Largest USDA overpayments go toward farm subsidies, report says

September 6, 2013
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The Department of Agriculture doled out more than $20 million in excess financial assistance last year, with the largest overpayments coming in the form of farm subsidies for crop insurance.

In a report released this week, the USDA inspector general said the agency spent nearly $15 million on undue payouts through the Federal Crop Insurance Corporation while issuing no major overpayments for nutrition assistance, including the Supplemental Nutrition Assistance Program — formerly known as food stamps.

Overpayments are defined as payouts that rise at least 50 percent higher than the correct amount while totaling at least $5,000 per individual or $25,000 per organization, according to the analysis.

The inspector general’s report came as Congress prepares to return from a long break next week and resume talks over new agriculture legislation.

(Diego Giudice/Bloomberg)
(Diego Giudice/Bloomberg)

In July, the GOP-led House approved a farm bill that excluded nutrition assistance, apparently an attempt to deal with that form of aid separately from other types of USDA assistance. The move angered Democratic lawmakers, who accused their Republican counterparts of playing politics with important legislation.

The watchdog analysis, released Wednesday, focused on the USDA’s compliance with reporting requirements under an executive order President Obama issued in 2009 to reduce high-dollar overpayments.

The inspector general found that the USDA reported its figures late and with errors. “Without accurate and timely reporting, the effects of USDA’s actions or strategies to eliminate the errors causing high-dollar overpayments are not fully known,” the analysis said.

The Department of Agriculture reported 239 overpayments worth a combined $20.3 million during the 2012 fiscal year, compared to 143 payouts totaling $11.7 million during the previous cycle, according to the review.

Excess payments through the Federal Crop Insurance Corporation averaged excesses of $209,000 per payout. The next highest amount came from a wildland firefighting program that sent out overpayments of $58,000 apiece on average.

The inspector general said the USDA could decrease its overpayments through better control over bookkeeping and stricter adherence to reporting guidelines, including the deadlines for producing quarterly numbers.

“USDA can take further steps to improve transparency and agency accountability for identifying and eliminating the highest payment areas,” the report said.

The Agriculture Department said in its response that “agencies misinterpreted or deviated from the requirement of the Office of Management and Budget and the [Office of the Chief Financial Officer].” The agency said its CFO would issue a memo directing each department to certify that its reporting processes comply with the established standards.

To connect with Josh Hicks, follow his Twitter feed or e-mail  josh.hicks@washpost.comFor more federal news, visit The Federal Eye, The Fed Page and Post Politics. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Josh Hicks | September 5, 2013