Performance audit, Arizona Department of Agriculture pest exclusion and management program

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Auditor General
September 2000
Report No. 00-13
ARIZONA
DEPARTMENT
OF
AGRICULTURE
PEST EXCLUSION
AND
MANAGEMENT PROGRAM
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. Her mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, she provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Representative Roberta L. Voss, Chairman
Senator Tom Smith, Vice-Chairman
Representative Robert Burns Senator Keith Bee
Representative Ken Cheuvront Senator Herb Guenther
Representative Andy Nichols Senator Darden Hamilton
Representative Barry Wong Senator Pete Rios
Representative Jeff Groscost Senator Brenda Burns
(ex-officio) (ex-officio)
Audit Staff
Dale Chapman—Manager
and Contact Person (602) 553-0333
Sandra Tulloss—Team Leader
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, AZ 85018
(602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
September 14, 2000
Members of the Legislature
The Honorable Jane Dee Hull, Governor
Mr. Sheldon Jones, Director
Arizona Department of Agriculture
Transmitted herewith is a report of the Auditor General, A Performance Audit of the Arizona
Department of Agriculture’s Pest Exclusion and Management Program. This report is in
response to a June 16, 1999, resolution of the Joint Legislative Audit Committee. The
performance audit was conducted as part of the Sunset review set forth in A.R.S. §41-2951 et
seq. I am also transmitting with this report a copy of the Report Highlights for this audit to
provide a quick summary for your convenience.
This is the fourth in a series of reports to be issued on the Arizona Department of Agriculture.
As outlined in its response, the Department agrees with all of the findings and
recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on September 15, 2000.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
OFFICE OF THE AUDITOR GENERAL
Program Fact Sheet
Department of Agriculture
Pest Exclusion and Management Program
Services: The Pest Exclusion and Management Program offers the following services: 1)
Port-of-entry and district inspections—Inspects commercial vehicles entering Arizona
through 6 ports-of-entry and at destinations throughout Arizona; 2) Survey, detection, and
nursery inspection—Inspects nurseries and other potential locations of pest infestations; 3)
Cotton plow-down—Ensures that cotton growers plow-down their fields after harvesting;
4) Phyto-sanitary—Issues certificates required by other states and foreign countries to im-port
Arizona agricultural commodities; and 5) Noxious weed management—Works with
local weed management groups and others to recognize and manage noxious weeds.
Revenue: $4.1 million
(fiscal year 2000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
1998 1999 2000
Licenses, permits, inspection fees, and other
Intergovernmental
State General Fund
Sanders
u
Parker
n
u
Ehrenberg
un San Simon u
Yuma
Phoenix
gn
uPorts-of-Entry (6)
n District Offices (6)
g Headquarters
nWilcox
Tucson
n
n
Nogales
Duncan
u
u
Douglas
Facilities: 12 locations, 5 leased.
n The Department owns its office facilities at the San
Simon and Sanders ports, uses space provided by
the Department of Transportation at the Ehren-berg,
Duncan, Douglas, and Yuma ports, and
leases its Tucson district office space from the De-partment
of Administration. In total, the Depart-ment
paid rent of approximately $54,000 for its fa-cilities
outside the Department’s Office at the
Capitol Complex in Phoenix.
n In addition to the staff stationed at these 12 facili-ties,
an inspector works out of his home in Casa
Grande.
Personnel: 99.2 full-time staff
(fiscal year 2000)
Ports-of-entry
(29.7)
Administration
(2)
Districts (31)
Survey and
Detection (17)
Pest and Crop
Specialists
(15.5)
Quarantine and
Nursery (4)
OFFICE OF THE AUDITOR GENERAL
Equipment: The Department has purchased
several items used by the program, including:
50 state vehicles, consist-ing
of 43 full-sized pick-up
trucks, 5 compact
pick-up trucks, 1 mini-van,
and 1 12-passenger
van. These vehicles were
leased from the De-partment
of Administra-tion
at a cost of $189,000
in fiscal year 2000.
4 Digital Imaging Sys-tems
used to take and
electronically send pic-tures
of Red Imported
Fire Ants at the ports-of-entry
for identification at
the State Agriculture
Laboratory. These sys-tems
were purchased at
a cost of approximately
$20,000 each.
Global Positioning Sys-tem
components, used
to map trap locations at
a cost of approximately
$4,000.
Program Goals: (fiscal years 2000 through
2002)
1. To provide an overview of inspection and
regulatory measures.
2. To exclude and prevent the establishment of
hazardous pests in Arizona.
3. To manage existing pests and prevent the
reintroduction of eradicated pests in Ari-zona.
4. To serve our customers in an accurate and
efficient manner.
Adequacy of Goals and Performance Meas-ures:
Several improvements could be made to the
Department’s four goals and their performance
measures.1
n Goal 1 is “ to provide an overview of inspec-tion
and regulatory measures.” However, this
goal and its associated performance measures
cover functions this program does not per-form,
such as issuing licenses, conducting in-vestigations,
and taking disciplinary actions.
n Some key performance measure data has not
been collected in the past, while some data
was not consistently reported. For example,
some districts confused counts of the number
of nurseries inspected versus the number of
plants within nurseries that were inspected.
However, the program has acknowledged
these problems and begun to develop new
data definitions and data collection processes.
n While the program employs several appropri-ate
outcome and efficiency measures, im-provements
could be made. For example:
4 The program lacks formal measures about
its average personnel time or cost to issue
phyto-sanitary certificates;
4 Similarly, the program does not have any
performance measures under Goal 3 re-garding
its nursery regulation activities,
such as the voluntary certification func-tion.
1 The Department incorporated one of these goals and
associated performance measures in order to comply
with guidelines specified in the Budget and Planning In-structions
for fiscal years 2000 and 2001 issued by the
Governor’s Office of Strategic Planning and Budgeting.
i
OFFICE OF THE AUDITOR GENERAL
SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Arizona Department of Agriculture’s Pest Exclusion
and Management Program pursuant to a June 16, 1999, resolu-tion
of the Joint Legislative Audit Committee. This audit was
conducted as part of the Sunset review set forth in A.R.S. §41-
2951 et seq, and is the fourth report in a series of audits to be
conducted on programs within the Arizona Department of Agri-culture.
Through this program, the Department seeks to ensure the pro-vision
of pest-free agricultural products, and protect the public
from agricultural and other pests through prevention, control,
and eradication. As part of the program, the Department in-spects
trucks hauling agricultural products and other high-risk
cargoes into Arizona at six Department of Transportation ports-of-
entry and at various trucking destinations throughout Ari-zona
to ensure these vehicles are not carrying harmful pests,
plant diseases, or noxious weeds. The Department also conducts
other types of inspection, prevention, and eradication activities.
When other states or countries require that Arizona’s agricultural
products be certified as pest- and disease-free before leaving the
State, the Department also conducts the necessary inspections
and issues the required certification.
Port-of-Entry Inspections
Help State Avoid Costly
Pest Infestations
(See pages 9 through 19)
Port-of-entry inspections serve as Arizona’s “first line of defense”
in helping prevent harmful pests and plant diseases from enter-ing
the State. Although the Department has limited resources to
conduct these inspections, it has appropriately focused these
resources to maximize their effectiveness. Inspections are fo-cused
on the ports with the highest traffic and on trucks that
Summary
ii
OFFICE OF THE AUDITOR GENERAL
pose the highest risk for carrying pests. The four ports-of-entry
where inspections were conducted in fiscal year 1999—Sanders,
San Simon, Yuma, and Ehrenberg—accounted for nearly two-thirds
of all trucks entering the State. The Department also works
with California to share information and jointly support new
port activities. For example, the Department recently signed an
agreement with California under which California provided
monies for the Department to begin conducting port-of-entry
inspections in Duncan and Douglas as of July 2000.
Given the limited resources available, these efforts cannot ensure
that all at-risk trucks receive inspections. For example, over
600,000 of the 3.5 million trucks entering Arizona through the 4
ports staffed by the Department could not be inspected during
fiscal year 1999. This occurred because the ports were either so
busy that the State risked creating a safety hazard if the trucks
were held until they could be inspected or the trucks were on
PrePass, a computerized pre-approval system that allows trucks
to bypass the ports without stopping because they have satisfied
certain safety, weight, and other requirements in advance. Addi-tionally,
the Department could not conduct port inspections for
the approximately 2 million trucks that entered Arizona through
ports at which Department inspectors were not stationed.
Despite these limitations, inspections conducted at the ports-of-entry
may have helped prevent costly pest infestations that have
plagued other states. For example, Department inspectors de-tected
and prevented approximately 2,300 high-risk pests from
entering Arizona in 1999. This included Mediterranean Fruit
Flies, which have been described as the world’s most threatening
agricultural pest. To improve upon these successes at little addi-tional
cost, the Department should create additional inspector
positions. Specifically, the Department should consider creating
these positions by reallocating some of the staff positions re-duced
as a result of the Department centralizing its licensing
functions as recommended in a previous Auditor General report
(Report No. 2000-5). The Department could add these inspectors
to uncovered, high-traffic ports such as Topock and/or King-man.
