Detailed Information on the
Tropical Forest Conservation Act Assessment

Track findings and implement recommendation of independent evaluations of existing programs with additional emphasis on effects of the programs on the beneficiary country's forests.

Work with boards, oversight committees, and program partners to increase local program performance as measured by the TFCA evaluation sheet.

Refine the timing of fund obligation and outlays for the cost of debt reduction.

Measure: To help ensure that funds directed toward conservation are utilized rapidly, by 2011, all new TFCA programs will be operational and implemented within one year of the closing date of the TFCA agreements.

Explanation:TFCA agreements require certain long-term structures (such as a foundation and board or oversight committee) to be created in order for the program to be implemented and TFCA funds disbursed. It is important that these institutions are created without delay in order to allow funds to be disbursed to conserve tropical forests. The baseline measures the percentage of EXISTING TFCA that are operational and implemented within one year of the closing date of the TFCA agreements.

Measure: New TFCA agreements are operational and implemented within one year of the closing date of the TFCA agreement.

Explanation:It is important that all institutions required by TFCA agreements are created expeditiously to avoid delays in disbursing funds. Approximately 1-3 TFCA agreements are closed every fiscal year. Three new TFCA agreements were signed between FY2004, when this measure was created, and the present. All three agreements were operational within one year. In 2005, no new TFCA agreements were closed. Therefore, there is no relevant data for 2006 (one year after the closing date). However, the baseline measures the percentage of EXISTING TFCA that are operational and implemented within one year of the closing date of the TFCA agreements.

Measure: In order to ensure that TFCA grants are targeted and monitored for maximum impact on forest conservation, all TFCA programs will meet best practices governance standards by 2011.

Explanation:In order to meet governance standards, a program must meet at least 2/3 of the governance sub-criteria in the TFCA evaluation sheet. Programs operational for less than one year are not included in the figures, as they will not have had sufficient time to set up all necessary policies and plans. We have found that we need to work with programs to develop sufficiently detailed strategic plans, etc., and therefore our initial goal of 100% of programs meeting the target at the outset was unrealistic.

Measure: All new TFCA programs meet the governance standard.

Explanation:This would apply to all programs operational for at least one year. In 2005 and 2007, there are no new programs to evaluate, since there are no new programs operational for at least one year. The baseline is the percentage of all TFCA programs that meet the governance standard.

Measure: To ensure that TFCA grants achieve their goals and that available funds are used for tropical forest conservation activities, all TFCA programs will meet best practices grant management procedures by 2011.

Explanation:This measure will apply to all programs operational for at least one year. Programs will have met the standard if they meet at least 2/3 of grant management sub-criteria.

Measure: All new TFCA programs will meet grant management criteria.

Explanation:This applies to TFCA programs operational for at least one year. There were no new TFCA programs operational for at least one year for 2007. The baseline is the percentage of all TFCA programs that meet the grant management criteria.

Measure: To ensure that TFCA programs are able to fulfill their long-term financing mission, by 2011, all TFCA programs will meet standards with respect to financial management.

Explanation:This measure applies to funds operational for at least one year. Programs meeting at least 2/3 of the applicable financial management sub-criteria will be deemed to have met the financial management standard.

Measure: New TFCA programs meet financial management standard.

Explanation:This criterion applies to programs operational for at least one year. There are no new TFCA programs for 2007. The baseline is the percentage of all TFCA programs that meet the financial management standard.

Measure: Through mobilizing funding to reverse the loss of forest cover through increased sustainable forest management, by 2012, TFCA program countries (with programs operational for at least four years) will halt decreases in forest cover.

Explanation:The percentage of forest cover in TFCA countries was 41.7% in 1990 and 39.4% in 2000.

Measure: Through mobilizing funding to reverse the loss of forest cover in developing countries, the TFCA program will achieve an annual increase in acres treated with TFCA funds.

Explanation:

Is the program purpose clear?

