oversight

Training and Conference Expenses

Published by the Farm Credit Administration, Office of Inspector General on 2014-09-22.

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

OFFICE OF              Audit Report
INSPECTOR GENERAL
                                         Audit of FCA’s
                     Training and Conference Expenses



                                   September 22, 2014

                              A-14-01

                            Tammy Rapp
                          Auditor-in-Charge




                    FARM CREDIT ADMINISTRATION
Memorandum	                                                                 Office of Inspector General
                                                                            1501 Farm Credit Drive
                                                                            McLean, Virginia 22102-5090




September 22, 2014 
             
             
The Honorable Jill Long Thompson, Board Chair   
The Honorable Kenneth A. Spearman, Board Member 
The Honorable Leland A. Strom, Board Member 
Farm Credit Administration 
1501 Farm Credit Drive 
McLean, Virginia  22102‐5090 
 
Dear Board Chair Long Thompson and FCA Board Members Spearman and Strom: 
           
The Office of the Inspector General completed an audit of FCA’s Training and Conference Expenses.  
The objectives of this audit were to determine the effectiveness of controls related to training, 
conferences, and related travel expenses. 

The results of our evaluation revealed FCA has effective controls over training and conference 
expenses. However, the Office of Management Services agreed to improve the Training Program in 
the following areas: 
 
    1.	 Update policies and procedures governing training and conference expenses 
    2.	 Strengthen controls over the Training Program to ensure compliance with agency 
         policies and procedures. 

We  appreciate  the  courtesies  and  professionalism  extended  to  OIG  staff  by  FCA  personnel.   If  you 
have any questions about this audit, I would be pleased to meet with you at your convenience. 

Respectfully,


Elizabeth M. Dean
 
Inspector General
 
 
Enclosure 
Farm Credit Administration
Office of Inspector General
                              September 22, 2014
Executive Summary………………………………………………………………………………………………………                                                3

Introduction and Background …………………………………………………………………………………………                                          4

Objectives, Scope, and Methodology .………………………………………………………………………………                                      5

Training Program - Facts and Findings:

   1.    Key Laws and Regulations - Training………………………………………………………………………………… 9

   2.    FCA Policies – Training Program……………………………………………………………………………………… 10

   3.    Training and Conference Expenses…………………………………………………………………………………… 12

   4.    IDP Process and Budgeting……………………………………………………………………………………………… 15

   5.    Comparison of IDP, Training Budget, and Actual Training Expenses ………………………………………… 16

   6.    Training Budget…………………………………………………………………………………………………………… 17

   7.    Training Expenses – Top 5 Vendors…………………………………………………………………………………… 19

   8.    Employees with Training over $8,000………………………………………………………………………………… 20

   9.    Payments for Training over $5,000…………………………………………………………………………………… 23

   10.   Internal Reporting……………………………………………………………………………………………………………24
Conferences – Facts and Findings:
   1. Key Laws & Regulations – Conferences………………………………………………………………………………… 26

   2. FCA Sponsored Conferences ……………………………………………………………………………………………… 27

Related Travel Expenses………………………………………………………………………………………………… 29

Agreed-upon Actions …………………………………………………………………………………………………… 30





                                                        Farm Credit Administration Office of Inspector General
                                                    Report #A-14-01 FCA’s Training and Conference Expenses       2
FCA’s mission as a financial regulator is to ensure a safe, sound, and dependable source of
credit and related services for agriculture and rural America. FCA provides training
opportunities to its employees to enhance the performance of their official duties. In fiscal
year 2013, FCA reported training and conference expenses of $554,927 for its 294
employees.

FCA has effective controls over training and conference expenses.

