Office of

 Inspector General

FY 2004 ANNUAL PLAN 

 October 1, 2003 - September 30, 2004

FOREWORD 

This is the Department of Agriculture’s (USDA) Office of Inspector General’s (OIG) Annual Plan for 

fiscal year (FY) 2004. This plan describes our strategies for conducting audits, investigations, and 

evaluations to provide our Department’s managers with information they can use to improve the 

programs and operations they administer and to investigate criminal activity in Department programs. 

We noted in our Annual Plans for FY 2002 and 2003 that the terrorist attacks on September 11, 2001, 

caused us to readjust our priorities, and continued threats further emphasize the need. We continue to 

focus our priorities on those issues to help ensure a safe food supply, identify vulnerabilities to avert 

accidental or intentional harm to agriculture and the food supply, and help ensure that USDA’s 

information technology systems and resources are secure. 

Our priorities for FY 2004 coincide with the initiatives of the President’s Management Agenda and the 

Department’s strategic 5-year plan. Some of these areas include: (1) evaluating the effectiveness of 

the Food Safety and Inspection Service’s information systems in scheduling inspection activities and 

product testing and in timely alerting managers to plants in need of additional attention; (2) evaluating 

the Animal and Plant Health Inspection Service’s implementation of regulations governing the 

possession, use, and transfer of biological agents and toxins; (3) assessing the Forest Service’s 

implementation of the National Fire Plan; (4) determining the extent of errors in the Risk Management 

Agency’s payment of indemnities; (5) reviewing the Rural Housing Service’s loan servicing of single 

family housing loans, including its automated system to support this function; and (6) determining 

whether the Department has designated appropriate oversight and controls to prevent the inadvertent 

commingling of genetically engineered crops with those that are not. We will continue our reviews 

and proactive approaches to homeland security issues to identify and protect USDA assets and enhance 

the safety of American agriculture, and continue our reviews of the Department’s implementation and 

administration of programs provided by the Farm Security and Rural Investment Act of 2003. Our 

investigative resources will continue to be directed to issues affecting food and consumer protection; 

threats to the health and safety of the public; threats against USDA employees; criminal misconduct by 

USDA employees; and other criminal activities in USDA programs. 

Our resources are also earmarked for continuing mandates for Inspectors General. We are required by 

the Federal Information Security Management Act (formerly known as the Government Information 

Security Reform Act) to perform annual reviews of the Department’s information security procedures. 

We will determine what actions agencies have taken to comply with requirements of the Improper 

Payments Information Act of 2002. Reviews of two agencies – the Agricultural Research Service and 

the Forest Service – will be conducted to determine if they are in conformance with the Government 

Performance and Results Act. We will also continue to perform audits or provide oversight of certified 

public accounting firms conducting audits of the Department’s and related agencies financial 

statements. Recently enacted legislation requires USDA’s OIG to perform independent investigations 

of any Forest Service firefighter whose death is caused by wildfire entrapment or burnover. In 

addition, we also set aside time to handle those unexpected, critical issues that invariably arise during 

the course of a year. These could include identifying the cause of food-borne illnesses, reviewing 

disaster-related situations that might be vulnerable to abuse and fraud, and acting on requests received 

from members of Congress and USDA agencies. 
In FY 2002, we conducted a complete review of OIG’s operations with the goal of re-engineering our 

business practices to take full advantage of state-of-the-art technologies in our audit and investigative 

activities, streamline operations, and increase office efficiencies. In 2003 we began implementing our 

re-engineering efforts. We are also developing our strategic planning initiatives for fiscal years 2004 

through 2009 which are denoted on page 11. We plan to continue and enhance our efforts this fiscal 

year so we may provide more proactive assistance to USDA agencies as they carry out new and 

existing Federal programs and so we may more efficiently investigate and assist in the prosecution of 

criminal activity in USDA programs. 

As always, we encourage agency management to provide input into our planning process and have 

integrated their suggestions in our FY 2004 plan. 

/SIGNED/ 

Phyllis K. Fong 

Inspector General
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TABLE OF CONTENTS 

MANAGEMENT CHALLENGES .................................................................................................1 

THE OIG MISSION ........................................................................................................................9 

AUDIT AND INVESTIGATIVE UNIVERSE .............................................................................10 

BUSINESS PROCESS RE-ENGINEERING................................................................................10 

STRATEGIC PLANNING ............................................................................................................11 

USDA ORGANIZATIONAL CHART .........................................................................................14 

OIG ORGANIZATIONAL CHART .............................................................................................15 

DISTRIBUTION OF OIG RESOURCES 

 BY UNDER AND ASSISTANT SECRETARIES..........................................................................16 

 PERCENTAGE BY AGENCY.........................................................................................................17 

INVESTIGATIONS ......................................................................................................................18 

 INVESTIGATIVE PLANNING.......................................................................................................18 

 THE INVESTIGATIVE PROCESS.................................................................................................19 

 HOTLINE ...........................................................................................................................................20 

 SPECIAL REPORTING OF BRIBES OR GRATUITIES .............................................................22 

 OIG INVESTIGATIONS EMERGENCY CONTACTS................................................................22 

DISTRIBUTION OF INVESTIGATIVE RESOURCES 

 BY UNDER AND ASSISTANT SECRETARIES..........................................................................24 

 PERCENTAGE BY AGENCY.........................................................................................................25 

AUDIT ...........................................................................................................................................26 

 AUDIT PLANNING..........................................................................................................................27 

 THE AUDIT PROCESS....................................................................................................................28 

DISTRIBUTION OF AUDIT RESOURCES 

 BY UNDER AND ASSISTANT SECRETARIES..........................................................................30 

 PERCENTAGE BY AGENCY.........................................................................................................31 
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APPENDIX I 

OIG STRATEGIES...................................................................................................................................32 

FARM PROGRAMS ................................................................................................................33

MARKET DEVELOPMENT...................................................................................................35 

CIVIL RIGHTS.........................................................................................................................37 

NATURAL RESOURCES CONSERVATION SERVICE ...................................................39 

ENTITLEMENT PROGRAMS ...............................................................................................41 

FOREST SERVICE ..................................................................................................................43 

RESEARCH AND TECHNOLOGY TRANSFER ................................................................45 

INTEGRITY OF USDA PERSONNEL ..................................................................................47 

HOMELAND SECURITY.......................................................................................................48 

PROTECTING U.S. FOOD SUPPLY AND AGRICULTURE ............................................51 

RISK MANAGEMENT............................................................................................................54 

GOVERNMENT PERFORMANCE AND RESULTS ACT.................................................56 

ACCOUNTING AND FINANCIAL MANAGEMENT........................................................59 

INFORMATION TECHNOLOGY/SECURITY....................................................................61 

RURAL DEVELOPMENT ......................................................................................................64 

MANAGEMENT/CONTROL OF ENVIRONMENTAL HAZARDS.................................68 

PROGRAM COMPLIANCE, ECONOMY, AND EFFICIENCY........................................70 

APPENDIX II 

MAJOR AUDITS PLANNED FOR FISCAL YEAR 2004...................................................................71 

APPENDIX III 

FISCAL YEAR 2004 AUDITS PLANNED ...........................................................................................85 
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ACRONYMS/ABBREVIATIONS USED IN THE FY 2004 ANNUAL PLAN 

2002 FSRIA Farm Security and Rural Investment Act of 2002 (new Farm Bill) 

2003 AAA Agricultural Assistance Act of 2003 

AICPA American Institute of Certified Public Accountants 

AMS Agricultural Marketing Service 

APHIS Animal and Plant Health Inspection Service 

ARPA Agricultural Risk Protection Act 

ARS Agricultural Research Service 

B&I Business and Industry 

BPI budget and performance integration 

BPR business process re-engineering 

CCC Commodity Credit Corporation 

CFO Act Chief Financial Officers Act of 1990 

CFR Code of Federal Regulations 

CFU Computer Forensics Unit 

CIO Chief Information Officer 

CNP Child Nutrition Program 

CPA certified public account / certified public accounting 

CRP Conservation Reserve Program 

CSC Centralized Servicing Center 

CSREES Cooperative State Research, Education, and Extension Service 

DEIP Dairy Export Incentive Program 

DHS U.S. Department of Homeland Security 

E&T Employment and Training Program 

EBT electronic benefits transfer 

EEP Export Enhancement Program 

EQIP Environmental Quality Incentives Program 

ERS Economic Research Service 

FAS Foreign Agricultural Service 

FCIC Federal Crop Insurance Corporation 

FISMA Federal Information Security Management Act 

FLETC Federal Law Enforcement Training Center 

FNS Food and Nutrition Service 

FS Forest Service 

FSA Farm Service Agency 

FSIS Food Safety and Inspection Service 
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FSP Food Stamp Program 

FY fiscal year 

GAAP generally accepted accounting principles 

GAO U.S. General Accounting Office 

GIPSA Grain Inspection, Packers and Stockyards Administration 

GPRA Government Performance and Results Act 

HACCP Hazard Analysis and Critical Control Points 

IT information technology 

MFH Multi-Family Housing 

NAL National Agricultural Library 

NASS National Agricultural Statistics Service 

NFC National Finance Center 

NFP National Fire Plan 

NITC National Information Technology Center 

NRCS Natural Resources Conservation Service 

NSLP National School Lunch Program 

OCFO Office of the Chief Financial Officer 

OIG Office of Inspector General 

OMB Office of Management and Budget 

PCIE President’s Council on Integrity and Efficiency 

PMA President’s Management Agenda 

PVO Private Voluntary Organizations 

RBS Rural Business-Cooperative Service 

RD Rural Development 

RHS Rural Housing Service 

RMA Risk Management Agency 

RRH Rural Rental Housing 

RTB Rural Telephone Bank 

RUS Rural Utilities Service 

SFA school food authority 

SRA Standard Reinsurance Agreement 

SSN Social Security numbers 

TSP technical service providers 

USDA U.S. Department of Agriculture 

WIC Special Supplemental Nutrition Program for Women, Infants and Children 

WRP Wetlands Reserve Program 
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MANAGEMENT CHALLENGES 

The Reports Consolidation Act of 2000 requires USDA’s OIG to identify and report annually the 

most serious management challenges the Department and its agencies face. To identify these 

management challenges, we (1) examined previously issued audit reports where corrective 

actions have not been implemented, (2) assessed ongoing audit and investigative work to identify 

issues where significant vulnerabilities have been identified, and (3) analyzed new programs and 

activities, which could pose significant challenges due to their breadth and complexity. We 

discussed these challenges with USDA officials to obtain their input. 

This year, we have summarized USDA’s most serious management challenges by issue area, 

rather than by mission. USDA’s major management challenges frequently cross organizational 

lines within the Department and should be dealt with on a coordinated basis. The management 

challenges OIG identified last year fall under one or more of the general issue areas we have 

identified this year. While progress has been made in each challenge facing USDA, more can be 

done to strengthen management controls, ensure USDA benefits go to those intended, and 

protect the integrity of USDA’s programs and activities. Also, we have identified three new 

emerging issues that either mandate new requirements or that have not been effectively dealt 

with on a Departmentwide coordinated basis. OIG has identified 10 Departmentwide and 

2 agency-specific challenges we believe are the most significant management issues facing 

USDA. These challenges are described below. 

While the Department has begun actions to address these challenges, OIG audits and 

investigations have shown that additional actions are necessary. We look forward to working 

with the Department to evaluate actions taken to address these weaknesses and will make 

recommendations, where necessary, for further improvements. 

DEPARTMENTWIDE CHALLENGES 

1. HOMELAND SECURITY CONSIDERATIONS SHOULD BE INCORPORATED 

INTO PROGRAM DESIGN AND IMPLEMENTATION 

The events of September 11, 2001, and subsequent heightened concern about potential terrorist 

attacks and threats have added a new dimension to the Department’s missions and priorities. At 

issue are USDA’s missions to ensure the safety and abundance of the Nation’s food supply, from 

the farm to the table, and to protect the health of American agriculture from the introduction of 

foreign animal and plant pests and diseases. USDA must now readily identify its assets, perform 

security risk assessments, and design and implement appropriate safeguards to prevent or deter 

deliberate acts to contaminate the food supply, disrupt or destroy American agriculture, or harm 

U.S. citizens. At the same time, USDA and the U.S. Department of Homeland Security (DHS) 

must also ensure that the current inspection and safeguard processes for the unintentional 

introduction of pests, diseases, and contaminants on imported products is not overlooked. While 

the Department has been both proactive and responsive to specific vulnerabilities identified by 
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OIG, it is still challenged in its efforts to: shift from a focus on safety goals to both safety and 

security in each of its mission areas; foster effective coordination and communication across 

jurisdictional lines to better define roles and responsibilities; and increase Departmental 

oversight of, and accountability by, USDA agencies. 

The Department, in response to our audit recommendations, has taken significant steps to 

incorporate these approaches in restructuring some of its mission activities. However, more 

needs to be done to provide assurance that established policies and procedures are consistently 

implemented and that effective inter- and intra-agency coordination and communication 

continues. 

This year, there was a significant transfer of responsibilities and personnel from USDA to DHS. 

A major challenge now faced by USDA is timely and effective coordination and communication, 

not only within USDA, but also with DHS. Prior audits disclosed material weaknesses within 

USDA when certain functions were solely the responsibility of USDA. Therefore, it is 

imperative that USDA continues to work with DHS to design the appropriate control systems 

and processes to ensure timely communication and coordination. 

2. INCREASED OVERSIGHT AND MONITORING OF FOOD SAFETY 

INSPECTION SYSTEMS ARE NEEDED TO MEET HACCP’S GOALS 

In 1998, the Department, through the Food Safety and Inspection Service (FSIS), implemented a 

major change to its food safety system and created a new regulatory system for meat and poultry 

safety within the meat and poultry plants it regulates. The Pathogen Reduction and Hazard 

Analysis and Critical Control Point (HACCP) rule is the centerpiece of the new regulatory 

approach because it mandates HACCP, sets certain food safety performance standards, 

establishes testing programs to ensure those standards are met, and assigns new tasks to 

inspectors to enable them to ensure regulatory performance standards are met. In 2000, OIG 

reported on FSIS’ implementation of HACCP, concluding that while FSIS had taken positive 

steps in its implementation of the science-based HACCP system, HACCP plans were not always 

complete; FSIS needed to place greater emphasis on pathogen testing; and it needed to define its 

oversight role in the HACCP system, and hold plants accountable for noncompliance. During 

2002, USDA experienced some of the largest recalls in its history. OIG’s reviews of two of 

these recalls in the past year indicate that FSIS still faces significant challenges to ensure the 

successful implementation of HACCP. Most critical to this process are: FSIS’ assessment of 

plant HACCP plans and resolution of any deficiencies; establishment of management controls to 

accumulate and analyze data to monitor and assess the adequacy of food safety systems; 

establishment of criteria to initiate enforcement actions; baseline studies to define the goals, 

objectives, and performance measurements for pathogen testing programs; and better supervision 

and oversight of field inspection processes. Also, FSIS must reassess its recall process, 

including traceback policies, to identify the product source, and improve monitoring to ensure 

timely notification of the recall and maximum recovery of the product. While FSIS has 

generally been responsive to these issues and has made some changes to its inspection policies 
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and procedures, complete corrective actions and estimated timeframes for addressing these 

weaknesses are not yet known. 

An additional challenge for FSIS is to complete its proposed actions in response to OIG’s prior 

audit of the imported meat and inspection process. OIG’s followup review reinforced the need 

for FSIS to complete an in-depth assessment of its organizational structure and establish a system 

of control objectives and processes to ensure the goals of the import inspection process are 

achieved. 

3. RISK MUST BE EXAMINED AND IMPROPER PAYMENTS MINIMIZED 

WITHIN USDA – Emerging Issue

USDA faces a new management challenge with the implementation of the Improper Payments 

Information Act of 2002 (Public Law 107-300). The Act requires each Federal agency head to: 

(1) review all programs and activities and identify those which are susceptible to significant 

improper payments; (2) statistically estimate the annual amount of improper payments; 

(3) implement a plan to reduce improper payments; and (4) annually report the estimates and 

progress made in reducing improper payments. Compliance with this Act will require sustained 

intensive effort and commitment by the Department. Successful implementation will require a 

strong internal control structure, to include management commitment and the necessary 

resources, quality control processes, and information systems to measure the extent of erroneous 

payments. The ultimate challenge will be to design internal control systems to detect and 

prevent improper payments before “they go out the door.” The challenges we reported last year 

relating to ineligible payments in the food assistance programs, as well as in the crop insurance 

program (lack of an effective quality control process over reinsurance companies in the 

determination of indemnities for losses), should be corrected when the requirements of this Act 

are fully implemented and measures have been taken to reduce improper payments to an 

acceptable level. 

4. FINANCIAL MANAGEMENT – IMPROVEMENTS MADE BUT ADDITIONAL 

ACTIONS STILL NEEDED

In FY 2002 financial statements, USDA reported assets of over $123 billion and program costs 

of over $72 billion. Actions taken by the USDA Office of the Chief Financial Officer (OCFO) 

and the agencies’ financial management staff resulted in the Department achieving its first 

unqualified audit opinion on the FY 2002 Consolidated Financial Statements. While the 

achievement of an unqualified opinion represents a major accomplishment, USDA needs to 

continue to improve its underlying financial management systems, with less reliance on 

extensive ad hoc efforts to produce timely financial data. Also, USDA should continue to 

review its legacy systems, and consolidate and update the systems, as appropriate, to meet 

present accounting standards and management needs. This is especially critical in light of the 

accelerated timeframes for producing audited financial statements, as well as for directing 

limited resources to other critical needs. OCFO has initiatives underway to (1) renovate the 

Department’s corporate administrative systems, (2) establish and implement cost accounting 
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principles and methodologies, (3) improve the process for accounting for real and personal 

property, and (4) enhance overall financial management accountability and control. These are 

significant actions that demonstrate USDA’s recognition of the challenge it faces. 

5. INFORMATION TECHNOLOGY SECURITY – MUCH ACCOMPLISHED, 

MORE NEEDED

USDA depends on information technology (IT) to efficiently and effectively deliver its programs 

and provide meaningful and reliable financial reporting. One of the more significant dangers 

USDA faces is a cyber attack on its IT infrastructure, whether by terrorists seeking to destroy 

unique databases or criminals seeking economic gains. While the Department and its agencies 

continue to strive to improve the security over IT resources, significant progress is still needed 

toward establishing an effective security program. Specifically, increased management 

involvement and commitment at the agency level is needed to effectively implement a strong IT 

security program. Despite the efforts of OIG and the Office of the Chief Information Officer 

during the past several years to heighten awareness of security issues, our reviews in 10 agencies 

during this year continue to show that the Department and its agencies are not yet in compliance 

with Office of Management and Budget (OMB) Circular A-130, Appendix III. This 

noncompliance includes preparing security plans for all major applications, conducting risk 

assessments, establishing disaster recovery plans, and implementing a system certification/ 

authorization process. We also continue to find that agencies do not have strong physical and 

logical access controls over IT resources and have not yet effectively used the vulnerability 

scanning tools provided by the Department to identify and mitigate known security 

vulnerabilities in their systems. 

 

6. CONTROLS OVER GERMPLASM STORAGE MATERIAL AND 

GENETICALLY ENGINEERED ORGANISM FIELD TESTING ARE CRITICAL 

TO U.S. MARKETS – Emerging Issue

The use of biotechnology-derived or genetically engineered crops has grown significantly over 

the past decade, particularly in the United States. In 2001, approximately 88 million acres of 

such crops were planted in the United States. For the 2003 crop year, as much as 80 percent of 

the planned 73.2 million acres for soybeans and approximately 38 percent of the planned 

79 million acres for corn were planted with genetically engineered seeds. These two crops 

constitute a major portion of American exports of agricultural production. The acceptance of 

genetically engineered crops in the world market, however, is mixed. The loss of these major 

export markets could seriously impact the American agricultural economy. Critics have 

questioned the effect of long-term consumption of such genetically engineered crops on the 

health of humans and livestock, but so far, the evidence to support such a determination is still 

pending. Countering such criticisms are the benefits of such genetically engineered crops: 

boosting yields; lowering costs; reducing pesticide use; and making crops more resistant to 

disease, pests, and drought. 
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USDA plays a major role in regulating and monitoring genetically engineered crops – from the 

storing of germplasm used to produce seeds for such crops, to approving field testing of 

genetically engineered crops, to providing assistance for export of American agricultural 

production. The Department must balance the goals of: (1) maintaining adequate accountability 

and integrity of genetically engineered versus non-genetically engineered seeds and crops; 

(2) ensuring the health and safety of the American food supply; and (3) maintaining the export 

levels of American agricultural production against the added costs to implement such controls 

and the uncertainty of the effects of genetically engineered crops. In our recent review of the 

Department’s germplasm storage system, we found the need for increased accountability and 

tracking controls over genetically engineered germplasm if USDA is to provide assurance to 

other markets. USDA must also address public concerns that field-testing applications have been 

properly reviewed, field testing is adequately monitored, and proper surveillance is in place to 

preclude such crops from entering the human food process. 

7. CIVIL RIGHTS COMPLAINTS PROCESSING STILL A CONCERN AT USDA

In March 2000, OIG reported that minimal progress had been made in overcoming inefficiencies 

in processing civil rights program and employment complaints. Deficiencies disclosed in OIG’s 

five prior audit reports had not been corrected. The March 2000 report noted that the Office of 

Civil Rights (CR) did not reengineer its complaint resolution process, its database and file room 

remained poorly managed, and a large backlog of cases was stalled in the “intend-to-file” 

category and/or may not have received due care. To correct these long-standing problems, OIG 

recommended that CR implement a management plan that would address effective leadership, 

change the organizational culture, focus on customers, and reengineer its processes. Until that 

plan is fully implemented, resolving civil rights complaints will remain a management challenge 

for USDA. In September 2002, the General Accounting Office reported that the processing of 

program complaints continued to exceed required timeframes. The Department has 

demonstrated the importance it places on civil rights when the first Assistant Secretary for Civil 

Rights was sworn into office on April 1, 2003. OIG will continue to work with the Department 

to strengthen the operations of the civil rights program. 

