Foreign Assistance:

Various Challenges Impede the Efficiency and Effectiveness of U.S. Food Aid

GAO-07-560: Published: Apr 13, 2007. Publicly Released: Apr 13, 2007.

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The United States is the largest global food aid donor, accounting for over half of all food aid supplies to alleviate hunger and support development. Since 2002, Congress has appropriated an average of $2 billion per year for U.S. food aid programs, which delivered an average of 4 million metric tons of food commodities per year. Despite growing demand for food aid, rising business and transportation costs have contributed to a 52 percent decline in average tonnage delivered over the last 5 years. These costs represent 65 percent of total emergency food aid, highlighting the need to maximize its efficiency and effectiveness. Based on analysis of agency documents, interviews with experts and practitioners, and fieldwork, this report examines some key challenges to the (1) efficiency of U.S. food aid programs and (2) effective use of U.S. food aid.

Multiple challenges hinder the efficiency of U.S. food aid programs by reducing the amount, timeliness, and quality of food provided. Specific factors that cause inefficiencies include (1) funding and planning processes that increase delivery costs and lengthen time frames; (2) ocean transportation and contracting practices that create high levels of risk for ocean carriers, resulting in increased rates; (3) legal requirements that result in awarding of food aid contracts to more expensive service providers; and (4) inadequate coordination between U.S. agencies and food aid stakeholders to track and respond to food and delivery problems. U.S. agencies have taken some steps to address timeliness concerns. The U.S. Agency for International Development (USAID) has been stocking or prepositioning food commodities domestically and abroad, and the U.S. Department of Agriculture (USDA) has implemented a new transportation bid process, but the long-term cost effectiveness of these initiatives has not yet been measured. In addition, the current practice of using food aid to generate cash for development projects--monetization--is an inherently inefficient use of resources. Furthermore, since U.S. agencies do not collect monetization revenue data electronically, they are unable to adequately monitor the degree to which revenues cover costs. Numerous challenges limit the effective use of U.S. food aid. Factors contributing to limitations in targeting the most vulnerable populations include (1) challenging operating environments in recipient countries; (2) insufficient coordination among key stakeholders, resulting in disparate estimates of food needs; (3) difficulty in identifying vulnerable groups and causes of their food insecurity; and (4) resource constraints on conducting reliable assessments and providing food and other assistance. Further, some impediments to improving the nutritional quality of U.S. food aid may reduce the benefits of food aid to recipients. Finally, U.S. agencies do not adequately monitor food aid programs due to limited staff, competing priorities, and restrictions on the use of food aid resources. As a result, these programs are vulnerable to not getting the right food to the right people at the right time.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should develop an information collection system to track monetization transactions.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: Based on information provided by USAID and USDA, and our own analysis, we determined that this recommendation has been implemented. According to USAID, monetization transactions are currently reflected in annual results reports. The implementation of USAID's Quarterly Web Interfaced Commodity Reporting System was scheduled to occur in autumn 2009 and was expected to capture such transactions electronically. According to USAID officials, the system will standardize and centralize all commodity information submitted by participating organizations, thereby facilitating reporting. USDA's planned Food Aid Information System will include interaction with USAID on monetization outcomes and will provide data on commodity shipments, local conditions for monetization, and product quality. Contracting for the establishment of the system began in fiscal year 2009; and in June 2011 (GAO-11-636), we reported that final components of the system are expected to be come online in Fall 2011.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should establish a coordinated system for tracking and resolving food quality complaints.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: Based on information provided by USAID and USDA and our own analysis, we determined that this recommendation has been implemented. USAID and USDA have worked together to strengthen the current system for tracking and resolving food quality complaints. Within a subgroup of the Food Aid Consultative Group (FACG), USAID, USDA, and stakeholders have developed a flow chart of standard operating procedures to resolve food quality complaints, also known as the commodity quality "feedback loop." As of August 2009, USDA officials had incorporated into the feedback loop additional details concerning halting distribution and shortening the response time and planned to circulate the final version to the FACG. (These steps are outlined in our May 2011 report, GAO-11-491.) USAID used the feedback loop to facilitate the U.S. response to two food quality complaints of corn soy blend delivered to Haiti and Guatemala. Finally, the FACG has initiated an ad hoc field reporting group on food quality that has met regularly since September 2006 to share information about food quality problems.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should work together and with stakeholders to modernize ocean transportation and contracting practices to include, to the extent possible, commercial principles of shared risks, streamlined administration, and expedited payment and claims resolution.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis in our 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined that this recommendation has been implemented. USAID, USDA, and DOT have established a new transportation working group of the Food Aid Consultative Group, standardized transportation contracts, and performed market research on the cost of commercial marine insurance. USAID and USDA have streamlined administration by combining shipments of U.S. food aid whenever possible, which can result in reduced transportation costs. In June 2008, nearly all USAID and USDA packaged commodities were combined, according to a joint USAID and USDA report to Congress in January 2009. USAID has solicited information, evaluated proposals, and made a recommendation on an electronic payment system for freight. USDA will continue to pay for freight electronically through its existing system and upgrade in fiscal year 2010. USDA's new food procurement regulations, released in May 2009, clarified eligibility requirements of entities that receive food aid through USDA's Food for Progress and McGovern-Dole Food for Education and Child Nutrition programs and set administrative procedures for resolving cargo claims.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should establish a coordinated system for tracking and resolving food quality complaints.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: Based on information provided by USAID and USDA and our own analysis, we determined that this recommendation has been implemented. USAID and USDA have worked together to strengthen the current system for tracking and resolving food quality complaints. Within a subgroup of the Food Aid Consultative Group (FACG), USAID, USDA, and stakeholders have developed a flow chart of standard operating procedures to resolve food quality complaints, also known as the commodity quality "feedback loop." As of August 2009, USDA officials had incorporated into the feedback loop additional details concerning halting distribution and shortening the response time and planned to circulate the final version to the FACG. (These steps are outlined in our May 2011 report, GAO-11-491.) USAID used the feedback loop to facilitate the U.S. response to two food quality complaints of corn soy blend delivered to Haiti and Guatemala. Finally, the FACG has initiated an ad hoc field reporting group on food quality that has met regularly since September 2006 to share information about food quality problems.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should establish a coordinated system for tracking and resolving food quality complaints.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: U.S. Agency for International Development (USAID) and the U.S. Department of Agriculture (USDA) have worked together to strengthen the current system for tracking and resolving food quality complaints. Within a subgroup of the Food Aid Consultative Group (FACG), USAID, USDA, and stakeholders have developed a flow chart of standard operating procedures to resolve food quality complaints, also known as the commodity quality "feedback loop." As of August 2009, USDA officials had incorporated into the feedback loop additional details concerning halting distribution and shortening the response time and planned to circulate the final version to the FACG. USAID used the feedback loop to facilitate the U.S. response to two recent food quality complaints of corn-soya blend delivered to Haiti and Guatemala. Finally, the FACG has initiated an ad hoc field reporting group on food quality that has met regularly since September 2006 to share information about food quality problems.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should seek to minimize the cost impact of cargo preference regulations on food aid transportation expenditures by updating implementation and reimbursement methodologies to account for new supply practices, such as prepositioning, and potential costs associated with older vessels or limited foreign-flag participation.