Explanation: The program's purpose is defined by the Tropical Forest Conservation Act (TFCA) of 1998. The TFCA states that the purposes of the program are: (1) to recognize the values received by United States citizens from protection of tropical forests; (2) to facilitate greater protection of tropical forests (and to give priority to protecting tropical forests with the highest levels of biodiversity and under the most severe threat) by providing for the alleviation of debt in countries where tropical forests are located, thus allowing the use of additional resources to protect these critical resources and reduce economic pressures that have led to deforestation; (3) to ensure that resources freed from debt in such countries are targeted to protection of tropical forests and their associated values; and (4) to rechannel existing resources to facilitate the protection of tropical forests.

Evidence: Tropical Forest Conservation Act, as amended.

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

Explanation: The program addresses a specific interest: the protection of tropical forests in low and middle income countries that might not have significant resources to devote to forest protection.

Evidence: Tropical Forest Conservation Act, as amended.

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

Explanation: The participation of USG, local government, and donor and local NGOs on local TFCA program boards or oversight committees that together decide the strategy and funding priorities of the local TFCA program over a period of years fosters an extraordinary level of long-term cooperation on conservation efforts that is probably unique among U.S. government environmental programs. In addition, the TFCA program is one of the few sources of reliable long-term funding for forest conservation activities. The funds directed toward conservation under TFCA are generally paid in over a period of 10 to 20 years. There are USG grant programs (most funded by USAID) that may target tropical forests; however, these programs are often shorter term in nature. In addition, the TFCA program is a source of endowment funding, thus providing even longer-term sustainable financing for conservation. Many, though not all, TFCA programs provide for endowment funding.

Evidence: Information on USAID and other USG funded programs is contained in the Section 118 Report. In addition, NGO views of USG environment programs is included in a report produced by The Nature Conservancy, Conservation International, World Wildlife Fund, Wildlife Conservation Society, and World Resources Institute on the USG biodiversity budget. Agency conversations with various TFCA participants have revealed the provision of long-term funding to be one of the most distinctive features of the TFCA program.

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

Explanation: Agencies are unaware of any major flaws that limit the program's effectiveness or efficiency. The Administration requested and received two changes during the 2005 TFCA reauthorization process to improve the efficacy of the program: the ability to treat principal as well as interest under all program options, which may increase "leverage" by increasing the number of payment streams that Treasury may select from in negotiating debt reduction agreements, and which may open up the possibility of debt reduction agreements in countries with little interest owed to the United States government; and authorization to use a portion of TFCA appropriations to fund independent audits in the future, to bolster program follow-up and evaluation. The Administration has recently submitted a 2008 reauthorization bill that will greatly expand eligible ecosystems under the program to include all forests, both inside and outside of the tropics, as well as coral reefs. The reauthorization bill proposes changes that would re-name the program to the Forest and Coral Conservation Act, improve the efficacy of the program, and expand the number of eligible developing countries.

Evidence: The changes are contained in PL 108-323. The Administration's proposed changes to the TFCA are contained in the Adminstration bill sent to Congress in April 2007.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The beneficiaries are specified in the TFCA legislation. TFCA country political and economic eligibility standards are stringent, and therefore help to ensure that the environment for resulting programs is supportive of effective conservation efforts. Potential grant beneficiaries, consistent with the Tropical Forest Conservation Act, are specified in individual TFCA agreements.

Evidence: The beneficiaries specified in the Tropical Forest Conservation Act are: "nongovernmental environmental, forestry, conservation, and indigenous peoples organizations of, or active in, the beneficiary country; the appropriate local or regional entities of, or active in, the beneficiary country; or in exceptional circumstances, the government of the beneficiary country." TFCA agreements provide for grants to beneficiaries consistent with those specified in the legislation (expample provided). TFCA eligibility requirements contained in Tropical Forest Conservation Act.

