Credit Administration 

Office of Inspector General 

FARM CREDIT SURVEY REPORT 

ADMINISTRATION 

OFFICE OF 

INSPECTOR GENERAL 

Survey of 

Farm Credit System 

Institutions Regarding the 

Agency’s Examination Function 

First and Second Quarters

Fiscal Year 2022 

(October 1, 2021 - March 31, 2022) 

Issued July 18, 2022 
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Survey of Farm Credit System Institutions 

Regarding the Agency's Examination Function 

Fiscal Vear 2022 

First - Second Quarters Report 

(October 1, 2021 - March 31, 2022) 

Executive Summary 

Each fiscal year (FY) quarter, the Farm Credit Administration (FCA) 

Office of Examination (OE) identifies several Farm Credit System (FCS 

or System) institutions that can provide meaningful survey responses 

for that period. The Office of Inspector General (OIG) provides a survey 

report semiannually with two quarters of survey responses. This report 

includes the response data for the first and second quarters of FY 

2022, as well as some historical data for comparison. 

The OE identified 26 System institutions to survey for the first and 

second quarters of FY 2022 (October 1, 2021 – March 31, 2022). The 

OIG sent surveys to those institutions and 21 institutions completed 

the survey (an 81% response rate). 

Average numerical rating ranges and total average numerical ratings

for survey statements 1-10 are shown in the table below. A “1” reflects

a positive rating and a “5” reflects a negative rating. 

Average Numerical Ratings 

FY/ 

Quarter 

Average Numerical

Rating Range

Total Average

Numerical Rating 

FY22/2nd 1.5 – 2.31.9 

FY22/1st 1.6 – 2.21.9 

FY21/4th 1.4 – 1.91.6 

FY21/3rd 1.7 – 2.11.9 

Comments with any perceived negative feedback are listed separately 

for survey statements 1-10 and 13. We note that many of the negative 

comments appeared to be from smaller-sized institutions. 

The FCS institutions we asked to 

respond to the survey are those 

institutions that: 

1. Received a Report of 

Examination during the FY 

quarters; or 

2. Had significant examination 

activity and interface with OE

during the same period. 

The survey asks respondents to 

rate ten survey statements as: 

Completely Agree 1 

Agree 2 

Neither Agree nor Disagree 3 

Disagree 4 

Completely Disagree 5 

Does Not Apply 6 

The survey contains 13 statements, 

two of which were added in 2021 

to address the effectiveness and 

efficiency of communications for 

examinations conducted remotely

due to the pandemic. 
TABLE OF CONTENTS 

ACRONYMS and ABBREVIATIONS _____________________________________________1 

BACKGROUND AND METHODOLOGY __________________________________________1 

SURVEY RESULTS __________________________________________________________2 

EXAMINATION PROCESS ________________________________________________________________________2 

Statement #1__________________________________________________________________________________2 

Statement #2__________________________________________________________________________________4 

Statement #3__________________________________________________________________________________5 

Statement #4__________________________________________________________________________________6 

COMMUNICATIONS_____________________________________________________________________________7 

Statement #5__________________________________________________________________________________7 

Statement #6__________________________________________________________________________________8 

Statement #7__________________________________________________________________________________9 

Statement #8________________________________________________________________________________ 10 

Statement #9________________________________________________________________________________ 11 

Statement #10 ______________________________________________________________________________ 12 

GENERAL QUESTIONS _________________________________________________________________________ 13 

Statement #11 ______________________________________________________________________________ 13 

Statement #12 ______________________________________________________________________________ 14 

Statement #13 ______________________________________________________________________________ 15 

Request for OIG Contact ____________________________________________________________________ 16 
ACRONYMS and ABBREVIATIONS 

EIC Examiner in Charge 

FCA Farm Credit Administration 

FCS Farm Credit System 

FIRS Financial Institution Rating System 

FY Fiscal Year 

MRA Matter Requiring Attention 

OE Office of Examination 

OIG Office of Inspector General 

BACKGROUND AND METHODOLOGY 

Each fiscal year (FY) quarter the Farm Credit Administration (FCA) Office of Examination (OE) 

identifies several Farm Credit System (FCS or System) institutions that can provide meaningful

survey responses for that period. The criteria for including an FCS institution in the survey are: 

1. The institution received a Report of Examination during the FY quarter; or

2. There was significant examination activity and interface with an institution during the same

period. 

