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United States Government Accountability Office: 
GAO: 

Report to the Committee on Foreign Affairs, House of Representatives: 

September 2012: 

World Food Program: 

Stronger Controls Needed in High-Risk Areas: 

GAO-12-790: 

GAO Highlights: 

Highlights of GAO-12-790, a report to the Committee on Foreign 
Affairs, House of Representatives. 

Why GAO Did This Study: 

In 2011, WFP provided about $4 billion in food assistance—-including 
U.S. contributions of about $1.2 billion—-to about 99 million 
beneficiaries in 75 countries. Many of these countries include high-
risk areas where WFP staff have limited access. In 2009, a media 
report alleged that large amounts of WFP’s food assistance were being 
diverted in one of these countries, Somalia. Subsequent external and 
internal audits found deficiencies in WFP’s control of its Somalia 
operations. In response, WFP took steps to strengthen its controls, 
including adopting the COSO internal control framework. To assess WFP’
s ability to help assure that food reaches intended beneficiaries in 
high-risk areas, GAO examined the extent to which (1) the design of 
WFP internal controls related to delivery and monitoring of food 
assistance reflects COSO principles and (2) WFP has implemented as 
designed certain controls in selected high-risk areas. GAO reviewed 
COSO and other international principles; reviewed WFP policies, 
documents, and data; and interviewed WFP and U.S. officials. GAO 
conducted case studies of Ethiopia, Kenya, and Somalia. 

What GAO Found: 

The design of the United Nations (UN) World Food Program’s (WFP) 
internal controls related to delivery and monitoring of food 
assistance generally reflects principles for internal controls and 
enterprise risk management developed by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO). WFP has developed an 
internal control framework that has, like the COSO internal control 
framework, five components: internal environment, risk management, 
control activities, information and communication, and monitoring. 
However, the design of some of WFP’s controls has weaknesses that 
could expose WFP to risks such as waste, fraud, and abuse. For 
example, WFP’s Executive Board oversight is limited, and it does not 
fully utilize the WFP Audit Committee to assist in overseeing the 
effectiveness of WFP’s risk management and internal control processes. 
Also, WFP has designed risk management policies but has not developed 
detailed guidance to instruct staff in addressing risks, especially at 
the country level where WFP is most vulnerable. Additionally, as 
recommended by COSO, WFP has established control activities that 
address risks to its objectives—-for example, policies and procedures 
designed to help ensure tracking of food assistance from delivery at 
the port-of-entry to distribution to beneficiaries. However, 
weaknesses in the design of its commodity tracking system, including 
lack of capacity to track food in implementing partners’ custody, 
limit WFP’s ability to account for all food in these partners’ 
custody. Further, WFP has developed detailed policies for monitoring 
distribution of food assistance to beneficiaries, in line with COSO 
principles, but has not provided guidance that instructs staff to 
consider risk when determining needed levels of monitoring, including 
in high-risk areas where WFP staff have limited access. 

In the areas of Ethiopia, Kenya, and Somalia that GAO selected for its 
review, WFP has implemented procedures as designed for tracking and 
monitoring food assistance in its custody from port-of-entry to 
beneficiaries. However, WFP’s ability to account for food in the 
custody of implementing partners is constrained by the lack of 
tracking through its commodity tracking system, lack of timely 
reporting by some partners, and a limited number of monitors. In 
addition, security restrictions have limited WFP monitors’ access to 
partners’ warehouses and distribution sites in some high-risk areas. 
For example, in six districts in the southeast area of Ethiopia, WFP 
has not monitored implementing partners’ distribution sites since May 
2011. Some of these factors may also limit WFP’s ability to provide 
accurate reporting of food assistance losses. Because its system does 
not track food in implementing partners’ custody and because of WFP’s 
restricted access to some sites, its calculation of food losses relies 
in part on partners’ distribution reports. However, these reports are 
sometimes late and inaccurate. Although operating in Somalia is 
inherently challenging, WFP reported an average loss rate of 0.25 
percent for Somalia from 2007 through 2011, compared with 0.41 percent 
for WFP’s operations globally. Moreover, despite concerns expressed by 
some WFP donors and Executive Board members, no external evaluation of 
WFP’s food loss data has been conducted since a 2006 review by WFP’s 
External Auditor. In that report, the Auditor noted that inadequate 
reporting of losses not only presents risks to the effectiveness of 
WFP’s aid efforts and the achievement of its objectives but also 
presents reputational risks in terms of donor confidence. 

What GAO Recommends: 

GAO recommends that the Department of State work through WFP’s 
Executive Board to ensure that management and the board take several 
actions to strengthen WFP’s ability to manage risks inherent in some 
environments as well as utilize the Audit Committee more fully and 
report losses more accurately. WFP, State, and other relevant U.S. 
agencies agreed with GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-790]. For more 
information, contact Tom Melito at (202) 512-9601 or melitot@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Design of WFP Internal Controls Related to Delivering and Monitoring 
Food Assistance Generally Reflects COSO Principles but Could Be 
Strengthened to Better Manage Risks: 

Security Restrictions and Limited Internal Controls Weaken Assurance 
of Food Delivery and Accurate Loss Reporting for Selected High-Risk 
Areas: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: World Food Program Governance, Oversight, and Management 
Structure: 

Appendix III: Information on Case Study Countries--Ethiopia, Kenya, 
and Somalia: 

Appendix IV: Comments from the World Food Program: 

Appendix V: Comments from the U.S. Department of State: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: WFP Direct Expenses for Ethiopia, 2007-2011: 

Table 2: WFP Direct Expenses for Kenya, 2007-2011: 

Table 3: WFP Direct Expenses for Somalia, 2007-2011: 

Table 4: Monitoring Data Reported by WFP for Ethiopia, Kenya, and 
Somalia: 

Table 5: Monitoring Data Reported by WFP for Selected GAO Fieldwork 
Sites and High-Risk Areas in Ethiopia, Kenya, and Somalia: 

Figures: 

Figure 1: WFP's Operational Presence as of August 2012: 

Figure 2: Donor Contributions to WFP in 2011: 

Figure 3: WFP Governance, Oversight, and Management Structure: 

Figure 4: Examples of WFP Control Activities from Port-of-Entry to 
Distribution of Food Assistance: 

Figure 5: WFP Warehouse in Ethiopia: 

Figure 6: Distribution of WFP Food Assistance in Kenya: 

Figure 7: WFP's Reported Food Assistance Losses in Ethiopia, Kenya, 
and Somalia and Worldwide, 2007-2011: 

Figure 8: WFP Management Structure: 

Figure 9: Timeline of Security and Humanitarian Events and 
Investigations into WFP Control Weaknesses in Somalia: 

Abbreviations: 

COSO: Committee of Sponsoring Organizations of the Treadway Commission: 

COMPAS: Commodity Movement, Processing and Analysis System: 

FAO: Food and Agriculture Organization of the United Nations: 

EMOP: emergency operation: 

ISO: International Organization for Standardization: 

JIU: Joint Inspection Unit: 

NGO: nongovernmental organization: 

PRRO: protracted relief and recovery operation: 

SMCA: Strengthening Managerial Control and Accountability: 

UN: United Nations: 

UNHCR: United Nations High Commissioner for Refugees: 

UNDSS: United Nations Department of Safety and Security: 

WFP: World Food Program: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 13, 2012: 

The Honorable Ileana Ros-Lehtinen:
Chairman:
The Honorable Howard L. Berman:
Ranking Member:
Committee on Foreign Affairs:
U.S. House of Representatives: 

The United States is the single largest donor to the United Nations 
(UN) World Food Program (WFP), contributing about $1.2 billion in cash 
and food in 2011--more than 30 percent of WFP's revenue of about $3.7 
billion for the year. As the world's largest humanitarian agency 
fighting hunger worldwide, in 2011 WFP provided food assistance to 
99.1 million people in 75 countries, including a number of countries 
with areas that WFP has designated as high risk.[Footnote 1] In these 
areas, WFP staff may have limited access to those in need of food 
assistance and be endangered by local conflict or crime. For example, 
in high-risk areas in Somalia and Ethiopia, several WFP staff members 
were killed in 2011 while performing their duties, and WFP has lost 7 
staff members and 13 WFP partner staff members in attacks in Somalia 
since 2008. 

In 2009, a media report alleged that large amounts of WFP's food 
assistance in Somalia were being diverted to contractors, Somali 
clans, and local UN staff. Following the media report, WFP's Office of 
Inspections and Investigations, the UN Monitoring Group on Somalia, 
and WFP's External Auditor issued reports that found weaknesses in 
WFP's control of its operations in Somalia.[Footnote 2] Acknowledging 
that operating in Somalia is difficult and dangerous, WFP suspended 
activities in many parts of southern Somalia in January 2010 after an 
Islamist terrorist group controlling those areas, known as al-Shabaab, 
imposed unacceptable operating conditions. In July 2011, WFP resumed 
food assistance in some areas that were no longer under al-Shabaab's 
control, after the UN reported that the situation in southern Somalia 
had reached famine proportions. In its March 2010 report, the UN 
Monitoring Group on Somalia noted that the aid community had come to 
accept a certain level of risk, loss, theft, and diversion as "the 
cost of doing business" in Somalia.[Footnote 3] In addition, in its 
July 2012 report, the UN Monitoring Group stated that large-scale 
diversion of humanitarian assistance occurs in parts of Somalia but 
that WFP is taking all possible measures to investigate and address 
allegations of theft.[Footnote 4] International nongovernmental 
organizations (NGOs) and the media also continue to report diversion 
of food assistance in Somalia. 

In recent years, WFP has reported having designed and implemented a 
number of initiatives to strengthen its internal controls in Somalia 
and worldwide, including adopting principles from the Committee of 
Sponsoring Organizations of the Treadway Commission's (COSO) "Internal 
Control--Integrated Framework" (COSO internal control 
framework).[Footnote 5] Internal control generally serves as a first 
line of defense in safeguarding assets and is broadly defined as a 
process designed to provide reasonable assurance regarding (1) 
effectiveness and efficiency of operations; (2) reliability of 
financial reporting; and (3) compliance with laws and 
regulations.[Footnote 6] In 2012, WFP's former Executive Director 
described the organization's system of internal control as designed to 
identify, evaluate, and reduce and manage--rather than eliminate--the 
principal risks of failure to achieve WFP's objectives.[Footnote 7] 

As part of our current work on international food assistance,[Footnote 
8] we sought to determine whether WFP systems are designed and 
implemented to help ensure that its food assistance reaches intended 
beneficiaries.[Footnote 9] This report examines the extent to which: 

1) the design of WFP internal controls related to the delivery and 
monitoring of food assistance reflects COSO principles and: 

2) WFP has implemented as designed certain controls related to the 
delivery and monitoring of food assistance in selected high-risk areas. 