Additionally, the Department should work with the De-partment
of Transportation to enhance pest inspection activities
Port-of-entry inspections
are Arizona’s “first line
of defense.”
Summary
iii
OFFICE OF THE AUDITOR GENERAL
and continue working with Arizona’s PrePass steering commit-tee
to develop a policy excluding trucking companies that haul
agricultural commodities 90 percent of the time from using pre-clearance
technology.
Current Fees May Not
Support Costs to Issue
Phyto-Sanitary Certificates
(See pages 21 to 27)
The Department may recover only part of its costs for issuing
phyto-sanitary certificates, which certify that Arizona agricul-tural
producers are pest- and disease-free for export to other
states or countries. In fiscal year 1999, the Department issued
approximately 1,500 interstate phyto-sanitary certificates. It also
issued about 4,000 international phyto-sanitary certificates on
behalf of the federal government.
The Department lacks statutory authority to charge fees for most
interstate certificates. Department inspectors spend considerable
time traveling to inspections, inspecting, and issuing some of
these certificates. For example, a review of 7 of the 258 interstate
certificates issued in April and May 2000 showed that the De-partment
incurred over $140 total in direct costs for issuing the 7
certificates. However, the Department could assess a fee for only
1 of the 7—for $15. Therefore, the Department should continue
with its efforts to identify its costs to issue these certificates. Once
the costs are known, the Legislature should consider providing
statutory authority to the Department to set fees for interstate
certificates.
For federal phyto-sanitary certificates, the problem is different:
although the Department is authorized to recover the full costs of
issuing these certificates, it does not appear to be charging
enough to recover the costs. A review of 22 of the 265 federal
certificates issued in April and May 2000 showed that the De-partment
recovered its direct costs for only 11. Direct costs for all
22 were about $940, but the fees totaled only $594. The Depart-ment
needs to continue with its efforts to identify its costs for
issuing federal certificates and accordingly adjust its fees so that
it more consistently recovers its costs.
The Department may
recover only part of its
costs for issuing phyto-sanitary
certificates.
Summary
iv
OFFICE OF THE AUDITOR GENERAL
Other Pertinent Information
(See pages 29 through 33)
During this audit, other pertinent information was gathered re-garding
the Red Imported Fire Ant (RIFA) and the Department’s
current efforts to prevent this pest from becoming established in
Arizona. RIFA, which is firmly entrenched in several Southern
states, causes severe damage to agriculture, wildlife, people, and
property. For example, three counties in California are infested
and California has budgeted over $10 million to fund fire ant
eradication programs in fiscal year 2001 alone. As a result of this
potential for harm, the Department is especially focused on
detecting and preventing RIFA from becoming established in the
State. For example, the Department reported rejecting 296 com-mercial
trucks infested with RIFA at Arizona’s ports-of-entry
from July to December 1999. Additionally, the Department
treated ten separate populations of RIFA in Arizona during fiscal
year 2000 and reports that only one of these populations is cur-rently
active.
The Department fo-cuses
on preventing
RIFA from entering
Arizona.
v
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS
Page
Introduction and Background............................ 1
Finding I: Port-of-Entry
Inspections Help State Avoid
Costly Pest Infestations................................. 9
Background .............................................................................. 9
Department Appropriately
Focuses Its Limited Resources ............................................. 10
Port-of-Entry Inspections Help
Prevent Expensive Infestations............................................ 15
Opportunities Exist to
Enhance Inspection Activities.............................................. 17
Recommendations.................................................................. 20
Finding II: Current Fees May Not
Support Costs to Issue
Phyto-Sanitary Certificates ........................... 21
Some States and Foreign Countries
Require Phyto-Sanitary Certificates ................................... 21
The Department Lacks Authority to
Charge Fees for Most Interstate Certificates..................... 22
The Department Needs to Re-Examine
Fees for Federal Certificates.................................................. 23
The Department Should
Ensure Phyto-Sanitary Certificate
Fees Cover Its Costs................................................................ 25
Recommendations.................................................................. 27
Table of Contents
vi
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (concl’d)
Page
Other Pertinent Information ............................... 29
The Red Imported
Fire Ant...................................................................................... 29
Agency Response
Table and Figures
Table 1 Arizona Department of Agriculture
Pest Exclusion and Management
Program
Statement of Revenues and Expenditures
Years Ended June 30, 1998,
1999, and 2000
(Unaudited).......................................................... 3
Figure 1 State of Arizona
Ports-of-Entry
As of June 1, 2000................................................ 12
Figure 2 A Mexican Fruit Fly ........................................... 15
Figure 3 A Red Imported Fire Ant.................................. 29
Figure 4 United States Department of Agriculture
Reported Distribution of Red Imported
Fire Ants
As of June 2, 2000................................................ 30
1
OFFICE OF THE AUDITOR GENERAL
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance
audit of the Arizona Department of Agriculture’s Pest Exclusion
and Management program pursuant to a June 16, 1999, resolu-tion
of the Joint Legislative Audit Committee. This audit was
conducted as part of the Sunset review set forth in A.R.S. §41-
2951 et seq, and is the fourth in a series of audits to be conducted
on programs within the Arizona Department of Agriculture.
The State’s interest in preventing and treating pest infestations
precedes statehood. In 1909 the Legislative Assembly of the Ter-ritory
of Arizona created a three-member commission known as
the Arizona Horticultural Commission with the power to inspect
orchards, nurseries, and nursery stock for insect pests. In 1912,
following statehood, the territorial Horticulture Commission
became the Arizona Commission of Agriculture and Horticul-ture,
but retained responsibility for pest detection and manage-ment
activities in Arizona through 1990. However, in 1989, the
Legislature passed Laws 1989, Chapter 162, which combined the
Arizona Commission of Agriculture and Horticulture and three
other separate state agencies to form the Arizona Department of
Agriculture (Department). The Department began operating on
January 1, 1991, and assumed the State’s pest detection and
management activities.
Pest Detection and
Management in
Arizona
Through the Pest Exclusion and Management Program, the De-partment
seeks to ensure the provision of pest-free agricultural
products and protect the public from agricultural and other pests
through prevention, control, and eradication, thereby also reduc-ing
the necessity of pesticide applications. The Department
works toward this mission by primarily inspecting trucks haul-ing
agricultural products, such as fruits, vegetables, and nursery
Department focuses on
inspecting trucks carry-ing
agricultural prod-ucts.
Introduction and Background
2
OFFICE OF THE AUDITOR GENERAL
products, at six Department of Transportation ports-of-entry and
at trucking destinations throughout Arizona to ensure these ve-hicles
are not carrying harmful pests, plant diseases, or noxious
weeds. Additionally, the Department inspects trucks originating
from regions of the United States with known high-risk infesta-tions;
inspects other trucks carrying non-agricultural commodi-ties,
as time allows; inspects and sets insect traps at nurseries and
other potential locations of pest infestations; ensures that cotton
growers plow-down their fields after harvesting to minimize the
potential for boll weevil infestations; and oversees eradication
efforts when harmful pests, plant diseases, or noxious weeds are
found. Finally, the Department issues phyto-sanitary certificates
to Arizona growers and shippers asserting that specified prod-ucts
are free from pests, plant diseases, and/or noxious weeds.
These certificates are required by other states and foreign coun-tries
to export these products.
During fiscal year 1999, the Department engaged in a variety of
inspection, trapping, and plow-down activities. For example, the
Department reported inspecting over 151,000 shipments of agri-cultural
and other products that entered Arizona in fiscal year
1999 and rejecting approximately 4,000 shipments for pest and
quarantine violations. The Department also reported issuing
approximately 4,000 federal phyto-sanitary certificates, inspect-ing
over 170,000 acres of seed crops, placing more than 7,000 pest
traps, and ensuring that approximately 280,000 acres of cotton
were appropriately plowed-down.
Pest Exclusion and
Management Program
Resources
During fiscal year 2000 and as illustrated in Table 1 (see page 3),
the program received approximately $3.8 million in General
Fund monies, while generating over $108,000 from other gov-ernment
sources. It also collected aabout $142,000 from issuing
licenses and permits. The program employed 99.2 full-time
equivalent staff (FTE), including approximately 29 inspectors at 4
ports-of-entry and 31 inspectors in districts throughout Arizona
during fiscal year 2000.
Department inspectors
are located at four ports-of-
entry.
Introduction and Background
3
OFFICE OF THE AUDITOR GENERAL
Table 1
Arizona Department of Agriculture
Pest Exclusion and Management Program
Statement of Revenues and Expenditures
Years Ended June 30, 1998, 1999, and 2000
(Unaudited)
1998 1999 2000
Revenues:
State General Fund appropriations $3,028,900 $3,108,200 $3,771,600 1
Intergovernmental2 427,571 416,623 108,752
Licenses and permits 98,927 165,798 141,567
Inspection fees 1,870 10,757 34,131
Other 987 5,884 4,071
Total revenues 3,558,255 3,707,262 4,060,121
Expenditures:
Personal services 2,286,911 2,341,235 2,531,930
Employee related 573,231 579,837 610,925
Professional and outside services 46,506 45,814 73,794
Travel, in-state 246,670 252,859 263,444
Travel, out-of-state 12,771 15,810 11,523
Other operating 348,539 356,788 362,125
Equipment 104,550 89,383 141,590
Total expenditures 3,619,178 3,681,726 3,995,331
Excess of revenues over (under)
expenditures (60,923) 25,536 64,790
Operating transfers in (out) 14,073 (2,856) 6,151
Excess of revenues and transfers in over
(under) expenditures and transfers out $ (46,850) $ 22,680 $ 70,941
1 Includes approximately $320,000 relating to the prevention and eradication of the Red Imported Fire Ant
(RIFA).
