oversight

Sept. 2002

Published by the Farm Credit Administration, Office of Inspector General on 2002-09-01.

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

October 30, 2002




The Honorable Michael M. Reyna
Chairman of the Board and
 Chief Executive Officer
Farm Credit Administration
McLean, Virginia 22102

Dear Mr. Reyna:

Enclosed is the semiannual report on the activities of the Farm Credit Administration’s (FCA or
Agency) Office of Inspector General (OIG) for the period from April 1, 2002 through
September 30, 2002. We are filing this report in accordance with the Inspector General Act of
1978, as amended (Act). This is the twenty-seventh report since creation of the office on
January 22, 1989. Section 5(b) of the Act requires that you send this report to the appropriate
Congressional committees and subcommittees within 30 days after the date of this transmittal,
with management’s report on the status of audit recommendations.

Under your leadership, the process of monthly briefings by the Audit Follow-up Official to the
FCA Board has been beneficial. Management has made large strides to strengthen Agency
programs and processes by taking action to implement OIG agreed upon actions.

Respectfully,



Stephen G. Smith
Inspector General



Enclosure
                                                                FCA SEMIANNUAL REPORT TO CONGRESS
                                                                     APRIL 1, 2002 – SEPTEMBER 30, 2002



                                         CONTENTS

REPORTING REQUIREMENTS ______________________________________________________________ ii
EXECUTIVE SUMMARY ____________________________________________________________________ 0
BACKGROUND ____________________________________________________________________________ 1
MANAGEMENT CHALLENGES _____________________________________________________________ 1
 FARM CREDIT SYSTEM RISK _________________________________________________________________ 1
 ORGANIZATIONAL LEADERSHIP _______________________________________________________________ 1
 STRATEGIC PLANNING ______________________________________________________________________ 2
 HUMAN CAPITAL___________________________________________________________________________ 2
 FINANCIAL MANAGEMENT ___________________________________________________________________ 2
 SECURITY ________________________________________________________________________________ 2
 LEVERAGING TECHNOLOGY__________________________________________________________________ 3
AUDIT AND INSPECTION REPORTS ISSUED _________________________________________________ 3
 FCA CONTRACTING ACTIVITY _______________________________________________________________ 3
 LEAVE BANK PROGRAM _____________________________________________________________________ 4
 PURCHASE CARD INSPECTION ________________________________________________________________ 4
 BAR REVIEW ______________________________________________________________________________ 4
 GISRA REVIEW ___________________________________________________________________________ 4
STATUS OF UNIMPLEMENTED AGREED UPON ACTIONS ____________________________________ 4
 AUDITS___________________________________________________________________________________ 5
 INSPECTIONS ______________________________________________________________________________ 6
 INVESTIGATIONS ___________________________________________________________________________ 6
 LEGISLATION AND REGULATIONS _____________________________________________________________ 6
 OTHER ACTIVITIES _________________________________________________________________________ 7
  MANAGEMENT ADVISORIES _________________________________________________________________ 7
  FARM CREDIT SYSTEM INSURANCE CORPORATION _______________________________________________ 7
  SURVEY OF FARM CREDIT SYSTEM INSTITUTIONS ________________________________________________ 7
  OIG PERFORMANCE MEASURES ______________________________________________________________ 8
  STAFF PARTICIPATION IN ACTIVITIES OF THE PROFESSIONAL COMMUNITY _____________________________ 8
  STAFF PARTICIPATION IN AGENCY ORGANIZATIONS ______________________________________________ 8
 AUDIT / INSPECTION REPORTS ISSUED BY FCA OIG ______________________________________________ 9
 INSPECTOR GENERAL ISSUED REPORTS WITH QUESTIONED COSTS _________________________________ 10
 INSPECTOR GENERAL ISSUED REPORTS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE __ 11
 FARM CREDIT ADMINISTRATION ORGANIZATION CHART _________________________________________ 12
 FCA OFFICE OF INSPECTOR GENERAL ORGANIZATION CHART ____________________________________ 13




