Office of

Inspector General

Semiannual Report to the Congress

October 1, 2010

through

March 31, 2011

Number 44

April 20, 2011
Farm Credit Administration Office of Inspector General

1501 Farm Credit Drive

McLean, VA 22102-5090

(703) 883-4030

April 20, 2011

The Honorable Leland A. Strom, Chairman and Chief Executive Officer

The Honorable Kenneth A. Spearman, Board Member

The Honorable Jill Long Thompson, Board Member

Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102-5090

Dear Chairman Strom and FCA Board Members Spearman and Long Thompson:

Enclosed is the semiannual report on the activities of the Farm Credit Administration’s (FCA or 

Agency) Office of Inspector General (OIG) for the period October 1, 2010 through March 31, 2011. 

This is the forty-fourth report since the establishment of the OIG on January 22, 1989. 

I am submitting this report in accordance with the Inspector General Act of 1978, as amended (IG

Act). Section 5(b) of the IG Act requires that the FCA Board send this report to the appropriate 

Congressional committees and subcommittees within 30 days after the date of this transmittal, 

accompanied by management’s report on the status of audit, inspection, and/or evaluation action 

items. 

During this reporting period, the OIG issued the annual financial audit report. The OIG contracted 

with the Bureau of the Public Debt for Brown & Company CPAs, PLLC, to perform the audit of 

FCA’s financial statements for fiscal year 2010. The audit delivered an unqualified opinion and was 

issued November 8, 2010. Please refer to page 5 for further information. 

Also, the OIG’s annual evaluation of the Agency’s compliance with the Federal Information Security 

Management Act was completed. This annual evaluation was conducted by the OIG’s Senior 

Information Technology Auditor and the report was issued November 15, 2010. The report 

contained one agreed-upon action. Please refer to page 5 for further information.

Additionally, two audit reports were initiated and were still open during this reporting period. The 

audits are of FCA’s contracting activities and FCA’s approval process of the Farm Credit System 

(FCS) Funding Corporation’s debt issuances on behalf of the FCS banks. Please refer to pages 5-6

for further information. 

At the end of the reporting period, there were eleven open agreed-upon actions from inspection 

reports issued in the previous semiannual reporting period: one from the inspection report on FCA’s 
Adherence to the Government in the Sunshine Act issued July 26, 2010, and ten from the 

inspection report on FCA’s Borrower Complaint Process issued September 16, 2010.

During the period, the OIG, according to a schedule promulgated by the Council of the Inspectors 

General on Integrity and Efficiency, received a peer review on our audit function from the 

Commodity Futures Trading Commission’s Office of Inspector General, which reflected a “Pass”; 

and began a peer review of the audit function of the Consumer Product Safety Commission’s Office 

of Inspector General.

If you have any questions, please call me at 4241 or 4030. I look forward to continuing a positive 

relationship between the OIG and the FCA Board which I view as a partnership, striving to 

strengthen FCA operations.

Respectfully,

Carl A. Clinefelter

Inspector General

Enclosure
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

TABLE OF CONTENTS

EXECUTIVE SUMMARY........................................................................................ 1

BACKGROUND................................................................................................... 2

FARM CREDIT ADMINISTRATION........................................................................... 2

FARM CREDIT SYSTEM....................................................................................... 2

MANAGEMENT AND PERFORMANCE CHALLENGES.............................................. 3

FARM CREDIT SYSTEM................................................................................................ 3

 SAFETY AND SOUNDNESS...................................................................................... 3 

 MISSION................................................................................................................ 3

FARM CREDIT ADMINISTRATION........................................................................... 4

 AGRICULTURAL ECONOMIC DOWNTURN................................................................ 4

 STRATEGIC PLANNING................................................................................... 4

 LEVERAGING TECHNOLOGY............................................................................ 4

AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED..................................... 5

