USDA Audit Finds Farmers Receive $9 Million in Loans

Total of 98 farmers received Farm Loan Program loans who had failed to repay loans earlier. Compiled by staff

Published on: Apr 17, 2006

A new USDA audit found that over the last six years, USDA has given over $9 million to individuals who shouldn't have been eligible for loans.

USDA's Office of the Inspector General released the report Thursday, revealing that a total of 98 farmers received Farm Loan Program loans who had failed to repay loans earlier.

The audit says that the Farm Service Agency confirmed that the 98 farmers were ineligible because they had caused the agency a loss when they were forgiven debt on prior Consolidated Farm and Rural Development loans. These errors occurred because FLP loan officials did not follow established procedures for determining applicants' eligibility prior to issuing additional loans, and because FSA has not established an independent review process to ensure the accuracy of loan officials' eligibility determinations.

According to the audit, debt history was missing from the department's automated system for tracking loans or the system wasn't used in other cases.

FSA issued new guidelines for employees and is putting final touches on a new computer system that will do a better job of tracking debt history.

Full the full audit, click HERE.