WASHINGTON (AP) -- The Department of Agriculture has failed to enforce penalties against some who falsely marketed foods as organic, according to an internal department investigation.

A report by the agency's inspector general says the agency needs to step up enforcement of those who sell products under the "USDA Organic" label but do not meet government standards to do so. The report says the department has made improvements in maintaining the integrity of the organic program in recent years, but needs to better handle complaints about potential violators.

Oversight of the organic program has become more important and more scrutinized as the industry has exploded in popularity over the last decade, growing 14 to 21 percent annually with sales of $24.6 billion in 2008. As more companies have vied to be part of the business, critics have charged that the government has not been restrictive enough in what it allows to be labeled as organic.

The internal report says the department has failed to monitor some companies it had already identified as improperly marketing their products as organic. In one case, the department never issued enforcement action against an operation that had marketed non-organic mint under the department's label for two years.

Enforcement action can simply be an agreement to correct the problem or can be more severe, including revocation of an operation's organic certification or cash penalties. In some cases, the report said, it took more than two years for the department to issue enforcement action while the companies continued to falsely market their products.

The report also said the department was not processing complaints about the program fast enough and that agents charged with certifying organic operations were not following consistent rules.

Department of Agriculture official Rayne Pegg, who heads the agency that oversees the program, said the Obama administration has already proposed a budget increase to deal with some of the deficiencies. He said the department is working to improve the program.

The internal report "underscores the necessity for the reforms we have enacted and those currently under way," he said.

The administration has pledged to step up oversight of organics, as critics have argued that the agency's definitions are not tailored narrowly enough and that some products are organic in name only.

The department, for instance, announced last month new rules aimed to increase the amount of time livestock graze on pasture to qualify for an organic meat or dairy label.

In announcing the new standards, Kathleen Merrigan, deputy agriculture secretary and long time advocate of organics, called the new rules a "down payment" on future reforms of organic practices.

One constant critic of the organic program, Mark Kastel of the Wisconsin-based Cornucopia Institute, said he is satisfied with the agency's response to the problems. The group had requested an audit of the program.

"The organic label is still the gold standard for families seeking the safest and most nutritious food," Kastel said. "We need to work earnestly to make sure that it continues to deserve the trust of consumers."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.