Uncollected Penalties

Issued Date
July 31, 2013
Agriculture and Markets, Department of


To determine if the Department of Agriculture and Markets (Department) effectively pursues and collects outstanding penalties. The audit covers the period April 1, 2007 through February 1, 2013.


The Department's mission is to foster a competitive food and agriculture industry that benefits producers and consumers, while promoting public health and safety. The Department conducts inspections of various operations to ensure compliance with the Agriculture and Markets Law. Individuals and entities who violate the law first receive warnings seeking compliance. When problems are not corrected, monetary penalties can be assessed. Between April 1, 2007 and September 17, 2012, the Department assessed over 31,000 penalties totaling more than $18.2 million. Of this amount, $10.4 million (57 percent) was collected, $2.2 million was waived and $3.9 million was written off as uncollectible. The remaining of $1.7 million was outstanding.

Key Findings

  • Outstanding accounts routinely have no collection activity for two years or more and are often eventually deemed uncollectible. Between April 2007 and October 2012, more than 6,000 penalized establishments went out of business resulting in the withdrawal and write off over $3.5 million of accounts receivable.
  • Critical but incompatible duties associated with collection (including billing, recordkeeping and receipt of payments) are all assigned to one employee. An absence of management oversight has significantly increased the risk that errors, omissions and even irregularities can occur and not be detected.
  • The current system used to track outstanding penalties is incomplete and often inaccurate. As a result, the Department is unable to utilize certain proven collection methods, including the State-Wide Offset Program.
  • A lack of communication and information flow between the Penalty Unit and the divisions performing inspections negatively impacts consistency and effectiveness.

Key Recommendations

  • Revise collection processes to eliminate extended periods of inactivity and provide for more periodic and progressive attempts to secure payment.
  • Distribute incompatible tasks and functions among various employees. Where this segregation is not possible, increase management oversight to reduce the risk that errors, omissions or irregularities could occur and not be detected.
  • Develop performance measurement tools, such as periodic reports and analytics, to enhance management oversight and monitoring of penalty and collection activities.
  • Improve communications and information sharing between and among operating divisions, especially as it relates to penalty history.

Other Related Audit/Report of Interest

Office of the Attorney General: Accounts Receivable Collections (2011-S-25)

John Buyce

State Government Accountability Contact Information:
Audit Director: John Buyce
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236