Arizona Department of Agriculture - State Agricultural Laboratory

The report addresses the agricultural testing services offered by the Department’s Lab. We found that while privatizing the entire Lab would not be cost-effective, the Department may be able to shift testing for the cattle disease brucellosis to the United States Department of Agriculture. The Lab will conduct an estimated 105,000 brucellosis tests on cattle this year, primarily on slaughtered animals. While the USDA pays for many of these testing costs, the Lab will dedicate an estimated two FTEs to this function. However, the Department may be able to transfer 1.5 of these FTEs to other duties if it shifts brucellosis testing for slaughtered cattle to a cooperative state/federal regional laboratory. The Department should retain approximately one-half FTE to test samples collected from live animals, since turnaround time is important for this testing.

The Department should also revise its current testing agreement with the Structural Pest Control Commission (Commission) to fully recover testing costs. The Commission regulates the use of pesticide in non-agricultural areas and contracts with the Lab to test samples for regulatory purposes. The agreement reimburses the Department $47,500 a year for testing and an additional $7,500 for training Commission and Lab staff. However, past agreements have used estimates that were too low to cover the actual costs of these tests. In fact, testing actually cost the Department from $92,000 to over $110,000 per year from fiscal years 1997 through 1999.  As a result, the Department has absorbed more than $45,000 annually in costs not covered under the agreements.  While the Department has taken steps to better reflect its costs in its current agreement with the Commission, it still needs to annually identify its costs and incorporate them into future agreements.