oversight

FY 2008-2009

Published by the Farm Credit Administration, Office of Inspector General on 2007-08-15.

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

Office of
Inspector General



      STRATEGIC AND OPERATING PERFORMANCE PLAN

                      FISCAL YEARS 2008 AND 2009
Farm Credit Administration                                       Office of Inspector General
                                                                 1501 Farm Credit Drive
                                                                 McLean, Virginia 22102-5090




August 15, 2007


The Honorable Nancy C. Pellett
Chairman
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

Dear Chairman Pellett:

The enclosed document is the Office of Inspector General’s Strategic and Operating
Performance Plan (SOPP) and budgets for fiscal years 2008 and 2009.

We have updated the SOPP and its accompanying audit plan to reflect FCA’s organization and
operations, including the critical function of information technology security. The audit plan is a
fluid document that may be amended as the year progresses.

Please call me if you have any questions or comments.

Sincerely,




Carl A. Clinefelter
Inspector General

Enclosure
                                                TABLE OF CONTENTS

Introduction ......................................................................................................................... Tab 1

Strategic and Operating Performance Plan ........................................................................ Tab 2

Object Class Budget Overview ........................................................................................... Tab 3
  FY 2008
  FY 2009

OIG Control System............................................................................................................ Tab 4

Appendices ......................................................................................................................... Tab 5
  Appendix A—Audit Plan
  Appendix B—IRM Plan Summary Report
  Appendix C—FY 2008-2009 Products and Services Budget
                     Farm Credit Administration
                     Office of Inspector General
                       Fiscal Years 2008-2009

                                     INTRODUCTION
The Farm Credit Administration (FCA or Agency) Office of Inspector General (OIG) was
established on January 29, 1989, as a result of 1988 amendments to the Inspector General Act
of 1978 (IG Act). The IG Act established specific responsibilities and authorities for all Federal
Inspectors General.

The FCA Inspector General (IG) has a dual reporting responsibility to both the FCA Chairman
and the oversight committees of the Congress. The OIG analyzes Agency performance through
audits, inspections, and evaluations and provides conclusions and recommendations designed
to strengthen Agency effectiveness and efficiency. The OIG reviews existing and proposed
legislation and regulations relating to Agency programs and operations to assess the impact on
Agency economy and efficiency. The OIG also contracts with outside accounting firms for the
annual audit of FCA’s financial statements and the review of the Agency’s compliance with the
Federal Information Security Management Act (FISMA). This process may change in fiscal year
2008 and beyond as the OIG now has on staff the expertise to perform the FISMA assessment.
The OIG also maintains a Hotline for reporting allegations of fraud, waste and abuse and
provides independent investigation of allegations.
                    Farm Credit Administration
                    Office of Inspector General
                      Fiscal Years 2008-2009

          STRATEGIC AND OPERATING PERFORMANCE PLAN




                                          MISSION
The OIG’s work products and presence will promote economy, efficiency, and integrity in
Agency operations.

                                       CORE VALUES
   •   Integrity – Giving straightforward, objective and balanced advice, motivated by a desire
       to improve conditions and do what is right.
   •   Excellence – Producing high quality work and products that are timely and relevant.
   •   Knowledge – Acquiring and expanding relevant skills and expertise.
   •   Responsibility – Being accountable for our actions, work, and results and holding our
       customers to the same.


                                  CORE COMPETENCIES
   •   Teamwork – We combine our staff skills and outside expertise to accomplish our
       mission.
   •   Technology – We enhance the effectiveness of our work with the practical application of
       technology.
   •   Broad Vision – We use our FCA knowledge to focus efforts on significant issues within
       the Agency.
   •   Customer Centered – We are independent and believe we are successful when we
       have helped FCA become more successful.


                                       ASSUMPTIONS

   •   Changing work force. There will continue to be periodic changes in FCA’s Board
       composition and Agency organization, and ongoing changes in FCA staffing, e.g., new
       hires and retirements. The latter results in the loss of corporate knowledge, e.g., that
       gained from the Agency’s regulatory experience during the agriculture crisis of the mid
       1980s through the early 1990s. The Farm Credit System (FCS or System) and the
       credit needs of rural America will continue to evolve and change. The financial and
    banking industry will continue to become more complex. As a result, the Agency’s
    methodology in achieving its mission will continually evolve and the OIG will need to
    remain vigilant over Agency performance and internal controls.

•   Changing work environment. As FCA leverages technology to improve its processes,
    the OIG will have to be positioned to evaluate new risks in internal controls and security
    measures. As a result, the OIG has expanded its expertise in technology to effectively
    perform the function.

•   Limited budget resources. Budget pressures on the OIG will be equivalent to those
    faced by FCA as a whole. The OIG will have to use an efficient mix of its core
    competencies and external resources to fulfill its mission. Technology will continue to
    cause change in processes and our approach to work.
•   Farm Credit Act. Changes in the agricultural and the financial industries will cause the
    FCS to seek greater flexibility in law and regulations. OIG will continue to ensure that
    the FCA is ever mindful of its arms length regulatory role and mission to ensure the
    System’s service to rural America in a safe and sound manner, and will continue to
    review and make recommendations regarding laws and regulations.


                      PRODUCTS AND SERVICES, AND GOALS

•   Audit and evaluate the Agency’s programs and operations to promote economy,
    efficiency, and effectiveness.
       1. Deliver quality audit and inspection products and services that are useful to the
          Board, management, and the Congress.
       2. Provide technical advice and assistance to Agency officials in developing sound
          management information and financial reporting systems and in streamlining
          programs and operations.
       3. Continuously improve OIG staff, products, and internal office administration.

•   Investigate observed, alleged, or suspected wrongdoing to prevent and detect
    fraud, waste, abuse, and mismanagement in Agency programs and operations.
       1. Effectively investigate and report administrative and criminal violations relating to
          FCA programs and personnel.
       2. Educate employees on their responsibility to report wrongdoing to the OIG.
       3. Provide relevant information on results of investigative activities to appropriate
          parties.
•   Review and make recommendations regarding existing and proposed legislation
    and regulations relating to Agency programs and operations and the IG
    community.
       1. Maintain an effective program for reviewing and commenting on proposed and
          existing legislation and regulations.
•   Work with the Agency head and Congress to improve program management, and
    the Inspectors General community and other related organizations to address
    government-wide issues.
       1. Building relationships with program managers based on a shared commitment to
          improving program operations and effectiveness.
       2. Provide leadership to the IG community.
       3. Contribute to special projects to improve the Agency.
                                                Farm Credit Administration
                                                Office of Inspector General
                                                  Fiscal Years 2008-2009


                    AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS
                                                    AGENCY GOALS 1, 2 AND 3

               OIG GOAL                                  PERFORMANCE MEASURES                                          OUTCOME/IMPACT
1.   Deliver quality audit, inspection, and   Audits and inspections are relevant. Audit coverage          FCA programs and operations are more
     review products and services that        includes all mandated audits and at least 75% of those       effective.
     are useful to the Board,                 suggested by the Board and management.
                                                                                                           Waste in Agency programs and operations is
     management and Congress.
                                              Risk is addressed. 100% of OIG audits are performed in       reduced.
                                              high risk/high dollar programs and activities and/or are
                                                                                                           Increased Agency compliance with laws,
                                              tied to the Agency strategic planning goals.
                                                                                                           regulations, and internal policies and
                                              Products are timely, i.e., average time to complete audits   procedures.
                                              and issue draft reports will not exceed 6 months.
                                                                                                           The Agency’s stature and reputation is
                                              Audits are constructive. At least 75% of audit products      elevated in the eyes of the Congress, the
                                              contain recommendations to improve Agency operations.        Administration, the FCS, FCA employees and
                                              The Agency accepts at least 80% of the OIG audit             the public.
                                              recommendations.
                                                                                                           FCA is more effective in carrying out its
                                                                                                           mission.
                                                                                                           The OIG is more effective in promoting
                                                                                                           economy, effectiveness and efficiency within
                                                                                                           the Agency.
                                                                                                           FCA continues to get an unqualified audit
                                                                                                           opinion on financial statements.
                                              Farm Credit Administration
                                              Office of Inspector General
                                                Fiscal Years 2008-2009


