Rural Development U.S. Department of Agriculture 

 

 

RURAL DEVELOPMENT 

FY 2001 ANNUAL PROGRAM PERFORMANCE REPORT

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

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

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

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

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

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

Rural Economic Development Act of 1990, as amended. 

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

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

of greatest potential. 

This report addresses the performance goals included in the Rural Development FY 2001 and FY 2002 Annual 

Performance Plan, published in June, 2001. 

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

each goal is addressed in this report: 

GOALS PAGE * 

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

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

2 

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

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

quality housing, and modern, essential community facilities. 

8 

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

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

of modern affordable utility services. 

15 

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

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

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

21 

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

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

22 

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

 FY 2001 Annual Performance Report January 2002 

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

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

Plan and Annual Performance Report can also be found on the internet. From the home page, click on About Us and 

then click on Strategic Plans. 

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

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

encouraging the establishment and growth of rural businesses and cooperatives. 

MAJOR PROGRAM FUNDING: 

Rural Business-Cooperative Service 

FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

PROJECTED 

FY 2001 

ACTUAL 

Business Programs $1.365b $1.139b $1.431b $2.852b 

Cooperative Development Programs $3m $16m $17m $36.5m

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

occurred during the fiscal year. 

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

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL 

FY 2001 

TARGE

T

FY 2001 

ACTUAL 

Create or save jobs in rural areas.

Number of jobs created or saved: 

B&I Guaranteed Loans 

B&I Direct Loans 

IRP Loans 

Rural Business Enterprise Grants 

Rural Economic Development Loans 

Rural Economic Development Grants 

36,507 

1,163 

25,245 

11,464 

3,783 

1,677 

29,118 

1,080 

29,266 

9,550 

2,967 

1,521

36,800 

2,200 

49,300 

12,700 

3,700 

600

29,927 

1,816 

29,866 

39,292 

3,697 

624

Community economic benefits (millions) 

B&I Guaranteed Loans 

B&I Direct Loans 

IRP Loans 

Rural Business Enterprise Grants 

$3,109.2 

$65.3 

$82.5 

$91.0 

$2,568 

$75.5 

$95.6 

$86.0 

$3,125 

$125 

$161 

$101.7 

$2,689 

$126.3 

$97.6 

$123.1 

IRP dollars lent by intermediaries/IRP dollars obligated 

to intermediaries (cumulative since Program inception). 89.41% 78.5% 75% 80.6% 

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

Number of businesses benefitting from RBEG program. 2,331 1,483 2,606 3,792

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

 FY 2001 Annual Performance Report January 2002 

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Non-REDLG funds leveraged per dollar of program

funds: 

Loans 

Grants 

$3.00 

$3.00 

$4.56 

$7.16 

$3.00 

$3.00 

$6.44 

$5.29 

2001 Data: Data comes from a variety of sources including: an internal management system, the Rural Community 

Facilities Tracking System (RCFTS); two internal accounting systems; the Program Loan Accounting System

(PLAS) and the Guaranteed Loan System (GLS); Department of Labor employment estimates; and an external 

report, Revolving Loans for Rural America, by Robert Rapoza (the Rapoza report). Data is final and considered 

sufficiently accurate to be used for management decisions. Reports from PLAS and GLS are used by the OIG in the 

development of the mission area's audited financial statement. 

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

reported by the applicant/borrower and input into the RCFTS automated system by the field staff. The number of 

jobs created for REDLG is reported by the applicant/borrower and summarized by the National Office staff in the 

process of reviewing the loan or grant requests. 

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

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

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

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

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

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

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

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

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

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

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

Analysis of Results: This goal was met. The FY 2001 target was short by 78 jobs, or 0.07 percent. However, 

while the total number of jobs to be saved or created was not achieved in totality, success in meeting the Agency's

targets for the individual business programs varied. 

The RBEG program surpassed its target by over 200 percent. The B&I Direct Loan program utilized all of the $50 

million available in FY 2001. Information on the achievement of the targets for these three programs is drawn from

the RCFTS, which continues to have significant problems. Data is placed in RCFTS by the field staff as a part of 

their loan making and servicing efforts. The system lacks the edits needed to ensure all data fields are completed for 

each project and that the data placed in the system is reasonably accurate. During FY 2001, a concerted effort was 

made to increase the reliability of information in RCFTS. An unnumbered letter was issued to all field offices on 

March 7, 2001, defining the critical fields related to annual performance goals and discussing the importance of 

keeping RCFTS fully populated with current information. RCFTS was also discussed with the state office staff 

during monthly teleconferences and the National Training Conference. In addition, data from the Program Loan 

Accounting System (PLAS) was compared with data in RCFTS in a diligent effort to reconcile loan obligations for 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

this fiscal year between the two systems. This entailed reviewing borrower records in RCFTS and determining why 

the records were not being pulled in the report query. Field offices were called individually to discuss the problems 

found and the field staff asked to update the records accordingly. As a result, all Specialty Lenders Division 

program obligations were reconciled between RCFTS and PLAS for FY 2001. In spite of the diligent efforts to 

clean up the records in RCFTS, there are still a number of records without populated fields. 

The targets established for IRP for jobs and community economic benefits were not met due to the volume of 

program activity. The target was based on an initial request for considerably more program funds than was actually 

appropriated by Congress. Also, the Agency was unable to use $1.6 million that was earmarked for Native 

Americans and $5.8 million earmarked for the Lower Mississippi Delta due to lack of applications that qualified for 

the earmarks. 

Description of Actions and Schedules: The performance goal will be revised for FY 2002. Work is underway to 

replace the RCFTS with a new automated management system which will expand our ability to track the activity of 

third-party recipients which will be helpful in documenting program performance. In the meantime, we will 

continue to monitor RCFTS and work with field offices individually, if necessary, to ensure there is a clear 

understanding on the importance of maintaining RCFTS. The unnumbered letter regarding updating critical fields 

for performance measures will be reissued. 

Development of the Rural Development Application Processing and Tracking System (RDAPTS) is underway which 

will provide a basis for approving and measuring the progress of projects. The RDAPTS will allow integration of 

information from multiple systems in a data warehouse thereby improving the integrity of the data used for reporting 

of policy targets, loan applications, obligations and servicing actions. Development of this common computing 

environment will eliminate the redundant data entry and provide the data in a location that can be easily 

consolidated, transitioned and loaded into the data warehouse. Screens are being developed to collect information 

on characteristics of ultimate recipient loans made under revolving loan fund programs such as IRP. This is 

expected to provide more reliable jobs and leveraging data for revolving loan fund programs. 

Current Fiscal Year Performance: The demand for RBS programs increases from year to year. It is anticipated 

that all funds appropriated for business programs will be used in FY 2002. 

Program Evaluations: N/A 

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

expand business outlets. 

Key Performance Goal and Indicators FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGE

T 

FY 2001 

ACTUAL 

Assist marketing networks and cooperative partnerships 

in the establishment and expansion of business outlets. 

