type: other

jurisdiction: US

text: b" U.S. Department of Agriculture\n Office of Inspector General\n Great Plains Region\n\n\n\n\n Audit Report\n\n\n Farm Service Agency\n Hurricane Relief Initiatives:\nEmergency Forestry Conservation\n Reserve Program\n\n\n\n\n Report No. 03601-24-KC\n September 2008\n\x0c UNITED STATES DEPARTMENT OF AGRICULTURE\n OFFICE OF INSPECTOR GENERAL\n\n Washington, D.C. 20250\n\n\n\n\nDATE: September 17, 2008\n\nREPLY TO\nATTN OF: 03601-24-KC\n\nTO: Teresa C. Lasseter\n Administrator\n Farm Service Agency\n\nATTN: T. Mike McCann\n Director\n Operations Review and Analysis Staff\n\nFROM: Robert W. Young /s/\n Assistant Inspector General\n for Audit\n\nSUBJECT: Emergency Forestry Conservation Reserve Program\n\n\nThis report presents the results of our review of the Farm Service Agency\xe2\x80\x99s controls over\nthe Hurricane Relief Initiatives: Emergency Forestry Conservation Reserve Program.\nYour response to the official draft, dated September 2, 2008, is included as exhibit C.\nExcerpts of your response and the Office of Inspector General\xe2\x80\x99s position are incorporated\ninto the Findings and Recommendations section of the report. Based on your response,\nwe were able to reach management decision on all of the report\xe2\x80\x99s six recommendations.\nPlease follow your agency\xe2\x80\x99s internal procedures in forwarding documentation for final\naction to the Office of the Chief Financial Officer.\n\nWe appreciate the courtesies and cooperation extended to us by members of your staff\nduring this audit.\n\x0cExecutive Summary\nFarm Service Agency Hurricane Relief Initiatives: Emergency Forestry Conservation\nReserve Program (Audit Report 03601-24-KC)\n\nResults in Brief Following hurricanes Dennis, Katrina, Ophelia, Rita, and Wilma in 2005, the\n U.S. Department of Agriculture\xe2\x80\x99s Farm Service Agency (FSA) carried out an\n emergency pilot program to restore and enhance private non-industrial\n forestland damaged as a result of the hurricanes. This program, known as the\n Emergency Forestry Conservation Reserve Program (EFCRP), allocated\n $504.1 million to help such producers in Alabama, Florida, Louisiana,\n Mississippi, North Carolina, and Texas. In exchange for cost-share assistance\n as well as either a lump sum payment or annual rental payments, EFCRP\n participants agree to place their land under contract for 10 years. The Office\n of Inspector General (OIG) initiated this audit to assess FSA\xe2\x80\x99s\n implementation and administration of EFCRP. Specifically, we performed\n this review to evaluate the effectiveness of program delivery and the\n adequacy of its management controls over the selection and funding of offers 1\n and the eligibility of producers and land. We also planned to assess\n compliance with contract provisions, but we conducted our review during\n signup, and the contracts were not yet completed. Also, FSA had not\n implemented its procedures for reviewing compliance.\n\n In January 2007, 1,440 offers consisting of 180,176 acres had been accepted\n into the EFCRP. The contracts associated with these offers represent about\n $53 million to be paid in annual rental payments. Of the 1,440 accepted\n offers, we reviewed 55 offers with payments to be made, totaling about $2.6\n million. These offers and acres were located in Alabama, Mississippi, and\n Texas.\n\n While evaluating the effectiveness of FSA\xe2\x80\x99s program delivery, we found that\n it did not correctly and consistently determine EFCRP eligibility. At the time\n of our site visits, payments had not yet been made. Our review of 55 offers\n identified potential overpayments of $814,430 for 11 offers. (Of the $814,430\n potential overpayments that we identified, FSA corrected payments by\n $655,520 during our fieldwork.) Unclear procedures and terminology led to\n incorrect or questionable determinations on 4 of these 11, totaling $129,540\n of the potential overpayments found. On one of these four offers, we found\n the applicants were two entities whose five members owned part of a sawmill\n and were allowed to enroll their land in EFCRP even though program\n guidelines do not permit owners principally engaged in the primary\n processing of raw wood products to participate. Because the guidelines do not\n specify what it means to be principally engaged in the primary processing of\n\n1\n Producers will offer entire tracts of forestland for participation in EFCRP. Foresters will then evaluate the offered property, and FSA will select the best\noffers for development of both a conservation plan and contract.\nUSDA/OIG-A/03601-24-KC Page i\n\x0c raw wood products, and because each member owned 25 percent or less of\n the sawmill, FSA approved $86,080 in payments to these applicants. 2 Under\n the same guidelines, the same entities were determined not eligible for the\n program when they applied for EFCRP on a tract of land located in another\n State.\n\n In other cases, State officials processed offers differently than their\n counterparts in other States. For example, Alabama, Mississippi, and Texas\n State forestry agency officials, whom FSA relied on for technical assistance,\n used different methods to calculate the value of damaged trees. Each method\n resulted in different loss percentages. FSA procedures did not specify a\n method for calculating the value of damaged trees. Therefore, eligibility\n determinations for individual offers were processed differently, based on the\n location of the producer\xe2\x80\x99s land. We also concluded that another aspect of the\n State forestry agencies\xe2\x80\x99 methodology resulted in overestimation of damage\n from eligible hurricanes. Rather than using the best evidence available to\n determine the value losses of individual producers, State forestry agency\n personnel assigned 100 percent damage to offered acres that had been\n clear-cut prior to their evaluation. This methodology would have affected the\n rankings if the agency had used the Benefits Index 3 to rank the offers, because\n producers with 100 percent damage would receive more points within the\n Benefits Index than someone with less damage. We also found that some\n Benefits Index terminology was not defined clearly enough to ensure\n consistent treatment of offers. Although FSA did not need to use the Benefits\n Index for EFCRP, it has relied on it for prior programs and it will continue to\n be used in the future.\n\n To meet legislatively prescribed program deadlines, the agency worked\n swiftly to implement EFCRP. However, FSA did not require second party or\n supervisory reviews for this program, which would likely have exposed errors\n or irregularities found on seven ($684,890 of the $814,690) offers.\n\n At the time contracts were signed in December 2006, final conservation plans\n had not been drafted for all contracts as required by program guidelines.\n Consequently, in August and September 2007, we followed up and reviewed\n six final conservation plans which showed the practices required to restore\n the economic value of the forest land. We also confirmed with FSA\n Mississippi State officials that all required plans were customized to the land\n offered. Therefore, we are not recommending additional corrective actions.\n\n The audit was conducted in conjunction with the President\xe2\x80\x99s Council on\n Integrity and Efficiency (PCIE) as part of its examination of the Federal\n\n2\n Corporations whose stocks are publicly traded or owners or lessees principally engaged in the primary processing of raw wood products are excluded\nfrom EFCRP.\n3\n FSA will select producers for enrollment using the Benefits Index to rank offers by assigning points, based on the offered land\xe2\x80\x99s potential contribution to\npreventing soil erosion, improving water quality, enhancing wildlife habitat, and mitigating economic losses caused by the 2005 hurricanes.\nUSDA/OIG-A/03601-24-KC Page ii\n\x0c Government\xe2\x80\x99s relief efforts in the aftermath of Hurricanes Katrina and Rita.\n As such, a copy of this report will be forwarded to the PCIE Homeland\n Security Working Group, which is coordinating Inspector General reviews of\n this important subject.\n\nRecommendations\nIn Brief For future EFCRP signups, FSA should clarify guidelines and terminology\n currently subject to interpretation by the agency\xe2\x80\x99s State and county\n employees and State forestry agency personnel. Additionally, FSA should\n require second party reviews or supervisory reviews to ensure offers are\n eligible before accepting EFCRP contracts. Finally, FSA should review all\n questionable EFCRP offers not corrected as a result of our review, and\n determine and take appropriate corrective action.\n\nFSA Response FSA agreed with the recommendations in the report. We have incorporated\n FSA\xe2\x80\x99s response into the Findings and Recommendations section of the report.\n The response to the draft report, dated September 2, 2008, is included as\n exhibit C.\n\nOIG Position Based on FSA\xe2\x80\x99s response, we accept management decision on all six of the\n report\xe2\x80\x99s recommendations.\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page iii\n\x0cAbbreviations Used in This Report\n\n\n2005 Hurricanes 2005 Hurricanes Katrina, Ophelia, Rita, Dennis, and Wilma\n2006 Act 2006 Emergency Appropriations Act\nCCC Commodity Credit Corporation\nCRP Conservation Reserve Program\nEFCRP Emergency Forestry Conservation Reserve Program\nFSA Farm Service Agency\nOIG Office of Inspector General\nPCIE President\xe2\x80\x99s Council on Integrity and Efficiency\nUSDA Department of Agriculture\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page iv\n\x0cTable of Contents\n\nExecutive Summary .................................................................................................................................i\n\nAbbreviations Used in This Report ......................................................................................................iv\n\nBackground and Objectives ................................................................................................................... 1\n\nFindings and Recommendations............................................................................................................ 3\n\n Section 1 Eligibility Determinations ......................................................................................... 3\n\n Finding 1 FSA EFCRP Procedures for Eligibility Were Unclear .................................... 3\n Recommendation 1 ........................................................................................ 10\n Recommendation 2 ........................................................................................ 11\n Recommendation 3 ........................................................................................ 12\n Recommendation 4 ........................................................................................ 12\n Finding 2 Administrative Controls over Eligibility........................................................ 13\n Recommendation 5 ........................................................................................ 15\n Recommendation 6 ........................................................................................ 16\n\nScope and Methodology........................................................................................................................ 17\n\nExhibit A \xe2\x80\x93 Summary of Monetary Results ....................................................................................... 19\nExhibit B \xe2\x80\x93 Summary of Errors .......................................................................................................... 20\nExhibit C \xe2\x80\x93 Agency Response .............................................................................................................. 21\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page v\n\x0cBackground and Objectives\nBackground As part of the Department of Agriculture (USDA), the Farm Service Agency\n (FSA) assists producers whose land has been damaged by natural disasters,\n such as hurricanes. In addition, FSA helps protect America\xe2\x80\x99s natural resources\n through a variety of conservation programs, including the Conservation\n Reserve Program (CRP). CRP provides annual rental payments and cost-share\n assistance to landowners or operators 4 who establish approved conservation\n practices that reduce erosion, improve water quality, and increase wildlife\n populations.\n\n In 2005, Hurricanes Katrina, Ophelia, Rita, Dennis, and Wilma\n (2005 hurricanes) struck the Atlantic and Gulf Coast regions of the United\n States. Initial estimates showed that the 2005 hurricanes damaged more than\n 4 million acres of timber in Alabama, Florida, Louisiana, Mississippi, and\n Texas. In response, the Emergency Forestry Conservation Reserve Program\n (EFCRP) was enacted on December 30, 2005, under the \xe2\x80\x9c2006 Emergency\n Appropriations Act\xe2\x80\x9d (2006 Act). 