8. RESEARCH MISCONDUCT POLICY NOT CONSISTENTLY 

IMPLEMENTED – Emerging Issue 

USDA plays a major role in U.S. agricultural research activities, providing well over $1 billion 

annually for research to increase American agriculture production and to protect and treat 

American agricultural crops against foreign plants and animal pests and diseases. Research 

integrity is critical to the mission of USDA. In December 2000, the President’s Office of 

Science and Technology Policy issued a Federal policy to establish uniformity among Federal 

agency definitions and treatment of research misconduct. USDA, however, has not implemented 

a coordinated Departmentwide policy or procedures for the treatment of research misconduct; 

responsibility for implementing the Federal policy was delegated to each agency within USDA. 

In an ongoing OIG review, we found that most USDA agencies have not implemented any 

research misconduct policies and procedures. In those agencies that had implemented a policy, 
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procedures were inconsistent and relied primarily on in-house resources to review allegations of 

research misconduct. In the absence of consistent policies, USDA has no assurance that 

potential research misconduct involving USDA funds is being timely referred, independently 

adjudicated, and appropriately resolved, including determining whether criminal investigation is 

warranted. 

9. USDA FACES MAJOR CHALLENGES IN IMPLEMENTING THE 2002 FARM 

BILL AND DISASTER ASSISTANCE LEGISLATION

The multi-billion dollar Farm Bill, the Farm Security and Rural Investment Act of 2002 (Act), 

enacted new or reauthorized existing farm income, commodity support, and conservation 

programs for crop years 2002 through 2007. This Act made significant changes in the support of 

production agriculture. Efficient and effective performance and management of these programs 

are critical to the missions of the Farm Service Agency (FSA) and the Department and 

necessitated by the magnitude of funding for the programs (program outlays for the Commodity 

and Conservation provisions are estimated to be about $63 billion over the duration of the Act). 

For example, new Direct and Counter-Cyclical Program payments through 2007 are based on 

one-time base and yield options that producers selected by April 1, 2003. If errors and 

irregularities in the bases and yields are not prevented or timely detected, resultant improper 

payments may be perpetuated throughout the 6-year life of the program. 

The Agricultural Assistance Act of 2003 provided $3.1 billion for qualifying 2001 or 2002 

disaster losses of crops, livestock, and grazing in addition to the “regular” farm program 

assistance under the Farm Bill. Such ad hoc disaster assistance programs are particularly 

susceptible to fraud, waste, or abuse in that they are not implemented timely to coincide with the 

physical evidence of loss and greater reliance must be placed on producers’ self-certifications of 

qualifying damage or loss. Prior audits of similar ad hoc disaster assistance programs have 

identified ongoing concerns with payments to ineligible recipients or for ineligible or overstated 

losses. 

USDA’s challenge is to effectively work across organizational lines to ensure that data is shared, 

discrepancies are resolved in automated systems, and problems found in internal reviews and 

audits are coordinated and analyzed for their impact on program payments in each affected 

agency. 

10. INTEGRITY OF THE FEDERAL CROP INSURANCE PROGRAMS 

POLICYHOLDERS’ DATABASE MUST BE STRENGTHENED

The Federal crop insurance programs, administered by the Federal Crop Insurance Corporation 

(FCIC) in conjunction with the Risk Management Agency (RMA), have become the American 

producers’ primary “safety net.” Over the years, as Congress mandated changes to the programs, 

the Federal crop insurance programs have grown significantly, particularly after the passage of 

the Agricultural Risk Protection Act of 2000 (ARPA). Under ARPA, Congress encouraged 

participation by American producers by increasing the level of subsidized premiums. By crop 
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year 2002, crop insurance coverage increased to 216 million acres with a total Government 

insurance liability of over $37 billion. However, indemnity payments and subsidy 

reimbursements have also increased: for the 2000 crop year, indemnity payments totaled 

approximately $4 billion, while the Government’s subsidized share of the insurance premium 

totaled approximately $1.7 billion. At the same time, RMA has not been able to determine the 

level of improper or erroneous payments under its programs. To ensure the integrity of its 

program payments, RMA must continue to improve and strengthen its policyholders’ database 

by effectively implementing all of the provisions under ARPA, and improving its Data 

Acceptance System (DAS). ARPA mandated that additional methods of ensuring Federal crop 

insurance program compliance integrity be developed and implemented, including a plan for 

FSA to assist RMA in the ongoing monitoring of crop insurance programs. RMA has not yet 

fully implemented the required data reconciliation between FSA records and RMA records. Data 

mining was also stipulated under ARPA; RMA has acknowledged that data mining has provided 

constructive feedback to the agency. RMA’s DAS is intended to perform as a series of edits on 

information submitted by the insurance companies before it is incorporated into RMA’s 

electronic Policyholder Database. Audit results, however, have shown that the information 

contained in the system and used to drive RMA’s accounting system may not be reliable and/or 

compliant with OMB core and Federal financial system requirements. 

AGENCY-SPECIFIC CHALLENGES 

11. STRONG INTERNAL CONTROL STRUCTURE IS CRITICAL TO THE 

DELIVERY OF FOREST SERVICE PROGRAMS 

The Forest Service (FS) needs to continue to improve its system of internal controls to ensure the 

agency is accountable for the efficient and effective delivery of its programs. The decentralized 

organizational structure of the FS makes it imperative that a well-defined system of controls be 

in place and effectively operating. For example, a strong internal control structure is essential to 

FS’s challenge of implementing the National Fire Plan to deal with recent catastrophic fires. Our 

initial work found that controls were not adequate to ensure that funds were spent as intended 

and budget estimates provided by the agency for the implementation of the fire plan accurately 

reflected its needs. These issues are consistent with the control weaknesses found in other 

programs administered by FS, such as grant award and administration, timber environmental 

analyses, and the agency’s implementation of the Government Performance and Results Act. 

FS has begun actions to resolve individual issues; however, a comprehensive evaluation of its 

systems of internal controls has not been completed. These weaknesses have impeded FS’ 

ability to effectively prioritize its work and fund those projects most essential to its mission. 

12. IMPROVEMENTS AND SAFEGUARDS NEEDED FOR RURAL MULTIFAMILY HOUSING PROGRAM

A substantial portion of the Rural Housing Service’s (RHS) current Rural Rental Housing (RRH) 

loan portfolio involves properties over 20 years old. RHS faces a major challenge to maintain its 

portfolio in good repair so that it will continue to provide safe, decent, and affordable housing for 
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low to moderate income rural residents. RHS needs to address several challenges in its 

management of the Multi-Family Housing (MFH) program. RHS needs to: inspect and repair its 

aging portfolio; accurately report to Congress the units built in its guaranteed MFH program; 

plan for future increases in rental assistance costs; implement wage matching to identify 

excessive rental assistance costs; fairly use equity incentives to keep RRH projects in the 

program; and continue to implement regulatory and other internal controls to address 

deficiencies that have been identified in the program. 
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THE OIG MISSION 

OIG was legislatively established in 1978 with the enactment of the Inspector General Act 

(Public Law 95-452). The act requires the Inspector General to independently and objectively 

• perform audits and investigations of the Department’s programs and operations; 

• work with the Department’s management team in activities that promote economy, 

efficiency, and effectiveness or that prevent and detect fraud and abuse in programs and 

operations, both within USDA and in non-Federal entities that receive USDA assistance; 

and 

• report OIG activities to the Secretary and the U.S. Congress semiannually as of March 31 

and September 30 each year. 

We accomplish this mission by 

• investigating allegations of criminal activity and other wrongdoing; 

• using preventive audit approaches, such as reviews of systems under development; 

• conducting audits of the adequacy and vulnerability of management and program control 

systems; and 

• auditing the adequacy of large USDA payments, such as insurance and deficiency 

payments, major loans, and reimbursements for school breakfasts and lunches. 

OIG is headquartered in Washington, D.C., and has regional offices located in Atlanta, Georgia; 

Beltsville, Maryland; Chicago, Illinois; Kansas City, Missouri; San Francisco, California; and 

Temple, Texas. Our Financial and Information Technology Operations regional office is also 

located in Kansas City, Missouri, as is our Computer Forensics Unit. 

We emphasize service to management at all levels of the Department by briefing senior 

Department officials on major audits and investigations. We also work with agency managers, 

as part of a consolidated team, by directly encouraging management input into the audit and 

investigative process to help resolve difficult problems impacting program management and 

operations. As a member of the President’s Council on Integrity and Efficiency (PCIE), we 

participate with other Inspectors General in multiagency projects where the issues are 

crosscutting and need to be addressed Governmentwide. 
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AUDIT AND INVESTIGATIVE UNIVERSE 

The audit and investigative universe comprises all programs, functions, and organizations, and 

the contractors and grantees for which USDA is responsible. USDA’s FY 2004 proposed budget 

contains a broad agenda of programs to support the Department’s agencies and program 

operations. The annual program level, over $105 billion, represents the value of benefits 

provided to the public by USDA. These benefits may be in the form of financial assistance 

through grants, payments, guaranteed or direct loans, cost-sharing, professional services such as 

research or technical assistance, or in-kind benefits such as commodities. 

USDA programs are delivered in every State, county, and city in the Nation by over 

108,000 Federal and non-Federal government employees. USDA also maintains an international 

field structure, administered by the Foreign Agricultural Service, which includes Agricultural 

Counselors, Attaché and Affiliate Foreign National Offices, Agricultural Trade Offices, and a 

number of agricultural advisors covering several countries around the world. USDA is involved 

in extensive food quality and safety issues, homeland and bio-security concerns relating to 

threats to agriculture, food aid and assistance programs both across the Nation and abroad, 

market development activities, rural development initiatives, environmental and biotechnology 

issues, and a wide range of export promotion programs. 

BUSINESS PROCESS RE-ENGINEERING

In FY 2002, OIG embarked on an agencywide review of our business practices to determine how 

we could achieve greater efficiencies in carrying out our operations and activities. Our goals 

were to streamline our processes and implement more modern business practices through the use 

of state-of-the-art information technology (IT) to free our employees to do more of the work they 

are uniquely qualified to do. 

During FY 2003, OIG continued to implement the recommendations developed as part of our 

agencywide review of business practices. While the initial stages of our Business Process 

Re-engineering (BPR) review are complete, we are currently making the changes needed to 

improve efficiencies in our operations. Our detailed, 3-year strategic plan to equip our 

employees with state-of-the-art technologies and train them in the use of these new automated 

tools is proving a useful guide to our transformation. 

A number of task forces, composed of representatives from all parts of the agency, are 

addressing recommendations affecting the agency as a whole. During FY 2004, these task forces 

will build on our progress and continue to implement needed changes in information technology, 

OIG’s Web site, recruitment, management development, and a number of other areas. In 

addition, Investigations and Audit will continue to implement and develop recommendations that 

affect only those disciplines. We will also continue to review OIG processes to achieve 

additional efficiencies and economies. 
11

Our IT infrastructure and security changes support and complement the President’s 

e-Government Management Agenda initiative. Consistent with the President’s outsourcing 

initiative, our BPR review has resulted in contracting out certain activities, such as financial 

statement audit work, an IT helpdesk, and other IT support for our regional offices. Many 

Governmentwide studies support our conclusion that it is more effective to contract out certain 

work than to perform it internally. 

We have made substantial progress in bettering our vital human capital resources – another 

critical Presidential Management initiative – by redirecting and realigning them to the tasks most 

critical to the agency and providing them with the latest equipment, technologies, and training 

available to perform these tasks. Finally, the BPR results continue to help us relate our 

performance to OIG’s budget expenditures as required under the Government Performance and 

Results Act. 

STRATEGIC PLANNING 

Our strategic approach to planning and prioritizing audit and investigative activities enables us to 

focus our resources on those programs most vulnerable to criminal activity, or those where the 

largest dollar losses are most likely to occur. In each strategic area, we establish goals and plans 

for both short- and long-term emphasis. We work closely with agency management to identify 

those areas where we could provide assistance in resolving difficult issues. We have committed 

to four strategic business goals in the achievement of the Department’s mission for the upcoming 

year and into FY 2009. 

STRATEGIC BUSINESS GOALS 

Goal 1: Support USDA Management in the 

Identification and Reduction of Vulnerabilities in 

Benefits Programs 

Strategy 1-1. Identify areas of emphasis in USDA 

programs that require the focus of OIG resources to 

address areas of program vulnerability. 

 Strategy 1-2. Develop and increase external 

relationships with USDA and other agencies, 

organizations, and individuals to enhance OIG 

efforts. 

 Strategy 1-3. Implement proactive efforts in USDA 

program design, development and matters of USDA 

vulnerability. 

Goal 2: Support USDA in the Enhancement of 

Safety and Security Measures to Protect 

Agricultural Resources and Related Public Health 

Concerns 

Strategy 2-1. Identify areas of emphasis that require 

the focus of OIG resources to enhance the safety 

and security measures used to protect agricultural 

resources and related public health concerns. 

 Strategy 2-2. Improve and increase external 

relationships with USDA and other agencies, 

organizations, and individuals to enhance OIG 

efforts. 

 Strategy 2-3. Implement proactive efforts in USDA 

program design, development, and matters of 

agricultural resources safety and security. 
12 

STRATEGIC BUSINESS GOALS 

Goal 3. Maximize USDA Effectiveness Through 

Increasing the Efficiency With Which USDA 

Manages and Employs Public Assets and Resources 

Strategy 3-1. Identify areas of emphasis in USDA 

programs that require the focus of OIG resources to 

increase effectiveness and efficiency in the 

management of USDA’s public assets and 

resources. 

 Strategy 3-2. Improve and increase external 

relationships with USDA and other agencies, 

organizations, and individuals to enhance OIG 

efforts. 

 Strategy 3-3. Implement proactive efforts in USDA 

program, design, development, and matters of 

USDA management information and financial 

reporting systems. 

Goal 4. Ensure OIG Readiness to Achieve Its 

Strategic Business Goals. 

Strategy 4-1. Develop and maintain a workforce 

with the skills and abilities to meet current and 

future challenges. 

Strategy 4.2. Acquire and deploy state of the art 

technology and equipment. 

Strategy 4.3. Develop a culture that is excellence 

based. 

Strategy 4.4. Structure the OIG organization for 

maximum efficiency. 

In addition, we took into consideration the goals and objectives of the FY 2002 President’s 

Management Agenda (PMA) and the Department’s 5-year Strategic Plan for 2002 through 2007 

(dated September 2002) in formulating our annual strategies. We strive to connect the audits 

planned for the upcoming fiscal year to the goals and objectives reflected in these two critical 

documents as well as in OIG’s Strategic Plan for FY 2004-2009. Following is a matrix of OIG’s 

strategic areas that reflect the initiatives and objectives noted in both the PMA and in USDA’s 

2002-2007 Strategic Plan. 

Descriptions of our strategies and examples of planned audit and investigative work within the 

strategies are described in more detail in appendix I. A description of major audits and a 

complete list of all audits planned can be found in appendices II and III. 
13

USDA’s 5-year Strategic Plan for FY 2002-2007 OIG’s Annual Strategies 

Goal 1: Enhance Economic Opportunities for Agricultural 

Producers 

Objective 1.1: Expand International Marketing Opportunities Market Development 

Objective 1.2: Support International Economic Development 

and Trade Capacity Building 

Market Development 

Research and Technology Transfer 

Objective 1.3: Expand Alternative Markets for Agricultural 

Products and Activities 

Objective 1.4: Provide Risk Management and Financial Tools 

to Farmers and Ranchers 

Risk Management 

Farm Programs 

Goal 2: Support Increased Economic Opportunities and 

Improved Quality of Life in Rural America 

Objective 2.1: Expand Economic Opportunities Through 

USDA Financing of Business 

Rural Development 

Research and Technology Transfer 

Objective 2.2: Improve the Quality of Life Through USDA 

Financing of Quality Housing, Modern Utilities, and Needed 

Community Facilities 

Rural Development 

Goal 3: Enhance Protection and Safety of the Nation’s 

Agriculture and Food Supply 

Objective 3.1: Reduce the Incidence of Food-borne Illnesses 

Related to Meat, Poultry, and Egg Products in the U.S. 

Homeland Security 

Protecting U.S. Food Supply and Agriculture 

Research and Technology Transfer 

Objective 3.2: Reduce the Number and Severity of 

Agricultural Pest and Disease Outbreaks 

Goal 4: Improve the Nation’s Nutrition and Health 

Objective 4.1: Improve Access to Nutritious Food Entitlement Programs 

Objective 4.2: Promote Healthier Eating Habits and Lifestyles Research & Technology Transfer 

Objective 4.3: Improve Food Program Management and 

Customer Service 

Goal 5: Protect and Enhance the Nation’s Natural 

Resource Base and Environment 

Objective 5.1: Implement the President’s Healthy Forest 

Initiative and Other Actions to Improve Management of Public 

Lands 

Forest Service 

Natural Resources Conservation Service 

Management and Control of Environmental Hazards 

Objective 5.2: Improve Management of Private Lands Homeland Security 

Management Initiatives/President’s Management Agenda 

Improve Human Capital Management Civil Rights 

Integrity of USDA Personnel 

Government Performance and Results Act 

Improve Financial Management Accounting and Financial Management 

Information Technology/Security 

Expand Electronic Government Information Technology/Security 

Establish Budget and Performance Integration Accounting and Financial Management 

Government Performance and Results Act 
14 

USDA ORGANIZATIONAL CHART 
15

 

 OIG ORGANIZATIONAL CHART

 As of December 2003

 Inspector General Asst. Inspector General

Deputy Inspector General Planning & Special Projects

 202-720-8001 202-720-4979

 Assistant Inspector General Assistant Inspector General Assistant Inspector General

 for Audit for Policy Development for Investigations

 2 Deputy AIG's for Audit & Resources Management 2 Deputy AIG's for Investigations

 202-720-6945 202-720-6979 202-720-3306

Rural Development Program Investigations

& Natural Resources Division

Division 202-720-3306

202-720-6805

Farm and Foreign Investigations

Agricultural Division Northeast Region Operations Division

202-720-2887 (A) 301-504-2100 202-720-3306

(I) 301-504-2000

Food and Marketing Southeast Region Homeland Security

Division (A) 404-730-3210 & Protective Operations

202-720-7805 (I) 404-730-3170 Division

202-720-3306

Midwest Region

Administration and (A) 312-353-1352

Finance Division (I) 312-353-1358

202-720-1918

Southwest Region

(A) 254-743-6565

(I) 254-743-6535

Great Plains Region

(A) 816-926-7666

(I) 816-926-7606 * * Includes Computer Forensics Unit

Western Region

(A) 415-744-2851

(I) 415-744-2887

Financial & Information

Technology Operations

(A) 816-823-3860

 OIG's mission is to conduct audits, investigations, and evaluations of USDA programs 

 and operations to affect positive change.
16 

 FY 2004 ANNUAL PLAN 

DISTRIBUTION OF OIG RESOURCES

BY UNDER AND ASSISTANT SECRETARIES 

OTHER

5.1% FS

5.5%

FNCS

23.7%

FFAS

23.7%

MRP

7.6%

NRE

7.6%

MULTI

15.0%

RD

8.9%

REE

2.9%

LEGEND

NRE Under Secretary, Natural Resources and Environment

FFAS Under Secretary, Farm and Foreign Agricultural Services

RD Under Secretary, Rural Development

FNCS Under Secretary, Food, Nutrition, and Consumer Services

FS Under Secretary, Food Safety 

REE Under Secretary, Research, Education, and Economics

MRP Under Secretary, Marketing and Regulatory Programs 

OTHER Includes Administration, Civil Rights, OCIO, and OCFO
17

DISTRIBUTION OF OFFICE OF INSPECTOR GENERAL RESOURCES 

PERCENTAGE BY AGENCY 

FY 2004 PLANNED 

NATURAL RESOURCES AND Forest Service 6.0

ENVIRONMENT

Natural Resources Conservation Service 1.6

Farm Service Agency 14.4

Foreign Agricultural Service .9

FARM AND FOREIGN 

AGRICULTURAL SERVICES

Risk Management Agency 8.4

Rural Development (financials) 1.1

Rural Utilities Service .6

Rural Housing Service 4.8

RURAL DEVELOPMENT 

Rural Business-Cooperative Service 2.4

FOOD, NUTRITION, AND 

CONSUMER SERVICES

Food and Nutrition Service 23.7

FOOD SAFETY Food Safety and Inspection Service 5.5

Agricultural Marketing Service 1.8

Animal and Plant Health Inspection 

Service 

4.8

MARKETING AND 

REGULATORY PROGRAMS

Grain Inspection, Packers and 

Stockyards Administration 

1.0

Agricultural Research Service 1.7

Cooperative State Research, Education, 

and Extension Service 

1.2

National Agricultural Statistics Service *

RESEARCH, EDUCATION, AND 

ECONOMICS 

Economic Research Service *

MULTIPLE AGENCY 15.0

OTHER Administration; Civil Rights; OCFO; 

OCIO 

5.1

*No OIG time planned for this agency; however it may be included in multi-agency reviews and/or 

other unplanned work. 
18 

INVESTIGATIONS 

Investigations are authorized inquiries to gather the facts needed to resolve an allegation that 

someone has violated a law or regulation pertaining to USDA programs or operations. 

OIG Special Agents are criminal investigators who specialize in the investigation of crimes 

involving USDA programs. Each investigator receives initial training at the Federal Law 

Enforcement Training Center (FLETC) in Glynco, Georgia. Additional training in law 

enforcement procedures, investigative techniques, and USDA program regulations is provided 

throughout the career of the investigator. 

Computer Forensic Unit computer specialists are uniquely trained members of our investigative 

team who assist Special Agents during investigative activities involving electronic/digital 

evidence collection and analysis. These specialists have received in-depth training through 

FLETC and other specialized providers relating to the investigation of high-tech criminal 

activity. 

