OFFICE OF AUDITOR OF STATE
STATE OF IOWA

Mary Mosiman, CPA
Auditor of State

State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834

Facsimile (515) 242-6134

NEWS RELEASE
FOR RELEASE

November 21, 2014

Contact: Andy Nielsen
515/281-5834

Auditor of State Mary Mosiman today released a report on the Iowa Department of
Agriculture and Land Stewardship for the year ended June 30, 2013.
The Department has the primary responsibility to encourage, promote and advance
agriculture in this State.
Mosiman recommended the Department strengthen internal controls over receipts in certain
Bureaus and implement procedures to comply with certain provisions of the Code of Iowa. The
Department’s responses to the recommendations are included in the report.
A copy of the report is available for review in the Iowa Department of Agriculture and
Land Stewardship, in the Office of Auditor of State and on the Auditor of State’s web site
at http://auditor.iowa.gov/reports/1460-0090-BR00.pdf.
###

 REPORT OF RECOMMENDATIONS TO THE
IOWA DEPARTMENT OF AGRICULTURE AND LAND
STEWARDSHIP
JUNE 30, 2013

 Office of 

AUDITOR
OF STATE
State Capitol Building  Des Moines, Iowa

Mary Mosiman, CPA
Auditor of State

 

OFFICE OF AUDITOR OF STATE
STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834

Mary Mosiman, CPA
Auditor of State

Facsimile (515) 242-6134

November 18, 2014

To the Honorable Bill Northey,
Secretary of Agriculture:
The Iowa Department of Agriculture and Land Stewardship is a part of the State of Iowa
and, as such, has been included in our audits of the State’s Comprehensive Annual Financial
Report (CAFR) and the State’s Single Audit Report for the year ended June 30, 2013.
In conducting our audits, we became aware of certain aspects concerning the Department’s
operations for which we believe corrective action is necessary. As a result, we have developed
recommendations which are reported on the following pages. We believe you should be aware of
these recommendations, which pertain to the Department’s internal control and compliance with
statutory requirements and other matters. These recommendations have been discussed with
Department personnel and their responses to these recommendations are included in this report.
While we have expressed our conclusions on the Department's responses, we did not audit the
Iowa Department of Agriculture and Land Stewardship's responses and, accordingly, we express
no opinion on them.
This report, a public record by law, is intended solely for the information and use of the
officials and employees of the Iowa Department of Agriculture and Land Stewardship, citizens of
the State of Iowa and other parties to whom the Department may report. This report is not
intended to be and should not be used by anyone other than these specified parties.
We would like to acknowledge the many courtesies and assistance extended to us by
personnel of the Department during the course of our audits. Should you have questions
concerning any of the above matters, we shall be pleased to discuss them with you at your
convenience. Individuals who participated in our audits of the Department are listed on page 9
and they are available to discuss these matters with you.

MARY MOSIMAN, CPA
Auditor of State
cc:

WARREN G. JENKINS, CPA
Chief Deputy Auditor of State

Honorable Terry E. Branstad, Governor
David Roederer, Director, Department of Management
Glen P. Dickinson, Director, Legislative Services Agency

3

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

Findings Reported in the State’s Single Audit Report:
No matters were noted.
Findings Reported in the State’s Report on Internal Control:
No matters were noted.
Other Findings Related to Internal Control:
(1) Segregation of Duties – To safeguard assets, duties should be segregated to prevent an
individual employee from handling duties which are incompatible. This segregation of
duties helps to prevent losses from employee error or dishonesty. Also, an initial listing
of receipts is not prepared by the mail opener and compared to the deposit by an
independent person. In addition, a reconciliation of receipts deposited to bureau records
is not performed to determine the appropriate fees were received and deposited.
Additionally, several Bureaus utilize databases to record and track receipts. However,
database access for certain Bureaus is not controlled.
In the Dairy Bureau, the Weights and Measures Bureau, the Commercial Feed and
Fertilizer Bureau and the Animal Industry Bureau, one person is responsible for opening
mail, recording receipts in the Bureau’s database, preparing the deposit and taking the
deposit to Accounting. In addition, these Bureaus do not prepare an initial listing of
receipts and do not perform a reconciliation to determine if the appropriate fees were
remitted and deposited.
In the Weights and Measures Bureau, the person who collects the fees is also responsible
for mailing renewal notices for licenses, updating the outstanding license listing and
mailing past due notices. The Bureau does not perform a reconciliation of licenses
issued to fees collected.
In the Pesticide Bureau, the mail opener does not prepare an initial listing of receipts. The
individual who collects fees for licenses, certifications and product registrations is
responsible for mailing licenses, certifications and product registrations and is
responsible for mailing renewal forms.
The Bureau does not reconcile licenses,
certifications and product registrations issued to fees collected. Additionally, for dealer
license renewals and product registration renewals based on gross retail sales, the
bureau does not verify annual gross retail sales, at least on a test basis.
Databases should have controls to ensure proper collection and mitigate the risk of
human error. The Weights and Measures Bureau and the Dairy Bureau maintain a
database without adequate controls to ensure accuracy.
Recommendation – The Department should review procedures in the Bureaus to ensure
duties are segregated to the extent possible. An initial listing of receipts should be
prepared and compared to the deposit by an independent person. In addition, the
Bureaus should consider reconciling collections to licenses issued as well as
implementing a procedure to ensure the fees collected are remitted and deposited.
Access to the Bureaus’ databases should be limited to the individuals who need access
to perform their duties. Also, data entered in the databases should be reviewed to
ensure accuracy. The Pesticide Bureau should consider verifying gross retail sales
information, at least on a test basis, for dealer license renewals and product registration
renewals.
4