                                                     i
                                                                                                      FCA SEMIANNUAL REPORT TO CONGRESS
                                                                                                           APRIL 1, 2002 – SEPTEMBER 30, 2002




  REPORTING REQUIREMENTS

INSPECTOR GENERAL ACT CITATION AND REQUIREMENT                                                                              PAGE

Section 4(a)(2) Review of Legislation and Regulations ......................................................................... 6

Section 5(a)(1) Significant Problems, Abuses and Deficiencies........................................................ none

Section 5(a)(2) Recommendations With Respect to Significant ........................................................ none
     Problems, Abuses and Deficiencies

Section 5(a)(3) Prior Recommendations Not Yet Implemented...........................................................4-5

Section 5(a)(4) Matters Referred to Prosecutive Authorities .............................................................. none

Section 5(a)(5) Summary of Instances Where Information ............................................................... none
     and 6(b)(2) Was Unreasonably Refused or Not Provided

Section 5(a)(6) List of OIG Audit/Inspection Reports............................................................................3-4

Section 5(a)(7) Summary of Each Particularly Significant Report........................................................3-4

Section 5(a)(8) Statistical Table on Management Decisions................................................................ 10
     on Questioned Costs

Section 5(a)(9) Statistical Table on Management Decisions on........................................................... 11
     Recommendations that Funds be Put to Better Use

Section 5(a)(10) Summary of Each Audit Over Six Months Old for .................................................. none
     Which No Management Decision Has Been Made

Section 5(a)(11) Significant Revised Management Decisions ........................................................... none

Section 5(a)(12) Significant Management Decisions With Which ..................................................... none
     the Inspector General Disagrees

Section 5(a)(13) Compliance of Agency Financial Management System ............................................ 2




                                                                                     ii
EXECUTIVE SUMMARY

     This semiannual report to the Congress summarizes the activities and accomplishments of
     the Farm Credit Administration (FCA or Agency), Office of Inspector General (OIG) and
     covers the period April 1, 2002 through September 30, 2002. Our efforts were directed
     toward performing audits, inspections, and evaluations of the FCA programs and operations;
     conducting several investigations; and providing technical assistance and advice on FCA
     programs.

     During the reporting period, the FCA Board returned to full strength. Moreover, the Board
     members are engaged in healthy discussions about regulatory and enforcement issues facing
     the FCA. The Board members are laying the foundation for a collegial relationship that is vital
     to the organization. We believe that prior work that we performed on governance will serve as
     a building block for a strong Board.

     Under the Chairman’s leadership, the FCA has made significant strides towards resolving
     agreed upon management actions. The focus on progress towards resolving agreed upon
     actions and recommendations at monthly Board briefings has resulted in corrective action on
     several long-standing issues and quick resolution of new agreed upon actions.

     For example, FCA continues in its strides to develop performance budgeting at the Agency.
     FCA now has the mechanisms in place to tie resources to Agency products, services, and
     projects. Additionally, management resolved five of six agreed upon actions within three
     weeks of a report issuance.

     In the investigative area, we substantiated allegations of misuse of Government purchase
     cards and travel cards in three investigations. The OIG recommended additional controls to
     prevent future incidents.

     The OIG advised managers on multiple issues that came to our attention. This advice
     encourages managers to take proactive actions. For example, we contributed to the FCA
     efforts to recruit and retain the high quality employees by identifying attractive features of
     working at FCA as well as identifying the need for Agency policy on professional
     memberships and accreditation. We also contributed to improved efficiency and controls.
     For example, we suggested the need for an OIG function at the FCA sister organization – the
     Farm Credit System Insurance Corporation.
                                                                FCA SEMIANNUAL REPORT TO CONGRESS
                                                                     APRIL 1, 2002 – SEPTEMBER 30, 2002




 BACKGROUND

         The FCA is an independent Federal agency of the United States government responsible
         for the regulation, examination and supervision of institutions chartered under the Farm
         Credit Act of 1971, as amended. FCA is a nonappropriated agency with a fiscal year (FY)
         2002 budget of $38,033,000 for administrative costs. The FY 2002 budget for the Office
         of Inspector General (OIG) was $829,601. FCA is a “designated Federal entity” within the
         meaning of the Inspector General Act of 1978, as amended.

