oversight

Performance Management and Internal Control Program

Published by the Farm Credit Administration, Office of Inspector General on 2005-07-01.

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

Office of
Inspector General

                Performance Management and
                      Internal Control Program
                                         05-02




                         Veronica M. McCain
                          Auditor-in-Charge




                                July 1, 2005
Farm Credit Administration	                         Office of Inspector General
                                                    1501 Farm Credit Drive
                                                    McLean, Virginia 22102-5090




July 1, 2005


The Honorable Nancy C. Pellett
Chairman of the Board and
 Chief Executive Officer
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

Dear Ms. Pellett:

The Office of the Inspector General completed an audit of the Farm Credit Administration
performance measure and internal management control programs. There were two audit
objectives. The first objective was to find out whether the Agency is adequately verifying and
validating performance measure accomplishments presented in the Performance and
Accountability Report. The second objective was to evaluate the adequacy of the supporting
documentation for the Agency’s internal management control program review assessments.

We found the Agency is committed to developing a comprehensive system for reporting
performance results and assessing internal control. Processes are in place and are followed.
However, some improvements are needed to ensure performance results accurately reflect
accomplishments. In addition, the Agency’s internal management control program could be
strengthened to be a more systematic integration of internal control review efforts, approached
and written in a more standardized format. On page 6 though 9, we discuss a significant
opportunity to reshape FCA’s internal control program. Information on a reputable framework
and model is included.

We conducted the audit in accordance with Government Auditing Standards issued by the
Comptroller General for audits of Federal organizations, programs, activities, and functions. We
conducted fieldwork from February through May 2005. We provided a draft report to
management on June 6, 2005. We conducted an exit conference and discussed the draft report
with the Office of Chief Information Officer and the Office of Policy and Analysis, now known as
Office of Regulatory Policy, on June 8, 2005.

We would like to highlight the cooperative and collaborative efforts of two offices. Before
issuance of the final report, the Office of Chief Information Officer took action on a finding
discussed in this report. This prompt recognition and attention to the finding alleviated the need
to publish the recommendation for improvement and eliminated the need to initiate and track the
recommendation in the audit follow-up system.
The Office of Policy and Analysis agreed to take action concerning an OIG finding and has
proposed an action plan to address the audit finding explained within this report. We commend
these offices for being so responsive to OIG findings and recommendations. This immediate
willingness to focus on the accuracy of the Performance and Accountability Report is
demonstrative of our ongoing partnership to improve the FCA.

If you have any questions about this audit, I would be pleased to meet with you as soon as
possible.

Respectfully,



Elizabeth M. Dean
Acting Inspector General
                                EXECUTIVE SUMMARY


                          Objective. The objective of our review was to determine whether the
Why Did the Office of
                          Agency is adequately verifying and validating performance measure
 Inspector General
   do the Audit?          accomplishments presented in the Farm Credit Administration
                          Performance and Accountability Report. We also evaluated the
Decision makers need      adequacy of the supporting documentation for the Agency’s internal
evaluative information    control program review assessments.
about how programs
are working, both to      Audit Results. Our review found that the Farm Credit Administration
manage programs           is committed to developing a comprehensive system for reporting
effectively and to help   performance results and assessing internal control. However, some
decide how to allocate    improvements are needed to ensure performance results accurately
resources.
                          reflect accomplishments.         In addition, the Agency’s internal
This report discusses     management control program could be enhanced to be a more
the importance of         systematic integration of internal control review efforts, approached and
accurate performance      written in a more standardized format.
measure results and
the need for an           Performance and Accountability Report. For the FY 2004
effective internal
                          Performance and Accountability Report we verified the accuracy of
control program.
                          information reported for 14 performance measures. Documentation
The report specifically   supported the reported performance results in 12 of the 14
identifies areas that     performance measures. For 2 performance measures, we question
may need improving to     whether results, as reported, accurately reflect program outcomes.
ensure performance
results are clearly
                          We found the process used by the Office of Policy and Analysis for
reflected in the
Agency’s Performance      calculating the amount of regulatory initiatives using supplemental
and Accountability        approaches is at times driven by Board actions that are more
Report.                   ministerial or administrative and should, therefore, not be included in
                          the count. In addition, the interpretation of what constitutes a
In addition, the report
                          supplemental approach may be misguided. As a result, the number of
addresses an
innovative approach       supplemental approaches in the Performance and Accountability
the Agency can use to     Report may be overstated.
reshape its internal
control program in a      For the Office of Chief Information Officer, we found when determining
more integrated effort.   the number of available network minutes in each quarter, schedule
                          maintenance downtime is subtracted out, making the network
The Inspector General     availability time less and the percentage for network service availability
Office strives to be an   possibly higher. Our interpretation is that “network service availability”
advocate in providing     should state the percentage of time the network is available at all times
the Agency with tools     and not exclude routine maintenance down time.                If routine
that are helpful in
                          maintenance downtime is excluded then it should be footnoted in the
managing programs
more effectively and      Performance and Accountability Report for a clear understanding on
efficiently.              how the availability of information technology is calculated.

