oversight

FY 2010-2011

Published by the Farm Credit Administration, Office of Inspector General on 2009-08-19.

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

OFFICE OF
INSPECTOR GENERAL



   Strategic and Operating Performance Plan
                                and Budgets

                     Fiscal Years 2010-2011




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




August 19, 2009


The Honorable Leland A. Strom
Chairman
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

Dear Chairman Strom:

The enclosed document is the Office of Inspector General’s (OIG) Strategic and Operating
Performance Plan (SOPP) and Budgets for fiscal years 2010 and 2011.

The SOPP includes the OIG’s audit plan, 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

Glossary of Terms............................................................................................................. Tab 1


Introduction ....................................................................................................................... Tab 2


Strategic and Operating Performance Plan ....................................................................... Tab 3


Object Class Budget Overview (Summary and Detailed) .................................................. Tab 4

  FY 2010 – Revised Budget and Justifications

  FY 2011 – Proposed Budget and Justifications


OIG Control System .......................................................................................................... Tab 5


Audit Plan ......................................................................................................................... Tab 6


Appendices ....................................................................................................................... Tab 7

  Appendix A—Management Challenges

  Appendix B—IRM Plan Summary Report

  Appendix C—FY 2010-2011 Products and Services Budget

            Farm Credit Administration

            Office of Inspec t or General

              F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


                     GLOSSARY OF TERMS
Act               Farm Credit Act of 1971, as amended

Agency            Farm Credit Administration

CIGIE             Council of the Inspectors General on Integrity and Efficiency

CCIG              Council of Counsels to Inspectors General

FCA               Farm Credit Administration

FCA Board         Farm Credit Administration Board

FCS               Farm Credit System

FISMA             Federal Information Security Management Act

FLETC             Federal Law Enforcement Training Center

FTE               Full Time Equivalent

IDP               Individual Development Plan

IG                Inspector General (FCA)

IG Act            Inspector General Act of 1978, as amended

IRM               Information Resources Plan

OE                Office of Examination

OIG               Office of Inspector General (FCA)

OMB               Office of Management and Budget

SOPP              Strategic Operating and Performance Plan

SPC               Strategic Planning Committee

System            Farm Credit System
                       Farm Credit Administration

                       Office of Inspec t or General

                         F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


                                        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 also reviews existing and proposed legislation and regulations relating to
Agency programs and operations to assess the impact on Agency economy and efficiency.

The OIG contracts with an outside accounting firm for the annual audit of FCA’s financial
statements, internal control over financial reporting, and compliance with laws and regulations
relating to the determination of financial statement amounts. The accounting firm’s opinion
letters and accompanying Agency financial statements and notes are included in the Agency’s
annual Performance and Accountability Report. The OIG conducts the annual evaluation of the
Agency’s compliance with the Federal Information Security Management Act (FISMA) and
issues a report that is submitted to the Agency for further submission to the Office of
Management and Budget (OMB).

The OIG also maintains a Hotline for reporting allegations of fraud, waste, abuse, and
mismanagement. When there are alleged administrative or criminal violations relating to
Agency programs or personnel, the OIG will timely and effectively investigate and report.

Further, the OIG conducts a quarterly confidential survey of Farm Credit System (FCS or
System) institutions regarding the effectiveness of the Agency’s examination function and the
examiners. The OIG issues a quarterly report and annual summary report on survey results to
the Chief Examiner and Chairman.

OIG’s FY 2010 Budget Request

Section 6(f)(1) of the IG Act requires an Inspector General to highlight certain aspects of the
Inspector General’s budget request to the head of the department or designated Federal entity
to which the Inspector General reports. Section 6(f)(2) requires, in the case of FCA, the
Chairman to highlight the same aspects of the Inspector General’s budget request when
transmitting the Agency’s budget to the President.

For the Inspector General’s revised FY 2010 budget submission, the OIG’s budget information
required to be highlighted is as follows:

    •   The aggregate budget request for the OIG is $1,057,703.


__________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           1
    •	 The amount needed for OIG training is $9,000 (tuition).

    •	 The amount needed to support the Council of the Inspectors General on Integrity and
       Efficiency is $2,540.




__________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           2
                       Farm Credit Administration

                       Office of Inspec t or General

                         F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1

            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 may result 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 and from regulatory evolution since that time. The FCS
       and the credit needs of rural America will continue to evolve and change. The financial
       and banking industry will become a different provider of financial services coming out of
       the current financial services industry crisis. 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.
__________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           3
    •	 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 may make recommendations regarding laws and regulations.

