Food Safety: Overview of Food Safety and Inspection Service and Food and
Drug Administration Expenditures (Testimony, 09/20/2000,
GAO/T-RCED-00-300).

Pursuant to a congressional request, GAO discussed food safety
expenditures by the Food Safety and Inspection Service (FSIS) and the
Food and Drug Administration (FDA), focusing on: (1) the amount of
resources available to FSIS and FDA for food safety activities; (2) how
these resources were expended by the agencies; and (3) how much the
states, territories, and District of Columbia expended on food safety
activities.

GAO noted that: (1) FSIS and FDA in aggregate expended almost $1 billion
in fiscal year (FY) 1998 and again in FY 1999 on food safety activities;
(2) in FY 1999, FSIS expended about $712 million, of which 16 percent
was for headquarters activities and 84 percent for field activities
associated with overseeing more than 6,000 meat, poultry, egg product
and import establishments; (3) FDA expended about $260 million on food
safety activities in FY 1999, of which 44 percent was for headquarters
activities and 56 percent for field activities associated with
overseeing an estimated 57,000 food establishments and over 9,000 animal
drug and feed establishments, and ensuring the safety of FDA-regulated
imported foods; and (4) GAO found similar expenditures for FSIS and FDA
in FY 1998.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-00-300
     TITLE:  Food Safety: Overview of Food Safety and Inspection
	     Service and Food and Drug Administration Expenditures
      DATE:  09/20/2000
   SUBJECT:  Budget outlays
	     Safety regulation
	     Consumer protection
	     Health hazards
	     Food inspection
	     Meat inspection
	     Poultry inspection
	     Contaminated foods
IDENTIFIER:  FDA Foods Program
	     FDA Animal Drugs and Feeds Program

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GAO/T-RCED-00-300

Mr. Chairman and Members of the Committee:

We are pleased to be here today to provide an overview of food safety
expenditures by the U.S. Department of Agriculture's (USDA) Food Safety and
Inspection Service (FSIS) and the Department of Health and Human Service's
Food and Drug Administration (FDA). As you know, FSIS and FDA are the two
agencies with primary responsibility for food safety in the United States.
FSIS is responsible for ensuring that meat, poultry, and processed egg
products moving in interstate and foreign commerce are safe, wholesome, and
correctly marked, labeled and packaged. FDA is responsible for ensuring that
(1) all foods moving in interstate and foreign commerce, except those under
FSIS' jurisdiction, are safe, wholesome and properly labeled; and (2) all
animal drugs and feeds are safe, properly labeled, and produce no human
health hazards when used in food-producing animals.

As this Committee and Senator Hagel requested, we are conducting a review to
determine, for fiscal years 1998 and 1999, the amount of resources available
to FSIS and FDA for food safety activities, how these resources were
expended by the agencies, and how much the states, territories, and District
of Columbia expended on food safety activities. My testimony today presents
an overview of the results of work to date on the federal agencies'
expenditures. We cannot yet report on nonfederal expenditures because our
surveys of the states, territories, and the District of Columbia are still
ongoing.

In summary, FSIS and FDA in aggregate expended almost $1 billion in fiscal
year 1998 and again in fiscal year 1999 on food safety activities. In fiscal
year 1999, FSIS expended about $712 million, of which 16 percent was for
headquarters activities and 84 percent for field activities associated with
overseeing more than 6,000 meat, poultry, egg product and import
establishments. FDA expended about $260 million on food safety activities in
fiscal year 1999, of which 44 percent was for headquarters activities and 56
percent for field activities associated with overseeing an estimated 57,000
food establishments and over 9,000 animal drug and feed establishments, and
ensuring the safety of FDA-regulated imported foods. We found similar
expenditures for FSIS and FDA in fiscal year 1998.

Background

Foodborne illness in the United States is an extensive and expensive
problem. The Centers for Disease Control and Prevention estimates that
unsafe foods cause as many as 76 million illnesses, 325,000
hospitalizations, and 5,000 deaths annually. In terms of medical costs and
productivity losses, foodborne illnesses cost the nation between
$7 billion and $37 billion annually, according to USDA's estimates.

According to the Centers for Disease Control and Prevention, almost 12,000
cases of foodborne illness were reported in 1997, the latest year for which
data are available. Of the approximately 7,000 cases in which the food
source for the illness was known, about 85 percent were associated with food
products that are regulated by FDA, such as fish, shellfish, fruits,
vegetables, and salads. The remaining 15 percent of illnesses were
associated with food products, such as meat and poultry, which fall under
FSIS' jurisdiction.

