OFFICE OF 

INSPECTOR GENERAL 

Farm Credit AdministraƟon’s 

Process in Developing and 

UpdaƟng Policies and Procedures 

I‐16‐01 

InspecƟon Report 

Inspector 

Ava Bell 

Issued March 31, 2016 

FARM CREDIT ADMINISTRATION 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm Credit Administration	 Office of Inspector General 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

March 31, 2016 

The Honorable Kenneth A. Spearman, Board Chairman 

The Honorable Dallas P. Tonsager, Board Member 

The Honorable Jeffery S. Hall, Board Member 

Farm Credit Administration 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

Dear Board Chairman Spearman and FCA Board Members Tonsager and Hall: 

The Office of Inspector General (OIG) completed an inspection of the Farm Credit Administration’s (FCA 

or Agency) Process in Developing and Updating Agency Policies and Procedures (PPMs). The objective of 

this inspection was to determine the effectiveness and efficiency of FCA’s process in developing and 

updating PPMs. 

We found the Agency is generally consistent in preparing and formatting new PPMs and routing for 

approvals. The Agency also consistently posts and communicates new and modified PPMs. 

We identified opportunities to improve the PPM processes. The Agency agreed to the following actions: 

1.		 Publish procedures for developing, updating, formatting, approving and communicating PPMs. 

2.		 Periodically review PPMs to certify whether policies and procedures are current, need updating, 

or should be rescinded. 

3.		 Consider automating the review and approvals process. 

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, 

Elizabeth M. Dean
	

Inspector General
	

Enclosure 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESULTS: 

The Agency uses a consistent 

process for developing new 

or updating existing policies 

and procedures (PPMs). The 

Agency also generally 

communicates new and 

updated information about 

PPMs to its employees. 

We identified opportunities 

for improvement in the 

following areas: 

•	 The processes for 

developing and updating 

policies and procedures 

are not formalized in a 

written document. Such 

a document might 

include: responsibilities 

associated with 

developing and updating 

PPMs; oversight of the 

PPM library; methods for 

approvals; and guidance 

on content. 

•	 Many PPMs have older 

publication dates and 

contain outdated 

information about 

Agency policies and 

programs. 

•	 The process to 

determine when a new, 

updated or rescinded 

PPM should be 

communicated to 

employees is not 

documented. 

Inspection of Farm Credit Administration’s
	

Process in Developing and Updating
	

Agency Policies and Procedures
	

The Farm Credit Administration (FCA or Agency) maintains an online library 

of Agency policies and procedures (PPMs). The PPM library serves as a 

central repository for PPMs and is a valued resource to FCA employees for 

information on Agency programs. 

The inspection objective was to determine the effectiveness and efficiency of 

FCA’s process in developing and updating Agency policies and procedures. 

We found the Agency is generally consistent in the following processes: 

•	 Preparing and formatting new PPMs; 

•	 Routing PPMs for approvals; 

•	 Posting new PPMs or modifications; and 

•	 Communicating PPM information to employees. 

We identified opportunities to improve the PPM processes and the Agency 

agreed to take the following actions. 

1.		 Publish procedures for developing, updating, formatting, approving 

and communicating PPMs. 

2.		 Periodically review PPMs to certify whether policies and procedures 

are current, need updating, or should be rescinded. 

3.		 Consider automating the review and approvals process. 

The Agency agreed to complete specific tasks to improve the PPM process. 

These tasks include creating a PPM to document the PPM process, and 

documenting how and when PPMs are reviewed. The Agency stated it will 

also consider automating the review and approvals process. 
 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS 

BACKGROUND _______________________________________________________ 1
 

Prior Review ______________________________________________________________________ 1
	

INSPECTION RESULTS ________________________________________________ 2
 

Developing or Updating a PPM ________________________________________________________ 2
	

Basic PPM Process________________________________________________________________ 2
	

Routing and Approvals ____________________________________________________________ 2
	

Routing Process__________________________________________________________________ 3
	

SharePoint Access ________________________________________________________________ 3
	

PPM Template Elements ___________________________________________________________ 3
	

Outdated Policies and Procedures _____________________________________________________ 4
	

Communication ____________________________________________________________________ 6
	

Agreed-Upon Actions _______________________________________________________________ 6
	

OBJECTIVE, SCOPE, AND METHODOLOGY _______________________________ 7
 

ACRONYMS _________________________________________________________ 8
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BACKGROUND 

1 

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

regulating, examining, and supervising the Farm Credit System and the Federal Agricultural Mortgage 

Corporation. The core mission of the Agency is to ensure a safe, sound, and dependable source of credit 

and related services for agriculture and rural America. 

