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Report to Congressional Requesters: 

February 2005: 

Mad Cow Disease: 

FDA's Management of the Feed Ban Has Improved, but Oversight Weaknesses 
Continue to Limit Program Effectiveness: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-101]: 

GAO Highlights: 

Highlights of GAO-05-101, a report to congressional requesters: 

Why GAO Did This Study: 

More than 5 million cattle across Europe have been killed to stop the 
spread of bovine spongiform encephalopathy (BSE), commonly called mad 
cow disease. Found in 26 countries, including Canada and the United 
States, BSE is believed to spread through animal feed that contains 
protein from BSE-infected animals. Consuming meat from infected cattle 
has also been linked to the deaths of about 150 people worldwide. In 
1997, the Food and Drug Administration (FDA) issued a feed-ban rule 
prohibiting certain animal protein (prohibited material) in feed for 
cattle and other ruminant animals. FDA and 38 states inspect firms in 
the feed industry to enforce this critical firewall against BSE. In 
2002, GAO reported a number of weaknesses in FDAs enforcement of the 
feed ban and recommended corrective actions. This report looks at FDAs 
efforts since 2002 to ensure industry compliance with the feed ban and 
protect U.S. cattle. 

What GAO Found: 

FDA has made needed improvements to its management and oversight of the 
feed-ban rule in response to GAOs 2002 report, but program weaknesses 
continue to limit the effectiveness of the ban and place U.S. cattle at 
risk of spreading BSE. Improvements made include FDA establishing a 
uniform method of conducting compliance inspections and training FDA 
inspectors, as well as state inspectors who carry out inspections under 
agreements with FDA, on the new method. FDA also implemented new data-
entry procedures that are designed to more reliably track feed-ban 
inspection results. Consequently, FDA has a better management tool for 
overseeing compliance with the feed-ban rule and a data system that 
better conforms to standard database management practices. However, 
various program weaknesses continue to undermine the nations firewall 
against BSE. For example: 

* FDA acknowledges that there are more feed manufacturers and 
transporters, on-farm mixers, and other feed industry businesses that 
are subject to the feed ban than the approximately 14,800 firms 
inspected to date; however, it has no uniform approach for identifying 
additional firms. 

* FDA has not reinspected approximately 2,800, or about 19 percent, of 
those businesses, in 5 or more years; several hundred are potentially 
high risk. FDA does not know whether those businesses now use 
prohibited material in their feed. 

* FDAs feed-ban inspection guidance does not include instructions to 
routinely sample cattle feed to test for potentially prohibited 
material as part of the compliance inspection. Instead, it includes 
guidance for inspectors to visually examine facilities and equipment 
and review invoices and other documents. 

* Feed intended for export is not required to carry a caution label Do 
not feed to cattle or other ruminants, when the label would be 
required if the feed were sold domestically. Without that statement, 
feed containing prohibited material could be inadvertently or 
intentionally diverted back to U.S. cattle or given to foreign cattle. 

* FDA has not always alerted USDA and states when it learned that 
cattle may have been given feed that contained prohibited material. 
This lapse has been occurring even though FDAs guidance calls for such 
communication. 

Although research suggests that cattle can get BSE from ingesting even 
a small amount of infected material, inspectors do not routinely 
inspect or review cleanout procedures for vehicles used to haul cattle 
feed. 

What GAO Recommends: 

GAO recommends FDA, among other things, develop procedures for finding 
additional firms subject to the feed-ban and using tests to augment 
inspections. FDA said the study was thorough but disagreed on four of 
nine recommendations. GAO continues to believe that, given the 
discovery of BSE in North America and the oversight gaps described in 
the report, the recommended actions are needed to protect U.S. cattle 
from BSE. 

www.gao.gov/cgi-bin/getrpt?GAO-05-101. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robert A. Robinson at 
(202) 512-3841 or robinsonr@gao.gov. 

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

FDA Has Taken Important Steps to Improve Implementation of the Feed 
Ban: 

Program Weaknesses Continue to Limit the Effectiveness of FDA's Animal 
Feed Ban: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: GAO's Analysis of the Status of Actions on Recommendations 
to FDA in Our January 2002 Report: 

Appendix III: GAO's Summary of FDA's and USDA's Actions in Response to 
the Two Cases of BSE Discovered in North America in 2003: 

Appendix IV: Survey of State Agencies: 

Appendix V: Chronology of FDA's Feed Ban and Proposed Rulemakings: 

Appendix VI: Comments from the Food and Drug Administration: 

GAO Comments: 

Appendix VII: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Staff Acknowledgments: 

Tables: 

Table 1: Number of Firms Inspected by FDA and States for Compliance 
with the Feed-Ban Rule, by Firm Type, Fiscal Year 2004: 

Table 2: Number of Firms FDA Has Identified that Are Subject to the 
Feed Ban, by Firm Type, as of the End of Fiscal Year 2004: 

Abbreviations: 

APHIS: Animal and Plant Health Inspection: 

BSE: bovine spongiform encephalopathy: 

DNA: deoxyribonucleic acid: 

FACTS: Field Accomplishments and Compliance Tracking System: 

FDA: Food and Drug Administration: 

FSIS: Food Safety and Inspection Service: 

PCR: polymerase chain reaction: 

TSE: transmissible spongiform encephalopathy: 

USDA: United States Department of Agriculture: 

vCJD: variant Creutzfeldt-Jacob disease: 

Letter February 25, 2005: 

The Honorable Saxby Chambliss: 
Chairman: 
The Honorable Tom Harkin: 
Ranking Member: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate: 

The Honorable Thad Cochran: 
The Honorable Richard J. Durbin: 
United States Senate: 

Bovine spongiform encephalopathy (BSE), commonly known as mad cow 
disease, is an always fatal neurodegenerative animal disease that has 
been found in cattle in 26 countries since it was first identified in 
the United Kingdom in 1986. In December 2003, the United States 
discovered its first case of BSE in a cow in Washington State. The U.S. 
Department of Agriculture (USDA) later determined that this cow was 
imported from Canada. The agent believed to be responsible for BSE is a 
malformed type of protein called a prion, found in certain tissue-- 
particularly brain and central nervous system tissue--of infected 
animals. Cattle contract BSE by eating feed derived from the remains of 
BSE-infected animals.[Footnote 1] In Europe, more than 5 million head 
of cattle have been killed to thwart the spread of the disease. 
Scientists also generally believe that a fatal disease in humans--knows 
as variant Creutzfeldt-Jacob Disease (vCJD)--is linked to eating beef 
contaminated with the malformed protein. Research suggests that vCJD is 
difficult for humans to contract--about 150 people have died worldwide 
from vCJD. Both diseases have long incubation periods during which they 
are undetectable--2 to 8 years in cattle and possibly up to 30 years in 
humans. 

USDA is primarily responsible for detecting the disease in cattle, and 
the Department of Health and Human Services' Food and Drug 
Administration (FDA) is primarily responsible for preventing its 
introduction and spread through animal feed. Both agencies recognize 
the importance of preventing BSE from becoming established in the 
United States--not only to protect the safety of the U.S. food supply 
but also to protect the economic viability of the $70 billion U.S. beef 
industry. With 95 million head of cattle, the United States is the 
world's largest beef producer, exporting a record 2.6 billion pounds of 
beef, valued at over $3.1 billion, in 2003. In January 2002, we 
reported that the potential impact of even a small outbreak of BSE in 
the United States could be economically devastating.[Footnote 2] 
Indeed, between January and September 2004, the industry lost more than 
80 percent of its export trade, or an estimated $2 billion, following 
the discovery of the one BSE-infected animal in December 2003. Although 
most countries stopped importing U.S. beef for some period of time, 
domestic consumption did not drop. In fact, changing dietary trends 
have led to increased U.S. beef consumption in the last several years. 
The United States is in discussions with its major trading partners 
about renewing U.S. beef imports. 

To protect U.S. cattle and consumers, USDA and FDA have put in place 
three primary firewalls. These include the following: 

* Controls over imports. Since 1989, USDA has prohibited the 
importation of live cattle and certain cattle products from countries 
where BSE is known to exist. In 1992, FDA began identifying medical 
products and other FDA-regulated foods and products derived from cattle 
from countries with BSE. USDA and FDA, in cooperation with the 
Department of Homeland Security's Customs and Border Protection, screen 
shipments of such products. 

* Animal surveillance. Since 1990, to detect BSE, USDA has been testing 
brain tissue, primarily from cattle that exhibit neurological symptoms 
and adult cattle that die from unknown causes, as well as from cattle 
slaughtered for meat. 

* Feed ban.[Footnote 3] In 1997, FDA banned the use of most proteins 
derived from mammals in feed intended for cattle and other ruminants to 
keep potentially infectious tissue out of cattle feed.[Footnote 4]

This report focuses on FDA's implementation and enforcement of the 
animal feed-ban rule, which many industry and consumer groups consider 
the most important firewall against the introduction and spread of BSE 
in the United States. 

Under the feed-ban rule, FDA requires firms to (1) label feed and feed 
ingredients that contain or may contain most proteins from most mammals 
(referred to hereafter as prohibited material) with a cautionary 
statement that reads "Do not feed to cattle or other ruminants," (2) 
have procedures to protect against commingling or cross-contamination 
if they handle both prohibited and nonprohibited material for feed and 
feed ingredients, and (3) maintain records so that feed and feed 
ingredients that contain or may contain prohibited material can be 
tracked from receipt through disposition.[Footnote 5] Firms that 
transport both types of materials also must have procedures to prevent 
commingling. 

FDA's feed-ban rule applies to feed for cattle and other ruminants, 
such as sheep and goats. The material prohibited for use in cattle feed 
may continue to be used in pet food and in feed for poultry, swine, 
horses, and other nonruminant animals. 

The feed-ban rule designates a number of cattle-and other animal- 
derived items as exempt from the ban, and hence allowable in cattle 
feed. These exempt items include blood and blood products, plate waste, 
gelatin, and milk and milk proteins.[Footnote 6] In addition, poultry 
litter (a protein source comprised of poultry waste material, bedding, 
and spilled feed) is allowed in cattle feed. FDA has published, but not 
taken action on, several advance notices of proposed rulemaking for 
revising the ban to, among other things, end most of the exemptions and 
require that feed manufacturers and other such firms use dedicated 
equipment for cattle feed. 

To oversee compliance with the feed ban, inspectors from FDA and the 38 
states that have contracts or agreements with FDA periodically inspect 
firms, using FDA guidance and an inspection form that FDA developed to 
document inspection results.[Footnote 7] Since 1997, FDA and states 
have identified and inspected about 14,800 firms that are subject to 
the feed-ban rule. The types of firms inspected include renderers, 
protein blenders, feed mills, farms that mix their own feed, feed 
transporters, pet food manufacturers, and other firms subject to the 
feed-ban rule.[Footnote 8] In 2002, FDA began using a risk-based 
priority approach to determine which firms to inspect annually. Under 
this approach, FDA has designated firms that manufacture, blend, and 
otherwise directly process with prohibited material as the highest risk 
for potentially exposing U.S. cattle to BSE. Firms that do not process 
with prohibited material are designated as lower risk. FDA had 
designated about 570 firms as high risk in fiscal year 2004. FDA 
assigns a list of high-risk firms for inspection to each of its 
district offices and gives the district offices some discretion in 
deciding which lower risk firms to inspect. FDA also negotiates with 
states over the number of inspections that FDA will pay for under 
contract. States conduct about 70 percent of feed-ban compliance 
inspections. When FDA determines that firms are out of compliance, it 
can issue warning letters, encourage firms to conduct voluntary 
recalls, or seek court orders to seize feed or feed ingredients. FDA 
district offices review inspection results for accuracy and enter 
inspection information into FDA's central data system--the Field 
Accomplishments and Compliance Tracking System (FACTS)--and 
periodically post inspection results on FDA's Web site. 

Our January 2002 report identified a number of weaknesses in federal 
BSE prevention and detection efforts.[Footnote 9] Regarding the feed 
ban, we reported that FDA had not promptly taken actions, such as 
issuing warning letters or reinspecting firms that were out of 
compliance, to enforce the feed ban and keep prohibited material out of 
cattle feed. We also reported that FDA's data on inspections were so 
severely flawed that the agency could not know the extent of industry 
compliance. We made a number of recommendations to strengthen FDA's 
enforcement of the feed ban and its oversight and monitoring of 
compliance inspections. 

As you requested, this report examines the effectiveness of the actions 
FDA has taken, since our 2002 report, to ensure industry compliance 
with the animal feed ban and protect U.S. cattle from BSE. In addition, 
appendix III provides a chronology of FDA's and USDA's actions in 
response to the two cases of BSE discovered in North America in 2003. 

In conducting our work, we examined in detail 404 inspection reports 
from fiscal years 2003 and 2004, which we randomly selected from FDA's 
18 district offices responsible for inspections in the 50 states. We 
interviewed FDA district officials in the 18 districts and observed FDA 
and state investigators conduct 19 inspections in 12 states. The sites 
were selected to cover a range of firm types and sizes in various 
geographic locations with concentrations of cattle feeding operations, 
including dairy cattle. We met with FDA headquarters' officials 
responsible for procedures and actions taken to (1) oversee and enforce 
the feed ban, (2) maintain the inspection data system, and (3) propose 
and analyze regulatory decisions. We also surveyed state agency 
officials in the 38 states that had contracts or agreements with FDA in 
fiscal year 2004 regarding their inspection programs, testing of animal 
feed and feed ingredients, and the training and guidance they received 
from FDA. The state survey instrument and summary of responses appear 
in appendix IV. Appendix I contains a detailed description of our scope 
and methodology. We performed our work from October 2003 through 
January 2005, in accordance with generally accepted government auditing 
standards, which included an assessment of FDA's BSE program data 
reliability and internal controls. 

Results in Brief: 

FDA has taken a number of important actions, as we recommended in our 
2002 report, to improve its implementation of the feed ban. FDA 
developed a uniform format for federal and state inspectors to document 
inspection results, implemented a new data system that more reliably 
tracks inspection results, and entered inspection results into the data 
system in a more timely fashion. FDA also issued guidance and trained 
its inspectors along with state inspectors on how to conduct BSE 
inspections. However, we found the following weaknesses in FDA's 
oversight and enforcement of the feed ban, which continue to limit the 
effectiveness of this critical BSE firewall and could place U.S. cattle 
at risk for BSE: 

* FDA acknowledges that more firms are subject to the feed ban than the 
nearly 14,800 that have been inspected to date, but it does not have 
uniform procedures for identifying additional firms. Because these 
firms have never been inspected, FDA has no assurance that they are in 
compliance with the feed ban. FDA officials told us the agency has 
asked Congress for more resources, which it plans to use, in part, to 
support states' efforts to identify and inspect additional firms. We 
observed one possible approach to help FDA identify additional firms 
with existing resources: some inspectors wrote down the names of the 
suppliers and customers of firms during inspections to check against 
the inventory of active firms. Inspectors do not routinely note such 
information, however, because FDA's guidance does not instruct them to 
do so. 

* We found that about 2,800 firms had not been reinspected since 1999 
or earlier. While those early inspections indicated that most did not 
process with prohibited material at that time, the firms could have 
changed their practices over the last 5 years. Our analysis showed that 
about two-thirds of those firms were farms that fed cattle and did not 
feed other types of animals; FDA believes such farms are unlikely to 
change their practices. However, about 400 firms were feed mills, which 
FDA would consider at high risk of potentially exposing cattle to BSE 
if they started to use prohibited material. Because firms are not 
required to notify FDA if they change their operations and begin to 
process feed using prohibited material, FDA would not target them for 
annual inspection as high-risk firms. 

* FDA's inspection guidance does not include routinely sampling feed 
intended for cattle, in cases where such tests would be useful, to 
augment the visual examination of facilities and equipment and review 
of documents carried out during inspections. According to FDA, the 
presence of exempt items, such as cattle blood, which are allowed in 
cattle feed, would negate the value of the tests because the tests 
cannot distinguish between prohibited material and these exempt items. 
However, 18 of the 38 states that conduct BSE inspections under 
agreement with FDA told us they take samples of feed during inspections 
to test for animal material. State officials told us that tests could 
confirm the presence of potentially prohibited material in cattle feed 
at firms that assert they do not use exempt items. Tests would also be 
useful to confirm the adequacy of procedures for cleaning equipment and 
vehicles used for both cattle feed and feed with prohibited material. 
However, FDA began testing bags of feed sold at retail stores and bulk 
feed sold to cattle feedlots in August 2003. These samples were not 
taken as part of the compliance inspections and were not selected 
systematically. According to FDA officials, tests on some of these 
samples indicated the presence of animal material and the agency was 
investigating those test results at the completion of this report. We 
plan to provide our analysis of FDA's collection, testing, and follow- 
up of these samples later this year. 

