Rural Development U.S. Department of Agriculture 

1 

RURAL DEVELOPMENT

FY 2002 ANNUAL PROGRAM PERFORMANCE REPORT

The Rural Development mission area was established on October 13, 1994, by the Federal Crop Insurance Reform

and Department of Agriculture Reorganization Act. The mission area consists of three Agencies, the Rural 

Business-Cooperative Service (RBS), the Rural Housing Service (RHS), and the Rural Utilities Service (RUS). 

These agencies are responsible for delivering programs authorized by the Consolidated Farm and Rural 

Development Act; the Food Security Act of 1985; the Rural Electrification Administration Act of 1936 as amended;

the Cooperative Marketing Act of 1926; the Agricultural Marketing Act of 1946; the Housing Act of 1949; and the 

Rural Economic Development Act of 1990, as amended. 

The mission of Rural Development is to: Enhance the ability of rural communities to develop, to grow, and to 

improve their quality of life by targeting financial and technical resources in areas of greatest need through activities 

of greatest potential. 

This report addresses the performance goals included in the Rural Development FY 2002 and FY 2003 Annual 

Performance Plan, published in March 2002.

The following chart identifies the 5 goals of the mission area strategic plan and the page number of this report where 

each goal is addressed in this report: 

GOALS PAGE * 

1: Good Jobs and Diverse Markets. Rural Development will improve the quality of life in rural 

America by encouraging the establishment and growth of rural businesses and cooperatives. 

2 

2: Quality Housing and Modern Community Facilities. Rural Development will improve the 

quality of life of rural residents by providing access to technical assistance, capital, and credit for 

quality housing, and modern, essential community facilities. 

6 

 3: Modern Affordable Utilities. Rural Development will improve the quality of life of rural 

residents by promoting and providing access to capital and credit for the development and delivery 

of modern affordable utility services. 

13 

 4: Community Capacity Building. Rural Development will provide information, technical 

assistance, and, when appropriate, leadership to rural areas, rural communities and cooperatives to

give their leaders the capacity to design and carry out their own rural development initiatives. 

18 

5. Effective, Efficient Service to the Public. Rural Development will develop the staff, systems, 

and infrastructure needed to ensure high quality delivery of its programs to all rural residents. 

18 

* Page numbers may vary slightly depending upon the printer being used. 

Additional information on Rural Development and its programs can be found on the Internet at the mission areas 

home page, http://www.rurdev.usda.gov. The mission areas long-range strategic plan and Annual Performance Plan 

can also be found on the Internet. From the home page, click on “About Us” and then click on “Strategic Plans.” 

 Only Federal employees were involved in the development of this report.

FY 2002 Annual Performance Report March 2003
Rural Development U.S. Department of Agriculture 

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FY 2002 Annual Performance Report March 2003 

Goal 1: Good Jobs and Diverse Markets. Rural Development will improve the quality of life in rural America by 

encouraging the establishment and growth of rural businesses and cooperatives. 

MAJOR PROGRAM FUNDING: 

Rural Business-Cooperative Service 

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

PROJECTED 

FY 2002 

ACTUAL 

Business Programs $1.2b $2.903b $1.26b $960m 

Cooperative Development Programs $16m $36.5m $7.75m $7.75m 

* Amount of funding on which the targets were established. May not include all supplementals or recissions, which 

occurred during the fiscal year. 

Objective 1.1: Increase the availability and quality of jobs in rural areas. 

Key Performance Goal and Indicators FY 2000 

ACTUAL

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Create or save jobs in rural areas. 

Number of jobs created or saved: 

B&I Guaranteed Loans 

B&I Direct Loans 

IRP Loans 

Rural Business Enterprise Grants 

Rural Economic Development Loans 

Rural Economic Development Grants 

Rural Business Opportunity Grants 

29,118 

1,080 

29,266 

9,550 

2,967 

1,521 

N/A 

29,927 

1,816 

29,866 

39,292 

3,697 

624 

N/A 

31,049 

0 

29,206 

32,721 

2,444 

844 

N/A 

27,452 

23,868 

16,033 

2,745 

196 

6007

Community economic benefits (millions) 

B&I Guaranteed Loans 

B&I Direct Loans 

IRP Loans 

Rural Business Enterprise Grants 

$2,968 

$75.5 

$95.6 

$86.0 

$2,689 

$126.3 

$97.6 

$123.1 

$2,789 

$0 

$95.43 

$102.5 

$2,156.8 

$0 

$78 

$108.2 

IRP dollars lent by intermediaries/IRP dollars obligated 

to intermediaries (cumulative since Program inception). 78.5% 80.6% 75% 82% 

Non-IRP funds leveraged for each dollar of IRP funds. $3.12 $3.12 $3.76 $.53 

Number of businesses benefiting from RBEG program. 1,483 3,792 1,741 5,442 

Non-RBEG funds leveraged for each dollar of RBEG. $1.12 $1.29 $2.40 $1.53 

Non-REDLG funds leveraged per dollar of program 

funds: 

Loans 

Grants 

$4.56 

$3.00 

$6.44 

$5.29 

$3.00 

$3.00 

$4.47 

$2.78 

2002 Data: Data come from a variety of sources including: an internal management system, two internal accounting 

systems; the Program Loan Accounting System (PLAS) and the Guaranteed Loan System (GLS); Department of 

Labor employment estimates; and an external report, Revolving Loans for Rural America, by Robert Rapoza (the 

Rapoza report). Data are final and considered sufficiently accurate to be used for management decisions. Reports 

from PLAS and GLS are used by the OIG in the development of the mission area's audited financial statement. 

The number of jobs created or saved for the B&I guaranteed and direct programs, plus the RBEG program, is 

reported by the applicant/borrower and input into the Guaranteed Loan System (GLS) automated system by the field 
Rural Development U.S. Department of Agriculture 

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FY 2002 Annual Performance Report March 2003 

staff. The number of jobs created for REDLG is reported by the applicant/borrower and summarized by the 

National Office staff in the process of reviewing the loan or grant requests. 

Determining the number of jobs saved and created for the IRP is much more difficult. These are loans made to an 

intermediary lender who then uses the funds to make loans to entrepreneurs. As the loan is repaid to the 

intermediary, the funds are used to make new loans to other entrepreneurs. In order to recognize the impact of the 

relending of funds for this program on jobs, the findings of the Rapoza report have been used. This report indicates 

on page 70, Table 17, that the average cost per job, or amount of IRP loan per job, is $4,278. This translates into 

23,375 jobs per $100,000 in loan funds invested in an intermediary lender. To maintain a conservative estimate of 

the number of jobs created or saved, we have used 22.5 jobs per $100,000 invested. Table 13, page 68, of the 

Rapoza report indicates that the average term of an IRP loan to the ultimate recipient is 8.8 years. Since virtually all 

IRP loans to the intermediaries have a loan term of 30 years, the funds revolve 3.4 times during the term of the loan. 

The community economic benefits are calculated by multiplying the program level by 2.5. This multiplier is based 

upon a study done for the Department of Labor by the Department of Commerce. 

