Modifications and Justifications

1. Modifications and Justifications

2. Where is the policy regarding EQIP mods? • EQIP Manual?(Programs Manual, part 515, EQIP Manual) • Contracting Manual?(Programs Manual, part 512, Conservation Program Contracting Manual) • In your area resource conservationist’s head? • None of the above? • All of the above? Trick Question……

4. 6 pages in the section

5. Mods in general… • Contract modifications are specific changes to a contract that require an NRCS Approving Official and participant signature.  • Contract modifications are documented on either the Revision of Conservation Plan/Schedule of Operations (Form NRCS-CPA-1156), or the Transfer Agreement (Form NRCS-CPA-152).  • These forms must be manually signed by the participants prior to the approval by NRCS Approving Official with an electronic signature.

6. Minor contract changes… • Minor contract changes are defined as changes made to an EQIP or WHIP contract that do not increase or decrease the current obligation by more than $1,000 (will change to $500 – ProTracts has already changed.) • Do not require approval by a NRCS Approving Official • Do not require participant signature.  • Minor contract changes are captured in ProTracts and do not require documentation in the contract folder.  • These include all edits or updates made to a contract that do not require numbering, approval, or participant signed hard-copy documentation.  • Changes of this nature will be recorded in the history module in ProTracts and reflected on the printed Form NRCS-CPA-1156.

7. Modification Process • Modifications will be submitted for approval by a NRCS Approving Official.  • Approved modifications will be documented on Forms NRCS-CPA-1156 or NRCS-CPA-152 depending on the type of changes made.  • Contract participants must sign the appropriate form prior to NRCS approval. 

8. Modify contracts through ProTracts as follows: • Use of Form NRCS-CPA-1156, Revision of Plan or Schedule of Operation or Modification of a Contract, will be generated through ProTracts, or • Form NRCS-CPA-152, Transfer Agreement, as applicable for documenting a modification.

9. The basis for modifying the contract must be stated clearly when submitting a modification for approval in ProTracts.  • Have instructed area RCs to send them back if not adequate justification. • This information will be printed on Forms NRCS-CPA-1156 or NRCS-CPA-152, as appropriate.

10. Changes at Payment • Agency financial audit indicated that our obligation changes at payment per 512.50 are poorly documented. • Query of the 13,400 changes at payment indicate broad level of explanation detail. • The text entered by user is stored on the contract history. Examples to follow. • Concerns by FMD that $1,000 is too high a threshold without an obligation change and second level review.

11. Justifications for Minor Changes at Payment

17. Sample List of Change Reasons • $939 “Trying to get mod through to do payment.” • $945 “Rounding error.” • $858 “Inaccurate Planning.” • $840 “More springs developed than planned.” • $875 “Ok.” • $819 “Decided to seed another field to grass.” • $.91 “because.” • $76 “For Contract Items 8 and 10 needed an additional 45 feet of Corrugated PE 6", an additional 53 feet of Corrugated PE 10" and an additional 10 feet of Corrugated PE 12" to complete the system. This resulted in an additional 108 feet of trenching and backfilling.

18. Proposed Changes to ProTracts • Reduce threshold to $500 • Already changed in ProTracts but not yet in policy • Provide standard list of change at payment reasons. • Draft list on next slide. • Educate state ProTracts users to enter valid, descriptive reasons for changes at payment.

19. Proposed Reasons

20. Getting back to the modification process… • Contract items will not be rescheduled to avoid loss of payments due to violation of HELC/WC compliance provisions.  • The contract must be completed as scheduled without payment.

21. Modifications that result in an obligation increase must be within the scope of original contract and are generally categorized as a “cost overrun.” • Modifications involving a “cost overrun” will be processed using the original fund code and fund year for the contract. 