To address these objectives, we reviewed COSO's internal control 
framework as well as COSO's "Enterprise Risk Management--Integrated 
Framework"[Footnote 10] and related international principles and 
guidelines, including those in the International Organization for 
Standardization's (ISO) "ISO 31000 Risk Management--Principles and 
Guidelines."[Footnote 11] We focused our review on WFP's internal 
controls related to the delivery and monitoring of food assistance, 
primarily from port-of-entry to distribution to intended 
beneficiaries, because of WFP's vulnerability to risks such as the 
alleged food diversion in Somalia during these stages of food 
assistance management. We did not review other processes, such as 
procurement, finance, and budget processes. We analyzed relevant WFP 
policies and procedures, relevant documents, and data related to 
internal controls at WFP's corporate level and at the country level 
for three case study countries--Ethiopia, Kenya, and Somalia. We 
selected these countries based on a range of criteria, including U.S. 
contributions, amount of food assistance received, high-risk and non-
high-risk environments in each country, and logistics and budget 
constraints. Because WFP operates in many countries and implements 
many different activities in each country, our case studies are not 
generalizable to all WFP countries and operations. We focused our 
review on emergency and protracted relief and recovery operations, 
which represent about 80 percent of WFP's operations, and on general 
food distribution activities within these programs. In addition to 
reviewing WFP's internal controls and risk management process, we 
analyzed WFP's methods for estimating losses of food commodities after 
arrival at the port-of-entry.[Footnote 12] We reviewed WFP and 
external oversight reports and also reviewed relevant U.S. government 
documents, including monitoring reports on WFP operations. We 
conducted fieldwork in Ethiopia and Kenya; however, we did not conduct 
fieldwork in Somalia because of logistical constraints and security 
concerns. We met with WFP Headquarters officials in Rome, Italy, 
officials from WFP's East and Central Africa Regional Bureau in 
Nairobi, Kenya, and with WFP country officials for Ethiopia, Kenya, 
and Somalia. We also met with officials from the U.S. Agency for 
International Development (USAID), the U.S. Mission to the UN Agencies 
in Rome, the Food and Agriculture Organization of the United Nations 
(FAO), the UN High Commissioner for Refugees, and the UN Office for 
the Coordination of Humanitarian Affairs in Rome, Ethiopia, and Kenya. 
In Rome, we also met with some WFP recipient and donor representatives 
who are members of WFP's Executive Board, with members of WFP's Audit 
Committee, and with WFP's External Auditor. See appendix I for a 
detailed discussion of our objectives, scope, and methodology. 

We conducted our work from July 2011 to September 2012 in accordance 
with generally accepted government auditing standards. Those standards 
require that we plan and perform our work to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
and conclusions based on our objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our objectives. 

Background: 

Because of the nature of its work as a humanitarian organization, WFP 
is called to serve where needed. As a result, WFP often operates in 
environments with a high level of inherent risk to the security of its 
staff, its ability to deliver food to beneficiaries, and its ability 
to maintain high standards of internal control. In the countries where 
WFP operates, the United Nations Department of Safety and Security 
(UNDSS) assesses the general security environment in specific 
geographic areas using five categories of threats: armed conflict, 
terrorism, crime, civil unrest, and hazards. UNDSS rates each area at 
one of six security levels, with level 6 indicating the most dangerous 
environment. The UN Security Management System uses these ratings to 
assess security risks to UN agencies, funds, and programs; on the 
basis of these assessments, WFP determines appropriate risk mitigation 
measures to protect its staff and operations. WFP's current security 
philosophy emphasizes seeking approaches to deliver food assistance 
where it is needed despite the risks.[Footnote 13] 

As of August 2012, WFP had an operational presence in 78 countries and 
had designated as high risk 23 countries where it operates, including 
10 countries in Sub-Saharan Africa (see figure 1).[Footnote 14] 

Figure 1: WFP's Operational Presence as of August 2012: 

[Refer to PDF for image: illustrated world map] 

Location of WFP Regional Bureaus: 
Bangkok, Thailand; 
Cairo, Egypt; 
Dakar, Senegal; 
Johannesburg, South Africa; 
Khartoum, Sudan; 
Nairobi, Kenya; 
Panama City, Panama. 

Location of WFP Headquarters: 
Rome, Italy. 
           
WFP operational presence: 
Algeria; 
Armenia; 
Azerbaijan; 
Bangladesh; 
Benin; 
Bhutan; 
Bolivia; 
Burkina Faso; 
Burundi; 
Cambodia; 
Cameroon; 
Cape Verde; 
Central African Republic; 
Cuba; 
Djibouti; 
Dominican Republic; 
Ecuador; 
El Salvador; 
Gambia; 
Georgia; 
Ghana; 
Guatemala; 
Guinea; 
Guinea-Bissau; 
Honduras; 
India; 
Jordan; 
Kyrgyzstan; 
Laos; 
Lesotho; 
Libya; 
Madagascar; 
Malawi; 
Mali; 
Mauritania; 
Mozambique; 
Myanmar; 
Namibia; 
Nicaragua; 
Niger; 
Peru; 
Republic of Congo; 
Rwanda; 
Sao Tome and Principe; 
Senegal; 
South Sudan; 
Swaziland; 
Tajikistan; 
Tanzania; 
Timor-Leste; 
Togo; 
Uganda; 
Zambia. 

WFP presence in countries/territories it has designated as high-risk: 
Afghanistan; 
Chad; 
Colombia; 
Cote D'Ivoire; 
Democratic People's Republic of Korea; 
Democratic; 
Republic of the Congo; 
Egypt; 
Ethiopia; 
Haiti; 
Iraq; 
Kenya; 
Liberia; 
Nepal; 
Pakistan; 
Palestinian Territories; 
Philippines; 
Sierra Leone; 
Somalia; 
Sri Lanka; 
Sudan; 
Syria; 
Yemen; 
Zimbabwe. 

Sources: World Food Program; Map Resources and CIA (map). 

[End of figure] 

WFP provides most of its assistance through emergency operations 
(EMOP) and protracted relief and recovery operations (PRRO).[Footnote 
15] To deliver food to intended beneficiaries, WFP works with private 
land transporters[Footnote 16] and with implementing 
partners,[Footnote 17] including NGOs, UN organizations, and recipient 
governments. WFP field monitors observe food distributions and, a few 
days or weeks after the distribution, conduct post-distribution 
monitoring, interviewing beneficiaries about the quantity of food 
received, their use of the food, and the food's acceptability and 
quality. WFP uses its Commodity Movement, Processing and Analysis 
System (COMPAS), a global database, to track commodities throughout 
the supply chain, from the initial request for commodities by WFP 
field offices to the distribution of the commodities to beneficiaries. 
WFP's logistics unit tracks and calculates losses of food assistance 
after delivery at the port-of-entry and reports annually on these 
losses to WFP's Executive Board. 

Contributions to WFP: 

WFP receives voluntary contributions from a variety of donors--
governments, the public, and the private sector. In 2011, WFP received 
about $3.7 billion in contributions,[Footnote 18] almost 62 percent of 
which came from the United States, Canada, Japan, the European 
Commission, and Germany (see figure 2). The United States, the single 
largest donor, provided about $1.2 billion--more than 30 percent of 
WFP's 2011 funding--in cash and in-kind food aid. In addition to these 
contributions, U.S. agencies and officials based in the United States, 
in Rome, and in the field provide administrative, programmatic, 
technical, and operational guidance to WFP and also conduct monitoring 
of U.S.-funded WFP programs where the U.S. government has not 
restricted its staffs' access.[Footnote 19] WFP also submits reports 
on its operations and performance to the U.S. government, as it does 
to all WFP Executive Board members. 

Figure 2: Donor Contributions to WFP in 2011: 

[Refer to PDF for image: pie-chart] 

Total contributions: $3.67 billion: 
USA: $1.24 billion (33.76%); 
Canada: $0.29 billion: (8.03%); 
Japan: $0.28 billion: (7.67%); 
European Commission: $0.26 billion: (7.02%); 
Germany: $0.19 billion: (5.30%); 
Others: $1.41 billion: (38.24%). 

Source: GAO analysis of WFP 2011 Annual Performance Report. 

[End of figure] 

WFP Governance, Oversight, and Management Structure: 

Several external and internal governance and oversight bodies are 
responsible for providing oversight of WFP and helping manage WFP 
risks. Figure 3 shows WFP's governance, oversight, and management 
structure. 

Figure 3: WFP Governance, Oversight, and Management Structure: 

[Refer to PDF for image: illustration] 

WFP Executive Board:   

UN Governing Bodies: 
UN General Assembly; 
ECOSOC; 
ACABQ; 
FAO Conference; 
FAO Council; 
FAO Finance Committee. 

Independent external oversight bodies: 
* UN Joint Inspection Unit: Reports/information provided to WFP 
Executive Board; 
* External Auditor: Accountability relationship with WFP Executive 
Board; 
* Audit Committee: Reports/information provided to Executive Director. 

WFP management and independent internal oversight: 
Executive Director: 
* Management offices: Accountability relationship with Executive 
Director; 
* Office of Evaluation: Reports/information provided to Executive 
Director; Accountability relationship with WFP Executive Board; 
* Inspector General and Oversight Office: Accountability relationship 
with Executive Director; Reports/information provided to WFP Executive 
Board. 

FAO: Food and Agriculture Organization of the United Nations. 

ECOSOC: UN Economic and Social Council. 

ACABQ: UN Advisory Committee on Administrative and Budgetary Questions. 
         
Source: GAO analysis of UN data; Map Resources (map). 

[End of figure] 

* UN governing bodies. Several UN entities, comprising representatives 
of the UN's 193 member states, provide governance to WFP. These 
entities include the UN General Assembly, the FAO Conference, the UN 
Economic and Social Council, the FAO Council, the UN Advisory 
Committee on Administrative and Budgetary Questions, and the FAO 
Finance Committee. 

* WFP Executive Board. WFP's Executive Board includes representatives 
of 36 UN member states who are responsible for providing 
intergovernmental support and specific policy direction and 
supervision of WFP activities. The Executive Board exercises oversight 
over senior management. The Advisory Committee on Administrative and 
Budgetary Questions and the FAO Finance Committee are advisory bodies 
to the board. 

* Independent external oversight. WFP's independent external oversight 
is intended to assist the Executive Board in fulfilling its 
responsibility. The WFP External Auditor is appointed by, and reports 
to, the Executive Board and performs audits of WFP to satisfy him-or 
herself that the internal controls, including the internal audit, are 
adequate. The WFP Audit Committee serves in an expert advisory 
capacity to assist the Executive Board and the Executive Director in 
exercising their governance responsibilities for the financial 
reporting, internal control arrangements, risk management processes 
and other audit-related matters. The UN Joint Inspection Unit is 
mandated to conduct system-wide evaluations, inspections, and 
investigations throughout the UN. 

* Management structure. As head of WFP management, the Executive 
Director is responsible and accountable to the Executive Board for the 
administration of WFP and the implementation of WFP programs, 
projects, and other activities and for establishing effective internal 
controls and an effective independent internal oversight. WFP has a 
three-tier organizational structure, with its headquarters in Rome, 
Italy; seven regional bureaus (see appendix II, figure 8); and 77 
country offices. Headquarters is responsible for governance, strategic 
planning, policy making and macro-level monitoring. The regional 
bureaus provide technical assistance to the country offices and 
oversee their adherence to corporate guidelines, practices, and 
procedures. (See appendix II for additional information on WFP's 
governance, oversight, and management structure.) 

* Independent internal oversight. WFP's Office of Evaluation and the 
Inspector General and Oversight Office are independent of WFP's 
management and conduct audits, investigations, and inspections of 
WFP's systems, processes, operations, and activities. 

Design of WFP Internal Controls Related to Delivering and Monitoring 
Food Assistance Generally Reflects COSO Principles but Could Be 
Strengthened to Better Manage Risks: 

The design of WFP internal controls related to delivering and 
monitoring food assistance generally reflects COSO principles. 
However, several controls could be strengthened to better manage 
risks, including risks affecting WFP's ability to deliver food 
assistance to intended beneficiaries. WFP's internal control framework 
has five components.[Footnote 20] 

* Internal environment. WFP has designed policies and procedures to 
set the organization's tone and emphasize internal controls, 
reflecting COSO principles, but oversight by WFP's Executive Board and 
Audit Committee is limited.[Footnote 21] 

* Risk management. WFP has developed risk management policies and 
guidance, as recommended by COSO. However, WFP has not fully developed 
guidelines for implementing risk management, including guidelines for 
defining risk tolerance.[Footnote 22] 

* Control activities. WFP has designed numerous control activities, in 
line with COSO principles,[Footnote 23] to help ensure tracking of 
food assistance from port-of-entry to beneficiaries. However, the 
design of its commodity tracking system has weaknesses that limit its 
ability to account for food in the custody of implementing partners. 

