Animal Welfare: USDA's Oversight of Dealers of Random Source Dogs and Cats Would Benefit from Additional Management Information and Analysis
Published: 2010-09-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: For decades, the public has been concerned that lost or stolen dogs and cats could be used in research. The U.S. Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS) is responsible for the licensing and oversight of dealers who provide animals for research. Random source Class B dealers--who generally obtain dogs and cats for research from individuals, pounds, and other dealers--have been the focus of this concern. GAO was asked to determine (1) the number of random source Class B dealers, (2) the extent to which APHIS conducts inspections of these dealers and verifies their records, and (3) the costs associated with APHIS's oversight of these dealers compared to other types of dealers. GAO reviewed the Animal Welfare Act (AWA); APHIS regulations and guidance; inspection reports; agency data, such as "traceback" data used to verify dogs and cats are not lost or stolen; and interviewed and reviewed documents from agency officials and other stakeholders.
section_title: What GAO Found
paragraphs: As of July 2010, nine Class B dealers were licensed by APHIS to sell random source dogs and cats for research. This number has not changed significantly since fiscal year 2005 but declined from over 100 dealers in the early 1990s. Random source dealers sold 3,139 animals to research facilities from November 2007 to November 2008--equivalent to about 3 percent of the dogs and cats used in research in fiscal year 2008. APHIS inspections have found numerous random source Class B dealer violations, such as the condition of animal housing and inadequate veterinary care, but APHIS has not completed all of its fiscal year 2009 tracebacks related to these dealers or analyzed traceback verification data to detect problems with the process. In reviewing all inspection reports for fiscal years 2007 through 2009, GAO found APHIS generally inspected, or attempted to inspect, each of these dealers at least four times a year, as directed. APHIS guidance directs inspectors to examine the condition of a dealer facility, examine the condition of the dogs and cats present, and review dealer records. Overall, 54 of the 156 inspection reports cited at least one dealer violation, and seven of the nine dealers had one or more violations. As of July 2010, several dealers were under further APHIS investigation due to repeated violations. To verify dealer records and help ensure dealers are not obtaining lost or stolen animals, APHIS attempted a total of 326 tracebacks in fiscal year 2009. Though APHIS has conducted tracebacks since fiscal year 1993, it did not compile traceback data until fiscal year 2009. As of June 2010, data showed APHIS successfully traced a dog or cat back to a legitimate source about 71 percent of the time. About 29 percent of tracebacks APHIS conducted during this period were either unsuccessful or had not been completed as of June 2010, as directed by agency guidance. Because APHIS does not analyze traceback data, it cannot systematically detect problems with tracebacks and take all available steps to ensure random source dealers obtain dogs and cats from legitimate sources. For example, without analyzing data, APHIS cannot know whether the same sellers or inspectors were consistently involved in late or incomplete tracebacks. According to APHIS officials, the agency does not collect cost information specific to its oversight of random source Class B dealers, or to any other class of dealer it inspects. Officials also said the agency does not currently have a mechanism to determine these costs. Federal internal control standards call for agencies to obtain such information for program oversight. For example, APHIS inspectors do not record their time by specific oversight activity or class of dealer. Without a methodology to collect and track costs associated with the oversight of these dealers, and others APHIS inspects, APHIS management cannot identify trends or deficiencies requiring its attention. Furthermore, management cannot develop a business case to change its oversight program, if needed, to more effectively and efficiently use available resources.
section_title: What GAO Recommends
paragraphs: GAO recommends that USDA (1) improve its analysis and use of the traceback information it collects for random source Class B dealers and (2) develop a methodology to collect and track the oversight costs of each class of dealer and others APHIS inspects. USDA agreed with GAO's recommendations and noted specific actions it will take to implement them.

section_title: Letter
paragraphs: Many medical advances that enhance the lives of humans originate from  animal studies. For decades, however, the public has been concerned that  dogs and cats used in research could be treated inhumanely and that lost  or stolen pets could be sold for research. Adding to this concern has been  media attention focused on violations by a few dealers who obtained dogs  and cats from sources such as pounds and shelters and sold them for  research—known as “random source” dealers. For example, Life magazine  published an article in 1966 about a Maryland dealer who provided random  source dogs and cats for research and the inhumane conditions in which  he kept his animals. This article helped build momentum for legislation to  address this concern. In a more recent example, a 2006 television  documentary on an Arkansas random source dog dealer vividly showed  the harsh way in which this dealer treated his dogs.
