Skip to Highlights
Highlights

Farmers receive about $15 billion annually in federal farm program payments to help produce major commodities, including corn, cotton, rice, and wheat. The Farm Program Payments Integrity Act of 1987 (1987 Act) limits payments to individuals and entities--such as corporations and partnerships-- that are "actively engaged in farming." GAO (1) determined how well USDA's regulations limit payments, (2) assessed USDA's oversight of the act, and (3) summarized the distribution of farm payments by type of entity.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Agriculture 1. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to develop and enforce measurable requirements defining a significant contribution of active personal management.
Closed - Not Implemented
USDA is currently drafting regulations for implementation of the payment eligibility and limitation provisions of the 2008 Farm Bill, and it is considering various approaches as to how to better define active personal management. USDA expects to publish an interim rule in the fall.
Department of Agriculture 2. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to revise its regulations to clarify whether schemes and devices require fraudulent intent and seek congressional authority if necessary.
Closed - Not Implemented
USDA did not implement this recommendation, stating that its current regulations are sufficiently clear.
Department of Agriculture 3. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to issue more detailed guidance on the kinds of arrangements that may constitute a scheme or device under its regulations.
Closed - Implemented
USDA reviewed its procedures on scheme or device and provided clarifying and additional guidance to its field inspectors.
Department of Agriculture 4. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to improve the sampling methodology for selecting farming operations for review in order to have greater assurance that only eligible recipients receive payments.
Closed - Implemented
USDA assessed its sampling methodology for selecting farming operations for compliance with payment limitation and eligibily rules. Based on this assessment, USDA made changes that improve the methodology by reducing the number of compliance reviews waived each year.
Department of Agriculture 5. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to ensure that FSA field offices conduct compliance reviews in a timely manner.
Closed - Implemented
At the time of our report, USDA used a manual process to track the status of completion of compliance reviews. In 2006, USDA implemented a web-based system to track and oversee the completion of reviews and to generate status reports whenever requested by USDA management.
Department of Agriculture 6. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to develop management controls to ensure that FSA field staff make use of all available tools to assess payment recipients' compliance with the act.
Closed - Implemented
At the time of our report, USDA field inspectors conducted few interviews of farm payment recipients as part of USDA's end-of-year reviews. Instead, inspectors relied on their "personal knowledge" of recipients. In 2005, USDA issued a notice to its field inspectors indicating our findings and conclusions and emphasized that "personal knowledge" is not appropriate documentation for an end-of-year compliance review procedures.
Department of Agriculture 7. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to establish and maintain a consistent methodology for collecting, analyzing, and summarizing data to identify patterns and trends in compliance over time and across states.
Closed - Implemented
USDA is currently developing a database that will provide agency managers with analytical capabilities to summarize compliance review results and identify problem areas. USDA expects the new system to be functional in October 2008
Department of Agriculture 8. To better ensure that recipients of farm program payments do not circumvent payment limitations, the Secretary of Agriculture should direct the Administrator of the Farm Service Agency to provide training that emphasizes the financial and legal aspects of compliance reviews.
Closed - Implemented
USDA conducted training sessions for it field inspectors in October 2004 and January 2007, and has scheduled another session for September 15, 2008. The discussion of financial and legal aspects of compliance reviews was part of the training.

Full Report