<p>For SIGEN, the ONCCA Should "Increase the Controls" On Dairy Compensation<br /> It is because of the difficulties in determining whether the beneficiary companies export their products or if they sell them in the domestic market. Furthermore, although the Office states that they inspect the affidavits presented by the firms to access the subsidies, these controls "do not always" appear on the records. There are also "weaknesses in the monitoring" of registration documents: thus, the dependence claims for steps that have already been completed and for pending tariffs although they are listed as paid. The entity has no internal audit unit.</p> <p> </p>
According to the Office of Comptroller General (SIGEN, for its acronym in Spanish), it is necessary that the National Office of Agricultural Commercial Control (ONCCA) "increase controls" on compensation granted to dairy producers, "through increased inspections, including checks through other control agencies, "that corroborate where products are consumed.
The work of the audit found "difficulties to verify exports (dairy) of the matched companies" using information from other agencies such as the National Health Service and Food Quality (SENASA)", in order to control that compensated merchandise are destined only for domestic consumption.
In this regard, the report says that "the National Service Systems are not utilized" like the "manual controls with materials provided by SENASA."
For this grant, the producers of the activities covered by Salary Schedules must enroll in the records of the ONCCA, presenting documents in an affidavit that the entity must then confirm.
The SIGEN analyzed the records of granting compensation to the dairy industry and warned that "although the ONCCA conducts inspections in order to verify what they declared, it does not always arise from the existence of inspection records" to verify the effective implementation of the review. "This situation is worrying," says the Office of the Comptroller General, taking into account "the significance of the amounts granted as compensation from affidavits," says the report, which analyzed the period January from July 2007 through 2008, and was approved this year.
In addition, "deficiencies in supervision" of the registration documents were detected. This situation was observed in two cases where ONCCA enjoined different companies by the lack of requirements, although firms had their formalities in order, as well as the payment of outstanding fees, "which were attached" in the files.
As for the internal workings of the ONCCA, the Compensation Area of dairy carries out the "registration form of dairy farmers,” "it verifies compliance with the formal requirements that the producer presents to achieve the compensation and authorizes payment." For the SIGEN, this fact "implies a possible conflict of interests and therefore missing controls.”
In addition, the Audit noted that, at the closing of their work, Decree 1067 created by the ONCCA in 2005 had not yet been regulated, even though it was established that the regulation had "60 days to put it into force." They added that the dependence "has no formally approved organizational structure" which "affects the operation of the areas analyzed weakening their internal control."
Even, regarding the "lack of an Internal Audit Unit (UAI)," the SIGEN believes that "the lack of an audit instance in different areas of the organization, and especially with regard to the granting of compensation and the significant amounts involved, which represent a high risk of internal control to any irregularities or mistakes in the different processes."
However, the Watchdog recognizes that "although certain essential tasks (such as year-end and the investment account) have been in the UAI head of the Ministry of Economy and Production, they cannot help but notice the need to have their own UAI" at the National Bureau of Agricultural Trade Control.