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Detailed Information on the
Packers and Stockyards Assessment

Program Code 10003032
Program Title Packers and Stockyards
Department Name Department of Agriculture
Agency/Bureau Name Grain Inspection, Packers and Stockyards Administration
Program Type(s) Regulatory-based Program
Assessment Year 2006
Assessment Rating Results Not Demonstrated
Assessment Section Scores
Section Score
Program Purpose & Design 60%
Strategic Planning 11%
Program Management 60%
Program Results/Accountability 6%
Program Funding Level
(in millions)
FY2007 $20
FY2008 $21
FY2009 $25

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments
2006

Develop baseline data that is in compliance with revised agency directives for defining agency regulatory actions and investigations.

Action taken, but not completed The agency has been collecting baseline data through FY 2007 and is implementing an improved automated tracking system.
2006

Develop a long-term outcome measure that focuses on improving trade practices within the industry.

Action taken, but not completed The agency is been statistically sampling voluntary compliance rates with critical requirements of the Packers and Stockyards Act. Upon completion of data analysis, the agency will seek OMB approval of the measure.

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments
2006

Conduct business process re-engineering to improve internal controls.

Completed

Program Performance Measures

Term Type  
Long-term Outcome

Measure: Enhance competitiveness of the market by reducing the percent of repeat violations of the Packers and Stockyards Act.


Explanation:Grain Inspection, Packers and Stockyards Administration focuses resources on regulated entities that it previously provided "notice and opportunity" to bring their operations into compliance with the Packers and Stockyards Act.

Year Target Actual
2004 16.0% 16.0%
2005 14.0% 20.0%
2006 18.0% 13.8%
2007 13.0% 13.0%
2008 12.0%
2009 11.0%
2010 10.5%
2011 10.0%
2012 9.8%
Long-term Efficiency

Measure: Decrease average cost of investigations and regulatory activities.


Explanation:Grain Inspection, Packers and Stockyards Administration will work to decrease the average cost of investigations and regulatory activities. Average cost is based the total cost (includes the direct activity cost plus an indirect overhead charge) divided by the total number of investigations and regulatory activities (e.g. scale weight reviews, custodial account audits, and new market compliance reviews). Competition investigations that are exceedingly complex and involve multi-year expenses will be excluded from cost projections.

Year Target Actual
2004 . $8,657
2005 . $8,056
2006 $7,700 $8,043
2007 $7,700 $6,606
2008 $6,500
2009 $6,400
2010 $6,300
2011 $6,200
2012 $6,000
Annual Output

Measure: Increase percent information provided to the public and market participants on the requirements and protections under the Packers and Stockyards Act.


Explanation:The percent of actual outreach activities to the targeted number of outreach activities that provide information to the public and market participants on the requirements and protections under the Packers and Stockyards Act.

Year Target Actual
2004 60.0% 60.0%
2005 65.0% 66.0%
2006 70.0% 100%
2007 100.0% 100%
2008 100.0%
2009 100.0%
Annual Output

Measure: Regulate market participants to ensure financial protection under the Packers and Stockyards Act.


Explanation:The percent of bond coverage carried by entities at risk to the livestock sellers capital at risk for markets.

Year Target Actual
2004 61.0% 61.0%
2005 61.0% 61.0%
2006 61.0% 62.0%
2007 63.0% 63.0%
2008 63.0%
2009 63.0%
Annual Output

Measure: Percent of identified violations followed up within 90 days.


Explanation:Increase the percentage of violations of the Packers and Stockyards Act followed up within 90 days, following the 30 day grace period.

Year Target Actual
2004 38.0% 35.0%
2005 38.0% 38.0%
2006 46.0% 37.0%
2007 46.0% 48%
2008 50.0%
2009 60.0%

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score
1.1

Is the program purpose clear?

Explanation: The purpose of the Packers and Stockyards Program is to assure fair competition and fair trade practices; to safeguard farmers and ranchers; to protect consumers; and, to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.

