United States Department of Agriculture

AGENCY 

FINANCIAL 

REPORT

Creating a USDA for the 21st Century

FISCAL YEAR

2015
Non-Discrimination Statement 

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, 

employees, and applicants for employment on the bases of race, color, national origin, age, 

disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital 

status, familial or parental status, sexual orientation; or whether all or part of an individual's 

income is derived from any public assistance program; or protected genetic information in 

employment or in any program or activity conducted or funded by the Department. (Not all 

prohibited bases will apply to all programs and/or employment activities.) 

To File an Employment Complaint 

If you wish to file an employment complaint, you must contact your agency's Equal Employment 

Opportunity (EEO) Counselor within 45 days of the date of the alleged discriminatory act, event, 

or in the case of a personnel action. Additional information can be found on the USDA Office of 

the Assistant Secretary of Civil Rights website.

To File a Program Complaint 

To file a program discrimination complaint, please complete the USDA Program Discrimination 

Complaint Form. You or your authorized representative must sign the complaint form. You are 

not required to use the complaint form; you may write a letter instead. If you write a letter, it 

must contain all of the information requested in the form and be signed by you or your 

authorized representative. Incomplete information will delay the processing of your complaint. 

Employment civil rights complaints will not be accepted through the email address below. 

Persons with disabilities who require alternative means for communication of program 

information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at 

(202) 720-2600 (voice and TDD). 

Send your completed complaint form or letter to us by mail or fax, or email: 

Mail 

U.S. Department of Agriculture 

Director, Office of Adjudication 

1400 Independence Avenue, SW 

Washington, DC 20250-9410 

Fax 

(202) 690-7442 

E-mail 

program.intake@usda.gov
About This Report 

The purpose of the United States Department of Agriculture (USDA) Fiscal year (FY) 2015 

Agency Financial Report (AFR) is to inform Congress, the President, and the American people 

on how USDA has used Federal resources entrusted to the Department in 2015 in order to do the 

following: expand economic opportunity through innovation; help rural America to thrive while 

promoting agriculture production sustainability that better nourishes the population; and preserve 

and conserve the Nation’s natural resources. USDA has demonstrated good stewardship of 

financial resources by putting in place well controlled and managed business lines and financial 

management systems and processes. USDA has chosen to produce both an AFR and an Annual 

Performance Report (APR) for FY 2015. USDA will include its FY 2015 APR with its 

Congressional Budget Justification and will post this AFR on the Department’s Web page. 

This AFR provides high-level financial and highlighted performance results with assessments of 

controls, a summary of challenges, and USDA stewardship information. The AFR enables the 

President, Congress, and the public to assess USDA accomplishments and understand its 

financial position. USDA’s end-of-fiscal-year financial position includes, but is not limited to, 

financial statements, notes to the financial statements, and a report of the independent auditors. 

The report satisfies the reporting requirements contained in the following laws and regulations: 

 Improper Payments Elimination and Recovery Act of 2010; 

 Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) 

 Government Performance and Results Act Modernization Act of 2010; 

 Improper Payments Information Act of 2002; 

 Reports Consolidation Act of 2000; 

 Government Management Reform Act of 1994; 

 Chief Financial Officers Act of 1990; 

 Federal Managers’ Financial Integrity Act of 1982; 

 Office of Management and Budget Circular A-123, Management’s Responsibility for 

Internal Controls; and 

 Office of Management and Budget Circular A-136, Financial Reporting Requirements. 

The APR is a detailed report on USDA’s progress toward achieving the goals and objectives 

described in the Agency’s Strategic Plan and Annual Performance Plan, including progress on 
the strategic objectives, performance goals, and Agency Priority Goals. The report will be 

delivered to Congress with the annual budget submission. 

This report is to be posted on these Web sites: Performance.gov and the USDA Performance 

Improvement and Accountability at USDA Web page. Previous reports are posted as well. 
Table of Contents 

Message from Secretary Vilsack ......................................................................................................... i

Section I: Management’s Discussion and Analysis ............................................................................. 1

About USDA ............................................................................................................................... 1

USDA Mission Areas ................................................................................................................... 4

Strategic Plan and Program Performance .................................................................................. 6

Future Demands, Risks, Uncertainties, Events, Conditions, and Trends .................................. 16

Analysis of Financial Information and Highlights ..................................................................... 17

Statement of Assurance ........................................................................................................... 25

Federal Managers’ Financial Integrity Act Report on Management Control ........................... 27

Federal Financial Management Improvement Act Report on 

Financial Management Systems .............................................................................................. 42

Financial Management Systems Strategy ................................................................................ 45

Other Management Information, Initiatives, and Issues: ........................................................ 49

Section II: Financial Information ...................................................................................................... 52

Message from Chief Financial Officer ...................................................................................... 52

Independent Auditors Report .................................................................................................. 54

Agency Response to Auditors Report ...................................................................................... 79

Consolidated Financial Statements .......................................................................................... 82

Notes to the Consolidated Financial Statements ..................................................................... 87

Required Supplementary Stewardship Information .............................................................. 163

Required Supplementary Information ................................................................................... 174

Section III: Other Information ....................................................................................................... 182

Schedule of Spending............................................................................................................. 182

Response to Management Challenges ................................................................................... 184

Summary of Financial Statement Audit and Management Assurances ................................. 205

Improper Payments ............................................................................................................... 208

Discussion of Supplemental Measures .................................................................................. 226

Improper Payment Root Cause Categories ............................................................................ 228

Inspector General Act Amendments of 1988: Management’s Report on Audit Follow Up ... 277

Freeze the Footprint .............................................................................................................. 291

Civil Monetary Penalties ........................................................................................................ 293

Abbreviations—Acronyms ............................................................................................................. 314
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Message from Secretary Vilsack 

In fulfillment of our duty to the American people, the President, and 

Congress, the U.S. Department of Agriculture (USDA) respectfully 

submits the Fiscal year (FY) 2015 Agency Financial Report. 

This year has marked another period of historic accomplishments at 

USDA. We have innovated and collaborated with partners across the 

Nation to support a strong American agricultural sector; bolstered 

agricultural trade; safeguarded the Nation’s food supply; supported 

record soil and water conservation; grown the biobased economy; and 

expanded opportunity for farmers, ranchers, and rural communities 

nationwide. Tools and resources in the 2014 Farm Bill have allowed 

us to stretch the impact of our investments in rural America even further. 

USDA has accomplished these results in a time of significant uncertainty. Since 2010, USDA's 

budget has been reduced by 10 percent, while the Department has been charged with additional 

responsibilities and more complex programs. Federal budget reductions have challenged USDA 

leadership and employees alike to find new strategies for delivering modern, efficient service. In 

FY 2015, USDA enhanced our modernization and streamlining efforts, consistent with our

Blueprint for Stronger Service. These proactive steps have given us the tools to carry out our 

mission-critical work while ensuring that USDA's millions of customers across rural America 

receive stronger service. USDA's efforts have saved taxpayers $1.4 billion in recent years. 

The fact that we are able to continue accomplishing admirable results across all areas of the 

Department is a testament to nearly 100,000 USDA employees stationed in Washington, D.C., 

across the Nation, and around the world. Often, Americans do not have a chance to work directly 

with these dedicated public servants—but the impact of their work is felt from our smallest 

towns to our biggest cities. 

In 2015, USDA took a multitude of steps to provide innovative assistance for America’s farmers 

and ranchers. For example, producers can now choose between the Agriculture Risk Coverage 

(ARC) and Price Loss Coverage (PLC) programs. The new programs, established by the 

2014 Farm Bill, trigger financial protections for agricultural producers when market forces cause 

substantial drops in crop prices or revenues. More than 1.76 million farmers have elected ARC 

or PLC. Previously, 1.7 million producers had enrolled to receive direct payments (the program 

replaced with ARC and PLC by the 2014 Farm Bill). This means more farmers have elected 

ARC or PLC than had previously enrolled under previously administered programs. Also in 

2015, dairy producers could enroll in the Margin Protection Program for coverage in 2016. The 
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voluntary program, established by the 2014 Farm Bill, provides financial assistance to 

participating dairy operations when the margin—the difference between the price of milk and 

feed costs—falls below the coverage level selected by the farmer. More than half of the Nation's 

dairy producers enrolled in the 2015 program, exceeding our expectations for the first year of 

the program. 

USDA has also supported a Federal crop insurance program that has matured into the Nation’s 

primary farm safety net. For some farming and ranching families, crop insurance means the 

difference between staying in business and going out of business after a natural disaster. When 

farmers and ranchers suffer covered losses, indemnity payments can replace lost income, helping

local rural communities remain economically viable. USDA’s Risk Management Agency (RMA) 

has worked to ensure that crop insurance is available and meets the needs of as many producers 

as possible. For example, in 2015, USDA announced the availability of Whole-Farm Revenue 

Protection insurance, which allows producers who have previously had limited access to a risk 

management safety net to insure all of the commodities on their farm at once instead of one 

commodity at a time. This insurance is available in every county in the Nation. 

In FY 2015, USDA also continued our strong support for markets of products grown and made 

in rural America. Thanks to the resilience of our farmers and ranchers, fiscal years 2009 to 2015 

represent the strongest 7 years in history for U.S. agricultural trade, with U.S. agricultural 

product exports totaling more than $911 billion since 2009. We expect that new trade 

agreements, made possible thanks to Trade Promotion Authority legislation passed in 2015, will 

allow American farmers and ranchers to better reach the 95 percent of consumers who live 

outside of our borders and drive the continued strength of American agricultural exports. USDA 

will continue to fight to get the best trade deals for farmers and ranchers to open new markets 

and create new customers for their products. Expanded trade strengthens the agricultural 

economy, supports more than 1 million good-paying American jobs, helps to preserve the rural 

way of life, and helps to ensure a more food secure population. 

Establishing global food security is important not only to hundreds of millions of hungry people 

around the world, but also to the sustainable economic growth of developing nations and the 

long-term economic prosperity of the United States. As we help countries become more food 

secure and raise incomes, we also expand markets for American producers. For example, 

between fiscal years 2010 and 2014, U.S. agricultural exports to developing countries grew by

44.3 percent, significantly outpacing the 33.4 percent growth rate for developed countries. 

Exports to Southeast Asia grew by 56.5 percent.

In addition to trade, USDA continues to focus on supporting education, child development, and 

food security in low-income, food-deficit countries around the globe. In 2015, for example, 

USDA's McGovern-Dole International Food for Education and Child Nutrition Program 

announced seven new McGovern-Dole projects that could benefit more than 2.5 million children 

in Africa and Central America, in addition to 28 projects ongoing in 21 countries. Since the 

program was established in 2002, it has benefited more than 30 million children in 38 countries.
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USDA has also helped to expand new markets for agricultural products here at home. For 

example, consumer demand for locally produced food is strong and growing, and farmers and 

ranchers are positioning their businesses to meet that demand. Local food sales topped 

$11.7 billion in 2014, according to industry estimates—underscoring the economic benefit that a 

local food system can offer a community. USDA has invested more than $800 million in more 

than 29,100 local and regional food businesses and infrastructure projects over the past 6 years. 

In August 2015, we announced that USDA's National Farmers Market Directory now lists more 

than 8,400 markets. In 2015, USDA continued to encourage farm businesses to fill three 

additional Local Food Directories to help consumers connect with farmers markets, on-farm 

markets, Community-Supported Agriculture (CSAs), and food hubs.

In FY 2015, USDA also continued supporting farmers’ conservation work through technical 

assistance and conservation programs—applying the most effective programs in the best places 

to achieve the best possible result. A record 400 million acres and 600,000 producers and 

landowners are currently enrolled in USDA's conservation programs.

The 2014 Farm Bill consolidated 23 existing conservation programs into 13 programs while 

strengthening tools to protect and conserve land, water, and wildlife. For example, over 

98.2 percent of producers have met the 2014 Farm Bill requirement to certify conservation 

compliance to qualify for crop insurance premium support payments. Implementing the 

2014 Farm Bill provisions for conservation compliance is expected to extend conservation 

provisions for an additional 1.5 million acres of highly erodible lands and 1.1 million acres of 

wetlands, which will reduce soil erosion, enhance water quality, and create wildlife habitat. And 

through the Conservation Reserve Program, another 2014 Farm Bill program, farmers and 

ranchers have over the past 30 years prevented more than 8 billion tons of soil from eroding, 

reduced nitrogen and phosphorous runoff relative to cropland by 95 and 85 percent respectively, 

and even sequestered 43 million tons of greenhouse gases annually, equal to taking 8 million cars 

off the road.

In 2015, USDA announced the first round of projects through the Regional Conservation 

Partnership Program (RCPP), a way for private companies, tribes, local communities, and 

non-government partners to collaborate and invest in cleaner water and air, healthier soil, and 

enhanced wildlife habitat. USDA awarded $370 million in Federal funding to 115 high-impact 

projects across all 50 states and the Commonwealth of Puerto Rico. These projects will leverage 

an estimated $400 million more in partner contributions—for a total of nearly $800 million—to 

improve the Nation's water quality, support wildlife habitat, and enhance the environment. More 

than 600 pre-proposals were submitted for RCPP in 2014. With participating partners investing 

along with the Department, USDA's $1.2 billion in funding over the life of the 5-year Farm Bill 

program can leverage an additional $1.2 billion from partners for a total of $2.4 billion for 

conservation.

Throughout 2015, USDA, through the Forest Service, remained focused on managing 

193 million acres of public forests and grasslands. Public lands the Forest Service manages 
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contribute more than $13 billion to the economy each year through visitor spending alone. Those 

same lands provide 20 percent of the Nation's clean water supply, a value estimated at 

$7.2 billion per year. The agency has either a direct or indirect role in stewardship of about 

80 percent of the 850 million forested acres within the United States, of which 100 million acres 

are urban forests where most Americans live.

In 2015, the Nation experienced yet another devastating wildfire season, particularly in the 

drought-ravaged West. Climate change, drought, fuel buildup, insects, and disease are increasing 

the severity of unprecedented wildfire in America's forests and rangelands, which impacts the 

safety of people, homes, and communities. Development close to forests has also increased the 

threat to property, with more than 44 million homes in the United States, equivalent to one in 

every three houses in the country, potentially at risk from wildfire. In 2015, 52 percent of the 

Forest Service budget was set aside for fire suppression, up from 16 percent in 1995. By 2025, 

the share of the agency’s budget devoted to wildfire is now predicted to exceed 67 percent. 

By September 2015, the Forest Service had already exceeded the funding set aside for fire 

suppression and was forced to borrow funds meant for other Forest Service activities. 

Accordingly, throughout 2015, USDA continued to push for a new funding strategy based on the 

recognition that catastrophic wildfires are like other disasters and should be funded accordingly. 

A proposal in President Obama's Fiscal Year 2016 Budget, mirrored by the bipartisan Wildfire 

Disaster Funding Act already introduced in the House and Senate, would provide a fiscally 

responsible mechanism to treat wildfires more like other natural disasters, end "fire transfers," 

and partially replenish the ability to restore resilient forests and protect against future fire

outbreaks.

This year, USDA continued our multipronged, multiyear approach to protect producers from the 

negative impacts of climate change and provide them with tools and techniques to protect their 

bottom line and ensure the future food security of our Nation. In 2014, we established seven 

regional Climate Hubs and three sub-hubs to serve as a source of regional data and information 

for hazard and adaptation planning in the agriculture and forest sectors. Throughout 2015, each 

Hub focused on building networks of regional land-grant institutions, the private sector, farm 

groups and forestry organizations, USDA program staff, State governments, and conservation 

and environmental groups. 

In April 2015, USDA announced 10 building blocks for climate action, a comprehensive, 

voluntary approach to partnering with agricultural producers to address the threat of climate 

change. Building on the work of the Climate Hubs, the building blocks will utilize and leverage 

our voluntary, incentive-based conservation, forestry, and energy programs to reduce greenhouse 

gas emissions, increase carbon sequestration, and expand renewable energy production in the 

agricultural and forestry sectors. Through these efforts, USDA expects to reduce net emissions 

and enhance carbon sequestration by over 120 million metric tons of CO2 equivalent per year—

about 2 percent of economy-wide net greenhouse emissions—by 2025. That's the equivalent of 

taking 25 million cars off the road, or the emissions produced by powering nearly 11 million
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homes last year. The building blocks are part of the Administration’s climate change strategy and 

will help the United States to meet the commitments outlined by President Obama last October 

to reduce the United States’ greenhouse gas emissions by 26–28% below 2005 levels by 2025.

USDA continues to lead the way for renewable energy by supporting the infrastructure we will 

need in a new energy economy. In FY 2015, more than 1,861 new awards under the Rural 

Energy for America Program helped USDA to reach a milestone of more than 9,600 renewable 

energy and energy efficiency projects nationwide since 2009. During this period, the Department 

has provided more than $291 million in grants and $327 million in loan guarantees to 

agricultural producers and rural small business owners. Meanwhile, we took new steps to support 

biobased product manufacturing that in 2013 alone contributed 4 million jobs and $369 billion to 

our economy—including the addition of new forest products in the BioPreferred program, along 

with proposed changes to the former Biorefinery Assistance Program to assist in the 

development of cutting-edge technologies for advanced biofuels, renewable chemicals, and 

biobased product manufacturing.

This year, USDA continued its record level of investment in rural America by investing in 

community facilities, providing loans for rural small business, helping rural families buy or 

repair a home, and helping to ensure communities have access to critical infrastructure. Since 

2009, for example, USDA has helped more than 89,000 rural small businesses grow through 

grant and loan support, creating or saving more than 420,000 jobs. In addition, we have helped 

more than 900,000 families achieve the dream of homeownership and invested in more than 

6,600 critical community facilities projects, including 1,200 education facilities, 380 libraries, 

780 health care facilities, and 2,800 public safety facilities.

USDA has also continued its delivery of critical nutrition assistance to millions of Americans 

who are working hard but struggling to put food on the table, including nutritious meals to about 

30 million children each school day. We continued to work with schools across the Nation to 

successfully implement the healthier meals standards authorized under the Healthy, Hunger-Free 

Kids Act of 2010 and to implement new steps to ensure that snack foods are healthier during the 

school day—supporting the efforts of parents and teachers to improve children’s eating habits 

and reduce obesity. We placed a special focus on expanding access to meals for low-income 

children during the summer months when school meals are not widely available. In 2014, the 

summer meal programs experienced a historic increase of 11 million more meals served 

compared to the previous summer, serving a total of more than 187 million meals at over 

50,000 summer meal sites throughout the country. This year, on the 40th anniversary of the 

program, USDA challenged its partners to serve an additional 13 million meals to meet our 

challenge of serving 200 million meals to children nationwide. Our preliminary data indicate that 

we have met or exceeded that goal. 

In 2015, the Supplemental Nutrition and Assistance Program (SNAP) continued to offer nutrition 

assistance to millions of eligible low-income families in need. SNAP primarily serves children, 

the elderly, people with disabilities, or people who are working but can’t quite make ends meet. 
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More than half of SNAP recipients are children and the elderly, and only 7 percent receive cash 

welfare. More than 42 percent of recipients live in households where at least one person is 

working. SNAP helps children and families who need it get access to healthy food, but 

participation continues to decline as the economy recovers. Comparing June 2015 with 

June 2013, SNAP participation has decreased by 4 percent.

In 2015, USDA continued to focus on helping SNAP participants find and keep good jobs to 

transition recipients off SNAP assistance and ultimately reduce program costs. Earlier this year, 

USDA awarded $200 million in competitive awards to fund and evaluate pilot projects in 

10 states to explore and test innovative, cost-effective ways to help SNAP recipients find and 

keep gainful employment in order to build a stronger future for their families.

This year, USDA’s support for critical agricultural research remained strong. USDA researchers 

have partnered with others, including universities and private industry, across the country to 

develop the next generation of solutions to some of America’s greatest scientific challenges.

USDA released a new report stating in FY 2014 alone, USDA received 83 patents, filed 119 

patent applications, and disclosed 117 new inventions. In the past 6 years, research by USDA 

scientists has resulted in 758 patent applications filed, 335 patents issued, and 953 new 

inventions disclosures covering a wide range of topics and discoveries. In addition, since 2009, 

USDA-funded grantees have applied for 295 patents, developed 43 new crop cultivars, and 

identified 1,087 new inventions. Helping drive these innovations, USDA has executed 486 new 

Cooperative Research and Development Agreements with outside investigators, which includes 

universities and other organizations over the past 6 years. In FY 2014 alone, USDA had 

267 active Cooperative Research and Development Agreements, including 102 with small 

businesses.

USDA continues to ensure that America’s supply of meat, poultry, and processed eggs is safe to 

eat and accurately labeled, and that the animals processed are treated humanely. In October 

2014, the Government Accountability Office recognized USDA’s Food Safety and Inspection 

Services’ “increasingly science-based, data-driven and risk-based approach” to protecting 

Americans from illness, and that approach is working. FSIS’ goal is always to bring the number 

of cases of foodborne illness to zero, and data show that the trend is headed in the right direction. 

In 2014, cases of foodborne illness traced to the products these men and women regulate dropped 

by 41,000, or 10 percent, compared to the year before. In 2015, FSIS continued work to 

implement updates to our 60-year-old poultry safety system, as well as first-time ever pathogen 

reduction standards for chicken parts. As yet another example of FSIS’ strategic, risk-based 

approach, these new standards are expected to prevent 50,000 cases of food poisoning by 

targeting items consumers frequently purchase.

The Department’s management team continues to oversee USDA’s assessment of internal

control over its programs, operations, financial systems, and financial reporting. The

Department’s work is consistent with the provisions of the Federal Managers’ Financial Integrity

Act (FMFIA) and the Federal Financial Management Improvement Act (FFMIA). USDA’s
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continuous monitoring and remediation efforts allow us to provide taxpayers with reasonable 

assurance that this report is based on sound, accurate data. 

Nevertheless, continued improvement is needed to remediate USDA’s existing material 

weakness and financial system noncompliance. To accomplish this goal, management continues 

to implement corrective action plan activities. Therefore, I provide qualified assurance that, 

except for the areas in need of improvement as described in the Management Assurances section 

of this report, USDA’s internal control over operations, financial systems, and financial reporting 

meets the objectives of FMFIA and FFMIA. The financial and performance information 

presented herein is complete and accurate, and is in accordance with law and Office of 

Management and Budget guidance. 

While every year brings unique challenges and 2015 was no different, I am truly proud of USDA 

employees across the Nation. They have stepped up to get the job done on behalf of Americans, 

and in so doing they continue to grow our economy and create new jobs in rural communities. 

I know that together, we can continue to deliver efficient service while finding more ways to 

serve as efficient stewards of taxpayer dollars. 

Thank you for your interest in the Department. 

Thomas J. Vilsack 

Secretary of Agriculture 

February 12, 2016 
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Section I: Management’s 

Discussion and Analysis 

About USDA 

President Abraham Lincoln founded the U.S. Department of Agriculture (USDA) in 1862 with 

the goal of providing effective leadership to the Nation on food, agriculture, natural resources, 

and related issues. As Americans, you are part of the USDA story, with an over 150-year 

tradition of excellence in public service. 

Since 1862, the dedicated public servants at USDA help hundreds of millions of Americans 

every day. As Agriculture Secretary Thomas J. Vilsack, using a phrase to describe USDA coined 

by Abraham Lincoln, said, “We are the People’s Department.” 

We would like you to learn more about USDA and the Agencies and Offices that touch every 

American, every day. More information about the Department, our history, and our leaders can 

be found here at www.usda.gov. 

Mission Statement 

We provide leadership on food, agriculture, natural resources, rural development, nutrition, and 

related issues based on sound public policy, the best available science, and efficient 

management. 

Vision Statement 

To expand economic opportunity through innovation, helping rural America to thrive; to 

promote agriculture production sustainability that better nourishes Americans while also helping 

feed others throughout the world; and to preserve and conserve our Nation’s natural resources 

through restored forests, improved watersheds, and healthy private working lands. 
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Core Values 

Our success depends on the following: 

 Accountability—Ensuring that the performance of all employees is measured against the 

achievement of the Department’s strategic goals. 

 Transparency—Making the Department’s management processes more open so that the 

public can learn how USDA supports Americans every day, in every way. 

 Customer Focus—Serving USDA’s constituents by delivering programs that address their 

diverse needs. 

 Collaboration—Working cooperatively at all governmental levels domestically and 

internationally on policy matters affecting a broad audience. 

 Participation—Providing opportunities for USDA constituents to shape and improve 

services provided by the Department. 

 Professionalism—Building and maintaining a highly skilled, diverse, and compassionate 

workforce. 

 Results Oriented—Measuring performance and making management decisions to direct 

resources to where they are used most effectively. 
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USDA Organization Chart 

Source: USDA’s Web site, October 22, 2014 

This image displays the U.S. Department of Agriculture’s (USDA) Headquarters Organization, 

including the Secretary, Chief Officers, Under Secretaries, and Assistant Secretaries for various 

agencies within USDA. In addition to its Headquarters Organization, USDA has a network of offices, 

facilities, and laboratories across the country and overseas.
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USDA Mission Areas 

The U.S. Department of Agriculture’s (USDA) work is organized by mission areas, which are 

collections of agencies that work together to achieve USDA’s strategic goals. A brief description 

of USDA’s seven mission areas follows and may be found here: USDA Mission Areas. 

Farm and Foreign Agricultural Services (FFAS) 

Farm and Foreign Agricultural Services helps to keep America's farmers and ranchers in 

business as they face the uncertainties of weather and markets. They deliver commodity, credit, 

conservation, disaster, and emergency assistance programs that help improve the stability and 

strength of the agricultural economy. The agencies under FFAS are as follows: 

 Farm Service Agency (FSA)

Commodity Credit Corporation (CCC) 

 Foreign Agricultural Service (FAS)

 Risk Management Agency (RMA)

Federal Crop Insurance Corporation (FCIC) 

Food, Nutrition and Consumer Services (FNCS) 

Food, Nutrition and Consumer Services works to harness the Nation's agricultural abundance to 

end hunger and improve health in the United States. Its agencies administer federal domestic 

nutrition assistance programs and the Center for Nutrition Policy and Promotion, which links 

scientific research to the nutrition needs of consumers through science-based dietary guidance, 

nutrition policy coordination, and nutrition education. 

 Center for Nutrition Policy and Promotion (CNPP)

 Food and Nutrition Service (FNS)

Office of Food Safety 

The Office of Food Safety ensures that the Nation's commercial supply of meat, poultry, and egg 

products is safe, wholesome, and properly labeled and packaged. This mission area also plays a 

key role in the President's Food Safety Working Group, a coordinated government-wide 

initiative to ensure a safe food supply for the American people for the 21st century. USDA's 

partners in the Working Group include the U.S. Department of Health and Human Services, the 

U.S. Environmental Protection Agency, and a number of other government agencies. 

 Food Safety and Inspection Service (FSIS)
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Marketing and Regulatory Programs (MRP) 

Marketing and Regulatory Programs facilitates domestic and international marketing of 

U.S. agricultural products and ensures the health and care of animals and plants. MRP agencies 

are active participants in setting national and international standards, and include as follows: 

 Agricultural Marketing Service (AMS) 

 Animal and Plant Health Inspection Service (APHIS) 

 Grain Inspection, Packers, and Stockyards Administration (GIPSA) 

Natural Resources and Environment (NRE) 

Natural Resources and Environment ensures the health of the land through sustainable 

management. Its agencies work to prevent damage to natural resources and the environment, 

restore the resource base, and promote good land management. 

 Forest Service (FS) 

 Natural Resources Conservation Service (NRCS)

Research, Education, and Economics (REE) 

Research, Education, and Economics is dedicated to the creation of a safe, sustainable, 

competitive U.S. food and fiber system, as well as strong communities, families, and youth 

through integrated research, analysis, and education. These agencies include as follows: 

 Agricultural Research Service (ARS)

 Economic Research Service (ERS)

 National Agricultural Library (NAL)

 National Agricultural Statistics Service (NASS) 

 National Institute of Food and Agriculture (NIFA)

Rural Development (RD) 

Rural Development is committed to helping improve the economy and quality of life in all of 

rural America by providing financial programs to support essential public facilities and services 

such as water and sewer systems, housing, health clinics, emergency service facilities, and 

electric and telephone service. Rural Development promotes economic development by 

providing loans to businesses through banks and community-managed lending pools, while also 

assisting communities to participate in community empowerment programs. 

 Rural Development 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Strategic Plan and Program Performance 

USDA Performance, Goals and Results FY 2015

The U.S. Department of Agriculture’s (USDA) mission is to provide leadership on food, 

agriculture, natural resources, rural development, nutrition, and related issues based on sound 

public policy, the best available science, and efficient management. Through implementing our 

mission, the Department aspires to achieve five strategic goals as reflected in USDA’s 

2014–2018 Strategic Plan: 

 Assist rural communities to create prosperity so they are self-sustaining, re-populating, and

economically thriving;

 Ensure our national forests and private working lands are conserved, restored, and made

more resilient to climate change, while enhancing our water resources;

 Help America promote agricultural production and biotechnology exports as America

works to increase food security;

 Ensure that all of America’s children have access to safe, nutritious, and balanced meals;

and

 Create a USDA for the 21st century that is high-performing, efficient, and adaptable.

USDA has also established three Agency Priority Goals (APGs) for fiscal years (FY) 2014 and 

2015 that identify near-term goals to help USDA progress toward meeting our longer term 

strategic goals and objectives. USDA’s APGs are as follows: 

 Create new economic opportunities;

 Improve soil health; and

 Reduce foodborne illnesses.

More information and reports on the APGs and quarterly progress can be found at 

https://www.performance.gov/agency/department-agriculture?view=public#apg and in the FY 

2014 Annual Performance Report. 

For purposes of the AFR, a performance summary is provided using the Department’s key 

performance indicators as a mechanism to gauge progress in achieving priorities, goals, and 

strategic objectives. In FY 2015, USDA had 38 key performance indicators, as reflected in the 

Department’s FY 2015 Annual Performance Plan 

(https://www.obpa.usda.gov/budsum/FY15budsum.pdf). 

The following tables and discussion provide a high-level description of key focus areas for the 

Department that are being tracked and managed through USDA’s performance management 

process, in alignment with the Department’s strategic goals and objectives. The tables provide 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 

key performance indicator historical results, and include projections for the year based on reports 

as of the third quarter. 

Final performance information and a detailed discussion of results for the Department’s FY 2015

performance goals, assessment methodologies, metrics, external reviews, and documentation of 

performance data will be presented in the FY 2015 USDA Annual Performance Report. The 

report is planned to be released with the President’s 2017 budget in February and will be 

available on www.usda.gov/ourperformance. 

Goal #1: Rural Prosperity 

A vibrant American economy depends on a prosperous rural America. Our four primary pillars 

of economic opportunity in agriculture are: (1) exports, (2) local food systems, (3) conservation 

and outdoor recreation, and (4) enhancing the bio-based economy. USDA is making an impact 

on persistent poverty, out-migration, and rural income through increases in the number of 

homeownership opportunities provided in rural communities and the percentage of direct and 

guaranteed lending to beginning farmers. 

Exhibit 1: USDA Strategic Plan Goal #1: Rural Prosperity Key Performance Indicators 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Number of jobs 

created or saved 

through USDA 

financing of 

businesses 

64,935 52,468 44,419 48,467 43,772 45,000 

Homeownership 

opportunities 

provided 

140,100 153,027 170,055 176,539 177,366 167,000 

Health Facilities: 

Percentage of 

customers who are 

provided access to 

new and/or improved 

essential community 

facilities 

5.2% 7.3% 5.4% 5.5% 4.5% 6% 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Safety Facilities: 

Percentage of 

customers who are 

provided access to 

new and/or improved 

essential community 

facilities 

4.3% 3.7% 3.4% 3.7% 3.7% 3.7% 

Educational Facilities: 

Percentage of 

customers who are 

provided access to 

new and/or improved 

essential community 

facilities 

3.8% 3.7% 3.4% 3.7% 4.5% 4.5% 

Number of 

borrowers/subscriber

s receiving new 

and/or improved 

electric facilities 

(millions) 

7.1 8.3 8.7 4.6 4.625 4.6 

Number of 

borrowers/subscriber

s receiving new or 

improved 

telecommunications 

services (millions) 

0.18 0.06 0.12 0.13 0.145 0.145 

Number of 

population receiving 

new or improved 

service from 

agency-funded water 

facilities (millions) 

2.9 2.5 1.8 2.3 2.2 2.2 

Value of agricultural 

exports resulting 

from participation in 

foreign food and 

agricultural trade 

shows ($ billion) 

$ 1.12 $ 1.26 $ 1.46 $ 1.50 $ 1.55 $ 1.52
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 9 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Percentage of Direct 

and Guaranteed 

lending to Socially 

Disadvantaged 

Farmers (SDA) 

13.10% 13.30% 13.60% 13.40% 13.50% 15%

Percentage of Direct 

and Guaranteed 

lending to Beginning 

Farmers (BF) 

64.90% 68.80% 70% 70.50% 71% 85%

Normalized value of 

risk protection 

provided to 

agricultural producers 

through the Federal 

Crop Insurance 

Program 

($ billion) 

$56.30 $ 62.10 $ 66.00 $ 62.70 $ 63.00 $ 68.3 

Value of trade 

preserved annually 

through USDA staff 

intervention leading 

to resolution of 

foreign market access 

issues such as U.S. 

export detainment, 

restrictive Sanitary/ 

Phytosanitary or 

Technical Barrier to 

Trade issues and 

trade regulations 

( $ billion) 

$ 4.10 $ 3.70 $ 3.80 $ 6.40 $ 3.90 $ 3.90 

Goal #2: Resource Conservation, Restoration, and Resiliency 

A healthy and prosperous America relies on the health of our natural resources, and particularly 

our forests and agricultural working lands. Forests and other lands absorb approximately 

14 percent of U.S. carbon dioxide emissions. To help improve the health of our natural 

resources, USDA has worked to increase the annual acres of public and private forest lands 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

1 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

restored or enhanced and to increase the percentage of national forests and grasslands in 

compliance with a climate change adaption and mitigation strategy. 

Exhibit 2: USDA Strategic Plan Goal #2: Resource Conservations, Restoration, and Resiliency Key 

Performance Indicators 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Conservation Reserve 

Program (CRP) 

restored wetland 

acreage (millions of 

acres) 

2.23 2.29 2.09 2.05 1.9 1.9 

Conservation 

Technical Assistance 

(CTA) land with 

conservation applied 

to improve water 

quality (millions of 

acres) 

N/A N/A N/A 17.2 17.2 17.2 

CTA cropland with 

conservation applied 

to improve soil 

quality (millions of 

acres) 

N/A N/A N/A 6.8 6.8 6.8 

CTA grazing and 

forest land with 

conservation applied 

to protect and 

improve the resource 

base (millions of 

acres) 

N/A N/A N/A 12.8 12.8 12.8 

Environmental 

Quality Incentives 

Program (EQIP) land 

with conservation 

applied to improve 

water quality 

(millions of acres) 

N/A N/A N/A 10.5 10.5 10.5 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

EQIP cropland with 

conservation applied 

to improve soil 

quality (millions of 

acres) 

N/A N/A N/A 3.4 3.4 3.4 

EQIP grazing land and 

forest land with 

conservation applied 

to protect and 

improve the resource 

base (millions of 

acres) 

N/A N/A N/A 13.7 13.7 13.7 

EQIP non-Federal 

land with 

conservation applied 

to improve fish and 

wildlife habitat 

quality (millions of 

acres) 

N/A N/A N/A 1.7 1.7 1.7 

Annual acres of 

public and private 

forest lands restored 

or enhanced (millions 

of acres) 

2.624 2.57 2.533 2.9 2.9 2.9 

Volume of timber 

sold (billion board 

feet) 

2.533 2.644 2.61 2.8 2.9 2.9 

Percentage of 

National Forests and 

Grasslands in 

compliance with a 

climate change 

adaptation and 

mitigation strategy 

16% 36% 49% 60% 100% 100%
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

1 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Percentage of 

National Forests and 

Grassland 

watersheds in 

properly (class 1 

watersheds) 

functioning condition 

52% 52% 52% 52% 53% 53%

Acres of Wildland 

Urban Interface 

hazardous fuels 

treated to reduce the 

risk of catastrophic 

wildfire (millions of 

acres) 

1.612 1.867 1.737 1.725 1.725 1.725 

Goal #3: Increased Exports and Global Food Security 

Working with other Federal partners, USDA is working toward reducing global food insecurity 

and increasing agriculture-led economic growth in developing countries. The Department 

continues to seek new trade opportunities for American agricultural producers and is also 

striving to bring products with new and emerging technologies to the worldwide marketplace. In 

addition, USDA is focused on improving efforts to reduce food insecurity across the world by 

providing technical assistance to people in food-insecure countries. 

Exhibit 3: USDA Strategic Plan Goal #3: Increased Exports and Global Food Security 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Cumulative number 

of biotechnology 

products deregulated 

by USDA based on 

scientific 

determinations that 

they do not pose a 

plant pest risk to 

agriculture 

87 93 102 107 112 112
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 3

Goal #4: Safe and Nutritious Food 

A plentiful supply of safe and nutritious food is essential to the healthy development of every 

child in America and to the well-being and productivity of every family. In FY 2014, USDA saw 

improvements in the reduction of foodborne Salmonella illnesses that are associated with 

USDA’s Food Safety and Inspection Service-regulated products—meat, poultry, and processed 

egg products. Over the past 3 years, USDA’s food assistance programs have contributed to a 

steady decrease in the prevalence of food insecurity in households with children. 

Exhibit 4: USDA Strategic Plan Goal #4: Safe and Nutritious Food 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Prevalence of food 

insecurity in 

households with 

children 

20.6% 20% 19.7% 19.4% 19.4% 19.4% 

Annual percentage 

of eligible people 

participating in 

SNAP 

79% 79% 79% 79.2% 79.4% 79.4% 

SNAP payment 

accuracy rate 

96.2% 96.58% 96.52% 96.2% 96.3% 96.3% 

SNAP benefits 

redeemed at 

farmers markets and 

direct marketing 

farmers annually 

(millions) 

$ 11.70 $ 16.60 $ 21.20 $ 22.30 $ 23.50 $ 23.50 

Annual percentage 

of eligible people 

participating in the 

National School 

Lunch Program 

58% 57.6% 55.6% 56.4% 57.2% 57.2% 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

1 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Annual percentage 

of children 

participating in the 

free/reduced price 

school lunch 

program that 

participate in 

summer feeding 

programs 

15.5% 15.5% 16% 16.3% 16.6% 17%

Increase percentage 

of broiler plants 

passing the carcass 

Salmonella

Verification Testing 

Standard 

89% 90% 90% 92% 94% 94%

Percentage of 

establishments with 

a functional food 

defense plan 

(annual measure) 

75% 77% 83% 84% 90% 90%

Total illnesses from 

all FSIS products 491,353 479,621 427,171 384,362 373,955 374,000 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 5

Goal #5: Departmental Modernization 

Through its Blueprint for Stronger Service, USDA is building and implementing a modern 

workforce, and exercising good stewardship of the resources entrusted to the Department. During 

FY 2014, USDA implemented policies to achieve a more efficient use of funds through 

decreases in the amount of leased office and warehouse space controlled by USDA and to build a 

more effective workforce through process improvements and increased use of telework. 

Exhibit 5: USDA Strategic Plan Goal #5: Departmental Modernization 

Fiscal Year 

2011 

Actual 

2012 

Actual 

2013 

Actual 

2014 

Actual 

2015 

Target 

2015 

Preliminary 

Number of 

employees 

participating in core 

telework 

8,756 7,926 13,937 16,123 18,982 18,982 

Amount of leased 

office and warehouse 

space controlled by 

USDA (millions of 

square feet) 

26.3 26 25.6 24.3 23.6 23.6 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

1 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Future Demands, Risks, Uncertainties, Events, 

Conditions, and Trends 

Farmers and ranchers operate in highly competitive markets, both domestically and 

internationally. Rapid shifts in consumer demands associated with quality, convenience, taste, 

and nutrition dictate that farming, ranching, and marketing infrastructures become more fluid and 

responsive. National security is a significant, ongoing priority for the U.S. Department of 

Agriculture (USDA). USDA is working with the U.S. Department of Homeland Security to help 

protect agriculture from intentional and accidental acts that might impact America’s food supply 

or natural resources. 

External factors that challenge USDA’s ability to achieve its goals 

include the following: 

 Weather-related hardships, including disasters related to the increasing intensity and 

duration of extreme weather and climate change, both domestically and internationally; 

 The risk of catastrophic fire, depending on weather, drought conditions, and the expanding 

number of communities in the wildland-urban interface; 

 Non weather-related hardships and other uncontrollable events, both domestically and 

internationally; 

 Domestic and international macroeconomic factors, including consumer purchasing power, 

the strength of the U.S. dollar, and political changes abroad that could impact domestic and 

global markets greatly at any time; 

 Sharp fluctuations in farm prices, interest rates, and unemployment that could impact the 

ability of farmers, other rural residents, communities, and businesses to qualify for credit 

and manage debt; 

 The impact of future economic conditions and actions by a variety of Federal, State, and 

local Governments that could influence the sustainability of rural infrastructure; 

 The increased movement of people and goods, which provides the opportunity for crop and 

animal pests and diseases to move quickly across domestic and international boundaries; 

and 

 Potential exposure to hazardous substances, which may threaten human health and the 

environment, and the ability of the public and private sectors to collaborate effectively on 

food safety, security, and related emergency preparedness efforts. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 7

Analysis of Financial Information and Highlights 

Financial Statement Highlights 

BUDGETARY RESOURCES 

The U.S. Department of Agriculture (USDA) receives most of its funding from appropriations 

authorized by Congress and administered by the U.S. Department of the Treasury. Total 

budgetary resources consist of the balance at the beginning of the year, appropriations received 

during the year, spending authority from offsetting collections, and other budgetary resources. 

The following exhibit presents fiscal year (FY) 2015 total budgetary resources by mission area. 

Exhibit 6: Total Budgetary Resources by Mission Area ($ billions) 

16% 58%

14%

7%

2%

2% 1%

0%

Food Nutrition and Consumer Services - $140

Rural Development - $40

Farm and Foreign Agriculture Services - $34

Natural Resources and Environment - $17

Research, Education and Economics - $4

Marketing and Regulatory Programs - $4

Departmental Offices - $2

Food Safety - $1

Total budgetary resources were $242 billion for FY 2015 compared to $235 billion in FY 2014, 

an increase of $7 billion, or 3 percent. 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

1 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

The following exhibit presents significant changes in total budgetary resources by mission area. 

Exhibit 7: Significant Changes in Total Budgetary Resources by Mission Area ($ billions) 

-$8

-$6

-$4

-$2

$0

$2

$4

$6

Farm and Foreign

Agriculture

Services

Marketing and

Regulatory

Programs

Natural

Resources And

Environment

Food Nutrition

and Consumer

Services

Rural

Development

-$7

$1 $1

$6 $6

OBLIGATIONS INCURRED 

Obligations incurred were $178 billion for FY 2015, compared to $180 billion in FY 2014, a 

decrease of $2 billion, or -1 percent. The following exhibit presents significant changes in 

obligations incurred. 

Exhibit 8: Significant Changes in Obligations Incurred ($ billions) 

-$6

-$5

-$4

-$3

-$2

-$1

$0

$1

$2

$3

Commodity

Credit

Corporation

Risk

Management

Agency

Food and

Nutrition

Service

Animal and

Plant Health

Inspection

Service Forest Service

Rural

Development

-$6

-$2

$1 $1 $1

$3
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 9

There were decreases at Commodity Credit Coporation (CCC) due to the repeal of the Direct and 

Counter Cyclical and Average Crop Revenue Election, and at Risk Management Agency (RMA) 

for Crop Insurance.There were increases at Food and Nutrition Service (FNS) for Supplemental 

Nutrition Assistance (SNAP) and Women, Infants, and Children (WIC); at Animal and Plant 

Health Inspection Service (APHIS) for the Highly Pathogenic Avian Influenza (HPAI) incident; 

at Forest Service due to the severity of the fire season, and at Rural Development (RD) for Rural 

Electric and Telecommunications, Rural Community Facility, and Guaranteed Rural Business.

NET OUTLAYS 

Net Outlays were $138 billion for FY 2015, compared to $144 billion in FY 2014, a decrease of 

$6 billion or -4 percent. The following exhibit presents significant changes in net outlays. 

Exhibit 9: Significant Changes in Net Outlays ($ billions) 

-$5

-$4

-$3

-$2

-$1

$0

$1

$2

Commodity

Credit

Corporation

Rural

Development

Risk

Management

Agency

Animal and

Plant Health

Inspection

Service

Food and

Nutrition Service

-$5

-$3

-$1

$1

$2

There were decreases at CCC due to the repeal of the Direct and Counter Cyclical and Average 

Crop Revenue Election; at RD for Rural Electric and Telecommunications, and at RMA for Crop 

Insurance.There were increases at APHIS for the HPAI incident, and at FNS for SNAP and WIC. 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

2 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Balance Sheet 

TOTAL ASSETS 

Total assets for FY 2015 were $217 billion, compared to $208 billion for FY 2014, an increase 

of $9 billion, or 4 percent. The following exhibit presents FY 2015 total assets.

Exhibit 10: Total Assets ($ billions) 

46% 52%

1% 1%

Fund Balance with Treasury - $113

Direct Loan and Loan Guarantees, Net - $99

General Property, Plant and Equipment, Net - $3

Accounts Receivable, Net - $2

Direct Loan and Loan Guarantees, Net, is one of the largest assets on the USDA Balance Sheet. 

RD offers both direct and guaranteed loan products for rural housing and rural business 

infrastructure. These products represent 88 percent of the total Department loan programs. Loan 

programs administered by FSA represent 9 percent of the total. FSA supports farmers who are 

temporarily unable to obtain private, commercial credit. The remaining 3 percent represents 

commodity loans and credit programs administered by the CCC. These loans are used to improve 

economic stability and provide an adequate supply of agricultural commodities. CCC credit 

programs provide international food assistance, expand international markets, and provide 

domestic low cost financing to protect farm income and prices. The following exhibit presents 

significant changes in total assets. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 1

Exhibit 11: Significant Changes in Assets ($ billions) 

-2

0

2

4

6

8

10

12

Direct Loan and Loan Guarantees, Net Fund Balance with Treasury

-$2

$11

Total Liabilities

Total liabilities for FY 2015 were $161 billion, compared to $159 billion for FY 2014, an 

increase of $2 billion, or 1 percent. The following exhibit presents FY 2015 total liabilities. 

Exhibit 12: Total Liabilities ($ billions) 

71%

20%

4%

3%

1%

Debt $114 1%

Other $33

Loan Guarantee Liability $6

Benefits Due and Payable $5

Accounts Payable $2

Federal Employee and Veteran $1

Benefits

Debt is the single largest liability on USDA’s balance sheet. It represents amounts owed 

primarily to Treasury by CCC, FSA, and RD. For CCC, the debt primarily represents financing 

for price support, export credit guarantees, disaster programs and loans related to farm storage 

facilities. For FSA, the debt primarily represents financing to support direct and guaranteed loan 

programs, with the majority supporting operating, ownership, and emergency loans. For RD, the 

debt primarily represents financing to support electric and housing loan programs. The following 

exhibit presents significant changes in total liabilities.
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

2 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Exhibit 13: Significant Changes in Total Liabilities ($ billions) 

$0

$1

$2

$3

$4

$5

$6

Other Liabilities Benefits Due and Payable

$1 $1

Net Cost of Operations 

Net cost of operations for FY 2015 was $143 billion, compared to $145 billion for FY 2014, a 

decrease of $2 billion, or -2 percent. The following exhibit presents FY 2015 net cost of 

operations by strategic goal. 

Exhibit 14: Net Cost of Operations by Strategic Goals ($ billions) 

14%

9%

1%

75%

1%

Goal 1 - $20

Goal 2 - $12

Goal 3 - $2

Goal 4 - $107

Goal 5- $1
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3

Goal 1: Assist Rural Communities to Create Prosperity so They are Self-Sustaining, 

Repopulating, and Economically Thriving. 

Goal 2: Ensure Our National Forests and Private Working Lands are Conserved, Restored, and 

Made More Resilient to Climate Change, While Enhancing Our Water Resources. 

Goal 3: Help America Promote Agricultural Production and Biotechnology Exports as America 

Works to Increase Food Security. 

Goal 4: Ensure That All of America’s Children Have Access to Safe, Nutritious, and Balanced 

Meals. 

Goal 5: Create a USDA for the 21st Century That Is High Performing, Efficient, and Adaptable. 

The following exhibit presents significant changes in net cost of operations.

Exhibit 15: Significant Changes in Net Cost of Operations ($ billions) 

-$4

-$3

-$2

-$1

$0

$1

Commodity Credit

Corporation Forest Service

Animal and Plant Health

Inspection Service

-$4

$1 $1

There was a decrease at CCC for Supplemental Agricultural Disaster Assistance. There were 

increases at Forest Service due to the severity of the fire season and reauthorization of the Secure 

Rural Schools Act, and at APHIS for the HPAI incident. 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S 

2 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Stewardship Investments 

Stewardship investments are substantial investments made by the Federal Government for the 

benefit of the Nation but are not physical assets owned by the Federal Government. When 

incurred, they are treated as expenses in determining the net cost of operations. However, these 

items merit special treatment so that users of Federal financial reports know the extent of 

investments that are made for long-term benefit. Such investments are measured in terms of 

expenses incurred for non-Federal physical property, human capital, and research and 

development. The following exhibit presents a comparison of stewardship investments.

Exhibit 16: Comparison of Stewardship Investments ($ millions) 

$0

$500

$1,000

$1,500

$2,000

$2,500

Non-Federal Physical

Property Human Capital

Research and

Development

$55 

$675 

$2,260 

$44 

$612 

$2,202 

FY2015

FY2014
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Statement of Assurance

The U.S. Department of Agriculture (USDA) is providing qualified 

assurance that USDA’s systems of internal control comply with the Federal 

Managers’ Financial Integrity Act (FMFIA) objectives. USDA’s systems of 

internal control meet the objectives of the FMFIA and the Federal Financial 

Management Improvement Act (FFMIA), with the exception of two material 

weaknesses in internal control, one financial system nonconformance, and 

noncompliance with two laws and regulations. Management is providing 

reasonable assurance that the internal controls over operations are effective. The details of the 

exceptions are provided in the FMFIA, FFMIA, and Summary of Financial Statement Audit and 

Management Assurances sections of this report.

USDA assessed its financial management systems and internal controls over the effectiveness 

and efficiency of operations and compliance with applicable laws and regulations as of 

September 30, 2015, and financial reporting as of June 30, 2015. The assessment included the 

safeguarding of assets and compliance with applicable laws and regulations, in accordance with 

the requirements of Office of Management and Budget (OMB) Circular No. A-123, 

Management’s Responsibility for Internal Control.

In fiscal year (FY) 2013, the Forest Service (FS) identified an Antideficiency Act (ADA) 

violation under 31 U.S.C. §1517(a). The Energy Policy Act of 2005, Public Law 109-58, 

required the Secretary of the Interior to create a pilot project to improve Federal permit 

coordination. The Bureau of Land Management (BLM) transferred funds to FS to participate in 

the pilot. FS reported obligations/expenditures in excess of the balance of the fund transferred 

from the BLM as of December 31, 2012. FS spent $6,781.90 in excess of the $72,000.00 carried 

over from FY 2012. FS provided written notification to Congress and the President for the 

noncompliance violation, and this has been resolved as of April 1, 2015.

In FY 2015, FS identified an ADA violation for FY 1990 through FY 2009 under 

31 U.S.C. §1341(a)(1). The violation related to the agency's employment in California of two 

citizens of Palau. This use of Federal appropriations violated a general provision of 

appropriations acts from FY 1990–2009, which prohibited the use of appropriations to employ 

non-U.S. citizens. This ADA violation is in the process of being reported to Congress and 

the President. 

The Farm Service Agency (FSA) identified an ADA violation under 31 U.S.C. §1517(a). 

In September 2013, OMB approved an apportionment request for $1,000,000 from FSA for the 

purchase of guaranteed loans in FY 2014. On February 25, 2014, FSA made several loan 

purchases, obligating $1,302,823.57, thus exceeding the apportionment for such purchases. 

On March 7, 2014, FSA requested another apportionment to cover the deficiency. OMB 

approved the request and apportioned funds on March 31, 2014. FSA’s Farm Loan Operations 

Office is taking corrective actions to ensure future payments are obligated only within approved 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S

2 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

apportionment limits. The ADA violation is in the process of being reported to Congress and 

the President. 

The Office of Advocacy and Outreach (OAO) identified an ADA violation for FY 2011 under 

31 U.S.C. §1517(a). The Food, Conservation, and Energy Act of 2008, Public Law 110-234 

(Farm Bill of 2008) permitted OAO to award up to $19,000,000 in FY 2011 for Outreach and 

Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers (Section 2501) 

Grants. OAO exceeded the amount available. The ADA violation is in the process of being 

reported to Congress and the President. 

In FY 2015, a potential ADA violation may have occurred within OAO associated with the 

Strikeforce Initiative funded through transfers from USDA agencies for FY 2010 and 2011. 

OAO is researching any potential violations.

The Foreign Agricultural Service (FAS) identified a potential violation of the ADA that may 

have occurred in its FY 2009 appropriation. FAS has completed its analyses and identified the 

causes of this potential violation, and has requested a determination on the status of this potential 

ADA violation from the Office of the General Counsel.

Finally, USDA’s Office of Inspector General investigated the Office of the Assistant Secretary 

for Civil Rights (OASCR) to determine whether (1) expenditures were properly supported by 

documentation; (2) unauthorized commitments were properly ratified by the Office of 

Procurement and Property Management; and (3) there was adherence to Federal legal authorities 

and Departmental regulations. OASCR will take appropriate action to make the determination of 

any potential ADA violations.

No other material weaknesses were found in the design or operation of the internal control over 

(1) the effectiveness and efficiency of operations and compliance with applicable laws and 

regulations as of September 30, 2015, and (2) financial reporting as of June 30, 2015.

Thomas J. Vilsack

Secretary of Agriculture

February 12, 2016 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

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Federal Managers’ Financial Integrity Act Report 

on Management Control 

Background 

The Federal Managers’ Financial Integrity Act (FMFIA) requires ongoing evaluations of internal 

controls and financial management systems. These evaluations lead to an annual statement of 

assurance that: 

 Obligations and costs comply with applicable laws and regulations; 

 Federal assets are safeguarded against fraud, waste, abuse, and mismanagement; 

 Transactions are accounted for and properly recorded; and 

 Financial management systems conform to standards, principles, and other requirements to 

ensure that Federal managers have timely, relevant, and consistent financial information for 

decision-making purposes. 

The U.S. Department of Agriculture (USDA) annually evaluates its internal controls in 

accordance with Office of Management and Budget (OMB) Circular No. A-123, Management’s 

Responsibility for Internal Control. 

The Department operates a comprehensive internal control program. This program ensures 

compliance with the requirements of FMFIA and other laws, and OMB Circular No. A-123, 

Appendices A through D. All USDA managers must ensure that their programs operate 

efficiently and effectively, and comply with relevant laws. They must also ensure that financial 

management systems conform to applicable laws, standards, principles, and related requirements. 

In conjunction with the Office of Inspector General and the Government Accountability Office, 

USDA’s management works decisively to determine the root causes of its material weaknesses 

so that it can direct resources to focus on their remediation. 

USDA remains committed to reducing and eliminating the risks associated with its deficiencies. 

It also strives to efficiently and effectively operate its programs in compliance with FMFIA and 

other applicable laws and regulations. 
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Fiscal Year 2015 Results 

The Department has two existing material weaknesses in internal controls over financial 

reporting; for Information Technology, and Financial Management. The material weakness for 

Financial Management is comprised of Overall Financial Management (NRCS), Estimated 

Losses on Insurance Claims Calculations (RMA/FCIC), Credit Reform Subsidy Model 

Reestimates (RD), and Commodity Credit Corporation (CCC). USDA also has one existing 

system nonconformance related to Funds Control Management within the CCC, which will be 

resolved by the end of FY 2017.

The Food and Nutrition Service, FS, FSA, and NRCS are noncompliant with laws and 

regulations related to the Improper Payments Information Act of 2002, as amended by the 

Improper Payments Elimination and Recovery Act of 2010 and the Improper Payments 

Elimination and Recovery Improvement Act of 2012. 

The Secretary’s Statement of Assurance provides qualified assurance that USDA’s system of 

internal control complies with FMFIA objectives. For additional details on the results reported in 

USDA’s Consolidated Financial Statements Audit Report, see the Summary of Financial 

Statement Audit and Management Assurances section of this report. 

Summary of Outstanding Material Weaknesses 

The following exhibit provides FY 2015 accomplishments and FY 2016 planned actions toward 

resolving the outstanding material weaknesses. 

Exhibit 17: Summary of Outstanding Material Weaknesses 

1. USDA Information Technology (IT) 

Material Weaknesses 

Existing 

Pervasive internal control design and operating effectiveness 

deficiencies occurred in two areas: logical access control/personnel 

security and configuration management. These deficiencies 

represent an overall IT material weakness. (Department) 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

Office of the Chief Information Officer 

(OCIO): 

Transitioned Web applications from eAuth 

1.0 to eAuth 2.0: 

 Agencies created Plans of Actions and 

Milestones (POAMs) for each web 

application not migrated after September 

OCIO will: 

 Continue to monitor POA&Ms identified as 

part of the IT Material Weakness. Track and 

report on progress weekly to USDA 

leadership, and ensure proper and full 

remediation of weaknesses across the 

USDA enterprise; 
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1. USDA Information Technology (IT) 

Material Weaknesses 

Existing 

Pervasive internal control design and operating effectiveness 

deficiencies occurred in two areas: logical access control/personnel 

security and configuration management. These deficiencies 

represent an overall IT material weakness. (Department) 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

26, 2014. All eAuth 1.0 applications were 

either migrated or decommissioned by 

June 15, 2015. The eAuth 1.0 platform 

was decommissioned on that date; and 

 Continued decommissioning effort of 

eAuth 1.0 as Web applications are 

migrated to the new environment; 

 Continued to monitor POA&Ms identified 

as part of the IT Material Weakness. 

Tracked and reported on progress weekly 

to USDA leadership, and ensured proper 

and full remediation of weaknesses 

across the USDA enterprise; 

 Continued to perform the Operational 

Security Assessment project to analyze 

component agencies’ information 

architecture and related processes to 

develop a threat profile; 

 Performed penetration testing of 

agencies that were assessed in FY 2013 to 

evaluate any changes in their security 

posture resulting from assessment 

findings and recommendations; and 

 Enforced mandatory use of PIV/HSPD12 

credentials for logical access for 

privileged and non-privileged users by 

implementing technical mandatory 

controls. Met Presidential Cross-Agency 

Prioritization (CAP) goals of 85% PIV 

compliance for all users by Sept 30, 2015. 

As of September 30, 2015, USDA was 

at85.06% compliant for non-privileged 

users and 88.9% for privileged users. 

 Continue to perform security assessments to 

analyze component agencies’ information 

architecture and related processesto

develop a threat profile; and 

 Continue to perform penetration testing: 

OCIO expects the the U.S. Department of 

Homeland Security (DHS) to continue their 

scans under the Binding Operational 

Directive, and the Agricultural Security 

Operation Center plans to continue 

integration with the Department of 

Homeland Security Continuous Diagnostics 

Mitigation program. 

 Continue to enhance centralized 

configuration management monitoring 

tools (currently Tivoli Endpoint 

Manager/BigFix) to monitor agency assets 

running specific operating systems; 

 Formalizing its internal monitoring 

processes into a Standard Operating 

Procedure; 

 Waiting on the finalization of the 

Department of Homeland Security’s 

Continuous Diagnostics and Monitoring 

(CDM) which will further enhance OCIO’s 

configuration management oversight 

function and timely coordination with 

sub-components to ensure policy 

compliance; 

 Continue to further enforce PIV/HSPD12 

mandatory compliance for privileged and 

non-privileged users to meet published 

FY 16 CAP and FISMA goals; and 
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3 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

1. USDA Information Technology (IT) 

Material Weaknesses 

Existing 

Pervasive internal control design and operating effectiveness 

deficiencies occurred in two areas: logical access control/personnel 

security and configuration management. These deficiencies 

represent an overall IT material weakness. (Department) 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

 Develop additional implementation 

guidance for multi-factor authentication for 

network and application access. 

2. Financial Management — Overall Financial Management 

Material Weakness 

Existing 

NRCS was unable to provide sufficient evidential matter in support 

of certain transactions and account balances. 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

Natural Resources Conservation Service 

(NRCS): 

 Worked with the centralized transaction 

processing teams to ensure that their 

procedures for entering accruals include 

referencing an obligation, where 

appropriate. 

 Developed a process to incorporate 

referenced accruals in the obligation 

balances. 

 Updated standard procedures and 

guidance on supporting documentation 

for journal entries and management’s 

review and approval of journal entries. 

NRCS will: 

 Review the results of supporting obligation 

balances that include referenced accruals. 

 Develop and issue formal instruction for 

entering accruals that reference an 

obligation. 

 Reconcile feeder systems (financial 

assistance, contracts, travel, etc.) with the 

financial system. 

 Engage with an external firm to perform 

100% review of all direct entry documents 

and any feeder system documents where 

reconciliation is not practical. 
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2. Financial Management — Estimated Losses on Insurance Claims Calculations 

Material Weaknesses 

Existing 

Although management conducted detailed reviews of the projected 

loss calculations for estimating losses on insurance claims, the 

reviews did not detect certain errors in the program code used to 

calculate the projection. As a result, FCIC/RMA’s financial 

statements were materially misstated and required adjustments. 

(Risk Management Agency/Federal Crop Insurance Corporation, or 

RMA/FCIC) 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

RMA/FCIC: 

 Implemented procedures to assess the key 

risks in the indemnity projection model 

and ensure the key areas were 

subsequently reviewed by FCIC/RMA 

management; 

 Retained documentation to provide a 

detailed audit trail of all relevant 

computations and related data files used; 

and 

 Performed additional risk assessments on 

the indemnity calculation aimed at the 

processes that have the greater risk of 

errors in the calculations. 

