USDA 2021 AFR

Agency

Financial

Report

2021

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USDA | 2021 Agency Financial Report i

USDA’s

Non-Discrimination Statement

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil

rights regulations and policies, USDA, its Mission Areas, agencies, staff offices, employees, and

institutions participating in or administering USDA programs are prohibited from discriminating

based on race, color, national origin, religion, sex, gender identity (including gender expression),

sexual orientation, disability, age, marital status, family/parental status, income derived from a

public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity,

in any program or activity conducted or funded by USDA (not all bases apply to all programs).

Remedies and complaint filing deadlines vary by program or incident.

Program information may be made available in languages other than English. Persons with

disabilities who require alternative means of communication to obtain program information

(e.g., Braille, large print, audiotape, or American Sign Language) should contact the responsible

Mission Area, agency, or staff office; the USDA TARGET Center at (202) 720-2600 (voice and

TTY); or the Federal Relay Service at (800) 877-8339.

To file a program discrimination complaint, a complainant should complete a Form AD 3027,

USDA Program Discrimination Complaint Form, which can be obtained online, from any USDA

office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must

contain the complainant’s name, address, telephone number, and a written description of the

alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil

Rights about the nature and date of an alleged civil rights violation. The completed AD 3027

form or letter must be signed and submitted to USDA by:

(1) Mail:

U.S. Department of Agriculture

Executive Director

Office of the Assistant Secretary for Civil Rights

Center for Civil Rights Enforcement

1400 Independence Avenue, SW

Mail Stop 9430

Washington, D.C. 20250-9410

(2) Efax:

(833) 256-1665

(3) Email:

[email protected]

Please attach a signed AD-3027 complaint

form or letter to the email.

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USDA | 2021 Agency Financial Report iii

Table of Contents

Message from Secretary Vilsack ................................................................................................. 1

Section I Management’s Discussion and Analysis ...................................................................... 5

USDA Organization Chart ........................................................................................................ 6

USDA Mission Areas and Staff Offices ..................................................................................... 7

USDA Program Performance ................................................................................................. 10

Future Demands, Risks, Uncertainties, Events, Conditions, and Trends ............................... 34

Analysis of Financial Statements and Stewardship Information ............................................ 36

Statement of Assurance ........................................................................................................ 46

Federal Managers’ Financial Integrity Act Report on Management Control ......................... 47

Compliance with Laws and Regulations ................................................................................ 53

Federal Financial Management Improvement Act Report on

Financial Management Systems ......................................................................................... 55

Financial Management Systems Strategy .............................................................................. 57

Section II Financial Information ................................................................................................ 65

Message from the Office of the Chief Financial Officer ........................................................ 65

Independent Auditors Report................................................................................................ 68

Agency Response to Auditors Report .................................................................................... 80

Financial Statements ............................................................................................................. 81

Notes to the Financial Statements ........................................................................................ 86

Required Supplementary Information ................................................................................. 170

Section III Other Information .................................................................................................. 177

USDA Management Challenges ........................................................................................... 177

Summary of Financial Statement Audit and Management Assurances ............................... 178

Payment Integrity Information Act of 2019 –

Improper Payments Overview Payment Integrity ............................................................. 180

Civil Monetary Penalties ...................................................................................................... 181

Grants Program ................................................................................................................... 199

Abbreviations–Acronyms ........................................................................................................ 201

iv Table of Contents

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USDA | 2021 Agency Financial Report 1

Message from

Secretary Vilsack

The U.S. Department of Agriculture (USDA or the Department)

respectfully submits the fiscal year (FY) 2021 Agency Financial Report,

fulfilling our responsibility to the American people, President Biden, and

the U.S. Congress.

It is a pleasure to be back at USDA with the opportunity to serve the

American people as Secretary. This Department touches the lives of all

Americans each day in so many positive ways. I am grateful for the

chance to once again work in partnership with the tens of thousands of

dedicated public servants in USDA to bring meaningful change and improve the lives of all

Americans through the Department’s programs and services.

As we confront many historical challenges associated with a continuing global pandemic, we are

also presented with even greater opportunities to deliver fundamental services to the American

people in this pivotal time. We will build back better, stronger, and more resilient and equitable

than ever before, and we will do so by recovering from the pandemic, reducing hunger and food

insecurity, working to ensure racial justice and equity, building up rural America’s economy, and

addressing climate change.

In 2021, USDA began that work to build back better than before.

The COVID-19 pandemic led to massive disruption for growers and food workers and exposed a

food system that was rigid, consolidated, and fragile. To aid in the recovery from the COVID-19

pandemic, USDA launched Pandemic Assistance for Producers. While USDA has long provided

a safety net to ensure producers can survive an unprofitable year, this time, we set out with the

mission of reaching a broader set of producers than in previous COVID-19 aid programs.

USDA dedicated approximately $6 billion toward new programs to put a greater emphasis on

outreach to small and socially disadvantaged producers, specialty crop and organic producers,

timber harvesters, and support for the food supply chain and producers of renewable energy,

among others.

Through the American Rescue Plan, USDA delivered nutrition assistance to millions of adults

and children. We provided access to the Pandemic Electronic Benefit Transfer program for the

duration of the health emergency, including through the summer, to allow families with children

receiving school meals to more easily purchase healthy food during the pandemic. We also

2 Message from the Secretary

extended a 15 percent increase in Supplemental Nutrition Assistance Program benefits for all

participants through September 30, 2021; provided $880 million to expand access to fruits and

vegetables for mothers and infants, and made investments in innovation to the Special

Supplemental Nutrition Program for Women, Infants, and Children; invested $37 million for

senior nutrition through the Commodity Supplemental Food Program; and invested $1 billion in

nutrition assistance for the territories.

Through the American Rescue Plan and the Consolidated Appropriations Act, USDA announced

an investment of up to $1 billion in Emergency Food Assistance to serve as a bridge from

pandemic assistance to food system transformation. The funding is focused on supporting and

expanding the emergency food network so states, food banks, and local organizations can

reliably serve their communities and reach rural, remote, and underserved communities.

In addition to providing assistance to resolve lingering challenges directly associated with the

COVID-19 pandemic, USDA is making a major commitment to rebuild our food system as we

Build Back Better. In FY 2021, through the Build Back Better initiative, USDA began investing

more than $4 billion to strengthen and transform the food system in four major areas: (1) food

production, (2) food processing, (3) food distribution and aggregation, and (4) markets and

consumers. The Build Back Better initiative will make meaningful investments to build a food

system that is more resilient against shocks, delivers greater value to growers and workers, and

offers consumers an affordable selection of healthy food that is produced and sourced locally and

regionally by farmers and processors from diverse backgrounds.

As part of the Build Back Better initiative, we announced the investment of $500 million in

expanding meat and poultry processing capacity. We also announced more than $150 million for

existing small and very small processing facilities to help them weather COVID, compete in the

marketplace, and have the support needed to reach more customers. These investments will add

resilience to our food supply chain and level the playing field for farmers and ranchers.

Rural American communities were hit hard during the pandemic. Through the American Rescue

Plan, USDA is implementing funding to invest in the people of rural America. We are investing

$100 million through September 2022 in rental assistance for low-income and elderly borrowers

and an additional $39 million through September 2023 to help refinance direct loans under the

Single-Family Housing Loan Program and the Single-Family Housing Repair Loans and Grants.

We also made available up to $500 million in grants to help rural health care, Tribes, and

communities expand access to COVID-19 vaccines, health care services, and nutrition assistance.

At USDA, we are recommitting ourselves to the values of equity and inclusion rooted in justice

and equal opportunity for our employees and those we serve. This policy includes recognizing

opportunities within the Department that ensure historically underserved groups more fully

access and participate in USDA programs and services.

USDA | 2021 Agency Financial Report 3

To advance this work, in FY 2021, USDA made available $2 million to establish cooperative

agreements to provide outreach and technical assistance to historically underserved farmers and

ranchers through the Pandemic Assistance for Producers initiative.

In accordance with fulfilling provisions included in the bipartisan 2018 Farm Bill, USDA

established the Heirs’ Property Relending Program, making available $67 million in competitive

loans. By gaining legal title to the land, heirs will gain access to a wide range of government

assistance. USDA also awarded $21.8 million to the 1890 Land-Grant Institutions National

Program to support research at Historically Black Colleges and Universities. The awards will

support 58 projects at Historically Black Colleges and Universities to strengthen research,

extension, and teaching in the food and agricultural sciences.

USDA launched our first-ever USDA Racial Justice and Equity Working Group to identify gaps

and inadequacies in USDA systems and processes. The Working Group is assessing how USDA

collects and uses data, as well as a broader holistic assessment of equity across USDA programs

and services, including procurement, policy, and regulatory actions; how resources are used in

service of equity and civil rights; and how and where the Department conducts stakeholder

outreach. USDA is currently creating the Equity Commission in accordance with the Federal

Advisory Committee Act. Since January, USDA staff have also worked across Mission Areas,

Agencies, and Offices to advance the goals of various equity-related executive orders,

reinforcing messages, and sharing learnings and best practices.

USDA is engaged in a whole-of-government effort to combat the climate crisis and conserve and

protect our Nation’s lands, biodiversity, and natural resources, including our soil, air, and water.

We are committed to being a partner to build more resilient communities and putting the United

States in a leadership position on climate change mitigation.

As co-lead of the Biden-Harris Administration’s Interagency Drought Relief Working Group, in

conjunction with the U.S. Department of the Interior, USDA and our partners are dedicated to

addressing worsening drought conditions in the West and supporting farmers, Tribes, and

communities impacted by ongoing water shortages. In addition, USDA is the permanent chair of

the National Drought Resilience Partnership, providing another opportunity to develop long-term

measures to respond to climate change, build more resilient communities, and protect the

natural environment.

As we look to solutions to develop a climate-smart agriculture and forestry strategy, USDA has

adapted some of our programs to provide immediate relief for climate-impacted producers.

We invested $25 million for new pilots to assist agricultural producers impacted by worsening

drought conditions. USDA’s Natural Resource Conservation Services is offering $41.8 million

through the Environmental Quality Incentives Program to help agricultural producers in Arizona,

California, Colorado, and Oregon recover from the impacts of drought and build resiliency.

4 Message from the Secretary

In FY 2021, USDA reached out to the public and asked for valuable input on a climate-smart

agriculture and forestry strategy. Additionally, we invested $330 million in 85 locally driven,

public-private partnerships to mitigate climate change and address other natural resource

challenges through the Regional Conservation Partnership Program; allocated up to $25 million

for On-Farm Conservation Innovation Trials in 2021; allocated up to $15 million to support the

development of new tools, approaches, practices, and technologies to further natural resource

conservation on private lands through the Conservation Innovation Grants program; and

allocated $10 million to support climate-smart agriculture and forestry through voluntary

conservation practices in 10 targeted states.

Each year brings unique challenges, and I am truly proud of the many ways USDA employees

across the Nation have stepped up during 2021. They have continued to get the job done on

behalf of Americans and support and grow our economy while strengthening rural communities.

I know that together, we can continue to deliver efficient service while finding more ways to

serve as efficient stewards of taxpayer dollars.

Thank you for your interest in the Department.

Thomas J. Vilsack

Secretary of Agriculture

November 12, 2021

USDA | 2021 Agency Financial Report 5

Section I

Management’s

Discussion and Analysis

USDA Organizaon Chart

6 Secon I | Management’s Discussion and Analysis

SECRETARY

Deputy Secretary

Assistant Secretary for

Civil Rights

Assist

ant Secretary for

Congressional Relaons

Assist

ant Secretary for

Administraon

Inspector

General

Counsel

Oce

of the Chief

Financial

Ocer

Chief

Economist

Oce of the

Execuve

Secretariat

Oce of

Budget and

Program

Analysis

Oce of

Communica-

ons

Oce of

Tribal

Relaons

Oce of

Partnerships

& Public

Engagement

• Higher Educaon

• Strategic Iniaves

• 2501 Grants

Oc

e of

Hearings

and Appeals

Oce of the

Chief

Informaon

Ocer

Under Secretary for

Farm Producon

and Conservaon

• FPAC Business Center

• Farm Services

Agency

• Risk Management

Agency

• Natural Resources

Conservaon Service

Under Secretary for

Food, Nutrion,

and Consumer

Services

• Food & Nutrion

Service

Under Secretary for

Food Safety

• Food Safety and

Inspecon Service

Under Secretary for

Markeng and

Regulatory

Programs

• Agricultural

Markeng Service

• Animal & Plant

Health Inspecon

Service

Under Secretary for

Natural Resources

and Environment

• Forest Service

Under Secre

tary for

Rural

Development

• Rural Housing

Service

• Rural Ulity Service

• Rural Business

Cooperave Service

Under Secretary

f

or

Research,

Educaon, and

Economics

• Oce of the Chief

Scienst

• Agricultural

Research Service

• Naonal Agricultural

Stascal Service

• Naonal Instute of

Food & Agriculture

• Economic Research

Service

Under Secretary for

Trade and Foreign

Agricultural Aairs

• Foreign Agricultural

Service

• US Codex Oce

USDA | 2021 Agency Financial Report 7

USDA Mission Areas and Staff Offices

Farm Production and Conservation

Farm Production and Conservation (FPAC) is the Department’s focal point for the Nation’s

farmers and ranchers and other stewards of private agricultural lands and non-industrial private

forest lands. FPAC agencies implement programs designed to mitigate the significant risks of

farming through crop insurance, conservation programs, farm safety net programs, lending, and

disaster programs.

• Farm Production and Conservation Business Center

• Farm Service Agency (FSA)

• Natural Resources Conservation Service (NRCS)

• Risk Management Agency (RMA)

• Commodity Credit Corporation

Food, Nutrition, and Consumer Services

Food, Nutrition, and Consumer Services works to harness the Nation’s agricultural abundance to

reduce food insecurity and improve nutrition security in the United States. Its operating agency,

the Food and Nutrition Service, administers federal domestic nutrition assistance programs and

includes the Center for Nutrition Policy and Promotion, which links scientific research to the

nutrition needs of consumers through science-based dietary guidance, nutrition policy

coordination, and nutrition education.

• Food and Nutrition Service (FNS)

Food Safety

Food Safety and Inspection Service is the USDA public health agency responsible for protecting

the public’s health by ensuring the safety of meat, poultry, and egg products. FSIS ensures food

safety through the authorities of the Federal Meat Inspection Act, the Poultry Products Inspection

Act, and the Egg Products Inspection Act, as well as humane animal handling through the

Humane Methods of Slaughter Act.

• Food Safety and Inspection Service (FSIS)

8 Section I | Management’s Discussion and Analysis

Marketing and Regulatory Programs

Marketing and Regulatory Programs (MRP) facilitates domestic and international marketing of

U.S. agricultural products, protects U.S. plant and animal health, regulates genetically engineered

organisms, administers the Animal Welfare Act, and carries out wildlife damage management

activities. MRP agencies are active participants in setting national and international standards.

• Agricultural Marketing Service (AMS)

• Animal and Plant Health Inspection Service (APHIS)

Natural Resources and Environment

The mission of Natural Resources and Environment is to sustain the health, diversity, and

productivity of the Nation’s forests and grasslands to meet the needs of present and future

generations. We carry out our mission in partnership with States, Tribes, and communities across

the country who steward our Nation’s forest and grasslands.

• Forest Service (FS)

Research, Education, and Economics

Research, Education and Economics is dedicated to the creation of a safe, sustainable,

competitive U.S. food and fiber system, as well as strong communities, families, and youth

through integrated research, analysis, and education.

• Agricultural Research Service (ARS)

• Economic Research Service (ERS)

• National Agricultural Statistics Service (NASS)

• National Institute of Food and Agriculture (NIFA)

• Office of the Chief Scientist (OCS)

Rural Development

Rural Development fosters opportunity and economic security for people and communities in

rural America through a broad range of investments. These investments open doors to better

jobs, create access to innovation and technology, while promoting the promise of rural

prosperity, equity, and climate resilience. The mission area is a catalyst for locally driven

economic development strategies that build on the diverse assets and needs of rural places,

including improving high-speed internet access; providing affordable rural housing; connecting

rural skill sets to jobs of the future; modernizing roads, bridges, and water systems; and ensuring

communities have access to health care. Rural Development provides tools and resources such as

USDA | 2021 Agency Financial Report 9

loans, grants, and strong community partnerships that ensure rural families, businesses, and

communities can prosper today and in the future.

• Rural Business Service

• Rural Utilities Service

• Rural Housing Service

Trade and Foreign Agricultural Affairs

Trade and Foreign Agricultural Affairs’ (TFAA) role is to provide our farmers and ranchers with

opportunities to compete in the global marketplace. TFAA is the Department’s lead on trade

policy with primary responsibility to ensure USDA speaks with a unified voice on international

agriculture issues domestically and abroad. Within TFAA, the Foreign Agricultural Service is the

lead U.S. agency tasked with promoting exports of U.S. agricultural products through market

intelligence, trade policy, trade capacity building, and trade promotion programs. This work is

carried out by staff in Washington as well as a global network of 93 offices covering

177 countries. Also within TFAA, the U.S. Codex Office coordinates U.S. participation in the

Codex Alimentarius Commission, a United Nations body that sets international food standards

while protecting consumer health and ensuring fair trade practices.

• Foreign Agricultural Service

• US Codex Office

USDA Staff Offices

Our offices provide support to Department officials and employees at all levels and they support

our programs and services by working with our agencies, Congress, organizations, and tribal

governments.

To learn more about USDA Agencies and Mission Areas, please visit www.usda.gov/our-

agency/about-usda/mission-areas. The most current data can be found on the USDA Website.

10 Section I | Management’s Discussion and Analysis

USDA Program Performance

USDA Performance and Results for Fiscal Year 2021

The Government Performance and Results (GPRA) Modernization Act of 2010 requires agencies

to update their strategic plan every 4 years. The U.S. Department of Agriculture’s (USDA or the

Department) 2018–2022 Strategic Plan identifies the Department’s strategic goals and

objectives. USDA reports annually on its progress toward its strategic objectives using

Key Performance Indicators (KPIs) in the Annual Performance Plan and Report published in

conjunction with the President’s Budget.

USDA follows GPRA guidelines for reporting data quality. The data collected and used by the

Department to measure performance utilize a standardized methodology. This methodology has

been vetted by federally employed scientists and policymakers and, ultimately, the leadership

and undersecretaries of each mission area. All attest to the completeness, reliability, and quality

of the data. Mission Areas within USDA are responsible for certifying that the data provided

undergo a thorough quality assurance process and provide assurance to the Performance

Improvement Officer. Data quality information for the agency priority goal-related measures

mentioned in this section can be found online at Performance.gov.

For purposes of the Agency Financial Report (AFR), a performance summary is provided using

KPIs and related program activities as a mechanism to gauge progress in achieving its mission.

In fiscal year (FY) 2021, USDA had 38 key performance measures.

The following exhibits and discussion provide a high-level description of the Department’s key

focus areas that are tracked and managed through USDA’s performance management process.

The exhibits provide historical KPIs and include a preliminary status in meeting performance

targets for FY 2021 based on data gathered through the third quarter, where available. Final

performance information and a detailed discussion of the Department’s FY 2021 performance

results, assessment methodologies, metrics, external reviews, and documentation of performance

data will be presented in the FY 2023 USDA Annual Performance Plan (APP) and FY 2021

Annual Performance Report (APR). The report will be released with the President’s 2023 budget

in February and will be available on the USDA Performance Improvement and Accountability

website.

USDA | 2021 Agency Financial Report 11

Strategic Goal 1:

Ensure USDA Programs are Delivered Efficiently, Effectively,

with Integrity, and with a Focus on Customer Service

USDA will modernize and consolidate

Information Technology (IT) infrastructure and

services and strengthen management and

oversight of procurement, property, and finance to

ensure resources are deployed as effectively and

efficiently as possible. USDA will create a safe

and modern space within which employees can

work and feel empowered to find innovative

solutions to serve customers’ needs and promote

accountability and professional development.

USDA will leverage the strength and talent of its

employees and reduce regulatory and

administrative burdens to allow agencies to focus

on their customers. Improved customer service

and employee engagement will create a more

effective and accessible USDA for all its

stakeholders.

Performance Summary

• USDA Fleet Management: Departmental

Administration Office of Property and

Environmental Management (OPEM) has led

efforts to reduce the overall fleet inventory

and continued the capped fleet size for

FY 2021. OPEM established and worked with

the agencies to create a 5-year fleet

management plan that focused on replacing the USDA aging fleet that will support efforts for

increased sustainability and utilization. In partnership with the General Services

Administration (GSA), a portion of the aging fleet was converted to GSA leased vehicles.

The subsequent increase in installations of telematics will result in additional monitoring for

sustainability and utilization. Real property needs are being evaluated in light of the

pandemic and workplace flexibilities, such as telework, which will affect the target setting.

• Data Analytics and IT Modernization to Improve Program Delivery: A contract will be

awarded to implement the IT roadmap, which is expected to be a 5–7 year effort and is

dependent on the availability of funding.

STRATEGIC OBJECTIVES

Objective 1.1

Modernize Information Technology

Infrastructure, Facilities, and Support

Services to Improve the Customer

Experience

Objective 1.2

Maintain a High-Performing Workforce

Through Employee Engagement and

Empowerment

Objective 1.3

Reduce the Regulatory Burden and

Streamline Processes

Objective 1.4

Improve Stewardship of Resources and

Utilize Data-Driven Analyses to

Maximize

12 Section I | Management’s Discussion and Analysis

• Technology Transfer: In FY 2020 and FY 2021, the Research, Education, and Economics

(REE) mission area, the Office of the Chief Scientist (OCS) analytics, and dashboard team,

and the Agricultural Research Service (ARS) Tech Transfer KPI team partnered together in

efforts to streamline data collection and enhance data integrity. The teams are testing if

automated calculations can be introduced to enhance data management efficiency. A gap was

identified between the dashboard data sources (automated) and the historically reported data

(manual). The OCS/REE KPI team is currently working to identify the cause of the data gap

and consider options (including methodology updates) for rectifying it in FY 2022.

• Citations of REE Reports: As of Quarter (Q) 2, FY 2021, the National Agricultural

Statistics Service (NASS) and Economic Research Service (ERS) combined KPI tracking fell

slightly short of its target of 60 citations with an actual reporting of 55 citations. The metric

has proven challenging for OCS/REE (NASS and ERS) to directly impact the results of the

metric. Methods to improve the count of citations are naturally delayed considering research

or data collection that takes place today would not be cited for some time. Alternative data

sources are being considered for FY 2022. During FY 2020, both OCS/REE agencies worked

with the REE analytics and dashboard team to build an automated dashboard that would

begin tracking this metric in late FY 2021.

• Agriculture Workforce Development: OCS/REE (NIFA) requests applicants to include this

number in their project’s budget as part of their grant application. Those numbers were

introduced as this metric’s initial iteration. Depending on legislative priorities, OCS/REE

(NIFA) funding may also indirectly benefit students of all levels. Investments in curriculum

development, faculty development, recruitment, and related activities enhance the

agricultural literacy of the general population and support the development of a skilled

agricultural workforce and cadre of scientists. In 2021, the REE analytics and dashboard

team worked closely with the Ag Workforce Development KPI agency leads to test the data

source automation against the manual calculations and historical data to determine if the

automated calculation method is ready for introduction.

USDA | 2021 Agency Financial Report 13

Exhibit 1: Strategic Goal 1 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results as

of Q3 FY 18 FY 19 FY 20 FY 21 FY 22

Reduce the number of Tier 1 data

centers across the Department

21 6 2 N/A

1

N/A N/A

Reduce the Department’s overall

real property footprint through

effective disposal and consolidation

efforts (Million Square Feet).

31.7 31.3 31.2 27.7 31.0

Annual Measure

update provided

in APPR

Reduce the Department’s total

number of fleet vehicles (Thousand) 27.7 27.1 37.9 36.5 36.5

Annual Measure

update provided

in APPR

Technology Transfer Percentage

(Number of USDA Patents Licensed/

Number of USDA Patents Issued)

New in

FY 2020

New in

FY 2020

26 35 35

Annual Measure

update provided

in APPR

Agriculture Workforce Development

(Number of AFRI- supported

undergraduate/graduate/post-

doctoral students)

New in

FY 2020

New in

FY 2020

1,167 2,495 3,342

Annual Measure

update provided

in APPR

Citations of REE Reports

New in

FY 2020

New in

FY 2020

134 122 134 82

AFRI = Agriculture and Food Research Initiative; FY = fiscal year; N/A = not available; Q = quarter; REE =

Research, Education, and Economics.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report (APPR), to be published in February 2022, will show the final

FY 2021 results.

1

The metric was retired in FY 2020 because performance goal was met.

14 Section I | Management’s Discussion and Analysis

Strategic Goal 2:

Maximize the Ability of American Agricultural Producers to

Prosper by Feeding and Clothing the World

A strong and prosperous agricultural sector is

essential to the well-being of the U.S. economy.

America’s farmers and ranchers ensure a reliable

food supply, support job growth, and promote

economic development. To maintain a competitive

agricultural sector, USDA will support farmers’

and ranchers’ ability to start and maintain

profitable businesses and offer financial support to

producers affected by natural disasters.

Furthermore, USDA’s research agencies will

continue to introduce high-performance plants,

animals, and integrated management options that

increase the efficiency of farming practices.

Lastly, USDA will also provide tools to producers,

so they are well-positioned to secure a share of a

growing market for agricultural products.

Performance Summary

• Loan Flexibility for Producers During

COVID-19: The Farm Service Agency (FSA)

provided flexibility to direct farm loan

borrowers to defer a loan payment for at least

1 year, known as Disaster Set Aside for

COVID-19. Because it was launched on May

23, 2020, through July 6, 2021, 4,498 borrowers with payments totaling $45.5 million have

used this option, including 2,468 beginning farmers.

• Hurricane Coverage: USDA has implemented new loan coverage whereby people can

apply for loans to repair hurricane-related losses. This coverage will help stimulate the

economy as thousands of people are affected by national disasters each year.

• Hemp Coverage: USDA is expanding insurance coverage to hemp producers from national

disasters in the United States. The pilot program provides coverage against loss of yield due

to insurable causes of loss for hemp grown for fiber, grain, or Cannabidiol (CBD) oil.

Additionally, the Noninsured Crop Disaster Assistance Program (NAP) coverage protects

against losses associated with lower yields, destroyed crops, or prevented planting where no

STRATEGIC OBJECTIVES

Objective 2.1

Provide an Effective Financial Safety

Net for Farmers and Ranchers to

Sustain Economically Viable

Agricultural Production and Support

Rural Jobs and Economic Growth

Objective 2.2

Increase Agricultural Opportunities

and Support Economic Growth by

Creating New Markets and Supporting

a Competitive Agricultural System

Objective 2.3

Protect Agricultural Health by

Preventing and Mitigating the Spread

of Agricultural Pests and Disease

USDA | 2021 Agency Financial Report 15

permanent Federal crop insurance program is available. Hemp offers new economic

opportunities for farmers.

• Livestock & Poultry (LP) Program Success: The LP program continues to deliver quality

services efficiently, recovering nearly all costs for the service. LP has faced significant

staffing challenges in the face of COVID-19 and nationwide hiring shortages but has

implemented strategies to ensure that meat, poultry, and shell egg customers can continue to

move USDA-graded products in commerce.

• National Veterinary Stockpile (NVS): The program deploys countermeasures, within 24

hours of approval, against the most damaging animal diseases and assists States, Tribes, and

Territories with planning, training, and exercises for the rapid request and distribution of

NVS countermeasures during an event. In FY 2021, the program has focused on ensuring the

readiness of equipment and procedures for response efforts and replenishing stocks of

personal protective equipment for employees, which was depleted during the COVID-19

pandemic. The program awarded a contract to upgrade its fleet of depopulation equipment

for use in animal disease emergencies, conducted virtual training exercises for state

cooperators, and is conducting a drill to validate the process of shipping vaccines for foot-

and-mouth disease to the United States from an overseas manufacturer.

• Pest Detection: APHIS and cooperators plan to conduct more than 400 early pest detection

surveys in 50 States, 5 Territories, and 2 Tribal Territories in FY 2022. Through these

surveys, the program expects to target 96 percent of the high-risk plant pests and diseases

identified of significant concern, with the goal of ensuring new incursions of pests and

diseases are detected before they have a chance to spread or establish.

16 Section I | Management’s Discussion and Analysis

Exhibit 2: Strategic Goal 2 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results as

of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Average number of days to

process direct loans

30 32 34 32 34 35

Percentage of direct and

guaranteed loan borrowers who

are beginning farmers

55.0 54.5 58.9 59.9 59.9 60.0

The annual normalized value of

risk protection provided to

agricultural producers through

the Federal Crop Insurance

Program ($ Billion)

76.8 78.2 84.1 77.9 78.2

Annual Measure

update provided

in APPR

First installment delinquency

rate on direct loans

New in

FY 2020

New in

FY 2020

9.9 8 9 10.5

Direct loan delinquency rate New in

FY 2020

New in

FY 2020

4.3 7 7 4.6

Percentage of high-risk plant

pests for which early detection

surveys are conducted

96 96 96 95 96

Annual Measure

update provided

in APPR

Number of hours it takes to

mobilize resources once it is

determined that a Federal

emergency response is needed

to manage an agricultural

outbreak (target of within 24

hours)

24 24 24 24 24

Annual Measure

update provided

in APPR

Recover 83 percent of graders’

time through customer billings

(meat livestock)

New in

FY 2020

New in

FY 2020

93 83 83 93

Recover 83 percent of graders’

time through customer billings

(poultry livestock)

New in

FY 2020

New in

FY 2020

95 83 83 94

FY = fiscal year; Q = quarter.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report (APPR), to be published in February 2022, will show the final

FY 2021 results.

USDA | 2021 Agency Financial Report 17

Strategic Goal 3:

Promote American Agricultural Products and Exports

Expanding international marketing opportunities

for U.S. farmers and exporters is critical to

business and income growth across rural America.

It is essential for USDA to continue its efforts to

expand American agricultural products and

exports through promotion activities, development

of international standards, removal of trade

barriers by monitoring and enforcing existing

trade agreements, and negotiation of new trade

agreements that benefit the U.S. agricultural

economy. USDA will also partner with

developing countries to support them along the

agricultural market continuum from developing

economies to developed economies with

promising demand potential. Ultimately, this work

builds foundations for future markets and creates

long-term international relationships that further

advance U.S. agriculture’s exports.

Performance Summary

• USDA has engaged with global trading partners to open and retain markets for U.S.

agriculture. The marquee accomplishment is the successful negotiations of the Phase One

agreement with China that provides U.S. agriculture market access valued at more than

$3.5 billion. The agreement also improves to procedures for registering and maintaining a list

of facilities for numerous products, including dairy, valued at $275 million.

• USDA’s Foreign Agricultural Service (FAS) defended U.S. interests against Peru’s anti-

dumping and countervailing duty actions against U.S. corn, preserving a market valued at

$500 million.

• Renegotiated a dairy certificate with Japan following changes to Japan’s domestic

regulations, preserving a market valued at nearly $300 million. Persuaded Japan to limit

restrictions on U.S. corn following a maximum residue level (MRL) detection, retaining

access for $200 million in non-genetically modified varieties that would not have been

treated with the identified chemical.

• Protected a continuation of the current accreditation for pork and beef exports to the

Philippines following that government’s announcement proposing changes to the terms of the

STRATEGIC OBJECTIVES

Objective 3.1

Expand International Marketing

Opportunities

Objective 3.2

Prevent or Resolve Barriers to Trade

That Hinder U.S. Food and Agricultural

Exports

Objective 3.3

Build Demand in Developing

Countries Through Trade Capacity

Building

18 Section I | Management’s Discussion and Analysis

access agreement that would have effectively closed the market to nearly $200 million in

U.S. beef and pork exports

• Secured Ecuador’s tariff exemption extension for wheat and soybean meal imports for

5 years, preserving competitive access for nearly $200 million in wheat and soybean meal.

• Negotiated an agreement with South Korea guaranteeing market access for more than

$100 million in annual U.S. rice exports.

• Collaborated with the Office of the U.S. Trade Representative, U.S. industry, and other

trading partners to persuade Saudi Arabia to withdraw non-science-based proposed

regulations setting extremely low limits on the amount of added sugar in all processed food

and beverages, preserving a market valued at $100 million.

• Facilitated a Washington State-based solution to a requirement by India for certification that

apples are free of Genetically Modified materials, preserving a market valued at more than

$50 million.

• Preserved access for organics products exported to Mexico valued at $190 million when the

COVID-19 pandemic delayed equivalence audits and disrupted completion of an equivalence

agreement.

• Responding to the COVID-19 global pandemic, USDA’s FAS developed and executed six

virtual trade events with $19.75 million in projected 12-month sales

Exhibit 3: Strategic Goal 3 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results

as of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Value of agricultural exports resulting

from participation in foreign

agricultural trade shows and trade

missions (Billions)

2.13 2.20 1.16 1.75 2.13 1.15

Value of trade preserved through the

resolution of foreign market access

issues such as U.S. export detainment,

restrictive SPS & TBT issues, and trade

regulations (Billions)

12.8 2.5 7.7 5.5 6 5.89

FY = fiscal year; Q = quarter; SPS =Sanitation Performance Standard; TBT = Technical Barrier to Trade.

Notes: Preliminary status is based on progress toward KPI at the time of publication. The USDA Annual

Performance Plan and Report, to be published in February 2022, will show the final FY 2021 results.

USDA | 2021 Agency Financial Report 19

Strategic Goal 4:

Facilitate Rural Prosperity and Economic Development

USDA promotes rural prosperity and economic

development by financing investments in rural

utilities, housing, and businesses. When rural

Americans share the same level of infrastructure

services as the country’s urban areas, rural

communities can make even greater economic

contributions with healthy businesses and

families. With this aim in mind, USDA will

leverage funds, stimulate public-private

partnerships, and collaborate to build rural

infrastructure, including broadband, community

facilities, safe and affordable housing, and health

services and facilities. It will also provide capacity building to help underserved communities

become thriving communities.

STRATEGIC OBJECTIVE

Objective 4.1

To expand rural business opportunity

and rural quality of life with access to

capital; improve infrastructure,

broadband access and connectivity;

and support workforce availability.

Performance Summary

• Rural Community Facilities and Essential Services: During 2021, USDA’s Rural

Development (RD) mission area invested more than $674 million through 1200 projects

benefiting more than 6 million rural residents across the United States and Territories

through the Community Facilities (CF) Direct Loan and Grant Program. CF programs

provide loans, grants, and guarantees to help rural communities build or improve essential

community facilities and community infrastructure.

The investments include $344 million to support health-care-related improvements and

emergency response services that will benefit more than 3 million rural residents across the

United States and Territories. More than five hundred awards totaling $51 million will help

communities with their long-term recovery efforts following natural disasters such as

hurricanes, floods, and tornadoes.

• Rural Water and Wastewater Infrastructure Improvements: RD is investing

$979 million to modernize rural drinking water and wastewater infrastructures across the

United States and Territories. The investments will help eliminate outdated pipes and service

lines to safeguard public health and safety in rural communities. They will improve rural

infrastructure for residents and businesses.

• Mission Delivered Under COVID-19: Despite challenges from 100 percent telework during

the past year, RD staff learned to use existing technology for improved communication,

pivoted to online outreach, facilitated webinars in place of in-person meetings, and continued

to obligate funds. RD has processed more than 99,000 loan servicing requests and continues to

20 Section I | Management’s Discussion and Analysis

consult the borrowers in good faith to alleviate defaults. The Innovation Center’s Data

Analytics Division created the COVID-19 Economic Risk Assessment as part of the RD’s

data-driven approach to identify how RD resources and services can provide immediate relief

to communities affected by the pandemic and support economic recovery in rural America.

This dashboard enabled RD leadership to be more proactive and reach out to customers in

vulnerable communities enabling a timelier response to the needs of rural communities.

Finally, RD invested close to $8 billion in distressed rural communities during a pandemic.

• Resource Guide to Help America’s Workforce: In 2021, RD launched a resource guide to

help rebuild and strengthen America’s rural workforce. The resource guide is designed to

help rural community leaders start and expand employment opportunities and access

resources to train, recruit, and create a sustainable rural workforce. It outlines programs and

services available at USDA and other Federal agencies that support workforce development

in rural communities.

• Rural Innovation Stronger Economy (RISE): Rural Business-Cooperative Services

launched a new grant program to help rural communities create good-paying jobs and

support new business opportunities in high-growth fields. The new grant promotes a regional

innovation-driven approach to economic development through maximizing local community

assets and connecting networks and industry clusters. RISE provides grants of up to

$2 million to consortiums of local governments, investors, industries, institutions of higher

education, and other public and private entities in rural areas. The funds may be used to form

Job Accelerator partnerships, create high-wage jobs, start or expand businesses, and support

economic growth in the rural areas of their region.

• Modernizing Rural Electric Infrastructure: Through the Electric Loan Program, Rural

Development invested more than $1.2 billion to improve and modernize rural electric

infrastructure after severe weather and age tested the grid. This funding will benefit rural

residents and businesses in Alaska, Arizona, Arkansas, Georgia, Illinois, Indiana, Kentucky,

Minnesota, Missouri, New Mexico, New York, North Dakota, Ohio, Oklahoma, South

Carolina, South Dakota, Washington, and Virginia. Several of the loans will help expand

smart grid technologies, which can be a catalyst for broadband and other telecommunication

services in unserved and underserved rural areas.

• Interagency Agreement to Coordinate Broadband Funding: USDA, the Federal

Communications Commission (FCC), and the National Telecommunications and Information

Administration (NTIA) have established an interagency agreement to share information

about and coordinate the distribution of broadband and deployment of Federal funds.

USDA | 2021 Agency Financial Report 21

Exhibit 4: Strategic Goal 4 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21

Results as

of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Health Facilities: Percent of customers

who are provided access to new and/or

improved essential community facilities

9.4 2.5 5.1 3.0 3.0 6.7

Number of borrowers’ subscribers

receiving new and/or improved

telecommunication services (Thousand)

45 69 131 162 162 42.2

Percent of RD commercial/

infrastructure investments that

leverage non-Federal funding

77 83 62 80 80 86

Percent of RD assistance that went to

distressed communities

11 11 12.5 14 14 12.2

FY = fiscal year; Q = quarter; RD =Rural Development.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report, to be published in February 2022, will show the final FY 2021 results.

22 Section I | Management’s Discussion and Analysis

Strategic Goal 5:

Strengthen the Stewardship of Private Lands Through

Technology and Research

The world population is expected to reach 9.6 billion

by 2050. Feeding this population will require the

adoption of new science and technologies and the

implementation of science-based conservation plans

to increase agricultural production sustainability.

To ensure U.S. private working lands and public

agricultural landscapes are conserved, the Department

will provide technical and financial assistance using

the latest technology and research available. New and

improved practices result from fundamental and

applied research to understand the complex

interactions between human systems and the

environment and transferring the resulting knowledge

into the hands of producers and land managers

through information, tools, and decision support.

STRATEGIC OBJECTIVES

Objective 5.1

Enhance Conservation Planning with

Science-Based Tools and Information

Objective 5.2

Promote Productive Working Lands

Objective 5.3

Enhance Productive Agricultural

Landscapes

Performance Summary

• Conservation Technical Assistance (CTA) Program: The CTA program is the backbone

of the Natural Resources Conservation Service’s (NRCS) conservation delivery system.

