This is the accessible text file for GAO report number GAO-02-183 
entitled 'Mad Cow Disease: Improvements in the Animal Feed Ban and 
Other Regulatory Areas Would Strengthen U.S. Prevention Efforts' which 
was released on February 26, 2002.

This text file was formatted by the U.S. General Accounting Office 
(GAO) to be accessible to users with visual impairments, as part of a 
longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov.

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately.

Report to Congressional Requesters:

United States General Accounting Office:

GAO:

January 2002:

Mad Cow Disease:

Improvements in the Animal Feed Ban and Other Regulatory Areas Would 
Strengthen U.S. Prevention Efforts:

GAO-02-183:

Contents:

Letter:

Results in Brief:

Background:

Weaknesses Exist in Federal BSE Prevention and Detection Efforts:

The Economic Impacts of a U.S. Outbreak Could Be Severe, and the Health 
Risks Are Uncertain:

The United States Set Controls on Importing Animals and Met BSE Testing 
Goals Earlier Than Many Countries, but Its Feed Ban Is More Permissive:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Appendix I: Scope and Methodology:

Appendix II: Comments from the Department of Health and Human Services:

Appendix III: Comments from the Department of Agriculture:

Appendix IV: Comments from the Customs Service:

Appendix V: GAO Contacts and Staff Acknowledgments:

Tables:

Table 1: Cattle Brain Samples USDA Collected and Tested for BSE in Its 
Surveillance Program, Fiscal Years 1994-2001:

Table 2: FDA Feed Ban Inspection and Compliance Information:

Table 3: BSE Level of Risk Assessed for 49 Countries by European 
Commission Experts:

Figures:

Figure 1: Countries with Confirmed Cases of BSE, as of December 13, 
2001:

Figure 2: Examples of Products Derived from Cattle:

Figure 3: Agencies' Implementation of Restrictions to Prevent the 
Importation of Animals and Products at Risk for BSE:

Figure 4: Countries Restricted from Exporting Animals and Products at 
Risk for BSE to the United States:

Figure 5: Imports of Inedible Meat By-Products, Which Include Meat and 
Bone Meal and Other Animal-Derived Meals, Flours, and Residues, from 
Countries with BSE, 1980-2000:

Figure 6: Imports of Beef and Edible Cattle Organs from Countries with 
BSE, 1980-2000:

Figure 7: Imports of Prepared Beef Products from Countries with BSE, 
1980-2000:

Figure 8: Economic Sectors That Would Be Affected if BSE Were Found in 
the United States:

Abbreviations:

BSE: bovine spongiform encephalopathy:

FDA: Food and Drug Administration:

FMD: foot and mouth disease:

GAO: General Accounting Office:

HHS: Department of Health and Human Services:

OIE: Office International Des Epizooties:

TSE: transmissible spongiform encephalopathy:

USDA: United States Department of Agriculture:

vCJ: Dvariant Creutzfeldt-Jacob disease:

United States General Accounting Office:

Washington, DC 20548:

January 25, 2002:

The Honorable Tom Harkin: 
Chairman: 
The Honorable Richard G. Lugar:  
Ranking Minority Member: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate:

The Honorable Richard J. Durbin: 
United States Senate:

Bovine spongiform encephalopathy (BSE), commonly known as mad cow 
disease, is an always fatal, neuro-degenerative disease that has been 
found in cattle in 23 countries around the world. Cattle contract the 
disease through animal feed that contains protein derived from the 
remains of diseased animals. Scientists generally believe an equally 
fatal disease in humans--known as variant Creutzfeldt-Jacob Disease 
(vCJD)--is linked to eating beef from cattle infected with BSE. Just 
over 100 people have died from vCJD, which many scientists believe is 
difficult to contract. 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. Countries with BSE have experienced large 
economic losses in both their beef exports and domestic beef sales. In 
Europe, more than 5 million head of cattle have been destroyed to 
thwart the spread of BSE since 1986, when it was first identified in 
the United Kingdom.

The U.S. Department of Agriculture (USDA) and the Food and Drug 
Administration (FDA) have primary responsibility for preventing the 
introduction of BSE-contaminated cattle, beef, and cattle-derived 
products (such as some dietary supplements) into the United States and 
the spread of the disease if it were to appear. In 1989, USDA began to 
identify countries from which cattle and cattle-derived products cannot 
be imported because of BSE concerns; since 1992, FDA has identified the 
foods, medical products, and other FDA-regulated products derived from 
cattle for which imports from those countries pose a potential risk. 
USDA and FDA screen imported shipments of such products. In 1997, to 
prevent the spread of BSE should it appear in a U.S. herd, FDA 
implemented a ban on animal feed. It prohibited the use of proteins 
from most mammals in feed for cattle and other ruminants.[Footnote 1] 
The prohibited proteins may still be used in other animal feed, 
including pet food and feed for swine and horses. In addition, USDA 
inspects domestically prepared meat, and FDA oversees the manufacture 
of medical and other products to help ensure they do not contain 
potentially infective brain and spinal cord (central nervous system) 
tissue. To detect BSE in the estimated 97 million dairy and beef cattle 
in the United States, USDA implemented a surveillance program to 
conduct post mortem tests for BSE on the brains of certain adult 
cattle.

No cases of BSE-infected animals have been detected in the United 
States, but the continuing discovery of new cases in other countries, 
as well as a limited understanding of the disease and its prevention, 
have heightened concerns about the adequacy of federal efforts to keep 
BSE out of the United States. In light of these concerns, you asked us 
to (1) assess the effectiveness of federal actions to prevent BSE and 
ensure compliance with the animal feed ban; (2) assess the potential 
economic impacts and health risks if BSE were to be found in U.S. 
cattle; and (3) compare U.S. actions with actions taken in other 
countries to prevent the emergence or spread of BSE. As you also 
requested, we considered, to the extent feasible, a study by the 
Harvard Center for Risk Analysis and sponsored by USDA to examine the 
potential for BSE in the United States.[Footnote 2] That study, issued 
in November 2001, concluded that BSE is extremely unlikely to become 
established in the United States and that, if introduced here, it would 
be eliminated within 20 years.[Footnote 3] The authors acknowledged 
that those conclusions, which were based on a probabilistic simulation 
model developed for the study, could be influenced by a number of model 
assumptions that could not be verified with confidence--including 
assumptions about U.S. measures to prevent the introduction and spread 
of BSE. The study also states that the most influential sources of 
uncertainty regarding the spread of BSE "are related to compliance with 
the feed ban." USDA plans to have the study peer-reviewed by a team of 
outside experts to validate its scientific integrity. We did not 
attempt to validate the model nor the assumptions Harvard made in 
applying the model to the United States. Also, we did not conduct an 
independent risk analysis of the potential for BSE to occur in the 
United States.

Results in Brief:

While BSE has not been found in the United States, federal actions do 
not sufficiently ensure that all BSE-infected animals or products are 
kept out or that if BSE were found, it would be detected promptly and 
not spread to other cattle through animal feed or enter the human food 
supply. With regard to imports, the United States had imported about 
125 million pounds of beef (0.35 percent of total imported) and about 
1,000 cattle (0.003 percent of total imported) from countries that 
later discovered BSE--during the period when BSE would have been 
incubating. In addition, weaknesses in USDA's and FDA's import 
controls, such as inspection capacity that has not kept pace with the 
growth in imports, may allow BSE-infected products to enter the 
country. With regard to animal testing to detect BSE, although USDA has 
steadily increased the number of animals it tests, it does not include 
many animals that die on farms. Experts consider these animals a high-
risk population. Concerning the feed ban, FDA has not acted promptly to 
compel firms to keep prohibited proteins out of cattle feed and to 
label animal feed that cannot be fed to cattle. We identified some 
noncompliant firms that had not been reinspected for 2 or more years 
and instances when no enforcement action had occurred even though the 
firms had been found noncompliant on multiple inspections. Moreover, 
FDA's data on inspections are severely flawed and, as a result, FDA 
does not know the full extent of industry compliance. FDA acknowledges 
that it has not yet identified and inspected all firms subject to the 
ban. In terms of the public health risk, consumers do not always know 
when foods and other products they use may contain central nervous 
system tissue, which, according to scientific experts, could pose a 
health risk if taken from diseased animals.

The economic impacts of a BSE outbreak in the United States could be 
severe, according to federal economists. However, scientific experts 
believe the health risks are uncertain. In terms of the economic 
impacts, if BSE were discovered in U.S. cattle, beef exports and 
domestic beef consumption would drop. The severity and duration of the 
economic impact would depend largely on the number of animals affected, 
the U.S. response, and the public's reaction. We could not extrapolate 
the potential impact on the U.S. economy by looking at the experiences 
of countries with BSE because perceptions about food safety risks vary 
from country to country, and the economic impacts of BSE on one country 
might not be applicable to another. Nonetheless, if BSE were found 
here, the economic impact on the $56 billion beef industry could be 
devastating. Many consumers might refuse to buy domestic beef; beef 
exports could decline dramatically and sales in related industries--
such as hamburger chains and soup and frozen dinner manufacturers--
could be similarly affected. Concerning the health risks, if BSE-
infected cattle were to enter the food supply, some people might 
develop vCJD. However, experts disagree about the number of people who 
would be affected. While many believe that vCJD is very difficult to 
contract, so that relatively few people would develop it, some experts 
believe that, because of the long incubation period, no one can predict 
whether few or many might contract vCJD.

The United States acted as many as 5 years earlier than other countries 
to impose controls over imports of animals and animal feed ingredients 
from countries that had experienced BSE. Similarly, U.S. surveillance 
efforts to test cattle brains for BSE met internationally recommended 
testing targets earlier than other countries. However, the United 
States has a more permissive feed ban than other countries--one that 
allows cattle feed to contain proteins from horses and pigs. FDA is 
reviewing whether these ingredients should continue to be allowed in 
cattle feed. Finally, as in most countries that are BSE-free, including 
the United States, cattle brains and other central nervous system 
tissue can be sold as human food.

This report makes recommendations to USDA and FDA to, among other 
things, strengthen enforcement of the feed ban, develop a coordinated 
strategy to identify resources needed to increase inspections of 
imported goods, and alert consumers when products may contain central 
nervous system tissue. In commenting on a draft of this report, FDA and 
Customs concurred with our recommendations. USDA largely concurred but 
said that labeling and warning statements should be reserved for known 
hazards.

Background:

BSE and vCJD are among a group of diseases known as transmissible 
spongiform encephalopathies (TSE). Currently, there are no therapies or 
vaccines 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 protein, 
called a prion,[Footnote 4] which causes normal molecules of the same 
protein in the brain to become malformed.[Footnote 5] Prions cannot be 
killed by conventional heat, irradiation, or chemical disinfection and 
sterilization procedures. The precise amount of material needed to 
cause disease is unknown but is generally thought to be very 
small.[Footnote 6] TSE prions accumulate in central nervous system 
tissue--specifically the brain, spinal cord, and eye--but are also 
present in other body tissues of infected humans and animals. Other 
TSEs include Creutzfeldt-Jacob disease (in humans), scrapie (in sheep), 
transmissible mink encephalopathy, and chronic wasting disease (in elk 
and deer).

The original source of BSE is not known with certainty. However, 
evidence suggests 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 1988, the United Kingdom banned 
the practice of feeding ruminant-derived protein to ruminants. 
Following this ban, the number of new cases of BSE-infected cattle 
declined from a high in 1992 of 32,280 new cases to a total of 1,312 
cases in 2000, and to 526 cases as of September 30, 2001. About 2,500 
cases of BSE have appeared elsewhere in 18 other European countries, as 
well as Oman, Canada, the Falkland Islands, and Japan, as a result of 
the exportation of contaminated feed and cattle (see fig. 1). The one 
BSE-infected cow found in Canada had been imported and was destroyed 
without entering the animal or human food chains. The BSE-infected 
cattle found in Oman (two animals) and the Falkland Islands (one 
animal) had also been imported.

Figure 1: Countries with Confirmed Cases of BSE, as of December 13, 
2001:

[See PDF for image]

[A] BSE found only in imported cattle.

Source: Office International Des Epizooties (world organization for 
animal health).

[End of figure]

In 1996, experts in the United Kingdom reported the first cases of 
vCJD. They believed the victims contracted it by eating beef 
contaminated by central nervous system tissue from BSE-infected cattle. 
Although contamination of meat with central nervous system tissue could 
occur in many ways during the slaughtering and processing of cattle, 
the major suspect in these cases was meat removed by a system that 
mechanically recovered (by squeezing under pressure) the remaining meat 
left on carcasses after all accessible meat has been removed by knife. 
Prior to December 1995, when the United Kingdom banned the practice, 
mechanically recovered meat, which was included in many cooked meat 
products such as sausages, could legally have contained spinal cords. 
While scientists believe that at least several hundred thousand people 
may have eaten BSE-infective tissue, many believe vCJD is difficult to 
contract.[Footnote 7] As of November 2001, 112 people have had vCJD, of 
whom just over 100 had died, nearly all in the United Kingdom.[Footnote 
8] 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.

As figure 2 shows, cattle provide meat and a wide array of consumer 
products. Many of these products may pose at least a theoretical risk 
for BSE infection. For example, dietary supplements, vaccines, 
cosmetics, and surgical replacement tissue, as well as gelatin, are 
produced from bovine carcasses, central nervous system tissue, and 
blood. The rendering industry in the United States and elsewhere 
recycles animals and animal tissues considered unfit for human 
consumption into, among other things, animal feed; diseased animals are 
routinely part of such recycling. The United States trades extensively 
in animals and the full range of animal products.

