USDA could improve oversight of feed, producer check-off boards: GAO

By Aerin Einstein-Curtis

- Last updated on GMT

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Although progress has been made, the USDA has more to do in its oversight of check-off programs including reviewing subcontracts and transparency, say auditors.

The Government Accountability Office (GAO) released a report​ regarding the US Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) oversight of agricultural check-off programs last week.

The review of practices found some areas of improvement from the last audit, but noted transparency and work with subcontracts as places where ongoing effort is needed.

“AMS has improved its oversight of check-off programs since USDA’s Office of Inspector General (OIG) made recommendations in a 2012 report,”​ the GAO auditors said in the report.

“In response to two OIG recommendations, AMS developed and implemented standard operating procedures, which outline specific oversight responsibilities of AMS, and began to conduct internal reviews of its oversight functions. However, GAO found that AMS does not consistently review subcontracts – a legal agreement between a contractor and third party – or ensure that certain documents are shared with stakeholders on program websites.”

Check-off programs are federal agricultural research and promotion programs, which receive funding from a portion of the sales of each unit of a specific commodity. Their activities include efforts to increase demand, expand markets and increase use through research and promotion.

There are 22 programs covering areas like soybeans, sorghum and for animal production in relation to beef  dairy, and swine. However, check-off boards are not allowed to use the funding to lobby on legislative or governmental action, or promote false, misleading or disparaging advertising.

The review was intended to check the degree to which AMS has addressed previously highlighted flaws in oversight along with examining how check-off programs are evaluated and what the findings of those evaluations have been, the agency said. Work on the audit ran from August 2016 through October 2017.

Findings and recommendations

Previously, the OIG reviewed the AMS’s oversight in 2012, auditors with the GAO said. At that time, two recommendations for improvements were made.

Those suggestions included using standard operating procedures, which were to include detailed instructions, to oversee areas covered by the AMS and offering guidance for internal reviews of program operations to make sure that AMS guidelines were followed, said the GAO.

“AMS has responded to recommendations for improving oversight made in the OIG’s 2012 report, particularly by developing and implementing standard operating procedures and conducting internal reviews of AMS check-off program oversight.​ However, AMS does not provide consistent oversight across check-off programs in some areas.”

In the current report, GAO said that AMS has not been regularly reviewing the use of subcontracts by check-off programs. Boards are completing independent economic evaluations of effectiveness, but evaluations have some methodological weakness that could be addressed.

There also are several places where AMS has not established consistency in its oversight practices, the auditors said. These include, “(1) review of subcontracts, (2) follow-up on recommendations made to check-off boards, (3) ensuring that independent financial audits contain statements of assurance and (4) ensuring that information is available on program websites for assessment payers.”

The agency is recommending​ a series of steps for AMS to take to improve its processes and practices, it said.

The AMS needs to revise its standard operating procedures for check-off programs to include a sample of subcontracts in management reviews, and AMS should put in place a mechanism follow-up with check-off boards regarding how the board implements management review suggestions, the agency said.

AMS also should check that annual independent audits incorporate the five statements of assurance specified in procedure, it said.

The AMS administrator needs to include in guidelines and procedures that documents such as bylaws, policy statements, annual reports and evaluations of economic effectiveness are published on check-off websites,  

“The Administrator of AMS should develop criteria by which to assess the methodology and results of independent evaluations and document those reviews to ensure that the standard operating procedures are met,”​ it added.

The GAO said the USDA has indicated agreement with its findings and recommendations.

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