Many customers begin their relationship with NRCS through requests for assistance that later

evolve into a conservation plan that may include cost-share assistance through mandatory

programs. At the end of the third quarter (Q3) for FY 2021, approximately 102,000

Conservation Assessment Ranking Tool (CART) assessments and more than 121,000 ranked

assessments were completed, evaluating nearly 11 million resource concerns on more than

744,000 land units (53 million program acres).

• Environmental Quality Incentives Program (EQIP): EQIP conducted outreach activities

and published program information including: announcement of application cut-off dates,

evaluation and ranking of applications, and selections for funding. By the end Q3 for

FY 2021, 86,949 total applications and 21,796 contracts had been submitted in the system for

$704,821,350 on 6,346,359 acres.

• Agricultural Conservation Easement Program (ACEP): ACEP consists of two

components: (1) an agricultural land easement (ALE) component under which NRCS assists

eligible entities to protect agricultural land by limiting non-agricultural uses of that land

through the purchase of agricultural land easements; and (2) a wetland reserve easement

(WRE) component under which NRCS provides financial and technical assistance directly to

USDA | 2021 Agency Financial Report 23

landowners to restore, protect, and enhance wetlands through the purchase of wetlands

reserve easements. Through the ALE component, ACEP helps farmers and ranchers keep

their land in agriculture. In Q3 (April 1 to June 30, 2021) of FY 2021, NRCS reviewed and

closed 39 new WRE easements. ACEP-WRE provides technical and financial assistance

directly to private landowners and Indian Tribes to restore, protect, and enhance wetlands

through the purchase of wetland easements. WRE enrollment options include permanent

easements, 30-year easements, term easements, and 30-year contracts (for acreage owned by

an Indian Tribe). As of Q3 of FY 2021, NRCS closed on 140 new WRE easements.

This number is the cumulative WRE easements that were closed in FY 2021

• Regional Conservation Partnership Program (RCPP): RCPP promotes the

implementation of conservation activities through agreements between partners and

producers. RCPP, through agreements with partners and conservation programs, contracts

directly with producers, helps implement conservation projects that may focus on water

quality and quantity, soil erosion, wildlife habitat, drought mitigation, flood control, or other

regional priorities. Successful RCPP projects provide innovative conservation solutions,

leverage partner contributions, offer impactful and measurable outcomes, and are

implemented by capable partners. In Q3, there are currently 68 active Farm Bill 2018 RCPP

projects with a combined budget of more than $270 million that will be further amplified by

more than $350 million in partner contributions. Another 106 awards, whose combined

budgets exceed $400 million, are currently being negotiated by NRCS State Offices.

o RCPP is an ideal mechanism for helping Native American Nations address challenging

resource concerns while improving agricultural output on their reservations. Two such

success stories were recently highlighted on farmers.gov.

▪ The Hoonah Native Forest Partnership helps protect, conserve, and maintain stream

and forest habitats integral to the Hoonah way of life.

▪ The Duck Valley Shoshone-Paiute Tribes were the first Native American Tribes in

the Nation to receive an RCPP contract. They plan to create a more efficient irrigation

system while still providing the water needed by cattle every summer by replacing

ditches, repairing rusted pipes, and adding 25 nose pumps and solar livestock

watering systems. This plan will increase the number of acres under production from

12,600 acres to more than 21,000 acres.

• Conservation Reserve Program (CRP): CRP is a land conservation program administered

by the Farm Service Agency. In exchange for a yearly rental payment, farmers enrolled in the

program agree to remove environmentally sensitive land from agricultural production and

plant species to improve environmental health and quality. Contracts for land enrolled in CRP

are 10–15 years in length. The program’s long-term goal is to re-establish valuable land cover

to help improve water quality, prevent soil erosion, and reduce the loss of wildlife habitat.

o The 2018 Farm Bill extended enrollment authority to September 30, 2023, and

incrementally increased overall enrollment caps from 24 million acres in FY 2019,

24 Section I | Management’s Discussion and Analysis

24.5 million acres in FY 2020, 25 million acres in FY 2021, 25.5 million acres in

FY 2022, and 27 million acres in FY 2023. Changes to incentives and rental rates have

been made to encourage increased enrollment.

o FSA administratively removed state acreage allocation caps for buffers and wetlands

enrollment, allowing additional acres to be enrolled.

o FSA increased outreach and partner collaboration to encourage enrollment and highlight

improvements to the program.

Exhibit 5: Strategic Goal 5 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results as of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Acreage enrolled in CRP riparian

and grass buffers (Cumulative,

Million Acres)

1.53 1.43 1.36 1.46 1.56 1.42

Cropland with conservation

applied to improve soil quality

(Million Acres)—Environmental

Quality Incentives Program (EQIP)

3.1 3.4 3.9 3.4 3.4

Annual Measure update

provided in APPR

Cropland with conservation

applied to improve soil quality

(Million Acres)—Conservation

Technical Assistance (CTA)

6.0 5.7 6.4 6.0 6.0

Annual Measure update

provided in APPR

Tons of sediment prevented from

leaving cropland and entering

water bodies (Million Tons)

5.3 6.3 8.2 6.0 6.0

Annual Measure update

provided in APPR

Working land protected by

conservation easements

(Thousand Acres)

163 178 167 163 163

Annual Measure update

provided in APPR

Contract Implementation Ratio

(CIR, %)

87 87 87 87 87

Annual Measure update

provided in APPR

Annual Practice Implementation

Rate (PIR, %)

51 55 43 52 52

Annual Measure update

provided in APPR

Restored wetland acreage CRP

(Million Acres)

2.30 2.34 2.35 2.34 2.64 2.36

CRP = Conservation Reserve Program; FY = fiscal year; Q = quarter.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report (APPR), to be published in February 2022, will show the final

FY 2021 results.

USDA | 2021 Agency Financial Report 25

Strategic Goal 6:

Ensure Productive and Sustainable Use of the National Forest

System Lands

The Nation’s forests and grasslands are a

fundamental part of the American landscape and

are a legacy that the USDA Forest Service holds

in trust for present and future generations. Forests

provide clean air and water, forest and rangeland

products, mineral and energy resources, jobs,

quality habitat for fish and wildlife, recreational

opportunities, and memorable experiences.

The National Forest Service (NFS) plays a critical

role in making America’s forests and grasslands

resilient to threats and disturbances while

mitigating wildfire risk. The Department also

manages the national forests and grasslands to

ensure that they are healthy and sustainable while

allowing rural communities to access and benefit

from the Nation’s forests’ economic

opportunities. This work is complemented with

USDA’s research in forestry, ecology, and

economics to ensure world-class science guides effective policies and management practices.

STRATEGIC OBJECTIVES

Objective 6.1

Contribute to the Economic Health of

Rural Communities Through Use and

Access Opportunities

Objective 6.2

Ensure Lands and Watersheds Are

Sustainable, Healthy, and Productive

Objective 6.3

Mitigate Wildfire Risk

Performance Summary

• Forest Innovation: Forest Products Laboratory, in collaboration with the U.S. Endowment

for Forests and Communities (U.S. Endowment), is awarding $2.4 million in grants to

accelerate the use of nanocellulosic materials (CNM) for use in a wide range of applications.

The goal is to develop sustainable and environmentally friendly forest products that can be

used in a variety of industries and commercial goods, including those where forest products

have not always been considered a material of choice.

• Investment in New Technologies and Markets: USDA Forest Service State and Private

Forestry awarded more than $11 million in funds through the Wood Innovations Program

and Community Wood grant programs to develop and expand the use of wood products and

strengthen emerging wood energy markets.

• Community Forest Grants: Forest Service Community Forest Program awards for FY 2021

include $4 million to support 10 projects across nine states (Iowa, Maine, Michigan, New

York, New Hampshire, Vermont, Washington, West Virginia, and Wisconsin). This year’s

grants include financial assistance to local governments and qualified nonprofit organizations

26 Section I | Management’s Discussion and Analysis

to create, expand, and enhance community-owned and community-managed forests. Project

work will help communities acquire and conserve forests that provide public access and

recreational opportunities, protect vital water supplies and wildlife habitat, serve as

demonstration sites for private forest landowners, and provide economic benefits from timber

and non-timber products.

• Visitor Satisfaction in National Forests: Visitor satisfaction is expected to be rated at

95 percent, even with an increase in demand at the forests during the Covid-19 Pandemic.

Satisfaction of visitors is attributed to the continued efforts to provide access to quality

landscapes, offer a variety of recreation opportunities and settings, and maintain recreation

facilities to acceptable standards. (This measure is not reported by quarter; the Forest Service

will provide a final FY 2021 value at the end of the fiscal year.)

• Timber Sales: Recovery efforts after large fires, including stabilization work and hazard tree

removal, necessitates the involvement of staff who would typically work on preparing and

administering timber sales. As a result, Forest Service worked with industry to re-organize

salvage and green sales in 2021 in an effort to keep from flooding the timber markets.

Work continues to be challenged by the COVID-19 pandemic. The field crews must work

within tight restrictions, hiring is limited, and travel is restricted to only mission-critical work

to various locations. The Chief of the Forest Service issued a letter requesting resources be

released to be engaged in the wildfire system, which operates for the Nation’s forests

and grasslands.

• Wildfire Activity: Increased wildfire activity in the Western States has shifted regional

resources to suppression activities, reducing opportunities for prescribed fire. Regions

continue to take advantage of favorable burning conditions where possible while providing

for public and firefighter safety.

• Drought Conditions: In the west, the continued drought coupled with hot, dry weather has

increased wildfire activity, which increases the need for suppression resources and pausing

prescribed burning until conditions are favorable. Regions have switched to contracting

mechanical and hand treatments to reduce hazardous fuels. Drought conditions and hot, dry

weather slow this progress as operators are restricted to working in the morning and

conducting fire patrol of the work area in the afternoon as an added safety precaution.

Monsoonal moisture has been moving into the Southwest, increasing the chance of resuming

prescribed burning later in the year.

• Deferred Maintenance: USDA Forest Service National Forest system (NFS), Procurement

and Property Services (PPS) and the Office of Grants and Agreements (OG&A) efforts lead

to awarding more than $200 million in funds through the Great American Outdoors Act

(GAOA) to deliver benefits to the American public by increasing public land access and

conservation. The funding provided through GAOA will be a catalyst for rural economic

development and employment opportunities. GAOA will also expand public-private

partnerships and become part of the Shared Stewardship framework.

USDA | 2021 Agency Financial Report 27

Exhibit 6: Strategic Goal 6 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results as

of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Percent of customers satisfied with

recreation facilities, services, and

settings in National Forests

95 95 95 95 95

Annual Measure

update provided

in APPR

Timber volume sold (Billion Board

Feet)

3.2 3.3 3.2 4.0 3.4 1.58

Percent of NFS landscape

ecosystems improved, maintained,

or recovering due to management

actions, Terrestrial Condition

Assessment (TCA)

New in

FY 2021

New in

FY 2021

- 42 32

Annual Measure

update provided

in APPR

Number of watersheds moved to

improved condition class or

sustained in Condition Class 1

2

16 8 9 N/A 15 N/A

Annual acreage of NFS lands where

final treatment effectively mitigates

wildfire risk (Million Acres,

Annually)

1.0 .9 .8 1.1 1.4 .938

Annual acreage treated to reduce

or maintain fuel conditions on NFS

and non-Federal lands (Million

Acres, Annually)

3.4 2.9 2.7 3.5 3.7 2.16

Number of high priority areas

where treatments have occurred to

reduce wildfire risk to communities

(number of fire sheds)

3

N/A N/A N/A N/A 3 N/A

FY =fiscal year; N/A = not available; NFS = National Forest Service; Q = quarter.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report (APPR), to be published in February 2022, will show the final

FY 2021 results.

2

Watershed KPI was developed in 2010 as the agency’s first nationally consistent outcome performance

measure to demonstrate accomplishments in watershed restoration. KPI is new for FY 22. For FY 2021,

watershed restoration was not an agency priority and no target was established.

3

Fireshed is a term similar to watershed. It refers to a geographic region with a similar risk of wildfire to

adjacent communities. Reducing hazardous fuels within parts of the fireshed may reduce the overall risk

to the adjacent community. Number of fire sheds is a new KPI to move to outcome-based measures on

reducing wildfire risk at a scale that will make a difference on transmission of wildfire to communities.

28 Section I | Management’s Discussion and Analysis

Strategic Goal 7:

Provide All Americans Access to a Safe, Nutritious, and Secure

Food Supply

USDA has critical roles in preventing foodborne

illness and protecting public health while also

ensuring Americans have access to food, a

healthful diet, and nutrition education in a manner

that supports American agriculture and inspires

public confidence. The Department will take

several actions to achieve this goal. First, to

ensure the food supply is safe, the Department

will continue to prevent contamination and limit

foodborne illness by expanding its modernization

of food inspection systems. USDA’s research,

education, and extension programs will continue

to provide information, tools, and technologies

about the causes of foodborne illness and its

prevention. Second, USDA will continue to

develop partnerships that support best practices in

implementing effective programs to ensure that

eligible populations have access to programs that

support their food needs. These collaborations

include research on the nutritional quality of

American food and diets, as well as continuing to

discover the drivers of poor diets and nutritional

choices. Lastly, USDA will collaborate with partners and stakeholders on strategies to reduce

foodborne illness and childhood obesity and improve diets. USDA ensures agriculture

production incorporates the best available science into its modernization efforts to produce safer,

more nutritious, and secure food.

STRATEGIC OBJECTIVES

Objective 7.1

Prevent Foodborne Illness and Protect

Public Health

Objective 7.2

Provide Access to Safe and Nutritious

Food for Low-Income People While

Supporting a Pathway to Self-

Sufficiency

Objective 7.3

Support and Encourage Healthy

Dietary Choices Through Data-Driven,

Flexible, Customer-Focused

Approaches

Performance Summary

• Meat and Poultry Inspection Operations: In an effort to increase capacity and expand

access in the Meat and Poultry Inspection Operations, $55.2 million in competitive grant

funding was available through the new Meat and Poultry Inspection Readiness Grant (MPIRG)

program. The new program is funded by the Consolidated Appropriations Act of 2021.

• Pathogen Reduction Standards: The Food Safety and Inspection Service (FSIS) continued

to send alerts to establishments with increasing Salmonella levels and assessed subsequent

data to determine compliance with the performance standard. For establishments that do not

USDA | 2021 Agency Financial Report 29

meet the performance standard, FSIS continues to provide Inspection Program Personnel

(IPP) with alerts that summarize recent sampling results to provide information on whether

subsequent establishment pathogen results are improving.

• Resources for our Customers: The Food and Nutrition Service (FNS) Office of Food

Safety, in cooperation with the Institute of Child Nutrition (ICN), released several COVID-

19 resources: The Food Safety COVID Tip Card Series, Food Safety During Alternate Meal

Services fact sheet, and Keeping School Meals Safe at Home infographic.

• Nutrition Benefits for Low-Income Families. As directed by the 2018 Farm Bill, for the

first time in more than 15 years, USDA re-evaluated the Thrifty Food Plan (TFP) based on

current food prices, consumption data, the nutrients in food, and the latest dietary guidance.

The updated TFP reflects the price of a practical, cost-effective, nutritious diet in today’s

current conditions and is used to calculate benefits for SNAP recipients. The updated Plan

better represents the practical cost of a nutritious diet for low-income households in today’s

current circumstances. Adjusting benefits to reflect the practical impacts of current economic

and marketplace considerations will improve SNAP participants’ ability to provide a

nutritious, cost-effective diet for themselves and their families. Average SNAP benefits –

excluding additional funds provided as part of pandemic relief – will increase by about

$36 per person, per month for fiscal year 2022. This reflects a 21% increase in the value of

the Thrifty Food Plan.

• Support for Children in Schools and Child Care: In support of President Biden’s call to

action on hunger and with authorities provided by Congress, in January 2021, USDA

announced an increase in benefits for the Pandemic Electronic Benefits Transfer (P-EBT) of

approximately 15 percent, providing more money for low-income families and millions of

children missing meals due to school closures. As of mid-September 2021, FNS approved

school year 2020-2021 plans for school age children in all eligible states and territories and

49- State childcare plans to provide more than $30.6 billion in P-EBT benefits to 33.8 million

children. In addition, FNS approved 47 Summer 2021 plans to provide $12.6 billion in

P-EBT benefits to 33.2 million children.

• Supplemental Nutrition Assistance Program (SNAP):

o Implemented the American Rescue Plan provision to extend the 15 percent increase in

the maximum benefit through September 2021, and

o Extended Emergency Allotment benefits to increase benefits to the neediest households

who had not received Emergency Allotment payments and those whose payments were

less than $95 per month.

o Provided hundreds of adjustments and flexibilities requested by States to ensure access

to nutrition benefits during the pandemic.

o Expanded online purchasing by approving additional retailers to offer this service in

47 States and the District of Columbia, covering 97 percent of SNAP households.

30 Section I | Management’s Discussion and Analysis

o Released an updated and revised SNAP Employment & Training Toolkit. This version, the

first major revision since 2013, includes, among other things, the changes made by the final

rule published in January 2021, such as the newly allowable skills-based activities.

o Issued a request for proposals for up to five nonprofit organizations to build functionality

and provide assistance to farmers and markets to accept SNAP benefits through online

transactions.

o Issued guidance encouraging States to focus FY 2022 State outreach plans on vulnerable

food insecure populations such as students, veterans, and non-citizen households.

o Provided SNAP State agencies with additional State administrative expense funds to

support pandemic response as provided for by the Consolidated Appropriations Act and

the American Rescue Plan.

• Support for Food Banks: USDA’s FNS provided approximately $1 billion to States to order

nutritious, domestically produced food to support food banks through The Emergency Food

Assistance Program (TEFAP), using regular TEFAP entitlement and COVID supplemental

funding.

o In partnership with the Agricultural Marketing Service (AMS), FNS was able to offer for

the first time a pre-packaged mixed fresh produce box in the TEFAP catalog for TEFAP

State agencies to order. Deliveries began in June 2021.

• Support for Mothers and Children: The American Rescue Plan provided an option for the

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) State

agencies to temporarily increase the Cash-Value Voucher/Benefit (CVV/B) for Fruit and

Vegetable Purchases. Specific WIC food packages were increased to an amount that was less

than or equal to $35 per month for a period of up to 4 months in FY 2021.

• Supporting Tribal Food Sovereignty: Under new demonstration projects, Indian Tribal

Organizations (ITOs) in the Food Distribution Program on Indian Reservations (FDPIR) may

purchase agricultural commodities for their FDPIR participants. The project allows selected

ITOs to supplant FDPIR food package items with local, regional, and/or tribal foods of their

choosing that have similar or higher nutritional value. Funding for the project was made

available via self-determination contracts, thereby fostering food sovereignty and self-

determination in the FDPIR sphere.

• Support for Territories. As part of the pandemic response, FNS provided targeted technical

assistance to support nutrition assistance in Puerto Rico, American Samoa, and the

Commonwealth of the Northern Mariana Islands. These Territories utilized more than

$1 billion in funds provided through the American Rescue Plan and other COVID relief bills

to enhance benefit allotments to low-income households and modernize benefit delivery

methods from paper coupon to EBT. In addition, with FNS support, they developed and

administered their own P-EBT Plans to cover meals missed by school-aged children.

USDA | 2021 Agency Financial Report 31

• Nutrition Guidance for All Americans: On December 29, 2020, USDA, in partnership with

the U.S. Department of Health and Human Services (HHS), released the Dietary Guidelines

for Americans, 2020–2025 after a multi-year process involving an external, independent

review of current science by the 2020 Dietary Guidelines Advisory Committee and four

phases of public comment during a 15-month period. This new edition of the DGA marks the

first time the Dietary Guidelines have provided recommendations by every life stage, from

birth through older adulthood.

Concurrently with the release of the Dietary Guidelines, the Center for Nutrition Policy and

Promotion (CNPP) released a robust, consumer-tested suite of consumer resources that

translate guidance from the new Dietary Guidelines into messages and actionable tools that

people can personalize to help them make healthy food and beverage choices. The tools

include an online consumer quiz that can be synced with the Start Simple with MyPlate

consumer app and updated consumer MyPlate Plan calculator, as well as a wide variety of

content, tip sheets, and recipes at the newly designed MyPlate.gov. As of April 2021, the

consumer quiz had been completed approximately 500,000 times, there were more than

166,000 net downloads of the consumer app, the MyPlate Plan calculator had been used

nearly 6 million times, and MyPlate.gov had more than 27 million pageviews.

• Support for Students and Schools: Facing continued uncertainty, FNS issued numerous

nationwide waivers, State waivers, and related guidance documents providing child nutrition

program (CNP) operators the flexibility needed to continue providing nutritious meals to

children in a safe manner during the COVID-19 public health emergency for the 2020–2021

school year, summer 2021, and in preparation for the 2021–2022 school year. These waivers

included:

o Allowing schools to operate the Summer Food Service Program (SFSP) or National School

Lunch Program (NSLP) Seamless Summer Option for the 2020–2021 school year (in place

of the NSLP/School Breakfast Program) and the Seamless Summer Option for the 2021–

2022 school year, providing flexibility in program requirements and increased resources for

school meals;

o Extending the deadlines for schools to elect the Community Eligibility Provision (CEP).

CEP is a highly successful option that allows schools with a significant share of very

low-income students to serve school meals at no cost to all students; and

o Approving 63 State CNP oversight waivers, which provide flexibility to States and local

CNP operators during the pandemic while maintaining program integrity.

In addition, USDA took steps to help alleviate supply chain concerns for schools offering

schools flexibilities such as:

• Allowing operators to enter into emergency noncompetitive one-year procurement contracts

for school year 2021-2022.

32 Section I | Management’s Discussion and Analysis

• Waiver to Allow Specific School Meal Pattern Flexibility for School Year 2021-2022, which

allows flexibility in the meal standards and makes it easier for school lunch staff to prepare

meals when there are shortages of certain food items.

• Ensuring schools are not penalized for any meal pattern shortcomings that occur as a result of

supply chain issues.

• Allowing for higher reimbursement rates to make contracting easier when needing to resort

to emergency procurement options.

USDA understands it has been a challenging time for food distribution companies that serve

schools as they face obstacles including labor shortages and transportation difficulties. USDA

worked across the federal government to help ease pressures on our food supply chain and build

back better.

• As of early September, through a cooperative agreement between CNP Team Nutrition and

the Institute of Child Nutrition (ICN), the ICN conducted 316 training opportunities in

various formats, reaching over 21,150 CNP operators, administrators, and stakeholders.

Altogether, in FY 2021, CNP-Team Nutrition and the ICN conducted a combined total of

333 training events in various formats, reaching nearly 39,200 CNP operators,

administrators, and stakeholders. FNS also released several key resources and training

opportunities to support Child and Adult Care Food Program (CACFP) and school meal

pattern implementation, as well as the provision of safe and flexible meal service during the

COVID-19 pandemic.

• To address financial losses experienced during the COVID-19 public health emergency, FNS

implemented the CNP Emergency Operational Cost Reimbursement Programs as of July 2,

2021 approving 80 State/tribal/territory plans to provide nearly $1.3 billion in resources to

school meal and CACFP operators.

• Connecting the School and Farm: FY 2021 included a historic level of Farm to School

Grants of $12.1 million to 159 organizations and more than 120 grant modification and

extension requests processed to support COVID-related adaptations to Farm to School

projects. This was part of providing more than $100 million in grant funding to States and

local entities supporting CNP program operations with technology investments, school

equipment, breakfast expansion, and recipe development.

USDA | 2021 Agency Financial Report 33

Exhibit 7: Strategic Goal 7 Key Performance Indicators (KPI)

KPI

Historic Actuals Strategic Targets

FY 21 Results as

of Q3

FY 18 FY 19 FY 20 FY 21 FY 22

Percentage of establishments that meet

pathogen reduction performance

standards

71 84 86 88 88 86

Percentage of establishments whose

Public Health Regulation (PHR)

noncompliance rate decreases below the

early warning cut point 120 days after

receiving an Early Warning Alert (EWA)

74 74 74 74 74 74

Percentage of American households with

consistent, dependable access to food 88.9 89.5 N/A 89.2 89

Annual Measure

update provided

in APPR

Percentage of Supplemental Nutrition

Assistance Program (SNAP) Employment

& Training participants engaged in

education and skills-based training

25.2 34.7 38.4 31.5 31.5

Annual Measure

update provided

in APPR

Annual percentage of eligible children

participating in the National School

Lunch Program (NSLP)

58 57 43 59 59

Annual Measure

update provided

in APPR

Annual percentage of eligible children

participating in the School Breakfast

Program (SBP)

30 30 24 31 31

Annual Measure

update provided

in APPR

FY = fiscal year; N/A = not available; Q =quarter.

Notes: Preliminary status is based on progress toward KPI as of the third quarter. The USDA Annual

Performance Plan and Report (APPR), to be published in February 2022, will show the final

FY 2021 results.

34 Section I | Management’s Discussion and Analysis

Future Demands, Risks, Uncertainties,

Events, Conditions, and Trends

Farmers and ranchers operate in highly competitive markets, both domestically and

internationally. Rapid shifts in consumer demands associated with quality, convenience, taste,

and nutrition dictate that farming, ranching, and marketing infrastructures become more fluid and

responsive. National security is a significant, ongoing priority for the U.S. Department of

Agriculture (USDA or the Department). The Department’s science research, education, and

extension services will continue to be the foundation for understanding developments and

making advances in solving agricultural and societal challenges. USDA is working with the U.S.

Department of Homeland Security to help protect agriculture from intentional and accidental acts

that may impact America’s food supply or natural resources.

External Factors that Challenge USDA’s Ability to Achieve its

Goals Include the Following:

• The COVID-19 public health emergency presented workplace complications such as

ensuring employee safety, hiring challenges, and remote work for staff both domestically and

internationally;

• Record-breaking wildfires and other weather-related hardships, including disasters related to

the increasing intensity and duration of extreme weather and climate change, both

domestically and internationally;

• The risk of catastrophic fire, depending on weather, drought conditions, and the expanding

number of communities in the wildland-urban interface;

• Non-weather-related hardships and other uncontrollable events, both domestically and

internationally;

• Domestic and international macroeconomic factors, including consumer purchasing power,

the strength of the U.S. dollar, and political changes abroad that could impact domestic and

global markets significantly at any time;

• Sharp fluctuations in farm prices, interest rates, and unemployment that could impact the

ability of farmers, other rural residents, communities, and businesses to qualify for credit and

manage debt;

• The impact of future economic conditions and actions by a variety of Federal, State, and

local governments that could influence the sustainability of rural infrastructure;

• The increased movement of people and goods, which provides the opportunity for crop and

animal pests and diseases to move quickly across domestic and international boundaries;

USDA | 2021 Agency Financial Report 35

• Potential exposure to hazardous substances, which may threaten human health as well as the

environment; and

• The ability of the public and private sectors to collaborate effectively on food safety,

security, and related emergency preparedness efforts.

Mitigation Strategies:

USDA has made great strides during fiscal year (FY) 2021 toward its mitigation strategies under

the auspices of its Enterprise Risk Management (ERM) program. Specifically, the Department

leads a large-scale effort across mission areas to identify the top 10 enterprise risks, risk drivers,

mitigation strategies, and key risk indicators. In FY 2022, USDA will update the department-

wide risk profile, including risk drivers and risk mitigation strategies. USDA will continue to

advance the strategies in FY 2022, with periodic updates to the Deputy Secretary during

Quarterly Strategic Reviews.

36 Section I | Management’s Discussion and Analysis

Analysis of Financial Statements and

Stewardship Information

Consolidated Balance Sheets

Total Assets

Total assets for FY 2021 were $360,530 million, compared to $313,894 million for FY 2020, an

increase of $46,636 million, or 15 percent. The following exhibit presents FY 2021 total assets.

Exhibit 8: Total Assets ($ millions)

66%

31%

2% 1%

Fund Balance with Treasury - $237,610

Loans Receivable, Net - $113,450

Accounts Receivable, Net - $5,673

General Property, Plant and Equipment, Net - $2,588

Advances and Prepayments - $629

Cash and Other Monetary Assets - $298

Investments - $259

Inventory and Related Property, Net - $23

Direct Loan and Loan Guarantees, Net, is one of the largest assets on the USDA Balance Sheet.

RD offers both direct and guaranteed loan products for rural housing and rural business

infrastructure. These products represent 85 percent of the total Department loan programs. Loan

programs administered by FSA represent 13 percent of the total. FSA supports farmers who are

temporarily unable to obtain private, commercial credit. The remaining 2 percent represents

commodity loans and credit programs administered by the CCC. These loans are used to improve

economic stability and provide an adequate supply of agricultural commodities. CCC credit

programs provide international food assistance, expand international markets, and provide

domestic low cost financing to protect farm income and prices.

USDA | 2021 Agency Financial Report 37

The following exhibit presents significant changes in total assets.

Exhibit 9: Significant Changes in Total Assets ($ millions)

2021

$237,610

2021

$5,673

2020

$195,418

2020

$3,873

Fund Balance with Treasury Accounts Receivable, Net

Increase in Fund Balance with Treasury of $42,192 million mainly due to FNS supplemental

funding for COVID-19 of $40,606 million; Office of the Secretary supplemental funding for

COVID-19 of $5,634 million; RMA underwriting gain of $1,121 million; APHIS response to the

African Swine Fever (ASF) outbreak in the Dominican Republic and Haiti of $496 million, and

supplemental funding for COVID-19 of $402 million; CCC additional commodity purchases and

international food aid for COVID-19 of $800 million; FSA supplemental funding for COVID-19

of $1,927 million, pandemic assistance for producers of $1,309 million, farm loans of $780

million, Coronavirus Food Assistance for agricultural producers who continue to face market

disruptions and associated costs because of COVID-19 of ($15,328) million, and Wildfire and

Hurricane Indemnity of ($1,190) million.

Increase in Accounts Receivable, Net of $1,800 million mainly due to RMA higher reported

premiums for certain crops of $1,392 million; and Forest Service Great American Outdoors Act

of $250 million.

38 Section I | Management’s Discussion and Analysis

Total Liabilities

Total liabilities for FY 2021 were $184,077 million, compared to $196,854 million for FY 2020,

a decrease of $12,777 million, or 6 percent. The following exhibit presents FY 2021 total

liabilities.

Exhibit 10: Total Liabilities ($millions)

72%

13%

8%

5%

1%

Debt - $132,821

Other - $24,848

Insurance and Guarantee Program Liabilities - $14,226

Benefits Due and Payable - $8,580

Accounts Payable - $2,433

Federal Employee Benefits Payable - $1,376

Environmental and Disposal Liabilities - $258

Advances from Others and Deferred Revenue - $136

Loan Guarantee Liability - ($601)

Debt is the single largest liability on USDA’s balance sheet. It represents amounts owed

primarily to Treasury by CCC, FSA and RD. For RD, the debt primarily represents financing to

support electric and housing loan programs which represent 76 percent of the total debt.

For CCC, the debt primarily represents financing for price support, export credit guarantees,

disaster programs and loans related to farm storage facilities which represent 12 percent of the

total debt. For FSA, the debt primarily represents financing to support direct and guaranteed loan

programs, with the majority supporting operating, ownership, and emergency loans which

represent 12 percent of the total debt.

USDA | 2021 Agency Financial Report 39

The following exhibit presents significant changes in total liabilities.

Exhibit 11: Significant Changes in Total Liabilities ($ millions)

2021

$14,226

2021

$8,580

2021

$2,433

2021

($601)

2020

$7,703

2020

$13,330

2020

$3,842

2020

$1,329

Insurance and Guarantee

Program Liabilities

Benefits Due and Payable Accounts Payable Loan Guarantee Liability

Increase in Insurance and Guarantee Program Liabilities of $6,523 million mainly due to RMA

higher coverage amount, loss ratio, underwriting gain, and unearned premium.

Decrease in Benefits Due and Payable of $4,750 million mainly due to FNS State partners in

Child Nutrition (CN) and Supplemental Nutrition Assistance Program (SNAP) more fully

utilizing available resources.

Decrease in Accounts Payable of $1,409 million mainly due to FSA Coronavirus Food

Assistance with no new funding available.

Decrease in Loan Guarantee Liability of $1,930 million mainly due to RD reestimates.

40 Section I | Management’s Discussion and Analysis

Consolidated Statements of Net Cost

Net Cost of Operations

Net cost of operations for FY 2021 was $234,146 million, compared to $191,679 million for

FY 2020, an increase of $42,467 million, or 22 percent.

The following exhibit presents FY 2021 net cost of operations by mission area.

Exhibit 12: Net Cost of Operations by Mission Area ($millions)

70%

22%

3%

2%

1%

Food, Nutrition and Consumer Services - $163,189

Farm Production and Conservation - $50,353

Natural Resources and Environment - $7,510

Marketing and Regulatory Programs - $5,828

Rural Development - $1,227

Research, Education and Economics - $3,070

Staff Offices - $1,418

Food Safety - $1,108

Trade and Foreign Agricultural Affairs - $443

The following exhibit presents significant changes in net cost of operations.

Exhibit 13: Significant Changes in Net Cost of Operations ($ millions)

2021

$163,189

2021

$7,510

2021

$5,828

2021

$1,227

2020

$122,335

2020

$6,145

2020

$4,611

2020

$3,251

Food, Nutrition and Consumer

Services

Natural Resources and

Enviroment

Marketing and Regulatory

Programs

Rural Development

USDA | 2021 Agency Financial Report 41

Increase in Food, Nutrition and Consumer Services of $40,854 million mainly due to SNAP for

COVID-19.

Increase in Natural Resources and Environment of $1,365 million mainly due to the severe fire

season.

Increase in Marketing and Regulatory Programs of $1,217 million mainly due to COVID-19.

Decrease in Rural Development of $2,024 million mainly due to reestimates for Loan Grant

programs.

Combined Statements of Budgetary Resources

Budgetary Resources

USDA receives most of its funding from appropriations authorized by Congress and

administered by the U.S. Department of the Treasury. Total budgetary resources consist of the

balance at the beginning of the year, appropriations received during the year, spending authority

from offsetting collections, and other budgetary resources.

Total budgetary resources were $424,382 million for FY 2021 compared to $358,184 million in

FY 2020, an increase of $66,198 million, or 18 percent. The following exhibit presents FY 2021

total budgetary resources by mission area.

Exhibit 14: Total Budgetary Resources by Mission Area ($ millions)

63%

19%

9%

3%

2%

1%

Food Nutrition and Consumer Services - $267,520

Farm Production and Conservation - $80,746

Rural Development - $35,923

Natural Resources and Environment - $13,703

Marketing and Regulatory Programs - $10,612

Staff Offices - $8,281

Research, Education and Economics - $5,037

Food Safety - $1,586

Trade and Foreign Agricultural Affairs - $974

42 Section I | Management’s Discussion and Analysis

The following exhibit presents significant changes in total budgetary resources.

Exhibit 15: Significant Changes in Total Budgetary Resources ($ millions)

2021

$267,519

2021

$80,745

2021

$35,924

2021

$13,703

2021

$10,613

2021

$8,281

2020

$176,202

2020

$108,877

2020

$42,011

2020

$11,972

2020

$9,145

2020

$2,320

Food, Nutrition and

Consumer Services

Farm Production and

Conservation

Rural Development Natural Resources and

Environment

Marketing and

Regulatory Programs

Staff Offices

Increase in Food, Nutrition and Consumer Services of $91,317 million mainly due to SNAP.

Decrease in Farm Production and Conservation of $28,132 million mainly due to FSA

Coronavirus Food Assistance and CCC Agriculture Risk Coverage/Price Loss Coverage and

Trade Mitigation programs.

Decrease in Rural Development of $6,087 million mainly due to unobligated balance from prior

year budget authority.

Increase in Natural Resources and Environment of $1,731 million mainly due to the severe fire

season.

Increase in Marketing and Regulatory Programs of $1,468 million mainly due to APHIS

response to the ASF outbreak in the Dominican Republic and Haiti, supplemental funding for

COVID-19, and Agricultural Quarantine Inspection.

Increase in Staff Offices of $5,961 million mainly due to Office of the Secretary supplemental

funding for COVID-19.

USDA | 2021 Agency Financial Report 43

Net Outlays

Net Outlays were $235,218 million for FY 2021, compared to $184,248 million in FY 2020, an

increase of $50,970 million or 28 percent. The following exhibit presents FY 2021 net outlays by

mission area.

Exhibit 16: Net Outlays by Mission Area ($ millions)

71%

20%

3%

1%

Food Nutrition and Consumer Services - $166,558

Farm Production and Conservation - $47,509

Natural Resources and Environment - $7,874

Marketing and Regulatory Programs - $6,245

Research, Education and Economics - $3,137

Rural Development - $2,004

Food Safety - $1,070

Staff Offices - $416

Trade and Foreign Agricultural Affairs - $405

The following exhibit presents significant changes in net outlays by mission area.

Exhibit 17: Significant Changes in Net Outlays ($ millions)

2021

$166,558

2021

$7,874

2021

$6,245

2021

$2,004

2020

$114,219

2020

$5,850

2020

$5,017

2020

$6,427

Food, Nutrition and Consumer

Services

Natural Resources and

Environment

Marketing and Regulatory

Programs

Rural Development

Increase in Food Nutrition and Consumer Services of $52,339 million mainly due to SNAP and

CN for COVID-19.

44 Section I | Management’s Discussion and Analysis

Increase in Natural Resources and Environment of $2,024 million mainly due to the severe fire

season.

Increase in Marketing and Regulatory Programs of $1,228 million mainly due to Food Box

Distribution program and Section 32.

Decrease in Rural Development of $4,423 million mainly due to Rural Electric and Telephone

liquidating account and Rural Water and Waste program account.

COVID-19

USDA received $86,662 million of FY 2021 supplemental appropriations to prevent, prepare for,

or respond to COVID-19 (i.e., coronavirus disease 2019) through the Consolidated

Appropriations Act, 2021 and the American Rescue Plan Act of 2021.

The Consolidated Appropriations Act, 2021 provided funding for, extended, and set out policies

for various programs and activities, including COVID-19 economic relief measures. It extended

modifications to federal nutrition assistance programs for children, pregnant women, and older

adults and provided funding for programs to support agricultural producers, growers, and

processors.

The American Rescue Plan Act of 2021 provided additional relief to address the continued

impact of COVID-19 on the economy, public health, state and local governments, individuals,

and businesses.

This funding was in addition to funding received through the Coronavirus Aid, Relief, and

Economic Security (CARES) Act and Families First Coronavirus Response Act in FY 2020.

The unobligated balances from prior year and total supplemental current year, including recoveries

and adjustments was $111,550 million. Total obligations and outlays were $81,049 million and

$78,476 million, respectively. Total amount remaining to be obligated is $30,501 million.

See Note 30, COVID-19 Activity for financial impact of supplemental appropriations.

Stewardship Investments

Stewardship investments are substantial investments made by the Federal Government for the

benefit of the Nation but are not physical assets owned by the Federal Government. When

incurred, they are treated as expenses in determining the net cost of operations. However, these

items merit special treatment so that users of Federal financial reports know the extent of

investments that are made for long-term benefit. Such investments are measured in terms of

expenses incurred for non-Federal physical property, human capital, and research and

development. The following exhibit presents a comparison of stewardship investments.

