Federal Crop Insurance Corporation (FCIC)

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Agriculture

RMA administers the Federal Crop Insurance Program which provides crop insurance to farmers and ranchers. Approved Insurance Providers (AIPs) sell and service the policies through a partnership with RMA and share in the risk associated with losses. RMA's review of improper payments provides results data in which the cause of improper payments (i.e., administrative, certification, process errors, etc.) can be identified along with a means of reducing barriers that may prevent payments from being proper.

View on Federal Program Inventory

PROGRAM METRICS

$11,906 M

in FY 2021 outlays, with a

98.6%

payment accuracy rate

PROGRAM METRICS

$11,824 M

in FY 2022 outlays, with a

97.4%

payment accuracy rate

PROGRAM METRICS

$14,027 M

in FY 2023 outlays, with a

97.4%

payment accuracy rate

PROGRAM METRICS

$23,867 M

in FY 2024 outlays, with a

97.6%

payment accuracy rate

PROGRAM METRICS

$22,925 M

in FY 2025 outlays, with a

96.7%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    06/2018 - 07/2019


    Confidence interval:

    >95%


    Margin of error:

    +/-0.069

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $153.34 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $109.88 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $43.46 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $15.13 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $10.63 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $4.5 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$15.13 M

Unknown Payment Details

Evaluation of corrective actions

Risk Management Agency continues to maintain or reduce the amount of improper payments which indicates the actions taken to reduce improper payments is working.

Future payment integrity outlook

Federal Crop Insurance Corporation (FCIC) has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $9,830.12 M
Current year +1 estimated future improper payments $205.5 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.09 %

The program's current year improper payment and unknown payment rate of 1.41 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

Risk Management Agency has achieved a tolerable rate. The agency continuously assesses internal controls, human capital, and information systems to assure a tolerable rate can be maintained.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    06/2019 - 07/2020


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.5

Overpayments

Risk Management Agency considers overpayment inside our control when the data/information needed does exist and can be accessed however, a breakdown in the administrative or procedural processes caused the payment to become improper. Improper payments within the agency’s control result from errors such as inadvertent keying errors, calculation errors, administrative errors, or procedural errors. Reducing overpayments within the agency control can be accomplished by strengthening quality control processes at the Approved Insurance Provider (AIP) level.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $156.29 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $156.29 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $133.15 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $133.15 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $15.21 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $1.57 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $13.64 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$15.21 M

Unknown Payment Details

Evaluation of corrective actions

Failure to access data/information accounted for $169.93M of Risk Management Agency's improper dollars. COVID-19 required Approved Insurance Providers (AIPs) to modify how day to day operations were conducted. These unforeseen modifications presented an opportunity for less effective quality control processes resulting in payments being issued improperly. RMA's corrective action plan to address these types of improper payments includes meeting with AIPs assess their quality control processes they currently have in place. This will be carried out as part of RMA's AIP Performance Reviews. Improper payments resulting from the inability to access data/information address errors made at the time of certification. Improper payments associated with this root cause totaled $134.72M. To address certification errors RMA continually reviews current policy and procedures directly related to areas in which the improper payments have occurred. Strengthening current policy and procedure requirements is a means of improving the effectiveness of the certification process.

Future payment integrity outlook

Federal Crop Insurance Corporation (FCIC) has established a baseline.

Risk Management Agency's (RMA's) reduction target rate is equal to the agency's estimated future improper payment (IP) and unknown payment (UP) rate. RMA's Sampling and Estimation Methodology Plan (S&EMP) has not changed since approved by OMB which allows the agency to use historical data to establish a target rate and a future improper payment rate that are both obtainable, thus equal to each other.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $10,363.42 M
Current year +1 estimated future improper payments $234.24 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.26 %
Current year +1 estimated future improper payment and unknown payment reduction target 2.26 %

The program's current year improper payment and unknown payment rate of 2.58 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

At this time, the agency has the necessary resources to reduce improper payments. This assumes that the program remains at the current size. If the program expands, additional resources may be necessary.

The agency’s most recent budget request includes funding to comply with A-123 and financial statement audit requirements, higher staffing and hiring needs, and migrate and modernize information technology systems. The agency currently has enough resources to reduce improper payments; however, additional resources are necessary to sustain program growth and increasing costs.

