Farm Credit Administration 

Office of Inspector General 

Semiannual Report to Congress 

October 1, 2019 – March 31, 2020 

 

FARM CREDIT ADMINISTRATION 

OFFICE OF INSPECTOR GENERAL 

SEMIANNUAL REPORT TO CONGRESS 

OCTOBER 1, 2019 – MARCH 31, 2020 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 October 1, 2019 through March 31, 2020. 

This reporting period was marked by the arrival of the novel coronavirus and the 

resulting global disruptions that have already impacted every aspect of our lives; from 

the way we conduct business to the way we relate to one another. As the world 

navigates this crisis, we at the FCA OIG are determined to provide FCA the same highquality oversight that has come to be expected of us. In order to limit the spread of the 

virus, and in accordance with governmentwide guidance, our office has implemented 

full-time telework for all OIG personnel. I can report that remote computing capabilities 

have thus far enabled us to carry out our audit, inspection, evaluation, and investigation 

functions without undue inconvenience. 

We are similarly resolved to support the efforts of the Pandemic Response 

Accountability Committee that was recently established by the Coronavirus Aid, Relief, 

and Economic Security Act. Comprised of members of the Inspector General 

community, the committee is tasked with conducting and supporting oversight of the 

two trillion dollars in funds appropriated to address the results of the pandemic. 

Notwithstanding the pandemic, the past six months saw the OIG’s audit, inspection, 

evaluation, and investigative functions continue to provide oversight at the same pace 

and high quality seen in past reporting periods. One highlight of the reporting period 

was an audit of FCA’s criminal referral and follow-up process, which identified several 

opportunities for the Agency to improve the storage and analysis of information 

received regarding potentially criminal conduct impacting the Farm Credit System. Our

office also conducted an annual evaluation of FCA’s information technology security 

program and oversaw an audit of the Agency’s financial statements, timely meeting 

statutory reporting requirements. 

I am also pleased to report that an external peer review of our inspection and evaluation 

program found our policies, procedures, and reports to be compliant with the Council 

of the Inspectors General on Integrity and Efficiency’s (CIGIE) Quality Standards for 

Inspection and Evaluation (Blue Book). In another highlight of the reporting period, our 

investigative program reviewed all complaints in a timely manner and acted upon them 

in expeditious fashion. These and other OIG oversight activities continue to add value 

and transparency to FCA programs and operations. 

Our office continued to participate extensively in the Inspector General community 

during this reporting period. As the Vice Chair of CIGIE’s Inspection and Evaluation (I&E) 

Committee, I am happy to note that FCA OIG personnel have contributed significantly 

to the efforts of the I&E Committee working group updating the Blue Book. 

Finally, during this reporting period our office established an Enterprise Risk 

Management (ERM) program. By identifying, measuring, and monitoring the range of 

risks facing the OIG, the ERM program will enable us to lead by example, improve our 

planning efforts, reduce the chance of disruptive events, safeguard OIG values, and 

better identify opportunities to add value to FCA. The ERM program has been tailored 

to our mission, regulatory environment, strategic plan, size, and tolerance for risk. 

i Farm Credit Administration | Office of Inspector General 
 

Accordingly, we expect to review and update the program regularly to ensure that our 

plan remains relevant and continues to mature. We trust that our ERM program will 

help guide us through these challenging times, as we strive to promote economy, 

efficiency, and effectiveness at FCA. 

Wendy R. Laguarda

Inspector General 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 ii 
 

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 

ERM Enterprise Risk Management 

Farmer Mac Federal Agricultural Mortgage Corporation 

FCA (or Agency) Farm Credit Administration 

FISMA Federal Information Security Modernization Act of 2014 

FY Fiscal Year 

GAO U.S. Government Accountability Office 

HRK Harper, Rains, Knight & Company, P.A. 

I&E Inspection and Evaluation 

IG Inspector General 

IG Act Inspector General Act of 1978, as amended 

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 

iii Farm Credit Administration | Office of Inspector General 
Semiannual Report to Congress | October 1, 2019 – March 31, 2020 iv 

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

Acronyms & Abbreviations ................................................................................................................... iii

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

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

Audits, Inspections, and Evaluations .................................................................................................. 4

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

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

Outreach, Collaboration, & Other Initiatives ................................................................................. 12

Appendix I: Peer Reviews ...................................................................................................................... 14

Appendix II: Reports Issued ................................................................................................................. 16

Appendix III: Reports with Questioned Costs ............................................................................... 17

Appendix IV: Reports with Funds For Better Use......................................................................... 18

Appendix V: Open Recommendations ............................................................................................ 19

ONTENTS

Index of Reporting Requirements ..................................................................................................... 21 C ABLE OF 

T
 

 

 

 

 

 

 

 

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,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. 

