oversight

FY 1999

Published by the Farm Credit Administration, Office of Inspector General on 2000-01-01.

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

                                                       OFFICE OF INSPECTOR GENERAL
                                             FY 1999 PERFORMANCE MEASURES
                           AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS

Objective: Audit and evaluate the Agency’s programs and operations to promote economy, efficiency and effectiveness.


PERFORMANCE GOALS                                  OUTPUT/CRITERIA                                                 OUTCOME/IMPACT


1. Deliver quality audit products   Audit and inspection reports.                                 FCA programs and operations are more effective.
  and services that are useful to    Details at Attachment 1.                                     OIG and Agency management have confirmation that FCA’s
  the Board, management and/or                                                                    network infrastructure is well designed and documented. The
  the Congress.                     Audits and inspections are relevant. Audit coverage           networking technology is comparable to or better than that of
                                    includes all mandated audits and at least 75% of those        other IT organizations throughout industry and government.
                                    suggested by the Board and management.                        Regular review of the reliability of remote access to the
                                                                                                  Agency network has been initiated.
                                    Three audits and two inspections were initiated to
                                    examine program efficiencies, especially use of               Policies were modified to better justify; safeguard and track
                                    resources. Any audit specifically requested by a FCA          funds spent on specialized FCA positions.
                                    Board member was performed.
                                                                                                  Waste in Agency programs and operations is reduced.
                                    Risk is addressed. 100% of OIG audits are performed in
                                    high risk/high $ programs and activities and/or are tied to   Increased Agency compliance with laws, regulations and
                                    the Agency strategic planning goals.                          internal policies and procedures.

                                    All audits were in high-risk programs and/or were tied to Through the partnership concept, the IG and FCA
                                    the Agency strategic plan. Focus was on major Agency      management:
                                    programs and implementation of new programs.                1) Received an unqualified opinion for the Agency’s FY
                                    Inspections were utilized for field office reviews. Each        98 financial statements; and
                                    product aimed at identifying efficiencies and potential     2) Improved and documented Agency preparation for the
                                    cost savings.                                                   Year 2000.
                                                                                                3) Improved efficiency through greatly increased the use
                                                                                                    of credit cards for making micropurchases and
                                                                                                    essentially all training costs are paid using this
                                                                                                                                                Page 1 of 14
                                                        OFFICE OF INSPECTOR GENERAL
                                              FY 1999 PERFORMANCE MEASURES
                          AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS


PERFORMANCE GOALS                                   OUTPUT/CRITERIA                                               OUTCOME/IMPACT

1. Deliver quality audit products                                                                     method.
   and services that are useful to                                                                 4) All Agency positions were reviewed for proper
   the Board, management and/or                                                                       classification of security clearances and the backlog of
   the Congress (continued)                                                                           background investigation was addressed.

                                     Findings made during audit fieldwork are recognized and     The Agency’s stature and reputation is elevated in the eyes of
                                     corrected by management prior to drafting of the audit      Congress, the Administration, the FCS, FCA employees and
                                     report.                                                     the public.

                                     Management worked with OIG to address findings              Jointly, OIG and the Agency are engaged in becoming a
                                     during:                                                     “premier regulator.” All employees are actively involved in
                                     •    FCA’s Specialization/Certification Programs            achieving this goal. Efforts by the Agency are recognized
                                     •    FCA’s Financial Statement for FY 98                    through the Agency-wide Benchmarking project. Government
                                     •    Analysis of the FCA IT Infrastructure                  agencies and corporations were benchmarked in order to
                                     •    Inspection of Sacramento CA Field Office.              adopt the best practices and best processes. All FCA
                                     •    Inspection of Dallas TX Field Office                   employees also spent a day or more familiarizing themselves
                                                                                                 with a Farm Credit institution and agricultural operations
                                     Products are timely, i.e. average time to complete audits   such as farms or nurseries.
                                     and issue draft reports will not exceed 6 months.
                                                                                                 Feedback from regulated institutions about Agency products
                                     All audits were completed in within 4 months.               and services rates them consistently above average. The
                                     Inspections were completed more rapidly (2 mos. or less)    Agency has initiated an insourcing project, examining loans
                                                                                                 for another Federal agency. Congress has been fully
                                                                                                 supportive of regulatory initiatives. The public has been
                                                                                                 provided an electronic mail vehicle to comment on proposed
                                                                                                 regulations.


