Detailed Information on the
USDA Food Aid Programs Assessment

Develop and implement a new food aid database with user web-interface - the Food Aid Information System.

Improve the timeliness of notifying cooperating sponsors when they are late in submitting required semi-annual reports on logistics and monetization.

FAS has developed and continues to work with AID and OMB to refine a new food security annual performance measure and baseline.

Financial management improvements in the areas of credit reform, budget reporting and reimbursements are on-going.

FAS has contracted for a review of food aid information and reporting systems that will identify areas for improvement in IT systems that will lead to program efficiencies down the road. This review is on-going.

Measure: Food aid "targeting" effectiveness ratio (measured on an annual basis)

Explanation:The USDA food aid programs meet both development and nutrition needs and involve direct distribution of food and monetization of commodities donated. The development aspects of food aid involve the monetization (sale) of the food aid and the implementation of long-term development projects that benefit the people of the recipient country. The Food Aid Targeting Effectiveness Ratio (FATER) examines the degree to which food aid contributes to reducing a country's food distribution gap. The food distribution gap is the amount of food needed to raise consumption of each income group to the minimum nutritional requirement. When the FATER is zero, then this suggests that food aid was given to a country or countries, in which all people were at or above the minimum nutritional requirement. When the FATER is 100, then it is estimated that food aid raised the consumption of all income groups in a recipient country or countries to the minimum nutritional requirement level or above.

Measure: Application Response Time

Explanation:Decreased application processing time allows USDA and grant recipients to get Food Aid Agreements negotiated and signed earlier in the year, which provides for a larger window of time to procure and ship the commodities. This larger window allows for flexibility in obtaining efficient combinations of commodity and freight costs and will lead to large cost savings and better customer service to our grant recipients. FAS will be using the new WBSCM system as soon as it is operational and has been very involved in the design of the system since the beginning of the project. While the system isn't expected to generate cost savings specifically in the bid and freight tender process, it will be a much more efficient interface than the current system. The efficient interface will allow for considerable savings in time for both USDA employees and Cooperating Sponsors.

Measure: Metric Tons shipped in a given fiscal year

Explanation:The number of metric tons shipped is a traditional measure of food aid, but in reality it is not very effective in demonstrating program results, as programming levels are determined by the amount of available funds. Consequently, a relatively fixed funding level over the years, in combination with rising commodity and fuel prices, has led to lower tonnages of food aid shipped. Additionally, many of USDA's food aid programs have shifted from lower priced commodities sent in bulk to higher priced commodities and processed products sent in containers, adding to the higher costs and consequently lower tonnages. Baseline was established from existing data. Targets are developed using simple forecasts of commodity and fuel prices and an estimate of future funding levels.

Measure: Reduce the number of the world's hungry people by one-half by 2015 through the administration of food aid (Baseline and targets under development).

Explanation:FAS and USAID are continuing to develop a means to measure our contribution this long-term outcome.

Is the program purpose clear?

Explanation: USDA Food Aid programs assist developing countries meet their food security needs, and also reflect USDA's domestic commodity interest in its programs. PL 480, Title I - Commercial market development and sustainability through the use of long-term concessional sales. Food for Progress (FFP) - Enterprise development for developing countries and emerging democracies expanding free enterprise elements in their agricultural economies through changes in commodity pricing, marketing, input availability, distribution, and private sector involvement. Section 416(b) Commodity Donations - Program of food security assistance using CCC-owned commodities exceeding U.S. supply needs. Bill Emerson Humanitarian Trust (BEHT) - A commodity reserve available for release in response to unanticipated, emergency food aid needs, and in tight U.S. commodity supply situations. McGovern-Dole International Food for Education and Child Nutrition Program (FFE program) - provides donations of U.S. commodities, financial & technical assistance, for school feeding and maternal and child nutrition projects in low-income, food-deficitcountries that are committed to universal education.

Evidence: PL 480 Title I - Agricultural Trade Development and Assistance Act of 1954, as amended, Public Law 480, Title I, secs. 2, 101; FAS Fact Sheet; U.S. Food Aid Programs - www.fas.usda.gov/excredits/pl480/pl480ofst.html; Report on the Food Agriculture, Conservation, and Trade Act of 1990, Senate Committee on Agriculture, July 6, 1990, p. 167; GAO Report GAO/GGD-95-68, Food Aid (June 1995); GAO-02-801T pp9-12; FFP - Food for Progress Act of 1985, sec. 1110; US International Food Assistance Report 2001 (USAID Annual Report), p. 27; FY 2002 Programming Considerations (1.2),(1.3) www.fas.usda.gov/excredits/pl480/fy2002.html - Section 416(b) of the Agricultural Act of 1949; BEHT - Title III of the Agricultural Act of 1980, as amended. McGovern Dole Food for Education and Child Nutrition Programs-Farm Security and Rural Investment Act of 2002, FAS Fact Sheet: McGovern-Dole Food for Education

Does the program address a specific and existing problem, interest or need?