* FDA's regulations do not require the cautionary statement--"Do not 
feed to cattle or other ruminants"--on feed or feed ingredients that 
contain prohibited material if they are intended for export, although 
that feed could be intentionally or inadvertently redirected back into 
feed for U.S. cattle. In addition, the exported feed containing 
prohibited material could be fed to cattle in other countries and meat 
from those animals could subsequently be imported into the United 
States. However, according to FDA officials, FDA cannot require feed 
intended for export to carry the cautionary statement without a change 
to the law that governs the export of food and feed. 

* Although FDA has procedures for alerting USDA and states when it 
discovers that cattle may have consumed feed that contains prohibited 
material, FDA officials told us that they had never given such 
notification, even though they had identified instances when prohibited 
material had been used in cattle feed in the past. FDA said that 
notification was not needed because BSE had not been discovered in a 
cow born in the United States. However, FDA's position is inconsistent 
with the purpose of the feed ban--to be a firewall for safeguarding 
U.S. cattle from the introduction and spread of BSE. On one inspection 
we observed, an inspector discovered that a firm's process had been 
allowing prohibited material into cattle feed for nearly a year. The 
firm voluntarily conducted a recall, but FDA did not alert USDA and the 
state. FDA maintained that the recall was sufficient; however, USDA 
officials told us that the department would have tracked the animals 
that may have been fed contaminated feed and tested them for BSE when 
slaughtered. 

* FDA has not identified or inspected many transportation firms. In 
addition, inspectors do not routinely review and document firms' 
procedures for ensuring that the vehicles they use to haul cattle feed 
are free of prohibited material. Routine review and documentation does 
not occur in part because FDA's inspection form does not have specific 
questions to capture that information. Eighty-two of the inspection 
reports we examined were for renderers, protein blenders, feed mills, 
and other firms that handled cattle feed and feed ingredients and also 
processed with prohibited material. Inspectors documented vehicle clean-
cut procedures for only 11 of those 82 firms. Research suggests that 
cattle can get BSE from ingesting even a small amount of infected 
material--an amount that could be introduced in feed that was 
transported in a poorly cleaned vehicle. FDA told us it has requested 
resources to identify and inspect more transportation firms. However, 
because thousands of trucks could transport cattle feed, we believe it 
would be more effective to review and document cleanout procedures and 
inspect vehicles as part of inspections at feed mills or other firms 
that use the vehicles to haul their cattle feed or feed ingredients. 

In addition to these weaknesses in the feed-ban firewall, we also 
identified a related issue that needs to be addressed. FDA is reporting 
information to Congress and the public on industry compliance without 
providing a full and complete context for that information. That is, 
FDA reported a 99 percent compliance rate in January 2004. While FDA 
noted the rate was based on renderers, protein blenders, and feed mills 
that process with prohibited material, it did not note that the rate 
was based on inspections of only about 570 firms. Some industry 
officials have cited that high rate of compliance as support for their 
position that FDA does not need to strengthen the feed-ban rule. 
Furthermore, FDA does not include all serious violations in its 
calculations of compliance on its Web site because it reclassifies 
firms as "in compliance" once they correct violations, regardless of 
how long the problem may have existed. In addition, in 42 of the 404 
inspection reports that we analyzed in depth, FDA had counted firms as 
"in compliance" that lacked written procedures to prevent commingling 
or cautionary statements on feed that contained prohibited material-- 
violations that can result in cattle being fed prohibited material. 
Because of these concerns and the fact that FDA is still identifying 
firms subject to the ban--as well as the fact that inspections are 
largely paperwork reviews without tests to confirm compliance, and some 
inspections are 5 or more years old--we do not believe that FDA has 
enough information or enough current information to cite a rate of 
compliance. Any compliance information FDA cites must be reported in 
its complete context. 

To further strengthen oversight and enforcement of the animal feed ban 
and better protect U.S. cattle and American consumers, we are making 
nine recommendations to the Commissioner of FDA, including that FDA 
develop procedures for identifying additional firms subject to the ban; 
ensure that it alerts USDA and states when inspectors discover that 
feed with prohibited material may have been fed to cattle; and develop 
guidance for inspectors to use tests to verify the safety of cattle 
feed and confirm the adequacy of procedures for ridding equipment and 
vehicles of prohibited material before using them for cattle feed. 

In commenting on a draft of this report, FDA said we had conducted a 
thorough and diligent study. However, FDA believes that the weaknesses 
we identified are not sufficiently material to place U.S. cattle at 
risk for BSE and that its risk-based inspection approach assures 
adequate oversight of the feed-ban rule. We believe that the problems 
described in this report are serious and that, given the fact that BSE 
has been discovered in North American cattle, breaches in FDA's 
oversight of the feed-ban rule place U.S. cattle at risk for BSE. FDA 
generally disagreed with four of our nine recommendations. FDA did not 
agree that, among other things, it should use tests as part of 
compliance inspections, as we recommend, because current tests cannot 
detect the prions that cause BSE. That is true. However, the existing 
test can detect animal tissue, and FDA is using it to test samples of 
bagged feed and feed sold at mills. We believe tests, in conjunction 
with document review and visual examination carried out during 
compliance inspections, will give FDA greater assurance that inspection 
results are accurate. FDA also disagreed with our recommendation that 
it require firms that process with prohibited material to notify FDA. 
FDA believes it would need significant additional resources to 
implement a notification program and said that its current approach of 
working collaboratively with states gives FDA a good opportunity to 
learn when firms change to using prohibited material. If there are not 
significantly more high-risk firms than the approximately 570 firms FDA 
already knows about, then the cost of implementing this recommendation 
would be minimal. However, if the number of firms that process with 
prohibited material is significantly larger, FDA needs to know that. 
Appendix VI contains FDA's written comments and our detailed response. 

Background: 

BSE and vCJD belong to a family of diseases known as transmissible 
spongiform encephalopathies (TSE). Other TSEs include scrapie in sheep 
and goats, chronic wasting disease in deer and elk, feline spongiform 
encephalopathy in domestic cats, and mink encephalopathy. Currently, no 
therapies or vaccines exist to treat TSEs and a definitive diagnosis 
can only be made from a post-mortem examination of the brain. The 
infective agent that gives rise to TSEs is generally thought to be a 
malformed type of protein, called a prion, which causes normal 
molecules of the same type of protein in the brain to become malformed 
and eventually results in death.[Footnote 10] Prions are neither 
viruses nor bacteria and contain no genetic material--no 
deoxyribonucleic acid (DNA). Prions cannot be readily destroyed by 
conventional heat, irradiation, chemical disinfection, or sterilization 
procedures.[Footnote 11] TSE prions have been found to accumulate in 
central nervous system tissue--specifically the brain, spinal cord, and 
eye--and have been found in other body tissues, such as the tonsils and 
small intestines, of animals and humans. For BSE, the precise amount of 
infective material needed to cause disease is unknown, but research 
suggests that it is very small. According to scientific experts in the 
European Commission, in careful feeding experiments, less than 1 gram 
of infected brain tissue induced disease in all the recipient cattle. 

The original source of BSE is not known with certainty. However, based 
on available evidence, experts generally agree that the practice of 
recycling the remains of diseased animals, specifically scrapie- 
infected sheep, into feed for livestock, including cattle, was 
responsible for the emergence and spread of BSE in the United Kingdom. 
In 1986, BSE was first identified in the United Kingdom; and in 1988, 
that government banned the practice of feeding ruminant-derived protein 
to ruminants to thwart its spread. The number of new cases of BSE has 
declined from a high in 1992 of 37,316 to a total of 764 new cases in 
2004. BSE has been found in about 189,000 animals worldwide, most of 
which (about 184,000) were discovered in the United Kingdom. The 
remaining cases were discovered in 26 countries, including Canada and 
the United States. Three nations--the United States, Oman, and the 
Falkland Islands--have only detected the disease in imported animals. 
The following are the number of reported cases, by region and/or 
country: [Footnote 12]

* Europe. United Kingdom--184,045; the rest of Europe--5,107;

* North America. Canada--4; United States--1;

* Middle East. Oman--2; Israel--1;

* Asia-Pacific. Japan--14; and: 

* South America. Falkland Islands--1. 

In 1996, the United Kingdom reported the first case of the human 
disease, vCJD. Scientists believe vCJD is linked to exposure to the BSE 
prion, most likely through consuming beef and beef products infected 
with BSE.[Footnote 13] While scientists and regulatory officials 
believe that millions of people in the United Kingdom may have ingested 
BSE-infected tissue, many also believe vCJD is difficult to contract. 
As of December 1, 2003, 153 cases of vCJD had been reported worldwide, 
with 143 of these cases in the United Kingdom. The Department of Health 
and Human Services' Centers for Disease Control and Prevention, which 
is responsible for surveillance of vCJD, reported that almost all of 
the vCJD victims had multiple-year exposures in the United Kingdom 
during the height of the outbreak of BSE-infected cattle--between 1980 
and 1996. Most vCJD victims have been young--the average age at death 
was 28--and half died within 13 months from the time they first showed 
symptoms. 

The first indigenous case of BSE in North America was discovered in 
Canada in May 2003. (Canada's first infected cow, discovered in 1993, 
had been imported from the United Kingdom.) A Canadian government 
investigation concluded that the infected cow discovered in 2003 most 
likely contracted the disease by consuming feed containing BSE- 
contaminated ruminant material, probably before Canada imposed its feed 
ban in 1997.[Footnote 14] Canadian authorities believe that BSE entered 
the feed chain through slaughtered and rendered cattle imported from 
the United Kingdom. In December 2003, an animal infected with BSE was 
discovered in the United States. According to U.S. authorities, that 
animal--a dairy cow in Washington State--had been part of a herd of 81 
cattle imported from Canada in September 2001. Appendix III describes 
FDA's and USDA's actions in response to the 2003 discoveries. In 
January 2005, Canada discovered two more cases of BSE. 

Following the discovery of the infected cow in the United States, U.S. 
beef exports dropped precipitously. The United States is currently 
engaged in discussions with its major trade partners to reestablish 
beef exports. In October 2004, Japan, previously the largest importer 
of U.S. beef, agreed in principle to resume imports of certain beef 
products from cattle slaughtered at 20 months or younger; as of 
February 11, 2005, the two countries were working out the details of 
this agreement. 

To detect potentially prohibited material in feed, FDA uses a test 
called "feed microscopy," which is a visual examination of a sample 
under a microscope for the presence of animal tissue, such as hair and 
bone particles. According to FDA officials, when performed by an 
experienced analyst, the species can sometimes be identified. FDA is 
evaluating a more sensitive test called "polymerase chain reaction" 
(PCR), which detects animal DNA and can distinguish ruminant DNA. 
However, feed containing exempt items (e.g., milk and blood proteins) 
derived from ruminants would test positive for ruminant DNA using PCR. 

When inspectors find violations of the feed-ban rule, FDA can issue 
warning letters, and firms may conduct voluntary feed recalls. FDA has 
the authority to take immediate enforcement action, including seeking a 
court order to seize feed products that violate the feed ban or 
obtaining a court-ordered injunction ordering a firm to cease 
operations. Of the 38 states we surveyed, 34 told us they have 
authority to take action for violations of the feed ban. FDA directs 
its districts to issue warning letters within 30 workdays-- 
approximately 45 calendar days after the inspection. Warning letters 
give firms the opportunity to voluntarily take corrective action before 
FDA initiates enforcement actions. 

Under the risk-based priority inspection system that FDA adopted in 
2002, FDA and states have focused inspection resources on the following 
types of firms, which FDA has designated as high-risk for potentially 
exposing cattle to BSE: 

* renderers that accept dead ruminant animals and/or the waste 
materials from beef slaughter facilities;

* feed mills that use prohibited material, which can include FDA- 
licensed mills that handle certain new animal drugs for use in animal 
feeds and nonlicensed mills that do not handle such animal drugs; and: 

* protein blenders that use prohibited material. 

Other firms subject to the feed ban include the following: 

* firms that manufacture only pet food;

* firms that transport or distribute animal feed;

* firms that salvage animal feed or pet food; and: 

* other firms that handle animal feed, including retailers, grocery 
warehouses, and specialty food companies. 

In addition to inspections of high-risk firms, FDA asks states to 
perform a number of inspections at the lower risk firms under their 
contracts or agreements with FDA. FDA also performs inspections of some 
lower risk firms. Table 1 shows the number of firms inspected during 
fiscal year 2004. 

Table 1: Number of Firms Inspected by FDA and States for Compliance 
with the Feed-Ban Rule, by Firm Type, Fiscal Year 2004: 

Firm type: Renderers; 
Number of firms: 195. 

Firm type: Protein blenders; 
Number of firms: 164. 

Firm type: FDA-licensed feed mills; 
Number of firms: 747. 

Firm type: Nonlicensed feed mills; 
Number of firms: 2,615. 

Firm type: Others[A]; 
Number of firms: 2,285. 

Total; 
Number of firms: 6,006. 

Source: GAO's analysis of FDA's online database. 

Note: Since many firms engage in more than one activity (for example, a 
feed mill may also be a protein blender), this analysis makes 
assumptions about firms' primary activities to avoid counting firms in 
more than one category. 

[A] Other firm types include cattle feeders, transporters, pet food 
manufacturers, and retail establishments. 

[End of table]

Our 2002 report found that: 

* FDA was not acting promptly to compel firms to keep prohibited 
materials out of cattle feed and to label animal feed that cannot be 
fed to cattle;

* FDA's data on feed inspections was so severely flawed that FDA did 
not know the full extent of industry compliance;

* FDA had no clear enforcement strategy for firms that do not obey the 
feed ban and did not know what enforcement actions states had taken; 
and: 

* FDA had been using inaccurate, incomplete, and unreliable data to 
track and oversee feed-ban compliance. 

A 2001 study by the Harvard Center for Risk Analysis noted that the 
greatest risk of BSE exposure to cattle in the United States is through 
mishandling, mislabeling, or contaminating cattle feed.[Footnote 15] 
The study developed a simulation model for predicting the number of 
infected animals that would result from the introduction of BSE into 
the United States. Using this model, the Harvard study concluded that, 
if 10 cattle infected with BSE were imported into the United States, 
only three new cases of BSE would likely occur, on average, and that 
BSE is virtually certain to be eliminated from the United States within 
20 years following its introduction. According to the study, any new 
cases of BSE would come primarily from industry's failure to comply 
with the feed ban. A subsequent 2003 Harvard reassessment--following 
the discovery of the BSE-infected cow in Canada that year--arrived at a 
similar conclusion.[Footnote 16]

FDA Has Taken Important Steps to Improve Implementation of the Feed 
Ban: 

Since our January 2002 report, FDA has changed the way it collects, 
tracks, and reports inspection data. In April 2002, FDA implemented a 
uniform inspection form for federal and state inspectors to document 
inspection results. Although FDA had an inspection form earlier, 
inspectors were not always completing the required information, and 
several states did not use FDA's form. 

FDA has also issued feed-ban inspection guidance and appointed BSE 
coordinators in each of its district offices to review inspection forms 
for completeness.[Footnote 17] The district BSE coordinators told us 
that FDA has trained inspectors on using the inspection form and 
carrying out inspections. Although most states reported that this 
training was sufficient, a few told us that they had not received 
training since the late 1990s or were not able to attend training 
because of state budget constraints. However, in commenting on a draft 
of the report, FDA officials said that the agency always offers to 
provide training to states, when requested. 

Regarding the data deficiencies we reported in 2002, FDA implemented a 
newly designed feed-ban database and data entry procedures in its Field 
Accomplishment and Compliance Tracking System (FACTS) in April 2002. 
According to our analysis, this new approach and data system are 
designed to more reliably track feed-ban inspection results. As a 
result, FDA has a better management tool for overseeing compliance with 
the feed-ban rule and a data system that better conforms to standard 
database management practices. Specifically, FDA's new approach makes 
the following improvements: 

* All firms have unique identifiers. Inspection records in FDA's data 
system--including those that were previously missing unique 
identifiers--now have them, according to our data reliability analysis. 
Before the new approach, about 45 percent of FDA's feed inspection 
records lacked information to identify individual firms. As a result, 
the earlier data could not be used to reliably determine the number of 
firms inspected, compliance trends over time, or the inspection history 
of an individual firm. These problems should not occur with FDA's new 
system. 

* Information is substantially complete and accurate. FDA has corrected 
information problems we had identified in our 2002 report, according to 
our data reliability analysis of the inspections conducted since April 
15, 2002. The new FACTS database contains edit checks to detect any 
incomplete or inaccurate data. Furthermore, FDA's current feed-ban 
inspection guidance directs district BSE coordinators or their 
designees to review BSE inspection forms for completeness and accuracy. 
Previously, headquarters staff had entered the data received from 
district offices and did not have sufficient knowledge to detect 
irregularities in the data they were entering. In addition, states that 
have contracts or agreements with FDA are now using the same inspection 
forms as FDA. Previously, several states used state-developed forms, 
which did not always provide comparable information. 