         FCA currently has 273 employees, about half of which are examiners located at five field
         offices. Also included in the Agency positions are five approved positions for the OIG.
         Appendix II displays the current organizational structure of FCA and Appendix III displays
         the OIG within that structure.


 MANAGEMENT CHALLENGES

         This section of the report outlines major challenges confronting the Farm Credit
         Administration as it works to fulfill its mission. These challenges fall into two general
         categories. First are the challenges related to the FCA’s core mission of ensuring a
         dependable supply of credit to agriculture through the institutions it has chartered. These
         challenges are often shaped and influenced by events that are outside the control of the
         Agency. Second, but no less important, are those challenges related to the Agency’s
         operations. These management challenges were incorporated in the previous semiannual
         report but have been updated to reflect changes and progress in meeting the challenges.

Farm Credit System Risk

         The Farm Credit System (FCS) is a single industry lender and therefore is vulnerable to
         economic swings in the industry. The FCA is challenged to balance the often-competing
         demands of ensuring the FCS fulfills it public purpose, proactively examining risk in the
         regulated institutions both individually and systemically, and controlling the cost of the
         regulator.

Organizational Leadership

         The Farm Credit Act provides for a full time three-member Board of Directors. The Board
         members are appointed by the President and confirmed by the Senate. The rapidly
         changing complex financial and banking environment makes the Board’s task both
         challenging and important. The Board must be able to engage in professional policy
         debate and set a sound course for the Agency.

         The Board is in an important period of transition. On August 6, 2002, the Board returned
         to full strength ending a 19-month period with only two Board members. The President
         has nominated another person to replace the current Board member whose term expired.
         The return to a full strength Board is an important element in setting clear priorities and
         deliberating fully on the issues.

         A relatively small full-time Board also presents a challenge in terms of defining the roles
         and responsibilities of the Board members relative to the governance of the Agency. As

                                                     1
                                                                    FCA SEMIANNUAL REPORT TO CONGRESS
                                                                         APRIL 1, 2002 – SEPTEMBER 30, 2002

           the membership on the Board changes, it needs to update its rules of operation to ensure
           it fulfills its statutory role in the governance of FCA.

Strategic Planning

           The FCA Strategic Plan was updated and revised in Fiscal Year (FY) 2000 to reflect the
           FCA Board’s priorities at that time. The current FCA Strategic Plan reflects an
           environment that has changed significantly since it was adopted – the composition of the
           Board, the economy, the structure of the FCS, and the President’s Management Agenda.
           The FCA Board’s challenge is to take a fresh look at the substance of FCA’s mission,
           goals and objectives. The Board will have the opportunity to set a course for FCA that
           focuses on the results that it wants to achieve through clear and balanced performance
           measures. The change in the Board’s composition will allow the new Board to develop a
           new perspective that is not unduly constrained by past practices but builds on the
           experience of prior Boards.

Human Capital

           The President identified human capital as a critically needed management reform in the
           Federal government. FCA needs to develop a comprehensive, integrated approach to
           human capital issues. In light of the changes in the competitive environment, advances in
           technology, and the tenure of its workforce; the Agency will be challenged to closely
           evaluate business processes, their associated costs, and alternatives available through
           competitive sourcing. The General Accounting Office’s (GAO) High-Risk1 report outlined
           four pervasive human capital challenges that the government faces:

                  •   Planning strategic human capital and organizational alignment;
                  •   Planning for succession and leadership continuity;
                  •   Acquiring and developing staffs whose size, skills, and deployment meet agency
                      needs; and
                  •   Creating results-oriented performance cultures.

Financial Management

           Last year, FCA successfully implemented a new financial management system using the
           services of the Department of Interior’s National Business Center. FCA received an
           unqualified audit opinion. However, financial management success goes beyond an
           unqualified financial statement audit opinion. Management’s challenge is to leverage the
           system to deliver timely financial information that is critical for making well-informed
           management decisions. Meeting this challenge requires new measures of success.
           Measures such as delivering financial information that managers can use for day-to-day
           operations; and developing reports that capture the full cost of programs and projects can
           help bring about a transition.