No test for BSE or TSE infectivity has been proven adequate for 
diagnosis in humans or animals before symptoms appear or for screening 
blood and other products. Tests to detect proteins from cattle in 
animal feed do not distinguish between milk and blood proteins that are 
allowed and meat and bone proteins that are not. Furthermore, methods 
to test animal feeds are based on the analysis of genetic material, 
bone, and protein, all of which are degraded or destroyed in the 
rendering process. The lack of unique genetic material associated with 
BSE prions has led scientists to look for other biological markers for 
the disease, such as accumulations of abnormal forms of the prion 
protein in various tissues. Development of valid, sensitive, rapid, and 
reliable tests for live animals is difficult because the specific agent 
has not been fully identified and elicits no detectable immune 
response. Furthermore, efforts are hampered by the limited scientific 
understanding of BSE and other TSEs, including when during the 
incubation period infectivity appears, what mechanism causes infection, 
and whether infectivity is ever present in blood.

Figure 2: Examples of Products Derived from Cattle:

[See PDF for image]

[End of figure]

Four federal agencies are primarily responsible for overseeing the many 
imported and domestic products that could pose a risk of BSE and for 
surveillance programs designed to detect and monitor animal and human 
diseases:

* The U.S. Customs Service screens all goods entering the country to 
enforce Customs laws and laws for 40 other agencies.

* USDA's Animal and Plant Health Inspection Service monitors the health 
of domestic animals and screens imported animals and other products to 
protect animal health.

* USDA's Food Safety Inspection Service monitors the safety of imported 
and domestically produced meat, poultry, and some egg products.

* FDA, within the Department of Health and Human Services (HHS), 
monitors the safety of all other foreign and domestic food products 
(including dietary supplements and animal feed), as well as vaccines 
for humans, drugs, cosmetics, medical devices, and the human blood 
supply.

In addition, two other HHS agencies--the Centers for Disease Control 
and Prevention and the National Institutes of Health--monitor human 
health to detect vCJD should it appear and conduct research to better 
understand TSEs and the prions thought to cause them.

In August 1997, FDA banned potentially BSE-infective animal proteins in 
feed for cattle and other ruminants. Proteins are added to feed to 
promote animal growth and can be derived from a number of sources, 
including animal meat and bone meal, fishmeal, and plant products. The 
feed ban prohibits the use of most animal-derived proteins in cattle 
feed.[Footnote 9] It also requires that, among other things, feed and 
feed ingredients that contain the prohibited proteins be labeled "Do 
not feed to cattle or other ruminants;" firms that handle both 
prohibited and nonprohibited feed and feed ingredients have procedures 
to ensure that the two are not commingled; and firms maintain records 
sufficient to track feed materials through their receipt and 
disposition for certain periods. The ban excludes animal blood and 
blood products, gelatin, plate waste,[Footnote 10] milk and milk 
protein, and protein derived from pigs and horses (and other equines). 
Renderers, feed manufacturers and blenders, and feed distributors are 
subject to the ban.

Recent research on the ability of animals to be "silent" carriers of 
TSEs from another species raises questions about the advisability of 
including in feed for cattle, or other ruminants, proteins from animals 
such as pigs and horses that are currently not thought to be 
susceptible to BSE and other TSEs, according to researchers at the 
National Institutes of Health. Specifically, in November 2001 these 
researchers reported that even though mice experimentally infected with 
hamster scrapie did not develop clinical disease, infectivity persisted 
in the brains and spleens of the mice throughout their life 
spans.[Footnote 11] Although available laboratory methods were not 
sufficiently sensitive to detect the infectivity in these mice, the 
researchers could infect other mice and hamsters with tissue from the 
original asymptomatic mice.

The European Commission--the executive and legislative body of the 
European Union[Footnote 12]--has had its Scientific Steering 
Committee[Footnote 13]conduct assessments of the geographical risk of 
BSE for countries that requested an assessment. Between July 2000 and 
November 2001 these scientific experts issued assessments for 49 
countries, including the United States, which the experts stated was 
unlikely to have BSE, but they also stated that the possibility could 
not be excluded.

BSE differs greatly from foot and mouth disease (FMD). FMD is a highly 
contagious viral disease that primarily affects cloven-hoofed animals, 
including cattle, sheep, swine, and goats, and last appeared in the 
United States in 1929. In contrast to BSE, FMD does not threaten 
humans, rarely causes death in afflicted animals, and has an incubation 
period of 24 hours to 21 days. In addition, the virus that causes FMD 
can be killed using standard sterilization procedures. This report 
deals only with BSE. We also have a study underway, to be issued later 
in 2002, of federal measures to control the threat FMD may pose to U.S. 
livestock.

Weaknesses Exist in Federal BSE Prevention and Detection Efforts:

The continuing absence of BSE in the United States today cannot be 
sufficiently ensured by current federal prevention efforts. The 
introduction and spread of BSE in the United States could stem from 
cattle and cattle-derived products imported from countries that 
subsequently developed BSE and from gaps in import controls, animal 
testing, and feed ban enforcement. As a result of these problems, 
consumers may unknowingly eat foods that contain central nervous system 
tissue from a diseased animal.

BSE-Risk Products May Have Entered the Country before BSE Emerged in 
the Exporting Countries or through Gaps in Import Controls:

Since 1989 and as recently as 2001, USDA and FDA have identified 
countries with BSE or at risk for BSE and issued import restrictions on 
cattle and other ruminants, and on products containing cattle-and 
ruminant-derived material from those countries. Figure 3 presents a 
timeline of the actions taken by USDA and FDA during that period.

Figure 3: Agencies' Implementation of Restrictions to Prevent the 
Importation of Animals and Products at Risk for BSE:

[See PDF for image]

Source: GAO analysis of USDA and FDA import restrictions.

[End of figure]

Figure 4 shows the countries on which the United States currently 
imposes trade restrictions for BSE-risk items.

Figure 4: Countries Restricted from Exporting Animals and Products at 
Risk for BSE to the United States:

[See PDF for image]

Source: USDA regulations.

[End of figure]

Although federal agencies have acted to reduce the possible ways that 
BSE-infected animals or products could enter the country, the United 
States has imported about 1,000 cattle; about 23 million pounds of 
inedible meat by-products, including meat and bone meal; about 101 
million pounds of beef; and about 24 million pounds of prepared beef 
products during the past 20 years from countries where BSE was later 
found. These numbers represent a fraction of total imports in each 
category--0.003 percent of cattle, 0.665 percent of meat by-products, 
0.314 percent of beef, and 0.728 percent of prepared beef products. In 
light of the long incubation period for BSE (up to 8 years), the 
possibility that some contaminated animals or products have entered the 
United States cannot be ruled out.

The United States imported 334 breeding and dairy cattle from the 
United Kingdom between 1980 and 1989.[Footnote 14] According to USDA, 
173 of these animals could have been used in animal feed or entered the 
human food supply. In addition, the United States imported 443 breeding 
and dairy cattle from continental Europe between 1983 and 1997, some of 
which may also have been used in animal feed or in the human food 
supply. Since 1996, USDA has placed under quarantine any of these 
imported cattle it has found still alive. These animals are monitored 
and, when they die, USDA obtains brain samples to test for BSE. Thus 
far, all tests on these animals have been negative. As of November 16, 
2001, three head of cattle from the United Kingdom and five from 
continental Europe were still alive and being monitored.

The United States also imported 242 cattle from Japan between 1993 and 
1999. Japan reported its first case of BSE in September 2001. As of 
November 28, 2001, USDA had located 214 of these cattle. According to 
USDA, 24 of these cattle had gone to slaughter or to 
rendering,[Footnote 15] 40 had been exported, and 150 were still alive. 
USDA has begun monitoring those animals and is attempting to locate the 
remaining 28 cattle.

In its evaluation of the potential for BSE in the United States, the 
Harvard study considered the ban on imports of cattle from the United 
Kingdom as one of the United States' key prevention measures. The study 
assumed that remains from some of the cattle imported from the United 
Kingdom could have been used in animal feed, food for human 
consumption, or both. Although more than 95 percent of the study's 
simulations, based on exposure to a low infective dose, resulted in no 
BSE cases in cattle, a few resulted in substantial numbers of cases. 
The study also assumed that cattle imported from continental Europe 
after 1996 had been traced and their movements controlled; it states 
that these cattle present virtually no risk for introducing BSE to the 
United States. However, the Harvard study did not take into account the 
242 cattle imported from Japan between 1993 and 1999. The discovery of 
BSE in Japan occurred just before Harvard issued the results of its 
study.

The United States also imported about 23 million pounds of inedible 
meat by-products--which would include meat and bone meal and other 
animal-derived meals, flours, and residues--between 1980 and 2000 from 
countries later found to have BSE (see fig 5.). However, the amount of 
meat by-products derived from cattle is uncertain because the code 
Customs uses to classify such shipments includes by-products from 
cattle or other animals. Likewise, any meat and bone meal imported 
under that code could be from cattle or other animals. While experts, 
including the Harvard researchers, see the risk of exposure posed by 
these shipments as extremely low, if any cattle feed contained BSE-
infected meat and bone meal, it could create an opportunity to 
contaminate U.S. cattle.

Figure 5: Imports of Inedible Meat By-Products, Which Include Meat and 
Bone Meal and Other Animal-Derived Meals, Flours, and Residues, from 
Countries with BSE, 1980-2000:

[See PDF for image]

Source: GAO analysis of data from the International Trade Commission 
and the Departments of Commerce and Treasury.

[End of figure]

The beef and prepared beef products that the United States imported 
from countries that later found BSE, were for human consumption. 
According to scientific experts, meat products could represent a risk 
to people who ate them if the meat came from a BSE-infected animal (see 
figs. 6 and 7). Until February 2001, USDA regulations allowed the 
import of beef and beef products from countries with BSE or at risk of 
BSE if the facility that processed the meat did not receive, store, or 
process ruminant material from a country with BSE or at risk for BSE.

Figure 6: Imports of Beef and Edible Cattle Organs from Countries with 
BSE, 1980-2000:

[See PDF for image]

Note: These trade data include beef only for the years 1980-1988; the 
data may include meat and organs from other bovines, such as bison, 
oxen, and buffalo, for the years 1989-2000.

Source: GAO analysis of data from the International Trade Commission 
and the Departments of Commerce and Treasury.

[End of figure]

Figure 7: Imports of Prepared Beef Products from Countries with BSE, 
1980-2000:

[See PDF for image]

Note: Prepared products include, among other things, processed meat, 
such as sausage, and cured or pickled meat, such as corned beef. These 
trade data may include products from other bovines, such as bison, 
oxen, and buffalo.

Source: GAO analysis of data from the International Trade Commission 
and the Departments of Commerce and Treasury.

[End of figure]

In addition to the BSE risk posed by past imports, a small but steady 
stream of BSE-risk material may still be entering the United States 
through international bulk mail. USDA inspectors at a New Jersey 
international bulk mail facility have begun using new x-ray technology 
that clearly distinguishes organic from inorganic matter to screen 
packages for products that pose a risk of animal and plant diseases. At 
this facility, we saw USDA inspectors seize one package that contained 
beef soup mix from Germany, one of the countries from which the United 
States restricts trade in beef products. Inspectors also showed us a 
package from Ireland that was labeled "cutlery," but contained corned 
beef. From May through October 2001, USDA inspectors, using the new x-
ray technology, screened about 7 percent (about 116,000) of the over 
1.5 million packages that passed through the New Jersey facility. Of 
the screened packages, 570 contained one or more at-risk beef or beef-
derived products. However, USDA does not screen packages at the New 
Jersey facility during the 24 hours each week when inspectors are not 
on duty. According to the inspectors, the screening rate was low 
because only one or two inspectors are on duty at any time, and each 
has only seconds to visually inspect packages as they pass by on a 
conveyor belt. While all 14 international bulk mail facilities in the 
United States have some sort of x-ray technology that can distinguish 
organic from inorganic material, the new technology--used only at the 
New Jersey facility--provides greater accuracy and clearer imagery. The 
new technology is also compatible with the conveyor system and can be 
placed over the conveyor belt. USDA officials told us that the new x-
ray technology would facilitate the inspection of international bulk 
mail arriving in the United States.

At-risk items may also slip through federal inspections at ports of 
entry. Customs often finds discrepancies with the accuracy of importer-
provided information during its annual reviews of trade compliance and, 
as a result, BSE-risk products may not be flagged for further 
inspection. For example, Customs found a shipment of animal feed 
ingredients incorrectly classified as pet food by the importer. It also 
found a shipment of animal feed identified by the importer as 
originating in Canada that inspectors discovered originated in 
Switzerland. For fiscal year 1999, Customs reported that importer-
provided information on shipments of live bovine animals (e.g., cattle, 
bison, and buffalo) was inaccurate in over 24 percent of samples taken. 
Information on shipments of fresh or frozen beef was inaccurate in over 
21 percent of samples and on shipments of animal feed in over 24 
percent of samples.

Additionally, the ever-increasing volume of imported shipments strains 
inspection resources for both FDA and USDA. In October 2001, we 
reported that during fiscal year 2000, FDA inspected about 1 percent of 
the over 4 million imported food entries under its 
jurisdiction.[Footnote 16] Additionally, FDA inspected less than one 
percent of the more than 146,000 entries of imported animal drugs and 
feeds. FDA has acknowledged that the increased volume of imports has 
severely hampered its ability to inspect a sufficient portion of 
imports. Specifically, while imported shipments under FDA's 
jurisdiction have risen dramatically in recent years, the agency's 
inspection staff has remained almost static since 1992. Prompted by 
bioterrorism concerns, the Secretary of Health and Human Services 
requested $61 million in October 2001 to hire 410 additional inspectors 
and other personnel to allow increased inspections of imported food 
products. In 1997 we reported that USDA's inspection workload had 
increased dramatically since 1990; we concluded that USDA had little 
assurance that it was deploying its limited inspection resources at the 
ports of entry that are most vulnerable to the introduction of pests 
and diseases.[Footnote 17] USDA has acknowledged the lack of inspection 
coverage and, in the wake of foot and mouth disease outbreaks in Europe 
and other countries, authorized $32 million in fiscal year 2001 to hire 
350 new inspection personnel and additional canine inspection teams at 
U.S. borders and ports of entry.

