Detailed Information on the
Non-Insured Crop Assistance Program Assessment

Develop and implement a performance-based budgeting process that will improve accountability of budget and financial systems.

Investigate options to commission independent evaluations that analyze program performance.

Eliminate shortcomings identified in financial audits by strengthening the processes and controls in the program's disbursement system.

Measure: Increase the percentage of eligible crops with NAP coverage.

Explanation:Calculated as the dollar value of crops participating in the NAP program divided by the universe of NAP-eligible crop dollar value.

Measure: The number of crops for which NAP coverage is requested.

Explanation:This is the number of crops planted by individual producrers for which coverage has been requested.

Measure: Reduce or maintain average processing time for NAP benefits.

Explanation:This measure portrays the average processing time from the producer's filing a claim to the payment of the benefit. It is counted in days and tiers down from the measure to "reduce or maintain average processing time for emergency and disaster program benefits." For years 2002, 2003, & 2004, actual crop year data was used. To syncronize with other reporting requirements, NAP estimated its actual 2005 data on a fiscal year basis for the purpose of this conversion.

Is the program purpose clear?

Explanation: The purpose of the Noninsured Crop Disaster Assistance Program (NAP) is to provide financial assistance at a catastrophic level of coverage to American agricultural producers of noninsurable crops when low yields or prevented planting occurs as the result of a natural disaster. This assistance is offered for crops for which the catastrophic level of insurance is not available through the Federal Crop Insurance Corporation (FCIC) noninsurable crops to obtain a catastrophic level of coverage as a risk management tool to strengthen and preserve the economic stability of American agricultural producers.

Evidence: The Federal Agriculture Improvement and Reform (FAIR) Act of 1996, as amended by the Agricultural Risk Protection Act (ARPA) of 2000; regulations found at 7 C.F.R. Part 1437.

Does the program address a specific and existing problem, interest, or need?

Explanation: Without NAP, risk protection for producers of noninsurable crops is non-existent. When natural disaster causes a catastrophic loss of crop production, NAP guarantees coverage for damaged noninsurable crops equal to the FCIC catastrophic insurance. Prior to 1995, noninsurable crop producers did not have risk protection for their crops. They had to rely on the authorization of ad hoc disaster programs to receive assistance when impacted by natural disasters. NAP plays a large and essential role in the Federal government efforts to ensure the economic stability of agriculture. Agricultural lenders frequently require either NAP or crop insurance as collateral for farm loans, and numerous Congressional testimonials have been given as to the essential and growing role of NAP to stabilize farm income, during unproductive years or in the face of natural disaster.

Evidence: 1994 Federal Crop Insurance Reform (FCIC) Act; Agricultural Risk Protection Act (ARPA) of 2000.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: By statute, NAP is limited to commercial crops or other agricultural commodities for which catastrophic risk protection under FCIC is not available. Furthermore, the statute provides a limitation on multiple benefits for the same loss. There are no other comparable natural disaster programs in the private market or in the public sector that would cover noninsurable crops.

Evidence: See 1994 Federal Crop Insurance Reform (FCIC) Act; Fair Act of 1996; regulations found at 7 C.F.R. Part 1437.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: NAP is an invaluable tool for agricultural producers. NAP is available in the event of a natural disaster for crops not covered by catastrophic insurance provided through the FCIC (CAT). Producers having 100 percent loss on their crop are expected to receive a 27.5 percent return. This can assist producers in paying bills, provides some security when dealing with banking institutions in obtaining loans, and offers a level of risk protection for noninsurable crop producers. Furthermore, there are no other comparable natural disaster programs in the private market or public sector that would cover noninsurable crops. Historically, the only other programs that paid losses to producers of noninsurable crops are those authorized under ad hoc disaster legislation. However, this is inefficient, in that the costs are unknown and it provides no safety net for individual producers when losses are not wide spread to trigger ad hoc disaster programs. Recurring ad hoc disaster programs removes the initiative of the producer to take any action to protect themselves. There is no other approach for this purpose that would be more efficient.

Evidence: See Fair Act of 1996. Eligible loss levels and payment rates are established by statute and are not subject to change, according to 7 C.F.R. Part 1437.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Noninsured Crop Disaster Assistance Program (NAP) is delivered through local county FSA offices, which enable the greatest grassroots outreach possible in the specific county locations where intended beneficiaries live and farm. The local county offices enroll producers in the program, take applications for loss, and provide payment to producers affected by natural disasters. According to statute, only eligible program participants receive program benefits, which are disbursed directly to program participants, as a result of natural disasters. Underserved/targeted areas are informed of program benefits through such means as available news media, education and outreach/partnering. FSA has partnered with the USDA Cooperative State Research, Education, and Extension Service (CSREES), State departments of agriculture, and private sector parties to reach specialty crop producers, including small and limited resource producers. FSA continually strives and succeeds in expanding its targeted beneficiaries through these efforts.

