FARM CREDIT 

ADMINISTRATION 

OFFICE OF 

INSPECTOR GENERAL 

SURVEY REPORT 

Survey of 

Farm Credit System 

Institutions Regarding the 

Agency’s Examination Function 

Third and Fourth Quarters 

Fiscal Year 2022 

(April 1 - September 30, 2022) 

and Fiscal Year Summary 

Issued February 2, 2023 
 Executive Summary

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

Examination (OE) identifies Farm Credit System (System) institutions 

that can provide meaningful survey responses for that period. The 

Office of Inspector General (OIG) provides a survey report 

semiannually with two quarters of survey responses. This report 

includes the response data for the third and fourth quarters of FY 

2022, as well as some historical data for comparison. This report also 

includes a summary of FY 2022 numeric ratings. 

OE identified a total of 25 System institutions to survey for the third

and fourth quarters of FY 2022 (April 1 – September 30, 2022). OIG 

sent surveys to those institutions and 18* institutions completed the 

survey (72% response rate).

The table below shows quarterly average numerical rating ranges and 

total average numerical ratings for survey statements 1-10. A “1” 

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

Average Numerical Ratings

FY22

Quarter

Average Numerical

Rating Range

Total Average

Numerical Rating

Fourth 1.5 – 2.3 1.8

Third 1.8 – 2.5 2.1

Second 1.5 – 2.3 1.9

First 1.6 – 2.2 1.9

OIG lists comments with any perceived negative feedback separately 

for survey statements 1-10 and 13 in this report. We include statistical 

information about the negative comments in a new report section. 

*One institution stated its response represented two institutions 

surveyed. OIG did not count the numerical ratings from the institution 

twice. 

The System institutions we asked 

to respond to the survey are those 

institutions that: 

1. Received a Report of 

Examination during the FY 

quarters; or

2. Had significant examination 

activity and interface with OE 

during the same period.

The survey asks respondents to 

rate ten survey statements as:

Completely Agree 1 

Agree 2 

Neither Agree nor Disagree 3 

Disagree 4 

Completely Disagree 5 

Does Not Apply 6 

The survey contains 13 statements, 

two of which were added in 2021 

to address the effectiveness and 

efficiency of communications for 

examinations conducted remotely 

due to the pandemic.
TABLE OF CONTENTS

ACRONYMS and ABBREVIATIONS ________________________________________________________________________ 1

BACKGROUND AND METHODOLOGY ____________________________________________________________________ 1

SURVEY RESULTS __________________________________________________________________________________________ 2

EXAMINATION PROCESS __________________________________________________________________________________ 2

Statement #1 ___________________________________________________________________________________________ 2

Statement #2 ___________________________________________________________________________________________ 3

Statement #3 ___________________________________________________________________________________________ 4

Statement #4 ___________________________________________________________________________________________ 5

COMMUNICATIONS _______________________________________________________________________________________ 7

Statement #5 ___________________________________________________________________________________________ 7

Statement #6 ___________________________________________________________________________________________ 8

Statement #7 ___________________________________________________________________________________________ 9

Statement #8 _________________________________________________________________________________________ 10

Statement #9 _________________________________________________________________________________________ 11

Statement #10 ________________________________________________________________________________________ 12

GENERAL QUESTIONS ___________________________________________________________________________________ 12

Statement #11 ________________________________________________________________________________________ 12

Statement #12 ________________________________________________________________________________________ 13

Statement #13 ________________________________________________________________________________________ 14

Request for OIG Contact______________________________________________________________________________ 16

STATISTICAL INFORMATION ON NEGATIVE COMMENTS _____________________________________________ 16

SUMMARY OF NUMERICAL RATINGS FOR FISCAL YEAR 2022 ________________________________________ 17
1 

ACRONYMS and ABBREVIATIONS

EIC Examiner-in-Charge

FCA Farm Credit Administration

FCS Farm Credit System

FY Fiscal Year

MRA Matter Requiring Attention

OE Office of Examination

OIG Office of Inspector General

BACKGROUND AND METHODOLOGY

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

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

responses for that period. The criteria for including a System institution in the survey are:

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

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

period. 

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

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

April 1 through September 30. This report includes the response data for the third and fourth

quarters of FY 2022. 

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

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

Completely Agree 1 

Agree 2 

Neither Agree nor Disagree 3 

Disagree 4 

Completely Disagree 5 

Does Not Apply* 6 

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

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

For survey statements 1-10, we provide the quarterly average numerical ratings. For comparison, 

we provide the two most recent FYs for which survey data was collected (FY 2019 and FY 2021 for 

this report). Statements 11-13 are not numerically rated.
2 

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

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

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

survey statements. 

