Office of 

Inspector General 

Semiannual Report to the Congress 

October 1, 2012 

through 

March 31, 2013 

Number 48 

April 17, 2013 

FARM CREDIT ADMINISTRATION 
 

 

 

Farm Credit Administration	 Office of Inspector General 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

April 17, 2013 

The Honorable Jill Long Thompson, Board Chair and Chief Executive Officer 

The Honorable Kenneth A. Spearman, Board Member 

The Honorable Leland A. Strom, Board Member 

Farm Credit Administration 

1501 Farm Credit Drive 

McLean, Virginia 22102-5090 

Dear Board Chair Long Thompson and FCA Board Members Spearman and Strom: 

Enclosed is the semiannual report on the activities of the Farm Credit Administration’s (FCA or 

Agency) Office of Inspector General (OIG) for the period October 1, 2012 through March 31, 2013. 

This is the forty-eighth report since the establishment of the OIG on January 22, 1989. I have been 

a proud contributor to each report and the substantive efficiencies gained by the FCA during each 

reporting period. 

I submit this report in accordance with the Inspector General Act of 1978, as amended (IG Act). 

Section 5(b) of the IG Act requires that the FCA Board send this report to the appropriate 

Congressional committees and subcommittees within 30 days after the date of this transmittal, 

accompanied by management’s report on the status of audit, inspection, and/or evaluation action 

items. 

During this reporting period, the OIG issued the annual financial audit report. The OIG contracted 

with the Bureau of the Public Debt for Brown & Company CPAs, PLLC to perform the audit of FCA’s 

financial statements for fiscal year 2012. The audit delivered an unqualified opinion and was issued 

November 5, 2012. Please refer to page 3 for further information. 

Also, the OIG’s annual evaluation of the Agency’s compliance with the Federal Information Security 

Management Act was completed. This annual evaluation was conducted by the OIG’s Senior 

Information Technology Auditor and the report was issued November 9, 2012. There were no action 

items as a result of this evaluation. Please refer to page 3 for further information. There were no 

open audit, inspection, or investigation action items at the end of this reporting period. 

Carl A. Clinefelter served as the Inspector General of the FCA from July 2005 until his retirement on 

January 3, 2013. Carl’s many years at FCA were honored at a commemorative ceremony at the 

FCA OIG. His two-term service as Vice Chair of the Council of Inspectors General on Integrity and 

Efficiency (CIGIE) was also recognized by the CIGIE. Since Carl’s departure, cost-savings and 
 

2 

efficiencies have continued to be realized within the OIG as I serve in the roles of Acting IG, Deputy 

IG, Counsel, and Director of Investigations. I look forward to continuing a positive and effective 

relationship between the OIG and the FCA Board, a partnership striving to strengthen FCA 

operations. 

If you have any questions, please call me at 4036 or 4030. 

Respectfully, 

Elizabeth M. Dean 

Acting Inspector General 

Enclosure 
 

 

Contents 

EXECUTIVE SUMMARY........................................................................................ 1
 

BACKGROUND................................................................................................... 2 

FARM CREDIT ADMINISTRATION........................................................................... 2
 

FARM CREDIT SYSTEM....................................................................................... 2
 

AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED..................................... 3
 

FY 2012 INDEPENDENT FINANCIAL STATEMENT AUDIT OF FCA..................................... 3
 

FY 2012 FEDERAL INFORMATION SECURITY MANAGEMENT ACT EVALUATION................ 3
 

AUDITS, INSPECTIONS, AND EVALUATIONS IN PROGRESS...................................... 3 

TELEWORK PROGRAM.............................................................................................. 3
 

TRAINING EXPENSES AND STUDENT LOAN REPAYMENTS............................................. 3 

MANAGEMENT ADVISORY REPORT ISSUED.......................................................... 4
 

INVESTIGATIONS................................................................................................ 4 

LEGISLATION AND REGULATIONS....................................................................... 5 

OTHER ACTIVITIES............................................................................................. 7 

QUARTERLY SURVEY OF FARM CREDIT SYSTEM INSTITUTIONS.................................. 7
 

STAFF PARTICIPATION IN ACTIVITIES WITHIN THE INSPECTOR GENERAL COMMUNITY..... 7 

STAFF PARTICIPATION IN AGENCY ORGANIZATIONS................................................. 7 

STAFF DEVELOPMENT........................................................................................ 7
 

ANNEX................................................................................................................ 8
 

APPENDICES
 

APPENDIX A – INDEX OF REPORTING REQUIREMENTS............................................. 9
 

APPENDIX B – AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED..................