Analysis of Results: This goal was not met due, in part, to the failure to obligate the full amount of Business and 

Industry Guaranteed Loan program funds projected to be available. Demand for the various programs was not great 

enough to utilize the funds available. Outreach in the Rural Economic Development Loan and Grant program was 

not vigorously pursued because funding for the program was not made available until late in the fiscal year. In the 

Rural Business Enterprise Grant program the jobs were not realized due to a lower level of funding than was used to 

project the jobs projected. 

Description of Actions and Schedules: Projections for FY 2003 are based on actual accomplishments in FY 2002 

and the President’s Budget as presented to Congress. Delinquent loans present a serious problem. The agency is 

looking at deferral of loan principal, workouts, re-amortization, etc., to provide solutions to this problem. However, 

RBS must avoid interference with borrowers and lenders that could result in suits against the government. However, 

there are certain monitoring responsibilities, as required by regulation and the lender’s agreement that may provide 

solutions. 

Current Fiscal Year Performance: RBS will monitor performance progress quarterly and take necessary and 

appropriate actions in the event performance is less than expected. 

Program Evaluations: The agency conducted a file review of all Business Program loans in the Puerto Rico state 

office and the findings for that field review indicated serious improprieties in both loan making and servicing. As a 

result of the findings, a number of teams comprising field and national office personnel were dispatched to Puerto 

Rico. Tasks included reporting all delinquent loans. Twenty-four direct and forty-four guaranteed loans were found 

to be delinquent. In addition, the continuing sag in the world economy has adversely impacted a number of 

guaranteed borrowers. 

 
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FY 2002 Annual Performance Report March 2003 

Objective 1.2: Encourage and promote the use of marketing networks and cooperative partnerships to increase and 

expand business outlets. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Assist marketing networks and cooperative partnerships 

in the establishment and expansion of business outlets. 

Number of Technical assistance and educational 

services provided. 205 244 200 227 

Customer rated quality of technical assistance (0-5 

rating scale). 3.5 N/A 3

 

N/A 

Leverage of research expenditure (dollar value of 

RBS sponsored research per dollar of RBS research 

expenditures). $1.25 $1.44 1.25 

 

1.12 

Research and educational materials provided to 

customers. 51,137 53,594 25,000 74, 524 

Number of responses to inquires for information. 16,000 16,000 15,000 18,000 

Percentage of B&I Guaranteed funds obligated to 

cooperatives. 11% 3.9% 20% 

 

N/A 

2002 Data: Data are compiled from State reports, surveys, contracts let, shipment logs and customer service logs. 

The data are final. This information, while not audited, is considered sufficiently accurate to be used for 

management decisions. 

Analysis of Results: This goal was met. There was no set-aside for B&I Guaranteed Loans for Cooperatives; 

therefore, this goal was not measured. No technical assistance survey was administered, pending OMB survey 

approval. Research leverage figures resulted from a different mix and a smaller level of new research agreement 

funding than anticipated 

Current Fiscal Year Performance: RBS will monitor performance progress quarterly and take necessary and 

appropriate actions in the event performance is less than expected. 
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FY 2002 Annual Performance Report March 2003 

Objective 1.3: Direct Rural Development program resources to those rural communities and customers with the 

greatest need. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Direct Rural Development program resources to those 

rural communities and customers with the greatest need. 

Percentage of funds obligated in Empowerment 

Zones/Enterprise Communities and REAPs. 

B&I Guaranteed 

IRP 

RBEG 

2.0% 

4.7% 

20.3%

.8% 

10.8% 

12.7%

2.3% 

19% * 

22% **

2.6% 

8.8% 

15.0% 

Percentage of funds obligated for Mississippi 

Delta and Native American Initiatives: 

B&I Guaranteed 

IRP 

RBEG 

0 

0 

0 

MD NA

0% 1.1% 

21% 10% 

2% 6% 

MD NA

0% 5% 

21% 10% 

2% 6% 

MD NA

0% 1.1 % 

6.4% 9.6 % 

2.4% 6.9% 

* Should be 16.5% based on appropriated funds. The initial RBS target was 19% for the IRP, based on our 

budget request. However, the appropriation language only provided 16.5% earmarked for the program. The 

Agency obligated 10.8% for FY 2001. 

** The initial RBS target was 22% for the RBEG program based on our budget request. However, the appropriation 

language only provided 17.2% earmarked for the program. The Agency actually obligated 12.7% for FY 2001. 

2002 Data: Data are compiled from RDAPTS, the Program Loan Accounting System (PLAS), and state surveys. 

PLAS, while not audited by OIG, provides reports used by OIG in their audit of the mission areas financial 

statement and information in PLAS is generally considered reliable. While data from RDAPTS and state surveys is 

considered soft, it is considered sufficiently accurate to be used for management decisions. 

Analysis of Results: The goal for the IRP and RBEG funding for the use of funds in EZ/EC and REAP zones was 

overly optimistic and there were not enough applications to accomplish the goal. The goal for use of B&I 

Guaranteed Loan funds to Native Americans was not met due to a lack of applications sufficient to accomplish the 

projected goal. 

Description of Actions and Schedules: The goals for use of the IRP and RBEG programs in EZ/EC and REAP 

zones and B&I Guaranteed Loan assistance to Native Americans have been adjusted to reflect a more reasonable 

historical level of demand and use for FY 2003 and 2004. 

Current Fiscal Year Performance: RBS will monitor performance progress quarterly and take necessary and 

appropriate actions in the event performance is less than expected. 

Program Evaluations: None. 

 
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FY 2002 Annual Performance Report March 2003 

Objective1.4: Manage the loan portfolio in a manner that is efficient and effective. 

Key Performance Goal and Indicator FY 2000 

ACTUAL

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Manage the B&I portfolio effectively to minimize the 

delinquency rate. 

Delinquency rate (excluding bankruptcy cases) 4.2% 3% 3% 10.29% 

2002 Data: Data are reliable and final. RDAPTS is a non-accounting management system, which contains a variety 

of data related to Business Programs, such as the number of jobs created or saved. Data in RDAPTS is input by the 

field staff and contains edits to require completion of mandatory fields. Manual reports from State Directors will be 

used to obtain data regarding several of the performance measures. This information will be less reliable because it 

is obtained manually and its accuracy cannot be verified. However, confidence in these data is high enough to be 

acceptable for the purposes for which it is used. Therefore, the information is considered sufficiently accurate to be 

used for management decisions.

Analysis of Results: The target goal was not met. The general decline in the economic conditions which had a 

heavy impact on businesses was not anticipated and had a huge impact on the ability of the businessess in rural areas 

for which the B&I Guaranteed Loan Program is intended to serve. 

Description of Actions and Schedules: The Agency is working with lenders to offer every potential loan servicing 

option to borrowers in an effort to assist them to recover from the adverse economic conditions. The target 

performance measure for 2003 and 2004 is below the current delinquency rate but above the goal for FY 2002. We 

are optimistic that hopes for an improved economy and our continued effort to assist troubled businesses will result 

in a more reasonable delinquency rate for FY 2003 and 2004. 