Security

           In the recent report on information security, the OIG found a strong foundation for security
           practices. However, the speed of change in the security environment will be a challenge
           for all government organizations. This is especially true for smaller organizations like FCA
           1
               GAO-01-263


                                                         2
                                                                 FCA SEMIANNUAL REPORT TO CONGRESS
                                                                      APRIL 1, 2002 – SEPTEMBER 30, 2002

         where an increased emphasis on physical and information security will compete with
         program areas for tight budget funding and therefore, security remains a major challenge
         for the Agency.

Leveraging Technology

         The Agency has recognized that in order to meet the constraints of its budget, it must be
         able to maximize its return on investment in technology. FCA will need effective
         mechanisms to ensure that current and future staff has the technical skills to use
         technology to operate in an efficient manner.


 AUDIT AND INSPECTION REPORTS ISSUED

         We issued an audit report and three inspection reports during the reporting period. In
         addition, we completed a “Government Information Security Act Review.” We conduct all
         audits in accordance with the standards established by the Comptroller General of the
         United States for audits of Federal organizations, programs, activities, and functions.
         Inspections are in accordance with the President’s Council on Integrity and Efficiency’s
         Quality Standards for Inspections. Copies of OIG reports are available on FCA’s Web site
         (www.fca.gov/oig), by contacting the OIG on 703/883-4030, or by e-mail at
         IG_information@fca.gov.

FCA Contracting Activity

         The OIG completed an audit on the FCA contracting activity. The objectives of the audit
         were to determine if FCA’s contracting environment and process being used provide
         adequate controls and safeguards to prevent fraud, waste and abuse. The audit was also
         a follow-up on a procurement management letter issued July 24, 2001. We found that
         many of the procurement actions resulted in cost efficient purchases of goods and
         services. However, we found problems with 41 percent of the procurement actions
         reviewed. Many of the problems identified are attributed to procurement staff’s inattention
         to contract management responsibilities. Specifically, inadequate acquisition planning,
         unauthorized commitments and lax procurement oversight have made the Agency
         vulnerable to waste and abuse. Management agreed to recommendations to promote
         competition, validate needs, review contract files, track contractor costs, update policy and
         procedures, and review procurement office staffing.

         Management did not agree with two recommendations. The OIG recommended
         discontinuing a car lease that was not adequately utilized and cost FCA $7.69 per mile.
         Management rejected the recommendation but agreed to perform a cost-benefit analysis
         to determine whether the car lease is needed. The OIG made another recommendation
         to either obtain the Chief Executive Officer’s approval for an exception to the Federal
         Acquisition Regulation on a personal service contract or terminate the contract
         immediately. Management rejected this recommendation and amended the contract for
         an additional two months. The General Counsel issued a legal opinion that this was not a
         personal service contract and management stated the contract will not be amended again.
         The Inspector General believes the recommendations remain appropriate but
         management is taking alternative actions.




                                                      3
                                                               FCA SEMIANNUAL REPORT TO CONGRESS
                                                                    APRIL 1, 2002 – SEPTEMBER 30, 2002


Leave Bank Program

         The OIG conducted an inspection of the Agency’s leave bank program to determine
         whether the program is administered according to internal guidelines. We found the
         administration of the leave bank program is sound and the program has accomplished its
         purpose of reducing the financial impact of medical emergencies on employees. We also
         determined the value of the leave bank balance is properly reflected in the Agency’s
         financial records. There were no findings that required formal action or follow up.

Purchase Card Inspection

         We completed an inspection of how effectively government purchase cards are used in
         the Agency. Generally, management and staff are effectively and efficiently administering
         the program. Cardholders are making appropriate use of the program to acquire goods
         and services for their offices. The Agency agreed to six actions to improve the purchase
         card system including educating cardholders, performing internal reviews, and improving
         standard procedures. These actions will improve internal controls over the program.

