Checkoff operator passes its management review

Jan 10, 2014

When it comes to health matters, they often say, “No news is good news” and the same rings true for managerial “health” checks, too.

In a report released last Tuesday, USDA’s Agricultural Marketing Service (AMS) stated it had found “no reportable findings” in its required triennial management review of the Cattlemen’s Beef Board (CBB). The purpose of the review was to ensure the CBB—which operates the Beef Checkoff Program—was and is acting in accordance with various laws regarding how a checkoff program conducts itself and its finances.

“Our review showed that CBB adhered to the AMS Guidelines for Oversight of Research and Promotion Programs, as well as its own policies,” read the introduction of the AMS report.

Among other things—many other things—the AMS management review collected a random sampling of 60 total disbursements for the fiscal years of 2011, 2012 and 2013. The disbursements, which totaled $9.84 million, were examined for supporting documentation, proper account coding, proper approvals, amounts of individual disbursements, and appropriateness per CBB’s disbursement policy.

“Additionally, we performed a walkthrough of monthly cost allocation for the National Cattlemen’s Beef Association (NCBA), CBB’s largest contractor,” detailed the report.

Later on, the report’s authors pointed out, “We also discussed the prior loan agreement for NCBA and the standing agreement with NCBA for which CBB advances one month’s implementation costs prior to billing.”

Ultimately the report noted that AMS found CBB to be appropriately executing its duties in accordance with the laws that govern it and its own internal policies.

“Having seen all of the policies and procedures at work in protecting our checkoff investments, I have confidence in the systems we have in place, so I can’t say that I am surprised by the results,” said Jimmy Maxey, Secretary- Treasurer of the CBB and a cattle feeder in Fresno, CA.

“But I think these comprehensive reviews are critical to the transparency of checkoff operations to all producers and importers who pay the beef checkoff assessment.”

He continued, saying, “We are pleased to share the results of this management review with beef producers and importers nationwide, so that they can feel confident that their hard-earned checkoff dollars are being invested with the utmost care and integrity.”

Legal necessity

The hows and whys behind checkoff spending are important details in today’s beef-flavored political landscape.

The CBB and its primary contractor, NCBA, have been the targets of occasional lawsuits by animal rights groups such as the Humane Society of the U.S. (HSUS) over how checkoff funds are allocated and spent.

In mid-2012, Kansas rancher Mike Calicrate, together with HSUS and a few other groups, filed suit against CBB, NCBA, and the Secretary of Agriculture, alleging the mandatory $1-per-head assessment on all cattle sold in the U.S. and import equivalents collected by CBB were being misused to lobby government officials. By law, checkoff funds are required to go to research and promotion of a product, not influencing governmental decisions.

At the beginning of 2013, Calicrate’s original lawyers removed themselves from the case citing conflict of interest. Calicrate claimed their departure was unwarranted, speculated they’d been bullied into stepping out, and vowed to keep up the fight. That did not last long as the case petered out in early 2013.

HSUS and similarly-minded producers have tried similar attacks on other checkoff collector/checkoff contractor relationships, such as in December of 2012 when the animal rights group contended Pork Checkoff—collected by the National Pork Board— had been inappropriately transferred to the National Pork Producer’s Council—the primary public policy outreach group for pork—via the sale of the “Pork; the other white meat” slogan. That lawsuit was dismissed last October.

Despite occasional litigative accusations of this type, the operation of the Beef Checkoff by CBB and CBB’s interactions with NCBA have often been reviewed and thus far come out as above board.

“I would say that [cattle producers] can feel confident that their hard-earned checkoff dollars are being invested with the utmost care and integrity,” concluded Maxey. — Kerry Halladay, WLJ Editor