Friday, July 06, 2012

Payment LImitation and OIG: a Puzzle

OIG tried to do an audit of FSA's administration of the payment limitation  rules in the 2008 farm bill, notably the "attribution" of payments made to legal entities to the natural-born persons who comprise the entity.  Ferd Hoefner at Sustainable Agriculture notes the report, and comments.  The gist is summed up in his title: "Commodity Payment Limitations, Weak System, Weak Report."

I may comment more later, or I may lose interest, but I am puzzled by one aspect of the report.

OIG says they couldn't audit because of problems with the system, specifically including this point:
"Specifically, we learned that joint ventures without permanent identification numbers were not recorded in FSA’s entity database,..."
As they recognize in a footnote, FSA doesn't make payments to such joint ventures, payments are made to the members. That should mean the payments are automatically attributed to members. To me that says it doesn't constitute a weakness in the system and shouldn't be considered a problem in auditing.

FSA's response doesn't point this out.

If I follow correctly, Environmental Working Group has been "attributing" payments for some time now, using the same data as OIG refused to tackle. 

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