2 Includes approximately $344,000, $130,000, and $47,000 for 1998, 1999, and 2000, respectively, of federal
grants relating to the control of Karnal Bunt. In addition, 1999 includes $195,000 allocated by the Gover-nor
from the Department of Emergency and Military Affairs emergency funds for the prevention and
control of RIFA.
Source: The Arizona Financial Accounting System Accounting Event Transaction File for the years ended
June 30, 1998, 1999, and 2000.
Introduction and Background
4
OFFICE OF THE AUDITOR GENERAL
SPAR Review of
Ports-of-Entry
The Governor’s Office of Strategic Planning and Budgeting and
the Joint Legislative Budget Committee issued a Strategic Pro-gram
Area Review (SPAR) in January 2000 on Arizona’s ports-of-
entry. This review primarily focused on the Department of
Transportation’s Motor Vehicle Division port activities and their
relationship with the Departments of Public Safety and Agricul-ture.
It concluded that the Departments of Transportation, Public
Safety, and Agriculture each benefit from sharing the ports-of-entry.
The report stated that while it may not be feasible to con-solidate
their various port operations, opportunities exist for in-creased
cooperation between these state agencies. For example,
the three agencies should cross-train port staff, which would
increase efficiency and reduce the inspection and time delay
burden for truck drivers. The report further recommended that
the Department of Transportation develop new or updated in-teragency
agreements with the Departments of Public Safety and
Agriculture to specify key business components and responsi-bilities,
and foster more cooperation.
Laws 2000, Chapter 343, requires the Department of Transporta-tion,
with the cooperation of the Departments of Public Safety
and Agriculture, to submit a progress report on the implementa-tion
of the report’s recommendations to the Governor, the Legis-lature,
and state budget offices by September 1, 2000. This report
should include the specific actions the three agencies have taken
or changes identified to operate more effectively and efficiently
at the ports-of-entry; actions the agencies have taken to cross-train
and develop employees at the ports; and how the agencies
are using interagency agreements to foster effective and efficient
cooperation.
Program Changes
and Improvements
As a result of a program management change in July 1998 and
the identification of several areas needing improvement, the Pest
Exclusion and Management Program has recently undergone
Introduction and Background
5
OFFICE OF THE AUDITOR GENERAL
and continues to undergo several changes. Many of these
changes reflect an increased emphasis on customer service and
enhanced efficiency. For example,
n Improved allocation of staff resources—The program is
shifting staff resources to increase efficiency. For example, the
program is stationing administrative assistants at some of the
ports-of-entry and district offices so inspectors can spend
more time performing actual inspections and less time com-pleting
paperwork. Similarly, the program worked with the
Department’s Animal Services Division to start posting live-stock
inspectors at some ports-of-entry, which fosters im-proved
screening of livestock entering the State, while freeing
program inspectors to focus on pest detection.
n Prioritizing inspections—In addition to inspecting trucks at
ports, the Department conducts some inspections inside Ari-zona
when certain trucks arrive at their destination. Depart-ment
procedures now allow inspectors to prioritize these in-terior
inspection activities based on the risk of whether a pest
or plant disease is present. Previously, inspectors could in-spect
the same truck multiple times if it were making deliver-ies
to multiple locations. However, inspectors can now limit
their inspection activities to the first delivery location if the
inspection does not detect a pest or the risk of infestation is
low. This should not only allow the Department to stream-line
this inspection activity, but also allow it to better utilize
its limited inspection resources by expanding inspection cov-erage
and focusing on activities that present a higher risk for
pests.
n Enhanced data collection efforts—Realizing the impor-tance
of accurate and comprehensive data, the program is
working to enhance its data collection and analysis capabili-ties.
In the past, the program has struggled to capture and
adequately analyze critical data and information for many of
the activities it performs. For example, the program lacks
consistent summary data for district office activities prior to
June 1999 and relies on manual compilations to summarize
its port activities. As a result, the program has encountered
difficulty in reporting on its activities and the results of those
activities. Program management recognizes the importance
Introduction and Background
6
OFFICE OF THE AUDITOR GENERAL
of accurate and complete data and has begun training its staff
on collecting, summarizing, and analyzing activity data. As a
result, the program should be better positioned to report on
and evaluate its inspection, pest detection, and other activi-ties.
Audit Scope
and Methodology
This audit focuses on the Department’s efforts to fulfill its re-sponsibilities
to prevent, detect, and eradicate harmful pests and
plant diseases throughout the State and its processes and fees for
issuing interstate and federal phyto-sanitary certificates. Several
methods were used to study the issues addressed in this audit,
including:
n Reviewing and verifying the Department’s port-of-entry pest
detection statistics for July 1, 1998 through December 31,
1999, including laboratory identification slips, sample logs,
and monthly ports-of-entry summaries in order to assess and
verify the port’s pest and plant disease inspection and detec-tion
rates;
n Reviewing and assessing the reliability of Department of
Transportation, Motor Vehicle Division’s data for 1997, 1998,
and 1999 to determine the number of trucks passing through
all ports-of-entry, bypassing the ports during high-volume
periods, and using PrePass electronic clearance technology;
n Reviewing applicable federal and state statutes and adminis-trative
rules to identify the program’s responsibilities and au-thority;
n Reviewing and analyzing data for 52 interstate and federal
phyto-sanitary certificates the program issued between April
and May 2000 for which cost information was available, in
order to determine whether the program recovers its costs for
issuing these certificates;
Introduction and Background
7
OFFICE OF THE AUDITOR GENERAL
n Contacting officials and reviewing plant regulations from
nine other states to obtain information about their pest exclu-sion
and management activities for comparison to Arizona’s
practices; 1 and
n Interviewing Department management and staff, Depart-ment
of Transportation officials, legislative staff, United
States Department of Agriculture staff; a plant industry rep-resentative,
a local pest control district representative, and a
trucking industry representative to obtain their views on the
program’s activities and performance.
The report presents findings and recommendations in two areas:
n The Department should enhance port-of-entry activities,
which are valuable in avoiding costly infestations; and
n The Department should continue in its efforts to identify its
costs for issuing interstate and federal phyto-sanitary certifi-cates
and adjust its federal certificate fees to recover its costs if
appropriate, while the Legislature should consider granting
statutory authority to the Department to charge fees for all
interstate certificates.
In addition, the report contains Other Pertinent Information re-garding
the Red Imported Fire Ant and the Department’s efforts
to prevent, detect, and eradicate this pest in Arizona.
This audit was conducted in accordance with government audit-ing
standards.
The Auditor General and staff express appreciation to the Direc-tor
and staff of the Department of Agriculture for their coopera-tion
and assistance throughout the audit.
1 New Mexico and Utah were contacted because of their similarities to
Arizona’s climate and geographic issues. California, Florida, and Texas
were contacted because they have large agricultural industries and have
ports-of-entry functions similar to Arizona’s. Oregon, Washington, Colo-rado,
and Idaho were contacted because they were identified by litera-ture
or experts as having noteworthy pest detection programs.
8
OFFICE OF THE AUDITOR GENERAL
(This Page Intentionally Left Blank)
9
OFFICE OF THE AUDITOR GENERAL
FINDING I PORT-OF-ENTRY
INSPECTIONS HELP
STATE AVOID COSTLY
PEST INFESTATIONS
Despite inherent limitations, Department inspections at Ari-zona’s
ports-of-entry help avoid costly pest infestations. Even
though it inspects only a fraction of the trucks entering Arizona,
the Department appropriately focuses its efforts on the ports
with the highest traffic and trucks that pose the highest risk. As a
result, Department inspections may help prevent potentially
costly pest and plant disease infestations from occurring in the
State. However, the Department can take several steps to im-prove
the program, including creating new positions to conduct
port inspections.
