Semiannual Report to Congress 

April 1, 2019 – September 30, 2019 

Farm Credit Administration 

Office of Inspector General 
 

FARM CREDIT ADMINISTRATION 

OFFICE OF INSPECTOR GENERAL 

SEMIANNUAL REPORT TO CONGRESS 

APRIL 1, 2019 – SEPTEMBER 30, 2019 
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, 2019 through September 30, 2019.

This reporting period was marked by the loss of FCA Chairman Dallas Tonsager, who 

passed away in May. Mr. Tonsager’s term on the FCA Board capped a long career

dedicated to the advancement of agricultural and rural communities, which included 

service as Under Secretary for Rural Development at the U.S. Department of Agriculture

and a previous term on the FCA Board. He will be remembered as a fierce advocate for

farmers, ranchers, and rural America and will be greatly missed at FCA.

Succeeding Mr. Tonsager is Glen R. Smith, who was designated as FCA Chairman and 

Chief Executive Officer by President Trump on July 17, 2019. I look forward to 

maintaining direct and open lines of communication with Chairman Smith and Board 

Member Jeffery S. Hall. Such communication enables the OIG to keep the Board fully

and currently informed concerning serious problems facing the Agency.

The past six months have seen continued excellence from the OIG’s audit, inspection, 

evaluation, and investigative functions. Highlights of the reporting period include an

audit on FCA’s progress in updating stress testing guidance and the Agency’s use of

stress testing-related data and tools in providing oversight of Farm Credit System 

institutions. We also completed an audit on the effectiveness of FCA’s process for 

obtaining contractor background investigations. I am also pleased to report that the

OIG’s audit program received the highest possible rating during our external peer

review. These and other OIG oversight activities continue to deliver valuable

perspectives to the FCA Board, senior leadership, and other stakeholders. 

Our office continued to participate extensively in the Inspector General community 

during this reporting period. I am honored to serve as the Vice Chair of the Inspection

and Evaluation (I&E) Committee of the Council of the Inspectors General on Integrity 

and Efficiency, which maintains professional standards, oversees the I&E peer review 

process, and highlights the varied I&E products. Through our work on the I&E 

Committee, I hope to leverage the knowledge and experience of OIG staff to improve 

oversight government-wide. 

Finally, in September we adopted a new strategic plan for fiscal years 2020 to 2024. 

Developed with input from all OIG staff and assistance from a Washington Center

intern, the plan sets forth the vision, mission, values, and goals that will guide the OIG’s 

oversight in the coming years. As FCA grapples with the impacts of trade, immigration 

issues, declining farmland values, destructive weather events, and other challenges, I 

trust that our new strategic plan will serve the OIG well as we strive to promote value

and integrity in Agency programs and operations. 

Wendy R. Laguarda 

Inspector General 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 i 
ACRONYMS & 

ABBREVIATIONS 

AIGAIE Assistant Inspector General for Audits, Inspections, and 

Evaluations 

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 

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 

OIT Office of Information Technology 

OMB U.S. Office of Management and Budget 

Pub. L. Public Law 

System Farm Credit System 

U.S. United States 

ii Farm Credit Administration | Office of Inspector General 
TABLE OF 

CONTENTS

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

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

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

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

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

Audits, Inspections, and Evaluations .................................................................................................. 5

Investigations .............................................................................................................................................. 9

Other Reports and Reviews ................................................................................................................. 10

Reviews of Legislation and Regulations .......................................................................................... 11

Outreach and Collaboration................................................................................................................ 12

Appendix I: Peer Reviews ...................................................................................................................... 13

Appendix II: Reports Issued ................................................................................................................. 15

Appendix III: Reports with Questioned Costs ............................................................................... 16

Appendix IV: Reports with Funds For Better Use......................................................................... 17

Appendix V: Open Recommendations ............................................................................................ 18

Index of Reporting Requirements ..................................................................................................... 20

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 iii 
 

 

 

 

 

 

 

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 five service corporations that provide administrative, technologyrelated, 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, 

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),

1 by conducting and supervising 

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

1 5 U.S.C. app. 