RMA/FCIC will: 

 Develop control procedures over the 

program code used to develop significant 

year-end estimates to ensure that all 

variables are input correctly and 

calculating properly. 
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2. Financial Management — Credit Reform Subsidy Model Reestimates 

Material Weaknesses 

New 

Rural Development needs to implement an econometric credit 

reform subsidy model for the Guaranteed Single Family Housing 

(GSFH) program and develop a formal review and evaluation 

process to assess the results of the credit reform subsidy model reestimates. Rural Development continues to work with OMB on 

completion of the GSFH econometric model and Rural 

Development will obtain OMB approval before implementing. 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

RD: 

 Performed an analysis of the Liability for 

Loan Guarantee Account for the 

Guaranteed Single Family Housing 

Program. Recorded an accounting 

adjustment to more accurately reflect the 

account balance based on future portfolio 

performance. 

 Performed an analysis of the Prepayments 

on the Direct Water and Waste Program. 

Recorded an accounting adjustment to 

more accurately reflect the account 

balance based on future portfolio 

performance. 

RD will: 

 Continue developing an econometric 

model for the GSFH program; 

 Continue writing model documentation 

and perform independent review of the 

model; 

 Execute the FY 2017 formulation estimate 

and submit results for OMB to review 

once economic assumptions are received 

from OMB; and 

 Submit documentation to OMB for review 

upon completion of documentation and 

review. 

2. Financial Management – Commodity Credit Corporation 

Material Weaknesses 

New 

CCC needs to address material weaknesses identified in the 

following areas: Financial Reporting, Accounting for Parent/Child 

Transactions, and Accounting for Budgetary Transactions. 

Overall Estimated 

Completion Date FY 2016 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

CCC will: 

 Develop corrective action plans to address 

the areas identified. 
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Summary of Outstanding System Nonconformance 

The funds control management nonconformance is also reported as a system noncompliance, and 

included in the FFMIA Report on Financial Management Systems (Exhibit 21). The weakness 

involves component agency-specific deficiencies for CCC.

The following exhibit provides FY 2015 accomplishments and FY 2016 planned actions toward 

resolving the Department’s outstanding system nonconformances.

Exhibit 18: Summary of Outstanding System Nonconformance 

1. Funds Control Management 

System Nonconformance 

Existing 

System improvements needed in recording obligations at the 

transactional level. (Commodity Credit Corporation, or CCC) 

Noncompliance with Federal Financial Management 

Improvement Act of 1996. (CCC) 

Overall Estimated 

Completion Date FY 2017 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

To address the Material Weaknesses: 

Internal Controls Over Financial Reporting, 

Commodity Credit Corporation (CCC) has 

implemented several business process and 

system improvements to record, track, and 

report obligations at the detail transaction 

level. 

1. Implemented the new Common 

Obligation Framework (COF) shared 

service and application, which is a major 

step towards mitigating CCC’s material 

weakness. A phased implementation has 

been in progress during FY 2015 to bring 

FSA Program and Financial Management 

applications into full compliance with 

OMB Circular, A-11, Preparation, 

Submission, & Execution of the Budget 

and OMB Circular A-123, Appendix D, 

Compliance with the Federal Financial 

Management Improvement Act of 1996. 

COF provides an automated real time 

funds control environment where funds 

availability is checked prior to obligation 

During FY2016, FSA will continue to modernize 

program and financial systems to eliminate the 

standing material weakness and become 

substantially compliant with the Funds 

Control/Obligation requirements related to 

obligations at the transactional level. 

The following releases were scheduled and 

completed for deployment during FY 2016: 

1. The new Agriculture Risk Coverage 

(ARC)/Price Loss Coverage (PLC) software 

that will be integrated with COF and obligate 

contracts at a transactional level and 

properly sequester funds—Released on 

October 23, 2015. 

2. Remaining CLPS Phase to be implemented—

Warehouse stored Rice and Peanuts—

November 2015. 

3.Direct Loan System (DLS)/Farm Storage 

Facility Loans (FSFL) Phase 2 replaces the 

CORE Budget Tables as a funds control 

mechanism and will integrate with COF—

March 2016. 
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1. Funds Control Management 

System Nonconformance 

Existing 

System improvements needed in recording obligations at the 

transactional level. (Commodity Credit Corporation, or CCC) 

Noncompliance with Federal Financial Management 

Improvement Act of 1996. (CCC) 

Overall Estimated 

Completion Date FY 2017 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

at the detail transaction level. The system 

will ensure obligations do not exceed 

apportioned amounts, allotments, 

sub-allotments, and other administrative 

subdivisions, and it will record obligations 

at the transaction level in accordance to 

the rules defined in the USSGL guidance. 

2. Commodity Loan Processing System 

(CLPS) Phase 1 (all commodities except 

cotton, rice and peanuts) was deployed 

July 1, 2015. The CLPS is the replacement 

for the legacy Automated Price Support 

System (APSS) which resides on the 

System 36/AS400 platform. CLPS uses the 

new Common Obligation Framework 

shared service that provides an 

automated real time funds control 

process where funds availability is 

checked prior to obligation at the detail 

transactional level. Warehouse and Farm 

stored cotton was placed into production 

for CPLS in September, 2015. 

4.Margin Dairy Protection Program (MPP)—

April 2016. 

5.Move existing programs CRP, ECP, EFCRP and 

FSFL to COF at the transactional level, 

including sequester of funds in FY16. 
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Compliance with Laws and Regulations

USDA worked diligently during FY 2015 to resolve a deficiency of noncompliance with laws 

and regulations reported by the Forest Service (FS) on April 1, 2015. FS reported an ADA under 

31 U.S.C. § 1571(a) and the ADA violation has been reported to Congress and the President.

In FY 2014, the FS reported an ADA violation under 31 U.S.C. §1517(a) identified in FY 2013. 

The violation related to obligations/expenditures in excess of the balance of the fund transferred 

to FS from the Bureau of Land Management. Reports indicated that FS spent $6,781.90 in excess 

of the $72,000 carried over from FY 2012. FS provided written notification to Congress and the 

President for the noncompliance violation and the violation was resolved as of April 1, 2015. 

In FY 2015, FS identified an ADA violation for FY 1990 through FY 2009 under 31 U.S.C. 

§1341(a)(1). The violation occurred in California and was related to the agency's employment in 

California of two citizens of Palau. This use of Federal appropriations violated a general 

provision of appropriations acts from FY 1990–2009, which prohibited the use of appropriations 

to employ non-U.S. citizens. Violation of the general prohibition meant a violation of 31 U.S.C. 

§ 1341. In FY 2010, Congress added the following language to the general provision: “Provided 

further, That this section shall not apply to any person who is an officer or employee of the 

Government of the United States on the date of enactment of this Act.” This proviso applies to 

the Forest Service employees referenced in the reported violation. It has been included in all 

subsequent appropriations acts, including the current act for FY 2015. Therefore, payment of the 

employees with appropriated funds has not violated the general provision since FY 2010. In 

addition, since FY 2010, the general provision has allowed for the Federal employment of "a 

person who is lawfully admitted for permanent residence and is seeking citizenship as outlined in 

8 U.S.C. 1324b(a)(3)(B)." The ADA violation is in the process of being reported to Congress and 

the President.

The Farm Service Agency (FSA) identified an ADA violation under 31 U.S.C. §1517(a). In 

September 2013, the OMB approved an apportionment request for $1,000,000.00 from FSA for 

the purchase of guaranteed loans in FY 2014. On February 25, 2014, FSA made several loan 

purchases, obligating $1,302,823.57, thus exceeding the apportionment for such purchases. On 

March 7, 2014, FSA requested another apportionment to cover the deficiency. OMB approved 

the request and apportioned funds on March 31, 2014. FSA’s Farm Loan Operations Office is 

taking corrective action to ensure future payments are obligated only within approved 

apportionment limits. This ADA violation is in the process of being reported to Congress and the 

President.

The Office of Advocacy and Outreach (OAO) identified an ADA violation for FY 2011 under 

31 U.S.C. §1517(a). The Food, Conservation, and Energy Act of 2008, Public Law 110-234

(Farm Bill of 2008) permitted OAO to award up to $19,000,000.00 in FY 2011 for Outreach and 

Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers (Section 2501) 

Grants. OAO exceeded the amount available. This ADA violation is in the process of being 
S E C T I O N I | M A N A G E M EN T ’ S D I S C U S S I O N A N D A N A L Y S I S

3 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

reported to Congress and the President. OAO could potentially have another ADA violation

resulting from the Strikeforce Initiative, which is currently under review.

The Foreign Agricultural Service (FAS) identified a potential violation of the ADA that may 

have occurred in its FY 2009 appropriation. FAS has completed its analyses and identified the 

causes of this potential violation, and has requested the Office of the General Counsel for a 

determination on the status of this potential ADA violation.

USDA’s Office of Inspector General investigated the Office of the Assistant Secretary for Civil 

Rights (OASCR) to determine whether (1) expenditures were properly supported by

documentation; (2) unauthorized commitments were properly ratified by the Office of 

Procurement and Property Management; and (3) there was adherence to Federal legal authorities 

and Departmental regulations. OASCR will take appropriate action to make the determination of 

any potential ADA violations.

The following exhibit provides a summary of agency programs not compliant with the Improper 

Payments Act.
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Exhibit 19: Outstanding Initiative to Achieve Compliance 

Initiative Section of Noncompliance Agency/Program 

Target 

Completion 

Date

Improper Payments Elimination and Recovery Act of 2010 (IPERA) 

Publish improper payment 

estimates for all high-risk 

programs and activities 

Food and Nutrition Service 

(FNS)/Child and Adult Care 

Food Program 

12/2020 

Publish and meet annual reduction 

targets for each program assessed 

to be at risk and measured for 

improper payments 

Farm Service Agency (FSA)/ 

Livestock Forage Disaster 

Program 

11/15/2016 

Natural Resources 

Conservation Service (NRCS)/ 

Farm Security and Rural 

Investment Act Programs 

06/2016 

FNS/ National School Lunch 

Program 11/15/2016 

FNS/ Supplemental Nutrition 

Assistance Program 11/15/2016 

FNS/ Special Supplemental 

Nutrition Program for 

Women, Infants, and 

Children (WIC) 

09/2016

Forest Service/ Hurricane 

Sandy—Capital Improvement 

and Maintenance 

11/15/2016 

FSA/ Supplemental Revenue 

Assistance Program 11/15/2016 

FSA/ Non-insured Crop 

Disaster Assistance Program 11/15/2016 

Report a gross improper payment 

rate of less than 10 percent for 

each program and activity for 

which an improper payment 

estimate was obtained and 

published in the Performance and 

Accountability Report (PAR) or 

Agency Financial Report (AFR) 

FNS/ National School Lunch 

Program and School 

Breakfast Program 

12/2020 

NRCS/ Farm Security and 

Rural Investment Act 

Programs 

06/2016 
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The following exhibit provides information on the status of corrective actions already completed 

and FY 2016 planned corrective actions related to the deficiency. 

Exhibit 20: Summary of Corrective Actions/Noncompliance with Laws And Regulations 

Summary of Corrective Actions for Noncompliance with Laws and Regulations 

Improper Payments 

Elimination and Recovery 

Act of 2010 (IPERA) 

IPERA noncompliance issues (Food and Nutrition Service [FNS], 

Farm Service Agency [FSA], Natural Resources Conservation 

Service [NRCS], and Forest Service [FS]). 

Overall Estimated 

Completion Date FY 2021 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

FNS has: 

 Improved the application process for free 

and reduced-price meals in the National 

School Lunch Program and School 

Breakfast Program by making it easier to 

complete and process the application. 

Simplifying the process should reduce 

errors made by both the applicants and 

reviewers. 

 Addressed certification error in the 

National School Lunch Program and School 

Breakfast Program by increasing the 

number of SFAs and schools participating 

in the Community Eligibility Provision to 

expand direct certification. Direct 

certification reduces certification error in 

the application process by eliminating 

individual applications from the process. 

 Developed and implemented training 

programs and established professional 

certification standards for school food 

service workers in an effort to reduce 

meal claiming errors. 

 Held a series of seven regional webinars in 

FY 2014, which provided training and 

technical assistance on the Income 

Eligibility Guidance and addressed specific 

questions and circumstances raised by 

WIC State agencies. 

FNS will: 

 Publish the School Nutrition and Meal Cost 

Study, an examination of the relationships 

between school environment and school 

food service operations, nutritional quality 

of meals offered and served in school meal 

programs, plate waste, costs to produce 

reimbursable meals, student participation, 

participant characteristics, satisfaction and 

related attitudes toward the school lunch 

and breakfast programs. Primary data 

collection occurred in school year 2014–

2015. A final report is due in early 2017. 

 Publish a proposed rule by March 31, 

2016, which will strength program 

compliance by prohibiting any school, 

institution, or individual that is terminated 

from one of the Child Nutrition Programs 

and on a list of disqualified institutions 

and individuals from participating in, or 

administering any of the Child Nutrition 

Programs. 

Issue Certification Guidance by September 

30, 2016 that will provide clarification of 

policy related to income, identity and 

residency requirements in a single 

document. This will provide easy reference 

for State and local agency use. 
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FY 2015 Accomplishments: FY 2016 Planned Actions: 

 Publish a proposed rule “Providing Child 

Nutrition Program Integrity” by March 31, 

2016. This rule will provide additional 

CACFP audit funding, making additional 

monies available to State agencies for 

program improvement. 

FY 2015 Accomplishments: FY 2016 Planned Actions: 

FSA has: FSA will: 

 Issued a notice in September 2015 to field 

offices for the Livestock Forage Disaster 

Program to reinforce policies on 

acceptable evidence that grazing land is 

owned or leased by a producer, and to 

emphasize that documentation must be 

filed before the application is approved. 

 Sent a directive to all State and county 

offices reminding employees of the 

importance of second party reviews and 

verification of data, prior to finalizing any 

carry over payment activity. In addition to 

second party reviews conducted by the 

county office, all carry over payment 

activity will require the District Director’s 

initials prior to payment, thus holding 

them accountable for accurate payments. 

This action was completed in September 

2015 for SURE program. 

 Rewritten the Noninsured Crop Disaster 

Assistance Program (NAP) handbook to 

clarify policy and procedure, and to 

include new provisions authorized by the 

2014 Farm Bill. Handbook 1-NAP, Revision 

2, was issued to field offices on 

February 20, 2015. 

 Conduct Acreage Reporting Target 

Reviews to mitigate improper payments 

caused by errors related to county office 

acreage reporting activities by December 

31, 2015 for NAP. 

 Revise the NAP Basic Provisions by 

December 31, 2015. This provides 

producers with the terms and conditions 

for program participation and payment 

eligibility as well as clarifies producer 

responsibilities. 

 Develop a customer training package to 

educate producers on NAP recordkeeping 

requirements and introduce them to a 

NAP tool to collect data for production 

reporting by December 31, 2015. 
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FY 2015 Accomplishments: FY 2016 Planned Actions: 

NRCS has: NRCS will: 

 Issued National Instruction (NI) 120-354, on 

July 18, 2014, that provided States with 

guidance on how to verify compliance with 

the Data Universal Numbering System/System 

for Award Management (Sam.gov) 

requirements, as originally outlined in NI 120-

329 issued January, 2011. In particular, NI 120-

354 identified that NRCS will verify that the 

entity type has fully complied with these 

requirements prior to awarding a conservation 

program contract or agreement, and that 

failure to comply with these requirements will 

be cause for NRCS to use that determination 

as a basis for making an award to another 

eligible applicant. Additionally, for these 

applications, the records were checked, and 

the registration status confirmed for each 

payment thereafter. 

 Implemented the Enhanced Internal Controls 

Group nationwide in January 2015. The group 

was formed primarily to address improper 

payments, specifically, easement value, 

landowner eligibility, agreement validity, 

easement obligation, and payment 

documentation. As a new process was 

implemented nationally, EPD initiated biweekly question and answer sessions to 

discuss the enhanced internal controls 

process, checklists, review timing, and 

National Easement Staging Tool functions. 

 Enhanced Protracts in August, 2015 to check 

SAM.gov registrations automatically at 

obligation and payment. 

 NRCS will aggressively test for 

improper payments to determine the 

effectiveness of the corrective actions. 
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FY 2015 Accomplishments: FY 2016 Planned Actions: 

FS has: 

 Recommended an adjustment to move the 

expenditure charged on the Hurricane Sandy 

Fund CMDF to the proper fund for Trails 

Maintenance CMTL. An adjustment was 

completed by the agency for the $8,278.00 

expenditure originally billed to the Hurricane 

Sandy job code. Completed on June 30, 2015. 

FS will: 

 Washington Office Acquisition 

Management released a letter 

reminding Grants and Agreements 

Specialists of their responsibility to 

properly review invoices. To be 

completed by December 31, 2015. 

 Audit and Assurance will conduct a 

training by February 29, 2016 to 

reiterate the roles and responsibilities 

of the FS for grants and agreement 

management and recipients. 
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Federal Financial Management Improvement 

Act Report on Financial Management Systems 

Background 

The Federal Financial Management Improvement Act (FFMIA) is designed to improve financial 

and program managers’ accountability, provide better information for decision making, and 

improve the efficiency and effectiveness of Federal programs. FFMIA requires that financial 

management systems provide reliable, consistent disclosure of financial data in accordance with 

generally accepted accounting principles and standards. These systems must also comply 

substantially with (1) Federal Financial Management System (FFMS) requirements; 

(2) applicable Federal accounting standards; and (3) the U.S. Standard General Ledger (USSGL) 

at the transaction level. 

Additionally, the Federal Information Security Management Act (FISMA) requires that there be 

no significant weaknesses in information security policies, procedures, or practices to be 

substantially compliant with FFMIA. The information technology noncompliance is also 

reported as a material weakness and is included in the Federal Managers’ Financial Integrity Act 

(FMFIA) Report on Management Control (Exhibit 17). This weakness is comprised of two major 

issues: logical access controls/personnel security and configuration management. More detailed 

information on the status of corrective actions planned and to be completed to comply with 

FISMA is also provided in the Response to Management Challenges section of this report, 

Challenge 3: Information Technology Security Needs Continuing Improvement.

The following exhibit contains the outstanding initiatives to achieve compliance. 

Exhibit 21: Initiatives to Be Completed 

Outstanding Initiatives to Achieve FFMIA Compliance 

Initiative Section of Noncompliance Agency

Target 

Completion Date 

Information 

Technology 

Federal Financial Management System (FFMS) 

requirements, and information security 

policies, procedures, and/or practices. 

Multiple 9/30/2016 

Financial 

Management 

Federal accounting standards, and U.S. 

Standard General Ledger (USSGL) at the 

transaction level. 

NRCS 9/30/2016 

Federal accounting standards. CCC 9/30/2016 

USSGL at the transaction level. CCC 9/30/2017 
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Fiscal Year 2015 Results 

During FY 2015, USDA evaluated its financial management systems to assess substantial 

compliance with FFMIA. In assessing FFMIA compliance, the Department considered auditors’ 

opinions on component agencies’ financial statements, and progress made in addressing the 

material weaknesses identified in the Fiscal Year 2014 Agency Financial Report. Due to the 

CCC’s inability to record obligations at the transactional level in various program feeder systems 

and comply with certain Federal accounting standards, and NRCS’ beginning balances, current 

activity, and accounting for obligations and revenue, the Department is not compliant with 

Federal accounting standards and the USSGL at the transaction level. Additionally, as reported 

in the FMFIA section of this report, USDA continues to have weaknesses in information 

technology controls and Federal Financial Management Systems requirement that result in 

noncompliance with the FISMA requirement. As part of its financial systems strategy, USDA 

agencies continue working to meet FFMIA and FISMA objectives.

COMMODITY CREDIT CORPORATION (CCC) 

The Commodity Credit Corporation (CCC) operates a stand-alone program and core financial 

system infrastructure that is not integrated with the Department’s financial system (FMMI). The 

CCC Core Accounting System (CORE) general ledger provides summary financial data to the 

Department, and maintains detail financial transactions in legacy program and core financial 

systems. CCC has a Material Weakness because of the inability to perform an automated and 

real-time funds control for certain contracts at the time they are fully executed. To address the 

Material Weakness, CCC has implemented several business process and system improvements to 

record, track, and report obligations at the detail transaction level, which is a major step towards 

mitigating CCC’s material weakness. A phased implementation has been in progress during 

FY 2015 to bring Program and Financial Management applications into full compliance with the 

Federal Financial Management Improvement Act (FFMIA) of 1996. Complete implementation 

for full funds controls is targeted for completion in FY 2017. 

In addition, FSA/CCC has successfully moved two of the three financially significant 

applications off the IBM AS400/S36 platform hosting county office applications, addressing 

CCC’s deficiencies for having antiquated hardware and expired system maintenance plans. 

Automated Price Support System (APSS) 2014 crop year loans remain on the AS400, with a 

target date of closing out by April 2016. 

Noncompliance with Federal accounting standards was noted for inability to adequately track 

obligations for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs; 

deobligate undelivered orders for remaining balances at the time payments are made, which 

requires management to subsequently analyze the account balance to identify deobligations, 

which is subject to human error; and adequately account for grant transactions arising through 

parent/child relationships. 
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NATURAL RESOURCES CONSERVATION SERVICE (NRCS)

NRCS is not in substantial compliance with FFMIA as it relates to applicable Federal accounting 

standards and USSGL at the transaction level. NRCS does not record transactions in the proper 

periods. 

NRCS continues working to mitigate auditor-identified deficiencies and substantially comply 

with FFMIA. The following deficiencies in applicable Federal accounting standards were found:

Compliance for beginning net position balances and current year activity; obligations incurred, 

including accrued expenses and undelivered orders, recoveries of prior year unpaid obligations, 

and advances to others.

USSGL appropriate posting models were not used for recoveries of prior year obligations paid 

and unpaid, and nonproduction costs.
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Financial Management Systems Strategy 

On May 2, 2014, the Office of Management and Budget (OMB) and the U.S. Department of the 

Treasury designated USDA National Finance Center (NFC) as a Federal Shared Service 

Provider (FSSP). 

USDA is supporting OMB Memorandum M-13-08 Improving Financials through Shared 

Services, which directs agencies to do the following: 

 Move from agency-specific financial systems to FSSP; 

 Consolidate financial management systems; and 

 Use existing FSSP operations and maintenance teams to support systems and 

infrastructures. 

The designation allows USDA to provide financial management services to Federal agencies. 

In 2015, the USDA Office of the Chief Financial Officer (OCFO) separated NFC resources that 

were supporting the financial management systems and services into a new business center, 

called Financial Management Services (FMS), to provide an integrated solution and better 

customer service. 

Financial Management Lines of Business 

In 2015, USDA partnered with the General Services Administration (GSA) to shift GSA’s 

financial system and services offering to its portfolio. This transition was effective March 21, 

2015. As a result, USDA is positioned to offer either SAP or Momentum to customers looking 

for a FSSP that can meet their needs. 

USDA has two separate lines of business to support existing and future customers. The SAP 

offering is housed in the FMS Division. Momentum is part of the Pegasys Financial Systems 

(PFS) Division. This organizational structure allows each line of business to focus on their 

specific customers, services, and systems. 

Mission 

USDA’s mission as an FSSP is to provide reliable, cost-effective, employee-centric systems and 

services to Federal organizations, thus allowing our customers to focus on serving this great 

Nation through their mission delivery. FMS’ goal is to provide the necessary activities for 

executing the Financial Management Line of Business vision. The three key components of this 

vision are communication, governance, and operations. By executing these components, USDA 

will deliver a successful shared service offering. 
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USDA’s activities are focused on financial management services. The list of financial 

management services includes as follows: 

 Budget execution; 

 General ledger accounting; 

 Financial reporting; 

 Audit support; 

 Payroll accounting; 

 Investment accounting; 

 Commercial vendor payments; 

 Temporary duty travel payments; 

 Permanent change of station employee relocation payments; 

 Grant payments; 

 Purchase card payments; 

 Lease accounting; 

 Intra-governmental payments; 

 Intra-governmental collections; 

 Receivable management; and 

 Property accounting. 

By offering a solution that is proven and operating, and which meets all compliance 

requirements, a customer is jump-started in coming online with a state-of-the-art, fully 

financially configured Enterprise Resource Planning (ERP) solution. USDA’s primary objectives 

for this shared services effort are to provide the following: 

 An enterprise financial management service that allows customers to reap the benefits in 

increased service quality, including faster, less expensive, and less risk as compared to 

starting with a new Enterprise Resource Planning or financial management 

implementation; 

 Integration with NFC payroll processing services; 

 A complete audit compliant financial solution with full documentation meeting financial 

requirements; 

 Continuous process, operational, and organizational improvements for those shared 

services retained in the future state portfolio; 

 More powerful and flexible financial management and reporting; 
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 Administrative payments, collections, and certifications; 

 Editing/auditing capabilities that are 100-percent computerized; and 

 The best possible customer-focused service and support. 

Provider Status 

As an FSSP, USDA FMS continues to work with the Office of Financial Innovation and 

Transformation (FIT) to ensure our FMS-based services adhere to the required guidelines with 

respect to services, pricing, governance and service level metrics. The FSSP certification 

required to obtain new financial system customers is currently only in place for the Systems, 

Applications and Products (SAP) offering. USDA PFS is allowed to service existing customers 

transferred from GSA; USDA PFS is expected to apply for the Pegasys certification in late 2015. 

Successes 

During FY 2015, USDA succeeded in the following ways: 

 Brought the former GSA Shared Services organization and its Momentum product under 

the USDA umbrella. 

 Continued to enhance the SAP Grants solution with the Foreign Agricultural Service being 

the first agency to adopt the solution. 

 Brought the Federal Government’s largest grants program, the Food and Nutrition 

Service’s Supplemental Nutrition Assistance Program, into the USDA SAP Grants 

solution. USDA also brought grants programs from NRCS and AMS into the USDA 

solution. 

 Opened discussions with Rural Development about bringing loans into the USDA SAP 

corporate solution. 

 Opened discussions with the U.S. Department of Homeland Security to bring four DHS 

component agencies into the SAP FSSP offering. 

Future Roadmap 

USDA goals for the future include as follows: 

 Providing Financial Systems and Services to Federal agencies outside USDA, using both 

the SAP and Momentum products; 

 Rolling the SAP Grants solution out to all USDA agencies and to agencies outside USDA; 

and 

 Beginning the integration of loan programs into the SAP solution within USDA. 
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Projected FY 2015 and FY 2016 planned releases and upgrades include the following: 

 SAP software release; 

 General Financial Management Modernization Initiative enhancements; 

 Grants.gov integration; 

 High-Performance Analytic Appliance (HANA) business warehouse; and 

 Financial Statement Data Warehouse (FSDW) migration. 

PFS Roadmap 

USDA worked with GSA and completed an upgrade to Pegasys Momentum version 7.1.2 from 

the previous 6.5 version on April 15, 2015. USDA is working to complete the final phase of the 

Billing and Accounts Receivable Module (BAAR) project, and the final Wave 3.4 will be 

implemented in February 2016. 

Momentum 7.1.2 incorporates more than 160 new features and enhancements designed to meet 

current legislative and Government-mandated Federal financial management requirements and 

recommendations, including the Government-wide Treasury Account Symbol Adjusted Trial 

Balance System (GTAS), Do Not Pay (DNP), the System for Award Management (SAM), and 

Payment Application Modernization (PAM). 

USDA intends to apply to offer Momentum as a Federal Shared Service Provider to other 

Federal agencies in 2015. 
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Other Management Information, Initiatives, and 

Issues: 

Eliminating Improper Payments 

In fiscal year (FY) 2015, the U.S. Department of Agriculture (USDA) improper payment rate 

was 5.69 percent, an increase from the 5.52 percent improper payment rate reported for FY 2014. 

Ten USDA high-risk programs appear to be fully compliant with the Improper Payments 

Elimination and Recovery Act of 2010 in FY 2015.

USDA took significant actions during FY 2015 to address improper payments as follows: 

 Determined that the Wildland Fire Suppression Management, Milk Income Loss Contract

Program, and Direct and Counter-Cyclical Payments have consistently reduced their

improper payments to the point that they are no longer at high risk for making improper

payments. With concurrence from the Office of Inspector General (OIG) and Office of

Management and Budget (OMB), USDA has removed them from the improper payments

high-risk list of programs at high-risk of improper payments.

 Implemented a statistically valid methodology to accurately test and report improper

payment results for the Federal Crop Insurance Corporation Program Fund, administered

by USDA’s Risk Management Agency (RMA). OMB approved RMA’s plan to change its

statistical sampling approach.

 Implemented the Do Not Pay Portal with the U.S. Department of the Treasury. The

implementation of this portal allows checks on all USDA post payments against the public

Death Master File, commercially known as the Social Security Death Index, and the private

System for Award Management (SAM) Exclusion lists to verify payments.

 Executed an expansion of the supplier credit audit to include commodity payments made

through the Web-Based Supply Chain Management system.

 Recovered approximately $384 million in improper payments.

Detailed improper payment results and corrective actions are provided in Section III, Other 

Information.

Digital Accountability and Transparency Act (DATA Act) 

The DATA Act was enacted on May 9, 2014. This Act amends the Federal Financial 

Accountability and Transparency Act of 2006 (FFATA) and requires reporting of Federal 

financial assistance and procurement transaction to a public Website by May 2017. FFATA 

requires reporting of obligations and award-related information for all Federal financial 

assistance and procurement awards. The DATA Act expands upon FFATA by adding 

account-level reporting; this includes reporting all Treasury Symbols that fund each award or 
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contract transaction, budget authority, outlays, and budget object classes, among other data 

elements. The DATA Act also requires the Federal Government to collectively standardize the 

data elements that will be reportable under the Act. The Office of Management and Budget 

(OMB) and the U.S. Department of the Treasury (Treasury) will conduct a pilot to reduce 

reporting burdens on recipients of awards and contracts. 

OMB and Treasury are developing guidance for implementation. The first round of guidance was 

issued in May 2015 in OMB Memorandum 15-121. Treasury issued a draft of the DATA Act 

data schema2in July 2015. OMB has issued data standards for 57 data elements as of 

August 2015. USDA participates in the development of the standards and is a government leader 

in the workgroups charged with the DATA Act implementation government-wide.

The Office of the Chief Financial Officer (OCFO) leads the DATA Act implementation for 

USDA. OCFO is developing technical and functional requirements for the data elements that will 

need to be reported and is establishing the account-level reports needed to be compliant. As new 

information, guidance, and standards emerge for the government-wide workgroups, OCFO is 

assimilating the information into its implementation plan and communicating these changes to 

the USDA DATA Act implementation team. OCFO is developing a data warehouse for the 

Department to collect all DATA Act elements. The warehouse will be connected to 

USAspending.gov and will report the data using Treasury’s data broker. 

USDA’s Senior Accountable Official, the Deputy Chief Financial Officer, established a USDA 

DATA Act implementation team, which is led by OCFO. This group works on inventorying 

DATA Act elements in the USDA agency source systems and is preparing for any needed 

system changes to become compliant. USDA has three main general ledgers and multiple awards 

systems where data resides. By May 2017, at least four USDA agencies will be using the 

Department’s grants system, which will improve reporting capabilities and will provide 

standardization for many grants programs. More agencies are exploring migration to the 

Department’s grants solution potentially yielding even more efficiencies and standardization. 

OCFO is also working with the Office of Procurement and Property Management (OPPM) to 

ensure that procurement reporting will adhere to DATA Act requirements. Together, OCFO and 

OPPM are reviewing procurement reporting policies and procedures to ensure that data is 

reported and certified by the agencies to be both timely and accurate in the Department’s 

Integrated Acquisition System as well as other procurement systems used by FS and FSA. 

1

https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-12.pdf

2

https://fedspendingtransparency.github.io/data-exchange-standard/
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Limitations of Financial Statements 

The principal financial statements have been prepared to report the financial position and results 

of operations of the entity, pursuant to the requirements of 31 U.S.C. 3515(b). While the 

statements have been prepared from the books and records of the entity in accordance with 

generally accepted accounting principles for Federal entities and the formats prescribed by 

OMB, the statements are in addition to the financial reports used to monitor and control 

budgetary resources, which are prepared from the same books and records. 

The statements should be read with the realization that they are for a component of the 

U.S. Government, a sovereign entity. 
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Section II: Financial Information 

Message from Chief Financial Officer 

The U.S. Department of Agriculture (USDA) is leading the charge in providing a safe, nutritious 

and efficient food supply with a concentrated investment in the economic growth of rural 

America. With over $200 billion in assets, $143 billion in annual spending, and over $100 billion 

in loans to America’s farmers and ranchers, responsible financial controls are a necessity that we 

embrace. Our mission includes feeding upwards of 46 million families a day and would not be 

possible without reliable controls. USDA’s focus on responsible financial stewardship is a vital 

component in supporting program delivery of the very tangible work of the Department. 

My goal as the Chief Financial Officer is to ensure USDA financial management practices are 

constantly evolving in order to meet the needs of a 21st Century Federal agency. The FY 2015 

Agency Financial Report shows USDA’s commitment to honor the fiduciary duties entrusted to 

us by the American taxpayers. It is a valuable summary of USDA’s use of resources, operating 

performance, financial stewardship and internal controls. Furthermore, it is a tribute to the 

excellent work of our employees who exercise financial stewardship and practice sound financial 

management in their daily responsibilities. 

USDA has strived to maintain financial integrity in a year marred by the unexpected. As a 

Department, we have had to combat a highly pathogenic strain of the Avian Influenza (bird flu) 

that has been detected in over 48 million birds in 2015 alone. The California drought coupled 

with an unprecedented surge in wildfires has placed an undue burden on the Department’s 

personnel, property and financial resources, costing us 7 lives lost in the line of duty and 

expenditures upwards of $150 million per week on fire suppression activities. 

More positively, USDA successfully entered into its first year as a Federal Shared Service 

Provider (FSSP) collaborating with the General Services Administration (GSA) to transition 

293 financial management employees to USDA. The USDA FSSP model will service other 

federal trading partners with our host financial systems and expert staff. It will also strengthen 

transactional and program activity with a heightened monitoring of internal controls to enhance 

accountability and identify concerns. 

NRCS continued to make financial management improvements, streamline processes, and create 

efficiencies in financial processing. A robust internal control review process was implemented 

while integrating audit remediation efforts with the internal control review and daily operations. 

Specifically, significant improvements were made in the areas of obligations and advance 

balances, unfilled customer orders, and the financial reporting. In addition, NRCS continued its 
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transformation of administrative services by launching the accounts payable and travel teams, 

transitioning to a new travel system, and establishing local support teams in each state office. 

Even still, there is more work to do, particularly related to management challenges. We 

recognize the importance of continuous process improvement over our internal controls 

including any areas of weakness identified by our independent auditors. The Office of Inspector

General (OIG) has made assessments of our management challenges and we are committed to 

expediting the resolution of any deficiencies reported and will continue to build upon 

experiences gained through our annual financial statement audit. 

We, at every level, are committed to being a proactive, cost-effective organization that is 

transparent and accountable for the programs we deliver. 

Jon M. Holladay

Chief Financial Officer

February 12, 2016
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U . S . D E P A R T M E N T O F A G R I C U L T U R E 6 3
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

6 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 6 5
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

6 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 6 7
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

6 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 6 9
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

7 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 1
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

7 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 3
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

7 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 5
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

7 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 7
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

7 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 7 9

Agency Response to Auditors Report 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

8 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 8 1
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

8 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Consolidated Financial Statements 

Consolidated Balance Sheet

As of September 30, 2015 and 2014 (In Millions) 

2015 2014

Assets (Note 2):

Intragovernmental:

Fund Balance with Treasury (Note 3) 113,316$ 101,717$ 

Investments (Note 5) 188 150

Accounts Receivable, Net (Note 6) 93 107

Other (Note 11) 3 3

Total Intragovernmental 113,600 101,977

Cash and Other Monetary Assets (Note 4) 234 173

Investments (Note 5) 3 3

Accounts Receivable, Net (Note 6) 1,574 1,377

Direct Loan and Loan Guarantees, Net (Note 7) 98,894 101,243

Inventory and Related Property, Net (Note 8) 55 38

General Property, Plant, and Equipment, Net (Note 9) 2,667 2,841

Other (Note 11) 228 189

Total Assets 217,255 207,841

Stewardship PP&E (Note 10)

Liabilities (Note 12):

Intragovernmental:

Accounts Payable 3 4

Debt (Note 13) 114,232 114,102

Other (Note 15) 11,966 12,394

Total Intragovernmental 126,201 126,500

Accounts Payable 1,832 2,277

Loan Guarantee Liability (Note 7) 5,590 5,373

Federal Employee and Veteran Benefits 893 955

Environmental and Disposal Liabilities (Note 14) 193 196

Benefits Due and Payable 4,835 4,362

Other (Notes 15 & 16) 21,314 19,672

Total Liabilities 160,858 159,335

Commitments and Contingencies (Note 17)

Net Position:

Unexpended Appropriations - Funds From Dedicated Collections (Note 18) 131 120

Unexpended Appropriations - All Other Funds 48,041 43,232

Cumulative Results of Operations - Funds From Dedicated Collections(Note 18) 1,920 2,315

Cumulative Results of Operations - All Other Funds 6,305 2,839

Total Net Position - Funds From Dedicated Collections 2,051 2,435

Total Net Position - All Other Funds 54,346 46,071

Total Net Position 56,397 48,506

Total Liabilities and Net Position 217,255 207,841

The accompanying notes are an integral part of these statements. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 8 3

Consolidated Statement of Net Cost 

For the Years Ended September 30, 2015 and 2014 (In Millions) 

2015 2014

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs 27,910$ 31,969$ 

Less: Earned Revenue 8,016 8,284

Net Costs 19,894 23,685

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 13,135 12,311

Less: Earned Revenue 941 912

Net Costs 12,194 11,399

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs 2,302 2,494

Less: Earned Revenue 198 197

Net Costs 2,104 2,297

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs 108,202 107,417

Less: Earned Revenue 993 993

Net Costs 107,209 106,424

Create a USDA for the 21st Century That is High Performing,

Efficient, and Adaptable:

Gross Costs 1,289 1,265

Less: Earned Revenues 183 177

Net Costs 1,106 1,088

Total Gross Costs 152,838 155,456

Less: Total Earned Revenue 10,331 10,563

Net Cost of Operations (Note 19) 142,507$ 144,893$ 

The accompanying notes are an integral part of these statements. 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

8 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Consolidated Statement of Changes in Net Position 

For The Year Ended September 30, 2015 (In Millions) 

Funds From

Dedicated

Collections All Other Consolidated

(Note 18) Funds Eliminations Total

Cumulative Results of Operations:

Beginning Balances $ 2,315 $ 2,839 $ - $ 5,154

 Budgetary Financing Sources:

Other Adjustments (recissions, etc.) - (496) - (496)

Appropriations Used - 136,168 - 136,168

Non-exchange Revenue - 12 - 12

Donations and Forfeitures of Cash and Equivalents 1 - - 1

Transfers In (Out) without Reimbursement (19) 9,535 981 10,497

 Other Financing Sources (Non-Exchange):

Transfers In (Out) without Reimbursement (119) 982 (981) (118)

Imputed Financing 48 3,552 (2,620) 980

Other 301 (1,767) - (1,466)

Total Financing Sources 212 147,986 (2,620) 145,578

Net Cost of Operations (607) (144,520) 2,620 (142,507)

Net Change (395) 3,466 - 3,071

 Cumulative Results of Operations 1,920 6,305 - 8,225

Unexpended Appropriations:

Beginning Balances 120 43,232 - 43,352

 Budgetary Financing Sources:

 Appropriations Received 11 147,312 - 147,323

 Appropriations Transferred In (Out) - - - -

 Other Adjustments - (6,335) - (6,335)

 Appropriations Used - (136,168) - (136,168)

Total Budgetary Financing Sources 11 4,809 - 4,820

Unexpended Appropriations 131 48,041 - 48,172

Net Position $ 2,051 $ 54,346 $ - $ 56,397

The accompanying notes are an integral part of these statements. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 8 5

Consolidated Statement of Changes in Net Position 

For The Year Ended September 30, 2014 (In Millions) 

The accompanying notes are an integral part of these statements. 

Funds From

Dedicated

Collections All Other Consolidated

(Note 18) Funds Eliminations Total

Cumulative Results of Operations:

Beginning Balances $ 1,575 $ 6,877 $ - $ 8,452

 Budgetary Financing Sources:

Other Adjustments (recissions, etc.) (1) (479) - (480)

Appropriations Used (1) 133,351 - 133,350

Non-exchange Revenue - 9 - 9

Donations and Forfeitures of Cash and Equivalents 1 - - 1

Transfers In (Out) without Reimbursement 901 8,506 233 9,640

 Other Financing Sources (Non-Exchange):

Transfers In (Out) without Reimbursement (64) 231 (233) (66)

Imputed Financing 4 8 3,260 (2,457) 851

Other 9 0 (1,800) - (1,710)

Total Financing Sources 974 143,078 (2,457) 141,595

Net Cost of Operations (234) (147,116) 2,457 (144,893)

Net Change 740 (4,038) - (3,298)

 Cumulative Results of Operations 2,315 2,839 - 5,154

Unexpended Appropriations:

Beginning Balances 107 33,738 - 33,845

 Budgetary Financing Sources:

 Appropriations Received 1 2 150,627 - 150,639

 Appropriations Transferred In (Out) - 4 - 4

 Other Adjustments - (7,786) - (7,786)

 Appropriations Used 1 (133,351) - (133,350)

Total Budgetary Financing Sources 1 3 9,494 - 9,507

Unexpended Appropriations 120 43,232 - 43,352

Net Position $ 2,435 $ 46,071 $ - $ 48,506
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

8 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Combined Statement of Budgetary Resources 

For The Years Ended September 30, 2015 and 2014 (In Millions)

2015 2014

Non-Budgetary Non-Budgetary

Credit Reform Credit Reform

Financing Financing

Budgetary Accounts Budgetary Accounts

Budgetary Resources:

Unobligated balance, brought forward, October 1: $ 44,934 $ 9,621 $ 33,731 $ 8,758

Recoveries of prior year unpaid obligations 5,558 2,919 2,655 1,266

Other changes in unobligated balance (+ or -) (1,895) (5,486) (2,520) (4,812)

Unobligated balance from prior year budget authority, net 48,597 7,054 33,866 5,212

Appropriations (discretionary and mandatory) 144,795 2 151,153 21

Borrowing authority (discretionary and mandatory) 6,794 12,468 14,648 10,704

Spending authority from offsetting collections (discretionary and mandatory) 9,570 12,424 10,501 8,490

Total budgetary resources 209,756 31,948 210,168 24,427

Status of Budgetary Resources:

Obligations Incurred (Note 23) 160,080 18,152 165,234 14,806

Unobligated balance, end of year:

Apportioned 13,701 9,882 19,966 5,522

Exempt from apportionment 167 3 195 8

Unapportioned 35,808 3,911 24,773 4,091

Total unobligated balance, end of year 49,676 13,796 44,934 9,621

Total budgetary resources 209,756 31,948 210,168 24,427

Change in Obligated Balance:

Unpaid obligations:

Unpaid obligations, brought forward, October 1 37,406 23,065 36,260 25,009

Obligations incurred 160,080 18,152 165,234 14,806

Outlays (gross) (-) (158,840) (17,409) (161,433) (15,484)

Recoveries of prior year unpaid obligations (-) (5,558) (2,919) (2,655) (1,266)

Unpaid obligations, end of year 33,088 20,889 37,406 23,065

Uncollected payments:

Uncollected customer payments from Federal sources, brought forward, October 1 (-) (2,139) (655) (2,167) (912)

Change in uncollected customer payments from Federal sources (+ or -) 61 82 28 257

Uncollected payments, Federal sources, end of year (-) (2,078) (573) (2,139) (655)

Memorandum (non-add) entries:

Obligated balance, start of year (+ or -) 35,267 22,410 34,093 24,097

Obligated balance, end of year (+ or -) 31,010 20,316 35,267 22,410

Budget Authority and Outlays, Net:

Budget authority, gross (discretionary and mandatory) 161,159 24,894 176,302 19,215

Actual offsetting collections (discretionary and mandatory) (-) (16,914) (18,804) (17,079) (13,142)

Change in uncollected customer payments from Federal sources 61 82 28 257

 (discretionary and mandatory)(+ or -) - - - -

Anticipated offsetting collections (discretionary and mandatory) (+ or -) - - - -

Budget authority, net (discretionary and mandatory) 144,306 6,172 159,251 6,330

Outlays, gross (discretionary and mandatory) 158,840 17,409 161,433 15,484

Actual offsetting collections (discretionary and mandatory) (-) (16,914) (18,804) (17,079) (13,142)

Outlays, net (discretionary and mandatory) 141,926 (1,395) 144,354 2,342

Distributed offsetting receipts (-) (948) (1,886) (911) (1,622)

Agency outlays, net (discretionary and mandatory) $ 140,978 $ (3,281) $ 143,443 $ 720

The accompanying notes are an integral part of these statements. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 8 7

Notes to the Consolidated Financial Statements 

As of September 30, 2015 and 2014 (In Millions) 

Note 1: Significant Accounting Policies 

ORGANIZATION 

USDA provides a wide variety of services in the United States and around the world. USDA is 

organized into seven distinct mission areas and their agencies that execute these missions. 

Listed below are the missions and the agencies within each mission including three Government 

corporations: 

FARM AND FOREIGN AGRICULTURAL SERVICES (FFAS) 

 Farm Service Agency (FSA) 

o Commodity Credit Corporation (CCC) 

 Foreign Agricultural Service (FAS) 

 Risk Management Agency (RMA) 

o Federal Crop Insurance Corporation (FCIC) 

FOOD, NUTRITION, AND CONSUMER SERVICES (FNCS) 

Food and Nutrition Service (FNS) 

FOOD SAFETY 

Food Safety and Inspection Service (FSIS) 

MARKETING AND REGULATORY PROGRAMS (MRP) 

 Agricultural Marketing Service (AMS) 

 Animal and Plant Health Inspection Service (APHIS) 

 Grain Inspection, Packers and Stockyards Administration (GIPSA) 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

8 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

NATURAL RESOURCES AND ENVIRONMENT (NRE) 

 Forest Service (FS) 

 Natural Resources Conservation Service (NRCS)

RESEARCH, EDUCATION, AND ECONOMICS (REE) 

 Agricultural Research Service (ARS) 

 National Institute of Food and Agriculture (NIFA)

 Economic Research Service (ERS) 

 National Agricultural Statistics Service (NASS) 

RURAL DEVELOPMENT 

 Rural Development (RD) 

o Alternative Agricultural Research and Commercialization Corporation (AARC) 

CONSOLIDATION 

The financial statements consolidate all the agencies’ results. The effects of intradepartmental 

activity and balances are eliminated, except for the Statement of Budgetary Resources that is 

presented on a combined basis. The financial statements are prepared in accordance with 

generally accepted accounting principles for the Federal Government. 

RECLASSIFICATIONS 

In FY 2014, The Statement of Net Cost, Note 19, and Schedule of Spending were reclassified to 

align with the strategic goals presented in the USDA Strategic Plan for FY 2014–2018. A new 

goal was added to create a USDA for the 21st century that is high performing, efficient, and 

adaptable. 

Interest related to technical reestimates was reclassified from interest rate reestimates in 

Note 7—Table 2, Table 3, Table 7, and Table 8. Foreclosed property and loans acquired and 

claim payments to lenders were reclassified from other adjustments in Note 7—Table 7. 

Note 15 was reclassified to align with the USSGL crosswalk for other liabilities and to move the 

non-current portion of unfunded FECA liability and underwriting gains on crop insurance from 

current. 
F I S C A L Y E A R 2 0 1 5 A GE N C Y F I N A N C I A L R E P O R T

U . S . D E P A R T M E N T O F AG R I C U L T U R E 8 9

USE OF ESTIMATES

The preparation of financial statements requires management to make estimates and assumptions 

that affect the amounts reported in the financial statements and accompanying notes. Actual 

results could differ from those estimates.

REVENUE AND OTHER FINANCING SOURCES

Revenue from exchange transactions is recognized when persuasive evidence of an arrangement 

exists, delivery has occurred or services have been rendered, sales price is fixed or determinable, 

and collection is reasonably assured. In certain cases, the prices charged by the Department are 

set by law or regulation, which for program and other reasons may not represent full cost. Prices 

set for products and services offered through the Department’s working capital funds are 

intended to recover the full costs incurred by these activities. Revenue from non-exchange 

transactions is recognized when a specifically identifiable, legally enforceable claim to resources 

arises, to the extent that collection is probable and the amount is reasonably estimable. 

Appropriations are recognized as a financing source when used. An imputed financing source is 

recognized for costs subsidized by other Government entities.

INVESTMENTS

The Department is authorized to invest certain funds in excess of its immediate needs in 

Treasury securities. Investments in non-marketable par value Treasury securities are classified as 

held to maturity and are carried at cost. Investments in market-based Treasury securities are 

classified as held to maturity and are carried at amortized cost. The amortized cost of securities is 

based on the purchase price adjusted for amortization of premiums and accretion of discounts 

using the straight-line method over the term of the securities.

ACCOUNTS RECEIVABLE

Accounts receivable are reduced to net realizable value by an allowance for uncollectible 

accounts. The adequacy of the allowance is determined based on past experience and age of 

outstanding balances.

DIRECT LOANS AND LOAN GUARANTEES

Direct loans obligated and loan guarantees committed after fiscal 1991 are reported based on the 

present value of the net cash-flows estimated over the life of the loan or guarantee. The 

difference between the outstanding principal of the loans and the present value of their net cash 

inflows is recognized as a subsidy cost allowance; the present value of estimated net cash 

outflows of the loan guarantees is recognized as a liability for loan guarantees. The subsidy 

expense for direct or guaranteed loans disbursed during the year is the present value of estimated 

net cash outflows for those loans or guarantees. A subsidy expense also is recognized for 

modifications made during the year to loans and guarantees outstanding and for reestimates 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I ON

9 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

made as of the end of the year to the subsidy allowances or loan guarantee liability for loans and 

guarantees outstanding.

Direct loans obligated and loan guarantees committed before fiscal 1992 are valued using either 

the present-value or net realizable methods. Under the present-value method, the outstanding 

principal of direct loans is reduced by an allowance equal to the difference between the 

outstanding principal and the present value of the expected net cash flows. The liability for loan 

guarantees is the present value of expected net cash outflows due to the loan guarantees. Under 

the net realizable value method, the average rate of the last five years of write-offs is used.

INVENTORIES AND RELATED PROPERTY

Inventories to be consumed in the production of goods for sale or in the provision of services for 

a fee are valued on the basis of historical cost using a first-in, first-out method. Commodities are 

valued at the lower of cost or net realizable value using a weighted average method. Barter 

Delivery Obligations (BDO) are valued at the net sales proceeds. BDO are exchanged for food 

products to be utilized in domestic and export food programs. 

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment (PP&E) are stated at cost less accumulated depreciation. 

Depreciation is determined using the straight-line method over the estimated useful lives of the 

assets. Useful lives for PP&E are disclosed in Note 9. Capitalization thresholds for personal 

property and real property are $25,000 and $100,000 for internal use software. There are no 

restrictions on the use or convertibility of PP&E.

PENSION AND OTHER RETIREMENT BENEFITS

Pension and other retirement benefits (primarily retirement health care benefits) expense is 

recognized at the time the employees’ services are rendered. The expense is equal to the actuarial 

present value of benefits attributed by the pension plan’s benefit formula, less the amount 

contributed by the employees. An imputed cost is recognized for the difference between the 

expense and contributions made by and for employees.

OTHER POST-EMPLOYMENT BENEFITS

Other post-employment benefits expense for former or inactive (but not retired) employees is 

recognized when a future outflow or other sacrifice of resources is probable and measurable on 

the basis of events occurring on or before the reporting date. The liability for long-term other 

post-employment benefits is the present value of future payments.
F I S C A L Y E A R 2 0 1 5 A GE N C Y F I N A N C I A L R E P O R T

U . S . D E P A R T M E N T O F AG R I C U L T U R E 9 1

FUNDS FROM DEDICATED COLLECTIONS

In accordance with Statement of Federal Financial Accounting Standards (SFFAS) 43, Funds 

from Dedicated Collections, USDA has reported the funds from dedicated collections for which 

it has program management responsibility when the following three criteria are met: (1) a statute 

committing the Federal Government to use specifically identified revenues and/or other 

financing sources that are originally provided to the Federal Government by a non-Federal 

source only for designated activities, benefits or purposes; (2) explicit authority for the fund to 

retain revenues and/or other financing sources not used in the current period for future use to 

finance the designated activities, benefits, or purposes; and (3) a requirement to account for and 

report on the receipt, use, and retention of the revenues and/or other financing sources that 

distinguishes the fund from the Federal Government’s general revenues. 

CONTINGENCIES

Contingent liabilities are recognized when a past event or exchange transaction has occurred, a 

future outflow or other sacrifice of resources is probable, and the future outflow or sacrifice of 

resources is measurable.

ALLOCATION TRANSFERS

USDA is a party to allocation transfers with other federal agencies as both a transferring (parent) 

entity and/or a receiving (child) entity. Allocation transfers are legal delegations by one 

department of its authority to obligate budget authority and outlay funds to another department. 

A separate fund account (allocation account) is created in the U.S. Treasury as a subset of the 

parent fund account for tracking and reporting purposes. All allocation transfers of balances are 

credited to this account, and subsequent obligations and outlays incurred by the child entity are 

charged to this allocation account as they execute the delegated activity on behalf of the parent 

entity.

USDA allocates funds, as the parent, to a number of U.S. Government agencies including:

Department of the Interior, Department of Defense, Department of Housing and Urban 

Development, Agency for International Development, and the Small Business Administration. 

USDA receives allocation transfers, as the child, from the Department of Labor, Department of 

Transportation, Department of the Interior, Economic Development Administration, Appalachian 

Regional Commission, and the Delta Regional Authority.

INTER-ENTITY COSTS 

Each entity’s full cost should incorporate the full cost of goods and services that it receives from 

other entities. The entity providing the goods or services has the responsibility to provide the 

receiving entity with information on the full cost of such goods or services either through billing 

or other advice.
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

9 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Recognition of inter-entity costs that are not fully reimbursed is limited to material items that: 

(1) are significant to the receiving entity, (2) form an integral or necessary part of the receiving 

entity’s output, and (3) can be identified or matched to the receiving entity with reasonable 

precision. Broad and general support services provided by an entity to all or most other entities 

should not be recognized unless such services form a vital and integral part of the operations or 

output of the receiving entity. 

FIDUCIARY ACTIVITIES 

Fiduciary activities are the collection or receipt, and the management, protection, accounting, 

investment, and disposition by the Federal Government of cash or other assets in which 

non-Federal individuals or entities have an ownership interest that the Federal Government must 

uphold. Fiduciary assets are not assets of the Federal Government and are not recognized on the 

balance sheet. 

ASBESTOS-RELATED CLEANUP COSTS 

Effective October 1, 2012, Technical Bulletin (TB) 2006-1, Recognition and Measurement of 

Asbestos-Related Cleanup Costs, as amended, requires an estimate of both friable and 

non-friable asbestos-related cleanup costs; recognition of a liability and related expense for those 

costs that are both probable and reasonably estimable; and disclosure of information related to 

friable and non-friable asbestos-related cleanup costs that are probable but not reasonably 

estimable in a note to the financial statements. 

DEFERRED MAINTENANCE AND REPAIRS 

Deferred maintenance and repairs are suchthat were not performed when they should have been 

or were scheduled to be and which are put off or delayed for a future period. Maintenance and 

repairs are activities directed toward keeping fixed assets in an acceptable condition. Activities 

include preventive maintenance; replacement of parts, systems, or components; and other 

activities needed to preserve or maintain the asset. Maintenance and repairs, as distinguished 

from capital improvements, exclude activities directed towards expanding the capacity of an 

asset or otherwise upgrading it to serve needs different from, or significantly greater than, its 

current use. SFFAS 42, Deferred Maintenance and Repairs: Amending Statements of Federal 

Financial Accounting Standards 6, 14, 29 and 32, became effective October 1, 2014. Estimates 

for deferred maintenance and repairs are disclosed in required supplementary information. 

 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 9 3

Note 2: Non-Entity Assets 

Non-entity assets include proceeds from the sale of timber payable to the U.S. Treasury, timber 

contract performance bonds, employer contributions and payroll taxes withheld for agencies 

serviced by the National Finance Center, rural housing escrow, interest, fines, and penalties. 

FY 2015 FY 2014

Intragovernmental:

Fund balance with Treasury $ 250 $ 190

Accounts Receivable 236 546

Subtotal Intragovernmental 486 736

With the Public:

Accounts receivable 121 123

Subtotal With the Public 121 123

Total non-entity assets 607 859

Total entity assets 216,648 206,982

Total Assets $ 217,255 $ 207,841
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

9 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Note 3: Fund Balance with Treasury

Other Fund Types include deposit and clearing accounts. Borrowing Authority not yet Converted 

to Fund Balance represents un-obligated and obligated amounts recorded at year-end that will be 

funded by future borrowings. Non-Budgetary Fund Balance with Treasury includes special fund 

receipt accounts, and clearing and suspense account balances awaiting disposition or 

reclassification. 

FY 2015 FY 2014

Fund Balances:

 Trust Funds $ 393 $ 796

 Special Funds 22,383 21,075

 Revolving Funds 24,490 20,066

 General Funds 65,852 59,608

 Other Fund Types 198 172

Total 113,316 101,717

Status of Fund Balance with Treasury:

Unobligated Balance:

 Available 23,753 25,691

 Unavailable 39,736 28,870

Obligated Balance not yet Disbursed 51,132 57,527

Borrowing Authority not yet Converted to Fund Balance (23,040) (30,279)

Non-Budgetary Fund Balance with Treasury 21,735 19,908

Total $ 113,316 $ 101,717

Note 4: Cash and Other Monetary Assets 

For FY 2015 and FY 2014, cash mostly consists of Federal crop insurance escrow amounts of 

$192 million and $148 million and deposits in transit of $42 million and $24 million, 

respectively. 

FY 2015 FY 2014

Cash $ 234 $ 173
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 9 5

Note 5: Investments 

FY 2015 Amortized Market

Amortization (Premium) Interest Investments, Value

Method Cost Discount Receivable Net Disclosure

Intragovernmental:

Non-marketable

Par value $ - $ - $ - $ - $ -

Market-based Straight Line 189 (2) 1 188 188

Total $ 189 $ (2) $ 1 $ 188 $ 188

With the Public:

AARC $ 3 $ - $ - $ 3 $ 3

Total $ 3 $ - $ - $ 3 $ 3

FY 2014 Amortized Market

Amortization (Premium) Interest Investments, Value

Method Cost Discount Receivable Net Disclosure

Intragovernmental:

Non-marketable

Par value $ - $ - $ - $ - $ -

Market-based Straight Line 150 (1) 1 150 150

Total $ 150 $ (1) $ 1 $ 150 $ 150

With the Public:

AARC $ 3 $ - $ - $ 3 $ 3

Total $ 3 $ - $ - $ 3 $ 3

Note 6: Accounts Receivable, Net 

FY 2015

Accounts 

Receivable, 

Gross

Allowance for 

Uncollectible 

Accounts

Accounts 

Receivable, 

Net

Intragovernmental $ 93 $ - $ 93

With the Public 1,629 (55) 1,574

Total $ 1,722 $ (55) $ 1,667

FY 2014

Accounts 

Receivable, 

Gross

Allowance for 

Uncollectible 

Accounts

Accounts 

Receivable, 

Net

Intragovernmental $ 107 $ - $ 107

With the Public 1,438 (61) 1,377

Total $ 1,545 $ (61) $ 1,484
S E C T I O N I I | F I N A N C I A L I N F O R M A T I ON

9 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

Note 7: Direct Loans and Guarantees, Non-Federal Borrowers

DIRECT LOANS

Direct loan obligations or loan guarantee commitments made pre-1992 and the resulting direct 

loans or loan guarantees are reported at either net present value or net realizable value. 

Direct loan obligations or loan guarantee commitments made post-1991, and the Federal Credit 

Reform Act of 1990 as amended governs the resulting direct loan or loan guarantees. The Act 

requires agencies to estimate the cost of direct loans and loan guarantees at present value for the 

budget. Additionally, the present value of the subsidy costs (i.e. interest rate differentials, interest 

subsidies, delinquencies and defaults, fee offsets, and other cash flows) associated with direct 

loans and loan guarantees are recognized as a cost in the year the loan or loan guarantee is 

disbursed. The net present value of loans or defaulted guaranteed loans receivable at any point in 

time is the amount of the gross loan or defaulted guaranteed loans receivable less the present 

value of the subsidy at that time.

The net present value of Direct Loan and Loan Guarantees, Net is not necessarily representative 

of the proceeds that might be expected if these loans were sold on the open market.

Direct Loan and Loan Guarantees, Net at the end of FY 2015 was $98,894 million compared to 

$101,243 million at the end of FY 2014. Loans exempt from the Federal Credit Reform Act of 

1990 represent $386 million of the total compared to $208 million in FY 2014. Table 1 illustrates 

the overall composition of the Department’s credit program balance sheet portfolio by mission 

area and credit program for FY 2015 and FY 2014.

Beginning in FY 2012, advance payments surpassed the loans receivable balance in the Rural 

Utilities Liquidating Fund. This was due to an increased volume in advance payments and a 

normal reduction to the Liquidating Portfolio. The Omnibus Budget Act of 1987, section 313, 

authorized the accumulation of Cushion of Credit (CoC) in the Revolving Fund. Borrowers may 

make advance payments up to their liquidating and financing total Rural Utilities Service debt. 

To accurately represent the value of Electric and Telecommunication assets, RD reports the CoC 

amounts as a separate line item in Table 1.

During the fiscal year, the gross outstanding balance of the direct loans obligated post-1991 is 

adjusted by the value of the subsidy cost allowance held against those loans. Current year 

subsidy expense, modifications and reestimates all contribute to the change of the subsidy cost 

allowance throughout the year. The subsidy cost allowance moved from $6,461 million to 

$6,425 million during FY 2015, a decrease of $36 million. Table 2 shows the reconciliation of 

subsidy cost allowance balances from FY 2014 to FY 2015.

Total direct loan subsidy expense is a combination of subsidy expense for new direct loans 

disbursed in the current year, modifications to existing loans, and interest rate and technical 

reestimates to existing loans. Total direct loan subsidy expense in FY 2015 was $204 million
F I S C A L Y E A R 2 0 1 5 A GE N C Y F I N A N C I A L R E P O R T

U . S . D E P A R T M E N T O F AG R I C U L T U R E 9 7

compared to $224 million in FY 2014. Table 3 illustrates the breakdown of total subsidy expense 

for FY 2015 and FY 2014 by program.

