By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, March 2 – Frustration dominated a Senate Appropriations hearing Wednesday focused on multi-billion-dollar waste, fraud and abuse in Department of Agriculture programs. Pointing to a glaring source of frustration, USDA's Inspector General Phyllis Fong told Agriculture Subcommittee members that in one USDA housing program alone, “we estimate that 27,206 loans were ineligible for the program – over 33% of the portfolio – with a projected total value of $4 billion.”

Fong and other USDA Office of Inspector General (OIG) officials voiced their frustration over some USDA agencies which agree with OIG recommendations but then fail to implement corrective measures. Fong also explained that “limited resources” are limiting OIG activities and specifically requested an extra $1.575 million as part of a $90.7 million budget request for fiscal 2012. She said that although “government-wide, we are all trying to deal with this issue of the deficit,” she added that “we do believe that our work provides value.”

Rep. Rosa DeLauro, D-Conn., pointed to why frustration over poor enforcement and inadequate funding may increase very soon. She noted that the House-passed budget for the remaining seven months of this fiscal year would impose a 10% cut in USDA's OIG budget. Questioned by DeLauro, Fong said this level of cut would force rolling six-week furloughs for all USDA OIG employees, seriously limiting the agency's ability to carry out its investigative responsibilities. DeLauro said Republicans who want to cut the OIG budget and to reduce improper USDA payments should realize that with budget cuts, OIG “would not be able to follow up on improper payments.”

At House Appropriations Committee's Agriculture Subcommittee hearing, L to R, Rep. Tom Latham, R-Iowa,
and Subcommittee Chair Jack Kingston, R-Ga. Photo: Agri-Pulse. 

Other members also expressed their frustration. Both Subcommittee Chair Jack Kingston, R-Ga., and Ranking Member Sam Farr, D-Calif., said they've heard the same “we're working to get this under control” excuses from OIG officials for the past 10 or 20 years. Rather than add more money to the OIG budget, Kingston said Congress expects better enforcement and “it shouldn't be so hard.” Both Kingston and Farr also questioned Fong about why her report to the subcommittee didn't include any mention of cracking down on improper commodity program payments to farmers.

Fong responded that “we believe it is important that USDA programs deliver the correct benefits in the right amounts to the right people.” But she also explained that proper enforcement can be difficult because USDA operates with “unusual” regulations and because USDA agency personnel sometimes consider problems “mistakes” rather than fraud which should lead to disbarment from government programs for individuals or entities. She said OIGs not only at USDA but throughout government often hear the excuse from agencies that they don't crack down on abuse because “we depend on these entities to deliver the programs.”

Fong told Kingston that “We agree with you that the disbarment and suspension process needs a lot of work within USDA and we feel very strongly that if a person has been convicted of a crime, especially involving a federal program, it makes perfect sense to debar them from participating in USDA programs as well as all government programs and we are working with the department to implement that.” Unfortunately, she said, “some agencies are more responsive than others.”

During more than an hour of questioning, subcommittee members zeroed in on everything from undetected e.coli in meat plants and salmonella in eggs to puppy mills, shell peanuts, and enforcing organic standards. For each issue, the bottom line seemed to be that the OIG is “on the case” but overloaded with demands and underfunded.

Following the hearing, Congressman Kingston told Agri-Pulse that USDA is mishandling perhaps $4 billion in improper housing loans, another $3.6 billion in improper SNAP Food Stamp benefits, and an estimated $1 billion in improper farm program payments. “If it's in incompetency in lending money on housing guarantees that should not be loaned, allowing a farmer year after year to participate rather than being debarred after he's bilked you once, if it's in a grocery store participating in the SNAP program that repeatedly has employees who game the system,” he said, “that's where we should address the problem to save the biggest amount of money the quickest.”

Kingston said “we have these great reports, but there's very little change. It's always, 'we're working on this' . . . The biggest issue right now is to act on the recommendations that the OIG has already given, and if we doubled their budget, doubled their employees and they're coming up with more recommendations and none of them are being followed, we haven't taken a step forward.” Kington said his concern is that while USDA's OIG does good work, “it doesn't seem to be acted on” – so throwing more money at OIG wouldn't solve the problem.

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