USMEF Audit Budget Committee Compliance Report November 4, 2013

1. USMEF Audit Budget CommitteeCompliance ReportNovember 4, 2013 Reginald Staples Director, Compliance US Meat Export Federation

2. Compliance Goals • Establishing, monitoring, and enforcing policies, procedures and expectations that support the Code of Ethics and our values • Promoting awareness of USMEF compliance standards and expectations through communication and periodic training • Evaluating and continuously improving the compliance function

3. Sources of Compliance Assurance Internal Audits USMEF Staff Funding Audits External Audit

4. 2013 Compliance Highlights • Code of Ethics and Conflict of Interest (COI) • USMEF staff completed the annual COE/COI • COI acknowledgement for EC members is 100% complete • Compliance Training • Staff Training • New MAP compliance requirements • Reimbursement Rules • Contracting Procedures • Foreign Corrupt Practices Act (FCPA) • Anti-Fraud Requirements • New FAS Civil Rights training • Executive Committee Member Ethics and Compliance Overview • Lobbying Policy • FCPA • EC Conflict of Interest Disclosure Process • Exception Procedures • Internal Control Improvement Actions • New Contract Analysis Process • Updated Contracting Manual and Branded Guidelines • Implemented Anti-Fraud Program and Policy

5. External Audits • JDS Professional Group: USMEF anticipates once the 2013 Financial Statement Audit is completed, there will be no reportable deficiencies in internal control or material instances of non-compliance • Foreign Agriculture Services:The status of the Final Report is pending due to the government shutdown. • National Pork Board:The audit is in-process. A final report anticipated in early 2014. • Cattlemen's Beef Board: The audit of FY2013 Direct and Overhead (Implementation) expenses is in-process. • USB/SmithBucklin Audit: The audit is complete. Pending receipt of final report. • Denver Sales Tax Audit: This audit was completed with the results extrapolated over a 7 year period. The total assessed amount was calculated as $10,315.

6. Project Status and 2014 – Compliance Plan Compliance Project Prioritization based on Level of Risk High Risk Mitigation Projects Moderate Risk Mitigation Projects Low Risk Mitigation Projects • 5- Compliance Performance • Reporting • 6 –Review USMEF Internal Controls • Operational Efficiency and • Effectiveness • International Controls • Validation and Effectiveness Anti-Fraud Training Entity Level Controls Validation Intellectual Property Data Protection and Privacy  International Internal Control Matrix Review Foreign Corrupt Practices Compliance 1 - Vendor Payment Monitoring 2 - Treasury/Cash Management 3 - Vendor Due Diligence 4 -Travel and Expense Reimbursement  TS  TS   C  IP Other Activities IP C 7 – T&E Reimbursement and Denver Vendor Payments 8 – Database/SharePoint Implementation Project Lead 9 – Special Projects/Other 10 – 2014-2015 Risk Assessment C IP TS TS  - Completed IP - In-Process C – Continuous TS - To-be-Scheduled in FY 2014

7. Overview of the ConvercentIntegrated Compliance Platform • An integrated platform that aligns internal policies and compliance requirements • A multi-channel approach to employee incident reporting that ensures rapid responses and escalations • Values-based activities that incorporates our code of ethics • Aligns training of company values/policies and monitoring of course completion 7