The report accompanying these financial statements was issued by 

BDO USA, LLP, a Delaware limited liability partnership and the U.S. member 

of BDO International Limited, a UK company limited by guarantee. 

Farm Credit System Insurance 

Corporation

Audited Financial Statements

For the Years Ended December 31, 2020 and 2019
Farm Credit System Insurance Corporation

Contents

Independent Auditor’s Report F1 - F3

Financial Statements

Statements of Financial Condition F4

Statements of Income and Expenses and Changes in Insurance Fund F5

Statements of Cash Flows F6

Notes to the Financial Statements F7 - F12

Management’s Report on Internal Control Over Financial Reporting F13
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the 

international BDO network of independent member firms. 

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

F1 

Independent Auditor’s Report 

Board of Directors

Farm Credit System Insurance Corporation

McLean, Virginia

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the financial statements of the Farm Credit System Insurance Corporation 

(FCSIC), which comprise the statements of financial position as of December 31, 2020 and 2019, 

and the related statements of income and expenses and changes in Insurance Fund and cash flows 

for the years then ended, and the related notes to the financial statements. In our opinion, the 

accompanying financial statements present fairly, in all material respects, the financial position 

of the Farm Credit System Insurance Corporation as of December 31, 2020 and 2019, and the 

results of its operations and its cash flows of the years then ended in accordance with accounting 

principles generally accepted in the United States of America.

We have also audited FCSIC’s internal control over financial reporting as of December 31, 2020, 

based on criteria established in Internal Control – Integrated Framework (2013) issued by the 

Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our 

opinion, the Farm Credit System Insurance Corporation maintained, in all material respects, 

effective internal control over financial reporting as of December 31, 2020, based on the COSO 

criteria. 

Basis for Opinions 

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America (GAAS) and the standards applicable to financial audits contained in 

Government Auditing Standards issued by Comptroller General of the United States. Our 

responsibilities under those standards are further described in the Auditor’s Responsibilities for 

the Audits of the Financial Statements and Auditor’s Responsibilities for the Audit of Internal 

Control Over Financial Reporting sections of our report. We are required to be independent of 

the Farm Credit System Insurance Corporation and to meet our other ethical responsibilities, in 

accordance with the relevant ethical requirements relating to our audits. We believe that the 

audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 

opinions. 

Responsibilities of Management for the Financial Statements and Internal Control Over 

Financial Reporting

Management is responsible for the preparation and fair presentation of the financial statements 

in accordance with accounting principles generally accepted in the United States of America, and 

for the design, implementation, and maintenance of internal control relevant to the preparation 

and fair presentation of financial statements that are free from material misstatement, whether 

due to fraud or error. Management is also responsible for designing, implementing, and 

maintaining effective internal control over financial reporting and for its assessment about the 

8401 Greensboro Drive

Suite 800 

McLean, VA 22102 

Tel: 703-893-0600

Fax: 703-893-2766 

www.bdo.com 
F2 

effectiveness of internal control over financial reporting, included in the accompanying 

Management’s Report on Internal Control Over Financial Reporting. 

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about the FCISC’s 

ability to continue as a going concern within one year after the date that the financial statements 

are issued. 

Auditor’s Responsibilities for the Audit of the Financial Statements 

Our objectives are to obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error and to issue an 

auditor’s report that includes our opinion. 

Reasonable assurance is a high level of assurance, but is not absolute assurance, and therefore is 

not a guarantee that an audit conducted in accordance with GAAS and Government Auditing 

Standards will always detect a material misstatement when it exists. The risk of not detecting a 

material misstatement resulting from fraud is higher than for one resulting from error, as fraud 

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of 

internal control. Misstatements are considered material if there is a substantial likelihood that, 

individually or in the aggregate, they would influence the judgment made by a reasonable user 

based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards we: 

• Exercise professional judgment and maintain professional skepticism throughout the 

audits. 

• Identify and assess the risks of material misstatement of the financial statements, 

whether due to fraud or error, and design and perform audit procedures responsive to 

those risks. Such procedures include examining, on a test basis, evidence regarding the 

amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the financial statement audit in 

order to design audit procedures that are appropriate in the circumstances. 

• Evaluate the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluate the overall 

presentation of the financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the 

aggregate, that raise substantial doubt about the FCSIC’s ability to continue as a going 

concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control-related matters that we identified during the financial statement audit.

