OFFICE OF 

INSPECTOR GENERAL

Farm Credit Administration's

Travel Compensation 

and Incentives 

I-17-03 

Inspection Report 

Inspector 

Ava Bell 

Issued March 30, 2018 

FARM CREDIT ADMINISTRATION 
Farm Credit Administration Office of Inspector General 

1501 Farm Credit Drive 

McLean, VA 22102-5090 

March 30, 2018 

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 22102-5090 

Dear Chairman Tonsager and Board Members Hall and Smith: 

The Office of Inspector General (OIG) completed an inspection of the Farm Credit 

Administration’s (FCA or Agency) Travel Compensation and Incentives. The objective of 

the inspection was to determine whether the Agency is effectively and efficiently 

administering the Travel Compensation Program and other travel incentives. We found 

FCA is effectively administering the program, with program controls that adequately 

limit risk for the Agency. This report contains no recommendations or agreed-upon 

actions. 

We appreciate the courtesies and professionalism extended by FCA personnel to the 

OIG staff. If you have any questions about this inspection, I would be pleased to meet 

with you at your convenience. 

Respectfully, 

Wendy R. Laguarda 

Inspector General 

Enclosure 
The objective of this 

inspection was to 

determine whether the 

Agency is effectively and 

efficiently administering 

the Travel Compensation 

Program and other travel 

incentives. 

This report contains no 

recommendations or 

agreed-upon actions. 

INSPECTION OF 

FCA’S TRAVEL COMPENSATION 

AND INCENTIVES 

The Farm Credit Administration’s (FCA or Agency) Travel 

Compensation Program provides additional 

compensation to employees who travel extensively 

throughout the year while on official FCA business to 

recognize the burden of extensive travel and encourage 

employee retention. 

The Office of Inspector General (OIG) reviewed the 

Travel Compensation Program’s administration and 

controls for efficiency and effectiveness. We also 

reviewed other travel incentives given through awards. 

Hence, we focused the scope of our review on travel 

compensation payments and other travel incentives 

paid during fiscal years (FYs) 2016-2017. 

We found FCA is effectively administering the program, 

with program controls that adequately limit risk for the 

Agency, including a documented policy that outlines the 

process for submitting claims for reimbursement and 

required supervisory approvals. 
TABLE OF CONTENTS 

ACRONYMS __________________________________________________________ 1

BACKGROUND _______________________________________________________ 1

INSPECTION RESULTS _________________________________________________ 2

Program Administration ________________________________________________________________ 3

Program Controls _______________________________________________________________________ 4

Other Travel Incentives __________________________________________________________________ 5

Conclusion ______________________________________________________________________________ 5

OBJECTIVE, SCOPE, AND METHODOLOGY _______________________________ 5
1 

ACRONYMS 

COO Chief Operating Officer 

Farmer Mac Federal Agricultural Mortgage Corporation 

FCA Farm Credit Administration 

FCS Farm Credit System 

FY Fiscal Year 

OAS Office of Agency Services 

OCFO Office of Chief Financial Officer 

OE Office of Examination 

OIG Office of Inspector General 

PPM Policies and Procedures Manual 

BACKGROUND 

The Farm Credit Administration (FCA or Agency) is an independent federal agency 

responsible for regulating, examining, and supervising the Farm Credit System (FCS) and 

the Federal Agricultural Mortgage Corporation (Farmer Mac). FCA ensures that FCS 

institutions and Farmer Mac are safe, sound, and dependable sources of credit and 

related services for all creditworthy and eligible persons in agriculture and rural America. 

To accomplish its mission, it is essential for FCA to recruit and retain skilled examiners 

who may be required to travel extensively on official business for the Agency. 

FCA implemented a Travel Compensation Program (PPM 856) in July 2003 that provides 

additional compensation to employees who travel extensively throughout the year while 

on official FCA business to recognize the burden of extensive travel and encourage 

employee retention. This program is used almost exclusively by the Office of 

Examination (OE) where examiners travel extensively on official business to conduct 

examinations of FCS institutions. 

FCA pays travel compensation to employees who travel on official business for the 

Agency in the amount of $50 per night for every night on eligible travel that is in excess 
2 

of 50 nights in a calendar year. Employees file annual reimbursement claims in the year 

following the calendar year in which the excess overnight travel occurred. 

