Table of Contents

Message from the Inspector General ..................................................................................... 1

Background........................................................................................................................... 2

Strategic Goals ...................................................................................................................... 4

Audits, Inspections, and Evaluations...................................................................................... 8

REPORTS ISSUED................................................................................................................ 8

AUDITS AND EVALUATIONS IN PROCESS........................................................................... 11

STATUS OF AGREED-UPON ACTIONS AND RECOMMENDATIONS....................................... 12

Other Reports ..................................................................................................................... 13

QUARTERLY SURVEY OF FARM CREDIT SYSTEM INSTITUTIONS.......................................... 13

MANAGEMENT ADVISORY REPORTS ................................................................................ 13

Investigations...................................................................................................................... 14

Legislative and Regulatory Reviews ..................................................................................... 14

Congressional Interaction.................................................................................................... 14

Outreach............................................................................................................................. 14

OIG Staff ............................................................................................................................. 14

Annex.................................................................................................................................. 14

Appendix A.......................................................................................................................... 14

Appendix B.......................................................................................................................... 14

Appendix C.......................................................................................................................... 14

Appendix D ......................................................................................................................... 14

Appendix E.......................................................................................................................... 14

Appendix F .......................................................................................................................... 14

Appendix G ......................................................................................................................... 14

Appendix H ......................................................................................................................... 14

FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

1 

Message from the Inspector General

Message from the Inspector General 

I am pleased to submit this Semiannual Report to the Congress. This report 

summarizes the activities and accomplishments of the Farm Credit Administration’s (FCA 

or Agency) Office of Inspector General (OIG) for the period April 1, 2015 through 

September 30, 2015. The OIG’s efforts were directed toward implementing the OIG’s 

Fiscal Year (FY) 2015 strategic and operating performance plan and budget. The OIG 

does so by performing audits, inspections, and evaluations of FCA programs and 

operations; conducting investigations; reviewing existing and proposed legislation and 

regulations relating to Agency programs and the IG community; and providing objective, 

independent reporting and consultation with the FCA Board. 

The OIG issued two audit reports during this reporting period on FCA’s Mobile 

Device Cost Controls and FCA’s Personnel Security and Suitability Program. Additionally, 

the OIG issued 30 surveys to FCS institutions, designed to obtain feedback on the quality 

of the examination program. Two survey reports summarizing the results were delivered 

to the Chief Examiner and FCA Board. We contracted with Harper, Rains, Knight & 

Company, P.A. to perform the audit of FCA’s financial statements for FY 2015, which we 

anticipate will be issued in November 2015. During this period, the OIG also initiated an 

audit on Human Capital Planning. Additionally, we initiated the OIG’s independent 

evaluation for the Federal Information Security Modernization Act. Five findings from OIG 

audits were addressed by FCA management and closed. 

I would like to acknowledge the effective efforts of the talented OIG staff in 

diplomatically leading Agency management to focus on significant program issues. In 

conjunction, FCA management continues to be forthright in 

reacting to OIG findings and making improvements. I look 

forward to continuing our positive relationship with managers

and collaboration with the FCA Board, as we continue to 

strengthen FCA operations to meet the needs of American 

agriculture, keeping the nation’s economy strong and helping

meet global food needs. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

2 

Background 

FARM CREDIT ADMINISTRATION

The Farm Credit Administration (FCA or Agency) is an independent Federal agency of the United 

States government responsible for the regulation and examination of Farm Credit System (FCS or 

System) institutions chartered under the Farm Credit Act of 1971, as amended (Farm Credit Act). 

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

institutions it regulates. FCA’s Fiscal Year 2015 budget was $65,600,000. FCA’s proposed Fiscal 

Year 2016 budget is $69,400,000. 

At the end of the prior semiannual reporting period, the Agency had 284 employees. At the end of 

this reporting period, FCA had 298 employees, about half of which are examiners located in five field 

offices. 

Sacramento, CA Denver, CO

D

Headquarters McLean, VA

Bloomington, MN

allas, TX

FARM CREDIT SYSTEM

The FCS is a Government-sponsored enterprise comprised of 3 Farm Credit Banks, 1 Agricultural 

Credit Bank, and 74 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. 