FY 2010 INDEPENDENT FINANCIAL AUDIT OF FCA ...................................................... 5

FY 2010 FEDERAL INFORMATION SECURITY MANAGEMENT ACT EVALUATION................ 5

AUDITS, INSPECTIONS, AND EVALUATIONS IN PROGRESS...................................... 6

FCA’S APPROVAL PROCESS OF FUNDING CORPORATION DEBT ISSUANCES................... 6

FCA’S CONTRACTING ACTIVITIES......................................................................... 6

STATUS OF UNIMPLEMENTED RECOMMENDATIONS............................................. 6

INVESTIGATIONS................................................................................................ 7

LEGISLATION AND REGULATIONS....................................................................... 7

OTHER ACTIVITIES............................................................................................. 8

QUARTERLY SURVEY OF FARM CREDIT SYSTEM INSTITUTIONS.................................. 8

STAFF PARTICIPATION IN ACTIVITIES WITHIN THE INSPECTOR GENERAL COMMUNITY.... 9

STAFF PARTICIPATION IN AGENCY ORGANIZATIONS................................................ 9

STAFF DEVELOPMENT....................................................................................... 9

ANNEX.............................................................................................................. 10

APPENDICES

APPENDIX A – INDEX OF REPORTING REQUIREMENTS............................................. 11

APPENDIX B – AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED...................... 12

APPENDIX C – REPORTS WITH QUESTIONED COSTS............................................... 13

APPENDIX D – REPORTS WITH RECOMMENDATIONS THAT FUNDS

 BE PUT TO BETTER USE............................................................. 14

APPENDIX E – PEER REVIEWS CONDUCTED OF THIS OFFICE.................................... 15

APPENDIX F – PEER REVIEWS CONDUCTED BY THIS OFFICE..................................... 16

APPENDIX G – FCA ORGANIZATIONAL CHART......................................................... 17

APPENDIX H – OFFICE OF INSPECTOR GENERAL ORGANIZATIONAL CHART................... 18

APPENDIX I – GLOSSARY OF TERMS...................................................................... 19
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

1

EXECUTIVE SUMMARY

This Semiannual Report to the Congress summarizes the activities and 

accomplishments of the Farm Credit Administration’s (FCA or Agency) Office of 

Inspector General (OIG) for the period October 1, 2010 through March 31, 2011. 

The OIG’s efforts were directed toward implementing the OIG’s fiscal year (FY) 2011

strategic and operational plan and budget; performing audits, inspections, and 

evaluations of FCA programs and operations; conducting investigations, as 

necessary; independently and confidentially surveying Farm Credit System (FCS or 

System) institutions regarding the effectiveness of the Agency’s examination function 

and examiners; and providing objective, independent reporting and counsel to the 

FCA Board on FCA programs and operations.

During this reporting period, the OIG issued one audit report. The OIG contracted 

with the Bureau of the Public Debt (BPD) for Brown and Company CPAs, PLLC 

(Brown & Co.) to perform the audit of FCA’s financial statements for FY 2010. The 

audit delivered an unqualified opinion and was issued November 8, 2010. See page 

5 for further information.

Also, the OIG issued an evaluation report on the Agency’s compliance with the 

Federal Information Security Management Act (FISMA). One agreed-upon action 

resulted from the evaluation. The action was addressed and closed as of the end of 

this reporting period. This evaluation was conducted by the OIG’s Senior 

Information Technology (IT) Auditor. See page 5 for further information.

Also initiated during this period were two audits, i.e., an audit of FCA’s contracting 

activities and an audit of FCA’s approval process of the FCS Funding Corporation’s 

debt issuances. Both audits remain ongoing. See pages 5-6 for further information.

During the period, the OIG, according to a schedule promulgated by the Council of 

the Inspectors General on Integrity and Efficiency (CIGIE), received a peer review of 

our audit function reflecting a “Pass” from the Commodity Futures Trading 

Commission’s Office of Inspector General (CFTC OIG).

According to the same schedule, our office began a peer review of the audit function 

of the Consumer Product Safety Commission’s Office of Inspector General (CPSC 

OIG).

Additionally, the OIG issued two quarterly reports and one FY summary report to the 

Chief Examiner and FCA Board on results of OIG surveys of System institutions 

regarding the examination function and the examiners. These reports were for the 

quarters ended September 30 and December 31, 2010. The FY summary report 

was for the FY ended September 30, 2010.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

2

The OIG maintains five positions: the Inspector General (IG), a Deputy Inspector 

General (DIG) and Counsel, a Senior Auditor, a Senior IT Auditor, and an 

Administrative Assistant. Appendix G and Appendix H reflect the organizational 

structure of FCA and the OIG, respectively.

BACKGROUND

Farm Credit Administration

The FCA is an independent Federal agency of the United States government 

responsible for the regulation and examination of FCS institutions chartered under 

the Farm Credit Act of 1971, as amended (Farm Credit Act). The FCA is also a 

“designated Federal entity” within the meaning of the Inspector General Act of 1978, 

as amended (IG Act). 

