oversight

FY 2003

Published by the Farm Credit Administration, Office of Inspector General on 2004-07-01.

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

Office of
Inspector General




                     FISCAL YEAR 2003
               PERFORMANCE MEASURES




                          July 2004
                                               TABLE OF CONTENTS


Executive Summary ............................................................................................................ Page 1

Audits and Inspections........................................................................................................ Page 2

Investigations ...................................................................................................................... Page 5

Legislative and Regulatory Review..................................................................................... Page 6

Outreach ............................................................................................................................. Page 7

Appendix 1
                     Farm Credit Administration
                     Office of Inspector General
                   FY 2003 Performance Measures

                                 EXECUTIVE SUMMARY
The Office of Inspector General (OIG) of the Farm Credit Administration (FCA or Agency) met
or surpassed its target or goals for performance in Fiscal Year (FY) 2003. Goals pertain to:

   ƒ   audits and inspections,
   ƒ   technical assistance to agency officials and management,
   ƒ   continuous improvement of the OIG staff,
   ƒ   investigation of administrative and criminal violations,
   ƒ   reviewing and commenting on legislation and regulations affecting the agency and the IG
       community, and
   ƒ   outreach.

During this reporting period the OIG issued a program audit involving the Loan Account
Reporting System and the audit of the FY 2002 Financial Statements. There were no material
findings during the audit of the financial statement or the review of the information security.

An inspection involving FCA Board Policies was issued, as well as a review of the Federal
Information Security Management Act (FISMA), Electronic Government (e-Government) at the
agency, and management advisories and several management informational memoranda. These
products addressed risk to the agency. All products were timely and constructive. Over 80% of
the products contained recommendations to improve agency operations.

The OIG collects data from a survey that is used by the agency for an ongoing performance
measurement in the areas of safety and soundness of financial institution examination. OIG
initiated a transition from delivering the survey and collecting the results on paper to electronic
delivery and receipt of survey.

Audit survey feedback improved slightly from last year and we are attempting to get feedback on
other products.

An investigation led to a management advisory aimed at improving administration of leave. The
FCA Board also asked for a briefing on continuity of operations following OIG’s issuance of a
thorough checklist and advisory on that topic.

A measure of our success is contributing to the agency’s continuous adaptation of sound
business practices and basic integrity. We are hopeful that the agency will continue to show firm
commitment to decision-making and follow-up to improve operations and programs.

The OIG welcomes comments and suggestions related to performance in areas to address.
                                             Farm Credit Administration
                                             Office of Inspector General
                                           FY 2003 Performance Measures
                                                           AUDITS AND INSPECTIONS
    Objective—Audit and evaluate the Agency’s programs and operations to promote economy, efficiency and effectiveness.

