Farm Credit Administration Office of Inspector General 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

May 15, 2019 

The Honorable Dallas P. Tonsager, Board Chairman 

The Honorable Jeffery S. Hall, Board Member

The Honorable Glen R. Smith, Board Member 

Farm Credit Administration 

1501 Farm Credit Drive 

McLean, Virginia 22102 

The Honorable Ron Johnson, Chairman The Honorable Elijah Cummings, Chairman

Committee on Homeland Security and Committee on Oversight and Reform

Governmental Affairs United States House of Representatives 

United States Senate Rayburn House Office Building, 2157

Dirksen Senate Office Building, SD-340 Washington, DC 20515 

Washington, DC 20510 

The Honorable Gary C. Peters, Ranking Member The Honorable Jim Jordan, Ranking Member

Committee on Homeland Security and Committee on Oversight and Reform

Governmental Affairs United States House of Representatives 

United States Senate Rayburn House Office Building, 2105

Hart Senate Office Building, SH-442 Washington, DC 20515 

Washington, DC 20510 

The Honorable Mick Mulvaney, Director The Honorable Gene L. Dodaro, Comptroller 

Office of Management and Budget General of the United States 

725 17th Street NW U.S. Government Accountability Office 

Washington, DC 20503 441 G. Street NW, Room 5490 

Washington, DC 20548 

To Whom It May Concern: 

The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments 

Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and 

Recovery Improvement Act of 2012 (IPERIA), requires federal agencies to identify and report on 

programs and activities that may be susceptible to significant improper payments. Office of 

Management and Budget (OMB) Memorandum M-18-20, Transmittal of Appendix C to OMB 

Circular A-123, Requirements for Payment Integrity Improvement, defines “significant improper 

payments” as gross annual improper payments in a program exceeding: 1) both 1.5 percent of

program outlays and $10,000,000 of all program or activity payments made during the fiscal

year (FY) reported, or 2) $100,000,000 (regardless of the improper payment percentage of total 
 

 

 

program outlays). Per IPERIA, OMB identifies high-priority programs for greater levels of

oversight and review. The high-priority threshold for FY 2018 reporting is $2 billion in estimated 

improper payments as reported in the Agency Financial Report (AFR) or Performance and 

Accountability Report (PAR). 

OMB Memorandum M-18-20 and IPERA describe what each Inspector General should review to 

assess their agency’s compliance with improper payment reporting requirements. Compliance is 

defined by whether the agency has: 

• Published an AFR or PAR for the most recent fiscal year and posted that report and any 

accompanying materials required by OMB on the agency website; 

• Conducted a program specific risk assessment for each program or activity that 

conforms with Section 3321 note of Title 31 U.S.C (if required); 

• Published improper payment estimates for all programs and activities identified as 

susceptible to significant improper payments under its risk assessment (if required); 

• Published programmatic corrective action plans in the AFR or PAR (if required); 

• Published, and is meeting, annual reduction targets for each program assessed to be at 

risk and estimated for improper payments (if required and applicable); and 

• Reported a gross improper payment rate of less than 10 percent for each program and

activity for which an improper payment estimate was obtained and published in the AFR 

or PAR. 

Based on the above criteria, the Farm Credit Administration (FCA or Agency) Office of Inspector 

General determined that FCA complied with IPERA requirements applicable to the Agency for FY

2018. FCA published and posted a PAR for FY 2018 on November 13, 2018. 

FCA conducted risk assessments for FY 2017 and determined that all programs and activities 

were low risk and not susceptible to significant improper payments. For programs that are 

deemed not to be susceptible to significant improper payments, agencies must perform risk 

assessments at least once every three years. Therefore, FCA was not required to conduct a risk

assessment for FY 2018, and the next required risk assessment will be for the period ending

September 30, 2020. As none of the programs or activities assessed by FCA was determined to 

be susceptible to significant improper payments, the Agency was not required to publish 

improper payment estimates, publish programmatic corrective action plans, publish and meet 

annual reduction targets, or report gross improper payment rates of less than 10 percent. 

As part of its FY 2017 risk assessments, FCA assessed five programs and activities: contract 

payments and/or invoices; purchase cards; travel cards; claims and/or vouchers; and Federal 

employee payments, including payroll. The following table summarizes FCA’s compliance with 

improper payments reporting requirements with respect to those programs. 
 

 

 

 

Program

Name 

Published an AFR or 

PAR

Conducted a Risk

Assessment

Published an 

Improper Payment

Estimate 

Published Corrective 

Action Plans

Published and is 

Meeting Reduction 

Targets

Reported a

n

Improper Payment

Rate of Less Than 10 

Percent 

Contract 

Payments 

and/or

Invoices 

Compliant N/A N/A N/A N/A N/A 

Purchase 

Card Compliant N/A N/A N/A N/A N/A 

Travel Card Compliant N/A N/A N/A N/A N/A 

Claims 

and/or

Vouchers 

Compliant N/A N/A N/A N/A N/A 

Federal 

Employee 

Payments, 

Including

Payroll 

Compliant N/A N/A N/A N/A N/A 

Should you have any questions, please do not hesitate to contact me at (703) 883-4030. 

Respectfully, 

Wendy R. Laguarda

Inspector General