INVESTIGATIVE PLANNING 

The investigative planning process focuses on identifying program vulnerabilities and 

investigative priorities, which establishes the general guidelines for the allocation of our 

investigative resources. It includes an analysis of historical patterns, trends, and results; a review 

of recent legislative, regulatory, and program changes; consideration of U.S. Department of 

Justice prosecutive guidelines; consideration of budgetary and staffing restrictions; and 

coordination with audit activities. Through the investigative planning process, we have 

identified priorities that include the timely investigation of 

• threats to the health and safety of the public, agriculture infrastructure and USDA 

employees, such as the sale of tainted food products, food product tampering, the 

introduction or dissemination of animal and plant diseases through intentional acts or 

inadvertently through the smuggling of prohibited plants, animals, and other products, 

homeland security issues, as well as threats against and assaults of USDA employees; 

• issues involving allegations of USDA employee bribery, conflict of interest, 

embezzlement, theft, misuse of computers, including Internet fraud and accessing child 

pornography, or collusion with program participants; and 

• other criminal activity in the loan, regulatory, and benefit programs. 

In preparing our plan for FY 2004, we analyzed data on requests for investigations received in 

previous years, the number of cases opened, and the results of those investigations. We reviewed 

recent legislative, regulatory, and program changes, and contacted agencies within USDA for 

suggestions and recommendations. We also reviewed audit plans for FY 2004 and considered 
19

our budget and anticipated staffing. Based on these considerations, we developed general 

guidelines for emphasizing areas for investigation. 

Our regional managers will review these guidelines during FY 2004 as they decide which 

referrals to take on as active cases. They will also consider the potential program impact, the 

likelihood of criminal prosecution, the likelihood of large civil monetary recovery, and the 

deterrent value. 

The majority of the investigations are based on referrals from USDA agencies. Departmental 

Regulation 1700-2, “OIG Organization and Procedures,” requires that USDA agencies 

expeditiously report known or suspected violations of law or regulations to OIG. Activities 

which must be reported to OIG include: 

• alleged violations of Federal criminal statutes, 

• allegations of criminal conduct or serious misconduct involving any USDA employee. 

THE INVESTIGATIVE PROCESS 

The investigative process usually begins with the receipt of an allegation of criminal activity 

from any source, including the OIG USDA Hotline, USDA agency officials, other government 

agencies, or the public. Investigations are opened in OIG regional offices in accordance with 

priorities and general guidelines established at the headquarters level. 

After an investigation is opened, it is assigned to a Special Agent who plans the investigation. 

This planning process includes a review of the criminal and civil statutes, program regulations, 

and Departmental or agency policies that may be involved. The Special Agent then conducts the 

investigation, which may require interviewing witnesses, reviewing and analyzing records, 

obtaining physical evidence, and conducting surveillance and undercover operations. If the 

Special Agent determines that a crime has been committed, he or she will discuss the 

investigation with a Federal and/or local prosecutor to determine if prosecution will be pursued. 

Upon completion of the investigation, the Special Agent prepares an investigative report 

summarizing the facts disclosed during the investigation. 

The investigative report is distributed to prosecuting attorneys and agency officials who may 

have an official interest in the results of the investigation. If the prosecuting attorney decides to 

proceed with a criminal or civil prosecution, the Special Agent assists the attorney in any 

preparation for court proceedings that may be required. This assistance may include serving 

subpoenas, locating witnesses, executing arrest and search warrants, and testifying before a 

grand jury and at trial. 

At the conclusion of any court actions, we advise the administrative agency involved of the court 

results and monitor any corrective or disciplinary action that may be taken by the agency. OIG 
20 

collects data summarizing the judicial and administrative results of its investigations and 

includes this data in its semiannual reports to the U.S. Congress. 

HOTLINE 

Established under the provisions of the Inspector General Act of 1978, OIG operates the USDA 

Hotline in accordance with procedures recommended by the PCIE. Allegations received through 

the Hotline may involve any agency, program, or employee of USDA. The OIG USDA Hotline 

staff review and analyze each complaint and refer them for inquiry and appropriate action. 

Complaints are referred to OIG Audit or Investigations, to the USDA agency responsible for the 

program, or to the responsible Federal, State, or local agency. For complaints requiring a 

response back to OIG, the Hotline staff must determine whether the USDA agency’s response to 

the complaint is adequate and whether to recommend further investigative or audit work by OIG. 

Significant audit findings, investigative results and administrative program changes have been 

obtained based on information received through this critical function. 

During FY 2002, the USDA Hotline received, reviewed, and processed 2,230 complaints from 

USDA employees and the general public. In FY 2003, 1,801 complaints were received. The 

following graph depicts the Hotline activity over the last 12 years. 

HOTLINE COMPLAINTS RECEIVED FY’s 1992-2003 

3942

6637

5461 5184

4674

3796

2452

1831

1973 2022 2230 1801

0

1000

2000

3000

4000

5000

6000

7000

92 93 94 95 96 97 98 99 00 01 02 03
21

The USDA Hotline has a toll-free telephone number for reporting fraud, mismanagement, or 

waste in a USDA program or misconduct by a USDA employee. Callers may choose to remain 

anonymous or may request that OIG keep their identity confidential. OIG will also pay a cash 

reward for information leading to convictions of persons defrauding USDA programs. 

We have three Hotline numbers established for use by the public and Departmental employees. 

These numbers can be called while law enforcement analysts are on duty 8:00 a.m. to 4:00 p.m., 

eastern time, Monday through Friday. Complainants may also write to the OIG Hotline at 

P.O. Box 23399, Washington, D.C. 20026. USDA Hotline contact information is provided to 

USDA employees and the public via formal training, posters, and business cards. In addition, 

this information can be found on the USDA and OIG home pages via the Internet 

(www.usda.gov/oig/Hotline.htm). 

 800-424-9121 This is a toll-free number to be used outside 

 Washington, D.C. 

 202-690-1622 This number is to be used in the Washington, D.C., 

 metropolitan area. 

 202-690-1202 This number connects to a telecommunications device for 

 the hearing impaired. 

 (NO TOLL FREE NUMBER, CALL COLLECT) 
22 

SPECIAL REPORTING OF 

BRIBES OR GRATUITIES 

Many USDA employees serve as inspectors and graders of meat, poultry, dairy products, eggs, 

and produce or distribute USDA program services and benefits. These employees are 

occasionally subject to offers of bribes and gratuities to influence their official duties. Also, 

USDA employees’ duties on occasion can lead to confrontations, which may lead to threats or 

violence against the USDA employee. USDA employees who receive bribe offers or threats 

may contact OIG via the direct line telephone number indicated below. Special Agents respond 

24 hours a day. Complainants may also write to the Office of Inspector General at 

P.O. Box 23399, Washington, D.C. 20026. 

 202-720-7257 This number is to be used by USDA employees to report 

 offers of bribes or gratuities during normal business hours. 

 888-620-4185 24 hours a day. 

OIG INVESTIGATIONS 

EMERGENCY CONTACTS 

HEADQUARTERS 

Duty Hours (8am – 4pm) 24-Hour Duty Agent Pager 

 (202) 720-7257 (888) 620-4185 

REGIONAL OFFICE LOCATIONS 

Northeast Region Phone (301) 504-2000 (7am - 5:00pm) 

Beltsville, MD Duty Pager (888) 436-6158 (24 hrs) 

 Fax (301) 504-2025 

Areas Served: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, 

New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and 

West Virginia 
23

Southeast Region Phone (404) 730-3170 (24 hrs) 

Atlanta, GA Fax (404) 730-3181 

Areas Served: Alabama, Florida, Georgia, Puerto Rico, South Carolina, Tennessee, and U.S. Virgin Islands 

Midwest Region Phone (312) 353-1358 (7:30am - 5:00pm) 

Chicago, IL Duty Pager (888) 803-8174 (24 hrs) 

 Fax (312) 353-8963 

Areas Served: Indiana, Kentucky, Michigan, Ohio, eastern district of Wisconsin, and the northern district of 

Illinois 

Southwest Region Phone (254) 743-6535 (7:30am – 5:00pm) 

Temple, TX Duty Pager (800) 752-3307 + 618-2305 (24 hrs) 

 Fax (254) 298-1358 

Areas Served: Arizona, Arkansas, Louisiana, Mississippi, New Mexico, Nevada (Las Vegas, Clark County), 

Oklahoma, and Texas 

Great Plains Region Phone (816) 926-7606 (24 hrs) 

Kansas City, MO Fax (816) 926-7699 

Areas Served: Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, 

Wyoming, Utah, western district of Wisconsin, and southern district of Illinois 

Western Region Phone (415) 744-2887 (24 hrs) 

San Francisco, CA Fax (415) 744-2896 

Areas Served: Alaska, California, Hawaii, Idaho, Nevada, Oregon, Territory of Guam, U.S. Trust Territories of 

the Pacific, and Washington 

[Updated as of 12/10/03]
24 

 FY 2004 ANNUAL PLAN 

DISTRIBUTION OF INVESTIGATIVE RESOURCES

BY UNDER AND ASSISTANT SECRETARIES 

OTHER

6.0% FS

7.5%

FNCS

30.0%

FFAS

28.5%

MRP

9.5%

NRE

8.0%

REE

2.0%

RD

8.5%

LEGEND

NRE Under Secretary, Natural Resources and Environment

FFAS Under Secretary, Farm and Foreign Agricultural Services

RD Under Secretary, Rural Development 

FNCS Under Secretary, Food, Nutrition, and Consumer Services

FS Under Secretary, Food Safety

REE Under Secretary, Research, Education, and Economics

MRP Under Secretary, Marketing and Regulatory Programs 

OTHER Includes Administration, Civil Rights, OCIO, and OCFO
25

DISTRIBUTION OF INVESTIGATIVE RESOURCES 

PERCENTAGE BY AGENCY 

FY 2004 PLANNED

NATURAL RESOURCES AND Forest Service 6.0

ENVIRONMENT Natural Resources Conservation 

Service 

2.0

Farm Service Agency 19.0

Foreign Agricultural Service .5

FARM AND FOREIGN 

AGRICULTURAL SERVICES

Risk Management Agency 9.0

Rural Utilities Service .5

Rural Housing Service 5.0

RURAL DEVELOPMENT

Rural Business-Cooperative Service 3.0

FOOD, NUTRITION, AND 

CONSUMER SERVICES

Food and Nutrition Service 30.0

FOOD SAFETY Food Safety and Inspection Service 7.5

Agricultural Marketing Service 2.5

Animal and Plant Health Inspection 

Service 

6.0

MARKETING AND 

REGULATORY PROGRAMS

Grain Inspection, Packers and 

Stockyards Administration 

1.0

RESEARCH, EDUCATION, AND Agricultural Research Service 1.0

ECONOMICS Cooperative State Research, 

Education, and Extension Service 

1.0

OTHER Administration; Civil Rights, 

OCFO; OCIO; OIG; Other 

6.0
26 

AUDIT 

Audit is the examination and verification of the economy and efficiency of an agency’s 

operations, its effectiveness in achieving program results, its compliance with applicable laws 

and regulations, and its fairness in reporting its financial operations. We also routinely conduct 

evaluations. An evaluation is a review, study, or analysis of USDA’s programs or activities for 

the purpose of providing information to managers for decision-making; for making 

recommendations for improvements to programs, policies, or procedures; and for administrative 

action. In addition to audits performed by OIG staff, we contract with certified public 

accountants for some audits and oversee the quality of the work of auditors under contract to 

other agencies of the Department. 

OIG auditors conduct their work in accordance with the “Government Auditing Standards: 

2003 Revision” (Yellow Book) GAO-03-673G, published by the U.S. General Accounting 

Office (GAO) in June 2003, and in accordance with the professional standards set by the 

American Institute of Certified Public Accountants (AICPA). We have established and 

implemented a program to ensure that our staff maintains professional proficiency through 

continuing education and training. Training directly related to the Government auditing 

environment is provided to newly hired, intermediate, and advanced level OIG auditors through 

in-house audit academies. 

The Yellow Book describes the types of audits that Government and non-Government 

organizations conduct and the audit standards to be followed. Government audits are generally 

classified as financial or performance audits. However, these audits may have a combination of 

objectives that include more than one type of work or may have objectives limited to only some 

aspects of one type of work. Auditors should follow the standards that are applicable to the 

individual objectives of the audit. 

FINANCIAL AUDITS

Financial audits are primarily concerned with providing reasonable assurance about whether 

financial statements are presented fairly in all material respects in conformity with generally 

accepted accounting principles (GAAP) or with a comprehensive basis of accounting other than 

GAAP. Financial audits contribute to making governments more accountable for the use of 

public resources and provide users with statements concerning the reliability of the information. 

Financial audits are performed under AICPA’s generally accepted auditing standards (known as 

GAAS) as well as related AICPA statements on auditing standards. 

Financial audits also provide information about internal controls, compliance with laws and 

regulations, and provisions of contracts and grant agreements as they relate to financial 

transactions, systems, and processes. 
27

PERFORMANCE AUDITS

Performance audits entail an objective and systematic examination of evidence to provide an 

independent assessment of the performance and management of a program against objective 

criteria as well as assessments that provide a prospective focus or that synthesize information on 

best practices or cross-cutting issues. Performance audits provide information to improve 

program operations and facilitate decision-making by parties with responsibility to oversee or 

initiate corrective action, and improve accountability. Performance audits encompass a wide 

variety of objectives, including those related to assessing program effectiveness and results; 

economy and efficiency; internal controls; compliance with legal or other requirements; and 

objectives related to providing prospective analyses, guidance, or summary information. 

The term performance audit is used generically to include work classified by some audit 

organizations as program evaluations, program effectiveness and results audits, economy and 

efficiency audits, operational audits, and value-for-money audits. The two types of performance 

audits most commonly conducted by USDA’s OIG include 

• Program effectiveness and results audits – which address the effectiveness of a program 

and typically measure the extent to which a program is achieving its goals and objectives. 

• Economy and efficiency audits – which address concerns whether an entity is acquiring, 

protecting and using its resources in the most productive manner to achieve program 

objectives. 

These audit types are often interrelated and may be concurrently addressed in a performance 

audit. 

AUDIT PLANNING 

Each year, we begin the planning process by soliciting audit suggestions from the Secretary’s 

Subcabinet, agency management officials, and OIG management and staff. In prioritizing the 

suggestions for inclusion in the FY 2004 Annual Plan, we considered 

• statutory and regulatory requirements; 

• current and potential dollar magnitude; 

• adequacy of internal control systems; 

• newness, changed conditions, or sensitivity of the organization, program activity, 

or function; 

• extent of Federal participation in terms of resources or regulatory authority; 
28 

• management needs to be met; 

• prior audit history; 

• prior investigation history; and 

• timeliness, reliability, scope, and results of audits or evaluations performed by 

others. 

THE AUDIT PROCESS 

The phases of the audit process include the following 

Audit Approach Development of an audit approach includes determining the reasons 

for selecting the audit subject, overall audit objectives and scope, 

locations to be audited, OIG staff who will perform the audit, staffdays needed, other resources required (e.g., specialists with timber or 

banking expertise) to perform the audit, and benefits anticipated from 

the audit. 

Audit Notification Audit notification to the appropriate USDA agency or office informs 

auditees of our intent to begin an audit. 

Entrance Conference OIG staff hold entrance conferences with agency officials to discuss 

and obtain input on the purpose and objectives of the audit, its scope, 

and the general methodology and procedures to be followed. 

Survey Work Auditors perform survey work to gather information and identify 

problems. 

Field Audit Work Detailed audit testing and interviewing are undertaken if the survey 

indicates the need to learn more about conditions noted. 

Management Alert During the course of an audit, issues may arise which require the 

immediate attention of management. This interim report furnishes the 

vehicle to provide management the information needed to initiate 

immediate corrective action. 
29

Discussion Draft 

Report and Exit 

Conference

At the conclusion of an audit, OIG holds a formal exit conference with 

the agency’s principal officials to review the audit results presented in 

a discussion draft report. This gives management an opportunity to 

confirm information, to ask questions, and to provide any necessary 

clarifying data. 

Official Draft Report After the exit conference, OIG makes necessary changes to the draft 

report and presents it as an official draft report to the agency for final 

written comments. The agency is generally given 30 days to respond 

to the official draft report. 

Final Report OIG prepares and issues a final report which contains the agency’s 

written response. 

Management 

Decision and Final 

Action

A management decision (agreement to take action on an audit 

recommendation) must be reached on all report recommendations 

within 6 months of issuance of the report. OIG tracks management’s 

actions through the achievement of management decision; the Office 

of the Chief Financial Officer tracks actions from the achievement of 

management decision to completion of final action. The status of 

management decisions is included in OIG’s semiannual report to the 

U.S. Congress. The status of final actions, including those not 

completed within 1 year of the management decision, is reported 

annually in USDA’s Performance and Accountability Report. 
30 

 FY 2004 ANNUAL PLAN 

DISTRIBUTION OF AUDIT RESOURCES 

BY UNDER AND ASSISTANT SECRETARIES 

OTHER

4.2%

FS

3.6%

FNCS

17.6%

FFAS

18.7%

MRP

5.0%

NRE

7.4%

REE

4.0%

MULTI

30.1%

RD

9.4%

LEGEND

NRE Under Secretary, Natural Resources and Environment

FFAS Under Secretary, Farm and Foreign Agricultural Services

RD Under Secretary, Rural Development

FNCS Under Secretary, Food, Nutrition, and Consumer Services

FS Under Secretary, Food Safety 

REE Under Secretary, Research, Education, and Economics

MRP Under Secretary, Marketing and Regulatory Programs 

OTHER Includes Administration, Civil Rights, OCIO, and OCFO
31

DISTRIBUTION OF AUDIT RESOURCES 

PERCENTAGE BY AGENCY 

FY 2004 PLANNED

NATURAL RESOURCES AND Forest Service 6.1

ENVIRONMENT

Natural Resources Conservation Service 1.3

Farm Service Agency 9.7

Foreign Agricultural Service 1.2

FARM AND FOREIGN 

AGRICULTURAL SERVICES

Risk Management Agency 7.8

Rural Development (financials) 2.3

Rural Utilities Service .7

Rural Housing Service 4.6

RURAL DEVELOPMENT 

Rural Business-Cooperative Service 1.8

FOOD, NUTRITION, AND 

CONSUMER SERVICES

Food and Nutrition Service 17.6

FOOD SAFETY Food Safety and Inspection Service 3.6

Agricultural Marketing Service 1.0

Animal and Plant Health Inspection 

Service 

3.5

MARKETING AND REGULATORY 

PROGRAMS

Grain Inspection, Packers and 

Stockyards Administration 

.5

Agricultural Research Service 2.5

Cooperative State Research, Education, 

and Extension Service 

1.5

National Agricultural Statistics Service *

RESEARCH, EDUCATION, AND 

ECONOMICS

Economic Research Service *

MULTIPLE AGENCY 30.1

OTHER Administration; Civil Rights; OCFO; 

OCIO 

4.2

*No audit time planned for this agency; however it may be included in multi-agency reviews and/or 

other unplanned work. 
32 

APPENDIX I

OIG STRATEGIES 

The FY 2004 Strategies are: 

 × FARM PROGRAMS 

 × MARKET DEVELOPMENT 

 × CIVIL RIGHTS 

 × NATURAL RESOURCES CONSERVATION SERVICE 

 × ENTITLEMENT PROGRAMS 

 × FOREST SERVICE 

 × RESEARCH AND TECHNOLOGY TRANSFER 

 × INTEGRITY OF USDA PERSONNEL 

 × HOMELAND SECURITY 

 × PROTECTING U.S. FOOD SUPPLY AND AGRICULTURE 

 × RISK MANAGEMENT 

 × GOVERNMENT PERFORMANCE AND RESULTS ACT 

 × ACCOUNTING AND FINANCIAL MANAGEMENT 

 × INFORMATION TECHNOLOGY/SECURITY 

 × RURAL DEVELOPMENT 

 × MANAGEMENT/CONTROL OF ENVIRONMENTAL HAZARDS 

 × PROGRAM COMPLIANCE, ECONOMY, AND EFFICIENCY 

Descriptions of the strategies, with examples of audit and investigative work recently performed and 

planned for FY 2004, are presented on the following pages. 
33

FARM PROGRAMS

The Farm Programs strategy encompasses a variety of farm commodity, farm credit, and 

conservation programs administered by the Farm Service Agency (FSA). The programs are 

funded primarily through the Commodity Credit Corporation (CCC), a Government entity for 

which FSA provides operating personnel. 

The principal activities of FSA are the administration of farm commodity programs; farm 

ownership, operating, and emergency loans; conservation and environmental programs; 

emergency and disaster assistance; and domestic and international food assistance and 

international export credit programs. Outlays for these activities increased from $19.7 billion in 

FY 1999 to a record high of $32.6 billion for 2000 and then declined to $25.1 billion for 2001 

and to $17.7 billion for 2002. The high levels of spending between 1999 and 2001 are generally 

attributed to higher marketing assistance loan program outlays associated with low market prices 

and to authorized emergency spending, which totaled over $5 billion in 1999, about $14 billion 

in 2000, and approximately $10.5 billion in 2001. Since the new Farm Bill – the Farm Security 

and Rural Investment Act of 2002 (the 2002 FSRIA) – was enacted in May 2002, market 

conditions have improved and the only major disaster assistance authorized is the $3.1 billion 

provided in the Agricultural Assistance Act of 2003 (2003 AAA). Total FSA outlays are 

projected to be about $19.4 billion in 2003 and $18.2 billion in 2004. FSA’s 2004 budgeted 

program level is more than 27 percent of the Department’s total. 

AUDIT

Our strategy is designed to ensure overall farm program integrity, efficiency, and effectiveness. 

Emphasis on farm programs is needed because of the magnitude of funding; prior audit results 

and known internal control problems; enactment of the 2002 FSRIA and implementation of its 

programs; continued emergency spending (now under the 2003 AAA); the decentralized delivery 

system; and the critical nature of the programs to the agency’s mission. 

