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GAO suggests five changes to checkoff programs oversight

Social media identified as one of the challenging issues for checkoff oversight.

The U.S. Government Accountability Office delivers five recommendations for checkoff programs after a comprehensive review. At the request of House Minority Leader Nancy Pelosi (D-Calif.), the GAO examined the USDA’s Agriculture Marketing Service process overseeing checkoff programs.

In 2016, checkoff funds totaled over $885 million for 22 commodity programs that conduct research and promotion activities to strengthen a commodity’s position in the market.

“Got milk?”, “The Incredible, Edible Egg” and “Pork: The Other White Meat” are examples of advertising campaigns undertaken by two of the 22 federal agricultural research and promotion programs. These programs, funded by a fraction of the sale of each unit of a commodity, are led by boards consisting of industry members appointed by the Secretary of Agriculture.

The GAO evaluated the extent to which AMS has addressed previously identified weaknesses in its oversight along with how the effectiveness of the programs has been evaluated and what the results have indicated. Eight programs, based on total funds collected, were selected and review laws, regulations and agency guidance. Interviews of agency officials, checkoff board executives and economists were also conducted.

GAO’s recommendations
In the report publicly released last week, the GAO advises the following changes to USDA AMS oversight of 22 checkoff programs to enhance transparency.

1. Subcontracts: The GAO says AMS has made a noticeable stride in improving its oversight of checkoff programs based on the USDA’s Office of Inspector General’s recommendations in 2012. However, GAO found that AMS does not consistently review subcontracts or ensure that certain documents are shared with stakeholders on program websites.

2. Increase follow-up: AMS should establish a mechanism for documenting and tracking follow-up with checkoff boards on the implementation of management review recommendations

3. Audit rules: AMS should ensure that annual independent audits include the five statements of assurance as outlined in the standard operating procedures.

4. SOPs: AMS should include in the guidelines and standard operating procedures that key checkoff board documents, such as bylaws and policy statements, annual reports and independent evaluations of economic effectiveness are posted on the checkoff programs’ websites. 

5. Independent evaluations: Independent economic evaluations of the effectiveness of checkoff programs, required by law to be conducted every five years, have generally shown positive financial benefits. For the eight evaluations GAO reviewed, benefits ranged from an average of $2.14 to $17.40 for every dollar invested in the programs. However, the evaluations varied in the methods used and had certain methodological limitations. Without developing criteria to assess the methodology and results of evaluations, the agency’s assessments of independent economic evaluations may be inconsistent across checkoff programs and misleading to stakeholders. Therefore, GAO recommends AMS to 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. 

As stated in the report, AMS officials also identified ongoing challenges in oversight across the 22 commodity checkoff programs. Specifically, AMS marketing specialists and senior agency officials identified three challenges: (1) the increase in some checkoff boards’ use of social media, (2) the absence of an information system to track approvals, and (3) complex and time-consuming Freedom of Information Act requests for some programs. Because of competing priorities, some oversight duties may be delayed as a result.

GAO’s entire report can be found here.

TAGS: Regulatory
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