oversight

FCA's Awards Program

Published by the Farm Credit Administration, Office of Inspector General on 2017-02-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

OFFICE OF
INSPECTOR GENERAL         Audit Report
                    The Farm Credit Administra on's
                           Awards Program
                               A‐17‐01



                           Auditor‐in‐Charge
                             Tori Kaufman

                       Issued February 23, 2017




                        FARM CREDIT ADMINISTRATION
Farm Credit Administration                                       Office of Inspector General
                                                                  1501 Farm Credit Drive
                                                                  McLean, Virginia 22102-5090




February 23, 2017

The Honorable Dallas P. Tonsager, Board Chairman
The Honorable Kenneth A. Spearman, Board Member
The Honorable Jeffery S. Hall, Board Member
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

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

The Office of Inspector General (OIG) completed an audit of the Farm Credit Administration’s (FCA or
Agency) Awards Program. The objective of this audit was to determine if FCA is following policies and
procedures and has adequate controls over awards and incentives.

We found an adequate control structure was in place, and an internal control review process was
developed for awards and recognition. We identified opportunities to improve FCA’s awards program. In
response to our report, the Office of Agency Services agreed to:

 1. Provide education to supervisors and managers on:
      • Criteria for awards and approval, including requirements that awards are not based on
          performance of overall job responsibilities over a sustained period of time and
      • Expectations for justifications in the awards database.

 2. Modify the awards database to address the following:
     • Multiple approvals are not completed by the same employee and approvals are not
         completed by the recipient or recommender;
     • Controls over time-off award amounts and limits in Agency policy; and
     • Approval routings are appropriate and reflect documented procedures.

 3. Revise policies and procedures to reflect FCA’s current awards program, including:
      • Guidance for award amounts that are not based on tangible, monetary benefits or are
          awarded as time-off;
      • Appropriate uses for the OAS-entered function in the awards database;
      • Grossing up awards;
      • Award nomination, recommendation, and approval procedures;
      • Required reporting;
      • Time-off for new parents; and
      • Types of awards.
 4. Complete reimbursement of the award made to a Schedule C employee during the restricted
    presidential election period.

We appreciate the courtesies and professionalism extended by FCA personnel to the OIG staff. If you
have any questions about this audit, I would be pleased to meet with you at your convenience.


Respectfully,




Elizabeth M. Dean
Inspector General

Enclosure
RESULTS:
To improve controls over FCA’s awards program,
the Office of Agency Services (OAS) agreed to:

  1.   Provide education to supervisors and
       managers on:                                   The core mission of the Farm Credit Administration (FCA or Agency) is to
         • Criteria for awards and approval,          ensure a safe, sound, and dependable source of credit and related
             including requirements that              services for agriculture and rural America. Employee awards and
             awards are not based on                  recognition can motivate and acknowledge employees to effectively
             performance of overall job               achieve this mission. FCA’s awards program incorporates various types of
             responsibilities over a sustained        awards, which are generally in the form of cash or time-off. Award
             period of time and                       decisions and spending are discretionary.
         • Expectations for justifications in
             the awards database.                     The objective of this audit was to determine if FCA is following its policies
                                                      and procedures and has adequately implemented controls over awards
  2.   Modify the awards database to address
                                                      and incentives. We noted opportunities to improve FCA’s awards
       the following:
                                                      program. Specifically:
         • Multiple approvals are not
               completed by the same employee
               and approvals are not completed            •    We identified award justifications lacking sufficient detail. We
               by the recipient or recommender;                identified several large cash and time-off awards where the
         • Controls over time-off award                        reason for the award appeared to be based on the employee
               amounts and limits in Agency                    performing their overall job duties in an outstanding or superior
               policy; and                                     manner over a sustained period of time, which is contrary to
         • Approval routings are appropriate                   Agency policy.
               and reflect documented
               procedures.                                •    A few awards in our sample included multiple approvals by the
                                                               same employee, an approval by the award recipient, or an
  3.   Revise policies and procedures to reflect               approval by the award recommender, thereby overlooking an
       FCA’s current awards program, including:                intended control. We also identified monetary and time-off
         • Guidance for award amounts that                     awards for which approvals were not documented in
              are not based on tangible,                       accordance with Agency policy.
              monetary benefits or are awarded
              as time-off;
                                                          •    One Schedule C employee received an award during the
         • Appropriate uses for the OAS-
                                                               restricted presidential election period, and OAS took action to
              entered function in the awards
                                                               process re-payment of the award during our review.
              database;
         • Grossing up awards;
         • Award nomination,                              •    Policies and procedures manual 818, Incentive Awards and
              recommendation, and approval                     Recognition, is outdated. The need to update it was previously
              procedures;                                      identified as part of the Agency’s 2012 internal control review,
         • Required reporting;                                 and we identified additional areas needing improvement.
         • Time-off for new parents; and
         • Types of awards.                           Agency officials agreed with our report and provided tasks to be
                                                      completed, including: educating officials, revising the awards database,
  4.   Complete reimbursement of the award
                                                      updating policies and procedures, and finalizing award reimbursement
       made to a Schedule C employee during
       the restricted presidential election period.   from a Schedule C employee.
                                  TABLE OF CONTENTS



