janet Wyatt, NC, moved that Resolution 3 be amended to make grammatical changes to the concern. Robin Hampton, NC, seconded the motion. Motion carried. Janet Wyatt, NC, moved that Resolution 5 be amended to grammatically change the second sentence of the proposed solution. Michael Brown, NC, seconded the motion. Motion carried. Janet Wyatt, NC, moved that Resolution 6 be amended to make grammatical changes to the concern. Robin Hampton, NC, seconded the motion. Motion carried. Gerald Green, TX, moved that Resolution 31 be moved non-adopt to adopt. Mark Huntington, OK, seconded the motion. Motion failed. Melody Julian, KS, moved that Resolution 11 be amended to insert language in the proposed solution. Carolyn Blecha, OK, seconded the motion. Motion carried. Melody Julian, KS, moved that Resolution 12 be amended to insert language in the proposed solution. Carolyn Blecha, OK, seconded the motion. Motion carried. Bob Parris, SC, moved that Resolution 7 be moved from adopt to non-adopt. P.L. Jowers, GA, seconded the motion. The Chair ruled that motion failed. A division of the house was called. Motion carried. Chuck Lipscomb, WV, moved that Resolution 14 of the adopted Legislative Issues Report be duplicated in the adopt section of this report. Matt Briggs, WV, seconded the motion. Motion failed. Cheryl McGraw, KY, moved to add a resolution to the adopt section of the report. Steve Pratt, KY, seconded the motion. Motion carried. The motion to adopt the report as amended carried.

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President Mahanay opened the floor for old business. A suggestion has been made by some members of the association to have the convention rotated annually between five or six centrally located states. It was felt that the central location would encourage participation. Discussion of this suggestion was held. No motions or formal proposals were presented. The Board will take the suggestions under advisement. Discussion was held regarding the intent of the Wunder Fund and the distribution of its account balance. Bruce Wunder spoke to the intent that the interest earnings from the fund be used to provide assistance for first time convention attendees. He indicated that he intended that the use of the funds be left to the discretion of the Board. Discussion was held regarding the continuation of a training seminar be held as a part of the convention. Melissa Cummins, WA, moved that a training program be made a regular part of the convention planning and agenda. Janet Wyatt, NC, seconded the motion. Discussion ensued. Motion failed. Scott Bown, UT, moved that a training program at the National Convention be left to the discretion of the Board annually. Steve Showalter, IA, seconded the motion. The motion carried. President Mahahay opened the floor for new business. Steve Pratt, KY, addressed the convention body and reported that the National Association of the District Directors voted within their convention that they will rotate their convention annually between NACS-FSA’s and NASCOE’s annual conventions. NADD donated $250 to the Kentucky Association to offset convention costs. Cheryl McGraw, KY, presented for discussion the resolutions that did not reach adequate resolution be carried over to the next committee report. Discussion regarding this issue and what action is needed, if any ensued. Discussion was held regarding the continuation of the lottery raffle. Millie Turner, PA, presented a summary report on the raffle. Awards were presented in accordance with the categories outlined in the newsletter. The profit for the raffle was $9,362.20. Discussion was held regarding the increase in dues to Federal Managers Association from $54 a year to $72 a year. There was a discussion about the method needed to increase the amount of the payroll deduction to accommodate the dues increase. Janet Wyatt, NC, moved that the committee instructions in the annual report be amended to include directive regarding the method by which to address resolutions that remain inadequately addressed from a previously adopted committee report. Cheryl McGraw, KY, seconded the motion. Motion failed. Melissa Cummins, WA, moved that we accept the bid from Texas to accept the b id to host the 2006 National Convention in Arlington, TX. Polly Anderson, NTO, seconded the motion. The motion carried. Steve Pratt, KY, announced the newly elected officers of the National Association of District Directors.

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Robin Hampton, NC, moved that the nomination speeches, seconding speeches, and candidate speeches be dispensed and all announced candidates be elected by acclamation. John Simmons, IN, seconded the motion. Motion carried. The newly elected officers for 2004-2005 are: Bill Mahanay, KS - President Melissa Cummins, WA - Vice President Cheryl McGraw, KY - Secretary Mike Gibbs, GA - Treasurer The meeting was adjourned at 4:50 p.m. Respectfully submitted, Melissa Cummins Secretary

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AUDIT COMMITTEE REPORT The Audit Committee met in Louisville, Kentucky at the Galt House Hotel and examined the Treasurer’s records since the last convention through May 27, 2004. Quicken income and expense reports and supporting recipes and memos were reviewed. The Audit Committee would like to thank Aubrey Sapp, Treasurer, for his ehlp in completing the audit. The Committee reconciled closing balances following the 2003 Annual Convention. All funds have been accounted for and account balances verified as of May 27, 2004 in the checking account and Money Market Account. The CD balance was verified by the bank. The Treasurer has maintained the checking and Money Market Accounts and reconciled balances on the bank statements in a timely manner. The Treasurers records were very neat and orderly. The recommendations of last year’s Audit Committee were followed. The Audit Committee would like to make the following recommendations:

1. The Treasurer should continue to use Quicken. 2. The CD should be held to maturity and then transferred to the Treasurer for the

coming year. 3. Continue to obtain approval of the Board for all disbursements and have it reflected

in the minutes. 4. The Treasurer should continue to use the Treasurer’s guide and provide a copy to

the Audit Committee for their examination. 5. The Treasurer should establish a ledger to track the cumulative donations to the

Wunder Fund in order that the Board can determine the earnings available for distribution for first-time attendees at National Conventions.

6. The Audit Committee views the Wunder Fund as part of the NACS finances; therefore, the account should be included as part of the annual audit review.

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AUDIT COMMITTEE REPORT PACS RAFFLE

The Audit Committee me in Louisville, Kentucky at the Galt House Hotel and examined the income and expense records for the PACS Raffle to benefit NACS. Based on our review, it appears that all income and expenditures have been properly accounted for and prize monies awarded in accordance with the rules of the raffle. The records were very well documented and maintained. The Audit Committee recommends that the same or similar accounting system be used for future raffles or fund raising activities.

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FARM LOAN PROGRAM COMMITTEE RESOLUTIONS The Farm Loan Program Committee met at The Galt House Hotel in Louisville, KY, on June 14, 2004 to review resolutions submitted by the membership. The following resolutions are recommended for adoption: RESOLUTION 1

CONCERN: FLP goals are established at National level then sent to the State for State’s to set State goals. Employees delivering the programs are not adequately consulted during the process. PROPOSED SOLUTION: Prior to setting of National and State goals, representative associations be consulted for input on setting of specific goals.

RESOLUTION 2

CONCERN: On the direct application, 410-1, block 10 needs to be revised to include “LLC’s and Trust’s” as a type of operation. PROPOSED SOLUTION: Change both forms to include this information as required. FMI FSA 410-1 already has that selection, but did exclude “Joint Operation”. That will need to be added again. The FMI will need revised. Guarantee application: 1980-25 & 1980-28. Add “LLC’s and Trusts” as type of operation to block 10. These changes are needed to correlate with regulations and who FSA can provide assistance to.

RESOLUTION 3

CONCERN: On both guaranteed loan applications, 1980-28 and 1980-25, blocks need to be provided to add lender ID, payment amount and payment frequency. PROPOSED SOLUTION: Change the forms to include this information as required.

RESOLUTION 4

CONCERN: When the producer comes into the USDA Service Center to file an acreage report with Farm Programs they also are asked to supply the same

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information to Farm Loan Programs for the purposes of cash flows and previous year’s history. PROPOSED SOLUTION: Work with the program sponsors of Farm Programs and Farm Loan Programs software development to incorporate the new GIS acreage reporting tool into the Web Farm Business Plan (WFBP). The producer should then be able to report once and data would be available for both divisions of FSA.

RESOLUTION 5

CONCERN: The NIR guide exhibit 20 paragraph 20 subparagraph B question 16 appears to be in direct conflict with the Form FSA 1962-1 and the form’s FMI. The question states that the FHP table K and the FSA 1962-1 “must be consistent with one another reflecting the amounts and when payments are to be made to each creditor, the source of the funds with which the payment is to be made.” The question implies that all income from every source and all debts to each creditor should be stated on the form to make the form consistent with the FHP table K. In the case of non-farm income which is common today, non-farm income may be used to pay debts, both farm and non-farm debts. Form FSA 1962-1 and the FMI clearly state the form is an agreement regarding FSA chattel security. Non-farm income should therefore, not be shown, nor should debts paid from non-farm income be shown unless FSA has a lien on the income. This is in conflict with the NIR guide. PROPOSED SOLUTION: A rewrite of question #16 in the NIR guide is needed that will add clarification of the meaning of “consistency.

RESOLUTION 6

CONCERN: Form 1980-03 with a revision date of 01-05-04 states under part B-Servicing Review-SELS, question number 18. “For loans of credit (LOC) or annual operating loans, is the sale of normal income security being reported to the lender and adequately documented?” It appears that the first four words of the sentence should have been “For Lines of Credit (LOC). . . .” It appears to have been an error in spelling. PROPOSED SOLUTION: In question #18, change “For Loans of Credit (LOC). . . “To “For lines of Credit (LOC). . . “.

RESOLUTION 7

CONCERN: Form RD 440-21, “Chattel Appraisal” has not been revised since April, 1997. (This revision only changed the Agency acronym from FmHA to RD). Form RD 440-21 lacks essential needed information such as: effective date of valuation/inspection, date of report, appraisal report consist of ____pages, scope, and intended use of the report, definition of value, references and sources used for value, appraiser’s certification. Simply put, the form needs to be updated to include this required information.

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PROPOSED SOLUTION: Incorporate items similar to KS Exhibit 11 of 1-FLP par.142 (attached) to either Form RD 440-21 and/or Farm Business Plan Software. The present Agency Form is insufficient and lacks in documentation to the loan approval official, as well as oversight by the Agency. See attached example form.

RESOLUTION 8

CONCERN: The FSA 410-1 does not have a place to check if individual members of an entity are veterans or not. This causes a problem when entering the individuals in SCIMS, because you need to enter a veteran code for FLP before it will let you proceed. Also, when you go into MAC to link the information from SCIMS a veteran code is required. This can delay getting the application entered because you have to obtain the information, when it could easily be provided on the application. PROPOSED SOLUTION: Update the 410-1 to include a yes/no box for veteran status under item number 34 of the application form.

RESOLUTION 9

CONCERN: When a borrower commits an act that requires FSA to send a 1962-A5 letter, there is no place in AgCredit that this tracking can be monitored. This letter must be sent even before OIG determination can be made; and OIG determination is the first option after determining the type of non-monetary default. PROPOSED RESOLUTION: Add a tracking code for the 1962-A5 letter. Once the time frame is up for the restitution offered in the 1962-A5 letter, then an OIG opinion need can be determined.

RESOLUTION 10

CONCERN: Often loans are closed and then it is determined that all of the loan funds are not needed. 3-FI appears to instruct loan officials to order a loan check, mark it as “not negotiable” and send it to the SLKCFO with Form 1940-10. This is not correct procedure and causes numerous problems. Example: a youth loan is closed for $3,000, but only $2,500 was needed due to lower feed expense. The animal is sold and the amount borrowed is repaid. However, there is still a $500 balance due on the loan. Submitting the check for cancellation does not cause the loan to be shown as paid in full. PROPOSED SOLUTION: The only place where the proper instructions could be located is in the FMI for Form 1940-10, wherein it states specifically that “for closed loans where there are excess loan funds, the funds should be requested and then remitted on the account as a refund. This is the only way that the loan can be shown with a zero balance. These instructions should be very specific and incorporated into Handbook 3-FI.

RESOLUTION 11

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CONCERN: Page 5-5, dated 5/8/03, 2-FLP amendment 14 states in regard to “financial history” that “the financial history should support cash flow projections and include 3 years of income and expenses and 3 years of balance sheets.” There is no requirement that allows FSA to request 3 years preceding the year of the loan. PROPOSED SOLUTION: Add sufficient language to 2-FLP for FSA to request, at a minimum, 3 most recent years of operation preceding the year of the application.

RESOLUTION 12

CONCERN: Page 5-5, dated 5/8/03, 2-FLP amendment 14 states in regard to “production history” that “the application should include 3 years of production history (SEL only). There is no requirement that allows FSA to request 3 years preceding the year of the loan. PROPOSED SOLUTION: Add sufficient language to 2-FLP for FSA to request, at a minimum, 3 most recent years of production preceding the year of the application.

RESOLUTION 13

CONCERN: Handbook 1-FLP, par. 146 A states “Both full-time and part-time FSA appraisers/reviewers must acquire State certified general appraiser status within 3 years from being designated as an appraiser/reviewer…….In addition, the appraiser/reviewer must meet State experience requirements for obtaining a State certified general license.” Completing the required educational coursework alone, in addition to the reviewer responsibilities, make this endeavor virtually impossible to complete this task, and still obtain the report writing hours for experience in each state. Each state varies on what they consider for experience in obtaining state certification and there is no uniform or fair standard or measurement to impose this Agency requirement. In addition, the educational and experience requirements established in each state require a time frame that needs to be met for licensure and certification PROPOSED SOLUTION: Revise this regulation to state: “Both full time and part time FSA appraisers/reviewers must acquire State certified general appraiser status within their respective state of Agency employment, according to the State statutes or Agency individual development plan as approved by the SED.”