Our audit of FCA’s Training Program revealed:
   Policies and procedures issued are consistent with laws and regulations
   FCA has multiple sources of training data
   Actual expenses were significantly less than budgeted in FY 2010, 2011, and 2013
   Actual expenses exceeded budget by approximately $12,000 in FY 2012
   Training was consistent with job responsibilities and FCA’s mission
   Most training was approved by 1st level supervisor and Training Officer on electronic Course
    Registration forms
   FCA minimized expenses associated with agency sponsored conferences and training

However, the Office of Management Services agreed to improve the Training Program in the
following areas:
   Update policies and procedures governing training and conferences
   Strengthen controls over the Training Program to ensure compliance with agency policies and
    procedures



                                                             Farm Credit Administration Office of Inspector General
                                                         Report #A-14-01 FCA’s Training and Conference Expenses       3
FCA’s mission as a financial regulator is to ensure a safe, sound, and dependable
source of credit and related services for agriculture and rural America.

“FCA encourages the self-improvement and development of all FCA employees by
sponsoring training and development opportunities to enhance the performance of
their official duties and develop knowledge, skills, and abilities (KSAs) that will
enable them to successfully perform present or future responsibilities.” (Policies and
Procedures Manual (PPM) 843)

FCA offers its employees a variety of training opportunities that include:
 Examiner Commissioning Program
    ◦	   A multi-year program providing abilities, knowledge, and skills to plan and participate in safety
         and soundness examinations of FCS institutions
   External conferences
   Seminars
   Higher education courses
   Agency-wide training events
    ◦	   i.e. Retirement Planning, Leadership training




                                                               Farm Credit Administration Office of Inspector General
                                                           Report #A-14-01 FCA’s Training and Conference Expenses       4
Objective:
   Determine the effectiveness of controls related to training, conferences, and related
    travel expenses.


Scope and Methodology:
   Training and conference expenses
    ◦	   FY 2010 – FY 2013
    ◦	   Top 5 vendors with largest expenses paid by FCA (FY 2012, 2013)
    ◦	   Employee tuition exceeding $8,000 per year (FY 2012, 2013)
    ◦	   Individual training courses exceeding $5,000 (FY 2012, 2013)
    ◦	   Did not review Examiner Commissioning Program
   Limited review of related travel for training and conferences
    ◦	   Top 10 employees with greatest amount spent on travel to training or conferences




                                                                      Farm Credit Administration Office of Inspector General
                                                                  Report #A-14-01 FCA’s Training and Conference Expenses       5
   Performed the following procedures:
    ◦	 Identified and reviewed related laws, regulations, and Agency policies and procedures
    ◦	 Conducted interviews with current Chief Human Capital Officer (CHCO)/Chief Financial Officer
       (CFO)/Director Office of Management Services (OMS), Deputy CFO, Training Officer, and other key
       staff
    ◦	 Obtained broad overview of Individual Development Plans (IDP) process and training budget
       development
    ◦	 Obtained understanding of agency-wide training offered in FY 2012 and 2013
    ◦	 Identified training and conference expenses
    ◦	 Reviewed databases supporting training data
    ◦	 Identified and reviewed data for the top 5 vendors paid by FCA for training in FY 2012 and FY 2013
    ◦	 Identified employees with course registrations (completed course) over $8,000 in FY 2012 and FY
       2013
    ◦	 Identified payments for external training over $5,000 in FY 2012 and FY 2013
    ◦	 Examined documentation supporting training for compliance with applicable policies and 

       procedures

    ◦	 Identified travel expenses related to training and conferences
    ◦	 Identified and performed limited review of related travel vouchers for top 10 employees with
       greatest amount of travel expenses
    ◦	 Identified significant internal control processes and determined if they were operating effectively




                                                             Farm Credit Administration Office of Inspector General
                                                         Report #A-14-01 FCA’s Training and Conference Expenses       6
We conducted this performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We
believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our
audit objectives.


Management is responsible for developing and maintaining effective internal controls. We reviewed
internal controls identified as significant to the audit objectives. Additionally, we assessed the reliability of
computer processed data relevant to our audit objective and determined the data was sufficiently reliable
for purposes of this audit. Internal control weaknesses identified and respective recommendations are
presented in this report.


