By: Lisa Droke, Senior Vice President & Chief Financial Officer, The Cotton Board
I am often asked about the differences in my previous position working as a VP in the financial division of a large, public company versus my current position as Chief Financial Officer for The Cotton Board, a non-profit, quasi-governmental organization. Certainly, many of the basic financial oversight, budgeting, and recordkeeping operations are similar. However, a notable difference has been seeing and experiencing the significant oversight that The Cotton Board receives from the U.S. Department of Agriculture (USDA) and the professional staff working in its Agricultural Marketing Service (AMS). While there is a high level of reporting required of public companies, the reporting required of The Cotton Board to USDA-AMS is the most comprehensive that I've experienced.
The USDA-AMS staff is involved with all aspects of the Cotton Research and Promotion Program on a daily basis. The breadth of oversight runs the gamut. The USDA-AMS staff review and approve all budgets, both those devoted to Cotton Research and Promotion programs and operational budgets of The Cotton Board. All budgets submitted to USDA-AMS are required to include a statement of objectives and strategy in each major program area, a summary of proposed expenditures by major program areas, comparative data for at least the preceding year and an administrative expense breakdown. The Cotton Research and Promotion Budgets must demonstrate high levels of internal consistency and strategic thought in order to meet approval from the Members and Alternates of The Cotton Board and also from the professional staff of USDA-AMS. Each year, USDA-AMS, along with The Cotton Board, reviews actual spending levels as compared to budgeted operations in order to ensure actual activities are consistent with approved budgets.
USDA-AMS reviews and approves contracting procedures as and demands strict compliance with those procedures. The agency has the right to review and does review contracts entered into by The Cotton Board or Cotton Incorporated. USDA-AMS reviews all financial information including daily disbursements and financial statements for each accounting period. They oversee all aspects of the annual audit including the review of the engagement letter with our independent auditors and they also participate in all conferences and in the resolution of any findings developed from the audit. The audit itself must be conducted in compliance with Generally Accepted Governmental Accounting Standards.
Because the courts have determined that statements by the Cotton Research and Promotion Program are considered to be “government speech,” USDA-AMS reviews all promotional and educational materials distributed under the Cotton Research and Promotion Program, including the review of all advertising, consumer education programs, press releases, and other promotional materials. USDA-AMS attends all board meetings, manages the board membership nomination and appointment process and assists the board with issues and questions that arise. Additionally, at least every three years, the USDA-AMS staff conducts a thorough management review to ensure that both internal Cotton Board and USDA policies are followed and all records are in order.
Congress charged USDA with the responsibility for implementation and oversight of commodity programs, and, from my perspective, the staff of USDA-AMS are dedicated professionals who work diligently every day to carry out that responsibility. The stakeholders in the Cotton Research and Promotion Program can be confident that USDA-AMS is ensuring that the critical functions of transparency and oversight of assessment funds are being rigorously and thoroughly administered through its oversight activities.