Farm Credit Administration 

Office of Inspector General 

Semiannual Report to Congress 

October 1, 2018 – March 31, 2019 

 

FARM CREDIT ADMINISTRATION

OFFICE OF INSPECTOR GENERAL

SEMIANNUAL REPORT TO CONGRESS

OCTOBER 1, 2018 – MARCH 31, 2019 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

MESSAGE FROM THE INSPECTOR 

GENERAL

I am pleased to submit our Semiannual Report to Congress, summarizing the activities 

and accomplishments of the Farm Credit Administration (FCA or Agency) Office of 

Inspector General (OIG) for the period extending from October 1, 2018 through March

31, 2019.

This reporting period was an especially busy one for our office’s audit, inspection, and 

evaluation functions. Highlights include an evaluation of FCA’s compliance with the

Federal Information Security Modernization Act, which assessed and made 

recommendations for improving the Agency’s cybersecurity program, and a

benchmarking study that compared the structure and organization of FCA’s Office of

Examination with similar functions at other federal financial regulatory agencies. We 

also concluded a series of physical security inspections at FCA offices, making several 

recommendations to strengthen controls at the Agency’s McLean, Virginia 

headquarters, and oversaw an independent audit of FCA’s annual financial statements. 

These and other oversight activities have delivered valuable independent and objective

perspectives to FCA leadership, reflected in part by the Agency’s acceptance of several 

OIG recommendations. 

We also performed a peer review of the National Credit Union Administration (NCUA) 

OIG’s audit function. We carried out this review in an expeditious fashion and enjoyed 

the full cooperation of the NCUA OIG staff.

On the investigative side, we continued to address in a timely and professional manner 

all complaints received, referring matters and undertaking investigations as 

appropriate. We concluded two preliminary investigations and one formal investigation 

during the reporting period. 

We continued Agency outreach efforts, publishing two issues of our quarterly intraagency newsletter, providing introductory briefings to new Agency hires, and hosting 

an open house to allow employees to meet OIG staff. I trust that these activities—which

serve to educate FCA staff on the OIG’s mission and authorities—will make employees 

more comfortable reaching out to the OIG when they become aware of potential fraud,

waste, abuse, or mismanagement.

We also attended diligently to our duty to keep Congress fully and currently informed

about FCA programs and operations, providing briefings to majority and minority staff 

from the Agency’s Senate and House oversight committees. 

The reporting period also saw our office participate extensively in the Inspector General 

(IG) community. I was honored to co-chair the 21st annual awards ceremony for the 

Council of the Inspectors General on Integrity and Efficiency (CIGIE) and participate as

a mentor in CIGIE’s inaugural Women in Leadership forum. OIG staff contributed to the

work of multiple CIGIE committees and initiatives, including the implementation of new

guidelines for inspection and evaluation peer reviews. 

I am particularly pleased that our office was able to participate in the CIGIE Fellows 

Program, sending one of our auditors, Tori Kaufman, to the Peace Corps OIG to work 

on matters for the CIGIE Legislation Committee. She returned to our office with valuable

i Farm Credit Administration | Office of Inspector General
 

 

experience and insight into the legislative process. We were similarly fortunate to 

receive a fellow, Carlos Prieto, from the Defense Criminal Investigative Service. Mr.

Prieto lent his expertise to all aspects of our investigative program, reviewing our

investigative manual and files, drafting improvements to our internal policies and 

procedures, and improving upon our outreach efforts. 

In December, we welcomed Kevin Miller as the Counsel to the Inspector General. 

Coming from the Office of Personnel Management OIG, he has already proven himself 

a valuable addition to our team. 

Finally, I note that January 22nd marked the thirtieth anniversary of the FCA OIG’s

establishment. In recognition of this milestone, I would like to express my sincere

gratitude to the many individuals who have served in the OIG over the past three

decades for their excellent work in the provision of independent and objective 

oversight. In the coming months and years, we hope to emulate and build upon their 

dedicated service as we strive to improve FCA programs and operations. 

Wendy R. Laguarda 

Inspector General 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 ii 
ABBREVIATIONS

CIGIE Council of the Inspectors General on Integrity and Efficiency 

CFPB Consumer Financial Protection Bureau 

Farmer Mac Federal Agricultural Mortgage Corporation

FCA or Agency Farm Credit Administration 

System Farm Credit System 

FISMA Federal Information Security Modernization Act of 2014 

FLRA Federal Labor Relations Authority 

FY Fiscal Year 

HRK Harper, Rains, Knight & Company, P.A. 

