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Audit Reveals Millions in Farm Payments Going to Deceased People

Government Accountability Office finds USDA agencies making millions in payments to deceased individuals

Published on: Jul 30, 2013

According to a report released this summer from the U.S. Government Accountability Office, some USDA agencies have paid out millions in crop insurance, conservation and other farm program premiums to deceased individuals.

The findings are outlined in the report, "USDA Needs to Do More to Prevent Improper Payments to Deceased Individuals," which details hiccups in the check systems of three agencies that make most payments to farmers and landowners: USDA's Natural Resources Conservation Service, Risk Management Agency and the Farm Service Agency.

Of the three agencies, the report found that only FSA implements a check system to determine if any recipients are deceased before issuing payment. The process includes a comparison against the Social Security Administration's Death Master File and a subsequent follow-up to determine if the person receiving the payment is in fact dead, GAO said.

Government Accountability Office finds USDA agencies making millions in payments to deceased individuals
Government Accountability Office finds USDA agencies making millions in payments to deceased individuals

Report author Daniel Garcia-Diaz said in the case of the other two agencies, if nobody notifies USDA or the agency doesn't check against the SSA file, payments will continue to be made.

In response to that finding, GAO completed its own check of NRCS' payment lists from fiscal year 2008 to April, 2012, determining that the agency made $10.6 million in payments to more than 1,000 individuals a year or more after they had died.

In the case of RMA, the audit revealed that from 2008 to 2012, $22 million may have been provided on behalf of nearly 3,500 policyholders two or more years after their death.

GAO notes that some of these payments may have been proper, but NRCS and RMA cannot be certain because the agencies don't identify which payments were made to decased individuals.

In contrast, the only agency that does weed out deceased individuals – FSA – has flagged over 28,000 deceased policyholders in 2011 and 2012, equating to $3.3 million in payments.

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"It's important to note that FSA has actually made significant improvements in identifying deceased individuals who have made improper payments," Garcia-Diaz said Monday. "But it's time for the other two USDA agencies – NRCS and RMA – to catch up with their sister agency and implement steps to identify improper payments to deceased individuals and ensure that taxpayer dollars are used in an appropriate way."

Specifically, GAO recommends that FSA strengthen its verification process, and that the other two agencies implement procedures to catch improper payments and increase the "effectiveness of its data mining."

GAO reports that the USDA generally agreed with the audit's findings.

The report, however, has fueled the fire for critics of farm programs that have been working in opposition to this year's farm bill.

Scott Faber, senior vice president of government affairs for the Environmental Working Group, said Monday that the findings are "appalling."

"At a time when some lawmakers want to cut off funding for the hungriest children, we find out today the federal government has spent $22 million over four years to lavish insurance subsidies to individuals who are no longer alive," Faber said in a statement.

The group called for greater transparency for taxpayers and options to "fix this wasteful spending in the next farm bill."

Over the course of farm bill debate last year and into this summer, it's become clear that lawmakers are torn on the proposed farm programs in the bill, despite the elimination of direct payments.

View the full report here.