BACKGROUND _______________________________________________________ 1

AUDIT RESULTS______________________________________________________ 4

 Award Justifications ________________________________________________________________ 4

 Award Approvals ___________________________________________________________________ 5

 Policies and Procedures _____________________________________________________________ 7

 Agreed-Upon Actions 1-4 ____________________________________________________________ 8

OBJECTIVE, SCOPE, AND METHODOLOGY _______________________________ 9

ACRONYMS ________________________________________________________ 10
BACKGROUND

    The Farm Credit Administration (FCA or Agency) is an independent federal agency responsible for
    regulating, examining, and supervising the Farm Credit System and the Federal Agricultural Mortgage
    Corporation. The core mission of the Agency is to ensure a safe, sound, and dependable source of credit
    and related services for agriculture and rural America. Employee awards and recognition can motivate
    and acknowledge employees to effectively achieve this mission. Chapter 45 of Title 5 United States Code
    authorizes agencies to pay cash awards, grant time-off, and incur expenses for honorary recognition of
    an employee. The Office of Personnel Management prescribes regulations that establish requirements
    for agency awards programs.

    FCA’s Office of Agency Services (OAS) has responsibility over the awards program. FCA encourages
    supervisors and managers to recognize employee accomplishments and contributions. Different types of
    awards are granted based on the nature of the accomplishment and its impact to the Agency, including:


            Letters of Commendation/Appreciation

            •An employee's supervisor writes a memorandum to acknowledge exemplary
             accomplishment of a task or service.

            Achievement or Special Act Award

            •A cash or time-off award for a unique or special act or service which is
             nonrecurring, an act of heroism, or performance of a specific job responsibility or
             significant project/assignment in a superior manner.

            On-The-Spot Cash Award

            •Small but meaningful accomplishments by employees that perform specific
             assignments in an exceptional manner or who have made contributions outside
             of normal performance plan expectations. These awards may range from $25 to
             $500.

            Peer to Peer On-The-Spot Award

            •Awards designed to encourage employees to recognize and reward fellow
             employees for exceptional work. Each non-supervisory employee may give one
             $50 peer to peer award per quarter.

            Nonmonetary Award

            •Employees may be recognized for specific accomplishment through the use of
             nonmonetary items of nominal value purchased with Agency funds.




                                                        1
Awards for significant contributions and accomplishments are also recognized at FCA’s yearend awards
ceremony. Nominations for the Chairman’s Award, Distinguished Service Award, and Impact Award are
submitted by senior officials. All Agency employees may nominate employees for the Diversity
Leadership or Plain Writing Award. Most awards may be given to one or several employees, and the
amount of the award may vary from year to year and recipient to recipient.

    •   Chairman's Award- The highest recognition awarded by the Agency for distinctively sustained
        superior career service or exceptionally outstanding achievement with Agency-wide or unique
        significance related to the accomplishment of the Agency's mission.

    •   Distinguished Service Award- The second highest recognition awarded by the Agency for
        significant service or achievement of major importance to the Agency, its programs, or
        functions.

    •   Impact Award- The award is for new employees (1-5 years at the Agency) that have made a
        significant contribution to the Agency in terms of policy development, operational
        improvements, examination enhancements, or other meaningful change.

    •   Diversity Leadership Award- This award is made by the Office of Equal Employment
        Opportunity and Inclusion to recognize individuals who have demonstrated significant
        commitment to enhancing diversity and inclusion at FCA. All Agency employees may submit
        nominations for this award.

    •   Plain Writing Award- This award is made by the Office of Congressional and Public Affairs based
        on Agency nominations. The selection is based on the document that best exemplifies clear,
        effective writing. All Agency employees may submit nominations for this award.