5 Generally, the 2006 Act amended the \xe2\x80\x9cFood\n Security Act of 1985\xe2\x80\x9d 6 to authorize EFCRP to enroll certain private\n non-industrial forestland that experienced a loss of 35 percent or more of\n merchantable timber in the States suffering forestry damage directly related to\n the 2005 hurricanes. This emphasis on forestland timber is in contrast to the\n broader CRP which targets certain cropland and marginal pastureland for\n restoration and enhancement.\n\n EFCRP was allocated $504.1 million to help producers begin the process of\n restoring and enhancing their forestland damaged by the hurricanes. 7 When\n evaluating land for EFCRP, FSA was to rank the land based on potential\n contribution to preventing soil erosion, improving water quality, enhancing\n wildlife habitat, and mitigating economic losses caused by the 2005\n hurricanes.\n\n EFCRP provided funds to 261 counties in Alabama, Florida, Louisiana,\n Mississippi, North Carolina, and Texas that the President or Secretary\n designated as hurricane disaster counties. 8 In order to receive assistance\n through EFCRP, producers must own or operate private non-industrial\n forestland that experienced a loss of 35 percent or more of merchantable\n timber as a direct result of the 2005 hurricanes. Merchantable timber is defined\n in the 2006 Act as timber on private non-industrial forestland on which the\n4\n Operators must have controlled the land for 12 months prior to signup and must control the property for the entire contract period, according to FSA\nHandbook 2-CRP (Revision 4), subparagraph 82 C, dated July 17, 2006.\n5\n Division B of Public Law 109-148.\n6\n Public Law 99-198.\n7\n The 2006 Act appropriated $404.1 million for EFCRP, with an additional $100 million authorized June 15, 2006, under the \xe2\x80\x9cEmergency Agricultural\nDisaster Assistance Act of 2006\xe2\x80\x9d (Title III of Public Law 109-234).\n8\n North Carolina was included in the program because it had Secretarial or Presidential declared disaster counties due to Hurricane Ophelia; however, there\nwere no applications for this program in North Carolina.\nUSDA/OIG-A/03601-24-KC Page 1\n\x0c average tree has a trunk diameter of at least 6 inches when measured at least\n 4\xc2\xbd feet above the ground.\n\n EFCRP sign-up began at local FSA offices on July 17, 2006, and ended on\n October 20, 2006. Producers submitted offers to enroll forestland damaged by\n the 2005 hurricanes in EFCRP. FSA contracted with State forestry agencies\n who performed site visits to offered tracts. 9 On each tract, the forester\n evaluated the environmental benefits that might be obtained through\n enrollment in EFCRP and performed an evaluation of the timber stand by\n selecting random plots and determining the timber values before and after the\n hurricanes. 10 Timber values prior to the hurricane were generally determined\n by assuming all trees were undamaged, and post hurricane values were\n generally determined by subtracting the estimated value of remaining\n undamaged trees from the estimated value prior to the hurricanes. State\n foresters also determined whether land offered contained merchantable timber\n and whether it was private non-industrial forestland.\n\n After foresters completed their evaluations, FSA had planned to select eligible\n offers for enrollment based on a Benefits Index to be used in ranking offers.\n The Benefits Index assigned points which reflected potential contributions to\n preventing soil erosion, improving water quality, enhancing wildlife habitat,\n and mitigating economic losses caused by the 2005 hurricanes. During three\n designated ranking periods, FSA was to use the Benefits Index to rank and\n determine acceptable offers. However, FSA did not have to use the Benefits\n Index rankings to select properties for EFCRP, because the program had\n sufficient funds for FSA to accept all eligible offers.\n\n Producers who agree to enroll their acreage in EFCRP receive two types of\n payments. They receive up to 50 percent cost-share assistance for activities\n like preparing sites and replanting tree stands. In addition, they may choose to\n receive either 10 years of annual rental payments or one lump sum rental\n payment in return for meeting the requirements of their conservation plan. A\n conservation plan, which State foresters develop with input from producers, is\n a mandatory component of the 10-year EFCRP contract. The plan may include\n requirements to restore land through site preparation and the planting of tree\n species similar to those that existed on the land prior to the hurricane.\n\n As of January 10, 2007, 1,440 offers on 180,176 acres had been accepted into\n the program. These contracts represent about $53 million in total annual rental\n payments.\n\nObjectives We performed the review to evaluate the effectiveness of program delivery\n and the adequacy of FSA\xe2\x80\x99s management controls related to the selection and\n funding of offers and the eligibility of producers and land.\n9\n The U.S. Forest Service coordinated the process the State forestry agencies used to evaluate the offered land.\n10\n The evaluation included the identification of water sources, the presence of or potential for erosion, and potential benefits to wildlife.\nUSDA/OIG-A/03601-24-KC Page 2\n\x0cFindings and Recommendations\nSection 1 Eligibility Determinations\n\n As part of the initiative to mitigate the economic losses suffered by producers\n in hurricane damaged areas, FSA implemented EFCRP. However, we found\n eligibility was not always correctly and consistently determined. Of the\n 55 EFCRP offers reviewed, we found that FSA county officials and State\n forestry agencies made incorrect or questionable determinations on the\n eligibility of land or producers associated with 11 offers (20 percent).\n\n \xe2\x80\xa2 Four of these incorrect or questionable determinations occurred because\n the agency\xe2\x80\x99s procedures did not provide clear eligibility guidelines.\n \xe2\x80\xa2 Seven other incorrect or questionable determinations occurred because\n FSA did not implement adequate controls, such as second party or\n supervisory reviews, over eligibility determinations.\n\n FSA considered offers acceptable even though producers or land associated\n with these offers did not meet eligibility requirements. 11 Without corrective\n action by agency personnel as the result of our fieldwork, producers associated\n with the 11 offers would have been overpaid a total of $814,430 (see exhibit\n A). (Of the $814,430 potential overpayments that we identified, FSA took\n corrective actions to reduce payments by $655,520 while we were performing\n fieldwork.)\n\n EFCRP signup began July 17, 2006, on which date FSA also published its\n amended CRP procedures to provide instructions for EFCRP. 12 EFCRP signup\n ended on October 20, 2006, and FSA personnel were charged with processing\n EFCRP offers timely to meet the legislated program deadline of\n December 31, 2006. Basic program eligibility was based on whether producers\n with private non-industrial forestland had at least a 35 percent loss in value of\n merchantable timber due to an eligible hurricane.\n\n\nFinding 1 FSA EFCRP Procedures for Eligibility Were Unclear\n\n We found that four offers with incorrect or questionable eligibility\n determinations occurred, in part, due to ambiguity in FSA\xe2\x80\x99s procedures for\n administering the program. We identified $129,540 of incorrect or\n questionable payments that occurred due to these ambiguities.\n\n\n11\n At the time of our review, four offers included some ineligible acres (see Producers A, C, H, K for specific explanations); four offers were ineligible as\noffered (see Producers E, F, G, I for specific explanations); the eligibility of one producer was questionable (Producer D), and the foresters determined two\noffers did not have 35 percent damage when they re-evaluated the tract after OIG\xe2\x80\x99s field visits (Producers B, J). See exhibit B.\n12\n See FSA Handbook 2-CRP (Rev. 4), \xe2\x80\x9cAgricultural Conservation Program,\xe2\x80\x9d Part 6, Section 5, added by Amendment 8, dated July 17, 2006.\nUSDA/OIG-A/03601-24-KC Page 3\n\x0c Controls Were Not Adequate to Preclude the Enrollment of Land Clear-cut\n Before the Qualifying Hurricanes\n\n We found three offers that were considered eligible even though all or part of\n the offered acres had been clear-cut 13 prior to the qualifying hurricanes (see\n Producers A, B, and C in exhibit B). Eligible land is defined, in part, as land\n on a tract that, before the hurricane, was merchantable timber with an average\n tree diameter of at least 6 inches at 4\xc2\xbd feet above ground level; FSA\xe2\x80\x99s\n procedures do not require county officials to verify with producers if and when\n acreage has been clear-cut. FSA national office officials stated that since a\n producer\xe2\x80\x99s signature on the EFCRP offer is a certification that \xe2\x80\x9cthe land to be\n enrolled in EFCRP . . . suffered damage due to a calendar year\n 2005 hurricane,\xe2\x80\x9d they believed it unnecessary to verify whether the acreage\n had been clear-cut before the hurricane. They stated, however, that they would\n be willing to instruct the county office staff to ask producers if and when land\n was clear-cut. 14 As a result of errors on these three offers, FSA county offices\n would have issued incorrect payments totaling $43,460.\n\n FSA\xe2\x80\x99s procedures for determining loss value provide an example stating that\n all acres clear-cut just prior to the hurricanes are ineligible. The procedures\n include the following example of determining loss relative to clear-cut\n acreage: if a producer with 100 acres of private non-industrial forestland\n clear-cut 48 of the 100 acres 1 month before the hurricane hit, only the\n 52 remaining acres would be eligible for EFCRP. The clear-cut 48 acres would\n be ineligible. 15 If personnel are to properly make these determinations, they\n must be provided information on when land has been clear-cut, but the\n procedures for EFCRP do not require that they obtain this information from\n producers.\n\n Twenty-three (23) of the 55 offers in our sample included areas for which the\n State foresters had determined post-hurricane economic values of zero,\n indicating to us that the areas may have been clear-cut. Through EFCRP file\n reviews and interviews with the producers, foresters, and others as deemed\n necessary, we confirmed that in each of these 23 cases the areas with\n post-hurricane economic values of zero had, in fact, been clear-cut. In each\n case, we also determined when the areas had been clear-cut. Upon further\n review of the 23 EFCRP offers with clear-cut areas, we found that FSA had\n accepted 3 EFCRP offers on areas that were clear-cut prior to the eligible\n hurricanes. In these three cases, neither State foresters nor FSA county\n officials determined if and when offered acres had been clear-cut, and thus\n made incorrect eligibility determinations.\n\n\n13\n Clear-cutting is a harvesting and regeneration method which removes all the trees (regardless of size) on an area. Clear-cutting is most used with species\nlike pine which require full sunlight to reproduce and grow well. Clear-cutting produces an even-aged forest stand.\n14\n Computer software for the current EFCRP program has been modified to prompt the user to enter the participant\xe2\x80\x99s response to a pre-hurricane timber\nvalue eligibility statement.\n15\n According to FSA Handbook 2-CRP (Rev. 4), subparagraph 150.6 C, \xe2\x80\x9cExamples of Determining Total Loss,\xe2\x80\x9d Example 3, dated July 17, 2006.\nUSDA/OIG-A/03601-24-KC Page 4\n\x0c In Mississippi, we found one producer had clear-cut a total of 172.6 acres on\n two tracts, 16 including 88 acres clear-cut before the hurricane. However, State\n foresters and FSA county officials who processed the offers for both tracts\n treated all acres as eligible. For one tract with 77.1 eligible acres, 54.1 acres\n were clear-cut prior to the hurricane. Therefore, these 54.1 acres should not be\n included in the total eligible acreage. As a result, the remaining 23 acres of\n forestland on the tract no longer met the minimal 35 percent damage threshold\n for the tract. For the second tract, 33.9 of the 95.5 eligible acres were clear-cut\n before the hurricane and, therefore, were ineligible for the program. The\n remaining 61.6 acres had damage in excess of the required 35 percent and\n were eligible. OIG photo 1 shows part of the 54.1 acres that were clear-cut\n prior to the hurricane.\n\n\n\n\n OIG Photo 1\n\n In Texas, the officials processing one offer were unaware that some acres had\n been clear-cut prior to the qualifying hurricane and thus treated all acres as\n eligible. On our field visit, we questioned the timing of the harvest of some\n acres. Upon our request, the forester contacted the producer and determined\n that 32 of 97 acres had been clear-cut prior to the hurricane.\n\n When we brought these three errors to the attention of FSA officials, they\n immediately took steps to reduce the acreages accordingly and thus prevented\n incorrect payments totaling $43,460. When questioned, producers for these\n offers readily stated that portions of the offered acres had been clear-cut prior\n to the hurricanes.