USDA | 2021 Agency Financial Report 45

Exhibit 18: Comparison of Stewardship Investments ($ millions)

2021

$2,764

2021

$782

2021

$99

2020

$2,683

2020

$762

2020

$91

Research and Development Human Capital Non-Federal Property

Limitations of Financial Statements

The principal financial statements are prepared to report the financial position, financial

condition, and results of operations, pursuant to the requirements of 31 U.S.C. § 3515(b).

The statements are prepared from records of Federal entities in accordance with Federal

generally accepted accounting principles (GAAP) and the formats prescribed by OMB. Reports

used to monitor and control budgetary resources are prepared from the same records. Users of

the statements are advised that the statements are for a component of the U.S. Government.

46 Section I | Management’s Discussion and Analysis

Statement of Assurance

The United States Department of Agriculture (USDA) is providing a modified statement of assurance that

the overall adequacy and effectiveness of internal control within the agency complies with Federal

requirements.

USDA’s management recognizes its responsibility for establishing and maintaining effective internal

controls and financial management systems that comply with the Federal Managers’ Financial Integrity

Act of 1982 (FMFIA).

The Department assessed the effectiveness of internal controls over financial reporting in accordance with

FMFIA, Section 2 and OMB Circular No. A-123, Appendix A, and provides reasonable assurance that

USDA’s systems of internal control meet the objectives of the Federal Managers’ Financial Integrity Act

(FMFIA), except for two material weaknesses in internal control related to: (1) information technology

(IT) and (2) financial management. There was also one instance of financial system non-conformance,

which is also a non-compliance with FFMIA. USDA continues to make progress in the remediation of

controls to support improved efficiency and effectiveness related to these areas of weakness.

USDA assessed the effectiveness of internal controls over operations and compliance with applicable

laws and regulations in accordance with the FMFIA Section 2 and the Office of Management and Budget

(OMB) Circular No. A-123 and provides reasonable assurance that the internal controls over operations

are effective. However, USDA continues to report instances of non-compliance with the laws governing

improper payments and anti-deficiency violations.

We also assessed the compliance of USDA’s financial management systems with federal financial

management systems requirements in accordance with FMFIA Section 4; FFMIA Section 803(a); and

OMB Circular No. A-123, Appendix D. They require federal agencies to implement and maintain

financial management systems that comply with federal financial management system requirements,

applicable federal accounting standards, and the U.S. Standard General Ledger at the transaction-level. As

a result of the assessments conducted, we are reporting a financial system non-conformance, and non-

compliance with FFMIA.

The details of the exceptions are provided in the FMFIA, FFMIA, and Summary of Financial Statement

Audit and Management Assurances sections of this report. No other material weaknesses were found in

the design of the internal control over (1) the effectiveness and efficiency of operations and compliance

with applicable laws and regulations as of September 30, 2021, and (2) internal control over reporting as

of September 30, 2021.

USDA remains committed to operating its programs and operations in an effective and efficient manner

and its financial management systems in compliance with Federal requirements; and therefore, is

executing plans to improve deficient internal controls and areas of non-compliance.

Thomas J. Vilsack

Secretary of Agriculture

November 12, 2021

USDA | 2021 Agency Financial Report 47

Federal Managers’ Financial Integrity Act

Report on Management Control

Background

The Federal Managers’ Financial Integrity Act of 1982 (FMFIA) requires ongoing evaluations of

internal controls and financial management systems. These evaluations lead to an annual

statement of assurance that:

• Obligations and costs comply with applicable laws and regulations;

• Federal assets are safeguarded against fraud, waste, abuse, and mismanagement;

• Transactions are accounted for and properly recorded; and

• Financial management systems conform to standards, principles, and other requirements to

ensure that Federal managers have timely, relevant, and consistent financial information for

decision-making purposes.

The U.S. Department of Agriculture evaluated its internal controls in accordance with the Office

of Management and Budget (OMB) Circular No. A-123, Management’s Responsibility for

Enterprise Risk Management and Internal Control.

The Department operates a comprehensive internal control program. This program ensures

compliance with the requirements of FMFIA, the Federal Financial Management Improvement

Act of 1996 (FFMIA), other laws, OMB Circular No. A-123 and its Appendices A through D.

USDA managers must ensure their programs operate efficiently and effectively and comply with

relevant laws. They must also ensure that financial management systems conform to applicable

laws, standards, principles, and related requirements. In conjunction with the Office of Inspector

General and the Government Accountability Office (GAO), USDA’s management works

decisively to determine the root causes of its material weaknesses so that it can direct resources

to focus on their remediation.

USDA remains committed to reducing and eliminating the risks associated with its deficiencies.

It also strives to operate its programs efficiently and effectively in compliance with FMFIA and

other applicable laws and regulations.

48 Section I | Management’s Discussion and Analysis

Fiscal Year 2021 Results

The Department has two existing material weaknesses in internal control over reporting:

(1) Information Technology (IT) and (2) financial management. The material weakness for

financial management is due to needed improvements in accounting and internal controls related

to the Natural Resources Conservation Service (NRCS), Farm Service Agency (FSA), and

Commodity Credit Corporation (CCC). The Risk Management Agency (RMA) prior year

deficiency related to estimated losses on insurance claims has been corrected and is no longer a

material weakness. USDA also has one existing system non-conformance related to Funds

Control Management within the CCC, which will be resolved by the end of fiscal year (FY) 2025.

The Food and Nutrition Service (FNS) and the Farm Service Agency (FSA) are non-compliant

with laws and regulations related to the Payment Integrity Information Act of 2019.

USDA has identified violations or potential violations with the Anti-Deficiency Act (ADA).

One ADA violation was reported to the President and Congress during the fiscal year. The Office

of the General Counsel (OGC) determined that three potential instances were not ADA violations;

however, two of these instances have been referred to GAO for a determination. Two newly

identified potential violations were referred to OGC. Two instances are pending submission to the

President and Congress. A detailed description and summary of the Department’s ADAs can be

found in the Compliance with Laws and Regulations section of this report.

The Secretary’s Statement of Assurance provides modified assurance that the USDA’s internal

control system complies with FMFIA objectives. For additional details on the results reported in

USDA’s Consolidated Financial Statements Audit Report, see the Summary of Financial

Statement Audit and Management Assurances section of this report.

USDA | 2021 Agency Financial Report 49

Summary of Outstanding Material Weaknesses

Exhibit 19 provides FY 2021 accomplishments and FY 2022 planned actions toward resolving

the outstanding material weaknesses.

Exhibit 19: Summary of Outstanding Material Weaknesses

1. USDA Information Technology (IT)

Material Weaknesses

Existing

The Department needs to continue its efforts to improve IT security and

overall IT maturity to an effective level. Additionally, the Department needs to

continue remediation of its remaining outstanding audit recommendations.

Overall Estimated

Completion Date

FY 2023

FY 2021 Accomplishments: FY 2022 Planned Actions:

During FY 2021, the Office of the Chief Information

Officer (OCIO):

• Assessed the USDA enterprise;

• Developed a Cybersecurity Risk Management

Strategy, Cybersecurity Supply Chain Risk

Management Strategy, Cybersecurity Supply

Chain Risk Management Contract Language,

and Vulnerability Disclosure Policy;

• Improved the Risk Management Assessment

risk rating for privileged centralized

management from High Risk in FY 2020 to At

Risk in FY 2021;

• Achieved 8 of 10 Cross-Agency Priority Goals in

the third quarter of FY 2021;

• Implemented a total of 15 audit

recommendations from FY 2018, FY 2019, and FY

2020 that were issued by the Office of the

Inspector General and the Government

Accountability Office; and

• Achieved a B+ on the Federal Information

Technology Reform Act (FITARA) Dashboard,

with scores above the average of other

Agencies in the categories of Data Center

Optimization Initiative, Modernizing

Government Technology, and Transition Off

Network.

During FY 2022, OCIO plans to:

• Deploy Cybersecurity Diagnostic & Migration

(CDM) tools and refine the alignment of

operational processes;

• Complete implementation of the End User

Consolidation program;

• Continue the implementation of audit

recommendations;

• Continue to align Cybersecurity Risk

Management with Enterprise Risk

Management;

• Publish five Departmental Directives that

address Awareness and Training, Contingency

Planning, Log Retention, Personnel Security,

and Updates from Authoritative References;

• Automate the generation of System Security

Plans and incorporate Open Security Control

Assessment Language (OSCAL); and

• Continue to track, monitor, and enforce

security configuration baselines for USDA

servers.

50 Section I | Management’s Discussion and Analysis

2. Financial Management—Natural Resources Conservation Service (NRCS)

Material Weaknesses

Existing

NRCS needs improved (1) controls over obligations and unfilled customer

orders, (2) controls over expenses, and (3) entity-level controls.

Overall Estimated

Completion Date

FY 2022

FY 2021 Accomplishments: FY 2022 Planned Actions:

NRCS

• Implemented process improvements to

maintain, monitor, and certify unliquidated

obligations (ULOs) by the period of

performance to ensure ULOs are being closed

out timely to prevent a backlog of aged

obligations from developing in the future;

• Provided additional guidance and/or training

to employees over the recording of

transactions with future economic benefits;

• Provided guidance and/or training to

personnel relating to the accrual policy;

• Designed, implemented, and documented

policies and procedures to properly analyze

and record internal use software expenditures

and capitalized costs; and

• Evaluated the FY 2020 financial audit results

and the lessons learned to ensure the proper

controls are in place.

NRCS will:

• Continue implementing policies and

procedures to perform a quarterly analysis

over open obligations marked for review that

received no responses from responsible

parties to determine if a material amount is

being omitted from accrued expenses;

• Evaluate the results of the FY 2021 financial

audit and the lessons learned to ensure the

proper controls are in place; and

• Continue to provide guidance and/or training

to employees over the recording of expense

accruals.

3. Financial Management—Commodity Credit Corporation (CCC)

Material Weaknesses

Existing

CCC needs to address material weaknesses related to Accounting for

Budgetary Transactions.

Overall Estimated

Completion Date

FY 2025

FY 2021 Accomplishments: FY 2022 Planned Actions:

CCC

Implemented effective undelivered orders monitoring

controls at the program level throughout the

organization; and

Implemented effective processes, procedures, and

controls over the Agriculture Risk Coverage (ARC) and

Price Loss Coverage (PLC) (ARC/PLC) year-end accrual.

CCC will:

Continue to implement effective processes,

procedures, and controls over the ARC/PLC

year-end accrual.

Continue to implement effective undelivered

orders monitoring controls at the program

level throughout the organization.

USDA | 2021 Agency Financial Report 51

4. Financial Management - Farm Service Agency (FSA)

Material Weaknesses

Existing

FSA needs to improve Fund Balance with Treasury (FBwT) reconciliation

process to ensure new program activity is included in the reconciliations and

reconciling differences are resolved timely.

Overall Estimated

Completion Date

9/30/2022

FY 2021 Accomplishments: FY 2022 Planned Actions:

• Implemented reconciliations for new

programs; and

• Updated standard operating procedures.

• Implement a roll-up FBwT reconciliation for

the FBwT amounts reported in its financial

statements to ensure effective monitoring of

the completeness of all reconciliations;

• Implement the updates to the standard

operating procedures; and

• Improve process narratives to capture

organizational roles and responsibilities.

52 Section I | Management’s Discussion and Analysis

Summary of Outstanding System Non-Conformance

Funds Control Management non-conformance is also reported as a system non-compliance and is

included in the FFMIA Report on Financial Management Systems. The weakness involves

component agency-specific deficiencies for CCC.

Exhibit 20 provides FY 2021 accomplishments and FY 2022 planned actions toward resolving

the Department’s outstanding system non-conformance.

Exhibit 20: Summary of Outstanding System Non-Conformance

1. Funds Control Management— Commodity Credit Corporation (CCC)

System

Non-conformance Existing

CCC system improvements that are needed in recording obligations at

the transactional level.

Overall Estimated

Completion Date

FY 2025

FY 2021 Accomplishments: FY 2022 Planned Actions:

CCC

• Evaluated all budgetary general and subsidiary

ledgers to ensure they reflect the appropriate

accounting and reporting guidance provided

by the Office of Management and Budget

(OMB) and the U.S. Treasury;

• Partnered with Deputy Administrator Farm

Programs and the Information Technology

Services Division (ITSD) toward completing

software modifications to ensure all program

applications were in full compliance with the

Funds Control/Obligation Requirements (such

as business events, establishments,

liquidations, adjustments downward and

upward) related to obligations at the

transaction level in order to prepare for

Financial Management Modernization

Initiative (FMMI) conversion; and

• Implemented the Farm Service Agency

(FSA)/CCC Financial Improvement Program

multi-phased, multi-year project; moved some

financial management processes from Farm

Production and Conservation (FPAC) and its

affiliated agencies’ accounting and feeder

systems to FMMI.

CCC will:

• Continue to evaluate all budgetary general and

subsidiary ledgers to ensure they reflect the

appropriate accounting and reporting

guidance provided by OMB and the U.S.

Treasury;

• Continue to partner with Deputy Administrator

Farm Programs and ITSD toward completing

software modifications to ensure all program

applications were in full compliance with the

Funds Control/Obligation Requirements (such

as business events, establishments,

liquidations, adjustments downward and

upward) related to obligations at the

transaction level in order to prepare for FMMI

conversion; and

• Continue to implement the FSA/CCC Financial

Improvement Program multi-phased, multi-

year project; move all financial management

processes from FPAC and its affiliated

agencies’ accounting and feeder systems to

FMMI.

USDA | 2021 Agency Financial Report 53

Compliance with Laws and Regulations

The U.S. Department of Agriculture remains non-compliant or potentially non-compliant with

the Anti-Deficiency Act (ADA) as identified in the following table. For additional information

on non-compliance with laws, refer to the Payment Integrity Information Act of 2019 and the

Federal Financial Management Improvement Act sections of this report.

The Department has developed strategies to reduce and/or mitigate confirmed violations during

fiscal year (FY) 2021. The following tables provide further details of each violation.

Anti-Deficiency Act (ADA)

Exhibit 21: One ADA Violation was Reported to the President and Congress During 2021

Agency: Commodity Credit Corporation (CCC) Year Identified

Violation:

FY 2020 Export Credit Guarantees (GSM) is a mandatory program

authorized under 7 U.S. Code (U.S.C) 5622 (program authority

overall) and 7 U.S.C 5641(b) (funding level). GSM had an approved

apportionment in FY 2017 with sufficient budgetary resources to

cover obligations during FY 2017. The budgetary resources included

both the unobligated balance carried forward and a new

mandatory appropriation. The unobligated balance carried forward

consisted of indefinite budget authority, however, which cannot be

carried forward per the A-11. The current appropriation for that

year was insufficient to cover the total obligations by

$1,139,395.58.

FY 2020

Exhibit 22: ADA Violation Pending Submission to the President and Congress

Two additional ADA violations are pending the issuance of letters.

Agency Description of Violation Status

OCIO FY 2021 (NEW): Funding for an IT Modernization Center of

Excellence initiative in FY 2018 was obligated in the amount

of $7,000,000 without first obtaining E-Board concurrence.

OGC determined an

ADA violation

occurred.

Office of the

Secretary

FY 2017: Two provisions in the Consolidated Appropriations

Act, 2017, were violated. USDA obligated and expended

funds appropriated by the act to prepare and deliver the

Secretary’s statements and develop and publish the

Associated Press release. USDA’s obligation and expenditure

of appropriated amounts for this prohibited purpose also

violated the ADA, 31 U.S.C. § 1341(a)(1)(A). The cost

associated with the violation is pending.

The Government

Accountability Office

(GAO) determined an

ADA violation had

occurred.

54 Section I | Management’s Discussion and Analysis

Potential ADA Violations—Three prior year and two new potential violations were identified

during FY 2021. No violation was determined for one potential occurrence, two were referred to

OGC and two are pending a determination by the Government Accountability Office (GAO).

This table provides a description and the status of each violation.

Exhibit 23: Prior Year and Newly Identified Potential ADA Violations

Agency Description of Violation Status

CCC FY 2017: The prior year accounting treatment for

obligations related to the Conservation Reserve

Program—Annual Rental contracts were

determined to be in error with an ADA total of

$9,921,859,680. Only the annual portion of the

contract values was recorded as an obligation.

OGC determined that the error

was not an ADA violation;

however, the incident has been

referred to GAO for additional

investigation and determination.

CCC FY 2018: Emergency Forestry Conservation

Reserve Program—CCC failed to record the

obligation for the total value of the long-term

contract when the contract was signed. The ADA

violation amount was $2,200,000.

OGC determined that the error

was not an ADA violation;

however, the incident has been

referred to GAO for additional

investigation and determination.

FPAC-BC FY 2021 (NEW): FPAC-BC did not receive

Investment Review Board approval or obtain an

approved Information Technology Acquisition

Approval Request before obligating $352,800 for

contractor support to create an Unliquidated

Obligations Analysis and Certification tool.

Referred to OGC.

NRCS FY 2021 (NEW): USDA's Office of the Chief

Information Officer, using NRCS funds, renewed a

contract for $516,824 to obtain needed software

licenses. It was discovered that NRCS had been

historically using more licenses than they had

purchased. Efforts are under-way to determine

the extent of the over-usage from 2013-2021.

Referred to OGC.

The Office of the

Chief Information

Officer (OCIO)

FY 2020: OCIO potentially used more than

$22.5 million for consulting services that had been

mandated for the acquisition of capital

investments.

OGC determined no violation

occurred.

USDA | 2021 Agency Financial Report 55

Federal Financial Management

Improvement Act Report on Financial

Management Systems

Background

The Federal Financial Management Improvement Act of 1996 (FFMIA) is designed to improve

financial and program managers’ accountability, provide better information for decision-making,

and improve the efficiency and effectiveness of Federal programs. FFMIA requires that financial

management systems provide reliable, consistent disclosure of financial data in accordance with

generally accepted accounting principles and standards. These systems must also comply with

(1) Federal Financial Management System (FFMS) requirements, (2) applicable Federal

accounting standards, and (3) the U.S. Standard General Ledger (USSGL) at the transaction level.

Failure to resolve prior-year recommendations identified by the U.S. Department of

Agriculture’s Office of Inspector General has prevented the Department from mitigating

repeated deficiencies and receiving a quality rating on the five Cybersecurity Framework

security functions. More detailed information on the status of corrective actions planned and to

be completed to comply with the Federal Information Security Modernization Act (FISMA) is

provided in the Federal Managers’ Financial Integrity Act Report on Management Control

section of this report.

Exhibit 24 contains the outstanding initiatives to achieve compliance.

Exhibit 24: Initiatives to be Completed

Outstanding Initiatives to Achieve Federal Financial Management Improvement Act (FFMIA)

Compliance

Initiative Section of Non-Compliance Agency Target Completion Date

Information

Technology

Federal Financial Management

System requirements and information

security policies, procedures, and/or

practices.

Multiple 9/30/2022

Financial

Management

Federal accounting standards and the

U.S. Standard General Ledger (USSGL)

at the transaction level.

Natural Resources

Conservation

Service

9/30/2022

Federal accounting standards and

USSGL at the transaction level.

Commodity Credit

Corporation

12/31/2024

56 Section I | Management’s Discussion and Analysis

Fiscal Year 2021 Results

During fiscal year (FY) 2021, the USDA evaluated its financial management systems to assess

compliance with FFMIA. In assessing FFMIA compliance, USDA considered auditors’ opinions

on component agencies’ financial statements and progress in addressing the material weaknesses

identified in the FY 2020 Agency Financial Report. USDA is not compliant with Federal

accounting standards and the USSGL at the transaction level due to deficiencies identified for the

Commodity Credit Corporation (CCC) and the National Resources Conservation Service

(NRCS). Additionally, as reported in the FFMIA section of this report, USDA continues to have

weaknesses in the information technology controls and FFMS requirements that resulted in non-

compliance with the FISMA requirement. USDA agencies will continue working to meet

FFMIA and FISMA objectives as part of its financial systems strategy.

Commodity Credit Corporation (CCC)

CCC’s non-compliance with Federal accounting standards and USSGL at the transaction level

was noted for the weakness in the accounting for budgetary transactions. The financial

management systems did not record certain accounting events at the transaction level in

accordance with the USSGL. CCC continues to make significant progress in performing

compensating controls over the accounting for obligation activity. CCC will continue

implementing its program obligation activity into the Financial Management Modernization

Initiative in a phased approach.

Natural Resources Conservation Service (NRCS)

NRCS’s non-compliance with Federal accounting standards and USSGL at the transaction level

was noted for weaknesses in NRCS’s systems that do not transmit complete and accurate

information for certain types of budgetary transactions to facilitate the proper recording of those

transactions.

USDA | 2021 Agency Financial Report 57

Financial Management Systems Strategy

The U.S. Department of Agriculture (USDA) Financial Management Services (FMS) component

of the Office of the Chief Financial Officer (OCFO) provides timely, accurate, and complete

financial information to USDA agencies to execute their mission. Specifically, FMS provides

cloud-based, commercial off-the-shelf enterprise resource planning (ERP) software that equips

USDA staff offices and agencies with the functionality necessary to distribute, obligate, expend,

and report on the funds entrusted to them by the U.S. Congress.

FMS operates as an internal Shared Services Provider (SSP) to USDA staff offices and agencies.

FMS offers proactive, cost-effective services providing value-added management services,

expertise, and consultation to Federal Agencies to generate efficiencies and support through the

consolidation and standardization of functions, standard processing, and repeatable processes.

The OCFO leverages financial system successes to deliver future programs and tools to deliver

efficient, cost-effective, mission-focused, collaboratively developed, and strategically aligned

programs and tools. OCFO’s systems’ objectives in FY (fiscal year) 2021 are to:

• Build Financial System agility and visibility through integrated ERP systems capability and

deploying emerging technology.

• Expand capabilities of the OCFO systems to share, reuse, and integrate business capabilities,

technology, and data across the Department and with external partners and stakeholders.

• Increase application and system efficiencies by collaborating in Department-wide application

rationalization efforts.

The OCFO will continue to advance its financial systems by implementing emerging ERP

technology platforms, improving connectivity, reducing the marginal costs of accessing

information, and providing new ways to aggregate and analyze information.

Financial Management Lines of Business

FMS’s mission as an internal SSP is to provide reliable, cost-effective, employee-centric systems

and services to USDA organizations, thus enabling customers to focus on serving this great

Nation through their mission delivery. FMS’s goal is to provide the necessary activities for

executing the Financial Management Lines of Business vision. The three central components of

this vision are (1) communication, (2) governance, and (3) operations.

58 Section I | Management’s Discussion and Analysis

FMS’s key activities include:

• Budget execution.

• General ledger accounting.

• Financial reporting.

• Audit support.

• Payroll accounting.

• Investment accounting.

• Commercial vendor payments.

• Temporary duty travel payments.

• Permanent change of station employee relocation payments.

• Grant payments.

• Purchase card payments.

• Lease accounting.

• Intragovernmental payments.

• Intragovernmental collections.

• Receivable management.

• Property accounting.

• Grants management.

FMS’s primary objectives are to:

• Enhance the enterprise financial management services to provide faster, less expensive, and

low-risk solutions to customers.

• Integrate with the National Finance Center (NFC) payroll processing services.

• Provide an enterprise grants management service that features a full life cycle management

tool for grants administration to provide visibility to the government and the grant recipient.

• Maintain a complete audit-compliant financial solution with full documentation meeting

financial requirements.

• Pursue continuous process, operational, and organizational improvements for shared services

retained in the future state portfolio.

• Provide powerful and flexible financial management and reporting.

• Process administrative payments, collections, and certifications timely and accurately.

USDA | 2021 Agency Financial Report 59

Successes During Fiscal Year 2021

Robotics Process Automation

Since the transition of the Robotics Process Automation (RPA) and Services Management Office

to the Office of Chief Information Officer (OCIO) Digital Infrastructure Services Center (DISC),

the OCFO RPA team continues to maintain, support, and enhance enterprise financial RPAs and

collaborate with USDA Mission Areas such as Food Safety and Farm Production and

Conservation. Working with these Mission Areas, OCFO has enhanced the Enterprise Budget

Bot (EBB) by adding additional forms the bot can access and edit to minimize the work of the

analyst. The OCFO completed User Acceptance Testing and migrate new code to production in

the fourth quarter of FY 2021. The OCFO will migrate new code to other Mission Areas

following the initial deployment of the EBB.

The OCFO RPA project team worked with key OCFO stakeholders and partner organizations on

the following efforts in FY 2021:

• Completing cohort bots, enhancing RPA training, and migrating into production for

additional labor savings.

• Facilitating Operations and Maintenance in support of all bots running on the OCFO RPA

DISC tenant environment.

• Teaming with industry leaders to develop an artificial intelligence prototype that represents

the next progression of automation beyond bot technology.

Farm Service Agency/Commodity Credit Corporation Financial Improvement

Program

The Farm Service Agency’s (FSA) financial accounting, including the Commodity Credit

Corporation, whose programs are operated primarily by FSA, is not integrated with the rest of

USDA in the Financial Management Modernization Initiative (FMMI) system, creating

reconciliation and other issues which include additional costs to maintain a separate set of systems.

This project is a multi-phased, multi-year agile development project that will ultimately move all

financial management processes from FSA accounting and feeder systems to FMMI.

Simultaneously, FSA will be required to align its feeder systems to produce auditable financial

data to integrate with FMMI. In FY 2021, the Financial Improvement Program project:

• Continued the FMMI interface development that supported four agile development planning

increments, which included (1) the completion of interface functionality for fund

management, (2) payments and disbursements, (3) debt management and collection, and (4)

FMMI crosswalk.

60 Section I | Management’s Discussion and Analysis

• Conducted performance stress testing in a stress lab environment in the 4th Quarter of

FY 2021.

Grants Management

The ezFedGrants (eFG) System is an online system used for managing a grant’s entire life cycle.

Members of grant-seeking organizations use the eFG External Portal to view and apply for grant

award opportunities, view grant award package documents, and submit claims and reports,

among other actions. The eFG program is designed for servicing grants to organizations such as

educational institutions and research organizations.

OCFO’s FMS is the eFG system owner whose mission is to provide guidance and leadership in

program management, governance, grants and agreements policy, and information technology

(IT) related to the eFG community. The enterprise grants and agreements management solution

encompasses six USDA agencies and includes more than 50 Financial Assistance Listings while

transforming USDA’s grants and agreements capabilities. The eFG system supports various

Federal initiatives, such as homeownership opportunities to low-and moderate-income rural

Americans, organic agriculture, and numerous other grant and agreement-related programs to

serve the American public better.

In FY 2021, eFG’s initiatives:

• Migrated the Agricultural Marketing Service grant agreements from eFG to the

U.S. Department of Health and Human Services (HHS) GrantSolutions grants systems.

Although not expected to be completed until October 2021, this effort enables other USDA

agencies to migrate to HHS GrantSolutions.

• Started the National Institute of Food and Agriculture project to improve the overall user

experience and system reconciliation process related to the Automated Standard Application

for Payments.

• Provided system training to 1,531 internal and external users on eFG. The eFG system has

6,837 users (5,204 external users and 1,633 internal users) to date in FY 2021.

• Continued to maintain a robust user education site, WikiGrants, as an internal repository of

eFG related materials, such as user guides, training modules, and frequently asked questions

that received 972 unique visitors in FY 2021.

• Deployed 2,081 new FY 2021 agreements. During the life of the eFG system, 18,199

agreements have been deployed, and 8,393 are active or in draft status.

• Resolved 3,719 Tier 0 through Tier 1 (2,950 Tier 0 and 769 Tier 1) tickets through the OCFO

Grants Helpdesk as a first responder to customer inquiries.

USDA | 2021 Agency Financial Report 61

• Resolved 109 eFG system incidents (39 system defects and 70 enhancements) in FY 2021 via

the eFG Post-Production Support Team. Additionally, 866 priority one-time system fixes

were also resolved in FY 2021.

Agriculture Conference Management System

The Agriculture Conference Management System (AgCMS) has replaced the Conference

Transparency and Accountability Tool (CTAT). Agencies used the custom-built CTAT to

comply with Conference Reporting requirements outlined in the 2018 Farm Bill, the Office of

Management and Budget (OMB) Memorandum 17-08, and the Consolidated Appropriations Act,

2020 (Public Law [PL] 116-93). AgCMS now offers users a powerful tool that is easily

configurable to comply with new regulatory mandates and user-friendly features, including the

ability to access the application on a mobile device and more transparency via a robust, drill-

in dashboard.

The scope of the project also included migrating all data from CTAT and ensuring the new

system (built on the USDA Salesforce platform) can provide mobile capability, eAuthentication

access, and up to 20 additional reports in addition to the same functionality as CTAT.

In FY 2021, the AgCMS project team:

• Delivered multiple iterations (sprints) of design, development, and testing.

• Migrated the existing conference data to the new system and set up user accounts.

• Deployed the new system and trained its user community.

• Retired the CTAT.

USDA Budget Object Class Initiative

The purpose of this project is to support the USDA Budget Modernization effort. OCFO’s role in

this effort is to ensure Budget Object Classification (BOC) code compliance with OMB Circular

A-11, Section 83. USDA is now in the discovery phase of the BOC initiative, which is scheduled

to be completed by October 31, 2021.

The BOC initiative ensures that the use of BOC’s in FMMI complies with Section 83 of OMB

Circular A-11. This effort includes:

• Continuing analysis of all BOC Series.

• Updating the BOC Manual.

• Performing analysis to ensure data quality.

62 Section I | Management’s Discussion and Analysis

• Gathering requirements on the impact of the BOC changes on the USDA interface systems,

adobe forms, and internal processes within FMMI to determine solutions.

• Adding BOC standards to policy and process flows to maintain compliance with OMB

Circular A-11.

The BOC initiative will possibly extend into FY 2024.

Enterprise Architecture Program

The OCFO Enterprise Architecture (EA) Program delivers cost-effective, mission-focused,

collaboratively developed, and strategically aligned programs and services to its many

stakeholders and the Nation. This ground-up effort achieved numerous focused objectives during

FY 2021, including the following:

• Implemented maturity upgrades to the OCFO EA Program through significantly increased

skills and capabilities of the OCFO EA team and maturation of program procedures and

governance. The program increased one entire maturity level on the U.S. Government

Accountability Office (GAO) EA Maturity Scale. The increased program maturity has helped

the program to continue meeting numerous Federal Legal Authorities and Regulatory

Drivers, including the Clinger-Cohen Act of 1996 (CCA), the E-Government Act of 2002,

OMB Circular A-11, OMB Circular A-130, OMB policy memorandum M-07-11, the House

of Representatives (H.R.) 1232—Federal Information Technology Acquisition Reform Act

(FITARA), Capital Planning and Investment Control (CPIC), and the Federal Enterprise

Architecture Framework.

• Implemented new procedures and EA governance standards to facilitate the responsible

acquisition and management of IT throughout the Federal government.

• Fully implemented the revised and integrated system development life cycle within the

OCFO by establishing clear EA oversight and accountability into decisions and governance

of the OCFO IT infrastructure.

• Provided senior leadership with increased transparency and visibility regarding IT

Management and Spend-Management as well as a line of sight from strategic goals to

business processes and continuing into the technology architecture (for example, data,

software, hardware, and technology infrastructure).

Building on its successes in FY 2021, the EA team has identified the following goals in

FY 2022:

• Continue integrating EA with Capital Planning, Enterprise IT Governance, Data

Management, Performance Management, Enterprise Risk Management, FITARA and

Acquisition Management, Program Management, Strategic Planning, and Strategic Human

USDA | 2021 Agency Financial Report 63

Capital Management. This integration will ensure the continued achievement of coordinated

decision making throughout the OCFO and in coordination with the OCIO.

• Continue to review and advise on all Acquisition Approval Requests (AARs) for the office

and Department that pertain to financial management systems acquisitions and spending.

• Further develop and mature the IT Portfolio, programs, and financial resources of the OCFO

to align with long-term mission requirements and strategic plans required by mandates

and laws.

• Take action to advance the OCFO EA Program to the next level of maturity on the GAO EA

Maturity Model scale.

Capital Planning and Investment Control Program

The Capital Planning and Investment Control Program (CPIC) is a systematic approach to

selecting, managing, and evaluating IT investments. CPIC is mandated by the CCA, which

requires Federal agencies to focus on the results produced by IT investments. The OCFO CPIC

Program identifies the processes and activities necessary to ensure that OCFO’s IT investments

are well-planned, cost-effective, and support the missions and business goals of the agency and

the Department.

The CPIC team continually monitors OCFO’s IT portfolio, mitigating risks and ensuring the

overall health of investments. Accomplished in FY 2021 were the following:

• Improved the health of 90 percent of OCFO’s Major and Non-Major Investments, achieving

Chief Information Officer (CIO) rating scores of 4 (Green) or higher.

• Maintained Investment Support Plans to monitor required artifacts for reporting purposes and

eliminate identified weaknesses.

• Alongside EA, provided guidance to the OCFO Project Management Office in the

development of its Product Development Life Cycle.

• Delineated Internal and External transfer cost within the IT Portfolio.

Building on its successes in FY 2021, the CPIC team will achieve the following in FY 2022:

• Identify systems-specific costs within the OCFO IT Portfolio.

• Establish the Financial Systems AAR review process to evaluate cost savings opportunities

across the Department.

• Achieve CIO rating scores of 4 (Green) or higher for 100 percent of OCFO’s Major and Non-

Major Investments.

• Incorporate the NFC Retirement Processing System into OCFO’s IT Portfolio as a

Major Investment.

64 Section I | Management’s Discussion and Analysis

Other Initiatives

The Systems, Applications, and Products (SAP) G-Invoicing: OCFO is working to implement

USDA Agencies into Treasury’s G-Invoicing initiative by June 30, 2022. This system will

address current Buy/Sell activity by implementing a Federal intra-governmental transaction

Buy/Sell Data Standard and provide transparent access to a shared data repository for brokered

transactions in accordance with 31 U.S. Code (U.S.C.) 3512(b) and 3515.

SAP S/4 High-Performance Analytic Appliance (HANA): OCFO looks to SAP’s S/4 HANA as

the evolution of the USDA financial management solution beyond the outdated FMMI

construct. The current FMMI solution utilizes siloed data storage that is near real-time. The

current FMMI construct is outdated, and SAP has stated that it will no longer support the

platform as early as 2027.

SAP S/4HANA is an ERP financial software that operates on SAP HANA’s in-memory platform

and allows users to run real-time reports on operational and financial data. The data is stored and

processed so that in-memory users can analyze data quickly with few constraints. As part of the

ERP package, financial data and operational data are pulled from one centralized location, which

allows decision makers to examine problems from an organizational view rather than a limited

department view. FMS is currently in the preparatory phase of the multi-year initiative of

transforming the FMMI platform into the S4 HANA intelligent enterprise platform. FMS

conducted market research to complete its information-gathering exercise and deliver its

enterprise architecture roadmap for S4 HANA.

System for Award Management (SAM) Unique Entity Identifier (UEI): At the direction of the

General Services Administration, USDA is migrating to the use of the SAM UEI as a

replacement for the DUNS® number to verify Federal contractors. This change will impact all

USDA systems, including FMMI. FMMI completed system updates in FY 2021 in preparation of

a full UEI implementation by April 2022.

USDA | 2021 Agency Financial Report 65

Section II

Financial Information

Message from the Office of the Chief

Financial Officer

It is my honor to present the fiscal year (FY) 2021 Financial Statements on

behalf of the U.S. Department of Agriculture.

USDA received an unmodified audit opinion on the financial statements

from the Department’s Office of the Inspector General for the sixth

consecutive fiscal year. This result reflects an important measure of the

integrity and reliability of USDA’s overall focus and compliance with

regards to financial management. The Office of the Chief Financial Officer

(OCFO) recognizes the importance of accurate and timely financial information in making

properly informed decisions. It remains committed to sound financial stewardship in maintaining

or, when necessary, improving upon current systems to ensure that funds are appropriately

accounted for and used to promote Departmental goals and objectives in the service of you, the

American public.

As the country continues to grapple with the “new normal” forced upon each of us from

COVID-19, the OCFO staff has been steadfastly vigilant in ensuring continuity of operations in a

primarily remote or telework environment, never wavering from a commitment to their varying

roles in support of the financial management systems and activities of USDA. The following

highlights are only a few of their more noteworthy accomplishments from the fiscal year.

Budget Division

The Budget Division’s staff successfully managed the apportionment, allocation, tracking, and

internal controls of $31.4 billion in USDA supplemental funding for the Coronavirus Aid, Relief,

and Economic Security Act; the Coronavirus Food Assistance Program; and the American

Rescue Plan. Additionally, USDA agencies were advised on the development and monitoring of

process controls and accounting on supplemental funding and contributed to the Department’s

COVID dashboard for financial reporting to the Office of Management and Budget. The division

also completed Data Quality compliance reviews and reporting related to the supplemental

funding received.

66 Section II | Financial Information

Fiscal Policy Division

The Fiscal Policy Division had a very productive fiscal year. During FY 2021, the average

number of Do Not Pay (DNP) matches per quarter increased by 19 percent from FY 2020 (from

5.087 million to 6.053 million). Additionally, there was an 85 percent increase in the potential

monetary savings ($8.9 million to $16.1 million) to USDA and the Federal Government due to

the increase in matching behavior. The USDA has nearly 1,600 active users spanning five

agencies and multiple program areas. In addition, the USDA DNP Authorizing Official, in

tandem with the Primary Local Security Administrator, provided administrative support to

programs currently using DNP during the pre-award, pre-payment, and post-payment phases of

the payment life cycle. The users conducted more than 134,000 online pre-award/pre-payment

searches, which is an 8 percent increase from FY 2020.

Financial Management Division

The Financial Management Division spearheaded the interagency reimbursement process

between USDA and the Department of Health and Human Services Unoccupied Children’s

Program in support of the President’s Executive Order on the Establishment of the Interagency

Task Force on the Reunification of Families. A workflow was established, and a process was

created that coordinated the execution of USDA Agencies’ interagency agreements approaching

$105 million in anticipated authority. This division directed the fund’s execution for the Office

of Partnerships and Public Engagement (OPPE) grants program of approximately $58 million for

the Policy Center, Outreach Assistance for Socially Disadvantaged Farmers & Ranchers

Veterans, and the Farmers Opportunity Training and Outreach Programs in support of the

Department’s grants administration.

Internal Control Division

The Internal Controls Division had a banner year. The review and follow-up of the Office of

Inspector General’s (OIG) audit recommendations were enhanced to exceed the number of audit

closures despite the current pandemic. The Department’s inventory of open audits decreased in

FY 2021 by 6 percent from 88 to 82 percent. Based on current effort and closure rates, OCFO

has surpassed the reported numbers of FY 2020 (19 OIG audits and 149 recommendations

closed) as compared with FY 2021 (33 OIG audits and 231 recommendations) or an increase of

74 percent for OIG audits and 55 percent for open audit recommendations. Efforts to closely

communicate and partner with OIG on the implementation and corrective actions of findings

within the Department continue to help reduce deficiencies. Several long-standing audit

recommendations issued by the U.S. Government Accountability Office have been reviewed, and

continued actions are being taken to mitigate and address all weaknesses identified.