Bar Review

         We reviewed the bar status of FCA attorneys to determine if they are licensed to practice
         law. FCA and the Office of Personnel Management require personnel in the 0905
         classification series be licensed as an attorney and a member in good standing of the bar
         in a state, territory of the United States, District of Columbia, or the Commonwealth of
         Puerto Rico. Our review determined FCA attorneys are members in good standing of a
         state bar. However, FCA did not have a process in place to document and periodically
         verify bar status of each attorney. Management agreed to require documentation of bar
         membership before an offer of employment and to conduct a periodic review to verify bar
         status.

GISRA Review

         OIG engaged the independent audit firm, Clifton Gunderson LLP, to conduct a review of
         the information security in accordance with procedures essential for establishing
         compliance with the Government Information Security Reform Act (GISRA). The Federal
         Financial System, Consolidated Reporting System, Lotus Notes, Windows NT, Firewall
         System and the FCA Web site were reviewed as mission critical systems. This was the
         second consecutive year where the evaluators found no security issues concerning the
         Agency-wide security program.


 STATUS OF UNIMPLEMENTED AGREED UPON ACTIONS


         At the beginning of the period there were 16 unimplemented agreed upon actions. During
         the reporting period, management took final action on 9 of these. During this period, we
         issued reports containing 15 agreed upon actions and 2 recommendations. Management
         took action on 12 agreed upon actions and rejected the 2 recommendations. At the end of
         this reporting period, 10 agreed upon actions remain open.




                                                    4
                                                                    FCA SEMIANNUAL REPORT TO CONGRESS
                                                                         APRIL 1, 2002 – SEPTEMBER 30, 2002


Audits

             The following table summarizes the final actions management took on open agreed upon
             actions. One new audit report was issued concerning FCA contracting activity containing
             eight agreed upon actions and two recommendations.




                                                 AUDIT AGREED UPON ACTIONS

                                                                               Final
                                                          Open during
                                                                           Management             Open on
                              Audit Report                this 6-month
                                                                          Actions during         10/01/2002
                                                             period
                                                                            this period
Performance Budgeting
………Issued March 23, 2001                                       10                 6                   4
Office of Chief Financial Officer
………Issued January 24, 2002                                     4                  1                   3
FCA Contracting Activity
………Issued August 27, 2002                                      8                  6                   2

             Totals                                            22                13                   9




             The audit report of Performance Budgeting was issued more than 18 months ago. Four of
             the original 14 agreed upon actions remain open. The management actions taken during
             this period has now enabled the Agency to be able to track its resource usage by
             individual projects, products and services, as well as by organizational unit and object
             class. Once the Agency takes actions on the remaining 4 agreed upon actions, FCA
             should be capable of continuously monitoring its performance achievement against the
             related costs.




                                                  AUDIT RECOMMENDATIONS

                                                                               Final
                                                          Open during
                                                                           Management             Open on
                              Audit Report                this 6-month
                                                                          Actions during         10/01/2002
                                                             period
                                                                            this period
FCA Contracting Activity
………Issued August 27, 2002                                      2                 22                   0

             Totals                                            2                  2                   0




             2
                 Both recommendations rejected


                                                           5
                                                                     FCA SEMIANNUAL REPORT TO CONGRESS
                                                                          APRIL 1, 2002 – SEPTEMBER 30, 2002


Inspections

             The following table summarizes the final actions management took on open agreed upon
             actions. Three new inspection reports were issued containing seven agreed upon actions.

                                         INSPECTION AGREED UPON ACTIONS

                                                                                Final
                                                        Open during
                                                                            Management             Open on
                 Inspection Report                      this 6-month
                                                                           Actions during         10/01/2002
                                                           period
                                                                             this period
Personnel Security Program
..............Issued December 20, 2001                         2                   2                   0
Leave Bank Program
..............Issued April 10, 2002                            0                   0                   0
Bar Review of FCA attorneys
..............Issued April 22, 2002                            1                   1                   0
Purchase Card Program
..............Issued September 9, 2002                         6                   5                   1

             Totals                                            9                   8                   1


             Management closed the remaining two agreed upon actions on the Personnel Security
             Program inspection and the one agreed upon action on the Bar Review during this
             semiannual reporting period. Management also took prompt action and closed five of six
             agreed upon actions on the Purchase Card Program Inspection.