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. 

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. 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 2 
 

 

 

 

 

STRATEGIC 

PLAN 

In September 2019, the OIG adopted a 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 

3 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 2020 and 2021. 

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 three reports and made nine recommendations for corrective action 

during the reporting period. The reports are summarized below. 

Audit of the Farm Credit Administration’s Financial Statements 

Fiscal Year 2019 

A-19-FS 

Under the Accountability of Tax Dollars Act of 2002,3 FCA is required each year to 

submit audited financial statements to Congress and the U.S. Office of Management 

and Budget (OMB). For FY 2019, the OIG engaged Harper, Rains, Knight & Company, 

P.A. (HRK), to audit FCA’s financial statements. The OIG monitored the work of HRK to 

ensure compliance with OMB guidance and the GAO Yellow Book. 

HRK concluded its audit in November 2019, issuing an unmodified opinion signifying 

that the financial statements present fairly, in all material respects, FCA’s financial 

position as of September 30, 2019 and 2018, and its net cost of operations, changes in 

net position, and budgetary resources, in accordance with generally accepted 

accounting principles. 

The HRK auditors considered FCA’s internal control over financial reporting as a basis 

for designing audit procedures for the purpose of expressing an opinion on the 

financial statements. The auditors did not express an opinion on the effectiveness of 

3 Pub. L. 107-289 (Nov. 7, 2002). 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

those internal controls; however, they did not identify any deficiencies considered to 

be a material weakness. 

Additionally, HRK auditors performed tests of FCA’s compliance with selected 

provisions of laws and regulations that would have a direct and material effect on the 

financial statements. While they did not express an opinion on compliance with those 

provisions, they did not identify any reportable instances of noncompliance or other 

matters required to be reported under the Yellow Book or relevant OMB guidance. 

The audit report was issued to the FCA Board on November 13, 2019. 

2019 Evaluation of the Farm Credit Administration’s Compliance with the

Federal Information Security Modernization Act

E-19-01 

Information technology (IT) facilitates and impacts all aspects of FCA operations. As

such, securing Agency IT systems against cybersecurity threats and efficiently 

addressing IT requirements are vital to the fulfillment of FCA’s statutory mission. 

Consequently, the OIG has consistently recognized IT as a top management challenge 

facing the Agency. The Federal Information Security Modernization Act of 2014 

(FISMA)4 affords the OIG an opportunity to annually assess FCA’s progress in meeting 

this ever-evolving challenge. 

FISMA requires OIGs to evaluate their respective agency’s information security program 

and practices. In accordance with guidance developed by OMB and the 

U.S. Department of Homeland Security, the OIG assesses FCA’s performance with 

respect to eight domains: risk management, configuration management, identity and 

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

continuous monitoring, incident response, and contingency planning. With respect to 

each domain, the OIG ranked FCA’s effectiveness according to a 5-level maturity model 

ranging from “ad-hoc” (at level 1) to “optimized” (at level 5). “Managed and 

measurable” (level 4) is considered to be an effective level of security. 

Overall, the OIG found FCA’s information security program to be effective, even as it 

continues to mature. While most of the domains assessed were determined to be 

“managed and measurable,” three fell short of that level. Specifically, the OIG found 

FCA’s information security continuous monitoring and identity and access management 

programs to be “consistently implemented” (level 3) and the Agency’s data protection 

and privacy program to be “ad-hoc” (level 1). 

The OIG made two recommendations for corrective action, which were agreed to by 

FCA. 

The evaluation report was issued to the FCA Board on October 30, 2019. 

4 Pub. L. 113-283 (Dec. 18, 2014). 

5 Farm Credit Administration | Office of Inspector General 
 

 

 

 

 

 

 

 

 

 

 

Farm Credit Administration’s Criminal Referral Process 

A-19-03 

Effective examination and supervision help ensure that System institutions operate 

safely and soundly, comply with relevant laws, and remain 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 important aspect of this program is how the Agency 

responds to potential crimes involving System institutions. Beyond the harm inflicted 

upon the victim institution, these criminal violations threaten to undermine confidence 

in the System as a whole. 