Reimbursements are budgeted for, and paid during, the fiscal year (FY) following the 

calendar year of travel. For example, if an employee traveled 55 nights in calendar year 

2016, the employee would be reimbursed in FY 2017 for $250 (which is $50 for each of 

the five nights of travel in excess of 50 nights during the previous calendar year). 

We reviewed the Travel Compensation Program’s administration and controls for 

efficiency and effectiveness and focused the scope of this review on FYs 2016-2017. 

The Agency also provides other travel incentives through its awards program. FCA’s 

Incentive Awards and Recognition policy (PPM 818) states that employees may receive a 

special act award for contributing to the economy and efficiency of the Agency, such as 

reducing costs for official business travel. Examples include an employee using frequent 

flyer miles to purchase a plane ticket for a business trip, or an employee staying with 

family or friends while on official business travel. We reviewed all special act awards 

given to employees during FYs 2016-2017 for other travel incentives through the awards 

program. 

Prior Reviews 

The OIG conducted two previous reviews related to this inspection’s objective. In 2009, 

the OIG evaluated OE’s budgeting process, usage and control regarding travel expenses 

(A-09-02, OE Travel Expense Budgeting, Usage and Control). The audit report contained 

no recommendations or agreed-upon actions. In 2017, the OIG audited the Agency’s 

awards program and found that FCA had an adequate control structure in place for 

awards (A-17-01, FCA’s Awards Program). However, the OIG identified opportunities to 

improve controls over the awards program and the audit report included four agreedupon actions. 

INSPECTION RESULTS 

The objective of this inspection was to determine whether the Agency is effectively and 

efficiently administering the Travel Compensation Program and other travel incentives. 

During our review, the OIG found FCA is effectively administering the program with 

program controls that adequately limit risk for the Agency. 
3 

Program Administration 

OIG reviewed budgeting, program payments, and reporting in FYs 2016-2017 to 

determine whether FCA is effectively administering the Travel Compensation Program. 

The Travel Compensation Program is open to all employees in the Agency. However, OE 

is the primary user of the program since examiners are required to travel extensively 

throughout the year while on official FCA business. Outside of OE, we found only one 

employee in the Office of Regulatory Policy who was reimbursed for excess eligible 

travel in FYs 2016-2017. There were no other employees from other offices (outside of 

OE) who received compensation under the program during this period. 

The Travel Compensation Program policy states that office directors will budget for 

compensation under this program. The program is included in the overall cash award 

budget for each office. We reviewed the budgeting methodology OE uses for the Travel 

Compensation Program and found that it is a reasonable methodology. OE uses the 

historical travel compensation paid in the prior fiscal year as a basis to set the amount 

allocated in the next fiscal year budget. For FY 2016, OE allocated $30,000 for travel 

compensation, and paid out $35,100. For FY 2017, OE again allocated $30,000, and paid 

out $24,950. Because travel compensation is paid from the overall award budget, this 

allows flexibility in program budgeting. The FY 2016 program deficit was covered by an 

adjustment from the overall award budget, and the FY 2017 program resulted in a 

surplus. 

In our review, we found the Office of Agency Services (OAS) processed travel 

compensation reimbursement forms and the Office of Chief Financial Officer (OCFO) 

paid claims in a timely manner to employees. The Travel Compensation Program policy 

states that by April 1, employees will receive one annual payment representing their 

approved travel compensation claim for eligible travel that occurred during the prior 

calendar year. The OCFO provided documentation showing they processed travel 

compensation payments in pay periods ending on or before April 1 for both FYs 2016 

and 2017, with one exception. 

The Travel Compensation Program policy requires OAS to provide a summary report to 

the Chief Operating Officer (COO) and the Chief Executive Officer detailing the 

employees who were compensated, the number of nights in travel status, and the 

amount of compensation received under the program by March 31 of each year. We 

reviewed the annual reporting for FYs 2016-2017 payments and found OAS generated 

the required reporting by March 31 each year. Each report was provided to the COO. 
4 

Program Controls

We reviewed application forms, travel detail, and supervisory approvals to determine 

whether FCA has effective controls over the Travel Compensation Program and whether 

the Agency is consistently following the documented process for the program. 