IG Inspector General 

IG Act Inspector General Act of 1978, as amended

IT Information Technology 

NCUA National Credit Union Administration 

OE Office of Examination

OIG Office of Inspector General 

OMB Office of Management and Budget 

Pub. L. Public Law

SEC U.S. Securities and Exchange Commission

U.S. United States 

iii Farm Credit Administration | Office of Inspector General
TABLE OF 

CONTENTS

Message from the Inspector General ................................................................................................. i 

Abbreviations ............................................................................................................................................ iii

Table of Contents .................................................................................................................................... iv

Background................................................................................................................................................. 1

Strategic Plan ............................................................................................................................................. 3

Performance Measures........................................................................................................................... 4

Audits, Inspections, and Evaluations ................................................................................................. 6

Investigations ........................................................................................................................................... 10

Other Reports and Reviews ................................................................................................................ 12

Reviews of Legislation and Regulations......................................................................................... 13

Outreach and Collaboration............................................................................................................... 14

Appendix I: Peer Reviews..................................................................................................................... 15

Appendix II: Reports Issued ................................................................................................................ 17

Appendix III: Reports with Questioned Costs .............................................................................. 18

Appendix IV: Reports with Funds For Better Use........................................................................ 19

Appendix V: Open Recommendations ........................................................................................... 20

Index of Reporting Requirements .................................................................................................... 22

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 iv 
 

 

 

 

 

 

 

 

 

BACKGROUND

The Farm Credit System 

First established in 1916, the Farm Credit System (System) is a nationwide network of 

borrow-owned cooperative financial institutions and service organizations. A 

government-sponsored enterprise, the System is designed to better the income and

well-being of farmers, ranchers, and rural America by providing a safe and reliable 

source of credit and related financial services. 

As of the end of the reporting period, the System consisted of three farm credit banks, 

one agricultural credit bank, one federal land credit association and 68 agricultural 

credit associations that primarily make loans to agriculture in all 50 states and Puerto

Rico, as well as five service corporations that provide administrative, technologyrelated, and other support services to certain System entities and eligible borrowers. 

The System raises funds by selling securities in the national and international money 

markets through the Federal Farm Credit Banks Funding Corporation. 

The System also includes the Federal Agricultural Mortgage Corporation (Farmer Mac),

a stockholder-owned, federally chartered instrumentality. Created in 1988, Farmer Mac

provides a secondary market for agricultural real estate mortgage loans, rural housing 

loans, and rural utility cooperative loans. Farmer Mac is publicly traded and issues its

own debt securities.

The Farm Credit Administration 

FCA is the independent federal agency responsible for ensuring that the System 

remains a dependable source of credit for agriculture and rural America. Authorized by

the Farm Credit Act of 1971, as amended, FCA ensures the safety and soundness of 

System institutions by issuing policies and regulations, and by regularly examining 

System institutions to assess compliance with applicable laws and regulations. 

FCA is overseen by a three-person board, members of which are appointed by the 

President, with the advice and consent of the Senate. The Chairman of the Board—who

is designated by the President and serves in that role until the end of his or her term—

also serves as the Agency’s Chief Executive Officer.

At the end of the reporting period, FCA had approximately 300 full- and part-time

employees distributed across five offices nationwide. 

The Office of Inspector General 

Established in January 1989, the OIG is charged with the task of providing independent and 

objective oversight of FCA programs and operations. It carries out this responsibility as

authorized by and in accordance with the Inspector General Act of 1978, as amended (IG 

Act),1 conducting and supervising audits, inspections, evaluations, and investigations;

promoting economy and efficiency; preventing and detecting fraud, waste, and abuse; and 

1

 5 U.S.C. app.

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keeping the FCA Board and Congress fully and currently informed about problems and

deficiencies related to FCA. 

Located within FCA, the OIG operates independently—outside the direction of Agency

leadership. While the IG is appointed by and serves under the general supervision of the 

FCA Board, neither the Board nor any other Agency official may prevent or prohibit the IG 

from carrying out an oversight activity that the IG determines to be necessary or appropriate. 

The IG also exercises discretion in OIG employment and contracting decisions, further

safeguarding the office’s independent status. This independence is necessary to ensure that

OIG products meet the highest standards of objectivity and credibility. 

The OIG is led by Wendy Laguarda, who has served as the IG since August 2017. The IG 

supervises a staff of five, consisting of three auditors, one investigator, and one counsel, as

set forth in the organizational chart below. 

Inspector General

Wendy Laguarda

Senior Auditor

Tammy Rapp

Senior Auditor

Sonya Cerne

Senior Auditor

Tori Kaufman

Investigator

Ava Bell

Counsel

Kevin Miller

The Council of the Inspectors General on Integrity and Efficiency 

The FCA IG also serves, by virtue of her position, as a member of CIGIE. Composed of the 

federal Inspectors General and certain other federal officials, CIGIE was established to

address cross-agency issues of integrity, economy, and effectiveness and to improve the 

professionalism and effectiveness of OIG personnel. OIG staff regularly participate on CIGIE 

committees and initiatives, as discussed in this report.

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 2 
 

 

STRATEGIC 

PLAN

Below are outlined the mission, vision, values, and goals that inform the OIG’s oversight

of FCA. Please see the OIG’s Strategic Plan for Fiscal Years (FYs) 2018 and 2019 to learn

more. 

Our Mission 

The OIG’s independent eyes, ears, and voice serve to protect, inform, and 

advance Agency programs and operations. 

Our Vision 

Harvesting Change 

Our Values 

Relevant, Respectful, Trustworthy, and Objective 

Our Goals 

1) Detect and Deter Fraud, Waste, and Abuse 

2) Investigate and Protect Against Wrongdoing

3) Promote Quality and Value 

4) Advance FCA’s Future

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PERFORMANCE 

MEASURES

The OIG’s Strategic Plan for FYs 2018 and 2019 sets forth several qualitative measures

against which the OIG assesses its performance. The following describes some of the

OIG’s actions during the reporting period that were relevant to those performance 

measures. Additional information can be found in the OIG’s Performance Report for FY 

2018. 