Evidence: FAIR Act of 1996 and ARPA of 2000 require NAP to serve all farmers of noninsurable crops for which catastrophic (CAT) level crop insurance is not available for a food or fiber crop. Program announcements and outreach efforts for funding and enrollment into NAP reach intended beneficiaries. FACT sheets found at www.fsa.usda.gov; county office newsletters.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The specific long-term performance measure that focuses on the intended program outcome is to "increase the percentage of eligible crops with NAP coverage". The percentage of NAP coverage is determined by comparing the value of NAP coverage to the total value of eligible NAP crops nationwide. To focus on intended program performance, our long-term measure is the NAP participation rate. To account for both acreage and price, this measure is calculated as the value of crops participating in the NAP program divided by the universe of NAP-eligible crop value. The denominator in this calculation (the "universe") is calculated using data from Risk Management Agency (RMA) book of business summary reports and National Agricultural Statistics Service (NASS) Crop Values reports. The underlying intent, consistent with the 1994 Crop Insurance Reform Act, is that a given crop is eligible to be covered either by an RMA insurance program or by NAP. NASS reports the total value of U.S. crops for each year in its Crop Values report, including major field crops, specialty and horticultural crops, and hay and forages. NASS data are peer reviewed. Subtracting RMA's total liability (adjusting for the average deductible and the fact that not all eligible producers participate) from the NASS total provides an estimate of the "universe" of crop value eligible for NAP in any given year. The numerator captures the value of crops covered by NAP in any given year. Until NAP data collection is revised, NAP data will only provide estimates of acreage and the dollars paid out only after a loss is triggered. To capture total NAP "covered liability," RMA conducted special computer runs on their database to calculate total crop value of insured commodities. More specifically, the ratio of total insured liability to total payments when a loss is triggered was used to calculate the ratio to be applied to NAP payments. This ratio was applied to the NAP data on "dollars paid out after a loss is triggered" to obtain an estimate of total NAP liability, and is the numerator in the participation calculation for any given year. Our long-term participation measure is important because it forges a close link between the crop insurance and NAP programs, as intended by the 1994 Crop Insurance Reform Act, which mandated both the CAT and NAP programs. An increasing share of eligible acreage should be captured by either insurance or NAP as time passes and producers increasingly become aware of, and use, these catastrophic yield-protection programs. This measure is incorporated in the FSA Draft 2005-2010 Strategic Plan, Goal 1, "Supporting Productive Farms and Ranches, Objective 1.3, "Mitigating Losses from Natural Disasters." FSA has selected the best available data sources for illustrating the purpose of the program. RMA implements a full spectrum of electronic data information edits checks to provide reasonable assurance that the information received and used is timely and credible. To further validate the RMA data, the Agency is exploring a long-term plan for interfacing the FSA acreage reporting software with the NAP software applications (units, approved yields, and crop table) to determine the value of crops covered by NAP. As an additional long-term measure, FSA includes the "increase in the number of crops for which NAP coverage is requested." This measures the use of NAP risk management tool by producers of various commodities and the acceptability of this tool, as eligible producers must apply for coverage prior to the advent of any natural disaster occuring and pay the application fee.

Evidence: See FSA FY 2005-2010 Draft Strategic Plan; USDA Draft FY 2005-2010 Strategic Plan; NAP Pay Grouping Reports compiled by the FSA Kansas City office provides information on the number of individual crops obtaining coverage. Using this information, NAP can monitor the percentage increase of crops obtaining coverage. See ARPA 2000; 7 CFR Part 1437; USDA, NASS Crop Value Summary Reports: RMA Summary of Business Reports.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The NAP long-term target is 13.9% NAP coverage in 2010. The targets, developed to measure adequate progress are 12% in 2005, 12.9% for 2006, and 13.9% for 2010. The 13.9% is an ambitious target when taking into account the total crop value eligible for NAP. The 2001-2005 average total crop value eligible for NAP is approximately $27 billion. The 2010 target of 13.9% equates to a value of NAP coverage of $4.05 billion or an increase of $810 million. To show any increase in the "percentage of eligible crops with NAP coverage" is considered an ambitious goal based on the factors surrounding this program. When RMA adds and/or removes a specific crop policy from year to year, subsequently, NAP participation decreases and/or increases. However, comparing the value of NAP crops covered to the value of crops eligible for NAP nationwide reflects a more accurate outcome that meaningfully reflects the purpose of the program. As RMA adds or removes crop policies, not only will NAP participation decrease and/or increase, but the eligible NAP crops nationwide increases and/or decreases. NAP has established long-term and annual targets for its other long-term measure, "increase in the number of crops for which NAP coverage is requested" that the Agency also considers ambitious. Modest increases are considered an ambitious goal because there are several forces working against NAP and its use as a risk management tool. First and foremost is the fact that NAP provides only 27.5 percent coverage when a producer losses 100 percent of his crop. This results in a limited level of risk protection ultimately affecting the program participation rate. However, it is the only risk tool available to producers of noninsurable crops. Second, many producers who received crop disaster program payments were required by statute to purchase NAP coverage for subsequent years. No such requirement is currently in place for 2007 and subsequent crop years. This will drive participation down. Third, NAP was also designed to gather information on noninsurable crops so that information can be shared with RMA to develop actuarially sound policies for the further expansion of crop insurance. As RMA expands insurance coverage to noninsurable crops, it will decrease the value and acres for which NAP coverage will be offered. Lastly, there is a national trend which is supported by the Agriculture Census that the number of farms, ranches, and producers are decreasing every year.

