RD Instruction 2012-B

Table of Contents

PART 2012 - AUDITS AND INVESTIGATIONS

Subpart B - Investigations and Whistleblower (Hotline) Complaints

## Table of Contents

[Sec]{.underline}. [Page]{.underline}

2012.51 Purpose. 1

2012.52 References. 1

2012.53 Policy for investigations. 1

2012.54 Definitions. 3

2012.55 Types of investigations. 4

\(a\) Violations of Federal criminal or civil statutes. 4

\(b\) Rural Development investigations

(minor employee misconduct). 5

2012.56 Guidelines for investigations. 6

2012.57 Administrative guidelines. 9

2012.58 Closed investigations. 10

2012.59 Tracking responsibilities. 12

2012.60 Retention of investigative reports. 12

2012.61 Distribution of investigative reports. 12

2012.62 Releasing OIG investigative reports. 13

2012.63 Federal Bureau of Investigation (FBI)\
investigations and reports. 13

2012.64 Hotlines. 14

\(a\) Reporting a complaint. 14

\(b\) Answering a complaint. 14

\(c\) Retention of report. 15

\(d\) Restriction on distribution of report. 15

\(e\) Requests for report. 16

\(f\) Closing the complaint file. 16

2012.65 - 2012.79 \[Reserved\] 16

2012.80 Program Fraud Civil Remedies Act of 1986 (PFCRA). 16

2012.81 - 2012.100 \[Reserved\] 19

Exhibit A - Request for Borrower Investigation.

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RD Instruction 2012-B

PART 2012 - AUDITS AND INVESTIGATIONS

Subpart B -- Investigations and Whistleblower (Hotline) Complaints

§ 2012.51 [Purpose]{.underline}.

This Instruction provides procedures for the Office of the Inspector
General (OIG) investigation of Rural Development program activities,
employee misconduct, and the OIG Whistleblower (Hotline) complaint
(hereafter referred to as \"Hotline(s)\") process. The OIG investigative
reports provide a basis for disciplinary or adverse actions, fiscal
charges, loan program administrative action, and criminal or civil court
actions.

§ 2012.52 [References]{.underline}.

\(a\) 7 CFR Part 1, Subpart L, Sections 301 through 346, \"Procedures
Related to Administrative Hearings Under the Program Fraud Civil
Remedies Act of 1986,\" (Pub. L. 99-509).

\(b\) Departmental Regulation (DR) 1700-2, \"OIG Organization and
Procedures,\" dated June 17, 1997.

\(c\) Inspector General Act of 1978 (as amended) 5 U.S.C. appendix.

§ 2012.53 [Policy for investigations]{.underline}.

\(a\) The authority to request investigations is as follows:

\(1\) The Administrators, Associate Administrators, Chief Information
Officer, Deputy Administrators, Assistant Administrators and the Chief
Financial Officer for the National Office; and

[\_\_\_\_\_\_\_\_\_]{.underline}

Distribution: WSAL Administration

Audits and Investigations

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§ 2012.53(a) (Con.)

\(2\) The Rural Development State Directors for their respective state.

\(i\) The Director, Centralized Servicing Center (CSC) should forward
information regarding unauthorized assistance to the appropriate State
Director. The State Director will review the information and determine
whether or not to request an OIG investigation.

\(ii\) The State Management Control Officer (MCO), who is designated by
the State Director as the central point-of-contact for processing
investigative reports in the State Office, is responsible for tracking,
monitoring, and safe-keeping of reports and related documentation.

\(b\) A copy of all investigation requests will be sent to the Director,
Financial Management Division (FMD), who is the Rural Development
Liaison Officer.

\(c\) Processing and handling of state investigative reports is
discussed in RD Instruction 2012-C.

\(d\) The OIG whistleblower hotline can be used by an employee or
private citizen to report alleged violations of laws and regulations,
gross fraud, waste, abuse, and mismanagement that can be reported
directly to OIG in accordance with § 2012.64 of this Instruction.

\(e\) Rural Development employees will:

\(1\) Request the official identification of investigators.