The report includes narrative responses verbatim, except that specific information identifying the 

institution or examiners has been removed (e.g., institution and examiner names). Additionally, 

we corrected spelling and punctuation errors and spelled out some acronyms or abbreviations. 

We include bracketed text to show where we removed identifying information or to provide 

clarification to a response. We list comments with any perceived negative feedback separately for 

survey statements 1-10 and 13. 

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

institution confidentially to discuss the institution’s submitted responses. 

SURVEY RESULTS

EXAMINATION PROCESS

Statement #1

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

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

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.9 2.2 2.3 2.2 2.1*

2021 N/A 1.9 1.8 1.7 1.8

2019 1.7 2.3 2.0 1.8 2.0

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

FY averages were calculated using the average of the quarterly averages

shown in the table. 

Comments: 

• The scope of the examination was comprehensive, targeting primary risk, operational and 

performance areas within the [institution]. In addition, the depth of scope provided a 

sound basis for determining organizational performance and regulatory compliance as 

well as Board oversight leadership and management execution.

• The scope of examination activities appeared to be comprehensive and appropriately 

considered the risks within and facing the organization. Our institution continues to make 

considerable investments to maintain a strong control environment, which was 

appropriately considered by the FCA as part of their examination activities. Additionally, 

the examiners continue to increase their leverage of the work performed by our 

institution’s 2nd and 3rd lines of defense to better understand risks within the organization 

and the underlying control environments prior to developing their review plans and during 

their onsite review activities resulting in effective and efficient examination activities.
3 

• As an aside, we appreciate FCA's recent work on regulatory burden for low risk 

[institutions]. We hope that we can benefit from that work in terms of the scope of 

examination activities.

• We are a small institution with low credit risk.

• Agree. As one of the smaller [institutions] in the System with ample capital and a 

straightforward business model, we very much appreciated the FCA listening to us and 

beginning to take a more differential approach to some issues (e.g., audit coordinators, 

etc.).

Comments perceived with negative feedback: 

• Institution size (small) or complexity (low) did not seem to be a factor at all. Risk to the 

System is very low, however a complex review was completed over several months.

• Generally, the exam was risk-focused and appropriate for the size and complexity of [the 

institution]. However, some specific areas such as internal/operational audit seemed to 

focus more on “form over substance." The focus on those seemed less risk-focused.

• Some areas of focus seemed [a] little in-depth for our size, but overall appreciate the focus.

• It was not clear the size of our [institution] was considered in the exam.

• Some areas seemed overly burdensome for an [institution] of our size and complexity. 

Particularly in areas of audit.

Statement #2

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

examination findings and conclusions.

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 2.2 1.9 2.0 1.8 2.0*

2021 N/A 1.7 1.9 1.5 1.7

2019 1.8 2.1 2.1 1.6 1.9

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• Examiners had a good understanding of regulations and other regulatory guidance 

including informational memorandums, book letters and the examination manual. They 

also demonstrated good judgement in the application of these various sources, 

considering the [institution’s] risk profile, operational processes and business practices. 

However, the examiners stayed true to ensuring compliance with regulation and statutes, 

first and foremost.

• The examiners were thorough and fair.

• Regulations were followed, however the exam manual seemed to be the primary guidance 

used based on our exam results.

• Agree. As noted above, we have respectfully disagreed with the FCA on the grounding and 

cost [versus] benefit for some new areas of review, particularly for smaller institutions. With 

that in mind, appreciated the willingness to work with us on these issues.
4 

Comments perceived with negative feedback: 

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

findings and conclusions. However, when the examiners received direction from others 

outside the Office of Examination, those agency representatives did not consistently 

communicate the underlying purpose and objectives for the interpretations being applied. 

Applying new interpretations without full understanding of the potential adverse 

outcomes can result in actions that are detrimental to a System institution meeting its 

mission in a safe and sound manner. While regulations are written with good intentions, 

reasonable interpretations of regulations must be allowed for the System to continue to 

meet its mission in a constantly evolving marketplace.

• In some cases, examiners took a hard line of noncompliance with the regulations on 

matters where safety and soundness were not at risk. The [institution] was already 

addressing the underlying issues and a constructive dialogue would have compelled 

change within [institution] operations rather than choosing to make a [rigid] ruling and a 

much less efficient route to compliance.

