Barcelona, January 24, 1969 We flew to Barcelona from Madrid. A scheduled meeting at 10 a.m. was delayed until about 2 p.m. due to our plane being fogged in at Madrid. Here the complaints on quality continued to be on broken corn and foreign material, excess moisture in different parts of cargoes and some arriving out of condition. In Madrid and Barcelona we were asked if we had any direct relation with other countries on grain grading (answer yes); were we interested in Spain's effort to establish Standards (answer yes); they wanted someone to observe cargo conditions on arrival, and I sugested they make the request through the Agricultural Attache. They asked how to report bad deliveries (answer through FAS); could they have catalogues so they could buy the same equipment that we used in sampling and grading grain (I have suggested to Rurrows and Seedburo they send catalogues to the Rotterdam office of the USFGC); they want to be kept informed of any changes in our standards (answered they could be kept informed through the Agricultural Attaches and possibly through the U.S. Feed Grains Council Offices). Lisbon, Portugal, January 27, 1969 Complaints were on the quality of corn and durum wheat, excessive amounts of broken corn and dust; durum wheat on lack of hardness of kernels in the percentage required for hard amber (75%); the replies on corn complaints were the same as that stated before; the durum wheat question will be taken up in another report. The Portuguese want someone from the United States to observe cargo arrival for condition. They want the same type of sampling equipment used in the United States. Mr. Golberg explained the Barge Sampling Project at Rotterdam some years ago. It appeared the Portuguese would like to have some help with sampling and unloading investigations on cargo arrivals. Conclusions Some research should be done on a method of loading corn into carriers that will leave a homogenous mixture in the holds of ships so that stratification of whole and fine broken corn can be prevented. An alternative would be shipment of fragile corn in containers. Importing countries should do some research and use methods of unloading that will eliminate further breakage in unloading. Plant breeders should develop more crazing or cracking resistance in our corn varieties. Educational work should be done to eliminate the misconception used by importers who use the certificate to evidence the quality of the corn to their customers after the corn has been transshipped one or more times. That grain dealers were using our certificates to evidence the quality of corn loaded into farmers wagons or lorries from handlers elevators-was indicated in conversation after some of the meetings. The Grain Division, C&MS, should make doubly sure there is no bribery of inspectors or falsification of certificates or misgrading of the grain or improper sampling. We should have the manpower and funds to supervise and keep under surveillance on weekend and night loading at those export points where foreign complaints indicate the lower grade grain was loaded. Exporters should load well within the limits for the grade of corn being shipped and not load to the limit of broken corn and foreign material allowed in the grade being loaded knowing the fragile condition of the corn and expect the grade to hold up and their firms to retain their overseas customers. We are in a hard sell export market as far as feed grains are concerned in my opinion. Subsidies and more knowledgeable production methods in European Countries is reducing their dependence on imports. There is much talk of using "low grade" wheat as a feed grain with barley and in mixed feeds. The EEC is a factor in Western Europe becoming self supporting in cereals. In my opinion the Scandanavian Countries and Spain could very well become members before too long. Entry of EFTA Countries and an open free trade policy might reduce Western Europe's feed grain imports to a trickle compared with what we have known in recent years. After listening to complaints for three weeks and seeing the look on peoples faces and in their eyes when they accuse the inspection system of being subject to bribery, I cannot stress too strongly the part good inspection practices, constant supervision, and quality control must play in helping this country retain the overseas grain markets. JOHN A. BROWNING, Chairman, Board of Appeals and Review. AUDIT REPORT, AgriculturaL MARKETING SERVICE, GRAIN DIVISION, GRAIN INSPECTION BRANCH, HYATTSVILLE, MARYLAND, as of May 18, 1973, REPORT No. 60202-1-TE [U.S. Department of Agriculture, Office of the Secretary, Office of Audit, Southwest Region, 3916 South General Bruce Drive, Temple, Texas 76501] I-INTRODUCTION AND SUMMARY A. INTRODUCTION We have completed a nationwide audit of the