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: Each local TFCA program is unique, and the boards or oversight committees of local TFCA programs have much responsibility for determining the priorities of each program. Measures of success may therefore differ across funds. However, interagency staff have developed an Evaluation Sheet that measures, among other things, the success of boards and oversight committees in developing a strategic plan that specifies key objectives, conservation and funding priorities, and target dates in meeting those objectives, and that also contains key TFCA entity efficiency measures. Long-term performance measures evaluate the board's ability to meet best practices of governance, grant management, and financial management. Long-term performance of the program as a whole will be measured in part by tracking aggregate scores on the Evaluation Sheet. While many of TFCA's benefits are indirect and the conservation achieved is difficult to measure with precision, TFCA has a long-term measure that will assess the percentage of land covered by forests in TFCA countries.

Evidence: Performance measures are contained in the TFCA Evaluation Sheet

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

Explanation: Yes all long-term measures have ambitious targets that are greater than current experience. In particular, most long-term measurements have a goal that 100% of funds will meet governance, grant management, and financial management best practices in the next five years. The long term conservation measurement has a target set at the baseline level. While the target is not greater than actual experience, there are a number of exogenous activities which result in less forest coverage.

Evidence: Targets and Timeframes are contained in the TFCA Evaluation Sheet and in the Measures section of this PART. For example, there are measures and targets for local TFCA programs with respect to submission of evaluation information and achievement of acceptable ratings.

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: The TFCA Evaluation Sheet evaluates each local TFCA program on the board's ability to meet best practices of governance, grant management, and financial management. Annual measures demonstrate whether new TFCA programs meet these best practices. These annual performance measures demonstrate progress toward achieving the long term goal that 100% of funds will meet governance, grant management, and financial management best practices in the next five years.

Evidence: Targets and Timeframes are contained in the TFCA Evaluation Sheet and in the Measures section of this PART. These measurements include an annual review of the long-term strategic plan of local TFCA programs.

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

Explanation: Each local TFCA program is unique and will have its own strategic plan and priorities. The TFCA Evaluation Sheet will allow an annual review of each TFCA program's comprehensive strategic plan and success in meeting stated targets. For the most part, baselines were established in 2005 and ambitious targets are set to meet each measure's long term performance measurement. For certain measures, 2006 targets were unrealistic in the time required to work with the funds to ensure best governance, grant management, and financial management practices. As such, these goals have been revised in 2007 and are consistently set higher for each consecutive year.

Evidence: Targets and Timeframes are contained in the TFCA Evaluation Sheet and in the Measures section of this PART.

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: The TFCA program is coordinated through an interagency process. All major USG stakeholder agencies work together to choose program recipients and to construct programs. The use of funds generated through debt reduction is detailed in a Forest Conservation Agreement or Tropical Forest Agreement, ensuring ex ante agreement on the permitted uses of funds and the general administration of the program. In addition, each local TFCA program has an oversight committee or board that consists of a representative of the USG, a representative of the beneficiary government, a representative of any NGO donors (if applicable), with a majority of civil society environmental representatives. The program is therefore designed to ensure that all partners work together in implementing the program. These partners complete the TFCA Evaluation Sheet to ensure that programs are meeting best practice standards.

Evidence: Copy of sample Forest Conservation Agreement and Tropical Forest Agreements.

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: One evaluation of a TFCA program (El Salvador) has been completed. Some of the recommendations of the evaluation (including the need for a new strategic plan and use of some of TFCA income for administrative expenses) have been adopted. An additional four evaluations should be completed within the next year. Additional evaluations are expected as soon as local programs have been operational for a sufficient period of time.

Evidence: El Salvador evaluation.

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:

Evidence: Previous budget submissions to OMB. FY 2007 and 2008 Treasury International Programs Justification for Appropriations

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

Explanation: The TFCA Evaluation Sheet was developed to provide for consistent, on-going evaluation and reporting across local TFCA programs.