                           PRODUCTS AND SERVICES, AND GOALS

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

    2.	 Investigate observed, alleged, or suspected wrongdoing to prevent and detect
        fraud, waste, abuse, and mismanagement in Agency programs and operations.
            •	 Effectively investigate alleged administrative and criminal violations relating to
               FCA programs and personnel.
            •	 Educate employees on their responsibility to report wrongdoing to the OIG.
            •	 Provide relevant information on results of investigative activities to appropriate
               parties.

    3.	 Review and make recommendations, as necessary, regarding existing and
        proposed legislation and regulations relating to Agency programs and operations
        and the Inspectors General community.

            •	 Maintain an effective program for reviewing and commenting on proposed and
               existing legislation and regulations.

    4.	 Work with the Agency head and Congress to improve program management, and
        with the Inspectors General community and other related organizations to address
        government-wide issues.
            •	 Building relationships with program managers based on a shared commitment to
               improving program operations and effectiveness.
            •	 Provide leadership to the Inspectors General community.
            •	 Contribute to special projects to improve the Agency.
__________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           4
                                                      Farm Credit Administration

                                                      Office of Inspec t or General

                                                        F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1



                        AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS

                                                                AGENCY GOALS 1 AND 2

                  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.
                                                                                                                FCA continues to receive unqualified financial
        management and Congress.
                                                   Risk is addressed. 100% of OIG audits are performed in       audits.
                                                   substantive Agency programs and activities and/or are
                                                                                                                Waste in Agency programs and operations is
                                                   tied to the Agency strategic planning goals.
                                                                                                                reduced.
                                                   Products are timely, i.e., average time to complete audits
                                                                                                                Increased Agency compliance with laws,
                                                   and issue draft reports will not exceed 6 months.
                                                                                                                regulations, and internal policies and
                                                   Audits are constructive. At least 75% of audit products      procedures.
                                                   contain recommendations to improve Agency operations.
                                                                                                                The Agency’s stature and reputation is
                                                   The Agency accepts at least 80% of the OIG audit
                                                                                                                elevated in the eyes of the Congress, the
                                                   recommendations.
                                                                                                                Administration, the FCS, FCA employees and
                                                                                                                the public.
                                                                                                                FCA is more effective in carrying out its
                                                                                                                mission.
                                                                                                                The OIG is more effective in promoting
                                                                                                                economy, effectiveness and efficiency within
                                                                                                                the Agency.




________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                                    5
                                                      Farm Credit Administration

                                                      Office of Inspec t or General

                                                        F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1



                        AUDITS AND EVALUATIONS OF AGENCY PROGRAMS AND OPERATIONS

                                                                AGENCY GOALS 1 AND 2

                  OIG GOAL	                                      PERFORMANCE MEASURES                                     OUTCOME/IMPACT

  2.	   Provide technical advice and               The IG advises the Chairman concerning policy direction    FCA continues to receive an unqualified
        assistance to Agency officials in          or administrative priorities.                              financial audit.
        developing sound management
                                                   OIG performs analysis and provides technical advice to     OIG input and advice contributes to Agency
        information and financial reporting
                                                   management concerning accounting, management               decisions and actions that are more complete
        systems and in streamlining
                                                   systems and controls, and performance measures.            and valid in the inception.
        programs and operations.

  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.
                                                                                                              Peer review reports provide an unmodified
                                                                                                              opinion that OIG audit work meets or exceeds
                                                                                                              quality audit standards prescribed by the
                                                                                                              Government Accountability Office and the
                                                                                                              Council of the Inspectors General on Integrity
                                                                                                              and Efficiency (CIGIE).




________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                                  6
                                                      Farm Credit Administration

                                                      Office of Inspector General

                                                        Fiscal Years 2010-2011

                                                                      INVESTIGATIONS
                                                                AGENCY GOAL S 1 AND 2

                 OIG GOAL                                        PERFORMANCE MEASURE                                          OUTCOME/IMPACT
   1.	 Alleged administrative and                Investigative reports are timely and presented in an             Administrative action, convictions or pleas are
       criminal violations relating to FCA       objective and factual manner. Memoranda are issued to            obtained for employees and/or contractors
       programs and personnel are                management describing internal control weaknesses or             found guilty of wrongdoing.
       effectively investigated and              program deficiencies found during the investigative process
                                                                                                                  Management actions taken against employees
       reported.                                 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 manner        Investigations are more successful because
       recognize their responsibility to         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              administrative or judicial actions taken are incorporated into   informed about OIG investigations, and
       informed of problems found in the         the Semiannual Report to the Congress, along with any            administrative and judicial consequences.
       process of and resulting from             disagreements on the actions taken or failure of
                                                                                                                  Public confidence in the integrity of FCA
       investigative activities.                 management to act in a timely and responsible fashion.
                                                                                                                  programs and internal operations is
                                                 Findings made during the investigative process concerning        heightened.
                                                 the problem at issue or systemic problems are recognized
                                                 and corrected or mediated by management.


