A0IG 

Farm Credit Administration 

Office of Inspector General 

Farm Credit Administration 

Office of Inspector General 

Inspection Report 

Farm Credit Administration’s 

Compliance with the Payment

Integrity Information Act of 2019

for Fiscal Year 2021 

I-22-02 

March 23, 2022 
 

 

 

 

 

PCAOIG 

Fann Credit Administration 

Office of Inspector General 

March 23, 2022 

The Honorable Glen R. Smith, Board Chairman 

The Honorable Jeffery S. Hall, Board Member 

Farm Credit Administration 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

Dear Chairman Smith and Board Member Hall: 

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

(FCA or Agency) compliance with the Payment Integrity Information Act of 2019 (PIIA) for Fiscal Year 

(FY) 2021. The objective of this inspection was to determine if FCA complied with the PIIA for FY 2021. 

We determined that FCA complied with PIIA requirements applicable to the Agency for FY 2021, and 

based on the limited review performed, the Agency’s efforts to prevent and reduce improper payments 

appear to be reasonable. As required, FCA published a Performance and Accountability Report, which 

contained the financial statement for FY 2021. FCA also published payment integrity information in the 

report and posted the report on the Agency website. 

FCA also completed the required improper payment risk assessments and analyzed programs for 

susceptibility to improper payments. FCA completed the risk assessments in May 2021 and determined 

that all programs and activities were low risk and not susceptible to significant improper payments. The 

OIG did not identify any concerns with the conclusion that FCA was low risk for significant improper 

payments and that the programs are below the established thresholds for additional reporting 

requirements. 

In accordance with the PIIA and implementing guidance, the report will be provided to the 

Committee on Homeland Security and Governmental Affairs of the U.S. Senate, the Committee on 

Oversight and Reform of the U.S. House of Representatives, the Office of Management and 

Budget, and the Comptroller General. 

We appreciate the courtesies and professionalism extended by FCA to our staff during the inspection. 

If you have any questions, we would be pleased to meet with you at your convenience. 

Respectfully, 

Sonya K. Cerne 

Assistant Inspector General for Audits, Inspections, and Evaluations 

1501 Farm Credit Drive, McLean, VA 22102 703-883-4030 www.fca.gov/about/inspector-general 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE SUMMARY 

FCA’s Compliance with the Payment Integrity Information

Act of 2019 for Fiscal Year 2021 

Report No. I-22-02 March 23, 2022 

Objective 

The objective of this inspection was 

to determine if the Farm Credit 

Administration (FCA or Agency) 

complied with the Payment Integrity 

Information Act of 2019 (PIIA) for

Fiscal Year (FY) 2021. 

Recommendations 

There are no recommendations in 

this report. 

Agency Response 

Although we made no 

recommendations in the report, 

Agency management provided 

comments to the report (see full 

comments in the Management

Comments section of the report).

The response from the Acting Chief

Financial Officer stated the Office of 

the Chief Financial Officer is 

committed to continuing to prevent 

improper payments, prepare risk

assessments, and analyze programs 

for susceptibility to improper 

payments. 

Why We Did This Inspection 

Signed into law on March 2, 2020, PIIA was enacted to improve efforts 

to identify and reduce Governmentwide improper payments. PIIA sets 

forth improper payment reporting requirements for federal agencies, 

including an annual compliance review to be conducted by agency 

offices of inspectors general. 

How We Did This Inspection 

To determine compliance with payment integrity requirements, we 

reviewed the Farm Credit Administration’s FY 2021 Performance and 

Accountability Report (PAR) for improper payment and payment 

integrity information. We also reviewed the improper payment risk 

assessments for outlay data, information considered in risk ratings, and 

the scoring for each area. 

What We Found 

We determined that FCA complied with PIIA requirements applicable to 

the Agency for FY 2021 and, based on the limited review performed,

the Agency’s efforts to prevent and reduce improper payments appear 

to be reasonable. FCA published a PAR for FY 2021, included applicable 

payment integrity reporting information, and posted the FY 2021 PAR 

on the Agency’s website. 