Evidence: TFCA Evaluation Sheet

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: Local TFCA program entities are required to undergo regular financial audits, as well as provide statistics such as the number of grants awarded and the amount of grant funds disbursed. Reporting will become more detailed as a result of the TFCA Evaluation Sheet that has recently been developed. Implementing agencies use this data and their experience in negotiation of past agreements in the development of new ones. In addition, implementing agencies receive input on program development from environmental NGOs. Environmental NGOs are active participants in and have contributed financially to the creation of several TFCA programs. As a result of TFCA evaluation sheet reporting and environmental NGO input, at least one TFCA program has undergone fundamental revision to improve transparency and performance monitoring. USG representatives on other TFCA programs have also informed Treasury that the TFCA evaluation sheet exercise has helped to focus attention on key performance areas.

Evidence: Example of financial audit. Example of reported statistics: Report to Congress, 2004. TFCA Evaluation Sheet. Peru amendment.

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: While TFCA agreements require regular financial audits of local TFCA program entities, and local TFCA programs report on the activities of the program, these entities are not held accountable for cost, schedule, and performance results.

Evidence: The Tropical Forest Conservation Act. Sample TFCA Agreement. Sample financial audit.

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

Explanation: While funds are spent for their intended purposes, Treasury does not obligate funds in a timely manner to reconcile budget and accounting differences before the end of the fiscal year. Treasury obligates funds upon the closing of TFCA agreements. However, many of these agreements are finalized at the end of the fiscal year to ensure that previously appropriated funds do not expire. Since these funds are obligated at the end of the fiscal year, creditor agencies are unable to reconcile budget and accounting differences between credit accounts before the close of the fiscal year.

Evidence: TFCA Accounting reports and Schedules P, G, and F in MAX for Creditor Agency Debt Reduction Financing and Liquidating Accounts.

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: The TFCA Evaluation Sheet contains criteria to measure program efficiency and cost effectiveness. In particular, the program has the efficiency measure, "to help ensure that funds directed toward conservation are utilized rapidly, by 2011, all new TFCA programs will be operational and implemented within one year of the closing date of the TFCA agreements." In addition, administrative costs of local TFCA program entities are generally limited by administrative cost caps specified in the TFCA agreements. Administrative costs are tracked and reported to the oversight committee or board of the local TFCA program.

Evidence: The TFCA Evaluation Sheet contains efficiency measures such as request for proposal and grant processing time, as well as administrative cost containment. TFCA Evaluation Sheet. Sample financial audit. Sample TFCA agreement.

Does the program collaborate and coordinate effectively with related programs?

Explanation: USAID maintains other tropical forest conservation and natural resource management programs. USAID has missions and environmental programming in all of the countries with TFCA programs (with the exception of Belize). USAID personnel serve as the USG representative on most of the TFCA boards or oversight committees, which promotes coordination. In addition, in many TFCA programs, NGO donors active in the country also sit on oversight committees, thus increasing coordination.

Evidence: Inter-Agency coordination on reauthorizations, qualifications of TFCA beneficiary countries, and other legal issues.

Does the program use strong financial management practices?

Explanation: Treasury uses OMB's credit subsidy calculator in calculating the cost of debt reduction. Flows being treated are verified by the creditor agency. TFCA Agreements require annual financial audits of local TFCA programs. TFCA programs also are required to implement strong financial management practices and to provide regular audits. In addition, the TFCA Evaluation Sheet contains criteria to measure program financial management, and TFCA performance measures include a measure that by 2011, all TFCA programs will meet standards with respect to financial management.

Evidence: Credit Subsidy Calculator sheets. Example of financial audit.