APPENDIX D – REPORTS WITH RECOMMENDATIONS THAT FUNDS

.... 10
 

APPENDIX C – REPORTS WITH QUESTIONED COSTS............................................... 11
 

 BE PUT TO BETTER USE............................................................. 12
 

APPENDIX E – PEER REVIEWS CONDUCTED OF THIS OFFICE.................................... 13
 

APPENDIX F – PEER REVIEWS CONDUCTED BY THIS OFFICE..................................... 14
 

APPENDIX G – FCA ORGANIZATIONAL CHART......................................................... 15
 

APPENDIX H – OFFICE OF INSPECTOR GENERAL ORGANIZATIONAL CHART................... 16 

APPENDIX I – GLOSSARY OF TERMS...................................................................... 17
 
 

 

 

 

Executive Summary 

This Semiannual Report to the Congress summarizes the activities and accomplishments of the 

Farm Credit Administration’s (FCA or Agency) Office of Inspector General (OIG) for the period 

October 1, 2012 through March 31, 2013. The OIG’s efforts were directed toward implementing 

the OIG’s fiscal year (FY) 2013 strategic and operational plan and budget; performing audits, 

inspections, and evaluations of FCA programs and operations; conducting investigations, as 

necessary; independently and confidentially surveying Farm Credit System (FCS or System) 

institutions regarding the effectiveness of the Agency’s examination function and examiners; and 

providing objective, independent reporting and counsel to the FCA Board on FCA programs and 

operations. 

During this reporting period, the Inspector General (IG), Carl A. Clinefelter, retired on January 3, 

2013. He was honored for his service during ceremonial gatherings both at the FCA and as 

departing Vice Chair of the Council of Inspectors General on Integrity and Efficiency (CIGIE). 

The OIG contracted with the Bureau of the Public Debt (BPD) for Brown & Company CPAs, 

PLLC (Brown & Co.) to perform the audit of FCA’s financial statements for FY 2012. The audit 

delivered an unqualified opinion, was issued November 5, 2012, and was presented to the FCA 

Board on January 10, 2013. See page 3 for further information. 

Also, the OIG issued an evaluation report on the Agency’s compliance with the Federal 

Information Security Management Act (FISMA). There were no recommendations as a result of 

this evaluation. The evaluation was conducted by the OIG’s Senior Information Technology (IT) 

Auditor. See page 3 for further information. 

Additionally, the OIG issued two quarterly reports and the FY 2012 summary report to the Chief 

Examiner and FCA Board. These reports tabulate results and capture comments responsive to 

the OIG survey questions posed to System institutions regarding the quality of the FCA 

examination program. 

The OIG maintains five positions: the Inspector General, a Deputy Inspector General (DIG) and 

Counsel, a Senior Auditor, a Senior IT Auditor, and an Administrative Assistant. Appendix G 

and Appendix H reflect the organizational structure of FCA and the OIG, respectively. Since 

January 4, 2013, the Deputy IG/Counsel has served as Acting IG. 

1 
 

 

 

Background 

Farm Credit Administration 

The FCA is an independent Federal agency of the United States government responsible for the 

regulation and examination of FCS institutions chartered under the Farm Credit Act of 1971, as 

amended (Farm Credit Act). The FCA is also a “designated Federal entity” within the meaning 

of the Inspector General Act of 1978, as amended (IG Act). 

As a non-appropriated agency, FCA funds its expenses primarily through assessments to the 

institutions it regulates. The Agency’s FY 2013 budget is $61,900,000. Assessments by FCA to 

FCS institutions for FY 2013 are $50,000,000 with other sources of funding totaling 

$11,900,000. The OIG’s FY 2013 budget is $1,212,318. At the end of this reporting period, FCA 

had 265 employees, about half of which are examiners located in five field offices. At the end of 

the prior semiannual reporting period, the Agency had 282 employees. 