\n\n\n16\n Total acres for the two tracts was 320 acres.\nUSDA/OIG-A/03601-24-KC Page 5\n\x0c We concluded that FSA should strengthen its procedures to require county\n officials to ascertain the amount and timeframe of any acreage that has been\n clear-cut. FSA has since modified its computer software for the current\n EFCRP program to prompt the user to enter the participant\xe2\x80\x99s response to a\n pre-hurricane timber value eligibility statement.\n\n We also noted that, in developing its Benefits Index ranking system for\n EFCRP, FSA did not establish a consistent method for scoring clear-cut tracts.\n When the anticipated number of applicants for the 2005 hurricane season did\n not materialize, FSA had sufficient funds to approve all eligible EFCRP offers,\n and the use of a ranking system to distribute program funds was unnecessary.\n However, we determined that if the Benefits Index ranking system had been\n used as designed, it would not have been adequate to ensure that all producers\n were treated consistently because State forestry agencies established a policy\n that areas clear-cut by the producer after the hurricanes were considered\n 100 percent damaged. As a result, the post hurricane value of timber stands\n was underestimated; thus, the estimated value loss may have been overstated\n for offers/producers with clear-cut areas.\n\n Specifically, FSA determined the value lost as a result of the hurricanes by\n subtracting the post-hurricane values from the pre-hurricane values. Both of\n these values were determined by the State foresters through field visits and\n inspections of the affected tracts. We noted that 23 of our 55 sample offers had\n some area of clear-cut timber. We cannot determine the total amount of\n overstatement; however, State forestry agency personnel\xe2\x80\x99s policy of assigning\n 100 percent damage to clear-cut areas potentially understates the\n post-hurricane value. OIG photo 2 shows an example of a clear-cut area that\n was determined to be a 100 percent loss. The trees behind the clear-cut area do\n not appear to be damaged.\n\n\n\n\n OIG Photo 2\nUSDA/OIG-A/03601-24-KC Page 6\n\x0c We attempted to more accurately determine the post-hurricane value for the\n clear-cut tracts through 1) interviews of producers to obtain timber sales data\n for the offered tracts, 2) interviews of timber salvage crews, and 3) analysis of\n timber cruise documents and receipts. 17 We were able to obtain additional data\n for 9 of the 23 tracts and determined that 1 of those 9 may not have had the\n 35 percent damage required for eligibility, 7 tracts may have received points in\n the Benefits Index scoring process they were not entitled to, and 1 tract,\n despite overstated damages, may have received a proper score. These tracts\n may not have qualified for EFCRP if FSA had relied on the Benefits Index to\n determine program eligibility as it has regularly done in past programs and\n likely will again for future programs.\n\n In order to improve the consistency with which FSA implements its EFCRP\n procedures, it should require applicants to identify the location and timing of\n clear-cut areas that are offered for the program.\n\n Definition of Owners/Operators Principally Engaged in the Primary\n Processing of Raw Wood Products Needs To Be Clarified To Ensure\n Consistent Application.\n\n We found that applicants who may have been engaged in the primary\n processing of raw wood products were determined to be ineligible for EFCRP\n in one State but were determined eligible in another. Regulations and FSA\xe2\x80\x99s\n EFCRP procedures related to eligibility state that corporations whose stocks\n are publicly traded, or owners or lessees who are principally engaged in the\n primary processing of raw wood products, are excluded from the definition of\n private non-industrial forest landowner for EFCRP purposes. 18 However,\n EFCRP guidelines do not clearly define what it means to be a producer\n principally engaged in the primary processing of raw wood products. As a\n result, the county office approved questionable payments of $86,080 on a\n sample tract in Alabama (see Producer D in exhibit B).\n\n Without a clear definition of what it means to be principally engaged in the\n primary processing of raw wood products, officials were left to interpret this\n language as they saw fit, and we found applicants determined eligible in one\n State were determined ineligible in another. For example, in Alabama, five\n cousins applied for EFCRP as two separate entities (one entity is owned by\n three siblings, and the other entity is owned by their two cousins); each entity\n had 50 percent ownership of the tract offered for EFCRP. The five cousins\n jointly owned a sawmill (corporation); not one of the cousins had more than\n 25 percent ownership share of the sawmill. With the assistance of Alabama\n Forestry Commission officials, FSA county officials decided that, unless an\n applicant owned more than 50 percent of a sawmill, the applicant was not\n principally engaged in the primary processing of raw wood products. As none\n17\n Timber cruising is the determination of timber volume and value (timber quality) for a tract of timber.\n18\n Title 7, Code of Federal Regulations, sections 1410.2 and 1410.12, and FSA Handbook 2-CRP (Rev. 4), subparagraph 150.1 C, dated July 17, 2006.\nUSDA/OIG-A/03601-24-KC Page 7\n\x0c of the applicants owned more than 50 percent of a sawmill, FSA county\n officials determined both entities were eligible for EFCRP.\n\n This sample tract was one of five tracts owned by the cousins and enrolled in\n EFCRP in Alabama. These producers are to receive total payments of\n $110,280 on the other four tracts in Alabama that were not included in our\n sample. An Escambia County FSA official told us that the cousins also owned\n land in Florida. We interviewed the Florida FSA officials for the county where\n the cousins owned land and found that these cousins offered their land for\n EFCRP in Florida. However, Florida Division of Forestry determined the land\n was not private non-industrial forestland, so Florida FSA county officials\n could not offer a contract for the program because the land did not meet the\n eligibility requirements for EFCRP. The producers appealed this decision to\n the National Appeals Division and were awaiting a decision at the time we\n concluded our fieldwork in Alabama.\n\n We discussed this issue with FSA national office officials during the audit.\n They agreed that the determinations between States need to be consistent and\n were working with the State offices and State forestry agencies to achieve that\n end. They also indicated that determining private non-industrial forestland\n under the current rules can be very subjective and, in this case, is compounded\n by the lack of specific guidance used to determine who is principally engaged\n in the primary processing of raw wood products.\n\n In order to improve the consistency with which FSA implements its EFCRP\n procedures and to clarify similar situations, the agency should revise its\n procedures to include a precise definition of owners/operators principally\n engaged in the primary processing of raw wood products.\n\n FSA Needs to Clarify Its Procedures for Calculating the Values of Damaged\n Trees\n\n As part of determining the eligibility of EFCRP offers, State forestry agency\n personnel were required to calculate the value of trees that were damaged and\n undamaged on the producers\xe2\x80\x99 property. We found, however, that State forestry\n agency personnel in Alabama, Mississippi, and Texas used different methods\n for calculating the values of damaged and undamaged trees. This occurred\n because FSA\xe2\x80\x99s EFCRP procedures do not provide a methodology for arriving\n at these values. Without a defined methodology, FSA cannot ensure the\n consistent treatment of producers, regardless of the locations of their land for\n this or future EFCRPs.\n\n FSA\xe2\x80\x99s EFCRP procedures require that State foresters determine the percent of\n loss for an offer, based on the difference between the pre-hurricane and\n post-hurricane values of trees using the spring 2006 Timber Mart-South\n\nUSDA/OIG-A/03601-24-KC Page 8\n\x0c prices. 19 The procedures, however, do not provide specific methodology for\n determining these values.\n\n Although the States used consistent timber prices, Alabama, Mississippi, and\n Texas State forestry agency officials each used different methodologies for\n determining the value of damaged and undamaged trees:\n\n \xe2\x80\xa2 Alabama Forestry Commission officials calculated undamaged value\n using tree species, diameter, and estimated height, and then calculated a\n damaged value based strictly on the diameter and estimated height of the\n damaged trees, regardless of species. 20 Diameters of trees were measured\n in 2-inch increments. 21\n\n \xe2\x80\xa2 Mississippi Forestry Commission officials assigned a value to damaged\n and undamaged trees based on tree species, estimated height, and\n diameter. Diameters of trees were measured in 1-inch increments.\n\n \xe2\x80\xa2 Texas Forest Service officials recorded tree species and diameter of both\n damaged and undamaged trees and then used a database of average tree\n heights to calculate each tree\xe2\x80\x99s value. Diameters of trees were measured\n in 1-inch increments.\n\n Application of these different methods for calculating the value of damaged\n trees may result in different loss percentages for the same producer. For\n example, we recalculated loss percentages for all 25 tracts in our Mississippi\n sample using both Alabama\xe2\x80\x99s and Texas\xe2\x80\x99 methods for determining the value of\n damaged trees. Using Texas\xe2\x80\x99 method, 7 of 25 tracts had loss percentages that\n differed by greater than 5 percent. Using Alabama\xe2\x80\x99s method, 3 of 25 tracts had\n loss percentages that differed by greater than 5 percent.\n\n The U.S. Forest Service coordinator for EFCRP stated that he did not believe\n that small differences in methodology would have a significant effect on\n eligibility, so he did not specify a valuation method for all States to use.\n However, we found that in one case the difference in loss percentage would\n have affected the producer\xe2\x80\x99s eligibility. Specifically, Mississippi State forestry\n officials determined that one producer suffered a 42 percent loss. The producer\n was eligible for annual rental payments because the loss exceeded EFCRP\xe2\x80\x99s\n 35 percent minimum. Had the producer\xe2\x80\x99s land been located in Alabama,\n however, his loss percentage would have been calculated to be 26 percent, and\n his offer would have been determined ineligible.\n\n FSA should decide upon a specific methodology to determine the value of\n damaged trees and clarify its EFCRP procedures accordingly. Doing so will\n\n19\n FSA Handbook 2-CRP (Rev. 4), subparagraphs 150.6 A and C, dated July 17, 2006.\n20\n One county in Alabama assigned value to individual trees based on the tree species, estimated height, and diameter.\n21\n If a tree had a measured diameter of 7.0-8.9 inches, forestry personnel would record it as 8 inches in diameter.\nUSDA/OIG-A/03601-24-KC Page 9\n\x0c improve the consistency with which FSA implements EFCRP for future\n disasters and better ensure equitable treatment of producers by the different\n States.\n\n We conclude that in order to correctly and consistently determine the\n eligibility of EFCRP offers, FSA should clarify relevant terminology and\n procedures.\n\nRecommendation 1\n\n Issue policies and procedures that require applicants to identify the location\n and timing of clear-cut areas that are offered for the program; provide States\n with a precise definition related to owners or lessees principally engaged in the\n primary processing of raw wood products; and establish a consistent method\n for using species, diameter, and height to arrive at tree value.\n\n FSA Response\n\n \xe2\x80\x9cA CRP Notice is scheduled to be issued by November 1, 2008, to clarify FSA\n policies and procedures regarding acres offered for EFCRP that have been\n clear-cut, the definition of owners or lessees principally engaged in the\n primary processing of raw wood products, and the method to be used by\n technical service providers to arrive at tree value.\n\n Regarding the clear-cut issue, we also conducted a conference call on\n August 2, 2007, to clarify issues of EFCRP policy, including the identification\n of clear-cut acres. We instructed State FSA office conservation program\n specialists to notify county FSA office personnel to work with EFCRP\n applicants and identify the location and timing of clear-cuts as part of the offer\n process.