Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan June 30, 2001

RURAL DEVELOPMENT

FY 2001 and FY 2002 ANNUAL PERFORMANCE PLANS

The Rural Develop ment mission area, was established on October 13, 19 94, by the Federal Crop Insurance R eform

and Department of Agriculture Reorganization Act. Rural Development is one of seven mission areas within the

Department. It consists of three agencies, the Rural Business-Cooperative Service (RBS), the Rural Housing

Service (RHS), and the Rural Utilities Service (RUS). The mission area also administers the rural portion of the

Administration's Empowerment Zones and En terprise Communities (EZ/EC) Initiative and the National Rural

Develo pmen t Partnersh ip, a nation wide ne twork o f rural dev elopment leaders and offic ials comm itted to the vita lity

of rural areas. The mission area’s programs are authorized by a variety of statutes which are identified with the

discussion of each g oal.

The mission of Rural Development is to: Enhan ce the ability of rural commu nities to dev elop, to gro w, and to

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

of greatest potential.

Rural Development achieves its mission by helping rural individuals, communities and businesses obtain the

financial and technical assistance needed to address their diverse and unique needs. This financial and technical

assistance may come directly from Rural Development or, with Rural Development's assistance, from one of the

numerous public and private organizations involved in the development of rural communities. Rural Development

agencie s deliver ov er 40 diffe rent loan, lo an guar antee, and grant pro grams in the areas o f business d evelopm ent,

cooperative development, housing, community facilities, water supply, waste disposal, electric power, and

telecommunications, including distance learning and telemedicine. Rural Development staff also provide technical

assistance to rural families and community leaders to ensure success of the projects it finances. Rural Development

staff are also responsible for the servicing and collection of a loan portfolio that exceeds $80 billion. Additional

information regarding Rural Development can be found in its strategic plan.

This Plan is a combined Plan for all of the agencies in the mission area. This plan is based on Rural Developm ent’s

Long -Rang e Plan for 2000-2 005, w hich wa s publishe d in September 2 000 to re place the S trategic Plan 1997-2 002. 

Primary revisions were changing Management Initiatives 1-3 to Goals 4 and 5, and the elimination of Management

Initiative 4. 

Several performance indicators utilized in past plans have been discontinued. Also, several performance indicators

have be en adde d to this Plan . These inc lude: 1) an indicator re lated to first-ye ar delinqu encies for the single family

housing program; 2) a delinquency indicator for the multi-family housing program; 3) indicators to address Major

Management Challenges related to the Rural Rental Housing and Electric programs; 4) an indicator for the

establishm ent of partnerships re lated to com munity develop ment tec hnical assistan ce; and 5 ) an indica tor related to

the development of new work schedules and leave policies. The language for several indicators supporting the Rural

Rental Housing and the Telecommunication programs have been rewritten to provide clarity.

This plan was developed solely by Federal employees. No non-Federal entities were involved in its preparation.

Efforts to Improve Data: With a history of being a provider of loans and grants, Rural Development’s automated

systems are primarily accounting systems and are generally not designed to capture the type of data desired for

reporting under the Government Performance and Results Act (GPRA). The major non-accounting system used by

the agencies is the Rural Community Facilities Tracking System (RCFTS). This system, which has been in place

for man y years, is de pende nt upon field staff inpu tting and m aintaining the data an d there are few qu ality contro ls in
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 2 June 30, 2001

place to ensure accuracy of the data. With few other sources of data available, the agencies have had no choice but

to rely on this data for GPRA purposes. Efforts are underway to replace RCFTS with a new automated system. The

timeline fo r develop ing the ne w system is depend ent upo n availab le fundin g. 

Efforts to Improve Inform ation Security: Security o f all agency information resou rces is being accom plished in

concert w ith policies an d standar ds being publishe d by the Departm ent’s Offic e of the Chief Information Officer. 

Rural Development has established a web farm in St. Louis as a part of the Service Center Modernization Initiative

(SCM I) and in c onjunc tion with th e Farm Service A gency and the N atural Re sources C onserva tion Serv ice. Efforts

to secure th e three w eb sites ope rating un der the au spices of SCMI are und erway a nd are b eing exp edited as a re sult

of the imposed tim eframe s containe d within th e Gove rnmen t Paperw ork Elim ination A ct and the Freedom to E- File

Act. The Department’s efforts to define the level of security required to host an internet web site where information

can be disseminated and collected from the public are continuing and the needed technologies evaluated. Rural

Development is taking steps to comply with the Department’s policies and standards as they are published.

Baseline Indications of Need: Indications of the extensive nature of rural America's needs are provided by selected

baseline d ata below . Rural D evelopm ent prog rams w ill contribute to the amelioration o f these con ditions bu t,

without huge increases in funding, cannot markedly impact the macro indicators of disparity.

From the Am erican Housing Survey (19 97 data):

• 4.4 percent of all rental units exhibit crowding (more than one person per room ).

• 1,817,000 household s reported mo derate to severe ph ysical housing p roblems.

• The median household income for nonmetro renters was $17,840, as compared to $22,749 for urban

renters.

• 65 percent of households with incomes below the poverty level pay more than 30 percent of their income

towards hou sing costs.

• 25 percent of n onmetro re nters pay over 4 0 percent of inco me to hou sing costs.

• In 1,475 ,000 oc cupied n onme tro housin g units, the p rimary so urce of d rinking w ater was "n ot safe to

drink."

From the Rural Utilities Service:

• Revenu e per mile for urb an utility systems is 8 times h igher than for rura l systems.

• Only 1 7 percen t of rural libra ries are con nected to the Interne t, as comp ared to 80 percent o f libraries in

cities with populations exceeding 250,000.

From the Economic Research Service:

• Poverty is 2.7 percentage points higher in rural areas than in urban areas (15.9 percent rural; 13.2 percent

urban).

• Poverty in the rural so uth is 18.7 percent.

• The unemp loyment rate is 9 percent higher in rural areas than in urban areas (1998).

• 46 percent of rural Black children live in poverty (1996).

• 3.2 million rural children live in poverty (1996).

• 6.3 million rural households have household incomes under $15,000.

• More than 20 percent of rural people in poverty were either full time workers or were in a family with at

least one full time worker.

• 64 percent of ru ral people in pov erty worked at least part time or had a fam ily memb er who w orked at least

part time.

• Rural household incom e averaged 25 percent less than urban hou sehold income (1996 ).
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 3 June 30, 2001

Key External Fac tors: The ability of the mission area to achieve the goals of its strategic plan can be impacted by

a variety of factors beyond its control. Primary external factors affecting all programs are:

Macroeconomic influences - Changes in the economy can have a major impact on our financial programs and the

ability of our customers to meet their obligations. A rise in unemployment generally impacts low-income families

first. Inflation ca n impa ct the dispo sable income of lo w-income fam ilies and m ay also ad versely im pact the ab ility

of small communities and businesses to meet their obligations if their operating expenses are increasing faster than

their income. Changes in the cost of money have the greatest impact on the mission area. As interest rates rise or

fall, there is a clear impact on the cost of the financing provided by the mission area and the ability of new

customers to afford the assistance they need. For instance, high interest rates reduce the ability of our existing direct

loan borrowers to graduate to private sector credit. Changing interest rates will impact the subsidy rates of each

program. Lower interest rates reduce the subsidy cost of direct loans, and increase the subsidy cost of some of the

guaranteed programs. Rural Development can partially ameliorate the impact of adverse economic conditions by

increasing its loan servicing activities to minimize de linquencies.

Reductions in funding - Reductions in the level of funding provided to the Rural Development agencies will reduce

their ability to help rural America and to achieve their goals. Likewise, reductions in funding for Salaries and

Expenses will limit the ability of the mission area to provide the staff and other resources needed to deliver the

programs or achieve the anticipated level of performance. Reductions in program funding can be partially offset by

efforts to increase the leveraging of agency funds with other sources of funds. Reductions in Salaries and Expenses

can only be offset by the elimination of lower priority work efforts which may, in the long run, be to the detriment

of the govern ment and its customers.

Coordina tion of Cross C utting Prog ram Ac tivities: The partnerships and coordination with other organizations

required for program delivery varies among agencies and by programs within the agencies. Most of the direct

financial programs do not require a partner for program delivery. We are, however, seeking to ensure that

placemen t of our funds is coo rdinated with, and supports the delivery of, the funds of oth er entities. We are also

seeking to leverage our funds to the maxim um extent possible with other lenders. Guaranteed program s are

generally made th rough local finan cial institutions w ith coord ination at the local level. The missio n area strateg ic

plan is the basis for the development of State/Tribal strategic plans required by the 1996 Federal Agriculture

Improvement and Reform Act. Rural Development State Directors have developed these plans with their various

public an d private p artners to su pport the coordin ated delive ry of all reso urces, bo th financia l and tech nical.

Other USDA agencies with which the mission area works closely are the Economic Research Service; Farm Service

Agency; Natural Resources Conservation Service; Forest Service; Foreign Agricultural Service; Agricultural

Marketing Service; Cooperative State Research, Education and Extension Service; and National Agricultural

Statistics Service. Outside of the Department, coordination is often done with the Department of Housing and

Urban D evelopm ent, Econom ic Developm ent Adm inistration, Environm ental Protection Ag ency, Small Business

Administration, Department of Labor, Department of Energy, Federal Energy Regulatory Commission, and Federal

Communications Commission.

Strategic Goals: The Rural Development strategic plan consists of five goals. Goals 1-4 support Goal 4 of the

Departmental strategic plan —“Enhance the capacity of rural residents, communities, and businesses to prosper.” 

Goal 5 of the mission area plan supports Goal 5 of the Departmental plan -– “Operate an efficient, effective and

discrimin ation-free organiza tion.”

Goal 1: G ood Job s and Diverse Mark ets. “ Rural Development will improve the quality of life in rural America
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 4 June 30, 2001

by enco uraging the establishment an d grow th of rural b usinesses an d coop eratives.”

Goal #1 of the mission area plan is specific to the programs administered by RBS. The agency is responsible for

delivering business development programs authorized by the Consolidated Farm and Rural Development Act, Food

Security Act of 1985, Rural Electrification Administration Act of 1936, and cooperative development programs

authorized by the Cooperative Marketing Act of 1926 and the Agricultural Marketing Act of 1946.

Objectives of Goal 1:

1.1 Increase the av ailability and quality of jobs in rural areas.

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

business outlets.

1.3 Direct Rural Development program resources to those rural communities and customers with the greatest need.

1.4 Manage the loan portfolio in a manner that is efficient and effective.

Program Activities supporting G oal 1: Business Pro grams and Coopera tive Developm ent Program s.

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001*

ACTUAL

FY 2002*

ESTIMATE

Funding (Appropriated)

Program $1.368b $1.172b* $2.903b* $1.118b*

S&E $28.462m $27.949M ** **

FTEs (Appropriated) 304 304 ** **

*Includes supplemental for FY 2001. Also includes $15 million in FY 2001, and $15 million in FY 2002, for Rural

Empowerment Zone and Rural Enterprise Community Grants. These funds are administered by the Office of

Community Development rather than RBS.

** Starting with the FY 2001 budget, S&E for all Rural Development agencies are combined and neither the S&E

nor FTE figures can be p rovided separately . 

