R-CALF USA: Inspector General corrects 2013 Beef Checkoff audit
February 10, 2014
In a corrected report issued today, the U.S. Department of Agriculture (USDA) Office of Inspector General (OIG) has withdrawn its 2013 conclusions that the National Cattlemen's Beef Association (NCBA) had properly expended all Beef Checkoff Program funds and that the relationship between the Beef Checkoff Program's Cattlemen's Beef Board (CBB) and the NCBA complied with U.S. law.
This and other substantive corrections were made by the OIG to its March 29, 2013 audit report (original report) that reviewed whether USDA was properly ensuring that Beef Checkoff Program funds were being properly collected, distributed and expended.
Last April, R-CALF USA filed a complaint with the OIG calling the original report a "colossal whitewash of monumental proportions," and alleging that the report defied "any semblance of logic, impartiality and credibility."
In response to R-CALF USA's complaint, the OIG withdrew the original report from the public domain and initiated an investigation into R-CALF USA's allegations under the Data Quality Act and Implementing Guidelines.
In its investigative report addressed to R-CALF USA, the OIG states that the audit team for the original report did not perform all necessary procedures and, therefore, the OIG "could not determine that all funds were collected, distributed, and expended in accordance with the Act and Order…"
The investigative report further states: "With respect to R-CALF's objection to OIG's determination that funds were expended in accordance with the Act and Order, the revised report concludes that AMS' (USDA's) oversight as an internal control function needs improvement. In our view, this resulted in agency officials having reduced assurance that beef checkoff funds were collected, distributed, and expended in accordance with the Act and Order."
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"This is a huge revelation," said R-CALF USA CEO Bill Bullard adding, "No longer does the audit report vindicate the actions by either the USDA or the NCBA, particularly the actions by the NCBA of submitting improper expenses to the Beef Checkoff Program for reimbursement and the action by USDA of requiring NCBA to reimburse $216,944 as the agency's only punishment meted out for the NCBA's egregious misuse of producers' funds."
The investigative report also clarifies that the OIG audit was very narrow in scope as it was an audit of USDA's oversight of the CBB, not an audit or investigation of the CBB's operations. It also was performed so as not to duplicate the work performed by other reviewers, such as the independent public accountant that disclosed NCBA's misappropriation of the $216,944 in 2010.
Bullard said that another important disclosure in the investigative report is the fact that the OIG does not have the authority to grant R-CALF USA's request to permanently suspend the NCBA's eligibility to contract with the Beef Checkoff Program. The OIG states that is a management function that OIG is precluded from performing.
"Now that the OIG's audit report has been corrected to remove the many errors contained in the original report, we intend to go back to the U.S. Agriculture Secretary to renew our request that he begin performing his managerial function of protecting U.S. producers' beef checkoff funds from the NCBA that not only has abused the Beef Checkoff Program, but that is also fighting against the interests of a majority of U.S. cattle producers by trying to eliminate the widely popular country of origin labeling (COOL) law both in Congress and in U.S. courts.
"It is unconscionable that our U.S. Secretary of Agriculture refuses to put a stop to this corruption," concluded Bullard.