Evidence: NAP long-term measure is to "increase the percentaage of eligible crops with NAP coverage." NAP's long-term target is 13.9% NAP coverage in 2010. Our interim targets, developed to measure adequate progress in reaching the long-term goal, are 11.0% for 2004, 12.0% for 2005, and 12.9% for 2006. The targets for the long-term measure, "increase in the number of crops for which NAP coverage is requested," are for FY 2006 185,793; 2007 198,293; 2008 210,793; 2009 223,293; and 2010 235,793. See NAP Pay Grouping Report. The Kansas City mainframe system collects and summarizes this information on the NAP Pay Grouping Reports.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: FSA has established a quantifiable annual performance measures for NAP. The Agency uses the "increase number of crops for which NAP coverage is requested" and "increase the percentage of eligible crops with NAP coverage" as both long-term and annual performance measures and has set annual and long-term targets. This ensures the linkages required and ensures that progress towards meeting the goal is monitored in annual and long-term cycles. The first annual performance measure is "increase the numbers of crops for which NAP coverage is requested." For the purpose of this document, the term "crops" refers to the number of crops planted by individual producers. For example, if farmer A has three covered crops and farmer B has five covered crops, the total covered crops would equal eight. Producers request coverage for one or many crops on an application for coverage. This application notifies the Agency of the producer's interest to have risk protection by crop. This measure correlates to the other annual outcome measure to "increase the percentage of eligible crops with NAP coverage" in the FSA Draft 2005-2010 Strategic Plan. See Question 3.4 for description of the annual efficiency measure. The critical methodology for positively influencing the first long-term performance measure is to increase the number of crops having NAP coverage. In general, the more crops producers request to have coverage the greater the value of crops covered. While there are exceptions to this generalization, it is information that NAP can monitor closely throughout the year to assure that the program is on target for fulfilling its goal of supporting productive farms and ranches and mitigating losses from natural disasters.

Evidence: The NAP annual performance measures are to "increase the number of crops for which NAP coverage is requested" and " "increase the percentage of eligible crops with NAP coverage." See NAP Pay Grouping Reports; MIDAS; manual reports of processing time received from State offices; FSA Draft FY 2005-2010 Strategic Plan; USDA Draft FY 2005-2010 Strategic Plan

Does the program have baselines and ambitious targets for its annual measures?

Explanation: As stated above, the specific annual measures that focus on the intended program outcome are to "increase the percentage of eligible crops with NAP coverage" and "increase the number of crops for which NAP coverage is requested." For the percentage of eligible crops with NAP coverage, the Agency has established annual targets of 12.9% in FY 2006, 13.0% in FY 2007, 13.3% in FY 2008, 13.6% in FY 2009, and 13.9% in FY 2010. For the increase in number of crops for which NAP coverage is requested the Agency is targeting from the baseline of 135,793, which is derived from the 2001 through 2003 actual data, an increase of 12,500 crops per year through FY 2010. Originally, this resulted in a target of 218,054. However, due to the linkage requirements resulting from the Crop Disaster Program contained in legislation, the program exceeded this estimate. Therefore, an adjustment is being made for 2006 estimates to show a 25,000 crop increase from 2005. For subsequent years 2007 through 2010, the Agency is expecting to maintain the 12,500 increase as initially anticipated which reflects a new estimate of 235,793 crops for which coverage is requested in FY 2010. NAP provides only 27.5 percent coverage when a producer losses 100 percent of his crop. This results in a limited level of risk protection and ultimately affects the program participation rate as producers must pay in advance for coverage. As RMA expands insurance coverage to noninsurable crops it will decrease the value and acres for which NAP coverage will be offered. There is a national trend, which is supported by the Agriculture Census, that the number of self-sufficient farms, ranches, and producers are decreasing every year. Over the next few years, FSA will be facing financial decisions that could affect Agency services. The targets established for the annual measure to "increase the number of crops for which NAP coverage is requested" and "increase the percentage of eligible crops with NAP coverage" are considered ambitious based on the factors surrounding this program.

Evidence: For the performance measure to "increase the number of crops for which NAP coverage is requested," the Agency is using data from FY 2001 through 2003 as the baseline 135,793 crops for this measure and estimates a 12,500 crop increase per year through FY 2010. Thus the targets are: FY 2004: 148293; 2005: 160,793; 2006: 185,793; 2007: 198,293; 2008: 210,793; 2009: 223,293; and 2010: 235,793. For the percentage of eligible crops with NAP coverage, the Agencys annual targets are 12.9% in FY 2006; 13.0% in FY 2007; 13.3% in FY 2008; 13.6% in 2009, and 13.9% in FY 2010. See NAP Pay Grouping Reports; Agriculture Census.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The FSA primary partners are RMA, NASS, National Oceanic & Atmospheric Administration (NOAA), State cooperative extension services, Economic Research Service (ERS), State departments of agriculture, universities, and various specialized sectors of industry that provide data on crops, including aquaculture, nationwide. Ongoing discussions with FSA indicate the partners are involved with and committed to the long-term goals of the Program. FSA provided education to State and county personnel, through three separate national training sessions, in June 2001, March 2002, and October 2003. FSA develops national outreach tools, such as brochures and fact sheets shared with growers' associations, agencies, universities, and specialized groups. FSA participates with the FCIC Board in review of pilot crop policy submissions. Additionally, the Agency is held to specific standards for product delivery and subjected to rigorous scrutiny for consistency with program goals and statutory requirements before a crop is approved at the national level, and the eligible expenditures are disbursed. FSA initiates agreements with independent loss adjusters (LAs) to perform in-field inspections, appraisals, and other loss adjustment work, which establishes the basis for a producer payment and maintains the integrity of the program. They are required to have a minimum of 48 hours of crop appraisal training and eight hours of annual training to maintain their standing as an LA.