USDA Tests Many Cattle Brains for BSE in Its Surveillance Program but 
Does Not Test Many from Cattle That Die on Farms:

USDA began testing animal brains to detect BSE in domestic cattle in 
1990. This surveillance program consists primarily of collecting and 
analyzing brain samples from adult cattle with neurological symptoms 
and adult animals that were nonambulatory at slaughter.[Footnote 18] 
Testing animal brains is a key measure to detect BSE, and USDA's 
surveillance program should build on current efforts to increase the 
number of brain samples tested each year, according to officials from 
organizations representing the beef and grain industries, state 
officials, and consumers, as well as federal officials. As table 1 
shows, the number of samples collected and tested by USDA in its 
surveillance program has generally increased each year.[Footnote 19] 
The table also shows that a substantial portion of those samples have 
been taken from nonambulatory cattle since 1994, when USDA first began 
to collect this information. USDA has increased the portion of 
nonambulatory cattle because research has shown that this population 
includes animals that might have subtle neurological symptoms or 
injuries resulting from neurological impairment. In fiscal year 2001 
these animals accounted for more than 90 percent of the 4,870 brains 
collected and tested by USDA. The remainder includes brain samples from 
animals rejected at slaughter for signs of neurological disease.

Table 1: Cattle Brain Samples USDA Collected and Tested for BSE in Its 
Surveillance Program, Fiscal Years 1994-2001:

Brain samples tested: Number from nonambulatory cattle[A]; Fiscal year: 
1994: 199; Fiscal year: 1995: 223; Fiscal year: 1996: 266; Fiscal year: 
1997: 219; Fiscal year: 1998: 344; Fiscal year: 1999: 651; Fiscal year: 
2000: 1,895; Fiscal year: 2001: 4,464.

Brain samples tested: Number from ambulatory cattle; Fiscal year: 1994: 
296; Fiscal year: 1995: 242; Fiscal year: 1996: 318; Fiscal year: 1997: 
636; Fiscal year: 1998: 387; Fiscal year: 1999: 342; Fiscal year: 2000: 
414; Fiscal year: 2001: 406.

Brain samples tested: Total brain samples collected and tested; Fiscal 
year: 1994: 495; Fiscal year: 1995: 465; Fiscal year: 1996: 584; Fiscal 
year: 1997: 855; Fiscal year: 1998: 731; Fiscal year: 1999: 993; Fiscal 
year: 2000: 2,309; Fiscal year: 2001: 4,870.

[A] According to USDA, it did not track brain samples from cattle that 
had died on farms; the few that were taken would have been counted in 
with the nonambulatory cattle.

Source: GAO presentation of USDA data.

[End of table]

In addition to increasing the sample size and the number of 
nonambulatory cattle tested, USDA has broadened its testing efforts. 
USDA tests samples using two complementary laboratory methods and 
conducts surveillance for two TSEs--scrapie in sheep and chronic 
wasting disease in deer and elk--that already exist in the United 
States. USDA officials and many scientific experts believe surveillance 
and eradication of scrapie and chronic wasting disease is important, in 
part, because of the suspected link between scrapie in the United 
Kingdom and the appearance of BSE, and because both have been 
experimentally transferred to other species.

Although USDA has strengthened its surveillance efforts, the program 
does not include many samples from cattle that die on farms. Scientific 
experts consider these animals a high-risk population because they are 
generally older and the reasons for their death are often 
unknown.[Footnote 20] USDA told us that efforts to obtain samples more 
systematically from such animals are limited largely by the dispersed 
nature of the domestic livestock industry, the lack of adequate 
laboratory capacity to conduct the tests, and the lack of sufficient 
staff and time to collect the samples. When animals die on farms they 
may be buried on the farm, taken to landfills, or collected by 
renderers who recycle animals and other animal tissues into, among 
other things, animal feed. In 1998 USDA implemented a cooperative 
program with the rendering industry to ensure that carcasses of animals 
condemned at slaughter for signs of neurological disease are held until 
test results are completed. Under this program, USDA may share the 
expenses to store or dispose of carcasses during the testing period. 
USDA was not able to provide us with information on how frequently the 
program has been used, but it has been used only sporadically, 
according to USDA officials and the USDA veterinarians and renderers we 
spoke with in nine states and Puerto Rico.

In its evaluation of the potential for BSE in the United States, the 
Harvard Center for Risk Analysis included animals that die on farms as 
a potential source of BSE exposure. According to their simulation 
model, excluding from the rendering process those animals that die on 
farms significantly reduces the potential for cattle to be exposed to 
BSE through animal feed. Harvard's report also notes that farmers may 
not be willing to send animals displaying neurological symptoms to 
slaughter, thereby reducing the likelihood that infected animals would 
be inspected by USDA at slaughterhouses. Once dead, these animals might 
be rendered, as assumed in the simulation model, or disposed of on 
farms. According to USDA officials, when the Harvard study was issued 
to the public, the Secretary of Agriculture announced plans to more 
than double the number of BSE tests conducted in FY 2002 to more than 
12,000.

FDA's Enforcement of the Feed Ban Is Limited and Inspection Data Are 
Flawed:

Federal and state officials and the scientific community agree that if 
BSE were to be found in a U.S. herd, a well-enforced feed ban would 
prevent its spread to other herds. State inspectors (who conduct about 
80 percent of inspections) and FDA inspectors document their feed ban 
inspections on inspection forms. FDA headquarters compiles and 
maintains this information in a database, and it provided to us the 
information in that database through October 26, 2001. According to 
FDA's data, more than 12,000 inspections have been conducted since 1997 
at more than 10,000 firms,[Footnote 21] including renderers, feed 
manufacturers, feed haulers, and distributors, as well as at on-farm 
feed operations. According to FDA's October 2001 quarterly update that 
summarized results of feed ban inspections, 364 firms were out of 
compliance. In addition, FDA believes that not all firms that should be 
subject to the ban have been identified and inspected, at least 1,200 
or more based on industry estimates (see table 2). However, we could 
not verify these data because we found significant flaws in FDA's 
database, which we discuss later in this report.

Table 2: FDA Feed Ban Inspection and Compliance Information:

Type of firm: Renderers; FDA's estimate of the universe of this type of 
firm: 264; Number of firms inspected: 264; Number of firms out of 
compliance: 13.

Type of firm: FDA-licensed feed mills[A]; FDA's estimate of the 
universe of this type of firm: 1,240; Number of firms inspected: 1,240; 
Number of firms out of compliance: 42.

Type of firm: Other feed mills; FDA's estimate of the universe of this 
type of firm: 6,000-8,000; Number of firms inspected: 4,835; Number of 
firms out of compliance: 228.

Type of firm: Other firms[B]; FDA's estimate of the universe of this 
type of firm: At least 4,237 (universe unknown); Number of firms 
inspected: 4,237; Number of firms out of compliance: 81.

Type of firm: Total; FDA's estimate of the universe of this type of 
firm: At least 11,741; Number of firms inspected: 10,576; Number of 
firms out of compliance: 364.

Note: Because of the severe flaws in FDA's inspection database, we were 
unable to verify these data or use the database for analysis of 
oversight and enforcement.

[A] Feed mills that must be licensed by FDA because they handle 
restricted medicines.

[B] Other firms include feed blenders, on-farm mills, and feed haulers.

Source: FDA's Center for Veterinary Medicine Update, Oct. 30, 2001.

[End of table]

FDA did not take prompt enforcement action to compel firms to comply 
with the feed ban. When we began this study, in April 2001, the only 
enforcement action FDA had taken was to issue two warning letters in 
1999.[Footnote 22] The first letter was issued in May 1999--21 months 
after inspections began.[Footnote 23] However, since inspections began 
in 1997, FDA has reported hundreds of firms out of compliance--most 
often for failure to meet requirements to label feed that contained 
prohibited proteins or for including prohibited proteins in cattle 
feed. In our analysis of individual inspection forms, we found several 
instances in which firms were out of compliance in repeated 
inspections, yet FDA had not issued a warning letter. We also found 
instances in which firms were out of compliance but had not been 
reinspected for a year or more--and in some cases for more than 2 
years.

Between February and November 2001, FDA issued warning letters to 
another 48 firms. In addition, 17 firms voluntarily recalled feed, 
including 9 that had been issued a warning letter. As of November 30, 
2001, FDA or states had reinspected 33 of the total of 50 firms that 
had been issued warning letters (2 in 1999 and 48 in 2001). Six of the 
firms were still out of compliance on reinspection. FDA has no 
enforcement strategy for feed ban compliance that includes a hierarchy 
of enforcement actions, criteria for actions to be taken, time frames 
for firms to correct violations, and time frames for follow-up 
inspections to confirm that violations have been corrected.

According to FDA, rather than taking enforcement actions, it has 
emphasized educating firms subject to the feed ban about the ban's 
requirements and working with those firms to establish cooperative 
relationships. FDA reported that some states might have taken 
enforcement actions, including requiring firms to recall noncompliant 
feed. However, FDA does not track enforcement actions taken by states; 
therefore, it does not know the extent of such actions.

Even if FDA were to actively enforce the feed ban, its inspection 
database is so severely flawed that--until corrected--it should not be 
used to assess compliance. Nonetheless, FDA uses the database to manage 
and oversee compliance, respond to congressional inquiries about 
compliance, and keep industry and the public informed.

From our review of FDA's database of 12,046 feed ban inspection records 
(as of October 26, 2001), we found records lacked unique identifiers, 
were incomplete, contained inconsistent or inaccurate information, and 
were not entered into the database in a timely manner. Examples of the 
severe flaws we found include:

* Entries for 5,446 inspections--or about 45 percent of all 
inspections--lack information to uniquely identify individual firms. As 
a result, the data cannot be used to reliably determine the number of 
firms inspected, compliance trends over time, or the inspection history 
of an individual firm. In at least one case, the same unique identifier 
had been applied to six different firms and, in another case, a firm 
had two unique identifiers. In addition, we found 232 cases in which 
one or more inspections of the same firm lacked the unique identifier.

* Entries for 301 inspections of firms that handle prohibited proteins 
contain no response to whether feed was properly labeled; entries for 
438 inspections of firms that handled both prohibited and non-
prohibited proteins had no response to whether prohibited proteins were 
included in feed intended for cattle.

* Entries where responses to questions about feed labeling or whether 
prohibited proteins were included in feed intended for cattle indicated 
that the firms were in compliance; however, inspectors' notes contained 
in other sections of the database contradicted the responses and 
indicated the firms were not in compliance.

* Inspections were not entered into the database. In assessing the 
warning letters, we discovered references to inspections that do not 
appear in the database. In fact, the inspection record for the firm 
that received the first warning letter--in May 1999--does not appear in 
the database.

* Inspections were not entered into the database in a timely fashion. 
We found several instances where inspections dating back to 1998 and 
1999 were not entered into the database until mid to late 2001--too 
late for FDA to reinspect in a timely fashion if violations existed. 
Also, too much time had passed for FDA to reliably clarify inconsistent 
or conflicting information or obtain answers to questions left blank on 
the inspection forms. Moreover, any compliance information FDA reported 
to congressional overseers and others would not have been reliable.

* Several states did not use FDA's inspection form, but instead used 
their own state-developed forms. Because the questions were different, 
certain assumptions had to be made when these data were entered into 
FDA's database. The HHS Office of Inspector General noted, in a June 
2000 report, that many FDA agreements with states, whose inspectors 
conducted about 80 percent of feed ban inspections, do not ensure that 
states routinely provide FDA with standardized information on the 
inspections they conduct.[Footnote 24] In September 2001 FDA revised 
the inspection form and asked states to use the revised form. States 
are free to ask other questions during the inspections, but FDA has 
also asked them to include FDA's questions in FDA's format.

* The database is incomplete. It does not include all firms subject to 
the feed ban. FDA officials relied on the personal knowledge of state 
and FDA field staff and on membership lists from industry groups to 
identify and locate firms. However, our review of membership records 
for the National Renderers Association--for the years 1998 to 2001--
disclosed 21 rendering firms that were not in FDA's database. According 
to association records, those firms process meat and bone meal and 
other products that could contain proteins subject to the feed ban.

FDA did not count data entries with blanks--no responses--in the 
selected data fields it uses when it reports on compliance. Therefore, 
when FDA provided compliance information to the Congress--and when it 
publishes that information electronically--the data are misleading and 
the number of firms identified as out of compliance are undercounted. 
For example, for the 364 firms identified as out of compliance in FDA's 
October 2001 update--the source for information in table 1 above--FDA 
assumed that all entries with blanks in the compliance fields were in 
compliance. However, we found entries where firms had blanks in the 
data fields FDA used, yet contained inspector comments in other fields 
showing that the firms were not in compliance. FDA also did not include 
these firms on published lists of noncompliant firms. About half of the 
inspection records contain inspector comments. On those entries where 
blanks also existed, the inspector comments showed that firms were in 
compliance in some instances and out of compliance in others.

An FDA official told us that the database was not originally intended 
to track compliance of individual firms, but rather to guide the 
agency's efforts to educate firms subject to the ban by illustrating 
particular states or practices that needed more intensive focus. 
However, FDA has no information system other than the inspection 
database to track compliance with the feed ban.

FDA has not placed a priority on oversight of the feed ban. From the 
implementation of the feed ban in August 1997 until early 2001, one 
person in FDA's Center for Veterinary Medicine was responsible for feed 
ban management. Although state and FDA District Office inspectors 
conducted the inspections, this individual designed the inspection 
form, compiled inspection data, and made enforcement decisions--in 
addition to that individual's other duties. Furthermore, the inspection 
form had not been pretested--a standard practice to ensure that 
questions are interpreted and answered consistently.

In the course of our review, FDA attempted to clean up the database so 
that it could serve as an accurate management tool. However, in October 
2001, FDA turned that effort over to a contractor to (1) review the 
completeness of the feed ban inspection database to ensure that 
findings have been captured, including written comments by the 
inspectors on inspection forms; (2) analyze the data and present the 
findings in a report; and (3) review the current enforcement strategy 
to determine program strengths and weaknesses and to make 
recommendations for improvements that will better support FDA's 
compliance goals. FDA expects this work to be completed by February 
2002. Also in October 2001, FDA entered into a separate contract to 
reconfigure the data so that they can be incorporated into FDA's 
primary database for all other inspection activities. Work on the two 
contracts is to be carried out concurrently. This work is to be 
completed in the spring of 2002.