RESOLUTION 14

CONCERN: There is not a clarification of an applicant or co-applicant in the FSA guarantee loan program regulation, 2-FLP definitions. Lenders participating in the Farm Service Agency’s guaranteed loan program often do not distinguish between a loan applicant/borrower and a loan co-

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applicant/co-borrower. They treat entity applicants and individual members of the entity equally the same. Often calling them both the applicant/borrower. FSA regulations in accordance with 1910-A. 1910.1 (B) and 1910.3 (c) are specific. Direct loan applicants and co-applicants must carry the same weight when determining eligibility, i.e. both must participate in the operation of the farm business. FSA Guarantee loan regulations under 2-FLP are silent on the eligibility requirement of the loan co-applicant, especially when it fails to address participation in the operation of the farm business. Exhibit 2 of 2-FLP does define a loan applicant but not a loan co-applicant. Paragraph 109 (A) of 2- FLP does state that “an applicant and anyone who will execute the promissory note. . .must meet eligibility criteria. . “ However this paragraph does not address participation in the operation of the farm operation as one of the eligibility criteria. PROPOSED SOLUTION: Clarify or expand the definition of eligible loan applicant/co-applicant in paragraph 109 (A) and Exhibit 2 of 2-FLP. If the definition is to remain the same as it presently reads, than allow the lender to recognize both the entity and members of the entity equally the same as loan applicants/borrowers, with no distinction between applicant and co-applicant.

RESOLUTION 15

CONCERN: Calculating yields for direct loan borrowers is a very burdensome and time consuming process for both the borrower and FLP staff. Often, the quality of information is questionable and duplicated for those borrowers who report acres and yields to crop insurers. In areas that have extended and widespread disasters such as drought, substituting the county average for the borrower’s individual yield doesn’t gain anything for the borrower, as the whole county may have had a near zero yield. PROPOSED SOLUTION: Utilize APH’s for those insured crops where the information is available.

RESOLUTION 16

CONCERN: Farm Service Agency is a provider of supervised credit. A part of our mission is to provide financial counseling to our customers. Many of our existing customers and new applicants have significant outstanding balances on credit cards. It is important to obtain updated liability balances in order to prepare accurate financial statements. Many times we are unable to obtain the accurate information from our customers that are needed to provide meaningful financial counseling. PROPOSED SOLUTION: Allow FSA credit officials to obtain credit reports, at the cost to the government, as a part of the year end analysis process.

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RESOLUTION 17

CONCERN: the 2 FLP handbook Par. 265A states that PLP lenders will perform an annual analysis in accordance with the requirements established in the Lender's Agreement. Many of the PLP Lender's Agreements do not reference FSA submission requirements for the annual analysis. The agency must assume nothing will be submitted when no reference to it is made. PROPOSED SOLUTION: FSA should require PLP Lender's Agreements to either include annual analysis submission requirements or specifically state within the agreement that no information will be sent to FSA as part of the annual analysis.

RESOLUTION 18

CONCERN: 2-FLP subordination approval authority by the National Office is difficult for lenders to work with effectively and timely. PROPOSED SOLUTION: Delegate authority from DAFLP to the SED to approve or reject subordinations of guaranteed loan security.

RESOLUTION 19

CONCERN: 2 FLP par. 181 C and 7 CFR 762.127 (d) requires current appraisals (not more than 12 months old) or appraisals updated by a qualified appraiser. N.O. has taken the position that the PLP agreement and Credit Management System take precedence over 2 FLP. In some instances, FSA is accepting appraisals over 10 years old based on the lender’s internal policies or “evaluations” completed by someone other than an appraiser. USPAP determines the standards for an appraisal but does not determine when an appraisal is required – that is an FSA decision. PROPOSED SOLUTION: DAFLP should require that PLP agreements and lenders follow the appraisal requirements in 2 FLP.

RESOLUTION 20

CONCERN: The new Farm Business Plan (FBP) software needs 3 additional features/options to make it effective in the field. PROPOSED SOLUTION: 1) While the internet based system has several advantages, the software needs to be available on our laptops to allow us to perform these duties in the field. The PCFHP’s ability to take it with you was very effective and the lack of this feature with the FBP software is 10 steps backward. 2) An additional field should be included within the credit presentation part to address the level of environmental review that is required for the proposed loan or servicing action. (categorical exclusion, Class 1 or Class 2) 3) There should be a report option which will track chattel security in the system as per the attached spreadsheets.

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RESOLUTION 21

CONCERN: Form FSA 1980-38 “Lenders Agreement” confused the lender in completion of block 5. It states: “The following sub-offices of the lender are covered under this agreement”, followed by a box to check and beside it stating “All offices”. Often times the main bank has one name while a branch bank has another. If the main bank/lender completes the form and simply checks the box, FSA does not know operating names of their branch banks, thus causing the branch bank to complete a form or having duplicate/additional agreements floating around. PROPOSED SOLUTION: Revise the form in block 5 to state: “The following sub-offices of the lender are covered under the agreement and listed as follows:” and remove the box to check “All offices”.

RESOLUTION 22

CONCERN: Several work load scheduling items are a necessity for particular assistance code types. As a result we are recommending that certain WLS items automatically complete upon closing of that assistance type. PROPOSED SOLUTION: Have the above mentioned WLS automatically complete when a particular Assistance code is completed. Automated completion of these items would allow more time for employees to work in other needed areas, such as the routine servicing areas.

RESOLUTION 23

CONCERN: MAC does not allow input of applications without a loan amount being input. National Office indicates that anytime a 410-1 is submitted without information, it is the County Office responsibility to act on the application, even though additional information is required to fully complete the application; i.e. loan amounts, purposes, signatures & etc. With electronic records being the direction for the future, MAC needs to be more user friendly by allowing the input of an application as received, even though an amount was not originally specified by the applicant. This will also aid in the future for litigation and information searches should the applications be disposed and only electronic records remain. State office support indicates that the technicians should always input a dollar amount when inputting the application (lie to the computer) and change the record at a later date. This is not prudent as there may never be an amount input due to administrative withdrawal and the agency has basically falsified the record. PROPOSED SOLUTION: Change MAC to allow input of applications when dollar amounts and loan purposes are not originally furnished by an applicant.

RESOLUTION 24

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CONCERN: FSA has come a long way with automation, but is still needs to strive to have every form used as a fillable form. Two forms that still are not converted include the 1965-13 (Assumption Agreement) and the Form 440-9 (Supplemental Payment Agreement). There are probably other forms that also need to be computerized. PROPOSED SOLUTION: Automate all forms we use in the delivery and servicing of FLP loans as fillable forms.

THE FOLLOWING RESOLUTIONS ARE RECOMMENDED FOR NON-ADOPTION:

RESOLUTION 25

CONCERN: The requirement to obtain an appraisal for all 1951-S requests is burdensome. There should be the possibility of the applicant requesting a waiver of this requirement to speed up the servicing process.

PROPOSED SOLUTION: Have a form available whereby the applicant can waive the right to an appraisal if restructuring is possible

RESOLUTION 26

CONCERN: The guarantee Farm Loan Status Reports (Form FSA 1980-41) for each guaranteed loan are sent to the lender, via KC, twice a year. Once the lender receives these reports, they in turn manually provide information to update the loan status. The concerns with this method are multifaceted. Concern 1: This is a constant drain on resources. KC mails them out, the lender mails them out and the local FSA office has to enter all the information. Concern 2: The information provided is dated and does not reflect a current status of the loan. Concern 3: The work is repetitive. The lender completes the form and then the local FSA office has to enter the same information into GLS. PROPOSED SOLUTION: We propose that the lender enter this information directly into the system thereby eliminating a step, reducing time lag, and reducing the burden on KC and the local FSA offices. The lender will be increasing the amount of work related to this procedure.

RESOLUTION 27

CONCERN: Debt for Nature Contracts often times requires financial or in kind assistance from other partners who are unwilling to commit such assistance because the legal priority of the contract is not always assured especially when there are prior lien holders. This at times makes a potentially good resource area into one that is mediocre at best due to limitations in the borrower’s cash flow for providing the necessary enhancements. PROPOSED SOLUTION: Require subordination agreements from all prior lien holders in the case of Debt for Nature Contracts.

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RESOLUTION 28

CONCERN: Local lenders have expressed concern that they must perform analysis for upcoming year prematurely as few borrowers have wrapped up year end business at the time the lender would normally request interest assistance. In many cases, the borrower and lender are both expecting the interest assistance payment to finalize the payoff. It is difficult for the lender to complete an analysis and cash flow for the upcoming year in order to determine the need for interest assistance for the future without knowing exactly where the borrower stands. PROPOSED SOLUTION: The solution would be to break the 1980-24 into two separate forms that would allow the lender to request interest assistance payment, and later, after completing year end analysis and new year cash flow, request interest assistance for the upcoming year.

RESOLUTION 29

CONCERN: Currently the 540 report is processed the last day of the month. However, payments due on the 28th and made on that day usually do not have sufficient time for posting. This results in a reported delinquency on the 540 report that is not accurate. PROPOSED SOLUTION: Continue to process the 540 report effective the last day of the month to comply with requirements, but allow about 5 days for payments to post before making the report available to the field. In other words, run the report about the 5th of each month effective as of the last day of the previous month. While this solution requires the field offices to wait a few days to obtain the report, it will be beneficial by reporting the actual delinquency by allowing time for payments to be posted to the accounts.

RESOLUTION 30

CONCERN: Technical appraisal reviews are not required to be completed on loan involving a loss to the Government. Handbook 1-FLP, Par. 143 E addresses when technical appraisal reviews may be conducted. (This should state “When technical reviews will be completed”) PROPOSED SOLUTION: Require that any time a loss to the Government is being incurred or projected; a technical appraisal review will be completed. This includes Guaranteed Loss Claims, Bankruptcy, Direct Loan Losses, and any further loan servicing action necessary to protect the Government’s interest.

RESOLUTION 31

CONCERN: Currently, Handbook 1-FLP, Exhibit 7 lists authorized delegations of authority for SED and FLM. However, the wording of the FLM delegations of authority to the PT is confusing. Can a PT sign routine correspondence “for” the FLO if so designated by the FLM, or can the PT sign only “for” the FLM who

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delegated the authority to sign? Office administration can be hindered if the PT can not sign routine correspondence for the FLO. PROPOSED SOLUTION: Clarify handbook 1-FLP, Exhibit 7 to indicate the authorized delegations of authority for a PT to sign/act for an FLO. Perhaps add another paragraph listing FLO delegations to the PT.

RESOLUTION 32

CONCERN: Handbook 1-FLP, par.143 C states “FSA shall complete an administrative appraisal review: …of chattel and real estate appraisals completed by FSA employees, as determined by SED.” The agency does not have a form established for completing administrative appraisal reviews on chattel appraisals. Form FSA 1962-16 “Administrative Appraisal Review” pertains only to real estate. Agency instructions do not require chattel appraisals to be in compliance to the Uniform Standards of Professional Appraisal Practice. PROPOSED SOLUTION: Request National Office to provide such a form to complete this task or eliminate the Administrative Appraisal Review process for chattel appraisals.

RESOLUTION 33

CONCERN: The agency is heavily involved in guaranteeing loans to contract growers for integrated livestock companies. These companies often offer only a short term contract or no specific term on the contract with lenders requesting terms beyond the contract period. PROPOSED SOLUTION: Require loan terms not to exceed contract term when associated with integrated contracting companies.

RESOLUTION 34

CONCERN: The State Designated Appraiser/reviewer position requires educational and experience requirements to be accomplished within each state for State-certified general license. This specialized training requires several years to obtain. Many of the present staff within the Agency is going to be eligible to retire within the next five to ten years having the State-certified general license. This will leave a tremendous void in the Full-time State Designated Appraiser/reviewer position nationally. The educational process alone takes two to three years to complete due to availability of course offering and funding. In addition, substantial experience in writing is required. Handbook 1-FLP Par. 145C addresses the Part-Time FSA Real Estate Appraiser/reviewer position available to the state. This employee has significant responsibilities involved in real estate appraisals and reviews however, also has other FSA program responsibilities as well. The Agency needs to have a “feeder chain” available for employees to attend training and obtain the State-certified general appraisal status. This will alleviate “down Time” for position vacancies and allows additional employees the opportunity to be available for the Full-time FSA Real Estate Appraiser/reviewer position within the state. Several states

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(approximately 10) are presently without a full-time Stat Designated Appraiser/reviewer on staff. PROPOSED SOLUTION: National Office needs to commit to this position within the Agency as a specialized field that requires additional education and experience within each State for State-certified general status. Implement a “feeder chain” process for employees within the Agency to work towards State Certification by allowing numerous Part-time FSA Real Estate Appraisers/reviewers from existing pool of FLM’s and FLO’s, as authorized by the FLC and SED within each state. Either needs to be properly staffed with a plan to train additional employees or revising position to a collateral duty on appraisals similar to the environmental and inventory property coordinator roles with the Agency.