Investigations

             Most OIG Hotline calls and emails dealt with FCS borrower complaints and were referred
             to the FCA office responsible for researching such matters. All other Hotline calls and
             emails did not require investigative work by this office and were referred to the appropriate
             FCA office or other Federal agency.

             There was one open investigation at the beginning of this reporting period. This
             investigation was not substantiated and was closed during this period. Four new
             investigations were opened this period, with one being closed unsubstantiated. The other
             three investigations substantiated allegations of misuse of government purchase cards
             and travel cards.

Legislation And Regulations

             OIG staff reviewed several FCA regulations in both proposed and final form. Statutory
             and regulatory compliance issues were reviewed as they arose in audits, inspections and
             investigations. Also, we reviewed and commented on proposed legislation affecting the
             Inspectors General community through the legislation committee of the President’s
             Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency
             (PCIE/ECIE).

             During this period, OIG reviewed S. 2530 concerning law enforcement authority for
             Inspectors General. H.R. 4561, concerning privacy issues was reviewed as well as H.R.


                                                          6
                                                                 FCA SEMIANNUAL REPORT TO CONGRESS
                                                                      APRIL 1, 2002 – SEPTEMBER 30, 2002

          4685, Accountability of Tax Dollars Act of 2002, requiring audited financial statements for
          executive agencies not otherwise covered under the Chief Financial Officer Act. We also
          were actively involved in commenting on a GAO audit on consolidation of Inspectors
          General.

Other Activities

          Management Advisories

          During this reporting period, the OIG has continued the use of management advisories.
          These advisories provide management with feedback on issues that came to our attention
          during the process of performing other OIG work. In this 6-month period, we advised
          Agency managers on issues including supervisory practices in an office, credit card
          issuance and monitoring processes, Office of Management and Budget Bulletin 02-05,
          travel policies, security practices, and use of copyright material.

          Farm Credit System Insurance Corporation

          The Farm Credit System Insurance Corporation (FCSIC or Corporation) has assets
          exceeding $1.7 billion. The mission of FCSIC is closely tied to the mission of FCA. The
          Farm Credit Act (Act) (12 USC 2277a-8) recognizes the interrelationship between FCA
          and FCSIC by establishing a common board structure. The Act also states “To the extent
          practicable, the Corporation shall use the personnel and resources of the Farm Credit
          Administration to minimize duplication of effort and to reduce costs.”

          The Inspector General advised the FCSIC Board that there is no explicit authority
          providing the FCA Inspector General the authority to examine FCSIC activities without
          FCSIC’s permission. However, the legislative history of the Inspector General Act
          indicates that Federal entities, such as FCSIC, may obtain the needed level of internal
          audit from an appropriate authority such as an existing OIG. The Inspector General
          believes it is in the FCSIC Board’s best interest to have an appropriate level of
          independent audit oversight that the OIG can provide.

          Survey of Farm Credit System Institutions

          OIG administers an ongoing Agency survey of the regulated institutions of the FCS. This
          survey is designed to provide the FCA Board and senior management with independent
          feedback about how well FCA performs its examination and enforcement activities. The
          feedback is based on confidential responses received from FCS institutions. We surveyed
          the Chairman of the Board and the Chief Executive Officer of each FCS institution,
          following their receipt of FCA’s report of examination, for their voluntary feedback on the
          quality and consistency of the examination and enforcement processes. OIG reports the
          results of the survey annually. During this 6-month semiannual period we mailed
          46 surveys and received 34 responses, which equates to a 74 percent response rate.
          Overall, the average rating for the questions answered during this reporting period was
          slightly less favorable (1.66) [1=completely agree; 5=completely disagree] than the prior
          semiannual reporting period (1.38). The overall response rate for FY 2002 was slightly
          more favorable (1.51) than the overall response rate for FY 2001 (1.61).




