Office of

Inspector General

Semiannual Report to the Congress

October 1, 2009

through

March 31, 2010

Number 42

April 2010
Farm Credit Administration Office of Inspector General

1501 Farm Credit Drive

McLean, VA 22102-5090

(703) 883-4030

April 21, 2010

The Honorable Leland A. Strom

Chairman of the Board

Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102-5090

Dear Chairman Strom:

Enclosed is the semiannual report on the activities of the Farm Credit Administration’s (FCA or 

Agency) Office of Inspector General (OIG) for the period October 1, 2009 through March 31, 2010. 

This is the forty-second report since the establishment of the OIG on January 22, 1989. 

I am submitting this report in accordance with the Inspector General Act of 1978, as amended (IG

Act). Section 5(b) of the IG Act requires that you send this report to the appropriate Congressional 

committees and subcommittees within 30 days after the date of this transmittal, accompanied by 

management’s report on the status of audit, inspection, and/or evaluation action items. 

During this reporting period, the OIG issued one audit report. The OIG contracted with the Bureau

of the Public Debt for Brown & Company CPAs, PLLC, to perform the audit of FCA’s financial 

statements for fiscal year 2009. The audit delivered an unqualified opinion and was issued 

November 4, 2009. Please refer to page 6 for further information.

Also, the OIG’s annual evaluation of the Agency’s compliance with the Federal Information Security 

Management Act (FISMA) was completed. This annual evaluation was conducted by the OIG’s 

Senior Information Technology Auditor and the report was issued November 18, 2009. There were 

no significant deficiencies in FCA’s information security program and the FISMA report did not 

contain any recommendations or agreed-upon actions. Please refer to page 7 for further 

information.

Additionally, one audit and two inspections were initiated. The audit is of FCA’s and the Office of 

Secondary Market Oversight’s regulation and policy development processes. The inspections are 

of the Agency’s compliance with the Government in the Sunshine Act and the Agency’s process for 

reviewing, tracking, and responding to complaints from borrowers of the Farm Credit System. All 

three remain ongoing. Please refer to page 7 for further information.
2

If you have any questions, please call me at 4241 or 4030. I look forward to continuing a positive 

relationship between the OIG and your office, which I view as a partnership, striving to strengthen 

FCA operations.

Respectfully,

Carl A. Clinefelter

Inspector General

Enclosure
TABLE OF CONTENTS

EXECUTIVE SUMMARY.........................................................................................1

BACKGROUND................................................................................................... 2

FARM CREDIT ADMINISTRATION............................................................................2

FARM CREDIT SYSTEM....................................................................................... 2

MANAGEMENT AND PERFORMANCE CHALLENGES................................................3

FARM CREDIT SYSTEM.................................................................................................3

 SAFETY AND SOUNDNESS.......................................................................................3 

 MISSION.................................................................................................................3

FARM CREDIT ADMINISTRATION............................................................................4

 AGRICULTURAL ECONOMIC DOWNTURN.................................................................4

 AGENCY GOVERNANCE...........................................................................................4

 STRATEGIC PLANNING.................................................................................... 5

 HUMAN CAPITAL............................................................................................. 5

 LEVERAGING TECHNOLOGY............................................................................ 5

AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED......................................6

INDEPENDENT FINANCIAL AUDIT FOR FY 2009...........................................................6

FEDERAL INFORMATION SECURITY MANAGEMENT ACT

 EVALUATION FOR FY 2009................................................................................7

AUDITS AND INSPECTIONS IN PROGRESS............................................................. 7

AUDIT OF FCA’S AND OSMO’S REGULATION AND POLICY DEVELOPMENT PROCESSES ..... 7

INSPECTION OF FCA’S ADHERENCE TO THE GOVERNMENT IN THE SUNSHINE ACT ..........7

INSPECTION OF FCS BORROWER COMPLAINT PROCESSING .......................................7

STATUS OF UNIMPLEMENTED RECOMMENDATIONS.............................................. 8

OIG OBSERVATIONS ISSUED................................................................................ 8

INVESTIGATIONS.................................................................................................9

LEGISLATION AND REGULATIONS........................................................................9

OTHER ACTIVITIES..............................................................................................11

QUARTERLY SURVEY OF FARM CREDIT SYSTEM INSTITUTIONS..................................11

STAFF PARTICIPATION IN ACTIVITIES OF THE PROFESSIONAL COMMUNITY...................11

STAFF PARTICIPATION IN AGENCY ORGANIZATIONS................................................ 12

STAFF DEVELOPMENT.......................................................................................12

ANNEX...............................................................................................................12

APPENDICES

APPENDIX A – INDEX OF REPORTING REQUIREMENTS..............................................13

APPENDIX B – AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED.......................14