In recognition of the threat posed by the risk of criminal activity, FCA has promulgated 

regulations requiring System institutions to exercise due diligence in the discovery,

investigation, and reporting of criminal activity. Institutions must report known or

suspected criminal violations of the U.S. Code involving assets, operations, or affairs of 

an institution to the cognizant U.S. Attorney, to other appropriate law enforcement 

agencies, and to FCA. To facilitate compliance with this reporting requirement, FCA has 

created a referral form, on which institutions are instructed to provide pertinent details 

of the known or suspected crime. 

The objective of the audit was to determine whether FCA’s criminal referral and followup process is effective and efficient. The audit found that the Agency designed 

processes to enable examination staff to access criminal referral information that could 

assist in safety and soundness reviews. FCA staff communicate issues and concerns 

amongst various offices. FCA designed and implemented certain controls over the 

collection and storage of criminal referrals, and documentation showed that FCA 

evaluated criminal referral information. FCA is also working on guidance clarifying the 

criminal referral regulations. The draft guidance is formatted as a frequently asked 

questions document describing FCA’s process and expectations for criminal referrals. 

While the Agency has implemented a process, the OIG identified opportunities to 

improve the overall effectiveness and efficiency of the Agency’s collection, storage, and 

analysis of criminal referrals. The audit found there was limited documentation on FCA’s 

handling of the information once received and the procedures for handling the referrals 

were not fully documented. 

OIG auditors also looked at how FCA stores the information submitted to the Agency 

through the criminal referral form. Such forms often contain sensitive information 

regarding potential criminal suspects, including personally identifiable information. The 

OIG found that FCA needed to improve the criminal referral storage process to limit 

access to, and storage of, sensitive information. The Agency also had not documented 

a Privacy Impact Assessment related to criminal referral information, and the relevant 

Privacy Act System of Records Notice was outdated. 

The OIG also analyzed a sample of recent criminal referrals received by the Agency. 

Auditors focused specifically on information including the number of System 

institutions filing referrals, types of potential criminal violations alleged, potential losses 

to the institutions, as well as insider cases. The OIG identified opportunities for the 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 6 
Table 1 

Report Recommendation 

2019 Evaluation of the 1 We recommend the Office of Information 

Farm Credit 

Administration’s 

Technology complete its update of Policies and 

Procedures Manual Section 902, Computer Security 

Compliance with the 

Federal Information 2 

Program. 

We recommend the Office of Information 

Security Modernization 

Act 

Technology update the Information Security 

Continuous Monitoring Strategy, including the 

transition to ongoing security control assessments 

and authorizations and development of

performance measures. 

Farm Credit 1 We recommend the Office of General Counsel 

Administration’s Criminal 

Referral Process 

update internal policies and procedures on the 

handling and processing of criminal referral forms

received from the Farm Credit System. 

2 We recommend the Office of General Counsel, in 

conjunction with the Office of Information 

Technology, complete a Privacy Impact Assessment

and update the System of Records Notice for 

criminal referrals. 

3 We recommend the Office of Examination 

document the Risk Supervision Division’s 

responsibilities for reviewing and initiating actions 

on criminal referrals and other types of reviews 

performed on criminal referral forms. 

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. 

Agency to improve its analytical capabilities and better educate institutions on criminal 

activity in the System. 

The OIG made seven recommendations in the report. FCA concurred with all of the 

recommendations. 

The audit report was issued to the FCA Board on March 12, 2020. 

Recommendations Made During the Reporting Period 

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

period. 

7 Farm Credit Administration | Office of Inspector General 
Report Recommendation 

Farm Credit 

Administration’s Criminal 

Referral Process 

5 We recommend the Office of Examination, in 

conjunction with other applicable offices, analyze 

whether additional resources are needed to 

(continued) educate System institutions on criminal activity in

the System, trends, and other valuable information. 

6 We recommend the Office of Information 

Technology add fields to the internal criminal 

referral listing for amount of potential loss to the 

institutions and whether an insider was involved to 

increase efficiency in analyzing data. 

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. 

In Progress 

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

reporting period. 

FCA’s Implementation of Diversity and Inclusion Efforts 

FCA’s Office of Equal Employment Opportunity and Inclusion manages and directs the 

Agency’s diversity, inclusion, and equal employment opportunity program. This 

ongoing inspection will analyze the Agency’s implementation of diversity and inclusion 

efforts, focusing on the follow-up to a fairness and inclusiveness assessment that was 

conducted of the Agency in 2017 and 2018. 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 8 
I NS OITIGATSENV

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, 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 Number 

Investigative reports issued5 0 

Persons referred to the U.S. Department of Justice for criminal 0 

prosecution 

Persons referred to state and local prosecuting authorities for criminal 0 

prosecution 

Indictments and criminal informations that resulted from any prior 0 

referral to prosecuting authorities 

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 accepts complaints by mail and in-person. Table 3 shows the

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

 

Table 3 

Action Taken Number 

Investigation opened 1 

Closed after preliminary review 8 

Referred within FCA, involving borrower complaints or allegations of 4 

loan fraud 

Referred to other federal agencies, involving matters outside of FCA OIG 5 

jurisdiction 

Under review at the end of the reporting period 1 

Total 19 

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

memorializing the referral of complaints or closure of preliminary reviews. 