Performance Goal 1—Deliver quality audit and inspection products and services that are useful to the Board.
                           OUTPUT/CRITERIA                                                                OUTCOME/IMPACT
Audits and inspections are relevant. Audit coverage includes all             FCA programs and operations are more effective. Waste in agency
mandated audits and at least 75% of those suggested by the Board and         programs and operations is reduced. Better business practices are
management. Risk is addressed. 100% of the OIG audits are                    initiated.
performed in high risk/high dollar programs and activities and/or are tied
                                                                                 ƒ   FCA continues to improve and develop mechanisms to streamline
to the agency strategic planning goals.
                                                                                     budget data to products and services.
    ƒ   OIG contracted with a CPA firm to review FCA’s mission critical
                                                                                 ƒ   Unqualified opinion for agency financial statements. Security of
        system under the Federal Information Security Management Act
                                                                                     information validated through FISMA review.
        (FISMA) and by auditing FCA’s financial statements.
                                                                                 ƒ   Reimbursement formula for services is upgraded. FCA reports to
Findings made during audit fieldwork are recognized and corrected by
                                                                                     Office of Management and Budget (OMB) on progress of updating
management prior to drafting of the audit or inspection report.
                                                                                     continuity of operations and certification of information security
Products are timely, i.e., average time to complete audits and issue draft           systems.
reports will not exceed six months.
                                                                                 ƒ   Agency moved ahead in developing more comprehensive continuity
Audits are constructive. At least 75% of audit products contain                      of operations plan following checklist and guidance issued by the
recommendations to improve agency operations. The agency accepts                     OIG.
at least 80% of the OIG audit recommendations. The agency actually
                                                                                 ƒ   Agency has utilized factors identified by the OIG to market FCA as
implements all corrective actions prescribed by management decisions.
                                                                                     an outstanding place to work and to attract and retain valuable
    ƒ   100% of audit products contain recommendations to improve                    employees.
        agency operations.
                                                                             FCA is more effective in carrying out its mission.
    ƒ   The agency accepted 90% of audit recommendations.
                                                                                 ƒ   Plans are prepared to redesign the Loan Account Reporting
    ƒ   All audits were performed within six month.                                  System to be more comprehensive and useful for more mission-
                                                                                     related purposes.
   See Appendix 1 for details of audits and inspections.
    ƒ   An inspection of FCA Board Policies issued on September 15,
        2003, awaits management decision on three recommendations.
        This inspection was completed in less than three months.
                                           Farm Credit Administration
                                           Office of Inspector General
                                         FY 2003 Performance Measures
                                                        AUDITS AND INSPECTIONS
   Objective—Audit and evaluate the Agency’s programs and operations to promote economy, efficiency and effectiveness.

Performance Goal 2—Provide technical advice and assistance to agency official in developing sound management information
and financial reporting systems and in streamlining programs and organizations.
                          OUTPUT/CRITERIA                                                            OUTCOME/IMPACT
Assist the agency in building continuous, meaningful measures with      OIG input and advice contributes to agency decisions and actions that are
outcomes important to their stakeholders.                               more complete and valid at their inception.
The IG advises the Chairman concerning policy direction or                  ƒ   Upgrade of recording equipment in the Board room occurred, in
administrative priorities.                                                      part, due to OIG interest in issue involving the taping of a closed
                                                                                session.
   ƒ   An ongoing survey conducted by the OIG to preserve anonymity
       and integrity, involves the effectiveness of the examination         ƒ   The agency is working on updating the COOP. The CIO used the
       function. Results are benchmarked from year to year and are              advisory rather than contract for a review of their emergency
       used by the agency for ongoing performance measurement.                  preparedness which saved the agency funds.
   ƒ   The IG advised the Chairman of the FCA that it would be          Increase in management request for advice, audit work or technical
       prudent to link FCA’s Strategic Plan with the President’s        assistance.
       Management Agenda.
                                                                            ƒ   Regularly management requests the OIG to validate changes in
   ƒ   An advisory was issued on March 31, 2003 on the Contingency              business practices. The OIG is a laboratory of change, a model for
       of Operation Plans (COOP). This advisory was also presented              best practices. The agency has revised performance evaluation
       to the Board at a regular Board meeting. The advisory provided           plans on those used by the OIG. The OIG’s budget preparation,
       a current status of FCA’s emergency preparedness and a                   with linkage to performance measures was used as a model for the
       checklist of areas that need to be addressed.                            agency.
The OIG performs analysis and provides technical advice to                  ƒ   The OIG advisory on the COOP resulted in a Board presentation
management concerning accounting, management systems and                        and OIG expertise in guiding the agency effort tot draft a more
controls, and performance measures.                                             comprehensive plan.
   ƒ   An advisory on new employee processing was issued on May             ƒ   The agency provided education on certain leave matters to
       21, 2003, suggesting reducing redundancy and streamlining.               management as a result of advice from the OIG stemming from
                                                                                investigative matters.
   ƒ   The IG identifies management’s top challenges in the
       semiannual reports, the agency’s performance report, and the         ƒ   The OIG advised the agency on need for more rigorous controls on
       audit of the financial statements.                                       fuel cards for agency cards.
                                              Farm Credit Administration
                                              Office of Inspector General
                                            FY 2003 Performance Measures
                                                           AUDITS AND INSPECTIONS
    Objective—Audit and evaluate the Agency’s programs and operations to promote economy, efficiency and effectiveness.

