OFFICE OF 

INSPECTOR GENERAL Audit Report 

Audit of the Farm Credit 

AdministraƟon’s Financial 

Statements 

Fiscal Year 2017 

A‐17‐FS 

November 16, 2017 

FARM CREDIT ADMINISTRATION 
Table of Contents

Inspector General’s Transmittal Letter of the Auditors’ Report...................................................................1

Auditors’ Opinion Letter on the Financial Statements .................................................................................... 3

For the fiscal year’s financial statements and related notes, refer to FCA’s Performance and 

Accountability Report (PAR) for that year. The PARs can be found on FCA’s website. 
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Farm Credit Administration Office of Inspector General

1501 Farm Credit Drive

McLean, VA 22102-5090

(703) 883-4030

November 8, 2017

The Honorable Dallas P. Tonsager, Chairman

The Honorable Jeffery S. Hall, Board Member

Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102-5090

Dear Chairman Tonsager and Board Member Hall:

The attached report is the audit of the Farm Credit Administration’s (FCA’s or Agency’s) financial 

statements for the fiscal year (FY) ended September 30, 2017. The Office of Inspector General (OIG) 

contracted with Harper, Rains, Knight & Company, P.A., an independent public accounting firm, to 

perform the audit. 

Harper, Rains, Knight & Company issued an unmodified opinion on the Agency’s financial statements. 

In the auditors’ opinion, FCA’s principal financial statements present fairly, in all material respects, the 

financial position of the Agency as of the FY ended September 30, 2017, in conformity with generally 

accepted accounting principles. 

Harper, Rains, Knight & Company considered FCA’s internal control over financial reporting to 

determine the audit procedures to express an opinion on the financial statements. Although they did 

not express an opinion on the effectiveness of FCA’s internal controls, they did not identify any 

deficiencies considered to be a material weakness. 

Additionally, Harper, Rains, Knight & Company performed tests of FCA’s compliance with selected 

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

statements. Although they did not express an opinion on compliance with those provisions, they did 

not identify any instances of noncompliance or other matters required to be reported under 

Government Auditing Standards issued by the Comptroller General of the United States or the Office of 

Management and Budget (OMB) Bulletin No. 17-03, Audit Requirements for Federal Financial 

Statements. 

 
2 

Harper, Rains, Knight & Company was required to perform the audit in accordance with Government 

Auditing Standards and OMB Bulletin No. 17-03. To ensure the quality of the work performed, the OIG:

• reviewed Harper, Rains, Knight & Company’s approach to and planning of the audit,

• evaluated the qualifications and independence of the auditors,

• attended key meetings with auditors and Agency officials,

• monitored the progress of the audit, 

• examined workpapers, and 

• reviewed the audit report.

Harper, Rains, Knight & Company is responsible for the attached auditors’ report and the conclusions 

expressed in the report. The OIG is responsible for technical and administrative oversight regarding the 

audit firm’s performance under the terms of the contract. Our review was not intended for us to 

express, and accordingly we do not express, an opinion on the Agency’s financial statements or 

conclusions on internal control over financial reporting and compliance with laws and regulations, 

including whether the Agency’s financial management systems substantially complied with the Federal 

Financial Management Improvement Act. However, our monitoring review disclosed no instances in 

which Harper, Rains, Knight & Company did not comply, in all material respects, with the auditing 

standards.

 

Respectfully,

Wendy R. Laguarda

Inspector General
3 

Independent Auditors' Report

The Board and Inspector General 

Farm Credit Administration

Report on the Financial Statements

We have audited the accompanying balance sheets of the Farm Credit Administration (FCA), as of 

September 30, 2017 and 2016, and the related statements of net cost and changes in net position, and 

statements of budgetary resources, for the fiscal years then ended and the related notes to the financial 

statements. 

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with general accepted accounting principles in the United States of America; this includes the 

design, implementation, and maintenance of internal control relevant to the preparation and fair 

presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted 

our audits in accordance with auditing standards generally accepted in the United States of America; the 

standards applicable to financial audits contained in Government Auditing Standards, issued by the 

Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin No. 