APPENDIX C – REPORTS WITH QUESTIONED COSTS................................................ 15
APPENDIX D – REPORTS WITH RECOMMENDATIONS THAT FUNDS

 BE PUT TO BETTER USE...............................................................16

APPENDIX E – FCA ORGANIZATIONAL CHART..........................................................17

APPENDIX F – OFFICE OF INSPECTOR GENERAL ORGANIZATIONAL CHART....................18

APPENDIX G – GLOSSARY OF TERMS......................................................................19
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

1

EXECUTIVE SUMMARY

This Semiannual Report to the Congress summarizes the activities and 

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

Inspector General (OIG) for the period October 1, 2009 through March 31, 2010. 

The OIG’s efforts were directed toward implementing the OIG’s fiscal year (FY) 2010

strategic and operational plan and budget; performing audits, inspections, and 

evaluations of FCA programs and operations; conducting investigations, as 

necessary; independently and confidentially surveying Farm Credit System (FCS or 

System) institutions regarding the effectiveness of the Agency’s examination function 

and examiners; and providing objective, independent reporting and counsel to the 

Agency Chairman on FCA programs and operations.

During this reporting period, the OIG issued one audit report. The OIG contracted 

with the Bureau of the Public Debt (BPD) for Brown and Company CPAs, PLLC 

(Brown & Co.) to perform the audit of FCA’s financial statements for FY 2009. The 

audit delivered an unqualified opinion and was issued November 4, 2009. See page 

6 for further information. 

Also, the OIG issued an evaluation report on the Agency’s compliance with the 

Federal Information Security Management Act (FISMA). The results of the 

evaluation revealed that FCA has an effective information security program that 

continues to mature. There were no significant deficiencies in FCA’s information 

security program and the FISMA report did not contain any recommendations or 

agreed-upon actions. This evaluation was conducted by the OIG’s Senior 

Information Technology (IT) Auditor. See page 7 for further information.

Also initiated during this period were one audit and two inspections. The audit is of 

FCA’s and the Office of Secondary Market Oversight’s regulation and policy 

development processes. One inspection is of the Agency’s compliance with the 

Government in the Sunshine Act. The other inspection is of the Agency’s process 

for reviewing, tracking, and responding to complaints from borrowers of the FCS. All 

three remain ongoing. See page 7 for further information.

Additionally, the OIG issued two quarterly reports and one FY summary report to the 

Chief Examiner and FCA Chairman on results of OIG surveys of System institutions 

regarding the examination function and the examiners. These reports were for the 

quarters ended September 30, 2009 and December 31, 2009. The FY summary 

report was for the FY ended September 30, 2009.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

2

The OIG maintains five positions: the Inspector General (IG), a General Counsel, a 

Senior Auditor, a Senior IT Auditor, and an Administrative Assistant. Appendix E

and Appendix F reflect the organizational structure of FCA and the OIG, 

respectively.

BACKGROUND

Farm Credit Administration

The FCA is an independent Federal agency of the United States government 

responsible for the regulation and examination of FCS institutions chartered under 

the Farm Credit Act of 1971, as amended (Farm Credit Act). FCA is also a 

“designated Federal entity” within the meaning of the Inspector General Act of 1978, 

as amended (IG Act). 

As a non-appropriated agency, FCA funds its expenses primarily through 

assessments to the institutions it regulates. The Agency’s FY 2010 budget is

$54,832,588. Assessments by FCA to FCS institutions for FY 2010 total 

$49,100,000, with other sources of funding totaling $5,732,588. The OIG’s FY 2010

budget is $1,088,219. 

At the end of this reporting period, FCA had 274 employees, about half of which are 

examiners located in five field offices. At the end of the prior semiannual reporting 

period, the Agency also had 274 employees. While the total number of employees 

remained constant, the Office of Examination (OE) has been actively recruiting and 

hiring entry-level examiner trainees. Even though the OE has been hiring, normal 

Agencywide attrition accounts for the overall number of employees remaining 

constant. 

