August 31, 1999

Thompson Letter on GPRA - USDA

Thompson Letter on GPRA - USDA

August 17, 1999

The Honorable Dan Glickman

Secretary

U.S. Department of Agriculture

Fourteenth Street and Independence Avenue, SW

Washington, D.C. 20250

Dear Secretary Glickman:

As you know, the Congress is focused on ensuring that the federal government delivers better results to its citizens and taxpayers. The Congress has enacted a statutory framework to achieve these results. This statutory framework includes the Government Performance and Results Act (GPRA); financial management statutes, such as the Chief Financial Officers Act; and information resources management statutes, such as the Clinger-Cohen Act. Each of these reforms aims at achieving more efficient and effective performance throughout the federal government.

As part of our oversight agenda, the Committee has developed information on how effectively the U.S. Department of Agriculture (USDA) is using the above statutory tools to improve its performance in several key areas such as becoming more results-oriented and resolving long-standing problems of fraud, waste, and mismanagement. The purpose of this letter is to share with you the information we have developed and obtain your response to certain questions pertaining to it. With this dialog as a start, we hope to work with you on a continuing basis to ensure that USDA delivers the best possible results for the American people.

Performance Plan Assessment

The Congress continues to look closely at how well departments and agencies are implementing GPRA. At the request of this Committee and others, GAO recently completed an assessment of the USDA annual performance plan for fiscal year (FY) 2000. According to GAO, USDA’s FY 2000 plan "represents a moderate improvement" over its FY 1999 plan. Among the improvements is better linkages between program activities and performance goals.

The FY 2000 plan’s major strengths are that it uses goals and measures that address program results and performance; uses intermediate outputs to show progress toward intended results, and explains how proposed capital assets and management systems support achievement of program results. Examples of results-oriented goals are included in the Farm Service Agency’s plan, which has four strategic goals, each containing associated performance goals and measures. One goal is to reduce soil erosion and it has an objective measure of the number of acres of highly-erodible land retired.

GAO found that the FY 2000 plan had three key weaknesses: it does not consistently include strategies for mitigating external factors; it does not adequately describe efforts to verify and validate data; and it does not consistently discuss the impact of data limitations. The plan could be improved by more consistently identifying strategies to mitigate external factors; describing efforts to verify and validate performance data; and describing how USDA will address the management challenges it faces as discussed below.

Need to implement audit recommendations on major management problems

One area where there have been too few results is solving major management challenges that seem to persist year after year at most agencies, including USDA. Two challenges of particular concern at USDA are (1) improving Forest Service financial management and (2) improving farm loan program administration and management.

Regarding Forest Service financial management, USDA has yet to fully implement GAO recommendations addressed to this high-risk problem area, including two recommendations detailed in the enclosures. One example is a GAO recommendation from August 1998 that USDA consistently implement guidance to account for indirect costs. Regarding farm loan programs, there are currently no open recommendations but GAO continues to monitor certain key issues associated with this high risk area. For example, USDA continues to carry a high level of delinquent debt and to write off large amounts of unpaid loans held by problem borrowers.

According to information provided to the Committee by your Inspector General (IG) and GAO, there are a number of open audit recommendations addressing other major management problems at USDA as well. The enclosure describes many such unresolved recommendations by the IG, and another enclosure describes additional open GAO recommendations. Several of the IG recommendations propose ways to improve management of the crop insurance program such as requiring reinsured companies to separate supervisory responsibilities for claims adjustment from insurance sales activities.

Need for specific performance goals to address major management problems

It is essential that agency heads and other managers commit themselves to tangible steps that will lead to solutions of major management problems and that agency heads accept accountability for following through on these commitments. One obvious way to do this is to establish specific and measurable goals in your annual GPRA performance plans. OMB guidance in Circular A-11 for agencies to prepare their performance plans states that

performance goals for management problems should be included particularly for problems whose resolution is mission-critical or which could potentially impede achievement of program goals...

GAO recently evaluated the extent to which USDA’s fiscal year 2000 GPRA performance plan contains specific and measurable performance goals to address the high risk and other most serious management problems confronting USDA.

According to the GAO evaluation, which is detailed in the enclosures, USDA’s plan has no specific goals for 5 of these 16 problem areas. Moreover, several of the remaining problem areas do not contain specific and measurable performance goals. For instance, GAO’s evaluation says that the Food and Nutrition Service’s plan contains an objective to improve the Child and Adult Care Food Program but it does not provide any criteria, measures, or data by which to determine improvement. Without such measures or goals, it is difficult, if not impossible, to assess progress in addressing major management problems and to hold agencies accountable. As you know, I wrote to you on April 15, 1999, about the major problems in this program.