Farm Credit System 

The FCS is a Government-sponsored enterprise comprised of Farm Credit banks and 83 

lending associations, as of March 31, 2013, in all 50 states and Puerto Rico that primarily make 

loans to agriculture. The System raises funds by selling securities in the national and 

international money markets through its special purpose entity, the Federal Farm Credit Banks 

Funding Corporation. These securities are not guaranteed by the U.S. Government. 

The Federal Agricultural Mortgage Corporation (Farmer Mac), also a part of the FCS, is 

chartered by the Federal government to provide a secondary market for agricultural mortgage 

loans. Farmer Mac is publicly traded and issues its own debt securities. 

Additionally, there are four active service corporations organized under the Farm Credit Act that 

provide services to FCS entities and eligible borrowers. 

2 
 

 

Audits, Inspections, and Evaluations 

REPORTS ISSUED 

The OIG conducts all audits in accordance with Government Auditing Standards issued by the 

Comptroller General of the United States for audits of Federal organizations, programs, 

activities, and functions. Inspections and evaluations are conducted in accordance with the 

CIGIE Quality Standards for Inspections. Copies of most OIG reports are available on the OIG 

web site at www.fca.gov/home/inspector.html, or by contacting the OIG at (703) 883-4030, or by 

TTY at (703) 883-4359, or by e-mail at ig_information@fca.gov. 

FY 2012 Independent Financial Statement Audit of FCA 

The Accountability of Tax Dollars Act of 2002 required FCA and certain other agencies to submit 

to Congress and the Office of Management and Budget (OMB) an audited financial statement 

each fiscal year. 

In continuing to assist the Agency in meeting these requirements, the OIG contracted with the 

BPD for Brown & Co. to perform the audit of FCA’s financial statements for FY 2012. The audit 

resulted in an unqualified opinion, was issued November 5, 2012, and presented to the FCA 

Board on January 10, 2013. 

FY 2012 Federal Information Security Management Act Evaluation 

The evaluation of the Agency’s compliance with FISMA for FY 2012 was performed by the 

OIG’s Senior IT Auditor, using guidelines established by FISMA, OMB, and the National Institute 

of Standards and Technology. The report revealed no significant deficiencies and was issued 

November 9, 2012. 

REPORTS IN PROCESS 

FCA’s Telework Program 

The audit objective is to determine whether the FCA’s telework program is being effectively 

administered. 

Training Expenses and Student Loan Repayments 

The objective of this audit is to determine the effectiveness of controls related to training, 

conferences, and related travel expenses; and student loan repayments. 

3 
 

MANAGEMENT ADVISORY REPORT ISSUED 

OIG Management Advisory Reports are designed to be a quick mechanism to offer the Agency 

head suggestions on ways to strengthen Agency operations. The OIG continued to provide 

information and best practices related to an advisory issued last reporting period on FCA’s Use 

of Social Media. 

INVESTIGATIONS 

Two allegations of inappropriate conduct and misuse of resources were reviewed, but 

unsubstantiated. One of the allegations had been previously advanced and reviewed in a prior 

semiannual period. Although unsubstantiated, the same allegation was forwarded to the OIG, 

the Chairperson of the Agency, and to a Congressman. 

OIG Hotline calls and emails dealing with borrower complaints concerning FCS institutions and 

other FCA program issues were referred to the FCA office or other Federal agency responsible 

for reviewing such matters. 

4 
 

Legislation and Regulations 

In furtherance of the OIG’s mandate to review existing and proposed legislation and regulations, 

the IG or DIG and Counsel attends joint briefings of the FCA Board on regulations at the 

proposed and final stages. The following were reviewed by the DIG and Counsel: 

Legislation 

1) Pub. L. 112-248 (January 10, 2013), Improper Payments Elimination and 

Recovery Improvement Act of 2012 

2) S. 241, H.R. 6406, The Non-Federal Whistleblower Protection Act 

3) S. 300, Purchase and Travel Card Controls 

4) S. 743, Whistleblower Protection 

5) S. 1222/H.R. 2146, Digital Accountability and Transparency Act of 2011 or DATA 

Act 

6) S. 2105, The Cybersecurity Act of 2012; S. 3342, SECURE IT; S. 3414 

7) S. 3286 Comprehensive Contingency Contracting Reform Act of 2012 

8) H.R. 314, Inspector General Act of 2013 

9) H.R. 1211, The Freedom of Information Act Oversight and Implementation Act of 

2013. 