Explanation: Global statistics on the level of hunger, malnutrition, and agricultural production failures indicate a compelling need for USG food aid programs. PL 480, Title I - A vehicle for countries not able to fully support their food security needs but which are not necessarily in humanitarian crisis, the program serves as a bridge to agricultural sustainability through long-term repayment at concessional interest rates. FFP -Private sector development and expansion of a free-enterprise agricultural economy in emerging democracies and developing countries. §416(b) - The donation of CCC inventory to help improve food security in developing and friendly countries. BEHT - The BEHT was established to provide emergency food assistance to developing countries that cannot be met under normal means in a timely manner or when the domestic supply of the commodity is limited. McGovern-Dole International Food for Education and Child Nutrition Program (FFE) - provides for donations of U.S. agricultural products, financial, and technical assistance for school feeding and maternal and child nutrition projects in low-income, food-deficit countries that are committed to universal education.

Evidence: Declaration of the World Food Summit, FAO (6/02); State of World Food Security, Undernourishment and The Way Ahead (FAO 2001); Feeding an Urban World (FAO 6/02); A Millennium Free From Hunger, Interagency Working Group on Food Security (IWG) (2000); U.S. Action Plan on Food Security, Appendix A (3/00); PL 480, Title I - Agricultural Trade Development and Assistance Act of 1954, as amended, Public Law 480, Title I; FFP - US Food Aid Programs Description; §416(b) - World Agricultural Supply and Demand Estimate (WASDE) Tables; Determination of Availability of CCC Commodities for Donation Overseas Under §416(b); Testimony of U.S. Rep.McGovern (6/02); BEHT - Title III of the Agricultural Act of 1980, as amended; FFE - Farm Security and Rural Investment Act of 2002

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: Food Aid Programs provide humanitarian assistance in the forms of direct feeding, extraordinary relief of famine, malnutrition, hunger and mortality, economic development, sound environmental practices, skills development, economic growth and community development. Some of the programs make a unique contribution to agricultural development. The President's Food Aid Management Reform initiative considered food aid programs at USDA and USAID and put in policies that minimize duplication with USAID programs.

Evidence: PL 480, Title I - Agricultural Trade Development and Assistance Act of 1954, as amended, Public Law 480, Title I FFP - FY 2002 Programming Considerations (1.1 a) §416(b) - FAS Fact Sheet; Programs Description; Food Aid Tables - showing amount of commodities provided to FFP derived from Title I and §416(b) authorities BEHT - Title III of the Agricultural Act of 1980, as amended; Bill Emerson Humanitarian Trust Background Paper; FFE - FAS Fact Sheet; Farm Security and Rural Investment Act of 2002.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The high default rate on long term concessional food aid sales raises doubt on whether the program design for P.L. 480 Title I is ideal to achieve food security and development commercial markets. This question needs to be examined more fully, in light of the level of Title I funding and the growth of Food for Progress grants utilizing Title I funds. FAS has done a good job at internal design of delivery mechanisms through online standardized program applications. Applicants have easy access to the detailed requirements for program consideration and approval through the USDA/FAS website or the government-wide central "kiosk" for grants. FAS and FSA with USAID need to coordinate to ensure consistency in front end commodity procurement, automation of freight bids and billings, and reporting. FAS is leading an an Interagency Requirements Study that is aimed at identifying data sharing and automation consistency among food aid programs across USDA, and USAID. FAS on-line application process has simplified the evaluation and decision-making period for its food aid programs that could serve as an example for all food aid programs. A key factor affecting the effectiveness and efficiency of food aid programs is the time it takes to purchase and ship the commodity. Commodity purchases take place in 9-10 months of a typical 15-month commodity purchasing period (contrary to the perception that these purchases occur only in the last quarter of the fiscal year). Efforts to spread out commodity purchases to earlier in the fiscal year have been successful. USDA's food aid programs have also been reviewed for effectiveness and efficiency in the context of the Administration's review of U.S. food aid programs in early 2002. The review called for a shift in emergency donations away from Sec. 416(b) to PL 480, Title II to stabilize the availability of food aid. This shift to Title II has been implemented.

Evidence: Brandegee Report on USDA/USAID Export Food Aid Operations (12/1999), Appendices A, D & G; Bush Administration Food Aid Review/Summary of Conclusions (3/8/02)

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: From start (program application process) to finish (commodities shipped to the recipients), USDA's food aid programs are targeted to reach the intended beneficiaries and address the programs' purpose directly. Program applications include very detailed questions to ensure that applicants can demonstrate planned programs meet the goal of reducing hunger and/or promote economic and agricultural development. Applicants must provide the basis for selecting program beneficiaries and the program's need, the economic impacts of the program, why particular geographic locations for the program were chosen, the data used to identify the beneficiary group and food ration size per direct beneficiary. Applicants must also provide detailed information on how they will measure the program's progress in terms of the types of beneficiaries and the number of beneficiaries, the timeframe involved, plans on how the food will be transported, stored and distributed and show how the commodities imported will not adversely affect the local market for that commodity. In assessing progress in reducing hunger, it can be shown that USDA food aid programs furnished commodities to 94 countries and regions in FY 2002 & FY 2003. Of these 94 countries, 67 countries representing 71% of the total are classified as the most food insecure according to to USDA/Economic Research Service's(ERS) Food Security Assessment(FSA) Model. According to the model, the most food insecure countries received the largest share of commodities provided from USDA's food aid programs--over 70% of total metric ton grain equivalents (MTGE). Country classifications according to the Food Aid Convention* and the FAO also show that the largest share of USDA food aid is going to countries with the greatest need. Least developed countries and low income countries according to the Food Aid Conventions' list of eligible food recipients received 59% and 65%, respectively, of the total MTGE provided by USDA's FY 2002 & FY 2003 food aid programs.