    Agency Affected: Department of Agriculture

    Status: Closed - Not Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis discussed in a 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined implementation is under way but not yet complete. To date, USAID, USDA, and DOT have not updated a 1987 Memorandum of Understanding (MOU) that outlines how to calculate reimbursement of ocean freight costs and coordinate the administration of cargo preference requirements. To minimize the cost impact of cargo preference, these agencies must reach a new agreement that would commit all parties to some significant changes in cargo preference administration, but according to DOT officials, a revised MOU cannot be completed until its cargo preference regulations are updated. Consistent with this recommendation, in a subsequent report on local and regional procurement (GAO-09-590), we recommended that USAID, USDA, and DOT expedite updating the MOU between U.S. food assistance agencies and DOT to resolve uncertainties associated with the application of cargo preference to regional food procurement. The agencies have resolved one area of uncertainty by agreeing that cargo preference applies to 50, rather than 75, percent of the tonnage of food transported by sea regionally. However, other areas of uncertainty need to be resolved.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should seek to minimize the cost impact of cargo preference regulations on food aid transportation expenditures by updating implementation and reimbursement methodologies to account for new supply practices, such as prepositioning, and potential costs associated with older vessels or limited foreign-flag participation.

    Agency Affected: United States Agency for International Development

    Status: Closed - Not Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis discussed in a 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined implementation is under way but not yet complete. To date, USAID, USDA, and DOT have not updated a 1987 Memorandum of Understanding (MOU) that outlines how to calculate reimbursement of ocean freight costs and coordinate the administration of cargo preference requirements. To minimize the cost impact of cargo preference, these agencies must reach a new agreement that would commit all parties to some significant changes in cargo preference administration, but according to DOT officials, a revised MOU cannot be completed until its cargo preference regulations are updated. Consistent with this recommendation, in a subsequent report on local and regional procurement (GAO-09-590), we recommended that USAID, USDA, and DOT expedite updating the MOU between U.S. food assistance agencies and DOT to resolve uncertainties associated with the application of cargo preference to regional food procurement. The agencies have resolved one area of uncertainty by agreeing that cargo preference applies to 50, rather than 75, percent of the tonnage of food transported by sea regionally. However, other areas of uncertainty need to be resolved.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should seek to minimize the cost impact of cargo preference regulations on food aid transportation expenditures by updating implementation and reimbursement methodologies to account for new supply practices, such as prepositioning, and potential costs associated with older vessels or limited foreign-flag participation.