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

Response – Funding limitations constrict full segregation of duties; however the
Department has made changes to some of the departmental processes which will help
further segregate some of the duties discussed in this comment. The incoming mail is
now being opened by the Department receptionist for many of the Bureaus. In addition,
the Department has implemented a new desktop deposit system for several Bureaus and
has nearly fully implemented this system in State fiscal year 2014. This new deposit
system allows for deposits to be completed in an overnight process rather than a weekly
deposit of fees. This deposit system helps to close the loop between the program staff
and accounting staff. When the fee batches are sent to accounting, a copy of the I/3
cash receipt is returned to the individual Bureaus with a copy of its batch spreadsheet.
This allows for better reconciliation between the Bureaus and Accounting.
Segregation of duties is continually reviewed to determine if any further segregation can be
accomplished for the duties discussed.
The Department has several outdated licensing databases and has been exploring new
licensing software, but has found it cost prohibitive, with an estimated cost in excess of
$2 million, and has been unable to identify a funding source to implement a new system.
The Department will review the security functions of current databases to determine if it
is cost effective to add additional security features. The Department will also continue to
explore new database systems.
The Department has begun using inspection software called WinWam, which was
specifically designed for Weights and Measures and is used nationwide in more than half
of all states. The Department utilizes this software in several of the Bureaus which have
inspection staff.
Conclusion – Response accepted.
(2) Timely Deposit of Receipts – Proper internal control procedures require receipts be
deposited in a timely manner. Checks should not be held longer than ten business
days.
In the Commercial Feed and Fertilizer Bureau and the Weights and Measures Bureau,
receipts are regularly held for more than ten business days before being sent to
Accounting for deposit.
Recommendation – The Department should advise the Bureaus to remit checks to
Accounting soon after receipt so checks can be deposited in a timely manner.
Response – As mentioned in Finding #1, the Department has implemented a new deposit
system in which shortens the amount of time a check is held within the Department
before it is deposited. Both the Feed and Fertilizer and the Weights and Measures
Bureaus utilize this desktop deposit system, which shortens the amount of time checks
are held within the Bureaus before being deposited. Annually, all staff who deposit
funds are reminded of the importance of these timely deposits. We will continue to
stress the importance of this with staff who handle funds. Additionally, during heavier
fee collection periods, the Department has begun utilizing temporary staffing to assist in
the various Bureaus to help with data entry and processing of license forms so full-time
staff can ensure funds are being processed in a timely manner.
Conclusion – Response accepted.

5

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

(3) Written Policies and Quality Control – The Weights and Measures Bureau is responsible
for its own receipts and billings. As noted in the review report issued March 23, 2011,
the Bureau has no formal written procedures for the collection, posting and depositing of
receipts. Additionally, there is no documentation for quality control reviews performed
for inspections of weighing and measuring devices.
Recommendation – The Bureau should develop written policies and procedures to address
its receipt process and document quality control reviews.
Response – The Weights and Measurers Bureau does have a procedure for collection,
posting and depositing of receipts. This procedure has since been reviewed with the
auditors after the fiscal year 2014 audit testing was completed.
Upon further review, the Department found the initial response to the recommendation in
the Weights and Measures Bureau performance audit regarding quality control reviews
is not able to be implemented as previously intended. Instead, quality control reviews
are done by the Bureau Chief by reviewing the work of Bureau staff through weekly
itineraries and annual performance reviews.
Conclusion – Response accepted.
Findings Related to Statutory Requirements and Other Matters:
(1) Iowa Code Compliance – The Department was not in compliance with the following
provisions of the Code of Iowa during the year ended June 30, 2013:
(a) Targeted Small Businesses – Chapter 73.16 requires departments with
purchasing authority to issue electronic bid notices for distribution to the
targeted small business website for solicitation of bids for procurement of
equipment, supplies and services.
Some Bureaus submit bid notices to the targeted small business website on a
regular basis, but others do not.
Compliance is not consistent for the
Department as a whole.
(b) Office of Renewable Fuels and Coproducts – Chapter 159A.6 created the Office of
Renewable Fuels and Coproducts within the Department. The Office’s chief
purpose is to further the production and consumption of ethanol fuel in the
state.
Due to lack of funding through fiscal year 2013, the program has not been
operational.
(c)

