Collecting and Remitting Assessments
USDA has determined that all funds are collected under the authority of the national checkoff legislation and, therefore, subject to the same federal regulations. Accounting records supporting all collection transmittals should be maintained by all parties.
When Remittances Are Due
Monthly Remitting States and Remittance Schedule:
- Remittances from the First Purchaser to the QSSB: The soybean checkoff assessment is due to the QSSB by the last day of the month following the month or the end of the quarter in which the soybeans were marketed.
- Remittances to USB: Remittances to USB are due by the last day of the month, following the month/quarter in which the assessment was remitted to the QSSB. Accounting records should be maintained to provide all information required for collection transmittals to others. Remittances to USB and other states of origin are due in the month following the collection month. For quarterly collecting states, remittances should be made 60 days following the quarter end.
- Remittances to another QSSB: When remitting to another QSSB, the timeline for remittance is by the last day of the month following the month/quarter in which the assessment was remitted. QSSBs remitting assessments to other QSSBs pursuant to the “state of origin” provision must provide sufficient documentation to show when assessments were due and when they were paid.
Arkansas, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Mississippi, North Carolina, Tennessee, Wisconsin
Quarterly Remitting States and Remittance Schedule:
|First Purchaser if Sale Occurred in:
||QSSB Remittance POSTMARKED by:
||Due to USB or Other QSSB By:
Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, North Dakota, Nebraska, New Jersey, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Virginia, Eastern Region, Western Region
|First Purchaser if Sale Occurred in:
||QSSB Remittance POSTMARKED by:
||Due to USB or Other QSSB By:
Transmittal of Remittances
Four types of transmittal forms are used for the remittance of collections:
- LS-46 (First Purchaser remittance form)
- LS-46-1 (Short form first purchase remittance form)
- QSSB to QSSB Transmittal Form (See Appendix J)
- QSSB to USB Transmittal Form (See Appendix K)
When completing the QSSB to QSSB Transmittal Form, attach the LS-46 or LS-46-1 form pertaining to funds being transferred to the other QSSB. The remitting QSSB should identify the portion of collection fees that have been deducted (e.g., state agency deduction). These fees should be included as part of the collection costs for the out-of-state QSSB when preparing their transmittal to USB.
When completing the QSSB to USB Transmittal Form, the QSSB should include out-of-state transfers within their state collections. This should be the gross amount of all the soybean sales for the state. Out-of-state collection fees transferred from another QSSB should be included with the QSSB collection costs.
Also, when completing the QSSB to USB Transmittal Form, the QSSB should include the number of bushels the remittance form represents. If it is impossible to give an exact figure, estimate the number and so indicate it on the Transmittal Form.
A QSSB should maintain a control listing of all first purchasers or potential first purchasers. This list should be periodically updated with new information. Often, the state Department of Agriculture is the best source of updates on grain elevators, but should not be considered the only source of new information. The QSSB should also monitor for and follow up on any missed Transmittal Forms either by telephone or mail. It is not necessary for small purchasers to remit blank Transmittal Forms if they did not purchase soybeans. However, it is recommended that the first purchaser notify the QSSB that they probably will not purchase soybeans in the upcoming month or quarter so as to avoid a delinquency letter.
Documenting Second Purchases
When a first purchaser buys soybeans from another entity and the initial first purchaser has already collected the checkoff, this is referred to as a second purchase and must be documented. Documenting this transaction creates a control so the checkoff is not collected twice. To document the second purchase the LS-48 Statement of Certification of Non-Producer Status form is used. Once the LS-48 is completed and signed, both parties keep a copy. This form can be found by selecting the PDF or by selecting the links below:
- LS-48 (Second Purchaser certification form)
- Select Soybean Program
- Select Soybean Program Forms.
All first purchasers are required to remit assessments by the last day of the month or quarter following the month the soybeans were marketed. The QSSBs are required to remit assessments to USB or another QSSB by the last day of the month, following the month/quarter in which the assessment was remitted to the QSSB.
A late fee should be assessed in the following circumstances:
- If a first purchaser fails to remit assessments to a QSSB according to the remittance schedule as outlined in the soybean checkoff legislation, they will be subject to a 2% late fee as imposed in the Order. Also, first purchasers who do not collect the assessments or producers who do not pay will be in violation and subject to a civil penalty of not more than $1,100 for each violation and an additional penalty for willful failure to pay equal to the amount of such assessment under the Soybean Promotion, Research and Consumer Information Act codified at 7 U.S.C. 6307(c). Civil penalty for failure to obey a cease and desist order under the Soybean Promotion, Research and Consumer Information Act, codified at 7 U.S.C. 6307(e), has a maximum of $7,500 for each offense.
- Likewise, if a QSSB does not remit assessments to another QSSB pursuant to the “state of origin” provision or to the United Soybean Board according to the remittance schedule, the collecting QSSB will be assessed a 2% late fee each month beginning with the day following the date such assessments were due.
- Note that if assessments are remitted late by a First Purchaser but remitted within a timely fashion by the QSSB, the remitting QSSB will not be subject to imposition of the late fees. However, if the QSSB does not remit assessments within a timely fashion to the other QSSB (even if the remitting QSSB received the assessments late from the collecting person), the late fees will be imposed.
- In the instance USB, it’s legal counsel, or USDA becomes involved in efforts to collect late remittances, the 2% late fee will be split equally between USB and QSSB.
