U.S. Department of Agriculture
Office of Inspector General
Great Plains Region
Audit Report
Farm Service Agency
Disposition of Nonfat Dry Milk
Report No. 03099-197-KC
September 2006
UNITED STATES DEPARTMENT OF AGRICULTURE
OFFICE OF INSPECTOR GENERAL
Washington D.C. 20250
/s/
USDA/OIG-A/03099-197-KC
Page i
Executive Summary
Farm Service Agency, Disposition of Nonfat Dry Milk
(Audit Report No. 03099-197-KC)
Results in Brief
The Farm Service Agency (FSA) acquires various surplus and
price-supported agricultural commodities, including dairy products that
are used to provide food assistance through domestic and foreign aid
programs. As part of its mission, the Commodity Credit Corporation
(CCC), using FSA personnel, helps in the orderly distribution of these
commodities. FSA’s Commodity Operations handles the acquisition,
procurement, storage, transportation, disposition, and distribution of the
commodities until they are used in domestic or foreign feeding
programs or sold by CCC at announced or negotiated prices or through
competitive bids. CCC is authorized to donate food commodities
acquired through price support programs or from purchases in the
commercial marketplace to federal, State and private agencies. Private
voluntary organizations distribute many of the commodities overseas.
Under certain circumstances CCC can donate commodities for
research.
On May 12, 2005, the former FSA Administrator requested that the
Office of Inspector General (OIG) perform a review of two incidents
related to the disposition of CCC-owned Nonfat Dry Milk (NDM). One
incident, in 2005, involved the sale of 15 million pounds of NDM to
Mississippi State University (MSU). The Administrator was concerned
that the sale had been made in a manner contrary to the legal advice of
the Office of the General Counsel (OGC). Because of his concerns, the
contract was voided and NDM shipmen