U.S. Department of Agriculture: More Effective Management and Performance Can Help Implementation of the Farm Bill
Published: 2011-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The current fiscal environment, ongoing deliberations for the next Farm Bill, and the public's expectations for a high-performing and efficient government underscore the need for the U.S. Department of Agriculture (USDA) to focus on program results and customer needs, work across organizational lines to help minimize any overlap and duplication, and build its internal capacity. USDA comprises 15 agencies in seven mission areas that are responsible for, among other things, assisting farmers and rural communities, overseeing meat and poultry safety, providing access to nutritious food for low-income families, and protecting the nation's forests. For fiscal year 2010, USDA estimated that its 15 agencies would have total outlays of $129 billion. This statement highlights examples from GAO's previous work that illustrate how USDA can address challenges it faces in three key areas: (1) the performance and accountability of USDA programs, (2) coordination within USDA and between USDA and other agencies to minimize duplication and overlap, and (3) the sufficiency of USDA management capacity. This statement is based on GAO's extensive body of work on USDA programs authorized under the Farm Bill and issued from September 2005 through May 2011.
section_title: What GAO Found
paragraphs: USDA must ensure that its programs are being implemented efficiently and services are being delivered effectively, which requires it to review the progress it and its agencies have made in achieving program goals and developing strategies to improve performance and accountability. GAO's work notes cases in which USDA programs have either met or fallen short of meeting program goals. In April 2010, GAO reported on domestic food assistance programs--an area where three federal agencies administered 18 programs consisting of more than $90 billion in spending in fiscal year 2010. GAO suggested that not enough is known about the effectiveness of these programs. Research GAO reviewed suggested that participation in seven USDA food assistance programs it examined, including four of the five largest, is associated with positive health and nutrition outcomes consistent with the programs' goals; these goals include raising the level of nutrition among low-income households, safeguarding the health and well-being of the nation's children, and strengthening the agriculture economy. Little, however, is known about the effectiveness of the remaining 11 programs--9 of which are USDA programs--because they have not been well studied. GAO suggested that USDA consider which of the lesser-studied programs need further research. To achieve its missions, USDA must effectively coordinate with many groups both within and outside the agency. GAO's work provides instances of where improving coordination within USDA or across agencies has contributed or could contribute to improved performance of USDA programs. For example, in September 2005, GAO reported on USDA's need to improve coordination, including information-sharing and communication, between its Risk Management Agency (RMA) and Farm Service Agency (FSA) on potential fraud, waste, and abuse in the federal crop insurance program. For example, FSA offices in nine states did not conduct any of the field inspections RMA requested of farmers' fields in cases of anomalous crop insurance losses or when farmers were suspected of poor farming practices in 1 or more of the years in GAO's review. Also, RMA did not share with FSA information on the nature of the suspected poor farming practices or the results of follow-up inspections. GAO recommended actions to both agencies to more effectively conduct field inspections. USDA must have sufficient internal management capacity in the areas of financial management, human capital management, and information technology to effectively and efficiently fulfill its multiple missions. GAO has reported on USDA programs where improvements are needed in these areas. For example, GAO reported in October 2008 that USDA provided farm program payments to thousands of individuals with incomes exceeding income eligibility caps. GAO recommended that USDA work with the Internal Revenue Service to develop a system for verifying the income eligibility for recipients of all farm program payments, which the agencies subsequently did.

section_title: Letter
paragraphs: We appreciate the opportunity to provide a statement for the record on  performance and management challenges and opportunities facing the  U.S. Department of Agriculture (USDA). The current fiscal environment;  ongoing deliberations for the next Farm Bill, such as this oversight  hearing; and the public’s expectations for a high-performing and efficient  government underscore the necessity for USDA to focus on program  results and customer needs, work across organizational boundaries to  help minimize any overlap and duplication, and build its internal capacity.  As you know, the breadth of USDA’s responsibilities span seven broad  mission areas that, among other things, are to assist farmers and rural  communities, oversee the safety of meat and poultry, provide access to  nutritious food for low-income families, and protect the nation’s forests.  For fiscal year 2010, USDA reported that its 15 agencies had total outlays  of $129 billion. About 80 percent of these outlays ($103 billion) are  associated with mandatory spending programs, including the majority of  programs related to nutrition assistance, farm commodities, export  promotion, and conservation. The remaining 20 percent of outlays ($26  billion) are associated with discretionary spending programs that, in part,  support rural development loans and grants; manage national forests and  other Forest Service activities; address pest and disease threats; conduct  research and education; and provide technical as well as domestic and  international marketing assistance.