Congressional follow-up

With so many tax dollars being wasted, this Committee expects agencies to take every opportunity to use the many tools available to them, such as GPRA plans, to resolve major management problems. Furthermore, the GAO and your own IG exist to work in partnership with you to solve longstanding issues of waste, fraud, and abuse.

I hope that the information provided with this letter will stimulate you to make greater use of these tools and resources. In this regard, I ask that you review the enclosed information and respond to the following questions:

• Do you disagree with any of the GAO or IG recommendations described in the enclosures? If so, what is the basis for your disagreement?

• Where you agree with the recommendations, what specific actions are you taking to implement each one and how long will it take to complete?

• Do you disagree with any of the GAO or IG designations of management problems facing USDA? If so, which ones and why?

• Where you agree with the problem designations, are you prepared to establish specific and measurable commitments to address each one of them in your next performance plan?

• If so, could you outline what approach you plan to take for each problem?

• If you believe that any of these problems do not lend themselves to specific and measurable performance plan goals, please explain why. Please also explain what alternative steps you are taking to solve the problem.

I would appreciate your early attention to this letter. After receiving your response, I will ask Committee staff to arrange a meeting with your representatives to discuss it. My Governmental Affairs Committee staff contact is Robert Shea.

Sincerely,

Fred Thompson

Chairman

FT/rs

Enclosures

OPEN GAO RECOMMENDATIONS ON "HIGH RISK" AREAS: FOREST SERVICE FINANCIAL MANAGEMENT

Date	GAO Report	Recommendation
8/ 98	RCED-98-258	Incorporate the Statement of Federal Financial Accounting Standards No. 4 into the Forest Service’s cost accounting system.
8/98	RCED-98-258	Ensure that all offices consistently implement guidance with respect to accounting for indirect costs and hold the offices accountable by following up to make sure that the standards are being consistently used.

 

 

OPEN GAO RECOMMENDATIONS ON USDA’s MAJOR MANAGEMENT CHALLENGES

USDA’s Field Structure Is Inefficient

USDA’s field structure for managing its farm programs is obsolete and inefficient. While USDA has made progress in closing about 1,000 county office locations, its field structure still includes about 2,700 county office locations that serve a decreasing number of farmers. To improve the efficiency of its farm service operations, USDA needs to consider using alternative methods for delivering services to farmers and reconsider the level of personalized service it provides to farmers. There are four open recommendations related to this management challenge.

 

GAO Product	Recommendation
RCED-98-98 Apr. 20, 1998	The Secretary of Agriculture should direct the Administrator, Farm Service Agency (FSA), in coordination with the Natural Resources Conservation Service and the Rural Development mission area (FSA’s Service Center partners), to study the costs and benefits of using alternative delivery methods to accomplish mission objectives.
RCED-99-34 Dec. 11, 1998	To measure the economies and efficiencies gained by the departmentwide administrative streamlining, the Secretary of Agriculture should require the leaders for the seven mission areas, in consultation with the Assistant Secretary for Administration and the Chief Financial Officer, to develop and implement performance measures for the department’s administrative operations that assess service delivery, efficiency, and quality.
RCED-99-34 Dec. 11, 1998	The Secretary of Agriculture should direct the Undersecretaries for the Farm and Foreign Agricultural Services, Natural Resources and Environment, and Rural Development to develop cost estimates for the completed implementation of administrative convergence.
RCED-99-34 Dec. 11, 1998	To facilitate the effective implementation of the Administrative Convergence Plan, the Secretary of Agriculture, after approving the implementation plan, should move quickly to fill key leadership positions for the Support Services Bureau and charge the appointed officials with the responsibility to carry out the plan.

 

Fundamental Changes Are Needed to Improve Food Safety

The increasing incidence of foodborne illness has heightened concerns about the federal government’s effectiveness in ensuring the safety of food. This concern has resulted in, among other things, the use of more scientific approaches to meat and poultry inspections. However, while these changes are important to better ensuring the safety of our food, they do not address the fundamental problem of having the responsibilities for food safety scattered among 12 different federal agencies, which results in inconsistent oversight, poor coordination, and the inefficient allocation of resources. The current highly fragmented federal system for food safety needs to be replaced with a uniform, risk-based inspections system under a single food agency. There are three open recommendations related to this management challenge.