Evidence: GIPSA's Packers and Stockyards Program is responsible for enforcing the Packers and Stockyards Act, 1921 (the Act), as amended (7 U.S.C. 181, et seq.), and the regulations promulgated under the P&S Act in Title 9 CFR Part 200 of the Code of Federal Regulations.

YES 20%
1.2

Does the program address a specific and existing problem, interest, or need?

Explanation: The P&S Act offers livestock producers and poultry growers' financial protection in the event they are not compensated promptly or fairly for their commodities. In addition, the structure of these industries places considerable market power in the hands of several large corporations over producers and growers. The Act provides protection against unfair, discriminatory and anti-competitive practices by those individuals and companies subject to regulation. To maintain a "Yes" please provide a more detailed explanation of the protections offered to producers under the P&S Act.

Evidence: PART guidance states that a "Yes" answer needs to clearly explain and provide evidence of each of the following: a relevant and clearly defined interest, problem or need exists that the program is clearly designed to address; and, the program purpose is still relevant to current conditions (i.e., that the problem the program was created to address still exists). Consideration should include, for example, whether the program addresses a specific market failure. To maintain a "Yes" the program needs to clearly define the problem that exists in the livestock industry and how The Act is designed to address this problem. Please also cite specific evidence that identifies an existing problem.

YES 20%
1.3

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: GIPSA regulates livestock and meat marketing issues involving business transactions across State lines. GIPSA cooperates with State and local agencies to promote common interests, but GIPSA has sole responsibility and authority to ensure consistent and uniform compliance with statutory mandates. At the Federal level, the Department of Justice (DOJ) has anti-trust authority, whereas the P&S Act is broader including provisions for payment protections to livestock sellers and trade practice provisions such as determining and enforcing scale accuracy for livestock weighing. The Federal Trade Commission's (FTC) authority does not cover entities included under the jurisdiction of the P&SP Act. GIPSA works with DOJ and FTC to promote common interests and to ensure that GIPSA meets its mandated responsibilities while avoiding duplication of activities.

Evidence: The P&S Act, as amended and supplemented (7 USC 181 et. seq.). The Act identifies unique authorities and responsibilities to the Secretary with provisions that explicitly avoids duplication of DOJ and FTC responsibilities for trade practices and competition in other segments of the national economy (7 USC 225-227). State and local agencies that address trade practice and competition concerns can not provide the uniform nationwide regulation of interstate commerce in the livestock and meat industries that is provided by GIPSA. GIPSA has Memorandum of Understandings (MOU) with DOJ, FTC, and many State agencies and cooperates with them to promote shared interests. To maintain a "Yes" please cite the major MOU documents, including the effective dates for each. As an example, when DOJ reviews mergers in the livestock, meatpacking, and poultry industries, GIPSA frequently lends its industry expertise in those reviews.

YES 20%
1.4

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: A recent USDA OIG audit found that the Packers and Stockyards Program lacked an organizational structure that appropriately divided responsibility for approving work plans, managing investigations, and reporting results between Regional Managers and the Deputy Administrator. In response to the audit findings, GIPSA developed - and is in the process of implementing - a revised organizational structure that appropriately divides responsibility for approving work plans, managing investigations, and reporting results.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy). PART Guidance states that a "Yes" answer needs to clearly explain and provide evidence of each of the following: the program is free from major design flaws that prevent it from meeting its defined objectives and performance goals, and there is no strong evidence that another approach or mechanism would be more efficient or effective to achieve the intended purpose.

NO 0%
1.5

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: A recent USDA OIG audit found that GIPSA needs to develop and implement a well defined process for timely identifying work to be performed, preparing and approving work plans, performing the fieldwork and analysis, and reporting on the results. This should include controls for conducting preliminary investigations to obtain sufficient facts to decide whether to proceed with further investigation. This recommendation highlights that GIPSA's current process is insufficient in adjusting investigative and regulatory priorities. In addition, the audit found that GIPSA needed to develop and implement a process for reviewing investigative findings and monitoring industry activity to determine if regulatory reforms are needed.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy).