Congress passed the Animal Welfare Act (AWA) in 1966 to protect animal  owners from theft by preventing the use or sale of stolen animals. As  amended, AWA is also intended to ensure the humane treatment of all  animals that are intended to be used in research facilities, kept as pets,  exhibited to the public, or commercially transported, among other things.
AWA names the Secretary of Agriculture as responsible for its  implementation and enforcement. That responsibility is delegated to the  U.S. Department of Agriculture’s (USDA) Animal and Plant Health  Inspection Service (APHIS), which is responsible for the licensing and  oversight of dealers who acquire and sell a variety of animals. Dealers who  sell random source dogs and cats—animals obtained from pounds or  shelters, auction sales, or from owners who bred and raised the animal on  the owner’s premises—are referred to as random source Class B dealers.  They are a subset of Class B dealers and deal in animals that they did not  exclusively breed and raise themselves. Some researchers maintain that  the attributes of random source dogs and cats are important to biomedical  research because these animals generally are more genetically diverse and  older than those obtained from dealers who breed their own animals. AWA  regulations require that random source Class B dealers maintain accurate  and complete records on the acquisition and disposition of the dogs and  cats they provide to researchers and that they adhere to certain standards  of humane care and treatment. To ensure these dealers comply with AWA  and its regulations, APHIS conducts unannounced inspections of their  facilities at least quarterly and performs “tracebacks”—an oversight  process unique to this type of dealer. Tracebacks involve APHIS  inspectors using a dealer’s records to trace a particular dog or cat back to  the source from which that dealer obtained the animal, both to verify the  legitimacy of the sale and to ensure the dog or cat was not lost or stolen.  For example, using an individual’s address information obtained from the  dealer’s records, an inspector may contact and interview the individual in  person to verify the origin of the animal.
In this context, our objectives were to determine (1) the number of Class B  dealers that sell random source dogs and cats for research, (2) the extent  to which APHIS conducts inspections of these dealers and verifies the  accuracy of their records, and (3) the costs associated with APHIS’s  oversight of these dealers compared with its costs for oversight of other  types of dealers.
To determine the number of Class B dealers that sell random source dogs  and cats for research and understand any change in this number over time,  we reviewed APHIS documents and interviewed agency officials. To  determine the extent to which APHIS inspects these dealers and reviews  their records, we reviewed all APHIS inspection reports for fiscal years  2007 to 2009 and a random sample of 2009 traceback documentation;  interviewed agency officials, including all field inspectors assigned to  random source Class B dealers; accompanied APHIS inspectors on three  dealer inspections in two states; and interviewed all dealers currently  licensed to sell random source dogs and cats. We also interviewed and  reviewed documents obtained from a cross section of stakeholders,  including animal welfare groups, medical research associations, the  National Research Council, and the National Institutes of Health, to  provide us with further context for understanding these issues. To  determine the costs associated with APHIS’s oversight of these dealers, we  reviewed agency documents and interviewed agency officials. Appendix I  provides a more detailed description of our objectives, scope, and  methodology.
We conducted this performance audit from June 2009 to September 2010  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: For decades, animal dealers have been providing dogs and cats to  scientific researchers. Within this broader group, random source Class B  dealers are those who provide dogs and cats that they obtain from pounds,  shelters, auction sales, or owners who breed the animals on their  premises. For certain research, some attributes of random source dogs  and cats are considered useful and desirable, such as particular physical  or genetic characteristics or the presence of specific diseases or  conditions. For example, according to a study conducted by the National  Research Council and information from the National Association of  Biomedical Research, random source dogs tend to be 2 years or older,  tend to weigh from 60 to 80 pounds, and may be of mixed breeds. These  attributes make them useful for cardiovascular, pulmonary, orthopedic,  and age-related studies. Random source cats are considered useful for  neurological and cardiovascular research and studies on respiratory  diseases and the immune system. In addition, random source dogs and  cats are considered useful for the study of certain naturally occurring  infectious diseases, such as Lyme disease and heartworm, or as animal  models for human diseases, such as sleep apnea and muscular dystrophy.
AWA provisions cover a variety of animals, including any live or dead dog,  cat, nonhuman primate, guinea pig, hamster, or rabbit to be used for  research, testing, exhibition, or kept as a pet. AWA requires businesses or  individuals covered by the law to be licensed or registered and to uphold  minimum standards of care set in regulation. Licensing and registration  under AWA is based on broad business categories, including animal  dealers, animal exhibitors, animal carriers, and research facilities. Animal  dealers and exhibitors are required to be licensed, while animal carriers  and research facilities are required to be registered. There are two types  of licenses for dealers—Class A and Class B—and one type of license for  exhibitors—Class C. Class A licenses are specifically for animal dealers  who only deal in the animals they breed and raise, while Class B licenses  are for all other types of dealers and include the purchase and resale of  any animal covered by AWA. Class C licenses are for businesses or  individuals whose business involves displaying animals to the public.  According to APHIS information, in fiscal year 2009 there were a total of  9,530 facilities licensed or regulated under AWA, which consisted of 3,898  Class A dealers, 1,031 Class B dealers, 2,732 Class C exhibitors, and 1,257  research facilities, among others.
