WASHINGTON – The U.S. Department of Agriculture distributed $1.1 billion over seven years to estates or companies of deceased farmers and routinely failed to conduct reviews required to ensure payments were properly made, according to a government report.
In a selection of 181 cases from 1999 to 2005, the Government Accountability Office found that officials approved payments without any review 40 percent of the time.
The report cited a farm in Illinois that collected $400,000 on behalf of an owner who lived in Florida before his death in 1995. The company did not notify the government of the death but certified each year that the dead shareholder, who owned 40 percent of the company, was “actively engaged” in managing the farm.
An Indiana corporation that was owned entirely by one person never notified the government of the owner’s death in 1993 and continued to collect unspecified payments for a decade. Another estate continued to receive unspecified payments on behalf of a person who died in 1973 – more than three decades ago – without any investigation or review.
Most estates are allowed to collect farm payments for up to two years after an owner’s death, giving heirs time to restructure their businesses and probate the will. After that, local USDA officials must certify every year that the estate is still farming and has remained open for reasons other than collecting subsidies.
But the GAO report found that the Agriculture Department depends on heirs and businesses to alert the agency to deaths, and fails to use other sources such as Social Security records to confirm eligibility.
The USDA said that payments were not necessarily fraud or abuse and that auditors did not prove any specific cases of cheating. The agency also said any overpayments would amount to less than 1 percent of farm subsidies paid between 1999 and 2005.
Last year, a Washington Post investigation of farm subsidies found more than $15 billion in wasteful or redundant spending in other farm payments, including $1.3 billion to people who do not farm and $817 million to farms that use loopholes to exceed limits.
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