\(2\) Cooperate fully with authorized OIG representatives concerning an
investigation, if the inquiry relates to official matters and the
information is obtained in the course of employment or as a result of a
relationship incident to employment. This includes furnishing a signed
statement. Failure to respond to a request for information or to appear
as a witness in an official proceeding may result in disciplinary
action. (Nothing herein shall be deemed to infringe upon an employee\'s
right to invoke the protection of the Fifth Amendment to the
Constitution with respect to self-incrimination.)

\(3\) Promptly report any instances of known or suspected violations or
irregularities in the U.S. Department of Agriculture (USDA) programs
and/or any misconduct or irregular activities by an employee(s).

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RD Instruction 2012-B

§ 2012.53 (Con.)

\(f\) Any employee who is offered a bribe or who believes that a bribe
was offered to, solicited by, or accepted by another employee must
immediately report that information directly to OIG. **A DIRECT OIG
BRIBERY HOTLINE IS AVAILABLE BY CALLING (202) 720-7257** to speak to a
Special Agent between the hours of 8:00 a.m. to 4:00 p.m., Eastern
Standard Time, Monday through Friday or by calling Toll Free\
1-888-620-4185. This includes situations where a forthright offer was
not made, but it is suspected that the employee is being \"felt out\" or
an offer of a bribe could reasonably be inferred. The employee will then
follow the instructions of OIG on what action to take to avoid
jeopardizing the investigation and to avoid disclosing the information
to anyone without the prior approval of OIG.

\(g\) Report all allegations of program discrimination to the National
Office Civil Rights Staff through the State Civil Rights Manager or
Coordinator.

§ 2012.54 [Definitions]{.underline}.

[Administrative action]{.underline}. Rural Development initiated action
which could result in an administrative sanction.

[Aggravating circumstances]{.underline}. Circumstances that make an
incident more serious than previously thought to be. (e.g., what was
thought to be an isolated incident has become a pattern.)

[Authorized Requesting Official]{.underline}. The officials listed in §
2012.53(a).

[Case Opening Memorandum (COM)]{.underline}. An OIG official
notification to Rural Development that an investigation will be
initiated.

[Civil action]{.underline}. Any civil judicial proceeding filed on
behalf of a governmental Agency that results directly and substantially
from an investigation.

[Criminal action]{.underline}. Prosecution of a crime by local, state,
or Federal authorities.

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§ 2012.54 (Con.)

[Investigation]{.underline}. A search for facts and evidence generally
pertaining to an issue or allegation which, if proven true, would
constitute a violation of a law or regulation.

[Personnel Conduct Investigator (PCI)]{.underline}. Any Rural
Development employee trained and credentialed by USDA, Office of Human
Resources Management (OHRM) and/or OIG to conduct noncriminal personnel
misconduct investigations, including Hotlines.

[USDA Program Fraud Civil Remedies Act (USDA PFCRA)]{.underline}. An
administrative remedy for imposing civil penalties and assessments
against persons who make, submit, or present, or cause to be made,
submitted, or presented, false, fictitious, or fraudulent claims or
written statements to USDA authorities or to their agents. (See 7 CFR
1.301-346 (Subpart L) and § 2012.80 of this Instruction.)

[Rural Development Liaison Officer]{.underline}. The Director, FMD is
the initial and primary contact between OIG and Rural Development to
coordinate investigative and Hotline matters within Rural Development.

[Special Agent-in-Charge (SAC)]{.underline}. The point of contact at OIG
Regional Offices concerning investigative matters.

[Whistleblower]{.underline}. A citizen or employee who contacts the OIG
whistleblower hotline to report alleged fraud, waste, abuse, and/or
mismanagement.

§ 2012.55 [Types of investigations]{.underline}.

The following are examples of matters which, if known, suspected, or
alleged, require referral to OIG:

\(a\) [Violations of Federal criminal or civil statutes]{.underline}.
These involve, but are not limited to the following irregularities by
Rural Development employees, applicants, borrowers, contractors, or
others:

\(1\) Submission of false claims or false or fraudulent statements;

\(2\) Conspiracy to defraud the United States Government;

\(3\) Theft or damage of Government property;

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§ 2012.55(a) (Con.)

