Paper Check Conversion (PCC) Project

1. Paper Check Conversion (PCC) Project NACS/NASE National Convention June 25, 2007 Glen Richter Financial Management Division Financial Services Center Chief Farm Loan Operations Office

2. CCC’s Current Deposit Mechanism • Concentration Banking System • Wire Transfers via FedWires • CCC’s Lockbox at US Bank (St. Louis) • PCC Over the Counter (Pilot Program)

3. PCC - Background The Paper Check Conversion (PCC) Project is part of : • FSA’s effort to transition to an all electronic and standardized environment for processing collections • The CFO authorized the pilot in December 2002 • PCC’s purpose is to provide an electronic payment collection process, that withdraws money from the customer’s bank account and deposits it to FSA’s account • PCC is capable of retrieving check images if needed at a later date • PCC is used in conjunction with the US Treasury and the Cleveland Federal Reserve Bank

4. How will PCC be used? • Small electronic machines, similar to credit card machines, will be setup in the County Offices, equipped with software to perform the electronic payment process. • The County Office personnel will be trained to use the machines.

5. PCC Project -- Benefits PCC will: • Reduce the number of days for FSA to have access to funds • Reduce interest that is paid to US Treasury on FSA’s daily borrowing allowance (Anticipated savings is $60,000) • Reduces costs and staff hours associated with handling checks • Significantly reduces the number of delays or corrected deposits • Allows the ability to resubmit the EFT up to two times and can be designated for specific days • Increase ease in reporting activity; automatically emails activity statements to responsible areas of the agency • Reduces paper handling which minimizes processing , handling costs and the potential for human errors • Reduces lost/misplaced checks which improves relationships with customers and speeds check clearing processes • Provide an electronic record of the checks which can be used as an audit trail and also satisfy OMB, Circular A-123, Appendix A objectives.

6. What are CCC’s goals with PCC? • Reduce the use of the Lockbox, which is slow and labor intensive • Modernize payment processes in accordance with President’s Management Agenda (PMA) • Save money on Treasury borrowings and other cost

7. PCC Project— Status • The project was delayed because the software did not correctly scan the checks (problem with CCC checks) • Final approval for nationwide deployment was given by the Director of Financial Management Division on June 14, 2007

8. Present Phase of PCC Project: Where does FSA go from here? • Approximately 1,000 machines were purchased, with 150 shipped • Deployment to counties will occur in groups of 100 • Training Plans will be developed using the “Train the Trainer” process with input from Cleveland FRB and Financial Management Service (FMS)

9. Summary: • Aligns FSA more closely with the President’s Management Agenda (PMA) • Machines already purchased • A successful pilot program was tested in 10 counties • Final approval granted June 14, 2007 for nationwide implementation • Expected savings for FSA are estimated at $775,000 per year (based on the current borrowing interest rate)

10. Q&A THANK YOU HAVE A GREAT DAY!