Evidence: See prepared local information for FSA county office newsletters and other local and national media advertisements and announcements; FSA training manuals; brochures; fact sheets, which can be found on the FSA internet site located at http://www.fsa.usda.gov/. See also "Govbenefits.gov, Your Benefits Connection" at www.govbenefits.gov.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Program evaluations are following policies and procedures and do not assess whether the program is achieving its desired long-term or annual goals. OIG periodically reviews aspects of the program to identify potential areas of improvement, but reviews are largely focused on the financial integrity of the portfolio and to ensure that funds are spent for authorized purposes. In addition, GAO periodically reviews selected aspects of the program, but not on a regular basis. Internally, NAP delivery is periodically reviewed in county offices by an appointed County Operations Reviewer (COR), under County Office Operations Review Program (CORP) procedure to ensure program weaknesses are addressed. These COR reviews are independent of county offices and work directly for the State Executive Director (SED). Any finding of fraud or county office wrongdoing is reported directly to the SED for appropriate action that could include an OIG investigation. If significant discrepancies are found, either State or National level program managers may request a national NAP target CORP review, focusing on a particular issue or set of issues.

Evidence: See USDA OIG Audit # 03006-4-SF for 1995 NAP; USDA OIG Audit # 03006-5-SF for 1995 NAP; USDA OIG Audit # 03601-32-TE for 1996 NAP. In addition, OIG conducted audits for disaster program years and using NAP information to determine producers eligibility. See USDA OIG Audit # 50801-3-KC for 1998 Disaster Crop Year; OIG Audit # 50601-9-TE for 2001  2002 Disaster Crop Years; General Accountability Office (GAO) report entitled Distribution of Audit Resources by Agency, FY 2005, Appendix D, page 17. See USDA OIG Audit # 03601-46-TE; GAO Letter to Committee on Agriculture, dated May 2, 2002; FSA Compliance with the IPIA of 2002 dated March 2005; USDA OIG Audit # 03601-0013-Ch, FSA Progress to Implement the IPIA 2002 dated March 2006. Both can be found at the OIG website. http://www.usda.gov/OIG/releaseandreport/htm

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The budget request for NAP has not fully projected the budgetary indirect and direct costs of the program, and the program still needs to be able to report all direct and indirect costs needed to meet performance targets. NAP is a mandatory program and, although annual apportionment requests are made for estimated budget requests by fiscal year, funds still need to be made available as needed to pay for crop losses. Estimating dollars spent for NAP is somewhat dependent on weather conditions and severity of loss. In years where very few natural disaster events occur, NAP will pay producers only a small portion of the program's estimated budget request. If wide spread natural disasters occur there is a chance the program's estimated budget could be exceeded. FSA is leading the USDA pilot for developing integrated budget/cost performance management data systems. When this is implemented, the Agency will have an activity-based cost management system bringing greater refinement and accountability in reporting on program performance and efficiency.

Evidence: See FSA Draft FY 2005-2010 Strategic Plan and USDA Draft FY 2005-2010 Strategic Plan. FSA maintains the following accounting and financial source documents to support development and reporting of budget estimates with linkage to performance goals: See NAP Spend-Out; CCC Daily Report; BUD25; FSA 2007 Budget Explanatory Notes; Annual budget request to OMB and FSA portion of President's Budget; and Congressional testimony to appropriations and authorizing committees.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: FSA has worked diligently to develop its strategic planning process and has established a comprehensive FY 2005-2010 Draft Strategic Plan, which aligns with the USDA Draft FY 2005-2010 Strategic Plan. FSA conducted extensive strategic planning stakeholder sessions from which clear mission, vision, and goals were developed. In-house personnel have conducted headquarters and field communications, strategy sessions, and planning meetings throughout each year. The FSA Draft Strategic Plan guides the way FSA carries out its mission, and is used to identify and justify the financial, personnel, and other resources necessary to best deliver its programs and measure results. FSA re-engineered key goals to improve Agency mission effectiveness; identified workable strategies for accomplishing the goals across traditional program "stove pipes"; and established more meaningful, quantifiable, and outcome-focused measures to help managers gauge progress more effectievely and convincingly. The Draft Strategic Plan now includes the NAP specific measure to "increase the percentage of eligible crops with NAP coverage" under the objective 1.3, "Mitigating Losses from Natural Disasters." All of the NAP performance measures identified in this PART link directly to the FSA Draft Strategic Plan.