FCA’s Travel Compensation Program policy requires employees to complete a travel 

compensation reimbursement form and submit it to their supervisor for review and 

approval by February 1 each year for eligible travel completed in the previous calendar 

year. The policy requires supervisors to review reimbursement claims for accuracy and 

certify that claims are for eligible official business travel. 

The Travel Compensation Program policy describes types of eligible travel, including: 

 on-site examinations, 

 attending meetings related to FCA business, 

 FCA job interviews, 

 special projects, and 

 other official FCA business (e.g., instructing, recruiting). 

The policy also provides examples of ineligible travel, including: 

 rotational assignments, 

 relocation trips, 

 additional nights out for personal convenience (e.g., early arrival or late 

departure), and 

 weekend nights when the employee’s supervisor would otherwise have 

authorized the employee’s return to his/her residence. 

We reviewed all 101 travel compensation reimbursement claims submitted for calendar 

years 2015-2016 travel and found all claims were submitted on or before February 1 of 

2016-2017, respectively. We also found all travel compensation payments made during 

FYs 2016-2017 were supported by the required reimbursement form. 

Additionally, we found reimbursement forms were accompanied by supporting 

documentation detailing eligible official FCA business travel, with one exception. All 

forms had supervisor approval certifying the travel compensation request was accurate, 

and OAS approval authorizing payment for the travel compensation payment. 
5 

Other Travel Incentives

The scope of our review also included other travel incentives paid to employees. The 

Agency’s Incentive Awards and Recognition policy states that a travel incentive award 

may be paid to employees who contribute to the economy and efficiency of Agency 

operations by reducing travels costs. We reviewed all special act awards given to FCA 

employees during FYs 2016-2017 and found that no travel incentive awards were 

recommended for travel cost savings to FCA. 

Conclusion 

This report contains no recommendations or agreed-upon actions. 

OBJECTIVE, SCOPE, AND METHODOLOGY 

The objective of this inspection was to determine whether the Agency is effectively and 

efficiently administering the Travel Compensation Program and other travel incentives. 

We conducted fieldwork at FCA’s headquarters in McLean, Virginia from June 2017 to 

March 2018. We limited our scope to review travel compensation and incentives paid 

during FYs 2016-2017 (travel compensation payments for travel nights from calendar 

years 2015-2016). 

We completed the following steps to accomplish the inspection objective: 

 Reviewed applicable laws and other guidance related to the inspection objective. 

 Considered prior reviews related to the inspection objective. 

 Reviewed applicable FCA policies and procedures. 

 Reviewed all travel compensation reimbursement forms that were processed in 

FYs 2016-2017. 

 Reviewed all special act awards paid to FCA employees in FYs 2016-2017. 

This inspection was performed in accordance with the Council of the Inspectors General 

on Integrity and Efficiency’s Quality Standards for Inspection and Evaluation. Those 

standards require that we plan and perform the inspection to obtain sufficient, 

competent and relevant evidence that supports a reasonable basis for our findings, 

conclusions and recommendations. We assessed internal controls and compliance with 

laws and regulations to the extent necessary to satisfy the objective. Because our review 

was limited, it would not necessarily have disclosed all internal control deficiencies that 

may have existed at the time of our inspection. We assessed the information and data 
6 

collected during the inspection and determined it was sufficiently reliable and valid for 

use in meeting the inspection objective. We assessed the risk of fraud related to our 

inspection objective while evaluating evidence. Overall, we believe the evidence 

obtained is sufficient to provide a reasonable basis for our findings and conclusions 

based on the inspection objective. 

   
FARM CREDIT ADMINISTRATION 

OFFICE OF INSPECTOR GENERAL

REPORT 

Fraud | Waste | Abuse | Mismanagement 

Phone: Toll Free (800) 437-7322; (703) 883-4316 

Fax: (703) 883-4059 

E-mail: fca-ig-hotline@rcn.com

Mail: Farm Credit Administration 

 Office of Inspector General 

 1501 Farm Credit Drive 

 McLean, VA 22102-5090