In FY 2003, we reviewed FSA’s administration of the $1.3 billion Peanut Quota Buyout Program 

authorized by the 2002 FSRIA and concluded FSA procedures were generally effective to ensure 

payments were issued to eligible quota holders. We also began audits of the newly enacted 

Direct and Counter-Cyclical Programs under which we are reviewing calculations of the 

payment rates and testing the base and yield options selected by farmers to affect payments for 

the 2002 through 2007 crop years. In addition, we initiated reviews of the implementation of 

certain livestock assistance authorized under the 2003 AAA. Additional farm program initiatives 

begun in FY 2003, such as our assessment of the Apple Market Loss Assistance Program, also 

continue into FY 2004. 
34 

In FY 2004, we will continue monitoring implementation of the 2002 FSRIA and the 2003 AAA 

and intend to conduct reviews of affected farm programs including the Milk Income Loss 

Contract Program, 2001/2002 Crop Disaster Program, and Sugar Beet Disaster Program. Also, 

as Congress continues to challenge Government agencies to “do more with less,” we plan to 

systemically assess the efficiency of certain comprehensive processes and initiatives 

administered or undertaken by FSA. Specifically, we will look at FSA’s internal end-of-year 

payment limitation review process, program compliance activities, and compliance with the 

Improper Payments Information Act of 2002. Our more systemic approach to work for FY 2004 

corresponds with the Department’s comprehensive Human Capital Plan, which includes 

implementing management initiatives both within the agencies and from a corporate perspective

in support of the President’s Management Agenda. The Department’s plan to improve human 

capital performance recognizes that automation and process efficiency play a large role in 

achieving optimal performance of USDA employees and supports a broader scope of program 

responsibilities with the same or fewer staff. 

This audit strategy links most closely to USDA Strategic Goal 1, Objective 1.4, Provide Risk 

Management and Financial Tools to Farmers and Ranchers. 

INVESTIGATIONS

The major emphasis of our Farm Programs investigative strategy is to investigate allegations of 

significant fraud. Historically, our major concerns in FSA programs have been the unauthorized 

disposition of property mortgaged to the Government, fraud by warehouse operators, false 

statements by commodities producers and exporters, false statements by borrowers in order to 

obtain more or greater dollar value loans or debt write-downs than those to which they are 

actually entitled, and manipulation of disaster program rules for illegal gain. 

Our decision to initiate an investigation is based on several factors, including the likelihood of 

criminal prosecution or large civil monetary recovery, determined primarily in consultation with 

the appropriate U.S. Attorney’s office. Another factor which influences the decision to open a 

case for investigation is the deterrent value of the Government bringing court actions against a 

producer. Those matters not investigated by OIG are referred back to FSA for appropriate 

administrative action. The agency also has the option of resubmitting a request for an 

investigation based on additional or updated information. 

Our regional offices have always maintained a close working relationship with FSA State offices 

to ensure timely referral of investigative matters and to develop an understanding of FSA’s 

priorities, resources, and needs. Headquarters informs the regional offices of significant program 

changes, develops national guidelines for referral of investigative matters, and alerts top agency 

managers to any program provisions that allow a potential for abuse. 

Approximately 19 percent of our investigative resources will be spent on FSA programs in 

FY 2004. 
35

MARKET DEVELOPMENT

The market development strategy involves both domestic and foreign programs. Two agencies 

have primary program responsibilities: the Agricultural Marketing Service (AMS) and the 

Foreign Agricultural Service (FAS). 

AMS’ mission is to facilitate the strategic marketing of agricultural products in domestic and 

international markets, while ensuring fair trading practices and promoting a competitive and 

efficient marketplace, to the benefit of producers, traders, and consumers of U.S. food and fiber 

products. This is carried out through nine broad activities: the Market News Service; 

standardization, grading, and shell egg surveillance; global market expansion; market protection 

and promotion; wholesale, farmers, and alternative market development; transportation services; 

payments to States and U.S. possessions; the Perishable Agricultural Commodities Act; and 

strengthening agricultural markets and producer income (Section 32). In FY 2004 the total AMS 

funding is estimated at about $1.2 billion with about 70 percent coming from voluntary user fees. 

FAS’ mission is to serve U.S. agriculture’s interests by expanding export opportunities for 

U.S. agricultural, fish, and forest products and promoting world food security. The major 

programs to accomplish this are the CCC Export Credit Guarantee programs, market 

development programs, export subsidy programs, Public Law 480 programs, Food for Progress, 

and Section 416(b) donations. In FY 2004, the funding level for FAS and these programs is 

estimated at $6.2 billion. 

AUDIT

Our strategy is to evaluate overall FAS administration of its food assistance and global market 

programs and its controls to determine whether its programs and activities are being properly 

implemented and meeting the Department’s program goals. 

During FY 2004, we plan to review FAS’ oversight of the private voluntary organizations 

(PVO). This will be a followup audit to review grant fund accountability under the Food for 

Progress Program and other assistance programs. The audit will determine whether prior report 

recommendations were implemented and will also identify and test controls designed to ensure 

that PVOs use commodities and funds provided for direct distribution and monetization 

programs in accordance with program regulations. Additionally, we plan a review of market 

development in which we expect to determine whether funds provided for market development 

programs were properly expended. We will also follow up on an earlier audit of FAS procedures 

and controls over the trade agreement monitoring process. In this review we will assess the 
36 

adequacy of FAS’ management controls, the role of foreign posts in the monitoring process, the 

availability of archive of trade agreements to the public as a resource, and other issues. 

This audit strategy links most closely to the first three objectives under USDA’s Strategic 

Goal 1: Objective 1.1, Expand International Marketing Opportunities; Objective 1.2, Support 

International Economic Development and Trade Capacity Building; and Objective 1.3, Expand 

Alternative Markets for Agricultural Products and Activities. 

INVESTIGATIONS

We will continue to work closely with OIG-Audit and FAS to ensure allegations involving FAS 

programs are reviewed in a timely manner. We anticipate that available staff workdays devoted 

to FAS cases will be approximately .5 percent. 
37

CIVIL RIGHTS

The Civil Rights Act of 1964, Title VI, states: “No person in the United States shall, on the 

ground of race, color, or national origin, be excluded from participation in, be denied the benefits 

of, or be subjected to discrimination under any program or activity receiving Federal financial 

assistance.” 

Since the passage of Title VI, several other statutes have been enacted to expand the prohibition 

against discrimination. Title IX of the Higher Education Amendments Act of 1972 prohibits 

gender-based discriminatory practices. Section 504 of the Rehabilitation Act of 1972 prohibits 

discrimination against persons with disabilities. The Age Discrimination Act of 1975 prohibits 

discrimination based upon age. Also, Title VII of the Civil Rights Act of 1964 prohibits 

discrimination in employment based on race, color, religion, sex, or national origin. 

The Department’s civil rights functions have undergone major restructuring. In May 1997, 

Secretary’s Memorandum 1010-4 gave the Assistant Secretary for Administration the full 

authority for the performance and oversight of all civil rights functions within the Department. 

The Assistant Secretary for Administration had the authority to delegate civil rights functions to 

agency heads, as appropriate, and to rate the agency heads on their performance of civil rights 

functions. The memorandum also established the Office of Civil Rights and mandated that it be 

headed by a Director who reported to the Assistant Secretary for Administration. 

In 2003, Secretary’s Memorandum 1030-57, dated March 7, 2003, established the position of 

Assistant Secretary for Civil Rights. The Assistant Secretary for Civil Rights reports directly to 

the Secretary and is responsible for all of the civil rights authorities that had been delegated to 

the Assistant Secretary for Administration. 

The Director of Civil Rights, who now reports to the Assistant Secretary for Civil Rights, has full 

responsibility for investigation, adjudication, and resolution of complaints of discrimination 

arising out of USDA employment activities or in the context of federally assisted or federally 

conducted programs, including complaints made by USDA employees, applicants for 

employment, and USDA program participants and customers. 

AUDIT

We continue to meet with Office of Civil Rights and program officials to resolve the outstanding 

recommendations from OIG reports issued between September 1998 and March 2000. These 

reports reviewed the Office of Civil Rights’ efforts to: reduce the backlog of program 
38 

complaints, implement settlements, implement prior recommendations, and manage employment 

complaints. 

In FY 2004, we plan to conduct a followup audit on the Office of Civil Rights’ implementation 

of prior audit recommendations for both employment and program complaints. We will also 

audit FSA’s minority participation in farm loan programs. 

This audit strategy links most closely to the President’s Management Agenda and to USDA’s 

initiative to improve human capital management. 
39

NATURAL RESOURCES

CONSERVATION SERVICE 

The Natural Resources Conservation Service’s (NRCS) mission is to provide national leadership 

in a partnership effort to help people conserve, improve, and sustain the Nation’s natural 

resources and environment. NRCS directs its financial and technical assistance programs to land 

users through the USDA Service Centers and through local conservation districts, which are 

units of State or local governments organized for the purpose of developing and carrying out 

local conservation programs. Beginning in 2003, this work is being carried out with the help of 

private sector providers. USDA entered into a Memorandum of Understanding with each 

conservation district and these formal agreements provide a basis for the Department’s working 

relationship with each district. 

NRCS achieves its mission through: (1) conservation operations; (2) the Environmental Quality 

Incentives Program (EQIP); (3) the Wetlands Reserve Program, (4) the Conservation Reserve 

Program; and (5) Technical Service Provider Assistance.

For FY 2004, NRCS’ program level budget is estimated at $2.7 billion. The 2002 FSRIA 

reauthorized many of NRCS’ programs at substantially increased acreage levels. The 

2002 FSRIA authorized some new programs as well, including the Conservation Security 

Program. 

AUDIT

Our strategy includes NRCS’ overall administration of its programs and the adequacy of controls 

and systems NRCS has in place to ensure program integrity, including whether participants are 

in compliance with the agreed-to conservation provisions. 

In FY 2003, we initiated a review of the Wetlands Reserve Program to evaluate the method 

NRCS uses to compute the value of conservation easements. This review is ongoing. 

For FY 2004, we plan to evaluate the administration of EQIP based on increased funding and 

changes in funding methodology as specified in the 2002 FSRIA. We also plan a review to 

evaluate NRCS’ quality control systems to assess participants’ eligibility for program benefits 

and their compliance with program requirements (particularly conservation provisions). 

Additionally, we will review NRCS’ newly implemented program utilizing private sector 

providers to provide technical service assistance to conservation program participants. We 

expect to evaluate controls exercised over the designation of individuals and entities as technical 
40 

service providers (TSP) through self-certification by the applicant and through recommending 

organizations. This audit will also evaluate the controls over the measurement and 

accountability system that measures and monitors the use and performance of TSPs and the cost 

incurred to install the conservation practices based on not-to-exceed rates. 

This audit strategy links most closely to the objectives under USDA’s Strategic Goal 5: 

Objective 5.1, Implement the President’s Healthy Forest Initiative and Other Actions to Improve 

Management of Public Lands; and Objective 5.2, Improve Management of Private Lands. 

INVESTIGATIONS

We will continue to work closely with NRCS and OIG-Audit to ensure that necessary 

investigative services are provided. We estimate that about 2 percent of our investigative 

resources will be dedicated to NRCS matters. 
41

ENTITLEMENT PROGRAMS

The Food and Nutrition Service (FNS) administers the Department’s food assistance programs, 

which are entitlement programs. The primary programs are the Food Stamp Program (FSP); the 

Child Nutrition Programs (CNP); and the Special Supplemental Nutrition Program for Women, 

Infants and Children (WIC). A number of programs make up the CNP with the primary ones 

being the National School Lunch, School Breakfast, Child and Adult Care Food, Summer Food 

Service, and commodity programs. In FY 2004, FNS’ estimated program level is $44.2 billion 

with the bulk going to FSP ($27.7 billion), CNP ($11.4 billion), and WIC ($4.8 billion). 

For the most part, FNS does not directly administer its programs. FNS enters into agreements 

with State agencies. For example, for the National School Lunch and School Breakfast 

programs, the agreement would be with the equivalent of the State department of education. The 

State agency, in turn, enters into agreements with local entities. In the case of CNP, the 

agreement would be with a school district or its equivalent. The local entity in most cases 

accepts applications for participation, determines eligibility, and disburses benefits. The Federal 

Government funds all of the program benefits and in most cases shares in the State and local 

administrative costs to operate the program. For example, FNS estimates its FSP administrative 

costs for FY 2003 at about $2.6 billion. 

AUDIT 

Our audit strategy includes both FNS’ overall administration of the programs, especially the 

FSP, and the adequacy of controls and systems FNS has in place to manage the programs. 

During FY 2003 our audits of FNS programs focused on the FSP and CNP since they are the 

largest of the entitlement programs. 

FSP - We completed Electronic Benefits Transfer (EBT) systems audit work in one State, and 

found that controls needed to be strengthened over EBT access. Due to concerns over the 

widespread collection and sharing of personal information, and occurrences of identity theft, we 

also performed an audit of controls over the access, disclosure, and use of Social Security 

numbers (SSN) in the FSP and concluded that overall controls were in place; however, in some 

instances States needed to limit access to SSNs. We performed an audit of Tennessee’s 

compliance with FSP Employment and Training (E&T) requirements and identified significant 

fiscal and program management issues. The State agency claimed E&T expenses in excess of 

actual costs and did not maintain adequate documentation to support costs. Finally, we reviewed 

FSP administrative costs claimed by two States to determine the accuracy and the allowability of 

those costs and found that claims were not always accurate and costs were not always 

supportable. One State agency did not follow established FNS procedures to fund a new 
42 

computer system to administer FSP and other Federal programs, resulting in unauthorized 

incurred FSP expenses of over $8 million. 

CNP - We performed audits of the National School Lunch Program (NSLP) in two States to 

evaluate school food authorities’ (SFA) internal controls related to meal accountability, 

procurement, and accounting systems. We identified SFAs that did not follow meal 

accountability procedures to ensure the accuracy of daily meal counts, weaknesses in controls 

over claims for reimbursement, and improper procurement practices. 

Since FNS programs have large cash outlays, the potential exists for fraud and large dollar 

losses. In FY 2004, we will emphasize audits of FNS programs, particularly FSP, to ensure that 

critical internal control checks are in place to guarantee efficiency, effectiveness, and economy. 

We will continue to monitor EBT systems as they are implemented. Additionally, our plan calls 

for audits of FNS’ implementation of revised WIC vendor regulations, controls over eligibility 

for NSLP, and analyses of EBT databases. 

This audit strategy links most closely to all three objectives under USDA Strategic Goal 4: 

Objective 4.1, Improve Access to Nutritious Food; Objective 4.2, Promote Healthier Eating 

Habits and Lifestyles; and Objective 4.3, Improve Food Program Management and Customer 

Service. 

INVESTIGATIONS

We expect to focus a considerable amount of our investigative efforts on stores with high 

redemptions or stores involved in conspiracies to purchase food stamps or EBT food benefits at 

less than face value for redemption at full value to USDA (trafficking). As almost all States are 

now distributing benefits through EBT, our food stamp investigations are making use of the tools 

provided by EBT to detect trafficking and to compile evidence against traffickers. We spent 

some time in FY 2003 investigating authorized store operations when proceeds of the criminal 

activity were sent overseas and expect this activity to continue in FY 2004. At the same time, we 

expect to continue to reduce time spent on food stamp trafficking investigations involving 

unauthorized individuals or entities. 

We also anticipate continuing our investigations of fraud in the WIC, NSLP, and the Child and 

Adult Care Food Program at about the same level of time as we have historically spent. 

In FY 2004, we plan to use approximately 30 percent of staff workdays on FNS programs, 

primarily FSP. 
43

FOREST SERVICE

The Forest Service (FS) has the responsibility for providing leadership in the management, 

protection, and use of the Nation’s forests and rangelands. The agency’s overall mission is to 

achieve quality land management under the sustainable multiple-use concept. Through the 

National Forest System, the agency is responsible for managing more than 192 million acres of 

public land. These lands are distributed among 46 States, commonwealths, and territories. The 

agency administers these lands through over 700 offices. Through its State and private 

organization, FS cooperates with State and local governments and private landowners in the 

management of forest resources; and through its research organization, the agency provides 

leadership in forest and rangeland research. The total FY 2004 budget for FS is projected at 

$4.82 billion while receipts generated through timber sales and other activities on the public 

lands are estimated at about $414 million. In addition, Congress has significantly increased FS’ 

funding to implement the National Fire Plan (NFP). These funding increases are continuing, 

with the long-term goal of reducing the threat of catastrophic fire on public and private lands. 

AUDIT

During FY 2003, FS contracted with a large certified public accounting (CPA) firm to conduct 

its annual financial statement audit. OIG acts as the Contracting Officer’s Technical 

Representative and monitors the completion of the audit. During the fiscal year we completed 

our audit work related to the agency’s land adjustment program and concluded that the controls 

implemented in response to our previous audits were working effectively. We initiated survey 

work related to FS’ efforts to implement the NFP. Our survey identified two issues we reported 

to the agency. We found that budget estimates made by the FS had not included all applicable 

costs, and therefore the agency’s ability to fully implement the plan were in question. We also 

found that the agency had not implemented adequate controls to ensure funds designated for 

rehabilitating burned over areas were properly spent. We also initiated work related to homeland 

security issues within the FS. We found that the agency needed to take more aggressive action to 

safeguard its owned and leased aircraft, ensure the safety and security of explosives and 

munitions, and coordinate law enforcement actions with agencies with border security 

responsibilities. 

For FY 2004 we will continue to monitor the CPA audit of FS’ financial statements. We will 

also continue our review of FS implementation of the NFP. Since significant financial resources 

are being dedicated to implementation of the NFP, our audit will focus on how effectively the 

agency has accomplished budget and performance integration. We will continue our work 

related to reviewing homeland security issues within FS operations. We also plan on continuing 

work related to FS management of the National Environmental Protection Act process, on 
44 

agency actions to prevent timber theft, procurement of new firefighting lead planes, collaborative 

ventures and partnerships, and FS trust funds. 

This audit strategy links most closely to the objectives under USDA’s Strategic Goal 5: 

Objective 5.1, Implement the President’s Healthy Forest Initiative and Other Actions to Improve 

Management of Public Lands; and Objective 5.2, Improve Management of Private Lands. 

INVESTIGATIONS

Our FS investigations have typically focused on embezzlement and theft of Government funds 

and property, as well as cases involving the FS’ contracting for goods and services. During 

FY 2003, OIG investigators were also involved in investigations relating to arson in forest fires. 

Legislation enacted in late 2002 (P.L. 107-203) requires the USDA’s OIG to perform an 

independent investigation of any FS firefighter deaths that are caused by wildfire entrapment or 

burnover. In FY 2003, we were called upon to initiate an investigation based on this statutory 

requirement. We estimate that we will be spending approximately 6 percent of our investigative 

resources on FS cases in FY 2004. 
45

RESEARCH AND TECHNOLOGY TRANSFER

USDA is the lead agency for the Federal investment in agricultural research and development 

and for programs that introduce new and improved technologies to the production, processing, 

and marketing of agricultural and forestry products. There are five principal agencies involved 

in the Department’s research and technology transfer effort. The Agricultural Research Service 

(ARS) supports direct Federal research and provides information (including USDA’s National 

Agricultural Library) on new and improved technologies on problems of national impact in 

production, processing, and marketing of agricultural and forestry products. The Cooperative 

State Research, Education, and Extension Service (CSREES) administers the Federal partnership 

with the State Land Grant system and other public and private institutions for science capacity 

building, basic and applied research, and the dissemination of information and technology. The 

Economic Research Service (ERS) provides economic and social science information and 

analysis to public and private decision makers for improving agricultural profitability and the 

rural economy. USDA’s source for the collection and publication of the Nation’s agricultural 

production statistics is the National Agricultural Statistical Service (NASS). The Forest Service 

Research staff programs are designed to improve resource conservation, productivity, and 

protection of 1.6 billion acres of private- and publicly-owned forests and rangelands through 

direct research and the sharing of scientific information with other Government agencies, 

colleges and universities, businesses, and private landowners. For FY 2004, the budgeted 

program level for such research activities in the Department is estimated at $2.6 billion. 

AUDIT

Our objective is to ensure the program integrity in this mission area; that is, ensuring that 

research funds are being used in accordance with the regulations and to support the Department’s 

research goals, and secondly, ensuring that any research misconduct is properly reviewed and 

adjudicated. Since a substantial portion of these funds are passed through to other non-Federal 

entities, our objective includes determining whether USDA agencies have established adequate 

management controls to ensure that research funds were expended in accordance with Federal 

program regulations. 

In FY 2003, at the request of an agency administrator, we reviewed a specific cooperative 

agreement (SCA) with a university. The agreement was to provide funding to establish a science 

center. We found the university’s internal controls were lacking; its use of Federal funds and 

program management in connection with its responsibilities under the SCA needed significant 

improvement. We also initiated a number of other reviews that are still ongoing. We reviewed 

CSREES’ implementation of the Agriculture Research, Extension, and Education Reform Act of 

1998 (AREERA), which included an evaluation of the basis and documentation to support the 
46 

selected target levels of matching funds by the land-grant institutions for their integrated research 

and extension activities in multiple fiscal years. We also conducted an audit survey to evaluate 

the status of the Department’s implementation of the Office of Science and Technology Policy’s 

research conduct policy that was issued in December 2000. Lastly, we continued our effort 

monitoring the Department’s activities involving biotechnology or genetically engineered crops, 

reviewing the adequacy of the Department’s controls over the identification, shipping, 

accountability, and disposal of genetically engineered organisms at germplasm storage sites. 

For FY 2004, in addition to completing our efforts reviewing the Department’s controls over the 

movement and release of genetically engineered organisms, we plan to start two efforts involving 

biotechnology: controls over research involving genetically engineered animals and insects, and 

controls over the separation of genetically engineered crops. Based on our earlier audit survey 

on the Federal Technology Transfer Program, we will be reviewing ARS’ controls over the 

transfer of sensitive technology to the public. Lastly, we plan to review CSREES’ oversight of 

the competitive grant awards and expenditures for the Initiative for Future Agriculture and Food 

Systems (IFAFS) Program. 

This audit strategy links (depending on the particular performance measures being assessed) to 

four of the Department’s five strategic goals. These include: 

• Goal 1, Objective 1.2, Support International Economic Development and Trade Capacity 

Building; and Objective 1.3, Expand Alternative Markets for Agricultural Products and 

Activities. 

• Goal 2, Objective 2.1, Expand Economic Opportunities Through USDA Financing of 

Business. 