BUSINESS PROGRAMS

Business and Industry (B& I) Guaranteed Loans. This program finances business and industrial acquisition,

construction, conversion, enlargement, repair or modernization in rural unincorporated areas and incorporated areas

with a population of 50,000 or less and the imm ediately adjacent urbanized and urbanizing areas. Loan fund s are

used to finance th e purchase an d developm ent of land, easem ents, rights-of-way, b uildings, equipm ent, facilities,

mach inery, sup plies and m aterials plus fu nds can be used to pay start-u p costs and to supply workin g capital. 

Eligible applicants include individuals as well as public, private, or cooperative organizations organized for profit or

nonprofit, Indian tribes, and corporate entities. Loans may be guaranteed by RBS with a maximum percentage for

guarantee of 80 percent for loans of $5 million or less, 70 percent for loans between $5 million and $10 million, and

60 perc ent for loan s exceed ing $10 million up to $25 m illion. 

Business and Industry Direct L oans. The criteria and loan purposes are basically the same as for the guaranteed

loans except for, recreation and tourism, hotels and motels, qualified agricultural production, and cooperative stock

purchase loans, all of which are eligible loan purposes under the B&I Guaranteed Loan Program, and are not
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 5 June 30, 2001

eligible pu rposes un der the B &I Dire ct Loan Program . These loa ns are ava ilable to app licants wh o are un able to

obtain the needed assistance from a private lender with a guarantee. The maximum loan amount to any one

borrower is $10 million.

Intermediary Relending Program (IRP) Loan s. These d irect loans ar e made to interme diary bo rrowers (i.e. private

nonprofit corporations, State or local government agencies, Indian tribes, and cooperatives) who, in turn, relend the

funds to rural businesses, private nonprofit organizations and others meeting the criteria for ultimate recipients. IRP

loans are limited to rural unincorporated areas, and cities or towns with a population of 25,000 or less. Financial

assistance from the intermediary to the ultimate recipient must be for economic development projects, the

establishment of new businesses and/or the expansion of existing businesses, creation of employment opportunities

and/or saving e xisting jobs in rural areas.

Rural Economic Development Loans (REDL). Zero interest loans are provided to any RUS electric or telephone

entity (that is not delinquent on any Federal debt or in bankruptcy proceedings) to relend to ultimate recipient

projects at ze ro interest. Pro ceeds are used to p rovide ru ral econo mic dev elopment and/o r job creatio n projects

including , but not lim ited to, proje ct feasibility stud ies, start-up co sts, incubato r projects, an d other re asonab le

expenses.

Rural Econom ic Development Gran ts (REDG). Grants are provided to borrowers that re-loan the funds, at zero

interest rates, to businesses in unincorporated areas or small towns with a population of 2,500 or less. The revolving

loan funds provide needed capital to nonprofit entities and municipal organizations to finance community facilities

in rural areas which promote job creation, promote education and training to enhance marketable job skills, or

extend o r impro ve med ical care. Gr ant fund s are used to establish rev olving lo an fund program s to prom ote

econom ic developm ent in rural areas.

Rural Bu siness Enterprise Gra nts. Grants are available to public bodies, private nonprofit corporations, and

Federally-recog nized Indian tribal g roups to enco urage the dev elopmen t of small and em erging private bu siness

enterprises; the creation , expansio n, and o peration o f rural distan ce learnin g netwo rks; and to provide adult

education or job training related to potential employment or job advancem ent for adult students. These grants are

limited to u nincorp orated are as and inc orporate d areas w ith a popu lation of 50 ,000 or le ss and the im mediate ly

adjacent urbanized and urbanizing areas. Grant funds may be used for the acquisition and development of land,

construction of buildings, purchase of equipment, obtaining of needed technical assistance, start up capital in the

form of a loan from the establishm ent of revolving loan funds, refinan cing, services and fee s. Grants are also

available to qualified nonprofit organizations for the provision of technical assistance and training to rural

comm unities for the purpo se of improv ing passenger tran sportation services or fac ilities.

Rural Bu siness Opportu nity Grants. Grants are made to public bodies, nonprofit corporations, Indian tribes, and

cooperatives for training, planning, and technical assistance for rural economic development in unincorporated areas

and rural towns with a population of 10,000 or less. Funds may be used to pay costs of providing technical

assistance for rural business, economic planning for rural communities, or training for rural entrepreneurs or

econom ic developm ent officials.

Program Activity: Bu siness Progra ms FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

PROJECTED

FY 2002

ESTIMATE

Program Level $1.365b $1.139b *$2.852b $1.097b
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 6 June 30, 2001

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

 Create or save jobs in rural area.

Number of jobs created or saved:

B&I G uaranteed Loans *

B&I Direct Loans **

IRP Loa ns 

Rural B usiness En terprise Gr ants

Rural Eco nomic D evelopm ent Loans 

Rural Eco nomic D evelopm ent Grants 

36,507

1,163

25,245

11,464

3,783

1,677

29,118

1,080

29,266

9,550

2,967

1,521

77,103

1,787

29,270

7,880

2,967

1,140

28,360

0

29,202

11,112

2,960

0***

Comm unity economic benefits (m illions)

B&I Guaranteed Loans

B&I Direct Loans

IRP Loans

Rural B usiness En terprise Gr ants

$3,109

$65.3

$82.5

$91

$2,568

$75.5

$95.6

$86.0

$6,795

$125

$95.64

$101.7

$2,500

0

$95.43

$101.4

IRP dollars lent by intermediaries/IRP

dollars obligated to intermediaries

(cumulative since Program inception). 89.41% 78.5% 75% 75%

Non-IRP funds leveraged for each dollar

of IRP fun ds. $3.76 $3.12 $3.76 $3.76

Number of businesses benefitting from

RBE G prog ram. 2,331 1,483 1,284 1,741

Non-RBE funds leveraged for each dollar

of RBE G funds. $2.40 $1.12 $2.40 $2.40

Non-REDLG funds leveraged per dollar

of prog ram fun ds. 

Loans

Grants

$3.00

$3.00

$4.56

$7.16

$3.00

$3.00

$3.00

$3.00

Assist marketing networks and cooperative

partnerships in the establishment and expansion of

business outlets.

Percentage of B&I Guaranteed funds

obligated to coo peratives. 4.4% 11% 20% 20%

Direct Rural Dev elopment prog ram reso urces to

those rural communities and customers with the

greatest need.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 7 June 30, 2001

Percent o f funds o bligated in

Empo wermen t Zones/Enterp rise

Comm unities:

B&I Guaranteed

IRP

RBEG

1.3%

12.1%

21.5%

2.0%

4.7%

20.3%

2.3%

19%

22%

2.3%

19%

22%

Percentage of funds obligated for other

Presiden tial or Dep artmen tal Initiatives: 

B&I Guaranteed

IRP

RBEG

REDLEG

37.6%

48.0%

48.8%

47.3%

10.0%

75.9%

71.2%

70.9%

10%

20%

20%

2%

10%

20%

20%

2%

Manage the B&I portfolio effectively to minimize

the delinquency rate.

Delinquency rate (excluding bankruptcy

cases). 4.8% 4.2% 3% 3%

* Includes $1.162 billion of B&I Guaranteed Loan Program Disaster and Emergency Assistance.

** The B&I Direct Loan Program is not funded in FY 2002.

*** The REDG Program is not funded due to lack of cushion of credit income to support the program.

Discussion of P erforma nce Goa ls: Building competitive businesses in rural areas helps achieve the Department’s

goal to “E xpand econom ic and trad e oppo rtunities for a gricultura l produc ers and o ther rural re sidents.”

The development of performance measures for this program is complicated by the wide variety of businesses which

can be assisted. The key factor, however, for all of the Business and Industry programs is the creation or saving of

jobs. Performance indicators related to job creation/saved are established for all programs. While the amount of

funding available for these programs will have minimum impact on National employment data, there will be a

significant impact on the unemployment rates and the economy in some rural areas. We are unable to measure the

quantitative impact at this time.

Reaching those communities and individuals with the greatest need for job creation is a major concern of the

agency. Several measures relate to funding provided to EZ/EC communities or to regional initiatives established by

the President to add ress unique eco nomic pro blems.

One of the O bjectives in the mission a rea’s strategic plan is the intent to direct bu siness program resources to those

communities and customers with the greatest need. This includes areas that have been consistently poor, have high

unem ploym ent rates, hav e out-m igration, ha ve expe rienced n atural disasters, or expe rienced e conom ic stress due to

Federal action, such as the closure of military bases. Several performance measures relate to this Objective. RBS

has established two strategies to ensure funds are targeted to these communities and customers. The Administrator

has established and monitors annual priority performance goals for State delivery of programs which include

targeting of program resources to target communities and customers. In addition, priority selection criteria that

supports those targeted areas and customers have been established, are published in the program regulations, and are

used in fundin g decisions.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 8 June 30, 2001

A secon d Objec tive is to ma nage the business lo an portfo lio in a ma nner that is e fficient and effective. T his

Objective is addressed in the performance measures in terms of delinquency rates. Performance of the loan

portfolio is continually monitored within RBS. States are delegated approval authority based on National Office

assessment of State employee qualifications and training in delivery of programs. In addition, a Business Programs

Assessment Review was initiated in Fiscal Year 1998 for the purpose of reviewing State Office administration of

Business Programs within the States. Quarterly review of delinquent loan portfolios and State servicing of the cases

is reviewe d by the Nationa l Office an d assistance is provide d to the Sta tes, as need ed, to ensu re effective and time ly

servicing decisions are made.

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as a fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget will be used when establishing obligations of FY 2001 funds. Funds expended in any particular program

could be impacted, however, by the movement of funds from one program to another as authorized by the Rural

Community Advancement Program.

RBS is concerned about the quality of jobs created. While it is unable to measure job quality, it is giving funding

priority to projects that supp ort jobs with averag e wage rates that ex ceed Federal m inimum wage rates.

RBS , as part of the FY 20 02 Presid ent’s Bu dget fun ding req uest, prop oses to pro cure and distribute off-the-shelf

software that prov ides credit and financ ial analysis, including the ab ility to develop spread sheets of business

transactions. Acquisition of this software will improve the quality of the portfolio through more informed and

consistent credit analyses b y field staff for loan origina tion and loan serv icing activities.

Coordina tion with other Fed eral program s is not required but stron gly encoura ged for the delive ry of the Busin ess

Programs. Funded businesses must meet the standards of the Occupational Safety and Health Administration

(OSHA) or, if construction is involved, the Environmental Protection Agency in the same sense that they must meet

the zoning and construction requiremen ts of the State, county, or local government. These are issues of concern

handled by the applicant’s engineer or staff. Other Federal agencies, such as the Economic Development Agency,

or State agencies m ay be potential pa rtners for joint funding if a specific project meets their req uirements.

Verification and Validation: Data to measure the performance measures will come from the following automated

accounting sy stems:

Program Loan Accounting System (PLAS)

Guaranteed Loan System (GLS)

Rural Community Facilities Tracking System (RCFTS)

These systems are used by agency managers in their management of the programs. PLAS and GLS are accounting

systems d esigned to man age the ag ency’s p ortfolio of d irect and g uarantee d loans. T hese system s contain a variety

of data ed its to minim ize the risk o f inaccura te data bein g placed in the system s. These tw o system s provide reports

used by the Office of the Insp ector Ge neral (OI G) in their a nnual au dit of the m ission area’s financial statement.

