Farm Credit Administration

Office of Inspector General

Semiannual Report to Congress

April 1, 2020 – September 30, 2020
FARM CREDIT ADMINISTRATION

OFFICE OF INSPECTOR GENERAL

SEMIANNUAL REPORT TO CONGRESS

APRIL 1, 2020 – SEPTEMBER 30, 2020
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 i 

MESSAGE FROM THE INSPECTOR 

GENERAL

I am pleased to submit our Semiannual Report to Congress, summarizing the activities 

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

Inspector General (OIG) for April 1, 2020 through September 30, 2020.

While the COVID-19 pandemic continues to impact our everyday lives, the OIG’s 

productivity these last six months remained strong. Teleworking full-time, we have 

remained diligent in our efforts to provide FCA with objective oversight. 

The audit, inspection, and evaluation side of our office was active this reporting period. 

We concluded an inspection of FCA’s response to an independent assessment of 

fairness and inclusiveness that the Agency contracted for in 2017 and initiated several 

ongoing audits. We completed a substantive revision of our internal audit, inspection, 

and evaluation policies that will further enhance the quality of our reports. This period 

also saw the implementation of a new electronic recommendation follow-up process, 

which we expect will benefit Agency officials and OIG personnel alike.

Our investigative function was also busy during the reporting period, completing an

investigation of alleged whistleblower retaliation. We also undertook an overhaul of

our investigative manual, updating our practices to further reflect professional

standards and best practices in the Inspector General (IG) community.

In continuing to make outreach a priority, we held four virtual town hall meetings with

personnel in FCA’s largest office, the Office of Examination. The aim of the meetings

was to demystify our office and elicit discussion about what we do, why we do it, and

how we do our work. These meetings were well-attended and well-received, and we

look forward to continuing and expanding this new outreach initiative.

Our office continued to participate extensively in the IG community during this

reporting period. In June, I stepped into the position of Chair of the Council of the

Inspectors General on Integrity and Efficiency’s Inspection and Evaluation (I&E)

Committee. With IG Mark Greenblatt of the Department of the Interior serving as Vice

Chair and a multitude of dedicated OIG personnel lending their efforts and knowledge 

to the Committee and its working groups, I look forward to continuing the good work

of former Chair Steve Linick to the benefit of I&E work across the IG community.

Finally, I am excited to report that we have welcomed a new member to the OIG team.

Filling a vacant Senior Auditor position, Christopher Coccaro joins our office from the

Department of Defense OIG, where he led a team of inspectors and brings with him a

wealth of experience and knowledge. With our complete team in place, we look forward 

to continuing our oversight work at FCA and engaging with all our stakeholders as we

continue to face global health and other challenges.

Wendy R. Laguarda

Inspector General
ii Farm Credit Administration | Office of Inspector General

ACRONYMS 

&

ABBREVIATIONS

AIGAIE Assistant Inspector General for Audits, Inspections, and 

Evaluations

Blue Book Quality Standards for Inspection and Evaluation

CIGIE Council of the Inspectors General on Integrity and Efficiency

Farmer Mac Federal Agricultural Mortgage Corporation

FCA (or Agency) Farm Credit Administration

FY Fiscal Year

GAO U.S. Government Accountability Office

I&E Inspection and Evaluation

IG Inspector General

IG Act Inspector General Act of 1978, as amended

IPERA Improper Payments Elimination and Recovery Act of 2010

OIG Office of Inspector General

OMB U.S. Office of Management and Budget

Pub. L. Public Law

System Farm Credit System

U.S. United States

U.S.C. United States Code

Yellow Book Government Auditing Standards
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 iii 

ONTENTS

C ABLE OF 

T

Message from the Inspector General ................................................................................................... i

Acronyms & Abbreviations .................................................................................................................... ii

Background .................................................................................................................................................. 1

Strategic Plan .............................................................................................................................................. 3

Performance Measures ............................................................................................................................ 4

Audits, Inspections, and Evaluations .................................................................................................. 7

Investigations ............................................................................................................................................ 11

Other Reports and Reviews ................................................................................................................. 13

Outreach, Collaboration, & Other Initiatives ................................................................................. 14

Appendix I: Peer Reviews ...................................................................................................................... 16

Appendix II: Reports Issued ................................................................................................................. 18

Appendix III: Reports with Questioned Costs ............................................................................... 19

Appendix IV: Reports with Funds For Better Use......................................................................... 20

Appendix V: Open Recommendations ............................................................................................ 21

Index of Reporting Requirements ..................................................................................................... 23
1 Farm Credit Administration | Office of Inspector General

 

BACKGROUND

The Farm Credit System

First established in 1916, the Farm Credit System (System) is a nationwide network of 

borrower-owned cooperative financial institutions and service organizations. A 

government-sponsored enterprise, the System is designed to better the income and 

well-being of farmers, ranchers, and rural America by providing a safe and reliable 

source of credit and related financial services.

As of the end of the reporting period, the System consisted of three farm credit banks, 

one agricultural credit bank, one federal land credit association and 67 agricultural 

credit associations that primarily make loans to agriculture in all 50 states and Puerto 

Rico, as well as six service corporations that provide administrative, technology-related, 

and other support services to certain System entities and eligible borrowers. The System 

raises funds by selling securities in the national and international money markets 

through the Federal Farm Credit Banks Funding Corporation.