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 five active service 

corporations that provide services to FCS entities and eligible borrowers.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

3 

Background 

OFFICE OF INSPECTOR GENERAL

The mission of the Office of Inspector General (OIG) is to be an agent of positive change, striving for 

continual improvement in FCA’s management and program operations. The Inspector General Act 

of 1978, as amended, established the OIG in 1989. 

The Inspector General is appointed by the FCA Board without regard to political affiliation and solely 

based on integrity and demonstrated ability in accounting, auditing, financial analysis, management 

analysis, investigations, law, or public administration. The OIG’s FY 2015 budget was $1,445,925. 

The OIG’s FY 2016 budget is $1,493,393. 

While the OIG is under the general supervision of the FCA Board, it operates with independent 

personnel and contracting and budget authority. The Inspector General reports both to the FCA 

Board and to the Congress. 

The OIG has four major components: audits, inspections, and evaluations of programs and 

operations; investigations; legislative and regulatory reviews; and outreach. 

Office of Inspector General

Audits, 

Inspections, 

and Evaluations

Investigations

Legislative and 

Regulatory 

Reviews

Outreach 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

4 

Strategic Goals 

To accomplish our mission, the OIG has eight strategic goals in place that are aligned to FCA’s 

mission, programs, and activities (see the OIG’s Strategic and Operating Performance Plan for 

additional information). The following list summarizes our eight strategic goals and related outcomes 

during this reporting period.

Strategic Goal 1:

Deliver quality audit, inspection, and evaluation products 

and services that are useful to the FCA Board,

management, and the Congress. 

In pursuit of this goal, the OIG continues to provide quality reports to FCA 

management for improvement to programs. The OIG initiates a risk-based approach 

to FCA programs in determining the workload plan. During this reporting period, we 

issued two audit reports relating to FCA’s mobile device cost controls and the 

personnel security and suitability program. The issued reports were timely and 

constructive to improve Agency operations. As a result of our work, seven

recommendations were made to FCA management. Of these recommendations, all 

seven were agreed-upon and three were closed. Two recommendations were also 

closed from prior reporting periods. We also have ongoing audits on human capital 

planning, the financial statement and the FISMA evaluation. 

Strategic Goal 2: 

Provide technical advice and assistance to Agency 

officials in developing sound management information and 

financial reporting systems and in streamlining programs 

and operations. 

The OIG provides technical advice to management in a variety of methods. For this 

reporting period, the OIG issued one Management Advisory to the FCA Board. 

Based on statutory changes to the Federal Records Act, the advisory recommended 

changes to FCA policy and notifications regarding preservation of personal 

emails and text messages that constitute federal records. In response, the 

Agency issued revised guidance to employees on record retention requirements 

relating to personal emails and text messaging. An all hands message was also 

issued. The Inspector General communicates with the Board on a regular basis on 

issues facing FCA, which provides an opportunity for discussion of relevant topics.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

5 

Strategic Goals 

Strategic Goal 3: 

Continuous improvement of the OIG staff, products, and 

internal office administration. Quality is highly valued. 

The OIG continuously works to improve internal staff and processes. All OIG staff 

maintain requirements for their related professional standards. We participate in a 

peer review every three years, and we received a pass rating during our last peer 

review in June 2013. Our next peer review is scheduled for the third quarter FY 

2016. We updated our office directives in the following areas: workpapers; audit 

follow up and tracking; and OIG reporting and recordkeeping. We also developed a 

new directive on Ethics. The OIG also conducts an annual quality assurance review 

on the audit function and assesses internal controls on a continuous basis. 

Strategic Goal 4: 

Effectively investigate and report administrative and 

criminal violations relating to FCA programs and personnel 

to Agency officials, the Attorney General (when 

appropriate), and the Congress. 

The IG Counsel performs the investigative function for the OIG. For this reporting 

period, two reports of investigation were issued. Eight investigations were closed, 

and as of the end of the reporting period, there were four investigations pending. Of 

the eight closed investigations, none resulted in substantiated allegations although 

one allegation was resolved during the course of the OIG investigation and another 

investigation led to a recommendation to the agency to reevaluate personnel actions 

and an administrative procedure. We received six allegations from the OIG Hotline 

during the April to September timeframe, and these were closed or referred to FCA 

programs or other Federal agencies as they involved matters outside the OIG’s 

jurisdiction. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

6 

Strategic Goals 

Strategic Goal 5: 

Cause FCA employees and managers to recognize their 

responsibility and report observed or suspected 

wrongdoing to the OIG.

