USDA's Role In The Checkoff

Congress created a governmental entity – the Beef Board – to carry out the Beef Act’s program, and the U.S. Secretary of Agriculture elaborated upon the powers and duties set out in the Act with development of the Beef Order. Congress delegated to USDA the responsibility for implementation and oversight of the Beef Promotion and Research Act and all associated beef checkoff programs. 

  • The U.S. Secretary of Agriculture exercises comprehensive control over use of checkoff assessment revenues by the Beef Board and Operating Committee. The Secretary: 
    • Approves the Beef Board’s annual budget, and the Board and Operating Committee may incur only those expenses that the Secretary deems reasonable. When submitting budgets to USDA, the Beef Board must include detailed information regarding administrative expenses and written justifications for contract costs. With the budget, USDA also requires a series of authorization requests – including statements of objectives and strategies in each major program area, a summary of anticipated revenue, and a breakdown of staff and administrative expenses. 
    • Approves the plans, projects and contracts of the Beef Board and Operating Committee.  
    • May inspect and audit the books and records of the Beef Board and the Operating Committee at any time. 
    • Appoints all members of the Beef Board based on nominations from beef organizations in each state. 
  • In practice, USDA exercises approval authority over all promotional materials, including advertising, and all producer communications, in advance of their dissemination. 
  • USDA is extensively involved in development of beef checkoff advertising – through involvement with the Operating Committee reviews and final decisions as to whether particular ads will be used. USDA rejects any advertising deemed disparaging to another commodity or in violation of the prohibition against false and misleading advertising. 
  • USDA must review all brand or trade-name promotions, both at national and state/regional levels. No such references are allowed without approval from both the CBB Executive Committee and USDA.  
  • USDA personnel work closely with the Beef Board and the Operating Committee from the inception of a project through implementation. 
    • USDA representatives attend every meeting of the Cattlemen’s Beef Board, the Beef Promotion Operating Committee and the Beef Board Executive Committee to provide guidance/weigh in on issues as needed.  
    • USDA provides guidance to the Beef Board as to allocation of funds among programs commensurate with the Beef Act and Order – i.e. toward building consumer demand for beef and increasing profit opportunities for cattlemen and prohibiting use of any checkoff dollars for lobbying or to influence government policy or action. 
  • USDA reviews all nutritional claims made through the checkoff program to ensure that they have sufficient supporting data to comply with the USDA Nutrient Data Base. 
  • USDA requires the Beef Board to monitor contracts for compliance with all provisions. 
  • USDA reviews financials statements for each accounting period to ensure proper accountability of funds collected and spent. 
  • USDA has directed CBB to conduct periodic financial and procedural reviews of CSBC operations. These review reports are submitted to USDA. 
  • When CBB conduct contract compliance audits of its contractors, such audits and recommendations for resolution of any issues arising therefrom, are submitted to USDA for approval. 
  • USDA reviews copies of annual progress reports on program activities and expenditures. It also reviews annual financial audits performed by certified public accountants to ensure compliance with the Act and Order, the AMS investment policy, and generally accepted accounting principles. 
  • USDA conducts periodic administrative reviews of the Beef Board to ensure that adequate records are maintained. 
  • USDA reviews and approves Beef Board bylaws and policies, and amendments thereto, to ensure adequate coverage of responsibilities, meeting procedures and travel and related expenses.
  • In accordance with the Beef Act, USDA must ensure that Board investments of any checkoff dollars are in accordance with USDA’s Agricultural Marketing Services’ investment policy.  
  • When the Federation of State Beef Councils elects its representatives to the Operating Committee, USDA verifies that the representatives have been duly elected by the Federation and that each of them is a producer and a member or ex-officio member of the board of directors of a Qualified State Beef Council. In addition, USDA conducts internal background checks on each representative to ascertain whether they are in good standing with the Department and whether there is any information that might reflect negatively on certification of their election to the Operating Committee. 
  • When the Beef Promotion and Research Order needs to be amended to better serve the industry, recommendations are submitted to USDA for study. USDA then decides on the recommendations and publishes any change for comment before implementation.  
  • When the state beef councils and the CBB are unsuccessful in collecting checkoff funds, the cases are referred to USDA. USDA then uses correspondence or litigation to collect. In some cases, USDA will refer the case to the National Finance Center for the garnishment of any federal payments including income tax refunds.  
  • USDA’s Office of General Counsel provides legal representation in the event compliance cases are taken to the litigation stage. 
  • The collection of the checkoff on imports is performed by the U.S. Customs Service. USDA provides the interface between USCS and CBB for any changes to procedures or problems that may arise. 

For more information, go to USDA-AMS