Government made $9 million in loans to ineligible farmers |

Government made $9 million in loans to ineligible farmers

WASHINGTON – The Agriculture Department loaned $9 million over six years to farmers who shouldn’t have gotten loans, according to an audit released Thursday.The 98 farmers failed to fully repay earlier loans, according to the agency’s inspector general. Congress considers those borrowers ineligible for future loans.Through its Farm Service Agency, the department is a lender of last resort; it loans money to farmers and ranchers who can’t get credit from banks or other lenders. In 2004 alone, the department issued $323 million in loans, the audit said.The farmers got credit because department employees misunderstood the rules and approved some loans by mistake, the audit found.In other cases, debt history was missing from the department’s automated system for tracking loans, or the system wasn’t used, auditors reported.”We conclude that FSA should improve its controls for ensuring that applicants whose previous debts have been forgiven … are judged ineligible,” auditors wrote.In response to the audit, the department said loans worth $1.5 million were actually eligible. Department officials also began collecting the other $7.5 million. The Inspector General agreed with the agency’s response.Department officials also issued new guidelines for employees and is putting finishing touches on a new computer system that will do a better job of tracking debt history.”The integrity of these programs is very important to us,” department spokesman Ed Loyd said. “And we will continue to strengthen the safeguards we have to ensure that these farm loans are made only to those eligible to participate in the farm loan programs.”The audit followed a 1999 report by the inspector general that identified $24.1 million in improper or questionable loans.—On the Net:Agriculture Department Inspector General:, Colorado

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