RCFT S is a non-acco unting ma nageme nt system wh ich contains a variety o f data related to Busin ess Program s,

such as the numb er of jobs c reated or sa ved. Da ta in RCFTS is inp ut by the fie ld staff and does no t contain ed its to

verify the accuracy of the data. Manual reports from State Director’s will be used to obtain data regarding several
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 9 June 30, 2001

of the performance measures. This information will be less reliable because it is obtained manually and its accuracy

canno t be verified . Howe ver, con fidence in this data is high enoug h to be ac ceptable f or the pu rposes fo r which it is

being used.

Jobs created or saved is an important indicator for the Business Programs and the estimate of the jobs being created

or saved is determined for each loan during processing. The exception to this is the IRP program. On average, each

$100,000 of IRP money loaned by the intermediary results in one ultimate recipient (business) loan. This loan

provides jobs for approximately 20-25 people. The average loan to an ultimate recipient is 8.82 years. Based on an

average term of 8.82 years per loan to ultimate recipients, the total loan funds available to the intermediary revolves

3.4 times over the 30-year life of the loan to the intermediary. Therefore, approximately 76.5 jobs are established

per $100,000 over the 30 -year life of the loans to the intermediaries (22.5 * 3.4 =76.5).

The economic impact of the Business Programs is also an important indicator. The Department of Labor estimates

an econ omic m ultiplier effec t of $2.50 for every dollar of B usiness loa ns or gran ts provide d. 

COOPERATIVE DEVELOPMENT PROGRAMS

Rural Co operative Dev elopmen t Grants. Grants are made to fund the establishment and operation of centers for

rural cooperative development with their primary purpose being the improvement of economic conditions in rural

areas. Grants may be made to nonprofit institutions or institutions of higher education. Grants may be used to pay

up to 75 perc ent of the cost of the pro ject and associated administrative costs. The ap plicant must con tribute at least

25 percent from non-Federal sources. Grants are competitive and are awarded based on specific selection criteria.

The Appropriate Technology Transfer for Rural Areas (AFTRA) Program. The program encourages agricultural

producers to adopt sustainable agricultural practices that allow farmers to maintain or improve profits, produce high

quality food and reduce adverse impacts to the environment. AFTRA is located on the University of Arkansas

camp us at Faye tteville, Arka nsas, and function s as an info rmation and tech nical assistanc e center staff ed with

sustainable agriculture specialists accessible Nationally by toll-free telephone.

National Sheep Industry Improvement Center. The Center promotes strategic development activities to strengthen

and enhance the production and marketing of sheep and goat products in the United States. It does this by

encouraging infrastructure development, business development, market and environmental research, and designing

unique response s which a ddress the needs of the industries and en sures their lo ng term , sustainable develop ment. 

The Cen ter has a Board of Directors that ove rsees its activities and operates a no -year revolving fund for loans,

grants, and cooperative agreements. The Ce nter is to be privatized upon receiving total appropriations of 

$50 m illion, or by April 4, 20 06, wh ichever c omes first.

Achievement of the FY 2002 Performance Goals and Indicators is contingent upon receiving the program resources

outlined b elow. 

Program Activity: Cooperative Development

Programs

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program Levels $3m $16m $36.5m $6.49m
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 10 June 30, 2001

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Assist marketing networks and cooperative

partnerships in the establishment and expansion

of business outlets.

Number of technical assistance and

educatio nal service s provide d. 215 205 200 200

Customer rated quality of technical

assistance (0-5 rating scale). 3 3.5 3 3

Leverage of research expend iture

(dollar value of RBS sponsored

research per dollar of RBS research

expenditures).

1.25 1.25 1.25 1.25

Researc h and ed ucationa l materials

provided to cu stomers. 99,600 51,137 50,000 25,000

Number of responses to inquires for

information. 16,500 16,000 15,000 15,000

Discussion of Performance Goals: Strong c oopera tives in rural a reas help a chieve th e Depa rtmenta l goal to

“Expa nd econ omic an d trade op portunities for agricu ltural prod ucers and other rura l residents.”

A priority of the Administration is providing assistance to small and beginning farmers. The need for this assistance

is reflected in th e followin g indicato rs: 

In 1980 farmers received 37 cen ts of every consumer dollar spent for food. By 19 96 the farmer’s share

had dropp ed to 23 cents.

Farms with gross annual sales under $250,000 represent 94 percent of all farms, but they receive only 41

percent of all farm receipts.

Coop erative pu rchasing and selling is an impo rtant tool fo r helping small and beginn ing farm ers be eco nomia lly

viable. These goals reflect the success of the RBS in enhancing the quality of life of rural Americans by providing

leadership in building competitive businesses and sustainable cooperatives. These goals include the number of

businesse s, cooper atives, and comm unities that rec eive finan cial resourc es and tech nical assistanc e, and the impacts

on rural economies that stem from this assistance. These goals also reflect success in implementing the themes from

the missio n area strateg ic plan, inclu ding pa rtnering, lev eraging , capacity b uilding, etc . Many goals relate d irectly

to the levels of program funding and agency staffing levels. Reductions in the proposed levels of funding and

staffing will cause corresponding reductions in the planned levels of performance.

Mean s and Strateg ies: Strategies to achieve the objectives include:

Coordinate efforts with the Foreign Agricultural Service to utilize cooperatives to promote in rural areas

produ ct develo pmen t of produ cts which have a fo reign m arket.

Involve 1890 and 1862 land-grant universities in providing technical assistance, credit acquisition

assistance, and business plan development to minority-owned businesses and entrepreneurs in training.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 11 June 30, 2001

Partner with public, nonprofit, and educational institutions to heighten awareness and understanding of

cooperatives an d marketing opportunities in un der-served rura l areas.

Provide field-level training and technical assistance to cooperatives an d developin g cooperative groups.

Establish an Outreach Program and Outreach Liaison Position.

Improve accessibility of Rural D evelopm ent program s for Native Am ericans.

Achievement of the FY 2002 Performance Goals and Indicators is contingent upon receiving the program and

general su pport reso urces ind icated in this p lan. 

Verification and Validation: The data comes from the Agency’s program records which are not automated nor

audited. They are, however, considered to be reasonably accurate for use by management. The amount of technical

assistance and services p rovided includ es services provided under technica l assistance requests, work shops,

internation al briefings, specialized analysis, train ing, staff pre sentations, e tc. 

The customer rated quality of technical assistance is based upon a composite of a survey of cooperatives or groups

that have received substantial technical assistance from RBS during the year. The customers rate the performance

on a scale o f 1 to 5, with 5 being the best. Th e survey process is m anaged through the Nation al Office. 

The leveraging of research expenditures includes research funded through direct appropriation to the salaries and

expen ses accou nt and allo cations from app ropriate p rogram accoun ts. 

Goal 2: Q uality Hou sing and M odern Co mmu nity 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 comm unity facilities.

Goal 2 of the mission area plan is specific to the programs administered by RHS. The agency is responsible for

delivering housing programs authorized by the Housing Act of 1949, as amended, and community facilities

program s authorize d by the Conso lidated Farm and Rural D evelopm ent Act, as amend ed. 

Objec tives of G oal 2: 

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

and affordable housing.

2.2 Improv e the quality of life in rural America by p roviding essential com munity facilities.

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

program s.

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

Program Activities supporting Goal 2: , Homeown ership, Rental Ho using, an d Com munity Facilities prog rams. 

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Funding (Appropriated)

Program $5.128b $4.600b $6.039b $5.759b

S&E $420.881m $437.858m * *

FTEs (Appropriated) 6,109 6,081 * * 

* Starting with 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.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 12 June 30, 2001

HOMEOWNERSHIP PROGRAMS

Section 502 Rural Housing Direct Loan Program. This program provides mortgage financing to very low- and lowincome families w ho cann ot obtain c redit from other sou rces. Borrowers a re offered fixed-inter est-rate loan s with

maturities ranging from 30 to 38 years. The loans are subsidized at a graduated interest rate level from 1percent to a

percent o ver Trea sury’s co st of mon ey, depe nding o n family income. Appro ximately 40 perc ent of the p eople

served earn less than 50 percent of the median incom e in the rural area in which they live; the remainder earn

between 50 and 80 percent. The 502 program also provides "supervised credit" to its borrowers to help them

maintain their homes in times of fin ancial crises through w orkout agreements and m oratoriums.

Section 502 Guaranteed Loan Program. The Sec tion 502 Loan G uarantee program provide s home owne rship

opportunities to low and moderate-income rural residents, typically those whose incomes are between 80 percent

and 115 percent of the median income in the county. The program offers a 90 percent guarantee as encouragement

to private len ders to pro vide 30 -year, fixed -rate guar anteed m ortgage s for custom ers who would be unab le to obtain

credit with out the gu arantee. The loans c an be fo r up to 10 0 percen t of mark et value o r for acqu isition cost,

whichever is less, thereby removing the down payment barrier that prevents many people from becoming

homeo wners.

Mutual and Self-Help Housing Program. The M utual Self-H elp Tech nical Assistan ce Gran t program truly

empowers very low-income and low-income rural Americans by enabling them to use sweat equity to help reduce

the cost of 

homeownership. Nonprofit organizations and local governments may obtain grant funds to enable them to provide

technical assistance to groups of families who work cooperatively to build their own hom es. Typically, the future

homeo wners obtain se ction 502 direct loan s to finance their hom e, howeve r, other mortgag e products hav e also

been us ed. By p roviding their "swea t equity", the future ow ners help themselv es as well as o thers in the g roup to

own a home with a smaller mortgage than if the borrower paid full market price. It is estimated that a homeowner

under th e self-help m ethod rea lizes, on av erage, a 1 0-15 pe rcent redu ction in co nstruction costs wh ile learning basic

construction and maintenance skills. The Self-Help Program also builds a strong sense of community commitment

and involvement am ong the participan ts.

Section 504 Rural Housing Loan and Grant Program. This program provides financial assistance to very lowincome rural homeowners to remove health and safety hazards from their homes. Grants are limited to $7,500 and

are only available to elderly homeowners (those age 62 or over) whose incomes are 50 percent or less of the median

in the rural area in which they live. At the Secretary’s discretion, the grant limit can be increased to $15,000.

Section 533 Housing Preservation Grant Program. This prog ram pro vides finan cial assistance through nonpro fit

groups and government agencies to very low- and low-income homeowners to repair their homes, and to rental

property owners for the rehabilitation of units which will be rented to low- and very low-income families. Housing

rehabilitated through this program m ust be brough t up to local building c odes.

Section 523 Rural Housing Site Loan Program. This program provides funds to nonprofit organizations to develop

building sites for participan ts in the RHS S elf-Help hou sing program . The nonp rofit organizations resell these

improved sites to program participants at cost, thus passing on their savings in land and development costs. The

interest rate on the loans is 3 percent, an d the no nprofit or ganizatio ns repay the loans w hen they sell the prop erties. 

Self-Help participants who are able to purchase one of these improved sites generally have lower overall costs and

thus requ ire smaller R HS ho using loa ns than tho se Self-He lp participa nts who acquire th eir impro ved bu ilding site
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 13 June 30, 2001

through the contract method.

Section 524 Rural Housing Site Loan Program. This program is similar to the Section 523 Rural Housing Site Loan

program in that it provides loans to nonprofit organizations to purchase and develop rural building sites. However,

once de veloped the sites ma y be pro vided to a ny low - or mo derate-inc ome p erson, no t just an RH S Self-H elp

participan t. Loans ar e made at the Trea sury’s rate o f interest.

Program Activity: Homeownership Programs FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program Level (direct and guaranteed) $4.04b $3.389b $4.324b $4.319b
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 14 June 30, 2001

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Impro ve the qu ality of life of re sidents of ru ral 

comm unities by p roviding access to cre dit for dece nt,

safe, and sanitary housing.

