Think twice before spending extra money on Organic Products.
Oversight of the National Organic Program
U.S. Department of Agriculture
Office of Inspector General
DATE: March 9, 2010
This report presents the results of our audit of the National Organic Program. Your response to the official draft report, dated February 25, 2010, is included as exhibit B. Excerpts of your response and the Office of Inspector General’s (OIG) position are incorporated into the Findings and Recommendations section of the report. Based on your response, we have reached management decisions on all of the report’s 14 recommendations, and no further response to us is necessary. Please follow your agency’s internal procedures in forwarding documentation for final action to the Office of the Chief Financial Officer.
We appreciate the courtesies and cooperation extended to us by members of your staff during this audit.
Results in Brief
We conducted this audit to assess the effectiveness of the Agricultural Marketing Service’s (AMS) corrective actions implemented in response to our prior audit
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1 of the National Organic Program (NOP). We also conducted this audit because of the size and growth of the organic industry as well as the public’s increased interest in purchasing organic products. In 2008, the organic industry had sales of $24.6 billion and had grown between 14 and 21 percent annually over the past decade. The NOP, created in October 2002, has the responsibility to assure consumers that organic products meet uniform standards and that they are appropriately labeled. NOP regulations require that agricultural products labeled as organic originate from farms or handling operations certified by a State or private entity that has been accredited by the U.S. Department of Agriculture (USDA).
In our prior audit, we reported that AMS had not (1) established protocols for working with the National Organic Standards Board2 (Board) or resolving conflicts with them, or (2) fully developed internal operating procedures, particularly for resolving complaints and investigations and for providing guidance to certifying agents and their organic operators to ensure consistency in implementing program requirements. We found that AMS officials made improvements to the program since our prior audit, and implemented corrective actions for 8 of the 10 recommendations issued in our prior audit report (see Exhibit A). Members of the Board stated that AMS’ implementation of the protocol for resolving conflicts with the Board had improved the relationship between the Board and AMS. In addition, during our audit, NOP officials completed restructuring their complaint handling process and established procedures for receiving, tracking, and processing complaints. These officials stated they secured additional funding which, in part, enabled them to implement the structural and operational changes to improve the program.
However, we believe that NOP officials need to further improve program administration and strengthen their management controls to ensure more effective enforcement of program requirements when serious violations, including operations that market product as organic while under suspension, are found. In addition, they need to strengthen their oversight of certifying agents and organic operations to ensure that organic products are consistently and uniformly meeting NOP standards.
We found that NOP officials need to improve their enforcement of program regulations and their resolution of complaints, as noted in our prior report. NOP officials did not have adequate procedures or a system for tracking the receipt, review, and disposition of complaints and any subsequent enforcement actions. We identified the following:
Between January 2006 and February 2008, AMS’ Compliance and Analysis Program provided the results of its investigations of five certified organic operations to NOP. Although AMS recommended that NOP officials take enforcement actions against these operations, we found that NOP did not respond to these in a timely or effective manner. In addition, in those cases where enforcement actions were issued, NOP did not monitor the organic operations to ensure compliance with those actions. As a result, NOP never issued the recommended enforcement action against one of the five organic operations, one that improperly marketed nonorganic mint under USDA’s organic label for 2 years; in the other four cases, the enforcement actions took between 7 and 32 months to issue. During this time the operations continued to improperly market their products as certified organic. One of these four, even after signing a compliance agreement
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3 that it would not apply for and receive organic certification for a period of 5 years, continued to market its product as organic without AMS’ knowledge.
NOP officials did not resolve 19 of 41 program complaints4 within a reasonable timeframe for cases opened since 2004. These 19 complaints went unresolved for an average of about 3 years. In January 2009 we brought this condition to the attention of management officials. They stated they were unaware of the status of the unresolved complaints. At this time they began to take action on the unresolved complaints. As of June 2009, we found that NOP had resolved 13 of the 19 complaints.
We also noted that NOP officials need to address ongoing issues with California’s State Organic Program (SOP). The Act allows any State to apply to the Secretary to implement a program for regulating organic products produced and handled within that State. The State must have compliance, mediation, and appeal procedures that meet NOP regulations to become an SOP. When officials of the California Department of Food and Agriculture applied to have an approved SOP, they did not have the required compliance and enforcement procedures in place. NOP officials approved California’s program because they wanted to allow California the opportunity to operate and develop procedures as they progressed. California has the most organic acreage in the country, with over 2,000 certified organic operations and organic product sales of over $1.8 billion in 2007. Although NOP officials believed that the State would address these issues following its initial approval, they discovered in a 2005 review that the California SOP continued to lack these required procedures. NOP officials have continued to work with California officials to comply with program requirements; however, as of November 2009, the procedures have yet to be finalized. As a result, the California SOP is not equipped to properly enforce the requirements of the NOP.
Although the Organic Foods Production Act5 of 1990 requires certifying agents to conduct periodic residue testing6 of organic products, we found that NOP officials did not incorporate these provisions into NOP regulations. None of the four certifying agents we visited conducted periodic residue testing of the approximately 5,000 certified operations for which they were responsible, and there is no assurance that certifying agents performed regular periodic testing at any of the approximately 28,000 certified organic operations worldwide. Without such testing,
A compliance agreement is an enforcement action accepted by all parties that brings an operation into compliance with NOP regulations.
NOP-related complaints can result in enforcement actions against certifying agents and/or organic operations.
Section 2107(a) (6).
This testing determines whether agricultural products contain any residues of pesticides, or of nonorganic or natural toxicants.
Get the Full Results Here: http://www.cornucopia.org/USDA/OIG_AuditofNOP.pdf