* Data are more timely. Since April 15, 2002, about 95 percent of 
inspections with serious violations have been entered into the FACTS 
database within 45 days of the inspection date, according to our 
analysis. This rate of entry is a significant improvement over the 
timeliness of entry rates we reported in 2002. At that time, we found 
that some inspections were entered into FDA's database 2 or more years 
after the date of inspection. For such inspections, FDA could not 
accurately report on firms' compliance with the feed ban and could not 
clarify inconsistent or conflicting information, or obtain answers to 
missing information--situations that FDA's new approach should help 
avoid. 

As a result of these improvements, FDA is able to present more reliable 
feed ban inspection information on its Web site for the approximately 
10,000 firms inspected since April 15, 2002, or about two-thirds of the 
approximately 14,800 firms inspected since 1997. Appendix II provides a 
detailed description of actions FDA has taken on the recommendations in 
our 2002 report. 

Program Weaknesses Continue to Limit the Effectiveness of FDA's Animal 
Feed Ban: 

While FDA has made many improvements to its oversight and enforcement 
of the feed ban in response to our 2002 report recommendations, we 
found a number of oversight weaknesses that limit the effectiveness of 
the ban and could place U.S. cattle at risk for BSE. Specifically, we 
found that FDA does not: 

* have a uniform procedure to identify all firms subject to the feed 
ban,

* require firms to notify FDA if they process with prohibited material,

* routinely use tests to verify compliance with the feed ban,

* alert USDA or states when cattle may have been fed with feed 
containing prohibited material, and: 

* adequately overseeing the procedures for cleaning vehicles that haul 
cattle feed. 

Furthermore, we found that cautionary statements are not required on 
feed or feed ingredients intended for export that contain prohibited 
materials. In addition, FDA has not been reporting BSE inspection 
results to Congress and the public in a full and complete context. 

FDA Does Not Have Uniform Procedures to Identify Additional Firms 
Subject to the Feed-Ban Rule: 

When the feed ban took effect in 1997, FDA first focused on identifying 
as many firms as possible that were subject to the ban. As of September 
30, 2004, FDA officials had identified approximately 14,800 firms that 
are subject to the feed ban (see table 2). That is about 4,200 more 
firms than the 10,576 firms FDA had identified approximately 3 years 
earlier. FDA officials acknowledge that the agency has not identified 
all firms subject to the feed-ban rule. 

Table 2: Number of Firms FDA Has Identified that Are Subject to the 
Feed Ban, by Firm Type, as of the End of Fiscal Year 2004: 

Firm type: Renderers; 
Number of firms: 249. 

Firm type: Protein blenders; 
Number of firms: 281. 

Firm type: FDA-licensed feed mills; 
Number of firms: 1,061. 

Firm type: Nonlicensed feed mills; 
Number of firms: 4,922. 

Firm type: Others[A]; 
Number of firms: 8,252. 

Total; 
Number of firms: 14,765. 

Source: GAO analysis of FDA's online database. 

Note: Since many firms engage in more than one activity (for example, a 
feed mill may also be a protein blender), this analysis makes 
assumptions about firms' primary activities to avoid counting firms in 
more than one category. 

[A] Other firm types include cattle feeders, transporters, pet food 
manufacturers and retailers. 

[End of table]

FDA has identified firms by reviewing: 

* its list of firms that manufacture feed that contains certain new 
animal drugs; FDA knew about these firms because it requires them to be 
licensed and because it has certain regulatory responsibility over 
these firms. 

* a list of the firms or individuals that USDA has identified as 
violating USDA's and FDA's requirements with respect to chemical and 
drug residues in animals slaughtered for human consumption.[Footnote 18]

* lists of firms that states identified. For example, 27 of the 38 
states we surveyed register renderers, 28 register protein blenders, 
and 34 register feed mills that FDA has not licensed, and provide this 
information to FDA during meetings to set up annual inspection plans. 

* membership lists of industry associations, such as the National 
Renderers Association. 

In addition, FDA officials told us that FDA districts have used 
multiple approaches, including looking through telephone books to 
identify the names of additional firms. However, FDA has not developed 
a systematic approach for identifying additional firms subject to the 
feed ban. For example, FDA does not have an approach for identifying 
additional nonlicensed feed mills in states that do not provide that 
information. FDA also acknowledged that it has identified only a small 
percentage of the thousands of transportation firms that may haul 
cattle feed. Moreover, in commenting on a draft of this report, FDA 
told us that there are an estimated 1 million businesses (e.g., dairy 
farms feedlots, and other facilities) that feed cattle and other 
animals. FDA also told us that it does not consider farms that mix 
their own feed or feed cattle as well as other animals as low risk. 
However, FDA does not have a strategy for ensuring that this industry 
sector is in compliance with the feed-ban rule. 

We observed one approach for expanding the number of firms subject to 
the feed ban: some FDA and state inspectors we accompanied on firm 
inspections wrote down the names of the firm's suppliers and customers 
during the inspection and checked these names against FDA's inventory 
of firms to help identify additional firms. According to officials in 
one district where we observed this practice, they inspect these 
additional firms as resources allow. However, FDA does not have 
guidance for inspectors to do this routinely, and we observed other 
inspectors who did not record the names of firms' suppliers and 
customers. The approach we observed was one that may be largely applied 
with existing resources. Congress provided FDA with an additional $8.3 
million in the fiscal year 2005 budget, which FDA officials told us 
would be used, in part, to funds states' efforts to identify and 
inspect additional firms.[Footnote 19]

FDA Does Not Require Firms to Notify the Agency if They Process with 
Prohibited Material: 

Under FDA's risk-based inspection system, FDA's goal is to annually 
inspect all renderers, feed mills, and protein blenders that process 
with prohibited material--about 570 firms--and to inspect a number of 
other firms that FDA considers lower risk. The number of other firms 
varies according to the inspection resources available. As previously 
stated, in total, FDA and states inspected 6,006 firms in fiscal year 
2004. However, once FDA has inspected a firm and determined that it 
does not process with prohibited materials, FDA may not reinspect that 
firm for many years. In the interim, FDA does not know whether the firm 
has changed operations and now processes prohibited materials because 
it does not require firms that do so to notify the agency. FDA and 
state agencies only learn of a change in operations if they inspect the 
firms. Without a requirement to notify FDA, these firms are not 
annually inspected to monitor for compliance with the feed ban, as are 
other high-risk firms. 

We found that 2,833 or about 19 percent, of these firms FDA has 
identified as subject to the feed-ban rule have not been reinspected in 
5 or more years. These firms include: 

* 1,224 farms that fed ruminant animals;

* 846 farms that mixed their own feed;

* 377 feed mills; and: 

* 386 other types of firms, such as distributors and retailers. 

According to FDA officials, of these four types of firms that have not 
been reinspected, about 2,100 or two-thirds are farms, which FDA 
believes are not likely to change their practices. However, feed mills, 
which account for about 400 of the firms, would be classified as high 
risk if they process with prohibited material. 

FDA officials also believe that the number of firms processing with 
prohibited material is declining and that in all likelihood firms that 
have not been inspected for a number of years would not change their 
practices and start doing so. As FDA pointed out, firms may decrease 
their use of prohibited material because of the requirement that they 
maintain records sufficient to track all receipt, processing, and 
distribution of that material. Nonetheless, some firms that did not use 
prohibited material when they were last inspected may begin to use that 
material in processing their feed. 

FDA officials told us that they have considered options for identifying 
firms that process feed with prohibited material, including requiring 
those firms to be licensed. The officials noted, however, that some 
firms may not comply with a notification requirement; thus, FDA would 
still not know about all high-risk firms, and it would incur the 
additional costs of overseeing the notification requirement. 

FDA Does Not Routinely Sample Feed and Feed Ingredients during 
Inspections for Analysis to Verify Compliance with the Feed Ban: 

While FDA inspection procedures include guidance for reviewing firm 
documents and procedures, examining their invoices, and inspecting 
facilities and equipment, they do not include guidance on when samples 
should be taken and tested. For example, the feed-ban inspection 
guidance does not instruct inspectors to routinely sample cattle feed 
to verify firms' claims that they do not use prohibited materials or 
exempt ingredients, or to ensure that firms' cleanout and flushing 
procedures to prevent commingling are followed and are effective. 

We recognize that the usefulness of testing is limited at firms that 
use exempt items--cattle and other ruminant blood, milk proteins, 
poultry litter, and plate waste--as ingredients in cattle feed. FDA 
officials told us that they did not want to routinely test samples at 
firms during inspections because the tests would likely have many false 
positives as a result of the exemptions. Consequently, officials 
believed testing would not use resources wisely. 

However, in 9 of the 19 inspections we observed, inspectors could have 
used tests to verify feed-ban compliance because the firms claimed they 
did not use any animal-derived exempt items. Even in these instances, 
where tests would be beneficial, inspectors did not sample the feed. 
For instance, inspectors did not take samples to confirm the adequacy 
of cleanout procedures at firms that use nondedicated production 
facilities to manufacture cattle feed but do not use any exempt 
materials. FDA's feed-ban inspection guidance allows inspectors to draw 
samples at their discretion, but FDA officials told us that inspectors 
rely on their judgment of whether the cleanout procedures appear to be 
adequate and rarely use testing to verify their assessment. FDA 
officials did not give us a clear reason why they would not advise 
testing in situations where tests would be useful to help confirm 
compliance. 

Some states have also done significant testing that FDA could use to 
verify compliance with the feed ban but do not provide their test 
results to FDA, although that information could give FDA a more 
complete picture of feed ban compliance. In response to our survey, 18 
of the 38 states that have agreements with FDA to conduct feed-ban 
inspections told us they had collected and tested over 1,500 feed 
samples during 2003.[Footnote 20] For example, according to a North 
Carolina Department of Agriculture official, the state collected and 
tested 738 samples; and, according to a Kansas Department of 
Agriculture official, the state collected and tested 94 samples. In 
these states, if the tests find what appears to be prohibited material, 
the states followed up with the firms to determine what ingredients 
they used. According to the officials, no contaminated cattle feed was 
found. In California, which collected and tested about 100 samples, 
officials found tests to be useful for demonstrating to cattle feed 
manufacturers the difficulties of cleaning equipment that has been used 
for prohibited material. FDA and state agency officials told us that 
most California feed firms have switched to using dedicated equipment 
for cattle feed. Eleven of the 18 states share test results with FDA, 
but FDA does not use these results to verify industry compliance with 
the feed ban. 

In August 2003, FDA instructed its districts to begin testing finished 
feed and feed ingredients, such as bags of feed sold at retail stores 
and bulk feed sold to cattle feedlots. These tests were not taken in 
conjunction with feed-ban compliance inspections. FDA inspectors took 
660 samples nationwide. The samples were submitted to FDA regional 
laboratories for analysis, where analysts used feed microscopy. 
Although in its instructions to districts for the collection effort, 
FDA called the tests "a method to monitor for compliance with" the feed 
ban, FDA officials told us that the test results could not be the sole 
basis for enforcement action at individual firms because microscopic 
analysis cannot distinguish prohibited bone and tissue from exempted 
material. Nonetheless, the officials also told us the testing gives FDA 
further assurance of industry's compliance with feed ban. 

Because FDA did not use an approach that allows it to generalize the 
results, the test results cannot be used as assurance of industry 
compliance. In fact, because FDA did not provide instructions on how to 
randomly select firms for sampling and how to take a random sample of 
feed at the firms, the results cannot even help confirm compliance by 
the stores, feedlots, and other firms where the samples were taken. In 
initiating this effort without a sampling plan, FDA wasted its already 
limited inspection resources. FDA has committed resources to collect 
and analyze 900 additional samples in fiscal year 2005. With the same 
resources, FDA could have developed a sample design that would have 
allowed it to generalize the test results to industry. 

FDA officials told us the agency would have to conduct an investigation 
to determine whether an enforcement action was warranted. FDA provided 
us some information on test results for the 660 samples that were taken 
and analyzed. The data showed 145 potential violations, including 8 
that FDA's laboratories originally classified as serious. About one- 
third of the 145 samples with potential violations were of cattle feed. 
Several of those samples had evidence of mammalian matter. Without more 
information, we could not determine whether the cattle feed contained 
exempt items or prohibited material. As of February 2005, FDA was in 
the process of gathering the information we requested from its district 
offices on the results of its investigation of the 145 potential 
violations and what, if any, enforcement actions were taken based on 
the tests and follow-up investigations. We plan to provide our analysis 
of FDA's collection, testing, and follow-up of these samples later this 
year. 

The Cautionary Statement Is Not Required on Feed Intended for Export: 

Animal feed and feed ingredients containing prohibited material 
(including material from rendered cattle) are not required to be 
labeled with the cautionary statement, "Do not feed to cattle or other 
ruminants," when that material is intended for export. Shipping 
containers for such material, however, must be labeled that they are 
for export only; and, if prohibited material is put back into domestic 
commerce, the containers must be relabeled with the cautionary 
statement. 

Not placing the warning label on exported feed poses a potential risk 
to U.S. and foreign cattle and consumers from two perspectives. First, 
feed with prohibited materials could be intentionally or inadvertently 
redirected into feed for U.S. cattle if firms fail to add the 
cautionary label to the product that they had initially intended to 
export. Second, exported feed containing prohibited material could 
mistakenly be fed to cattle that are subsequently imported into the 
United States or whose meat and other products are imported into the 
United States. 

We observed one situation where a problem could occur because a 
cautionary statement was not on an exported product. One firm we 
visited processed fishmeal, which is normally considered a safe 
ingredient for cattle feed. However, this plant processed the fishmeal 
on the same equipment it used for prohibited materials. If it were sold 
domestically, the fishmeal would have to be labeled with the cautionary 
statement because it is potentially contaminated with prohibited 
materials. However, the product was shipped to overseas customers 
without the cautionary statement. Because the fishmeal was not labeled, 
and fishmeal would not be expected to contain prohibited material, 
customers could unwittingly mix the fishmeal with other ingredients for 
their cattle. The FDA inspector did not document in the inspection 
report which countries were sent the fishmeal. When we asked FDA 
officials about this situation, they were concerned only about whether 
feed intended for export was actually being diverted to domestic 
cattle, a situation that they believed was unlikely to occur because 
FDA rules prohibit it. However, according to the report by the 
international panel of experts on BSE convened by USDA, the United 
States has an obligation to act responsibly toward its global neighbors 
when exporting feed and feed ingredients. 

FDA officials told us that FDA cannot require the cautionary statement 
on feed intended for export without a change to the Federal Food, Drug, 
and Cosmetic Act.[Footnote 21] Under that act, animal feed intended for 
export only cannot be deemed to be adulterated or misbranded if it (1) 
meets the foreign purchasers specifications, (2) is not in conflict 
with laws of the country to which it is intended for export, (3) is 
labeled on the outside of the shipping package that it is intended for 
export, and (4) is not sold or offered for sale in domestic commerce. 

FDA Did Not Alert USDA or State Regulatory Authorities When It Learned 
That Cattle Feed Containing Prohibited Material Was Marketed: 

When an FDA district office learns that ruminant animals may have been 
fed contaminated feed, the feed-ban inspection guidance directs the 
district office to oversee efforts to appropriately dispose of the 
contaminated feed and to ensure that the animals that had consumed this 
feed are not slaughtered for human food or other animal feed. The 
guidance also advises FDA to consider coordination with USDA and the 
affected states. 

While FDA districts have monitored voluntary recalls of feed that did 
not comply with the feed ban, they had not been alerting USDA or state 
departments of agriculture when they learned that such feed had been 
given to cattle and other ruminants--in some cases for an extensive 
period of time. FDA district and headquarters officials responsible for 
the feed-ban program were not aware that the guidance instructed FDA to 
alert USDA and states. 

In our observations at inspections and our review of inspection 
records, we found the following instances in which FDA did not alert 
USDA or state authorities or take further action.[Footnote 22]

* A producer of cattle, hogs, and goats had inadvertently fed salvaged 
pet food containing prohibited materials to goats, which are 
ruminants.[Footnote 23] We observed the mislabeled feed in a March 2004 
inspection. The feed mill that manufactured and sold the feed had not 
labeled the salvaged pet food with the required cautionary statement 
"Do not feed to cattle or other ruminants." Shortly after this 
discovery, the firm recalled the misbranded feed. In April 2004, a 
state feed inspector found out about the misfed animals from the feed 
mill, not from FDA, and alerted his state program managers. The state 
contacted FDA, and after determining that FDA did not intend to take 
action beyond issuing a warning letter, the state seized and destroyed 
the animals in May 2004 under state authority to prevent the meat from 
entering the food supply. FDA did not alert the state or USDA and did 
not issue the warning letter to the feed mill until June 2004. 

