Farm Credit Administration Office of Inspector General

1501 Farm Credit Drive

McLean, Virginia 22102-5090

May 15, 2020

The Honorable Glen R. Smith, Board Chairman and CEO

The Honorable Jeffery S. Hall, Board Member

Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102

The Honorable Ron Johnson The Honorable Carolyn B. Maloney

Chairman Chairwoman

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 The Honorable Jim Jordan

Ranking Member Ranking Member

Committee on Homeland Security and Committee on Oversight and Reform

Government 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 Russell T. Vought The Honorable Gene L. Dodaro

Acting Director Comptroller General of the United States

U.S. Office of Management and Budget U.S. Government Accountability Office

725 17th Street NW 441 G. Street NW, Room 5490

Washington, DC 20503 Washington, DC 20548

Re: Farm Credit Administration’s Compliance with Improper Payment Reporting 

Requirements for Fiscal Year 2019

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), required federal agencies to identify and report on
programs and activities that may be susceptible to significant improper payments.1 U.S. 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 2019 reporting is $2 billion in estimated improper 

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

Report (PAR). 

Inspectors General are required annually to report on whether their agency is in compliance with 

improper payment reporting requirements. OMB Memorandum M-18-20 and IPERA describe 

what each Inspector General should review to assess their agency’s compliance. 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 improper payments reporting requirements 

applicable to the Agency for FY 2019. 

FCA published a PAR for FY 2019 on November 8, 2019, and posted the PAR on the Agency’s 

website. 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 2019, 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 were determined to 

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

1 In March 2020, the Payment Integrity Information Act of 2019 (PIIA) repealed and reconstituted these and other 

requirements, with amendments, at 31 U.S.C. §§ 3351–3358. The OIG understands that OMB guidance on 

implementation of the changes made in the PIIA is forthcoming.
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

 an AFR 

 PAR

d a Risk 

ss entm

ed an 

 Payment 

ate

ished 

e Action 

a sn

ed and is 

ing 

 argetsT

ed an 

 Payment 

ess Than 

e cent

Name

Published

or

Conducte

Asse

Publish

Improper

Estim

Publ

Correctiv

Pl

Publish

Meet

Reduction

Report

Improper

Rate of L

10 P r

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

Vouchers

Federal 

Employee 

Payments, Compliant N/A N/A N/A N/A N/A

Including 

Payroll

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

Respectfully,

Wendy R. Laguarda

Inspector General