Agricultural Trade:

Review of Targeted Export Assistance Program

NSIAD-88-183: Published: May 24, 1988. Publicly Released: May 24, 1988.

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Allan I. Mendelowitz
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Pursuant to a congressional request, GAO reviewed the Department of Agriculture's Targeted Export Assistance (TEA) program, focusing on the: (1) program's management, including the Foreign Agricultural Service's (FAS) documentation of its participant eligibility and funding allocation decisions; and (2) adequacy of the FAS evaluation process, how evaluations affect present and future funding allocations, and the commodities, activities, and geographical markets receiving TEA funds.

GAO found that: (1) FAS did not provide sufficient documentation for funding decisions, making it difficult to assess whether FAS applied funding criteria equitably and consistently; (2) FAS did not adequately solicit TEA applications at the onset of the program, which gave former or current participants in the Cooperator Market Development Program an advantage in applying for TEA funds; (3) FAS based most of its decisions on the TEA applications and not on the more detailed activity plans; (4) some TEA applications did not contain the necessary data for FAS to conduct in-depth marketing analyses of the proposed commodities and countries; (5) some participants did not have the opportunity to review TEA guideline changes; and (6) the tripling of TEA funding in the program's last 2 years would exacerbate management problems. GAO also found that: (1) contribution level and form requirements varied among participants, but FAS did not document the reasons for these variations; (2) participants did not adequately document the identities of third-party contributors and the methods used to derive their contribution levels; and (3) FAS did not closely monitor the nonprofit trade associations' administration of brand-identified promotion, resulting in some potential TEA participants not receiving timely program information. In addition, GAO found that FAS did not provide formal written guidelines on evaluation content, focus, cost, or characteristics of an acceptable third-party evaluator.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FAS is still not adequately documenting its funding allocation process, preferring to rely on verbal information for many decisions. According to FAS, it is not conducting in-depth marketing analyses because the staff does not have time to do this. FAS has established regulations and is taking steps to improve documentation and other concerns expressed in the June 1990 report.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FAS, to: (1) document the funding allocation decision process to clearly show how funding criteria were applied and prioritized and the basis for those decisions; (2) base the funding allocation decisions not only on the applications and TEA proposals, but also on the activity plans; (3) conduct ongoing, in-depth marketing analyses for all TEA commodities and their countries or regions of promotion to ensure that TEA funds are allocated for those commodities and markets with the greatest potential for successful market development; and (4) provide all TEA participants with an opportunity to review and comment on proposed TEA guideline additions and changes, including a written record of any such proceedings.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: It is still not clear how FAS determines contribution amounts. FAS does not document reasons for the variation and continues to state that each case must be individually assessed. Third-party contributions are not verified by activity, according to OIG, which could impact program effectiveness, if such contributions are significantly less than planned.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FAS, to: (1) document in writing the basis for the form and level of contributions for each TEA participant; (2) define the importance of third-party contributions in the funding decision process and more closely enforce the FAS guideline that the participants document the method by which third-party contributions are derived and the identities of the parties involved; and (3) more closely monitor TEA funds allocated for brand-identified promotion to ensure that all eligible private firms receive timely information about the program and have an opportunity to apply for TEA funds.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: FAS has a fully staffed program evaluation unit, under the direction of a new assistant administrator. This office may improve upon its tracking and utilization of evaluations. FAS has had a limited reorganization effective since April 1990, which established a new Planning and Evaluation Staff whose purpose is to conduct evaluations of ten programs and do cross-commodity analyses.

    Recommendation: To help in the establishment of the new FAS Marketing Programs Division's Program Evaluation Section, the Secretary of Agriculture should direct the Administrator, FAS, to: (1) develop specific criteria to be included in the TEA guidelines for evaluating the TEA program; (2) require that the TEA evaluations be completed to coincide with the FAS application approval and funding allocation process; and (3) implement a formal system of internal controls for collecting, tracking, and documenting the progress and results of the TEA evaluations, including their impact on funding allocation decisions.

    Agency Affected: Department of Agriculture


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