The Office of Inspector General (OIG) generally provides a survey report semiannually for two 

quarters of survey responses for the periods extending from October 1 through March 31 and 

April 1 through September 30. This report includes the response data for the first and second 

quarters of FY 2022. 

The survey asks respondents to rate eight survey statements from “1” (Completely Agree) to “5”

(Completely Disagree), or “6” if the statement does not apply. The rating choices are: 

Completely Agree 1 

Agree 2 

Neither Agree nor Disagree 3 

Disagree 4 

Completely Disagree 5 

Does Not Apply* 6 

*We do not include ratings of “6” in rating averages because a “6” will skew the numerical average

negatively even though the statement is not applicable to the institution.

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For survey statements 1-10, we provide the average numerical ratings for the subject FY quarters

and, for comparison, the two most recent FYs for which survey data was collected (FY 2019 and

FY 2021 for this report). 

Survey statements 1-4 pertain to the examination process generally and statements 5-10 pertain 

specifically to communications during the examination. Statements 11-13 solicit narrative 

feedback on the examination process. Respondents may submit comments for each of the 13 

survey statements. 

The report includes narrative responses verbatim, except information identifying the institution or 

examiners has been removed (e.g., names). Additionally, spelling and punctuation errors have 

been corrected and some acronyms or abbreviations have been spelled out. Any bracketed text 

is for the purpose of removing information that identifies an institution or an examiner or 

providing clarification to a response. Comments with perceived negative feedback are listed 

separately for survey statements 1-10 and 13. 

At the end of the survey we ask whether the respondent would like the OIG to contact the 

institution confidentially to discuss the submitted responses. 

SURVEY RESULTS 

EXAMINATION PROCESS 

Statement #1 

The scope of examination activities was focused on areas of risk to the institution and

appropriate for the size, complexity, and risk profile of the institution. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.9 2.2 2.0* 

2021 N/A 1.9 1.8 1.7 1.8 

2019 1.7 2.3 2.0 1.8 2.0 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• Audit seemed somewhat focused on the areas that are relevant to our business. 

• Scope appeared to be appropriate. 

• The audit seemed appropriately focused on the areas that are relevant to the current 

business and technology risk areas. 

• The exam covered a significant range of areas and was appropriate for our institution. In 

addition, the topics from the National Oversight Plan for Fiscal Year 2022 (dated October 

4, 2021) were within the exam scope. 

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• The scope of examination appeared appropriate. 

• The board feels the focus of the exam was well scoped. 

• The scope is adequate for our institution. 

Comments perceived with negative feedback: 

• We are concerned that FCA is viewing all institutions through a narrow lens with the 

expectation that the smaller institutions should be staffed and structured like the mega 

institutions. It would seem logical that the regulator would approach their expectations 

from a risk approach. When reviewing the ranking of all 67 institutions by loan volume size 

as of 12/31/21, the 20 largest institutions represent 80.3% of the System's volume. The 

largest 30 institutions represent 87.8% of the system's exposure. It seems reasonable the 

operational and credit risk in the largest 20 would be far different than those of lesser size, 

and therefore, would be structured and staffed accordingly. Obviously, we are not privy to 

the structure and staffing of other institutions but would encourage FCA to be mindful of 

the needs of a smaller institution such as ours. 

• The scope of examination was generally appropriate for the size, complexity and risk 

profile of the institution; however, in regards to Audit, the benefit gained from application 

of [Institute of Internal Auditors] Standard 1100 to a small institution like ours which does 

not have an internal auditor on staff and which outsources all of its internal audit functions 

to an independent third party, that has oversight from and reports directly to the audit 

committee, for the purpose of creating more independence was challenging to 

understand. We note that the requirement to create and implement an audit coordinator 

role will increase the cost of doing business at a small institution. While we accept the 

findings of the exam and will remedy the items included as matters requiring attention

(MRAs), we encourage FCA to continue to consider and evaluate the unique risks and 

challenges that small institutions face, specifically related to regulatory burden and exam 

compliance. We appreciate the FCA board making small institution challenges a priority in 

2021 and creating a Small Association Workgroup in 2022. 

• The areas covered were relevant, appropriate and aligned with the National Oversight Plan. 