USDA | 2021 Agency Financial Report 67

Working Capital Fund Division

Our Working Capital Fund (WCF) Division continued to build on its reputation as a leader in

financial management and administration of revolving funds. Its mission is to provide an

effective financing mechanism to support services provided on a centralized basis. Centrally

managed operations provide efficiency, reduce, or eliminate redundancies, and achieve

economies of scale through extensive management reviews. The WCF provided its customers

with a wide variety of services, totaling more than $1.2 billion annually to 100 distinct USDA

and non-USDA entities, supporting 15 Activity Centers across seven Departmental

organizations. These services include Administration, Communication, Financial Management,

Information Technology, and Correspondence Management. Executing these day-to-day

business activities saved resources and met the needs of USDA Agencies at competitive prices,

which allows our customers to concentrate on mission-critical functions. The WCF’s strength

lies in its extraordinary team of professionals at the heart of the USDA mission and who continue

to work tirelessly on every task.

Although I am proud of the accomplishments achieved during this fiscal year, I also recognize

there is still work to be done. The OCFO will continue to work across the Department on

remediating material weaknesses and Digital Accountability and Transparency Act submission

improvements, making this an area of increased focus in the coming year. We will also continue

to diligently manage taxpayer dollars wisely and build upon the successes demonstrated by the

achievements described previously. We are proud to serve our fellow Americans and pledge to

persist in delivering superior financial stewardship and management.

Lynn M. Moaney

Deputy Chief Financial Officer

November 12, 2021

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IndependentAuditorsReport

OFFICE OF INSPECTOR GENERAL

United States Department of Agriculture

DATE: November 15, 2021

AUDIT

NUMBER: 50401-0020-11

TO: Lynn Moaney

Deputy Chief Financial Officer

Office of the Chief Financial Officer

ATTN: Annie Walker-Bradley

Director

Internal Control Division

FROM: Gil H. Harden

Assistant Inspector General for Audit

S

UBJECT: U.S. Department of Agriculture’s Consolidated Financia l Statements for

Fiscal Years 2021 and 2020

This report presents the results of our audits of U.S. Department of Agriculture’s (USDA)

consolidated financial statements for the fiscal years ending September 30, 2021, and 2020. This

report contains an unmodified opinion on the financial statements, as well as the results of our

assessments of USDA’s internal control over financial reporting and compliance with laws and

regulations. Your response is included in its entirety in Exhibit A.

In accordance with Departmental Regulation 1720-1, please furnish a reply within 60 days

describing the corrective actions taken or planned, and timeframes for implementing the

recommendations for which management decisions have not been reached. Please note that the

regulation requires management decision to be reached on all recommendations within 6 months

from report issuance, and final action to be taken within 1 year of each management decision to

prevent being listed in the Department’s annual Agency Financial Report.

We appreciate the courtesies and cooperation extended to us by members of your staff during our

audit fieldwork and subsequent discussions. This report contains publicly available information

and will be posted in its entirety to our website (http://www.usda.gov/oig

) in the near future.

USDA | 2020 Agency Financial Report 69

AUDIT REPORT 50401-0020-11

Inde pe ndent Auditor’s Re port

Lynn Moaney

Deputy Chief Financial Officer

Office of the Chief Financial Officer

The U.S. Department of Agriculture’s (USDA) Office of Inspector General audited the

consolidated financial statements of the Department for fiscal years 2021 and 2020. We also

considered USDA’s internal control over financial reporting and tested USDA’s compliance with

certain provisions of applicable laws, regulations, contracts, and grant agreements that could

have a direct effect on the determination of material financial statement amounts and disclosures

on these consolidated financial statements.

The “Findings and Recommendation” section presents the material weaknesses and significant

deficiencies in internal control and instances of noncompliance with laws and regulations, as of

and for the year ended September 30, 2021. Exhibit A presents USDA’s response in its entirety.

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of USDA, which comprise

the consolidated balance sheets as of September 30, 2021 and 2020, and the related consolidated

statements of net cost, and changes in net position; and the combined statements of budgetary

resources for the fiscal years then ended and the related notes to the consolidated financial

statements (hereinafter referred to as the “consolidated financial statements”).

Manage me nt’s Responsibility for the Financial State me nts

Management is responsible for the preparation and fair presentation of these consolidated

financial statements in accordance with accounting principles generally accepted in the United

States of America (U.S.); and the design, implementation, and maintenance of internal control

relevant to the preparation and fair presentation of financial statements that are free from

material misstatement, whether due to fraud or error.

Auditor’s Re s ponsibility

Our responsibility is to express an opinion on these consolidated financial statements based on

our audits. We conducted our audits in accordance with auditing standards generally accepted in

the U.S.; the standards applicable to financial audits contained in government auditing standards,

issued by the Comptroller General of the U.S.; and the Office of Management and Budget

(OMB) Bulletin 21-04, Audit Requirements for Federal Financial Statements. Those standards

and OMB Bulle tin 21-04 require that we plan and perform audits to obtain reasonable assurance

about whether the consolidated financial statements are free from material misstatement.

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AUDIT REPORT 50401-0020-11

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the consolidated financial statements. The procedures selected depend on the

auditor’s judgment, including the assessment of the risks of material misstatement of the

consolidated financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair

presentation of the consolidated financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness

of significant accounting estimates made by management, as well as evaluating the overall

presentation of the consolidated financial statements. Our audits also included performing such

other procedures as we considered necessary in the circumstances.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion on the Consolidated Financial State me nts

In our opinion, the consolidated financial statements referred to above present fairly, in all

material respects, the financial position of USDA, as of September 30, 2021 and 2020, and its net

costs, changes in net position, and budgetary resources for the years then ended, in accordance

with accounting principles generally accepted in the U.S.

Other Matters

I

nte ractive Data

Management has elected to reference information on websites or other forms of interactive data

outside the financial statements to provide additional information for the users of its financial

statements. Such information is not a required part of the basic financial statements or

supplementary information required by the Federal Accounting Standards Advisory Board

(FASAB). The information on these websites has not been subjected to any of our auditing

procedures, and accordingly we do not express an opinion or provide any assurance on it.

Re quire d Supple me ntary Information

Accounting principles generally accepted in the U.S. issued by the FASAB require that the

Management’s Discussion and Analysis (MD&A), and Required Supplementary Information

(RSI) be presented to supplement the basic consolidated financial statements. Although the RSI

is not a part of the basic consolidated financial statements, FASAB considers this information to

be an essential part of financial reporting for placing the basic consolidated financial statements

in appropriate operational, economic, or historical context. We have applied certain limited

procedures to the RSI in accordance with auditing standards generally accepted in the U.S.,

which consisted of inquiries of management about the methods of preparing and comparing the

USDA | 2020 Agency Financial Report 71

AUDIT REPORT 50401-0020-11

information for consistency with management’s responses to our inquiries, the basic consolidated

financial statements, and other knowledge we obtained during our audits of the basic

consolidated financial statements. We do not express an opinion or provide any assurance on the

information because the limited procedures do not provide us with sufficient evidence to express

an opinion or provide any assurance.

Othe r Information

Our audits were conducted for the purpose of forming an opinion on the basic consolidated

financial statements as a whole. USDA’s Non-Discrimination Statement, Table of Contents,

Message from the Secretary, Required Supplementary Information, Message from the Office of

the Chief Financial Officer, Other Informa tion, and Abbreviations-Acronyms sections are

presented for purposes of additional analysis, and are not a required part of the basic

consolidated financial statements. This information has not been subjected to the auditing

procedures applied in our audits of the basic consolidated financial statements and, accordingly,

we express no opinion and provide no assurance on it.

Other Reporting Required by Government Auditing Standards

Re port on Inte rnal Control Ove r Financial Reporting

In planning and performing our audit of the consolidated financial statements as of and for the

year ended September 30, 2021, we considered USDA’s internal control over financial reporting

(internal control) to determine the audit procedures that are appropriate in the circumstances for

the purpose of expressing our opinion on the consolidated financial statements, but not for the

purpose of expressing an opinion on the effectiveness of USDA’s internal control. Accordingly,

we do not express an opinion on the effectiveness of USDA’s internal control. We did not test

all internal controls relevant to operating objectives as broadly defined by the Federal Managers’

Financial Integrity Act of 1982 (FMFIA).

Our consideration of internal control was for the limited purpose described in the preceding

paragraph and was not designed to identify all deficiencies in internal control that might be

significant deficiencies or material weaknesses, and, therefore, material weaknesses or

significant deficiencies may exist that were not identified.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to

prevent, or detect and correct, misstatements on a timely basis. A material weakness is a

deficiency or a combination of deficiencies, in internal control, such that there is a reasonable

possibility that a material misstatement of USDA’s consolidated financial statements will not be

prevented, or detected and corrected on a timely basis. We consider the deficiencies in overall

financial management and information technology (IT) security program, described in “Findings

and Recommendation,” Section 1, to be material weaknesses.

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AUDIT REPORT 50401-0020-11

A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is

less severe than a material weakness, yet important enough to merit attention by those charged

with governance. We consider the deficiency in internal control over unliquidated obligations

(ULOs), described in “Findings and Recommendation,” Section 2, to be a significant deficiency.

Re port on Compliance with Laws, Re gulations, Contracts, and Grant Agre ements

As part of obtaining reasonable assurance about whether USDA’s consolidated fina ncial

statements as of and for the year ended September 30, 2021, are free of material misstatement,

we performed tests of its compliance with certain provisions of laws, regulations, contracts, grant

agreements, and Governmentwide policy requirements, noncompliance with which could have a

direct effect on the determination of material financial statement amounts and disclosure in the

consolidated financial statements. However, providing an opinion on compliance with those

provisions was not an objective of our audit and, accordingly, we do not express such an opinion.

Fe de ral Financial Manage me nt Improve ment Act of 1996 (FFM IA)

We also performed tests of USDA’s compliance with certain provisions referred to in Section

803(a) of FFMIA. Providing an opinion on compliance with FFMIA was not an objective of our

engagement and, accordingly, we do not express such an opinion. The results of our tests of

FFMIA disclosed instances, described in more detail in the “Findings and Recommendation,”

Section 3, of this report, where USDA was not substantially compliant with Federal Financial

Management System Requirements (FFMSR), applicable Federal accounting standards, and the

U.S. Standard General Ledger (USSGL) at the transaction level.

Antideficiency Act (ADA)

Title 31 U.S. Code (U.S.C.) Section 1517 states that an officer or an employee of the United

States Government may not make or authorize an expenditure or obligation exceeding an

apportionment or an amount permitted by regulations as prescribed by Title 31 U.S.C.

Section 1514. In fiscal year 2021, the Department reported 3 confirmed and 4 potential ADA

violations in its agency financial report.

Payment Integrity Information Act of 2019 (PIIA)

During fiscal year 2021, we identified instances of noncompliance with the requirements of

PIIA,

1

regarding the design of program internal controls related to reporting improper payments.

A separate report was issued with further details on the Department’s compliance with improper

payment requirements.

2

1

Payment Integrity Information Act of 2019 (PIIA), Pub. L. No. 116-117, 134 Stat. 113.

2

Audit Report 50024-0001-24, U.S. Department of Agriculture’s Fiscal Year 2020 Compliance with Improper

Payment Requirements, issued June 2021.

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AUDIT REPORT 50401-0020-11

Manage me nt’s Responsibility for Inte rnal Control and Compliance

USDA’s management is responsible for (1) evaluating the effectiveness of internal control over

financial reporting based on criteria established under FMFIA, (2) providing a statement of

assurance on the overall effectiveness of internal control over financial reporting, (3) ensuring

USDA’s financial management systems are in substantial compliance with FFMIA requirements,

and (4) ensuring compliance with other applicable laws, regulations, contracts, and grant

agreements.

Auditor’s Responsibilities

We are responsible for (1) obtaining a sufficient understanding of internal control over financial

reporting and compliance to plan the audit, (2) testing whether USDA’s financial management

systems substantially comply with FFMIA requirements referred to above, and (3) testing

compliance with certain provisions of laws, regulations, contracts, and grant agreements that

have a direct effect on the determination of material amounts and disclosure in the consolidated

financial statements.

We did not evaluate all internal controls relevant to operating objectives as broadly established

by FMFIA, such as those controls relevant to preparing statistical reports and ensuring efficient

operations. We limited our internal control testing to controls over financial reporting and

compliance. Because of inherent limitations, internal control over financial reporting may not

prevent, or detect and correct, misstatements due to fraud or error.

We did not test compliance with all laws, regulations, contracts, and grant agreements applicable

to USDA. We limited our tests of compliance to certain provisions of laws, regulations,

contracts, and grant agreements that have a direct effect on the determination of material

amounts and disclosure in the consolidated financial statements that we deemed applicable to

USDA’s consolidated financial statements for the fiscal year ended September 30, 2021. We

caution that noncompliance may occur and not be detected by these tests.

Manage me nt’s Response

Management’s response to the report is presented in Exhibit A. We did not audit USDA’s

response and, accordingly, we express no opinion on it.

Purpos e of the Re port on Inte rnal Control Over Financial Re porting and the Re port on

Compliance with Laws , Re gulations, Contracts , and Grant Agre eme nts

The purpose of the “Report on Internal Control Over Financial Reporting” and the “Report on

Compliance with Laws, Regulations, Contracts, and Grant Agreements” sections of this report is

solely to describe the scope of our testing of internal control and compliance and the results of

that testing, and not to provide an opinion on the effectiveness of USDA’s internal control or on

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AUDIT REPORT 50401-0020-11

compliance. These reports are an integral part of an audit performed in accordance with

government auditing standards in considering USDA’s internal control and compliance.

Accordingly, these reports are not suitable for any other purpose.

Gil

H. Harde n

Assistant Inspector General for Audit

Washington, D.C.

November 12, 2021

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AUDIT REPORT 50401-0020-11

Findings and Re comme ndation

Section 1: Material Weaknesses in Internal Control Over Financial

Re porting

Finding 1: Improvements are Needed in Overall Financial Management

The material weakness for financial management is due to improvements needed in accounting

and internal controls related to the Commodity Credit Corporation (CCC), Natural Resources

Conservation Service (NRCS), and Farm Service Agency (FSA). In conducting our review, we

noted the following areas where improvements are needed in overall financial management.

Spec ifically:

• CCC disclosed a material weakness related to accounting for budgetary transactions.

• NRCS disclosed material weaknesses related to controls over obligations and unfilled

customer orders; controls over expenditures; and entity level controls.

• The FSA portion of Treasury Account Symbol 12X0115, Processing, Research, and

Marketing, Office of the Secretary, Agriculture, representing over $13 billion in

disbursement activity was not fully reconciled for the first six months of fiscal year 2021.

The agency acknowledged this deficiency and self-reported a new material weakness in

reconciling Fund Balance with Treasury in its annual assurance statement for the FMFIA.

In its FMFIA Report on Management Control for fiscal year 2021, the Department reported the

following corrective action plans to address the outstanding weaknesses from fiscal year 2020

that remain material weaknesses for fiscal year 2021:

• CCC, in fiscal year 2022, plans to continue to implement effective processes, procedures,

and controls over the Agriculture Risk Coverage and Price Loss Coverage yearend

accrual as well as effective undelivered orders monitoring controls at the program level

throughout the organization.

• NRCS, in fiscal year 2022, plans to continue implementing policies and procedures to

perform quarterly analysis of open obligations to determine whether material amounts are

being omitted from accrued expenses. In addition, NRCS will continue to provide

guidance and/or training to employees over the recording of expense accruals.

• FSA, in fiscal year 2022, plans to implement a roll-up Fund Balance with Treasury

reconciliation for the Fund Balance with Treasury amounts reported in its financial

statements to ensure effective monitoring of the completeness of all reconciliations.

Additionally FSA will implement updates to the standard operating procedures and

improve process narratives to capture organizational roles and responsibilities.

Since USDA has actions planned and in progress, we are making no further recommendations

herein.

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AUDIT REPORT 50401-0020-11

Finding 2: Improvements are Needed in Overall Information Technology

Security Program

As required by the Federal Information Security Modernization Act of 2014 (FISMA), the Office

of Inspector General (OIG) reviewed USDA’s ongoing efforts to improve its IT security program

and practices during fiscal year 2021.

3

USDA continues to take positive steps to improve its IT

security posture, but many longstanding weaknesses remain. For FISMA audits conducted from

2018 through 2020, there were 10 open recommendations at the beginning of fiscal year 2021.

During fiscal year 2021, four recommendations were closed. OIG also issued 16 new

recommendations based on security weaknesses identified in fiscal year 2021.

OMB establishes standards for an effective level of security and considers “Managed and

Measurable” to be a sufficient level. However, OIG found the Department’s maturity level to be

at the lower “Consistently Implemented” level. Based on OMB’s criteria, the Department’s

overall score indicates an ineffective level of security. The Department and its agencies must

develop and implement an effective plan to mitigate security weaknesses identified in the prior

fiscal ye ar recommendations. The Office of the Chief Information Officer generally concurred

with the findings and recommendations in the report.

3

Audit Report 50503-0005-12, U.S . Department of Agriculture, Office of the Chief Information Officer, Fiscal Year

2021 Federal Information Security Modernization Act, iss ued October 2021.

USDA | 2020 Agency Financial Report 77

AUDIT REPORT 50401-0020-11

Section 2: Significant Deficiency in Internal Control Over Financial

Re porting

Finding 3: Improvements are Needed in Controls Over Obligations

While USDA’s remediation efforts have brought about improvements in written policies and

procedures over obligations, inconsistent execution has resulted in ineffective controls. During

fiscal year 2021, USDA continued to lack effective internal controls over the recording of

obligations, accruals, and liquidations to ensure the existence and accuracy of obligations

reported in its general ledger.

In our testing of obligations, agency certifications, and related activities, we noted the following:

• 9 undelivered orders (UDOs) which were invalid and should have been de-obligated in a

prior fiscal year; 5 of these invalid UDOs were not included in the quarterly

certifications;

• 4 UDOs which were billed in the wrong fiscal year;

• 8 accruals which remained open and should have been reversed in a prior fiscal year;

• fiscal year 2021 and prior years’ accruals which were recorded to an incorrect Vendor;

• 56 transactions totaling $109.7 million in fiscal year 2021 which were recorded to an

incorrect Budget Object Classification (BOC);

• inconsistent cutoff dates for certifying inactive obligations;

• obligating documents which were either not signed by the cooperator, or signed after the

performance period ended;

• a potential improper obligation of funds, recorded without sufficient documentation; and

• a lack of a comprehensive inventory of international agreements.

These conditions were due to (1) inconsistent execution of processes and control activities as

designed and implemented, including lack of adherence to policies and procedures for the

recording of obligations , accruals and liquidations; (2) ineffective monitoring and reviewing as

well as inappropriately certifying to the validity of obligation balances; and (3) intra-

departmental ULOs inappropriate ly remained open because USDA agencies did not bill to, or

submit final payments from, other USDA agencies.

Additionally, the Rural Development financial statement audit report this year discussed

ineffective controls over the recording of valid obligations and the untimely de-obligation of

invalid obligations.

4

OMB Circular No. A-11, Preparation, Submission, and Execution of the Budget, states that an

“obligation means a binding agreement that will result in outlays, immediately or in the future.

Budgetary resources must be available before obligations can be incurred legally.”

4

Audit Report 85401-0012-11, Rural Development’s Financial Statements for Fiscal Years 2021 and 2020, issued

November 2021.

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AUDIT REPORT 50401-0020-11

The U.S. Department of Treasury’s annual closing guidance (Treasury Bulletin 2021-22,

Yearend Closing) requires an annual review of ULOs. Before the fiscal yearend closing,

agencies that have not reviewed their unliquidated obligations during the year must do so. This

ensures that agencies properly record transactions meeting the criteria of valid obligations set

forth in 31 U.S.C. 1501.

Departmental Regulation 2230-001, Reviews of Unliquidated Obligations, October 28, 2020,

requires quarterly reviews and certifications as to the validity of ULO balances from agency

Chief Financial Officers (CFO). Agencies are to perform quarterly reviews of all unliquidated

obligations inactive for at least 12 months, and the agency CFO or equivalent must certify

(quarterly) that the unliquidated obligations are valid based on those reviews. If program and

procurement personnel have determined that an ULO is no longer valid and have provided

written notification to the appropriate agency or staff office designated personnel to cancel or

adjust the ULO in the financial management system, the de-obligation must be processed within

15 business days after receipt of the written notification.

USDA Budget Object Classification Codes (BOC), dated March 2013, describes the types of

services that are included under each BOC. The manual provides a reference list of BOC codes

that are to be used by agencies and offices serviced by the Office of the Chief Financial Officer.

Invalid or inaccurate obligations increase the risk that an agency may be unable to determine the

amount of funds available for obligation or expenditure, may inappropriately divert funds for

purposes other than what was intended by Congress, or may misstate obligations in financial

reporting as of fiscal yearend.

Recommendation 1

Ensure appropriate agency officials obtain training pertaining to Departmental Regulation 2230-

001 to include review and monitoring of valid obligations and acceptable support for valid

obligations.

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AUDIT REPORT 50401-0020-11

Section 3: Noncomplia nce with Laws and Regulations

Finding 4: Lack of Substantial Compliance with FFMIA Requirements

FFMIA requires agencies to annually assess whether their financial management systems comply

substantially with (1) FFMSR, (2) applicable Federal accounting standards, and (3) the USSGL

at the transaction level. FFMIA also requires auditors to report in their Chief Financial Officer

Act financial statement audit reports whether financial management systems substantially

comply with FFMIA’s system requirements. In addition, FISMA requires each agency to report

significant information security deficiencies, relating to financial management systems, as a lack

of substantial compliance under FFMIA.

During fiscal year 2021, USDA evaluated its financial management systems to assess

compliance with FFMIA. The Department reported that it was not compliant with FFMSR,

applicable accounting standards, USSGL at the transaction level, and FISMA requirements. As

noted in its MD&A, USDA continues its work to meet FFMIA and FISMA objectives.

Specifically, in its FFMIA and FMFIA reports, the Department reported an ineffective

information security program due to many longstanding weaknesses with outstanding

recommendations. See Finding 2 of this report for more details.

Additionally, in its FFMIA report, the Department noted noncompliance with two of its

component agencies relating to financial management, described below.

1. CCC’s noncompliance with Federal accounting standards and USSGL at the transaction

level was noted for the weakness in the accounting for budgetary transactions. The

financial management systems did not record certain accounting events at the transaction

level in accordance with the USSGL. CCC continues to make significant progress in

performing compensating controls over the accounting for obligation activity. CCC will

continue implementing its program obligation activity into the Financial Management

Modernization Initiative in a phased approach.

2. NRCS’s noncompliance with Federal accounting standards and USSGL at the transaction

level was noted for weaknesses in NRCS’s systems that do not transmit complete and

accurate information for certain types of budgetary transactions to facilitate the proper

recording of those transactions.

See Finding 1 of this report for more details on the NRCS and CCC issues.

Due to planned actions, we are making no further recommendations in this report.

80 SeconII|FinancialInformaon

AgencyResponsetoAuditorsReport

Nove

mber 12, 2021

TO: Gil H. Harden

Assistant Inspector General

Office of Inspector General

FROM: Lynn Moaney /S/

Deputy Chief Financial Officer

SUBJECT: U.S. Department of Agriculture’s Financial Statements for Fiscal Years

2021 and 2020

The Department is pleased to respond to your audit report on the financial statements

for fiscal years 2021 and 2020.

We concur with the findings in the report. We will continue with actions planned and in

progress to address the findings.

I would like to express my appreciation for the cooperation and professionalism

displayed by your staff and your contract auditors during the audit.

United States

Department of

Agriculture

Office of the Chief

Financial Officer

1400 Independence

Avenue, SW

Washington, DC

20250

AN EQUAL OPPORTUNITY EMPLOYER

USDA | 2021 Agency Financial Report 81

Financial Statements

Consolidated Balance Sheets

As of September 30, 2021 and 2020 ($ in millions)

Item 2021 2020

ASSETS (NOTE 2):

Intragovernmental:

Fund Balance with Treasury (Note 3) $ 237,610 $ 195,418

Investments, Net (Note 5) 256 245

Accounts Receivable, Net (Note 6) 320 61

Advances and Prepayments 42 27

Total Intragovernmental

238,228 195,751

With the Public:

Cash and Other Monetary Assets (Note 4) 298 381

Accounts Receivable, Net (Note 6) 5,353 3,812

Loans Receivable, Net (Note 7) 113,450 110,235

Inventory and Related Property, Net (Note 8) 23 18

General Property, Plant, and Equipment, Net (Note 9) 2,588 2,399

Advances and Prepayments 587 1,295

Investments, Net (Note 5) 3 3

Total With the Public 122,302 118,143

Total Assets 360,530 313,894

Stewardship PP&E (Note 10)

LIABILITIES (NOTE 11):

Intragovernmental:

Accounts Payable (Note 14) 80 105

Debt (Note 12) 132,821 143,129

Advances from Others and Deferred Revenue 14 9

Other Liabilities (Note 14) 11,871 12,719

Total Intragovernmental 144,786 155,962

With the Public:

Accounts Payable 2,353 3,737

Federal Employee Benefits Payable 1,376 1,382

Environmental and Disposal Liabilities (Note 13) 258 239

Benefits Due and Payable 8,580 13,330

Loan Guarantee Liabilities (Note 7) (601) 1,329

Insurance and Guarantee Program Liabilities 14,226 7,703

Advances from Others and Deferred Revenue 122 (515)

Other Liabilities (Notes 14, 15 & 16) 12,977 13,687

Total With the Public 39,291 40,892

Total Liabilities 184,077 196,854

Commitments and Contingencies (Note 16)

Net Position:

Unexpended Appropriations - Funds from Dedicated Collections (Note 17) 468 191

Unexpended Appropriations - Funds from Other Than Dedicated Collections 127,658 82,751

Total Unexpended Appropriations (Combined) 128,126 82,942

Cumulative Results of Operations - Funds from Dedicated Collections (Note 17) 3,473 3,283

Cumulative Results of Operations - Funds from Other Than Dedicated Collections 44,854 30,815

Total Cumulative Results of Operations (Combined) 48,327 34,098

Total Net Position 176,453 117,040

Total Liabilities and Net Position $ 360,530 $ 313,894

The accompanying notes are an integral part of these statements.

82 Section II | Financial Information

Consolidated Statements of Net Cost

For the Year Ended September 30, 2021 and 2020 ($ in millions)

Item

2021 2020

Farm Production and Conservation:

Gross Costs $ 54,802 $ 54,824

Less: Earned Revenue

4,449 5,159

Net Costs 50,353 49,665

Food, Nutrition, and Consumer Services:

Gross Costs 163,254 122,391

Less: Earned Revenue 65 56

Net Costs 163,189 122,335

Food Safety:

Gross Costs 1,370 1,321

Less: Earned Revenue

262 260

Net Costs 1,108 1,061

Marketing and Regulatory Programs:

Gross Costs 6,640 5,627

Less: Earned Revenue

812 1,016

Net Costs 5,828 4,611

Natural Resources and Environment:

Gross Costs 8,278 7,033

Less: Earned Revenue 768 888

Net Costs 7,510 6,145

Rural Development:

Gross Costs 4,517 6,842

Less: Earned Revenue

3,290 3,591

Net Costs 1,227 3,251

Research, Education, and Economics:

Gross Costs 3,175 3,059

Less: Earned Revenue 105 103

Net Costs 3,070 2,956

Trade and Foreign Agricultural Affairs:

Gross Costs 475 475

Less: Earned Revenue

32 72

Net Costs 443 403

Staff Offices:

Gross Costs 1,661 1,493

Less: Earned Revenue 243 241

Net Costs 1,418 1,252

Total Gross Costs 244,172 203,065

Less: Total Earned Revenue 10,026 11,386

Net Cost of Operations (Note 18) $ 234,146 $ 191,679

The accompanying notes are an integral part of these statements.

USDA | 2021 Agency Financial Report 83

Consolidated Statement of Changes in Net Position

For the Year Ended September 30, 2021 ($ in millions)

Item

Funds from

Dedicated

Collections

(Combined Totals)

(Note 17)

Funds from Other

Than Dedicated

Collections

(Combined

Totals) Eliminations

Consolidated

Total

Unexpended Appropriations:

Beginning Balances $ 191 $ 82,751 $ - $ 82,942

Appropriations Received 12 285,680 - 285,692

Appropriations Transferred In (Out) 285 (537) - (252)

Other Adjustments - (15,268) - (15,268)

Appropriations Used

(20) (224,968) - (224,988)

Net Change in Unexpended Appropriations 277 44,907 - 45,184

Total Unexpended Appropriations: Ending Balance

468 127,658 - 128,126

Cumulative Results of Operations:

Beginning Balances 3,283 30,815 - 34,098

Other Adjustments - (233) - (233)

Appropriations Used 20 224,968 - 224,988

Non-exchange Revenue 230 25,688 - 25,918

Donations and Forfeitures of Cash and Cash Equivalents 1 - - 1

Transfers In (Out) without Reimbursement 1,345 (1,373) - (28)

Imputed Financing 63 3,404 (2,501) 966

Other (99) (3,138) - (3,237)

Net Cost of Operations (1,370) (235,277) 2,501 (234,146)

Net Change in Cumulative Results of Operations 190 14,039 - 14,229

Cumulative Results of Operations: Ending Balance 3,473 44,854 - 48,327

Net Position $ 3,941 $ 172,512 $ - $ 176,453

The accompanying notes are an integral part of these statements.

84 Section II | Financial Information

Consolidated Statement of Changes in Net Position

For the Year Ended September 30, 2020 ($ in millions)

Item

Funds from

Dedicated

Collections

(Combined

Totals) (Note 17)

Funds from Other

Than Dedicated

Collections

(Combined

Totals) Eliminations

Consolidated

Total

Unexpended Appropriations:

Beginning Balances $ 180 $ 71,271 $ - $ 71,451

Appropriations Received 11 212,782 - 212,793

Appropriations Transferred In (Out) - (50) - (50)

Other Adjustments - (8,931) - (8,931)

Appropriations Used - (192,321) - (192,321)

Net Change in Unexpended Appropriations 11 11,480 - 11,491

Total Unexpended Appropriations: Ending Balance 191 82,751 - 82,942

Cumulative Results of Operations:

Beginning Balances 3,331 11,332 - 14,663

Other Adjustments - (340) - (340)

Appropriations Used - 192,321 - 192,321

Non-exchange Revenue 134 22,279 - 22,413

Donations and Forfeitures of Cash and Cash Equivalents 1 1 - 2

Transfers In (Out) without Reimbursement 748 (1,312) - (564)

Imputed Financing 68 2,916 (2,129) 855

Other

(182) (3,391) - (3,573)

Net Cost of Operations (817) (192,991) 2,129 (191,679)

Net Change in Cumulative Results of Operations (48) 19,483 - 19,435

Cumulative Results of Operations: Ending Balance 3,283 30,815 - 34,098

Net Position

$ 3,474 $ 113,566 $ - $ 117,040

The accompanying notes are an integral part of these statements.

USDA | 2021 Agency Financial Report 85

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2021 and 2020 ($ in millions)

Item

2021 2020

Budgetary

Non-Budgetary

Credit Reform

Financing

Accounts Budgetary

Non-Budgetary

Credit Reform

Financing Accounts

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority, Net (Discretionary and Mandatory) $ 97,027 $ 4,725 $ 69,378 $ 5,958

Appropriations (Discretionary and Mandatory) 273,612 6 211,126 1

Borrowing Authority (Discretionary and Mandatory) 13,207 14,904 35,525 15,654

Spending Authority from Offsetting Collections (Discretionary and Mandatory)

8,536 12,365 8,293 12,249

Total Budgetary Resources

392,382 32,000 324,322 33,862

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) 277,308 20,631 239,782 21,913

Unobligated Balance, End of Year:

Apportioned, Unexpired Accounts 73,017 10,675 47,873 11,257

Exempt from Apportionment, Unexpired Accounts 85 - 7 -

Unapportioned, Unexpired Accounts 8,241 694 4,437 692

Unexpired Unobligated Balance, End of Year 81,343 11,369 52,317 11,949

Expired Unobligated Balance, End of Year

33,731 - 32,223 -

Unobligated Balance, End of Year (Total)

115,074 11,369 84,540 11,949

Total Budgetary Resources

392,382 32,000 324,322 33,862

Outlays, Net, and Disbursements, Net:

Outlays, Net (Total) (Discretionary and Mandatory) 239,467 187,111

Distributed Offsetting Receipts (-)

(4,249)

(2,863)

Agency Outlays, Net (Discretionary and Mandatory)

$ 235,218

$ 184,248

Disbursements, Net (Total) (Mandatory) $ 4,025 $ 2,547

The accompanying notes are an integral part of these statements.

86 Section II | Financial Information

Notes to the Financial Statements

As of September 30, 2021, and 2020 ($ in millions)

NOTE 1: Summary of Significant Accounting Policies

Reporting Entity

USDA provides a wide variety of services in the United States and around the world. USDA is

organized into eight distinct mission areas and their agencies that execute these missions,

including staff offices for reporting listed below:

Farm Production and Conservation

• FPAC Business Center

• Farm Service Agency

• Commodity Credit Corporation

• Risk Management Agency

• Natural Resources Conservation Service

Food, Nutrition, and Consumer Services

• Food and Nutrition Service

Food Safety

• Food Safety and Inspection Service

Marketing and Regulatory Programs

• Agricultural Marketing Service

• Animal and Plant Health Inspection Service

Natural Resources and Environment

• Forest Service

Rural Development

Research, Education, and Economics

• Agricultural Research Service

• National Agricultural Statistics Service

• National Institute of Food and Agriculture

• Economic Research Service

Trade and Foreign Agricultural Affairs

• Foreign Agricultural Service

Staff Offices

USDA | 2021 Agency Financial Report 87

The reporting entity is a component of the U.S. Government. For this reason, some of the

assets and liabilities reported by the entity may be eliminated for Government-wide reporting

because they are offset by assets and liabilities of another U.S. Government entity. These

financial statements should be read with the realization that they are for a component of the

U.S. Government. See Note 28 for Disclosure Entities and Related Parties that are not part

of consolidation.

Consolidation

The financial statements consolidate results of all agencies and staff offices. The effects of

intradepartmental activity and balances are eliminated, except for the Statement of Budgetary

Resources (SBR) which is presented on a combined basis. The financial statements are prepared

in accordance with generally accepted accounting principles for the Federal Government.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions

that affect the amounts reported in the financial statements and accompanying notes. Actual

results could differ from those estimates.

Fund Balance with Treasury (FBWT) and Funds from Dedicated Collections

FBWT is an asset of a reporting entity and a liability of the General Fund. Similarly, investments

in Federal Government securities that are held by Dedicated Collections accounts are assets of

the reporting entity responsible for the Dedicated Collections and liabilities of the General Fund.

In both cases, the amounts represent commitments by the Government to provide resources for

particular programs, but they do not represent net assets to the Government as a whole.

When the reporting entity seeks to use FBWT or investments in Government securities to

liquidate budgetary obligations, Treasury will finance the disbursements in the same way it

finances all other disbursements, using some combination of receipts, other inflows, and

borrowing from the public (if there is a budget deficit).

Revenue and Other Financing Sources

As a component of the Government-wide reporting entity, the entity is subject to the Federal

budget process, which involves appropriations that are provided annually and appropriations that

are provided on a permanent basis. The financial transactions that are supported by budgetary

resources, which include appropriations, are generally the same transactions reflected in entity

and the Government-wide financial reports.

The reporting entity’s budgetary resources reflect past congressional action and enable the entity

to incur budgetary obligations, but they do not reflect assets to the Government as a whole.

88 Section II | Financial Information

Budgetary obligations are legal obligations for goods, services, or amounts to be paid based on

statutory provisions (e.g., Social Security benefits). After budgetary obligations are incurred,

Treasury will make disbursements to liquidate the budgetary obligations and finance those

disbursements in the same way it finances all disbursements, using some combination of

receipts, other inflows, and borrowing from the public (if there is a budget deficit).

Revenue from exchange transactions is recognized when persuasive evidence of an arrangement

exists, delivery has occurred or services have been rendered, sales price is fixed or determinable,

and collection is reasonably assured. In certain cases, the prices charged by the Department are

set by law or regulation, which for program and other reasons may not represent full cost. Prices

set for products and services offered through the Department’s working capital funds are

intended to recover the full costs incurred by these activities. Revenue from non-exchange

transactions is recognized when a specifically identifiable, legally enforceable claim to resources

arises, to the extent that collection is probable and the amount is reasonably estimable.

Appropriations are recognized as a financing source when used. An imputed financing source is

recognized for costs subsidized by other Government entities.

Investments

The Department is authorized to invest certain funds in excess of its immediate needs in

Treasury securities. Investments in non-marketable par value Treasury securities are classified as

held to maturity and are carried at cost. Investments in market-based Treasury securities are

classified as held to maturity and are carried at amortized cost. The amortized cost of securities is

based on the purchase price adjusted for amortization of premiums and accretion of discounts

using the straight-line method over the term of the securities.

Accounts Receivable

Accounts receivable are reduced to net realizable value by an allowance for uncollectible

accounts. The adequacy of the allowance is determined based on past experience and age of

outstanding balances.

Direct Loans and Loan Guarantees

Direct loans obligated and loan guarantees committed after FY 1991 are reported based on the

present value of the net cash-flows estimated over the life of the loan or guarantee. The difference

between the outstanding principal of the loans and the present value of their net cash inflows is

recognized as a subsidy cost allowance; the present value of estimated net cash outflows of the

loan guarantees is recognized as a liability for loan guarantees. The subsidy expense for direct or

guaranteed loans disbursed during the year is the present value of estimated net cash outflows for

those loans or guarantees. A subsidy expense also is recognized for modifications made during

the year to loans and guarantees outstanding and for reestimates made as of the end of the year to

the subsidy allowances or loan guarantee liability for loans and guarantees outstanding.

USDA | 2021 Agency Financial Report 89

Direct loans obligated and loan guarantees committed before FY 1992 are valued using either the

present-value or net realizable methods. Under the present-value method, the outstanding

principal of direct loans is reduced by an allowance equal to the difference between the

outstanding principal and the present value of the expected net cash flows. The liability for loan

guarantees is the present value of expected net cash outflows due to the loan guarantees. Under

the net realizable value method, the average rate of the last five years of write-offs is used.

Inventories and Related Property

Inventories to be consumed in the production of goods for sale or in the provision of services for

a fee are valued on the basis of historical cost using a first-in, first-out method.

Commodity inventory, referred to as goods held under price support and stabilization programs

in SFFAS No. 3, Accounting for Inventory and Related Property, issued by the FASAB,

represent commodities acquired by CCC for donation or price support purposes. Commodities

are eventually sold or otherwise disposed of to help satisfy economic goals. Acquisition is

generally made through commodity loan forfeitures, use of Commodity Certificate Exchange

(CCE), or by purchase of commodities on the open market.

Inventory purchases are initially recorded at acquisition cost, including transportation, plus

processing and packaging costs incurred after acquisition. Acquisition cost for loan forfeitures is

the amount of the loan settlement, excluding interest. The commodity is revalued at the lower of

cost or the net realizable value in accordance with SFFAS No. 3.

Commodity inventory is not held in reserve for future sale. All commodity inventory on hand at

year-end is anticipated to be donated or transferred during the next fiscal year. CCC has no

excess, obsolete or unserviceable inventory.

Property, Plant and Equipment

Property, Plant and Equipment (PP&E) are stated at cost less accumulated depreciation.

Depreciation is determined using the straight-line method over the estimated useful lives of the

assets. Useful lives for PP&E are disclosed in Note 9. Capitalization thresholds for personal

property and real property are $25,000; and $100,000 for internal use software. There are no

restrictions on the use or convertibility of PP&E.