Current Fiscal Year Performance: The national office will monitor at lease quarterly for achievement levels. 

Program Evaluations: The national office conducts a Business Programs Assessment Review of 10 states per year 

to determine if the program intent is being properly met by interviewing both lenders and borrowers and by 

reviewing the States’ loan processing and servicing activities. Areas found to be deficient are documented, 

recommendations for corrections are made and national office staff performs monitoring to ensure conformance. 

Goal 2: Quality Housing and Modern Community Facilities. Rural Development will improve the quality of life 

of rural residents by providing access to technical assistance, capital, and credit for quality housing and modern, 

essential community facilities. 

MAJOR PROGRAM FUNDING: 

Rural Housing Service 

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

ESTIMATED* 

FY 2002 

ACTUAL 

Single Family Housing Programs $3.357b $3.51b $4.38b $3.5b 

Rural Rental Housing Programs $941m $859m $1b $1b 

Community Facilities Programs $302m $535m $478m $573m 

* Amount of funding on which the targets were established. May not include all supplementals or recissions that 

occurred during the fiscal year. Starting with the FY 2001 budget, the S&E budget for all Rural Development 

agencies are combined. Therefore S&E and FTE figures, at the agency level, cannot be provided separately. 
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FY 2002 Annual Performance Report March 2003 

Objective 2.1: Improve the quality of life for the residents of rural communities by providing access to decent, safe, 

sanitary and affordable housing. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL

Improve the quality of life of residents of rural communities by 

providing access to credit for decent, safe, and sanitary housing.

Rural households receiving financial assistance to 

purchase a home of their own. 

45,420 44,073* 53,000* 42,069* 

Total Units Sec. 502 Direct and Guaranteed 502 and Sec. 

504 Loan and Grant 58,018 57,234** 69,000** 56,017** 

Number of houses financed through the Section 502 

Direct Loan Program 17,026 14,638* 15,000* 14,013* 

Number of houses financed through the Section 502 

Direct Loan (Natural Disaster) Program 519 143* N/A 42* 

Number of houses financed through the Section 502 

Guaranteed Loan Program 29,123 29,326* 39,000* 28,056* 

Number of existing houses improved (Section 504 Loans 

and Grants) 10,360 11,762* 11,700* 10,014* 

Number of existing houses improved (Section 504 Loans 

and Grants Natural Disaster) 990 507* N/A 143* 

Number of jobs created (Direct 502) 17,520 16,171 

16,500 16,039 

Number of jobs created (Guaranteed 502) 14,323 14,438 24,000 24,721 

* These figures are initial loans only, since subsequent loans do not create additional houses. 

**This figure is total units obligated, including subsequent loans. 

2002 Data: Data on the number of homes financed or improved came from Obligations Report 205 which is derived 

from Rural Development Finance Office obligation records, which are reliable and used by OIG in the development 

of the mission area’s financial audit. The number of jobs created was based on a construction industry multiplier of 

2.448 jobs per new home built. The multiplier, obtained from the National Association of Home Builders, is not 

subject to governmental audits. All data are final. 

Analysis of Results: The goal overall and most targets were met for the direct loan program, but were not met for 

the guaranteed loan program. The target of 53,000 loans assumed the use of all of the funds allocated for the 

program. However, all funds were not used because the number of loans closed for the whole year under the Section 

502 Guaranteed Loan Program (28,356) was 28 percent, or 10,944 loans, less than the 39,000 target for the Section 

502 Guaranteed Loan Program. This decline is attributable to factors in the RHS program such as the lack of an 

automated underwriting capability, the statutory prohibition on cash-out or equity withdrawal refinancing and fees 

higher than other similar government affordable housing programs. According to the Mortgage Bankers Association 

of America, more than 50 percent of those refinancing their mortgages have taken out equity in the process. Section 

502 loans do not permit equity withdrawals when refinancing an existing RHS loan. The Direct 502 program 

missed the target by 987 units (7 percent). The primary reason for this is that the average loan amount was slightly 

higher than anticipated, due to an increase in the cost of housing and also partially due to the smaller number of 

leveraged loans, which made our average loan amount a little higher. The number of jobs created, which is based on 

the number of new construction homes, is under target by 461 (3 percent). Since this number is derived from the 

number of new construction houses, it was affected by the same higher costs. Fewer houses built means fewer jobs. 
Rural Development U.S. Department of Agriculture 

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FY 2002 Annual Performance Report March 2003 

Descriptions of Actions and Schedules: Efforts are underway to improve the acceptance of USDA guaranteed 

mortgages by the mortgage origination and investment industry by increasing their similarity to other governmental 

insured or guaranteed mortgages. This includes development of an automated underwriting system, which we are 

proposing to have completed and deployed in FY 2003. In addition, the FY 2003 fee rate is reduced to 1.5 percent 

for new loans and to 0.5 percent for refinances. 

Current Fiscal Year Performance: All current performance indicators for this goal will continue for FY 2003. 

RHS will continue to monitor performance progress quarterly and take necessary and appropriate actions in the 

event performance is less than expected. 

Program Evaluations: N/A 

Key Performance Goals and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL;

Improve the quality of life for the residents of rural 

communities by providing access to decent, safe, sanitary and 

affordable rental housing. 

Total Number of units funded for new construction (FY)* 5,357 2,457 5,500 5,349 

Sec. 515 1,626 1,578 1,700 1,796 

Sec. 514/516 680 855 1,000 806 

Sec. 514/516 Natural Disaster 156 24 0 0 

Sec. 538 2,895 0 2,800 2,747 

Total Number of units funded for rehabilitation (FY)* 7,100 8,243 8,400 8,685 

Sec. 515 4,990 5,511 5,500 5,488 

Sec. 514/516 696 1,003**** 1,200 1,064  

Sec. 533 1,414 1,729 1,700 2,133 

Direct resources to those rural communities and customers 

with the greatest need. 

Average tenant income. $7,775 $7,980 $8,135 $8,135** * 

Income of tenants who do not receive Rental Assistance. N/A N/A N/A N/A 

Income of tenants who receive Rental Assistance. N/A N/A N/A N/A 

Number of tenants who are rent overburdened. N/A 74,377 N/A 74,377*** 

Number of households not displaced by loss of rental 

assistance (number of renewals). 38,489 43,300 42,330 39,454 

Percent of tenants not displaced by loss of rental 

assistance. 100% 100% 100% 100% 

Number of tenants living in affordable, decent, safe, and 

sanitary housing. 429,288** 435,246** 433,246** 461,509** 

*For purposes of clarification, the wording of this indicator has been changed from "Number of units funded" to 

Number of units selected for funding." The new wording does not create a new indicator, but merely clarifies it. 

Numbers from previous years are correct according to the new wording. 

** Estimated, actual data not available. 

***These data are from the FY 2002 Fair Housing Occupancy Survey, which is done in January. Therefore the data 

are from January 2002 and is the same as was used last year. If possible, it will be replaced with new data, when the 

January 2003 report is run. 

