Increase in Hourly Rate Charged by Department of Agriculture for Resident Inspectors at Egg Processing Plants

GAO reviewed the Department of Agriculture's justification for a 40-percent increase in hourly fees for voluntary poultry and egg grading services.

GAO found that the increase in the hourly fee, which was the first increase since 1977, was needed because of: (1) an earlier Food Safety and Quality Service decision not to increase the fee to cover a projected loss of $510,000 in fiscal year 1980; (2) an underestimate of about $440,000 in the net loss that the program would incur in fiscal year 1980; and (3) large increases in fiscal year 1981 costs due to an upgrading of poultry and egg graders, a Federal pay raise, and increases in travel-related costs for relief graders. In addition, GAO found that the hourly rates charged for most other commodity grading services either have been increased recently or are in the process of being increased. In light of the increases in program costs since 1977, the Department of Agriculture was justified in increasing the hourly fee charged for poultry and egg grading.