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Washington, Dec. 29 – A new audit report from USDA’s Office of Inspector General found wide-ranging problems in the way the Farm Service Agency (FSA) administered the Collection, Harvest, Storage and Transportation (CHST) component under the new Biomass Crop Assistance Program (BCAP). The FSA spent a total of over $243 million on the CHST portion in 2009 and 2010.


Based on a review of 12 county office operations in 4 States, as well as overall administration of the program at the national office, OIG found problems including inconsistent application of program provisions across State and county offices, varying methods for measuring biomass moisture levels, inconsistent use of program forms, and data errors.


“These problems occurred because FSA, in an effort to quickly implement the program to comply with a deadline established by Presidential Directive, was unable, in the limited timeframe, to develop a handbook, specialized forms, or a computer support system that was suited to the specific requirements of the CHST program,” noted OIG in the report.


The Biomass Crop Assistance Program (BCAP) was authorized by the Food, Conservation, and Energy Act of 2008 to support the establishment and production of eligible crops of renewable biomass. BCAP supports two sets of activities: it provides funding for “matching payments” for certain eligible material sold to qualified biomass conversion facilities. CHST matching payments are made at a rate of $1 for each $1 per dry ton8 paid by a qualified biomass conversion facility, in an amount up to $45 per dry ton. Second, BCAP provides funding for producers to establish and maintain renewable biomass crops in specified project areas. The second part of the program had not yet been implemented at the time of the OIG review.


OIG recommended that FSA take the following steps to remedy the problems:


Develop (1) a program handbook setting forth policies and procedures governing program administration; (2) forms specifically tailored to facilitate day-to-day administration and capture relevant program data; and (3) a data system with applied edit checks and a designed structure to facilitate data validation, management reporting, and data analysis.


In response to the audit, Philip Sharp, Acting Director of the Operations Review and Analysis staff, offered the following:


“A final rule was published in the Federal Register on October 27, 2010, and new internal guidance, forms, and software are scheduled to be released for matching payments in early January 2011 which will satisfy the three OIG recommendations. However, as of December 14, FSA has received all required OMB clearance to make the program available and intends to do so immediately. In the interim period before the new software is available, FSA intends to deliver the matching payments portion of BCAP using the same forms and information systems as were used for previous CHST implementation. Use of the old forms is not likely to be widespread because biomass conversion facilities must first become “qualified” before an eligible material owner could apply for a matching payment.”


To view the full audit report: http://www.usda.gov/oig/webdocs/03601-28-KC.pdf

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