\(4\) Concealment, removal, obliteration, falsification, forgery,
alteration, or destruction of official documents or withholding of
material facts in a Government matter;

\(5\) Misappropriation, embezzlement, and improperly accounting for
Government funds collected or handled by Rural Development employees;

\(6\) Bribery or attempted bribery of employees;

\(7\) Forging or altering U.S. Treasury checks or checks made jointly to
the borrower and Rural Development;

\(8\) Unauthorized loan origination and improper servicing or
inspections;

\(9\) Conspiracy to kill or kidnap, forcible assault, intimidation, or
interference while doing official duties;

\(10\) Theft or damage of Government equipment or supplies; or

\(11\) Criminal conflicts of interest (refer to 5 CFR 2635).

\(b\) [Rural Development investigations (minor employee
misconduct)]{.underline}. The following are matters to be handled by
Rural Development:

\(1\) Allegations of noncriminal acts and minor infractions by employees
which may include, but are not limited to:

\(i\) Absence without leave and attendance irregularities;

\(ii\) Conducting personal business during duty hours;

\(iii\) Fighting, threatening, or using abusive language to coworkers,
supervisors, or the public;

\(iv\) Refusal or failure to follow instructions or procedures;

\(v\) Neglect of duty;

\(vi\) Misuse of Government vehicles;

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§ 2012.55(b)(1) (Con.)

\(vii\) Use of Government facilities, supplies, equipment, computers,
telephone, or personnel for other than official purposes;

\(viii\) Sexual harassment; or

\(ix\) Intoxication or consumption of alcohol or drugs while on duty.

\(2\) If Rural Development believes that an OIG investigation is
necessary because of the severity of the misconduct, a request using a
similar format to Exhibit A of this Instruction may be submitted to OIG.

\(3\) Minor employee misconduct cases must be investigated by a PCI. If
a PCI is unavailable in a state, is a subordinate or supervisor of the
employee being investigated, or anyone who would have the appearance of
a conflict of interest with the matter being investigated, a certified
PCI will be called in from another state or the National Office. When in
doubt, contact the Rural Development Coordinator for Noncriminal
Personnel Misconduct Investigations, located in the Assistant
Administrator for Human Resources (AAHR), Headquarters Operations Branch
(HOB), 1400 Independence Avenue, SW., Mail Stop 0730, Washington, DC
20250-0730, Phone Number (202) 692-0222.

\(4\) A written report shall be sent to the AAHR, Attn: HOB, when
available information is complete, when there are no apparent criminal
violations, only one incident is involved if the irregularity has fiscal
aspects, and the matter can be disposed of by administrative action.
(See § 2012.104 of RD Instruction 2012-C.)

§ 2012.56 [Guidelines for investigations]{.underline}.

\(a\) National Office Officials should consult with the Rural
Development Liaison Officer (Director, FMD) before referring matters to
OIG, Assistant Inspector General for Investigation (AIG-I). Also, a copy
of all requests for investigation, referrals, and all related
correspondence that pertains to an investigation will be sent to the
Rural Development Liaison Officer (Director, FMD).

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RD Instruction 2012-B

§ 2012.56 (Con.)

\(b\) The CSC should refer any possible borrower investigations to the
appropriate State Director.

\(c\) The State Offices should use the following guidelines to avoid
referring matters to OIG for investigation that will not be prosecuted
by the Government, to eliminate unnecessary paperwork, and avoid
unreasonable delay in resolving such matters administratively or
civilly.

\(1\) Each State Office should follow any written guidelines provided by
the applicable U.S. Attorney\'s Office in the respective OIG Regional
Office. Any doubts or uncertainty about whether the matter meets the
guidelines should be resolved by a telephone call to the cognizant
Special Agent-in-Charge (SAC), or Assistant Special Agent-in-Charge
(ASAC) at the appropriate OIG Regional Office. (See Exhibit B of RD
Instruction 2012-A for a directory of OIG Regional Offices.)

\(2\) If a matter meets the guidelines, the State Office should refer
the matter to OIG in writing, using a format similar to Exhibit A of
this Instruction for matters involving applicants or borrowers.

\(i\) Cite the pertinent facts and specify what is to be investigated.

\(ii\) The referral should accurately summarize the facts and any
aggravating and mitigating circumstances.

