Farm Credit Administration

Office of Inspector General

Audit Report 

Audit of the Farm Credit 

Administration’s Financial 

Statements

Fiscal Year 2020

A-20-FS

November 12, 2020
1501 Farm Credit Drive, McLean, VA 22102 703-883-4030 www.fca.gov/about/inspector-general

November 12, 2020

The Honorable Glen R. Smith, Board Chairman and Chief Executive Officer

The Honorable Jeffery S. Hall, Board Member

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102-5090

Dear Chairman Smith and Board Member Hall:

We contracted with the independent public accounting firm Harper, Rains, Knight & Company 

P.A. (HRK) to audit the financial statements of the Farm Credit Administration (FCA) as of and for 

the fiscal years ended September 30, 2020 and 2019 and to provide a report on internal control 

over financial reporting and compliance with laws and other matters. The contract required that 

the audit be performed in accordance with Government Auditing Standards, Office of Management 

and Budget audit guidance, and the U.S. Government Accountability Office/Council of the 

Inspectors General on Integrity and Efficiency’s Financial Audit Manual. 

In its audit of FCA, HRK reported: 

• the financial statements were fairly presented, in all material respects, in accordance with

U.S. generally accepted accounting principles;

• no material weaknesses in internal control over financial reporting and compliance with

laws and other matters; and

• no reportable noncompliance with provisions of laws tested or other matters.

In connection with the contract, we reviewed HRK’s report and related documentation and 

inquired of its representatives. Our review, as differentiated from an audit of the financial 

statements in accordance with U.S. generally accepted government auditing standards, was not 

intended to enable us to express, and we do not express, opinions on FCA’s financial statements 

or conclusions about the effectiveness of internal control over financial reporting, or on 

compliance with laws and other matters. HRK is responsible for the attached auditor’s report dated 

November 10, 2020, and the conclusions expressed therein. However, our review disclosed no 

instances where HRK did not comply, in all material respects, with Government Auditing Standards. 

1
1501 Farm Credit Drive, McLean, VA 22102 703-883-4030 www.fca.gov/about/inspector-general

Respectfully,

Sonya K. Cerne 

Assistant Inspector General for Audits, Inspections, and Evaluations

cc: Wendy R. Laguarda

Inspector General

Enclosure

2
Independent Auditors' Report

FCA Board and Inspector General 

Farm Credit Administration

Report on the Financial Statements

We have audited the accompanying financial statements of the Farm Credit Administration (FCA). FCA's 

financial statements comprise the balance sheets as of September 30, 2020 and 2019, and the related 

statements of net cost and changes in net position, and statements of budgetary resources, for the fiscal 

years then ended; and the related notes to the financial statements. 

Management's Responsibility

FCA's management is responsible for (1) the preparation and fair presentation of these financial statements 

in accordance with accounting principles generally accepted in the United States of America; (2) 

preparing, measuring, and presenting the Required Supplementary Information (RSI) in accordance with 

accounting principles generally accepted in the United States of America; (3) preparing and presenting 

other information included in documents containing the audited financial statements and auditors' report, 

and ensuring the consistency of that information with the audited financial statements and the RSI; and 

(4) maintaining effective internal control over financial reporting, including 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.

Auditors' Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted 

our audits in accordance with auditing standards generally accepted in the United States of America; the 

standards applicable to financial audits contained in Government Auditing Standards, issued by the 

Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 19-03, 

Audit Requirements for Federal Financial Statements. Those standards and OMB require that we plan and 

perform the audit to obtain reasonable assurance about whether the financial statements are free from 

material misstatement. We are also responsible for applying certain limited procedures to RSI and other 

information included with the financial statements. 

An audit of financial statements involves performing procedures to obtain audit evidence about the 

amounts and disclosures in the financial statements. The procedures selected depend on the auditors' 

judgment, including the auditors' assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal 

3
The FCA Board and Inspector General 

Farm Credit Administration (continued) 

Auditors' Responsibility (continued)

control relevant to the entity's preparation and fair presentation of the financial statements in order to 

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an 

opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An 

audit of financial statements also involves evaluating the appropriateness of the accounting policies used 

and the reasonableness of significant accounting estimates made by management, as well as evaluating 

the overall presentation of the financial statements. Our audits also included performing such other 

procedures as we considered necessary in the circumstances.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 

our audit opinion. 

Opinion on the Financial Statements

In our opinion, FCA's financial statements present fairly, in all material respects, FCA's financial position 

as of September 30, 2020 and 2019, and its net cost of operations, changes in net position, and budgetary 

resources for the fiscal years then ended, in accordance with accounting principles generally accepted in 

the United States of America.