The APHIS Animal Care program administers the requirements of AWA  and its implementing regulations. APHIS Animal Care undertakes a variety  of AWA regulatory activities, such as the licensing and registration of  facilities with animals covered by the act, unannounced compliance  inspections of licensed and registered facilities, and investigating public  complaints. In addition, Animal Care administers activities related to the  Horse Protection Act and has a role in planning and coordinating disaster  response efforts for household pets. In fiscal year 2010, the Animal Care  program had an annual budget of approximately $22.5 million and a staff  of 209, including about 100 field inspectors, who report to either of two  APHIS Animal Care regional offices. The APHIS field inspector cadre is  about evenly divided between veterinary medical officers, who hold  veterinarian degrees, and animal care inspectors, or technicians. Eight  field inspectors are assigned to random source Class B dealers, and five of  them are veterinary medical officers.
Inspecting regulated licensees’ and registrants’ facilities, which include  random source dealer facilities, is the primary way APHIS Animal Care  ensures compliance with AWA. All inspections are unannounced, and  generally the owner or manager of a facility accompanies the inspector  during the inspection. The time required to conduct inspections varies and  is affected by facility size and the number of regulated animals involved,  among other things. The inspection process consists primarily of two  parts—a physical inspection and a records inspection. During the physical  inspection, the inspector observes and documents the condition of the  facility and the animals in the facility to ensure the dealer is adhering to  AWA. The physical inspection may also involve the inspection of  transportation devices, such as vehicles and shipping containers for  animals, if necessary. During the records inspection, inspectors review  records that dealers are required to maintain to ensure they are accurate  and complete for all animals the dealers have obtained or sold.
Random source Class B dealers are generally required to comply with the  same regulations as other licensed Class A or B dealers. As such, when  APHIS inspectors inspect these dealers, they are to ensure that they, like  other dealers, are providing appropriate and adequate veterinary care;  properly tagging or identifying animals; maintaining accurate records; and  complying with standards of humane care, treatment, handling, and  transportation of animals. However, APHIS guidance imposes additional  controls on random source Class B dealers, and inspectors are directed to  (1) perform quarterly facility inspections, which are more frequent than  for any other dealers, and (2) use dealer records to conduct tracebacks by  tracing a particular dog or cat back to the source from which a dealer  obtained the animal, both to verify the legitimacy of the sale and ensure  the dog or cat was not lost or stolen. APHIS determined that more frequent  inspections were required for random source Class B dealers because they  are higher risk than other types of licensees.
APHIS inspectors are to conduct tracebacks within 30 days after each  inspection by tracing some of the dogs or cats a random source Class B  dealer obtained back to their sources. Specifically, an inspector randomly  selects 4 to 10 of the dogs and cats acquired by the dealer since the last  quarterly inspection. Inspectors then are to use the dealer’s records on  these selected animals to conduct tracebacks by either (1) visiting the  seller listed on the dealer records or (2) if the seller is a pound, shelter,  another licensed dealer, or an individual already known to the inspector,  contacting them by telephone. During the visit or telephone call,  inspectors are to obtain specific information from the seller to determine  if the sale was from a legitimate source. For example, if an inspector  conducted a traceback on a dog sold by an individual to a random source  Class B dealer, the inspector would attempt to confirm that the  requirement that the dog be bred and raised on the individual’s premises is  met. Once the traceback information is obtained, the inspector completes  a traceback worksheet form, documents the traceback result, and  forwards the completed form to the appropriate APHIS regional office. If,  however, an inspector is unable to perform a traceback because the seller  is outside of the inspector’s geographic area, the inspector sends the  incomplete traceback to the appropriate APHIS regional office. The  traceback is then ultimately referred to an inspector who has  responsibility for the area in which the seller is located. In these cases,  inspectors are directed to complete referred tracebacks within 30 days of  receiving the traceback request.