As a non-appropriated agency, FCA funds its expenses primarily through 

assessments to the institutions it regulates. The Agency’s FY 2011 budget is

$54,832,588. Assessments by FCA to FCS institutions for FY 2011 were 

$49,100,000, with other sources of funding totaling $5,732,588. The OIG’s FY 2011

budget is $1,109,149. 

At the end of this reporting period, FCA had 290 employees, about half of which are 

examiners located in five field offices. At the end of the prior semiannual reporting 

period, the Agency had 288 employees. 

Farm Credit System

The FCS is a Government-sponsored enterprise comprised of 5 Farm Credit banks 

and 84 lending associations, as of March 31, 2011, in all 50 states and Puerto Rico 

that primarily make loans to agriculture. The System raises funds by selling 

securities in the national and international money markets through its special 

purpose entity, the Federal Farm Credit Banks Funding Corporation. These 

securities are not guaranteed by the U.S. Government. 

The Federal Agricultural Mortgage Corporation (Farmer Mac), also a part of the 

FCS, is chartered by the Federal government to provide a secondary market for 

agricultural mortgage loans. Farmer Mac is publicly traded and issues its own debt 

securities.

Additionally, there are four active service corporations organized under the Farm 

Credit Act that provide services to FCS entities and eligible borrowers.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

3

MANAGEMENT AND PERFORMANCE CHALLENGES

The following management challenges are from the IG’s November 8, 2010, letter to 

the FCA Board transmitting the reports of the independent outside auditor’s financial 

audit of the Agency’s financial statements for FY 2010. The November 8 letter, 

including management challenges, is in the Agency’s Performance and 

Accountability Report (PAR) for FY 2010. 

Management has made progress on each of these challenges. The challenges will 

be reassessed by the IG in the fall of 2011 for possible comment in the Agency’s FY 

2011 PAR.

Management and Performance Challenges

As part of the Agency’s annual Performance and Accountability Report, the IG is 

required by law to provide a summary statement on the most serious management 

and performance challenges facing the Agency. These challenges fall into two 

general categories. First are the challenges related to FCA’s mandate of ensuring a 

safe, sound, and dependable FCS as a source of credit and related services to 

agriculture and rural America. Some of these challenges may be influenced by 

events that are outside the control of the Agency. Second, but no less important, are 

the challenges related to Agency operations.

Farm Credit System

Safety and Soundness

The System is a lender to a single industry, agriculture, and is therefore vulnerable to 

the economic volatility and risks in that industry. While the FCS remains generally 

safe and sound, recent adversity in several major commodity groups has caused 

deterioration in a number of FCS institutions, although very recently this deterioration 

seems to have stabilized. The Agency’s challenge is to continue to ensure the 

System’s ability to withstand such vulnerabilities in the long term and to remain safe 

and sound. 

Mission

Further, the environment facing agriculture, rural America, and the institutions of the 

FCS is ever-changing, presenting new opportunities and altering historical 

perspectives on System operations. FCA’s challenge is to continue to maintain an 

independent and objective, yet flexible and responsive, regulatory environment for 

the System, geared to continually ensuring that the FCS fulfills its public policy 

purpose. 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

4

Farm Credit Administration

Agricultural Economic Downturn

Several factors have caused deterioration in a number of FCS institutions in recent 

years. This deterioration and the effect these factors have on the ongoing condition 

of the FCS continue to warrant the careful attention of FCA. Some of these factors 

are:

• inadequate oversight and management by institution boards and 

management teams, respectively;

• price volatility in several major commodity groups, such as feed grains;

• volatility in livestock operations as a result of swings in feed prices;

• continued risk concentrations in large shared assets among many FCS 

institutions; and 

• escalated land values that may not be sustainable.

Thus, a challenge for the Agency is to continue to assess in a timely manner 

economic and operational conditions affecting the welfare of System institutions, and 

to take prompt preemptive or remedial actions to ensure their ongoing safety and 

soundness. 

Strategic Planning

In accordance with the Government Performance and Results Act, the FCA Board 

issued in May 2008 a revised six-year strategic plan for FYs 2008–2013. Since that 

issuance, the FCA Board has acquired a new Chairman and two new FCA Board 

Members. The Agency’s Strategic Planning Committee is currently working with the 

FCA Board and senior staff to ensure the issuance by the FCA Board of a revised 

six-year strategic plan covering FYs 2011–2016. The challenge for the Agency is to 

ensure that the current FCA Board’s vision and leadership are incorporated into the 

revised strategic plan and that the plan is issued in a timely manner.