Additional programmatic information

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2020 - 06/2021


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.5

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Change Process
    A large amount of RMA's improper payments resulting from the inability to access data/information are situations where policyholders could not support certifications with acceptable production evidence/records. As a result, RMA Compliance worked with the Product Management Branch to update the Apple Crop Policy record requirements in for vertically integrated or direct-marketing perennial producers.
    FY2023 Q3
    Completed
    Audit
    Improper payments resulting from a failure to access data/information are often the result of process and/or administrative type errors (i.e., keying errors, calculation errors, process errors, etc.,) To address these types of errors, RMA Compliance reviewed Approved Insurance Provider's (AIP's) quality control processes as part of the AIP Performance Review (APR) allowing RMA to identify potential vulnerabilities that may lead to improper payments. If vulnerabilities are identified, RMA issues APR outcomes and/or observations in which the AIP must respond with a corrective action and a timeframe for completion.
    FY2023 Q4
    Completed
    Behavioral/Psych Influence
    A majority of the improper payments related to the inability to access data/information were the result of policyholders over-reporting insurable acres on rainfall index plans of insurance. RMA will issue an Informational Memorandum reminding external stakeholders of procedural requirements related to acreage reporting and reiterate the importance of applying these procedures accurately to prevent improper payments.
    FY2024
    Planned
    Audit
    One type of error leading to improper payments for failure to access data/information resulted from policies established under a unit structure that did not meet the qualifications. RMA policy and procedure outlines criteria that must be met in order to qualify for the unit structure being requested. When these qualifications are not met the result is an improper payment. To further assess improper payments associated with unit structure, RMA will conduct a program review in order to determine if Approved Insurance Providers are appropriately applying unit structure requirements.
    FY2024
    Planned

Overpayments

Overpayments within the agency's control are the result of errors that occurred when the data/information needed exited and could be accessed, however, a breakdown in an administrative or procedural process caused the payment to become improper. Due to the nature of these types of errors (i.e., inadvertent keying errors, calculation errors, process errors, etc.) Risk Management Agency has the ability to identify root causes and address deficiencies in the quality control processes at the Approved Insurance Provider (AIP) level resulting in fewer improper payments within our control.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $194.12 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $194.12 M

The Risk Management Agency (RMA) partners with private insurance companies, Approved Insurance Providers (AIPs), to deliver the federal crop insurance program through agents who sell policies directly to producers. The Standard Reinsurance Agreement which is an agreement between RMA and the AIPs restricts agents and AIPs from influencing the premium for a given policy, such as a producer's certification. Overpayments outside the agency's control typically consist of certification errors by the policyholder. These errors include, but are not limited to; inadvertent errors, misinterpretation of policy, calculation errors, or the inability to support certifications when documentation is requested. These types of errors are determined to be outside the agency's control or unavoidable because they take place during certification stages of the crop insurance program.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $167.58 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $167.58 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Affiliation $167.58 M
Overpayments Within Agency Control Affiliation $194.12 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit Audit

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $8.12 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $2.12 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $6.0 M

Eligibility element/information needed Eligibility amount
Affiliation $8.12 M

Mitigation strategies taken Mitigation strategies planned
Audit Audit

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$8.12 M

Unknown Payment Details

Evaluation of corrective actions

RMA's comprehensive analysis of improper payment criteria relates the root cause (i.e., the type of error that led to the improper payment, who was responsible for the improper payment, and at what stage of the crop insurance life cycle the improper payment occurred) of the improper payment directly to the amount of the improper payment. This strategic assessment allows RMA to develop corrective action plans that address the root causes that result in larger amounts of improper payments. A continuous analysis of root causes and implementation of corrective actions that help remediate improper payments has allowed RMA to maintain a tolerable error for multiple years. Federal Crop Insurance is a multi-billion-dollar program. RMA’s ability to maintain a improper payment error rate below three percent for the past nine years indicates the effectiveness of the measures we’ve taken to reduce improper payments.

Future payment integrity outlook

Federal Crop Insurance Corporation (FCIC) has established a baseline.

Risk Management Agency's (RMA's) reduction target rate is equal to the agency's estimated future improper payment (IP) and unknown payment (UP) rate. RMA's Sampling and Estimation Methodology Plan (S&EMP) has not changed since approved by OMB which allows the agency to use historical data to establish a target rate and a future improper payment rate that are both obtainable, thus equal to each other.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $12,841 M
Current year +1 estimated future improper payments $305 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.38 %
Current year +1 estimated future improper payment and unknown payment reduction target 2.38 %

The program's current year improper payment and unknown payment rate of 2.64 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

Risk Management Agency has maintained a tolerable improper payment rate for the past nine years. Due to the size and complexity of the Federal Crop Insurance program the tolerable rate falls above the statutory threshold.