22. Modifications involving a “change in scope” are prohibited for all programs. Contract modifications are within the scope if: • They are used to carry out the original intent of the contract on the original land. • The modifications will treat the original resource concern according to the ranking criteria for which contract approval was based. • The original conservation practice is not technically feasible to be installed. If so, a substitute practice may be approved to address the original resource concern.  • When a practice of higher cost is requested as a substitute practice by the landowner and the original practice is still feasible, NRCS will only provide cost share assistance up to the amount of the least cost option to treat the resource concerns. • The practice may be deleted if no substitute practice is feasible. • A practice is no longer necessary to address the resource concern originally identified.  The practice may be deleted.

23. Contract Changes Where No Signatures Are Required

24. Minor contract changes may be made in ProTracts that will not require planners to obtain approval or signature by the participant. These changes will be numbered, dated, and labeled with the planner’s name in ProTracts. Contract changes, edits, or updates that do not require a participant signature include – • Scheduling changes within the original length of the contract. • Increasing/decreasing planned amount of conservation practice or components when the payment amount per contract item is not increased by more than $1,000 per conservation practice, or activity. • Add/delete a component from a planned practice. • Change in contract servicing office. • Edit crop types or acres. • Edit livestock type. • Add a vendor code to a participant.

25. Modifications that Require Signatures

26. Modifications recorded in ProTracts that require the signatures of participants on Form NRCS-CPA-1156 or NRCS-CPA-152 prior to the NRCS Approving Official’s electronic signature. These include – • Adding land to an existing contract is generally considered a “change-in-scope” action.  • This action is generally not permitted.  This action will only be allowed when the addition of the land is necessary to accomplish the objectives of the original contract.  • Losing control of some of the land under contract, which will require a modification to delete contract acreage.  • This may lead to another participant’s assuming the contract responsibilities for this land or the original participant’s being expected to repay NRCS for financial assistance received, and pay liquidated damages. 

27. Signatures Required (continued) • Extending or reducing the contract period if it is mutually beneficial to the participant and the NRCS.  • Contracts can be modified only within the program requirements.  • The contract period may not be reduced to avoid a contract violation. • Substituting a new contract item within a CPC. • Adding or deleting a contract item.  • To delete any contract item, there must be a valid reason not adverse to the Government's interest and conservation objectives.  • The Designated Conservationist must certify (on NRCS-CPA-1156) that the application ranking score was not adversely impacted by a deletion.  • Contract items may not be deleted simply to avoid a potential contract violation.  • Increasing contract cost resulting from quantity variations or other “cost overruns” when the increased payment amount exceeds $1,000 per conservation practice, component, or activity.

28. Signatures Required (continued) • Destroying a practice established under the contract or any existing practice for which maintenance is specified in the contract.  • The participant is responsible for obtaining approval from the agency to destroy a practice when financial assistance was provided to implement the practice under another conservation program if the practice has not fulfilled its life span or maintenance requirements. • Changing contract information such as adding a participant or adjusting participant contract shares. • Reapplying a conservation treatment that failed at no-fault of the participant. 

29. Contract Changes Requiring Other Supporting Documentation • Canceling all or portions of the land enrolled in a contract.  • The landowner requested action and justification will be documented by written request from the participant) or using Form NRCS-LTP-153.  • Reactivate a cancelled, terminated, or completed contract.  • There should be  written documentation and justification from the participant requesting reinstatement of the contract.  Typically, a Form NRCS-LTP-153 will be executed and signed by the participant establishing the practices and time schedule for implementation as a part of the re-instatement. Participants must be eligible prior to approval of the re-instatement.   • Change in participant direct deposit.  • This requires a signed Direct Deposit Signup Form SF-1199A. • Change in participant payment shares.  • Document the changes in shares on Form NRCS-CPA-152.

