Statement of Senator Peter G. Fitzgerald

Senate Agriculture Subcommittee on Research, Nutrition and General Legislation Hearing

United States Senate

Wednesday, September 27, 2000

The General Accounting Office recently released a study asserting that our federal agencies squandered $20.7 billion last year due to poor financial management. Studies by the USDA Office of Inspector General and the General Accounting Office have found that our United States Department of Agriculture is no exception.

Since 1991, USDA has received a series of unfavorable financial audit reports "due to deficiencies in financial reporting that are attributable primarily to weaknesses in the agency's financial management systems (GAO)."

According to the Inspector General, the USDA's books are such a mess that at the beginning of this fiscal year its Fund Balance differed with the Treasury Department by $5 billion. Every American family must balance their checkbooks and try to make ends meet, yet this agency manages to lose track of $5 billion. Although subsequent efforts have reduced this difference, it still stands at more than $230 million. The books and records of USDA have been so poorly maintained for almost 10 years that the agency has not been able to account for its $118 billion in assets, does not know how much money it needs to collect or how much it currently collects, and it doesn't know the costs of its operations.

While our farmers struggle during these lean times of record low commodity prices, bureaucrats in Washington can't seem to keep track of billions of dollars of taxpayers' money. This disgraceful lack of accountability is especially troubling because the USDA was warned to address some of these problems as long as a decade ago.

The lax fiscal management of the agency has led to some disturbing findings. According to the most recent IG report, funds intended for soil conservation programs have been shifted and used for items "such as wall murals, transportation, and bringing civil lawsuits against owners of derelict properties." I can't possibly conceive how painting abstract wall murals helps address America's soil erosion problem.

The implications of the problems at the USDA reach beyond the agriculture sector of the economy. Many of the troubles have occurred in the USDA's nutrition programs. In a series of audits, the IG found that funds intended for feeding children at day care facilities under the Child and Adult Care Food Program were sent to addresses that turned out to be empty lots. The responsibilities of this agency are far too important for us to tolerate financial mismanagement of this magnitude.

Other record keeping entries indicate the department cannot substantiate whether its personal property records are accurate. According to the Inspector General, the USDA has a vehicle valued at $97 million. That's one heck of a car. I guess they must've gotten all of the options.

The problem is that the USDA acts as if it is not accountable to anyone. The chronic financial errors and overpayments revealed in the OIG and GAO reports demonstrate how taxpayers lose when federal agencies are not held accountable.

Any corporation that squandered money this way would have to answer to its shareholders. The American people deserve a government that is accountable to them. After all, it is taxpayers' money these agencies are spending.

I am very troubled by the findings contained in the reports and audits by GAO and the IG. Today's hearing addresses these problems and I look forward to guidance from the panelists on ways to rectify these problems.