grain inspection program of the Grain Inspection Branch (GIB), Grain Division (GD), Agricultural Marketing Service (AMS), United States Department of Agriculture. Primary emphasis was given to inspection operations of Fiscal Years 1972 and 1973, but older transactions were reviewed to the extent deemed necessary. We did not review commodity and rice inspection operations. The audit was performed to determine whether the grain inspection program is being carried out in accordance with the United States Grain Standards Act (USGSA) and the Regulations, policies, and instructions issued pursuant thereto. The audit included an appraisal of administration of the GIB activities for compliance with applicable statutes and regulations and a check of the adequacy of policies, procedures, and internal controls. The GIB under the authority of the USGSA, as amended, is responsible for inspection and testing services for grain performed by, or under its supervision. GIB helps to promote and protect the interests of producers, merchandisers, warehousemen, processors, and consumers by facilitating the orderly and efficient marketing of grain through inspection and issuance of official inspection certificates in Canada and on appeal inspections in the United States, and supervision of non-Federal licensed inspectors in the United States. Normal administrative and supervision expenses are paid from appropriated and trust funds. A fee is charged for appeal inspections performed when the original inspection grade is sustained. As of January 1, 1972, the GIB employed 210 Federal Civil Service employees to perform functions under the USGSA. GIB was funded in FY 1972 by a $2,437,000 appropriation and had $1,082,000 in trust that had been received from appeals and Canadian inspections. In addition to an audit of the GIB headquarters, which included the Beltsville Board of Appeal and Review, our coverage also included 2 regional offices, 11 field offices, and approximately 44 grain inspection points. A list of field offices at which grain inspection activities were audited is shown on Exhibit A. B. SUMMARY OF AUDIT RESULTS Since the amendment of the USGSA, August 15, 1968 and the Regulations thereunder, GIB has published and revised numerous instructions. Further action is needed to implement certain Regulations and revise or publish instructions. We were told that GIB has been delayed from taking such action because of pressure of work resulting from emerging new priorities. Overall management could be strengthened by taking positive and timely action to issue and update instructions in a timely manner, and make decisions and initiate needed action to correct certain conditions. Some of the new regulations as issued in 1969 need to be implemented in the interest of strengthening the program. Some regulations have been officially postponed by announcement in the Federal Register while others have been neither officially postponed nor implemented. Also, some difficulty has been encountered in getting instructions written and/or released and taking corrective action on certain conditions in a timely manner. The overall system for issuing, reviewing, updating, and rescinding instructions needs improving, and additional instructions are needed in some areas to provide more uniformity among the different field offices. Some Agricultural Commodity Graders (ACG's) and /or Licensed Inspectors (LI's) were using unapproved shortcuts in performing official grain inspections, not verifying the stowage of grain being loaded aboard a ship, not adequately safeguarding official samples and certificates in a manner which would maintain their integrity, and not check testing mechanical samplers in accordance with instructions. Present reporting instructions are not being followed by some field offices. Also, more effective supervision of LI's at the Farmers Export Elevator, Ama, Louisiana, is needed. The practice of four inspection agencies in charging higher inspection fees to nonmembers than to members for official grain inspections needs review. The GD does not inform the Food and Drug Administration (FDA) of grain that is found upon inspection to contain deleterious substances or adulterants. An effective safety program is needed to ensure that GD employees are provided safe working conditions, especially in inspecting fumigated spaces. The GD's policy on when employees may use their privately-owned vehicle in lieu of common carrier appears to be in conflict with the Standardized Government Travel Regulations. II-RECOMMENDATIONS AND DISCUSSION WITH MANAGEMENT A. RECOMMENDATIONS TO THE ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE 1. Report to Food and Drug Administration (FDA) grain found to contain deleterious substances and adulterants exceeding tolerance levels established by the FDA, including aflatoxin contamination. (See Details 1, pages 5 to 8.) 