The OIG recognizes the importance of employees and managers reporting, and the 

OIG reacting, to suspected or observed wrongdoing. During this reporting period, we 

included information on reporting fraud in the OIG’s presentation during the Agencywide new employee orientation. We also continued our work on fraud awareness 

briefings and publications, including publication of new OIG Hotline posters and 

publication of intra-Agency news articles that addressed whistleblower protections, 

time and attendance fraud, and misuse of government property.

Strategic Goal 6: 

Maintain an effective program for reviewing and 

commenting on proposed and existing legislation and

regulations affecting the Agency and the IG community. 

Reviewing and commenting on proposed and existing legislation and regulations 

affecting FCA and the IG community is an important area for the OIG. During 

this reporting period, we reviewed 28 items, including 16 legislative initiatives; 

four final rules; one proposed rule; and eight Informational Memoranda issued by 

the FCA Office of Examination. These issuances addressed a myriad of issues, 

including but not limited to:

Farm Credit System institutions’ whistleblower protection programs;

Cybersecurity assessments within Farm Credit System institutions;

Loans in areas having special flood hazards;

Improper government payments;

Grants oversight;

Transparency in government; and

IG empowerment and access issues. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

7 

Strategic Goals 

Strategic Goal 7: 

Promote OIG’s role within the FCA and the community at 

large. 

Outreach and communication are essential to the OIG’s role. The OIG briefed

incoming employees on the OIG’s history, mission, reporting and fraud 

awareness at FCA’s new employee orientation. The OIG also issued letter 

reports to Congress, which OIG started posting on its public webpage during this 

reporting period. OIG attended Congressional hearings, responded to 

Congressional inquiries, and updated Congressional staff on issued OIG reports. 

The OIG worked closely with the Agency in developing more streamlined 

procedures to ensure 508 compliance, and in the whistleblower arena, issued 

updated posters and IG publications. The OIG renewed its status to maintain 

compliance with the Office of Government Ethics section 2302(c). The OIG also 

made recommendations to the Agency on records management, recruitment and 

other issues. 

Strategic Goal 8: 

Provide leadership to organizations directly contributing to 

the IG community, the Agency, and the Federal 

government.

OIG staff participate in workgroups, conferences, and training related to the IG 

community, FCA, and the Federal government. The IG is a member of the 

Executive, Legislation, and Inspection and Evaluation Committees of the Council 

of Inspectors General on Integrity and Efficiency (CIGIE). The CIGIE Legislation

Committee has engaged in several responses to legislative efforts and 

congressional hearings. The Counsel is Vice-Chair of CIGIE’s Council of 

Counsels, and participates in associated working groups, including the CIGIE 

Records Administration Group and FOIA. The auditors are involved with CIGIE

cross-cutting audits, the FAEC, the Inspection and Evaluation Roundtable, and 

OIG Community Public Affairs. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

8 

Audits, Inspections, and Evaluations 

REPORTS ISSUED

This reporting period, the OIG continued to provide FCA with high quality products. We issued two 

audit reports with seven agreed-upon actions. We have three in-process audits and evaluations, all 

initiated during this six-month period. The OIG also issued 30 surveys to FCS institutions and issued 

two reports on survey results to the Chief Examiner and FCA Board. The reports summarize survey 

results and stakeholder opinions on the quality and issues involved in mission execution. Lastly, one

Management Advisory was issued to the FCA Board.

2 Audit and 

Evaluation 

Reports 

Issued

7 

Agreed-Upon 

Actions 

3 

In-Process 

Reviews

30 Surveys 

Issued to 

FCS 

Institutions

2 

Survey 

Reports

1 

Management 

Advisories

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 conducted in accordance with the CIGIE Quality 

Standards for Inspections. 

