The Washington Department of Ecology rescinded a $22,000 penalty issued to DeRuyter Brothers Dairy Inc. on May 19, 2010.
The penalty had been issued against the Sunnyside area dairy for allegedly allowing liquid manure to run into state-controlled waters after application to a field near Van Belle Road.
The incident had been investigated by inspectors from both the Agriculture and Ecology departments.
The DeRuyter Brothers denied a violation had occurred, and appealed to the Pollution Control Hearings Board.
Ecology officials became aware of problems with the investigation during the appeal process.
The department's failures included non-standard sampling procedures and failure to immediately inform the dairy operators that a release had occurred.
This led the agency to rescind the penalty, effective May 10, 2011.
Charlie McKinney, water quality manager at the Department of Ecology's central regional office, said, "In this case, we were concerned about our procedures. We're taking care to better coordinate our efforts, both with agriculture and with those we regulate."
Ecology officials said Genny DeRuyter responded, saying, "We are pleased that Ecology recognized its mistakes in issuing the penalty. Ecology did the right thing in rescinding it."