Other Matters

Required Supplementary Information 

Accounting principles generally accepted in the United States of America issued by the Federal 

Accounting Standards Advisory Board (FASAB) require that the information in the Management's 

Discussion and Analysis be presented to supplement the financial statements. Such information, although 

not a part of the financial statements, is required by FASAB who considers this information to be an 

essential part of financial reporting for placing the financial statements in appropriate operational, 

economic, or historical context. We have applied certain limited procedures to the RSI in accordance with 

auditing standards generally accepted in the United States of America, which consisted of inquiries of 

management about the methods of preparing the RSI and comparing the information for consistency with 

management's responses to the auditors' inquiries, the financial statements, and other knowledge we 

obtained during the audit of the financial statements, in order to report omissions or material departures 

from FASAB guidelines, if any, identified by these limited procedures. We did not audit, and we do not 

express an opinion or provide any assurance on the RSI because the limited procedures we applied do not 

provide sufficient evidence to express an opinion or provide any assurance. 

Other Information 

Our audit was conducted for the purpose of forming an opinion on FCA's financial statements. The 

information in the Statement of Board Chairman and CEO, Statement of Chief Financial Officer, FCA 

Performance Report, and Other Information section contains a wide range of information, some of which 

is not directly related to the financial statements. This information is presented for purposes of additional 

4
The FCA Board and Inspector General 

Farm Credit Administration (continued) 

Other Information (continued) 

analysis and is not a required part of the financial statements or the RSI. We read the other information 

included with the financial statements in order to identify material inconsistencies, if any, with the audited 

financial statements.

The Statement of Board Chairman and CEO, Statement of Chief Financial Officer, Program Performance, 

and Other Information section has not been subjected to the auditing procedures applied in the audit of 

the financial statements, and accordingly, we do not express an opinion or provide any assurance on it. 

Other Reporting Required by Government Auditing Standards 

Internal Control over Financial Reporting

In planning and performing our audit of FCA's financial statements as of and for the year ended 

September 30, 2020, in accordance with U.S. generally accepted government auditing standards and OMB 

Bulletin 19-03, Audit Requirements for Federal Financial Statements, we considered the entity's internal 

control over financial reporting as a basis for designing audit procedures that are appropriate in the 

circumstances for the purpose of expressing our opinion on the financial statements, but not for the 

purpose of expressing an opinion on the effectiveness of the entity's internal control over financial 

reporting. Accordingly, we do not express an opinion on the entity's internal control over financial 

reporting. We did not consider all internal controls relevant to operating objectives as broadly established 

by the Federal Managers' Financial Integrity Act of 1982, such as those controls relevant to preparing 

performance information and ensuring efficient operations. We are required to report all deficiencies that 

are considered to be significant deficiencies or material weaknesses. 

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, or 

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination 

of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement 

of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A 

significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe 

than a material weakness, yet important enough to merit attention by those charged with governance. 

Our consideration of internal control over financial reporting was for the limited purpose described in the 

preceding paragraph and was not designed to identify all deficiencies in internal control over financial 

reporting that might be material weaknesses or significant deficiencies, and therefore, material weaknesses 

or significant deficiencies may exist that were not identified. Given these limitations, during our audit, we 

did not identify any deficiencies in internal control over financial reporting that we consider to be material 

weaknesses. However, material weaknesses may exist that have not been identified.

5
The FCA Board and Inspector General 

Farm Credit Administration (continued) 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether FCA's financial statements are free from material 

misstatement, we performed tests of its compliance with selected provisions of applicable laws, 

regulations, contracts, and grant agreements, noncompliance with which would have a direct and material 

effect on the financial statements. We performed our tests of compliance in accordance with U.S. generally 

accepted government auditing standards and OMB Bulletin 19-03, Audit Requirements for Federal 

Financial Statements. We caution that noncompliance may occur and not be detected by these tests. 

Management is responsible for complying with laws, regulations, contracts, and grant agreements 

applicable to the entity. 

Our responsibility is to test compliance with selected provisions of applicable laws, regulations, contracts, 

and grant agreements applicable to the entity that have a direct effect on the determination of material 

amounts and disclosures in the entity's financial statements and perform certain other limited procedures. 

Accordingly, we did not test compliance with all laws, regulations, contracts, and grant agreements 

applicable to FCA. 

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and grant 

agreements disclosed no instances of noncompliance for fiscal year 2020 that would be reportable under 

U.S. generally accepted government auditing standards or OMB Bulletin 19-03, Audit Requirements for 

Federal Financial Statements. However, the objective of our tests was not to provide an opinion on 

compliance with laws, regulations, contracts, and grant agreements applicable to FCA. Accordingly, we 

do not express such an opinion. 

Purpose of the Other Reporting Required by Government Auditing Standards

The purpose of the communication described in the Other Reporting Required by Government Auditing 

Standards section is solely to describe the scope of our testing of internal control and compliance and the 

result of that testing, and not to provide an opinion on the effectiveness of FCA's internal control or 

compliance. These reports are an integral part of an audit performed in accordance with U.S. generally 

accepted government auditing standards in considering the entity's internal control and compliance. 

Accordingly, this communication is not suitable for any other purpose.

November 10, 2020 

6