Copies of most OIG reports are available on our web site at www.fca.gov/home/inspector.html, or by 

contacting the OIG at (703) 883-4030, or by e-mail at ig_information@fca.gov. We offer a free e-mail 

subscription service that provides automatic notification by e-mail when new report or other 

information is posted to the OIG website. Go to http://apps.fca.gov/subscribeOIG/, provide your 

email, and click join the list.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

9 

Audits, Inspections, and Evaluations 

Mobile Device Cost Controls at FCA

Mobile devices such as smartphones and tablets are one of the tools the Agency uses to keep 

employees connected to its’ information systems and each other. Additionally, mobile devices 

are part of the Agency’s continuity of operations and emergency response strategy. It is the 

Agency’s policy to provide mobile devices to employees based on the business needs of each 

office and the Agency. The FCA incurred $192,787 in wireless communications expenses from 

October 23, 2013, through October 22, 2014. Additionally, the FCA purchased $18,762 in 

mobile devices. 

The objective of our audit was to determine whether the FCA had implemented effective cost 

controls for mobile devices and related services.

We concluded that the FCA used a sound approach for selecting a smartphone and wireless 

communications service provider. Additionally, invoices for wireless communications service 

were reviewed for accuracy prior to payment.

We also identified areas that could reduce the cost of monthly wireless communication 

expenses and decrease the amount of data usage consumed. A review of the wireless 

communications service provider’s Rate Plan Analysis Report and historical voice minute usage 

revealed that approximately $15,000 per year could be saved by reducing the voice minutes for

smartphones. As a result of our audit, the Office of Management Services and the Office of 

Information Technology implemented the following actions that will improve the management of 

mobile devices:

1. Develop procedures for obtaining the Rate Plan Analysis Report from its wireless 

communications provider on a semi-annual basis and evaluating the benefits of 

proposed changes to plans. 

2. Educate users on prohibited uses and the impact of excessive data usage.

3. Identify users exceeding the 5 GB threshold during a billing cycle and notify the user 

and their supervisor of the data usage during that cycle.

The final report was issued July 31, 2015.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

10

Audits, Inspections, and Evaluations 

FCA’s Personnel Security and Suitability Program

FCA’s Personnel Security and Suitability Program is responsible for ensuring that employment 

and retention within the federal service is consistent with public trust and national security. 

Primary responsibility for the program is assigned to FCA’s Office of Management Services 

(OMS) with overall operations managed by the Personnel Security Officer (PSO). The majority 

of Agency employees are high, moderate and low risk with no national security sensitivity, and 

investigations are completed by the Office of Personnel Management (OPM). For Fiscal Year 

(FY) 2014 and 2015, FCA allocated about $300,000 to complete background investigations.

FCA uses OPM required systems to track required timeframes for initiating investigations, 

validate reciprocity, and ensure consistency in risk designations. Risk designations for each 

Agency position are completed using OPM’s required Position Designation Tool (PDT). All 

background investigations are initiated and adjudicated by the PSO. Adjudication is the 

evaluation of data in background investigations, as well as any other relevant and reliable 

information, to determine whether an employee is suitable for government employment. 

Our objective was to determine whether FCA has effectively managed the Personnel Security 

and Suitability Program. Overcoming weaknesses from past efforts, FCA, in recent times, made 

significant progress in updating and improving its Personnel Security and Suitability Program. 

The current PSO reviewed employees’ security files and updated the spreadsheet for tracking 

investigations. Additional steps are necessary to ensure items identified by the PSO are 

addressed and all Agency employees have the appropriate background investigation for their 

position. 

As a result of our audit, OMS agreed to:

 Review and implement internal control procedures to ensure the PSO’s tracking 

spreadsheet, security files, and risk designations are accurate and complete.

Finalize the designation of an Alternate PSO so that appropriate resources are available 

to fulfill the requirements of the Personnel Security and Suitability Program. 

Update Procedures for:

o Deciding and documenting position risk level and sensitivity to ensure all 

positions have a PDT designation that is appropriate for the duties and 

responsibilities of the position.

o Maintaining and organizing PDT records.

Revise processes to ensure employees are cleared or pre-appointment investigative 

requirements are waived before entering high risk positions.

The final report was issued September 29, 2015.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

11

Audits, Inspections, and Evaluations 

AUDITS AND EVALUATIONS IN PROCESS

Audit of FCA’s Financial Statements Fiscal Year 2015

The Accountability of Tax Dollars Act of 2002 requires FCA and certain other agencies to submit 

to the Congress and OMB an audited financial statement each fiscal year.