RESOLUTION 35

CONCERN: Problem: At present the 1951-S regulations are in conflict. The Softwood Timber property should have the Softwood Timber lien. The Shared Appreciation Agreement should cover all property. Problem Scenario: 1.A delinquent borrower requests servicing. The DALR$ program finds a feasible plan with a Softwood Timber loan and a write-down. 2. The borrower enters into a Shared Appreciation Agreement. The SAA describes all existing Deeds to Secure Debt. 3. The Softwood Timber property is released so that a new Deed to Secure Debt can be created to secure the Softwood Timber loan(s). 4. The SAA comes due after 10 years, and is calculated with current appraisals which include the Softwood Timber property that was released. 5. The borrower maintains that the SAA calculation should not have included the property that was released. A release is a release. PROPOSED SOLUTION: The release should have appropriate language to describe the modification that will occur when a Softwood Timber loan is set up; and that there will be a contingent liability associated with the SAA. A procedure is needed to reconcile the SAA with the SWT loan.

RESOLUTION 36

CONCERN: Farm Loan Program and Farm Program eligibility rules differ in regards what constitute a legal entity for program eligibility. Joint Ventures made up of corporations that are owned by family members are eligible for program payments, but not eligible for FLP loans. Even though they are a family size operation the fact that the operating entity is made up of corporations, excludes them from the FLP loan program. As a result applicants are applying for direct and guaranteed loans as the corporations and are applying for program payments as the joint venture. Corporations are farming together and splitting their budget and income 50/50. Since the corporations are made up of individuals, they are eligible for the FLP loan. Furthermore, for program payments and IRS tax reasons, they function as a joint venture. This is not acceptable under the loan programs as it clouds who is the actual operator and who is the actual owner of the crops/livestock and raises serious security

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concerns. The issue is that we cannot allow entities to apply for loans based upon the “person” rules of the program side. If Father and son are farming together, then they need to apply to FSA for a loan as a partnership. The security issues are a big concern in these schemes to pro-rate expenses, income etc. Basically, farmers are allowed to set up all these subdivisions to take advantage of tax and program payments loopholes. In actuality, it is one operation and as loan officials we have to look at it that way. Additional concerns: Having the operation restructure to meet Guaranteed or Direct status could result in reconstitution of the farm in the FSA program records. This will result in delay in processing of the loan application until the respective office completes the recon and issues the new AD-1026’s.

This could have significant impact on these borrower’s income tax returns. The reason they do the joint venture with corporations is that it provides IRS benefits in addition to the FSA program benefits.

If the father and son do split out to meet the guaranteed or direct requirement, but then farm together, where would that leave us? For instance say they farm 2000 acres of dry land wheat. To split out the tracts so they farm individual tracts one has 1300 acres and one has 700. OK so far, but now they order fertilizer. They are not going to individually order it, but jointly for all 2000 acres. They also are not likely to have the fertilizer company send out separate billings. Who made the management decision to fertilize? Father who ordered it or the son who tagged along since he has fewer acres? Or say fuel – they both use the same fuel tanks and tractors, etc. since in practical terms they are farming jointly. Whose fuel is it? How much are dads or son’s? How much did each use? And so on. In a nut shell record keeping will be nightmare for them unless they split the bills and income by percentages.

If they tell us they are farming separately, that meets the guaranteed/direct requirements, but actually farm as a joint operation for convenience and tax reasons, then they get spot checked for a program review, they could end up owing FSA all program payments if they are found out of compliance. Yes this would be their responsibility, but wouldn’t it appear we had a hand in “setting them up for failure”? PROPOSED SOLUTION: Both the loan side and the program side eligibility requirements as it pertains to family size farm must be the same and must allow for entities to be members of the entity applying for assistance as long as they can show they are “family size” operation for the guaranteed and direct loan program.

RESOLUTION 37

CONCERN: FSA handbook 2-FLP par. 152 D requires SEL lenders to base yield projections for existing farmers on actual production for the past 3 years. FSA handbook 2-FLP par. 153 B allows CLP lenders to project production in the same manner. Three years of production information is too short a period on which to base normal year yield estimates. A single year with unusually high or low yields can significantly distort a 3 year average.

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Example: Areas in the Great Plains experienced severe drought from 2001 through 2003. Consequently, three year average yields are well below longer term averages. PROPOSED SOLUTION: SEL & CLP lenders should be required to utilize crop insurance APH if available. If APH is not available, they should utilize at least 5 years of production information. Crop insurance APH is readily available for most crops. Because APH is a long term average, it is not significantly distorted by short-term yield variation. Utilizing APH reduces paperwork for lenders, applicants & FSA because it has been calculated by RMA from information already submitted by producers. APH is not available for all crops. For these crops, a 5 year average is less distorted by short-term yield variation than a 3 year average. Obtaining data for a 5 year average is not unduly burdensome for guaranteed lenders or applicants.

RESOLUTION 38

CONCERN: Many lenders do not complete a site inspection prior to submitting a guaranteed loan application as it is not listed in the Loan Application Requirement section. PROPOSED SOLUTION: It is recommended that the site inspection reference be transferred in the handbook from Par. 139A to Part 5 which is the Loan Application Requirement section. The Table in Par. 69.7 and the PLP listing in Par. 70 would be ideal locations.

RESOLUTION 39

CONCERN: With the increased workload being placed on the employees it is often times almost impossible to get borrower training courses set up. In this state, we have one single individual who is "qualified" to conduct the borrower training. PROPOSED SOLUTION: FSA should be provided the funds and resources to recruit, select, and retain private venders in each state to provide the borrower training. An even better solution would be to allow the FLM more freedom in waiving the training requirement. I recommend that only those borrowers classified as beginning farmers should have to attend the training courses.

RESOLUTION 40

CONCERN: Many FO and OL loans were closed at Limited Resource rates of 5%, but now have been restructured via 1951-S and have regular interest rates of 5% or lower. The borrower may lose the advantage of their low regular interest rate if processed through 1951-S again in the future, as the DALR$ program will revert back to the original (LR) note rate. PROPOSED SOLUTION: Modify the DALR$ program to allow the borrower the choice of retaining the interest rates in effect on their notes on the date a complete 1951-S application is received.

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RESOLUTION 41

CONCERN: The state office is requiring that we obtain a Nutrient Management Plan for guaranteed loan applications on livestock loans up front. A problem exists when a new purchaser tries to obtain a nutrient management plan on an existing livestock operation. At the time o f the application, the title to the property has not yet been transferred to the purchaser. NRCS states that they will not complete the nutrient management plan because the property is not yet in the name of the purchaser. So how can we get one before the loan closes? We are being told to get an interim nutrient management plan from Extension. This plan doesn’t appear to be a comprehensive nutrient management plan. It does appear to be a basic plan however. PROPOSED SOLUTION: Top level NRCS managers and top level FSA-FLP managers at the national level need to decide on the best procedure for satisfying the requirement for a nutrient management plan. The apparent lack of a procedure is causing some tension between the applicant, guaranteed lenders, FLP personnel and NRCS. How can the applicant get a nutrient management plan for his application before or at closing of this loan if NRCS won’t sign off on one?

Respectfully submitted by the 2004 FLP Committee:

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FARM PROGRAMS COMMITTEE RESOLUTIONS

The Farm Program Committee met at The Galt House Hotel in Louisville, KY, on June 14, 2004 to review resolutions submitted by the membership. The following resolutions are recommended for adoption: RESOLUTION 1

CONCERN: ECP funds cannot be used to restore private field roads, bridges, and crossings. Private roads, bridges, and crossings are necessary for farmers to carry out many agricultural practices (i.e. get to fields, allow livestock access to water or grazing areas). When these are destroyed by natural disasters, there is no assistance for farmers to make the needed repairs and it can be very costly for them to complete on their own, thus endangering cash flow and viability. These types of repairs are often more costly than other practices which are eligible for ECP assistance, and many times these types of repairs are needed before other eligible practices can be started. PROPOSED SOLUTION: Allow ECP funds to be used to restore private field roads and crossings if it affects the viability.

RESOLUTION 2

CONCERN: CRP farms often have numerous fields and tracts. When a farm is reconstituted, the software wipes out all the CRP information on the old farm, thus not bringing forward the information to the new farm number. All tracts and fields in the Conservation Reserve must then be loaded in farm maintenance and compliance files under the correct new farm number or numbers. This is a very time consuming task. PROPOSED SOLUTION: Update Reconstitution software to include division/combination of CRP acreage as DCP acres is updated during the reconstitution process. This would eliminate the necessity of reloading the entire contract.

RESOLUTION 3

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CONCERN: CCC-633, Loan Deficiency Payment Certification and Application, is very confusing for the producer to complete. For example, the word “producer” is used for both tenant and share rent landlord. A landlord may not think or consider or think of themselves as a producer as it applies to this form. PROPSED SOLUTION: Modify the form to identify the signature blocks as operator and landlord/owner.

RESOLUTION 4

CONCERN: Ballots for COC elections do not indicate that a Power of Attorney (POA) is not applicable. This ineligible ballot submitted by an unknowing individual, based on Handbook 15-AO, could determine the applicant who will serve on the County Committee. In some cases, the win-loss margin is as close as two or three votes. The voter should be aware that a power of attorney is not applicable. PROPOSED SOLUTION: Add a statement on the ballot to acknowledge that Power of Attorney is not applicable.

RESOLUTION 5 CONCERN: With many programs administered by FSA, individual may qualify for payments for several different farms and shares. This causes multiple payments to be issued to an individual costing the government money in writing, sorting, and processing each transaction. PROPOSED SOLUTION: Enhancements are needed for the software so that each program will recognize the social security number together to print one payment and one summary transaction statement for the producer. This will save money, paper, and employee resources. Individual transaction statement may be printed by farm number for filing purposes.

RESOLUTION 6

CONCERN: GIS/GPS technology is becoming an increasingly important tool in FSA. FLP is still not consistently receiving training in this area for its potential applications to FLP programs, such as real estate appraisals, farm visits, chattel appraisals, farm planning, environmental reviews, conservation easements. It is the understanding that the National Office determines the number of employees that can be trained. The STO is then responsible for determining who will be trained. PROPOSED SOLUTION: As this appears to be a localized State Office problem, perhaps the National Office can reaffirm equitable treatment as the need arises. RESOLUTION 7

CONCERN: Both FSA and FCIC require acreage reports for participation in their programs. There are often discrepancies between the information reported to

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each agency and it also requires double reporting for the producer. This process also requires, in most cases, the producer to complete.

PROPOSED SOLUTION: Acreage reports be moved to a web based program that is accessible to both agencies (FSA and FCIC) and producers. This would provide for consistency between the agencies as well as allowing producers to complete acreage reports at any time and location they choose.

RESOLUTION 8

CONCERN: All CRP acres are required to be identified on the official aerial photography and all CLUs are identify on the aerial photography. However, there is not a requirement for any conservation easements from inventory farms to be so recorded nor is there a requirement for debt for nature contracts to be recorded which causes problems for offices and producers alike PROPOSED SOLUTION: Revise 2–CP to require that conservation easements on inventory farms and debt for nature contracts be delineated on the official aerial photography.

RESOLUTION 9

CONCERN: On price support loans, when bales are being redeemed receipt numbers are entered manually on a partial redemption. If a receipt number is entered incorrectly, the technician entering the receipt numbers is unaware of the error until the entire redemption is processed. At that point, software will tell you there is an incorrect bale. You have to go back to the beginning and revise the number, then continue. This is time consuming and inefficient.

PROPOSED SOLUTION: Add a flag on the PPC94000 screen that will notify you if there is no bale receipt with that number, or that bale has already been redeemed. This would save lots of time for the technician to be able to correct the error on the spot instead of having to walk back through the entire process.

RESOLUTION 10

CONCERN: Often times, FSA programs are implemented throughout the crop year and an earlier completed CCC-36, Assignment of Payment, and CCC-37, Joint Payment Authorization, do not cover these programs. This results in producers receiving FSA payments that are not subject to the CCC-36 and CCC-37. This often results in the FLP accounts of borrowers becoming delinquent. The Security Agreement that a borrower signs grants a security interest in all program payments. FSA has not allowed this in the past as the regulations do not specifically state that you can do so.

PROPOSED SOLUTION: Allow CCC-36 and CCC-37 to cover all future payments and future implemented programs unless otherwise designated.

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RESOLUTION 11

CONCERN: At the present time CRP software needs to be changed so that when we enter a contract or even an offer, into the system, we load it not just by farm number, but by tract and field numbers as well. Up to this point, we have always put the tract and field numbers on the manual CRP-2, but when we loaded them into the system the software only asks for the farm number. We had to go to the Farm Maintenance file and input the CRP acres by tract. Then at certification time, we would have to remember that the acreage was enrolled to certify it properly.

PROPOSED SOLUTION: The contract needs to be loaded by tract and field number to allow the software to automatically transport this data to the maintenance files and compliance files based on the effective date to save having to load this same information three times.

THE FOLLOWING RESOLUTIONS ARE RECOMMENDED FOR NON-ADOPTION: RESOLUTION 12

CONCERN: It appears that some county offices choose to disregard the guidelines concerning partial payments of practices of ECP, CRP, and EQIP. Frequently, a producer completes one practice and has to pay the expenses, while it is not feasible to complete all practices under his contract at that time. Handbook procedure allows the county office to pay for the completed practice as a partial payment on that contract, but the producer does not always receive that payment timely. PROPOSED SOLUTION: Availability of partial payments per handbook procedure may be affirmed from WDC Conservation division down through the State Offices.