• Examiners mostly applied regulations correctly, but insisted on alerting the Board directly 

of a mistyping of one digit in a policy regulatory reference that could have instead been 

addressed with management. Lengthy and repetitive conversations about Exam Manual 

interpretations were held, although few [matters requiring attention] (MRAs) were 

required.

• Materiality of some of the findings did not warrant an MRA and certainly did not warrant 

classifying Board and Management as "unsatisfactory."

Statement #3

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

and management in addressing the risks of the institution.

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 2.1 2.3 2.4 2.3 2.2*

2021 N/A 2.0 1.7 1.7 1.8

2019 2.0 2.4 2.4 1.9 2.2

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• The [MRAs] led to the [institution] further documenting existing processes, practices and 

responsibilities within policies and/or procedures. The MRAs did not identify any risk 

weaknesses in the [institution], but through documentation did lead to a better resource 

trail regarding the specific issues raised.

• The exam team provided detailed explanations of the MRA items and they were presented 

in a constructive manner. The exam team was more than willing to meet multiple times 

with management and [audit committee]/board to go through the MRA items and offer 

explanations.
5 

• The MRAs give a dashboard of sorts that can be used as a guide for Board and 

management to focus on the coming months post-exam.

• The examination included no MRAs.

• Agree. Though we disagreed with the need for some of the recommended actions, we 

both appreciated the FCA and exam team working with us on these issues and thought 

that other recommendations were directly on point and will help us improve the 

[institution].

Comments perceived with negative feedback: 

• [Some] of our [MRAs] are overly picky of an institution [of] our size and it felt as if 

examiners were just looking for ways to add [to] the matters requiring attention list.

• The FCA appropriately interacted with various board members throughout the course of 

the examination cycle as they deemed necessary to support the individual reviews and 

when they presented their results to the Board. That said, we have prudently adjusted our 

lending practices to respond to [a] rapidly evolving agricultural and rural marketplace. 

Accordingly, going forward we are concerned that a practice of expecting clear authorizing 

language within a dated statute would not allow the System’s mission [of] service to evolve 

along with the rapidly changing needs of agriculture and rural America. 

• While actions taken by the FCA will result in remediation of identified risks, the risks do 

not affect safety and soundness. As expressed above, the board was already underway in 

addressing areas of concern and we voiced that to the examination team; however, rather 

than give the [institution] an opportunity to act on our own, the decision was made to 

impose heavier regulatory burden.

• Significant and extensive challenging of Audit Coordinator and Audit framework, despite 

low risk. Multiple MRAs in this area, although audit function is robust for size and 

complexity of the institution.

• Most of [the] MRAs were around a group of 30 year election practices that did not have 

any relation to risk and have NEVER been addressed in previous reviews.

• The guidance around our MRAs was vague. We were left unsure of the best way to address 

some audit areas. Particularly the level of audit necessary in our audit universe.

Statement #4

The examiners were professional and efficiently conducted examination activities.

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.8 1.5 1.9 1.5 1.6*

2021 N/A 1.2 2.0 1.4 1.5

2019 1.6 1.5 1.8 1.3 1.6

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• The examiners were professional and efficient in all areas including interaction with Board, 

management and staff members (with loan review). In addition, senior examiners were 
6 

effective at involving junior examiners and trainees, giving them exposure to the 

examination process and working directly with [institution] staff.

• FCA staff were very professional and productive. Additionally, the FCA deployed skilled 

resources with a [breadth] of backgrounds (finance, credit, technology, operations risk, 

assurance, management, etc.) that were able to effectively and efficiently evaluate the risks 

within the organization. A few new examiners were added to the team and were able to 

get up to speed. Also, we witnessed that additional succession planning has been 

implemented where prior examination staff were training new-to-team staff, which should 

assist in the transition process from one examiner to the next.

• The exam was conducted remotely but the [Examiner-in-Charge] (EIC) and staff were 

efficient and established consistent times for communication between the exam team and 

[institution] staff.

• The examiners were very patient and professional. They were adamant to not impede on 

our operations while simultaneously conducting their exam; it was much appreciated.

• The examination process was more efficient and professional than previous exams. 

• Very much agree. The exam team did a good job: professional, efficient, friendly, listened, 

flexible, etc.

Comments perceived with negative feedback: 

• Our EIC, Senior Examiner and Supervisory Examiner were professional and kind. We did 

have one examiner that was abrupt, arrogant and misrepresented our response to [the 

examiner’s] questions to our EIC.