Recently, the USDA Office of Inspector General completed an audit of the  APHIS Animal Care program and reported several concerns related to  APHIS inspections and enforcement. The Inspector General’s May 2010  report found, among other things, that APHIS was ineffective in dealing  with problematic dealers and that some inspectors did not cite or  document violations properly. The report primarily focused on Class A  dealers who breed and sell dogs. The Inspector General chose these  dealers in part for their large facility size and the number of violations, or  repeat violations, that they received during fiscal years 2006 through 2008.  According to Inspector General officials, no random source Class B  dealers were included in this study.
APHIS concurred with the findings and recommendations in the Inspector  General’s report and has taken several actions to respond to the  recommendations. Among them, the agency developed an Enhanced  Animal Welfare Act Enforcement Plan in May 2010, which provides  details on how the agency plans to focus its enforcement efforts on  problematic dealers and improve inspector performance, such as by  providing additional training and guidance to inspectors and their  supervisors. APHIS also provided a new Inspection Requirements  Handbook during the April 2010 national meeting it held with all of its  Animal Care inspectors and regulatory staff in anticipation of the  Inspector General’s report, along with training on inspection enforcement  and consistency. Additionally, APHIS redirected funding in June 2010 to  provide an extra $4 million to help implement steps in the enforcement  plan and proposes using this funding to, for example, hire additional  Animal Care inspectors and supervisors (up to 60 additional personnel  total). Though none of these actions were explicitly directed at random  source Class B dealers, the new handbook contains some relevant  supplemental information, including the previously released July 2009  Standard Operating Procedures for Conducting Tracebacks from  Random Source  B Dealers, which generally directs that  tracebacks be conducted within 30 days of an inspection.
section_title: Nine Class B Dealers Provide Random Source Dogs and Cats for Research, Far Fewer Than in Recent Decades
paragraphs: As of July 2010, there were 9 Class B dealers licensed by APHIS to sell  random source dogs and cats for research. This number has changed little  since the end of fiscal year 2005, when APHIS reported there were 10  active random source dealers. Eight of the 9 active dealers are in the  APHIS Eastern Region, and 1 is in the APHIS Western Region. Overall, the  number of random source Class B dealers has fallen by over 90 percent  since the early 1990s, when there were over 100 such dealers licensed by  APHIS. APHIS officials attributed the decline to several factors, although  they said the agency has not performed a detailed study of this matter.  These factors include (1) the reduced use of random source dogs and cats  by research institutions due to new technologies and computer modeling;  (2) increased pressure from animal advocacy organizations to use  purpose-bred dogs and cats for research; and (3) APHIS’s oversight and  issuance of citations for AWA violations, which has led some dealers to  leave the business.
The use of dogs and cats in research has dropped significantly over the  last 30 years. According to academic and industry association information,  this general decline may be due to several factors, which include the  development of nonanimal research methods, such as computer models.  According to APHIS information, the largest number of dogs and cats used  in research was in fiscal year 1976—nearly 280,800 dogs and cats total.  Since that year, the use of dogs and cats in research has generally  declined, to less than 100,000 per year from fiscal years 1999 to 2007. In  fiscal year 2008, the total number of dogs and cats used in research was  about 101,700 animals—a decrease of nearly 64 percent from 1976.  Moreover, the number of random source dogs and cats used in research is  relatively small based on APHIS data collected from November 2007 to  November 2008, a period roughly covering fiscal year 2008. These data  showed that the total number of dogs and cats sold for that period by  random source Class B dealers to research facilities was 3,139 animals  (2,863 dogs and 276 cats), which was equivalent to about 3 percent of the  total dogs and cats used in research in fiscal year 2008.
section_title: APHIS Inspections Have Found Numerous Dealer Violations, but APHIS Has Not Completed All Tracebacks or Fully Analyzed Traceback Data
paragraphs: APHIS inspection reports documented one or more violations by seven of  the nine random source Class B dealers from fiscal years 2007 through  2009. Additionally, about 29 percent of tracebacks APHIS conducted  during this period were either unsuccessful or had not been completed as  of June 2010, as directed by agency guidance. The agency does not fully  use the traceback information it collects, and thus cannot ensure it is  detecting problems with the process.