RESOLUTION 13

CONCERN: UCCs are being filed at the state level in several different ways. There appears to be no consistency in the manner the names are being filed by different lending institutions. John Deere Credit may file in a person's farm identity, the bank may file by the first name only, while FSA is required to file in the entire legal name. On one known occasion a borrower has filed three UCCs in three different names using the same herd of livestock as security. Price support loans as well as farms loans are affected by this.

PROPOSED SOLUTION: All producers should be required to borrow in the same name as they farm, and all UCCs should be filed by tax identification number to eliminate this situation.

RESOLUTION 14

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CONCERN: When the Administrative Offset list is sent out the first of each month, there may be confusion as to which producer is farming in what county, especially if there are new personnel or temporary employees on the job. The County Office staff is having to check every borrower on the list to determine if that borrower is farming in that particular county.

PROPOSED SOLUTION: The Farm Loan Team include, on the Administrative Offset list, an additional column titled “Counties Known to Farm In” to flag the county office that the person should be farming in a particular county. This would keep the staff from spending additional time checking each person on the list.

RESOLUTION 15

CONCERN: Farm Loan Program and Farm Program eligibility rules differ in regards what constitute a legal entity for program eligibility. Joint Ventures made up of corporations that are owned by family members are eligible for Program payments but not eligible for Farm Loans. Even though they are a family size operation the fact that the operating entity is made of up corporations, excludes them from the Loan Program. As a result applicants are applying for direct and guaranteed loans as the corporations and are applying for Program payments as the Joint Venture. Corporations are farming together and splitting their budget and income 50%-50%. Since the Corporations are made up of individuals, they are eligible for the Loan Program. Furthermore, for Program payments and IRS tax reasons, they function as a Joint Venture. This is not acceptable under the loan programs as it clouds who is the actual operator and who is the actual owner of the crops/livestock and raises serious security concerns. The issue is that we cannot allow entities to apply for loans based upon the "person" rules of the program side. If father and son are farming together, then they need to apply to FSA for a loan as a partnership. The security issues are a big concern in these schemes to pro-rate expenses, income, etc. Basically, farmers are allowed to set up all these sub-divisions to take advantage of tax and program payment loopholes. In actuality, it is one operation, and as loan officials we have to look at it that way. Additionally, having the operation restructure to meet Guaranteed or Direct status could result in reconstitution of the farm in the FSA program records. This will result in delay in processing of the loan application until the respective office completes the recon and issues the new AD-1026s. This could have significant impact on these borrowers’ income tax returns. The reason they do the Joint Venture with corporations is that it provides IRS benefits in addition to the FSA program benefits. If the father and son split out to meet the guaranteed or direct requirement, but then farm together which in actuality they probably will, where would that leave us? For instance say they farm 2000 acres of dry land wheat. To split out the tracts so they farm individual tracts one has 1300 acres and one has 700. Ok so far, but now they order fertilizer. They are not going to individually order it, but jointly for all 2000 acres. They also are not likely to have the fertilizer company send out separate billings. Who made the manage-ment decision to fertilize? Father who ordered it or the son who tagged along since he has fewer acres? Or say fuel - they both use the same fuel tanks and tractors, etc. since in practical terms they are farming jointly. Whose fuel is it? How much is dad's or son's? How much did each use? And so on. In a nut shell, record keeping will be a nightmare for them unless they split the bills and income by percentages. If they tell us they are farming separately, that meets the guaranteed/direct requirements, but actually farm as a joint operation for convenience and tax reasons, then they get spot checked for a program

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review, they could end up owing FSA all program payments if they are found out of compliance. Yes this would be their responsibility, but wouldn't it appear we had a hand in "setting them up for failure"? PROPOSED SOLUTION: Both the Farm Loan and commodity programs have the same eligibility requirements as it pertains to family size farm must be the same and must allow for entities to be members of the entity applying for assistance as long as they can show they are a “family size” operation for the guaranteed and direct loan program.

RESOLUTION 16

CONCERN: The administrative offset list is sent out the first of each month to all counties surrounding that of the delinquent borrower to notify the county office that this person is delinquent and FSA is to receive any payments due the borrower. If the list is sent out on the first day of the month, and the borrower pays current on the fifth day of the month, the county office is not notified until the 1st day of the following month. If the borrower has additional payments made that month, FSA holds the funds for offset to Farm Loan Programs. The borrower is embarrassed and sometimes irate that his payments are still being held and paid to FSA when he is no longer delinquent. PROPOSED SOLUTION: : Farm Program solution to this problem is that there be a short form letter developed that can be sent out with little preparation and time consumption to immediately notify county offices that the borrower should come off Administrative Offset. This should be incorporated into the 1951-C instructions as a requirement to insure that all offices comply.

Respectfully submitted by the 2004 Farm Program Committee:

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INFORMATION TECHNOLOGY COMMITTEE RESOLUTIONS

The IT Committee met at the Galt House in Louisville, KY, on June 14th-16th, 2004, to review resolutions submitted by the membership. The following resolutions are recommended for adoption: RESOLUTION 1

CONCERN: This agency and the public are moving toward new technology such as Palm Pilots and tablet PCs. This technology offers great potential to provide better service to our customers. PROPOSED SOLUTION: As existing PCs are replaced, they should be replaced with notebook PCs that can be utilized in the field.

RESOLUTION 2

CONCERN: When WLS items are updated, the MAC screen gives the user the option of establishing the next due date. When this is done MAC automatically establishes a follow-up date that is the same as the new due date. This can result in delayed follow-ups and servicing of accounts. PROPOSED SOLUTION: Establish a minimum window between due date and follow-up date of 30 days for all WLS items that don’t have a pre-established follow-up timeframes of 30 days or more at this time.

RESOLUTION 3

CONCERN: In order to fully utilize the Information Technology available, it would be beneficial and significantly improve efficiency if a "Search" type process within the FSA web site could be developed which would allow the user to enter a subject or topic and be directed to all applicable Notices, regulation and CFR references. PROPOSED SOLUTION: That a "Search" be developed similar to the Forms search which would allow FSA employees the opportunity to research topics within the FSA

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regulations, Notices and CFR, as well as other resource material, on a National and State level to improve the efficiency of this type of research. This would significantly reduce time needed for research of, in particular, those actions which are only utilized on an occasional basis and if utilized would reduce questions to State Specialists and assist in

assuring the most current directives were being implemented. RESOLUTION 4

CONCERN: Users of laptop have no administrative capabilities for dealing with problems with their laptop while in travel status. This results in situations where the employee has a useless laptop and cannot complete their intended work until they return to the office and have the help desk or state IT person fix it. PROPOSED SOLUTION: Make the primary user of the laptop a member of the administrators group on their machine only.

RESOLUTION 5

CONCERN: Several of our security instrument forms no longer are continuous forms, and do not have an area indicated for initials. PROPOSED SOLUTION: Change such forms as 440-4A, 440- 15, 1962-1, 1940-17, & 1940-1 to list an initials area for borrower(s) on each page where a signature isn't required.

RESOLUTION 6

CONCERN: 2-FLP paragraph 224 E limits Interest Assistance (IA) Agreements to ten years. Currently this is not tracked or is there anywhere that reminds us of the expiration date. There are concerns that some agreements have been approved that will exceed the ten years which is an obvious liability issue. PROPOSED SOLUTION: Develop a GLS flag and develop a reporting capability for IA accounts that establishes the final eligibility date for each IA customer.

RESOLUTION 7

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CONCERN: MAC's AgCredit has been very helpful in determining servicing actions to follow. With AgCredit going to the web in August 2004 the WLS link will be lost. The use of AgCredit data and related WLS codes for workload will be lost. PROPOSED SOLUTION: NTO notify the field timely as to the change, work with Budget to correct the queries, and notify the servicing office to do manual counts as necessary. Concurrently IT should create a report that be run on the Web AgCredit program to provide the data for the manual count to insert for workload.

RESOLUTION 8

CONCERN: The form FmHA 1940-1 "Request for Obligation of Funds" completed in MAC is hard to read after print out. This is due to the fact that the information entered in to the form does not print out in bold type. It would be easier to read if the information was in bold type. PROPOSED SOLUTION: Change the MAC system to that information entered into the form is printed out in bold type or redesign the form to make the form easier to read.

RESOLUTION 9

CONCERN: The DALR$ 2000 V 2.4 program required that the proposed loan servicing date be entered into the basic borrower information screen. The exact same loan servicing date must be entered again in the existing loan screen. In the process of making changes to the loan servicing date (accrual date) in the existing loan screen, it is easy to forget to change the proposed loan servicing date (accrual date) in the basic borrower information screen. PROPOSED SOLUTION: Revise the program so that the loan servicing date only has to be entered in the basic borrower information screen once and auto-fills the same date (accrual date) in the existing loan screen.

RESOLUTION 10

CONCERN: DALR$ still does not allow one to input an emergency loan as an annual

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production loan. If entered as a production loan the program defaults to the OL interest rate. PROPOSED SOLUTION: Modify DALR$ program to allow EM loans to be input as annual production loans.

RESOLUTION 11

CONCERN: SCIMS does not identify individuals as FLP borrowers. This is recommended so that offices other than the servicing center will be flagged that a particular borrower is an FLP borrower. It would also reduce the duplication of entering all information in SCIMS and then having to enter only the FLP flag in name and address. PROPOSED SOLUTION: Modify SCIMS to allow an FLP flag that will download to

the SYS 36. RESOLUTION 12

CONCERN: With present EFT capabilities, FLP employees can only enter one vendor at a time per borrower to pay per day at loan closing. This causes employees to have to do one transaction each day for each vendor on a borrower. PROPOSED SOLUTION: Change EFT requirements to allow more than one vendor to

be paid at a time. RESOLUTION 13

CONCERN: An X needs to be placed next to CNCI on the first page of the AI screen in order to get the non-capitalized amount on the second page of the AI screen. Many times it is possible that the non-cap interest is not being calculated because not all personnel are aware that the X needs to be placed by CNCI. PROPOSED SOLUTION: Have the AI screens reflect non-cap interest rather than having to input an X to have non-cap interest calculated.

RESOLUTION 14

CONCERN: When pulling AI screens to verify payments and payoffs, SAA are not

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being reflected in the payoff amount and is very easy to overlook an SAA. PROPOSED SOLUTION: When a loan has an SAA, the TPOF on the AI screen should reflect a warning that an Equity Recapture account exists.

RESOLUTION 15

CONCERN: We need one place and one place only to get a complete payoff on loans. The current PF screen can be confusing. The number next to payoff amount is sometimes not the total payoff. This has caused problems with misreading of PF screens. PROPOSED SOLUTION: Develop a true PF screen. The screen only needs to show unpaid principal, unpaid interest, daily accrual and total payoff amount in one clean accurate screen.

RESOLUTION 16

CONCERN: USDA has acquired Arcview software and is digitizing soil surveys and othroquad photos. Assessors and various government entities are developing digital maps and datasets that are of use to FSA staff, especially appraisers and environmental coordinators. A CRP extension to Arcview has been developed to support Farm Programs. PROPOSED SOLUTION: Advocate in the Steering Committee and elsewhere that FSA: 1. develop an appraisers and an environmental officers Arcview extension to automate repetitive tasks in support of these positions. 2. State IT Administrators need to include the staff appraiser and environmental coordinator in the “global group” with access to all servers. 3. pursue all possible uses of GIS-GPS and the Arcview software by Farm Loan Approval Officials.

RESOLUTION 17

CONCERN: Agency computers have ArcGIS software however the use of this software is very complex. Appraisers and loan officers have information analysis needs involving real estate location, topographic features, soil productivity, and land use. GIS allows the analysis and display of multiple layers of data, such as currently available in support of CRP. PROPOSED SOLUTION: The agency needs to develop an “extension” to support the use of ArcGIS. This extension would simplify the display of land use

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by cropland, pasture, woodland, site, roads & waste. The extension would list by class the acres by soil types found in the cropland and calculate the average soil productivity index.

RESOLUTION 18

CONCERN: When the producer comes into the USDA Service Center to file an acreage report with Farm Programs they also are asked to supply the same information to Farm Loan Programs for the purposes of cash flows and previous years history. PROPOSED SOLUTION: Work with the program sponsors of Farm Programs and Farm Loan Programs software development to incorporate the new GIS acreage reporting tool into the Web Farm Business Plan (WFBP). The producer should then be able to report once and data would be available for both divisions of FSA.

RESOLUTION 19

CONCERN: The web portal for the Office Information Profile System (OIP) indicates the CED as the contact for FSA in the Service Center and provides the CED’s email address. If the potential FLP customer emails the CED the FLP person responsible to respond may not get the email timely. PROPOSED SOLUTION: Add the FLP loan official’s to the OIP showing appropriate areas of coverage. Provide the automated forwarding to the County Office email address when the user clicks on the email address shown on the web site. (I.E. click on________ and the window opened to send the email pre-fills the cc: to__________)

RESOLUTION 20

CONCERN: Many offices have purchased copy machines with networking capabilities that can copy, scan and FAX. After investing resources for this equipment they have been unable to get the copiers connected to the network because they were not purchased by CCE. PROPOSED SOLUTION: IT staff and CCE should make a commitment to network the copiers.