* A feed mill had inadvertently contaminated cattle feed with 
prohibited material. The firm had made a mistake in designing and 
placing equipment in the manufacturing process, which allowed spilled 
feed containing prohibited material to become commingled with 
ingredients used to make cattle feed. We observed this problem during 
an April 2004 inspection. FDA issued a warning letter in June 2004 
demanding that the firm correct the violations; the firm also conducted 
a voluntary recall of the feed in June. Because the mill operated with 
this flawed system for about 1 year before the discovery, potentially 
contaminated feed was marketed and sold for cattle feed for that period 
of time. FDA did not contact USDA or state authorities to alert them 
that cattle had consumed the feed. 

* A feed mill did not clean mixing equipment and transportation 
vehicles used for processing and transporting feed containing 
prohibited and nonprohibited materials. The firm also failed to 
properly label feed containing prohibited materials with the required 
cautionary statement and did not maintain sufficient records for 
tracking the sale of cattle feed to its customers, as FDA requires. We 
identified these problems during our review of inspection reports. The 
inspection occurred in March 2003. The firm corrected the violations 
and recalled all cattle feed that had not yet been consumed in March 
2003. FDA issued a warning letter to the firm in May 2003 and took no 
further action. 

When we discussed these findings with FDA headquarters officials, they 
told us they were not familiar with the guidance recommending this 
communication. As a result, FDA, USDA, and state authorities had not 
assessed the health risk to humans and the animals that may have 
ingested that feed and may not have taken sufficient action to prevent 
those cattle and other ruminants from entering the human food or animal 
feed supply. The FDA officials said they had not considered 
coordinating with USDA and state officials but that USDA and the states 
were notified of the recalls because the recalls are posted on the FDA 
Web site. However, we found that the posted recall notices do not 
include information on whether, or for how long, cattle or other 
ruminants had been given the contaminated feed. Furthermore, FDA 
officials asserted that no action was needed beyond a recall in these 
incidents because BSE has not been discovered in a cow born in the 
United States. According to the officials, the meat would not make 
people ill and the feed would not make cattle ill. Before this report 
was issued, these same FDA officials told us that in the future, FDA 
will alert USDA and states when cattle may have consumed prohibited 
feed. USDA officials told us that they were not aware of these three 
incidents. They said that, had they known, USDA would have tracked the 
animals and tested them for BSE when they were slaughtered. 

FDA Has Limited Assurance That Vehicles Used to Haul Cattle Feed Comply 
with the Feed Ban: 

According to FDA's feed-ban rule, transportation firms that haul 
prohibited material and use the vehicles to haul feed or feed 
ingredients for cattle must have and use procedures to prevent 
commingling or cross-contamination. The procedures must provide for 
cleaning out the vehicles or other adequate preventative measures. 
Research suggests that cattle can get BSE from ingesting even a small 
amount of infected material--an amount that could be introduced in feed 
that was transported in a poorly cleaned vehicle. As part of an 
inspection of transportation firms, inspectors review the adequacy of 
these procedures, but the inspection form does not prompt them to do so 
during inspections of other types of firms. The following two problems 
impede the effectiveness of FDA's current procedures: 

* FDA has not identified and does not inspect many transportation 
firms. According to FDA officials and transportation data, thousands of 
independent truckers, large and small trucking companies, and rail 
companies may carry cattle feed and feed ingredients. FDA officials 
told us that it would be virtually impossible to identify and inspect 
all of these firms, given its limited resources. However, FDA agrees 
that transportation compliance is important. In commenting on a draft 
of this report, the agency noted that it is planning to increase 
oversight of transportation firms based on FDA's assessment of 
compliance and risk in this industry sector. 

* Inspecting transportation firms at their home base would not ensure 
that the required procedures are being used and that the nearly 200,000 
large trucks that haul animal feed would be clean at the time they 
picked up cattle feed, in part, because vehicles that carry prohibited 
material may also carry cattle feed and other loads in succession 
before returning to their home base. For example, at an inspection of 
one high-risk protein blender, we observed an FDA inspector talking 
with an independent trucker who had dropped off a load of cattle feed 
ingredients, was picking up prohibited materials at the protein 
blender, and was scheduled later to pick up a load of corn, which could 
be used in cattle feed. The trucker explained that if he saw anything 
in the truck between loads, he would climb in and sweep the material 
out with a broom; if he did not see anything, he did not sweep out the 
truck between loads. The trucker also said it would be extremely 
difficult to find washout facilities to clean the truck between loads 
while on the road. 

Consequently, we believe that it would be more effective to require FDA 
and state inspectors to review and document procedures that feed mills 
and other firms use to ensure that the vehicles they use to haul cattle 
feed and feed ingredients are free of prohibited material as part of 
their inspections at feed mills and other firms. During our 
observations of inspections, we found that some FDA and state 
inspectors were already doing so. However, our observations and 
analysis of inspection reports showed that the inspectors did not 
routinely do so and did not uniformly report on the adequacy of the 
firms' procedures for preventing the introduction of prohibited 
material. We believe that inspectors were overlooking the adequacy of 
firm's procedures to ensure the safe transport of cattle feed because 
the BSE inspection form does not have any questions to capture that 
information. Specifically, 82 of the 404 inspection reports we reviewed 
were for renderers, protein blenders, feed mills, and other firms that 
processed with prohibited material and handled cattle feed and feed 
ingredients. We found that inspectors had documented the required 
cleanout procedures for transportation equipment at only 11 of these 82 
firms. Without requiring inspectors to uniformly review and document 
vehicle cleaning procedures, FDA has insufficient assurance that the 
vehicles are safe to carry cattle feed and feed ingredients.[Footnote 
24]

FDA Does Not Fully Report BSE Inspection Results: 

In January 2004, FDA's Deputy Commissioner testified that inspectors 
"at least annually, targeted BSE inspections of 100 percent of known 
renderers, protein blenders, and feed mills processing" with prohibited 
material. He testified that compliance by those firms was "estimated to 
be better than 99 percent." Subsequently, some industry officials 
claimed that overall compliance with the feed ban is nearly 100 percent 
and used that figure to support their claim that the feed ban does not 
need to be strengthened. However, as noted earlier, those groups are 
comprised of about 570 firms--approximately 4 percent of the firms in 
FDA's inventory. 

In addition, FDA periodically publishes compliance information on its 
Web site for all industry segments. This information has also been used 
to cite high industry compliance. However, FDA and industry do not have 
a basis for citing a compliance rate for a segment of firms subject to 
the feed ban or industrywide because there are too many unknowns. 
Specifically, FDA does not know the status of compliance for firms 
that: 

* have never been inspected,

* have not been reinspected in 5 or more years, and: 

* may have started to process with prohibited materials since their 
last inspection. 

Furthermore, as we previously discussed, because FDA does not routinely 
sample feed to confirm compliance, inspection results are largely based 
on a review of paper documents and a visual inspection. All these 
concerns apply to compliance information FDA reports to Congress and 
the public on its Web site. 

Additionally, our analysis of inspection reports also disclosed that 
FDA was not including all serious violations in its calculation of the 
compliance rate because it reclassified firms as "in compliance" once 
they correct violations, regardless of how long the problem may have 
existed. 

Finally, we found that FDA has classified 42 firms as having less 
serious violations that it counted as "in compliance" with the feed 
ban. Inspectors reported that 18 of these firms failed to include a 
cautionary statement on feed containing prohibited materials. Although 
FDA's feed-ban inspection guidance designates the lack of a cautionary 
statement as a serious violation, and lack of such a statement should 
result in the feed being deemed misbranded under the Federal Food, 
Drug, and Cosmetic Act, FDA excluded the violations at these firms from 
its calculation of the compliance rate. Inspectors also reported that 
the remaining 24 firms had procedures for preventing commingling but 
did not have these procedures in writing. FDA's guidance designates the 
lack of written procedures as a less serious violation, but we believe 
these violations should be classified as serious. Without written 
procedures, FDA has no assurance that the firms consistently take the 
necessary steps to prevent commingling. FDA officials told us that the 
guidance is advisory and therefore gives the agency the discretion to 
reclassify the violations based on its review. 

Conclusions: 

Diligent FDA oversight and enforcement of the feed ban is essential, 
not only because of the potential threat to public health but also 
because of the economic impact on the cattle and beef industry; this 
impact was clearly demonstrated by the sharp drop in U.S. beef exports 
after one infected cow was discovered in 2003. The ongoing discussions 
and agreements to reopen beef export markets could be derailed if more 
cattle were discovered with BSE. 

FDA has taken positive steps since our 2002 report. Today FDA can say 
with greater confidence that it has more timely and reliable inspection 
data. Also, the risk-based system FDA has adopted to target inspection 
resources on high-risk firms will increase the likelihood that firms 
inspected annually will remain in compliance with the feed ban. 

FDA's processes, however, still have considerable room for improvement. 
FDA does not have uniform procedures for identifying additional firms 
that are subject to the ban but have never been inspected or for 
learning about firms that change their practices and begin to handle 
prohibited material. Furthermore, because inspectors are not using 
tests optimally--to help confirm, when appropriate, that cattle feed, 
production equipment, and transportation vehicles are free of 
prohibited material--FDA is limiting its ability to assure that firms 
are in compliance with the feed ban and that cattle feed is safe. 
Additionally, FDA is not taking advantage of state test results to 
provide greater assurance that industry is adhering to the feed ban and 
is not using its own program for sampling finished feed and feed 
ingredients in a manner that will allow it to project test results. 

Moreover, the lack of a requirement for warning labels on feed and feed 
ingredients intended for export that contain prohibited material, 
creates opportunities for having the material fed to domestic or 
foreign cattle, either intentionally or inadvertently. As the 
international group of BSE experts convened by USDA pointed out, the 
United States has an obligation to act responsibly toward its global 
neighbors when exporting feed and feed ingredients. 

Especially troubling was our discovery that FDA did not alert USDA and 
state authorities when it became aware that cattle had been given feed 
that contained prohibited material. FDA, and its key partner, USDA, 
together provide critical firewalls that the federal government has in 
place to protect U.S. cattle and consumers. In addition, the lack of 
notification was contrary to FDA's own guidance and FDA's inaction 
prevented USDA and states from being able to make an informed decision 
on how to respond to the discovery that cattle had consumed prohibited 
material. 

Given these weaknesses and the fact that FDA does not include all 
violations in its estimates, we believe FDA is overstating industry's 
compliance with the animal feed ban and understating the potential risk 
of BSE for U.S. cattle in its reports to Congress and the American 
people. Despite the problems in FDA's calculation, some in the feed 
industry claim that overall compliance with the feed ban is nearly 100 
percent--a claim that FDA's compliance information does not support. 

Recommendations for Executive Action: 

To further strengthen oversight and enforcement of the animal feed ban 
and better protect U.S. cattle and American consumers, we recommend 
that the Commissioner of FDA take the following nine actions: 

* Develop uniform procedures for identifying additional firms subject 
to the feed ban. 

* Require firms that process with prohibited material to notify FDA. If 
FDA believes it does not have the necessary statutory authority, it 
should seek that authority from Congress. 

* Develop guidance for inspectors to systematically use tests to verify 
the safety of cattle feed and to confirm the adequacy of firms' 
procedures for ridding equipment and vehicles of prohibited material 
before they are used for processing or transporting cattle feed or feed 
ingredients. 

* Collect feed test results from states that sample feed to help verify 
compliance with the feed ban. 

* Develop a sample design for FDA's inspectors to use for sampling 
finished feed and feed ingredients that will allow FDA to more 
accurately generalize about compliance with the feed ban from the test 
results. 

* Seek authority from Congress to require the cautionary statement on 
feed and feed ingredients that are intended for export and that contain 
prohibited material. 

* Ensure that USDA and states are alerted when inspectors discover that 
feed or feed ingredients with prohibited material may have been fed to 
cattle. 

* Modify the BSE inspection form to include questions inspectors can 
use to document whether firms that process or handle cattle feed or 
feed ingredients have procedures to ensure the cleanliness of vehicles 
they use to transport cattle feed and feed ingredients. 

* Ensure that inspection results are reported in a complete and 
accurate context. 

Agency Comments and Our Evaluation: 

We provided FDA with a draft of this report for review and comment. FDA 
stated that our report was thorough and that it recognized the 
enhancements FDA has put in place in its feed-ban program. However, FDA 
said the report did not identify material weaknesses to support our 
position that oversight weaknesses limit FDA's program effectiveness 
and place U.S. cattle at risk of spreading BSE. FDA believes that its 
current risk-based inspection approach is adequate to protect U.S. 
cattle. According to FDA, given the wide variety of firms subject to 
the feed ban and its resource limitations, it "is obligated to set 
priorities for inspecting a meaningful subpopulation of these regulated 
firms." We recognize that FDA has made many improvements, including 
adopting a risk-based approach for inspections, that have substantially 
improved its oversight of the feed-ban rule. However, our report 
identifies significant problems in FDA's oversight that continue to 
place cattle at risk for BSE. The importance of a strictly enforced 
feed ban is heightened now that BSE has been found in North American 
cattle. As Harvard and the international panel of experts pointed out, 
the feed ban is the most important fire wall against the spread of BSE. 
Given the problems we identified and the significance of a well 
enforced feed ban, it is important that FDA improves its feed ban 
oversight and optimizes its use of resources. 

In addition, FDA does not agree with our criticism of its compliance 
reporting. FDA believes that it provides the inspection results in a 
transparent, complete, and accurate context. FDA notes that the BSE 
inspection data posted on its Web site "allows the user to analyze the 
data, in a multitude of ways, to provide their own contextual 
reference." Our concern is precisely that the data are being analyzed 
and interpreted in an erroneous context. Specifically, when FDA and 
industry used those data to assert a 99 percent compliance rate with 
the feed ban, they took that information out of context. While FDA's 
calculation of compliance by a subset of regulated industries may in 
fact be quite high, FDA's data are not sufficient to make that 
projection to all regulated industries. In addition, FDA does not know 
the status of compliance for firms that have never been inspected or 
have not been reinspected in years. Nor does it know if previously 
inspected firms have started using prohibited material. Furthermore, 
because FDA reclassifies firms from "out-of-compliance" to "in- 
compliance" on its Web site when the firms correct violations, the 
information posted on that Web site does not tell the user when serious 
and/or long-standing violations have occurred. Lastly, inspection 
results are largely based on a review of paper documents and a visual 
inspection, with little or no feed testing. Given these data concerns 
and compliance unknowns, FDA's data should not be used to project 
industry compliance; and, anytime those data are cited, they should be 
reported in a complete and accurate context. 

Regarding the nine recommendations we make in the report, FDA did not 
take issue with the need for five and generally disagreed with four. 
Although FDA noted implementation concerns, it did not take issue on 
the need for (1) developing uniform procedures for identifying firms 
subject to the feed ban, (2) collecting test results from the states 
that sample feed, (3) including a cautionary statement on feed and feed 
ingredients intended for export, (4) notifying USDA and states when 
feed or feed ingredients containing prohibited material may have been 
fed to cattle, and (5) modifying the inspection form to include 
questions to better oversee the cleanliness of vehicles used to 
transport cattle feed or feed ingredients. 

FDA disagreed with our recommendation that it require firms that 
process with prohibited material to notify the agency. FDA believes 
that it is already getting information on changes to firms' practices 
from states and that requiring an additional notification process would 
be costly to implement. However, FDA acknowledged that it has generally 
not identified high-risk feed salvagers and farms that mix their own 
feed or those that feed cattle as well as other animals. The cost of 
the notification program will depend on the requirements FDA puts in 
place. In developing the program, FDA could target the notification to 
firms that pose a potentially high risk for exposing cattle feed to 
prohibited material. We believe that FDA should know which firms are 
high risk and that industry self-reporting is a mechanism that would 
help the agency identify those firms and help it ensure compliance with 
the feed ban. 

FDA also disagreed with our recommendation to systematically use tests 
in conjunction with compliance inspections. While we recognize the 
limitations of current test methodologies, we believe that tests are 
useful. In fact, states and FDA are currently using these tests on 
feed. Our recommendation speaks to systematically using these tests 
where appropriate, to augment inspections, which are largely 
observation and paperwork reviews. We expanded the recommendation to 
recognize that FDA may validate other tests in the future. 