In evaluating the potential for BSE in the United States, the Harvard 
study noted that the feed ban is key to preventing the spread of BSE. 
It added, however, that the effectiveness of the feed ban is somewhat 
uncertain because compliance rates are not "precisely" known. Harvard's 
simulation model assumed the feed ban was compromised to some extent by 
on-farm feeding of prohibited proteins to cattle and by some 
noncompliance with the requirement that feed containing prohibited 
protein carry a warning label. The study's observations underscore the 
importance of the problems we found in FDA's oversight and enforcement 
of the feed ban.

Consumers Cannot Tell Which Beef Products May Contain Central Nervous 
System Tissue:

Some consumers in the United States regularly eat cattle brains and 
central nervous system tissue. Brains are a routine part of the diet in 
several cultures. Eating such foods would not pose a safety concern 
unless they were from a BSE-infected animal. However, most consumers 
would not realize that central nervous system tissue could be found on 
many beef cuts and in several beef products.[Footnote 25] For example, 
bone-in meat cuts, such as T-bone steaks, are stripped directly from 
the animal's vertebrae and may contain portions of the spinal cord. 
Many other edible products, such as beef stock, beef extract, and beef 
flavoring, are frequently made by further processing (e.g., boiling) 
the skeletal remains (including the vertebral column) of the carcass 
after most of the meat has been removed. USDA officials told us that 
they would expect to find central nervous system tissue in these foods.

However, based on food quality--not food safety--concerns, USDA does 
prohibit central nervous system tissue in beef products that are 
labeled as meat and that are made using technology that mechanically 
removes meat from the bones of slaughtered animals in a way that 
approximates deboning by hand. Products made from meat using this 
technology include sausages and hot dogs. USDA has found central 
nervous system tissue in meat that was mechanically removed using a 
technology known as advanced meat recovery systems. USDA estimates that 
28 beef processing plants use this technology and, in 2000, recovered 
257 million pounds of beef. According to a beef industry official, this 
technology recovers up to 10 additional pounds of meat per carcass.

Because it is not a food safety issue, USDA has not rigorously enforced 
its prohibition against the presence of central nervous system tissue 
in meat extracted by using the advanced meat recovery system 
technology. Since 1997, USDA has tested a total of 63 beef samples from 
18 of the plants that use this technology. Of those samples, 12 tested 
positive for central nervous system tissue. USDA has not tested beef 
samples from the other plants that use the technology in at least 4 
years. When its tests found central nervous system tissue in samples, 
USDA did not track to ensure that the processing plants relabeled the 
contaminated meat products as something other than meat.

USDA plans to use the Harvard study to help it determine whether the 
presence of central nervous system tissue should be a food safety 
matter--whether all or some central nervous system tissue should be 
considered unsafe for human consumption. The Harvard study notes that a 
ban on the use of spinal cords, brains, and vertebral columns in human 
food or animal feed significantly reduced the risk of exposure in its 
simulation model. As part of its evaluation of the implications of the 
study, USDA will issue a Federal Register Notice after January 2002 to 
solicit comments on, among other things, the safety of the advanced 
meat recovery technology and any meat that comes from the vertebral 
column.

In addition, FDA's TSE Advisory Committee--composed of USDA, National 
Institutes of Health, Centers for Disease Control and Prevention, and 
other federal experts, as well as academic scientists and medical 
experts, and consumers--recommended, in October 2001, that FDA consider 
taking regulatory action to ban brains and other central nervous system 
tissue from human food because of the potential risk of exposure to 
BSE-infected tissue. According to FDA, it is considering banning 
central nervous system tissue from the foods it regulates as well as 
from cosmetics and over-the-counter drugs. FDA told us it is taking 
this action to ensure that consumers are protected from consuming BSE-
contaminated products. Representatives of two consumer groups we 
interviewed expressed concern that central nervous system tissue 
remains a part of food generally and that the use of advanced meat 
recovery technology could expose consumers unknowingly to such tissues.

The Economic Impacts of a U.S. Outbreak Could Be Severe, and the Health 
Risks Are Uncertain:

If BSE were discovered in U.S. cattle, beef exports and domestic beef 
consumption would drop, damaging many sectors of the economy, according 
to federal economists. If the infected cattle were to enter the food 
supply, some people might develop vCJD.

The economic impacts of a BSE outbreak in the United States would 
include the direct impacts on certain sectors, such as the beef and 
livestock industries, and indirect impacts on related industries, such 
as the animal feed and restaurant industries. In addition, an 
assessment of economic impacts would include costs relating to the 
public sector, such as farmer compensation payments, increased spending 
on research and development, and increased costs to government 
agencies.[Footnote 26] While the extent to which economic impacts would 
pass from one sector to another is unclear, these effects would 
eventually channel through to several sectors of the economy. Figure 8 
lists the sectors and some of the likely qualitative impacts within 
each sector in the event of a BSE outbreak in the United States.

Figure 8: Economic Sectors That Would Be Affected if BSE Were Found in 
the United States:

[See PDF for image]

[A] Beef packers slaughter cattle and other animals and package 
carcasses and large cuts for further processing.

[B] Beef processors cut, slice, grind and package beef for consumers 
and for other end users, such as grocery stores, restaurants, and 
institutions.

Source: GAO analysis.

[End of figure]

To date, however, there are no comprehensive economic studies of the 
total direct and indirect economic impacts of a potential BSE crisis in 
the United States. A complete assessment of these impacts is difficult 
to forecast given the uncertainties surrounding key assumptions, such 
as the source of the BSE, the number and timing of cases, and the 
public's reaction. For instance, if BSE were to enter the country 
through the importation of meat and bone meal rather than live cattle 
imports, the economic consequences could be more pervasive, because the 
meat and bone meal could potentially contaminate many cattle. Another 
difficulty in estimating impacts is the problem of determining how the 
increased costs of BSE would be passed on from the farmer to the final 
consumer in the beef-marketing channel. Moreover, studies that estimate 
losses due to BSE from other countries may not be totally applicable to 
the United States.

Food safety experts have noted that perceptions about food safety risks 
vary from country to country, and the consumer impacts of BSE in one 
country may not be applicable to another country. If BSE were found 
here, the economic impact on the $56 billion beef industry and related 
industries could be devastating, according to USDA economists. For 
instance, consumers in the United States, in response to reports of 
BSE-infected cattle, may for a period of time restrict their purchases 
of beef and products containing beef. That response would be felt not 
only by the cattle and beef industries, but also by peripheral 
industries. For example, hamburger chains and soup and frozen dinner 
manufacturers could see dramatic declines in business.

Similarly, in international trade, a loss in beef exports may be more 
devastating for the United States than for other beef-producing 
countries. In particular, since the United States exports nearly 10 
percent (by volume) of its total beef production (about 25 percent of 
total world beef exports), the trade sector is also critical in 
estimating total economic impacts.

As a first approximation, however, FDA officials estimated the direct 
effects to the beef and livestock industries based on a 1998 study of 
the economic impacts of the first year of the BSE outbreak in the 
United Kingdom.[Footnote 27] They estimate that if the United States 
were to experience an outbreak as severe as the one in the United 
Kingdom, the beef industry could lose as much as $15 billion in sales 
revenue. Specifically, these costs were based on the assumption that in 
the event of a BSE crisis, U.S. domestic and export demand would 
decrease by the same amounts as in the United Kingdom--a 24 percent 
decline in domestic beef sales and an 80 percent decline in beef and 
live cattle exports. In addition, the FDA estimated the livestock 
sector would incur a minimum of $12 billion to slaughter and dispose of 
at-risk cattle. This estimate was based on an assumption that the 
United States would need to destroy about four times as many cattle as 
the United Kingdom. However, the FDA analysis did not include the 
offsetting effects of government payments, as occurred in the United 
Kingdom, shifts in consumer demand for other types of meat, or the 
effects on other related sectors of the economy. Overall, however, FDA 
noted that those firms primarily engaged in the production of beef 
products would incur severe economic disruption.

In terms of the health risks, if infected cattle were to enter the food 
supply, some people might develop vCJD; however, scientific experts 
disagree about how many people could develop the disease. Many experts 
believe that vCJD is difficult to contract and, therefore, that 
relatively few people would develop the disease. However, other 
scientific experts believe that, because of the long incubation period, 
no one can predict whether few or many might contract vCJD. According 
to some scientific experts in the United Kingdom, as many as 100,000 
people in Europe may develop vCJD as a result of the BSE outbreak 
there. This could include Americans who lived in countries where BSE 
occurred. In addition to these direct health implications, an outbreak 
of BSE in the United States would carry an emotional toll on consumers 
who believe federal regulators will protect them from this devastating 
disease. Moreover, according to a National Institutes of Health 
scientist, the appearance of vCJD could cast doubt on the safety of 
organ donations and the U.S. blood supply.[Footnote 28],[Footnote 29] 
Any health implications would translate into medical treatment and 
related financial and economic costs, such as lost productivity.

The United States Set Controls on Importing Animals and Met BSE Testing 
Goals Earlier Than Many Countries, but Its Feed Ban Is More Permissive:

The United States prohibited the import of cattle and other ruminants 3 
to 5 years earlier than many other countries. Its surveillance program 
to test cattle brains for BSE also met international targets for the 
number of animals tested earlier than many other countries. However, 
the United States has a more permissive feed ban than other countries-
-one that allows cattle feed to contain proteins from horses and pigs. 
FDA is reviewing whether these ingredients should continue to be 
allowed in cattle feed. Finally, as in most countries that are BSE-
free, including the United States, cattle brains and other central 
nervous system tissue can be sold as human food.

The European Commission's Scientific Steering Committee has had 
scientific experts assess countries, including the United States, for 
the risk that BSE could enter the country through imported animals and 
feed and be spread through recycled animal proteins in feed. As of 
November 30, 2001, risk assessments had been completed for 49 
countries. According to the scientific experts, most European countries 
are likely to have BSE, even if it has not yet been confirmed by 
surveillance testing, or to have BSE at a higher level of incidence 
than thought. The scientific experts assessed the United States as 
unlikely to get BSE, but indicated that the possibility could not be 
excluded. Table 3 presents the results of the 49 BSE risk assessments 
completed through November 30, 2001.

Table 3: BSE Level of Risk Assessed for 49 Countries by European 
Commission Experts:

BSE risk level: Highly unlikely - Level I; Number of countries (percent 
of total assessed): 16 (32.7); European Union countries: [Empty]; Other 
countries: Argentina, Australia, Botswana, Brazil, Chile, Costa Rica, 
El Salvador, Namibia, Nicaragua, Norway, New Zealand, Panama, Paraguay, 
Singapore, Swaziland, Uruguay.

BSE risk level: Unlikely but not excluded - Level II; Number of 
countries (percent of total assessed): 12 (24.5); European Union 
countries: Austria, Finland, Sweden; Other countries: Canada, Colombia, 
India, Kenya, Mauritius, Nigeria, Pakistan, Slovenia, United States.

BSE risk level: Likely but not confirmed or confirmed at a lower level 
- Level III; Number of countries (percent of total assessed): 19 
(38.8); European Union countries: Belgium, Denmark, Germany, France, 
Ireland, Italy, Luxembourg, Netherlands, Spain; Other countries: 
Albania, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Poland, 
Romania, Slovakia, Switzerland.

BSE risk level: Confirmed at a higher level - Level IV; Number of 
countries (percent of total assessed): 2 (4.1); European Union 
countries: United Kingdom, Portugal; Other countries: [Empty].

Notes: Countries with reported cases of BSE as of December 13, 2001, 
are in bold type. BSE was found in Austria, Czech Republic, Finland, 
Slovakia, and Slovenia after their BSE risk assessments had been 
completed. Greece, the only European Union country that did not provide 
the data for an assessment, reported its first case of BSE in 2001.

Source: GAO analysis of 49 BSE risk assessments.

[End of table]

Using information on each country's past and present potential exposure 
and ability to stop the spread of BSE, the scientific experts 
qualitatively assessed the probability that an animal in a country is 
infected with BSE. The assessments relied on data voluntarily supplied 
by the countries and on discussions with the officials familiar with 
BSE prevention efforts from each country on (1) the potential import of 
BSE via live cattle or contaminated feed, (2) the adequacy of 
surveillance testing to detect the presence of BSE, (3) cattle feeding 
and rendering practices, and (4) the use of potentially infective 
tissue from cattle. The scientific experts also focused on the import 
of infected animals and animal feed as the only initial sources of 
infection and on animal feed as the only source of spread. The experts 
did not evaluate the risks from consumer products that could contain 
BSE-infected tissue. The scientific experts reported using a 
conservative, reasonable worst-case approach, whenever data or 
information from countries were insufficient. Based on our analyses of 
the 49 risk assessments, the United States compared with the other 
countries as follows in terms of the potential to import BSE, 
surveillance testing, cattle feeding practices, and use of potentially 
infective tissue.

* Potential to import BSE. The United States acted earlier than many 
countries to ban the import of cattle and meat and bone meal for use in 
cattle feed from the United Kingdom and other countries where BSE had 
appeared. The United States was one of three countries that banned 
trade in cattle from the United Kingdom by 1989; six other countries 
did so by 1994. Nine other countries had formal bans in place by 1996, 
the year that the United Kingdom stopped all trade in cattle. Actions 
to halt trade in cattle with other countries where BSE had appeared has 
been variable, and the United States and some other countries phased in 
restrictions as cases appeared.[Footnote 30] Also, many of the assessed 
countries, particularly those in South America and in Africa, had 
little or no trade in cattle with the United Kingdom or other countries 
where BSE had appeared. With regard to the import of meat and bone meal 
for use in cattle feed, the United States banned imports from the 
United Kingdom in 1991 and phased in restrictions from other countries 
as cases of BSE appeared. While one country banned such imports from 
the United Kingdom as early as 1978, due to concerns about foot and 
mouth disease, a few countries imported significant amounts of meat and 
bone meal from the United Kingdom and other BSE countries as recently 
as 1999.