Efficiencies have been gained with the addition of video conferencing capabilities in

our office, allowing easier communication with employees in FCA field offices. 

Completion time of OIG work assignments has been appropriate based on the

complexity or unique nature of each assignment. Most of our audit, inspection, and 

evaluation reports are completed within six months or less. The one report of

investigation we issued during this reporting period was completed within five weeks

of the initial complaint. 

Of the 12 audit, inspection, and evaluation recommendations made during this

reporting period, all but one were accepted.

Complaints activity during the reporting period continued to reflect employee

confidence in OIG’s ability to investigate wrongdoing and guard confidentiality.

Interaction with Congress remains strong, as the IG met with majority and minority

staff from FCA’s Senate and House oversight committees during this reporting period

and responded expediently to resulting follow-up questions. 

Communication with the FCA Board and management is an ongoing priority of our 

office. During this reporting period, we held two quarterly briefings with each board 

member, and provided individual briefings, upon request, on our audit, inspection, and

evaluation products. We also solicited input from board members and management

regarding issues facing the Agency so as to inform our oversight plans. 

Aligning audit planning with FCA’s top management and performance challenges

is important to ensure that our work is risk-based and addresses the most significant 

challenges in the Agency. Each audit, inspection, and evaluation summary in this 

document refers to the management challenge addressed in the report.

Outreach efforts during the reporting period included two quarterly issues of the dIG, 

the OIG’s intra-FCA newsletter and an open house that welcomed all FCA employees 

to familiarize themselves with OIG staff.

Participation in CIGIE is integral to everyone’s job in the OIG, and staff members are

actively involved with various CIGIE committees and initiatives. During this reporting

period, one of our senior auditors was an impactful member of the Inspection and 

Evaluation Peer Review Implementation Team. Another senior auditor served as a CIGIE 

Fellow with the Peace Corps OIG, working on CIGIE Legislation Committee activities.

The IG co-hosted the annual CIGIE awards ceremony and participated as a mentor in

CIGIE’s first Women in Leadership Forum. 

Training taken during this reporting period covered a range of subjects pertinent to 

the OIG’s mission, including audits, investigations, legal issues, and information 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 4 
 

technology (IT). Regular training ensures that OIG personnel are well-equipped to 

deliver credible oversight products and allows OIG staff to pursue career development 

opportunities. 

Diversity of OIG staff when hiring opportunities arise is a goal in our office. Our

office strives to enhance diversity during hiring and support the Agency’s strategic 

objective to embrace diversity and inclusion.

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AUDITS

, INSPECTIONS

, AND 

EVALUATIONS

The OIG regularly conducts and supervises audits, inspections, and evaluations of FCA

programs and operations. In so doing, OIG personnel endeavor to provide timely,

credible, and relevant information to Agency leadership, Congress, other stakeholders,

and the general public. All OIG audits are performed in accordance with generally

accepted government auditing standards issued by the U.S. Government Accountability 

Office (GAO), while inspections and evaluations adhere to the CIGIE Quality Standards 

for Inspection and Evaluation. 

In planning its audits, inspections, and evaluations, the OIG employs a risk-based

approach that accounts for prior oversight work, the control environment, input from 

the FCA Board and senior management, and statutory requirements. For more 

information, and to learn about future OIG work, please see the Audit, Inspection, and 

Evaluation Plan for FYs 2019 and 2020. 

Audit, evaluation, and inspection reports may be found on the OIG's website within 

three days of issuance to the FCA Board. To receive a notification when a new report is 

published, please subscribe to the OIG mailing list. Additionally, reports are posted on 

Oversight.gov. Launched by CIGIE in October 2017, Oversight.gov is a “one-stop shop” 

to follow the oversight work of federal inspectors general. Oversight.gov allows users 

to sort, search, and filter the site’s database to find reports of interest. Users can receive

notifications when new reports are added to the site by following CIGIE’s Twitter

account, @OversightGov. 

Summaries of reports issued

The OIG issued four reports and made twelve recommendations for corrective action

during the reporting period. The reports issued are summarized below. 

Physical Security in the Farm Credit Administration's Headquarters 

I-18-04

Physical security controls safeguard employees and assets, and thus represent a

paramount concern for any federal agency—one inextricably related to two top

management challenges facing FCA: human capital and IT. Complicating matters, onesize-fits-all solutions may be difficult to implement in different offices with unique 

challenges. Cognizant of these issues, the OIG conducted a round of inspections to 

assess the effectiveness of physical security controls in the five FCA office locations, 

beginning with a review of the Denver, Colorado field office in 2017.

This reporting period, the OIG concluded this series of reviews with an inspection of 

physical security controls at FCA’s McLean, Virginia headquarters building and

Emergency Operations Center. Our review focused on controls related to physical

access, computers and other equipment, emergency preparedness, and personnel 

records. To test these controls, OIG staff performed walkthroughs and surveyed select

employees.