With respect to our recommendation that FDA develop a sample design for 
testing finished feed and feed ingredients, FDA disagreed with the need 
for a sample design that will allow it to more accurately generalize 
about compliance. FDA stated that tests alone cannot serve as a basis 
to generalize compliance. We agree that tests that indicate potential 
violations need to be confirmed, because of the limitations of the 
current tests. However, FDA is using the test results to identify 
potential problems, and it tested 660 samples in 2003/2004 and plans to 
test 900 samples this year. The point of our recommendation is that any 
testing activity of this magnitude should have a sampling plan. 

Finally, FDA believes that it already reports inspection results in a 
complete and accurate context, as we recommend. We disagree. As noted 
above, given the data concerns and compliance unknowns raised in this 
report, FDA's data should not be used to project industry compliance. 
Anytime those data are cited, they should be reported in a complete and 
accurate context. FDA also provided technical comments, which we have 
incorporated into this report, as appropriate. FDA's written comments 
and our responses are in appendix VI. 

We also provided USDA with a draft of appendix III, which summarizes 
FDA's and USDA's actions in response to the 2003 discovery of BSE in 
North America, for review and comment. USDA had no comments on the 
draft appendix. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of it until 30 
days from the date of this letter. We will then send copies to 
interested congressional committees; the Secretary of Health and Human 
Services; the Secretary of Agriculture; the Director, Office of 
Management and Budget; and other interested parties. We will make 
copies available to others on request. In addition, the report will be 
available at no charge on GAO's Web site at [Hyperlink, 
http://www.gao.gov]. 

If you or your staffs have any questions about this report, please call 
me at (202) 512-3841. Key contributors to this report are listed in 
appendix VII. 

Signed by: 

Robert A. Robinson: 
Managing Director, Natural Resources and Environment: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

As discussed below, to assess the effectiveness of the Food and Drug 
Administration's (FDA) actions to ensure industry compliance with the 
feed ban and protect U.S. cattle from bovine spongiform encephalopathy 
(BSE), we (1) analyzed 404 inspection reports for BSE inspections 
performed during fiscal year 2003 and 2004; (2) observed 19 inspections 
in 12 states that were conducted by either FDA or state inspectors; (3) 
assessed the reliability of FDA's feed-ban inspection database; (4) 
interviewed officials at FDA headquarters and district offices, state 
agencies, and industry associations, as well as reviewed documents 
provided by these officials concerning oversight of the animal feed 
ban; and (5) surveyed state agency officials in 38 states. 

To assess FDA's oversight, we analyzed BSE inspection records to 
identify types of firms inspected; types of material processed 
(prohibited, nonprohibited, or both); oversight of transportation 
equipment; violations identified during inspections (if applicable); 
and final inspection classifications. We randomly selected 413 
inspection reports from the universe of BSE feed inspections conducted 
during fiscal year 2003 and fiscal year 2004 (up to February 7, 2004). 
For each of the 18 FDA districts, responsible for inspections in the 50 
states, we randomly selected inspection reports from one state (most 
FDA district offices cover more than one state). We included all of the 
314 high-risk firms that process prohibited materials for the 18 
selected states. In addition, we randomly selected 12 other firms that 
process with prohibited materials; 68 firms that distribute prohibited 
materials; and 19 firms that do not process or distribute prohibited 
materials. We examined only 404 of the 413 inspection reports because 9 
of the report files that we requested were still open-case files at the 
time of our review. 

To evaluate the inspection process, we accompanied inspectors on 19 BSE 
inspections of firms in 12 states covered by the feed ban. The sites 
were selected to cover a range of firm types and sizes in various 
geographic locations with concentrations of cattle feeding operations, 
including dairy cattle. The 19 inspections included renderers, protein 
blenders, feed mills, farms with ruminants and other animals, and pet 
food manufacturers. Seven of these firms processed or handled only 
prohibited material, and the remaining 12 processed or handled both 
types of material. On 12 of the inspections, we accompanied FDA 
inspectors, and on 7 we accompanied state inspectors. 

To assess the reliability of the data FDA uses when reporting industry 
compliance, we analyzed the agency's database for inspections conducted 
on or after April 15, 2002, when FDA implemented its newly designed 
feed-ban database.[Footnote 25] Specifically, we analyzed the 9,230 
inspection records in this database, as of February 7, 2004. To 
complete the reliability assessment, we (1) reviewed existing 
documentation related to the data sources; (2) electronically tested 
the data to identify obvious problems with completeness, accuracy, or 
timeliness of data entry; and (3) interviewed knowledgeable agency 
officials about the data. We determined that the data were sufficiently 
reliable for purposes of this report. 

We interviewed officials or reviewed documents at FDA headquarters and 
at the 18 FDA district offices that are responsible for overseeing and 
enforcing the feed ban in the 50 states, maintaining the inspection 
database system, and proposing and analyzing regulatory decisions. In 
the 18 district offices, we used a structured interview to uniformly 
gather information on various issues, such as methods used to identify 
the universe of firms subject to the feed ban; the process for 
selecting firms for inspection; training programs for FDA and state 
inspectors; feed-ban inspection guidance and procedures; the processes 
for reviewing inspection results, classifying findings, and determining 
what, if any, enforcement action should be taken; and oversight of 
contracts and agreements with state agencies that perform BSE 
inspections. We received information and documentation on FDA's 
oversight and enforcement of the feed ban from the following specific 
FDA units: Center for Veterinary Medicine, Office of Management, Office 
of Surveillance and Compliance; Office of Regulatory Affair's Office of 
Regional Operations; Center for Food Safety and Applied Nutrition's 
Office of the Director; and Office of the Chief Counsel. We reviewed 
various FDA program documents, including the BSE/Ruminant Feed Ban 
Inspections Compliance Program Guidance; BSE feed inspection form; 
advance notices of proposed rulemakings to strengthen the feed ban, 
including public comments; and the reports on the feed samples 
collected and tested. We also interviewed state agency officials and 
reviewed documents from the California Department of Food and 
Agriculture; the Departments of Agriculture of Georgia, Illinois, 
Kansas, Missouri, North Carolina, and Pennsylvania; and the Texas Feed 
and Fertilizer Control Service. Lastly, we interviewed officials and 
reviewed documents from the American Feed Industry Association, the 
Association of American Feed Control Officials, the National Renderers 
Association, the Association of Analytical Communities, and the Harvard 
Center for Risk Analysis. 

To understand the role that states play in the feed inspection program, 
we surveyed state officials in the 38 states that have contracts or 
other agreements with FDA to perform feed-ban compliance inspections 
and report the inspection results to FDA.[Footnote 26] The survey 
included questions about the states' inspection programs, testing of 
animal feed ingredients, and FDA's training and guidance for feed-ban 
inspections and enforcement. Before implementing our survey, we 
pretested the questionnaire with state agriculture officials in five 
states. During these pretests, we interviewed the respondents to ensure 
that (1) questions were clear and unambiguous, (2) terms were precise, 
and (3) the survey did not place an undue burden on the staff 
completing it. We received completed questionnaires from all 38 states 
surveyed. The state information presented in this report is based on 
information obtained from this survey and interviews with state 
officials. 

We performed our work from October 2003 through January 2005, in 
accordance with generally accepted government auditing standards, which 
included an assessment of data reliability and internal controls. 

[End of section]

Appendix II: GAO's Analysis of the Status of Actions on Recommendations 
to FDA in Our January 2002 Report: 

In order to strengthen oversight and enforcement of the animal feed 
ban, we recommended that the Secretary of Health and Human Services 
direct the Commissioner of FDA to take the following actions: 

Recommendation: Develop a strategy, working with the states, to ensure 
that the information FDA needs to oversee compliance is collected and 
that all firms-subject to the feed ban are identified and inspected in 
a timely manner; 
Status of actions taken: FDA (1) developed a new BSE inspection form 
that provides guidance to FDA and state feed- ban inspectors on how to 
uniformly and completely document firm's operations and assess 
compliance, (2) designated a BSE program coordinator in each district 
office who is responsible for ensuring that inspection reports are 
accurate and completed timely, and (3) provided training for FDA and 
state inspectors on conducting and documenting BSE inspections; FDA 
has not developed a uniform strategy to identify all firms subject to 
the feed ban or to ensure that all firms are inspected in a timely 
manner. 

Recommendation: Ensure that, as contractors modify the inspection 
database, they incorporate commonly accepted data management and 
verification procedures so that the inspection data can be useful as a 
management and reporting tool; 
Status of actions taken: FDA implemented a newly designed BSE feed-ban 
database and data-entry procedures designed to more reliably track feed-
ban inspection results. The new database, a module of FDA's Field 
Accomplishment and Compliance Tracking System, contains commonly 
recognized database management and verification procedures, such as 
unique identifiers for each inspected firm and edit checks to help 
ensure that data entered is complete and valid. 

Recommendation: Develop an enforcement strategy with criteria for 
actions to address firms that violate the ban and time frames for 
reinspections to confirm that firms have taken appropriate corrective 
actions; 
Status of actions taken: FDA issued feed-ban inspection guidance to FDA 
and state inspectors and program managers for determining compliance 
with the animal feed ban and to help ensure that BSE feed inspections 
and enforcement actions are conducted in a uniform manner and are of 
high quality. 

Recommendation: Track enforcement actions taken by states; 
Status of actions taken: FDA does not plan to track enforcement actions 
taken by states, as we had recommended. Officials told us that FDA and 
state enforcement actions would not be comparable because state 
standards for initiating an action may not be equivalent to FDA 
standards. As a result, FDA believed that the information would be 
misleading if presented collectively. 

In order to strengthen inspections of imported products that could pose 
a risk of BSE, we recommended that the Secretaries of Health and Human 
Services and of Agriculture, in consultation with the Commissioner of 
Customs: 

Recommendation: Develop a coordinated strategy, including identifying 
resource needs; 
Status of actions taken: FDA hired more than 655 additional food 
security personnel and increased its port-of-entry food examinations, 
including imported animal feed that could pose a risk of BSE; As part 
of the prior notice requirement of the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002, FDA and the U.S. 
Customs and Border Protection announced that they have integrated their 
information systems, which allows FDA staff to more efficiently 
evaluate and process each import entry; FDA and U.S. Customs and Border 
Protection signed a memorandum of understanding under which FDA 
commissions Customs officers in ports and other locations to conduct, 
on FDA's behalf, investigations and examinations of imported food, 
including animal feed. Currently, FDA has commissioned over 8,000 
Customs officers. 

To further help consumers identify foods and other products that may 
contain central nervous system tissue, we recommended that the 
Secretary of Health and Human Services: 

Recommendation: Consider whether the products it regulates, including 
food, cosmetics, and over-the-counter drugs, should be labeled to 
advise consumers that the products may contain central nervous system 
tissue; 
Status of actions taken: FDA does not intend to label these products, 
as we recommended. Officials told us that that the decision to label 
products has to be based on science and if the presence of central 
nervous system tissue poses a human risk, then it should not be allowed 
as an ingredient in the product; FDA issued an interim final rule in 
July 2004 that prohibits the use of certain cattle material, including 
central nervous system tissue from nonambulatory cattle, in human food, 
including dietary supplements, and cosmetics. 

Source: GAO analysis of FDA documents. 

[End of table]

[End of section]

Appendix III: GAO's Summary of FDA's and USDA's Actions in Response to 
the Two Cases of BSE Discovered in North America in 2003: 

Date: May 20, 2003; 
FDA: Canadian government reported that a single cow from Alberta had 
tested positive for BSE. FDA began working with USDA, other federal 
agencies, and Canadian officials to gather additional information about 
this cow, including its location, previous ownership, and records about 
its feed; 
USDA: USDA temporarily halted imports of live ruminant animals and most 
ruminant products from Canada. 

Date: May 26, 2003; 
FDA: FDA learned from the Canadian government that rendered material 
from the BSE-infected cow may have been used to manufacture pet food, 
some of which was shipped to the United States. FDA notified the U.S. 
pet food firm that received the feed ingredients and the firm requested 
that customers who may have purchased the suspect product hold it for 
pickup by the distributor. 

Date: August 8, 2003; 
USDA: USDA announced it would allow certain ruminant products from 
Canada to enter the United States under permit. These include boneless 
beef from cattle under 30 months of age and boneless veal from calves 
that were 36 weeks of age or younger. 

Date: October 31, 2003; 
USDA: USDA announced a proposed rule, published on November 2003, to 
allow the importation of certain low-risk, live ruminant animals and 
ruminant products from Canada; USDA released the results of the second 
Harvard BSE risk assessment. The study found that even if infected 
animals or ruminant feed material entered the United States from 
Canada, the risk of BSE spreading within the U.S. herd is low. 

Date: December 9, 2003; 
USDA: USDA collected samples from a nonambulatory cow and diverted all 
potentially high-risk material (central nervous system tissue) from the 
human food supply and into the animal rendering process. 

Date: December 22, 2003; 
USDA: USDA laboratory test results are "preliminary positive" for BSE. 

Date: December 23, 2003; 
FDA: USDA's Animal and Plant Health Inspection Service (APHIS) notified 
FDA's Office of Crisis Management that a "presumptive positive" finding 
of BSE in the Washington cow; FDA activated its Emergency Operations 
Center and began to implement its BSE Emergency Response Plan. FDA 
headquarters and district office staff participated in a teleconference 
with APHIS and Washington State officials to ensure a coordinated 
response to the incident; 
USDA: USDA announced a "presumptive positive" finding of BSE; USDA sent 
a sample from the infected animal to a world reference laboratory in 
the United Kingdom for final confirmatory testing; APHIS quarantined 
the cattle herd where the BSE-infected cow last resided and began an 
epidemiological investigation; USDA's Food Safety and Inspection 
Service (FSIS) initiated a recall of the over 10,000 pounds of meat 
from the group of 20 cattle slaughtered on December 9. 

Date: December 24, 2003; 
FDA: FDA dispatched several teams of investigators to find any FDA-
regulated products that were or could have been made from the infected 
cow, including animal feed. 

Date: December 25, 2003; 
USDA: The world reference laboratory in the United Kingdom confirms 
USDA's BSE diagnosis. 

Date: December 27, 2003; 
FDA: FDA announced that an estimated 2,000 tons of feed that could 
contain potentially infectious material from the BSE-infected cow was 
found before any of it was used to manufacture animal feed. According 
to FDA, the feed was disposed of in a landfill in accordance with 
federal, state, and local regulations; 
USDA: USDA's investigation with Canadian officials indicated that the 
BSE-infected cow was likely imported from Canada in 2001 and was about 
6 years old. 

Date: December 28, 2003; 
USDA: USDA identified 73 other cattle that were imported from Canada in 
the same shipment with the BSE-infected cow; USDA determined that the 
recalled meat products had been distributed to Alaska, California, 
Guam, Hawaii, Idaho, Montana, Nevada, Oregon and Washington. 

Date: December 31, 2003; 
USDA: USDA appointed an international team of scientific experts to 
review its BSE investigation and make recommendations following the 
completion of the epidemiological investigation. 

Date: January 6, 2004; 
USDA: USDA's and Canada's chief veterinary officers held a joint press 
conference to announce that DNA evidence indicated--with a high degree 
of certainty--that the BSE-positive cow found in Washington State 
originated from a dairy farm in Alberta, Canada. 

Date: January 12, 2004; 
USDA: FSIS issued an interim final rule, effective January 12, 2004, 
that, among other things, prohibited the use of brain, skull, spinal 
cord, and other specified tissues of cattle 30 months or older for 
human food, and required that all nonambulatory animals presented for 
slaughter be condemned. FSIS also gave notice that it would no longer 
pass and give a mark of inspection to carcasses and cattle parts 
selected by APHIS until the sample is determined to be negative. 

Date: January 26, 2004; 
FDA: FDA announced that it would be issuing interim final rules to 
strengthen existing BSE firewalls, including banning a wide range of 
cattle material from human food, dietary supplements, and cosmetics, 
and strengthening the 1997 feed ban through an extended list of banned 
feeding and manufacturing practices. 

Date: February 9, 2004; 
USDA: USDA completed its investigation of the Washington State BSE 
case. 

Date: June 1, 2004; 
USDA: Following the international scientific review panel's 
recommendation, USDA began an enhanced BSE surveillance program 
targeting cattle from highest-risk populations, as well as a random 
sampling of animals from the aged cattle population. 

Date: July 14, 2004; 
FDA: FDA requested information and public comment on additional 
measures that are being considered for strengthening the 1997 feed ban. 
FDA requested this information because the international scientific 
review panel convened by the Secretary of Agriculture recommended 
broader measures than FDA had previously announced it would be issuing 
as part of an interim final rule, such as banning all mammalian and 
poultry protein from ruminant feed; FDA issued an interim final rule 
that prohibits certain cattle material from human food, dietary 
supplements, and cosmetics; 
USDA: USDA asks for public comment on additional preventative actions 
that are being considered concerning BSE, such as implementation of a 
national animal identification program. 

