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Published August 05, 2013, 11:23 AM

Millions in subsidies go to deceased farmers

The federal government pays millions of dollars in farm subsidies each year to farmers who have died, because the U.S. Department of Agriculture lacks the proper controls to make sure the money it sends is going to the right people, a government audit has found.

By: Ron Nixon, New York Times News Service

WASHINGTON — The federal government pays millions of dollars in farm subsidies each year to farmers who have died, because the U.S. Department of Agriculture lacks the proper controls to make sure the money it sends is going to the right people, a government audit has found.

The Natural Resources Conservation Service, which oversees USDA’s conservation programs, sent out $10.6 million in payments from 2008 to 2012 to more than 1,000 people who had been dead for more than a year, according to the report. The Government Accountability Office, the investigative arm of Congress, says the problem involved several agencies within the department.

The Risk Management Agency, which administers the crop insurance program, paid $22 million to more than 3,400 policyholders who had been dead for at least two years. The GAO says some of those payments might have been made while the farmer was still alive, but that there was no way to know for sure.

The findings were released as the House and the Senate prepared to meet to work out their differences on a farm bill that would greatly expand some subsidies, such as crop insurance. The report raises questions about the ability of USDA to monitor the programs for waste, fraud and abuse.

USDA generally agrees with the findings in the report, but says it disagrees with the characterization that it did not have sufficient controls in place to detect improper payments.

Still, the department acknowledges that its controls to identify deceased individuals could be applied more effectively.

Controls questioned

Controls over crop insurance, in particular, have been questioned after government investigators found a huge fraud ring last year in North Carolina that for decades siphoned more than $100 million from the program. The fraud ring involved insurance agents, adjusters, farmers and dozens of others.

Environmental activists say the report pointed to the need for changes in agriculture subsidy programs.

“Not only are unlimited crop insurance subsidies flowing to the largest and most successful farm businesses, they are now going to deceased policyholders,” says Scott Faber, vice president of the Environmental Working Group, a Washington research organization, which has been critical of farm subsidies. “This irresponsible use of scarce taxpayer dollars reinforces just how broken the system is.”

The GAO says USDA had had some success in finding improper payments. The department identified payments to nearly 173,000 deceased individuals from 1999 to 2005, the report says. USDA recovered about $1 billion in improper payments.

Still, the GAO says more could be done. The auditors suggest that USDA use the Social Security Administration’s Death Master File to identify payments made to dead individuals. The GAO says the agencies used an incomplete version of the data that did not include all deaths.

Unless the agencies begin using the full Death Master File, they “cannot know if they are providing payments to, or subsidies on behalf of, deceased individuals; how often they are providing such payments or subsidies; or in what amounts,” the report says.

USDA said in May that the Risk Management Agency had begun using a new computer program that compared the full Social Security death data against crop insurance payments.

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