* Surveillance testing to detect BSE. The United States is one of three 
countries that reported meeting Office International Des Epizooties 
(OIE)-recommended cattle testing levels by 1994.[Footnote 31] Most 
countries either had not met OIE levels at the time of their 
assessments or met the levels after 1994. However, nine countries, 
including six with BSE,[Footnote 32] had started or planned to start 
targeting cattle that die on farms in their surveillance 
testing.[Footnote 33] In their assessments of the United States and the 
other countries, the scientific experts most often recommended that 
countries improve surveillance largely by including tests of high-risk 
populations, such as animals that die on farms.

* Cattle feeding practices (feed bans). Of the 49 countries assessed, 
41 had some sort of feed ban in place; however, those bans varied on 
the extent that they allowed protein from mammals in feed for cattle. 
Compared to other countries with a ban, the United States and 16 others 
allow at least some mammalian protein in feed for cattle. For example, 
the United States and Canada allowed cattle feed to contain protein 
from horses and pigs.[Footnote 34] The remaining 24 countries with a 
feed ban (including 13 that have BSE) prohibit all mammalian protein in 
cattle feed, although 9 allow such protein in feed for pigs and 
poultry. Four of the 24 countries have more stringent bans that 
prohibit mammalian protein in feed for all farm animals--a practice the 
European Commission asked its member countries to adopt on a temporary 
basis in 2000. In the assessments, scientific experts found that the 
potential for commingling prohibited protein with cattle feed existed 
in most countries. Enforcing existing feed bans was the second most 
common recommendation made by the scientific experts. In October 2001, 
FDA officials held a public hearing to elicit comments on, among other 
things, whether the existing feed ban exemptions should be modified. As 
of December 17, 2001, FDA had not announced whether it would propose 
any changes to the ban.

* Use of potentially infective tissue. Most of the countries assessed 
that had not found BSE-infected cattle, including the United States, 
generally allowed the sale of brains and other central nervous system 
tissue in human food. Nearly half of the countries with BSE prohibited 
this high-risk tissue in human food, and at least three countries--the 
United Kingdom, Ireland, and Switzerland--banned mechanically 
recovered beef, such as that used in meat pies, that may contain 
central nervous system tissue and had been linked to vCJD. However, the 
Court of Auditors--the investigative agency for the European 
Commission--found that efforts by European Union countries to remove 
potentially high risk tissue from the human food and animal feed chains 
have not been fully implemented and that the countries could not reach 
agreement on what constituted high-risk tissue.[Footnote 35]

Conclusions:

BSE and vCJD are devastating, incurable, inevitably fatal diseases. If 
they enter the country, they can bring dire economic consequences to 
the cattle and beef industries. Therefore, forceful federal prevention 
efforts are warranted to keep BSE away from U.S. shores. Nevertheless, 
Customs has reported significant error rates in importer-provided 
information for BSE-risk shipments, import controls over bulk mail are 
weak, and inspection capacity has not kept pace with the growth in 
imports. Because of these import weaknesses--and because BSE may have 
entered in imports from countries that have since developed the 
disease--BSE may be silently incubating somewhere in the United States. 
If that is the case, then FDA's failure to enforce the feed ban may 
already have placed U.S. herds and, in turn, the human food supply at 
risk. FDA has no clear enforcement strategy for dealing with firms that 
do not obey the feed ban, and it does not know what, if any, 
enforcement actions the states may be taking. Moreover, FDA has been 
using inaccurate, incomplete, and unreliable data to track and oversee 
feed ban compliance.

Furthermore, if there is even a slight chance that BSE is incubating in 
U.S. cattle, consumer groups believe that the American public has the 
right to know when food and other consumer products may contain central 
nervous system tissue that may pose a risk to the food supply. The 
importance of informing consumers is heightened by concerns raised in 
the Harvard study and by FDA's TSE Advisory Committee regarding the 
potential public health risk posed by consuming such tissue. In 
addition, although USDA has been proactive in increasing the number of 
cattle brains tested, it does not test many animals that die on farms, 
even though it recognizes that older animals and animals that die from 
unknown causes are at higher risk for BSE.

Recommendations for Executive Action:

To better ensure that the United States is protected from the emergence 
and spread of BSE, we make the following recommendations:

In order to strengthen inspections of imported products that could pose 
a risk of BSE, we recommend that the Secretaries of Health and Human 
Services and of Agriculture, in consultation with the Commissioner of 
Customs, develop a coordinated strategy, including identifying resource 
needs.

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

* Develop a strategy, working with 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 
fashion.

* 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.

* Track enforcement actions taken by states.

* 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.

In order to help consumers identify foods that may contain central 
nervous system tissue, we recommend that, as USDA evaluates whether 
such tissue from cattle poses a health risk, the Secretary of 
Agriculture:

* consider whether some interim action, such as public service 
announcements or caution labels or signs, might be appropriate to 
advise consumers that certain beef cuts and beef products may contain 
central nervous system tissue; and:

* better enforce the existing labeling requirement for products that 
contain beef extracted using advanced meat recovery technology and 
contain central nervous system tissue.

Additionally, to further help consumers identify foods and other 
products that may contain central nervous system tissue, we recommend 
that the Secretary of Health and Human Services 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.

In order to strengthen the BSE surveillance program, we further 
recommend that the Secretary of Agriculture increase the number of 
tests from cattle that die on farms in the BSE surveillance program.

Agency Comments and Our Evaluation:

We provided HHS, USDA, and Customs with a draft of this report for 
review and comment. HHS conveyed comments from FDA. FDA concurred with 
our recommendations and said the report highlighted some key areas 
where U.S. efforts to prevent BSE could be bolstered. FDA agreed that 
further improvements in compliance with the feed ban would reduce the 
risk of introducing and spreading BSE in the United States. However, 
FDA did not agree that it had misled Congress and the public in 
reporting on compliance. It is true, as FDA pointed out, that its June 
22, 2001, transmittal of compliance information to the Chairman of the 
House Committee on Energy and Commerce "made an effort to identify the 
fact that there were reporting problems, including incomplete data, 
i.e., blanks." However, we do not believe that caveat conveyed the 
extent to which the information could be inaccurate. In fact, 
noncompliance could be much higher than FDA reported, because FDA 
treated all firms with blanks on compliance questions as if they were 
in compliance, even though some of those records contained inspector 
comments stating that the firms were not in compliance. FDA's 
transmittal to the Chairman did not disclose this. Therefore, we 
believe our report is correct in characterizing FDA's data as 
misleading. FDA also disagreed with our conclusion that it had not 
placed a high priority on oversight of the feed ban. However, 
throughout our review, FDA repeatedly pointed out that one individual, 
along with that individual's other responsibilities, designed the feed 
ban program, the inspection form, and the database to monitor 
inspections and, until January 2001, made all decisions regarding 
enforcement actions. FDA's comments and our detailed responses are 
presented in appendix II.

USDA largely agreed with our recommendations and said that it will 
address them as it seeks public comment on any proposed regulatory 
changes. USDA stated that a portion of the funding it received to 
bolster USDA's homeland security efforts in the January 10, 2002, 
Defense Appropriations legislation will be used to increase BSE 
surveillance. It plans to more than double the number of animals 
sampled and to obtain more samples from animals that die on farms. USDA 
also acknowledged its support for providing consumers with information 
on product contents and for an open process that allows consumers to 
make choices. However, USDA stated that labeling and warning statements 
should be reserved for known hazards, which BSE is not in the United 
States. In light of the experiences in Japan and other countries that 
were thought to be BSE free, we believe that it would be prudent for 
USDA to consider taking some action to inform consumers when products 
may contain central nervous system or other tissue that could pose a 
risk if taken from a BSE-infected animal. This effort would allow 
American consumers to make more informed choices about the products 
they consume. USDA's comments and our detailed responses are presented 
in appendix III.

Customs concurred with the report and the recommendations as they 
related to Customs. Its letter is presented in appendix IV. USDA and 
FDA also made technical clarifications, which we incorporated as 
appropriate.

As agreed with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
from the date of this letter. At that time, we will send copies to the 
Secretaries of Agriculture and HHS, the Commissioner of Customs, and 
other interested parties. We will make copies available to others upon 
request.

If you have any questions about this report, please contact me or Erin 
Lansburgh at (202) 512-3841. Key contributors to this report are listed 
in appendix V.

Lawrence J. Dyckman 
Director, Natural Resources and Environment:

Signed by Lawrence J. Dyckman:

[End of section]

Appendix I: Scope and Methodology:

To address the effectiveness of federal efforts to prevent BSE or its 
spread, we focused on oversight activities in four key areas: import 
controls, compliance with feed rules, meat production, and disease 
surveillance. This included analysis of import data for calendar years 
1980 through 2000 maintained by the U.S. Department of Commerce, the 
Treasury Department, and the International Trade Commission; analysis 
of FDA data on inspections for compliance with the feed ban for fiscal 
years 1997 through 2001; and review of USDA slaughter and meat 
processing procedures and BSE surveillance documents. To assess the 
effectiveness of compliance with the animal feed ban, we obtained and 
analyzed FDA's feed inspection database to determine the accuracy, 
completeness, and reasonableness of key data elements, and timeliness 
of data entry. We interviewed FDA and feed industry officials and 
reviewed various FDA documents, including BSE inspection forms, 
assignment memorandums for conducting BSE inspections, and listings of 
firms that were out of compliance and firms that received FDA warning 
letters. In addition, we reviewed FDA contract information for 
evaluating the existing data in the BSE inspection database and for 
cleaning up the data and incorporating it into the agency's main 
database. We did not independently verify the accuracy of trade data 
maintained by the International Trade Commission or inspection data 
maintained by FDA. We also visited two large ports of entry to observe 
procedures to screen shipments for BSE-risk products, one state to 
observe feed ban inspections, and another state to observe slaughter 
and advanced meat recovery operations.

To assess the potential health risks and economic impacts of a BSE 
outbreak in the United States, we met or spoke with federal and state 
officials, as well as academic experts, industry representatives, and 
consumer groups, and we reviewed scientific literature. Specifically, 
we interviewed USDA officials responsible for oversight of imported 
animals and products, meat, animal disease surveillance, and 
agricultural statistics; FDA officials responsible for oversight of the 
feed ban, vaccines and blood, food regulated by FDA, dietary 
supplements, and imported products; officials at the U.S. Customs 
Service, International Trade Commission, United States Trade 
Representative, Department of State, Centers for Disease Control and 
Prevention, and National Institutes of Health. In addition, we attended 
public meetings on BSE-related topics sponsored by FDA, HHS, and the 
American Meat Institute. We also discussed risks and impacts with 
representatives from the National Association of State Departments of 
Agriculture, American Association of Feed Control Officials, Center for 
Science and the Public Interest, Public Citizen, American Feed Industry 
Association, American Meat Institute, National Cattlemen's Beef 
Association, National Grain and Feed Association, National Milk 
Producers Federation, National Renderers Association, Inc., and the Pet 
Food Institute. We interviewed officials at the Harvard Center for Risk 
Analysis and reviewed their report, Evaluation of the Potential for 
Bovine Spongiform Encephalopathy in the United States, issued in 
November 2001.

To compare federal efforts to those taken by other countries, we 
reviewed BSE risk assessments of 49 countries, including most major 
U.S. trading partners, prepared by the European Commission's Scientific 
Steering Committee. We compared the U.S. prevention efforts with those 
of countries that have not reported a case of BSE and with countries in 
which existing prevention measures did not prevent the emergence of 
BSE. We also reviewed evaluations of BSE prevention programs in member 
states of the European Union conducted by the European Commission's 
Food and Veterinary Office and the European Communities' Court of 
Auditors. We conducted our study from April through December 2001 in 
accordance with generally accepted government auditing standards.

[End of section]

Appendix II: Comments from the Department of Health and Human Services:

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix.

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

January 9, 2002:

Mr. Lawrence J. Dyckman: 
Director, Resources, Community, and Economic Development Division 
United States General Accounting Office 
441 G Street, NW:

Washington, DC 20548:

Dear Mr. Dyckman:

Please find the enclosed comments from the Food and Drug Administration 
on the GAO draft report entitled, Mad Cow Disease: Improvements in the 
Animal Feed Ban and Other Regulatory Areas Would Strengthen U.S. 
Prevention Efforts (GAO-02-183).

The Agency also provided extensive technical comments directly to your 
staff.

The Agency appreciates the opportunity to comment on this draft report 
before its publication.

Sincerely,

Signed by: 

Bernard A. Schwetz, D.V.M., Ph.D. 
Acting Principal Deputy Commissioner:

Enclosure:

FOOD AND DRUG ADMINISTRATION COMMENTS ON THE GENERAL ACCOUNTING OFFICE 
DRAFT REPORT ENTITLED, MAD COW DISEASE: IMPROVEMENTS IN THE FEED BAN 
AND OTHER REGULATORY AREAS WOULD STRENGTHEN U.S. PREVENTION EFFORTS 
(GAO-02-183):

The Food and Drug Administration (FDA) welcomes the General Accounting 
Office's (GAO) draft report on Mad Cow Disease, also referred to as 
Bovine Spongiform Encephalopathy (BSE), and appreciates the opportunity 
to review and provide comments. In addition to FDA's response to GAO's 
specific recommendations, we have some general comments regarding the 
draft report.

GENERAL COMMENTS:

The overall report highlights some of the key areas where U.S. efforts 
to prevent BSE could be bolstered. One such area highlighted is the 
enforcement by FDA of its mammalian protein feed ban (21 CFR 589.2000). 
While GAO states that federal actions alone cannot provide total 
assurance to prevent a BSE outbreak in the U.S., the findings of the 
Harvard Risk Assessment suggest that the levels of the feed ban 
compliance used in that model, along with the other federal BSE 
initiatives, is an effective measure in reducing risk. We agree that, 
as both the Harvard and the GAO reports indicate, further improvements 
in compliance with the feed ban will further strengthen BSE prevention 
efforts in the U.S. and will make the present small risk of 
introduction and spread even smaller.