Auditor’s Responsibilities for Audit of Internal Control Over Financial Reporting

Our objectives are to obtain reasonable assurance about whether effective internal control over 

financial reporting was maintained in all material respects and to issue an auditor’s report that 

includes our opinion on internal control over financial reporting. Reasonable assurance is a high 
F3 

level of assurance but is not absolute assurance and therefore is not a guarantee that an audit of 

internal control over financial reporting conducted in accordance with GAAS will always detect a 

material weakness when it exists. 

In performing an audit of internal control over financial reporting in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the 

audit.

• Obtain an understanding of internal control over financial reporting relevant to the audit 

of internal control over financial reporting, assess the risks that a material weakness 

exists, and test and evaluate the design and operating effectiveness of internal control 

over financial reporting based on the assessed risk. 

Definition and Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, designed to provide reasonable assurance 

regarding the preparation of reliable financial statements in accordance with accounting 

principles generally accepted in the United States of America. An entity’s internal control over 

financial reporting includes those policies and procedures that (1) pertain to the maintenance of 

records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions 

of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as 

necessary to permit preparation of financial statements in accordance with accounting principles

generally accepted in the United States of America, and that receipts and expenditures of the 

entity are being made only in accordance with authorizations of management and those charged 

with governance; and (3) provide reasonable assurance regarding prevention, or timely detection 

and correction of unauthorized acquisition, use, or disposition of the entity’s assets that could 

have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements. Also, projections of any assessment of effectiveness to future 

periods are subject to the risk that controls may become inadequate because of changes in 

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Compliance and Other Matters Based on an Audit of Financial Statements

As part of obtaining reasonable assurance about whether the Farm Credit System Insurance 

Corporation’s financial statements are free from material misstatement, we performed tests of 

its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 

noncompliance with which could have a direct and material effect on the financial statements. 

However, providing an opinion on compliance with those provisions was not an objective of our 

audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no 

instances of noncompliance or other matters that are required to be reported under Government 

Auditing Standards. 

Potomac, Maryland

February 17, 2021
December 31, 2020 2019

Assets

 Cash and cash equivalents $ 664,600 $ 103,408

Investments in U.S. Treasury obligations 4,512,618 4,853,235

Premiums receivable 255,365 222,676

Accrued interest receivable 22,295 22,178

General property, plant, equipment, and software, net 25 44

Total assets $ 5,454,903 $ 5,201,541

Liabilities and Insurance Fund

Liabilities

Accounts payable and accrued expenses $ 649 $ 530

Total liabilities 649 530

Insurance Fund

Allocated Insurance Reserves Accounts (AIRAs) - 62,714

Unallocated Insurance Fund 5,454,254 5,138,297

Total Insurance Fund 5,454,254 5,201,011

Total liabilities and Insurance Fund $ 5,454,903 $ 5,201,541

See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

Statements of Financial Condition

(Dollars in thousands)

F4
Year-ended December 31, 2020 2019

Income

 Premiums $ 255,365 $ 222,676

Interest income 64,650 94,435

Total income 320,015 317,111

Expenses

Administrative operating expenses 4,058 3,899

Total expenses 4,058 3,899

Net income 315,957 313,212

Insurance Fund - beginning of year 5,201,011 4,953,860

Payments to AIRAs accountholders (62,714) (66,061)

Insurance Fund - end of year $ 5,454,254 $ 5,201,011

See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

Statements of Income and Expenses and Changes in Insurance Fund

(Dollars in thousands)

F5
Year-ended December 31, 2020 2019

Cash flows from operating activities

Net income $ 315,957 $ 313,212

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation 19 16

Net amortization and accretion of investments 11,012 (7,682)

Increase in premiums receivable (32,689) (10,152)

Increase in accrued interest receivable (117) (4,919)

Increase in accounts payable and accrued

expenses 119 163

Net cash provided by operating activities 294,301 290,638

Cash flows from investing activities

Payments for purchase of U.S. Treasury obligations (1,866,956) (3,206,617)

Proceeds from maturity of U.S. Treasury obligations 2,196,561 2,797,681

Net cash provided by (used in) investing activities 329,605 (408,936)

Cash flows from financing activity

Payment to AIRAs accountholders (62,714) (66,061)