________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                                       7
                                                      Farm Credit Administration

                                                      Office of Inspector General

                                                        F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1



                                                   LEGISLATIVE AND REGULATORY REVIEW

                                                                AGENCY GOAL S 1 AND 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 Inspectors General 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.




________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                                   8
                                                      Farm Credit Administration

                                                      Office of Inspector General

                                                        Fiscal Years 2010-2011


                                                                  OUTREACH PROGRAM
                                                                AGENCY GOAL S 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
      Inspectors General community at                                                                          through better understanding. OIG programs
                                                   Facilitate feedback from Agency employees and refine
      large.                                                                                                   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 Inspectors General community.            serving on committees and holding offices.                  Accountants, Institute of Internal Auditors,
                                                                                                               CIGIE, Council of Counsels to Inspectors
                                                                                                               General (CCIG), and Federal Law Enforcement
                                                                                                               Training Center (FLETC) are improved by OIG
                                                                                                               staff contributions and participation.
                                                                                                               The Inspectors General 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 Inspectors General community,                                                                        special projects.
      and the Federal government.
                                                                                                               FCA programs and operations are more
                                                                                                               effective and efficient.




________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                                 9
                                                     FARM CREDIT ADMINISTRATION

                                                        FY 2010/2011 Budget Call

                                                                Unit 700000

                                                        Office of Inspector General

                                                             Detailed Budget




 FULL-TIME EQUIVALENTS (FTE)                                                  4.61         4.61


                                                                             FY 2010     FY 2011         DIFFERENCE
 OBJECT CLASSIFICATION                                                       Revised     Proposed      Amount    Percent
1100      Total Personnel Compensation
 11.1     Permanent Full-Time
        1111                       Permanent Full-Time                        455,848      455,848          0       0.00%
        1199                       Accrual for Funded Leave                          0             0        0       0.00%
                       Sub-Total                                              455,848      455,848          0       0.00%


 11.3     Other than Permanent Full-Time
        1139                       Other than Permanent Full-Time             297,882      297,882          0       0.00%
                       Sub-Total                                              297,882      297,882          0       0.00%


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


 11.7     Other Personnel Compensation - Awards
                                   Performance, Incentives and Other
        1171                                                                    2,800        2,800          0       0.00%
                                   Awards
                       Sub-Total                                                2,800        2,800          0       0.00%


 TOTAL 1100                                                                   756,530      756,530          0       0.00%


1200      Total Personnel Benefits
 12.1     Civilian Personnel Benefits/Retirement
        1213                       TSP Match                                   20,473       20,473          0       0.00%
        1217                       Disability Insurance Contributions           3,015        3,015          0       0.00%
                                   Wellness, Flex-care/Life Cycle
        121B                                                                    6,500        6,500          0       0.00%
                                   Programs
        1299                       Benefits Generated from Payroll            157,905      163,637       5,732      3.63%
                       Sub-Total                                              187,893      193,625       5,732      3.05%


 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
                                   Relocation Payments Under Object
        1224                                                                         0             0        0       0.00%
                                   Code 1200
                       Sub-Total                                                     0             0        0       0.00%


 TOTAL 1200                                                                   187,893      193,625       5,732      3.05%




_______________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                               10
                                                   FARM CREDIT ADMINISTRATION

                                                      FY 2010/2011 Budget Call

                                                              Unit 700000

                                                      Office of Inspector General

                                                           Detailed Budget


1300      Benefits Former Personnel
 13       Benefits for Former Personnel
        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                                6,000    6,000     0      0.00%
        2199                      Temporary Duty Travel                       9,500    9,000   -500     -5.26%
                      Sub-Total                                              15,500   15,000   -500     -3.23%


 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                                                                  15,500   15,000   -500     -3.23%


2200      Transportation of Things
 22.1     Transportation of Things (Non-Relocation/PCS)
        2211                      Freight and Express Mail                     200      200      0      0.00%
                                  Freight and Express Mail - Contract
        2212                                                                     0        0      0      0.00%
                                  Mail Services
                      Sub-Total                                                200      200      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                                                                    200      200      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
                                  Utilities - Other than Telephone and
        2331                                                                     0        0      0      0.00%
                                  Comm. Svcs.
                      Sub-Total                                                  0        0      0      0.00%


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




_______________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                               11
                                                     FARM CREDIT ADMINISTRATION