\n\n To ensure producer understanding, we further instructed county offices to\n manually enter the statement \xe2\x80\x9cProducer certifies forester\xe2\x80\x99s assessment of\n pre-storm value accurately accounts for clear-cutting/thinning activities,\xe2\x80\x9d on\n the form CRP-2F worksheet before the producer signs block 22 of the\n CRP-2F. When applicants sign the CRP-2F, they are indicating the acreage\n was merchantable timber and private, non-industrial forestland at the time of\n the hurricane, signing the CRP-2F is binding and falsely reporting information\n may jeopardize program benefits.\n\n Concerning the definition related to processing of raw wood products.\n Regulations at 7 CFR part 1410.2 exclude corporations whose stocks are\n publicly traded or owners or lessees principally engaged in the primary\n processing of raw wood products from the definition of private non-industrial\n landowners. We have begun negotiation with the Forest Service and the\n Natural Resources Conservation Service to further define producers\nUSDA/OIG-A/03601-24-KC Page 10\n\x0c principally engaged in the primary processing of raw wood products. We\n anticipate this to be completed and a notice issued by November 1, 2008.\n\n With respect to a consistent method to arrive at tree value, we convened a\n meeting of State FSA office, Forest Service, and State forestry agency\n personnel from the five States participating in EFCRP on\n September 26-27, 2007, in Jackson, Mississippi. The purpose of the meeting\n was to improve the effectiveness of EFCRP program delivery including the\n development of a consistent method for using species, diameter and height to\n arrive at tree value. All parties agreed to use one, consistent methodology.\n Representative plots (plot radius of 26.33 feet) were agreed to be taken and the\n number of trees tallied by species and degree of damage (undamaged pine,\n damaged pine, undamaged hardwood, and damaged hardwood) and diameter\n at breast height (4.5 feet above ground). Local volume tables (which consider\n height in their calculations) are consulted to derive timber damage volume\n estimates. Timber Mart South figures are then used to determine lost value.\xe2\x80\x9d\n\n OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\nRecommendation 2\n\n Coordinate with State forestry agencies to establish clear procedures for\n calculating the value of damaged trees.\n\n FSA Response\n\n \xe2\x80\x9cDuring the September 2007 meeting, there was an agreement to use one\n consistent method to calculate economic loss. Following the meeting, the\n Mississippi Forestry Commission developed standardized emergency forestry\n programs field tally sheets and eligibility determination protocols. The\n Mississippi Forestry Commission procedures were reviewed and agreed upon\n by FSA, Forest Service, and State forestry agencies from the five participating\n states.\xe2\x80\x9d\n\n FSA also included these tally sheets and protocols plus other CRP information\n in the documentation provided in exhibit C.\n\n OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 11\n\x0cRecommendation 3\n\n Clarify the Benefits Index ranking system to provide a method for more\n accurately determining value of clear-cut acreage.\n\n FSA Response\n\n \xe2\x80\x9cWe intend to issue a CRP Notice by November 1, 2008, instructing FSA\n State and county offices to work with State forestry agency personnel to more\n accurately determine economic value loss on clear-cut acreage.\n\n Damage exhibited by forest trees from hurricanes will vary widely depending\n upon the distance from the track of the storm and changes from straight line\n wind effects to microburst and localized tornadoes. However, aerial\n photography, satellite imagery, and adjoining forest stand damage can often be\n used to determine stand damage. FSA offices will be instructed to use all\n available documentation and other evidence to validate claims of 100 percent\n loss of timber stand value due to qualifying storm events.\xe2\x80\x9d\n\n OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\nRecommendation 4\n\n Review the offer for the case presented in this report (Producer D) that was not\n corrected during the audit. (See exhibit A.) Determine and take appropriate\n corrective action.\n\n FSA Response\n\n \xe2\x80\x9cIn October 2007, the Deputy Director, National Appeals Division (NAD)\n reversed a hearing officer's determination issued on May 16, 2007. In the\n determination, the Hearing Officer upheld an FSA denial of nine EFCRP\n applications (each for a different tract of land). FSA found that the land\n Appellants offered did not meet the private non-industrial land eligibility\n requirement. The Deputy Director of NAD concluded that FSA's adverse\n decision was not consistent with the applicable laws and regulations and was\n not supported by substantial evidence of record. The NAD Deputy Director\n stated that Appellants' ownership of shares in a private, industrial forest\n landowner corporation did not automatically make them ineligible for EFCRP\n where they meet the private, non-industrial forestland criteria for establishing\n eligibility. The NAD Deputy Director concluded that the Appellants were\n private, non-industrial landowners and the land they offered eligible for the\n EFCRP. This action established consistent treatment of Producer D in both\n Alabama and Florida.\xe2\x80\x9d\nUSDA/OIG-A/03601-24-KC Page 12\n\x0c OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\n\nFinding 2 Administrative Controls over Eligibility\n\n We found that the eligibility of seven offers was not determined in accordance\n with provided procedure. This occurred because FSA county offices did not\n use second party or supervisory reviews to check for errors on EFCRP offers.\n Errors on these seven EFCRP offers would have resulted in FSA issuing\n $684,890 in incorrect annual payments.\n\n We discuss each of these seven errors, individually, below:\n\n \xe2\x80\xa2 For three offers in Alabama and Texas (Producers E, F, and G - see\n exhibit B), we found that producers did not include all private\n non-industrial forestland of merchantable timber on the offered tracts.\n This occurred because FSA county officials were not aware that all\n private non-industrial forestland of merchantable timber must be\n included in order for the applicant to be eligible, even though the\n procedure specifically requires all acres be included. 22 When we brought\n this problem to their attention, FSA county officials corrected the acres\n offered to include all eligible tract acres. Since some of the producers\n may have intentionally not included all lands on the tracts, the FSA\n county officials agreed that the producers would have been ineligible for\n the entire $508,400 in program payments. 23 This error could have been\n corrected if a second party review required matching eligible acres to\n offered acres. The FSA national office issued a memo reiterating that a\n producer must offer all private non-industrial forestland on his/her tract.\n\n \xe2\x80\xa2 For one offer in Texas (Producer H \xe2\x80\x93 see exhibit B), FSA county\n officials incorrectly identified 8.8 acres of non-forestland as\n merchantable timber. Eligible land must be merchantable timber with a\n diameter of at least 6 inches at 4\xc2\xbd feet above the ground. 24 Both the\n Texas Forest Service officials and FSA county office personnel had\n different total tract acres for this offer. After our review, FSA county\n officials and Texas Forest Service officials agreed that the original offer\n was overstated by 8.8 acres. This overstatement could have been\n identified and corrected by FSA through reconciliation of acres. The\n error also could have been identified by noting that the State forester did\n not list a 7-acre pond as non-merchantable timber, even though it\n22\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.6 C, \xe2\x80\x9cExamples of Determining Total Loss,\xe2\x80\x9d Example 2, dated July 17, 2006.\n23\n Subsequent to our audit, FSA revised procedure to allow for partial tracts to be offered (procedure dated July 11, 2007).\n24\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.1 C, dated July 17, 2006.\nUSDA/OIG-A/03601-24-KC Page 13\n\x0c appeared on the FSA map. Had it not been corrected, this error would\n have resulted in a total of $2,460 in incorrect payments.\n\n \xe2\x80\xa2 For another offer in Texas (Producer I \xe2\x80\x93 see exhibit B), FSA county\n officials improperly accepted as eligible a tract evaluated by a private\n forester. This occurred because FSA county personnel did not question\n the decision of the Texas Forest Service officials to use the eligibility\n determination of the private forester. EFCRP procedures state that a\n State forester will determine percent of loss. 25 FSA national office\n personnel agreed with our interpretation and issued a notice on\n October 20, 2006, clarifying private foresters are allowed to make\n recommendations, but State foresters are prohibited from using private\n forester recommendations as the sole source of evaluation. 26 Before\n receiving the private forester evaluation of the tract in question, the\n Texas Forest Service had calculated before and after values that\n indicated less than 35 percent damage and determined that the tract was\n ineligible. However, based on the recommendation from the Texas\n Forest Service, FSA county officials used the private forester\xe2\x80\x99s\n calculations in order to judge the producer eligible. As a result of their\n error, FSA incorrectly approved $72,830 in total rental payments to this\n producer. This error was not corrected at the time of our field visits.\n\n \xe2\x80\xa2 In Alabama, a State forester incorrectly determined the damage on\n Producer J\xe2\x80\x99s tract (see exhibit B). This occurred as the State forester\n erroneously evaluated timber outside the boundaries of the applicant\xe2\x80\x99s\n offered tract. EFCRP regulations state that the State forester will do an\n onsite visit for each tract and evaluate the type of tree, quantity of tree,\n and quality of tree. 27 Based on the forester\xe2\x80\x99s evaluation, FSA determined\n that the land had 77 percent damage and was eligible. We questioned\n whether the tract had the required damage during our field visit.\n Alabama Forestry Commission officials re-evaluated the tract and\n determined there was only 30.77 percent damage. This tract was,\n therefore, ineligible. Had it not been corrected, this error would have\n resulted in a total of $9,350 in incorrect payments.\n\n \xe2\x80\xa2 For another offer in Alabama, the FSA county office entered an incorrect\n number of eligible acres for Producer K (see exhibit B). EFCRP\n procedures state that for land to be eligible, it must have contained\n merchantable timber with a diameter of 6 inches at 4\xc2\xbd feet above the\n ground before the hurricane. 28 Although Alabama Forestry Commission\n officials designated only 73 acres on the 240 acre tract as merchantable,\n the FSA county office inadvertently entered the entire 240 acres as\n25\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.3 A, step 6, dated July 17, 2006.\n26\n October 20, 2006, memorandum from the FSA (national office) CRP Program Manager to the Alabama, Florida, Louisiana, Mississippi, and Texas FSA\nState Executive Directors.\n27\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.6 B, dated July 17, 2006.\n28\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.1 C, dated July 17, 2006.\nUSDA/OIG-A/03601-24-KC Page 14\n\x0c merchantable. This error might have been identified through second\n party review, but the EFCRP portion of the CRP handbook did not\n specifically require a second-party review. Had it not been corrected, this\n error would have resulted in a total of $91,850 in incorrect payments.\n\n At the time of our review, FSA had not conducted any other internal reviews.\n We concluded that these errors could have been identified if FSA required its\n county offices to conduct second party or supervisory reviews of EFCRP\n offers. During our site visits, FSA corrected six of these seven errors. FSA\n should review the seventh offer (where officials based eligibility solely on the\n evaluation of a private forester) and determine whether to take corrective\n action on that offer.\n\n Texas State FSA Officials Incorrectly Established a 10-acre Eligibility\n Minimum\n\n We also noted that Texas State FSA officials incorrectly established a 10-acre\n eligibility minimum, which meant that an indeterminable number of Texas\n producers may have been incorrectly excluded from the program. FSA\n procedures state that that no minimum acreage is authorized for eligibility. 29\n Texas State FSA officials and Texas Forest Service officials stated that\n contractors in Texas will not accept work on tracts less than 10 acres, so they\n felt they were justified in making the restriction. We could not determine\n exactly how many Texas producers may have been excluded from the\n program, because no record was kept of inquiries made from individuals with\n less than 10 acres. One Texas FSA county office official stated that the county\n office had received inquiries from people with less than 10 acres, but the\n producers were told the county office was not accepting offers for less than\n 10 acres. When we informed the FSA national office about the restriction, it\n issued a memo to the State offices identifying the conflict and stating that the\n 10-acre minimum should be withdrawn. The memo is dated the same day as\n the final day of sign-up. Alabama and Mississippi State FSA officials followed\n procedure and allowed tracts with less than 10 acres to be enrolled in EFCRP.