FCA also completed the required improper payment risk assessments 

and analyzed programs for susceptibility to improper payments. FCA

completed the risk assessments in May 2021 and determined that all 

programs and activities were low risk and not susceptible to significant 

improper payments. 

As none of the programs or activities assessed by FCA were determined 

to be susceptible to significant improper payments, the Agency was not 

required to: publish improper payment and unknown payment 

estimates, corrective action plans or reduction targets: demonstrate 

improvements to payment integrity or reach tolerable improper 

payment and unknown payment rates; develop plans to meet reduction 

targets; or report payment estimates of less than 10 percent. 
Table of Contents 

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

Objective, Scope, and Methodology .......................................................................................... 2 

Inspection Results ......................................................................................................................... 4 

Management Comments .............................................................................................................. 6 

Acronyms ....................................................................................................................................... 7 
 

 

 

 

 

 

 

 

 

 

 

BACKGROUND 

Farm Credit Administration 

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

regulating and supervising the Farm Credit System (System) and the Federal Agricultural 

Mortgage Corporation. The Agency is responsible for ensuring that all System institutions are safe, 

sound, and dependable sources of credit and related services for all creditworthy and eligible 

persons in agriculture and rural America. To support the mission, FCA’s Office of the Chief Financial 

Officer (OCFO) is responsible for reporting the agency’s financial results, providing financial 

management policy advice, and managing federal financial management requirements. 

Payment Integrity 

An important part of financial management for every federal agency is to ensure that improper

payments are prevented and reduced. On March 2, 2020, the Payment Integrity Information Act 

of 2019 (PIIA) repealed several improper payment and other related laws. PIIA aims to improve 

efforts to identify and reduce Governmentwide improper payments and sets forth improper 

payment1 reporting requirements for federal agencies, including an annual compliance review to 

be conducted by agency offices of inspectors general (OIGs). 

On March 5, 2021, the Office of Management and Budget (OMB) issued a revised version of 

Appendix C to OMB Circular A-123, Requirements for Payment Integrity Improvement, which 

provides guidance on PIIA implementation. The goal of this revised version is to transform the 

payment integrity compliance framework and create a more comprehensive and meaningful set

of requirements. OMB Circular A-123, Appendix C also sets forth guidance on the annual OIG 

compliance reviews. 

OIG Compliance Review Requirements 

In accordance with PIIA, OIGs were directed to consult (in addition to OMB Circular A-123, 

Appendix C), guidance issued by the Council of the Inspectors General on Integrity and Efficiency 

(CIGIE) for specific procedures on how they should determine compliance with PIIA. Guidance 

further requires OIGs to perform the compliance review as informed by OMB Circular A-136, OMB 

data call instructions, and OMB’s Payment Integrity Question and Answer Platform. 

Under this guidance, OIGs must determine compliance with specific PIIA requirements. 

Compliance is defined by whether an agency has: 

1 PIIA defines an improper payment as any payment that should not have been made or that was made in 

an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, 

administrative, or other legally applicable requirement. If a program cannot discern whether a payment is 

proper or improper, the payment is considered an unknown payment. 

1 
• Published payment integrity information with the annual financial statement; 

• Posted the annual financial statement and accompanying materials on the agency website; 

• Conducted improper payment risk assessments for each program with annual outlays 

greater than $10,000,000 at least once in the last three years; 

• Adequately concluded whether the program is likely to make improper payments and 

unknown payments above or below the statutory threshold; 

• Published improper payment and unknown payment estimates for programs susceptible 

to significant improper payments and unknown payments in the accompanying materials 

to the annual financial statement; 

• Published corrective action plans for each program for which an estimate above the 

statutory threshold was published in the accompanying materials to the annual financial 

statement; 

• Published an improper payment and unknown payment reduction target for each program 

for which an estimate above the statutory threshold was published in the accompanying 

materials to the annual financial statement; 

• Demonstrated improvements to payment integrity or reached a tolerable improper 

payment and unknown payment rate; 

• Developed a plan to meet the improper payment and unknown payment reduction target; 

and 

• Reported an improper payment and unknown payment estimate of less than 10 percent 

for each program for which an estimate was published in the accompanying materials to 

the annual financial statement. 