* Information and communication. WFP has several mechanisms for 
identifying, capturing, and communicating information to and from WFP 
management, in accordance with COSO principles. 

* Monitoring. WFP has developed detailed policies on monitoring 
delivery of food assistance to beneficiaries, reflecting COSO 
principles, but this guidance does not call for monitoring to be risk 
based as recommended by WFP's External Auditor. 

Internal Environment: WFP Has Designed Policies and Procedures to Set 
Tone of Organization, but Governance Oversight Is Limited: 

In establishing its internal environment, WFP has designed policies 
and procedures, including developing a new internal control framework, 
to set the tone of the organization and influence staff consciousness 
of the importance of internal control. In addition, WFP plans to 
provide additional training and guidance to strengthen managerial 
control. However, some Executive Board members told us that their 
oversight is limited because of competing obligations and limited 
resources. Moreover, statements in WFP Audit Committee's reports, as 
well as remarks by the committee's current chairman and some Executive 
Board members, indicate that the board does not fully utilize the 
committee to provide the necessary independent oversight on internal 
controls.[Footnote 24] 

[Text box: 
Internal Environment: 
According to COSO, the internal environment sets the tone of an 
organization, influencing the control consciousness of its people, and 
is the foundation for all other components of internal control, 
providing discipline and structure. Internal environment factors 
include the integrity, ethical values, and competence of staff; 
management's philosophy and operating style; the way management 
assigns authority and responsibility and organizes and develops its 
people; and the attention and direction provided by the board of 
directors. 

Source: COSO, "Internal Control--Integrated Framework" (1992).
End of text box] 

WFP Has Developed Policies and Procedures to Set Tone of Organization: 

WFP has developed several policies and procedures to set the 
organization's tone and influence staff consciousness of the 
importance of internal control, reflecting COSO principles. For 
example, to address the integrity and ethical value of the 
organization, WFP established an ethics office in 2008 and has 
developed ethics-related policies, such as financial disclosure, 
antifraud and anticorruption, and whistleblower protection. In 
addition, since 2009, WFP's management has reported on several efforts 
aimed at strengthening elements of its internal environment, taken 
under WFP's Strengthening Managerial Control and Accountability 
(SMCA). According to WFP, the SMCA initiative identified key actions 
to further improve internal controls. In September 2011, WFP issued a 
new internal control framework based on COSO that, according to the 
Executive Director, took into account the views of the external and 
internal auditors and the Audit Committee. WFP also developed guidance 
to help staff apply the new internal control framework, including a 
new manager's guide to internal control, an accountability guide for 
managers, and a new internal control self-assessment checklist. In 
addition, WFP introduced a process that required all senior managers 
to provide the Executive Director with assurances related to the 
operation of internal control within their offices. Based on this new 
process, the former Executive Director included, for the first time, a 
statement on internal control in WFP's 2011 audited annual accounts. 
[Footnote 25] According to the former Executive Director, this 
statement provides specific assurance on the effectiveness of all 
internal controls in WFP.[Footnote 26] 

WFP Plans to Provide Additional Training and Guidance to Strengthen 
Managerial Control: 

WFP's former Executive Director reported that, to strengthen 
managerial control, WFP plans to increase support and training of 
managers and staff in key aspects of internal control, including 
ethics. According to WFP, ethics training is not mandatory. WFP stated 
that after it has identified the needed funding, it will establish a 
directive to include mandatory training in ethics and integrity to all 
staff. Currently, the ethics office provides ethics training to all 
new staff, procurement staff, and 100 workplace advisers in all 
country offices and regional bureaus. According to COSO, a strong 
ethical climate is vital to the well-being of the organization, all of 
its constituencies, and the public at large. In addition, the former 
Executive Director said that WFP's management will provide further 
refinement of the internal control guidance and tools and improvements 
in the assurance questionnaire that managers are required to complete. 

Some WFP Executive Board Members Say Oversight Is Constrained by 
Competing Obligations and Limited Staff Resources: 

Some of the members of WFP's Executive Board told us that their 
oversight of WFP's operation is constrained by competing obligations 
and limited staff resources.[Footnote 27] According to COSO 
principles, the control environment and "tone at the top" are 
influenced significantly by the entity's board of directors.[Footnote 
28] COSO adds that factors determining the board's influence include 
the extent of its involvement and scrutiny of activities and the 
degree to which it raises, and pursues with management, difficult 
questions regarding plans or performance. Given the highly 
decentralized and complex nature of WFP's operation, the significance 
of an active board has been reinforced by the more frequent and 
extensive crises in many high-risk environments as well as by the 
allegations of diversion of WFP's food assistance in Somalia. 

During our meeting with some of WFP's Executive Board members, they 
informed us that because of their extensive responsibilities on the 
boards of FAO, the International Fund for Agriculture Development, and 
WFP, they do not have sufficient time or staff resources to ensure 
that WFP is being managed effectively. Similarly, our 2007 review of 
governance and oversight at six UN entities,[Footnote 29] including 
WFP, found that board members described oversight as difficult because 
they lacked sufficient resources and expertise. WFP board members also 
informed us that they were surprised to have learned about the 2009 
allegations of food diversion and other lapses in internal controls in 
Somalia from the news media rather than from WFP's management before 
the allegations were made public. 

Executive Board Does Not Fully Utilize Audit Committee for Oversight 
Assistance: 

Statements in recent WFP Audit Committee reports, as well as remarks 
by the committee's current chairman and some Executive Board members, 
indicate that the board does not fully utilize the committee for 
assistance in providing the independent oversight that is needed to 
strengthen accountability and governance in WFP. COSO states that an 
entity's audit committee is in a unique position to question top 
management regarding how it is carrying out its financial reporting 
responsibilities; the committee also has the authority to ensure that 
corrective action is taken and is in the best position to identify and 
act in instances where top management overrides internal controls. 
[Footnote 30] 

In 2007, we recommended that WFP establish an audit committee that is 
independent of management and report directly to the Executive Board. 
[Footnote 31] We also stated at that time that an external audit 
committee, accountable to the governing body, could assist the 
Executive Board with its responsibility to monitor the organization 
oversight function. In 2009, WFP established an external audit 
committee to provide independent, expert advice to the Executive Board 
and the Executive Director in fulfilling their governance 
responsibilities.[Footnote 32] The committee's terms of reference also 
outline responsibilities for, among other things, ensuring the 
effectiveness of WFP's internal control systems, risk management, 
audit and oversight functions, and governance processes. In 2010, 
WFP's External Auditor noted benefits from the Audit Committee's 
activities and recommended that the board place increasing reliance on 
the committee regarding audit matters, including significant control 
issues such as those in Somalia.[Footnote 33] 

However, in September 2011, the current Chairman of the Audit 
Committee informed us that the committee believed its terms of 
reference were too limited. Although the Audit Committee's terms of 
reference do not specifically prevent committee members from attending 
board meetings, the current Chairman told us that the committee's 
Chair, alone among its members, is permitted to attend only one 
Executive Board meeting per year. In contrast, according to the 
Chairman, the committee believed that all members should be allowed to 
attend each of the Executive Board's three annual meetings. In 
addition, the current Chairman stated that although the committee 
meets quarterly with several members of the Executive Board,[Footnote 
34] no process exists to ensure that the board consults with the Audit 
Committee regarding high-risk issues or situations that could expose 
WFP to fraud allegations in the future. Moreover, the Audit Committee 
reported in 2011 that, like the Executive Board, it was not informed 
in advance of the allegations related to food diversion in Somalia in 
2009. In November 2011, the External Auditor reported that the 
Executive Board had revised the Audit Committee's terms of reference 
to clarify, among other things, that the committee's Chair can inform 
the president of the board of any serious governance issue at any time. 

In addition, statements in the Audit Committee's recent annual reports 
to the Executive Board, as well as remarks by the committee's current 
Chairman, indicate that the committee believes that it is not being 
fully utilized. In both its 2011 and 2012 annual reports, the Audit 
Committee stated that it "can be only as effective as the degree of 
'buy-in' by the board and management of the need for an independent 
Audit Committee and of their acceptance of the Audit Committee's 
role."[Footnote 35] In its 2012 report, the Audit Committee also 
stated that because external audit committees are new entities within 
the UN system, there is "an understandable lack of clarity of how best 
to use an audit committee consisting of outside experts." In addition, 
the 2012 report states that audit committees can leverage the work of 
the board and can provide independent advice to senior management. 
Further, in both its May 2011 and 2012 reports, the Audit Committee 
stated that it could not secure permission for site visits, possibly 
because of financial reasons. The committee emphasized the importance 
of conducting site visits, which it considers to be the norm for an 
audit committee in order to observe operations for which it has an 
oversight fiduciary responsibility. In September 2011, the committee's 
current Chairman informed us that the committee had proposed that its 
role encompass more than a review. The Chairman also stated that site 
visits would allow the committee to check, on a test basis, selected 
offices, such as Haiti and Kenya, to determine whether its 
recommendations were implemented. In its May 2012 report, the FAO 
Finance Committee stated that the "added value of these visits would 
have to be clearly established to avoid duplication of efforts by the 
external and internal auditors and unnecessary burdening of field 
office staff with extra tasks."[Footnote 36] The FAO committee 
requested a proposal for field visits, including an analysis of the 
costs and benefits of such visits. 

Finally, some WFP Executive Board members informed us that it is 
difficult for the Audit Committee to be useful, owing to its lack of 
resources and on-the-ground experience of WFP's operations and the UN 
overall. The revised Audit Committee terms of reference emphasize that 
members possess high qualifications and experience. 

Risk Management: WFP Has Developed Policies for Managing Risks but Has 
Not Yet Provided Guidance Needed to Implement Risk Management 
throughout Organization: 

WFP has taken a number of actions to embed risk management throughout 
the organization, such as developing an enterprise risk management 
policy and a risk management framework.[Footnote 37] In addition, WFP 
told us that it has recently developed or refined various tools, such 
as risk-level scales, its corporate risk profile,[Footnote 38] and 
risk registers. However, WFP has not provided updated and adequately 
detailed guidelines to aid staff in identifying, assessing, and 
responding to risks. Further, the board has not set risk tolerance 
levels for WFP's operations or communicated these in policies and 
guidelines, as its enterprise risk management policy stipulates. 
[Footnote 39] 

[Text box: 
Risk Management: 
COSO defines risk management as a process designed to identify events 
that may affect the entity and to manage risk to be within its risk 
appetite, to provide reasonable assurance regarding the achievement of 
entity objectives. This process is effected by an entity's board of 
directors, management, and other personnel and applied in strategy 
setting and across the enterprise. 

Source: COSO, "Enterprise Risk Management --Integrated Framework," 
2004. 
[End of text box] 

WFP Has Taken Actions to Embed Risk Management throughout Organization: 

WFP has taken a number of actions aimed at embedding risk management 
throughout the organization, as suggested by COSO. According to COSO, 
enterprise risk management is most effective when risk management 
mechanisms are built into the entity's infrastructure and are part of 
the essence of the organization; by building in enterprise risk 
management, an entity can directly affect its ability to implement its 
strategy and achieve its mission. 

In 2005, WFP's Executive Board approved an enterprise risk management 
policy, which provides the board's overall intention and direction 
regarding the management of risks. The policy states that the board's 
goal is to embed throughout WFP a systematic, effective, and 
sustainable approach to managing risks and opportunities that adds 
value to decision making and is linked to objectives and results. The 
policy also states that it envisages a risk management framework based 
on the COSO enterprise risk management framework. In addition, the 
policy discusses the role of WFP's Executive Board and management and 
summarizes WFP's risk management philosophy. 