Rural households receiving financial assistance

to purchase a home of their own. 55,941 45,420 57,000 55,800

Total Units Sec. 502 Direct and Guaranteed 502

and Sec . 504 Lo an and G rant. 65,721* 58,018 84,000 69,000

Number of houses financed through the Section

502 Direct Loan Program. 16,145 17,026 15,600 15,800

Number of houses financed through the Section

502 Direct Loan (Natural Disaster) Program. 44 519 126 0

Number of houses financed through the Section

502 Guaranteed Loan Program. 39,752 29,123 42,000 40,000

Number of existing houses improved (Section

504 Loans and G rants). 9,075 10,360 12,000 12,000

Number of existing houses improved (Section

504 Loans and G rants Natural Disaster). 321 990 4,000 0

Number of jobs created (D irect 502). 14,257 17,520 16,000 16,000

Number of jobs created (G uaranteed 502). 21,409 14,323 21,000 20,000

Maximize the leveraging of loan funds to increase the

number of rural residents assisted by Rural Development

program s.

Number of borrowers assisted through

leveraging (Direct 502). 5,371 6,448 7,500 10,000

Num ber of G uarantee d lenders participating in

low-income housing finance. 1,147 2,400 2,400 2,400

Numb er of Rural H ome Lo an Partnerships. 78 177 180 180

Provide effective supervision to minimize delinquencies

and future loss.

First-year delinquency rate. 5.3% 3.2% 4.3% 4.3%

* Includes 38 4 Individual W ater and W aste Disposal Gran ts.

Discussion of P erforma nce Goa ls: Afford able hou sing help s meet the Departm ental goa l to “Enh ance the c apacity

of all rural resid ents, com munities, and bu sinesses to p rosper.”

The primary purpo se of the Homeow nership program is to increase the inventory of decent, safe and sanitary

housing units available to low- and very low-income families in rural areas. The agency is tracking the number of

home s being b uilt and the numb er of existing home s being im proved to quan tify this effort.

A key component of the Rural Development strategic plan is that all programs would develop partnerships with the

other org anization s involve d in rural d evelopm ent. The p urposes of these pa rtnerships a re to enco urage stra tegic

delivery of the programs of both organizations and to coordinate the delivery of technical assistance and financing

to rural communities. Several performance measures relate to the leveraging of the program’s funds which is the

most likely outcome of the partnerships. Leveraging of funds extends the impact of Rural Development’s limited
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 15 June 30, 2001

funds and b rings additional do llars into the developm ent of rural com munities.

The fina l indicator re lates to effectiv e mana geme nt of the po rtfolio. Ensu ring loan s are repaid on time is a factor in

any lending program. Since over 80 percent of RHS borrowers are first-time home owners, it is important they

immediately establish a habit of paying their mortgage payment on time. The agency pays close attention to the

first-year delinquency rate to ensure that those borrowers who miss a paym ent are contacted immediately before

they bec ome h opelessly delinque nt and n o longe r able to ke ep their ho me. 

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget w ill be used when establishing obligations o f FY 2001 funds.

The H omeo wnersh ip Initiative ha s helped r aise the number o f homeown ers in the U nited States to an all time h igh. 

Through this initiative, RHS has developed financial and technical partnerships to extend the impact of Rural

Developm ent’s limited funds an d bring add itional dollars into the develo pment of ru ral comm unities.

While other Federal agencies have single family housing programs, RHS’ programs are the only ones that focus on

making a ffordable credit ava ilable to lower incom e, rural residents. Long term, fixed rate m ortgage credit is less

available, and more costly, in rural areas than metro areas. RHS’ programs help to level the playing field for lower

income families. Through its leveraging and loan guarantee programs, RHS is also helping the private sector, as

well as State Housin g Auth orities and n onpro fits, reach into rural areas th at they oth erwise ha ve had d ifficulty

serving.

Verification and Validation: Data from the following system s can be used to v erify and validate m ost

performan ce measures:

• Program Loan Accounting System (PLAS)

• Guaranteed Loan System (GLS)

• Dedicated Loan Origination and Servicing System (DLOS)

These sy stems track financial d ata, but gen erally not m anagem ent data. These system s contain a variety of d ata edits

to minim ize the risk o f inaccura te data bein g placed in the system . Reports from the se systems are used b y OIG in

develop ment o f the missio n area’s au dited finan cial stateme nt.

RENTAL HOUSING PROGRAMS

Section 515 Rural Rental Housing (RRH) Direct Loans. The Sec tion 515 program emplo ys a pub lic-private

partnership by providing subsidized loans at an interest rate of 1 percent to limited-profit and nonprofit developers

to construct or renovate affordable rental complexes in rural areas. This 1 percent loan keeps the debt service on the

property sufficiently lo w to sup port belo w-ma rket rents aff ordable to low-inc ome ten ants. Ma ny of the se projects

also utilize low-income housing tax credit proceeds. This program is typically used in conjunction with RHS

Section 5 21 Re ntal Assistan ce whic h provid es project-b ased renta l assistance pa ymen ts to prope rty own ers to

subsidize the tenant’s rent at an affordable level. With rental assistance, tenants pay a maximum of 30 percent of

their income towards their rent and utilities. Some 515 projects also utilize HUD's Section 8 project-based

assistance which enables additional very low-income families to be served.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 16 June 30, 2001

Section 538 Rural Rental Guaranteed Loan Program. This prog ram pro vides affo rdable ren tal housing to low- to

moderate-income people by providing 90 percent guarantees to certified lenders. For the for-profit sector, the

guarantees cover 90 percent loan-to-value ratios. For the nonprofit sector they cover 97 percent loan-to-value

ratios.

Farm Labor Housing Direct Loans. Section 514 direct loans are available for farm owners, public bodies, and

nonprofit associations to provide living quarters, furnishings, and related facilities for domestic farm workers. The

Section 514 loans have a 1 percent interest rate and a maximum term of 33 years. The Section 516 grants are used

in conjunction with the loans to finance off-farm rental housing which w ill be affordable for low-wage farm

workers. Grants are only available to a governmental or nonprofit organization and may not exceed 90 percent of

the total project cost. Section 521 rental assistance can also be used in conjunction with this program. Farm

worke rs who le ase Section 514/51 6 Farm Labor H ousing u nits must b e either US citizens or p erman ent residen ts. A

majority of their income must come from farm work.

Section 521 Rental Assistance. In 1989, one in five rural households paid more than 30 percent of its income for

housing costs. The Section 5 21 Re ntal Assistan ce Prog ram he lps to mitiga te that rent ov erburde n and also enable

very low - and low -incom e rural reside nts to live in d ecent, safe, a nd sanitary housing . Rental A ssistance is pro jectbased assistance used in conjunction with the Section 515 and Section 514/516 programs. The program provides

rental assistance payments directly to the owners of some RHS-financed rental projects under contracts specifying

that Ren tal Assistance beneficia ries will pay no mo re than 30 percent o f their incom e for rent. T his subsidy goes to

the unit, no t to an indiv idual tenan t.

Program Activity: Rural Rental Housing

(RRH)

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program Level $810m $910m $952m $962m

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Improve the quality of life for the residents of

rural com munities by prov iding acc ess to

decent, safe, sanitary and affordable rental

housing.

Total Number of units funded for new

construction (FY). 5,351 5,357 5,519 5,200

Sec. 515 2,189 1,626 1,800 1,700

Sec. 514/516 622 680 790 700

Sec. 514/516 Natural Disaster 0 156 29 0

Sec. 538 2,540 2,895 2,900 2,800

Total Number of units funded for

rehabilitation (FY).

4,736 7,100 8,000 7,600

Sec. 515 2,340 4,990 5,500 5,100

Sec. 514/516 626 696 500 500

Sec. 533 1,770 1,414 2,000 2,000

Direct resources to those rural communities

and customers with the greatest need.

Average tenant income. $7,671 $7,775 $7,980 $8,135
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 17 June 30, 2001

Average income of tenants who do

not receive Rental Assistance. N/A* N/A* N/A* N/A*

Average income of tenants who

receive Rental Assistance. N/A* N/A* N/A* N/A*

Number of tenants who are rent

overburdened. N/A* N/A* N/A* N/A*

Num ber of ren tal assistance u nits

renewed (tenants do not lose subsidy). 38,311 38,489 42,000 42,33

Percent o f rental assistan ce units

renewed. 100% 100% 100% 100%

Number of tenant households living

in affordable, decent , safe, and

sanitary housing. 426,330** 429,288** 432,246 435,246

Effectively manage the portfolio to minimize

delinquencies an d future losses.

Num ber of pro jects with ac counts

more than 180 days past due. 164 153*** 130 130

Develop systems and processes which 

strengthen the management of MFH 

projects and help preserve the

portfolio.

Developed

requirement

for

automated

system to

better

monitor

projects and

tenants

Developed

automated

system

(MultiFamily

Information

System) to

monitor

projects and

tenants 

Publish new 

regulations

for

comment

Publish final

regulations

 * Available by end of FY 2001 reporting period.

** Estim ated, actua l data not av ailable. 

*** Includes 18 properties in inventory.

Discussio n of Per forma nce Go als: Affordable rental housing in rural communities helps achieve the Departmental

goal to “E nhanc e the capa city of all rura l residents, commu nities, and b usinesses to prosper.”

Most co mmu nities in rural A merica h ave a scar city of dec ent rental h ousing a ffordab le to very lo w-income fam ilies. 

In addition, mig rant workers an d farm labore rs, whose incom es are extremely limited, face some of the worst

housing condition s in the Na tion. Desp ite impro veme nts in hou sing qua lity, especially in the num ber of rur al units

with complete plumbing facilities, the 1990 census data indicated rural renters were more than twice as likely to live

in substandard housing as people who owned their own homes. Many rural renters, with lower median incomes and

higher poverty rates than homeowners, are simply unable to find decent housing that is also affordable. RHS’ rental

housing programs are am ong the few resources that enable low- and very low-income, elderly and disabled renters

in rural America to access decent, safe, sanitary, and affordable housing.

Funding for this program has been reduced substantially during the past few years while the rental units in the

portfolio continue to age and require resources for rehabilitation. A major focus of the performance measures is on

the agency’s efforts to maintain or increase the number of rental units available to house low- and very low-income
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 18 June 30, 2001

families, at a rental rate affordable to the family. With over 86,000 of RHS’ current tenants rent overburdened,

meaning that they pay more than 30 percent of their monthly income for rent, maintaining the number of

occup iable, afford able units is a sig nificant ch allenge fo r the agen cy. The a gency is tracking th e number of un its

being built or reha bilitated as well as the impac t of rental assistance on the fam ilies.

This program has also been the fo cus of several aud its by the Inspector G eneral related to fraud , waste, and abu se

and the program is on USDA’s list of Major Management Challenges and Program Risks. The performance

indicator to “develop systems and processes which strengthen the management of MFH projects and help preserve

the portfolio” and encourage sound life cycle management, has been added for FY 2001 to address this concern.

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget are used when establishing obligations o f FY 2001 funds.

The agency is employing several key strategies to implement its program:

• Build leveragin g partnerships to ex pand resou rces going into ru ral areas.

• Reinvent the Multi-Family Housing Program, including completion of automation projects to improve program

mana geme nt.