In May 2011, the Secretary of Agriculture testified before the Senate  Committee on Agriculture, Nutrition, and Forestry, laying out an ambitious  agenda for USDA as it seeks to address its current performance and  management issues and take advantage of emerging opportunities.  Achieving this agenda will require USDA to tackle several challenges as it  works to carry out its multifaceted mission and, more immediately, to  meet the mandates in the next Farm Bill. Our work across the federal  government has highlighted challenges agencies face as they focus on  desired outcomes. Congress has put in place a statutory framework that  addresses long-standing management problems that undermined the  federal government’s efficiency and effectiveness and provide greater  accountability for results. This framework is to improve the federal  government’s effectiveness, accountability, and service delivery and  enhance congressional decision making. Specifically, the Government  Performance and Results Act Modernization Act of 2010 (GPRAMA) offers  important opportunities for USDA, as well as other agencies, to focus  attention on successfully improving the effectiveness of their programs  and operations. For example, GPRAMA significantly enhances  requirements for agencies to consult with Congress when establishing or  adjusting governmentwide and agency goals. Through these consultations,  Congress can identify performance and management issues that USDA  needs to address and consider this information as it drafts the Farm Bill  and oversees its implementation.
This statement highlights examples drawn from our previous work that  illustrate how USDA can address challenges it faces in the following three  key areas: (1) the performance and accountability of USDA programs, (2)  coordination within USDA and between USDA and other agencies to  minimize overlap and duplication, and (3) the sufficiency of USDA  management capacity. I will also highlight in my statement opportunities  where GPRAMA, which the administration recently began implementing,  can help USDA address some of these challenges. This statement is based  on our extensive body of work on USDA programs authorized under the  Farm Bill and issued from September 2005 through May 2011. We  conducted the performance audit work that supports this statement in  accordance with generally accepted government auditing standards.  Additional information on our scope and methodology is available in each  issued product.
subsections: section_title: Performance and Accountability of USDA Programs
paragraphs: USDA must ensure that its programs are being implemented efficiently and  services are being delivered effectively. To do so, USDA must review the  progress it has made in achieving program goals and developing strategies  to address any gaps in performance and accountability. To help USDA, and  other agencies, address the challenge of improving the performance and  accountability of their programs, GPRAMA creates several new leadership  structures and responsibilities aimed at sustaining attention on  improvement efforts. For example, the act designates the deputy head of  each agency as Chief Operating Officer (COO), who has overall  responsibility for improving the performance and management of the  agency. The act also requires each agency to designate a senior executive  as Performance Improvement Officer (PIO) to support the COO.
USDA, along with other agencies, is to continue to develop annual  performance goals that will lead to the accomplishment of its strategic  goals. In addition, the head of each agency must now identify priority  goals. These goals must (1) reflect the priorities of the agency and be  informed by the federal government’s priority goals and consultations with  Congress; (2) have ambitious targets that can be achieved within 2 years;  (3) have a goal leader responsible for achieving each goal; and (4) have  quarterly performance targets and milestones. In addition, at least  quarterly, the agency head, COO, and PIO are to coordinate with relevant  personnel who contribute to achieving the goal, from within and outside  the agency; assess whether relevant organizations, program activities,  regulations, policies, and other activities are contributing as planned to  achieving the goal; categorize goals by their risk of not being achieved;  and, for those at greatest risk, identify strategies to improve performance.
Our recent work has identified challenges to be met in improving program  performance and accountability in the Forest Service and domestic food  assistance programs.