In 2009, as part of its SMCA initiative, WFP continued the process of 
developing a risk management system.[Footnote 40] According to WFP, a 
major gap in its risk architecture has been the lack of a system that 
enables managers to link risks directly to their objectives and that 
allows for the appropriate escalation of risk within the organization. 
In addition, according to WFP, budgetary constraints limited the 
support available to field offices to implement risk management 
effectively during 2009 and 2010. As of May 2012, WFP had taken a 
number of actions to help embed risk management throughout the 
organization, including: 

* creating an executive management council to review the effectiveness 
of risk and performance management arrangements and to review risks 
that have been escalated for its consideration; 

* establishing a network of performance and risk management champions 
across all country and regional offices to guide best practice; 

* beginning to develop a new organization-wide information technology 
system, intended to bridge the gap between risk management in country 
offices and at the corporate levels, which it expects to roll out to 
all business units and offices by 2013; and: 

* developing training programs on integrated risk and performance 
management, which it has provided to key country offices and will 
continue to provide in 2012 to offices that have not yet received it. 

Also in May 2012, WFP reported that it had recently developed or 
refined various tools, such as impact, likelihood, and risk-level 
scales and categories; a corporate risk profile; corporate-, country-, 
and entity-level risk registers; and a risk management escalation 
process. Moreover, the Audit Committee stated in its April 2012 report 
to the Executive Board that it welcomed the use of the corporate risk 
register and that in 2011, an increasing number of offices put in 
place formal systems to identify, evaluate, and record risks. In May 
2012, the Executive Director reported that, as of December 2011, 67 
percent of office entities (i.e., country offices, regional bureaus, 
and headquarters divisions) had formal risk registers. According to 
WFP's former Executive Director, all WFP offices were expected to have 
formal risk registers by the end of 2012. Further, in March 2012, the 
former Executive Director, after identifying a need for further 
training and guidance on managing risk, stated that this need will be 
addressed in 2012. 

In addition, since 2011, WFP has identified risks based on three risk 
categories--contextual, programmatic, and institutional--that reflects 
the humanitarian context in which it operates.[Footnote 41] WFP 
defines these categories as follows: (1) Contextual risks include 
those over which WFP has very little control, such as armed conflict, 
drought, and other humanitarian crises. (2) Programmatic risks include 
not meeting WFP's objectives and causing harm to others, such as 
reduced program oversight with possible misuse of assistance, drawing 
beneficiaries into a conflict zone, and lack of donor funding. (3) 
Institutional risks are those with significant implications to WFP, 
such as misappropriation of assistance, corruption by partners, and 
reputational damage. 

Finally, in May 2012, WFP developed a risk management framework, which 
is embedded in its Financial Resource Management Manual. In a draft 
document, WFP states that this framework is based on past lessons and 
best practices from the public and private sectors and from other UN 
agencies.[Footnote 42] 

WFP Has Not Yet Provided Guidance Needed to Ensure Effective 
Organization-wide Implementation of Risk Management: 

WFP's internal control framework identifies event identification, risk 
assessment, risk response, and risk tolerance as key principles of its 
risk management process. However, WFP has not yet provided guidance 
operationalizing these principles to help ensure consistent and 
integrated implementation of risk management throughout the 
organization. According to COSO, while an organization may have a 
sound strategy, competent employees, sound business processes, and 
reliable technology, every organization is vulnerable to risk and 
needs an effectively functioning risk management process. In addition, 
according to the UN Joint Inspection Unit, the risk management process 
must be formalized and operationalized through a framework, 
guidelines, and other administrative instructions, easily accessible 
to all staff, for consistent and correct implementation across 
organizational units. 

In 2006, WFP management developed a risk management guide that briefly 
describes a risk management process; however, the 2006 guide is not 
clearly related to WFP's current internal control or enterprise risk 
management frameworks, and it does not clearly describe methodologies 
and tools to assess risks.[Footnote 43] In January 2012, WFP 
management produced a draft facilitator's guide for training staff in 
preparing country risk registers.[Footnote 44] According to WFP, as of 
June 2012, it had finalized training material for preparing the risk 
registers that was piloted in the South Africa region. WFP stated that 
it plans to roll out the training to the rest of the regions in 2013. 
However, WFP management has not yet provided overall guidance on the 
risk management process for staff in identifying, assessing, and 
responding to risks, among other activities.[Footnote 45] Without a 
comprehensive guidance on the risk management process, WFP staff may 
lack appropriate methodologies and tools to assess risks, especially 
at the country level, where WFP is most exposed to risks. 

Further, WFP's Executive Board and management have not set or 
communicated organization-wide risk tolerance levels for WFP's 
operations or provided guidelines on setting risk tolerance levels on 
a case-by-case basis. WFP's enterprise risk management policy 
stipulates that the Executive Board or the Executive Director will set 
risk tolerance levels where appropriate and will communicate risk 
tolerance levels through corporate policies and guidelines. The policy 
also states that managers will set prudent tolerance levels within 
their areas of responsibility and authority. According to COSO, based 
on best practices, boards of directors are responsible for setting 
organization-wide risk tolerance. COSO states that some boards have 
established a risk committee to focus directly on enterprise risk 
management, with the committee's responsibilities including developing 
and refining the organization-wide risk appetite and risk 
tolerance.[Footnote 46] COSO also states that it is not uncommon for 
oversight responsibility for enterprise risk management to be assigned 
to the Audit Committee. COSO states that "in many cases it is believed 
that with its focus on internal control over financial reporting, and 
possibly a broader focus on internal control, the audit committee 
already is well positioned to expand its responsibility to overseeing 
enterprise risk management." In its 2011 annual report, the WFP Audit 
Committee recommended that enterprise risk management should be a 
standard agenda item at each Executive Board meeting and that this 
would help the board refine the risk tolerance parameters within which 
it wants WFP to operate. 

WFP management informed us that it is currently engaged in discussion 
of how risk tolerance should be set on a case-by-case basis but 
expressed reluctance to articulate an organization-wide risk tolerance 
level, stating that "it is not possible to balance financial or 
stewardship risks in monetary terms against the potential loss of life 
that would result from WFP's withdrawal," for example, from a country 
or a program. However, our review of WFP policy and guidance showed 
that the Executive Board has not yet provided any written guidance to 
management on developing risk tolerance levels on a case-by-case 
basis, such as by considering the levels of food losses it is willing 
to tolerate to achieve its objective of providing food assistance 
under its emergency program in a country such as Somalia. Moreover, 
the current emergency program document for Somalia makes no reference 
to risk tolerance. 

Control Activities: WFP Has Designed Policies and Procedures for 
Tracking Food Assistance from Port-of-Entry to Beneficiaries, but 
Tracking System Has Weaknesses: 

WFP has policies and procedures designed to help ensure tracking of 
food in its custody from port-of-entry to beneficiaries. In addition, 
WFP has policies and procedures designed to help prevent loss of food 
in implementing partners' custody, but its commodity tracking system 
has weaknesses, particularly tracking food in implementing partners' 
custody. 

[Text box: 
Control Activities: 
COSO defines control activities as the policies and procedures that 
help ensure that necessary actions are taken to address risks to 
achievement of an entity's objectives. Control activities include a 
range of activities as diverse as approvals, authorizations, 
verifications, reconciliations, and reviews of operating performance 
and security of assets. 

Source: COSO, "Internal Control--Integrated Framework" (1992). 
End of text box] 

WFP Has Policies and Procedures Designed to Help Ensure Tracking of 
Food in Its Custody: 

WFP has designed policies and procedures intended to protect against 
the loss of food in its custody during delivery at the port-of-entry, 
transport to WFP warehouses, and storage in warehouses. In addition, 
WFP has designed policies and procedures for WFP staff to follow in 
distributing food to beneficiaries. The following are examples of 
WFP's control activities. 

* Port-of-entry. The WFP country office is responsible for supervising 
and coordinating the delivery of food commodities at the port-of-entry 
and for ensuring that all parties, such as recipient authorities and 
superintendents,[Footnote 47] are aware of their roles in the 
operation, according to WFP's Transport Manual. A staff member from 
the WFP country office should be present, where feasible, or should 
monitor the operation through superintendents or agents. In addition, 
the country office should ascertain how the commodities will be stored 
after delivery or moved from the port. 

* Transport. Transporters bidding on contracts to transport WFP food 
assistance receive WFP's terms of agreement detailing, among other 
things, the transporter's liability for any losses or damage of food 
in its custody. According to the Transport Manual, a waybill must 
accompany food in the transporter's custody, attesting to the type and 
quantity of commodities transported; the name of the transporter; the 
vehicle details; the loading location and destination; and the 
departure and expected and actual arrival dates. At the destination, 
the WFP warehouse manager or consignee completes, signs, and stamps 
the waybill, acknowledging receipt and noting any loss or damage. The 
manager then makes a parallel entry in COMPAS--WFP's commodity 
tracking system--which automatically adjusts data, such as for stored 
or damaged goods, at the receiving site. After the food is delivered, 
the transporter submits the completed waybill to WFP's finance office 
to request payment for the services rendered. 

* Warehouse. Food commodities in WFP warehouses must be managed 
through the COMPAS inventory module, according to WFP's Transport 
Manual. In warehouses not yet computerized, commodities are to be 
managed through warehouse ledgers that are checked against stack cards 
on a regular basis.[Footnote 48] In addition, the warehouse manager is 
required to conduct physical inventory of stock in the warehouses at 
regular intervals, to prevent and detect losses. Further, WFP staff 
are instructed to reconcile information on incoming, outgoing, and on-
hand stock, as well as information from manual systems--stack cards 
and ledgers--with information in COMPAS. WFP's Warehouse Management 
Handbook documents procedures for the storekeeper, including 
procedures for maintaining warehouse premises--such as installing 
boundary fences and gates to secure the warehouse against unauthorized 
entry--and warehouse buildings; procedures for unloading and checking 
food commodities, such as inspecting each new container food unloaded 
and addressing any defects; and procedures for creating and 
maintaining records. Further, WFP's Program Guidance Manual outlines 
procedures for WFP staff to follow in taking food from WFP warehouses 
for distribution to beneficiaries. 

* Distribution to beneficiaries. WFP's Program Guidance Manual states 
that WFP staff must complete various tasks immediately before 
distributing food assistance, such as verifying that required food has 
arrived, that distribution documents are ready, and that local 
authorities are present at the distribution. In addition, WFP staff 
must follow detailed instructions during the distribution, including 
scooping and weighing food and requiring that beneficiaries record 
their receipt of food rations. 

Figure 4 shows some of WFP's control activities, from delivery of food 
commodities at the port-of-entry to distribution of food to 
beneficiaries. 

Figure 4: Examples of WFP Control Activities from Port-of-Entry to 
Distribution of Food Assistance: 

[Refer to PDF for image: illustration with 7 photographs] 

4 stages of delivery: Control activities; 
Discharge at port: Superintendents report 
Inland transportation: 
* Request for quotation/award; 
* Landside transport instruction; 
* Waybill; 
Warehouse: 
* Stack card, warehouse ledgers; 
* Reports to country office; 
* Audit and inspection reports; 
* Reconciliation with WFP database; 
* Food distribution needs, food release notes, food distribution plan, 
storage release note documents; 
Distribution to beneficiaries: 
Food distribution report; 
Tally and receipt sheets; 
Distribution and post-distribution monitoring. 
  
4 stages of delivery: Description; 
Discharge at port: When the food arrives at the port, the food is 
discharged from the ocean vessel. An independent superintendent (if 
one exists) reports the amount discharged; 
Inland transportation: 
Before WFP procures transport for food assistance, transporters bid on 
contracts, or "requests for quotation." These contracts detail WFP's 
terms of agreement. The WFP country office logistics unit issues a 
landside transport instruction instructing the transporter on the 
delivery details. Waybills are issued with multiple copies that are 
sent to multiple parties (kept at the warehouse, sent to receiving 
office, sent to WFP country office, accompanying transporters); 
Warehouse: 
WFP maintains documents that track food stored in each warehouse. 
These documents are periodically reported to the country office. The 
warehouse is inspected periodically. Before food is transported from a 
warehouse, WFP's country office program unit issues documents 
authorizing the country office logistics unit to release the food 
assistance from the warehouse for transport.   
Distribution to beneficiaries: 
WFP issues tally and receipt sheets to record the amount of food each 
beneficiary receives. The implementing partner submits the food 
distribution report (which tracks the amount of food distributed) to 
WFP, WFP conducts monitoring during selected distributions and 
conducts post-distribution monitoring of beneficiaries.  
    