                                                      7
                                                      FCA SEMIANNUAL REPORT TO CONGRESS
                                                           APRIL 1, 2002 – SEPTEMBER 30, 2002

OIG Performance Measures

OIG’s performance measures were developed in 1995. Each year we issue a report on
our performance. It is available on the FCA OIG Web page at www.fca.gov/OIG.

Staff Participation in Activities of the Professional Community

OIG staff members are encouraged to take part in organizations that contribute to the
mission of the Inspector General community, as well as their individual professional
development. Most staff is actively involved in one or more professional organizations as
well as ad hoc activities of the PCIE/ECIE.

Staff Participation in Agency Organizations

Staff is active on several Agency workgroups and task forces. During this reporting period
the OIG was represented on Blacks in Government, FCA Employees’ Council,
Administrative Burden Reduction Workgroup, the Federal Women’s Program, the
Continuity of Operations Plan task force, the Budget and Planning task force and the
Employee Pay Workgroup.




                                            8
                                                       FCA SEMIANNUAL REPORT TO CONGRESS
                                                            APRIL 1, 2002 – SEPTEMBER 30, 2002




                                                                               APPENDIX I




Audit / Inspection Reports Issued By FCA OIG




                                  NUMBER OF                                 RECOMMENDATIONS
                               RECOMMENDATIONS/                            THAT FUNDS BE PUT TO
      TITLE OF REPORT         AGREED UPON ACTIONS   QUESTIONED COSTS           BETTER USE


   FCA Contracting Activity           10                  $0                          $0


         Bar Review                   1                   $0                          $0


   Purchase Card Activity             6                   $0                          $0


            Total                     17                  $0                          $0




                                                9
                                            FCA SEMIANNUAL REPORT TO CONGRESS
                                              APRIL 1, 2002 – SEPTEMBER 30, 2002




                                                                                          APPENDIX Ia




INSPECTOR GENERAL ISSUED REPORTS WITH QUESTIONED COSTS



                                                            Number                      Dollar Value

                                                                            Questioned Costs     Unsupported
                                                     Reports        Recs.                           Costs

A.   For which no management decision
     has been made by the commencement                 0             0             $0                  $0
     of the reporting period


B.   Which were issued during the                       0            0             $0                  $0
     reporting period

                                                        0            0             $0                  $0
Subtotals (A+B)


C.   For which a management decision was                0            0             $0                  $0
     made during the reporting period


     (i) dollar value of disallowed costs               0            0             $0                  $0


     (ii) dollar value of costs not disallowed          0            0             $0                  $0


D.   For which no management decision
     has been made by the end of the                    0            0             $0                  $0
     reporting period


E.   For which no management decision
     was made within six months of                      0            0             $0                  $0
     issuance




                                                               10
                                        FCA SEMIANNUAL REPORT TO CONGRESS
                                          APRIL 1, 2002 – SEPTEMBER 30, 2002




                                                                                          APPENDIX Ib

INSPECTOR GENERAL ISSUED REPORTS WITH
RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE



                                                                         Number


                                                               Reports            Recs.         Dollar Value

A. For which no management decision has been
   made by the commencement of the reporting                     0                 0                $0
   period


B. Which were issued during the reporting period                 0                 0                $0


Subtotals (A + B)                                                0                 0                $0


C. For which a management decision was made
                                                                 0                 0                $0
   during the reporting period


    (i) dollar value of recommendations            that
                                                                 0                 0                $0
        were agreed to by management


        --based on proposed management
                                                                 0                 0                $0
          action


        -- based on proposed legislative action                  0                 0                $0


    (ii) dollar value of recommendations           that
                                                                 0                 0                $0
         were not agreed to by management


D. For which no management decision has been
                                                                 0                 0                $0
   made by the end of the reporting period


E. For which no management decision was made
                                                                 0                  0               $0
   within six months of issuance




                                                          11
                                                                              APPENDIX II
                                                     FCA SEMIANNUAL REPORT TO CONGRESS



Farm Credit Administration Organization Chart




                                                12
                                                                                  APPENDIX III
                                                          FCA SEMIANNUAL REPORT TO CONGRESS



FCA Office of Inspector General Organization Chart




                                                     13