Report No. 2008-45
July 2008
Complete Audit Report
The following report is our audit of the Department of Agriculture.
During 2007, the Missouri Agricultural and Small Business Development Authority (MASBDA) entered into grant agreements totaling $500,000 under the Livestock Odor Abatement Program with three entities; a private company, the University of Missouri-Columbia and the University of Missouri-Rolla. The grant agreements limited grant payments to no more than one a month and required copies of supporting documents for expenditures. Our audit found that all of these grant funds were disbursed to the three entities in a hurried fashion, without regard for the grants' terms. None of the payments complied with the terms of the grant agreements, and none of the payments were supported by documentation of expenditures. In fact, we found that when the payments were made the three entities had only incurred a minimal amount of expenditures related to the grants. The executive director of MASBDA indicated it was necessary to make the payments prior to fiscal year end to prevent the appropriated funds from lapsing.
The Missouri Department of Agriculture (MDA) has not conducted adequate audits or reviews of ethanol and biodiesel incentive producer grant applications. Producers submit monthly applications to the MDA that include the number of gallons of fuel produced and the amount of feedstocks, such as corn, soybean oil and animal fats, used in the production of ethanol and biodiesel, as well as other information required by law. The MDA reviews the applications and tracks incentive payments through the use of spreadsheets. Through fiscal year 2007, the MDA has approved over $43.5 million in ethanol incentive payments and over $4.25 million in biodiesel incentive payments. Although the MDA conducted audits of two ethanol producers in 2003, no other reviews related to ethanol or biodiesel incentives were initiated until November 2007.
The MDA, Animal Care Facilities Act Program (ACFA) failed to inspect 1,111 of 2,769 licensed animal care facilities in calendar year 2006 for which an annual inspection was mandated by state law. The ACFA also failed to inspect 61 of 160 licensed rescue facilities in calendar year 2006. Similar findings regarding inspections were also noted in our prior report issued in 2004. Furthermore, as noted in our prior report, the ACFA has not developed a formal risk based assessment procedure to identify licensed animal care facilities that pose a higher risk of noncompliance with animal care, health, and safety standards.
The MDA has not complied with a statutory requirement to perform an analysis and to adjust fees for the Device and Commodity Program, a program that tests certain scales and measuring devices and tests packaged quantities at milk processing plants. The MDA has adjusted some fees for the Animal Health Laboratories; however, further adjustments may be necessary. The MDA has not adjusted fees for the Plant Pest Control Program as authorized by statute. This program licenses and inspects nurseries, greenhouses, and sod farms for harmful pests and plant diseases.
The MDA has performed some fee analysis for other programs where fees are set by statute, but has not reported the results to the legislature for their consideration. There are several MDA programs for which the revenues generated by license, inspection, or membership fees are significantly less than the costs to operate the programs.
During February 2007, the MDA issued a check for $70,000 from the Agriculture-Federal and Other Fund in an effort to settle the legal claims of a department employee. Under state law, legal claims against the state and covered employees are to be paid from the state's Legal Expense Fund, with the approval of the Attorney General's Office (AGO). Although the AGO agreed to represent the MDA in December 2006, the department approved this payment without the AGO's assistance. This payment not only contradicted state law, it was also inconsistent with the purpose for which the federal and other fund was administratively created and the intent of the appropriations of the fund.
Also included in the audit report are recommendations related to the petroleum device and safety inspection program, the commercial feed inspection program, treated timber licensing and inspection, and the state mediation grant. Some of our current recommendations related to the commercial feed inspection program were also included in a prior report on that program issued in 2002.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