Evidence: See FSA 2007 Budget Explanatory Notes; FSA Draft FY 2005-2010 Strategic Plan.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: As demonstrated in the explanations of 2.1 and 2.2 that outlined the use of data from RMA and NASS, FSA collects timely and credible performance information from key program partners and uses it to manage NAP and improve performance. Additionally, a variety of participation information is available to monitor FSA performance, such as number of producers per year, requested crop coverage, and crop losses filed. This information is obtained from Kansas City through normal reporting processes. FSA also shares data via e-mail, and depending on the subject matter, with industries and grower associations. FSA is working toward implementing a common information management system with RMA to reduce the incidence of both Agencies requesting duplicative information from producers. NAP has collected the baseline performance data necessary to set meaningful, ambitious performance targets with respect to NAP's performance measure, "increase the number of crops for which NAP coverage is requested." The data was collected from the FSA Kansas City IT department through internally controlled reporting processes. In addition, baseline performance data was collected for NAP's annual efficiency measure, "reduce or maintain average processing time for NAP program benefits." This data was collected from the FSA State and County Offices.

Evidence: Current information received from the FSA Kansas City mainframe includes the quantity of crops obtaining coverage and specific county offices were selected to monitor the time, in days, required to process the application for payment. Data received are validated through the Kansas City mainframe and accepted data are used as the basis for NAP coverage, as well as for analytical and statistical reporting within FSA. County file uploads. Olympic averages are automatically calculated in the National Crop Table (NCT) at https://intra2.fsa.usda.gov/nct2002/. Furthermore, NASS data, found at http://www.nass.usda.gov/Publications/Reports_By_Date/2006/February_2006.asp provides data to determine the value of crops nationwide eligible for NAP.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Statutory and regulatory requirements specify that producers must report crop loss and applicable program data in a timely manner to maintain program eligibility. FSA imposes penalties for late reported data and extreme cases of non-compliance. Federal employee performance elements are directly related to the FSA Draft Strategic Plan. Those employees responsible for NAP have elements tied to Goal 1, "Supporting Productive Farms and Ranches," Objective 1.3, "Mitigating Losses from Natural Disasters." State and county office performance elements hold program managers and partners accountable for cost efficiencies, quality, quantity, and timeliness in results of performance. The county offices are held accountable by the State and Federal offices for performance results. This is important because producers must comply with program provisions to gain eligibility and maintain program integrity. Producers by statute and regulation are required to file timely notices of loss and applications for payment that are vital to the integrity of NAP. FSA has the option of disapproving the application for payment, and imposing other applicable penalties such as liquidated damages. FSA routinely reviews applications with payments to determine the accuracy of the actual loss determinations and can assess additional penalties, over and above denial of payment, if a producer exhibits a pattern and practice of non-compliance (7 CFR Part 1437.10). Under the terms of the basic provisions, producers must pay interest at the rate prescribed in the applicable handbook. Producers are held accountable for timeliness and accuracy in reporting. This includes acreage reporting dates, application for coverage, within specified closing dates, and acreage planted reporting dates.

Evidence: See "Performance Management at FSA, RMA, and FAS" issued by the FSA Human Resources Division (December 2005); Email from the FSA Administrator to all employees, dated May 4, 2006, entitled "Linking Farm Service Agency (FSA) Employees to FSA's Draft Strategic Plan Framework; FSA Draft Strategic Plan Framework. In accordance with 7 CFR Part 1437, producers are held accountable for acreage information that is not reported within specified time periods.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: In accordance with the FAIR Act, as amended, the amount of administrative expense is an amount equal to $100 per crop per administrative county. Producer data are electronically audited by Kansas City, and used to calculate the amount of administrative expense due in each county office. As county offices issue checks to the producers for this program, payment limitation information is submitted to Kansas City to control amounts disbursed per person. KC Financial Analysis Reports clearly state the funding purpose and independent panels ensure that only those who meet the requirements are paid. FSA conducts annual reviews of randomly selected producers to ensure program integrity and identify any financial weaknesses. The Agency regularly seeks and relies on the USDA, Office of General Counsel (OGC), OIG, and OBPA, for guidance in the obligation of funds. OIG has not conducted a review of the Improper Payments Improvement Act (IPIA) specific to NAP, however, NAP policy, as established, minimizes FSA's vulnerability associated to improper payments. Statute and program policy requires producers to file an intent for coverage 30 calendar days prior to the coverage period. Nap has specific acreage reporting, notice of loss, and application for payment deadlines that enable FSA to timely validate and verify the crop and claimed cause of loss for which a payment is requested. FSA has established under IPIA an outline of NAP's internal controls to prevent improper payments. These internal controls are in place to ensure funds are spent for the intended purpose of the program. FSA is conducting a statististial sample as required by IPIA on high risk programs, including NAP. Results are expected before the end of the fiscal year. FSA prioritizes information technology (IT) expenditures. The IT Review Board, comprised of the Chief Information Officer, Chief Financial Officer, and other top-level Agency managers, monitors funding and spending. Within the FSA Draft Strategic Plan there is a scorecard that supports the Goals that includes the Agency measure to "maintain or increase percentage of proper payments."