In reporting compliance with the above criteria, guidance advises OIGs to use a compliant/noncompliant approach that takes into account whether its current work, prior work, and professional 

judgment lead the OIG to conclude that it has concerns regarding completeness or inaccuracies 

that would significantly alter the payment integrity information reported by the agency. 

OBJECTIVE, SCOPE, AND METHODOLOGY 

Objective 

The objective of this inspection was to determine if FCA complied with the Payment Integrity 

Information Act of 2019 (PIIA) for Fiscal Year (FY) 2021. 

Scope 

The scope of the inspection was limited to compliance for FY 2021. The inspection was conducted 

at FCA from February 2022 through March 2022. 

2 
 

 

 

Methodology 

We took the following steps to accomplish the objective: 

• Identified and reviewed applicable laws, regulations, policy, procedures, guidance, and 

other background information applicable to the objective. 

• Identified and reviewed applicable internal FCA policies and procedures. 

• Reviewed prior reviews related to the inspection objective. 

• Interviewed selected OCFO personnel responsible for payment integrity and financial 

reporting. 

Tests Performed 

 Reviewed FCA’s FY 2021 Performance and Accountability Report (PAR) for improper 

payment and payment integrity information. We compared the information to the 

requirements set forth in PIIA and implementing guidance and verified posting of the FY 

2021 PAR to the agency website. 

 Requested and reviewed improper payment risk assessments conducted in FY 2021. We 

reviewed the risk assessments for outlay data, information considered in risk ratings, and 

each area’s risk score. 

 Summarized compliance ratings for the applicable sections of payment integrity 

requirements. 

Quality Standards for Inspection and Evaluation 

This inspection was performed in accordance with the CIGIE’s Quality Standards for Inspection 

and Evaluation. These standards require that we plan and perform the inspection to obtain 

sufficient and appropriate evidence that provides 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 objective. We assessed the 

risk of fraud related to our inspection objective while evaluating evidence and had no matters 

come to our attention indicating fraud or illegal acts were occurring. Overall, we believe the 

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

conclusions based on the inspection objective. 

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Table 1: FCA Compliance with FY 2021 PIIA Requirements 

CONTRACT CLAIMS PAYMENTS PURCHASE TRAVEL 

AND PAYROLL AND CARD CARD VOUCHERS INVOICES 

Published payment integrity information Compliant Compliant Compliant Compliant Compliant with the annual financial statement 

Posted the annual financial statement 

and accompanying materials on the Compliant Compliant Compliant Compliant Compliant 

agency website 

Conducted improper payment risk 

assessments for each program with Compliant Compliant Compliant Compliant Compliant annual outlays greater than $10,000,000 

at least once in the last three years 

INSPECTION RESULTS 

We determined that FCA complied with PIIA requirements applicable to the Agency for FY 2021 

and, based on the limited review performed, the Agency’s efforts to prevent and reduce improper

payments appear to be reasonable. 

• FCA published a PAR for FY 2021 in November 2021 that included the annual financial 

statement and applicable payment integrity reporting information. The Agency also 

posted the FY 2021 PAR on the Agency’s website. 

• FCA completed the required improper payment risk assessments and analyzed programs 

for susceptibility to improper payments. As part of the risk assessments conducted for the 

period ended September 30, 2020, FCA assessed five programs and activities: contract 

payments and invoices; purchase cards; travel cards; claims and vouchers; and payroll. FCA 

completed the risk assessments in May 2021 and determined that all programs and 

activities were low risk and not susceptible to significant improper payments. 