Leveraging Technology

The Agency’s ability to leverage investments in new technologies is a key 

element in management’s efforts to continually improve Agency performance by 

increasing the efficiency and effectiveness of operations. The Agency has an 

active information resource management planning process that identifies, 

reviews, and prioritizes new IT initiatives to improve Agency operations. Over 

the past few years, the Agency made significant investments in new 

technologies and began implementing several tools to improve communication, 

collaboration, and efficiency of operations. FCA’s challenge is to take full 

advantage of the new capabilities the IT infrastructure provides. The successful 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

5

implementation of new technologies will provide FCA staff with the IT tools and 

skills that will enable the Agency to:

• improve the quality and availability of data without creating an undue 

burden on the FCS;

• streamline business processes and build business intelligence to provide 

decision makers with timely management information;

• develop electronic recordkeeping and knowledge management capability 

for capturing, maintaining, and sharing institutional knowledge; and

• protect FCA information systems and data from increasing external and 

internal threats.

AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED

The OIG conducts all audits in accordance with Government Auditing Standards 

issued by the Comptroller General of the United States for audits of Federal 

organizations, programs, activities, and functions. Inspections and evaluations are 

conducted in accordance with the CIGIE Quality Standards for Inspections. Copies 

of most OIG reports are available on the OIG web site 

www.fca.gov/home/inspector.html, or by contacting the OIG at (703) 883-4030, or by 

TTY at (703) 883-4359, or by e-mail at ig_information@fca.gov.

FY 2010 Independent Financial Audit of FCA

The Accountability of Tax Dollars Act of 2002 extended to FCA and certain other 

agencies a requirement to submit to Congress and the Office of Management and 

Budget (OMB) an audited financial statement each fiscal year.

In continuing to assist the Agency in meeting these requirements, the OIG 

contracted with the BPD for Brown & Co. to perform the audit of FCA’s financial 

statements for FY 2010. The audit resulted in an unqualified opinion and was issued 

November 8, 2010.

FY 2010 Federal Information Security Management Act Evaluation

The evaluation of the Agency’s compliance with FISMA for FY 2010 was performed 

by the OIG’s Senior IT Auditor using guidelines established by FISMA, OMB, and 

the National Institute of Standards and Technology. The report revealed no 

significant deficiencies and contained one agreed-upon action, which was closed 

during the period. The report was issued November 15, 2010.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

6

AUDITS, INSPECTIONS, AND EVALUATIONS IN PROGRESS

FCA’s Approval Process of Funding Corporation Debt Issuances

The objective of this audit is to assess whether FCA’s approval process of Funding 

Corporation debt issuances is operating efficiently and effectively and in compliance 

with applicable guidelines.

FCA’s Contracting Activities

The objective of this audit is to determine whether the FCA’s contracting 

environment is efficient and effective in acquiring products and services that provide 

the best value to FCA.

STATUS OF UNIMPLEMENTED RECOMMENDATIONS

At the beginning of the reporting period, there were eleven open action items 

resulting from OIG audits, inspections, or evaluation reports. The FISMA action item 

opened and closed during the period. 

Audit, Inspection, and Evaluation Agreed-Upon Actions and 

Recommendations

Report Issued

Open During 

this 6-Month 

Period

Final 

Management 

Actions During 

this Period

Open on 

04/01/2011

Adherence to the 

Government in the 

Sunshine Act

7/26/2010 1 0 1

Borrower Complaint 

Processing 9/16/2010 10 0 10

Evaluation of the FCA’s 

Compliance with 

FISMA

11/15/2010 1 1 0

Total 12 1 11
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

7

All eleven remained open at the end of the reporting period. The eleven open or 

unimplemented agreed-upon actions are procedural and/or administrative in nature. 

INVESTIGATIONS

No hotline calls were received alleging impropriety that would fall within the purview 

of the OIG.

OIG Hotline calls and e-mails dealing with borrower complaints concerning FCS 

institutions and other FCS issues were referred to the FCA office or other Federal

agency responsible for reviewing such matters. 

No investigations were opened during the reporting period. 