                    AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS
                                                  AGENCY GOALS 1, 2 AND 3

               OIG GOAL                                 PERFORMANCE MEASURES                                      OUTCOME/IMPACT


2.   Provide technical advice and           The IG advises the Chairman concerning policy direction    OIG input and advice contributes to Agency
     assistance to Agency officials in      or administrative priorities.                              decisions and actions that are more complete
     developing sound management                                                                       and valid in the inception.
                                            OIG performs analysis and provides technical advice to
     information and financial reporting
                                            management concerning accounting, management               Increase in management requests for advice,
     systems and in streamlining
                                            systems and controls, and performance measures.            review, and technical assistance.
     programs and operations.
                                                                                                       Peer review reports provide an unmodified
                                                                                                       opinion that OIG audit work meets or exceeds
                                                                                                       quality audit standards prescribed by the
                                                                                                       Government Accountability Office (GAO) and
                                                                                                       the President’s Council on Integrity and
                                                                                                       Efficiency (PCIE) and the Executive Council on
                                                                                                       Integrity and Efficiency (ECIE).
3.   Continuous improvement in OIG          OIG training ensures the technical proficiency of staff.   The IG’s opportunity to facilitate positive
     staff, products, and internal office                                                              change within the Agency is enhanced by the
                                            OIG implements administrative improvements identified
     administration.                                                                                   quality and credibility of OIG products and
                                            through reviews of other Agency programs and through
                                                                                                       advice.
                                            staff involvement with the professional community.
                                             Farm Credit Administration
                                             Office of Inspector General
                                               Fiscal Years 2008-2009
                                                              INVESTIGATIONS
                                                   AGENCY GOALS 1 AND 2

             OIG GOAL                                  PERFORMANCE MEASURE                                         OUTCOME/IMPACT
1. Administrative and criminal             Investigative reports are timely and presented in an        Administrative action, convictions or pleas are
   violations relating to FCA programs     objective and factual manner. Memoranda are issued to       obtained for employees and/or contractors
   and personnel are effectively           management describing internal control weaknesses or        found guilty of wrongdoing.
   investigated and reported.              program deficiencies found during the investigative
                                                                                                       Management actions taken against employees
                                           process with suggestions to prevent and/or detect future
                                                                                                       serve as a deterrent to future wrongdoing.
                                           wrongdoing.
                                                                                                       FCA internal policies, procedures and controls
                                           70% of active cases will be less than two years old (from
                                                                                                       are strengthened to prevent and/or detect
                                           the date the case was opened).
                                                                                                       future wrongdoing.
                                           100% of employee cases without criminal prosecution
                                           potential will be completed within one year from opening
                                           the case.
2. FCA employees and managers              Allegations of wrongdoing are received in a timely          Investigations are more successful because
   recognize their responsibility to       manner and are supported by specific information.           they are initiated in a timelier manner and have
   immediately report observed or                                                                      better information.
   suspected wrongdoing to the IG.
                                                                                                       FCA employees are more willing to report real
                                                                                                       or suspected wrongdoing because they trust
                                                                                                       the competence, fairness and confidentiality of
                                                                                                       OIG’s investigations.
3. Agency officials and the Congress       Summaries of investigations and the resulting               The Chairman and the Congress are better
   are kept fully and currently informed   administrative or judicial actions taken are incorporated   informed about OIG investigations, and
   of problems found in the process of     into the Semiannual Report to the Congress, along with      administrative and judicial consequences.
   and resulting from investigative        any disagreements on the actions taken or failure of
                                                                                                       Public confidence in the integrity of FCA
   activities.                             management to act in a timely and responsible fashion.
                                                                                                       programs and internal operations is
                                           Findings made during the investigative process              heightened.
                                           concerning the problem at issue or systemic problems
                                           are recognized and corrected or mediated by
                                           management.
1



                                                 Farm Credit Administration
                                                 Office of Inspector General
                                                   Fiscal Years 2008-2009


                                               LEGISLATIVE AND REGULATORY REVIEW
                                                               AGENCY GOAL 2

                 OIG GOAL                                   PERFORMANCE MEASURE                                      OUTCOME/IMPACT
    1. Maintain an effective program for       Processes are established and documented for              OIG input is part of the decision making
       reviewing and commenting on             identifying and circulating (as appropriate) relevant     process in approving or amending legislation,
       proposed and existing legislation and   documents.                                                regulations, circulars and other policy
       regulations affecting the Agency and                                                              documents.
                                               Constructive comments on relevant documents are
       the IG community.
                                               submitted by the deadlines requested by the office,       Constructive criticism and creative alternatives
                                               Agency, or staff circulating comments.                    offered in OIG comments improve the quality
                                                                                                         and usefulness of documents initiated by the
                                               Document review activity is summarized for inclusion in
                                                                                                         Agency.
                                               the Semiannual Report to the Congress.
                                                                                                         FCA Board and management are informed
                                                                                                         about the status of new or pending legislation
                                                                                                         or regulations initiated externally.
                                              Farm Credit Administration
                                              Office of Inspector General
                                                Fiscal Years 2008-2009


                                                          OUTREACH PROGRAM
                                                    AGENCY GOALS 1 AND 2

              OIG GOAL                                  PERFORMANCE MEASURE                                         OUTCOME/IMPACT
1. Agency personnel understand and          Develop and maintain educational brochures or               Agency employees’ acceptance of and
   accept OIG’s role within FCA and the     pamphlets describing OIG roles and activities.              cooperation with OIG activities is improved
   IG community at 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.
2. OIG staff provide leadership to          Time and resources are provided to OIG staff members        Projects and activities of adjunct organizations
   organizations directly contributing to   as an incentive to contribute to outside organizations by   such as the Association of Government
   the IG community.                        serving on committees and holding offices.                  Accountants (AGA), Institute of Internal
                                                                                                        Auditors (IIA), PCIE/ECIE, Council of Counsels
                                                                                                        to Inspector Generals (CCIG), Federal Law
                                                                                                        Enforcement Training Center (FLETC), and
                                                                                                        Inspectors General Auditor Training Institute
                                                                                                        (IGATI) are improved by OIG staff contributions
                                                                                                        and participation.
                                                                                                        The IG community is more credible and
                                                                                                        effective.
3. OIG staff contribute to special          OIG staff will participate in projects that contribute to   Management practices at the Agency are
   projects for improving the Agency,       achieving the vision of a better Agency and government.     improved by OIG staff participation in FCA
   the IG community, and the Federal                                                                    special projects.
   government.
                                                                                                        FCA programs and operations are more
                                                                                                        effective and efficient.
15-August-2007
                                   FARM CREDIT ADMINISTRATION
                                      FY 2008/2009 Budget Call
                                              Unit 700000
                                      Office of Inspector General
                                           Summary Budget