NO 0%
Section 1 - Program Purpose & Design Score 60%
Section 2 - Strategic Planning
Number Question Answer Score
2.1

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: GIPSA has developed one long-term performance measure: reducing the number of repeat violations of the Packers and Stockyards Act. Reducing the percentage of repeat violations of the P&S Act is an important measure of effectiveness over the long-term. To improve upon the measure, GIPSA should consider more ambitious baselines and targets and more clearly define what constitutes an investigation versus routine administrative actions. In addition, the agency should develop additional long-term outcome measures. Recent OIG audit findings indicate that GIPSA lacked a standard definition of what constitutes an investigation and how that is differentiated from routine administrative matters. Additionally, records in the Agency's tracking system were found to be incomplete and the system lacked procedures for validating required information. These serious findings call in question the accuracy of GIPSA's current measure.

Evidence: PART guidance states that a "Yes" answer needs to clearly explain and provide evidence of the following: the program must have about two or three specific, easily understood long-term outcome measures that directly and meaningfully support the program's purpose. "Long-term" means a long period relative to the nature of the program, likely 5 years.

NO 0%
2.2

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: GIPSA's success in achieving its long-term objective has recently fallen, as evidenced by an increase of four percent in repeat violations from 2004 to 2005. Once the program has developed acceptable definitions of routine actions, regulatory actions and investigations, ambitious baselines and targets can be established to measure progress towards long-term goals. Additionally, GIPSA should develop separate efficiency measures that track the time (# of days) and cost (administrative $ cost) of pursuing repeat violations.

Evidence: PART guidance states that if the program received a "No" in Question 2.1, the program must get a "No" for this question.

NO 0%
2.3

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program's annual performance measures are the: 1.) percentage of actual outreach activities to targeted number of outreach activities that provide information to market participants on the Packers and Stockyards Act; 2.) percentage of bond coverage carried by entities at risk to the livestock sellers capital; and 3.) percentage of identified violations followed-up within 120 days (90 days, following the 30 day grace period) of written notification to regulated entity. As currently submitted two of the program's annual measures are not acceptable and the third requires additional explanation/clarification. Tracking the actual outreach activities to a targeted number is an internal management measure useful for program operations, but does not provide an indication the effect of education or outreach activities. Bond coverage - if deemed a requirement for participation in livestock market transactions - is not an acceptable outcome. Finally, as mentioned in relation to the program's long-term measure, compliance rates are important indications of the program's effectiveness, but the compliance measure should be defined more clearly (i.e., Does the agency follow-up on all violations within 90 days and what action is taken for repeat offenders?).

Evidence: According to PART guidance, a "Yes" answer requires all of the following: a limited number of discrete, quantifiable, and measurable annual performance measures have been established for the program and these measures adequately demonstrate the program's progress toward reaching the long-term goals evaluated in Questions 2.1 and 2.2.

NO 0%
2.4

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The baselines and targets that correspond to the program's annual measures either: correspond to internal indications of program management, require further development and definition or are not sufficiently ambitious and do not provide an acceptable measure of improved program performance.

Evidence: According to PART guidance, because the program received a "No" in question 2.3, it must receive a "No" in response to question 2.4.

NO 0%
2.5

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: GIPSA works with other USDA agencies (such as ERS), other Federal government agencies (such as DOJ and FTC), and State agencies on issues that contribute toward GIPSA's long-term goal of promoting fair and competitive marketing in the livestock, meat, and poultry industries. GIPSA has Memorandum of Understandings (MOU) with Department of Justice (DOJ), the Federal Trade Commission (FTC), and many state agencies and cooperates with them to promote shared interests. Currently, GIPSA has contracted with RTI, International to conduct a Congressionally-mandated study of marketing arrangements in the livestock industry. It is important to note that since receiving the funding for the study GIPSA has consistently been delayed in meeting deliverables and is behind schedule in releasing the findings of the study.

Evidence: Joint GIPSA/DOJ/FTC Memorandum of Understanding, "Cooperation with Respect to Monitoring Competitive Conditions in the Agricultural Marketplace" dated August 31, 1999. PART guidance states that if a program receives a "No" for question 2.1 and 2.3, then it must receive a "No" for question 2.5.