\n In those States, a total of 26 producers with fewer than 10 acres are to receive\n $60,220 in total rental payments. Had these producers\xe2\x80\x99 lands been located in\n Texas, the FSA State office would have excluded them from the program.\n\nRecommendation 5\n\n Require second party and/or supervisory reviews by the county office before\n EFCRP contracts are finalized.\n\n\n\n\n29\n FSA Handbook 2-CRP (Rev. 4), subparagraph 150.1 C, dated July 17, 2006, \xe2\x80\x9cNo minimum acreage size is authorized for EFCRP.\xe2\x80\x9d\nUSDA/OIG-A/03601-24-KC Page 15\n\x0c FSA Response\n\n \xe2\x80\x9cWe intend to issue a CRP Notice by November 1, 2008, requiring\n supervisory review of EFCRP offers before contracts are finalized. During the\n September, 2007, meeting, State forestry agencies were instructed by the\n Forest Service to provide comments in technical service provider section of\n CRP-2F alerting FSA county office and supervisory review personnel to any\n irregularities with producers offer.\xe2\x80\x9d\n\n OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\nRecommendation 6\n\n Review the offer for the case in the report (Producer I) that was not corrected\n during the audit. (See exhibit A.) Determine and take appropriate corrective\n action.\n\n FSA Response\n\n \xe2\x80\x9cThe FSA Texas State Office has been instructed to work with the Texas\n Forest Service to ensure that the data and calculations used to complete the\n CRP-2F worksheet in the subject case are performed by the Texas Forest\n Service.\n\n Based on the determinations made by the Texas Forest service, FSA intends to\n take appropriate corrective action by December 15, 2008.\xe2\x80\x9d\n\n OIG Position\n\n We accept FSA\xe2\x80\x99s management decision.\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 16\n\x0cScope and Methodology\n Our review assessed the controls established by FSA to implement and\n administer EFCRP. We performed fieldwork from September 2006 through\n September 2007. Our review was conducted at the FSA national office in\n Washington, D.C., as well as State and county offices in Alabama,\n Mississippi, and Texas.\n\n We judgmentally selected Alabama, Mississippi, and Texas for review\n because producers in these States offered the most acres for EFCRP\n participation. Within each State, we visited a sample of judgmentally selected\n counties based on offer volume: Escambia, Mobile, and Monroe Counties in\n Alabama; Marion, Pike, and Walthall Counties in Mississippi; and Hardin\n County in Texas. Due to the unavailability of Texas Forest Service\n representatives, we were only able to visit one county in Texas.\n\n We reviewed 55 offers (19 judgmental, 36 random) for $2,578,580 of\n $53,337,952 on 1,440 accepted offers located in all 6 EFCRP States. 30 Of\n those 55 sample offers, 3 for $37,200 were eventually denied or withdrawn\n from the offer process.\n\n In conducting our review, we performed the following steps:\n\n \xe2\x80\xa2 Reviewed laws, regulations, procedures, and program documents to verify\n and evaluate program implementation.\n\n \xe2\x80\xa2 Interviewed agency personnel responsible for the administration of EFCRP\n operations at the national, State, and field office levels (which included\n Federal and State forestry personnel). We also interviewed landowners and\n timber salvage crews concerning clear-cut land.\n\n \xe2\x80\xa2 Reviewed five randomly selected offers and three to five judgmentally\n selected offers in each sampled county, along with their supporting\n documentation. 31 We generally limited our judgmental selections to offers\n recommended by the county office, offers with potential conflicts (county\n office staff, county committee members, etc.), offers with a large number\n of offered acres, offers with new producers, or offers with potential\n conflicting Federal cost-share contracts.\n\n \xe2\x80\xa2 Performed field visits to the land on selected offers to verify State forester\n determinations.\n\n30\n Note there were no offers in North Carolina, even though the State was eligible for the program.\n31\n In two counties, due to the limited number of offers, we reviewed all offers.\nUSDA/OIG-A/03601-24-KC Page 17\n\x0c \xe2\x80\xa2 Reviewed six final conservation plans (two each from the three selected\n counties in Mississippi) to verify the plans were customized to the land\n offered. We also contacted the Mississippi State office to confirm that final\n conservation plans were completed for the entire State.\n\n We conducted this performance audit in accordance with generally accepted\n government auditing standards. Those standards require that we plan and\n perform the audit to obtain sufficient, appropriate evidence to provide a\n reasonable basis for our findings and conclusions based on our audit\n objectives. We believe that the evidence obtained provides a reasonable basis\n for our findings and conclusions based on our audit objectives.\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 18\n\x0cExhibit A \xe2\x80\x93 Summary of Monetary Results\n Exhibit A \xe2\x80\x93 Page 1 of 1\n\n\n Finding Description\n Recommendation Amount Category\n Number (See also Exhibit B)\n Offers Included Acreage Clear-cut Funds to be put to Better Use:\n 1 Not Applicable 32 Before the Hurricane(s) - Producers A, B, $43,460 Management or Operating\n and C Improvement/Savings\n Participant Did Not Meet Definition of\n Private Non-industrial Forestland Owner Questioned Costs \xe2\x80\x93 Recovery\n 1 4 $86,080\n ($86,080) - Producer D Recommended\n\n Texas Forest Service Accepted Private\n Forester Determination of Damage Questioned Costs \xe2\x80\x93 Recovery\n 2 6 $72,830\n ($72,830) - Producer I Recommended\n\n \xe2\x80\xa2 Offers Did Not Include All Private\n Non-industrial Forestland on\n Tract(s) ($508,400) - Producers E, F,\n and G\n \xe2\x80\xa2 Offer Included Land Other Than\n Private Non-industrial Forestland\n ($2,460) \xe2\x80\x93 Producer H\n Funds to be put to Better Use:\n 2 Not Applicable32 \xe2\x80\xa2 Offer\xe2\x80\x99s Qualifying Percentage Loss $612,060 Management or Operating\n of Merchantable Timber was Improvement/Savings\n Miscalculated by Alabama Forestry\n Commission Forester ($9,350)\n - Producer J\n \xe2\x80\xa2 Offer Included Forestland Without\n Merchantable Timber ($91,850)\n - Producer K\n\n Total $814,430\n\n\n\n\n32\n There is no audit recommendation corresponding to this monetary amount, because, during the audit, FSA corrected the offer/contract to preclude\nissuance of incorrect payments. No further corrective action is needed.\nUSDA/OIG-A/03601-24-KC Page 19\n\x0cExhibit B \xe2\x80\x93 Summary of Errors\n Exhibit B \xe2\x80\x93 Page 1 of 1\n\n Original Incorrect\n County, Payment Payment\n Error Type Producer Detail of Error\n State Amount (over Amount (over\n 10 years) 33 10 years) 34\n Marion Clear-cut acres before hurricanes \xe2\x80\x93\n A $29,610 $10,510\n County, MS some acres are not eligible\n Marion Clear-cut before hurricanes \xe2\x80\x93 offer\n Procedures B $23,900 $23,900\n County, MS determined ineligible\nwere not clear\n Hardin Clear-cut acres before hurricanes \xe2\x80\x93\n C $27,050 $9,050\n County, TX some acres not eligible\n Escambia Producer owns sawmill \xe2\x80\x93 producer\n D $86,080 $86,080\n County, AL eligibility questionable\n Subtotal $129,540\n Mobile Did not offer all acres \xe2\x80\x93 offer not\n E $1,260 $1,260\n County, AL eligible as offered\n Mobile Did not offer all acres \xe2\x80\x93 offer not\n F $7,140 $7,140\n County, AL eligible as offered\n Hardin Did not offer all acres \xe2\x80\x93 offer not\n G $500,000 $500,000\n County, TX eligible as offered\nAdministrative Hardin Ineligible acres coded as eligible \xe2\x80\x93\n H $115,300 $2,460\n Errors County, TX some acres not eligible\n Texas Forest Service accepted private\n Hardin\n I forester determination of damage\xe2\x80\x93 $56,000 35 $72,830\n County, TX\n offer not eligible\n Escambia Incorrect percent of damage \xe2\x80\x93 offer\n J $9,350 $9,350\n County, AL determined ineligible\n Escambia Incorrect eligible acres entered by\n K $132,000 $91,850\n County, AL FSA \xe2\x80\x93 some acres not eligible\n Subtotal $684,890\n Grand Totals $987,690 $814,430\n\n\n\n\n33\n These figures represent the projected contract amounts of the applications at the time of our review.\n34\n These figures represent the ineligible amounts prior to corrective action by county office personnel.\n35\n At the time of our review, this producer had not offered all eligible acres making his projected payment $56,000. The county office corrected the offered\nacreage amount, making his projected payment $72,830.\nUSDA/OIG-A/03601-24-KC Page 20\n\x0cExhibit C \xe2\x80\x93 Agency Response\n Exhibit C \xe2\x80\x93 Page 1 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 21\n\x0c Exhibit C \xe2\x80\x93 Page 2 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 22\n\x0c Exhibit C \xe2\x80\x93 Page 3 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 23\n\x0c Exhibit C \xe2\x80\x93 Page 4 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 24\n\x0c Exhibit C \xe2\x80\x93 Page 5 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 25\n\x0c Exhibit C \xe2\x80\x93 Page 6 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 26\n\x0c Exhibit C \xe2\x80\x93 Page 7 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 27\n\x0c Exhibit C \xe2\x80\x93 Page 8 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 28\n\x0c Exhibit C \xe2\x80\x93 Page 9 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 29\n\x0c Exhibit C \xe2\x80\x93 Page 10 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 30\n\x0c Exhibit C \xe2\x80\x93 Page 11 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 31\n\x0c Exhibit C \xe2\x80\x93 Page 12 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 32\n\x0c Exhibit C \xe2\x80\x93 Page 13 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 33\n\x0c Exhibit C \xe2\x80\x93 Page 14 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 34\n\x0c Exhibit C \xe2\x80\x93 Page 15 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 35\n\x0c Exhibit C \xe2\x80\x93 Page 16 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 36\n\x0c Exhibit C \xe2\x80\x93 Page 17 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 37\n\x0c Exhibit C \xe2\x80\x93 Page 18 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 38\n\x0c Exhibit C \xe2\x80\x93 Page 19 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 39\n\x0c Exhibit C \xe2\x80\x93 Page 20 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 40\n\x0c Exhibit C \xe2\x80\x93 Page 21 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 41\n\x0c Exhibit C \xe2\x80\x93 Page 22 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 42\n\x0c Exhibit C \xe2\x80\x93 Page 23 of 23\n\n\n\n\nUSDA/OIG-A/03601-24-KC Page 43\n\x0cInformational copies of this report have been distributed to:\n\nAdministrator, FSA\n Attn: Agency Liaison Officer (3)\nGovernment Accountability Office (1)\nOffice of Management and Budget (1)\nOffice of the Chief Financial Officer\n Director, Planning and Accountability Division (1)\n\x0c"


text:
I 9/00 13.12.2001
 I 9/00 Vr
 Richter Walser; Gerichtsschreiberin Hofer
 P.________, 1945, Beschwerdeführer, vertreten durch den Verband A.________,
 A.- Der 1945 geborene P.________ war seit 1. Februar 1978 in der B.________ AG als Verzinker tätig. Seit Juli 1991 litt er an einer therapieresistenten radikulären Kompression C8 rechts, welche auf eine sequestrierte Hernie C7/Th1 zurückzuführen war. Aus diesem Grunde wurde am 10. Oktober 1991 in der Neurochirurgischen Klinik des Spitals X.________ eine Diskusherniektomie C7/Th1 vorgenommen.
 Nach einer internen Versetzung nahm der Versicherte die Erwerbstätigkeit am 1. April 1992 zu 50 % wieder auf, wobei er nunmehr als Drahtabteiler arbeitete. Ab 1. Juni 1992 war er 100 % und ab 1. Februar 1993 50 % arbeitsunfähig; ab 5. September 1993 arbeitete er voll.
 Am 9. September 1992 meldete sich P.________ erstmals bei der Invalidenversicherung zum Leistungsbezug an. Die Invalidenversicherungs-Kommission holte nebst Auskünften der Arbeitgeberfirma vom 24. September 1992 die Stellungnahmen des Dr. med. M.________ vom 5. Oktober 1992,
 14. Januar, 29. Juni und 6. September 1993 ein. Zudem zog sie die Berichte des Dr. med. H.________ von der Neurochirurgischen Klinik des Spitals X.________, den Bericht der Rheuma- und Rehabilitations-Klinik Y.________ vom 5. März 1992 und den Röntgenbefund des Schweizer Paraplegiker-Zentrums Nottwil vom 18. September 1991 bei. Ferner liess sie die Regionalstelle die beruflichen Eingliederungsmöglichkeiten abklären, welche am 9. März 1993 und am 10. August 1993 Bericht erstattete. Am 16. März 1993 ersuchte sie Dr. med. H.________ um Stellungnahme zur Arbeitsfähigkeit.
