The U.S. Department of Agriculture distributed $1.1 billion over seven years to the estates or companies of deceased farmers and routinely failed to conduct reviews required to ensure that the payments were properly made, according to a government report.

In a selection of 181 cases from 1999 to 2005, the Government Accountability Office found that officials approved payments without any review 40 percent of the time.

The report cited a 1,900-acre soybean and corn farm in Illinois that collected $400,000 on behalf of an owner who lived in Florida before his death in 1995. The company did not notify the government of the death but certified each year that the dead shareholder, who owned 40 percent of the company, was "actively engaged" in managing the farm.

Most estates are allowed to collect farm payments for up to two years after an owner's death, giving heirs time to restructure their businesses and probate the will. After that, local USDA officials must certify every year that the estate is still farming and has remained open for reasons other than simply collecting subsidies.

But the GAO report found that the Agriculture Department depends on heirs and businesses to alert the agency to deaths and does not use other sources, such as Social Security records, to confirm eligibility. The report was prepared at the request of Sen. Charles E. Grassley (R-Iowa), a frequent critic of large subsidies to wealthy farms. It is expected to be publicly released Tuesday at a Senate Finance Committee hearing.

"Farm payments are meant for those who need some help getting through the tough times," Grassley said last week. "Clearly there are loopholes that should be closed and laws that need to be followed."

In a letter responding to the GAO report, the Agriculture Department said that the payments were not necessarily examples of fraud or abuse and that auditors did not prove any specific cases of cheating. The department's field offices defended the practice of routinely paying dead farmers' estates without fully investigating the claims, citing staff shortages and competing priorities. The agency also said that any overpayments would amount to less than 1 percent of farm subsidies paid between 1999 and 2005.

GAO auditors found that in addition to the 40 percent of cases not reviewed by the USDA, 38 percent had "weaknesses," including "nonexistent or vague" documentation. The GAO said it could not determine from its examination whether the government improperly overpaid the estates or how much any excess might be.

An Indiana corporation that was owned entirely by one person never notified the government of the owner's death in 1993 and continued to collect unspecified payments for a decade before new owners filed for farm benefits. The government made $567,000 in payments to an Alabama estate over seven years on behalf of an owner who died in 1981. Another estate continued to receive unspecified payments on behalf of a person who died in 1973 -- more than three decades ago -- without any investigation or review.

The GAO said it found that five executors of estates had simply told the government they wanted to keep the estates open, without further explanation. Local officials in one Georgia county, in one action during a routine meeting without any investigation, approved payments for 107 people who had died more than two years earlier. GAO auditors found 10 additional cases in which subsidies were "approved for payments without any indication that even a cursory review had been conducted."

Making database checks against a list of people reported as dead to the Social Security Administration "to verify that an individual receiving farm payments has not died is a simple, cost-effective method," the GAO said. The Agriculture Department said it has asked all field offices to review the eligibility of estates and plans to begin conducting database checks.

The GAO report said that, in some cases, people who had reached the annual limit on farm subsidies of $360,000 to an individual were able to collect additional money as a beneficiary of an estate.

In its response, the Agriculture Department acknowledged that large farming operations, often formed by members of an extended family, could exceed the payment limits by keeping an estate active years after a death.

The report follows a 2004 GAO study for Grassley highlighting loopholes in the payment limits. That report found that large farming operations, organized into webs of partnerships and corporations, can legally collect far more than the $360,000 limit. More than two-thirds of the $1.1 billion in payments to estates and companies of dead people went through such entities.

Grassley plans to ask the Internal Revenue Service to investigate whether corporations and partnerships that do not inform farm programs of deaths are paying enough in taxes. Estates are taxed at a higher rate than some businesses. The senator also wants to know whether the IRS was similarly unaware of the deaths.

Grassley said that "those who might be willing to game the USDA and the federal Treasury" would get an unfair tax advantage.

Last year, a Washington Post investigation of farm subsidies found more than $15 billion in wasteful or redundant spending in other farm payments, including $1.3 billion to people who do not farm and $817 million to farms that use loopholes to exceed limits.