Forest Service. In March 2011, we testified that the Forest Service had  not fully resolved performance accountability concerns that we raised  in a 2009 testimony. As we noted, the agency’s long-standing  performance accountability problems include an inability to link  planning, budgeting, and results reporting. In other words, the Forest  Service could not meaningfully compare its cost information with its  performance measures. We also testified that while the Forest Service,  along with Interior agencies that have responsibilities for fighting  wildland fires, had taken steps to help contain wildland fire costs, they  had not yet clearly defined their cost-containment goals or developed a  strategy for achieving these goals—steps we first recommended in  2007. Agency officials identified several agency documents that they  stated clearly define goals and objectives and that make up their  strategy to contain costs. However, these documents lacked the clarity  and specificity needed by officials in the field to help manage and  contain wildland fire costs. We therefore continue to believe that the  Forest Service will be challenged in managing its cost containment  efforts and in improving its ability to contain wildland fire costs until  the agency clearly defines its cost-containment goals and strategy for  achieving them.
Domestic food assistance programs. Our work on domestic food  assistance programs—an area where three federal agencies administer  18 programs, consisting of more than $90 billion in spending in fiscal  year 2010—suggests not enough is known about the effectiveness of  these programs. Research we reviewed suggests that participation in  seven of the USDA food assistance programs we examined, including  four of the five largest—Special Supplemental Nutrition Program for  Women, Infants, and Children; the National School Lunch Program; the  School Breakfast Program; and the Supplemental Nutrition Assistance  Program—is associated with positive health and nutrition outcomes  consistent with the programs’ goals. These goals include raising the  level of nutrition among low-income households, safeguarding the  health and well-being of the nation’s children, and strengthening the  agriculture economy. However, little is known about the effectiveness  of the remaining 11 programs—9 of which are USDA programs— because they have not been well studied. GAO suggested that USDA  consider which of the lesser-studied programs need further research,  and USDA agreed to consider the value of examining potential  inefficiencies and overlap among smaller programs.
section_title: Coordination within USDA and between USDA and Other Agencies to Help Minimize Overlap and Duplication
paragraphs: USDA must effectively coordinate with many groups within and outside of  the agency to achieve its missions. GPRAMA establishes a new framework  aimed at taking a more crosscutting and integrated approach to focusing  on results and improving performance—within agencies and across the  federal government. At the governmentwide level, the act requires the  Director of the Office of Management and Budget (OMB), in coordination  with executive branch agencies, to develop—every 4 years—long-term,  outcome-oriented goals for a limited number of crosscutting policy areas.  On an annual basis, the Director of OMB is to provide information on how  these long-term goals will be achieved, and agencies are to describe how  they are working with each other to achieve the crosscutting goals.
Additional GPRAMA requirements could lead to improved coordination  and collaboration for achieving agency-level goals as well. For example,  the act requires each agency to identify the various organizations and  program activities—within and external to the agency—that contribute to  each of its goals. Also, as described earlier, GPRAMA requires top  leadership and program officials to be involved in quarterly reviews, and  to assess whether these organizations and program activities are  contributing as planned to the agency’s priority goals.
Based on our prior work, we have identified the following examples that  illustrate how improving coordination within USDA or across agencies has  contributed or could contribute to the improved performance of USDA  programs.
Farm program agencies. In September 2005, we reported on the need  for improved coordination, including information-sharing and  communication, between the Risk Management Agency (RMA) and  Farm Service Agency (FSA). Under USDA guidance, RMA is to provide  FSA with a list of farmers who have had anomalous crop insurance  losses or who are suspected of poor farming practices. Staff in FSA  county offices review these cases for potential fraud, waste, and abuse  by inspecting the farmers’ fields and then referring the results of these  inspections to RMA. However, we found FSA conducted about 64  percent of the inspections RMA requested, and FSA offices in nine  states did not conduct any of the field inspections RMA requested in 1  or more of the years in our review. We also found that FSA may not be  as effective as possible in conducting field inspections because RMA  does not share with FSA information on the nature of anomalous crop  insurance losses and suspected poor farming practices, or the results  of follow-up inspections. In addition, FSA state officials told us that  inspectors are reluctant to conduct field inspections because they  believe RMA and insurance companies that administer the crop  insurance program do not use the information to deny claims for  farmers who do not employ good farming practices. In view of these  weaknesses, we made a number of recommendations to RMA and FSA  to improve the effectiveness of field inspections. In response, RMA  implemented most of our recommendations, but FSA stated that it does  not have sufficient resources to complete all field inspections. We  expect to report in fiscal year 2012 on the results of our work currently  under way in this area examining whether coordination between the  agencies has improved.