This audit was performed at the FCA Headquarters in McLean, Virginia, from March through July 2014. At
the conclusion of this audit, we provided management with a draft report of our observations and held an
exit conference on August 28, 2014.




                                                                Farm Credit Administration Office of Inspector General
                                                            Report #A-14-01 FCA’s Training and Conference Expenses       7
TRAINING PROGRAM -
 FACTS & FINDINGS




             Farm Credit Administration Office of Inspector General
         Report #A-14-01 FCA’s Training and Conference Expenses       8
   5 United States Code (U.S.C.) § 4101(4)
   Definition of Training:
    ◦	 “the process of providing for and making available to an employee, and placing or enrolling the
       employee in, a planned, prepared, and coordinated program, course, curriculum, subject, system, or
       routine of instruction or education, in scientific, professional, technical, mechanical, trade, clerical,
       fiscal, administrative, or other fields which will improve individual and organizational performance
       and assist in achieving the agency's mission and performance goals ...”


   Chapters 41, 57 and 59 of title 5 U.S.C., and section 410 of title 5 of the Code
    of Federal Regulations (CFR) are referenced in FCA’s policy.
    ◦	 § 410.201 requires the head of the agency to establish and budget for a training program for
       employees.
    ◦	 § 410.302 directs the head of the agencies to submit training requests to OPM for approval
    ◦	 § 410.306 directs agencies to establish criteria for fair and equitable selection for training
    ◦	 § 410.308 provides conditions for training leading to an academic degree
    ◦	 § 410.309 provides for continued service agreements
    ◦	 § 410.403 provides for reimbursement of related travel expenses associated with training
    ◦	 § 410.404 describes conferences that are considered training activities and sets forth specific
       requirements in order for a conference to be considered training




                                                               Farm Credit Administration Office of Inspector General
                                                           Report #A-14-01 FCA’s Training and Conference Expenses       9
PPM 843-Training, Development, Professional Certifications, Licenses and
Membership Fees
 Provides policy and procedures for FCA’s Training Program
 Authority based on Title 5: CFR, Section 410
 No significant differences identified between PPM 843 and Section 410
  ◦	       Policy issued 9/13/2006; Implementing procedures issued 2/4/2012


PPM 843 Attachment: FCA’s Agreement to Continue Service After Training
 Required service agreement when training exceeds defined thresholds
  ◦	       If exceeds 80 hours of training for one course, employee will “…serve the agency for 3 times the
           length of the training.”
  ◦	       If exceeds $7,000 tuition for training on a particular subject matter in any given 12 month period,
           employee will “…agree to serve the agency for 1 year after the completion of the training.”
             Note: Discrepancy identified in PPM 843 states threshold is $10,000.
  ◦	       Issued 5/14/2003


Administrative Handbook #25
 FCA Training Request and Training Tracking Procedures
  ◦	       Issued 10/18/2006




                                                                               Farm Credit Administration Office of Inspector General 

                                                                           Report #A-14-01 FCA’s Training and Conference Expenses 10

We identified the following differences within FCA’s policies and procedures:


  Differences within        PPM 843                 PPM 843:                    Administrative
  FCA policies and                                  Attachment                  Handbook #25
  procedures
  Training requests         >$10,000                                            >$3,000
  requiring Chairman
  approval
  Employee agrees to        $10,000 tuition on a    Training expenses
  continue service with     subject in a 12 month   exceeding $7,000 on a
  FCA for 1 year after      period                  subject in a 12 month
  completion of training                            period
  If employee voluntarily   Employee reimburses     Employee reimburses
  leaves FCA before         FCA for tuition paid    FCA for tuition and
  completing service                                related fees, travel, and
  agreed                                            other special expenses




See Agreed-Upon Action #1.