2. Implement an active, effective, and on-going safety program with the assistance of the AMS Personnel Division and Department of Labor under the Occupational Safety and Health Act. This should include but not be limited to (1) issuing written instructions on procedure to be used in inspecting fumigated areas, (2) requiring a "gas free" certificate before permitting the inspection of a fumigated area, and (3) provide training to designated GD safety officer and personnel. (See Details-2, pages 8 to 11.) 3. Implement or rescind cited parts of the Regulations of the United States Grain Standards Act (USGSA). (See Details-3, pages 11 to 17.) 4. Develop a system to ensure prompt decisions on division matters. (See Details-4, pages 17 to 23.) 5. Revise, amend, or issue additional instructions and guidelines to provide more uniformity among field offices and to eliminate certain inconsistencies. (See Details 5, pages 23 to 39.) 6. Prevent the use of unapproved inspection shortcuts. (See Details-6, pages 39 and 40.) 7. Require Licensed Inspectors and Agricultural Commodity Graders to verify the stowage of grain being loaded aboard a vessel. (See Details-7, pages 40 and 41.) 8. Require inspection agency personnel to properly safeguard official samples and certificates. (See Details-8, pages 41 and 42.) 9. Prescribe the frequency of testchecking and require compliance. (See Details-9, pages 42 to 44.) 10. Improve reporting system and better utilize reports to ensure that FO's are providing adequate supervision to IA personnel. (See Details 10a and c, pages 44, 45, 48 to 50.) 11. Require field office personnel to use the management printouts in accordance with instructions. (See Details-10b, pages 45 to 47.) 12. Review the cases where inspection agencies' records show differences in member and nonmember fees and require that these agencies charge the same fees for members and nonmembers, unless cost justification can be presented. (See Details-11, pages 50 and 51.) 13. Authorize and direct travel in privately-owned conveyance in accordance with provisions of AMS Instructions and Standard Government Travel Regulations. (See Details-12, pages 51 to 53.) B. DISCUSSION WITH MANAGEMENT Three draft copies of the report were furnished on August 27, 1973 to Ervin L. Peterson, Administrator, Agricultural Marketing Service. He provided us by memorandum of March 15, 1974, detailed comments on the findings which were considered by us in making appropriate changes to clarify the details reported. Mr. Peterson also advised in his memorandum that his office and the Grain Division were in general agreement with the recommendations; therefore, no formal exit conference was scheduled. III-DETAILS UNFIT GRAIN 1. It has been an approved practice of the Grain Division (GD) to refrain from informing the Food and Drug Administration (FDA) of grain that is found to contain deleterious substances such as mercury treated kernels, crotalaria seeds, aflatoxin, or adulterants such as rodent excreta and insect damage kernels. Some Grain Inspection Branch (GIB) personnel advised that they had been verbally instructed not to volunteer any information to FDA. The Northern Regional Office (RO) Director verbally instructed his field office (FO) supervisors not to volunteer any information to FDA, nor to comply with FDA request for grade or quality information covering a specific lot of grain. GR Instruction 918-6, Grain Inspection Manual, provides that wheat or corn containing specified levels of deleterious substances or adulterants will be graded "sample grade." The FDA has established defect action levels which represent the limit at or above which FDA will take legal action to remove certain products from the market. The following inconsistencies illustrate the conditions under which wheat and corn would receive a sample grade from AMS and could be used for human consumption even though FDA criteria show these conditions prohibit such use. FDA CRITERIA FOR SEIZURE (a) Animal Filth Wheat containing 3 or more rodent pellets per 1,000 grams. (b) Mercury Treated "Pink" Wheat Wheat containing 10 or more mercury treated kernels per 500 grams. (c) Crotalaria Seeds Wheat containing 20 parts per billion (PPB) of crotalaria seeds. AMS CRITERIA FOR SAMPLE GRADE Wheat containing 3 or more whole rodent pellets or an equivalent quantity of broken pellets or visible bird dropping in 1,000 grams. Corn containing rodent excreta in excess of 0.2 percent shall be considered as being of distinctly low quality. Wheat which contains an unknown foreign substance, including crystalline substances (rock salt, etc.), or a commonly recognized harmful or toxic foreign substance, including so-called "Pink" wheat; however, a specific level