Farm Credit Administration Office of Inspector General

1501 Farm Credit Drive

McLean, Virginia 22102-5090

 

 

 

February 1, 2018

The Honorable Dallas P. Tonsager, Board Chairman

The Honorable Jeffery S. Hall, Board Member

The Honorable Glen R. Smith, Board Member

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102-5090

Dear Board Chairman Tonsager and FCA Board Members Hall and Smith: 

The Government Performance and Results Act of 1993 (GPRA) and GPRA Modernization Act of 

2010 encourage organizations to manage for results and hold managers accountable for 

executing programs to achieve desired outcomes. The enclosed report documents the outcomes 

or impact of the products, services, and leadership of the Office of Inspector General (OIG) 

during fiscal years (FY) 2016 and 2017. Because the leadership of OIG during FYs 2016 and 2017 

was largely led by the former Inspector General (IG), Elizabeth Dean, the mission, goals, and 

performance measures in this report are the ones established during Ms. Dean’s tenure as IG.

OIG continues to work to enhance its role as an agent for positive change within the Farm Credit 

Administration (FCA or Agency). The results reflect OIG’s commitment to assist in achieving the 

Agency’s mission of ensuring a safe and sound Farm Credit System that provides a dependable 

source of credit to farmers and ranchers.

We look forward to continuing to work with you to ensure FCA remains effective in its efforts to 

accomplish its mission. I welcome your comments on ways to improve OIG services that help 

you achieve your goals for FCA’s operations.

If you have any questions, please let me know. 

Respectfully,

Wendy R. Laguarda

Inspector General

Enclosure
Table of Contents

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

Strategic Goal 1 ............................................................................................................................................................... 2 

Audit, Inspection, Evaluation.................................................................................................................................. 2 

Quality Control, Professional Standards, and Training................................................................................. 3 

Strategic Goal 2 ............................................................................................................................................................... 4 

Investigations and Hotline...................................................................................................................................... 4 

Strategic Goal 3 ............................................................................................................................................................... 5 

Legislation and Regulations ................................................................................................................................... 5 

Outreach ........................................................................................................................................................................ 6 

APPENDIX........................................................................................................................................................................... 7 
1 

Background

The mission of FCA’s OIG is to be an agent of positive change, striving for continual 

improvement in FCA’s management and program operations. To accomplish that mission, we 

have three strategic goals. Performance measures address each goal. We revised our 

performance measures during this reporting period, so the performance measures presented 

are from our FY 2017-2018 Strategic and Operating Performance Plan. 

GOAL 1: Audit, inspect, and evaluate the Agency’s 

programs and operations to assist the Agency in fulfilling 

its oversight mission more efficiently and effectively. 

GOAL 2: Investigate alleged wrongdoing to detect and 

deter fraud, waste, abuse, and mismanagement in Agency 

programs and operations and to address Congressional, 

public, and employee concerns. 

GOAL 3: Review and make recommendations regarding 

existing and proposed legislation and regulations and 

provide other outreach to support the Agency’s oversight 

mission and the Inspector General community on 

government-wide issues.
2 

Strategic Goal 1

Audit, inspect, and evaluate the Agency’s programs and operations to assist the 

Agency in fulfilling its oversight mission more efficiently and effectively.

Audit, Inspection, and 

Evaluation

Performance Measures

Average time to complete 

products will not exceed six 

months.

Conduct annual audit 

planning based on Agency 

mission, risk, activities, and 

management.

Make constructive 

recommendations as 

necessary to management. 

Track recommendation 

status on a monthly basis 

until closure.

Agency accepts the 

majority of OIG audit, 

inspection, and evaluation 

recommendations.

Track mandated reviews 

with associated timeframes 

in an OIG workflow and 

review the document 

annually for updates.

Engage in monthly 

communication with FCA 

Board on matters of policy, 

priorities, and risks to the 

Agency.

Annually address the top 

management challenges 

facing the Agency. 

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OUTCOME / IMPACT

OIG performed or supervised audits, inspections, and evaluations (AI&Es) of mission 

critical operational areas. On average, OIG completed reports within six months. We 

completed the following reports during FYs 2016 and 2017: 

• Human Capital Planning at FCA 

• FCA’s Risk Project

• FCA’s Process in Developing and Updating Agency Policies and Procedures 

• FCA’s Controls Over the Electronic Official Personnel Folder

• Examination of Business Continuity at Farm Credit System Institutions

• Elimination of Unnecessary Use of Social Security Numbers at FCA

• FCA’s Position Management and Job Evaluation Program

• FCA’s Oversight of Young, Beginning, and Small Farmer Programs

• FCA’s Travel Card Program

• FCA’s Awards Program

• FCA’s Purchase Card Program

• FCA’s Contracting Activities

• Physical Security in FCA’s Denver Field Office

OIG contracted with an independent public accounting firm to assess the Agency’s 

accounting and financial reporting each year. The Agency continues to receive 

unmodified opinions on its financial statements. The Agency's compliance with 

FISMA was also assessed. No recommendations were made in these reports.