                                                                                                                                                 Page 2 of 14
                                                       OFFICE OF INSPECTOR GENERAL
                                              FY 1999 PERFORMANCE MEASURES
                           AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS


PERFORMANCE GOALS                                  OUTPUT/CRITERIA                                                OUTCOME/IMPACT

1. Deliver quality audit products    Audits are constructive. At least 75% of audit products     FCA is more effective in carrying out its mission.
   and services that are useful to   contain recommendations to improve Agency operations.
   the Board, management and/or                                                                  The OIG audit, FCA’s Specialization/Certification Programs
   the Congress (continued)          100 % of audits and inspections performed contain           resulted in the enhancement of existing processes and making
                                     recommendations to improve Agency operations.               more effective use of Agency resources expended on
                                                                                                 specialization programs.
                                     The Agency accepts at least 80% of OIG audit
                                     recommendations.                                            As a result of a field office inspection, the examination
                                                                                                 manual was modified and procedures were developed for
                                     During this reporting period, management accepted all       examination of; Equal Opportunity Employment Programs,
                                     (26) recommendations, except for five recommendations       Call Reports, Orders of Removal, Suspension, or Prohibition,
                                     from the FCA IT Infrastructure report. Management is        and for notifying institutions of persons who should be
                                     studying these five recommendations.                        blocked from transactions or employment due to criminal
                                                                                                 involvement.
                                     The Agency actually implements all corrective actions
                                     prescribed by management decisions.                         The OIG is more effective in promoting economy,
                                                                                                 effectiveness and efficiency within the Agency.
                                     50% of the corrective actions have been implemented.
                                     The remaining 50% of those recommendations that have
                                     been accepted by management are not yet implemented.
                                     However, these corrective actions are for an audit report
                                     that was issued in very close proximity to the end of the
                                     reporting year.




                                                                                                                                                  Page 3 of 14
                                                       OFFICE OF INSPECTOR GENERAL
                                              FY 1999 PERFORMANCE MEASURES
                          AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS



    PERFORMANCE GOALS                                          OUTPUT/CRITERIA                                   OUTCOME/IMPACT

2. Provide technical advice and assistance   The IG advises the Chairman concerning policy direction or   OIG input and advice contributes to Agency
   to Agency officials in developing         administrative priorities.                                   decisions and actions that are more
   sound management information and                                                                       complete and valid at their inception.
   financial reporting systems and in        The IG delivered three (3) advisories to the Chairman
   streamlining programs and                 concerning policy issues and administrative priorities.      Due to management letters, the policy on
   organizations.                                                                                         drug free workplace was improved; security
                                             OIG performs analysis and provides technical advice to       controls over supplies were improved and a
                                             management concerning accounting, management systems and     backlog of personnel security investigations
                                             controls, and performance measures.                          were addressed.

                                             Technical analysis and advice was provided through the       The Agency updated a policy on travel and
                                             following::                                                  established firm guidance on the radius for
                                             • Personnel security review                                  local travel. Management also has
                                             • Drug Free Workplace review                                 improved remote access to the network and
                                             • Security over supplies                                     has further educated users.
                                             • Travel - per diem
                                             • Compensation workgroup                                     The Agency updated policies and
                                             • FCA Annual Report                                          procedures to insure compliance with the
                                             • Computer Connectivity in the field                         Prompt Payment Act.
                                             • Telecommuting
                                                                                                          Management segregated incompatible
                                                                                                          duties between the time entry conversion
                                                                                                          function and the payroll leave audit
                                                                                                          function.




                                                                                                                                           Page 4 of 14
                                                OFFICE OF INSPECTOR GENERAL
                                             FY 1999 PERFORMANCE MEASURES
                          AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS


    PERFORMANCE GOALS                              OUTPUT/CRITERIA                   OUTCOME/IMPACT

                                                                              The Agency’s flexiplace program has been
2. Provide technical advice and assistance                                    broadened through a telecommuting
   to Agency officials in developing sound                                    project.
   management information and financial
   reporting systems and in streamlining                                      Increase in management requests for advice,
   programs and organizations.                                                audit work or technical assistance.
   (continued)
                                                                              On several occasions, the Leadership Team
                                                                              members have requested and received
                                                                              advice and technical assistance.

                                                                              OGC requested and relied on audit
                                                                              workpapers, interviews with FDIC, to
                                                                              accomplish part of their Benchmarking
                                                                              effort.

                                                                              Regularly, Agency management asks OIG
                                                                              staff to look at policies and operating
                                                                              procedures. (Frequent flier upgrades, per
                                                                              diem, and compensation issues).