At this time, the agency has the necessary resources to reduce improper payments. This assumes that the program remains at the current size. If the program expands, additional resources may be necessary.

The agency’s most recent budget request includes funding to comply with A-123 and financial statement audit requirements, higher staffing and hiring needs, and migrate and modernize information technology systems. The agency currently has enough resources to reduce improper payments; however, additional resources are necessary to sustain program growth and increasing costs.

Additional programmatic information

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2021 - 06/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.5

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Behavioral/Psych Influence
    A large amount of RMA's improper payments were the result of insured not meeting insurability requirements and inaccurately reporting acreage on Pasture Rangeland Forage policies. As a result, RMA Compliance issued Information Memorandum: COM-23-003 informing Approved Insurance Providers (AIPs) and their agents to remind insureds that acreage must be suitable and grown for the intended use and that verifiable records are required to be maintained to support acreage reported on the acreage report.
    FY2024 Q1
    Completed
    Audit
    Improper payments resulting from a failure to access data/information resulted from policies that were established using a unit structure that did not meet the qualifications. RMA policy and procedure outlines criteria that must be met in order to qualify for the unit structure being requested. When these qualifications are not met the result can be an improper payment. To address these types of errors, RMA Compliance conducted a program review to evaluate documents and determine if insureds met the criteria for the unit structure requested.
    FY2024 Q4
    Completed
    Audit
    To address improper payment associated with the inability to access/data information, RMA will conduct a program assessment of the Spot Check List procedures utilized and corrective actions carried out by the Approved Insurance Providers (AIPs). To execute this audit, RMA’s Northern Regional Compliance Office (NRCO) will obtain documentation used by the AIPs to conduct their reviews and support their determinations. Once obtained, the documentation will be reviewed to verify compliance with Federal Crop Insurance Corporation (FCIC) policy and procedure. The anticipated impact of this corrective action is to ensure that all AIPs are conducting Spot Check List reviews according to procedure. In auditing AIP performance, RMA hopes to reduce potential program vulnerabilities, improper payments, and abuse in the federal crop insurance program. Improper payments associated with the failure to access data/information are often related to errors in which external stakeholders do not follow Federal Crop Insurance Corporation (FCIC) policies and procedures. To address these types of errors RMA’s Southern Regional Compliance Office (SRCO) will be conducting a Cotton Loss Adjustment Program Review. This review will determine if AIPs are following approved FCIC loss adjustment procedures ensuring the accuracy of the indemnities being issued.
    FY2025
    Planned

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M

The Federal Crop Insurance Program is a public-private partnership. USDA's Risk Management Agency (RMA) regulates the program while private companies, Approved Insurance Providers (AIPs), are responsible for the sale and servicing of the policies. RMA's reported overpayments outside the agency's control are the result of external stakeholders not following federal crop insurance policies and procedures or administrative errors that occurred during the crop insurance life cycle.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $573.93 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $107.12 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $466.81 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Affiliation $573.93 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $5.43 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $5.32 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.11 M

Eligibility element/information needed Eligibility amount
Affiliation $5.43 M

Mitigation strategies taken Mitigation strategies planned
Audit, Behavioral/Psych Influence Audit

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$5.43 M

Unknown Payment Details

Evaluation of corrective actions

RMA's comprehensive analysis of improper payment criteria relates the root cause (i.e., the type of error that led to the improper payment, who was responsible for the improper payment, and at what stage of the crop insurance life cycle the improper payment occurred) of the improper payment directly to the amount of the improper payment. This strategic assessment allows RMA to develop corrective action plans that address the root causes that result in larger amounts of improper payments. A continuous analysis of root causes and implementation of corrective actions that help remediate improper payments has allowed RMA to maintain a tolerable error for multiple years. Federal Crop Insurance is a multi-billion-dollar program. RMA’s ability to maintain an improper payment error rate below three percent for ten consecutive years indicates the effectiveness of the measures we’ve taken to reduce improper payments.

RMA’s root cause analysis provides the agency the ability to effectively identify the underlying causes of the improper payments. Corrective actions are tailored to specific types of improper payments identified, whether they stem from procedural errors, inaccurate certification, or administrative deficiencies. Once the root causes have been identified, corrective plans are implemented, monitored, and evaluated. Results are shared with stakeholders to ensure accountability and foster a culture of continuous improvement helping reduce future improper payments.