However, some of the examination activities did not seem aligned with the size, complexity 

or risk profile of our institution. For example, FCA's definition of small institutions has been 

less than $1 billion for 25 years. FCA should consider modernizing the small institution 

definition to at least $3 billion asset size and adjust examination scope accordingly. 

• Generally, we agree with this statement but the double capitalization under which we have 

to operate is inconsistent with the real risk involved. 

• While this is true, we feel the FCA has a difficult time in examining institutions that are just 

over $1 billion in assets and seem to expect them to operate like a larger (greater than $5 

billion) institution. 

• Generally agree, but some aspects of the examination seemed to be perfunctory as 

opposed to risk-based. In other words, examination scope/focus seems to be 

programmatic as opposed to tailored to the specific risk profile of the institution. 

• It was a little overboard considering our small size but policies are policies. 

3 
 

 

 

 

 

 

Statement #2 

Examiners appropriately applied laws, regulations, and other regulatory criteria to 

examination findings and conclusions. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 2.2 1.9 2.0* 

2021 N/A 1.7 1.9 1.5 1.7 

2019 1.8 2.1 2.1 1.6 1.9 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• No material exceptions were noted. 

• When appropriate the audit cited specific regulations for us to better understand the 

reasoning for the findings and to help us remediate the findings as well. 

Comments perceived with negative feedback: 

• This audit applied regulations and regulatory criteria differently from previous exams. 

• Examiners clearly communicated the laws, regulations and other regulatory criteria related 

to the examination finding and conclusions. It would benefit the Farm Credit System to 

have some time to respond to and/or implement published guidance prior to being 

evaluated on it. In some cases, we were examined based on guidelines or information that 

was recently published or had not been published by FCA. 

• Several MRAs were not based on laws or regulations but were identified and sourced from 

recent examination manual language. As a result, there is no current guidance given as to

how to address exam manual updates within our processes. In fact, the published 

workpapers used by the exam team did not reference the exam manual update for which 

the criticism was sourced. 

• We do not completely agree with some comments made by the examiners as they were 

not able to provide specific referenced guidance for areas that were stated as needing 

enhancement/improvement; specifically in the audit comment where granularity was 

recommended. 

• While we believe this to be true for the most part, we did have a difference of opinion on 

one issue. The issue was with regard to whether a carve out tranche of a loan constituted 

a completely separate loan (as the examiners believed) or was a part of an existing loan 

(which we believed). The difference of this interpretation determined if additional approval 

from [institution name removed] was required. 

• Generally agree, but regulations and "other regulatory criteria" are in some cases vague or 

ambiguous, which puts examiners in the position of having to apply judgement. Having to 

respond to examiner judgement makes compliance difficult, as such judgement might vary 

from examination to examination and/or conflict with the judgement of management who 

is better positioned to make the judgment calls. 

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• With regard to ERM [Enterprise Risk Management], the examiners appeared to be basing

their assessment on exam manual updates that were not yet published. 

• The examination team has fairly high turnover leading to less tenured interpretation of 

regulations. This becomes an issue regarding whether an item is really an MRA. There are 

also different exam teams for the compliance exam (HEA) [horizontal examination activity]

versus the safety and soundness exam. The safety and soundness examiners were more

seasoned than the HEA examiners. 

Statement #3 

The matters requiring attention and any supervisory agreement with FCA assisted the board

and management in addressing the risks of the institution. 

Average Numerical Rating s by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 2.1 2.3 2.2* 

2021 N/A 2.0 1.7 1.7 1.8 

2019 2.0 2.4 2.4 1.9 2.2 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• Agree. 

• Agreed with MRAs and board believes all matters were sufficiently resolved. 

• Members of the Office of Examination participated in a board meeting, in person, to 

discuss and review the matters requiring management's attention and helped address the 

reasoning for the findings. 

• The MRAs appropriately assisted the board and management in addressing the risks within 

our organization. 

• Yes, the MRAs assisted the board and management in addressing institution risk. 

• Good notes and suggestions on any MRAs received. 

• We agree that several of the steps in our supervisory agreement will aid us in correcting 

our deficiencies and we appreciate the cooperative attitude the supervisory committee 

has. 

• Management and the board are aware of the institution’s risk profile. MRAs were limited 

and generally pertained to a need to better document certain risk management activities. 