Supervisors may exercise their discretion to provide monetary and nonmonetary awards to employees
where appropriate and merited. Non-supervisory employees generally only provide peer to peer awards
as allotted (one per quarter). FCA awards are predominantly in the form of cash or time-off. Time-off is
leave that is not charged to an employee’s leave account, which must be used within 1 year from the
date of award.

FCA tracks and processes awards through an internal database. The awards database included the
following made from each office:




                                                   2
                    Approved Awards by Office from September 2014 to December 2016

                                                  Count of     Sum of Time-off Sum of Total Award
    Office                                        Total Awards Hours Awarded Amounts ($) 1
    Office of Examination                                1,160            297              259,575
    Office of Management Services/Office of
    Agency Services 2                                         269              2657 3                 206,850 4
    Office of Regulatory Policy                               106                130                    41,000
    Office of Secondary Market Oversight                       83                 42                    30,350
    Office of General Counsel                                  62                  0                    20,050
    Office of Information Technology                           47                 18                    25,350
    FCA Board                                                  36                  0                    21,967
    Office of Equal Employment Opportunity
    and Inclusion                                               29                  0                  11,750
    Office of Congressional and Public Affairs                  20                  0                   7,750
    Office of Inspector General                                  4                  0                   2,750
    Office of the Chief Financial Officer 5                      3                  0                   4,000
    Office of the Chief Operating Officer                        2                 40                      50
    Grand Total                                              1,821              3,184                $631,442

When an employee is recommended for an award, the recommender enters the reason and type of
award in the database. Each special act award and on-the-spot award must be approved by an
appropriate supervisor and management official who has budget control authority. If the recommender
meets these criteria, the only remaining required approval is from an OAS review official. If an award
amount is over $2,500, the award must also be approved by FCA’s Chief Operating Officer.

Policies and Procedures Manual (PPM) 818, Incentive Awards and Recognition, describes FCA’s awards
program and related policies and procedures. PPM 818 was updated in March 2016 to reflect the
Agency’s new policy to award each new parent 80 hours of time-off. Additional guidance in FCA’s policy
addresses appropriate uses of achievement awards and ways to determine appropriate award amounts.

FCA’s compensation program incorporates a pay-for-performance system to reward employees.
Employees may receive merit pay increases and executives may be eligible for performance-based
bonuses. Section 5.11 of the Farm Credit Act of 1971, as amended, states, “The Chairman may provide
such additional compensation and benefits to employees of the Administration as is necessary to

1
  The sum of award amounts is not equal to the amounts paid by FCA. Specifically, FCA grosses certain awards so
that they are paid net of tax and the employee receives the dollar amount awarded. This method is used for on-
the-spot and peer to peer awards.
2
  In April 2016, FCA divided functions of the Office of Management Services (OMS) into two separate offices. This
impacts hours and amounts distributed. The name of OMS was changed to the Office of Agency Services (OAS).
OAS consists of two divisions: the Operations Division and the Human Resources Division.
3
  Time-off awards for new parents throughout the Agency were generally awarded through OAS. Nineteen new
parent awards for 80 hours each (1520 hours) are included in this total.
4
  Yearend awards are generally budgeted and awarded through OAS. This includes Chairman’s, Distinguished
Service, and Impact Awards.
5
  The Finance Team from OMS was moved to the newly established Office of the Chief Financial Officer.



                                                         3
     maintain comparability with the total amount of compensation and benefits provided by other Federal
     bank regulatory agencies.” We did not include performance-based salary adjustments and bonuses in
     our review.


AUDIT RESULTS

     The objective of this audit was to determine if FCA is following policies and procedures and has
     adequate controls over awards and incentives.

     FCA has an adequate control structure in place for awards. An internal control review process was
     developed for awards and recognition. The last review was completed in 2012 and identified outdated
     policies and procedures. The next planned review is scheduled for Fiscal Year 2017. In addition, an
     internal control review of salaries and compensation completed in 2016 addressed awards. The
     Agency’s review encompassed award authorization and payment in the awards database, the National
     Finance Center, and electronic official personnel folders.

     We identified opportunities to improve controls over FCA awards. We noted issues with award
     justifications and approvals. In addition, PPM 818, Incentive Awards and Recognition, did not fully reflect
     the Agency’s awards processes.