NO 0%
2.6

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Currently, no internal review function exists to monitor and report on agency activities. A recently completed audit by USDA OIG found that GIPSA needed to develop and implement an internal review function to monitor and report on Agency activities. This should include the implementation of controls to monitor and report on corrective actions agreed upon with entities external to GIPSA, such as USDA OIG and the Government Accountability Office (GAO). The agency responds that an assessment of personnel assigned to internal review functions will be undertaken to determine if the potential exists to improve GIPSA reporting functions for the USDA OIG and GAO recommendations. This response highlights a slow response to audit findings of internal management control and agency organizational problems.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy).

NO 0%
2.7

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: As indicated in Questions 2.1 and 2.3, the program currently lacks appropriate annual and long-term performance goals. Further, the agency does not present the program's budget request in a way that makes it clear what the impact of future funding decisions would be on the performance of the program. GIPSA is in the process of more closely integrating budgets with performance planning. In FY 2007, GIPSA requested $890,000 for a sweeping, multi-year project to improve program operations and service to the public by upgrading its information systems and modernizing business functions. Currently, GIPSA's information management consists of several independent systems that have served specific purposes over the years, but are not integrated. This has limited the Agency's ability to meet the growing demand for electronic, or web-based service delivery. It also impedes the Agency's efforts to improve the cost effectiveness and efficiency of internal business practices.

Evidence: FY 2006 Explanatory Notes. To receive a "Yes" PART guidance requires that the program must have effective budgeting in place that defines the relationship between 1) annual and long-term performance targets and 2) budget resources. Currently, the program lacks an integrated budget and performance presentation that makes clear the impact of funding, policy, or legislative decisions on expected performance.

NO 0%
2.8

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: It is difficult to assess how effective the program has been at making progress toward its underlying purposes as evidenced by recent audit findings and the program's current performance measures. In addition, in FY 2004, USDA conducted internal reviews of each agency's strategic plan and rated GIPSA's strategic plan as "Needs Work," with performance measures cited as an area for improvement. In response to this review GIPSA recently revised its strategic plan to set improved baselines and develop better long term and annual measures. Details regarding the revisions to the strategic plan, how they relate to correcting deficiencies found through the audit process and how they relate to improved performance measures remain unclear.

Evidence: PART guidance states that a "Yes" requires the program to provide evidence that demonstrates action taken to develop of a limited number of specific, ambitious annual and long-term performance measures that demonstrate progress toward achieving long-term goals.

NO 0%
2.RG1

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: GIPSA has authority to issue regulations necessary to carry out the provisions of the P&S Act. Existing regulations set forth requirements for registering to do business subject to the Act, filing schedules of rates and charges, maintaining adequate bond coverage, issuing timely payment to livestock sellers, proper maintenance and use of livestock and poultry scales, and record keeping. These regulations promote fair and competitive marketing in livestock, meat and poultry. The most recent regulation promulgated by the agency was issued in 2003 in with regard to the Swine Contract Library. All future regulation changes, including new and amended regulations, will clearly indicate their contribution to the programs goals.

Evidence: 68 FR 47826, Swine Contract Library Final Rule, includes references to Executive Order 12988, Paperwork Reduction Act and GPEA compliance, Aug. 11, 2003.- Swine Contract Library regulations, 9 CFR 206 1-3.

YES 11%
Section 2 - Strategic Planning Score 11%
Section 3 - Program Management
Number Question Answer Score
3.1

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: A recently completed audit by USDA OIG found that GIPSA needed to develop and implement procedures for recording data in the Agency's Complaints and Investigations (C&I) log. These procedures should specify what information should be recorded and how the accuracy and completeness of this information will be validated. GIPSA is developing such procedures, including revisions to the C&I log software. The procedures are based on the definition of an investigation and the distinction of GIPSA activities related to regulatory compliance reviews (such as financial reviews of annual reports for bond requirements and scale checking), and monitoring activities (such as hog market price monitoring and fed cattle market price monitoring activities). Procedures developed will be contained within a C&I log users manual and include the information required for purposes of ensuring complete entries by C&I log users. Periodic audit validation checks will be conducted and reported by headquarters staff from the Regional Operations Division. GIPSA will consult with other governmental regulatory agencies to determine what types of software they are using to assess if there are other software tools to support the tracking functions related to investigations, policy guidance requests, and regulatory and rule making activities.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy).