Comments perceived with negative feedback: 

• The MRAs were appropriate but were mostly technical in nature (immaterial risk). Our 

board and audit committee would benefit from an MRA risk rating system (high, medium 

or low). Listing all findings as MRAs seems to be overstating the risk for some MRAs. 

• MRAs rarely, if ever, assist the board and management in addressing risks in their 

institutions. Well managed and governed organizations should have adequate policies,

procedures, SOPs, etc., to proactively, assess, quantify, prioritize, and effectively manage 

5 
risk and not rely on regulatory enforcement/required corrective actions as a means of risk 

mitigation. 

• Generally, we agree but think we manage our risks appropriately and some requirements

are needlessly restrictive. Further, the MRAs were more observational, which while 

assisting, did not appear to rise to the level of MRA. 

• Although specifically recommending risk items being included as the first level risk; the 

examiners could NOT provide specific guidance or cite a reference as to why it was being 

recommended. 

• Examination findings/MRAs do not always adequately balance the risk with the implicit 

and explicit costs involved in addressing the risk. 

• As mentioned before, there is high turnover in the FCA exam teams so there was an issue 

regarding interpretation of regulations from the less seasoned examiners and whether it 

was really an MRA. 

Statement #4 

The examiners were professional and efficiently conducted examination activities. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.8 1.5 1.6* 

2021 N/A 1.2 2.0 1.4 1.5 

2019 1.6 1.5 1.8 1.3 1.6 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• Agree. 

• We appreciated their professionalism. 

• Everyone was professional in their communications, actions and requests for data. [Name 

removed] was especially helpful at providing the context necessary for the examination 

focus and understanding of the technical nature of our Information Technology responses. 

• This was our second off-site review and this review was more efficient than the first time. 

The examination team was well-organized and communicated professionally. 

• The exam staff appropriately communicated their activities including issues and findings 

as their work was completed. 

• The [institution] appreciates the partnership it has with the FCA. 

• Our exam team is very good to work with. We were pleased with the FCA team’s approach 

to the audit, professionalism, focus on issues that mattered, and ability to clearly 

communicate their findings and suggestions for improvement. 

• Examiners were professional during the examination. 

6 
 

 

Comments perceived with negative feedback: 

• [Name removed} and [name removed] our co-Examiners in Charge (EICs) were very 

professional. However, I believe through no fault of their own, the exam/exams process

extended from October until January before a close out was completed plus, we 

underwent a "horizontal compliance" exam from mid-August through mid-September and

an IT exam. I understand statutory timing of these things but, it would be nice to spread 

them out a bit. They take a tremendous amount of time and effort from our staff to work 

with exam personnel. 

• The period the exam was completed was excessive. A typical examination would be a 4-

week timeline, however, this exam began in July and continued to be piecemealed through

November requiring repeated refocus of our management team on exam criteria. The

review team seemed to be disconnected based on past examinations. The final report was 

provided in December, resulting in a 6-month exam. 

COMMUNICATIONS 

Statement #5 

Communications between the Office of Examination staff and the institution were clear, 

accurate, and timely. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.8 1.7 1.8* 

2021 N/A 1.7 2.0 1.7 1.8 

2019 1.6 2.3 1.9 2.0 2.0 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• No problems noted. 

• The examination team's communications were clear, accurate and timely. 

• [Name removed} and [name removed] did a nice job communicating with us. 

• The [institution] appreciates the partnership it has with the FCA. 

• Always good communication. We value the relationship we have with our local FCA EIC 

and supervisor. 

• There was professional and timely communication between the examiners and the 

[institution]. 

• The exam team was professional throughout the examination process. 

Comments perceived with negative feedback: 

• EIC communication was different than reflected in the report of examination. 

• Communication between exam staff and institution staff was very good; however, we did 

want to mention the need for timely agendas. We did not receive an agenda for the initial 

7 
 

call with our Audit Chair and another agenda (IT) was received very late. Agendas provided 

timely are helpful in facilitating meaningful conversations and responses. 

• Communications between the Office of Examination staff were clear and accurate. It would 

be beneficial if more notice was given for their requests, giving us an opportunity to ensure 

we are providing them with accurate, meaningful and timely data. 