Direct loan volume increased from $8,956 million in FY 2014 to $9,533 million in FY 2015. 

Volume distribution between mission area and program is shown in Table 4.

GUARANTEED LOANS 

Guaranteed loans are administered in coordination with conventional agricultural lenders for up 

to 95 percent of the principal loan amount. Under the guaranteed loan programs, the lender is 

responsible for servicing the borrower’s account for the life of the loan. The Department, 

however, is responsible for ensuring borrowers meet certain qualifying criteria to be eligible and 

monitoring the lender’s servicing activities. Borrowers interested in guaranteed loans must apply 

to a conventional lender, which then arranges for the guarantee with a Department agency. 

Estimated losses on loan and foreign credit guarantees are reported at net present value as Loan 

Guarantee Liability. Defaulted guaranteed loans are reported at net present value as Loans 

Receivable and Related Foreclosed Property, Net.

Guaranteed loans outstanding at the end of FY 2015 were $136,487 million in outstanding 

principal and $122,104 million in outstanding principal guaranteed, compared to 

$126,400 million and $113,086 million, respectively, at the end of FY 2014. Table 5 shows the 

outstanding balances by credit program.

During the fiscal year, the value of the guaranteed loans is adjusted by the value of the loan 

guarantee liability held against those loans. Current year subsidy expense, modification, and 

reestimates all contribute to the change of the loan guarantee liability through the year. The loan 

guarantee liability is a combination of the liability for losses on pre-1992 guarantees and 

post-1991 guarantees. Table 6 shows that total liability moved from $5,373 million to 

$5,590 million during FY 2015, an increase of $217 million. Table 7 shows the reconciliation of 

total loan guarantee liability.

Total guaranteed loan subsidy expense is a combination of subsidy expense for new guaranteed 

loans disbursed in the current year, modifications to existing loans, and interest rate and technical 

reestimates to existing loans. Total guaranteed loan subsidy expense in FY 2015 was 

$859 million compared to $561 million in FY 2014. Table 8 illustrates the breakdown of total 

subsidy expense for FY 2015 and FY 2014 by program.

Guaranteed loan volume increased from $24,806 million in FY 2014 to $26,031 million in 

FY 2015. Volume distribution between mission area and program is shown in Table 9.

ADMINISTRATIVE EXPENSES

Consistent with the Federal Credit Reform Act of 1990, as amended, subsidy cash flows exclude 

direct Federal administrative expenses. Administrative expenses for FY 2015 and FY 2014 are 

shown in Table 10.
S E C T I O N I I | F I N A N C I A L I N F O R M A T I ON

9 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

SUBSIDY RATES

Subsidy rates are used to compute each year’s subsidy expenses. The subsidy rates disclosed in 

Table 11 and Table 12 pertain only to the FY 2015 cohorts. These rates cannot be applied to the 

direct and guaranteed loans disbursed during the current reporting year to yield the subsidy 

expense. The subsidy expense for new loans reported in the current year could result from 

disbursements of loans from both current year cohorts and prior-year cohorts. The subsidy 

expense reported in the current year also includes reestimates. 

CREDIT PROGRAM DISCUSSION AND DESCRIPTIONS

The Department offers direct and guaranteed loans through credit programs in the FFAS mission 

area through the FSA and the CCC, and in the RD mission area. 

FARM AND FOREIGN AGRICULTURAL SERVICES (FFAS) MISSION AREA

The FFAS mission area helps keep America’s farmers and ranchers in business as they face the 

uncertainties of weather and markets. FFAS delivers commodity, credit, conservation, disaster,

and emergency assistance programs that help strengthen and stabilize the agricultural economy. 

FFAS contributes to the vitality of the farm sector with programs that encourage the expansion 

of export markets for U.S. agriculture. 

FSA offers direct and guaranteed loans to farmers who are temporarily unable to obtain private, 

commercial credit, and nonprofit entities that are engaged in the improvement of the nation’s 

agricultural community. Often, FSA borrowers are beginning farmers who cannot qualify for 

conventional loans due to insufficient financial resources. Additionally, the agency helps 

established farmers who have suffered financial setbacks from natural disasters, or have limited 

resources to maintain profitable farming operations. FSA officials also provide borrowers with 

supervision and credit counseling.

FSA’s mission is to provide supervised credit. FSA works with each borrower to identify 

specific strengths and weaknesses in farm production and management, and provides alternatives 

to address weaknesses. FSA is able to provide certain loan servicing options to assist borrowers 

whose accounts are distressed or delinquent. These options include reamortization, restructuring, 

loan deferral, lowering interest rates, acceptance of easements, and debt write-downs. The 

eventual goal of FSA’s farm credit programs is to graduate its borrowers to commercial credit.

CCC’s foreign programs provide economic stimulus to both the U.S. and foreign markets, while 

giving humanitarian assistance to the most-needy people throughout the world. CCC offers both 

credit guarantee and direct credit programs for buyers of U.S. exports, suppliers, and sovereign 

countries in need of food assistance.

CCC permits debtor nations to reschedule debt under the aegis of the Paris Club. The Paris Club 

is an informal group of official creditors whose role is to facilitate debt treatments based on an 

internationally recognized set of rules and principles, facilitated by the senior officials of the 

French Treasury. Its sole purpose is to assess, on a case-by-case basis, liquidity problems faced 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 9 9

by economically disadvantaged countries. The general premise of Paris Club is to provide 

disadvantaged nations short-term liquidity relief to enable them to re-establish their credit 

worthiness. The U.S. Departments of State and Treasury lead the U.S. Delegation and 

negotiations for all U.S. Agencies. 

CCC also provides loans for Farm and Sugar Storage Facilities (FSFL). FSFL provides 

low-interest financing for producers to build or upgrade farm storage and handling facilities. The 

2008 Farm Bill added hay and renewable biomass as eligible FSFL commodities, extended the 

maximum loan term to 12 years, and increased the maximum loan amount to $500,000. 

FARM AND FOREIGN AGRICULTURAL SERVICE LIST OF PROGRAMS 

Farm Service Agency Commodity Credit Corporation 

Direct Farm Ownership 

Direct Farm Operating 

Direct Emergency Loans 

Direct Indian Land Acquisition 

Direct Boll Weevil Eradication 

Direct Seed Loans to Producers 

Direct Conservation 

Guaranteed Farm Operating 

Subsidized/Unsubsidized 

Guaranteed Farm Ownership Unsubsidized 

Guaranteed Conservation 

American Recovery and Reinvestment Fund 

General Sales Manager Export Credit 

Guarantee Program 

Facility Program Guarantee 

P.L. 480 Title 1 Program 

Direct Farm Storage Facility 

Direct Sugar Storage Facilities 

RURAL DEVELOPMENT (RD) MISSION AREA 

Each year, RD programs create or preserve tens of thousands of rural jobs and provide or 

improve the quality of rural housing. To leverage the impact of its programs, RD works with 

State, local and Indian Tribal governments, as well as private and not-for-profit organizations 

and user-owned cooperatives. 

Through its rural housing loan and grant programs, RD provides affordable housing and essential 

community facilities to rural communities. Rural housing programs help finance new or 

improved housing for moderate, low, and very low-income families each year. The programs 

also help rural communities finance, construct, enlarge, or improve fire stations, libraries, 

hospitals and medical clinics, industrial parks, and other community facilities. 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 0 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

The Rural Business Program goal is to promote a dynamic business environment in rural 

America. RD partners with the private sector and community-based organizations to provide 

financial assistance and business planning. It also provides technical assistance to rural 

businesses and cooperatives, conducts research into rural economic issues, and provides 

cooperative educational materials to the public. 

The Rural Utilities Program helps to improve the quality of life in rural America through a 

variety of loan programs for electric energy, telecommunications, and water and environmental 

projects. This program leverages scarce Federal funds with private capital for investing in rural 

infrastructure, technology, and development of human resources. 

RD programs provide certain loan servicing options to borrowers whose accounts are distressed 

or delinquent. These options include re-amortization, restructuring, loan deferral, lowering 

interest rate, acceptance of easements, and debt write-downs. The choice of servicing options 

depends on the loan program and the individual borrower. 

RURAL DEVELOPMENT LIST OF PROGRAMS 

Rural Housing Program Rural Business Program Rural Utilities Program 

Single Family Housing Direct 

Loans 

Single Family Housing 

Guaranteed Loans 

Self Help Housing Direct Loans 

Single Family Housing Credit 

Sales

Farm Labor Housing Direct Loans 

Multi-Family Housing Direct 

Loans 

Multi-Family Housing 

Guaranteed Loans 

Multi-Family Housing-Credit 

Sales

Multi-Family Housing Relending 

Program 

Multi-Family Housing 

Revitalization Program 

Community Facilities Direct 

Loans 

Community Facilities 

Guaranteed Loans 

Business and Industry Direct 

Loans 

Business and Industry 

Guaranteed Loans 

Intermediary Relending 

Program Direct Loans 

Rural Economic 

Development Direct Loans 

Biorefinery Guaranteed 

Loans 

Rural Energy for America 

Guaranteed Loans 

Rural Microenterprise 

Investment Direct Loans 

Water and Environmental 

Direct Loans 

Water and Environmental 

Guaranteed Loans 

Electric Direct Loans 

Electric Guaranteed Loans 

Telecommunications 

Direct Loans 

Federal Financing BankElectric 

Federal Financing BankTelephone 

Distance Learning and 

Telemedicine Direct 

Broadband 

Telecommunications 

Services 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 0 1 

EVENTS AND CHANGES HAVING A SIGNIFICANT AND MEASURABLE EFFECT ON 

SUBSIDY RATES, SUBSIDY EXPENSE, AND SUBSIDY RE-ESTIMATES 

The Federal Credit Reform Act of 1990, as amended, governs the proprietary and budgetary 

accounting treatment of direct and guaranteed loans. The long-term cost to the Government for 

direct loans or loan guarantees is referred to as “subsidy cost.” Under the act, subsidy costs for 

loans obligated beginning in FY 1992 are recognized at the net present value of projected 

lifetime costs in the year the loan is disbursed. Subsidy costs are revalued annually. Components 

of subsidy include interest subsidies, defaults, fee offsets, and other cash flows. 

The annual reestimate process updates the budget assumptions with actual portfolio performance, 

interest rates, and updated estimates for future loan performance. The FY 2015 reestimate 

process resulted in a $194 million increase in the post-1991 estimated cost of the direct loan 

portfolio and a $880 million increase in the post-1991 estimated cost of the guaranteed loan 

portfolio, primarily comprised of the following programs. 

Direct Loans 

The “farm” category of loans is comprised of direct loans under the Agricultural Credit 

Insurance Fund (ACIF), along with four categories of direct loans under Commodity Credit 

Corporation—Farm Storage, Sugar Storage, Emergency Boll Weevil, and Apple loans. The farm 

category had a total reestimate of $209 million. ACIF comprised $187 million of the total 

reestimate. CCC loans comprised the remaining $22 million. The total consisted of $312 million 

in upward reestimates and $103 million in downward reestimates. The majority of the reestimate 

was in the farm ownership and farm operating programs, comprising $254 million of the upward 

reestimate. 

Direct ownership had an upward reestimate of $161 million and direct operating had an upward 

reestimate of $93 million. The upward reestimates are largely due to three items in particular. 

The first was a major change in the direct farm loan cash flow model that revised the

amortization methodology, resulting in accelerated timing of scheduled principal in each 

program. This change also reduced the amount of scheduled interest over the life of the cohort, 

magnified by the change in the interest rate that was used to project scheduled interest payments. 

And finally, the single effective rate (SER) for the 2014 cohort was recalculated during the 

FY 2015 reestimates, which resulted in an increased SER and a significant upward reestimate. 

The direct farm operating program had an upward reestimate of $93 million. The upward 

reestimate can also be attributed to the revised amortization methodology, which resulted in a 

substantial decrease in scheduled interest. Direct operating also had a large downward reestimate 

of $39 million. The downward reestimate is largely due to the econometric update which reduced 

total principal write down rates, thus decreasing default subsidy. 

It is also important to note that the financing account interest adjustment (FAIA) component of 

the reestimate across all direct farm loan programs had a significant impact on the reestimates. 

The net number for FAIA in direct operating was $10 million, consisting of $51 million upward 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 0 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

and $41 million downward in various cohorts. The net amount of FAIA for direct ownership was 

$34 million, which consisted of $41 million upward and $6 million downward. 

The Direct Broadband Treasury Rate Program had an upward reestimate of $165 million in 

FY 2015 and $119 million in FY 2014 due to increased delinquencies, write-offs, and lower 

recoveries The Direct Electric Programs had an overall downward reestimate of $199 million 

comprised primarily of a $210 million downward reestimate in the Federal Financing Bank 

(FFB) Program and a $62 million upward reestimate in the FFB Underwriting Program. The FFB 

Program reestimate was due primarily to lower discount rates in the newest cohorts. The upward 

reestimate to the FFB Underwriting Program was caused principally by lower expected borrower 

interest rates for this variable rate program. The Direct Electric Programs had a $75 million 

upward reestimate in FY 2014 due to changes in borrower rates and discount rates across the 

newest cohorts. 

The Water and Environmental Program had a downward reestimate of $133 million as compared 

to a $27 million downward reestimate in FY 2014. The agency incorporated adjustments to the 

prepayment assumption in FY 2014 to account for higher than expected prepayments in the 

historical average data. These adjustments were not made in FY 2015. 

Guaranteed Loans 

The Guaranteed Single Family Housing Program had a net upward reestimate of $1 billion due 

to substantially higher loss settlement payments following the housing crisis. The agency 

incorporated adjustments directly into its loss settlement payment assumptions for the 

2009–2013 cohorts in FY 2014 to counteract the effect of the elevated loss settlement payments 

following the housing crisis. In FY 2015, the agency calculated an initial upward reestimate of 

$3 billion without any adjustments to the model assumptions and performed independent 

estimates of the liability for loan guarantees for the 2010–2015 cohorts that were believed to be 

more reasonably representative of the expected future performance of the program. The 

adjustment recorded to counteract the effect of the increased projected loss settlement payments 

in FY 2015 was $2 billion. 

The Guaranteed Single Family Housing Program recorded a net upward adjustment of 

$726 million in FY 2014 due primarily to increased actual and projected loss settlement 

payments following the housing crisis. The 2012–2014 cohorts had a downward adjustment of 

$200 million to reflect lower than average expected losses as a result of higher credit 

requirements in those years. 

The Guaranteed Business and Industry Programs had downward reestimates of $102 million in 

FY 2015 and $122 million in FY 2014 due to lower claims and higher recoveries. 

Loan Modifications 

A modification is any Government action different from the baseline assumptions that affect the 

subsidy cost, such as a change in the terms of the loan contract. The cost of a modification is the 

difference between the present value of the cash flows before and after the modification. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 0 3 

Multi-Family Housing direct loan modifications related to the revitalization program, which 

began in FY 2006, continued through FY 2015. In this program, Rural Development provides 

restructured loans and grants to development owners to revitalize multi-family housing 

development projects in order to extend the affordable use without displacing tenants due to the 

increased rent. 

In FY 2014, two Electric borrowers were granted loan term extension modifications, and in 2015 

an additional Electric borrower was modified. No other terms of the original notes changed other 

than the final maturity dates. 

The Debt Reduction Fund is used to account for CCC’s “modified debt.” Debt is considered to 

be modified if the original debt has been reduced or the interest rate of the agreement changed. In 

contrast, when debt is "rescheduled," only the date of payment is changed. Rescheduled debt is 

carried in the original fund until paid. With one exception, all outstanding CCC modified debt is 

carried in the Debt Reduction Fund and is governed by the Federal Credit Reform Act of 1990, 

as amended. 

Foreclosed Property 

Property is acquired largely through foreclosure and voluntary conveyance. Acquired properties 

associated with loans are reported at their market value at the time of acquisition. The projected 

future cash flows associated with acquired properties are used in determining the related 

allowance (at present value). 

For FY’s 2015 and 2014, rural housing program properties consist primarily of 1,607 and 1,667 

rural single-family dwellings, respectively. The average holding period for single family housing 

properties in inventory for FY’s 2015 and 2014 was 16 and 15 months, respectively. As of 

September 30, 2015 and 2014, FSA-Farm Loan Program properties consist primarily of 90 and 

87 farms, respectively. The average holding period for these properties in inventory for FY 2015

and FY 2014 was 56 and 46 months, respectively. Certain properties can be leased to eligible 

individuals. 

Other Information 

Non-performing loans are defined as receivables that are in arrears by 90 or more days, or are on 

rescheduling agreements until such time two consecutive payments have been made following 

the rescheduling. When RD, FSA and CCC calculate loan interest income, however, the 

recognition of revenue is deferred. Late interest is accrued on arrears. 

Approximately $16,500 million and $17,100 million of RHS unpaid loan principal as of 

September 30, 2015 and 2014 were receiving interest credit, respectively. If those loans 

receiving interest credit had accrued interest at the full-unreduced rate, interest income would 

have been approximately $816 million and $854 million higher for FY 2015 and FY 2014,

respectively. 

At the end of FY’s 2015 and 2014, the Rural Development housing portfolio contained 

approximately 62,400 and 64,300 restructured loans with an outstanding unpaid principal 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 0 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

balance of $2,900 million and $2,800 million as of September 30, 2015 and 2014, respectively. 

At the end of FY 2015 and FY 2014, the farm loan portfolio contained approximately 16,778 and 

17,368 restructured loans with an outstanding unpaid principal balance of $1,051 million and 

$1,074 million, respectively. Direct credit and credit guarantee principal receivables in the food 

aid and export programs under rescheduling agreements as of September 30, 2015 and 2014

were $1,554 million and $1,742 million, respectively. 

Reclassifications 

In FY2014, interest related to technical reestimates was reclassified from interest rate reestimates 

in Table 2, Table 3, Table 7, and Table 8. Foreclosed property and loans acquired and claim 

payments to lenders were reclassified from other adjustments in Table 7. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 0 5 

Table 1: Direct Loan and Loan Guarantees, Net 

FY 2015 Loans Present Value of Assets

Direct Loans Receivable, Interest Foreclosed Value Related to

Gross Receivable Property Allowance Loans

Obligated Pre-1992

Farm $ 378 $ 23 5$ $ (19) $ 387

Export - - - - -

Food Aid 2,397 912 (2,145) - 1,164

Housing 7,445 127 17 (17) 7,572

Electric 2,677 5 (1,338) - 1,344

Telecommunications 194 - - - 194

Water and Environmental 479 4 - (1) 482

Business and Industry - - - - -

Economic Development 14 - - - 14

Pre-1992 Total 13,584 1,071 22 (3,520) 11,157

Obligated Post-1991

Farm 9,288 151 8 (434) 9,013

Export - - - - -

Food Aid 921 47 - (377) 591

Housing 23,598 119 76 (2,705) 21,088

Electric 45,199 23 - (676) 44,546

Telecommunications 4,351 1 - (137) 4,215

Water and Environmental 12,082 87 - (305) 11,864

Business and Industry 39 - - 10 49

Economic Development 577 2 - (126) 453

Post-1991 Total 96,055 430 84 (4,750) 91,819

Cushion of Credit (5,070) - - - (5,070)

Total Direct Loan Program Receivables 104,569 1,501 106 (8,270) 97,906

Defaulted Guarantee Loans

Pre-1992

Farm - - - - -

Export 83 217 - (270) 30

Food Aid - - - - -

Housing - - - - -

Electric - - - - -

Telecommunications - - - - -

Water and Environmental - - - - -

Business and Industry - - - - -

Economic Development - - - - -

Pre-1992 Total 83 217 - (270) 30

Post-1991

Farm 136 1 - (134) 3

Export 599 38 - (361) 276

Food Aid - - - - -

Housing 1,178 1 (1,130) - 49

Electric - - - - -

Telecommunications - - - - -

Water and Environmental - - - - -

Business and Industry 295 2 - (53) 244

Economic Development - - - - -

Post-1991 Total 2,208 42 (1,678) - 572

Total Defaulted Guarantee Loans 2,291 259 (1,948) - 602

Loans Exempt from Credit Reform Act:

Commodity Loans 397 2 - (13) 386

Other Foreign Receivables - - - - -

Total Loans Exempt 397 2 - (13) 386

Total Direct Loan and Loan Guarantees, Net $ 98,894
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 0 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 1: Direct Loan and Loan Guarantees, Net (cont’d) 

FY 2014 Loans Present Value of Assets

Direct Loans Receivable, Interest Foreclosed Value Related to

Gross Receivable Property Allowance Loans

Obligated Pre-1992

Farm $ 450 $ 30 5$ $ (30) $ 455

Export - - - - -

Food Aid 2,644 880 (2,362) - 1,162

Housing 7,799 57 24 (19) 7,861

Electric 3,065 5 (1,230) - 1,840

Telecommunications 253 - - - 253

Water and Environmental 616 5 - (1) 620

Business and Industry 17 - - - 17

Economic Development - - - - -

Pre-1992 Total 14,844 977 29 (3,642) 12,208

Obligated Post-1991

Farm 8,590 143 10 (231) 8,512

Export - - - - -

Food Aid 999 46 - (394) 651

Housing 23,142 148 78 (2,890) 20,478

Electric 48,140 24 (1,016) - 47,148

Telecommunications 4,285 1 - 55 4,341

Water and Environmental 11,952 94 - (410) 11,636

Business and Industry 35 - - 26 61

Economic Development 564 2 - (128) 438

Post-1991 Total 97,707 458 88 (4,988) 93,265

Cushion of Credit (5,069) - - - (5,069)

Total Direct Loan Program Receivables 107,482 1,435 117 (8,630) 100,404

Defaulted Guarantee Loans

Pre-1992

Farm - - - - -

Export 92 214 - (268) 38

Food Aid - - - - -

Housing - - - - -

Electric - - - - -

Telecommunications - - - - -

Water and Environmental - - - - -

Business and Industry - - - - -

Economic Development - - - - -

Pre-1992 Total 92 214 - (268) 38

Post-1991

Farm 127 1 - (125) 3

Export 638 19 - (349) 308

Food Aid - - - - -

Housing 1,006 2 - (958) 50

Electric - - - - -

Telecommunications - - - - -

Water and Environmental - - - - -

Business and Industry 273 2 - (43) 232

Economic Development - - - - -

Post-1991 Total 2,044 24 (1,475) - 593

Total Defaulted Guarantee Loans 2,136 238 (1,743) - 631

Loans Exempt from Credit Reform Act:

Commodity Loans 210 1 - (3) 208

Other Foreign Receivables - - - - -

Total Loans Exempt 210 1 - (3) 208

Total Direct Loan and Loan Guarantees, Net $ 101,243
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 0 7 

Table 2: Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991) Direct Loans 

FY 2015 FY 2014

Beginning balance of the subsidy cost allowance $ 6,461 $ 6,477

Add: Subsidy expense for direct loans disbursed during the year by component

Interest rate differential costs (64) (4)

Default costs (net of recoveries) 169 161

Fees and other collections (29) (13)

Other subsidy costs (69) (78)

Total subsidy expense prior to adjustments and reestimates 7 66

Adjustments

Loan modifications 3 (23)

Fees received 68 66

Loans written off 146 (683)

Subsidy allowance amortization 184 (179)

Other (638) 556

Total subsidy cost allowance before reestimates 6,231 6,280

Add or subtract subsidy reestimates by component

Interest rate reestimate 90 65

Technical/default reestimate 104 116

Total reestimates 194 181

Ending balance of the subsidy cost allowance $ 6,425 $ 6,461
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 0 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 3: Subsidy Expense for Direct Loans by Program and Component 

FY 2015

Interest Fees and Other Subtotal Total Interest Rate Technical Total Total Subsidy

Differential Defaults Collections Other Subsidy Modifications Reestimates Reestimates Reestimates Expense

Direct Loan Programs

Farm $ (23) $ 84 $ (1) $ (2) $ 58 $ - $ 51 $ 161 $ 212 $ 270

Export - - - - - - - - - -

Food Aid - - - - - - - 15 15 15

Housing (1) 52 - (3) 48 4 17 40 57 109

Electric (134) 13 (28) (42) (191) (1) 41 (241) (200) (392)

Telecommunications (1) 18 - (9) 8 - (33) 256 223 231

Water and Environmental 83 2 - (13) 72 - 15 (148) (133) (61)

Business and Industry 1 - - - 1 - 18 18 19

Economic Development 11 - - - 11 - (1) 3 2 13

Total Direct Loan Subsidy Expense $ (64) $ 169 $ (29) $ (69) 7$ $ 3 $ 90 $ 104 $ 194 $ 204

FY 2014

Interest Fees and Other Subtotal Total Interest Rate Technical Total Total Subsidy

Differential Defaults Collections Other Subsidy Modifications Reestimates Reestimates Reestimates Expense

Direct Loan Programs

Farm $ (8) 91$ $ - (19) $ 64$ $ - $ (21) $ (260) $ (281) $ (217)

Export - - - - - - - - - -

Food Aid - - - - - - - 2 2 2

Housing (1) 43 (1) - 41 1 165 22 187 229

Electric (100) 13 (13) (42) (142) (24) (60) 135 75 (91)

Telecommunications (1) 12 (5) - 6 - 7 162 169 175

Water and Environmental 93 2 (11) - 84 - (20) 48 28 112

Business and Industry 7 - - - 7 - (4) 8 4 11

Economic Development 6 - - - 6 - (2) (1) (3) 3

Total Direct Loan Subsidy Expense $ (4) 161$ $ (13) (78) $ 66$ $ (23) $ 65 $ 116 $ 181 $ 224
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 0 9 

Table 4: Total Amount of Direct Loans Disbursed (Post-1991) 

FY 2015 FY 2014

Direct Loan Programs

Farm 2,306$ 2,120$ 

Export - -

Food Aid - -

Housing 1,821 1,518

Electric 3,853 3,869

Telecommunications 573 431

Water and Environmental 899 938

Business and Industry 7 5

Economic Development 74 75

Total Direct Loans Disbursed 9,533$ 8,956$ 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 1 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 5: Guaranteed Loans Outstanding 

Pre - 1992 Post - 1991 Total Pre - 1992 Post - 1991 Total

FY 2015

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Face Value Face Value Face Value Guaranteed Guaranteed Guaranteed

Loan Guarantee Programs

Farm $ 5 $ 13,856 $ 13,861 $ 4 $ 12,487 $ 12,491 

Export - 2,929 2,929 - 2,871 2,871 

Food Aid - - - - - - 

Housing 2 113,247 113,249 2 101,900 101,902 

Electric 38 178 216 38 178 216 

Telecommunications - - - - - - 

Water and Environmental - 112 112 - 100 100 

Business and Industry 5 6,115 6,120 4 4,520 4,524 

Economic Development - - - - - - 

Total Guarantees Disbursed $ 50 $ 136,437 $ 136,487 $ 48 $ 122,056 $ 122,104 

Pre - 1992 Post - 1991 Total Pre - 1992 Post - 1991 Total

FY 2014 Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Outstanding 

Principal,

Face Value Face Value Face Value Guaranteed Guaranteed Guaranteed

Loan Guarantee Programs

Farm $ 7 $ 13,202 $ 13,209 $ 6 $ 11,894 $ 11,900 

Export - 3,658 3,658 - 3,585 3,585 

Food Aid - - - - - - 

Housing 2 102,865 102,867 2 92,560 92,562 

Electric 65 183 248 65 183 248 

Telecommunications - - - - - - 

Water and Environmental - 96 96 - 85 85 

Business and Industry 9 6,313 6,322 8 4,698 4,706 

Economic Development - - - - - - 

Total Guarantees Disbursed $ 83 $ 126,317 $ 126,400 $ 81 $ 113,005 $ 113,086 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1 1 

Table 6: Liability for Loan Guarantees (Present Value Method for Pre-1992 Guarantees) 

FY 2015

Liabilities for 

Losses on Pre1992 

Guarantees 

Present Value

Liabilities for Loan 

Guarantees on Post1991 Guarantees 

Present Value

Total Liabilities for 

Loan Guarantees

Loan Guarantee Programs

Farm $ - $ 189 $ 189

Export - 11 11

Food Aid - - -

Housing - 4,832 4,832

Electric - - -

Telecommunications - - -

Water and Environmental - 1 1

Business and Industry - 557 557

Economic Development - - -

Total Liability for Loan Guarantees $ - $ 5,590 $ 5,590

FY 2014

Liabilities for 

Losses on Pre1992 

Guarantees 

Present Value

Liabilities for Loan 

Guarantees on 

Post-1991 

Guarantees 

Present Value

Total Liabilities for 

Loan Guarantees

Loan Guarantee Programs

Farm $ - $ 172 $ 172

Export - 25 25

Food Aid - - -

Housing - 4,513 4,513

Electric - - -

Telecommunications - - -

Water and Environmental - 1 1

Business and Industry - 662 662

Economic Development - - -

Total Liability for Loan Guarantees $ - $ 5,373 $ 5,373
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 1 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 7: Schedule for Reconciling Loan Guarantee Liability 

FY 2015 FY 2014

Beginning balance of the loan guarantee liability 5,373$ 4,866$ 

Add:Subsidy expense for guaranteed loans disbursed during the year by component

Interest supplement costs 1 1

Default costs (net of recoveries) 1,082 982

Fees and other collections (1,090) (935)

Other subsidy costs (14) -

Total of the above subsidy expense components (21) 48

Adjustments

Loan guarantee modifications - -

Fees received 670 611

Interest supplements paid (14) (18)

Foreclosed property and loans acquired (277) (21)

Claim payments to lenders (1,345) (632)

Interest accumulation on the liability balance 95 95

Other 229 (89)

Ending balance of the subsidy cost allowance before reestimates 4,710 4,860

Add or subtract subsidy reestimates by component:

Interest rate reestimate (13) 36

Technical/default reestimate 893 477

Total of the above reestimate components 880 513

Ending balance of the loan guarantee liability 5,590$ 5,373$ 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1 3 

Table 8: Subsidy Expense for Loan Guarantees by Program and Component 

FY 2015

Total

Interest Fees and Other Total Interest Rate Technical Total Subsidy

Loan Guarantee Programs Supplement Defaults Collections Other Subtotal Modifications Reestimates Reestimates Reestimates Expense

Farm -$ $ 32 $ -$ (18) $ 14 -$ -$ $ (12) $ (12) 2$ 

Export - - 12 (14) (2) - - (13) (13) (15)

Food Aid - - - - - - - - - -

Housing 1 951 (1,049) - (97) - 1,067 (14) 1,053 956

Electric - - - - - - - - - -

Telecommunications - - - - - - - - - -

Water and Environmental - - - - - - - - - -

Business and Industry - 99 - (35) 64 - 1 (149) (148) (84)

Economic Development - - - - - - - - - -

Total Loan Guarantee Subsidy Expense $ 1 $ 1,082 $ (1,090) $ (14) $ (21) $ - $ (13) $ 893 $ 880 $ 859 

FY 2014

Total

Interest Fees and Other Total Interest Rate Technical Total Subsidy

Loan Guarantee Programs Supplement Defaults Collections Other Subtotal Modifications Reestimates Reestimates Reestimates Expense

Farm $ - 25$ $ (13) - $ 12$ $ - $ - $ (4) $ (4) $ 8

Export - - - - - - - (38) (38) (38)

Food Aid - - - - - - - - - -

Housing 1 864 (888) (23) - - 33 687 720 697

Electric - - - - - - - - - -

Telecommunications - - - - - - - - - -

Water and Environmental - - - - - - - - - -

Business and Industry - 93 - (34) 59 - 3 (16 8) (165) (106)

Economic Development - - - - - - - - - -

Total Loan Guarantee Subsidy Expense $ 1 $ 982 $ (935) $ - $ 48 $ - $ 36 $ 477 $ 513 $ 561 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 1 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 9: Guaranteed Loans Disbursed 

Principal, Face 

Value Disbursed

Principal, 

Guaranteed 

Disbursed

Principal, 

Face Value 

Disbursed

Principal, 

Guaranteed 

Disbursed

Loan Guarantee Programs

Farm $ 3,250 $ 2,929 2,662$ 2,398$ 

Export 2,020 1,982 2,204 2,160

Food Aid - - - -

Housing 19,862 17,874 19,088 17,177

Electric - - - -

Telecommunications - - - -

Water and Environmental 22 19 22 19

Business and Industry 877 679 830 643

Economic Development - - - -

Total Guaranteed Loans Disbursed $ 26,031 $ 23,483 24,806$ 22,397$ 

FY 2015 FY 2014

Table 10: Administrative Expenses 

FY 2015 FY 2014

Direct Loan Programs $ 441 $ 472

Guaranteed Loan Programs 476 379

Total Administrative Expenses $ 917 $ 851
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1 5 

Table 11: Subsidy Rates for Direct Loans (percentage) 

FY 2015 Interest 

Differential Defaults

Fees and 

Other 

Collections Other Total

Direct Loan Programs

Farm Ownership (2.36) 2.49 (1.49) - (1.36)

Farm Operating (1.52) 6.46 0.10 - 5.04

Emergency Disaster (7.22) 9.10 0.59 - 2.47

Indian Tribe Land Acquisition (17.80) - - - (17.80) 

Boll Weevil Eradication (2.46) - (0.54) - (3.00)

Indian Highly Fractionated Land (5.76) 6.58 (0.91) - (0.09)

Farm Storage Facility Loan Program (2.50) 0.01 (0.24) (0.27) (3.00)

Sugar Storage Facility Loan Program (2.67) 0.02 (0.36) - (3.01)

Multi-Family Housing Relending Demo 35.41 - (0.01) - 35.40

Multi-Family Housing Revitalization Seconds 60.45 0.33 (0.06) - 60.72

Multi-Family Housing Revitalization Zero 56.18 0.25 (0.20) - 56.23

Community Facility Loans (14.80) 2.46 (0.07) - (12.41) 

Section 502 Single-Family Housing 3.79 4.22 (0.63) - 7.38

Section 515 Multi-Family Housing (11.62) 0.50 45.63 - 34.51

Section 504 Housing Repair 18.72 (0.06) (4.63) - 14.03

Section 514 Farm Labor Housing 33.06 0.07 (0.93) - 32.20

Section 523 Self-Help Housing (2.53) - 0.05 - (2.48) 

Section 524 Site Development (5.65) - 0.83 - (4.82) 

Single-Family Housing Credit Sales (11.17) 2.15 2.61 - (6.41) 

Rural Microenterprise Direct Loans 9.49 3.32 - - 12.81 

Intermediary Relending Program 32.02 0.56 (1.78) - 30.80

Rural Economic Development Loans 12.80 0.01 (0.04) - 12.77

Water and Waste Disposal Loans 3.08 0.10 (3.79) - (0.61)

FFB Electric Loans (4.64) 0.07 (1.07) - (5.64)

Treasury Telecommunication Loans 0.21 0.26 (1.65) - (1.18)

FFB Telecommunications Loans 0.73 0.10 (4.32) - (3.49)

Broadband Treasury Loans 21.49 0.19 (3.00) - 18.68
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 1 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Table 12: Subsidy Rates for Loan Guarantees (percentage) 

FY 2015 Interest 

Differential Defaults

Fees and 

Other 

Collections Other Total

Guaranteed Loan Programs

Farm Ownership—Unsubsidized - 1.19 (1.30) (0.11) - 

Farm Operating—Unsubsidized - 2.39 (1.33) 1.06 - 

Conservation—Guaranteed - 0.99 (1.30) (0.31) - 

GSM 102 - 0.21 (1.26) (1.05) - 

Export Guarantee Program—Facilities - 0.38 (4.78) (4.40) - 

Community Facility Loan Guarantees - 5.66 (0.88) 4.78 - 

Guaranteed 538 Multi-Family Housing - 6.51 (7.78) (1.27) - 

Guaranteed 502 Single-Family Housing - 4.87 (5.47) (0.60) - 

Business and Industry Loan Guarantees - 9.18 (4.07) 5.11 - 

Rural Business Investment Program - 17.19 (6.99) 10.20 - 

Renewable Energy Loan Guarantees - 11.82 (1.24) 10.58 - 

Section 9003 Loan Guarantees - 42.43 (4.41) 2.30 40.32 

Water and Waste Disposal Loans - 1.45 (0.86) 0.59 - 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1 7 

Note 8: Inventory and Related Property, Net 

Commodity inventory is restricted for the purpose of alleviating distress caused by natural disasters, providing emergency food 

assistance in developing countries and providing price support and stabilization. 

Commodities: Unit of Measure Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

Corn Meal Pounds - $ - 53 $ 11 - $ - (53) $ (11) - $ - - $ -

Blended Foods Pounds 18 7 125 38 - - (130) (42) - - 13 3

Dry Edible Beans Cwt. - - - 2 - - - (2) - - - -

Dry Whole Peas Cwt. - 2 2 40 - - (2) (40) - - - 2

Emergency Food Ration Bars Pounds - - 16 24 - - (14) (21) - - 2 3

Grain Sorghum Bushels - - 18 108 - - (18) (108) - - - -

Lentils Dry Cwt. - 2 1 19 - - (1) (19) - - - 2

Nonfat Dry Milk Pounds - - - - - - - - - - - -

Rice Products Cwt., Pounds - 3 1 20 - - (1) (23) - - - -

Meat Pounds - - - - - - - - - - - -

Vegetable Oil Pounds 32 20 183 91 - - (192) (99) - - 23 12

Wheat Products Bushels, Pounds - - 54 89 - - (52) (89) - - 2 -

Other Various - 3 - 21 - - - (44) - 50 - 30

Total Commodities XXXX $ 37 XXXX $ 463 XXXX $ - XXXX $ (498) XXXX $ 50 XXXX $ 52

Allowance for losses (1)

Barter Delivery Obligations (BDO) 4

Total Inventory and Related Property, Net $ 55

Beginning Inventory Acquisitions Collateral Acquired Donations Other Ending Inventory

FY 2015 FY 2015

Commodities: Unit of Measure Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

Corn Meal Pounds - $ - 73 $ 14 - $ - (73) $ (14) - $ - - $ -

Blended Foods Pounds 25 8 95 30 - - (101) (31) - - 18 7

Dry Edible Beans Cwt. - - - 8 - - - (8) - - - -

Dry Whole Peas Cwt. - 4 2 43 - - (2) (45) - - - 2

Emergency Food Ration Bars Pounds 1 1 6 9 - - (6) (10) - - - -

Grain Sorghum Bushels - 1 16 98 - - (16) (99) - - - -

Lentils Dry Cwt. - 4 - 9 - - - (11) - - - 2

Nonfat Dry Milk Pounds - - - - - - - - - - - -

Rice Products Cwt., Pounds - 2 2 41 - - (2) (40) - - - 3

Meat Pounds - - - - - - - - - - - -

Vegetable Oil Pounds 23 15 176 105 - - (167) (100) - - 32 20

Wheat Products Bushels, Pounds 6 1 73 136 - - (80) (137) - - - -

Other Various - 35 - 48 - 154 - (81) - (153) - 3

Total Commodities XXXX $ 71 XXXX $ 541 XXXX $ 154 XXXX $ (576) XXXX $ (153) XXXX $ 37

Allowance for losses (2)

Barter Delivery Obligations (BDO) 3

Total Inventory and Related Property, Net $ 38

Beginning Inventory Acquisitions Collateral Acquired Donations Other Ending Inventory

FY 2014 FY 2014
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 1 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Note 9: General Property, Plant, and Equipment (PP&E), Net 

FY 2015 Useful Net

Life Accumulated Book

Category (Years) Cost Depreciation Value

Land and Land Rights $ 74 $ - $ 74

Improvements to Land 10 - 50 755 (713) 42

Construction-in-Progress 132 - 132

Buildings, Improvements and Renovations 15 - 30 2,909 (1,730) 1,179

Other Structures and Facilities 15 - 50 1,834 (1,566) 268

Equipment 5 - 20 1,670 (1,242) 428

Assets Under Capital Lease 3 - 20 49 (38) 11

Leasehold Improvements 10 77 (71) 6

Internal-Use Software 5 - 8 983 (658) 325

Internal-Use Software in Development 202 - 202

Total $ 8,685 $ (6,018) $ 2,667

FY 2014 Useful Net

Life Accumulated Book

Category (Years) Cost Depreciation Value

Land and Land Rights $ 75 $ - $ 75

Improvements to Land 10 - 50 755 (697) 58

Construction-in-Progress 130 - 130

Buildings, Improvements and Renovations 15 - 30 2,966 (1,687) 1,279

Other Structures and Facilities 15 - 50 1,841 (1,530) 311

Equipment 5 - 20 1,601 (1,209) 392

Assets Under Capital Lease 3 - 20 58 (43) 15

Leasehold Improvements 10 77 (67) 10

Internal-Use Software 5 - 8 682 (563) 119

Internal-Use Software in Development 452 - 452

Total $ 8,637 $ (5,796) $ 2,841
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 1 9 

Note 10. Stewardship PP&E 

Stewardship PP&E consist of assets whose physical properties resemble those of general PP&E 

that are traditionally capitalized in the financial statements. Due to the nature of these assets, 

valuation would be difficult and matching costs with specific periods would not be meaningful. 

Stewardship PP&E include heritage assets and stewardship land. 

HERITAGE ASSETS 

Heritage assets are unique and are generally expected to be preserved indefinitely. Heritage 

assets may be unique because they have historical or natural significance, are of cultural, 

educational or artistic importance, or have significant architectural characteristics. The assets are 

reported in terms of physical units rather than cost, fair value, or other monetary values. No 

amounts are shown on the balance sheet for heritage assets, except for multi-use heritage assets 

in which the predominant use of the asset is in general government operations. The costs of 

acquisition, betterment, or reconstruction of multi-use heritage assets is capitalized as general 

PP&E and depreciated. The costs of acquiring, constructing, improving, reconstructing, or 

renovating heritage assets, other than multi-use is considered an expense in the period incurred 

when determining the net cost of operations. Heritage assets consist of collection type, such as 

objects gathered and maintained for exhibition, for example library collections; and 

non-collection-type, such as memorials, monuments and buildings. 

National Forests, National Grasslands and Other Sites

FS manages its heritage assets by site. Sites include national forests, national grasslands, other 

FS-managed sites, and non FS- managed sites such as museums and university laboratories. The 

mission of the FS is to sustain the health, diversity, and productivity of the Nation’s forests and 

grasslands to meet the needs of present and future generations. The FS strives to achieve quality 

land management under the sustainable multiple-use management concept, to deliver the 

necessary products and services that are essential for enhancing natural resource stewardship, 

and to meet the diverse needs of people. 

Heritage Asset categories can include the following: 

Priority Heritage Assets (PHA): Heritage assets of distinct public value that are, or should be, 

actively maintained, and meet one or more of the following criteria: 

 The property is recognized through an official designation, such as a listing on the National 

Register of Historic Places, State register, etc. 

 The property is recognized through prior investment in preservation, interpretation, and use. 

Any improvement to a PHA that meets real property designation criteria is considered real 

property. 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 2 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

 The property is recognized in an agency-approved management plan. 

 The property exhibits critical deferred maintenance needs, and those needs have been 

documented. 

Other Heritage Assets: Assets that may have potential important historical or cultural 

significance but lack formal listing and the demonstrated need for active maintenance. 

Assemblage Assets: Any grouping of artifacts or archival materials aggregated through donation, 

agency events, site-specific or other field collection, other acquisition method, or combination 

therein. 

Research Centers

Agricultural Research Service (ARS) conducts research at centers nationwide to develop and 

transfer solutions to agricultural problems of high national priority. ARS provides information 

access and dissemination to ensure high-quality, safe food and other agricultural products; assess 

the nutritional needs of Americans; sustain a competitive agricultural economy; enhance the 

natural resource base and the environment; and provide economic opportunities for rural citizens, 

communities, and society as a whole. NRCS owns one heritage asset, the Tucson Plant Materials 

Center (TPMC) which is included in general PP&E as a multi-use asset. It was listed in the 

National Register of Historic Places (NRHP) on July 2, 1997. The TPMC develops and evaluates 

native plants and addresses an array of resource issues in the areas of rangeland, mined land, 

urban lands, cropland riparian areas, and desert lands. The TPMC provides technical assistance 

to NRCS field offices, Resource Conservation and Development (RC&D) groups, conservation 

districts, Federal, State, and Tribal agencies, and private landowners through the greater 

Southwest. Research centers are considered heritage assets because one or more buildings or 

structures at these centers is on the National Register of Historic Places or have been identified 

as eligible for inclusion on the National Register. 

Library Collections

The National Agricultural Library (NAL) comprises one of the largest collections of materials 

devoted to agriculture in the world. The collections are in constant use to support the research 

activities of USDA, assist policymakers, and answer inquiries from citizens such as writers, 

editors, historians, filmmakers, and university researchers. NAL houses and provides access 

to millions of books and periodicals. The majority of these items were published more than 25 

years ago and almost all of them are out-of-print. By statute, NAL is the primary depository of 

publications and information concerning the research and other activities of USDA. Included in 

the collection are government documents and many items that are unique and irreplaceable. NAL 

collects, preserves and provides access to manuscripts, rare books, photographs, posters, oral 

histories, agricultural objects and tools, and other unique materials. Collection concentrations 

include the fields of agriculture, forestry, horticulture, entomology, poultry science, animal 

science, nutrition, botany, natural history, and agricultural history. Although focused primarily 

on American agriculture and related sciences, NAL holds numerous items of international origin. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 2 1 

Acquisition and Withdrawal of Heritage Assets 

The FS generally does not construct heritage assets, although in some circumstances important 

site-structural components may be rehabilitated or reconstructed into viable historic properties to 

provide forest visitors with use and interpretation. Heritage assets may be acquired through the 

procurement process, but this rarely occurs. Normally, heritage assets are part of the land 

acquisition and inventory process. Withdrawal occurs through land exchange or natural disasters. 

Most additions occur through inventory activities where previously undocumented sites are 

discovered and added to the total. 

STEWARDSHIP LAND 

Stewardship land is land and land rights not acquired for or in connection with items of general 

PP&E. Land is defined as the solid surface of the earth, excluding natural resources. Stewardship 

land is valued for its environmental resources, recreational and scenic value, cultural and 

paleontological resources, vast open spaces, and resource commodities and revenue provided to 

the Federal Government, states, and counties. These assets are reported in terms of physical units 

rather than cost, fair value, or other monetary values. No asset amount is shown on the balance 

sheet for stewardship land. The acquisition cost of stewardship land is considered an expense in 

the period acquired when determining the net cost of operations. Stewardship land consists 

primarily of the national forests and grasslands owned by the FS and conservation easements 

purchased by NRCS. 

National Forests 

National forests are formally established and permanently set aside and reserved for national 

forest purposes, including National Wilderness, National Primitive, National Wild and Scenic 

River, National Recreation, National Scenic Research, National Game Refuges and Wildlife 

Preserve, and National Monument areas. 

National Grasslands 

National grasslands are designated by the Secretary of Agriculture and permanently held by the 

USDA under Title III of the Bankhead-Jones Farm Tenant Act. 

Research and Experimental Areas 

Research and experimental areas are reserved and dedicated by the Secretary of Agriculture for 

forest and range research experimentation. Areas reported are located outside the exterior 

boundaries of a national forest or national grassland. 

National Preserves and Other Areas 

National preserves are units established to protect and preserve scientific, scenic, geologic, 

watershed, fish, wildlife, historic, cultural and recreational values; and to provide for multiple 

use and sustained yield of renewable resources. Other areas include areas administered by the FS 

that are not included in one of the above groups. 
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Conservation Easements 

NRCS’s mission objectives in administering the conservation easement programs are to provide 

landowners with financial and technical assistance in return for maintaining and improving high 

quality productive soils, clean and abundant water, healthy plant and animal communities, clean 

air, an adequate energy supply, and working farm and ranch land. 

NRCS’s objectives in managing, monitoring and enforcing the terms and conditions of easement 

deeds are to ensure that: (1) taxpayer investments are properly used in accordance with the intent 

of the program; (2) the agency is a good steward of the land; and (3) the land is properly 

maintained. 

Stewardship resources involve substantial investment in order to gain long-term benefits for the 

American public and help the Agency satisfy its mission. The purpose of purchasing easements 

is to restore or enhance wetlands, protect farmland, restore and protect grassland, restore and 

protect forest ecosystems, and restore, protect, maintain, and enhance the functions of 

floodplains. 

NRCS, on behalf of USDA, administers and owns conservation easements on private lands. 

Landowners are not allowed to withdraw from the program; however termination or expiration 

may occur. For the purpose of stewardship asset reporting, all easements where NRCS is the 

grantee of the easement are included as stewardship land. Also included are easements that are 

administered by NRCS on behalf of other USDA agencies. 

Acquisition and Withdrawal of Stewardship Lands 

The Land and Water Conservation Fund (L&WCF) Land Acquisition Program acquires land for 

the FS National Forest System (NFS). The program coordinates with a variety of partners, 

including State, local, and Tribal governments, and private landowners through statewide 

planning for development of a land-adjustment strategy. 

The Land Acquisition Program preserves, develops, and maintains access to NFS lands and 

waters for the public and provides permanent access to public lands for recreation, commodity 

production, resource management, public safety, and community economic viability. 

The L&WCF statutory authority specifically defines the purpose to also include protecting the 

quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water 

resource, archeological values, as well as food and habitat for fish and wildlife, and managing 

the public lands for minerals, food, timber, and fiber. 

From these several allowable uses of program funding, the program concentrates on protecting 

habitat for priority species identified in the national forest and grassland’s Land Management 

Plans and enhancing recreational opportunities for areas with high demand for recreation. The 

program focuses acquisitions on inholdings and areas adjacent to existing NFS lands. 
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FY 2015 Additions Withdrawals FY 2014

Heritage Assets

National Forests 154 - - 154

National Grasslands 20 - - 20

Other Sites 175 10 (2) 167

Research Centers 34 - - 34

Library Collections 1 - - 1

Total 384 10 (2) 376

Stewardship Land

National Forests 154 - - 154

National Grasslands 20 - - 20

Research and Experimental Areas 3 - - 3

National Preserves and Other Areas 2 - (1) 3

Conservation Easements 17,318 267 - 17,051

Total 17,497 267 (1) 17,231

FY 2014 Additions Withdrawals FY 2013

Heritage Assets

National Forests 154 - - 154

National Grasslands 20 - - 20

Other Sites 167 2 (3) 168

Research Centers 34 - - 34

Library Collections 1 - - 1

Total 376 2 (3) 377

Stewardship Land

National Forests 154 - - 154

National Grasslands 20 - - 20

Research and Experimental Areas 3 - - 3

National Preserves and Other Areas 3 - - 3

Conservation Easements 17,051 798 - 16,253

Total 17,231 798 - 16,433

Note 11: Other Assets 

In FY 2015 and FY 2014, other assets included investments in trust for loan asset sales of 

$37 million. 

FY 2015 FY 2014

Intragovernmental:

Advances to Others $ 3 $ 3

Subtotal Intragovernmental 3 3

With the Public:

Advances to Others 191 152

Other Assets 37 37

Total Other Assets $ 231 $ 192
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Note 12: Liabilities Not Covered By Budgetary Resources 

In FY 2015 and FY 2014, other intragovernmental liabilities not covered by budgetary resources 

included accruals for Federal Employee Compensation Act (FECA) of $157 million and 

$161 million, contract disputes claims payable to Treasury’s Judgment Fund of $24 million and 

$25 million, unemployment compensation of $18 million and $23 million, and custodial of 

$3 million and $3 million, respectively. 

In FY 2015, other liabilities with the public not covered by budgetary resources included future 

funded indemnity costs of $5,699 million, Agricultural Risk Coverage and Price Loss Coverage 

of $4,594 million, estimated underwriting gain on crop insurance of $1,529 million, unfunded 

leave of $610 million, contingent liabilities of $509 million, Payments to States of $303 million, 

clearing accounts of $44 million, credit programs of $7 million and custodial of $2 million. 

In FY 2014, other liabilities with the public not covered by budgetary resources included future 

funded indemnity costs of $4,749 million, estimated underwriting gain on crop insurance of 

$1,955 million, unfunded leave of $602 million, Brazilian Cotton Producers of $300 million, 

Payments to States of $78 million, contingent liabilities of $66 million, Tobacco Transition 

Payment Program of $50 million, disaster assistance of $15 million, credit programs of 

$9 million, clearing accounts of $6 million, and custodial of $3 million. 

FY 2015 FY 2014

Intragovernmental:

Other $ 203 $ 212

Subtotal Intragovernmental 203 212

With the Public:

Accounts Payable - -

Federal employee and veterans' benefits 893 955

Environmental and disposal liabilities 193 196

Other 13,299 7,832

Subtotal With the Public 14,385 8,983

Total liabilities not covered by budgetary resources 14,588 9,195

Total liabilities covered by budgetary resources 146,270 150,140

Total Liabilities $ 160,858 $ 159,335
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Note 13: Debt

FY 2015

Beginning 

Balance Net Borrowing Ending Balance

Intragovernmental

Debt to the Treasury $ 71,354 $ 1,177 $ 72,531

Debt to the Federal Financing Bank 42,748 (1,047) 41,701

Total Intragovernmental 114,102 130 114,232

Agency Debt:

Held by the Public - - -

Total Debt $ 114,102 $ 130 $ 114,232

FY 2014

Beginning 

Balance Net Borrowing Ending Balance

Intragovernmental

Debt to the Treasury $ 64,380 $ 6,974 $ 71,354

Debt to the Federal Financing Bank 40,660 2,088 42,748

Total Intragovernmental 105,040 9,062 114,102

Agency Debt:

Held by the Public - - -

Total Debt $ 105,040 $ 9,062 $ 114,102
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Note 14: Environmental and Disposal Liabilities

USDA is subject to the Comprehensive Environmental Response, Compensation, and Liability 

Act, the Clean Water Act, and the Resource Conservation and Recovery Act for cleanup of 

hazardous waste. In FY 2015 and FY 2014, FS estimates the liability for total cleanup costs for 

sites known to contain hazardous waste to be $2 million, based on actual cleanup costs at similar 

sites. In FY 2015 and FY 2014, CCC estimates the liability for total cleanup costs for sites 

known to contain hazardous waste to be $8 million based on actual cleanup costs at similar sites. 

CCC estimates the range of potential future losses due to remedial actions to be between 

$13 million and $141 million. These estimates will change as new sites are discovered, remedy 

standards change, and new technology is introduced. 

In FY 2015 and FY 2014, ARS estimated the liability for cleanup of the Beltsville Agricultural 

Research Center (BARC) to be $19 million and $20 million, respectively. ARS is evaluating and 

remediating areas of concern on BARC that are contaminated or threaten to contaminate ground 

and surface water with pesticides, solvents, metals, and other hazardous substances.

USDA is also subject to Asbestos National Emissions Standards for Hazardous Air Pollutants. In 

FY 2015 and FY 2014, the Department estimated its liability for asbestos-related cleanup of real 

property to be $164 and $166 million, respectively. The liability is calculated using total square 

footage of real property expected to contain asbestos times a cost factor based on historical 

actual cleanup costs, adjusted for inflation, including any other identifiable costs, e.g. survey 

cost. As additional information becomes available, key assumptions will be reevaluated, cost 

estimates will be revised, and necessary adjustments will be made to the liability recognition.

Note 15. Other Liabilities

In FY 2015, other liabilities with related budgetary obligations with the public include Grants, 

Subsidies, and Contributions of $2,799 million, Conservation Reserve Program of 

$1,510 million, estimated underwriting gains on crop insurance of $1,034 million, indemnity 

payments not yet disbursed of $191 million, and other accrued liabilities of $979 million. 

In FY 2015, other liabilities without related budgetary obligations with the public include 

Agricultural Risk Coverage and Price Loss Coverage of $4,594 million, estimated underwriting 

gains on crop insurance of $1,529 million, Payments to States of $303 million, and other accrued 

liabilities of $49 million.

In FY 2014, other liabilities with related budgetary obligations with the public include Disaster 

Assistance Program of $3,365 million, Grants, Subsidies, and Contributions of $3,280 million, 

Conservation Reserve Program of $1,684 million, estimated underwriting gains on crop 

insurance of $639 million, Cotton Transition Program of $342 million, indemnity payments not 

yet disbursed of $148 million, Direct and Counter Cyclical Program of $143 million, and other 

accrued liabilities of $798 million. 
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In FY 2014, other liabilities without related budgetary obligations with the public include 

estimated underwriting gains on crop insurance of $1,955 million, Brazilian Cotton Industry of 

$300 million, Payments to States of $78 million, Tobacco Transition Payment Program of 

$50 million, and other accrued liabilities of $41 million. 

In FY 2014, the presentation of note 15 was reclassified to align with the USSGL crosswalk for 

other liabilities and to move the non-current portion of unfunded FECA liability and 

underwriting gains on crop insurance from current. 

FY 2015 Non-Current Current Total

Intragovernmental:

Other Liabilities With Related Budgetary Obligations - 10 10

Employer Contributions and Payroll Taxes - 59 59

Unfunded FECA Liability 87 71 158

Other Unfunded Employment Related Liability - 18 18

Liability for Advances and Prepayments - 10 10

Liability for Clearing Accounts - (58) (58)

Custodial Liability - 95 95

Liability for Non-entity Assets Not Reported on the Statement of Custodial 

Activities

 - 11,650 11,650

Other Liabilities Without Related Budgetary Obligations 24 - 24

Subtotal Intragovernmental 111 11,855 11,966

With the Public:

Other Liabilities With Related Budgetary Obligations - 6,513 6,513

Accrued Funded Payroll and Leave - 244 244

Unfunded Leave - 610 610

Liability for Advances and Prepayments - 163 163

Other Deferred Credits - 713 713

Liability for Nonfiduciary Deposit Funds and Undeposited Collections - 272 272

Liability for Clearing Accounts - 94 94

Actuarial Liability for Federal Insurance and Guarantee Programs - 5,700 5,700

Contingent Liabilities - 509 509

Capital Lease Liability 8 3 11

Custodial Liability - 10 10

Other Liabilities Without Related Budgetary Obligations 1,553 4,922 6,475

Subtotal With the Public 1,561 19,753 21,314

Total Other Liabilities $ 1,672 $ 31,608 $ 33,280
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FY 2014 Non-Current Current Total

Intragovernmental:

Other Liabilities With Related Budgetary Obligations $ - $ 4 $ 4

Employer Contributions and Payroll Taxes - 51 51

Unfunded FECA Liability 89 72 161

Other Unfunded Employment Related Liability - 23 23

Liability for Advances and Prepayments - 17 17

Liability for Clearing Accounts - (36) (36)

Custodial Liability - 83 83

Liability for Non-entity Assets Not Reported on the Statement of Custodial 

Activities

 - 12,066 12,066

Other Liabilities Without Related Budgetary Obligations 25 - 25

Subtotal Intragovernmental 114 12,280 12,394

With the Public:

Other Liabilities With Related Budgetary Obligations - 10,400 10,400

Accrued Funded Payroll and Leave - 237 237

Unfunded Leave - 603 603

Liability for Advances and Prepayments - 157 157

Other Deferred Credits - 719 719

Liability for Nonfiduciary Deposit Funds and Undeposited Collections - 159 159

Liability for Clearing Accounts - 134 134

Actuarial Liability for Federal Insurance and Guarantee Programs - 4,749 4,749

Contingent Liabilities - 65 65

Capital Lease Liability 11 4 15

Custodial Liability - 10 10

Other Liabilities Without Related Budgetary Obligations 1,978 446 2,424

Subtotal With the Public 1,989 17,683 19,672

Total Other Liabilities $ 2,103 $ 29,963 $ 32,066
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Note 16: Leases 

USDA activities based in the Washington D.C. area are located in General Services 

Administration (GSA) leased facilities and USDA owned buildings. The USDA Headquarters 

complex (Whitten Building and South Building) is a government owned facility, which is part of 

the GSA Federal Buildings Inventory. As the result of a 1998 agreement between GSA and 

USDA, a moratorium was placed on the rental billings for the Headquarters complex beginning 

in FY 1999. 

At current market rate, the estimated yearly rental payment for the above mentioned space would 

be $60 million. This agreement is still in effect and as a result, USDA activities located in the 

Headquarters complex are not billed for rental costs. 

FY 2015

Capital Leases:

Summary of Assets Under Capital Leases

Land and Building $ 49

Machinery and Equipment -

Accumulated Amortization (38)

Future Payments Due:

Land & Buildings Machinery & 

Equipment

Other Totals

Fiscal Year

2016 7 - - 7

2017 6 - - 6

2018 5 - - 5

2019 4 - - 4

2020 4 - - 4

After 5 Years 9 - - 9

Total Future Lease Payments 35 - - 35

Less: Imputed Interest 17 - - 17

Less: Executory Costs 7 - - 7

Less: Lease Renewal Options - - - -

Net Capital Lease Liability 11 - -$ 11

Lease liabilities covered by budgetary resources 11

Operating Leases:

Future Payments Due:

Fiscal Year Land & Buildings Machinery & 

Equipment

Other Totals

2016 98 - - 98

2017 86 - 1 87

2018 71 - 1 72

2019 61 - - 61

2020 51 - - 51

After 5 Years 143 - - 143

Total Future Lease Payments $ 510 $ - 2$ $ 512
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FY 2014

Capital Leases:

Summary of Assets Under Capital Leases

Land and Building $ 58

Machinery and Equipment -

Accumulated Amortization (43)

Future Payments Due:

Land & Buildings Machinery & 

Equipment

Other Totals

Fiscal Year

2015 9 - - 9

2016 8 - - 8

2017 6 - - 6

2018 6 - - 6

2019 4 - - 4

After 5 Years 12 - - 12

Total Future Lease Payments 45 - - 45

Less: Imputed Interest 21 - - 21

Less: Executory Costs 9 - - 9

Less: Lease Renewal Options - - - -

Net Capital Lease Liability 15 - -$ 15

Lease liabilities covered by budgetary resources 15

Operating Leases:

Future Payments Due:

Fiscal Year Land & Buildings Machinery & 

Equipment

Other Totals

2015 130 - - 130

2016 119 - - 119

2017 107 - - 107

2018 96 - - 96

2019 82 - - 82

After 5 Years 303 - - 303

Total Future Lease Payments $ 837 $ - -$ $ 837

Note 17: Commitments and Contingencies 

The Department is subject to various claims and contingencies related to lawsuits as well as 

commitments under contractual and other commercial obligations. 

For cases in which payment has been deemed probable and for which the amount of potential 

liability has been estimated, $509 million and $65 million has been accrued in the financial 

statements as of September 30, 2015 and 2014, respectively. 

