WASHINGTON — The U.S. Department of Agriculture has failed to properly oversee field trials of genetically engineered crops, including plants designed to produce chemicals for medical and industrial uses, investigators say.

A report released Thursday by the USDA's inspector general said the department "lacks basic information" on where field tests are or what is done with the crops after they are harvested.

The report is the latest blow to prospects for developing an industry based on mass-producing pharmaceutical chemicals from genetically modified corn.

Testing of biopharmaceutical crops in Hawai'i has become a source of controversy and the locations of such tests remain confidential. However, public interest groups are seeking information to force the government to study the environmental impact of crops they see as potentially dangerous.

During the inspector general investigation, auditors found that two large harvests of biopharmaceutical crops remained in storage at test sites without the USDA's knowledge or approval.

The investigators also said that in 2003 the department failed to inspect fields of biopharmaceutical crops with the frequency that officials said they would.

"Current (USDA) regulations, policies and procedures do not go far enough to ensure the safe introduction of agricultural biotechnology," the report said.

The report "confirms the public's lack of confidence in the USDA to oversee pharmaceutical and industrial chemical crops," said Susan Prolman of the Union of Concerned Scientists, which has been critical of the agricultural biotechnology industry.

USDA officials said they have made a number of improvements since the investigation was done but disagree with some of the findings.

"We were addressing many of the issues as they were looking at the same issues," said Cindy Smith, deputy administrator for biotechnology regulatory services in the USDA's Animal and Plant Health Inspection Service.

She said violations cited in the report were minor. Also, the agency now does all the required inspections of biopharmaceutical crop sites, including one last summer near Burlington, Iowa, she said.

The department is heeding one of the inspector general's suggestions and may make it mandatory for researchers to provide global positioning coordinates for test sites.

Smith's staff has grown from 23 to 65 since the division of biotech regulatory services was established in 2002.

The Agriculture Department oversaw 67,000 acres of biotech field trials in 2004, up from 8,700 in 1994.

Relatively little of that acreage is devoted to pharmaceutical or industrial crops, but there is special concern that those plants could contaminate conventional crops or get into the food supply.

A small biotech company, ProdiGene Inc., was ordered to pay more than $3 million in penalties and cleanup costs in 2002 after mismanaging field trials of pharmaceutical crops in Iowa and Nebraska.

In Hawai'i, Monsanto Co., the Hawaii Agriculture Research Center, ProdiGene and Garst Seed Co. have been granted permits to test biopharmaceutical crops. However, it is believed that no tests of such crops are currently under way in Hawai'i.

Biopharmaceutical crops are seen as a cheap way to mass-produce human and animal drugs. Corn has been the crop of choice because it is relatively simple to engineer and produces a lot of grain that can be easily stored and processed.