Lanterna Rally

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Published: 2002

Total Pages: 5

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GAO was requested to consider whether to undertake a comprehensive review of the Farm Credit Administration's (FCA) oversight of the safety and soundness of the Farm Credit System (FCS). To decide whether a comprehensive review is required, GAO conducted a limited review of FCA's current oversight program. This correspondence summarizes the objectives, scope, methodology, and conclusions of our limited review. The specific objectives of our limited review were to (1) determine FCA's current safety and soundness policies and processes and (2) review FCA's oversight of selected institutions and their corrective responses to any weaknesses FCA identified. Our scope included analyses of selected examination reports and other oversight materials related to key FCS institutions. These materials included (1) the last three FCA examinations for the three largest FCS banks, which represent about 60 percent of total FCS assets and of the gross loan volume; (2) the last three examinations for the Federal Agricultural Mortgage Corporation; (3) the last two examinations for the Federal Farm Credit Banks Funding Corporation, the FCS fiscal agent; (4) the last three examinations for the Farm Credit Leasing Services Corporation; and (5) the last three examinations of and other materials related to an institution under "special supervision," a category primarily for entities experiencing weaknesses that FCA believes cannot be corrected in the normal course of business.