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

Explanation: The Administration requested and received two changes in the 2005 TFCA reauthorization process to improve the efficacy of the program: the ability to treat principal as well as interest under all program options, which may increase "leverage" by increasing the number of payment streams that Treasury may select from in negotiating debt reduction agreements; and authorization to use a portion of TFCA appropriations to fund independent audits in the future, to bolster program follow-up and evaluation. In addition, implementing agencies have developed the TFCA Evaluation Sheet to standardize the consistency and quality of local TFCA program reporting and to augment measurement of program effectiveness. The Administration has recently submitted a 2008 reauthorization bill that will greatly expand eligible ecosystems under the program to include all forests, both inside and outside of the tropics, as well as coral reefs. The reauthorization also changes the name of the program to the Forest and Coral Conservation Act, improves the efficacy of the program, and expands the number of eligible developing countries.

Evidence: PL 108-323. TFCA Evaluation Sheet and The Forest and Coral Conservation Act of 2007.

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: This question is not applicable to fund disbursements to TFCA funds since there are no payments to, or disbursements from, the USG with respect to debt payments redirected to local TFCA programs. However, TFCA agreements specify remedies for late payments/arrears. The USG sits on all TFCA boards and oversight committees, and regular financial audits of local TFCA program entities are required. Regarding USG program management, on the date that each agreement is closed, or finalized, and the treated debt is reduced, Treasury obligates subsidy funds from the Debt Restructuring Account and notifies creditor agencies to request such funds from Financial Management Service. On the closing date, Treasury also provides creditor agencies with instructions on transferring treated loans from the liquidating to the financing accounts, and on the amount of borrowing authority required.

Evidence: Credit Subsidy Calculator sheets.

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

Explanation: Treasury uses OMB's credit subsidy calculator to calculate debt reduction costs. Such costs are verified by OMB. The repayment flows being forgiven are verified by the creditor agency.

Evidence: Credit Subsidy Calculator sheets.

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

Explanation: Since the TFCA evaluation sheet was implemented, the program has made progress on all long-term performance goals for which data is available. For example, the percentage of programs measured that met the standard increased from 33% in 2005 to 67% in 2006; with respect to grants management, 33% met the standard in 2005 and 45% in 2006. The percentage of measured programs meeting the standard for financial management increased from 17% in 2005 to 56% in 2006.

Evidence: PART measures section

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

Explanation: The program has made significant progress in meeting is annual performance goals. However, the program did not achieve its annual performance goals. For the most part, baselines were established in 2005 and ambitious targets are set to meet each measure's long term performance measurement. For certain measures, 2006 targets were unrealistic in the time required to work with the funds to ensure best governance, grant management, and financial management practices. As such, these goals have been revised in 2007 and are consistently set higher for each consecutive year. As a result, TFCA did not meet all of its goals; however, it did demonstrate adequate progress.

Evidence: PART measures section

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

Explanation: To help ensure that funds directed toward conservation are utilized rapidly, the percentage of all TFCA programs that are operational, in compliance with all articles of the agreements, and implemented within one year of the closing date of the TFCA agreements has increased from 67% to 78% from 2005 to 2006.

Evidence: PART measures section

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

Explanation: TFCA targets counties that meet stringent political and economic eligibility criteria, limiting participation to countries with a climate conducive to a successful program. In addition, the TFCA program is one of the few sources of reliable long-term funding for forest conservation activities, as the funds directed toward conservation under TFCA are generally paid in over a period of 10 to 20 years. In many cases the TFCA program is also a source of endowment funding, thus providing even longer-term sustainable financing for conservation. The participation of USG, local government, and donor and local NGOs on TFCA entity boards or oversight committees fosters and extraordinary level of long-term cooperation on conservations efforts, a unique feature of this program among comparable USG programs.

Evidence: Sample TFCA agreement showing board/oversight committee composition. Sample TFCA agreement showing payment stream over long-term. TFCA eligibility criteria.

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

Explanation: While the El Salvador TFCA program evaluation included recommendations that have since been completed, the evaluation did not report whether the fund had an effect on El Salvador's forests.

Evidence: El Salvador evaluation