Number of Technical assistance and educational 

services provided. 215 205 200 244

Customer rated quality of technical assistance (0-5 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

rating scale). 3.0 3/5 3/5 N/A

Leverage of research expenditure (dollar value of 

RBS sponsored research per dollar of RBS research 

expenditures). $1.25 $1.25 1.2 1.44

Research and educational materials provided to 

customers. 99,600 51,137 100,000 53,594

Number of responses to inquires for information. 16,500 16,000 15,000 16,000

Percentage of B&I Guaranteed funds obligated to 

cooperatives. 4.4% 11% 20% 3.9% 

2001 Data: Data is compiled from State reports, surveys, contracts let, shipment logs and customer service logs. 

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

decisions. 

Analysis of Results: This goal was met. No technical assistance recipient survey was administered during fiscal year 

2001 due to excessive requirements on the part of CS staff to administer significant new programs, so no data is 

available for this measure. Distribution of cooperative materials was constrained during the first half of the year due 

to depleted inventories that resulted from the lack of a printing budget to produce new and reprinted materials. 

Leverage ratios on research were higher than expected due to a relatively small number of research agreements being 

established causing the ratio to be skewed by one agreement with far higher than usual non-federal contribution. 

Description of Actions and Schedules: Efforts to establish a set publications budget for fiscal year 2002 remain 

unfulfilled. The full library is available online, but access to internet materials remains a significant barrier for many 

rural residents. Plans have been made for re-issuance of the technical assistance customer survey. Improvements in 

procedures for collecting technical assistance data for State Rural Development Offices are planned. Leveraging of 

research expenditures will depend upon availability of cooperative agreement research funds. 

Current Fiscal Year Performance: We anticipate that all funds will be utilized this fiscal year. 

Program Evaluations: No GAO, OIG, or other formal program evaluations were conducted in FY 2001. 

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

greatest need. 

Key Performance Goal and Indicators FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGET 

FY 2001 

ACTUAL 

Direct Rural Development program resources to those 

rural communities and customers with the greatest need. 

Percentage of funds obligated in Empowerment 

Zones/Enterprise Communities and REAPs. 

B&I Guaranteed 1.3% 2.0% 1.4% .8% 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

IRP 

RBEG 

12.1% 

21.5%

4.7% 

20.3%

19% * 

22% **

10.8% 

12.7%

Percentage of funds obligated for other 

Presidential or Departmental Initiatives. 

B&I Guaranteed 

IRP 

RBEG 

REDLG 

37.6% 

48.0% 

48.8% 

47.3% 

10.0% 

75.9% 

71.2% 

70.9% 

10% 

20% 

20% 

2% 

7.1% 

17.9% 

6.5% 

0% 

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

request. However, the appropriation language only provided 16.5% earmark for the program. The Agency obligated 

10.8% for FY 2001. 

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

appropriation language only provided 17.2% earmark for the program. The Agency actually obligated 12.7% for FY 

2001. 

2001 Data: Data is compiled from RCFTS, the Program Loan Accounting System (PLAS), and state surveys. 

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

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

soft, it is considered sufficiently accurate to be used for management decisions. Information regarding the Rural 

Economic Area Partnership (REAP) zones was added to this statement because REAP zones were combined with 

Empowerment Zones and Enterprise Communities (EZ/EC) for FY 2000. (1999 actual data shown is for assistance 

to EZ/ECs only.) 

Analysis of Results: This goal was not met. The Specialty Lenders Division used $6,249,648 of the $7 million 

earmarked (or 15.4%) of the $40,664,000 appropriation. Therefore, the Specialty Lenders Division came within .7% 

of using the EZ/EC/REAP appropriated earmarks. 

For the indicator related to usage of IRP funds in EZ/EC/REAP communities, the estimates were based on the 

percentage of the projected appropriation earmarked for these targeted communities. All applications that were 

received before the June 30 deadline, and were eligible for the earmarked funds, were funded. However, in spite of 

Agency outreach efforts, the applications received were only enough to use 10.8 percent of the total IRP and 15.4 

percent of the total RBEG funds appropriated for the programs. Also, the actual RBEG and IRP earmark 

appropriation was only 17.2 and 16.5 percent respectively versus 22 and 19 percent targeted. For other initiatives, 

there were fewer applications than expected, which caused the goal to not be met. 

Presidential or Departmental initiatives changed during the fiscal year due to an administration change. Data being 

reported for FY 2001 is based on usage of Native American and Mississippi Delta earmarked funds only. The 

REDLG Program had no earmarks for FY 2001. FY 2001 was the first year these earmarks were funded. Prior 

emphasis on assistance to Champion Communities, special set aside programs, etc., were not included in the FY 

2001 accomplishments.

Description of Actions and Schedules: We will continue to stress the importance of IRP outreach to communities 

of greatest need to our State Offices through teleconferences, memorandums, training meetings, and other methods. 

The EZ/EC and other initiatives are included as part of the Administrator’s goals. 

 FY 2001 Annual Performance Report January 2002 

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Current Fiscal Year Performance: All targets are expected to be met in FY 2002. 

Program Evaluations: None. 

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

Key Performance Goal and Indicator FY 1999 

ACTUAL

FY 2000 

ACTUAL 

FY 2001 

TARGE

T

FY 2001 

ACTUAL 

Manage the B&I portfolio effectively to minimize the 

delinquency rate.

Delinquency rate (excluding bankruptcy cases) 4.8% 4.2% 3% 4% 

2001 Data: Data is reliable and final. RCFTS is a non-accounting management system, which contains a variety of 

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

staff and does not contain edits to verify the accuracy of the data. Manual reports from State Directors will be used 

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

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

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

used for management decisions.

Analysis of Results: The FY 2001 Delinquency Goal was established at 3 percent. The delinquency achievement 

for this period was 4 percent (excluding loans in bankruptcy). While the goal was not met, there was a reduction 

from the FY 2000 delinquency level which was 4.2 percent (excluding loans in bankruptcy).

We were able to lower the delinquency percentage by adding additional guaranteed loans and by carefully 

monitoring the lending and servicing activities of the State Offices. We are concerned with the potential rise in 

delinquencies for fiscal year 2002 and are presently employing various strategies to mitigate, to the extent possible, 

the delinquencies in both the guaranteed and direct programs. 

Description of Actions and Schedules: The National Office is establishing individual delinquency goals based on 

the States present achievement. 

Current Fiscal Year Performance: The National Office will monitor at least quarterly for achievement levels. 

Program Evaluations: The National Office conducts a Business Programs Assessment Review of 10 states per 

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

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

recommendations for corrections are made and National Office staff performs monitoring to ensure conformance. 

The Office of the Inspector General initiated a preliminary audit of the servicing activities in a cross section of states 

to determine the need for a complete audit. The information obtained from the States involved revealed the need for 

a full audit. This audit will be conducted during fiscal year 2002. 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

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

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

essential community facilities. 