17-03, Audit Requirements for Federal Financial Statements. Those standards and OMB Bulletin No. 17-

03 require that we plan and perform the audit to obtain reasonable assurance about whether the financial 

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 

the financial statements. The procedures selected depend on the auditors' judgment, including the 

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 

In making those risk assessments, the auditors consider internal control relevant to the entity's preparation 

and fair presentation of the financial statements in order to design audit procedures that are appropriate in 

the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's 

internal control. Accordingly, we express no such opinion. An audit also includes evaluating the 

appropriateness of accounting policies used and the reasonableness of significant accounting estimates 

made by management, as well as evaluating the overall presentation of the financial statements.
The Board and Inspector General 

Farm Credit Administration – Continued 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 

our audit opinions. 

Opinion on the Financial Statements

In our opinion, the financial statements including the accompanying notes, present fairly, in all material 

respects, the financial position of FCA as of September 30, 2017 and 2016, and its net cost of operations, 

changes in net position, and budgetary resources for the fiscal years then ended, in conformity with 

accounting principles generally accepted in the United States of America. 

Other Matters

Required Supplementary Information 

Generally accepted accounting principles in the United States of America require that the information in 

the Management's Discussion and Analysis, and Required Supplementary Information sections be 

presented to supplement the basic financial statements. Such information, although not a part of the basic

financial statements, is required by the Federal Accounting Standards Advisory Board who considers it to 

be an essential part of financial reporting for placing the basic financial statements in an appropriate 

operational, economic, or historical context. We have applied certain limited procedures to the required 

supplementary information in accordance with auditing standards generally accepted in the United States 

of America, which consisted of inquiries of management about the methods of preparing the information 

and comparing the information for consistency with management's responses to our inquiries, the basic

financial statements, and other knowledge we obtained during our audit of the basic financial statements. 

We do not express an opinion or provide any assurance on the information because the limited procedures 

do not provide us with sufficient evidence to express an opinion or provide any assurance. 

Other Information 

Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a 

whole. The information in the Statement of the Board Chair and Chief Executive Officer (CEO), Letter

from the Chief Financial Officer, and Other Information section is presented for purposes of additional 

analysis and is not a required part of the basic financial statements. Such information has not been 

subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, 

we do not express an opinion or provide any assurance on it. 

Other Reporting Required by Government Auditing Standards 

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements as of and for the year ended September 

30, 2017, we considered FCA's internal control over financial reporting (internal control) to determine the 

audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on 

the financial statements, but not for the purpose of expressing an opinion on the effectiveness of FCA's

internal control. Accordingly, we do not express an opinion on the effectiveness of FCA's internal control. 

We did not test all internal controls relevant to operating objectives as broadly defined by the Federal 

Managers' Financial Integrity Act of 1982. 

4 
The Board and Inspector General 

Farm Credit Administration – Continued 

5 

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, or 

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination 

of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement 

of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A 

significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe 

than a material weakness, yet important enough to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of this 

section and was not designed to identify all deficiencies in internal control that might be material 

weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any 

deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses 

may exist that have not been identified. 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether FCA's financial statements are free from material 

misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, 

and grant agreements, noncompliance with which could have a direct and material effect on the 

determination of financial statement amounts. However, providing an opinion on compliance with those 

provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The 

results of our tests of compliance disclosed no instances of noncompliance or other matters that are 

required to be reported herein under Government Auditing Standards or OMB Bulletin No. 17-03. 

Purpose of the Other Reporting Required by Government Auditing Standards

The purpose of the communication described in the Other Reporting Required by Government Auditing 

Standards section is solely to describe the scope of our testing of internal control and compliance and the 

result of that testing, and not to provide an opinion on the effectiveness of FCA's internal control or 

compliance. This report is an integral part of an audit performed in accordance with Government Auditing 

Standards in considering the entity's internal control and compliance. Accordingly, this communication 

is not suitable for any other purpose. 

November 8, 2017