The OIG found the controls in place to be generally effective. Nevertheless, OIG 

inspectors identified several opportunities to further improve physical security at FCA

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 6 
 

 

 

 

 

 

 

headquarters. The OIG made seven recommendations for corrective action. FCA

concurred with six recommendations. The agency disagreed with one recommendation

concerning physical access controls. 

The inspection report was issued to the FCA Board on December 7, 2018. To avoid the 

disclosure of potential vulnerabilities, a summary report was published on the OIG’s

website. 

2018 Evaluation of the Farm Credit Administration’s Compliance with the

Federal Information Security Modernization Act 

E-18-03 

In its April 2018 report on Top Management and Performance Challenges Facing Multiple 

Federal Agencies, CIGIE recognized safeguarding IT assets against both external and

internal threats and maintaining a mission-suitable IT infrastructure as longstanding 

and important government-wide challenges. FCA is no exception; for the past decade, 

the OIG has considered IT—specifically, leveraging IT investments while maintaining a

secure environment—to be a top management challenge facing the Agency. The 

Federal Information Security Modernization Act of 2014 (FISMA)2

 affords the OIG an

opportunity to annually assess FCA’s progress in meeting this ever-evolving challenge.

FISMA requires OIGs to annually evaluate their respective agency’s information security

program and practices. In accordance with guidance developed by OMB and the

Department of Homeland Security, the OIG assessed FCA’s overall performance with 

respect to eight domains: risk management, configuration management, identity and 

access management, security training, information security continuous monitoring, 

incident response, contingency planning, and—new for FY 2018—data protection and 

privacy. With respect to each domain, the OIG ranked FCA’s effectiveness according to 

a 5-level maturity scale ranging from ad-hoc to optimized. 

Overall, the OIG found that FCA’s information security program is effective and provides 

reasonable assurance of adequate security. The OIG further found that FCA continues

to make positive strides in addressing information security weaknesses. The OIG made 

five recommendations for corrective action, all of which the Agency concurred with. 

The evaluation report was issued to the FCA Board on October 31, 2018.

Farm Credit Administration’s Office of Examination

Structure and Organization Benchmarking Evaluation

E-18-02 

FCA’s Office of Examination (OE) is responsible for examining and supervising System 

institutions in accordance with the Farm Credit Act and applicable regulation. As FCA’s

largest office, OE accounts for over half of FCA’s personnel. OE helps ensure that System

institutions operate safely and soundly, comply with relevant law, and provide a 

dependable source of credit for agriculture and rural America. The OIG has long 

2

 Pub. L. 113-283, (Dec. 18, 2014) 

7 Farm Credit Administration | Office of Inspector General
 

 

 

 

 

 

 

 

 

 

 

 

 

 

considered this examination and supervision function and the maintenance of a welltrained, sustainable workforce to be top management challenges facing the Agency.

The objective of this evaluation was to compare FCA’s examiner career structure and 

organization within OE to those of other federal financial regulators. The OIG conducted 

a survey of six agencies: the Consumer Financial Protection Bureau (CFPB), Federal 

Deposit Insurance Corporation, Board of Governors of the Federal Reserve System, 

NCUA, Office of the Comptroller of the Currency, and U.S. Securities and Exchange 

Commission. The survey included questions as to the number of employees performing 

examination duties and their respective locations, each agency’s approach to locating

and organizing staff, the number of employees hired in FY 2017, the ratio of supervisors

to examiners, the number of institutions examined on an annual basis, whether 

examiners are co-located with their supervisors, and the use of resident examiners 

(located on the premises of the reviewed institution).

The study found significant variation among the surveyed agencies with respect to size,

location, and—especially—career structure and organization. Of note, examination staff 

at two of the smaller agencies, NCUA and CFPB, work remotely full-time. The survey

also found considerable similarities among the agencies, including the ratio of 

examiners to supervisors, co-location of examiners with supervisors, and use of resident 

examiners (or lack thereof).

While the OIG issued no recommendations for corrective action, the report highlighted 

various considerations for FCA to explore, including the use of full-time remote staff

and consolidation of offices to achieve higher examiner-to-supervisor ratios. 

The evaluation report was issued to the FCA Board on March 20, 2019.

Audit of FCA’s Financial Statements Fiscal Year 2018

A-18-FS

Under the Accountability of Tax Dollars Act of 2002,3

 FCA is required each fiscal year to

submit audited financial statements to Congress and OMB. The OIG engaged an 

independent public accounting firm, Harper, Rains, Knight & Company, P.A. (HRK), to

audit FCA’s financial statements for FY 2018. The OIG monitored the work of HRK to

ensure compliance with generally accepted government auditing standards and U.S. 

Office of Management and Budget (OMB) Bulletin 19-01, Audit Requirements for Federal 

Financial Statements. 

HRK concluded its audit in November 2018, issuing an unmodified opinion signifying

that the financial statements reviewed present fairly, in all material respects, FCA’s 

financial position, net cost of operations, changes in net position, and budgetary 

resources, in accordance with generally accepted accounting principles. 