The System also includes the Federal Agricultural Mortgage Corporation (Farmer Mac), 

a stockholder-owned, federally chartered instrumentality. Created in 1988, Farmer Mac 

provides a secondary market for agricultural real estate mortgage loans, rural housing 

loans, and rural utility cooperative loans. Farmer Mac is publicly traded and issues its 

own debt securities.

The Farm Credit Administration

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

responsible for ensuring that the System remains a dependable source of credit for 

agriculture and rural America. Authorized by the Farm Credit Act of 1971, as amended,1

FCA ensures the safety and soundness of System institutions by issuing policies and 

regulations, and by regularly examining System institutions to assess compliance with 

applicable laws and regulations. FCA has approximately 300 full- and part-time 

employees distributed across five offices nationwide.

FCA is overseen by a three-person board, members of which are appointed by the 

President, with the advice and consent of the Senate. The Chairman of the Board—who 

is designated by the President and serves in that role until the end of his or her term—

also serves as the Agency’s Chief Executive Officer. At present, the Board has two 

members, Chairman Glen R. Smith and Board Member Jeffery S. Hall.

The Office of Inspector General

Established in January 1989, the Office of Inspector General (OIG) is charged with the 

task of providing independent and objective oversight of FCA programs and 

operations. It carries out this responsibility as authorized by and in accordance with the 

Inspector General Act of 1978, as amended (IG Act),

2 by conducting and supervising 

audits, inspections, evaluations, and investigations; promoting economy and efficiency; 

1 12 U.S.C. § 2001 et seq.

2 5 U.S.C. app.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 2 

preventing and detecting fraud, waste, and abuse; and keeping the FCA Board and 

Congress fully and currently informed about problems and deficiencies related to FCA. 

Located within FCA, the OIG operates independently—outside the direction of Agency 

leadership. While the Inspector General (IG) is appointed by and serves under the 

general supervision of the FCA Board, neither the Board nor any other Agency official 

may prevent or prohibit the IG from carrying out an oversight activity that the IG 

determines to be necessary or appropriate. The IG also exercises discretion in OIG 

employment and contracting decisions, further safeguarding the office’s independent 

status. This independence is necessary to ensure that OIG products meet the highest 

standards of objectivity and credibility.

The OIG is led by Wendy Laguarda, who has served as the IG since August 2017.

Reporting to the IG are the Assistant Inspector General for Audits, Inspections, and 

Evaluations (AIGAIE), the Investigator, and the Counsel to the IG. The AIGAIE supervises 

the audit staff and oversees the audit, inspection, and evaluation functions.

The Council of the Inspectors General on Integrity and Efficiency

The FCA IG also serves as a member of the Council of the Inspectors General on Integrity 

and Efficiency (CIGIE). Composed of the federal Inspectors General and certain other 

federal officials, CIGIE was established to address cross-agency issues of integrity, 

economy, and effectiveness and to improve the professionalism and effectiveness of 

OIG personnel. OIG staff regularly participate on CIGIE committees and initiatives, as 

discussed in this report.
3 Farm Credit Administration | Office of Inspector General

STRATEGIC 

PLAN

In September 2019, the OIG adopted a five-year strategic plan for fiscal years (FYs) 2020 

to 2024. As outlined below, the strategic plan details the vision, mission, values, goals, 

and objectives of the OIG in carrying out its responsibilities under the IG Act. 

Vision

Harvesting Change

Mission

To provide independent oversight to promote economy, efficiency, and effectiveness, 

and prevent and detect fraud, waste, and abuse in Farm Credit Administration programs 

and operations

Values

Objectivity, Integrity, Relevance, and Respect

Goals

1) Promote Economy and Efficiency

2) Prevent and Detect Fraud, Waste, and Abuse

3) Strengthen Internal and External Relationships
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 4 

PERFORMANCE 

MEASURES

The OIG’s strategic plan for FYs 2020 to 2024 sets forth several measures against which 

the OIG assesses its own performance. The following describes some of the OIG’s 

actions during the FY 2020 that were relevant to those performance measures.

Annually develop an oversight agenda based on Agency mission, risk, activities, 

and management.

In September 2020, the OIG published an updated audit, inspection, and evaluation 

plan for FYs 2021 and 2022. 

Complete products in an average time of six months. 

The OIG completed four audit, inspection, and evaluation projects in an average time 

of 185.75 days, slightly over six months (182.5 days).

At least annually, complete a quality assurance review to ensure compliance with 

professional standards and office policies and procedures.

On September 29, 2020, the OIG completed an internal quality assurance review of its 

audit, inspection, and evaluation functions for FY 2020. The OIG also received an 

external peer review of its inspection and evaluation function, which concluded on 

December 17, 2019.

Make recommendations, as necessary, to management and monthly track 

recommendation status until closure.

The OIG made fourteen recommendations during FY 2020. The OIG tracked the status 

of those recommendations on an ongoing basis and reported open recommendations 

to the FCA Board on a monthly basis. 

Comply with mandatory training requirements and maintain professional 

certifications. 