NO 0%
3.2

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: A recent OIG audit titled, "GIPSA's Management and Oversight of the Packers and Stockyards Programs" contained 10 recommendations relating to deficiencies including: inaccurate and incomplete tracking systems, inadequate processes for managing investigations, policy decisions not being made, and previous audit findings designed to strengthen program operations not being fully implemented. These wide-ranging findings affecting several different aspects of the P&S program highlight the lack of accountability among program management for performance and results. Although GIPSA's managers are rated annually by performance standards that align with goals and objectives contained in the Agency's strategic plan, it is difficult to determine the practical affect on program performance. Credit for this - and other - questions relating to management weaknesses found in the audit will be possible once the agency has implemented changes and can demonstrate improved performance. GIPSA staff oversee the performance of private contractors to ensure project efficiency. Performance checks include regular meetings with the contractors and senior project personnel to review the tasks on the project plan, required progress reports, and either independent peer review or testing of final products, as appropriate.

Evidence: PART guidance states that a "Yes" answer should clearly explain and provide evidence of each of the following: the program identifies the managers who are responsible for achieving key program results and establishes clearly defined or quantifiable performance standards and accountability for those managers.

NO 0%
3.3

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: GIPSA uses the National Finance Center's (NFC) Financial Foundation Information System (FFIS) to obligate funds in a timely manner with strict accountability. GIPSA's budget staff and program managers collaborate throughout the year to ensure that spending estimates are accurate. The agency has made no erroneous payments nor was in violation of the Anti-Deficiency Act. In FY 2004 GIPSA and APHIS financial staff (with whom GIPSA contracts for financial services) conducted an exhaustive research of a potential ADA violations cited by the Office of the General Counsel (OGC). The research identified an erroneous reversal of a general ledger entry during conversion to the new FFIS system. Corrective actions were taken making sufficient funds available during the fiscal years in question.

Evidence: GIPSA budget staff prepares monthly spending reports for all program and administrative managers. These reports track actual spending against allocations which are developed based on appropriations, committee report language, Administration and Agency priorities and program needs. Allocations are provided to all managers at the beginning of the fiscal year and managers are held accountable for operating within the resources available to them.

YES 10%
3.4

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: GIPSA is in the process of a multi-year project to improve program operations and service to the public by upgrading its information systems and modernizing business functions. GIPSA's current information management system consists of several independent systems that have served specific purposes over the years, but are not integrated. This limits the Agency's ability to meet the growing demand for electronic, or web-based service delivery. It also impedes the Agency's efforts to improve the cost effectiveness and efficiency of our internal business practices. The enterprise-wide system currently under development will modernize nearly every aspect of GIPSA operations and provide a great opportunity to improve current business practices and service delivery.

Evidence: The agency receives a "Yes" in response to this question even though these efforts are ongoing and have not been fully implemented, in recognition of the work that the agency is taking to modernize its business delivery systems. The deployment of a new information management system between 2005 and 2009, the re-engineering of business processes, and the consolidation of organizational structures allow GIPSA to achieve efficiencies and cost effectiveness in program execution. Has GIPSA prepared an IT business case for its modernization plan? If so, please cite this document as evidence.

YES 10%
3.5

Does the program collaborate and coordinate effectively with related programs?

Explanation: In fulfilling its mission, GIPSA collaborates and coordinates with related programs including: Federal entities, other USDA agencies, state Departments of Agriculture, international governments, and private sector partners.