                                                           Farm Credit Administration Office of Inspector General 

                                                       Report #A-14-01 FCA’s Training and Conference Expenses 11

FCA provides training to its employees to support its mission and enhance the
knowledge, skills, and abilities needed to perform the job.

FCA has multiple sources of training budget and expense data:
 Individual Development Plans (IDP)
    ◦	       Used to document training needs identified by employee and supervisor
   Budget
    ◦	       Summary of estimated training expenses budgeted by each office (9)
   Course Registrations – Tuition
    ◦	       Used to document external training requests and approvals
    ◦	       Data represents external tuition costs identified on Course Registrations completed and attended by 

             employee

    ◦	       Not all courses attended or paid for by FCA had course registration forms
    ◦	       Does not include agency-wide training
    ◦	       Course registration records over a “couple years old” that did not have Training Officer approval were 

             deleted by current Training Officer. Record retention policies do not specifically address training records.

               See Agreed-Upon Action #3
   Actual Training Expenses and Obligations (see Slide 15)
    ◦	       Identified in accounting system
    ◦	       Includes external and internal training expenses
    ◦	       Data provided does not reflect items that were adjusted in a subsequent fiscal year




                                                                        Farm Credit Administration Office of Inspector General
                                                                    Report #A-14-01 FCA’s Training and Conference Expenses       12
We compared the multiple sources of training data.

        Fiscal                       FTE                        IDP                     Budget                  Course           Actual
        Year                                                                                                  Registrations     Expenses
         2010                        287                      $883,675                   $747,470                   $241,788     $408,969

         2011                        297                        775,198                    682,938                    218,342     436,131

         2012                        280                        843,561                    615,299                    308,695     627,663

         2013                        294                        909,484                    676,009                    368,187     554,927




More detail regarding this data presented in following slides.





Note: FCA does not routinely calculate or report training expenses. The above was identified for the purpose of this audit.




                                                                                          Farm Credit Administration Office of Inspector General 

                                                                                      Report #A-14-01 FCA’s Training and Conference Expenses 13

      700,000


      600,000                                                          627,663 

                                                                                              554,927 
      500,000


      400,000                                    436,131 
                          408,969 


      300,000


      200,000


      100,000                                                                                                         Average Training Expenses

                                                                                                                            per Employee

             ‐
                         FY 2010                FY 2011               FY 2012                FY 2013          2,500

Both charts contain items that were corrected in                                                              2,000
subsequent fiscal years and inflate dollars presented.                                                        1,500
                                                                                                                                               2,242 
                                                                                                              1,000                                        1,888 
Subsequent Adjustments:
                                                                                                            1,468 
Data reflects report from Finance Team and does not reflect adjustments made in a subsequent fiscal year:

                                                                                                                        1,425 
           FY 2012 CIO Membership s/b consulting                                       47,320

                                                                                                                500
           FY 2012 OPM Survey s/b consulting                                          ‐ 8,000

           FY 2012 Duplicate OPM FEI purchase order                                   ‐19,500

                                                                                                                ‐
           FY 2013 CIO Membership $91,557 will be adjusted 9/2014                     ‐ amount tbd
                                                                                                                       FY 2010     FY 2011    FY 2012     FY 2013



                                                                                                             Farm Credit Administration Office of Inspector General
                                                                                                         Report #A-14-01 FCA’s Training and Conference Expenses       14


                                                   ‐
   FCA had a formal process for IDPs
    ◦	   Used by most offices to document employee training and developmental needs
    ◦	   Some offices did not complete IDP or used inconsistently

   FCA is reevaluating the IDP process in conjunction with hiring a Learning Officer
    ◦	   Tasked to “develop an integrated learning and performance management strategy to develop and
         retain a highly skilled workforce”


   Agency budget for training
    ◦	   Based on each office’s annual budget
    ◦	   Most offices used IDP as basis for budget
    ◦	   Some offices used historical trends




