Department of Agriculture:

Improvements in the Operations of the Civil Rights Program Would Benefit Hispanic and Other Minority Farmers

GAO-02-942: Published: Sep 20, 2002. Publicly Released: Sep 25, 2002.

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The Farm Service Agency (FSA) runs a direct loan program that provides loans to farmers who are unable to obtain private commercial credit to buy and operate farms. FSA is required to administer this program in a fair, unbiased manner. GAO found that during fiscal years 2000 and 2001, FSA averaged 4 days longer to process loan applications from Hispanic farmers than it did for non-Hispanic farmers: 20 days versus 16 days. However, the processing times in three of the four states with the highest number of Hispanic borrowers was faster that it was for non-Hispanic borrowers in those states. FSA's direct loan approval rate was somewhat lower for Hispanic farmers than for non-Hispanic farmers nationwide--83 and 90 percent, respectively. The Department of Agriculture's (USDA) policies for staying foreclosures when discrimination has been alleged depend on the method used to lodge complaints. When an individual has a discrimination complaint accepted by USDA's Office of Civil Rights (OCR), FSA's policy is to automatically issue a stay of foreclosure until the complaint has been resolved. A GAO survey revealed that during fiscal years 2000 and 2001, FSA foreclosed on the loans of 600 borrowers nationwide. Although Hispanic farmers make up 4 percent of the agency's direct loan portfolio, 3 percent of these foreclosures involved Hispanic farmers. OCR has made modest progress in the length of time it takes to process discrimination complaints. USDA requirements direct OCR to complete its processing up through the investigative phase of complaints within 180 days of acceptance. It does not, however, have a time requirement for all of the phases of complaint processing.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to GAO's recommendation, USDA established criteria for further inquiry when the average number of business days to reach a decision on loan approvals shows a 5-day or greater discrepancy between minority and non-minority loan application processing times.

    Recommendation: To help resolve issues surrounding charges of discrimination in FSA's direct loan program, the Secretary of Agriculture should establish criteria for determining when discrepancies between minority and non-minority loan processing times and approval rates warrant further inquiry.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: In March 2003, USDA implemented criteria and requirements that FSA state offices implement FSA field recommendations and, if not implemented, a resonable explanation be provided.

    Recommendation: To help resolve issues surrounding charges of discrimination in FSA's direct loan program, the Secretary of Agriculture should require state offices to implement recommendations made as a result of FSA field reviews or explain in writing their rationale for not doing so.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Not Implemented

    Comments: In response to a request for any available documentation that would demonstrate this recommendation had been implemented, in April 2018 the Office of the Assistant Secretary for Civil Rights (OASCR) provided two memoranda from 2009 through which the Secretary of Agriculture temporarily suspended all foreclosures within the Farm Service Agency's farm loan program. However, neither memorandum included a policy statement that would be responsive to our recommendation. As a result, and due to the significant passage of time since we issued this report, we are closing the recommendation as not implemented.

    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should develop and promulgate a policy statement that lays out the factors USDA considers in issuing stays of foreclosure in class action lawsuits.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: In April 2018, in response to a request for documentation that this recommendation had been implemented, the Office of the Assistant Secretary for Civil Rights (OASCR) pointed us to Departmental Regulation (DR) 4370-001, dated October 11, 2011, that states USDA policy that agencies (including FSA) will collect race, ethnicity, and gender data from applicants and participants in each USDA program that serves agricultural producers and landowners. However, FSA did not respond to a request for additional information, including evidence to support that the agency collects this data for foreclosures. As a result, and due to the significant passage of time since we issued this report, we are closing the recommendation as not implemented.

    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should maintain historic information, by race, on foreclosures completed by FSA.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Implemented

    Comments: In April 2018, officials with the Office of the Assistant Secretary for Civil Rights (OASCR) indicated that FSA and OASCR have established a civil rights clearance process for accounts being initiated for foreclosure. Under this process, FSA's Office of Civil Rights sends OASCR's Program Complaints Division (PCD) a list of accounts slated for foreclosure. Within 30 days, PCD performs a comprehensive search of legacy and current systems to verify there are no open civil rights complaints associated with each account and provides a confirmation email to FSA's Office of Civil Rights. As a result, we are closing this recommendation as implemented.

    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should direct FSA and OCR to improve communications to ensure that foreclosure actions are not taken against borrowers with pending complaints.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Not Implemented

    Comments: USDA did not implement this recommendation as of May 2008 as discussed in our testimony GAO-08-755T.

    Recommendation: To help address long-standing problems related to OCR's untimely processing of complaints, the Secretary of Agriculture should establish time requirements for all stages of the complaint process and monitor OCR's progress in meeting these requirements.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Not Implemented

    Comments: This recommendation was not implemented as of May 2008 as discussed in our testimony GAO-08-755T.

    Recommendation: To help address long-standing problems related to OCR's untimely processing of complaints, the Secretary of Agriculture should an action plan to address ongoing problems with obtaining and retaining staff with needed skills, establish performance measures to ensure accountability, and monitor OCR's progress in implementing the plan.

    Agency Affected: Department of Agriculture

 

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