Veterinarian workforce. Our past work has indicated that problems  with USDA’s management of its veterinarian workforce have  contributed to competition among USDA agencies for these staff.  Veterinarians play a vital role in the defense against animal diseases— whether naturally or intentionally introduced—and these diseases can  have serious repercussions for the health of animals and humans, and  for the nation’s economy. However, there is a growing shortage of  veterinarians nationwide—particularly those veterinarians who care  for animals raised for food, serve in rural communities, and are trained  in public health. We reported in February 2009 that this shortage has  the potential to place human health, the economy, and nation’s food  supply at risk. Specifically, we found that USDA had not assessed the  sufficiency of its veterinarian workforce departmentwide, despite the  fact that its agencies that employed mission-critical veterinarians were  currently experiencing shortages or anticipating shortages in the  future. As a result, USDA agencies competed against one another for  veterinarians instead of following a departmentwide strategy to  balance the needs of these agencies. In particular, the Animal and Plant  Health Inspection Service (APHIS) was attracting veterinarians away  from the Food Safety Inspection Service because the work at APHIS  was more appealing, opportunities for advancement were greater, and  the salaries were higher. Moreover, USDA was not fully aware of the  status of its veterinarian workforce at its agencies and, therefore, could  not strategically plan for future veterinarian needs.
We recommended, among other things, that USDA conduct an  assessment of its veterinarian workforce to identify current and future  workforce needs while also taking into consideration training and  employee development needs and that a governmentwide approach be  considered to address shortcomings. In response, the Office of  Personnel Management—whose mission is to ensure the federal  government has an effective civilian workforce—and relevant federal  agencies, including USDA, created an interagency forum and developed  a strategic workforce plan to obtain a governmentwide understanding  of the current status and future needs of the federal veterinarian  workforce. This is a positive step, but more work remains. For  example, USDA still needs to complete a departmentwide assessment  of its veterinarian workforce and create shared solutions to agency  problems, which according to a senior agency official, it plans to do by  the end of July 2011. Moreover, steps are still necessary to understand  the veterinarian workforce needed during a potential catastrophic  event—whether a pandemic or an attack on the food supply.
Rural economic development. Our past work indicates that in failing to  find ways to collaborate more, USDA and the Small Business  Administration (SBA) are missing opportunities to leverage each  other’s unique strengths to more effectively promote rural economic  development and that they may fail to use taxpayer dollars in the most  efficient manner. For example, we reported in September 2008 that the  main causes for limited agency collaboration between these agencies  include few incentives to collaborate and an absence of reliable  guidance on consistent and effective collaboration. We found that SBA  and USDA appear to have taken actions to implement some  collaborative practices, such as defining and articulating common  outcomes, for some of their related programs. However, the agencies  have offered little evidence so far that they have taken steps to develop  compatible policies or procedures or to search for opportunities to  leverage physical and administrative resources with their federal  partners. Moreover, we found that most of the collaborative efforts  performed by program staff in the field that we have been able to  assess to date have occurred only on a case-by-case basis. As a result, it  appears that USDA and SBA do not consistently monitor or evaluate  these collaborative efforts in a way that allows them to identify areas  for improvement.