• The examination team was mostly professional although certain protocol needed 

improvement in our view. By way of example, following a verbal discussion with board and 

management about findings in one area contained within the scope of the examination, 

the EIC asked the governance committee chairman if he would commit to address the 

areas discussed. The board and management should not be asked to commit to something 

based on a verbal discussion. The board and management should only be asked to commit 

to address findings after they are presented in writing.

The examination team spent hours on a technical issue that the [institution] agreed to 

address at the first meeting with examiners. With the time spent, the final report contained 

references to FCA regulations that we could never locate on FCA's official website. The 

issue was not a violation of any FCA regulations.

• Auditors were professional, but efficiency is questionable given timeframe of four and a 

half months of auditing for a small institution.

• We found the examiners to be very professional in conducting examination activities. 

Efficiency was impacted due to the transition of our EIC and examination staff during the 

examination.

• Examinations are much more time consuming today than 10 years ago. Advance letter 

issued on [date removed], exit on [date removed] [almost four months after the advance 

letter was issued], and Board presentation on [date removed] [more than three months 

after the exit]. Over 250 emails, phone calls and video conferences were [held] over that 

4-month period. This is a lot of time required for a limited staff of a $1B organization.
7 

COMMUNICATIONS

Statement #5

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

accurate, and timely.

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.8 1.7 2.1 1.6 1.8*

2021 N/A 1.7 2.0 1.7 1.8

2019 1.6 2.3 1.9 2.0 2.0

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• Communications were very good, specifically with the CEO and COO on the scope of the 

examination and initial examination results and findings. Communication with [institution] 

senior management and subject matter experts was also effective regarding discovery 

within a specific scope area and presenting the examiner’s preliminary results and findings.

• The communication between exam staff and [institution] staff was always timely and clear.

• I particularly appreciated the use of [virtual meetings]. I think it’s an effective medium for 

all.

• Very professional group!

• Communication has been more appropriate since a new EIC was assigned to the 

[institution]. 

• Again, agree. Good work by the exam team on communicating with the [institution]. The 

team listened to feedback from the Board [regarding] communication and adjusted 

communication accordingly.

Comments perceived with negative feedback: 

• Multiple members of our leadership team have scheduled recurring monthly or quarterly 

update calls with the FCA examiners to ensure the flow of information is clear, accurate 

and timely. These timely communications have proved to be very effective. The quarterly 

meetings with executive management allow for timely updates to the FCA regarding 

organization matters and for the FCA to provide the leadership updates on ongoing 

examination activities and other agency topics noteworthy of discussion.

However, communications with others in FCA could be improved as it relates to 

examination conclusions. Since many of the regulatory interpretations involve others in 

the Agency, we would appreciate additional dialog with the decisionmakers to present the 

basis for our interpretations and fully understand their interpretations. Also, when 

interpretations evolve over time it would be beneficial to allow for a flexible response 

applied prospectively. A regulatory environment of restrictive interpretations creates a 

difficult operating environment to fully meet our institution's mission.
8 

Additionally, specific to [institution name removed], the examination team and [institution] 

management meet on a quarterly basis to provide updates on [institution] sales, 

[institution] credit quality, [institution] operations, [institution] infrastructure and technical 

items, and any legal matters. In addition, the examination team utilizes this time to obtain 

updates on past discussions and any upcoming FCA activities/interaction. These meetings 

have been very effective and also helped set an examination scope that was appropriate.

• The [date removed] [Report of Examination] was delivered [date removed] [almost four 

months later].

• It was apparent several layers of examiners were involved, and each level of review 

reiterated similar conversations with just a small tweak. Each conversation involved many 

examiners and staff members.

Statement #6

Examination communications included the appropriate amount and type of information to 

help the board and audit committee fulfill their oversight responsibilities.

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.6 1.9 1.8 1.9 1.8*

2021 N/A 1.4 1.8 1.4 1.5

2019 1.8 2.0 1.9 2.0 1.9

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• Communications with the Board and Audit Committee was effective including the Report 

of Examination presentation and executive sessions, which provided good insights to 

[institution] performance, areas of emerging risk and focal points of the Agency.

• The FCA provided complete and detailed communications in the form of ongoing verbal 

updates, close-out meetings with the various management teams, a formal readout of 

results with executive management, presentation of examination results to the Board, and 

through the written final Report of Examination.

• The [Report of Examination] and other verbal and written communications from the exam 

team were always presented constructively and were helpful to the [institution] staff, 

Board, and committees.

• Agree. The exam team communicated openly with the Board and Management. They 

listened and engaged in active discussion on issues. 