 Mit Verfügung vom 16. Februar 1994 lehnte die Ausgleichskasse der Aargauischen Industrie- und Handelskammer das Leistungsbegehren ab.
 Auf den 13. Juli 1994 kündigte die Arbeitgeberin das Arbeitsverhältnis. Seither geht P.________ keiner Erwerbstätigkeit mehr nach. Am 13. August 1996 meldete er sich erneut zum Leistungsbezug an. Die IV-Stelle des Kantons Aargau trat auf das Begehren ein, holte den Bericht des Dr. med. M.________ vom 16. September 1996 ein und ordnete eine medizinische Abklärung in der Neurochirurgie des Spitals X.________ an (Bericht des Dr. med. C.________ vom 28. Januar 1997 und ergänzende Stellungnahme vom 16. September 1997). Zudem klärte sie die beruflichen Möglichkeiten ab (Bericht vom 9. Juli 1997). Nach Durchführung des Vorbescheidverfahrens sprach sie P.________ mit Verfügung vom 18. August 1998 ab 1. Oktober 1995 aufgrund eines Invaliditätsgrades von 62 % eine halbe Invalidenrente zu.
 B.- P.________ liess Beschwerde erheben mit dem Antrag, es sei ihm eine ganze Invalidenrente zuzusprechen.
 Die IV-Stelle beantragte in ihrer Vernehmlassung die Aufhebung der angefochtenen Verfügung, eventualiter die Beschwerdeabweisung, da seit Erlass der rentenablehnenden Verfügung vom 16. Februar 1994 keine wesentliche Veränderung des Gesundheitszustandes eingetreten sei, sondern nur eine unterschiedliche Beurteilung der Auswirkungen auf die Arbeits- und Erwerbsfähigkeit vorliege und die Verfügung vom 18. August 1998 auch nicht mit der substituierten Begründung der Wiedererwägung geschützt werden könne. Mit Entscheid vom 16. November 1999 hob das Versicherungsgericht des Kantons Aargau die Rentenverfügung vom 18. August 1998 auf, nachdem es von der ärztlichen Leitung der Neurochirurgischen Klinik des Spitals X.________ einen Bericht zu den unterschiedlichen Arbeitsfähigkeitsbeurteilungen bezüglich einer leichten Tätigkeit eingeholt (Bericht des Dr. med. C.________ vom 21. April 1999), dem Versicherten am 8. Juni 1999 eine Abänderung der Verfügung vom 18. August 1998 zu seinen Ungunsten in Aussicht gestellt und ihm eine Frist zur Stellungnahme oder zum Beschwerderückzug angesetzt und von den Berichten des prakt.
 Arztes G.________ vom 4. September 1999 und des Dr. med.
 U.________, Aarau, vom 29. September 1999 Kenntnis genommen hatte. Zur Begründung führte es aus, die Verfügung vom 16. Februar 1994 erweise sich nicht als qualifiziert unrichtig, weshalb für deren revisions- oder wiedererwägungsweise Abänderung keine Grundlage bestehe; auch vermöchten die nachgereichten medizinischen Beurteilungen keine Verschlimmerung des Gesundheitszustandes zu begründen.
 C.- Mit Verwaltungsgerichtsbeschwerde lässt P.________ das bei der Vorinstanz gestellte Begehren erneuern. Zur Begründung bringt er im Wesentlichen vor, seit der ersten rentenabweisenden Verfügung sei infolge Zunahme der bereits bestehenden Beschwerden sowie neu diagnostizierter Krankheitsbilder eine Verschlechterung des Gesundheitszustandes eingetreten, welche eine Arbeitsunfähigkeit von mindestens 50 % zur Folge habe. Die Verfügung vom 18. August 1998 sei insofern zu korrigieren, als der Invaliditätsbemessung falsche Einkommenszahlen zugrunde lägen. Zur Bekräftigung seiner Ausführungen reicht er die ergänzenden Stellungnahmen des Dr. med. U.________ vom 8. Dezember 1999 und des prakt.
 Arztes G.________ vom 12. Dezember 1999 ein.
 Das Bundesamt für Sozialversicherung und die IV-Stelle verzichten auf eine Vernehmlassung.
 1.- Zunächst stellt sich die Frage, ob das Rentengesuch des Beschwerdeführers vom August 1996 als Neuanmeldung oder als Begehren um Wiedererwägung einer früheren, zweifellos unrichtigen Verfügung zu betrachten ist.
 a) Wurde eine Rente wegen eines zu geringen Invaliditätsgrades verweigert, so wird eine neue Anmeldung nach Art. 87 Abs. 4 IVV nur geprüft, wenn die Voraussetzungen gemäss Abs. 3 erfüllt sind. Danach ist im Gesuch glaubhaft zu machen, dass sich der Grad der Invalidität in einer für den Anspruch erheblichen Weise geändert hat. Mit Art. 87 Abs. 4 IVV soll verhindert werden, dass sich die Verwaltung nach vorangegangener rechtskräftiger Leistungsverweigerung immer wieder mit gleich lautenden und nicht näher begründeten, d.h. keine Veränderung des Sachverhalts darlegenden Gesuchen befassen muss (BGE 125 V 412 Erw. 2b, 117 V 200 Erw. 4b mit Hinweisen).
 Die IV-Stelle ist auf das Rentengesuch eingetreten, hat in der Folge verschiedene Abklärungen vorgenommen und dem Beschwerdeführer eine halbe Invalidenrente zugesprochen.
 War eine Rente wegen eines zu geringen Invaliditätsgrades verweigert worden und ist die Verwaltung auf eine Neuanmeldung eingetreten (Art. 87 Abs. 4 IVV), so ist im Beschwerdeverfahren nur noch zu prüfen, ob im Sinne von Art. 41 IVG eine für den Rentenanspruch relevante Änderung des Invaliditätsgrades eingetreten ist (BGE 117 V 198 Erw. 3a mit Hinweis).
 b) Im vorinstanzlichen Verfahren vertrat die IV-Stelle die Auffassung, der Beschwerdeführer leide seit 1991 an Zervikobrachialgie und Lumboischialgie rechts bei Zustand nach Diskushernienoperation im Oktober 1991; seit der Abweisungsverfügung vom 16. Februar 1994 sei keine wesentliche Veränderung des Gesundheitszustandes eingetreten. Die Beurteilung von Dr. med. C.________ vom 28. Januar 1997 einer lediglich 50 %igen Arbeitsfähigkeit für leichtere Tätigkeiten stelle gegenüber der der ursprünglichen Verfügung zugrunde gelegten Arbeitsfähigkeit von 100 % eine unterschiedliche Würdigung eines an sich gleich gebliebenen Sachverhaltes dar, was keinen Revisionsgrund darstelle. Die im Rahmen von Art. 87 Abs. 4 IVV zugesprochene halbe Rente mit Wirkung ab Oktober 1995 sei daher zu Unrecht erfolgt.
 c) Die Ärzte des Spitals X.________ diagnostizierten am 21. Oktober 1991 eine Diskushernie C7 mit zervikalem radikulärem Syndrom C8 rechts. Dr. med. M.________ führte am 16. September 1996 unter Hinweis auf die geklagten Schmerzen aus, der Gesundheitszustand habe sich eher verschlechtert.
 Bei der Untersuchung ergab sich dann jedoch keine wesentliche Verschlechterung gegenüber der letzten Beurteilung. Im Bericht vom 28. Januar 1997 stelle Dr. med.
 C.________ die Diagnose einer Zervikobrachialgie und Lumboischialgie rechts bei Zustand nach Diskushernienoperation C7/Th1 im Oktober 1991. Den Gesundheitszustand bezeichnete er als unverändert bis leicht verschlechtert. Die Zervikobrachialgie stehe im Vordergrund und stelle die Hauptursache der Behinderung dar; die Lumboischialgie sei dagegen hintergründig seltener, intermittierend und wenig behindernd.
 Der Beschwerdeführer macht eine Verschlechterung des Gesundheitszustandes auch mit Hinweis auf das rheumatologische Gutachten des Dr. med. U.________ vom 29. September 1999 und das psychiatrische Gutachten von prakt. Arzt G.________ vom 4. September 1999 geltend. Dr. med.
 U.________ führte zwar einen gegenüber den früher mit dem Beschwerdeführer befassten Ärzten deutlich erweiterten Diagnosenkatalog an. Vorab seien die Bildung deutlicher degenerativer Veränderungen im Bereich der Halswirbelsäule, eine Fehlstatik der gesamten Wirbelsäule mit Status nach lumbalem Morbus Scheuermann, deutliche degenerative Veränderungen in diesem Bereich sowie eine lumbosakrale Übergangswirbelbildung bei der Beurteilung der Arbeitsfähigkeit mit zu berücksichtigen. Rückenbelastende Tätigkeiten mit Heben schwerer Gewichte oder stereotyper Arbeitshaltung könnten nicht mehr ausgeübt werden. Die Arbeitsunfähigkeit aus rheumatologischer Sicht veranschlagte er auf 50 %. Damit steht er im Einklang mit Dr. med. C.________, welcher in der Stellungnahme vom 28. Januar 1997 und noch deutlicher in jener vom 21. April 1999 ebenfalls von einer rund 50 %igen Arbeitsfähigkeit bei leichten, die Wirbelsäule nicht belastenden Tätigkeiten ausgeht. Während die Arbeitsunfähigkeit somit von den beiden Ärzten im Wesentlichen übereinstimmend beurteilt wird, liegen unterschiedliche Angaben bezüglich des Gesundheitszustandes vor. Aufgrund der einmaligen Untersuchung im September 1999 war es Dr.
 med. U.________ nicht möglich, zu beurteilen, inwieweit sich der Gesundheitszustand des Patienten seit Februar 1994 verändert hat. Dies bestätigte er im Schreiben vom 8. Dezember 1999, in welchem er auch zu bedenken gab, dass nicht alle der von ihm angeführten objektivierbaren Befunde notwendigerweise mit klinischen Beschwerden einhergehen müssen.
 Für die mit dem im Sozialversicherungsrecht üblichen Beweisgrad der überwiegenden Wahrscheinlichkeit (BGE 125 V 195 Erw. 2, 121 V 47 Erw. 2a, 208 Erw. 6b mit Hinweis) zu beurteilende Frage, ob im Zeitraum zwischen der ersten (16. Februar 1994) und der zweiten Verfügung (18. August 1998) eine Verschlechterung des Gesundheitszustandes eingetreten ist, erweist sich die Stellungnahme des Dr. med.
 U.________ somit als nicht aussagekräftig genug.
 Prakt. Arzt G.________ stellte als erster beim Beschwerdeführer die Diagnose einer langdauernden reaktiven depressiven Störung (ICD 10 F32. 11), welche als Folgeerkrankung zu betrachten sei. Weiter gibt er an, der Gesundheitszustand habe sich seit 1994 eindeutig verschlechtert.
 Wann die Verschlechterung eingetreten und invalidisierendes Ausmass angenommen hat, erwähnt er jedoch nicht. In den bei den Akten liegenden medizinischen Unterlagen war bisher nie von psychischen Problemen die Rede.
 Obwohl prakt. Arzt G.________ die Depression als nicht so stark ausgeprägt beschreibt, dass sie sofort ins Auge stechen würde, wäre sie den mit dem Beschwerdeführer befassten Ärzten, insbesondere dem Hausarzt, jedoch aufgefallen und hätte in irgend einer Form Eingang in ihre Stellungnahme gefunden, wenn sie bereits vor Erlass der Verfügung vom 18. August 1998 ein relevantes Ausmass erreicht hätte.