Pension and Other Retirement Benefits

Pension and other retirement benefits (primarily retirement health care benefits) expense is

recognized at the time the employees’ services are rendered. The expense is equal to the actuarial

present value of benefits attributed by the pension plan’s benefit formula, less the amount

contributed by the employees. An imputed cost is recognized for the difference between the

expense and contributions made by and for employees.

90 Section II | Financial Information

Workers’ Compensation Benefits

The Federal Employees’ Compensation Act (FECA) provides wage replacement and medical

cost protection to covered Federal civilian employees injured on the job, employees who have

incurred a work-related occupational disease, and beneficiaries of employees whose death is

attributable to a job-related injury or occupational disease. The FECA program is administered

by the U.S. Department of Labor (DOL), which initially pays valid claims and subsequently

seeks reimbursement from the Federal agencies employing the claimants. DOL provides the

actuarial liability for claims outstanding at the end of each fiscal year. This liability includes the

estimated future costs of death benefits, workers’ wage replacement, medical, and miscellaneous

costs for approved compensation cases.

Funds from Dedicated Collections

In accordance with Statement of Federal Financial Accounting Standards (SFFAS) 43, Funds

from Dedicated Collections, USDA has reported the funds from dedicated collections for which

it has program management responsibility when the following three criteria are met: 1) a statute

committing the Federal Government to use specifically identified revenues and/or other

financing sources that are originally provided to the Federal Government by a non-Federal

source only for designated activities, benefits or purposes; 2) explicit authority for the fund to

retain revenues and/or other financing sources not used in the current period for future use to

finance the designated activities, benefits, or purposes; and 3) a requirement to account for and

report on the receipt, use, and retention of the revenues and/or other financing sources that

distinguishes the fund from the Federal Government’s general revenues.

Contingencies

Contingent liabilities are recognized when a past event or exchange transaction has occurred, a

future outflow or other sacrifice of resources is probable, and the future outflow or sacrifice of

resources is measurable.

Allocation Transfers

USDA is a party to allocation transfers with other Federal agencies as both a transferring (parent)

entity and/or a receiving (child) entity. Allocation transfers are legal delegations by one department

of its authority to obligate budget authority and outlay funds to another department. A separate

fund account (allocation account) is created in the U.S. Treasury as a subset of the parent fund

account for tracking and reporting purposes. All allocation transfers of balances are credited to this

account, and subsequent obligations and outlays incurred by the child entity are charged to this

allocation account as they execute the delegated activity on behalf of the parent entity.

USDA allocates funds, as the parent, to a number of U.S. Government agencies, including:

Department of the Interior, Department of Defense, Department of Housing and Urban

USDA | 2021 Agency Financial Report 91

Development, Agency for International Development, and the Small Business Administration.

USDA receives allocation transfers, as the child, from the Department of Labor, Department of

Transportation, Department of the Interior, Agency for International Development, Economic

Development Administration, Appalachian Regional Commission, and the Delta

Regional Authority.

Inter-Entity Costs

Goods and services are received from other federal entities at no cost or at a cost less than the

full cost to the providing federal entity. Consistent with accounting standards, certain costs of the

providing entity that are not fully reimbursed by the Department are recognized as imputed cost

[in the Statement of Net Cost] and are offset by imputed revenue [in the Statement of Changes in

Net Position]. Such imputed costs and revenues relate to business-type activities (if applicable),

employee benefits, and claims to be settled by the Treasury Judgment Fund. However,

unreimbursed costs of goods and services other than those identified above are not included in

our financial statements.

Fiduciary Activities

Fiduciary activities are the collection or receipt, and the management, protection, accounting,

investment, and disposition by the Federal Government of cash or other assets in which non

Federal individuals or entities have an ownership interest that the Federal Government must

uphold. Fiduciary assets are not assets of the Federal Government and are not recognized on the

balance sheet.

Asbestos-Related Cleanup Costs

Effective October 1, 2012, Technical Bulletin (TB) 2006-1, Recognition and Measurement of

Asbestos-Related Cleanup Costs, as amended, requires an estimate of both friable and non-

friable asbestos-related cleanup costs; recognition of a liability and related expense for those

costs that are both probable and reasonably estimable; and disclosure of information related to

friable and non-friable asbestos-related cleanup costs that are probable but not reasonably

estimable in a note to the financial statements.

Deferred Maintenance and Repairs

Deferred maintenance and repairs are such that were not performed when they should have been

or were scheduled to be and which are put off or delayed for a future period. Maintenance and

repairs are activities directed toward keeping fixed assets in an acceptable condition. Activities

include preventive maintenance; replacement of parts, systems, or components; and other

activities needed to preserve or maintain the asset. Maintenance and repairs, as distinguished

from capital improvements, exclude activities directed towards expanding the capacity of an

asset or otherwise upgrading it to serve needs different from, or significantly greater than, its

92 Section II | Financial Information

current use. SFFAS 42, Deferred Maintenance and Repairs: Amending Statements of Federal

Financial Accounting Standards 6, 14, 29 and 32, became effective October 1, 2014. Estimates

for deferred maintenance and repairs are disclosed in required supplementary information.

Reconciliation of Net Cost to Net Outlays

SFFAS 53, Budget and Accrual Reconciliation (BAR) amends requirements for a reconciliation

between budgetary and financial accounting information established by SFFAS 7, Accounting

for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and

Financial Accounting. The BAR explains the relationship between the entity’s net outlays on a

budgetary basis and the net cost of operations during the reporting period.

Insurance Programs

The Federal Crop Insurance Program is considered a short-duration exchange transaction

insurance program. The crop insurance policies insure against unexpected declines in yield

and/or price due to natural causes. The insurance policies are structured as a contract between

Approved Insurance Providers (AIPs) and producers, with the FCIC providing reinsurance to

AIPs. Crop insurance policies automatically renew each year, unless producers cancel them by a

published annual deadline. Under the reinsurance agreements, AIPs agree to deliver insurance

products to eligible entities under certain terms and conditions. The Administrative and

Operating (A&O) subsidy compensates the AIPs for selling and servicing crop insurance

policies, including the direct settling of claims. Producers pay a portion of premium and fees to

participate in the insurance program benefit payments. FCIC and AIPs share in underwriting

gains or losses. The underwriting risk for the crop insurance program is shared by FCIC and the

AIPs. The AIPs generally retain approximately 80 to 85 percent of the premium, and the risk

associated with the premium. FCIC provides AIPs stop-loss reinsurance for the risk associated

with their retained premium.

Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow

certain presentations and disclosures to be modified, if needed, to prevent the disclosure of

classified information.

Reclassifications

The Balance Sheet, Statement of Changes in Net Position and notes on Investments, Schedule for

Reconciling Loan Guarantee Liability Balances (Post-1991 Loan Guarantees), General Property,

Plant and Equipment (PP&E), Net, Liabilities Not Covered by Budgetary Resources, Other

Liabilities and Funds from Dedicated Collections were reclassified to conform to OMB Circular

A-136, Financial Reporting Requirements. The Federal Debt and Interest Payable note was

reclassified to present other debt as other liabilities.

USDA | 2021 Agency Financial Report 93

NOTE 2: Non-Entity Assets

Non-entity assets include proceeds from the sale of timber payable to the U.S. Treasury, timber

contract performance bonds, employer contributions and payroll taxes withheld for agencies

serviced by the National Finance Center, rural housing escrow, interest, fines, and penalties.

Item

FY 2021 FY 2020

Intragovernmental:

Fund Balance with Treasury $ 379 $ 319

Accounts Receivable 529 296

Total Intragovernmental 908 615

Cash and Other Monetary Assets 51 46

Accounts Receivable 267 205

Total Non-Entity Assets 1,226 866

Total Entity Assets

359,304 313,028

Total Assets

$ 360,530 $ 313,894

NOTE 3: Fund Balance with Treasury

Borrowing Authority not yet Converted to Fund Balance represents unobligated and obligated

amounts recorded at year-end that will be funded by future borrowings. Non-Budgetary Fund

Balance with Treasury includes special fund receipt accounts, and clearing and suspense account

balances awaiting disposition or reclassification.

Item FY 2021 FY 2020

Status of Fund Balance with Treasury

Unobligated Balance

Available $ 83,777 $ 59,138

Unavailable 42,751 37,446

Obligated Balance Not Yet Disbursed 110,799 110,813

Borrowing Authority Not Yet Converted to Fund Balance (44,412) (53,640)

Authority Granted Prior to Credit Reform for Rental Assistance Grants (18) (23)

Non-Budgetary Fund Balance with Treasury

44,713 41,684

Total

$ 237,610 $ 195,418

NOTE 4: Cash and Other Monetary Assets

For FY 2021 and FY 2020, cash and other monetary assets consists of Federal crop insurance

escrow of $217 million and $299 million, deposits in transit of $30 million and $36 million, and

single-family housing escrow of $51 million and $46 million, respectively.

Item

FY 2021 FY 2020

Cash

$ 298 $ 381

94 Section II | Financial Information

NOTE 5: Investments

FY 2021

Cost/

Acquisition

Value

Amortization

Method

Amortized

(Premium)

Discount

Interest

Receivable

Net

Investments

Unrealized

Gain/(Loss)

Market/Fair

Value

Intragovernmental Securities and Investments:

Non-marketable - Market-based $ 254 Straight Line $ 1 $ 1 $ 256 $ - $ 256

Total Intragovernmental Securities and Investments 254 1 1 256 - 256

Other Securities and Investments:

Available for Sale:

Equity Securities 3 - - 3 - 3

Total Other Securities and Investments 3 - - 3 - 3

Fair Value Measurement of Securities and Investments Other

Non-Federal Securities Listed by Investment Type

3

Total Fair Value Measurements

3

Reconciliation of Investment Activity for Non-Federal Securities:

Beginning Balance 3

Ending Balance

$ 3

FY 2020

Cost/

Acquisition

Value

Amortization

Method

Amortized

(Premium)

Discount

Interest

Receivable

Net

Investments

Unrealized

Gain/(Loss)

Market/Fair

Value

Intragovernmental Securities and Investments:

Non-marketable - Market-based

$ 243

Straight Line

$ 1 $ 1 $ 245 $ - $ 245

Total Intragovernmental Securities and Investments

243

1 1 245 - 245

Other Securities and Investments:

Available for Sale:

Equity Securities 3 - - 3 - 3

Total Other Securities and Investments 3 - - 3 - 3

Fair Value Measurement of Securities and Investments Other

Non-Federal Securities Listed by Investment Type

3

Total Fair Value Measurements

$ 3

USDA | 2021 Agency Financial Report 95

Other securities and investments include equity securities held by the Alternative Agricultural

Research and Commercialization Corporation (AARCC). These securities represent shares the

AARCC program purchased as part of the original investment into non-publicly traded

companies. The program along with the investments is currently going through a review process

with regards to the viability of the remaining investments and their value.

The U. S. Treasury does not set aside assets to pay future expenditures associated with funds

from dedicated collections; instead the cash generated from funds from dedicated Treasury

securities are issued to the funds from dedicated collections as evidence of the dedicated receipts;

Treasury securities held by the funds for dedicated collections are an asset of the fund(s) and a

liability of the U. S. Treasury, and will be eliminated by consolidation in the U. S. Government-

wide financial statements; and when the funds from dedicated collections redeems their Treasury

securities to make expenditures, the U. S. Treasury will finance those expenditures in the same

manner that it finances all other expenditures.

NOTE 6: Accounts Receivable, Net

FY 2021

Accounts Receivable,

Gross

Allowance for

Uncollectible Accounts

Accounts Receivable,

Net

Intragovernmental $ 320 $ - $ 320

With the Public 5,409 (56) 5,353

Total

$ 5,729 $ (56) $ 5,673

Criminal Restitution $ 5 $ (5) $ -

FY 2020

Accounts Receivable,

Gross

Allowance for

Uncollectible Accounts

Accounts Receivable,

Net

Intragovernmental $ 61 $ - $ 61

With the Public

3,872 (60) 3,812

Total

$ 3,933 $ (60) $ 3,873

Criminal Restitution

$ 7 $ (7) $ -

NOTE 7: Loans Receivable, Net and Loan Guarantee Liabilities

Direct loan obligations and loan guarantee commitments made after fiscal year 1991, and the

resulting direct loans or loan guarantees, are governed by the Federal Credit Reform Act of 1990,

as amended.

Direct loan obligations or loan guarantee commitments made pre-1992 are reported at either net

present-value or net realizable value.

The net present value of Direct Loan and Loan Guarantees, Net is not necessarily representative

of the proceeds that might be expected if these loans were sold on the open market.

The Department offers direct and guaranteed loans through credit programs in the FPAC mission

area through the FSA and the CCC, and in the RD mission area.

96 Section II | Financial Information

Farm Production and Conservation (FPAC) Mission Area

The FPAC mission area helps keep America’s farmers and ranchers in business as they face the

uncertainties of weather and markets. FPAC delivers commodity, credit, conservation, disaster,

and emergency assistance programs that help strengthen and stabilize the agricultural economy.

FPAC contributes to the vitality of the farm sector with programs that encourage the expansion

of export markets for U.S. agriculture.

FSA offers direct and guaranteed loans to farmers who are temporarily unable to obtain private,

commercial credit, and nonprofit entities that are engaged in the improvement of the nation’s

agricultural community. Often, FSA borrowers are beginning farmers who cannot qualify for

conventional loans due to insufficient financial resources. Additionally, the agency helps

established farmers who have suffered financial setbacks from natural disasters or have limited

resources to maintain profitable farming operations. FSA officials also provide borrowers with

supervision and credit counseling.

FSA’s mission is to provide supervised credit. FSA works with each borrower to identify

specific strengths and weaknesses in farm production and management, and provides alternatives

to address weaknesses. FSA is able to provide certain loan servicing options to assist borrowers

whose accounts are distressed or delinquent. These options include reamortization, restructuring,

loan deferral, lowering interest rates, acceptance of easements, and debt write-downs. The

eventual goal of FSA’s farm credit programs is to graduate its borrowers to commercial credit.

CCC’s foreign programs provide economic stimulus to both the U.S. and foreign markets, while

giving humanitarian assistance to the most disadvantaged people throughout the world. CCC

offers both credit guarantee and direct credit programs for buyers of U.S. exports, suppliers, and

sovereign countries in need of food assistance.

CCC permits debtor nations to reschedule debt under the aegis of the Paris Club. The Paris Club

is an informal group of official creditors whose role is to facilitate debt treatments based on an

internationally recognized set of rules and principles, facilitated by the senior officials of the

French Treasury. Its sole purpose is to assess, on a case-by-case basis, liquidity problems faced

by economically disadvantaged countries. The general premise of Paris Club is to provide

disadvantaged nations short-term liquidity relief to enable them to reestablish their credit

worthiness. The U.S. Departments of State and Treasury lead the U.S. Delegation and

negotiations for all U.S. Agencies.

CCC also provides loans for Farm and Sugar Storage Facilities (FSFL). FSFL provides low

interest financing for producers to build or upgrade farm storage and handling facilities. FSFL

program regulations were amended during FY 2017 to add eligibility for portable storage

structures, portable equipment, and storage and handling trucks, and to reduce the down payment

and documentation requirements for a “microloan” category of FSFLs up to $50,000.

USDA | 2021 Agency Financial Report 97

Exhibit 25: Farm Production and Conservation List of Direct Loan and Loan Guarantee Programs

Farm Service Agency

Direct Farm Ownership

Direct Farm Operating

Direct Emergency Loans

Direct Indian Land Acquisition

Direct Boll Weevil Eradication

Direct Seed Loans to Producers

Direct Conservation

Guaranteed Farm Operating Subsidized/Unsubsidized

Guaranteed Farm Ownership Unsubsidized

Guaranteed Conservation

American Recovery and Reinvestment Fund

Commodity Credit Corporation

General Sales Manager Export Credit Guarantee

Program

Facility Program Guarantee

P.L. 480 Title 1 Program

Direct Farm Storage Facility

Direct Sugar Storage Facilities

Rural Development (RD) Mission Area

RD offers both direct and guaranteed loans administered through three agencies with unique

missions to bring prosperity and opportunity to rural areas. Each year, RD programs create or

preserve tens of thousands of rural jobs and provide or improve the quality of rural housing,

business, and utilities. To leverage the impact of its programs, RD is working with state, local,

and Indian tribal governments, as well as private and nonprofit organizations and user-owned

cooperatives. RD is able to provide certain loan servicing options to borrowers whose accounts

are distressed or delinquent. These options include reamortization, restructuring, loan deferral,

lowering interest rate, acceptance of easements, and debt write-downs. The choice of servicing

options depends on the loan program and the individual borrower.

Rural Housing programs provide affordable, safe, and sanitary housing and essential community

facilities to rural communities. They also help finance new or improved housing for moderate,

low, and very low-income families each year. Other programs help rural communities to finance,

construct, enlarge or improve fire stations, libraries, hospitals and medical clinics, industrial

parks, and other community facilities.

Rural Business programs promote a dynamic business environment in rural America. These

programs work in partnership with the private sector and community-based organizations to

provide financial assistance and business planning. They also provide technical assistance to

rural businesses and cooperatives, conduct research into rural economic issues, and provide

cooperative educational materials to the public.

Rural Utilities programs help to improve the quality of life in rural America through a variety of

loan programs for electric energy, telecommunications, and water and environmental projects.

These programs leverage scarce Federal funds with private capital for investing in rural

infrastructure, technology, and development of water resources.

98 Section II | Financial Information

Exhibit 26: Rural Development List of Direct Loan and Loan Guarantee Programs

Rural Housing Program

Single Family Housing Direct Loans

(including Self-Help Loans)

Single Family Housing Loan

Guarantees

Single Family Housing Repair Loans

Rural Rental Housing Direct Loan

Rural Rental Housing Loan

Guarantees

Farm Labor Housing Loans

Community Facilities Direct Loans

and Loan Guarantees

Rural Business Program

Business and Industry Loan

Guarantees

Intermediary Relending Program

Loans

Rural Microentrepreneur Assistance

Program

Rural Economic Development Loans

Rural Energy for America Program

Loan Guarantees

Biorefinery Renewable Chemical, and

Bio-based Product Manufacturing

Assistance Program Loan Guarantees

Rural Utilities Program

Water and Environmental

Direct Loans, Loan

Guarantees

Rural Broadband Direct

Loans

Electric and

Telecommunications

Direct Loans and Loan

Guarantees

Loan Modifications

Multi-Family Housing direct loan modifications related to the revitalization program, which

began in FY 2006, continued through FY 2021. In this program, Rural Development provides

restructured loans and grants to development owners to revitalize multi-family housing

development projects in order to extend the affordable use without displacing tenants due to the

increased rent.

The Debt Reduction Fund is used to account for CCC’s “modified debt.” Debt is considered to

be modified if the original debt has been reduced or the interest rate of the agreement changed. In

contrast, when debt is “rescheduled,” only the date of payment is changed. Rescheduled debt is

carried in the original fund until paid. With one exception, all outstanding CCC modified debt is

carried in the Debt Reduction Fund and is governed by the Federal Credit Reform Act of 1990,

as amended. CCC modified debt for several P.L. 480 loans to El Salvador during FY 2021 under

the Tropical Forest and Coral Reef Conservation Act (TFCCA). The modification cost for these

loans was $15 million.

FSA executed a modification during FY 2021 under the American Rescue Plan (ARP). Under

ARP, USDA would pay 120% of the outstanding loans to socially disadvantaged borrowers in

the following categories: Agricultural Credit Insurance Fund (ACIF) direct loans (ownership,

operating and emergency), ACIF guaranteed loans (ownership and operating) and Farm Storage

Facility Loans. While the modification was executed, the loan repayments have not taken place

due to ongoing litigation.

USDA | 2021 Agency Financial Report 99

Foreclosed Property

As of September 30, 2021 and 2020, foreclosed property consisted of 1,095 and 1,267 rural

single family housing dwellings, with an average holding period of 16 months for both years,

respectively. As of September 30, 2021 and 2020, FSA-Farm Loan Program properties consist

primarily of 127 and 125 farms, respectively. The average holding period for these properties in

inventory for FY 2021 and FY 2020 was 77 months. Certain properties can be leased to eligible

individuals.

Other Information

Non-performing loans are defined as receivables that are in arrears by 90 or more days or are on

rescheduling agreements until such time two consecutive payments have been made following

the rescheduling. When RD, FSA and CCC calculate loan interest income, however, the

recognition of revenue is deferred. Late interest is accrued on arrears.

Approximately $13,548 million and $14,328 million of Rural Housing borrowers’ unpaid loan

principal as of September 30, 2021 and 2020 were receiving interest credit. If those loans receiving

interest credit had accrued interest at the full-unreduced rate, interest income would have been

approximately $604 million and $666 million higher for FY 2021 and FY 2020, respectively.

At the end of FY 2021 and FY 2020, the RD portfolio contained approximately 53,656 and 48,280

restructured loans with an outstanding unpaid principal balance of $3,407 million and

$2,584 million, respectively. At the end of FY 2021 and FY 2020, the farm loan portfolio

contained approximately 12,888 and 17,836 restructured loans with an outstanding unpaid

principal balance of $1,073 million and $1,402 million, respectively. Direct credit and credit

guarantee principal receivables in the food aid and export programs under rescheduling agreements

as of September 30, 2021 and 2020, were $829 million and $642 million, respectively.

Beginning in FY 2012, advance payments surpassed the loans receivable balance in the Rural

Utilities Liquidating Fund. This was due to an increased volume in advance payments and a

normal reduction to the Liquidating Portfolio. The Omnibus Budget Act of 1987, section 313,

authorized the accumulation of Cushion of Credit (CoC) in the Revolving Fund. Borrowers may

make advance payments up to their liquidating and financing total Rural Utilities Service debt.

To accurately represent the value of Electric and Telecommunication assets, RD reports the CoC

amounts as a separate line item in Table 1.

Subsidy rates are used to compute each year’s subsidy expenses. The subsidy rates pertain only

to the FY 2021 cohorts. These rates cannot be applied to the direct and guaranteed loans

disbursed during the current reporting year to yield the subsidy expense. The subsidy expense for

new loans reported in the current year could result from disbursements of loans from both

current year cohorts and prior-year cohorts. The subsidy expense reported in the current year also

includes reestimates.

100 Section II | Financial Information

Table 1: Loans Receivable, Net

FY 2021 Direct Loans

Loans

Receivable,

Gross

Interest

Receivable

Foreclosed

Property

Present Value

Allowance

Direct Loans,

Net

Obligated Pre-1992

Farm $ 134 $ 96 $ 7 $ (98) $ 139

Food Aid 254 5 - (53) 206

Housing 5,332 695 8 (627) 5,408

Community Facility 6 - - - 6

Electric 1,805 2 - (1,427) 380

Telecommunications 28 - - - 28

Water and Environmental 167 2 - - 169

Intermediary Relending

1 - - - 1

Pre-1992 Total

7,727 800 15 (2,205) 6,337

Obligated Post-1991

Farm 15,155 330 10 (175) 15,320

Food Aid 420 8 - (74) 354

Housing 17,509 433 63 (1,755) 16,250

Community Facility 11,151 106 - (188) 11,069

Electric 49,235 30 - (1,171) 48,094

Telecommunications 2,567 2 - 39 2,608

Water and Environmental 12,897 87 - 429 13,413

Intermediary Relending 321 2 - (63) 260

Business and Industry 44 - - (6) 38

Economic Development

202 - - (17) 185

Post-1991 Total

109,501 998 73 (2,981) 107,591

Cushion of Credit (1,268) - - - (1,268)

Total Direct Loan Program Receivables 115,960 1,798 88 (5,186) 112,660

Defaulted Guarantee Loans

Pre-1992 396 18 - (246) 168

Pre-1992 Total 396 18 - (246) 168

Post-1991

Farm 253 90 - (323) 20

Housing 174 - - (137) 37

Community Facility 8 - - - 8

Business and Industry 217 - - (53) 164

Post-1991 Total 652 90 - (513) 229

Total Defaulted Guarantee Loans 1,048 108 - (759) 397

Loans Exempt from Credit Reform Act:

Commodity Loans 391 2 - - 393

Total Loans Exempt 391 2 - - 393

Total Loans Receivable, Net

$ 113,450

USDA | 2021 Agency Financial Report 101

FY 2020 Direct Loans

Loans Receivable,

Gross

Interest

Receivable

Foreclosed

Property

Present Value

Allowance Direct Loans, Net

Obligated Pre-1992

Farm $ 161 $ 97 $ 7 $ (96) $ 169

Food Aid 451 7 - (72) 386

Housing 5,610 763 6 (613) 5,766

Community Facility 8 - - - 8

Electric 1,854 2 - (1,427) 429

Telecommunications 40 - - - 40

Water and Environmental 203 2 - - 205

Intermediary Relending

2 - - - 2

Pre-1992 Total

8,329 871 13 (2,208) 7,005

Obligated Post-1991

Farm 14,026 309 10 (576) 13,769

Food Aid 479 9 - (80) 408

Housing 17,803 465 77 (2,301) 16,044

Community Facility 10,536 72 - (120) 10,488

Electric 47,011 27 - (1,169) 45,869

Telecommunications 2,735 1 - 10 2,746

Water and Environmental 13,204 88 - 590 13,882

Intermediary Relending 342 2 - (70) 274

Business and Industry 46 - - (6) 40

Economic Development

200 - - (16) 184

Post-1991 Total

106,382 973 87 (3,738) 103,704

Cushion of Credit (1,798) - - - (1,798)

Total Direct Loan Program Receivables 112,913 1,844 100 (5,946) 108,911

Defaulted Guarantee Loans

Post-1991

Farm 226 76 - (277) 25

Export 387 17 - (238) 166

Housing 126 - - (94) 32

Community Facility 8 - - - 8

Business and Industry 227 - - (43) 184

Post-1991 Total 974 93 - (652) 415

Total Defaulted Guarantee Loans 974 93 - (652) 415

Loans Exempt from Credit Reform Act:

Commodity Loans 902 11 - (4) 909

Total Loans Exempt 902 11 - (4) 909

Total Loans Receivable, Net

$ 110,235

Table 2: Total Amount of Direct Loans Disbursed (Post-1991)

Direct Loan Programs

FY 2021 FY 2020

Farm $ 3,399 $ 3,349

Housing 1,086 1,255

Community Facility 1,259 1,278

Electric 4,082 5,177

Telecommunications 206 150

Water and Environmental 1,022 1,271

Intermediary Relending 12 16

Business and Industry 2 5

Economic Development

40 39

Total Direct Loans Disbursed $ 11,108 $ 12,540

102 Section II | Financial Information

Table 3: Subsidy Expense for Direct Loan Programs by Component

FY 2021 Direct Loan Programs

Interest

Differential Defaults

Fees and

Other

Collections Other

Subtotal

Subsidy

Total

Modifications

Interest

Rate

Reestimates

Technical

Reestimates

Total

Reestimates

Total

Subsidy

Expense

Farm $ (28) $ 48 $ (1) $ 4 $ 23 $ (28) $ (608) $ 327 $ (281) $ (286)

Export - - - - - - - (6) (6) (6)

Food Aid - - - - - - - 9 9 9

Housing 32 47 - 3 82 3 (92) (110) (202) (117)

Community Facility (138) 45 - 14 (79) - 168 (44) 124 45

Electric (147) 6 (18) (17) (176) - (348) (278) (626) (802)

Telecommunications 1 9 - (1) 9 - (3) (32) (35) (26)

Water and Environmental 53 1 - (37) 17 - 27 198 225 242

Intermediary Relending 3 - - - 3 - (2) - (2) 1

Business and Industry - - - - - - - - - -

Economic Development

6 - - - 6 - (1) (1) (2) 4

Total Direct Loan Subsidy Expense

$ (218) $ 156 $ (19) $ (34) $ (115) $ (25) $ (859) $ 63 $ (796) $ (936)

FY 2020 Direct Loan Programs

Interest

Differential Defaults

Fees and

Other

Collections Other

Subtotal

Subsidy

Total

Modifications

Interest

Rate

Reestimates

Technical

Reestimates

Total

Reestimates

Total

Subsidy

Expense

Farm $ (39) $ 76 $ (1) $ 7 $ 43 $ - $ (73) $ 187 $ 114 $ 157

Export - - - - - - - 8 8 8

Food Aid - - - - - - - 2 2 2

Housing 67 52 - 5 124 7 (71) (67) (138) (7)

Community Facility (134) 42 - 6 (86) - 152 (275) (123) (209)

Electric (172) 14 (49) (25) (232) - (126) 1,307 1,181 949

Telecommunications - 2 - (2) - - (30) 10 (20) (20)

Water and Environmental 70 1 - (47) 24 - 50 (917) (867) (843)

Intermediary Relending 4 - - - 4 - (2) 1 (1) 3

Business and Industry - - - - - - - 1 1 1

Economic Development 6 - - - 6 - - - - 6

Total Direct Loan Subsidy Expense $ (198) $ 187 $ (50) $ (56) $ (117) $ 7 $ (100) $ 257 $ 157 $ 47

USDA | 2021 Agency Financial Report 103

The FY 2021 reestimate process resulted in a $796 million decrease in the post-1991 estimated

cost of the direct loan portfolio, primarily comprised of the following programs:

In the farm category, the total reestimate was ($281) million. Of that amount, ($261) million is

attributable to the ACIF direct farm loans and ($20) million is attributable to Farm Storage

Facility Loans. The majority of the farm loan reestimate is in farm ownership, which had a net

reestimate of ($276) million (($306) million technical and $30 million interest on the reestimate).

The downward technical reestimate was largely attributable to the 2020 cohort, which had a

technical reestimate of ($393) million. The single effective rate (SER) decreased by

2.06 percentage points, thereby increasing the present value of net cash inflows, and leading to

this large downward reestimate.

This large downward reestimate was offset by a large technical upward reestimate for the

FY 2021 cohort of $74 million. The actual 2021 cohort borrower interest rate of 2.42% was

0.36 percentage points less than the borrower interest rate assumed in the President’s Budget

2021 formulation estimate of 2.78%. Since the cohort SER of 2.28% remained unchanged from

the 2021 budget formulation estimate, this creates an implied positive spread of 0.14% in the

FY 2021 cohort reestimate, in contrast to the 0.50% spread assumed in the 2021 budget

formulation estimate. As a result, total scheduled interest as a percentage of total disbursements

decreased from 53.6% to 46.7%, thereby leading to a large upward reestimate.

The Direct Single-Family Housing program has a downward reestimate of $(203) million.

The key drivers of the downward impact were the updated recapture recoveries, lag on

foreclosure, actual full payoff prepayments, and updated disbursements from FY 2020.

The forecasted recapture recoveries and prepayments increased, which resulted in a downward

impact on the total reestimate amount. The SER also decreased, causing the reestimate rate to

decrease. As the SER decreases, the net present value of the cash flows increases as they are

being discounted at a lower rate, thereby reducing the subsidy rate.

The Direct Community Facility program has an overall upward reestimate of $124 million.

The upward reestimate was primarily due to updated interest rates. For the majority of the years,

the interest rate decreased which caused an overall increase in subsidy rates. When subsidy rates

increase, the net present value of the cash flows decrease resulting in an upward reestimate.

The Direct Electric program had an overall downward reestimate of $(626) million which is

comprised of a $(255.1) million downward reestimate in the FFB program, a $(423.7) million in

the FFB Underwriter program, and a $45 million upward reestimate in the FFB Note Extension

program. One of the main drivers of the downward reestimates in all Direct Electric programs

was the increase in the undiscounted prepayments curves, which are based on actual

prepayments and are used to project future cashflows. The downward reestimate was also caused

by the updated SER, which primarily decreased. As the SER decreases, the cost of borrowing for

104 Section II | Financial Information

the agency decreases as well, causing a downward reestimate as the net present value of cash

flows increases due to the lower discount rate.

The Direct Water and Waste Disposal program had an overall upward reestimate of $226 million.

The upward reestimate was primarily attributed to the Miscellaneous Inflows curves decreasing

which are based on actual data and are used to project future cashflows from Miscellaneous

Inflows. The Miscellaneous Inflows represent non-routine cash transactions such as

consolidations. Another contributing factor to the overall upward reestimate was the decrease in

interest rates that were lower than the rates the government uses when they borrow from Treasury.

Table 4: Subsidy Rates for Direct Loans by Program and Component (percentage)

FY 2021

Interest

Differential Defaults

Fees and

Other

Collections Other Total

Direct Loan Programs

Farm Ownership (6.33) 0.23 - 0.29 (5.81)

Farm Operating (2.89) 4.84 - 0.42 2.37

Emergency Disaster (11.79) 10.37 - 1.97 0.55

Indian Tribe Land Acquisition (41.89) - - - (41.89)

Boll Weevil Eradication (0.07) - - (0.09) (0.16)

Indian Highly Fractionated Land 16.14 0.08 - (1.38) 14.84

Heirs Property Relending Program 16.14 0.08 - (1.38) 14.84

Farm Storage Facility Loan (0.54) - (0.27) (0.04) (0.85)

Sugar Storage Facility Loan Program (2.06) - - 0.01 (2.05)

Multifamily Housing Revitalization Seconds 45.67 0.60 - 0.01 46.28

Multifamily Revitalization Zero 40.96 0.52 - (0.22) 41.26

Community Facility Loans (13.65) 4.92 - 2.17 (6.56)

Section 502 Single-Family Housing 0.53 5.16 - (0.15) 5.54

Section 515 Multi-Family Housing 16.88 1.27 - (1.43) 16.72

Section 504 Housing Repair 10.39 (0.02) - (2.46) 7.91

Section 514 Farm Labor Housing 18.33 0.23 - (0.37) 18.19

Section 524 Site Development 0.43 5.92 - 0.75 7.10

Section 523 Self-Help Housing 0.46 4.84 - 0.08 5.38

Single-Family Housing Credit Sales (7.38) 2.18 - 2.74 (2.46)

Rural Microenterprise Direct Loans 1.07 2.07 - - 3.14

Intermediary Relending Program 15.17 1.64 - (1.25) 15.56

Rural Economic Development Loans 9.84 0.01 - (0.30) 9.55

Water and Environmental 0.66 0.12 - (2.31) (1.53)

FFB Electric Loans (4.56) 0.01 - (0.42) (4.97)

Treasury Telecommunication Loans 0.02 0.71 - (0.07) 0.66

FFB Telecommunications Loans (1.12) 0.17 - (2.24) (3.19)

FFB Guaranteed Underwriting - 1.38 (1.95) - (0.57)

Rural Energy Savings Program 9.42 1.23 - (0.40) 10.25

Broadband Treasury Rate Loans 0.01 17.16 - (0.32) 16.85

Reconnect Direct Loans 3.11 24.72 - (0.36) 27.47

Reconnect Grant Assisted Loans - 24.72 - (0.09) 24.63

USDA | 2021 Agency Financial Report 105

Table 5: Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991) Direct Loans

Item

FY 2021 FY 2020

Beginning Balance of the Subsidy Cost Allowance $ 4,391 $ 4,611

Add: Total Subsidy Expense for Direct Loans Disbursed During the Year As Shown in Table 3 (115) (117)

Adjustments

Loan Modifications (25) 7

Fees Received 76 78

Loans Written Off (171) (141)

Subsidy Allowance Amortization (284) 146

Other

663 (350)

Total Subsidy Cost Allowance Before Reestimates 4,535 4,234

Add or Subtract Total Subsidy Reestimates As Shown in Table 3

(796) 157

Ending Balance of the Subsidy Cost Allowance

$ 3,739 $ 4,391

106 Section II | Financial Information

Table 6: Guaranteed Loans Outstanding

FY 2021

Pre-1992 Outstanding

Principal, Face Value

Post-1991

Outstanding Principal,

Face Value

Total Outstanding

Principal, Face Value

Pre-1992 Outstanding

Principal, Guaranteed

Post-1991

Outstanding Principal,

Guaranteed

Total Outstanding

Principal, Guaranteed

Loan Guarantee Programs

Farm $ 1 $ 18,957 $ 18,958 $ 1 $ 17,169 $ 17,170

Export - 1,981 1,981 - 1,938 1,938

Housing - 123,431 123,431 - 111,052 111,052

Community Facility - 1,173 1,173 - 1,039 1,039

Electric - 139 139 - 139 139

Water and Environmental - 108 108 - 95 95

Business and Industry - 9,276 9,276 - 6,876 6,876

Total Guarantees Outstanding $ 1 $ 155,065 $ 155,066 $ 1 $ 138,308 $ 138,309

FY 2020

Pre-1992 Outstanding

Principal, Face Value

Post-1991

Outstanding Principal,

Face Value

Total Outstanding

Principal, Face Value

Pre-1992 Outstanding

Principal, Guaranteed

Post-1991

Outstanding Principal,

Guaranteed

Total Outstanding

Principal, Guaranteed

Loan Guarantee Programs

Farm $ 1 $ 18,738 $ 18,739 $ 1 $ 16,933 $ 16,934

Export - 2,182 2,182 - 2,135 2,135

Housing - 127,859 127,859 - 115,036 115,036

Community Facility - 1,165 1,165 - 1,035 1,035

Electric - 146 146 - 147 147

Water and Environmental - 94 94 - 83 83

Business and Industry - 8,114 8,114 - 5,900 5,900

Total Guarantees Outstanding $ 1 $ 158,298 $ 158,299 $ 1 $ 141,269 $ 141,270

Table 7: Guaranteed Loans Disbursed

Item FY 2021 FY 2020

Principal, Face Value

Disbursed

Principal, Guaranteed

Disbursed

Principal, Face Value

Disbursed

Principal, Guaranteed

Disbursed

Loan Guarantee Programs

Farm $ 3,577 $ 3,239 $ 3,915 $ 3,538

Export 2,004 1,960 2,232 2,184

Housing 23,875 21,488 22,102 19,892

Community Facility 105 93 53 47

Water and Environmental 20 18 20 17

Business and Industry 2,531 1,931 1,234 942

Total Guaranteed Loans Disbursed $ 32,112 $ 28,729 $ 29,556 $ 26,620

USDA | 2021 Agency Financial Report 107

Table 8: Liability for Loan Guarantees (Present Value Method For Pre-1992 Guarantees)

FY 2021

Liabilities for Losses on

Pre- 1992 Guarantees Present Value

Liabilities for Loan Guarantees on

Post- 1991 Guarantees Present Value Total Liabilities for Loan Guarantees

Loan Guarantee Programs

Farm $ - $ 177 $ 177

Export - 3 3

Housing - (1,144) (1,144)

Community Facility - 30 30

Water and Environmental - 1 1

Business and Industry - 332 332

Total Liability for Loan Guarantees $ - $ (601) $ (601)

FY 2020

Liabilities for Losses on Pre- 1992

Guarantees Present Value

Liabilities for Loan Guarantees on Post-

1991 Guarantees Present Value Total Liabilities for Loan Guarantees

Loan Guarantee Programs

Farm $ - $ 204 $ 204

Export - 7 7

Housing - 679 679

Community Facility - 43 43

Water and Environmental - 1 1

Business and Industry - 395 395

Total Liability for Loan Guarantees $ - $ 1,329 $ 1,329

Table 9: Subsidy Expense for Loan Guarantees by Program and Component

FY 2021 Loan Guarantee Programs

Interest

Supplement Defaults

Fees and

Other

Collections Other Subtotal

Total

Modifications

Interest

Rate

Reestimates

Technical

Reestimates

Total

Reestimates

Total

Subsidy

Expense

Farm $ - $ 19 $ (10) $ - $ 9 $ (13) $ 5 $ (27) $ (22) $ (26)

Export - - 9 (5) 4 - - (3) (3) 1

Housing - 862 (1,033) - (171) - 14 (2,124) (2,110) (2,281)

Community Facility - 4 (3) - 1 - - (12) (12) (11)

Business and Industry - 184 (105) - 79 - - (186) (186) (107)

Total Loan Guarantee Subsidy Expense $ - $ 1,069 $ (1,142) $ (5) $ (78) $ (13) $ 19 $ (2,352) $ (2,333) $ (2,424)

FY 2020 Loan Guarantee Programs

Interest

Supplement Defaults

Fees and

Other

Collections Other Subtotal

Total

Modifications

Interest

Rate

Reestimates

Technical

Reestimates

Total

Reestimates

Total

Subsidy

Expense

Farm $ - $ 26 $ (14) $ - $ 12 $ - $ 1 $ (36) $ (35) $ (23)

Export - - 10 (6) 4 - (1) 2 1 5

Housing - 726 (859) - (133) - (18) 827 809 676

Community Facility - 2 (1) - 1 - - (11) (11) (10)

Business and Industry - 75 (45) - 30 - 1 (18) (17) 13

Total Loan Guarantee Subsidy Expense $ - $ 829 $ (909) $ (6) $ (86) $ - $ (17) $ 764 $ 747 $ 661

108 Section II | Financial Information

The FY 2021 reestimate process resulted in a $2,333 million decrease in the post-1991 estimated

cost of the guaranteed loan portfolio, primarily comprised of the following programs:

The Guaranteed Single-Family Housing Section 502 program had an overall downward

reestimate of $(2,110) million. The total downward reestimate is the result of a downward

reestimate of $(1,955) million in the Blended component of the program and a downward

reestimate of $(140) million in the Purchase component. The majority of the total reestimate is

explained by the Blended component’s change, which is attributed to the downward reestimates

for cohorts 2016 through 2021. The large downward reestimate for these years is attributed to a

decrease in forecasted default claims. These changes were driven by the updated borrower source

data which created an improved macroeconomic outlook. The improved outlook is a result of a

decrease in loss settlements paid due to the moratoriums that have been given to borrowers

during the COVID Pandemic.

