Source:  Tom Johnston, MEATINGPLACE.COM, 7/27/10

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 response
NCBA released a statement saying it received the auditor’s final report and is reviewing the information that CBB has released to the public. Meanwhile, NCBA said it is working to formulate a response that it would release later today.

CBB said it will look further into NCBA’s checkoff expenditures for fiscal 2009 and 2010, as well as implement new monthly review procedures of NCBA’s checkoff expenditures and 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,” Fountain said.

Established as part of the 1985 Farm Bill, the checkoff assess $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products.

For more stories, go to www.meatingplace.com.