MAJOR PROGRAM FUNDING: 

Rural Housing Service 

FY 1999 

ACTUAL 

FY 2000 

ACTUA

L 

FY 2001 * 

PROJECTED 

FY 2001 

ACTUAL 

Single Family Housing Programs $4.04b $3.357b $4.324b $3.51b 

Rural Rental Housing Programs $810m $941m $952m $859m

Community Facilities Programs $278m $302m $763m $535m

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

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

agencies are combined. Therefore S&E and FTE figures, at the agency level, cannot be provided separately. 

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

sanitary and affordable housing. 

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL 

FY 2001 

TARGET

FY 2001 

ACTUAL

Improve the quality of life of residents of rural communities by 

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

Rural households receiving financial assistance to 

purchase a home of their own. 55,941 45,420 57,000 44,073**

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

504 Loan and Grant 65,721* 58,018 84,000 57,234***

Number of houses financed through the Section 502 Direct 

Loan Program 16,145 17,026 15,600 14,638**

Number of houses financed through the Section 502 Direct 

Loan (Natural Disaster) Program 44 519 126 143**

Number of houses financed through the Section 502 

Guaranteed Loan Program 39,752 29,123 42,000 29,326**

Number of existing houses improved (Section 504 Loans 

and Grants) 9,075 10,360 12,000 11,762**

Number of existing houses improved (Section 504 Loans 

and Grants Natural Disaster) 321 990 4,000 507**

Number of jobs created (Direct 502) 14,257 17,520 16,000 16,171 

Number of jobs created (Guaranteed 502) 21,409 14,323 21,000 14,438

* Includes 384 Individual Water and Waste Disposal Grants 

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

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

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

2001 Data: Data on the number of homes financed or improved came from Obligations Report 205 which is derived 

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

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

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

subject to governmental audits. All data is final. 

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

the guaranteed loan program. The target of 42,000 loans assumed the use of all of the funds allocated for the 

program. This situation did not occur because the number of loans closed for the year under the Section 502 

Guaranteed Loan Program (29,236) was 30.2 percent, or 12,674 loans, less than the 42,000 target for the Section 502 

Guaranteed Loan Program. This decline is the opposite of the increase in home mortgages originated throughout the 

country and is attributable to factors in the RHS program such as the lack of an automated underwriting capability, 

the lack of a refinancing capability for much of the year, and the prohibition on cash-out or equity withdrawal 

refinancing. General industry data for the first half of 2001 show a 94 percent increase in loans originated when 

compared to the first half of 2000. However, the majority of the increased volume, 55.7 percent, is due to 

refinancing activity generated by interest rate declines and home price appreciation. (Footnote 1) According to the 

Mortgage Bankers Association of America, more than 50 percent of those refinancing their mortgages have taken 

out equity in the process. (Footnote 2) Section 502 loans do not permit equity withdrawals when refinancing an 

existing RHS loan, and RHS refinancing activity for the year was not generally available until after May 2001. 

VA’s preliminary FY 2001 data show a 69 percent increase in loan volume over the previous year. Roughly 72,800 

(or 29 percent) of the approximately 250,009 loans guaranteed during FY 2001 were refinancing loans. Of those, 

5,100, or only 2 percent of all VA guaranteed loans, involved cash-out financing. Information derived from

information through July 2001 supplied by the Federal Housing Administration shows approximately a 30 percent 

increase in loan volume over 2000, with approximately 23 percent of the total as refinancing loans. Of those, only 

about 6 percent were cash-out refinances. 

1. National Mortgage News, August 27, 2001, p1. 

2. Real Estate Finance Today, October 15, 2001, p2. 

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

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

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

proposing to have completed and deployed by FY 2003. 

Additionally, since the program now has limited refinance authority, many guaranteed loans that would otherwise 

refinance through other Government programs may now stay in the guaranteed program by refinancing, thus 

improving the performance of the loan and lowering the Government’s risk. 

Current Fiscal Year Performance: All current performance indicators for this goal will continue for FY 2002. 

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

performance is less than expected. 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

Program Evaluations: N/A 

Key Performance Goals and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL 

FY 2001 

TARGET 

FY 2001 

ACTUAL 

Improve the quality of life for the residents of rural 

communities by providing access to decent, safe, sanitary and 

affordable rental housing.

Total Number of units selected for funding for new 

construction (FY) * 5,351 5,357 5,519 2,557

Sec. 515 2,189 1,626 1,800 1,578

Sec. 514/516 622 680 790 855

Sec. 514/516 Natural Disaster 0 156 29 24

Sec. 538 2,540 2,895 2,900 0 

Total Number of units selected for funding for rehabilitation 

(FY) * 4,736 7,100 8,000 8,267

Sec. 515 2,340 4,990 5,500 5,511

Sec. 514/516 626 696 500 1,003

Sec. 533 1,770 1,414 2,000 1,729

Direct resources to those rural communities and customers 

with the greatest need. 

Average tenant income. $7,671 $7,775 $7,980 $7,980

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

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

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

Number of households not displaced by loss of rental 

assistance (number of renewals). 38,311 38,489 42,000 39,159

Percent of tenants not displaced by loss of rental 

assistance. 100% 100% 100% 100% 

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

sanitary housing. 426,330** 429,288** 432,246** 453,275 

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

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

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

**Estimated, actual data not available. 

2001 Data: The number of new units built and the number of units rehabilitated were derived from Multi-Family 

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

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

development needed to provide data for those indicators showing “Not Yet Available” was nearly completed at the 

end of FY 2001. Data for most of these indicators should be available in the next fiscal year. 

 FY 2001 Annual Performance Report January 2002 

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 Rural Development U.S. Department of Agriculture 

 

 

Analysis of Results: Overall the goal was met but success in meeting the individual targets was mixed. Decisions 

were made to place emphasis on disposing of inventory properties and to shift money from new construction to 

repairs of existing properties. The number of new units built was below target for Section 515, reflecting this shift 

of funds to the much needed rehabilitation of existing units. Targets for the number of units rehabilitated were 

exceeded for the Section 515 Rural Rental Housing Loan Program and the 514/516 Farm Labor Housing Programs. 

The Section 514/516 Natural Disaster program was slightly under target because a small amount of the funds was 

not obligated. The Section 533 target fell short by 247 units. This grant program has a provision that permits State 

Directors to move some of these funds to the Section 504 Grant Program, which can be done after the allocation of 

funds and after the establishment of the target, thus making this a moving target. We are comfortable that even with 

shifting funds, the program selected 339 more units for funding in FY 2001 than in FY 2000. The Section 538 Rural 

Rental Guaranteed Loan Program was below target because: (1) the necessary enhancements to the program to make 

it acceptable to its customers have not yet been completed; (2) the Memorandum of Understanding with Freddie Mac 

did not get executed until June 21, 2001, which limited the lenders’ access to the Secondary Mortgage Market; and 

(3) the Notice of Funds Availability (NOFA) closed August 16, 2001. On this date we received approximately $93 

million of the total $113.5 million in NOFA responses received for the entire year. It was not possible to process 

NOFA responses, receive and process the application packages from the lenders, and do the Environmental 

Assessments in the 45 days remaining in the Fiscal Year. We have made adjustments to meet the FY 2002 target. 

