Farm Payments

Basic Changes Needed To Avoid Abuse of the $50,000 Payment Limit Gao ID: RCED-87-176 July 20, 1987

GAO reviewed the: (1) Department of Agriculture's (USDA) administration of the $50,000 limit on direct agricultural support payments; and (2) impact on farm programs of individuals who reorganize their farming operations to qualify for additional payments.

GAO found that: (1) if the current trend in reorganizations continues through 1989, 31,300 additional persons could receive payments, which would increase total program costs by $2.3 billion; (2) USDA improperly approved 20 percent of the new recipients for program payments; (3) the USDA Inspector General's detailed review of 225 cases showed actual overpayments of $15.7 million from 1981 through 1986; (4) although USDA proposed changes that would eliminate most existing ways to avoid the payment limitation, the proposal did not include regulations and guidelines necessary to ensure proper implementation at the county office level; and (5) current Agricultural Stabilization and Conservation Service (ASCS) guidelines to county and state officials, training of those officials, and internal controls over their activities are not adequate.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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