Background
Although the nature of port-of-entry inspections for pests and
plant diseases has changed considerably over the years and is
now considerably reduced from previous levels, this function
remains a “first line of defense” in preventing harmful pests and
plant diseases from entering the State. In the past, the Depart-ment
inspected every vehicle, including commercial trucks and
private vehicles, and operated at ten ports-of-entry. However,
this function came under close scrutiny in the late 1980’s and
early 1990’s, resulting in several changes. First, to eliminate the
inconvenience for motorists entering or departing the State, the
Legislature discontinued the practice of inspecting private vehi-cles
at ports-of-entry in 1989. Additionally, a Project S.L.I.M. re-port,
released in July 1992, found that agricultural port inspec-tions
had limited impact and recommended discontinuing all
Finding I
10
OFFICE OF THE AUDITOR GENERAL
agricultural inspections at the ports-of-entry in favor of expand-ing
interior inspection activities.1 In its fiscal year 1993 Budget
Analysis and Recommendations report, the Joint Legislative
Budget Committee also recommended eliminating port inspec-tions,
stating that only 948 vehicles, or fewer than a tenth of 1
percent of vehicles, failed inspections in fiscal year 1991 and that
pest infestation occurred despite port inspections. As a result, the
Legislature suspended all Department inspection activities at the
ports during fiscal year 1993. However, the Legislature rein-stated
agricultural port inspections on a limited scale in fiscal
year 1994 in response to industry concerns about existing and
emerging pests, such as cotton boll weevils and Red Imported
Fire Ants.
Department Appropriately
Focuses Its Limited Resources
Although the Department has limited port inspection resources,
it appropriately focuses these resources to maximize the effec-tiveness
of its port inspection activities. Specifically, while the
Department inspects only a fraction of the trucks entering the
State, these inspections focus on the ports with the highest traffic
and trucks that pose the highest risk for carrying pests. However,
given limited resources available, these efforts cannot ensure that
all at-risk trucks receive port inspection.
Port inspectors inspect a small percentage of the trucks entering
the State—The Department inspects only a small percentage of
the trucks entering Arizona. Until July 2000, the Department op-erated
at four ports-of-entry located in Sanders, San Simon,
Yuma, and Ehrenberg.2 At these ports, the Department inspects
trucks meeting certain criteria, such as agricultural loads or point
of origin, for the presence of pests. If an illegal pest or plant dis-
1 The Statewide Long-Term Improved Management Project (Project
S.L.I.M.), a review of Arizona’s 12 largest cabinet agencies and 4 special
study areas, focused on improving processes, enhancing service quality,
and reducing government’s cost.
2 The Department operates at two port facilities in Yuma. However, for
purposes of this audit, these two facilities were counted as one port-of-entry.
The Department also began to operate at two additional ports-of-entry,
located at Duncan and Douglas, as of July 17, 2000.
Fewer than 3 percent of
trucks entering Arizona
receive port inspections.
Finding I
11
OFFICE OF THE AUDITOR GENERAL
ease is identified, the truck and its contents are typically not al-lowed
to enter the State unless the pest or disease is eliminated.
During fiscal year 1999, the Department reported inspecting over
151,000 shipments and rejecting approximately 4,400 of them
because pests or quarantine violations were detected. In com-parison,
the Department of Transportation reports that approxi-mately
5.5 million trucks entered Arizona through its 21 ports-of-entry
in fiscal year 1999. Therefore, the Department inspected
fewer than 3 percent of the trucks entering the State. Figure 1 (see
page 12) illustrates the locations of the 21 ports-of-entry operated
by the Department of Transportation and notes the 6 ports at
which the Department currently conducts inspections.
Department appropriately focuses its efforts—Although the
Department inspects only a fraction of the trucks entering Ari-zona,
it appropriately focuses its efforts to maximize the effec-tiveness
of its port inspection activities. For example:
n The Department employs inspectors at appropriate
ports—The Department does not receive sufficient funding
to conduct inspections at all 21 ports-of-entry operated by the
Department of Transportation. As a result, the State must
choose which ports will be the focus of its efforts. The 4 ports
at which the Department conducted its inspections in fiscal
year 1999 accounted for 3.5 million, or 64 percent, of the 5.5
million trucks entering Arizona during that fiscal year. By
stationing inspectors at these four ports, the Department had
access to the majority of trucks entering the State.
Similarly, the Department does not assign inspectors to loca-tions
already covered by United States Department of Agri-culture
inspectors. For example, the Department does not in-spect
trucks entering through the Nogales or San Luis federal
ports-of-entry on the Mexico-Arizona border.
n The Department works with California to maximize lim-ited
resources—During the course of this audit, the De-partment
reached an agreement with the State of California
under which California will provide monies for the Depart-ment
to begin conducting inspections at two additional
ports-of-entry. These operations, located at Douglas and
Duncan, commenced on July 17, 2000. California pursued
Finding I
12
OFFICE OF THE AUDITOR GENERAL
Source: Auditor General staff summary of information obtained from the Arizona Departments of
Agriculture and Transportation.
u
Fredonia
u u
Teec Nos Pos
u
u
Sanders
n
Topock
u
u
Ehrenberg
n
Springerville
u
Duncan
n
San Simon
n
n (2 Ports)
u
Lukeville
u
u n
(2 Ports)
Sasabe u Naco
u
Figure 1
State of Arizona
Ports-of-Entry
As of August 1, 2000
uPorts-of-entry where inspections are not conducted.
nPorts-of-entry where Department of Agriculture inspections are conducted as
of August 2000, including two ports located in Yuma.
Finding I
13
OFFICE OF THE AUDITOR GENERAL
this agreement with the Department to establish operations
at these additional ports, located in Duncan and Douglas, so
that they would provide pest detection and exclusion activi-ties
for truck traffic heading into California. Additionally, the
Department and the State of California regularly cooperate
and exchange information regarding trucks that have failed
inspection.
n The Department focuses on high-risk trucks—Because of
limited resources and in an effort to limit the burden on pri-vate
industry, the Department inspects only trucks meeting
specified criteria that pass through the ports-of-entry. For ex-ample,
the Department requires all trucks carrying agricul-tural
commodities and trucks originating from states with
known infestations of Red Imported Fire Ants to be in-spected,
while inspecting other trucks only as time and space
permits.
n The Department employs inspectors in the interior—
Even if a truck carrying a dangerous pest or plant disease is
not detected at a port, it may be detected by Department in-spectors
in Arizona’s interior. For example, a truck could en-ter
Arizona through a road not served by a port-of-entry.
Such trucks carrying agricultural products, or trucks that are
otherwise subject to Department inspection, are required un-der
A.R.S. §3-213, A.R.S. §3-214, and R3-4-201 to notify the
Department of their arrival even if they do not pass through a
port. Similarly, Department of Transportation staff located at
the 16 ports-of-entry that are not staffed by Department of
Agriculture inspectors notify the Department when trucks
carrying high-risk products enter the State. This allows the
Department to determine whether the truck should undergo
an inspection at its destination.
Some trucks avoid port inspection—Given the limited resources
available, the Department’s efforts cannot ensure that all at-risk
trucks receive port inspection. However, many of these situa-tions
are outside the Department’s control. For example:
n High volume periods provide opportunities to avoid in-spection—
Trucks may not receive port inspections during
high traffic periods. During these periods, Department of
Transportation personnel must allow trucks to pass through
Department appropri-ately
focuses on high-risk
trucks.
Finding I
14
OFFICE OF THE AUDITOR GENERAL
the ports-of-entry without any screening or inspection be-cause
the ports cannot physically accommodate the traffic.
This practice is necessary to prevent trucks from backing up
onto the highway and causing a traffic hazard. The Depart-ment
of Transportation reports that approximately 259,000
trucks passed through the 4 ports staffed by the Department
of Agriculture during fiscal year 1999 under these circum-stances.
Without extensive structural changes to the ports,
which would require significant funding, this practice will
continue and possibly grow in the future as truck traffic in-creases.
n Technology provides opportunities to avoid inspection—
Trucks may not receive port inspections if they use pre-clearance
technology. With encouragement from the federal
government, the Department of Transportation has installed
pre-clearance technology at 7 ports. This program, known as
PrePass, allows pre-approved trucks to bypass the ports at
highway speeds as long as they receive a signal from a com-puter
system to continue. In order to participate, trucks must
meet Department of Transportation criteria for truck safety,
weight, and driver compliance. The use of this technology is
expected to expand in the future to allow the fixed-capacity
ports-of-entry to accommodate increasing truck traffic and
reduce time-consuming stops for the private trucking com-panies.
The Arizona Department of Transportation reports
that approximately 364,000 trucks bypassed the 4 Depart-ment
ports-of-entry through the PrePass program in fiscal
year 1999.
Pre-clearance technology is appropriate for trucks carrying
many kinds of products, but trucks with agricultural prod-ucts
are an exception. PrePass literature directs trucks
equipped with the PrePass system that are hauling agricul-tural
products to stop for inspection. However, Department
management is concerned that this is not occurring. To help
address this concern, the Department is working with the
Department of Transportation and other stakeholders to de-velop
a policy prohibiting trucking companies who pre-dominately
haul agricultural commodities from participating
in the PrePass system in Arizona.
Finding I
15
OFFICE OF THE AUDITOR GENERAL
Figure 2: A Mexican Fruit
Fly
Source: Arizona Department of
Agriculture
Port-of-Entry Inspections Help
Prevent Expensive Infestations
Despite these limitations, inspections conducted at the ports-of-entry
have helped prevent costly pest infestations that have
plagued other states. Specifically, the port-of-entry inspections
have detected numerous harmful pests and plant diseases. Ad-ditionally,
as demonstrated by other states, pest infestations can
cost hundreds of millions of dollars to eradicate and pose a sig-nificant
danger to the agricultural industry in those states.