                                                        FY 2010/2011 Budget Call

                                                                Unit 700000

                                                        Office of Inspector General

                                                             Detailed Budget



 23.5     Telecommunications
                                    Telephone and Communication
        2351                                                                    1,760    1,760      0    0.00%
                                    Services
        2354                        Wireless Communication Services              720      720       0    0.00%
                        Sub-Total                                               2,480    2,480      0    0.00%


 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                                                                     4,080    4,080      0    0.00%


2400      Printing and Reproduction
 24.1     Government Printing
                                    U.S. Government Printing Office
        2411                                                                       0        0       0    0.00%
                                    (GPO)
                        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
                                    Publications of Notices/Classified
        2451                                                                       0        0       0    0.00%
                                    Advertising
                        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                        80,000   80,000      0    0.00%
                        Sub-Total                                              80,000   80,000      0    0.00%


 25.2     Other Services
        2524                        Miscellaneous Services                      1,300    1,300      0    0.00%
        2528                        Training - Commercial                       4,200    6,100   1,900   45.24%
                        Sub-Total                                               5,500    7,400   1,900   34.55%




_______________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                               12
                                                    FARM CREDIT ADMINISTRATION
                                                       FY 2010/2011 Budget Call
                                                               Unit 700000
                                                       Office of Inspector General
                                                            Detailed Budget

 25.3     Purchase of Goods and Services from Govt. Accts.
                                  Services of Other Government
        2531                                                                     0        0        0     0.00%
                                  Agencies
        2538                      Training - Government                       5,600    4,100   -1,500   -26.79%
                      Sub-Total                                               5,600    4,100   -1,500   -26.79%


 25.4     Operation and Maintenance of Facilities
        2541                      Renovating Office Space                        0        0        0     0.00%
                      Sub-Total                                                  0        0        0     0.00%


 25.7     Operation and Maintenance of Equipment
                                  Operation/Maintenance - Non ADP
        2571                                                                     0        0        0     0.00%
                                  Equipment
                                  Operation/Maintenance - ADP
        2572                                                                     0        0        0     0.00%
                                  Equipment/Software
                      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                                                                  91,100   91,500     400     0.44%


2600      Supplies and Materials
 26.1     Office Supplies and Publications
        2611                      Supplies                                      680     500     -180    -26.47%
                                  Subscriptions, Publications and
        2612                                                                    320     320        0     0.00%
                                  Training Materials
                      Sub-Total                                               1,000     820     -180    -18.00%


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


 TOTAL 2600                                                                   1,000     820     -180    -18.00%


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


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




_______________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                               13
                                                     FARM CREDIT ADMINISTRATION

                                                        FY 2010/2011 Budget Call

                                                                Unit 700000

                                                        Office of Inspector General

                                                             Detailed Budget


 31.6      ADP Equipment/Hardware
        3162	                        IT Equipment                                150          180       30    20.00%
                         Sub-Total                                               150          180       30    20.00%


 TOTAL 3100	                                                                     650          680       30    4.62%


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	                                                     $1,057,703   $1,063,185   $5,482    0.52%




_______________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                               14
                           Farm Credit Administration

                           Office of Inspector General

                             Fiscal Years 2010-2011


                 FY 2010 REVISED BUDGET AND JUSTIFICATIONS
TOTAL OFFICE BUDGET ........................................................................................$1,057,703

   Total approved IRM Plan amount included in Office Budget ......................................$11,180


1100 Personnel Compensation .................................................................................$756,530

Amount required to fund salaries ($753,730) of OIG staff (4.61 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. Funds ($2,800) are also allocated for
possible cash awards.

1200 Personnel Benefits............................................................................................$187,893

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

1300 Benefits for Former Personnel ................................................................................... $0



2100 Travel and Transportation of Persons ...............................................................$15,500

OIG staff will use these funds for travel ($9,500) related to scheduled IDP training and local
travel ($3,000) to professional association meetings, for example. Travel funds ($3,000) are
also included for local and/or temporary duty travel related to possible investigative matters.

2200 Transportation of Things ........................................................................................ $200

The amount is for express mail services throughout the year.

2300 Rent, Communications, Utilities, and Miscellaneous .........................................$4,080

   2351 Approved IRM Plan ............................................................................................$1,760

   2354 Approved IRM Plan .............................................................................................. $720

These funds will cover BlackBerry™ voice, data, and tethering service for the IG ($720),
telecommuters’ access expense ($1,440), and maintenance of an independent internet
account for the anonymous HOTLINE account ($320). 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 possible one-day OIG team building
exercise, and $100 for potential courier delivery services.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         15
                             Farm Credit Administration

                             Office of Inspector General

                               F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


                 FY 2010 REVISED BUDGET AND JUSTIFICATIONS

2400 Printing and Reproduction ..................................................................................... $750

Cost of printing brochures, pamphlets, business cards, etc. when FCA cannot produce the
items.