Evidence: USDA/ERS Food Security Assessment Report (February 2003); FY 2002 & FY 2003 Food Aid Shipments (Table 3); 1999 Food Aid Convention, Annex B; Program Considerations http://www.fas.usda.gov/excredits/FoodAid/, The State of Food Insecurity in the World, 2003, FAOBased on FAO's classification of where undernourishment is greatest, 50% of the MTGE furnished under USDA food aid programs in FY 2002 & FY 2003 went to countries where undernourishment exceeded 20% of the population. The MTGE share provided by USDA's food aid programs rises to nearly 80% for countries where undernourishment exceeds 5% of the population. (* Food aid recipients refer to Developing Countries and Territories listed as aid recipients by the Development Assistance Committee (DAC) of the OECD, effective Jan. 1, 1997, and to countries included in the WTO list of Net Food-Importing Developing Countries, effective Mar. 1, 1999).

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: USDA food aid programs have two goals. The first goal to contribute to a reduction in the number of the world's hungry people by one-half by 2015 through the administration of food aid. Reducing the number of hungry people is one of the targeted goals of the U.N. Millenium Declaration adopted by all 189 member states in September 2000 and follows from actions adopted at the Rome World Food Summit in 1996. USAID has also adopted the goal of contributing to a reduction in hunger. USAID states in its Concept Paper that Title II resources will be used to contribute to the vision of "a world free of hunger and poverty, where people live in dignity, peace and security." USDA/FAS is working with ERS to develop an annual measurement of this goal. The second goal of USDA food aid programs is to support international economic development and trade capacity building, as stated in Strategic Goal II of the FAS Strategic Plan.

Evidence: FAS Strategic Plan: 2003-2007 - Goal II, Objectives 2.1 and 2.2; U.S. Action Plan on Food Security, Executive Summary, p. 1; GAO Report GAO/NSIAD-99-15, Food Security, (March 1999), p. 1; US International Food Assistance Report 2001 (USAID Annual Report), p. 7

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Goal I of USDA's food aid programs is to contribute to the Millenium Development Goal (MDG) to reduce the number of the world's hungry people by one-half by 2015. This goal supports both USDA and FAS Strategic Plans. The USDA Plan in Objective 1.2 calls for "...targeted foreign food assistance that assists developing and transition countries in meeting their immediate food and agricultural import needs and that fosters economic growth and development..." Similarly, the FAS Plan includes a goal to "support international economic development and trade capacity building" by administering "foreign food aid and other assistance programs to meet international food security challenges and U.S. Government commitments." This ambitious goal is shared with other food aid providers including the United Nation's World Food Program (WFP) and AID's Office for Food for Peace which administers the PL 480 Title II program. WFP, in its Strategic Plan for FY 2002-2005, states its goal is, "Excellence in providing food assistance that enables all planned beneficiaries of WFP relief activities to survive and maintain healthy nutritional status, and enabling the social and economic development of at least 30 million hungry people every year." In its Concept Paper, AID states that Title II resources will be used to contribute to the vision of "a world free of hunger and poverty, where people live in dignity, peace and security." Estimates from IFPRI (International Food Policy Research Institute) and FAO suggest that it may take until 2050 (rather than 2015) to cut the number of hungry people by one-half. The World Bank estimates additional foreign aid of $40-$60 billion annually is needed to achieve the MDG by 2015, about double the current level of aid. USDA's food aid budget is appreciably smaller than AID or WFP's budget, therefore, our ability to impact the MDG is more limited. Nevertheless, our food aid programs can contribute to the MDG.

Evidence: "Ending Hunger by 2050: Crucial Investments and Policies, IFPRI; The Costs of Attaining the Millenium Development Goals, based on a World Bank Policy Research Working Paper; Strategic Plan, FY 2002-FY 2005, World Food Program, Concept Paper, AID Office of Food for Peace, USDA's Strategic Plan for FY 2002-2007; FAS Strategic Plan, Annual Performance Goals, FY 2004-FY 2005

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Significant progress has been made toward developing annual performance measures. FAS and USDA/ERS have developed an annual performance measure utilizing the long-standing ERS Food Security Assessment (FSA) model, which estimates the food distribution gap for approximately 70 of the world's most food insecure countries. This model is updated annually. ERS has calculated the contribution of USDA's food aid programs in reducing the gap (for these most food insecure countries) based on FY 2002 and FY 2003 USDA food aid program data. This measure is expressed as a food aid effectiveness ratio. FAS will use this ratio as an interim performance measure for USDA's food aid programs, and is also testing the measure with USAID food aid data. This measure is a significant start towards assessing USDA food aid programs' progress in meeting Goal I to reduce hunger by one-half by 2015. USDA has established a schedule to further refine the measure andmeasures and develop an additional measure that demonstrates performance towards Goal II which focuses on agricultural and economic development rather than food security. An annual efficiency measure is also being adopted which captures response time to food aid program applications.