Performance Goal 3—Continuous improvement of the OIG staff, products and internal administration. Quality is highly valued.
                            OUTPUT/CRITERIA                                                             OUTCOME/IMPACT
Customer survey feedback is used to improve products and services.         Peer review reports provide an unqualified opinion that the OIG audit work
                                                                           meets or exceeds quality audit standards prescribed by GAO and the
    ƒ   Audit feedback averaged a rating of 4.5 (5 being the highest
                                                                           President’s Council on Integrity and Efficiency/Executive Council on
        grade 1 being the lowest). The OIG team is developing
                                                                           Integrity and Efficiency (PCIE/ECIE).
        feedback instruments for inspections and other reviews as well.
                                                                               ƒ   Peer review of the OIG audit component was last conducted in
OIG training ensures the technical proficiency of staff.
                                                                                   2000. A peer review is scheduled in 2003.
    ƒ   The OIG team has taken technical courses to gain proficiencies:
                                                                               ƒ   The OIG participated in a pilot peer review of the investigation
        Qualitative Application in Administrative Decision Making,
                                                                                   function.
        FISMA Update, Economic Crime Summit, IG Public Corruption
        and Integrity Investigation, Government Purchase Cards, and            ƒ   The OIG conducted a peer review of the National Labor Relations
        Introductory to Auditor Training. In addition PCIE/ECIE training           Board OIG’s audit operation.
        sessions and legal forums are attended. The OIG team also
                                                                           Customer survey feedback evidences increased satisfaction with report
        stays current in FCA operations training courses and strategic
                                                                           practices.
        management initiatives.
                                                                               ƒ   Audit survey feedback was positive. On a scale of 1 to 5 (5 being
OIG implements administrative improvements identified through reviews
                                                                                   the highest grade) survey results were 4.5. FY 2001 rating was
of the agency programs and through staff involvement with the
                                                                                   4.4.
professional community.
                                                                           The IG’s opportunity to facilitate positive change within the agency is
                                                                           enhanced by the quality and credibility of OIG products and advice.
                                             Farm Credit Administration
                                             Office of Inspector General
                                           FY 2003 Performance Measures
                                                                 INVESTIGATIONS
        Objective—Investigate observed, alleged or suspected wrongdoing to prevent and detect fraud, waste, abuse and
                                    mismanagement in Agency programs and operations.

Performance Goal 1—Administrative and criminal violations relating to FCA programs and personnel are effectively
investigated and reported. Agency officials and the Congress are information of problems.
                           OUTPUT/CRITERIA                                                               OUTCOME/IMPACT
Investigative reports are timely and presented in an objective and factual   Administrative action, convictions or pleas are obtained for employees
manner. Memoranda are issued to management describing internal               and/or contractors found guilty of wrongdoing.
control weaknesses or program deficiencies found during the
investigative process with suggestions to prevent and/or detect future       Management actions taken against employees serve as deterrent to future
wrongdoing.                                                                  wrongdoing.

    ƒ   Three investigations were open at the beginning of FY 2003;          FCA internal policies, procedures, and controls are strengthened to prevent
        four additional investigations were opened during the year. Two      and/or detect future wrongdoing.
        were unsubstantiated and closed. One investigation, involving
        allegations concerning leave was substantiated and                   Public confidence in the integrity of FCA programs and internal operations
        management was advised to make administrative changes to             are heightened.
        existing practices. Investigations took from one to three months.
        Three substantiated investigations were completed in less than           ƒ   Investigations involving purchase and travel card abuses led to a
        3 months. Two unsubstantiated took approximately three and a                 tightening of controls over the credit cards. Also included
        half months to complete. One investigation was proactive and
        we did a threat assessment to ensure agency employee safety.             ƒ   OIG published newsletter article on appropriate handling of mail.
                                           Farm Credit Administration
                                           Office of Inspector General
                                         FY 2003 Performance Measures
                                                                INVESTIGATIONS
        Objective—Investigate observed, alleged or suspected wrongdoing to prevent and detect fraud, waste, abuse and
                                    mismanagement in Agency programs and operations.