10) H.R. 1163, The Federal Information Security Act Amendment of 2013 

11) H.R. 6016, The Government Employee Accountability Act 

12) H.R. 6634, To Change the Effective Date for the Internet Publication of Certain 

Financial Disclosure Statements 

Final Rules 

13) Investment Management 

14) Farmer Mac Investment Management 

15) Liquidity and Funding
 

Proposed Rules 

16)	 Capital Planning at Farmer Mac 

Bookletter 

17) Providing Credit to Farmers and Ranchers Operating in Local/Regional Food 

Systems 

5 
 

 

Informational Memoranda 

18) Impact of Biggert-Waters Act 

19) LARS and FCSLoans1 Data Collection 

20) Truth in Lending and Consumer Leasing- Annual Adjustments 

6 
 

 

Other Activities 

Quarterly Survey of Farm Credit System Institutions 

The OIG administers an ongoing survey of FCS institutions regarding the quality and 

consistency of the Agency’s examination function and examiners. The OIG issues a quarterly 

report and, at the end of each FY, a summary report on the surveys’ results to the Chief 

Examiner and the FCA Board. 

During this 6-month period, the OIG sent surveys to the Audit Committee Chairmen, Chief 

Executive Officers, and Boards of 37 FCS institutions. Quarterly reports for the 3-month periods 

ended September 30 and December 31, 2012, were issued by the OIG to the Chief Examiner 

and the FCA Board. A summary FY 2012 report was also issued. 

Staff Participation in Activities within the Inspector General Community 

OIG staff members are encouraged to take part in organizations that contribute to the mission of 

the Inspectors General community, as well as their individual professional development. Most 

staff members are actively involved in one or more professional organizations, as well as 

activities within the CIGIE. 

The IG served as the Vice Chairperson of CIGIE, was a member of CIGIE’s Executive Council, 

helped chair the monthly meetings of all Inspectors General comprising CIGIE, and participated 

as a member of the CIGIE’s Inspection and Evaluation (I&E) Committee. The Acting IG has 

been attending the foregoing meetings since January 2013. 

The OIG DIG and Counsel meets monthly with counsels to the other Inspectors General. 

Counsel also attends DIG and Directors of Investigations meetings. 

The OIG Senior Auditor and Senior IT Auditor attend Federal Audit Executive Committee 

meetings and conferences. The Senior Auditor participates as a member of the I&E 

Committee’s Roundtable. The Senior IT Auditor is actively involved in the IT Subcommittee of 

the Federal Audit Executive Committee and attends local ISACA (formerly known as Information 

Security and Control Association) meetings. 

Staff Participation in Agency Organizations 

OIG employees are active on Agency workgroups and task forces, as appropriate. 

Staff Development 

OIG employees continually seek ways to improve skills and become knowledgeable in the 

initiatives of the community of Inspectors General. Audit and legal staff must meet continuing 

education requirements. Individual development plans are used to identify long and short-term 

career goals along with specific training and developmental needs. These plans are geared to 

enhance individual skills in the performance of official duties and meet the criteria needed to 

achieve OIG performance goals and objectives. 

7 
 

 

Annex 

This annex is provided in accordance with the National Defense Authorization Act for FY 2008. 

This referenced statute requires all Inspectors General appointed under the IG Act to include an 

annex to their semiannual reports as follows: 

1) listing all contract audit reports issued during the reporting period containing significant 

audit findings; 

2) briefly describing the significant audit findings in the report; and 

3) specifying the amounts of costs identified in the report as unsupported, questioned, or 

disallowed. 