FCA maintains a library of Agency policies and procedures (PPMs) to ensure processes are documented 

and communicated to employees. The online library of PPMs is housed in the Policies and Procedures 

site in SharePoint. All FCA employees have read-only access to the library. 

Since 2012, when the PPMs were moved to SharePoint, a former document providing guidance to all 

staff on the responsibilities for use and oversight of the PPMs, was not transferred to the SharePoint 

library. 

The Standards for Internal Control in the Federal Government, also known as the “Green Book,” state 

that management should implement control activities through policies and the following attributes1 

contribute to the effective design, implementation, and operation of internal controls: 

• Documentation of responsibilities through policies, 

• Periodic review of control activities, and 

• Communication throughout the entity with appropriate methods of communication. 

Prior Review 

Although not exactly on point, the Office of Inspector General conducted an inspection of the FCA Board 

Policy Statements (I-03-05) to determine if they were consistent with sound business practices in terms 

of relevancy, timeliness, coverage, and key elements. The inspection found the Agency did not have an 

established methodology for developing Policy Statements and there was inconsistency in subjects 

covered and level of detail provided. Additionally, several statements were outdated and documented 

practices and operations no longer in existence, or missing key elements for sound policy. The 

inspection resulted in three recommendations, with all action items closed in 2005. The 

recommendations related to: 1) establishing a methodology for the policies, including distinguishing 

between FCA operations policy and philosophy statements as guidance for the Farm Credit System; 2) 

regular review of the policies and updating when appropriate; and 3) a content review of the policies to 

ensure oversight of critical FCA operations. 

1 Based on Principle 12, Implement Control Activities, and Principle 14, Communicate Internally, Standards for Internal Control 

in the Federal Government (Green Book). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INSPECTION RESULTS 

2 

The objective of this inspection was to determine the effectiveness and efficiency of FCA’s process in 

developing and updating Agency policies and procedures. The Agency is generally consistent in its 

process for initiating a new PPM or updating an existing PPM. However, this process is not formally 

documented in a format that is readily accessible and communicated to FCA staff. We identified 

opportunities to improve the PPM processes as described in the following sections. 

Developing or Updating a PPM 

The Agency has a process for developing and updating FCA’s policies and procedures in practice, but the 

process is not available to personnel and stakeholders in a written document. A new PPM may be 

developed for a variety of reasons: Executive Order or Presidential Memorandum, Office of 

Management and Budget or Office of Personnel Management requirement, Congressional request or 

mandate, Office of General Counsel requirement or suggestion, staff suggestion, or result of an audit 

finding. 

When the PPMs were housed in Lotus Notes, an “About Document” provided guidance on definitions, 

responsibilities and various procedures relating to preparation, formatting, approvals, classification, 

publication and distribution of PPMs. The About Document was not transferred to SharePoint with the 

PPMs; therefore, this written guidance is not readily available to employees. Documenting the Agency’s 

PPM process in a format that is accessible to all employees will ensure the procedures are consistently 

and efficiently followed, and the required approvals are obtained. 

Basic PPM Process 

The Agency’s general process for initiating a new PPM or updating an existing PPM consists of: drafting 

and finalizing a new or updated PPM; routing the PPM for approvals; loading the approved PPM into 

SharePoint; and notifying employees of the change through FCA Today or other means of 

communication. Documenting this process will provide a resource for staff to follow when initiating a 

new PPM or updating an existing PPM. 

Routing and Approvals 

The Agency’s routing of PPMs for approval 

generally includes approval by the: Office of 

General Counsel (OGC), Chief Operating 

Officer (COO), Executive Assistant to the 

Chairman, and Chairman. If the PPM is specific 

to an office, it is also approved by that Office 

Director. By practice, if the PPM contains 

procedures, it is approved by the COO; if the 

PPM contains a policy, it is approved by the 

Chairman. OGC approval is sometimes 

requested and sometimes required. 