LEGISLATION AND REGULATIONS

In furtherance of the OIG’s mandate to review existing and proposed legislation and 

regulations, the IG or DIG and Counsel attends joint briefings of the FCA Board on 

regulations at the proposed and final stages. The following were reviewed by the 

DIG and Counsel:

Legislation

1) Public Law 111-258, The Reducing Over-Classification Act (H.R. 553),

October 7, 2010

2) Public Law 111-259, The Intelligence Authorization Act, October 7, 2010

3) Public Law 111-352, The GPRA Modernization Act, January 4, 2011

4) Executive Order 13556, Controlled Classified Information, November 4, 2010

5) S. 241, The Non-Federal Whistleblower Protection Act

6) S. 300, The Government Charge Card Abuse Protection Act

7) S. 413, The Cybersecurity and Internet Freedom Act (would amend 

Homeland Security Act of 2002)

8) S. 493, The Small Business Innovation Research and Small Business 

Technology Transfer Reauthorization Act.

9) House Resolution (H.R. 209), The Reducing Information Controls 

Designation Act

10) H.R. 808, The Department of Peace Act
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

8

11) H.R. 428, a bill to establish an Inspector General for the U.S. Senate

12) H.R. 727/S. 348, The Judicial Transparency and Ethics Enhancement Act

13) H.R. 5815, The Inspector General Authority Improvement Act

Proposed Rule

14) Operating and Strategic Business Plan

Advance Notice of Proposed Rulemaking 

15) Disclosure to Shareholders and Investors on FCS Senior Officer 

Compensation

Bookletter

16) Farm Credit System Investment Asset Management

Resolution and Agreement

17) FCA Board Resolution on Cooperative Operating Philosophy

18) FCS Joint and Several Liability Reallocation Agreement 

Informational Memorandum 

19) Guidance on USDA Guaranteed Investments

20) Spring 2011 Abstract of the FCA Unified Agenda of Federal Regulatory and 

Deregulatory Actions

21) Loan Underwriting Standards – Borrower Financial Information

22) Frequently Asked Questions on Borrower Rights

OTHER ACTIVITIES

Quarterly Survey of Farm Credit System Institutions

The OIG administers an ongoing survey of FCS institutions regarding the quality and 

consistency of the Agency’s examination function and examiners. The OIG issues a 

quarterly report and, at the end of each FY, a summary report on the surveys’ results 

to the Chief Examiner and the FCA Board.

During this 6-month period, the OIG sent surveys to the Audit Committee Chairmen 

and Chief Executive Officers of 29 FCS institutions. Quarterly reports for the 3-

month periods ended September 30 and December 31, 2010, were issued by the 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

9

OIG to the Chief Examiner and the FCA Board. A summary FY 2010 report as of 

September 30, 2010, was also issued. 

Staff Participation in Activities Within the Inspector General 

Community

OIG staff members are encouraged to take part in organizations that contribute to 

the mission of the Inspectors General community, as well as their individual 

professional development. Most staff members are actively involved in one or more 

professional organizations, as well as activities within the CIGIE. 

The IG serves as the Vice Chairperson of CIGIE, helps chair the monthly meetings 

of all Inspectors General comprising CIGIE, and participates as a member of the 

CIGIE’s Inspection and Evaluation (I&E) Committee. 

The OIG DIG and Counsel meets monthly with counsels to the other Inspectors 

General. Counsel also attends DIG and Directors of Investigations meetings. 

Counsel also led, on behalf of CIGIE and the Council of Counsels to Inspectors 

General, the development of a course for new Offices of Inspector General attorneys

and participated on a panel to select candidates for the Inspector General of 

Montgomery County, Maryland.

The OIG Senior Auditor and Senior IT Auditor attend Federal Audit Executive 

Committee meetings and conferences. The Senior Auditor participates as a 

member of the I&E Committee’s Roundtable. The Senior IT Auditor also attends 

local ISACA (formerly known as Information Security and Control Association) 

meetings and Federal information security and audit meetings. 

In addition to all administrative duties, the OIG Administrative Assistant handles the 

registration and ongoing interface with the Institute of Internal Auditors for the 

auditors in 20 Offices of Inspector General at designated Federal entities.

Staff Participation in Agency Organizations

OIG employees are active on Agency workgroups and task forces, as appropriate. 