1 Farm Credit Administration | Office of Inspector General 
 

 

 

 

 

 

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. During

the reporting period, the office added a new position, the Assistant Inspector General 

for Audits, Inspections, and Evaluations (AIGAIE). The new AIGAIE supervises the audit 

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

counsel continue to report directly to the IG, as set forth below. 

Inspector General

Wendy Laguarda 

Investigator

Ava Bell 

Assistant Inspector General for Audits,

Inspections, and Evaluations

Sonya Cerne 

Senior Auditor 

Tammy Rapp 

Senior Auditor 

Tori Kaufman 

Counsel to the 

Inspector General

Kevin Miller 

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. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 2 
STRATEGIC 

PLAN 

3 Farm Credit Administration | Office of Inspector General 

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

2020 to 2024. The plan details the vision, mission, values, goals, and objectives of the 

OIG in carrying out its responsibilities under the IG Act and establishes certain 

performance measures against which the OIG will benchmark its performance. 

The OIG’s vision, mission, values, and goals are outlined below. 

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 
 

 

 

 

 

 

PERFORMANCE 

MEASURES 

The OIG’s strategic plan for FYs 2018 and 2019 sets forth several qualitative and 

quantitative measures against which the OIG assesses its performance. The following 

describes some of the OIG’s actions during the reporting period that were relevant to 

those performance measures. 

Efficiencies have been gained through cross-training, allowing the OIG to optimize 

everyone’s knowledge and skills and ensure that its small staff of six ably meets the 

demands of providing oversight to FCA. 

Completion time of OIG work assignments has been appropriate based on the 

complexity and unique nature of each assignment. 

Of the seven audit, inspection, and evaluation recommendations made during this 

reporting period, all were accepted. 

Complaints activity during the reporting period continued to reflect employees’ 

confidence in the OIG’s ability to investigate wrongdoing and guard confidentiality. 

Interaction with Congress remains strong, as the IG met with majority and minority 

staff from FCA’s Senate and House oversight committees to discuss OIG activities. 

Communication with the FCA Board and management is an ongoing priority of the 

office. During this reporting period, the OIG held two quarterly briefings with each 

board member and provided individual briefings, upon request, on our audit, 

inspection, and evaluation products. The OIG also solicited input from board members

and management regarding a new management challenge identified on data quality 

and analysis. 

Aligning audit planning with FCA’s top management and performance challenges

is important to ensure that our work is risk-based and addresses the most significant 

challenges facing the Agency. Each audit, inspection, and evaluation report summarized 

in this document refers to the management challenge addressed. 

Outreach efforts during the reporting period included two quarterly issues of the dIG 

(the OIG’s intra-FCA newsletter), two training sessions for newly-hired FCA employees,

and promotion of the OIG hotline by the distribution of newly-designed OIG posters 

throughout the Agency. 

Participation in CIGIE is integral to everyone’s job in the OIG, and staff members are 

actively involved with various CIGIE committees and initiatives. Of note, the IG accepted 

the opportunity to serve as Vice Chair of the CIGIE Inspection and Evaluation (I&E) 

Committee. 

Training taken during this reporting period covered a range of subjects pertinent to 

the OIG’s mission, including audits, investigations, legal issues, and information 

technology. Regular training ensures that OIG personnel are well-equipped to deliver 

credible oversight products and allows OIG staff to pursue career development 

opportunities. 

Diversity of OIG staff when hiring opportunities arise is a goal in our office. Our 

office strives to enhance diversity during hiring and support the Agency’s strategic 

objective to embrace diversity and inclusion. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Government Auditing Standards 

issued by the U.S. Government Accountability Office, while inspections and evaluations 

adhere to the CIGIE Quality Standards for Inspection and Evaluation. 