In order to stretch its resources, RHS is actively developing leveraging partnerships. Leveraging of funds extends

the impact of Rural Development’s limited funds and brings additional dollars into the development of rural

comm unities.

The Rural Rental Housing program has a history of fraud, abuse, and indifference to the health and safety of

tenants: In reviewing the $12 billion Rural Rental Housing Program, GAO and OIG previously identified a

continuing history of fraud and abuse by owners and management companies, along with instances of indifference

toward s the health and safety of low-in come and elde rly tenants. T he agen cy has m ade sub stantial prog ress and, in

the 1999 listing of high-risk areas, the MFH program was not included. However, the agency continues to work on

this area of concern.

Coordination with other Federal programs can substantially enhance the delivery of the Multi Family Housing

programs under the appropriate circumstances. Low-income housing tax credits, authorized through the

Department of Treasury, can help make housing more affordable for very low-income tenants. Section 8 assistance

from H UD also helps with affordab ility. RHS program dollars also h elp State go vernm ent prog rams an d nonp rofit

organizations leverage their resources. These programs complement, rather than compete, with each other as our

program s can help make th ese projec ts affordab le for the co mmu nity wh ile helping to meet th e public p olicy goa ls

of other Federa l and State agencies.

RHS loan guarantee programs enable private sector lenders to get more involved in rural financing. Our guarantee

program s bring oth erwise un available lo ng term , fixed rate p rivate secto r credit to rur al areas. 

Verification and Validation: Data from the following system s can be used to v erify and validate m ost

performan ce measures:
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 19 June 30, 2001

• Automated Multi-Family Housing Accounting System (AMAS)

• Program Loan Accounting System (PLAS)

• Guaranteed Loan System (GLS)

• Multi-Family Housing Information System (MFIS)

• Multi-Family Housing Tenant Information System (MFTS)

These sy stems track financial d ata, but gen erally not m anagem ent data. These system s contain a variety of d ata

edits to minimize the risk of inaccurate data being placed in the system. Reports from these systems are used by

OIG in develop ment o f the missio n area’s au dited finan cial stateme nt.

COMMUNITY FACILITIES PROGRAMS

Community Facility Direct Loans. The direct loan program is for the purposes of constructing, enlarging,

extendin g, or imp roving e ssential com munity facilities. Eligible a pplicants m ust demonstrate tha t they are u nable to

obtain capital from comm ercial sources. App lications for health and p ublic safety projects receiv e the highest

priority. The interest rate on these loans is determined by the median family income of the area to be served and

ranges from

4.5 perc ent to 5.37 5 percen t.

Commun ity Facility Loan Guarantees. The criteria for the loan guarantees are the same as the direct loans. In the

case of the guarantee program, the loans are offered by a private lender and the interest rate on the loan is negotiated

between the lender and the borrow er.

Com munity Facility Gra nts. This program was authorized un der the Federal Agriculture Improvem ent and Reform

Act of 1996. In most cases, the grant program is used in conjunction with the community facilities direct loan

program to make essential community facilities affordable for the most needy communities, which often cannot

afford even d irect loans without ad ditional subsidies.

Program Activity: Community Facilities

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level $278m $302m $763m $478m

PERFORMANCE GOALS AND INDICATORS FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Improve the quality of life for rural residents by

providin g new o r impro ved essen tial comm unity

facilities.

Number of rural residents with improved

standards of living through new or improved

essential community facilities (in millions). 8 8.1 20 13

Number of jobs created or retained. 9,600 4,493 10,998 7,200

Com munity H ealth

Number of ne w or improved h ealth care

facilities. 123 116 280 180

Number of ne w or improved elder care

facilities. 42 32 75 50
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 20 June 30, 2001

Number of beds available at new or

improved elder care facilities. 4,932 2,558 6,000 4,000

Emergency Services

Number of new or improved fire and rescue

facilities. 72 104 250 170

Number of new or improved fire and rescue

vehicles. 140 128 300 200

Education and Ch ild Care

Number of ne w or improved ch ild care

centers. 69 55 130 90

Number of children served by new or

improved child care centers. 5,628 4,049 9,800 6,500

Numb er of new or im proved sch ools. 32 44 100 70

Maximize the leveraging of loan funds to increase the

number of rural residents assisted by Rural

Developm ent program s.

Numb er of CF fun ding partnership s. 565 866 2,000 1,400

Number of CF borrowers assisted through

leveraging. 429 492 1,200 790

Discussion of Performance Goals/Indicators: The availability of needed community facilities in rural

communities helps achieve the Departmental goal to “Enhance the capacity of all rural residents, communities, and

businesse s to prospe r.”

Since the program s began in 1965 , over 80 different ty pes of pro jects have b een finan ced with Com munity Facility

funds. Examp les of these p rojects are ch ild care cen ters, nursing home s, assisted living facilities, hospita ls, health

clinics, fire stations, libraries, telecommunications, school facilities, community buildings, and industrial parks. The

development of performance measures for these programs is complicated by the wide variety of projects which can

be funded. Wh ile applications are prioritized upon receipt, with health and safety receiving top priority, projects are

generally funded in the orde r of receipt a t the State-lev el to ensure equity in th e distribution of fund s. As a result, it

is impossible to know ahead of time wh at the mix of funded projects will be during the fiscal year.

Community Facilities projects are grouped into three categories (Community Health, Emergency Services, and

Education and Ch ild Care) in order to simplify the presentation of performance measures. For each catego ry there

is one or more measures of the number of new or improved facilities to be provided in rural areas during the fiscal

year. This output measure is supported, where possible, with an assessment of the impact of the project, such as the

number of hospital beds added to the stock in rural communities or the number of ch ildren served in a day care

facility.

A key component of the Rural Development strategic plan is that all programs would develop partnerships with the

other org anization s involve d in rural d evelopm ent. The p urposes of these pa rtnerships a re to enco urage stra tegic

delivery of the programs of both organizations and to coordinate the delivery of technical assistance and financing

to rural communities. Two of the performance measures relate to the leveraging of the program’s funds which is the

most likely outcome of the partnerships. Leveraging of funds extends the impact of Rural Development’s limited

funds and b rings additional do llars into the developm ent of rural com munities.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 21 June 30, 2001

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget will be used when establishing obligations of FY 2001 funds. Funds expended in any particular program

could be impacted, however, by the movement of funds from one program to another as authorized by the Rural

Community Advancement Program.

Specific strategies to achieve the performance goal include:

• Build leveragin g partnerships to ex pand resou rces going into ru ral areas.

• Support W elfare Reform by prom oting develop ment of day -care facilities.

In order to stretch its resource s, RHS is actively de veloping levera ging partnership s. The purpo ses of these

partnerships are to encourage lender participation in providing financing to rural communities. The effort to move

families off of welfare and into work requires the availability of affordable quality day care, which is often more

limited in rural America. This can present a real barrier to a family who is trying to move out of poverty. RHS'

Commun ity Facilities Programs can be used to finance both child and adult day care.

Coordination with other Federal programs enhances the delivery of the Community Facilities Programs under the

appropriate circumstances. Proposed projects must meet the standards of the Environmental Protection Agency and

health facilities must meet the standards of the Department of Health and Human Services, in the same sense that

they must meet the zoning and construction requirement of the State, county, or local government. These are issues

of concern handled by the applicant’s engineer. Other Federal agencies, such as the Economic Development

Agency or Indian Health Service, or State agencies may be potential partners for joint funding if a specific project

meets their requirements. RHS program dollars also help State government programs and nonprofit organizations

leverage their resou rces.

RHS loan guaranteed programs enable private sector lenders to get more involved in rural financing. The

guaran teed prog rams bring other wise una vailable lon g term, fix ed rate priv ate sector cre dit to rural are as. 

Verification and Validation: Several p erformance ind icators add ress the ov erall impa ct of the Comm unity

Facilities Program while others support the various categories of projects normally funded by the program. One

overall measure is an assessment of the number of rural residents whose quality of life will be improved by the

Commun ity Facilities projects financed during the fiscal year. This is, and will always be, a soft estimate but it is an

attempt b y the age ncy to q uantify th e impac t of the Co mmu nity Facilities P rogram on the ru ral popu lation it serves. 

It cannot, in fact, be specifically measured, even at the end of the fiscal year, as there is a wide variation in the

impact of projects and most have an impact far beyond the city limits of the town in which it is located. For

example, the exp ansion o f a hospital w ill provide im proved medica l care, and a n impro ved qu ality of life, for p eople

living miles from the town in which the hospital is located.

A second way the impact of the total program is quantified is through the estimation of the number of jobs created

or retained as a result of the expenditure of Federal funds in the rural communities. This measure is also used by the

other Rural Dev elopment agen cies. Com munity Facilities fund s are often c onstructio n related an d the imp act is

established through the use of economic multipliers developed by the Department of Commerce.

Data to mea sure the perform ance mea sures will come fro m the follow ing automated accoun ting systems:
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 22 June 30, 2001

• Program Loan Accounting System (PLAS)

• Guaranteed Loan System (GLS)

• Rural Community Facilities Tracking System (RCFTS)

These systems are used by agency managers in their management of the programs. PLAS and GLS are accounting

systems d esigned to man age the ag ency’s p ortfolio of d irect and g uarantee d loans. These system s contains a variety

of data edits to minimize the risk of inaccurate data being placed in the systems. Reports from these two systems

are used b y OIG in develo pmen t of the mission area’s audited fin ancial statem ent.

RCFTS is a non-accounting management system which contains a variety of data related to Community Facilities

projects, e.g., community populations and number of people served by each project. Data in RCFTS is input by the

field staff and does not contain edits to verify the accuracy of the data. Manual reports from State Director’s will be

used to o btain data r egardin g several o f the perfo rmanc e measu res. This info rmation will be less reliab le since it is

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

acceptable for the purposes for which it is being used.

Goal 3: M odern Affo rdable Utilities. “Rural Development will improve the quality of life of rural residents by

promoting and providin g access to capital and credit for the develop ment an d delivery of mod ern afford able utility

services.”

Goal 3 of the mission area plan is specific to the programs administered by the Rural Utilities Service (RUS). The

agency is responsible for delivering electric and telecommunications programs as authorized by the Rural

Electrification Act of 1936, as amended; distance learning and telemedicine grant programs as authorized by the

Rural Economic Development Act of 1990, as amended; and water and waste programs authorized by the

Consolidated Farm and Rural Development Act, as amended.

Objectives of Goal 3:

3.1 Provide financ ing for mo dern, affordab le, water and wa ste disposal services in rural com munities.

3.2 Provide financing for modern, affordable telecommunications, including Distance

Learning/T elemedicine serv ices, in rural comm unities.

3.3 Provide financ ing for mo dern, affordab le electric service to rural com munities.

3.4 Direct Rural D evelopm ent resources to those rural comm unities and custom ers with the greatest

need.

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

Developm ent program s.