Evidence: ERS Food Security Assessment Model: Annual Reports; Results from Food Security Assessment Model using USDA/FAS data for FY 2002 & FY 2003.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Using the annual food security measure described in 2.3, FAS and ERS will examine a third year of actual USDA food aid data (FY 2001), after which a baseline and targets will be established. Currently, the largest USDA food aid program, Food for Progress, has as its main objective, development, and not food security. This focus on development is in keeping with the President's Food Aid Review conducted in early 2002 which recommended that AID implement emergency humanitarian food aid and that USDA programs focus on economic and agricultural development. In both FY 2002 and FY 2003, 62% of USDA's food aid programs (in dollars) supported development objectives and not food security. After an additional annual measure is developed to measure economic development, corresponding baselines and targets will be established. A baseline will also be established incorporating the new annual efficiency measure.

Evidence: ERS Food Security Assessment: Annual Reports; FY 2002 and FY 2003 USDA Food Aid Programmed (Table)

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Program partners directly commit to program goals through their contractual obligations. USDA's Foreign Agricultural Service (FAS) monitors and enforces compliance of in-country, Private Voluntary Organization (PVO) and intergovernmental concessional programs with the contractual provisions contained in the agreements. Contractual provisions, which must be agreed and adhered to by program partners, are designed to specifically address and adhere to the agency's food security and sustainability goals, and the law. Program partners and the agency share a long history of partnership in program planning. An annual FAS/cooperating sponsor Food Aid Forum ensures two-way communication of mutual expectations and responsibilities. FAS has a new Food Aid Information System (FAIS) that allows direct electronic information exchange of proposals, budgets and amendments, as well as incorporating partner input in process development, improvement and idea exchange.

Evidence: Evaluation & Compliance Checklist: Food for Progress/Section 416(b) Agreements; Food Aid Forum Brochure; Brandegee Report - Appendix D; XL Report on Business Process Reengineering (BPR) in Export Credits Food Aid Programs (03/2002); Sample FFP Food Aid Application Program Evaluation Package, including - (i) Signed Agreement (USG and Int'l Orthodox Christian Charities, June, 1998), with Plan of Operation, Commodity Specifications and Program Budgets, (ii) Evaluation & Compliance Checklist, (iii) Evaluation of Compliance and Performance of Completed Programs, (iv) Closure Letter, and (v) PVO Evaluation Sheets, 09/02 and -8/00

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: USDA requires regular reporting on all programs, including extensive independent evaluations. Programs undergo frequent and regular audit and evaluation by the GAO, OIG and other USDA agencies, Congress and various independent consultant groups. Within FAS, the Compliance Review Staff (CRS) and the Evaluations Branch (ESPB) conduct site visits. Program partner performance is audited pursuant to OMB Circular A-133 by an independent auditor.

Evidence: PVO sample audit - Int'l Orthodox Christian Charities, Financial Report, 12/31/00; 7 C.F.R. 1499.17; OMB Circular A-133; GAO reports - GAO-02-328, Foreign Assistance: Global Food for Education Initiative (Feb. 2002), GAO/NSIAD/AIMD-00-329, Foreign Assistance: Russia (September 2000), GAO/NSIAD-00-175 Foreign Assistance: N. Korea (June 2000), GAO/NSIAD-00-91, Foreign Assistance: Russia Seed (March 2000), GAO/GGD-95-68, Food Aid (June 1995); Food Security Assessment, ERS, GFA-13 (3/02); CRS Issue Brief, Agricultural Export and Food Aid Programs (02/21/2002); Report to Congress on Food Aid Monetization (08/2001); XL Report; Brandegee Report; EDS Report on Export Operations Tracking System (EOTS) Business Process Study (1995); Mendez England Report Comparing Title I, Title II and § 416(b) Program Requirements; Office of Inspector General (OIG) Audit, FAS FFP PVO Grant Fund Accountability, Evaluation Report No. 50801-6-At (3/99); Bush Administration Food Aid Review/Summary of Conclusions (3/8/02); Site Evaluation Reports, N. Korea (8/02), Vietnam/Indonesia (3/02), Guatemala (2/02)

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Currently, the budget is tied only to output measures of tonnage shipped. Beginning with the FY 2006 Budget, the food aid effectiveness ratio will be incorporated as a preliminary annual performance measure. Measures of food security and economic development will need further refinement to tie to resource requests.

Evidence: FY 2006 Agency and Department Budget Congressional Justification.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The most significant corrective step taken is developing the food aid security model as an interim performance measure to assess USDA's food aid programs' contribution toward Goal I of reducing the number of the world's hungry people. In FY 2003/04, FAS also received funding for a study which would allow for the U.S. Government (USG) food aid agencies (FAS, FSA,USAID and Maritime Administration) to exchange information among various computer systems, a capability which does not now exist. With this capability, it will be possible to track which program agreements have been signed for a particular country across the agencies. Having this information exchange will allow for easier and more current reporting on what the USG overall is doing with respect to food aid programming at any point in time and is likely to lead to better, more coordinated U.S. food aid responses. In FY 2002, a business process re-engineering process (BPR) study was completed. As addressed in the answer to question 1.4, the application process has been streamlined; most program application approval times have been reduced significantly and commodity purchases have been spread out more over the course of the year. These undertakings support The President's food aid reform agenda, a management reform effort to maximize the performance outcome of all USG food aid of the resources. This effort has involved coordination of strategic planning between USDA and USAID.