 FULL-TIME EQUIVALENTS (FTE)                           4.60         4.60

                                                      FY 2008 FY 2009    DIFFERENCE
 OBJECT CLASSIFICATION                                Revised Proposed Amount Percent
    1100 Total Personnel Compensation
     11.1 Permanent Full-Time                         418,812     421,724      2,912     0.70%
     11.3 Other than Permanent Full-Time              268,302     273,477      5,175     1.93%
     11.6 Overtime                                          0           0          0     0.00%
     11.7 Other Personnel Compensation - Awards         2,000       2,000          0     0.00%
                                TOTAL 1100            689,114     697,201      8,087     0.00%
    1200 Total Personnel Benefits
     12.1 Civilian Personnel Benefits/Retirement      165,446     171,181      5,735     3.47%
     12.3 Incentives                                        0           0          0     0.00%
     12.6 Relocation/Permanent Change Of Station            0           0          0     0.00%
                                TOTAL 1200            165,446     171,181      5,735     0.00%
    1300 Benefits Former Personnel
     13.0 Benefits for Former Personnel                       0            0       0     0.00%
                                TOTAL 1300                    0            0       0     0.00%
    2100 Travel and Transportation of Persons
     21.1 Domestic and Local Travel                     7,400        5,100     -2,300   -31.08%
          Relocation/Permanent Change of Station
     21.5                                                     0            0       0     0.00%
          (PCS)
                                TOTAL 2100              7,400        5,100     -2,300    0.00%
    2200 Transportation of Things
          Transportation of Things (Non-
     22.1                                                250           250         0     0.00%
          Relocation/PCS)
          Relocation/Permanent Change of Station
     22.5                                                     0            0       0     0.00%
          (PCS)
                                TOTAL 2200               250           250         0     0.00%
          Rent, Communications, Utilities and Misc.
    2300
          Charges
     23.2 Rental Payments to Others                     1,500        1,500         0     0.00%
     23.3 Utilities                                         0            0         0     0.00%
     23.4 ADP Rental                                        0            0         0     0.00%
     23.5 Telecommunications                            2,595        2,625        30     1.16%
     23.7 Other Rentals                                     0            0         0     0.00%
     23.8 Postage                                         100          100         0     0.00%
                                TOTAL 2300              4,195        4,225        30     0.00%
15-August-2007
                                    FARM CREDIT ADMINISTRATION
                                       FY 2008/2009 Budget Call
                                               Unit 700000
                                       Office of Inspector General
                                            Summary Budget



      2400 Printing and Reproduction
       24.1 Government Printing                             0           0        0     0.00%
       24.3 Commercial Printing and Duplication           750         750        0     0.00%
       24.5 Advertising                                     0           0        0     0.00%
                                TOTAL 2400                750         750        0     0.00%
    2500 Other Contractual Services
     25.1 Consulting Services                         102,000    106,000      4,000     3.92%
     25.2 Other Services                                6,100      4,500     -1,600   -26.23%
          Purchase of Goods and Services from
     25.3                                               9,000        6,600   -2,400   -26.67%
          Govt. Accts.
     25.4 Operation and Maintenance of Facilities           0           0        0     0.00%
          Operation and Maintenance of
     25.7                                                   0           0        0     0.00%
          Equipment
     25.9 Relocation/PCS                                    0          0         0     0.00%
                                TOTAL 2500            117,100    117,100         0     0.00%
    2600 Supplies and Materials
     26.1 Office Supplies and Publications              1,250        1,250       0     0.00%
     26.4 Fuel                                              0            0       0     0.00%
                                TOTAL 2600              1,250        1,250       0     0.00%
    3100 Equipment
     31.2 Office Furniture and Equipment                  500          500        0     0.00%
     31.5 ADP Software                                    500          500        0     0.00%
     31.6 ADP Equipment/Hardware                        1,550          200   -1,350   -87.10%
                                TOTAL 3100              2,550        1,200   -1,350   -87.10%
    4200 Insurance Claims and Indemnities
     42.1 Tort Claims                                       0          0       0       0.00%
                                TOTAL 4200                  0          0       0       0.00%
 GRAND TOTAL FOR UNIT                                $988,055   $998,257 $10,202       1.03%
15-August-2007
                                              FARM CREDIT ADMINISTRATION
                                                 FY 2008/2009 Budget Call
                                                         Unit 700000
                                                 Office of Inspector General
                                                      Detailed Budget



 FULL-TIME EQUIVALENTS (FTE)                                                         4.60       4.60


                                                                                    FY 2008   FY 2009       DIFFERENCE
 OBJECT CLASSIFICATION                                                             Revised    Proposed     Amount Percent
1100      Total Personnel Compensation
 11.1     Permanent Full-Time
        1111                         Permanent Full-Time                          418,812      421,724       2,912   0.70%
        1199                         Accrual for Funded Leave                          0               0        0    0.00%
                         Sub-Total                                                418,812      421,724       2,912   0.70%


 11.3     Other than Permanent Full-Time
        1139                         Other than Permanent Full-Time               268,302      273,477       5,175   1.93%
                         Sub-Total                                                268,302      273,477       5,175   1.93%


 11.6     Overtime
        1161                         Overtime                                          0               0        0    0.00%
                         Sub-Total                                                     0               0        0    0.00%


 11.7     Other Personnel Compensation - Awards
        1171                         Performance, Incentives and Other Awards       2,000        2,000          0    0.00%
                         Sub-Total                                                  2,000        2,000          0    0.00%


 TOTAL 1100                                                                       689,114      697,201       8,087   1.17%


1200      Total Personnel Benefits
 12.1     Civilian Personnel Benefits/Retirement
        1213                         TSP Match                                     18,789       19,112        323    1.72%
        1217                         Disability Insurance Contributions             2,817        2,850         33    1.17%
        121B                         Wellness, Flex-care/Life Cycle Programs        6,500        6,500          0    0.00%
        1299                         Benefits Generated from Payroll              137,340      142,719       5,379   3.92%
                         Sub-Total                                                165,446      171,181       5,735   3.47%


 12.3     Incentives
        1236                         Public Transportation Initiatives                 0               0        0    0.00%
        1237                         Student Loan Repayments                           0               0        0    0.00%
                         Sub-Total                                                     0               0        0    0.00%


 12.6     Relocation/Permanent Change Of Station
        1224                         Relocation Payments Under Object Code 1200        0               0        0    0.00%
                         Sub-Total                                                     0               0        0    0.00%


 TOTAL 1200                                                                       165,446      171,181       5,735   3.47%


1300      Benefits Former Personnel
 13       Benefits for Former Personnel
15-August-2007
                                             FARM CREDIT ADMINISTRATION
                                                FY 2008/2009 Budget Call
                                                        Unit 700000
                                                Office of Inspector General
                                                     Detailed Budget

        1302                         Unemployment Compensation                              0       0        0   0.00%
                         Sub-Total                                                          0       0        0   0.00%


 TOTAL 1300                                                                                 0       0        0   0.00%


2100      Travel and Transportation of Persons
 21.1     Domestic and Local Travel
        2121                         Local Travel                                        1,000   1,100     100 10.00%
        2199                         Temporary Duty Travel                               6,400   4,000   -2,400 -37.50%
                         Sub-Total                                                       7,400   5,100   -2,300 -31.08%


 21.5     Relocation/Permanent Change of Station (PCS)
        2151                         Relocation Travel Expenses                             0       0        0   0.00%
        2152                         Relocation House Hunting                               0       0        0   0.00%
                         Sub-Total                                                          0       0        0   0.00%


 TOTAL 2100                                                                              7,400   5,100   -2,300 -31.08%


2200      Transportation of Things
 22.1     Transportation of Things (Non-Relocation/PCS)
        2211                         Freight and Express Mail                             250     250        0   0.00%
        2212                         Freight and Express Mail - Contract Mail Services      0       0        0   0.00%
                         Sub-Total                                                        250     250        0   0.00%


 22.5     Relocation/Permanent Change of Station (PCS)
        2251                         Transportation of Household Goods                      0       0        0   0.00%
                         Sub-Total                                                          0       0        0   0.00%


 TOTAL 2200                                                                               250     250        0   0.00%


2300      Rent, Communications, Utilities and Misc. Charges
 23.2     Rental Payments to Others
        2321                         Rent/Lease - Space Lodging                          1,500   1,500       0   0.00%
                         Sub-Total                                                       1,500   1,500       0   0.00%


 23.3     Utilities
        2331                         Utilities - Other than Telephone and Comm. Svcs.       0       0        0   0.00%
                         Sub-Total                                                          0       0        0   0.00%


 23.4     ADP Rental
        2341                         ADP Equipment and Software Rental                      0       0        0   0.00%
                         Sub-Total                                                          0       0        0   0.00%