All OIG staff remained on track to meet training requirements and maintain 

certifications as required by OIG policy and relevant professional standards.

Promote diversity and inclusion.

OIG personnel promoted diversity and inclusion through attendance of events and 

programs organized by FCA special emphasis programs.

Evaluate all FCA OIG hotline calls, emails, and other submissions within two 

business days of receipt.

While it is the OIG investigator’s practice to conduct an initial review of all complaints 

at the earliest practicable opportunity, the office lacks sufficient data to confirm that 

complaints received in FY 2020 were evaluated within two business days of receipt in 

all instances. The OIG has revised its policies regarding the documentation of 

complaints to ensure that this data is appropriately captured in the future.

Monthly track the status of allegations and investigations to ensure timely 

actions.

The OIG tracked the status of all allegations received on an ongoing basis, and monthly 

reported their status to the FCA Board as appropriate.
Perform regular reviews to ensure investigations are conducted in accordance 

with quality standards and internal policies and procedures.

The OIG investigations program was subjected to an internal control review, and the IG 

reviewed the disposition of complaints received on an ongoing basis. Additionally, the 

report of investigation issued during FY 2020 was subject to supervisory review to 

ensure adherence to OIG policies and relevant quality standards.

Maintain a hotline from a source independent of the Agency.

Throughout the fiscal year, the OIG maintained a hotline email account procured 

through a commercial provider.

Promote awareness of hotline avenues.

The OIG promoted awareness of the various ways to submit complaints on the OIG’s 

website, on the back cover of OIG reports, during presentations to FCA employees, and 

through the distribution of posters throughout the Agency.

At least twice annually, educate employees on fraud, waste, abuse, 

mismanagement, and whistleblower protections.

The OIG educated FCA employees on these subjects as part of presentations to new 

employees, through virtual town hall meetings, during meetings with new Agency 

supervisors, and in the OIG’s quarterly intra-agency newsletter. 

Timely review and comment upon relevant existing or proposed legislation and 

regulations. 

As discussed later in this report, the OIG commented upon legislation, as appropriate, 

through the CIGIE Legislation Committee.

Quarterly conduct a confidential survey of Farm Credit System institutions on the 

effectiveness of the Agency’s examination program.

With the onset of the COVID-19 pandemic and related adjustments to FCA’s 

examination activities, the OIG decided not to issue surveys after the first quarter of FY 

2020 but notified System institutions that the office remained available to hear their 

concerns about the examination process.

5 Farm Credit Administration | Office of Inspector General

Annually conduct at least four outreach initiatives with employees.

During FY 2020, the OIG conducted outreach to FCA employees through presentations 

to new employees, the issuance of an intra-agency newsletter, the distribution of 

posters, and by holding virtual town halls.

Issue the OIG Semiannual Report to Congress within 30 days of the end of each 

reporting period.

During FY 2020, the OIG transmitted its Semiannual Reports to Congress to the FCA 

Board on April 28, 2020 and October 31, 2019, respectively. Accordingly, the latter 

report was issued 31 days after the end of the reporting period, though within the 

deadline imposed by the IG Act.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 6 

At least annually, brief Congressional oversight committees on OIG activities.

The OIG provided virtual briefings to majority and minority staff of the House and 

Senate agricultural oversight committees during the fiscal year.

Post all audit, inspection, and evaluation reports within three business days of 

issuance to the FCA Board.

All final audit, inspection, and evaluation reports issued during FY 2020 were posted to 

the OIG’s website and to Oversight.gov within three business days of issuance to the 

FCA Board.

At least quarterly, brief FCA Board members on OIG activities.

The IG and Counsel provided in-person or virtual briefings to each FCA Board member 

on a quarterly basis.

Regularly participate in CIGIE committees, work groups, or initiatives.

As discussed in greater detail later in this report, OIG personnel participated extensively 

in CIGIE committees and work groups throughout FY 2020.
7 Farm Credit Administration | Office of Inspector General

AUDITS

, INSPECTIONS

, AND

EVALUATIONS

The OIG regularly completes audits, inspections, and evaluations of FCA programs and 

operations. In so doing, OIG personnel seek to provide timely, credible, and relevant 

information to Agency leadership, Congress, other stakeholders, and the general public. 

FCA OIG audits are performed in accordance with the Government Auditing Standards

(Yellow Book) issued by the U.S. Government Accountability Office (GAO), while 

inspections and evaluations adhere to the CIGIE Quality Standards for Inspection and 

Evaluation (Blue Book). 

In planning its audits, inspections, and evaluations, the OIG employs a risk-based 

approach that accounts for prior oversight work, the control environment, input from 

the FCA Board and senior management, and statutory requirements. For more 

information, and to learn about future OIG work, please see the audit, inspection, and 

evaluation plan for FYs 2021 and 2022. 

Reports issued may be found on the OIG website within three business days of issuance 

to the FCA Board. To receive a notification when a new report is published, please 

subscribe to the OIG mailing list. Reports are also posted on Oversight.gov, a 

consolidated repository for the oversight work of federal inspectors general. 

Oversight.gov allows users to sort, search, and filter the site’s database to find reports 

of interest. Users can receive notifications when new reports are added to Oversight.gov 

by following CIGIE’s Twitter account, @OversightGov. 