Staff Development

OIG employees continually seek ways to improve skills and become knowledgeable 

in the initiatives of the community of Inspectors General. Audit and legal staff must 

meet continuing education requirements. Individual development plans are used to 

identify long and short-term career goals along with specific training and 

developmental needs. These plans are geared to enhance individual skills in the 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

10

performance of official duties and meet the criteria needed to achieve OIG 

performance goals and objectives.

ANNEX

This annex is provided in accordance with the National Defense Authorization Act for 

FY 2008. 

This referenced statute requires all Inspectors General appointed under the IG Act to 

include an annex to their semiannual reports as follows:

1) listing all contract audit reports issued during the reporting period containing

significant audit findings; 

2) briefly describing the significant audit findings in the report; and 

3) specifying the amounts of costs identified in the report as unsupported, 

questioned, or disallowed. 

Significant audit findings are defined as unsupported, questioned, or disallowed 

costs in excess of $10,000,000, or other findings that the Inspector General 

determines to be significant. It defines contracts as a contract, an order placed 

under a task or delivery order contract, or a subcontract.

No contract audit reports meeting these criteria were issued on behalf of the OIG 

during this reporting period.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

11

APPENDIX A

INDEX OF REPORTING REQUIREMENTS Page

Section 4(a)(2) Review of Legislation and Regulations 7 – 8

Section 5(a)(1) Significant Problems, Abuses, and Deficiencies None

Section 5(a)(2) Recommendations for Corrective Action None

Section 5(a)(3) Prior Recommendations Not Yet Implemented 6

Section 5(a)(4) Matters Referred to Prosecutive Authorities None

Section 5(a)(5) Summary of Instances Where Information Was Unreasonably 

Refused or Not Provided None

Section 5(a)(6) List of OIG Audit/Inspection Reports Issued During the Period 5

Section 5(a)(7) Summary of Significant Reports Issued During the Period 5

Section 5(a)(8) Statistical Table on Management Decisions with Questioned Costs 13

Section 5(a)(9) Statistical Table on Management Decisions on Recommendations that 

Funds be put to Better Use 14

Section 5(a)(10) Summary of Each Audit Over Six Months Old for Which No 

Management Decision Has Been Made None

Section 5(a)(11) Significant Revised Management Decisions None

Section 5(a)(12) Significant Management Decisions with Which the Inspector General 

Disagreed None

Section 5(a)(13) Compliance of Agency Financial Management System 5

FY 2008 NATIONAL DEFENSE AUTHORIZATION ACT CITATION 

AND REQUIREMENT Page

Section 845 Review of Legislation and Regulations 7 - 8
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

12

 

APPENDIX B

Audit, Inspection, and Evaluation Reports Issued

Title of Report

Number of Agreed 

Upon Actions/

Recommendations

Questioned 

Costs

Recommendations 

That Funds Be Put 

to Better Use

Financial Statement Audit for FY 

2010 0 $ 0 $ 0

Federal Information Security 

Management Act for FY 2010 1 $ 0 $ 0

Total 1 $ 0 $ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

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APPENDIX C

Reports with Questioned Costs

Number Dollar Value

Reports Recommendations

Questioned 

Costs

Unsupported 

Costs

A. For which no management decision has 

been made by the commencement of 

the reporting period

B. Which were issued during the reporting 

period

Subtotals (A+B)

C. For which a management decision was 

made during the reporting period

(i) dollar value of disallowed costs

(ii) dollar value of costs not disallowed

D. For which no management decision has 

been made by the end of the reporting 

period

E. For which no management decision was 

made within six months of issuance

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0

$ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

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APPENDIX D

Reports with Recommendations that Funds be Put to Better Use

Number of 

Reports

Number of 

Recommendations Dollar Value

A. For which no management decision has been 

made by the commencement of the reporting 

period

0 0 $ 0

B. Which were issued during the reporting period 0 0 $ 0

Subtotals (A + B) 0 0 $ 0

C. For which a management decision was made 

during the reporting period 0 0 $ 0

(i) dollar value of recommendations that 

were agreed to by management 0 0 $ 0

--based on proposed management action 0 0 $ 0

--based on proposed legislative action 0 0 $ 0

(ii) dollar value of recommendations that 

were not agreed to by management 0 0 $ 0

D. For which no management decision has been 

made by the end of the reporting period 0 0 $ 0

E. For which no management decision was made 

within six months of issuance 0 0 $ 0
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

15

APPENDIX E

PEER REVIEWS CONDUCTED OF THIS OFFICE

In accordance with Section 989C of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act signed by the President on July 21, 2010, which amended the IG Act, the 

following information is provided:

IG Act’s Section 5(a)(14)(A) – An external peer review of this office’s audit function was

conducted during this reporting cycle by the CFTC OIG. It was conducted in October 

2010 and the final peer review report, reflecting a “Pass,” was issued February 4, 2011. 