                                                                                                              Page 5 of 14
                                                     OFFICE OF INSPECTOR GENERAL
                                            FY 1999 PERFORMANCE MEASURES
                          AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS



    PERFORMANCE GOALS                                       OUTPUT/CRITERIA                                            OUTCOME/IMPACT

3. Continuous improvement of OIG staff,    Customer survey feedback is used to improve products and          Peer review reports provide an unqualified
   products and internal administration.   services.                                                         opinion that OIG audit work meets or exceeds
                                                                                                             quality audit standards prescribed by GAO and
                                           Audit survey feedback was sparse but positive, an average of      the PCIE/ECIE.
                                           over 4.0 on a scale of 1 to 5 (5 is strongly agrees with survey
                                           questions, 1 is strongly disagrees with survey questions). The    Peer review is scheduled for FY 2000.
                                           4.0 is down from last report of 4.5. Both times feedback was
                                           very limited. A new survey instrument has been developed          Customer survey feedback evidences increased
                                           and will hopefully attract more response.                         satisfaction with audit practices.

                                           OIG training ensures the technical proficiency of staff.
                                           Training classes attended for proficiency:
                                           • EEO Professional Development (Burr)
                                           • Nat’l. Diversity Symposium (Burr)
                                           • Legislative Issues and Congressional Oversight Forum
                                              (Dean)
                                           • 1999 Economic Crime Summit (Ohlstrom)
                                           • Writing Successful Audit Reports (Lewandrowski)
                                           • Auditing Performance Outcomes (Lewandrowski)
                                           • AABPA Symposium (Lewandrowski)
                                           • National Intergovernmental Audit Forum (Stoehr)
                                           • Lessons in Leadership Series (Stoehr)
                                           • Relations with Government Agencies (Stoehr)
                                           • Federal Privatization (Stoehr)
                                            • Mediation Skills and Processes (Dean)


                                                                                                                                               Page 6 of 14
                                                    OFFICE OF INSPECTOR GENERAL
                                           FY 1999 PERFORMANCE MEASURES
                         AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS


    PERFORMANCE GOALS                                      OUTPUT/CRITERIA                                            OUTCOME/IMPACT

3. Continuous improvement of OIG staff,   OIG implements administrative improvements identified             The Inspector General’s opportunity to facilitate
   OIG products and processes.            through audits of other Agency programs and through staff         positive change within the Agency is enhanced
   (continued)                            involvement with the professional community.                      by the quality and credibility of OIG products
                                          • OIG staff members enter into a performance contract with        and advice.
                                              the IG, identifying projects and responsibilities.
                                              Similarly, the IG and the Agency Chairman sign a              OIG staff actively develops ideas for adding
                                              performance contract. Other Agency components are             value to the Agency and OIG operations. Part of
                                              initiating this practice.                                     OIG performance contract involves identifying
                                          • OIG teambuilding is ongoing.                                    specific ideas to audit or review in the upcoming
                                          • Equipment upgrades allow more professional products to          year.
                                              be produced in-house. OIG welcomes the Agency to use
                                              the equipment. This has resulted in more professional         The Agency Benchmarking effort afforded OIG
                                              products and acquisition of the necessary equipment           an opportunity to tailor and try successful
                                              within the Agency.                                            practices used at Freddie Mac and Fannie Mae.
                                          • Time tracking has been streamlined.                             .
                                          • OIG has made a decision to reach “Agreed Upon                   This reporting period an Administrative Burden
                                              Decisions” in audits and inspections when possible. This      Workgroup was led by an OIG staff member to
                                              is a technique used successfully at Freddie Mac. Our          streamline routine procedures. The group was
                                              benchmarking effort led us in this direction. OIG will also   highly successful in eliminating unnecessary and
                                              streamline the customer survey instrument and try the         burdensome steps.
                                              method used by Fannie Mae to solicit audit topics.
                                          • The Hotline number has gained more visibility by being          The IG participates in an Agency project to
                                              put on the internet and on the FCA website.                   develop ideas concerning Agency compensation.

                                                                                                            Coordinated pilot project on telecommuting.




                                                                                                                                               Page 7 of 14
                                                    OFFICE OF INSPECTOR GENERAL
                                       FY 1999 OIG 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 GOALS                                       OUTPUT/CRITERIA                                          OUTCOME/IMPACT


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

                                            One investigation was open at the beginning of this period    FCA internal policies, procedures and controls are
                                            and three more were opened during FY 99.                One   strengthened to prevent and/or detect future
                                            investigation was closed during this period (13 months from   wrongdoing.
                                            date of opening until closing). This investigation prompted
                                            3 management letters; however, the underlying crime           Management strengthened procedures on security
                                            remains unsolved.                                             clearances and updating security reviews.

