3). 4). Multiple Challenges Hinder the Efficiency of U.S. Food Aid Programs

Multiple challenges reduce the efficiency of U.S. food aid programs,  including logistical constraints that impede food aid delivery and reduce  the amount and quality of food provided as well as inefficiencies inherent  in the current practice of using food aid to generate cash resources to fund  development projects. For all food aid programs, rising transportation and business  costs have contributed to a 52 percent decline in average tonnage  delivered over the last 5 years. U.S. agencies and stakeholders do not coordinate adequately to respond to  food and delivery problems when they arise. While Agencies Have Taken Steps to Improve Efficiency, Related Long- term Costs and Benefits Have Not Yet Been Measured

To improve timeliness in food aid delivery, USAID has been prepositioning  commodities in two locations and KCCO is implementing a new  transportation bid process. Without such data, the agencies’ ability to adequately monitor the degree  to which revenues cover costs is impeded. These include  challenging operating environments in recipient countries, insufficient  coordination among stakeholders and use of noncomparable assessment  methods, difficulties in identifying vulnerable groups (such as chronic  versus transitory food-insecure populations) and understanding the causes  of food insecurity, and resource constraints that adversely affect the  quality of assessments and quantity of food and other assistance. Despite these concerns, USAID and USDA  do not sufficiently monitor food aid programs, particularly in recipient  countries, as they have limited staff and competing priorities and face legal  restrictions on the use of food aid resources. Impediments to Improving Nutritional Quality Reduce the Benefits of Food Aid

Some impediments to improving nutritional quality further reduce the  effectiveness of food aid. U.S. As a result, agencies may not be accomplishing their goal of  getting the right food to the right people at the right time. Finally, U.S.  agencies’ lack of sufficient monitoring leaves U.S. food aid programs  vulnerable to wasting increasingly limited resources, not putting them to  their most effective use, or not reaching the most vulnerable populations  on a timely basis. Recommendations for Executive Action

To improve the efficiency of U.S. food aid—in terms of its amount,  timeliness, and quality—we recommend that the Administrator of USAID  and the Secretaries of Agriculture and Transportation take the following  five actions:  improve food aid logistical planning through cost-benefit analysis of   (1) supply-management options, such as long-term transportation  agreements, and (2) prepositioning, including consideration of alternative  methods, such as those used by WFP;   work together and with stakeholders to modernize ocean transportation  and contracting practices to include, to the extent possible, commercial  principles of shared risks, streamlined administration, and expedited  payment and claims resolution;    seek to minimize the cost impact of cargo preference regulations on food  aid transportation expenditures by updating implementation and  reimbursement methodologies to account for new supply practices, such  as prepositioning, and potential costs associated with older vessels or  limited foreign-flag participation;   establish a coordinated system for tracking and resolving food quality    develop an information collection system to track monetization  transactions. Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine some key challenges to the (1) efficiency  of U.S. food aid programs and (2) effective use of U.S. food aid. To examine key challenges to the efficiency of the delivery of U.S. food aid  programs, we analyzed (1) food aid procurement and ocean transportation  data provided by the Kansas City Commodity Office (KCCO) and (2) total  food aid budget and monetization cost data provided by the U.S. Agency  for International Development (USAID), the U.S. Department of  Agriculture (USDA), and the World Food Program (WFP). 3. 4. 2. 4. Foreign Assistance: Inadequate Accountability for U.S.
Why GAO Did This Study

The United States is the largest global food aid donor, accounting for over half of all food aid supplies to alleviate hunger and support development. Since 2002, Congress has appropriated an average of $2 billion per year for U.S. food aid programs, which delivered an average of 4 million metric tons of food commodities per year. Despite growing demand for food aid, rising business and transportation costs have contributed to a 52 percent decline in average tonnage delivered over the last 5 years. These costs represent 65 percent of total emergency food aid, highlighting the need to maximize its efficiency and effectiveness. Based on analysis of agency documents, interviews with experts and practitioners, and fieldwork, this report examines some key challenges to the (1) efficiency of U.S. food aid programs and (2) effective use of U.S. food aid.

What GAO Found

Multiple challenges hinder the efficiency of U.S. food aid programs by reducing the amount, timeliness, and quality of food provided. Specific factors that cause inefficiencies include (1) funding and planning processes that increase delivery costs and lengthen time frames; (2) ocean transportation and contracting practices that create high levels of risk for ocean carriers, resulting in increased rates; (3) legal requirements that result in awarding of food aid contracts to more expensive service providers; and (4) inadequate coordination between U.S. agencies and food aid stakeholders to track and respond to food and delivery problems. U.S. agencies have taken some steps to address timeliness concerns. The U.S. Agency for International Development (USAID) has been stocking or prepositioning food commodities domestically and abroad, and the U.S. Department of Agriculture (USDA) has implemented a new transportation bid process, but the long-term cost effectiveness of these initiatives has not yet been measured. In addition, the current practice of using food aid to generate cash for development projects--monetization--is an inherently inefficient use of resources. Furthermore, since U.S. agencies do not collect monetization revenue data electronically, they are unable to adequately monitor the degree to which revenues cover costs. Numerous challenges limit the effective use of U.S. food aid. Factors contributing to limitations in targeting the most vulnerable populations include (1) challenging operating environments in recipient countries; (2) insufficient coordination among key stakeholders, resulting in disparate estimates of food needs; (3) difficulty in identifying vulnerable groups and causes of their food insecurity; and (4) resource constraints on conducting reliable assessments and providing food and other assistance. Further, some impediments to improving the nutritional quality of U.S. food aid may reduce the benefits of food aid to recipients. Finally, U.S. agencies do not adequately monitor food aid programs due to limited staff, competing priorities, and restrictions on the use of food aid resources. As a result, these programs are vulnerable to not getting the right food to the right people at the right time.