****Under the FLH program, the number of units funded also reflects those units needing FY 2002 funds to cover 

construction cost overruns via subsequent loans. 
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FY 2002 Annual Performance Report March 2003 

2002 Data: The number of new units built and the number of units rehabilitated were derived from Multi-Family 

Housing staff’s internal records, which are not audited but are considered reliable for management purposes. The 

data on rental assistance was obtained from the 205 Obligations Report, which is subject to audit by OIG. System 

development needed to provide data for those indicators showing “Not Yet Available” was completed during FY 

2001, with full implementation of the new version of the Multi-Family Information System (MFIS) completed in 

November 2002. Data for these indicators will be available for use as FY 2003 performance indicators. 

Analysis of Results: Most targets were met or exceeded. In the program by program breakdown, the 538 program 

missed the target by only 53 units out of 2,800 (2 percent). It is significant that this is a NOFA driven program that 

used all of its available funds. The number of units is only an approximation of the units that might come in under a 

NOFA. The section 515 rehabilitation target was missed by only 12 units out of 5500 (0.2 percent). ). The number 

of 514/516 units for rehabilitation was under target by 136 (11.3 percent). Although, we missed the target for the 

rehabilitation number, it is an estimate, and all requests for rehabilitation received were funded. The number of 

514/516 units for new construction missed the target by 194 or 19 percent. The estimated number of units is an 

approximation of the units that will be submitted under the NOFA. As all funds for the program were obligated, the 

lower number of units funded is a reflection of the higher per unit cost of the projects. The higher costs can be 

attributed to larger than anticipated increases in building components, higher land costs, and decreased participation 

from other sources. The number of households not displaced by loss of Rental Assistance (RA), i.e., the number of 

renewals, was slightly below target because the number of actual renewals was less than projected. Projections 

made prior to the fiscal year are estimates and are dependent upon inflation and rates of usage of RA by project 

owners. Additionally a small amount of remaining FY 2001 RA funds was used to pre-fund FY 2002 RA needs at 

FY 2001 year end. It is important to note that no tenants were displaced by loss of rental assistance and that 100 

percent of FY 2002 expiring RA units were renewed. The RA not needed for renewals was used for additional RA 

units in existing and new MFH projects. 

Description of Actions and Schedules: Target performance will be established for the various tenant income 

indicators with available data from the new update of MFIS, which was fully implemented in November 2002. 

Other available MFIS data will be examined for possible inclusion as FY 2003 performance indicators. Funding for 

both the section 515 RRH program and the 514/516 FLH programs are flexible funding streams whose use can be 

changed from new construction to rehabilitation or vice versa. Additionally, the section 515 program uses allocated 

funds for preservation purposes. As such, making estimates of the number of new units constructed, rehabilitated or 

preserved is necessarily a flexible estimate. The cost of a unit funded varies significantly between new construction, 

rehabilitation and preservation. In addition to tracking performance by the number of units funded, it will be 

necessary to include the percentage of funds obligated under each of the program. A successful year under the 

programs should reflect funding approximately the number of units shown as a goal, but more importantly, all funds 

appropriated fully utilized. Similarly under the section 521 RA program, program success will be measured both in 

approximating the goal of units funded, but also fully utilizing all program appropriations. 

Current Fiscal Year Performance: Some indicators will be rewritten for FY 2003 to better reflect program 

performances. In review, certain indicators were determined to be not measurable, while other, readily measurable 

performance indicators were available. RHS will monitor performance progress quarterly and take necessary and 

appropriate actions in the event performance is less than expected. 

Program Evaluations: N/A 

 
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FY 2002 Annual Performance Report March 2003 

Objective 2.2: Improve the quality of life in rural America by providing essential community facilities. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide new or improved essential community facilities 

Number of rural residents with improved standards of living 

through new or improved essential community facilities (in 

millions). 8.1 12 13 10 

Number of jobs created or retained. 4,493 5,814 7,200 4,473 

Community Health 

Number of new or improved health care facilities. 116 156 180 139 

Number of new or improved elder care facilities 32 47 50 37 

Number of beds available at new or improved elder care 

facilities. 2,558 

935 

4,000 NA 

Emergency Services 

Number of new or improved fire and rescue facilities. 104 161 170 155 

Number of new or improved fire and rescue vehicles. 128 212 200 252 

Education and Child Care 

Number of new or improved child care centers. 55 63 50 54 

Number of children served by new or improved child care 

centers. 4,049 

2,167 

3,500 NA 

Number of new or improved schools. 44 67 70 70 

2002 Data: Community Facility Program data were derived from the Community Facility staff’s internal tracking 

system in unison with the Guaranteed Loan System (GLS). The RHS field staff inputs the data into GLS. It does 

not contain edits for all reported data elements; it is not audited, and reports from it are not used by the auditors. 

Data from the Rural Community Facilities Tracking System (RCFTS) was moved into GLS through a data 

conversion process in August 2002. Although the agency considers this soft data, it is used in managing the program 

and is considered reliable for the purposes for which it is used. The data are final. 

Analysis of Results: Target performance assumed full usage of the program funds, which did not occur. As a 

result, the targets were generally not achieved and the goal was not met. CF direct loans and CF grants were fully 

obligated, however, only 54 percent of guaranteed loan funds were utilized. We are providing training and tools for 

field staff members to market CF guaranteed loans at the local level. States are actively conducting outreach 

meetings with local lenders to promote the program. 

The performance indicators for the Community Facilities programs are difficult to predict because the outcomes 

depend on the mix of projects funded. Program funds have been used for more than 75 different purposes, including 

child care centers, assisted living facilities, hospitals, health clinics, fire stations, libraries, telecommunications, 

school facilities, community buildings. The mix of projects funded depends on community needs across the country 

and the timing of loan and grant applications. The FY 2002 variance of actual performance compared with the 

targets reflects the unpredictability of the project mix and is no cause for alarm. A review of the previous two fiscal 

years activity shows that these indicators do not move in unison with the program levels. 

In FY 2002, CF invested approximately $573 million to help rural communities develop 1,311 essential community 

facilities for public use. Through leveraging with both public and private partners, program funds were stretched to 

address the needs of more rural communities. Community health care services, fire, rescue and public safety, and 

community support services continue to be a high priority for funding in addressing the needs of rural communities. 
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FY 2002 Annual Performance Report March 2003 

In FY 2002, program emphasis was placed on promoting rural education. As a result, 91 projects were funded for 

schools and libraries amounting to almost $42 million from combined CF programs. This included funding for 

libraries, schools for people with mental or physical disabilities, dormitories, school maintenance and equipment 

service centers, and all-purpose college campus buildings. 

Program resources in FY 2002 continued to invest heavily in rural health care facilities as $179 million in combined 

program resources was used to fund 139 new or improved health facilities, from which seniors and residents in 

medically under-served areas greatly benefited. Projects funded include nursing homes, boarding homes for elderly 

with ambulatory care, assisted living facilities, and adult day care centers. Program emphasis will continue to serve 

the ever-increasing rural elderly population. 