Performance Goal 2—FCA employees and managers recognize their responsibility to immediately report observed or
suspected wrongdoing to the OIG..
                          OUTPUT/CRITERIA                                                            OUTCOME/IMPACT
Allegations of wrongdoing are received in a timely manner and are        Investigations are more successful because they are initiated in a timely
supported by specific information.                                       manner and have better information.

   ƒ   Some anonymous complaints are vague, lacking sufficient           FCA employees are more willing to report real or suspected wrongdoing
       information to pursue an investigation. As a result, the OIG is   because they trust the competence and fairness of OIG’s investigations.
       developing ways to obtain further information.
                                                                             ƒ   OIG receives allegations through the hotline mechanisms and
                                                                                 through anonymous correspondence. Agency management
                                                                                 notifies the OIG team when anonymous allegations are sent to
                                                                                 them.
                                             Farm Credit Administration
                                             Office of Inspector General
                                           FY 2003 Performance Measures
                                                 LEGISLATIVE AND REGULATORY REVIEW
Objective—Review and make recommendations regarding existing and proposed legislation and regulations relating to Agency
                           programs and operations and the Inspectors General Community.

Performance Goal 1—Maintain an effective program for reviewing and commenting on proposed and existing legislation and
regulations affecting the agency and the IG community.
                           OUTPUT/CRITERIA                                                             OUTCOME/IMPACT
Processes are established and documented for identifying and                OIG input is part of the decision making process in approving or amending
circulating (as appropriate) relevant documents.                            legislation, regulations, circulars and other policy positions.

    ƒ   Legislation is tracked on a daily basis. The PCIE/ECIE                  ƒ   OIG is attempting to become more proactive in tracking projects.
        legislation committee is active in forwarding interest items.
                                                                            Constructive criticism and creative alternatives offered in OIG comments
Constructive comments on relevant documents are submitted by the            improve the quality and usefulness of documents initiated by the agency.
deadlines requested by the office, agency, or staff circulating comments.
                                                                                ƒ   The agency seeks public input into policy and regulatory efforts
    ƒ   OIG is updating Privacy Act Routine uses in order to participate            concerning Loan Syndications and Preferred Stock, in part, due to
        in IG community quality assurance reviews of the inspection                 results of OIG survey conducted on Regulation Development.
        programs.
                                                                            FCA Board and management are informed about the status of new or
    ƒ   Established Quality Information Guidelines for OIG.                 pending legislation or regulations initiated externally.

                                                                                ƒ   ECIE IGs continue to support a legislative effort to have the
                                                                                    Program Fraud Civil Remedies Act made applicable to a broader
                                                                                    (more than cabinet level) range of Agencies.

                                                                                ƒ   The IG Community celebrated the 25th Anniversary of the IG Act.
                                                                                    The President recognized the contributions of the IGs. OIG
                                                                                    sponsored an open house and prepared a history and timeline to
                                                                                    commemorate the IG at FCA.
                                          Farm Credit Administration
                                          Office of Inspector General
                                        FY 2003 Performance Measures
                                                                    OUTREACH
   Objective—Work with our Agency head and the Congress to improve program management; and work with the Inspectors
                 General community and other related organizations to address government wide issues.

Performance Goal 1—Agency personnel understand and accept OIG’s role within the FCA and the community at large.
                         OUTPUT/CRITERIA                                                            OUTCOME/IMPACT
Develop and maintain educational brochures or pamphlets describing     Agency employees’ acceptance of and cooperation with OIG activities is
OIG roles and activities.                                              improved through better understanding. OIG programs and products are
                                                                       improved through feedback from Agency employees.
Facilitate feedback from agency employees and refine products and
practices based on the feedback to OIG products and educational           ƒ    An OIG summer intern prepared a report and gave a power point
materials.                                                                     presentation on e-government. There were several suggestions.
                                                                               The agency was receptive comments to the suggestions and has
                                                                               expanded electronic operations at FCA by: adding more content to
                                                                               the website, initiating efforts to make it more user friendly, collecting
                                                                               survey information electronically, spearheading pilot projects to
                                                                               enable employee communications and confidential reporting.
                                                                          ƒ    At an open house celebrating the 25th anniversary of the IG Act,
                                                                               agency employees took an interest in reading and viewing the
                                                                               history of the IG at FCA.
                                            Farm Credit Administration
                                            Office of Inspector General
                                          FY 2003 Performance Measures
                                                                    OUTREACH
   Objective—Work with our Agency head and the Congress to improve program management; and work with the Inspectors
                 General community and other related organizations to address government wide issues.