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 2019 and 2020. 

Reports issued may be found on the OIG's website within three 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 two reports and made seven recommendations for corrective action 

during the reporting period. The reports issued are summarized below. 

FCA’s Stress Testing Guidance, and Use of Data and

Analytical and Examination Tools

A-19-01 

Maintaining an effective examination and supervision program helps ensure that 

System institutions operate safely and soundly, comply with relevant law, and provide 

a dependable source of credit for agriculture and rural America. Accordingly, the OIG 

has consistently considered FCA’s examination and supervision program as one of the 

top management challenges facing the Agency. 

One way the Agency promotes safety and soundness is by providing guidance on and 

examining System institutions’ use of stress testing. Stress testing is a risk management 

tool used by financial institutions to plan for potentially adverse events that could 

impact their financial condition, helping them respond to and mitigate risks. In March 

2018, FCA’s Office of Regulatory Policy completed a stress testing project that resulted 

in several recommendations on how to enhance FCA’s oversight and improve System 

institutions’ use of stress testing. FCA opted to implement those recommendations in 

phases. 

The objective of this audit was to assess FCA’s progress in updating its stress testing 

guidance and its development and implementation of stress testing-related analytical 

and examination tools. The OIG reviewed FCA guidance, examination procedures, 

5 Farm Credit Administration | Office of Inspector General 
 

 

 

 

 

 

examination workpapers and reports; and interviewed FCA personnel with 

responsibilities related to stress testing. 

The OIG found that FCA has made progress in updating its stress testing guidance and 

plans to issue additional related guidance. While it does not itself perform stress tests

of System institution financial or loan data, FCA is developing and implementing tools 

that will enhance its ability to perform systemic risk and data analysis and cultivating 

related skills in Agency staff. The audit’s review of examination procedures and 

documentation did not reveal any significant deficiencies related to FCA examiners’ 

coverage of stress testing. 

The OIG recommended that the Agency develop a project plan to ensure the timely 

completion of various tasks related to stress testing. FCA concurred with the 

recommendation. 

The audit report was issued to the FCA Board on September 19, 2019. 

FCA’s Process for Contractor Background Investigations

A-19-02 

The OIG has consistently identified the maintenance of a well-trained, sustainable 

workforce as a top management challenge facing FCA. One of the ways that FCA

ensures it has the appropriate personnel to carry out its mission is by using contractors. 

In performing work for the Agency, contractor employees often need access to FCA 

facilities, equipment, systems, and data. Before granting such access, though, the 

Agency must determine whether their retention is consistent with the public trust and 

the integrity and efficiency of the government. In many cases, this determination 

requires that the individual undergo a background investigation. 

FCA’s Personnel Security Officer is tasked with developing Agency personnel security 

policies and procedures, designating the sensitivity of positions, scheduling 

background investigations, evaluating investigative reports, adjudicating 

investigations, and monitoring the Personnel Security and Suitability Program. With 

respect to contractor positions, the Personnel Security Officer works with Agency 

contracting personnel and contracting officer’s representatives to implement 

background investigation requirements. 

The objective of this audit was to examine the effectiveness of FCA’s process for 

obtaining background investigations for contractors. In carrying out this audit, the OIG 

reviewed relevant policies and procedures, interviewed responsible personnel, and

reviewed a sample of case files documenting investigations of Agency contractor 

employees. The OIG also reviewed internal controls and certain Agency contracting 

practices pertaining to background investigation requirements. 

The OIG found that investigation monitoring files generally included appropriate 

documentation but noted certain exceptions. The review also determined that certain 

internal controls were not implemented in accordance with Agency policies and 

procedures. The OIG identified several opportunities for FCA to strengthen controls 

over its monitoring of and otherwise improve the Agency’s contractor background 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 6 
investigation process. In total, the OIG made six recommendations for corrective action. 