The HRK auditors considered FCA’s internal control over financial reporting to

determine the audit procedures for the purpose of expressing an opinion on the

3

 Pub. L. 107-289 (Nov. 7, 2002) 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 8 
 

 

 

 

financial statements. The auditors did not express an opinion on the effectiveness of

those internal controls; however, they did not identify any deficiencies considered to

be a material weakness. 

Additionally, HRK auditors performed tests of FCA’s compliance with selected 

provisions of laws and regulations that would have a direct and material effect on the

financial statements. While they did not express an opinion on compliance with those

provisions, they did not identify any instances of noncompliance or other matters 

required to be reported under generally accepted government auditing standards or 

relevant OMB guidance. 

The audit report was issued to the FCA Board on November 15, 2018.

In Progress 

Below are the audits, inspections, and evaluations in progress at the end of the

reporting period. 

FCA’s Stress Testing Guidance and Use of Data and 

Analytical and Examination Tools 

Stress testing is a risk management tool used by financial institutions to plan for

potential adverse events that could impact their financial condition. The objective of

this audit is to evaluate FCA’s progress in updating stress testing guidance and related 

data, and analytical and examination tools. 

9 Farm Credit Administration | Office of Inspector General
 

 

 

 

 

 

 

INVESTIGATIONS

The OIG has broad discretion to carry out such investigations related to FCA programs

and operations as the IG determines to be necessary or desirable. The range of matters

falling within the OIG’s investigative purview is expansive, encompassing potential

violations of law, rules, or regulations; mismanagement; abuses of authority; and more.

Investigative activities may be initiated upon allegations or referrals received from a

variety of sources, including—but not limited to—FCA employees or contractors, 

congressional committees, System institutions, or members of the public. The OIG may

also investigate potential waste, fraud, and abuse identified through OIG audits,

inspections, or evaluations, or through proactive investigative projects. 

The OIG maintains a hotline that allows FCA employees and others to confidentially 

report potential fraud, waste, abuse, or mismanagement via telephone, email, or

facsimile at any time. The office also welcomes complaints by mail and in-person. 

In exercising its investigative authorities, the OIG endeavors to produce work products 

that are timely, clear, and credible, and to guard the identities of those who provide

information to the OIG. All investigations are carried out in accordance with the CIGIE

Quality Standards for Investigations. Closing memoranda for investigations are available

on the OIG’s online reports page. 

The table below summarizes major investigative activity during the reporting period. 

Metric Number 

Investigative reports issued4 1

Persons referred to the Department of Justice for criminal prosecution 0 

Persons referred to State and local prosecuting authorities for criminal 0 

prosecution 

Indictments and criminal informations that resulted from any prior 0

referral to prosecuting authorities 

Complaint Activity 

The following table shows the action taken by the OIG in response to complaints 

received during the reporting period. There were no complaints pending as of the end 

of March 31, 2019.

4 Reports of investigation resulting from a formal investigation. Does not include memoranda

memorializing the referral of complaints or closure of preliminary investigations. 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 10
 

 

 

Action Taken Number 

Formal investigation opened 1

Closed after preliminary investigation 2 

Referred within FCA, involving borrower complaints or allegations of 3 

loan fraud 

Referred to other federal agencies, involving matters outside of FCA OIG

jurisdiction

Total 14

8 

Summaries of Investigations 

Following are summaries of formal investigations concluded during the reporting 

period. 

Investigation #19-01 

In November 2018, the OIG received a complaint alleging that an employee’s first- and 

second-line supervisors, the latter of whom was a senior government employee,

attempted to coerce the employee into signing the employee’s performance

evaluation.

The OIG completed its investigative fieldwork on December 21, 2018 and issued a

report of investigation to Agency management on December 31, 2018. Management

responded on January 15, 2019, indicating that the supervisors concerned would

receive instruction as to the appropriate procedures to follow when an employee 

chooses not to sign his or her performance evaluation. 

The OIG closed the investigation on January 24, 2019 and published a closing 

memorandum. 

Investigations Involving Senior Government Employees 

This reporting period, the OIG closed two preliminary investigations involving senior 

government employees that were not disclosed to the public. They are summarized 

below. 

In December 2018, the OIG received information indicating that multiple senior 

government employees were serving as Combined Federal Campaign keyworkers,

notwithstanding their roles as supervisors. Shortly after the OIG began its preliminary

investigation, the supervisory employees were replaced with non-supervisors for the

duration of the campaign.

In February 2019, the OIG received allegations of unprofessional conduct in FCA’s

interaction with the complainant, who had contacted FCA with an inquiry. A preliminary 

investigation did not substantiate the allegation, and the OIG closed its inquiry on

March 5, 2019.

11 Farm Credit Administration | Office of Inspector General
 

 

 

 

 

 

OTHER 

REPORTS AND 

REVIEWS

The OIG periodically conducts reviews that do not fit the description of an audit,

inspection, evaluation, or investigation. These projects are typically undertaken in

accordance with a statutory requirement, for quality assurance purposes, or to

otherwise provide comprehensive oversight of FCA programs and operations. Below 

are summaries of certain such reviews that were completed during the reporting period.