    Agency Affected: Department of Transportation

    Status: Closed - Not Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis discussed in a 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined implementation is under way but not yet complete. To date, USAID, USDA, and DOT have not updated a 1987 Memorandum of Understanding (MOU) that outlines how to calculate reimbursement of ocean freight costs and coordinate the administration of cargo preference requirements. To minimize the cost impact of cargo preference, these agencies must reach a new agreement that would commit all parties to some significant changes in cargo preference administration, but according to DOT officials, a revised MOU cannot be completed until its cargo preference regulations are updated. Consistent with this recommendation, in a subsequent report on local and regional procurement (GAO-09-590), we recommended that USAID, USDA, and DOT expedite updating the MOU between U.S. food assistance agencies and DOT to resolve uncertainties associated with the application of cargo preference to regional food procurement. The agencies have resolved one area of uncertainty by agreeing that cargo preference applies to 50, rather than 75, percent of the tonnage of food transported by sea regionally. However, other areas of uncertainty need to be resolved.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should work together and with stakeholders to modernize ocean transportation and contracting practices to include, to the extent possible, commercial principles of shared risks, streamlined administration, and expedited payment and claims resolution.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis in our 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined that this recommendation has been implemented. USAID, USDA, and DOT have established a new transportation working group of the Food Aid Consultative Group, standardized transportation contracts, and performed market research on the cost of commercial marine insurance. USAID and USDA have streamlined administration by combining shipments of U.S. food aid whenever possible, which can result in reduced transportation costs. In June 2008, nearly all USAID and USDA packaged commodities were combined, according to a joint USAID and USDA report to Congress in January 2009. USAID has solicited information, evaluated proposals, and made a recommendation on an electronic payment system for freight. USDA will continue to pay for freight electronically through its existing system and upgrade in fiscal year 2010. USDA's new food procurement regulations, released in May 2009, clarified eligibility requirements of entities that receive food aid through USDA's Food for Progress and McGovern-Dole Food for Education and Child Nutrition programs and set administrative procedures for resolving cargo claims.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should work together and with stakeholders to modernize ocean transportation and contracting practices to include, to the extent possible, commercial principles of shared risks, streamlined administration, and expedited payment and claims resolution.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: Based on information provided by USAID, USDA, and DOT, and our own analysis in our 2009 report to Congressional committees on food assistance (GAO-09-977SP), we determined that this recommendation has been implemented. USAID, USDA, and DOT have established a new transportation working group of the Food Aid Consultative Group, standardized transportation contracts, and performed market research on the cost of commercial marine insurance. USAID and USDA have streamlined administration by combining shipments of U.S. food aid whenever possible, which can result in reduced transportation costs. In June 2008, nearly all USAID and USDA packaged commodities were combined, according to a joint USAID and USDA report to Congress in January 2009. USAID has solicited information, evaluated proposals, and made a recommendation on an electronic payment system for freight. USDA will continue to pay for freight electronically through its existing system and upgrade in fiscal year 2010. USDA's new food procurement regulations, released in May 2009, clarified eligibility requirements of entities that receive food aid through USDA's Food for Progress and McGovern-Dole Food for Education and Child Nutrition programs and set administrative procedures for resolving cargo claims.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should improve food aid logistical planning through cost-benefit analysis of (1) supply-management options, such as long-term transportation agreements, and (2) prepositioning, including consideration of alternative methods, such as those used by the World Food Program.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: In response to our recommendation, agencies have taken several actions. USDA now actively pursues long-term purchasing agreements with private voluntary organizations, allows transportation bookings to carry over from the fiscal year to the end of the calendar year to reduce third quarter bunching, and has disallowed certain inland transportation contracts that are difficult to monitor. USAID and DOT established pricing guidelines for long-term transportation agreements to be pursued when price conditions become less volatile. Additionally, in January 2008, USAID completed a cost-benefit analysis of prepositioning food aid. As a result, USAID officials report that they have begun to implement a new approach to prepositioning modeled after the K-Mart approach where cargo is procured for the prepositioning site in advance, and when an emergency occurs, cargo from the prepositioning site is sent first (rather than last). Congress has also taken steps to facilitate the ability of U.S. agencies to implement our recommendation. In the Farm, Nutrition, and