While 12 different federal agencies located within six federal departments
conduct food safety activities, FSIS and FDA have primary regulatory
responsibility for ensuring the safety of the food supply. FSIS has
responsibility for ensuring the safety of meat, poultry, and processed egg
products. Under the governing meat, poultry, and egg products inspection
acts, FSIS, in effect, preapproves products under its jurisdiction before
they are marketed. As such, FSIS operates under a mandated continuous
inspection frequency for meat and poultry slaughter plants and egg
processing plants, and inspects meat and poultry processing plants, such as
those that run deboning and canning operations, daily. FSIS marks all
inspected and approved meat, poultry, and egg products with a USDA
inspection stamp. Without this marking the products cannot be legally
marketed.

FDA is responsible for ensuring the safety of a broad range of products,
including foods, animal drugs and feeds, human medicines and vaccines,
radiation-emitting devices, medical devices, blood and blood products, and
cosmetics. With regard to food safety, FDA is responsible under the Federal
Food, Drug, and Cosmetic Act for ensuring that domestic and imported food
products (except meat, poultry, and processed egg products) are safe,
wholesome, and properly labeled. In administering the act, which generally
follows the regulatory approach of allowing food products to enter the
market without preapproval, FDA inspects domestic establishments that
manufacture, process, pack or hold food, and inspects and tests imported
food products. However, the act does not mandate or specify inspection
frequencies. As such, FDA inspects the more than 57,000 food establishments
under its jurisdiction about once every 5 years, on average, and according
to FDA officials, inspected less than 1 percent of the 3.7 million imported
food entries in fiscal year 1999. Products under FDA's jurisdiction do not
require, and FDA does not place, any inspection mark on the products before
they can be legally marketed. FDA is also responsible for maintaining
surveillance of all animal drugs and feeds to ensure that they are safe and
properly labeled, and produce no human health hazards when used in
food-producing animals.

States, territories, and the District of Columbia also have food safety
responsibilities and operate agencies that regulate and enforce their own
food safety laws to ensure the safety of foods produced, processed, and/or
sold within their borders. These responsibilities generally lie within the
departments of agriculture and health, and may involve others, such as state
environmental protection agencies or county health departments. States and
territories may also perform inspections for FSIS or FDA under contract or
partnership agreements and report their inspection results to the federal
agencies.

FSIS' Food Safety Expenditures

FSIS expended about $678 million and $712 million in fiscal years 1998 and
1999, respectively, on food safety activities. FSIS' food safety activities
can be separated into two major components; operations conducted in the
field by district offices or in direct support of those district offices,
and operations conducted primarily in headquarters offices. As shown in
figure 1, about 84 percent of FSIS' fiscal year 1999 expenditures were for
field activities, and 16 percent were for headquarters office activities.
Each activity's proportion of the total expenditures did not vary by more
than 1 percent from fiscal year 1998 through fiscal year 1999. (See app. I
for detailed information on expenditures, staff years, and activities for
fiscal years 1998 and 1999.)

Figure 1: FSIS' Expenditures for Field and Headquarters Activities, Fiscal
Year 1999

[0x01 graphic]

Note: Percentages do not add to 100 because of rounding.

In aggregate, FSIS' field activities accounted for $600 million in fiscal
year 1999, or 84 percent of total agency expenditures. Inspections at
slaughter, processing, and import establishments accounted for $486 million,
or 68 percent, of total expenditures; and field office administration,
supervision and compliance activities accounted for
$34.1 million, or 5 percent of total expenditures. In addition, the Office
of Field Operations, the Washington D.C. headquarters office that manages
field activities, accounted for $79.9 million, or 11 percent of total
expenditures. The largest expenditure of the field operations office was for
grants to states for inspection activities, accounting for $44.4 million, or
about 57 percent of its total expenditures in fiscal year 1999. This office
also funds the Technical Service Center, located in Omaha, Nebraska, which
serves as the agency's center for technical assistance and guidance for
field operations personnel and industry and conducts reviews of domestic and
foreign inspection programs.