Description of Actions and Schedules: RHS will continue efforts to increase utilization of Community Facility 

Guaranteed Loan Program funds through extensive outreach to lenders. Outreach efforts made in FY 2001 and 

2002are starting to produce results. Outreach efforts have continued through meetings with local lenders, training 

States on conducting outreach meetings, and providing States with CDs on the outreach efforts at the training 

meeting.

Current Fiscal Year Performance: RHS will monitor performance periodically, and take any corrective action 

needed. CF has examined and re-evaluated their performance indicators and will be combining some indicators and 

eliminating others in order to better reflect program performance. 

 

Program Evaluations: None performed. 

Objective 2.3: Maximize the leveraging of loan funds to increase the number of rural residents assisted by Rural 

Development programs. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Maximize the leveraging of loan funds to increase the 

number of rural residents assisted by Rural Development 

programs. 

Number of borrowers assisted through leveraging 

(Direct 502). 6,448* 7,753 10,000 4,916 

Number of Guaranteed lenders participating in 

low-income housing finance. 2,400 2,400 2,400 2,400 

Number of Rural Home Loan Partnerships. 177 239 180 NA 

Number of CF funding partnerships. 866 452 1,400 NA 

Number of CF borrowers assisted through leveraging. 492 414 790 NA 

* A new automated leveraged loan report was developed in FY 2001, so that information could be accessed directly 

from the data-warehouse. Using this new system, we find that previous years totals were over-reported. In addition, 

there was confusion as to what qualifies as leveraging. The number for FY 2000 should be 5,069. 

2002 Data: The actual performance data for the Direct Section 502 program comes from the Single Family Housing 

staff’s internal tracking system, which is not an audited system. Data on the Guaranteed Section 502 comes from a 

FOCUS ad hoc report. The number of Rural Home Loan Partnerships is not available at this time. It comes in as 

reports from each state, and not all states have reported to date. Community Facilities data are unavailable for 

determining leveraging as a result of conversion of data from the Rural Community Facilities Tracking System 

(RCFTS) to the Guaranteed Loan System (GLS). The data are final. 

Analysis of Results: Community Facilities is unable to report figures on leveraging because the reporting system 

does not have access to the data elements needed to summarize leveraging. Targets for leveraging were increased 
Rural Development U.S. Department of Agriculture 

12 

FY 2002 Annual Performance Report March 2003 

based on increased funding without considering that funding from other sources is diminished when a natural 

disaster occurs or an area is economically distressed. In the SFH 502 program, a more accurate reporting system for 

leveraged loans has lowered the anticipated figure for FY 2002 as well as the figures for prior years (see footnote 

above). In addition, the target of 10,000 leveraged loans for FY 2002, was overly optimistic, given previous 

performance. 

Description of Actions and Schedules: The number of Rural Home Loan Partnerships has been based on data 

maintained in the State Offices because there has been no reliable method of tracking this on an automated basis. In 

order to fix this, the Single Family Housing Division has implemented a system of collecting identifying numbers 

for these partners in order to more accurately track the active partnerships. This is a change to be implemented 

during FY 2003. 

Current Fiscal Year Performance: We are reviewing these performance indicators for inclusion in the FY 2003 

Performance Plan. We will be monitoring the results of our efforts to better capture these data and evaluate the 

future inclusion of these elements in future reports. 

Program Evaluations: None conducted during FY 2002. 

Objective 2.4: Manage the loan portfolio in a manner that is efficient and effective. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide effective supervision to minimize delinquencies 

and future loss. 

First-year delinquency rate (SFH Direct). 3.2% 3.2% 3.8% 2.7% 

Number of RRH projects with accounts more than 180 

days past due. 153* 146 130 145 

* Includes 18 properties in inventory. 

2002 Data: Data were derived from Rural Development Finance Office loan servicing reports, which are reliable 

and used by OIG in their audits of the mission area. The SFH first-year delinquency rate, as of September 30, 2000, 

was obtained from a FOCUS ad hoc report. The data are final. 

Analysis of Results: The target was exceeded for the first-year delinquency rate for Single Family Housing Direct 

loans. The performance goal was not met for RRH. The dollar amount of delinquency over 180 days past due 

decreased from FY 2001 by $1,842,000 (12 percent), however, the number of delinquent projects was 145, down 

slightly from the FY 2001 actual, but missing the 2002 target by 15 units (10 percent). This reflects delinquent 

accounts that previously would have been written off. These accounts are now being pursued for collection through 

initiatives provided by the Debt Collection Improvement Act of 1996. and therefore are still counted as delinquent. 

(Note: Rural Development’s FY 2000 and FY 2001 Performance Plan erroneously stated the performance indicator 

for RRH as less than 180 days past due, rather than more than 180 days past due.) 

Description of Actions and Schedules: No special corrective action is necessary. 

Current Fiscal Year Performance: All current performance indicators for this goal will continue for FY 2003. 

RHS will continue to monitor performance progress at least quarterly and take necessary and appropriate actions in 

the event performance is less than expected. 

Program Evaluations: None conducted in FY 2002.
Rural Development U.S. Department of Agriculture 

13 

FY 2002 Annual Performance Report March 2003 

Goal 3: Modern Affordable Utilities. Rural Development will improve the quality of life of rural residents by 

promoting and providing access to capital and credit for the development and delivery of modern affordable utility 

services. 

MAJOR PROGRAM FUNDING: 

Rural Utilities Service 

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

PROJECTED 

FY 2002 

ACTUAL 

Water and Environmental Programs $1.337b $1.410b $1.540b $2.1b 

Telecommunications Programs $670m $669m $669m $669m 

Broadband Loans N/A $100m $80m $80m 

Distance Learning and Telemedicine Programs $25m $26.8m $328m $42m 

Electric Programs $2.117b $2.616b $4.071b $4.074b 

* Amount of funding on which the targets were established. May not include all supplementals or recissions that 

occurred during the fiscal year. 

Objective 3.1: Provide financing for modern, affordable, water and waste disposal services in rural communities. 

Key Performance Goal and indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide rural residents with modern, affordable water 

and waste services. 

Loans to develop or expand rural water systems to 

provide quality drinking water in compliance with 

the Safe Drinking Water Act. 590 613 600 775 

Loans to develop or expand rural waste disposal 

systems to provide quality waste disposal service in 

compliance with State and Federal environmental 

standards. 

325 309 300 415 

Total jobs generated as a result of facilities 

constructed with W&W funds. 39,771 40,600 40,150 63,838 

2002 Data: These data are considered final and are considered reliable. Data on the number of loans for water 

systems and for waste disposal systems are obtained from the Program Loan Accounting System (PLAS). Data on 

jobs generated, however, also requires data from the Rural Community Facilities Tracking System (RCFTS). 

Analysis of Results: The goal was exceeded. 

Current Fiscal Year Performance: Performance for FY 2003 is expected to be sufficient to meet targets. 

Program Evaluations: None. 