Summaries of Reports Issued 

The OIG issued one report and made five recommendations for corrective action during 

the reporting period. The report is summarized below.

FCA’s Implementation Efforts for the 

2017-2018 Fairness and Inclusiveness Assessment

I-20-01

As the OIG has consistently recognized in its annual management challenges report, 

FCA’s employees are the Agency’s most valuable resource. Diversity and inclusion are 

important aspects of achieving an environment in which FCA employees can reach their 

full potential and best fulfill the Agency’s mission. This principle is recognized and 

reflected in FCA Board policy and the Agency’s strategic plan. FCA’s Office of Equal 

Employment Opportunity and Inclusion manages and directs the Agency’s diversity, 

inclusion, and equal employment opportunity program.

In July 2017, FCA engaged a contractor to identify strengths and challenges in FCA’s 

diversity and inclusion efforts. To develop its assessment, the contractor surveyed 

employees, reviewed documents and data, interviewed leadership and external 

stakeholders, and conducted focus groups. The contractor’s report noted FCA’s 

commitment to diversity and inclusion and included 15 recommendations and 50

actions that FCA could take to enhance diversity and inclusion efforts at the Agency. 

The objective of this inspection was to analyze FCA’s implementation of diversity and 

inclusion efforts, with a scope limited specifically to the contractor’s assessment. The 

OIG found that, while FCA took certain preliminary steps to assess and implement 
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 8 

recommendations in the contractor’s report, the Agency had not established specific 

plans, milestones, and accountabilities to address the report’s recommendations. An 

Agency working group was formed to discuss the contractor’s recommendations, but 

there was no comprehensive plan for addressing the recommendations. 

The Agency took a positive step during the inspection and began developing a tracking

site to document the Agency’s implementation of recommendations from the 

assessment. However, the OIG noted that certain elements were missing from the site, 

including planned action steps, responsible personnel, and target completion dates.

The OIG identified several factors that contributed to implementation challenges. A 

working group was not established until almost a year after the assessment was 

completed, and there were no additional meetings or follow-ups to discuss and 

document implementation efforts. There was also a lack of centralized accountability

to oversee recommendations in the assessment, which involved multiple Agency offices 

and officials. Finally, the Agency experienced changes in several key leadership 

positions after the assessment report was issued, including the FCA Board Chairman, 

Chief Operating Officer, and Chief Examiner positions. 

The inspection also found that the Agency did not follow its internal procedures when 

procuring the services of the contractor and that the contract file was missing necessary 

information. Specifically, the OIG found that contractor requirements were established 

after the contractor was selected; vendor evaluation forms were not completed until 

after the contractor was selected; no request for quotes was issued; decisions were not 

fully supported by documentation in the contract file; and the contract file was missing 

a vendor proposal and other documentation. Agency personnel noted that the award 

did not follow the Agency’s normal competitive process because there was an urgency 

to complete the award. Not following the Agency’s process and documenting 

conclusions can bring award decisions into question and raise concerns about vendor 

selection.

The OIG made five recommendations for corrective action, all of which were agreed to 

by FCA.

The inspection report was issued to the FCA Board on July 29, 2020. 

Recommendations Made During the Reporting Period

Table 1 shows all recommendations for corrective action made during the reporting 

period.

Table 1

Report Recommendation

FCA’s Implementation 

Efforts for the 2017-2018

Fairness and

Inclusiveness Assessment

1 We recommend the Office of Equal Employment

Opportunity and Inclusion document actions,

milestones and accountabilities to address 

recommendations in the fairness and inclusiveness

assessment, including justifications for tabling or

not implementing recommendations and actions.
Report Recommendation

FCA’s Implementation 

Efforts for the 2017-2018 

Fairness and 

Inclusiveness Assessment

(continued) 

2 We recommend the Office of Equal Employment 

Opportunity and Inclusion document a monitoring 

plan for updating information in the tracking site 

through completion or closure of each 

recommendation and associated action.

3 We recommend the Office of Equal Employment 

Opportunity and Inclusion update all employees on 

the status and current priorities of actions to address 

recommendations in the assessment.

4 We recommend the Office of Equal Employment 

Opportunity and Inclusion brief current FCA 

leadership on the assessment results, 

implementation progress, priorities, and monitoring 

plan.

5 We recommend the Office of Equal Employment 

Opportunity and Inclusion, in coordination with the 

contracting staff, review the contract file for the 

fairness and inclusiveness assessment and add all 

available documentation necessary to fully support 

award decisions and conclusions reached by the 

evaluation team.

9 Farm Credit Administration | Office of Inspector General

In Progress

Below are the audits, inspections, and evaluations in progress at the end of the 

reporting period.

Audit of the Farm Credit Administration’s Financial Statements

Fiscal Year 2020

The Accountability of Tax Dollars Act of 2002 requires that FCA annually submit to 

Congress and the U.S. Office of Management and Budget (OMB) audited financial 

statements. The OIG has contracted with an independent public accounting firm to 

perform the audit of FCA’s financial statements for FY 2020. The OIG is monitoring the 

work of the firm. 