Respectfully submitted by the 2004 IT Committee:

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MANAGEMENT/PERSONNEL COMMITTEE RESOLUTIONS

The Management/Personnel Committee met at the Galt House Hotel in Louisville, KY, on June14, 2004 to review resolutions submitted by the membership. The following resolutions are recommended for adoption:

RESOLUTION 1

CONCERN: Expired National Notices often remain in effect beyond the expiration date. Appeals have been lost because decisions were made based on expired notices.

PROPOSED SOLUTION: NACS needs to work with management to put in place a system to reissue expired notices or issue an amendment to revise the handbook.

RESOLUTION 2

CONCERN: With the expected retirement of many FLM's over the next 3-5 years, and the resulting influx of new FLOT’s, FSA needs to formally address Farm Management Training for the many newer employees in credit decision positions. With the increasing numbers of new FLOT’s without direct farm backgrounds and/or college farm management education, these employees are in a much more difficult position in dealing with customers and lenders regarding farm management issues. Examples of this are marketing plans, crop and livestock revenue insurance decisions, capital purchases, leasing arrangements, depreciation, improving crop and livestock efficiency and management, tax and recordkeeping issues, etc.

PROPOSED SOLUTION: FSA should consider those courses provided by the American Society of Farm Managers and Rural Appraisers (ASFMRA). Specifically: M-10- Principles of Farm Management, this course may be completed on-line. This would be a good course for a FLOT or less experienced FLO. M-20- Economics of Farm Management- this is a higher level course that would be beneficial to someone

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who is beyond the level of M-10. With agricultural operations becoming more sophisticated, the FSA credit staff needs to completely understand the operation, in order to help meet the applicant’s financing needs. This type of training would directly address the need for a staff able to provide supervised credit.

RESOLUTION 3

CONCERN: Currently the Leave and Earning Statements do not indicate whether Health Insurance Premiums are deducted before taxes. If an error is found regarding premium conversion, the correction can only be made to future pay periods and not retroactively, due to IRS regulations.

PROPOSED SOLUTION: Establish a section on the Leave and Earning Statement and the Employee Personal Page to show what is deducted before taxes-FEHP Premiums and TSP contributions.

RESOLUTION 4

CONCERN: Notice PM 2398 allows National Office staff to submit applications for Net Training courses through the GoLearn website. This opportunity was not made available for field staff with no explanation.

PROPOSED SOLUTION: On Line Training opportunities should be made available to all staff and applications should be accepted from any interested employee.

RESOLUTION 5

CONCERN: Currently employees must sign a waiver to opt out of FEHB premium conversion. When a change is made by an employee to their FEHB, the Administrative section must input this change into their current personnel software. The concern is that the administrative personnel sometimes forgets to select either participating or not participating in premium conversion. If the admin section forgets to select the participating in premium conversion, the software automatically selects not participating. This causes the employee to pay their FEHB premiums with post-tax dollars, thus resulting in a higher taxable wage, whereas the current law enables them to reduce their taxable wages by paying their FEHB premiums using pre-tax dollars (premium conversion). If the correct premium conversion is not selected and an error is found at a later date, the correction can only be made to future pay periods and not retroactively, due to IRS regulations.

PROPOSED SOLUTION: Change the software that administrative personnel utilize to make changes to FEHB, to automatically select participating in premium conversion. If they have a waiver on file, then they can then make that selection to not participate in premium conversion. This would reduce a step for the administrative personnel, due to most employees participate

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in premium conversion, and ensure all employees eligible for premium conversion receive this benefit.

RESOLUTION 6

CONCERN: Notice 16 AO requires that all offices will provide basic FLP services. Some offices do not have a PT assigned FLP responsibility. PROPOSED SOLUTION: Ensure that there is at least one PT in each county office who is assigned FLP duties.

RESOLUTION 7

CONCERN: There is no workload item to capture time FLP employees contribute while detailed to other offices. This result in time gained for the receiving office and no credit given to the office contributing the time. Thus, the giving office loses personnel as a result of lost workload.

PROPOSED SOLUTION: Create a workload capture item that documents time spent detailed to other offices, including state office, DD, and other county offices.

RESOLUTION 8

CONCERN: One of the 2002-2003 adopted resolutions (IT Committee, Resolution #12), involved training for FLO's. The national office response stated that employees may wish to seek individual training through online courses, independent training courses, etc. HRD agreed to provide a listing of available training courses for employees to NACS so the training courses could be published. However, these training courses have not been made available.

PROPOSED SOLUTION: Develop a system for notifying employees of the courses available through HRD, OPM's GoLearn, as well as any CD type training materials available, or other online training available. Maybe even establish a library type system whereby these CD materials may be checked out by employees and then returned once the training is complete.

RESOLUTION 9

CONCERN: Employees of the FSA have unique experiences and abilities needed by International Organizations that provide Micro Credit lending assistance to developing countries. These organizations such as ACDI-VOCA receive grants from the USDA Food programs to deliver advice to Credit Cooperatives that function very similarly to the Farm Loan Programs. FSA employees can assist in developing Business Plans, Collateral supervision, and other loan administration

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tasks better than most commercial lenders due to the emphasis on Supervised Lending. Currently only a few employees are permitted to use Administrative or Official leave to accept these assignments; most are asked to use their annual leave. The assignments are on a volunteer basis with no payment other than out-of-pocket expenses.

PROPOSED SOLUTION: FSA should adopt a policy allowing employees to use up to 15 days admin leave each year (similar to military leave) to complete Agency approved volunteer assignments. These assignments would need to utilize job related skills, benefit a non profit or government entity, and be scheduled with the least possible conflict to their normal duty assignment.

RESOLUTION 10

CONCERN: GIS and GPS have many uses in the FLP programs, however FLP personnel are not being trained nor informed of the benefits of this technology. Examples include: 1. Marking location of hazardous materials; 2. Marking locations and boundaries of conservation easements and wetland easements; 3. Creating and or mapping a legal description for FO applications; 4. Using a copy of aerial photo on laptop/handheld while conducting farm visit to verify property and boundaries; 5. Use in conjunction with real estate appraisals; 6. Combined with street atlas it will provide detailed directions to sites; 7. Overlay topo for use of historical and endangered species determinations.

PROPOSED SOLUTION: Include/provide for FLP personnel to have training in GIS/GPS, so they can take advantage of this technology.

RESOLUTION 11

CONCERN: FLP goals are established at the National level then sent to the State for States to set State goals. Employees delivering the programs are not adequately consulted during the process. PROPOSED SOLUTION: Prior to setting of National and State goals, representative associations be consulted for input on setting of specific goals.

RESOLUTION 12

CONCERN: Vacancy Announcements for CED positions list description of duties that include directing and managing Farm Loan Programs. This appears to be a violation of AO-16. PROSPOSED SOLUTION:

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Require the states to advertise all CED positions in a consistent manner throughout the nation.

RESOLUTION 13

CONCERN: In order to fully utilize the Information Technology available, it would be Beneficial and significantly improve efficiency if a "Search" type process within the FSA web site could be developed which would allow the user to enter a subject or topic and be directed to all applicable Notices, regulation and CFR references. PROPOSED SOLUTION: That a "Search" be developed similar to the Forms search which would allow FSA employees the opportunity to research topics within the FSA regulations, Notices and CFR, as well as other resource material, on a National and State level to improve the efficiency of this type of research. This would significantly reduce time needed for research of, in particular, those actions which are only utilized on an occasional basis and if utilized would reduce questions to State Specialists and assist in assuring the most current directives were being implemented.

RESOLUTION 14 CONCERN: In many State Offices the Farm Program responsibility is divided among several

GS-13 Program Specialists. The entire Farm Loan Program is managed by a single GS-13 Farm Loan Chief, assisted by GS-12 Program Specialists. The GS-12 farm loan specialists have duties comparable in complexity to the GS-13 farm program specialists. Farm loans have sub responsibilities of Loan Making (direct and guaranteed), Loan Servicing, Appraisal, and Environmental whose duties are often more complex than the counterpart positions of Price Support, Conservation, Compliance, and Production Adjustment.

PROPOSED SOLUTION: Farm Loan Specialist positions need to be re-evaluated in light of their duties and responsibilities. Management is encouraged to establish the Farm Loan Specialists (including appraisers) as GS 12/13 positions depending on duties assigned.


CONCERN: Newly hired FLOT's are being required to train with a CED on "administrative" functions. This is often happening before they even report to their duty station and begin the FLOT training modules. Why are the FLM's not capable to train the FLOT's in this area? If the FLM's are lacking this training would it not be a good idea to train them also? PROPOSED SOLUTION:

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Allow FLM's to receive the same administrative training as CED's so that they can train the newly hired FLOT's.

RESOLUTION 16

CONCERN: DD's have recently forced FLP personnel to complete a new FSA-956 which limits their glide time under maxi-flex to 30 minutes. This was applied across the board without regard. Many employees feel that this blanket restriction is a form of punishment and represents poor management by the DD. Many employees who have never had any problems with reporting to work in a timely fashion are now being restricted for no apparent reason. The purpose of Max-Flex is to allow the employees the flexibility to better juggle their work schedules and their family responsibilities. We were told that HRD "recommends" a 30 minute glide time. Each individual employee should work with their supervisor to develop their work schedule based on their needs and the needs of the office. PROPOSED SOLUTION: Issue guidance to DD's that instruct them to apply flex-time restrictions as needed which are in the best interest of the employee and the agency. The management of personnel should not be a one-size fits all process. The State Offices should be held accountable for oversight of the DD's to ensure that they are providing equitable treatment for all employees.

RESOLUTION 17

CONCERN: It appears that State Committees time on the books working for the Farm Service Agency is counted against the States Federal FTE ceiling. The State Committee is not only working for the Federal Farm Loan Program but also the County Office Programs. This will directly impact the number of Federal FTE's allowed for this particular State and further limit the number of Federal FTE's available for the Farm Loan Program. PROPOSED SOLUTION: Reduce the number of Federal FTE's consumed by the State Committee and if applicable the County Committee. Do not count the Committee time against the Federal FTE's for each particular State. If this time must be counted then count it against the National Office and/or prorate the time over the particular States County Office and Federal FTE ceilings.

RESOLUTION 18

CONCERN: The risk inherent with video cell phone usage in the office has yet to be addressed.

PROPOSED SOLUTION: Review risk reduction measures that could be implemented and develop policy to put in place.

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RESOLUTION 19

CONCERN: Technological advances have far outpaced the records retention and storage rules and regulations. An example is all loss to the government borrowers don't show up in the data base.

PROPOSED SOLUTION: Develop a national directive/policy on electronic medium storage and retention.

RESOLUTION 20

CONCERN: With the growing number of mail fraud/identity theft, NFC should change the method of individual identification from social security number.

PROPOSED SOLUTION: Assign an individual number to all FSA clients that are not related to their social security number.

RESOLUTION 21

CONCERN: There is no uniform travel reimbursement for employees who initiate travel by auto from their place of residence rather than their official work station. IL and Mo for example require that an employee deduct their commuting miles whenever the travel begins from home. Other states and USDA agencies allow a mix of mileage claims. There appears no consistency in spite of states such as IL citing the national office as the source of their policy. Employees with government cars are allowed to drive vehicles home in similar situations. The result is that field stationed employees (such as appraisers and loan specialists) are being encouraged to drive 25 miles to work before back tracking costing the government additional mileage and the loss of productive time from their work day. Other employees are staying overnight rather than returning home in order to claim all mileage driven.

PROPOSED SOLUTION: Enunciate a national policy that is uniform for all employees and agencies plus is consistent with the USDA travel Manual. Employees should be allowed to claim mileage from home whenever they travel on official business as long as the claimed mileage would not exceed that if travel commenced at the official workstation.

RESOLUTION 22

CONCERN: MAC does not allow input of applications without a loan amount being input. National Office indicates that anytime a 410-1 is submitted without information, it is the County Office responsibility to act on the application, even though additional information is required to fully complete the application; i.e. loan amounts, purposes, signatures & etc.

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With electronic records being the direct for the future, MAC needs to be more user friendly by allowing the input of an application as received, even though an amount was not originally specified by the applicant. This will also aid in the future for litigation and information searches should the applications be disposed and only electronic records. State office support indicates that the technicians should always input a dollar amount when inputting the application (lie to the computer) and change the record at a later date. This is not prudent as there may never be an amount input due to administrative withdrawal and the agency has basically falsified the record. PROPOSED SOLUTION: Change MAC to allow input of applications when dollar amounts and loan purposes are not originally furnished by an applicant

RESOLUTION 23

CONCERN: Farm Service Agency employees work in an environment conducive to eye strain on a daily basis. Many of the employees have a constant battle with eye glasses or contacts and the cost is inherent to the work environment. Other Federal Agencies, specifically Social Security Administration, pay the annual cost of an eye exam and a set amount on the cost of new glasses annually.

PROPOSED SOLUTION: The Farm Service Agency allows the cost of an annual eye exam and new glasses, if needed, to be reimbursed by the agency for its employees.

RESOLUTION 24

CONCERN: The State Designated Appraiser/reviewer position requires educational and experience requirements to be accomplished within each state for State-certified general license. This specialized training requires several years to obtain. Many of the present staff within the Agency is going to be eligible to retire within the next five to ten years having the State-certified general license. This will leave a tremendous void in the Full-time State Designated Appraiser/reviewer position nationally. The educational process alone takes two to three years to complete due to availability of course offering and funding. In addition, substantial experience in report writing is required. Handbook 1-FLP Par. 145 C addresses the Part-Time FSA Real Estate Appraiser/reviewer position available to the state. This employee has significant responsibilities involved in real estate appraisals and reviews however, also has other FSA program responsibilities as well. The Agency needs to have a "feeder chain" available for employees to attend training and obtain the State-certified general appraisal status. This will alleviate "down time" for position vacancies and allows additional employees the opportunity to be available for the Full-time FSA Real Estate Appraiser/reviewer position within the state. Several states (approximately 10) are presently without a Full-time State Designated Appraiser/reviewer on staff.

