Managing the Transportation of U.S.-Donated Food to Developing Countries

ID-83-24: Published: Mar 3, 1983. Publicly Released: Mar 3, 1983.

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Pursuant to a congressional request, GAO examined Agency for International Development (AID) and U.S. Department of Agriculture (USDA) procedures for managing the shipping and freight-forwarding functions for the Public Law 480, Title II food donation program.

GAO found that the procedures followed by private-sector freight forwarders in behalf of private voluntary organizations (PVO's) and AID and those used by USDA for booking and forwarding ocean freight are similar and generally adequate to protect the interests of the Federal Government. Further, GAO tests of transactions and information obtained indicated that their performances are not sufficiently different enough to substantially favor one group over another in carrying out the freight-forwarding function. GAO found that private freight forwarders and USDA often obtain more favorable ocean freight rates than those determined by USDA guidelines and that both groups encourage a high level of competition among ocean carriers to obtain economical rates. The examination of claims, collections, and loss data on food shipped by USDA and the most active PVO's showed that they settled claims within similar timeframes and that there were no significant differences in cargo losses.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: USDA believes that its current procedures are adequate to ensure lowest available freight rates for cargo booked by its P.L. 480 Operations Division and that ultimate responsibility for examination of freight bills for PVO's rests with AID. Although AID pledges to implement monitoring procedures, GAO feels that USDA monitoring would provide added internal control over possible losses and abuse.

    Recommendation: The Secretary of Agriculture should require that procedures be established to routinely examine the actual freight charges which appear on the bills of lading from all program sponsors to help ensure that they do not exceed those determined by its lowest landed cost procedure.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should require PVO's to monitor the activities of their freight forwarders by comparing, prior to payment, freight forwarder payment requests with USDA guidelines to verify that ocean freight charges comply with the lowest landed cost determination.

    Agency Affected: United States Agency for International Development


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