Ports-of-entry inspections identify harmful pests and plant dis-eases—
Department inspectors working at the ports-of-entry de-tect
pests and plant diseases that potentially could cause signifi-cant
damage if not prevented from entering or spreading
throughout Arizona. For example:
n Department inspectors detected and prevented over 2,300
high-risk pests from entering Arizona in 1999. This included
Mediterranean Fruit Flies, which have been described as the
world’s most threatening agricultural pest. Similarly, De-partment
inspectors have also detected California Red Scale,
which reduces citrus production and makes fruit unmarket-able.
n Department inspectors
working at the San Simon
port-of-entry prevented
Mexican Fruit Flies from
entering Arizona on a truck
carrying mangoes in March
2000. The mangoes originated
in Mexico and entered the
United States through Texas.
Mexican Fruit Flies attack
ripening fruit, making it in-edible
and potentially causing
millions of dollars in damage.
n Department inspectors have repeatedly detected Red Im-ported
Fire Ants at the ports. In addition to feeding on plants
and damaging electrical and irrigation systems, these ants
Finding I
16
OFFICE OF THE AUDITOR GENERAL
can aggressively attack people, livestock, and wild animals
with painful, repeated stings. Fourteen states, including Cali-fornia,
New Mexico, and the Southern states from Texas to
South Carolina have Red Imported Fire Ant infestations.
More information about Red Imported Fire Ants and Ari-zona’s
efforts to address this problem is provided in the
“Other Pertinent Information” section of this report, pages 29
through 33.
Undetected pests and diseases can cause expensive infesta-tions—
Other states’ experiences show that if pest and plant dis-eases
are not prevented from entering the State, the potential
resulting infestations can cause significant damage and cost mil-lions
of dollars to eradicate. For example:
n Florida’s citrus crop has been repeatedly decimated by an
outbreak of Citrus Canker, a highly contagious plant disease
caused by bacteria. It can destroy entire crops, but is not
harmful to humans. The most recent infestation has led to
four Florida counties being designated as federal disaster ar-eas.
Because there is no known cure for Citrus Canker, all in-fested
trees and trees within 1,900 feet of infested trees must
be destroyed to avoid spreading the disease. The latest out-break
has already claimed over 500,000 trees, and officials es-timate
that it will cost over $170 million to eradicate Citrus
Canker in Florida.
n California officials spent at least $328 million between 1975
and 1998 to address several infestations of Mediterranean
Fruit Flies. These flies attack ripening fruits or vegetables,
pierce the soft skin, and lay eggs in the puncture, thus mak-ing
the fruit inedible. Infestations are treated by aerial pesti-cide
spraying and releasing sterile flies to mate with the ac-tive
flies, decreasing the likelihood that they will produce off-spring.
If either of these pests were to become established in Arizona, the
State’s $100 million citrus industry could be jeopardized.
Infestations are expen-sive
to eradicate.
Finding I
17
OFFICE OF THE AUDITOR GENERAL
Opportunities Exist to
Enhance Inspection Activities
The costs of a potential infestation highlight the need for the in-spection
program to be as effective as possible. While the De-partment
has done a good job of targeting its resources, it can
take two additional steps to improve the program without incur-ring
significant expenses. Specifically:
P The Department should create new inspector positions and
consider staffing these positions by taking advantage of an
opportunity to reassign existing Department staff.
P The Department should work with the Department of
Transportation to supplement port inspection activities by
providing pest inspection training to Department of Trans-portation
port inspectors and mobile enforcement team
members.
P Likewise, the Department should continue to work with the
Department of Transportation and other stakeholders to en-sure
that trucks, which primarily carry agricultural com-modities,
are not allowed to use PrePass technology to avoid
agricultural inspections.
New inspector positions could enhance port activities—The
Department could benefit from creating new port inspection
positions. For example, the Department could assign new inspec-tors
to rove throughout the State as needed. Similarly, the De-partment
could station an inspector in Kingman who would in-spect
trucks that enter Arizona through the Topock and King-man
ports. Over a million trucks entered Arizona through the
Department of Transportation’s Topock and Kingman ports-of-entry
in 1999, ports which the Department currently does not
cover.
Although the Department has limited resources, there are oppor-tunities
to increase the number of port-of-entry inspectors within
existing resources. For example, this office previously recom-mended
centralizing the Department’s licensing functions (Audi-tor
General Report No. 00-05). When implemented, the Depart-
Finding I
18
OFFICE OF THE AUDITOR GENERAL
ment should reduce the number of personnel assigned to licens-ing.
The Department could then transfer some full-time-equivalent
employee positions to the Pest Exclusion and Man-agement
Program to serve as port-of-entry inspectors.
If the Department creates new roving inspector positions using
personnel reductions realized by implementing prior audit rec-ommendations,
it should incur no additional personnel costs. How-ever,
Department officials indicate that they might have to con-solidate
lower grade licensing FTE positions to create new,
higher grade port inspection positions and would need to pur-chase
vehicles for these inspectors at a one-time cost of approxi-mately
$22,000 each, and an additional $9,000 for annual vehicle
operation and travel costs per inspector.
Work with Department of Transportation to supplement port
inspection activities—The Department should continue with its
efforts to identify opportunities for increased cooperation with
the Department of Transportation, Motor Vehicle Division to
enhance its port inspection and pest detection activities. As re-quired
by Laws 2000, Chapter 343, the Departments of Agricul-ture
and Transportation have begun working to identify oppor-tunities
to cross-train port staff. By cross-training each agency’s
port staff, these staff should be able to perform both the required
pest and motor vehicle inspections on trucks entering the State
with the goal of increasing port inspection efficiency and reduc-ing
the time delay and burden on truck drivers. Additionally, the
Department should expand the training it provides to include
mobile Department of Transportation teams. These teams, which
processed over 17,000 trucks in 1999, periodically deploy at un-announced
locations including roads covered by ports after
working hours, roads within the State (to inspect intrastate traf-fic),
and roads not covered by a fixed port-of-entry; and perform
similar motor vehicle inspections as those performed by port
staff. Cross-training these teams would allow them to also per-form
some pest inspections on eligible trucks processed by these
mobile teams.
In addition to providing this training, the Department could also
participate on these mobile Department of Transportation in-spection
teams when time and resources allow. When appropri-ate,
the Department should provide staffing on these teams to
conduct pest inspections for eligible trucks, especially on roads
Finding I
19
OFFICE OF THE AUDITOR GENERAL
not covered by a fixed port-of-entry. Additionally, the Depart-ment
could use these opportunities to ensure the Department of
Transportation personnel appropriately perform pest inspec-tions.
Department of Transportation management has expressed
willingness to cooperate with the Department in this regard.
Agricultural trucks should be barred from PrePass—As previ-ously
discussed, trucks can bypass some ports-of-entry by using
pre-clearance technology known as PrePass. The Department is
currently working with the PrePass Steering Committee, the
group that sets PrePass policy in Arizona, to develop a policy to
prohibit trucking companies carrying agricultural commodities
90 percent of the time from participating in PrePass. The De-partment
should continue these efforts, which will help ensure
that trucks carrying agricultural commodities are inspected.
Finding I
20
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The Department should create new port-of-entry inspector
positions and assign these new inspector positions to high-traffic
ports not currently covered by the Department, such as
the Kingman and Topock ports. The Department should con-sider
creating these positions by reallocating some of the staff
positions saved or realized from centralizing its licensing
functions.
2. The Department should continue working with the Depart-ment
of Transportation to supplement port inspection activi-ties
by:
a. Providing training to the Department of Transportation’s
port inspectors and mobile enforcement teams; and
b. Participating on the Department of Transportation’s mo-bile
enforcement teams when time and resources allow.
3. The Department should continue working with Arizona’s
PrePass steering committee to develop a formal policy that
trucking companies hauling agricultural commodities 90
percent of the time are not allowed to participate in PrePass.
21
OFFICE OF THE AUDITOR GENERAL
FINDING II CURRENT FEES MAY NOT
SUPPORT COSTS TO ISSUE
PHYTO-SANITARY CERTIFICATES
The Department recovers only part of its costs for issuing phyto-sanitary
certificates, which are certificates that Arizona agricul-tural
producers sometimes need to export their products to other
states or countries. For interstate certificates, the Department
lacks statutory authority to assess a fee except under limited cir-cumstances.
For international certificates, the Department has
authority from the federal government to charge for the certifi-cate,
but the Department’s outdated fee schedule does not al-ways
fully recover the costs. Therefore, the Department needs to
continue with its efforts to identify its total costs to issue phyto-sanitary
certificates, and establish appropriate fees for federal
certificates, while the Legislature should consider granting the
Department authority to establish fees for interstate certificates.
Some States and Foreign
Countries Require
Phyto-Sanitary Certificates
Before allowing an agricultural product to be imported, other
states and foreign countries sometimes require a phyto-sanitary
certificate (certificate), which certifies that the product is free
from specified pests, diseases, and/or weeds. The Department
inspects agricultural commodities and issues interstate and fed-eral
certificates for Arizona producers to ship their products to
other states and countries. In fiscal year 1999, the Department
issued approximately 1,500 interstate certificates and over 4,000
federal certificates. The federal certificates, issued under an
agreement with the United States Department of Agriculture
(USDA), allow commodities to be exported to over 50 different
countries.