Date: September 30, 2004; FDA: FDA announced the availability of 
industry guidance "Use of Material from BSE-Positive Cattle in Animal 
Feed." 

Source: GAO analysis of FDA and USDA documents. 

[End of table]

[End of section]

Appendix IV: Survey of State Agencies: 

[See PDF for image] 

[End of figure] 

[End of section]

Appendix V Chronology of FDA's Feed Ban and Proposed Rulemakings: 

August 4, 1997: 

FDA feed ban took effect, prohibiting certain materials in ruminant 
feed to prevent the establishment and spread of BSE if it were to 
appear in U.S. cattle herds. FDA took this action because it had been 
an industry practice to feed proteins to ruminant animals that could 
transmit the infective agent that causes BSE. Additionally, research in 
the United Kingdom suggested that variant Creutzfeldt-Jacob Disease 
(vCJD) in humans is linked to eating cattle infected with BSE. The feed 
ban requires that firms, with some exceptions, take the following 
actions: 

* label feed and feed ingredients that contain most proteins from 
mammals (prohibited material) with a cautionary statement "Do not feed 
to cattle or other ruminants,"

* have procedures to protect against commingling or cross-contamination 
if they handle both prohibited and nonprohibited feed and feed 
ingredients by using either equipment dedicated exclusively to feed or 
ingredients intended for cattle or using cleanout procedures or other 
adequate means to prevent carryover, and: 

* maintain records so that feed and feed ingredients that contain or 
may contain prohibited material can be tracked from receipt through 
disposition. 

According to FDA's rules, firms that transport both types of materials 
must also follow these procedures. Additionally, prohibited materials 
may be used in pet food and in feed for poultry, swine, horses, and 
other nonruminant animals. Lastly, FDA designated a number of cattle- 
and other animal-derived items as exempt from the ban--and hence, 
allowable in cattle feed. These items include blood and blood products, 
plate waste, gelatin, milk and milk protein, and any product whose only 
mammalian protein consists entirely of protein from pigs and horses. 
FDA has also not regulated the use of poultry litter in feed. 

October 30, 2001: 

FDA held a public hearing to solicit information and views regarding 
ways in which the current feed ban and its enforcement might be 
improved or to determine if any new objectives should be considered. 
FDA took this action because BSE had spread beyond the United Kingdom 
to most countries in western and central Europe and Japan. FDA asked 
for responses to 17 questions, including the following: 

* Should FDA require dedicated facilities for the production of animal 
feed containing mammalian protein?

* Should FDA require dedicated transportation of animal feed containing 
mammalian protein?

* Should FDA license renderers and other firms engaged in the 
production of animal feed containing mammalian proteins?

* Should FDA revoke or change any of the current exemptions in the 
current rule?

* Should FDA require pet food to contain the cautionary statement?

* Should FDA extend the recordkeeping requirement beyond 1 year?

* Should FDA request authority to assess civil monetary penalties?

November 6, 2002: 

FDA published an advanced notice of proposed rulemaking announcing that 
it was considering revising the feed ban and asking the public to 
comment on certain possible modifications. FDA explained that shortly 
after its October 2001 public hearing, USDA released a report by the 
Harvard Center for Risk Analysis on the findings of a major, 3-year 
initiative to develop a risk assessment model and assess the risk of 
BSE in the United States. The model concluded that the risk to U.S. 
cattle and to consumers from BSE is very low, but certain new control 
measures could reduce that small risk even further. Therefore, based on 
comments received at the public hearing and the findings of the Harvard 
Study, FDA asked for public comment on various ways that the BSE feed 
ban could be strengthened, including the following questions: 

* Should tissues that are known to be at higher risk for harboring the 
infective agent for BSE, such as brain and spinal cord from ruminants 2 
years of age or older be excluded from all rendered products?

* How extensive is the use of poultry litter in cattle feed, what is 
the level of feed spillage in poultry litter, and what would be the 
impacts resulting from banning poultry litter in ruminant feed?

* Should pet food for retail sale carry the cautionary statement "Do 
not feed to cattle or other ruminants?"

* Are there practical ways, other than dedicated facilities, for firms 
to demonstrate that the level of carryover of prohibited material in a 
feed mill could not transmit BSE to cattle or other ruminants? If so, 
what is the safe level of carryover of prohibited material and what is 
the scientific rationale for establishing this safe level?

* To what extent is plate waste used in ruminant feed and what would be 
the impacts from excluding this material from ruminant feed?

January 26, 2004: 

FDA announced that it would be issuing interim final rules to 
strengthen existing BSE firewalls, including banning a wide range of 
cattle material from human food, dietary supplements, and cosmetics, 
and strengthening the 1997 feed ban through an extended list of banned 
feeding and manufacturing practices. 

July 14, 2004: 

FDA, with USDA, announced that the agencies are considering additional 
measures to protect the public from the health risk associated with BSE 
and to prevent the spread of the disease in U.S. cattle and are asking 
for public comment. The agencies are considering additional safeguards 
based on the recommendations of a panel of international experts 
convened by the Secretary of Agriculture to review the U.S. regulatory 
response following the finding of a BSE-positive cow in Washington 
State in December 2003. In addition to some of the measures FDA had 
planned to take in an interim final rule, the international panel 
recommended broader measures, such as banning all mammalian and poultry 
protein from ruminant feed. Since these recommendations would require 
significant changes in current feed manufacturing practices and could 
make some previously announced proposals unnecessary, FDA requested 
additional information and public comment on the panel recommendations 
and other measures, including the following: 

* What information is available to support or refute the assertion that 
removing tissues that are known to be at higher risk for harboring the 
BSE infective agent, such as brain and spinal cord tissue, from all 
animal feed is necessary to effectively reduce the risks of cross- 
contamination of ruminant feed or of misfeeding on the farm?

* If FDA prohibits high-risk tissues from all animal feed, would there 
be a need to require dedicated facilities, equipment, storage, and 
transportation?

* What information is available to support banning all mammalian and 
poultry meat and bone meal from ruminant feed?

* If FDA prohibits high-risk tissues from all animal feed, what 
information is available to support banning all mammalian and poultry 
meat and bone meal from ruminant feed?

* Can high-risk tissues be effectively removed from dead stock and 
nonambulatory cattle so that the remaining material can be used in 
animal feed, or is it necessary to prohibit the entire carcass from use 
in all animal feed?

* Do FDA's existing authorities under the Federal Food, Drug, and 
Cosmetic Act and under the Public Health Service Act provide a legal 
basis to ban the use of high-risk cattle tissues and other cattle 
material in nonruminant animal feed, given that such materials have not 
been shown to pose a direct risk to these animals?

FDA also issued an interim final rule on July 14, 2004, to prohibit 
certain cattle materials in FDA-regulated food, including dietary 
supplements, and cosmetics, to minimize potential human exposure to the 
BSE infective agent. Specifically, FDA prohibited use of the brain, 
skull, spinal cord, and other specified tissues of cattle that are 30 
months or older; small intestine and tonsils of all cattle; material 
from nonambulatory disabled cattle or cattle not inspected and passed 
for human consumption; and beef that is mechanically separated from 
bones. FDA took this action in response to the finding of a BSE- 
positive cow in Washington State in December 2003 and to conform with 
an interim final rule issued by USDA in January 2004 declaring these 
materials unfit for human consumption. 

[End of section]

Appendix VI: Comments from the Food and Drug Administration: 

DEPARTMENT OF HEALTH & HUMAN SERVICES:
Food and Drug Administration: 
Rockville MD 20857:

January 13, 2005:

Robert A. Robinson:
Managing Director, Natural Resources and Environment: 
Natural Resources and Environment Team:
United States Government Accountability Office: 
441 G Street, NW:
Washington, DC 20548:

Dear Mr. Robinson:

Please find the enclosed comments from the Food and Drug Administration 
on the GAO draft report entitled, MAD COW DISEASE, FDA's Management of 
the Feed Ban Has Improved But Oversight Weaknesses Continue to Limit 
Program Effectiveness, GAO-05-101). The agency provided technical 
comments directly to your staff.

We appreciate the opportunity to review and comment on this draft 
report before its publication as well as the opportunity to work with 
your staff in developing this report.

Sincerely, 

Signed by: 

Lester M. Crawford, D.V.M., Ph.D 
Acting Commissioner of Food and Drugs:

Enclosure:

General Comments by the Department of Health and Human Services' Food 
and Drun Administration on the Government Accountability Office's Draft 
Report, MAD COW DISEASE: FDA's Management of the Feed Ban Has Improved 
But Oversight Weaknesses Continue to Limit Program Effectiveness, (GAO- 
05-101):

The Food and Drug Administration (FDA) appreciates the opportunity to 
review and comment on the Government Accountability Office's (GAO) 
draft report. While GAO has raised a few areas to further strengthen 
the feed ban program, FDA does not believe that material weaknesses 
were identified that support GAO's position that "various oversight 
weaknesses continue to limit program effectiveness of the ban and place 
U.S. cattle at risk of spreading BSE."

FDA commends GAO for conducting such a thorough and diligent study on 
such an important program and we appreciate the recognition of the 
enhancements put into place as we have expanded our activities. We note 
that this work was conducted in October 2003 through November 2004, and 
involved visits to 17 of 19 FDA district offices, visits to many states 
conducting inspections under the ruminant feed ban, a significant 
review of our data systems and multiple meetings with headquarters 
personnel. A considerable amount of FDA resource time has been devoted 
to responding to the information requests of this GAO study. While FDA 
has endeavored to provide both timely and complete responses, we note 
that FDA field offices alone expended approximately 1500 hours 
nationwide to provide the 413 inspection reports and to respond to 
questions from GAO during their visits. This does not include the 
ongoing information collection requested by GAO after the exit 
conference, of follow-up information on approximately two hundred feed 
samples.

FDA's ruminant feed ban regulation, our implementation of which uses a 
risk-based approach, potentially involves a wide variety of firms 
involved in the animal feed industry. Every firm that manufactures, 
transports, distributes or sells animal feed or feed ingredients for 
any animal species is subject to inspection under the FDA ruminant feed 
ban compliance program, regardless of whether prohibited material is 
utilized. Even swine and poultry farms that mix their own feed and 
grocery stores that sell pet food are potentially subject to inspection 
under this rule. All operations feeding ruminants, such as dairy and 
beef cattle, are also subject to the rule. In consideration of the 
limited resources for inspecting this large population of firms, FDA is 
obligated to set priorities for inspecting a meaningful subpopulation 
of these regulated firms.

FDA provides inspection priority direction to FDA and state 
investigators through publication of an inspection priority document as 
part of the BSE/Ruminant Feed Inspection Compliance Program guidance 
document. The highest priority for inspection is directed towards firms 
that are manufacturing or processing animal feeds or feed ingredients 
that contain prohibited material. This industry segment, which includes 
renderers, protein blenders, and feed mills, represents the most 
important industry segment to ensure that ruminant feeds do not contain 
prohibited material. This industry group is inspected on an annual 
basis.

Generally, firms outside of these segments collectively have a lower 
priority for inspection since the operations of the firms in the high 
priority segment of the industry pose the greatest risk of resulting in 
contaminated feed. Other segments, such as cattle feeders, are of 
interest to the FDA, but there are estimated to be over one million 
ruminant feeders in the U.S. While FDA does not have the resources to 
fully inspect certain industry segments, the agency continues to 
develop and utilize educational tools to compliment inspections and to 
promote voluntary compliance in these large industry segments. FDA will 
additionally implement inspectional initiatives to increase its 
presence in some of these less inspected segments, such as transporters 
and animal feed salvagers, based on our assessment of compliance and 
risk in these industry sectors.

We also do not agree with the assertion by GAO concerning the format 
with which FDA summarizes ruminant feed ban reporting of inspection 
results. FDA has provided a degree of transparency related to these 
inspections that is unprecedented, compared to any other inspection 
program. All data related to BSE inspections are posted on an Internet 
site that is available to Congress, industry and the public. FDA took 
this action because of the visibility of this inspection program and 
because of the recognition that one of the best tools to obtain 
compliance with the feed ban was public disclosure of our findings. 
While GAO may disagree with the context provided by any summary 
documents, our web site allows the user to analyze the data, in a 
multitude of ways, to provide their own contextual reference.

RECOMMENDATIONS FOR EXECUTIVE ACTION:

To further strengthen oversight and enforcement of the animal feed ban 
and to better protect U.S. cattle and American consumers, we recommend 
that the Secretary of Health and Human Services direct the Commissioner 
of FDA to take the following 9 actions:

1) Develop uniform procedures for identifying all firms subject to the 
feed ban.

FDA Comment:

FDA has already identified the merits of using a consistent procedure 
for identifying additional firms subject to its jurisdiction and has 
revised the Investigational Operations Manual (IOM).

As noted in the report, FDA acknowledges that more firms are subject to 
the feed ban than the over 14,800 that have been inspected to date. 
However, FDA's current inspectional strategy has been to focus on 
renderers, protein blenders, and feed mills, which we believe are the 
primary means of controlling feed and feed ingredients that may contain 
prohibited material. FDA believes that it has uniform procedures for 
identifying and inspecting these higher risk firms and that we have 
been successful in covering this inventory. The survey data collected 
by GAO from the states supports that, to a great extent, this inventory 
of firms has been both identified and inspected.

The issue that GAO raises in the draft report is related only to the 
lower risk firms that are purchasing feed ingredients from one of the 
higher risk establishments. FDA does not have the resources to inspect 
all ruminant feeders, transporters/haulers of feed, feed retailers and 
feed distributors that may be subject to this regulation. This total 
inventory is massive and for most of these firms there is either no 
commercial handling of prohibited material since they are handling only 
packaged product (like pet food), or there is limited manipulation of 
the product that would allow for contamination. Therefore, the FDA 
approach has been to selectively inspect sample firms in this lower 
risk category to assess their level of compliance with the regulations, 
and to assist in determining additional educational efforts that may be 
needed. FDA has inspected all firm types in these lower risk industry 
segments and continues to expand the number of inspections conducted 
both by FDA and the states in these lower risk categories. When FDA 
identifies a specific segment that may need additional inspectional 
coverage, the agency will issue specific assignments to broaden our 
coverage. This is the situation with the transporters/haulers and pet 
food salvagers for which the FDA's Center for Veterinary Medicine (CVM) 
is currently drafting an assignment to FDA's field operations.

GAO identified a process used by some FDA investigators, on some of the 
observed inspections, to help FDA identify additional firms. This 
process entails investigators writing down the names of the suppliers 
and customers of firms during inspections to check against the 
inventory of active firms. While there is value to GAO's suggestion, 
the recording of the supplier and customer names and later checking 
them against an inventory of active firms after all inspections would 
take additional resource time and is not resource neutral as suggested 
by GAO. The current BSE inspection module is 7.5 hours. Such inventory 
improvement would utilize time that would have to be diverted from 
conducting additional inspections. Nevertheless, FDA has already 
identified the merits of consistently using this approach. Earlier this 
year, as part of FDA's ongoing improvements in our security awareness 
program, we recently changed our 2005 Investigations Operations Manual 
(IOM) regarding the standard narrative report. IOM Chapter 593.03, 
Individual Narrative Headings, has been revised to advise the FDA 
Investigator to verify, during the initial inspection, distribution 
patterns for the firm's products, raw materials, and components to 
firms which warehouse or further process products which may be subject 
to FDA regulations. The 2005 IOM revision also reminds FDA District 
Offices that any new information should be incorporated into their 
Official Establishment Inventory (OEI) improvement activities. Lastly, 
this revised section also provides a cross-reference to the necessary 
section of the IOM that describes how to add firms to a District OEI. 
Once the 2005 IOM has been finalized, ORA will alert Districts through 
our various mechanisms to this change, which affects all ORA Inspection 
programs, including the BSE Inspection Program. We will also discuss 
this recommendation with the Field Veterinary Committee for 
incorporation into the next Compliance Program Guidance revision of the 
BSE Inspection program.

2) Require that firms that process with prohibited material notify FDA. 
If FDA believes it does not have legislative authority to require this, 
it should seek that authority from the Congress.

FDA Comment:

FDA's current regulations do not require that firms handling prohibited 
material notify FDA and the Federal Food, Drug, and Cosmetic Act 
(FFDCA) does not currently require such notification. If such a 
notification program were implemented, FDA would need significant 
additional resources to develop the notification regulation, develop 
collection and monitoring tools, collect the information, monitor the 
information and compliance with the requirement, and conduct follow- 
ups. FDA believes that our current approach of working collaboratively 
with our state counterparts does give us a good opportunity to keep 
abreast of changes firms may make in the use of prohibited material and 
to use our resources to focus on high risk firms. We continue to 
enhance our working relationships with our state counterparts to 
facilitate the exchange of such information.

