    Mad Cow Disease: Improvements in the Animal Feed Ban and Other
    Regulatory Areas Would Strengthen U.S. Prevention Efforts
    (25-JAN-02, GAO-02-183).

    Bovine spongiform encephalopathy (BSE), also known as mad cow
    disease, has been found in cattle in 23 countries. Countries with
    BSE have suffered large economic losses because of declines in
    both beef exports and domestic beef sales. 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 into
    the United States. GAO found that FDA has not acted promptly to
    force firms to keep prohibited proteins out of cattle feed and to
    label animal feed that cannot be fed to cattle. FDA's data on
    inspections are severely flawed, and FDA is unaware of the full
    extent of industry compliance. If BSE was discovered in U.S.
    cattle, many consumers might refuse to buy domestic beef; beef
    exports could decline dramatically as could sales in related
    industries, such as hamburger chains and frozen dinner
    manufacturers. Furthermore, some people might develop mad cow
    disease if infected cattle were to enter the food supply. The
    United States acted as many as five years earlier than did other
    countries to impose controls over imports of animals and animal
    feed ingredients from countries that had experienced mad cow
    disease. Similarly, U.S. surveillance efforts to test cattle
    brains for mad cow disease met internationally recommended
    testing targets earlier than did other countries. However, the
    United States' feed ban is more permissive than that of other
    countries, allowing 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, cattle brains and other central
    nervous system tissue can be sold as human food.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-02-183
        ACCNO:   A02630
      TITLE:     Mad Cow Disease: Improvements in the Animal Feed Ban and
    Other Regulatory Areas Would Strengthen U.S. Prevention Efforts
         DATE:   01/25/2002
      SUBJECT:   Animal diseases
    	     Cattle
    	     Consumer protection
    	     Contaminated foods
    	     Feed additives
    	     Food industry
    	     Food inspection
    	     Health hazards
    	     International economic relations
    	     International trade regulation
    	     Bovine Spongiform Encephalopathy
    	     Variant Creutzfeldt-Jacob Disease

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    GAO-02-183

    United States General Accounting Office

    GAO

    Report to Congressional Requesters

    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

    1

                                                                         3 4 10

    29

    33 36 37 38

    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 21 Table 2: FDA Feed Ban
    Inspection and Compliance Information 23 Table 3: BSE Level of Risk Assessed
    for 49 Countries by European

    Commission Experts 34

    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

                                        6 8

    12

    13

    16 17 18 30

    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
    vCJD variant 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.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.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.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

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

    2Independent 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.

    3Evaluation 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.

    Results in Brief

    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.

    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,4

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

    which causes normal molecules of the same protein in the brain to become
    malformed.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.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.

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

    6According 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.

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

    aBSE found only in imported cattle.

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

    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.7 As of November 2001, 112 people have had
    vCJD, of whom just over 100 had died, nearly all in the United Kingdom.8
    Most vCJD victims

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

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

    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

    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.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,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

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

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

    throughout their life spans.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
    Union12- has had its Scientific Steering Committee13conduct 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.

    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

    Weaknesses Exist in Federal BSE Prevention and Detection Efforts

    11R. 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

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

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

    eat foods that contain central nervous system tissue from a diseased animal.

    BSE-Risk Products May Since 1989 and as recently as 2001, USDA and FDA have
    identified Have Entered the Country countries with BSE or at risk for BSE
    and issued import restrictions on before BSE Emerged in the cattle and other
    ruminants, and on products containing cattle- and

    ruminant-derived material from those countries. Figure 3 presents aExporting
    Countries or timeline of the actions taken by USDA and FDA during that
    period.through Gaps in Import

    Controls

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

    Source: GAO analysis of USDA and FDA import restrictions.

    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

                             Source: USDA regulations.

    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 1989.14 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,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

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

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

    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

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

    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

    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.

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

    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.

    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.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

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

    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.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.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.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.

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

    18Nonambulatory 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.

    19USDA 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.

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

      Fiscal year Brain samples tested 1994 1995 1996 1997 1998 1999 2000 2001

                Number from
                nonambulatory
                  cattlea        199 223 266  219 344  651 1,895 4,464
                Number from
             ambulatory cattle   296 242 318  636 387  342   414   406
                 Total brain
                  samples
                collected and
                   tested        495 465 584  855 731  993 2,309 4,870

    aAccording 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.

    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.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

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

    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,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.

    21FDA 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.

            Table 2: FDA Feed Ban Inspection and Compliance Information

    FDA's estimate of the universe of this type of firm

    Number of firms inspected

    Number of firms out of complianceType of firm
        4,237 81

    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.

    aFeed mills that must be licensed by FDA because they handle restricted
    medicines.

    bOther firms include feed blenders, on-farm mills, and feed haulers.

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

    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 1999.22 The first
    letter was issued in May 1999-21 months after inspections began.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

    22A 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.

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

    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.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

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

    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.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.

    25USDA 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.

    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.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.

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

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

    aBeef  packers slaughter cattle and other  animals and package carcasses and
    large cuts for further processing.

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

    Source: GAO analysis.

    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.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.28,29 Any health

    27Using 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.

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

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

    implications would translate into medical treatment and related financial
    and economic costs, such as lost productivity.

    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.

    29FDA 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.

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

    Number of
    countries
    (percent of
    total assessed) European Union countries Other countries

    Highly unlikely - Level I 16 (32.7) Argentina, Australia, Botswana, Brazil,
    Chile, Costa Rica, El Salvador, Namibia, Nicaragua, Norway, New Zealand,
    Panama, Paraguay, Singapore, Swaziland, Uruguay

    Unlikely but not excluded - Level II 12 (24.5) Austria, Finland, Sweden
    Canada, Colombia, India, Kenya, Mauritius, Nigeria, Pakistan, Slovenia,
    United States

     Likely but not confirmed                                   Albania, Cyprus, Czech
         or confirmed at       19 (38.8)   Belgium, Denmark,    Republic,

     a lower level - Level III                 Germany, France,          Estonia, Hungary,
                                                      Ireland,         Lithuania, Poland,
                                           Italy, Luxembourg,   Romania, Slovakia,
                                                                Switzerland
                                           Netherlands, Spain
       Confirmed at a higher                    United Kingdom,
         level - Level IV       2 (4.1)               Portugal

    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.

    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.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 1994.31 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,32 had started or
    planned to start targeting cattle that die on farms in their surveillance
    testing.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.

    30In 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.

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

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

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

    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.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.35

    BSE and vCJD are devastating, incurable, inevitably fatal diseases. If they
    enter the country, they can bring dire economic consequences to the cattle

                                     Conclusions

    and beef industries. Therefore, forceful federal prevention efforts are

    34FDA 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.

    35Special 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.

    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.

    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:

    Recommendations for Executive Action

    * 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

                          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

    Appendix I: Scope and Methodology

    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.

    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.

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

                                   See comment 1.

                                   See comment 2.

                                   See comment 3.

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

                                   See comment 4.

                                   See comment 5.

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

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

                                   See comment 6.

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

                                   See comment 7.

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

                                   See comment 8.

                                   See comment 9.

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

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

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

    GAO Comments

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

    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

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

    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

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

    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.

    Appendix III: Comments from the Department of Agriculture

                                   See comment 1.

             Appendix III: Comments from the Department of Agriculture

                                   See comment 2.

                                   See comment 3.

    Appendix III: Comments from the Department of Agriculture

    GAO Comments

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

    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.

    Appendix IV: Comments from the Customs Service

    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.

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