 

GAO Product	Recommendation
RCED-94-158 Sept. 26, 1994	To strengthen the National Residue Program (NRP), the Secretary of Agriculture should direct the Administrator, Food Safety and Inspection Service (FSIS), to modify port-of-entry residue testing for imported meat and poultry to include residues that domestic testing of the exporting nation has shown to have high violation rates, such as heavy metals, as well as the banned and unapproved compounds that the exporting nation identifies as being used domestically, or require that the exporting nation have programs to test specifically for such residues prior to shipment.
RCED-98-103 Apr. 30, 1998	To help the Food Safety and Inspection Service (FSIS) better identify the risks associated with specific foods and thereby further improve the Automated Import Information System’s usefulness in selecting high-risk products to inspect, the Secretary of Agriculture should direct the Administrator, FSIS, to modify the Automated Import Information System so that it can identify patterns between laboratory test results and specific foods, foreign firms, and exporting countries.

Inefficiency and Waste Within the Forest Service Continue

Inefficiency and waste throughout USDA’s Forest Service’s operations and organization have cost taxpayers hundreds of millions of dollars. In particular, the Forest Service has not obtained fair market value for its goods or recovered its costs for services, cannot accurately account for a significant amount of its assets and expenditures, has generally unreliable financial statements, and has weak contracting practices. While the Forest Service has made progress in recent years, it is still far from achieving financial accountability and possibly a decade or more away from being fully accountable for its performance. Since the financial problems at the Forest Service are so pervasive and long-standing, GAO has designated the Forest Service’s financial management a high-risk area. (Open recommendations related to the Forest Service’s financial management are detailed in GAO/HR-99-2R.) To improve its operational efficiency and effectiveness, the Forest Service must be accountable for its financial operations and performance.

There are 25 open recommendations relating to this major management challenge. In addition to the 10 recommendations discussed in the following table, there are 15 recommendations pertaining to a variety of Forest Service issues, including timber sale contract defaults, the rights-of-way program, suspended or canceled timber sale contracts, use of the National Forest Fund, management of the Salvage Sale Fund, contracting practices, and watershed issues.

GAO Product	Recommendation
RCED-97-16 Dec. 20, 1996	The Secretary of Agriculture should direct the Chief of the Forest Service to update the methods used to calculate fees for commercial and noncommercial special-use permits so that they better reflect fair market values and comply with the requirements of the Independent Offices Appropriations Act of 1952 and Office of Management and Budget Circular A-25. To minimize any impact that large increases in fees could have on permittees, the Service may wish to consider phasing in new fees. In addition, once the fees are updated, the Service needs to routinely keep them up to date.
RCED-97-16 Dec. 20, 1996	The Secretary of Agriculture should also consider seeking legislation permitting the Forest Service to retain application and processing fees in the Forest Service unit where the costs were incurred. Permitting the Service to retain the revenue necessary to offset the costs of the program would provide additional incentives and resources for getting the necessary work done.
RCED-97-16 Dec. 20, 1996	The Secretary of Agriculture should direct the Chief of the Forest Service to develop and issue cost recovery regulations so that the agency has the proper legal basis for recouping the administrative costs incurred in reviewing and processing special-use permit applications. In order to fully implement this recommendation, it will be necessary for the Service to develop a cost accounting system.
RCED-96-84 Apr. 22, 1996	To meet the requirements of the Federal Land Policy and Management Act, Mineral Leasing Act, and Office of Management and Budget’s Circular A-25, the Secretary of Agriculture should direct the Chief of the Forest Service to develop a fee system that ensures that fair market value is obtained from companies that have rights-of-way to operate oil and gas pipelines, power lines, and communications lines across Forest Service lands. While there are a number of options available to accomplish this goal, the option of establishing fees based on local market data or site-specific appraisals paid for by the users of the rights-of-way appears to be the most attractive because it collects fair market value for each right-of-way and also reduces the agency’s administrative costs.
RCED-98-58 Feb. 13, 1998	Because the Forest Service has not exercised its authority to obtain fair market value for certain goods and to recover costs for certain services and has not always acted to contain costs, even when requested to do so by the Congress, the Secretary of Agriculture should direct the Chief of the Forest Service to revise the strategic plan that the agency developed to comply with the requirements of the Government Performance and Results Act to include goals and performance measures for obtaining fair market value for goods, recovering costs for services, and containing expenses as the necessary first step in holding the Forest Service accountable for its performance.
RCED-98-88 May 6, 1998	Effective internal control is essential to safeguarding government assets and to conducting government business with full accountability. To improve compliance with the Federal Managers’ Financial Integrity Act and GAO’s standards for internal control, the Secretary of Agriculture should direct the Chief of the Forest Service to prepare and implement a written internal control plan for contracting that includes methods for ensuring (1) the complete documentation of critical actions in contract files, (2) the routine supervisory review of contracting activities, (3) more consistent monitoring of contractors’ progress on service contracts through the implementation of a training and certification program for contracting officers’ representatives, (4) improved summary management information, and (5) clarification of how to determine adequate warrant authority for various types of contracts.