Bioenergy Act of 2007 Report, Congress encouraged USDA and USAID to continue efforts aimed at improving logistical planning of food aid to address, among other issues, the problem of bunching. In enacting the 2008 Farm Bill, Congress required USDA and USAID to undertake efforts to improve procurement planning by stipulating that the agencies shall develop procedures that ensure expedited processing of commodity requests in order to provide commodities overseas in a timely manner and to the extent feasible, according to planned delivery schedules. Congress authorized an increase in annual funding for stockpiling and rapid delivery of prepackaged foods from $ 3 million to $8 million. Congress also authorized $10 million to allow USAID to conduct feasibility assessments of no less than two sites for prepositioning food aid and to establish, based on the results, additional sites in foreign countries. Improved supply-management practices, such as avoiding both procurement bunching and shipping food out of prepositioning sites first could reduce delivery costs and food spoilage, enabling U.S. food aid programs to serve additional beneficiaries. With an improved prepositioning program, U.S. agencies will also be able to respond more rapidly to food emergencies, preventing increased food insecurity in developing nations resulting from delays in food aid delivery.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should improve food aid logistical planning through cost-benefit analysis of (1) supply-management options, such as long-term transportation agreements, and (2) prepositioning, including consideration of alternative methods, such as those used by the World Food Program.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: In response to our recommendation, agencies have taken several actions. USDA now actively pursues long-term purchasing agreements with private voluntary organizations, allows transportation bookings to carry over from the fiscal year to the end of the calendar year to reduce third quarter bunching, and has disallowed certain inland transportation contracts that are difficult to monitor. USAID and DOT established pricing guidelines for long-term transportation agreements to be pursued when price conditions become less volatile. Additionally, in January 2008, USAID completed a cost-benefit analysis of prepositioning food aid. As a result, USAID officials report that they have begun to implement a new approach to prepositioning?modeled after the "K-Mart approach" where cargo is procured for the prepositioning site in advance, and when an emergency occurs, cargo from the prepositioning site is sent first (rather than last). Congress has also taken steps to facilitate the ability of U.S. agencies to implement our recommendation. In the Farm, Nutrition, and Bioenergy Act of 2007 Report, Congress encouraged USDA and USAID to continue efforts aimed at improving logistical planning of food aid to address, among other issues, the problem of bunching. In enacting the 2008 Farm Bill, Congress required USDA and USAID to undertake efforts to improve procurement planning by stipulating that the agencies shall develop procedures that ensure expedited processing of commodity requests in order to provide commodities overseas in a timely manner and to the extent feasible, according to planned delivery schedules. Congress authorized an increase in annual funding for stockpiling and rapid delivery of prepackaged foods from $ 3 million to $8 million. Congress also authorized $10 million to allow USAID to conduct feasibility assessments of no less than two sites for prepositioning food aid and to establish, based on the results, additional sites in foreign countries. Improved supply-management practices, such as avoiding both procurement bunching and shipping food out of prepositioning sites first could reduce delivery costs and food spoilage, enabling U.S. food aid programs to serve additional beneficiaries. With an improved prepositioning program, U.S. agencies will also be able to respond more rapidly to food emergencies, preventing increased food insecurity in developing nations resulting from delays in food aid delivery.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should develop an information collection system to track monetization transactions.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: Based on information provided by USAID and USDA, and our own analysis, we determined that this recommendation has been implemented. According to USAID, monetization transactions are currently reflected in annual results reports. The implementation of USAID's Quarterly Web Interfaced Commodity Reporting System was scheduled to occur in autumn 2009 and was expected to capture such transactions electronically. According to USAID officials, the system will standardize and centralize all commodity information submitted by participating organizations, thereby facilitating reporting. USDA's planned Food Aid Information System will include interaction with USAID on monetization outcomes and will provide data on commodity shipments, local conditions for monetization, and product quality. Contracting for the establishment of the system began in fiscal year 2009; and in June 2011 (GAO-11-636), we reported that final components of the system are expected to be come online in Fall 2011.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should develop an information collection system to track monetization transactions.