Evidence: Federal Crop Insurance Reform Act (FCIC) identifies the types of expenses allowed such as all administrative and operating expenses of county offices and loss adjusters. ARPA of 2000 and 7 CFR Part 1437 authorizes FSA to be appropriated such sums as are necessary to cover administrative and operating expenses of the Commodity Credit Corporation (CCC) for administering NAP, which includes commission of loss adjusters, for the administrative and operating expenses of an approved natural disaster loss. See Improper Payments Information Act of 2002 (IPIA). NAP IPIA Risk Assessment; Emails supporting process of testing 05 NAP Payments for IPIA; IPIA NAP FY 2005 Sampling Selection; OMB Approved Apportionment for FY 2006. FSA is able to monitor amounts received (for the $100 service fee received from the producer) and amounts expended (for claims processed) periodically throughout the year, as requested, and at year-end. This information is provided by Kansas City in payment reports "Status of NAP Payments" and "Status of NAP Service Fees." See FSA BPMS Scorecard.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: FSA uses the efficiency measure of "reduce or maintain average processing time for NAP program benefits." This measure correlates to the broader efficiency measure, "reduce or maintain average processing time for emergency and disaster payments" as contained in the FSA Draft FY 2005-2010 Strategic Plan under Strategic Goal 1, "Supporting Productive Farms and Ranches," Objective 1.3, "Mitigating Losses from Natural Disasters." By measuring the efficiency of time, FSA can use the information for management decisions and to ascertain if there are any problem areas. By decreasing the number of days to process a producer's claim and ultimately issue payment, producers will save money on interest accrued for loans and debts. FSA will lower overhead costs and paperwork requirements to, not only FSA, but all participants. Through training and other activity, FSA anticipates accomplishing this goal. The measure is based on the average time expended for processing applications for payment, starting from the time the producer files certification of crop loss information, resulting from a natural disaster, and ending with local county committee review and approval. The baseline for this measure was developed using 2002 through 2004 actual processing time for the applications for payment. The baseline shows an average of 18.1 days of processing time until final approval of an application for payment. In addition to its efficiency measure, FSA has a number of cost-saving procedures that incorporate NAP activity. The loss adjustment process allows an applicant to certify harvested production and acreage, during certain timeframes. FSA is leading the USDA pilot for developing integrated budget/cost/performance management data systems. This will involve an activity-based cost management system to bring greater refinement and accountability in reporting on program efficiency. FSA has been working towards moving to a Web-based environment for support program delivery through real-time interaction. By moving to Web-based applications, the Agency will be in a better position to monitor and query program data to research and increase program efficiencies. This progress will be accelerated as funds are made available. In addition, FSA is moving into integrated Geospatial Information Systems (GIS) technology and processes to enhance business performance, which, in turn, increase efficiencies and cost effectiveness in program execution. FSA county and State offices assist the RMA data mining and GIS efforts by conducting growing season spot-checks to ascertain the cause of data anomaly. This promotes efficiency by assisting in the detection in program vulnerabilities.

Evidence: The annual efficiency measure is "reduce or maintain average processing time for NAP program benefits." The targets for estimated days in processing time through 2010 are as follows: 13.24 for 2005, 13.00 for 2006, 12.90 for 2007, 12.74 for 2008, and 12.60 for 2009, and 12.50 for 2010. See Common Information Management System (CIMS) illustrating interagency coordination of IT issues to reduce redundancies; Draft Exhibit 300 FY 2007 OMB Assessment for Farm Program Modernization (MIDAS); ARPA of 2000; FSA Draft 2005-2010 Strategic Plan.

Does the program collaborate and coordinate effectively with related programs?

Explanation: FSA partners with RMA, Cooperative State Research Education, & Extension Service (CSREES) and the USDA National Office of Outreach to provide natural disaster coverage education to farmers and ranchers. FSA frequently coordinates with RMA on issues related to implementation, including the expansion or elimination of insurance products, crop loss determinations, and program policies to ensure coverage is provided and maintained in a consistent manner. FSA seeks participation from other agencies in its annual evaluation of data, such as Olympic averages (refer to 3.1 for definition) of prices and yields, education, outreach, and tool development. Participation information, specifically, producers' participation, crop coverage, and loss information, according to reports provided by Kansas City are shared among the Agencies. County offices work with loss adjusters trained either by RMA and Multi-Peril Crop Insurance (MPCI) companies or by the State offices to appraise producers' crop loss due to natural disasters. FSA realized from the onset that data sharing was essential to collect program information and to leverage resources. FSA is working toward implementing a common information management system with RMA to reduce the incidence of both agencies requesting duplicative information from producers. Electronic messages are shared with other agencies within the Department on NAP and related programs, including wetland and conservation compliance and controlled substance, which are mandatory for NAP program eligibility, according to 7 CFR Part 1437.15. Partners, such as NASS, universities, and State extension services, provide information to FSA on an as-needed basis. The Service Center Information Management System (SCIMS) is a repository (central database) of customer information developed by FSA that is accessible and shared with Natural Resources and Conservation Service (NRCS), and Rural Development (RD).

Evidence: 1996 FAIR Act indicates there were no other comparable programs. Data from CSREES, NASS, ERS, can be found at www.usda.gov. See SCIMS; data from State departments of agriculture concerning certified organic producers, and certified turf grass sod producers.

Does the program use strong financial management practices?