Federal audit organizations receive either a “Pass,” “Pass with deficiencies,” or a “Fail.” 

The final peer review report is on our office’s web site at

http://www.fca.gov/Download/InspectorGeneral/Peer/2010PeerReviewOIGAuditFunction.pdf

There was one finding issued in a separate letter dated February 4, 2011, that was not 

considered sufficiently significant by the CFTC OIG to have altered its rating of our audit 

function. This finding has been corrected.
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

16

APPENDIX F

PEER REVIEWS CONDUCTED BY THIS OFFICE

In accordance with Section 989C of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act signed by the President on July 21, 2010, which amended the IG Act, the 

following information is provided:

IG Act’s Section 5(a)(16) – This office began a peer review of the audit function of the CPSC

OIG. At this writing, this peer review remained ongoing. 
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

17

APPENDIX G 

FCA Organizational Chart

Board

Farm Credit Administration Board

Leland A. Strom, Chairman

Kenneth A. Spearman, Member

Jill Long Thompson, Member

Office of the Chairman 

and CEO

Leland A. Strom

Office of the Chief 

Operating Officer

William J. Hoffman

Office of 

Inspector General1

Carl A. Clinefelter

Designated Agency 

Ethics Official

Wendy R. Laguarda

Office of 

Congressional and 

Public Affairs

Michael A. Stokke

Office of Secondary 

Market Oversight2

Laurie A. Rea

Office of Examination

S. Robert Coleman

Office of 

Regulatory Policy

Gary K. Van Meter (Acting)

Office of 

General Counsel3

Charles R. Rawls

Office of Management 

Services

Stephen G. Smith

1

The Dodd-Frank Wall Street and Consumer Protection Act, Public Law 111-203, amended the Inspector General Act, 5 U.S.C. App 3, 

changing the meaning of “head of the designated Federal entity.” The effect is that the Inspector General now reports to the FCA Board. 

Prior to the amendment, the FCA Chairman was the “head of the designated Federal entity” under the IG Act and the IG reported to the 

Chairman.

2 Reports to the Board for policy and to the CEO for administration.

3 Maintains a confidential advisory relationship with each of the Board members.

Secretary to the Board

Dale L. Aultman

Equal Employment 

Opportunity Director

B. Jeffrey McGiboney
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

18

APPENDIX H

Office of Inspector General Organizational Chart

Carl C

 December 9, 2010

Carl A. Clinefelter, Inspector General Date

Inspector General

Carl A. Clinefelter

Deputy Inspector 

General and Counsel

Elizabeth M. Dean

Senior Auditor

Veronica G. McCain

Senior IT Auditor

Tammy F. Rapp

Administrative 

Assistant

Debra M. Miller
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

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APPENDIX I

Glossary of Terms

Agency – Farm Credit Administration

BPD – Bureau of the Public Debt

Brown & Co. – Brown & Company CPAs, PLLC

CIGIE – Council of the Inspectors General on Integrity and Efficiency

CFTC OIG – Commodity Futures Trading Commission Office of Inspector General

CPSC OIG – Consumer Product Safety Commission Office of Inspector General

DIG – Deputy Inspector General

Farm Credit Act – Farm Credit Act of 1971, as amended

Farmer Mac – Federal Agricultural Mortgage Corporation

FCA – Farm Credit Administration

FCS – Farm Credit System 

FISMA – Federal Information Security Management Act

FY – Fiscal Year

H.R. – House Resolution

IG – Inspector General

IG Act – Inspector General Act of 1978, as amended

I&E – Inspection and Evaluation

ISACA – Information Security and Control Association

IT – Information Technology 

OE – Office of Examination

OIG – Office of Inspector General

OMB – Office of Management and Budget

PAR – Performance Accountability Report

System – Farm Credit System
OIG SEMIANNUAL REPORT TO THE CONGRESS

OCTOBER 1, 2010 – MARCH 31, 2011

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REPORT

Fraud | Waste | Abuse | Mismanagement

FARM CREDIT ADMINISTRATION

OFFICE OF INSPECTOR GENERAL

• 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