Improper payments to dead farmers persist, but are way down; 2 USDA agencies lack preventives

You may already be reading stories about a Government Accountability Office audit saying the Department of Agriculture paid $32 million in crop insurance and conservation aid to dead farmers. That's a lot less than the $1.1 billion that a 2007 GAO audit found had been paid out in six years, most of which was probably paid to estates that were still operating the farms, but that point is not being emphasized in the stories we've seen, or in the audit.

The reason for the sharp decline appears to be a change in USDA policy, which the study mentions only in a footnote: "USDA officials said that since 2009, the agency has assigned payments on behalf of an estate directly to the estate’s heirs, eliminating incentives for heirs to keep an estate open 

to receive payments in excess of their own payment limits."

The $32 million was paid by USDA's Risk Management Agency, which administers crop insurance, and the Natural Resources Conservation Service. The RMA "does not have procedures in place consistent with federal internal control standards to prevent potentially improper subsidies on behalf of deceased individuals," and NRCS "does not have procedures to prevent potentially improper payments to deceased individuals," the GAO said. It said the agencies need to do more to prevent such payments.

NRCS allows "an executor or other representative to act on his or her behalf to transfer the contract to an eligible successor or to complete the contracted activities," the audit said. It paraphrased NRCS as saying "not all conservation payments to deceased individuals are improper because they may have been made for work performed before the individuals died, or they were associated with easement contracts that became part of the deceased individuals’ estates and remained linked to their Social Security numbers."

USDA's Farm Service Agency, which handles crop subsidies, does have procedures in place to prevent improper payments to the deceased, but a random sample taken by GAO showed "9 percent did not have sufficient support to be coded as proper." A footnote says the error margin means the percentage could be as low as 4 or as high as 16. To read the audit, click here.