Farm Credit System

The FCS is a Government-sponsored enterprise comprised of 5 Farm Credit banks 

and 88 lending associations in all 50 states and Puerto Rico that primarily make 

loans to agriculture. The System raises funds by selling securities in the national 

and international money markets through its special purpose entity, the Federal 

Farm Credit Banks Funding Corporation. These securities are not guaranteed by 

the U.S. Government. 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

3

The Federal Agricultural Mortgage Corporation (Farmer Mac), also a part of the 

FCS, is chartered by the Federal government to provide a secondary market for 

agricultural mortgage loans. Farmer Mac is publicly traded and issues its own debt 

securities. 

Additionally, there are four active service corporations organized under the Farm 

Credit Act that provide services to FCS entities and eligible borrowers.

MANAGEMENT AND PERFORMANCE CHALLENGES

As part of the Agency’s annual Performance and Accountability Report, the IG is 

required by law to provide a summary statement on the most serious management 

and performance challenges facing the Agency. These challenges fall into two 

general categories. First are the challenges related to the FCA’s mandate of 

ensuring a safe, sound, and dependable FCS as a source of credit and related 

services to agriculture. Some of these challenges may be influenced by events that 

are outside the control of the Agency. Second, but no less important, are the 

challenges related to Agency operations.

Farm Credit System

Safety and Soundness

The System is a lender to a single industry, agriculture, and is therefore vulnerable to 

the economic volatility and risks in that industry. While the FCS remains generally 

safe and sound, adversity in several major commodity groups has caused 

deterioration in a number of FCS institutions. The Agency’s challenge is to continue 

to ensure the System’s ability to withstand such vulnerabilities and remain safe and 

sound in the long-term. 

Mission

The environment facing agriculture, rural America, and the institutions of the FCS is 

ever-changing, presenting new opportunities and altering historical perspectives on 

System operations. FCA’s challenge is to continue to maintain an independent and 

objective, yet flexible and responsive, regulatory environment for the System, geared 

to continually ensuring the FCS fulfills its public policy purpose. 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

4

Farm Credit Administration

Agricultural Economic Downturn

There are many factors in agriculture today that have caused deterioration in a 

number of FCS institutions and may cause continued stress for FCS institutions. For 

example, 

• the System has experienced rapid growth for several years, which has had 

the effect of eroding the System’s capital to assets ratio;

• large shared assets among many System institutions are experiencing 

serious difficulty;

• several major commodity groups are experiencing extreme stress;

• asset quality at many associations and several Farm Credit banks has 

deteriorated; and 

• land values, which may not be sustainable, are high.

Thus, a challenge for the Agency is to ensure its ongoing ability to timely assess 

economic and operational conditions affecting the welfare of System institutions, and 

to take preemptive or remedial actions to ensure the ongoing safety and soundness 

of the System. The first line of preparedness for the Agency in accomplishing this is 

an effective examination and risk assessment program. Aligned with this is the 

challenge for the Agency to effectively and timely utilize its enforcement authorities. 

When significant deterioration in a System institution(s) is first evident, the Agency 

should expeditiously consider implementing appropriate rehabilitative enforcement 

measures.

Agency Governance

In early FY 2010, the FCA Board received two new members, filling out the FCA 

Board’s statutory three-person complement. One new member came on the FCA 

Board in October 2009 and the other in March 2010. This reemphasizes the need 

for the Chairman and Agency staff to ensure an environment in which new members 

may quickly learn their duties and responsibilities, and the mission and functioning of 

the Agency and the System. The Board member arriving in October 2009 received 

a newly implemented orientation program. The challenge for the Agency is to 

formalize and institutionalize an effective orientation and ongoing training program 

for FCA Board members. This should enable FCA Board members to readily 

become knowledgeable about Agency and System operations and issues, and be 

able to properly focus Agency resources through, for example, the strategic planning 

mechanism.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

5

Strategic Planning

Since the adoption in May 2008 of the strategic plan for FYs 2008-2013, the FCA 

Board has a new Chairman and two new FCA Board Members. This change in 

Board leadership and the two new FCA Board Members provide an opportunity and 

a challenge to ensure the vision of the newly constituted FCA Board is timely 

incorporated into the next strategic plan. 