                                                            Farm Credit Administration Office of Inspector General 

                                                        Report #A-14-01 FCA’s Training and Conference Expenses 15

   Significant differences between IDPs, training budget, and actual training expenses
    ◦   IDPs appear to be an overestimation of training needs identified by employees and supervisors
    ◦   Offices budgeted less than IDPs

   Actual expenses were significantly less than budgeted in FY 2010, 2011, and 2013
    ◦   Actual training expenses exceeded budgeted by approximately $12,000 in FY 2012



               1,000,000
                900,000
                800,000
                700,000
                600,000
                                                                                           IDP ‐ Tuition
                500,000
                                                                                           Training ‐ Budget
                400,000
                                                                                           Training ‐ Actual
                300,000
                200,000
                100,000
                     ‐
                           Total FY 2010   Total FY 2011   Total FY 2012   Total FY 2013




                                                                           Farm Credit Administration Office of Inspector General 

                                                                       Report #A-14-01 FCA’s Training and Conference Expenses 16

                    Training Budget

                   Average Per Person

 2,700
          2,604 
 2,600

 2,500

 2,400
                        2,299                        2,299 
 2,300
                                      2,197 
 2,200

 2,100

 2,000

 1,900
         FY 2010       FY 2011       FY 2012        FY 2013




                                     Farm Credit Administration Office of Inspector General 

                                 Report #A-14-01 FCA’s Training and Conference Expenses 17

     400,000

     350,000

     300,000

     250,000

     200,000

     150,000

     100,000                                                                                               FY 2010
                                                                                                           FY 2011
      50,000
                                                                                                           FY 2012
          ‐                                                                                                FY 2013




    Office of Examination and OMS had largest training budget.
     ◦	       In FY 2013, FCA had 294 FTE. OE had 177 FTE. OMS had 50 FTE.
    In FY 2013, Office of Secondary Market Oversight accidentally combined $20,950 training
     expense with consulting, instead of budgeting separate for training.



                                                                                 Farm Credit Administration Office of Inspector General
                                                                             Report #A-14-01 FCA’s Training and Conference Expenses       18
Reviewed top 5 vendors with largest training expenses paid for by FCA in FY 2012
and FY 2013
    Course offerings consistent with FCA’s mission
    Compared actual training expenses to course registrations
    Identified several variations with data
    Some differences accounted for:
    ◦	     $47,320 in consulting was charged to training during FY 2012 and corrected in December 2012
    ◦	     $19,500 for duplicate purchase order corrected in FY 2013
    ◦	     Agency-wide training courses and materials were not included in course registrations
    ◦	     Some purchase orders not entirely used during the FY and carried over
        Improvements need to be made to ensure accurate and reliable training and
         expense data
    ◦	     $8,000 for an OPM employee survey was charged to training during FY 2012
    ◦	     Some training expenses did not have course registration forms
    ◦	     See Agreed-Upon Action #2

FY 2013 data included $91,557 that should be partially charged to consulting. OMS
plans to split this expense between training and consulting when the amount is
determined at the end of FY 2014.

See Slide 15 regarding subsequent adjustments.



                                                                Farm Credit Administration Office of Inspector General 

                                                            Report #A-14-01 FCA’s Training and Conference Expenses 19

   From our review of training expenses for employees with training over
    $8,000 during FY 2012 and 2013:
    ◦	 External training was related to job responsibilities and FCA mission
    ◦	 Most external training completed was identified on employee’s IDP
    ◦	 Course registration form was created and approved by 1st level supervisor and Training Officer for
       most external training
    ◦	 Payment documentation was available and traced back to accounting data
    ◦	 Documentation of course attendance was limited to a self evaluation by the employee