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

Harper, Rains, Knight & Company, P.A. to perform the audit of FCA’s financial statements for 

FY 2015. The audit remained ongoing at the end of this reporting period. For FY 2014, the OIG 

also contracted with Harper, Rains, Knight & Company, P.A. to perform the audit. The FY 2014 

audit resulted in an unmodified opinion, issued November 30, 2014. 

FY 2015 Federal Information Security Modernization Act Evaluation 

The evaluation of the Agency’s compliance with the Federal Information Security Modernization 

Act (FISMA) for FY 2015 is performed by the OIG’s Senior Information Technology Auditor and 

Senior Auditor using guidelines established by FISMA, OMB, and the National Institute of 

Standards and Technology. This evaluation was ongoing as of September 30, 2015.

Audit of Human Capital Planning at FCA

An effective human capital program is essential to ensure the Agency has the right people with 

the right skills to accomplish its mission as a financial regulator. The Human Capital Plan 

documents the Agency’s plans for the next five years and aligns with the Agency’s Strategic 

Plan toward the following goals: leadership and knowledge management, results-oriented 

performance culture, and talent management. 

The objective of this audit is to assess the adequacy of the Agency’s human capital planning 

and the effectiveness of its implementation. The audit is focused on the following three areas: 

key person dependency and succession planning; employee turnover and recruiting; and 

workplace diversity and inclusion. The audit began in April 2015 and is ongoing as of the end of 

the reporting period. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

12

Audits, Inspections, and Evaluations 

STATUS OF AGREED-UPON ACTIONS AND RECOMMENDATIONS

In total, there were seven agreed-upon actions added from two reports issued for the reporting 

period. We had twelve actions open at the beginning of the period to carry over. As of September 

30, 2015, fourteen agreed-upon actions remained open.

Audit, Inspection, and Evaluation Agreed-Upon Actions

Report Issued Open During this 

6-Month Period

Final Management 

Actions During this Period

Open on 

9/30/2015 

Mobile Device Cost 

Controls 7/31/2015 3 3 0 

Personnel Security 

and Suitability 

Program

9/29/2015 4 0 4 

FCA’s Enforcement 

and Special 

Supervision Processes

3/31/2015 3 1* 2 

FCA’s Commissioning 

Program 3/31/2015 9 1** 8 

Total 19 5 14

*One recommendation was closed for the Audit of FCA’s Enforcement and Special Supervision 

Processes. FCA’s OE provided training to all examiners and staff on supervision and enforcement 

authorities, regulatory requirements on reporting known or suspected criminal activity, and the 

criminal referral process.

**One recommendation was closed for the Audit of FCA’s Commissioning Program. OE and OMS 

established a plan, including timeframes, to compete Commissioning Program contractor services to 

manage risks of reliance on one source and ensure the best value to the Agency.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

13

Other Reports 

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 the examiners performing the main mission functions. 

Without attribution, the OIG issues a quarterly report and, at the end of each fiscal year, a summary 

report on the survey results to the Chief Examiner and the FCA Board. 

The survey asks respondents to rate eight statements regarding examination activities, 

communications and FCA regulations and guidance. Additionally, respondents have the opportunity 

to discuss the aspects of the examination that were the most and least helpful to the institution’s 

board and management team. Each quarter there are a relatively small number of respondents. 

Over time, however, analysis of response patterns enable sound conclusions as to the quality of the 

examiners and the examination function. The consistent trend indicates the examination program 

and staff are well regarded.

Second Quarter Fiscal Year 2015 Farm Credit System Survey

In April 2015, the OIG issued 14 surveys to FCS institutions for feedback on the examination 

program and staff on the second quarter of FY 2015. Twelve FCS institutions responded. 

The OIG issued a summary report in June 2015 to the Chief Examiner and the FCA Board.

Third Quarter Fiscal Year 2015 Farm Credit System Survey

In July 2015, the OIG issued 16 surveys to FCS institutions for feedback on the third 

quarter of FY 2015. Fifteen institutions responded. The OIG provided a summary report 

in September 2015 to the Chief Examiner and the FCA Board. 

MANAGEMENT ADVISORY REPORTS

The OIG Management Advisory Reports are designed to be a quick mechanism to offer the Agency 

head and management suggestions on ways to strengthen Agency operations. 