2500 Other Contractual Services ................................................................................$91,100

Tuition funds ($4,200) from non-government sources are for staff training. Government tuition
funds ($5,600) are for staff training at the U.S. Department of Agriculture, the Federal Law
Enforcement Training Center, and other government agencies, for example. Individual
training classes are a mandatory requirement of the Government Audit Standards (Yellow
Book) for auditors and of the bar association for the Counsel to the IG. Membership fees
($1,300) will cover the dues for professional organizations to which OIG staff belong.
Consulting services are utilized to assist OIG staff in the review of programs, including the
FCA financial statement audit ($40,000) and possible general contracting needs ($37,460).
Lastly, $2,540 is budgeted for the support of CIGIE.

2600 Supplies and Materials .........................................................................................$1,000

    2611 Approved IRM Plan .............................................................................................. $180

    2612 Approved IRM Plan .............................................................................................. $220

To purchase miscellaneous reference books ($100) as well as on-going subscriptions in the
IRM Plan ($220), one BlackBerry™ replacement battery ($30), and one laptop carrying case
($150). General office supply funds ($500) are also included.

3100 Equipment ............................................................................................................... $650

    3152 Approved IRM Plan .............................................................................................. $500

    3162 Approved IRM Plan .............................................................................................. $150

Purchase desktop printer ($150) as necessary to support OIG programs and an additional
$500 for software.

4200 Insurance Claims and Indemnities............................................................................. $0





_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         16
                           Farm Credit Administration

                           Office of Inspector General

                             F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


               FY 2011 PROPOSED BUDGET AND JUSTIFICATIONS
TOTAL OFFICE BUDGET ........................................................................................$1,063,185

   Total approved IRM Plan amount included in Office Budget ......................................$11,030


1100 Personnel Compensation .................................................................................$756,530

Amount required to fund salaries ($753,730) of OIG staff (4.61 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. Funds ($2,800) are also allocated for
possible cash awards.

1200 Personnel Benefits............................................................................................$193,625

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

1300 Benefits for Former Personnel ................................................................................... $0



2100 Travel and Transportation of Persons ...............................................................$15,000

OIG staff will use these funds for travel ($9,000) related to scheduled IDP training and local
travel ($3,000) to professional association meetings, for example. Travel funds ($3,000) are
also included for local and/or temporary duty travel related to possible investigative matters.

2200 Transportation of Things ........................................................................................ $200

The amount is for express mail services throughout the year.

2300 Rent, Communications, Utilities, and Miscellaneous .........................................$4,080

   2351 Approved IRM Plan ............................................................................................$1,760

   2354 Approved IRM Plan .............................................................................................. $720

These funds will cover BlackBerry™ voice, data, and tethering service for the IG ($720),
telecommuters’ access expense ($1,440), and maintenance of an independent internet
account for the anonymous HOTLINE account ($320). 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 possible one-day OIG team
building exercise, and $100 for potential courier delivery services.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         17
                             Farm Credit Administration

                             Office of Inspector General

                               Fiscal Years 2010-2011


                FY 2011 PROPOSED BUDGET AND JUSTIFICATIONS

2400 Printing, Publications and Advertisement............................................................. $750

Cost of printing brochures, pamphlets, business cards, etc. when FCA cannot produce the
items.

2500 Other Contractual Services ................................................................................$91,500

Tuition funds ($6,100) from non-government sources are for staff training. Government tuition
funds ($4,100) are for staff training at the U.S. Department of Agriculture, the Federal Law
Enforcement Training Center, and other government agencies, for example. Individual
training classes are a mandatory requirement of the Yellow Book for auditors and of the bar
association for the Counsel to the IG. Membership fees ($1,300) will cover the dues for
professional organizations to which OIG staff belong.
Consulting services are utilized to assist OIG staff in the review of programs, including the
FCA financial statement audit ($40,000) and possible general contracting needs ($37,450).
Lastly, $2,550 is budgeted for the support of CIGIE.

2600 Supplies and Materials ........................................................................................... $820

    2612 Approved IRM Plan .............................................................................................. $220

To purchase miscellaneous reference books ($100) as well as on-going subscriptions in the
IRM Plan ($220). General office supply funds ($500) are also included.

3100 Equipment ............................................................................................................... $680

    3152 Approved IRM Plan .............................................................................................. $500

    3162 Approved IRM Plan .............................................................................................. $180

Purchase software as necessary to support OIG applications ($500), desktop printer as
needed ($150), and replace BlackBerry™ device ($30).

