# Presentation: 767900

## Dairy Disaster Assistance Payment Program

- DDAP-III

- Module 4 - Spot Checks and Compliance

**Notes:**
All information provided to FSA is subject to verification and, spot check and audit by the Farm Service Agency.  In module 4, we will cover spot checks and compliance.

## Spot Checks

- COF’s shall perform spot checks as follows:
- Select 1 out of 20 approved operations
- Telephone contact producer to inform
- Mandatory spot checks for:
- STC members
- COC members
- FSA employees

- Module 4 - Spot Checks and Compliance

**Notes:**
Spot checks shall be performed to verify the producer’s losses.  Implement procedures to perform spot checks beginning the day after the last day of the signup period established by the Farm Service Agency Administrator.

To implement spot check procedures, County Offices shall:

select 1 out of every 20 dairy operations approved for the DDAP-III program

inform each contact producer of the selected dairy operation by telephone, that a spot check is being completed for the operation

conduct spot checks on any operation where the applicant or a person in the operation is: 

A State Committee member
County Committee member, or an
Farm Service Agency employee.

## Spot Check Requirements

- COF’s are required to:
- Review and compare FSA-747 w/ supporting documentation for discrepancies
- Request additional information, as needed
- Verify that losses are eligible
- Record pertinent findings on FSA-747 in remarks section.

- Module 4 - Spot Checks and Compliance

**Notes:**
For the spot check process, County Offices are required to:

review and compare FSA-747 with supporting documentation for any discrepancies
request additional information from the dairy operation, as necessary for verification
verify that eligible losses occurred during an eligible month in an eligible county
record pertinent information of spot check findings in the remarks section of FSA-747.

## Completing Verifications

- FSA-747’s selected for spot check must be:
- Completed within 60 days after signup ends
- Documented in FSA-747, item 21
- Reported to the STO with results

- Module 4 - Spot Checks and Compliance

**Notes:**
Verifications of FSA-747’s selected for spot check must be:

completed within 60 calendar days after the end of the announced application period
documented in FSA-747, item 21
conveyed to the State Office, including the number of applications selected and the results of the verification.

	Note:	 If spot check findings reveal that any of the criteria established for eligibility and spot check discrepancies discovered do not comply with the certification of information on FSA-747, then the dairy operation may be determined ineligible for DDAP-III.

## Spot Check Discrepancies

| IF the eligible losses are.. | THEN... |
| --- | --- |
| increased | no further action is necessary. |
| 5% or less of operations reported losses | determine good faith and    adjust losses

consider operation ineligible |
| more than 5% of operations reported losses | determine the operation ineligible |

- Module 4 - Spot Checks and Compliance

**Notes:**
Spot checks shall be performed to determine the accuracy of reported milk losses. 

Discrepancies that result in changes found as a result of a spot check shall be handled according to the following.

If the eligible losses are increased, then no further action is necessary.
If the eligible losses are 5 percent or less of the dairy operation’s reported losses, then the County Committee may either:

Determine good faith and adjust the eligible losses or 
Consider the producer ineligible for benefits if the County Committee determines that the producer either 
adopted any scheme or other device that tends to defeat the purpose of the DDAP-III program or 
made any fraudulent representation or misrepresented any fact affecting a program determination.  

If the eligible losses are more than 5 percent of the dairy operations reported losses, then the County Committee shall determine the producer ineligible for benefits, but may submit a request for relief to the State Committee.  The State Committee shall approve request for relief only if it can be determined that extenuating circumstances prevented the dairy operation from providing an accurate application.  

## Verifying Dairy Operation Records

-    Requests made to other organizations to verify a dairy operations documentation should include:
- Dairy operation’s name and address
- Why the request is being made
- What information is being requested.

- Module 4 - Spot Checks and Compliance

**Notes:**
In addition to the supporting documentation provided by the producers in the dairy operation, additional documentation may be requested by FSA as necessary to verify production losses to the satisfaction of FSA.  

All information provided is subject to verification.  

As applicable, when contacting agencies, organizations, or facilities to verify the dairy operations supporting documents and records, the County Office shall be specific in the information requested.  

The request should include, but is not limited to, the following:

dairy operation’s name and address
why the request is being made
what information is being requested.

This request for information may include providing the agency, organization, or facility with a signed statement from the contact producer for the dairy operation authorizing the release of the information to the County Office.

## State Office Spot Check Reports

- Prepare a written report describing the results
- FAX a copy of the report to PSD at      202-690-1536

- Module 4 - Spot Checks and Compliance

**Notes:**
Within 5 workdays or receiving spot check information, the State Office shall:

Prepare a written report describing the results, and
Fax a copy of a compiled report from all reporting County Offices, to PSD at 202-690-1536.

## Misrepresentation, Scheme, or Device

- Violations include any person who:
- Adopted any scheme or device
- Made any fraudulent representation
- Misrepresented any fact affecting a program determination.

- Module 4 - Spot Checks and Compliance

**Notes:**
In addition to other penalties, sanctions, or remedies that may apply, a dairy producer is ineligible to receive payments under this program for the year or years of the violation and the subsequent year if the producer is determined by the State Committee or County Committee to have: 

adopted any scheme or device that tends to defeat the purpose of the DDAP-III program
made any fraudulent representation
misrepresented any fact affecting a program determination.

Any DDAP-III benefits disbursed to any person or dairy operation engaged in a misrepresentation, scheme, or device, must be refunded with interest.  Interest will run from the date of the disbursement to the producer of the payment from FSA.