• Communication was very open and valuable. One MRA in the Appendix was not 

communicated as an MRA during the Exit meeting but was then specifically pointed out 

when the final exam draft was provided for our cursory review. Also, it would have been 

helpful for our staff to have the exam draft to review for more than a very short period of 

time (Friday afternoon to Monday close of business). 

• The exam team communicated regarding their specific questions, but not in an effort to 

keep the institution informed of progress. 

• While the communications were clear and accurate, the timeliness was considerably 

lacking. We knew in November they were going to put us under supervision and were told 

we would have that letter the first of December. That was pushed back to the end of 

December, then January and finally February. We received the letter in mid-February and

one of the conditions required a disclosure in our financials to be approved by the 

supervisory committee. When we received the letter, we had a week to provide our 

financials to [name removed] and the [institution name removed]. We provided the 

footnote for approval within days but FCA took several more days for approval and we did 

not meet our deadlines. It should never have taken us 3 months after our examination 

report to receive the supervisory action letter. 

Statement #6 

Examination communications included the appropriate amount and type of information to

help the board and audit committee fulfill their oversight responsibilities. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.6 1.9 1.8* 

2021 N/A 1.4 1.8 1.4 1.5 

2019 1.8 2.0 1.9 2.0 1.9 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• Agree. 

• Members of the Office of Examination participated in a board meeting, in person, to 

discuss and review the matters requiring management's attention and review their overall 

findings which helped address the reasoning for the findings. 

• The board and audit committee were given the opportunity to participate during the exam. 

The presentation of the examination report was appropriate and informative. 

8 
 

 

 

 

 

• Exams primarily serve as an independent review that provides the board and audit

committee some level of reassurance that the representations of management concerning

the organization's performance and adherence to regulations are accurate. 

• Examination reporting adequately provided appropriate information regarding the exam. 

Comments perceived with negative feedback: 

• The communications were appropriate for the board and audit committee to fulfill their

oversight responsibilities; except for the lack of being provided specific reference to some 

of the citations for the items noted in the MRAs. 

• Examination communications were clear/understandable but given the disconnect 

between the risk and cost as described above [in response to another statement], it is not 

clear that examination-related communications materially contributed to the fulfillment of 

board or audit committee oversight responsibilities. 

Statement #7 

Examiners fairly considered the views and responses of the board and management in

formulating conclusions and matters requiring attention. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.9 1.6 1.8* 

2021 N/A 1.7 1.8 1.5 1.7 

2019 1.5 1.9 2.3 1.7 1.9 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• [The institution’s] management and the board developed responses to items in the exit 

outline prior to issuance of the report of examination. Examiners formulated conclusions. 

• No problems noted. 

• The examiners are always willing to engage in in-depth discussions with the board of 

directors, management team and technology staff, accepting feedback from all parties. 

They are open to listening and being challenged about specific findings. 

• The examination team was open to dialogue, including the MRAs. 

• Examiners fairly considered feedback from our board and management in their final exam. 

• Our assigned Portfolio Risk Manager and EIC both demonstrated leadership in hearing 

both sides of discussions and formulating balanced conclusions. 

Comments perceived with negative feedback: 

• Although the exam team provided an exit conference to management and board 

members, the exam team initially refused to accept or receive comments from 

management. Only after management stressed professional courtesy in allowing 

management responses to exam findings, the exam team agreed to receive a response. 

9 
 

 

 

However, the supervisory examiner indicated that management responses would not be

considered. Ultimately, management responses were provided and considered by the 

exam team, and matters requiring attention were modified and/or removed. But again, 

management had to insist that examiners consider allowing responses. We have never 

seen this type of behavior before regarding FCA. 

• Although there was open communication amongst the examiners and the board/audit

committee; there were some unanswered questions as so to why the examiners stated 

certain items without providing specific reference to a regulation for items stated as 

needing improvement/enhancement. 

• There was limited consideration given to the size of our institution and the maturity level 

of our audit and review program. The MRAs in this area, while appropriate in relation to 

the spirit of the regulations, seemed rigid for smaller institutions with resource restrictions. 

Efforts made in this area from the prior examination should have been given more merit. 

Statement #8 

FCS-wide guidance from the Office of Examination was proactive and helpful. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 2.0 2.2 2.1* 

2021 N/A 1.8 2.0 1.9 1.9 

2019 1.9 2.4 2.1 2.0 2.1 

*FY 2022 average was calculated using aggregated response data. Prior FY 

averages were calculated using the average of the quarterly averages shown 

in the table. 