RCED-97-71 Apr. 29, 1997	Because the Forest Service has proposed removing from its forest plans measurable objectives for goods and services, such as quantities of wood for lumber and forage for livestock and numbers of opportunities for recreation, the Secretary of Agriculture should direct the Chief of the Forest Service to identify how the agency will link its long-term strategic goal of providing multiple benefits to satisfy people’s needs for uses, values, products, and services within the capabilities of ecosystems with its annual performance goals and measures for gauging the progress made toward achieving the long-term goal and holding line managers accountable for their performance.
RCED-99-2 Dec. 2, 1998	To improve the Forest Service’s accountability for results, the Secretary of Agriculture should direct the Chief of the Forest Service to: (1) revise the agency’s budget structure, budget allocation criteria, and performance measures to better link them to the Forest Service’s strategic goals and objectives; and (2) incorporate the new performance measures into the management cost and performance reporting system that the agency is developing.
RCED-99-2 Dec. 2, 1998	To help ensure that the budget allocation criteria and performance measures are revised and the management cost and performance reporting system is implemented in a timely manner, the Secretary of Agriculture should direct the Chief of the Forest Service to establish a firm schedule to achieve performance accountability.
RCED-99-65 Apr. 2, 1999	The Secretary of Agriculture should direct the Chief of the Forest Service to develop, and formally communicate to the Congress, a cohesive strategy for reducing and maintaining accumulated fuels on national forests of the interior West at acceptable levels. The strategy should include (1) specific steps for: (a) acquiring the data needed to establish meaningful performance measures and goals for reducing fuels; (b) identifying ways of better reconciling different fuel reduction approaches with other stewardship objectives; and (c) identifying changes in incentives and statutorily defined contracting procedures that would better facilitate the accomplishment of fuel reduction goals; (2) a schedule indicating dates for completing each of these steps; and (3) estimates of the potential and likely overall and annual costs of accomplishing this strategy based on different options identified in the strategy as being available for doing so.

Reducing Overpayments in the Food Stamp Program

Millions of dollars in overpayments in the Food Stamp Program occur because eligible persons are paid too much or because ineligible individuals improperly participated in the Food Stamp Program. Computer matching can provide a cost-effective mechanism to accurately and independently identify households that include ineligible participants. Some states have taken actions to reduce food stamp overpayments by using computer matching to identify ineligible participants. USDA can enhance the states’ effectiveness in identifying ineligible participants and reducing overpayments by taking a lead role in promoting the sharing of information among federal and state agencies. There is one open recommendation related to this management challenge.

GAO Product

Recommendation

RCED-98-228 Aug. 6, 1998

In the absence of a comprehensive national information system on participants in all public assistance programs, the Secretary of Agriculture should direct the Administrator of the Food and Nutrition Service (FNS) to consider establishing a central system to help ensure that individuals participating in the Food Stamp Program are not being improperly included as household members in more than one state concurrently. As part of this effort, FNS should conduct a feasibility study to identify options and provide a cost-benefit estimate for each option.

USDA Lacks Financial Accountability Over Billions of Dollars in Assets

USDA has a long-standing history of deficiencies in its accounting and financial management systems. Since 1991, because of these deficiencies, USDA’s Inspector General has issued a series of unfavorable financial audit reports on USDA and several of its component agencies’ financial statements. In addition, USDA’s ability to comply with budgetary and financial statement reporting requirements is severely hampered by its lack of adequate financial systems. USDA currently has an action plan for resolving its accounting and financial systems’ deficiencies that calls for full implementation by fiscal year 2000. Given the long-standing nature of USDA’s financial management deficiencies, complete resolution by fiscal year 2000 will be a significant challenge.

While currently GAO has no open recommendations directly related to USDA’s overall financial management, the Inspector General’s (IGs) financial audits have resulted in detailed recommendations that, if adequately implemented, provide the path that USDA must follow to achieve financial accountability. The IG’s recommendations address the need for improving internal controls and implementing a modern financial management system that meets federal accounting standards and requirements. Although USDA has measures underway to correct its financial management deficiencies, few of the IG’s recommendations have been fully implemented. As a result, few of the department’s financial problems have been fully resolved. As GAO has done for the past several years, it will continue to monitor the efforts of USDA and its component agencies to achieve financial accountability. In addition, because the financial problems at the Forest Service, a major USDA component agency, are so pervasive and long-standing, GAO has designated the Forest Service’s financial management a high-risk area.