Net cash used in financing activity (62,714) (66,061)

Net change in cash and cash equivalents 561,192 (184,359)

Cash and cash equivalents, beginning of year 103,408 287,767

Cash and cash equivalents, end of year $ 664,600 $ 103,408

See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

 Statements of Cash Flows

(Dollars in thousands)

F6
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F7

Note 1: Organization and Summary of Significant Accounting Policies

Farm Credit Insurance Fund (Insurance Fund): Statutory Framework

The Agricultural Credit Act of 1987 established the Farm Credit System Insurance Corporation (the 

Corporation or FCSIC) for the purpose of ensuring the timely payment of principal and interest on 

notes, bonds, debentures, and other obligations issued under subsection (c) or (d) of section 4.2 of 

the Farm Credit Act of 1971, as amended (the Farm Credit Act). Each bank in the Farm Credit System 

(System) participating in insured obligations is an insured System bank. At December 31, 2020 and 

2019, there were four insured System banks and 68 direct lender associations.

The Corporation is managed by a board of directors consisting of the same individuals as the Farm 

Credit Administration (FCA) board except that the chairman of the FCA board may not serve as the 

chairman of the Corporation's board of directors.

The Corporation must spend amounts in the Insurance Fund necessary to insure the timely payment 

of interest and principal on insured obligations. The Corporation, in its sole discretion, is authorized 

to expend amounts to provide financial assistance to System banks and direct lender associations. 

The Corporation may also act as receiver or conservator of a System bank or association. The 2018 

Farm Bill also provided authority for FCSIC to create, and the Farm Credit Administration to charter, 

a System bridge bank, to assist with resolving a failed bank.

As of December 31, 2020, the System banks reported amounts totaling $323 billion of insured 

obligations compared to $294 billion as of December 31, 2019. 

If the Corporation does not have sufficient funds to ensure payment on insured obligations, System 

banks will be required to make payments under joint and several liability, as required by section 

4.4 (a)(2) of the Farm Credit Act. The insurance provided by the Insurance Fund is limited to the 

resources in the Insurance Fund. System obligations are not guaranteed by the U.S. government.

Under section 5.63 of the Farm Credit Act, the Corporation is exempt from all Federal, state, and 

local taxes with the exception of real property taxes.

Note 2: Basis of Accounting 

The accounting and reporting policies of the Corporation conform to accounting principles generally 

accepted in the United States of America (GAAP) and, as such, the financial statements have been 

prepared using the accrual basis of accounting.

Cash and Cash Equivalents

Cash and cash equivalents include investments in U.S. Treasury obligations with original maturities 

of 90 days or less. At December 31, 2020, the Corporation held $664.3 million in overnight Treasury 

certificates maturing on January 4, 2021, with an interest rate of 0.06 percent, and $309.7 thousand 

in cash. At December 31, 2019, the Corporation held $103.2 million in overnight Treasury 

certificates maturing on January 2, 2020, with an interest rate of 1.51 percent, and $200 thousand 

in cash.
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F8

Investments in U.S. Treasury Obligations

Section 5.62 of the Farm Credit Act requires that funds of the Corporation, not otherwise employed, 

shall be invested in obligations of the United States or in obligations guaranteed as to principal and 

interest by the United States. The Corporation has classified its investments as held-to-maturity in 

accordance with Financial Accounting Standards Board Accounting Standards Codification 320, 

Investments - Debt and Equity Securities and carries them at amortized cost. Amortization of 

premium and accretion of discount on investments has been computed under the interest method 

since 2002. Fair value of investments is estimated based on quoted market prices for those or similar 

instruments.

Premium Receivable – Concentration of Credit Risk

The Farm Credit Act requires that the System banks pay premiums to FCSIC. The premium receivable 

balance consists of amounts due from the four System banks and as such is exposed to risks due to 

concentration. Historically, FCSIC has not experienced any losses related to the premium receivable 

balance. FCSIC performs a quarterly analysis related to estimating an allowance for premium 

receivable which continues to indicate that no allowance is warranted.

Liability for Estimated Insurance Obligations

The liability for estimated insurance obligations is the present value of estimated probable insurance 

payments to be made in the future based on the Corporation's analysis of economic conditions of 

insured System banks.