30. Prohibited Changes in a Conservation Program Contract

31. ProTracts will prevent users from changing the following contract data except where noted in the remarks: • Change to the Application Evaluation and Ranking worksheet after contract approval. • Change or modify a cancelled, terminated, or expired contract.  This is permitted when the contract is reactivated. • Change contract conservation program. • Change contract number. • Change contract state and county.  (This is prohibited because changing state or county invalidates the fund code and cost list linked to the contract.) • Change contract fiscal year. • Change current contract year.  This is calculated automatically in ProTracts. • Change resource concerns. • Change CSP land use acres, category and subcategory.  This preserves original category under which contract was funded.

32. Change the fund code of a financial assistance (FA) contract item.  For CSP contracts, fund codes are changed when items are obligated with current-year FA funds. • Change the cost list linked to a contract to the current year cost list.  Starting with FY 2007 contracts, unit costs for planned practices will be updated with a current year payment schedule.  This update will occur during the first quarter of the fiscal year beginning in fiscal year 2008.  The update will not be applied to contracts prior to FY 2007. • Change contract item and contract item component number. • Change in contract items to avoid loss of payments due to violation of HELC/WC provisions.  The contract must be completed as scheduled without payment. • Change or modify a contract item, or component that is certified and approved for payment.  This is permitted only after payment is deleted in FFIS and rolled back to Fund Manager and ProTracts. • Change a deleted contract item or component. • Change a contract item component that was paid by FSA.

33. Documentation of Contract Modifications

34. Modifications are documented in the ProTracts database and on the appropriate NRCS-CPA form.  • ProTracts generated contract forms include the electronic signature of the NRCS Approving Official and the manual signature of the participant.  • Signed forms are maintained in the contract folder.

35. Minor contract changes and edits/updates are documented in the ProTracts database. These changes do not require documentation on a contract form.

36. Cancel a Contract • Form generation is not required. The Designated Conservationist (DC) is required to write “canceled” and date on all contract documents in the folder, and change the contract status to cancelled in ProTracts. This requires documentation supporting the participant’s request or approval on Form NRCS-CPA-153 or formal correspondence.

37. Terminate a Contract • Form generation is not required. The DC is required to write “terminated” and date on all contract documents in the folder. The State Conservationist or authorized designee will change the contract status to “terminated” in ProTracts. This requires formal documentation with appeal rights provided to the participant.

38. Form NRCS-CPA-152 Transfer Agreement • Add a participant • Delete a participant • Change a participant payment shares

39. Form NRCS-CPA-1156 • Change contract expiration date • Change contract land units or legal description • Change acres under contract • Add a practice/contract item • Delete a practice/contract item • Add land units to a practice • Remove land units from a practice

40. Questions??

41. LATE RATE

42. Late Rate • EQIP and WHIP • Should be in your performance plans

43. EQIP 2008 • Allocation = $15,666,867 FA • Payments to date from these funds = $2,565,455* • Record year in dollars and applications • Number of applications – 4,039 requesting almost $50,900,000 • 1,254 were determined not eligible or cancelled • So we had a potential 3,370 eligible applications • Number of applications approved – 668 contracts • Will work to implement an EQIP screening tool for FY09 *As of August 29, 2008

44. EQIP Funds 2002 - 2008 * As of August 29, 2008

45. Late Rate • Do you know your late rate? • Do you know where to find it? • ProTracts Reports • “Late Rate Summary” • Select Contract Fiscal Year, County(ies), Program(s) • View Report • If you haven’t looked at ProTracts Reports, run all of them to see what they offer and how you can use them as a management tool. • Several new reports have been added recently.

46. Go To Protracts and Select “REPORTS”

47. Select “Late Rate Summary”

48. Drop down boxes to sort 0.00% is the best answer! By 12-31-08 this “MUST” be 0.00%

49. Prior Year Practices = $712,696.25 (Sept 15: $566,279) Current Year Practices = $7,215,173.00 (Sept 15: $6.5 million) Total = $7,927,869.25 Late Rate = 8.99% (PY/total) (Sept 15: 8.05%) August 29, 2008

50. Click on + to drill down • To program • To county • To year planned • To contract name/number • To practice – item number, planned year, practice, outstanding dollar amount