                          Prior to issuance of the final report, the Office of Chief Information
                          Officer took action to carry out draft report recommendations to
                          improve performance result measurements on network service
                          availability. We commend the Office of Chief Information Officer for
taking prompt action to ensure the accuracy of the data reported in the
Performance and Accountability Report.

Internal Controls. We reviewed the internal control assessments
performed in FY 2004 for the four offices: 1) Office of Examination, 2)
Office of Policy and Analysis, 3) Office of General Counsel, and 4)
Office of the Chief Information Officer. Overall, we found the Agency
has established a sound process to assess and report on internal
controls. However, the process could be improved through a more
systematic integration of internal control review efforts. The Committee
of Sponsoring Organizations of the Treadway Commission provides an
excellent framework that can help the Agency integrate its internal
control program. The Internal Control-Integrated Framework has been
used by thousands of businesses to better control their activities in
moving toward achieving established objectives. The framework
shows a direct relationship between the objectives, which are what the
Agency strives to achieve and the Agency risk management
components, which represent what is needed to achieve them.




    EXECUTIVE SUMMARY
TABLE OF CONTENTS


BACKGROUND........................................................................................................................ 1


OBJECTIVE AND SCOPE ....................................................................................................... 2 


FINDINGS AND RECOOMENDTATIONS ............................................................................... 2 

          Performance Measure Reporting .................................................................................. 3

          Internal Controls............................................................................................................ 5


APPENDIX................................................................................................................................ 9 





                     List of Acronyms

                     CIO                   Chief Information Officer
                     Farmer Mac            Federal Agricultural Mortgage Corporation
                     FCA                   Farm Credit Administration
                     FCS                   Farm Credit System
                     FIRS                  Financial Institution Ratings System
                     FMFIA                 Federal Manager’s Financial Integrity Act
                     FY                    Fiscal Year
                     GPRA                  Government Performance Results Act
                     OCIO                  Office of Chief Information Officer
                     OE                    Office of Examination
                     OGC                   Office of General Counsel
                     OMB                   Office of Management and Budget
                     OPA                   Office of Policy and Analysis
 BACKGROUND

          The Farm Credit Administration (FCA) is an independent Federal agency responsible
          for regulating and examining the agriculture government-sponsored enterprises
          serving rural America, which are the Farm Credit System (FCS) and the Federal
          Agricultural Mortgage Corporation (Farmer Mac).
          The proper stewardship of resources is a fundamental responsibility of FCA office
          directors and staff. Employees must ensure FCA’s resources are used efficiently
          and effectively to achieve intended program results. In addition, resources must be
          consistent with the Agency’s mission, in compliance with laws and regulations, and
          with minimal potential for waste, fraud, and mismanagement. Effective performance
          measures and a valid internal management control program helps the Agency
          achieve desired program results and safeguards the integrity of various FCA
          programs.

          Performance Measures
          The Government Performance Results Act (GPRA) is the primary framework which
          Federal agencies use to set strategic goals, measure performance, and report on the
          degree to which goals are met. In December 2003, the FCA Board adopted three
          strategic goals for fiscal years 2004-2009:
              1. 	 Ensure the FCS and Farmer Mac fulfill their public missions for agriculture
                   and rural areas.
              2. 	 Evaluate risk and provide timely and proactive oversight to ensure the safety
                   and soundness of Farm Credit System and Farmer Mac.
              3. 	 Implement the President’s Management Agenda.
          These goals have 29 associated performance measures and “targets” aimed at
          determining the degree of success in accomplishing the Agency’s performance
          measures. The accomplishment is published annually in the Performance and
          Accountability Report. Performance results are compiled by each office submitting
          performance information to the Executive Director for Planning and Projects. The
          Director reviews the information for reasonableness and combines the performance
          report submissions from each office into a single performance report for the
          Chairman. FCA’s Chairman submits the annual Performance and Accountability
          Report to the President and Congress.

