USDA’s Financial Information 'Not Reliable’

September 28, 2000

USDA’s inspector general says the department’s financial information system "on the whole is not reliable." Roger C. Viadero told a Senate subcommittee USDA’s books and records "have been so poorly maintained we have been unable to compile and analyze sufficient evidence to enable us to reach an opinion."

Sen. Peter G. Fitzgerald (R-IL), the chairman of the Agriculture subcommittee on Research, Nutrition, and General Legislation, called the findings "disgraceful." He added, "While our farmers struggle during these lean times of record low commodity prices, bureaucrats in Washington can't seem to keep track of billions of dollars of taxpayers' money. This disgraceful lack of accountability is especially troubling because the USDA was warned to address some of these problems as long as a decade ago."

Viadero said that at the beginning of this fiscal year USDA’s "fund balance" and figure estimated by the Treasury Department differed by $5 billion. Subsequent efforts were able to reduce that to $236 million.

Other efforts to change the department’s central accounting system (CAS), a system – a system Viadero described as "poorly documented, provides for only summary, and not detailed, data and does not meet government-wide accounting requirements" – have been only partially successful. Several agencies remain outside the new Foundation Financial Information System (FFIS), he said.

Credit reform "remains a huge obstacle to an improved audit opinion because of the breadth and complexity of the issue," said Viadero. Some cash flow models are progressing to where data verification procedures can be performed but "most have not."

Although some of the audits were released earlier this year, this was the first comprehensive review of the IG's reports. According to an analysis of government performance reports by the Mercatus Center at George Mason University, the USDA was one of the worst agencies in the federal government, ranking 22nd out of 24 federal agencies.

The lax fiscal management of the agency has led to some disturbing findings. According to the most recent IG report, funds intended for soil conservation programs have been shifted and used for items "such as wall murals, transportation, and bringing civil lawsuits against owners of derelict properties" in urban areas.

Fitzgerald said the implications of the problems at the USDA reach beyond the agriculture sector of the economy. Many of the troubles have occurred in the USDA's nutrition programs. In a series of audits, the IG found that funds intended for feeding children at day care facilities under the Child and Adult Care Food Program were provided for addresses that turned out to be empty lots.

"Some of the primary duties of the USDA include helping feed hungry children and ensuring that the nation has an adequate and reasonably priced food supply," said Fitzgerald. "The responsibilities of this (department) are far too important for us to tolerate financial mismanagement of this magnitude."