GAO's report asserts that the United States has a more permissive feed 
ban than other countries--one that allows cattle feed to contain 
proteins from horses and pigs. When the feed ban rule was promulgated 
in 1997, FDA realized that U.S. risk factors were not equivalent to 
those of many European countries. If the U.S. had similar risk factors 
to these countries, mainly importation of similar quantities of 
potentially infective meat and bone meal (MBM) and cattle, or confirmed 
domestic cases of BSE, then it would follow that the U.S. should have a 
comparable feed ban. It should be remembered that the European 
temporary total ban was intended to address problems of cross-
contamination in an environment in which BSE was know to exist or be 
highly likely to exist. The total ban was not directly related to a 
concern about infectivity from porcine or equine origin MBM, or from 
feeding MBM to non-ruminants. In October 2001, FDA sponsored a public 
hearing in Kansas City on the feed ban to have the opportunity to 
discuss with various stakeholders whether changes in the feed ban rule 
are needed and the evidence to support any such changes. The agency is 
currently evaluating the written and oral comments from that public 
meeting.

FDA does not believe Congress or the public was misled when FDA 
provided compliance information to the Congress and when information 
was published electronically as GAO indicates in the report. In FDA's 
June 22, 2001, response to Chairman Tauzin, we stated that, "Although 
FDA provided training in completion of the checklist, some reporting 
problems have been noted - including failure, in some cases, to 
complete all appropriate questions." FDA clearly made an effort to 
identify the fact that there were reporting problems, including 
incomplete data, i.e., blanks. FDA believes we were forthright in 
notifying the Congressional Committee that incomplete data was an issue 
in some cases, and, therefore, we do not think that the term 
"misleading" is a fair characterization in regards to reporting to 
Congress. As the GAO report acknowledges, FDA recognized the need for 
significant improvements in its data collection systems for enforcement 
of the feed ban rule, initiated those improvements, and is in the 
process of implementing them. We discuss further details of these 
systems improvements in responses to specific recommendations of this 
report.

FDA does not agree with GAO's conclusion that FDA has not placed a high 
priority on oversight of the feed ban. FDA began implementing the feed 
ban in FY 1998, and this task included training field personnel, 
educating the industry, and coordinating with states on inspections. 
This required nearly a whole new infrastructure from that which was 
previously in place to conduct inspections of manufacturers 
engaged in the production of medicated animal feeds. No additional 
resources accompanied the development of the animal feed ban regulation 
to support the infrastructure to put such a feed ban in place. FDA had 
to divert significant resources from other enforcement programs and 
activities implement the feed rule and to evaluated whether additional 
protections are necessary.

GAO states that one person in FDA's Center for Veterinary Medicine 
(CVM) had responsibility for feed ban management. In actuality, FDA had 
a number of people involved in the development and management of the 
database, overseeing data entry, and preparing reports from the 
database. Compliance staff members were and still are available to 
answer questions from FDA, state, and industry, as well as 
congressional inquiries, and assist in compliance decisions. During FY 
1998, CVM reprogrammed one-third of its field inspection resources so 
it could determine the extent of compliance with the feed rule. FDA had 
additional personnel providing scientific support and input into 
inspectional and compliance decisions.

GAO RECOMMENDATIONS FOR EXECUTIVE ACTIONS:

In order to strengthen inspections of imported products that could pose 
a risk of BSE, we recommend that the Secretaries of Health and Human 
Services and of Agriculture, in conjunction with the Commissioner of 
Customs, develop a coordinated strategy, including identifying resource 
needs.

FDA Comment:

FDA agrees with GAO's recommendations, and has recognized the need for 
close cooperation with both the USDA agencies and the U.S. Customs 
Service in order to prevent the importation of products posing the risk 
of BSE. FDA's Import Program is the primary tool the Agency has to 
"control imports" of products potentially infected with or at high risk 
of infection with the agent associated with BSE (i.e., products 
"potentially tainted with mad cow disease"). On the issue of protecting 
the U.S. from BSE, FDA and the U.S. Department of Agriculture's (USDA) 
Animal and Plant Health Inspection Service (APHIS) work together in 
close cooperation with the U.S. Customs Service (Customs), the Federal 
agency with primary responsibility for administering U.S. laws relating 
to imports. There currently exists working groups and a senior 
executive interagency steering committee on BSE that includes all three 
organizations. FDA is a participating agency on all of these groups, 
and, in fact, chairs the Senior Executive Interagency Steering 
Committee. A major goal of these groups is to ensure that imports of 
products potentially contaminated with the agent associated with BSE do 
not get into the U.S. Following is a brief overview of these groups and 
specific information on cooperation on imports.

An Interagency Steering Committee of senior officials assures ongoing 
coordination between agencies, especially in three main areas: 
integrated contingency planning in case BSE or variant Creutzfeldt-
Jakob Disease (vCJD) disease is found in the U.S, identification of and 
response to potential vulnerabilities in the U.S. to BSE and vCJD, and 
coordination of risk communication plans by the various agencies. 
Organizations represented are: the Department of Health and Human 
Service's Assistant Secretary for Science Policy, FDA, the Centers for 
Disease Control and Prevention (CDC), the National Institutes of Health 
(NIH), USDA's APHIS, Foreign Agricultural Service, and Food Safety and 
Inspection Service (FSIS), White House Office of Science & Technology 
Policy, U.S. Trade Representative, Customs, Department of State, 
Department of Defense (DOD), National Association of State Departments 
of Agriculture, and the Association of American Feed Control Officials.

An interagency working group on BSE started in 1996 with USDA's APHIS, 
FSIS and Agricultural Research Service (ARS), FDA, NIH, CDC, and DOD 
represented. The purpose of the group is to share information, evaluate 
ideas and issues, and take suggestions back to participating agencies. 
Although import issues have long been addressed in the interagency 
working group and agencies have coordinated 
actions on import issues, to further strengthen coordination of import 
issues, an import subgroup to the interagency workgroup was formed to 
investigate and make recommendations relating to import issues. This 
import subgroup, consisting of representatives from APHIS, FDA and 
Customs has been meeting since January 2001, to enhance joint 
procedures to prevent the importation of BSE material into the U.S.

FDA, APHIS, and Customs have coordinated their response to the 
potential importation of BSE-related products. After APHIS issued their 
prohibition on the importation of BSE materials on December 7, 2000, 
FDA issued Import Bulletin 71B-02 requesting that FDA's field offices 
notify their local APHIS offices of any import suspected of containing 
BSE material.

FDA continues to coordinate activities among U.S. Customs, USDA/APHIS 
and FDA, and is leading the efforts for developing procedures for 
multi-agency operations. FDA has provided FDA product codes (those used 
in OASIS entry screening) to APHIS for their review, and has 
facilitated APHIS review of Customs HTS codes (used in Customs entry 
screening) which resulted in Customs issuing a directive to Customs 
field personnel on January 4, 2000, identifying specific HTS codes for 
products subject to the APHIS prohibition.

APHIS prohibition of BSE risk products of animal origin is currently 
the first line of defense to prevent such products from entering the 
U.S. FDA will continue to review entries of FDA-regulated products that 
consist of, or may contain, such products and ensure that APHIS has 
been notified of and has denied entry of such products as appropriate. 
FDA is continuing to review the admissibility of FDA-regulated products 
that could pose a BSE-related risk. This tri-agency cooperative effort 
has led to a multi-layered review process whereby each agency utilizes 
the strengths of their particular entry procedures to produce a 
composite system which is considerably more robust than any of the 
component.

1) Prior to vessel arrival, USDA examines vessel manifests for products 
identified as being of animal origin and takes appropriate action, 
based on the origin and the presence of USDA certificates (if any.):

2) When the entry is presented to U.S. Customs, the HTS code is screened 
against the list of potential products provided by USDA, and any 
suspect products are referred to USDA.

3) Entries subject to FDA regulation are then screened by FDA's entry 
review system (OASIS) and subsequent review of importers and brokers 
documents (if necessary.) Any products suspected of containing animal 
ingredients from a BSE country are referred to USDA for regulatory 
follow-up. FDA and USDA have developed a "fax-back" system to rapidly 
exchange entry information to facilitate this review.

On November 14, 2001, FDA hosted a satellite broadcast between FDA, 
USDA, and U.S. Customs to review this multi-layered system and assess 
its effectiveness. Participants included both headquarters and field 
personnel. Additional broadcasts will occur as deemed necessary. In 
addition FDA, USDA, and Customs staff remain in regular communication 
regarding current developments and emerging BSE risks. FDA is currently 
developing an import sampling assignment for FDA regulated products to 
make sure they are in compliance with 21 CFR 589.2000. This assignment 
is being coordinated with the USDA. We will continue development of a 
coordinated strategy with USDA and Customs to strengthen controls over 
imported products.

Recommendation to develop a strategy, working with 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 fashion.

FDA Comment:

FDA agrees with GAO that the development, coordination, and constant 
improvement of a strategy for the oversight of state inspection 
activities is critical to the Agency's successful enforcement of 21 
C.F.R. 589.2000, and has made extensive progress in implementing this 
recommendation. Even before issuing the regulations in 1997, FDA 
recognized that the states would play a significant role in 
inspections. FDA adopted this compliance strategy because the states 
know where these facilities are, have legal authority to gain access to 
them, and have enforcement tools that allow immediate control over 
violative product.

This strategic alliance with our state partners has produced major 
successes in terms of the inspectional coverage of those facilities 
covered by 21 C.F.R. 589.2000, with approximately 80% of the over 
12,000 inspections conducted by state personnel. One issue raised in 
the report is the number of firms that are subject to the FDA 
regulation that have not yet been identified and inspected. The number 
of 6,000 to 8,000 unlicensed feed mills used by the agency in its 
compliance updates was an estimate developed in 1997 by consulting with 
a number of trade, industry and state officials and it encompasses a 
broad target of potential firms that may be in business. Since 1997, 
the feed industry has undergone an intensive consolidation. While there 
remains no definitive inventory of unlicensed establishments and there 
is no statutory registration requirement, the best estimate of the 
number of unlicensed firms on a national basis, is the existing 
inventory of firms that have been inspected (4,835). However, the 
agency shares the concern expressed in the report that all firms 
subject to this regulation should be inspected and in compliance with 
the requirements. Therefore, the agency has incorporated into its state 
contracts a requirement for each state to inventory all the firms in 
the state and reconcile these firms with the FDA's official 
establishment inventory of firms. Any new unlicensed feed mills 
identified are to be inspected as a priority by the state.

The core ingredient to this strategy is the longstanding relationship 
between the agency and the states regarding feed manufacturing and BSE 
issues. The agency has steadily increased the number of states working 
under contract with it since the regulation became effective. The 
regulation became effective in August 1997. In 1998, 15 states entered 
into a contractual agreement with the agency followed by 16 in 1999, 18 
in 2000, 27 in 2001 and 34 in 2002. Part of this contractual agreement 
includes using the Agency's designated information collection forms and 
includes requirements for timeliness for data submissions.

In addition, to the states with contracts, the agency has developed 
partnership agreements to conduct inspections relating to the BSE 
regulations. Nine states entered into partnership agreements in 1998, 
12 in 1999, 11 in 2000, 10 in 2001 and 9 in 2002. The partnership 
agreements generally provide similar data quality and timeliness as 
with contracts, however, the agency has preferred contracts since they 
provide the most effective means to oversee the quality and 
effectiveness of state inspections. FDA personnel conduct inspections 
in states that are not covered by either a contract or partnership 
agreement.

The agency works very closely with the states to coordinate their 
respective activities in regard to BSE inspections. This includes 
providing training, conducting joint inspections, work planning, 
sharing of inspection findings, coordination of recall and enforcement 
actions and auditing. The agency conducts a 50-state conference call on 
a quarterly basis that includes updates on BSE activities. In July 2001 
and again in October 2001 specific FDA-State BSE meetings were 
conducted to discuss inspection and enforcement strategy. These 
meetings are continuing on a quarterly basis with the next meeting 
scheduled for February 19, 2002. The agency works closely with the 
American Association of Feed Control Officials (AAFCO) and the National 
Association of State Departments of Agriculture (NASDA) on BSE issues. 
FDA is represented on the AAFCO BSE task force and regularly consults 
with its state counterparts.

Recommendation to 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.

FDA Comment:

FDA agrees with the need for a comprehensive enforcement strategy for 
BSE. FDA made enforcement guidance available on its web-site since 
1998, issued specific guidance regarding inspectional assignments in 
2001, and FDA's Office of Enforcement provided still more guidance to 
the field in early 2001. It should be noted that the agency does not 
have a unique enforcement strategy for every regulatory program. 
Generally, guidance contained in the Investigators Operations Manual 
(IOM) and the Regulatory Procedures Manual (RPM), along with procedures 
in place for ad hoc case review, are used to determine the hierarchy of 
enforcement action, the criteria for actions to be taken, the 
timeframes for firms to correct violations, and the timeframes for 
follow up inspections to confirm that violations have been corrected. 
However, because of the significance of ensuring industry's compliance 
with the BSE regulations, FDA is developing a BSE enforcement strategy 
that will be incorporated into a comprehensive BSE compliance program, 
the Feed Manufacturing Compliance Program. The compliance program, 
which is currently being drafted and is anticipated to be released in 
this fiscal year, will add additional detail for inspections, reporting 
and enforcement.

From a historical perspective, it should be noted that the 1998 
strategy focused initially on education and attempted to establish a 
cooperative approach to implementing 21 C.F.R. 589.2000. In fact, the 
database, mentioned throughout this report, was not developed as a 
compliance tool but was developed to guide the agency's efforts to 
evaluate effected firms knowledge of the feed ban. However, as BSE 
began to spread throughout Europe, the database began to assume more 
functionality as a source of information about general compliance with 
the feed rule. Thus, both our own evaluations of our efforts to date 
coupled with the increasing demand for data caused us to make some mid-
course changes to the database. In FY 2001, as part of a contingency 
fund request, we asked for additional resources both for database 
improvements and more expansive inspectional coverage. In addition, in 
FY 2002 we requested and received a substantial amount of resources to 
help us further improve our systems and inspectional and enforcement 
actions.