The number of households not displaced by loss of rental assistance (number of renewals) was slightly below target 

because the number of actual renewals was less than projected due to several factors: tenant income, vacancies, etc. 

No tenants were displaced by loss of rental assistance. The rental assistance (RA) not needed for renewals was used 

for additional RA units in existing and new MFH projects. 

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

indicators when data becomes available from the new Multi-Family Tenant File System, currently scheduled to be 

completed by the end of 2002. 

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

appropriate actions in the event performance is less than expected. 

Program Evaluations: N/A 

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

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Provide new or improved essential community facilities 

Number of rural residents with improved standards of living 

through new or improved essential community facilities (in 

millions). 8 8.1 20 12

Number of jobs created or retained. 9,600 4,493 10,998 5,814 

Community Health

Number of new or improved health care facilities. 123 116 280 156

Number of new or improved elder care facilities 42 32 75 47 

 FY 2001 Annual Performance Report January 2002 

11 
 Rural Development U.S. Department of Agriculture 

 

 

Number of beds available at new or improved elder care 

facilities. 4,932 2,558 6,000 935

Emergency Services

Number of new or improved fire and rescue facilities. 72 104 250 161

Number of new or improved fire and rescue vehicles. 140 128 300 212

Education and Child Care

Number of new or improved child care centers. 69 55 130 63 

Number of children served by new or improved child care 

centers. 5,628 4,049 9,800 2,167

Number of new or improved schools. 32 44 100 67 

2001 Data: Community Facility Program data were derived from the Community Facility staff’s internal tracking 

system in unison with the Rural Community Facilities Tracking System (RCFTS). The RHS field staff input the data 

into RCFTS and it does not contain edits nor is it audited or reports from it used by the auditors. Although the 

agency considers this soft data, it is used in managing the program and is considered reliable for the purposes for 

which it is used. The data is final. 

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

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

obligated, however, only 66 percent of guaranteed loans were utilized. Community Facilities received an additional 

$255 million for natural disasters and economically distressed areas, however, only 50 percent could be utilized. 

Last year’s efforts to provide training and tools for field staff members to market CF guaranteed loans at the local 

level have proven successful. States are actively conducting outreach meetings with local lenders to promote the 

program. 

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

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

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

school facilities, community buildings, and industrial parks. The mix of projects funded depends on community 

needs across the country and the timing of loan and grant applications. The FY 2001 variance of actual performance 

compared with the targets reflects the unpredictability of the project mix and is no cause for alarm. A review of the 

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

In FY 2001, CF invested approximately $555 million to help rural communities develop 1203 essential community 

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

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

community support services continue to be a high priority for funding in addressing the needs of rural communities. 

In FY 2001, program emphasis was placed on promoting rural education. As a result, 97 projects were funded for 

schools and libraries amounting to almost $78 million from combined CF programs. This included funding for 

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

service centers, and all-purpose college campus buildings. 

 FY 2001 Annual Performance Report January 2002 

12 
 Rural Development U.S. Department of Agriculture 

 

 

Program resources in FY 2001 continued to be invested heavily in rural health care facilities as $179 million in 

combined program resources were used to fund 156 new or improved health facilities, which greatly benefit seniors 

and residents in medically under-served areas greatly benefit. Projects funded include nursing homes, boarding 

homes for elderly with ambulatory care, assisted living facilities, and adult day care centers. Program emphasis will 

be to continue to serve the ever-increasing rural elderly population. 

Qualification on accuracy of data provided: In the following tables, we are providing only actual data from RCFTS 

and are not projecting the number of people served or the capacity of facilities based on the data reported in RCFTS. 

 The following tables are provided to show the percentage of facilities with accurate data reported: 

Elderly Number Amount Units Percent Reported

Nursing Home (Sr. Citizen 

Retirement Home) 14 $32,099,010 397 28.57% 

Boarding Home for Elderly – 

Ambulatory Care 4 $3,171,290 24 25.00% 

Assisted Living Facility 25 $21,782,570 514 68.00% 

Adult Day Care Center 4 $620,950 

Total 47 $57,673,820 935

Education Number Amount Units Percent Reported

Educational Institution for 

Disabled 

6 $2,392,568 12 50.00%

Public School 20 $21,941,064 256 15.00% 

College Dorm 3 $2,085,500 200 66.67% 

College 19 $29,299,552 1245 21.05%

Vocational School 5 $1,345,500 0.00% 

Charter School 2 $4,200,000 27 50.00% 

All Purpose Campus Building 12 $8,947,083 

Library 26 $6,882,290

School Maintenance and 

Equipment Service Center 

4 $579,300

Total 97 $77,672,857 1740

Child Day Care Center 63 $27,067,928 2167 38.10% 

Some facilities are shown with no units because units measured varies for different types of facilities or the number 

reported was community population and therefore not accurate. 

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

Guaranteed Loan Program funds through extensive outreach to lenders. During FY 2000 and 2001 efforts were 

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

 FY 2001 Annual Performance Report January 2002 

13 
 Rural Development U.S. Department of Agriculture 

 

 

training States on conducting outreach meetings, and issuing CD’s to States on the outreach efforts at the training 

meeting. 

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

needed. All performance indicators, except for the one mentioned above, will be included in the next performance 

plan. 

Program Evaluations: None conducted. 

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

Development programs. 

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Maximize the leveraging of loan funds to increase the 

number of rural residents assisted by Rural Development 

programs. 

Number of borrowers assisted through leveraging 

(Direct 502). 5,371 6,448 7,500 7,753

Number of Guaranteed lenders participating in 

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

Number of Rural Home Loan Partnerships. 78 177 180 239 

Number of CF funding partnerships. 565 866 2,000 452

Number of CF borrowers assisted through leveraging. 429 492 1,200 414 

2001 Data: The actual performance data for the Direct Section 502 program comes from the Single Family Housing 

staff’s internal tracking system, while data on Guaranteed Section 502 comes from a FOCUS ad hoc report. The 

Community Facility Program data were derived from the Rural Community Facility Tracking System (RCFTS). 

RCFTS data is considered to be soft, but reliable. It is not audited nor are reports from RCFTS used by the auditors. 

 The data is final. 

Analysis of Results: The number of CF borrowers assisted through leveraging was below the target. Community 

Facilities funding included $255 million for natural disasters and economically distressed communities. Targets for 

leveraging were increased based on increased funding without considering that funding from other sources is 

diminished when a natural disaster occurs or an area is economically distressed. In the SFH guaranteed program, 

although the total number of lenders approved increased, the total number of loans originated nationwide decreased, 

which was a reflection of the mortgage business as a whole. The lack of an automated loan origination system is 

another reason that the SFH Guaranteed Loan program is falling behind in loan production. This has become a 

significant issue for the program. 

