Beef Checkoff Fund Misuse Alleged; NCBA Responds
By Pork news source
| Wednesday, July 28, 2010
A routine compliance review indicated that the National Cattlemen’s Beef Association has misused beef checkoff dollars, prompting further investigation, Cattlemen’s Beef Board Secretary-Treasurer Robert Fountain Jr. said today in a news release.
The review, conducted by CBB with the help of an independent accounting firm, included fiscal years 2008 and 2009 as well as the first five months of fiscal 2010, ended Feb. 28. The firm reviewed NCBA compliance with its agreements to conduct checkoff-funded programs in the areas of beef promotion, research, consumer information and industry information.
The review specifically tested overhead costs; employee time reporting as a basis for the allocation of salaries and benefits to the checkoff; travel expenses; costs of NCBA’s Federation of State Beef Councils division; and subcontractor selection procedures.
NCBA charges to the checkoff in these five areas, Fountain said, showed expenses improperly charged or insufficiently documented. Among them, he said, were travel expenses for the spouses of staff and volunteer leadership; consulting fees for investigating a certified beef program for the policy division; travel performed to initiate an NCBA-member insurance program and time spent by employees in meetings related to non-checkoff revenue development were charged in full or in part to the checkoff.
The alleged infractions occurred in all three periods tested, but they were more prevalent in fiscal 2009 and the first five months of fiscal 2010, Fountain said.
“These findings are extremely troubling to the CBB Executive Committee,” he said.
The report has been sent to the USDA’s Agricultural Marketing Service, which oversees the beef checkoff, as well as Beef Board members and qualified state beef councils.
NCBA’s Responds
In a statement released by NCBA Tuesday, Steve Foglesong, NCBA president and producer from Illinois, responded to the allegations :
"On Monday evening, July 26, we received the independent accountant’s final report. We are committed to achieving accuracy in this report. Responsible use of the producer dollars and ensuring the financial firewall are critical. Where mistakes were made, we will correct them.
"A compliance review has been conducted every year of NCBA’s 14-year existence. There has been a transparent as well as full reconciliation of expenses when warranted. Every time there is a review, there are lessons, and we consider those an opportunity to fine-tune our processes going forward.
"We agree with CBB’s accounting firm, Clifton Gunderson LLP, and with CBB that written and specific guidelines are needed for all checkoff contractors. The accountant’s inability to determine compliance on select items does not mean non-compliance. Rather, it is an indication that written guidelines are needed to achieve compliance.
"NCBA understands the importance of compliance with the financial firewall and accepts this responsibility without question. It’s for this reason we keep separate bank accounts and our accounting and time keeping procedures are in accordance with and even exceed most industries’ standards. We have more than 8,000 different coding options for accurately assigning time and expenses. We strive for accuracy and will continue to seek clarity on guidelines to ensure compliance.
"When the National Cattlemen’s Association merged with the National Live Stock and Meat Board, NCBA became more than a policy organization. NCBA became the home for the Federation of State Beef Councils, and as such, the No. 1 champion for the beef checkoff. Our employees log more than 200,000 hours annually building and protecting beef demand. Every hour is focused on delivering results that matter with a strong focus on being accountable to producers.
"Our commitment is to address the compliance review through a very factual and transparent process with our Federation partners, CBB and the U.S. Department of Agriculture, which share accountability to producers who pay the checkoff. A complete response to the accountant’s report will be addressed with CBB, participants from state beef councils and state cattlemen associations and NCBA directors at this week’s Cattle Industry Summer Conference."
Source: Meatingplace.com, NCBA