• Goal 3, Objective 3.1, Reduce the Incidence of Food-borne Illnesses Related to Meat, 

Poultry, and Egg Products in the U.S.; and Objective 3.2, Reduce the Number and 

Severity of Agricultural Pest and Disease Outbreaks. 

• Goal 4, Objective 4.2, Promote Healthier Eating Habits and Lifestyles; and Objective 4.3, 

Improve Food Program Management and Customer Service. 

INVESTIGATIONS

Investigations will be conducted as deemed necessary, in close coordination with the respective 

USDA agencies and OIG-Audit. In recent years, some of our key investigative work in this area 

resulted from break-ins and vandalism at various research facilities. OIG will continue to 

investigate and monitor the security for high-profile labs to ensure that USDA programs are not 

compromised. We expect to devote about 1.5 percent of staff investigative resources to these 

research programs. 
47

INTEGRITY OF USDA PERSONNEL

The integrity of USDA personnel is essential to maintain the public’s confidence that tax dollars 

and resources are adequately protected. A myriad of laws, Executive orders, and regulations 

prescribe what is expected of public servants before, during, and after Government employment. 

During employment, public servants are held to high ethical standards, including prohibitions 

against acceptance of gifts and gratuities, private compensation, and the appearance of a conflict 

of interest. Certain prohibitions also apply after an employee leaves the Government. For 

example, the Federal Procurement Policy Act (41 U.S.C. § 23) imposes a 1-year restriction 

prohibiting individuals from representing a contractor in the negotiation or performance of a 

contract if that individual was personally and substantially involved in either the negotiation or 

review and approval of that same contract as a Government representative. 

INVESTIGATIONS

The prompt investigation of allegations involving potential criminal violations by USDA 

employees continues to be a high priority of OIG. Employee misconduct most often involves 

allegations of embezzlement, bribery, and conflict of interest. We have made a significant 

commitment to ensure that allegations of employee criminal misconduct are investigated 

promptly, in order that corrupt public servants may be brought to justice and the agencies 

involved may proceed expeditiously with appropriate administrative action. We have seen an 

increase in the number of investigations involving employees misusing their government 

computers, including accessing and downloading child pornography. 

We intend to continue our commitment to employee integrity investigations by spending about 

10 percent of investigative time in this area. 

This investigative strategy links most closely to the President’s Management Agenda and to 

USDA’s initiative to improve human capital management. 
48 

HOMELAND SECURITY

OIG’s Homeland Security and Biological Security Program was established to provide 

interagency response coordination for bio-security and agriculture threat events. OIG has met 

with numerous USDA and State agency officials, State food and agriculture councils, State 

emergency boards, State and local audit and law enforcement organizations, other Federal 

Inspector General offices, and private industry groups. OIG has also participated in homeland 

security exercises and drills, and provided presentations to such agriculture-related organizations 

concerning OIG’s role and responsibilities in the event of an agricultural attack or outbreak. 

OIG’s efforts in Homeland Security have three basic objectives: (1) to identify and protect 

USDA assets, both physical and cyber-based; (2) to prevent USDA assets from being used 

against the United States; and (3) to preclude USDA programs from being used to finance 

terrorism. Our reviews have encompassed USDA’s mission activities from protecting our 

natural resources to ensuring the health and safety of our agriculture economy and the food 

supply. In response to one of our first efforts, USDA issued Departmentwide policies and 

procedures on security for its facilities, the first Federal Department to do so. 

For FY 2003, we completed reviews involving security provided by the FS over U.S. borders 

adjacent to national forest land; over FS explosives and munitions used for land management; 

and over dams and reservoirs, oil and gas pipelines, and other assets on FS lands. Our audit 

reports disclosed a number of control weaknesses making these assets, which have a high risk for 

terrorist exploitation, vulnerable to misuse. FS management has initiated actions in response to 

our recommendations, which, we believe, are helping to protect the public against misuse of FS 

assets by terrorists. We also performed a followup review on FS’ corrective actions to our report 

on security controls over its aircraft and its air bases. 

In February 2003, we issued a report on the Animal and Plant Health Inspection Service’s 

(APHIS) border and port inspection programs. We concluded that APHIS needs a more 

effective systematic assessment of the risks involved with various pests and the pathways by 

which they can enter the United States. Many of APHIS’ inspection functions have since been 

transferred to the U.S. Department of Homeland Security. Nonetheless, APHIS continues to 

play a key role in this area, performing risk assessments related to pests and diseases that could 

threaten U.S. agriculture and the containment of any outbreaks. We also evaluated APHIS’ 

controls and procedures over the issuance and monitoring of permits to import and ship 

domestically regulated pathogens and other materials into the United States; these permits are 

issued to colleges and universities, public and private laboratories, and other users. In our March 

2003 report, we identified the need for greater accountability over permits and increased 

safeguards. Strengthened controls are needed to preclude or detect introduction of plant and 
49

animal pests and diseases, either inadvertently or intentionally, into the United States, and to 

minimize the risk to American agriculture. 

We have a number of ongoing reviews (that are continuing into FY 2004) evaluating the 

spectrum of USDA agencies’ homeland security initiatives and activities: (1) we performed a 

followup review evaluating the Department’s corrective actions to our review on controls over 

biohazardous agents; (2) we reviewed Departmental controls and procedures over chemicals and 

radioactive materials stored and used at USDA facilities; (3) we reviewed the Department’s 

controls and risk assessments over USDA-owned or -controlled agricultural commodity 

inventories, focusing on the actions taken by FSA and CCC to minimize the risk of such 

commodities and, thereto, the food and feed supply of the country; and (4) we continued our 

review of APHIS’ controls over pesticides, drugs, and other hazardous materials it uses in 

protecting agriculture from animal predators. In 2002, under the Defense Appropriations Act, 

Congress appropriated $328 million for USDA for security upgrades at its facilities and for other 

activities in response to the terrorist attack. We are currently preparing a report on this review 

evaluating the use of these additional funds. Lastly, in FY 2003, we conducted a number of 

reviews of IT security at USDA agencies. We continue to find that USDA agencies do not have 

adequate physical and logical access controls in place over their IT resources and that numerous 

vulnerabilities continue to be detected despite the Department’s purchase of a USDA-wide 

license for a commercially available vulnerability scanner product. 

AUDIT

OIG’s audit strategy in Homeland Security is to ensure that the Department and its agencies have 

established controls to meet the three objectives (as noted above): to identify and protect USDA 

assets, both physical and cyber-based; to prevent USDA assets from being used against the 

United States; and to preclude USDA program from being used to finance terrorism. 

For FY 2004, we plan to evaluate APHIS’ regulations governing the possession, use, and transfer 

of listed biological agents and toxins. We also plan to review USDA’s implementation of the 

provisions of the Bioterrorism Act of 2002 and its coordination with other Federal agencies. 

This audit strategy links most closely to USDA’s Strategic Goal 3, Objective 3.1, Reduce the 

Incidence of Food-borne Illnesses Related to Meat, Poultry, and Egg Products in the U.S.; and to 

Objective 3.2, Reduce the Number and Severity of Agricultural Pest and Disease Outbreaks. 

This strategy also links to Strategic Goal 5, Objective 5.1, Improve the President’s Healthy 

Forest Initiative and Other Actions to Improve Management of Public Lands; and to Objective 

5.2, Improve Management of Private Lands. 
50 

INVESTIGATIONS

We established a Biological Security Program to respond to intentional or catastrophic biological 

security threats to U.S. agriculture. Due to OIG’s knowledge of USDA programs, Investigations 

will coordinate its efforts with other local, State, and Federal law enforcement agencies in the 

event of a terrorist or catastrophic incident. 

OIG Special Agents continue to assist Joint Terrorism and Financial Task Forces throughout the 

United States in support of “Operation Green Quest.” Operation Green Quest is a national 

project ordered by the President in Executive Order 13224 to target money transfer businesses 

sending funds overseas to terrorist groups. Since September 11, 2001, OIG has opened a number 

of investigations related to homeland security. 
51

PROTECTING U.S. FOOD SUPPLY 

AND AGRICULTURE

Protecting the food supply and agriculture within the Department includes those activities 

designed to ensure that the food the consumer eats is safe and properly labeled and graded, and 

the Nation’s plant and animal resources are safeguarded. These activities are performed by the 

Food Safety and Inspection Service (FSIS); Agricultural Marketing Service (AMS); the 

aforementioned Animal and Plant Health Inspection Service (APHIS); and the Grain Inspection, 

Packers and Stockyards Administration (GIPSA). The activities include inspecting all domestic 

establishments that prepare meat and poultry products for sale or distribution; reviewing foreign 

inspection systems and establishments; inspecting and quarantining animals and plants at 

U.S. ports-of-entry; controlling agricultural losses caused by predatory animals; developing 

standards for licensing and testing veterinary biologics; establishing grading standards for eggs, 

tobacco, livestock, dairy products, poultry, fruits, vegetables, and grain; and performing 

weighing and inspection services to ensure the standards are met. The public depends on these 

agencies to ensure a safe food supply; farmers depend upon these agencies to protect agricultural 

resources and maintain consumer confidence in the market for their products. OIG’s response to 

protecting the food supply and agriculture encompasses 

• Investigating threats to spread foot-and-mouth disease, anthrax, and other animal and 

plant diseases. 

• Investigating product contamination and tampering. 

• Auditing information technology and cyber security. 

• Auditing programs designed to protect the U.S. food supply. 

• Investigating the smuggling of prohibited agricultural products. 

• Evaluating the security of biological agents and pathogens. 

• Investigating domestic acts of terrorism against USDA facilities and employees. 
52 

AUDIT 

Food safety and quality issues have received considerable attention over the last few years. In 

addition, increased foreign trade has become a key economic objective. Our strategy is to assess 

management control systems which ensure that the Department is effectively protecting both the 

consumer and the agricultural resources of the Nation. Our strategy focuses on the intensified 

activities in food safety to identify and implement new meat, poultry, and egg inspection 

technologies. 

During FY 2003 we completed audits of APHIS’ safeguards to prevent the entry of prohibited 

pests and diseases into the country and controls over the permits to import hazardous materials. 

We also focused on evaluating expenditures made under cooperative agreements for the Exotic 

Newcastle Disease Project, assessing Wildlife Service’s methodology to obtain aircraft for use in 

preventing livestock predation, and continuing a review of the Wildlife Service’s controls over 

hazardous material. 

In addition, our FY 2003 efforts included a followup on recommended actions identified in the 

Food Safety Initiative Meat and Poultry Products report, FSIS’ oversight of the Listeria outbreak 

in the Northeastern United States, and the initial equivalency process. We completed audits of 

FSIS’ imported meat and poultry reinspection processes, and oversight of the production process 

and recall at ConAgra. 

For FY 2004, we plan to audit controls over APHIS’ Emergency Pest Eradication and Control 

Programs and evaluate agency memoranda of understanding with the U.S. Department of 

Homeland Security. Under our ongoing Food Safety efforts we will audit FSIS’ food safety 

automated information systems and continue to monitor the implementation of the Hazard 

Analysis and Critical Control Points (HACCP) regulation along with evaluating very small meat 

and poultry establishments’ compliance with HACCP requirements. In addition, we will conduct 

work to review the Egg Processing Inspection activity. 

This audit strategy links most closely to USDA Strategic Goal 3, Objective 3.1, Reduce the 

Incidence of Food-borne Illnesses Related to Meat, Poultry, and Egg Products in the U.S.; and 

Objective 3.2, Reduce the Number and Severity of Agricultural Pest and Disease Outbreaks. 

INVESTIGATIONS

Investigations into criminal activity that threatens or impacts the health and safety of the 

agricultural sector and consumers remain our highest priority. We coordinate our efforts with 

the responsible regulatory agency to ensure corrective action is taken to protect the public. 

Food and Consumer Products - We continue to be concerned both about health and safety cases 

(i.e., those involving potential sale or movement in interstate commerce of uninspected or 

adulterated products, and those involving tampering with food products) and about economic 
53

impact cases. We intend to continue regular meetings with FSIS compliance officials to ensure 

the wholesomeness of meat products in U.S. commerce and conduct criminal investigations 

where indicated. 

Animal and Plant Health Protection - We expect some decrease in investigations in this area 

since APHIS Protection and Quarantine Officers have now been transferred to the 

U.S. Department of Homeland Security. However, we do expect to continue conducting 

investigations of smuggling and other criminal violations of law that could endanger the health 

and welfare of our citizens as well as our Nation’s agricultural economy. 

We estimate that our commitment of investigative resources to AMS, FSIS, APHIS, and GIPSA 

will be about 17 percent in FY 2004. 
54 

RISK MANAGEMENT

The risk management strategy encompasses a variety of Federal Crop Insurance Corporation 

(FCIC) programs administered by the Risk Management Agency (RMA). FCIC receives funds 

from four main sources: capital stock subscriptions from the U.S. Treasury, premium income 

from producers purchasing insurance policies, administrative fees paid by producers purchasing 

catastrophic risk protection insurance, and appropriations for Federal premium subsidies and 

operating expenses. The principal activities of RMA/FCIC included in this strategy are the 

administration and management of the various crop insurance programs established by Congress. 

These programs make crop insurance available to producers through private companies that 

RMA “reinsures.” The estimated insurance in force for the 2004 crop year is over $34 billion in 

risk protection on about 208 million acres, or about 77 percent of the Nation’s acres planted to 

principal crops. RMA’s premium income is estimated at $2.9 billion, of which $1.8 billion is in 

the form of premium subsidy, and the remaining $1.1 billion is producer-paid premiums. The 

major estimated FY 2004 program expenses are: $3.1 billion in indemnities; $643 million in 

delivery expenses; $77.3 million in Agricultural Risk Protection Act (ARPA) initiatives 

($2.8 million for improving program compliance and integrity, $40 million for research and 

development, $21 million for pilot programs, $10 million for education and risk management 

assistance, and $3.5 million for policy considerations and implementation); $370 million in 

underwriting gains; and $78 million in administrative and operating expenses. 

The above estimates include an estimated decrease of $67.8 million in administrative expense 

reimbursement from a proposal to reduce the reimbursement rate for crop insurance policies 

from 24.5 percent to 20.0 percent. 

AUDIT

Our strategy is designed to ensure overall program integrity, prevent and detect program/ 

insurance losses, provide a visible audit presence, ensure program objectives are being 

accomplished, and assist program managers to find solutions for known or potential program 

weaknesses. Emphasis on crop insurance programs is needed because of the significance of 

prior audit findings; the expansion (i.e., new types of insurance) and revision of major insurance 

programs; the reliance placed upon the Federal Crop Insurance Programs by Congress to be the 

“safety net” for American farmers; and the mandated changes under ARPA. 

Our FY 2003 audits continued to disclose problems with RMA’s administration of the FCIC 

programs in the areas of crop loss claims (preparation and loss adjustment), producers’ reporting 

of production, conflicts of interest within the reinsured companies and/or representatives, and 

establishment of a reliable quality control system. 
55

One of the initiatives under the President’s Management Agenda is to improve financial 

performance in Government programs. This initiative includes determining agencies’ efforts to 

determine and reduce erroneous payment rates, including actual and targeted rates, where 

available, for benefits and assistance programs over $2 billion. Major audits of RMA planned 

for FY 2004 include audits to assess the distribution of insurance policies by the insurance 

companies within the three insurance pools provided for within the Standard Reinsurance 

Agreement (SRA), the extent of improper payments made within the insurance programs, 

RMA’s renegotiation of its SRA with the insurance companies, and RMA’s implementation of 

significant selected ARPA provisions. 

This audit strategy links most closely to the USDA Strategic Goal 1, Objective 1.4, Provide Risk 

Management and Financial Tools to Farmers and Ranchers. 

INVESTIGATIONS

Our investigative strategy in risk management is to investigate apparent fraud involving Federal 

crop insurance programs and to continue working closely with the RMA risk compliance 

division to ensure the timely referral of matters of interest and to strengthen the effectiveness of 

the compliance unit. We expect to increase the number of investigations we conduct in this area 

in FY 2004, and anticipate devoting about 8 percent of our investigative resources to it. 
56 

GOVERNMENT PERFORMANCE AND

RESULTS ACT 

The Government Performance and Results Act (GPRA) of 1993 requires that all Federal 

departments and agencies establish performance measures that measure outcomes of their 

programs. USDA is one of the largest cabinet level departments and includes agencies that have 

very diverse missions. These missions include management of traditional farm programs, private 

lands conservation, domestic food assistance, agriculture research and education, agricultural 

marketing, international trade, meat and poultry inspection, forestry and rural development 

programs. Under GPRA, USDA and its agencies develop annual performance plans that 

establish performance goals and measures covering the fiscal year and provide direct linkages 

between USDA’s longer-term goals and the agencies’ day-to-day activities. USDA agencies 

prepare annual performance reports that are incorporated into the Department’s annual 

Performance and Accountability Report. 

In September 2002, USDA issued its revised strategic plan that had five goals with various 

strategic objectives related to the Department’s important mission areas. As noted on page 12 of 

this annual plan, the goals include: 

• Goal 1: Enhance Economic Opportunities for Agricultural Producers. 

• Goal 2: Support Increased Economic Opportunities and Improved Quality of Life in 

Rural America. 

• Goal 3: Enhance Protection and Safety of the Nation’s Agriculture and Food Supply. 

• Goal 4: Improve the Nation’s Nutrition and Health. 

• Goal 5: Protect and Enhance the Nation’s Natural Resource Base and Environment. 

The strategic goals have a number of performance goals that must be met before the Department 

accomplishes them. GAO has issued two reports that evaluated USDA’s progress in 

accomplishing its established program outcomes. Based on its review of USDA’s FY 2000 

performance report and its FY 2002 performance plan, GAO concluded that USDA still needed 

to take additional actions on its established program outcomes. However, GAO concluded that 

USDA had made some improvements over its FY 1999 performance report and FY 2001 

performance plan. The FY 2002 performance plan, as stated by GAO, “presented USDA as a 

single department with clear missions, rather than a collection of separate agencies with a 

diversity of loosely related roles.” 
57

AUDIT

In FY 2000, we issued an audit report that reviewed the Forest Service’s (FS) Implementation of 

GPRA. Our review found that FS’ FY 1999 annual performance report was based on flawed 

data and assumptions to the extent that the report did not provide reliable information about 

actual performance or the agency’s progress in meeting its goals and objectives. In addition, we 

found that internal controls over performance measures were inadequate as designed and 

implemented. FS has no way of reviewing and correcting improper reporting of performance 

accomplishments submitted by its field units. We recommended that FS develop and implement 

a comprehensive strategy to ensure the collection and reporting of accurate, complete, and 

meaningful performance data. Our audit of FS’ FY 2000 Financial Statements found that it had 

developed a comprehensive strategy to collect and report accurate, complete, and meaningful 

performance measures but had not fully implemented procedures. 

In FY 2001, we issued an audit report that reviewed Rural Development’s (RD) implementation 

of GPRA. Our review found that performance data contained in RD’s FY 1999 Annual 

Performance Report was inaccurate or unsupported and targets established were not always 

documented, resulting in a report that was of little or no utility. In addition, we found RD 

included performance measures that were not relevant to its mission goals and, therefore, those 

measures did not provide meaningful information for assessing performance. We recommended 

RD develop procedures to implement GPRA that include processes that ensure collecting and 

reporting of accurate, complete, and meaningful performance data. RD agreed with our 

recommendations and stated that it would establish a GPRA committee to document and 

implement a comprehensive strategy to ensure the collection and reporting of accurate, complete, 

and meaningful performance data. 

In FY 2002, we also issued an audit report that reviewed the implementation of GPRA in the 

FSA. Our review found that FSA’s performance measures need to be improved to show what 

progress is being made in achieving its strategic goals. OIG found that 18 of 21 performance 

measures were output oriented (expressed in terms of a quantitative result), rather than outcome 

oriented (expressed in terms of a program result), which is preferred under GPRA to assess the 

benefit of a program activity. We reported three errors in reported results for performance 

measures. Our report recommended that FSA develop performance measures that are outcome 

oriented, linked to the achievement of its long-term goals, and for which results reported would 

indicate the degree to which the long-term goals are being met. We also recommended that FSA 

implement written procedures to ensure internal controls over the collection, calculation, and 

reporting of performance plans are in place and operating. FSA agreed with our 

recommendations and has initiated corrective actions. 

In FY 2003, we undertook a review of USDA’s Departmentwide GPRA planning and reporting. 

The objectives of the review were to: (1) evaluate the system of controls over Departmental 

performance planning and reporting for GPRA; (2) assess the development of performance 

measures and reporting the applicable results to determine if they support the Department’s 

strategic goals and gauge the extent to which those goals are being achieved; (3) evaluate the 
58 

source and support for results reported by the Department; (4) evaluate the controls in place to 

ensure the validity and verifiability of reported performance data; (5) assess the implementation 

of budget and performance integration (BPI); and (6) assess performance in key programmatic 

areas of significance to the budget-making process. 

For FY 2004, our audit strategy will use a significant amount of OIG audit resources to review 

USDA’s and its agencies’ implementation of GPRA. All financial statement and performance 

audits will include procedures to review the internal controls over the audited agencies’ 

collecting and reporting of their performance data. In FY 2004, we will review how the 

Department has implemented the integration of performance measures within the budget. The 

review will 

• Evaluate the systems of controls over Departmental planning for its BPI. 

• Assess the development of full costs associated with program performance. 

• Evaluate the controls in place to ensure the validity and verifiability of reported data. 

• Determine whether program managers are using budget and performance data to more 

effectively and efficiently manage their programs. 

Our review of the BPI process will provide information as to how the Department plans to use 

funds to meet its strategic goals and objectives. 

This portion of our audit strategy has some connection (depending on the particular performance 

measures being assessed) to all of the Department’s strategic goals and objectives. Our audit 

work in this area will provide a means of assessing how well the Department is progressing in its 

implementation of BPI. It will also provide an indication of the quality of USDA’s reporting on 

its progress toward meeting the aforementioned strategic goals and objectives. In addition, we 

will continue our reviews of individual agencies’ actions to implement GPRA by assessing the 

Agricultural Research Service and conducting a followup audit of the Forest Service. 

