Summary

Pursuant to a congressional request, GAO reviewed the: (1) Farmers Home Administration's (FmHA) use of Coordinated Financial Statements (CFS); (2) FmHA county supervisors' and borrowing farmers' views on CFS complexity and usefulness; (3) impact on loan applications; and (4) adequacy of FmHA county supervisor and farmer training instructional booklets.

GAO found that: (1) FmHA selected CFS to replace the Farm and Home Plan (F&HP) which it used to gather financial and production data for operating loans; (2) the complete financial position of a borrower or loan applicant was not readily apparent with F&HP; and (3) CFS would result in sounder loans, lower delinquencies, and more creditworthy applicants for commercial loans. GAO found that: (1) most supervisors said that CFS were more effective in monitoring farmer performance and helping to improve farmer efficiency, but 80 percent of the farmers said that CFS were difficult to prepare; and (2) CFS were more complex and required over twice the amount of time spent with each farmer preparing the F&HP.