OIG prepared an annual AI&E plan. Each year, we evaluate risk priorities to focus on 

the most important oversight areas. 

All recommendations made in AI&E reports were accepted and agreed-upon by the 

Agency. OIG tracked the status of open recommendations monthly. During the twoyear reporting period, our reports resulted in 56 agreed-upon actions. At the close of 

FY 2017, 43 agreed-upon actions from the two-year reporting period were closed and 

13 remained open. 

OIG maintained a workflow to track required reviews and timeframes during the FY 

2016 and 2017 reporting period. OIG prepared monthly status reports for the FCA 

Board. These reports describe the status of OIG reviews, other ongoing activities, and 

planning and reporting actions. The IG also met quarterly with each FCA Board 

Member. 

The IG also identified management’s top challenges in the Agency’s annual 

Performance and Accountability Report. This report helps OIG and the Agency align 

priorities with key risk areas.

 

See Appendix (page 7) for details of AI&Es.
3 

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Strategic Goal 1 

Audit, inspect, and evaluate the Agency’s programs and operations to assist the 

Agency in fulfilling its oversight mission more efficiently and effectively.

Quality Control, 

rofessional Standards, and 

Training 

Performance Measures 

Issue annual internal 

quality assurance report to 

ensure compliance with 

professional standards and 

office policies and 

procedures.

Conduct an annual 

assessment of training 

needs for staff to maintain 

and enhance competency 

and professional 

development.

100 percent of OIG reports 

will be indexed and 

referenced before issuance.

All OIG employees will 

attend annual ethics 

training. 

All OIG employees will 

track training and 

education on an annual 

basis to fulfill or meet 

professional standards. 

OUTCOME / IMPACT

In August 2016, the Federal Labor Relations Authority OIG completed our 

required peer review. Peer reviews ensure the OIG audit function meets or 

exceeds quality audit standards prescribed by the U.S. Government 

Accountability Office. The FCA OIG received a pass rating, which is the best 

possible rating. The review found that the system of quality control for the 

audit organization was suitably designed to provide the FCA OIG with 

reasonable assurance of performing and reporting in conformity with 

applicable professional standards. Our next peer review is scheduled for 

2019.

OIG conducted an annual internal quality assurance review. This process 

ensures OIG’s system of quality control is effective and in compliance with 

professional standards and OIG Directives. As part of these reviews, OIG 

Directives were reviewed and updated as necessary. Our reviews for FYs 

2016 and 2017 found no systemic issues or material weaknesses. 

Training is a key element of OIG staff’s professional development. Staff 

assessed training needs each year, in accordance with annual budgeting. 

Each OIG employee maintained training records to ensure compliance with 

required training. All staff met training requirements stipulated in their 

respective professional standards. All OIG employees also completed FCA’s 

annual ethics training.

This reporting period, staff participated in training courses related to:

• OIG Leadership and Professional Development

• Information Technology and Cybersecurity

• Internal Controls and Fraud Prevention

• Federal Audit Executive Council Meetings and Conferences

• Interviewing Techniques

• Serving as a Virginia-certified mediator

• Council of Inspectors General for Integrity and Efficiency (CIGIE) 

program for new IGs

Independent referencing serves as a key control in OIG’s reporting process. 

All OIG AI&Es were independently referenced to supporting 

documentation. We documented completion of independent referencing in 

each AI&E file.
4 

Strategic Goal 2

Investigate alleged wrongdoing to detect and deter fraud, waste, abuse, and 

mismanagement in Agency programs and operations and to address Congressional, 

public, and employee concerns.

Investigations and 

Hotline 

Performance Measures

 Evaluate all FCA OIG hotline 

calls, emails, and other 

inquiries within two business 

days of receipt.

 Annually budget for and 

maintain a hotline from an 

independent source.

 Track the status of allegations 

and investigations on a 

monthly basis to ensure timely 

actions.

 Publish brief summaries, 

without attribution, of closed 

OIG investigations on the OIG 

website within 10 business 

days of the closing of the 

investigation and related 

referrals.