Genetically engineered (GE) crops. GE crops—crops that are  engineered to resist pests or tolerate herbicides—are widespread in the  United States and around the world. USDA, the Environmental  Protection Agency (EPA), and the Food and Drug Administration  (FDA) regulate GE crops to ensure that they are safe. However, critics  of GE crops want them to be labeled as GE crops and kept separate  from non-GE crops. Unauthorized releases of GE crops into food,  animal feed, or the environment beyond farm fields have occurred, and  it is likely that such incidents will occur again. As we reported in  November 2008, USDA, EPA, and FDA routinely coordinate their  oversight and regulation of GE crops in many respects but could  improve their efforts. For example, the agencies do not have a  coordinated program for monitoring the use of marketed GE crops to  determine whether the spread of genetic traits is causing undesirable  effects on the environment, non-GE segments of agriculture, or food  safety—actions that the National Research Council and others have  recommended.
To help ensure that unintended consequences arising from the  marketing of GE crops are detected and minimized, we recommended  in 2008 that the agencies develop a coordinated strategy for monitoring  marketed GE crops and use the results to inform their oversight of  these crops. Such a strategy should adopt a risk-based approach to  identify the types of marketed GE crops that warrant monitoring, such  as those with the greatest potential for affecting the environment or  non-GE segments of agriculture or those that might threaten food  safety through the unintentional introduction of pharmaceutical or  industrial compounds into the food supply. The strategy should also  identify criteria for determining when monitoring is no longer needed.  To date, the agencies have not implemented this recommendation.
section_title: Sufficiency of USDA Management Capacity
paragraphs: USDA must have sufficient internal management capacity to effectively  and efficiently fulfill its multiple missions. As part of the new  governmentwide framework created by GPRAMA, the Director of OMB is  required to develop long-term goals to improve management functions  across the government in various areas, and agencies, including USDA, are  required to describe how their efforts contribute to these goals. Among  these areas are (1) financial management, (2) human capital management,  and (3) information technology. The following are examples, drawn from  our work, of USDA programs where improvements are needed in these  areas:    Financial management. We reported in March 2011 that improper  payment estimates for USDA have increased by about $1 billion—from  approximately $4 billion to a little more than $5 billion from 2009 to  2010. Some USDA programs or activities experienced increases in  improper payments, while others decreased. For example, the level of  estimated improper payments associated with the Federal Crop  Insurance Corporation Program Fund more than doubled during this  time, from $205 million in fiscal year 2009 to $525 million in fiscal year  2010. On the other hand, in April 2011, we noted that USDA reported a  decrease in estimated improper payments for the Marketing Assistance  Loan program from $85 million to $35 million. USDA reported that  corrective actions taken to reduce improper payments included  providing additional training and instruction on improper payment  control procedures, and integrating employees’ individual performance  results related to reducing improper payments into their annual  performance ratings.
Our past work has also highlighted other areas where USDA needs to  strengthen management controls to prevent improper payments. For  example, we reported in October 2008 that USDA provided farm  program payments to thousands of individuals with incomes exceeding  income eligibility caps. We recommended that USDA work with the  Internal Revenue Service to develop a system for verifying the income  eligibility for all recipients of farm program payments, which the  agencies subsequently did. We also reported in July 2007 that USDA  paid $1.1 billion in such payments to more than 170,000 deceased  individuals during the period 1999 through 2005. Because USDA  generally was unaware that these individuals were deceased, it did not  have assurance that these payments were proper. We made  recommendations to address this problem and, in response, USDA  revised and strengthened guidance to its field offices for reviewing the  eligibility of these individuals’ estates to continue to receive payments.  The agency also completed implementation of a data-matching and  review process between its payment files and the Social Security  Administration’s master file of deceased individuals to identify program  payment recipients who are deceased.
Human capital. We have also reported on issues related to problems in  USDA’s civil rights program. For decades, there have been allegations  of discrimination in USDA programs and in its workforce. Numerous  federal reports have described serious weaknesses in USDA’s civil  rights program—particularly in resolving discrimination complaints  and in providing minority farmers with access to programs. In 2002,  Congress authorized the position of Assistant Secretary for Civil Rights  at USDA to provide leadership for resolving these long-standing  problems. In October 2008, we reported that the Office of the Assistant  Secretary for Civil Rights had not achieved its goal of preventing  backlogs of complaints and that this goal was undermined by the  office’s faulty reporting of, and disparities in, its data. Also, some steps  the office took to speed up its work may have adversely affected the  quality of that work.