The insured System banks' primary lending markets are borrowers engaged in farming, ranching, and 

producing or harvesting of aquatic products, and their cooperatives. Financial weaknesses in these 

market segments and the effect of general market conditions on the System's borrowers could 

adversely affect the banks' financial condition and profitability. Insured System banks also face risks 

from changing interest rate environments and the need to maintain ongoing access to financial 

markets. Adverse changes in the financial condition and profitability of insured System banks 

resulting from increased levels of credit, financial, or other risks could occur in the future which 

would require a liability for estimated insurance obligations to be recorded.

The Corporation actively monitors the creditworthiness and financial condition of the insured 

System banks. Management is not aware of any events or circumstances at this time which would 

require a liability for estimated insurance obligations to be recorded at December 31, 2020.

Premiums

Annual premiums are recorded as revenue during the 12-month calendar year period on which the 

premiums are based. All premiums are required to be paid to FCSIC on or before January 31st of the 

year subsequent to the year in which they are earned.

Use of Estimates

The preparation of financial statements, in conformity with GAAP, requires management to make 

estimates and assumptions that affect the reported amount of assets and liabilities and disclosure 

of contingent assets and liabilities at the date of the financial statements and the reported amount 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F9

of revenues and expenses during the reporting period. Actual results could differ from those 

estimates.

Note 3: Investments in U.S. Treasury Obligations

In addition to the amounts referenced in Note 2, Cash and Cash Equivalents, at December 31, 2020 

and 2019, investments in U.S. Treasury obligations, which are carried at amortized cost, consisted 

of the following:

Amortized

Gross 

Unrealized

Gross 

Unrealized Estimated 

(Dollars in thousands) Cost Gains Losses Fair Value

December 31, 2020

U.S. Treasury obligations $ 4,512,618 $ 75,569 $ (183) $ 4,588,004

December 31, 2019

U.S. Treasury obligations $ 4,853,235 $ 15,375 $ (2,880) $ 4,865,730

The amortized cost and estimated fair value of U.S. Treasury obligations at December 31, 2020, by 

contractual maturity, are shown below:

(Dollars in thousands)

Amortized 

Cost

Estimated 

Fair Value

Due in one year or less $ 2,748,618 $ 2,756,606

Due after one year through five years 1,764,000 1,831,398

$ 4,512,618 $ 4,588,004

The Corporation follows GAAP for measuring, reporting, and disclosing fair value. These standards 

apply to all assets and liabilities that are measured, reported, and/or disclosed on a fair value basis. 

The fair value of FCSIC's investments in U.S. Treasury obligations are estimated based on quoted 

market prices for those instruments.

Note 4: Premiums, the Secure Base Amount and Excess Insurance Fund Balances 

Each System bank which issues insured obligations under subsection (c) or (d) of section 4.2 of the 

Farm Credit Act is an insured System bank and is required to pay premiums to the Corporation.

The Farm Credit Act requires FCSIC to assess premiums based on each bank's pro rata share of 

insured debt (rather than on individual loans). FCSIC may collect from 0 to 20 basis points annually 

on adjusted insured debt outstanding. The Farm Credit Act also authorizes a risk surcharge of up to 

10 basis points on nonaccrual loans and on other-than-temporarily impaired investments. The Farm 

Credit Act reduces the total insured debt on which premiums are assessed by 90 percent of Federal 

government-guaranteed loans and investments and 80 percent of state government-guaranteed 

loans and investments and deducts similar percentages of such guaranteed loans and investments 

when calculating the secure base amount (SBA). 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F10

The Farm Credit Act sets a secure base amount (SBA) for the Insurance Fund to achieve. The 

statutory SBA is equivalent to 2 percent of the aggregate outstanding insured obligations of all 

insured System banks (adjusted downward by a percentage of the guaranteed portions of principal 

outstanding on certain government-guaranteed loans and investments) or such other percentage as 

determined by the Corporation in its sole discretion to be actuarially sound to maintain in the 

Insurance Fund taking into account the risk of insuring outstanding insured obligations. 