 Educate Agency employees on 

recognizing and reporting 

fraud, waste, abuse, and 

mismanagement by providing 

at least two Agency-wide 

educational initiatives, such as 

FCA newsletters.

 Within 10 business days, 

report to the U.S. Department 

of Justice on investigations as 

required by the IG Act.

 Report monthly on 

Congressional requests and 

meetings with members of 

Congress and their staff. 

OUTCOME / IMPACT

The OIG Hotline is available 24/7 to receive tips and complaints about fraud, 

waste, or abuse relating to FCA programs and operations. Tips and 

complaints can be reported to the hotline using a secure email account, fcaig-hotline@rcn.com, phone numbers 703-883-4316 and 800-437-7322, or fax 

703-883-4059. During the reporting period, OIG received 69 hotline 

complaints. OIG budgets for the email account annually and it is maintained 

independent of the Agency’s servers. We recorded all hotline complaints in a 

log. Whistleblower and hotline complaints received prompt attention within 

two business days, or were directed to the appropriate jurisdiction. We 

referred several hotline complaints related to Farm Credit System borrower 

complaints to the Office of Congressional and Public Affairs and the Office of 

Examination (OE). 

On a monthly basis, OIG tracked the status of investigations internally to 

ensure timely action. During this reporting period, we closed 11 investigations. 

Some investigations identified areas that necessitated reviews of 

administrative issues. Seven of the 11 investigations resulted in a report of 

investigation. OIG published closing memoranda summarizing investigation 

reports issued to the Agency on the OIG website within 10 business days. OIG 

coordinated with law enforcement when warranted, reporting to the U.S. 

Department of Justice within 10 business days. 

FCA employees are more likely to report real or suspected wrongdoing when 

they are aware of their responsibility to report suspected fraud, waste, abuse, 

and mismanagement, and how to identify it. OIG participated in the Agency’s 

new employee training to inform employees about the role of the OIG, the 

OIG Hotline, and employees’ responsibility to report fraud, waste, and abuse 

relating to Agency programs and operations. OIG also created hotline 

posters to educate employees on reporting fraud, waste, abuse, and 

mismanagement. OIG issued internal articles to educate Agency personnel 

on fraud, waste and abuse.

OIG reports monthly on Congressional requests and meetings in the monthly 

activities report to the FCA Board. 
5 

Strategic Goal 3

Review and make recommendations regarding existing and proposed legislation and 

regulations and provide other outreach to support the Agency’s oversight mission 

and the Inspector General community on government-wide issues. 

Legislation and 

Regulations 

Performance Measures

 Track, on a monthly basis, 

reviews of proposed 

regulations, legislation, and 

other guidance provided to 

the OIG.

 Issue the OIG Semiannual 

Report to Congress within 30 

days of the end of each 

reporting period.

 Post any OIG report to be 

publicly released, on OIG’s 

website not later than three 

business days after 

publication.

 Within five business days of 

release, provide notice of 

published OIG reports 

through OIG’s email 

subscription. 

OUTCOME / IMPACT

OIG tracks and comments on legislation and proposed rules, when 

appropriate, and informs the FCA Board and management about the status of 

new or pending legislation or regulations that have an impact on the Agency 

or on OIG. The IG is a member of the CIGIE Legislation Committee.

CIGIE Committees also forward interest items to the IG community. OIG 

reviews all such items as noted in OIG’s Semiannual Reports to the Congress. 

OIG continued to report on completed work and achievements through the 

timely Semiannual Reports to the Congress, which are posted on OIG’s public 

website. OIG issued each Semiannual Report within 30 days of the end of the 

reporting period. 

OIG AI&E reports are available on our public website, when possible. Full 

reports that contained sensitive information about FCA and potential 

vulnerabilities that could be used against the Agency were not released 

publicly. We posted all reports within three business days of issuance, as 

mandated in the Inspector General Empowerment Act of 2016. 

OIG utilized an email subscription system to notify subscribers of reports 

posted on our public website. Notifications were generated within five 

business days of public release. 
6 

Strategic Goal 3

Review and make recommendations regarding existing and proposed legislation and 

regulations and provide other outreach to support the Agency’s oversight mission 

and the Inspector General community on government-wide issues. 

Outreach 

Performance 

Measures

Inform Agency employees 

on operations of the OIG at 

least 12 times a year.

Make proactive contact at 

least twice a year to inform 

stakeholders about the 

value of our work and our 

ideas for oversight.

Participate in at least one 

or more CIGIE committees 

and work groups.

Conduct a quarterly 

confidential survey of Farm 

Credit System (FCS or 

System) institutions 

regarding the effectiveness 

of the Agency’s 

examination program.