Because of these concerns, we recommended that the Secretary of  Agriculture implement plans to improve how USDA resolves  discrimination complaints and ensure the reliability of the office’s  databases on customer and employee complaints. We also  recommended that USDA obtain an independent legal examination of a  sample of USDA’s prior investigations and decisions on civil rights  complaints. In addition, we reported that the office’s strategic planning  does not address key steps needed to ensure USDA provides fair and  equitable services to all customers and upholds the civil rights of its  employees. We further recommended that the Secretary of Agriculture  develop a strategic plan for civil rights at USDA that unifies USDA’s  departmental approach with that of the Office of the Assistant  Secretary for Civil Rights and that is transparent about USDA’s efforts  to address the concerns of stakeholders. In April 2009, we reported that  difficulties persisted in the Office of the Assistant Secretary for Civil  Rights in resolving discrimination complaints.
As recently as March 2011, an extensive assessment of civil rights at  USDA raised issues related to many of our 2008 recommendations and  made recommendations consistent with them. This assessment  included a total of 234 recommendations to help USDA improve its  performance on civil rights issues. The administration has committed  to giving priority attention to USDA’s civil rights problems, and the  agency has pointed to progress made in recent years. However, USDA  has been addressing allegations of discrimination for decades and  receiving recommendations for improving its civil rights functions  without achieving fundamental improvements.
Information technology. In recent reports, we have raised concerns  about the overall security of USDA’s computerized information  systems. USDA relies on these systems to carry out its financial and  mission-related operations. Effective information security controls are  required to ensure that financial and sensitive information is  adequately protected from inadvertent or deliberate misuse; fraudulent  use; and improper disclosure, modification, or destruction. Ineffective  controls can also impair the accuracy, completeness, and timeliness of  information used by management. Our analysis of our reports and  USDA’s Office of Inspector General (OIG) reports regarding the  security of these systems shows that USDA has not consistently  implemented effective controls, such as those intended to prevent,  limit, and detect unauthorized access to its systems or manage the  configuration of network devices to prevent unauthorized access and  ensure system integrity. For example, in March and November 2010, we  reported on the need for federal agencies, including USDA, to improve  implementation of information security controls such as those for  configuring desktop computers and wireless communication devices.  The OIG identified information technology security as a significant  management challenge for fiscal year 2010. The need for effective  information security is further underscored by the evolving and  growing cyber threats to federal systems and the dramatic increase in  the number of security incidents reported by federal agencies,  including USDA. From fiscal year 2007 to fiscal year 2010, the number  of incidents reported by USDA to the U.S. Computer Emergency  Readiness Team, based in the Department of Homeland Security,  increased by more than 330 percent.
In summary, as deliberations on reauthorizing the Farm Bill begin,  GPRAMA provides USDA and Congress with new tools to identify and  oversee the most important performance issues and program areas  warranting review. In light of the nation’s long-term fiscal challenge, this  reexamination of the contributions that federal programs, including USDA  programs, make to achieving outcomes for the American people is critical.  GAO stands ready to help Congress in its application of GPRAMA tools to  its oversight of USDA programs and its deliberations on Farm Bill  reauthorization.
section_title: Contacts and Staff Acknowledgments
paragraphs: Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this statement. For further  information about this statement, please contact Lisa Shames, Director,  Natural Resources and Environment, (202) 512-3841 or ShamesL@gao.gov.  Key contributors to this statement were James R. Jones, Jr., Assistant  Director; Kevin Bray; Gary Brown; Mallory Barg Bulman; Ross Campbell;  Tom Cook; Larry Crosland; Mary Denigan-Macauley; Andrew Finkel; Steve  Gaty; Sandra Kerr; Carol Kolarik, Kathy Larin; Benjamin Licht; Paula  Moore; Ken Rupar; Linda Sanders; Carol Herrnstadt Shulman; Nico Sloss;  Kiki Theodoropoulus; and Lisa Turner.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.