In aggregate, FSIS' headquarters-based activities accounted for $112 million
in fiscal year 1999, or 16 percent of total agency expenditures. FSIS'
headquarters food safety activities are conducted by four officesmanagement;
public health and science; policy, program development, and evaluation; and
the office of the administrator. Specifically:

   * The Office of Management accounted for about $61.8 million, or 9
     percent, of total expenditures. The management office is responsible
     for providing centralized administrative and support services to all
     other FSIS program offices, including functions such as human resource
     management, strategic planning, procurement, and financial management.
   * The Office of Public Health and Science accounted for about $25.2
     million, or 4 percent, of total expenditures. The office is responsible
     for conducting scientific analysis, providing scientific advice and
     data, and making recommendations involving all public health and
     science concerns relating to products under FSIS' jurisdiction. This
     includes mission activities such as epidemiology and risk assessment,
     surveillance and response to food safety emergencies. Almost half or
     $16.6 million of its expenditures were for laboratory analyses by the
     agency's three field laboratories.
   * The Office of Policy, Program Development, and Evaluation accounted for
     about $18.9 million, or 3 percent, of total expenditures. The policy
     and program office is responsible for, among other things, coordinating
     activities, such as developing and recommending domestic and
     international policies for FSIS; reviewing product process standards;
     labeling; and developing and evaluating inspection programs.
   * The Office of the Administrator accounted for about $6.1 million, or 1
     percent, of total expenditures. The office is responsible for
     management of agency activities such as public affairs, food safety
     education, coordination of U.S. involvement in international
     standard-setting for food safety, and maintaining liaison with trade
     organizations.

FDA's Food Safety Expenditures

FDA expended about $231 million and $260 million in fiscal years 1998 and
1999, respectively, on food safety activities. These expenditures represent
the combined activities of the three FDA Centers with food safety
responsibilities: the Center for Food Safety and Applied Nutrition, the
Center for Veterinary Medicine, and, the National Center for Toxicological
Research, as well as the field activities conducted for these centers by the
Office of Regulatory Affairs. As with FSIS, FDA's food safety activities can
be separated into two major components: operations conducted in the field by
district offices or in direct support of those district offices, and
operations conducted primarily in headquarters offices. As shown in figure
2, about 56 percent of FDA's fiscal year 1999 expenditures were for field
activities, and about 44 percent were for headquarters office activities.
Each activity's proportion of total expenditures did not vary by more than 1
percent from fiscal year 1998 to 1999. (See app. II for detailed information
on fiscal year 1998 and 1999 expenditures, staff years, and activities.)

Figure 2: FDA's Expenditures for Field and Headquarters Activities, Fiscal
Year 1999

[0x01 graphic]

Legend:
ORA Office of Regulatory Affairs
CVM Center for Veterinary Medicine
CFSAN Center for Food Safety and Applied Nutrition

In aggregate, FDA's field activities accounted for $146 million in fiscal
year 1999, or 56 percent of total agency expenditures. FDA's Office of
Regulatory Affairs (ORA) is responsible for conducting field activities
designated by the centers. ORA's compliance, inspection, and laboratory
field staff manage, supervise, and conduct enforcement, compliance,
inspection, sample collection and analysis activities, as well as criminal
investigation, education and outreach activities. For fiscal year 1999, the
ORA-conducted field component of the Center for Food Safety and Applied
Nutrition's food safety activities accounted for $133.6 million in
expenditures and the ORA-conducted field component of the Center for
Veterinary Medicine's food safety activities accounted for $12.4 million in
expenditures.

In aggregate, headquarters-based activities accounted for $114 million in
fiscal year 1999, or 44 percent, of the agency's total food safety
expenditures. Specifically:

   * The Center for Food Safety and Applied Nutrition's headquarters
     component accounted for $88 million in fiscal year 1999, or 34 percent
     of total expenditures. The center operates FDA's Foods Program, which
     is responsible for ensuring that FDA-regulated food is safe, sanitary,
     wholesome, and honestly labeled. To achieve this goal, the center
     implements programs that address specific food safety concerns, such as
     food and color additives, infant formula, medical foods, and seafood.
     The center also engages in regulatory policy development and education
     and outreach activities, and manages federal/state cooperative
     programs. Food safety research and risk assessment accounted for the
     center's largest expenditures, about $32 million each year.

   * The Center for Veterinary Medicine's headquarters component accounted
     for $25.5 million in fiscal year 1999, or 10 percent of total
     expenditures. The center operates FDA's Animal Drugs and Feeds Program,
     which has primary goals of ensuring that only safe and effective animal
     drugs, feeds and feed additives are marketed, and that foods from
     animals that are administered drugs and food additives are safe for
     human consumption. The Center maintains surveillance over all animal
     drugs and feeds to minimize threats to human health. Premarket
     application review for new animal drugs accounted for the Center's
     largest headquarters expenditures, about $12.8 million.