In 2005, the FCA Board established a Strategic Planning Committee (SPC) 

composed of Agency staff to facilitate FCA Board input into the plan and the 

planning process. The SPC should ensure the updating and issuance by the FCA 

Board of the next 6-year strategic plan covering FYs 2011-2016.

Human Capital

In 2006, a 5-year strategic human capital plan was completed spanning FYs 2007-

2011. The Agency has adopted a strategy of annually updating the plan, resulting in 

a moving 5-year plan. The plan is comprehensive and, because of the ongoing 

updating, reflective of current human capital issues facing the Agency. For example, 

in addressing the attrition of seasoned staff, the Agency has been actively recruiting 

and hiring at both the entry and midcareer-levels, particularly as it pertains to 

ensuring the ongoing capability of examination staff. FCA’s challenge is to continue 

to emphasize, implement, and update the human capital plan to ensure FCA has the 

staff it needs to effectively regulate a constantly evolving FCS, as managing human 

capital is an ever-present and evolving necessity. This is particularly important as it 

applies to the training and commissioning program for newly hired entry and 

midcareer-level examination staff.

Leveraging Technology

The Agency’s ability to leverage investments in new technologies is a key 

element in management’s efforts to continually improve Agency performance by 

increasing the efficiency and effectiveness of operations. The Agency has an 

active information resource management planning process that identifies, 

reviews, and prioritizes new IT initiatives that will improve Agency operations.

Over the past couple of years, the Agency made significant investments in new 

technologies and began implementing several tools that improve 

communication, collaboration, and efficiency of operations. FCA’s challenge is 

to take full advantage of the new capabilities the IT infrastructure provides. The 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

6

successful implementation of new technologies will provide FCA staff with the IT 

tools and skills that will enable the Agency to:

• improve the quality and availability of data without creating an undue 

burden on the FCS;

• streamline business processes and enhance communication and 

collaboration to improve the effectiveness of how FCA interacts with the 

FCS, the public, and business partners;

• build business intelligence that will provide decision makers with timely 

management information;

• develop an electronic recordkeeping and knowledge management 

capability that effectively manages electronic data, documents, and 

reports; and

• protect FCA information systems and data from increasing external and 

internal threats.

AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED

The OIG conducts all audits in accordance with Government Auditing Standards 

issued by the Comptroller General of the United States for audits of Federal 

organizations, programs, activities, and functions. Inspections and evaluations are 

in accordance with the Council of the Inspectors General on Integrity and Efficiency 

(CIGIE) Quality Standards for Inspections. Copies of most OIG reports are available 

on the FCA OIG web site www.fca.gov/home/inspector.html, or by contacting the 

OIG at (703) 883-4030, or by TTY at (703) 883-4359, or by e-mail at 

ig_information@fca.gov.

Independent Financial Audit for FY 2009

The Accountability of Tax Dollars Act of 2002 extended to FCA and certain other 

agencies a requirement to submit to Congress and the Office of Management and 

Budget (OMB) an audited financial statement each fiscal year.

In continuing to assist the Agency in meeting these requirements, the OIG 

contracted with the BPD for Brown & Co. to perform the audit of FCA’s financial 

statements for FY 2009. The audit resulted in an unqualified opinion and was issued 

November 4, 2009. 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

7

Federal Information Security Management Act Evaluation for FY 2009

The evaluation of the Agency’s compliance with FISMA for FY 2009 was performed 

by the OIG’s Senior IT Auditor, using guidelines established by FISMA, OMB, and the 

National Institute of Standards and Technology. The report revealed no significant 

deficiencies and did not contain any recommendations or agreed-upon actions. The 

report was issued November 18, 2009.

AUDITS AND INSPECTIONS IN PROGRESS

Audit of FCA’s and OSMO’s Regulation and Policy Development Processes

The objective of the audit is to assess whether the regulation and policy 

development processes are operating efficiently and in compliance with 

applicable Federal requirements.

Inspection of FCA’s Adherence to the Government in the Sunshine Act

The inspection will assess whether FCA is in compliance with the letter and spirit of 

the Government in the Sunshine Act. 