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

 FY 2001 Annual Performance Report January 2002 

14 

Current Fiscal Year Performance: RHS will monitor performance periodically. All performance indicators will be 

included in the next performance plan. 
 Rural Development U.S. Department of Agriculture 

 

 

Program Evaluations: None conducted during FY 2001. 

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

Key Performance Goal and Indicators FY 1999 

ACTUAL 

FY 2000 

 ACTUAL 

FY 2001 

TARGE

T

FY 2001 

ACTUAL 

Provide effective supervision to minimize delinquencies 

and future loss.

First-year delinquency rate (SFH Direct). 5.3% 3.2% 4.3% 3.2%

Number of RRH projects with accounts more than 180 

days past due. 164 153* 130 146 

* Includes 18 properties in inventory. 

2001 Data: Data were derived from Rural Development Finance Office loan servicing reports, which are reliable 

and used by OIG in their audits of the mission area. The SFH first-year delinquency rate, as of September 30, 2001, 

was obtained from a FOCUS ad hoc report. The RRH delinquency data come from a 616 report. The data is final. 

Analysis of Results: The performance goal was not met for RRH. The target was exceeded for the first-year 

delinquency rate for Single Family Housing Direct loans. Although the target for RRH projects with accounts more 

than 180 days past due was not achieved, the number was reduced from the FY 2000 actual figure. (Note: Rural 

Development’s FY 2000 and FY 2001 Performance Plan erroneously stated the performance indicator for RRH as 

less than 180 days past due, rather than more than 180 days past due.) 

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

Current Fiscal Year Performance: All current performance indicators for this goal will continue for FY 2002. 

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

the event performance is less than expected. 

Program Evaluations: None conducted in FY 2001. 

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

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

services. 

MAJOR PROGRAM FUNDING: 

Rural Utilities Service 

FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

PROJECTED 

FY 2001 

ACTUAL 

Water and Environmental Programs $1.301b $1.337b $1.548b $1.410b 

Telecommunications Programs 

 FY 2001 Annual Performance Report January 2002 

15 
 Rural Development U.S. Department of Agriculture 

 

 

$461m $670m $669m $669m

Distance Learning and Telemedicine Programs $68m $25m $427m $26.8m

Electric Programs $1.556b $2.117b $2.615b $2.616b 

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

occurred during the fiscal year. 

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

Key Performance Goal and indicators FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGE

T

FY 2001 

ACTUAL 

Provide rural residents with modern, affordable water and 

waste services. 

Rural water systems developed or expanded which 

provide quality drinking water in compliance with 

the Safe Drinking Water Act. 579 590 668 613 

Rural waste disposal systems developed or 

expanded which provide quality waste disposal 

service in compliance with State and Federal 

environmental standards. 

328 325 368 309 

Total jobs generated as a result of facilities 

constructed with W&W funds. 33,017 39,771 46,670 40,600 

2001 Data: These data are considered final and are considered reliable. Data on the number of loans for water 

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

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

Analysis of Results: The number of loans for both water systems and waste disposal systems did not meet the 

established targets. The primary reason for this is the unusually large amount of allocated funds which were 

switched from loan to grant during the fiscal year, a tool available to States so they can adjust amounts allocated to 

meet actual needs. A total of $112 million was switched, which was more than double the amount for the previous 

year. Based on the average for the year, this would have equaled approximately 130 loans, which exceeds the 

shortfall. The number of jobs generated is also lower than the target. This is also due in part to the switching of 

funds. 

Description of Actions and Schedules: No additional actions are considered necessary to meet the FY 2002 

targets. 

Current Fiscal Year Performance: Performance for FY 2002 is expected to be sufficient to meet targets, assuming 

the amount appropriated equals or exceeds that used to establish the targets. 

 FY 2001 Annual Performance Report January 2002 

16 
 Rural Development U.S. Department of Agriculture 

 

 

Program Evaluations: None. 

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

Learning/Telemedicine services, in rural communities. 

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Provide modern, affordable telecommunications 

services to rural communities. 

Number of new subscribers receiving service. 

170,000 154,899 67,000 188,908

Jobs generated as a result of facilities 

constructed with Telecommunication funds. 10,603 15,410 17,700 15,387

Number of subscribers with improved service. N/A 275,196 275,000 315,308

New Rural subscribers capable of receiving 

broadband service. N/A N/A 111,000 N/A

Schools receiving transmission facilities for 

Distance Learning applications. 15 N/A N/A N/A 

2001 Data: Data related to the number of new residents and businesses receiving service comes from project files 

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

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

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

Analysis of Results: The performance goal was met. Only the target for jobs generated was not met. The target for 

number of new residents and businesses receiving service was greatly exceeded due to the use of a new formula to 

better estimate the number of persons to be served. 

Description of Actions and Schedules: RUS is taking actions to ensure that the total funds available for FY 2002 

will be used and the targets will be met. These actions include enhanced outreach activities by RUS staff and Rural 

Development State Offices. 

Current Fiscal Year Performance: Performance for FY 2002 is expected to be sufficient to meet targets. For the 

second year, the pilot broadband loan program was authorized. $80 million in loans have been made available to 

facilitate the deployment of broadband service in rural communities with populations of up to 20,000 inhabitants. 

During the first year of the pilot program, $100 million in lending authority was used in its entirety providing new 

service to over 30,000 customers. 

Program Evaluations: N/A 

Key Performance Goal and Indicators FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGET 

FY 2001 

ACTUAL 

Provide distance learning and telemedicine services, 

 FY 2001 Annual Performance Report January 2002 

17 
 Rural Development U.S. Department of Agriculture 

 

 

utilizing modern telecommunications technologies, to 

rural communities. 

Number of schools receiving distance learning 

facilities.

287 277 840 590 

Number of health care providers receiving 

telemedicine facilities. 

131 138 570 236 

2001 Data: This data is obtained from RUS program records of projects funded, applications received, and although 

not part of an automated system, is considered reliable for management purposes. This data is final. 

Analysis of Results: The Performance goal, as measured by the targets, was not met. Target performance assumed 

full usage of all funds available and this did not occur. While all grant funds were used, none of the loan funds 

available were obligated. Revisions are again being implemented to increase the use of loan funds.

Description of Actions and Schedules: Program revisions are expected to have an impact in FY 2002 including 

purposes for which loan funds can be utilized and a new expedited application review process. In addition, 

continued outreach activities by the National Office and Rural Development State Offices will be implemented. 

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

Program Evaluations: None. 

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

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Provide modern, affordable electric service to rural 

residents and communities. 

Number of rural electric systems upgraded. 179 137 180 220 

Number of consumers benefitting from system

improvements (millions). 2.8 2.3 2.8 3.5 

Jobs created as a result of facilities constructed 

with Electric funds. 36,018 48,700 35,600 45,000 

2001 Data: The data is obtained from RUS program records of projects funded and applications received and is 

considered reliable for management purposes. This data is final.