USDA Can Save Millions by Better Managing Its Telecommunications Investments

USDA is not effectively managing its telecommunications systems and services. Among other things, USDA has not consolidated and optimized telecommunications where opportunities exist to do so or established sound management practices to ensure that telecommunications resources are effectively managed and payments for unused, unnecessary, or uneconomical services are terminated. To respond to these problems, USDA has identified improvements it states could reduce its annual over $200 million telecommunications investment by as much as $70 million each year. As a first step, USDA is developing a Telecommunications Action Plan for correcting its telecommunications management deficiencies. However, once this plan is developed, USDA will need to effectively implement it to correct deficiencies and achieve cost savings. The nine open recommendations related to this management challenge are discussed in the following table.

GAO Product	Recommendation
AIMD-95-203 Sept. 22, 1995	The Secretary of Agriculture should direct the under secretaries and assistant secretaries to establish and implement procedures for reviewing telecommunications resources at offices USDA plans to either close or relocate to ensure that (1) all unneeded telecommunications services are terminated promptly and vendor accounts are closed and (2) telecommunications equipment is properly accounted for and reused where it is practical and cost-beneficial to do so.
AIMD-95-203 Sept. 22, 1995	The Secretary of Agriculture should direct the Assistant Secretary for Administration to require the Office of Information Resources Management (OIRM) to develop additional departmental policy requiring agencies to establish management controls over the acquisition and use of telecommunications resources and assist agencies in carrying out these requirements by completing a systematic review of the agencies' current telecommunications management practices to (1) identify and correct telecommunications management deficiencies that exist and (2) establish an agency telecommunications management program that sets performance expectations over agency telecommunications activities and assigns responsibility and accountability necessary to ensure that these activities are effectively carried out.
AIMD-95-203 Sept. 22, 1995	The Secretary of Agriculture should direct the Assistant Secretary for Administration to require OIRM to strengthen oversight by conducting periodic reviews of agency telecommunications management activities in accordance with federal requirements to ensure that (1) inventories of telecommunications equipment and services are properly maintained, (2) sufficient management controls exist over telecommunications resources and expenditures, and (3) redundant or uneconomical services are eliminated.
AIMD-95-203 Sept. 22, 1995	The Secretary of Agriculture should direct the Assistant Secretary for Administration to require OIRM to determine, with assistance from the under secretaries and assistant secretaries for USDA’s seven mission areas, interagency information sharing requirements necessary to effectively carry out USDA crosscutting programs and include these data sharing requirements in departmental and agency strategic IRM and telecommunications plans.
AIMD-96-59 Apr. 16, 1996	The Secretary of Agriculture should direct the Assistant Secretary for Administration and the Chief Financial Officer, in cooperation with the under secretaries and the Office of the Inspector General, to determine the risk of and vulnerability to telephone fraud, waste, and abuse departmentwide; develop an appropriate plan with cost-effective controls to mitigate these risks; and expeditiously implement this plan. In developing this plan, among other things, the department should consider determining whether there is a need to continue to accept collect calls and, if deemed necessary, evaluate the viability and cost-effectiveness of alternatives to collect calls such as offering toll-free numbers.
AIMD-97-67 May 8, 1997	The Secretary of the Interior and the Secretary of Agriculture should ensure that their respective acting CIOs are responsible and accountable for implementing the 1995 joint sharing agreement. At a minimum, the acting CIOs should stop further radio system purchases, except those necessary for meeting immediate technology needs that are critical to ongoing operations, until both departments jointly determine and document where radio equipment and services can be cost effectively shared and savings achieved.
AIMD-97-67 May 8, 1997	The Secretary of the Interior and the Secretary of Agriculture should ensure that their respective acting CIOs are responsible and accountable for implementing the 1995 joint sharing agreement. At a minimum, the acting CIOs should monitor these activities and follow up where needed to ensure that all identified savings opportunities are acted upon.
AIMD-98-131 June 30, 1998	The Secretary of Agriculture should direct that the CIO complete and implement a departmentwide corrective action plan that fully addresses all of GAO’s recommendations for resolving the department's telecommunications management weaknesses and achieving savings wherever possible.
AIMD-98-131 June 30, 1998	The Secretary of Agriculture should direct the CIO to periodically report to the Secretary on the department's progress in (1) implementing this corrective action plan and (2) achieving the estimated $70 million in annual savings identified by the department.