Our audit strategy links most closely to the President’s Management Agenda and USDA’s 

initiatives on budget and performance integration and on human capital management. 
59

ACCOUNTING AND

FINANCIAL MANAGEMENT 

The Chief Financial Officers (CFO) Act of 1990 designated USDA as part of the pilot program 

to prepare and audit financial statements, which began with the FY 1990 statements. The 

Government Management Reform Act of 1994 further defined the CFO Act requirements for 

agencies to submit audited financial statements to the Office of Management and Budget (OMB). 

Financial statements are now being prepared each year covering all Departmental activities, 

including all revolving and trust funds and programs that perform substantial commercial 

functions. 

 

The President’s Management Agenda has placed emphasis on improving financial management 

in all Federal departments, not just USDA. According to OMB, USDA is the second largest 

component of the Federal Government’s Consolidated Balance Sheet. The Department and its 

agencies have made significant improvements to their financial systems. These improvements 

allowed USDA to achieve its first unqualified opinion on the FY 2002 Consolidated Financial 

Statements. While the achievement of a qualified opinion represents a major accomplishment, 

USDA must continue to improve financial management systems to correct internal control 

deficiencies and other system weaknesses, as well as ensure compliance with laws and 

regulations. Uncorrected system weaknesses could negatively impact the Department’s ability to 

achieve a subsequent unqualified opinion, especially in light of the accelerated timeframes put in 

place by the Office of the Chief Financial Officer (OCFO) for FY 2003. 

In its FY 2002 financial statements, the Department reported net assets of over $123 billion and 

total liabilities of approximately $113 billion. In addition to the reported assets, the Department 

is responsible for over 192 million acres in stewardship land. Other account balances in the 

FY 2002 financial statements included over $75 billion in net loans receivable and 

approximately $76 billion in long-term debt owed by USDA. Financial management systems 

maintained by the Department are used to process all transactions for USDA. These systems 

also provide financial reports to agency managers as well as to non-departmental entities. The 

systems are maintained on large-scale computers at either the National Information Technology 

Center (NITC) or the National Finance Center (NFC). 

AUDIT

Our audit strategy encompasses the Department’s financial statements, as well as the financial 

management systems and the responsibilities of the OCFO. OCFO provides leadership, 

expertise, coordination, and evaluation in the development of Departmental and agency 
60 

programs in financial management, accounting, Federal assistance, and performance 

measurements. OCFO also provides, through NFC, central accounting and/or administrative 

services for all USDA agencies and about 86 other Federal agencies/bureaus outside USDA. 

In FY 2003, we performed audits or provided oversight of audits of the FY 2002 financial 

statements for CCC, FCIC, FNS, FS, and the RD mission area, including the Rural Telephone 

Bank (RTB), as well as the FY 2002 consolidated USDA financial statements. All entities 

received an unqualified opinion. An audit of the FY 2001 balance sheet for the Department’s 

working capital fund was also completed under contract. An unqualified opinion was issued 

within this abbreviated scope. 

In FY 2004, we plan to audit the FY 2003 financial statements for CCC, FCIC, FNS, FS, and the 

RD mission area, including RTB, as well as the consolidated USDA financial statements. We 

will continue to audit NITC’s General Controls, review NFC’s internal control structure, and 

monitor USDA’s implementation of a cost accounting system. FS and CCC contracted with a 

large CPA firm to conduct their FY 2002 financial statement audits. These contracts have 

subsequent option years that were exercised for the FY 2003 audits. We serve as the Contracting 

Officer’s Technical Representative and monitor and review all audit work performed by the firm. 

FNS and the RD mission area plan to contract their FY 2004 financial statement audits. 

In addition to financial statement audits, the strategy also encompasses USDA’s implementation 

of the Improper Payments Information Act of 2002. The Act requires the head of each Federal 

agency with estimated improper payments in excess of $10 million to report on actions taken to 

reduce them. OMB defines improper payments as payments that should have not been made or 

that were made in incorrect amounts under statutory, contractual, administrative, or other legally 

applicable requirements. In FY 2003, we initiated a review of FNS’ adherence to OMB 

requirements regarding improper payments in the FSP, WIC and NSLP. 

In FY 2004, we will examine the myriad of USDA payment programs and develop an approach 

that will determine if USDA has controls in place to identify and prevent improper payments. 

For example, we will examine RMA’s error rate over crop insurance claims and conduct an audit 

of the use of purchase cards in USDA. In addition, we will review the implementation of the 

new law from the Departmental perspective. Our audit efforts should help determine if USDA’s 

financial systems provide accurate and timely information to the Department’s management. 

These efforts should also determine if USDA has taken adequate actions to reduce improper 

payments made by its programs. 

This portion of our audit strategy has some connection (depending on the particular performance 

measures being assessed) to all of the Department’s strategic goals and objectives. Department 

managers must have access to timely financial and operating information in order to make 

program decisions, protect USDA assets, and conserve scarce budget resources. 

This audit strategy links most closely to the President’s Management Agenda and USDA’s 

initiatives on improved financial management and on budget and performance integration. 
61

INFORMATION TECHNOLOGY/SECURITY

Information technology (IT) is critical to the delivery of USDA’s programs. The use of the 

Web-based technology, commonly referred to as electronic-Government (or E-GOV), offers the 

Department the opportunity to improve the processes it uses to conduct business and achieve its 

mission objectives. The Department currently uses the Internet for program delivery including 

sharing of trade information, signup procedures, and outreach activities. Additional E-GOV 

initiatives remain under development. As technology has enhanced the ability to share 

information instantaneously among computers and networks, it has made organizations more 

vulnerable. The Department’s mission critical information systems and networks are now exposed 

to an unprecedented level of risk including equipment failures, human errors, physical and 

electronic cyber attacks. The Department has established a Departmentwide security program; 

however, it has not reached its goal of adequately securing the Department’s critical resources. 

Congress and the President continue to emphasize making Government services available via 

Web-based technology. The Government Paperwork Elimination Act (P.L. 105-277) directs 

OMB to develop procedures to provide for (1) the option of electronic submission, maintenance, 

and disclosure of information, and (2) the use and acceptance of electronic signatures. The 

Freedom to e-File Act (P.L. 106-222) requires USDA to establish an electronic filing and 

retrieval system to enable farmers to file various forms. The President’s Management Agenda 

and Performance Plan for FY 2002 identified electronic government as one of five 

Governmentwide initiatives. 

Congress recognizes the Government will need to protect the confidentiality, integrity, and 

availability of information in a networked environment. The Federal Information Security 

Management Act (FISMA) (P.L. 106-398) provides a framework for Federal agencies to make 

information systems more secure. Among other features, the legislation requires each 

Government agency to implement a computer security plan, undergo an annual information 

security audit, report intrusions, and train workers in security awareness. 

The Chief Information Officer (CIO) has overall responsibility for establishing Departmental 

security policy and ensuring the Department’s IT management is consistent with security 

requirements standards. However, each USDA agency remains responsible for managing its 

own security operations. In August 1999, the CIO issued “An Action Plan to Strengthen USDA 

Information Security,” which identified weaknesses and made recommendations for improving 

the IT security of the Department. The CIO is addressing the issues identified in the plan, but 

additional work is needed. 
62 

The major issues surrounding USDA’s IT activities include the use of Web-based technology, 

the adequacy of security and control over IT systems and resources, and the lack of integration of 

many disparate systems. Of current major significance in USDA are 

• IT security as the Department implements Web-based technologies to deliver services 

and operate the Department’s programs. 

• Migration and conversion of data and operations from existing legacy systems to new 

Web-based systems. 

• Business reengineering initiatives to ensure the Department has adequately modified its 

processes to assure it can adequately deliver its services in an electronic environment. 

• Implementation of the Corporate Administrative Strategy, which seeks to eliminate and 

consolidate legacy accounting, procurement, payroll, and human resources systems. 

• Capital planning and investment control requirements from the Clinger-Cohen Act 

through guidance issued by OMB. 

• Management and control over information placed on the Department’s Web sites to 

ensure that no information is posted that could assist in the production of weapons of 

mass destruction, or endanger USDA employees, property, or the public. 

AUDIT 

This strategy highlights USDA’s increasing reliance upon Web-based technology to deliver and 

manage its operations, the significant investment in and use of automated resources, the 

importance of careful planning to ensure that the resources acquired are needed and prudently 

obtained, and the importance of designing and implementing effective security and control 

measures. 

In FY 2002, we completed (1) audits of the IT security programs, including access, physical, and 

network controls at several USDA agencies; (2) an evaluation of the Department’s overall 

information security program as required by the Government Information Security Reform Act 

GISRA (now known as FISMA); and (3) reviews of NFC and NITC general controls including 

selected aspects of automated data processing security. We reported that the Department and 

most component agencies have not assessed the risks to their systems and established mitigation 

plans. Further, the agencies have not prepared and/or tested contingency and business continuity 

plans. We used commercial, off-the-shelf software products to assess selected USDA network 

components. Our scans disclosed a large number of potential vulnerabilities that could be 

exploited from within the Department’s networks and from the Internet. We determined that the 

agencies have not established adequate physical and logical access controls to ensure that only 

authorized users can access critical agency data. We continued to monitor the development and 
63

implementation of the Department’s new financial system, the Foundation Financial Information 

System. 

In FY 2003, we conducted General Controls reviews at NFC and NITC. We issued qualified 

opinions at both entities, though we noted improvements at the sites. 

In FY 2004, we will perform a review of the NITC’s General Controls, to assess whether general 

controls are in place and operating effectively. We will also perform a review of security over 

USDA IT resources as is mandated by the FISMA. Currently, E-GOV initiatives are in place in 

20 USDA programs. We will be performing a review of these initiatives to evaluate the security 

controls in place, and to assess whether data integrity and confidentiality may be compromised. 

We will be performing a review of application controls on critical USDA systems to determine 

whether there is an effective level of security built in to protect data integrity and confidentiality. 

We will also be performing a review to evaluate security controls and the overall management of 

IT assets at select agencies. Prior audits have identified significant weaknesses in physical and 

logical access controls, and a lack of adequate system documentation and contingency planning. 

This audit strategy relates to all USDA Strategic Goals and objectives. IT resources provide key 

data to Government managers for decision-making and secure public access for electronic 

government. Our audits will provide necessary information on the security of these IT resources. 

This audit strategy links most closely to the President’s Management Agenda and USDA’s 

initiative to expanded electronic government as it relates to our planned audit of USDA’s 

E-GOV efforts; and to the initiative on improved financial management in so far as our audit 

efforts help ensure the delivery of secure, accurate financial information to management. 

INVESTIGATIONS

We are very concerned about unauthorized access to Departmental computer systems and data. 

The CIO, as the Departmental agency responsible for collecting information regarding computer 

intrusions, refers these violations to OIG. In FY 2004, we will continue to investigate intrusions 

where warranted. 

In recognition of the major role computers play in all aspects of Departmental operations and the 

integral need to be able to thoroughly and reliably conduct comprehensive and reliable analyses 

of computers and computer files, Investigations established a Computer Forensics Unit (CFU). 

CFU information technology experts provide assistance in investigations throughout the country 

in which electronic evidence must be secured and preserved for possible use in judicial 

proceedings. They also represent Investigations in agency planning activities involving future 

information technology needs, including those that pertain to progress in E-GOV initiatives. In 

FY 2004, we expect to further equip CFU staff to enable them to expeditiously perform their 

duties. 
64 

RURAL DEVELOPMENT

USDA’s Rural Development (RD) enhances rural communities’ ability to improve their quality 

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

of greatest potential. The three agencies under the RD mission area are the Rural BusinessCooperative Service (RBS), the Rural Housing Service (RHS), and the Rural Utilities Service 

(RUS). RD’s direct and guaranteed loan portfolios totaled over $81 billion as of September 30, 

2002. Funding for RD programs totaled $13.7 billion in FY 2002, $13.4 billion in FY 2003 

(estimated), and is targeted for $11.9 billion in FY 2004. 

RBS provides leadership in building competitive businesses including sustainable cooperatives 

that can prosper in the global marketplace. Through direct, intermediary, or guaranteed loans 

and grants, RBS invests in existing and start-up businesses and provides technical assistance to 

establish strategic alliances and partnerships, which leverage public, private, and cooperative 

resources to create jobs and stimulate rural economic activity. RBS provides technical assistance 

to existing or planned cooperatives, conducts research, and produces information to market and 

distribute agricultural products. 

RHS provides credit assistance primarily through direct and guaranteed loans for housing 

programs, both single and multi-family. RHS also funds community facilities to build and 

improve other types of essential public services such as health care facilities, schools and 

libraries, child and adult day care centers, community centers, transportation services, and fire 

and police stations. RHS provides to borrowers (who have the minimum required number of low 

and moderate-income families) interest credit subsidies that lower rents to tenants. RHS 

provides additional housing subsidies to borrowers with low and moderate-income in the form of 

rental assistance, lowering further tenant rental costs. 

RUS makes direct and guaranteed loans to nonprofit associations, public bodies, for-profit 

entities, and rural cooperatives to finance construction of distribution lines and systems in rural 

areas for electric, telecommunications, and water and waste facilities. RUS awards grants to 

schools, libraries, hospitals, and medical facilities for distance learning and telemedicine and for 

the improvement and management of water resources and waste disposal systems. RUS also has 

begun loan and grant funding to bring high-speed broadband Internet services to rural areas. 

RUS received $80 million in FY 2002 funding and an additional $80 million in FY 2003. Then 

the 2002 FSRIA provided the program another $1.4 billion in FY 2003 to enhance rural area 

access to broadband services. 
65

AUDIT 

In FY 2003, many of OIG’s resources were focused to ensure the integrity of homeland security, 

including reviews of physical assets such as generation and transmission of cooperative electrical 

assets, rural water systems, communication channels, and Web site security. Where appropriate, 

we shared concerns with agency personnel. 

During FY 2003, OIG focused audit resources on management controls and program delivery. 

We completed our nationwide review of RBS’ Business and Industry (B&I) guaranteed and 

direct loan programs. We questioned $58 million of the $125 million in guaranteed loan funds 

that we reviewed. The questioned costs are attributed to inappropriate appraisal methods, 

inadequate lender assessments of borrower financial conditions, and lender negligence and 

misrepresentation. In addition, RD did not always verify that lenders complied with agency 

requirements prior to honoring the loan guarantees. 

We also found that RD’s annual performance plan reports inaccurately depicted the number of 

jobs created and saved by the B&I program. RD reported jobs that are planned to be created or 

saved, not the number of jobs that were actually created or saved. 

We found weaknesses in the controls of the direct B&I program for loan-making including 

deficient collateral appraisals and failure to verify legal documents. We did not make any 

recommendations for the direct loan-making program because it was not funded in FYs 2002 and 

2003, and there are no plans for FY 2004 funding. For the B&I direct loan-servicing area we 

found that RD lacked effective measures to enforce borrower compliance to agency 

requirements. For example, we found that almost 40 percent of the borrowers in our review had 

not submitted current financial statements. These are critical documents because the agency 

needs to assess, monitor, and take corrective actions on the borrower’s financial health and their 

ability to continue in a successful business. We are working with RD to develop and implement 

nationwide corrective actions. 

In FY 2003, we also reviewed RHS’ Multi Family Housing (MFH) program. We tested whether 

tenants living in MFH’s Rural Rental Housing (RRH) projects in Florida were receiving the 

correct amount of rental subsidies. In FY 2002, we found errors in 20 percent of Florida’s 

14,705 rental units and statistically projected that tenants received over $4.4 million in excessive 

rental assistance. This occurred because tenants did not report their true incomes or changes to 

their incomes. Also, RD and RRH project managers did not have or adequately use an 

independent source or process to verify tenant incomes, such as wage matching. 

During FY 2003, OIG reviewed and commented on major regulatory revisions to RHS’ MFH 

program, entitled “Proposed Rule 7 [Code of Federal Regulations] CFR 3560, Streamlining and 

Consolidation of the Sections 514, 515, 516 and 521 Multi-Family Housing Programs.” The 

proposed rule consolidates 13 regulations, reduces the CFR by 90 percent, and attempts to 

address previous OIG recommendations to the MFH program. Our review found that the 

proposed rule adequately addressed 5 of 19 open recommendations dating back to 1993. We are 
66 

working with RHS and reviewing the supplemental Handbooks to the proposed rule to fully 

assess RHS’ proposed resolution of the remaining recommendations. We will coordinate our 

assessment of the proposed rule and Handbooks with the audit work that is planned in the MFH 

program for FY 2004. 

In prioritizing the work to be performed during FY 2004, we will continue our focus on areas 

that have historically been “high risk” and will add coverage to monitor the effects of major 

shifts in program policy, large dollar increases in appropriations and program levels, and new 

programs. 

For FY 2003 and 2004, we will continue to review the RHS MFH program. We plan to audit 

RHS’ management operations of the MFH program to identify unauthorized, ineligible, or 

fictitious project expenses, particularly those that involve identity-of-interest companies. We 

also plan to audit RRH construction and rehabilitation costs to ensure that the costs were actually 

incurred and were for authorized purposes. Both audits follow up on previous nationwide 

reviews of the MFH program. 

More work is scheduled for the MFH program involving expansion of the RRH tenant 

certification audit in Florida to a nationwide review of the accuracy and eligibility of RRH tenant 

subsidies. Our reviews of the MFH program should utilize our increasing expertise with RHS’ 

database systems to identify potential problems and trends that may indicate fraud, waste, or 

abuse. 

We also plan to initiate a review of RHS’ servicing of its Single Family Housing Program and 

accuracy of borrowers accounts, which is conducted at the Centralized Servicing Center (CSC) 

in St. Louis, Missouri. The reviews will include an assessment of CSC’s servicing actions 

including escrow accounts, bankruptcies, foreclosures/real estate only inventories, assumptions, 

moratoriums, interest credit/payment assistance agreements, and graduations to private lenders 

and how the automated systems support these functions. We also plan to determine whether 

there is any pattern or substance to the numerous complaints received by the Hotline concerning 

allegations of inaccuracies and improprieties involving CSC servicing actions. 

This audit strategy links most closely to USDA Strategic Goal 2, Objective 2.1, Expand 

Economic Opportunities Through USDA Financing of Businesses; and Objective 2.2, Improve 

the Quality of Life Through USDA Financing of Quality Housing, Modern Utilities, and Needed 

Community Facilities. 

INVESTIGATIONS

We continue to investigate allegations of fraud in RHS’ single-family housing and RRH 

programs. Single-family housing fraud typically involves the borrower’s failure to accurately 

report household income, or composition, or both. RRH fraud investigations primarily involve 

housing project managers’ theft or misuse of funds from reserve accounts, falsification of records 

of tenants or occupancy, and “layering” of management functions and costs in order to siphon off 
67

money without justification and for personal gain. RBS investigations most frequently involve 

falsified applications for loans, including false appraisals of collateral, and misuse of loan 

proceeds for unauthorized purposes. 

During FY 2004, we expect the number of investigations into RHS, RBS, and RUS program 

fraud to remain at about the same level as in FY 2003. We will expend about 9 percent of our 

investigative resources on RD programs. 
68 

MANAGEMENT/CONTROL OF 

 ENVIRONMENTAL HAZARDS

This strategy brings together a wide range of agency programs and operations under a general 

concern for the protection of the environment and the abatement of any environmental hazards 

that result from practices in agriculture and forestry. Agricultural production is considered to be 

a major contributor to the Nation’s pollution problems. The Department has adopted a 

comprehensive policy that guides efforts for correcting these problems and reducing future 

environmental damage from farming and forestry. 

Agencies of the Federal Government are required to identify and remedy their noncompliance 

with Federal, State, and local standards for environmental quality. Noncompliance could include 

pollution from noise, the use of pesticides and chemicals, and toxic and radioactive wastes. 

USDA operates over 21,000 buildings at more than 15,000 locations and controls nearly 

193 million acres of land. Violations of Federal or State standards at Government-owned or 

-operated facilities subject agencies to legal and administrative actions which may result in the 

criminal prosecution of Federal employees, the loss of program funds, or delayed projects. 

USDA works with the U.S. Environmental Protection Agency to schedule problem areas for 

remedial action. These plans are coordinated and presented as a single funding item under the 

budget for Departmental Administration. Major areas of funding are associated with actions to 

prevent and remedy environmental damage from active and abandoned mines on the public lands 

that are under the stewardship of USDA. Other pollution abatement and prevention issues are 

conducted through the program efforts of numerous agencies. Among the responsibilities of 

these agencies is the assurance that environmental program funds and activities are distributed 

without discrimination due to race or income. 

USDA’s management and control of environmental hazards is coordinated through the 

Hazardous Materials Management Program, which provides for the efficient management and 

cleanup of hazardous materials on facilities and lands under the jurisdiction, custody, and control 

of the Department and prevention of releases of hazardous substances from USDA facilities. 

The program is funded, at approximately $16 million, through a central appropriation and agency 

funds. 

 AUDIT 

Our strategy is to review the Department’s controls for assessing environmental liabilities prior 

to the acquisition or disposal of land. We will review the application of the requirements of 
69

agencies’ land transactions (sales, trades, or other conveyances), and examine the adverse impact 

from inadequate, negligent, or false certifications of hazardous environmental conditions. 

In FY 2004 we plan to audit the management controls over assessing environmental liabilities 

prior to the acquisition or disposal of land. This activity will include a review of agencies’ land 

transactions including sales, trades, and other conveyances. We will also examine the adverse 

impact resulting from any inadequate, negligent, or false certifications of hazardous 

environmental conditions. 

This audit strategy links most closely to USDA Strategic Goal 5, Objective 5.1, Implement the 

President’s Healthy Forest Initiative and Other Actions to Improve Management of Public 

Lands; and Objective 5.2, Improve Management of Private Lands. 
70 

PROGRAM COMPLIANCE,

ECONOMY, AND EFFICIENCY 

The Program Compliance, Economy, and Efficiency strategy incorporates all programs and 

activities not included in other strategic areas. It includes special requests; audit followup; 

developmental audits; single audits of States, local governments, and nonprofit organizations; 

and the quality of audits performed by non-Federal auditors. 