In support of identifying all firms of higher risk, FDA has already 
initiated the process of reviewing records for food facilities that 
have registered with FDA under section 415 of the FFDCA, and 
determining whether there are any facilities that may potentially 
handle prohibited material that have registered but that we have not 
previously inspected. Under section 415 of the FFDCA, facilities that 
manufacture, process, pack, or hold food for consumption in the United 
States must register with FDA. When the facility registers, it must 
indicate if it manufactures, processes, or packs certain categories of 
food. The facility may voluntarily indicate if it manufactures, 
processes, or packs other categories of food. All categories of animal 
food are among those that facilities may voluntarily report to FDA. 
While the registration system has certain limitations, including an 
exemption for farms that process feed for their own animals, we believe 
that the registration information could still lead us to identify 
additional facilities that handle prohibited material.

3) Develop guidance for inspectors to systematically use feed 
microscopy and/or polymerase chain reaction (PCR) to verify the safety 
of cattle feed and to confirm the adequacy of firms' procedures for 
ridding equipment and vehicles of prohibited material before they are 
used for cattle feed or feed ingredients.

FDA Comment:

Since no test currently exists for the detection of the infectious 
prion agent that causes BSE in feed, analysis of feed is not by itself 
a means of verifying the safety of cattle feed. Additionally, feed 
microscopy and/or PCR are not adequate methods to make compliance 
decisions based on test results alone about the presence of prohibited 
material with respect to the ruminant feed ban rule. The feed 
microscopy method has limitations and the rule has exemptions. Feed 
microscopy generally can only detect the presence of mammalian tissue, 
through the identification of either bone or hair. In certain 
situations, feed microscopy can only detect the presence of animal 
tissue when blood is detected. The present ruminant feed ban allows for 
certain exemptions to the mammalian protein prohibition. Exempted 
materials include pure porcine meat and bone meal, blood (from any 
animal species, including ruminants), gelatin, and milk protein. 
Further, there is no prohibition on the use of non-mammalian proteins 
(e.g., poultry meal). The detection of certain non-specific materials, 
such as bone or muscle, may be the result of exempt ingredients, such 
as ruminant blood meal, pure porcine meat and bone meal, or poultry 
meal. PCR has similar limitations since the test cannot differentiate 
between prohibited material ingredients and certain ruminant- 
containing exempt ingredients, such as ruminant blood, ruminant milk 
products, and plate waste. Since feed microscopy and PCR cannot 
differentiate prohibited material from other acceptable materials, the 
analytical results cannot be used to verify the presence [or absence] 
of prohibited material, nor used for confirming the adequacy of clean- 
out measures.

On August 18, 2003, FDA/CVM issued a sampling assignment to the FDA 
field staff for the collection of 600 domestic samples [increased to 
900 samples for the current fiscal year]. The characteristics of the 
ruminant feed ban sampling assignment are unique when compared to other 
FDA sampling programs. Other programs are more simply based on 
methodology that can definitively detect the presence of the 
objectionable contaminant or pathogen. Further, the nature of the 
contaminants in some of the other programs allow for the establishment 
of tolerance levels. The mere detection of a pathogen or some of these 
contaminants, possibly with respect to an established tolerance, is 
sufficient to result in the finding of a violation in these other 
programs. In contrast to these other programs, analytical findings 
alone under the ruminant feed ban program cannot establish the 
occurrence of a violation to the rule. As the ruminant feed ban 
assignment notes, positive analytical findings necessitates follow-up 
evaluations in determining whether the findings were indeed the result 
of ruminant feed ban violations.

The fairly recent implementation of this unique ruminant feed ban 
sampling program has involved efforts to educate laboratory personnel 
as to the limitations of the methodology, and the approach in 
categorizing the lab results. Laboratory personnel have been educated 
through conference calls, training, and individual telephone 
conversations in classifying these samples. Further, field 
investigators have been instructed that regulatory action should not be 
taken on the basis of sample analysis alone. (See the Enforcement and 
Regulatory follow-up sections in the BSE/Ruminant Feed Ban Inspections 
Compliance Program Guidance and the Domestic Feed Sampling Assignment, 
respectively.) In the next fiscal year, FDA intends to provide 
additional guidance to describe the variety of situations where animal, 
mammal and/or ruminant tissue may be present in an animal feed or feed 
ingredients. Through an analysis of the experience derived from the 
first year of the sampling assignment, FDA will revise overall sampling 
instructions in the sampling assignment, with these sampling procedures 
eventually being incorporated into the BSE/Ruminant Feed Ban 
Inspections Compliance Program guidance document.

4) Collect feed test results from states that sample feed to help 
verify compliance with the feed ban.

2002 GAO BSE Study:

Recommendation to track enforcement actions taken by states.

2002 FDA Comment:

FDA thanks the GAO for this recommendation. FDA needs to more fully 
evaluate the impact of this recommendation. FDA does not have the 
authority to require that all states track and report to FDA 
enforcement actions taken. Currently, state laws differ on what 
inspection and enforcement authorities each state has and the ability 
of each state to provide such information to FDA. We do strongly 
support the concept of voluntarily sharing inspection and enforcement 
actions taken by FDA and our state partners. This was one of the 
primary motivators for our quarterly FDA-State regulator BSE meetings 
to provide a forum to share such potentially confidential information.

2004 GAO BSE Study:

Recommendation to collect feed test results from states that sample 
feed to help verify compliance with the feed ban.

FDA Comment:

We have included the comment from GAO's 2002 recommendation on tracking 
enforcement actions by states as these two recommendations present some 
of the same difficulties for the agency. First is the fact that each 
state agency may enforce different state laws and regulations regarding 
feed manufacturers and these laws and regulations may not be the same 
as the federal rules. The collection of enforcement actions and sample 
results could, therefore, actually confuse the enforcement and 
compliance national picture rather than enhance it. Second, concerning 
both enforcement and collection of samples, until FDA and the states 
have developed a standard for sampling procedures, analytical 
techniques, and enforcement strategies, the shared data would be 
considered skewed and potentially misleading. While enforcement could 
be equalized through adoption of equivalent regulations by the states, 
FDA would have to evaluate each state enforcement program through our 
audits, which would require field inspection resources. Accepting 
sample results would also require not only the use of equivalent 
testing protocols, e.g. using acceptable ELISA test kits, but also may 
involve the evaluation of the laboratory and laboratory personnel. 
Performing this type of evaluation would require resources currently 
not available to FDA. With the current test and with the implementation 
of the very sensitive PCR test, the test could be positive for exempt 
ingredients or for non-ruminant material such as mice, rats, etc.

To enhance our sampling/analytical aspects of this program, FDA is 
incorporating collection of samples under the Feed Manufacturing/BSE 
state contracts. States will submit these samples to FDA laboratories 
to support FDA's own efforts in surveying the animal feed industry. FDA 
is also considering expanding, as funding permits, the Electronic 
Laboratory Exchange Network (eLEXNET) to include animal feeds. eLexnet 
is a nationwide laboratory data network that allows member laboratories 
the ability to detect, compare and communicate findings. Also with 
proper funding, FDA will add the state contract feed manufacturer 
programs into eSAF (electronic state access to FACTS) in FY05/06. Once 
the programming is funded and completed, the states will be able to 
enter their contract data (or other inspections) into the system and 
both FDA and the state will be able to review all the entered 
inspections for that particular state. This will improve the timeliness 
of information collected by states during feed establishment 
inspections.

5) Develop a sample design for FDA's inspectors to use for sampling 
finished feed and feed ingredients that will allow FDA to more 
accurately generalize about compliance with the feed ban from the test 
results.

FDA Comment:

Sampling of finished feed and feed ingredients cannot serve as a basis 
to generalize compliance with the feed ban. As explained in the above 
responses, the current tests available and in use today are not 
definitive for prohibited material. Feed microscopy has limitations, 
including that it can demonstrate animal tissue and can sometimes 
determine if the tissue is mammalian, but cannot distinguish between 
prohibited mammalian protein, non-prohibited protein, and exempt 
mammalian protein. The test being used today [feed microscopy] provides 
information that there may be a potential problem. The only way to 
determine compliance with the feed ban is to conduct an inspection of 
the firm. The feed sampling assignment is designed to be an additional 
way to review products in the marketplace. Finding a positive result 
from feed microscopy provides information for us to conduct targeted 
follow-up inspections but does not by itself prove the presence of 
prohibited material and a violation of the ruminant feed ban.

The August 18, 2003 domestic assignment directs ORA Field personnel to 
routinely sample and analyze feed to verify compliance with the feed 
ban. (See excerpt below.)

Samplinq Information:

A. Sample Selection:

Products should be selected for sampling using the following criteria:

1. Animal feed, feed ingredients, and other animal feed products as 
identified in Attachment B to this assignment.

2. Products intended for ruminant animals. These products should be 
given the highest priority for collection. At least one half (1/2) of 
the samples should be selected from these products if possible.

3. Animal feed, feed ingredients, and other animal feed products that 
are labeled as containing animal protein but do not bear the caution 
statement "Do not feed to cattle or other ruminants" on the label.

4. Animal feed, feed ingredients, and other animal feed products that 
do not list mammalian protein in the product name or ingredient list.

5. Each sample should represent a different source, processor, or 
manufacturer if possible.

Attachment B:

Products/ Product Codes Covered by this Assignment:

69 - Medicated Animal Feeds:

69[][][][][]All Products:

70 - Non-Medicated Animal Feeds:

70[][][][][] All Products:

71 - By-product for Animal Food:

71 [] [] [] [] [] All Products:

6) Seek authority from the Congress to require the cautionary statement 
on feed or feed ingredients that are intended for export and that 
contain prohibited material. In the meantime, FDA should encourage 
firms to include such cautionary statement on these exports.

FDA Comment:

The Federal Food, Drug, and Cosmetic Act currently does not include a 
provision that directly requires feed or feed ingredients intended for 
export to bear the cautionary statement. We note that, if FDA 
determined that it would be appropriate for the agency to adopt a 
policy encouraging exporting firms to voluntarily include a cautionary 
statement on feed labels, the agency would first need to determine 
whether such a policy must be issued under FDA's Good Guidance Practice 
regulations at 21 CFR 10.115. Under those regulations, a guidance 
document is a document that includes the agency's "interpretation of or 
policy on a regulatory issue." For the most part, FDA focuses its 
policies on matters under its regulatory authority. In addition, before 
FDA could adopt a policy to encourage the use of the cautionary 
statement on exports, it would need to determine that such a statement 
would not be inconsistent with the laws of other countries in light of 
the requirement in section 801 (e) of the Federal Food, Drug, and 
Cosmetic Act that the product is not in conflict with the laws of the 
country to which it is intended for export.

FDA has a comprehensive program that reviews the entry of all feed 
commodities that either are ingredients or may end up as ingredients in 
ruminant feed. FDA detains animal feeds or feed ingredients that 
contain ingredients of animal origin and that are imported from 
countries identified as having BSE or being at risk for having BSE. 
This system does not rely upon other countries to enforce FDA labeling 
requirements for feed with prohibited material. Other countries have 
similar programs to refuse entry to imported products that pose a risk 
of BSE. Each country thus assumes responsibility for enforcing its own 
laws with respect to BSE.

Even if FDA were to require products for export that contain prohibited 
material to include the cautionary statement, this statement might not 
make the product acceptable to the importing country and may conflict 
with the country's own label requirements. FDA refuses import of 
products into the U.S. with such material from BSE risk countries 
regardless of whether they have such a warning because of the risk of 
diversion.

Currently FDA's guidance for exports, as excerpted below, focuses on 
clearly labeling the product for export and providing guidance on 
material that may be brought back into the U.S.

PRODUCTS FOR EXPORT:

* Prohibited protein product destined for export should be marked "FOR 
EXPORT ONLY" on the shipping containers if appropriate and on documents 
accompanying the shipment. No other labeling would be required for 
purposes of this regulation but there may be additional labeling 
requirements for the country of destination.

* Any prohibited protein product destined for export which is diverted 
back to domestic commerce for any reason (salvage, quality, etc.), will 
be subject to all of the requirements of the regulation. This will 
include the requirement to label the product with the cautionary 
statement "Do not feed to cattle or other ruminants."

* Responsibility for these prohibited protein products rests with the 
owner of the goods (holder of the title to the goods). The owner is 
responsible for assuring that they are not diverted back to domestic 
commerce unless they meet the requirements of the regulation, including 
use of the cautionary labeling statement.

7) Ensure that procedures for alerting USDA and states are followed 
when inspectors discover that feed or feed ingredients with prohibited 
material may have been fed to cattle.

FDA Comment:

FDA has and continues to coordinate closely with USDA and state 
officials on issues related to BSE. FDA has notified both States and 
USDA when the agency assessment was that their involvement was 
important from a public health perspective. Nevertheless, FDA accepts 
the GAO recommendation and will consider notifying USDA to allow full 
information to be exchanged with USDA whenever there has been a recall 
in which prohibited material from domestic or from an imported source 
may have been used as an ingredient in feed, or as feed for ruminants.

The GAO draft report states that "...although FDA has procedures for 
alerting USDA and states when it discovers that cattle may have 
consumed feed that contains prohibited material, FDA officials told us 
that they have never given such notification even though they have 
identified the prohibited material being used in cattle feed in the 
past. FDA said that notification is not needed because BSE has not been 
discovered in a cow born in the United States...."

The section referenced by GAO is found in the FDA compliance program 
guidance entitled BSE/Ruminant Feed Ban Inspections, and pertains to 
recalls. It provides "generic" scenarios that could be encountered by 
field personnel and suggests appropriate courses of action. The purpose 
of this information is to provide guidance to assure similar recall 
situations will be handled in a consistent manner, and to reduce the 
burden on FDA of having to re-evaluate situations that present the same 
variables. This compliance program guidance is not intended to cover 
all situations, and any new or novel scenarios will require review and 
evaluation by CVM. The guidance to contact USDA is found in the second 
scenario on "prohibited material from domestic or from an imported 
source is used as an ingredient in feed, or as feed to ruminants" and 
is cited below U.S. manufacturer of non-ruminant animal feeds uses 
prohibited material from a domestic source, or from an imported source, 
and that feed is fed to ruminants either as a supplement (i.e., dairy 
cow supplement), by mistake, or unknowingly due to inadequate 
flushing/cleaning of equipment.

(1) Classification: Class II:

(2) Reason: The ruminant feed or feed ingredient contains prohibited 
material, with or without a caution statement.

(3) Action:

* Production/Distribution: Pending results of the investigation.

* Publicity: Press should be issued immediately by the responsible firm 
and/or FDA in accordance with established policy for Class I recalls. 
Publication in the FDA Enforcement Report once the recall action has 
been classified.

* Recall: Pursue voluntary recall to the retail level by the 
responsible firm, or seek FDA requested recall.

Depth: Retail level; 
Notification: 100%; 
Effectiveness Checks: Level A, 100% verification of notification and 
appropriate response;
Audit Checks: Level B (25%) to direct consignees (distributors/ 
retailers). Level B (25%) to retail accounts of audited distributors.
Inspection: GMP inspection is indicated to review production controls, 
scope of possible adulteration, extent of time such practices have been 
ongoing, and to obtain necessary recall information.
State Involvement: Advise State counterparts of the situation and 
enlist their assistance in monitoring.
Animal Control: Assess control over the disposition of ruminant animals 
fed the prohibited protein so as to prevent their slaughter for human 
food or other animal feed. Coordination with States and USDA/FSIS 
should be considered. Consult with CVM regarding coordination and 
regulatory approach of animal disposition. 
Disposition of recalled/ held product: Oversee appropriate disposition 
of feed and status of animals that have been fed the feed. Determine if 
relabeling feed with the warning label is an option.

FDA believes that it has followed this guidance and considered 
notification of USDA. While it is true that FDA has not notified USDA 
of every incident when animal feed was recalled and potentially fed to 
ruminants, FDA does consider the need to notify USDA based on our 
assessment of the facts in each unique situation. In each case FDA 
looks into the source of the prohibited material (imported or domestic 
source), what species of ruminant is it being fed to 10 (cattle or 
other species not known to acquire natural infection by the agent of 
BSE), the potential level of contamination with prohibited material in 
the feed, as well as the level of evidence available to determine if 
ruminant animals may have actually consumed any prohibited material.

Again, FDA will continue to coordinate closely with USDA and state 
officials on all issues related to BSE.

8) Modify the BSE inspection form to include questions inspectors can 
use to document whether firms that process or handle cattle feed or 
feed ingredients have procedures to ensure the cleanliness of vehicles 
they use to transport that cattle feed and feed ingredients.