Explanation: In the FSA FY 2005 Federal Managers' Financial Integrity Act (FMFIA) Assurance Statement and Report on Material Weaknesses and Systems Nonconformances submission, FSA identified the following material weaknesses: 1) improvement needed in information security controls, 2) improvement needed in financial system functionality and related processes, 3) improvement needed over the budget execution process, and 4) improvement needed in financial accounting and reporting policies and procedures. These findings apply to entirety of the FSA financial management controls, which would include NAP as one of the Agency programs. However, as reported in 3.7, FSA has milestones and corrective actions established and is reporting on them quarterly. OIG Audit Report 50601-0009-Te, entitled, "Disaster Assistance Payments for Crop Years 2001 and 2002," dated February 2006, identified improper NAP payments totaling $116,938. However, the audit report did not identify any material weaknesses. FSA has responded to all recommendations in the audit report, and is working with OIG to reach management decision on corrective actions. FSA also conducts CORP Target Reviews (see 2.6), deriving program error rates and related corrective actions to identify fraud, waste, and abuse, which helps to minimize erroneous payments.

Evidence: FSA "FY 2005 Federal Managers' Financial Integrity Act (FMFIA) Assurance Statement and Report on Material Weaknesses and Systems Nonconformances" dated November 2005; FSA "FY 2005 FMFIA 2nd Quarter Report on Corrective Action Milestones Scheduled for Completion During FY 2006;" OIG audit entitled, "Disaster Assistance Payments for Crop Years 2001 and 2002" dated February 2006 did not identify any material weaknesses. See question 2.6 for USDA OIG audits; CORP Target Reviews.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: In addressing the FMFIA related financial management control deficiencies cited in 3.6, FSA has undertaken corrective actions with milestones scheduled for completion this fiscal year. Already, the Agency has completed its review of specific accounting and reporting policies and procedures, and developed and documented improved procedures in collaboration with program offices to identify and record accruals for major CCC programs including NAP. A detailed corrective action plan in accordance to OMB Circular A-123, Managements Responsibility for Internal Control, to address segregation of duty, security, and control compliance issues identified in a prior fiscal year review of other FSA programs will be utilized to guide the implementation of changes to remediate control deficiencies that could be applicable to NAP. FSA addresses other challenges in program integrity through risk assessments. This includes a tightened monitoring system in Kansas City with respect to financial solvency and waste, fraud, and abuse issues and implementing a rigorous plan of operation submission and review standards for all participants. In addition, FSA is strengthening its ties with State and County Committees. FSA actively addresses any issues identified on the OIG management challenges list prepared from audit findings. Additionally, NAP delivery is periodically reviewed in county offices by an appointed County Operations Reviewer (COR), under County Office Operations Review Program (CORP) procedure to ensure program weaknesses are addressed. If significant discrepancies are found, either State or national level program managers may request a national NAP target CORP review, focusing on a particular issue or set of issues. Also, national level program managers monitor NAP's effectiveness and initiate program changes as issues arise and are identified. Two most recent changes included: the implementation of tropical agriculture policy provisions for States within tropical regions (published as a proposed rule on October 3, 2005, in the Federal Register) and changes to prevented planting policy provisions to ensure consistency between FSA programs (published as a final rule on March 17, 2006, in the Federal Register.) FSA's ability to make these changes, allows the program to be responsive to deficiencies identified.

Evidence: FSA "FY 2005 FMFIA 2nd Quarter Report on Corrective Action Milestones Scheduled for Completion During FY 2006;" Operations Review and Analysis Staff Fiscal Year 2005 Report; Notice NAP-76 National Target Review for NAP; Notice DAP-221, "Crop Disaster Program (CDP) County Office Review (COR) Report and OIG and Independent Audit Findings" that provides State and county offices with a summary of findings and follow-up procedure to ensure that these problems are avoided. See FSA OMB A-123 Appendix A "Risk Assessments for Producer Payments" submitted to USDA, Office of Chief Financial Officer; CORP Target Reviews discussed in 2.6.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: For the the long-term measure to "increase the percentage of eligible crops with NAP coverage," NAP exceeded its FY 2004 target of 11% with an 11.12% participation rate. In 2005, NAP exceeded its target of 12.0% with a 12.82% participation rate. There are external factors that contribute to and impact on the program's ability to achieve its targets. They include natural disasters, crop eligibility, and commodity price fluctuations. For example, the NASS crop value increased significantly from 2002 to 2003 and impacted the NASS and RMA data used by NAP to determine the universe of eligible crops and therefore measure NAP progress in meeting its goal. While this ratio may fluctuate somewhat from year to year, the program continues to increase steadily and is on track towards meeting its long-term target of 13.9% in 2010. For the long-term measure, "increase the number of crops for which NAP coverage is requested," NAP has also exceeded its targets from 2001 through 2005.

Evidence: The targets to increase the percentage of eligible crops with NAP coverage were 11.0% in 2004, 12.0% for 2005, and 12.9% in 2006. The percentage of eligible crops with NAP coverage was 13% in 2002, 6.6% in 2003, 11.2% in 2004, and 12.82% in 2005. The targets to increase the number of crops for which NAP coverage is requested were 2001, 72,793; 2002, 140,293; 2003, 135,793; 2004, 148,293; and 2005, 160,793. The actuals are for 2001, 73,035; 2002, 142,317; 2003, 192,029; 2004, 190,019; and 2005, 182,993. See the FSA Draft FY 2005-2010 Strategic Plan and data in measures section. See Kansas City NAP Pay Grouping Reports.

Does the program (including program partners) achieve its annual performance goals?