Objective 3.2: Provide financing for modern, affordable telecommunications, including Broadband and Distance 

Learning/Telemedicine services, in rural communities. 
Rural Development U.S. Department of Agriculture 

14 

FY 2002 Annual Performance Report March 2003 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide modern, affordable telecommunications 

services to rural communities. 

Number of new subscribers receiving service. * 154,899 188,908 180,000 85,003 

Jobs generated as a result of facilities 

constructed with Telecommunication funds. 15,410 15,387 16,000 15,387 

Number of subscribers with improved service. 275,196 315,308 670,000 330,074 

Number of new subscribers receiving service. 

** 

N/A 78,524 106,500 148,459 

* Refers to Telecommunications subscribers. 

** Refers to Broadband subscribers. 

2002 Data: Data related to the number of new residents and businesses receiving service comes from project files 

on the loan applications received. While these data do not come from an automated system, it is centrally 

maintained and is considered reliable by management. The jobs generated data are determined using a methodology 

devised by the Economic Research Service. The basic formula is 23 jobs per $1 million of funds invested. 

Analysis of Results: The targets for the number of subscribers receiving new and improved service were not met. 

The targets were derived using past year’s experience and by developing a per subscriber relationship to the amount 

of loan funds available in the target year. While the actual amount of funds loaned in FY 2002 was the anticipated 

amount used in developing the target, average amount of investment per subscriber increased substantially. This is a 

probable result of increased investment in system upgrades, replacements and improvements versus actual loan 

funds for new subscribers. Since the calculation is based on the average for the previous year, a variance from year 

to year can be expected. The number of jobs created target was just slightly lower than the target. It is anticipated 

that future targets will be met. 

. 

Description of Actions and Schedules: RUS is taking actions, including outreach, to ensure that the funds available 

for FY 2003 will be used and the targets will be met. 

Current Fiscal Year Performance: Performance for FY 2003 is expected to be sufficient to meet targets.

Program Evaluations: None. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide distance learning and telemedicine services, 

utilizing modern telecommunications technologies, to 

rural communities. 

Number of schools receiving distance learning 

facilities. 

277 590 840 794 

Number of health care providers receiving 

telemedicine facilities. 

138 236 570 422 

2002 Data: These data are obtained from RUS program records of projects funded, applications received, and 

although not part of an automated system, are considered reliable for management purposes. The data are final. 
Rural Development U.S. Department of Agriculture 

15 

FY 2002 Annual Performance Report March 2003 

Analysis of Results: The variance from the target in the number of schools and health care providers is relatively 

small and the target was essentially met. The target for these indicators was based on historical information 

obtained from previous years applications; a per dollar relationship is then derived to set the target for the coming 

year. Since the calculation is based on the average for the previous year, a variance from year to year can be 

expected. 

Description of Actions and Schedules: Outreach activities by the national office and rural development state 

offices will be increased. 

Current Fiscal Year Performance: RUS targets are based on full utilization of funds and are expected to be met. 

Program Evaluations: None. 

Objective 3.3: Provide financing for modern, affordable electric service to rural communities. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Provide modern, affordable electric service to rural 

residents and communities. 

Number of rural electric systems upgraded. 137 220 187 176 

Number of consumers benefiting from system 

improvements (millions). 2.3 3.5 2.8 2.9 

Jobs created as a result of facilities constructed 

with Electric funds. 48,700 45,000 57,700 54,350 

2002 Data: The data are obtained from RUS program records of projects funded and applications received and are 

considered reliable for management purposes. The data are final.

Analysis of Results: The number of rural electric systems upgraded is less than the projected target because the 

average size of the loans and loan guarantees made was larger than projected. With the advent of three and four 

year construction work plans, borrowers loans are covering longer periods of time and, as a result, are for increased 

loan and guarantee amounts. Also, the loan activity for the generation and transmission (G&T) borrower 

community has increased as capital is provided for much needed generation and transmission projects to serve rural 

America. An increase in the number and size of G&T loan guarantees reduces the availability of loan guarantees for 

distribution borrowers. All loan funds for the electric program were expended. 

The number of residential consumers benefiting from system improvements is less than projected. The increase in 

the dollar amount of the loans and loan guarantees results in a smaller number of rural utility systems receiving 

loans, thus a smaller amount of residential consumers will benefit. Again as stated above, it must be noted that all 

loan funds for the electric program were expended. 

The number of jobs created as a result of facilities constructed with Electric funds was only slightly less than 

projected, less than 6%. This slight reduction can be attributed to the reduction in the number of loans because of 

their size as stated above. 

 

Current Fiscal Year Performance: Performance for FY 2003 is expected to be sufficient to meet targets. 

Program Evaluations: PART Assessment by OMB. 

 

Objective 3.4: Direct Rural Development resources to those rural communities and customers with the greatest 

need. 
Rural Development U.S. Department of Agriculture 

16 

FY 2002 Annual Performance Report March 2003 

Key Performance Goals and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Direct program resources to those rural communities 

with the greatest need. 

Number of water and waste assistance projects in 

the identified persistent poverty counties 219 236 230 255 

Total W&W project cost $341m $308m $305m $413m 

RUS amount $249m $240m $236m $336m 

Special initiative – number of projects and amount of 

W&W funding (in millions)

EZ/EC 33 ($46) 59($49) 49($43) 34($32) 

Colonias 36 ($19) 32 ($20) 33($20) 34($20) 

Pacific Northwest 0 0 0

Alaskan Villages 24$20 18$20) 28(24) 23($24) 

Guaranteed Loans 9($11) 6($5) 6(5) 6($2) 

Electric loans (number and amount) to clients serving 

persistent poverty counties (dollars in millions). 

72 

$615 

98 

$829 

89 

$760 

69 

$893 

Electric loans (number and amount) to clients serving 

persistent out-migration counties (dollars in millions) 

73 

$321 

97 

$530 

90 

$390 

70 

$560 

2002 Data: The data for RUS assistance provided in persistent poverty counties are considered final and are 

considered reliable. Data on numbers and amounts of RUS loans and grants are obtained from the Program Loan 

Accounting System (PLAS); data on total project costs are obtained from the Rural Community Facilities Tracking 

System (RCFTS). Data on special initiatives are from PLAS. Data are final. 

Analysis of Results: The actual number of electric loans to clients serving persistent poverty counties is less than 

the projected amount. The lower number of total loans approved in FY 2002 lead to a lower than projected number 

of loans to utilities providing service to persistent poverty counties. This lower number of loans resulted in a lower 

dollar amount for clients serving persistent poverty counties. 

The actual number of electric loans to clients serving out-migration counties is less than the projected amount. The 

lower number of total loans approved in FY 2002 lead to a lower than projected number of loans to utilities 

providing service to out-migration counties. This lower number of loans resulted in a lower dollar amount for 

clients serving out-migration counties. 

Description of Actions and Schedules: No specific additional actions are necessary to meet the FY 2003 targets. 

Current Fiscal Year Performance: Performance for FY 2003 is expected to be sufficient to meet targets. 

Program Evaluations: None. 

 
Rural Development U.S. Department of Agriculture 

17 

FY 2002 Annual Performance Report March 2003 

Objective 3.5: Maximize the leveraging of loan funds to increase the number of rural residents assisted by Rural 

Development programs. 