Performance Goal 2—OIG staff provides leadership to organizations directly contributing to the IG community.
                          OUTPUT/CRITERIA                                                            OUTCOME/IMPACT
Time and resources are provided to OIG staff members as an incentive     Projects and activities of adjunct organizations such as the AGA, IIA,
to contribute to outside organizations by serving on committees and      PCIE/ECIE, CCIG, FLETC, and IGATI are improved by OIG staff
holding offices.                                                         contributions and participation.

   ƒ   OIG staff actively participated in the Executive Committee on     Participating in the PCIE working group on revision to peer review guidance
       Integrity and Efficiency (ECIE), Association of Government        for audits. Providing a small agency perspective.
       Accountants (AGA), Council of Counsels (CCIG) (co-chair),
       International Association of Financial Crime, Instructor at the
       Inspectors General Auditor Training Institute (IGATI), GPRA
       Roundtable, Employee Council, Council for Excellence in
       Government, Senior Staff, Accountability Report Workgroup,
       and Federal Women’s Program Committee.

Performance Goal 3—OIG staff provides leadership to organizations directly contributing to the IG community, the agency and
the Federal government.
                          OUTPUT/CRITERIA                                                            OUTCOME/IMPACT
   ƒ   OIG networking opportunities have resulted in an expanded         FCA programs and operations are more effective and efficient.
       consideration of FCA ideas and practices by community
       contacts and experts. OIG has shared telecommuting policies,          ƒ   OIG has a goal to help the Agency build continuous, better,
       hotline procedures, performance measures and performance                  concrete measures with outcomes important to its stakeholders.
       contracts and evaluation methods. Likewise, FCA benefits
       from the opportunity to benchmark practices in other Agencies         ƒ   OIG assisted the Agency in improving electronic communication by
                                                                                 making suggestions to improve the web site and consider more
                                                                                 electronic transactions with regulated entities and the public.

                                                                             ƒ   Mentoring and coaching 2 summer interns through meaningful
                                                                                 projects.
                                         Farm Credit Administration
                                         Office of Inspector General
                                       FY 2003 Performance Measures
                                                               APPENDIX 1

                                                              AUDIT RESULTS

                                                                                                    AUDITS ARE
     AUDIT NAME         AUDITS ARE RELEVANT      RISK IS ADDRESSED       PRODUCTS ARE TIMELY                           AGENCY ACCEPTS 80%
                                                                                                   CONSTRUCTIVE

Loan Account           OIG initiated                Strategic Plan             6 Months            9 Agreed Upon       Accepted all; 6
Reporting System                                                                                      Actions          implemented

FY 2003 Financial      Annual Audit                 Strategic Plan             5 Months             No findings,       Working on completing
Statements             (Voluntary Compliance                                                     Management Letter     issues from
                       with CFO Act)                                                                                   Management Letter.


                                                                INSPECTIONS

                                                                                           INSPECTIONS ARE
     INSPECTION NAME         INSPECTIONS ARE RELEVANT       PRODUCTS ARE TIMELY                                      AGENCY ACCEPTS 80%
                                                                                            CONSTRUCTIVE

FCA Board Policies          OIG initiated                            1 Month              3 Recommendations


                                                                     REVIEWS

Federal Information Security Management Act Review—Legislatively mandated. Performed in 2 months. No material findings. Reports to OMB as a
follow-up.

E-Government at FCA—OIG initiated. Suggestion made.