\(iii\) A copy of all referrals and all related correspondence that
pertains to an investigation will be sent to the Rural Development
Liaison Officer (Director, FMD) until closure of the investigative
matter.

\(3\) If a matter is accepted for investigation by OIG, a COM will be
issued to the appropriate State Director.

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§ 2012.56(c) (Con.)

\(4\) If a matter does not meet the guidelines, no referral to OIG is
necessary because, absent aggravating or special circumstances, OIG
would decline to investigate. The State Office is then free to pursue
administrative action to resolve the matter or request OIG to pursue the
case under USDA PFCRA.

\(5\) If a matter does not meet the guidelines, but there are
aggravating circumstances or other special circumstances, the State
Office should discuss the matter by telephone with the SAC or ASAC at
the OIG Regional Office. (See Exhibit B of RD Instruction 2012-A for a
directory of OIG Regional Offices.) Special circumstances include
situations where an illegal act (e.g., payment assistance fraud or low
dollar value conversion) by a particular borrower does not meet the
guidelines but the practice is so common that an investigation or
prosecution is necessary to deter similar conduct by other borrowers.

\(6\) In any telephone contact with the SAC or ASAC (the same as in any
written referral), the State Office should provide a summary of
essential information, following the format outlined in Exhibit A of
this Instruction. This should include identifying the specific matters
to be investigated and summarizing any evidence of specific wrongdoing.

\(7\) If a telephone contact results in OIG declining to investigate,
the State Office employee making the telephone call should document the
results in the running record of the file.

\(8\) A telephone contact may result in OIG requesting additional
information, requesting to review the loan dockets or other State Office
materials, agreeing to conduct a preliminary inquiry before making a
decision about a full-scale investigation, or requesting time to confer
with the U.S. Attorney. If a telephone contact results in any of these,
the State Office employee should document this and comply with the SAC
or ASAC's request.

\(9\) For investigative matters that involve servicing actions by the
CSC, the MCO will work in conjunction with CSC to coordinate the inquiry
and any actions needed. The MCO will notify OIG, with a copy to the
Rural Development Liaison Officer (Director, FMD), of any administrative
actions taken and request closure per § 2012.58 of this Instruction.

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RD Instruction 2012-B

§ 2012.56(c) (Con.)

\(10\) For investigative matters that involve alleged discrimination,
contact must be made with the National Office Civil Rights Director to
coordinate any actions needed to resolve the issues in conjunction with
the investigation.

\(d\) Employees will not make any comments or take action that might
harm or prejudice the Government\'s interest in a criminal or civil
court case. For example, when there is a reasonable belief that a
borrower, employee, or other person may have committed a criminal act,
friendly comments such as \"maybe we can work something out,\" may later
be used in court and jeopardize successful prosecutions.

\(e\) Requests for investigations of extremely sensitive or unusual
situations shall be directed to the AIG-I or the Inspector General.

§ 2012.57 [Administrative guidelines]{.underline}.

\(a\) If a fiscal problem or other offense(s) is the result of
misconduct listed in § 2012.55(a) and (b) of this Instruction by an
employee,

\(1\) In the National Office (includes CSC) and Office of the Deputy
Chief Financial Officer:

\(i\) The authorized requesting official will decide if an investigation
by OIG is necessary or if the case will be handled internally.

\(ii\) For fiscal problems caused by an employee\'s action, the
authorized requesting official will notify the National Office,
Attention: HOB. (See § 2012.104(a) of RD Instruction 2012-C.)

\(2\) In a State Office:

\(i\) The State Director will decide if an investigation by OIG is
necessary or if the case will be handled in the State Office.

\(ii\) For fiscal problems caused by an employee\'s action, the State
Director will notify the National Office, Attention: HOB. (See §
2012.104(a) of RD Instruction 2012-C.)

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§ 2012.57 (Con.)

\(b\) For allegations of unauthorized political activity by employees,
report the incident directly to the USDA, Office of Human Capital
Management, Suite 302-W, 1400 Independence Avenue, SW., Mail Stop 0796,
Washington, DC 20250-0796. A copy of the referral will be sent to the:

\(1\) SAC, at the applicable address listed in Exhibit B of RD
Instruction 2012-A,

\(2\) AAHR, and

\(3\) Rural Development Liaison Officer (Director, FMD).

