FARM CREDIT ADMINISTRATION PERFORMANCE AND ACCOUNTABILITY REPORT FY 2001 We have identified business planning as an examination focus area for FY 2002. In support of this planned focus area, we developed a standard examination program for FY 2002 examinations. The program is designed to facilitate conclusions regarding whether management has implemented proper strategies to accomplish an institution's public mission in a safe and sound manner. Specifically, the business planning examination program includes an evaluation of whether an institution is achieving its public mission to serve agriculture and rural America, including efforts to serve YBS farmers and ranchers. The program requires examiners to scrutinize the quality of the institution's plans to serve its territory by determining whether the institution has: • Described all segments of its existing market (including both existing and potential customers); • Evaluated how well the institution is currently serving each segment of its existing market (including both existing and potential customers); • Assessed underserved segments in the institution's existing market; • Assessed the institution's capacity to serve all segments of its existing markets • Described the strategies the institution will pursue to ensure that it provides adequate The program further prescribes the examination steps to be followed to evaluate whether the institution has clearly defined its public mission and established a means to measure and report on its results in achieving that mission. Completion of this examination program will be mandatory on all FY 2002 FCS examinations. As Table 9b shows, the results for performance measures 4 through 9, which address the System's risk. capital adequacy, and earnings, show a fundamentally safe and sound Farm Credit System. Also, as reflected by performance measures 10 and 11, we continued to meet our statutory requirement for conducting examinations of System institutions, and the ratings received from the boards and management of most Systern institutions continued to reflect positively on the value of our examinations in helping them to correct identified weaknesses. The tables that follow contain the measures for each outcome with the goals and objectives that reflect the Agency's desired performance for fiscal years 2001 and 2002. The symbols in the far right column offer a quick at-a-glance indicator of performance on each goal. For example: 59 60 FARM CREDIT ADMINISTRATION-PERFORMANCE-AND-ACCOUNTABILITY REPORT FY 2001 FCA Strategic Goal 1 - Ensure the Farm Credit System fulfills its public mission to provide constructive, competitive, and dependable credit and related services for agriculture and rural America. 1. "Special" customer service focus or features may include the following rulemaking techniques: Advance Notice of Proposed Rulemaking (ANPRM). Fast-Track or Streamlined Regulation Development Procedures; Direct Final Rulemaking. Reproposal or Resolicitation of Public Comments; Comment Period Extension; Question and Answer Format; Response to Petitions; and Information Meetings with Constituents or Congressional Committees. FARM CREDIT ADMINISTRATION-PERFORMANCE AND ACCOUNTABILITY REPORT FY 2001 61 FCA Strategic Goal 2 - Supervise risk to ensure the safety and soundness of the Farm Credit System for the benefit of stakeholders. 1. Adverse Assets/Risk Funds: The sum of all assets classified Substandard, Doubtful, or Loss plus other property owned, divided by risk funds. Risk funds are defined as permanent capital (defined above) plus the allowance for losses on loans and other property owned. Measures risk exposure of assets with well-defined credi: factor weaknesses relative to risk-bearing ability he lower the ratio the better 62 FARM CREDIT ADMINISTRATION-PERFORMANCE AND ACCOUNTABILITY-REPORT FY 2001 Farm Credit Administration Management FCA management installed new financial management software (FFS) as of June 1, 2001, to correct systemic weaknesses in the predecessor system. FFS was the Agency's system of record for FY 2001. FINASST - the predecessor system - - did not substantially comply with Federal financial management systems requirements to produce financial statements for the fiscal year ended September 30, 2000. However, for FY 2001 FCA is in substantial compliance with the requirements of FMFIA. Summary of Audit Activities for FY 2001 At the beginning of FY 2001, there were 18 unimplemented recommendations. Five were from the audit report of FCA's Supply and Procurement Functions issued March 29, 2000; two were from the inspection report of FCA's Performance Measures issued March 24, 2000; one was from the inspection report on Telecommunications Costs and Services issued March 28, 2000; one was from the inspection report on Imprest Fund issued May 4, 2000; eight were from Cash Management and Investment Practices issued September 28, 2000; and one was from the inspection report of the Denver Field Office issued September 29, 2000. 78-956 D-29 The Prompt Payment Act generally requires agencies to pay vendors 30 days after receipt of a valid invoice for goods and services ordered and delivered. During FY 2001, FCA paid most of its bills within the time requirement. In some instances invoices were received without complete or accurate information, which delayed payment while the invoices were returned to the vendor. FCA paid $6,000 in interest penalties for the payments that were not processed on time. Payments are made by electronic funds transfer unless payment by check is Civil Monetary Penalty Act The Civil Monetary Penalty Act allows FCA to assess civil penalties against FCS institutions, including their officers, directors, employees, and agents, for violation of a valid order, law, or regulation. PCA did not assess any civil money penalties in FY 2001. Debt Collection Act The Debt Collection Act prescribes standards for the administrative collection, compromise, suspension, and termination of agency collection actions, and referral to the proper agency for litigation. Debt collection has no material effect on FCA, because we operate virtually without delinquent debt. 1 |