Comments perceived with negative feedback: 

• On two separate occasions, the audit committee requested specific regulations, and the 

examiners responded that they would produce the regulations. In both cases, FCA never 

responded.

• Final report was useful, but audit committee and staff were exhausted with the lengthy 

process.

• Based on size and risk [the] amount of information may be excessive.
9 

Statement #7

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

formulating conclusions and matters requiring attention. 

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.9 1.6 2.5 2.0 2.0*

2021 N/A 1.7 1.8 1.5 1.7

2019 1.5 1.9 2.3 1.7 1.9

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• Very much agree, as mentioned with the response to Question 2, the examiners 

demonstrated good judgement in the application of these various examination sources, 

and considered the [institution’s] risk profile, operational processes and business practices 

when concluding on [institution] performance. 

• Examiners engaged in open dialog on various regulatory interpretive areas and fairly 

considered the views of the Board and management, particularly when they were allowed 

to apply their own judgment and not bound to follow guidance coming from other 

divisions of the Agency. In some cases, additional dialog with the agency representatives 

providing that guidance would be appreciated.

• The examiners were great to listen to our response and provide appropriate feedback.

• We appreciated having the opportunity to have open and productive conversations with 

examiners. Examiners were willing to consider and discuss the views of the Board and 

management.

• Agree. As noted above, the [institution] appreciated both the exam team and the FCA 

overall listening to both it and other System [institutions] in regard to the impact of some 

exam areas and the recommended remedies on smaller [institutions]. Would like to note 

the flexibility of the exam team who was working with us during the same time some of 

these issues were being discussed by the overall System and FCA – they did a good job of 

working in a changing environment.

Comments perceived with negative feedback: 

• There was no leeway given a minor regulation matter that could have been handled 

outside of an MRA.

• Formulation of MRAs is deemed to have been mostly fair and appropriate. However, the 

[institution] was not allowed to demonstrate performance on the MRAs before the FCA 

invoked further regulatory oversight.

• Generally, the exam team gave consideration to [institution] views and responses. 

However, we believe that some of the conclusions relating to internal/operational audit 

MRA items were overly burdensome to a small [institution] like [institution name removed]. 

Some MRA items could have been communicated as a recommendation [versus] MRA, 

especially when it's part of a Safety and Soundness Exam. I would say the views were 

considered but maybe not entirely fair for a small [institution].
10

• Sometimes.

• Examiners were open and listened but they seemed to have little room for consideration 

or judgement of materiality.

Statement #8

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

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 2.0 2.2 2.3 1.8 2.1*

2021 N/A 1.8 2.0 1.9 1.9

2019 1.9 2.4 2.1 2.0 2.1

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

FY averages were calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• Most of the examination focused on the [institution’s] performance to the scope items; 

however, when FCS perspective was given, it was helpful. The [EIC] was asked to research 

FCA’s examination approach with Standards of Conduct for agent notification and 

certification because of possible inconsistencies within the FCS.

• Our Board and management team takes all guidance from FCA seriously and attempts to 

fully comply. However, we encourage the FCA to increase staff interactions with System 

institutions prior to the issuance of new and potentially burdensome or restrictive 

guidance. This interaction results in more widely understood regulatory guidance while 

minimizing uneven application and misunderstanding.

Communication regarding changes in guidance or new guidance is primarily delivered via 

subscribed email blasts. This methodology works for the most part, but would encourage 

the examination team to ensure that awareness of changes to or new guidance that is put 

in place, be brought to the attention directly to the organization. The quarterly 

management meetings could be utilized for this.

• Agree, the guidance was helpful and topical – it was an interesting exam cycle because the 

small [institution] guidance was being discussed with the FCA at the same time we had the 

exam. As noted elsewhere, the [institution] thought the exam team did a good job of 

working with the [institution] in this changing environment.

Comments perceived with negative feedback: 

• Examination manual was applied with little room for discussion or consideration of true 

risks. Written guidance does not allow examiners room to adjust based on size or 

complexity. Written guidance matters because examiners regularly say, "The Exam Manual 

says..."

• While the FCA-wide guidance is proactive and helpful, we believe that a “one size fits all” 

approach to [institution] oversight is overly burdensome and costly to small [institutions] 

and may not be necessary for small, well-capitalized [institutions].

• Some of the guidance is broad and open for interpretation.
11

Statement #9 

Communications with FCA examination staff were effective for those examinations that 

were conducted entirely remotely. 