The Guaranteed Business and Industry program had an overall downward reestimate of

$(185) million. The majority of this downward reestimate is attributed to the assumption changes

related to the annual and upfront fees. The projected receipt of additional annual and upfront fees

drives the decrease in reestimated subsidy rate and causes a downward reestimate. In addition,

the reestimated subsidy rate decreased in FY 2018 due to the forecasted decrease in actual

default claims.

Table 10: Subsidy Rates for Loan Guarantees by Program and Component (percentage)

FY 2021

Interest

Differential Defaults

Fees and

Other

Collections Other Total

Guaranteed Loan Programs

Farm Ownership—Unsubsidized - 0.93 (1.17) - (0.24)

Farm Operating—Unsubsidized - 2.36 (1.24) - 1.12

Conservation—Guaranteed - 0.72 (1.13) - (0.41)

GSM 102 - 0.24 (0.48) - (0.24)

Export Guarantee Program—Facilities - 1.45 (3.43) - (1.98)

Community Facility Loan Guarantees - 3.79 (4.15) - (0.36)

Guaranteed 538 Multi-Family Housing - 3.34 (8.29) - (4.95)

Guaranteed 502 Single-Family Housing - 3.65 (4.35) - (0.70)

Business and Industry Loan Guarantees - 5.96 (4.82) - 1.14

Business and Industry CARES Act - 6.29 (3.79) - 2.50

Renewable Energy Loan Guarantees - 4.35 (2.39) - 1.96

Section 9003 Loan Guarantees - 21.93 (5.83) 0.06 16.16

Water and Environmental - 1.00 (0.88) - 0.12

USDA | 2021 Agency Financial Report 109

Table 11: Schedule for Reconciling Loan Guarantee Liability Balances

(Post -1991 Loan Guarantees)

Item

FY2021 FY2020

Beginning Balance of the Loan Guarantee Liabilities $ 1,329 $ 434

Less Claim Payments to Lenders 160 414

Add Fees Received 776 741

Less Interest Supplements Paid 8 8

Add Foreclosed Property and Loans Acquired 30 44

Add Subsidy Expense Reestimates 99 45

Less Negative Subsidy Payments 184 148

Add Upward Reestimate 15 830

Less Downward Reestimates 2,348 83

Loan Guarantee Modifications (13) -

Other (137) (112)

Ending Balance of the Loan Guarantee Liabilities $ (601) $ 1,329

Table 12: Administrative Expenses

Item FY 2021 FY 2020

Direct Loan Programs $ 495 $ 489

Guaranteed Loan Programs

465 450

Total Administrative Expense $ 960 $ 939

110 Section II | Financial Information

NOTE 8: Inventory and Related Property, Net

Commodity inventory is restricted for the purpose of alleviating distress caused by natural disasters, providing emergency food assistance in

developing countries, and providing price support and stabilization

Commodities: Unit of Measure FY 2021 Beginning Inventory Acquisitions Collateral Acquired Donations Others FY 2021 Ending Inventory

Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

Corn Meal Pounds - $ - 39 $ 9 - $ - (39) $ (9) - $ - - $ -

Blended Foods Pounds - - 108 66 - - (104) (62) - - 4 4

Dry Edible Beans Cwt. - - - 1 - - - (1) - - - -

Dry Whole Peas Cwt. - 1 3 85 - - (3) (81) - - - 5

Grain Sorghum Bushels - 1 10 77 - - (10) (78) - - - -

Lentils Dry Cwt. - - - 9 - - - (6) - - - 3

Nonfat Dry Milk Pounds - - 24 27 - - (24) (27) - - - -

Rice Products Cwt., Pounds - 1 4 91 - - (4) (90) - - - 2

Meat Pounds - - 75 117 - - (75) (117) - - - -

Vegetable Oil Pounds 24 13 234 154 - - (250) (159) - - 8 8

Wheat Products Bushels, Pounds - - 34 428 - - (34) (428) - - - -

Soybeans Bushels, Pounds - - 214 65 - - (214) (65) - - - -

Fruit and Nut

Products

Pounds - - 130 108 - - (130) (108) - - - -

Cotton Bales - - - - 1 133 - - (1) (133) - -

Other Various

- 2 - 26 - - - (35) - 8 - 1

Total Commodities $ 18 $ 1,263 $ 133 $ (1,266) $ (125)

$ 23

Commodities: Unit of Measure FY 2020 Beginning Inventory Acquisitions Collateral Acquired Donations Others FY 2020 Ending Inventory

Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

Corn Meal Pounds 1 $ - 102 $ 22 - $ - (103) $ (22) - $ - - $ -

Blended Foods Pounds 14 4 104 63 - - (118) (66) - (1) - -

Dry Edible Beans Cwt. - 1 - 22 - - - (23) - - - -

Dry Whole Peas Cwt. - 2 3 65 - - (3) (65) - (1) - 1

Grain Sorghum Bushels - - 22 118 - - (22) (117) - - - 1

Lentils Dry Cwt. - - 1 25 - - (1) (25) - - - -

Nonfat Dry Milk Pounds - - 5 100 - - (5) (100) - - - -

Rice Products Cwt., Pounds - 3 1 48 - - (1) (50) - - - 1

Meat Pounds - - 11 731 - - (11) (731) - - - -

Vegetable Oil Pounds 4 2 396 186 - - (376) (176) - 1 24 13

Wheat Products Bushels, Pounds - - 25 214 - - (25) (214) - - - -

Peanuts Pounds 26 5 - - 98 17 - - (124) (22) - -

Soybeans Bushels, Pounds - - 137 22 - - (137) (22) - - - -

Fruit and Nut

Products

Pounds - - 13 378 - - (13) (378) - - - -

Cotton Bales - 5 - - 6 1,550 - - (6) (1,555) - -

Other Various

- 1 - 87 - - - (113) - 27 - 2

Total Commodities $ 23 $ 2,081 $ 1,567 $ (2,102) $ (1,551)

$ 18

USDA | 2021 Agency Financial Report 111

NOTE 9: General Property, Plant, and Equipment (PP&E), Net

FY 2021

more from final results.

Estimates of claims are based on current crop conditions and historical trends for a given crop

condition. Therefore, it is assumed the expected claims will be similar to levels observed

historically.

The estimate model assumes that there is a relationship between crop yields, harvest prices, and

the resulting loss ratios. The indemnity for an individual producer is based on the difference

between the producer’s actual yield and his/her average yield. Similarly, for revenue plans, the

indemnity is based on the difference between the actual harvest price and the “base” price which

is the estimated harvest price at the time the crop is planted.

Regression analyses are calculated based on the historic relationships between the crop yields

and harvest prices (when necessary) for each crop in each state and the resulting loss ratios in

each of those years. The resulting regression coefficients are used in conjunction with the most

recent NASS forecasts and commodity futures prices to calculate a projected loss ratio for each

crop/state combination.

150 Section II | Financial Information

There are uncertainties associated with these assumptions including:

• Actual yields which may be different than those provided by the NASS estimates;

• Changes in weather patterns close to harvesting dates, which could affect yields but not be

reflected in the NASS estimates;

• Commodity prices which may change from those in the market because of many factors

(such as weather, yields, and economic conditions); and

• Significant catastrophic weather events (i.e. hurricanes and freezes) occurring near the

balance sheet date which could affect estimated crop yields and crop prices.

There are uncertainties associated with assumptions used to estimate losses on insurance claims.

As a result, the ultimate liability may differ significantly from the recorded estimate. Indemnity

costs are paid from premium proceeds, including producer paid premium and premium subsidies.

If indemnity costs exceed funds available, additional funds will be requested and apportioned

to FCIC.

Insurance Liabilities

The following table shows the insurance liabilities as of September 30, 2021 and September 30,

2020.

Insurance Liabilities

2021 2020

Estimated Losses on Insurance Claims

Liability for Unpaid Insurance Claims $ 3,413 $ 737

Liability for Losses on Remaining Coverage

6,572 4,149

Total Estimated Losses on Insurance Claims $ 9,985 $ 4,886

Unearned Revenue 1,189 750

Underwriting Gain 3,044 2,058

Other Insurance Liabilities 8 9

Total Insurance Liabilities (1)

$ 14,226 $ 7,703

(1) In Fiscal Year 2020, there was reported $5 million for contingent liabilities.

Reported insurance liabilities increased significantly from fiscal year 2020 to fiscal year 2021.

This increase is attributed to:

• Higher coverage amount as the result of higher crop prices

• Increase participation in certain insurance products (Rainfall Index Plans and Livestock

Plans)

• Higher level of losses caused by widespread drought

USDA | 2021 Agency Financial Report 151

Estimated Losses on Insurance Claims.

The following tables show information for changes in the estimated losses on insurance claims

for fiscal year 2021 and fiscal year 2020.

Changes in Estimated Losses on Insurance Claims 2021 2020

Beginning Balance $ 4,886 $ 4,915

Claims Expenses 8,477 9,886

Payments to Settle Claims (8,570) (9,974)

Adjustment of Accruals for Estimated Losses

5,192 59

Ending Balance

$ 9,985 $ 4,886

The chart above provides a look forward of the Liability for Estimated Losses on Insurance

Claims from the prior year to the current year. The Claims Expenses represents actual claims

reported. In fiscal year 2021 the actual claims reported were $1,400 million less than fiscal year

2020. This was a result of higher losses related to reinsurance year 2019 reported in fiscal year

2020. Payments to Settle Claims are the actual payments to producers. The amounts for fiscal

year 2020 do not include the $5 million for contingent liabilities.

The Adjustment of Accrual for Estimated Losses is the reversal of the prior year accrual

combined with the current year accrual for estimated losses. The indemnity projection is based on

two major factors: losses due to a shortfall in yield and changes in commodity prices impacting

revenue plans. The principal data source for yield projections is the NASS Crop Production

report. The NASS Crop Production report is considered to represent USDA’s official perspective

on the current state of agricultural production. It is based on a survey of growers along with

inspections of randomly selected sections of farms. Although the NASS Crop Production report is

scrutinized by multiple sources, it is still an estimate and is subject to some uncertainty.

The revenue plans of insurance base their indemnities on the futures prices for specific contracts

and exchanges. The best prediction of the final price for the futures contract is the most current

price of the relevant commodities exchange. At the time the indemnity projection is made, up-to-

date futures prices are taken from multiple exchanges. Again, this is subject to uncertainty due to

fluctuations in markets.

Liability for Unpaid Insurance Claims

Liability for unpaid insurance claims are claims for adverse events that occurred before the end

of the reporting period. Under SFFAS 51, for the claim to be considered incurred, a single event

or a series of events must be completed by the end of the reporting period to be considered an

adverse event of the period.

152 Section II | Financial Information

The liability for unpaid insurance claims is comprised of the following:

• Funds in the Escrow accounts to cover payments to producers who have not cashed their

indemnity payments

• Claims reported but not paid as of the end of the reporting period

• Incurred but Not Reported (IBNR) is estimated claims from events that have occurred as of

the end of the reporting period but have not yet been reported for settlement.

FCIC uses a historical trend analysis based upon the data from the prior years to determine the

value of claims incurred for the current reinsurance year as of the financial statement reporting

date. When the Summary of Business (SOB) is higher than the estimate at year end, the SOB

amount is used.

Liability for Losses on Remaining Coverage

The liability for losses on remaining coverage as of the end of the reporting period represents the

estimated amounts to be paid to settle claims for the remaining open arrangement period exceeding

losses associated with the related unearned premiums as of the end of the reporting period.

The liability for losses on remaining coverage is the total projected losses minus actual losses

reported, IBNR, and losses associated with unearned premium.

Liability for Unearned Insurance Premiums

Premium revenue is comprised of producer paid premium. Producer paid premium is recognized

as earned proportionately over each crop’s growing season. The portion of producer paid

premium not recognized at the conclusion of the fiscal year is classified as insurance and

guarantee program liabilities in the balance sheet. Much of the increase in fiscal year 2021 was

due to:

• Higher level of premium caused by higher crop prices

• Higher participation in livestock products and rainfall index plans

2021 2020

Liability for Unearned Insurance Premiums

$ 1,189 $ 750

USDA | 2021 Agency Financial Report 153

Underwriting Gain/Loss

Underwriting gain/loss is the AIPs portion of earnings or losses on the insurance book of business

due from or to FCIC. A periodic settlement, as stipulated in the SRA, is calculated where results

of business written by AIPs are determined and an experience-rated gain or loss on business

ceded from AIPs is computed. Payments due to AIPs for a net gain are paid in the second fiscal

year following the reinsurance year. Underwriting losses are paid to FCIC periodically.

Underwriting Gain 2021 2020

Current Year Estimated Gains $ 1,587 $ 1,525

Actual Underwriting Gains

1,457 533

Total Underwriting Gain Liability

$ 3,044 $ 2,058

At the end of fiscal year 2021, the underwriting gain liability includes amounts for reinsurance

years 2020 and 2021. The reinsurance year 2021 estimated underwriting gain of $1,587 million

was based on a loss ratio of 0.95. The actual reinsurance year 2020 Underwriting Gain is

$1,457 million and will be paid in fiscal year 2022. The actual loss ratio for reinsurance year

2020 is 0.85.

The underwriting gain liability for fiscal year 2020 includes amounts for reinsurance year 2019

and 2020. The reinsurance year 2020 estimated underwriting gain was $1,525 million and the

actual loss ratio was 0.81. The actual reinsurance year 2019 underwriting gain was $533 million,

paid in fiscal year 2021, and based on a loss ratio of 1.02

154 Section II | Financial Information

NOTE 30: COVID-19 Activity

The tables below summarize supplemental funding for COVID-19 and its financial statement impact.

FY 2021

Account Name

Treasury

Account

Symbol Purpose

Unobligated

Balances from

Prior Year

Total

Supplemental

Current Year

Total

Obligations

Amounts

Remaining to

be Obligated

Total

Outlays

Farm Service Agency / Commodity Credit Corporation (CCC) - Assistance for Socially

Disadvantaged Farmers and Ranchers 12X0172 American Rescue Plan Act $ - $ 1,960 $ 1,960 $ - $ 1

CCC- Food for Peace Title II Grants (Foreign Agricultural Service)

121/22278

American Rescue Plan Act - 800 648 152 209

FNS-Supplemental Nutrition Assistance Program (SNAP)

120/13505

Families First Coronavirus Response Act - - - - 2

FNS-SNAP

120/13505 CARES Act 60 - 55 5 51

FNS-SNAP

1203505

Families First Coronavirus Response Act 1,082 3,700 2,928 1,854 2,519

FNS-SNAP

1213505

Consolidated Appropriations Act, 2021 - 60,866 47,560 13,306 46,965

FNS-SNAP

12X3505

Consolidated Appropriations Act, 2021 - 5 - 5 -

FNS-SNAP

121/33505

American Rescue Plan Act - 1,150 241 909 43

FNS-SNAP

121/63505

American Rescue Plan Act - 25 - 25 -

FNS-SNAP

121/73505

American Rescue Plan Act - 1,000 966 34 176

FNS-Commodity Assistance Program (CAP)

120/13507 Families First Coronavirus Response Act 186 12 196 2 273

FNS-CAP

120/13507

CARES Act 59 25 81 3 261

FNS-CAP

121/23507

American Rescue Plan Act - 37 37 - 14

FNS-CAP

1213507

Consolidated Appropriations Act, 2021 - 413 412 1 138

FNS-Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

120/13510

Families First Coronavirus Response Act 500 - 500 - 500

FNS-WIC

121/23510

American Rescue Plan Act - 490 490 - 115

FNS-WIC

121/43510

American Rescue Plan Act - 390 - 390 -

FNS-Child Nutrition Programs (CN)

120/13539 CARES Act 1,762 554 2,316 - 3,235

FNS-CN

1213539

Consolidated Appropriations Act, 2021 - 1,800 1,477 323 729

FSIS-Food Safety and Inspection Service

120/13700

CARES Act

16 2 17 1 20

AMS- Marketing Services

120/12500 CARES Act 32 - 32 - 33

AMS - Marketing Services

12X2500

Consolidated Appropriations Act, 2021 - 522 7 515 2

AMS - Payments to States and Possessions

12X2501

Consolidated Appropriations Act, 2021 - 100 3 97 1

APHIS- Salaries and Expenses

121/21600

Consolidated Appropriations Act, 2021 - 102 - 102 -

APHIS- Salaries and Expenses

12X1600

American Rescue Plan Act - 300 - 300 -

Forest Service-Capital Improvement and Maintenance

120/11103

CARES Act 18 - 18 - 9

Forest Service-Forest and Rangeland Research

120/11104

CARES Act 3 - 3 - 1

Forest Service-National Forest System

120/11106 CARES Act 18 - 17 1 17

Forest Service-Wildland Fire Management

120/11115

CARES Act 2 - 2 - 2

Rural Development- Distance Learning, Telemedicine, and Broadband Program

12X1232

CARES Act 24 - 24 - -

Rural Development-Distance Learning, Telemedicine, and Broadband Program

120/11232

CARES Act 12 - 7 5 -

Rural Development-Rural Business Program Account

120/11902

CARES Act 13 - 13 - 16

Rural Development- Rental Assistance Program

121/20137

American Rescue Plan Act - 100 100 - 17

Rural Development- Rural Community Facilities Program Account

121/31951

American Rescue Plan Act - 500 25 475 25

Rural Development Rural Housing Insurance Fund Program Account

121/32081 American Rescue Plan Act - 39 1 38 1

Rural Development Rural Cooperative Development Grants 12X1900

Consolidated Appropriations Act, 2021 - 38 35 3 3

NIFA - Farming Opportunities Training and Outreach Program; Farm Stress Program;

Gus Schumacher Nutrition Incentive Program

12X0502

Consolidated Appropriations Act, 2021 - 140 123 17 1

FAS- Salaries and Expenses

120/12900

CARES Act 2 - 1 1 1

Office of the Secretary

1200115

Families First Coronavirus Response Act 93 32 29 96 1,127

Office of the Secretary

12X0115

CARES Act 16,479 201 12,794 3,886 14,380

Office of the Secretary

12X0115

CARES Act and Consolidated Appropriations Act, 2021 - 11,225 7,927 3,298 7,587

Office of the Secretary

12X0115 American Rescue Plan Act

- 4,658 2 4,656 -

Office of Inspector General

121/20900 American Rescue Plan Act

- 3 2 1 2

Total

$ 20,361 $ 91,189 $ 81,049 $ 30,501 $ 78,476

USDA | 2021 Agency Financial Report 155

FY 2021

Account Name

Farm Service Agency /

Commodity Credit Corporation

(CCC) - Assistance for Socially

Disadvantaged Farmers and

Ranchers

CCC- Food for

Peace Title II

Grants (Foreign

Agricultural

Service)

FNS-

Supplemental

Nutrition

Assistance

Program (SNAP) FNS-SNAP FNS-SNAP FNS-SNAP FNS-SNAP FNS-SNAP

Treasury Account Symbol 12X0172 121/22278 120/13505 120/13505 1203505 1213505 12X3505 121/33505

Purpose

American Rescue Plan Act

American Rescue

Plan Act

Families First

Coronavirus

Response Act CARES Act

Families First

Coronavirus

Response Act

Consolidated

Appropriations

Act, 2021

Consolidated

Appropriations

Act, 2021

American Rescue

Plan Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3)

$ 1,959 $ 591 $ 1 $ 71 $ 1,855 $ 13,902 $ 5 $ 1,107

Total Intragovernmental Assets

1,959 591 1 71 1,855 13,902 5 1,107

Accounts Receivable, Net (Note 6)

- - - - - - - -

Inventory and Related Property, Net (Note 8)

- 14 - - - - - -

Advances and Prepayments

- - - - - - - -

Total Assets

1,959 605 1 71 1,855 13,902 5 1,107

Intragovernmental:

Accounts Payable (Note 14)

- - - - - - - -

Debt (Note 12)

- - - - - - - -

Advances from Others and Deferred Revenue

- - - - - - - -

Other Liabilities (Note 14)

- - - - - - - -

Total Intragovernmental Liabilities

- - - - - - - -

Accounts Payable

- 50 - - - - - -

Benefits Due and Payable

- - 1 50 - 474 - 198

Other Liabilities (Note 14, 15 & 16)

1,959 58 - 3 - 122 - -

Total Liabilities

1,959 108 1 53 - 596 - 198

Unexpended Appropriations

- 483 - 18 1,855 13,306 5 909

Cumulative Results of Operations

- 14 - - - - - -

Total Liabilities and Net Position

1,959 605 1 71 1,855 13,902 5 1,107

STATEMENT OF NET COST

Gross Program Costs

1,960 303 - 42 (773) 47,560 - 241

Net Cost of Operations (Note 18)

1,960 303 - 42 (773) 47,560 - 241

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance

- - - 60 1,082 - - -

Appropriations Received

5,050 800 - - - 60,866 5 1,150

Appropriations Transferred in/out

- - - - - - - -

Other Adjustments

(3,090) - - - - - - -

Appropriations Used

(1,960) (317) - (42) 773 (47,560) - (241)

Net Change in Unexpended Appropriations

- 483 - (42) 773 13,306 5 909

Total Unexpended Appropriations Ending Balance

- 483 - 18 1,855 13,306 5 909

Cumulative Results of Operations:

Beginning Balance

- - - - - - - -

Appropriations Used

1,960 317 - 42 (773) 47,560 - 241

Net Cost of Operations

(1,960) (303) - (42) 773 (47,560) - (241)

Net Change and Cumulative Results of Operations - 14 - - - - - -

Cumulative Results of Operations - Ending Balance

- 14 - - - - - -

Net Position End of Period

$ - $ 497 $ - $ 18 $ 1,855 $ 13,306 $ 5 $ 909

156 Section II | Financial Information

FY 2021 Continued

Account Name

FNS-SNAP FNS-SNAP

FNS-Commodity

Assistance

Program (CAP) FNS-CAP FNS-CAP FNS-CAP

FNS-Special Supplemental

Nutrition Program for

Women, Infants and

Children (WIC) FNS-WIC

Treasury Account Symbol

121/63505 121/73505 120/13507 120/13507 121/23507 1213507 120/13510 121/23510

Purpose

American Rescue

Plan Act

American Rescue

Plan Act

Families First

Coronavirus

Response Act CARES Act

American Rescue

Plan Act

Consolidated

Appropriations

Act, 2021

Families First Coronavirus

Response Act

American Rescue

Plan Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3)

$ 25 $ 824 $ 31 $ 27 $ 23 $ 275 $ - $ 375

Total Intragovernmental Assets

25 824 31 27 23 275 - 375

Accounts Receivable, Net (Note 6) - - - - - - - -

Inventory and Related Property, Net (Note 8) - - - - - - - -

Advances and Prepayments

- - - - - - - -

Total Assets

25 824 31 27 23 275 - 375

Intragovernmental:

Accounts Payable (Note 14) - - - - - - - -

Debt (Note 12) - - - - - - - -

Advances from Others and Deferred Revenue - - - - - - - -

Other Liabilities (Note 14) - - - - - - - -

Total Intragovernmental Liabilities - - - - - - - -

Accounts Payable - - 1 - 1 4 - -

Benefits Due and Payable - 790 - - 1 - - -

Other Liabilities (Note 14, 15 & 16)

- - 7 9 - 36 - 375

Total Liabilities

- 790 8 9 2 40 - 375

Unexpended Appropriations 25 34 23 18 21 235 - -

Cumulative Results of Operations

- - - - - - - -

Total Liabilities and Net Position

25 824 31 27 23 275 - 375

STATEMENT OF NET COST

Gross Program Costs

- 966 225 202 16 178 500 490

Net Cost of Operations (Note 18)

- 966 225 202 16 178 500 490

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance - - 248 220 - - 500 -

Appropriations Received 25 1,000 - - 37 413 - 490

Appropriations Transferred in/out - - - - - - - -

Other Adjustments - - - - - - - -

Appropriations Used

- (966) (225) (202) (16) (178) (500) (490)

Net Change in Unexpended Appropriations

25 34 (225) (202) 21 235 (500) -

Total Unexpended Appropriations Ending Balance

25 34 23 18 21 235 - -

Cumulative Results of Operations:

Beginning Balance - - - - - - - -

Appropriations Used - 966 225 202 16 178 500 490

Net Cost of Operations

- (966) (225) (202) (16) (178) (500) (490)

Net Change and Cumulative Results of Operations - - - - - - - -

Cumulative Results of Operations - Ending Balance

- - - - - - - -

Net Position End of Period

$ 25 $ 34 $ 23 $ 18 $ 21 $ 235 $ - $ -

USDA | 2021 Agency Financial Report 157

FY 2021 Continued

Account Name

FNS-WIC

FNS-Child

Nutrition

Programs (CN) FNS-CN

FSIS-Food Safety

and Inspection

Service

AMS-Marketing

Services

AMS-Marketing

Services

AMS-Payments to

States and

Possessions

APHIS- Salaries

and Expenses

Treasury Account Symbol

121/43510 120/13539 1213539 120/13700 120/12500 12X2500 12X2501 121/21600

Purpose

American Rescue

Plan Act CARES Act

Consolidated

Appropriations

Act, 2021 CARES Act CARES Act

Consolidated

Appropriations

Act, 2021

Consolidated

Appropriations

Act, 2021

Consolidated

Appropriations

Act, 2021

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3)

$ 390 $ 55 $ 1,071 $ 1 $ - $ 520 $ 99 $ 102

Total Intragovernmental Assets

390 55 1,071 1 - 520 99 102

Accounts Receivable, Net (Note 6) - - - - - - - -

Inventory and Related Property, Net (Note 8) - - - - - - - -

Advances and Prepayments

- - - - - - - -

Total Assets

390 55 1,071 1 - 520 99 102

Intragovernmental:

Accounts Payable (Note 14) - - - - - - - -

Debt (Note 12) - - - - - - - -

Advances from Others and Deferred Revenue - - - - - - - -

Other Liabilities (Note 14) - - - - - - - -

Total Intragovernmental Liabilities - - - - - - - -

Accounts Payable - - - - - - - -

Benefits Due and Payable - 55 - - - - - -

Other Liabilities (Note 14, 15 & 16)

- - 748 - - - - -

Total Liabilities

- 55 748 - - - - -

Unexpended Appropriations 390 - 323 1 - 520 99 102

Cumulative Results of Operations - - - - - - - -

Total Liabilities and Net Position

390 55 1,071 1 - 520 99 102

STATEMENT OF NET COST

Gross Program Costs

- 1,761 1,477 19 32 2 1 -

Net Cost of Operations (Note 18)

- 1,761 1,477 19 32 2 1 -

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance - 1,761 - 20 32 - - -

Appropriations Received 390 - 1,800 - - 522 100 635

Appropriations Transferred in/out - - - - - - - (533)

Other Adjustments - - - - - - - -

Appropriations Used

- (1,761) (1,477) (19) (32) (2) (1) -

Net Change in Unexpended Appropriations

390 (1,761) 323 (19) (32) 520 99 102

Total Unexpended Appropriations Ending Balance

390 - 323 1 - 520 99 102

Cumulative Results of Operations:

Beginning Balance - - - - - - - -

Appropriations Used - 1,761 1,477 19 32 2 1 -

Net Cost of Operations

- (1,761) (1,477) (19) (32) (2) (1) -

Net Change and Cumulative Results of Operations - - - - - - - -

Cumulative Results of Operations - Ending Balance

- - - - - - - -

Net Position End of Period

$ 390 $ - $ 323 $ 1 $ - $ 520 $ 99 $ 102

158 Section II | Financial Information

FY 2021 Continued

Account Name

APHIS- Salaries

and Expenses

Forest Service-

Capital

Improvement and

Maintenance

Forest Service-

Forest and

Rangeland

Research

Forest Service-

National Forest

System

Forest Service-

Wildland Fire

Management

Rural Development-

Distance Learning,

Telemedicine, and

Broadband Program

Rural Development-

Distance Learning,

Telemedicine, and

Broadband Program

Rural

Development-

Rural Business

Program Account

Treasury Account Symbol

12X1600 120/11103 120/11104 120/11106 120/11115 12X1232 120/11232 120/11902

Purpose

American Rescue

Plan Act CARES Act CARES Act CARES Act CARES Act CARES Act CARES Act CARES Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3)

$ 300 $ 16 $ 2 $ 10 $ 2 $ 24 $ 97 $ 3

Total Intragovernmental Assets

300 16 2 10 2 24 97 3

Accounts Receivable, Net (Note 6) - - - - - - - -

Inventory and Related Property, Net (Note 8) - - - - - - - -

Advances and Prepayments

- - - - - - - -

Total Assets

300 16 2 10 2 24 97 3

Intragovernmental:

Accounts Payable (Note 14) - - - - - - - -

Debt (Note 12) - - - - - - - -

Advances from Others and Deferred Revenue - - - - - - - -

Other Liabilities (Note 14) - - - - - - - -

Total Intragovernmental Liabilities - - - - - - - -

Accounts Payable - - - - - - - -

Benefits Due and Payable - - - - - - - -

Other Liabilities (Note 14, 15 & 16)

- - - - - - - -

Total Liabilities

- - - - - - - -

Unexpended Appropriations 300 16 2 10 2 24 97 3

Cumulative Results of Operations

- - - - - - - -

Total Liabilities and Net Position

300 16 2 10 2 24 97 3

STATEMENT OF NET COST

Gross Program Costs

- 7 1 17 2 - - 16

Net Cost of Operations (Note 18)

- 7 1 17 2 - - 16

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance - 23 3 27 4 24 97 19

Appropriations Received 300 - - - - - - -

Appropriations Transferred in/out - - - - - - - -

Other Adjustments - - - - - - - -

Appropriations Used

- (7) (1) (17) (2) - - (16)

Net Change in Unexpended Appropriations

300 (7) (1) (17) (2) - - (16)

Total Unexpended Appropriations Ending Balance

300 16 2 10 2 24 97 3

Cumulative Results of Operations:

Beginning Balance - - - - - - - -

Appropriations Used - 7 1 17 2 - - 16

Net Cost of Operations

- (7) (1) (17) (2) - - (16)

Net Change and Cumulative Results of Operations - - - - - - - -

Cumulative Results of Operations - Ending Balance

- - - - - - - -

Net Position End of Period

$ 300 $ 16 $ 2 $ 10 $ 2 $ 24 $ 97 $ 3

USDA | 2021 Agency Financial Report 159

FY 2021 Continued

Account Name

Rural

Development-

Rental Assistance

Program

Rural

Development-

Rural Community

Faculties Program

Account

Rural Development

Rural Housing

Insurance Fund

Program Account

Rural Development

Rural Cooperative

Development

Grants

NIFA-Farming

Opportunities Training

and Outreach Program;

Farm Stress Program; Gus

Schumacher Nutrition

Incentive Program

FAS-Salaries

and Expenses

Office of the

Secretary

Office of the

Secretary

Treasury Account Symbol

121/20137 121/31951 121/32081 12X1900 12X0502 120/12900 1200115 12X0115

Purpose

American Rescue

Plan Act

American Rescue

Plan Act

American Rescue

Plan Act

Consolidated

Appropriations

Act, 2021

Consolidated

Appropriations Act, 2021 CARES Act

Families First

Coronavirus

Response Act CARES Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3) $ 83 $ 475 $ 38 $ 35 $ 140 $ 2 $ 409 $ 3,931

Total Intragovernmental Assets

83 475 38 35 140 2 409 3,931

Accounts Receivable, Net (Note 6) - - - - - - - 29

Inventory and Related Property, Net (Note 8) - - - - - - - -

Advances and Prepayments - - - - - - - 15

Total Assets

83 475 38 35 140 2 409 3,975

Intragovernmental:

Accounts Payable (Note 14) - - - - - - - -

Debt (Note 12) - - - - - - - -

Advances from Others and Deferred Revenue - - - - - - - -

Other Liabilities (Note 14) - - - - - - - -

Total Intragovernmental Liabilities

- - - - - - - -

Accounts Payable - - - - - - (1) 28

Benefits Due and Payable - - - - - - - -

Other Liabilities (Note 14, 15 & 16) - - - - - - - -

Total Liabilities

- - - - - - (1) 28

Unexpended Appropriations 83 475 38 35 140 2 410 2,383

Cumulative Results of Operations - - - - - - - 1,564

Total Liabilities and Net Position

83 475 38 35 140 2 409 3,975

STATEMENT OF NET COST

Gross Program Costs

17 25 1 3 - 1 1,009 12,809

Net Cost of Operations (Note 18)

17 25 1 3 - 1 1,009 12,809

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance - - - - - 3 1,419 4,217

Appropriations Received 100 500 39 38 141 - - -

Appropriations Transferred in/out - - - - - - - (999)

Other Adjustments - - - - - - - -

Appropriations Used (17) (25) (1) (3) (1) (1) (1,009) (835)

Net Change in Unexpended Appropriations

83 475 38 35 140 (1) (1,009) (1,834)

Total Unexpended Appropriations Ending Balance

83 475 38 35 140 2 410 2,383

Cumulative Results of Operations:

Beginning Balance - - - - - - - 13,538

Appropriations Used 17 25 1 3 - 1 1,009 835

Net Cost of Operations (17) (25) (1) (3) - (1) (1,009) (12,809)

Net Change and Cumulative Results of Operations

- - - - - - - (11,974)

Cumulative Results of Operations - Ending Balance

- - - - - - - 1,564

Net Position End of Period $ 83 $ 475 $ 38 $ 35 $ 140 $ 2 $ 410 $ 3,947

160 Section II | Financial Information

FY 2021 Continued

Account Name

Office of the

Secretary

Office of the

Secretary

Office of Inspector

General

Treasury Account Symbol

12X0115 12X0115 121/20900

Purpose

CARES Act and

Consolidated

Appropriations

Act, 2021

American Rescue

Plan Act

American Rescue

Plan Act Total

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury (Note 3)

$ 3,638 $ 4,657 $ - $ 37,171

Total Intragovernmental Assets

3,638 4,657 - 37,171

Accounts Receivable, Net (Note 6) - - - 29

Inventory and Related Property, Net (Note 8) - - - 14

Advances and Prepayments

- - - 15

Total Assets

3,638 4,657 - 37,229

Intragovernmental:

Accounts Payable (Note 14) - - - -

Debt (Note 12) - - - -

Advances from Others and Deferred Revenue - - - -

Other Liabilities (Note 14) - - - -

Total Intragovernmental Liabilities

- - - -

Accounts Payable 5 - - 88

Benefits Due and Payable - - - 1,569

Other Liabilities (Note 14, 15 & 16)

281 - - 3,598

Total Liabilities

286 - - 5,255

Unexpended Appropriations 3,352 4,657 - 30,396

Cumulative Results of Operations

- - - 1,578

Total Liabilities and Net Position

3,638 4,657 - 37,229

STATEMENT OF NET COST

Gross Program Costs

7,873 - 2 76,985

Net Cost of Operations (Note 18)

7,873 - 2 76,985

STATEMENT OF CHANGES IN NET POSITION

Unexpended Appropriations:

Beginning Balance - - - 9,759

Appropriations Received 11,225 4,657 2 90,285

Appropriations Transferred in/out - - - (1,532)

Other Adjustments - - - (3,090)

Appropriations Used

(7,873) - (2) (65,026)

Net Change in Unexpended Appropriations

3,352 4,657 - 20,637

Total Unexpended Appropriations Ending Balance

3,352 4,657 - 30,396

Cumulative Results of Operations:

Beginning Balance - - - 13,538

Appropriations Used 7,873 - 2 65,025

Net Cost of Operations

(7,873) - (2) (76,985)

Net Change and Cumulative Results of Operations - - - (11,960)

Cumulative Results of Operations - Ending Balance

- - - 1,578

Net Position End of Period

$ 3,352 $ 4,657 $ - $ 31,974

USDA | 2021 Agency Financial Report 161

FY 2020

Account Name

Treasury

Account Symbol Purpose

Total

Supplemental

Total

Obligations

Amounts

Remaining to

be Obligated Total Outlays

FSA- Processing, Research and Marketing, Office of the Secretary 12X0115 CARES Act $ 30,000 $ 13,521 $ 16,479 $ 10,689

FSA-Salaries and Expenses 120/10600 CARES Act 3 3 - 3

FNS-Supplemental Nutrition Assistance Program (SNAP) 120/13505 Families First Coronavirus Response Act 100 100 - 96

FNS-SNAP 120/13505 CARES Act 15,810 15,750 60 15,688

FNS-SNAP 1203505 Families First Coronavirus Response Act 12,800 11,718 1,082 8,425

FNS-Commodity Assistance Program (CAP) 120/13507 Families First Coronavirus Response Act 400 214 186 96

FNS-CAP 120/13507 CARES Act 450 391 59 161

FNS-Special Supplemental Nutrition Program for Women, Infants and Children (WIC) 120/13510 Families First Coronavirus Response Act 500 - 500 -

FNS-Child Nutrition Programs (CN) 120/13539 CARES Act 8,800 7,039 1,761 5,511

FSIS-Food Safety and Inspection Service 120/13700 CARES Act 33 17 16 12

AMS- Processing, Research and Marketing, Office of the Secretary 1200115 Families First Coronavirus Response Act 4,000 3,907 93 2,464