                                            To ensure objectivity, OIG entered into a memorandum of Management more actively oversees FECA claims
                                            understanding with another IG to perform an investigation by employees.
                                            that potentially involved a conflict of interest. OIG also
                                            worked with investigators having identified expertise in a
                                            matter under investigation.

3. FCA employees and managers               Allegations of wrongdoing are received in a timely manner     Investigations are more successful because they are
   recognize their responsibility to        and are supported by specific information.                    initiated in a timelier manner and have better
   immediately report observed or                                                                         information.
   suspected wrongdoing to the IG.
                                                                                                          FCA employees are more willing to report real or
                                                                                                          suspected wrongdoing because they trust the

                                                                                                                                               Page 8 of 14
                                                      OFFICE OF INSPECTOR GENERAL
                                         FY 1999 OIG PERFORMANCE MEASURES
                                                                   INVESTIGATIONS


    PERFORMANCE GOALS                                         OUTPUT/CRITERIA                                           OUTCOME/IMPACT

                                                                                                             competence and fairness of OIG’s investigations.

2. FCA employees and managers                                                                                The OIG is notified promptly whenever
   recognize their responsibility to                                                                         wrongdoing is observed or suspected in FCA
   immediately report observed or                                                                            programs. Various offices have sought guidance
   suspected wrongdoing to the IG.                                                                           to avoid problems or to resolve potential problems
   (continued)                                                                                               before there is a need for investigation.

                                                                                                             When there has been conflicting advice by
                                                                                                             authorities, OIG is consulted as a competent
                                                                                                             source to resolve the conflict.




3. Agency officials and Congress are kept     Summaries of investigations and the resulting administrative   The Chairman and Congress are better informed
   fully and currently informed of            or judicial actions taken are incorporated into the            about OIG investigations, administrative and
   problems found in the process of and       Semiannual Report to Congress, along with any                  judicial consequences.
   resulting from investigative activities.   disagreements on the actions taken or failure of
                                              management to act in a timely and responsible fashion.         Public confidence in the integrity of FCA
                                                                                                             programs and internal operations are heightened.
                                              Findings made during the investigative process concerning
                                              the problem at issue or systemic problems are recognized
                                              and corrected or mediated by management.




                                                                                                                                                 Page 9 of 14
                                                       OFFICE OF INSPECTOR GENERAL
                                              FY 1999 PERFORMANCE MEASURES
                                              REVIEW OF LEGISLATION AND REGULATIONS

Objective: Review and make recommendations regarding existing and proposed legislation and regulations relating to Agency programs
           and operations and the Inspectors General community.


    PERFORMANCE GOALS                                         OUTPUT/CRITERIA                                           OUTCOME/IMPACT


1. Maintain an effective program for          Processes are established and documented for identifying,      OIG input is part of the decision making process in
   reviewing and commenting on proposed       logging and circulating (as appropriate) relevant documents.   approving or amending legislation, regulations,
   and existing legislation and regulations                                                                  circulars and other policy positions.
   effecting the Agency and the Inspectors    Legislation is tracked on a daily basis. Counsel is a
   General community.                         member of PCIE Legislation Committee.                          Constructive criticism and creative alternatives
                                                                                                             offered in OIG comments improve the quality and
                                              Constructive comments on relevant documents are                usefulness of documents initiated by the Agency.
                                              submitted by the deadlines requested by the office, Agency
                                              or staff circulating comments.                                 FCA Board and management are informed about
                                                                                                             the status of new or pending legislation or
                                              Comments were submitted on time.                               regulations initiated externally.

                                              Document review activity is summarized for inclusion in the    OIG notified Agency management of the reporting
                                              Semiannual Report to Congress.                                 requirements under Federal Activities Inventory
                                                                                                             Reform.

                                                                                                             Suggestions and responses to legislation proposed
                                                                                                             to amend the IG Act were developed and submitted
                                                                                                             to OMB and Congressional staffs.

                                                                                                             Counsel and a workgroup included language in
                                                                                                             semiannual report regarding IG independence
                                                                                                             issues.

                                                                                                                                                  Page 10 of 14
                                                     OFFICE OF INSPECTOR GENERAL
                                                FY 1999 PERFORMANCE MEASURES
                                                            OUTREACH PROGRAM

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 GOALS                                          OUTPUT/CRITERIA                                        OUTCOME/IMPACT


1. Agency personnel understand and accept         Develop and maintain educational brochures or pamphlets       Agency employees’ acceptance of and
   OIG’s role within FCA and the community at     describing OIG roles and activities.                          cooperation with OIG activities is improved
   large.                                                                                                       through better understanding. OIG programs
                                                  Facilitate feedback from Agency employees and refine          and products are improved through feedback
                                                  products and practices based on the feedback to OIG           from Agency employees.
                                                  products and educational materials
                                                                                                                In place of the traditional audit report,
                                                  OIG policies have been refined and streamlined. Audit         Agency management has been receptive to the
                                                  follow-up was merged with the Agency system so that           quick response reviews and agreed upon
                                                  duplication of effort will be avoided.                        action, techniques OIG is or is planning to
                                                                                                                use more often.
                                                  Information concerning the OIG HOTLINE can be
                                                  obtained through linkage with the IG Semiannual Report
                                                  in the FCA database.




