Background:

The Federal Credit Reform Act (FCRA) requires that Federal agencies estimate the costs of providing direct loans and loan guarantees based on expected long term program cash flows. USDA’s Rural Development makes direct loans and loan guarantees to increase economic opportunity and improve the quality of life for rural Americans. USDA wanted contractor support to review and validate Rural Development’s credit subsidy models.

Solution:

Incisive is involved with performing Independent Validation and Verification (IV&V) on Rural Development’s credit subsidy models. As part of the review, we are responsible for interviewing program and budget staff, reviewing subsidy models and their technical documentation, and testing the functionality and projections of the models as compared to the real world loan programs. We are also involved with performing sensitivity analysis on credit subsidy estimates for multiple years. This work requires thorough knowledge of the Federal Credit Reform Act and credit reform accounting.