The government's financial rating system shows the Department of Agriculture to be the worst managed major agency.
The agency's financial statements are in such disarray that they have been unauditable since 1994. But Edward R. McPherson, the department's chief financial officer, insisted in a recent interview that most of the problems had been solved and that future audits would be much improved. His predecessors have made similar assertions.
A senior auditor in the inspector general's office, while acknowledging that "there have been changes" at the department, added that "we won't know anything until we complete the audit" early next year.
The audit for the 2000-2001 fiscal year, completed last February, showed that the department made unsubstantiated balance adjustments totaling $2.9 billion.
"I can't tell you what's in that figure," said the senior auditor, who spoke on the condition of anonymity. "I don't think they even know."
Behind it, audit reports show, is a department in financial disarray. After seven years of trying, the Agriculture Department recently completed installation of a financial accounting system. But another inspector general's audit, last summer, found the system to be largely dysfunctional because of user errors and unauthorized modifications.
For example the system uses a "funds control" program to limit spending to the budgeted amount. In 68 accounts, the audit said, agency employees had overridden the control, or not turned it on, leading to $1.3 billion in what was apparently overspending. When auditors tried to view the system's override log, to see how the overspending had occurred, they found it turned off.
The system included a payment limit for each check of $999,999. But users who could not be identified by auditors had added a digit, changing the limit to $9,999,999. Contrary to agency rules requiring approval from supervisors, more than 2,200 agency employees had been authorized to process certain payments with no oversight or approval, raising the risk of fraud, auditors said. In addition, 186 people who no longer worked for the department still had approved access to the system."
Bush, Senate Reach Drought Relief Deal
The Wichita (Kansas) Eagle
BY ALAN BJERGA
January 16, 2003
WASHINGTON - Sen. Sam Brownback said Wednesday that White House and Senate negotiators had reached a deal on $3.1 billion in supplemental assistance for farmers and ranchers affected by drought.
The agreement still needs cooperation from the House of Representatives to pass.
A major obstacle to providing more aid for the nation's drought-stricken farmers was removed when the White House agreed that the new aid wouldn't cut into money provided by last year's farm bill.
In the fall, the White House insisted that any new relief come out of the $180 billion farm bill passed last May.
But drought is entering its third year in parts of western Kansas, and Brownback said the aid is sorely needed.
"We need moisture," said the Kansas Republican. "We also need income coming through the door for farmers."
Details of the bill still need to be worked out.
But under the agreement between the White House and Senate, it would cover all farmers included in programs under the 2002 farm bill, regardless of crop loss.
Sen. Pat Roberts, R-Kan., said he was pleased farmers would get more assistance.
But Roberts said he was disappointed that the bill isn't targeted just toward farmers who suffered crop losses. Because this is a supplemental bill rather than pure disaster aid, "it could take farmers months to receive assistance," he said.
The bill would be funded with money the government has saved by passing this year's spending bills late. Because Congress is operating under emergency levels to keep spending at last year's amounts, it isn't spending anticipated increases.
That has freed enough money for the White House to accept a package that adds more agricultural spending to the 2002 farm bill, Brownback said.
The agreement would supersede the $4 billion aid package that Brownback is co-sponsoring with Roberts.
Farm Groups Criticize GOP Drought Relief
Newsday.com / Associated Press
By EMILY GERSEMA
January 16, 2003
WASHINGTON -- Farmers who grew healthy crops untouched by drought and heavy rains could sign up for a share of the $3.1 billion in disaster aid under a Republican proposal.
But the senior Democrat on the Senate Agriculture Committee said Thursday that the plan is unfair to growers who suffered losses from bad weather over the past two years.
"This is just bizarre at the best," said Sen. Tom Harkin, D-Iowa. "I don't know who dreamt this up, but it sure wasn't somebody that knows something about agriculture."
The GOP plan, led by Senate Agriculture Chairman Thad Cochran, is about half of the $6 billion the Senate approved in September.
Under the new proposal, farmers registered for subsidies could apply to receive 42 percent of their 2002 payment to cover losses. It also says those farmers would have to sign a contract with the Agriculture Department, agreeing to get crop insurance to protect against disaster.
Most farmers have yet to sign up for subsidies, but the Republican plan allows them to seek disaster aid if they do so.
Cochran said lawmakers are writing another version that would ensure the department would make payments "only to producers in counties that qualify for disaster benefits."
"We target those areas that are major disaster areas," he said.
Unlike previous aid measures, the plan would help farmers who grow fruits, nuts and other specialty crops recover from drought and floods, allowing the department to pay them $100 million in direct assistance. The agency also would pay $50 million in relief to cottonseed growers.
Farmers would prefer a larger package provided through emergency relief, similar to the way in which hurricane victims are compensated, said Tom Buis, vice president of governmental relations for the National Farmers Union.
Also, the GOP proposal would require shifting $250 million in the budget to offset a program that gave $752 million to drought-stricken ranchers. The ranchers' relief came from funds raised through import fees.
Farm groups as well as food banks, which depend on the fees to buy food, had warned the funds would be overdrawn, but the Agriculture Department denied it.
Buis said the proposed transfer "acknowledges they overdrew it" but may not fully compensate it.