 23.5     Telecommunications
        2351                         Telephone and Communication Services                2,595   2,625      30   1.16%
        2354                         Wireless Communication Services                        0       0        0   0.00%
                         Sub-Total                                                       2,595   2,625      30   1.16%
15-August-2007
                                                FARM CREDIT ADMINISTRATION
                                                   FY 2008/2009 Budget Call
                                                           Unit 700000
                                                   Office of Inspector General
                                                        Detailed Budget


 23.7     Other Rentals
        2371                           Non-ADP Equipment Rental                              0         0        0   0.00%
                           Sub-Total                                                         0         0        0   0.00%


 23.8     Postage
        2382                           Postage - USPS                                        0         0        0   0.00%
        2384                           Postage Meter Rental                                  0         0        0   0.00%
        2385                           Messenger and Courier Services                      100       100        0   0.00%
                           Sub-Total                                                       100       100        0   0.00%


 TOTAL 2300                                                                               4,195     4,225      30   0.72%


2400      Printing and Reproduction
 24.1     Government Printing
        2411                           U.S. Government Printing Office (GPO)                 0         0        0   0.00%
                           Sub-Total                                                         0         0        0   0.00%


 24.3     Commercial Printing and Duplication
        2431                           Commercial Printers/Photographers                   750       750        0   0.00%
                           Sub-Total                                                       750       750        0   0.00%


 24.5     Advertising
        2451                           Publications of Notices/Classified Advertising        0         0        0   0.00%
                           Sub-Total                                                         0         0        0   0.00%


 TOTAL 2400                                                                                750       750        0   0.00%


2500      Other Contractual Services
 25.1     Consulting Services
        2511                           Consulting Services                              102,000   106,000   4,000   3.92%
                           Sub-Total                                                    102,000   106,000   4,000   3.92%


 25.2     Other Services
        2524                           Miscellaneous Services                             1,300     1,300       0   0.00%
        2528                           Training - Commercial                              4,800     3,200   -1,600 -33.33%
                           Sub-Total                                                      6,100     4,500   -1,600 -26.23%


 25.3     Purchase of Goods and Services from Govt. Accts.
        2531                           Services of Other Government Agencies                 0         0        0   0.00%
        2538                           Training - Government                              9,000     6,600   -2,400 -26.67%
                           Sub-Total                                                      9,000     6,600   -2,400 -26.67%


 25.4     Operation and Maintenance of Facilities
        2541                           Renovating Office Space                               0         0        0   0.00%
                           Sub-Total                                                         0         0        0   0.00%
15-August-2007
                                                FARM CREDIT ADMINISTRATION
                                                   FY 2008/2009 Budget Call
                                                           Unit 700000
                                                   Office of Inspector General
                                                        Detailed Budget

 25.7     Operation and Maintenance of Equipment
        2571                         Operation/Maintenance - Non ADP Equipment                  0          0         0    0.00%
        2572                         Operation/Maintenance - ADP Equipment/Software             0          0         0    0.00%
                         Sub-Total                                                              0          0         0    0.00%


 25.9     Relocation/PCS
        2591                         Storage of Household Goods                                 0          0         0    0.00%
                         Sub-Total                                                              0          0         0    0.00%


 TOTAL 2500                                                                                117,100    117,100        0    0.00%


2600      Supplies and Materials
 26.1     Office Supplies and Publications
        2611                         Supplies                                                 750        750         0    0.00%
        2612                         Subscriptions, Publications and Training Materials       500        500         0    0.00%
                         Sub-Total                                                           1,250      1,250        0    0.00%


 26.4     Fuel
        2641                         Fuel                                                       0          0         0    0.00%
                         Sub-Total                                                              0          0         0    0.00%


 TOTAL 2600                                                                                  1,250      1,250        0    0.00%


3100      Equipment
 31.2     Office Furniture and Equipment
        3122                         Non-IT Equipment, Furniture, Fixtures                    500        500         0    0.00%
                         Sub-Total                                                            500        500         0    0.00%


 31.5     ADP Software
        3152                         Software                                                 500        500         0    0.00%
                         Sub-Total                                                            500        500         0    0.00%


 31.6     ADP Equipment/Hardware
        3162                         IT Equipment                                            1,550       200     -1,350 -87.10%
                         Sub-Total                                                           1,550       200     -1,350 -87.10%


 TOTAL 3100                                                                                  2,550      1,200    -1,350 -52.94%


4200      Insurance Claims and Indemnities
 42.1     Tort Claims
        4211                         Insurance Claims and Indemnities                           0          0         0    0.00%
                                                                                                0          0         0    0.00%
                         Sub-Total

 TOTAL 4200                                                                                     0          0         0    0.00%


 GRAND TOTAL FOR UNIT                                                                     $988,055   $998,257   $10,202   1.03%
                            Farm Credit Administration
                            Office of Inspector General
                              Fiscal Years 2008-2009

                  FY 2008 REVISED BUDGET AND JUSTIFICATIONS
TOTAL OFFICE BUDGET.............................................................................................$988,055
   Total approved IRM Plan amount included in Office Budget.......................................$34,845

1100 Personnel Compensation...................................................................................$689,114
Amount required to fund salaries of OIG staff (4.60 FTEs) charged with conducting audits,
inspections, evaluations, and investigations related to Agency programs and operations. We
are also responsible for reviewing existing and proposed legislation and regulations to evaluate
their impact on the Agency and on the prevention of fraud and abuse. Funds are included for
possible promotions. Funds are also allocated for possible cash awards.

1200 Personnel Benefits .............................................................................................$165,446
Benefits are the direct result of salaries, consistent with employees’ retirement systems, health
and other related benefits.

1300 Benefits for Former Personnel .....................................................................................$0
N/A

2100 Travel and Transportation of Persons ..................................................................$7,400
OIG staff will use these funds for travel ($6,400) related to scheduled IDP training and local
travel ($1,000) to professional association meetings, for example.

2200 Transportation of Things ..........................................................................................$250
The amount is necessary for express mail services throughout the year.

2300 Rent, Communications, Utilities, and Miscellaneous ..........................................$4,195
   2351 Approved IRM Plan ..............................................................................................$2,595
These funds will cover BlackBerry™ service for the IG ($905), telecommuters’ access expense
($1,440), and maintenance of an independent internet access for the anonymous HOTLINE
account ($250). The independent internet account is used for confidential reporting of fraud,
waste, abuse, and mismanagement. Also, in this object class are funds for offsite meeting
expenses ($1,500) for a one-day OIG team building exercise, and $100 for possible courier
delivery services.

2400 Printing and Reproduction........................................................................................$750
Cost of printing brochures, pamphlets, business cards, etc. when FCA cannot produce the
items.
                             Farm Credit Administration
                             Office of Inspector General
                               Fiscal Years 2008-2009

                   FY 2008 REVISED BUDGET AND JUSTIFICATIONS
2500 Other Contractual Services................................................................................$117,100
    2511 Approved IRM Plan ............................................................................................$30,000
Tuition funds ($4,800) from non-government sources will be used for individual training classes
for staff. Government tuition funds ($9,000) will be used for miscellaneous training courses
being attended by staff at the U.S. Department of Agriculture, Federal Law Enforcement
Training Center, and other government agencies. Individual training classes are a mandatory
requirement of the Federal Yellow Book for auditors and of the legal bar association for the
Counsel to the IG. Membership fees ($1,300) will cover the dues for professional organizations
to which OIG staff belong.
Contractual services will be needed to assist OIG staff in the review of programs, including
FISMA ($30,000), FCA financial statements audits ($42,000), and possible general contracting
needs ($30,000). (Even though budgeted, it is anticipated that the OIG will perform the FISMA
review in 2008.)

2600 Supplies and Materials ...........................................................................................$1,250
    2612 Approved IRM Plan .................................................................................................$200
To purchase miscellaneous text and reference books ($300) as well as on-going subscriptions
in the IRM Plan ($200). Office supply funds will be used mainly to purchase supplies for
dedicated office equipment ($750).