Comments: 

• The pace of regulation has accelerated under this FCA board. FCA issued 90 Exam Manual 

Updates, Information Memorandums, Proposed Rule and Publications in a twelve-month 

period. 

• The Office of Examination's National Oversight Plan as well as other guidance such as that 

pertaining to operations during the Pandemic were helpful. 

• The annual examination areas of focus are the most helpful to us. 

• System-wide guidance from the Office of Examination was helpful. 

• Yes, from the perspective of the rules and procedures in which they must operate. 

• Yes, receiving this information was very helpful with being proactive with changes. 

Comments perceived with negative feedback: 

• Inconsistent from past examinations. 

• We would like to see more proactive and consistent guidance provided to us and the 

institutions we serve and not just at examination time. 

• The guidance is helpful, but as stated above [in response to another statement] it would 

be incredibly beneficial for smaller and mid-size institutions to have resources to help 

them comply with the regulatory expectations. Other governing regulatory bodies provide 

10 
 

 

 

 

small entity compliance guides and/or varied requirements for smaller institutions. A 

similar practice would be advantageous for the FCA to consider. The regulatory burden is 

often onerous for smaller institutions. 

Statement #9 

Communications with FCA examination staff were effective for those examinations that 

were conducted entirely remotely. 

Average Numerical Ratings by FY Quarter 

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average 

2022 1.7 1.7 1.7* 

2021 N/A 1.3 2.0 1.6 1.6 

2019 Not applicable – statement added in FY 2021 

*FY 2022 average was calculated using aggregated response data. FY 2021 

average was calculated using the average of the quarterly averages shown in 

the table. 

Comments: 

• We appreciate full and open communications with FCA. No problems noted. 

• While it was effective, we encourage on-site visits as COVID concerns subside. Institution 

staff is better able to communicate and provide clarity surrounding documents and

processes when the exam is held in-person. 

• Communications with the examination staff were effective. We do hope that future 

engagements are performed on-site to help the overall effectiveness of the 

communications between both parties. 

• The FCA exam staff effectively utilized various forms of communication, including videoconference calls while working remote. 

• As good as any in-person exam. 

• The [institution] appreciates the ability of the FCA to conduct their examination remotely 

as it causes less disruption on the part of staff. 

• Remote works well. 

• The examination communications were effective. 

Comments perceived with negative feedback: 

• EIC resigned from FCA prior to presentation of the report. Uncertain as to communication

between the EIC and remaining examiners. 

• The examination team was effective in utilizing technology to conduct meetings. In the 

future, we would appreciate examination staff to abide by a business casual dress code 

and utilize their cameras [in a virtual environment] to enhance engagement. 

• Communication with FCA examination staff was minimally acceptable while completing 

the examination remotely. Our preference for future examinations is for exams to be 

completed on site to improve communications. We believe that the remote examination 

created a great deal of disconnect. 

11 
• While we understand much of this was driven by the pandemic and staffing, the breaking 

up of sections of the exam and rotation of staff resulted in a prolonged review that held 

some challenges in ensuring coordination and communication were always timely. 

Statement #10 

Communications with FCA examination staff were efficient for those examinations that 

were conducted entirely remotely. 

 

 

 

Average Numerical Ratings by FY Quarter 

FY 

First 

Quarter 

Second 

Quarter 

Third 

Quarter 

Fourth 

Quarter 

FY 

Average 

2022 1.6 1.8 1.7* 

2021 N/A 1.3 2.1 1.8 1.7 

2019 Not applicable – statement added in FY 2021 

*FY 2022 average was calculated using aggregated response data. FY 2021 

average was calculated using the average of the quarterly averages shown in 

the table. 

Comments: 

• Communication was sufficient. 

• Appeared to be efficient. 

• Communications with the examination staff were efficient. We do hope that future 

engagements are performed on-site to help the overall efficiencies of the communications 

between both parties. 

• Remote communication with the exam team was efficient. 

• The FCA exam staff efficiently and effectively conducted their work as they operated in a 

remote status. We believe future remote FCA review work should be considered as it is an 

efficient and effective means of carrying out exam work. 

• Same as 9a. above. [As good as any in person exam.] 

• The [institution] appreciates the ability of the FCA to conduct their examination remotely 

as it causes less disruption on the part of staff. 