Significant audit findings are defined as unsupported, questioned, or disallowed costs in excess 

of $10,000,000, or other findings that the Inspector General determines to be significant. It 

defines contracts as a contract, an order placed under a task or delivery order contract, or a 

subcontract. 

No contract audit reports meeting these criteria were issued on behalf of the OIG during this 

reporting period. 

8 
 

Appendixes 

APPENDIX A 

Index of Reporting Requirements 

SECTION TITLE Page 

4(a)(2) 

5(a)(1) 

5(a)(2) 

5(a)(3) 

5(a)(4) 

5(a)(5) 

5(a)(6) 

5(a)(7) 

5(a)(8) 

5(a)(9) 

5(a)(10) 

5(a)(11) 

5(a)(12) 

5(a)(13) 

5(a)(14)(15) 

5(a)(16) 

845 

Review of legislation and regulations 

Significant problems, abuses, and deficiencies 

Recommendations for corrective action 

Prior recommendations not yet implemented 

Matters referred to prosecutive authorities 

Information unreasonably refused or not provided 

List of reports issued 

Summaries of significant reports 

Management decisions with questioned costs 

Management decisions on recommendations that funds be put 

to better use 

Prior audit reports unresolved 

Significant revised management decisions 

Significant management decisions with which the Inspector 

General disagreed 

Compliance of Agency financial management system 

Peer reviews conducted of this OIG 

Peer reviews conducted by this OIG 

FY 2008 National Defense Authorization Act Citation and 

Requirement 

9 

5 - 6
 

None 

None
 

None 

None
 

None 

3 

3 

11
 

12
 

None
 

None 

None 

3 

13
 

14
 

8 
 

APPENDIX B 

Audit, Inspection, and Evaluation Reports Issued 

Report Number of Agreed Upon 

Actions/Recommendations Questioned Costs 

Recommendations 

That Funds Be Put to 

Better Use 

Audit of the FCA Financial 

Statement 2012 0 $ 0 $ 0 

Evaluation of the FISMA – 

FY 2012 0 $ 0 $ 0 

Total 0 $ 0 $ 0 

10 
 

 

 

 

 

 

 

 

 

 

APPENDIX C 

Reports with Questioned Costs 

Number Dollar Value 

Reports Recommendations 

Questioned 

Costs 

Unsupported 

Costs 

A. For which no management decision has been 

 made by the commencement of the reporting

 period. 

B. Which were issued during the reporting 

period. 

0 0 $ 0 $ 0 

0 0 $ 0 $ 0 

Subtotals (A+B) 0 0 $ 0 $ 0 

C. For which a management decision was made

 during the reporting period. 0 0 $ 0 $ 0 

(i) dollar value of disallowed costs 0 0 $ 0 $ 0 

(ii) dollar value of costs not disallowed 0 0 $ 0 $ 0 

D. For which no management decision has been

 made by the end of the reporting period. 

E. For which no management decision was 

 made within six months of issuance. 

0 0 $ 0 $ 0 

0 0 $ 0 $ 0 

11 
 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX D 

Reports with Recommendations that Funds 

be Put to Better Use 

Number of 

Reports 

Number of 

Recommendations Dollar Value 

A. For which no management decision has been 

 made by the commencement of the reporting

 period. 

0 0 $ 0 

B. Which were issued during the reporting period. 0 0 $ 0 

Subtotals (A+B) 0 0 $ 0 

C. For which a management decision was made

 during the reporting period. 0 0 $ 0 

(i) dollar value of recommendations that were 

agreed to by management 0 0 $ 0 

 - based on proposed management action 0 0 $ 0 

 - based on proposed legislative action 0 0 $ 0 

(ii) dollar value of recommendations that were 

 not agreed to by management 0 0 $ 0 

D. For which no management decision has been

 made by the end of the reporting period. 0 0 $ 0 

E. For which no management decision was 

 made within six months of issuance. 0 0 $ 0 

12
 
 