PROPOSED SOLUTION:

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National Office needs to commit to this position within the Agency as a specialized field that requires additional education and experience within each State for State-certified general status. Implement a "feeder chain" process for employees within the Agency to work towards State certification by allowing part-time FSA Real Estate Appraisers/reviewers from existing pool of FLM’s as authorized by the FLC and SED within each state. Either needs to be properly staffed with a plan to train additional employees or revising position to a collateral duty on appraisals similar to the environmental and inventory property coordinator roles within the Agency.

Respectfully submitted by the 2004 Management/Personnel Committee:

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LEGISLATIVE ISSUES COMMITTEE RESOLUTIONS

The Legislative Issues Committee met at the The Galt House Hotel in Louisville, KY, on June 14, 2004 to review resolutions submitted by the membership. The following resolutions are recommended for adoption: RESOLUTION 1

CONCERN: “The lender may not initiate foreclosure action on guaranteed loans until 60 days after eligibility of the borrower to participate in the Interest Assistance programs has been determined by the Agency.” There are no Interest Assistance funds for servicing loans closed on or after October 1, 1991 unless originally obligated with interest assistance and the agreement has not been terminated. This requirement provides no real benefit to any of the involved parties. PROPOSED SOLUTION: Amend the statutory requirement to remove the 60-day period and allow a lender to proceed with liquidation immediately upon receipt of agency concurrence, [Section 351(g) of CONACT] or fully fund the interest assistance program.

RESOLUTION 2

CONCERN: Currently, there is pending legislation, such as H.R. 140, H.R. 245, H.R. 986 and H.R. 1566, being considered in Congress outlining plans to buyout the existing tobacco quota programs. If a tobacco quota buyout occurs, it will hinder the cash flow for loans that are dependent on quota income. Additionally, failure to tie the asset value to quota buyout payments has a potential of creating losses to lenders (including FSA) holding quota as security for existing loans. Therefore, pending legislation must be amended to account for the lienholder’s interest in quota collateral during any proposed buyout program.

PROPOSED SOLUTION: NACS, though FMA, should closely monitor pending and future tobacco quota buyout legislation to insure amendments are made that:

• Tie the asset value of quota to buyout payments;

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• Require quota buyout payments to be tied to applicable liens, in order of lien priority;

• Enable the right of offset and assignment to tobacco buyout payments. RESOLUTION 3

CONCERN: In the absence of a reliable source of credit eligible farmers and ranchers will not be able to meet their obligations timely. Profitability, growth potential, and the success of many beginning and family size farm and ranch operations will be adversely affected. PROPOSED SOLUTION: Increase baseline-funding levels for the Title V Credit programs. Of immediate concern are the guaranteed interest assistance loan and direct farm ownership loan funding shortage. [Section 346 of Consolidated Farm and Rural Development Act (CONACT)]

RESOLUTION 4

CONCERN: Term limits fail to account for economic factors, government programs, and weather conditions which have a significant influence on the profitability of family size farms and ranches. Term limits, if enforced, will jeopardize the survival of many viable family-size farming operations. Authorizing a two-year waiver of the term limit for direct operating loans and suspending the term limit for guaranteed operating loans was a welcome band aide, but is not a permanent fix. PROPOSED SOLUTION: Abolish term limits on direct and guaranteed loans. [Section 302(b)(3)(B), (C) of CONACT for direct FO loans] [Section 311(c) of CONACT for direct OL loans] [Section 319(b) of CONACT for guaranteed loans]

RESOLUTION 5

CONCERN: Generating multiple assignment forms creates an unnecessary burden for producers, lenders, and for the FSA personnel who administer the programs. PROPOSED SOLUTION: We propose the following changes:

• Allow customers to execute a single assignment form to assign all present and future FSA program payments, including payments derived from "ad hoc" programs that are not in existence on the date that the assignment is executed. The assignment should be limited to a specific dollar amount and time frame.

RESOLUTION 6

CONCERN: While all FSA employees are funded by federal dollars, some employees are under the direct supervision of a District Director (DD), State Executive Director (SED) and ultimately the Secretary of Agriculture, with a majority of FSA employees under the supervision of an elected County Committee of farmers and ranchers. Dual personnel systems hinder efficient

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utilization of already limited human capital. A direct chain of command and consistent personnel practices for all employees is needed to eliminate dual personnel system conflicts and establish effective management controls. PROPOSED SOLUTION: Support legislation, to create a direct chain of command through the DD, the SED and ultimately to the Secretary for the local service center FSA employees, which will establish full responsibility and accountability.

RESOLUTION 7

CONCERN: There is a statutory provision for Emergency (EM) loans that allows the Agency to make loans to customers based solely on their repayment capacity, even if the loan cannot be adequately secured. Making loans that cannot be adequately secured is not a prudent lending practice and is not a prudent use of tax dollars. PROPOSED SOLUTION: Section 324 (d)(2)(A) [7 U.S.C. 1961] should be deleted from the CONACT to eliminate provisions allowing under-secured loans to be approved by the Agency. The value of our collateral less any prior claims should be equal to or greater than the amount of the loan being made by the Agency.

RESOLUTION 8

CONCERN: Farm Loan borrowers are not allowed the same options as Program producers are allowed to get back in compliance if they swampbust under the Wetland provisions of Instruction 1940-G. Program participants are allowed to mitigate swampbusting by creating alternate wetlands, restoring original wetlands, buy into a wetland bank or not participate in the program. Farm Loan borrowers who swampbust are only allowed to refinance (not participate) or restore the wetland. PROPOSED SOLUTION: Revise or amend the CONACT to allow Farm Loan borrowers the same options as Program participants are allowed to get back into compliance.

RESOLUTION 9

CONCERN: Conservation programs continue to be in the cross-hairs of the environmentalist groups. Funding for the existing programs is less than adequate for the stated needs. Consumer and farmer interests need to be brought together in a stewardship program. FSA FLP's needs to promote the availability of the loan programs to fund conservation needs. PROPOSED SOLUTION: Promote the conservation program funding by incorporating a cost-sharing and Farm Loan Program (Soil & Water type loan) program.

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RESOLUTION 10

CONCERN: Employees under the Federal Retirement System (FERS) currently do not receive credit for unused sick leave at retirement. This is in direct contrast to those employees under the old Civil Service Retirement System (CSRS). Some employees have no intention of accruing sick leave indefinitely, only to “lose” the sick leave upon retirement in the future. It appears that sick leave is being viewed by many as an extension of, and supplement to annual leave. FERS employees feel slighted as they observe their fellow CSRS employees receiving credit for unused sick leave upon retirement. This disparity creates two problems: (1) abuse of sick leave privileges by FERS employees and (2) feelings of unfairness when compared to benefits received by CSRS employees. Additionally, use or abuse of excessive sick leave results in lost productivity for the government. PROPOSED SOLUTION: Continue working with FMA for legislation to allow FERS eligible employees to accumulate sick leave and count the hours towards their years of service in the same manner, as CSRS retirees are able to do.


CONCERN: Federal personnel who are participating in the FERS retirement program are not allowed to accumulate and count sick leave toward their years of service. This provision effectively encourages FERS employees to use accumulated sick leave prior to retiring from Federal service at a time when many agencies are facing a human capital crisis and need their experienced personnel to report to work or retire to make room for a new employee. PROPOSED SOLUTION: Continue working with FMA for legislation to allow FERS eligible employees to accumulate sick leave and count the hours towards their years of service in the same manner, as CSRS retirees are able to do.

RESOLUTION 12

CONCERN: Suitable inventory farm properties must be sold to beginning farmers if possible, and there is no procedural method to split the farm into pieces before sale. It sometimes happens that a property has acreage that a prudent beginning farmer buyer cannot afford to own. An example would be a non-contiguous 40 or 80 acres of hunting land. Presently, such land has a high value and gives no return to the agricultural enterprise, and it is financially foolish for a beginning farmer to acquire debt to own it. The present regulations can encourage applicants to attempt to acquire an inventory farm posing as a beginning farmer, with the real intent of subdividing the property to achieve capital gains. This causes resentment of the FLP in the community. The recovery by the Government can often be less in this situation when the property must be sold as an entire tract. The ability to divide the property could accomplish the following:

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Enable FSA to reach more beginning farmers because the repayment burden is reduced. Maximize the recovery to the Government. Help reduce criticism of the FLP with respect to beginning farmers and inventory farms. PROPOSED SOLUTION: Where market forces dictate that a distinct portion of an inventory farm has a highest and best use other than agriculture, and ownership of this distinct portion would create an excessive debt burden to a beginning farmer, FSA should have the authority to immediately sell that distinctive non-agriculture portion by sealed bids. The balance of the property would be offered simultaneously to beginning farmers under existing procedure.

RESOLUTION 13

CONCERN: Direct loan limited resource interest rates are currently (August 2003) locked in at an interest rate equal to or higher than the regular direct rate. Limited resource farmers are identified by definition as needing special help and more supervisory assistance. Low regular interest rates have effectively eliminated the incentive to designate a farmer as needing this special help and assistance. PROPOSED SOLUTION: Suggest legislation to change the way limited resource interest rates are set. The direct loan limited resource interest rates could be set 2% points lower than the regular direct rate with a 5% cap.

RESOLUTION 14

CONCERN: I am submitting this resolution to both the farm loan program committee and the legislative issues committee since I don't know if the concern needs legislative action for change. My concern is as follows: we currently order credit reports, complete lien searches, and ask applicants to list all creditors on the application and obtain 440-32s on all creditors. This is entirely redundant and cost the government employee time unnecessarily. There is no need to obtain a 440-32 on creditors that are already listed on the credit report if the credit report is a current report. Many times it takes weeks to get all the 440-32s back in the office, and the information is the same as is listed on the credit report. Also many creditors are now charging fees to verify balances. PROPOSED SOLUTION: Obtain a credit report on each applicant, as well as lien searches and ask applicants to list all creditors on the application. If there are no additional creditors than those listed on the credit report, then simply use the balances listed on the credit report to establish cash flow. If additional creditors are found, then obtain 440-32s only on the creditors who are not already listed on the credit report. This will save a significant amount of time, as the information is already on the credit report.

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RESOLUTION 15

CONCERN: Whereas, FSA Instruction 1910.4 (c) provides guidelines which allow Lo Doc direct loans to be made, but, no streamlined method exists to complete rewrites of existing direct loans many of which are well secured. This places an additional paperwork burden and time delays on producers as well as adds to workload to FLP staff. PROPOSED SOLUTION: Therefore, be it resolved that FSA develop Lo Doc Servicing regulations that are similar to the requirements of 1910.4 (c) by completing a rewrite to the 1951-S regs to allow for loans that meet certain guidelines to qualify for "Lo Doc" streamlined servicing.

RESOLUTION 16

CONCERN: The Farm Security and Rural Investment Act of 2002 did not continue the suspension of Direct OL Term Limits. The legislation has provided a limited two year extension. Many farmers across the Southwest part of the Nation have seen severe drought conditions the last 7 years and Record low commodity prices a couple of years ago. Many farmers have been unable to elevate themselves to a position of meeting Bank/Lender underwriting standards. Based on today's policies many of these farmers will not be able to obtain funding for their 2005 crop year. PROPOSED SOLUTION: We need the administration to recognize the need to either do away with or extend the term limit requirements. It should be put into the legislation, that if the county was designated a Disaster County for a certain year, that year should not be considered in the term calculations. Procedure and Instructions on granting the extension and the requirements of what is considered a viable operation has also been unclear. We need to specify what a viable operation is.

RESOLUTION 17

CONCERN: Often times, FSA programs are implemented throughout the crop year and earlier completed CCC-36, Assignment of Payment, and CCC-37, Joint Payment Authorization, do not cover these programs. This results in producers receiving FSA payments that are not subject to the CCC-36 and CCC-37. This often results in the FLP accounts of borrower becoming delinquent. The Security Agreement that a borrower signs grants a security interest in all program payments. FSA has not allowed this in the past as the regulations do not specifically state that you can do so. PROPOSED SOLUTION: Allow CCC-36 and CCC-37 to cover all future payments and future implemented programs unless otherwise designated.

RESOLUTION 18

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CONCERN: Reliable Interest Assistance funds appropriations are not able to meet all credit needs of family sized farms.

PROPOSED SOLUTION: Increase Interest Assistance funding levels. Additionally, establish a maximum $450,000 IA principal balance limit on guaranteed loans requiring the use of Interest Assistance, which will allow limited IA funding to be spread among mare of the FSA customer base.