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.7 1.7 1.9 1.5 1.7*

2021 N/A 1.3 2.0 1.6 1.6

2019 Not applicable – statement added in FY 2021

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

2021 average was calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• On-site presence was missed, but understood due to COVID, etc. Prior to the start of the 

examination, training was held with examiners on accessing systems; no material 

disruptions occurred during the examination. Virtual meetings with the examiners resulted 

in good discussions and the ability to share documents. With that said, having FCA 

examiners on-site adds value as it tends to lead to more interactive discussions and 

provides the examiners [with] a better sense of organizational culture. 

• Management did not note any issues regarding the completion of the exam via fully 

remote FCA procedures. The use of technology ([virtual meetings], etc.) supported an 

effective examination. In many ways, the remote examinations have been more efficient 

than the in-person examinations.

• Most of the extended exam was conducted remotely, and that worked okay.

• The exam team communications were timely and effective.

• The offsite exam works especially by having frequent updates via [virtual meetings].

• Remote communications are very effective.

• Very much agree. Our exam was completely remote and it worked very well ([notably],

exam team attended final Board meeting, which was appreciated).

Comments perceived with negative feedback: 

• Our exam would have been better had the team been here in person. My relationship with 

my EIC would improve if we can discuss areas face-to-face. [Virtual meetings] work for the 

current times we are in, but I have noticed that remote exams tend to get me more MRAs 

that are not significant to the success of [the institution].
12

Statement #10

Communications with FCA examination staff were efficient for those examinations that 

were conducted entirely remotely. 

Average Numerical Ratings by FY Quarter

First Second Third Fourth FY 

FY Quarter Quarter Quarter Quarter Average

2022 1.6 1.8 1.8 1.5 1.7*

2021 N/A 1.3 2.1 1.8 1.7

2019 Not applicable – statement added in FY 2021

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

2021 average was calculated using the average of the quarterly averages 

shown in the table. 

Comments: 

• The answer closely resembles that provided with [Statement] 9. The examiners made good 

use of virtual options to conduct the examination in a timely and efficient manner, but onsite presence would have been an added value.

• See comments associated with [Statement] 9 regarding the effectiveness and efficiency of 

communications. [Institution’s response to Statement 9:] Management did not note any 

issues regarding the completion of the exam via fully remote FCA procedures. The use of 

technology ([virtual meetings], etc.) supported an effective examination. In many ways, the 

remote examinations have been more efficient than the in-person examinations.

• The exam team communications were timely and efficient.

• Same comment as above - worked well.

Comments perceived with negative feedback: 

• Remote conversations were not as efficient as face-to-face conversation could have been 

for several topics.

• Remote communications are very efficient; however, because they are easy to set up there 

can be a tendency to overuse and consume unnecessary time.

GENERAL QUESTIONS

Statement #11

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

Comments: 

• Examiners explained where they were taking a deep dive, FCA hot topics, and helpful 

information they were seeing across other exams.

• Having quarterly meetings with the [EIC] over the past two years has resulted in the EIC 

having a better understanding of the [institution], ranging from Board and management 

oversight to operational performance and processes. Plus, these meetings have led to 

stronger communication and open discussions between the Agency and [the institution]. 

This best practice was key to an overall effective examination.
13

With regards to the rotational examination, updates on the status of the examination and 

potential findings were helpful. This allowed the [institution] to research issues raised and 

make certain that full disclosure of business processes and practices, or individual loan 

conditions, was made.

• Our EIC was helpful in explaining MRA and being a neutral go between management and 

the examiners. Myself and [the] board appreciated [their] willingness to work with us on a 

due date for completion of an MRA.

• Opportunities to collaborate on the various risks facing the organization and the System 

as a whole. Also FCA’s recognition that our institution operated safely and soundly in all 

material respects.

• MRAs are helping the [institution] to improve in areas where improvement is needed.

• Time with examiners onsite when we were able to tour our territory, meet with our 

customers and help examiners understand why we do what we do. Our customers are the 

reason our institution and the System exists.

• The exam team being willing to meet multiple times remotely to discuss the results and 

MRA. The team was always very courteous and a pleasure to work with. The exam as a 

whole was very helpful to the [institution].

• The time the examiners took for [questions and answers]. I know our Board was also 

appreciative of the dialogue.

• We appreciate having examination activities conducted remotely as this is less disruptive 

to our staff.

• One-on-one discussions with the examination team.

• We have a great relationship with FCA that we have built over the years. We appreciate 

their feedback and proactively incorporate not only MRAs but verbal best practice 

recommendations into our action plans to further enhance the [institution].

• Remote usage.

• Feedback working through the process of loan review and process review was beneficial 

in general.