Insurance premium rates are reviewed semiannually. For 2020, the board of directors set premium 

rates at its January 30, 2020 meeting at 8 basis points on average adjusted insured debt and 

continued the assessment of the 10 basis point surcharge on the average principal balance 

outstanding for nonaccrual loans and other-than-temporarily impaired investments. The board of 

directors again reviewed premiums at its June 25, 2020 meeting and voted to increase the premium 

accrual rate on average adjusted insured debt to 11 basis points and continued the assessment of 

the 10 basis point surcharge on the average principal balance outstanding for nonaccrual loans and 

other-than-temporarily impaired investments for the remainder of 2020. In 2020, outstanding 

insured obligations increased by $28.6 billion (9.7 percent). At December 31, 2020, the total 

Insurance Fund was 1.93 percent of adjusted insured obligations.

For 2019, the board of directors set premium rates at its January 17, 2019 meeting at 9 basis points 

on average adjusted insured debt and continued the assessment of the 10 basis point surcharge on 

the average principal balance outstanding for nonaccrual loans and other-than-temporarily impaired 

investments. The board of directors again reviewed premiums at its June 13, 2019 meeting and 

voted to maintain the premium accrual rate on average adjusted insured debt at 9 basis points and 

continued the assessment of the 10 basis point surcharge on the average principal balance 

outstanding for nonaccrual loans and other-than-temporarily impaired investments for the 

remainder of 2019. In 2019, outstanding insured obligations increased by $11.8 billion (4.2 percent). 

At December 31, 2019, the total Insurance Fund was 2.03 percent of adjusted insured obligations.

The Farm Credit Act requires if, at the end of any calendar year, the aggregate of the amounts in 

the Insurance Fund exceed the SBA, the Corporation is required to allocate to the Allocated 

Insurance Reserves Accounts (AIRAs) any excess balances less the amount that the Corporation, in 

its sole discretion, determines to be the sum of the estimated operating expenses and estimated 

insurance obligations of the Corporation for the immediately succeeding calendar year.

The total Insurance Fund did not exceed the 2 percent SBA at December 31, 2020, and there were

no allocations to the Farm Credit System banks for AIRAs. As the total Insurance Fund exceeded the 

2 percent SBA at December 31, 2019, there was an allocation of $62.7 million to the Farm Credit 

System banks AIRAs.

The AIRAs' balances are recorded as part of the Insurance Fund until approved for payment by the 

Corporation's board of directors. AIRAs’ balances may be used to absorb any insurance losses and 

claims. Furthermore, the board of directors has discretion to limit or restrict the AIRAs’ payments. 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F11

Note 5: Operating Lease

The Corporation is committed under a ten-year lease with the FCS Building Association for office 

space expiring on November 30, 2025. The Corporation recorded lease expense (including operating 

cost assessments) of $150 thousand and $147 thousand for 2020 and 2019, respectively. The 

following is a schedule by year of the future minimum lease payments required under this lease as 

of December 31, 2020:

Years ending December 31,

(Dollars in thousands)

2021 $ 151

2022 155

2023 158

2024 161

2025 150

$ 775

Note 6: Line of Credit

On September 24, 2013, the Corporation entered into an agreement with the Federal Financing Bank 

(the FFB), a United States government corporation subject to the supervision and direction of the 

U.S. Treasury. Pursuant to this agreement, the FFB may advance funds to the Corporation when 

exigent market circumstances make it extremely doubtful that insured System banks will be able to 

pay maturing debt obligations. The Corporation will in turn use the funds advanced by the FFB to 

provide assistance to the System banks until market conditions improve. The agreement provides 

for a short-term revolving credit facility of up to $10 billion, renewable annually and terminating 

on September 30, 2021, unless otherwise further extended.

Under the agreement, each provision of funds by the FFB is subject to certain terms and conditions. 

The interest rate for each advance will be established by the FFB at the time the respective advance 

is made. Each advance cannot have a maturity date longer than twelve months and the maturity 

date cannot be later than the final termination date of the agreement.

The Corporation paid no commitment fee to secure this line of credit. There were no amounts drawn 

on this line of credit during 2020 and 2019.