     Award Justifications

     For yearend awards, nominations are solicited from senior staff or other employees, and recipients are
     selected at the discretion of FCA’s Chief Operating Officer and Board. Other FCA award
     recommendations are submitted through the awards database; submissions must include the type of
     award and reason for the award. Our review revealed some awards lacking substantiation. We identified
     several large cash and time-off special act or service awards where the reason for the award appeared
     to be based on the employee performing their overall job duties in an outstanding or superior manner
     over a sustained period of time. PPM 818 includes the following guidance specifying where a special act
     or service award would not be appropriate:



         “An achievement award would not be appropriate in either of the following cases:

             1.    Where an employee has performed his/her overall job duties in an outstanding or superior
                   manner over a sustained period of time. (The annual performance evaluation should be
                   the vehicle for recognizing such achievement.)

             2.    Where an employee, or group of employees, has contributed substantial overtime effort
                   and/or used his/her/their own resources to successfully perform the regular duties of the
                   job under normal circumstances. This would be typical where cyclical or recurring
                   processes produce annual or semiannual workload peaks and resources are insufficient to
                   accomplish the task within the normal time and resource constraints. (Overtime or
                   compensatory time should be provided, as appropriate.)”




                                                           4
For 41 of the 202 awards we sampled, the reason for the special act or service award in the database
appeared to be based on the employee performing their overall job duties in an outstanding or superior
manner over a sustained period of time. These 41 awards totaled about $41,000 and 760 hours of time-
off. In addition, many of these awards were made to the same individuals at yearend in consecutive
years. Although time-off awards are not a cash disbursement, there is a cost involved for salary dollars
paid for time not worked. Each of these 760 hours of time-off was awarded to an office director or
executive.

Examples of justifications in awards that addressed overall job responsibilities over time included:

    •   A $4,478 award included a reason for award “For exceptional service throughout the past fiscal
        year.”
    •   A $3,500 award included in the reason for award “…consistent efforts and attention to detail… is
        also recognized and appreciated for willingness to pitch in whenever that work needs to be
        done…”
    •   40 hours of time-off for 7 individuals included in the reason for award “…recognized for superior
        performance in leadership over the past several years which warrants collective
        acknowledgement. Most recently this motivated, competent and professional team has worked
        collaboratively to produce exceptional results for the Agency. They have accomplished much
        during the last year…”
    •   A $1,500 award included a reason for award “For special efforts made during my transition to
        the FCA.”
    •   Two $1,000 awards included a reason for award “Outstanding support during 2016.”

It is important that awards are not used for the same achievements that are recognized and rewarded
through salary adjustments and bonuses. FCA’s compensation program includes performance-based
salary adjustments. Any amount of pay adjustment that exceeds the employee’s pay range is paid as a
performance bonus, which is not creditable for calculating retirement or other benefits.

In addition, when an award justification does not contain sufficient detail, it is difficult to ensure award
amounts are commensurate with the accomplishment being rewarded. PPM 818 includes guidance for
determining award amounts based on estimated first-year monetary benefits to the government. This
guidance does not address time-off awards nor does it explain how justifications should support award
amounts that are not based on tangible, monetary benefits to the Agency.

The awards database contains a field for the recommender to describe the reason for the award and
amount. To ensure applicable requirements are addressed, the recommender needs to reference
criteria in PPM 818. Additional instructions, criteria and/or guidance in the database could help to
ensure award justifications cover Agency requirements and support the amount selected. This type of
additional detail will also be useful for approvers to ensure the type of award and award amount is
appropriate. Because awards spending is discretionary, it is important to ensure decisions are supported
and documented and address criteria in Agency policy.

Award Approvals

FCA established different approval requirements for each type of award. PPM 818 states, each special
act or service award and on-the-spot award must be approved by a supervisor, an employee with



                                                      5
budget authority, and an OAS official. Smaller $50 peer to peer awards are only approved by the
recommender’s supervisor. Because awards are paid from the budget of the office recommending the
award, it is important to maintain budgetary control. In addition, PPM 818 states, “Awards above $2,500
require Chief Operating Officer approval.” Once an award has received all necessary approvals, it is
processed for payment by OAS.

We identified various weaknesses and inconsistencies related to award approvals:

     •   6 awards had both levels of approval by the same individual. 9 awards had the same
         recommender and OAS review official. We also noted 2 awards where the award recipient was
         one of the approvers; 1 award was for $1,000 and the other was for 40 hours of time-off.

     •   PPM 818 states “Time-off may be granted in lieu of or in addition to cash… It may be granted
         up to a total of 160 hours during a leave year, in amounts of up to 40 hours (80 hours for new
         parent awards) at a time for each contribution.” Two awards were made that exceeded 40
         hours and were not for a new parent. Each award was for 48 hours of time-off. In addition,
         another employee received two 40-hour awards on the same day.