No amounts have been accrued in the financial statements for claims where the amount is 

uncertain or where the probability of judgment against USDA is remote. The Department’s 

potential liability for claims where a judgment against the Department is reasonably possible 

ranges from $51 million to $158 million as of September 30, 2015, compared to $725 million to 

$1,511 million as of September 30, 2014. 

Through the Conservation Reserve Program (CRP), eligible participants sign 10 to 15 year 

contracts to remove land from production in exchange for an annual rental payment. The 

participants also receive cost-share assistance for establishing conservation practices on the 

reserve acreage and additional incentive payments for adopting high-priority conservation 
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measures. CCC estimates that the maximum amount of future outlays for all existing CRP rental 

contracts over the contract terms, subject to funds availability and contract compliance, is 

approximately $11 billion.

Commitments to extend loan guarantees are estimated to be $4,951 million and $5,846 million in 

FY 2015 and FY 2014, respectively. 

Note 18: Funds from Dedicated Collections 

Funds from dedicated collections are financed by specifically identified revenues, often 

supplemented by other financing sources, which remain available over time. These specifically 

identified revenues and other financing sources are required by statute to be used for designated 

activities or purposes and must be accounted for separately from the Government’s general 

revenues. 

Financial information for all significant funds from dedicated collections follows the descriptions 

of each fund’s purpose shown below. 

AGRICULTURAL MARKETING SERVICE (AMS) 

Funds for Strengthening Markets, Income, and Supply 

This fund is used to purchase commodities for schools and elderly feeding programs, to provide 

goods and other necessities in emergencies and disasters, and to purchase agricultural 

commodities to stabilize markets. The fund is permanently financed by statutory transfer of an 

amount equal to 30 percent of customs receipts collected during each calendar year and is 

automatically appropriated for expanding outlets for perishable, non-price supported 

commodities. An amount equal to 30 percent of receipts collected on fishery products is 

transferred to the Food and Nutrition Service and is used to purchase commodities under section 

6 of the National School Lunch Act and other authorities specified in the child nutrition 

appropriation. Funds are available under section 32 of the Act of August 24, 1935, as amended 

(7 U.S.C. 612c). 

Expenses and Refunds, Inspection and Grading of Farm Products

The commodity grading programs provide grading, examination, and certification services for a 

wide variety of fresh and processed food commodities using federally approved grade standards 

and purchase specifications. This fund is financed by the collection of fees charged to producers 

of various food commodities who request, on a voluntary basis, inspection and grading of 

agricultural food commodities. This program is authorized by the Agricultural Marketing Act of 

1946 (7 U.S.C. 1621-1627).
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ANIMAL PLANT HEALTH INSPECTION SERVICE (APHIS) 

Agricultural Quarantine Inspection User Fee Account 

This fund is used to record and report expenditures and revenue associated with operating 

Agricultural Quarantine Inspection (AQI) activities at ports of entry. The Farm Bill of 1990, as 

amended by the Federal Agriculture Improvement and Reform Act of 1996, gave the Animal and 

Plant Health Inspection Service (APHIS) the authority to charge user fees for AQI services and 

to use the revenue to fund AQI activities. In March of 2003, a portion of the AQI program was 

transferred to the Department of Homeland Security (DHS); however, APHIS retained the 

authority to collect AQI revenue. APHIS transfers a portion of the revenue to DHS periodically 

throughout the year to fund their expenditures. The revenue in the fund is collected from airlines, 

air passengers, vessels, trucks, and railroad cars that are subject to AQI inspection at ports of 

entry. These user fees are an inflow of revenue from the public that is used to fund AQI 

inspections that are required by APHIS and DHS. The authority is codified in 21 U.S.C. 136(a). 

FOREST SERVICE (FS) 

Cooperative Work 

Cooperative contributions are deposited for disbursement in compliance with the terms and 

provisions of the agreement between the cooperator and the FS. Cooperators include timber 

purchasers, not-for-profit organizations, and local hunting and fishing clubs. The governing 

authorities are the Cooperative Funds Act of July 31, 1914 (16 U.S.C. 498) and the 

Knutson-Vandenberg Act. 

Land Acquisition 

Each fiscal year this fund receives a transfer of recreation user fees from the Department of the 

Interior’s Land and Water Conservation Fund, to be used for the acquisition of land or waters, or 

interest therein, including administrative expenses, to carry out the provisions of the Land and 

Water Conservation Fund Act of 1965, as amended (16 U.S.C. 460l-4-11), pertaining to the 

preservation of watersheds. The Land Acquisition program is authorized by the Interior and 

Related Agencies Appropriations Act of December 30, 1982 (96 Stat. 1983, Public Law 97-394).

Payments to States, National Forest Fund 

The Act of May 23, 1908, as amended (16 U.S.C. 500), commonly known as “Payments to 

States”, requires with a few exceptions, that 25 percent of all monies received from the national 

forests and deposited into the National Forest Fund during a fiscal year from timber, grazing, 

special-use permits, power and mineral leases, and admission and user fees be paid to the States 

in which the national forests are located, for public schools and public roads in the county or 

counties in which the national forests are situated. 
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State, Private, and International Forestry, Land and Water Conservation Fund 

The Fiscal Year 2004 Department of the Interior and Related Agencies Appropriation Act 

(Public Law 108-108) authorizes the Forest Service to receive a transfer of receipts from the 

Department of the Interior’s Land and Water Conservation Fund to finance the existing Forest 

Legacy Program, funded previously by State and Private Forestry general appropriation. To 

accommodate the new financing arrangement and at OMB’s request, the U.S. Department the of 

Treasury established a new special fund, “State, Private and International Forestry, Land and 

Water Conservation Fund”. The program expenditures include grants and an occasional land 

purchase, but no real property will be procured or constructed.

Recreation Fee Demonstration Program 

The Recreation Fee Demonstration Program fund receives deposits of recreation fees collected 

from projects that are part of the Recreation Fee Demonstration Program. These monies are 

retained and used for backlog repair and maintenance of recreation areas, sites or projects. These 

funds are also used for interpretation, signage, habitat or facility enhancement, resource 

preservation, annual operation, maintenance, and law enforcement related to public use of 

recreation areas and sites. The Recreation Fee Demonstration Program is authorized by 

16 U.S.C. 4601-6(a). 

National Forest Fund Receipts 

The Act of May 23, 1908, as amended (16 U.S.C. 500), requires (with a few exceptions) that all 

receipts from national forest activities be aggregated each fiscal year in order to calculate the 

portion which is paid to the States in which the national forests are located. The payments must 

be used for public schools and roads in the county or counties in which the national forests are 

situated. Originally, the States’ portion of receipts was 25% but past statutory amendments have 

changed the calculation factors from time to time. Receipts include revenues from the sale of 

timber and other forest products; fees for grazing, special-use permits, power and mineral leases; 

and recreation user fees. 

Restoration of Forest Lands and Improvements 

The Restoration of Forest Lands and Improvements Acts (16 U.S.C. 579(c)) states any monies 

received by the United States with respect to lands under the administration of the Forest Service 

(a) as a result of the forfeiture of a bond or deposit by a permittee or timber purchaser for failure 

to complete performance of improvement, protection, or rehabilitation work required under the 

permit or timber sale contract or (b) as a result of a judgment, compromise, or settlement of any 

claim, involving present or potential damage to lands or improvements, shall be deposited into 

the United States Treasury and are appropriated and made available until expended to cover the 

cost to the United States of any improvement, protection, or rehabilitation work on lands under 

the administration of the Forest Service rendered necessary by the action which led to the 

forfeiture, judgment, compromise, or settlement: Provided, that any portion of the monies 

received in excess of the amount expended in performing the work necessitated by the action 

which led to their receipt shall be transferred to miscellaneous receipts. 
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Payments to Counties, National Grasslands 

Payments to Counties, Title III, Bankhead-Jones Farm Tenant Act (Act) authorizes national 

grassland or land utilization project receipts to be shared through grants with local governments 

for the purposes stated in the Act. At the end of each calendar year, 25 percent of the net 

revenues from each national grassland or land utilization project are paid to the counties in which 

such lands are located. These payments are not in lieu of taxes. Receipts from the Act designated 

as either national grasslands or land utilization projects are to be credited to a special account. 

Acquisition of Lands to Complete Land Exchanges 

As authorized by 7 statutes, this program is funded annually by congressional appropriation 

action, with forest revenues generated by the occupancy of public land or from the sale of natural 

resources other than minerals. All funds appropriated that remain unobligated at the end of the 

fiscal year are returned to the receipts of the affected national forests. These funds are used to 

purchase land and for related expenditures such as title search, escrow, recording, and personnel 

costs when the purchase is considered necessary to minimize soil erosion and flood damage. This 

appropriation is available for land acquisition within the exterior boundaries of the national 

forests.

NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA) 

Native American Institutions Endowment Fund 

The Native American Institutions Endowment Fund was authorized by Public Law 103-382, and 

provided an initial installment to establish an endowment to benefit the 1994 land grant 

institutions. The public law states that “This program will enhance educational opportunities for 

Native Americans by building educational capacity at these institutions in the areas of student 

recruitment and retention, curricula development, faculty preparation, instruction delivery 

systems, and scientific instrumentation for teaching.” While the principal (corpus) of the fund 

cannot be used, the interest that is earned on the endowment fund investments in Treasury 

instruments can be used for the purposes described above. After the close of a fiscal year, the 

income is distributed after making adjustments for the cost of administering the fund. 
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OTHER 

Financial information is summarized for all other funds from dedicated collections with total 

assets less than $50 million listed below. 

Agricultural Marketing Service 

Perishable Agricultural Commodities Act 

Wool Research, Development and Promotion Trust Fund 

Animal Plant Health Inspection Service 

Miscellaneous Contributed Funds 

Forest Service 

Roads and Trails for States, National Forest Fund 

Reforestation Trust Fund 

Timber Sales Pipeline Restoration Fund 

Operation and Maintenance of Forest Service Quarters 

Timber Roads, Purchaser Elections 

Timber Salvage Sales 

Expenses, Brush Disposal 

Range Betterment Fund 

Acquisition of Lands for National Forests, Special Acts 

Construction of Facilities or Land Acquisition 

Payment to Minnesota (Cook, Lake and Saint Louis Counties) 

Licensee Program 

Resource Management Timber Receipts 

Quinault Special Management Area 

MNP Rental Fee Account 

Land Between the Lakes Management Fund 

Administration of Rights-of-Way and Other Land Uses Fund 

Valles Caldera Fund 

Hardwood Technology Transfer and Applied Research Fund 

Stewardship Contracting Product Sales 

Gifts, Donations and Bequests for Forest and Rangeland Research 
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 3 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Land Between the Lakes Trust Fund 

Gifts and Bequests 

Natural Resources Conservation Service 

Miscellaneous Contributed Funds 

Agricultural Research Service 

Concessions Fees and Volunteer Services 

Gifts and Bequests 

Miscellaneous Contributed Funds 

Rural Development 

Alternative Agricultural Research and Commercialization Revolving Fund 

Foreign Agricultural Service 

Miscellaneous Contributed Funds 

Gifts and Bequests 

Foreign Service National Separation Liability Trust Fund 

Grain Inspection, Packers and Stockyards Administration 

Inspection and Weighing Services 

Food Safety and Inspection Service 

Expenses and Refunds, Inspection of Farm Products 

Office of the Inspector General 

Inspector General Assets Forfeiture, Department of Justice 

Inspector General Assets Forfeiture, Department of Treasury 

National Agricultural Statistics Service 

Miscellaneous Contributed Funds 

Economic Research Service 

Miscellaneous Contributed Funds 

Departmental Offices 

Gifts and Bequests 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 3 7 

AMS AMS APHIS FS FS FS FS

Balance Sheet As of September 30, 2015

Funds for 

Strengthening 

Markets, Income, and 

Supply

Expenses and 

Refunds, 

Inspection and 

Grading of Farm 

Products

Agricultural 

Quarantine 

Inspection User Fee 

Account Cooperative Work Land Acquisition

Payments to States, 

National Forests 

Fund

State, Private, and 

International 

Forestry, Land and 

Water 

Conservation Fund

12X5209 12X8015 12X5161 12X8028 12X5004 12X5201 12X5367

Fund Balance with Treasury $ 595 $ 98 $ 200 $ 176 $ 29 $ 60 $ 140

Investments - - - - - - -

Other Assets 12 26 149 14 45 1 4

Total Assets 607 124 349 190 74 61 144

Other Liabilities 49 54 93 82 - 271 -

Total Liabilities 49 54 93 82 - 271 -

Unexpended Appropriations - (1) - - - - -

Cumulative Results of Operations 558 71 256 108 74 (210) 144

Total Liabilities and Net Position 607 124 349 190 74 61 144

Statement of Net Cost For the Period

Ended September 30, 2015

Gross program costs 735 190 194 100 27 340 (6)

Less Earned Revenue 4 148 595 112 - 77 -

Net Cost of Operations 731 42 (401) (12) 27 263 (6)

Statement of Changes in Net Position

For the period Ended September 30, 2015

Net Position Beginning of Period 435 64 280 293 70 53 102

Other Financing Sources 854 48 (425) (197) 31 - 36

Net Cost of Operations (731) (42) 401 12 (27) (263) 6

Change in Net Position 123 6 (24) (185) 4 (263) 42

Net Position End of Period $ 558 $ 70 $ 256 $ 108 $ 74 $ (210) $ 144
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 3 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FS FS FS FS FS NIFA

Balance Sheet As of September 30, 2015

Recreation Fee 

Demonstration 

Program

National Forest 

Fund Receipts

Restoration of 

Forest Lands and 

Improvements

Payments to 

Counties, National 

Grasslands

Acquisition of 

Lands to Complete 

Land Exchanges

Native American 

Institutions 

Endowment Fund Other Total

12X5268 125008 12X5215 125896 12X5216 12X5205

Fund Balance with Treasury $ 57 $ 150 $ 239 $ 126 $ 17 $ 22 $ 260 $ 2,169

Investments - - - - - 183 8 191

Other Assets 5 10 3 - 49 - 37 355

Total Assets 62 160 242 126 66 205 305 2,715

Other Liabilities 2 - 1 24 1 - 87 664

Total Liabilities 2 - 1 24 1 - 87 664

Unexpended Appropriations - - - - - 131 1 131

Cumulative Results of Operations 60 161 241 102 65 74 216 1,920

Total Liabilities and Net Position 62 161 242 126 66 205 304 2,715

Statement of Net Cost For the Period

Ended September 30, 2015

Gross program costs 66 - 31 36 9 3 256 1,981

Less Earned Revenue 79 100 12 8 5 4 230 1,374

Net Cost of Operations (13) (100) 19 28 4 (1) 26 607

Statement of Changes in Net Position

For the period Ended September 30, 2015

Net Position Beginning of Period 75 89 240 99 82 192 361 2,435

Other Financing Sources (28) (28) 20 31 (13) 12 (118) 223

Net Cost of Operations 13 100 (19) (28) (4) 1 (26) (607)

Change in Net Position (15) 72 1 3 (17) 13 (144) (384)

Net Position End of Period $ 60 $ 161 $ 241 $ 102 $ 65 $ 205 $ 217 $ 2,051
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 3 9 

AMS AMS APHIS FS FS FS FS FS FS

Balance Sheet As of September 30, 2014

Funds for 

Strengthening 

Markets, Income, and 

Supply

Expenses and 

Refunds, 

Inspection and 

Grading of Farm 

Products

Agricultural 

Quarantine 

Inspection User Fee 

Account Cooperative Work Land Acquisition

Payments to States, 

National Forests 

Fund

Timber Salvage 

Sales

Expenses, Brush 

Disposal

State, Private, and 

International 

Forestry, Land and 

Water 

Conservation Fund

12X5209 12X8015 12X5161 12X8028 12X5004 12X5201 12X5204 12X5206 12X5367

Fund Balance with Treasury $ 481 $ 100 $ 228 $ 363 $ 24 $ 107 $ 69 $ 51 $ 145

Investments - - - - - - - - -

Other Assets 23 20 143 15 46 2 1 - 1

Total Assets 504 120 371 378 70 109 70 51 146

Other Liabilities 69 56 91 85 - 56 - - 44

Total Liabilities 69 56 91 85 - 56 - - 44

Unexpended Appropriations - - - - - - - - -

Cumulative Results of Operations 435 64 280 293 70 53 70 51 102

Total Liabilities and Net Position 504 120 371 378 70 109 70 51 146

Statement of Net Cost For the Period

Ended September 30, 2014

Gross program costs 750 178 195 103 51 (124) 20 7 37

Less Earned Revenue 3 141 603 72 - 122 32 7 -

Net Cost of Operations 747 37 (408) 31 51 (246) (12) - 37

Statement of Changes in Net Position

For the period Ended September 30, 2014

Net Position Beginning of Period 539 52 218 121 66 (193) 53 21 83

Other Financing Sources 643 49 (346) 203 55 - 5 30 56

Net Cost of Operations (747) (37) 408 (31) (51) 246 12 - (37)

Change in Net Position (104) 12 62 172 4 246 17 30 19

Net Position End of Period $ 435 $ 64 $ 280 $ 293 $ 70 $ 53 $ 70 $ 51 $ 102
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 4 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FS FS FS FS FS NIFA

Balance Sheet As of September 30, 2014

Recreation Fee 

Demonstration 

Program

National Forest 

Fund Receipts

Restoration of 

Forest Lands and 

Improvements

Payments to 

Counties, National 

Grasslands

Acquisition of 

Lands to Complete 

Land Exchanges

Native American 

Institutions 

Endowment Fund Other Total

12X5268 125008 12X5215 125896 12X5216 12X5205

Fund Balance with Treasury $ 74 $ 79 $ 238 $ 115 $ 37 $ 47 $ 302 $ 2,460

Investments - - - - - 144 8 152

Other Assets 5 10 3 1 45 1 34 350

Total Assets 79 89 241 116 82 192 344 2,962

Other Liabilities 4 - 1 17 - - 104 527

Total Liabilities 4 - 1 17 - - 104 527

Unexpended Appropriations - - - - - 119 1 120

Cumulative Results of Operations 75 89 240 99 82 73 239 2,315

Total Liabilities and Net Position 79 89 241 116 82 192 344 2,962

Statement of Net Cost For the Period

Ended September 30, 2014

Gross program costs 68 - 20 22 5 5 210 1,547

Less Earned Revenue 70 10 3 30 11 5 204 1,313

Net Cost of Operations (2) (10) 17 (8) (6) - 6 234

Statement of Changes in Net Position

For the period Ended September 30, 2014

Net Position Beginning of Period 73 79 74 65 76 180 175 1,682

Other Financing Sources - - 183 26 - 12 71 987

Net Cost of Operations 2 10 (17) 8 6 - (6) (234)

Change in Net Position 2 10 166 34 6 12 65 753

Net Position End of Period $ 75 $ 89 $ 240 $ 99 $ 82 $ 192 $ 240 $ 2,435
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 4 1 

Note 19: Sub-Organization Program Costs/Program Costs by Segment 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 1,014 $ 1,040 $ 1,154 $ 4,394 $ 127 $ 208

Less: Earned Revenue 169 197 7 146 77 -

Net Costs 845 843 1,147 4,248 50 208

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 237 243 356 1,528 - -

Less: Earned Revenue 40 46 34 1 - -

Net Costs 197 197 322 1,527 - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - 85 1,748 34 56

Less: Earned Revenue - - 57 108 21 -

Net Costs - - 28 1,640 13 56

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 1,251 1,283 1,595 7,670 161 264

Less: Total Earned Revenue 209 243 98 255 98 -

Net Cost of Operations $ 1,042 $ 1,040 $ 1,497 $ 7,415 $ 63 $ 264

FSA CCC FAS
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 4 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 79 $ 11,166 $ - $ - $ - $ -

Less: Earned Revenue - 3,066 - - - -

Net Costs 79 8,100 - - - -

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - 981 103,990 395 897

Less: Earned Revenue - - - 73 1 213

Net Costs - - 981 103,917 394 684

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 79 11,166 981 103,990 395 897

Less: Total Earned Revenue - 3,066 - 73 1 213

Net Cost of Operations $ 79 $ 8,100 $ 981 $ 103,917 $ 394 $ 684

RMA FNS FSIS
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 4 3 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 95 $ 474 $ 56 $ 263 $ 36 $ 63

Less: Earned Revenue 6 100 8 114 1 58

Net Costs 89 374 48 149 35 5

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - 24 112 - -

Less: Earned Revenue - - 3 49 - -

Net Costs - - 21 63 - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - 22 106 - -

Less: Earned Revenue - - 3 46 - -

Net Costs - - 19 60 - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs 94 471 254 1,189 - -

Less: Earned Revenue 6 99 34 518 - -

Net Costs 88 372 220 671 - -

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 189 945 356 1,670 36 63

Less: Total Earned Revenue 12 199 48 727 1 58

Net Cost of Operations $ 177 $ 746 $ 308 $ 943 $ 35 $ 5

AMS APHIS GIPSA
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 4 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ - $ - $ - $ - $ 80 $ 305

Less: Earned Revenue - - - - 33 28

Net Costs - - - - 47 277

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 1,410 5,890 664 3,163 51 196

Less: Earned Revenue 153 603 43 12 21 18

Net Costs 1,257 5,287 621 3,151 30 178

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - 38 147

Less: Earned Revenue - - - - 16 15

Net Costs - - - - 22 132

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - - - 123 468

Less: Earned Revenue - - - - 50 43

Net Costs - - - - 73 425

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 1,410 5,890 664 3,163 292 1,116

Less: Total Earned Revenue 153 603 43 12 120 104

Net Cost of Operations $ 1,257 $ 5,287 $ 621 $ 3,151 $ 172 $ 1,012

FS NRCS ARS
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 4 5 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 25 $ 666 $ 14 $ 20 $ 61 $ 145

Less: Earned Revenue 23 - 2 - 32 5

Net Costs 2 666 12 20 29 140

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 7 180 5 7 - 1

Less: Earned Revenue 6 - 1 - - -

Net Costs 1 180 4 7 - 1

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs 4 100 9 13 - -

Less: Earned Revenue 3 - 1 - - -

Net Costs 1 100 8 13 - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs 15 384 9 13 3 6

Less: Earned Revenue 13 - 1 - 1 -

Net Costs 2 384 8 13 2 6

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 51 1,330 37 53 64 152

Less: Total Earned Revenue 45 - 5 - 33 5

Net Cost of Operations $ 6 $ 1,330 $ 32 $ 53 $ 31 $ 147

NIFA ERS NASS
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 4 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2015

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 4,157 $ 3,927 $ 11 $ 25 $ 6,909 $ 22,696

Less: Earned Revenue 589 3,541 4 - 951 7,255

Net Costs 3,568 386 7 25 5,958 15,441

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - 4 8 2,758 11,328

Less: Earned Revenue - - 4 - 305 729

Net Costs - - - 8 2,453 10,599

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - 192 2,170

Less: Earned Revenue - - - - 101 169

Net Costs - - - - 91 2,001

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - - 1 1,874 107,419

Less: Earned Revenue - - - - 106 946

Net Costs - - - 1 1,768 106,473

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - 418 941 418 941

Less: Earned Revenue - - 1,004 12 1,004 12

Net Costs - - (586) 929 (586) 929

Total Gross Costs 4,157 3,927 433 975 12,151 144,554

Less: Total Earned Revenue 589 3,541 1,012 12 2,467 9,111

Net Cost of Operations $ 3,568 $ 386 $ (579) $ 963 $ 9,684 $ 135,443

RD DO Total
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 4 7 

FY 2015 Intradepartmental

Eliminations Grand Total

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ (1,695) $ 27,910

Less: Earned Revenue (190) 8,016

Net Costs (1,505) 19,894

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs (951) 13,135

Less: Earned Revenue (93) 941

Net Costs (858) 12,194

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs (60) 2,302

Less: Earned Revenue (72) 198

Net Costs 12 2,104

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs (1,091) 108,202

Less: Earned Revenue (59) 993

Net Costs (1,032) 107,209

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs (70) 1,289

Less: Earned Revenue (833) 183

Net Costs 763 1,106

Total Gross Costs (3,867) 152,838

Less: Total Earned Revenue (1,247) 10,331

Net Cost of Operations $ (2,620) $ 142,507
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 4 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 764 $ 641 $ 881 $ 8,325 $ 159 $ 214

Less: Earned Revenue 107 179 7 27 126 -

Net Costs 657 462 874 8,298 33 214

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 173 145 386 1,928 - -

Less: Earned Revenue 24 41 45 2 - -

Net Costs 149 104 341 1,926 - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - 96 1,748 45 61

Less: Earned Revenue - - 76 122 36 -

Net Costs - - 20 1,626 9 61

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 937 786 1,363 12,001 204 275

Less: Total Earned Revenue 131 220 128 151 162 -

Net Cost of Operations $ 806 $ 566 $ 1,235 $ 11,850 $ 42 $ 275

FSA CCC FAS
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 4 9 

FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 64 $ 12,010 $ - $ - $ - $ -

Less: Earned Revenue - 3,415 - - - -

Net Costs 64 8,595 - - - -

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - 1,051 103,815 373 894

Less: Earned Revenue - - 1 64 1 204

Net Costs - - 1,050 103,751 372 690

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 64 12,010 1,051 103,815 373 894

Less: Total Earned Revenue - 3,415 1 64 1 204

Net Cost of Operations $ 64 $ 8,595 $ 1,050 $ 103,751 $ 372 $ 690

RMA FNS FSIS
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 5 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 68 $ 437 $ 52 $ 148 $ 35 $ 63

Less: Earned Revenue 2 90 14 103 1 54

Net Costs 66 347 38 45 34 9

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - 23 64 - -

Less: Earned Revenue - - 6 45 - -

Net Costs - - 17 19 - -

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - 21 57 - -

Less: Earned Revenue - - 5 40 - -

Net Costs - - 16 17 - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs 81 524 256 732 - -

Less: Earned Revenue 2 108 69 511 - -

Net Costs 79 416 187 221 - -

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 149 961 352 1,001 35 63

Less: Total Earned Revenue 4 198 94 699 1 54

Net Cost of Operations $ 145 $ 763 $ 258 $ 302 $ 34 $ 9

AMS APHIS GIPSA
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 5 1 

FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ - $ - $ - $ - $ 78 $ 285

Less: Earned Revenue - - - - 28 21

Net Costs - - - - 50 264

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 1,380 4,628 628 3,445 52 188

Less: Earned Revenue 135 597 69 5 19 14

Net Costs 1,245 4,031 559 3,440 33 174

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - 39 140

Less: Earned Revenue - - - - 14 10

Net Costs - - - - 25 130

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - - - 122 446

Less: Earned Revenue - - - - 44 32

Net Costs - - - - 78 414

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 1,380 4,628 628 3,445 291 1,059

Less: Total Earned Revenue 135 597 69 5 105 77

Net Cost of Operations $ 1,245 $ 4,031 $ 559 $ 3,440 $ 186 $ 982

FS NRCS ARS
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

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FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 32 $ 668 $ 15 $ 19 $ 66 $ 125

Less: Earned Revenue 45 - 1 - 18 1

Net Costs (13) 668 14 19 48 124

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs 8 176 6 7 2 4

Less: Earned Revenue 12 - - - 1 -

Net Costs (4) 176 6 7 1 4

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs 16 339 10 13 - -

Less: Earned Revenue 23 - 1 - - -

Net Costs (7) 339 9 13 - -

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs 8 158 10 12 3 5

Less: Earned Revenue 11 - 1 - 1 -

Net Costs (3) 158 9 12 2 5

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - - - - -

Less: Earned Revenue - - - - - -

Net Costs - - - - - -

Total Gross Costs 64 1,341 41 51 71 134

Less: Total Earned Revenue 91 - 3 - 20 1

Net Cost of Operations $ (27) $ 1,341 $ 38 $ 51 $ 51 $ 133

NIFA ERS NASS
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FY 2014

Intragovernmental With the Public Intragovernmental With the Public Intragovernmental With the Public

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ 4,153 $ 4,047 $ 3 $ 5 $ 6,370 $ 26,987

Less: Earned Revenue 549 3,647 2 - 900 7,537

Net Costs 3,604 400 1 5 5,470 19,450

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs - - 2 6 2,660 10,591

Less: Earned Revenue - - 1 (1) 312 703

Net Costs - - 1 7 2,348 9,888

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs - - - - 227 2,358

Less: Earned Revenue - - - - 155 172

Net Costs - - - - 72 2,186

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs - - 4 6 1,908 106,592

Less: Earned Revenue - - - - 130 919

Net Costs - - 4 6 1,778 105,673

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs - - 493 840 493 840

Less: Earned Revenue - - 838 10 838 10

Net Costs - - (345) 830 (345) 830

Total Gross Costs 4,153 4,047 502 857 11,658 147,368

Less: Total Earned Revenue 549 3,647 841 9 2,335 9,341

Net Cost of Operations $ 3,604 $ 400 $ (339) $ 848 $ 9,323 $ 138,027

RD DO Total
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FY 2014 Intradepartmental

Eliminations Grand Total

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Gross Costs $ (1,388) $ 31,969

Less: Earned Revenue (153) 8,284

Net Costs (1,235) 23,685

Ensure Our National Forests and Private Working Lands Are

Conserved, Restored, and Made More Resilient to Climate Change,

While Enhancing Our Water Resources:

Gross Costs (940) 12,311

Less: Earned Revenue (103) 912

Net Costs (837) 11,399

Help America Promote Agricultural Production and 

Biotechnology Exports as America Works to Increase Food Security:

Gross Costs (91) 2,494

Less: Earned Revenue (130) 197

Net Costs 39 2,297

Ensure that All of America's Children Have Access

to Safe, Nutritious, and Balanced Meals:

Gross Costs (1,083) 107,417

Less: Earned Revenue (56) 993

Net Costs (1,027) 106,424

Create a USDA for the 21st Century That is High Performing, 

Efficient, and Adaptable:

Gross Costs (68) 1,265

Less: Earned Revenue (671) 177

Net Costs 603 1,088

Total Gross Costs (3,570) 155,456

Less: Total Earned Revenue (1,113) 10,563

Net Cost of Operations $ (2,457) $ 144,893
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Note 20: Cost of Stewardship PP&E 

The acquisition cost of stewardship land in FY 2015 and FY 2014 was $214 million and 

$358 million, respectively.

Note 21: Terms of Borrowing Authority Used

The Secretary of Agriculture has the authority to make and issue notes to the Secretary of the 

Treasury for the purpose of discharging obligations for RD’s insurance funds and CCC’s 

nonreimbursed realized losses and debt related to foreign assistance programs. The permanent 

indefinite borrowing authority includes both interest bearing and non-interest bearing notes. 

These notes are drawn upon daily when disbursements exceed deposits. Notes payable under the 

permanent indefinite borrowing authority have a term of one year. On January 1 of each year, 

USDA refinances its outstanding borrowings, including accrued interest, at the January 

borrowing rate.

In addition, USDA has permanent indefinite borrowing authority for the foreign assistance and 

export credit programs to finance disbursements on post-credit reform, direct credit obligations, 

and credit guarantees. In accordance with the Federal Credit Reform Act of 1990, as amended, 

USDA borrows from Treasury on October 1, for the entire fiscal year, based on annual estimates 

of the difference between the amount appropriated (subsidy) and the amount to be disbursed to 

the borrower. Repayment under this agreement may be, in whole or in part, prior to maturity by 

paying the principal amount of the borrowings plus accrued interest to the date of repayment. 

Interest is paid on these borrowings based on weighted average interest rates for the cohort, to 

which the borrowings are associated. Interest is earned on the daily balance of uninvested funds 

in the credit reform financing funds maintained at Treasury. The interest income is used to 

reduce interest expense on the underlying borrowings.

USDA has authority to borrow from the Federal Financing Bank (FFB) in the form of 

Certificates of Beneficial Ownership (CBO) or loans executed directly between the borrower and 

FFB with an unconditional USDA repayment guarantee. CBO’s outstanding with FFB are 

generally secured by unpaid loan principal balances. CBO’s outstanding are related to pre-credit 

reform loans and no longer are used for program financing.

FFB’s CBO’s are repaid as they mature and are not related to any particular group of loans. 

Borrowings made to finance loans directly between the borrower and FFB mature and are repaid 

as the related group of loans become due. Interest rates on the related group of loans are equal to 

interest rates on FFB borrowings, except in those situations where a FFB funded loan is 

restructured and the terms of the loan are modified.

Prepayments can be made on Treasury borrowings without a penalty; however, they cannot be 

made on FFB CBO’s, without a penalty.

Funds may also be borrowed from private lending agencies and others. USDA reserves a 

sufficient amount of its borrowing authority to purchase, at any time, all notes and other 
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obligations evidencing loans made by agencies and others. All bonds, notes, debentures, and 

similar obligations issued by the Department are subject to approval by the Secretary of the 

Treasury. Reservation of borrowing authority for these purposes has not been required for many 

years. 

Note 22: Available Borrowing Authority, End of Period 

Available borrowing authority at September 30, 2015 and 2014 was $23,056 million and 

$30,215 million, respectively. 

Note 23: Apportionment Categories of Obligations Incurred: 

Direct vs. Reimbursable Obligations 

FY 2015

Direct Reimbursable Total

Apportionment by Fiscal Quarter $ 40,321 $ 2,322 $ 42,643

Apportionment for Special Activities 123,882 10,874 134,756

Exempt from Apportionment 829 4 833

Total Obligations Incurred $ 165,032 $ 13,200 $ 178,232

FY 2014

Direct Reimbursable Total

Apportionment by Fiscal Quarter $ 38,951 $ 2,229 $ 41,180

Apportionment for Special Activities 121,734 16,339 138,073

Exempt from Apportionment 786 1 787

Total Obligations Incurred $ 161,471 $ 18,569 $ 180,040

Note 24: Undelivered Orders at the End of the Period 

Budgetary resources obligated for undelivered orders as of September 30, 2015 and 2014 was 

$40,687 million and $43,574 million, respectively. 

Note 25: Permanent Indefinite Appropriations 

USDA has permanent indefinite appropriations available to fund (1) subsidy costs incurred under 

credit reform programs, (2) certain costs of the crop insurance program, (3) certain commodity 

program costs, and (4) certain costs associated with FS programs. 

The permanent indefinite appropriations for credit reform are mainly available to finance any 

disbursements incurred under the liquidating accounts. These appropriations become available 

pursuant to standing provisions of law without further action by Congress after transmittal of the 

budget for the year involved. They are treated as permanent the first year they become available, as 

well as in succeeding years. However, they are not stated as specific amounts but are determined 

by specified variable factors, such as cash needs for liquidating accounts, and information about 
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the actual performance of a cohort or estimated changes in future cash flows of the cohort in the 

program accounts.

The permanent indefinite appropriation for the crop insurance program is used to cover premium 

subsidy, delivery expenses, losses in excess of premiums, and research and delivery costs.

The permanent indefinite appropriation for commodity program costs is used to encourage the 

exportation of agricultural commodities and products, to encourage domestic consumption of 

agricultural products by diverting them, and to reestablish farmers’ purchasing power by making 

payments in connection with the normal production of any agricultural commodity for domestic 

consumption.

The permanent indefinite appropriation for FS programs is used to fund Recreation Fee Collection 

Costs, Brush Disposal, License programs, Smokey Bear and Woodsy Owl, Restoration of Forest 

Lands and Improvements, Roads and Trails for States, National Forest Fund, Timber Roads, 

Purchaser Elections, Timber Salvage Sales and Operations, and Maintenance of Quarters. Each of 

these permanent indefinite appropriations is funded by receipts made available by law, and is 

available until expended.

Note 26: Legal Arrangements Affecting Use of Unobligated 

Balances

Unobligated budget authority is the difference between the obligated balance and the total 

unexpended balance. It represents that portion of the unexpended balance unencumbered by 

recorded obligations. Appropriations are provided on an annual, multi-year, and no-year basis.

An appropriation expires on the last day of its period of availability and is no longer available for 

new obligations. Unobligated balances retain their fiscal-year identity in an expired account for 

an additional five fiscal years. The unobligated balance remains available to make legitimate 

obligation adjustments, i.e., to record previously unrecorded obligations and to make upward 

adjustments in previously underestimated obligations for five years. At the end of the fifth year, 

the authority is canceled. Thereafter, the authority is not available for any purpose.

Any information about legal arrangements affecting the use of the unobligated balance of budget 

authority is specifically stated by program and fiscal year in the appropriation language or in the 

alternative provisions section at the end of the appropriations act.
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Note 27: Explanation of Differences Between the SBR and the 

Budget of the U.S. Government 

The differences between the FY 2014 Statement of Budgetary Resources (SBR) and the FY 2014

actual numbers presented in the FY 2016 Budget of the United States Government (Budget) are 

summarized below. 

The Budget excludes expired accounts that are no longer available for new obligations. 

Adjustments were made prior to the Budget submission as follows: 

 CCC reduced USAID obligations. 

 FNS recorded a permanent reduction and commodity purchases for the Child Nutrition 

Program. 

 The Budget includes the Milk Market Orders Assessment Fund since employees of the 

Milk Market Administrators participate in the Federal retirement system, though these 

funds are not available for use by the Department. 

FY 2014

Budgetary 

Resources

Obligations 

Incurred

Distributed 

Offsetting 

Receipts Net Outlays

Combined Statement of Budgetary Resources $ 234,595 $ 180,040 $ 2,533 146,696 $ 

Reconciling items:

Expired Accounts (18,092) (435) - -

USAID Adjustments, CCC (144) - - (23)

Permanent Reduction/Timing Difference, FNS 25 - - 11

Milk Market Orders Fund 55 55 - -

Other (2) (1) - (3)

Budget of the United States Government $ 216,437 $ 179,659 $ 2,533 $ 146,681

A comparison between the FY 2015 SBR and the FY 2015 actual numbers presented in the 

FY 2017 Budget cannot be performed as the FY 2017 Budget is not yet available. The FY 2017

Budget is expected to be published in February 2016 and will be available from the 

U.S.Government Publishing Office. 
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Note 28: Incidental Custodial Collections 

Custodial collections represent collections on land leases for resource extraction, National Forest 

Fund receipts from the sale of timber and other forest products, miscellaneous general fund 

receipts such as collections on accounts receivable related to canceled year appropriations, civil 

monetary penalties and interest, and commercial fines and penalties. Custodial collection 

activities are considered immaterial and incidental to the mission of the Department. 

Revenue Activity: FY 2015 FY 2014

Sources of Collections:

Miscellaneous $ 134 $ 87

Total Cash Collections 134 87

Accrual Adjustments (1) -

Total Custodial Revenue 133 87

Disposition of Collections:

Transferred to Others:

Treasury (122) (76)

States and Counties - -

( Increase )/Decrease in Amounts Yet to be Transferred (11) (11)

Net Custodial Activity $ - $ -
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Note 29: Fiduciary Activities 

Rural Housing Insurance Fund (RHIF) was established by Public Law 89-117 pursuant to section 

517 of title V of the Housing Act of 1949, which authorized RD to collect escrow payments on 

behalf of new and existing Single Family Housing borrowers. Other fiduciary activities by RD 

include but are not limited to collections from borrowers, interest paid on escrow accounts, 

payments to insurance agencies and taxing authorities. 

Rural Housing Rural Housing

Insurance Insurance

Fund Fund

2015 2014

Fiduciary net assets, beginning of year $ 105 $ 101

 Fiduciary revenues - -

 Contributions 438 411

 Investment earnings - -

 Gain (Loss) on disposition of investments, net - -

 Administrative and other expenses - -

 Disbursements to and on behalf of beneficiaries (436) (407)

Increases/(Decrease) in fiduciary net assets 2 4

Fiduciary net assets, end of year $ 107 $ 105

Schedule of Fiduciary Activity

For the Years Ended September 30, 2015 and 2014

Rural Housing Rural Housing 

Insurance Insurance

Fund Fund

2015 2014

Fiduciary Assets

 Cash and cash equivalents $ 2 $ 11

 Investments 105 94

 Other assets - -

Fiduciary Liabilities

 Less: Liabilities - -

Total Fiduciary Net Assets $ 107 $ 105

Fiduciary Net Assets

As of September 30, 2015 and 2014
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Note 30: Reconciliation of Budgetary Resources Obligated to Net 

Cost of Operations 

Budgetary and proprietary accounting information are inherently different because of the types 

of information and the timing of their recognition. The reconciliation of budgetary resources 

obligated and the net cost of operations provides a link between budgetary and proprietary 

accounting information. It serves not only to explain how information on net obligations relates 

to the net cost of operations, but also to assure integrity between budgetary and proprietary 

accounting. 

Net obligations and the net cost of operations are different because (1) the net cost of operations 

may be financed by non-budgetary resources (e.g. imputed financing); (2) the budgetary and 

non-budgetary resources used may finance activities which are not components of the net cost of 

operations; and (3) the net cost of operations may contain components which do not use or 

generate resources in the current period.
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2015 2014

Resources Used to Finance Activities:

Budgetary Resources Obligated -

Obligations Incurred 178,232$ 180,040$ 

Less: Spending authority from offsetting collections and recoveries 44,052 33,857

Obligations net of offsetting collections and recoveries 134,180 146,183

Less: Distributed Offsetting receipts 2,834 2,533

Net Obligations 131,346 143,650

Other Resources -

Donations and forfeitures of property - -

Transfers in(out) without reimbursement (118) (66)

Imputed financing from costs absorbed by others 980 851

Other (1,466) (1,710)

Net other resources used to finance activities (604) (925)

Total resources used to finance activities 130,742 142,725

Resources Used to Finance Items not Part of the Net Cost of Operations:

Change in undelivered orders 2,884 2,844

Resources that fund expenses recognized in prior periods 663 (5,107)

Budgetary offsetting collections and receipts that do not affect net cost of operations -

Credit program collections which increase liabilities for loan guarantees or allowances for subsidy 21,910 17,097

Change in Unfilled Customer Orders (334) (444)

Decrease in exchange revenue receivable from public 3,584 2,080

Other 2,840 1,965

Resources that finance the acquisition of assets (23,268) (20,089)

Other resources or adjustments to net obligated resources that do not affect net cost of operations (1,526) (82)

Total resources used to finance items not part of the net cost of operations 6,753 (1,736)

Total resources used to finance the net cost of operations 137,495 140,989

Components of the Net Cost of Operations that will not Require or Generate

Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods -

Increase in annual leave liability 8 6

Increase in environmental and disposal liability - 20

Upward/Downward reestimates of credit subsidy expense 2,059 2,055

Increase in exchange revenue receivable from the public - -

Other 998 377

Total components of Net Cost of Operations that will require or generate

 resources in future periods 3,065 2,458

Components not Requiring or Generating Resources -

Depreciation and amortization 365 266

Revaluation of assets or liabilities 2 22

Other Components not Requiring or Generating Resources:

Bad Debt Expense (124) 59

Cost of Goods Sold 21 120

Other 1,683 979

Total components of Net Cost of Operations that will not require or generate resources 1,947 1,446

Total components of Net Cost of Operations that will not require or generate

 resources in the current period 5,012 3,904

Net Cost of Operations 142,507$ 144,893$ 
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Required Supplementary Stewardship 

Information 

Stewardship Investments (Unaudited) 

FY 2015 FY 2014 FY 2013 FY 2012 FY 2011

Expense Expense Expense Expense Expense

Non-Federal Physical Property:

Food and Nutrition Service

Supplemental Nutrition Assistance Program $ 25 $ 18 $ 25 $ 38 $ 40

Special Supplemental Nutrition Program 10 7 13 13 17

National Institute of Foods and Agriculture

Extension 1890 Facilities Program 20 19 18 20 19

Total Non-Federal Property $ 55 $ 44 $ 56 $ 71 $ 76

Human Capital:

National Institute of Foods and Agriculture

Higher Education and Extension Programs $ 554 $ 556 $ 503 $ 536 $ 547

Food and Nutrition Service

Supplemental Nutrition Assistance Program 90 24 81 53 45

Agricultural Research Service

National Agricultural Library 23 23 21 21 21

Risk Management Agency

Risk Management Education 8 9 10 13 10

Total Human Capital $ 675 $ 612 $ 615 $ 623 $ 623
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FY 2015 FY 2014 FY 2013 FY 2012 FY 2011

Expense Expense Expense Expense Expense

Research and Development:

Basic Research: 

Agricultural Research Service

Human Nutrition $ 43 $ 43 $ 39 $ 43 $ 43

Collaborative Research Program - - - - -

Product Quality/Value Added 51 49 47 50 52

Livestock Production 43 43 35 37 41

Crop Production 108 108 106 114 116

Food Safety 56 56 49 53 53

Livestock Protection 46 44 35 38 40

Crop Protection 96 95 89 97 102

Environmental Stewardship 101 101 88 94 101

National Institute of Foods and Agriculture

Land-grant University System 274 268 232 249 274

Forest Service 92 78 77 80 91

Economic Research Service

Economic and Social Science - 7 7 7 8

National Agricultural Statistics Service

Statistical - - 3 3 3

Total Basic Research $ 910 $ 892 $ 807 $ 865 $ 924

Applied Research: 

Agricultural Research Service

Human Nutrition $ 34 $ 34 $ 32 $ 34 $ 34

Collaborative Research Program - - - - -

Product Quality/Value Added 40 40 37 40 42

Livestock Production 35 35 28 30 33

Crop Production 86 86 84 91 93

Food Safety 45 45 39 42 43

Livestock Protection 36 36 28 31 32

Crop Protection 77 76 72 77 81

Environmental Stewardship 81 80 70 75 80

National Institute of Foods and Agriculture

Land-grant University System 465 454 393 424 467

Forest Service 238 204 192 207 220

Economic Research Service

Economic and Social Science 85 72 64 71 74

National Agricultural Statistics Service

Statistical 5 5 4 4 4

Total Applied Research 1,227$ 1,167$ 1,043$ 1,126$ $ 1,203

Development: 

Agricultural Research Service

Human Nutrition 9$ 9$ 8$ 8$ $ 9

Product Quality/Value Added 10 10 9 10 11

Livestock Production 9 9 7 8 8

Crop Production 22 22 21 23 23

Food Safety 11 11 10 11 11

Livestock Protection 9 9 7 7 7

Crop Protection 19 18 18 19 20

Environmental Stewardship 20 20 17 19 20

Forest Service 10 31 40 32 16

National Agricultural Statistics Service

Statistical 4 4 - - -

Total Development $ 123 $ 143 $ 137 $ 137 $ 125

Total Research and Development 2,260$ 2,202$ 1,987$ 2,128$ $ 2,252
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Non-Federal Physical Property

FOOD AND NUTRITION SERVICE

FNS’ non-Federal physical property consists of computer systems and other equipment obtained 

by State and local governments for the purpose of administering the SNAP. The total SNAP 

expense for ADP Equipment & Systems has been reported as of the date of FNS’ financial 

statements. FNS’ non-Federal physical property also consists of computer systems and other 

equipment obtained by the State and local governments for the purpose of administering the 

Special Supplemental Nutrition Program for Women, Infants, and Children.

NATIONAL INSTITUTE OF FOOD AND AGRICULTURE 

The Extension 1890 facilities program supports the renovation of existing buildings and the 

construction of new facilities as well as computers and equipment purchases that permit faculty, 

students, and communities to benefit fully from the partnership between USDA and the 1890 

Land-Grant Universities. 

Human Capital

NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA)

The higher education programs include graduate fellowship grants, competitive challenge grants, 

Secondary/2-year Postsecondary grants, Hispanic serving institutions education grants, a 

multicultural scholars program, a Native American institutions program, a Native American 

institutions endowment fund, an Alaska Native-Serving and Native Hawaiian-Serving 

institutions program, a resident instruction grants and distance education grants for insular areas, 

and a capacity building program at the 1890 institutions. These programs enable universities to 

broaden their curricula, increase faculty development and student research projects, and increase 

the number of new scholars recruited in the food and agriculture sciences. NIFA also supports 

extension-related work at 1862 and 1890 land-grant institutions throughout the country through 

formula and competitive programs.

FOOD AND NUTRITION SERVICE (FNS)

FNS’ human capital consists of employment and training (E&T) for SNAP. The E&T program 

requires recipients of SNAP benefits to participate in an employment and training program as a 

condition to SNAP eligibility.

Outcome data for the E&T program is only available through the third quarter. As of this period, 

FNS’ E&T program has placed 513,475 work registrants subject to the 3-month SNAP 

participant limit and 1,135,113 work registrants not subject to the limit in either job-search, 

job-training, job-workfare, education, or work experience.
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AGRICULTURAL RESEARCH SERVICE (ARS)

As the Nation’s primary source for agricultural information, the National Agricultural Library 

(NAL) has a mission to increase the availability and utilization of agricultural information for 

researchers, educators, policymakers, consumers of agricultural products, and the public. The 

NAL is one of the world’s largest and most accessible agricultural research libraries and plays a 

vital role in supporting research, education, and applied agriculture. 

The NAL was created as the departmental library for USDA in 1862 and became a national 

library in 1990. One of four national libraries of the U.S. (with the Library of Congress, the 

National Library of Medicine, and the National Library of Education), it is also the coordinator 

for a national network of State land-grant and USDA field libraries. In its international role, the 

NAL serves as the U.S. center for the international agricultural information system, coordinating 

and sharing resources and enhancing global access to agricultural data. The NAL collection of 

over 8 million items and its leadership role in information services and technology applications 

combine to make it the foremost agricultural library in the world.

RISK MANAGEMENT AGENCY (RMA)

Federal Crop Insurance Corporation (FCIC) has formed partnerships with NIFA, the Commodity 

Futures Trading Commission, the USDA National Office of Outreach, the Economic Research 

Service (ERS), and private industry to leverage the Federal Government’s funding of its Risk 

Management Education (RME) program by using both public and private organizations to help 

educate their members in agricultural risk management. RME expanded State and Regional 

education partnerships; encouraged the development of information and technology-based 

decision aids; facilitated local crop insurance education and risk management training workshops 

throughout the Nation through Cooperative Agreements with educational institutions and 

community-based outreach organizations.

During fiscal years 2015 and 2014, the RME program worked toward its goals by funding risk 

management sessions, most of which directly target producers. The number of producers reached 

through these sessions is approximately 49,000 in fiscal year 2015, and 92,453 in fiscal year 

2014. In addition to reaching producers, some training sessions helped those who work with 

producers (such as lenders, agricultural educators, and other agricultural professionals) to better 

understand those areas of risk management with which they may be unfamiliar. Total RME 

obligations incurred by FCIC were approximately $8 million and $9 million in fiscal years 2015

and 2014, respectively.
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Research and Development 

AGRICULTURAL RESEARCH SERVICE (ARS) 

ARS’ mission is to conduct research to develop and transfer solutions to agricultural problems of 

high national priority and provide information access and dissemination to: ensure high quality, 

safe food, and other agricultural products; assess the nutritional needs of Americans; sustain a 

competitive agricultural economy; enhance the natural resource base and the environment; and 

provide economic opportunities for rural citizens, communities, and society as a whole. ARS’ 

programs are aligned under the Department’s priorities as follows: 

USDA Strategic Goal 1: Assist Rural Communities to Create Prosperity So They Are 

Self-Sustaining, Repopulating, and Economically Thriving 

New Products/Product Quality/Value Added 

ARS has active research programs directed toward: improving the efficiency and reducing the 

cost for the conversion of agricultural products into biobased products and biofuels; developing 

new and improved products for domestic and foreign markets; and providing higher quality, 

healthy foods that satisfy consumer needs in the United States and abroad. Note: Some of ARS’ 

Livestock and Crop Production research is carried out under this Strategic Goal and Strategic 

Goal 3. 

National Agricultural Library (NAL)

NAL, among the world’s largest libraries serving agriculture, delivered about 53 million page 

views and almost 1 million searches in FY 2015. 

Buildings and Facilities

ARS has approximately 95 laboratory locations, primarily located throughout the United States. 

ARS’ facilities programs are designed to meet the needs of its scientists and support personnel to 

accomplish the agency’s mission. 

USDA Strategic Goal 2: Ensure Our National Forests and Private Working Lands Are 

Conserved, Restored, and Made More Resilient to Climate Change, While Enhancing Our Water 

Resources 

Environmental Stewardship

ARS’ research program emphasis is in developing technologies and systems that support 

sustainable production and enhance the Nation’s vast renewable natural resource base. The 

agency is currently developing the scientific knowledge and technologies needed to meet the 

challenges and opportunities facing U.S. agriculture in managing water resource quality and 

quantity under different climatic regimes, production systems, and environmental conditions. 

ARS’ research also focuses on developing measurement, prediction, and control technologies for 

emissions of greenhouse gases, particulate matter, ammonia, hydrogen sulfide, and volatile 
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organic compounds affecting air quality and land-surface climate interactions. The agency is a 

leader in developing measurement and modeling techniques for characterizing gaseous and 

particulate matter emissions from agriculture. In addition, ARS is evaluating strategies for 

enhancing the health and productivity of soils, including developing predictive tools to assess the 

sustainability of alternative land management practices. Finding mechanisms to aid agriculture in 

adapting to changes in atmospheric composition and climatic variations is also an important 

component of this program. 

ARS’ range and grazing land research objectives include the conservation and restoration of the 

Nation’s range land and pasture ecosystems and agroecosystems through improved management 

of fire, invasive weeds, grazing, global change, and other agents of ecological change. The 

agency is currently developing improved grass and forage legume germplasm for livestock, 

conservation, bioenergy, and bioproduct systems as well as grazing-based livestock systems that 

reduce risk and increase profitability. In addition, ARS is developing whole system management 

strategies to reduce production costs and risks. 

USDA Strategic Goal 3: Help America Promote Agricultural Production and Biotechnology 

Exports As America Works to Increase Food Security 

Livestock Production 

ARS’ research program is directed toward fostering an abundant, safe, nutritionally wholesome, 

and competitively priced supply of animal products produced in a viable, competitive, and 

sustainable animal agriculture sector of the U.S. economy by: safeguarding and utilizing animal 

genetic resources, associated genetic and genomic databases, and bioinformatic tools; developing 

a basic understanding of food animal physiology to address priority issues related to animal 

production, animal well-being, and product quality and healthfulness; and developing 

information, best management practices, novel and innovative tools, and technologies that 

improve animal production systems, enhance human health, and ensure domestic food security. 

The research is heavily focused on the development and application of genomics technologies to 

increase the efficiency and product quality of beef, dairy, swine, poultry, aquaculture, and sheep 

systems. Areas of emphasis include increasing the efficiency of nutrient utilization, increasing 

animal well-being and reducing stress in production systems, increasing reproductive rates and 

breeding animal longevity, developing and evaluating non-traditional production systems 

(e.g., organic and natural), and evaluating and conserving animal genetic resources. 

Crop Production 

ARS’ program focuses on developing and improving ways to reduce crop losses while protecting 

and ensuring a safe and affordable food supply. The program concentrates on production 

strategies that are environmentally friendly, safe to consumers, and compatible with sustainable 

and profitable crop production systems. Research activities are directed at safeguarding and 

utilizing plant genetic resources and their associated genetic, genomic, and bioinformatic 

databases that facilitate selection of varieties and/or germplasm with significantly improved 

traits. Research activities attempt to minimize the impacts of crop pests while maintaining 

healthy crops and safe commodities that can be sold in markets throughout the world. The 
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agency is conducting research to discover and exploit naturally occurring and engineered genetic 

mechanisms for plant pest control, develop agronomic germplasm with durable defensive traits, 

and transfer genetic resources for commercial use. ARS is also providing taxonomic information 

on invasive species that strengthens prevention techniques, aids in detection/identification of 

invasive pests, and increases control through management tactics that restore habitats and 

biological diversity. 

USDA Strategic Goal 4: Ensure that All of America’s Children Have Access to Safe, Nutritious, 

and Balanced Meals 

Food Safety 

ARS’ research program is designed to yield science-based knowledge on the safe production, 

storage, processing, and handling of plant and animal products, and on the detection and control 

of pathogenic bacteria and fungi, parasites, chemical contaminants, and plant toxins. All of ARS' 

research activities involve a high degree of cooperation and collaboration with USDA's 

Research, Education, and Economics agencies, as well as with the Food Safety and Inspection 

Service (FSIS), Animal and Plant Health Inspection Service (APHIS), the Food and Drug 

Administration (FDA), the Centers for Disease Control and Prevention (CDC), the Department 

of Homeland Security (DHS), and the Environmental Protection Agency (EPA). The agency also 

collaborates in international research programs to address and resolve global food safety issues. 

Specific research efforts are directed toward developing new technologies that assist ARS 

stakeholders and customers, including regulatory agencies, industry, and commodity and 

consumer organizations in detecting, identifying, and controlling foodborne diseases that affect 

human health. 

Livestock Protection 

ARS’ program is directed at protecting and ensuring the safety of the Nation's agriculture and 

food supply through improved disease detection, prevention, control, and treatment. Basic and 

applied research approaches are used to solve animal health problems of high national priority. 

Emphasis is given to methods and procedures to control animal diseases through the discovery 

and development of diagnostics, vaccines, biotherapeutics, animal genomics applications, 

disease management systems, animal disease models, and farm biosecurity measures. The 

research program has the following strategic objectives: establish ARS laboratories into a fluid, 

highly effective research network to maximize use of core competencies and resources; use 

specialized high containment facilities to study zoonotic and emerging diseases; develop an 

integrated animal and microbial genomics research program; establish core competencies in 

bovine, swine, ovine, and avian immunology; launch a biotherapeutic discovery program 

providing alternatives to animal drugs; build a technology driven vaccine and diagnostic 

discovery research program; develop core competencies in field epidemiology and predictive 

biology; establish a best-in-class training center for our Nation's veterinarians and scientists; and 

develop a model technology transfer program to achieve the full impact of ARS research 

discoveries. The ARS animal research program includes the following core components: 

biodefense research, animal genomics and immunology, zoonotic diseases, respiratory diseases, 
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reproductive and neonatal diseases, enteric diseases, parasitic diseases, and transmissible 

spongiform encephalopathies.

Crop Protection

ARS’ Crop Protection research program is directed to protect crops from insect and disease loss 

through research to understand pest and disease transmission mechanisms, and to identify and 

apply new technologies that increase our understanding of virulence factors and host defense 

mechanisms. The program’s research priorities include: identification of genes that convey 

virulence traits in pathogens and pests; factors that modulate infectivity, gene functions, and 

mechanisms; genetic profiles that provide specified levels of disease and insect resistance under 

field conditions; and mechanisms that reduce the spread of pests and infectious diseases. ARS is 

developing new knowledge and integrated pest management approaches to control pest and 

disease outbreaks as they occur. Its research will improve the knowledge and understanding of 

the ecology, physiology, epidemiology, and molecular biology of emerging diseases and pests. 

This knowledge will be incorporated into pest risk assessments and management strategies to 

minimize chemical inputs and increase production. Strategies and approaches will be available to 

producers to control emerging crop diseases and pest outbreaks and to address quarantine issues.

Human Nutrition

Maintenance of health throughout the lifespan along with prevention of obesity and chronic 

diseases via food-based recommendations are the major emphases of ARS’ Human Nutrition

Research Program. These health-related goals are based on the knowledge that deficiency 

diseases are no longer the primary public health concerns in the U.S. Excessive consumption has 

become the primary nutrition problem in the American population. This is reflected by increased 

emphasis on prevention of obesity, from basic science through intervention studies to 

assessments of large populations. The agency’s research program also studies essential nutrients 

and nonessential, health promoting components in foods. Four specific areas of research are 

emphasized: nutrition monitoring; the scientific basis for dietary recommendations; prevention of 

obesity and related diseases; and life stage nutrition and metabolism, in order to better define the 

role of nutrition in pregnancy and growth of children, and for healthier aging.

NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA)

NIFA participates in a nationwide land-grant university system of agriculture related research 

and program planning and coordination between State institutions and USDA. It assists in 

maintaining cooperation among the State institutions, and between the State institutions and their 

Federal research partners. NIFA administers competitive grants and capacity/formula payments 

to State institutions to leverage State and local funding for agriculture research.

FOREST SERVICE (FS)

Forest Service R&D has an integrated portfolio that supports achievement of the agency’s 

strategic goals. The FS R&D structure has two components: Priority Research Areas and 

Strategic Program Areas (SPAs). 
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The Priority Research Areas address urgent needs in seven areas: Forest Disturbances, Forest 

Inventory and Analysis, Watershed Management and Restoration, Bioenergy and Biobased 

Products, Urban Natural Resources Stewardship, Nanotechnology, and Localized Needs 

Research. 

The SPAs are the long-term programs from which Priority Research Areas are funded; the SPAs 

are: 

Wildland Fire and Fuels 

R&D provides managers with the knowledge and tools to reduce negative impacts, while 

enhancing the beneficial effects of wildland fire, as a natural process. This knowledge and these 

tools are critical to understanding the human process of fire and fuels management on society 

and the environment. 

Research focuses on understanding and modeling fundamental fire processes; interactions of fire 

with ecosystems; and the environmental, social, and economic aspects of fire, as well as 

evaluating the integrated management strategies and disturbance interactions at multiple scales 

and the application of fire research to address management problems. 

Invasive Species 

R&D provides the scientific information, methods, and technology to reduce or eliminate the 

introduction, spread, and impact of invasive species and to restore or improve the functionality of 

ecosystems affected by invasive species. 

Research focuses on non-native plants, animals, fish, insects, diseases, invertebrates, and other 

species whose introduction is likely to cause economic or environmental harm to an ecosystem. 

Water, Air, and Soil 

R&D enables the sustainable management of these essential resources by providing clear air and 

safe drinking water, by protecting lives and property from wildfire and smoke, and by adapting 

to climate variability and change. 

The program features ecosystem services with a high level of integration between water, air, and 

soil research, such as the effects of climate variability and change on water budgets or carbon 

sequestration metrics from an ecosystem perspective. 

Wildlife and Fish 

R&D relies upon interdisciplinary research to inform policy initiatives affecting wildlife and fish 

habitat on private and public lands, and the recovery of threatened or endangered species. 

Scientists investigate the complex interactions among species, ecosystem dynamics and 

processes, land use and management, and any emerging broadscale threats, including global 

climate change, loss of open space, invasive species, and disease. 
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Resource Management and Use 

R&D provides the scientific and technology base to sustainably manage and use forest resources 

and forest fiber-based products. 

Research focuses on the plant sciences, soil sciences, social sciences, silviculture, productivity, 

forest and range ecology management, harvesting and operations, forest and biomass products 

and utilization, economics, urban forestry, and climate change. 

Outdoor Recreation 

R&D promotes human and ecological sustainability by researching environmental management, 

activities, and experiences that connect people with the natural world. 