Upon the completion of RMA’s improper payment review cycle extensive results data is captured and analyzed for the purpose of determining root causes. This analysis affords the agency the ability to evaluate the payment processes in order to pinpoint any procedural gaps or inefficiencies that led to the improper payments. By focusing on these areas, corrective actions developed can effectively mitigate the risk of improper payments recurring in the future.

Corrective actions are effectively implemented by first establishing clear objectives and assigning specific responsibilities to team members. Regular monitoring and feedback meetings ensure that progress is tracked and any obstacles are promptly addressed. RMA’s Payment Integrity Specialist communicates with stakeholders carrying out the plans in order to assure they are prioritized to meet all applicable deadlines. This strategic approach fosters a clear understanding among team members of where to direct efforts, enhancing overall productivity and accountability.

Future payment integrity outlook

Federal Crop Insurance Corporation (FCIC) has established a baseline.

RMA’s reduction target is set greater than the future improper payment rate to proactively address the unprecedented natural disasters that have occurred and the potential impact these events may will have on the Federal Crop Insurance program. The urgency and large number of claims associated with these types of events may often lead to expedited processes which could increases the probability of errors overlooking essential verification steps and maintaining compliance with established standards, thereby affecting overall payment integrity and the ability to meet reduction targets.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $14,877 M
Current year +1 estimated future improper payments $338 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.27 %
Current year +1 estimated future improper payment and unknown payment reduction target 3.0 %

The program's current year improper payment and unknown payment rate of 2.43 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

Risk Management Agency’s tolerable error rate of 3% has been established with consideration to a balance of payment integrity risk controls that assure the agency can accomplish strategic objectives and that do not impede the program’s mission. Due to the size and complexity of the Federal Crop Insurance program the tolerable rate falls above the statutory threshold.

At this time, the agency has the necessary resources to maintain a tolerable improper payment rate. This assumes that the program remains at the current size. If the program expands, additional resources may be necessary.

The agency’s most recent budget request includes funding to comply with A-123 and financial statement audit requirements, higher staffing and hiring needs, and improve programmatic compliance and oversight. The agency currently has enough resources to maintain a tolerable improper payment rate; however, additional resources are necessary to sustain program growth and increasing costs.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

Risk Management Agency's (RMA's) Administrator and Deputy Administrators of Compliance, Product Management, and Insurance Services are held accountable through annual performance plans to establish internal controls that prevent improper payments from being made, maintain internal controls that prevent improper payments from being made, detect improper payments that are made, and recover improper payments. The Farm Production and Conservation (FPAC) Business Center also provides oversight of RMA's internal controls.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2022 - 06/2023


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-2.5

Causes

RMA’s improper payments reported under OMB’s Failure to Access Data/Information category are the result of situations where the data/information needed to make a proper payment existed and could be accessed, however, a breakdown in an administrative or procedural process caused the payment to become improper.

RMA’s improper payments reported to OMB under the category of Inability to Access Data/Information consist, mostly, of errors related to the certification process. Approved Insurance Providers (AIPs), through their agents, collect certifications from their policyholders as required by Federal Crop Insurance policies and procedures. Certification errors include but are not limited to; policyholders certifying inaccurate information or certifications that cannot be supported with required documentation.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M
Amount of overpayments outside the agency's control $358.53 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $168.51 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $190.02 M

Underpayment root cause Underpayment amount
Amount of underpayments $396.5 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $14.16 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $382.34 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $0.0 M

Prevention

For FY2024 RMA’s corrective action plan addressing improper payments reported under OMB’s cause category of Failure to Access Data/Information included a cotton program review to determine if AIPs were following Federal Crop Insurance Corporation loss adjustment procedures related to appraisals. Failure to adhere to these procedures can result in improper payments. To conduct this limited scope review, SRCO requested and verified documentation submitted by the AIPs and Policyholders for compliance with federal crop insurance procedures. Additionally, SRCO conducted field visits in collaboration with AIPs to observe loss adjusters performing re-appraisals on fields where appraisals had recently been completed as part of the claims process. This program review concluded in May of 2025 and resulted in findings being issued to the AIPs.

In April of 2025, RMA completed the program assessment of AIP’s compliance with Spot Check List requirements. The program assessment consisted of six AIPs, drawing on a sample of policies that were not returned to RMA. Of those not returned, the results of this assessment found that the applicable Actual Production History (APH) reviews, Growing Season Inspections (GSIs), and Preharvest Inspections (PHIs) were not performed, or they were performed for the wrong county, year, or policy. These failures can lead to improper payments.