AUDIT

During any year, issues develop which we cannot anticipate during the planning process. These 

issues usually develop from Secretarial, agency, congressional, or OIG concerns regarding fraud, 

waste, or abuse. In order to respond to these concerns, OIG reserves time for any unanticipated 

requests. 

We also set aside time in our plan to monitor the management decisions made for audit 

recommendations presented in our audit reports. The purpose of management decisions is to 

ensure that the auditee and OIG agree on the actions to be taken to correct deficiencies. Once 

OIG agrees with the management decision, management is responsible for implementing final 

actions. Final actions are monitored and tracked by OCFO. 

Our FY 2004 plan includes time for ensuring the quality of audits performed by non-Federal 

auditors in accordance with OMB Circular A-133, as well as those submitted to USDA agencies 

under program-specific requirements. When substandard audit work is identified, we refer the 

independent auditor to the State Board of Licensing Authorities and the American Institute of 

Certified Public Accountants. 

This strategy has some connection (depending on the particular performance measures being 

assessed) to all of the Department’s strategic goals and objectives. 
71

APPENDIX II 

MAJOR AUDITS PLANNED FOR

FISCAL YEAR 2004 

Below are brief descriptions of major audits and initiatives planned for FY 2004. A complete 

listing of audits planned for the upcoming year is provided in appendix III. 

NATURAL RESOURCES AND ENVIRONMENT

Forest Service (FS)

TITLE: Implementation of the Healthy Forests Initiative 

OBJECTIVE(S): Determine if FS is effectively implementing the Healthy Forests Initiative 

and has adequate controls to ensure funds are spent in accordance with 

enabling legislation. 

TITLE: Controls Over Forest Service Pilot Certifications 

OBJECTIVE(S): Determine if FS has adequate controls to ensure that pilots flying agency 

and contracted aircraft are qualified and do not pose a security risk. 

TITLE: Monitoring the Audit of Forest Service’s FY 2003 Financial Statements 

 Monitoring the Audit of Forest Service’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if FS’ financial statements are presented fairly in all material 

respects in accordance with applicable accounting principles, if internal 

accounting controls are adequate, and if FS complies with applicable laws 

and regulations. (FS contracted for the FY 2003 audit to a large CPA 

firm, and the audit will remain contracted for FY 2004.) 

TITLE: National Fire Management Analysis System 

OBJECTIVE(S): Determine the adequacy of controls over access to and modification of the 

national fire management analysis system software and data. 
72 

TITLE: Forest Service Implementation of the Government Performance and 

Results Act 

OBJECTIVE(S): Evaluate the FS’ implementation of GPRA by assessing the effectiveness 

of the process for establishing performance goals and objectives; 

evaluating internal controls over performance measurement and reporting; 

and assessing the validity and verifiability of reported accomplishments. 

TITLE: Forest Service Stewardship Contracting Pilot Project 

OBJECTIVE(S): Determine if FS controls governing stewardship contracts are adequate. 

TITLE: National Fire Plan Operations and Reporting System 

OBJECTIVE(S): Determine whether controls are adequate to ensure the completeness, 

accuracy, and reliability of the data entered into the National Fire Plan 

operations and reporting system. 

TITLE: National Fire Plan Contracting Process 

OBJECTIVE(S): Identify potential problems and audit issues of FS’ approximately 

$244 million of contracting relating to the National Fire Plan. 

TITLE: National Fire Plan Large Fire Suppression Costs 

OBJECTIVE(S): Determine if FS has effectively controlled, accounted for, and reported 

large fire costs. Emergency fire costs have grown to exceed $1 billion per 

year. External and internal reviews have identified numerous problems in 

large fire costs. 

TITLE: National Fire Plan Cache Accountability 

OBJECTIVE(S): Perform a preliminary assessment of controls governing procurement, 

maintenance, and security of material and supplies at FS fire caches at 

both national and local facilities. 

Natural Resources Conservation Service 

TITLE: Controls Over Technical Service Providers 

OBJECTIVE(S): Evaluate controls exercised over the designation of individuals and entities 

as technical service providers (TSP) through self-certification by the 

applicant and through recommending organizations. Evaluate the controls 

over the measurement and accountability system that measures and 
73

monitors the use and performance of TSPs and the cost incurred to install 

the conservation practices based on not-to-exceed rates. 

TITLE: Wetland Reserve Program - Implementation of Conservation Practices 

OBJECTIVE(S): Assess NRCS’ implementation and monitoring of the wetland reserve 

program conservation practices. 

FARM AND FOREIGN AGRICULTURAL SERVICES

Commodity Credit Corporation (CCC)

TITLE: Monitoring the Audit of CCC’s FY 2003 Financial Statement 

 Monitoring the Audit of CCC’s FY 2004 Financial Statement 

OBJECTIVE(S): Determine if CCC’s financial statements are presented fairly in all 

material respects in accordance with applicable accounting principles, if 

internal accounting controls are adequate, and if CCC complies with 

applicable laws and regulations. (CCC has contracted the FY 2003 audit 

to a large CPA firm, and it will remain contracted for FY 2004.) 

Foreign Agricultural Service (FAS)

TITLE: International Trade Policies and Procedures 

OBJECTIVE(S): Followup on prior FAS procedures and controls over trade agreement 

monitoring process. Assess FAS regulatory procedures as management 

control: the role of foreign posts in the monitoring process, the 

availability of archive of trade agreements to the public as a resource, and 

other issues. 

TITLE: FAS Market Development Programs 

OBJECTIVE(S): Determine whether funds provided for market development programs 

were properly expended. Determine whether FAS accomplished program 

objectives through reimbursements and cost share agreements with various 

trade organizations with the $120 million it invested in market 

development programs. 
74 

TITLE: Oversight of Private Voluntary Organizations (PVO) Operations 

OBJECTIVE(S): Follow-up of a prior audit of FAS PVO grant fund accountability for Food 

for Progress and Global food for Education 416(b) Programs. Determine 

if the prior report recommendations were implemented. Identify and test 

FAS controls designed to ensure that PVOs use commodities and funds 

provided for direct distribution and monetization programs in accordance 

with program objectives. 

Farm Service Agency (FSA)

TITLE: Minority Participation in FSA’s Farm Loan Programs 

OBJECTIVE(S): Determine if actions taken by FSA and the Department have a positive 

effect on minority participation in FSA farm loan programs (i.e., reduce 

number of complaints, compatible loan application processing time for all 

groups, targeting resources/outreach to minority groups, improved loan 

servicing for minority groups). 

TITLE: Milk Income Loss Contract (MILC) Program 

OBJECTIVE(S): Evaluate the system of internal controls to ensure, nationwide, that MILC 

payments are properly calculated and issued to eligible dairy producers for 

eligible production not exceeding the established production cap per 

“dairy operation.” 

TITLE: FSA Compliance Activities 

OBJECTIVE(S): Evaluate the coordination, effectiveness, and efficiency of FSA’s various 

systems of internal reviews, e.g., program compliance spot checks, County 

Operations Review Program comprehensive and target reviews, National 

Internal Reviews of the farm loan programs, etc. 

TITLE: FSA Improper Payments – Finality Rule and Misaction/Misinformation 

OBJECTIVE(S): Determine whether controls are in place and functioning to ensure FSA 

properly identifies and reports improper payments resulting from the 

application of agency waiver authorities including the Finality Rule and 

Misaction/Misinformation provisions. 
75

TITLE: End-of-Year Payment Limitation Reviews (EOYR) 

OBJECTIVE(S): Determine whether FSA EOYRs are adequate to detect errors and 

irregularities and determine whether FSA consistently conducts and 

adequately documents EOYRs nationwide. 

Risk Management Agency (RMA)

TITLE: Evaluation of Pool Distribution of Policies by Insurance Companies 

OBJECTIVE(S): Determine if reinsurance companies are using the pools (i.e., assigned 

risk) to enable them to provide coverage to producers with poor farming 

practices rather than make a determination poor farming practices are 

being followed. Determine if reinsurance companies are able to reassign 

policies from the commercial pool to either the developmental or assigned 

risk pool once it has been determined the producer has a loss, or if no loss 

occurs. 

TITLE: Monitoring the Audit of FCIC’s FY 2003 Financial Statements 

 Monitoring the Audit of FCIC’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if FCIC’s financial statements are presented fairly in all 

material respects in accordance with applicable accounting principles, if 

internal accounting controls are adequate, and if FCIC complies with laws 

and regulations. (OIG has contracted the FY 2003 FCIC Financial 

Statement Audit, and it will remain contracted in FY 2004.) 

TITLE: RMA Error Rate 

OBJECTIVE(S): Perform a statistical sample review of the 2002 crop insurance year 

claims. This review would be performed to establish an error rate for 

reinsurance company operations. Audit of the 2000 disaster program and 

prior audits of crop insurance indemnities have shown an error rate of 

about 10 percent. This would be a nationwide statistical sample to 

establish an error rate that would be the baseline for the propriety of 

reinsured company compliance with Manual 14 compliance. 

TITLE: Monitoring of RMA Renegotiation of the Standard Reinsurance 

Agreement (SRA) 

OBJECTIVE(S): Assess RMA actions for SRA renegotiation to ensure congressional intent 

for crop insurance is fully supported by the new SRA. 
76 

TITLE: Implementation of Significant Selected Agricultural Risk Protection Act 

(ARPA) Provisions 

OBJECTIVE(S): Assess the reasonableness of actions taken to implement significant ARPA 

provisions such as data mining and contracting. These provisions had not 

been fully implemented at the time of our initial survey of ARPA 

implementation activities and our survey of the SRA renegotiation. 

RURAL DEVELOPMENT

TITLE: Rural Development’s FY 2003 Financial Statements 

 Monitoring of Rural Development’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if Rural Development’s consolidated financial statements are 

prepared fairly in all material respects in accordance with applicable 

accounting principles, if internal accounting controls are adequate, and if 

Rural Development complies with applicable laws and regulations. (Rural 

Development will contract for its FY 2004 Financial Statement Audit.) 

Rural Business-Cooperative Service (RBS)

TITLE: Delta Regional Commission 

OBJECTIVE(S): As mandated by appropriation legislation, determine if the Delta Regional 

Authority’s management controls are in place to ensure funds appropriated 

by Congress are safeguarded against waste and abuse. 

Rural Housing Service (RHS)

TITLE: Rural Rental Housing Construction Costs 

OBJECTIVE(S): Determine if internal controls are adequate to ensure that construction 

costs claimed on RD Form 1924-13 are accurate and were actually 

incurred, and loan funds were used only for authorized purposes. This 

work will follow up on OIG audits conducted in 1992-1993. 
77

TITLE: Accuracy of Borrower Accounts 

OBJECTIVE(S): Evaluate the accuracy and effectiveness of servicing actions taken on 

Section 502/504 loans by the Centralized Servicing Center (CSC) and 

identify related control weaknesses. OIG has recently received many 

Hotline complaints regarding possible erroneous balances. Determine 

whether or not there is any pattern or substance to the numerous Hotline 

complaints that have been filed. Assess the impact any error may have 

had upon borrower accounts. 

TITLE: Single Family Housing Loan Servicing Actions 

 

OBJECTIVE(S): Review internal controls over CSC’s single family special loan-servicing 

procedures. Review borrower eligibility for the following servicing 

actions: bankruptcies, foreclosures/real estate only inventories, 

assumptions, moratoriums, interest credit/payment assistance agreements, 

and graduations to private lenders. Review how the automated systems 

support these functions. 

Rural Utilities Service (RUS)

TITLE: Monitoring Rural Telephone Bank’s (RTB) FY 2003 Financial Statement 

 Monitoring Rural Telephone Bank’s FY 2004 Financial Statement 

OBJECTIVE(S): Determine if RTB’s financial statements are presented fairly in all material 

respects in accordance with applicable accounting principles, if internal 

accounting controls are adequate, and if RTB complies with laws and 

regulations. (OIG contracted the FY 2003 RTB Financial Statement Audit 

with a CPA firm, and it will remain contracted for FY 2004.) 

FOOD, NUTRITION AND CONSUMER SERVICES

Food and Nutrition Service (FNS)

TITLE: WIC Vendor Monitoring 

OBJECTIVE(S): Assess States’ compliance with recent WIC rules regarding food delivery 

systems that were to be implemented by States no later than February 

2002. Determine if FNS has provided sufficient guidance to assist States 

in implementation of the new rules. 
78 

TITLE: Controls Over Eligibility Determinations for the National School Lunch 

Program 

OBJECTIVE(S): Evaluate the progress made by FNS to improve the accuracy of eligibility 

determinations for the National School Lunch Program. Evaluate the 

results of FNS pilot projects and related regulatory proposals. 

TITLE: Food and Nutrition Service’s FY 2003 Financial Statements 

 Food and Nutrition Service’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if FNS’ financial statements are prepared fairly in all material 

respects in accordance with applicable accounting principles, if internal 

accounting controls are adequate, and if FNS complies with applicable 

laws and regulations. 

TITLE: Analysis of Electronic Benefits Transfer (EBT) Data Bases 

OBJECTIVE(S): Review and assess various EBT databases to identify opportunities for 

improving management of Food Stamp Program operations. 

TITLE: Continued Monitoring of EBT Operations 

OBJECTIVE(S): Evaluate the adequacy of controls and assess functionality of these 

controls for newly implemented and recently modified EBT systems. 

FOOD SAFETY

Food Safety and Inspection Service (FSIS)

TITLE: Egg Processing Inspection 

OBJECTIVE(S): Determine whether FSIS’ sanitation of processing in egg products plants is 

adequate. 

TITLE: Food Safety Information Systems 

OBJECTIVE(S): Evaluate the effectiveness of FSIS’ information in scheduling compliance 

activities and product testing, and in timely alerting FSIS managers of 

meat and poultry establishments that need additional monitoring of 

corrective actions. Our audit would target key information systems, such 

as the Performance Based Inspection System and the District Early 

Warning System, which play critical roles in the overall system of 

inspections for domestic meat and poultry establishments. 
79

RESEARCH, EDUCATION, AND ECONOMICS

Agricultural Research Service (ARS)

TITLE: Adequacy of Controls To Prevent the Release of Sensitive Technology 

OBJECTIVE(S): Determine if ARS has allowed the transfer of sensitive technology to the 

public. Determine the eligibility of agreement partners, especially 

partners with potentially sensitive agreements. 

TITLE: Controls Over Technology Transfer Agreements 

OBJECTIVE(S): Determine whether ARS is appropriately controlling the administration of 

its technology transfer agreements. 

TITLE: Implementation of the Government Performance and Results Act in the 

Agricultural Research Service 

OBJECTIVE(S): Evaluate ARS’ implementation of GPRA by assessing the effectiveness of 

the process for establishing performance goals and objectives, evaluating 

internal controls over performance measurement and reporting, and 

assessing the validity and verifiability of reported accomplishments. 

Cooperative State Research, Education, and Extension Service (CSREES)

TITLE: Management of IFAFS Competitive Grant Expenditures 

OBJECTIVE(S): Determine whether CSREES is providing adequate oversight of the 

competitive grant expenditures for the Initiative for Future Agriculture and 

Food Systems (IFAFS). Survey results indicate that CSREES may not be 

able to provide reasonable assurance. 
80 

MARKETING AND REGULATORY PROGRAMS

Animal and Plant Health Inspection Service (APHIS)

TITLE: Implementation of the Listed Agent or Toxin Regulations 

OBJECTIVE(S): Evaluate APHIS’ implementation of regulations governing the possession, 

use, and transfer of biological agents and toxins. Determine if the agency 

implemented adequate controls and procedures over registration for 

possession and use of biological agents and toxins. Review the security 

and personnel risk assessments. Determine whether the controls and 

procedures over the registration process adequately safeguard biological 

inventories.

TITLE: Emergency Pest Eradication and Control Programs 

OBJECTIVE(S): Determine if APHIS’ emergency programs effectively and efficiently 

responded to the introduction of plant pests, the coordination of control 

efforts with other State and Federal agencies, and the administration of 

control/eradication projects. Evaluate plans in place to respond to 

homeland security threats such as the intentional introduction of 

agricultural pests and diseases into this country. 

TITLE: Agency Memorandums of Understanding with the Department of 

Homeland Security (DHS) 

OBJECTIVE(S): Determine whether the Department has taken adequate corrective actions 

in response to our previous audits of the agency’s Agricultural Quarantine 

Inspection Programs. Many of these functions were transferred to DHS 

and require coordination between USDA and DHS. This is being 

accomplished through a variety of memorandums of understanding. 

CIVIL RIGHTS 

TITLE: Implementation of Recommendations from Prior Civil Rights (CR) Audits 

OBJECTIVE(S): Determine if actions taken by CR have a positive effect on program and 

employment CR complaint processes. An Assistant Secretary for CR (for 

USDA) was created and the position filled in April 2003. Determine if 

this has resulted in effective change. 
81

OFFICE OF THE CHIEF FINANCIAL OFFICER

TITLE: USDA Working Capital Fund’s FY 2003 Financial Statements 

 USDA Working Capital Fund’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if USDA’s Working Capital Fund (WCF) financial statements 

are presented fairly in all material respects in accordance with applicable 

accounting principles, if internal accounting controls are adequate, and if 

WCF complies with applicable laws and regulations. 

TITLE: FY 2004 National Finance Center (NFC) Internal Control Structure 

Review

OBJECTIVE(S): Determine whether NFC’s internal control structure is appropriately 

documented and provides reasonable assurance that data is processed 

properly. 

TITLE: FY 2004 Agreed-Upon Procedures: Retirement, Health, and Life 

Insurance Headcount

OBJECTIVE(S): Assess the validation of the NFC Payroll/Personnel databases through 

field office confirmations for retirement, health, and life insurance 

withholdings/contributions and supplemental semiannual headcount report 

submitted to the Office of Personnel Management. 

OFFICE OF THE CHIEF INFORMATION OFFICER

TITLE: National Information Technology Center’s (NITC) General Controls 

Review - FY 2004 

OBJECTIVE(S): Determine if the general controls at NITC are in place and operating 

effectively. 
82 

MULTIPLE AGENCY AUDITS

TITLE: Controls Over Assessing Environmental Liabilities 

OBJECTIVE(S): Examine controls for assessing environmental liabilities prior to the 

acquisition or disposal of land. Review the application of the 

requirements of agencies’ land transactions (sales, trades, or other 

conveyances). Examine the adverse impact from inadequate, negligent, or 

false certifications of hazardous environmental conditions. 

TITLE: USDA Compliance with the Improper Payments Act of 2002 

OBJECTIVE(S): Determine what actions agencies have taken to comply with requirements 

of the Improper Payments Act of 2002 to determine if the programs they 

administer are susceptible to improper payments. 

TITLE: Implementation of Budget and Performance Integration (BPI) In USDA 

OBJECTIVE(S): Evaluate the system of controls over Departmental planning for BPI; 

assess the development of full costs associated with program performance; 

evaluate the controls in place to ensure the validity and verifiability of 

reported data; determine whether program managers are using budget and 

performance data to more effectively and efficiently manage their 

program; and evaluate agency efforts to address each phase of OMB’s 

program assessment rating tool (“PART”). 

TITLE: USDA’s FY 2003 Financial Statements 

 USDA’s FY 2004 Financial Statements 

OBJECTIVE(S): Determine if USDA’s financial statements are presented fairly in all 

material respects in accordance with applicable accounting principles, if 

internal accounting controls are adequate, and if the Department complies 

with applicable laws and regulations. 

TITLE: FY 2004 Review of USDA’s Implementation of the Federal Information 

Security Management Act (FISMA) 

OBJECTIVE(S): Evaluate USDA’s information security program and practices as required 

by FISMA. 
83

TITLE: Environmental Quality Incentives Program (EQIP) 

OBJECTIVE(S): Evaluate the administration of EQIP based on increased funding and 

changes in funding methodology as specified in the 2002 FSRIA. A prior 

audit disclosed numerous questioned areas relative to the distribution of 

funding among States and funded conservation practices. 

TITLE: Biosecurity Grant Funding 

OBJECTIVE(S): Evaluate the use and effectiveness of homeland security funding made 

through grants and cooperative agreements administered by various 

USDA agencies to non-Federal cooperators. 

TITLE: Effectiveness of Quality Control Systems in Assessing Producer 

Compliance 

OBJECTIVE(S): Evaluate the effectiveness of USDA quality control systems in assessing 

producer compliance with program requirements and determinations of 

producer eligibility for program participation. This will include NRCS’ 

status review process, FSA’s spot check process, and other quality 

controls processes. 

TITLE: Controls Over Separation of Genetically Engineered Crops 

OBJECTIVE(S): Determine whether the Department has designated appropriate oversight 

on this issue and developed adequate controls to prevent the inadvertent 

commingling of genetically engineered crops with non-genetically 

engineered crops. 