Research in outdoor recreation is interdisciplinary, focusing on nature-based recreation and the 

changing trends in American society; connections between recreation visitors, communities, and 

the environment; human benefits and consequences of recreation and nature contact; the 

effectiveness of recreation management and decision-making; and sustaining ecosystems 

affected by recreational use. 

Inventory and Monitoring 

R&D provides the resource data, analysis, and tools needed to monitor forest ecosystems 

vulnerable to rapid change due to threats from fire, insects, disease, natural processes, or 

management actions. From their research, scientists determine the status and trend of the health 

of the Nation’s forests and grasslands, and the potential impact from climate change. 

Their research integrates the development and use of science, technology, and remotely sensed 

data to better understand the incidences of forest fragmentation over time from changes in land 

use or from insects, disease, fire, and extreme weather events. 

A representative summary of FY 2015 accomplishments include the following: 

 48 new interagency agreements and contracts 

 13 interagency agreements and contracts continued 

 2,017 articles published in journals 

 357 articles published in all other publications 

 9 patents granted 

ECONOMIC RESEARCH SERVICE (ERS) 

ERS provides economic and other social science research and analysis for public and private 

decisions on agriculture, food, natural resources, and rural America. Research results and 

economic indicators on these important issues are fully disseminated through published and 

electronic reports and articles, special staff analyses, briefings, presentations and papers, 

databases, and individual contacts. ERS’ objective information and analysis helps public and 
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private decision makers attain the goals that promote agricultural competitiveness, food safety 

and security, a well-nourished population, environmental quality, and a sustainable rural 

economy.

NATIONAL AGRICULTURAL STATISTICS SERVICE (NASS)

Research is conducted to improve the statistical methods and related technologies used to 

produce U.S. agricultural statistics. The research agenda has two primary areas of emphasis: the 

National Agricultural Statistics Service estimation program and the Census of Agriculture 

program. For each, the goal is the development of improved estimates at lower cost, with 

reduced respondent burden, and with valid measures of uncertainty. All facets of the estimation 

process are considered, from increasing efficiencies in sampling and data collection to enhancing 

the statistical methodology used to analyze the data. Two high priority items within the research 

effort are significance editing (cleaning of respondent data) and model-based estimates. 

Significance editing has the potential to enhance the quality of survey data and to reduce manual 

operations in preparing survey responses summaries. Model-based estimates are used to combine

data from disparate sources, from sample surveys to remote sensing, resulting in improved 

estimates with valid measures of uncertainty. Going forward, users of NASS services and 

products will be increasingly dependent upon methodological and technological efficiencies.
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Required Supplementary Information

Deferred Maintenance and Repairs (Unaudited)

The Forest Service is steward to nearly 193 million acres of national forests and grasslands 

within the NFS. On these NFS lands, the agency manages major assets that are categorized as 

general PP&E, including nearly 40,000 administrative, recreation, and research buildings and 

approximately 26,750 recreational sites, such as campgrounds, picnic areas, trailheads, and 

interpretive sites.

Across the NFS, the agency also manages over 371,000 miles of roads, of which 65,000 miles 

are for passenger vehicles; over 157,000 miles of trails for motorized and non-motorized use; 

nearly 13,000 road and trail bridges; and over 1,700 Forest Service-owned and Special 

Use-Permitted dam structures.

ARS owns/manages approximately 15 million gross square feet of facility space in 3,000 

buildings on 400,000 acres of land. APHIS operates approximately 28 facilities, which includes 

378 buildings,in the United States and 14 facilities/buildings internationally. The NRCS portfolio 

of owned assets encompasses 29 sites, including 13 parcels of owned land, 260 buildings, and 

about 250 other structures.

Deferred Maintenance & Repairs (DM&R) estimates include capitalized PP&E, non-capitalized 

heritage assets, and non-capitalized or fully depreciated PP&E. 

No DM&R is reported for stewardship land because land is considered to be in acceptable 

condition unless an environmental contamination or liability is identified and the land cannot be 

used for its intended purpose. Stewardship land easements are excluded from DM&R since 

ownership is retained by the landowner.

DEFINING AND IMPLEMENTING MAINTENANCE AND REPAIRS POLICIES IN 

PRACTICE 

The Forest Service uses condition surveys to estimate DM&R on all major classes of its PP&E 

and heritage assets. DM&R estimates for most assets—except bridges—are based on condition 

surveys performed on a 5-year maximum revolving schedule. The bridge class is on a 2-year 

maximum revolving schedule. The agency’s DM&R for NFS passenger-car roads is determined 

annually—from random sample surveys—providing an 80-percent level of confidence. DM&R 

is not reported for roads that are not part of the passenger-car system.

ARS, APHIS, and NRCS use similar condition surveys to estimate DM&R on all major classes 

of its PP&E and heritage assets.
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RANKING AND PRIORITIZING MAINTENANCE AND REPAIRS ACTIVITIES 

Maintenance and repair activities are prioritized based on condition surveys and ranked based on 

PP&E and heritage assets that pose serious threats to public health or safety, a natural resource, 

or to the ability of the agency to implement its mission. 

FACTORS CONSIDERED IN SETTING ACCEPTABLE CONDITION 

The standards for acceptable operating condition for various classes of PP&E and heritage assets 

are as follows: 

Conditions of roads and bridges within the NFS road system are measured by various standards: 

 Federal Highway Administration regulations for the Federal Highway Safety Act. 

 Best management practices for the nonpoint source provisions of the Clean Water Act from 

U.S. Environmental Protection Agency and States. 

 Road management objectives developed through the National Forest Management Act 

forest planning process. 

 Forest Service directives—Forest Service Manual (FSM) 7730, Operation and Maintenance 

(August 25, 2005, amendment was superseded with October 1, 2008, revision); Forest 

Service Handbook (FSH) 7709.56a, Road Preconstruction, and FSH 7709.56b, 

Transportation Structures Handbook. 

Dams are managed according to FSM 7500, Water Storage and Transmission, and FSH 7509.11, 

Dams Management Handbook. The condition of a dam is acceptable when the dam meets current 

design standards and does not have any deficiencies that threaten the safety of the structure or 

public. For dams to be rated in acceptable condition, the agency needs to restore the dams to the 

original functional purpose, correct unsightly conditions, or prevent more costly repairs. 

Buildings shall comply with the International Family of Building and Related Codes, the 

National Fire Protection Association Life Safety Code, the Forest Service Health and Safety 

Handbook, and the Occupational Safety Health Administration as determined by condition 

surveys and safety inspections. These requirements are found in FSM 7310, Buildings and 

Related Facilities, revised November 19, 2004. 

Recreation facilities are located within recreation sites that range from highly developed sites to 

general forest areas such as campgrounds, trailheads, trails, water and wastewater systems, 

interpretive facilities, and visitor centers. Recreation sites are managed in accordance with 

Federal laws and regulations (Code of Federal Regulations [CFR] 36). 

Detailed management guidelines are contained in FSM 2330, Publicly Managed Recreation 

Opportunities, and forest- and regional-level user guides. Quality standards for developed 

recreation sites were established as Meaningful Measures for health and cleanliness, settings, 

safety and security, responsiveness, and the condition of the facility. 
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The condition assessment for range structures (fences and stock handling facilities) is based on 

(1) a determination by knowledgeable range specialists or other district personnel of whether the 

structure would perform the originally intended function and (2) a determination through the use 

of a protocol system to assess conditions based on age. A long-standing range methodology is 

used to gather this data. 

Trails and trail bridges are managed according to Federal law and regulations (CFR 36). More 

specific direction is contained in FSM 2350, Trail, River, and Similar Recreation Opportunities, 

and the FSH 2309.18, Trails Management Handbook. 

DM&R of structures for wildlife, fish, and threatened and endangered species is determined by 

field biologists using their professional judgment. The DM&R is considered critical if resource 

damage or species endangerment would likely occur if maintenance were deferred much longer. 

ARS, APHIS, and NRCS define acceptable condition in accordance with standards comparable 

to those used in private industry for buildings and other structures. 

DEFERRED MAINTENANCE AND REPAIR COSTS 

`

FY 2015 

Ending Balance

FY 2015 

Beginning Balance

Asset Category

General PP&E $ 5,584 $ 5,467

Heritage Assets 130 127

Total $ 5,714 $ 5,594
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Statement of Budgetary Resources (Unaudited) 

FY 2015 FSA CCC FAS RMA FNS FSIS AMS APHIS GIPSA

Non-Budgetary Non-Budgetary

Financing Financing

Budgetary Accounts Budgetary Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Budgetary Resources:

Unobligated balance, brought forward, October 1: $ 471 $ 965 $ 991 $ 283 $ 337 $ 571 29,250$ $ 116 $ 153 $ 551 $ 22

Recoveries of prior year unpaid obligations 50 101 2,953 14 32 1 1,406 18 23 31 2

Other changes in unobligated balance (+ or -) (82) (880) (23) (115) (4) - (947) (8) (5) (8) -

Unobligated balance from prior year budget authority, net 439 186 3,921 182 365 572 29,709 126 171 574 24

Appropriations (discretionary and mandatory) 1,783 - 1,632 - 375 7,850 110,369 1,031 1,173 2,115 43

Borrowing authority (discretionary and mandatory) - 3,367 6,794 222 - - - - - - -

Spending authority from offsetting collections (discretionary and mandatory) 451 1,635 37 168 134 3,487 81 201 108 196 65

Total budgetary resources 2,673 5,188 12,384 572 874 11,909 140,159 1,358 1,452 2,885 132

Status of Budgetary Resources:

Obligations Incurred (Note 23) 2,272 3,043 11,786 393 358 11,336 105,870 1,214 1,300 2,212 100

Unobligated balance, end of year:

Apportioned 286 1,494 104 64 281 571 4,294 127 138 614 28

Exempt from apportionment - - 167 3 - - - - - - -

Unapportioned 116 651 327 112 235 29,994 2 17 14 59 4

Total unobligated balance, end of year 402 2,145 598 179 516 573 34,288 144 152 673 32

Total budgetary resources 2,674 5,188 12,384 572 874 11,909 140,158 1,358 1,452 2,885 132

Change in Obligated Balances:

Unpaid obligations:

Unpaid obligations, brought forward, October 1 394 446 10,579 136 439 2,228 8,533 135 540 397 13

Obligations incurred 2,272 3,043 11,786 393 358 11,336 105,870 1,214 1,300 2,212 100

Outlays (gross)(-) (2,197) (2,916) (14,124) (382) (354) (10,839) (104,017) (1,201) (1,172) (1,891) (97)

Recoveries of prior year unpaid obligations (-) (50) (101) (2,953) (14) (32) (1) (1,406) (18) (23) (31) (2)

Unpaid obligations, end of year 419 472 5,288 133 411 2,724 8,980 130 645 687 14

Uncollected payments:

Uncollected payments, Federal sources, brought forward, October 1 (-) (43) (14) (17) - (290) - 1 (49) (22) (226) (9)

Change in uncollected payments, Federal sources (+ or -) (17) 3 17 - (33) - (2) 10 1 (16) 1

Uncollected payments, Federal sources, end of year (-) (60) (11) - - (323) - (1) (39) (21) (242) (8)

Memorandum (non-add) entries:

Obligated balance, start of year (+ or -) 351 432 10,562 136 149 2,228 8,534 86 518 171 4

Obligated balance, end of year (+ or -) 359 461 5,288 133 88 2,724 8,979 91 624 445 6

Budget Authority and Outlays, Net 

Budget authority, gross (discretionary and mandatory) 2,234 5,002 8,463 390 509 11,337 110,450 1,232 1,281 2,311 108

Actual offsetting collections (-) (discretionary and mandatory) (518) (1,962) (6,039) (414) (101) (3,489) (79) (211) (109) (180) (66)

Change in uncollected customer payments from Federal sources (17) 3 17 - (33) - (2) 10 1 (16) 1

 (discretionary and mandatory)

Anticipated offsetting collections (+ or -) (discretionary and mandatory) - - - - - - - - - - -

Budget authority, net (discretionary and mandatory) 1,699 3,043 2,441 (24) 375 7,848 110,369 1,031 1,173 2,115 43

Outlays, gross (discretionary and mandatory) 2,197 2,916 14,124 382 354 10,839 104,017 1,201 1,172 1,891 97

Actual offsetting collections (discretionary and mandatory) (-) (518) (1,962) (6,039) (414) (101) (3,489) (79) (211) (109) (180) (66)

Outlays, net (discretionary and mandatory) 1,679 954 8,085 (32) 253 7,350 103,938 990 1,063 1,711 31

Distributed offsetting receipts (-) (1) (407) 4 (135) - - - (15) (155) (7) -

Agency outlays, net (discretionary and mandatory) $ 1,678 $ 547 8,089$ $ (167) $ 253 7,350$ 103,938$ $ 975 $ 908 1,704$ $ 31
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FY 2015 FS NRCS ARS NIFA ERS NASS RD DO TOTAL

Non-Budgetary Non-Budgetary

Financing Financing

Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Accounts Budgetary Budgetary Accounts

Budgetary Resources:

Unobligated balance, brought forward, October 1: 1,679$ 3,550$ $ 85 $ 430 2$ 1$ 6,498$ $ 8,373 $ 227 44,934$ $ 9,621

Recoveries of prior year unpaid obligations 273 364 36 74 6 21 255 2,804 13 5,558 2,919

Other changes in unobligated balance (+ or -) (26) (33) (3) (43) (1) - (698) (4,491) (14) (1,895) (5,486)

Unobligated balance from prior year budget authority, net 1,926 3,881 118 461 7 22 6,055 6,686 226 48,597 7,054

Appropriations (discretionary and mandatory) 5,738 4,125 1,206 1,418 85 172 5,299 2 381 144,795 2

Borrowing authority (discretionary and mandatory) - - - - - - - 8,879 - 6,794 12,468

Spending authority from offsetting collections (discretionary and mandatory) 814 237 141 35 7 23 2,526 10,621 1,027 9,570 12,424

Total budgetary resources 8,478 8,243 1,465 1,914 99 217 13,880 26,188 1,634 209,756 31,948

Status of Budgetary Resources:

Obligations Incurred (Note 23) 7,247 4,093 1,330 1,498 95 216 7,735 14,716 1,418 160,080 18,152

Unobligated balance, end of year:

Apportioned 775 1,808 97 484 - 1 3,927 8,324 166 13,701 9,882

Exempt from apportionment - - - - - - - - - 167 3

Unapportioned 456 2,342 38 (68) 4 - 2,218 3,148 50 35,808 3,911

Total unobligated balance, end of year 1,231 4,150 135 416 4 1 6,145 11,472 216 49,676 13,796

Total budgetary resources 8,478 8,243 1,465 1,914 99 217 13,880 26,188 1,634 209,756 31,948

Change in Obligated Balances:

Unpaid obligations:

Unpaid obligations, brought forward, October 1 2,341 4,495 460 1,926 34 48 4,359 22,483 485 37,406 23,065

Obligations incurred 7,247 4,093 1,330 1,498 95 216 7,735 14,716 1,418 160,080 18,152

Outlays (gross)(-) (6,748) (3,723) (1,286) (1,379) (79) (198) (8,094) (14,111) (1,441) (158,840) (17,409)

Recoveries of prior year unpaid obligations (-) (273) (364) (36) (74) (6) (21) (255) (2,804) (13) (5,558) (2,919)

Unpaid obligations, end of year 2,567 4,501 468 1,971 44 45 3,745 20,284 449 33,088 20,889

Uncollected payments:

Uncollected payments, Federal sources, brought forward, October 1 (-) (613) (193) (194) (83) (10) (18) (11) (641) (362) (2,139) (655)

Change in uncollected payments, Federal sources (+ or -) 13 (13) 29 14 (2) 3 1 79 55 61 82

Uncollected payments, Federal sources, end of year (-) (600) (206) (165) (69) (12) (15) (10) (562) (307) (2,078) (573)

Memorandum (non-add) entries:

Obligated balance, start of year (+ or -) 1,728 4,302 266 1,843 24 30 4,348 21,842 123 35,267 22,410

Obligated balance, end of year (+ or -) 1,967 4,295 303 1,902 32 30 3,735 19,722 142 31,010 20,316

Budget Authority and Outlays, Net 

Budget authority, gross (discretionary and mandatory) 6,552 4,362 1,347 1,453 92 195 7,825 19,502 1,408 161,159 24,894

Actual offsetting collections (-) (discretionary and mandatory) (826) (225) (170) (49) (4) (25) (3,739) (16,428) (1,084) (16,914) (18,804)

Change in uncollected customer payments from Federal sources 13 (13) 29 14 (2) 3 1 79 55 61 82

 (discretionary and mandatory)

Anticipated offsetting collections (+ or -) (discretionary and mandatory) - - - - - - - - - - -

Budget authority, net (discretionary and mandatory) 5,739 4,124 1,206 1,418 86 173 4,087 3,153 379 144,306 6,172

Outlays, gross (discretionary and mandatory) 6,748 3,723 1,286 1,379 79 198 8,094 14,111 1,441 158,840 17,409

Actual offsetting collections (discretionary and mandatory) (-) (826) (225) (170) (49) (4) (25) (3,739) (16,428) (1,084) (16,914) (18,804)

Outlays, net (discretionary and mandatory) 5,922 3,498 1,116 1,330 75 173 4,355 (2,317) 357 141,926 (1,395)

Distributed offsetting receipts (-) (701) (2) (31) (5) - - - (1,344) (35) (948) (1,886)

Agency outlays, net (discretionary and mandatory) 5,221$ 3,496$ 1,085$ 1,325$ $ 75 $ 173 4,355$ $ (3,661) $ 322 140,978$ $ (3,281)
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 7 9 

FY 2014 FSA CCC FAS RMA FNS FSIS AMS APHIS GIPSA

Non-Budgetary Non-Budgetary

Financing Financing

Budgetary Accounts Budgetary Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Budgetary Resources:

Unobligated balance, brought forward, October 1: $ 480 $ 618 1,066$ $ 376 $ 474 $ 568 20,210$ $ 75 $ 140 $ 454 $ 17

Recoveries of prior year unpaid obligations 40 83 393 48 75 6 1,011 8 15 29 1

Other changes in unobligated balance (+ or -) (51) (540) (36) (138) (62) (1) (1,902) (7) (7) (6) (1)

Unobligated balance from prior year budget authority, net 469 161 1,423 286 487 573 19,319 76 148 477 17

Appropriations (discretionary and mandatory) 1,824 - 2,833 - 374 8,828 114,563 1,024 1,145 1,158 37

Borrowing authority (discretionary and mandatory) 32 3,373 14,616 209 - - - - - - -

Spending authority from offsetting collections (discretionary and mandatory) 397 134 (92) 104 81 4,038 154 193 107 201 62

Total budgetary resources 2,722 3,668 18,780 599 942 13,439 134,036 1,293 1,400 1,836 116

Status of Budgetary Resources:

Obligations Incurred (Note 23) 2,251 2,703 17,789 316 605 12,868 104,786 1,177 1,247 1,285 94

Unobligated balance, end of year:

Apportioned 339 195 312 96 162 569 11,033 98 143 507 18

Exempt from apportionment - - 195 8 - - - - - - -

Unapportioned 132 770 484 179 175 18,217 2 18 10 44 4

Total unobligated balance, end of year 471 965 991 283 337 571 29,250 116 153 551 22

Total budgetary resources 2,722 3,668 18,780 599 942 13,439 134,036 1,293 1,400 1,836 116

Change in Obligated Balances:

Unpaid obligations:

Unpaid obligations, brought forward, October 1 327 259 11,597 209 296 1,716 7,238 137 214 357 10

Obligations incurred 2,251 2,703 17,789 316 605 12,868 104,786 1,177 1,247 1,285 94

Outlays (gross)(-) (2,144) (2,433) (18,414) (341) (388) (12,351) (102,480) (1,170) (905) (1,216) (90)

Recoveries of prior year unpaid obligations (-) (40) (83) (393) (48) (75) (6) (1,011) (8) (15) (29) (1)

Unpaid obligations, end of year 394 446 10,579 136 439 2,228 8,533 135 540 397 13

Uncollected payments: - - - - - - - - - - -

Uncollected payments, Federal sources, brought forward, October 1 (-) (41) (12) (48) (157) (386) - - (45) (18) (208) (7)

Change in uncollected payments, Federal sources (+ or -) (2) (2) 31 157 96 - 1 (4) (4) (18) (2)

Uncollected payments, Federal sources, end of year (-) (43) (14) (17) - (290) - 1 (49) (22) (226) (9)

Memorandum (non-add) entries: - - - - - - - - - - -

Obligated balance, start of year (+ or -) 286 247 11,549 52 (90) 1,716 7,238 92 196 149 3

Obligated balance, end of year (+ or -) 351 432 10,562 136 149 2,228 8,534 86 518 171 4

Budget Authority and Outlays, Net - - - - - - - - - - -

Budget authority, gross (discretionary and mandatory) 2,253 3,507 17,357 313 455 12,866 114,717 1,217 1,252 1,359 99

Actual offsetting collections (-) (discretionary and mandatory) (505) (1,939) (5,118) (537) (177) (4,039) (154) (190) (103) (182) (60)

Change in uncollected customer payments from Federal sources (2) (2) 31 157 96 - 1 (4) (4) (18) (2)

 (discretionary and mandatory)

Anticipated offsetting collections (+ or -) (discretionary and mandatory) - - - - - - - - - - -

Budget authority, net (discretionary and mandatory) 1,746 1,566 12,270 (67) 374 8,827 114,564 1,023 1,145 1,159 37

Outlays, gross (discretionary and mandatory) 2,144 2,433 18,414 341 388 12,351 102,480 1,170 905 1,216 90

Actual offsetting collections (discretionary and mandatory) (-) (505) (1,939) (5,118) (537) (177) (4,039) (154) (190) (103) (182) (60)

Outlays, net (discretionary and mandatory) 1,639 494 13,296 (196) 211 8,312 102,326 980 802 1,034 30

Distributed offsetting receipts (-) (4) (168) - (74) (9) - (3) (13) (161) (7) -

Agency outlays, net (discretionary and mandatory) $ 1,635 $ 326 13,296$ $ (270) $ 202 8,312$ 102,323$ $ 967 $ 641 1,027$ $ 30
S E C T I O N I I | F I N A N C I A L I N F O R M A T I O N 

1 8 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FY 2014 FS NRCS ARS NIFA ERS NASS RD DO TOTAL

Non-Budgetary Non-Budgetary

Financing Financing

Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Accounts Budgetary Budgetary Accounts

Budgetary Resources:

Unobligated balance, brought forward, October 1: 1,087$ 3,051$ $ 61 $ 295 1$ 1$ 5,483$ $ 7,764 $ 268 33,731$ $ 8,758

Recoveries of prior year unpaid obligations 273 470 38 53 2 10 209 1,135 22 2,655 1,266

Other changes in unobligated balance (+ or -) (10) (11) (5) (35) - - (378) (4,134) (8) (2,520) (4,812)

Unobligated balance from prior year budget authority, net 1,350 3,510 94 313 3 11 5,314 4,765 282 33,866 5,212

Appropriations (discretionary and mandatory) 6,312 4,270 1,151 1,451 78 162 5,422 21 521 151,153 21

Borrowing authority (discretionary and mandatory) - - - - - - - 7,122 - 14,648 10,704

Spending authority from offsetting collections (discretionary and mandatory) 662 25 164 50 6 32 3,399 8,252 1,022 10,501 8,490

Total budgetary resources 8,324 7,805 1,409 1,814 87 205 14,135 20,160 1,825 210,168 24,427

Status of Budgetary Resources:

Obligations Incurred (Note 23) 6,645 4,255 1,324 1,384 85 204 7,637 11,787 1,598 165,234 14,806

Unobligated balance, end of year:

Apportioned 1,317 928 43 481 1 - 3,836 5,231 179 19,966 5,522

Exempt from apportionment - - - - - - - - - 195 8

Unapportioned 362 2,622 42 (51) 1 1 2,662 3,142 48 24,773 4,091

Total unobligated balance, end of year 1,679 3,550 85 430 2 1 6,498 8,373 227 44,934 9,621

Total budgetary resources 8,324 7,805 1,409 1,814 87 205 14,135 20,160 1,825 210,168 24,427

Change in Obligated Balances:

Unpaid obligations:

Unpaid obligations, brought forward, October 1 2,352 4,424 391 1,995 31 37 4,722 24,541 416 36,260 25,009

Obligations incurred 6,645 4,255 1,324 1,384 85 204 7,637 11,787 1,598 165,234 14,806

Outlays (gross)(-) (6,383) (3,714) (1,218) (1,400) (81) (183) (7,791) (12,710) (1,505) (161,433) (15,484)

Recoveries of prior year unpaid obligations (-) (273) (470) (38) (53) (2) (10) (209) (1,135) (22) (2,655) (1,266)

Unpaid obligations, end of year 2,341 4,495 460 1,926 34 48 4,359 22,483 485 37,406 23,065

Uncollected payments: - - - - - - - - - - -

Uncollected payments, Federal sources, brought forward, October 1 (-) (459) (238) (183) (102) (8) (9) (20) (743) (395) (2,167) (912)

Change in uncollected payments, Federal sources (+ or -) (154) 45 (11) 19 (2) (9) 9 102 33 28 257

Uncollected payments, Federal sources, end of year (-) (613) (193) (194) (83) (10) (18) (11) (641) (362) (2,139) (655)

Memorandum (non-add) entries: - - - - - - - - - - -

Obligated balance, start of year (+ or -) 1,893 4,186 208 1,893 23 28 4,702 23,798 21 34,093 24,097

Obligated balance, end of year (+ or -) 1,728 4,302 266 1,843 24 30 4,348 21,842 123 35,267 22,410

Budget Authority and Outlays, Net - - - - - - - - - - -

Budget authority, gross (discretionary and mandatory) 6,974 4,295 1,315 1,501 84 194 8,821 15,395 1,543 176,302 19,215

Actual offsetting collections (-) (discretionary and mandatory) (507) (69) (153) (70) (4) (23) (4,669) (10,666) (1,056) (17,079) (13,142)

Change in uncollected customer payments from Federal sources (154) 45 (11) 19 (2) (9) 9 102 33 28 257

 (discretionary and mandatory)

Anticipated offsetting collections (+ or -) (discretionary and mandatory) - - - - - - - - - - -

Budget authority, net (discretionary and mandatory) 6,313 4,271 1,151 1,450 78 162 4,161 4,831 520 159,251 6,330

Outlays, gross (discretionary and mandatory) 6,383 3,714 1,218 1,400 81 183 7,791 12,710 1,505 161,433 15,484

Actual offsetting collections (discretionary and mandatory) (-) (507) (69) (153) (70) (4) (23) (4,669) (10,666) (1,056) (17,079) (13,142)

Outlays, net (discretionary and mandatory) 5,876 3,645 1,065 1,330 77 160 3,122 2,044 449 144,354 2,342

Distributed offsetting receipts (-) (704) - (29) (5) - 3 - (1,380) 21 (911) (1,622)

Agency outlays, net (discretionary and mandatory) 5,172$ 3,645$ 1,036$ 1,325$ $ 77 $ 163 3,122$ $ 664 $ 470 143,443$ $ 720
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 8 1 

Risk Assumed Information (Unaudited) 

Risk assumed is generally measured by the present value of unpaid expected losses net of 

associated premiums based on the risk inherent in the insurance or guarantee coverage in force. 

Risk assumed information is in addition to the liability for unpaid claims from insured events 

that have already occurred. The assessment of losses expected based on the risk assumed are 

based on actuarial or financial methods applicable to the economic, legal and policy environment 

in force at the time the assessments are made. The FCIC has estimated the loss amounts based on 

the risk assumed for its programs to be $7,642 million and $7,640 million as of September 30, 

2015 and 2014, respectively. 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

1 8 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Section III: Other Information 

Schedule of Spending 

The Schedule of Spending (SOS) presents an overview of how and where agencies are spending 

(i.e. obligating) money for the reporting period. The data used to populate this schedule is the 

same underlying data used to populate the Statement of Budgetary Resources (SBR). The “Total 

Amounts Agreed to be Spent”line item of the SOS should reconcile to the “Obligations Incurred” 

line in the SBR. These amounts may not reconcile to USAspending.gov because the SOS and the 

website have different reporting requirements. 

For The Years Ended September 30, 2015 and 2014 (In Millions) 

Non-budgetary Non-budgetary

Credit Reform Credit Reform

Budgetary Financing Accounts Budgetary Financing Accounts

What Money is Available to Spend?

Total Resources $ 209,756 $ 31,948 $ 210,168 $ 24,427

Less Amount Available but Not Agreed to be Spent 13,868 9,885 20,161 5,530

Less Amount Not Available to be Spent 35,808 3,911 24,773 4,091

Total Amounts Agreed to be Spent 160,080 18,152 165,234 14,806

How was the Money Spent/Issued?

Assist Rural Communities to Create Prosperity so They Are

Self-Sustaining, Repopulating, and Economically Thriving:

Personnel Compensation and Benefits 2,108 - 2,101 -

Travel and transportation 8 0 - 7 1 -

Rent, communications, and utilities 187 - 136 (1)

Other contractual services 4,843 2,801 4,361 2,013

Supplies and materials 399 - 341 -

Equipment, land, and structures 4 8 - 5 7 -

Investments and loans 7,751 9,918 4,434 8,033

Grants, subsidies, and contributions 6,299 - 16,313 -

Insurance claims and indemnities 8,711 - 10,685 -

Interest, dividends, and refunds 9 7 4,684 120 4,135

Other 4 6 - 5 6 -

Total 30,569 17,403 38,675 14,180

Ensure Our National Forests and Private Working Lands Are Conserved,

Restored, and Made More Resilient to Climate Change, While

Enhancing Our Water Resources:

Personnel Compensation and Benefits 4,368 - 4,257 -

Travel and transportation 238 - 221 -

Rent, communications, and utilities 346 - 333 -

Other contractual services 3,427 5 2,908 5

Supplies and materials 290 - 271 -

Equipment, land, and structures 418 - 446 -

Investments and loans - 431 - 412

Grants, subsidies, and contributions 4,999 - 5,147 -

Insurance claims and indemnities 1 9 - 1 2 -

Interest, dividends, and refunds (3) 141 (14) 8 3

Other 320 - 139 -

Total 14,422 577 13,720 500

2015 2014
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 8 3 

Schedule of Spending (continued) 

For The Years Ended September 30, 2015 and 2014 (In Millions) 

Non-budgetary Non-budgetary

Credit Reform Credit Reform

Budgetary Financing Accounts Budgetary Financing Accounts

Help America Promote Agricultural Production and Biotechnology

Exports as America Works to Increase Food Security:

Personnel Compensation and Benefits 184 - 189 -

Travel and transportation 9 - 9 -

Rent, communications, and utilities 1 6 - 1 3 -

Other contractual services 148 - 157 -

Supplies and materials 1 6 - 1 9 -

Equipment, land, and structures 1 3 - 1 2 -

Investments and loans 6 8 112 1 2 0

Grants, subsidies, and contributions 2,820 - 2,502 5 6

Insurance claims and indemnities 1 3 - 1 -

Interest, dividends, and refunds - 6 0 - 5 0

Other 2 1 - 2 3 -

Total 3,308 172 2,926 126

Ensure that All of America's Children Have Access to Safe, 

Nutritious, and Balanced Meals:

Personnel Compensation and Benefits 2,108 - 2,144 -

Travel and transportation 108 - 8 7 -

Rent, communications, and utilities 136 - 8 1 -

Other contractual services 1,305 - 812 -

Supplies and materials 2,085 - 1,812 -

Equipment, land, and structures 7 2 - 8 1 -

Investments and loans - - - -

Grants, subsidies, and contributions 104,377 - 103,266 -

Insurance claims and indemnities 144 - 5 -

Interest, dividends, and refunds - - - -

Other 5 9 - 5 0 -

Total 110,394 - 108,338 -

Create a USDA for the 21st Century that is High Performing, 

Efficient, and Adaptable:

Personnel Compensation and Benefits 518 - 509 -

Travel and transportation 1 2 - 1 1 -

Rent, communications, and utilities 139 - 290 -

Other contractual services 621 - 651 -

Supplies and materials 1 6 - 1 2 -

Equipment, land, and structures 6 5 - 9 0 -

Investments and loans - - - -

Grants, subsidies, and contributions 9 - 1 0 -

Insurance claims and indemnities 1 - - -

Interest, dividends, and refunds - - 1 -

Other 6 - 1 -

Total 1,387 - 1,575 -

USDA Total 

Personnel Compensation and Benefits 9,286 - 9,200 -

Travel and transportation 447 - 399 -

Rent, communications, and utilities 824 - 853 (1)

Other contractual services 10,344 2,806 8,889 2,018

Supplies and materials 2,806 - 2,455 -

Equipment, land, and structures 616 - 686 -

Investments and loans 7,819 10,461 4,435 8,465

Grants, subsidies, and contributions 118,504 - 127,238 5 6

Insurance claims and indemnities 8,888 - 10,703 -

Interest, dividends, and refunds 9 4 4,885 107 4,268

Other 452 - 269 -

Total 160,080 18,152 165,234 14,806

Total Amounts Agreed to be Spent 160,080 18,152 165,234 14,806

Who did the Money go to?

Federal 11,222 6,562 11,259 5,649

Non-Federal 148,858 11,590 153,975 9,157

Total Amounts Agreed to be Spent 160,080 18,152 165,234 14,806
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

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Response to Management Challenges 

The Reports Consolidation Act of 2000 requires the U.S. Department of Agriculture (USDA) 

Office of Inspector General (OIG) to report annually on the most serious management challenges 

USDA and its agencies face. To identify these Departmental challenges, OIG examined 

previously issued audit reports where corrective actions have yet to be taken. OIG also assessed 

ongoing investigative and audit work to ascertain significant vulnerabilities, and analyzed new 

programs and activities that could pose significant challenges due to their range and complexity. 

This year, OIG has undertaken a significant revision of how they present the management 

challenges. In an effort to provide the Secretary and other policymakers with a document that 

responds more fully to their needs and explains more clearly how challenges are identified, 

addressed, and resolved, OIG has consolidated the 11 challenges from the 2014 management 

challenges into 7 challenges. While the issues USDA faces are much the same in 2015 as in 

2014, instead of discussing those challenges as affecting individual agencies, OIG has expressed 

them in terms of issues that cut across the entire Department. 

The following narratives summarize: 

 OIG-recognized management challenges; 

 USDA’s fiscal year (FY) 2015 agency accomplishments; and 

 FY 2016 planned actions to address these management challenges. 

Challenge 1: USDA Needs to Improve Oversight and 

Accountability for its Programs

In Challenge 1, OIG recognizes that USDA faces challenges in overseeing its many agencies and 

programs. The Department employs nearly 100,000 employees in 17 agencies and 18 staff 

offices; in total, these employees operate more than 300 programs that are responsible for 

$144 billion in spending per year. USDA program managers face critical problems in overseeing 

these programs so that every dollar spent accomplishes the results intended. 

USDA managers are responsible for establishing an effective internal control system, ensuring 

that a culture of compliance with those controls exists, and USDA managers holding employees 

accountable for implementing those controls. Ultimately, as the Government Accountability 

Office (GAO) has stated, “People are what make internal control work.” If management does not 

emphasize those controls, the Federal programs will not function as intended. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 8 5 

INTERNAL CONTROLS 

Internal controls are the tools managers use to ensure that programs achieve intended results 

efficiently and effectively; they provide for program integrity and proper stewardship of 

resources. Managers must design effective internal systems for program implementation, 

comprising the policies, procedures, and organizational structures that collectively determine 

how a program is managed and how its requirements are met. Since systemic control flaws can 

yield systemic program weaknesses—e.g., unrealized goals and improper payments—managers 

must continuously assess and improve their internal control systems. When they identify a 

widespread deficiency, they must fix the problem before it undermines the program. 

OIG determined the following: 

 The Farm Service Agency’s (FSA) Modernize and Innovate the Delivery of Agricultural 

Systems (MIDAS) information technology system was 2 years overdue and approximately 

$140 million over budget; 

 The Food and Nutrition Service (FNS) could improve its controls over the Special 

Supplemental Nutrition Program for Women, Infants, and Children (WIC) by ensuring that 

State agencies take appropriate and timely corrective actions to reduce food costs; 

 USDA needs to strengthen its controls for fund transfers between programs; and 

 The Risk Management Agency (RMA) needs to design the Pasture, Rangeland, Forage 

pilot program to better meet the needs of producers. 

CORRECTIVE ACTIONS: 

Farm Service Agency 

Over the life of the MIDAS investment, USDA and FSA have identified and acknowledged that 

there were, and continue to be, opportunities to strengthen Agency-alignment to improve IT 

program oversight and investment management. FSA has taken active steps to address the issues 

raised and identified. Since the first deployment of MIDAS functionality in April 2013, the 

Agency has implemented organizational controls to bolster internal controls and enable increased 

program governance and oversight. The Agency has engaged a third party assessor, MITRE, a 

FFRDC non-profit technology consulting firm, to conduct an analysis of the current IT and 

organizational capability and provide recommendations that will enable a better future 

information technology service delivery model. 

As part of FSA’s continuous, Agency-wide transformation and improvement efforts, and in 

response to recommendations cited by OIG and GAO in recently published audit reports, FSA is 

pursuing an enhanced, more comprehensive governance structure that will further support 

increased rigor and adherence to defined program management processes. In accordance with 

USDA’s Integrated IT Governance Framework, the FSA IRB has the responsibility to review 
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1 8 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y

and evaluate Agency IT investments, make decisions on spending, and monitor performance of 

investments with a holistic, wide-lens focus on FSA program delivery. 

FSA and MIDAS are committed to devoting time and resources to implement improvements in 

oversight, accountability, and overall program management capability across the organization. 

Improvements to governance, oversight, and accountability have already been implemented. In 

March 2015, after more than 24 months of consistently being rated as medium to high risk, 

MIDAS was rated “Green”, or moderate to low risk. MIDAS has since maintained this rating for 

each consecutive month, illustrating the improvement in internal management, control, and 

oversight that has resulted from the implementation of enhanced program governance and 

management best practices. 

These comprehensive efforts demonstrate FSA’s commitment to improved oversight and 

accountability at all levels of the organization, specifically as related to the MIDAS program. 

With this leadership in place, the Agency has enabled organizational alignment around holistic 

improvements and a focus on quality that evidence FSA’s capability to properly manage and 

deliver IT systems.

To provide better oversight to IT projects to ensure program dollars achieve their intended 

results, FSA completed a corrective action plan for Capital Planning to guide the agency in 

consistently establishing effective plans for future IT projects. FSA is evaluating the IT 

governance structure to improve oversight and visibility. As part of this evaluation, FSA 

reviewed and updated the charter for the FSA Investment Review Board (FSA IRB). FSA is in 

the process of establishing an Enterprise Program Management Office (ePMO) with authority to 

define and enforce project controls across the agency. As the ePMO ramps up, a project controls 

gap analysis will be conducted, findings of which will be used as an input into the development 

of an ePMO implementation plan. A comprehensive FSA Capital Planning and Investment 

Control process will be defined and documented. FSA’s Software Development Lifecycle 

(SDLC), to align with USDA Integrated IT Governance Framework (IITGF) including 

appropriate decision gates, will be updated. 

FSA will complete the realignment of the FSA Office of the Chief Information Officer (OCIO) 

organization to support end-to-end portfolio, program, and project management. FSA will 

incorporate project planning, management, and controls into FSA OCIO employee performance 

plans, as appropriate, to drive accountability to the individual level. Additionally, FSA will 

establish the FSA OCIO Human Capital Plan, including a strategy and approach to obtain and 

develop resources with appropriate training, experience, and certifications to manage portfolios, 

programs, and projects. Program Managers, with the appropriate certifications, will be assigned 

for each active IT investment to ensure leadership with requisite skills is in place to effectively 

manage their respective investments. 

FSA will establish a revised requirements management approach, including requirements base 

lining and change control. FSA will publish an FSA IT Program and Project Management 

Guidebook, as well as complete the third-party independent analysis of the enterprise solution to 

determine if the current enterprise solution provides the necessary functionality, and identify a 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 1 8 7 

proposed strategic direction for modernizing and ensuring the most cost-effective means for 

delivery of IT Services in FSA’s dynamic program environment. FSA will execute the finalized 

ePMO implementation plan, establish a Performance Measurement Program to continually 

measure and assess performance, and implement annual customer satisfaction survey(s) covering 

all IT investments in support of operational assessments. 

FSA awarded a contract to bring in an independent assessor to determine if the current enterprise 

solution provides the necessary functionality and is the most cost-effective modernization 

solution. To synthesize activities and improvement measures conducted in FY 2015 with 

ongoing and future activities for program management improvement, FSA will develop and 

document a comprehensive improvement plan. This plan will delineate tactical steps, timelines, 

and performance metrics to track incremental progress in adopting recognized best practices and 

improving program management capabilities across the organization, and will enable continuous 

review and assessment of implemented improvements. This plan will be developed in direct 

alignment with the Office of Inspector General’s recommendation to obtain a non-USDA, 

third-party independent assessment to determine if the current enterprise solution provides the 

necessary functionality and is the most cost-effective modernization solution. 

Food and Nutrition Service 

During FY 2015, FNS published WIC Policy Memorandum 2015-6, “Promising Practices in 

WIC Food Cost Containment”. Through this guidance, FNS shared with WIC State agencies 

some of the food cost containment practices that show promise for reducing State agencies’ WIC 

food costs in two key areas: (1) vendor management; and (2) selection and authorization of 

supplemental foods (i.e., creation of an authorized product list [APL]). In addition, through this 

guidance, FNS requested from all WIC State agencies an analysis of implementing available cost 

containment measures to reduce food costs. 

WIC is currently participating in the FNS collaborative Standard Operating Procedures (SOP) 

workgroup for tracking and resolving management evaluations (MEs). The SOP will include 

established deadlines for the correction of deficiencies identified in MEs, how often FNS will 

follow up with State agencies, the type of work performed, and the enforcement actions FNS will 

take if the deadlines are missed. In addition, FNS will continue to issue fiscal claims against 

improper payments as these payments are identified. 

WIC is also in the process of developing a suite of technical assistance materials to include a 

vendor management handbook, periodic webinars, and targeted technical assistance protocols as 

part of the National Cost Containment Strategy. 

FNS has been working with the Economic Research Service (ERS) on its update of the 2005 

Report, Interstate Variation in WIC Food Package Costs: The Role of Food Prices, Caseload 

Composition, and Cost-Containment Practices. This study examines the degree to which food 

prices, caseloads, and the implementation of various cost containment measures influence in 

State agencies’ food package costs. The study is underway, and ERS informed FNS that a draft 

report would be published in September 2015. 
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Department-wide 

USDA has strengthened its system for approving, reviewing, and tracking appropriated fund 

transfers. OCFO issued Departmental Regulation (DR) 2235-001 entitled "Economy Act 

Agreements" and DR 2236-001 entitled "Shared Cost Programs" top provide policy guidance on 

transfer of funds. In January 2015, the Office of the Chief Financial Officer (OCFO) provided 

Interagency Agreement training on the Economy Act, Working Capital, and Shared Cost 

Programs to all agency CFOs. This training was later expanded with a second round of training 

to staff offices that execute interagency agreements. The training was evaluated with high marks, 

was recorded, and put into AgLearn to be used as a refresher training aid or for new onboards 

that have a role in executing interagency agreements. 

The Department will continue its efforts to build an online system to track interagency 

agreements, including the identification of the legal authority for the agreements. 

The implementation was delayed due to a requirement to accommodate new data fields 

necessary to provide compatibility with the Treasury-mandated Central Accounting Reporting 

System. User Pilot testing began in April 2015. OCFO plans to complete a detailed 

implementation plan for the required functionality by January 2016, with deployment of the 

required changes by June 2016. 

Risk Management Agency 

In August 2015, RMA incorporated a separate pricing methodology for irrigated and 

non-irrigated hay for the 2016 crop year. 

HUMAN RESOURCES 

As stated in the FY 2015 Management Challenges report, USDA, like most of the Federal 

Government, has been asked to accomplish more with fewer employees. For many agencies, this 

means appropriately training and utilizing their available staff. 

OIG determined the following: 

 The Animal and Plant Health Inspection Service’s (APHIS) Plant Protection and 

Quarantine (PPQ) program did not have a sufficient system of management controls to 

ensure the Preclearance Offshore Program was able to effectively protect U.S. agriculture 

from foreign pests and diseases; 

 PPQ officials did not implement management controls, such as performance measures, to 

assess the effectiveness of the program, or identify or analyze risks after accepting 

countries into the program; and 

 PPQ did not have a formal training program in place, which hindered its inspectors’ 

performance. 
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CORRECTIVE ACTIONS: 

APHIS agreed with OIG recommendations and is taking the steps described below to implement 

corrective actions. 

Animal and Plant Health Inspection Service 

During FY 2015, APHIS has: 

 Implemented a management controls training program; 

 Developed guidance on calculating travel time; 

 Implemented a preclearance travel policy; 

 Revised Preclearance Commodity Management Guidelines showing clear roles and 

responsibilities for all staff and management officials; 

 Implemented procedures requiring its review units to conduct ongoing assessments or 

audits of the programmatic aspects of the Preclearance Program; 

 Implemented a policy memorandum outlining the requirements for Preclearance Program 

trip reports, and a policy outlining the process for reviewing and evaluating trip reports and 

ensuring that the reports include relevant operational information; 

 Implemented written policy outlining the process for tracking the recommendations and 

planned corrective actions included in the trip reports; 

 Implemented policy requiring managers to ensure that all recommendations are addressed 

and appropriate corrective actions taken on a quarterly basis; and 

 Implemented procedures for including training costs for the Preclearance Program 

inspectors in the annual financial operating plans, the Cooperative Service Agreement, or 

other agreements between APHIS and the cooperator. APHIS implemented a process to 

track Locally Employed Staff (LES) inspector training in the Preclearance Program 

SharePoint site, and implemented Preclearance Commodity Management Guidelines 

requiring LES inspectors to complete on-the-job training prior to performing primary 

inspections. 

By the beginning of FY 2016, APHIS will: 

 Complete implementation of specific performance measures to evaluate and ensure the 

effectiveness of the Preclearance Program; 

 Implement policies, procedures, and guidelines for performing and reporting program 

operation reviews on a regular and recurring basis; 

 Implement an assessment process that includes measurable outcomes to ensure that 

operations are properly performed; 
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 Revise the Pest Interception Record (PPQ Form 309A) to include a field for tracking 

actionable pest interceptions; 

 Implement policies and procedures to ensure that operational work plans include definition 

for "a lot" and that sampling procedures are consistent for each commodity and a review of 

existing work plans are updated to include commodity sampling methodologies; 

 Implement a standard set of consequences for violations of compliance requirements; and 

 Implement policy regarding the training requirements of LES. 

Open Audit Recommendations 

OIG DETERMINED THE FOLLOWING: 

USDA could improve program accountability and oversight by making a determined, concerted 

effort to resolve outstanding audit recommendations. 

CORRECTIVE ACTIONS: 

Department-wide 

At the end of FY 2015, the Department had 398 open recommendations. Of those 

recommendations, 58 were under collection, 9 were without management decision, and 331 had 

reached management decision. The Department will continue to work with the agencies to 

reduce the number of outstanding recommendations. During FY 2015, the Department met with 

the agencies to determine if the agreed-upon corrective actions for recommendations open longer 

than 1 year, should be re-evaluated to determine if the corrective actions were still appropriate to 

resolve the recommendations. Meetings will be ongoing in FY 2016. 

Challenge 2: Information Technology Security Needs Continuing 

Improvement 

OIG states that to accomplish its mission of providing benefits and services to the American 

public, USDA must efficiently manage vast amounts of data. This critical information ranges 

from agricultural statistics that drive domestic and global markets to data-driven inspection 

systems that help ensure food safety. Department employees must be able to access, use, and 

communicate this information in order to deliver programs effectively. Additionally, the general 

public applies for and accesses many USDA program benefits and other services online, which 

can require the transfer of personally identifiable information through these online portals. It is 

therefore critical that the Department protect the security, confidentiality, and integrity of its 

information technology (IT) infrastructure. 
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OIG DETERMINED THE FOLLOWING: 

The Department has not: 

 Developed risk management procedures in accordance with Federal guidance; 

 Monitored agencies for compliance with baseline configurations and ensured the correction 

of known vulnerabilities; 

 Deleted separated employees’ access to computer systems; 

 Enforced a policy to detect and remove unauthorized network connections; and 

 The Department does not have a complete inventory of its cloud system. 

 OCIO will work with USDA agencies to identify overall risks, and then prioritize those 

risks. 

Outstanding Audit Recommendations 

From FYs 2009 through 2014, OIG made 57 recommendations for improving the overall security 

of USDA’s systems. Management decisions have been reached for all 57 recommendations, but 

only 21 of these have been closed (i.e., the agreed-upon corrective action has been implemented). 

OIG DETERMINED THE FOLLOWING: 

 Corrective action plans should be reviewed and updated. 

CORRECTIVE ACTIONS: 

Office of the Chief Information Officer 

The OCIO coordinates with agency Chief Information Officers (CIOs) and their program staff to 

ensure active exchange of program requirements and implementation challenges. This 

communication is conducted on several fronts relative to IT Security: CIO Leadership Council; 

CIO Council Advisory Working Group; one-on-one meetings with agency CIOs; monthly 

Information System Security Program Manager (ISSPM) meetings; and bi-weekly agency 

ISSPM and Agriculture Security Operation Centers (ASOC) liaison meetings to discuss 

assessment and authorization (A&A) activities. Additionally, OCIO has an active Threat 

Intelligence component which monitors active and real-time cyber-security threats and 

communicates this information directly to the agencies. All of these activities continued 

throughout FY 2015 and will continue as an effective means of bi-directional communication of 

IT security program requirements, concerns, and challenges. 

Since October 2011, OCIO has published eight IT and IT security-related Departmental 

Regulations (DR) that are National Institute for Standards and Technology (NIST) compliant. 

Additionally, OCIO currently has four IT-related policies in draft and/or revised and are 

scheduled to be published by the end of FY 2016. 
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USDA leverages the U.S. Department of Homeland Security’s (DHS) Cyber Hygiene Scanning 

for monthly vulnerabilities scans on all USDA internet protocol (IP) space. OCIO continues to 

work closely with DHS in evaluating and refining implementation into USDA’s environment for 

DHS’ Federal Security Dashboard and Continuous Diagnostics and Mitigation (CDM) Program 

and will report progress throughout FY 2016.

The Agriculture Security Operations Center (ASOC) conducts analysis of a statistical sample of 

agency-scanning documentation monthly. The Standard Operating Procedure (SOP) for this is in 

draft and OCIO anticipates the Chief Information Security Officer (CISO) approval by the end of 

FY 2015. Over 119,000 agency endpoints are connected to the ASOC’s Tivoli Endpoint 

Manager (TEM) for monitoring of the U.S. Government Configuration Baseline (USGCB)

compliance. The agencies continuously monitor the remaining non-TEM compatible systems for 

USCGB compliance and vulnerability to emerging threats. These are ongoing OCIO oversight 

activities and have continued throughout FY 2015 and into out-years.

OCIO published DR-3505-003 “Access Control for Information and Information Systems” on 

February 10, 2015, which is NIST Special Publication 800-53 (Rev 4) compliant. This DR sets 

forth USDA requirements for secure logical access administration and management to all IT 

systems and network components. Agencies were required to develop, implement, and maintain 

procedures to carry out the policy.

OCIO has undertaken an aggressive enterprise-wide initiative to implement technical 

enforcement of the use of the Homeland Security Presidential Directive (HSPD)-12 personal 

identity verification (PIV) cards for access-control (logical and physical) in FY 2015. This 

technical enforcement will result in near immediately disabling of IT access upon termination 

from a pay status of employees and contractors. OCIO is in the process of reviewing 

agency-level access control procedures for compliance. 

On August 12, 2014, OCIO published DR 3520-002 “Configuration Management”. This policy, 

combined with DR 3540-003 “Security Assessment and Authorization”, requires agencies to 

establish formal IT systems configuration management/change control processes and to 

continuously monitor their systems for compliance with secure baselines and authorized and 

unauthorized changes. Continuous monitoring and periodic scanning of operational systems 

within the USDA network facilitate the identification and removal of unauthorized network 

connections. The USDA’s Six Step Risk Management Framework (RMF) Process Guide was 

re-published in May 2015. These documents apply to all systems operated by or on behalf of 

USDA, including those systems within cloud environments. 

OCIO has hired additional staff to assist in gathering and reviewing artifacts to support 

documentation of remediation actions. OCIO has conducted an in-depth review of all 

outstanding IT Security related audit recommendations and grouped them by control area to 

leverage documentation over multiple findings. OCIO closed 8 outstanding recommendations in 

FY 2015 and have several pending adjudication of supporting documentation and submission to 

request final action. This has been delayed until the 1st quarter of FY 2016 due to other high 

priority OMB reporting requirements.
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Challenge 3: USDA Needs to Strengthen Program Performance 

and Performance Measures

OIG emphasized a key program performance challenge: USDA has been challenged to design, 

develop, and implement programs that reliably achieve their intended results. OIG has 

sometimes found that agencies focus on providing payments with little certainty that the funds 

provided are used to accomplish the program’s goals. USDA must continually strive to be a 

careful custodian of Federal funds, ensuring that its programs are well designed and report data 

that indicate the extent to which its programs have succeeded. 

OIG DETERMINED THE FOLLOWING: 

 USDA’s programs for supporting beginner farmers could benefit from a thorough revision 

of how these results are reported and better oversight of funds intended to encourage new 

farmers; 

 In FYs 2012 and 2013, USDA spent $3.9 billion in assistance for beginning farmers but did 

not develop an integrated and coordinated strategy to ensure that this assistance was 

helping new farmers establish and sustain new farming operations; 

 USDA agencies need to improve their coordination and more consistently define eligibility 

requirements for their programs; 

 The Department oversees the beginning farmers and ranchers initiative and focuses on 

developing measureable outcomes and goals; 

 The Department is unable to gauge the effectiveness of its beginning farmer activities in 

creating economically sustainable operations; and 

 The Departmental performance goal was not developed because the Department did not: 

(1) provide adequate oversight or resources to ensure the Office of Advocacy and Outreach 

(OAO) completed its task; (2) support OAO by requiring senior Department and agency 

officials to participate in the development of this performance goal; and (3) ensure the 

development of a standard definition of beginning farmers. 

 Without a cross-cutting Departmental strategic performance goal, USDA cannot measure 

the outcomes of its many programs and activities that provide assistance to beginning 

farmers. 

CORRECTIVE ACTIONS: 

Department-wide 

USDA has made significant progress in developing a comprehensive strategy to enhance and 

target our support of new and beginning farmers. Using the tools and authorities provided to 

USDA by Congress, the Department made significant investments to support our nation’s next 
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generation of farmers and ranchers. The Department has worked to modernize customer service 

and program delivery, create ease of service for new farmers, and adapted the crop insurance 

program, developed new loan products, and revised conservation policies to address the unique 

challenges that new farmers and ranchers face. USDA has quickly implemented new programs 

and authorities under the 2014 Farm Bill to provide additional resources and help USDA 

modernize our customer service to new farmers. The Department is also regularly coordinating 

its programmatic and outreach efforts. These efforts are overseen by the Deputy Secretary’s 

office in coordination with OAO, FSA, and other agencies servicing new farmers. 

As part of USDA’s efforts to strengthen program integrity and encourage transparency, the 

Department is developing Department-wide measurable outcomes and goals to track our efforts 

with new and beginning farmers. These goals, including relevant milestone dates, will soon be 

publicly available.

Challenge 4: USDA Needs to Strengthen Controls over Improper 

Payments and Financial Management

USDA expends nearly $144 billion in public services every year. The Department’s annual 

financial reports provide the public, Congress, and the President with information about USDA’s 

costs and revenues, assets and liabilities, and other information, such as improper payments. It is 

imperative that these reports are accurate and timely so that USDA’s financial management is 

transparent. However, USDA continues to fall short of full compliance with Federal 

requirements for improper payments and needs to address endemic control issues in some 

component agencies in order to resolve ongoing problems with financial management. 

Additionally, USDA needs to actively pursue efforts to identify root causes for improper 

payments in high-risk programs, and make measurable progress to reduce the overall rate of 

improper payments. 

OIG DETERMINED THE FOLLOWING: 

 USDA did not comply with the Improper Payments Elimination and Recovery Act 

(IPERA) for the fourth consecutive year; 

 The Office of the Chief Financial Officer and senior officials for each noncompliant 

component agency need to set more aggressive goals to help USDA achieve compliance 

with IPERA; 

 USDA needs to improve controls for reducing improper payments; 

 FNS needs to improve documentation requirements and the verification process for the 

National School Lunch Program (NSLP); 
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 RMA developed new sampling methods for FYs 2015 and 2016, which OMB has 

approved, with the expectation that RMA will develop a more comprehensive sampling 

methodology for approval and use for FY 2017 reporting and beyond; and 

 Component agencies (NRCS, RMA, and CCC) need to implement actions to provide 

adequate evidence and strengthen their internal control over financial reporting. 

CORRECTIVE ACTIONS: 

Department-wide 

USDA completed the third quarter High-Dollar report on time and will work to duplicate that 

result in future quarters. USDA determined that the Wildland Fire Suppression program has 

consistently reduced their improper payments to the point that they are no longer at high risk for 

making improper payments. With concurrence from OIG and the Office of Management and 

Budget (OMB), USDA has removed this program from the list of programs at high risk of 

improper payments. The Direct and Counter-Cyclical and Milk Income Loss Contract programs 

were removed from the list of high-risk programs because they were phased out. 

USDA successfully implemented the new Do Not Pay portal with the Treasury and is performing 

post payment adjudication on all USDA payments. USDA will also focus on high quality, 

timely, and transparent reporting of improper payment compliance activities. 

Food and Nutrition Service 

In February 2015, FNS consulted with the Office of the General Counsel (OGC) to determine its 

regulatory authority to require households to submit income documentation with school meals 

applications. FNS, along with its State and local partners, have invested in system improvements 

and process reforms over the last several years that are beginning to pay dividends and promise 

long-term reductions in program error. A number of these reforms were mandated by the 

Healthy, Hunger-Free Kids Act of 2010. 

FNS will collaborate with State partners to determine opportunities to identify, in subsequent 

school years, those households that, based on the results of the regular verification process, have 

been found to have misreported income. Feasible and reasonable strategies identified will be 

incorporated into verification for cause guidance, and will also be incorporated into the annually 

updated eligibility guidance by April 2016. 

In school year 2013-2014, FNS implemented the new Administrative Review process to include 

a new section entitled “Resource Management”. This section was specifically designed to 

provide a systematic approach to ensuring the overall financial health of a School Food 

Authority's (SFA) nonprofit school food service. The section consists of a review of four areas 

integral to the financial health of the SFA’s food service: Paid Lunch Equity, Nonprogram 

Revenue, Indirect Costs, and Net Cash Resources. 
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FNS issued additional clarification to State agencies to ensure that they adequately monitor the 

SFAs’ net cash resources through further updates to the Administrative Review Manual. 

Risk Management Agency 

RMA implemented the OMB-approved sampling methodology for the 2015 and 2016 reporting 

periods. 

RMA is in the process of developing a more comprehensive sampling methodology for the 

2017 reporting period. RMA will submit the draft methodology to OMB for approval. The 

strategy for reducing improper payments includes using data mining techniques, analyzing 

trends, and providing instructions to the approved insurance providers to implement controls to 

reduce errors. RMA initiated supplemental measures in FY 2015. RMA will measure the 

reduction in acreage reporting discrepancies greater than 100 acres using data mining techniques. 

Farm Service Agency/Commodity Credit Corporation 

National Farm Bill Training was provided to State offices for the Noninsured Crop Disaster 

Assistance Program (NAP) in November 2014. The Deputy Administrator for Farm Programs 

(DAFP) announced a new interim Web-based system for monitoring and tracking the Loan 

Deficiency Payment System (eLDP) and market loan gains with respect to producer eligibility 

and payment limitation. FSA conducted bi-weekly teleconferences with State offices to address 

new and existing policies and procedures that may be contributing to the potential risk of 

improper payments. Compliance reviews and spot-checks were performed to ensure the accuracy 

of payments and integrity of FSA programs. 

This reporting mechanism allows the National Office to monitor the overall integrity of each 

program being implemented. FSA’s DAFP Office and the Outreach and Office of External 

Affairs collaborated to keep external and internal stakeholders informed of program 

requirements, policies and procedures. Multiple training sessions, under the Supplemental 

Revenue Assistance Payments Program, were provided to assist in reducing administrative or 

process errors. 

CCC implemented several business process and system improvements to record, track, and 

report obligations at the detailed transaction level. CCC: 

 Implemented the new Common Obligation Framework (COF) shared service. A phased 

implementation has been in progress during FY 2015 to bring FSA program and financial 

management applications into full compliance. The COF provides an automated real-time 

funds control environment where funds availability is checked prior to obligation at the 

detail transaction level. Program applications call the COF shared service to ensure 

obligations occur at the time of contract approval. Budget authority is tracked and executed 

by program, as categorized on the approved apportionment. The system ensures obligations 

do not exceed apportioned amounts, allotments, sub-allotments, and other administrative 

subdivisions, and it records obligations at the transaction level. Phase I was released 

December 12, 2014, and Phase IB was released on June 26, 2015. 
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 Deployed Phase I of the Commodity Loan Processing System (CLPS) on July 1, 2015. 

CLPS is the replacement for the legacy Automated Price Support System (APSS), which 

resides on the System 36/AS400 platform. CLPS uses the new COF shared service. Phase 1 

included all commodities except cotton, rice, and peanuts. 

 Established an automated tool to reconcile the Statement of Budgetary Resources (SBR) 

status of funds to the CORE general ledger by FSA/CCC programs. 

 Implemented a 48XX account balance reconciliation process to ensure that obligation 

transactions are timely and accurately recorded in the CORE general ledger system for 

non-12X4336 and 12X4336 funds. The reconciliation process compares the electronic 

Funds Management System (eFMS) subsidiary system to the CORE General Ledger. 

 Completed working sessions with DAFP and the Office of Budget and Finance (OBF) 

personnel to draft policy for each DAFP program that identifies the appropriate obligation 

trigger points. The results of these discussions will aid in developing the business 

requirements to design program application software to ensure all CCC programs are in full 

compliance with funds control. 