Audit of the Farm Credit Administration’s Compliance with the 

Federal Information Security Modernization Act

Fiscal Year 2020

The Federal Information Security Modernization Act of 2014 requires that the OIG 

annually evaluate FCA’s information security program and practices to determine their 

effectiveness. The OIG has contracted with an independent public accounting firm to 

conduct this review for FY 2020. In accordance with guidance issued by OMB and the 

U.S. Department of Homeland Security, the firm is assessing FCA’s performance with 

respect to risk management, configuration management, identity and access 
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 10

management, data protection and privacy, security training, information security 

continuous monitoring, incident response, and contingency planning. The OIG is 

monitoring the work of the firm.

Audit of the Farm Credit Administration’s Process for Separating Employees

Each year, the Agency loses employees to separations for a variety of reasons, including

retirements, transfers, and resignations. Understanding the data relating to separating 

employees can provide management with useful insight on patterns and trends. It is 

also important for the process to be efficient and effective to ensure a consistent 

approach for separating employees. The objective of this audit is to determine whether 

FCA has an efficient and effective process for separating employees from the Agency. 
11 Farm Credit Administration | Office of Inspector General

 

INVESTIGATIONS

The OIG has broad discretion to carry out investigations related to FCA programs and 

operations that the IG determines to be necessary or appropriate. The range of matters 

falling within the OIG’s investigative purview is expansive, encompassing potential 

violations of law, rules, or regulations; mismanagement; abuses of authority; and more. 

Investigative activities may be initiated upon allegations or referrals received from a 

variety of sources, including, but not limited to, FCA employees or contractors, 

congressional committees, other agencies, System institutions, or members of the 

public. The OIG may also investigate potential fraud, waste, abuse, and mismanagement

identified through other OIG reviews. 

In exercising its investigative authorities, the OIG works to develop products that are 

timely, clear, and credible, and to guard the identities of those who provide information 

to the OIG. All investigations are carried out in accordance with the CIGIE Quality 

Standards for Investigations. 

Table 2 summarizes major investigative activity during the reporting period.

Metric Number

Investigative reports issued3 1

Persons referred to the U.S. Department of Justice for criminal

prosecution

0

Persons referred to state and local prosecuting authorities for criminal

prosecution

0

Indictments and criminal informations that resulted from any prior 

referral to prosecuting authorities

0

Table 2

Complaint Activity

Table 3 

Action Taken Number

Investigation opened 0

Closed after review without further investigative action 2

Referred within FCA 6

Closed as outside of FCA OIG jurisdiction 5

Under review at the end of the reporting period 0

Total 13

The OIG maintains a hotline that allows FCA employees and others to confidentially 

report potential fraud, waste, abuse, or mismanagement via telephone, email, or fax. 

The office also accepts complaints by mail and in-person.4

 Table 3 shows the OIG’s

response to complaints received during the reporting period. 

3 This metric does not include memoranda memorializing the closure or referral of complaints.

4 The OIG has temporarily limited the available methods to make complaints to telephone and 

email due to the COVID-19 pandemic.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 12

Summaries of Investigations

The following are summaries of investigations concluded during the reporting period.

Closing memoranda for investigations are also available on the OIG’s online reports 

page. 

Investigation #20-01

In February 2020, the OIG received a complaint alleging, among other things, that a 

senior government employee engaged in whistleblower retaliation. The OIG completed 

its investigation on May 8, 2020, having determined by a preponderance of the 

evidence that the allegation of whistleblower retaliation could not be substantiated.
13 Farm Credit Administration | Office of Inspector General

OTHER 

REPORTS AND 

REVIEWS

The OIG also conducts reviews that do not fit the description of an audit, inspection, 

evaluation, or investigation. These projects are typically undertaken in accordance with

a statutory requirement, for quality assurance purposes, or to otherwise provide 

comprehensive oversight of FCA programs and operations. Below are summaries of 

such reviews that were completed during the reporting period.

Farm Credit Administration’s Compliance with 

Improper Payment Reporting Requirements for Fiscal Year 2019

Under the Improper Payments Information Act of 2002, as amended by the Improper 

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

Elimination and Recovery Improvement Act of 2012, agencies were required to 

periodically review their programs and activities to identify and report on those 

susceptible to significant improper payments. IPERA mandated that each OIG annually 

review its respective agency’s improper payments reporting to determine whether it 

adhered to IPERA requirements.

The OIG’s review found FCA’s improper payments reporting to be compliant with IPERA. 

Specifically, FCA conducted statutorily required risk assessments in FY 2017, 

determining all programs and activities to be low risk and not susceptible to significant 

improper payments. Accordingly, the only pertinent reporting requirement applicable 

to the Agency in FY 2019 was to publish a Performance and Accountability Report, 

which it did.

On May 15, 2020, the OIG transmitted its findings to the FCA Board and appropriate 

oversight bodies in accordance with IPERA and implementing OMB guidance.

2020 Quality Assurance Review of the 

Audit, Inspection, and Evaluation Functions

In accordance with OIG policy, the OIG annually conducts an internal quality assurance 

review of its audit, inspection, and evaluation functions to determine whether OIG 

procedures were established, implemented, and operating effectively. This review 

determined that internal policies and procedures were effective and followed for 

reviews completed during FY 2020 and included nine recommendations for 

improvement.