Evidence: 1.) Joint GIPSA/DOJ/FTC Memorandum of Understanding (MOU), "Cooperation with Respect to Monitoring Competitive Conditions in the Agricultural Marketplace" dated August 31, 1999. 2.) GIPSA also has MOU with a number of State agencies. 3.) GIPSA uses data from the AMS Livestock Mandatory Price Reporting program to assist in the program's monitoring of livestock transactions in the marketplace. 4.) USDA's Economic Research Service reviewed the program's market monitoring procedures in the report, "Price Monitoring in Fed Cattle Markets, May 5, 2005". 5.) GIPSA obtains yearly slaughter data from the Food Safety Inspection Service through the National Agricultural Statistics Service (NASS). 6.) NASS provides a yearly training on protecting confidential data and all P&SP employees sign the NASS agreement.

YES 10%
3.6

Does the program use strong financial management practices?

Explanation: GIPSA utilizes USDA's Foundation Financial Information System (FFIS) to process and manage all financial transactions to meet stringent budget and funds control requirements. The Agency uses FFIS data to provide detailed status of funds reports to program managers on a monthly basis in accordance with the Agency's established financial management Directive. The FFIS data used to prepare these reports is available 1-2 days following the close of the calendar month. The reports utilize this data to track actual spending against allocations and forecast end-of-year spending based on current spending rates and planned commitments. The Federal Financial Management Improvement Act established a statutory requirement for agency heads to assess, on an annual basis, whether their financial management systems comply with Federal financial management system requirements and applicable Federal accounting standards. The agency Financial Management Director certified that the GIPSA financial management system is in compliance with this Act. GIPSA reviews, on a monthly basis, certification of disbursements (payments), obligations (spending), and management accountability for all allocated funds. To minimize erroneous payments, the Agency established a policy requiring that all fund holders review and certify financial disbursement reports on a monthly basis.

Evidence: Please cite as evidence, agency planning and guidance documents that describe agency financial management requirements.

YES 10%
3.7

Has the program taken meaningful steps to address its management deficiencies?

Explanation: In response to recent audit findings, GIPSA has begun to take the initial steps toward addressing management deficiencies. GIPSA issued three directives concurrent with the release of the OIG audit findings. These directives deal with the role of legal specialists and consultation with USDA's Office of General Counsel, compliance and monitoring procedures during investigations, and management responsibility during investigations (Regional Management, Division Directors and the Deputy Administrator). Additionally, a staff economist has been assigned to a four-month detail at DOJ to learn investigative techniques that may be applied to program investigations. In FY 2002 and 2003, GIPSA identified deficiencies with the Agency's financial management system. GIPSA acted quickly to improve its financial management system by instituting new controls, changing financial managers, and acquiring assistance from other USDA agencies. GIPSA also identified the need to modernize its' current information technology structure and aid the Agency in realizing improvements and efficiencies. In response, GIPSA hired a contractor to develop an enterprise-wide architecture to integrate data and business processes. GIPSA then established an Enterprise Architecture Program Management Office and hired a manager, and is now developing and deploying the enterprise architecture. During FY 2004, GIPSA recognized deficiencies in its debt management program and signed an agreement to leverage the resources of the Animal and Plant Health Inspection Service to help rectify these deficiencies.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy). Agency Directives: Legal Specialists and OGC Consultation, Directive P&SP 9700.1; Investigations, Compliance and Monitoring, Directive P&SP 9700.2; and Investigation Responsibilities for the Regional Mangers, Division Directors, and the Deputy Administrator, Directive P&SP 9700.3. More recent directives completed to satisfy aspects of the OIG recommendations include: Developing Program Policies, Directive P&SP 9700.13 (3/3/06), Management of Investigations, Directive P&SP 9700.20 (3/20/06), Communication Responsibilities of Investigative Process, P&SP 9700.19 (3/31/06), and Determining Needed Regulatory Reform, P&SP 9700.13 (3/31/06).

YES 10%
3.RG1

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: In the two rulemakings that GIPSA has finalized in the last ten years, the agency has responded to comments as required by law. However, the agency does not regularly seek formal input from the public through the federal register in the form of requests for comments or advanced notices of proposed rulemakings. Instead, GIPSA maintains a dialogue with the industry through non-regulatory processes such as outreach activities including presentations at industry sponsored meetings, meetings with industry representatives at the program's Washington, DC headquarters offices, public meetings and by responding to written inquiries from interested parties.