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: Based on information provided by USAID and USDA, and our own analysis, we determined that this recommendation has been implemented. According to USAID, monetization transactions are currently reflected in annual results reports. The implementation of USAID's Quarterly Web Interfaced Commodity Reporting System was scheduled to occur in autumn 2009 and was expected to capture such transactions electronically. According to USAID officials, the system will standardize and centralize all commodity information submitted by participating organizations, thereby facilitating reporting. USDA's planned Food Aid Information System will include interaction with USAID on monetization outcomes and will provide data on commodity shipments, local conditions for monetization, and product quality. Contracting for the establishment of the system began in fiscal year 2009; and in June 2011 (GAO-11-636), we reported that final components of the system are expected to be come online in Fall 2011.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should enhance the reliability and use of needs assessments for new and existing food aid programs through better coordination among implementing organizations, make assessments a priority in informing funding decisions, and more effectively build on lessons from past targeting experiences.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: According to USAID officials, as of May 2008, USAID had indexed the assessment tools that its cooperating sponsors developed under Institutional Capacity Building grants. The index was circulated to make the assessment tools more widely available. In addition, at an Executive Board meeting of the World Food Program (WFP), the U.S. government, working with other donors, requested that WFP ensure adequate resources (not less than 1 percent of programming costs) be available for diagnosing emergency needs. USDA officials reported that, for 2009-2010, USDA had refined its methods for identifying priority countries for food aid. Specifically, for the Food for Progress and McGovern-Dole Food for Education programs, USDA determines priority countries based on the objectives of each program and factors such as per capita income levels, prevalence of undernourishment, movement towards freedom, adult literacy rates, government commitment to education and degree, if any, of civil conflict. As a result, USDA has been able to reduce the number of priority countries eligible for food aid in an effort to better target its resources. For example, the number of Food for Progress priority countries went from 28 in fiscal year 2007 to 11 is fiscal year 2009. Moreover, USDA evaluates and selects proposals based on specific criteria that may include assurances that commercial markets will not be disrupted; tangible benefits for the country's agricultural sector; the recipient country is committed to improving its quality of education and nutrition; and the program is sustainable after USDA funding ends. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually of Title II funds for monitoring and assessment activities for nonemergency programs. As a result of the additional resources that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those populations most in need will be improved.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should enhance the reliability and use of needs assessments for new and existing food aid programs through better coordination among implementing organizations, make assessments a priority in informing funding decisions, and more effectively build on lessons from past targeting experiences.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: According to USAID officials, as of May 2008, USAID had indexed the assessment tools that its cooperating sponsors developed under Institutional Capacity Building grants. The index was circulated to make the assessment tools more widely available. In addition, at an Executive Board meeting of the World Food Program (WFP), the U.S. government, working with other donors, requested that WFP ensure adequate resources (not less than 1 percent of programming costs) be available for diagnosing emergency needs. USDA officials reported that, for 2009-2010, USDA had refined its methods for identifying priority countries for food aid. Specifically, for the Food for Progress and McGovern-Dole Food for Education programs, USDA determines priority countries based on the objectives of each program and factors such as per capita income levels, prevalence of undernourishment, movement towards freedom, adult literacy rates, government commitment to education and degree, if any, of civil conflict. As a result, USDA has been able to reduce the number of priority countries eligible for food aid in an effort to better target its resources. For example, the number of Food for Progress priority countries went from 28 in fiscal year 2007 to 11 in fiscal year 2009. Moreover, USDA evaluates and selects proposals based on specific criteria that may include assurances that commercial markets will not be disrupted; tangible benefits for the country's agricultural sector; the recipient country is committed to improving its quality of education and nutrition; and the program is sustainable after USDA funding ends. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually of Title II funds for monitoring and assessment activities for nonemergency programs. As a result of the additional resources that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those populations most in need will be improved.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should improve monitoring of food aid programs to ensure proper management and implementation.