     •   FCA’s awards database was designed with a separate function so that an OAS official can enter
         an award on behalf of other employees. This function was mostly used for yearend awards.
         For example, the OAS Director may enter the award amount and the award nomination write-
         up for Chairman’s and Distinguished Service awards on behalf of the FCA Chairman and COO.
         When awards are entered using this function, approvals are not automated and documented
         in the awards database. During our review, we noted examples of awards entered using this
         function that were not part of FCA’s yearend awards ceremony. Two of these awards were for
         $3,500 each and approval by the COO was not documented.

     •   Section 4508 of title 5 United States Code prohibits Senior Executive Service employees who
         are not career appointees and employees in confidential or policy-determining Schedule C
         positions from receiving awards during a Presidential election period. This period is defined as
         beginning on June 1 in a calendar year in which the popular election of the President occurs
         and ends on January 20 following the election date. A $200 award was made to a Schedule C
         employee in August 2016. The Agency took action and was in the process of invoicing the
         employee to repay the award as of January 2017. The Agency cancelled another award
         submitted for the same employee during November 2016 for 40 hours of time-off before it
         was processed.

     •   The awards database required additional approvals for certain on-the-spot awards that were
         not required for special act or service awards, which are generally for larger amounts. For
         example, two awards in our sample were recommended by the same employee for the same
         recipient. One award was an on-the-spot award for $250 approved by the recommender’s
         supervisor, recommender’s budget authority, and an OAS review official. Conversely, the
         $1,000 special act or service award was only approved by the recommender’s budget
         authority and an OAS review official.

Two officials are designated authority to approve awards as the OAS review official. Only one of these
employees has budget authority. When an OAS review official recommends an award or is the award



                                                   6
recipient, it can create conflicts in the awards database because awards must be approved by an OAS
review official and an employee with budget authority.

PPM 818 requires awards above $2,500 to be approved by the Chief Operating Officer. A
complementary control to review and approve time-off awards exceeding a set amount was not
established. The awards database was modified so that an employee cannot enter a time-off award
exceeding 80 hours, which corresponds to FCA’s new parent policy. However, this change allowed
employees to enter time-off awards that exceeded the 40-hour maximum contribution stipulated in
PPM 818 for time-off awards (other than new parent time-off).

The Agency’s 2016 internal control review encompassing salary and compensation noted internal
procedures should be documented for awards processing. Procedures for recommending and granting
different types of awards are included in PPM 818. However, procedures related to processing awards
and use of the special function for OAS to enter awards is not addressed. Because FCA’s awards
database may not have capabilities to automate all necessary controls, additional internal procedures
may be necessary to ensure requirements are addressed.

Policies and Procedures

PPM 818 was modified in March 2016. However, the policy did not reflect FCA’s current awards process.
FCA’s 2012 internal control review of Awards and Recognition found that PPM 818 was outdated for
organizational and procedure changes. Specifically, the PPM references an “awards committee” that no
longer exists and refers to hardcopy processing rather than use of the awards database. The PPM had
not been revised to address the changes identified in the 2012 internal control review.

We noted additional items that should be addressed in PPM 818:

     •   The policy does not address grossing up awards. Grossing up refers to raising the total amount
         of funds to be authorized for a cash award so that the net amount after required tax
         withholding will be the amount entered for the award by the recommender. FCA uses this
         grossing up method for peer to peer awards and on-the-spot awards, which could range from
         $25 to $500 dollars. We also noted special act or service awards in our scope for which the
         award justification said the award amount was based on the employee receiving a specific
         dollar amount net of tax. If an award is grossed up, the supervisor with budget authority is not
         presented with the true cost of the award as it will impact their budget.

     •   Procedures for award recommendations and approvals were not consistent with FCA’s current
         process. For both special act or service and on-the-spot awards, PPM 818 states,
         “Recommendations may be initiated by any FCA employee…If the initiator is an employee,
         concurrence must be obtained from the supervisor of the employee being recommended.” We
         found only supervisory or managerial employees may submit these types of awards, and they
         were generally not approved by the recipient’s supervisor.

     •   The policy states “Annually, the Director, OMS, will provide a report evaluating the
         effectiveness of the program and any procedural changes needed to carry out the policy.” The
         report format, recipient, and timeframe for issuance were not addressed.