During this reporting period, the OIG issued one management advisory to the FCA Board. On April 

16, 2015, the OIG issued a management advisory addressing amendments to the Federal 

Records Act. OIG urged management to change FCA policy and notify staff of the updated 

requirements for preservation of personal emails and text messages constituting federal 

records. In response, the Agency issued revised guidance to employees on record retention 

requirements relating to personal emails and text messaging. 

The OIG also continues to forward best practices, articles, and plans related to use of social 

media to FCA’s Office of Congressional and Public Affairs for consideration. This has been a 

practice since issuance of the OIG Management Advisory, Survey of FCA’s Use of Social 

Media, in 2012.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

14

Investigations 

The OIG continued to provide quality investigative work during this period. The OIG investigates 

matters referred internally and externally, through the OIG Hotline and other notification mechanisms. 

Investigations

During this reporting period, the OIG issued two Reports of Investigation; closed eight investigations, 

including six preliminary investigations; and closed the reporting period with four pending 

investigations. The closed investigations involved allegations relating to various issues, including 

alleged interference with the EEO counseling process; personnel suitability; and personnel 

selections. None of the investigations resulted in substantiated allegations, although one allegation 

was resolved while the investigation was proceeding and another investigation led to a 

recommendation that the agency reevaluate a personnel action and administrative procedure. Some 

of these investigations did not require referral to the agency for administrative action. In the EEO 

counseling process investigation, the Agency notified the OIG within 16 days that it had taken 

appropriate management action. 

Investigations pending at the close of this reporting period include an investigation that awaits 

Agency action, and three investigations, one of which was opened in April 2015 and the other two 

opened in September 2015. 

Hotline

The OIG Hotline is available 24 hours a day, 7 days a week, to receive tips and complaints about 

fraud, waste, or abuse relating to FCA programs and operations. The Hotline allows individuals to 

report their allegations to the OIG directly and confidentially and is available through email, phone, 

fax, and mail. 

During the reporting period, the OIG received six Hotline complaints, and all six complaints were 

referred, responded to, administratively closed, or closed after referral for OIG investigation. One 

complaint was closed because it involved matters outside OIG’s jurisdiction and had already been 

sent to the cognizant agency. Three were closed after referral for OIG investigation and the 

remaining two were borrower complaints concerning FCS institutions, and these were referred to the 

FCA office responsible for reviewing these matters.

2 

Reports of 

Investigation 

issued

8 

Investigations 

closed

4 

Pending 

investigations

6 

Hotline 

complaints 

addressed
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

15

Legislative and Regulatory Reviews 

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

the IG attends joint briefings of the FCA Board on regulations at the proposed and final stages. 

During this reporting period, we reviewed:

The following were reviewed: 

Legislation 

1) H.R. 2395 and S. 579, Inspector General Empowerment Act of 2014

2) S. 614 and H.R. 2320, Federal Improper Payments Coordination Act of 2015

3) S. 742, Stop Wasteful Federal Bonuses Act of 2015

4) S. 754, Cybersecurity information Sharing Act of 2015

5) H.R. 1560, Protecting Cyber Networks Act

6) H.R. 1381, Transparency in Government Act of 2015

7) S. 846, H.R. 3328, Small Business Regulatory Sunset Act of 2015

8) S. 794, A bill to extend whistleblower protections for defense contractor employees to 

employees of contractors of the elements of the intelligence community 

9) H.R. 2826, Government Transformation Act

10) H.R. 2807, Sunshine on Government Act of 2015

11) H.R. 2532, EASY Savings Act of 2015

12) S. 1115, Grants Oversight and New Efficiency Act (“GONE” Act)

13) S. 1527, Improving Department of State Oversight Act of 201

14) H.R. 1557, Federal Employee Antidiscrimination Act 

15) S. 1990, Federal Computer Security Act

Proposed Rule

1) Proposed: Regulatory Capital, Implementation of Tier 1/Tier 2 Framework Regulatory 

Capital Rules: Regulatory Capital, Implementation of Tier 1/Tier 2 Framework, 12 

CFR Parts 607, 614, 615, 620 and 628, 79 Fed. Reg. 76927

15 Legislative 

Items

1 

Proposed 

Rule 

4 

Final Rules

8 

Informational 

Memoranda
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

16

Legislation and Regulations Review 

Final Rules

1) Organization and Functions; Field Office Locations,12 CFR Part 600, 80 Fed. Reg. 