9 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 

certain such reviews that were completed during the reporting period. 

Management Challenges 

In accordance with the Reports Consolidation Act of 2002,6 the OIG annually prepares 

a statement summarizing what the IG considers to be the most serious management 

and performance challenges facing FCA. The statement also assesses the Agency’s 

progress in meeting those challenges and highlights relevant OIG oversight work. 

For FY 2019, the OIG highlighted five challenges facing the Agency. Four of these were 

previously identified as challenges in prior years’ reports: 

Examination and Supervision Program: Identifying and addressing risks in the 

System through effective examination and supervision to ensure it remains safe 

and sound. 

Information Technology: Leveraging investments in information technology 

while maintaining a secure environment. 

Human Capital: Maintaining a well-trained, sustainable workforce while facing 

challenges in retirement eligibilities, workforce retention, and diversity. 

Secondary Market Oversight: Providing effective and impartial oversight of 

Farmer Mac through FCA’s Office of Secondary Market Oversight. 

Newly recognized in FY 2019, the fifth challenge recognizes the ever-growing role of 

data in FCA policymaking, as reflected by the Agency’s establishment of the Office of 

Data Analytics and Economics in November 2019: 

Data Quality and Analysis: Obtaining consistent, quality data vital to FCA's 

mission to ensure the System remains a dependable source of credit for 

agriculture and rural America. 

The report was issued to the FCA Board on October 7, 2019. FCA management’s

response can be found in the Agency’s FY 2019 Performance and Accountability Report. 

2020 Risk Assessment of the 

Farm Credit Administration’s Charge Card Program 

In accordance with the Government Charge Card Abuse Prevention Act of 20127 and 

implementing OMB guidance, the OIG conducts periodic risk assessments of FCA

charge card programs to analyze the risk of illegal, improper, or erroneous purchases. 

The OIG’s 2020 assessment focused on oversight and control of the purchase card 

program, the travel card program, and the use of a centrally billed account. The OIG 

6 Pub. L. 106-531 (Nov. 22, 2000). 7 Pub. L. 112-194 (Oct. 5, 2012). 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 10 
 

 

 

 

 

 

concluded that the overall risk of FCA’s charge card programs was low based on the 

calculated risks’ impact and likelihood. 

The assessment was issued to FCA’s Office of Agency Services on March 2, 2020. 

Survey of Farm Credit System Institutions

Regarding the Agency’s Examination Function 

Each quarter, the OIG surveys recently examined System institutions on 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 as well as to call the OIG with any concerns. The OIG collects, 

aggregates, and anonymizes survey responses for distribution to the FCA Board and 

Chief Examiner semiannually. 

The OIG issued a survey report on March 31, 2020, detailing responses from System 

institutions examined during the second half of FY 2019. The report also provided 

cumulative survey data for the entirety of FY 2019. 

11 Farm Credit Administration | Office of Inspector General 
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. 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 governmentwide. 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 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. 

The IG served throughout the reporting period as the Vice Chair of the CIGIE Inspection 

and Evaluation (I&E) Committee. Headed by U.S. Department of State IG Steve Linick, 

the I&E 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. During the reporting period, the 

AIGAIE co-led an I&E Committee working group focused on the revision of the CIGIE 

Blue Book. 

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 I&E roundtable, 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. 

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 and abuse. 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 12 
 

 

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

including the Integrity Committee Transparency Act of 2019, proposed amendments to 

IG reporting requirements, and a modified system of records notice concerning FCA 

employee attendance, leave, and payroll records. 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. Toward this end, 

in March 2020, the OIG established an internal Enterprise Risk Management (ERM) 

program. ERM is an approach to addressing the full spectrum of an organization’s 

significant risks by considering the combined array of risks as an interrelated portfolio, 

rather than addressing risks only within silos. Crafted in accordance with OMB, GAO, 

and CIGIE guidance, the ERM program has been tailored to the OIG’s statutory mission, 

regulatory environment, strategic plan, size, and tolerance for risk. The program, which 

will be reviewed and updated to ensure its relevance, promises to guide the OIG as it 

provides oversight of FCA programs and operations. 