Key Performance Goal and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL

Maximize the leveraging of loan funds to increase the 

number of rural residents assisted. 

Leveraging of telecommunications financial assistance 

(private investment to RUS and RTB funding). $6.51:1 $5.7:1 $5:1 $4.6:1 

Leveraging of telemedicine and distance learning 

financial assistance (private investment to RUS 

funding). 

$1.21:1 $.94:1 $2:1 $.78:1 

Leveraging of rural electric financial assistance (private 

investment to RUS funding). $2.88:1 $.70:1 * $1:1 $ .97:1 

2002 Data: These data are derived from RUS records, is verifiable, and is final. The telecommunications leverage 

ratio is available from RUS Form 479, Part F. This information is provided by RUS and is considered reliable. 

Analysis of Results: The Electric Program target goal of $1 of private investment for every $1 of federal 

government funds advanced was reached as was the telecommunications target. The leveraging target for the 

Distance Learning and Telemedicine program was not met. For FY 2002, the percent of required matching funds 

from an applicant was lowered from 30% of the total project amount to 15% of the total eligible application amount. 

This resulted in the reduction of leveraged funds per dollar of grant funds. In the Telecommunications program, the 

target was essentially met. The variance in this leveraging value is extremely small. The ratio of $4.6:1 is within 

the historical average of $5:1.

Description of Actions and Schedules: No specific actions are necessary to meet the FY 2003 targets. 

Current Fiscal Year Performance: RUS expects to fully utilize the total funds available for FY 2003 and expects 

to meet the leveraging targets. 

Program Evaluations: None 
Rural Development U.S. Department of Agriculture 

18 

FY 2002 Annual Performance Report March 2003 

Goal 4: Community Capacity Building: Rural Development will provide information, technical assistance, and, 

when appropriate, leadership to rural areas, rural communities and cooperatives to give their leaders the capacity to 

design and carry out their own rural development initiatives. 

MAJOR PROGRAM FUNDING: 

Community Development 

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

PROJECTED 

FY 2002 

ACTUAL 

Rural Empowerment Zone and Enterprise 

Community 

$15m $14.967m $14.967 $14.967m 

 

Key Performance Goals and Indicators FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Jobs created or saved in EZ/EC and REAP communities. 3,354 11,997 1,000 7,093 

Maximize Resources Available in EZ/EC’s. 

Ratio of non-EZ/EC grants to EZ/EC grants 10.7:1 17.77:1 7:1 or 

greater 

16.65:1 

2002 Data: Information regarding job creations and the success of EZ/EC communities in obtaining funding from 

non-EZ/EC sources is derived from OCD’s benchmark management system. The EZ/EC program requires that a set 

of performance benchmarks be established and maintained for each EZ/EC community. Each community reports on 

their progress in meeting the benchmarks through the web-based benchmark system. While the system is dependent 

upon the data input by the recipients of the assistance, the data in the system is considered sufficient for 

management decisions. All information is final. 

 

Analysis of Results: The targets were greatly exceeded for FY 2002. 

Current Fiscal Year Performance: Targets are expected to be met for FY 2003. 

Program Evaluations: None. 

Goal 5: Effective, Efficient Service to the Public "Rural Development will develop the staff, systems, and 

infrastructure needed to ensure high quality delivery of its programs to all rural residents." 
Rural Development U.S. Department of Agriculture 

19 

FY 2002 Annual Performance Report March 2003 

Objective 5.1: Create and sustain a work environment that develops and fosters partnerships, cooperation, full and 

open communications, teamwork, mutual respect, and maximum individual development. 

Key Performance Goals and 

Indicators

FY 2000 

ACTUAL

FY 2001 

ACTUAL

FY 2002 

TARGET

FY 2002 

ACTUAL

Developed policies and 

practices which are employee 

and family friendly. 

 Develop common 

 Policies with FSA and 

 NRCS in support of the 

 Service Center Initiative. 

Partnership 

Council 

approval 

obtained 

regarding 

common policies 

on hours of duty, 

telecommuting 

and leave. 

Common 

regulation on 

hours of duties 

published. 

Training 

conducted via 

teleconference. 

Telecommuting 

policy document is 

in the clearance 

process. Leave and 

other common 

policies are on hold 

pending NFAC 

decision and 

guidance on future 

direction. 

Publish 

common 

policies 

regarding 

leave, 

telecommuting 

and 

grievances. 

Common policies 

remain on hold 

pending NFAC 

guidance on future 

direction. All three 

policies had to be 

rewritten in RD 

format. All three 

are now in the 

clearance process: 

telecommuting in 

USEC office, leave 

and grievance in 

HR. 

Provide fair and equitable 

treatment to all customers 

Provide civil rights 

training to employees 

68% of 

employees 

trained. 

93% of employees 

not trained in 

FY2000 received 

training. 

Train 100% of 

new 

employees. 

100% 

Reduce backlog of 

complaints 

Reductions in 

complaints of 

38% Program 

and 34% EEO. 

36% of complaints 

filed were closed. 

40% of 

complaints 

filed will be 

closed. 

45% 

Provide efficient, timely 

personnel support. 

Implement CAMS. Basic modules 

implemented in 

37 States. 

Basic modules 

implemented 

nationwide. 

Move from 

client-server 

to web-based 

architecture. 

Completed (Jul-Aug 

’02) 

Implement an automated 

staffing system. 

Research 

performed. 

Participate in 

USDA evaluation 

team to assess 

alternate systems. 

Complete 

evaluation 

(with USDA). 

Help draft 

Completed (AprAug ’02) 
Rural Development U.S. Department of Agriculture 

20 

FY 2002 Annual Performance Report March 2003 

Participation ongoing. USDA-wide 

guidance. 

2002 Data: Information regarding the development of personnel regulations came from the files of the Human 

Resources staff. The information related to civil rights training and EEO complaints is provided by the Civil Rights 

staff. Information on program complaints is provided by the State Civil Rights Managers. All information is final. 

Analysis of Results: The joint development of common HR policies with FSA and NRCS remain on hold pending 

NFAC guidance on future direction. As a result, in order to provide needed guidance to RD managers and 

employees, all three policies (telecommuting, leave, and grievance) had to be rewritten in RD Instruction format. 

All new employees are fully trained each year. All new employees were trained during this fiscal year. Civil Rights 

backlog was reduced by more than 40%. 

Description of Actions and Schedules: Telecommuting policy is in the clearance process (USEC office). Leave 

and grievance policies are also in clearance (HR). It is anticipated that all three will be published no later than the 

2nd quarter of FY 2003. 

Current Fiscal Year Performance: All targets are expected to be met. 

Program Evaluations: None. 

 

Objective 5.2: Develop information systems which support cost-effective delivery of programs and maximize the 

availability of information to all employees. 

Key Performance Goal and Indicators FY 2000 

ACTUAL

FY 2001 

ACTUAL

FY 2002 

TARGET

FY 2002 

ACTUAL

Enhance and build information systems 

which support the mission area’s 

programs. 