AMS- Marketing Services 120/12500 CARES Act 45 13 32 12

APHIS- Salaries and Expenses 120/11600 CARES Act 55 55 - 55

Forest Service-Capital Improvement and Maintenance 120/11103 CARES Act 27 8 19 2

Forest Service-Forest and Rangeland Research 120/11104 CARES Act 3 - 3 -

Forest Service-National Forest System 120/11106 CARES Act 34 16 18 7

Forest Service-Wildland Fire Management 120/11115 CARES Act 7 5 2 4

Rural Development- Distance Learning, Telemedicine, and Broadband Program 12X1232 CARES Act 25 1 24 1

Rural Development-Distance Learning, Telemedicine, and Broadband Program 120/11232 CARES Act 100 88 12 3

Rural Development-Rural Business Program Account 120/11902 CARES Act 21 7 14 2

FAS- Salaries and Expenses 120/12900 CARES Act 4 2 2 2

OIG-Office of Inspector General 120/10900 CARES Act

1 1 - 1

Total

$ 73,218 $ 52,856 $ 20,362 $ 43,234

162 Section II | Financial Information

FY 2020

ACCOUNT NAME

FSA- Processing,

Research and

Marketing, Office

of the Secretary

FSA- Salaries and

Expenses

FNS-Supplemental

Nutrition

Assistance

Program (SNAP) FNS-SNAP FNS-SNAP

FNS-Commodity

Assistance

Program (CAP) FNS-CAP

FNS-Special

Supplemental

Nutrition Program

for Women, Infants

and Children (WIC)

TREASURY ACCOUNT SYMBOL 12X0115 120/10600 120/13505 120/13505 1203505 120/13507 120/13507 120/13510

PURPOSE

CARES Act CARES Act

Families First

Coronavirus

Response Act CARES Act

Families First

Coronavirus

Response Act

Families First

Coronavirus

Response Act CARES Act

Families First

Coronavirus

Response Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury

$ 19,312 $ - $ 4 $ 122 $ 4,375 $ 304 $ 289 $ 500

Total Intragovernmental Assets

19,312 - 4 122 4,375 304 289 500

Accounts Receivable, Net

3 - - - - - - -

Total Assets

19,315 - 4 122 4,375 304 289 500

Accounts Payable 1,560 - - - - 2 4 -

Benefits Due and Payable - - 4 62 3,293 - - -

Other Liabilities

- - - - - 54 65 -

Total liabilities

1,560 - 4 62 3,293 56 69 -

Unexpended Appropriations 4,217 - - 60 1,082 248 220 500

Cumulative Results of Operations

13,538 - - - - - - -

Total Liabilities and Net Position

19,315 - 4 122 4,375 304 289 500

STATEMENT OF NET COST

Gross Program Costs

12,245 3 100 15,750 11,718 152 230 -

Net Cost of Operations

12,245 3 100 15,750 11,718 152 230 -

STATEMENT OF CHANGES IN NET POSITION

Net Position Beginning of Period - - - - - - - -

Other Financing Sources 30,000 3 100 15,810 12,800 400 450 500

Net Cost of Operations

(12,245) (3) (100) (15,750) (11,718) (152) (230) -

Change in Net Position

17,755 - - 60 1,082 248 220 500

Net Position End of Period

$ 17,755 $ - $ - $ 60 $ 1,082 $ 248 $ 220 $ 500

USDA | 2021 Agency Financial Report 163

FY 2020 continued

ACCOUNT NAME

FNS-Child Nutrition

Programs (CN)

FSIS-Food Safety

and Inspection

Service

AMS-Processing,

Research and

Marketing, Office

of the Secretary

AMS-Marketing

Services

APHIS- Salaries and

Expenses

Forest Service-

Capital

Improvement and

Maintenance

Forest Service-

Forest and

Rangeland

Research

Forest Service-

National Forest

System

TREASURY ACCOUNT SYMBOL 120/13539 120/13700 1200115 120/12500 120/11600 120/11103 120/11104 120/11106

PURPOSE

CARES Act CARES Act

Families First

Coronavirus

Response Act CARES Act CARES Act CARES Act CARES Act CARES Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury

$ 3,289 $ 21 $ 1,536 $ 33 $ - $ 24 $ 3 $ 27

Total Intragovernmental Assets

3,289 21 1,536 33 - 24 3 27

Accounts Receivable, Net

- - - - - - - -

Total Assets

3,289 21 1,536 33 - 24 3 27

Accounts Payable - - 117 - - 2 - -

Benefits Due and Payable 1,528 - - - - - - -

Other Liabilities

- 1 - - - - - -

Total liabilities

1,528 1 117 - - 2 - -

Unexpended Appropriations 1,761 20 1,419 33 - 22 3 27

Cumulative Results of Operations

- - - - - - - -

Total Liabilities and Net Position

3,289 21 1,536 33 - 24 3 27

STATEMENT OF NET COST

Gross Program Costs

7,039 13 2,581 12 55 5 - 7

Net Cost of Operations

7,039 13 2,581 12 55 5 - 7

STATEMENT OF CHANGES IN NET POSITION

Net Position Beginning of Period - - - - - - - -

Other Financing Sources 8,800 33 4,000 45 55 27 3 34

Net Cost of Operations

(7,039) (13) (2,581) (12) (55) (5) - (7)

Change in Net Position

1,761 20 1,419 33 - 22 3 27

Net Position End of Period

$ 1,761 $ 20 $ 1,419 $ 33 $ - $ 22 $ 3 $ 27

164 Section II | Financial Information

FY 2020 continued

ACCOUNT NAME

Forest Service-

Wildland Fire

Management

Rural Development-

Distance Learning,

Telemedicine, and

Broadband Program

Rural Development-

Distance Learning,

Telemedicine, and

Broadband Program

Rural Development-

Rural Business

Program Account

FAS-Salaries and

Expenses

OIG-Office of

Inspector General Total

TREASURY ACCOUNT SYMBOL 120/11115 12X1232 120/11232 120/11902 120/12900 120/10900

PURPOSE

CARES Act CARES Act CARES Act CARES Act CARES Act CARES Act

BALANCE SHEET

Intragovernmental:

Fund Balance with Treasury

$ 3 $ 24 $ 97 $ 19 $ 2 $ - $ 29,984

Total Intragovernmental Assets

3 24 97 19 2 - 29,984

Accounts Receivable, Net

- - - - - - 3

Total Assets

3 24 97 19 2 - 29,987

Accounts Payable - - - - - - 1,685

Benefits Due and Payable - - - - - - 4,887

Other Liabilities

- - - - - - 120

Total liabilities

- - - - - - 6,692

Unexpended Appropriations 3 24 97 19 2 - 9,757

Cumulative Results of Operations

- - - - - - 13,538

Total Liabilities and Net Position

3 24 97 19 2 - 29,987

STATEMENT OF NET COST

Gross Program Costs

4 1 3 2 2 1 49,923

Net Cost of Operations

4 1 3 2 2 1 49,923

STATEMENT OF CHANGES IN NET POSITION

Net Position Beginning of Period - - - - - - -

Other Financing Sources 7 25 100 21 4 1 73,218

Net Cost of Operations

(4) (1) (3) (2) (2) (1) (49,923)

Change in Net Position

3 24 97 19 2 - 23,295

Net Position End of Period

$ 3 $ 24 $ 97 $ 19 $ 2 $ - $ 23,295

USDA | 2021 Agency Financial Report 165

RMA took numerous actions to provide relief in the face of the pandemic to ensure crop

insurance continued to provide a farm safety net under such unprecedented times. RMA did not

receive direct budgetary resources to respond to COVID 19 and most of the actions provided

reporting flexibilities to AIP’s and producers.

In FY 2021, RMA was assigned to administer the Pandemic Cover Crop Program (PCCP) as

part of USDA’s Pandemic Assistance for Producers initiative, a bundle of programs to bring

financial assistance to farmers, ranchers and producers who felt the impact of COVID-19

market disruptions.

In FY 2020, the most significant action involving financial resources was to allow additional

time for policyholders to make payment of premium and administrative fee. The amount of this

deferral was $2,500 million.

NOTE 31: Subsequent Events

Management is not aware of any events or transactions that have occurred subsequent to the

balance sheet date, but prior to the issuance of the financial statements, that have a material effect

on the financial statements and therefore require adjustment or disclosure in the statements.

NOTE 32: Reclassification of Balance Sheet, Statement of Net

Cost, and Statement of Changes in Net Position For FR

Compilation Process

To prepare the Financial Report of the U.S. Government (FR), the Department of the Treasury

requires agencies to submit an adjusted trial balance, which is a listing of amounts by U.S.

Standard General Ledger account that appear in the financial statements. Treasury uses the trial

balance information reported in the Governmentwide Treasury Account Symbol Adjusted Trial

Balance System (GTAS) to develop a Reclassified Balance Sheet, Reclassified Statement of Net

Cost, and a Reclassified Statement of Changes in Net Position for each agency, which are

accessed using GTAS.

Treasury eliminates all intragovernmental balances from the reclassified statements and

aggregates lines with the same title to develop the FR statements. This note shows the USDA’s

financial statements and the USDA’s reclassified statements prior to elimination of

intragovernmental balances and prior to aggregation of repeated FR line items.

A copy of the 2020 FR can be found here: https://www.fiscal.treasury.gov/reports-statements/

and a copy of the 2021 FR will be posted to this site as soon as it is released.

The term “intragovernmental” is used in this note to refer to amounts that results from other

components of the Federal Government.

166 Section II | Financial Information

The term “non-Federal” is used in this note to refer to Federal Government amounts that result

from transactions with non-Federal entities. These include transactions with individuals,

businesses, non-profit entities, and State, local, and foreign governments.

USDA | 2021 Agency Financial Report 167

Reclassification of Balance Sheet to Line Items Used for the Government-wide Balance Sheet as of September 30, 2021

FY2021 USDA Balance Sheet Line Items Used to Prepare FY 2021 Government-wide Balance Sheet

Financial Statement Line Amounts

Dedicated

Collections

All Other

Amounts Eliminations Total Reclassified Financial Statement Line

ASSETS (NOTE 2)

Intragovernmental:

Fund Balance with Treasury (Note 3)

237,610 3,591 234,019 - 237,610

Fund Balance with Treasury (Note 3) (RC 40)

Investments (Note 5)

256 256 - - 256

Investments[, net] (Note 5)

Accounts Receivable, Net (Note 6)

320 250 10,836 10,766 320

Accounts receivable[, net] (Note 6)

Advances and Prepayments

42 - 85 43 42

Advances and prepayments (RC 23)

Total Intragovernmental

238,228 4,097 244,940 10,809 238,228

Total Intra-governmental

With the public:

Cash and Other Monetary Assets (Note 4)

298 - 298 - 298

Cash and other monetary assets (Note 4)

Accounts Receivable, Net (Note 6)

5,353 87 5,266 - 5,353

Accounts receivable[, net] (Notes 6 and 7)

Loans Receivable, Net (Note 7)

113,450 - 113,450 - 113,450

Loans receivable, net (Note 8)

Inventory and Related Property, Net (Note 8)

23 - 23 - 23

Inventory and related property, net (Note 9)

General Property, Plan, and Equipment, Net (Note 9)

2,588 113 2,475 - 2,588

General property[, plant,] and equipment, net (Note 10)

Advances and Prepayments

587 11 576 - 587

Advances and prepayments

Investments (Note 5)

3 3 - - 3

Investments [,net] (Note 5)

Total With the Public

122,302 214 122,088 - 122,302

Total other than intra-governmental/with the public

Total Assets

360,530 4,311 367,028 10,809 360,530

Total assets

Stewardship PP&E (Note 10) Stewardship PP&E (Note 11)

LIABILITIES (NOTE 12)

Intragovernmental:

17 11,077 10,766 328

Accounts payable (Note 17)

Accounts Payable (Note 14)

80 -11 -237 - (248)

Reconciling Item- Accounts payable - Benefit program contributions payable (Note 15) (RC 21)

Debt (Note 12)

132,821 - 132,821 - 132,821

Debt (Note 14)

Advances from Others and Deferred Revenue

14 - 57 43 14

Advances from others and deferred revenue (RC 23)

1 11,622 - 11,623

Other Liabilities (Notes 15 and 17)

Other Liabilities (Note 14)

11,871 11 237 - 248 Reconciling Item - Accounts payable - Benefit program contributions payable (Note 15)

(RC 21)

Total Intragovernmental

144,786 18 155,577 10,809 144,786

Total Intra-governmental

With the public:

Accounts Payable

2,353 15 2,338 - 2,353

Accounts payable

Federal Employee Benefits Payable

1,376 52 1,324 - 1,376

Federal employee [and veteran] benefits payable (Note 15)

Environmental and Disposal Liabilities (Note 13)

258 - 258 - 258

Environmental and disposal liabilities (Note 16)

Benefits Due and Payable

8,580 - 8,580 - 8,580

Benefits due and payable

Loan Guarantee Liabilities (Note 7)

(601) - -601 - (601)

Loan guarantee liabilities (Note 8)

Insurance and Guarantee Program Liabilities

14,226 - 14,226 - 14,226

Insurance and guarantee program liabilities

Advances from Others and Deferred Revenue

122 80 42 - 122

Advances from others and deferred revenue

Other Liabilities (Note 14, 15 & 16)

12,977 204 12,773 - 12,977

Other liabilities (Notes 17, 18, and 19)

Total With the Public

39,291 351 38,940 - 39,291

Total other than intra-governmental/with the public

Total Liabilities

184,077 369 194,517 10,809 184,077

Total liabilities

Commitments and Contingencies (Note 16) Commitments and Contingencies (Note 19)

Net Position:

Unexpended Appropriations - Funds from Dedicated Collections (Note 17)

468 468 - - 468

Unexpended appropriations - Funds from Dedicated Collections (Note 20)

Unexpended Appropriations - Funds from Other Than Dedicated Collections

127,658 - 127,658 - 127,658

Unexpended appropriations - Funds from other than Dedicated Collections

Total Unexpended Appropriations (Combined)

128,126 468 127,658 - 128,126

Total Unexpended Appropriation (Combined or Consolidated)

3,473 - 1,297 2,176

Cumulative results of operations - Funds from Dedicated Collections

Cumulative Results of Operations - Funds from Dedicated Collections (Note 17)

3,473 - - -1,297 1,297

Reconciling Item - GTAS presents this line as a consolidated total

- 44,854 -1,297 46,151

Cumulative results of operations - Funds other than those from Dedicated Collections

Cumulative Results of Operations - Funds from Other Than Dedicated Collections

44,854 - - 1,297 (1,297)

Reconciling Item - GTAS presents this line as a consolidated total

Total Cumulative Results of Operations (Combined)

48,327 3,473 44,854 - 48,327

Total Cumulative Results of Operations (Combined or Consolidated)

Total Net Position

176,453 3,941 172,512 - 176,453

Total net position

Total Liabilities and Net Position

360,530 4,310 367,029 10,809 360,530

Total liabilities and net position

168 Section II | Financial Information

Reclassification of Statement of Net Cost to Line Items Used for the Government-wide Statement of Net Cost for the Year Ending September 30, 2021

FY 2021 USDA SNC Line Items Used to Prepare FY 2021 Government-wide SNC

Financial Statement Line Amounts

Dedicated

Collections

All Other

Amounts Eliminations Total Reclassified Financial Statement Line

Gross Costs Gross Cost

2,167 233,176 - 235,343 Non-federal gross cost

Federal gross cost

86 1,983 - 2,069 Benefit program costs (RC 26)/2

63 3,405 2,501 967 Imputed costs (RC25)/2

180 3,990 2,607 1,563 Buy/Sell Cost (RC24)/2

- 12 - 12 Purchase of assets (RC 24)/2

- 3,685 - 3,685 Borrowing and other interest expense (RC05)/2

24 521 - 545 Other expenses (without reciprocals) (RC 29)

- -12 - (12) Reconciling Item - Purchase of assets

353 13,584 5,108 8,829 Total federal gross cost

Total Gross Costs 244,172 2,520 246,760 5,108 244,172 Department total gross cost

Earned Revenue Earned revenue

1,027 7,771 - 8,798 Non-federal earned revenue

- -4 - (4) Reconciling Item - Custodial revenue - Non-federal earned revenue

1,027 7,767 - 8,794 Adjusted Non-federal earned revenue

Federal earned revenue

17 3,156 2,607 566 Buy/sell revenue (exchange) (RC24)/2

- 12 - 12 Purchase of assets offset (RC 24) / 2

5 - - 5 Federal securities interest revenue including associated gains and losses (exchange) (RC 03)/2

- 561 - 561 Borrowing and other interest revenue (exchange) (RC 05)/2

101 - - 101 Collections Transferred in to a TAS Other Than the General Fund of the U.S. Government - Exchange

(RC 13)

- -12 - (12) Reconciling Item - Purchase of assets

- (1) - (1) Reconciling Item - Custodial revenue - Buy/sell revenue (exchange( (RC24)/2

123 3,716 2,607 1,232 Total federal earned revenue

Less: Total Earned Revenue 10,026 1,150 11,483 2,607 10,026 Department total earned revenue

Net Cost of Operations (Note 18) 234,146 1,370 235,277 2,501 234,146 Net cost of operations

USDA | 2021 Agency Financial Report 169

Reclassification of Statement of Changes in Net Position to Line Items Used for Government-wide Statement of Operations and Changes in Net Position for the Year Ending September 30, 2021

FY 2021 USDA SCNP Line Items Used to Prepare FY 2021 Government-wide SCNP

Financial Statement Line Amounts

Dedicated

Collections

All Other

Amounts Eliminations Total Reclassified Financial Statement Lines

Unexpended Appropriations:

Beginning Balances 82,942 191 82,751 - 82,942 Net position, beginning of period

Appropriations Received 285,692 12 285,680 - 285,692 Appropriations Received as Adjusted (Rescissions and Other Adjustments) (RC 41)/1

285 8,098 8,098 285 Non-expenditure transfers-in of unexpended appropriations and financing sources (RC 08) /1

Appropriations transferred in/out (252) - 8,635 8,098 537 Non-expenditure transfers-out of unexpended appropriations and financing sources (RC 08) /1

Other Adjustments (15,268) - (15,268) - (15,268) Appropriations Received as Adjusted (Rescissions and Other Adjustments) (RC 41)/1

Appropriations Used (224,988) 20 224,968 - 224,988 Appropriations Used (RC 39)

Net Change in Unexpended Appropriations 45,184 277 44,907 - 45,184 Net Change in Unexpended Appropriations

Total Unexpended Appropriations: Ending Balance 128,126 468 127,658 - 128,126 Total Unexpended Appropriations

Cumulative Results of Operations:

Beginning Balances 34,098 3,284 30,815 - 34,099 Net position, beginning of period

- 212 - 212 Revenue and Other Financing Sources - Cancellations (RC 36)

- 26 - 26 Collections for Others Transferred to the General Fund of the U.S. Government (RC 44 )

Other Adjustments (233) - -5 - (5) Reconciling - Custodial Activity - Collections for others transferred to the General Fund of the

U.S. Government (RC 44)

Appropriations Used 224,988 20 224,968 - 224,988 Appropriations expended (RC 38)/1

1 16 - 17 Other Taxes and Receipts

Non-exchange Revenue 25,918 228 25,672 - 25,900 Collections transferred into a TAS Other Than the General Fund of the U.S. Government -

Nonexchange (RC 15)

Donations and Forfeitures of Cash and Cash Equivalents 1 1 - - 1 Other Taxes and Receipts

22,915 76 22,773 218 Appropriation of unavailable special or trust fund receipts transfers-in (RC 07)/1

76 22,697 22,773 0 Appropriation of unavailable special or trust fund receipts transfers-out (RC 07) /1

13 60,366 60,365 14 Non-expenditure Transfers-In of Unexpended Appropriations and Financing Sources (RC 08)/1

21,496 39,130 60,365 261 Non-expenditure Transfers-Out of Unexpended Appropriations and Financing Sources (RC 08)/1

2 74 75 1 Expenditure transfers-in of financing sources (RC 09) /1

- 75 75 - Expenditure transfers-out of financing sources (RC 09) /1

- 885 885 - Non-expenditure transfer-in of financing sources - capital transfers (RC 11)

13 872 885 - Non-expenditure transfers-out of financing sources - capital transfers (RC 11)

- 3,687 3,688 (1) Transfers-In Without Reimbursement (RC 18)/1

Transfers in/out without Reimbursement (28) - 3,687 3,688 (1) Transfers-Out Without Reimbursement (RC 18)/1

Imputed financing 966 63 3,404 2,501 966 Imputed Financing Sources (RC 25)/1

(99) 193 - 94 Other Taxes and Receipts

- (121) - (121) Reconciling Item - Custodial Activity - Other taxes and receipts

- 4,215 - 4,215 Non-entity collections transferred to the General Fund of the U.S. Government (RC 44)

- (123) - (123) Reconciling Item - Custodial Revenue - Non-entity collections transferred to the General Fund of

the U.S. Government (RC 44)

- -2 - (2) Accrual of Collections Yet to be Transferred to a TAS Other Than the General Fund of the U.S.

Government - Nonexchange (RC 16)

- 2 - 2 Reconciling Item - Custodial Activity - Accrual of Collections Yet to be Transferred to a TAS Other

Than the General Fund of the U.S. Government - Nonexchange (RC 16)

Other (3,237) - -882 - (882) Accrual for non-entity amounts to be collected and transferred to the General Fund of the U.S.

Government (RC 48)

Net Cost of Operations (234,146) 1,370 235,277 2,501 234,146 Net Cost of Operations

Net Change and Cumulative Results of Operations 14,229 189 14,039 - 14,228 Net Change

Cumulative Results of Operations: Ending 48,327 3,473 44,854 - 48,327 Cumulative Results of Operations

Net Position 176,453 3,941 172,512 - 176,453 Net Position

170 Section II | Financial Information

Required Supplementary Information

Deferred Maintenance And Repairs (Unaudited)

The Forest Service is steward to nearly 193 million acres of national forests and grasslands

within the NFS. On these NFS lands, the agency manages major assets that are categorized as

general PP&E, including nearly 40,000 administrative, recreation, and research buildings and

approximately 30,000 recreational sites, such as campgrounds, picnic areas, trailheads, and

interpretive sites.

Across the NFS, the agency also manages over 370,000 miles of roads, of which 65,000 miles

are for passenger vehicles; over 159,000 miles of trails for motorized and non-motorized use;

nearly 13,400 road and trail bridges; and over 1,700 Forest Service owned and Special Use

Permitted dam structures.

ARS owns/manages approximately 15 million gross square feet of facility space in

3,031 buildings on 403,798 acres of land. APHIS operates approximately 28 facilities, which

includes 378 buildings, in the United States and 14 facilities/buildings internationally.

The NRCS portfolio of owned assets encompasses 28 sites, including 12 parcels of owned land,

223 buildings, and about 222 other structures.

Deferred Maintenance & Repairs (DM&R) estimates include capitalized PP&E, non-capitalized

heritage assets, and non-capitalized or fully depreciated PP&E.

No DM&R is reported for stewardship land because land is considered to be in acceptable

condition unless an environmental contamination or liability is identified and the land cannot be

used for its intended purpose. Stewardship land easements are excluded from DM&R since

ownership is retained by the landowner.

Defining and Implementing Maintenance and Repairs Policies in Practice

Policies for ranking and prioritizing DM&R activities for most assets, except roads, trails, and

bridges, are based on condition surveys performed on a 5-year revolving schedule. The agency’s

DM&R for NFS passenger car roads is determined every year from random sample surveys

providing a moderate level of confidence in the accuracy of the data reported. DM&R is not

reported for roads that are not part of the passenger-car system. Bridge class assessments occur

on a 2-year or 4-year revolving schedule. To-date, surveys of all administrative buildings, dams,

bridges, roads open to passenger cars, and recreation sites have been accomplished.

ARS, APHIS, and NRCS use similar condition surveys to estimate DM&R on all major classes

of its PP&E and heritage assets.

USDA | 2021 Agency Financial Report 171

Ranking and Prioritizing Maintenance and Repairs Activities

Maintenance and repair activities are prioritized based on condition surveys and ranked based on

PP&E and heritage assets that pose serious threats to public health or safety, a natural resource,

or the ability of the agency to implement its mission.

Factors Considered in Setting Acceptable Condition

The standards for acceptable operating condition for various classes of PP&E and heritage assets

are as follows:

Conditions of roads and bridges within the NFS road system are measured by various standards:

• Federal Highway Administration regulations for the Federal Highway Safety Act.

• Best management practices for the nonpoint source provisions of the Clean Water Act from

U.S. Environmental Protection Agency and States.

• Road management objectives developed through the National Forest Management Act forest

planning process.

• Forest Service directives—Forest Service Manual (FSM) 7730, Operation and Maintenance;

Forest Service Handbook (FSH) 7709.56a, Road Preconstruction, and FSH 7709.56b,

Transportation Structures Handbook.

Dams in the NFS are managed according to FSM 7500, Water Storage and Transmission, and

FSH 7509.11, Dams Management Handbook. The condition of a dam is acceptable when the

dam meets current design standards and does not have any deficiencies that threaten the safety of

the structure or public. For dams to be rated in acceptable condition, the agency needs to restore

the dams to the original functional purpose, correct unsightly conditions, or prevent more costly

repairs.

Buildings in the NFS shall comply with the International Family of Building and Related Codes,

the National Fire Protection Association Life Safety Code, the Forest Service Health and Safety

Handbook, and the Occupational Safety Health Administration as determined by condition

surveys and safety inspections. These requirements are found in FSM 7310, Buildings and

Related Facilities.

Recreation facilities in the NFS are located within recreation sites that range from highly

developed sites to general forest areas such as campgrounds, trailheads, trails, water and

wastewater systems, interpretive facilities, and visitor centers. Recreation sites are managed in

accordance with Federal laws and regulations (Code of Federal Regulations [CFR] 36).

Detailed management guidelines are contained in FSM 2330, Publicly Managed Recreation

Opportunities, and forest- and regional-level user guides. Quality standards for developed

172 Section II | Financial Information

recreation sites in the NFS were established as Meaningful Measures for health and cleanliness,

settings, safety and security, responsiveness, and the condition of the facility.

Trails and trail bridges in the NFS are managed according to Federal law and regulations

(CFR 36). More specific direction is contained in FSM 2350, Trail, River, and Similar

Recreation Opportunities, and the FSH 2309.18, Trails Management Handbook.

ARS, APHIS, and NRCS define acceptable condition in accordance with standards comparable

to those used in private industry for buildings and other structures.

Deferred Maintenance and Repair Costs

Asset Category

FY 2021 Ending

Balance

FY 2021 Beginning

Balance

FY 2020 Ending

Balance

FY 2020 Beginning

Balance

General PP&E $ 6,782 $ 6,343 $ 6,343 $ 5,663

Heritage Assets

252 223 223 210

Total

$ 7,034 $ 6,566 $ 6,566 $ 5,873

DM&R costs increased in FY 2021 across all categories within General PP&E except for roads.

Roads DM&R is based on a small random sample that provides an estimate that can range within

a statistical band. The difference reduction is within those bands.

DM&R costs increased in FY 2020 mainly due to the estimate for passenger car roads within the

NFS. The remaining increase is spread across all categories within General PP&E including

bridges, buildings, dams, minor constructed features, trails, trail bridges, wastewater systems,

and water systems.

USDA | 2021 Agency Financial Report 173

Combining Statement of Budgetary Resources (Unaudited)

FPAC

Business

Center FSA CCC RMA NRCS FNS FSIS AMS APHIS

FY 2021

Budgetary Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority,

Net (Discretionary and Mandatory) $ 24 $ 21,176 $ 330 $ 792 $ 117 $ 605 $ 6,621 $ 55,563 $ 132 $ 915 $ 649

Appropriations (Discretionary and Mandatory) 292 10,848 6 2,686 - 7,838 4,358 211,887 1,208 6,183 2,417

Borrowing Authority (Discretionary and Mandatory) - - 3,515 13,207 537 - - - - - -

Spending Authority from Offsetting Collections

(Discretionary and Mandatory)

10 305 2,931 77 117 4,286 68 70 246 191 257

Total Budgetary Resources

326 32,329 6,782 16,762 771 12,729 11,047 267,520 1,586 7,289 3,323

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) 309 25,398 4,110 15,913 581 12,120 4,850 188,200 1,365 3,965 1,721

Unobligated Balance, End of Year:

Apportioned, Unexpired Accounts 9 5,616 2,396 447 19 599 3,534 44,938 206 2,829 1,476

Exempt from Apportionment, Unexpired Accounts - - - - - - - - - 85 -

Unapportioned, Unexpired Accounts

- 1,251 276 401 171 5 8 3,816 - 293 105

Unexpired Unobligated Balance, End of Year

9 6,867 2,672 848 190 604 3,542 48,754 206 3,207 1,581

Expired Unobligated Balance, End of Year

8 64 - 1 - 5 2,655 30,566 15 117 21

Unobligated Balance, End of Year (Total)

17 6,931 2,672 849 190 609 6,197 79,320 221 3,324 1,602

Total Budgetary Resources

326 32,329 6,782 16,762 771 12,729 11,047 267,520 1,586 7,289 3,323

Outlays, Net, and Disbursements, Net:

Outlays, Net (Total) (Discretionary and Mandatory) 307 24,095 12,464 6,800 4,325 166,562 1,088 5,024 1,429

Distributed Offsetting Receipts (-)

- (418)

(63)

- (1) (4) (18) (199) (9)

Agency Outlays, Net (Discretionary and Mandatory)

$ 307 $ 23,677

$ 12,401

$ 6,800 $ 4,324 $ 166,558 $ 1,070 $ 4,825 $ 1,420

Disbursements, Net (Total) (Mandatory)

$ 1,079

$ 93

174 Section II | Financial Information

FS RD ARS NASS NIFA ERS FAS Staff Offices Total

FY 2021

Budgetary Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority,

Net (Discretionary and Mandatory) $ 4,592 $ 3,863 $ 4,278 $ 256 $ 25 $ 737 $ 11 $ 453 $ 613 $ 97,027 $ 4,725

Appropriations (Discretionary and Mandatory) 8,517 6,922 - 1,566 184 1,944 87 451 6,224 273,612 6

Borrowing Authority (Discretionary and Mandatory) - - 10,852 - - - - - - 13,207 14,904

Spending Authority from Offsetting Collections

(Discretionary and Mandatory)

594 691 9,317 160 26 39 2 70 1,444 8,536 12,365

Total Budgetary Resources

13,703 11,476 24,447 1,982 235 2,720 100 974 8,281 392,382 32,000

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) 9,742 6,920 15,940 1,737 235 2,091 93 773 1,876 277,308 20,631

Unobligated Balance, End of Year:

Apportioned, Unexpired Accounts 2,648 4,411 8,260 222 - 691 2 91 5,298 73,017 10,675

Exempt from Apportionment, Unexpired Accounts - - - - - - - - - 85 -

Unapportioned, Unexpired Accounts

1,293 72 247 1 - (80) - 10 1,066 8,241 694

Unexpired Unobligated Balance, End of Year

3,941 4,483 8,507 223 - 611 2 101 6,364 81,343 11,369

Expired Unobligated Balance, End of Year

20 73 - 22 - 18 5 100 41 33,731 -

Unobligated Balance, End of Year (Total)

3,961 4,556 8,507 245 - 629 7 201 6,405 115,074 11,369

Total Budgetary Resources

13,703 11,476 24,447 1,982 235 2,720 100 974 8,281 392,382 32,000

Outlays, Net, and Disbursements, Net:

Outlays, Net (Total) (Discretionary and Mandatory) 8,553 4,848 1,495 179 1,416 80 405 397 239,467

Distributed Offsetting Receipts (-)

(679) (2,844)

(18) - (14) (1) - 19 (4,249)

Agency Outlays, Net (Discretionary and Mandatory)

$ 7,874 $ 2,004

$ 1,477 $ 179 $ 1,402 $ 79 $ 405 $ 416 $ 235,218

Disbursements, Net (Total) (Mandatory)

$ 2,853

$ 4,025

USDA | 2021 Agency Financial Report 175

FPAC Business

Center FSA CCC RMA NRCS FNS FSIS AMS APHIS

FY 2020

Budgetary Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts Budgetary

Non-

Budgetary

Credit

Reform

Financing

Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority,

Net (Discretionary and Mandatory) $ 8 $ 5,146 $ 226 $ 1,175 $ 111 $ 626 $ 6,340 $ 40,053 $ 91 $ 856 $ 719

Appropriations (Discretionary and Mandatory) 257 32,383 - 1,769 - 8,331 5,871 136,090 1,105 5,732 1,425

Borrowing Authority (Discretionary and Mandatory) - - 4,012 35,525 432 - - - - - -

Spending Authority from Offsetting Collections

(Discretionary and Mandatory)

22 314 2,106 18 117 3,948 140 59 267 196 217

Total Budgetary Resources

287 37,843 6,344 38,487 660 12,905 12,351 176,202 1,463 6,784 2,361

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) 266 18,142 4,081 37,985 436 12,303 6,219 130,168 1,348 5,984 1,761

Unobligated Balance, End of Year:

Apportioned, Unexpired Accounts 14 19,573 1,958 49 41 599 3,483 16,501 105 354 545

Exempt from Apportionment, Unexpired Accounts - - - - - - - - - 7 -

Unapportioned, Unexpired Accounts

- 73 305 452 183 - 7 334 - 421 2

Unexpired Unobligated Balance, End of Year

14 19,646 2,263 501 224 599 3,490 16,835 105 782 547

Expired Unobligated Balance, End of Year

7 55 - 1 - 3 2,642 29,199 10 18 53

Unobligated Balance, End of Year (Total)

21 19,701 2,263 502 224 602 6,132 46,034 115 800 600

Total Budgetary Resources

287 37,843 6,344 38,487 660 12,905 12,351 176,202 1,463 6,784 2,361

Outlays, Net, and Disbursements, Net:

Outlays, Net (Total) (Discretionary and Mandatory) 251 14,540 18,636 10,490 4,278 114,224 1,061 3,830 1,390

Distributed Offsetting Receipts (-)

- (217)

(23)

- (1) (5) (18) (195) (8)

Agency Outlays, Net (Discretionary and Mandatory)

$ 251 $ 14,323

$ 18,613

$ 10,490 $ 4,277 $ 114,219 $ 1,043 $ 3,635 $ 1,382

Disbursements, Net (Total) (Mandatory)

$ 1,452

$ (58)

176 Section II | Financial Information

FS RD ARS NASS NIFA ERS FAS Staff Offices Total

FY 2020

Budgetary Budgetary

Non-

Budgetary

Credit Reform

Financing

Accounts Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary Budgetary

Non-

Budgetary

Credit Reform

Financing

Accounts

Budgetary Resources:

Unobligated Balance from Prior Year Budget

Authority, Net (Discretionary and Mandatory) $ 3,146 $ 8,103 $ 5,621 $ 826 $ 17 $ 727 $ 6 $ 301 $ 1,238 $ 69,378 $ 5,958

Appropriations (Discretionary and Mandatory) 8,052 6,232 1 1,628 180 1,745 85 437 (196) 211,126 1

Borrowing Authority (Discretionary and Mandatory) - - 11,210 - - - - - - 35,525 15,654

Spending Authority from Offsetting Collections

(Discretionary and Mandatory)

774 818 10,026 174 21 24 6 17 1,278 8,293 12,249

Total Budgetary Resources

11,972 15,153 26,858 2,628 218 2,496 97 755 2,320 324,322 33,862

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) 7,692 11,316 17,396 2,390 218 1,807 91 324 1,768 239,782 21,913

Unobligated Balance, End of Year:

Apportioned, Unexpired Accounts 2,279 2,580 9,258 217 - 751 4 340 479 47,873 11,257

Exempt from Apportionment, Unexpired Accounts - - - - - - - - - 7 -

Unapportioned, Unexpired Accounts

2,000 1,187 204 - - (85) 1 10 35 4,437 692

Unexpired Unobligated Balance, End of Year

4,279 3,767 9,462 217 - 666 5 350 514 52,317 11,949

Expired Unobligated Balance, End of Year

1 70 - 20 - 23 1 81 39 32,223 -

Unobligated Balance, End of Year (Total)

4,280 3,837 9,462 237 - 689 6 431 553 84,540 11,949

Total Budgetary Resources

11,972 15,153 26,858 2,627 218 2,496 97 755 2,321 324,322 33,862

Outlays, Net, and Disbursements, Net:

Outlays, Net (Total) (Discretionary and Mandatory) 6,346 8,351 1,348 165 1,395 69 366 371 187,111

Distributed Offsetting Receipts (-)

(496) (1,924)

(20) - (5) - - 49 (2,863)

Agency Outlays, Net (Discretionary and Mandatory)

$ 5,850 $ 6,427

$ 1,328 $ 165 $ 1,390 $ 69 $ 366 $ 420 $ 184,248

Disbursements, Net (Total) (Mandatory)

$ 1,153

$ 2,547

USDA | 2020 Agency Financial Report 177

Section III

Other Information

USDA Management Challenges

The Reports Consolidation Act of 2000 requires the U.S. Department of Agriculture’s (USDA)

Office of Inspector General (OIG) to report annually on the most serious management challenges

USDA and its agencies face. This year, OIG continued to refine the way they present the

management challenges. While the current challenges are like the ones from the previous year,

OIG sought to provide the Secretary and other policymakers with a more streamlined report that

improves clarity and gives significant information greater prominence. To accomplish this goal,

OIG consolidated and reduced the previous seven major challenge areas to four:

• Program Oversight and Accountability;

• Safety and Security;

• Program Performance, Results, and Outreach; and

• Financial Management.

USDA management takes these challenges very seriously and is aggressively pursuing corrective

actions to address all challenges.

The USDA Management Challenges report for FY 2021 is available on the USDA OIG website

at www.usda.gov/oig/reports/management-challenges.

178 Section III | Other Information

Summary of Financial Statement Audit

and Management Assurances

Summary of Existing Material Weaknesses

The U.S. Department of Agriculture’s (USDA or the Department) material weaknesses and

financial system non-conformance, as related to management’s assurance for the Federal

Managers’ Financial Integrity Act of 1982 (FMFIA) and the certification for the Federal

Financial Management Improvement Act of 1996 (FFMIA), are listed in Exhibit 27 and

Exhibit 28.