 Enhanced the SBR reconciliation and reporting process to include the obligation type and 

funds control status for all FSA/CCC programs. The report tracks the status of 

program-area funds control compliance by identifying programs that obligate at the detail 

transaction level. 

FSA/CCC has successfully moved two of the three financially significant applications, i.e. Farm 

Storage Facility Loans (FSFL) and the Conservation Reserve Program (CRP), off the IBM 

AS400/S36 platform hosting county office (CO) applications. The Automated Price Support 

System (APSS) 2014 crop year loans remain on the AS400, with a target date of closing out by 

April 2016. 

FSA conducted national conservation program training regarding issuing proper payments. 

Compliance reviews and spots-checks will be completed by County Offices and results will be 

recorded in the National Compliance Review database. The National Office will analyze the 

National Compliance Review results to identify program policies and procedures that need to be 

reinforced to field offices. Acreage Reporting Target Reviews will be conducted by CO Review 

staff to mitigate improper payments caused by errors related to CO acreage reporting activities. 

FSA will implement the Web-enabled Loan Deficiency Payment System (eLDP) programmed to 

read the Common Payment Software. The Common Payment Software will read the producers 

applicable eligibility flags to ensure the producer is eligible for a LDP payment before execution, 

in addition to keeping track of a producer’s payment limitation. A customer training package will 

be developed to educate producers on NAP recordkeeping requirements and will introduce them 

to a NAP tool that could help collect data for production reporting. 

FSA will continue to modernize electronic systems to eliminate the standing material weakness 

and become substantially compliant with the Funds Control/Obligation Requirements related to 

obligations at the transaction level. The following releases are scheduled for deployment during 
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the end of FY 2015 and during FY 2016: Phase II Common Obligation Framework (COF); 

Agriculture Risk Coverage (ARC)/Price Loss Coverage (PLC); Remaining CLPS Phases; Phase 

II Direct Loan System (DLS)/FSFL); Margin Dairy Protection Program (MPP); close out all 

activity on AS400; and move existing programs CRP, Emergency Conservation Program (ECP), 

Emergency Forest Restoration Program (EFRP), and FSFL to COF at the transactional level and 

properly sequester funds in FY 2016. 

Natural Resources Conservation Service 

Released in FY 2015, National Instruction 120-354 identifies that NRCS will verify that each 

participant that is an applicable entity type that is required to be registered in the Central 

Contractor Registration (CCR) on the System for Award Management (SAM.gov) has fully 

complied with those requirements prior to awarding a conservation program contract or 

agreement, and that failure to comply with these requirements will be cause for NRCS to use that 

determination as a basis for making an award to another eligible applicant. Additionally, for 

these applications, the records will be checked, and the registration status will be confirmed for 

each payment thereafter. 

NRCS’ National Accounts Payable Service Team implemented standardized procedures for the 

direct entry of easement obligations that included checklists that contained verification of the 

Data Universal Numbering System/ System for Award Management (DUNS/SAM) 

requirements. 

Nationwide implementation of the Enhanced Internal Controls took place in January 2015. The 

Easement Programs Division (EPD) holds a monthly online conference, and the Internal 

Controls Team implemented a monthly question-and-answer session. EPD implemented a 

weekly question and answer session with NRCS National Programs Managers. EPD reminded 

easement programs staff of the SAM registration requirements with an emphasis that the 

requirements include restoration agreements during an EPD sponsored net conference. 

A standardized procedure for reviewing payments related to prior year contracts is currently in 

clearance. ProTracts, an NRCS system, has been updated to check SAM.gov registrations 

automatically at obligation and payment. Nationwide EPD training and teleconferences will be 

conducted during FY 2016 on documenting ownership length. 

Challenge 5: USDA Needs to Improve Outreach Efforts

OIG identified in Challenge 5 that due to a history of public attention concerning how USDA has 

allegedly treated members of socially disadvantaged groups—most notably, lawsuits like Pigford 

I, Black Farmers Discrimination Litigation (BFDL), Keepseagle, and Garcia/Love—the 

Department faces challenges in conducting outreach to disadvantaged groups and persuading 

members of those groups that the Department represents their best interests. Throughout his 

tenure, the Secretary of Agriculture has reiterated the importance of civil rights, emphasizing that 

there is significant progress to be made in working with communities to address past civil rights 

issues. 
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OIG DETERMINED THE FOLLOWING: 

 There was insufficient evidence to support that positive results were achieved during the 

Strikeforce Initiative pilot program and questioned the almost $2.7 million in funds 

provided to the awarded organizations; 

 Grant approval processes in OAO were informal and undocumented and regulatory 

processes were disregarded; 

 OAO did not ensure that grantees adhered to regulations or the terms and conditions of 

their grant agreements, and performed limited monitoring of the grantees; and 

 USDA needs to ensure the accountability and transparency of funds it spends in outreach, 

especially when those funds are intended to address past inequities experienced by socially 

disadvantaged groups. 

CORRECTIVE ACTIONS: 

Office of Advocacy and Outreach 

OAO improved accountability around funds spent on the USDA Strikeforce for Rural Growth 

and Opportunity Initiatives by: (1) obtaining and reviewing the final reports for all of the 

community-based organizations (CBOs) and made a determination on each CBO’s effectiveness 

in carrying out the Strikeforce Initiative pilot program; (2) issuing a report assessing the overall 

effectiveness of the Strikeforce Initiative pilot program in meeting the goals of the strategic plan. 

The report included an assessment of the use of the almost $2.7 million in funds provided to the 

CBOs. 

By the beginning of FY 2016, OAO will revise the standard operating procedures (SOPs) in 

response to the OIG audit of the Section 2501 grant program to apply to all program activities—

these procedures will include instructions for competitively selecting CBOs and appropriately 

monitoring their activities. 

Challenge 6: Food Safety Inspections Need Improved Controls 

OIG’s evaluation of Challenge 6 indicates that foodborne pathogens and food contamination can 

put consumer health in jeopardy, USDA inspection systems work to effectively protect the safety 

of the Nation’s food supply. The Department provides a range of safety measures, from placing 

qualified inspectors in livestock slaughtering facilities to operating comprehensive inspection 

and testing programs that pinpoint likely risks at processing facilities. The Food Safety and 

Inspection Service’s (FSIS) mission is to ensure the nation’s commercial supply of meat, poultry, 

and egg products are safe, wholesome, and correctly labeled and packaged. Part of that mission 

is ensuring that technology systems and inspection processes are current, accurate, and compliant 

with safety standards. 
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OIG DETERMINED THE FOLLOWING: 

 FSIS could improve the Public Health Information System’s (PHIS) development and 

implementation controls; 

 Inspectors were not adequately able to record inspection results, due to poor connectivity; 

 Inspectors were not always using a function in PHIS that allowed them to record the 

reasons that inspection tasks were not completed; 

 Issues with how FSIS managed access privileges for separated employees was discovered; 

 FSIS management can improve how the agency oversees the safety of ground turkey and 

other turkey products; and 

 FSIS should review and improve (1) its Salmonella Initiative Program (SIP) approval and 

monitoring processes; (2) the data recorded and collected on noncompliance records to 

better gauge the significance of the noted violations; (3) how it tracks the timely updating 

of directives; (4) its pathogen sampling policies; and (5) the guidance provided to the 

industry for developing its prerequisite programs. 

CORRECTIVE ACTIONS: 

Food Safety and Inspection Service

Over the last few years, FSIS has instituted enhanced internal controls through implementation 

of investment planning and controls. FSIS implemented the following management controls for 

the PHIS Investment: 

 Reviewed the PHIS investment as part of FSIS’ Annual Portfolio Stat, including briefing 

senior leadership’s Management Council, as part of the Agency’s Enterprise Governance 

(EG) process. The investment is also reviewed by the Under Secretary for Food Safety and 

briefed to the USDA Chief Information Officer. The investment is additionally evaluated 

by senior leadership on an annual basis through the EG process, whereby the Management 

Council (MC) functions as the Agency’s IT Investment Review Board (ITIRB) for 

approval of major development, modernization, or enhancement (DME) work.

 Quarterly Investment Reviews are conducted to review the PHIS Investment, including 

project activities, Earned Value Management (EVM), issues, and risks. FSIS also performs 

monthly investment reviews, in conjunction with the USDA OCIO. These reviews are 

posted on the Office of Management and Budget (OMB) Federal IT Dashboard. Detailed 

briefings on the system’s health and status are provided weekly to senior OCIO staff. 

 The PHIS investment program is managed by a Federal Acquisition Certification for 

Program and Project Managers (FAC P/PM) Level 3 certified program manager. The 

development contract is managed by a certified Contracting Officer’s Representative. 
F I S C A L Y E A R 2 0 1 5 A GE N C Y F I N A N C I A L R E P O R T

U . S . D E P A R T M E N T O F AG R I C U L T U R E 2 0 1

In 2014, a rebaseline of the PHIS investment was reviewed and approved by the USDA 

Executive Information Technology Investment Review Board as part of USDA’s Integrated 

Information Technology Governance Framework.

FSIS has implemented a process through targeted FSIS policy issuances to utilize directed PHIS 

task functionality to distinction updates of specific PHIS establishment profile elements, such as 

a particular task to update poultry products profiles and another separate task to update pork 

products. FSIS intends to continue using this approach to update data elements under a 

systematic scheduled timeline culminating in July 2016.

FSIS will develop a reference document that defines the PHIS data elements used in sampling 

algorithms. This reference guide will describe how sampling algorithms are implemented in 

terms of PHIS data elements on products produced, volumes, intended uses, exclusion criteria, 

and other relevant parameters.

For future letters that FSIS sends when approving an establishment’s request for a waiver from 

regulatory requirements under the SIP, FSIS will send a consolidated document that includes 

appropriate attachments that clearly and concisely outline the procedures the plant is required to 

follow based on the waiver, and other supporting documents. These letters will be available to 

inspection program personnel (IPP) in the establishments granted SIP waivers, for verification 

purposes.

FSIS has developed a chart that includes all current FSIS Directives in the 1000–13000 series. 

This chart is reviewed and updated quarterly by FSIS program areas to determine whether the 

directives are up to date, or whether they need to be revised or cancelled. As a result of 

instituting this process, FSIS has identified a number of directives that the agency plans to revise 

or cancel over the next year.

FSIS issued new directives for Food Safety Assessments (FSAs), FSIS Directive 5100.1, 

Enforcement, Investigations and Analysis Officer (EIAO) Food Safety Assessment (FSA) 

Methodology, Revision 4, published on May 29, 2015, and FSIS Directive 5100.4, Enforcement, 

Investigations and Analysis Officer (EIAO) Public Health Risk Evaluation (PHRE) Methodology

published on May 22, 2015. Additionally, PSIS will perform PHREs on a random sample of 16 

of the 32 establishments with SIP waivers and if any warrant additional review, FSIS will 

conduct a FSA, as instructed by FSIS Directive 5100.1. FSIS will also perform an analysis of the 

16 PHREs.

FSIS will review results of the FSA activities under the new directives in December 2015. Based 

on analysis of EIAO findings, FSIS will determine whether changes to FSIS Directive 5020.1, 

Verification of Salmonella Initiative Program are necessary.

FSIS utilizes information in the Public Health Information System (PHIS) about the regulations 

cited in non-compliances to assess the severity of non-compliances. When certain regulations are 

cited at a high enough rate, establishments may be scheduled for a public health risk evaluation 

(PHRE) depending on the outcome of the PHRE, a FSA, or enforcement action. FSIS will 

conduct an evaluation of this new decision-making process, which will include evaluating how 
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sanitations noncompliance records (NRs) are drafted and the data that is recorded, and consider 

how the scope and complexity of sanitation NRs might be better utilized to evaluate an 

establishment's underlying plant process control. Based on the results of this review, FSIS will 

take appropriate actions, if necessary.

FSIS will make public the FY 2015 prevalence estimate for comminuted poultry products by 

December 31, 2015. FSIS will make public preliminary prevalence estimates for turkey and 

broiler carcasses and chicken parts, based on data collected through September 30, 2015, by 

December 31, 2015. Finally, FSIS will develop a schedule, with milestones, for periodically 

updating Salmonella prevalence estimates by December 2015.

FSIS is drafting the 4th edition of the Compliance Guideline for Controlling Salmonella and 

Campylobacter in Raw Poultry. The Agency intends to address the following issues in the 

updated guideline: (1) recommended best practices, (2) information on the components of a 

prerequisite program, (3) recommendations for maintaining sanitary conditions during 

operations, (4) information explaining that sampling procedures should be described in a written 

program, (5) information explaining that interventions used (and their operational parameters) 

need to be safe and suitable, (6) information on how establishments should document their use of 

antimicrobial interventions, and (7) information on actions that establishments should take if 

they find steps in their prerequisite programs have not been properly implemented or followed.

An APHIS work group has been established that will analyze current task scheduling data, task 

completion data and justifications for tasks not performed. The group will also review the list of 

priority tasks identified in FSIS Directive 13,000.1. Based on its assessment, the group will 

develop a plan to address inspection task assignment and completion of priority tasks in PHIS so 

that the Agency could begin implementing the plan by July 31, 2016. 

In addition, FSIS’s Office of Field Operations (OFO) is currently working on revising its InPlant Performance System (IPPS) and associated FSIS Directive 4430.3, with the goal of 

implementing on December 31, 2015. As part of its revision of Directive 4430.3, OFO will 

instruct supervisors to monitor Inspection Program Personnel application and execution of the 

PHIS, including completion of routine inspection tasks as part of the IPPS assessment. 

FSIS is working to strengthen its off-boarding policy and procedures to ensure that there is 

timely notification of employee separations and transfers. FSIS will issue a directive to all 

personnel with updated policy and checklist instructions for separating and transferring 

employee clearance by June 30, 2016.
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U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 0 3 

Challenge 7: FNS Needs to Strengthen SNAP Management 

Controls 

OIG highlights a major USDA program in Challenge 7: Although OIG’s management challenges 

predominately focus on concerns that cut across program lines, the Supplemental Nutrition 

Assistance Program (SNAP), as the largest program within USDA and one of the largest 

programs in the Federal Government, presents a special challenge. SNAP provides monthly food 

assistance and nutrition for the health and well-being of more than 46 million low-income 

individuals. Since 2007, program participation has grown by 77 percent, and the program 

disbursed over $70 billion in benefits in FY 2014. 

OIG DETERMINED THE FOLLOWING: 

 FNS needs to redouble its efforts to enforce policies against trafficking; and 

 FNS needs to establish strong internal controls to prevent abuse. 

CORRECTIVE ACTIONS: 

Food and Nutrition Service 

Retailer Management: A Quality Assurance Branch was formed to enhance retailer management 

functions. A series of data management issues have been identified and have or are being 

addressed. Targeted training on reviewing and applying the correct retailer store types, and 

training on Transfer of Ownership Civil Money Penalties have been conducted for operations 

staff. Several retailer management training modules have been developed and delivered to 

provide foundational training to new retailer management policy staff. Since the function was 

centralized, operations staff has had close to 120 training sessions on a broad variety of retailer 

management topics. The efficiencies gained from this model are apparent in the resulting annual 

increase in SNAP retailer sanction actions. 

Review of retailer management policy is underway. Several policy handbook subject areas have 

been replaced by issue-specific policy memoranda. Enhanced retailer eligibility and enhanced 

sanctions regulations are also underway. The definition of trafficking was updated and became 

effective in March 2013. The owners of close to 5,000 permanently disqualified SNAP retailers 

have been added to the GSA System for Award Management (SAM) so that other government 

agencies and entities can identify potential risks if/as these SNAP-disqualified owners apply for 

other government programs and services. 

Retailer Background Checks: Senior OIG officials have acknowledged that FNS has no statutory 

authority to directly access the National Crime Information Center (NCIC) for the purpose of 

obtaining criminal background checks for retailers. Therefore, FNS has agreed to initiate a 

proposed rule that would require any new high-risk applicants and high-risk retailers being 

authorized who have not already completed such certification to provide FNS with a 
2 0 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

S EC T ION I I I | OTHER INFORMAT ION 

self-initiated NCIC background check prior to authorization or reauthorization. The work plan to 

initiate this proposed rule was completed in fiscal year 2015. 

The National Accuracy Clearinghouse (NAC) pilot project completed its evaluation period on 

May 31, 2015. FNS received the draft report in August 2015 and is reviewing the report for 

internal comments. The final report will be released in 30 days of issuance of the draft. After 

allowing up to 90 days for internal clearance, FNS expects to deliver the report to Congress 

before the end of the calendar year, and on target by the deadline established in Section 4032 of 

the Agricultural Act of 2014. FNS estimates to have this report completed by the end of 

December 2015. 

The OIG USDA Management Challenges Report issued August 25, 2015 may be viewed in its 

entirety at the following Website: https://www.usda.gov/oig/webdocs/

MgmtChallenges2015.pdf. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

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Summary of Financial Statement Audit and 

Management Assurances 

Summary of Existing Material Weaknesses 

The U.S. Department of Agriculture’s material weaknesses and financial system 

nonconformance, as related to management’s assurance for the Federal Managers’ Financial 

Integrity Act (FMFIA) and the certification for the Federal Financial Management Improvement 

Act (FFMIA), are listed in Exhibit 22 and Exhibit 23. 

Exhibit 22: Summary of Financial Statement Audit 

Audit Opinion: Disclaimer

Restatement: No

Material 

Weakness 

Beginning 

Balance New Resolved Consolidated Reassessed 

Ending 

Balance 

Improvement 

Needed in Overall 

Financial 

Management 

1 1 

Improvement 

Needed in 

Information 

Technology 

Security and 

Controls 

1 1 

TOTAL MATERIAL 

WEAKNESSES 2 2 
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Exhibit 23: Summary of Management Assurances 

Effectiveness of Internal Control Over Financial Reporting (FMFIA § 2) 

Statement of Assurance: Qualified 

Material Weakness 

Beginning 

Balance New Resolved Consolidated Reassessed 

Ending 

Balance 

Information 

Technology 1 1 

Financial 

Management 1 1 

TOTAL MATERIAL 

WEAKNESSES 2 2 

Effectiveness of Internal Control Over Operations (FMFIA § 2) 

Statement of Assurance: Unqualified 

Material Weakness 

Beginning 

Balance New Resolved Consolidated Reassessed 

Ending 

Balance 

TOTAL MATERIAL 

WEAKNESSES 0 0 

Conformance With Financial Management System Requirements (FMFIA § 4) 

Statement of Assurance: Systems do not conform to financial management system 

requirements 

Material Weakness 

Beginning 

Balance New Resolved Consolidated Reassessed 

Ending 

Balance 

Funds Control 

Management 1 1 

TOTAL NONCONFORMANCES 1 1 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 0 7 

Compliance With Federal Financial Management Improvement Act (FFMIA) 

Item Agency Auditor 

1. System Requirements Lack of substantial 

compliance noted 

Lack of substantial 

compliance noted 

2. Accounting Standards Lack of substantial 

compliance noted 

Lack of substantial 

compliance noted 

3. U.S. Standard General Ledger at 

Transaction Level 

Lack of substantial 

compliance noted 

Lack of substantial 

compliance noted 
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2 0 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Improper Payments 

The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments 

Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and 

Recovery Improvement Act of 2012 (IPERIA), require that executive agencies identify programs 

that may be susceptible to significant improper payments, estimate the annual amount of 

improper payments, and submit those estimates to Congress. A program with significant 

improper payments (or a high-risk program) has both a 1.5 percent improper payment rate and at 

least $10 million in improper payments, or exceeds $100 million dollars in improper payments. 

Fiscal Year 2015 Results 

The U.S. Department of Agriculture’s improper payment rate is 5.70 percent for fiscal year (FY) 

2015, an increase from 5.52 percent for FY 2014. USDA’s FY 2015 improper payment results 

are as follows: 

1. Eight USDA high-risk programs appear to be fully compliant with the Improper Payments 

Elimination and Recovery Act of 2010 in FY 2015. 

2. The Child and Adult Care Food Program (CACFP) reported an improper payment rate of 

0.84 percent—less than the FY 2015 reduction target of 1.43 percent and less than the 

1.05 percent improper payment rate reported for FY 2014.

3. The School Breakfast Program (SBP) reported an improper payment rate of 

22.95 percent—less than the FY 2015 reduction target of 24.43 percent and less than the 

25.61 percent improper payment rate reported for FY 2014. 

4. The Rental Assistance Program (RAP) reported an improper payment rate of 

1.41 percent—less than the FY 2015 reduction target of 1.90 percent and less than the 

1.99 percent improper payment rate reported for FY 2014.

5. The Federal Crop Insurance Corporation (FCIC) program fund reported an improper 

payment rate of 2.20 percent—less than the FY 2015 reduction target of 5.75 percent and 

less than the 5.58 percent improper payment rate reported for FY 2014. 

In FY 2015, the Department took the following actions to address improper payments: 

1. Determined that the Wildland Fire Suppression Management, Milk Income Loss Contract 

Program, and Direct and Counter-Cyclical Payments have consistently reduced their 

improper payments to the point that they are no longer at high risk for making improper 

payments. With concurrence from the OIG and OMB, USDA has removed them from the 

improper payments high risk list of programs at high risk of improper payments. 
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U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 0 9 

2. Implemented a statistically valid methodology to accurately test and report improper 

payment results for FCIC. OMB approved the Risk Management Agency’s (RMA) plan to 

bring its statistical sampling approach into compliance with IPERA. 

3. Implemented the Do Not Pay Portal with the U.S. Department of the Treasury. This 

implementation allows checks on all USDA post payments against the public Death Master 

File, commonly known as the Social Security Death Index (SSDI), and private System for 

Award Management Exclusion lists to verify payments. 

4. Executed an expansion of the supplier credit audit to include commodity payments made 

through the Web-Based Supply Chain Management system. 

5. USDA recovered approximately $384 million in improper payments. 

Compliance with IPERA Requirements 

OIG conducts a compliance review of IPERA requirements annually. OIG’s USDA IPERA 

Compliance Review for FY 2014, dated May 2015, found that USDA agencies did not fully 

comply with three of six IPERA requirements. Information on the findings, accomplishments, 

and planned actions are included in Section 1: Management’s Discussion and Analysis, 

Compliance with Laws and Regulations. 

Programs noncompliant with IPERA for one fiscal year must submit a plan to Congress 

describing the actions that the agency will take to become compliant. For programs 

noncompliant with IPERA for 2 consecutive fiscal years, OMB is to review the program and 

determine if additional funding would help the agency come into compliance. For programs that 

are noncompliant with IPERA for 3 consecutive fiscal years, the agency must submit to 

Congress a reauthorization proposal for each discretionary program or proposed statutory 

changes necessary to bring a mandatory program into compliance. 

Status of Noncompliant Programs 

It appears that USDA will be noncompliant with three of the six IPERA requirements for 

FY 2015. OIG will conduct the FY 2015 USDA’s IPERA Compliance Review and publish a 

report in FY 2016. 

Programs Noncompliant with IPERA:

The following programs have been noncompliant with IPERA for 1 year and did not meet annual 

improper payment reduction targets: 

 Farm Service Agency (FSA) Livestock Forage Disaster Program 

 FSA Supplemental Revenue Assistance Payments Program 

 FSA Non-insured Crop Disaster Assistance Program 
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 Food and Nutrition Service (FNS) Supplemental Nutrition Assistance Program 

 Forest Service (FS) Hurricane Sandy—Capital Improvement and Maintenance 

USDA identified the following programs that were noncompliant with IPERA for between 3 and 

5 years. 

 Natural Resources Conservation Service (NRCS) Farm Security and Rural Investment Act 

Programs: Did not report improper payment rates of less than 10 percent; did not meet 

annual improper payment reduction target; and noncompliant with IPERA for 3 years. 

 National School Lunch Program: Did not report improper payment rates of less than 

10 percent; did not meet annual improper payment reduction target; and noncompliant with 

IPERA for 5 years. 

 School Breakfast Program: Did not report improper payment rates of less than 10 percent; 

and noncompliant with IPERA for 5 years. 

 Child and Adult Care Food Program: Did not report sufficient improper payment estimates. 

 Special Supplemental Nutrition Program for Women, Infants, and Children: Did not meet 

annual improper payment reduction target; and noncompliant with IPERA for 5 years. 

RISK ASSESSMENT 

The Office of the Chief Financial Officer (OCFO) issued detailed guidance for the risk 

assessment process, including templates, and performed extensive reviews of draft risk 

assessments. Programs with larger outlays were required to perform more detailed assessments 

than smaller programs. 

The risk assessment process for USDA’s largest programs consists of the following evaluation 

criteria: 

1. Amount of improper payments needed to meet the reporting standards; 

2. Description of the program including purpose and basic eligibility requirements; 

3. Definition of improper payments specific to the program; 

4. Program vulnerabilities linked to improper payments; 

5. Internal controls designed to offset the program vulnerabilities; 

6. Test of transactions for selected programs; 

7. Listing of significant reviews and audits; 

8. Final determination of risk level; 

9. Planned future enhancements; and 

10. Description of how improper payments are recovered. 
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U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 1 1 

USDA has 148 programs that are considered to have a low risk of making improper payments. 

Risk assessments for low risk programs are completed on a 3-year rotating cycle. During 

FY 2015, the following programs completed risk assessments and were determined to be low 

risk and not susceptible to significant improper payments. 

1. Agricultural Marketing Service (AMS) Commodity Purchase Programs 

2. AMS Salaries and Expenses 

3. AMS Grants Programs 

4. Animal and Plant Health Inspection Service (APHIS) Cooperative Agreements 

5. Commodity Credit Corporation (CCC) Tobacco Transition Payment Program 

6. CCC Administrative Contracts 

7. CCC Marketing Programs 

8. CCC Tree Assistance Program 

9. CCC Emergency Assistance for Livestock, Honeybees, and Farm Raised Fish Program 

10. Farm and Foreign Agricultural Services (FFAS) Salaries and Expenses 

11. Food and Nutrition Service (FNS) Food Distribution Program on Indian Reservations 

12. Forest Service (FS) State and Private Forestry 

13. FS Forest and Rangeland Research 

14. FS Stewardship Contracting Product Sales 

15. FS Forest Service Permanent Appropriations 

16. FS Working Capital Fund 

17. Farm Service Agency (FSA) Agricultural Credit Insurance Fund-Program Account 

18. Food Safety and Inspection Service (FSIS) Salaries and Expenses 

19. FSIS Cooperative State Food Safety and Inspection 

20. Grain Inspection Packers and Stockyards Administration (GIPSA) 

21. National Institute of Food and Agriculture (NIFA) Research and Education Activities 

22. NIFA Extension Activities 

23. NIFA Integrated Activities 

24. Natural Resources Conservation Service (NRCS) Watershed Programs 

25. NRCS Voluntary Public Access and Habitat Incentive Program 

26. Office of the Inspector General (OIG) Salaries and Expenses 

27. Rural Development (RD) Rural Business Service (RBS) Grant Programs 
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28. RD RBS Guaranteed Loan Programs 

29. RD Rural Housing Service (RHS) Direct Community Facility Loans 

30. RD RHS Direct Single Family Housing 

31. RD RHS Guaranteed Single Family Housing Loans 

32. RD Community Program Grants 

33. RD RHS Multi-Family Housing (MFH) Preservation and Revitalization Demo Program—

514/516 Loans/Grants and 515 Loans 

34. RD Rural Utility Service (RUS) Grants— 

Other Electric - Telecom - Water and Environmental Programs 

35. RD Congressional Earmarked Funds 

36. RD Water and Waste Guaranteed Loans 

37. RD Revolving Loan Fund Program 

USDA identified 18 programs in previous fiscal years as shown in Exhibit 24 as susceptible to 

significant improper payments. This year’s risk assessment identified no additional high risk 

programs. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 1 3 

Exhibit 24: Programs Susceptible to Improper Payments 

Selection Methodology USDA Agency Program 

Former Section 57 of Office 

of Management and 

Budget (OMB) Circular 

No. A-11, Preparation, 

Submission, and Execution 

of the Budget (Circular 

No. A-11). 

Food and Nutrition 

Service (FNS) 

Supplemental Nutrition Assistance 

Program (SNAP) 

National School Lunch Program (NSLP) 

School Breakfast Program (SBP) 

Special Supplemental Nutrition Program 

for Women, Infants, and Children (WIC) 

USDA Identified as 

Susceptible to Significant 

Improper Payments 

Farm Service 

Agency (FSA), 

Commodity Credit 

Corporation (CCC) 

Loan Deficiency Payments (LDP) 

Livestock Forage Disaster Program (LFP) 

Livestock Indemnity Program (LIP) 

Supplemental Revenue Assistance 

Payments Program (SURE) 

Noninsured Crop Disaster Assistance 

Program (NAP) 

FNS Child and Adult Care Food Program 

(CACFP) 

Rural Development 

(RD) 

Rental Assistance Program (RAP) 

Risk Management 

Agency (RMA) 

Federal Crop Insurance Corporation 

Program Fund (FCIC) 

Natural Resources 

Conservation 

Service (NRCS) 

Farm Security and Rural Investment Act 

Programs (FSRIP) 

Disaster Relief 

Appropriation Act of 2013 

(Sandy Disaster) 

FSA, CCC Hurricane Sandy—Emergency 

Conservation Program (ECP) 

FSA, CCC Hurricane Sandy—Emergency Forest 

Restoration Program (EFRP) 

FS Hurricane Sandy—EFRP 

FS Hurricane Sandy—Capital Improvement 

and Maintenance (CMDF) 

NRCS Hurricane Sandy—Emergency Watershed 

Protection Program (EWPP) 
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Statistical Sampling 

USDA’s programs that are susceptible to significant improper payments are required to conduct 

an annual sample that complies with OMB Circular A-123, Appendix C. Compliance can be 

accomplished by conducting a standard statistically valid sample or an OMB-approved 

alternative methodology. 

The FSA/CCC Loan Deficiency Payments program had no FY 2014 outlays and therefore did 

not conduct a sample. 

The following is a list of programs with brief descriptions of the sampling process that utilized a 

standard statistically valid sampling methodology: 

1. FSA/CCC LFP, LIP and SURE 

a. FSA determined a sample from the payments made in the prior fiscal year using a 

90 percent confidence interval of plus or minus 2.5 percentage points. 

b. Change in sampling process: These programs used to be sampled and reported as a 

component of the Miscellaneous Disaster Programs, but have now been designated as 

separate high-risk programs. 

2. FSA/CCC NAP 

a. FSA determined a sample from a large population, or universe, of NAP and NAP Frost 

Freeze payments using a confidence interval of plus or minus 2.5 percentage points. 

The NAP universe consisted of payments made in October 2013 through September 

2014, and the NAP Frost Freeze universe consisted of payments made from September 

2014 through December 2014. 

b. Change in sampling process: NAP Frost Freeze payments were included in the NAP 

sampling universe. 

3. FSA/CCC Hurricane Sandy—ECP, NRCS FSRIP, and RHS RAP 

a. Determined a sample from the payments made in the prior fiscal year using a 

90 percent confidence interval of plus or minus 2.5 percentage points. 

b. Change in sampling process: None. 

4. FSA/CCC Hurricane Sandy—EFRP 

a. One hundred percent of the payments made in FY 2014 were tested for improper 

payments. 

b. Change in sampling process: This is the first year this program was sampled. 

5. NRCS Hurricane Sandy—EWPP 

a. One hundred percent of the non-payroll payments made in FY 2014 were tested for 

improper payments. NRCS determined a sample of payments related to employee 
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salaries made in FY 2014 using a 90 percent confidence interval of plus or minus 

2.5 percentage points. 

b. Change in sampling process: This is the first year this program was sampled. 

6. FS Hurricane Sandy—EFRP 

a. One hundred percent of the payments made in FY 2014 were tested for improper 

payments. 

b. Change in sampling process: This is the first year this program was sampled. 

7. FS Hurricane Sandy - CMDF 

a. One hundred percent of the FY 2014 non-payroll payments were tested for improper 

payments. FS payments related to employee salaries made in FY 2014. 

b. Change in sampling process: Employee salaries and payments related to charge cards 

were added into the payment universe (if made during the fiscal year being sampled). 

The following is a list of programs, brief descriptions of the sampling process, and their 

justifications for utilizing an OMB-approved alternative sampling methodology: 

1. FNS SNAP 

a. FNS requires States to pull a monthly random sample from the population of 

households receiving SNAP benefits for that given month. Most States draw the 

samples systematically (i.e. using a constant sampling interval); however, some States 

employ simple random or stratified sampling techniques. The sample universe 

represents payments made in the prior fiscal year. 

b. Change in sampling process: None. 

c. Justification: The SNAP Quality Control Process used for many years was fully 

reviewed and vetted. 

2. FNS NSLP, SBP, WIC, and CACFP 

a. The NSLP/SBP Access, Participation, Eligibility, and Certification Study-II (APEC-II) 

established estimates of erroneous payments due to certification error and 

non-certification error for school year 2012-2013. FNS generates an annual update for 

the improper payment measurements of both components using statistical techniques 

based on the findings of this bookend study. The sample universe represents payments 

made in School Year 2013-2014. 

b. Estimates of improper payments in the Special Supplemental Nutrition Program for 

Women, Infants, and Children (WIC) focus on two components: certification error and 

vendor error. FNS makes use of periodic studies to assess the level of error in program 

payments and then “ages” the data to produce updated annual estimates. The National 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 1 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Survey of WIC Participants-II Study, established estimates of erroneous payments due 

to certification error. The 2013 WIC Vendor Management Study established the most 

recent national estimates of erroneous payments due to vendor error. FNS generates an 

annual update for the improper payment measurements of both components using 

statistical techniques based on the findings of these bookend studies. The sampling 

universe represents payments made in fiscal year 2014.

c. CACFP - In lieu of producing a program-wide improper payment measure, FNS has 

identified the Family Day Care Home (FDCH) component of this program as 

potentially high risk. A three-stage sample design was used: The first stage was 

developing a sample of States, from which a sample of sponsors was selected at the 

second stage, and a sample of FDCHs was selected in the final stage. FNS measured 

the level of erroneous payments due to sponsor error for the two types of program 

reimbursement (Tier 1 and Tier 2). The sampling universe represents payments made 

in fiscal year 2014. The improper payment measures presented do not include 

improper payments associated with the Adult Day Care component or Child Care 

Centers, nor do they include meal claiming errors at this time. 

d. Change in sampling process: None. 

e. Justification: Using the OMB-approved alternative methodology is the only way to 

report an improper payment rate for these programs. 

3. RMA FCIC 

a. Change in sampling process: The FY 2015 measurement plan changed from the 

previous year’s plan and was approved by OMB. The previous methodology for 

measuring improper payments in the FCIC drew too small of a sample to be 

statistically valid, provided disproportionate weight to the smaller Approved Insurance 

Providers (AIP), included only policies with indemnity payments, and excluded 

improper payments related to premium subsidy and Administrative and Operating 

(A&O) payments. The improper payment error rate was calculated as the sum of 

indemnity errors for policies reviewed during the current year plus previous 

2 reinsurance years divided by the sum of the indemnities for the policies reviewed 

during the 3 reinsurance years. 

The revised methodology for FY 2015 uses a statistically valid estimate of the 

improper payment rate and of the dollar amount of improper payments for FCIC. The 

improper payment reviews include all payment categories (premium subsidies, A&O 

subsidies, and indemnity payments) and considers how an improper payment can 

occur. A simple random sample is used to select the policies for review and the 

previous methodology of using inappropriate weighting factors is no longer an issue. 

b. Justification: During FY 2015, RMA used an OMB-approved alternative sampling 

methodology. A random sample was based on ten crops that account for about 

90 percent of the total policies earning premium. RMA also plans to use this sampling 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 1 7 

methodology in FY 2016. For FY 2017 and beyond, RMA intends to sample from all 

crops, not just the 10 that were used for FY 2015 and FY 2016 reporting, and develop 

an estimated improper payment rate applicable to the entire program. RMA intends to 

use a more comprehensive measurement plan that will use a larger sample stratified 

by AIP. 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 1 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

IMPROPER PAYMENT REPORTING 

Table 13 shows USDA’s high-risk programs. See the annotated notes below for additional program explanations as appropriate 

(dollars in millions). 

Table 13: Improper Payment Reduction Outlook 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FNS Supplemental 

Nutrition Assistance 

Program (SNAP) 

[Note # 1(b)] 

76,087 

3.20% 

2,437.00 

70,022.00 

3.66% 

2,562.81 

2,078.81

484.00 

70,893 

3.66% 

2,595.00 

70,692.00 

3.66% 

2,587.00 

70,387.00 

3.66% 

2,576.00 

FNS National School 

Lunch Program (NSLP) 

Total Program [Note # 2] 

11,463 

15.25% 

1,748.00 

11,319.00 

15.66% 

1,773.00 1,332.00 

441.00 

11,834.00 

14.79% 

1,750.20 

12,293.00 

14.43% 

1,773.90 

12,362.00 

14.08% 

1,740.10 

FNS NSLP Certification 

Error 

N/A

8.37% 

959.00 

N/A

9.70% 

1.098.00 

782.00 316.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 1 9 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FNS NSLP 

Counting/Claiming 

Error 

N/A

6.88% 

789.00 

N/A

5.96% 

675.00 550.00 125.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A

FNS School Breakfast 

Program (SBP) Total 

Program [Note # 2] 

3,605 

25.61% 

923.00 

3,812.00 

22.95% 

875.00 709.00 166.00 

3,937.00 

22.19% 

873.80 

4,189.00 

21.46% 

899.00 

4,230.00 

20.75% 

877.90 

FNS SBP Certification 

Error 

N/A

9.81% 

354.00 

N/A

10.86% 

414.00 291.00 123.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A

FNS SBP 

Counting/Claiming 

Error 

N/A

15.79% 

569.00 

N/A

12.10% 

461.00 418.00 

43.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A

FNS Special 

Supplemental Nutrition 

Program for Women, 

Infants, and Children 

(WIC) Total Program 

4,517 

4.55% 

206.00 

4,542.00 

4.62% 

210.00 139.00 

71.00 

4,778.00 

4.08% 

195.00 

4,842.00 

3.98% 

193.00 

4,918.00 

3.88% 

191.00 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 2 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FNS WIC Certification 

Error 

N/A

2.87% 

130.00 

N/A

2.71% 

123.00 123.00 

0.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A

FNS WIC Vendor Error 

N/A

1.68% 

76.00 

N/A

1.91% 

87.00 16.00 71.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/A

FSA Loan Deficiency 

Payments (LDP) [Note 

#7] 

0.20 

18.80% 

0.00 

0.000 

N/AN/AN/AN/A

107.00 

0.40% 

0.43 

72.00 

0.39% 

0.29 

72.00 

0.38% 

0.29 

FSA Livestock Forage 

Disaster Program (LFP) [Note # 3]

N/AN/AN/A

3,357.00 

3.10% 

104.20 

97.60 

6.60 

2,720.00 

2.50% 

68.00 

488.00 

2.48% 

12.10 

488.00 

2.40% 

11.70 

FSA Livestock Indemnity 

Program (LIP) [Note # 3] 

N/AN/AN/A

63.00 

6.36% 

4.00 3.80 0.20 

58.00 

5.00% 

1.74 

58.00 

4.00% 

1.45 

58.00 

3.00% 

1.16 

FSA Supplemental 

Revenue Assistance 

Payments Program 

(SURE) [Note # 3] 

1,778.00 

2.75% 

49.00 34.00 

9.90% 

3.366 

3.00 

0.366 

0.00 

2.74% 

0.00 0.00 

2.73% 

0.00 0.00 

2.72% 

0.00 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 2 1 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FSA Noninsured Crop 

Disaster Assistance 

Program (NAP) 

346.00 

4.25% 

15.00 

174.00 

7.36% 

12.80 12.30 

0.50 

144.00 

7.25% 

10.00 

144.00 

7.23% 

10.00 

144.00 

7.21% 

10.00 

FNS Child and Adult Care 

Food Program (CACFP) 

Total Program [Note # 

1(c) and Note # 4] 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

FNS CACFP FDCH—

Tiering Decisions 

930.00 

1.05% 

10.00 

930.00 

0.84% 

7.80 6.20 1.60 

930.00 

1.38% 

12.83 

962.00 

1.33% 

12.79 

962.00 

1.28% 

12.33 

FNS CACFP FDCH—

Meal Claims 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

RHS Rental Assistance 

Program (RAP) 

1,117.00 

1.99% 

22.00 

1,147.00 

1.41% 

16.20 14.20 

2.00 

1,172.00 

1.40% 

16.40 

1.230.60 

1.39% 

17.10 

1,292.10 

1.38% 

17.80 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 2 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

RMA Federal Crop 

Insurance Corporation 

(FCIC) Program Fund 

17,430.00 

5.58% 

972.00 

13,734.00 

2.20% 

302.15 289.41 

12.74 

7,903.00 

2.19% 

173.00 

7,910.00 

2.18% 

172.00 

8,709.00 

2.17% 

189.00 

NRCS Farm Security and 

Rural Investment Act 

Programs (FSRIP) 

2,200.00 

23.08% 

508.00 

2,122.00 

22.04% 

467.79 467.79 

0.00 

3,717.60 

9.90% 

368.04 

3,176.80 

9.70% 

308.15 

3,588.80 

9.50% 

340.94 

FSA Hurricane Sandy—

Emergency Conservation 

Program (ECP) 

0.40 

0.02% 

0.00 0.40 

0.50% 

0.002 

0.00 0.00 0.01 

0.49% 

0.00 0.00 

0.48% 

0.00 0.00 

0.47% 

0.00 

FSA Hurricane Sandy—

Emergency Forest 

Restoration Program 

(EFRP) 

N/AN/AN/A

0.30 

1.67% 

0.005 

0.01 0.00 0.30 

1.50% 

0.00 0.30 

1.45% 

0.00 0.30 

1.40% 

0.00 

FS Hurricane Sandy—

EFRP [Note # 1(a)] 

N/AN/AN/A

0.07 

0.00% 

0.00 0.00 0.00 0.08 

0.02% 

0.00 0.00 

0.02% 

0.00 0.00 

0.02% 

0.00 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 2 3 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FS Hurricane Sandy—

Capital Improvement 

and Maintenance 

(CMDF) 

0.30 

0.00% 

0.00 1.18 

0.06% 

0.00 0.00 0.00 1.00 

0.05% 

0.00 0.00 

0.04% 

0.00 0.00 

0.03% 

0.00 

NRCS Hurricane Sandy—

Emergency Watershed 

Protection Program 

(EWPP) 

N/AN/AN/A

4.83 

0.00% 

0.00 0.00 0.00 

57.38 

0.00% 

0.00 

23.86 

0.00% 

0.00 7.74 

0.00% 

0.00 

FNS Hurricane Sandy—

Commodity Assistance 

Program [Note # 5] 

5.70 

0.00% 

0.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

FSA Milk Income Loss 

Contract Program 

[Note # 6] 

283.00 

0.41% 

1.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

FSA Direct and CounterCyclical Payments

[Note # 6] 

4,619.00 

0.71% 

33.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 2 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Program 

Previous Year (PY) Outlays $ PY Improper Payment (IP) % PY IP $ Current Year (CY) Outlays $ CY IP % CY IP $ CY Over-payment $ CY Under-payment $ CY +1 Est. Outlays $ CY + 1 Est. IP % CY + 1 Est. IP $ CY +2 Est. Outlays $ CY +2 Est. IP % CY + 2 Est. IP $ CY + 3 Est. Outlays $ CY + 3 Est. IP % CY + 3 Est. IP $ 

FS Wildland Fire 

Suppression 

Management [Note # 6] 

751.00 

0.00% 

0.00 

N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

USDA Total [Note # 8] 

1251,32.60 

5.52%

6,924.00 

111,262.78 

5.70% 

6,339.12 5,166.04 1,186.04 

108,252.36 

5.60%

6,064.44 

106,081.56 

5.64%

5,986.78 

107,218.94 

5.57%

5,968.22 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 2 5 

Note # 1: (a) The Forest Service’s Emergency Forest Restoration Program reported a 

0.00% improper payment rate in the FY 2015 AFR but would like to request an improper 

reduction target increase of 0.02% and an increase to a 0.06% reduction target rate for CMDF in 

the following years due to the limited number of transactions and risk impact of any improper 

payments identified: (b) FNS’ SNAP is requesting to flatline its future year reduction targets at 

3.66% due to the historical downward trend, the nature of the program, and the tolerance 

threshold for SNAP quality control cases lowered from $50 to $37, which resulted in more 

improper payments being included in the calculation than in previous years. (c) FNS’ CACFP is 

reporting an improper payment rate of 0.84% for the FY 2015 AFR. FNS would like to request 

an increase in its future year reduction targets to 1.38% in FY 2016, 1.33% in FY 2017, and 

1.28% in FY 2018. The justification is that CACFP is currently reporting an improper payment 

rate below the high risk threshold and that continued reduction of improper payments may not be 

cost effective. 

Note # 2: Information has not been adjusted for interaction between the different sources of 

certification error and counting/claiming error.

Note # 3: These programs used to be reported as a component of the Miscellaneous Disaster 

Programs. The passage of the Agricultural Act of 2014 authorized LIP and LFP as permanent 

disaster programs. This change allowed FSA to conduct an individual sample on each of the 

following disaster programs (LIP, LFP, and SURE).

Note # 4: CACFP currently tests and reports on the FDCH-tiering decision component of the 

payment process. FNS continues to evaluate the measurement processes for the CACFP meal 

claim component. FNS has not set a date for measurement and reporting.

Note # 5: The FNS’ Hurricane Sandy—Commodity Assistance Program expended all of its 

disaster relief funds and will no longer be included in the Agency Financial Report. 

Note # 6: These programs are marked as not applicable (N/A) for current year and future years 

because they have been removed from the high risk list. The Wildland Fire Suppression 

Management, Milk Income Loss Contract Program, and Direct and Counter-Cyclical Payments 

have consistently reduced their improper payments to the point that they are no longer at high 

risk for making improper payments. With concurrence from the OIG and OMB, USDA has 

removed them from the improper payments high risk list of programs at high risk of improper 

payments. 

Note # 7: The Loan Deficiency Payments program had no FY 2014 outlays and therefore did not 

conduct a sample in FY 2015. USDA anticipates conducting a sample and reporting results in 

FY 2016.

Note # 8: The Current Year results reflect the sampling results completed in FY 2015. USDA 

sampling tests the prior year’s outlays or an OMB-approved alternative sampling plan. The 

Statistical Sampling Section above Table 13 discusses this in more detail.
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 2 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Discussion of Supplemental Measures 

OMB determines the designation of a high-priority program based on improper payment 

reporting in an agency’s AFR. The threshold for high-priority program determinations is 

$750 million in estimated improper payments as reported in the AFR or Planning and 

Accountability Report. USDA currently has four programs designated as high-priority programs: 

1. FNS SNAP 

a. State agencies and FNS report the QC Payment Error Rates to PaymentAccuracy.gov 

every June. 

b. Each month, SNAP cases from every State are sampled for QC review, which looks at 

benefits a household receives and verifies whether the benefit determination was 

correct. This activity identifies where improper payments occur. The baseline is the 

amount of monthly program benefits issued to households the QC review identified 

and whether the benefit payment or any portion of it was an improper payment. 

c. Data collected during the QC process is analyzed to identify areas of program 

administration that need improvement. 

d. Each year, SNAP issues QC Payment Error Rates. States with rates above 6 percent 

for 2 consecutive years are subject to a liability, which requires that the State invest 

funds into its program certification activities to reduce the amount of improper 

payments. 

2. FNS NSLP 

a. Percent of Students Directly Certified for Free School Meals: This measure reflects, 

as a percentage, the number of students directly certified for free school meals without 

an application (based on determination of eligibility in other programs), in comparison 

to the total number of students certified for free meals. The higher the number of direct 

certifications that are conducted accurately, the greater the impact on reducing 

certification errors that otherwise may occur during application processing. Programs 

used for direct certification include SNAP, TANF, FDPIR, foster care, and Medicaid. 

This measure is updated on an annual basis. 

b. State Technology Grants: This measure reflects the number of states receiving grants 

for school meals oversight systems. The purpose of these grants is to assist schools in 

reducing errors relating to recordkeeping and meal claiming. Increasing state grants 

will reduce related errors. This measure is updated on an annual basis. 

3. FNS SBP 

a. Percent of Students Directly Certified for Free School Meals: This measure reflects, as 

a percentage, the number of students directly certified for free school meals without an 

application (based on determination of eligibility in other programs), in comparison to 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 2 7 

the total number of students certified for free meals. The higher the number of direct 

certifications that are conducted accurately, the greater the impact on reducing 

certification errors that otherwise may occur during application processing. Programs 

used for direct certification include SNAP, TANF, FDPIR, foster care, and Medicaid. 

This measure is updated on an annual basis. 

b. State Technology Grants: This measure reflects the number of states receiving grants 

for school meals oversight systems. The purpose of these grants is to assist schools in 

reducing errors relating to recordkeeping and meal claiming. Increasing state grants 

will reduce related errors. This measure is updated on an annual basis. 

4. RMA FCIC 

RMA has initiated supplemental measures in FY 2015. RMA will measure the reduction in 

acreage reporting discrepancies greater than 100 acres using data mining techniques. 

a. Description—Producers report acreage to their Approved Insurance Provider and to 

FSA. The insurance companies then report to RMA. The reported acres for a 

producer are compared between RMA and FSA. For reinsurance year (RY) 2014, 

over 80% of producers reported the same acres to both RMA and FSA. However, 

over 20,000 producers reported significant differences of over 100 acres to RMA and 

FSA. 

b. Measurement Baseline—As of RY 2014, there were 25,904 Eligible Crop Insurance 

Contracts (ECIC) having an acreage reporting discrepancy of 100 or more acres. This 

means that 2.64% of approximately 990,000 ECICs nationwide had an acreage 

reporting discrepancy of over 100 acres. An ECIC represents all insured acres for a 

producer in a county by crop. 

c. Frequency—Annually. 

d. Planned Target—Reduce the percentage of ECICs with very large acreage 

discrepancies of over 100 acres, from 2.64% to 2.6%. This could equate to a 

reduction of approximately 400 ECICs. 

e. Benefit—RMA will produce a spot-check list of producers with significant 

discrepancies (over 100 acres) between acreage reported to RMA and FSA. This list 

will be provided to the Approved Insurance Providers for further review and 

reconciliation, as necessary. Corrections to the acreage reports could potentially 

prevent improper payments of insurance premium subsidies and indemnities. 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 2 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Improper Payment Root Cause Categories 

Table 14 is the USDA matrix used to provide a cross-tabulation framework for the way in which each program categorizes and reports its 

improper payment estimate (dollars in millions). 

Table 14: Improper Payment Root Cause Category Matrix (Dollars in Millions) 

Reason for Improper Payment

Supplemental Nutrition 

Assistance Program 

(SNAP), FNS

National School Lunch 

Program (NSLP), FNS 

School Breakfast 

Program (SBP), FNS 

Special Supplemental 

Nutrition Program for 

Women, Infants, and 

Children (WIC), FNS 

Overpayment Underpayment Overpayment Underpayment Overpayment Underpayment Overpayment Underpayment 

Program Design or Structural Issue 

Inability to Authenticate Eligibility 

Failure to Verify 

Death Data 

Financial Data 

Excluded Party 

Data 

Prisoner Data 

Other Eligibility 

Administrative 

or Process Error 

Made By 

Federal Agency 

State or Local 

Agency $1,153.22 $441.93 

Other Party $1,332.00 $441.00 $709.00 $166.00 $139.00 $71.00 

Medical Necessity 

Insufficient Documentation 

Other Reason* $925.59 $42.07 

TOTAL $ 2,078.91 $484.00 $1,332.00 $441.00 $709.00 $166.00 $139.00 $71.00 

*Due to errors by clients 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 2 9 

Reason for Improper Payment 

Loan Deficiency 

Payments (LDP), 

FSA/CCC 

Livestock Forage 

Disaster Program (LFP), 

FSA/CCC 

Livestock Indemnity 

Program (LIP), FSA/CCC 

Supplemental Revenue 

Assistance Payments 

Program (SURE), FSA/CCC 

Overpayments Underpayments Overpayments Underpayments Overpayments Underpayments Overpayments Underpayments 

Program Design or Structural 

Issue 

Inability to Authenticate 

Eligibility $31.26 

Failure to 

Verify 

Death Data 

Financial Data 

Excluded Party 

Data 

Prisoner Data 

Other Eligibility 

Administrative 

or Process 

Error Made By 

Federal Agency $44.46 $6.60 $2.70 $0.20 $2.25 $0.40

State or Local 

Agency 

Other Party 

Medical Necessity 

Insufficient Documentation $21.88 $1.10 $0.75 

Other Reason 

TOTAL N/A N/A $97.60 $6.60 $3.80 $0.20 $3.00 $0.40
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 3 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Reason for Improper Payment 

Noninsured Crop 

Disaster Assistance 

Program (NAP), FSA 

Child and Adult Care 

Food Program (CACFP), 

FNS

Rental Assistance 

Program (RAP), RD 

Federal Crop Insurance 

Corporation (FCIC) 

Program Fund, RMA 

Overpayments UnderpaymentsOverpayments Underpayments Overpayments Underpayments Overpayments Underpayments 

Program Design or Structural Issue 

Inability to Authenticate Eligibility $0.49 $160.05 $3.54 

Failure to 

Verify 

Death Data 

Financial Data $0.13

Excluded Party 

Data 

Prisoner Data 

Other Eligibility $0.38 $77.57 $9.20 

Administrative 

or Process 

Error Made By 

Federal Agency $8.07 $0.50

State or Local 

Agency 

Other Party $6.2 $1.6 $10.4 $2 $34.63 

Medical Necessity 

Insufficient Documentation $3.23 $3.8 $17.16 

Other Reason 

TOTAL $12.30 $0.50 $6.2 $1.6 $14.2 $2 $289.41 $12.74 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3 1 

Reason for Improper Payment 

Farm Security and Rural 

Investment Act 

Programs (FSRIP), NRCS 

Hurricane Sandy—

Emergency 

Conservation Program, 

FSA/CCC 

Hurricane Sandy—

Emergency Forest 

Restoration Program, 

FSA/CCC 

Hurricane Sandy—

Emergency Forest 

Restoration Program, FS 

Overpayments Underpayments Overpayments Underpayments Overpayments Underpayments Overpayments Underpayments 

Program Design or Structural Issue 

Inability to Authenticate Eligibility 

Failure to 

Verify 

Death Data 

Financial Data 

Excluded Party 

Data 

Prisoner Data 

Other Eligibility $437.83 

Administrative 

or Process 

Error Made By 

Federal Agency $0.002 $0.005 

State or Local 

Agency $29.96 

Other Party 

Medical Necessity 

Insufficient Documentation 

Other Reason 

TOTAL $467.79 N/A $0.002 N/A $0.005 N/A N/A N/A 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 3 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Reason for Improper Payment 

Hurricane Sandy—Capital Improvement and 

Maintenance, FS 

Hurricane Sandy—Emergency Watershed 

Protection Program, NRCS 

Over-payments Under-payments Over-payments Under-payments 

Program Design or Structural Issue 

Inability to Authenticate Eligibility 

Failure to Verify 

Death Data 

Financial Data 

Excluded Party Data 

Prisoner Data 

Other Eligibility 

Administrative 

or Process Error 

Made By 

Federal Agency 

State or Local Agency 

Other Party 0.00037124 0.00037147 

Medical Necessity 

Insufficient Documentation 

Other Reason 

TOTAL 0.00037124 0.00037147 N/A N/A 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3 3 

Corrective Actions 

Each program is required to develop a Corrective Action Plan. Exhibit 25 describes actions taken 

and planned. High-priority programs include a discussion of actions taken to recover and prevent 

future improper payments.

Exhibit 25: Program Corrective Action Plans 

Agency Program Corrective Actions 

Food and 

Nutrition 

Service 

(FNS) 

Supplemental 

Nutrition 

Assistance 

Program 

(SNAP) 

Root Cause #1—Administrative or Process Error Made By State 

or Local Agency. 

 Program regulations require State agencies to analyze data to 

develop corrective action plans (CAPs) to reduce or eliminate 

program deficiencies. A State with a high error rate must 

conduct an analysis of its State quality control (QC) data to 

identify the root causes of errors in the State and develop a 

QC CAP to address root causes. A State with an excessive 

error rate will be required to invest a specified amount 

(depending on its error rate and size) designated specifically 

to program improvements that address the root causes. Each 

State’s CAP or plan to invest in program improvements is 

unique and based on the root causes of the errors that 

occurred in that State. The State will also face further fiscal 

penalties if it fails to lower its error rate in a future fiscal year. 

These actions were completed in FY 2014 and are ongoing. 

 FNS, through its regional offices, works directly with States to 

impart the importance of payment accuracy to State 

leadership and to assist in developing effective corrective 

actions to reduce errors. Regional offices provided technical 

assistance to States throughout FY 2015. 

 FNS administers a State Exchange Program whereby funds 

are provided to States to facilitate travel to obtain, observe, 

and share information on best practices and effective 

techniques for error reduction. Coalitions have been formed 

among States to promote partnerships, information 

exchange, and collaborative efforts that address mutual 

concerns and support development of effective corrective 

action. These activities were conducted throughout 

FY 2015. 

 QC Payment Error Rates are announced at the end of June in 

the year following the end of the review period. State 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 3 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

agencies with error rates of 6 percent or higher are required 

to submit CAPs to FNS addressing these errors. These CAPs 

remain in effect until deficiencies in program operations have 

been substantially reduced or eliminated. State agencies will 

provide updates to their CAPs through regular, semiannual 

updates received by FNS by May 1, 2015 and 

November 1, 2015, respectively. 

High-Priority Program Discussion. 

 SNAP is a State run program. FNS must work with State 

agencies to improve program administration. The State 

Exchange Program promotes communication and 

partnerships between high- and low-performing State 

agencies, providing low-performing State agencies access to 

best practices and support. 

 The State CAPs document how State agencies plan to 

improve payment accuracy and allow the corrective actions 

to be tailored to specific State needs and deficiencies. 

 FNS implemented a process to identify, collect, and report 

overpayment information for SNAP from available sources to 

the Department on a quarterly basis. 

FNS National 

School Lunch 

Program 

(NSLP) 

Root Cause # 1: Administrative or Process Error Made by Other 

Party. 

 Addressed certification error by expanding the use of direct 

certification, increasing the number of School Food 

Authorities (SFA) and schools participating in the Community 

Eligibility Provision, and improved the application for free and 

reduced-price meals by making it easier to complete and 

process the application. 

 Developed and implemented training programs and 

established professional certification standards for school 

food service workers that are helping schools reduce meal 

claiming error. 

 Published the final rule, Professional Standards for School 

Nutrition Programs Personnel as Required by the Healthy, 

Hunger-Free Kids Act of 2010 (HHFKA). The rule became 

effective July 1, 2015. 

 Required an independent review of applications to increase 

the accuracy of eligibility determinations in school districts 

that demonstrate high levels of administrative error. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3 5 

Agency Program Corrective Actions 

Implementation of this review was required in school year 

(SY) 2014-2015. 

 In SY 2014-2015, the Community Eligibility Provision (CEP) 

was expanded nationwide following a 3-year phased pilot. 

 Issued a policy memo on January 14, 2015, providing 

guidance on all aspects of CEP implementation, including 

eligibility for CEP election, meal counting and claiming, 

integrity and recordkeeping, and other administrative 

procedures. 

 Updated the Administrative Review Manual in August 2015. 

 Built upon the assessment of the Coordinated Review Effort 

(CRE) Data Report (FNS-640) to identify and target corrective 

actions and to consider revisions to the form to capture 

information regarding the Administrative Reviews by 

convening a working group in June 2015. The work group 

analyzed data from the administrative review process at the 

SFA level in an effort to identify the meaningful data to 

collect moving forward. 

 Published a new Prototype Application for Free and ReducedPrice School Meals on April 13, 2015, along with 

accompanying informational documents. 

 Issued a revised Eligibility Manual in July 2015. 

 Issued a Community Eligibility Provision Manual in August 

2015. 

 Conducted the third year of a phased-in demonstration 

project in SY 2014-2015 in select school districts and States to 

test the potential for direct certification using Medicaid data. 

The interim report for the first year was published in January 

2015, and showed that States have had success in reaching 

eligible children through matching with Medicaid data. The 

final report was sent to Congress in October 2015. 

 Made $4 million available in FY 2015 for Administrative 

Reviews and Training (ART) grants to States to implement 

training and technology solutions to reduce and prevent 

administrative errors in local education agencies that are at 

high risk for such errors. The request for applications was 

released in May 2015, and grants were awarded in October 

2015. 

 Utilized ongoing contracts with expert consultants to provide 

technical assistance directly to States in the areas of training 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 3 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

and automation. Targeted technical assistance support, 

including site visits, was provided to approximately 30 State 

agencies in FY 2015. Targeted technical assistance support, 

including site visits, will be provided to approximately 30 

State agencies in FY 2016. 

 In FY 2015, FNS convened the Child Nutrition State Systems 

Workgroup (CNSSW), a national workgroup of State, FNS 

regional and national office representatives, to identify 

priorities for State and local automation initiatives to improve 

program accountability, monitoring, training, data quality, 

and other program areas where automation is a strong 

business solution for program integrity. 

 FNS conducted the first national technology training for State 

agencies and technology vendors, “Child Nutrition (CN) 

Access and Accountability through Technology,” September 

22–24, 2015. 

 Required States not meeting the direct certification rate 

benchmarks for a given SY to develop continuous 

improvement plans (CIP) to describe the activities they will 

implement to reach more eligible children in future years. 

FNS approved 28 CIP plans in FY 2014 and provided training in 

2015 to 41 State agencies on the development of revisions to 

improvement plans to help them reach and maintain rates at 

or above 95 percent. 

 FNS issued a Request for Applications in May 2015 to allow 

quarterly opportunities for State agencies to apply for the 

grant funding to help them improve their direct certification 

rates. 

 A number of reports and studies that were recently 

completed support efforts to reduce improper payments, 

including as follows: 

 The Regional Office Review of Applications, which was posted 

on the Web site May 4, 2015. 

 The NSLP and SBP Access, Participation, Eligibility, and 

Certification Study II (APEC-II); a final report, which was 

released in May 2015. 

 The State Performance on Enrolling Children Receiving 

Program Benefits for Free School Meals (Direct Certification), 

which was released in May 2015.
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3 7 

Agency Program Corrective Actions 

 On March 9, 2015, FNS announced the expansion of the 

“Team Up for School Nutrition Success Initiative,” which 

provides training, technical assistance, and peer-to-peer 

mentorship opportunities to school food service 

professionals. 