Evidence: Summary of President's Management Review of Foreign Food Aid Activities (March 8, 2002); Summary of President's Management Review of U.S. Food Aid Programs; XL Report; Farm Security and Rural Investment Act of 2002, sec. 3106(i)(1); Food for Progress Act of 1985, 7 U.S.C. 1736(j)(1); Agreement Between USG and the Vishnevskaya-Rostropovich Foundation for the Supply of Agricultural Commodities under FFP (September 2000); ERS Food Security Assessment Model: Preliminary Results for USDA's Food Aid Programs, FY 2002, FY 2003.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: USDA FAS monitors the effectiveness of in-country/Private Voluntary Organization (PVO) programs, through a system of checks and balances that involve logistical, monetized and financial reporting mechanisms. A performance based review system has been incorporated into the review process. The lack of an integrated database of food aid information makes record keeping, reports and performance measurement difficult. For the future, the new FAIS system will incorporate a number of real-time and historic performance measures directly into the evaluations database for instant, regular progress assessments. These will include total number/percentage of proposals/agreements existing, approved, executed and closed; time to signature and delivery; amendments required; ratio of tonnage shipped to tonnage programmed; number of late logistics and monetization reports; number of delivery difficulties; etc. The new database will significantly improve project evaluation and the accuracy of reported data.

Evidence: Office of Inspector General (OIG) - Audit, FAS FFP PVO Grant Fund Accountability, Evaluation Report No. 50801-6-At (March 1999); Sample Logistics and Monetization (LOGMON) Reports - Kyrgyzstan 11/15/2001 & Tajikistan 3/27/2002 (MCI); XL Report - Appendices 2 and 3, which enumerate performance measures to allow for timely and credible monitoring, tracking and evaluation of proposal processing, commodity deliveries and, through freeing up Evaluation Branch resources, individual project successes.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: FAS uses a performance based review system to evaluate grant and contract renewals using past performance data measured against performance criteria. PVOs must provide FAS with quarterly financial reports, and semi-annual logistics and monetization reports. Using this system, FAS has issued reprimands, suspensions, program disbarments and sought recovery of funds when agreements were violated. USDA food aid agreements are subject to "usual marketing requirements" (UMRs) to ensure that food aid will not unduly disrupt agricultural commodity prices and normal patterns of commercial trade in the recipient country. Food Aid proposals are not awarded if analysis shows that the commodities would undercut the market, a determination made for each specific recipient market. Program managers receive annual personnel performance evaluations tied to job performance in meeting program goals.

Evidence: Sample FFP Food Aid Application Program Evaluation Package; Sample Usual Marketing Requirement (UMR) Program Justifications - Guatemala Soybean Meal (2003) and Niger Vegetable Oil (2003); Sample Bellmon Analyses - Bolivian FFP Agreement (2003) and Bangladeshi §416(b) Agreement (2003); Performance Appraisal and Worksheet, Form AD-435; Agreement Between Foreign Agricultural Service (FAS) and American Federation of State, County and Municipal Employees Local 3976 (AFSCME) (1997, Renegotiated 1999), Art. 23, Performance Appraisal

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: PVO-partners must expend any funds advanced by USDA within 180 days from date of advancement. Any unexpended advanced funds not utilized within this timeframe are returned to USDA along with the interest earned. All programs require a Plan of Operation or development plan which includes a plan and schedule for the use of sales proceeds and program commodities. Agreements also include objectives and timelines for program implementation. All agreements are signed during the fiscal year. Procurements then proceed in a timely fashion with only limited late-cycle purchases carried over into the next fiscal year.

Evidence: Farm Security and Rural Investment Act of 2002, Sec. 3106 (Food for Progress), Sec. 3201 (Section 416(b)); Sample Plan of Operation (Attachment A); Evaluation & Compliance Checklist: Food for Progress/Section 416(b) Agreements; Compliance Report for Food Aid Agreements; Regulations 7 CFR 1499.7(f), (g), (h), and 1499.12(c)

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: While improvements are being made in this area, particularly evidenced by the PVO application approval process which has been streamlined, and the proposed FAIS system that will integrate data and incorporating future efficiency measures and targets. Further progress is needed to fully implement the lowest landed procurement of commodities and freight which while partially automated, remains encumbered manual, multilayered processes. A "yes" answer on this question requires that the performance plan include an efficiency measure that measures cost effectiveness, including cross-program and inter-agency coordination on systems to avoid redundancies.