Internal Control Review for the Farm Credit Administration 

Office of Inspector General Investigative Function

In accordance with FCA policy, the OIG conducted an internal control review of the 

OIG’s investigation function. The review focused on policies and procedures, internal 

controls, and testing of controls over the investigations program. The review did not 

identify significant deficiencies or material weaknesses but noted several opportunities 

to improve the OIG’s investigative function and strengthen controls.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 14

OUTREACH

,

COLLABORATION

,

&

OTHER INITIATIVES

FCA Employees

The cooperation of FCA employees is essential to all aspects of OIG oversight. 

Accordingly, the OIG has several ongoing initiatives geared toward educating FCA 

employees on the OIG’s mission and authorities. These include a quarterly intra-agency 

newsletter, the dIG, which spotlights the office’s functions and provides recent 

examples of OIG oversight products governmentwide. The OIG also participates in 

orientation trainings for new FCA employees and distributes posters to promote 

awareness of the OIG hotline. 

In July, the OIG held the first of four virtual town hall meetings for personnel in the 

Agency’s Office of Examination. Designed to demystify the OIG, these meetings 

afforded OIG staff an opportunity to reintroduce themselves to Agency personnel who 

do not regularly interact with the office. Based on the positive reception to this new 

initiative, the OIG plans to hold similar meetings in the near future. 

Congress

In the interest of fulfilling its responsibility to keep Congress fully and currently 

informed about problems and deficiencies relating to FCA programs and operations, 

the OIG endeavors to respond expeditiously to all congressional requests and to 

periodically brief oversight committees on recent OIG activity. During the reporting 

period, the IG provided briefings on OIG activities to majority and minority staff from 

both the Senate Committee on Agriculture, Nutrition, and Forestry and the House 

Committee on Agriculture.

IG Community

The OIG is an active member of the IG community, with staff lending their efforts and 

expertise to the work of various CIGIE committees and initiatives.

In June, IG Laguarda became Chair of the CIGIE Inspection and Evaluation (I&E) 

Committee. One of CIGIE’s standing committees, the I&E Committee maintains 

professional standards for inspections and evaluations, heads the development of 

protocols for reviewing cross-agency management issues, and oversees the I&E peer 

review process. Through this committee, the AIGAIE continued to co-lead the working 

group tasked with revising the CIGIE Blue Book and assumed leadership of the I&E 

Roundtable.

The IG also served on the CIGIE Legislation Committee, which fosters relationships with 

Congress, represents the IG community’s interests on legislative initiatives, and keeps 

OIGs apprised of pertinent legislative developments.

In addition to their involvement in the Legislation and I&E Committees, OIG staff 

participated in the CIGIE Audit Committee, the Small and Unique IG working group, the 

Council of Counsels to the Inspectors General, the Assistant Inspectors General for 

Investigations Subcommittee, and the Whistleblower Protection Coordinators working 

group. 
15 Farm Credit Administration | Office of Inspector General

Reviews of Proposed Legislation and Regulations

Pursuant to the IG Act, the OIG reviews existing and proposed legislation and 

regulations relating to FCA programs and operations. When appropriate, the OIG 

makes recommendations regarding the impact of such legislation or regulations on 

economy or efficiency or the prevention and detection of fraud, waste, and abuse.

During the reporting period, the OIG reviewed several bills and proposed regulations

related to FCA or IG authorities, including the Securing Inspector General Independence 

Act, and several modified system of records notices published by FCA. The OIG 

provided comments on proposed legislation through the CIGIE Legislation Committee.

Internal Operations

The OIG is in constant pursuit of ways to improve its own operations. During the 

reporting period, the OIG completed substantial reviews of its policies and procedures 

for its investigations and audit, inspection, and evaluation functions. With continuous 

improvement, updates made to the OIG’s policies ensure that future oversight products 

continue to be of the utmost quality and professionalism.

In June 2020, OIG received final approval from the Archivist of the United States for a 

revised OIG records retention schedule. The product of coordination between the OIG, 

FCA’s records officer, and the National Archives and Records Administration, this 

revised schedule will allow the OIG to improve upon its records management practices.

The reporting period also saw the continued implementation of the OIG’s internal 

enterprise risk management program, which was first established in March 2020. In 

accordance with its policy, the OIG revised its risk profile to reflect events of FY 2020, 

including the COVID-19 pandemic, to ensure its continued relevance and effectiveness.

The OIG also communicated the revisions, the program’s relationship to the goals of 

the office, and the importance of the program to all OIG staff.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 16

APPENDIX I:

PEER 

REVIEWS

To ensure adherence to relevant professional standards, each OIG is subject to periodic 

external peer reviews. Information on peer reviews conducted by and of the FCA OIG is 

provided below.

Reports of external peer reviews of FCA OIG operations may be found on the OIG

website. Reports of peer reviews conducted by the FCA OIG may be located on the 

websites of the reviewed OIGs. 

Audit

The GAO Yellow Book requires any organization conducting audits in accordance with 

the standards therein to undergo an external peer review at least once every three 

years. These peer reviews may conclude in a rating of pass, pass with deficiencies, or fail. 