4200 Insurance Claims and Indemnities............................................................................. $0





_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         18
                       Farm Credit Administration

                       Office of Inspector General

                         F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1

                                  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 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 to be comparable in grade with the other office directors. This is staffed as a
permanent full-time position.

The Counsel to the Inspector General provides independent legal advice, analysis of
proposed legislation and regulations, and reviews OIG products for legal sufficiency. The
Counsel represents and defends OIG in all legal issues. The Counsel also participates in
inspections and evaluations as necessary. The Counsel directs the investigative function. 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. This is staffed as a permanent full-time
position.

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 also
performs the annual FISMA review. This position is currently staffed as a permanent part-time
position at 0.80 FTE.



_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         19
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. This is staffed as a permanent full-time position.

All positions in the OIG are staffed with well 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 its 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 Inspectors General
community, and the public’s awareness of the FCA OIG’s role. 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.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         20
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.


_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         21
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.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         22
                       Farm Credit Administration

                       Office of Inspec t or General

                         Fiscal Years 2010-2011

                                           AUDIT PLAN
AUDITS, INSPECTIONS, AND EVALUATIONS – FISCAL YEAR 2010 AND 2011
This audit plan identifies potential audit, inspection, and evaluation areas. This plan was
discussed with the Chairman to afford the Chairman the opportunity to comment and offer
suggestions for additional audit, inspection, and evaluation areas.
OIG audits, inspections, and evaluations provide assurance to the Chairman and FCA Board
members that programs are operating effectively with appropriate controls. Audit, inspection,
and evaluation activities will most likely be selected from the areas listed below. However,
actual audits, inspections, and evaluations conducted may vary in order to be responsive to
changing needs or circumstances.


Annual Audits and Evaluations

Audit of FCA’s Financial Statements
The OIG contracts with an independent accounting firm to conduct an audit of FCA’s financial
statement, internal control over financial reporting, and compliance with laws and regulations
relating to the determination of financial statement amounts. The OIG will deliver an audit
opinion as September 30, 2010 and 2011, respectively. The OIG has ensured that its
independent accounting firm has incorporated in its audit plan a work schedule that will provide
an appropriate audit scope and deliverables within appropriate time frames.

FISMA Evaluations
The FISMA requires agency program officials, Chief Information Officers and Inspectors
General to conduct annual reviews of the agencies’ information security program and report the
results to OMB. For 2010 and 2011, the OIG Senior IT Auditor will conduct the evaluations at
FCA.

FY 2010
Adherence to the Government in the Sunshine Act (Inspection)
The Government in the Sunshine Act is based on the policy that the public is entitled to the
fullest practicable information regarding decision making processes in the Federal Government.
The Act prescribes specific procedures agencies must follow when Board members meet. We
will assess whether the Act is being appropriately followed.

Regulation Development Process (Audit)
The Agency’s mission includes developing policy and regulations that guide 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 OIG Strategic and Operating Performance Plan FY 2010-2011                                         23
Evaluation of OE Training & Commissioning Program (Audit)
The knowledge and skill level required to conduct sound examination and effective supervision
of System 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.

FY 2011
Borrower Complaint Process (Audit)
The Office of Congressional and Public Affairs receives borrower complaints against FCS
institutions and is responsible for responding to the complaints. The OE and the Office of the
General Counsel most often are responsible for reviewing, analyzing, and recommending an
Agency response to such complaints. We will review the Agency’s process for tracking and
reviewing borrowers’ complaints and indentify whether improvements are needed.

Contractual Services (Audit)
Contractual services are the Agency’s second largest expense after salaries and benefits and
significantly increased from FY 2007 ($2,590,914 or 6.2 percent of budget) to FY 2008
($3,619,925 or 8.2 percent of budget). We will evaluate the reasons for this increased reliance
on contractors and oversight of contracted activities.

Human Capital (Audit)
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.

IT Investments Performance Measures (Inspection)
The Agency has made significant IT investments such as Live Meeting, Microsoft
Communicator and High Definition videoconferencing. As the Agency continues to invest in
technology to improve operations, measures need to be in place to ensure these investments
are being fully utilized and projected benefits realized. We will determine whether the Agency
has developed effective performance measures to capture the benefit of IT investments.


Beyond FY 2011
•	 FCA Strategic Plan
•	 Review of OE Organizational Structure and Work Processes
•	 Controls for Safeguarding Personally Identifiable Information, including Social Security
   Numbers
•	 Review of the Consolidated Reporting System
•	 General Control Review: Access Controls
•	 General Control Reviews: Software Development and Change Control


_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         24
•   General Control Reviews: System Software
•   General Control Reviews: Segregation of Duties
•   Efficiency of the OGC Legal Opinion Process
•   Telecommunication Cost and Services
•   Specialization and Certification
•   Property Plant and Equipment Review
•   Delegations




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         25
                                                                                      APPENDIX A



                       Farm Credit Administration

                       Office of Inspec t or General

                         F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1

                              MANAGEMENT CHALLENGES

BACKGROUND
The Chairman understands the necessity for independent assessments by the OIG of significant
programs of the Agency. In this regard, the OIG has identified its audit/inspection focus areas,
or audit plan, in this SOPP.