Inspection of FCS Borrower Complaint Processing

The objective of this inspection is to review FCA’s process for reviewing, tracking 

and responding to FCS borrowers’ complaints and identify whether 

improvements are needed.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

8

STATUS OF UNIMPLEMENTED RECOMMENDATIONS

At the beginning of the reporting period, there were no open action items resulting 

from OIG audits, inspections, or evaluation reports. No action items were opened 

during the period. 

Audit, Inspection, and Evaluation Agreed-Upon Actions and Recommendations

Report Issued

Open During 

this 6-Month 

Period

Final 

Management 

Actions During 

this Period

Open on 

10/01/2009

None N/A 0 0 0

Total 0 0 0

OIG OBSERVATIONS ISSUED

OIG Observations are designed to be a quick mechanism to offer the Agency head suggestions 

on ways to strengthen Agency operations.

Observation FY 2010-01

The OIG issued to the Chairman on October 27, 2009, Observation FY 2010-01, 

Review and Updating of all FCA Board Policies, suggesting that all FCA Board 

policies should be reviewed and updated, as appropriate, and that all policies contain

a clause requiring review within a specified time period or by a date certain. 

Observation FY 2010-02

The OIG issued to the Chairman on December 14, 2009, Observation FY 2010-02, 

Compensation and Job Grading, recommending opportunities to enhance the 

management and integrity of FCA’s pay program and grade structure.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

9

Observation FY 2010-03

The OIG issued to the Chairman on March 24, 2010, Observation FY 2010-03, 

Inspector General’s Oversight of the FCSIC and FCA’s Prior Approval of Funding 

Corporation Debt Issuances, making suggestions regarding legislative initiatives. 

INVESTIGATIONS

No hotline calls were received alleging impropriety that would fall within the purview 

of the OIG.

OIG Hotline calls and e-mails dealing with borrower complaints concerning FCS 

institutions and other FCS issues were referred to the FCA office or other Federal 

agency responsible for reviewing such matters. 

No investigations were opened during the reporting period. 

LEGISLATION AND REGULATIONS

In furtherance of the OIG’s mandate to review existing and proposed legislation and 

regulations, the IG or Counsel to the IG attend joint briefings of the FCA Board on 

regulations at the proposed and final stages. The following were reviewed by 

Counsel to the IG:

Legislation

1) Public Law 111-80, October 21, 2009 Agriculture, Rural Development, 

Food and Drug Administration, and Related Agencies Appropriations 

Act, 2010 -- An act making appropriations for Agriculture, Rural 

Development, Food and Drug Administration, and Related Agencies 

programs for the FY ending September 30, 2010, and for other 

purposes.

2) S. 1745: Non-Federal Employee Whistleblower Protection Act of 2009

3) S. 2991 or H.R. 2646: Government Accountability Office Improvement 

Act of 2009

4) S. 139 or S. 1490: The Data Breach and Personal Privacy and Security 

Acts of 2009
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

10

5) S. 372 or H.R. 1507: The Whistleblower Protection Enhancement Act of 

2009

6) H.R. 3848: Inspector General Improvement Act of 2009

7) H.R.885: Improved Financial and Commodity Markets Oversight and 

Accountability Act

8) H.R. 3795: Over the Counter Derivatives Markets Act of 2009

9) H.R. 4173: The Wall Street Reform and Consumer Protection Act of 

2009

10) H.R. 4450: Federal Housing Finance Agency IG Technical Correction 

Act of 2009

11) H.R. 4581: Fannie Mae and Freddie Mac Accountability and 

Transparency for Taxpayers Act of 2010

12) FCA Legislation Short List

Executive Orders

13) Executive Order 13520 (and implementing guidance), Reducing Improper 

Payments

Final Rules

14) Effective Interest Rates

15) Director Elections

16) Final Notice Responding to Regulatory Burden Solicitation

17) Unified Agenda

Proposed Rules

18) Farmer Mac Risk-Based Capital

Bookletters (BL)

19) Rural Housing Mortgage –Backed Securities (BL-061)

Briefings

20) Confronting Current and Future Challenges 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

11

OTHER ACTIVITIES

Quarterly Survey of Farm Credit System Institutions

The OIG administers an ongoing survey of FCS institutions regarding the quality and 

consistency of the Agency’s examination function and examiners. The OIG issues a 

quarterly report and a summary report on the surveys’ results at the end of each FY

to the Chief Examiner and the Chairman. 