40896 (7-14-2015)

2) Loans in Areas Having Special Flood Hazards, Joint Agency Regulation,12 CFR Part 

614, 80 Fed. Reg. 43216 (7-21-2015)

3) Organization; Institution Stockholder Voting Procedures, 12 CFR Part 611, 80 F.R. 

44258 (7-27-2015)

4) Organization; Mergers, Consolidations, and Charter Amendments of Farm Credit 

System Banks or Associations, 12 CFR Part 611, 80 F.R. 51113 (8-24-2015)

Informational Memoranda

1) Amendments to Asset-Size Exemption Thresholds under Regulation Z and Integrated 

Mortgage Disclosures under Regulation X and Regulation Z (4-2-2015)

2) Notice of Prohibition and Orders of Removal, Suspension, or Prohibition (4-16-2015)

3) TILA-RESPA Integrated Mortgage Disclosures – Clarification of Borrower Stock and 

Participation Certificates Disclosure (4-28-2015)

4) Farm Credit Administration Reduces Assessment (5-29-2015)

5) Safety and Soundness of the Farm Credit System (7-7-2015)

6) Whistleblower Programs (7-9-2015)

7) Cybersecurity Assessment and Expectations for System Institutions (8-5-2015)

8) National Oversight Plan for Fiscal Year 2016 (9-24-2015)
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

17

Congressional Interaction 

During this reporting period, the OIG met with Congressional staff members and attended 

hearings on various issues relating to OIG access concerns across the OIG community and the 

related U.S. Department of Justice, Office of Legal Counsel opinion issued in July of 2015. The 

OIG also provided input for responses to post-hearing questions submitted to the CIGIE by 

Senate staffers.

The OIG issued letter reports to the: 

Senate Committee on Homeland Security and Governmental Affairs; 

Senate Agriculture, Nutrition and Forestry Committee; and 

House Committee on Oversight and Government Reform. 

The letter reports included information on limitations placed on the OIG’s access to documents, 

information, or Agency employees; open OIG audit recommendations; OIG salaries and the 

conduct of financial statement audits; and OIG oversight of how the Agency responds to 

Freedom of Information Act (FOIA) requests. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Outreach 

Staff Participation in Activities within the IG 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 activities within 

CIGIE. 

The Inspector General is a member of CIGIE, which provides a forum for IGs from over 70 

government agencies to discuss government-wide issues and shared concerns. Collectively, the 

members of CIGIE work toward improving government programs and operations, work that involves, 

for example: comments on proposed legislation; development of projects involving cross-cutting 

issues; and training development. The IG was appointed to the CIGIE Executive Committee as the 

Member-At-Large in January 2015. The IG also serves as a member of CIGIE’s Legislation 

Committee and participates as a member of CIGIE’s Inspection and Evaluation Committee, and is 

the Chair of the Small IG group. The IG has a leadership role on committees and workgroups and 

has initiated group projects to advance and streamline CIGIE practices and processes. 

The Counsel to the Inspector General continues her leadership role in the Council of Counsels of IGs 

(CCIG) as one of two Vice Chairs to the CCIG for 2015. The Counsel is also involved in the CIGIE 

Records Management Working Group and attends the quarterly meetings for three additional CIGIE 

groups – the Assistant Inspectors General for Investigations, Deputy IGs, and the Small OIGs CCIG 

Working Group. The Counsel also contributes frequently to requests for assistance throughout the 

CCIG community. 

The OIG Senior IT Auditor and Senior Auditors are participating in cross-cutting audit projects and 

attend FAEC meetings and conferences. The IT Auditor attends local ISACA meetings, is actively 

involved in the IT Subcommittee of the FAEC, and assists CIGIE with their information security 

program. One Senior Auditor is also a member of the CIGIE Roundtable on Inspections and 

Evaluations, and is an Adjunct Instructor for CIGIE’s Training Institute.