Other states and countries
sometimes require export
certificates.
Finding II
22
OFFICE OF THE AUDITOR GENERAL
Producers do not pay a fee for most interstate certificates. For
international certificates, the charge is $19 for shipments valued
at less than $1,250 and $30 for shipments valued at $1,250 or
more.
The Department Lacks
Authority to Charge Fees
for Most Interstate Certificates
The Department currently lacks statutory authority to charge
fees for most interstate certificates. In some cases, Department
inspectors spend considerable time traveling to inspections, in-specting,
and issuing interstate certificates, yet cannot charge a
fee for this service.
The Department does not recover its costs to issue most inter-state
certificates—Issuing a certificate can involve a considerable
amount of work. In order to issue interstate certificates, a De-partment
inspector might have to:
P Research the destination state’s import requirements,
P Travel to the producer’s location,
P Inspect the commodity, and
P Issue the interstate certificate.
However, the Department often does not collect a fee for this
service. While the Department began to collect cost information
on a limited number of phyto-sanitary certificates in April 2000,
detailed cost data was available for only 7 of the 258 interstate
phyto-sanitary certificates issued by Department inspectors be-tween
April and May 2000. However, the Department collected a
fee for only 1 of these 7 certificates. In total, the Department in-curred
over $140 in direct costs to issue all 7 certificates, yet it
was able to collect only $15 total in fees.
Finding II
23
OFFICE OF THE AUDITOR GENERAL
The Department lacks statutory authority to charge fees for
most interstate certificates—The Department lacks statutory
authority to assess fees for this service except under limited cir-cumstances.
Specifically, Arizona Revised Statutes do not au-thorize
the Department to charge fees for most of the interstate
certificates it issues. Rather, it only authorizes the Department to
set and collect fees for a few, isolated circumstances, including
nursery stock and seed inspections. For example, the Depart-ment
charges $10 to inspect a shipment of nursery stock. The
Department charged for approximately 124 nursery inspections
in fiscal year 1999. Similarly, the Department charges $50 to in-spect
plants for ozonium root rot. The Department conducted
approximately 8 ozonium root rot inspections in fiscal year 1999.
When the Department cannot recover its costs through fees, it
must use other sources of funding to support these activities,
including General Fund monies.
In comparison, other states contacted generally charge for all
interstate certificates. For example, Oregon charges $30 per cer-tificate,
plus $45 per hour (including travel time) with a one-hour
minimum. Similarly, Colorado charges $10 per certificate, plus
additional inspection charges if an inspection is required. Colo-rado’s
inspection charges are $32 per hour, $.20 per mile, and $2
per acre inspected.
The Department Needs
to Re-Examine Fees
for Federal Certificates
Although the Department is authorized to recover its costs of
issuing international certificates on behalf of the federal govern-ment,
its fees appear too low to recover costs. While the exact
cost of issuing these federal certificates is not known, reviews of
a sample of these certificates showed that total costs were con-siderably
higher than the total fees allowed.
Department does not always recoup its costs—The Depart-ment’s
fees for federal certificates do not appear sufficient to re-cover
costs, at least for lengthier, more detailed inspections. As
with interstate certificates, the process of issuing an interstate
certificate can be lengthy depending on the commodity, its loca-
Department has limited
authority to charge fees.
Finding II
24
OFFICE OF THE AUDITOR GENERAL
tion, and the destination country’s requirements. Detailed cost
information was available for only 22 of the 265 federal phyto-sanitary
certificates issued by Department inspectors between
April and May 2000. Based on a review of this data, we found
that the Department was able to recover its direct costs for 11
certificates, many of which represent more typical inspections.
However, direct costs for all 22 certificates were approximately
$940, but the fees collected by the Department totaled only $594.
Additionally, auditors identified several complex certificates that
required the Department to expend significant resources at a
considerable loss. For example:
n Six Department inspectors spent over 25 hours inspecting a
shipment of oranges destined for New Zealand earlier this
year. New Zealand’s phyto-sanitary requirements dictated
that the inspectors examine 1,800 pieces of fruit under a mi-croscope
before they could issue the certificate. As a result,
the Department spent over $400 in direct inspector time and
vehicle costs alone for this certificate, yet the Department’s
fee for this certificate is only $30.
n In a more typical case, a Department inspector drove 40 miles
round-trip and spent at least an hour to issue a less complex
federal certificate for a shipment of pecans. The Department
spent approximately $43 for the inspector’s salary and vehi-cle
costs alone, yet the Department’s fee for this certificate is
only $30.
USDA charges higher fees for the same certificates—The De-partment’s
fees are outdated. The Department historically
charged the same fees as USDA to issue federal certificates.
However, the USDA increased its fees from $19 to $23 for certifi-cates
on shipments valued at less than $1,250 and from $30 to $50
for certificates on shipments valued at more than $1,250 in order
to ensure that it recovers its costs. This was necessary because the
USDA does not receive an appropriation to provide this service.
Additionally, the USDA changed its rules in 1993 to allow states
that issue federal certificates to change their fees in order to fully
recoup their costs. However, the Department has not revised its
fees in years.
The USDA permits states to charge fees that fully recover their
costs for issuing federal certificates. The USDA also offers spe-
Finding II
25
OFFICE OF THE AUDITOR GENERAL
cific guidelines on what costs can be included and a formula for
arriving at the appropriate fees. However, the Department has
not used these guidelines and currently does not track its costs in
a manner that would allow it to apply the formula and revise its
fees accordingly.
The Department Should
Ensure Phyto-Sanitary Certificates
Cover Its Costs
To ensure that the Department recovers its costs for issuing
phyto-sanitary certificates, it needs to establish appropriate fees.
First, the Department should continue with its efforts to identify
its total costs for issuing certificates, including complex certifi-cates,
using federal guidelines. Based on the results, the Legisla-ture
should consider granting statutory authority to the Depart-ment
to establish fees for issuing all interstate certificates. Like-wise,
the Department should establish appropriate fees as war-ranted
for issuing federal certificates.
The Department should identify its total costs—In order to es-tablish
appropriate fees, the Department should identify its total
costs to issue interstate and federal certificates, respectively. As
previously discussed, 7 Code of Federal Regulations §354.3 pro-vides
a formula for states to use to identify their total costs. This
formula is thorough, requiring states to consider both their direct
costs (such as inspectors’ time and transportation) and indirect
costs (such as support and administrative costs). Therefore, while
the federal government requires states to use this formula to
identify costs for issuing only federal certificates, the Department
could also use it as a model to identify interstate certificate costs.
This would be consistent with other states, such as Oregon,
Washington, and Florida, who charge the same fee schedule for
issuing interstate certificates as they charge for issuing federal
certificates.
The Legislature should consider granting statutory authority to
set fees for all interstate certificates—Based on the Department’s
cost analysis for issuing interstate certificates, the Legislature
Department needs to iden-tify
its total costs for issu-ing
interstate and federal
certificates.
Finding II
26
OFFICE OF THE AUDITOR GENERAL
should consider granting statutory authority to the Department
to charge fees for issuing all interstate certificates. Specifically:
P The Legislature should consider establishing a maximum fee
in statute and giving the Department the authority to set the
actual fees in administrative rule, not to exceed the maximum
set in statue. This would allow the Department to revise these
fees as its costs to issue interstate certificates change.
P Additionally, the Legislature should also consider allowing
the Department to assess separate mileage and/or inspection
fees similar to other states. For example, New Mexico charges
a $5 flat fee to issue certificates, plus $22 per hour and $.30
per mile if an inspection is required to issue the certificate.
Oregon, Washington, Colorado, and Florida similarly charge
a mileage and/or hourly labor fee in addition to their flat cer-tificate
fee.
Although other states assess separate mileage and/or inspec-tion
fees, Department officials indicate that they would prefer
to charge only flat fees in order to avoid the cost of develop-ing
and maintaining administrative processes to track inspec-tor
and vehicle costs for each inspection, and to bill custom-ers.
The Department should re-examine its fees for issuing federal
certificates—After identifying its costs, the Department should
similarly act to adjust its fees for issuing federal certificates, if
appropriate, to more consistently recover its costs. Specifically,
the Department should adjust its fees in accordance with the
federal guidelines. The Department has the option of charging
flat fees or an hourly fee for all federal certificates. However, as
with interstate certificates, the Department indicates that it pre-fers
to charge flat fees.
Finding II
27
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The Department should continue with its efforts to identify
its total costs for issuing interstate and federal phyto-sanitary
certificates, respectively, by applying the federal cost formula
in 7 Code of Federal Reguations §354.3.
2. Once the Department has determined its costs, the Legisla-ture
should consider granting statutory authority to the De-partment
to set fees in administrative rule not to exceed a
maximum amount determined by the Legislature for issuing
interstate phyto-sanitary certificates. The Legislature might
also consider granting specific authority to assess separate
mileage and/or hourly labor fees.