During this 6-month period, we sent surveys to the Audit Committee Chairmen and 

Chief Executive Officers of 35 FCS institutions. Quarterly reports for the 3-month 

periods ended September 30 and December 31, 2009, were issued by the OIG to 

the Chief Examiner and the Chairman. A summary FY 2009 report as of September 

30, 2009, was also issued.

Staff Participation in Activities of the Professional Community

OIG staff members are encouraged to take part in organizations that contribute to 

the mission of the Inspectors General community, as well as their individual 

professional development. Most staff members are actively involved in one or more 

professional organizations, as well as ad hoc activities of the CIGIE. 

The IG serves as the Vice Chairperson of CIGIE, helps chair the monthly meetings 

of all Inspectors General comprising CIGIE, meets monthly with the Inspectors 

General from the other Federal financial regulatory agencies, and participates as a 

member of the CIGIE’s Inspection and Evaluation (I&E) Committee. 

The OIG General Counsel meets monthly with counsels to the other Inspectors 

General. Counsel also attends Directors of Investigations meetings.

The OIG Senior Auditor and Senior IT Auditor attend Federal Audit Executive 

Committee meetings and conferences. The Senior Auditor participates as a 

member of the I&E Committee’s Roundtable. The Senior IT Auditor also attends 

local ISACA (formerly known as Information Security and Control Association) 

meetings and Federal information security and audit meetings. The Senior IT 

Auditor is a member of CIGIE’s administrative operations task force charged with 

developing a business, staffing, and financial plan as well as identifying and 

implementing the infrastructure needed to establish CIGIE operations.

The OIG Administrative Assistant handles the registration and ongoing interface with 

the Institute of Internal Auditors for the auditors in 21 Offices of Inspector General at 

designated Federal entities.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

12

Staff Participation in Agency Organizations

OIG employees are active on Agency workgroups and task forces, as appropriate. 

Staff Development

OIG employees continually seek ways to improve skills and become knowledgeable 

in the initiatives of the community of Inspectors General. Audit and legal staff must 

meet continuing education requirements. Individual development plans are used to 

identify long and short-term career goals along with specific training and 

developmental needs. These plans are geared to enhance individual skills in the 

performance of official duties and meet the criteria needed to achieve OIG 

performance goals and objectives.

ANNEX

This annex is provided in accordance with the National Defense Authorization Act for 

FY 2008. 

This referenced statute requires all Inspectors General appointed under the IG Act to 

include an annex to their semiannual reports as follows:

1) listing all contract audit reports issued during the reporting period containing 

significant audit findings; 

2) briefly describing the significant audit findings in the report; and 

3) specifying the amounts of costs identified in the report as unsupported, 

questioned, or disallowed. 

Significant audit findings are defined as unsupported, questioned, or disallowed 

costs in excess of $10,000,000, or other findings that the Inspector General 

determines to be significant. It defines contracts as a contract, an order placed 

under a task or delivery order contract, or a subcontract.

No contract audit reports meeting these criteria were issued on behalf of the OIG 

during this reporting period.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

13

APPENDIX A – INDEX OF REPORTING REQUIREMENTS

INSPECTOR GENERAL ACT CITATION AND REQUIREMENT PAGE

Section 4(a)(2) Review of Legislation and Regulations ..........................................................9-10

Section 5(a)(1) Significant Problems, Abuses, and Deficiencies ...........................................none

Section 5(a)(2) Recommendations for Corrective Action.......................................................none

Section 5(a)(3) Prior Recommendations Not Yet Implemented.............................................none

Section 5(a)(4) Matters Referred to Prosecutive Authorities..................................................none

Section 5(a)(5) Summary of Instances Where Information....................................................none

Was Unreasonably Refused or Not Provided

Section 5(a)(6) List of OIG Audit/Inspection Reports Issued During the Period .......................6-7

Section 5(a)(7) Summary of Significant Reports Issued During the Period..............................6-7

Section 5(a)(8) Statistical Table on Management Decisions .....................................................15

with Questioned Costs

Section 5(a)(9) Statistical Table on Management Decisions on ................................................16

Recommendations that Funds be put to Better Use

Section 5(a)(10) Summary of Each Audit Over Six Months Old for ........................................none