• The quarterly calls with management to provide updates on [institution] operations and 

conditions and to allow the EIC to communicate FCA focus areas. 

• The progress we made on issues relating to the audit and review function.

Statement #12 

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

Comments: 

• We had to provide a lot of follow-up on questions that were already addressed in our 

policies and procedures provided in advance of the review.

• The absence of being on-site and not having a better 1:1 experience.

• The remote review and the time it took from start to finish was [specific months removed]

[approximately four months]. 

• Narrow regulatory interpretations that limit System institution’s ability to fully serve its 

mission.

• Placing the [institution] under increased regulatory burden before giving the [institution] 

an opportunity to address the MRAs that the board and management had agreed to 

address, and in fact that the [institution] was already in process of addressing.
14

• Extensive conversations of best practices imposed by individual examiners which were not 

ultimately supportable enough to be included in the final report, but which will still be 

used to evaluate our ongoing operations.

• This is a Safety and Soundness Exam; therefore, the "form over substance" feel and "one 

size fits all" approach when it comes to a small, well-capitalized [institution], especially in 

areas that aren't associated with much risk or seem to be a matter of preference. The feel 

of being nitpicked down to a single word in a document and that resulting in an MRA.

• Probably just the build up to the exam, information gathering, etc.

• At times during the examination, the end of day lists of questions or requests for 

information are time consuming for [institution] staff to address in a timely manner.

• The conference call with audit chair was inconvenient and [the] chair did not receive [the] 

link timely.

• Due to the [institution’s] limited consumer loan portfolio, aspects of the compliance audit 

aren't necessarily relevant. We partner with [name removed] to assist us in meeting our 

mission to provide rural home loans to our territory since we do not have that expertise.

• Time of review. See [Statement] 4. [Institution’s response to Statement 4:] Examinations 

are much more time consuming today than 10 years ago. Advance letter issued on [date 

removed], exit on [date removed] [almost four months later], and Board presentation on 

[date removed] [more than three months later]. Over 250 emails, phone calls and video 

conferences were [held] over that 4-month period. This is a lot of time required for a 

limited staff of a $1B organization

• Audit process review.

• Not applicable.

• Neither the Board nor Management thought any aspect of the exam was not beneficial. 

Frankly, we find value in having a third party examine and discuss each aspect of the 

[institution] (even areas where there is clearly no potential weakness). Both the Board and 

Management think they do a good job of running the [institution] and take pride in the 

result – getting to discuss the result of that work with a third party is welcome. 

Statement #13 

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

not provided in the preceding responses.

Comments: 

• Overall the review was satisfactory.

• The examination was conducted professionally and engaged the Board at an appropriate 

level. We enjoyed the direct and candid discussions in executive session, with and without 

the CEO. The [institution] has worked to improve the relationship with FCA, which was a 

Board directive. We appreciate the efforts taken by FCA with this as well – communication 

is a two-way street. We look forward to a continued effective and productive relationship.

• The Board appreciates the opportunity to engage with the FCA during the examination 

process. We concur with management’s feedback and are particularly focused on clarity 

around regulatory matters and enhanced consultation and communication throughout 

the System.

• Appreciated hearing the positive feedback.
15

• They indicated our Exam team was approachable and they felt less intimidating, engaging 

and asking questions to the team when appropriate.

• The Board felt that the scope of the examination was appropriate and fairly considered the 

risk profile of the [institution]. We also appreciated that FCA staff presented the Report of 

Examination in person to the entire Board.

• The Board challenged the Exam Team on the areas where it disagreed with the potential 

benefit to the [institution] versus the associated cost for some actions. It appreciated the 

willingness of the exam team to engage in these discussions constructively, to listen to the 

Board's concerns and attempt to work to a mutually beneficial solution. 

Comments perceived with negative feedback: 

• The final report of examination omitted several areas that were included in the scope of 

the examination where the [institution] was found to be fully in compliance. When asked 

why those areas were omitted, the EIC responded by saying, in an effort to deliver focused 

and streamlined reports, they do not always include all areas from the scope of the 

examination. The board and management view this approach as being inconsistent with 

providing a fair and balanced report of examination.

• As a Board we feel the impact of regulatory burden. Our staff provided updates for several 

months and it was evident that the staff time and resources devoted to the examination 

pulled them away from other duties for longer than seemed necessary.

• The Board would like to see a type of response from an exam be a "recommendation" 

[versus] MRA. Some items can be viewed as preference or subjective [versus] something 

needing immediate attention and causing higher risk until remediated.