3100 Equipment ...............................................................................................................$2,550
    3152 Approved IRM Plan .................................................................................................$500
    3162 Approved IRM Plan ..............................................................................................$1,550
Purchase equipment and software as necessary to support IG programs, and an additional
$500 for non-IT related office equipment purchases.

4200 Insurance Claims and Indemnities...............................................................................$0
N/A
                            Farm Credit Administration
                            Office of Inspector General
                              Fiscal Years 2008-2009

               FY PROPOSED 2009 BUDGET AND JUSTIFICATIONS
TOTAL OFFICE BUDGET.............................................................................................$998,257
   Total approved IRM Plan amount included in Office Budget.......................................$33,525

1100 Personnel Compensation...................................................................................$697,201
Amount required to fund salaries of OIG staff (4.60 FTEs) charged with conducting audits,
inspections, evaluations, and investigations related to Agency programs and operations. We
are also responsible for reviewing existing and proposed legislation and regulations to evaluate
their impact on the Agency and on the prevention of fraud and abuse. Funds are also allocated
for possible cash awards.

1200 Personnel Benefits .............................................................................................$171,181
Benefits are the direct result of salaries, consistent with employees’ retirement systems, health
and other related benefits.

1300 Benefits for Former Personnel .....................................................................................$0
N/A

2100 Travel and Transportation of Persons ..................................................................$5,100
OIG staff will use these funds for travel ($3,865) related to scheduled IDP training and local
travel ($1,235) to professional association meetings, for example.

2200 Transportation of Things ..........................................................................................$250
The amount is necessary for express mail services throughout the year.

2300 Rent, Communications, Utilities, and Miscellaneous ..........................................$4,225
   2351 Approved IRM Plan ..............................................................................................$2,625
These funds will cover BlackBerry™ service and replacement for the IG ($935), telecommuters’
access expense ($1,440), and maintenance of an independent internet access for the
anonymous HOTLINE account ($250). The independent internet account is used for
confidential reporting of fraud, waste, abuse, and mismanagement. Also, in this object class are
funds for offsite meeting expenses ($1,500) for a one-day OIG team building exercise, and $100
for possible courier delivery services.

2400 Printing, Publications and Advertisement...............................................................$750
Cost of printing brochures, pamphlets, business cards, etc. when FCA cannot produce the
items.
                             Farm Credit Administration
                             Office of Inspector General
                               Fiscal Years 2008-2009

                FY PROPOSED 2009 BUDGET AND JUSTIFICATIONS
2500 Other Contractual Services................................................................................$117,100
    2511 Approved IRM Plan ............................................................................................$30,000
Tuition funds ($3,200) from non-government sources will be used for individual training classes
for staff. Government tuition funds ($6,600) will be used for miscellaneous training courses
being attended by staff at the U.S. Department of Agriculture, Federal Law Enforcement
Training Center, and other government agencies. Individual training classes are a mandatory
requirement of the Federal Yellow Book for auditors and of the legal bar association for the
Counsel to the IG. Membership fees ($1,300) will cover the dues for professional organizations
to which OIG staff belong.
Contractual services will be needed to assist OIG staff in the review of programs, including
FISMA ($30,000), FCA financial statements audits ($46,000), and general contracting needs
($30,000). (Even though budgeted, it is anticipated that the OIG will perform the FISMA review
in 2009.)

2600 Supplies and Materials ...........................................................................................$1,250
    2612 Approved IRM Plan .................................................................................................$200
To purchase miscellaneous text and reference books ($300) as well as on-going subscriptions
in the IRM Plan ($200). Office supply funds will be used mainly to purchase supplies for
dedicated office equipment ($750).

3100 Equipment ...............................................................................................................$1,200
    3152 Approved IRM Plan .................................................................................................$500
    3162 Approved IRM Plan .................................................................................................$200
Purchase software as necessary to support IG programs, and an additional $500 for non-IT
related office equipment purchases.

4200 Insurance Claims and Indemnities...............................................................................$0
N/A
                     Farm Credit Administration
                     Office of Inspector General
                       Fiscal Years 2008-2009
                                OIG CONTROL SYSTEM
STATUTORY ROLE AND RESPONSIBILITIES
The OIG was created within the FCA by the 1988 amendments to the IG Act as an independent
unit to: 1) conduct and supervise audits and investigations; 2) promote economy, efficiency and
effectiveness and to prevent fraud and abuse in program administration; and 3) keep the
Chairman and the Congress fully informed about problems and deficiencies and the progress in
correcting them.

The IG Act specifies the IG’s duties, responsibilities, and authorities. The IG Act precludes the
OIG from performing any Agency program operating function; rather, the OIG advises
management and the Congress about ways to improve programs. The IG works with the
Chairman to promote positive change in the Agency’s programs and operations.

OIG STAFFING NEEDED TO DELIVER PRODUCTS AND SERVICES
This section describes the staffing of the OIG. It also discusses how the OIG is organized to
produce the products and services appropriate to fulfill its responsibilities.

The Inspector General (IG) provides leadership, policy direction, and general management and
supervision of the OIG staff. The IG is also an advisor to the Chairman and the principal
spokesperson for OIG, coordinating its activities and issues with other agencies. The IG
position is intended to be comparable in grade with the other office directors.

The Counsel to the Inspector General provides independent legal advice, analysis of
proposed legislation and regulations, and reviews OIG products for legal sufficiency. Counsel
represents and defends OIG in all legal issues. The Counsel also participates in inspections
and evaluations as necessary. Additionally, the investigative function was reassigned to the
Counsel concurrent with the resignation of the former criminal investigator in October 2005 and
the abolishment of the Criminal Investigator position. The Counsel position is currently staffed
as a permanent part-time position at a 0.80 FTE.

The Senior Auditor position is devoted primarily to performance audits, inspections, and
management analyses, focusing on the significant management challenges of the Agency.
Also, this position oversees the contractor performing the annual financial, internal control, and
compliance audit of the Agency on behalf of the OIG.

A Senior Information Technology Auditor position was created with the discontinuance of the
Criminal Investigator position. This position focuses on audits and inspections related to the
broad range of the Agency’s information technology policies, processes, and security, and will
also perform the annual Federal Information Security Management Act review. This position is
currently staffed as a permanent part-time position at 0.80 FTE.

The Administrative Assistant is responsible for assisting the IG in budgeting, information
resources planning, procurement, training, administrative matters relating to personnel
management, and for general administrative support to the rest of the staff. The position is also
responsible for assisting the IG in the completion of the Semiannual Report to the Congress and
the quarterly and annual reports on the OIG Survey of FCS institutions regarding the Agency’s
examination function.

All positions in the OIG are staffed with qualified personnel.

OIG PRODUCTS AND SERVICES
Audits and Inspections are the primary vehicles through which the OIG develops
recommendations to promote economy, efficiency, and effectiveness in Agency programs and
prevent waste and mismanagement. OIG also provides input to the Chairman or managers
through management letters and confidential observations.

The auditors are devoted full time to audits and inspections. The Counsel to the IG may also
perform inspections and evaluations focusing on evaluating administrative and operational
issues.

OIG augments it core staff with contracts when subject matter expertise is needed to perform a
particular task.

Investigations encompass all OIG activities designed to detect or prevent fraud and abuse in
administering Agency programs.         Investigations are normally distinguished from other
evaluations in that they are normally directed at individuals rather than programs and activities.
However, some of OIG’s investigative actions are directed at preventing fraud and abuse
through improving the effectiveness of management and administrative controls and practices,
especially in high-risk areas. OIG also manages a HOTLINE to enable FCA employees and the
public to more easily report wrongdoing.

Legislative and Regulatory Review includes the review and comment on proposed and
existing legislation and regulations as they may affect the Agency or the OIG community. This
review activity is reported in the Semiannual Report to the Congress.

Outreach directs the OIG to focus attention to improving the Agency, the IG community and the
Federal government. This is accomplished by promoting Agency understanding of the OIG’s
role, providing leadership to organizations contributing to the IG community, and by participating
in special projects. The OIG also develops educational information describing the roles and
activities of the OIG and provides information to the public through the OIG web site.