          Internal Control
          Internal controls are an organization’s policies and procedures used to reasonably
          ensure that (i) programs achieve their intended results; (ii) resources are used
          consistent with agency mission; (iii) programs and resources are protected from
          waste, fraud, and mismanagement; (iv) laws and regulations are followed; and (v)
          reliable and timely information is obtained, maintained, reported and used for
          decision making. The importance of management controls is addressed in many
          executive documents:
               •	 The Federal Manager’s Financial Integrity Act (FMFIA) establishes specific
                  requirements with regard to management controls. FMFIA requires an
                  agency to conduct an annual evaluation of its internal accounting and
                  administrative control system in accordance with guidance established by the
                  Director of the Office of Management and Budget (OMB). Further, the



FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                      1
                 agency is required to submit an annual statement to the President and to the
                 Congress on the status of the agency’s internal control system.
              •	 OMB Circular No. A-123 “Management Accountability and Control” provides
                 guidance to Federal managers on improving the accountability and
                 effectiveness of Federal programs and operations by establishing, assessing,
                 correcting, and reporting on internal control.
              •	 FCA Policy and Procedures Manual 1007 “Evaluation of Internal Control
                 Systems,” further outlines the FCA policies and procedures to be followed by
                 Agency managers in evaluating, improving, and reporting on internal controls
                 in their programs and administrative activities.

          FCA’s office directors are responsible for establishing and maintaining systems of
          internal control in their respective offices that conform to the Internal Control
          Standards. By October 31 of each year, office directors provide assurance letters to
          the Chairman stating they have performed an evaluation of internal control in their
          office in accordance with OMB and Agency’s guidance.


 OBJECTIVE AND SCOPE

          The objective of our review was to determine whether the Agency is adequately
          verifying and validating performance measure accomplishments presented in the
          FCA Performance and Accountability Report. We also evaluated the supporting
          documentation for the Agency’s internal control program review assessments.

          For the FY 2004 Performance and Accountability Report, we validated the accuracy
          of results reported for 14 performance measures. (See Appendix for performance
          measures selected). We reviewed supporting documentation and interviewed
          responsible staff on performance measure results.

          We reviewed the FY 2004 internal control risk assessments and supporting
          documentation for: 1) the Office of Examination (OE), 2) the Office of Policy and
          Analysis (OPA), 3) the Office of General Counsel (OGC), and 4) the Office of the
          Chief Information Officer (OCIO). These offices were selected because of their high
          vulnerability risk to the Agency.

          We conducted the audit in accordance with Government Auditing Standards issued
          by the Comptroller General for audits of Federal organizations, programs, activities,
          and functions.


 FINDINGS AND RECOMMENDATIONS

          Our review found that FCA is committed to developing a comprehensive system for
          reporting performance results and assessing internal controls. However, some
          improvements are needed to ensure performance reporting accurately reflects
          accomplishments. In addition, the Agency’s internal management control program
          could be a more systematic integration of internal control review efforts and the
          review process documentation could be more standardized. We suggest a reputable
          approach.




FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                     2
          Performance Measure Reporting
          As the GPRA process has evolved, more attention has been given to performance
          results. Specifically, attention is being focused on the processes used by agencies
          to verify and validate performance measure results data. For the FY 2004
          Performance and Accountability Report, we verified the accuracy of information
          reported for 14 performance measures. (The Appendix lists performance measures
          reviewed). We found that for 12 of the 14 performance measures, documentation
          supported performance results. However, FCA needs to clarify or explain the
          reporting process for the following two performance measures:
              •	 Percentage of instances in which the Agency solicits public comment and
                 input on applicable regulatory initiatives using supplemental approaches to
                 the notice and comment rulemaking process.
              •	 Availability of information technology resources and information to
                 appropriate users to provide communication and information collection and
                 delivery in a timely manner, as measured quarterly by reports on FCA
                 network and Web components.
          We questioned if the reported results give the reader an accurate picture.

          Regulatory Initiatives Using Supplemental Approach
          OPA’s process for calculating applicable regulatory initiatives using supplemental
          approaches in some instances is, driven by Board actions that are more ministerial
          or administrative and, therefore, should not be included in the count. In addition, the
          interpretation of what constitutes a supplemental approach may be misguided. As a
          result, the number of supplemental approaches stated in the Performance and
          Accountability Report may be overstated.
          Our review of supporting documentation shows the OPA’s process for determining
          regulatory initiatives using supplemental approaches could be improved by adopting
          the following analysis:
              •	 When determining the number of regulatory initiatives the count should be
                 based on significant Board actions such as adoption of a proposed rule or
                 regulation amendments. Administrative actions, such as extending the
                 comment period on a proposed rule, should not be included in the count.
          When determining the number of supplemental approaches, counts should be based
          on the number of regulatory initiatives using supplemental approaches not simply the
          number of Board actions. For example:
              •	 August 2003 the Agency published a proposed rule seeking public comments
                 to a regulation on investments in Farmers’ Notes.
              •	 October 2003 the Board extended the comment period on Farmers’ Notes
                 (supplemental approach).
              •	 April 2004 the Board finalized the regulation.
          According to OPA this regulatory initiative was counted as using two supplemental
          approaches based on the number of Board actions. We believe a more accurate
          count would be one, based on the single regulatory initiative (investments in
          Farmers’ Notes) using a supplemental approach.
          We also question whether OPA’s interpretation of what constitutes a supplemental
          approach is consistent with the meaning. In May 2004, the FCA Board took action to
          amend the list of related services by adding Farm Credit Bank to the list of

FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                       3
          institutions authorized to offer the services listed as “Financial Risk Management for
          Customer”. According to the OPA, this was highlighted on FCA’s Web site and
          included as an initiative using a supplemental approach. OPA feels this falls under
          the category of other unique approaches to gather a broad range of public input
          because other institutions would become aware of the services and might want to
          offer them. We question whether this constitutes a supplemental approach because
          methods should focus on gathering a broad range of public input and it is unclear
          how this initiative would gather input on the subject matter.
          OPA is currently revising its process for the FY 2005 Performance and Accountability
          Report submission. According to OPA, revisions will include defining applicable
          regulatory initiatives based on significant Board actions. In addition, OPA will ensure the
          supplemental approach count is based on the number of regulatory initiatives that
          actually use supplemental approaches versus just the number of Board actions. We
          commend OPA for taking prompt action to ensure data reported in the Performance and
          Accountability Report accurately reflect results.

          Availability of Information Technology Resources
          Our review shows the OCIO needs to clarify in the Performance and Accountability
          Report “the availability of information technology resources” calculation. According
          to the Chief Information Officer (CIO), the information technology resources
          availability time is computed using the following calculations:
                •	 Number of available minutes in each quarter=Total number of minutes in
                   each quarter minus schedule down time for routine network maintenance.
                •	 Network service availability=Number of available minutes in each quarter
                   minus unscheduled minutes network is down.
                •	 Percentage of service availability=Net service availability/ Number of
                   available minutes in each quarter.
          When determining the number of available minutes in each quarter, the OCIO is
          subtracting out schedule maintenance downtime, thus making the network
          availability time less and the percentage for network service availability possibly
          higher. The common reader of the Performance and Accountability Report would
          interpret “network service availability” as the percentage of time the network is
          available at all times and not exclude routine maintenance down time. If routine
          maintenance downtime is excluded then it should be footnoted in the Performance
          and Accountability Report so there is a clear understanding of how the information
          technology availability is calculated.
          The CIO has taken action to include a footnote explaining how network availability
          time is calculated in the FY 2005 Performance and Accountability Report. We
          commend the OCIO for taking prompt action to ensure data reported in the
          Performance and Accountability Report accurately reflect results.

          Agreed Upon Action
          1.	      The Office of Policy and Analysis Director will revise the process on reporting
                   performance results for supplemental approach to provide a better match between
                   the numbers of supplemental approach that are used during the rulemaking
                   process for a single regulatory initiative.      Also, the Director will review
                   supplemental approaches counted in the Performance and Accountability Report
                   to ensure methods used are consistent with the supplemental approach definition.



FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                           4
          Internal Controls

          Internal controls are a major part of managing an organization. It comprises the
          plans, method and procedures used to meet mission, goals and objectives to support
          performance based management. Internal control also serves as the first line of
          defense in safeguarding assets and preventing and detecting errors and fraud.
          Internal control is not a one-time event, but a series of actions and activities that
          occur throughout the Agency’s operation on an ongoing basis. Therefore, internal
          controls should be recognized as an integral part of the system managers use to
          regulate and guide the organization’s operation.

          Internal Control Reviews
          We reviewed the internal control assessments performed in FY 2004 for the following
          four offices: 1) the Office of Examination, 2) the Office of Policy and Analysis, 3) the
          Office of General Office, and 4) the Office of Chief Information Officer. These offices
          were selected because of their high vulnerability risk to the Agency. The Agency has
          established a process to assess and report on internal control. However, the
          process could be improved through a more systematic integration of internal control
          review efforts, approached and written in a more standardize format.

          Internal Control Integration. According to Agency guidance, each of the office
          directors is responsible for establishing and maintaining systems of internal control in
          their respective offices. This includes identifying potential risks, making internal
          control evaluations, reporting results and implementing corrective actions for
          weaknesses identified. Generally, we found the offices were conscientious in
          implementing an internal control program.          However, internal control review
          approaches were often focused on specific processes within each of the offices and
          lacked overall Agency function reviews. For example, the OGC and the OPA are
          both involved in the regulation development process. However, there is no linkage
          between the two offices during the internal control review process. Each office
          performs reviews that are specific to their own office function. As a result,
          management may not have an overall picture of possible control risks in this area.

          Effective internal control involves a unified approach for assessing the vulnerability of
          various Agency functions. Agency functions that are conducted across the
          organization should be managed through an integrated effort that provides
          reasonable assurance the process is working efficiently and effectively.

          Review Process and Documentation. According to Agency guidance, when
          performing annual internal control reviews, each office should review the
          management control program through the completion of an assessment form that is
          tailored to identify risks in each given activity. Agency guidance provides an
          example of an assessment checklist form that can be used for this review. We found
          the process for completing assessments varied between offices. For example, the
          OE and the OPA used the assessment checklist to complete reviews. The checklists
          were comprehensively cross-referenced to supporting work papers with rationale
          thoroughly documented. The OGC and the OCIO did not use the assessment
          checklist but provided various types of documentation for overall conclusions
          reached. Documentation provided did assess some very important control factors
          however; it did not address all the areas covered in the Agency’s vulnerability
          assessment checklist such as staff training and delegation of management
          responsibility. Inconsistency in control review process and documentation can result


FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                         5
          in the assessments not properly measuring all the levels of risks for a given activity.
          By developing a systematic, organized, and structured approach to assess internal
          controls, the Agency can improve and maintain effective operations.

          Internal Control Changes
          In recent years internal control has received substantial notice largely in response to
          a wave of corporate financial scandals involving some very prominent companies in
          the United States. This has resulted in revisions to OMB Circular No. A-123,
          “Management Responsibility for Internal Control,” December 2004. The revisions
          emphasize the need for agencies to integrate and coordinate internal control
          assessments that synchronize all internal control-related activities. The circular
          recognizes that internal control should be an integral part of the entire cycle of
          planning, budgeting, management, accounting, and auditing. It should support the
          effectiveness and integrity every step of the process and provide continual feedback
          to management. In addition, personal accountability for results is essential, starting
          with top agency management and cascading down through the organization. The
          revised circular encourages the involvement of senior management councils in
          internal control assessments and monitoring. This can be an excellent means of
          establishing accountability and ownership. With the advent of a new circular,
          combined with the strategic studies FCA is currently conducting, Agency
          management has a significant opportunity to reshape the internal control program so
          it is an integral tool in improving effectiveness and accountability. A significant
          benefit of revising the internal control program would be standardized documentation
          throughout the Agency.

          Internal Control-Integrated Framework
          The Committee of Sponsoring Organizations of the Treadway Commission provides
          an excellent framework that can help the Agency integrate its internal control
          program. The Internal Control—Integrated Framework mirrors concepts within the
          revised circular and is used by thousands of businesses to better control their
          activities in moving toward achievement of their established objectives. The
          framework shows a direct relationship between the objectives, which are what the
          Agency strives to achieve and the risk management components, which represent
          what is needed to achieve them.
          The relationship is depicted in a three-dimensional cube matrix. The first dimension
          represented by the vertical columns is the Agency’s objectives. The second
          dimension represented by the horizontal rows is the five interrelated standards that
          drive the way management runs the Agency. The third dimension represents the
          Agency’s functionalities.




FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                       6
                              Internal Control-Integrated Framework




          Further analysis of the framework shows the first dimension: operations, reporting
          and compliance are the objectives the Agency is trying to achieve with its internal
          control program. Operations represent effective and efficient use of resources.
          Reporting relates to reliable financial statements. Compliance is the Agency’s
          compliance with applicable law and regulations.
          The second dimension is the five interrelated standards that drive the way
          management runs the Agency. Each standard row cuts across and applies to all
          objective categories.
            •	 Control Environment—Individual attributes, including integrity, ethical value and
               competence and the environment in which they operate. They are the engine
               that drives the Agency and the foundation on which everything rests.
            •	 Risk Assessment—The identification and analysis of relevant risk associated
               with achieving the objectives, such as strategic and annual performance plans
               developed under the GPRA, and forming a basis for determining how risk
               should be managed.
            •	 Control Activities—The policies, procedures, techniques and mechanisms that
               enforce management directives.
            •	 Information and Communication—For the Agency to run and control its
               operations, it must have relevant, reliable and timely communications relating
               to internal control as well as external events. Information is needed throughout
               the Agency to achieve all of its objectives.
            •	 Monitoring—Internal controls should be designed to assure that ongoing
               monitoring occurs in the course of normal operations.
          The third dimension represents the Agency’s functionalities to which internal control
          applies. The FCA’s functionalities include examination, regulation development and
          financial statements.
          Given the inconsistent approach by various offices when assessing the current
          internal control program, we believe this framework offers numerous benefits to help
          the Agency achieve an integrated internal control approach. With the foundation of a


FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                      7
          mutual understanding, all parties will be able to speak a common language and
          communicate more effectively. In addition, management will be able to assess
          control systems against a standard and strengthen weaknesses.

          Recommendations
              1. 	 The Chief of Staff should establish a senior assessment team as suggested
                   by OMB Circular No. A-123, “Management Responsibility for Internal
                   Control,” December 2004, to ensure a consistent level perspective is
                   applied to the internal control program.

              2. 	 Prototype the Committee of Sponsoring Organization framework on several
                   agencies’ processes and obtain staff recommendations on how it can be
                   adopted for Farm Credit Administration environment.




FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                  8
 APPENDIX

          Below is a listing of the performance measures reviewed from the FY 2004 Performance
          and Accountability Report.

          Goal 1:

          Percentage of institutions with effective strategic business plans for providing constructive
          credit and related services to all potential customers.
          Percentage of direct-lender institutions with satisfactory consumer compliance with
          borrower rights examination ratings.
          Percentage of instances which Agency solicit public comment and input on applicable
          regulatory initiative using supplemental approaches to the notice and comment
          rulemaking process.
          Percentage of direct-lender institutions that have effective programs to furnish sound and
          constructive credit and related services to young, beginning, and small farmers, ranchers,
          and producers and harvesters of aquatic products or that have acceptable corrective
          action plans in place.

          Goal 2:

          Number of institutions placed in receivership due to financial failure during the previous
          12 months.
          The total assets of FCS institutions with composite Financial Institution Ratings Systems
          (FIRS) of “1” or “2” divided by the total assets of FCS institutions.
          Percentage of FCS institutions with composite FIRS ratings of “3” or “4”, or “5” with
          corrective action plans in place to address the underlying problems.
          Percentage of direct-lender institutions with adverse assets to risk funds less than 100
          percent.
          Percentage of institutions complying with all regulatory capital ratio requirements.
          Percentage of instances of noncompliance with or regulations resolved to FCA
          satisfaction.
          Percentage of institutions that have effective audit and review programs.

          Goal 3:

          Percentage of Agency staff with broadband connectivity remotely.
          Percentage of Agency Web pages and electronic devices that are section 508
          accessibility compliant.
          Availability of information technology resources and information to appropriate users to
          provide communication and information collection and delivery in a timely manner, as
          measured quarterly by reports on FCA network and Web components.




FARM CREDIT ADMINISTRATION  OFFICE OF INSPECTOR GENERAL                                             9
                      REPORT 

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@starpower.net
         mail: 	 Farm Credit Administration 

                    Office of Inspector General Hotline 

                    1501 Farm Credit Drive 

                    McLean, VA 22102-5090