When a first purchaser collects checkoff fees but fails to remit, or a first purchaser fails to collect the checkoff fees, the USDA requires a QSSB to exhaust all efforts to collect outstanding assessments – including any applicable late payment charges from the non-compliant entity – before involving the USB or the USDA. The USDA has recommended steps to follow – See Appendix H
The U.S. Office of General Council has approved a settlement agreement as a tool to assist QSSB in collecting checkoff and late fees. OGC usually needs to approve each settlement agreement before it is signed by the QSSB and non-compliant party in order for OGC to be involved in the enforcement process. USB is available to assist in this process. See Appendix I
for sample settlement agreement.
Late Fee Waivers
Late fees cannot be waived by QSSB or by USB. Late fees can only be waived by the Secretary of Agriculture.
QSSBs may submit a request for a waiver of late fees; however, the submission of a request does not guarantee approval of the waiver. The late-fee waiver request may be subject to review by the USDA Office of General Counsel.
Listed below are the steps required to request a waiver of late-fees:
- The First Purchaser requests in writing late fee waiver to the QSSB after all assessments are paid.
- QSSB validates documentation.
- QSSB requests in writing to USB on behalf of the first purchaser.
- USB will review all submitted documentation for eligibility.
- USB will submit request for waiver to USDA if determined eligible.
- USDA will approve in writing the late-fee waiver.
- If a late-fee waiver is not approved by USDA, all late fees will be remitted by the First Purchaser.
USDA-required documents to determine eligibility with the waiver request include:
- Amount of the late fee.
- Amount of the assessment.
- Reason why the assessment was submitted late.
- Assurance of compliance moving forward as well as evidence of strengthened internal controls to eliminate the risk of late remittance.
First Purchaser Compliance
A first purchaser who purchases seed beans pursuant to a contract with a producer, either on a volume basis or on a per-acre basis, shall be responsible for remitting the assessment due on soybeans purchased. If the net market price is not specified or established in the contract, the assessment shall be based on the posted county price for soybeans on the date of the sale as posted at the local FSA office for the county in which the soybeans are grown.
“Edible” soybeans grown under contract are also to be checked off. The Act defines soybeans as “all varieties of Glycine max or Gycine soya.”
When a first purchaser is involved with minimum pricing contracts, the checkoff is to be collected on the market value of the soybeans at the time the first purchaser buys them.
The Commodity Credit Corporation will not be considered a first purchaser except in what is anticipated to be a few unique situations where a farmer forfeits soybeans to the government under the soybean marketing loan program. Therefore, QSSBs should notify all first purchasers to deduct the checkoff.
USB policy does not allow for first purchasers to be reimbursed for any expenses that may be incurred for collecting the checkoff. USB recommends that QSSBs also not reimburse the first purchaser for any of these expenses. However, QSSBs have the right to reimburse first purchasers for software changes if they choose to do so. This expense will be applied to the administrative expenses of the QSSB.
If a trucker takes possession of the soybeans and actually pays the producer, the trucker becomes the first purchaser and is required to deduct the checkoff.
First purchasers are responsible for maintaining a list of producers who have been granted an organic exemption from the soybean checkoff.
First purchasers must keep all records pertaining to the purchase of soybeans for three years (two years beyond the fiscal period of their applicability, Section 1220.242 of the Order). Retained records may be requested by the QSSBs in order to periodically audit first purchaser compliance.
First Purchaser Audits
Each QSSB should have a plan for audits of first purchasers for compliance with the soybean checkoff. First purchasers must keep all records pertaining to the purchase of soybeans for three years (two (2) years beyond the fiscal period of their applicability, Section 1220.242 of the Order). Audits may be performed by state agency auditors, independent CPAs or other qualified entities/persons with the appropriate knowledge and experience. USB recommends that the plan cover all first purchasers within a period of not more than seven years.
The QSSB shall bill and collect any assessment underpayments discovered under audit and the relative late charges.
Transmittal to USB and Other QSSBs:
Accounting records should be maintained to provide all information required for collection transmittals to others. Remittances to USB and other states of origin are due in the month following the collection month. For quarterly collecting states, remittances should be made 60 days following the end of the quarter. Late quarterly remittances from first purchasers may be added to the next quarterly payment.
Administrative Costs and Controls
Labor and Overhead
All identifiable project/program costs should be charged to the respective project budgets/funding. QSSB employees (or prime contractor staff) should maintain timesheets with sufficient detail to record labor costs to programs or administration. Leave time used should also be recorded. In cases when salaried employees are working over standard weekly hours, labor costs should be prorated to a percentage of the standard pay based on total hours per activity. Timesheets should be reviewed and show evidence of approval by a supervisor or the executive.
Labor and Overhead Reconciliation
A QSSB that funds its management and program contractor (the Contractor) during the year based upon estimated budget rather than actual invoices should make reconciliation to actual labor and overhead costs after year end. Any difference between actual costs and amounts paid should be refunded or reimbursed.
A standard method of allocation of actual labor costs is to look at hours directly related to checkoff programs, administration and hours directly related to the Contractor’s activities (for state Soybean Associations or “One Board Structures,” this would be membership activities, legislative activities, other commodities, etc.) Any general administrative time may then be allocated between the QSSB contract and the contractor’s own activities based on the percentage of total direct time spent on the QSSB contract and the Contractor activities.
Labor costs include wages and salaries, payroll taxes, employee insurance, pension plans and other benefits. It should be noted that in QSSBs, with large staff and volume, employee rates may vary significantly and actual direct costs by employee should be considered (rather than by hours only).
General overhead costs can be allocated by the direct labor percentages calculated.
Overhead costs include:
|Telephone – basic charges
||Direct Copying Costs
||Supplies for Projects
||Direct Equipment Costs
|Contractor Audit Fees*
* Provided Audit Report is required by and shared with the QSSB.