2. OIG staff provides leadership to               Time and resources are provided to OIG staff members as       Projects and activities of adjunct
   organizations directly contributing to the     an incentive to contribute to professional organizations by   organizations such as the AGA, IIA,
   Inspectors General community.                  serving on committees and holding offices.                    PCIE/ECIE, CCIG, FLETC, and IGATI are
                                                                                                                improved by OIG staff contributions and
                                                                                                                participation.

                                                                                                                                                 Page 11 of 14
                                                       OFFICE OF INSPECTOR GENERAL
                                              FY 1999 PERFORMANCE MEASURES
                                                             OUTREACH PROGRAM


       PERFORMANCE GOALS                                           OUTPUT/CRITERIA                                        OUTCOME/IMPACT


2. OIG staff provides leadership to                Professional Organizations - staff are active in meetings
   organizations directly contributing to the      and sessions of PCIE/ECIE and other professional              IG facilitated ECIE’s group response to
   Inspectors General community. (continued)       organizations including: Institute of Internal auditors,      proposed amendments to the IG Act. The IG
                                                   Association of Government Accountants, Council of             acts in an advisory capacity to the leadership
                                                   Counsels, Association of Federal Investigators, Training      of the ECIE. The IG also participated in
                                                   Coordinators, Internal Association of Credit Card             commenting on proposed AICPA rule change.
                                                   Investigators, and Instructor at Inspector Generals           Counsel received award from CCIG for
                                                   Auditor Training Institute.                                   training and teaching within the IG
                                                                                                                 community.

                                                                                                                 OIG Networking opportunities have resulted
                                                                                                                 in an expanded consideration of FCA ideas
                                                                                                                 and practices by community contacts and
                                                                                                                 experts.

                                                                                                                 The Inspectors General community is more
                                                                                                                 credible and effective.

                                                   OIG staff will participate in projects that will contribute
3. OIG staff contributes to special projects for   to achieving the vision of a better Agency and                Management practices at the Agency are
   improving the Agency, the OIG community         government.                                                   improved by OIG staff participation in FCA
   and the government.                                • FCA Leadership Team                                      special projects.
                                                      • FCA EEO Advisory Committee
.                                                     • FCA Annual Report Task Force                             FCA programs and operations are more
                                                      • Benchmarking Workgroup                                   effective and efficient.
                                                      • Strategic Message Workgroup

                                                                                                                                                   Page 12 of 14
                                                   OFFICE OF INSPECTOR GENERAL
                                               FY 1999 PERFORMANCE MEASURES
                                                         OUTREACH PROGRAM


       PERFORMANCE GOALS                                      OUTPUT/CRITERIA                             OUTCOME/IMPACT

                                                   • Employee Council
3. OIG staff contributes to special projects for   • Farm Credit Club                            OIG involvement with IG community
   improving the Agency, the OIG community                                                       facilitates an efficient way to get answers or
   and the government. (continued)                 • Mentoring Program                           feedback from many different contacts and
                                                                                                 networks.
                                                   • New Employee Orientation
                                                   • Administrative Burden Reduction Workgroup
                                                   • Federal Women’s Program Workgroup




                                                                                                                                    Page 13 of 14
                                                                                                                             Attachment 1

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

FCA’s                          OIG Initiated      Strategic Plan          4 Months           5 Recommendations    Accepted and
Specialization/Certification                                                                                      Implemented All
Programs

FY 98 Financial Statements Annual Audit           Strategic Plan          4 Months           2 Recommendations    Accepted and
                           (Voluntary                                                                             Implemented all
                           Compliance with
                           CFO Act)


Analysis of the FCA IT         OIG Initiated      Strategic Plan          4 Months           20 Recommendations   Accepted 15
Infrastructure                                                                                                    Implemented 2



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

      Sacramento Field Office          OIG Initiated               2 Months           1 Recommendation     Accepted and
                                                                                                           Implemented all

      Dallas Field Office              OIG Initiated               1 Month            3 Recommendations    Accepted and
                                                                                                           Implemented all


                                                                                                                             Page 14 of 14