A rating of pass signifies that the audit organization’s system of quality control has been 

suitably designed and complied with to provide the organization with reasonable 

assurance of performing and reporting in conformity with applicable professional 

standards and legal and regulatory requirements in all material respects.

The FCA OIG’s audit function was not subject to peer review during the reporting 

period. The most recent peer review was completed by the National Endowment for 

the Humanities OIG on September 13, 2019. The FCA OIG received a rating of pass and 

the final report made no recommendations for corrective action.

The FCA OIG did not conduct any audit peer reviews during the reporting period.

Inspection and Evaluation

Under guidance initially adopted by CIGIE in January 2017, each OIG performing 

inspections or evaluations in accordance with the CIGIE Blue Book is required to 

undergo an external peer review every three years. During the first three-year cycle, 

peer review reports will not include an overall rating (such as pass, fail, compliant, or 

non-compliant), but will include a conclusion as to whether the reviewed OIG adhered 

to specific CIGIE standards and the OIG’s internal policies and procedures for inspection 

and evaluation work. 

The FCA OIG’s inspection and evaluation function was not subject to peer review during 

the reporting period. The most recent peer review was completed by a team composed 

of personnel from the U.S. Equal Employment Opportunity Commission and U.S. 

Department of the Treasury OIGs on December 17, 2019. The final report concluded 

that FCA OIG inspection and evaluation policies met all Blue Book standards addressed

and found that the OIG reports reviewed adhered to Blue Book standards and the OIG’s 

internal policies and procedures. The report made no recommendations for corrective 

action. 

The FCA OIG did not conduct any inspection and evaluation peer reviews during the 

reporting period.
17 Farm Credit Administration | Office of Inspector General

Investigation

CIGIE’s Qualitative Assessment Review Guidelines for Investigative Operations of Federal 

Offices of Inspector General establish an independent external evaluation process for 

investigative operations. The objective of an investigative peer review is to determine 

whether internal control systems are in place and operating effectively to provide 

reasonable assurance that an OIG’s investigative operations comply with CIGIE’s Quality 

Standards for Investigations. Reviewed OIGs are assessed a rating of compliant or 

non-compliant. While the guidelines do not mandate that OIGs without statutory 

law enforcement authority—like the FCA OIG—undergo investigative peer reviews, 

they encourage voluntary participation. 

The FCA OIG did not undergo an investigative peer review during the reporting period. 

The OIG has volunteered to receive a peer review of its investigation function within 

the next few years. The most recent peer review of the FCA OIG’s investigative program 

was performed by the Securities and Exchange Commission OIG for the one-year period 

ending September 30, 2007.

The FCA OIG did not conduct any investigative peer reviews during the reporting

period.

Outstanding Recommendations 

There are no outstanding recommendations from any peer review conducted by

another OIG that have not been fully implemented.

There are no recommendations from any peer review conducted by the FCA OIG that

remain outstanding or that have not been fully implemented.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 18

APPENDIX II:

REPORTS ISSUED

Table 4 lists all audit, inspection, and evaluation reports issued during the reporting 

period. For each report, Table 4 lists the dollar value of questioned costs (including the 

dollar value of unsupported costs) and the dollar value of recommendations that funds 

be put to better use. 

Table 4 

Report Title

Dollar Value of

Questioned Costs

Dollar Value of

Recommendations

that Funds be Put

to Better Use Total Unsupported

FCA’s Implementation 

Efforts for the 2017-2018 

Fairness and Inclusiveness 

Assessment 

$0 $0 $0

Total $0 $0 $0
19 Farm Credit Administration | Office of Inspector General

APPENDIX III:

REPORTS WITH 

QUESTIONED 

COSTS

Table 5 shows the number of audit, inspection, and evaluation reports issued with 

questioned costs, and the total dollar value of questioned costs associated with those 

reports.

Table 5 

Requirement # Questioned 

Costs

Unsupported 

Costs

(A) Reports for which no management

decision had been made by the

commencement of the reporting period

(B) Reports issued during the reporting

period

Subtotal (A+B)

(C) Reports for which a management

decision was made during the reporting

period, including—

(i) the dollar value of recommendations

that were agreed to by management

(ii) the dollar value of recommendations

that were not agreed to by

management

(D) Reports for which no management

decision has been made by the end of

the reporting period

0

0

0

0

0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 20

APPENDIX IV:

REPORTS WITH 

FUNDS 

FOR 

BETTER 

USE

Table 6 shows the number of audit, inspection, and evaluation reports issued with 

recommendations that funds be put to better use.

Table 6 

Requirement # Unsupported 

Costs

(A) Reports for which no management decision had

been made by the commencement of the reporting

period

(B) Reports issued during the reporting period

Subtotal (A+B)

(C) Reports for which a management decision was

made during the reporting period, including—

(i) the dollar value of recommendations that were

agreed to by management

(ii) the dollar value of recommendations that were not

agreed to by management

(D) Reports for which no management decision has

been made by the end of the reporting period

0

0

0

0

0

$0

$0

$0

$0

$0

$0

$0
21 Farm Credit Administration | Office of Inspector General

Table 7 

Table 8 

APPENDIX V:

OPEN 

RECOMMENDATIONS

Table 7 includes summary information regarding audit, inspection, and evaluation 

reports issued before April 1, 2020 for which there are outstanding unimplemented 

recommendations, including the aggregate potential cost savings of those 

recommendations. There were no reports issued before the commencement of the 

reporting period for which no management decision had been made by the end of the 

reporting period or for which no comment was returned within 60 days.

