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

Mary Mosiman, CPA
Auditor of State

Facsimile (515) 242-6134

NEWS RELEASE
FOR RELEASE

August 26, 2015

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, 2014.
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/1560-0090-BR00.pdf.
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  REPORT OF RECOMMENDATIONS TO THE
IOWA DEPARTMENT OF AGRICULTURE AND LAND
STEWARDSHIP
JUNE 30, 2014

 Office of 

AUDITOR
OF STATE
State Capitol Building  Des Moines, Iowa



Mary Mosiman, CPA
Auditor of State

 1560-0090-BR00

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

Mary Mosiman, CPA
Auditor of State

Facsimile (515) 242-6134

August 20, 2015

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, 2014.
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 7
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, 2014

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 Finding Related to Internal Control:
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. Although an initial listing of
receipts is prepared by most bureaus, it is not 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 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. These Bureaus do not perform
an independent reconciliation of collections to deposits. Additionally, they do not prepare a
reconciliation of Bureau records to determine whether the appropriate fees were received 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 reconciles licenses, certifications and product
registrations issued to fees collected, but the reconciliation is not reviewed by an independent
person. 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. The initial listing of receipts should be compared to the
deposits by an independent person. In addition, the Bureaus should consider reconciling
collections per the Accounting Bureau to licenses issued to determine whether the
appropriate fees were received 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, 2014

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 2015. 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
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.
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, 2014:
(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) 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.
(c) 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.
(d) 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 2014.

5

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2014

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)

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. In communicating with other states to
determine how they administer tests, Iowa is now considering options to have an
outside vendor administer the exam.

c)

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.

d)

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
FY2013 and FY2014. 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 were made in FY2014 to update the Commercial Pesticide
Applicator PEER Review Panel and a meeting was held after the 2014 crop year
(crop year runs 10/1-9/30), due to the seasonal nature of panel members’ work
and schedule availability.

Conclusion – Responses accepted.

6

 Report of Recommendations to the
Iowa Department of Agriculture and Land Stewardship
June 30, 2014

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:
Benjamin P. James, CPA, Staff Auditor
Daniel J. Mikels, Staff Auditor
Miranda A. Shipman, Staff Auditor
Janell R. Wieland, CPA, Staff Auditor
Daniel S. Nilsen, Assistant Auditor
Jenna M. Paysen, Assistant Auditor
Ryan P. Swanson, Assistant Auditor
Kristin R. Volkens, Assistant Auditor
Stormi S. Peterson, Audit Intern

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