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

Organizational Briefings and Notifications

The OIG has distributed posters identifying Hotline and contact information and continues to develop 

its Fraud Awareness program to provide training and guidance to FCA employees on reporting 

responsibilities, fraud indicators, methods of reporting, and protections provided to whistleblowers 

under Federal law and policy. OIG has also published several articles on fraud and whistleblower 

topics. 
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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OIG Staff 

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 toward enhancing

individual skills in the performance of official duties, cross training, succession planning and meeting

the criteria needed to achieve OIG performance goals and objectives.

The following organizational chart shows the OIG as of September 30, 2015: 

Inspector General

Elizabeth Dean

Counsel to the 

Inspector General

Kathy Gallo

Senior Information 

Technology Auditor

Tammy Rapp

Senior Auditor

Sonya Cerne

Senior Auditor

Tori Kaufman

Management/ 

Program Analyst 

Ava Bell
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

APRIL 1, 2015 ─ SEPTEMBER 30, 2015

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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.
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix A 

Index of Reporting Requirements

SECTION TITLE Page

4(a)(2) Review of legislation and regulations 15-16 

5(a)(1) Significant problems, abuses, and deficiencies None

5(a)(2) Recommendations for corrective action 8-12 

5(a)(3) Prior recommendations not yet implemented None

5(a)(4) Matters referred to prosecutive authorities None

5(a)(5) Information unreasonably refused or not provided None

5(a)(6) List of reports issued 8-12 

5(a)(7) Summaries of significant reports 9-12 

5(a)(8) Management decisions with questioned costs 23 

5(a)(9) Management decisions on recommendations that funds be put 

to better use 

24 

5(a)(10) Prior audit reports unresolved None

5(a)(11) Significant revised management decisions None

5(a)(12) Significant management decisions with which the Inspector 

General disagreed None

5(a)(13) Compliance of Agency financial management system 11

5(a)(14)(15) Peer reviews conducted of this OIG 25

5(a)(16) Peer reviews conducted by this OIG 26

845 FY 2008 National Defense Authorization Act Citation and 

Requirement 20
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix B 

Audit, Inspection, and Evaluation Reports Issued

Report Number of Agreed Upon 

Actions/Recommendations Questioned Costs

Recommendations 

That Funds Be Put to 

Better Use

FCA’s Mobile Device 

Cost Controls 3 $ 0 $ 15,000 

FCA’s Personnel 

Security and Suitability 

Program

4 $ 0 $ 0 

Total 7 $ 0 $ 15,000
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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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.

0 0 $ 0 $ 0

B. Which were issued during the reporting 

period. 0 0 $ 0 $ 0

Subtotals (A+B) 0 0 $ 0 $ 0

C. For which a management decision was 

made during the reporting period. 0 0 $ 0 $ 0

 (i) dollar value of disallowed costs 0 0 $ 0 $ 0

 (ii) dollar value of costs not disallowed 0 0 $ 0 $ 0

D. For which no management decision has 

been made by the end of the reporting 

period.

0 0 $ 0 $ 0

E. For which no management decision was 

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

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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. 1 3 $ 15,000

Subtotals (A+B) 1 3 $ 15,000

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
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix E 

Peer Reviews Conducted of this Office 

Peer Review Performed By Date of Report Function 

Reviewed

Peer Review 

Rating

Architect of the Capitol 

Office of Inspector General

June 26, 2013 Audit Pass

U.S. Securities and Exchange Commission

Office of Inspector General

December 26, 2007 Investigations Pass
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix F 

Peer Reviews Conducted by this Office 

Peer Review Of Date of Report Function 

Reviewed

Peer Review 

Rating

U.S. International Trade Commission 

Office of Inspector General January 16, 2013 Audit Pass

Consumer Product Safety Commission 

Office of Inspector General May 23, 2011 Audit Pass
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix G 

FCA ORGANIZATIONAL CHART
FCA OIG SEMIANNUAL REPORT TO THE CONGRESS

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Appendix H 

Glossary of Terms

Agency – Farm Credit Administration

CIGIE – Council of the Inspectors General on Integrity and Efficiency

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 of Representatives

IG – Inspector General

IG Act – Inspector General Act of 1978, as amended

IT – Information Technology 

OE – Office of Examination

OIG – Office of Inspector General

OMB – Office of Management and Budget

OMS – Office of Management Services

Pub. L. – Public Law

RSD – Risk Supervision Division

S. – Senate

System – Farm Credit System