Which No Management Decision Has Been Made

Section 5(a)(11) Significant Revised Management Decisions.................................................none

Section 5(a)(12) Significant Management Decisions with Which.............................................none

the Inspector General Disagreed

Section 5(a)(13) Compliance of Agency Financial Management System .....................................6

FY 2008 NATIONAL DEFENSE AUTHORIZATION ACT CITATION AND REQUIREMENT

Section 845 Requires Information from OIG Contract Audit Reports..............................12 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

14

APPENDIX B

Audit, Inspection, and Evaluation Reports Issued

Title of Report

Number of Agreed 

Upon Actions/

Recommendations

Questioned 

Costs

Recommendations 

That Funds Be Put 

to Better Use

Financial Statement Audit for FY 

2009 0 $ 0 $ 0

Federal Information Security 

Management Act for FY 2009 0 $ 0 $ 0

Total 0 $ 0 $ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

15

APPENDIX C

Reports with Questioned Costs

Number Dollar Value

Reports Recommendations

Questioned 

Costs

Unsupported 

Costs

A. For which no management decision has 

been made by the commencement of 

the reporting period

B. Which were issued during the reporting 

period

Subtotals (A+B)

C. For which a management decision was 

made during the reporting period

(i) dollar value of disallowed costs

(ii) dollar value of costs not disallowed

D. For which no management decision has 

been made by the end of the reporting 

period

E. For which no management decision was 

made within six months of issuance

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

16

APPENDIX D

Reports with Recommendations that Funds be Put to Better Use

Number of 

Reports

Number of 

Recommendations Dollar Value

A. For which no management decision has been 

made by the commencement of the reporting 

period

0 0 $ 0

B. Which were issued during the reporting period 0 0 $ 0

Subtotals (A + B) 0 0 $ 0

C. For which a management decision was made 

during the reporting period 0 0 $ 0

(i) dollar value of recommendations that 

were agreed to by management 0 0 $ 0

--based on proposed management action 0 0 $ 0

--based on proposed legislative action 0 0 $ 0

(ii) dollar value of recommendations that 

were not agreed to by management 0 0 $ 0

D. For which no management decision has been 

made by the end of the reporting period 0 0 $ 0

E. For which no management decision was made 

within six months of issuance 0 0 $ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

17

APPENDIX E – FCA ORGANIZATIONAL CHART
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010 

18

APPENDIX F – Office of Inspector General Organizational Chart

Carl C

Inspector General

Carl A. Clinefelter

Counsel to the IG

Elizabeth M. Dean

Senior Auditor

Veronica G. McCain

Senior IT Auditor

Tammy F. Rapp

Administrative 

Assistant

Debra M. Miller

 September 4, 2008

Carl A. Clinefelter, Inspector General Date
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

19

APPENDIX G – Glossary of Terms

Agency – Farm Credit Administration

BPD – Bureau of the Public Debt

Brown & Company – Brown & Company CPAs, PLLC

CIGIE – Council of the Inspectors General on Integrity and Efficiency

DFE – Designated Federal Entity

E.O. – Executive Order

Farm Credit Act – Farm Credit Act of 1971, as amended

Farmer Mac – Federal Agricultural Mortgage Corporation

FCA – Farm Credit Administration

FCS – Farm Credit System 

FISMA – Federal Information Security Management Act

FY – Fiscal Year

H.R. – House Resolution

IG – Inspector General

IG Act – Inspector General Act of 1978, as amended

I&E – Inspection and Evaluation

ISACA – Information Security and Control Association

IT – Information Technology 

OE – Office of Examination

OIG – Office of Inspector General

OMB – Office of Management and Budget

PAR – Performance and Accountability Report

SPC – Strategic Planning Committee

System – Farm Credit System
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2009 – MARCH 31, 2010

20

REPORT

Fraud | Waste | Abuse | Mismanagement

FARM CREDIT ADMINISTRATION

OFFICE OF INSPECTOR GENERAL

• Phone: Toll Free (800) 437-7322; (703) 883-4316

• Fax: (703) 883-4059

• E-mail: fca-ig-hotline@rcn.com

• Mail: Farm Credit Administration

Office of Inspector General

1501 Farm Credit Drive

McLean, VA 22102-5090