subsections: section_title: During Fiscal Years 2007 to 2009, About One-Third of Inspection Reports Reviewed Cited Violations, and Seven of the Nine Dealers Had One or More Violations
paragraphs: Our review of all APHIS inspection reports from fiscal years 2007 through  2009 indicates that the agency has generally inspected, or attempted to  inspect, each of the random source Class B dealers at least four times a  year, as called for in APHIS guidance, and has documented numerous  violations among the dealers. According to APHIS guidance, when  conducting an inspection, inspectors are to examine the condition and  cleanliness of the dealer facility and the condition of the dogs and cats  present, among other things. Inspectors also are to review dealer records  pertaining to the acquisition and disposition of animals. For example,  according to APHIS guidance, inspectors are to determine if a dealer’s  records include items required in agency regulations such as (1) the name  and address of the person from whom a dog or cat was purchased by the  dealer; (2) the vehicle license number and state, and the driver’s license  number and state, of any person not licensed or registered under AWA; (3)  the official USDA tag number or tattoo assigned to a dog or cat; (4) a  description of each dog or cat, which includes certain specific  information, such as breed, color, and distinct markings; and (5)  certifications from any person not licensed, other than a pound or shelter,  that any dogs or cats provided to the dealer were born and raised on that  person’s premises.
Overall, 54 of the 156 inspection reports from fiscal years 2007 through  2009 cited at least one dealer violation, and seven of the nine dealers had  one or more violations during this period. The most common violation  involved the dealer being absent when the inspector attempted to perform  an inspection during normal business hours. Five dealers were cited for  this violation in 23 inspection reports. The second most common violation  was for problems with the condition of animal housing, such as excessive  rust, peeling paint, or exposed sharp edges. Five dealers were cited for this  violation in 14 inspection reports. Other violations included inadequate  veterinary care (six dealers cited in 10 reports), poor recordkeeping (five  dealers cited in 10 reports), and insufficient cleaning of kennels or cages  (three dealers cited in 6 reports). As of July 2010, several of these dealers  were under further investigation by APHIS in light of repeated violations  and could be subject to fines or even license revocation in the future,  depending on the severity or history of violations.
section_title: Some APHIS Tracebacks for Verification Were Unsuccessful or Incomplete in Fiscal Year 2009, and APHIS Has Not Fully Used Its Traceback Data
paragraphs: APHIS has performed tracebacks to verify the records of random source  Class B dealers since fiscal year 1993, but it only recently started to  compile traceback information using electronic spreadsheet logs. Prior to  fiscal year 2009, the agency was not compiling traceback data. APHIS  officials said that they began this effort in fiscal year 2009 in order to track  traceback results more thoroughly, ensure all tracebacks were being  completed, and follow up on tracebacks that were unsuccessful.  Information in the traceback logs comes from inspectors, who send a form  documenting the results of each traceback to the appropriate regional  office. We reviewed the information in APHIS’s fiscal year 2009 traceback  logs, as well as the individual forms from selected tracebacks.
We found that APHIS attempted a total of 326 tracebacks in fiscal year  2009. As of June 2010, the data in APHIS’s traceback logs showed that  APHIS was able to successfully trace a dog or cat back to a legitimate  source in 231 of the 326 traceback cases, or about 71 percent of the time.  Of the remaining tracebacks, 53, or about 16 percent of the total, were  unsuccessful, generally meaning that inspectors (1) could not locate the  source based on the address information they obtained from dealer  records or (2) determined the source was not legitimate (for example, the  dealer purchased the dog or cat from an individual who had not bred and  raised the animal as required by regulation). The other 42 tracebacks, or  about 13 percent of the total, had not been completed. In those instances  where an inspector determined a traceback was unsuccessful, APHIS  Animal Care forwarded the cases to APHIS’s Investigative and  Enforcement Services for further investigation and potential enforcement  action. APHIS officials said that they did not find any documented cases  of lost or stolen dogs or cats being purchased by random source dealers  via APHIS’s traceback efforts in fiscal year 2009.
Because APHIS does not analyze the data in its traceback logs, it cannot  systematically detect problems with its tracebacks. Although APHIS’s  traceback guidance states that tracebacks should generally be completed  within 30 days of a random source Class B dealer inspection, as of June  2010, 42 tracebacks from fiscal year 2009 remained incomplete.  Furthermore, preliminary fiscal year 2010 APHIS traceback data show that  as of June 2010, 47 tracebacks had not been completed that were already  about 60 days beyond APHIS’s traceback time frames. According to  APHIS’s guidance, “all tracebacks must be completed within 30 days of the  inspection of the random source B dealer, or for referred tracebacks,  within 30 days of the time the traceback request is received.” APHIS  regional officials noted several factors that can sometimes hinder timely  completion of tracebacks, such as competing priorities, limited resources,  dealers not obtaining valid addresses from individuals, the logistics of  tracking down individuals between APHIS regions, and having to obtain  traceback information from more than one dealer. However, APHIS  officials are not examining the log information for indications of any root  causes of the delays that they could address, such as whether these  incomplete tracebacks consistently involved the same sellers or  inspectors. Without thoroughly analyzing its traceback data, APHIS cannot  consistently detect problems and take all available steps to ensure random  source Class B dealers are obtaining dogs and cats from legitimate  sources. APHIS regional officials stated that it would be prudent to  examine incomplete tracebacks more closely and, for example, obtain  quarterly reports on their status to better manage them.