Survey of Farm Credit System Institutions 

Regarding the Agency’s Examination Function

Each quarter, the OIG surveys recently examined System institutions regarding the 

quality and consistency of FCA’s examination function. Survey questions seek the 

institution’s views on several matters ranging from the appropriateness of the 

examination’s scope and the examiners’ conduct to the helpfulness of any

recommendations or required actions. The survey employs a numerical rating system

and allows for institutions to provide narrative responses. The OIG collects, aggregates,

and anonymizes survey responses for distribution to the FCA Board and Chief Examiner.

The OIG issued one survey report on January 31, 2019, detailing responses from System 

institutions examined during the fourth quarter of FY 2018. The report also provided

cumulative survey data for FY 2018. Generally, survey responses indicated that the

System has a positive view of FCA’s examination program and staff.

2019 Risk Assessment of the 

Farm Credit Administration’s Charge Card Program

Pursuant to the Government Charge Card Abuse Prevention Act of 2012,5

 and in

accordance with implementing OMB guidance, the OIG annually conducts a risk

assessment of FCA charge card programs to analyze the risk of illegal, improper, or 

erroneous purchases.

The OIG’s 2019 assessment focused on oversight and control of the purchase card

program, the travel card program, and the use of a centrally billed account. The OIG 

concluded that the overall risk of FCA’s charge card programs was low based on the 

calculated risks’ impact and likelihood. 

A copy of the assessment was issued to FCA’s Office of Agency Services on March 1,

2019.

5

 Pub. L. 112-194 (Oct. 5, 2012). 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 12
 

 

REVIEWS OF 

LEGISLATION AND 

REGULATIONS

Pursuant to the IG Act, the OIG reviews existing and proposed legislation and 

regulations relating to FCA programs and operations. When appropriate, the OIG 

makes recommendations regarding the impact of such legislation or regulations on 

economy or efficiency or the prevention and detection of fraud and abuse. 

During the reporting period, the OIG reviewed several bills and proposed regulations,

including H.R. 135, the Federal Employee Antidiscrimination Act of 2019, and H.R. 1847,

the Inspector General Protection Act. The OIG provided comments on proposed and 

existing legislation through the CIGIE Legislation Committee. 

13 Farm Credit Administration | Office of Inspector General
 

 

 

 

 

 

 

OUTREACH AND 

COLLABORATION

FCA Employees

The cooperation of FCA employees is essential to all aspects of OIG oversight.

Accordingly, the OIG has several ongoing initiatives geared toward educating FCA

employees on the OIG’s mission and authorities. For example, the OIG publishes a 

quarterly intra-agency newsletter, the dIG, which spotlights the office’s functions and

provides recent examples of OIG oversight products government-wide. This reporting

period, the OIG also participated in new employee training for FCA employees and

hosted an open house to better acquaint existing staff with OIG personnel. 

Congress 

In the interest of fulfilling its responsibility to keep Congress fully and currently 

informed regarding problems and deficiencies relating to FCA programs and 

operations, the OIG endeavors to respond expeditiously to all congressional requests

and to periodically brief oversight committees as to recent OIG activity. During the 

reporting period, the IG provided briefings on OIG activities to majority and minority

staff from both the Senate Committee on Agriculture, Nutrition, and Forestry and the

House Committee on Agriculture.

IG Community 

The OIG is an active member of the IG community, with staff lending their efforts and 

expertise to the work of various CIGIE committees and initiatives, as well as to the CIGIE

Training Institute. This reporting period was no exception. 

The IG co-chaired CIGIE’s 21st Annual Awards Ceremony in October, and throughout 

the six-month reporting period served as a member of CIGIE’s Legislation Committee,

which fosters relationships with Congress, represents the IG community’s interests on

legislative initiatives and keeps OIGs apprised of pertinent legislative developments. In

March, the IG served as a mentor at CIGIE’s first Women in Leadership Forum. 

This reporting period, OIG staff also participated in the CIGIE’s Inspection and

Evaluation roundtable (informing the implementation of new peer review reporting 

guidance); the CIGIE Audit Committee; and the Council of Counsels to the Inspectors

General.

Of note, the OIG took part in the CIGIE Fellows Program. Designed to broaden the

perspectives of high-potential OIG personnel and prepare them for future challenges, 

the Fellows Program allows employees to partake in a six-month rotation at another 

OIG. The OIG was fortunate to contribute and receive a fellow. The OIG sent Senior

Auditor Tori Kaufman to the Peace Corps OIG, where she worked with the CIGIE 

Legislation Committee. The OIG received Carlos Prieto from the Defense Criminal 

Investigative Service. Mr. Prieto’s experience was especially beneficial to the OIG’s 

investigative program. 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 14
 

 

 

APPENDIX I:

PEER 

REVIEWS

To ensure adherence with relevant professional standards, each OIG is subject to 

periodic external peer reviews. Information regarding peer reviews conducted by and

of the FCA OIG is provided below.

Reports of external peer reviews of FCA OIG operations may be found on our website. 

Reports of peer reviews conducted by our office may be located on the websites of the

reviewed OIGs.

Audit 

Generally accepted government auditing standards require any organization

conducting audits in accordance with those standards to undergo an external peer 

review at least once every three years. These peer reviews may conclude in a rating of 

pass, pass with deficiencies, or fail. A rating of pass signifies that the audit organization’s 

system of quality control has been suitably designed and complied with to provide the

organization with reasonable assurance of performing and reporting in conformity with

applicable professional standards and legal and regulatory requirements in all material 

respects.