Evidence: FSA Commodity Operations, Procurement and Donations Division - www.fsa.usda.gov/daco/pdd/eob/; Commodity IFB and Freight tender on-line information at http://www.fas.usda.gov/excredits/Title%201/default.htm; XL Report - Performance Measure Implementation; Appendices 2 and 3; Cost/Benefit Analysis; FAS Information Technology Capital Planning and Investment Committee (CPIC) Initiative Proposal for the Food Aid Information System (FAIS)

Does the program collaborate and coordinate effectively with related programs?

Explanation: U.S. Food Aid is coordinated through the interagency Food Assistance Policy Council (FAPC) and the Policy Coordinating Committee on Food Aid (PCCFA), coordinating food aid action between USDA, USAID, OMB, and the State Department. As food aid is also a foreign policy tool of the U.S. Government, interagency operations must be coordinated to achieve consistent foreign policy goals and effectively marshal various independent agency resources of management and overhead. Information on cooperating sponsor qualifications are shared among the food aid operating agencies. USDA's Farm Service Agency (FSA) is the procurement agency of CCC-supplied commodities used by all U.S. food donation governmental agencies.

Evidence: Executive Order 12752, Implementation of the Agricultural Trade Development and Assistance Act, Secs. 3, 4 (02/25/1991); FAS/EC/ODA Internal Description of FAPC; Examples of intra-agency FAPC deliberations - on FFP and McDIFE-CNP, 9/02, on BEH Trust, 8/02, and on §416(b), 5/01; Interagency Role in P.L. 480 Program Decisionmaking, OGSM, 5/24/1977

Does the program use strong financial management practices?

Explanation: P.L. 480 Title I, and the McGovern-Dole International Food for Education and Child Nutrition Program are funded through annual discretionary appropriations. Donactions under the BEHT and 416(b) utilize CCC ownded commodities and funds. Financial management weaknesses are apparent in the areas of tracking obligations, estimating future budget funding levels, and obtaining adequate and timely reimbursements from program partners (MarAd and USAID). Improvement is needed on internal USDA (FSA and FSA) on budget and financial accounting. On the internal financial control of program partners, PVO's are required to submit quarterly financial statements when funds are an approved component of their agreement. Also, they must provide a detailed Plan of Operation that includes a section that outlines the use of sales proceeds when applicable. There is a requirement that the PVO's must utilize funding within 180 days of advancement or it (the funding) is subject to return to USDA.

Evidence: USDA - OIG - Financial and IT Operations Audit Reports: Fiscal Years 2002 and 2003 Audit Report No. 06401-16-FM (Nov. 2003); Sample Plan of Operation (Attachment A); Evaluation & Compliance Checklist: Food for Progress/Section 416(b) Agreements; Compliance Report for Food Aid Agreements; Regulations 7 CFR 1499.7(f), (g), (h), and 1499.12(c); FSA Annual Performance Plan, FY 2003, pp. 17-18

Has the program taken meaningful steps to address its management deficiencies?

Explanation: A business process reengineering (BPR) study was conducted to improve food aid delivery and the management practices implemented. The report specifically recommended: that food aid shipments move up earlier in the delivery process cycle, additional front-line management authority delegation, and planning for personnel succession and additional training. Steps have been taken to delegate decision authority downward, and an employee orientation training regimen has been implemented. Additional process improvements, such as database integration, web-enabled client interfacing, and proposal prescreening have yet to be implemented. FAS implemented a new evaluation system, based on a checks and balance system recommended by the USDA Office of Inspector General, during their audit of grant fund accountability.

Evidence: XL Report; Office of Inspector General (OIG) - Audit, FAS FFP PVO Grant Fund Accountability, Evaluation Report No. 50801-6-At (March 1999)

Are grants awarded based on a clear competitive process that includes a qualified assessment of merit?

Explanation: Grant applications for FFP, §416(b) and the FFE program are reviewed by country analysts whose recommendations are subject to approval by criteria listed for a series of items which are required to be ranked and scored. These recommendations are then discussed with other USG agencies and approved by senior USDA management.

Evidence: Proposal Evaluation Form (application checklist)

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: FAS requires semi-annual logistics and monetization reports, quarterly financial reports and conducts site visits, sometimes with other USDA officials, to projects in progress. FAS provides further assistance in the evaluation process by performing random reviews of on-site PVO projects. All FFP, Sec. 416 (b) & FFE program agreements require annual audits which must be undertaken in accordance with OMB Circular A-133. The audits must meet CCC standards.

Evidence: Sample Logistics and Monetization (LOGMON) Reports - Kyrgyzstan 11/15/2001 & Tajikistan 3/27/2002 (MCI); Evaluation & Compliance Checklist: Food For Progress/Section 416(b) Agreements; Compliance Report for Food Aid Agreements; FFP/§416(b) General Reporting Instructions - www.fas.usda.gov/excredits/report - in .html

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: Cooperating sponsors furnish quarterly and /or semi-annual reports (in accordance with 7 C.F.R. 1499.7and 7 C.F.R. 1599.7) on expenditures and accomplishments of their programs. Currently, these reports are sent by mail or as attachments in an email. A reporting database system has been developed that will allow cooperating sponsors to enter their reports directly into the system. Existing reports are presently being entered into the database, in-house, while the system is fine-tuned. Once this system is fully up and running, it is expected that reports can be generated offering various quantitative and qualitative information about the program. It is conceivable that data from these reports could be made available to the public on the FAS website in the future when resources to accommodate this becomes available. In the meantime, performance data is made public through trip reports and photos on our website as well as information disseminated at Congressional briefings, food aid conferences and other meetings.