We also found three instances where an inspector traced a dog back to  another random source Class B dealer and then concluded all traceback  efforts, which is contrary to APHIS’s traceback guidance. According to this  guidance, in such instances, an inspector should continue the traceback  process using the second random source dealer’s records to trace the dog  or cat back to the seller listed on this second dealer’s records. However, in  these three instances, each traceback form noted that the inspector only  conducted the tracebacks as far as the random source Class B dealer; in  these cases, the traceback still needed to continue back to the seller for  “full verification.” During our discussions with APHIS regional officials  regarding these tracebacks, they agreed that the traceback process should  have continued according to APHIS traceback guidance. As with the  incomplete tracebacks, APHIS cannot ensure it detects such problems or  patterns among dealers or inspections, whether from the traceback forms  or the traceback logs, unless it thoroughly analyzes its traceback data.
section_title: APHIS Does Not Collect Data on the Cost of Its Oversight of Specific Classes of Dealers, or Others It Inspects, Including Random Source Class B Dealers
paragraphs: According to APHIS officials, the agency does not collect cost information  for its oversight of the specific classes of dealers and exhibitors, or others  it inspects, including random source Class B dealers. Furthermore, APHIS  officials also told us the agency does not currently have a mechanism in  place to determine these costs. For example, APHIS inspectors do not  currently record their time by specific oversight activity or class of dealer.  As a result, the only current cost information APHIS can provide for any  dealers, as well as others it inspects and oversees, is an estimate of the  average cost of inspections overall. APHIS estimated that this average cost  for fiscal year 2009 was $1,337 per inspection. According to APHIS  officials, the average inspection cost is estimated by taking the Animal  Care program’s annual appropriation, less certain administrative costs,  and dividing it by the total number of inspections conducted for the fiscal  year. However, the wide variety of inspections APHIS conducts, which  includes dealers of various types and sizes, research facilities, zoos, and  animal petting farms, limits the usefulness of this information.
USDA has reported in previous years on the cost of agency oversight of  random source Class B dealers. This information—provided to Congress  in April 2006 and June 2009—gave oversight costs related to the regulation  of random source Class B dealers for fiscal years 2005 and 2008. In April  2006, at the request of the Senate and House Appropriations Committees,  the Secretary of Agriculture reported that the fiscal year 2005 cost of  inspections and enforcement for these dealers was an estimated $270,000.  This estimate also included $154,400 for two special enforcement and  traceback projects that occurred that year. In June 2009, based on a  request by a Member of Congress, the Acting APHIS Administrator  reported information on APHIS’s regulation of random source Class B  dealers. Included in this information, the Acting Administrator reported an  estimated fiscal year 2008 oversight cost of approximately $309,000.  However, the fiscal year 2008 amount was based on the previously  reported fiscal year 2005 oversight cost figure, adjusted for cost-of-living  increases, and incorrectly included the two fiscal year 2005 special project  costs, which occurred only in fiscal year 2005. APHIS Animal Care officials  explained that including the fiscal year 2005 special project costs in the  fiscal year 2008 estimate occurred due to a lack of communication  between APHIS Animal Care staff and APHIS Budget and Program  Analysis staff and that those 2005 costs should not have been included in  the 2008 estimate. To prevent this, APHIS officials said they are developing  an internal standard operating procedure for reporting and communicating  consistent and accurate Animal Care data that will include the key staff  involved with this area. APHIS plans to have the procedure in place in  early fiscal year 2011.
APHIS Animal Care officials said they do not know how the fiscal year  2005 cost estimate for the agency’s oversight of random source Class B  dealers was calculated and that they are unable to reconstruct or update  this estimate. In addition, these officials said they are unable to develop a  current estimate for these costs because they lack the necessary data.  Federal internal control standards call for agencies to obtain, maintain,  and use relevant, reliable, and timely information for program oversight  and decision making, as well as for measuring progress toward meeting  agency performance goals. Furthermore, Office of Management and  Budget guidance directs agency managers to take timely and effective  action to correct internal control deficiencies. APHIS’s lack of an  accurate means of collecting and tracking oversight costs by activity and  dealer, exhibitor, and any other entity type that APHIS inspects constitutes  an internal control weakness and leaves the agency without an important  management tool. For example, three inspectors we interviewed suggested  that some random source Class B dealers may not require as many as four  inspections per year because these dealers either have experienced few, if  any, reportable violations over a period of years or are handling so few  animals. In addition, as discussed, USDA’s Inspector General has reported  a number of serious problems with APHIS’s oversight of other types of  dealers, and recently APHIS determined that it will put more emphasis on,  and provide additional resources for, enforcement oversight. Considering  these and other potential factors, if APHIS had reliable and timely  information on its oversight costs by activity and entity type, the agency  would be in a better position to develop a business case for making  changes to its oversight program that could allow it to use its limited  resources more efficiently and effectively.
