Over the last several years, funding for nonemergency U.S. food aid  programs has declined. U.S. food  aid programs also have multiple legislative and regulatory mandates that  affect their operations. Multiple Challenges Hinder the Efficiency of U.S. Food Aid Programs

Multiple challenges in logistics hinder the efficiency of U.S. food aid  programs by reducing the amount, timeliness, and quality of food  provided. Factors that increase logistical costs and  lengthen time frames include uncertain funding processes and inadequate  planning, ocean transportation contracting practices, legal requirements,  and inadequate coordination in tracking and responding to food delivery  problems. While U.S. agencies are pursuing initiatives to improve food aid  logistics, such as prepositioning food commodities and using a new  transportation bid process, their long-term cost-effectiveness has not yet  been measured. In addition, the current practice of selling commodities to  generate cash resources for development projects—monetization—is an  inherently inefficient yet expanding use of food aid. Despite these inefficiencies, U.S. agencies do not collect or maintain data  electronically on monetization revenues, and the lack of such data  impedes the agencies’ ability to fully monitor the degree to which revenues  can cover the costs related to monetization. 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. 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. However, opportunities for  further improvement remain to ensure that limited resources for U.S. food  aid are not vulnerable to waste, are put to their most effective use, and  reach the most vulnerable populations on a timely basis. To improve the efficiency of U.S. food aid—in terms of its amount,  timeliness, and quality—we recommended in our previous report that the  Administrator of USAID and the Secretaries of Agriculture and  Transportation (1) improve food aid logistical planning through cost- benefit analysis of supply-management options; (2) work together and  with stakeholders to modernize ocean transportation and contracting  practices; (3) 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; (4) establish a coordinated system for tracking and  resolving food quality complaints; and (5) develop an information  collection system to track monetization transactions. To improve the effective use of food aid, we recommended that the  Administrator of USAID and the Secretary of Agriculture (1) enhance the  reliability and use of needs assessments for new and existing food aid  programs through better coordination among implementing organizations,  make assessments a priority in informing funding decisions, and more  effectively build on lessons from past targeting experiences; (2) determine  ways to provide adequate nonfood resources in situations where there is  sufficient evidence that such assistance will enhance the effectiveness of  food aid; (3) develop a coordinated interagency mechanism to update food  aid specifications and products to improve food quality and nutritional  standards; and (4) improve monitoring of food aid programs to ensure  proper management and implementation. USAID  stated that we did not adequately recognize its recent efforts to  strategically focus resources to reduce food insecurity in highly vulnerable  countries.
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 between 2001 and 2006. These costs represent 65 percent of total emergency food aid, highlighting the need to maximize its efficiency and effectiveness. This testimony is based on a recent GAO report that examined 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. Factors that cause inefficiencies include (1) insufficiently planned food and transportation procurement, reflecting uncertain funding processes, that increases delivery costs and 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 in tracking and responding to food and delivery problems. U.S. agencies have taken some steps to address timeliness concerns. USAID has been stocking or prepositioning food domestically and abroad, and USDA has implemented a new transportation bid process, but the long-term cost effectiveness of these initiatives has not yet been measured. The current practice of using food aid to generate cash for development projects--monetization--is also inherently inefficient. 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) difficulties in identifying vulnerable groups and causes of their food insecurity; and (4) resource constraints that adversely affect the timing and quality of assessments, as well as the quantity of food and other assistance. Further, some impediments to improving the nutritional quality of U.S. food aid may reduce its benefits 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.