Summary: Pursuant to a legislative requirement, GAO provided information on the Department of Agriculture's (USDA) Rural Development (RD) mission area's progress in improving its credit program cost estimates.
GAO noted that: (1) the task force has made some progress in addressing the deficiencies related to reasonably estimating the cost of RD's credit programs; (2) progress made since GAO's last briefing to the Steering Committee for credit Reform Implementation on December 16, 1999, includes updating sensitivity analyses and completing new cash flow models for the non-housing direct and guaranteed loan programs; (3) however, several milestone dates from the plan were missed because of a shortage in both the staff and funding resources USDA devoted to resolving long-standing credit reform weaknesses; (4) inadequate resources hampered progress in critical areas, such as assessing the quality of the data used to estimate future loan performance and developing a new cash flow model based on available data to estimate the cost of the housing direct loan programs; (5) as a result, RD continues to have limited assurance that credit program costs estimates are reasonable; and (6) while oversight for credit reform implementation efforts falls under the guidance of the USDA Executive Steering Committee for Credit Reform Implementation, the Steering Committee as a whole has had little direct involvement in overseeing progress to improve RD's credit program cost estimates.