 Es bleibt damit festzustellen, dass aufgrund der medizinischen Unterlagen in dem für die Beurteilung massgebenden Zeitraum keine wesentliche Verschlechterung des Gesundheitszustandes ausgewiesen ist, die geeignet wäre, die Arbeits- bzw. Erwerbsfähigkeit und damit den Invaliditätsgrad zu beeinflussen.
 d) Auch eine erhebliche Veränderung der erwerblichen Auswirkungen des an sich gleich gebliebenen Gesundheitszustandes kann zu einer Änderung des Invaliditätsgrades Anlass geben (BGE 113 V 275 Erw. 1a mit Hinweisen). Wird der Invaliditätsgrad nach der Einkommensvergleichsmethode festgesetzt, genügt für die Rentenrevision, dass bei einem der beiden Vergleichseinkommen eine Änderung eintritt (ZAK 1986 S. 590 Erw. 4 und 5). Im ersten, durch Verfügung vom 16. Februar 1994 abgeschlossenen Verfahren hat die Verwaltung für die Ermittlung des Invalideneinkommens auf das tatsächliche Einkommen abgestellt. Nach Erlass dieser Verfügung hat der Beschwerdeführer seine Arbeitsstelle verloren.
 Der tatsächlich erzielte Verdienst kann indessen grundsätzlich nur dann als Vergleichsgrösse dienen, wenn er einer zumutbaren, die Restarbeitsfähigkeit bestmöglich verwertenden Leistung entspricht, d.h. wenn kumulativ besonders stabile Arbeitsverhältnisse gegeben sind und anzunehmen ist, dass der Versicherte die ihm verbleibende Arbeitsfähigkeit in zumutbarer Weise voll ausschöpft und das Einkommen aus der Arbeitsleistung als angemessen und nicht als Soziallohn erscheint (BGE 126 V 76 Erw. 3b/aa). Dies war mit Bezug auf die zuletzt ganztags ausgeübte Tätigkeit als Drahtabteiler nicht der Fall, worauf nachfolgend noch zurückzukommen sein wird.
 Die Wiedererwägung ist das Verfahren zur Korrektur einer anfänglich unrichtigen Rechtsanwendung (unter Einschluss unrichtiger Feststellung im Sinne der Würdigung des Sachverhaltes (BGE 115 V 314 Erw. 4a/cc).
 b) Im erstinstanzlichen Verfahren führte die IV-Stelle aus, die rentenabweisende Verfügung vom 16. Februar 1994 sei nicht zweifellos unrichtig gewesen, weshalb die Voraussetzungen für eine Wiedererwägung dieser Verfügung nicht gegeben seien; die Verfügung vom 18. August 1998 könne daher auch nicht mit der substituierten Begründung der Wiedererwägung geschützt werden. Die Vorinstanz verneint eine offensichtliche Unrichtigkeit der ersten Rentenverfügung, zumal die widersprüchlichen Ausführungen des Dr. med.
 C.________ nicht geeignet seien, die ursprüngliche Beurteilung der Arbeitsfähigkeit durch Dr. med. H.________ in Zweifel zu ziehen oder als qualifiziert unrichtig erscheinen zu lassen.
 c) Das erste Rentengesuch wurde im Wesentlichen mit der Begründung abgelehnt, die Tätigkeit als Drahtabteiler, welche der Beschwerdeführer seit anfangs September 1993 ganztags ausübe, sei ihm in vollem Umfang zumutbar.
 Den im Rahmen der ersten Verfügung ergangenen ärztlichen Berichten lässt sich keine klare und unmissverständliche Aussage dahingehend entnehmen, dass der Beschwerdeführer bei Ausübung einer leichten körperlichen Tätigkeit zu 100 % arbeitsfähig wäre. Dr. med. H.________, auf dessen Aussagen Vorinstanz und Verwaltung bei ihrer Beurteilung im Wesentlichen abstellten, gab lediglich der Erwartung Ausdruck, dass bezüglich einer leichten körperlichen Tätigkeit wieder eine volle Arbeitsfähigkeit erreicht werden könne (Stellungnahme vom 16. Juli 1992) oder enthielt sich einer abschliessenden Stellungnahme (Bericht vom 19. Juni und
 4. Dezember 1992). Am 16. März 1993 teilte ihm die IV-Stelle mit, nachdem die vertrauensärztliche Untersuchung der Versicherung Z.________ eine Arbeitsfähigkeit von mindestens 50 % ergeben habe, bediene der Versicherte 21 Stunden pro Woche einen Drahtabteilerapparat. Auf die Frage, ob der Beschwerdeführer in dieser Tätigkeit 100 % arbeitsfähig sei und falls nicht, ob in absehbarer Zeit mit einer 100 %igen Arbeitsfähigkeit gerechnet werden könne, antwortete Dr. med. H.________ mit "Ja". Unklar bleibt, ob er damit ausdrücken wollte, der Beschwerdeführer sei für die Tätigkeit als Drahtabteiler 100 % arbeitsfähig, oder ob er der Meinung war, es könne erst in absehbarer Zeit damit gerechnet werden, dass in dieser neuen Tätigkeit eine volle Arbeitsfähigkeit erreicht werden könne. Missverständlich oder zumindest unvollständig war auch die Umschreibung der neuen Beschäftigung als leichte sitzende Tätigkeit, welche normalerweise von Frauen ausgeführt werde. Wie dem Bericht des Dr. med. C.________ vom 21. April 1999 zu entnehmen ist, handelte es sich dabei nicht wirklich um eine der Wirbelsäulenproblematik des Beschwerdeführers angepasste Tätigkeit und schon gar nicht um eine solche, welche er ganztägig ausüben könnte. Die Kurzbestätigung des Dr. med.
 H.________ vermag den an einen Arztbericht zu stellenden Beweisanforderungen (BGE 122 V 161) daher nicht zu genügen.
 Hinzu kommt, dass der Hausarzt aufgrund einer etwas präziseren Schilderung der auszuübenden Tätigkeit einer 50 % übersteigenden Arbeitsfähigkeit skeptisch gegenüberstand (Stellungnahme vom 29. Juni 1993 und vom 6. September 1993). Trotzdem konnte er den Versicherten von einer Steigerung von 50 % auf 100 % ab September 1993 überzeugen. Die IV-Stelle hat sich im Wesentlichen auf die Tatsache verlassen, dass der Beschwerdeführer zum Zeitpunkt der Rentenverfügung ganztags als Drahtabteiler arbeitete und daher von weiteren medizinischen Abklärungen abgesehen. Eine ärztliche Untersuchung wurde erst wieder im Rahmen der zweiten Anmeldung von Dr. med. C.________ durchgeführt.
 Obwohl seine Ausführungen in einigen Punkten etwas verwirrlich sein mögen, ergibt sich daraus, dass dem Beschwerdeführer auch bei Ausübung einer leichten Tätigkeit kein ganztägiger Einsatz mit voller Leistung zugemutet werden kann. Vielmehr wäre stets von einer 50 %igen Arbeitsfähigkeit auszugehen gewesen. Diese Beurteilung der Zumutbarkeit von Arbeit wurde durch die vorübergehende ganztägige Arbeitsaufnahme als Drahtabteiler nicht widerlegt, zumal die Akten den deutlichen Eindruck ergeben, dass diese Arbeit gar nicht einer körperlich leichten Arbeit entsprach. Da die Verwaltung bei der ersten ablehnenden Rentenverfügung gestützt auf eine unvollständige Sachverhaltsabklärung von einer falschen Beurteilung der Erwerbsfähigkeit ausging, erweist sich diese insoweit als offensichtlich unrichtig.
 Zu prüfen bleiben die Auswirkungen auf den Invaliditätsgrad.
 3.- a) Das Einkommen ohne Invalidität (Valideneinkommen) für das Jahr 1998 ist gestützt auf die Ausführungen der IV-Stelle in der vorinstanzlichen Vernehmlassung und der Verwaltungsgerichtsbeschwerde nunmehr unbestritten und beträgt Fr. 61'000.-.
 b) aa) Den trotz der gesundheitsbedingten Behinderung in einer leidensangepassten Tätigkeit zumutbarerweise noch erzielbaren Verdienst (Invalideneinkommen) setzte die IV-Stelle für das Jahr 1997 auf Fr. 20'562.- fest. Unter Beizug der vom Bundesamt für Statistik herausgegebenen Schweizerischen Lohnstrukturerhebung (LSE) belief sich gemäss Tabelle A1 der Zentralwert für die mit einfachen und repetitiven Aufgaben (Anforderungsniveau 4) beschäftigten Männer im privaten Sektor (bei einer wöchentlichen Arbeitszeit von 40 Stunden) im Jahre 1998 auf monatlich Fr. 4268.-. Auf der Basis von 41,9 Wochenstunden (Die Volkswirtschaft 2001, Heft 11 S. 100, Tabelle B9.2) ergibt sich im Jahre 1998 ein Gehalt von monatlich Fr. 4470. 73 oder Fr. 53'648. 76 für das ganze Jahr (4470.- x 12). Da der Versicherte nur zu 50 % arbeitsfähig ist, ist dieser Betrag zu halbieren, was Fr. 26'824. 38 ausmacht.
 bb) Nach der Rechtsprechung ist beim Einkommensvergleich unter Verwendung statistischer Tabellenlöhne zu berücksichtigen, dass gesundheitlich beeinträchtigte Personen, die selbst bei leichten Hilfsarbeitertätigkeiten behindert sind, im Vergleich zu voll leistungsfähigen und entsprechend einsetzbaren Arbeitnehmern lohnmässig benachteiligt sind und deshalb in der Regel mit unterdurchschnittlichen Lohnansätzen rechnen müssen (BGE 124 V 323 Erw. 3b/bb). In BGE 126 V 75 hat das Eidgenössische Versicherungsgericht die bisherige Praxis dahingehend präzisiert, dass die Frage, ob und in welchem Ausmass Tabellenlöhne herabzusetzen sind, von sämtlichen persönlichen und beruflichen Umständen des konkreten Einzelfalls (leidensbedingte Einschränkung, Alter, Dienstjahre, Nationalität/ Aufenthaltskategorie und Beschäftigungsgrad) abhängig ist.
 Der Einfluss sämtlicher Merkmale auf das Invalideneinkommen ist nach pflichtgemässem Ermessen gesamthaft zu schätzen, wobei der Abzug auf höchstens 25 % zu begrenzen ist (BGE 126 V 79 Erw. 5b/aa-cc).
 In Würdigung der gesamten persönlichen und beruflichen Umstände rechtfertigt sich vorliegend aufgrund der Teil- zeitarbeit sowie der Tatsache, dass gesundheitlich beein- trächtigte Versicherte, die selbst im Rahmen leichter Hilfsarbeitertätigkeiten nicht mehr voll leistungsfähig sind, lohnmässig gegenüber ihren gesunden Kollegen benach- teiligt sind (BGE 124 V 323 Erw. 3b/bb), ein Abzug von höchstens 20 %, was ein jährliches Invalideneinkommen von Fr. 21'459.- und im Vergleich zum Valideneinkommen von Fr. 61'000.- einen Invaliditätsgrad von 64,82 % ergibt. Der Vollständigkeit halber kann darauf hingewiesen werden, dass der Gesetzgeber im Bereich der Invalidenversicherung fixe, unmissverständliche Eckwerte bestimmt hat, an die die Rechtsanwendenden gebunden sind. Somit besteht auch bei knappem Verfehlen des für die nächsthöhere Rentenstufe nötigen Mindestinvaliditätsgrades kein Spielraum für Auf- rundungen, sobald das rechnerische Resultat einmal fest- steht (BGE 127 V 129).
 c) Zusammenfassend ergibt sich somit ein Anspruch auf eine halbe Invalidenrente. Da sich die ursprüngliche Verfügung damit als offensichtlich unrichtig erweist und ihre Berichtigung zudem von erheblicher Bedeutung ist, sind die Voraussetzungen für eine Bestätigung der Rentenverfügung vom 18. August 1998 mit dieser substituierten Begründung erfüllt, soweit damit eine halbe Invalidenrente zugesprochen wurde.