The FCA OIG did not receive an external peer review of its audit function during the 

reporting period. The next peer review of our audit organization is scheduled to begin 

later this year. 

The most recent peer review of the OIG was completed by the Federal Labor Relations 

Authority (FLRA) OIG in August 2016, and covered the three-year period ending March 

31, 2016. We received a rating of pass, and the FLRA OIG made no recommendations 

for corrective action. 

On January 24, 2019, the OIG concluded a peer review of the audit organization of the 

NCUA OIG. The NCUA OIG received a rating of pass, and our office made no 

recommendations for corrective action. 

Inspection and Evaluation

Under guidance adopted by CIGIE in January 2017, each OIG performing inspections or

evaluations in accordance with the CIGIE Quality Standards for Inspection and Evaluation 

is required to undergo an external peer review every three years. During the first threeyear cycle, peer review reports will not include an overall rating (e.g., pass, fail,

compliant, or non-compliant), but will include a conclusion as to whether the reviewed 

OIG adhered to CIGIE standards and the OIG’s internal policies and procedures for 

inspection and evaluation work. 

The first peer review of our inspection and evaluation function is scheduled to begin 

later this year. 

The FCA OIG did not conduct any inspection and evaluation peer reviews during the

reporting period. 

15 Farm Credit Administration | Office of Inspector General
 

 

Investigation

CIGIE’s Qualitative Assessment Review Guidelines for Investigative Operations of Federal 

Offices of Inspector General establish an independent external evaluation process for 

investigative operations. The objective of an investigative peer review is to determine 

whether internal control systems are in place and operating effectively to provide 

reasonable assurance that an OIG’s investigative operations comply with CIGIE’s Quality 

Standards for Investigations. Reviewed OIGs are assessed a rating of compliant or

noncompliant. While the guidelines do not mandate that OIGs without statutory law 

enforcement authority—like the FCA OIG—undergo investigative peer reviews, they

encourage voluntary participation. 

The FCA OIG did not undergo an investigative peer review during the reporting period.

We have volunteered to receive a peer review of our investigation function within the 

next few years. 

The most recent peer review of the FCA OIG’s investigative program was performed by

the SEC OIG for the one-year period ending September 30, 2007. The SEC OIG

concluded that our system of internal safeguards and management procedures for the 

investigative function were in full compliance with then-applicable quality standards

and provided reasonable assurance of conforming with professional standards in the 

conduct of investigations. Although the SEC OIG made no formal recommendations,

they made suggestions for improvements to our investigation practices and 

procedures.

The FCA OIG did not conduct any investigative peer reviews during the reporting 

period. 

Outstanding Recommendations 

There are no outstanding recommendations from any peer review conducted by

another OIG that have not been fully implemented. 

There are no recommendations from any peer review conducted by the FCA OIG that 

remain outstanding or that have not been fully implemented.

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 16
 

APPENDIX II:

REPORTS ISSUED

Below is a list of all audit, inspection, and evaluation reports issued during the reporting 

period. 

17 Farm Credit Administration | Office of Inspector General

Report Title Date Recommendations

OIG 2018 Evaluation of the Farm Credit Oct. 31, 2018 5 

Administration’s Compliance with the

Federal Information Security Modernization 

Act 

Farm Credit Administration’s Office of Mar. 20, 2019 0 

Examination Structure and Organization 

Benchmarking Evaluation 

Physical Security in the Farm Credit Dec. 7, 2018 7

Administration's Headquarters 

Audit of the Farm Credit Administration’s Nov. 15, 2018 0 

Financial Statements Fiscal Year 2018

Total: 12
APPENDIX III:

REPORTS WITH 

QUESTIONED 

COSTS

The table below shows the number of audit, inspection, and evaluation reports issued

and the total dollar value of questioned costs associated with those reports. 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 18

Requirement # Questioned 

Costs 

Unsupported

Costs 

(A) Reports for which no management 0 $0 $0 

decision had been made by the 

commencement of the reporting period 

(B) Reports issued during the reporting period 4 $0 $0 

Subtotal (A+B) 4 $0 $0 

(C) Reports for which a management decision 4 $0 $0 

was made during the reporting period, 

including— 

(i) the dollar value of recommendations $0 $0 

that were agreed to by management 

(ii) the dollar value of recommendations $0 $0 

that were not agreed to by management 

(D) Reports for which no management 0 $0 $0 

decision has been made by the end of the 

reporting period; 
APPENDIX IV:

REPORTS WITH 

FUNDS 

FOR 

BETTER 

USE

The table below shows the number of audit, inspection, and evaluation reports issued

with recommendations that funds be put to better use.