The Agency concurred with all six recommendations. 

The audit report was issued to the FCA Board on September 26, 2019. 

Recommendations for Corrective Action 

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

period. 

 

Table 1 

Report Recommendation 

FCA’s Stress Testing

Guidance, and Use of 

Data and Analytical and

Examination Tools 

FCA’s Process for 

Contractor Background

Investigations 

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. 

1 Designate and train an Alternate Personnel Security 

Officer. 

2 Reconcile and update policies and procedures, 

including a control to verify the status and accesses

for current contractors. 

7 Farm Credit Administration | Office of Inspector General 
Report Recommendation 

3 

4 

Document justifications for internal control risk 

ratings for the Personnel Security and Suitability 

Program. 

Develop standard contract language to address 

contractor background investigation requirements 

in new contracts. 

5 Develop requirements to document exceptions and

justifications in case files. 

6 Evaluate security requirements addressed through 

the Interim Suitability Assessment process and 

modify current procedures, as necessary. 

 

In Progress 

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

reporting period. 

Audit of FCA’s Criminal Referral Process 

System institutions are required by regulation to notify FCA and appropriate law 

enforcement authorities when they determine there is a known or suspected criminal 

violation of federal law affecting the System institution’s assets, operations, or affairs. 

The OIG is reviewing FCA’s criminal referral and follow-up process to determine 

whether it is effective and efficient. 

Evaluation of FCA Compliance with the

Federal Information Security Modernization Act for FY 2019 

The Federal Information Security Modernization Act of 2014 requires OIGs to annually 

evaluate their respective agency’s information security program and practices. In 

accordance with guidance issued by the U.S. Office of Management and Budget (OMB)

and the U.S. Department of Homeland Security, the OIG is assessing FCA’s performance 

with respect to risk management, configuration management, identity and access 

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

continuous monitoring, incident response, and contingency planning. 

Audit of FCA’s Financial Statements for FY 2019 

The Accountability of Tax Dollars Act of 2002 requires FCA to submit to Congress and 

OMB audited financial statements each fiscal year. The OIG has contracted with an 

independent public accounting firm to perform the audit of FCA’s financial statements 

for FY 2019. The OIG is monitoring the work of the firm. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 8 
referral to prosecuting authorities 

 

INVESTIGATIONS 

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

operations that the IG determines to be necessary or desirable. 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, System institutions, or members of the public. The OIG may 

also investigate potential fraud, waste, abuse, and mismanagement identified through 

proactive investigative projects or audits, inspections, and evaluations. 

In exercising its investigative authorities, the OIG works to produce 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. Closing memoranda for investigations are available on the 

OIG’s online reports page. 

Table 2 summarizes major investigative activity during the reporting period. 

Table 2 

Metric 

Investigative reports issued2 

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

prosecution 

Persons referred to state and local prosecuting authorities for criminal 

prosecution 

Indictments and criminal informations that resulted from any prior 

Number 

0 

0 

0 

0 

Complaint Activity 

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 at 

any time. The office also welcomes complaints by mail and in-person. Table 3 shows 

the OIG’s response to complaints received during the reporting period. 

2 Reports of investigation resulting from a formal investigation. Does not include memoranda 

memorializing the referral of complaints or closure of preliminary inquiries. 

9 Farm Credit Administration | Office of Inspector General 

Table 3 

Action Taken Number 

Formal investigation opened 0 

Closed after preliminary inquiry 6 

Referred within FCA, involving borrower complaints or allegations of 6 

loan fraud 

Referred to other federal agencies, involving matters outside of FCA OIG 14 

jurisdiction 

Under review at the end of the reporting period 1 

Total 27 
 

 

 

 

 

 

 

 

 

 

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 

certain such reviews that were completed during the reporting period. 

Improper Payments Elimination and Recovery Act

Compliance Report for FY 2018 

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 are required to 

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

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

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

adheres 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 2018 was to publish a Performance and Accountability Report, 

which it did. 