Analysis of Results: The goal and all performance indicators were exceeded. 

Current Fiscal Year Performance: Performance for FY 2002 is expected to be sufficient to meet targets. No 

change is planned in the performance indicators. 

 FY 2001 Annual Performance Report January 2002 

18 
 Rural Development U.S. Department of Agriculture 

 

 

Program Evaluations: GAO Report AIMD-00-288, “financail Management Impact of RUS’ Electricity Loan 

Restructuring”. 

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

need. 

Key Performance Goals and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Direct program resources to those rural communities 

with the greatest need.

Number of water and waste assistance projects in 

the identified persistent poverty counties 247 219 248 236 

Total W&W project cost $298m $341m $401m $308m

RUS amount $257m $249m $278m $240m

Special initiative – number of projects and amount of 

W&W funding (in millions)

EZ/EC 28 ($21) 33($46) 74($65) 59($49) 

Colonias 38 ($22) 36 ($19) 40($20) 32($20) 

Pacific Northwest 34 ($32) 0 0 0 

Alaskan Villages 14 ($29) 24 ($20) 23($20) 18($20) 

Guaranteed Loans 7 ($5.8) 9 ($11) 49($75) 6($5) 

Electric loans (number and amount) to clients serving 

persistent poverty counties (dollars in millions). 

72 

$538

72 

$615

88 

$750

98 

$829 

Electric loans (number and amount) to clients serving 

persistent out-migration counties (dollars in millions) 

83 

$379 

73 

$321 

89 

$390 

97 

$530 

2001 Data: The data for RUS assistance provided in persistent poverty counties are considered final and are 

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

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

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

Analysis of Results: The goal overall was not met. The number and amount of RUS Water and Waste loans and 

grants provided in persistent poverty counties are lower than the targets, but the performance measures for Electric 

Loans were exceeded. The number for Water and Waste for both Colonias and Alaskan Villages was somewhat 

lower than the target, since the average amount was higher than projected; however, all of the available funds were 

expended. Overall EZ/EC performance was lower than projected in terms of both number and amount. However, 

the entire amount allocated for EZ/EC grants was utilized. Due to the nature of projects funded in FY 2001, a higher 

level of grant was required, resulting in fewer projects and some loan funds reverting to the regular program. The 

number of guaranteed loans was once again small, due primarily to the lack of authority to guarantee tax-exempt 

loans. 

 FY 2001 Annual Performance Report January 2002 

19 
 Rural Development U.S. Department of Agriculture 

 

 

Description of Actions and Schedules: No specific additional actions are necessary to meet the goal for FY 2002. 

Achievement of target levels is a function of available funding and the number and dollar amount of applications 

received that meet RUS criteria, as well as adjustments to loan and grant levels during the year. 

Current Fiscal Year Performance: Performance for FY 2002 is expected to be sufficient to meet targets, assuming 

the appropriation equals or exceeds that used to establish the targets. 

Program Evaluations: GAO Report AIMD-00-288, “Financial Management Impact of RUS’ Electricity Loan 

Restructuring”. 

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

Development programs. 

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Maximize the leveraging of loan funds to increase the 

number of rural residents assisted. 

Leveraging of telecommunications financial assistance 

(private investment to RUS and RTB funding). $5.22:1 $6.51:1 $5:1 $5.7:1 

Leveraging of telemedicine and distance learning 

financial assistance (private investment to RUS 

funding). 

$1.45:1 $1.21:1 $2:1 $0.94:1 

Leveraging of rural electric financial assistance (private 

investment to RUS funding). $2.70:1 $2.88:1 $2.87:1 $ .70:1 

** In previous years this number has been between $ 2.00-3.00 of private investment to Govt. funding. However, 

in FY 2001 50% of the Govt. advances ($ 978 million of $ 1.957 billion) (65.4% of the $ 1.495 billion 

FFB advances) went to G&T's to finance Generation and Transmission projects. G&T financing makes use of 

FFB loan guarantees. FFB financing does not require a private financing component to finance energy projects as 

does RUS insured and direct loans to distribution borrowers. 

The increase in loan guarantees and the advance of loan funds was in direct response to the uncertainty of the 

wholesale power market and the need for borrowers serving rural areas to manage their electricity supply portfolio 

to ensure reliable electric service at a competitive cost. RUS responded quickly to the demands placed on the 

nation's energy supply and delivery system. 

2001 Data: This data is derived from RUS records, is verifiable, and is final. The telecommunications leverage ratio 

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

Analysis of Results: The purpose of leveraging funds with the private sector is to stretch limited program funds and 

this purpose was achieved. The targets related to telecommunications and electric power were met. The target 

related to telemedicine and distance learning was not met but the impact of this result is not significant. As indicated 

earlier, the demand for loan funds for this program has been less than the supply of funds. Continuing these 

indicators is important because leveraging will be more important in future years as these programs grow. 

 FY 2001 Annual Performance Report January 2002 

20 
 Rural Development U.S. Department of Agriculture 

 

 

Description of Actions and Schedules: RUS is increasing its outreach activities to the telemedicine and distance 

learning programs. As the requests for loan funds increase, the interest of private lenders in the program is also 

expected to increase. 

Current Fiscal Year Performance: RUS expects to fully utilize the total funds available for FY 2002 and expects 

to meet the leveraging targets. 

Program Evaluations: None conducted. 

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

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

design and carry out their own rural development initiatives. 

MAJOR PROGRAM FUNDING: 

Community Development 

FY 1999 

ACTUAL 

FY 2000 

ACTUA

L 

FY 2001 

PROJECTED 

FY 2001 

ACTUA

L 

Rural Empowerment Zone and Enterprise 

Community 

$0 $15m $14.967 $14.967m

Key Performance Goals and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Increase the Capacity of Rural Communities and Their 

Leaders

Rural communities that apply for non-USDA Rural 

Development assistance to implement their community 

plans. 

612 676 400 No longer 

collected 

Partnerships built that implement a technical assistance 

network for communities within each state. N/A 233 235 No longer 

collected 

Jobs created or saved in EZ/EC and REAP communities. 2,288 3,354 1,000 11,997 

Maximize Resources Available in EZ/EC’s. 