 FNS issued a revised Offer Versus Serve (OVS) Manual in July 

2015.

 Granted an extension for the use of funds to help State 

agencies implement new meal pattern requirements in May 

2015. 

 Will require training for schools on certification and 

accountability issues. This training will be ongoing through 

FY 2016. 

 In FY 2016, $4 million will be made available to State agencies 

for ART grants to implement training and technology 

solutions to reduce and prevent administrative errors in LEAs 

that are at high risk for such errors. The request for 

applications will be released in early 2016, and grants will be 

awarded in the summer of 2016. 

 FNS is completing a number of proposed rules that will serve 

to reduce improper payments by: 

 Mandating schools to post a summary of the administrative 

review final results and make the information available to the 

public; this transparency requirement should be published in 

SY 2015-2016. 

 Levying fines for gross mismanagement and violating 

program requirements. An estimated publication date for the 

proposed rule is early FY 2016. 

 Strengthening program compliance by prohibiting any school, 

institution, or individual that is terminated from one of the 

Child Nutrition Programs and on a list of disqualified 

institutions and individuals from participating in, or 

administering, any of the Child Nutrition Programs; an 

estimated publication date for the proposed rule is early 

FY 2016. 

 States not meeting the required 95 percent benchmark for 

direct certification rates with SNAP are required to develop 

and implement CIPs to describe the activities they will 

implement to reach more eligible children in future years. In 

FY 2016, FNS will provide technical assistance to the 41 States 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 3 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

with CIPs resulting from SY 2013-2014 direct certification 

rates, as well as begin work with those States that did not 

meet the benchmark for SY 2014-2015. 

 Allowing States to apply for grants to help them improve their 

direct certification rates in FY 2016—October 2015, January 

2016, April 2016, and July 2016 (if funds remain available). All 

grants under this request will be awarded by October 2016. 

 School Nutrition and Meal Cost Study, commissioned by FNS, 

is an examination of the relationships between school 

environment and school food service operations, nutritional 

quality of meals offered and served in school meal programs, 

plate waste, costs to produce reimbursable meals, student 

participation, participant characteristics, satisfaction and 

related attitudes toward the school lunch and breakfast 

programs. Primary data collection occurred in SY 2014-2015. 

A final report is due in early 2017. 

High-Priority Program Discussion. 

 The NSLP program has specifically tailored the corrective 

actions above to better reflect the unique processes, 

procedures, and risks of this high-priority program. 

 Current statutory authority allows USDA to recover improper 

payments from state agencies when identified through 

reviews, audits or other operational oversight activities. 

These improper payments are recovered through direct 

billing and offset of future program payments earned. 

Current statutory authority does not support collection of 

improper payments identified on the basis of a statistical 

sample or estimation procedure, as used to develop the 

national estimates of improper payments reported here. 

FNS School 

Breakfast 

Program (SBP) 

Root Cause # 1: Administrative or Process Error Made by Other 

Party. 

 Addressed certification error by expanding the use of direct 

certification, increasing the number of SFAs and schools 

participating in the Community Eligibility Provision, and 

improved the application for free and reduced-price meals by 

making it easier to complete and process the application. 

 Developed and implemented training programs and 

established professional certification standards for school 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 3 9 

Agency Program Corrective Actions 

food service workers that are helping schools reduce meal 

claiming error. 

 Published the final rule, Professional Standards for School 

Nutrition Programs Personnel as Required by the Healthy, 

Hunger-Free Kids Act of 2010. The rule became effective July 

1, 2015. 

 Required an independent review of applications to increase 

the accuracy of eligibility determinations in school districts 

that demonstrate high levels of administrative error. 

Implementation of this review was required in SY 2014-2015. 

 In SY 2014-2015, the Community Eligibility Provision (CEP) 

was expanded nationwide following a 3-year phased pilot. 

 Issued a policy memo on January 14, 2015 providing guidance 

on all aspects of CEP implementation, including eligibility for 

CEP election, meal counting and claiming, integrity and 

recordkeeping, and other administrative procedures. 

 Updated the Administrative Review Manual in August 2015. 

Built upon the assessment of the Coordinated Review Effort 

(CRE) Data Report (FNS-640) to identify and target corrective 

actions and to consider revisions to the form to capture 

information regarding the Administrative Reviews by 

convening a working group in June 2015. The work group 

analyzed data from the administrative review process at the 

SFA level in an effort to identify the meaningful data to 

collect moving forward. 

 Published a new Prototype Application for Free and ReducedPrice School Meals on April 13, 2015, along with 

accompanying informational documents. 

 Issued a revised Eligibility Manual in July 2015. 

 Issued a Community Eligibility Provision Manual in August 

2015. 

 Conducted the third year of a phased-in demonstration 

project in SY 2014-2015 in selected school districts and States 

to test the potential for direct certification using Medicaid 

data. The interim report for the first year was published in 

January 2015 showing that States have had success in 

reaching eligible children through matching with Medicaid 

data. The final report was sent to Congress in October 2015. 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 4 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

 Made $4 million available in FY 2015 for ART grants to States 

to implement training and technology solutions to reduce and 

prevent administrative errors in local education agencies that 

are at high risk for such errors. The request for applications 

was released in May 2015, and grants were awarded in 

October 2015. 

 Utilized ongoing contracts with expert consultants to provide 

technical assistance directly to States in the areas of training 

and automation. Targeted technical assistance support, 

including site visits, was provided to approximately 30 State 

agencies in FY 2015. Targeted technical assistance support, 

including site visits, will be provided to approximately 30 

State agencies in FY 2016. 

 In FY 2015, FNS convened the Child Nutrition State Systems 

Workgroup (CNSSW), a national workgroup of State, regional, 

and national office representatives to identify priorities for 

State and local automation initiatives to improve program 

accountability, monitoring, training, data quality, and other 

program areas where automation is a strong business 

solution for program integrity. 

 FNS conducted the first national technology training for State 

agencies and technology vendors, “CN Access and 

Accountability through Technology,” on September 22–24, 

2015. 

 Required States not meeting the direct certification rate 

benchmarks for a given SY to develop Continuous 

Improvement Plans (CIPs) to describe the activities they will 

implement to reach more eligible children in future years. 

FNS approved 28 CIP plans in FY 2014 and provided training in 

2015 to 41 State agencies on the development or revisions to 

improvement plans to help them reach and maintain rates at 

or above 95 percent. 

 FNS issued a Request for Applications in May 2015 to allow 

quarterly opportunities for State agencies to apply for the 

grant funding to help them improve their direct certification 

rates. 

 A number of reports and studies that were recently 

completed support efforts to reduce improper payments, 

including as follows: 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 4 1 

Agency Program Corrective Actions 

 The Regional Office Review of Applications was posted on the 

Website May 4, 2015. 

 NSLP and SBP Access, Participation, Eligibility, and 

Certification Study II (APEC-II) final report which was released 

in May 2015. 

 The State Performance on Enrolling Children Receiving 

Program Benefits for Free School Meals (Direct Certification) 

which was released in May 2015. 

 On March 9, 2015, FNS announced the expansion of the 

“Team Up for School Nutrition Success Initiative,” which 

provides training, technical assistance, and peer-to-peer 

mentorship opportunities to school food service 

professionals. 

 FNS issued a revised Offer Versus Serve (OVS) Manual in July 

2015. 

 Granted an extension for the use of funds to help State 

agencies implement new meal pattern requirements in May 

2015. 

 Will require training for schools on certification and 

accountability issues. This training will be ongoing through 

FY 2016. 

 In FY 2016, $4 million will be made available to State agencies 

for ART grants to implement training and technology 

solutions to reduce and prevent administrative errors in LEAs 

that are at high risk for such errors. The request for 

applications will be released in early 2016, and grants will be 

awarded in the summer of 2016. 

 FNS is completing a number of proposed rules that will serve 

to reduce improper payments by: 

 Mandating schools to post a summary of the administrative 

review final results and make the information available to the 

public; this transparency requirement is estimated to be 

published in SY 2015-2016. 

 Providing for fines for gross mismanagement and violating 

program requirements. An estimated publication date for the 

proposed rule is early FY 2016. 

 Strengthening program compliance by prohibiting any school, 

institution, or individual that is terminated from one of the 

Child Nutrition Programs and on a list of disqualified 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 4 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

institutions and individuals from participating in or 

administering any of the Child Nutrition Programs; an 

estimated publication date for the proposed rule is early 

FY 2016. 

 States not meeting the required 95 percent benchmark for 

direct certification rates with SNAP are required to develop 

and implement CIPs to describe the activities they will 

implement to reach more eligible children in future years. In 

FY 2016, FNS will provide technical assistance to the 41 States 

with CIPs resulting from school year 2013-2014 direct 

certification rates, as well as begin work with those States 

that did not meet the benchmark for school year 2014-2015. 

 Allowing States to apply for grants to help them improve their 

direct certification rates in FY 2016—October 2015, January 

2016, April 2016, and July 2016 (if funds remain available). All 

grants under this request will be awarded by October 2016. 

 Conducting the School Nutrition and Meal Cost Study, an 

examination of the relationships between school 

environment and school food service operations, nutritional 

quality of meals offered and served in school meal programs, 

plate waste, costs to produce reimbursable meals, student 

participation, participant characteristics, satisfaction, and 

related attitudes toward the school lunch and breakfast 

programs. The primary data collection occurred in SY 2014-

2015; a final report is due in early 2017. 

High-Priority Program Discussion. 

The SBP program has specifically tailored the corrective actions 

above to better reflect the unique processes, procedures, and 

risks of this high-priority program. 

Current statutory authority allows USDA to recover improper 

payments from state agencies when identified through reviews, 

audits or other operational oversight activities. These improper 

payments are recovered through direct billing and offset of 

future program payments earned. Current statutory authority 

does not support collection of improper payments identified on 

the basis of a statistical sample or estimation procedure, as used 

to develop the national estimates of improper payments 

reported here. 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 4 3 

Agency Program Corrective Actions 

FNS Special 

Supplemental 

Nutrition 

Program for 

Women, 

Infants, and 

Children 

(WIC) 

Root Cause #1: Administrative or Process Error made by Other 

Party. 

 FNS initiated focused ME Reviews in CE for all 90 WIC State 

agencies in FY 2015. As of June 15, 2015, 30 CE MEs have 

been initiated. 

 On March 13, 2015, FNS initiated a monthly 

Certification/Eligibility CE ME conference call with Regional 

Office staff to clarify certification/eligibility policy. 

 FNS will conduct ME Reviews in CE for all 90 WIC States 

agencies (October 2016). 

 FNS will conduct quarterly reviews of the CE Reviews to track 

milestones and identify areas where additional training, 

technical assistance and policy guidance is needed 

(November 2016). 

 FNS is preparing to issue Certification Guidance that will 

provide clarification of policy related to income, identity, and 

residency requirements in a single document. This document 

will provide easy reference for State and local agency use 

(September 2016). 

 FNS staff has conducted a series of vendor integrity training 

Webinars for regional offices to assist in oversight of WIC 

State agencies. 

 FNS will provide technical assistance to State agencies with 

weaknesses in the vendor management system (November 

2016). 

 FNS will create a Vendor Management Handbook for regional 

offices to assist WIC State agencies (January 2016). 

 FNS will assess the data collected from WIC State agencies on 

vendor monitoring and compliance activity (July 2016). 

FSA, CCC Loan 

Deficiency 

Payments 

(LDP) 

LDP had no outlays in FY 2014; however, the following 

corrective actions were taken, or are planned, to reduce future 

improper payments: 

FSA issued Notice LP-2200, Additional Requirements for crop 

year 2014 LDPs and Market Loan Gains, which included a onepage table listing specific eligibility requirements and the form(s) 

required. Action completed on October 6, 2014. 

FSA issued Notice CN-1051, Processing Cotton Loan 

Redemptions and LDP Requests, on October 6, 2014. This notice 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

2 4 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Agency Program Corrective Actions 

highlighted additional information on processing LDP requests 

for cotton, including as follows: 

 Eligibility under the Adjusted Gross Income (AGI) provisions; 

 Payment limitation requirements; and 

 Announcement of an interim Web-based system for 

monitoring and tracking LDPs and market loan gains with 

respect to producer eligibility and payment limitation. 

FSA issued Notice LP-2202, FY 2014 National County Operations 

Review Program (CORP) Review for Improper Payments for 

Marketing Assistance Loans (MAL), on December 3, 2014. This 

notice: 

 Updated and required a detailed LDP checklist to be 

completed by each employee for the first 5 LDPs they process 

each crop year; and 

 Required Web-based PowerPoint® training for all employees 

working with LDPs each crop year. 

FSA issued Notice LP-2205, MAL and LDP Authority for Crop 

Years 2015 through 2018, on January 2, 2015. This notice: 

 Announced MAL and LDP policy changes published in the 

applicable Federal Register regulations. 

 Included an updated easy-to-follow one-page table of MAL 

and LDP eligibility requirements and the required form(s) for 

each. 

FSA issued Handbook 2-LP Peanuts (Rev. 9)—Loans and Loan 

Deficiency Payments for Peanuts—Amendment 1, on March 17, 

2015. Updated LDP policy applicable to 2015 crop year peanut 

LDPs. 

Conducted Video Teleconference/Conference call with State 

Office (STO) Price support Specialists on MAL and LDP policy on 

April 28, 2015. Included an updated PowerPoint presentation for 

STOs to use when training their counties. 

The following handbook amendments updating and further 

clarifying LDP policy were issued: 

 Marketing Assistance Loans and Loan Deficiency Payments 

for 2008 and Subsequent Crop Years—Amendment 12 on 

April 13, 2015. 

 General LDP and MAL policy applicable for crop year 2015; 

and 
F I S C A L Y E A R 2 0 1 5 A G E N C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 4 5 

Agency Program Corrective Actions 

 LDP and MAL producer eligibility requirements. 

 Issued Loans and Loan Deficiency Payments for Honey—

Amendment 16, on May 12, 2015: 

o Updated both LDP and MAL policy specific to 2015 crop 

year for honey. 

 Issued Loans and Loan Deficiency Payments for Rice—

Amendment 25 on June 10, 2015: 

o Updated both LDP and MAL policy specific to 2015 crop 

year for rice. 

 Issued Marketing Assistance Loans and Loan Deficiency 

Payments for 2008 and Subsequent Crop Years—Amendment 

13 on June 19, 2015: 

o Clarified LDP and MAL producer eligibility requirements. 

 Issued both Loans and Purchases (LP) and Cotton notices 

before possible crop year 2015 LDPs to remind employees of 

specific eligibility and processing requirements, August 2015. 

 Issued Cotton and Loan Deficiency Payments—Amendment 

52, August 2015: 

o Updated LDP and MAL policy specific to 2015 crop year 

for cotton. 

o Required training for county office employees before 

they process crop year 2015 LDPs; training was also made 

available to State offices, August 2015. 

Actions planned to reduce improper payments for LDPs: 

Will code eLoan Deficiency Program (eLDP) to read the Common 

Payment Software by summer, 2016. The Common Payment 

Software analyzes criteria to ensure that the producer is eligible 

for LDP before making a payment, in addition to keeping track of 

a producer’s payment limitation. Currently, county offices track 

LDPs disbursed to each producer using a manual process. 

FSA, CCC Livestock 

Forage 

Disaster 

Program (LFP) 

Root Cause #1: Administrative or Process Errors Made by 

Federal Agency. 

 A notice was issued in September 2015 to field offices to 

reinforce and outline program policies; payments are to be 

made on correct forage and livestock information, carrying 

capacities, and complete applications. 

 A CCC-770 LFP checklist form was developed for the District 

Director’s review of LFP applications to ensure that payment 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

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Agency Program Corrective Actions 

eligibility and documentation are correctly reviewed and 

documented and provided to the field in November 2015. 

Root Cause #2: Inability to Authenticate Eligibility. 

A notice was issued in September 2015 to field offices to 

reinforce policies on acceptable evidence that grazing land is 

owned or leased by a producer, and to emphasize that 

documentation must be filed before the application is approved. 

Root Cause #3: Insufficient Documentation to Determine 

Eligibility. 

A notice was issued in September 2015 to field offices to 

reinforce policies regarding documentation of eligibility for farm 

operation plans, acreage reports, and highly erodible land 

conservation and wetland conservation certifications, as well as 

documenting whether grazing land is owned or leased. 

FSA, CCC Livestock 

Indemnity 

Program (LIP) 

Root Cause #1 and #2: Administrative or Process Errors Made 

by Federal Agency and Insufficient Documentation to 

Determine. 

 A notice will be issued to field offices to reinforce program 

policies and procedures. Action completed in September 

2015.

Developed an optional checklist for County Office employees 

to use prior to payment. County Executive Directors and 

District Directors may review/spot-check the completed 

checklist to help identify apparent internal control 

deficiencies and address training needs to reduce future 

errors. Action completed in October 2015. 

 Compliance reviews and spots-checks will be completed by 

County Offices and results will be recorded in the National 

Compliance Review database. Action expected to be 

completed in December 2015. 

 National Office will analyze the National Compliance Review 

results to identify program policy and procedures that need 

to be reinforced. Action expected to be completed in January 

2016.
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Agency Program Corrective Actions 

FSA, CCC Supplemental 

Revenue 

Assistance 

Payments 

(SURE) 

Program 

Root Cause #1 and #2: Administrative or Process Errors Made 

by Federal Agency and Insufficient Documentation to 

Determine. 

 The Supplemental Revenue Assistance Payments (SURE) 

Program was authorized under the 2008 Farm Bill, and 

eligibility was limited to those disaster events occurring 

through September 30, 2011. SURE was not reauthorized 

under the Agricultural Act of 2014, also known as the 2014 

Farm Bill. 

 Registration for SURE ended August 29, 2014, and no 

applications have been accepted since then. Future activity 

will be limited to activity from appeals or litigation. In 

FY 2015, only 183 SURE payments totaling $3.9 million were 

issued, which reflects a significant decrease in program 

activity. We do not anticipate the error rate spike under SURE 

will have an impact on other programs because those 

programs are implemented under a fully integrated software 

process minimizing data entry errors. 

 The National Office sent a directive to all State and county 

offices reminding employees of the importance of secondparty reviews and verification of data, prior to finalizing any 

carry over payment activity. In addition to second-party 

reviews conducted by the county office, all carry over 

payment activity will require the District Director’s initials 

prior to payment, thus holding them accountable for accurate 

payments. This action was completed in September 2015. 

 No further actions are planned to reduce improper payments, 

since the authority for the SURE Program has expired. 

FSA, CCC Noninsured 

Crop Disaster 

Assistance 

Program 

(NAP) 

Root Cause #1: Administrative or Process Error Made by 

Federal Agency. 

 National Farm Bill training modules were delivered to State 

offices the week of November 3–7, 2014. State Offices were 

required to deliver the modules to county offices by January 

30, 2015. 

 The NAP handbook was rewritten to clarify policy and 

procedure, and to include new provisions authorized by the 

2014 Farm Bill. Handbook 1-NAP, Revision 2, was issued to 

field offices on February 20, 2015. 
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Agency Program Corrective Actions 

 A National NAP Notice was issued to field offices to reinforce 

current program policies and procedures on August 31, 2015. 

Root Cause #2: Insufficient Documentation. 

 National Farm Bill training modules were delivered to State 

offices the week of November 3–7, 2014. State Offices were 

required to deliver the modules to county offices by January 

30, 2015. 

 The NAP handbook was revised to clarify policy and 

procedure, and to include new provisions authorized by the 

2014 Farm Bill. Handbook 1-NAP, Revision 2, was issued to 

field offices on February 20, 2015. 

 A National NAP Notice was issued to field offices to reinforce 

current program policies and procedures by July 31, 2015. 

 Acreage Reporting Target Reviews will be conducted by CORP 

staff to mitigate improper payments caused by errors related 

to county office acreage reporting activities by December 31, 

2015. 

 The NAP Basic Provisions, which provide producers with the 

terms and conditions for program participation and payment 

eligibility, will be revised to clarify producer responsibilities 

by December 31, 2015. 

 A customer training package will be developed to educate 

producers on NAP recordkeeping requirements and introduce 

them to a NAP tool to collect data for production reporting by 

December 31, 2015. 

FNS Child and 

Adult Care 

Food Program 

(CACFP) 

Root Cause # 1: Family Day Care Homes (FDCH) improper 

payments are caused by sponsor error in determining a 

participating home’s reimbursement tier (tiering error) and/or 

by FDCH error in reporting the number of meals that are 

eligible for reimbursement (claiming error). 

 FNS issued policy memos intended to minimize meal counting 

and claiming errors, thus decreasing improper payments. 

 On April 22, 2015, FNS provided an overview to State 

Agencies on the new CACFP policies, CACFP meal pattern 

proposed rule, Paperwork Reduction Report for Congress, 

Team Nutrition updates and resources, and CACFP 

monitoring issues. 
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Agency Program Corrective Actions 

 Continued Management Evaluations in FYs 2015 and 2016–

FNS Regional offices are in the process of conducting 

management evaluations of State agencies, to ensure State 

agency compliance with Program regulations in HHFKA. 

 A proposed rule, Providing Child Nutrition Program Integrity, 

will be published in early FY 2016. This rule will provide 

additional CACFP audit funding, making additional monies 

available to State agencies for Program improvement. 

 Improper Payments in CACFP Centers—this study will provide 

a comprehensive measure of the level of erroneous payments 

(dollars and rates) to child care centers and center sponsors 

participating in CACFP. The estimated completion date for the 

study is late 2019. 

The CACFP Family Day Care Homes Meal Claims Feasibility 

Study will examine ways to measure erroneous payments to 

FDCHs (meal claims portion) participating in CACFP. The 

estimated completion date for the study is late 2017. 

RD Rental 

Assistance 

Program 

(RAP) 

Root Cause #1: Administrative or Process Error Made by Other 

Party. 

 RD State Office staff is required to follow up on each instance 

of error found in the audit and either: (1) obtain appropriate 

supporting documentation for the subsidy amount paid, or 

(2) begin recovery of unauthorized assistance amounts. 

Action completed November 1, 2015. 

 The agency will meet with key industry groups to discuss 

audit findings. Action completed November 1, 2015. 

Root Cause #2: Insufficient Documentation to Determine. 

 RD State Office staff is required to follow up on each instance 

of error found in the audit and either: (1) obtain appropriate 

supporting documentation for the subsidy amount paid, or 

(2) begin recovery of unauthorized assistance amounts. 

Action completed November 1, 2015. 

RMA Federal Crop 

Insurance 

Corporation 

(FCIC) 

Program Fund 

Root Cause #1: Inability to Authenticate Eligibility. 

 RMA issued an Informational Memorandum to the AIPs 

reminding them of the Crop Insurance Handbook language 

that encourages production be measured prior to feeding. 

Action completed November 15, 2015. 
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Agency Program Corrective Actions 

Root Cause #2: Failure to Verify Other Eligibility Data. 

 Develop acreage reporting (June 2016) 

 RMA will review data on the acreage reported to the Farm 

Service Agency (FSA). 

 Cross-check the RMA and FSA databases noting any 

differences in acreage reporting. 

 Check producers with very large differences (greater than 

100 acres) between acreage reported to FSA and what was 

reported to RMA. 

 The list will be provided to the AIPs for further review and 

reconciliation, as necessary. 

 Land Classification (June 2016) 

 RMA will evaluate the feasibility of using data mining 

information on high-risk land locations to create an 

automated edit to identify policies with potential 

misreported risk levels. 

Root Cause #3: Administrative or Process Errors Made by Other 

Party. 

 RMA will use the new National Program Operations Review 

(NPOR) process to evaluate the training material used by the 

AIPs, and to see if it addresses the common errors that were 

identified. RMA is redesigning the NPOR process with an 

expected completion date of June 2016. 

High-Priority Program Discussion. 

The Federal crop insurance program is a self-certification 

program where participants certify as to the correctness of 

information (acres, share, production, etc.) as a basis for 

program participation. This information may be subject to 

further review and verification. Errors and improper payments 

are due to program participants’ (producers, companies, agents, 

and/or loss adjusters) failure to correctly interpret, provide, 

and/or process information in accordance with policy and 

procedures for determining eligibility and payment amounts. 

The strategy for identifying and controlling these routine errors 

includes taking actions to address and correct each one in the 

appropriate manner, utilizing data mining techniques and 

identifying error trends and policy concerns, and providing 

instructions to the approved insurance companies to correct 

them or implement controls to correct them. 
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Agency Program Corrective Actions 

RMA is aware of the self-certification aspect of the program and 

the potential vulnerabilities it presents, but is confident the 

coordination with AIPs and policyholders will limit the risk 

associated with this regulatory barrier. 

RMA’s strategy to recover improper payments is to use data 

mining to identify potential errors, research the discrepancies, 

and collect any amounts due from the insurance companies. 

NRCS Farm Security 

and Rural 

Investment 

Act Programs 

(FSRIP) 

Root Cause #1: Failure to Verify Other Eligibility Data. 

 The deployment of the National Service Delivery Teams, 

specifically the National Accounts Payable Service Team in 

January 2015, implemented standardized procedures for the 

direct entry of easement obligations that included checklists 

and verification of the DUNS/SAM requirements. 

 A standardized procedure for reviewing payments related to 

prior-year contracts was issued. Action was completed in 

September 2015. 

 The Easement Programs Division (EPD) reminded program 

staff of the SAM registration requirements, with an emphasis 

on restoration agreements. Action was completed on 

September 30, 2015. 

 ProTracts will check SAM.gov registrations automatically at 

obligation and payment. Proposed completion date is 

December 31, 2015. 

Root Cause #2: Error Made by State Agency. 

 Nationwide implementation of the Enhanced Internal 

Controls Group took place in January 2015. The group was 

formed primarily to address improper payments, specifically, 

easement value, landowner eligibility, agreement validity, 

easement obligation, and payment documentation. As a new 

process was implemented nationally, EPD initiated bi-weekly 

Q&A sessions to discuss the enhanced internal controls 

process, checklists, review timing, and National Easement 

Staging Tool (NEST) functions. 

 EPD holds a monthly online conference for State easement 

coordinators and program managers that conduct the 1st and 

2

nd level reviews. The Internal Controls Team has also 

implemented bi-weekly Q&A sessions that began in 

January 2015. 
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Agency Program Corrective Actions 

 EPD conducted training on reducing improper payments. 

Action was completed in September 2015. 

 EPD conducted nationwide training and teleconferences. 

Documenting ownership length was covered as a specific 

topic. Action was completed in October 2015. 

FSA, CCC Hurricane 

Sandy—

Emergency 

Conservation 

Program 

Root Cause #1: Administrative or Process Error Made Federal 

Agency. 

 Individual counsel was provided via telephone by the 

Program Manager to the State office identified as causing 

improper payments. Action was completed in April 2015. 

 FSA plans to conduct national conservation program training 

in late 2015. Topics will include ECP, EFRP, and the 

importance of issuing proper payments. 

FSA, CCC Hurricane 

Sandy—

Emergency 

Forest 

Restoration 

Program 

Root Cause #1: Administrative or Process Error Made Federal 

Agency. 

 Individual counsel was provided via telephone by the 

Program Manager to the State office identified as causing 

improper payments. Action was completed in April 2015. 

 FSA plans to conduct national conservation program training 

in late 2015. Topics will include ECP, EFRP, and the 

importance of issuing proper payments. 

FS Hurricane 

Sandy—

Emergency 

Forest 

Restoration 

Program 

No improper payments were discovered. 

FS Hurricane 

Sandy—

Capital 

Improvement 

and 

Maintenance 

Root Cause # 1: Administrative or Process Error Made by Other 

Party; Cooperator failed to properly charge the Forest Service 

for the appropriate amount. Cooperator failed to understand 

the requirements of transparent corrections when 

overcharging the Forest Service on an invoice. 

 Recommended an adjustment to move the expenditure 

charged on the Hurricane Sandy Fund CMDF to the proper 

fund for Trails Maintenance CMTL. An adjustment was 

completed by the agency for the $8,278.00 expenditure 
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Agency Program Corrective Actions 

originally billed to the Hurricane Sandy job code. Completed 

on June 30, 2015. 

 Washington Office Acquisition Management will release a 

letter reminding Grants and Agreements Specialists of their 

responsibility to properly review invoices. To be completed 

by December 2015. 

 Audit and Assurance will conduct a training in February 2016 

to reiterate the roles and responsibilities of the FS for grants 

and agreements management and recipients. 

NRCS Hurricane 

Sandy—

Emergency 

Watershed 

Protection 

Program 

No improper payments were discovered. 

Internal Control Over Improper Payments 

As shown in Table 15 below, USDA programs have implemented internal controls to prevent 

improper payments, but there is room for improvement. USDA programs are enhancing 

communication of updated policies and guidance to the field offices, having managers build an 

atmosphere in which reducing improper payments is a top priority, and establishing 

accountability through performance standards, examining root causes of error, developing 

appropriate corrective actions, and engaging critical stakeholders through communication and 

educational efforts. 

USDA issued guidance in May, 2015 requiring justifications for three or four ratings. The 

guidance also required programs to propose new internal controls to resolve the deficiency for all 

ratings of one or two. 
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Table 15: Status of Internal Controls 

Program 

Internal Control Standards 

Control 

Environment 

Risk 

Assessment 

Control 

Activities 

Information 

and 

Communication 

Monitoring 

Supplemental Nutrition Assistance 

Program (SNAP), FNS 3 3 3 3 3 

National School Lunch Program 

(NSLP), FNS 3 3 3 3 3 

School Breakfast Program (SBP), FNS 3 3 3 3 3 

Special Supplemental Nutrition 

Program for Women, Infants, and 

Children (WIC), FNS 

3 3 3 3 3 

Loan Deficiency Payments (LDP), 

FSA/CCC 4 3 3 4 4 

Livestock Forage Disaster Program 

(LFP), FSA/CCC 4 3 3 4 4 

Livestock Indemnity Program (LIP), 

FSA/CCC 2 3 3 4 3 

Supplemental Revenue Assistance 

Payments Program (SURE), FSA/CCC 3 2 3 3 3 

Noninsured Crop Disaster Assistance 

Program (NAP), FSA/CCC 4 3 3 4 4 

Child and Adult Care Food Program 

(CACFP), FNS 3 3 3 3 3 

Rental Assistance Program (RAP), RD 3 2 3 3 3 

Federal Crop Insurance Corporation 

(FCIC) Program Fund, RMA 3 3 3 2 2 

Farm Security and Rural Investment 

Act Programs (FSRIP), NRCS 3 3 2 3 3 
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Program 

Internal Control Standards 

Control 

Environment 

Risk 

Assessment 

Control 

Activities 

Information 

and 

Communication 

Monitoring 

Hurricane Sandy—Emergency 

Conservation Program, FSA/CCC 4 3 3 4 4 

Hurricane Sandy—Emergency Forest 

Restoration Program, FSA/CCC 4 3 3 4 4 

Hurricane Sandy—Emergency Forest 

Restoration Program, FS 3 3 3 3 3 

Hurricane Sandy—Capital 

Improvement and Maintenance, FS 3 3 3 3 3 

Hurricane Sandy—Emergency 

Watershed Protection Program, 

NRCS 

3 3 3 3 3 

Legend: 

4 = Sufficient controls are in place to prevent improper payments. 

3 = Controls are in place to prevent improper payments, but there is room for improvement. 

2 = Minimal controls are in place to prevent improper payments. 

1 = Controls are not in place to prevent improper payments. 

Accountability 

The following steps were taken to ensure that agency managers are held accountable for reducing 

and recovering improper payments: 

FOOD AND NUTRITION SERVICE (FNS) 

1. FNS has established corporate priorities to improve stewardship of Federal funds and to 

improve program management. Within these priorities are specific goals applicable to 

programs at high risk for erroneous payments. The goal for SNAP, NSLP, SBP, WIC, and 

CACFP is to continue management improvements. The agency goals and priorities are 

incorporated into each manager’s performance plan. Standards for meeting reduction 

targets and establishing and maintaining sufficient internal controls have been incorporated 

into each manager’s plan since 2005. 

2. In NSLP and SBP, USDA has a strategic objective to improve nutrition assistance program 

management that is managed by FNS, including a measure to improve the accuracy of 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

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school administrative processes that certify children for school meals. As part of its actions 

to advance this objective, FNS sets annual priority goals and initiatives, including specific 

goals applicable to programs at high risk for erroneous payments. These agency goals and 

priorities are incorporated into each manager’s performance plan. Standards for meeting 

reduction targets and establishing and maintaining sufficient internal controls have been 

incorporated into each manager’s plan since 2005. 

3. FNS has a corporate priority to maintain a high standard of integrity in SNAP. This priority 

includes specific goals to support achievement of error rate goals, to use multiple strategies 

to support payment accuracy even as program participation increases, and to participate 

actively in efforts related to the President’s Executive Order on Improper Payments. The 

agency goals and priorities are incorporated into each manager’s performance plan. 

Standards for meeting reduction targets and establishing and maintaining sufficient internal 

controls have been incorporated into each manager’s plan since 2005. 

FARM SERVICE AGENCY (FSA) 

1. FSA has a performance management program in place to improve individual and 

organizational effectiveness in accomplishing the agency's mission and goals. This 

program provides for improper payments to be included in the State Executive Director 

(SED) Performance Plan, Element 5, titled “Program Management.” National, State, and 

county office employees are also held accountable. 

2. The Deputy Administrator of Field Operations (DAFO) facilitates meetings with the 

program areas to discuss any additional action necessary for senior management to address 

accountability. 

3. FSA provides training on improper payments to field personnel and educates them on the 

importance of control procedures as well as the potential risks of noncompliance. 

4. Compliance reviews and spot-checks are required to ensure the accuracy of payments and 

integrity of FSA programs. Annually, based on a statistical sampling method, producers 

nationwide are selected for compliance review and spot-check. 

RURAL DEVELOPMENT (RD) 

1. State Office Directors, staff managing RAP, and program managers’ performance plans 

include appropriate performance elements regarding the Improper Payments Information 

Act of 2002 (IPIA) and recovery of unauthorized assistance. 

2. The Deputy Administrator of Multi-Family Housing Programs continues to facilitate 

monthly meetings with State and area office program areas to discuss action necessary to 

address accountability and program administration with regard to improper payments and 

unauthorized assistance. 
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3. The national staff performance plans contain position-corresponding mission-area strategic 

goals and priorities, and are incorporated into each manager’s performance plan. Field 

offices must conduct supervisory visits on Section 515 and Section 514 properties every 

5 years. These visits include the review of tenant files to verify income and calculation of 

qualified rental assistance. In addition, RD headquarters staff conducts a Management 

Control Review every 5 years for RAP. 

RISK MANAGEMENT AGENCY (RMA) 

1. RMA senior accountable officials’ annual performance plans are tied to Goal #4 of the 

Strategic Plan—“Safeguarding the integrity of the FCIP.” The performance measure is to 

reduce the improper payment rate from 5.23% in 2013 to 4.9% by 2018. 

2. RMA incorporated standards in FY 2015 annual performance plans to ensure compliance 

personnel conduct IPERA reviews to measure the FCIP improper payment error rate and 

perform data mining reviews to identify, reduce, and collect improper payments. 

3. RMA also incorporated standards in the performance plans to promote a strong control 

environment over the prevention, detection, and recovery of improper payments to make 

certain compliance personnel do the following: 

a. Conduct national program operation reviews to determine whether insurance 

companies are complying with their insurance agreements; 

b. Issue findings and final determination reports, and provide sanctions to reinsured 

companies based on evidence of not adhering to policy, procedures, agreements, 

contracts, and ethical insurance principles; and 

c. Follow up on recoveries of monetary findings in a timely manner. 

NATURAL RESOURCES CONSERVATION SERVICE (NRCS) 

Since FY 2013, State Conservationists’ performance plans include specific language regarding 

the prevention, identification, and recovery of improper payments. 
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FOREST SERVICE (FS) 

Management will be made aware of improper payments, and will be held accountable for 

reduction and recoveries of improper payments. FS Handbook 6500-2012-1, Chapter 6540.44 

directs managers and payment staff to manage and monitor payment policies in accordance with 

direction issued by the Chief Financial Officer, and to provide an appropriate control 

environment that prevents, detects, and recovers improper payments. The Forest Service utilizes 

IPIA statistical testing and the Quarterly-High Dollar Report to detect improper payments. These 

analytics assist in identifying the number and dollar value of improper payments that have been 

identified and recovered. In addition, dissemination of audit findings and identification of root 

causes ensure management’s awareness. Quarterly monitoring and corrective actions will 

improve accountability, identification, and resolution of improper payments. 

AGENCY INFORMATION SYSTEMS AND OTHER INFRASTRUCTURE 

FNS 

1. CACFP does not have an infrastructure or methods for producing yearly estimates of 

improper payment rates and dollar values. FNS is developing measurement methodologies 

for one component of the program that will yield measurement of risk of improper 

payments for that component. 

CACFP payments and claim information are transferred between FNS, State agencies, 

program sponsors and program sites; each transaction represents a risk for improper 

payment. Because requirements vary significantly for each different type of program 

sponsor and site, a full and rigorous assessment of the rate of improper payments is 

extremely complex. 

FNS did not have the resources to develop a measurement approach for erroneous 

payments in CACFP, and therefore, submitted their initial request for resources in the 

FY 2006 budget. The original plan was to develop a program-wide study to examine 

reimbursements for meals served and develop program error measurements that complied 

with the requirements of the Improper Payments Information Act of 2002 (IPIA). Because 

of the complexities of the program, FNS estimated that it would cost $20 million to 

measure improper payments at the precision required by IPIA. Although the FY 2006 

budget request included funds designated for the nationally representative CACFP 

erroneous payments study, funds were not provided by Congress. 

FNS awarded a contract in September 2014 to conduct a new CACFP study to look at 

alternative methodologies for developing a reliable measurement for the meal claims 

component. This new study was completed September 30, 2016. 

2. The NSLP does not have an administrative infrastructure for producing yearly estimates of 

improper payment rates and dollar values. FNS uses its periodic Access, Participation, 

Eligibility, and Certification (APEC) study to provide a baseline error rate estimate and an 
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aging methodology to update this estimate annually using program administrative data and 

macroeconomic indicators. FNS has worked with OMB to provide an annual estimate 

using an approved methodology to estimate payment errors. The continuance of the APEC 

study will enable FNS to estimate and measure changes in erroneous payments over time 

and would help inform FNS, Congress, the States, and advocacy partners for the 

development of additional guidance, training, and policy options. 

3. The FNS FY 2016 Budget requests an increase in funding for the following program 

integrity line items to establish and maintain effective internal controls to reduce improper 

payments as follows: 

a. Training and Technical Assistance 

b. CN Payment Accuracy 

CN Training and Technical Assistance—an increase of $12.1 million was requested 

($8,137,000 enacted for FY 2015). Effective and continual training and technical assistance 

are necessary to help States properly administer the Child Nutrition program to ensure that 

States are equipped to identify and prevent fraud and abuse. This is especially critical 

because of the changes made to these vital programs by the Healthy, Hunger-Free Kids Act 

of 2010, which reauthorized these programs and instituted new requirements on State 

agencies. This request reflects an increase in Federal activity associated with this project, 

including implementation of the new requirements. 

CN Payment Accuracy—an increase of $658,000 was requested ($9,904 million enacted 

for FY 2015). Robust Federal oversight, monitoring, and technical assistance are essential 

to the identification, prevention, and resolution of erroneous payments. This request 

supports FNS’ efforts to reduce erroneous payments through training, technical assistance, 

and oversight. An increase of $500,000 is related to an Enhanced State/Local Reporting 

proposal. 

FNS’ FY 2016 Budget reflects the same level of funding as in previous years to continue 

effective internal control measures to promote program integrity for the Coordinated 

Review Effort. 

Coordinated Review Effort—$10 million was provided for training and technical assistance 

for State agencies responsible for reviewing local school food authorities that participate in 

the school meal programs. Local administrative reviews help ensure that school children 

are offered meals that meet regulatory standards and that the financial claims associated 

with those meals are appropriate. 

FSA 

During FY 2014, FSA was under a hiring freeze in response to agency funding and budget 

limitations. The outside hiring restrictions resulted in staffing reductions in FSA State- and 

county-level offices. The staff reductions with no corresponding reduction in FSA program 

workload and servicing responsibilities could have contributed to increased improper payments. 
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As new staff was able to be hired after the hiring freeze was lifted, required training in program 

responsibilities and procedures was provided to new employees; however, full performance of 

new employees takes time, and the lack of full program knowledge may have also contributed to 

improper payments. 

While FSA continues to modernize and enhance its IT systems, the transition from the legacy 

systems to the Web-based platform has been challenging. With the rapid implementation of the 

2014 Farm Bill programs and the numerous organizational changes necessary to adopt new and 

modernized technologies, FSA’s ability to integrate new business requirements and modernized 

IT was limited. However, significant improvements are being made in IT and business 

operations and processes, as well as the stabilization of new and enhanced systems and IT 

platforms supporting the delivery of farm programs. The ability to continue making investments 

in upgrading systems is a key factor that will provide for more efficient business tools to support 

FSA employees in their daily operations, i.e. improving the accuracy of customer records and 

reducing improper payments through automated validation. 

RD 

Internal Controls 

RD has internal controls and implements them through several avenues. 

1. Multi-Family Housing (MFH) field staff in RD State and area offices performs supervisory 

visits triennially at each multi-family property. The supervisory visit consists of reviewing 

the practices and performance of property managers, including intake applications, 

calculation of subsidy, proper application of deductions from tenant income, and review of 

documentation to support the tenant’s income claims. Property managers are responsible 

for obtaining and verifying this information. The MFH staff conducts a review of randomly 

selected tenant files to check for documentation; staff also conducts a mini-IPIA audit of 

those selected files to identify any improper payment, and to ensure compliance with the 

collection of unauthorized assistance. 

2. RD ensures quality-control reviews of all mandated reporting. Additionally, RD ensures 

that the reviews are completed by an office separate from the processing and reporting 

office. The RD Office of the Chief Financial Officer (CFO), National Financial and 

Accounting Operations Center (NFAOC), and Internal Control and Initiatives Staff (ICIS) 

complete all quality-control reviews. 

a. Quarterly—Improper Payment Recoveries Report 

i. The NFAOC cash reporting and servicing staff is responsible for RD collection 

processing. RD improper payment recoveries are deposited with the 

U.S. Department of the Treasury and agency collection records are reconciled 

daily. Treasury deposit files are loaded to the automated accounting system that 

stores the Recovery Audit (RA) improper payment receivables, and recoveries are 

posted daily. NFAOC executes the quarterly Improper Payment Recovery Report 

from the automated accounting system. The NFAOC internal control staff 

provides quality control reviews and requests signoff from the RD CFO. 
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b. Quarterly—High-Dollar Overpayment Report 

i. Criteria—FY 2015—increased to $25,000 for any individual reporting. 

ii. Completed by National Office—based on information from the Multi-Family 

Information System (MFIS). 

The NFAOC internal control staff provides quality-control reviews and requests 

signoff from the RD CFO. 

c. Annually—Conduct Statistical Sampling 

i. RD’s Centralized Servicing Center (which handles MFH payments) reviews the 

documentation. 

ii. National Office prepares the report and identifies corrective actions. 

iii. The NFAOC internal control staff provides quality-control reviews and requests 

signoff from the RD CFO. 

d. FY 2015—First received access to Treasury’s Do Not Pay Portal 

i. Used the portal to review tenants selected for the annual statistical sampling (IPIA 

audit). 

3. The Rental Assistance Program payments are managed by NFAOC, through an electronic 

portal used by borrowers and property managers. Borrowers and managers are required to 

provide monthly information on tenant incomes and subsidy calculations, and to advise RD 

if tenants move in or out. The automated system checks for changes and, if all appropriate 

changes have been submitted, the payment is authorized directly to NFAOC. If appropriate 

changes have not been submitted, the Centralized Servicing Center, which provides cash 

management services to MFH, reviews the documentation and contacts the 

borrower/manager for corrections before a payment will be authorized. This automated 

process handles about 95 percent of all payments, while the human intervention is minimal 

and is only required when the system flags a submission. 

4. The Rental Assistance Program staff will partner with the Treasury Department in late 

FY 2015 to educate Treasury staff about the Rental Assistance program and to engage in 

group discussions about process improvements. 

Human Capital 

MFH has about 250 field offices around the country that are responsible for monitoring borrower 

and management agent performance and compliance with loan requirements. MFH has staff 

members who are assigned a portfolio of multiple States. Staff works with a program director 

that is responsible for overseeing and monitoring performance of area loan specialists at the State 

office. Loan specialists work one-on-one with borrowers and management agents to ensure they 

understand the program requirements. If unauthorized assistance is detected, on the part of either 

the manager or the tenant, loan specialists follow established procedure to recover funds. The 

NFAOC servicing area has about 3 staff members who establish and monitor receivables and 
S E C T I O N I I I | O T H E R I N F O R M A T I O N 

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provide support to field and national offices, and 2 staff members who provide quality-control 

reviews. 

Information Systems 

Information systems currently in use by MFH include the Multi-Family Information System 

(MFIS) database, the Automated Multi-Family Accounting System (AMAS), the Management 

Interactive Network Connection (MINC), and the Commercial Loan Servicing System (CLSS). 

MFIS houses all of the multi-family property and tenant data; AMAS maintains all accounting 

records of financial transactions; MINC is the submission portal used by borrowers and 

management agents to provide MFH with monthly updates on tenancy and financial reporting; 

and CLSS is the automated accounting system for processing financial transactions and servicing 

loans, grants, and miscellaneous receivables such as improper payment receivables. MFH works 

closely with the IT staff and NFAOC staff to upgrade and improve the MFIS, AMAS, and CLSS 

systems. Field staff also use these systems to monitor property performance and use the Change 

Control Board (CCB), which is the formal mechanism to suggest system changes. All system 

upgrades are approved by the CCB; after testing, but before production, changes must be 

approved by users in order to ensure proper functionality. 

In FY 2015, all RA improper payment receivable accounts were converted to the CLSS 

automated accounting system. CLSS provides automated financial transactions, a wide range of 

servicing abilities, automated system edits, and reporting. Additionally, the CLSS system 

provides for delinquency tracking and Treasury debt reporting. Monthly, the NFAOC staff 

monitor receivable balances and send delinquent accounts to Treasury to begin debt collection 

procedures. 

RMA 

1. Due to the high-risk nature of RMA crop insurance programs under IPERIA, ensuring that 

improper payment rates are lowered is a high priority. Additional information and analysis 

on the root causes of improper payments will help RMA target effective corrective actions 

and implement preventive measures. RMA is collecting this information to develop trends 

and design potential cost-effective preventive controls by the end of FY 2016. 

2. Effective detection techniques to identify and recover improper payments are also 

important. RMA performs data mining activities to deter and identify improper payments. 

RMA will continue to use data mining to target examination of payments that can be 

recaptured, and will explore other ways to expand these reviews. 

3. RMA performs the National Program Operations Review (NPOR) as one of its primary 

tools for assessing AIP’s compliance with all crop insurance program requirements. RMA 

contracted with a business consultant to assist in the redesign of RMA’s AIP operations 

reviews to more effectively evaluate the AIP’s internal controls and identify and address 

program vulnerabilities. The contract will end in May 2016. Before completion of the 

contract, the contractor will assist RMA in the development of standardized guidelines that 

the Regional Compliance Offices (RCOs) will use to conduct operations reviews 
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consistently across the regions. The consultant will also provide RMA with an updated 

Compliance Manual. 

4. The 2016 Budget includes a request for $2.3 million in salaries and expenses to enhance 

RMA’s compliance efforts, with an emphasis on testing and reporting improper payments, 

in response to recent Office of Inspector General and Government Accountability Office 

recommendations. The overall objective of the additional funding is to reduce RMA’s 

improper payment rate through enhanced validation and improved process (such as error 

rate sampling) and oversight. 

NRCS 

Manual and information system internal control changes have been identified; most of them will 

be implemented by the end of 2015. In addition, NRCS is in the process of reorganizing its 

administrative functions, standardizing processes, and adding staff in accounting and other 

administrative functions. This is a multi-year effort that began in FY 2013 and will continue for a 

number of years. 

FS 

The following needed improvements have been identified: 

Capital Improvement and Maintenance (CMDF) 

1. Recommended an adjustment to move the expenditure charged on the Hurricane Sandy 

Fund CMDF to the proper fund for Trails Maintenance CMTL. An adjustment was 

completed by the agency for the $8,278.00 expenditure originally billed to the Hurricane 

Sandy job code. Completed on June 30, 2015. 

2. Washington Office Acquisition Management will release a letter reminding Grants and 

Agreements Specialists of their responsibility to properly review invoices. To be completed 

by December 2015. 

3. Audit and Assurance will conduct a training in February 2016 to reiterate the roles and 

responsibilities of the FS for grants and agreement management and recipients. 
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Barriers

FNS 

Federal nutrition assistance was not designed with accuracy as its primary purpose; 

accountability is often a secondary consideration to other concerns in managing the program. 

Some policy choices, many embodied in law, greatly impact the risk of improper payments and 

the ability to mitigate them. Congress, through legislation, defines the limits of authority for 

accountability. 

In many instances the mandated goal of providing easy access to benefits must be balanced 

against the goal of reducing improper and erroneous payments. Provisions that improve access 

can increase the risk of improper payments. While the risks involved vary by program, some 

general characterizations can be made: 

Program administration is highly decentralized and can involve a myriad of governmental and 

non-governmental organizations. For example, there are approximately 58,403 child and adult 

care centers, 824 FDCH-sponsoring organizations, and approximately 117,621 FDCH providers 

through which benefits are distributed. Many of these simply do not have the capacity to develop 

robust accountability processes, which puts a special burden on Federal and State oversight and 

technical assistance systems. 

States and localities tend to focus on managing local funds, rather than Federal funds. One 

hundred percent of benefit costs and a significant portion of administrative expenses incurred by 

State agencies are funded by Federal appropriations. Although this distribution of costs has 

contributed to the strength of the nutrition safety net with national eligibility standards and 

program access, States and localities may reasonably be expected to put a higher priority on 

managing programs funded with local revenues than those subsidized by the Federal 

government. 

Proper implementation of nutrition assistance programs requires a high degree of accuracy. This 

accuracy helps to ensure that benefits are targeted to those most in need, that there is uniformity 

of access across the country, and that benefits can only be used for food. Such exacting standards 

do, however, create a significant number of opportunities for error. 

Recent Child Nutrition reauthorization legislation, while it did include some changes requested 

by the Administration to improve accountability, limited USDA’s ability to act in this area 

because of concerns about potential barriers to participation. In many instances, the mandated 

goal of providing easy access to benefits must be balanced against the goal of reducing improper 

and erroneous payments. In addition, program administration is highly decentralized; there are

approximately 100,000 school meals locations at which benefits are provided. Many of these 

benefit providers simply do not have the capacity to develop robust accountability processes. For 

these reasons, any approach to reducing school meals improper payments must: 
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1. Improve accuracy without compromising access for low-income families. A process that 

keeps eligible children from participating would undermine the program; 

2. Not unduly increase burden on schools. Many schools consider the program burdensome 

now. Adding burden could discourage schools from participating; 

3. Be cost effective. Improving accuracy is potentially resource-intensive, and policymakers 

must not create a process that increases net program costs; and 

4. Answer the needs of other users of program data, which often use certification data to 

distribute millions of dollars in other kinds of benefits to schools. As these needs contribute 

to the problem, a solution may also require new commitments from those users. 

In SNAP, the 2002 Farm Bill restricted the liability levels States can be sanctioned due to high 

error rates and also restricted the amount of bonus funding available to States that do a good job 

reducing and maintaining a low error rate. The goal of providing easy access to benefits must be 

balanced with the goal of reducing improper and erroneous payments. 

FSA 

A key barrier that limits FSA's ability to recover improper payments is the Department of 

Agriculture Reorganization Act of 1994, Section 281. This legislation provides that ""Each 

decision of a State, County, or area committee or an employee of such a committee, made in 

good faith in the absence of misrepresentation, false statement, fraud, or willful misconduct shall 

be final not later than 90 calendar days after the date of filing of the application for benefits, 

[and] ... no action may be taken ... to recover amounts found to have been disbursed as a result of 

the decision in error unless the participant had reason to believe that the decision was erroneous." 

This statute is commonly referred to as the Finality Rule. 

RD 

The agency does not have the statutory authority similar to the U.S. Department of Housing and 

Urban Development (HUD) to gain access to the U.S. Department of Health and Human 

Services (HHS) Directory of New Hires, IRS, SSI, or DOL data to share with field offices and 

management agents. Having these resources would better enable borrowers and management 

agents to confirm and verify income information from tenants, on whose behalf Rental 

Assistance subsidy is provided. The Department submitted the legislation to seek access to the 

New Hires database as part of the FY 2015 budget submission. 

RMA 

RMA is not subject to any critical statutory or regulatory barriers to reducing improper 

payments. 
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NRCS 

Currently, NRCS is working with FSA to implement a real-time adjusted gross income 

verification process. This will allow NRCS to verify whether a producer meets the program’s

Adjusted Gross Income requirements prior to obligating a contract. 

Furthermore, NRCS’ improper payment issues due to entities not registering in SAM.gov should 

be greatly reduced based on new functionality in ProTracts which allows it to communicate 

directly with SAM.gov. With this change, NRCS is able to use this data source during the preaward and pre-payment processes to help reduce improper payments. 

A majority of the errors identified in the annual testing are related to the failure of participants to 

register in SAM.gov, as required, prior to receiving payment. 

FS 

FS has not identified any statutory or regulatory barriers that would limit corrective actions in 

reducing improper payments. 

Recapture of Improper Payments Reporting 

USDA recaptured approximately $2 million from its recovery audit contractors, and 

$382 million outside of payment recapture audits during FY 2015. Detailed results are shown in 

Table 16 USDA conducted limited-scope pilot payment recapture audits, as recommended by 

OMB in Circular A-123 Appendix C. These pilot payment recapture audits are complete with the 

following results: 

1. USDA recovered and distributed $2.6 million as shown in Table 17; 

2. Based on the success of the Supplier Credit Recovery Audit contract, USDA expanded the 

contract to include commodity contracts in addition to the administrative contracts it was 

already auditing; and 

3. In FY 2016, the Department will require all programs over $1 million in annual 

expenditures to perform recovery auditing, or provide justification that recovery auditing 

would not be cost effective. 

Of USDA's total of 148 programs and activities evaluated for improper payments in FY 2015, 

128 of them had over $1 million in annual expenditures or were conducting recovery auditing. 

The Rental Assistance Program conducted program recovery auditing through a recovery audit 

contract. Fifty-six programs participated in the Supplier Credit Recovery audit. A detailed list of 

programs by category follows. 
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SUPPLIER CREDIT RECOVERY AUDIT PROGRAMS 

1. AMS Salaries and Expenses 

2. APHIS Salaries and Expenses 

3. CCC Export 416 Ocean Transportation 

4. CCC Food for Progress Program 

5. CR Salaries and Expenses 

6. DA Agriculture Buildings and Facilities 

7. DA Biobased Markets Program 

8. DA Hazardous Materials Management 

9. FAS McGovern-Dole Food for Education Grants 

10. FFAS Salaries and Expenses 

11. FNS Child and Adult Care Food Program 

12. FNS Commodity Supplement Food Program 

13. FNS The Emergency Food Assistance Program 

14. FNS Food Distribution Program on Indian Reservations 

15. FNS National School Lunch Program 

16. FNS Program Administration 

17. FNS Summer Food Service Program 

18. Food Safety and Inspection Salaries and Expenses 

19. FSA Public Law 480 

20. FS Capital Improvement and Maintenance 

21. FS Forest and Rangeland Research 

22. FS Forest Service Permanent Appropriations 

23. FS Forest Service Trust Funds 

24. FS Land Acquisition 

25. FS Management of National Forest Lands for Subsistence Uses 

26. FS National Forest System 

27. FS Range Betterment Fund 

28. FS Salaries and Expenses 

29. FS SmartPay 
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30. FS State and Private Forestry 

31. FS Stewardship Contracting Product Sales 

32. FS Wildland Fire Management 

33. FS Wildland Fire Management—Suppression 

34. FS Working Capital Fund 

35. Grain Inspection Packers and Stockyards Administration 

36. NAD Salaries and Expenses 

37. NRCS Conservation Technical Assistance (non-Farm Bill) 

38. NRCS Farm Bill Financial Assistance 

39. NRCS Farm Bill Technical Assistance 

40. NRCS Plant Materials Centers 

41. NRCS Salaries and Expenses 

42. NRCS Snow Survey and Water Supply Forecasting 

43. NRCS Soil Surveys 

44. NRCS Voluntary Public Access and Habitat Incentive Program 

45. NRCS Watershed Programs 

46. OBPA Salaries and Expenses 

47. OCE Salaries and Expenses 

48. OCFO Salaries and Expenses 

49. OCIO Salaries and Expenses 

50. OGC Salaries and Expenses 

51. OIG Salaries and Expenses 

52. OSEC Salaries and Expenses 

53. RD Salaries and Expenses 

54. RD Voucher Program (Section 542) 

55. RD Water and Waste Disposal Systems for Rural Communities-Loans 

56. REE Salaries and Expenses 
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PROGRAMS AND ACTIVITIES OVER ONE MILLION NOT CURRENTLY CONDUCTING 

RECOVERY AUDITS 

1. AMS Commodity Purchase Programs 

2. AMS Grants Programs 

3. APHIS Buildings and Facilities 

4. APHIS Cooperative Agreements 

5. APHIS Trust Funds 

6. ARS Buildings and Facilities 

7. CCC Administrative Contracts 

8. CCC Biomass Crop Assistance Program 

9. CCC Conservation Reserve Program 

10. CCC Dairy Indemnity 

11. CCC Emergency Assistance for Livestock, Honeybees, and Farm Raised Fish Program 

12. CCC Emergency Forestry Conservation Reserve 

13. CCC Export Guarantee Program Level 

14. CCC Farm Storage Facility Loan 

15. CCC Hazardous Waste Activities 

16. CCC Livestock Forage Disaster Program 

17. CCC Livestock Indemnity Program 

18. CCC Loan Deficiency Payments 

19. CCC Marketing Assistance Loan Program 

20. CCC Marketing Programs 

21. CCC Noninsured Assistance Program 

22. CCC Supplemental Revenue Assistance Payments Program 

23. CCC Tobacco Transition Payment Program 

24. CCC Tree Assistance Program 

25. CCC Upland Cotton Economic Adjustment Assistance Program 

26. FNS American Samoa 

27. FNS Commonwealth of the Northern Mariana Islands 

28. FNS Farmers Market Nutrition Program 
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29. FNS Nutrition Assistance—Puerto Rico 

30. FNS School Breakfast Program 

31. FNS Senior Farmers Market Nutrition Program 

32. FNS Special Milk Program 

33. FNS Supplemental Nutrition Assistance Program 

34. FNS Women, Infants, and Children 

35. FSA Agricultural Credit Insurance Fund—Program Account 

36. FSA Hurricane Sandy—Emergency Conservation Program 

37. FSA State Mediation Grants 

38. FSIS Cooperative State Food Safety and Inspection 

39. NIFA Community Foods Project 

40. NIFA Extension Activities 

41. NIFA Integrated Activities 

42. NIFA Research and Education Activities 

43. OAO Outreach for Socially Disadvantaged Farmers 

44. RD Broadband Telecom Loans—Treasury Rate 

45. RD Community Connect Grants 

46. RD Community Program Grants 

47. RD Congressional Earmarked Funds 

48. RD Direct Community Facility Loans 

49. RD Direct Single Family Housing 

50. RD Electric Loan Programs (CFDA 10.850)—FFB Guaranteed 

51. RD Guaranteed Community Facility Loans 

52. RD Guaranteed Multi-Family Housing Loans (Section 538 Loans) 

53. RD Guaranteed Single Family Housing Loans 

54. RD Housing Loans and Grants—Other 

55. RD MFH Preservation and Revitalization Demo Program: 514/516 Loans/Grants and 

515 Loans 

56. RD Public Television Digital Transition Grants 

57. RD RBS Grant Programs 

58. RD RBS Guaranteed Loan Programs
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59. RD RBS Payment Programs 

60. RD RBS Relending Programs 

61. RD Rural Community Development Initiative Grants 

62. RD Rural Rental Housing Loans (Section 515 Direct Rural Rental Housing Loans) 

63. RD Rural Telecommunications Hardship Loans—Direct Telecom Loans 

64. RD Rural Telecommunications Loans—FFB Telecom Loans 

65. RD Rural Telecommunications Loans—Treasury Telecom Loans 

66. RD Rural Utilities Electric Program—Direct 5% 

67. RD RUS Grants—Other Electric—Telecom—WEP 

68. RD Water and Waste Disposal Loans and Grants Section 306C 

69. RD Water and Waste Disposal Systems for Rural Communities—Grants 

70. RD Water and Waste Guaranteed Loans 

71. RMA Federal Crop Insurance Corporation Program Fund 

USDA implemented Treasury’s Web-based Invoice Processing Platform in FY 2015. This new 

invoicing process should reduce the duplicate payments and unused credits discovered by 

USDA’s Supplier Credit Recovery Audit contract. 
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Table 16: Improper Payment Recaptures With and Without Audit Programs ($ in millions) 

Overpayments Recaptured Through Payment Recapture Audits 

Program or Activity 

Contracts Benefits 

Overpayments 

Recaptured Outside of 

Payment Recapture 

Audits 

Amount Identified Amount Recovered CY Recapture Amount CY +1 Recapture Rate Target CY +2 Recapture Rate Target Amount Identified Amount Recovered CY Recapture Amount CY +1 Recapture Rate Target CY +2 Recapture Rate Target Amount Identified Amount Recovered 

Rental Assistance Program $0.00 $0.00 $0.00 0% 0% $0.00 $0.00 100% 100% 100% $0.00 $0.00 

Supplier Credit Recovery 

Audit Program $2.05 $2.05 100% 100% 100% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 

Programs Not Currently 

Conducting Recovery Audits $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 

Overpayments Recaptured 

Outside of Payment 

Recapture Audits $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $428.36 $382.32 

USDA Total $2.05 $2.05 100% 100% 100% $0.00 $0.00 $0.00 100% 100% $428.36 $382.32 
FISCAL YEAR 2015 AGENCY FINANCIAL REPORT 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 7 3 

Table 17: Disposition of Funds Recaptured Through Payment Recapture Audit 

Program or 

Activity 

Amount 

Recovered 

Type of 

Payment 

Agency 

Expenses 

to 

Administer 

the 

Program 

Payment 

Recapture 

Auditor 

Fees 

Financial 

Management 

Improvement 

Activities 

Original 

Purpose 

Office of 

Inspector 

General 

Returned 

to 

Treasury 

Other* 

Rental Assistance 

Program $0.00 Benefit $0.00 $0.01 $0.00 $0.00 $0.00 $0.00 $0.00 

Supplier Credit 

Recovery Audit 

Program* 

$2.05 Contract $0.00 $0.57 $0.28 $0.81 $0.06 $0.28 $0.05 

Programs Not 

Currently 

Conducting 

Recovery Audits 

$0.00 N/A $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 

Overpayments 

Recaptured 

Outside of 

Payment 

Recapture Audits 

$0.00 N/A $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 

USDA Total $2.05 $0.00 $0.58 $0.28 $0.81 $0.06 $0.28 $0.05 

*The Other amounts are funds that have been recovered but have not yet completed the disposition process. 
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Table 18: Aging of Outstanding Overpayments Identified in the Payment Recapture Audits 

($ in millions) 

Program or 

Activity 

Type of 

Payment 

Amount 

Outstanding 

(0– 6 months) 

Amount 

Outstanding 

(6 months to 

1 year) 

Amount 

Outstanding 

(over 1 

year) 

Amount 

Determined 

to Not Be 

Collectable 

Rental Assistance 

Program Benefit $0.00 $0.00 $0.039 $0.00 

Supplier Credit 

Recovery Audit 

Program* 

Contract $0.00 $0.00 $0.00 $0.00 

Programs Not 

Currently 

Conducting 

Recovery Audits 

N/A $0.00 $0.00 $0.00 $0.00 

Overpayments 

Recaptured 

Outside of 

Payment 

Recapture Audits 

N/A $0.00 $0.00 $0.00 $0.00 

TOTAL $0.000 $0.000 $0.039 $0.000 

Additional Comments

No additional comments. 