Significant Weaknesses in USDA’s Multibillion-Dollar Modernization of Service Center Information Technology Place Effort at Risk

Since 1993, USDA has been attempting to modernize information technology (IT) for its service centers—the biggest, most costly, and most challenging modernization in its history. USDA experienced a failure with its initial $2.6 billion modernization program—called Info Share—which was disbanded in 1995. Then, in 1995, USDA initiated another modernization effort—called the Service Center Implementation initiative—for the purpose of providing "one-stop" service to customers of the farm service, natural resources, and rural development agencies. Plans under this initiative include modernizing business processes and IT for these agencies’ 3,100 locations at estimated life cycle costs that could ultimately exceed $3 billion. GAO found that USDA’s current multibillion-dollar undertaking has several weaknesses that place the entire effort at risk of not achieving an adequate return on investment or significantly improving customer service. Such weaknesses include (1) acquiring new IT without first determining how it will operate to provide "one-stop" service, (2) not managing the IT projects as investments, and (3) not developing a comprehensive plan and management structure for an effort of this magnitude. Because USDA has failed in past efforts to plan and manage IT modernization, and because some of the same weaknesses are present with the ongoing modernization, concerns exist that USDA could again fail unless it addresses these weaknesses. The six open recommendations related to this major management challenge are discussed in the following table.

GAO Product	Recommendation
AIMD-98-168 Aug. 31, 1998	The Secretary of Agriculture should ensure that the following actions are completed before investing in any effort to modernize USDA's IT beyond that necessary for making mission-critical systems Year 2000 compliant and for cost effectively supporting ongoing operations and maintenance: (1) develop and document a concept of operations and the new mission-critical business processes necessary to provide one-stop service at all sites and (2) integrate the service center business process re-engineering project with the county-based study.
AIMD-98-168 Aug. 31, 1998	The Secretary of Agriculture should hold the CIO accountable, and provide her requisite authority and responsibility for managing and implementing the service center IT modernization.
AIMD-98-168 Aug. 31, 1998	The Secretary of Agriculture should direct that the CIO identify, assess, and document the risks, costs, benefits, and performance measures for each service center IT project before providing additional funding to ongoing projects and approving any new projects, and then use this information to review, control, and evaluate these projects at specific milestones of the project's life cycles.
AIMD-98-168 Aug. 31, 1998	The Secretary of Agriculture should direct that the CIO develop a comprehensive plan for the service center IT modernization that documents and tracks all critical milestones, dependencies among major segments, and resources needed to complete milestones, taking into account the resources that will be needed to make the service center agencies' systems Year 2000 compliant.
AIMD-98-168 Aug. 31, 1998	The Secretary of Agriculture should direct that the CIO develop an acquisition strategy that focuses on buying technology in manageable increments, where cost justification and performance measures are developed and documented for each increment.
AIMD-98-168 Aug. 31, 1998	The Deputy Secretary should report on a regular basis to the Secretary of Agriculture on the progress the department is making to implement each of these recommendations, and notify the Secretary when all of the identified weaknesses have been fully addressed and resolved.

USDA Faces Serious Year 2000 Computing Challenges

In May 1998, GAO testified that USDA will have a great deal of difficulty in correcting, testing, and implementing its mission-critical automated information systems in time for the Year 2000. While USDA has begun to address the Year 2000 problem, it still faces significant challenges renovating and replacing all of its mission-critical systems in time and taking the necessary steps to ensure that vital public services are not disrupted. The four open recommendations related to this management challenge are discussed in the following table.

GAO Product	Recommendation
AIMD-99-178 May 21, 1999	The Secretary of Agriculture should direct that the Chief Information Officer (CIO) advance the department’s December 1999 time frame for completing and testing agencies’ Business Continuity and Contingency Plans (BCCPs) to no later than September 30, 1999.
AIMD-99-178 May 21, 1999	The Secretary of Agriculture should direct that the undersecretaries for USDA's seven mission areas, as well as the CIO, Chief Financial Officer, and Assistant Secretary for Administration, have their respective agencies and offices develop priorities for completing and testing BCCPs that are aligned with the department’s 43 highest priority business processes to ensure the remaining work addresses these processes first.
AIMD-99-178 May 21, 1999	The Secretary of Agriculture should direct that the undersecretaries for USDA's seven mission areas, as well as the CIO, Chief Financial Officer, and Assistant Secretary for Administration, have their respective agencies and offices establish specific milestones to complete key interim BCCP steps that have not yet been addressed.
AIMD-99-178 May 21, 1999	The Secretary of Agriculture should direct that the undersecretaries for USDA's seven mission areas, as well as the CIO, Chief Financial Officer, and Assistant Secretary for Administration, have their respective agencies and offices report regularly to the Secretary progress on meeting milestones to ensure that the agencies and offices adequately address all key BCCP steps that are appropriate to each agency.