Evidence: Instructions for Submitting a Quarterly Financial Report - www.fas.usda.gov/excredits/pl480/qtr_inst.htm; Food Aid Tables; FAS ESPB Table of Active Food Aid Monetization Projects FY 2001

Is the program managed on an ongoing basis to assure credit quality remains sound, collections and disbursements are timely, and reporting requirements are fulfilled?

Explanation: Freight payment disbursements for PL 480, Title I, FFP, Sec. 416(b), and FFE are timely. For Section 416(b) and FFP, authorization for payment is made within 10 days of receipt of required documentation. Payments are made within 1-3 days of authorization. For FFE, freight payment is made within 30 days of receiving required documentation. For Title I, freight payment is made within three business days of receipt of required documentation. Status of debt is summarized by country in a monthly exposure report by Farm Service Agency and is provided to FAS for programming decisions. The report includes principal balances, rescheduled arrears, and interest. USDA records country defaults as arrearages. Arrearage notices with late interest calculations are sent on a quarterly basis to all applicable countries. Title I sovereign credit can only be rescheduled through the Paris Club. Legislation is required for PL 480, Title I debt reduction and write-offs. The cost of providing Title I credit is re-estimated annually. Estimates are revised to reflect actual experience and updated assumptions concerning country risk and economic assumptions.

Evidence: 7 C.F.R. 1499.8 - Ocean Transporation; P.L. 480 Federal Regulations, Sec. 17.8 - Ocean Transportation; 7 C.F. R. 1599.7(h) - Ocean Transportation for FFE; Total Exposure Report

Do the program's credit models adequately provide reliable, consistent, accurate and transparent estimates of costs and the risk to the Government?

Explanation: The PL 480, Title I program takes into account the level of country risk. The subsidy levels for Title I countries are calculated from subsidy factors, which are based on the Interagency Country Risk Assessment System (ICRAS) grades of the recipient countries. These grades are based on projected economic, financial and political conditions in countries. The lower the ICRAS grade of a particular country, the higher its subsidy factor.

Evidence: Title I Program Summary: FY 2001, FY 2002, and FY 2003

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: FAS has adopted an interim annual performance measure, the food aid effectiveness ratio estimated by the ERS Food Security Assessment (FSA) Model, to assess USDA programs' progress in contributing to a reduction in world hunger. The PL 480 Title I, FFP, Sec. 416(b) and FFE programs represent a small set of the U.S. Government's (USG) tools available to reduce world hunger. USDA's food aid as a share of total US food aid was 33% (in dollars) and 29% (in tonnage) in FY 2003 (Note: USDA's share was larger in FY 2002, over 50% in dollars and tonnage, however, a Presidential review of food aid programs recommended that emergency food aid be shifted from the USDA-adminstered Sec. 416(b) to AID-administered PL 480, Title II). Despite USDA's smaller share, the programs' effectiveness in addressing the food gap were shown to be greater than expected by ERS' FSA Model. The most food insecure countries received the largest share of commodities provided from USDA's food aid programs -- over 70% of total metric ton grain equivalents. The food aid effectiveness ratiowas about 60% in FY 2002 and an estimated 40-44% in FY 2003. This ratio identifies the share of USDA food aid, out of total USDA food aid, that was successful in reducing the food gap for the most food insecure countries. This measure demonstrated that USDA food aid programs have a measurable impact on reducing world hunger.

Evidence: GAO Report GAO/NSIAD-99-15, Food Security, (March 1999); Report to Congress on Food Aid Monetization (08/2001); Food Aid Tables; Revised FY 2001/2002 Annual Performance Plans; FAS Strategic Plan: 2001-2005; Annual Performance Reports 2000 & 1999; FAS Presentation on USDA Food Aid Programs, March 1, 2002; Dr. Jacques Diouf, Director-General, United Nations Food and Agriculture Organization (FAO) World, Food Summit Interview; World Food Programme (WFP), In Depth - Sudan (June 2001); FAS/EC/PAD/FAB Title I Transition Examples Prepared for the U.S. Trade Representative (USTR), 2002; FAS Success Stories; FAS/EC Explanatory Notes "Success Stories," FY 2001 - 2003; FAO/WFP Special Reports (July 29, 2002) and (October 26, 2001); FAO Special Alert, Horn of Africa (April 18, 2000); Relief Web, www.reliefweb.int , DPRK, 6/10/02, USAID, 6/7/02, WFP 4/4/02; Testimony of U.S. Rep. James P. McGovern, on Impact of Excluding Surplus Commodities, June 4, 2002; ERS Food Security Assessment Model; FY 2005 FAS/EC Explanatory Notes (FAS Success Stories); Food Aid Tables (FY 2002 & FY 2003).

Does the program (including program partners) achieve its annual performance goals?