 4.- Zu prüfen bleibt, ab welchem Zeitpunkt der Beschwerdeführer Anspruch auf eine halbe Invalidenrente hat.
 a) Falls festgestellt wird, dass der Beschluss der IV-Stelle zum Nachteil des Versicherten zweifellos unrichtig war, erfolgt die Erhöhung der Renten frühestens von dem Monat an, in dem der Mangel entdeckt wurde (Art. 88bis Abs. 1 lit. c IVV). Diese Verordnungsbestimmung ist analog auf Fälle anzuwenden, in welchen sich die Abweisung eines Leistungsbegehrens nachträglich als zweifellos unrichtig erweist (BGE 110 V 296 Erw. 3d). Massgebend ist der Zeitpunkt, in welchem die Verwaltung vom Mangel Kenntnis erhalten hat, was nicht voraussetzt, dass die Unrichtigkeit der Verfügung mit Sicherheit feststeht. Es genügt, dass die Verwaltung Feststellungen getroffen hat, die das Vorliegen eines relevanten Mangels als glaubhaft oder wahrscheinlich erscheinen lassen (BGE 110 V 297 Erw. 4a).
 b) Die IV-Stelle brachte im vorinstanzlichen Verfahren vor, sie habe mit Erhalt des Berichts des Dr. med.
 M.________ vom 16. September 1996 Kenntnis von der Unrichtigkeit der Verfügung vom 16. Februar 1994 erhalten. In diesem Bericht weist der Arzt darauf hin, dass der Versicherte seit Oktober 1994 nicht mehr gearbeitet und sich sein Gesundheitszustand eher verschlechtert habe. Es rechtfertigt sich daher die Annahme, der Mangel sei in diesem Zeitpunkt entdeckt worden, weshalb Anspruch auf eine halbe Rente ab 1. September 1996 besteht.
 Dem Prozessausgang entsprechend steht dem Beschwerdeführer für das Verfahren vor dem Eidgenössischen Versicherungsgericht eine Parteientschädigung zu (Art. 159 Abs. 1 und 2 in Verbindung mit Art. 135 OG).
 des Kantons Aargau vom 16. November 1999 und
 die Verfügung der IV-Stelle des Kantons Aargau vom 18. August 1998 aufgehoben, und es wird festgestellt,
 dass der Beschwerdeführer ab 1. September 1996 Anspruch
 auf eine halbe Invalidenrente hat.
 III. Die IV-Stelle des Kantons Aargau hat dem Beschwerdeführer für das Verfahren vor dem Eidgenössischen Versicherungsgericht eine Parteientschädigung von
 IV.Dieses Urteil wird den Parteien, dem Versicherungsgericht des Kantons Aargau, der Ausgleichskasse der Aargauischen Industrie- und Handelskammer und dem


type: wikipedia

text:
Асунсио̀н (; ) е столицата на Парагвай и най-населеният град в страната с 525 252 жители към 2016 г. Той образува автономен столичен окръг и не влиза в състава на никой департамент.
 Градът е главното пристанище на река Парагвай, индустриален и културен център на страната. Тук се намира седалището на националното правителство. Произвеждат се обувки, текстилни и тютюневи изделия. В Асунсион се намират няколко висши учебни заведения. В града се намира и Националният пантеон (по-малко подобие на парижкия Дом на инвалидите), където са погребани много национални герои.
 Асунсион е най-горещата американска столица в климатично отношение. Високи температури има целогодишно, а най-високата е измерена през април 2007 г. (42 °С).
 Асунсион е един от най-старите градове в Южна Америка и най-дълго населяваното селище в областта на Лаплатската низина.
 История
 Испанският конкистадор Хуан де Айолас вероятно е първият европеец, посетил земите на бъдещата столица, докато плава по течението на река Парагвай в търсене на път до боливийските рудници. По-късно, Хуан де Саласар де Еспиноса е изпратен заедно с Гонзало де Мендоса да търси Айолас, но не успява да го намери. Докато пътува нагоре и надолу по течението на реката, Саласар де Еспиноса спира за кратко в залива на днешен Асунсион, за да презапаси корабите си. Той открива, че местното население е дружелюбно и решава да създаде крепост на това място през август 1537 г. Нарича я Нуестра Сеньора Санта Мария де ла Асунсион, тъй като римокатолическата църква празнува възнесение на Дева Мария на 15 август.
 Когато през 1541 г. Буенос Айрес е евакуиран след нападение на пампаски индианци, много от жителите му се заселват в Асунсион. Градът се превръща в щаб-квартира на испанската колониална дейност в източните части на Южна Америка в продължение на почти половин век, преди Буенос Айрес да бъде построен наново. След официалното отделяне на Буенос Айрес през 1617 г., Асунсион загубва значението си. Вероятно поради отдалечеността си от Испания, националистическите и сепаратистките движения набират скорост отрано в Парагвай. През 1731 г. избухва едно от първите въстания срещу испанското колониално владичество. Негов водач е Хосе де Антекуера и Кастро. През нощта на 14 срещу 15 май 1811 г. в Асунсион е обявена независимостта на страната от Испания. Стратегическото разположение на града по речната система, свързваща Аржентина, Бразилия и Уругвай, кара трите страни да се обединят срещу Парагвай в т. нар. война на Тройния съюз, която довежда до превземането на Асунсион през 1868 г. Той е окупиран и администриран от Бразилия до 1876 г.
 География
 Асунсион е разположен на левия бряг на река Парагвай, близо до сливането ѝ с река Пилкомайо. По река Парагвай южно от Асунсион преминава границата с Аржентина. Останалата част от града граничи с департамента Сентрал. Самият град се разпростира върху ниски хълмове, образувайки правоъгълна мрежа.
 Климат
 Климатът в града е влажен субтропичен, граничещ тясно с тропичен саванен. Лятото е горещо и влажно, а зимата е мека. Относителната влажност е висока през цялата година. Средната годишна температура е около 23 °C, а средното количество годишни валежи е около 1400 mm. Сняг в днешно време не вали, но през Малкия ледников период е валял. Последният записан снеговалеж е от юни 1751 г.
 Сухият сезон в Асунсион е сравнително кратък, от май до септември. Малки замразявания са възможни за ден-два през годината.
 Население
 Градското население възлиза на около 540 000 души. Грубо 30% от 6-милионното население живее в метрополния регион на града. 65% от населението в града е под 30-годишна възраст.
 Населението на Асунсион нараства драстично през последните няколко десетилетия вследствие вътрешна миграция от другите парагвайски департаменти, отначало поради икономическия растеж през 1970-те години, а по-късно заради икономическата рецесия в селските райони. Градовете около Асунсион поглъщат по-голямата част от потока хора, поради ниската цена на земята там и лесния достъп до Асунсион. Градът е един от най-евтините за живеене в света.
 Около 90% от населението на Асунсион изповядва католицизъм. Епархията на Асунсион покрива територия от 2582 km2, на която от 1 780 000 души 1 612 000 са католици. Най-разпространените езици са испанският и гуарани.
 Икономика
 В Асунсион се намират седалищата на най-големите компании в страната. През 1977 г. тук е открита стоковата борса BVPASA. Привлекателността на града за инвестиции произтича от облекчените му данъци. Той е сред градовете с най-добри инвестиционни условия в Южна Америка и разполага със закони, които защитават стратегическите инвестиции и гарантират средата за развитие на големите промишлени заводи и инфраструктурни заводи. Градът е икономическият център на Парагвай.
 Селскостопанската продукция от районите около Асунсион се преработват в столицата. Основната промишлена продукция се състои в текстили, растителни масла, обувки, брашно, малки речни плавателни съдове и тютюневи изделия.
 Транспорт
 Централната част на града е разположена на брега на река Парагвай. Пристанището на града се намира стратегически в малък залив, откъдето преминават повечето товарни кораби към и от града. Градският транспорт е широко използван и включва автобуси, достигащи всички части на града.
 Международно летище „Силвио Петроси“ е основната национална и международна порта на Парагвай. Намира се в Луке, близо до Асунсион. Това е най-натовареното летище в страната и е хъб на авиолинията TAM Paraguayan Airlines.
 Известни личности
 Родени в Асунсион
 Селсо Аяла (р. 1970), футболист
 Орасио Картес (р. 1956), политик
 Виктор Пеки (р. 1955), тенисист
 Роке Санта Крус (р. 1981), футболист
 Починали в Асунсион
 Анастасио Сомоса Дебайле (1925 – 1980), никарагуански военен и политик
 Други
 Исмаел Ролон (1914 – 2010), духовник, архиепископ на Асунсион през 1970 – 1989
 Побратимени градове
 Галерия
 Източници
 Външни препратки
 Официален сайт на града


type: caselaw

jurisdiction: EU

text:
 26.5.2007
 CS
 Úřední věstník Evropské unie
 C 117/26
 Žaloba podaná dne 20. března 2007 – Gabel Industria Tessile v. OHIM – Creaciones Garel (GABEL)
 (Věc T-85/07)
 (2007/C 117/41)
 Jednací jazyk: italština
 Účastníci řízení
 Žalobkyně: Gabel Industria Tessile S.p.A. (Rovellasca, Itálie) (zástupce: A. Petruzzelli, Avvocato)
 Žalovaný: Úřad pro harmonizaci na vnitřním trhu (OHIM)
 Další účastnice řízení před odvolacím senátem: Creaciones Garel S.A.
 Návrhová žádání žalobkyně
 —
 částečně zrušit rozhodnutí druhého odvolacího senátu ze dne 25. ledna 2007, oznámené dne 29. ledna 2007, které omezuje odmítnutí přihlášky ochranné známky Společenství GABEL č. 3754777 k zápisu pro třídu 24, neboť není v souladu s čl. 8 odst. 1 písm. b) nařízení 40/94;
 —
 potvrdit rozhodnutí druhého odvolacího senátu provést zápis ochranné známky ve třídě 25 pro „koupací pláště“;
 —
 nařídit OHIM, aby provedl zápis ochranné známky Společenství Gabel č. 3754777 pro třídu 24 a pro výrobky, které byly svého času specifikovány v takové třídě, kromě „koupacích plášťů “ve třídě 25;
 —
 uložit OHIM náhradu nákladů řízení vzniklých žalobkyni.
 Žalobní důvody a hlavní argumenty
 Přihlašovatel ochranné známky Společenství: Žalobkyně.
 Dotčená ochranná známka Společenství: Slovní ochranná známka „GABEL “(přihláška k zápisu č. 3.754.777) pro výrobky ve třídách 24 a 25.
 Majitel ochranné známky nebo označení namítaných v námitkovém řízení: Creaciones Garel S.A.
 Namítaná ochranná známka nebo označení: Obrazová ochranná známka „GAREL “pro výrobky ve třídách 24, 25 a 26.
 Rozhodnutí námitkového oddělení: Vyhovění námitkám.
 Rozhodnutí odvolacího senátu: Částečné vyhovění odvolání v rozsahu, v němž byl zápis ochranné známky přiznán pro „koupací pláště “(třída 25).
 Dovolávané žalobní důvody: Porušení čl. 8 odst. 1 písm. b) nařízení (ES) č. 40/94 o ochranné známce Společenství.