Issue a quarterly report and 

annual summary report on

the survey results.

Establish an electronic 

system – “Ask the IG” – 

through which Agency 

employees can query the 

OIG on its mission, 

statutory authority, and 

activities, by end of fiscal 

year.

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OUTCOME / IMPACT

Agency employees’ acceptance of and cooperation with OIG activities is 

improved through better understanding of the OIG mission. We strive to 

improve OIG programs and products through feedback from Agency 

employees. For this reporting period, OIG:

• Prepared monthly status reports for FCA Board Members and senior 

officials. Reports covered OIG operations and the status of 

recommendations or agreed-upon actions.

• Held quarterly meetings with FCA Board Members to maintain open 

lines of communication and discuss OIG activities.

• Began working with the Office of Congressional and Public Affairs on 

revisions to the OIG website. 

• Developed a transition handbook to inform and assist newly appointed 

FCA Board Members and presidential transition staff. This outreach 

material covered the role of the IG, relevant authorities, and 

information on the FCA OIG.

OIG staff actively participated in CIGIE in a multitude of ways. The IG is a 

member of CIGIE’s Legislation Committee, Inspection and Evaluation 

Committee and Small OIGs Working Group. The IG and staff participated in the 

following CIGIE groups:

• Inspection and Evaluation Roundtable 

• Legislation Committee

• Small Agency Committee

• Audit Committee

• Council of Counsels 

• Federal Audit Executive Council (FAEC) 

• FAEC Information Technology Committee

• Freedom of Information Act Working Group 

• Inspection and Evaluation Peer Review Implementation Team 

• Records Administration Group

OIG conducted quarterly surveys of FCS institutions that included FCA’s 

examination process, communications, and general comments from FCS 

institutions. OIG issued eight survey reports for the reporting period, which 

included quarterly reports and annual summaries with the fourth quarter 

report. 

OIG also established an electronic system, “Ask the IG.” Agency employees can 

send correspondence directly to the IG with questions about OIG’s mission and 

responsibilities. 
7 

APPENDIX

Report Name Date Issued Mandate Time to 

Completion

Recommendations 

in Report

AUDITS

FCA’s Contracting Activities May 22, 2017 OIG Initiated 6 Months 7 Agreed-Upon 

Actions

FCA’s Awards Program February 

2017

23, OIG Initiated 4 Months 4 Agreed-Upon 

Actions

FCA’s Oversight of Young, 

Beginning, and Small Farmer 

Programs

September 28, 

2016 OIG Initiated 5 Months 5 Agreed-Upon Actions

FCA’s Position Management 

Evaluation Program

and Job September 23, 

2016 OIG Initiated 5 Months 6 Agreed-Upon Actions

Examination of Business Continuity 

at Farm Credit System Institutions June 1, 2016 OIG Initiated 4 Months 2 Agreed-Upon 

Actions

FCA’s Controls Over the Electronic 

Official Personnel Folder April 21, 2016 OIG Initiated 3 Months 4 Agreed-Upon 

Actions

FCA’s Risk Project March 31, 2016 OIG Initiated 5 Months 5 Agreed-Upon 

Actions

Human Capital Planning at FCA February 

2016

29, OIG Initiated 10 Months 11 Agreed-Upon 

Actions

FY 2016 Financial Statement Audit November 2016

Legislatively 

Mandated Annual 

Audit

8 Months No Action Items

FY 2015 Financial Statement Audit November 2015

Legislatively 

Mandated Annual 

Audit

8 Months No Action Items
8 

INSPECTIONS

Physical Security 

Field Office

in FCA’s Denver September 29, 

2017 OIG Initiated 3 Months 5 Agreed-Upon Actions

FCA’s Purchase Card Program March 7, 2017 OIG Initiated 5 Months 2 Agreed-Upon 

Actions

FCA’s Travel Card Program January 

2017

31, OIG Initiated 4 Months 2 Agreed-Upon 

Actions

Elimination of Unnecessary 

Social Security Numbers at 

Use 

FCA

of August 31, 2016 OIG Initiated 3 Months No Action Items

FCA’s Process in Developing and 

Updating Policies and Procedures March 31, 2016 OIG Initiated 4 Months 3 Agreed-Upon Actions

EVALUATIONS

Federal Information Security 

Modernization Act Evaluation 

2016

for FY November 10, 

2016

Legislatively 

Mandated Annual 

Evaluation

2 Months No Action Items

Federal Information Security 

Modernization Act Evaluation 

2015

for FY November 13, 

2015

Legislatively 

Mandated

Annual Evaluation

2 Months No Action Items