By RICK A. RICHARDS
Indiana Correspondent

BILLINGS, Mont. — Two organizations that represent the nation’s cattle industry find themselves at odds over policy and spending priorities that has led to an audit that has forced an accounting revision of how some $216,000 in beef checkoff funds were spent.

The Ranchers-Cattlemen Action Legal Fund, better known as R-CALF, challenged the financial recordkeeping and spending of the National Cattlemen’s Beef Assoc. (NCBA) and the Cattlemen’s Beef Board (CBB), the organization set up by NCBA to manage checkoff money for the industry.

Checkoff money, which is paid on every head of cattle sold under a federal program, can only be used for marketing, promotion, research and education programs. However, R-CALF maintains that checkoff money was used by some NCBA officials to pay for trips, restaurant expenses and airfare. Specifically, R-CALF charges the money was spent to lobby politicians and others in the cattle business, an activity strictly prohibited by the U.S. Department of Agriculture.
Bill Bullard, chief executive officer of R-CALF, and a former cattle rancher in Perkins County, S.D., was blunt in his comments about the $216,000 of allegedly misused checkoff funds spent by NCBA. The total includes $12,477 from 2008; $89,716 from 2009; and $114,751 from 2010.

“We think this is unacceptable. There is clear evidence that the program needs to be suspended until a thorough examination is completed,” said Bullard.
He said R-CALF has asked the U.S. Department of Agriculture to conduct a more extensive audit of the CBB and NCBA to determine if the financial firewall that is to exist between the two organizations has been breached.

“It’s fundamentally wrong to administer a checkoff program in this way,” said Bullard. “We view this as an extremely serious matter.”

In a letter to Agriculture Secretary Tom Vilsack, Attorney General Eric Holder and USDA Inspector General Phyllis Fong, R-CALF and 28 other organizations ask that all checkoff accounts managed by NCBA to be frozen; that the checkoff contract between NCBA and the CBB be suspended; and that a full audit covering at least the past five years of both organizations be conducted.
“We respectfully request that USDA take the immediate, decisive actions we recommend to protect against the misuse of the National Beef Checkoff Program,” concludes the letter. “The hard-working men and women involved in the U.S. cattle industry and who annually make their mandatory financial contributions to the National Beef Checkoff Program deserve no less.”

Bullard admits R-CALF and NCBA are rivals on many political issues in Washington, but said that has nothing to do with the organization’s calls for an audit of the checkoff program. R-CALF emphasized that its member-base is comprised solely of cattlemen and ranchers, while NCBA’s members include not only cattlemen, but also meat packers and processors and others affiliated with the industry.

Meanwhile, Mike Deering, a spokesman for the NCBA in Washington, said the organization disagrees with the way it is being portrayed by R-CALF.
“The audit found nothing out of the norm,” said Deering. “They allege that we spent checkoff dollars on lobbying issues, but there have been no accusations of fraud from the USDA.”

Deering explained that many of the charges made by R-CALF were found to be nothing more than financial entries in the checkoff ledger that were wrongly categorized among more than 8,000 accounting codes. Once those errors were pointed out, Deering said they were corrected and the NCBA’s books are now in order.

For instance, $4,014 is to be paid to the CCB from the NCBA the participation of three staffers at a charity golf tournament. The money spent by the NCBA was incorrectly cataloged and the amount was ordered transferred to the CCB account.

In another instance, $3,592 was spent for the wife of a spouse to travel to New Zealand for the Five Nations Beef Conference and for his wife and child to travel to San Antonio, Texas. That money was ordered returned to the CBB account.

In a 23-page document outlining resolutions between the CBB and USDA, dollar amounts ranging from $125 to more than $10,000 were reviewed. The money was described as either “not adequately documented” or as being recorded in the wrong accounting category.

At the same time, Forrest Roberts, CEO of NCBA, issued a statement about the audit. “We appreciate the (USDA’s) rapid response and approval of the agreed-upon-procedures review. For nearly 24 years the National Cattlemen’s Beef Assoc. and its predecessor organizations have successfully served as a contractor for the Beef Checkoff Program,” said Roberts, adding that in that time compliance reviews have been routinely held to make sure checkoff money is properly spent.

“Historically, audits have discrepancies,” said Roberts. “The adjustments have always been done in a professional manner with no motive other than doing the best possible work we can for U.S. cattle producers. We are committed to doing this right. Where mistakes were made, they have been fixed, as they always have been. We are accountable to cattle producers and we take this obligation and honor very, very seriously.”

Roberts maintained in his statement, “Not one penny of the amount in question is related to the firewall between lobbying activities in Washington, D.C., and the checkoff.”

As a result of the USDA audit, Roberts says the NCBA now has new administrative guidelines that will help the organization minimize the possibility of mistakes in the future. “It’s time to get this review behind us and continue to focus on the business of building a sustainable future for the U.S. beef industry.”