Port: 
Transport: WFP or implementing partner (IP) subcontractor; 
Extended distribution point warehouse: WFP or IP; 
Warehouse near distribution points: WFP or IP; 
Transport to distribution points: WFP or IP subcontractor; 
Warehouse near distribution points: WFP or IP; 
Distribution to beneficiaries. 

Source: GAO analysis of WFP's guidelines and procedures (data); Nova 
Development (clip art). 

[End of figure] 

WFP Has Policies and Procedures to Help Prevent Loss of Food in 
Implementing Partners' Custody: 

WFP has policies and procedures designed to help prevent loss of food 
after delivery to its implementing partners. For example, on receipt 
of WFP commodities, implementing partners are required to complete, 
sign, and stamp the WFP waybill, acknowledging receipt and noting any 
loss or damage, and WFP staff are to subsequently record information 
from the waybill into COMPAS, according to WFP's Transport Manual. In 
addition, WFP requires its implementing partners to submit monthly and 
quarterly distribution reports containing information that WFP staff 
also record in COMPAS, such as amounts of food in the warehouse before 
receipt of a new shipment, amounts of food received, and amounts of 
food distributed. These reports also show the movements of received 
and distributed food items as well as any losses that have occurred at 
the implementing partners' warehouses or during transport arranged by 
the implementing partners. The WFP country office is responsible for 
ensuring that implementing partners' reporting is regular, timely, and 
complete and for checking the quality of the data in the distribution 
reports. According to WFP's Transport Manual, these data quality 
checks are to include the overall consistency of the commodity 
accounts, such as accounting for the difference between opening stock 
and closing balance; completeness of data; and reconciliation of data 
on losses where relevant. The WFP country office is required to record 
in COMPAS the information in the distribution reports, to enable a 
complete accounting for the commodity logistics chain. 

Commodity Tracking System Has Weaknesses, Particularly Tracking Food 
in Implementing Partners' Custody: 

Weaknesses in the design of COMPAS limit WFP's ability to account for 
all food commodities, particularly in implementing partners' custody. 
According to WFP, although food commodities in WFP warehouses are 
managed and tracked through COMPAS, COMPAS does not track food after 
delivery to implementing partners and thus cannot fully account for 
food after it is handed over to implementing partners. 

In 2011, the External Auditor found that COMPAS does not allow the 
recording of accurate dates for distributions by an implementing 
partner at multiple sites in a given location, such as a city or 
province.[Footnote 49] The auditor noted that COMPAS permits the entry 
of only one distribution report per implementing partner for a 
location for a specified period. In cases where implementing partners 
distribute food at multiple sites in a given location, WFP staff are 
able to enter in COMPAS the implementing partners' reports for the 
extra sites only by entering different, and therefore inaccurate, 
reporting dates. The External Auditor recommended that, to facilitate 
reconciliation between WFP allocation plans and implementing partners' 
distribution reports, distribution site data should be captured in 
COMPAS for all food delivered to implementing partners. WFP agreed 
with the External Auditor's recommendation, stating that COMPAS now 
includes information on distribution sites, allowing offices to 
specify where distributions took place.[Footnote 50] 

In 2011, WFP's External Auditor also identified other weaknesses in 
COMPAS that hamper effective reconciliations of data in COMPAS. 
[Footnote 51] For example, the External Auditor observed that COMPAS 
does not facilitate the generation of reports or the export of a full 
set of data and, as a result, staff use other software to retrieve 
needed information from the system, exporting the information to 
worksheets for reconciliation.[Footnote 52] According to the External 
Auditor, this practice impairs data integrity. The External Auditor 
recommended that until WFP develops a new system to address the 
weaknesses in COMPAS, standardized report-generating tools should be 
used to prevent unauthorized staff from accessing COMPAS data. WFP did 
not agree with this recommendation and stated that it already uses 
recognized software to generate reports accessing COMPAS data and that 
it controls staff's access to the data by limiting access 
rights.[Footnote 53] In addition, WFP's management said that it sees 
no current benefit in further investment in reporting tools because it 
has begun an initiative, under the WFP Information Network and Global 
System II, to build a new logistics application--the Logistics 
Executions Support System--that includes commodity-tracking 
capabilities. According to WFP, assuming the availability of needed 
funding, WFP expects implementation of the new system to begin by the 
end of 2012 and to be completed by 2015. 

Information and Communication: WFP Has Taken Steps to Enhance 
Communication with Stakeholders: 

WFP has several mechanisms to enable communications between WFP 
management and stakeholders.[Footnote 54] Further, WFP management has 
recently improved its communication with the Executive Board. 

[Text box: 
Information and Communication: 
According to COSO, pertinent information must be identified, captured 
and communicated in a form and timeframe that enables people to carry 
out their responsibilities. 

Source: COSO, "Internal Control--Integrated Framework" (1992).
end of text box] 

WFP Has Several Mechanisms to Enable Communications between WFP 
Management and Stakeholders: 

WFP has developed mechanisms to identify, capture, and communicate 
information pertinent to its assistance efforts, among other things, 
to WFP management and stakeholders. For example: 

* According to WFP's Finance and Budget Manual, WFP management 
provides information about approved emergency operations and submits 
proposals for protracted relief and recovery operations above a given 
threshold to the Executive Board.[Footnote 55] These documents 
contain, among other things, details such as the number of 
beneficiaries, project duration, amount of food needed, and the cost 
of the food. These documents also have sections that discuss, for 
example, related actions of the country's government and other 
entities; WFP's assistance objectives and strategy response; WFP's 
implementing partners; WFP's performance monitoring methodology, risk 
assessment, and contingency planning; and security considerations 
related to operating in the environment. 

* WFP country offices prepare standard project reports to inform 
stakeholders about the use of resources for a given project and the 
results obtained during the reporting year.[Footnote 56] 

* WFP's logistics unit provides annual reports to the Executive Board 
on losses of food assistance after delivery at the port-of-entry, 
based primarily on data entered in COMPAS and WINGS II by the country 
offices. The country offices are responsible for quantifying losses 
during internal transport arranged by the country offices or regional 
bureaus as well as losses during post-delivery storage that is 
arranged and paid for by WFP. 

* WFP routinely distributes updates on its operations in the Horn of 
Africa,[Footnote 57] as well as separate monthly updates on its 
operations in Somalia, to its member states and partner organizations, 
including those within the UN system. These documents inform 
stakeholders about WFP activities in these areas and cover, among 
other things, the conditions of the areas, the beneficiaries WFP 
intends to assist, and information on resources or funding, as well 
as, in the case of Somalia updates, data on distribution sites 
monitored. According to a WFP official, WFP started distributing these 
updates in August 2011, following the declaration of famine in Somalia. 

WFP Management Has Recently Improved Its Communication with the 
Executive Board: 

Some of WFP's Executive Board members informed us that WFP management 
improved its communications with the board after lapses in 
communication during the time of the Somalia allegations. For example, 
in February 2011, WFP management initiated informal quarterly 
operational briefings with Executive Board members.[Footnote 58] 
According to staff at the U.S. Mission to the UN Agencies in Rome, WFP 
held four operational briefings in 2011, holding its first briefing 
after the WFP Executive Board's initial session that year. In June 
2012, the U.S. Mission to the UN Agencies in Rome staff told us that 
they had received two such briefings since January and that a third is 
planned for September. In addition, WFP stated that it had conducted 
three seminars in Nairobi with key stakeholders, including board 
members, WFP field staff, and implementing partners, in June 2011 to 
examine the risks faced and potential solutions in Somalia. Further, 
in September 2011, according to staff at the U.S. Mission to the UN 
Agencies in Rome, WFP briefed the Executive Board on the outcome of 
the Nairobi workshops. One board member informed us that the 
discussions in Nairobi were much more productive than the usual board 
meeting discussions. Also, board members told us that WFP informed the 
board in advance about an investigation of an implementing partner in 
Mogadishu, Somalia. 

WFP also developed a process for staff at the country level to follow 
in communicating information about risks to WFP management. This 
process is currently effected through normal management channels and 
includes the escalation of information about events from the country 
office level, to the regional bureau, to the chief operating officer, 
and finally to the executive management council. In addition, WFP 
developed procedures for its staff to follow in response to a 
suspected case of diversion or wrongdoing. However, neither the new 
process nor procedures include clear criteria as to when issues should 
be escalated to the board. According to WFP, the circumstances will 
dictate the criteria for escalation to the Executive Board. 

Monitoring: WFP Has Developed Guidance for Field Monitoring of Food 
Assistance but Does Not Call for Risk-Based Monitoring: 

WFP has developed detailed policies to help WFP monitors conduct field 
monitoring as laid out by country offices' monitoring plans. However, 
although WFP's External Auditor recommended risk profiling as a basis 
for focused monitoring, WFP's organization-wide monitoring guidance 
does not provide clear instructions to monitor distribution sites 
based on risk, including risks to WFP's ability to distribute food to 
intended beneficiaries. 

[Text box: 
Monitoring: 
According to COSO, monitoring is the means of assessing the quality of 
an internal control system's performance over time to ensure that 
internal controls continue to operate effectively. This is 
accomplished through ongoing monitoring activities, separate reviews, 
or a combination of the two. 

Source: COSO, "Internal Control--Integrated Framework" (1992). 
End of text box] 

WFP Has Developed Detailed Policies for Field Monitoring: 

WFP has developed detailed guidelines and policies that provide 
guidance to WFP staff and monitors on their roles and responsibilities 
in designing and implementing field monitoring of WFP operations. 
Detailed organization-wide guidance for monitors is available in WFP's 
Monitoring and Evaluation Guidelines and in WFP's Program Guidance 
Manual, which includes guidance for conducting food distribution 
monitoring and post-distribution monitoring for emergency operations 
and relief activities. In line with COSO's monitoring standards, WFP's 
Monitoring and Evaluation Guidelines states that all WFP's operations 
should be regularly and systematically monitored and evaluated and 
that emergency operations must immediately put in place a system for 
food distribution monitoring so that reliable information is available 
on who is being fed and how much food they are receiving.[Footnote 59] 
According to COSO, monitoring should include the existence of 
mechanisms for capturing and reporting identified internal control 
deficiencies. In line with COSO, WFP guidance instructs monitors to 
follow-up on any problems from prior distributions, crosscheck data, 
and notify their supervisor of any discrepancies noted during the 
collection of monitoring data. 

WFP's monitoring and evaluation guidance provides instructions for 
collecting field data, including discussions of sampling options, 
methods for choosing beneficiaries to interview, and instructions on 
collecting and processing qualitative data. In addition, WFP has 
developed numerous forms for food aid monitors to conduct on-site food 
distribution monitoring and post-distribution monitoring. WFP's job 
profile for its monitors states that they are responsible for 
conducting continuous monitoring and reporting of food assistance, 
identifying potential problems, and periodically monitoring risk 
management and report on any actions taken. 

[Side bar: [Photograph source: GAO] 
* During distribution monitoring, monitors observe the distribution 
process, check the records of the food being distributed, assess the 
efficiency of the process, and gather information from implementing 
partners and beneficiaries. 
* Post-distribution monitoring is carried out a few days or weeks 
after the date of food distribution through interviews with selected
beneficiaries. Monitors ask about the quantity of food received as 
well as utilization and satisfaction with food aid and protection
before, during, and after distribution. 
End of side bar] 

According to COSO, monitoring includes communications from external 
parties to corroborate internally generated information or to indicate 
problems. COSO also states that effective monitoring includes 
following up on corrective action where necessary. WFP guidelines 
reflect the COSO guidance by stating that WFP should work together 
with implementing partners to crosscheck monitoring findings, ensure 
that corrective action is taken when required, and assess the 
reliability and accuracy of partners' monitoring reports. 

