NCBA agrees to pay back $217,000 to Beef Checkoff Program


SALEM, Ohio — The National Cattlemen’s Beef Association has formalized a resolution to issues raised in an audit brought forth by the Cattlemen’s Beef Board last July.

The resolution calls for the NCBA to pay back $217,000 for discrepancies involving how money from the beef checkoff program was spent.

The audit covered the fiscal years 2008, 2009 and through February 2010.

Some of the issues raised in July included: how employees time is recorded, travel costs and other expenses charged to the program.

Travel expenses

One example noted in the audit are travel expenses charged for a trip to New Zealand and Texas.

• A senior staff member expensed travel costs totaling $3,592 related to his spouse’s travel to New Zealand for the Five Nations Beef Conference.

It also noted his spouse and child’s travel to San Antonio, Texas, were charged to the overhead cost pool.

According to the audit’s findings, since these expenses relate to the spouse and child, the expenses should be recorded to the policy division. Checkoff funds cannot be used for spouse’s travel per the Agriculture Marketing Service guidelines.

The NCBA pointed out in its response that the employee’s employment agreement provides for the spouse to travel to two industry meetings per year. The terms of the employment agreement will be revised so that the trips will not be charged to the checkoff division. It acknowledged that mistakes were made during process of the child’s travel and will be corrected.

The changes will result in a credit to the checkoff division of approximately $2,500.

In the future, the CBB will be issuing guidelines to contractors related to the reimbursement of expenses for spouses.

Recording employee time

Another item noted in the audit was in regards to how employees record and charge time.

• Three employees attended the NCBA Charity Golf Tournament. One employee coded his/her time entirely to the checkoff program, one coded time to the federation, and one coded time to the overhead cost pool. (September 2008)

The NCBA explained this event raises money for charities that honor NCBA employees who have died of cancer and a charity that supports disabled farmers and ranchers. Key checkoff customers/vendors participate in the NCBA Charity Golf Tournament.

The staff participates to support the charities and develop relationships for checkoff work. The NCBA believes the time was charged appropriately.

The resolution found that checkoff dollars cannot be used to fund charities unless the funding relates directly to a checkoff-eligible activity.

NCBA will reclassify all of the checkoff time NCBA employees’ spent on this event during fiscal year 2008 and fiscal year 2009, which do not clearly relate to approved expenses.

Future treatment: Checkoff dollars will not be used to fund time or expenses associated with this event unless NCBA can clearly demonstrate that an employee’s time relates to approved expense. This relationship will be clearly and completely documented by NCBA if applicable.

Other issues

These two issues were not the only items raised in the audit. There were issues raised over how salaries were paid and from what funding sources were used.

Another items raised in the audit was how credit cards are used by the NCBA. There were two items in particular that raised eyebrows. One charge was for $10,227 dated Feb. 9, 2009, and another July 3, 2009, with a charge of $2,291.

The NCBA reported tracks credit card fees for the summer and winter conference fees. As NCBA does not track the project code for the remaining credit charges, the auditors were unable to determine of the coding for the credit card fees were proper.

Because of a lack of detailed information, NCBA agreed that an adjustment of credit card fees will be estimated and recorded for the fiscal years 2008, 2009 and 2010 based on the information available in NCBA’s records.

In the future, NCBA will implement changes to ensure the information needed to code credit card fees to the appropriate project and fund sources is supplied.

In the end, the audit and resolution agreed to is that for funds to be used from the beef checkoff program, criteria has to be met according to the regulations and laws. In some instances, the funding for travel expenses, meal costs, dues for organizations, will need to be paid from several sources of funding and not just the Beef Checkoff program.


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