of contamination is not set out in the instructions. The FO supervisor at Omaha, Nebraska, stated that when 2 kernels of "pink" wheat are found in 1,000 grams, the wheat is graded "sample grade.' Houston FO personnel stated that they had received verbal instructions several years ago to grade wheat "sample grade" when 4 kernels of "pink" wheat were found in 1,000 grams. The GD Director advised on March 15, 1974, that the officially recognized level has been "4 or more" pink kernels per 1,000 grams. Corn and wheat containing more than 2 crotalaria seeds in 1,000 grams. (d) Insect Damaged Kernels (e) Aflatoxin Corn containing 20 PPB of aflatoxin. All insect damaged kernels are just considered as damaged kernels. No distinction is made between insect damaged and any other kind of damage that may occur to wheat and/or corn. Wheat containing more than 15 percent insect damaged (or total damaged) kernels. Wheat containing 2% or less may be graded U.S. No. 1. No criteria has been established by GD. Under present GD grading procedures, wheat that exceeds the FDA defect action level would be graded "sample grade," but FDA is not informed. The grain producers or elevators are able to blend the contaminated grain with good grain or dispose of it by other means. According to FDA, the mixing of a food containing any amount of defect at or above the current defect level with another lot of the same or another food is not permitted and renders the final food unlawful regardless of the defect level of the finished food. One instance noted during our audit where possible contaminated grain may have been blended with good grain was at Corpus Christi, Texas. A boxcar of wheat sampled contained about two percent of discolored, deformed, and smaller than normal kernels. A sample sent to the Gulf Coast Testing Laboratory, Inc., Corpus Christi, Texas, revealed that the grain had probably been in contact with an iron solution. No conclusion was reached by the laboratory or FO as to whether the grain was unfit or harmful. The Public Elevator in Corpus Christi, Texas, advised that the grain in question had been shipped to the Continental Grain Company, Beaumont, Texas. As pointed out above, the GD does not have criteria on aflatoxin contamination and inspection techniques have not been established to detect aflatoxin corn. However, it might be pointed out that the August 1972 issue of the Successful Farming Magazine contains an article on "New Way to Spot Aflatoxin Corn." According to the article, aflatoxin can be detected with an ultraviolet light. The article further states that the FDA has recalled several lots of food corn from the market because of aflatoxin contamination. As yet, toxin residue levels have not been set for livestock feed so legality of utilizing it this way is questionable. To ensure that the health of the consumer is protected, GD should voluntarily report to FDA grain found to contain deleterious substances and adulterants at levels that meet FDA's defect action level. Safety program 2. An effective safety program with respect to examining fumigated spaces has not been implemented. ACG's and LI's are not furnished protective equipment for use in examining shipholds which have been fumigated, and tests of the air in these areas are generally not made to determine whether the air is safe to breathe prior to entering the shiphold. (Weaknesses in the GS safety program were also reported in the CIB Audit Report, No. 6112-1-W, dated April 30, 1971.) Inspection personnel are presently using different time guidelines in determining when to re-examine a fumigated area, since there are no written quidelines. Houston and New Orleans FO personnel advised that, after fumigation, they wait about 4 hours on an empty hold (LI's in the Houston circuit were only waiting 3 hours), and 12 hours on grain in a shiphold before re-entering the area. Chicago FO personnel stated that they usually wait about 24 hours before reexamining grain that has been fumigated in a shiphold. We discussed the safety aspects of entering areas which have been fumigated with Bill Spitz of Big State Exterminators in Houston, Texas. Mr. Spitz advised that using a simple time guideline is not sufficient to determine when it is safe to enter an area that has been fumigated. He said that the amount of time that would be needed to be sure the fumigant had dissipated to a safe level would be a function of several factors, such as the type and quantity of fumigant used, the type ship, weather conditions, the quantity of grain in the hold and/or the size of the hold, etc. Mr. Spitz also stated that the idea expressed by some inspection personnel that a hold is safe to enter when you can no longer smell the fumigant is erroneous, since a chemical may be odorless and still be quite toxic. He advised |