19 Farm Credit Administration | Office of Inspector General

Requirement # Unsupported

Costs 

(A) Reports for which no management decision had been 0 $0 

made by the commencement of the reporting period

(B) Reports issued during the reporting period 0 $0 

Subtotal (A+B) 0 $0 

(C) Reports for which a management decision was made 0 $0 

during the reporting period, including— 

(i) the dollar value of recommendations that were agreed $0 

to by management 

(ii) the dollar value of recommendations that were not $0 

agreed to by management 

(D) Reports for which no management decision has been 0 $0 

made by the end of the reporting period;
 

 

 

APPENDIX V:

OPEN 

RECOMMENDATIONS

The table below includes summary information regarding audit, inspection, and

evaluation reports issued before the commencement of the reporting period for which

there are outstanding unimplemented recommendations. There were no reports issued

before the commencement of the reporting period for which no management decisions 

had been made by the end of the reporting period or no comment was returned within

60 days.

Report and

Date Issued 

OIG 2017 Evaluation of the Farm Credit 

Recommendations

Open Total Cost Savings 

2 4 $0 

Administration’s Compliance with the Federal 

Information Security Modernization Act 

Oct. 27, 2017 

OIG 2018 Evaluation of the Farm Credit 4 5 $0 

Administration’s Compliance with the Federal 

Information Security Modernization Act 

Oct. 31, 2018

Total: 6 9 $0

The table below identifies recommendations made during previous reporting periods

for which corrective action has not been completed as of March 31, 2019.

Report and

Date Issued 

OIG 2017 Evaluation 

of the Farm Credit 

# 

1 

Recommendation

Description

To OIT (not released publicly)6

Administration’s 

Compliance with the 

Federal Information 

Security 

Modernization Act 

2 To OIT (not released publicly) 

Oct. 27, 2017 

6

 Information withheld from public disclosure pursuant to 44 U.S.C. § 3555(f).

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 20
Report and

Date Issued # 

Recommendation

Description

OIG 2018 Evaluation 2 OIT needs to develop and disseminate a privacy 

of the Farm Credit program with related plans, policies, and procedures 

Administration’s for the protection of PII and other sensitive data 

Compliance with the collected, used, maintained, shared, and disposed of 

Federal Information by information systems. The resources, roles, and 

Security responsibilities needed to implement the privacy 

Modernization Act program must be determined. 

3 OIT needs to develop and communicate policies and 

Oct. 31, 2018 procedures that identify the inventory of PII and other 

sensitive data collected, used, and maintained that 

require increased protection. 

4 OIT needs to formalize policies and procedures for: 

• Encryption of data at rest

• Encryption of data in transit 

• Limitation of transfer to removable media 

• Sanitization of digital media prior to disposal or 

reuse

5 OIT needs to develop policies and procedures related 

to preventing data exfiltration.

21 Farm Credit Administration | Office of Inspector General
 

INDEX OF 

REPORTING 

REQUIREMENTS

The table below is an index to IG Act reporting requirements. There were no contract 

audit reports issued during the reporting period that would be reportable under section

845 of the National Defense Authorization Act of 2008.7

Section Description Page

4(a)(2) Review of legislation and regulations 13 

5(a)(1) Significant problems, abuses, and deficiencies N/A 

5(a)(2) Recommendations for corrective action 6-8 

5(a)(3)

5(a)(4) 

Previous recommendations for which corrective action has 

not been completed 

Matters referred to prosecutive authorities

20-21 

N/A 

5(a)(5)

5(a)(6) 

Reports of information or assistance unreasonably refused 

or not provided 

Audit, inspection, and evaluation reports issued 

N/A 

17 

5(a)(7) Summaries of significant reports 6-9 

5(a)(8) Management decisions with respect to questioned costs 18 

5(a)(9)

5(a)(10) 

Management decisions on recommendations that funds be 

put to better use 

Reports issued before the reporting period for which no 

management decision has been made, for which no 

comment was returned, and for which there are 

19 

20 

5(a)(11) 

outstanding unimplemented recommendations 

Significant revised management decisions N/A 

5(a)(12) 

5(a)(13) 

Significant management decisions with which the IG 

disagrees 

Compliance of Agency financial management system 

7 

N/A 

5(a)(14)-(15) Peer reviews conducted by another OIG 15-16 

5(a)(16) Peer reviews conducted by the FCA OIG 15-16 

5(a)(17) Statistical tables for investigations and referrals 10

5(a)(18) Metrics for developing investigative statistics 10 

5(a)(19) 

5(a)(20) 

Investigations involving a senior government employee 

where allegations of misconduct were substantiated 

Instances of whistleblower retaliation 

N/A 

N/A 

5(a)(21) Attempts to interfere with OIG independence N/A 

5(a)(22)(A) 

5(a)(22)(B)

Closed audits, inspections, and evaluations not disclosed to 

the public 

Closed investigations involving a senior government

employee not disclosed to the public 

N/A 

11 

7

 Pub. L. 110-181 (Jan. 28, 2008) 

Semiannual Report to Congress | October 1, 2018 – March 31, 2019 22
 

 

REPORT FRAUD, WASTE, ABUSE, &

MISMANAGEMENT: 

Phone: (800) 437-7322 (Toll-Free) 

(703) 883-4316 

Fax: (703) 883-4059 

Email: fca-ig-hotline@rcn.com 

Mail: 1501 Farm Credit Drive 

McLean, VA 22102-5090 

To learn more about reporting wrongdoing to the OIG, please visit our 

website at https://www.fca.gov/about/inspector-general.