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Other Matters: Massachusetts Department of Agricultural Resources Purchases of Farmland Parcels Funded by the Natural Resources Conservation Service

Audit notes MDAR could be missing out on millions in federal funding for the purchase of farmland.

Table of Contents

Overview

As previously mentioned, the United States Department of Agriculture’s Natural Resources Conservation Service (NRCS) partners with the Massachusetts Department of Agricultural Resources (MDAR) to help fund the purchase of some farmland in its Agricultural Preservation Restriction (APR) Program. The Agricultural Land Easements (ALE) Program administered by NRCS provides financial assistance to MDAR for the APR Program, financing up to 50% of fair market value of the cost of a farmland parcel. A farmer who wants to preserve a parcel of farmland works with both MDAR and NRCS to complete an application to be accepted into the program.

According to NRCS personnel, MDAR does not complete purchases of farmland parcels in the APR/ALE Program in a timely manner; some take almost three years to complete because they lack required documentation to support the farmland applications under consideration. In comparison, NRCS staff members indicated that a farmland purchase should typically be possible to complete within about eight months from the date of application. NRCS personnel indicated that MDAR’s staff may lack the skills and training necessary to effectively manage the application process, including setting proper priorities and ensuring that all required program forms are completed and that information is submitted within the required federal deadlines.

 

$3 million the amount of federal funding for the purchase of farmland that was lost by MDAR during a five-year period due to slow application processing

As a result, the Commonwealth may be losing the opportunity to take full advantage of federal funding for farmland purchases. In fact, NRCS officials told the Office of the State Auditor that over a five-year period, it had to return more than $3 million in federal funding that could have been used in the Massachusetts APR Program because MDAR could not process applications in a timely manner. We believe that MDAR should work with NRCS on improving its processing of APR Program applications.

Auditee’s Response

In its response to our report, MDAR provided the following comments:

MDAR applies to NRCS for more projects than NRCS ultimately funds. While MDAR was prepared to close all the projects on our 2013 federal Cooperative Agreements, and worked very closely with NRCS staff on these projects, a number of projects that were added to a series of amendments did not close due to factors beyond its control. Furthermore, in the interest of ensuring that the maximum number of applicants was added to the agreement, the Department was allowed to submit estimated values to the agreement which subsequently changed following appraisals. Family dynamics, local issues, access matters, last minute changes made by the landowner are all examples of factors which can cause a land protection project which has been added to an agreement to not close.

A timeframe of 8 months for MDAR to close a project from the time of application is unrealistic. The timeframe appears to be based upon the performance of a single land trust working on a single project funded cooperatively with NRCS. As a state agency, MDAR works on multiple projects (new applications and existing projects), and has to follow statutory, regulatory and state procurement requirements for appraisals, title work and surveys, an annual budget process and two rounds of approval votes from the ALPC.

However, the Department has recognized a need to increase the pace of closings and continues to work to revise its APR process. Most recently MDAR developed an annual application process with the goal of selecting the best farmland in the state, ensuring accurate appraised values, securing landowner agreements before moving forward and expediting the process and increasing the probability that the project will close.

Date published: August 22, 2018
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