News Update
July 28, 2010

Media Statement: NCBA Compliance Review Complete

All checkoff contractors and subcontractors are subject to compliance reviews and audits. It is the responsibility of checkoff contractors to assure that checkoff funds are being used appropriately, and it is the responsibility of the Cattlemen’s Beef Board (CBB) to monitor checkoff contractors. To this end, CBB has the legal responsibility to perform reviews of its contractors periodically, and to oversee and enforce the rules regarding checkoff expenditures.

In February 2010, the CBB began the process of conducting a routine compliance review of the National Cattlemen’s Beef Association (NCBA) by engaging an independent CPA firm to perform agreed-upon procedures at NCBA. This 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 compliance review also included compliance of checkoff expenditures of the Federation of State Beef Councils Division of NCBA (Federation). This compliance review included fiscal years (FY) 2008 and 2009 as well as the five months ended Feb. 28, 2010. The agreed-upon procedures were performed to test:

• NCBA’s allocation of overhead costs;
• employee time reporting as a basis for the allocation of salaries and benefits to the checkoff;
• travel expenses;
• Federation costs; and
• subcontractor selection procedures.

In addition to Beef Board members and qualified state beef councils, this independent report has been forwarded to the U.S. Department of Agriculture Agricultural Marketing Service (USDA-AMS), the oversight agency for the beef checkoff, for review and input.
Robert Fountain Jr., a cow-calf producer from Adrian, Ga., and CBB secretary-treasturer offered this statement:

“An independent accounting firm tested charges from NCBA to the beef checkoff in five areas and found many expenses that were either improperly charged to the checkoff or insufficiently documented. For example, 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 and time spent by employees in meetings related to non-checkoff revenue development were charged in full or in part to the checkoff. The exceptions noted by the CPA firm included all three periods tested, but were more prevalent in FY 2009 and the first five months of FY 2010.

 “These findings are extremely troubling to the CBB Executive Committee. For this reason, CBB will begin a more comprehensive compliance review of NCBA for FY 2009 and FY 2010. CBB will also implement new monthly review procedures of NCBA’s checkoff expenditures and will issue more detailed guidelines to all contractors. The objectives of the additional testing will be to gain a better understanding of the CPA firm’s findings, to determine the pervasiveness of the reported issues, and to calculate the monetary impact of those issues on the amounts billed by NCBA to CBB and the Federation.

“We found these discrepancies through the strong and vital systems CBB has in place for monitoring contractor expenses to assure producer dollars are used appropriately. While the compliance review findings are troubling, the project managers with all of our contractors do excellent work using checkoff dollars and we think every producer has benefited from these checkoff-funded activities.”

Click links for copies of the Executive Summary and the full Compliance Review. For additional information, you may also contact Lynn Heinze, 303-867-6319, lheinze@beefboard.org.

NCBA’s Initial Response:

From Steve Foglesong, NCBA President and producer from Illinois:

“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.”

— Statement by NCBA.

Beef Cattle Short Course Set Aug. 2-4

The 56th Annual Texas A&M Beef Cattle Short Course, sponsored by the Texas AgriLife Extension Service, is scheduled for Aug. 2-4 in College Station.

Numerous topics related to producing beef, both for the cattle producer and consumer, will be discussed throughout the event.

The general session on Aug. 2 will feature discussions of challenges and opportunities in the cattle business. Topics include a cattle market outlook by Randy Blach, CEO of Cattle-Fax, and how beef producers feed the U.S. by Daren Williams, executive director-communications with the NCBA.

Aug. 3 program highlights will include an update on the cattle-tick program, drought management strategies and advanced genetic beef research. Aug. 4 activities will include live demonstrations on handling cattle, beef carcass evaluation and brush management techniques.

Members of the media and those interested in following news from the event can read blog posts provided by AgriLife Communications at http://agrilifeweb.tamu.edu/beefshortcourse/.

For more information about the short course and to view a complete schedule of speakers and topics, visit http://animalscience.tamu.edu/ansc/BCSC/index.html.

• WHAT: 56th Annual Texas A&M Beef Cattle Short Course, Aug. 2-4.
  
• WHERE: Texas A&M University, College Station, Rudder Complex.
  
• DETAILS: More than 1,200 beef cattle producers and industry representatives will be attending the event. The short course is the largest of its kind in the U.S. An industry trade show featuring more than 110 businesses and service exhibits will be held.
  

— Release by Texas AgriLife Extension Service.

Coalition of Senators Opposes More Strict EPA Standard For Dust

A bipartisan coalition of 21 U.S. senators is warning the Environmental Protection Agency (EPA) a stricter standard for large particulate matter (dust) could impose significant costs on the agricultural sector. A July 23 letter to EPA Administrator Lisa Jackson urges the agency to forego its proposal to tighten the national ambient air quality standard for dust. EPA’s proposed standard would be twice as stringent as current regulations.

The senators suggested a tougher standard would be “extremely burdensome for farmers and livestock producers.” They pointed to higher projected costs for farmers due to the excessive dust control measures.

“We all want a clean and healthy environment, but it defies common sense to mandate that farmers keep dust between their fence rows when combining or that the county government keep gravel dust on the road,” said U.S. Sen. Chuck Grassley of Iowa .

In addition to Grassley , U.S. Sens. Pat Roberts and Sam Brownback of Kansas were among those signing the letter to Jackson. NCBA also has provided input to EPA suggesting the proposed standard would make it virtually impossible for many critical U.S. industries, including ranching and feeding, to comply.

— Release by the Kansas Livestock Association.

The Weather Channel Offers New Agricultural Application For Farming Enthusiasts

Managing your crops isn’t easy, but now there is a new application on Weather.com to help. Weather.com just launched its new website in an effort to help users navigate the site more efficiently.

Weather.com now features customizable local weather applications, including an Agriculture Application where farmers can get their daily forecast with precipitation, and access soil moisture conditions, precipitation reports and forecasts, wind speed and direction, as well as other beneficial information, such as:

• Almanac — shows a history of average highs/lows and historical records for temperature and precipitation levels in local areas;
  
• Growing degree days calculator — measures the rate at which crops grow during specific dates and temperatures throughout the year
  
• Seasonal outlooks — offer regional season precipitation and temperature levels around the U.S.; and
  
• Agricultural news across the nation.

More information on Weather.com’s new Agricultural Application is accessible at http://www.weather.com/outlook/agriculture/forecast/.

— Compiled by Mathew Elliott, assistant editor, Angus Productions Inc.