Explanation: Participation in NAP has increased steadily over the years as demonstrated in the data related to the NAP annual performance measure, "increase the number of crops for which coverage is requested" cited in questions 2.3 and 2.4. The Agency targeted from the baseline of 135,793 crops for which coverage was requested an increase of 12,500 crops per year. Over the last several years, the program saw major increases in participation above and beyond the projected targets and, as a result, has adjusted its 2006 target accordingly. The major rational for this overachievement has been the linkage requirement cited earlier. In order to continue on this path it will be critical for the FY 2007 legislation to continue to include this linkage. Given that the linkage is critical and prior years have had this as part of disaster bills, a "large extent" is appropriate as a way to acknowledge that the performance is related to the linkage and not just the raw performance of the program on its own. In addition, the other annual measure, "increase the percentage of eligible crops with NAP coverge" is new, so while there are positive results, the "large extent" rating reflects this as well.

Evidence: The targets to increase the percentage of eligible crops with NAP coverage were 11.0% in 2004, 12.0% for 2005, and 12.9% in 2006. The percenage of eliglble crops with NAP coverage was 13% in 2002, 6.6% in 2003, 11.2% in 2004, and 12.82% in 2005. The targets to increase the number of crops for which NAP coverage is requested were 2001, 72,793; 2002, 140,293; 2003, 135,793; 2004, 148,293; and 2005, 160,793. The actuals are for 2001, 73,035; 2002, 142,317; 2003, 192,029; 2004, 190,019; and 2005, 182,993. See FSA Draft FY 2005-2010 Strategic Plan cited earlier; NAP Pay Grouping Reports; and data in MITS.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: As outlined in 3.4, FSA uses the efficiency measure of "reduce or maintain average processing time for NAP program benefits." By decreasing the number of days to process a producer's claim and ultimately issue payment, producers save and avoid costs. FSA lowers overhead costs applicable to, not only FSA, but all participants. A review of the baseline data for this efficiency measure for 2002 through 2004 shows FSA decreased the total number of days in processing a claim from 25.02 days in 2002 to only 13.44 days in 2004. Recognizing the delay in processing claims, FSA provided annual training to State and county FSA offices to enable them to better understand the program and become more efficient in the implementation of NAP. The decrease in days is a direct result of the national training sessions held in both 2002 and 2003. Training was not held in subsequent years due to lack of funds.

Evidence: See FSA Draft FY 2005-2010 Strategic Plan under Strategic Goal 1, "Supporting Productive Farms and Ranches," Objective 1.3, "Mitigating Losses from Natural Disasters." The targets, in days, are 13.24 for 2005, 13.00 for 2006, 12.90 for 2007, 12.74 for 2008, and 12.60 for 2009, and 12.50 for 2010. Actual baseline data supports a decrease in processing claims from 25.02 days in 2002 to 13.44 days in 2004.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There is no other like program comparable to NAP at the Federal, State, or local levels. By statute, NAP only provides coverage when catastrophic risk protection for commodities is not available through FCIC sponsored insurance or private insurance companies. The natural disaster must occur before or during harvest and must directly affect the noninsurable crop.

Evidence: See FAIR Act. There are no other comparable natural disaster programs.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: While no evaluation currently exist that measure program results as it relates to the performance measures, there are evaluations that show postivie results in aspects of the program. For this reason, a "small exent" rating is provided to acknowledge those results. The independent NAP evaluations are primarily limited to OIG audits. These reviews tend to vary by objective and are not completed on a routine basis. In addition, the primary focus is the propriety of payments and internal controls, rather than the effectiveness or relevance of the program. However, the audits clearly meet the requirement for quality and scope called for in this question. Audit 03601-32-TE issued in May, 1999, included NAP claims paid in California, Texas, Georgia and Florida. These states produce the majority of specialty crops grown in the country; therefore they represent the states that would have the highest amount of NAP crops covered. In addition, audits covering the Improper Payment Act and emergency disaster programs have incorporated reviews of NAP program payments. FSA has maximized the usefulness of the OIG audits by expeditiously correcting any deficiencies noted and working with the auditors to implement effective controls to prevent reoccurrence of the findings. The audit findings have been addressed through a combination of legislated program modifications that removed the county trigger for program benefits, the development of software to compute indemnities, major revisions to the handbooks, adherence to signup and acreage reporting dates, and the development of a core group of well trained and experienced loss adjusters. The OIG audits conducted on NAP have shown no material weaknesses and that procedures are in place to ensure program payments are made for intended purposes. FSA also utilizes a County Office Review process that provides county and state offices reasonable assurance that the program is operating in accordance with written procedures.

Evidence: See USDA OIG Audit # 03006-4-SF for 1995 NAP; USDA OIG Audit # 03006-5-SF for 1995 NAP; USDA OIG Audit # 03601-32-TE for 1996 NAP. In addition, OIG conducted audits for disaster program years and using NAP information to determine producer's eligibility. See USDA OIG Audit # 50801-3-KC for 1998 Disaster Crop Year; OIG Audit # 50601-9-TE for 2001 2002 Disaster Crop Years. See USDA OIG Audit # 03601-46-TE, FSA Compliance with the IPIA of 2002 dated March 2005; USDA OIG Audit # 03601-0013-Ch, FSA Progress to Implement the IPIA 2002 dated March 2006