   * The National Center for Toxicological Research, located in Jefferson,
     Arkansas, accounted for $578,000 in fiscal year 1999, or less than 1
     percent of total expenditures. The center's mission is to conduct
     peer-reviewed scientific research that provides the basis for FDA to
     make sound science-based regulatory decisions and to protect the public
     health through pre- and post-market surveillance. During fiscal years
     1998 and 1999, the center conducted research projects that contributed
     to FDA's food safety mission. It did not engage in field activities
     related to food safety.

- - - -

Mr. Chairman, this completes our prepared statement. We would be happy to
respond to any questions you or Members of the Committee may have.

Contact and Acknowledgement

For future contacts regarding this testimony, please contact Lawrence J.
Dyckman at (202) 512-5138. Individuals making key contributions to this
testimony were Keith Oleson, Brad Dobbins, Kathy Colgrove-Stone, and John
Nicholson.

Food Safety and Inspection Service's Food Safety Expenditures and Staff
Years, Fiscal Years 1998 and 1999

For fiscal years 1998 and 1999, the Food Safety and Inspection Service
(FSIS) expended about $677.8 and $712 million, respectively, for its food
safety activities. As shown in table 1, 84 percent of the expenditures were
for field office operation, compliance, and inspection activities, while the
remainder were expended for FSIS headquarters office activities. Each
activity's proportion of the total expenditures did not vary by more than 1
percent between the 2 fiscal years.

Table 1: FSIS' Expenditures and Staff Years for Food Safety Activities by
Office, Fiscal Years 1998 and 1999

Dollars in millions

 Office                   Expenditures (percent of      Staff Years (percent of
                          total)                        total)
                          1998           1999           1998            1999
 Field OperationsPlant
 Inspections              $463.4 (68)    $486 (68)      9,441 (85)      9,330 (85)
 Field OperationsDistrict
 Compliance, Supervision  35.4 (5)       34.1 (5)       521 (5)         517 (5)
 and Administration
 Field
 OperationsHeadquarters   69.1 (10)      79.9 (11)      222 (2)         211 (2)
 Field Operationssubtotal $567.9 (83)    $600 (84)      10,184 (92)     10,058 (92)
 HeadquartersManagement   62.7 (9)       61.8 (9)       406 (4)         382 (3)
 HeadquartersPublic Health
 and Science              23.9 (4)       25.2 (4)       254 (2)         281 (3)
 HeadquartersPolicy,
 Program Development and  18 (3)         18.9 (3)       149 (1)         162 (1)
 Evaluation
 HeadquartersAdministrator5.3 (1)        6.1 (1)        64 (1)          68 (1)
 Headquarters
 OperationsSubtotal       $109.9 (17)    $112 (16)      873 (8)         893 (8)
 Totala                   $677.8 (100)   $712 (100)     11,057 (100)    10,951 (100)

a:Totals may not add because of rounding.

FSIS' field activities include inspections of establishments under the
agency's jurisdiction and compliance work to ensure that the establishments
are following applicable regulations. Table 2 presents selected results from
FSIS' inspection and compliance field work.

Table 2: Number of Establishments Inspected by FSIS and Selected Compliance
Activities, Fiscal Years 1998 and 1999
 Activity                 1998                     1999
 Inspections
 Slaughter establishments 254                      262
 Processing
 establishments           4,297                    4,343
 Combination slaughter
 and processing           985                      968
 establishments
 State agreementsa        256                      254
 Import establishments    135                      129
 Egg product
 establishments           78                       75
 Total establishments
 inspected                6,005                    6,031
 Compliance activities
 Compliance reviews       26,176                   43,976
 Warnings issued          1,520                    2,778
 Suspensions for Hazard
 Analysis and Critical    77                       118
 Control Point violations

aFunded through FSIS' headquarters Office of Field Operations at a cost of
$40.6 million and $44.4 million in fiscal years 1998 and 1999, respectively.

Food and Drug Administration's Food Safety Expenditures and Staff Years,
Fiscal Years 1998 and 1999

For fiscal years 1998 and 1999, the Food and Drug Administration (FDA)
expended about $231.3 and $260 million, respectively, for its food safety
activities. As shown in table 3, about 56 percent of the expenditures were
for field office operation, compliance and inspection activities, while the
remainder were expended for FDA headquarters office activities. Each
activity's proportion of the total expenditures did not vary by more than 1
percent between the 2 fiscal years 1998 to 1999.