TITLE: Controls Over Genetically Engineered Animal/Insects Research 

OBJECTIVE(S): Determine whether the Department has designated appropriate oversight 

on this issue and if USDA regulations provide adequate authority to 

control genetically engineered research. Determine whether agencies have 

sufficient controls to ensure that research specimens are not inadvertently 

released into the environment. 
84 

(Page Intentionally Left Blank) 
85

APPENDIX III 

FISCAL YEAR 2004 AUDITS PLANNED

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

AMS ADEQUACY OF MEAT GRADING PROCEDURES CH 100

 CERTIFICATION OF PROCESSED COMMODITIES CH 100

 FRESH PRODUCT GRADING AND CERTIFICATION CH 25

 NATIONAL ORGANIC PROGRAM HY 120

 SURVEY OF AMS CONTRACT COMPETITIVE 

 BIDDING PRACTICES 

KC 75

 AUDIT MANAGEMENT AND LIAISON ALL 120

 SUBTOTAL 540 

 

APHIS IMPLEMENTATION OF THE LISTED AGENT OR 

 TOXIN REGULATIONS 

AT CH KC TE 550

 INVESTIGATION AND ENFORCEMENT SERVICES CH 100

 EMERGENCY PEST ERADICATION AND CONTROL

 PROGRAMS 

CH 75

 AGENCY MEMORANDA OF UNDERSTANDING 

 WITH THE DEPARTMENT OF HOMELAND 

 SECURITY 

CH 150

 WILDLIFE SERVICES - AERIAL ACQUISITION 

 PROCEDURES 

KC 25

 SAFETY OF APHIS AIRCRAFT KC 200

 APHIS EXOTIC NEWCASTLE DISEASE PROJECT – 

 COOPERATIVE AGREEMENTS 

SF 50

 APHIS ANIMAL CARE INSPECTION AND 

 INVESTIGATION ACTIVITIES 

SF 100

 CONTROLS OVER APHIS ISSUANCE OF 

 GENETICALLY ENGINEERED ORGANISMS 

 RELEASE PERMITS 

TE 250

 AUDIT MANAGEMENT AND LIAISON ALL 428

 SUBTOTAL 1928 

 

ARS ADEQUACY OF CONTROLS TO PREVENT THE 

 RELEASE OF SENSITIVE TECHNOLOGY 

CH AT HY KC SF 450

 CONTROLS OVER TECHNOLOGY TRANSFER 

 AGREEMENTS 

CH AT HY KC SF 450

 IMPLEMENTATION OF THE GOVERNMENT 

 PERFORMANCE AND RESULTS ACT IN ARS 

CH 200

 AUDIT MANAGEMENT AND LIAISON ALL 314

 SUBTOTAL 1414 

 
 86 

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

CCC MONITORING THE AUDIT OF CCC’S FY 2003 

 FINANCIAL STATEMENTS 

FM 100

MONITORING THE AUDIT OF CCC’S FY 2004 

 FINANCIAL STATEMENT 

FM 200

 REVIEW OF CCC FUNDS CONTROL AND 

 PAYMENT CONTROL SYSTEMS 

FM 50

 GSM GUARANTEED LOAN ACCOUNTING 

 SYSTEM 

FM 50

 AUDIT MANAGEMENT AND LIAISON ALL 114

 SUBTOTAL 514 

 

CIO NATIONAL INFORMATION TECHNOLOGY 

 CENTER (NITC) GENERAL CONTROLS REVIEW – 

 FY 2004 

FM 200

 AUDIT MANAGEMENT AND LIAISON ALL 57

 SUBTOTAL 257 

 

CR IMPLEMENTATION OF RECOMMENDATIONS 

 FROM PRIOR CIVIL RIGHTS AUDITS 

HQ 150

 AUDIT MANAGEMENT AND LIAISON ALL 43

 SUBTOTAL 193 

 

CSREES MANAGEMENT OF IFAFS GRANT 

 EXPENDITURES 

AT KC SF 450

 CSREES IMPLEMENTATION OF AREERA 

 MATCHING REQUIREMENTS 

TE 200

 AUDIT MANAGEMENT AND LIAISON ALL 186

 SUBTOTAL 863 

 

FAS INTERNATIONAL TRADE POLICY AND 

 PROCEDURES 

AT 50

 FAS MARKET DEVELOPMENT PROGRAMS AT 25

 OVERSIGHT OF PRIVATE VOLUNTARY 

 ORGANIZATION OPERATIONS 

AT 175

 MARKET ACCESS PROGRAM AT 150

 GLOBAL FOOD FOR EDUCATION INITIATIVE AT 100

 AUDIT MANAGEMENT AND LIAISON ALL 143

 SUBTOTAL 643 

 

FNS REFORM OF FOOD STAMP QUALITY CONTROL 

 SYSTEM 

AT 75

 NUTRITION ASSISTANCE PROGRAM - PUERTO 

 RICO 

AT 200

 WIC PROGRAM VERIFICATION OF ELIGIBILITY AT 100

 SURVEY OF FNS - WIC PROGRAM, PUERTO RICO AT 250

 WIC ADMINISTRATIVE COSTS AT 250

 RETAILERS FOR THE SUPPLEMENTAL 

 NUTRITION PROGRAM FOR WOMEN, INFANTS 

AT 50
87

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 AND CHILDREN 

 FOOD STAMP PROGRAM WORKER INTEGRITY AT 75

 NATIONAL SCHOOL LUNCH PROGRAM - SOUTH 

 CAROLINA 

AT 150

 NATIONAL SCHOOL LUNCH PROGRAM – 

 MEAL COUNTS 

CH 600

 WIC VENDOR MONITORING CH 100

 USDA COMPLIANCE WITH IMPROPER PAYMENT 

 ACT REPORTING REQUIREMENTS 

CH 25

 CONTROLS OVER USDA-DONATED 

 COMMODITIES 

CH SF TE 400

 EFFECTIVENESS OF COMPLIANCE BRANCH 

 OPERATIONS 

CH 200

 CONTROLS OVER ELIGIBILITY DETERMINA- 

 TIONS FOR THE NATIONAL SCHOOL LUNCH 

 PROGRAM 

CH 100

 FY 2003 FNS FINANCIAL STATEMENTS HY 500

 FY 2004 FNS FINANCIAL STATEMENTS FM HY 250

 FOOD STAMP PROGRAM - BENEFITS FOR 

 NEWLY QUALIFIED IMMIGRANTS 

HY 90

 ADMINISTRATION AND MANAGEMENT OF 

 WIC IN THE NORTHEAST UNITED STATES 

HY 270

 FOLLOWUP AUDIT - DISTRICT OF COLUMBIA 

 SCHOOL LUNCH 

HY 275

 SUMMER FOOD SERVICE PROGRAM HY 100

 NATIONAL SCHOOL LUNCH AND SCHOOL 

 BREAKFAST PROGRAMS NATIONAL ISSUES 

HY 275

 REVIEW OF STATE FSP CLAIMS SYSTEMS AND 

 FNS’ MANAGEMENT OF CLAIM IMPROVEMENT 

 PROCESS 

HY 170

 NEW YORK CITY CASEFILE DOCUMENTATION – 

 FOOD STAMP PROGRAM 

HY 300

 ANALYSIS OF EBT DATA BASES HY 230

 CONTINUED MONITORING OF EBT OPERATIONS HY AT CH KC SF TE 1430

 NSLP - SAFEGUARDING AND CREDIT FOR 

 COMMODITIES 

KC 200

 FOOD STAMP PROGRAM ERROR RATE 

 REDUCTION - CALIFORNIA 

SF 200

 FOOD STAMP EMPLOYMENT AND TRAINING 

 PROGRAM - CALIFORNIA 

SF 50

 FNS - RETAILER REAUTHORIZATIONS AND 

 VISITS 

SF 50

 FNS - IMPLEMENTATION OF TIERING 

 REQUIREMENTS 

SF 50

 FNS - ALERT AND WATCHLIST SF 200

 FNS ADVANCED PLANNING DOCUMENTS TE 300
 88 

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 STRATEGIC MONITORING OF THE ELECTRONIC 

 BENEFIT TRANSFER SYSTEM DEVELOPMENT 

 IN NEW MEXICO 

TE 75

 AUDIT MANAGEMENT AND LIAISON ALL 2167

 SUBTOTAL 9757 

 

FS IMPLEMENTATION OF THE HEALTHY FORESTS 

 INITIATIVE 

AT 100

 CONTROLS OVER FOREST SERVICE PILOT 

 CERTIFICATIONS 

CH 75

 MONITORING THE AUDIT OF FY 2003 FS 

 FINANCIAL STATEMENTS 

FM 250

 MONITORING THE AUDIT OF FY 2004 FS 

 FINANCIAL STATEMENTS 

FM 200

 NATIONAL FIRE MANAGEMENT ANALYSIS 

 SYSTEM 

HY 330

 FOREST SERVICE IMPLEMENTATION OF THE 

 GOVERNMENT PERFORMANCE AND RESULTS 

 ACT 

HY 150

 ADMINISTRATION OF SPECIAL FOREST 

 PRODUCTS 

SF 50

 FS TIMBER SALVAGE SALE PROGRAM SF 50

 FS SPECIAL USE PROGRAM, SURVEY SF 50

 FS STEWARDSHIP CONTRACTING PILOT PROJECT SF 100

 FS RECREATION FACILITIES MANAGEMENT SF 25

 FS TRUST FUNDS SF 25

 FIRE PLAN EASEMENT PROGRAM SF 25

 NATIONAL FIRE PLAN OPERATIONS AND 

 REPORTING SYSTEM 

SF 150

 NATIONAL FIRE PLAN COMPLIANCE TO 

 FIREFIGHTING SAFETY STANDARDS 

SF 50

 NATIONAL FIRE PLAN CONTRACTING PROCESS SF 50

 FS USE OF COLLABORATIVE VENTURES AND 

 PARTNERSHIPS WITH NON-FEDERAL ENTITIES 

SF 50

 NATIONAL FIRE PLAN MONITORING SF 200

 FS PROCUREMENT OF NEW FIREFIGHTING 

 LEAD PLANES 

SF 100

 NATIONAL FIRE PLAN - LARGE FIRE 

 SUPPRESSION COSTS 

SF 150

 NATIONAL FIRE PLAN - FIRE CACHE 

 ACCOUNTABILITY 

SF 50

 REVIEW OF COOPERATIVE AND URBAN 

 FORESTRY 

TE 300

 SURVEY OF FOREST SERVICE TIMBER THEFT 

 CONTROLS 

TE 100

 AUDIT MANAGEMENT AND LIAISON ALL 751

 SUBTOTAL 3381 

 
89

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

FSA REVIEW OF FSA LOAN PROGRAM IN PUERTO 

 RICO 

AT 200

 MINORITY PARTICIPATION IN FSA’S FARM 

 LOAN PROGRAMS 

AT HY SF TE 500

 CONTROLS OVER ELIGIBILITY FOR SUGAR 

 BEET PAYMENTS 

CH 100

 MILK INCOME LOSS CONTRACT (MILC) 

 PROGRAM 

CH 150

 FSA COMPLIANCE ACTIVITIES CH 100

 FSA FY 2003 ACCOUNTING FOR FARM LOAN 

 PROGRAMS 

FM 100

 FSA FY 2004 ACCOUNTING FOR FARM LOAN 

 PROGRAMS 

FM 100

 FSA INVENTORY PROPERTY MANAGEMENT 

 WHISTLE BLOWER 

FM 50

 REVIEW OF FSA’S EMERGENCY SUPPLEMENTAL 

 APPROPRIATIONS 

FM 50

 SURVEY OF FSA’S BIOENERGY PROGRAM HY 200

 EMERGENCY FEED AND LIVESTOCK 

 COMPENSATION PROGRAMS 

KC AT CH HY SF TE 825

 DIRECT AND COUNTER CYCLICAL PAYMENT 

 PROVISIONS UNDER THE 2002 FARM BILL 

KC 60

 FSA APPLE MARKET LOSS ASSISTANCE 

 PAYMENT PROGRAM 

SF 50

 FARM PROGRAMS TE 300

 CROP DISASTER PROGRAM TE 150

 ELECTRONIC LOAN DEFICIENCY PAYMENT 

 (E-LDP) PROGRAM 

TE 150

 FSA 1999 OMNIBUS BILL AFFECTING FARM 

 LOAN PROGRAM LOAN-MAKING AND LOAN 

 SERVICING 

TE 150

 REVIEW OF FEDERAL ASSISTANCE GRANTS TO 

 PRODUCERS ALONG THE RIO GRANDE RIVER 

 IN TEXAS 

TE 150

 FSA IMPROPER PAYMENTS - FINALITY RULE 

 AND MISACTION/MISINFORMATION 

TE 150

 END-OF-YEAR PAYMENT LIMITATION REVIEWS TE AT 300

 AUDIT MANAGEMENT AND LIAISON ALL 1095

 SUBTOTAL 4930 

 

FSIS EVALUATION OF FSIS’ SAMPLING PROGRAM 

 FOR ADVANCED MEAT RECOVERY SYSTEMS 

AT 100

 FSIS STATE OPERATED INSPECTION PROGRAMS AT 50

 HACCP - COMPLIANCE BY VERY SMALL PLANTS AT 50

 EGG PROCESSING INSPECTION CH 75

 FOOD SAFETY INFORMATION SYSTEMS CH AT HY KC SF TE 1150

 AUTOMATED IMPORT INFORMATION SYSTEM HY 75
 90 

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 FSIS IMPLEMENTATION OF CONSUMER 

 SAFETY OFFICER AND PUBLIC HEALTH 

 SAFETY OFFICER PROGRAMS TO REDUCE FOOD-

 BORNE ILLNESS OUTBREAKS 

KC 75

 AUDIT MANAGEMENT AND LIAISON ALL 450

 SUBTOTAL 2025 

 

GIPSA REVIEW OF THE GRAIN INSPECTION SIDE OF 

 GIPSA 

HY 200

 AUDIT MANAGEMENT AND LIAISON ALL 57

 SUBTOTAL 257 

 

MULTI DEPARTMENTAL PROCUREMENT PRACTICES AT 75

 CONTROLS OVER ASSESSING ENVIRONMENTAL 

 LIABILITIES 

AT 100

 INTERNATIONAL FOOD AND TRADE PROGRAMS AT 100

 USDA COMPLIANCE WITH IMPROPER PAYMENTS 

 ACT OF 2002 

CH AT HY KC TE 825

 IMPLEMENTATION OF BUDGET AND 

 PERFORMANCE INTEGRATION IN USDA 

CH 100

 REVIEW OF USDA LOAN ASSET SALES FM 200

 FY 2003 USDA FINANCIAL STATEMENTS FM 335

 FY 2004 USDA FINANCIAL STATEMENTS FM AT CH HY KC SF TE 1500

 MONITORING OF USDA IMPLEMENTATION OF 

 COST ACCOUNTING SYSTEMS 

FM 50

 SECURITY OVER USDA’S COMMON COMPUTING 

 ENVIRONMENT IT RESOURCES 

FM 100

 FY 2004 REVIEW OF USDA FEDERAL 

 INFORMATION SECURITY MANAGEMENT 

 ACT 

FM 200

 SECURITY OF USDA INFORMATION 

 TECHNOLOGY RESOURCES (PHASE IV) 

FM AT CH HY KC SF TE 700

 E-GOVERNMENT SECURITY IN USDA FM 150

 REVIEW OF USDA’S APPLICATION CONTROLS – 

 FY 2004 

FM AT CH HY KC SF TE 1100

 USDA TELECOMMUNICATION CONTROLS FM 100

 VERIFICATION OF FSA & RD DEBTS EXCLUDED 

 FROM THE TREASURY OFFSET PROGRAM 

FM 50

 ARS AND FSIS COORDINATED FOOD SAFETY 

 RESEARCH EFFORTS 

HY 120

 REVIEW OF USDA AGENCIES’ MANAGEMENT OF 

 WORKERS COMPENSATION COSTS 

HY 400

 REVIEW OF USDA CONTRACT ACTIVITIES HY 280

 REVIEW OF BACKGROUND CHECKS HY 110

 AMS’ PURCHASE SPECIFICATION 

 REQUIREMENTS FOR GROUND BEEF 

HY 265

 IMPLEMENTATION OF THE BIOTERRORISM ACT KC 100

 HOMELAND SECURITY ISSUES WITH IT KC 150
91

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 CONTRACTORS 

 ENVIRONMENTAL QUALITY INCENTIVES 

 PROGRAM 

KC AT CH HY SF TE 900

 BIOSECURITY GRANT FUNDING KC 300

 EFFECTIVENESS OF QUALITY CONTROL 

 SYSTEMS IN ASSESSING PRODUCER 

 COMPLIANCE 

KC AT CH HY SF TE 700

 BSE SURVEILLANCE PROGRAM KC 100

 FSA/CCC WAREHOUSE REVIEW SF 50

 CONTROLS OVER SEPARATION OF 

 GENETICALLY ENGINEERED CROPS 

TE 200

 CONTROLS OVER GENETICALLY ENGINEERED 

 ANIMAL/INSECTS RESEARCH 

TE 150

 CPA OVERSIGHT TE 25

 AUDIT FOLLOWUP ALL except FM 510

 CONTRACT AUDIT ADMINISTRATION HQ TE KC 80

 DEVELOPMENTAL AUDITS ALL 870

 LAN AND ARGOS MAINTENANCE ALL CH SF 350

 SINGLE AUDIT MANAGEMENT KC AT SF TE 500

 SPECIAL REQUEST ALL except FM 1250

 AUDIT MANAGEMENT AND LIAISON ALL 3739

 SUBTOTAL 16834 

 

NRCS CONTROLS OVER TECHNICAL SERVICE 

 PROVIDERS 

CH 100

 WETLANDS RESERVE PROGRAM – VALUE OF 

 EASEMENTS 

SF 100

 WETLANDS RESERVE PROGRAM – 

 IMPLEMENTATION OF CONSERVATION 

 PRACTICES 

SF 250

 SURVEY OF NRCS CONTROLS OVER CENTERS 

 AND INSTITUTES 

TE 100

 AUDIT MANAGEMENT AND LIAISON ALL 157

 SUBTOTAL 707 

 

OCFO MONITORING THE AUDIT OF FY 2003 

 WORKING CAPITAL FUND FINANCIAL 

 STATEMENTS 

FM 50

MONITORING THE AUDIT OF FY 2004 

 WORKING CAPITAL FUND FINANCIAL 

 STATEMENTS 

FM 25

 REVIEW OF PUBLIC KEY INFRASTRUCTURE 

 AT OCFO/NFC 

FM 50

 FY 2004 NATIONAL FINANCE CENTER INTERNAL 

 CONTROL STRUCTURE REVIEW 

FM 950

 FY 2004 AGREED-UPON PROCEDURES: 

 RETIREMENT, HEALTH, AND LIFE INSURANCE 

 AND HEADCOUNT 

FM 40
 92 

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 REVIEW OF CONTROLS OVER E-PAYMENTS AT 

 OCFO/NFC 

FM 50

 REVIEW OF PURCHASE CARD SYSTEM FOR 

 SELECTED AGENCIES 

FM 300

 AUDIT MANAGEMENT AND LIAISON ALL 418

 SUBTOTAL 1883 

 

RBS DELTA REGIONAL COMMISSION AT 75

 GRANT AWARD PROCESS FOR RENEWABLE 

 ENERGY INITIATIVES 

HY 190

 RBS VALUE-ADDED AGRICULTURAL PRODUCT 

 MARKET DEVELOPMENT GRANTS 

KC 400

 B&I LOAN EQUITY REQUIREMENTS SF 100

 AUDIT MANAGEMENT AND LIAISON ALL 218

 SUBTOTAL 983 

 

RD RURAL DEVELOPMENT’S FY 2003 FINANCIAL 

 STATEMENTS 

FM 600

 MONITORING OF THE RURAL DEVELOPMENT’S 

 FY 2004 FINANCIAL STATEMENTS 

FM 400

 AUDIT MANAGEMENT AND LIAISON ALL 286

 SUBTOTAL 1286 

 

RHS EVALUATION OF SINGLE-FAMILY HOUSING 

 BORROWER INCOME VERIFICATION - FLORIDA 

AT 75

 SINGLE-FAMILY HOUSING IN SOUTH CAROLINA AT 200

 SUBSIDY PAYMENT ACCURACY IN MULTI- 

 FAMILY HOUSING PROGRAM 

AT CH HY KC SF TE 925

 SERVICING AND ACCOUNTABILITY OF SOLD 

 RURAL HOUSING LOANS 

AT 150

 RURAL RENTAL HOUSING CONSTRUCTION 

 COSTS 

CH 100

 RURAL RENTAL HOUSING PROJECT 

 MANAGEMENT 

CH 75

 ACCURACY OF BORROWER ACCOUNTS CH 100

 RURAL DEVELOPMENT’S ESCROW PROCESS 

 FOR SINGLE FAMILY HOUSING BORROWERS 

CH 100

 SINGLE FAMILY HOUSING LOAN SERVICING 

 ACTIONS 

FM 200

 COST ANALYSIS OF THE SELF-HELP HOUSING 

 PROGRAM 

SF 50

 AUDIT MANAGEMENT AND LIAISON ALL 564

 SUBTOTAL 2539 

 

RMA REVIEW OF SWEET POTATO CROP INSURANCE 

 IN NORTH CAROLINA 

AT 150

 REVIEW RMA COMPLIANCE OFFICE AT 150

 RMA POLICY HOLDERS AT 150
93

 LEAD ASSIST STAFF

AGENCY TITLE REGION REGIONS DAYS

 

 RMA COTTON PREMIUM RATES AT 100

 EVALUATION OF POOL DISTRIBUTION OF 

 POLICIES BY INSURANCE COMPANIES 

AT 200

 INDEMNITY CLAIMS CH 200

 MONITORING THE AUDIT OF FY 2003 FCIC 

 FINANCIAL STATEMENTS 

FM 40

 MONITORING THE AUDIT OF FY 2004 FCIC 

 FINANCIAL STATEMENTS 

FM 60

 RMA ERROR RATE KC AT SF TE 175

 MONITORING OF RMA RENEGOTIATION OF THE 

 STANDARD REINSURANCE AGREEMENT 

KC 175

 FIELD VERIFICATION DATA PROVIDED BY 

 REPORTING ORGANIZATIONS 

KC AT CH HY SF TE 550

 ZERO ACREAGE REPORT ABUSE KC AT CH HY TE 250

 IMPLEMENTATION OF SIGNIFICANT SELECTED 

 AGRICULTURAL RISK PROTECTION ACT 

 PROVISIONS 

KC 200

 REINSURED COMPANY FINANCIAL REVIEW KC 300

 FINANCIAL REVIEW OF REINSURED 

 ORGANIZATIONS - PHASE 2 

KC 200

 RMA PREVENTED PLANTING CLAIMS SF 50

 REVIEW OF CROP REVENUE COVERAGE 

 POLICIES 

TE 200

 PILOT PROGRAMS TE 200

 AUDIT MANAGEMENT AND LIAISON ALL 957

 SUBTOTAL 4307 

 

RUS WATER AND WASTE DISPOSAL PROGRAM SF 50

 BROADBAND GRANTS PROGRAM TE 150

 MONITORING FY 2003 RTB FINANCIAL 

 STATEMENT AUDIT 

FM 40

 MONITORING FY 2004 RTB FINANCIAL 

 STATEMENT AUDIT 

FM 60

 AUDIT MANAGEMENT AND LIAISON ALL 86

 SUBTOTAL 386 

 

 GRAND TOTAL 55600