Financial Audit:
Farmers Home Administration's Financial Statements for 1988 and 1987
AFMD-90-37: Published: Jan 25, 1990. Publicly Released: Jan 25, 1990.
Additional Materials:
- Full Report:
Contact:
(202) 512-9454
contact@gao.gov
Office of Public Affairs
(202) 512-4800
youngc1@gao.gov
GAO examined the Farmers Home Administration's (FmHA) consolidated statements of its financial position as of September 30, 1988 and 1987, and the related statements of operations and cash flows for the fiscal years then ended.
GAO found that: (1) the statements presented fairly the FmHA financial position as of September 30, 1988 and 1987, and the related statements of operations and cash flows for the years then ended, in conformity with generally accepted accounting principles; (2) although FmHA implemented the Acquired Property Tracking System (APTS) in response to internal accounting deficiencies, the system did not conform to federal agency policies and procedures; (3) FmHA had not completed system modifications which would allow it to properly record acquired property or integrated APTS data with the related general ledger control accounts; (4) APTS contained inaccurate and incomplete information from FmHA field offices, since the software did not include parameter checks to detect unreasonable property values; (5) FmHA field supervisors did not establish market values for collateral in order to project loan losses; and (6) FmHA did not have an appropriate methodology for determining the necessary property holding and disposition costs to ensure reasonable loan loss estimates and acquired property balances.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: APTS modifications were implemented on February 27, 1991, including provisions for reporting property at fair-market value, recognizing gains and losses, recording costs, balancing to the general ledger, and edit checks to detect unusual valuations of property. County offices completed reviewing and reconciling accounts and certifying balances in October 1991.
Recommendation: The Secretary of Agriculture should direct the Administrator, FmHA, to ensure that all county offices receive APTS reports, require periodic reconciliations of APTS report information with the detailed acquired property files as of fiscal yearend, and develop appropriate internal controls to detect the recording of unreasonable dollar values for inventory properties.
Agency Affected: Department of Agriculture
Status: Closed - Implemented
Comments: A memo was sent to FmHA county offices on September 7, 1990, requiring review of all loan collateral. Systems modifications for single family housing programs were implemented on November 2, 1991. Collateral values were corrected by September 22, 1992, and are used to develop loan loss estimates.
Recommendation: The Secretary of Agriculture should direct the Administrator, FmHA, to ensure that field office supervisors use market values of collateral as close to the end of the fiscal year as practicable to estimate loan losses in the loan classification system.
Agency Affected: Department of Agriculture
Status: Closed - Implemented
Comments: The agency has implemented procedures to reconcile losses effective August 31, 1990, and recorded by October 1990.
Recommendation: The Secretary of Agriculture should direct the Administrator, FmHA, to reconcile estimated loan losses between the field office files and the automated files at the finance office as of fiscal yearend.
Agency Affected: Department of Agriculture
Status: Closed - Implemented
Comments: A memo from the Administrator, in March 1990, was sent to all county offices to correct the problem and implement the GAO recommendation. Action was completed by October 1990. Systems edit checks and staff training in February 1991 also were implemented.
Recommendation: The Secretary of Agriculture should direct the Administrator, FmHA, to ensure that field office supervisors follow instructions when calculating the estimated loan losses, particularly the procedures regarding the consideration of prior liens in loss calculations, and the proper application of liquidation costs. One possible approach would be to provide periodic training on loan classification procedures.
Agency Affected: Department of Agriculture
Status: Closed - Not Implemented
Comments: FmHA provides an allowance of 20 percent of the acquired property's value for holding and disposition costs and does not intend to take further action on this recommendation. The amount of acquired property has been significantly reduced and therefore should be dropped.
Recommendation: The Secretary of Agriculture should direct the Administrator, FmHA, to develop a sound methodology for determining holding and disposition cost factors applied to loan collateral and acquired property by considering historical repair and maintenance costs, as well as current estimates of taxes, insurance, and cost of capital.
Agency Affected: Department of Agriculture
Explore the full database of GAO's Open Recommendations
»
Nov 16, 2020
-
Financial Audit:
Bureau of Consumer Financial Protection's FY 2020 and FY 2019 Financial StatementsGAO-21-174R: Published: Nov 16, 2020. Publicly Released: Nov 16, 2020. -
Financial Audit:
Federal Housing Finance Agency's FY 2020 and FY 2019 Financial StatementsGAO-21-201R: Published: Nov 16, 2020. Publicly Released: Nov 16, 2020. -
Financial Audit:
Securities and Exchange Commission's FY 2020 and FY 2019 Financial StatementsGAO-21-192R: Published: Nov 16, 2020. Publicly Released: Nov 16, 2020.
Nov 10, 2020
-
Financial Audit:
IRS's FY 2020 and FY 2019 Financial StatementsGAO-21-162: Published: Nov 10, 2020. Publicly Released: Nov 10, 2020. -
Financial Audit:
Office of Financial Stability's (Troubled Asset Relief Program) FY 2020 and FY 2019 Financial StatementsGAO-21-173R: Published: Nov 10, 2020. Publicly Released: Nov 10, 2020.
Nov 9, 2020
-
Financial Audit:
Bureau of the Fiscal Service's FY 2020 and FY 2019 Schedules of Federal DebtGAO-21-124: Published: Nov 9, 2020. Publicly Released: Nov 9, 2020.
Nov 6, 2020
-
FY 2020 Excise Tax:
Agreed-Upon Procedures Related to Distributions to Trust FundsGAO-21-163R: Published: Nov 6, 2020. Publicly Released: Nov 6, 2020.
Oct 13, 2020
-
DOD Financial Management:
Continued Efforts Needed to Correct Material Weaknesses Identified in Financial Statement AuditsGAO-21-157: Published: Oct 13, 2020. Publicly Released: Oct 13, 2020.
Sep 30, 2020
-
Financial Management:
DOD Needs to Implement Comprehensive Plans to Improve Its Systems EnvironmentGAO-20-252: Published: Sep 30, 2020. Publicly Released: Sep 30, 2020.
Sep 9, 2020
-
Defense Real Property:
DOD-Wide Strategy Needed to Address Control Issues and Improve Reliability of RecordsGAO-20-615: Published: Sep 9, 2020. Publicly Released: Sep 9, 2020.
Looking for more? Browse all our products here