The parties charged with carrying out the terms of the Pigford II settlement agreement have created numerous internal control measures designed to balance various interests including accuracy, efficiency, and cost. Many of these measures serve to identify and deny fraudulent or otherwise invalid claims. For example, the parties conduct iterative reviews of each claim and identify potential fraud concerns. In addition, the parties told us that they plan to conduct final control measures after all claims are provisionally adjudicated and before payments are made. Those measures include identifying duplicate claims (to ensure no one is paid twice) and claims filed on behalf of the same farming operation (to ensure only one payment per farming operation) or same class member (to ensure only one payment per class member).
In general, the internal control design provides reasonable assurance that fraudulent or otherwise invalid claims could be identified and denied; however, certain weaknesses in the control design could expose the claims process to risk of improper determinations. Some of these weaknesses are a result of constraints imposed by the terms of the settlement agreement, which were agreed to by the parties to the settlement agreement as fair, reasonable, and adequate. In addition, the terms were approved by the presiding judge, effectively ratified by Congress in the Claims Resolution Act of 2010 and in some cases originated in Pigford I and were subsequently enacted in the 2008 Farm Bill. These design weaknesses, hence, cannot be modified by the implementing parties. For example, by the terms of the settlement agreement, most claims must be evaluated based solely on the information submitted by the claimants and, as a result, the adjudicator of these claims has no way of independently verifying that information. Another weakness is within the authority of the implementing parties to modify. Specifically, the Claims Administrator is responsible for determining class membership, including that claimants have not obtained prior judgments on their complaints. The Claims Administrator, however, has not established agreed upon procedures--beyond consulting two other settlement participant lists--for checking whether claimants already obtained judgments in judicial or administrative forums. Without such procedures, some individuals may improperly be found to be class members.
Finally, at the time of our review, the internal control design was generally operating as intended to identify and deny fraudulent or otherwise invalid claims. However, the design has not yet been fully implemented, and we cannot determine whether the remainder of the design will operate as intended.