Ratio of non-EZ/EC grants to EZ/EC grants 8.4:1 10.7:1 7:1 or 

greater 

17.77:1 

 FY 2001 Annual Performance Report January 2002 

21 

2001 Data: Information regarding job creations and the success of EZ/EC communities in obtaining funding from

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

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

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

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

decisions. All information is final. 
 Rural Development U.S. Department of Agriculture 

 

 

 

Analysis of Results: The data for the first two indicators is usually self-certified by the State Directors and input via 

the annual Administrator’s priority performance goal. The requirement was waived during FY 2000, and data for 

last year was gathered via a query to the States Offices. OCD anticipated that Administrator’s priority performance 

goals would be reinstated with the new fiscal year, but they were not. Due to a 40% reduction on OCD staff since 

January 2001, and the announcement of Round III of the Empowerment Zone program in December of 2000, OCD 

was unable to perform an additional survey this year, as we did last year. These are still valid indicators, but the 

administration did not gather any data to measure them. Since we no longer have a source for this data, these 

indicators will be discontinued. The remaining two indicators were exceeded. With the emphasis being placed on 

the third round of the EZ/EC program, Rural Development anticipated much lower numbers. However, due to 

extraordinary efforts by all involved, we were able to exceed the goal. 

Description of Actions and Schedules: None planned. 

Current Fiscal Year Performance: The two remaining indicators will be retained for FY 2002. Performance in 

FY 2002 is expected to be similar subject to funding and staffing being restored. Although the FY 2001 goals were 

exceeded, the Office of Community Development (OCD) is now responsible for additional clients brought in 

through the third round of the Empowerment Zone program and believes that this will effect resources available for 

other activities. 

Program Evaluations: Fourteen management Control Reviews were conducted in fourteen states in FY 2001. It 

was consistently found that there was a direct correlation between those communities that are successfully 

implementing their strategic plans and the commitment, skills and abilities of the Rural Development staff charged 

with assisting these communities. However, inconsistencies were found among Rural Development State offices as 

to how the community development staffs are organized, trained and allocated to the community development 

functions. A committee under the direction of the under Secretary has been convened to address this finding. 

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

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

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

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

Key Performance Goals and 

Indicators

FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Developed policies and 

practices which are employee 

and family friendly. 

 Develop common 

 Policies with FSA and 

 NRCS in support of the 

 Service Center Initiative. 

Published 

common policies 

regarding 

performance 

Partnership 

Council approval 

obtained regarding 

common policies 

Publish 

common 

policies 

reagarding 

Telecommuting 

policy document is 

in the clearance 

process. Leave and 

 FY 2001 Annual Performance Report January 2002 

22 
 Rural Development U.S. Department of Agriculture 

 

 

evaluations, 

hours of work, 

and recognition 

and awards. 

on hours of duty, 

telecommuting and 

leave. Common 

regulation on hours 

of duties published. 

 Training 

conducted via 

teleconference. 

leave, 

telecommuting 

and 

grievances. 

other common 

policies are on hold 

pending NFAC 

decision and 

guidance on future 

direction. 

Provide fair and equitable 

treatment to all customers 

Provide civil rights 

training to employees 

95% of 

employees 

received 

training. 

68% of employees 

trained 

90% of 

employees not 

trained in FY 

2000 will be 

trained. 

93% of employees 

not trained in 

FY2000 received 

training. 

Reduce backlog of 

complaints 

36% Program

and 75% EEO 

reductions. 

Reductions in 

complaints of 38% 

Program and 34% 

 EEO complaints. 

35% of 

complaints 

filed will be 

closed. 

36% of complaints 

filed were closed. 

Provide efficient, timely 

personnel support. 

Implement CAMS. Basic modules 

piloted in 5 

States. 

Basic modules 

implemented in 37 

States. 

Basic modules 

implemented 

nationwide. 

Basic modules 

implemented 

nationwide. 

Implement an automated 

staffing system. 

N/A Research 

performed. 

Participate in 

USDA 

evaluation 

team to assess 

alternative 

systems. 

Participate in USDA 

evaluation team to 

assess alternate 

systems. Participation on-going. 

2001 Data: Information regarding the development of personnel regulations came from the files of the Human 

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

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

final. 

Analysis of Results: The performance goals were largely achieved. CAMS basic modules were implemented 

nationwide. The policies on Hours of Duty, Telecommuting, and Leave were developed as common administrative 

policies in cooperation with the other USDA service center agencies, the Farm Services Administration (FSA) and 

the National Resources Conservation Service (NRCS). All three policies won conceptual approval from the RD 

partnership Council. Hours of Duty was finalized and implemented. This policy allows for a variety of 

 FY 2001 Annual Performance Report January 2002 

23 
 Rural Development U.S. Department of Agriculture 

 

 

family/employees friendly work schedules, including “compressed” and “maxiflex” schedules. Feedback from field 

employee organizations has been very positive. 

Rural Development exceeded the target for civil rights training. This was achieved by aggressively contacting states 

with less than 100% completion rates. Those states were encouraged to contact all employees who had not taken the 

training. The Civil Rights staff reduced its backlog of EEO complaints by focusing most of its resources in the 

informal process to increase the resolution rate. A dynamic EEO counselor was added to the staff and his presence 

has done much to bring creative approaches to complaint resolution at the earliest stages. In the formal process we 

continue to encourage managers to resolve complaints that have merit. 

Description of Actions and Schedules: Telecommuting agreements with individuals employees have been 

implemented as a practice on a case by case basis mission area wide. The final Telecommuting policy is in the RD 

issuance clearance system and will be published as an RD instruction. The Leave policy is being redrafted to 

incorporate recent legislation and Executive orders promoting family friendly leave program changes. Leave and 

other common policies are currently on hold at the direction of the National Food and Agriculture Council (NFAC) 

pending review and guidance from policy officials of the new Administration. 

Current Fiscal Year Performance: It is anticipated that the Telecommuting policy will be issued and implemented 

in FY 2002 as an RD Instruction. Training will be provided as needed. 

Resolutions of complaints will likely be low because related costs are paid from the State Directors’ budgets, rather 

than the National Office’s budget. We continue to strongly encourage resolution of complaints with merit as early in 

the process as possible . 

Program Evaluations: None. 

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

availability of information to all employees. 

 FY 2001 Annual Performance Report January 2002 

24 

Key Performance Goal and Indicators FY 1999 

ACTUAL

FY 2000 

ACTUAL

FY 2001 

TARGET

FY 2001 

ACTUAL

Enhance and build information systems 

which support the mission area’s programs. 

Fully support the utility programs. 40% of 

requirements 

operational. 

45% of 

requirements 

operational. 

65% of 

requirements 

operational. 

N/A 

Implement the new Guaranteed Loan 

System (GLS). 

Phase I 

implemented. 

Phase II, III. & 

IV completed. 

Phase V, Funds 

Reservation 

system, 

completed. 

Legacy GLAS 

System

retired. 

Electronic 

Data 

GLAS 

System

retired. 

Electronic 

Data Interchange im-
 Rural Development U.S. Department of Agriculture 

 

 

Interchange 

implemented. 

plemented. 

Develop Program Funding Control 

System (PFCS) 

Cost analysis 

and functional 

requirements 

developed. 

Evaluation of 

commercial 0ffthe-shelf 

systems 

completed. 

Request for 

proposal 

completed. 

Select and 

install 

commercial 

software and 

begin 

developing 

unique 

capabilities. 

Deferred 

FY 2001 

targets to 

FY 2002. 