   Controls can be strengthened in a few areas:
    ◦	 Some course registration forms were missing, duplicate, or contained incorrect tuition
    ◦	 Some course registrations did not have approvals from Office Director and Chairman
    ◦	 No independent course documentation was provided to demonstrate attendance, certificate of
       attendance and/or grades, when applicable
    ◦	 No service agreements were obtained
    ◦	 Training leading to an academic degree did not have written approvals from Director, OMS and
       Chairman
    ◦	 See Agreed-Upon Action #2

   Details of exceptions identified during audit follow on next two slides



                                                             Farm Credit Administration Office of Inspector General 

                                                         Report #A-14-01 FCA’s Training and Conference Expenses 20

◦	 FY 2013 - 5 employees
     Service agreements were not obtained for 4 employees who exceeded annual tuition over
      $10,000
         PPM 843: “Sign FCA Agreement to Continue Service After Training for 80 hours or more for one course or
          $10,000 tuition for training on a subject in any given 12 month period”
         PPM 843 Attachment: “Agreement must be signed when employee projected to receive more than 80 hours
          training for one course or $7,000 on a subject matter in 12 month period”
     2 employees working on masters degrees with job related courses paid by FCA; academic
      degree programs not approved by Chairman
         PPM 843: “Director, OMS in consultation with CEO may authorize training leading to an academic degree when
          necessary to assist in recruitment or retention in occupations with existing or anticipated shortages of qualified
          personnel”
     No grades provided to verify employee successfully completed training
         PPM 843: “Employee must reimburse FCA for full amount paid if employee fails to successfully
          complete training (grade of “C” or better)”
     1 course missing approval from Chairman ($19,875)
         PPM 843: “Chairman reserves authority to prior approve all training requests for tuition that exceed $10,000”
     1 course missing Office Director approval ($5,600)
         PPM 843: Office Directors “Prior approve any training tuition over $5,000 and recommend training
          tuition over $10,000”
     2 duplicate course registrations ($1,900, $2,340)
         These courses were not paid twice, but had duplicate registrations in the course registration
          database



                                                                  Farm Credit Administration Office of Inspector General 

                                                              Report #A-14-01 FCA’s Training and Conference Expenses 21

◦	 FY 2012 - 6 employees
     Service agreements were not obtained for 3 employees who exceeded annual tuition over 

      $10,000 (2 additional employees exceeded annual tuition over $7,000)

     1 employee working on masters degree with job related courses paid by FCA; academic degree
      program not approved by Chairman
     No grades provided to verify employee successfully completed training
     1 course missing Office Director approval ($5,035)
     1 missing course registration; approved on IDP ($2,260)
         PPM 843 requires employees to complete Form 476, an electronic course registration form
     1 duplicate course registration ($5,035)
         Course was not paid twice, but had duplicate registrations in the course registration database
     1 course not attended due to scheduling conflict; course never rescheduled nor tuition has been
      recovered to date ($1,220)
     1 potential upward mobility program candidate;
         PPM 811 – Upward Mobility Program; policy issued 10/9/1990, reassigned to OMS 7/20/2009
         Although OIG concluded this case did not meet specific criteria for upward mobility, FCA needs to
          consider whether significant training provided to an employee in conjunction with a transfer,
          reassignment, or change in series meets the intent of the Upward Mobility Program. The Upward
          Mobility Program was “to provide opportunities for employees to increase their skills, perform at
          their highest potential, and advance in accordance with their abilities in light of available job
          opportunities.”



                                                               Farm Credit Administration Office of Inspector General 

                                                           Report #A-14-01 FCA’s Training and Conference Expenses 22

   From our review of payments for training expenses over $5,000 during fiscal
    year 2012 and 2013:
    ◦	   External training was related to job responsibilities and FCA mission
    ◦	   Course registration form was created for external training
    ◦	   Payments were traced to supporting documentation
    ◦	   On 10 occasions, a cardholder exceed their purchase limit for training on the credit card
            Procurement Controls outlined by the CFO via email 5/25/2012: “…can purchase individual training up to $5,000
             as approved by the training officer.”
    ◦	 1st level supervisor and Training Officer approvals were obtained
    ◦	 Documentation of course attendance was limited to a self evaluation by the employee
    ◦	 A high ranking official attended an $8,000 course; OPM approval not obtained; no attendance
       records retained
            PPM 843: “Obtain approval from the Office of Personnel management for training for the Chairman, per 5 CFR
             410.302(c)”