On May 15, 2019, the OIG transmitted its findings to the FCA Board and appropriate 

oversight bodies in accordance with IPERA and implementing OMB guidance. 

Survey of Farm Credit System Institutions

Regarding the Agency’s Examination Function 

Each quarter, the OIG surveys recently examined System institutions regarding the 

quality and consistency of FCA’s examination function. Survey questions seek the 

institution’s views on several matters, ranging from the appropriateness of the 

examination’s scope and the examiners’ conduct to the helpfulness of any 

recommendations or required actions. The survey employs a numerical rating system 

and allows for institutions to provide narrative responses. The OIG collects, aggregates, 

and anonymizes survey responses for distribution to the FCA Board and Chief Examiner 

semiannually. 

The OIG issued one survey report on June 28, 2019, detailing responses from System 

institutions examined during the first half of FY 2019. 

2019 Quality Assurance Review 

In accordance with its internal policies, the OIG annually conducts an internal quality 

assurance review to determine whether internal OIG procedures were established, 

implemented, and operating effectively. The review for FY 2019 noted no systemic 

issues or weaknesses and made no recommendations. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 10 
 

 

REVIEWS OF 

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 and abuse. 

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

including H.R. 2500, the National Defense Authorization Act for FY 2020. The OIG 

provided comments on proposed legislation through the CIGIE Legislation Committee. 

11 Farm Credit Administration | Office of Inspector General 
 

 

 

 

 

 

OUTREACH AND 

COLLABORATION 

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. For example, the OIG publishes a 

quarterly intra-agency newsletter, the dIG, which spotlights the office’s functions and 

provides recent examples of OIG oversight products government-wide. The OIG also 

participates in orientation trainings for new FCA employees and distributes posters to 

promote awareness of the OIG hotline. 

Congress 

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

informed regarding 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 April, the IG began serving as the Vice Chair of the CIGIE I&E Committee. Headed by

U.S. Department of State IG Steve Linick, the Committee maintains professional 

standards for inspections and evaluations, heads the development of protocols for 

reviewing cross-agency management issues, oversees the I&E peer review process, and 

more. The IG also served throughout the reporting period 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 I&E roundtable, the CIGIE Audit Committee, and the Council 

of Counsels to the Inspectors General. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 12 
APPENDIX I: 

PEER 

REVIEWS 

13 Farm Credit Administration | Office of Inspector General 

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

external peer reviews. Information regarding 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 our website. 

Reports of peer reviews conducted by our office may be located on the websites of the 

reviewed OIGs. 

Audit 

Government Auditing Standards require any organization conducting audits in 

accordance with those standards 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. 

On September 13, 2019, the National Endowment for the Humanities OIG issued a final 

report of its peer review of the FCA OIG audit organization. The FCA OIG received the 

highest rating of pass, with no recommendations for corrective action. 

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

Inspection and Evaluation 

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

evaluations in accordance with the CIGIE Quality Standards for Inspection and Evaluation 

is required to undergo an external peer review every three years. During the first threeyear 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 I&E work. 

The first peer review of the FCA OIG’s I&E function was ongoing at the end of the 

reporting period. 

The FCA OIG did not conduct any I&E peer reviews during the reporting period. 

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 

noncompliant. 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 our 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, 2019 – September 30, 2019 14 
APPENDIX II: 

REPORTS ISSUED 

15 Farm Credit Administration | Office of Inspector General 

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. 