The agency however, has progressively increased its enforcement 
approach starting with the January 2001 assignment to the field that 
provided direct reference authority for issuance of warning letters. 
This increased emphasis on enforcement not only included giving the 
field authority to issue warning letters without prior approval from 
headquarters, but also advised the field to begin using seizures, 
injunctions and prosecutions to assure industry's compliance with the 
21 C.F.R. 589.2000.

The agency's current position is that the federal feed ban regulation 
has now been in effect for more than four years. FDA and its state feed 
regulatory counterparts have conducted inspections of all known 
renderers, protein blenders, and feed manufacturers in the U.S., as 
well as a number of ruminant feeders. These inspections, which were 
conducted to ensure industry's understanding and compliance with the 
regulations, have led to recalls of more than 200 adulterated or 
misbranded products. The regulated industry should now be fully aware 
of the regulation, its requirements, and the need to comply with the 
regulation. The agency will continue to work with industry to enhance 
its understanding of the agency's policies and efforts to prevent the 
spread of BSE to the United States. The agency is responsible for 
ensuring industry's adherence to the regulation; and we are committed 
to using enforcement actions, if necessary, to meet this goal.

Recommendation to track enforcement actions taken by states.

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.

Recommendation 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.

The agency agrees with this recommendation and has issued a statement 
of work for the contractor, Booz-Allen and Hamilton Inc., that 
incorporates accepted data management and verification procedures into 
the inspection database. The origins of this initiative started in May 
2001 when the Acting Principal Deputy Commissioner of FDA tasked FDA's 
Director, CVM, and the Associate Commissioner for Regulatory Affairs to 
develop solutions to upgrade the database to enhance its ability to 
collect, analyze, and report out data in regard to inspections for 
compliance with 21 CFR 589.2000. A number of workgroups were tasked 
with developing short-term solutions to improve data quality and 
timeliness in regard to BSE inspections as well as to propose longer 
term solutions to incorporate existing data into existing agency 
compliance data systems. These workgroups began meetings in May 2001 on 
a biweekly basis and have completed their short-term assignment. FDA 
anticipates implementation of the longer-term integration with user 
acceptance testing of the new system in mid-February and production 
implementation in early March 2002. Specific short-term accomplishments 
included the designation of BSE coordinators in each district office to 
track and review inspection reports submitted by state or federal 
investigators for accuracy and completeness, incorporation of specific 
instructions for completion of the checklist, defining terminology to 
improve comprehension of the inspection form, revising and updating the 
questions to improve ease of completion, and reinforcing the need for 
quality control of all BSE data. These short-term accomplishments were 
completed in September 2001. Longer-term accomplishments included 
incorporating the existing database of checklist information into the 
existing Field Accomplishment Compliance Tracking System (FACTS) that 
includes unique identifiers for each firm. The new process incorporates 
edit checks to help ensure that data entered is complete and valid. The 
longer term objectives included:

* Providing the FDA with a centralized repository of BSE firms in 
support of its activities pertaining to ruminant feed regulations.

* Supporting the FDA in identifying firms under high-risk categories and 
by compliance program such as BSE for which a firm may be regulated and 
inspected.

* Providing FDA with an integrated and centralized repository of BSE 
related data including inspection checklists, inspection results, 
sample collections and compliance activities against non-compliant 
firms.

* Avoiding duplication of efforts in the tracking of BSE firms in 
different data systems.

The requirements of the system are described below:

BSE FUNCTIONAL REQUIREMENTS:

* BSE FIRMS REQUIREMENTS:

The following Table 3-1 describes the requirements for tracking BSE 
firms in FACTS.

Table 3-1: BSE Firms Requirements:

1) Requirement Description: The system shall allow OEI Coordinators 
and Investigators to identify firms that are subject to BSE 
inspections.

2) Requirement Description: The system shall allow a firm to be 
identified with multiple associations of Compliance Programs for which 
the firm may be inspected such as BSE, Prescription Drug User Fee Act 
(PDUFA) , High Risk for HAACP, etc. In addition, firms may be 
identified by their level of risk.

3) Requirement Description: The system shall allow users to query BSE 
firms based on their inspection violations such as NAI, VAI, and OAI, 
their State and Home District.

4) Requirement Description: The system shall display summary 
information of the firms identified in the query results. Information 
shall include FEI, firm name, address, inspection status, etc.

5) Requirement Description: The system shall provide and display the 
counter hits of the query and the date the query is performed.

6) Requirement Description: The system shall provide a link to the 
Inspection Results for the firm highlighted on the summary list.

7) Requirement Description: The system shall allow query results for 
BSE firms to be generated through an output file or printed report.

8) Requirement Description: The system shall provide access to the CVM 
Information Technology team for querying and viewing BSE firms in 
FACTS.

[End of table]

BSE INSPECTION CHECKLIST REQUIREMENTS:

The following Table 3-2 describes the requirements for tracking BSE 
Inspection Checklist data in FACTS. Table 3-2: BSE Inspection 
Checklist Requirements:

1) Requirement Description: The system shall allow Investigators and 
BSE District Coordinators to enter, update, search and view BSE 
Inspection Checklist data.

2) Requirement Description: The system shall allow BSE Inspection 
Checklist data be entered only for inspections performed under BSE 
PACs.

3) Requirement Description: The system shall allow users to enter 
information into FACTS from the hardcopy BSE Checklist form for 
inspections performed by State investigators.

4) Requirement Description: The system shall link the firm inspection 
results to the BSE Inspection Checklist data. BSE Inspection Checklist 
data shall be accessible from the Inspections Results screen for a 
given firm and inspection date.

5) Requirement Description: The system shall allow users entering BSE 
inspections results to update the firm name and address information, 
and operational status of the firm such as 'Inactive' and 'Out of 
Business'.

6) Requirement Description: The system shall allow users to identify 
multiple BSE firm types such as Renderer, Feeder of Ruminant, FDA 
Licensed Feed Mill, On Farm Feed Mixers, etc.

7) Requirement Description: The system shall automatically flag the 
firm as BSE high risk firm when an inspection is reported under a BSE 
PAC and the firm was not previously identified as a BSE firm.

8) Requirement Description: The system shall not allow users to set 
the Inspection Status to 'Completed' or 'Awaiting Endorsement' if 
inspection was performed under a BSE PAC and BSE Inspection Checklist 
data has not been entered.

9) Requirement Description: The system shall prompt and warn users if 
the inspected firm is identified as high risk for BSE but no BSE PAC 
has been reported under the Inspection Results when setting the 
Inspection Status to 'Completed' or 'Awaiting Endorsement'.

10) Requirement Description: The system shall allow all FACTS users to 
view BSE Inspection Results and the related BSE Inspection Checklist 
data.

11) Requirement Description: The system shall provide access to the 
CVM Information Technology team for viewing BSE inspection results and 
related BSE Inspection Checklist data.

12) Requirement Description: In a future implementation, the system 
shall allow State Investigators to enter BSE inspection results and 
BSE Inspection Checklist data directly into FACTS through the State 
Access to FACTS application (SAF) .

* BSE LEGACY DATA REQUIREMENTS:

The following Table 3-3 describes the requirements for reconciling 
CVM- BSE Firms with ORA Firms data. It also describes the requirements 
for transferring BSE Checklist data from the CVM Access application 
into FACTS.

Table 3-3: BSE Legacy Data Requirements:

1) Requirement Description: BSE firms identified in the CVM legacy 
system shall be reconciled with ORA firms and initialized as high risk
BSE firms in the ORA Firms table.

2) Requirement Description: Initial list of ORA firms to be reconciled 
with CVM-BSE firms shall be identified based on inspections performed 
under BSE PACs.

3) Requirement Description: CVM-BSE firms not found in the ORA Firms 
inventory shall be added to the ORA Firms table as Workload 
Obligation 'Yes'.

4) Requirement Description: BSE Checklist data from CVM legacy system 
shall be transferred to the corresponding BSE inspection related 
tables in FACTS.

5) Requirement Description: The CVM Information Technology team shall 
have access to generate ad hoc reports for BSE firms and BSE 
Inspection Checklist data from the FACTS Reporting database. 

The following are GAO's comments on the Department of Health and Human 
Services' letter dated January 9, 2002.

GAO Comments:

1. Our report acknowledged FDA's ongoing review but also notes that FDA 
has not set a date to announce a decision on the exemptions. The report 
also recognizes that recent research suggests the possibility of 
"silent" incubation in species not previously thought susceptible to 
TSEs. This research argues against waiting until BSE is found to 
strengthen measures shown to prevent the spread of the disease. As FDA 
notes, other countries strengthened their feed bans due to concerns 
about commingling prohibited and non-prohibited proteins. Such 
commingling is a common area of noncompliance in the United States.

2. As FDA points out, its June 22, 2001, transmittal of compliance 
information to the Chairman of the House Committee on Energy and 
Commerce "made an effort to identify the fact that there were reporting 
problems, including incomplete data, i.e., blanks." However, we do not 
believe that this caveat conveyed the extent to which the information 
could be inaccurate. In fact, noncompliance could be much higher than 
FDA reported, because FDA treated all firms with blanks on compliance 
questions as if they were in compliance. We found that over 700 
inspection records for firms that handled prohibited proteins had 
blanks on compliance questions. In its response to the Chairman, FDA 
did not disclose that some of those records contained inspector 
comments stating that the firms were not in compliance. Nor did FDA 
disclose that, at the time it responded to the Chairman, it was aware 
of the need for "significant improvements in its data collection system 
for enforcing the feed ban." As a result, we believe the data were 
misleading.

3. We believe that the nature and severity of the problems we found in 
FDA's management, oversight, and enforcement of the feed ban point to 
insufficient attention by FDA management. Moreover, the fact that FDA 
gave all headquarters responsibility to one individual--as an add-on to 
that individual's other duties--is further evidence of the relatively 
low priority FDA gave to its regulatory responsibility.

4. Although FDA's field inspectors and state inspectors carried out the 
inspections, FDA headquarters tracked overall compliance with the feed 
ban and brought together data on FDA field and state compliance 
inspections. In meetings with FDA officials, we were repeatedly told 
that a single person had designed the program and the database to 
monitor inspections and, until January 2001, made all enforcement 
decisions. While administrative and other support may have been 
available for this person, the overall design and direction of feed ban 
implementation rested with this individual. Moreover, because FDA had 
no other information system, the database that individual developed was 
FDA's only mechanism to monitor the program and track feed ban 
compliance.

5. Although FDA cites a number of high-level interagency policy and 
technical initiatives aimed at ensuring that BSE-risk products do not 
enter the United States, our recommendation is grounded in problems we 
found at the operational level. First, the high error rates in 
importer-provided information found by Customs are unacceptable. 
Second, the ever-increasing volume of imported shipments strains 
inspection resources at both USDA and FDA. Third, we observed or were 
told by federal field personnel about problems affecting USDA and FDA 
staff responsible for reviewing import documentation and conducting 
inspections of shipments. FDA staff told us that they need integrated 
information technologies, dedicated inspection facilities, and 
additional staff to effectively address their workload.

6. We do not agree that FDA has made extensive progress implementing 
our recommendation, based on the fact that it periodically meets with 
states on BSE-related issues and has increased the number of states 
under contracts to conduct inspections. With regard to its progress in 
identifying the universe of firms subject to the ban, our work shows 
that FDA's efforts have not been successful. In reports, FDA states 
that the number of on-farm feed mills, feed blenders, and feed haulers 
is still unknown. FDA also asserts that the feed industry has undergone 
extensive consolidation, but it has not reconciled the number of firms 
inspected with industry or state estimates. Although FDA asserts it has 
incorporated into state contracts a requirement to identify firms 
subject to the ban, the contracts we reviewed did not include such 
provisions. Moreover, as recently as May 2001, we found that FDA was 
adding to its database information on inspections conducted in 1998 by 
states under contract.

7. FDA agrees on the need for a comprehensive strategy for BSE but 
points out that it began an enforcement strategy in 1998. However, our 
review shows that the strategy did not contain criteria and timeframes 
for specific enforcement actions against firms that fail to comply with 
the feed ban, as our recommendation envisions. FDA's contention that 
its initial approach was to educate firms does not explain its failure 
to take action against firms found out of compliance on repeated 
inspections. Now that the feed ban has been in effect for more than 4 
years, FDA points out that inspections have resulted in more than 200 
recalls. However, those recalls consist of actions taken by 22 firms, 
one of which accounted for about 150 recalls. By FDA's own estimates, 
more than 300 firms are out of compliance.

8. Regardless of variations in state laws, FDA has instructed states to 
provide specific information on the feed ban inspections they conduct. 
We believe FDA should request these states to also include information 
on enforcement actions taken as a result of those feed ban inspections.

9. While we agree that FDA has initiated efforts to increase the 
integrity and usefulness of the BSE inspection data, it has not taken 
the steps necessary to ensure that the inspection data are accurate and 
complete and recorded in a timely manner. For example, neither the 
steps listed in FDA's letter nor the terms of the contracts we reviewed 
include periodic assessment of error rates or controls to help ensure 
data entered are complete and accurate. Moreover, FDA's response does 
not address how the data on past BSE inspections will be merged with 
the Field Accomplishment Compliance Tracking System. Many of the firms 
have never before been subject to FDA oversight and would not have such 
control numbers to effectively merge the old and new data. Also, FDA 
has not included steps to capture timeliness of inspections, 
enforcement actions, and follow up, especially for past inspections.