                                                    7
     •   FCA developed a new maternity and paternity program that includes an 80-hour time-off
         award for new parents. In a news release, FCA described this new benefit as “an incentive to
         attract and retain highly-qualified staff…” Unlike the defined purpose of an award, this is a
         benefit processed as an award rather than for recognition for accomplishment or other efforts
         that contribute to the quality, efficiency, or economy of Government operations.

     •   FCA granted Impact Awards and Plain Writing Awards as part of the annual awards ceremony.
         These awards were not included in PPM 818.

Agreed-Upon Actions 1-4

To improve controls over FCA’s awards program, OAS agreed to:

 1. Provide education to supervisors and managers on:
      • Criteria for awards and approval, including requirements that awards are not based on
          performance of overall job responsibilities over a sustained period of time and
      • Expectations for justifications in the awards database.

 2. Modify the awards database to address the following:
     • Multiple approvals are not completed by the same employee and approvals are not
         completed by the recipient or recommender;
     • Controls over time-off award amounts and limits in Agency policy; and
     • Approval routings are appropriate and reflect documented procedures.

 3. Revise policies and procedures to reflect FCA’s current awards program, including:
      • Guidance for award amounts that are not based on tangible, monetary benefits or are
          awarded as time-off;
      • Appropriate uses for the OAS-entered function in the awards database;
      • Grossing up awards;
      • Award nomination, recommendation, and approval procedures;
      • Required reporting;
      • Time-off for new parents; and
      • Types of awards.

  4. Complete reimbursement of the award made to a Schedule C employee during the restricted
     presidential election period.

The Agency agreed with our report. OAS stated it would provide education on award criteria and
expectations for award justifications; review and update the awards database; revise policies and
procedures; and complete reimbursement of the award made to a Schedule C employee.




                                                   8
OBJECTIVE, SCOPE, AND METHODOLOGY

     The objective of this audit was to determine if FCA is following policies and procedures and has
     adequately implemented controls over awards and incentives. We conducted fieldwork at FCA’s
     Headquarters in McLean, VA from November 2016 through February 2017. We limited our scope to
     FCA’s awards from September 2014 through December 2016. We did not include performance-based
     salary adjustments and bonuses in our review 6.

     We took the following steps to accomplish the objective:

         •   Identified and reviewed applicable laws, regulations, and other guidance related to the
             objective.
         •   Reviewed prior audits and other reviews related to the audit objective.
         •   Analyzed policies, procedures, and internal control plans and reviews related to awards.

         •   Conducted interviews with Office of Agency Services and Office of Information Technology
             officials, the Chief Operating Officer, and employees with responsibility for the award process.
         •   Determined the type, amount, and number of awards made by each office in the audit scope.
         •   Reviewed the Agency’s awards program and compared it to processes documented in policies
             and procedures.
         •   Sampled 202 awards in the awards database from September 2014 through December 2016.
             We reviewed approvals for each award documented in the awards database and analyzed
             justifications for each award. We selected our sample based on various factors including: award
             amount (monetary and time-off); type of award; timing of award; recommender and recipient;
             and approval status. The sample was judgmental and cannot be projected over the entire
             population.

         •   Reviewed list provided by OAS of political appointees and Schedule C employees at the Agency
             and determined whether awards were made during the restricted presidential election period.
      This audit was performed in accordance with the Generally Accepted Government Auditing Standards.
      Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence
      to provide a reasonable basis for our findings and conclusions based on our audit objectives. We
      assessed internal controls and compliance with laws and regulations to the extent necessary to satisfy
      the objective. Because our review was limited, it would not necessarily have disclosed all internal
      control deficiencies that may have existed at the time of our audit. We assessed the computer-
      processed data relevant to our audit objective and determined the data was sufficiently reliable. We
      assessed the risk of fraud related to our audit objectives in the course of evaluating audit evidence.
      Overall, we believe the evidence obtained provides a reasonable basis for our conclusions based on our
      audit objective.

     6
       In addition to awards and incentives included as other premium and differential pay, FCA categorizes other costs
     as incentives. These may include reimbursement for professional liability insurance, retention allowances,
     recruitment bonuses, public transportation initiatives, and student loan repayment. These categories were not
     included in our review.



                                                             9
ACRONYMS


           FCA   Farm Credit Administration

           OAS   Office of Agency Services

           OIG   Office of Inspector General

           OMS   Office of Management Services

           PPM   Policies and Procedures Manual




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    R E P O R T

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