\(c\) All alleged program complaints of discrimination against a person
or class, or an applicant or recipient of a benefit or service of Rural
Development loan or grant, by a Rural Development employee should be
forwarded immediately to the National Office, through the State Civil
Rights Manager or Coordinator, Attention: Director, Civil Rights Staff
(CRS), 1400 Independence Avenue, SW., Mail Stop 0703, Washington, DC
20250-0703.

\(1\) State, Area, and Local Office employees are not to take action on
such complaints until authorized by the CRS.

\(2\) Employees are not to deny any benefits or service, nor refuse to
process applications for benefits, to anyone because a complaint of
discrimination has been filed.

\(3\) When a complaint has been filed, all adverse actions (e.g.,
foreclosure, liquidations, etc.) must be suspended until the case has
been resolved by the Department\'s Office of Civil Rights.

§ 2012.58 [Closed investigations]{.underline}.

An investigative file is considered closed when the following conditions
have been met:

\(a\) When OIG advises that the U.S. Attorney\'s Office has either
completed or declined criminal and legal action, and all necessary
administrative or civil action has been taken by Rural Development, and
both OIG and the Rural Development Liaison Officer (Director, FMD) are
notified, in writing, of the appropriate action taken (e.g., when the
borrower\'s account has been returned to a good standing status, or
liquidation is completed and any remaining balance has been debt
settled) or an explanation why administrative action is inappropriate.

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RD Instruction 2012-B

§ 2012.58 (Con.)

\(b\) A final judgment or settlement in a civil case is considered by
OIG as completion of legal action, even though the amount has not been
collected.

\(1\) OIG will consider an investigative matter closed, on their
records, once they are notified that the necessary administrative action
is completed, such as determining amount of indebtedness and making
arrangements for payments. No further notification to OIG is necessary
after this point. However, Rural Development is responsible for
following any action necessary to conclude a case, such as collecting
payments.

\(2\) Investigative reports will remain open on Rural Development
records until all funds are collected and/or all administrative actions
are complete. FMD will close all investigations once OIG and FMD are
notified in writing by the appropriate Authorized Requesting Official of
administrative actions taken.

\(c\) In cases involving disciplinary actions:

\(1\) When appropriate disciplinary action is taken in accordance with
RD Instruction 2045-GG, Exhibit E & F Table of Penalties, and documents
of the action have been sent to HOB, or when a recommendation to close
the case without disciplinary action is approved in HOB.

\(2\) In cases not within the delegated authority of the State Director,
when the State Director is told by HOB of the final decision about
disciplinary action.

\(3\) In cases involving employees identified in an OIG investigation
report, when HOB has notified OIG and the Rural Development Liaison
Officer (Director, FMD), in writing, of the administrative action taken
against the employee or as to why administrative action was not taken
and that the report can be considered closed.

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§ 2012.59 [Tracking responsibilities]{.underline}.

All investigations and Hotlines must be tracked and monitored in the
Automated Reports Tracking System (ARTS) in accordance with the ARTS
User Manual (available on FMD's Intranet Home Page).

\(a\) FMD will have overall responsibility for ARTS and ensure all
investigative and Hotline matters are properly tracked and monitored for
timely responses and resolution.

\(b\) The State Director/MCO will maintain ARTS to track and monitor
State Office investigations and Hotlines.

§ 2012.60 [Retention of investigative reports]{.underline}.

All OIG investigative reports are marked \"FOR OFFICIAL USE ONLY.\" This
means these reports are for official purposes only and the restriction
on use is permanent.

\(a\) A copy of the complete investigative report and all related
correspondence will be retained for 10 fiscal years beyond closure date.

\(b\) Investigative reports and related material with restrictive
marking must be kept in locked cabinets or other locked repository when
not in use by:

\(1\) Rural Development Liaison Officer (Director, FMD); and

\(2\) The MCO in the State Offices.

§ 2012.61 [Distribution of investigative reports]{.underline}.

\(a\) To maintain security and confidentiality of OIG investigative
reports, distribution is limited to those officials who can take action
or have an official need for the results of the investigation.
Circulation of the report within Rural Development will be made on a
strict \"need-to-know\" basis and accountability will be maintained.