Table 3: FDA's Fiscal Year 1998 and 1999 Expenditures and Staff Years for
Food Safety Activities by Center, Fiscal Years 1998 and 1999

Dollars in millions

 Center            Expenditures (percent of       Staff Years (percent of
                   total)                         total)
                   1998            1999           1998           1999
 Field
 OperationsOffice
 of Regulatory
 Affairs/ Center   $116.2 (50)     $133.6 (51)    1,426 (57)     1,535 (59)
 for Food Safety
 and Applied
 Nutrition
 Field
 OperationsOffice
 of Regulatory
 Affairs/Center for12.5(5)         12.4 (5)       138 (5)        137 (5)
 Veterinary
 Medicine
 Field
 OperationsSubtotal128.7 (56)      146 (56)       1,564 (62)     1,672 (64)
 Headquarters
 OperationsCenter
 for Food Safety   78.3 (34)       88 (34)        733 (29)       721 (28)
 and Applied
 Nutrition
 Headquarters
 Operations -
 Center for        23.7 (10)       25.5 (10)      203 (8)        206 (8)
 Veterinary
 Medicine
 Headquarters
 OperationsNational
 Center for        .6 (<1)         .6 (<1)        4 (<1)         4 (<1)
 Toxicological
 Research
 Headquarters
 OperationsSubtotal$102.6 (44)     $114 (44)      940 (38)       931 (36)
 Totala            $231.3 (100)    $260 (100)     2,503 (100)    2,603 (100)

a:Totals may not add because of rounding.

FDA's field activities include inspections of establishments under the
agency's jurisdiction and analysis of product samples to ensure that the
products are in compliance with applicable regulations. Table 4 presents
selected results from FDA's inspection and sample analysis field work.

Table 4: Selected FDA Food Safety Inspection and Sample Analysis Activity,
Fiscal Years 1998 and 1999
 Activity                 1998                     1999
 Inspections
 Food importers           940                      765
 Domestic food
 establishmentsa          11,922                   14,680
 Feed establishmentsb     4,182                    3,128
 Total inspectionsc       17,044                   18,573
 Sample Analysis
 Domestic food samples    10,894                   9,335
 Import food samples      16,802                   15,439
 Feed samples             1,580                    1,784
 Total samples analyzed   29,276                   26,558

a:Includes state contract inspections that are funded by the Center for Food
Safety and Applied Nutrition at a cost of a little over $2 million each
year.

bIncludes state contract feed mill inspections that are funded by the Center
for Veterinary Medicine at a cost of $833,000 and $614,000 in fiscal years
1998 and 1999, respectively.

cAn individual importer, food or feed establishment may be inspected more
than once in a year.

(150296)

GAO has previously reported on food safety resources. See Food Safety:
Opportunities to Redirect Federal Resources and Funds Can Enhance
Effectiveness (GAO/RCED-98-224, August 6, 1998).

Reported data on foodborne illnesses and related deaths are incomplete and
may understate the extent of the problem. The Centers for Disease Control
uses reported illnesses, among other sources, to estimate the extent of
foodborne illnesses each year.

The 12 agencies are USDA's Animal and Plant Health Inspection Service, Grain
Inspection, Packers and Stockyards Administration, Agricultural Marketing
Service, Agricultural Research Service, and FSIS; HHS' Centers for Disease
Control and Prevention and FDA; the Department of the Treasury's U.S.
Customs Service and the Bureau of Tobacco, Alcohol and Firearms; the
Department of Commerce's National Marine Fisheries Service; the
Environmental Protection Agency, and the Federal Trade Commission. See Food
Safety: U.S. Needs a Single Agency to Administer a Unified, Risk-Based,
Inspection System (GAO/T-RCED-99-256) for information on food safety agency
roles and responsibilities.

The meat act regulates meat from cattle, swine, goats, sheep, and equines
(horses); the poultry act defines poultry as domesticated fowl, which FSIS
regulations define as chickens, turkeys, ducks, geese, and guineas. Egg
products are eggs removed from their shells for processing.

Both FDA and FSIS have implemented Hazard Analysis and Critical Control
Point (HACCP) systems that are designed to identify and control foodborne
hazards that are likely to occur. In December 1997 FDA required seafood
establishments to implement HACCP and in January 1998 FSIS began requiring
that meat and poultry establishments implement HACCP.

These figures exclude central agency support costs, which FDA is in the
process of determining.

1 GAO/T-RCED-00-300 FSIS and FDA Expenditures

Appendix I

Appendix II

  
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