Respectfully submitted by the 2003-2004 Legislative Issues Committee:

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MINUTES OF BOARD MEETING, APRIL 12, 2005 Crystal City Hilton

Meeting was called to order by NACS FSA President, Bill Mahanay at 6:30 P.M. A role call showed the following members to be present: Bill Mahanay, President; Melissa Cummins, Vice President; Cheryl J. McGraw, Secretary; Mike Gibbs, Treasurer, Betsy Senter, Past President, and Dan Walsh, Zone C Representative. OLD BUSINESS President’s Report

Goals: The Board reviewed the goals that were established for the 2004-2005 year. Many of the goals outlined have already been accomplished and many others are in the process of being accomplished. However, it is believed that some of the goals will have to be carried forward into the 2005-2006 year to be finished. A final review of the goals during the Old/New Board meeting during the 2005 convention will help ascertain which goals need to be moved forward.

April Policy Meeting The reports given during the April policy meeting illustrated the fact that FSA is in the process of undergoing major reorganization in the near future. No details of the reorganization are available yet, but the President has promised to cut the budget deficit by 50% over the next 5 years and the U.S. Dept. of Agriculture is one of the major targets of these cuts. Staffing Ceilings The NACS board has asked for a copy of the formula that was used to determine staffing ceilings for state so a review can be completed and an equitable treatment determination made. Orlando, Florida 2005 NACS National Convention The hotel where the convention will be taking place is very conveniently located to many restaurants and other facilities. It is a very nice hotel and will be a great location for a family vacation in conjunction with the convention. Updated Zone Information Attendance at all of the Zone Meetings went well, and each meeting seemed to be a success. Upcoming Zone meetings have been suggested as follows: Zone A, Sheridan, WY; Zone B, Lincoln, NB; Zone C, yet undecided; Zone D, Little Rock, AK. The board will decide during the National Convention on the proposed sites. Vice-President’s Report

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Committee Visits with NO Committee meetings have finally been authorized. Personnel/Management Committee has already traveled to D.C., and Chairman, Stu Skidmore reports that the meeting lasted a full day and NO was very responsive to questions and material presented. The IT committee traveled to St. Louis the last week of March, and viewed many upcoming software updates/releases and discussed suggestions with NO for each. FLP committee will travel to Washington, D.C. next week, and the FP resolution responses have just been received. FP chairman will survey the committee members to determine if any new issues need to be addressed. The FP committee may meet with D.C. personnel by conference call to discuss any further issues instead of traveling to D.C. That decision will be made after discussions among the FP committee members has taken place. 2005 National Convention Ms. Cummins will contact the Convention Chairman to determine convention preparedness, and forward checklists for discussion. Secretary’s Report Minutes of Fall Board Meeting Minutes of the Fall Board Meeting were reviewed by each board member present. Further discussion was held on the topic of the Recruitment Brochure. Ms. Melissa Cummins made a motion to allow copies of the Recruitment Brochure to be made at a copy center, and be made available for those in attendance at the 2005 National Convention, and the cost to be paid from NACS treasury funds. Mr. Mike Gibbs seconded the motion and having no further discussion the motion passed. Mr. Bill Mahanay will check into having brochures printed and available, and forward the bill to Treasurer Gibbs for reimbursement (so long as the bill does not cost more than the allocation for copies listed within the budget). Newsletter Updates Currently NACS has published 4 newsletters during the 2004-2005 year. Another newsletter will be published at the end of April and a final newsletter will be published at the end of May/first of June. Newsletter article assignments were discussed, and it was decided that Secretary McGraw will forward an e-mail message to those with newsletter article assignments. Treasurer’s Report 2004-2005 Budget

The current balance of the treasury is $15,574.49. All Zone expenses have been reimbursed, and no bills are due at this time.

The money market account has a balance of $27,825.36. Many donations have been received into the Wunder Fund from the Zone

meetings. An exact amount is not known, but will be determined and forwarded to the board. A challenge was made by Zone A to the other zones in relation to Zone donations. Treasurer Gibbs will determine the exact nature of the challenge so that it may be published in the upcoming newsletter.

Mr. Gibbs discussed the LI Committee Expense Vouchers. Some have been submitted, and no STO proof of denial for reimbursement was presented. Ms. Cummins made a motion that the vouchers be reimbursed without the

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refusal proof. Ms. McGraw seconded the motion, having no further discussion, the motion passed and the vouchers will be paid.

Ms. Cummins made a motion to allow the Legislative Committee members to claim $12 on their vouchers for the purchase of the Congressional Guide, Mr. Dan Walsh seconded the motion, and having no further discussion, the motion passed. Mr. Mike Gibbs will automatically add the $12 purchase on those vouchers that have already been turned in as all committee persons did purchase the congressional guide.

NACS board previously established a $1000 incentive to promote attendance from states which have key congressmen. How will this money be divided? Ms. Cummins moved to allow the legislative committee and the FMA liason to determine which states need to receive part of this reimbursement; motion was seconded by Ms. McGraw, and having no further discussion, the motion passed. Ms. Betsy Senter, FMA liason will contact Ms. Helena Pitcock, LI committee chair to make this determination and then report back to the board.

The treasurer reporting that he has not further information, Ms. Melissa Cummins made a motion to accept the treasurer’s report, Mr. Dan Walsh seconded the motion, and having no further discussion the motion passed.

Past President’s Report

NACS FSA Operational Manual This is currently a work in progress. Ms. Senter has asked for some help from other NACS members in getting this project completed. The other members have agreed and the manual is expected to be finished by the 2005 National Convention. Zone C Report Zone Questions Unanswered questions from the convention were forwarded to NO personnel. Responses have been received from Mr. Little and Mr. Crisp. Further questions will be forwarded to Mr. Williams’ group for a response, and once all responses are received, a list will be compiled to send out to the membership. Old Business Goals

The board reviewed the goals established for the 2004-2005 year including the following: 1)Reduce apathy among members, 2) Maintain or improve communications with members, 3) Continue efforts to overcome the long term effects of the 1165 classification decision, 4) Increase involvement in FMA, 5) Revitalize the Convention Committee, 6) Update duties and responsibilities of officers, alternate Zone Representatives, and membership committee, 7) Increase membership by 2% from June 2004 to June 2005, and 8) Increase the amount of funds raised without increasing membership dues or asking more of those who attend the annual convention.

Many of the goals have already been attained and others are in progress. Included in goal 1 is the need to increase committee survey numbers and with the online process this year, increased surveys have been received thus far. Also included in this goal is the need to increase number of officer candidates, and thus far we have more announcements than last year. The recruiting tool letter outlined in this goal has also been developed and is currently being used. Copies

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will be available at the National Convention for members to take back for recruitment in their offices. Increased attendance at Zone and National Convention has been attained thus far at the Zone meetings, and we are hoping for increased numbers at the National Convention as well. The “First Time attendees” financial incentives have been received well and seem to be promoting attendance at the National Conventions.

The communication goal is going well and will be met by the end of the term of service at the number of newsletters from Zone Reps and the National Secretary will have been attained, as well as increased questionnaires to state presidents and surveys to members. The report card outlined within this goal will be completed at the end of the year by monitoring which goals have been completely attained and which goals need to be moved forward.

The third goal is a work in progress. The NACS board has asked for an outline of the criteria used to establish staffing guidelines so that these criteria may be reviewed for equality and fairness.

The fourth goal has been attained with the financial incentives offered to target states who offer attendance at the FMA National convention. The USDA Conference was the largest conference in attendance at this year’s National FMA convention.

The fifth goal has been attained as well as Betsy Senter was re-elected as the Convention Committee chair for NACS-FSA. She will contact Chuck Sadler, NACS-RD president and begin working toward a close communication between the agencies in relation to convention issues.

The sixth goal is a work in progress as well as Betsy Senter works toward devising an operational manual for NACS-FSA. She has enlisted the help of other members and expects to have the manual ready to present at the National Convention.

The seventh goal has been a difficult goal to calculate with the increased number of retirees. The board may need to review this goal in the future and update it to read a percentage of total employees as members instead of a percentage increase in total membership numbers.

The eighth goal is also a work in progress as the membership committee continues to devise new and inventive ways to raise funds. The traditional NACS raffle is again being used this year as a fund raiser. Ms. Millie Turner, membership committee chair, expects this to be another successful year with all tickets being sold.

Data Management Task Force The Data Management Task Force reviewed the issue of increased information on the website and the issue of dealing with this increased information and how to store it. The Task Force had the following recommendations: 1) Maintain the current year’s information and the past two year’s information on the web site. 2) Archive older material to CD, and place a request document process on the web site for someone to be able to “order up” the document. 3) A copy of the CD will be maintained by the NACS Secretary, NACS President, and NACS Web Administrators. These people will pass the information on to successors in each position. Melissa Cummins made a motion to accept the recommendations of the task force and Dan Walsh seconded the motion and having no further discussion the motion passed. Zone D Reimbursement

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Ms. Gretchen Thomas from Alabama contacted the NACS board to request reimbursement for a projector used in a meeting room during the Zone D meeting. They were charged $39.24 for the use of the projector. Mike Gibbs made a motion for NACS to reimburse for this expense. Melissa Cummins seconded the motion and having no further discussion, the motion passed. NACS Members Attendance at NASCOE area rallies Craig McCain, of NASCOE, contacted the NACS board to request an attendee at the Southeast Area Rally. Robin Hampton agreed to attend and limit NACS reimbursement cost to $100. Discussion was also held relating to the Northeast Area Rally. Millie Turner agreed to attend this meeting and limit NACS reimbursement cost to $100. Brent Gremillion made a motion to allow these two individuals to attend the meetings and receive reimbursement for their attendance up to $100. The motion was seconded by Dan Walsh, and having no further discussion, the motion passed. New Business Wunder Fund Challenge Zone A, inspired by Dan Mattson, initiated a challenge to other Zones to contribute to the Wunder Fund. Treasurer Mike Gibbs will find out the specifics of the challenge and forward those to the committee for publication in the newsletter. Awards for Convention The board was advised that all nominations for the Blood, Sweat and Tears Award need to be forwarded confidentially to Betsy Senter for selection. Ms. Senter will also select the Presidential Award. Ms. Melissa Cummins will select Zone Rep awards and Committee awards and Mr. Bill Mahanay will select officer awards. Convention Planning/Agenda Corporate Sponsors will again be used this year. The committee discussed several possibilities including ORBA, FEEA, Wright and Co, etc. Mr. Bill Mahanay will contact Florida to discuss sponsorships and the amount of space available for sponsors. Committees Training for committees was discussed and it is the consensus of the board that training is needed for committees each year. Officer positions have position descriptions, but committee positions do not. Officer Term Ms. Cheryl McGraw brought up the issue of having a two year term for officers with a staggering of term possibility. One year is not long enough to fully understand and perform duties most efficiently. However, this idea inhibits the upward movement from one position to another. It was decided that the issue would be discussed during the National Convention for discussion by the membership. Spring Meeting with NO Personnel The agenda for the board’s spring meeting with NO personnel was discussed. The board will be meeting with Mr. Jim Little, Ms. Carolyn Cooksie, Mr. John Williams, and Mr. Doug Frago through official appointments and with others on a drop-by basis.

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USDA Conference Report Ms. Betsy Senter reports that there is a wealth of USDA agencies available for membership with FMA and that the USDA conference chairs will discuss FMA with these other agencies and try to initiate interest. LI Committee Chair Report The FMA convention this year was a much improved meeting over previous years in so far as business accomplished. The preparation of resolutions to discuss with our Senators and Congresspersons was improved as well with the direct relation to specific legislation currently being addressed as well as legislation that was supported in the past. The USDA Conference made over 60 contacts during our Day on the Hill, and feel that many doors have been opened for discussing the impending 2007 Farm Bill. It is important to maintain these contacts and strengthen them. Cheryl McGraw made a motion that the recommendations of the LI committee in conjunction with the recommendations of the USDA-FSA Conference Chair be accepted in the following manner: $500 to MN, $200 to OH, $200 to NY, $200 to TX., which increases the originally allocated $1000 to $1100. Brent Gremillion seconded the motion. Discussion: Mike Gibbs stated that this extra $100 would have to come from reserves, and the members of the board concurred that this would be okay. Having no further discussion, the motion passed. FMA Attendance reimbursement Ms. Helena Pitcock and Ms. Betsy Senter have worked to ensure that key states are represented during the FMA convention. These attendees will share in the $1000 reimbursement. Ms. Pitcock and Ms. Senter will review the attendees and make a recommendation to the board. Membership Committee Report Ms. Millie Turner reports that raffle sales are going well with many states having already sold all their tickets and some states even asking for more tickets. Those states who haven’t sold all their tickets should return them to Ms. Denise Lickteig as soon as possible for redistribution to states which still need tickets. She expects all raffle tickets to again be sold this year. Annual Report Ms. Cheryl McGraw will contact Everett Purrington, the NACS Webmaster, to determine which information he already has and which information still needs to be compiled to send to him and by what date he needs the information. She will also send out an e-mail reminder to everyone to print their annual report to bring to the convention with them, and will print 10 copies of the annual report to present to the National Office personnel who attend the national convention. Newsletter Article Assignments A list of newsletter article assignments were discussed during the board meeting. The list will be compiled and forwarded to all who have an article assigned. The deadline to submit articles for the newsletter is April 27, 2005. A final newsletter will be formulated during the first week of June. Committee Survey Forms Committee survey forms are now available online and anyone who wishes to complete one is encouraged to do so. Many have already been received, but we need to remind everyone that this process is available. Resolutions

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Resolutions can now also be submitted online. Some resolutions have already been submitted, but we need to remind everyone that this process is available.