Report

Outstanding 

Unimplemented 

Recommendations

Aggregate 

Potential Cost 

Savings

FCA’s Criminal Referral Process

(September 19, 2019)

3 $0

FCA’s Stress Testing Guidance, and Use 

of Data and Analytical and Examination 

Tools

(September 19, 2019)

1 $0

OIG 2018 Evaluation of the Farm Credit 

Administration’s Compliance with the 

Federal Information Security 

Modernization Act

(October 31, 2018)

3 $0

Total: 7 $0

Table 8 identifies recommendations made during previous reporting periods for which 

corrective action had not been completed as of September 30, 2020. An up-to-date list 

of open OIG recommendations may be found at Oversight.gov/recommendations. 

Report Recommendation

FCA’s Criminal Referral 

Process

4 We recommend the Office of Information 

Technology, in conjunction with other Agency 

offices, reduce storage and visibility of Personally 

Identifiable Information in criminal referrals.

5 We recommend the Office of Examination, in 

conjunction with other applicable offices, analyze 

whether additional resources are needed to 

educate System institutions on criminal activity in 

the System, trends, and other valuable information.

7 We recommend the Office of Examination, in 

conjunction with the Office of Data Analytics and 

Economics and other applicable offices, develop 

criminal referral statistics.
Semiannual Report to Congress | April 1, 2020 – September 30, 2020 22

Report Recommendation

FCA’s Stress Testing 

Guidance, and Use of 

Data and Analytical and 

Examination Tools

1 The Office of the Chief Operating Officer needs to 

develop a project plan with milestones to ensure 

the timely completion of the following tasks related 

to stress testing:

• Identify the direction of the FCA with

respect to stress testing;

• Finalize guidance related to model risk

management and stress testing

expectations;

• Ensure examiners are provided with training

on above guidance;

• Update examination manual to reflect

content included in above guidance; and

• Ensure adequate staff expertise in stress

testing.

OIG 2018 Evaluation of 

the Farm Credit 

Administration’s 

Compliance with the 

Federal Information 

Security Modernization 

Act 

3 The Office of Information Technology needs to 

develop and communicate policies and procedures 

that identify the inventory of personally identifiable 

information and other sensitive data collected, used, 

and maintained that require increased protection.

4 The Office of Information Technology needs to 

formalize policies and procedures for:

• Encryption of data at rest

• Encryption of data in transit

• Limitation of transfer to removable media

• Sanitization of digital media prior to disposal

or reuse.

5 The Office of Information Technology needs to 

develop policies and procedures related to 

preventing data exfiltration.
23 Farm Credit Administration | Office of Inspector General

INDEX OF 

REPORTING 

REQUIREMENTS

The following is an index to IG Act reporting requirements.

Section Description Page

4(a)(2) Review of legislation and regulations 15

5(a)(1) Significant problems, abuses, and deficiencies 7-8

5(a)(2) Recommendations for corrective action 8-9

5(a)(3) Recommendations described in previous semiannual

reports for which corrective action has not been completed

21-22

5(a)(4) Matters referred to prosecutive authorities 11

5(a)(5) Reports of information or assistance unreasonably refused

or not provided

None

5(a)(6) Audit, inspection, and evaluation reports issued 16

5(a)(7) Summaries of significant reports 7-8

5(a)(8) Management decisions with respect to questioned costs 19

5(a)(9) Management decisions on recommendations that funds be 

put to better use

20

5(a)(10) Reports issued before the reporting period for which no

management decision has been made, for which no

comment was returned, and for which there are 

outstanding unimplemented recommendations

21

5(a)(11) Significant revised management decisions None

5(a)(12) Significant management decisions with which the IG 

disagrees

None

5(a)(13) Information described under section 804(b) of the Federal

Financial Management Improvement Act of 1996

None

5(a)(14)-(15) Peer reviews conducted by another OIG 16-17

5(a)(16) Peer reviews conducted by the FCA OIG 16-17

5(a)(17) Statistical tables for investigations and referrals 9

5(a)(18) Metrics for developing investigative statistics 9

5(a)(19) Investigations involving a senior government employee 

where allegations of misconduct were substantiated

None

5(a)(20) Instances of whistleblower retaliation None

5(a)(21) Attempts to interfere with OIG independence None

5(a)(22)(A) Closed audits, inspections, and evaluations not disclosed to

the public

None

5(a)(22)(B) Closed investigations involving a senior government

employee not disclosed to the public

None

There were no contract audit reports issued during the reporting period that would be 

reportable under section 845 of the National Defense Authorization Act of 2008.5

5 Pub. L. 110-181 (Jan. 28, 2008).

REPORT FRAUD, WASTE, ABUSE, &

MISMANAGEMENT:

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

(703) 883-4316

Fax: (703) 883-4059

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.