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 FAS Mission 

 Richard Krajeck 

 November 10, 1993 



Programs that are Critical /Expendable 



The services provided by FAS are broad and obviously designed to meet the needs 

 from a wide range of agricultural coaimoditiei>. Thus, any comments I would make 

 are limited to those activities as they relate to the Council and the Cooperator 

 program. 



FAS overseas offices and the assistance of the Agricultural Counselors and 

 Attaches are certainly critical to the Council and other Cooperators. FAS 

 provides support in almost every country that is currently an importer of O.S. 

 feed grains as well as those identified as potential future markets. The reporting 

 component of FAS provides much needed world wide supply and demand information. 

 It is this information and related trade leads that help us target and develop 

 new and niche markets, as well as maintain a flow of feed grains into the world 

 marketplace. 



The philosophy of the Cooperator program was to bring together the resources of 

 the private and public sector to develop markets for US agricultural products. 

 This program was started with the belief that the U.S. would benefit from 

 increased exports. As you well know, agricultural exports return a positive 

 trade balance of $18 billion/yeeLT. 



However, over the past 5-8 years the program has become adversarial rather than 

 cooperative. The change in this attitude can be almost directly attributed to 

 Congressionally requested audits of the General Accounting Office (GAO) , The 

 audits have said that the relationship between FAS and the Cooperators is "too 

 friendly." Somehow, the spirit of cooperation between the private and public 

 sector is now seen as "dirty" and that the Cooperators are out to loot the 

 government . 



As far as I am aware, in the nearly 40 years of the Cooperator program there has 

 never been an major audit finding against a Cooperator or FAS for the 

 mismanagement of funds. However, because of the mistrust created by GAO, we are 

 both forced to increase our expenditures significantly just to audit the program. 

 The money that is spent on audits and increased r-::ord keeping are then not 

 available for market development activities. For the Council, there is no doubt 

 that our audit component has increased by more than 3 fold in the last 6 years. 



This runaway audit demand has significantly stifled both program creativity and 

 our ability to respond to changing market conditions. The decision-making 

 process in FAS regarding program audits rests within three areas whose demands 

 we must simultaneously try to meet: the Feed and Grain Division, Compliance and 

 Marketing Operations Staff (MOS) . There appears to be a lack of coordination 

 between these divisions which results in contradictions as rules pile on top of 

 rules and we are nearly paralyzed by the resulting bureaucracy. 



I am not for a minute advocating that auditing be eliminated: that would 

 irresponsible to the U.S. taxpayer. But fiscal responsibility must be balanced 

 with the excellent record of the program and the need to increase efficiency. 

 Following are some examples of the additional burden that we have been forced to 

 operate under: 



1) The auditing requirements limit our flexibility in adjusting our marketing 

 plans in terms of the time spent in each country, the number of participants in 

 each activity and the funds available for supervisory travel. We are forced to 

 maintain programs that were devised and approved by FAS in some instances 18 

 months prior to implementation. 