[End of section]

Appendix III: Comments from the Department of Agriculture:

United States Department of Agriculture: 
Comments on the Draft General Accounting Office Report: Mad Cow 
Disease: Improvements in the Animal Feed Ban and Other Regulatory 
Areas Would Strengthen U.S. Prevention Efforts:

General Comments:

USDA will address the recommendations as we seek public comment for any 
proposed regulatory changes. We believe that GAO's intent in its 
recommendations is to strengthen our ongoing efforts to enhance public 
and animal health by innovative, science-based programs and activities. 
We agree that the USDA should continue to work with other government 
agencies and to target methods of adjusting our BSE prevention system 
based on new scientific findings and changing world events. The USDA 
has worked proactively for well over a decade to exclude BSE from the 
United States, and we have been committed to continual improvement all 
along the way. Our general responses to the recommendations are as 
follows:

1. In order to strengthen inspections of imported products that could 
pose a risk of BSE, we recommend that the Secretaries of Health and 
Human Services and of Agriculture, in consultation with the 
Commissioner of Customs, develop a coordinated strategy including 
identifying resource needs.

Response: We agree on the importance of coordination among government 
agencies and have been working closely to take a holistic approach to 
resource needs associated with BSE prevention and surveillance. The 
U.S. Government coordinates and plans ongoing activities and policies 
regarding BSE and other TSEs through technical working groups and an 
inter-agency policy planning committee.

For policy-level coordination, a strategic planning group, the Inter-
agency BSE Steering Committee, has several responsibilities, including:

* Planning ways to minimize the spread of BSE and identify potential 
vulnerabilities in present policies,

* Clarifying jurisdictional issues,

* Improving communication between Federal agencies on TSE -related 
matters, * Developing contingency plans and communication strategies for 
the public if a case of BSE or vCJD or BSE-contaminated animal feed 
were found in the United States.

Policy-level representatives participate from USDA, DHHS, Customs 
Service, USTR, DOD, State Department, the Office of Management and 
Budget, the White House Office of Science and Technology, the American 
Association of Feed Officials, the National Association of State 
Departments of Agriculture, and the National Assembly of Chief 
Livestock Health Officials.

A great deal of coordination and planning also takes place at the 
technical level among scientists working on BSE issues. APHIS, ARS, 
CDC, Customs, DOD, FAS, FDA,

FSIS, and NIH participate together on the Inter-agency BSE Working 
Group. Technical representatives from each participating agency discuss 
prevention activities, new science, and changing world events and 
coordinate efforts across agencies. In addition, the group holds annual 
meetings with Canadian and Mexican technical experts from counterpart 
agencies that cover animal health, public health, diagnostics, and 
research in those countries. These annual meetings have contributed to 
greater understanding and harmonization of TSE control and prevention 
policies among the three countries, which is crucial given the amount 
of trade taking place among the North American countries.

2. Consider whether some interim action, such as public announcements 
or caution label or signs, might be appropriate to advise consumers 
that certain beef cuts and beef products may contain central nervous 
system (CNS) tissue.

Response: The Harvard Risk Assessment indicates that the United States 
is highly resistant to the introduction and spread of the BSE agent in 
United States cattle herds due to existing Federal regulatory programs. 
Additional measures will be used to minimize human exposure to the BSE 
agent in the unlikely event that it is introduced in the United States. 
While the risk of consuming products containing the BSE agent may be 
minimal in the United States, providing consumers with information on 
product content indicates a transparent, open process that allows 
consumers to make choices about the products they consume.

While products may contain CNS tissue, this does not mean such tissue 
is infectious for BSE. Labeling and warning statements should be 
reserved for known hazards.

3. In order to strengthen the BSE surveillance program, we further 
recommend that the Secretary of Agriculture increase the number of 
tests from cattle that die on farms in the BSE surveillance program.

Response: On January 10, 2002, President Bush signed into law the 
Defense Appropriations bill, which bolstered USDA homeland security 
efforts. This bill included $105 million for USDA's Animal and Plant 
Health Inspection Service for pest and disease exclusion, detection and 
monitoring. A portion of these funds are being expended to increase BSE 
surveillance, and indeed USDA is already well on its way to the goal of 
testing 12,500 cattle brains this fiscal year, up from 5,200 last year, 
as recommended in the Harvard risk assessment. A focus of this 
increased surveillance is to obtain more samples from animals that die 
on farms.

Modern, properly equipped laboratory facilities are required to support 
testing. The Secretary of Agriculture has submitted a plan to Congress 
requesting funds to enhance USDA's laboratory infrastructure.

The following are GAO's comments on the Department of Agriculture's 
comments received January 11, 2002.

GAO Comments:

1. While USDA states that it agrees with our recommendation, in its 
discussion of policy-level coordination and strategic planning among 
various agencies, USDA does not fully address the substance of our 
recommendation. Our recommendation focuses on actions to strengthen the 
inspection of imported products at an operational level, including 
identifying resources needed to do so.

2. With regard to our recommendation to consider interim action to 
advise consumers when products may contain central nervous system 
tissue, USDA acknowledged its support for providing consumers with 
information on product content and for an open process that allows 
consumers to make choices. However, USDA stated that labeling and 
warning statements should be reserved for known hazards. We believe 
that it would be prudent for USDA to consider taking some action to 
inform consumers when products may contain central nervous system or 
other tissue that could pose a risk if taken from an infected animal, 
especially in light of the experiences in Japan and other countries 
that were believed to be BSE free. This would allow consumers to make 
informed choices about the products they consume. Caution labels or 
signs, if used, could facilitate more timely removal of products that 
could pose a health risk if BSE were to appear.

3. USDA states that it is more than doubling the number of animals 
sampled in its BSE surveillance program for 2002 and that it intends to 
obtain more samples from animals that die on farms. USDA notes that 
properly equipped laboratory facilities will be needed to support the 
increased surveillance. Because of this uncertainty, we are keeping the 
recommendation.

[End of section]

Appendix IV: Comments from the Customs Service:

U.S. Customs Service:

Memorandum:

DATE: January 14, 2002 FILE: AUD-1-OP CN:

MEMORANDUM FOR LAWRENCE J. DYCKMAN DIRECTOR, NATURAL RESOURCES AND 
ENVIRONMENT:

FROM: Director, Office of Planning:

SUBJECT: Comments on GAO Draft Audit Report Mad Cow Disease: 
Improvements in the Animal Feed Ban and Other Regulatory Areas Would 
Strengthen U.S. Prevention Efforts:

Thank you for providing us with a copy of your draft report entitled 
"Mad Cow Disease: Improvements in the Animal Feed Ban and Other 
Regulatory Areas Would Strengthen U.S. Prevention Efforts" and the 
opportunity to discuss the issues in this report.

We have reviewed this report and concur with the Customs related 
recommendation.

We have determined that the information in the audit does not warrant 
protection under the Freedom of Information Act.

Thank you for the opportunity to review the draft report. If you have 
any questions regarding this report, please contact Ms. Cecelia Neglia 
at (202) 927-9369.

Signed by William F. Riley: 

[End of section]

Appendix V: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Lawrence J. Dyckman (202) 512-3841 Erin Lansburgh (202) 512-3017:

Acknowledgments:

In addition to those named above, Cheryl Williams, James Dishmon, 
Stuart Ryba, Janice Turner, Jason Holliday, Barbara Johnson, Barbara 
El-Osta, and Carol Herrnstadt Shulman made key contributions to this 
report.

FOOTNOTES

[1] Ruminants are animals with four-chambered stomachs including, but 
not limited to, cattle, buffalo, sheep, goats, deer, elk, and antelope.

[2] Independent of the Harvard study, in May 2001 the Animal Disease 
Risk Assessment, Prevention, and Control Act of 2001 (P.L. 107-9) 
required USDA to report on the risk to the United States from BSE, the 
effectiveness of current interagency BSE prevention efforts, and 
recommendations to reduce and manage the risks. USDA expects to issue 
its report later this year. 

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

[4] Prions are neither viruses nor bacteria and contain no genetic 
material.

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

[6] According to scientific experts at the European Commission, in 
careful feeding experiments less than one gram of brain tissue from an 
infected animal induced disease in all the recipient cattle. The 
infective dose depends heavily on characteristics of the host and the 
route of exposure. Consuming infected material is a less efficient 
means of inducing disease than injecting the material directly into the 
brain.

[7] According to FDA, millions of people in the United Kingdom may have 
been exposed to BSE.

[8] This figure includes 12 probable cases where confirmation will 
never be possible, according to officials in the Department of Health 
in the United Kingdom.

[9] Animal-derived protein may be used in pet food and in feed for 
horses, swine, other non-ruminant animals, and poultry. 

[10] Plate waste is cooked meat offered for human food that is further 
heat processed.

[11] R. Race, A. Raines, G.J. Raymond, B. Caughey, and B. Chesebro, 
"Long-term Subclinical Carrier State Precedes Scrapie Replication and 
Adaptation in a Resistant Species: Analogies to Bovine Spongiform 
Encephalopathy and Variant Creutzfeldt-Jakob Disease in Humans," 
Journal of Virology, Vol. 75, No. 21 (2001), pp. 10106-12

[12] The European Union is composed of Austria, Belgium, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Portugal, Spain, Sweden, and the United Kingdom. 

[13] The Scientific Steering Committee provides scientific advice to 
the European Commission on matters related to consumer protection and 
health, including food safety.

[14] In 1989, USDA prohibited all imports of cattle and other ruminants 
from countries with BSE.

[15] Renderers recycle animals and animal tissues into, among other 
things, animal feed; diseased animals, unfit for human consumption, are 
routinely part of such recycling.

[16] Food Safety and Security: Fundamental Changes Needed to Ensure 
Safe Food (GAO-02-47T; Oct. 10, 2001).

[17] Agricultural Inspection: Improvements Needed to Minimize Threat of 
Foreign Pests and Diseases (GAO/RCED-97-102, May 1997).

[18] Nonambulatory or "downer" animals include primarily animals that 
are unable to walk for various reasons ranging from broken limbs to 
neurological diseases and some animals that died before slaughter. 

[19] USDA also tests in its BSE surveillance program about 300 samples 
each year submitted by practicing veterinarians and veterinary schools 
and hospitals. Some of these samples come from cattle that displayed 
neurological symptoms but tested negative for rabies, another 
neurological disease.

[20] Older animals are at risk because, if infected, they have lived 
long enough for disease symptoms to appear.

[21] FDA carries out feed ban inspections in 12 states and has entered 
into partnership and contract arrangements with the other states to 
conduct feed ban inspections. 

[22] A warning letter generally represents FDA's first official 
notification to a firm that FDA has found one or more products, 
practices, processes, or other activities violate its regulations.

[23] Five firms also voluntarily recalled mislabeled or potentially 
contaminated feed during 1999.

[24] FDA Oversight of State Food Firm Inspections: A Call for Greater 
Accountability (HHS-OIG, June 2000, OEI-01-98-00400).

[25] USDA is responsible for overseeing the health of cattle and 
ensuring the safety of fresh and processed beef and beef products, 
while FDA is responsible for ensuring the safety of many edible 
products made from cattle, including bouillon, flavorings, and dietary 
supplements.

[26] For the most part, these costs represent transfer payments from 
the public sector or taxpayers to farmers and other related industries.

[27] Using an input-output model of the British agricultural economy, a 
study prepared by the Ministries of Agriculture, Fisheries, and Food, 
commissioned by United Kingdom agricultural departments and Her 
Majesty's Treasury, estimates that economic losses for the first year 
of the crisis in the United Kingdom were between $1.07 and $1.4 
billion. Economic Impact of BSE on the UK Economy, by DTZ Pieda 
Consulting, March 1998.

[28] BSE and vCJD: Background, Evolution, and Current Concerns, Brown 
et al., Emerging Infectious Diseases Journal. Vol 7, No 1, Jan-Feb 
2001.

[29] FDA monitors the BSE-related safety of the blood supply and has 
recommended deferring donors of blood and blood products based on 
exposure to the BSE agent, for example donations from individuals who 
traveled or resided in the United Kingdom for 3 or more months between 
1980 and the end of 1996.

[30] In 1997 the United States restricted trade in cattle and cattle-
derived products, among other things, from most European countries, 
regardless of whether the countries had BSE.

[31] The OIE recommends minimum testing levels for BSE surveillance in 
countries based on the size of the adult cattle population.

[32] The six countries with BSE that have targeted testing animals that 
die on farms are Switzerland, Ireland, Portugal, France, the Czech 
Republic, and Slovenia.

[33] The three countries that do not have BSE that have targeted 
testing animals that die on farms are Estonia, Cyprus, and Singapore.

[34] FDA allowed these exemptions either because scientific evidence 
had not shown infectivity in the protein sources or because the species 
involved were not known to contract BSE or other TSEs.

[35] Special Report No 14/200/1: Follow up on the Courts' Special 
Report No 19/98 on BSE Together with the Commission's Replies, Sept. 
30, 2001.

GAO's Mission:

The General Accounting Office, the investigative arm of Congress, 
exists to support Congress in meeting its constitutional 
responsibilities and to help improve the performance and accountability 
of the federal government for the American people. GAO examines the use 
of public funds; evaluates federal programs and policies; and provides 
analyses, recommendations, and other assistance to help Congress make 
informed oversight, policy, and funding decisions. GAO's commitment to 
good government is reflected in its core values of accountability, 
integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony:

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains 
abstracts and full-text files of current reports and testimony and an 
expanding archive of older products. The Web site features a search 
engine to help you locate documents using key words and phrases. You 
can print these documents in their entirety, including charts and other 
graphics.

Each day, GAO issues a list of newly released reports, testimony, and 
correspondence. GAO posts this list, known as "Today's Reports," on its 
Web site daily. The list contains links to the full-text document 
files. To have GAO e-mail this list to you every afternoon, go to 
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order 
GAO Products" heading.

Order by Mail or Phone:

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to:

U.S. General Accounting Office

441 G Street NW,

Room LM Washington,

D.C. 20548:

To order by Phone: 	

	Voice: (202) 512-6000:

	TDD: (202) 512-2537:

	Fax: (202) 512-6061:

To Report Fraud, Waste, and Abuse in Federal Programs:

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470:

Public Affairs:

Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S.

General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.

20548: