Check-off audit grows tenfold
After a year of controversy regarding the financial firewall of the beef check-off program, an audit has revealed the actual amount disputed, and the issue has been resolved by the two parties involved -- the National Cattlemen’s Beef Association (NCBA) and the Cattlemen’s Beef Board -- with the NCBA to reimburse almost $217,000 to the Cattlemen’s Beef Board.
As first reported in August, an independent audit conducted by Clifton Gunderson LLP, an independent certified public accounting firm, confirmed the check-off accounting firewall was breached.
In late July, Robert Fountain Jr., a cow-calf producer from Georgia who also served as the secretary-treasurer of the Cattlemen’s Beef Board, said during a Denver press conference that the accounting firm “found many expenses that were either improperly charged to the check-off or insufficiently documented.”
A comprehensive audit was then conducted and more alleged misappropriations were discovered.
In July, Fountain cited several improperly charged items found in violation, including:
•“International and domestic travel expenses for the spouses of staff and volunteer leadership;
•“Consulting fees for the purpose of investigating a certified beef program for the policy division;
•“Travel performed for the purpose of initiating an NCBA-member insurance program;
•“Time spent by employees in meeting related to non-check-off revenue development.”
Today, the disputed amount disclosed has grown almost tenfold, from approximately $25,000 to $216,944. According to a Jan. 17 R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) press release, the NCBA has agreed to reimburse the Cattlemen’s Beef Board for its “improprieties initially identified by Clifton Gunderson in a July 2010 compliance review.” In this same press release, R-CALF USA voiced its dissatisfaction with the negotiated resolution between the parties involved, and requested that the U.S. Department of Agriculture reopen the investigation and not accept the agreed-to resolution.
In a Jan. 20 Drovers CattleNetwork report, John Maday said an agreement had since been made between the NCBA and the Cattlemen’s Beef Board. The agreement was approved by the U.S. Department of Agriculture’s Agricultural Marketing Service -- the organization that overseas the check-off program -- for the Cattlemen’s Beef Board to be reimbursed.
Maday also reported that additional protective measures, such as monthly reviews of contractor invoices, have been instituted “to prevent future mistakes.”
The beef check-off program is administered by the 106-member Cattlemen’s Beef Promotion and Research Board. It was established as part of the 1985 Farm Bill and assesses $1 per head on the sale of live domestic and imported cattle. Funds raised go toward research and the promotion of beef and beef products.
In November, the U.S. Cattlemen’s Association reported that the USDA has included in the fiscal year 2011 plan an audit of the “Beef Research and Promotion Board” activities. The objective of this plan by the USDA’s Office of the Inspector General is “improvement of the initiatives held within this program.”