APPENDIX E 

Peer Reviews Conducted of this Office 

Peer Review Performed By Date of Report Function 

Reviewed 

Peer Review 

Rating 

U.S. Commodity Futures Trading Commission 

Office of Inspector General February 4, 2011 Audit Pass 

U.S. Securities and Exchange Commission 

Office of Inspector General December 26, 2007 Investigations Pass 

13 
 

APPENDIX F 

Peer Reviews Conducted by this Office 

Peer Review Of Date of Report Function 

Reviewed 

Peer Review 

Rating 

Consumer Product Safety Commission 

Office of Inspector General May 23, 2011 Audit Pass 

U.S. International Trade Commission 

Office of Inspector General January 16, 2013 Audit Pass 

14 
Board 

 

 

 

APPENDIX G 

FCA ORGANIZATIONAL CHART 

Farm Credit Administration Board 

Jill Long Thompson, Board Chair 

Kenneth A. Spearman, Member 

Leland A. Strom, Member 

Special Advisor YBS & 

Local Food Systems 

Mark Johansen 

Secretary to the Board 

Dale L. Aultman 

Equal Employment 

and Inclusion Director 

Thais Burlew 

Designated Agency 

Ethics Official 

Wendy R. Laguarda 

Office of the Chairman 

and CEO 

Jill Long Thompson 

Office of the Chief 

Operating Officer 

William J. Hoffman 

Office of 

Regulatory Policy 

Gary K. Van Meter 

Office of 

General Counsel3 

Charles R. Rawls 

Office of Management 

Services 

Stephen G. Smith 

Office of Examination 

S. Robert Coleman 

Office of 

Inspector General1 

Elizabeth M. Dean 

(Acting) 

Office of 

Congressional and 

Public Affairs 

Michael A. Stokke 

Office of Secondary 

Market Oversight2 

Laurie A. Rea 

1 The Dodd-Frank Wall Street and Consumer Protection Act, Public Law 111-203, amended the Inspector General Act, 5 U.S.C. App 3, 

changing the meaning of “head of the designated Federal entity.” The effect is that the Inspector General now reports to the FCA Board. 

Prior to the amendment, the FCA Chairman was the “head of the designated Federal entity” under the IG Act and the IG reported to the 

Chairman. 

2 Reports to the Board for policy and to the CEO for administration. 

3 Maintains a confidential advisory relationship with each of the Board members. 

15 
 

APPENDIX H 

Office of Inspector General Organizational Chart 

Inspector General 

Carl A. Clinefelter 

Retired January 3, 2013 

Administrative Assistant 

Debra M. Miller 

Deputy Inspector 

General and Counsel 

Elizabeth M. Dean 

Acting IG since 

January 3, 2013 

Senior Auditor 

Veronica G. McCain 

Senior Information 

Technology Auditor 

Tammy F. Rapp 

 Elizabeth M. Dean, Acting Inspector General March 2013 

16
 
 

 

APPENDIX I 

Glossary of Terms 

Agency – Farm Credit Administration 

BPD – Bureau of the Public Debt 

Brown & Co. – Brown & Company CPAs, PLLC 

CIGIE – Council of the Inspectors General on Integrity and Efficiency 

DIG – Deputy Inspector General 

Farm Credit Act – Farm Credit Act of 1971, as amended 

Farmer Mac – Federal Agricultural Mortgage Corporation 

FCA – Farm Credit Administration 

FCS – Farm Credit System 

FISMA – Federal Information Security Management Act 

FY – Fiscal Year 

H.R. – House Resolution 

IG – Inspector General 

IG Act – Inspector General Act of 1978, as amended 

I&E – Inspection and Evaluation 

ISACA – Information Security and Control Association 

IT – Information Technology 

OE – Office of Examination 

OIG – Office of Inspector General 

OMB – Office of Management and Budget 

System – Farm Credit System 

17 
 

REPORT 
 

Fraud | Waste | Abuse | Mismanagement 

FARM CREDIT ADMINISTRATION 

OFFICE OF INSPECTOR GENERAL 

 Phone: Toll Free (800) 437-7322; (703) 883-4316 

 Fax: (703) 883-4059 

 E-mail: fca-ig-hotline@rcn.com 

 Mail: Farm Credit Administration 

Office of Inspector General 

1501 Farm Credit Drive 

McLean, VA 22102-5090
 

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