SPECIFIC PERFORMANCE GOALS IN USDA’s FY 2000 PERFORMANCE PLAN ADDRESSING

GAO- AND IG-DESIGNATED MAJOR MANAGEMENT CHALLENGES

Major Management Challenge	Specific Performance Goal(s)
USDA’s field structure for managing its farm programs is obsolete and inefficient.	USDA’s fiscal year 2000 performance plan provides an update on USDA’s plan to collocate county-based agencies in Service Centers, as well as on the current and next fiscal year plans. USDA anticipates that by the end of fiscal year 1999 it will have reached its target of 2,567 Service Centers. Administrative convergence continues, including the updating of computer and telecommunications resources. The fiscal year 2000 plan includes targets and performance measures for these goals. For example, "The new telecommunications system will be fully implemented in fiscal year 1999. To date, (it) has been installed in more than 1,800 Service Centers." Other goals include re-engineering Service Center business processes and reducing customer paperwork.
Fundamental changes are needed to improve food safety. The increasing incidence of food-borne illness has heightened concerns about the federal government’s effectiveness in ensuring food safety. The current federal food safety system is highly fragmented--as many as 12 different federal agencies oversee food safety. The OIG plans to monitor Hazard Analysis and Critical Control Point (HACCP) implementation.	The Food Safety and Inspection Service’s fiscal year 2000 performance plan concentrates on HACCP systems implementation, although the President’s Council on Food Safety is also addressed. Four of the agency’s six goals pertain to various aspects of HACCP planning and implementation. USDA-wide, the Department’s plan calls for spending an additional $35 million on food safety, a total of $151 million, in fiscal year 2000. This includes funding for providing research, training, and emergency response and establishing baseline data.
Inefficiency and waste throughout the Forest Service’s operations and organization have cost the taxpayers hundreds of millions of dollars.	None.
USDA continues to carry a high level of delinquent farm loan debt and to write off large amounts of unpaid loans held by problem borrowers. Management of the $21 billion farm loan portfolio is of major importance to the Department, including providing assistance to beginning and socially disadvantaged farmers/ranchers. In addition to civil rights issues, other emphases include loan servicing (ownership and operating loans) and shared appreciation agreements.	The Farm Service Agency’s fiscal year 2000 performance plan includes performance goals to reduce loan delinquencies on direct loans, reduce losses on these loans and to maintain the guaranteed loan loss rate at or below 2 percent. The plan also includes a goal to increase the number of loans to beginning and socially disadvantaged farmers and ranchers as well as a goal to process 80 percent of all requests for loan servicing within 60 days.
Millions of dollars in overpayments in the Food Stamp Program occur because eligible persons are paid too much or because ineligible individuals improperly participate in the program.	The Food and Nutrition Service’s fiscal year 2000 plan includes four performance goals to improve the integrity of the food stamp program. These goals are to maintain payment accuracy in the delivery of program benefits; increase claims collections; maintain the baseline number of sanctions against violating stores; and increase the percentage of authorized stores that meet all requirements to accept food stamps.
USDA lacks financial accountability over billions of dollars in assets. Financial management in USDA has not been sufficient to provide assurance that its consolidated financial statements are reliable and presented in accordance with federal accounting standards.	USDA’s fiscal year 2000 overview states that improved financial management is a departmental priority. The overview asserts that better response to OIG audits and addressing Federal Manager’s Financial Integrity Act (FMFIA) internal control deficiencies will improve management controls. The Office of the Chief Financial Officer’s fiscal year 2000 performance plan includes various goals and measures to promote financial accountability throughout the Department. The Office’s plan includes performance goals and measures to respond to OIG audit findings and FMFIA material weaknesses.
USDA can save millions of dollars by better managing its telecommunications investments. Among other things, USDA has not consolidated and optimized telecommunications or established sound management practices to ensure that telecommunications resources are effectively managed and payments for unused, unnecessary, or uneconomical services are terminated.	None.
Significant weaknesses in USDA’s multibillion-dollar modernization of service center information technology raise concerns regarding the extent to which this effort will achieve an adequate return on investment or significantly improve customer service. These risks include (1) acquiring new information technology (IT) without first determining how it will operate to provide required service, (2) not managing the IT projects as investments, and (3) not developing a comprehensive plan and management structure. USDA also needs to develop a concept of operations and new mission-critical business processes for providing one-stop service to better ensure the success of its IT modernization efforts.	These weaknesses are not directly addressed in the Office of the Chief Information Officer’s performance plan. However, two goals included in the plan could indirectly begin to address aspects of these weaknesses, such as the goal to ensure that service center IT is driven by business needs and processes and the goal to establish a methodology for project management. Neither, however, discusses how the risks GAO identified will be addressed prior to acquiring new IT for the service center implementation. Completing a comprehensive plan for the service center program or managing the IT projects as an investment are not addressed.