Documenting the routing process and defining 

when approvals are required, and by which 

offices, will ensure appropriate approvals are 

obtained. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Routing Process 

To obtain the various approvals, the Agency uses a paper routing sheet to submit a new or updated 

PPM. This sheet lists the names of those to approve and dates when the PPM package is received and 

action taken by each staff member. Based on our review of the PPM files, a new or updated PPM 

generally takes one to two weeks for final review and approvals. File documentation showed that 

occasionally a routing sheet was not used. We also found inconsistency in the documentation of the 

PPM routing packages. Only a few packages included background documentation explaining what gave 

rise to developing or updating the PPM, such as an Executive Order or change in regulations. 

Automating the review and approvals process will ensure a consistent routing mechanism is used. It 

would also provide a central storage location for background documentation, as well as a cumulative 

review of edits and comments. 

SharePoint Access 

All employees have read-only access to the SharePoint PPM library. The Agency limits contributor access 

to the SharePoint PPM library to two employees (in addition to the Office of Information Technology’s 

SharePoint administrators). This provides reasonable controls for access to the Agency Policies and 

Procedures site. 

PPM Template Elements 

The Agency was consistent with the formatting of the two new PPMs we reviewed that were developed 

in Fiscal Years (FY) 2014 and 2015. These two PPMs both include the following elements in their 

respective policy and procedures sections. 

Policy section includes: 

• Policy 

• References 

• Delegations 

• Reporting 

Procedures section includes (in addition to sections specific to each PPM): 

• Implementing Procedures 

• General Agency Guidance 

• Definitions 

• Accountability 

Defining required section elements through use of formal templates will continue to ensure consistency 

in the formatting of new or updated PPMs. 

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Outdated Policies and Procedures 

Our inspection included a review of the SharePoint library of PPMs to determine how current they are. It 

appears many PPMs have not been updated for a number of years. Of the 92 PPMs the Agency has 

published in SharePoint as of January 20, 2016, we found: 

No. of PPMs with a publication date... 

31 January 1, 2011 to January 20, 2016 

14 January 1, 2006 to December 31, 2010 

47 prior to January 1, 2006 

We found no documentation in the records we inspected that indicated whether the PPMs had been 

reviewed since their publication date in SharePoint. 

Latest PPM Publication Date
	

34% 

within last 

5 years 

15% 

5-10 years 

ago 

51% 

more 

than 10 

years ago 

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We also reviewed PPM titles, publication dates and limited content. We noted several PPMs with 

outdated information or potentially obsolete information. The chart below identifies information in 

these PPMs that needs further review. 

PPMs with Information in Need of Review 

PPM No. PPM Title 

Publication 

Date 

Issuing 

Unit Information in Need of Review 

861 Domestic Partner Health 

Insurance Subsidy Program 

3/5/2015 OMS Update for Supreme Court ruling 

804 FCA Compensation Program 1/17/2014 OMS Compensation 2016 

821 Hours of Duty and Alternative 

Work Schedule Program 

9/13/2006 OMS PPM states: OMS reviews and 

revises or modifies these 

implementing procedures at least 

every 2 years 

700 Telephone System 9/10/2003 OMS Update for iPhones, iPads—PPM 

refers to Blackberries 

707 Telephone Credit Cards 8/5/2003 OMS Obsolete 

853 Supervisory Development 

Program 

6/19/2003 OMS Date missing 

900 IRM Planning 3/14/2003 OMS Signature and date missing 

833 Health Benefits 3/7/2003 OMS Update Agency contribution; 

Update for Supreme Court ruling; 

Update for dependent children 

coverage to age 26 

832 Group Life Insurance 3/7/2003 OMS Update for Supreme Court ruling 

829 AIDS 3/7/2003 OMS Consider rescinding or broaden to 

cover other diseases 

851 Property Management 

Program 

11/8/2002 OMS Update for electronic certification 

forms; Refers to obsolete Board 

Policy Statement 69 

840 Role and Responsibility of the 

Contracting Officer’s 

Technical Representative 

9/30/2002 OMS Signature and date missing 

852 Student Loan Program 9/4/2002 OMS Update for new student loan 

program 

1006 Audit Follow-up Policies and 

Procedures 

6/28/2002 OCEO PPM states: This directive will 

expire on June 30, 2005 unless 

reissued by the CEO. 