3. If the Department receives statutory authority, it should es-tablish
fees for issuing interstate phyto-sanitary certificates in
administrative rules.
4. If the Department determines that it does not consistently
recover its costs, the Department should revise its fees for is-suing
federal phyto-sanitary certificates.
28
OFFICE OF THE AUDITOR GENERAL
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29
OFFICE OF THE AUDITOR GENERAL
Figure 3: A Red Imported Fire
Ant
Source: Arizona Department of
Agriculture
OTHER PERTINENT INFORMATION
During the audit, other pertinent information was gathered re-garding
the Red Imported Fire Ant and the Department of Agri-culture’s
current efforts to prevent this pest from becoming es-tablished
in Arizona.
The Red Imported
Fire Ant
As part of its Pest Exclusion and Management program, the De-partment
attempts to prevent various pests from entering the
State and becoming established so as to prevent the potential
damage that these pests can cause to the agricultural industry.
The Red Imported Fire Ant (RIFA), which is firmly entrenched in
several Southern states, causes severe damage to agriculture,
wildlife, people, and property. As a result of this potential for
harm, the Department is especially focused on detecting and
preventing RIFA from becoming established in the State. Addi-tionally,
the Department has taken an active role in eradicating
any populations that have been detected in Arizona, including
treating ten separate sites in the State during fiscal year 2000.
Red Imported Fire Ants—The
Red Imported Fire Ant (RIFA)
is not native to the United
States, but was accidentally
introduced into Alabama in
the 1930’s from South America.
While difficult to differentiate
from ordinary ants, RIFA are
1/8” to 1/4” long and reddish
brown in color, but are best
characterized by their
aggressive behavior and
mound-shaped nests. Figure 4
(see page 30) illustrates a red imported fire ant. Once established,
RIFA colonies can average between 100,000 and 500,000 ants and
Other Pertinent Information
30
OFFICE OF THE AUDITOR GENERAL
these ants aggressively protect their mounds when disturbed,
attacking people, livestock, and wild animals with painful, re-peated
stings. The United States Department of Agriculture
(USDA), Agricultural Research Service reports that approxi-mately
40 percent of the population in RIFA-infested areas is
stung each year, with about 1 percent of the population becom-ing
sensitive to these attacks and requiring medical care. Addi-tionally,
the ants feed on seeds and seedlings, damage electrical
and irrigation systems, and cause problems in crop or nursery
fields because their mounds create difficulties for farm machin-ery.
RIFA currently infests more than 310 million acres in the country
and can be found in 14 states. Figure 4 illustrates the infected
areas, which lie exclusively in the Southeast and Southwest. Sev-eral
states, including Florida, Georgia, and Alabama, are
Figure 4
United States Department of Agriculture
Reported Distribution of Red Imported Fire Ants
As of June 2, 2000
Source: Reported Survey and Distribution of Red Imported Fire Ants data retrieved from the National
Agricultural Pest Information System. The Center for Environmental and Regulatory Information
Systems, United States Department of Agriculture, does not certify to the accuracy or complete-ness
of this map.
RIFAs endanger people,
plants, and animals.
Other Pertinent Information
31
OFFICE OF THE AUDITOR GENERAL
completely infested, while other states, such as Oklahoma, Texas,
and California, are only partially infested. However, even the
partially infested states have expended and will continue to ex-pend
millions of dollars annually to control these infestations.
According to a Texas Fire Ant Research and Management Plan
study released in 1999, damage caused by and management of
RIFA in the 5 major urban areas of the state cost more than $580
million in 1998.1 Three counties in California are infested and
California has budgeted over $10 million to fund fire ant eradi-cation
programs in fiscal year 2001 alone. However, experts
agree that once RIFA becomes established, eradication becomes
very difficult. For example, the Texas Department of Agriculture
has attempted to eradicate the ant from a 6-block area in Lub-bock,
Texas, for more than 10 years, yet the infestation persists.
Arizona’s conducive climate necessitates aggressive measures—
Arizona considers itself to be a RIFA-free state because all known
incidences of RIFA in Arizona underwent or are under active
eradication. However, several parts of Arizona are conducive to
RIFA establishment, increasing the importance of Department
efforts to detect and prevent the establishment of this pest in the
State. According to experts, geographic areas with warm sum-mers
and cool winters, known avenues of RIFA introduction
such as containerized nursery stock, and large or rapidly grow-ing
populations that result in an increased need for nursery
stock, should be considered at high risk for RIFA introduction.
RIFA thrives in areas that regularly receive water, such as golf
courses, lawns, and sports fields. Additionally, the interstate
transport of various agricultural, nursery, and other products
where RIFA is found facilitates their expansion.
Given the potential for RIFA infestation in Arizona and the mil-lions
of dollars that an infestation could cost in damage and
eradication efforts, the Department has adopted a progressive
and prevention-oriented approach in addressing RIFA. For ex-ample,
through its port inspection efforts, the Department at-
1 The Texas Fire Ant Research and Management Plan was funded by the
Texas legislature in 1997 for the first two years of a six-year plan. The
funding supports research, education, and regulatory programs con-ducted
at Texas A & M University (the Texas Agricultural Experiment
Station and the Texas Agricultural Extension Service); Texas Tech Uni-versity;
the University of Texas at Austin; and the Texas Department of
Agriculture.
Arizona is at high risk for
RIFA infestation.
Other Pertinent Information
32
OFFICE OF THE AUDITOR GENERAL
tempts to intercept RIFA traveling on trucks before they can en-ter
the State. From July through December 1999, the Department
reported rejecting 296 commercial trucks infested with RIFA at
Arizona’s ports-of-entry. In fiscal year 1999, the Department re-ports
surveying 60 high-risk nurseries for the presence of RIFA
and intercepting the ant at 7 of these nurseries. Additionally, the
Department reported in January 2000 that it was continuing with
its exclusion and detection activities, including port-of-entry in-spections,
inspection of high-risk conveyances, and trapping and
survey of all high-risk sites (nurseries, landscape operations, and
golf courses).
RIFA concerns have also resulted in specific funding from the
Governor and Legislature to address this problem. For example,
due to RIFA public health concerns and confirmation of estab-lished
infestations in California, Governor Jane Dee Hull released
$200,000 in state emergency funds in January 1999 to enhance the
Department’s ongoing efforts to combat this pest. As a result, the
Department reported adding 10 additional inspectors and 1
laboratory technician to assist in RIFA detection efforts. Addi-tionally,
the Legislature approved a line-item appropriation of
$330,000 for fiscal year 2000 and $333,000 for fiscal year 2001 to
combat the ant. This funding is significant as the Department
estimates it spent approximately $583,000 during fiscal year 1999
to address RIFA issues.
Department actively involved in eradicating RIFA popula-tions—
Despite Department efforts to detect and prevent the es-tablishment
of RIFA in the State, various populations have been
identified, requiring the Department to take various actions to
eradicate them. For example, the Department was actively in-volved
in treating ten populations for RIFA during fiscal year
2000. These populations included:
n Phoenix motel and nearby restaurant—Department in-spectors
detected this RIFA population in June 1999 while in-specting
a truck at the motel. A survey of the motel not only
found the ant, but also determined that the ant had spread to
a nearby restaurant and adjacent property. The Department
reports eradicating this population, but will continue with
precautionary treatments until October 2000.
Other Pertinent Information
33
OFFICE OF THE AUDITOR GENERAL
n Nurseries in Phoenix, Gilbert, and Mesa—While several
nurseries in the State have experienced problems with RIFA
and have required Department assistance to eradicate colo-nies,
only three nurseries have recently undergone active
treatment for RIFA. Nurseries are at higher risk for RIFA in-festations
due to nursery products that are imported from
RIFA-infested areas of the country and the redistribution of
this product to various areas of the State. The Department ac-tively
surveys nurseries around the State for RIFAs.
n Cibola High School in Yuma—In July 1999, major RIFA
activity of over 8,200 mounds was discovered at Yuma’s Ci-bola
High School. Department officials suspect that this
population may be more than 10 years old, which coincides
with the school’s construction and supports the idea that the
ant may have been introduced via out-of-state earth-moving
equipment or nursery product. To date, the Yuma Union
High School District reports spending over $100,000 to ad-dress
the infestation. As of August 2000, eradication efforts
had reduced the number of mounds to nine.
OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
Agency Response
OFFICE OF THE AUDITOR GENERAL
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September 5, 2000
The Honorable Debra K. Davenport
Auditor General
Office of the Auditor General
2910 North 44th Street, Suite 410
Phoenix, Arizona 85018
Dear Ms. Davenport:
Enclosed is the Arizona Department of Agriculture’s response to the Arizona Department of
Agriculture’s Pest Exclusion and Management Audit. The Department agrees in general with the
findings and recommendations of the audit team.
The Department is pleased to note that it has already begun to identify many ways to improve
upon the issues documented in your report and has begun implementing the recommendations
where possible. In most instances, these efforts were underway before the recommendations
were received, and we have accept them as endorsements of responsible management directives
already underway.