Do Not Pay Initiative 

The Do Not Pay (DNP) Initiative is an effort to reduce the frequency of improper payments 

made by the U.S. Government through the use of improper payment verification databases. 

These databases include: 

 Credit Alert Interactive Voice Response System (CAIVRS) 

 Death Master File (DMF) 

 Debt Check Database 
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 List of Excluded Individuals/Entities (LEIE) 

 System for Award Management (SAM)/ Excluded Parties List System (EPLS) 

These databases are available via direct access, and some are of these databases are available 

through the Treasury DNP Business Center DNP Portal. The databases offered and functionality 

of the Treasury DNP Portal varies between agency and program needs and requirements. While 

the number of databases in the DNP Portal has expanded in 2015, access is still being processed. 

USDA’s use of these databases can be categorized as follows: 

1. Contracts, Grants, Cooperative Agreements, and insurance programs are verified against 

System for Award Management (SAM Exclusion) at pre-award. 

2. Loans are verified against the Credit Alert System or Credit Alert Interactive Verification 

Reporting System, SAM Exclusion, and Debt Check at pre-award. 

3. Some USDA programs and activities validate payments and awards against the Death 

Master File, such as: 

a. Risk Management Agency, pre-award. 

b. The Farm Service Agency, which verifies at pre-payment. 

4. USDA programs don’t use the List of Excluded Individuals/Entities of the Office of 

Inspector General of the Department of Health and Human Services, or the Prisoner Update 

Processing System of the Social Security Administration. 

5. Finally, Treasury matches the Payment Integration Processes against DMF and 

SAM Exclusion databases in the DNP Portal. USDA agencies conduct post-payment 

adjudication. 
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Table 19: Implementation of the Do Not Pay Initiative to Prevent Improper Payments Number (#) of payments reviewed for possible improper payments Dollars of payments reviewed for possible improper payments (In Millions) Number (#) of payments stopped Dollars of payments stopped (In Millions) Number (#) of potential improper payments reviewed and determined accurate 

Dollars ($) of potential improper payments reviewed and determined accurate (In Millions) 

Reviews with 

the Death 

Master File 

26,075,734 $59,274 0 $0 26,075,272 $59,273

Reviews with 

SAM.gov 26,075,734 $59,274 0 $0 26,075,723 $59,274 

Data gathered October 1, 2014 through June 30, 2015
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Inspector General Act Amendments of 1988: 

Management’s Report on Audit Follow Up

Background

The Inspector General Act Amendments of 1988 (P.L. 100-504), require that each agency head 

submit semi-annual reports to Congress on the actions taken in response to Office of Inspector 

General (OIG) audit, evaluation, and inspection reports. Consistent with the Reports 

Consolidation Act of 2000 (P.L. 106-531), the U.S. Department of Agriculture’s (USDA) Office 

of the Chief Financial Officer (OCFO) consolidates and annualizes the required semi-annual 

Inspector General Act Amendments’ reporting elements for inclusion in the annual Agency 

Financial Report.

OIG audits USDA’s programs, systems, and operations. It then recommends improvements to 

management based on its findings. USDA management may agree or disagree with the audit’s 

findings or recommendations. An agreement is reached during the management-decision process. 

If management agrees with a recommendation, a written plan for corrective action with a target 

completion date is developed. The plan is then submitted to OIG for concurrence. If both OIG 

and management agree that the proposed corrective action will correct the weakness, a 

management decision is concluded for that recommendation.

Audit follow-up ensures that prompt and responsive action is taken. USDA’s OCFO oversees 

audit follow-up for the Department. An audit remains open until all corrective actions for each 

recommendation are completed. As agencies complete planned corrective actions and submit 

closure documentation, OCFO reviews the submitted documentation for sufficiency and 

determines if final action needs to be completed.

Fiscal Year Results (as of July 31, 2015)

USDA agencies closed 28 audits in fiscal year (FY) 2015. As of July 31, 2015, OIG and USDA 

agencies reached management decisions on 25 audits. As shown in the following exhibit, the 

Department’s inventory of open audits decreased in FY 2015 by 3 percent from 91 to 88.
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 7 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Exhibit 26: Open Audit Inventory 

0

20

40

60

80

100

120

140

160

FY2011 FY2012 FY2013 FY2014 FY2015

96

124

106

91 88

Open Audit Inventory

Note: The FY 2014 ending balance was revised from 81 to 91 to include 9 audits transmitted 

from the Office of Inspector General after the reporting period as well as one audit that was 

erroneously omitted. These adjustments are also reflected in the beginning balances for audits 

with disallowed costs (DC) shown in Exhibit 26 and Exhibit 28. 

Audit Follow-Up Process 

The Inspector General Act Amendments of 1988 require an annual report to Congress providing 

the status of resolved audits that remain open. Resolved audits are those for which management 

decision has been reached for all recommendations. Reports on resolved audits must include the 

elements listed in the bullets below (see Exhibit 27 for definitions): 

 Beginning and ending balances for the number of audit reports and dollar value of 

disallowed costs (DC) and funds to be put to better use (FTBU); 

 The number of new management decisions reached; 

 The disposition of audits with final action; 

 Resolved audits that remain open one year or more past the management decision date and 

require an additional reporting element; and 

 The date issued, dollar value, and an explanation of why final action has not been taken. 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 7 9 

Exhibit 27: Audit Follow-Up Definitions 

Term Definition 

Disallowed Cost 

(DC) 

An incurred cost questioned by the Office of Inspector General (OIG) that 

management has agreed should not be chargeable to the Government. 

Final Action An action that management has agreed will address the audit findings 

and recommendations when completed. 

Funds To Be Put 

to Better Use 

(FTBU) 

An OIG recommendation that funds could be used more efficiently if 

management completes the recommendation, including: 

 Reductions in outlays or other savings; 

 Deobligation of funds from programs or operations, or the withdrawal 

of subsidy costs on loans, guarantees, or bonds; and 

 Implementation of recommended improvements for grants or 

contracts, or unnecessary expenditures noted in pre-award reviews of 

contracts or grant agreements. 

Management 

Decision 

Agreement between management and OIG on corrective action needed 

to address audit findings and recommendations. 

Beginning and Ending Inventory for Audits with Disallowed Costs 

and Funds to Be Put to Better Use 

Of the 28 audits that achieved final action during the fiscal year, 8 contained disallowed 

costs (DC). The number of DC audits remaining in the inventory at the end of the fiscal year 

is 23, with a monetary value of $108,912,671. See Exhibit 28 below. 

Exhibit 28: Inventory of Audits with Disallowed Costs 

Audits with Disallowed Costs (DC) # of Audits Amount ($) 

Beginning of the Period (October 2014) 25 $109,433,447 

Plus: New Management Decisions 6 $8,973,936 

Total Audits Pending Collection of DC 31 $118,407,383 

Adjustments (see Exhibit 29) $2,715,728 

Revised Subtotal $115,691,655 

Less: Final Actions (Recoveries) 8 $6,778,984 

Audits with DC Requiring Final Action at the 

End of the Period (July 2015) 23 $108,912,671 

Exhibit 28 and Exhibit 30 include only those open audits with DC and FTBU, respectively. 

Additionally, some audits contain both DC and FTBU amounts. For these reasons, the number of 

audits shown as the ending balances in Exhibit 28 and Exhibit 30 does not equal the total 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 8 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

resolved audit inventory balance in Exhibit 26. Beginning balance in Exhibit 28 was adjusted to 

include two audits with DC that were transmitted from OIG after the July 31, 2014 reporting 

period and one audit that was erroneously omitted.

As shown in Exhibit 28 above, for DC audits that achieved final action in FY 2015, OIG and 

management agreed to collect $9,494,712. Adjustments were made totaling $2,715,728 

(29 percent of the total) for the following reasons: (1) documentation; (2) write-offs; (3) appeals; 

and (4) agency discovery. Management recovered the remaining $6,778,984. 

Exhibit 29: Distribution of Adjustments to Disallowed Cost 

Category Amount ($) 

Documentation $1,114,618 

Write-offs $1,465,831 

Appeals $153,565

Agency Discovery ($18,286) 

Total $2,715,728 

Final action occurred on 2 audits that involved FTBU amounts. The number of FTBU audits 

remaining in the inventory to date is 16, with a monetary value of $749,694,002 (see Exhibit 30).

Exhibit 30: Inventory of Audits with Funds to Be Put to Better Use (FTBU) 

Audits with FTBU # of Audits Amount ($) 

Beginning of the Period 12 $726,306,381 

Plus: New Management Decisions 6 $50,208,818 

Total Audits Pending 18 $776,515,199 

Less: Final Actions 2 $26,821,197 

Audits with FTBU Requiring Final Action at the End of 

the Period 16 $749,694,002 

Disposition of FTBU: 

 FTBU Implemented $26,821,197 

 FTBU Not Implemented 0 

 Total FTBU Amounts for Final Action Audits $26,821,197 

Exhibit 28 and Exhibit 30 include only those open audits with DC and FTBU, respectively. 

Additionally, some audits contain both DC and FTBU amounts. For these reasons, the number of 

audits shown as the ending balances in Exhibit 28 and Exhibit 30 do not equal the total resolved 

audit inventory balance in Exhibit 26. Beginning balance in Exhibit 30 was adjusted to include 

three audits with FTBU that were transmitted from OIG after the July 31, 2014 reporting period.
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 8 1 

The number of audits open one or more years without final action in FY 2015 decreased from 

63 to 58 audits, or a 8 percent decrease. The 58 audits include 13 audits that reached one year 

past management decision date during FY 2015. USDA agencies continue to pursue 

compensating controls that address many of the underlying issues identified in these older audits. 

Exhibit 31: Decrease in the Number of Audits Open One or More Years Past the Management 

Decision Date (MDD) 

Audits One Year or More Past MDD # of Audits 

Beginning of the period 63

Less: Audits closed 18

Subtotal FY 2015 audits one year or more past MDD 45

Plus: Audits that reached one year past MDD during FY 2015 13

Ending balance as of July 31, 2015 58

Agencies have completed all planned corrective actions on 12 audits that are pending collection 

of associated DC (see Exhibit 32 below). 

Exhibit 32: Distribution of Audits Open One Year or More Past the Management Decision Date 

(MDD) 

Audits on Schedule Audits Behind Schedule Audits Under Collection 

No. DC ($) FTBU 

($) 

No. DC ($) FTBU ($) No. DC ($) FTBU ($) 

3 $56,800 $0 43 $14,260,971 $656,354,294 12 $45,826,156 $3,810,087 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 8 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Management’s Report on Audit Follow-Up

Audits without final action one year or more past MDD, and behind schedule are listed individually in Exhibit 33. The audits are categorized by 

agency and by reason final action has not occurred. More detailed information on audits on-schedule, and audits under collection, is available 

from OCFO. 

Exhibit 33: Audits Open One Year or More Past the MDD, and Behind Schedule 

Agricultural Marketing Service (AMS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

01099-0001-21 1/28/2014 9/30/2016 

Agricultural Marketing Service 

Oversight of the Beef 

Promotion and Research 

Board's Activities 

$0 $0 Pending Internal Monitoring/ 

Program Reviews 

01601-0002-32 7/15/2013 12/31/2015 National Organic Program—

Organic Milk Operations $0 $0 Pending Administrative Action

AMS Subtotal (2) $0 $0

Animal and Plant Health Inspection Service (APHIS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

50601-0008-TE 1/28/2005 12/31/2015 

Controls over APHIS Issuance 

of Genetically Engineered 

Organisms Release Permits 

$0 $0 Issuance of Policy Guidance 

and Legislation 

50601-0016-TE 5/31/2011 12/31/2015 

Controls over Genetically 

Engineered Animal and Insect 

Research 

$0 $0 Issuance of Policy Guidance 

and Legislation 

APHIS Subtotal (2) $0 $0
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P OR T

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 8 3 

Agricultural Research Service (ARS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

50601-0006-TE 3/4/2004 12/31/2015 

ARS Controls Over Plant 

Variety Protection and 

Germplasm Storage 

$0 $0 Issuance of Policy Guidance 

and Legislation 

50601-0010-AT 3/8/2004 12/31/2015 

ARS Follow-Up Report on the 

Security of Biological Agents at 

U.S. Department of 

Agriculture Laboratories 

$0 $0 Issuance of Policy Guidance 

and Legislation 

ARS Subtotal (2) $0 $0

Commodity Credit Corporation (CCC) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

06401-0020-FM 11/9/2005 12/31/2017 CCC’s Financial Statements for 

FY 2005 and 2004 $0 $0 Pending Administrative Action 

CCC Subtotal (1) $0 $0
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Food and Nutrition Service (FNS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

27002-0011-13 9/28/2012 12/31/2015

Analysis of FNS’ 

Supplemental Nutrition 

Assistance Program Fraud 

Prevention and Detection 

Efforts 

$0 $0 Pending Administrative Action 

27099-0049-TE 3/10/2008 10/31/2015

Disaster Food Stamp 

Program for Hurricanes 

Katrina and Rita in 

Louisiana, Mississippi, and 

Texas 

$0 $0 Issuance of Policy Guidance 

and Legislation 

27601-0001-23 1/3/2013 06/30/2016

National School Lunch 

Program-Food Service 

Management Company 

Contracts 

$0 $0 Pending Administrative Action 

27601-0012-SF 11/18/2011 7/31/2016

Review of Management 

Controls for the Child and 

Adult Care Food Program 

$2,486,633 $0 Issuance of Policy Guidance 

and Legislation 

27601-0016-AT 3/31/2008 12/31/2015 FNS Food Stamp 

Employment and Training $0 $0 Issuance of Policy Guidance and Legislation 

50601-0014-AT 8/16/2010 11/30/2015

Effectiveness and 

Enforcement of Suspension 

and Debarment Regulations 

$0 $0 Pending Administrative Action 

FNS Subtotal (6) $2,486,633 $0
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P OR T

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 8 5 

Office of Homeland Security and Emergency Coordination (OHSEC) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

61701-0001-32 9/27/ 2013 12/31/2015 Classification Management $0 $0 Pending Administrative Action 

OHSEC Subtotal (1) $0 $0

Forest Service (FS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

08601-0055-SF 6/16/2011 12/31/2017

Forest Service 

Administration of Special 

Use Program 

$0 $5,387,567 Issuance of Policy Guidance 

and Legislation 

FS Subtotal (1) $0 $5,387,567 

Farm Service Agency (FSA) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

03601-0018-CH 8/10/2010 06/30/2016 Farm Loan Security $0 $0

Pending IT System 

Implementation and 

Enhancements 

FSA Subtotal (1) $0 $0
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 8 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Food Safety and Inspection Service (FSIS) 

Audits Date Issued 

Revised 

Completion 

Date

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

24601-0001-31 5/9/2012 9/30/2015

Application of FSIS 

Sampling Protocol for 

Testing Beef Trim for E. 

coli O157:H7 

$0 $0 Issuance of Policy Guidance 

and Legislation 

24601-0001-41 5/9/2013 12/31/2015

Inspection and 

Enforcement Activities at 

Swine Slaughter Plants 

$0 $0 Issuance of Policy Guidance 

and Legislation 

24601-0003-31 3/22/2013 9/31/2015 E. coli Testing of Boxed 

Beef $0 $0 Issuance of Policy Guidance and Legislation 

50601-0006-HY 7/15/2009 6/30/2016

Assessment of USDA’s 

Controls to Ensure 

Compliance with Beef 

Export Requirements 

$0 $0

Pending IT System 

Implementation and 

Enhancements 

FSIS Subtotal (4) $0 $0
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P OR T

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 8 7 

Natural Resources Conservation Service (NRCS) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

10099-0001-31 9/27/2013 3/31/2016 

Natural Resources Conservation 

Service’s Administration of 

Easement Programs in Wyoming 

$0 $0 Pending Administrative 

Action 

10401-0003-11 12/9/2013 12/31/2015 

Natural Resources Conservation 

Service’s Financial Statements 

for Fiscal Year 2013 

$0 $0 Pending Administrative 

Action 

10601-0001-31 7/24/2014 10/31/2015 Environmental Quality Incentives 

Program $0 $0 Issuance of Policy 

Guidance and Legislation 

10703-0001-AT 3/25/2013 10/01/2015 Recovery Act—Rehabilitation of 

Flood Control Dams $0 $1,440,028 Pending Administrative Action 

NRCS Subtotal (4) $0 $1,440,028 

Office of the Chief Financial Officer (OCFO) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

50024-0005-11 4/15/2014 12/30/2015 

U.S. Department of Agriculture 

Improper Payments Elimination 

and Recovery Act of 2010 

Compliance Review for Fiscal 

Year 2013 

$0 $0 Pending Administrative 

Action 

50401-0003-11 11/15/2012 9/30/2015

USDA’s Consolidated Financial 

Statements for 

FY 2011 and 2012 

$0 $0 Pending Administrative 

Action 

OCFO Subtotal (2) $0 $0
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 8 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Office of the Chief Information Officer (OCIO) 

Audits Date Issued 

Revised 

Completion 

Date 

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

50501-0001-IT 8/15/2011 11/30/2015 

OCIO USDA’s Management and 

Security Over Wireless Handheld 

Devices 

$0 $0 Pending Administrative 

Action 

50501-0001-12 4/19/2012 9/30/2015 

USDA’s Configuration, 

Management, and Security over 

Domain Name System Servers 

$0 $0 Issuance of Policy Guidance 

50501-0002-IT 11/19/2010 9/30/2015 

OCIO FY 2010 Federal 

Information Security 

Management Act 

$0 $0

Pending IT System 

Implementation and 

Enhancements 

50501-0015-FM 11/18/2009 9/30/2016 

OCIO FY 2009 Federal 

Information Security 

Management Act 

$0 $0 Issuance of Policy Guidance 

88401-0001-12 8/2/2012 9/30/2015 

OCIO’s FY’s 2010 and 2011 

Funding Received for Security 

Enhancements 

$0 $0 Pending Administrative 

Action 

OCIO Subtotal (5) $0 $0
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P OR T

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 8 9 

Rural Development (RD) 

Audits Date Issued 

Revised 

Completion 

Date

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

04601-0001-31 7/18/2014 12/31/2015 

Rural Development: Single Family 

Housing Direct Loan Servicing and 

Payment Subsidy Recapture

$34,338 $0 Administrative Action 

04601-0018-CH 9/27/2012 12/31/2015

Project Cost and Inspection 

Procedures for the Rural Rental 

Housing Program 

$0 $0

Issuance of Policy 

Guidance and 

Legislation 

09703-0001-22 3/26/2013 12/31/2015 

Rural Utilities Service Controls Over 

Recovery Act Water and Waste Loans 

and Grants Expenditures and 

Performance Measures 

$0 $454,355 Administrative Action 

09703-0001-32 3/29/2013 12/31/2015 

American Recovery and Reinvestment 

Act of 2009—Broadband Initiatives 

Program—Pre-Approval Controls 

$0 $6,378,419 Administrative Action 

09703-0002-22 8/14/2014 12/31/2015 Review of a Utility Company’s Use of 

RUS Financial Assistance $0 $11,395,145 Administrative Action 

09703-0002-32 8/22/2013 12/31/2015 

American Recovery and Reinvestment 

Act of 2009—Broadband Initiatives 

Program—Post-Award Controls 

$0 $150,503,439 

34601-0015-TE 9/30/2003 12/31/2015

RBS National Report on the Business 

and Industry Loan Program $0 $0

Issuance of Policy 

Guidance and 

Legislation 

34703-0001-32 3/29/2013 12/31/2015

American Recovery and Reinvestment 

Act—Business and Industry 

Guaranteed Loans, Phase 3

$0 $0 Administrative Action 

34703-0002-TE 12/5/2011 12/31/2015 

American Recovery and Reinvestment 

Act—Business and Industry 

Guaranteed Loans, Phase 2 

$0 $0

Issuance of Policy 

Guidance and 

Legislation 

RD Subtotal (9) $34,338 $168,731,358 
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2 9 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Risk Management Agency (RMA) 

Audits Date Issued 

Revised 

Completion 

Date

Audit Title 

Monetary Amount 

Pending by Reason DC ($) FTBU ($) 

05401-0003-11 12/12/2013 9/30/2015 Financial Statements for

Fiscal Years 2013 and 2012 $0 $0 Pending Administrative Action 

05601-0001-31 9/03/2013 5/30/2016 Controls Over Prevented 

Planting $0 $480,795,341 Pending Administrative Action 

RMA Subtotal (1) $480,795,341

Multi - Agency 

Audits Date 

Issued 

Revised 

Completion Date Audit Title 

Monetary Amount 

Pending by Reason 

DC ($) FTBU ($) 

50601-0002-31 7/31/2013 12/31/2015 (AMS) 

1/30/2017 (FSIS) 

FSIS’ and AMS’ Field-Level 

Workforce Challenges $11,740,000 $0

Pending 

Administrative 

Action—AMS 

Pending IT System 

Implementation and 

Enhancements—FSIS 

Multi-Agency 

Subtotal (1) $11,740,000 $0

Total Number 

Audits (43) Total $14,260,971 $656,354,294 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 9 1 

Freeze the Footprint 

The USDA is implementing an OMB policy to “Freeze the Footprint” by committing to dispose 

of excess properties held by the Federal Government and make more efficient use of the 

Government’s real estate assets. 

Exhibit 34: Freeze the Footprint Baseline Comparison 

Square Footage (SF) In Millions 

Fiscal Year 2012 

Baseline 2014 Change (2012–2014) 

35.93 35.44 -1.35% 

Exhibit 35: Reporting Of Operation and Maintenance Costs—Owned and Directly Leased Buildings 

Operations and Maintenance (O&M) Costs (In Millions) 

Fiscal Year 2012 

Baseline 2014 Change (2012–2014) 

$615.87 $598.06 $-17.81 

This data is available in the FY 2014 annual Federal Real Property Profile report submitted to 

GSA and OMB. 

More information about Federal Real Property can be in the FY 2014 annual Federal Real 

Property Profile report.

USDA has issued an Agriculture Property Management Regulation (AGPMR No. 15-05) 

providing policy and procedures for the Reduce the Footprint OMB space initiative. Starting in 

2015, departments are to project their 5-year building footprint as well as outline their internal 

controls for managing their footprint. The Department has set forth processes and procedures to 

halt space needs at the FY 2012 baseline represented in the figure above. 

USDA continues to support footprint reductions by identifying opportunities for disposal, 

consolidation, and increased utilization of office and warehouse space. USDA is doing this by 

the formation of the Space Utilization Management Council, with a mission to work with USDA 

agencies and the General Services Administration (GSA) in developing and implementing 

programs designated to realize increased space utilization. USDA has also created a Center of 

Excellence (COE) for Leasing to concentrate on cost-saving efforts for the more than 

3,000 direct leases. USDA partnered with GSA to develop a Corporate Portfolio Plan to identify 

opportunities for consolidation with other Federal agencies. A strategic sourcing initiative has 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 9 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

identified opportunities for integration and consolidation within USDA. USDA has updated 

Departmental Regulation 1620-002, “USDA Space Management Policy”, to reflect a 150-square 

foot per person utilization rate that is all-inclusive. These actions and continued focus are 

examples of how USDA is managing the office and warehouse square footage at or below the 

baseline FY 2012 totals. 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 9 3 

Civil Monetary Penalties 

USDA maintains regulations regarding civil monetary policies at Title 7 of the Code of Federal Regulations § 3.913. The Department is 

reviewing, updating, and making adjustments to the penalties; however they will not be finalized and published in the Federal Register when 

the Annual Financial Report is published in November 2015. The table below briefly describes the penalty, under which authority, the dates of 

the previous and current adjustments, and current penalty amount. 

Exhibit 36: Civil Monetary Penalties 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Improper recordkeeping; 

pesticides 

7 U.S.C. 136i-1(d) 5/24/2005 4/7/2010 $750

Violation of the unfair conduct 

rule 

Perishable Agricultural 

Commodities Act, 

codified at 7 U.S.C. 

499b(5) 

5/24/2005 4/7/2010 $2,200 

Violation of the licensing 

requirements 

Perishable Agricultural 

Commodities Act, 

codified at 7 U.S.C. 

499c(a) 

5/24/2005 4/7/2010 $1,200 plus $350 a per day for as long 

as offence occurs or $350 for each 

non-willful offence 

Violative transaction Perishable Agricultural 

Commodities Act, 

codified at 7 U.S.C. 

499h(e) 

5/24/2005 4/7/2010 $2,000 

3

https://www.gpo.gov/fdsys/pkg/CFR-2011-title7-vol1/xml/CFR-2011-title7-vol1-sec3-91.xml 
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Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Violation Export Apple Act, 

7 U.S.C. 586 

5/24/2005 4/7/2010 $110–$11,000 

Violation Export Grape and 

Plum Act, codified at 7 

U.S.C. 596 

5/24/2005 4/7/2010 $110–$11,000 

Violation of an order issued by 

the Secretary 

Agricultural 

Adjustment Act, 

reenacted with 

amendments by the 

Agricultural Marketing 

Agreement Act of 

1937, codified at 7 

U.S.C. 608c(14)(B) 

5/24/2005 4/7/2010 $1,100 

Failure to file certain reports Agricultural 

Adjustment Act, 

reenacted by the 

Agricultural Marketing 

Agreement Act of 

1937, codified at 

7 U.S.C. 610(c) 

5/24/2005 4/7/2010 $110

Violation of a seed program Federal Seed Act, 

codified at 7 U.S.C. 

1596(b) 

5/24/2005 4/7/2010 $37.50–$7,500 

Failure to collect any 

assessment or fee for violation 

Cotton Research and 

Promotion Act, 

codified at 7.U.S.C. 

2112(b) 

5/24/2005 4/7/2010 $1,100 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 9 5 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to obey a cease and 

desist order, or for deceptive 

marketing 

Plant Variety 

Protection Act, 

codified at 7 U.S.C. 

2568(b) 

5/24/2005 4/7/2010 $750–$11,000 

Failure to pay, collect, or remit 

any assessment or fee for a 

violation of a program 

Potato Research and 

Promotion Act, 

codified at 7 U.S.C. 

2621(b)(1) 

5/24/2005 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Potato Research and 

Promotion Act, 

codified at 7 U.S.C. 

2621(b)(3) 

5/24/2005 4/7/2010 $750

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Egg Research and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

2714(b)(1) 

5/24/2005 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Egg Research and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

2714(b)(3) 

5/24/2005 4/7/2010 $750

Failure to remit any assessment 

or fee or for a violation of a 

program 

Beef Research and 

Information Act, 

codified at 7 U.S.C. 

2908(a)(2) 

5/24/2005 4/7/2010 $7,500 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 9 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to remit any assessment 

or for a violation of a program 

regarding wheat and wheat 

foods research 

7 U.S.C. 3410(b) 5/24/2005 4/7/2010 $1,100 

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Floral Research and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

4314(b)(1) 

5/24/2005 4/7/2010 $7,500 

Failure to obey a cease and 

desist order 

Floral Research and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

4314(b)(3) 

5/24/2005 4/7/2010 $750 

Violation of an order Dairy Promotion 

Program, codified at 

7 U.S.C. 4510(b) 

5/24/2005 4/7/2010 $1,100 

[failure to] pay, collect, or remit 

any assessment or fee or for a 

violation 

Honey Research, 

Promotion, and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

4610(b)(1) 

5/24/2005 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Honey Research, 

Promotion, and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

4610(b)(3) 

5/24/2005 4/7/2010 $750
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 9 7 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Violation of a program Pork Promotion, 

Research, and 

Consumer 

Information Act of 

1985, codified at 

7 U.S.C. 

4815(b)(1)(A)(i) 

5/24/2005 4/7/2010 $1,100 

Failure to obey a cease and 

desist order 

Pork Promotion, 

Research, and 

Consumer 

Information Act of 

1985, codified at 

7 U.S.C. 4815(b)(3)(A) 

5/24/2005 4/7/2010 $750

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Watermelon Research 

and Promotion Act, 

codified at 7 U.S.C. 

4910(b)(1) 

5/24/2005 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Watermelon Research 

and Promotion Act, 

codified at 7 U.S.C. 

4910(b)(3) 

5/24/2005 4/7/2010 $750

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Pecan Promotion and 

Research Act of 1990, 

codified at 7 U.S.C. 

6009(c)(1) 

5/24/2005 4/7/2010 $1,100–$11,000 

Failure to obey a cease and 

desist order 

Pecan Promotion and 

Research Act of 1990, 

codified at 7 U.S.C. 

6009(e) 

5/24/2005 4/7/2010 $1,100 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

2 9 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Mushroom 

Promotion, Research, 

and Consumer 

Information Act of 

1990, codified at 

7 U.S.C. 6107(c)(1) 

10/1/2011 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Mushroom 

Promotion, Research, 

and Consumer 

Information Act of 

1990, codified at 

7 U.S.C. 6107(e) 

10/1/2011 4/7/2010 $750

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation 

Lime Research, 

Promotion, and 

Consumer 

Information Act of 

1990, codified at 

7 U.S.C. 6207(c)(1) 

10/1/2011 4/7/2010 $750–$7,500 

Failure to obey a cease and 

desist order 

Lime Research, 

Promotion, and 

Consumer 

Information Act of 

1990, codified at 

7 U.S.C. 6207(e) 

10/1/2011 4/7/2010 $750

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

 Soybean Promotion, 

Research, and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

6307(c)(1)(A) 

10/1/2011 4/7/2010 $1,100 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 2 9 9 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to obey a cease and 

desist order 

Soybean Promotion, 

Research, and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

6307(e) 

10/1/2011 4/7/2010 $7,500 

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Fluid Milk Promotion 

Act of 1990, codified 

at 7 U.S.C. 

6411(c)(1)(A) and 

7 U.S.C. 6411(c)(1)(B) 

10/1/2011 4/7/2010 Unwillful violation: $750–$7,500; 

willful violation: $11,000–$140,000 

Failure to obey a cease and 

desist order 

Fluid Milk Promotion 

Act of 1990, codified 

at 7 U.S.C. 6411(e) 

10/1/2011 4/7/2010 $7,500 

Knowingly labeling or selling a 

product as organic except in 

accordance with the Organic 

Foods Production Act of 1990 

Organic Foods 

Production Act of 

1990, codified at 7 

U.S.C. 6519(a) 

10/1/2011 4/7/2010 $11,000 

Failure to pay, collect, or remit 

any assessment or fee or for a 

violation of a program 

Fresh Cut Flowers and 

Fresh Cut Greens 

Promotion and 

Information Act of 

1993, codified at 

7 U.S.C. 

6808(c)(1)(A)(i) 

10/1/2011 4/7/2010 $750–$7,500 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 0 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to obey a cease and 

desist order 

Fresh Cut Flowers and 

Fresh Cut Greens 

Promotion and 

Information Act of 

1993, codified at 

7 U.S.C. 6808(e)(1) 

10/1/2011 4/7/2010 $7,500 

Violation of a program Sheep Promotion, 

Research, and 

Information Act of 

1994, codified at 

7 U.S.C. 7107(c)(1)(A) 

10/1/2011 4/7/2010 $1,100 

Failure to obey a cease and 

desist order 

Sheep Promotion, 

Research, and 

Information Act of 

1994, codified at 

7 U.S.C. 7107(e) 

10/1/2011 4/7/2010 $750

Violation of an order or 

regulation issued under the 

Commodity Promotion, 

Research, and Information Act 

of 1996 

Commodity 

Promotion, Research, 

and Information Act 

of 1996, codified at 7 

U.S.C. 7419(c)(1) 

10/1/2011 4/7/2010 $1,200–$12,000 for each violation 

Failure to obey a cease and 

desist order 

Commodity 

Promotion, Research, 

and Information Act 

of 1996, codified at 

7 U.S.C. 7419(e) 

10/1/2011 4/7/2010 $1,200–$12,000 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 0 1 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Violation of an order or 

regulation issued under the 

Canola and Rapeseed Research, 

Promotion, and Consumer 

Information Act, codified at 

7 U.S.C. 7448(c)(1)(A)(i) 

Canola and Rapeseed 

Research, Promotion, 

and Consumer 

Information Act, 

codified at 7 U.S.C. 

7448(c)(1)(A)(i) 

10/1/2011 4/7/2010 $1,200 for each violation 

Failure to obey a cease and 

desist order 

Canola and Rapeseed 

Research, Promotion, 

and Consumer 

Information Act, 

codified at 7 U.S.C. 

7448(e) 

10/1/2011 4/7/2010 $7,000 for each day the violation 

occurs 

Violation of an order or 

regulation issued under the 

National Kiwifruit Research, 

Promotion, and Consumer 

Information Act, codified at 

7 U.S.C. 7468(c)(1) 

National Kiwifruit 

Research, Promotion, 

and Consumer 

Information Act, 

codified at 7 U.S.C. 

7468(c)(1) 

10/1/2011 4/7/2010 $700–$7,000 

Failure to obey a cease and 

desist order 

National Kiwifruit 

Research, Promotion, 

and Consumer 

Information Act, 

codified at 7 U.S.C. 

7468(e) 

10/1/2011 4/7/2010 $700 for each day the violation occurs 

Violation of an order or 

regulation under the Popcorn 

Promotion, Research, and 

Consumer Information Act, 

codified at 

7 U.S.C. 7487(a) 

Popcorn Promotion, 

Research, and 

Consumer 

Information Act, 

codified at 7 U.S.C. 

7487(a) 

10/1/2011 4/7/2010 $1,200 for each violation 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 0 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Certain violations Egg Products 

Inspection Act, 

codified at 21 U.S.C. 

1041(c)(1)(A) 

10/1/2011 4/7/2010 $7,500 for each violation 

Violation of an order or 

regulation issued under the Hass 

Avocado Promotion, Research, 

and Information Act of 2000, 

codified at 7 U.S.C. 

7807(c)(1)(A)(i) 

Hass Avocado 

Promotion, Research, 

and Information Act 

of 2000, codified at 

7 U.S.C. 

7807(c)(1)(A)(i) 

10/1/2011 4/7/2010 $1,100–$11,000 for each violation 

Failure to obey a cease and 

desist order 

Hass Avocado 

Promotion, Research, 

and Information Act 

of 2000, codified at 

7 U.S.C. 7807(e)(1) 

10/1/2011 4/7/2010 $11,000 for each offense 

Violation of certain provisions of 

the Livestock Mandatory 

Reporting Act of 1999, codified 

at 7 U.S.C. 1636b(a)(1) 

Livestock Mandatory 

Reporting Act of 1999, 

codified a 7 U.S.C. 

1636b(a)(1) 

10/1/2011 4/7/2010 $11,000 for each violation 

Failure to obey a cease and 

desist order 

Livestock Mandatory 

Reporting Act of 1999, 

codified at 7 U.S.C. 

1636b(g)(3) 

10/1/2011 4/7/2010 $11,000 for each violation 

Failure to obey an order of the 

Secretary issued pursuant to the 

Dairy Product Mandatory 

Reporting program, codified at 

7 U.S.C. 1637b(c)(4)(D)(iii) 

Dairy Product 

Mandatory Reporting 

program, codified at 

7 U.S.C. 

1637b(c)(4)(D)(iii) 

10/1/2011 4/7/2010 $1,000–$11,000 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 0 3 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Willful violation of the Country 

of Origin Labeling program by a 

retailer or person engaged in 

the business of supplying a 

covered commodity to a retailer 

7 U.S.C. 1638b(b)(2) 10/1/2011 4/7/2010 $1,000 for each violation 

Violations of the Dairy Research 

Program, codified at 7 U.S.C. 

4535 and 4510(b) 

Dairy Research 

Program, codified at 

7 U.S.C. 4535 and 

4510(b) 

10/1/2011 4/7/2010 $1,100 for each violation 

Violation of the imported seed 

provisions of the Federal Seed 

Act, codified at 7 U.S.C. 1596(b) 

Federal Seed Act, 

codified at 7 U.S.C. 

1596(b) 

10/1/2011 4/7/2010 $37–$750 

Violation of the Animal Welfare 

Act, codified at 7 U.S.C. 2149(b) 

Animal Welfare Act, 

codified at 7 U.S.C. 

2149(b) 

10/1/2011 4/7/2010 $1,650–$10,000 

Any person that causes harm to, 

or interferes with, an animal 

used for the purposes of official 

inspection by the Department 

7 U.S.C. 2279e(a) 10/1/2011 4/7/2010 $11,000 

Penalty for a violation of the 

Swine Health Protection Act, 

codified at 7 U.S.C. 3805(a) 

Swine Health 

Protection Act, 

codified at 7 U.S.C. 

3805(a) 

10/1/2011 4/7/2010 $11,000 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 0 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Any person that violates the 

Plant Protection Act (PPA), or 

that forges, counterfeits, or, 

without authority from the 

Secretary, uses, alters, defaces, 

or destroys any certificate, 

permit, or other document 

provided for in the PPA 

Plant Protection Act, 

7 U.S.C. 7734(b)(1) 

10/1/2011 4/7/2010 $60,000/individual, $300,000/any 

other person, $500,000 violations 

adjudicated in a single proceeding if 

not a willful violation, $1,000,000 

violations adjudicated in a single 

proceeding if a willful violation; or 

twice the gross gain or gross loss for 

any violation, forgery, counterfeiting, 

unauthorized use, defacing, or 

destruction of a certificate, permit, or 

other document provided for in the 

PPA that results in the person deriving 

pecuniary gain or causing pecuniary 

loss to another. 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 0 5 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Any person [except as provided 

in 7 U.S.C. 8309(d)] that violates 

the Animal Health Protection 

Act (AHPA), or that forges, 

counterfeits, or, without 

authority from the Secretary, 

uses, alters, defaces, or destroys 

any certificate, permit, or other 

document provided under the 

AHPA 

Animal Health 

Protection Act, 

7 U.S.C. 8313(b)(1) 

10/1/2011 4/7/2010 $60,000 in the case of any individual, 

$300,000 in the case of any other 

person for each violation, $500,000 for 

all violations adjudicated in a single 

proceeding if the violations do not 

include a willful violation, $1,000,000 

for all violations adjudicated in a single 

proceeding if the violations include a 

willful violation; or twice the gross gain 

or gross loss for any violation, forgery, 

counterfeiting, unauthorized use, 

defacing, or destruction of a 

certificate, permit, or other document 

provided under the AHPA that results 

in the person's deriving pecuniary gain 

or causing pecuniary loss to another 

person. 

Any person that violates certain 

regulations under the 

Agricultural Bioterrorism 

Protection Act of 2002 regarding 

transfers of listed agents and 

toxins or possession and use of 

listed agents and toxins. 

 10/1/2011 4/7/2010 $300,000 in the case of an individual 

and $600,000 in the case of any other 

person. 

Violation of the Horse 

Protection Act, codified at 15 

U.S.C. 1825(b)(1) 

Horse Protection Act, 

codified at 15 U.S.C. 

1825(b)(1) 

10/1/2011 4/7/2010 $2,200 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 0 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to obey Horse Protection 

Act disqualification, codified at 

15 U.S.C. 1825(c) 

Horse Protection Act, 

codified at 15 U.S.C. 

1825(c) 

10/1/2011 4/7/2010 $4,300 

Knowingly violating, or, if in the 

business as an importer or 

exporter, violating, with respect 

to terrestrial plants, any 

provision of the Endangered 

Species Act of 1973, any permit 

or certificate issued thereunder, 

or any regulation issued 

pursuant to section 9(a)(1)(A) 

through (F), (a)(2)(A) through 

(D), (c), (d) (other than 

regulations relating to 

recordkeeping or filing reports), 

(f), or (g) of the Endangered 

Species Act of 1973 (16 U.S.C. 

1538(a)(1)(A) through (F), 

(a)(2)(A) through (D), (c), (d), (f), 

and (g)), as set forth at 16 U.S.C. 

1540(a) 

Endangered Species 

Act of 1973, (16 U.S.C. 

1538(a)(1)(A) through 

(F), (a)(2)(A) through 

(D), (c), (d), (f), and 

(g)), as set forth at 16 

U.S.C. 1540(a) 

10/1/2011 4/7/2010 $37,500 

Knowingly violating, or, if in the 

business as an importer or 

exporter, violating, with respect 

to terrestrial plants, any other 

regulation under the 

Endangered Species Act of 1973, 

as set forth at 16 U.S.C. 1540(a) 

Endangered Species 

Act of 1973, as set 

forth at 16 U.S.C. 

1540(a) 

10/1/2011 4/7/2010 $18,200 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 0 7 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Violation, with respect to 

terrestrial plants, of the 

Endangered Species Act of 1973, 

or any regulation, permit, or 

certificate issued thereunder, as 

set forth at 16 U.S.C. 1540(a) 

Endangered Species 

Act of 1973, as set 

forth at 16 U.S.C. 

1540(a) 

10/1/2011 4/7/2010 $750

Knowingly and willfully violating 

49 U.S.C. 80502 with respect to 

the transportation of animals by 

any rail carrier, express carrier, 

or common carrier (except by air 

or water), a receiver, trustee, or 

lessee of one of those carriers, 

or an owner or master of a 

vessel

49 U.S.C. 80502(d) 10/1/2011 4/7/2010 $110–$650 

Violating a provision of the Food 

and Nutrition Act of 2008 (Act), 

or a regulation under the Act, by 

a retail food store or wholesale 

food concern 

Food and Nutrition 

Act of 2008 (Act), or a 

regulation under the 

Act, codified at 

7 U.S.C. 2021(a) and 

(c)

10/1/2011 4/7/2010 $100,000 

Trafficking in food coupons Food and Nutrition 

Act of 2008 (Act), 

codified at 7 U.S.C. 

2021(b)(3)(B) 

10/1/2011 4/7/2010 $32,000–$59,000 

Sale of firearms, ammunitions, 

explosives, or controlled 

substances for coupons 

Food and Nutrition 

Act of 2008 

(Act),codified at 

7 U.S.C. 2021(b)(3)(c) 

10/1/2011 4/7/2010 $32,000–$59,000 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 0 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Any entity that submits a bid to 

supply infant formula to carry 

out the Special Supplemental 

Nutrition Program for Women, 

Infants, and Children and 

discloses the amount of the bid, 

rebate or discount practices in 

advance of the bid opening or 

for any entity that makes a 

statement prior to the opening 

of bids for the purpose of 

influencing a bid 

42 U.S.C. 

1786(h)(8)(H)(i) 

10/1/2011 4/7/2010 $145,200,000 

Vendor convicted of trafficking 

in food instruments 

42 U.S.C. 

1786(o)(1)(A) and 42 

U.S.C. 1786(o)(4)(B) 

10/1/2011 4/7/2010 $11,000–$49,000 

Vendor convicted of selling 

firearms, ammunition, 

explosives, or controlled 

substances in exchange for food 

instruments 

2 U.S.C. 1786(o)(1)(B) 

and 42 U.S.C. 

1786(o)(4)(B) 

10/1/2011 4/7/2010 $11,000 

Certain violations under the Egg 

Products Inspection Act 

Egg Products 

Inspection Act, 

codified at 

21 U.S.C. 1041(c)(1)(A) 

10/1/2011 4/7/2010 $7,500 

Failure to timely file certain 

reports, codified at 21 U.S.C. 

467d

21 U.S.C. 467d 10/1/2011 4/7/2010 $110 per day for each day the report is 

not filed 

Failure to timely file certain 

reports, codified at 21 U.S.C. 

677

21 U.S.C. 677 10/1/2011 4/7/2010 $110 per day for each day the report is 

not filed 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 0 9 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Failure to timely file certain 

reports, codified at 21 U.S.C. 

678

21 U.S.C. 1051 10/1/2011 4/7/2010 $110 per day for each day the report is 

not filed 

Willful disregard of the 

prohibition against the export of 

unprocessed timber originating 

from Federal lands 

16 U.S.C. 

620d(c)(1)(A) 

10/1/2011 4/7/2010 $750,000 

Violation in disregard of the 

Forest Resources Conservation 

and Shortage Relief Act or the 

regulations that implement such 

Act 

16 U.S.C. 

620d(c)(2)(A)(i) 

10/1/2011 4/7/2010 $107,500 

Person that should have known 

that an action was a violation of 

the Forest Resources 

Conservation and Shortage 

Relief Act or the regulations that 

implement such Act 

Forest Resources 

Conservation and 

Shortage Relief Act or 

the regulations that 

implement such Act, 

16 U.S.C. 

620d(c)(2)(A)(ii) 

10/1/2011 4/7/2010 $70,000 

Willful violation of the Forest 

Resources Conservation and 

Shortage Relief Act or the 

regulations that implement such 

Act 

Forest Resources 

Conservation and 

Shortage Relief Act or 

the regulations that 

implement such Act, 

codified at 16 U.S.C. 

620d(c)(2)(A)(iii) 

10/1/2011 4/7/2010 $725,000 

Violation involving protections 

of caves 

16 U.S.C. 4307(a)(2) 10/1/2011 4/7/2010 $11,000 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 1 0 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Packer or swine contractor 

violation 

7 U.S.C. 193(b) 10/1/2011 4/7/2010 $11,000 

Livestock market agency or 

dealer failure to register 

Packers and 

Stockyards Act of 

1921, 7 U.S.C. 203

10/1/2011 4/7/2010 $750

Operating without filing, or in 

violation of, a stockyard rate 

schedule, or of a regulation or 

order of the Secretary made 

thereunder 

Packers and 

Stockyards Act of 

1921, 7 U.S.C. 207(g) 

10/1/2011 4/7/2010 $750

A stockyard owner, livestock 

market agency, and dealer 

violation 

Packers and 

Stockyards Act of 

1921, 7 U.S.C. 213(b) 

10/1/2011 4/7/2010 $11,000 

Stockyard owner, livestock 

market agency, and dealer 

compliance order 

Packers and 

Stockyards Act of 

1921, 7 U.S.C. 215(a) 

10/1/2011 4/7/2010 $750

Failure to file required reports 15 U.S.C. 50 10/1/2011 4/7/2010 $110

Live poultry dealer violations Packers and 

Stockyards Act of 

1921, 7 U.S.C. 228b2(b) 

10/1/2011 4/7/2010 $32,000 

Refusal of inspection and 

weighing services violation 

7 U.S.C. 86(c) 10/1/2011 4/7/2010 $107,500 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 1 1 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Any person who willfully and 

intentionally provides any false 

or inaccurate information to the 

Federal Crop Insurance 

Corporation or to an approved 

insurance provider with respect 

to any insurance plan or policy 

that is offered under the 

authority of the Federal Crop 

Insurance Act 

Federal Crop 

Insurance Act, 

codified at 7 U.S.C. 

1506(n)(1)(A) 

10/1/2011 4/7/2010 $11,000 

Any person who willfully and 

intentionally provides any false 

or inaccurate information to the 

Federal Crop Insurance 

Corporation or to an approved 

insurance provider with respect 

to any insurance plan or policy 

that is offered under the 

authority of the Federal Crop 

Insurance Act, or who fails to 

comply with a requirement of 

the Federal Crop Insurance 

Corporation 

Federal Crop 

Insurance Act, 

codified at 7 U.S.C. 

1515(h)(3)(A) 

10/1/2011 4/7/2010 $11,000 

Violation of section 536 of Title 

V of the Housing Act of 1949 

Section 536 of Title V 

of the Housing Act of 

1949, codified at 

42 U.S.C. 1490p(e)(2) 

10/1/2011 4/7/2010 $120,000/individual and $1,200,000 in 

the case of an applicant other than an 

individual 

Equity skimming Section 543(a) of the 

Housing Act of 1949, 

codified at 42 U.S.C. 

1490s(a)(2) 

10/1/2011 4/7/2010 $32,500 
S E C T I O N I I I | O T H E R I N F O R M A T I O N

3 1 2 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Violation of regulations or 

agreements made in accordance 

with Title V of the Housing Act 

of 1949, by submitting false 

information, submitting false 

certifications, failing to timely 

submit information, failing to 

maintain real property in good 

repair and condition, failing to 

provide acceptable 

management for a project, or 

failing to comply with applicable 

civil rights statutes and 

regulations 

Section 543b of the 

Housing Act of 1949, 

codified at 42 U.S.C. 

1490s(b)(3)(A) 

10/1/2011 4/7/2010 $60,000 

Failure to comply with certain 

provisions of the U.S. 

Warehouse Act 

U.S. Warehouse Act, 

codified at 7 U.S.C. 

254

10/1/2011 4/7/2010 $27,500 

Willful failure or refusal to 

furnish information, or willful 

furnishing of false information 

under section 156 of the Federal 

Agricultural Improvement and 

Reform Act of 1996 

Section 156 of the 

Federal Agricultural 

Improvement and 

Reform Act of 1996, 

codified at 7 U.S.C. 

7272(g)(5). 

10/1/2011 4/7/2010 $10,000 

Willful failure or refusal to 

furnish information or willful 

furnishing of false data by a 

processor, refiner, or importer 

of sugar, syrup and molasses 

Section 156 of the 

Federal Agriculture 

Improvement and 

Reform Act of 1996, 

codified at 7 U.S.C. 

7272(g)(5) 

10/1/2011 4/7/2010 $10,000 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 1 3 

Penalty (Name of Penalty) Authority (Statute) 

Date of Previous 

Adjustment 

Date of Current 

Adjustment Current Penalty Level ($ Amount) 

Filing a false acreage report that 

exceeds tolerance 

Federal Agriculture 

Improvement and 

Reform Act of 1996, 

Section 156 

10/1/2011 4/7/2010 $10,000 

Knowingly violating any 

regulation of the Secretary of 

the Commodity Credit 

Corporation pertaining to 

flexible marketing allotments for 

sugar 

Section 359h(b) of the 

Agricultural 

Adjustment Act of 

1938

10/1/2011 4/7/2010 $5,500 

Knowing violation of regulations 

promulgated by the Secretary 

pertaining to cotton insect 

eradication 

Section 104(d) of the 

Agricultural Act of 

1949

10/1/2011 4/7/2010 $5,500 

Making, presenting, submitting 

or causing to be made, 

presented or submitted, a false, 

fictitious, or fraudulent claim 

Program Fraud Civil 

Remedies Act of 1986, 

codified at 31 U.S.C. 

3802(a)(1) 

10/1/2011 4/7/2010 $5,500 

Making, presenting, submitting 

or causing to be made, 

presented or submitted, a false, 

fictitious, or fraudulent written 

statement 

Program Fraud Civil 

Remedies Act of 1986, 

codified at 31 U.S.C. 

3802(a)(2) 

10/1/2011 4/7/2010 $5,500 
A B B R E V I A T I O N S – A C R O N Y M S 

3 1 4 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

Abbreviations—Acronyms 

A 

A&O—Administrative and Operating 

AARC—Alternative Agricultural Research 

and Commercialization Corporation 

ACEP—Agricultural Conservation 

Easement Program 

ACFO-FS—Associate Chief Financial Officer 

for Financial Systems 

ADA—Antideficiency Act 

AR—Administrative Review 

AFMSS—Automated Fluid Mineral 

Support System 

AFR—Agency Financial Report 

AGI—Adjusted Gross Income 

AGPMR—Agriculture Property 

Management Regulation 

AMS—Agricultural Marketing Service 

APEC—Access, Participation, Eligibility 

and Certification 

APHIS—Animal and Plant Health Inspection 

Service 

APR—Annual Performance Report 

AQI—Agricultural Quarantine Inspection 

AQM—Acquisition Management 

ARRA—American Reinvestment and 

Recovery Act of 2009 

ARS—Agricultural Research Service 

ART—Administrative Reviews and Training 

ATA—Actual Time Automation 

B 

BDO—Barter Delivery Obligation 

BFDL—Black Farmers Discrimination 

Lawsuit 

BLM—Bureau of Land Management 

C 

C&A—Certification and Accreditation 

CACFP—Child and Adult Care Food Program 

CAP—Corrective Action Plan 

CBO—Certificates of Beneficial Ownership 

CCC—Commodity Credit Corporation 

CED—County Executive Director 

CEP—Community Eligibility Provision 

CFR—Code of Federal Regulations 

CI—Condition Index 

CIO—Chief Information Officer 

CIP—Continuous Improvement Plan 

CM—Continuous Monitoring 

CMDF—Construction Disaster Fund 

Supplemental 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 1 5 

CN—Child Nutrition 

CND—Child Nutrition Division 

CNPP—Center for Nutrition Policy and 

Promotion 

CNSTAT—National Academies’ Committee 

on National Statistics 

CO—Contracting Officer 

CoC—Cushion of Credit 

COF—County Office 

COR—Contracting Officer’s Representative

CORE—Core Accounting System 

CORP—County Office Review Program 

CRE—Coordinated Review Effort 

CRP—Conservation Reserve Program 

CSAM—Cyber Security Assessment and 

Management 

CSC—Centralized Servicing Center 

CSS—Country Strategy Statement 

CVV—Cash Value Voucher 

CY—Current Year 

D

DAFP—Deputy Administrator Farm 

Programs 

DC—Disallowed Costs 

DCP—Direct and Counter-Cyclical Payments 

DHS—United States Department of 

Homeland Security 

DM—Deferred Maintenance 

DM&R—Deferred Maintenance & Repairs 

DNP—Do Not Pay 

E 

E&T—Employment and Training 

EAAP—Economic Adjustment Assistance to 

Users of Upland Cotton Program 

ECP—Emergency Conservation Program 

eDRS—electronic Disqualified Recipient 

System 

EFCRP—Emergency Forestry Conservation 

Reserve Program 

eFMS—Electronic Funds Management 

System 

EO—Executive Order 

EPD—Easement Programs Division 

EQIP—Environmental Quality Incentives 

Program 

ERS—Economic Research Service 

EWPP—Emergency Watershed Protection 

Program 

F 

FAS—Foreign Agricultural Service 

FCIC—Federal Crop Insurance Corporation 

FDA—Food and Drug Administration 

FDCH—Family Day Care Homes 

FECA—Federal Employee Compensation Act 
A B B R E V I A T I O N S – A C R O N Y M S 

3 1 6 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

FFAS—Farm and Foreign Agricultural 

Services 

FFB—Federal Financing Bank

FFIS—Foundation Financial Information 

System 

FFMIA—Federal Financial Management 

Improvement Act 

FFMS—Federal Financial Management 

System 

FISMA—Federal Information Security 

Management Act 

FMD—Financial Management Division 

FMFIA—Federal Managers’ Financial 

Integrity Act 

FMMI—Financial Management 

Modernization Initiative 

FNS—Food and Nutrition Service 

FOA—Funding Opportunity Announcement 

FS—Forest Service 

FSA—Farm Service Agency 

FSFL—Farm Storage Facility Loan 

FSH—Forest Service Handbook 

FSIS—Food Safety and Inspection Service 

FNCS—Food, Nutrition and Consumer 

Services 

FSM—Forest Service Manual 

FSMC—Food Service Management 

Company 

FSRIA—Farm Security and Rural Investment 

Act 

FSRIP— Farm Security and Rural Investment 

Act Programs 

FSSP—Federal Shared Service Provider 

FTBU—Funds To Be Put to Better Use 

FY—Fiscal Year 

G 

G&A—Grants and Agreements 

GAO—Government Accountability Office 

GIPSA—Grain Inspection, Packers and 

Stockyards Administration 

GMS—Global Market Strategy 

GSA—General Services Administration 

H 

HHFKA—Healthy, Hunger-Free Kids Act 

HIMP—Hazard Analysis and Critical Control 

Point-based Inspection Models Project 

HUD—Department of Housing and Urban 

Development 

I 

IP—Improper Payments 

IPAC—Intragovernmental Payment and 

Collection 

IPERA—Improper Payments Elimination and 

Recovery Act of 2010 

IPERIA—Improper Payments Elimination 

and Recovery Improvement Act of 2012 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 1 7 

IPIA—Improper Payments Information Act 

of 2002 

IRS—Internal Revenue Service 

IT—Information Technology 

ITSD—Information Technology Services 

Division 

L 

L&WCF—Land and Water Conservation 

Fund 

LDP—Loan Deficiency Payment 

LEA—Local Educational Agency 

LFP—Livestock Forage Disaster Program 

M 

MAL—Marketing Assistance Loan 

MAR—Maximum Allowable Reimbursement 

MD&A—Management’s Discussion and 

Analysis 

MDD—Management Decision Date 

MDP—Miscellaneous Disaster Programs 

MILC—Milk Income Loss Contract 

MFH—Multi-Family Housing 

MFIS—Multi Family Housing Information 

System 

ME—Management Evaluation 

MINC—Management Interactive Network 

Connection 

MOU—Memorandum of Understanding 

MRP—Marketing and Regulatory Programs 

N 

NAL—National Agricultural Library 

NAP—Noninsured Assistance Program 

NAP—Noninsured Crop Disaster Assistance 

Program 

NASS—National Agricultural Statistics 

Service 

NCIC—National Crime Information Center 

NEST—National Easement Staging Tool 

NFAOC—National Financial and Accounting 

Operations Center 

NFS—National Forest System 

NHQ—National Headquarters 

NIFA—National Institute of Food and 

Agriculture 

NIST—National Institute of Standards and 

Technology 

NPS—National Payment System 

NRCS—Natural Resources Conservation 

Service 

NRE—Natural Resources and Environment 

NRHP—National Register of Historic Places 

NSLP—National School Lunch Program 

NTE—Not-to-Exceed 
A B B R E V I A T I O N S – A C R O N Y M S 

3 1 8 C R E A T I N G A U S D A F O R T H E 2 1 S T C E N T U R Y 

O 

OCFO—Office of the Chief Financial Officer 

OCIO—Office of the Chief Information 

Officer 

OGC— Office of the General Counsel 

OIG—Office of Inspector General 

OMB—Office of Management and Budget 

OPPM—Office of Procurement and 

Property Management 

OPS—Office of Policy Support 

P 

PAR—Performance and Accountability 

Report 

PHA—Priority Heritage Assets 

PHIS—Public Health Information System 

PIP—Practice Incentive Payments 

PMC—Plant Materials Centers 

POA&Ms—Plan of Action Milestones 

PP&E—Property, Plant, and Equipment 

PRRA—Payment Recapture/Recovery 

Auditing 

PRV—Plant Replacement Value 

PSU—Primary Sampling Unit 

PVO—Private Voluntary Organizations 

PY—Previous Year 

R 

RA—Rental Assistance 

RAP—Rental Assistance Program 

RBEG—Recovery Act Rural Business 

Enterprise Grant 

RBS—Rural Business and Cooperative 

Service 

RC&D—Resource Conservation and 

Development 

RD—Rural Development 

REE—Research, Education, and Economics 

RFA—Request for Application 

RHIF—Rural Housing Insurance Fund 

RHS—Rural Housing Service 

RMA—Risk Management Agency 

RME—Risk Management Education 

RMF—Risk Management Framework 

RO—Regional Office 

RORA—Regional Office Review of 

Applications 

RUS—Rural Utilities Service 

S 

SA—State Agency 

SAM—System for Award Management 

SAP—Salmonella Action Plan (SAP) 

SAP— Systems, Applications, and Products 

SBP—School Breakfast Program 

SBR—Statement of Budgetary Resources 
F I S C A L Y E A R 2 0 1 5 A G EN C Y F I N A N C I A L R E P O R T 

U . S . D E P A R T M E N T O F A G R I C U L T U R E 3 1 9 

SCRA—Supplier Credit Recovery Audit 

SDA—Socially Disadvantaged Farmers 

SED—State Executive Director 

SER—Single Effective Rate 

SFA—School Food Authority 

SFH—Single Family Housing 

SIP—Salmonella Initiative Program 

SITC—Smuggling, Interdiction and Trade 

Compliance 

SMI—School Meal Initiative 

SNAP—Supplemental Nutrition Assistance 

Program 

SOP—Standard Operating Procedure 

SOS—Schedule of Spending 

SP—Special Publication 

SPA—Special Program Area 

SSA—Security Stack Array 

STO—State Office 

SURE—Supplemental Revenue Assistance 

Payments 

SY—School Year 

T 

TAAF—Trade Adjustment Assistance for 

Farmers 

TANF—Temporary Assistance to Needy 

Families 

TB—Technical Bulletin 

TEFAP—Report of the Emergency Food 

Assistance Program 

TME—Target Management Evaluations 

TPMC—Tucson Plant Materials Center 

U 

ULO—Unliquidated Obligations 

USAID—United States Agency for 

International Development 

USDA—U.S. Department of Agriculture 

USGCB—U.S. Government Configuration 

Baseline 

USSGL—U.S. Standard General Ledger 

UTN—Universal Telecommunications 

Network 

W 

WebTA—Web-based Time and Attendance 

WEP—Water and Environmental Program 

WFM—Wildland Fire Management 

WFSU—Wildland Fire Suppression 

Management 

WIC—Special Supplemental Program for 

Women, Infants, and Children 

WRP—Wetlands Reserve Program