• While we do enjoy the in-person interaction, we feel the remote method is as effective for 

exam activities. 

• The examination communications were efficient. We appreciated that the final report 

delivery was not a reiteration of the report, but a focused discussion on the core issues. 

• It was effective. 

Comments perceived with negative feedback: 

• The first request for information came from the EIC on October 1st and the final results of 

the exam were not presented to the directors until the February 22nd. We recognize there 

are challenges with an entirely remote exam, yet the length of time was excessive and 

placed a significant strain on the institution. The examiners scheduled a conference call 

with the audit committee to discuss the preliminary results of the exam. However, FCA

provided an outline only two hours prior to the conference call, allowing little time for 

review before the discussion. 

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• Communication with FCA examination staff was minimally acceptable while completing 

the examination remotely. Our preference for future examinations is for exams to be 

completed on site to improve communications. We believe that the remote examination 

created a great deal of disconnect. 

GENERAL QUESTIONS 

Statement #11 

What aspect of the examination process did you find most beneficial? 

• Communication between the examiners, the board, and management was very efficient 

and timely. 

• The August compliance exam provided real value to our team. The examiners identified 

some areas that needed improvement and offered several solutions to consider in 

addressing the weaknesses. 

• Discussion of MRAs. 

• Positive and beneficial communications with our regulator. 

• We found preliminary discussions regarding initial findings with the EIC to be beneficial. 

This allowed the institution the opportunity to provide additional clarity on our processes 

and documentation. We also found it beneficial that members of the exam team visited 

our institution in person to deliver the final report. 

• The ability to discuss the relevance and practical risks for the technology related 

examinations. The mutual respect for each other between both entities. 

• The board and management found the exit conference to be informative. The material was 

presented in a professional manner and was easy to understand. The board also 

appreciated the examination team's engagement during executive session. 

• The specific areas of cybersecurity, model risk management, information security and 

technology, and asset liability management were most beneficial along with the 

constructive communication process. 

• [Name removed] did a great job in managing the exam process. 

• The final report of examination was beneficial. 

• The identification of those areas requiring attention; albeit there were no major areas to 

address, which provided reassurance on existing controls in place. In addition to the 

written report, having the in-person discussion with the FCA was valuable. 

• The open and consistent communication from our EIC and exam staff. 

• Recommendation of best practices. 

• The interactive discussions throughout the exam. 

• We found it beneficial when specific regulatory references were cited for various 

observations. 

• 1) Good relationship with, and level of understanding of, examiners who have been 

involved with our examination over multiple examination cycles. 2) Willingness of 

examiners to engage with management when requested. 3) Coordination of 

documentation across examination teams, which reduces duplication. 

13 
• The board appreciates the System-wide view that FCA examiners are able to bring and

share with us. 

• Communication between the FCA exam team and both the institution staff and board were 

clear and concise. Meeting with the FCA exam team to review the exam report is beneficial 

because it provides the board with the opportunity to voice concerns and ask for feedback

which is integral to oversight. 

• The FCA staff performed the exam remote during the COVID era not creating an exposure 

issue. 

Statement #12 

What aspect of the examination process did you find least beneficial? 

• The time spent reviewing and discussing matters not directly related to the safety and

soundness of the institution, such as YBS [young, beginning, and small farmers and 

ranchers] (i.e., new rule, expectations, etc.). 

• The expectation regarding total independence of the audit manager role from a valueadded functional position versus an academia perspective. 

• Remote exam and not face-to-face audit, plus resignation of lead EIC with whom we had 

numerous communications. 

• We refer back to our comments for Question 1. Small institutions face challenges in terms 

of regulatory cost and exam compliance and a "one size fits all" approach is not prudent.

Our current example is the requirement for the implementation of an audit coordinator 

role. 

• Going through the examination process remotely presented some challenges. However, 

we do understand the current environment and circumstances we are facing today. 

• The Financial Institution Rating System (FIRS) ratings were established to evaluate and 

categorize safety and soundness of institutions in a uniform and comprehensive basis. The 

subjective influence placed on FIRS ratings by examiners across the country have 

diminished their effectiveness. Consistency on the rating system would be helpful. Our 

institution's FIRS rating were so subjective that our examination team could not properly 

discuss the ratings with the board. Talking points should be provided to an institution 

when a rating is changed or a rating is not a "1" rating. 