Evidence: PART guidance states that a "Yes" requires that the program solicit the opinions of affected parties on significant regulations and thoroughly evaluate the concerns and suggestions raised by these entities. While GIPSA does seek public comment as required through the paperwork clearance process, the agency does not indicate that it has used these public comments to inform future rulemaking.

NO 0%
3.RG2

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: Requirements in existence at the time regulations were issued were met.

Evidence: The Swine Contract Library Rule (68 FR 47802 - 47829) was determined to be significant for the purposes of Executive Order 12866, and was reviewed by the Office of Management and Budget. A separate regulatory impact statement was prepared. The agency determined that the rule would not have a significant economic impact on a substantial number of small entities as defined in the Regulatory Flexibility Act. The Feed Weighing Final Rule (65 FR 17758 - 17763) was determined to be significant for the purposes of Executive Order 12866, and was reviewed by the Office of Management and Budget. An economic analysis of the rule included a cost-benefit analysis and a regulatory flexibility analysis of the potential economic effects on small entities as required by the Regulatory Flexibility Act.

YES 10%
3.RG4

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: Regulations are designed within the limits of authority granted the Secretary under the P&S Act. Regulations issued in past years were designed to comply with statutory requirements and minimize burden on certain industry segments, but it is not known whether this regulatory activity maximized net benefits because of the narrow scope of regulatory analysis. The livestock, meat and poultry industries are dynamic in nature and are constantly evolving with the advent of new technology, practices and programs. Regulatory activity has not kept up with this pace.

Evidence: In the past ten years, the agency has only issued two regulations, which does not provide adequate information on whether regulations are routinely promulgated in a cost-effective manner. Nonetheless, in these two regulations the agency did not propose and evaluate feasible alternatives, such as varying levels of compliance or reporting requirements, and therefore has not demonstrated that the agency regularly proposes and selects the most cost-effective or socially beneficial option. PART guidance requires the program to be able to demonstrate how rulemakings result in the highest overall net benefits compared to other alternatives the agency has evaluated. Furthermore, current regulations are out of date, and it is acknowledged that they no longer maximize net benefits. The agency has not issued a notice for comment or advanced notice of proposed rulemaking to improve existing regulations.

NO 0%
Section 3 - Program Management Score 60%
Section 4 - Program Results/Accountability
Number Question Answer Score
4.1

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: GIPSA has developed one long-term performance measure: reducing the number of repeat violations of the Packers and Stockyards Act. Reducing repeat violations of the P&S Act is an important measure of effectiveness over the long-term. Currently, GIPSA measures its progress in achieving its long-term performance goal through a process of follow-up investigations after determining that violations have occurred in initial violations. Once a violation has been found, GIPSA issues a letter of notice to the person found to be in violation. The letter of notice informs the person of the violation, explains what is necessary to bring operations into compliance, and provides the person an opportunity to correct the violation. A follow-up investigation is scheduled within 120 days (within 90 days, following the 30 day grace period) of the date the letter of notice is received. The results of the follow-up investigation determine whether the person has corrected the violation or continued to engage in conduct that violates the P&S Act.

Evidence: PART guidance states that if the program receives a "No" to question 2.1, then it must receive a "No" to question 4.1. To obtain credit, the program needs to develop two or three long-term outcome based performance measures with baselines and targets. Recent OIG audit findings indicate that GIPSA's system of determining violations of the P&S Act is flawed and lacks a standard definition of what constitutes an investigation and how these actions are differentiated from routine administrative matters. Additionally, the agency's tracking system was found to be incomplete and lacking procedures for validating required information. These audit findings call in question the accuracy of GIPSA's current measure.

NO 0%
4.2

Does the program (including program partners) achieve its annual performance goals?