Explanation: As discussed in 2.3, improved annual measures are under development. USDA food aid programs are successful in getting output measure in volume (tonnage) terms. In FY 2003, 1.3 million metric tons were provided. USDA food aid programs support the annual performance goals outlined in the FAS and USDA Strategic Plans. For all USDA food aid programs, one goal is to increase over time the graduation rate of recipient countries from food aid to commercial sales or to their own enhanced food production capabilities. For the FFE program, the goals are to increase the number of meals to recipients and improve attendance, literacy and primary education for children. Every food aid agreement signed with our PVO partners requires regular (quarterly and semi-annual) reports on the progress achieved in meeting program performance goals. Reporting capabilities for the FFE program have been strengthened, allowing for better tracking of the number of meals served so that school feeding and its contribution to school attendance, and girls' attendance, in particular, can be measured.

Evidence: Annual Performance Reports 1999 & 2000; FAS Presentation on USDA Food Aid Programs, March 1, 2002; Report on Pilot for School Feeding (Global Food Education) and Monetization Report;

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: In FY 2002, The Food Aid Data System (FADS) was implemented. This system allows for online processing of food aid proposal applications and has cut the proposal review time in half from 120 days to 60 days, on average. This system has also standardized the program application with the goals of improving both the quality of applications received and their evaluation. Additional improvements are needed in the Farm Service Agency's (FSA) competitive invitation for bid and freight tender system. No recent funding has been made available to implement the Freight Electronic Bid Entry System, or the automated payment system to freight vendors. These modifications would allow for the lowest commodity bids to be matched more easily with the lowest landed cost for shipping maximizing the food aid available for recipients. Also, efforts to spread out commodity purchases to earlier in the fiscal year to avoid bottlenecks and higher shipping cost have been successful.

Evidence: Guidelines for Proposal Package, www.fas.usda.gov/excredits/pl480/propguid.html; sample proposal, www.fas.usda.gov/excredits/pl480/propform.html; sample Plan of Operation, www.fas.usda.gov/excredits/pl480/propexam.html; Proposal Evaluation Form (application checklist); XL Report; Commodity IFB and Freight tender on-line information at www.fas.usda.gov/excredits/Title%201/default.htm; Cargo Preference Laws; USDA Commodity Purchasing Trend Data for 2002 & 2003

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The USG is the largest contributor in meeting the Millenium Development Goal challenge to achieve a 50% reduction in global hunger by 2015. Its food aid contribution, which includes USDA food aid programs, stands at nearly 60% of the worldwide total. USDA's food aid programs compare favorably with USAID's PL 480, Title II program given their size and available resources. USDA food aid programs sent 70-75% of the MTGE provided to the most food insecure countries in FY 2002 and FY 2003. USDA's food aid programs overall have been shown to be highly effective in reducing the food gap according to ERS' FSA model. USDA and USAID have been working together to identify a common measure to compare the performance of similar aspects of their programs. AID is currently in the process of providing ERS commodity shipment data for the PL 480, Title II program which ERS will analyze for its contribution in reducing the food distribution gap using the FSA model. It may be possible for both USAID and USDA's programs to adopt this common performance measure in assessing progress toward the long-term goal of reducing global hunger. It should be noted that use of a common performance measure is unlikely to show the same reduction in the food gap for all food aid programs. This is due to the fact that USDA's food aid programs are mainly geared to meet the objectives of increased agriculture and economic development (Goal II, PART) and not food security.

Evidence: ERS Food Security Assessment Model: Results for USDA food aid programs, FY 2002 & FY 2003

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The long established ERS FSA Model shows that USDA's food aid programs are achieving results. Using FY 2002 and FY 2003 food aid data, the model indicates USDA food aid programs were effective in reducing the food aid distribution gap in many of the most food insecure countries. This food aid effectiveness ratio was 60% and over 40% for FY 2002 and FY 2003, respectively. In FY 2002, a business process re-engineering (BPR) study was completed. This report provided the agency with greater understanding of its processes and areas for improvement and offered tangible steps to improve IT resources, management and training. As an outgrowth of this BPR study, in FY 2003/04, FAS sought and received funding for a study which would allow for the USG food agencies (USDA FAS, FSA USAID & Maritime Administration) to exchange information among various computer systems, a capability which does not now exist. With this capability, it will be possible to see what program agreements have been signed for a particular country across the agencies. Having this information exchange will also allow for easier and more current reporting on what the USG overall is doing with respect to food aid programming at any point in time and is likely to lead to more coordinated and therefore more effective U.S. food aid responses. The FFE program requires organizations to report detailed information on benchmarks that relate closely to USDA goals. The information on items such as attendance, number of meals, and increase in enrollment will allow USDA to evaluate the projects more quickly and in an objective manner.

Evidence: Mendez England Report; USDA - OIG - Financial and IT Operations Audit Reports: FY 2000 Audit Report No. 06401-14-FM (June 2001) and FY 2001 Audit Report No. 06401-4-KC (Feb. 2002); EDS EOTS, Brandegee and XL Reports; GAO Reports - GAO-95-68; GAO-00-91; GAO-00-329; Compliance Review Staff Reviews, International Orthodox Christian Charities, Georgia (5/02) and Feed the Children, Armenia (7/01); ERS Food Security Assessment Model: Results for USDA's Food Aid Programs, FY 2002 & FY 2003