Even as it struggles under current funding levels to stem fraud, violations and mismanagement of programs, the Agriculture Department's Office of Inspector General faces a steep cut in the Obama administration's budget proposal.

Under the Obama plan, the office would be cut 10 percent, the highest proposed reduction out of all the federal agencies' inspector general offices. The $8.7 million cut would necessitate six-week furloughs for all the office's employees and would have a "tremendous impact," said Agriculture Inspector General Phyllis Fong at an appropriations hearing yesterday.

Lawmakers in the House Agriculture, Rural Development, FDA and Related Agencies Appropriations Subcommittee said they were concerned about the potential cuts and errors across USDA's programs that caused losses of millions of dollars in fiscal 2010. The Office of the Inspector General is responsible for auditing the department's programs for instances of fraud and payment errors.

"There's a high degree of frustration here," subcommittee Chairman Jack Kingston (R-Ga.) said.

In fiscal 2010, the office found cases of mismanagement and fraud in recovery act-funded initiatives, food safety measures and USDA's payment programs. All told, the office's audits and investigative work found $184 million that USDA could reclaim and led to 459 convictions, according to Fong.

The Biomass Crop Assistance Program (BCAP) was among those named at yesterday's hearing. Established in the 2008 farm bill, the program provides matching payments for material to be sold to biomass conversion facilities and pays producers to grow renewable biomass crops.

In December, the office concluded that BCAP "suffered from hasty implementation" to comply with a deadline established by a presidential directive. As a result, USDA did not have time to develop a handbook or computer support, and the program was inconsistently applied across state and county offices.

"We found wide-ranging problems with BCAP, including inequitable treatment of program participants and improper payments," Fong said in written testimony.

USDA spent $243 million to implement parts of the program.

Audits in fiscal 2010 also found wide-ranging problems with USDA's largest program, the Supplemental Nutrition Assistance Program, or SNAP. Errors also occurred in housing programs, the Risk Management Agency, the Farm Service Agency and the Food Safety and Inspection Service in its E. coli and salmonella testing. The latter program is in danger of losing $88 million in the House-passed appropriations bill (E&E Daily, March 2).

House appropriators criticized the inspector general, saying these types of problems are recurring and seem to happen more frequently in USDA than in other government departments.

"Your testimony is essentially the same as testimony that was made 20 years ago in this committee," said ranking member Sam Farr (D-Calif.).

Kingston said it signaled to users of USDA programs that they do not have to follow the rules.

However, while the inspector general's office has the authority to audit programs and make recommendations, it cannot force USDA to follow through on those recommendations. Fong acknowledged that that was an issue but said it is not unique to USDA.

"The Inspector General Act very clearly says we cannot run a program, we do not make decisions on funding, we can't fire employees unless they're in our review office," Fong said.

Lawmakers said that was another source of frustration.

"We do like to hear the whistleblowers," Farr said, "but we're frustrated that once you hear it, the agencies aren't playing the role they're supposed to play to effectively remedy the situation."

But Fong said USDA is getting better. The department's Farm Service Agency has begun developing program-specific guidance and is releasing new software and internal forms for the Biomass Crop Assistance Program to satisfy the inspector general's recommendations. The program was reauthorized in October 2010.

The office is also examining the farm bill's conservation programs. For example, it is currently auditing the Natural Resources Conservation Service's oversight of the Farm and Ranch Lands Protection Program in Michigan.

"We believe that progress is being made, although it is slow," Fong conceded.