823 Voluntary Leave Bank 

Program 

1/28/2002 OMS Update publication date—signed 

10/28/2010 

901 Publications Group 11/15/1999 OMS Obsolete 

805 Mail Procedures 8/19/1998 OMS Outdated procedures 

800 Farm Credit Administration 

Organization 

6/30/1998 OMS Organization chart dated Sept 2011 

806 Procedures for Acquiring FCA 

Stock Items 

6/30/1998 OMS Outdated procedures 

811 Upward Mobility Program 10/9/1990 OMS PPM states: This PPM is being 

reviewed for possible revisions. 

(10/15/98) 

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Additionally, there are 37 PPMs that reference one (or more) other PPMs. At least 17 of these PPMs 

reference obsolete or outdated PPMs. If PPMs are not kept current, employees may have inaccurate 

information on Agency programs and follow outdated procedures. 

The Agency does not have a schedule to periodically review current PPMs and certify the status of each 

PPM as: current, needs revising, or should be rescinded. Periodic review of the PPMs will ensure 

management and employees have access to current operational policies and procedures. 

Communication 

The Agency generally communicates new PPMs or modifications to PPMs to employees through FCA 

Today (a collection of articles emailed to all employees on a daily basis) in a timely manner. During FY 

2013 through 2015, we found most new PPM information was communicated through FCA Today to all 

employees or alternatively, through other means directed to the specific stakeholders (e.g., to office 

directors). However, we found no written guidance describing the Agency’s communication process for 

new PPM content. 

Because the Agency does not have a documented process for determining when a new, updated or 

rescinded PPM should be communicated to employees, responsibility for deciding when and how to 

communicate updates to PPMs lies with the PPM author. Formalizing guidance on publishing new or 

updated PPM information will ensure employees are notified of new or modified PPMs. 

Agreed-Upon Actions 

1.		 Publish procedures for developing, updating, formatting, approving and communicating PPMs. 

2.		 Periodically review PPMs to certify whether policies and procedures are current, need updating, or 

should be rescinded. 

3.		 Consider automating the review and approvals process. 

The Office of Management Services agreed to complete the following specific tasks to improve the PPM 

process: 

1.		 Create an Agency PPM that documents the PPM process, including developing, updating, 

formatting, approving and communicating PPMs. 

2.		 Provide written documentation demonstrating when and how PPMs are reviewed. 

3.		 Provide written documentation demonstrating that automating the PPM process was considered. 

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OBJECTIVE, SCOPE, AND METHODOLOGY 

7 

The objective of the inspection was to determine the effectiveness and efficiency of FCA’s process in 

developing and updating Agency policies and procedures. We conducted fieldwork at FCA’s 

headquarters in McLean, Virginia from December 2015 to March 2016. We limited our scope to FY 2013 

through 2015. 

We completed the following steps to accomplish the inspection objective: 

• Reviewed applicable laws and regulations relating to the inspection objective, including 

Standards for Internal Control in the Federal Government (Green Book); 

• Considered prior reviews related to the inspection objective; 

• Reviewed current Agency policies and procedures (PPMs); 

• Conducted interviews with key personnel involved in the PPM process; 

• Obtained background information on policymaking procedures; 

• Identified internal controls over the PPM process; 

• Reviewed the processes for developing, updating and communicating PPMs, including 

required approvals and controls; and 

• Analyzed relevancy, timeliness and coverage of subject matter. 

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 collected during the 

inspection and determined it was sufficiently reliable and valid for use in meeting the inspection 

objectives. We assessed the risk of fraud related to our inspection objective in the course of 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. 
 

 

ACRONYMS 

COO Chief Operating Officer 

FCA Farm Credit Administration 

FY Fiscal Year 

OGC Office of General Counsel 

OMS Office of Management Services 

PPM Policies and Procedures 

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R E P O R T 

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