   Controls can be strengthened in a few areas:
    ◦	   A cardholder exceeded their limit for training on the purchase card
    ◦	   Written approval from the Office Director was not obtained for training exceeding $5,000
    ◦	   OPM approval was not obtained for training attended by a high ranking official
    ◦	   Independent course documentation to demonstrate attendance should be obtained for training over
         a significant dollar amount
    ◦    See Agreed-Upon Action #1 and #2



                                                                       Farm Credit Administration Office of Inspector General 

                                                                   Report #A-14-01 FCA’s Training and Conference Expenses 23

PPM 843 contains reporting requirements by the Director, OMS
   Quarterly - summary of training activities to each Office Director and CEO
   Annually - report on effectiveness of Training Program as a component of the Human
    Capital Plan along with the measures of performance for the program
   “Provide an annual report on the analysis of IDPs, identified training needs, training
    accomplishments, and plans to COO and Human Capital Steering Group”


Facts and findings:
   No internal reports prepared for Chairman and CEO, Office Directors, COO, and Human
    Capital Steering Group
   Multiple Training Officers within past five years has caused gaps in the Training
    Program
   See Agreed-Upon Action #2




                                                     Farm Credit Administration Office of Inspector General 

                                                 Report #A-14-01 FCA’s Training and Conference Expenses 24

  CONFERENCES -
FACTS AND FINDINGS




             Farm Credit Administration Office of Inspector General 

         Report #A-14-01 FCA’s Training and Conference Expenses 25

   Title 41: C.F.R. Part 300-3
    ◦	   Definition of conference
    ◦	   A meeting, retreat, seminar, symposium or event that involves attendee travel
    ◦	   Also applies to training activities that are considered to be conferences under Title 5: C.F.R. Part 410.404


   Title 41: C.F.R. Part 301-74
    ◦	   Provides guidance for planning conferences


   OMB Memorandum M-11-35, Eliminating Excess Conference Spending and
    Promoting Efficiency in Government
    ◦	   directs agencies, “…to conduct a thorough review of the policies and controls associated with conference-
         related activities and expenses.”


   OMB Memorandum M-12-12, Promoting Efficient Spending to Support Agency
    Operations
    ◦	   requires agencies to focus on conference spending, and outlines new policies and practices for conference
         sponsorship, hosting, and attendance


   Consolidated and Further Continuing Appropriations Act 2013 and Consolidated
    Appropriations Act of 2014 (§ 742(a))
    ◦    contain reporting requirements to the Inspector General



                                                                     Farm Credit Administration Office of Inspector General
                                                                 Report #A-14-01 FCA’s Training and Conference Expenses       26
FCA minimized expenses associated with agency sponsored conferences and provided
guidance to Office Directors

Primarily to exchange information regarding the examination process and orientation of
new employees
  ◦	       Travel greatest expense


COO issued guidance regarding conference expenses in an email to Office Directors on
7/15/2014
  ◦	       Defines “conference”
  ◦	       Provides examples of conferences
  ◦	       Provides examples of items not considered conferences
  ◦	       Requires approval and reporting requirements by Office Directors if estimated travel and 

           conference activity costs are $18,000-$100,000 in travel and conference activity costs

             Developed Conference Request and Approval Form to facilitate reporting
  ◦	       Prohibits travel and conference activity costs exceeding $500,000 without a written waiver by the
           Agency Head