Program Activities supporting Goal 3: Water a nd W aste, Teleco mmu nications, a nd Elec tric

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001*

ACTUAL

FY 2002*

ESTIMATE

Funding (Appropriated)

Program $3.396b $4.148b $5.259b $4.854b

S&E $65.674m $68.153m $0 $0

FTE’s (Appropriated) 715 715 $0 $0

* Starting with the FY 2001 budget, the S&E budget for all Rural Development agencies is combined. Therefore,

the S&E and F TE can not be p rovided separately at the agen cy level.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 23 June 30, 2001

WATER AND WASTE PROGRAM

Water and Waste Disposal Direct Loans. Loans are made to public bodies, organizations operated on a n ot-forprofit basis, Indian tribes on Federal and State Reservations, and other Federally recognized Indian tribes, for the

development of storage, treatment, purification, or distribution of water or for the collection, treatment, and disposal

of waste in rural areas. A rural area may include an area in any city or town wh ich has a population of not more

than 10,000 inhabitants. Applicants must be unable to obtain sufficient credit elsewhere to finance actual needs at

reasonable rates and terms. Loans are repayable in not more than 40 years or the useful life of the facility,

whichever is less. These loans bear interest not in excess of the current market yield for comparable term municipal

obligations. Loans made in areas where: (1) the median household income of the service area falls below the higher

of 80 percent of the Statewide non-metropolitan median household income or the poverty level; and (2) the project

is needed to meet ap plicable he alth or sanita ry standa rds, bear in terest not in ex cess of 5 p ercent.

Water and Waste Disposal Guaranteed Loans. Eligible borrowers and loan purposes are similar to those under the

direct water and waste disposal loan program, except that loans involving tax-exempt obligations and loans

involving a water and waste disposal grant may not be guaranteed. Normally, the guarantee will not exceed 80

percent, h owev er, in extrao rdinary c ircumsta nces it ma y be incre ased to a m aximum of 90 percent. T he interest ra te

is negotiated between the borrower and lender and may be at a fixed or variable rate.

Water a nd W aste Dispo sal Grants. Grants are made to public, qu asi-public, a nd non profit assoc iations, and to

certain Indian tribes for the development, storage, treatment, purification, and distribution of water or the collection,

treatment, or dispo sal of waste in rural areas. G rants are used for w ater and waste disp osal projects serving the most

financially needy communities to reduce user cost to a reasonable level. Grants may be made to communities that

have a median household income that falls below the higher of the poverty line or 100 percent of the State's nonmetropolitan median household income. P.L. 104-127, the Federal Agriculture Improvement and Reform Act of

1996, provided that not less than one percent, nor more than 3 percent, of the water and waste disposal grant funds

appropriated each year be made available for technical assistance and training of eligible grantee associations for

such pu rposes as a ssisting in iden tifying an d evalua ting alterna tive solution s to problems relating to water an d waste

disposal, preparing applications, and im proving op eration and m aintenance prac tices at existing facilities.

Solid W aste Man agement Gran ts. Grants are made to nonpro fit organiza tions to pro vide tech nical assistanc e in

rural areas and towns up to 10,000 inhabitants, and to provide technical assistance to local and regional

governments and related agencies for the purpose of reducing or eliminating pollution of water resources and

improve p lanning and management of solid w aste disposal facilities.

Program A ctivity: Water and W aste FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level $1.301b $1.337b $1.548b $1.417b

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Provide rural residen ts with mo dern, affo rdable

water and w aste services.

Rural water systems developed or

expan ded wh ich prov ide quality

drinking water in compliance with the

Safe Drinking W ater Act. 579 590 668 600
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 24 June 30, 2001

Rural waste disposal systems developed

or expa nded w hich pro vide qu ality

waste disposal service in compliance

with State and Federal environmental

standards. 328 325 368 330

Total jobs generated as a result of

facilities constructed with W &W funds. 33,017 39,771 46,670 42,400

Direct program resources to those rural communities with the greatest need.

Persistent poverty co unties. 247 219 248 222

 Total W &W project co st. $298m $341m $401m $364m

RUS amou nt. $257m $249m $278m $251m

Special initiative - number of projects and amoun t of W& W fund ing (in millions)

EZ/EC 28 ($21) 33 ($46) 74 ($65) 68 ($60)

Colonias 38 ($22) 36 ($19) 40 ($20) 33 ($20)

Pacific Northw est 34 ($32) 0 0 0

Alaskan Villages 14 ($29) 24 ($20) 23 ($20) 23($20)

Guaranteed Loans 7($5.8) 9 ($11) 49 ($75) 49 ($75)

Discussion of the Perform ance Go als: The availability of adequate, safe drinking water and waste disposal

facilities helps achieve the Departmental goal to “Enhance the capacity of all rural residents, communities, and

businesse s to prospe r.”

One of the Objectives in the mission area’s strategic plan is the intent to direct resources to those communities and

customers with the greatest need. This includes areas that have been consistently poor, have high unemployment

rates, have out-migration, have experienced natural disasters, or experienced economic stress due to Federal action,

such as changes in Federal policy related to timber production. Several performance indicators relate to achieving

this Objective.

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget will be used when establishing obligations of FY 2001 funds. Funds expended in any particular program

could be impacted, however, by the movement of funds from one program to another as authorized by the Rural

Community Advancement Program.

Specific strategies to achieve the performance goals include:

• Build leveragin g partnerships to ex pand resou rces going to rura l areas.

• Where a pplicable, direct resource s to the neediest projects an d comm unities.

• Work with local communities and other borrowers to ensure funds are invested wisely.

RUS has established and monitors annual priority performance goals for State delivery of programs which include

targeting of program resources to target communities and customers. In addition, priority selection criteria that

supports those targeted areas and customers have been established, are published in the program regulations, and are

used in fundin g decisions.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 25 June 30, 2001

Verification and Validation: Most of the data used in the Performance Indicators are taken from internal RUS and

Rural Development Mission Area records. Data to measure the performance measures will come from the

following auto mated system s:

• Program Loan Accounting System (PLAS)

• Guaranteed Loan System (GLS)

• Rural Community Facilities Tracking System (RCFTS)

These systems are used by agency managers in their management of the programs. PLAS and GLS are accounting

systems d esigned to man age the ag ency’s p ortfolio of d irect and g uarantee d loans. These system s contains a variety

of data edits to minimize the risk of inaccurate data being placed in the systems. The three systems are audited

annua lly by OI G as a pa rt of their dev elopment of an a udited fin ancial statem ent.

The number of systems financed and loan and grant amounts are available from Rural Development accounting

records.

The numbers of people served and the number of new and expanded water systems financed are available from the

Rural Community Facilities Tracking System (RCFTS). RCFTS is a non-accounting management system which

contains a variety of d ata related to water an d waste p rojects, e.g., co mmu nity pop ulations an d num ber of pe ople

served by each project. Data in RCFTS is input by the field staff; RCFTS does not contain edits to verify the

accuracy of the data. Information from the USDA Economic Reporting Service will be used to identify persistent

poverty cou nties and persistent out-m igration counties.

RUS has had a lot of experience w ith these data and is highly confident of their accuracy. Non-RUS data are

identified b y source and are a lso consid ered ver y reliable. Confiden ce in this data is high eno ugh to b e accepta ble

for the purposes for which it is being used.

TELECOMMUNICATIONS PROGRAM

Telecommunications Loans. Loans are made to furnish and improve telephone service, including a variety of

related telecommunications purposes, in rural areas. Direct loans are made to rural telecommunications systems and

guaran tees are pro vided fo r loans m ade by o ther lende rs, such as th e Federa l Financin g Ban k. These loans help to

ensure th at there is an “ on ram p” to the In forma tion Sup erhighw ay in rura l America. The in terest rate cha rged to

borrowers depends on the financial condition of an individual borrower system and the costs associated with serving

rural subsc ribers. The interest rate on most loa ns is a variab le rate tied to the govern ment’s c ost of mo ney. 

Currently cost of money loans are supp lemented by loans from the R ural Telephone Bank (RTB). A portion of a

borrow ers’ need s are met b y RU S loans, an d a portio n by RTB loa ns. The ra tio of RU S fundin g to RTB fund ing is

determined by the ratio of RUS and RTB levels authorized by Congress. The most rural and highest cost to serve

systems are eligible for loans at a hardship rate of 5 percent. Borrowers may also apply for RUS guaranteed Federal

Financing B ank loans.

Rural Telephone Bank Loans. The Rural Telephone Bank is a public-private partnership that supplements the RUS

telecommunications program by providing another source of capital for furnishing and improving rural

telecommunications systems. Loans made by the RTB bear interest at a rate equal to its cost of capital, which

currently approximates the Treasury’s cost of funds. The RTB is managed by a 13-mem ber board of directors that

includes 2 members from the private sector, 5 general officers of USDA, and 6 members elected by RTB

shareholders. RTB’s day-to-day operations are conducted by employees of USDA and the telecommunications
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 26 June 30, 2001

program , with no a dditional c ost to the tax payer. The Fiscal Y ear 200 2 Bud get prop oses no F ederally fu nded lo ans. 

Privatization of the RTB began in 1996.

Distance Learning and Telemedicine Loans. This prog ram pro vides finan cial assistance to rural com munity

facilities, such as schools, libraries, hospitals, and medical centers. In addition, funding is available for other

entities providing distance learning and telemedicine services in rural areas. In the Telecommunications Act of

1996, Congress recognized the special challenge of rural education and health care and the role telecommunications

plays in de livering h igh qua lity service. This progr am help s address th e end-u ser equipment n eeds of th ese system s. 

Loans and grants are made to encourage, improve, and make affordable the use of advanced telecommunications

that will provide educational and health care benefits to people living in rural areas. Program results have

demo nstrated tha t substantial co st savings an d dram atic benefits can be ac hieved b y investm ents mad e in

educational and medical interactive v ideo, Internet, and o ther information networks for ru ral American s.

Program Activity: Telecommunications

Program

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level $461m $670m $669m $495m
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 27 June 30, 2001

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Provide modern, affordable telecommunications

services to rural com munities.

Number of new subscribers receiving

service. 170,000 66,525 67,000 49,500

Jobs generated as a result of facilities

constructed with Telecommunication

funds. 10,603 15,410 17,700 16,000

Number of subscribers with improved

service. N/A 275,196 275,000 203,00

New Rural subscribers capable of

receiving broadband service. N/A N/A 111,000 106,500

Maxim ize the leve raging o f loan fun ds to

increase the number of rural residents assisted.

Leveraging of telecommunications

financial assistance (private investment

to RUS and R TB funding). $5.22:$1 $6.51:$1 $5:$1 $5:$1

Program Activity: Distance Learning and

Telemedicine Program

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level $68m $25m $427m $327m

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Provide distance learning and telemedicine

services, utilizing telecommunications

technologies, to rura l communities.

Number of schools receiving distance

learning facilities. 287 277 840 840

Number of he alth care providers

receiving teleme dicine facilities. 131 138 570 570

Maxim ize the leve raging o f loan fun ds to

increase the number of rural residents assisted.

Leveraging of telemedicine and

distance learning financial assistance

(private investment to RUS funding). $1.45:$1 $1.21:$1 $2:$1 $2:$1

Discussion of the Perform ance Go als: The availability of modern telecommunications helps achieve the

Departmental goal to “Expand economic and trade opportunities for agricultural producers and other rural

residents.”

The Telecommunications Act of 1996 represents the most comprehensive rewrite of the Communications Act of
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 28 June 30, 2001

1934 a nd the m ost sweep ing telecom munic ations refo rm eve r. The pa ssage of th is legislation is bringing ab out a

whole new world of telecommunications services and technologies. It also created a new industry structure setting

new gr ound ru les. New c ompe titors are entering the telec omm unication s industry. O ne of the m ost dram atic

occurre nces is the o pening of the loca l loop and the deve lopme nt of com petition in a p reviously regulated industry. 

The rural provisions in the Act set forth revisions for “Universal Service” and the structure for allowing

competition, infrastructure sharing, and resale in rural areas. The specific rules and requirements are being forged

by new Federal Communications Comm ission rulings, State public utilities commission proceedings in each State,

and in many cases, State proceedings with each separate RUS borrower. RUS has the responsibility to represent

rural Am ericans in th is process an d in this new environment.