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: Citing our April 2007 report, in enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually for USAID to establish a system of monitoring and assessment of nonemergency programs, including hiring additional food aid monitors in-country. Congress required USAID to report on its efforts to conduct oversight of nonemergency programs within 6 months of the enactment of the act and directed GAO to review the agency's efforts and report to Congress 9 months later. Congress' authorization of these measures, which are in line with our recommendations, will help to further advance U.S. agencies' efforts that are now under way to implement our recommendations. The House Committee on Agriculture, in Report 110-256, dated July 23, 2007, specifically cited our April 2007 report as the justification for the Committee's action requiring USAID to develop systems to improve, monitor, and evaluate the effectiveness and efficiency of assistance provided under P.L. 480. According to USAID officials, as of May 2008, USAID had collected data on current monitoring staff (all funding sources). The agency had begun the hiring process for new staff in two of its largest emergency programs (Sudan and Zimbabwe). In addition, USAID held monitoring and evaluation workshops for all Title II partners. They continued work with missions to implement Layers as well as the Lot Quality Assurance Sampling (LQAS) method. For USDA, as of May 2008, the Foreign Agricultural Service (FAS) had established a staff entirely devoted to monitoring of food aid programs. FAS has moved to reduce its backlog of open agreements (more than 60 had been closed since the reorganization of FAS). FAS also initiated a thorough review of program reporting. Finally, according to USDA, post coverage was added as criteria for determining country priority status - - support from FAS attaches would be used to better monitor program activities and help PVOs when issues arise in the field. As a result of the additional resources for field level monitoring that Congress has authorized and actions that USAID has under way, USAID?s ability to ensure that food aid resources are directed to those population most in need will be improved.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should improve monitoring of food aid programs to ensure proper management and implementation.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: Citing our April 2007 report, in enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually for USAID to establish a system of monitoring and assessment of nonemergency programs, including hiring additional food aid monitors in-country. Congress required USAID to report on its efforts to conduct oversight of nonemergency programs within 6 months of the enactment of the act and directed GAO to review the agency's efforts and report to Congress 9 months later. Congress' authorization of these measures, which are in line with our recommendations, will help to further advance U.S. agencies' efforts that are now under way to implement our recommendations. The House Committee on Agriculture, in Report 110-256, dated July 23, 2007, specifically cited our April 2007 report as the justification for the Committee's action requiring USAID to develop systems to improve, monitor, and evaluate the effectiveness and efficiency of assistance provided under P.L. 480. According to USAID officials, as of May 2008, USAID had collected data on current monitoring staff (all funding sources). The agency had begun the hiring process for new staff in two of its largest emergency programs (Sudan and Zimbabwe). In addition, USAID held monitoring and evaluation workshops for all Title II partners. They continued work with missions to implement Layers as well as the Lot Quality Assurance Sampling (LQAS) method. For USDA, as of May 2008, the Foreign Agricultural Service (FAS) had established a staff entirely devoted to monitoring of food aid programs. FAS has moved to reduce its backlog of open agreements (more than 60 had been closed since the reorganization of FAS). FAS also initiated a thorough review of program reporting. Finally, according to USDA, post coverage was added as criteria for determining country priority status - - support from FAS attaches would be used to better monitor program activities and help PVOs when issues arise in the field. As a result of the additional resources for field level monitoring that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those population most in need will be improved.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should develop a coordinated interagency mechanism to update food aid specifications and products to improve food quality and nutritional standards.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: Both USAID and USDA are already undertaking a comprehensive review of food aid specifications and products, as noted in comments to the GAO report. The review is beginning with a thorough evaluation of contracting procedures, focusing on the expeditious enforcement of contract standards to improve contract compliance. As of May 2008, according to USDA, a Request for Proposal was announced in July 2007, and SUSTAIN was awarded the contract, which is aimed to standardize and make consistent the existing food aid specifications. The second stage of the review will evaluate USDA product specifications, focusing on improving post-production commodity sampling and laboratory testing procedures. USDA has indicated that the Foreign Agricultural Service and the Farm Service Agency are responsible for this work, which has been provided a $500,000 apportionment by OMB from Commodity Credit Corporation funds. The third stage will review options on nutritional quality and cost effectiveness of commodities currently provided USAID and USDA food aid to ensure that the food is of the highest caliber to meet the nutritional requirements necessary to address today's beneficiaries. It will study the present mix and uses of food aid commodities and recommendations for future use, including possible new formulations USAID is conducting and funding this effort from P.L. 480, Title II, funds. In July 2008, USAID officials reported posting the Request for Information and Presolicitation Notice on grants.gov and a formal Request for Proposals was to follow. A presolicitation RFP for a study and recommendations of food aid formulations has been posted and closes