section_title: Conclusions
paragraphs: The number of random source Class B dealers has declined to 9 from more  than 100 in the early 1990s. Tracebacks play an important role in APHIS’s  oversight of random source Class B dealers and help the agency ensure that  these dealers obtain dogs and cats from legitimate sources. APHIS recently  began tracking the results of tracebacks. Our review of APHIS’s data revealed  that about 13 percent of the tracebacks in fiscal year 2009 were incomplete,  and preliminary APHIS data from fiscal year 2010 confirmed that incomplete  tracebacks are continuing. Additionally, we found that by not analyzing  traceback data, the agency is not yet making full use of the new traceback  information it is collecting. Without analyzing this information—for example,  by determining whether the same sellers or inspectors were consistently  involved in late or incomplete tracebacks—APHIS cannot ensure it is  detecting problems in a timely manner and that tracebacks are conducted  according to the agency’s guidance, which would reduce the potential that  lost or stolen dogs or cats could be used in research.
In addition, having accurate, consistent, and reliable oversight cost data for  the APHIS Animal Care program is a key element in managing the program  effectively and enforcing AWA. Without such data, APHIS is not employing  one of the standards of federal internal control. Currently, APHIS cannot  determine what data it needs to estimate costs, and how to best collect that  information to reasonably know the cost of its oversight of random source  Class B dealers, as well as the other entities the agency regulates under  AWA. Without this information APHIS cannot track specific oversight costs  and cannot help management identify trends in its operations, including  inspections and tracebacks on random source Class B dealers. In addition,  not collecting and analyzing accurate and reliable oversight cost data  prevents APHIS from developing a business case for changing its oversight  program, if needed, and does not provide reasonable assurance that the  agency’s resources are being used effectively and efficiently to enforce AWA  and its implementing regulations.
section_title: Recommendations for Executive Action
paragraphs: To improve APHIS’s oversight of random source Class B dealers who  purchase dogs and cats for research, we recommend that the Secretary of  Agriculture direct the Administrator of APHIS to take the following two  actions:  Improve the agency’s analysis and use of the traceback information it  collects, such as whether the same sellers or inspectors were consistently  involved in late or incomplete tracebacks, and ensure it is taking all available  steps to verify random source Class B dealers are obtaining dogs and cats  from legitimate sources, including making certain that tracebacks are  completed in a timely manner and conducted according to APHIS guidance.
Develop a methodology to collect and track the oversight costs associated  with the specific classes of dealers, and others the agency inspects, including  random source Class B dealers, in order to identify potential problems  requiring management attention and develop a business case for changing  this oversight, if appropriate, to more efficiently use available resources.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to USDA for review and comment. In  written comments, which are included in appendix II, USDA agreed with  the report’s recommendations. Regarding the first recommendation, USDA  stated that APHIS will develop (1) a database to help manage and analyze  information associated with tracebacks and (2) a process to ensure  tracebacks are complete and finished in a timely manner. USDA said it  would complete these actions by December 31, 2010. Regarding the  second recommendation, USDA stated that APHIS will develop an  information management system to assist APHIS Animal Care managers in  managing and analyzing information collected from field operations,  determining associated costs, and measuring work performance. USDA  estimated it would complete this action by June 30, 2011. USDA did not  provide any suggested technical corrections.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Agriculture, and other interested parties. The  report also will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact me  at (202) 512-3841 or shamesl@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page of  this report. Key contributors to this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to determine (1) the number of Class B dealers that  sell random source dogs and cats for research; (2) the extent to which the  U.S. Department of Agriculture’s (USDA) Animal and Plant Health  Inspection Service (APHIS) conducts inspections of these dealers and  verifies the accuracy of their records; and (3) the costs associated with  APHIS’s oversight of these dealers compared with its costs for oversight of  other types of dealers.