Our review of WFP's monitoring guidelines indicates that WFP country 
offices develop their countries' monitoring plans and goals, including 
determining the number of sites to monitor and the frequency of 
monitoring. WFP guidelines state that country offices are responsible 
for monitoring and reporting on the progress, performance, and 
achievements of operations and programs as well as the handling and 
use of WFP-supplied commodities. WFP guidance also states that the 
amount of monitoring required depends on the distribution system 
adopted, the quantity of food being distributed, and the level of 
access to the distribution site. 

WFP's Monitoring Guidance Does Not Call for Risk-Based Monitoring 
Recommended by External Auditor: 

WFP officials in Rome, Ethiopia, Kenya, and Somalia told us that 
country offices often focus their monitoring efforts on areas with a 
history of implementation and security problems.[Footnote 60] However, 
WFP's organization-wide monitoring guidance does not provide clear 
instructions or guidelines stating that monitoring of warehouses and 
distribution sites should be based on risk, including risks to WFP's 
ability to distribute food to intended beneficiaries. In 2006, the 
External Auditor recommended that WFP use statistical sampling 
approaches based on risk profiling and informed by implementing 
partner records, beneficiary concerns, and prior history, as a basis 
for focusing its monitoring resources.[Footnote 61] According to COSO, 
an effective approach to monitoring includes designing and executing 
monitoring procedures that are prioritized based on risks to achieving 
organizational objectives. 

WFP's organization-wide field monitoring guidance instructs monitors 
to follow up on issues based on prior field monitoring findings and 
also notes that risks, along with resources, budget and other factors 
should be captured in monitoring and evaluation plans.[Footnote 62] 
However, the guidance does not clearly instruct WFP staff and field 
monitors to consider risk as a key factor when determining the level 
of monitoring needed at warehouses and distribution sites. In 
addition, the guidance does not include instructions for tailoring 
monitoring based on the types of risk identified, including contextual 
risks, such as armed conflict, and institutional risks that could 
affect WFP's reputation. For example, WFP's organization-wide 
monitoring guidance does not address alternative approaches to 
ensuring monitoring of food assistance distribution sites in high-risk 
areas where the UN Department of Safety and Security (UNDSS) has 
restricted WFP staff's access. Without specific guidance that 
monitoring should be risk-based, WFP staff lack appropriate 
instructions to develop monitoring plans for those areas that are most 
vulnerable to waste, fraud, and abuse. 

Security Restrictions and Limited Internal Controls Weaken Assurance 
of Food Delivery and Accurate Loss Reporting for Selected High-Risk 
Areas: 

In the areas of Ethiopia, Kenya, and Somalia that we selected for our 
review, WFP has implemented procedures for tracking food from port-of-
entry to beneficiaries, but security restrictions and limited internal 
controls in these areas weaken WFP's ability to track food delivered 
to implementing partners. Further, although WFP has taken steps to 
improve monitoring, security restrictions, a limited number of 
monitors, and logistical challenges constrain its monitoring in these 
countries, hampering WFP's ability to identify problems with food 
distribution. WFP has reported low rates of food assistance losses, 
but we found potential weaknesses in its collection of loss data after 
food is handed over to WFP's implementing partners for distribution to 
beneficiaries. Moreover, no external evaluation of WFP's food 
assistance loss data has been conducted since 2006. 

WFP Has Implemented Tracking Procedures but Has Limited Ability to 
Track Food in Custody of Implementing Partners in Selected Areas: 

Our review of WFP operations in selected areas of Ethiopia, Kenya, and 
Somalia showed that WFP has implemented procedures designed to prevent 
loss of food in its custody.[Footnote 63] However, limited access and 
lack of timely reporting by some implementing partners in these areas 
weaken WFP's ability to track food in implementing partners' custody. 

WFP Has Implemented Procedures to Prevent Loss of Food in Its Custody 
in Selected Areas of Ethiopia, Kenya, and Somalia: 

Our review of available documents for selected areas of Ethiopia, 
Kenya, and Somalia, as well as our visits to sites in Ethiopia and 
Kenya, found that WFP has implemented procedures for receiving food at 
the port-of-entry, procuring transporters, and storing food in WFP 
warehouses.[Footnote 64] For example: 

* Port-of-entry. We reviewed signed superintendence reports for 
Ethiopia, Kenya and Somalia. Each report included description of food 
commodities received at the port, the quantity received, and the 
shipping instruction number.[Footnote 65] 

* Transport. We reviewed signed requests for quotations from 
transporters in all three countries. We also reviewed samples of 
waybills for Ethiopia, Kenya, and Somalia that had been completed, 
signed by the dispatching and receiving warehouse storekeepers and the 
transporter, and stamped, per WFP policy. 

* Warehouses. We visited three WFP warehouses--one in Ethiopia and two 
in Kenya. As required by WFP policy, the warehouses had fences 
surrounding the buildings and appeared solid and stable; the 
warehouses' interiors appeared organized and were arranged to allow 
access to the stored commodities; and the commodities were stacked on 
raised platforms, with spacing between the top of the stacks and the 
roof. For all three countries, we viewed food release notes, 
reflecting requests for food that the countries' WFP program unit had 
made to the logistics unit prior to the food's release from WFP 
warehouses.[Footnote 66] WFP staff in Ethiopia, Kenya, and Somalia 
informed us that they reconcile data from WFP physical inventories 
against data in COMPAS. In Ethiopia, we observed WFP staff had 
reconciled physical inventory counts at given dates against food 
amounts that had been recorded in COMPAS, with explanations for any 
noted variations.[Footnote 67] In Kenya, staff at WFP's East and 
Central Africa Regional Bureau told us that WFP country office staff 
also complete monthly minimum closure reports, which the regional 
bureau staff use to verify that country offices have reconciled 
physical inventory counts against data in COMPAS. Further, staff at a 
WFP Ethiopia field office confirmed that they have segregated the 
duties of staff who have access to COMPAS. According to WFP, this 
practice is intended to maintain the integrity of the data recorded in 
COMPAS. For example, the head of logistics for the WFP Ethiopia office 
can access COMPAS to view and verify data recorded by field office 
staff but cannot edit or add to their inputs. 

Figure 5: WFP Warehouse in Ethiopia: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Implementing Partners in Selected Areas of Ethiopia and Kenya Have 
Implemented Controls to Track Food in Their Custody: 

We visited a food distribution site at a refugee camp in Ethiopia and 
two distribution sites in villages in Kenya. We also observed an 
implementing partner's implementation of controls during a food 
distribution at one of the sites in Kenya.[Footnote 68] 

* Ethiopia. At the food distribution site in Ethiopia, WFP's 
implementing partner, the Ethiopian government, told us that every 
refugee household must have a ration card to receive food.[Footnote 
69] We were also told that before each distribution, members of a 
relief committee--four WFP beneficiaries--verify that the materials 
used to measure rations are accurate and that the distribution process 
is conducted properly. The implementing partner said that 
representatives of the implementing partner performed distribution and 
post-distribution monitoring. In addition, members of the relief 
committee told us that the implementing partner's staff observes the 
food distribution process, and that the relief committee monitors the 
process and reports its findings to the implementing partner. Another 
third party, the UN High Commissioner for Refugees (UNHCR), also 
assists at the refugee camps.[Footnote 70] Despite these controls, WFP 
has noted weaknesses in the Ethiopian government's capacity to 
accurately account for, store, distribute, and report on food 
commodities in its care.[Footnote 71] 

Figure 6: Distribution of WFP Food Assistance in Kenya: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

* Kenya. At one of the distribution sites in Kenya, we observed a food 
distribution administered by a nongovernmental organization. We also 
observed a relief committee monitoring the distribution process. 
Further, we observed that the implementing partner's staff at the 
Kenya site organized the beneficiaries by family size, checking off 
beneficiaries from the beneficiary list as they received the ration, 
and that the implementing partner's monitors were present for the 
distribution. In addition, beneficiaries told us that WFP monitors are 
normally present at the implementing partner's distributions. 
According to WFP, the distribution we observed was 2 weeks late owing 
to land transport problems. At other distribution sites in Kenya, a 
2011 WFP Office of Evaluation report on Kenya noted that some food 
distributions had frequently been missed in part because of logistical 
challenges.[Footnote 72] The evaluation noted that one implementing 
partner reported that it had not delivered 10 of the past 15 
distributions. The evaluation did not note whether the undistributed 
food was accounted for or held until the next distribution round. 

Limited Access and Lack of Timely Reporting Weaken WFP's Ability to 
Track Food in Implementing Partners' Custody: 

WFP staff in Ethiopia told us that they inspect the implementing 
partners' warehouses to mitigate the lack of tracking through COMPAS 
of food delivered to implementing partners. They also said that they 
perform reconciliations of data in implementing partners' monthly and 
quarterly distribution reports against data in COMPAS, as required by 
WFP's Transport Manual. However, these efforts are constrained by 
limited WFP access as well as by a lack of timely reporting by 
implementing partners. 

* Limited WFP access. According to WFP staff, security restrictions 
imposed by UNDSS limit WFP's access to some areas and thus, in some 
cases, limit WFP's ability to inspect implementing partners' 
warehouses and verify their reporting. For example, WFP Ethiopia told 
us that because of UNDSS security restrictions, WFP staff have not had 
access since May 2011 to six districts in the Somali region of 
Ethiopia, where about 7,500 metric tons of WFP food commodities were 
distributed in 2011.[Footnote 73] According to WFP Ethiopia, one WFP 
staff was killed, one was injured, and two were taken hostage during 
an attack on WFP staff in this region in 2011. In addition, WFP 
Somalia staff told us that because of delays in finalizing a 
monitoring contract with a third party, there was limited WFP 
monitoring of implementing partners' warehouses or distribution sites 
in Mogadishu for several months in late 2011. According to WFP 
Somalia, in December 2011, two WFP staff were murdered in central 
Somalia after they discovered the use of inflated beneficiary 
distribution lists. 

* Lack of timely reporting by implementing partners. Some implementing 
partners in Ethiopia, Kenya, and Somalia do not submit their monthly 
distribution reports on a timely basis, according to WFP. To address 
this problem, WFP Somalia has developed standard operating procedures 
that outline steps that WFP staff in Somalia should take if 
implementation partners do not provide their distribution reports on 
time. WFP staff in Somalia also told us that in 2010 they distributed 
a warning letter to implementing partners stating that WFP will 
withhold payments if reports are late for 3 months or more. Further, 
WFP's External Auditor stated that receiving timely monthly 
distribution reports from implementing partners has historically been 
a challenge for WFP. In 2012, the WFP's External Auditor reported that 
of a sample of 68 implementing partners, 27 (40 percent) had not 
submitted their monthly distribution reports at all, and as a result 
WFP had to estimate the figures for undistributed food.[Footnote 74] 
The External Auditor recommended that WFP streamline the procedure for 
collecting timely distribution reports from implementing partners and 
enhance the quality of its reconciliation of data on food 
undistributed by the partners. WFP agreed with this recommendation and 
stated that it will seek to ensure that monthly distribution reports 
are submitted promptly and reconciled with WFP data.[Footnote 75] 

WFP Has Taken Steps to Strengthen Monitoring, but Limited Coverage in 
Some Areas Weakens Ability to Identify Problems with Food Distribution: 

WFP has made efforts to increase field monitoring in Somalia and 
reported that field monitoring findings inform its programming in 
Ethiopia, Kenya, and Somalia. Despite these efforts, security 
restrictions and limited resources constrain field monitoring in some 
high-risk areas, limiting WFP's ability to identify problems with food 
distribution. Furthermore, WFP and its External Auditor have 
identified weaknesses with WFP's field monitoring. 