\(b\) Reports will not be reproduced or distributed outside USDA without
prior clearance from OIG. Requests for duplication of a report should be
directed to the appropriate SAC or the AIG-I. (See Exhibit B of RD
Instruction 2012-A.)

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RD Instruction 2012-B

§ 2012.62 [Releasing OIG investigative reports]{.underline}.

\(a\) Reports remain the property of OIG; therefore, requests for copies
of an investigative report from the public, outside the Department, or
other entities and individuals not included in OIG's distribution list,
pursuant to the Freedom of Information Act (FOIA) and Privacy Act (PA)
must be directed to USDA, OIG, Legal Staff, Attn: FOIA/PA Attorney.
Requests may be made by:

\(1\) Writing to USDA, OIG, Legal Staff, Attn: FOIA/PA Attorney,

1400 Independence Ave., SW., Room 441-E, Jamie Whitten Building,
Washington, D.C., 20250-2308;

\(2\) Calling (202) 720-5677; or

\(3\) Facsimile at (202) 690-6305.

\(b\) When investigative reports contain personal information, the
information cannot be released except as permitted by the PA Act of
1974.

\(c\) Rural Development officials may release pertinent information to
subjects of investigations to accomplish actions indicated as necessary
by information in the report. Every precaution will be exercised to
prevent embarrassment to the subject or any person who furnished
information in connection with an investigation.

§ 2012.63 [Federal Bureau of Investigation (FBI) investigations and
reports]{.underline}.

OIG is the Department liaison with the FBI except for personnel security
program matters, in which case, the Director, OHRM is the liaison.

\(a\) Use of FBI reports and other FBI documents or communications for
administrative proceedings is generally prohibited.

\(b\) Closed reports may be used with the authorization of the Director,
FBI. Advance permission must be obtained from:

\(1\) The Director, OHRM (for personnel security program matters), and

\(2\) OIG (for all other matters).

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§ 2012.63 (Con.)

\(c\) Before an FBI report or document is referenced, copied,
paraphrased, quoted, portions extracted, or used as part of an exhibit.
Requests for use must be sent to the USDA, OIG, Legal Staff.

\(d\) FBI documents shall not be made available to the individual being
investigated or their representative.

§ 2012.64 [Hotlines]{.underline}.

OIG maintains a whistleblower hotline, 6-hours a day, 5 days a week,
Monday through Friday from 9:00 a.m. to 3:00 p.m., Eastern Time. This
hotline can be used by any employee or private citizen to report alleged
violations of laws and regulations, gross fraud, mismanagement, waste,
or abuse. Complaints can be made anonymously or confidentially. The
disclosure of a hotline complainant\'s identity without his/her consent,
or the taking of reprisal action against the complainant is prohibited
by law.

\(a\) [Reporting a complaint]{.underline}. A complaint may be made by:

\(1\) Calling:

\(i\) Toll Free 1-800-424-9121, or

\(ii\) In the Washington Metropolitan Areaat (202) 690-1622;

\(2\) Writing to USDA, OIG, P.O. Box 23399, Washington, DC 20026-3399;

\(3\) Electronic mail at usda_hotline@oig.usda.gov; or

\(4\) Facsimile at (202) 690-2474.

\(b\) [Answering a complaint]{.underline}. All complaints received from
OIG are processed through the Rural Development Liaison Officer
(Director, FMD), who then determines the appropriate addressee (e.g.,
Assistant Administrator for Human Resources or an individual State
Director). For complaints referred to a State Office, the
point-of-contact for Hotlines is the State MCO, who is responsible for
the tracking, monitoring, and safekeeping of the complaint.

\(1\) A PCI or other designated reviewer will investigate the complaint
rather than the person involved, his /her immediate supervisor, or
anyone who would have the appearance of a conflict of interest.

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RD Instruction 2012-B

§ 2012.64(b) (Con.)

\(2\) The typed complaint should not be provided to the subject of the
complaint; however, all relevant issues may be discussed with the
subject to resolve the complaint.

\(3\) The individual to whom the complaint is addressed will forward a
response to the Rural Development Liaison Officer (Director, FMD) within
45 business days.