August 27, 2008. According to a USAID official, the review will examine the role of fortified and/or enriched commodities in the context of total available dietary resources, including a scientific review of current enrichment and fortification technologies, methods for delivery of micronutrients a consultative process that includes industry, academic and operational experts and ultimately, recommendations as to how to most cost-effectively meet the nutritional needs of P.L. 480 Title II beneficiary populations with food aid commodities. The micronutrient profiles and needs of each group shall be described and the role of food aid commodities to respond to those needs shall be analyzed through a series of technical briefing papers. As a result of new funding that Congress authorized and agencies' actions to improve food aid specifications and products, the nutritional quality of food aid will be enhanced, thus increasing the likelihood that vulnerable populations receive food that is nutritious and appropriate.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should develop a coordinated interagency mechanism to update food aid specifications and products to improve food quality and nutritional standards.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: Both USAID and USDA are already undertaking a comprehensive review of food aid specifications and products, as noted in comments to the GAO report. The review is beginning with a thorough evaluation of contracting procedures, focusing on the expeditious enforcement of contract standards to improve contract compliance. As of May 2008, according to USDA, a Request for Proposal was announced in July 2007, and SUSTAIN was awarded the contract, which is aimed to standardize and make consistent the existing food aid specifications. The second stage of the review will evaluate USDA product specifications, focusing on improving post-production commodity sampling and laboratory testing procedures. USDA has indicated that the Foreign Agricultural Service and the Farm Service Agency are responsible for this work, which has been provided a $500,000 apportionment by OMB from Commodity Credit Corporation funds. The third stage will review options on nutritional quality and cost effectiveness of commodities currently provided USAID and USDA food aid to ensure that the food is of the highest caliber to meet the nutritional requirements necessary to address today's beneficiaries. It will study the present mix and uses of food aid commodities and recommendations for future use, including possible new formulations USAID is conducting and funding this effort from P.L. 480, Title II, funds. In July 2008, USAID officials reported posting the Request for Information and Presolicitation Notice on grants.gov and a formal Request for Proposals was to follow. A presolicitation RFP for a study and recommendations of food aid formulations has been posted and closes August 27, 2008. According to a USAID official, the review will examine the role of fortified and/or enriched commodities in the context of total available dietary resources, including a scientific review of current enrichment and fortification technologies, methods for delivery of micronutrients a consultative process that includes industry, academic and operational experts and ultimately, recommendations as to how to most cost-effectively meet the nutritional needs of P.L. 480 Title II beneficiary populations with food aid commodities. The micronutrient profiles and needs of each group shall be described and the role of food aid commodities to respond to those needs shall be analyzed through a series of technical briefing papers. As a result of new funding that Congress authorized and agencies' actions to improve food aid specifications and products, the nutritional quality of food aid will be enhanced, thus increasing the likelihood that vulnerable populations receive food that is nutritious and appropriate.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should determine ways to provide adequate nonfood resources in situations where there is sufficient evidence that such assistance will enhance the effectiveness of food aid.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: In its response to GAO's recommendations under 31 U.S.C. 720, USAID stated that under the new U.S. Foreign Assistance Framework, it would seek to better integrate food aid with other development programs. In May 2008, USAID stated that new Title II programs in Mozambique and Congo will be linked with complementary Development Assistance (DA) funding while new programs in Ethiopia, Haiti, and Uganda will be linked with complementary President's Emergency Plan for AIDS Relief (PEPFAR) resources. USDA noted that it already provides for the use of nonfood resources through direct cash funding in Food for Education and its liberal interpretations for the use of monetized proceed for Food for Progress. In Report 110-256 dated July 23, 2007, the House Committee on Agriculture specifically cited our April 2007 report in making provisions for the food assistance and development programs in the Farm Bill. The Committee took action to raise the amount that USAID can pay participating organizations for project, administrative, and other costs and added a provision to allow these organizations to use the funds for monitoring and project oversight. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized increasing the amount of section 202 (e) funding from not less than 7.5 percent but no more than 13 percent (previously 5 to 10 percent). It allows using these funds for improving and implementing methodologies for food aid programs including needs assessments (upon the request of the Administrator), monitoring, and evaluation. As a result of the additional resources for that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those population most in need will be improved.

    Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should determine ways to provide adequate nonfood resources in situations where there is sufficient evidence that such assistance will enhance the effectiveness of food aid.

    Agency Affected: United States Agency for International Development

    Status: Closed - Implemented

    Comments: In its response to GAO's recommendations under 31 U.S.C. 720, USAID stated that under the new U.S. Foreign Assistance Framework, it would seek to better integrate food aid with other development programs. In May 2008, USAID stated that new Title II programs in Mozambique and Congo will be linked with complementary Development Assistance (DA) funding while new programs in Ethiopia, Haiti, and Uganda will be linked with complementary President's Emergency Plan for AIDS Relief (PEPFAR) resources. USDA noted that it already provides for the use of nonfood resources through direct cash funding in Food for Education and its liberal interpretations for the use of monetized proceed for Food for Progress. In Report 110-256 dated July 23, 2007, the House Committee on Agriculture specifically cited our April 2007 report in making provisions for the food assistance and development programs in the Farm Bill. The Committee took action to raise the amount that USAID can pay participating organizations for project, administrative, and other costs and added a provision to allow these organizations to use the funds for monitoring and project oversight. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized increasing the amount of section 202 (e) funding from to not less than 7.5 percent but no more than 13 percent (previously 5 to 10 percent). It allows using these funds for improving and implementing methodologies for food aid programs including needs assessments (upon the request of the Administrator), monitoring, and evaluation. As a result of the additional resources for that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those population most in need will be improved.

    Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should improve food aid logistical planning through cost-benefit analysis of (1) supply-management options, such as long-term transportation agreements, and (2) prepositioning, including consideration of alternative methods, such as those used by the World Food Program.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In response to our recommendation, agencies have taken several actions. USDA now actively pursues long-term purchasing agreements with private voluntary organizations, allows transportation bookings to carry over from the fiscal year to the end of the calendar year to reduce third quarter bunching, and has disallowed certain inland transportation contracts that are difficult to monitor. USAID and DOT established pricing guidelines for long-term transportation agreements to be pursued when price conditions become less volatile. Additionally, in January 2008, USAID completed a cost-benefit analysis of prepositioning food aid. As a result, USAID officials report that they have begun to implement a new approach to prepositioning modeled after the K-Mart approach where cargo is procured for the prepositioning site in advance, and when an emergency occurs, cargo from the prepositioning site is sent first (rather than last). Congress has also taken steps to facilitate the ability of U.S. agencies to implement our recommendation. In the Farm, Nutrition, and Bioenergy Act of 2007 Report, Congress encouraged USDA and USAID to continue efforts aimed at improving logistical planning of food aid to address, among other issues, the problem of bunching. In enacting the 2008 Farm Bill, Congress required USDA and USAID to undertake efforts to improve procurement planning by stipulating that the agencies shall develop procedures that ensure expedited processing of commodity requests in order to provide commodities overseas in a timely manner and to the extent feasible, according to planned delivery schedules. Congress authorized an increase in annual funding for stockpiling and rapid delivery of prepackaged foods from $ 3 million to $8 million. Congress also authorized $10 million to allow USAID to conduct feasibility assessments of no less than two sites for prepositioning food aid and to establish, based on the results, additional sites in foreign countries. Improved supply-management practices, such as avoiding both procurement bunching and shipping food out of prepositioning sites first could reduce delivery costs and food spoilage, enabling U.S. food aid programs to serve additional beneficiaries. With an improved prepositioning program, U.S. agencies will also be able to respond more rapidly to food emergencies, preventing increased food insecurity in developing nations resulting from delays in food aid delivery.

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