MANAGEMENT CHALLENGES
This part of the SOPP highlights major challenges confronting the Agency as it works to fulfill its
mission. The OIG is required by statute to identify these challenges and present them in the
Agency’s Performance and Accountability Report. The OIG also presents them in Semiannual
Reports to the Congress, the most recent being as of March 31, 2009. Except for external
environmental challenges, they can be effectively addressed through concerted action by
Agency management.

                                         Farm Credit System
The System is a lender to a single industry, agriculture, and is therefore vulnerable to economic
swings in that industry. Nevertheless, the FCS remains sound in all material respects. Earnings
and capital levels have continued to strengthen, and asset quality remains high. The Agency’s
challenge is to continue to ensure the System’s ability to withstand this vulnerability through
effective examination and regulatory activities. The Agency’s regulatory attention must also
address other vulnerabilities in the System. Among these are scope-of-lending excesses and
risks associated with exposure to new enterprises, such as alternative fuel production and
System institutions’ “investments in rural America.”

                                     Farm Credit Administration
There continue to be many issues facing agriculture and rural America today that raise the
question of whether there should be modifications to the Farm Credit Act to enable the System
to better serve agricultural and rural economies of the future. Despite whether the Act is
modified, the Agency should anticipate that the System will continue to seek broad regulatory
interpretations. However, as a financial regulator, FCA’s challenge is to continue to maintain an
independent and objective, yet flexible and responsive, regulatory environment for the System,
geared to continually ensuring that the FCS fulfills its public policy purpose. Key to this for FCA
is effective examination and regulation of System institutions by maintaining a properly staffed
and resourced Agency.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         26
                        The Next Possible Agricultural Economic Downturn
There are many factors in agriculture today that may indicate future serious difficulties for
agriculture and the FCS. Following are some example:
    •	 The System’s rapid growth over the past several years has eroded its capital-to-assets
       ratio.
    •	 The current high agricultural land values may not be sustainable.
    •	 The livestock sector is experiencing stress.
    •	 There is volatility in commodity prices.
    •	 Input costs, including fuel, are high.

While some sectors of agriculture are prospering and the Agency’s Office of Examination (OE)
reports that System institutions remain safe and sound, these factors have also led the OE to
state that credit deterioration is likely and risks are rising.

Thus, a major challenge for the Agency is to ensure its ongoing ability to timely assess
economic and operational conditions affecting the welfare of the System’s borrowers and thus
System institutions, and to take preemptive or remedial actions to ensure the ongoing safety
and soundness of the System. The first line of preparedness for the Agency in accomplishing
this is an effective risk assessment and examination program, including the continual
assessment of the reliability of risk evaluation and examination findings, and the sufficiency of
the Agency’s supervision and enforcement processes.

                                            Human Capital
In 2006, a five-year strategic human capital plan was completed. FCA’s challenge is to
continue to implement the human capital plan to ensure that FCA has the staff it needs to
effectively regulate a constantly evolving FCS. In meeting this challenge, the Agency should
continue to address the attrition of seasoned staff and ensure the viability of the examination
staff, a critical component of the Agency’s regulatory capability.

As the Agency moves further into the human capital plan’s five-year cycle, the Agency must
critically assess the implementation of the current plan and, as the current plan nears
completion, establish a new five-year human capital plan based on current human capital
experience and perceived future human resource needs.

                                          Strategic Planning
In December 2003, the FCA Board adopted the Strategic Plan for Fiscal Years 2004–2009. The
next Agency strategic plan was not adopted by the FCA Board until May 2008. In accordance
with the Government Performance and Results Act of 1993 and OMB Circular A-11, an updated
and revised strategic plan is required within three years of submitting a prior strategic plan.

Since adoption of the 2008-2013 strategic plan, the FCA Board has a new Chairman, and FCA
is likely to acquire two new Board members before it updates the strategic plan again. The
Agency has both the opportunity and the challenge to ensure that it updates the next strategic
plan in a timely manner so that the plan will reflect the vision of the new Board.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         27
In 2005, the FCA Board established a Strategic Planning Committee (SPC) composed of
Agency staff to facilitate FCA Board input into the plan and the planning process. The SPC
should ensure the updating and issuance by the FCA Board of the next strategic plan,
presumably dated FY 2011-2016.