Having no further business to discuss the motion was made by Ms. Melissa Cummins to adjourn the meeting and the motion was seconded by Mr. Dan Walsh;

motion passed and meeting was adjourned at 9:15 pm

Respectfully Submitted by Cheryl J. McGraw NACS Secretary

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Constitution and By-laws ARTICLE I - NAME This organization shall be known as the National Association of Credit Specialists of the USDA - Farm Service Agency. ARTICLE II - OBJECTIVES A. To expand, improve, and expedite the services of USDA Agencies to Rural America. B. To promote the social, economic, professional and vocational skills, civic and

personal welfare of all USDA - Farm Service Agency employees to:

1. Ensure equal status and privileges with other federal and non-federal employees. 2. Improve morale and efficiency by giving suitable recognition both to individual

employees and to USDA - Farm Service Agency field offices whose performances are outstanding.

3. To collect and disseminate information relating to items 1 and 2 listed above and

to use such information for the general good without favoritism, bias, or prejudice.

C. To help organize associations in all states. D. To cooperate and affiliate with other organizations whose objectives are similar and compatible with those to this Association. ARTICLE III - MEMBERSHIP A. Membership shall consist of four kinds:

1. REGULAR - regular membership shall be those employees, not including political appointees, involved in agricultural credit services who have supervisory and/or program management responsibilities, who pay annual dues and agree to abide by the Constitution and By-Laws of this Association.

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2. ASSOCIATE - All individuals who have an interest in the objectives of the

Association but do not qualify for regular membership, who pay dues and agree to abide by the Constitution and By-laws of this Association.

3. RETIRED - All retired employees of the USDA Agencies shall be eligible for

retired membership by payment of annual dues and agreeing to abide by the Constitution and By-laws of this Association.

4. HONORARY - Any person who the Board of Directors shall recommend and

receive a 2/3 vote from the official delegates at the annual meeting. B. Regular membership only, shall carry with it the privilege of holding any office to

which they may be elected or appointed and can represent their state if appointed a delegate and have voting privileges on matters brought before the Association.

C. Membership in this organization will be free of discrimination in terms of membership

or treatment because of race, color, religion, sex, national origin or age. D. To qualify for membership in the National Association, an individual must be a

member of a State Association or a duly recognized Association of Credit Specialists working in a state, regional or national office.

E. With exception to duly recognized State Associations, all state, regional or national

office associations must submit a copy of their proposed Constitution and By-Laws to the NACS-FSA Board of Directors for review and acceptance. The proposed Constitution and By-Laws must clearly define their proposed membership criteria.

F. NACS-FSA is affiliated with the Federal Managers Association. All duly recognized

state, regional or national associations are expected to secure and maintain status with the Federal Managers Association and pay dues directly to that organization for all regular members.

ARTICLE IV - GOVERNMENT A. OFFICERS

Officers of this Association shall be a President, Vice President, Secretary and Treasurer, who shall hold office for one year, or until their successors are duly elected and qualified.

B. BOARD OF DIRECTORS

The Board of Directors shall consist of the newly elected officers, the retiring president and the zone representatives. For the first year of the newly formed Association, the retiring president shall be the 1995/1996 president of the dissolved National Association of County Supervisors.

C. The four officers and past president shall be the executive committee.

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D. Manner of Election 1. Each state or duly recognized association in good standing on the first day of the

national convention shall be entitled to the following delegates and alternates based on the regular membership in the respective association:

Membership Delegates Alternates 1 - 10 2 2 11- 25 3 3 26- 40 4 4 41 - + 5 5

Membership shall be shown by the records of the National Association Treasurer as of the first day of the National Convention. Selection of each delegate and alternate shall be evidenced by a certificate signed by the President or Secretary of each state or recognized association.

2. Only registered delegates with certified credentials and present, shall be entitled

to vote and each such delegate may cast one vote at each election and on every question submitted to the convention.

3. A majority of the registered delegates with credentials, present at any

convention, shall constitute a quorum. 4. The election of the President, Vice President, Secretary, and Treasurer shall be

at the annual convention with the membership in attendance and the state delegates casting votes as prescribed.

5. The Nation will be divided into zones as determined by the Board of Directors.

The Board of Directors will assign each new association to a Zone. The Zone Representatives will be bound by the wishes of their zone at the Board of Directors meeting and will cast votes in keeping with the instructions given. The zone representatives shall be elected by ballot at the annual meeting by the delegates of the states or recognized associations comprising the zone.

6. Election shall be by ballot. The candidate receiving a majority vote shall be

declared elected. If no candidate receives a majority, the two candidates receiving the most votes shall be again voted on.

7. A vacancy in any office shall be filled by a majority vote of the Board of Directors.

The appointee shall serve until a successor is elected at an annual meeting. E. Newly elected officers and representatives shall be installed following election at the

annual meeting.

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ARTICLE V - DUTIES OF OFFICERS AND BOARD OF DIRECTORS A. The duties of the officers shall be those normally devolved upon such positions. B. The President, with the advice and consent of the Board of Directors, shall appoint

such standing and special committees deemed necessary, and shall be a member ex-officio of all committees.

C. The Officers and the Board of Directors shall:

1. Have power to transact all business of an emergency nature that may arise between annual meetings.

2. Act as a program committee, appointing sub-committees from among the

membership as necessary.

ARTICLE VI - MEETINGS A. Annual meetings shall be held at a time and place designated by a majority vote

of the state delegates at the annual convention with the membership in attendance.

B. Committee meetings shall be held immediately prior to and during the

convention, the purpose of which will be to review proposed resolutions to be presented at the annual meeting. A vote will be taken to recommend either adoption or non-adoption of each resolution. Each committee member shall be entitled to one vote on the question of recommendation. The committee members shall take a non-binding poll of the other members present. The question of recommendation shall not be considered to be a question as defined in Article IV, Section D2. Each committee shall present a report to the annual meeting. The format of the report is to be approved by the Board of Directors. This format shall include, at a minimum, a list of proposed resolutions recommended for adoption and a list of proposed resolutions not recommended for adoption. The committee shall have the authority to consolidate similar resolutions and edit resolutions without changing their original intent.

C. Meetings of the officers and Board of Directors shall be at the call of the

President or by a majority of the Directors, not less than two meetings annually. No meeting of the Board of Directors shall be held without due notice to all members thereof.

ARTICLE VII - AMENDMENTS A. The constitution may be amended at any membership meeting by a two- thirds

(2/3) vote of those present, provided notice of the proposed amendment is sent to each State President thirty (30) days prior to the meeting for their distribution to the membership or three-fourths (3/4) vote of the active members present and three-fourths (3/4) vote of the delegates present if no notice has been given.

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BY-LAWS ARTICLE I - DUES AND FISCAL YEAR A. Annual dues shall be determined by the Board of Directors.

1. Dues shall be due and payable on February 15th of each year. B. The fiscal year shall be January 1 to December 31. ARTICLE II - QUORUM A. A majority of the registered delegates with certified credentials, present at any

convention shall constitute a quorum. ARTICLE III - FINANCES A. No debts shall be contracted or liabilities incurred by or on behalf of the

Association in excess of cash on hand. B. Bills shall be paid by the Treasurer, on the approval of the Board of Directors,

and the minutes shall reflect such approval. C. The Treasurer shall give financial reports at annual, special, and Board of

Directors meetings. D. The books of the Treasurer shall be audited annually by a committee appointed

for that purpose.

1. The audit committee shall be composed of one representative from each zone and no representative shall be from a state with an executive committee member.

2. The Treasurer’s books shall be closed each year as of the last day of the

month preceding the National Convention. E. Net earnings shall not be distributed for the benefit of any one member. F. Should dissolution occur, all remaining funds in the Treasury shall be distributed

as determined by a majority vote of the Board of Directors.

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ARTICLE IV - AMENDMENTS OF BY-LAWS Amendment of the By-laws shall be done in the same manner provided amending the constitution. ARTICLE V - MEETINGS A. Conduct of meeting - “Robert’s Rules of Order”, latest edition, shall govern the

conduct of all meetings and proceedings. B. Order of Business

Roll Call Reading, correction, approval of minutes of last meeting Reports of officers Reports of committees Old Business New Business Election of Officers and Board of Directors Miscellaneous Business Installation of new officers and board members Adjournment

Adopted: July 10, 1996 Last Updated on November 13, 1999

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RAY TURKNET BLOOD, SWEAT & TEARS AWARD

This award is named in honor of our founding and longest serving president. It is considered the most prestigious award presented by NACS. The past president, who reviews nominations made by the NACS board, makes the selection of a recipient. The award is based on the recipient’s service to NACS and it’s members.

YEAR NAME STATE 1977 Loren A. Nelson Idaho 1978 Kenneth L. Krieg Nebraska 1979 Paul W. Hill West Virginia 1980 James R. Berry Maine 1981 R. Anthony Rickett Ohio 1982 Arne A. Orvedal North Dakota 1983 Charles J. Schaefer North Dakota 1984 James L. Cox Missouri 1985 Robert J. Rimington Illinois 1986 Richard Brassfield California 1987 Norbert L. Soltwedel Illinois 1988 Richard T. Floyd New Mexico 1989 Hugh A. Clark North Carolina 1990 Ray Bartholomew Kansas 1991 Robert Shearer Iowa 1992 Tom Dixon North Carolina 1993 Larry Lawson Illinois 1994 Charlie Crane New Mexico 1995 Clayton Ketchem Montana 1996 Gary Mersinger Illinois 1997 Jim Monroe Michigan 1998 Tanya Reeck Washington 1999 Bill Mahanay Kansas 2000 Spencer Larson North Dakota 2001 Betsy Senter South Dakota 2002 Everett Purrington Washington 2003 Millie Turner Pennsylvania 2004 Darren Metzger Ohio

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NACS PAST PRESIDENTS

YEAR NAME STATE ZONE1973-1974 RayTurknett Texas B 1975 Harold Kennedy Texas B 1975 Joseph Turney Oklahoma B 1976 Loren Nelson Idaho A 1977 Paul Hill West Virginia C 1978 Howard Boatman Minnesota B 1979 Dave Wilson Oregon A 1980 James Berry Maine C 1981 Ney Williamson West Virginia C 1982 James Cox Missouri B 1983 Richard (Dick) Floyd New Mexico A 1984 Jerry Wishall Kansas B 1985 James Monroe Michigan C 1986 Gary Case Missouri B 1987 Steve Pratt Kentucky C 1988 Hugh Clark North Carolina D 1989 F. John Riha, 1111 Nebraska B 1990 Norbert Soltwedel Illinois C 1991 Clayton Ketcharn Montana A 1992 Tim B. Potts South Dakota B 1993 Dennis G. Beaulieu Maine C 1994 Robert G. Reed, II California A 1995 Eric Guenther Kansas B 1996 Charles K. Crane New Mexico A 1997 Millie Turner Pennsylvania C 1998 Betsy Senter South Dakota B 1999 Eric Guenther Kansas B 2000 Scott Bown Utah A 2001 Robin Hampton North Carolina D 2002 Betsy Senter South Dakota B 2003 Bill Mahanay Kansas B 2004 Bill Mahanay Kansas B

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HONORARY MEMBERSHIP Article III, A.,4. of our constitution states that Honorary Membership shall be bestowed to "any person who the Board of Directors shall recommend and receives a 2/3 vote from the official delegates at the annual meeting."

Present Honorary Members Year Selected 1.Douglas Young 1977

2.Robert Lang 1977

3.Donald Downing 1979

4.Phil Gerald 1979

5.Clarence Squellati 1980

6.Keith Smalley 1980

7.Allan Brock 1980

8.Paul Hill 1986

9.J.C. Kirk 1988

10.Robert J. Rimington 1992

11.Ronnie 0. Tharrington 1992

12.James R. Berry 1992

13.Norbert L. Soltwedel 1993

14.Clayton Ketcham 1993

15.Carolyn Cooksie 1997

16.Eric Gunther 2003

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RESOLUTION TO ESTABLISH AN

ENDOWMENT TO BE KNOWN AS THE

"WUNDER FUND" WHEREAS, the National Association of Credit Specialists (hereinafter referred to as "NACS") of the USDA-Farm Service Agency, holds an annual convention at a time and place designated by the majority vote of the state delegates at the annual convention; and, WHEREAS, members of NACS, and in particular, new members, are frequently reluctant to attend the national convention due to financial reasons; and, WHEREAS, the national convention not only provides valuable information and training to individual members, the conventions assist spouses and other family members in better understanding the purposes, values, and ideals of the NACS and the inter- relationship of these objectives with the individual member; and, WHEREAS, the members of NACS desire to encourage, support, promote, and financially assist members who would be first time attendees to the NACS convention. THEREFORE,BE IT RESOLVED, that NACS adopt the establishment of an endowment fund that would be built through the generosity of the NACS membership for, but not limited to, the following purposes: 1. That earnings generated from the endowment fund would be utilized to reimburse or

otherwise encourage members to attend their first national convention; and, 2. That the endowment fund would be funded entirely by donations and controlled by

the treasurer with expenditures approved by the NACS board; 3. That the board of directors would have the authority to receive funds and earmark

funds, and to invest and reinvest the funds in such manner and in such securities as would be most advantageous for the perpetuation of the endowment fund to be known as the "Wunder Fund";

4. That the endowment fund would be used for educational purposes.

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