Rural econ omic dev elopmen t is critical as commun ities across the country strug gle to keep pac e with today’s fast

movin g inform ation-bas ed econ omy. B arriers to loca l rural deve lopme nt result from the lack of access to ad equate

financing and the vastness of space and distance which isolate rural comm unities from the mainstream of today’s

economy. The development and implementation of the Information Superhighway as part of the National

Information Infrastructure Initiative (NII) is a solution which can h elp to overcom e these barriers.

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budget w ill be used when establishing obligations o f FY 2001 funds.

Specific strategies to achieve the performance goals include:

• Build leveragin g partnerships to ex pand resou rces going to rura l areas.

• Where a pplicable, direct resource s to the neediest projects an d comm unities.

• Implem ent the N ational Info rmation Infrastructu re Initiative, the reby incr easing ed ucationa l and hea lth

care levels in rural areas.

Verification and Validation: The data used in the Performance Indicators are taken from internal RUS records

rather than from automated accounting systems. The number of residents and businesses receiving service for the

first time are available from information collected from Loan App lication and Loan Feasibility Study, RUS Form

496. Estimates are based on loan studies for the number of new subscribers to be served using loan funds and

adjusted to reflect the number of people receiving service through a single subscribership. A multiplier of 3 is used

to reflect the number of persons p er househo ld and business.

The number of residents and businesses with improved service is also available from Loan Application and Loan

Feasibility Stu dy, RU S Form 496, utilizin g an estim ation pro cess similar to the one d escribed a bove. Fo r instance, a

new digital switch w ould certainly improve all service in the ex change w here the switch w as located and w ould also

improve all service to other exchanges calling into that exchange. Generally, RUS considers the total subscribers of

a borrower receiving a loan as subscribers receiving improved service.

Telecommunications leverage ratio is available from RUS form 479, Part F, Funds Invested in Plant During the

Year. The ratio is derived using total non-RUS loan funds expended for telecommunications plants versus RUS

loan funds expended for the same period. Information on the number of schools receiving transmission facilities for

Distance Learning applications comes from RUS Form 493c, Loan Funds data. (Information collected from the

loan design, submitted with the application, and compiled in RU S Form 493c for each borrower).
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 29 June 30, 2001

While th is information is pro vided b y the app licant and is n ot subject to audit, it is consid ered to be sufficiently

accurate for management’s purposes and for the purposes for which it is being used.

ELECTRIC PROGRAM

Electric Distribution Direct Loans. These loans are made to finance electric distribution facilities. In many cases

the interest rates are tied to the economic conditions of the areas served and the costs of providing service to that

area. Mu nicipal rate lo ans are m ade at variable interest ra tes tied to the in dustry rate on mu nicipal bo nds, capp ed at 

7 percent in areas where consumer income is low and the cost of providing service is high. Hardship loans, with an

interest rate fixed at 5 percent, are made to RUS-financed systems where the cost of providing service is very high

and local economic conditions are severe. Factors taken into account include consumer density, extreme high

residential rates or large rate disparity, and per capita income levels. Treasury rate loans, a budget appropriation

program new in F Y 200 1, are ma de at variab le interest rates tied to the Trea sury’s co st of mon ey. RU S electric

borrowers provide service in the vast majority of the poorest non-metropolitan counties and the non-metropolitan

counties e xperien cing the g reatest out-m igration. 

RUS provides only part of the financing needs for most distribution systems. The borrower obtains the balance

from th e private se ctor. Gen erally, borr owers su pply ap proxim ately 50 p ercent of th eir capital ne eds with in ternally

generate d funds. Of their rem aining ca pital needs, RUS p rovides a pprox imately 7 0 to 100 percent w ith the priva te

sector providing the balance. RUS has recently streamlined procedures for sharing the government’s lien to better

accommo date the private sector.

Guaranteed Loans. RUS guarantees loans made by the Federal Financing Bank (FFB), CoBank - National Bank for

Cooperatives and National Rural Utilities Cooperative Finance Corporation (CFC) to finance electric generation,

transmission and distribution facilities. The interest rate on FFB loans is based on the Treasury’s cost of money plus

1/8 perce nt. Most lo ans are m ade for 3 5 years an d are secu red by th e borrow er’s electric sy stem assets. In order to

ensure the availability of capital to maintain their electric infrastructure, many borrowers apply for RUS loan s every

few years.

Program Activity: Electric Program FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level $1.566b $2.116b $2.615b $2.615b

PERFORMANCE GOALS AND INDICATORS FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Provide modern, affordable electric service to rural

residents and com munities.

Jobs created as a result of facilities

constructed w ith Electric funds. 36,018 48,700 35,600 60,200

Number of rural electric systems

upgraded. 179 137 180 187
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 30 June 30, 2001

Number of consumers benefitting from

system improvem ents (millions). 2.8 2.3 2.8 2.8

Direct program resources to those rural

communities with the greatest need.

Electric loa ns (num ber and amou nt) to

clients serving persistent pov erty counties.

(RUS-financed electric systems provide

service in 523 of the 540 identified

persistent po verty cou nties) (Do llars in

millions).

72

$538

72

$615

88

$750

89

$760

Electric loa ns (num ber and amou nt) to

clients serving persistent out-migration

counties (RUS financed electric systems

provide service to 655 of the 700 counties

identified as having net out-migration)

(Dollars in millions).

83

$379

73

$321

89

$390

90

$390

Maxim ize the leveraging o f loan funds to incre ase

the number of rural residents assisted.

Leveraging of rural electric financial

assistance (private investment to RUS

funding). $2.70:1 $2.88:1 $2.87:1 $2.79:1

Effectively manage the portfolio to minimize

delinquencies an d future losses.

Develop internal processes which

strengthen management of the portfolio of

electric loans.

N/A N/A Review

Staff

Instruction

1717-Y

and revise

as needed

to identify

and

monitor

financially

stressed

borrow ers. 

Review

7CFR 1717

subpart Y -

Settlement

of Debt

regulations

and rev ise if

appropriate.

Discussion of P erforma nce Goa ls: The availability of an adequate supply of electricity is critical to achieving the

Departmental goal to “Expand economic and trade opportunities for agricultural producers and other rural

residents.”

The electric industry is rapidly moving toward a new era of deregulation and intense competition. As more States
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 31 June 30, 2001

move toward deregulation, opening up the electric infrastructure to retailing and driving the forces of competition,

the rural consumer and the rural provider face particular challenges. For example, RUS electric borrowers average

only 6 consumers per mile compared to 33 consumers per mile for investor-owned electric utility systems. As the

competitive nature of the industry heightens, it will be extremely important to rural electric consumers that rural

electric providers have access to reasonably priced capital. The electric program fulfills the continuing purpose of

ensuring that rural residents continue to be served with reliable and affordable electricity.

The performance goals for the electric program fall into three major categories. One set of goals reflects the impact

of RUS on rural residents by measuring the number of rural individuals, families, businesses, and communities

whose quality of life has been enhanced with improved electric and telecommunications services, distance learning

and telemedicine programs, and improved access to clean water and waste water disposal. Since most of the loans

are for construction purposes, a second set measures the impact of the projects on the community through the

creation of jobs. The third category of goals reflect the agency’s success in implementing two key themes of the

Rural Development mission area strategic plan, directing resources to the neediest communities and leveraging of

financial resources.

This program has also been the focus of several audits by the Inspector General and the General Accounting Office

related to large writeoffs which have occurred in the past and is on USDA’s list of Major Management Challenges

and Program Risks. The performance indicator, “develops internal processes which strengthen management of the

portfolio o f electric loan s”, has bee n added in FY 20 01 to ad dress this co ncern. 

Mean s and Strateg ies: Achievement of the FY 2002 Performance Goals and Indicators is contingent upon

receiving the program and general support resources indicated in this plan. The FY 2001 program levels and

projected perform ance targ ets are based on Co ngression al approp riations and are not sub ject to chan ges that co uld

impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced

Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2001

Budg et will be use d when establishing obligation s of FY 2 001 fun ds. 

Specific strategies to achieve the objectives include:

• Build leveragin g partnerships to ex pand resou rces going to rura l areas.

Where a pplicable, direct resource s to the neediest projects an d comm unities.

Continue th e advocacy for Rural Am erica as in policies resulting from deregulation of e lectric utilities.

Coord ination w ith other Fe deral pro grams is n ot require d for the d elivery of the electric p rogram . Propose d projects

must meet the standards of the Environmental Protection Agency (EPA) in the same sense that they must meet the

zoning and construction requirement of the State, county, or local government. These are issues of concern handled

by the ap plicant’s en gineer. O ther Fede ral agenc ies, or State ag encies, m ay be po tential partne rs for joint fu nding if

a specific project me ets their requiremen ts.

Verification and Validation: Most of the data used in the Performance Indicators are taken from internal RUS and

Rural Development mission area records. Data to measure the number of loans, loan amounts, number of

borrowers, and funds advanced are performance measures that will come from the RUS Loan Servicing System

(RUSLS). This automated accounting system is designed to manage the agency’s portfolio of direct and guaranteed

loans. Th e system contains a variety of d ata edits to m inimize th e risk of inac curate da ta being p laced in the system. 

RUSLS is aud ited annu ally by O IG as a pa rt of their dev elopment of an a udited fin ancial statem ent.

Consumers served, counties served, and investment in infrastructure are available from RUS borrower reported
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 32 June 30, 2001

statistics. While this information is not audited, it is considered to be sufficiently accurate for managem ent’s

purpo ses. 

The identification of persistent poverty counties and persistent out-migration counties is available from the USDA

Economic Research Service.

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

when approp riate, leadersh ip to rural are as, rural com munities and coo peratives to give their lea ders the ca pacity to

design an d carry o ut their ow n rural de velopm ent initiatives.”

The preceeding three goals recognize that rural development involves providing financial assistance. Goal 4 adds

the understanding that a successful comprehensive community development process also involves technical

assistance to build leadership capacity and community development skills. Mission area staff provide technical

assistance to rural communities and cooperatives, often in partnership with public and private organizations. The

substanc e of this go al was in M anagem ent Initiative 1 in the Sep tember 1997 S trategic Plan . 

Funding and FT E's: All funds are ap propriated and are included un der the program goals.

Program A ctivity: Commun ity

Development

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

ACTUAL

FY 2002

ESTIMATE

Program level * $0 $17m $15m $15m

 * Funds a re appro priated thro ugh the Rural Business/Coopera tive Servic e budg et.

PERFORMANCE GOALS AND

INDICATORS

FY 1999

ACTUAL

FY 2000

ACTUAL

FY 2001

TARGET

FY 2002

TARGET

Increase th e Capa city of Ru ral 

Comm unities and The ir Leaders.

Rural communities that apply for

non-USDA Rural Development

assistance to implem ent their

comm unity plans. 612 676 400 400 

Partnersh ips Built tha t Implem ent a

Technical Assistance Network for

Commun ities within each State. N/A 233 235 235 

Jobs created or saved in EZ/EC

and RE AP com munities. 2,288 3,354 1,000 1,000

Maxim ize Reso urces A vailable

in EZ/EC’s.

Ratio of non-EZ/EC grants to EZ/EC

grants.