Note 7: Retirement Plan

All permanent Corporation employees are covered by the Federal Employees Retirement System 

(FERS). The Corporation's contribution was 16.0 percent of base pay for the first nine months of 

2020 and 17.3 percent for the last three months of 2020. The Corporation’s contribution to the FERS

plan during 2019 was 13.7 percent of base pay for the first nine months of 2019 and 16.0 percent 

for the last three months of 2019. In addition, the Corporation automatically contributes 1 percent 

of base pay to the employee's Thrift Savings Plan account, matches the first 3 percent contributed 

by the employee, and matches one-half of the next 2 percent contributed by the employee. In 2015, 

the Corporation began a 401K plan for employees. The Corporation automatically contributes 1
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F12

percent of base pay to the employee's 401K account and matches the first 2 percent contributed by 

the employee. Retirement plan expenses amounted to $489 thousand in 2020 and $434 thousand in 

2019.

Note 8: Related Parties

The Corporation purchases services from FCA under an Interagency Agreement, including 

examination and administrative support services. The intention of the parties as stated in the 

agreement is that specified rates and fees will reimburse the party providing services for all 

reasonable costs associated with provision of the services. The Corporation purchased services for 

2020 which totaled $379 thousand, compared with $366 thousand for 2019.

The Corporation may also provide services to the FCA under an Interagency Agreement; however, 

the Corporation provided no services and recognized no revenue for 2020 and 2019. At December 31, 

2020 and 2019, the Corporation did not have any receivables from the FCA.

Note 9: Risk and Uncertainties Related to COVID-19 

In early 2020, an outbreak of the novel strain of coronavirus (COVID-19) emerged globally. As a 

result, there have been mandates from federal, state and local authorities resulting in an overall 

decline in economic activity. The effect of the COVID-19 pandemic on the overall financial 

performance of the System has been limited. The financial performance of the System was strong 

during 2020 and the overall credit quality of its customers remained relatively consistent with the 

prior year. Consequently, the impact of the COVID-19 pandemic on the Insurance Fund has also been 

limited and the likelihood of a loss to the Insurance Fund related to the COVID-19 pandemic appears 

remote in the near-term.

For 2021, the extent to which the COVID-19 pandemic impacts the System, including the insured 

System banks, depends on future developments that remain highly uncertain and cannot be 

predicted. Any impact on the System could impact the Insurance Fund. Management will continue 

to actively monitor the financial condition of the System. 

Note 10: Subsequent Events

FCSIC evaluated subsequent events from the date of the statement of financial condition through 

February 17, 2021, the date at which FCSIC’s financial statements were issued. No material 

subsequent events were identified for either recognition or disclosure.
F13

Management's Report on Internal Control Over Financial Reporting

The Farm Credit System Insurance Corporation's (FCSIC) internal control over financial reporting is 

a process effected by those charged with governance, management, and other personnel, designed 

to provide reasonable assurance regarding the preparation of reliable financial statements in 

accordance with generally accepted accounting principles in the United States of America. Our 

internal control over financial reporting includes those policies and procedures that (1) pertain to 

the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions 

and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as 

necessary to permit preparation of financial statements in accordance with generally accepted 

accounting principles and that receipts and expenditures of FCSIC are being made only in accordance 

with authorizations of FCSIC management and those charged with governance; and (3) provide 

reasonable assurance regarding prevention, or timely detection and correction, of unauthorized 

acquisition, use, or disposition of FCSIC's assets that could have a material effect on our financial 

statements.

Management of FCSIC is responsible for designing, implementing, and maintaining effective internal 

control over financial reporting. Management assessed the effectiveness of FCSIC's internal control 

over financial reporting as of December 31, 2020 using the criteria established in the Internal 

Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the 

Treadway Commission (COSO). Based on that assessment, management concluded that as of 

December 31, 2020, FCSIC's internal control over financial reporting is effective, based on the COSO 

criteria.

Internal control over financial reporting has inherent limitations. Internal control over financial 

reporting is a process that involves human diligence and compliance and is subject to lapses in 

judgement and breakdowns resulting from human failures. Internal control over financial reporting 

also can be circumvented by collusion or improper management override. Because of its inherent 

limitations, internal control over financial reporting may not prevent, or detect and correct, 

misstatements. Also, projections of any assessment of effectiveness to future periods are subject 

to the risk that controls may become inadequate because of changes in conditions, or that the 

degree of compliance with the policies or procedures may deteriorate.

_____________________________________ _____________________________________

C. Richard Pfitzinger Andrew J. Grimaldi

Chief Operating Officer Chief Financial Officer

_____________________________________ _____________________________________

Lynn M. Powalski Howard I. Rubin

General Counsel Chief Risk Officer

February 17, 2021