USDA faces serious Year 2000 computing challenges correcting, testing, and implementing its mission-critical automated information systems to work beyond 1999--that is to become Year 2000 compliant--in time. While USDA has begun to address its Year 2000 problem, it still faces significant challenges renovating and replacing all its mission-critical systems in time and taking the necessary steps to ensure that vital public services are not disrupted.	USDA’s overview highlights Year 2000 compliance as one of the most important challenges facing USDA during fiscal year 1999. The Office of the Chief Information Officer’s performance plan includes an objective for addressing the Department’s Year 2000 problems and the need to ensure that USDA’s mission-critical systems are compliant by March 31, 1999. While the plan does not identify a specific performance goal for Year 2000 compliance, it describes USDA’s strategy and gives time frames and measures. While the plan mentions that every agency has prepared business continuity and contingency plans to address unforeseen Year 2000 failures, such plans are not fully developed and tested, and no time frames and milestones are given for when USDA expects to complete this essential work. Moreover, despite being called one of USDA’s most important challenges, performance goals, measures, and time frames for addressing the Year 2000 issue are not discussed in the plans of all of USDA’s component agencies.
Crop insurance has become a major USDA "farmer safety net". USDA/OIG audits have identified areas where crop insurance programs need to be strengthened: (1) oversight by reinsured companies and the Risk Management Agency; (2) conflicts of interest; (3) verification by loss adjusters; (4) yield and total liability; (5) insurance availability to all producers.	The Risk Management Agency’s fiscal year 2000 performance plan includes an objective for the crop insurance program to improve program integrity and protect taxpayers’ funds. The plan does not specifically address the OIG audit findings. However, the plan does include performance goals and measures to complete audit findings and to correct FMFIA deficiencies.
Under the Conservation Reserve Program, producer receive annual payments from the Farm Service Agency (FSA) to take erodible land out of production and establish a vegetative cover on it. There have been inconsistencies in how the states have valued the cover.	FSA’s fiscal year 2000 performance plan does provide goals to establish conservation cover, rehabilitate damaged acreage, and improve site remediation. However, the plan does not provide specific goals and measures to address the OIG’s concerns.
The Child and Adult Care Food Program is intended to ensure that children and adults in day care receive nutritious meals. Widespread breakdowns in controls have been found in the program and resulted in many abuses. A Presidential initiative was begun to eliminate these abuses.	The Food and Nutrition Service’s (FNS) fiscal year 2000 performance plan includes an objective to improve the integrity of the child and Adult Care Food Program. FNS’ performance goal is to have state agencies do better targeted and higher-quality program reviews of sponsors and providers. The plan does not provide any criteria, measures, or data by which to determine improvement.
There have been issues raised regarding USDA agencies’ use of fund intended for pollution cleanup and abatement and management practices to avert future liabilities.	USDA’s overview acknowledges that agricultural activities have deleterious effects on the environment and outlines $191 million in USDA budgetary authority scheduled to be spent on environmental protection. In addition, the Departmental Administration plan includes performance goals to measure progress toward cleanup and abatement and to extend quality management practices for reducing any adverse environmental effects of USDA activities.
There have been concerns about the way research funds are distributed and the conformity of funding decisions to the needs of the agricultural and forestry communities. The Congress has determined that the Department needs a process to ensure that high-risk agricultural issues are covered, and assurances that research funds are used for their intended purposes.	None.
There has been a backlog of over 1,000 complaints regarding the civil rights process and treatment of minority farmers when they applied for farm loans or loan servicing. The OIG reported on problems as to why this backlog was not being resolved at a faster rate.	None.
There has been a history of fraud and abuse in the Rural Housing Service’s Rural Rental Housing Program. Owners and management companies have also shown indifference toward the health and safety of low-income and elderly tenants.	None.