\(i\) This response should include a detailed report of the findings and
any necessary corrective action(s) with a timeframe for completion.

\(ii\) Report responses should be mailed in a sealed envelope marked
\"Open by addressee only.\"

\(iii\) For responses that involve servicing actions by the CSC, the
State MCO is responsible for coordinating any actions with CSC to
resolve the matter and respond to the Rural Development Liaison Officer
(Director, FMD).

\(A\) Once the matter is being handled by CSC, it is the responsibility
of CSC to notify the Rural Development Liaison Officer (Director, FMD)
of the actions taken until closure.

\(B\) If the matter needs to be referred to OIG for a possible
investigation, it must be handled by the appropriate State Director in
accordance with

§ 2012.56(b) and (c) of this Instruction.

\(c\) [Retention of report]{.underline}. A copy of the complaint file
and all related correspondence will be maintained in a locked repository
for 10 fiscal years beyond closure date.

\(d\) [Restriction on distribution of report]{.underline}. Hotline
reports are for official purposes only and distribution is limited to
those officials who may take action or have an official need for the
results of the complaint.

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§ 2012.64 (Con.)

\(e\) [Requests for report]{.underline}. Requests for information on a
Hotline or for a copy of a complaint and related documents are subject
to restricted release in accordance with the FOIA/PA. Any requests
should be:

\(1\) In writing, address to USDA, Rural Development, ATTN: FOIA/PA
Officer, 1400 Independence Avenue, SW., Mail Stop 0742, Washington, DC
20250-0742;

\(2\) By telephone, call (202) 692-0031; or

\(3\) By facsimile, send to (202) 692-0013.

\(f\) [Closing the complaint file]{.underline}. The complaint file is
closed 30 business days after the date of Rural Development\'s final
reply to OIG, unless further information is requested by OIG within the
30 business days.

§§ 2012.65 - 2012.79 \[Reserved\]

§ 2012.80 [Program Fraud Civil Remedies Act of 1986
(PFCRA)]{.underline}.

\(a\) The PFCRA is an administrative remedy against persons who make,
submit, or present, or cause to be made, submitted, or presented, false,
fictitious, or fraudulent claims or written statements in connection
with Government programs. The USDA PFCRA regulations, available at 7 CFR
Part 1, Subpart L, Sections 301 through 346, which contain the
definitions and procedures for all USDA Agency enforcement, apply to
this section for Rural Development.

\(1\) Rural Development may request that OIG initiate a PFCRA
investigation when criminal and civil actions are declined by the U.S.
Attorney\'s Office.

\(2\) The PFCRA provides for a maximum civil penalty of \$5,000 for each
claim or statement. If Rural Development has made any payment (including
transferred property or provided services) on a claim, a person subject
to a civil penalty shall also be subject to an assessment of not more
than twice the amount of such claim or portion thereof. Such assessment
shall be in lieu of damages sustained by Rural Development because of
the claim. The civil penalty or assessment cannot exceed \$150,000.

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RD Instruction 2012-B

§ 2012.80(a)(2) (Con.)

\(i\) [Investigating Official (IO)]{.underline}. The IO, as defined in §
1.302 of the USDA PFCRA, is the Inspector General of USDA or an officer
or employee of the OIG designated by the Inspector General. The IO:

\(A\) Conducts the investigation;

\(B\) Issues subpoenas and undertakes other actions in accordance with §
1.304 of the USDA PFCRA, as needed; and

\(C\) Reports results and conclusions to the Reviewing Official (RO).

\(ii\) [Reviewing Official (RO)]{.underline}. The RO, as defined in §
1.302 of the USDA PFCRA, is an officer or employee of the Office of the
General Counsel, as delegated by the General Counsel.

\(A\) The RO may refer the investigation to the Agency Fraud Claims
Officer (AFCO) and undertake other actions in accordance with\
§ 1.305 of the USDA PFCRA.