Implement the Rural Utilities Loan 

Servicing System (RULSS). 

45% of 

requirements 

operational. 

N/A 100% of 

requirements 

operational. 

The proof of 

concept and the 

business data 

management 

requirements 

were completed. 

Implement the new Guaranteed Loan 

System (GLS). 

Phases II, III and 

IV completed. 

Phase V, Funds 

Reservation 

System, 

completed. 

GLAS 

System 

retired. 

Electronic 

Data Interchange 

implemented

. 

93% of GLS 

web 

processes 

operational, 

the remainder 

to be 

completed in 

2003. 

93% of GLS 

web processes 

are now 

operational. 

Develop Program Funding Control 

System (PFCS) 

Evaluation of 

commercial 0ffthe-shelf systems 

completed. 

Deferred FY 

2001 targets 

to FY 2002. 

Select and 

install 

commercial 

software and 

The commercial 

software has 

been purchased. 

The integration 
Rural Development U.S. Department of Agriculture 

21 

FY 2002 Annual Performance Report March 2003 

Request for 

proposal 

completed. 

begin 

developing 

unique 

capabilities. 

and 

enhancements 

will begin in FY 

2003. 

Implement the provisions of the EFile legislation. Completed 

required GPEA 

and freedom to 

E-File plans to 

achieve 

compliance. 

Implemented web farm. 

Converted 

existing 

forms to 

web enabled 

format. 

Complete 

automation 

support 

activities for 

GPEA and 

freedom to 

E-File 

requirements. 

All legislative 

mandated dates 

were met during 

FY 2002 on 

schedule. 

2002 Data: Actual performance is based on measurable project accomplishments as established and monitored by 

the Information Technology staff. There is no variance to consider and the assessment of results is accurate. The 

assessment of results, although not audited, is considered by management to be reliable. Information is final. 

Analysis of Results: The original RULSS FT 2002 target was established prior to the termination of support 

contract under the predecessor CUBS initiative. The scope of the RULSS effort was redefined; with this 

redefinition of scope, twenty-three milestones have been defined and 8 have been fully completed to date. Although 

this results in a lower percentage of completion than that originally targeted under the CUBS project the new 

RULSS project is considered to be on schedule and within budget. 

Current Fiscal Year Performance: Targets for FY 2003 are expected to be met. 

Program Evaluations: None. 

Objective 5.3: Improve financial management to ensure fiscal accountability. 

Key Performance Goals and 

Indicators

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY 2002 

ACTUAL 

Manage the Mission Area’s Financial 

Resources Efficiently and Effectively 

Percent of disbursements made 

electronically. 

53% 58% 75% 58% 

Credit Reform - % of programs 

with clean opinion form OIG 

16% Subject to OIG 

approval. 

100% Subject to 

OIG audit. 

Reach management decision on 

OIG financial management audit 

recommendations within 6 months 

of audit report issuance 

90% 77% 90% 87% 

Percent of material FMFIA 

deficiencies corrected timely

75% 50% 50% 63% 

Receive an unqualified opinion on 

RD’s financial statement. 

Qualified 

opinion rec. 

Unqualified 

opinion received 

Clean opinion 

received. 

Unqualified 

opinion 

received.
Rural Development U.S. Department of Agriculture 

22 

FY 2002 Annual Performance Report March 2003 

2002 Data: The data comes from the systems and files of the Chief Financial Officer and is final. The percentage 

of EFT disbursements is based on the percentage of the number of EFT disbursement to the total number of all 

disbursements made during FY 2002. Data for management decisions on audit recommendations comes from the 

Audit Report Tracking System. FMFIA material deficiency data come from the annual FMFIA report. Audited 

financial statements provide data for credit reform and unqualified opinion goals. 

Analysis of Results: Software has been implemented to disburse all loan and grant funds electronically (EFT). 

Treasury’s EFT disbursement target for agencies to attain is 75 percent. Accordingly, for FY 2002, Rural 

Development established a 75 percent EFT disbursement target. Rural Development did not meet the 75 percent 

target; disbursing only 58 percent of total disbursements via EFT. This is predominately due to the Single Famil7y 

Housing (SFH) program staff'’ policy of issuing hard copy checks for subsequent advances on direct SFH loans. 

The established target date for obtaining a management decision with 6 months on 86 percent of the audits was not 

met. This was due to some recommendations requiring further analysis/clarification by OIG or Rural Development 

in order to reach management decisions. 

Rural Development succeeded in exceeding the 50 percent target for the performance indicator “percent of material 

FMFIA deficiencies corrected timely”. For FY 2002 Rural Development also anticipates meeting the indicators 

related to Credit Reform and receiving an unqualified opinion on the audited financial statements. 

Description of Actions and Schedules: It is anticipated the percent of EFT disbursements will increase as programs 

continue to expand the practice of using EFT. Rural Development will review specific loan and grant program 

disbursement policies and determine appropriate supplemental EFT disbursement guidance to be issued to Rural 

Development servicing offices. 

Rural Development will continue to coordinate with applicable audit agencies to reach management decisions on 

audit recommendations within six months. 

Current Fiscal Year Performance: All indicators will be included in the FY 2003 Annual Performance Plan. 

Programs Evaluation: OIG Audit 85401-6-Ch, Rural Development’s Consolidated Comparative Financial 

Statements for Fiscal Years 2001 and 2000, dated February 2002. During FT 2002, Rural Development completed a 

Federal Managers’ Financial Integrity Act (FMFIA) compliance review of the Program Loan Accounting System 

(PLAS) financial system. 

 

Objective 5.4: Improve procurement process and effectiveness. 

Key Performance Goals and 

Indicators

FY 2000 

ACTUAL 

FY 2001 

ACTUAL 

FY 2002 

TARGET 

FY2002 

ACTUAL 

Improve procurement process and 

effectiveness. 

Increase use of performance 

based contracts. 

N/A 14% of new 

contracts were 

performance 

based. 

12% of contract 

dollars awarded on 

basis of 

performance 

standards. 

The FY 2002 

target was 

exceeded. 

Expand on-line procurement. N/A 78% were 

posted to 

FedBizOpps 

All full and open 

competition 

solicitations 

available on the 

The FY 2002 

target was 

exceeded. 
Rural Development U.S. Department of Agriculture 

23 

FY 2002 Annual Performance Report March 2003 

internet. 

2002 Data: Data for the Procurement Based Service Contract (PBSC) indicator are reviewed from procurement 

actions in the reporting systems for Rural Development field offices and contractual reports of Procurement 

Management Division (PMD procurement system for new contract actions valued at $100,000 or more). Data for 

the FedBizOpps indicator is from reporting requirements of synopses in the Federal Business Opportunity 

(FedBizOpps) system and the Commerce Business Daily (CBDnet) system for the field offices and PMD. The 

Procurement Management Division deems the information reliable. 

Analysis of Results: Targets were exceeded for FY 2002. 

Current Fiscal Year Performance: All targets for FY 20033 are expected to be met. 

Program Evaluations: None.