FDA Comment:

FDA has attempted to limit the number of changes to avoid having 
multiple versions of the reporting tool in use as well as to enhance 
the quality of the data. However, we will consider whether modifying 
the reporting tool would be appropriate. We would emphasize that the 
checklist is an inspection reporting tool, not the guidance for the 
inspection. As a reporting tool, it reflects the overall results of the 
inspection but does not capture every item that is inspected, reviewed, 
or evaluated during the inspection. The Compliance Program provides 
comprehensive instructions to the inspectors about inspection methods, 
areas to look at, records to review, and questions to ask. The 
following are two excerpts from the Compliance Program which 
specifically include review of transport conveyances. 

Firms Avoiding Commingling with Adequate Clean-out Procedures - If the 
same equipment is shared for both products containing prohibited 
material and products containing only non-prohibited material, describe 
the clean-out procedures. Clean-out can consist of physical cleaning 
(e.g. vacuuming, sweeping, washing), flushing, sequencing, or other 
means, either alone or in combination with separation measures, that 
are adequate to prevent carryover of prohibited material into runs that 
are intended to be free of prohibited material. Clean-out procedures 
should be used on all equipment and conveyances (e.g. trucks, rail 
cars) that handle both prohibited material and non-prohibited material.

Feed Storage. [This section is included in the information on 
inspection of ruminant feeders]

Feed storage, particularly in operations where both ruminant and non- 
ruminant species are being fed, should be examined. If ruminant feeds 
and non-ruminant feeds are stored in the same location, the 
investigator should note the procedures used for ensuring that ruminant 
animals are not fed non-ruminant feeds and should take photographs or 
draw diagrams of feed bins and equipment. In particular, investigators 
should note whether Feed bins are labeled to identify ruminant and non-
ruminant feed. (This is not required by 21 CFR 589.2000 but will help 
the investigator determine whether ruminants have been fed non-ruminant 
feed.)

Bulk feeds for ruminants are separated from non-ruminant feeds for 
preventing mix-up, commingling and/or cross-contamination (This is not 
required by 21 CFR Section 589.2000 but will help the investigator 
determine whether ruminants have been fed non-ruminant feed.)

Transportation and feed equipment handling both ruminant and non- 
ruminant feeds is either separate or adequately cleaned (See Section 
(2)(c)).

9) Ensure that inspection results are reported in a complete and 
accurate context.

FDA Comment:

FDA believes that it has reported inspection results in a complete and 
accurate context.

GAO states that FDA has reported that industry is 99 percent in 
compliance with the feed ban. GAO further states that they do not 
believe that FDA has enough information or enough current information 
to cite a rate of compliance. GAO also notes that FDA has not inspected 
the universe of firms subject to the ban, many inspections are five or 
more years old, and inspections are largely paperwork review with very 
little testing to confirm compliance.

We do not agree with GAO's conclusion that FDA is reporting data that 
is incomplete and not accurate. FDA has made tremendous efforts, and at 
great cost, to have every inspection posted on FDA's Internet site. 
This extraordinary level of transparency, which is unique to this 
program, allows Congress, Industry and the public to view the 
inspection results, virtually at the same time as it is entered into 
the agency's FACTS system. The data is available to be searched and 
sorted by any number of variables to allow the user to ascertain their 
own perspective on the data. Additionally, FDA publishes CVM Updates on 
"Ruminant Feed (BSE) Enforcement Activities." These updates have been 
published on a periodic basis since January 10, 2001. These reports 
identify inspection results by type of industry using the standard FDA 
inspection classification criteria. At FDA's exit conference with GAO, 
GAO advised that these updates were an accurate and complete depiction 
of BSE inspection results.

While we understand GAO's perception with regard to the one line 
synopsis of overall inspection results as having a confusing message, 
this confusion is not due to a lack of candor on the part of the 
agency. We also do not agree that our "inspections are largely 
paperwork review with very little testing to confirm compliance." Our 
BSE inspections are thorough assessments where the inspector spends a 
considerable amount of their inspection time on the plant floor judging 
the firm's compliance with the feed ban regulation. Furthermore, review 
of paperwork, including records of feed ingredient receipt and lists of 
feed ingredients, are one component of our inspections and are crucial 
to FDA enforcement of the feed ban. FDA believes that its current 
regulatory approach, of assuring compliance of FDA's feed rule by the 
major suppliers and users of cattle feed, is the most effective 
approach in making sure the public health is protected. 
The following are GAO's comments on the Food and Drug Administration's 
letter dated January 13, 2005. 

GAO Comments: 

1. We believe the report identifies numerous oversight weaknesses that 
continue to limit program effectiveness and place cattle at risk. The 
purpose of the feed ban firewall is to prevent the exposure and spread 
of BSE. A well enforced feed ban is even more critical now that BSE has 
been discovered in cattle in North America. As shown in our report, FDA 
does not know the compliance status or risks posed by firms it has not 
identified, inspected or reinspected for many years. FDA acknowledged 
that many more firms are subject to the feed ban than have been 
inspected to date but said the agency must set priorities for the 
number and types of firms it can identify and inspect with limited 
inspection resources. We agree with FDA's use of a risk-based 
inspection approach; however, FDA acknowledges the need to increase 
inspections of certain industry segments, such as transporters and 
animal feed salvagers. Moreover, for firms that FDA inspects, it does 
not routinely sample feed to verify whether the operating procedures 
observed by its inspectors are actually preventing prohibited materials 
from contaminating cattle feed. Our recommendations are aimed at 
ensuring that FDA has a strategy for maximizing the effectiveness of 
its limited inspection resources, targeting inspections, and using feed 
tests to minimize the risk of cattle being fed prohibited material. 

2. Our concern is precisely that the data are being analyzed and 
interpreted in an erroneous context. Specifically, when FDA and 
industry used those data to assert a 99 percent compliance rate with 
the feed ban, they took that information out of context. While industry 
compliance may in fact be quite high for firms FDA has inspected 
recently, FDA's data are not sufficient to project compliance 
industrywide. FDA does not know the status of compliance for firms that 
have never been inspected or have not been reinspected in years. In 
addition, compliance history is lost--firms that had serious and long- 
standing violations are classified as "in-compliance" once FDA 
determines that the problems are corrected. FDA is not reporting that 
the firms were ever out of compliance or the length of time that the 
feed ban was violated. Lastly, inspection results are largely based on 
a review of paper documents and a visual inspection, with little or no 
feed testing. Given these data concerns and compliance unknowns, we 
believe that FDA's data should not be used to project industry 
compliance and, anytime those data are cited, they should be reported 
in a complete and accurate context. 

3. FDA agrees that there are industry sectors (such as transporter and 
animal feed salvagers) that need to be assessed to determine their 
potential risk to U.S. cattle. In fact, FDA acknowledges that there are 
millions of firms potentially subject to the feed-ban rule. At the same 
time, FDA implies that it has identified all high-risk firms. FDA has 
no basis for that assertion. The example we suggest in this report is 
one way of identifying additional firms that we observed during our 
review. FDA identified other approaches that its districts used to 
identify other firms. We believe that any approaches FDA identifies as 
useful should be applied uniformly across all FDA districts. We 
included information in the report on how FDA plans to use the $8.3 
million it received in the 2005 budget. We also revised the report to 
include FDA's estimate of the number of firms that feed cattle and 
other ruminants and revised the recommendation in recognition that it 
may be impossible for FDA to identify all firms subject to the feed-ban 
rule. 

4. FDA suggests that requiring notification would take significant 
resources. The cost of the notification program will depend on the 
requirements FDA puts in place. In developing the program, FDA could 
target the notification to firms that pose potentially high-risk for 
exposing cattle feed to prohibited material. According to FDA, of the 
14,800 firms it has inspected, about 570 renderers, protein blenders, 
and feed mills comprise the high-risk firms subject to notification 
because they manufacture or process prohibited material. While we 
believe there may be more firms that fall into this group, it should 
not be a significantly larger number. If it is significantly larger, 
that is something FDA needs to know. Furthermore, requiring industry to 
self-report is another mechanism that would help FDA identify firms and 
oversee compliance. Finally, FDA has registration requirements in place 
for medicated feed firms and for food facilities, and could draw on its 
experience with those programs for developing a notification program 
for firms subject to the feed-ban rule.[Footnote 27] Because firms can 
change their practices over time, we believe it is important that firms 
notify FDA whenever such changes occur. 

5. While we agree that the current test methods have certain 
limitations, we believe that testing can be a valuable tool for helping 
FDA oversee compliance with the feed ban. FDA maintains that, because 
the current test methods cannot differentiate prohibited material from 
exempt material, they cannot be used to verify the presence or absence 
of prohibited material or to confirm the adequacy of cleanout measures. 
However, states told us that they are using tests for these purposes. 
Moreover, FDA is currently testing finished feed and using the test 
results, together with follow-up inspections, to determine whether the 
feed ban had been violated. We believe tests would help inspectors who 
now rely on only paperwork review and visual examination to determine 
the adequacy of cleanout procedures. Tests would also be useful for 
vegetable-based cattle feed, where detecting the presence of animal 
protein would indicate a violation. We revised the recommendation to 
recognize that FDA may elect to use other test methods in addition to 
feed microscopy and polymerase chain reaction (PCR). With respect to 
FDA's sampling of finished feed, the 660 samples FDA tested were not 
collected during feed-ban compliance inspections. We plan to report 
later this year on FDA's sampling of finished feed. 

6. We agree that FDA's current test methodology will not allow it to 
use test results alone to verify feed-ban violations. However, testing 
combined with follow-up inspections would allow FDA to be in a better 
position to generalize about compliance with the feed-ban rule if FDA 
developed a random sample methodology for inspectors to use for 
sampling finished feed and feed ingredients. (Also see comment 5.)

7. After clarifying FDA's comment with an attorney in FDA's Office of 
the Chief Counsel, we revised the report and the recommendation to 
delete references that FDA should encourage firms to include a 
cautionary statement on feed exports that may contain prohibited 
material. We believe that it would be more prudent for FDA to focus its 
efforts on obtaining statutory authority to require that the cautionary 
statement be used on such exports. 

8. We revised the recommendation to clarify that FDA should be alerting 
USDA and the affected states whenever inspectors discover that cattle 
may have consumed feed with prohibited material. 

9. Based on the inspections we observed and the 404 inspection reports 
that we reviewed in detail, we believe that inspector activities during 
feed-ban compliance inspections are driven by the checklist 
items/questions on the BSE inspection form. Therefore, we believe the 
checklist should include specific questions to prompt inspectors to 
examine vehicles and firms' cleanout procedures on every inspection. 

10. As noted in the report, FDA believes that it provides the 
inspection results in a transparent, compete, and accurate context. FDA 
notes that the BSE inspection data posted on its Web site "allows the 
user to analyze the data, in a multitude of ways, to provide their own 
contextual reference." Our concern is precisely that the data are being 
analyzed and interpreted in an erroneous context. Specifically, when 
FDA and industry used those data to assert a 99 percent compliance rate 
with the feed ban, they took that information out of context. While 
FDA's calculation of compliance by a subset of regulated industries may 
in fact be quite high, FDA's data are not sufficient to make that 
projection for all regulated industries because of the many problems we 
cite in the report. Specifically, FDA does not know the status of 
compliance for firms that have never been inspected or those that have 
not been reinspected in years. FDA also does not know if a firm that it 
previously inspected and classified as low-risk has started using 
prohibited material; and FDA reclassifies a firm in the database from 
"out-of-compliance" to "in-compliance" when it corrects a violation--
even when the violation was serious and long-standing. Lastly, 
inspection results are largely based on a review of paper documents and 
a visual inspection, with little or no feed testing. Given these data 
concerns and compliance unknowns, FDA's data should not be used to 
project industry compliance and, anytime those data are cited, they 
should be reported in a complete and accurate context. 

[End of section]

Appendix VII: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Robert A. Robinson, (202) 512-3841; 
Erin Lansburgh, (202) 512-3017: 

Staff Acknowledgments: 

In addition to the individuals named above, Vincent Balloon, Jim 
Dishmon, Natalie Herzog, Lynn Musser and John C. Smith made key 
contributions. Other contributors included George Quinn, Carol 
Herrnstadt Shulman, Joan Vogel and Amy Webbink. 

(360391): 

FOOTNOTES

[1] It is a common nutritional practice to add protein (derived from 
animals or plants) to speed animal growth. 

[2] GAO, Mad Cow Disease: Improvements in the Animal Feed Ban and Other 
Regulatory Areas Would Strengthen U.S. Prevention Efforts, GAO-02-183 
(Washington, D.C.: Jan. 25, 2002). 

[3] 21 C.F.R. 589.2000. 

[4] Ruminants are animals with four-chambered stomachs, including, but 
not limited to, cattle, buffalo, sheep, goats, deer, elk, and antelope. 
For the purpose of this report, unless stated otherwise the term 
"cattle" refers to cattle and all other ruminant animals and the term 
"cattle feed" refers to feed for cattle and other ruminant animals. 

[5] The feed-ban rule is based on FDA's authority to regulate food 
additives. See 21 U.S.C.  321, 348. 

[6] Plate waste is discarded meat and other food from institutions, 
restaurants, and other dining facilities, which is collected by 
processors, recooked to eliminate bacteria, and used in animal feed as 
a protein source. Gelatin is made from boiling animal bones, cartilage, 
tendons, and skin. 

[7] FDA is responsible for inspections in the 12 states that do not 
have contracts or agreements with FDA to conduct inspections. 

[8] Renderers process animals unfit for human consumption and waste 
material (carcasses and meat scraps) from slaughterhouses and 
processors into a protein for animal feed. Protein blenders mix 
rendered proteins into feed ingredients. 

[9] GAO-02-183. 

[10] The prion hypothesis is widely, although not universally, 
accepted. Some scientists believe a virus or other conventional agent, 
as yet undetected, gives rise to TSEs. 

[11] Under certain laboratory conditions, high temperature, pressure, 
and caustic chemicals have been shown to deactivate prions. 

[12] These data are as of February 1, 2005, for Canada and as of 
December 2004 for all other regions/countries. 

[13] Researchers also believe that one probable case of vCJD reported 
in the United Kingdom was the result of a blood transfusion from an 
infected donor. 

[14] Canada implemented its feed ban on the same day that the United 
States implemented its feed ban. 

[15] Evaluation of the Potential for Bovine Spongiform Encephalopathy 
in the United States, Harvard Center for Risk Analysis, Harvard School 
of Public Health and Center for Computational Epidemiology, College of 
Veterinary Medicine, Tuskegee University, Nov. 26, 2001. 

[16] Evaluation of the Potential Spread of BSE in Cattle and Possible 
Human Exposure Following Introduction of Infectivity into the United 
States from Canada, Harvard Center for Risk Analysis, Harvard School of 
Public Health, Oct. 31, 2003. 

[17] FDA's feed-ban inspection guidance, called the BSE/Ruminant Feed 
Ban Inspections Compliance Program Guidance, was issued on October 21, 
2003. 

[18] USDA discovers these violations in tests and visual examinations 
at meatpacking plants. 

[19] FDA officials said this funding would be used for additional state 
and federal inspections, inspector training, industry outreach, and to 
improve FDA's ability to respond to problems found during BSE 
inspections. 

[20] States reported on a 12-month time period, which could have been 
the calendar year, federal fiscal year, or state fiscal year. 

[21] An attorney with FDA's Office of the Chief Counsel said that FDA 
could require a cautionary statement only if the absence of such a 
statement would cause the feed to be in conflict with the laws of the 
importing country. See 21 U.S.C.  381. 

[22] USDA's Animal and Plant Health Inspection Service has the 
authority to seize and destroy cattle and compensate producers for the 
cattle. 

[23] Salvaged pet food containing prohibited materials must be labeled 
with the cautionary statement. 

[24] These steps take on added importance, given the Department of 
Transportation's recent proposed rule under the Sanitary Food 
Transportation Act. In the preamble to the proposed rule, the 
department stated that it, along with USDA and FDA, had concluded that 
the expertise for ensuring the safety of the food supply, including 
transportation, lies with USDA and FDA and that implementation of a 
food transportation safety program under the Department of 
Transportation would be unnecessarily duplicative. The proposed rule 
would incorporate USDA and FDA guidance on the transportation of food. 
69 Fed. Reg. 76423 (Dec. 21, 2004). 

[25] Previously, we reported that FDA has been using inaccurate, 
incomplete, and unreliable data to track and oversee feed ban 
compliance (GAO-02-183). 

[26] At the time of our review, the following states did not have a 
contract or partnership agreement with FDA to perform and report BSE 
inspections to the agency: Alaska, Connecticut, Delaware, Hawaii, 
Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, Rhode 
Island, South Carolina, and Wyoming. 

[27] The registration requirement for food facilities is provided for 
in the Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002, Pub. L. No. 107-188; 116 Stat. 594 (2002). 

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