• As a Board, we realize the importance of regular, thorough reviews. The need is obvious 

and it's not necessary to revisit that here. The examiners conducting the review are 

professional, intelligent, and courteous. They take their job seriously and the Board 

recognizes and appreciates this.

Given this forum and opportunity, the Board would like to comment on two things:

[1.] The time involved, detailed earlier in this document, seems egregiously long. With 

reviews at the interval currently set, there is little time on the calendar when our staff is 

not dealing with a review, all the while attempting to serve our customers efficiently, as is 

our mission mandated by charter. The toll the reviews take on our staff is substantial.

[2.] As for this particular review, the MRAs had nothing to do with serving our customers, 

our credit condition, capital, Human Resources, IT security; none of the parameters that 

make an [institution] strong. The MRAs had to do with decades old practices regarding 

director elections. This has nothing to do with risk. And for this practice, deemed lacking 

after countless other reviews, caused our [institution] to receive a [Financial Institution 

Rating System] [number removed] rating. Employee, staff, and Board morale is a real thing 

and to receive this rating based on the aforementioned conditions is borderline ridiculous. 

This is not a reflection on the reviewers themselves; the parameters they are bound with 

are lacking. 
16

Request for OIG Contact

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

survey responses and/or the examination?

One institution surveyed for this report indicated that they would like a call from the OIG.

STATISTICAL INFORMATION ON NEGATIVE COMMENTS

Below is statistical information on the negative comments provided by the 18* institutions that 

responded to the survey for the third and fourth quarters FY 2022. OIG lists separately comments 

with any perceived negative feedback for survey statements 1-10 and 13 in this report. Ten

institutions, or 56%, provided at least one negative comment in their narrative responses. We note 

that many of the negative comments appeared to be from smaller-sized institutions.

Number of Institutions Providing Negative Comments

Number of Negative 

Comments Provided Number of Institutions Percentage of Institutions

No comments provided 2 11%

0 6 33%

1-2 4 22%

3-4 3 17%

5-6 0 0%

7-8 2 11%

9+ 1 6%

*For the above statistical information, we did not double count the comments provided by the institution that stated

its response represented two institutions surveyed.
17

SUMMARY OF NUMERICAL RATINGS FOR FISCAL YEAR 2022

The table below provides FY 2022 cumulative data for the numerical ratings for survey statements 

1-10. (Statements 11-13 are not numerically rated.) During FY 2022, the OIG sent surveys to 51

FCS institutions and received 39* responses. This is a 76% response rate, up two percentage points

from FY 2021’s response rate of 74%. For FY 2022, the overall average rating for survey statements 

1-10 was 1.9 and 83.4% of the ratings were either “completely agree” (1), or “agree” (2).

*One institution stated its response represented two institutions surveyed. OIG did not count the 

numerical ratings from the institution twice.

Number and Percentage per Rating Category

Statement

Completely 

Agree

(1)

Agree

(2)

Neither 

Agree nor 

Disagree 

(3)

Disagree 

(4)

Completely 

Disagree 

(5)

Does 

Not 

Apply◊

(6)

Average 

Numerical 

Rating

1 6 15% 24 62% 7 18% 2 5% 0 0% 0 0% 2.1

2 7 18% 27 69% 4 10% 1 3% 0 0% 0 0% 2.0

3 6 15% 20 51% 8 21% 2 5% 1 3% 2 5% 2.2

4 20 51% 15 38% 3 8% 0 0% 1 3% 0 0% 1.6

5 16 41% 16 41% 6 15% 1 3% 0 0% 0 0% 1.8

6 13 33% 21 54% 5 13% 0 0% 0 0% 0 0% 1.8

7 11 28% 20 51% 6 15% 2 5% 0 0% 0 0% 2.0

8 8 21% 22 56% 8 21% 1 3% 0 0% 0 0% 2.1

9 15 38% 22 56% 1 3% 1 3% 0 0% 0 0% 1.7

10 16 41% 20 51% 3 8% 0 0% 0 0% 0 0% 1.7

Total 

Responses 118 30.3% 207 53.1% 51 13.1% 10 2.6% 2 .5% 2 .5% 1.9

◊

Ratings of “6” (Does Not Apply) were not included in average numerical ratings.
REPORT FRAUD, WASTE, ABUSE, &

MISMANAGEMENT

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

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

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

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

can report allegations to us in several ways:

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

(703) 883-4316

Email: fca-ig-hotline@rcn.com

Mail: 1501 Farm Credit Drive

McLean, VA 22102-5090

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

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