Report Title 

FCA’s Stress Testing

Guidance, and Use of Data 

and Analytical and 

Examination Tools 

The Farm Credit 

Administration’s Process 

for Contractor Background

Investigations 

Total 

Table 4 

Dollar Value of 

Questioned Costs 

Total Unsupported 

$0 $0 

$0 $0 

$0 $0 

Dollar Value of 

Recommendations 

that Funds be Put 

to Better Use 

$0 

$0 

$0 
 

APPENDIX III: 

REPORTS WITH 

QUESTIONED 

COSTS 

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

total dollar value of questioned costs associated with those reports. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 16 

Table 5 

Requirement # 

(A) Reports for which no management 0 

decision had been made by the 

commencement of the reporting period 

(B) Reports issued during the reporting 2 

period 

Subtotal (A+B) 2 

(C) Reports for which a management decision 2 

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 0 

decision has been made by the end of the 

reporting period 

Questioned 

Costs 

$0 

$0 

$0 

$0 

$0 

$0 

$0 

Unsupported

Costs 

$0 

$0 

$0 

$0 

$0 

$0 

$0 
APPENDIX IV: 

REPORTS WITH 

FUNDS 

FOR 

BETTER 

USE 

17 Farm Credit Administration | Office of Inspector General 

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

recommendations that funds be put to better use. 

Table 6 

Requirement # 

(A) Reports for which no management decision had been 0 

made by the commencement of the reporting period 

(B) Reports issued during the reporting period 2 

Subtotal (A+B) 2 

(C) Reports for which a management decision was made 2 

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 0 

made by the end of the reporting period 

Unsupported

Costs 

$0 

$0 

$0 

$0 

$0 

$0 

$0 
 

APPENDIX V: 

OPEN 

RECOMMENDATIONS 

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

reports issued before April 1, 2019 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 decisions had been made by the end of the 

reporting period or no comment was returned within 60 days. 

Table 7 

Report 

Outstanding 

Unimplemented

Recommendations 

Aggregate

Potential Cost 

Savings 

OIG 2017 Evaluation of the Farm Credit 1 $0 

Administration’s Compliance with the 

Federal Information Security 

Modernization Act (October 27, 2017) 

OIG 2018 Evaluation of the Farm Credit 4 $0 

Administration’s Compliance with the 

Federal Information Security 

Modernization Act (October 31, 2018) 

Total: 5 $0 

Tables 8 identifies recommendations made during previous reporting periods for which 

corrective action had not been completed as of September 30, 2019. 

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 18 

 

 

 

 

Table 8 

Report Recommendation 

OIG 2018 Evaluation of 

the Farm Credit 

Administration’s 

Compliance with the 

Federal Information 

Security Modernization 

Act 

2 OIT needs to develop and disseminate a privacy 

program with related plans, policies, and procedures 

for the protection of PII and other sensitive data 

collected, used, maintained, shared, and disposed of 

by information systems. The resources, roles, and 

responsibilities needed to implement the privacy

program must be determined. 

3 OIT needs to develop and communicate policies and 

procedures that identify the inventory of PII and 

other sensitive data collected, used, and maintained 

that require increased protection. 

4 OIT 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 
 

Report Recommendation 

5 OIT needs to develop policies and procedures 

related to preventing data exfiltration. 

OIG 2017 Evaluation of 

the Farm Credit 

Administration’s 

1 To [FCA’s Office of Information Technology (OIT)] 

(not released publicly)3 

Compliance with the 

Federal Information 

Security Modernization 

Act 

 

 3 Information withheld from public disclosure pursuant to 44 U.S.C. § 3555(f). 

19 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 11 

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

5(a)(2) Recommendations for corrective action 7-8 

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

reports for which corrective action has not been completed 

18-19 

5(a)(4) Matters referred to prosecutive authorities 9 

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

or not provided 

None 

5(a)(6) Audit, inspection, and evaluation reports issued 15 

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

5(a)(8) Management decisions with respect to questioned costs 16 

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

put to better use 

17 

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 

18 

outstanding unimplemented recommendations 

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 13-14 

5(a)(16) Peer reviews conducted by the FCA OIG 13-14 

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 2008.4 

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

Semiannual Report to Congress | April 1, 2019 – September 30, 2019 20 
 

 

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.