We extend our appreciation to the audit team for their professionalism and attention to detail. I
certainly appreciate their willingness to seek out the Department’s input and clarification of
issues identified in this report.
Sincerely,
Sheldon R. Jones
Director
1
AUDITOR GENERAL’S RECOMMENDATIONS
AGENCY RESPONSE
Overview:
The Arizona Department of Agriculture (ADA) agrees in general with the findings and
recommendations of the audit team and would like to thank the Auditor General’s staff
for the professional manner in which the audit was performed.
We believe the ADA, while it continues to identify methods of improving its delivery of
service to Arizona’s growing agricultural industry and the public as a whole, is a good
example of how government should strive to work. We take very seriously our mission
and our charge to regulate and support Arizona agriculture in manner that promotes
farming, ranching and agribusiness while protecting consumers and natural resources.
While this cabinet level agency was created only ten years ago, to serve and regulate
Arizona’s agriculture industry, a number of things have and continue to change about the
industry we serve. Foremost is the changing face of our customers, which reflects the
industry as a whole. Arizona is internationally renowned for its diverse agricultural
production. From artichokes to cattle, cotton and citrus to shrimp and watermelons,
Arizona is continuously increasing its agricultural diversity. It is entirely fascinating to
observe the customers that call on us every day. The ADA is constantly asked to service
more than the program crops of wheat, cattle, cotton and dairy. Ten years ago, the
aquaculture, ratite, custom slaughter, wine and massive nursery industry did not exist as
they do today. Because of the changing face of our customers and the public’s demands
for faster, more efficient service, the ADA recognizes more must be done to meet the
challenges we face today and those we will face in the future.
The findings and recommendations of this report will be incorporated into our
discussions with other state agencies and other agency stakeholders to further refine the
system for meeting the dynamic and ever changing needs of Arizona’s agriculture
industry and the public at large. It is important to note, also, that this report provides
warranted endorsement of the Department’s FY2002-2003 budget request, which seeks
funds to increase the number of employees designated to work at Arizona’s ports-of-entry.
The findings and recommendations make mention of the unprecedented agreement the
Department has with the California Department of Food & Agriculture to provide for
Department presence at Duncan and Douglas; however, it neglects to mention the amount
of the agreement which is $350,000. California recognizes the benefit, but the benefit
accrues equally to Arizona taxpayers, at no cost to them.
2
Finding I: Port-of-Entry Inspections Help State Avoid Costly Pest Infestations
Recommendation 1: The Department should create new port-of-entry inspector
positions and assign these new inspector positions to high-traffic
ports not currently covered by the Department, such as
the Kingman and Topock ports. The Department should
consider creating these positions by reallocating some of the
staff positions saved or realized from centralizing its licensing
functions.
Agency Response: The finding of the Auditor General is agreed to and a different
method of dealing with the finding will be implemented.
The Department appreciates the Auditor General’s recognition of
the valuable service the Pest Exclusion and Management program
provides to Arizona’s citizens. Pest eradication and control costs in
neighboring states climb higher into the millions of dollars each
year. Often times, this cost is paid by state and local governments
and is all too frequently passed onto citizens in the cost of over-the-
counter pest exclusion chemical products, extermination
services, and medical treatment expenses.
The Department agrees that more of its resources need to be
strategically placed at high-traffic ports of entry, like Kingman and
Topock. The Department has taken steps to implement this
recommendation in a different manner, however. It is unlikely staff
positions saved by centralizing its licensing functions, on its own,
solve this identified problem.
Therefore, the Department has submitted a budget request for
funds to staff existing ports-of-entry at Duncan and Douglas
twenty-four hours a day as opposed to sixteen hours a day, and to
staff the Kingman port-of-entry fully by 2003. The Department
will measure the success of its Kingman inspections and will use
that data to justify staffing the station at Topock in FY2004.
Included in this request are companion requests for additional
burdens created on Survey & Detection, the District offices and
our laboratory, by virtue of increased detection capability at our
ports.
3
Recommendation 2: The Department should continue working with the
Department of Transportation to supplement port inspection
activities by:
a. Providing training to the Department of Transportation
port inspectors and mobile enforcement teams; and
b. Participating on the Department of Transportation’s
mobile enforcement teams when time and resources allow.
Agency Response: The finding of the Auditor General is agreed to and the audit
recommendations will be implemented.
The Arizona Department of Agriculture has already begun
implementing this recommendation. The Department is presently
working with the Arizona Department of Transportation to develop
a revised Interagency Agreement, and where possible, the two
Departments agree that port inspection activities can be
supplemented by supplying pest identification training for
Transportation’s many port employees.
We see value in participating with specifically targeted exercises.
Cross training will generate awareness to recognize that an
incidence discovered by one agency is of value to the other. At a
very simple level of example, DOT, if aware, could direct a load to
one of our designated holding areas.
Recommendation 3: The Department should continue working
with Arizona’s PrePass steering committee to develop a formal
policy that trucking companies hauling agricultural
commodities 90 percent of the time are not allowed to
participate in PrePass.
Agency Response: The finding of the Auditor General is agreed to and the
recommendation will be implemented.
The Department appreciates the recognition the Auditor General
has made of the threats inherent with Arizona’s PrePass program.
The Department will continue its work with the PrePass steering
committee to formalize a position on the eligibility of agricultural
carriers.
Finding II: Current Fees May Not Support Costs to Issue Phyto-sanitary
Certificates
4
Recommendation 1: The Department should continue with its efforts to identify its
total costs for issuing interstate and federal phyto-sanitary
certificates, respectively, by applying the federal cost formula
in 7 Code of Federal Regulations §354.3.
Agency Response: The finding of the Auditor General is agreed to and the
recommendation will be implemented.
As the ADA is in the preliminary stages of determining the actual
costs of issuing interstate and federal phyto-sanitary certificates,
the Department has already discovered that the fees being charged
for such services are not sufficient to cover their costs. The
Department will continue building historical cost figures to
establish the average cost of these two services.
Recommendation 2: Once the Department has determined its costs, the Legislature
should consider granting statutory authority to the
Department to set fees in administrative rule not to exceed a
maximum amount determined by the Legislature for issuing
interstate phyto-sanitary certificates. The Legislature might
also consider granting specific authority to asses separate
mileage and/or hourly labor fees.
Agency Response: The finding of the Auditor General is agreed to and the
recommendation will be implemented consistent with Legislative
mandate.
The ADA will make every effort to inform the Legislature of the
cost of issuing interstate phyto-sanitary certificates so it may adjust
the statutory authority of fees charged for issuing them.
Recommendation 3: If the Department receives statutory authority, it should
establish fees for issuing interstate phyto-sanitary certificates
in administrative rules.
Agency Response: The finding of the Auditor General is agreed to and the
recommendation will be implemented.
The ADA will certainly develop administrative rules consistent
with Legislative mandate. Should the Legislature grant the
Department the authority to establish the fees for issuing interstate
phyto-sanitary certificates, the Department will fulfill its obligation
to the public by establishing administrative rules that are consistent
with the law.
5
Recommendation 4: If the Department determines that it does not consistently
recover its costs, the Department should revise its fees for
issuing federal phyto-sanitary certificates.
Agency Response: The finding of the Auditor General is agreed to and the
recommendation will be implemented.
The Department will make every effort to determine the actual cost
associated with issuing federal phyto-sanitary certificates, and if
the fees being charged for this valuable service do not meet the
cost, the Department will revise its fee structure to recover its
costs.
Other Performance Audit Reports Issued Within
the Last 12 Months
99-13 Board of Psychologist Examiners
99-14 Arizona Council for the Hearing
Impaired
99-15 Arizona Board of Dental Examiners
99-16 Department of Building and
Fire Safety
99-17 Department of Health Services’
Tobacco Education and Prevention
Program
99-18 Department of Health Services—
Bureau of Epidemiology and
Disease Control Services
99-19 Department of Health Services—
Sunset Factors
99-20 Arizona State Board of Accountancy
99-21 Department of Environmental
Quality—Aquifer Protection Permit
Program, Water Quality Assurance
Revolving Fund Program, and
Underground Storage Tank Program
99-22 Arizona Department of Transportation
A+B Bidding
00-1 Healthy Families Program
00-2 Behavioral Health Services—
Interagency Coordination of Services
00-3 Arizona’s Family Literacy Program
00-4 Family Builders Pilot Program
00-5 Department of Agriculture—
Licensing Functions
00-6 Board of Medical Student Loans
00-7 Department of Public Safety—
Aviation Section
00-8 Department of Agriculture—
Animal Disease, Ownership and
Welfare Protection Program
00-9 Arizona Naturopathic Physicians
Board of Medical Examiners
00-10 Department of Agriculture—
Food Safety and Quality Assurance
Program and Non-Food Product
Quality Assurance Program
00-11 Arizona Office of Tourism
00-12 Department of Public Safety—
Scientific Analysis Bureau
Future Performance Audit Reports
Department of Agriculture—Commodity Development and
Promotion Program
Department of Agriculture—State Agricultural Laboratory
Department of Agriculture—Sunset Factors
Arizona State Boxing Commission