Audit: USDA paid millions in federal aid to dead farmers

Jason Sickles
Yahoo! News

More than $30 million in federal aid has been doled out to deceased farmers in recent years because of lax oversight by U.S. Department of Agriculture programs, according to a government audit.

An inspection by the nonpartisan Government Accountability Office revealed that the USDA’s conservation and crop insurance programs failed to match subsidy claims against the Social Security Administration’s file of deceased individuals. The payouts went to about 4,500 farmers between 2008 and 2012.

According to estimates in the report, the Natural Resources Conservation Service (NRCS) made $10.6 million in payments to 1,103 deceased individuals for a year or more after their deaths. The Risk Management Agency (RMA) made $22 million in subsidies and allowances to 3,434 program policyholders for two or more years after death.

This is a drop in the bucket given the $20 billion the USDA spends yearly to help more than 1 million participants, says Bob Young, chief economist with the American Farm Bureau Federation.

“In the overall grand scheme of things, it was not a whole heck of a lot of money,” Young told Yahoo News. “Any dollar that is not spent properly is an issue, admittedly. But, wow, in terms of overall percentages of money that were put out of whatever, I thought it was kind of amazing that it was as small as it was.”

The USDA’s written response to the audit stated it “generally agrees with the report’s findings and recommendations” but defended the agencies by pointing out that the programs had close working relationships with participants and imposed yearly reporting.

“Although NRCS and RMA can identify some deceased participants during their normal operations, we do not believe that identifying deceased individuals during normal operations is a reliable substitute for having a systematic process,” federal auditors wrote.

Young says he doubts very few farming families tried to deliberately fraud the government.

“Sometimes you’ll end up with some time between when a person passes away and the time the estate gets restructured or whatever, and you’ll get a payment that gets caught in the middle,” Young says.

The RMA, the report notes, put a computer system in place and started checking claims against the government’s list of deceased persons in May.

The GAO’s fraud findings come at time when Washington is squabbling over the cost of the current farm bill, which expires in two months.

In its report to Congress, federal auditors said their findings “may call into question whether these safety net programs are benefiting the agriculture sector as intended.”