\(B\) The RO will:

([1]{.underline}) Accept or reject the recommendation of the AFCO;

([2]{.underline}) Determine if there is adequate evidence of liability;

([3]{.underline}) If, based on the report of the IO, there is adequate
evidence to believe that a person is liable under the PFCRA, shall
transmit to the Approving Official (AO) a written notice, containing the
information required by § 1.305(e) of the USDA PFCRA, of the RO\'s
intention to issue a complaint under § 1.307 of the USDA PFCRA; and

([4]{.underline}) If approved, serves the complaint on the Respondent as
provided in § 1.308 of the USDA PFCRA.

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## 

(10-25-06) PN 403

RD Instruction 2012-B

§ 2012.80(a)(2) (Con.)

\(iii\) [Agency Fraud Claims Officer (AFCO)]{.underline}. The AFCO, as
defined in § 1.302 of the USDA PFCRA, is the Director, FMD. The AFCO:

\(A\) Reviews the report of the IO; and

\(B\) Makes a recommendation to the RO within 45 business days, if
referred.

\(iv\) [Approving Official (AO)]{.underline}. The AO is the Attorney
General or an Assistant Attorney General designated by the Attorney
General. The AO approves or disapproves the issuance of a complaint in
writing in accordance with § 1.306 of the USDA PFCRA.

\(v\) [Respondent]{.underline}. The Respondent, as defined in § 1.302 of
the USDA PFCRA, is any person alleged in a complaint issued under §
1.308 of the USDA PFCRA to be liable for a civil penalty or assessment
under § 1.303 of the USDA PFCRA. The Respondent, within 30 business days
of the date of receipt of the complaint (or refusal to accept service of
the complaint), may file an answer with the RO:

\(A\) Admitting or denying the allegations in accordance with § 1.309 of
the USDA PFCRA;

\(B\) Requesting a hearing; and

\(C\) Taking other actions as specified in the USDA PFCRA.

\(vi\) [Administrative Law Judge (ALJ)]{.underline}. An ALJ, as defined
in § 1.302 of the USDA PFCRA. The ALJ:

\(A\) Conducts the hearing;

\(B\) Issues an initial decision in accordance with

§ 1.336 of the USDA PFCRA; and

\(C\) Takes any other action authorized under the USDA PFCRA.

\(3\) The Department of Justice is responsible for judicial enforcement
of penalties and assessments under PFCRA. All amounts collected under
PFCRA are deposited as miscellaneous receipts in the Treasury of the
United States.

## 18

##  

RD Instruction 2012-B

§ 2012.80 (Con.)

\(b\) Provisions for handling cases of illegal and unauthorized
assistance under PFCRA can be found in:

\(1\) RD Instruction 1951-O; and

\(2\) Rural Development Handbooks:

\(i\) HB-2-3550, Chapter 7, Special Collections, for direct Single
Family Housing programs; and

\(ii\) HB-3-3560, Chapter 9, Unauthorized Assistance, for

Multi-Family Housing programs.

§§ 2012.81 - 2012.100 \[Reserved\]

Attachment: Exhibit A

o0o

## 19

##  

RD Instruction 2012-B

Exhibit A

## Request for Borrower Investigation

## 

To insure the proper evaluation of complaints by the Office of Inspector
General (OIG), requests for investigation of Rural Development borrowers
suspected of violations of U.S. Department of Agriculture (USDA) program
rules and regulations, should include the following information:

1\. Borrower\'s name, address, and county where loan was obtained.

2\. A listing of each outstanding loan showing the loan date, loan type,
loan amount, and outstanding balance.

3\. A statement of any aggravating circumstances surrounding the
violation, including any attempt by the borrower to deceive Rural
Development, or breach of public trust.

4\. A statement of any mitigating circumstances surrounding the
violation, such as illness, mental infirmity, or age of the borrower.

5\. A statement of the actual Rural Development practices and procedures
in force at the time the violation occurred and the borrower\'s
compliance with or disregard of such requirements.

6\. A statement of the efforts by Rural Development to ensure
compliance, including all statements, explanations, or admissions made
by the borrower about his/her involvement.

7\. A statement of Rural Development\'s knowledge of and response to any
prior violations, including the exact time Rural Development became
aware of the situation and any explicit or tacit approvals given by
Rural Development employees to the borrower.

8\. A listing of all subsequent administrative actions taken by Rural
Development after a known violation, such as the granting of a new loan
to the borrower.

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(10-25-06) PN 403