Exhibit 27: Summary of Financial Statement Audit

Audit Opinion: Unmodified 2021 Consolidated Financial Statement Audit

Restatement: No

Material Weakness

Beginning

Balance New Resolved Consolidated

Ending

Balance

Improvement Needed in

Financial Management

1 1

Improvement Needed in

Information Technology

Security and Controls

1 1

TOTAL

MATERIAL WEAKNESSES

2 2

Exhibit 28: Summary of Management Assurances

Effectiveness of Internal Control Over Reporting (Federal Managers’ Financial Integrity Act of

1982 [FMFIA] § 2)

Statement of Assurance: Modified

Material Weakness

Beginning

Balance

New Resolved Consolidated Reassessed

Ending

Balance

Information Technology 1 1

Financial Management 1 1

TOTAL

MATERIAL WEAKNESSES

2 2

USDA | 2020 Agency Financial Report 179

Effectiveness of Internal Control Over Operations (FMFIA § 2)

Statement of Assurance: Unmodified

Material Weakness

Beginning

Balance

New Resolved Consolidated Reassessed

Ending

Balance

TOTAL

MATERIAL WEAKNESSES

0 0

Conformance with Federal Financial Management System Requirements (FMFIA § 4)

Statement of Assurance: Systems do not conform to Financial Management System requirements

Non-Conformances

Beginning

Balance New Resolved Consolidated Reassessed

Ending

Balance

Funds Control

Management

1 1

TOTAL

NON-CONFORMANCES

1 1

Compliance with Section 803 (A) of the Federal Financial Management Improvement Act of

1996 (FFMIA)

Item Agency Auditor

1. Federal Financial Management System

Requirements

Lack of compliance noted Lack of compliance noted

2. Applicable Federal Accounting Standards Lack of compliance noted Lack of compliance noted

3. U.S. Standard General Ledger at

Transaction Level

Lack of compliance noted Lack of compliance noted

180 Section III | Other Information

Payment Integrity Information Act of 2019 –

Improper Payments Overview

Payment Integrity

Over the past two decades, laws and regulations governing the identification and recovery of

improper payments have evolved to improve payment accuracy to boost public confidence in

Federal programs’ stewardship of taxpayer dollars. The Improper Payments Information Act of

2002 (IPIA), as amended and expanded by other laws, collectively required agencies to

periodically review all programs and activities susceptible to significant improper payments, to

conduct payment recapture audits, and utilize Government wide Do Not Pay (DNP) initiatives.

Additionally, IPIA had extensive reporting requirements. IPIA was repealed and replaced by the

Improper Payment Elimination and Recovery Act of 2010 (IPERA) followed by the Improper

Payment Elimination and Recovery Improvement Act of 2012 (IPERIA). IPERIA was repealed

and replaced by the Payment Integrity Information Act of 2019 (PIIA).

PIIA modified and restructured existing improper payments laws to help agencies better identify

and reduce any money wasted because of improper government payments. It should be noted

that not all improper payments are fraud, and not all improper payments represent a monetary

loss to the government. An improper payment (IP) is defined as any payment that should not

have been made or that was made in an incorrect amount (including overpayments and

underpayments) under statutory, contractual, administrative, or other legally applicable

requirements. Additionally, an unknown payment (UP) is defined as a payment that could be

either proper or improper, but the agency cannot discern whether the payment was proper or

improper due to insufficient or lack of documentation.

Annually, the Department submits data to Office of Management and Budget (OMB) that is

collected and presented on www.paymentaccuracy.gov/ by an individual agency or on a

Government-wide consolidated basis. This website contains current and historical information

about improper payments made under Federal programs, as well as extensive information about

how improper payments are defined and tracked.

Please refer to the www.paymentaccuracy.gov/ website for detailed results from the

Department’s efforts in fiscal year 2021 to comply with PIIA.

USDA | 2021 Agency Financial Report 181

Civil Monetary Penalties

The U.S. Department of Agriculture (USDA or the Department) maintains regulations regarding civil monetary policies at Title 7 of the Code

of Federal Regulations § 3.91. The Department reviews and updates the penalties in accordance with the Civil Monetary Penalties Inflation Act

of 2015.

Each year, the Department must update its civil monetary penalties to account for annual inflation. On May 10, 2021, the Department published

the revised penalties for 2021 in the Federal Register (www.federalregister.gov/documents/2021/05/10/2021-09542/civil-monetary-penalty-

inflation-adjustments-for-2021).

The following table briefly describes the penalty, under which authority it pertains, and the current penalty amounts.

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Improper recordkeeping 7 U.S.C. 136i-1(d) Insecticides and

Environmental Pesticide

Control

05/10/2021 A maximum of $975 for the first

offense and a minimum of $1,894

in the case of subsequent

offenses, except that the penalty

will be less than $1,894 if the

Secretary determines that the

person made a good faith effort

to comply.

Agricultural

Marketing Service

Violation of the unfair

conduct rule

7 U.S.C. 499b(5) Perishable Agricultural

Commodities Act

05/10/2021 Maximum of $5,308.

Agricultural

Marketing Service

Violation of the licensing

requirements

7 U.S.C. 499c(a) Perishable Agricultural

Commodities Act

05/10/2021 Maximum of $1,695 for each such

offense and not more than $423

for each day it continues, or a

maximum of $423 for each

offense if the Secretary

determines the violation was not

willful.

182 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Civil penalty in lieu of

license suspension

7 U.S.C. 499h(e) Perishable Agricultural

Commodities Act

05/10/2021 Maximum penalty of $3,388 for

each violative transaction or each

day the violation continues.

Agricultural

Marketing Service

Violation 7 U.S.C. 586 Export Apple Act 05/10/2021 Minimum of $153 and a

maximum of $15,481.

Agricultural

Marketing Service

Violation 7 U.S.C. 596 Export Grape and Plum Act 05/10/2021 Minimum of $296 and a

maximum of $29,622.

Agricultural

Marketing Service

Violation of an order

issued by the Secretary

7 U.S.C. 608c(14)(B) Agricultural Adjustment Act 05/10/2021 Maximum of $2,963. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to file certain

reports

7 U.S.C. 610 (C) Agricultural Adjustment Act 05/10/2021 Maximum of $296.

Agricultural

Marketing Service

Violation of a seed

program

7 U.S.C. 1596(b) Federal Seed Act 05/10/2021 Minimum of $101 and a

maximum of $2,020.

Agricultural

Marketing Service

Failure to collect any

assessment or fee

7 U.S.C. 2112(b) Cotton Research and

Promotion Act

05/10/2021 Maximum of $2,963. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee for a violation

7 U.S.C. 2621(b)(1) Potato Research and

Promotion Act

05/10/2021 Minimum of $1,328 and a

maximum of $12,247.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 2621(b)(3) Potato Research and

Promotion Act

05/10/2021 Maximum of $1,328. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation of a

program

7 U.S.C. 2714(b)(1) Egg Research and

Consumer Information Act

05/10/2021 Minimum of $1,535 and a

maximum of $15,353.

USDA | 2021 Agency Financial Report 183

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 2714(b)(3) Egg Research and

Consumer Information Act

05/10/2021 Maximum of $1,535. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to remit any

assessment or fee or for a

violation of a program

7 U.S.C. 2908(a)(2) Beef Research and

Information Act

05/10/2021 Maximum of $11,977.

Agricultural

Marketing Service

Failure to remit any

assessment or for a

violation of a program

7 U.S.C. 3410(b) Wheat and Wheat Foods

Research

05/10/2021 Maximum of $2,963.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation

7 U.S.C. 4314(b)(1) Floral Research and

Consumer Information Act

05/10/2021 Minimum of $1,394 and a

maximum of $13,940.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 4314(b)(3) Floral Research and

Consumer Information Act

05/10/2021 Maximum of $1,394. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of an order 7 U.S.C. 4510(b) Dairy Promotion Program 05/10/2021 Maximum of $2,577.

Agricultural

Marketing Service

Pay, collect, or remit any

assessment or fee or for a

violation

7 U.S.C. 4610(b)(1) Honey Research,

Promotion, and Consumer

Information Act

05/10/2021 Minimum of $774 and a

maximum of $7,939.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 4610(b)(3) Honey Research,

Promotion, and Consumer

Information Act

05/10/2021 Maximum of $794. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of a program 7 U.S.C.

4815(b)(1)(A)(i)

Pork Promotion, Research,

and Consumer Information

Act of 1985

05/10/2021 Maximum of $2,396.

184 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C.

4815(b)(3)(A)

Pork Promotion, Research,

and Consumer Information

Act of 1985

05/10/2021 Maximum of $1,198. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation of a

program

7 U.S.C. 4910(b)(1) Watermelon Research and

Promotion Act

05/10/2021 Minimum of $1,198 and a

maximum of $11,977.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 4910(b)(3) Watermelon Research and

Promotion Act

05/10/2021 Maximum of $1,198. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation of a

program

7 U.S.C. 6009(c)(1) Pecan Promotion and

Research Act of 1990

05/10/2021 Minimum of $1,951 and a

maximum of $19,496.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6009(e) Pecan Promotion and

Research Act of 1990

05/10/2021 Maximum of $1,949.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation

7 U.S.C. 6107(c)(1) Mushroom Promotion,

Research, and Consumer

Information Act of 1990

05/10/2021 Minimum of $948 and a

maximum of $9,476.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6107(e) Mushroom Promotion,

Research, and Consumer

Information Act of 1990

05/10/2021 Maximum of $948. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation

7 U.S.C. 6207(c)(1) Lime Research, Promotion,

and Consumer Information

Act of 1990

05/10/2021 Minimum of $948 and a

maximum of $9,476.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6207(e) Lime Research, Promotion,

and Consumer Information

Act of 1990

05/10/2021 Maximum of $948. Each day the

violation continues is a separate

violation.

USDA | 2021 Agency Financial Report 185

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation of a

program

7 U.S.C.

6307(c)(1)(A)

Soybean Promotion,

Research, and Consumer

Information Act

05/10/2021 Maximum of $1,951.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6307(e) Soybean Promotion,

Research, and Consumer

Information Act

05/10/2021 Maximum of $9,706. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation

7 U.S.C.

6411(c)(1)(A),

7 U.S.C.

6411(c)(1)(B)

Fluid Milk Promotion Act of

1990

05/10/2021 Minimum of $18,623 and a

maximum of $189,510.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6411(e) Fluid Milk Promotion Act of

1990

05/10/2021 Maximum of $9,753. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Knowingly labeling or

selling a product as

organic

7 U.S.C. 6519(c) Organic Foods Production

Act of 1990

05/10/2021 Maximum of $18,951.

Agricultural

Marketing Service

Failure to pay, collect, or

remit any assessment or

fee or for a violation of a

program

7 U.S.C.

6808(c)(1)(A)(i)

Fresh Cut Flowers and

Fresh Cut Greens

Promotion and Information

Act of 1993

05/10/2021 Minimum of $893 and a

maximum of $8,935.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 6808(e)(1) Fresh Cut Flowers and

Fresh Cut Greens

Promotion and Information

Act of 1993

05/10/2021 Maximum of $8,935. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of a program 7 U.S.C.

7107(c)(1)(A)

Sheep Promotion,

Research, and Information

Act of 1994

05/10/2021 Maximum of $1,742.

186 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 7107(e) Sheep Promotion,

Research, and Information

Act of 1994

05/10/2021 Maximum of $870. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of an order or

regulation issued

7 U.S.C. 7419(c)(1) Commodity Promotion,

Research, and Information

Act of 1996

05/10/2021 Minimum of $1,644 and a

maximum of $16,449 for each

violation.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 7419(e) Commodity Promotion,

Research, and Information

Act of 1996

05/10/2021 Minimum of $1,644 and a

maximum of $16,449. Each day

the violation continues is a

separate violation.

Agricultural

Marketing Service

Violation of an order or

regulation issued

7 U.S.C.

7448(c)(1)(A)(i)

Canola and Rapeseed

Research, Promotion, and

Consumer Information Act,

05/10/2021 Maximum of $1,644 for each

violation.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 7448(e) Canola and Rapeseed

Research, Promotion, and

Consumer Information Act

05/10/2021 Maximum of $8,224. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of an order or

regulation issued

7 U.S.C. 7468(c)(1) National Kiwifruit Research,

Promotion, and Consumer

Information Act

05/10/2021 Minimum of $823 and a

maximum of $8,224 for each

violation.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 7468(e) National Kiwifruit Research,

Promotion, and Consumer

Information Act

05/10/2021 Maximum of $823. Each day the

violation continues is a separate

violation.

Agricultural

Marketing Service

Violation of an order or

regulation

7 U.S.C. 7487(a) Popcorn Promotion,

Research, and Consumer

Information Act

05/10/2021 Maximum of $1,644 for each

violation.

Agricultural

Marketing Service

Violation 21 U.S.C.

1041(c)(1)(A)

Egg Products Inspection Act 05/10/2021 Maximum of $9,476 for each

violation.

USDA | 2021 Agency Financial Report 187

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Violation of an order or

regulation issued

7 U.S.C.

7807(c)(1)(A)(i)

Hass Avocado Promotion,

Research, and Information

Act of 2000

05/10/2021 Minimum of $1,495 and a

maximum of $14,965 for each

violation.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 7807(e)(1 Hass Avocado Promotion,

Research, and Information

Act of 2000

05/10/2021 Maximum of $14,965 for each

offense. Each day the violation

continues is a separate violation.

Agricultural

Marketing Service

Violation of certain

provisions

7 U.S.C. 1636b(a)(1) Livestock Mandatory

Reporting Act of 1999

05/10/2021 Maximum of $15,481 for each

violation.

Agricultural

Marketing Service

Failure to obey a cease-

and-desist order

7 U.S.C. 1636b(g)(3) Livestock Mandatory

Reporting Act of 1999

05/10/2021 Maximum of $15,481 for each

violation. Each day the violation

continues is a separate violation.

Agricultural

Marketing Service

Failure to obey an order 7 U.S.C.

1637b(c)(4)(D)(iii)

Dairy Product Mandatory

Reporting Program

05/10/2021 Maximum of $14,965 for each

offense.

Agricultural

Marketing Service

Willful violation 7 U.S.C. 1638b(b)(2) Country of Origin Labeling

Program

05/10/2021 Maximum of $1,202 for each

violation.

Agricultural

Marketing Service

Violation 7 U.S.C. 4535 and

4510(b)

Dairy Research Program 05/10/2021 Maximum of $2,577 for each

violation.

Agricultural

Marketing Service

Violation by a packer or

swine contractor

7 U.S.C. 193(b) Packers and Stockyards 05/10/2021 Maximum of $29,616.

Agricultural

Marketing Service

Failure for a livestock

market agency or dealer

to register

7 U.S.C. 203 Packers and Stockyards 05/10/2021 Maximum of $2,019 and not

more than $101 for each day the

violation continues.

Agricultural

Marketing Service

Operating without filing,

or in violation of, a

stockyard rate schedule

or of a regulation

7 U.S.C. 207(g) Packers and Stockyards 05/10/2021 Maximum of $2,020 and not

more than $101 for each day the

violation continues.

188 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Agricultural

Marketing Service

Stockyard owner,

livestock market agency,

or dealer who engages in

or uses any unfair,

unjustly discriminatory,

or deceptive practice

7 U.S.C. 213(b) Packers and Stockyards 05/10/2021 Maximum of $29,616.

Agricultural

Marketing Service

Stockyard owner,

livestock market agency,

or dealer who knowingly

fails to obey any order

7 U.S.C. 211, 212, or

213, codified at

7 U.S.C. 215(a)

Packers and Stockyards 05/10/2021 Maximum of $2,020.

Agricultural

Marketing Service

Live poultry dealer

violations

7 U.S.C. 228b-2(b) Packers and Stockyards 05/10/2021 Maximum of $86,156.

Agricultural

Marketing Service

Violation 7 U.S.C. 86(c) Grain Standards 05/10/2021 Maximum of $289,430.

Agricultural

Marketing Service

Failure to comply with

certain provisions

7 U.S.C. 254 U.S. Warehouse Act 05/10/2021 Maximum of $37,412 per

violation if an agricultural product

is not involved in the violation.

Animal and Plant

Health Inspection

Service

Violation 7 U.S.C. 1596(b) Federal Seed Act 05/10/2021 Minimum of $101 and a

maximum of $2,020.

Animal and Plant

Health Inspection

Service

Violation 7 U.S.C. 2149(b) Animal Welfare Act 05/10/2021 Maximum of $12,203, and

knowingly fail to obey a cease-

and-desist order has a civil

penalty of $1,803.

USDA | 2021 Agency Financial Report 189

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Penalty for any person

that causes harm to, or

interferes with, an animal

used for the purposes of

official inspection by

USDA

7 U.S.C. 2279e(a) Farming Opportunities

Training and Outreach

05/10/2021 Maximum of $14,965.

Animal and Plant

Health Inspection

Service

Violation 7 U.S.C. 3805(a) Swine Health Protection Act 05/10/2021 Maximum of $30,077.

190 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Penalty for any person

that violates or that

forges, counterfeits, or,

without authority from

the Secretary, uses,

alters, defaces, or

destroys any certificate,

permit, or other

document

7 U.S.C. 7734(b)(1) Plant Protection Act (PPA) 05/10/2021 Maximum of the greater of:

$74,824 in the case of any

individual (except that the civil

penalty may not exceed $1,496 in

the case of an initial violation of

the PPA by an individual moving

regulated articles not for

monetary gain), $374,119 in the

case of any other person for each

violation, $601,152 for all

violations adjudicated in a single

proceeding if the violations do

not include a willful violation, and

$1,202,304 for all violations

adjudicated in a single proceeding

if the violations include a willful

violation; or twice the gross gain

or gross loss for any violation,

forgery, counterfeiting,

unauthorized use, defacing, or

destruction of a certificate,

permit, or other document

provided for in the PPA that

results in the person deriving

pecuniary gain or causing

pecuniary loss to another person.

USDA | 2021 Agency Financial Report 191

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Penalty for any person

that violates or that

forges, counterfeits, or,

without authority from

the Secretary, uses,

alters, defaces, or

destroys any certificate,

permit, or other

document

7 U.S.C. 8313(b)(1) Animal Health Protection

Act (AHPA)

05/10/2021 Maximum of the greater of

$71,811 in the case of any

individual, except that the civil

penalty may not exceed $1,437 in

the case of an initial violation of

the AHPA by an individual moving

regulated articles not for

monetary gain, $359,054 in the

case of any other person for each

violation, $601,152 for all

violations adjudicated in a single

proceeding if the violations do not

include a willful violation, and

$1,202,304 for all violations

adjudicated in a single proceeding

if the violations include a willful

violation; or twice the gross gain

or gross loss for any violation,

forgery, counterfeiting,

unauthorized use, defacing, or

destruction of a certificate, permit,

or other document provided

under the AHPA that results in the

person deriving pecuniary gain or

causing pecuniary loss to another

person.

Animal and Plant

Health Inspection

Service

Penalty for any person

that violates certain

regulations regarding

transfers of listed agents

and toxins or possession

and use of listed agents

and toxins

7 U.S.C. 8401(i)(1) Agricultural Bioterrorism

Protection Act of 2002

05/10/2021 Maximum of $359,054 in the case

of an individual and $718,110 in

the case of any other person.

192 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Violation 15 U.S.C. 1825(b)(1) Horse Protection Act 05/10/2021 Maximum of $5,925.

Animal and Plant

Health Inspection

Service

Failure to obey Horse

Protection Act

disqualification

15 U.S.C. 1825(c) Horse Protection Act 05/10/2021 Maximum of $11,579.

Animal and Plant

Health Inspection

Service

Knowingly violating, or, if

in the business as an

importer or exporter,

violating, with respect to

terrestrial plants, any

provision

16 U.S.C. 1540(a)(1),

section 9(a)(1)(A)

through (F), (a)(2)(A)

through (D), (c), (d)

(other than

regulations relating

to record-keeping or

filing reports), (f), or

(g)

Endangered Species Act of

1973

05/10/2021 Maximum of $54,158 for each

violation.

Animal and Plant

Health Inspection

Service

Knowingly violating, or, if

in the business as an

importer or exporter,

violating, with respect to

terrestrial plants, any

other regulation

16 U.S.C. 1540(a)(1) Endangered Species Act of

1973

05/10/2021 Maximum of $25,935 for each

violation.

Animal and Plant

Health Inspection

Service

Violating, with respect to

terrestrial plants or any

regulation, permit, or

certificate

16 U.S.C. 1540(a)(1) Endangered Species Act of

1973

05/10/2021 Maximum of $1,367 for each

violation.

USDA | 2021 Agency Financial Report 193

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Knowingly and willfully

violating with respect to

the transportation of

animals by any rail

carrier, express carrier, or

common carrier (except

by air or water), a

receiver, trustee, or

lessee of one of those

carriers, or an owner or

master of a vessel

49 U.S.C. 80502(d) Transportation of Animals 05/10/2021 Minimum of $170 and a

maximum of $870.

Animal and Plant

Health Inspection

Service

Violation and its

implementing regulation

7 U.S.C. 1901 note,

as specified in

9 CFR 88.6

Commercial Transportation

of Equine for Slaughter Act

05/10/2021 Maximum of $822.

Animal and Plant

Health Inspection

Service

Knowingly violating or for

violating any other

provision provided that,

in the exercise of due

care, the violator should

have known that the

plant was taken,

possessed, transported,

or sold in violation of any

underlying law, treaty, or

regulation

16 U.S.C. 3373(a)(1) Lacey Act Amendments of

1981

05/10/2021 Maximum of $26,930 for each

violation, as specified in 16 U.S.C.

3373(a)(1) (but if the plant has a

market value of less than $360

and involves only the

transportation, acquisition, or

receipt of a plant taken or

possessed in violation of any law,

treaty, or regulation of the United

States, any Indian tribal law, any

foreign law, or any law or

regulation of any State, the

penalty will not exceed the

maximum provided for violation

of said law, treaty, or regulation,

or $26,930, whichever is less).

194 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Animal and Plant

Health Inspection

Service

Violation 16 U.S.C. 3373(a)(2) Lacey Act Amendments of

1981

05/10/2021 Maximum of $673.

Food and Nutrition

Service

Violating a provision or a

regulation under the Act

by a retail food store or

wholesale food concern

7 U.S.C. 2021(a) and

(c)

Food and Nutrition Act of

2008 (Act)

05/10/2021 Maximum of $120,231 for each

violation.

Food and Nutrition

Service

Trafficking in food

coupons

7 U.S.C.

2021(b)(3)(B)

Food and Nutrition Act of

2008 (Act)

05/10/2021 Maximum of $43,325 for each

violation, except that the

maximum penalty for violations

occurring during a single

investigation is $78,017.

Food and Nutrition

Service

Sale of firearms,

ammunition, explosives,

or controlled substances

for coupons

7 U.S.C.

2021(b)(3)(C)

Food and Nutrition Act of

2008 (Act)

05/10/2021 Maximum penalty for violations

occurring during a single

investigation is $78,017.

Food and Nutrition

Service

Any entity that submits a

bid to supply infant

formula and discloses the

amount of the bid,

rebate, or discount

practices in advance of

the bid opening or for any

entity that makes a

statement prior to the

opening of bids for the

purpose of influencing a

bid

42 U.S.C.

1786(h)(8)(H)(i)

Special Supplemental

Nutrition Program for

Women, Infants, and

Children

05/10/2021 Maximum of $ 183,629,453.

USDA | 2021 Agency Financial Report 195

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Food and Nutrition

Service

Vendor convicted of

trafficking in food

instruments

42 U.S.C.

1786(o)(1)(A) and 42

U.S.C. 1786(o)(4)(B)

Special Supplemental

Nutrition Program for

Women, Infants, and

Children

05/10/2021 Maximum of $15,877 for each

violation, except that the

maximum penalty for violations

occurring during a single

investigation is $63,509.

Food and Nutrition

Service

Vendor convicted of

selling firearms,

ammunition, explosives,

or controlled substances

in exchange for food

instruments

42 U.S.C.

1786(o)(1)(B) and 42

U.S.C. 1786(o)(4)(B)

Special Supplemental

Nutrition Program for

Women, Infants, and

Children

05/10/2021 Maximum of $15,487 for each

violation, except that the

maximum penalty for violations

occurring during a single

investigation is $63,509.

Food Safety and

Inspection Service

Violation 21 U.S.C.

1041(c)(1)(A)

Egg Products Inspection Act 05/10/2021 Maximum of $9,476 for each

violation.

Forest Service Willful disregard of the

prohibition against the

export of unprocessed

timber originating from

Federal lands

16 U.S.C.

620d(c)(1)(A)

Federal Lands 05/10/2021 Maximum of $975,230 per

violation or three times the gross

value of the unprocessed timber,

whichever is greater.

Forest Service Violation 16 U.S.C.

620d(c)(2)(A)(i)

Forest Resources

Conservation and Shortage

Relief Act

05/10/2021 Maximum of $146,285 per

violation.

Forest Service Penalty for a person that

should have known that

an action was a violation

regardless of whether

such violation caused the

export of unprocessed

timber originating from

Federal lands

16 U.S.C.

620d(c)(2)(A)(ii),

Forest Resources

Conservation and Shortage

Relief Act

05/10/2021 Maximum of $97,523 per

violation.

196 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Forest Service Willful violation 16 U.S.C.

620d(c)(2)(A)(iii)

Forest Resources

Conservation and Shortage

Relief Act

05/10/2021 Maximum of $975,230.

Forest Service Violation involving

protections of caves

16 U.S. C. 4307(a)(2) Federal Cave Resources

Protection

05/10/2021 Maximum of $21,314.

Federal Crop

Insurance

Corporation

Willfully or intentionally

providing any false or

inaccurate information

7 U.S.C.

1515(h)(3)(A)

Federal Crop Insurance Act 05/10/2021 Maximum of the greater of the

amount of the pecuniary gain

obtained as a result of the false or

inaccurate information or the

noncompliance; or $12,650.

Rural Housing

Service

Violation of section 536

of Title V of the Housing

Act of 1949

42 U.S.C.

1490p(e)(2)

Housing Act of 1949 05/10/2021 Maximum of $207,313 in the case

of an individual, and a maximum

of $2,073,133 in the case of an

applicant other than an

individual.

Rural Housing

Service

Penalty for equity

skimming

42 U.S.C. 1490s(a)(2) Housing Act of 1949 05/10/2021 Maximum of $37,412.

Rural Housing

Service

Submitting false

information, submitting

false certifications, failing

to timely submit

information, failing to

maintain real property in

good repair and condition,

failing to provide

acceptable management

for a project, or failing to

comply with applicable

civil rights laws and

regulations

42 U.S.C.

1490s(b)(3)(A)

Housing Act of 1949 05/10/2021 Maximum of the greater of twice

the damages USDA, guaranteed

lender, or project secured for a

loan under Title V suffered or

would have suffered as a result of

the violation; or $74,824 per

violation.

USDA | 2021 Agency Financial Report 197

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Commodity Credit

Corporation

Penalty for willful failure

or refusal to furnish

information or willful

furnishing of false

information under

Section 156

7 U.S.C. 7272(g)(5) Federal Agricultural

Improvement and Reform

Act of 1996

05/10/2021 Maximum of $16,449 for each

violation.

Commodity Credit

Corporation

Willful failure or refusal

to furnish information or

willful furnishing of false

data by a processor,

refiner, or importer of

sugar, syrup, and

molasses

7 U.S.C. 7272(g)(5) Federal Agriculture

Improvement and Reform

Act of 1996

05/10/2021 Maximum of $16,449 for each

violation.

Commodity Credit

Corporation

Filing a false acreage

report that exceeds

tolerance

7 U.S.C. 7272(g)(5) Federal Agriculture

Improvement and Reform

Act of 1996

05/10/2021 Maximum of $16,449 for each

violation.

Commodity Credit

Corporation

Knowingly violating any

regulation of the

Secretary of the

Commodity Credit

Corporation pertaining to

flexible marketing

allotments for sugar

7 U.S.C. 1359hh(b) Agricultural Adjustment Act

of 1938

05/10/2021 Maximum of $12,023 for each

violation.

Commodity Credit

Corporation

Knowingly violating

regulations promulgated

by the Secretary

pertaining to cotton

insect eradication

7 U.S.C. 1444a(d) Agricultural Act of 1949 05/10/2021 Maximum of $14,811 for each

offense.

198 Section III | Other Information

Program Office

Penalty

(Name of Penalty)

United States Code

(U.S.C.) Citation

Statutory Authority;

Positive Law and Section

Authority (Statute)

Date of

Current

Adjustment

Current Penalty Level

($ Amount)

Office of the

Secretary

Making, presenting,

submitting, or causing to

be made, presented, or

submitted a false,

fictitious, or fraudulent

claim

31 U.S.C. 3802(a)(1) Program Fraud Civil

Remedies Act of 1986

05/10/2021 Maximum of $11,804.

Office of the

Secretary

Making, presenting,

submitting, or causing to

be made, presented, or

submitted a false,

fictitious, or fraudulent

written statement

31 U.S.C. 3802(a)(2) Program Fraud Civil

Remedies Act of 1986

05/10/2021 Maximum of $11,804.

USDA | 2021 Agency Financial Report 199

Grants Program

Exhibit 29 shows that the U.S. Department of Agriculture (USDA) has 785 grants/cooperative

agreements with an undisbursed balance of $27,559,349.73 for which closeout has not yet

occurred, but for which the period of performance has elapsed by 2 years or more prior to

September 30, 2020.

Exhibit 29: Grants Program Summary

Category 2–3 Years >3–5 Years >5 Years

Number of Grants/Cooperative

Agreements with Zero Dollar Balances

55 18 23

Number of Grants/Cooperative

Agreements with Undisbursed Balances

512 129 48

Total Amount of Undisbursed Balances $13,483,174.88 $8,885,586.22 $5,190,588.63

USDA made progress compared with the baseline of Fiscal Year (FY) 2020. There were net

reductions of 86 percent on the number of grants/cooperative agreements with zero-dollar

balances and 70 percent on the number of grants/cooperative agreements with undisbursed

balances. Overall, USDA, in FY 2021, attained a total net reduction of 74 percent from the

number of grants/cooperative agreements reported in FY 2020.

USDA faces several challenges leading to delayed grant agreement award closeout, including:

• Timely receipt of the financial and accomplishment reports for the completion of closeout

reports from grantees;

• Delays by grantees in adjusting valid funds after the period of performance;

• Project Director/Authorized Representative relocation and delayed response;

• Institutions and Investigators affected by the COVID-19 pandemic;

• Delays on receipts of final vouchers;

• Administrative challenges related to finalizing rates and budget line-item agreements; and

• Delays in the resolution of audits by grant recipients.

Each USDA grant-making agency continues to review outstanding grants/cooperative

agreements and monitoring open balances through the Agency quarterly Unliquidated

Obligations review for appropriate closeout actions. The grant-making agencies’ accountable

officers continue their closeout of grants/cooperative agreements efforts and continuous

communication with the recipients of USDA funds to ensure compliance with requirements of

Title 2 CFR Part 200 and better management of Federal Funds.

Page Intentionally Blank

USDA | 2021 Agency Financial Report 201

Abbreviations–Acronyms

— A —

A&O ......................Administrative and Operating

AARCC ..................Agricultural Research and Commercialization Corporation

AARs .....................Acquisition Approval Requests

ACEP .....................Agricultural Conservation Easement Program

ACIF ......................Agriculture Credit Insurance Fund

ADA ......................Anti-Deficiency Act

AFR .......................Agency Financial Report

AFRI ......................Agriculture and Food Research Initiative

AgCMS ..................Agriculture Conference Management System

AgNIC ....................Agriculture Network Information Collaborative

AHPA ....................Animal Health Protection Act

AIPs .......................Approved Insurance Providers

ALE ........................Agricultural Land Easement

AMS ......................Agricultural Marketing Service

APHIS ....................Animal and Plant Health Inspection Service

APP .......................Annual Performance Plan

APPR .....................Annual Performance Plan and Report

APR .......................Annual Performance Report

AQI........................Agricultural Quarantine Inspection

ARC .......................Agriculture Risk Coverage

ARP .......................American Rescue Plan

ARS .......................Agricultural Research Service

ASF........................African Swine Fever

— B —

BAR .......................Budget and Accrual Reconciliation

BARC .....................Beltsville Agricultural Research Center

BOC .......................Budget Object Classification

202 Abbreviations—Acronyms

— C —

CACFP ...................Child and Adult Care Food Program

CAP .......................Commodity Assistance Program

CARES Act .............Coronavirus Aid, Relief, and Economic Security Act

CART .....................Conservation Assessment Ranking Tool

CBD .......................Cannabidiol

CBOs .....................Certificates of Beneficial Ownership

CCC .......................Commodity Credit Corporation

CCE .......................Commodity Certificate Exchange

CDM......................Cybersecurity Diagnostic and Migration

CEP .......................Community Eligibility Provision

CF ..........................Community Facilities

CFAP .....................Coronavirus Food Assistance Program

CFR .......................Code of Federal Regulations

CIO ........................Chief Information Officer

CIR ........................Contract Implementation Ratio

CN .........................Child Nutrition

CNM .....................Nanocellulosic Materials

CNP .......................Child Nutrition Program

CNPP .....................Center for Nutrition Policy and Promotion

CoC .......................Cushion of Credit

COVID-19 ..............Coronavirus Disease 2019

CPI ........................Consumer Price Index

CPIC ......................Capital Planning and Investment Control

CRP .......................Conservation Reserve Program

CTA .......................Conservation Technical Assistance

CTAT .....................Conference Transparency and Accountability Tool

CVV/B ...................Cash-Value Voucher/Benefit

— D —

DGA ......................Dietary Guidelines Advisory Committee

DHS .......................Department of Homeland Security

DISC ......................Digital Infrastructure Services Center

DM&R ...................Deferred Maintenance

DNP ......................Do Not Pay

DOL .......................Department of Labor

USDA | 2021 Agency Financial Report 203

— E —

EA .........................Enterprise Architecture

EBB .......................Enterprise Budget Bot

E-Board .................Executive Information Technology Investment Review Board

EBT .......................Electronic Benefits Transfers

eFG .......................ezFedGrants

EQIP ......................Enviornmental Quality Incentives Program

ERM ......................Enterprise Risk Management

ERP .......................Enterprise Resource Planning

ERS ........................Economic Research Service

EWA ......................Early Warning Alert

— F —

FAS........................Foreign Agricultural Service

FASAB ...................Federal Accounting Standards Advisory Board

FBwT .....................Fund Balance with Treasury

FCC .......................Federal Communications Commission

FCIC ......................Federal Crop Insurance Corporation

FDPIR ....................Food Distribution Program on Indian Reservations

FECA .....................Federal Employees' Compensation Act

FFAR .....................Foundation for Food and Agricultural Research

FFB ........................Federal Financing Bank

FFMIA ...................Federal Financial Management Improvement Act

FFMS .....................Federal Financial Management System

FISMA ...................Federal Information Security Modernization Act

FITARA ..................Federal Information Technology Reform Act

FLP ........................Farm Loan Program

FMFIA ...................Federal Managers' Financial Integrity Act

FMMI ....................Financial Management Modernization Initiative

FNS .......................Food and Nutrition Service

FPAC .....................Farm Production and Conservation

FR..........................Financial Report

FS ..........................Forest Service

FSA........................Farm Service Agency

FSFL ......................Farm Storage Facility Loan Program

FSH .......................Forest Service Handbook

FSIS .......................Food Safety and Inspection Service

FSM ......................Forest Service Manual

FY ..........................Fiscal Year

204 Abbreviations—Acronyms

— G —

GAAP ....................Generally Accepted Accounting Principles

GAO ......................Government Accountability Office

GAOA ....................Great American Outdoors Act

GL .........................General Ledger

GPRA ....................Government Performance and Results

GSA .......................General Services Administration

GTAS .....................Governmentwide Treasury Account Symbol Adjusted Trial Balance System

— H —

H.R. .......................House of Representatives

HANA ....................High-Performance Analytic Appliance

HHS .......................Health and Human Services

— I —

IBNR ......................Incurred but Not Reported

ICN ........................Institute of Child Nutrition

IP ..........................Improper Payment

IPERA ....................Improper Payment Elimination and Recovery Act of 2010

IPERIA ...................Improper Payment Elimination and Recovery Improvement Act of 2012

IPIA .......................Improper Payments Information Act of 2002

IPP ........................Inspection Program Personnel

IT ...........................Information Technology

ITSD ......................Information Technology Services Division

— K —

KPIs .......................Key Performance Indicators

— L —

L&WCF ..................Land and Water Conservation Fund

LP ..........................Livestock and Poultry

— M —

MOU .....................Memorandum of Understanding

MPIRG ..................Meat and Poultry Inspection Readiness Grant

MRL ......................Maximum Residue Level

MRP ......................Marketing and Regulatory Programs

USDA | 2021 Agency Financial Report 205

— N —

N/A .......................Not Available

NAL .......................National Agricultural Library

NAP .......................Noninsured Crop Disaster Assistance Program

NASS .....................National Agricultural Statistics Services

NFC .......................National Finance Center

NFS .......................National Forest Service

NIFA ......................National Institute of Food and Agriculture

NOAA ....................National Oceanic and Atmospheric Administration

NRCS .....................Natural Resources Conservation Service

NRHP ....................National Register of Historic Places

NSLP .....................National School Lunch Program

NTIA ......................National Telecommunications and Information Administration

NVS .......................National Veterinary Stockpile

— O —

OCFO ....................Office of the Chief Financial Officer

OCIO .....................Office of the Chief Information Officer

OCS .......................Office of the Chief Scientist

OG&A ...................Office of Grants and Agreements

OGC ......................Office of the General Counsel

OIG .......................Office of Inspector General

OMB .....................Office of Management and Budget

OPEM ...................Office of Property and Enviornmental Management

OPM .....................Office of Personnel Management

OPPE .....................Office of Partnership and Public Engagement

OSCAL ...................Open Security Control Assessment Language

OSEC .....................Office of the Secretary

— P —

P-EBT ....................Pandemic Electronics Benefits Transfer

PCCP .....................Pandemic Cover Crop Program

PHA .......................Priority Heritage Assets

PHR .......................Public Health Regulation

PIIA .......................Payment Integrity Information Act of 2019

PIR ........................Practice Implementation Rate

PL ..........................Public Law

PLC ........................Price Loss Coverage

PP&E .....................Property, Plant and Equipment

PPA .......................Plant Protection Act

PPS ........................Procurement and Property Services

206 Abbreviations—Acronyms

— Q —

Q ...........................Quarter

Q3 .........................Third quarter

— R —

RC&D ....................Resource Conservation and Development

RCPP .....................Regional Conservation Partnership Program

RD .........................Rural Development

REE .......................Research, Education, and Economics

RHIF ......................Rural Housing Insurance Fund

RISE .......................Rural Innovation Stronger Economy

RMA ......................Risk Management Agency

RPA .......................Robotics Process Automation

— S —

SAM ......................System for Award Management

SAP .......................Systems, Applications, and Products

SBP .......................School Breakfast Program

SBR .......................Statement of Budgetary Resources

SER ........................Single Effective Rate

SFFAS ....................Statement of Federal Financial Accounting Standards

SFSP ......................Summer Food Service Program

SNAP .....................Supplemental Nutrition Assistance Program

SOB .......................Summary of Business

SPS ........................Sanitation Performance Standard

SRA .......................Standard Reinsurance Agreement

SSP ........................Shared Services Provider

— T —

TB .........................Technical Bulletin

TBT .......................Technical Barrier to Trade

TCA .......................Terrestrial Condition Assessment

TEFAP ...................The Emergency Food Assistance Program

TFAA .....................Trade and Foreign Agricultural Affairs

TFCCA ...................Tropical Forest and Coral Reef Conservation Act

TFP ........................Thrifty Food Plan

TPMC ....................Tuscon Plant Materials Center

TSP ........................Thrift Savings Plan

USDA | 2021 Agency Financial Report 207

— U —

U.S.C .....................U.S. Code

UDO ......................Undelivered Orders

UEI ........................Unique Entity Identifier

ULOs .....................Unliquidated Obligations

UP .........................Unknown Payment

USAID ...................U.S. Agency for International Development

USDA ....................U.S. Department of Agriculture

USSGL ...................U.S. Standard General Ledger

— W —

WCF ......................Working Capital Fund

WHIP ....................Wildfire and Hurricane Indemnity

WIC .......................Women, Infants, and Children

WRE ......................Wetland Reserve Easement

United States Department of Agriculture