To determine the number of Class B dealers that sell random source dogs  and cats for research, we reviewed APHIS documents, such as prior  agency annual reports, and USDA and APHIS information previously  reported to the Senate and House Appropriations Committees in April  2006 and to an individual Member of Congress in June 2009. We also  interviewed APHIS Animal Care officials at their headquarters in  Riverdale, Maryland, and their two regional offices in Raleigh, North  Carolina, and Fort Collins, Colorado, regarding how a Class B dealer is  designated as a random source dealer, the number of Class B dealers that  sell random source dogs and cats, and what accounted for any changes in  these dealers’ numbers both historically and since the end of fiscal year  2005. Additionally, we reviewed a 2009 National Research Council report  on random source dogs and cats for (1) information on the history of Class  B dealers of random source dogs and cats, (2) background regarding the  use of these animals in research, and (3) APHIS data in the study on the  number of random source dogs and cats sold from November 2007 to  November 2008. We also obtained information from APHIS regarding the  overall number of dogs and cats used in research as reported to the agency  from research facilities.
To determine the extent to which APHIS conducts inspections of these  dealers and verifies the accuracy of their records, we reviewed the Animal  Welfare Act, APHIS regulations, and guidance applicable to random source  Class B dealers, such as APHIS’s Standard Operating Procedures for  Conducting Tracebacks from Random Source  B Dealers and its  Dealer Inspection Guide. We reviewed APHIS inspection reports for the  nine current random source Class B dealers from fiscal years 2007 through  2009 and examined any violations APHIS inspectors recorded in each of  the 156 inspection reports prepared during this period to obtain an  understanding of the types of violations cited for these dealers. Using the  inspection report dates, we also determined whether APHIS followed their  guidance and inspected the nine current random source Class B dealers a  minimum of four times each year. Additionally, we obtained information  on APHIS’s fiscal year 2009 tracebacks efforts—an oversight process  unique to random source Class B dealers. Tracebacks involve APHIS  inspectors using a dealer’s records to trace a particular dog or cat back to  the source where that dealer obtained the animal, both to verify the  legitimacy of the sale and ensure the dog or cat was not lost or stolen. To  determine if the fiscal year 2009 APHIS traceback information maintained  in automated spreadsheets by the APHIS Eastern and Western Regional  Offices was reliable for the purposes of our review, we conducted a data  reliability assessment of it. Specifically, to ensure the validity and  reliability of these data, we reviewed key data elements from (1) all 36 of  the tracebacks listed on the Western Regional Office traceback  spreadsheet and (2) a stratified random sample of 50 tracebacks, based on  random source Class B dealers and inspectors, pulled from the Eastern  Regional Office traceback spreadsheet total of 317 tracebacks. The  Eastern Region had many more tracebacks because eight of the current  nine random source dealers are located in that region. Based on our  assessment, we believe these data are sufficiently reliable for reporting  APHIS data for informational and contextual purposes.
Additionally, we interviewed APHIS Animal Care headquarters and regional  office officials—including the eight field inspectors who inspect the nine  current random source Class B dealers—as well as the dealers, to obtain an  understanding of APHIS oversight as it pertains these dealers. We also  accompanied two APHIS inspectors on three random source Class B dealer  inspections in two states to observe how inspections and tracebacks were  conducted. Furthermore, we also interviewed and reviewed documents  obtained from a cross section of stakeholder entities, including two animal  welfare groups, the Animal Welfare Institute and the Humane Society of the  United States, medical research associations such as the National  Association for Biomedical Research, the National Research Council, the  National Institutes of Health, and the USDA Office of Inspector General to  provide us further context for understanding the issues involving both  random source dealers and random source dogs and cats.
To determine the costs associated with APHIS’s oversight of random  source dealers compared with its costs for oversight of other types of  dealers, we reviewed prior cost information the agency provided to the  Senate and House Appropriations Committees in April 2006 and to an  individual Member of Congress in June 2009. We discussed this previously  reported information with APHIS Animal Care headquarters officials and  inquired how the information was prepared. We also interviewed agency  officials about APHIS’s current efforts to collect oversight cost data for  random source Class B dealers, as well as for other entities the agency  inspects, such as other types of dealers. Additionally, we obtained and  reviewed documentation from APHIS regarding how the agency reports its  average cost-of-inspection information.
We conducted this performance audit from June 2009 to September 2010  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Comments from the U.S. Department of Agriculture
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, James R. Jones, Jr., Assistant  Director; Kevin S. Bray; Barry DeWeese; Kirk D. Menard; Michael S. Pose;  David Reed; Terry Richardson; Cynthia Saunders; and Ben Shouse made  key contributions to this report.