Weights and Measures Annual Inspections and Inspection Fees – Chapters 214.3,
214.11 and 215.4 require the Department to collect a license inspection fee for
all commercial weighing and measuring devices in the state and perform annual
inspections of all licensed motor fuel pumps to determine the accuracy of the
pumps’ measuring mechanisms. The Department charges fees for inspections,
but fees are not collected for all commercial weighing and measuring devices
because the Department does not maintain an accurate inventory of devices in
the state. Also, the $9 recheck fee for multiple rechecks is not consistently
collected. In addition, the Department performs inspections for permanent
licensed motor fuel pumps, which are tracked in WinWam, but not all
inspections are being performed annually per the Code of Iowa.
The
Department does not perform inspections of bulk fuel or LP trucks and motor
fuel pumps located on trucks.
6

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

(d) Licensing Exam – Chapter 215.23 requires the Department to conduct a
qualifying examination prior to issuing a commercial weighing and measuring
servicer license.
The Department does not have or administer a qualifying examination.
(e)

Moisture Meter Inspections – Chapter 215A.2 requires all moisture meters be
inspected annually.
The Department subcontracts the inspections to a third party, but does not verify
the subcontractor has completed the inspections.

(f)

Pesticide Bureau – As noted in our report issued March 19, 2012, the costs of
operating the Bureau exceeded the fees remaining after the required transfers
and the fees have not been changed since 1989 or before. The Bureau allows
private applicators to use continuing instruction earned after their certification
has expired as part of the 6 hours of required continuing instruction. This
appears to conflict with Chapter 206.5 of the Code of Iowa. Additionally,
although required by Iowa Administrative Code 21-Chapter 45.101, the
Commercial Pesticide Applicator Peer Review Panel did not meet during fiscal
year 2013.

Recommendation – The Department should take the necessary steps to comply with the
Code of Iowa or seek repeal of outdated Code sections.
Responses (a) The vast majority of the Department’s procurements are from competitively bid
State contracts, exempt from this procedure. However, the Department will
continue to work to address the issues raised in this comment and better
document our use of the TSB posting website.
(b) Comment accepted.
(c)

Each of these items was addressed in the performance audit report issued March
23, 2011. The Department is doing the best it can, given the resource
constraints it presently operates under. The Department is doing extensive
monitoring on the work being completed by each inspector in an effort to ensure
all Code required inspections are being completed in the recommended
timeframe and continues to make progress towards addressing the suggestions
in the Weights and Measures performance audit report. The inventory listing is
an ever-changing listing and we are only able to keep it up to date as we are
made aware of changes at locations. The Department does test LP meters and
continues to make progress towards regular testing as required by Code.

(d) The annual fee is currently only $5 for the commercial weighing and measuring
servicer license and, therefore, does not cover the cost to conduct an exam. The
National Institute of Standards and Technology (NIST) has created a national
exam. However, the Department feels it would require re-exams for services,
which would cause increased costs. Iowa will communicate with neighboring
states and reexamine our options.

7

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

(e)

The Department verifies the subcontractor has completed inspections by doing a
review of the performance report provided by the subcontractor at the end of
the performance period and comparing it to the number of licensed meters in
the State of Iowa to verify reasonableness. In addition, the Department is in
regular contact with the licensees and would be notified if inspections were not
being completed.

(f)

Changes to the Administrative Rules for private applicator certification would
affect a large number of people (23,000+), existing Provider programs, the State
Plan for Certification and take longer than a year to go into effect. The Pesticide
and Fertilizer Advisory Committee listing was updated and the Committee met
in fiscal year 2013. The Commercial Pesticide Applicator PEER Review Panel
did not meet in fiscal year 2012-2013 due to hiring a new Bureau Chief and
staff medical leave. Efforts have been made to update the Commercial Pesticide
Applicator PEER Review Panel and a meeting will be scheduled following the
2014 crop year.

Conclusion – Responses accepted.

8

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2013

Staff:
Questions or requests for further assistance should be directed to:
Deborah J. Moser, CPA, Manager
Jenny M. Podrebarac, Senior Auditor II
Andrew E. Nielsen, CPA, Deputy Auditor of State
Other individuals who participated in the audits include:
Jamie T. Reuter, Senior Auditor
Ryan D. Baker, Staff Auditor
Tracey L. Gerrish, Staff Auditor
Benjamin P. James, Staff Auditor
Daniel J. Mikels, Staff Auditor
Elissa R. Olson, Staff Auditor
Kaylynn D. Short, Staff Auditor
Kayley R. Alexander, Assistant Auditor
Amanda L. Burt, Assistant Auditor
Ramona E. Daly, Assistant Auditor
Luke H. Holman, Assistant Auditor
Melissa E. Janssen, Assistant Auditor
Trent M. Mussmann, Assistant Auditor
Benjamin R. Salow, Assistant Auditor
Miranda A. Shipman, Assistant Auditor
Janelle R. Wieland, CPA, Assistant Auditor

9