WFP Has Made Efforts to Increase Monitoring in Somalia: 

In the past 2 years, WFP has made efforts to increase its monitoring 
of food distributions in Somalia. WFP monitoring and evaluation 
guidelines state that all WFP operations should be regularly and 
systematically monitored and evaluated. From 2009 to early 2011, the 
UN Monitoring Group on Somalia, WFP's Inspector General, and WFP's 
External Auditor all investigated the allegations of food diversion in 
Somalia and reported control weaknesses.[Footnote 76] According to 
WFP, security restrictions prevented WFP from conducting field 
monitoring of general food distribution in Mogadishu in 2010. As a 
result, all WFP monitoring activities in the city that year consisted 
of "alternative monitoring," which generally involved contacting 
stakeholders, such as implementing partners and beneficiaries, via 
telephone to inquire whether distributions had occurred as planned. 

In late 2010, WFP began contracting with third-party monitors[Footnote 
77] in Somalia to increase its monitoring coverage in areas that are 
inaccessible to WFP staff and monitors because of UNDSS security 
restrictions.[Footnote 78] In August 2012, WFP told us that a total of 
25 third-party monitors were working in three areas in Somalia--10 in 
Mogadishu, 10 in Central Somalia, and 5 in the southern border areas. 
WFP stated that in Mogadishu, third-party monitors conduct most of 
WFP's monitoring because of the security risks in the city. WFP noted 
that 47 percent of its distribution sites in Mogadishu were monitored 
in January 2012, compared with no field monitoring of distribution 
sites in Mogadishu in 2010. In areas that are inaccessible to WFP and 
third-party monitors because of remoteness or security risks, WFP 
staff in Somalia continue to telephone key stakeholders, including 
beneficiaries and implementing partners, to verify that distributions 
took place as planned, according to WFP. However, according to a 2011 
report by WFP's External Auditor, this form of alternative monitoring 
may not always be reliable.[Footnote 79] For example, the External 
Auditor stated that the WFP's Somalia country office certified through 
telephone monitoring that WFP food assistance had been delivered to a 
site in Somalia for 2 months in 2009, but food was not provided to 
beneficiaries at this site during that time period. (See figure 9 in 
appendix III for more information on investigations of the Somalia 
allegations and the challenges WFP faces in that country). 

Since July 2010, WFP Somalia has also maintained a beneficiary 
telephone hotline, which allows beneficiaries of WFP food assistance 
to provide anonymous feedback on WFP's operations, monitors, and 
implementing partners.[Footnote 80] According to WFP, as of August 
2012, the hotline had received a total of only 48 calls, more than 
half of them requests to become beneficiaries or complaints that 
rations were smaller than expected. WFP officials in Somalia 
attributed the low number of calls to the fact that the hotline number 
is not posted at all distribution sites and is not Somalia based, 
causing beneficiaries concern about the cost of calling an 
international number. WFP officials in Somalia said that, because the 
hotline has not been as effective as they envisioned, they plan to 
introduce a Somalia-based number and initiate a more systematic 
approach to informing beneficiaries about the hotline. 

WFP Reports That Field Monitoring Findings Inform Programming in 
Ethiopia, Kenya, and Somalia: 

Field monitoring findings are used to inform WFP programming in 
Ethiopia, Kenya, and Somalia, according to WFP officials. WFP's 
monitoring and evaluation guidelines describe monitoring as a 
continuing function that uses systematic data collection to inform 
management of food aid programs' progress and results. WFP staff in 
Ethiopia, Kenya, and Somalia told us that field monitors' findings are 
captured in a narrative monthly report that is sent to the WFP country 
office and that these findings are used to inform programming. For 
example, WFP staff in Ethiopia told us that they increased refugees' 
wheat rations by 20 percent in response to monitors' findings that the 
additional amount was needed to cover milling costs and milling 
losses. In addition to ensuring that it received the monthly reports 
on field monitors' findings, WFP also set up a countrywide system in 
Somalia to consolidate, track, and report on monitoring findings and 
the follow-up status for WFP operations through a Somalia-specific 
monitoring database and a monthly monitoring and evaluation report. As 
recommended by the External Auditor in 2011,[Footnote 81] this report 
includes analysis of any significant variations between distribution 
monitoring and post-distribution monitoring.[Footnote 82] According to 
WFP, the Somalia country office uses the monitoring findings and 
results captured in the Somalia-specific database and report to 
develop each month's monitoring plan and send field missions to 
further investigate program issues.[Footnote 83] 

Several Challenges Constrain Field Monitoring in High-Risk Areas, 
Limiting WFP's Ability to Identify Problems with Food Distribution: 

Several factors--security restrictions limiting access to some high-
risk areas, limited numbers of monitors to cover all distribution 
sites, and logistical challenges affecting field monitoring--constrain 
WFP's ability to identify problems with food distribution in selected 
areas of Ethiopia, Kenya, and Somalia. 

Security Restrictions: 

UNDSS security restrictions, which limit WFP's access to some high-
risk areas in Ethiopia, Kenya, and Somalia, constrain WFP's monitoring 
of these areas, according to WFP. COSO states that monitoring 
procedures should be prioritized based on risks that could affect an 
organization's ability to achieve its objectives. Because of its 
restricted access to some high-risk distribution sites, WFP is unable 
to prioritize monitoring for these sites despite the risks. 

* Ethiopia. Since May 2011, WFP has reported being unable to conduct 
any field monitoring in six districts in the Somali region in eastern 
Ethiopia because of UNDSS security restrictions.[Footnote 84] In 
addition, according to WFP, it has not provided for third-party 
monitoring in these districts. WFP reported that it provided 193,565 
metric tons of food to almost 2.4 million beneficiaries at 869 
distribution sites and five refugee camps in Somali throughout 2011. 
The Ethiopian government, as WFP's implementing partner, distributes 
all food assistance for WFP's refugee and relief programs in Ethiopia. 
According to WFP's monitoring plan for Ethiopia, WFP aims to monitor 
100 percent of distribution sites in the Somali region; however, it is 
currently not possible for WFP staff to access some sites owing to 
UNDSS restrictions. USAID, WFP, and UNHCR have reported on a lack of 
WFP monitoring coverage in some parts of the Somali Region in 
Ethiopia. For example, a June 2011 USAID monitoring report on two 
Somali refugee camps found that WFP was not conducting proper post-
distribution monitoring.[Footnote 85] Another 2011 USAID document 
stated that food assistance may have been distributed or sold to 
people who were not intended beneficiaries. According to a 2010 joint 
WFP, UNHCR, and Ethiopian government report, some refugee 
beneficiaries claimed that they did not receive the full amount of 
their food rations when WFP was not present to observe food 
distributions carried out by the Ethiopian government in the Somali 
region.[Footnote 86] 

* Kenya. A USAID document from August 2011 notes that WFP does not 
conduct post-distribution monitoring in a limited number of districts 
in northeastern Turkana, Kenya, because of security issues. In 
February 2012, WFP officials in Kenya told us that they rely on their 
implementing partner to monitor WFP programs in Mandera, Kenya, owing 
to security risks in that area. Further, in May 2012, WFP reported 
that because of security risks at the Dadaab Refugee Camp in Kenya, 
WFP's post-distribution monitoring at that site would be limited. 
[Footnote 87] 

* Somalia. According to WFP, security risks have limited its ability 
to monitor distribution sites. For example, WFP reported that it 
achieved monitoring coverage of 58 percent of about 100 distribution 
sites in Mogadishu in February 2012. However, according to WFP, only 3 
percent of these distribution sites were monitored in November and 
December 2011, owing to security risks and delays in securing a 
contract with a third-party monitoring firm.[Footnote 88] WFP reported 
that it provided, through implementing partners, more than 3,500 
metric tons of food to more than 350,000 beneficiaries in November 
2011 and provided more than 5,000 metric tons of food to more than 
400,000 beneficiaries in February 2012 at these distribution sites in 
Mogadishu.[Footnote 89] In addition, WFP reported that only 6 percent 
of the border areas in Somalia were monitored in February 2012, owing 
to security risks in the area. 

Limited Number of Monitors to Cover All Sites: 

WFP reported having a limited number of monitors to cover all 
distribution sites in Ethiopia, Kenya, and Somalia. According to WFP, 
it does not have the resources to monitor all distribution sites every 
month and therefore must determine how best to allocate these 
resources. WFP reports that on a monthly basis, 81 WFP monitors cover 
more than 3,000 distribution sites in Ethiopia; 49 WFP monitors cover 
more than 2,500 distribution sites in Kenya;[Footnote 90] and 64 WFP 
and third-party monitors cover more than 1,200 distribution sites in 
Somalia. In 2012, the UN Monitoring Group on Somalia reported that 
when monitors were not present during some food distributions in 
Mogadishu, local officials or other individuals controlling access to 
food assistance often required beneficiaries to sell the food back to 
them for a fraction of its value.[Footnote 91] According to a USAID 
document, WFP staff in Ethiopia and one of WFP's implementing partners 
in Kenya, some distributions can take 5 days or more in parts of 
Ethiopia and Kenya, which, according to WFP, does not allow WFP 
monitors to be present from start to finish at these distributions. 
During our fieldwork in Ethiopia and Kenya, WFP beneficiaries and 
implementing partners told us that WFP often is not present to conduct 
monitoring.[Footnote 92] At the Shimelba refugee camp in Ethiopia, 
WFP's implementing partner and beneficiaries told us that more WFP 
monitors were needed. Moreover, NGOs operating in Somalia told us that 
WFP does not have a large enough presence in the country. (See tables 
4 and 5 in appendix III for data on monitoring in Ethiopia, Kenya, and 
Somalia). 

Logistical Challenges: 

Logistical challenges make it difficult for monitors to cover many 
distribution sites. For example, one WFP monitor we met with at the 
Shimelba refugee camp in Ethiopia told us that every month he must 
conduct distribution and post-distribution monitoring at 19 
distribution sites and one refugee camp in the Tigray region in 
Ethiopia, a remote area of more than 20,632 square miles--larger than 
the combined areas of Vermont and New Hampshire--with rough terrain. 
In the last 3 months of 2011, WFP reported conducting monitoring at 
the Shimelba refugee camp only in December. In Turkana and Shimelba, 
WFP staff told us that WFP's monitoring coverage is often constrained 
by weather conditions and poor roads, which make traveling to some 
distribution sites difficult and time consuming for monitors who must 
cover many sites. 

WFP and External Auditor Have Found Field Monitoring Weaknesses: 

In recent years, WFP's Office of Evaluation and the External Auditor 
have identified weaknesses in WFP's field monitoring of its programs. 
Seven of 18 evaluations of WFP's country and operation programs, 
including evaluations covering two of our case study countries, 
[Footnote 93] published by WFP's Office of Evaluation from 2010 to 
2012 raised concerns about WFP's field monitoring. Some of these 
concerns included limited competency of monitors, insufficient 
monitoring to verify under-scooping of food rations, and inadequate 
monitoring of food storage to ensure adequate programming. In 
addition, in 2006, WFP's External Auditor reported monitoring 
weaknesses, including an instance when monitors had not reported some 
losses because they believed that WFP required monitors to report only 
food losses representing more than 2 percent of a total delivery. 
[Footnote 94] 

WFP Has Reported Low Rates of Food Assistance Losses for Ethiopia, 
Kenya, and Somalia, but Its Collection of Loss Data Has Potential 
Weaknesses: 

WFP reported low rates of food assistance losses for Ethiopia, Kenya, 
and Somalia in 2007 through 2011. However, reports by the UN 
Monitoring Group and WFP's External Auditor raise questions regarding 
WFP's reporting of losses for Somalia in 2009. More broadly, several 
factors--lack of timely reporting by implementing partners, limited 
access to implementing partners' warehouses and distribution sites in 
some high-risk areas, and limited beneficiary reporting--weaken WFP's 
ability to assure accurate reporting of data on losses of food in 
implementing partners' custody. Despite donor and Executive Board 
concerns, no external evaluation of WFP food loss data has been 
conducted since a 2006 review by WFP's External Auditor. In that 
report, the auditor noted that inadequate reporting of losses presents 
not only risks to the effectiveness of WFP's aid efforts and the 
achievement of its objectives but also reputational risks in terms of 
donor confidence. 