Other OIG Functions include internal policy direction and leadership and advice to the
Chairman and management about Agency programs and operations. The IG is also
responsible for fully informing the Chairman and the Congress about fraud and other serious
problems in Agency programs, including management’s progress in carrying out corrective
actions.

OIG’S MISSION AND IMPLICATIONS FOR STAFFING
It is the OIG’s mission that its work products and presence promote economy, efficiency, and
integrity in Agency operations. OIG will accomplish this by being a leader and catalyst
identifying Agency challenges and opportunities. We will strive to:
       •   deliver products and services that are competent, objective, timely and relevant;
       •   maintain a customer focus which is responsive to the needs of decision-makers; and
       •     provide a positive working environment that encourages us to be innovative and
             reach our potential through teamwork and candid communication.

If we are to fulfill these statements, each staff member must broaden and refine their skills and
abilities, adopt a creative approach to problem solving, and take the initiative to influence
management.          In that way, management will be receptive to our conclusions and
recommendations. Staff must be supported through OIG management’s actions, equipment
and training, and mutual support from office teammates.

STAFFING ASSESSMENT AND STRATEGIES
OIG’s diverse responsibilities prescribed by the IG Act dictate the needed competencies within
the OIG staff. The independent nature of the OIG role also has implications for staffing. Even
with a very small staff, the OIG can deliver its products and services by maintaining a high level
of cross training and a broad base of expertise in audit, investigations, law, management, and
administration. The 4.60 FTEs in this plan constitute the critical mass necessary to credibly
perform OIG’s responsibilities. The OIG established the current staffing pattern after careful
analysis of the specialized nature of the OIG’s responsibilities and volume of work. Downsizing
over the years has reduced the OIG to a level at which any further reduction may adversely
affect the OIG’s accomplishment of its mission.

OIG staff performs evaluations and investigations under the general supervision of the IG.
These assignments are often unlike previous assignments and need creative thinking in
planning and developing the project, and mature judgment in developing conclusions and
recommendations and defending them before management.

The current OIG staff profile represents a high level of diversity. When filling future OIG
vacancies, we will make a concerted effort to attract a diverse pool of qualified candidates. We
share the Agency’s affirmative employment objectives and believe that a diverse staff is a
critical factor in the long-term success of an organization.

STAFFING OBJECTIVES AND STRATEGIES
Objectives
       •     Retain and refine the skills and competencies represented by the current staff profile.
       •     Employ the best-qualified applicant while ensuring the broadest possible pool of
             applicants.
       •     Cross-train all OIG staff to ensure each staff member can capably perform at least
             one OIG function as well as their primary staffing role.
       •     Increase effectiveness of collaboration among OIG staff members.
       •     Expand OIG staff participation in non-program activities of the Agency.

Strategies
       •     Staff will identify and participate in training and professional development activities
             identified in individual development plans to retain and enhance skills.
       •     Teamwork training will occur regularly to promote collaboration among OIG staff.
       •     Agency affirmative employment objectives will be considered in filling all OIG
             vacancies to achieve appropriate diversity.
                                                                                APPENDIX A


                     Farm Credit Administration
                     Office of Inspector General
                       Fiscal Years 2008-2009
                                        AUDIT PLAN
BACKGROUND
The Chairman and FCA Board have expressed their ongoing support for independent
assessments of significant programs of the Agency. The OIG has identified its focus issues in
this Strategic and Operating and Performance Plan (SOPP) and in the Semiannual Report to
the Congress in the form of management challenges, as discussed below.

MANAGEMENT CHALLENGES
This part of the semiannual report highlights major challenges confronting the Agency as it
works to fulfill its mission. The OIG is required by Federal law to identify these challenges and
present them in the Agency’s Performance and Accountability Report. Except for external
environmental challenges, most can be addressed through concerted action by management.
Over the past year, the OIG has observed progress by FCA management in addressing the
internal challenges.

Organizational Change
       Strategic studies were completed in 2005 that resulted in the initiation of significant
       organizational change designed to enable the Agency to further address all internal
       challenges and to better prepare for external environmental challenges.

       A major change was the transition to a new Chief Examiner. This resulted in a
       substantive transformation in the Office of Examination’s (OE) organization and
       operating methodology. While these changes are essentially fully institutionalized,
       efforts are ongoing to refine OE’s organization and processes to achieve relative full
       efficiency.

       Another substantive change was to reconsolidate into a single office, the Office of
       Management Services (OMS), the Agency’s personnel, financial, and information
       technology functions under the umbrella of a new manager. This has evidenced positive
       results. For example, the Agency’s financial services function, including accounting,
       financial reporting, contracting, and procurement, were outsourced to the Department of
       the Treasury’s Bureau of the Public Debt (BPD) effective April 1, 2006. The goal of this
       outsourcing was to achieve cost and performance efficiencies for the Agency. While
       there have been implementation hurdles that have been largely resolved, issues with
       BPD procurement processes have not. As a result, the FCA Board authorized OMS
       management to pull the Agency’s procurement function back within the Agency.

       Nevertheless, one of several benefits from the BPD outsourcing is that this OIG acquired
       the audit services for the financial audit of the Agency for 2007 through an accounting
       firm that participates with the BPD under a blanket purchase agreement. This will result
       in a substantial cost savings for the 2007 financial audit of the Agency and, hopefully, in
       future financial audits.
     These changes and others in the Agency’s organization and staffing are designed to
     promote improved efficiencies in the utilization of human capital, communication
     between the FCA Board and staff, and decision-making and oversight of the Agency by
     the FCA Board. Positive strides toward these objectives have been achieved.

Human Capital
     In March 2001, the OIG recommended FCA develop a human capital plan and FCA
     management agreed. Under Chairman Pellett’s leadership, senior managers have
     focused on the challenge of marshalling, managing, and maintaining human capital to
     assure accountability and maximize FCA performance. The Agency also made a
     significant investment in strategic studies in 2004 and 2005. The objective of the
     strategic studies was to create a picture of the System and the credit needs of rural
     America in 5 to 7 years and identify organizational and human capital opportunities to
     help FCA adapt. Chairman Pellett’s leadership in initiating the strategic studies, in
     reorganizing the Agency, and in emphasizing the importance of human capital resulted
     in the completion in 2006 of a comprehensive 5-year strategic human capital plan. The
     plan identifies five human capital goals and six human capital initiatives, including
     knowledge management and succession planning.

     A critical component in implementing the human capital plan is providing for
     management succession. Individuals with the potential to become managers should be
     identified, provided developmental opportunities, and, when appropriate, promoted to
     higher positions. This, as part of a human capital plan, should be linked to the Agency’s
     Strategic Plan for long-term achievement of the Agency’s mission.

     FCA’s challenge will be to implement the human capital plan to ensure organizational
     approaches that enable FCA to adapt to evolving technology, a changing workforce, and
     other environmental forces. In addition to achieving full transformation of the Agency’s
     organization and processes, how FCA meets its mission will be heavily dependent on
     quality of its human capital, having the appropriate skill sets, and how it organizes to
     meet its mission.

Financial Management
     Timely, accurate, and useful financial information is essential for:

        •   making day-to-day decisions;

        •   managing the Agency’s operations more effectively;

        •   supporting results-oriented management approaches; and

        •   ensuring accountability on an ongoing basis.

     As previously stated, in April 2006, FCA outsourced financial reporting, contracting, and
     procurement functions to BPD. While the transition is largely complete, its ultimate
     success will need to be measured by whether the Agency and its managers are
     receiving timely service, useful financial reporting, and improved efficiencies. As
     indicated earlier, timely and efficient service in the procurement area was not occurring
     and management brought procurement back within the Agency. To measure the
      effectiveness of BPD’s performance and the Agency’s reacquisition of the procurement
      function, OMS management will need to continue its ongoing assessment of
      performance and efficiencies in these service areas.

Leveraging Technology
      Information technology (IT) is a key element of management reform efforts that can help
      dramatically reshape government to improve performance and reduce costs. The
      Agency has recognized that in order to meet the constraints of its budget, it must be able
      to maximize its return on investment in technology. Internally, there is an opportunity for
      IT to complement human capital initiatives to reformulate the work processes of FCA.
      There is also an opportunity to capture knowledge of employees who are approaching
      retirement. Externally, E-Government offers many opportunities to better serve the
      public, make FCA more efficient and effective, and reduce costs. FCA has begun to
      implement some E-Government applications, including the use of the Internet to collect
      and disseminate information. FCA’s ongoing challenge is to establish effective
      mechanisms to ensure that current and future members of staff have the skills to use
      technology to operate in an efficient and effective manner.

Agency Governance
      The Farm Credit Act provides for a full-time three-member board to govern the Agency.
      FCA Board members are appointed by the President and confirmed by the Senate. A
      small full-time FCA Board presents a challenge in defining the roles and responsibilities
      of its members relative to the governance of the Agency. The FCA Board must be able
      to engage in professional policy debate and set a sound course for the Agency. The
      FCA Board’s rules of operation are a foundation for trust and shared expectations
      among its members. A collegial FCA Board, founded on mutual trust and respect, is
      essential to the Agency’s ultimate effectiveness.

      The Chairman has taken action to address this challenge by sharing authority and
      creating an environment at the FCA Board level that promotes a constructive working
      relationship between members. FCA Board members continually strive to remain
      current and knowledgeable in the dynamic agriculture, financial and regulatory
      environments. Changes in the membership of the FCA Board, a change that recently
      occurred, present opportunities and challenges to the FCA Board’s governance of the
      Agency.

Strategic Planning
      The FCA Board adopted its current Strategic Plan, which covers 2004-2009, in
      December 2003. Since adoption, the FCA Board has a new Chairman and two new
      members. These changes in leadership provide an opportunity to revise the plan to
      ensure the FCA Board’s vision is accomplished. The challenge is to establish a strategic
      plan that is ongoing in nature and in pace with the Agency’s environment. In 2005, the
      FCA Board established a Strategic Planning Committee (SPC), one of three committees
      established to facilitate the FCA Board’s oversight responsibilities and communication
      between the FCA Board and Agency staff. This committee has the potential to catalyze
      the strategic planning function and address this challenge. Steps in this regard were
      initiated by the SPC during early 2007 with an FCA Board and senior staff planning
      retreat.
          The FCA Board refined the Agency’s performance measures in January 2005. FCA
          should evaluate its performance measures on an ongoing basis to ensure that they
          challenge the organization. Performance measures can be a powerful tool to continue
          the push into a results-oriented organization. An effective performance management
          system fosters performance and accountability at the individual, organizational, and
          ultimately overall Agency levels.

A Changing Environment
          The System is a single industry lender and is vulnerable to economic swings.
          Nevertheless, the FCS remains sound in all material respects. Earnings and capital
          levels have continued to strengthen and asset quality remains high. However, there are
          many challenges facing agriculture and rural America today that raise the question of
          whether there should be modifications to the Farm Credit Act in order to enhance
          agricultural and rural economies of the future.

          In 1994, the Government Accountability Office (GAO) published a report on the cost and
          availability of credit in rural America. 1 The GAO concluded that the System did not need
          new statutory authorities in the near term, but that ongoing structural changes in
          agriculture and rural America could justify such changes in the longer term. GAO noted
          that over time, as agriculture and rural America continue to change, the System’s charter
          may need to be updated to ensure that the System is not hampered by outdated
          legislation.

          The System, through its Horizons project, has developed recommendations for the
          Congress to update the Farm Credit Act. The Agency can also anticipate that the
          System will press for broader powers through regulatory interpretations of the Farm
          Credit Act. At the same time, FCA must anticipate that the System’s competitors will
          press for the Agency to be a strict interpreter of the Farm Credit Act.

          As a financial regulator, FCA must maintain a flexible and responsive, yet independent
          and objective, regulatory environment. In this regard, the FCA must balance the often
          competing demands of ensuring the FCS fulfills its public policy purpose, proactively
          examining risk in the regulated institutions both individually and systemically, and
          controlling the cost of the regulator. FCA’s challenge is complex because it has become
          increasingly difficult to reconcile significant provisions of the Farm Credit Act with the
          realities of the agricultural industry, the business environment, and financial markets in
          the 21st Century.




1
    GAO/GGD-94-39 Farm Credit System Repayment of Federal Assistance and Competitive Position, March 1994.
AUDITS AND INSPECTIONS – FISCAL YEAR 2008 AND 2009
This audit plan identifies potential audit areas received from the FCA Board and management
as well as audit areas identified by OIG staff. OIG audits and inspections provide assurance to
the Chairman and FCA Board members that programs are operating effectively with appropriate
controls. Audit and inspection activities will most likely be selected from the areas listed below.
However, actual audits and inspections conducted may vary in order to be responsive to
changing needs or circumstances.



FY 2008-2009 Audit Plan
Annual Reviews
Audit of FCA’s Financial Statements
       The OIG contracts with an independent accounting firm to conduct an audit of FCA’s
       financial statements. During FY 2008-2009, the OIG will deliver the audit opinion on the
       financial statements as of September 30, 2008 and 2009, respectively. The OIG has
       ensured that its independent accounting firm has incorporated in its audit plan a work
       schedule that will ensure an appropriate audit scope and that time frames for delivery
       are met.
Federal Information Security Management Act (FISMA) Evaluation
       The FISMA requires agency program officials, Chief Information Officers and Inspectors
       General to conduct annual reviews of the agencies’ information security programs and
       report the results to the Office of Management and Budget. For 2007, the OIG will
       continue to utilize an outside contractor to complete this evaluation.



FY 2008
Efficiencies Realized through Outsourcing
       Outsourcing for services is a growing practice within the Federal community to achieve
       cost savings and to improve operating efficiencies and flexibility. In 2006, FCA executed
       a major outsourcing of its financial function to the Bureau of the Public Debt. The audit
       will evaluate the process used to achieve the outsourcing and efficiencies gained and
       any opportunities for efficiency not achieved.

Human Capital
       An effective human capital program is essential to ensure the Agency has the right
       people with the right skills to accomplish its mission. The objective of this audit will be to
       assess the adequacy of the Agency’s human capital plan and the effectiveness of its
       implementation. This includes an evaluation of Agency effectiveness in hiring and
       developing staff and of the continuity of leadership within the Agency.
FCA Information Technology Infrastructure Review
       FCA is in the process of performing a review of its current infrastructure to determine if
       alternative technologies would benefit the Agency.      In 2004, the OIG performed a
       review of project management for two critical systems [Momentum Financial
       Management System and Travel Manager] at FCA and found ineffective project
       management. We will evaluate the effectiveness of project management for the
       infrastructure review.

General Controls Review: Business Continuity
       A well developed and tested business continuity plan ensures that agencies will be able
       to continue to perform their essential functions during an emergency or disruption of
       normal operations. We will evaluate the FCA’s ability to ensure continuity of operations
       during an emergency or disruption of normal operations and to restore essential
       functions and activities.

Review of OE Organizational Structure and Work Processes
       The Office of Examination (OE) is the largest organizational unit within FCA. In recent
       years OE has undergone significant organizational and operational changes. We will
       assess the effectiveness of these organizational and examination methodology changes
       made within OE. We will also review OE’s use of technology to enhance their
       examination work processes.



FY 2009
Evaluation of OE Training & Commissioning Program
       The knowledge and skill level required to conduct sound examinations and effective
       supervision of Farm Credit System (FCS) institutions needs to continually develop to
       keep pace with the changing financial marketplace. We will review the adequacy of
       OE’s training and commissioning program in equipping OE’s staff with the knowledge
       and skills needed to examine and supervise the myriad of business practices and
       conditions found in System institutions.

Travel Cards
       Travels cards are used by FCA staff for expenses related to official agency business
       travel. Legislation is being proposed requiring Inspectors General to complete periodic
       assessments of agencies’ travel card programs. We will be reviewing the Agency’s
       travel card administration controls.

Review of Office of Regulatory Policy (ORP) Regulation Development Process
       The Agency’s mission includes developing policy and regulations that guide the FCS in
       advancing its mission to serve the financial needs of agriculture and rural America in a
       safe and sound manner. We will assess whether the policy and regulation development
       process complies with all applicable Federal requirements and is efficient.
FCA Strategic Plan
       The strategic plan serves as a guide for the Agency’s regulatory and examination
       oversight efforts. We will assess FCA’s process for the development of the strategic
       plan and evaluate the linkage of the Agency’s strategic plan to the office level operating
       plans. In addition, we will evaluate the Information Resources Management (IRM)
       planning process, including the role and functioning of the IRM Operations Committee
       (IRMOC).

General Controls Review: Access Controls
       Access controls are necessary to prevent unauthorized modification, disclosure, or loss
       of data. We will evaluate access controls at FCA to ensure they provide reasonable
       assurance that computer resources are protected against unauthorized access.

Controls for Safeguarding Sensitive Information and Social Security Numbers
       Following numerous incidents at various Federal agencies involving the compromise or
       loss of sensitive personal information, OMB and OPM have issued memorandums
       directing agencies to take steps to protect sensitive data including social security
       numbers. We will assess the effectiveness of controls to ensure sensitive information is
       being safeguarded to minimize vulnerabilities and unauthorized access.



Beyond FY 2009
   •   Periodic review of the Consolidated Reporting System
   •   General Controls Review: Software Development and Change Control
   •   General Controls Review: System Software
   •   General Controls Review: Segregation of Duties
   •   SmartPay Program
   •   Efficiency of the OGC Legal Opinion Process
   •   Borrower Complaint Handling
   •   Policy and Procedures Manual
   •   Adherence to the Government in the Sunshine Act
   •   Personal Identity Verification: Agency Validation of Employees’ Credentials used in
       Gaining Employment and Compliance with HSPD-12
   •   Agency Administration of the Correspondence Tracking System
   •   Sunset Act Compliance Regarding Reports Submitted to Congress
                                                                               APPENDIX B

                      Farm Credit Administration
                      Office of Inspector General
                        Fiscal Years 2008-2009

                                     IRM PLAN SUMMARY
IRM Budget        Object    FY 2008    FY 2009   FY 2010   FY 2011   FY 2012   FY 2013   Total
Category          Code       Costs      Costs     Costs     Costs     Costs     Costs    Costs

Telephone &       2351       2,595       2,625     2,625     2,595     2,625     2,625    15,690
Communications
Services

Consulting        2511      30,000      30,000         0         0         0         0    60,000
Services

Subscriptions &   2612       200           200       200       200       200       200     1,200
Publications

Software          3152       500           500       500       500       500       500     3,000

IT Equipment      3162       1,550         200       200     1,550       200       200     3,900

                    Total   $34,845    $33,525    $3,525    $4,845    $3,525    $3,525   $83,790
                                                                                                     APPENDIX C


                           Farm Credit Administration
                           Office of Inspector General
                             Fiscal Years 2008-2009

            FY 2008 REVISED PRODUCTS AND SERVICES BUDGET
This represents the allocation of budget dollars and FTEs to OIG’s products and services.
Management, administrative support and leave are disbursed across the four products and
services.

 Products/Services                                        Budget            % Budget             FTE            % FTE
 Audits, Inspections, and Review Products                $770,683               78%              3.59             78%

 Investigations                                           $59,283                 6%               .28              6%

 Legislation and Regulations Review                       $19,761                 2%               .09              2%
 Outreach                                                $138,328               14%                .64            14%

                                            Total        $988,055              100%              4.60            100%

Audits, Inspections, and Review Products—The OIG issues approximately 5-10 reports per
year (including the annual FCA financial audit). This includes recommendations to Agency
officials regarding improving the efficiency of Agency programs and mission achievement. It also
includes four survey reports. The survey of System institutions regarding the Agency’s
examination function has been produced for well over 10 years.
Budget for FY 2008—$770,683....................................................................................3.59 FTE
Investigative Function—Allegations received by the OIG are reviewed by testing information
provided to determine whether an investigation should be opened. Investigations are conducted
when appropriate. Maintaining the OIG HOTLINE and directing FCS borrower complaint or
inquiry issues to Agency components are additional functions of the investigative service.
Budget for FY 2008—$59,283....................................................................................... .28 FTE
Review and Comment on Proposed and Existing Legislation and Regulations—The OIG
reviews and comments on proposed and existing legislation and regulations affecting the Agency
and the IG community. Additionally, the OIG reviews, comments and responds to Congressional
and executive requests and inquiries.
Budget for FY 2008—$19,761....................................................................................... .09 FTE
Outreach Program—The OIG educates FCA employees about OIG’s role within the Agency.
The OIG lends leadership to organizations directly contributing to the IG community. Through
involvement in special projects and workgroups, the OIG makes contributions for improving the
Agency, the OIG community and the Federal government. This includes but is not limited to: the
Semiannual Report to the Congress, participation in external activities such as membership on
the ECIE and the CCIG, and instructing at the IG Academy and various public and Government
forums. We also participate in Agency efforts, such as the GPRA initiative, Employee’s Council,
Administrative Workgroup, Blacks in Government, and Continuity of Operations Plan.
Budget for FY 2008—$138,328..................................................................................... .64 FTE
                                                                                                     APPENDIX C

                           Farm Credit Administration
                           Office of Inspector General
                             Fiscal Years 2008-2009

          FY 2009 PROPOSED PRODUCTS AND SERVICES BUDGET
This represents the allocation of budget dollars and FTEs to OIG’s products and services.
Management, administrative support and leave are disbursed across the four products and
services areas.

 Products/Services                                        Budget            % Budget            FTE             % FTE
 Audits, Inspections, and Review Products                $778,641               78%              3.59             78%
 Investigations                                            $59,895               6%                .28             6%
 Legislation and Regulations Review                       $19,965                2%                .09             2%
 Outreach                                                $139,756               14%                .64            14%
                                             Total       $998,257              100%              4.60           100%

Audits, Inspections, and Review Products—The OIG issues approximately 5-10 reports per
year (including the annual FCA financial audit). This includes recommendations to Agency
officials regarding improving the efficiency of Agency programs and mission achievement. It
also includes four survey reports. The survey of System institutions regarding the Agency’s
examination function has been produced for well over 10 years.
Budget for FY 2009—$778,641....................................................................................3.59 FTE
Investigative Function— Allegations received by the OIG are reviewed by testing information
provided to determine whether an investigation should be opened. Investigations are conducted
when appropriate. Maintaining the OIG HOTLINE and directing FCS borrower complaint or
inquiry issues to Agency components are additional functions of the investigative service.
Budget for FY 2009—$59,895....................................................................................... .28 FTE
Review and Comment on Proposed and Existing Legislations and Regulations—The OIG
reviews and comments on proposed and existing legislation and regulations affecting the
Agency and the IG community. Additionally, the OIG reviews, comments and responds to
Congressional and executive requests and inquiries.
Budget for FY 2009—$19,965....................................................................................... .09 FTE
Outreach Program—The OIG educates FCA employees about OIG’s role within the Agency.
The OIG lends leadership to organizations directly contributing to the IG community. Through
involvement in special projects and workgroups, the OIG makes contributions for improving the
Agency, the OIG community and the Federal government. This includes but is not limited to: the
Semiannual Report to the Congress, participation in external activities such as membership on
the ECIE and the CCIG, and instructing at the IG Academy and various public and Government
forums. We also participate in Agency efforts, such as the GPRA initiative, Employee’s Council,
Administrative Workgroup, Blacks in Government, and Continuity of Operations Plan.
Budget for FY 2009—$139,756.......................................................................................64 FTE