                                       Leveraging Technology
Information technology (IT) is a key element in management’s efforts to continually improve
Agency performance. The Agency is in the process of a major infrastructure transition designed
to promote efficient work processes and to provide staff with enhanced communication and
collaboration tools. The challenge is to stay abreast of emerging technologies and to establish
an IT infrastructure that provides FCA staff with IT tools and skills to operate in an efficient,
effective, and secure manner. In addition, the Agency must ensure that its technical staff has
the skills and knowledge to implement and maintain its infrastructure, and initiatives in this
regard are underway.




_________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                         28
                                                                                                                          APPENDIX B

                                             Farm Credit Administration

                                             Office of Inspector General

                                               Fiscal Years 2010-2011


                                                        IRM PLAN SUMMARY
                                  Object      FY 2010        FY 2011       FY 2012       FY 2013       FY 2014       FY 2015
       IRM Budget Category                                                                                                         Total Costs
                                  Code         Costs          Costs         Costs         Costs         Costs         Costs

    Telecommunications Rentals     2351            1,760         1,760         1,760          1,760        1,760         1,760         10,560

    Wireless Communications        2354              720           720           720           720           720           720          4,320

    Supplies                       2611              180               0         180               0         180               0          540

    Subscriptions and                                                                                                                   1,320
                                   2612              220           220           220           220           220           220
    Publications

    Software                       3152              500           500           500           500           500           500          3,000

    IT Equipment                   3162              150           180           150           180           150           180            990

                                 Sub Total        $3,530        $3,380        $3,530        $3,380        $3,530        $3,380        $20,730

    Manpower Costs for three
                                    NA             7,650         7,650         5,100          4,950        4,950         4,950         35,100
    IRM Projects

                                     Total       $11,180       $11,030        $8,480        $8,330        $8,480        $8,330        $55,830




__________________________________________________________________________________________________________________________________________________
FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                                                                   29
                                                                                                    APPENDIX C
                           Farm Credit Administration

                           Office of Inspector General

                             F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


            FY 2010 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               $825,008               78%              3.59             78%

 Investigations                                          $63,462                 6%              .28              6%

 Legislation and Regulations Review                      $21,154                 2%              .09              2%

 Outreach                                               $148,079               14%               .64             14%
                                           Total      $1,057,703              100%              4.60           100%

Audits, Inspections, and Review Products—The OIG issues approximately 5-10 reports per
year (including the annual FCA financial audit and FISMA review).               This includes
recommendations to Agency officials regarding improving the efficiency of Agency programs and
mission achievement. It also includes four survey reports regarding System institutions’ ratings
and comments about the Agency’s examination function.
Budget for FY 2010—$825,008 ..................................................................................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 2010—$63,462 ................................................................................... 0.28 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 2010—$21,154 ................................................................................... 0.09 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 and the OIG community. This includes but is not limited to: the Semiannual Report to
the Congress, participation in external activities such as membership on CIGIE and the CCIG,
and instructing at FLETC and various public and Government forums. We also participate in
Agency efforts, such as the Employee’s Council, Administrative Workgroup, and Continuity of
Operations Plan.
Budget for FY 2010—$148,079 ..................................................................................0.64 FTE


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FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           30
                                                                                                   APPENDIX C

                           Farm Credit Administration

                           Office of Inspector General

                             F i s c a l Y e a r s 2 0 1 0 - 2 0 1 1


          FY 2011 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               $829,284               78%              3.59            78%
 Investigations                                           $63,791               6%               .28              6%
 Legislation and Regulations Review                       $21,264               2%               .09              2%
 Outreach                                               $148,846               14%               .64            14%
                                            Total     $1,063,185             100%               4.60           100%

Audits, Inspections, and Review Products—The OIG issues approximately 5-10 reports per
year (including the annual FCA financial audit and FISMA review).               This includes
recommendations to Agency officials regarding improving the efficiency of Agency programs and
mission achievement. It also includes four survey reports regarding System institutions’ ratings
and comments about the Agency’s examination function.
Budget for FY 2011—$829,284 ..................................................................................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 2011—$63,791 ................................................................................... 0.28 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 2011—$21,264 ................................................................................... 0.09 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 and the OIG community. This includes but is not limited to: the Semiannual Report to
the Congress, participation in external activities such as membership on CIGIE and the CCIG,
and instructing at FLETC and various public and Government forums. We also participate in
Agency efforts, such as the Employee’s Council, Administrative Workgroup, and Continuity of
Operations Plan.
Budget for FY 2011—$148,846 ..................................................................................0.64 FTE

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FCA OIG Strategic and Operating Performance Plan FY 2010-2011                                           31