                                                                       Farm Credit Administration Office of Inspector General 

                                                                   Report #A-14-01 FCA’s Training and Conference Expenses 27

Contracts Desk Manual           (OMS Directive #4)
  ◦       Addresses conference planning
  ◦       Follow provisions of FTR to maximum extent possible
  ◦       All conferences must be approved by the Director, OMS


OIG Reporting
  ◦       OMS reported estimated costs of New Employee Orientation to the OIG in June 2013
            Estimated costs were $19,320
            Largest expense was travel
            Other costs estimated at less than $5,000
  ◦       Process was developed to ensure reporting to the OIG when applicable




                                                              Farm Credit Administration Office of Inspector General 

                                                          Report #A-14-01 FCA’s Training and Conference Expenses 28

Limited review of travel voucher summaries for selected employees did not
reveal any inappropriate travel expenses related to training

Identified travel expenses associated with training and conferences
   Purpose classified as training or conference attendance
   Non-local


Although not a travel voucher audit, performed a limited review of employees
with greatest amount of travel expenses related to training and conferences
   Training related to employees’ duties and FCA mission
   Location appeared to be reasonable




                                                     Farm Credit Administration Office of Inspector General 

                                                 Report #A-14-01 FCA’s Training and Conference Expenses 29

1.   OMS should update policies and procedures governing training and conferences.

          Resolve inconsistencies identified in current policies and procedures
          Strengthen policies and procedures related to training leading to an academic degree
          Consider higher level approvals for annual employee training exceeding a specific dollar
           threshold
          Consider requiring independent course documentation for training exceeding a specific dollar
           threshold
          Consider whether a cardholder’s purchase card limit for training needs to be increased


         Management Response:
            OMS agreed to determine appropriate thresholds, update policy and procedures, and add
            increased controls in the approval process for higher cost training.




                                                               Farm Credit Administration Office of Inspector General 

                                                           Report #A-14-01 FCA’s Training and Conference Expenses 30

2.	   OMS should identify and strengthen controls over the Training Program to ensure
      compliance with agency policies and procedures.

               Ensure all external training paid for by FCA has supporting Course Registration forms
               Ensure proper written approvals obtained from Office Director and Chairman when applicable
               Identify training potentially leading to an academic degree and obtain appropriate approvals
               Obtain service agreements, when applicable
               Create flag in Course Registration database or process to track when an employee exceeds the
                threshold requiring service agreement or higher approvals
               Obtain course documentation to demonstrate attendance and grades, if applicable
               Seek OPM approval for training attended by the Head of the Agency
               Ensure purchase orders for vendors that provide training and consulting are properly allocated
               Develop a process to ensure required reports related to the Training Program are prepared

             Management Response:
               OMS agreed to implement additional controls to ensure appropriate authorizations and
               supporting documentation are obtained and maintained. OMS also agreed to implement
               additional controls to ensure training and consulting costs are appropriately allocated and
               reporting requirements are met.




                                                                  Farm Credit Administration Office of Inspector General 

                                                              Report #A-14-01 FCA’s Training and Conference Expenses 31

3.   OMS should update policies and procedures related to record retention.

              Determine a record retention policy for training data and supporting documentation
              Include an independent verification process before any data or documentation is purged
              Develop a process to ensure board members training records are included

            Management Response:
              OMS agreed to update record retention policies and institute controls over the training
              database to ensure independent verification is required before purging documents.




                                                                Farm Credit Administration Office of Inspector General 

                                                            Report #A-14-01 FCA’s Training and Conference Expenses 32

                         REPORT


Fraud    |    Waste    |    Abuse    |    Mismanagement




              FARM CREDIT ADMINISTRATION

              OFFICE OF INSPECTOR GENERAL


       Phone: Toll Free (800) 437‐7322; (703) 883‐4316


                    Fax:  (703) 883‐4059


               E‐mail: fca‐ig‐hotline@rcn.com

              Mail:  Farm Credit Administration

                     Office of Inspector General

                     1501 Farm Credit Drive

                     McLean, VA  22102‐5090