• As none of the programs or activities assessed by FCA were determined to be susceptible

to significant improper payments, the Agency was not required to publish improper 

payment and unknown payment estimates, publish corrective action plans, publish 

reduction targets, demonstrate improvements to payment integrity or reach tolerable 

improper payment and unknown payment rates, develop plans to meet reduction targets, 

or report payment estimates of less than 10 percent. 

The following table summarizes FCA’s compliance with payment integrity reporting requirements 

by program. 

4 
Adequately concluded whether the 

program is li kely to make improper 

payments and unknown payments Compliant Compliant Compliant Compliant Compliant 

above or bel ow the statutory threshold 

Published improper payment and 

unknown payment estimates for 

programs susceptible to signifi cant 

improper payments and unknown N/A N/A N/A N/A N/A 

payments in the accompanyi ng 

materials to the annual financia l 

statement 

Published corrective action plans for 

each program for which an estimate 

above the statutory threshold was 

published in the accompanying N/A N/A N/A N/A N/A 

materials to the annual financia l 

statement 

Published an improper payment and 

unknown payment reduction target for 

each program for which an esti mate 

above the statutory threshold was N/A N/A N/A N/A N/A 

published in the accompanying 

materials to the annual financia l 

statement 

Demonstrated improvements to 

payment integrity or reached a tolerable 

improper payment and unknown N/A N/A N/A N/A N/A 

payment rate 

Developed a plan to meet the i mproper 

payment and unknown payment N/A N/A N/A N/A N/A 

reduction target 

Reported an improper payment and 

unknown payment estimate of less than 

10% for each program for which an 

estimate was published in the N/A N/A N/A N/A N/A 

accompanying materials to the annual 

financial statement 

 

Because FCA was in compliance with the PIIA requirements, we did not have recommendations in 

this report. Management comments can be found in the subsequent section of the report. 

Management waived an exit conference. 

5 
ndum Fa rm 0 "edit Administration 

150 1 Farm Cr edit Drive 

McLean, VA 22102-5090 

(703) 883-4000 

Marnh 2], 2022 

To: 

From: 

Subj ect: 

Sonya, Ceme, AIG for Audirts, Inspections, and Evaluations 

FCA Office of Inspector General 

Sandra R. Waliters, Acting Chief Financial Officer Stii'idra.1!.. w~l+e;~ 

Office ofthe Ohief Financial Officer's Response to OIG's draft inspection report 

tit l!ed The Farm Credit Ad ministration's Compliance wirth the Payment I ntegrity 

Information Act of 2019 fo r Fiscal Year 2021 

This memorandum responds to the draft inspection report fro m the Office of th,e Inspector 

General dated March 4, 2022, titl'ed The Farm Credit Administration's Compliance with the 

Payment Integrity Information Act of.2019 for Fiscal Year 2021. The stated obj ective of the 

inspection was to determine irf the Farm Credit Ad ministration complied with the Payment 

Integrity Information Act of 2019 for Fiscal Year 202]. 

Thank you for the opportunirty to respond to this report. The Office of the Chief Financial 

Officer is committed to continuing to prevent improper payments, prepare annual improper 

payment risk assessments, and analyze programs for susceptibility to improper payments. 

MANAGEMENT COMMENTS 

6 
 

ACRONYMS 

CIGIE Council of the Inspectors General on Integrity and Efficiency 

FCA or Agency Farm Credit Administration 

FY Fiscal Year 

OCFO Office of the Chief Financial Officer 

OMB U.S. Office of Management and Budget 

OIG Office of Inspector General 

PAR Performance and Accountability Report 

PIIA Payment Integrity Information Act of 2019 

System Farm Credit System 

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Credit Administration 

Office of Inspector General 

REPORT FRAUD, WASTE, ABUSE, & 

MISMANAGEMENT 

Fraud, waste, abuse, and mismanagement in government concerns

everyone: Office of Inspector General staff, FCA employees, Congress,

and the general public. We actively solicit allegations of any inefficient

and wasteful practices, fraud, and mismanagement related to FCA

programs and operations. You can report allegations to us in several 

ways: 

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.