Implement the provisions of the E-File 

legislation. 

N/A Completed 

required GPEA 

and freedom to 

E-File plans to 

achieve 

compliance. 

Implement 

web farm. 

Convert 

existing forms 

to webenabled 

access. 

Implemented web 

farm. Converted 

existing 

forms to 

web 

enabled 

format 

2001 Data: Actual performance is based on measurable project accomplishments as established and monitored by 

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

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

Analysis of Results: The performance goal was met with achievement of the targets for the GLS, Electronic Data 

Interchange and, E-file targets. The fist indicator was not reported on because the former project is now defunct. 

This work was transferred to a new project effort and a new contract has been awarded. This indicator will be 

redefined and identified as the “Implementation of the Rural Utilities Loan Servicing System”. 

 

Description of Actions and Schedules: A new performance indicator for the effort previously included as the 

“Fully support the utility programs” will be redefined as the “Implement the Rural Utilities Loan (RULSS)”. New 

schedules and new targets will be established. 

Current Fiscal Year Performance: Targets related to the continuing development of GLS, PFCS, and RULSS be 

included in the Annual Performance Plan for 2002. 

Program Evaluations: None. 

Objective 5.3: Improve financial management to ensure fiscal accountability. 

Key Performance Goals and 

Indicators

FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGET 

FY2001 

ACTUAL 

 FY 2001 Annual Performance Report January 2002 

25 
 Rural Development U.S. Department of Agriculture 

 

 

Manage the Mission Area’s Financial 

Resources Efficiently and Effectively 

Percent of disbursements made 

electronically. 

32% 53% 60% 58% 

Credit Reform - % of programs 

with clean opinion form OIG 

0% 16% 100% Subject to 

OIG approval 

Reach management decision on 

OIG financial management audit 

recommendations within 6 months 

of audit report issuance 

90% 90% 90% 77% 

Percent of material FMFIA 

deficiencies corrected timely 

N/A 75% 50% 50% 

Receive an unqualified opinion on 

RD’s financial statement. 

Qualified 

opinion 

received. 

Qualified opinion 

received. 

Clean opinion 

received. 

Subject to 

OIG approval 

2001 Data: The data comes from the systems and files of the Chief Financial Officer and is final. The percentage of 

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

disbursements made during FY 2001. For FY 2000, the percent of programs reported with a clean opinion from

OIG is related to the guaranteed loan portfolio. Based on Rural Development’s FY 1999 financial statements, 

guaranteed loans represent approximately 16% of the dollar value of Rural Development loan portfolio. The results 

of the FY 2001 indicators related to 100 percent of the Credit Reform programs having a clean opinion are pending 

final testing of the Credit Reform model that calculates subsidy for the direct single and multi family housing 

programs, and OIG's approval of the of the model. 

Analysis of Results: Success in achieving the goal is mixed. Software has been implemented to disburse funds 

electronically (EFT). Rural Development did not meet the 60 percent target for EFT disbursements. However, it is 

anticipated the percent of EFT disbursements will increase as programs continue to expand the practice of using 

EFT. Additionally, the established target for obtaining a management decision within 6 months on 90 percent of the 

audits was not met for FY 2001. Rural Development succeeded in achieving the 90 percent target for FY’s 1999 and 

2000 and the target will remain at 90 percent for 2002. 

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

FMFIA deficiencies corrected timely.” Rural Development also anticipates meeting the indicators related to Credit 

Reform and receiving a clean opinion on the financial statements. Rural Development is one of a number of 

agencies struggling to develop more reliable Credit Reform models required to calculate subsidy rates. A task force 

consisting of several USDA agencies, The Department CFO, and OIG are jointly working to develop improved cash 

flow models. The development of these improved cash flow models should lead to an unqualified audit opinion. 

 FY 2001 Annual Performance Report January 2002 

26 
 Rural Development U.S. Department of Agriculture 

 

 

Description of Actions and Schedules: OIG lifted the credit reform qualification for guaranteed loans in Rural 

Development’s FY 2000 audited financial statements. Rural Development has completed and OIG has approved, 

two of three models required to calculate subsidy rates. The development of the third model to calculate subsidy 

rates for the direct single and multi family housing programs is being tested and Rural Development is hopeful that 

OIG will accept the model for FY 2001 financial statements. 

Current Fiscal Year Performance: All indicators will be included in the FY 2002 Annual Performance Plan. 

Programs Evaluation: OIG Audit 85401-001-FM, Audit of FY 2000 Rural Development Financial Statement, dated 

February 2001. Rural Development completed a Federal Managers’ Financial Integrity Act (FMFIA) Compliance 

Review of the Automated Multi-housing Accounting System (AMAS) and the Core financial systems. 

 

Objective 5.4: Improve procurement process and effectiveness. 

Key Performance Goals and 

Indicators

FY 1999 

ACTUAL 

FY 2000 

ACTUAL 

FY 2001 

TARGET 

FY2001 

ACTUAL 

Improve procurement process and 

effectiveness. 

Increase use of performance 

based contracts. N/A N/A 

5% of SOW’s contain 

performance standards 

and Government 

Quality Assurance 

Plans. 

14% of new 

contracts were 

performance 

based. 

Expand on-line procurement. N/A N/A Post all solicitation 

synopses into 

www.FedBizOpps

.gov

80% of solicitations 

available for 

download by 

contractors. 

78% were 

posted to 

FedBizOpps 

2001 Data: Data for the Procurement Based Service Contract (PBSC) indicator is reviewed from procurement 

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

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

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

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

Procurement Management Division deems the information reliable. 

Analysis of Results: Overall, Rural Development, Procurement Management Division believes that the 

performance-based service contract goals have been met. The PBSC is a new initiative for the technical/program

 FY 2001 Annual Performance Report January 2002 

27 
 Rural Development U.S. Department of Agriculture 

 

 

 FY 2001 Annual Performance Report January 2002 

28 

personnel and the Procurement Management Division attempted to exceed the goal by increasing the performancebased actions for contract that were greater than or equal to $100,000. Although the FedBizOpps indicator was 

missed by 2%, Rural Development, Procurement Management Division believes that we were still successful. 

Posting of actions of $25,000 or more to FedBizOpps was implemented in April and the contraction personnel were 

not trained before this date on this new system. There were synopses actions posted to DBDnet prior to April’s 

implementation of FedBizOpps by Rural Development. 

Description of Actions and Schedules: On October 1, 2001, regulation mandated that all agencies post 

synopses/contractual actions of $25,000 or more to FedBizOpps as the single point of entry for public access. 

Current Fiscal Year Performance: Rural Development, Procurement Management Division encourages the 

technical/program personnel to take the performance-based course and to tailor the statement of work for new 

requirements to performance-based contracting where applicable. Since regulation requires agencies to use 

FedBizOpps, we expect to meet the FedBizOpps goal for synopsizing proposal/contractual actions, where 

applicable. 

Program Evaluations: There are no program evaluations.