Regarding actions planned: As a result of the RMA’s FY2024 program assessment of the Spot Check List procedures, the agency is implementing a Reconciliation Report, which will be made available to Approved Insurance Providers (AIPs). This report is designed to support AIP compliance with Spot Check List requirements while facilitating timely and accurate reporting of results. Additionally, RMA will incorporate a Spot Check List walkthrough into its AIP Performance Review to verify that AIPs are adhering to the required procedures. Together, these initiatives aim to increase awareness, reinforce procedural compliance, and ultimately contribute to the reduction of improper payments.

Additionally, to address improper payments associated with OMB’s cause categories of Failure to Access Data/Information and Inability to Access Data/Information RMA will conduct a results analysis on a sample of policies that have been reviewed, specifically focusing on instances in which the improper payments occurred as the result of: 1) calculation errors when determining production to count or 2) policyholder’s not being able to support production certifications with acceptable production evidence. The comprehensive analysis will consist of, in part, ascertaining and segregating results data by root cause. Upon completion of this compilation, RMA will implement a targeted mitigation strategy designed to reduce the occurrence of improper payments associated with each root cause category.

RMA conducts a comprehensive analysis of improper payment results on an annual basis. This analysis relates root cause criteria to the associated amount of improper dollars. The analysis first segregates improper payments by OMB root cause categories. Once segregated by root cause category the improper payments are further divided into one of four phases in the crop insurance life cycle (i.e., application, acreage report, actual production history (APH), and claims). From there the improper payments are grouped by error type. This in-depth level of analysis affords RMA the ability to plan corrective actions proportional to the severity of the associated improper payments all while being cognitive of available resources and burdens. These efforts help ensure corrective actions are directly linked to root causes and are carried out successfully with the intent of reducing future improper payments.

For FCIC Corrective Action Plans (CAPs) are developed through a data-driven, collaborative process that begins with the extraction and analysis of review results to identify the root causes of improper payments. Once the root causes are established, RMA engages with regional compliance offices and other divisions within Risk Management Agency to evaluate whether planned or future initiatives will adequately address the root causes identified.
Based on the scope and impact of the root cause, corrective actions may include the initiation of new program reviews, recommending policy or procedure changes, issuing Informational Memorandums, or implementing and carrying out other targeted initiatives. This strategic, coordinated approach ensures that corrective actions are both effective and aligned with broader compliance and program integrity goals.
RMA’s comprehensive analysis of improper payment root cause data enables the development of targeted corrective action plans based on cause category, error types, crop insurance lifecycle stages, crop types, states, insurance plans, and other key variables. From there, corrective action plans are designed to influence or change behavior, update current procedures, disseminate informational memorandums, revise policy language, introduce new policy language or procedures, and leverage data analytics. They are also closely integrated with ongoing internal processes such as the AIP Performance Reviews. This approach, combined with continuous root cause analysis and aligned corrective action efforts from other RMA initiatives has proven to be effective as exhibited in RMA’s ability to consistently report one of the lowest improper payment rates across USDA, all while administering a multi-billion-dollar federal crop insurance program.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit Change Process
Underpayments Audit Change Process

Additional information

Reduction target

3.0 %

At this time, the agency has stretched its human capital and information system resources to maintain a tolerable improper payment rate. However, as the program continues to serve more producers with more complex marketing systems additional resources may be necessary.

For the 2027 FY RMA asked for an increase to fund 2 FTEs that were transferred from the FPAC Business Center. RMA specifically is given the authority, pursuant to 7 U.S.C. § 1508 (a)(10)(D), to impose sanctions, disqualify, or impose a civil fine for failing to comply with any FCIC requirement, which means only RMA employees have the delegated authority to carry out these functions. Initiating and completing the entire sanction process at the Agency level, rather than passing it back and forth for the Business Center to carry out the administrative portions, will allow for a much more effective, streamlined, less disjointed process.

Risk Management Agency's (RMA's) Administrator, Associate Administrators, and Deputy Administrators of Compliance, Product Management, and Insurance Services are held accountable through annual performance plans to establish internal controls that prevent improper payments from being made, maintain internal controls that prevent improper payments from being made, detect improper payments that are made, and recover improper payments. The Farm Production and Conservation (FPAC) Business Center also provides oversight of RMA's internal controls.

$396.5 M