GAO: Agencies Should Ensure Timely Documentation of Required Market Analyses and Assess Local Markets for Program Effects
USAID and USDA provided approximately $1.9 billion of U.S food aid overseas in fiscal year 2015, including about 1.5 million metric tons of commodities such as rice or wheat. Before signing assistance agreements, these agencies are required to document that distributing commodities will not hurt the recipient country's agricultural production or local markets (Bellmon determinations).
GAO found that USAID and USDA do not consistently document these determinations before distributing food aid. Report.
GAO: Cargo Preference Increases Food Aid Shipping Costs, and Benefits Are Unclear
Cargo preference laws require that a percentage of U.S. government cargo, including international food aid, be transported on U.S.-flag vessels according to geographic area of destination and vessel type.
One intention is to ensure a merchant marine—both vessels and mariners— capable of providing sealift capacity in times of war or national emergency, including a full, prolonged activation of the reserve fleet.
Cargo preference for food aid (CPFA) requirements increased the overall cost of shipping food aid by an average of 23 percent, or $107 million, over what the cost would have been had CPFA requirements not been applied from April 2011 through fiscal year 2014.
GAO: International Food Assistance: Funding Development Projects through the Purchase, Shipment, and Sale of U.S. Commodities Is Inefficient and Can Cause Adverse Market Impacts
Since the Food Security Act of 1985, Congress has authorized monetization—the sale of U.S. food aid commodities in developing countries to fund development. In fiscal year 2010, more than $300 million was used to procure and ship 540,000 metric tons of commodities to be monetized by the U.S. Agency for International Development and the U.S. Department of Agriculture.
GAO found that the inefficiency of the monetization process reduced funding available to the U.S. government for development projects by $219 million over a 3-year period. In addition, USAID and USDA cannot ensure that monetization does not cause adverse market impacts because they monetize at high volumes, conduct weak market assessments, and do not conduct post-monetization evaluations. Adverse market impacts may include discouraging food production by local farmers, which could undermine development goals. Report.
GAO: International School Feeding: USDA’s Oversight of the McGovern-Dole Food for Education Program Needs Improvement
The McGovern-Dole International Food for Education and Child Nutrition Program (MGD Program) provides donations of U.S. agricultural products and financial and technical assistance for school feeding programs in the developing world. According to the U.S. Department of Agriculture (USDA), with about $200 million in funding in fiscal year 2010, the MGD Program served about 5 million beneficiaries in 28 countries.
USDA provides weak performance monitoring of the MGD Program’s implementation. For example, USDA does not systematically analyze implementing partners’ reporting and provides limited feedback.
USDA has controls in place over project expenditures, but a lack of timely grant closeouts prevents USDA from ensuring that grantees have met all financial requirements and that unused or misused funds are promptly reimbursed to USDA. To date, USDA has collected over $850,000 in unused or misused funds via grant closeouts; however, 15 of 42 (36 percent) of the MGD grants that are eligible to be closed, remain open. Report.