This reporting period also saw OIG staff work with the FCA records officer and personnel 

from the National Archives and Records Administration on an update of the OIG’s 

records retention schedule. The updated schedule is expected to be finalized soon, after 

it has undergone public comment. 

13 Farm Credit Administration | Office of Inspector General 
 

 

 

 

 

 

 

 

 

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 our website. 

Reports of peer reviews conducted by our office 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 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 I&E work. 

During the reporting period, a team composed of personnel from the U.S. Equal 

Employment Opportunity Commission and U.S. Department of the Treasury OIGs 

completed a review of the FCA OIG’s I&E function. The review team determined that 

FCA OIG I&E policies and procedures met all Blue Book standards addressed in the 

review. The review team also found that the reviewed FCA OIG I&E reports adhered to 

internal policies and procedures and Blue Book standards. There were no 

recommendations for corrective action. The final report was issued on December 17, 

2019. 

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 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 14 
 

 

 

 

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. 

15 Farm Credit Administration | Office of Inspector General 
APPENDIX II: 

REPORTS ISSUED 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 16 

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 

Audit of the Farm Credit $0 $0 $0 

Administration’s Financial 

Statements 

Fiscal Year 2019 

2019 Evaluation of the $0 $0 $0 

Farm Credit 

Administration’s 

Compliance with the 

Federal Information 

Security Modernization Act 

Farm Credit $0 $0 $0 

Administration’s Criminal 

Referral Process 

Total $0 $0 $0 
APPENDIX III: 

REPORTS WITH 

QUESTIONED 

COSTS 

17 Farm Credit Administration | Office of Inspector General 

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 

0 

0 

$0 

$0 

$0 

$0 

Subtotal (A+B) 0 $0 $0 

(C) Reports for which a management decision 

was made during the reporting period, 

including— 

0 

(i) the dollar value of recommendations that 

were agreed to by management 

$0 

$0 

$0 

$0 

(ii) the dollar value of recommendations that 

were not agreed to by management 

$0 $0 

(D) Reports for which no management

decision has been made by the end of the 

reporting period 

0 $0 $0 
APPENDIX IV: 

REPORTS WITH 

FUNDS 

FOR 

BETTER 

USE 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 18 

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 

0 

0 

$0 

$0 

Subtotal (A+B) 0 $0 

(C) Reports for which a management decision was made 

during the reporting period, including— 

0 

(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 
APPENDIX V: 

OPEN 

RECOMMENDATIONS 

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

reports issued before October 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 for which no comment was returned within 60 days. 

Table 7 

Report 

Outstanding

Unimplemented

Recommendations 

Aggregate

Potential Cost 

Savings 

FCA’s Stress Testing Guidance, and Use 

of Data and Analytical and Examination 

Tools 

1 $0 

(September 19, 2019) 

OIG 2018 Evaluation of the Farm Credit 3 $0 

Administration’s Compliance with the 

Federal Information Security

Modernization Act 

(October 31, 2018) 

Total: 4 $0 

Tables 8 identifies recommendations made during previous reporting periods for which 

corrective action had not been completed as of March 31, 2020. 

19 Farm Credit Administration | Office of Inspector General 

Table 8 

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. 
Report Recommendation 

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. 

Semiannual Report to Congress | October 1, 2019 – March 31, 2020 20 
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 12-13 

5(a)(1) Significant problems, abuses, and deficiencies 4-7 

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

5(a)(3) Recommendations described in previous semiannual 19-20 

reports for which corrective action has not been completed 

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

5(a)(5) Reports of information or assistance unreasonably refused None 

or not provided 

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

5(a)(7) Summaries of significant reports 4-7 

5(a)(8) Management decisions with respect to questioned costs 17 

5(a)(9) Management decisions on recommendations that funds be 18 

put to better use 

5(a)(10) Reports issued before the reporting period for which no 19 

management decision has been made, for which no 

comment was returned, and for which there are 

outstanding unimplemented recommendations 

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

5(a)(12) Significant management decisions with which the IG None 

disagrees 

5(a)(13) Information described under section 804(b) of the Federal None 

Financial Management Improvement Act of 1996 

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

5(a)(16) Peer reviews conducted by the FCA OIG 14-15 

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 None 

where allegations of misconduct were substantiated 

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 None 

the public 

5(a)(22)(B) Closed investigations involving a senior government None 

employee not disclosed to the public 

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 2008.8 

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

21 Farm Credit Administration | Office of Inspector General 

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.