Explanation: As currently submitted, two of the program's annual measures are not acceptable and the third requires additional explanation/clarification. Tracking the actual outreach activities to a targeted number is an internal management measure useful for program operations, but does not provide an indication the effect of education or outreach activities. Bond coverage - if deemed a requirement for participation in livestock market transactions - is not an acceptable outcome. Finally, as mentioned in relation to the program's long-term measure, compliance rates are important indications of the program's effectiveness, but the compliance measure should be defined more clearly (i.e., Does the agency follow-up on all violations within 90 days and what action is taken for repeat offenders?).

Evidence: PART guidance states that if the program receives a "No" to question 2.3, then it must receive a "No" to question 4.2

NO 0%
4.3

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: GIPSA's efficiency measure evaluates the average total cost of conducting actual investigations and regulatory activities to support enforcement of the P&S Act.

Evidence: The agency receives a "Small Extent" for this question in recognition of the steps that it has taken to modernize its business delivery systems, but also reflects the fact that more remains to be done. The deployment of a new information management system between 2005 and 2009, the re-engineering of business processes, and the consolidation of organizational structures allow GIPSA to achieve efficiencies and cost effectiveness in program execution. These efforts are ongoing and have not been fully implemented. The usefulness of GIPSA's current efficiency measure remains an open question as competition investigations that are exceedingly complex and involve expenses over multiple years are being excluded from cost projections.

SMALL EXTENT 6%
4.4

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Other USDA agencies, other Federal government agencies, and State agencies that have similar interests work closely with GIPSA and often seek assistance from GIPSA. GIPSA's authority and responsibility for enforcement of the P&S Act make the program unique, and there are no programs that are directly comparable.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy). The audit found that the program has not made decisions on policy and requests for guidance from P&SP staff because P&SP had no internal structure for receiving, reviewing, and acting on policy questions raised or amending regulations. As a result, timely action was not being taken on issues that impact the day-to-day business activities of producers and the entities P&SP regulates (e.g., packers, stockyards, and live poultry dealers). The audit identified 64 policy issues that were awaiting decisions in P&SP Headquarters as of September 30, 2005. These 64 issues cover all types of P&SP investigations (e.g., trade practice, financial protection, and competition) and a variety of topics to be addressed by the Deputy Administrator and PLD. For 55 of the 64 issues, guidance was requested prior to 2004, with 2 submitted in 2000. Equally as troubling, while substantive policy issues languished for years, the audit found that P&SP policies have been recently issued for a variety of administrative matters such as changing the title of Regional Supervisors to Regional Managers, scheduling meetings with the Deputy Administrator, and travel arrangements for the Deputy Administrator.

NO 0%
4.5

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: GIPSA has undergone two USDA OIG audits: one in 1997 and the other completed in January, 2006, and a Government Accountability Office (GAO) audit in 2000. The first USDA OIG audit provided advice to strengthen the program's organizational structure (i.e., increasing the level of economic and legal expertise in the field and reducing the number of field offices). The previous GAO Report in 2000 focused more on business practices such as integrating economists and legal specialists into investigations, adopting practices, when applicable, used by the Department of Justice (DOJ), and procedures for development of investigation work plans. The most recent USDA OIG report also focused on business practices, finding gaps in four areas: record keeping, management control, policy decision making, and specific advice not implemented from earlier audits.

Evidence: USDA OIG Audit (Report No: 30601-01-Hy).

NO 0%
4.RG1

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: The program lacks, as regulated entities evolve, a capability to implement business practices and procedures to achieve maximum effectiveness. The lag in adopting appropriate management practices has resulted in the net social benefit not being maximized and the achievement of program goals at a cost to society above the minimum. As a consequence of the latest USDA OIG report, GIPSA is taking measures to implement stronger business practices.

Evidence: GIPSA has not performed any systematic analysis to discern whether its regulatory activities have maximized benefits. In the Swine Contract Library final rule (65 FR 17758), GIPSA asserted that benefits would be substantial, but acknowledged that they would be difficult to quantify. Now that the rule has been in place for several years, the agency could perform a qualitative and quantitative look-back analysis to investigate if producers believe there is greater information parity in the marketplace, and whether and how this information has led to different or improved planning activities.

NO 0%
Section 4 - Program Results/Accountability Score 6%


Last updated: 09062008.2006SPR