• Three examinations in a 6-month window is a bit much. 

• The focus of the exam, as driven by Washington, DC, in my view, sort of misses the mark 

in terms of addressing risk to the institution. That's not to discount the areas examined, it 

just seems to me that there are others of much greater risk that didn't get the attention 

they probably should have. 

• FCA's e-file portal appears to be confusing to the examiners. We provide information 

through the e-file portal routinely and upon request. However, examiners seem to have 

challenges in retrieving or utilizing information uploaded. This is least beneficial to the 

institution due to time spent providing the same documents multiple times through the 

e-file portal. 

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• Some of the guidance coming from FCA and during the exam leads our board and

management to feel that the only way to survive is to get much larger. The requirements 

take staffing levels we just can't support for our size. 

• Time. 

• Some discussions were one-sided, and the examiners did not sufficiently provide the 

board/audit committee corroborating evidence and a referenced citation and/or 

regulation so they could fully understand the audit MRAs. 

• It often felt like there was a delay between the time we asked a question or for clarification 

and the time we received a direct answer. Perhaps this was due to the EIC consulting others 

prior to providing a response. 

• 1) Proposal of non-value-add recommendations and/or recommendations that reach 

beyond regulatory criteria. 2) In matters of judgement (and not regulatory compliance), 

continuing to press issues in which management and the examiner disagree. 

• Each part of the process is beneficial and useful to the board and institution, especially the 

virtual wrap-up meeting. 

Statement #13 

Please provide any comments from the Board as a whole regarding the examination process 

not provided in the preceding responses. 

Comments: 

• The process implemented by FCA examiners, both onsite and remotely, has been 

satisfactory. 

• The board was pleased with the process and the report. 

• The board concurs with all statements above. 

• The communication and discussion on exam findings and materiality in determining the 

resulting MRAs are appreciated. 

• The board appreciated the presentation of the final report of examination by the examiner 

and supervisor. 

• The board is pleased with the exam and appreciative to FCA for the communication. 

• The process and examiners were very respectful and helpful. 

• Overall, the examination was professional and provided beneficial feedback to 

management and the board/audit committee. 

Comments perceived with negative feedback: 

• We encourage FCA to evolve their examination process beyond a one-size-fits-all 

approach. We are a small institution. Focusing on risk areas that address our specific risks 

would be more efficient and help address a growing regulatory burden created by exam 

activities that should adjust based on size, complexity and risk profile. 

• We encourage the FCA to evolve their examination process beyond a one-size-fits-all 

approach. [The institution] services a group of small institutions (less than $10 billion in 

assets) collaborating on many aspects of our business (accounting, technology, 

participations, audit programs, etc.). This collaboration is essential for us to address a 

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growing regulatory burden created by examination activities that should be adjusted 

based on size, complexity and risk profile of the institution(s). 

• 1) Comments on question 12 sum up the process. Recommendations that exceed 

regulatory statute with ambiguous and subjective application of regulatory judgement 

creates a culture of uncertainties among two organizations with a common mission. 2)

Findings are not always consistent from one examination to another. Many findings are 

interpreted differently from one examiner to another. Some findings do not relate 

appropriately to the risk. 3) The overall process and report to the board was complete and 

accurate and professionally presented. 4) The time spent with the EIC and Portfolio Risk 

Manager with the committee chairs was effective and done professionally. 

• The increase in the number of examinations is a regulatory issue but results in a more 

costly and burdensome issue for the institution and its members. Oversight and review of 

processes are invaluable but should be prioritized with key focus areas not just added on

top of current regulations. 

Request for OIG Contact 

Would you like the Office of Inspector General to contact you confidentially to discuss your

survey responses and/or the examination? 

None of the institutions surveyed for this report indicated that they would like a call from the OIG. 

16 
 

 

 

Farm Credit Administration 

Office of Inspector General 

REPORT FRAUD, WASTE, ABUSE, & 

MISMANAGEMENT 

Fraud, waste, abuse, and mismanagement in government concerns everyone: Office

of Inspector General staff, Farm Credit Administration employees, Congress, and the 

general public. We actively solicit allegations of any inefficient and wasteful

practices, fraud, and mismanagement related to FCA programs and operations. You

can report allegations to us in several ways: 

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.