8.4:1 10.7:1 7:1 or

greater

7:1 or greater

Discussion of Performance Goals: The commun ity de velo pme nt pe rform ance goals indi cate R ural D evelo pme nt's

success in helping rural communities plan and implement effective community development programs. The

Empowerment Zones/Enterprise Communities (EZ/EC), National Centers of Excellence, and the various initiatives

mentioned in the goals are designed to address unique needs of the region or population and reflect the mission
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 33 June 30, 2001

area's desire to target its resources to the neediest communities. Since jobs are vital to any prospering community,

the measurement of jobs created or saved through the community development initiatives is quite significant and

meaningful. The final measure ties our community development efforts to the mission area's desire to maximize

partnerships and the leveraging o f funds.

Means and Strategies: Use local and State coordinating bodies, such as planning districts, Resource Conservation

and Development Councils (RC&D) and the State Rural Development Councils, to identify alternative sources of

funding for rural projects. Specific strategies for accomplishing the goal include:

. Use local and State coordinating bodies, such as planning districts, Resource Conservation and

Development Councils (RC&D) and the State Rural Development Councils, to identify alternative

sources of fund ing for rural projects.

Provide assistance and training to rural leaders on strategic planning and other sources of technical

assistance, which are available to help them assess community strengths, plan for the future, and

prepare applications for assistance.

Implement collaborative rural economic and community development training for rural

organizations, invo lving other Fed eral, State, and local agen cies, and organiza tions.

Expand the base of knowledge and understanding of the Rural Development mission area

employees in economic and community development, evaluation methods and operations, and

analyzing the so cial/economic dynamics of rural areas and co mmu nities.

Verification and Validation: A manual process to measure the community development indicators has been

established utilizing data provide d by the State Direc tors. Wh ile its accuracy cannot b e verified, c onfiden ce in this

data is high enough to be acceptable for the purposes for which it is being used.

Goal 5 : Effectiv e, Efficien t Service to the Pu blic “Rural Development will develop the staff, systems, and

infrastructu re neede d to ensu re high q uality deliv ery of its pro grams to all rural reside nts.”

Goal 5 supports the mission area’s management of the human, physical, and financial resources it is given for the 

effective an d efficient d elivery of its program s, and add resses agen cy-spec ific mana geme nt reform issues. 

Mana geme nt Initiatives 3 and 4 in th e Septem ber 199 7 Strategic Plan are in corpora ted in this G oal. 

Objectives of Goal 5:

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

comm unication s, teamw ork, mu tual respec t, and ma ximum individu al develo pmen t.

5.2: Dev elop info rmation systems w hich sup port cost-e ffective de livery of p rogram s and m aximize the availab ility

of information to all employees.

5.3: Improve financial management to ensure fiscal accountability.

5.4 Impro ve procurem ent process and effectiveness.

Funding and FT E's: All funds are ap propriated and are included un der the program goals.

PERFORMANCE GOALS

AND INDICATORS

FY 1999

ACTUAL 

FY 2000 

ACTUAL

FY 2001

TARGET

FY 2002

TARGET
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 34 June 30, 2001

Develop policies and practices which

are employee and family friendly.

Develop common policies

with FSA and NR CS in

support of the Service

Center initiative.

Published

common policies

regarding

performance

evaluations, hours

of work, and

recognition and

rewards.

Partnersh ip

Coun cil

approval

obtained

regarding

common

policies on 

hours of duty,

telecommuting and leave.

Common

regulation on

hours of duties

published.

Training

condu cted via

teleconference

Publish

common

policies

regarding

leave,

telecommuting and 

grievances.

N/A

Provide fair and equitable treatment

to all customers and employe es.

Provide civil rights training

to employ ees.

95% of

employees

received training.

68% of

employees

trained.

90% of

employees

not trained in

FY 20 00 will

be trained.

Train 100% of

new em ployees.

Reduce backlog of

complaints.

36% program and

75% EEO

reductions.

Redu ctions in

complaints of

38% program

and 34% EEO

comp laints. 

35% of

comp laints

filed will be

closed.

40% of

complaints filed

will be closed.

Provide efficient, timely personnel

support.

Implement CAMS. Basic modules

piloted in 5 

States.

Basic modules

implemented

in 37 States.

Basic

modules

implemented

Nationwide.

Move from

client-serve r to

web-based

architecture.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 35 June 30, 2001

Implement an automated

staffing system.

N/A Research

performed.

Participate in

USDA

evaluation

team to

assess

alternative

systems.

Select a system.

Enhance and build information

systems which support the mission

area’s program s.

Fully sup port the u tility

program s.

40% of

requirem ents

operation al.

45% of

requirem ents

operation al.

65% of

requirem ents

operation al.

100% of

requirem ents

operation al.

Implement the new

Guaranteed Loan System

(GLS).

Phase I

implemented.

Phases II, III,

& IV

comp leted. 

Phase V,

Funds

Reservation

system,

comp leted. 

Legacy

GLAS

System

retired.

Electron ic

Data

Interchange

implemented.

93% of GLS

web processes

operational, the

remainder to be

comp leted in

2003.

Develop the Program

Funding Control System

(PFCS).

Cost analysis and

functional

requirem ents

developed.

Evaluation of

comm ercialoff-the-sh elf

systems

completed.

Request for

Proposal

completed.

Select and

install

commercial

software and

begin

developing

unique

capabilities.

Com plete

systems

develop ment.

Implement the provisions of

the E-File legislation.

N/A Completed

required

GPEA and

Freedom to 

E-File plan s to

achieve

compliance.

Implement

web farm.

Convert

existing

forms to

web-enabled

access.

Com plete

automation

support activities

for GPEA and

Freedom to 

E-File

requiremen ts.

Manage the mission area’s financial

resources efficiently and effectively.

Percent o f disbursem ents

made electronically. 32% 53% 60% 75%
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 36 June 30, 2001

Receive an unqualified

opinion on RD’s financial

statemen t.

Qualified opinion

received.

Qualified

opinion

received.

Clean

opinion

received.

Clean opinion

received.

Credit Reform - % of

programs with a clean

opinion from OIG. 0% 16% 100% 100%

Percent of material FMFIA

deficiencies corrected

timely. N/A 75% 50% 50%

Reach management

decision on OIG financial

mana geme nt audit

recommendations within 6

months of audit report

issuance. 90% 90% 90% 90%

Improve procurement process and

effectiveness.

Increase use of

performance-based

contracts.

Expand on-line

procure ment.

N/A

N/A

N/A

N/A

5% of SOW s

contain

performance

standards and

Government

Quality

Assurance

Plans.

Post all

solicitation

synops es into

www .FedBiz

Opps.gov.

80% of

solicitations

available for

download by

contractors.

12% of contact

dollars awarded

on basis of

performance

standards.

All full and open

competition

solicitations

available on the

internet.

Discussion of P erforma nce Goa ls: Rural Development is dependent upon the ability and skills of its staff for the

effective d elivery of its program s. The staff m ust be ade quately tra ined and have the resource s needed if it is to
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 37 June 30, 2001

accomplish its job. The mission area’s administrative resources have been reduced as a result of the

Adm inistration’s an d Con gress’ joint e fforts to bala nce the F ederal bu dget, wh ile program resou rces have increased . 

This has resulted in reductions in staff and field offices needed to deliver the programs plus an even greater

reduction in administrative staff. A reduction in human resources increases the need for automated systems which

can help staff wo rk more efficien tly, while still maintaining their effective ness.

Reductions in resources also requires that Rural Development be innovative in identifying new ways of doing

business while being ever mindful of the need to provide high quality service to our customers. Rural Development

will utilize a management approach and encourage a workplace environment which values employees and involves

them, as p artners, in the manag emen t of the mission area. T he enviro nmen t of the wo rkplace w ill ensure tha t all

custom ers and em ployees are treated fa irly, equitab ly, with dig nity and r espect.

The performance goal, “Improve procurement process and effectiveness”, and the related indicators, support the

Adm inistration’s p riorities. Ach ieveme nt of this go al should result in grea ter competition for mission a rea contra cts

and impro ved perform ance by con tractors.

The mission area’s inability to reasonably estimate the cost of its credit programs has been an ongoing concern for

several years and is included on USDA ’s list of Major Management Concerns and Program Risks. The indicator,

Credit Reform - percent o f programs with a clean op inion from OIG, rep resents the m ission area’s progress is

addressin g this conc ern. The indicator re lated to ob taining an unqua lified opinio n also relates to this effort. 

Means and Strategies: Specific strategies for achieving the objectives include:

Develo p a wor kforce c apable o f delivering a full range of financ ial and no n-financ ial services in

support of rural d evelopm ent activities.

Foster, and continually strengthen, an internal culture that focuses on and is driven by customer

needs, both internally and externally.

Increase the use of Alternative Dispute Resolution (ADR) as a tool for resolving workplace and

external custom er disputes.

Enhan ce the wo rk enviro nmen t by dev eloping policies an d adop ting proc esses wh ich are frien dly

to the em ployees and their fa milies. 

Instill the value of cultural diversity in all Rural Development personnel and develop a workforce

which is representative of the diversity of the areas in which they work.

Provide Civil Rig hts training to all emp loyees. 

Suppo rt USD A service centers by develop ing com mon a dministra tive policies a nd proc esses with

other U SDA agencies. 

Maxim ize the use of autom ated systems to en sure consistency in w ork processes an d as a

replacemen t for staff lost in downsizing efforts.

Include in the reco gnition an d rewar ds system a linkage to the acco mplishm ent.

Support the establishment of USDA Service Centers and develop processes and automated

systems wh ich maxim ize their effectiveness.

Focus information and technical infrastructure development on enhancements which improve

service de livery and maxim izes the ava ilability of data for all emp loyees. 

Make data more accessible by utilizing WEB technology.

Develop a data warehouse to ensure current data is available to all employees and to support the

ability of the mission area to better manag e and analyze its delivery of program s.
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 38 June 30, 2001

Enhance Rural Development’s ability to track and monitor administrative funds appropriations

and provid e accurate reports to all interna l customers.

Implement the electronic funds transfer (EFT) requirements of the Debt Collection Improvement

Act. 

Work with the D epartmental OIG and OC FO to res olve issues related to cre dit reform and ob tain

a clean op inion on Rural D evelopm ent’s aud ited financ ial statemen t. 

Verification and Validation: Quarterly reports from State Civil Rights Managers will be used to report on

progress towards civil rights and EEO performance measures. Verification of surveying activity will be determined

by the su rveying activities con ducted d uring the year. M onthly re ports of E EO pe rforma nce are re viewed to

determine prog ress. 
Rural Development U.S. Department of Agriculture

FY 2001&2002 Annual Performance Plan 39 June 30, 2001

SUMM ARY OF RE SOURCES FO R FY 2001

(Dollars in Billions)

Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Total

Rural Bu sinessCooperative Service

$2.888** $.015 $2.903

Rural Housing

Service

$6.039** $6.039

Rural Utilities

Service

$5.260** $5.260

Total $2.888** $6.039** $5.260** $.015 $14.202

7020 FTEs

SUMM ARY OF RE SOURCES FO R FY 2002

(Dollars in Billions)

Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Total

Rural Bu sinessCooperative Service

$1.103** $.015 $1.118

Rural Housing

Service

$5.759** $5.759

Rural Utilities

Service

$4.854** $4.854

Total $1.103** $5.759** $4.854** $.015 $11.731

7020 FTEs

** The FY 2001budget and the 2002 budget proposal provide for a combined S&E budget for all Rural

Development agencies. The FTE cannot be shown separately.