WFP Has Reported Low Loss Rates for Ethiopia, Kenya, and Somalia: 

For 2007 through 2011, WFP reported lower average loss rates for its 
operations in Ethiopia, Kenya, and Somalia than for its operations 
worldwide. WFP reported average loss rates of 0.30 percent for 
Ethiopia, 0.21 percent for Kenya, and 0.25 percent for Somalia, 
compared with an average loss rate of 0.41 percent for $2.5 billion of 
total food handled annually worldwide.[Footnote 95] According to WFP, 
short-delivery--that is, delivery of a smaller quantity of commodities 
than expected--and theft were the top reasons reported for global 
losses, with short-delivery accounting for 27 percent and theft 
accounting for 20 percent of all losses. 

Figure 7 compares WFP's annual reported food assistance loss rates for 
Ethiopia, Kenya, and Somalia with its global average loss rates for 
2007 through 2011. 

Figure 7: WFP's Reported Food Assistance Losses in Ethiopia, Kenya, 
and Somalia and Worldwide, 2007-2011: 

[Refer to PDF for image: vertical bar graph] 

In percentages, by value; loss rate: 

Calendar year: 2007; 
Ethiopia: 0.58; 
Kenya: 0.24; 
Somalia: 0.31; 
Global average: 0.44. 

Calendar year: 2008; 
Ethiopia: 0.17; 
Kenya: 0.14; 
Somalia: 0.2; 
Global average: 0.43. 

Calendar year: 2009; 
Ethiopia: 0.50; 
Kenya: 0.27; 
Somalia: 0.16; 
Global average: 0.37. 

Calendar year: 2010; 
Ethiopia: 0.28; 
Kenya: 0.15; 
Somalia: 0.46; 
Global average: 0.35. 

Calendar year: 2011; 
Ethiopia: 0.19; 
Kenya: 0.22; 
Somalia: 0.27; 
Global average: 0.48. 

Source: GAO analysis of WFP's 2007-2011 annual reports on food 
assistance losses. 

[End of figure] 

External Oversight Reports Raise Questions about WFP's Reported Food 
Assistance Losses for Somalia in 2009: 

Reports by the UN Monitoring Group and WFP's External Auditor raise 
questions regarding WFP's reported food assistance losses in Somalia 
in 2009. As figure 7 shows, WFP reported a loss rate of 0.16 percent 
of the value of WFP food assistance handled in Somalia in 2009--the 
lowest rate that WFP reported for the country from 2007 through 2011. 
This rate reflects losses of 490.1 metric tons, valued at $239,291, 
from 355,760 metric tons of total food assistance, valued at 
$152,237,880. Further, WFP's 2009 annual report on food assistance 
losses shows lower loss rates for Somalia in 2009 than for 45 of the 
74 countries where WFP operated that year.[Footnote 96] In addition, 
in response to allegations in the media,[Footnote 97] a December 2009 
report by the WFP Office of Inspections and Investigations did not 
find evidence of large-scale diversion. Instead, that report estimated 
that up to 10 percent of food distributed each month was sold in local 
markets by beneficiaries and thus was not diverted.[Footnote 98] 
However, a report by the UN Monitoring Group on Somalia in 2010 found 
that large-scale diversion of WFP food assistance had occurred in 
Somalia in 2009.[Footnote 99] For example, the report stated that in 
one instance, as much as approximately $4.4 million in food 
(significantly more than WFP's reported losses of $239,291) may have 
been diverted directly to a local market without first being 
distributed to beneficiaries.[Footnote 100] Moreover, the WFP External 
Auditor's 2011 report on WFP operations in Somalia raised doubts 
regarding the Office of Inspections and Investigations report's 
methodology. The External Auditor concluded that food sold at local 
markets "may be higher than the 10 percent worked out by the Office of 
Inspections and Investigations" and that its own findings "do not 
support the [Office of Inspections and Investigations'] emphatic 
conclusion that food sold by the beneficiaries was the only source of 
food aid found in the markets."[Footnote 101] 

In addition, the reports by WFP's Office of Inspections and 
Investigations and External Auditor suggest that WFP's limited 
monitoring of some food distribution sites makes it difficult for the 
organization to ensure accurate reporting of food assistance losses. 
Despite its conclusion that no large-scale diversion of food 
assistance occurred in Somalia in 2009, the report by WFP's Office of 
Inspections and Investigations states that in some areas of Somalia, 
WFP is not in a position to directly confirm the number of 
beneficiaries in the various camps or to verify that food sent for the 
beneficiaries has reached them. Further, the WFP External Auditor's 
report states that WFP has increasingly relied on alternative 
approaches to monitoring in Somalia, which the report characterizes as 
"subject to inherent bias." 

Several Factors Weaken WFP's Ability to Assure Accurate Reporting on 
Losses of Food in Implementing Partners' Custody: 

Although WFP takes steps to collect accurate loss data, several 
factors--limited access to implementing partners' warehouses and 
distribution sites in some high-risk areas, lack of timely reporting 
by implementing partners, and limited beneficiary reporting--weaken 
WFP's ability to verify implementing partners' reporting on food in 
their custody. According to WFP's internal control framework, WFP 
management and personnel must have access to relevant, reliable, and 
accurate information that promotes effective decision-making in line 
with their responsibilities. WFP's controls over food in its custody 
are designed to help ensure accurate loss data; for example, WFP 
transporters and receiving warehouse managers must both verify and 
sign for food received at WFP warehouses. WFP also includes analysis 
of losses above predetermined thresholds in its annual report on food 
assistance losses.[Footnote 102] Because COMPAS does not track food in 
implementing partners' custody, WFP relies in part on data in 
implementing partners' monthly and quarterly distribution reports to 
calculate losses of food in their custody. 

* Limited WFP access. WFP's lack of access to implementing partners' 
warehouses and distribution sites in some high-risk areas, such as in 
Somalia, limits its ability to verify implementing partners' 
reporting. For example, WFP reported that only 3 percent of 
distribution sites in Mogadishu, Somalia, were monitored in the last 2 
months of 2011, owing in part to security restrictions and delays in 
recruiting a third-party monitoring firm. WFP also reported that it 
could not conduct any on-site field monitoring in Mogadishu in 2010 
because of security risks. Further, although WFP encourages 
unannounced monitoring visits, this approach is not always feasible in 
Somalia, according to WFP.[Footnote 103] 

* Lack of timely reporting by implementing partners. The failure of 
some implementing partners to submit the required monthly food 
distribution reports limits WFP's ability to accurately report losses 
of food in the partners' custody. In 2006, WFP's External Auditor, 
commenting on problems with the timeliness of implementing partners' 
food distribution reports, recommended that WFP include in its annual 
food assistance loss report the value and amount of commodities in the 
custody of the implementing partner whose reports WFP had not yet 
received.[Footnote 104] WFP complied with this recommendation in its 
2006 report on losses during 2005[Footnote 105] but has not done so in 
subsequent reports. The External Auditor also recommended that WFP 
review, with a view to adopting a single global system, the country 
office systems being used to monitor implementing partner reporting. 
WFP stated in 2006 that it will explore the most appropriate means of 
monitoring implementing partner reporting and adopt a single global 
system by 2007; however, in January 2012, WFP reported that it was 
continuing to review country office systems and was still in the 
process of adopting a single global system. In addition, in its 2012 
annual report, the External Auditor noted that getting timely 
distribution reports from implementing partners has historically been, 
and remains, a challenge.[Footnote 106] The External Auditor 
recommended that WFP streamline the procedure for collecting timely 
distribution reports from the implementing partners and enhance the 
quality of its reconciliation of data on undistributed food in the 
partners' custody. 

* Limited beneficiary reporting. WFP's beneficiary hotline is intended 
to allow beneficiaries of WFP food assistance to report losses or 
short rations anonymously; however, among our case study countries, 
this hotline is available only in Somalia. Additionally, the hotline 
may not be easily accessible to all beneficiaries, because, according 
to WFP officials, the hotline number is not posted at all distribution 
sites and is not Somalia-based. WFP Somalia also told us that because 
the hotline has not been as effective as they envisioned, they plan to 
introduce a Somalia-based number and initiate a more systematic 
approach to informing beneficiaries about the hotline. 

WFP Reported Piloting Systematic Method for Collecting Data on Losses 
Incurred during Distribution to Beneficiaries: 

WFP has piloted a method using statistical sampling to collect data on 
losses incurred during distribution to beneficiaries, but WFP has not 
systematically applied this method to other country offices. According 
to the 2008 WFP document describing the pilot, "existing WFP loss 
monitoring systems are insufficient to capture losses during the final 
distribution phase to beneficiaries."[Footnote 107] The document 
indicates that although WFP tracks and quantifies food losses prior to 
distribution, it can only estimate, based on beneficiary receipts, 
losses during distribution. According to the WFP document, between 
2007 and 2008 WFP piloted a random sampling methodology for food 
assistance losses in Zambia and Malawi. This methodology involved 
selecting distribution sites randomly, with larger sites more likely 
to be chosen; weighing and counting individual rations distributed at 
these sites; checking beneficiaries against a list; and checking food 
commodities at distribution sites against WFP records. This 
methodology identified differences between reported and actual numbers 
of beneficiaries; ration sizes; and amounts of food departing from, 
and returned to, the food stock. According to the 2008 WFP document 
describing the pilot, this approach estimated the correct magnitude of 
losses and can considerably increase the losses reported by WFP. 
However, according to WFP, it has not systematically applied this 
methodology to other country offices that met criteria outlined in the 
2008 document.[Footnote 108] 

WFP Annual Reports on Food Assistance Losses Do Not Update Prior Year 
Losses with More Recent Information: 

In its annual reports on food assistance losses, WFP does not update 
prior years' reported losses with the most recent information. WFP's 
annual food assistance loss reports list losses that are being 
verified and state that these losses will be followed up in future 
reports. However, after confirming the losses under verification, WFP 
does not update its loss totals in subsequent reports. For example, in 
its 2007 report on food assistance losses, WFP stated that it was 
verifying 11,000 metric tons of food assistance losses, and its 2008 
report confirmed some of those losses. However, WFP's food assistance 
loss reports for 2010 and 2011 did not update the loss total for 2007. 

WFP Has Not Engaged an External Party to Evaluate Food Loss Data in 
Recent Years: 

Despite concerns expressed by WFP donors, Executive Board members, and 
the External Auditors, WFP has not engaged an external party to 
conduct an evaluation of WFP's loss reporting since the External 
Auditor conducted its evaluation in 2006. According to WFP's internal 
control framework, independent oversight bodies may undertake periodic 
reviews of the effectiveness of its internal control procedures. In 
addition, COSO's guidance on monitoring internal control systems 
states that ongoing and separate evaluations enable management to 
determine whether certain components (including information and 
communication) of internal control systems continue to function over 
time. During our fieldwork in Rome, some donors expressed doubts 
regarding WFP's reported food assistance losses. Additionally, in 
2005, WFP Executive Board members noted a possible contradiction 
between the low level of losses reported and the realities inherent in 
any food management system. According to the board members, even for 
the most organized and efficient commercial operations in developed 
countries, actual food losses exceed the levels reported by WFP. 

The 2006 External Auditor's report states that for effective 
management and minimization of losses, WFP should properly identify, 
investigate, and bring losses to the board's attention and that 
inadequate reporting of losses presents not only risks to the 
effectiveness of WFP's aid efforts and the achievement of its 
objectives, but also reputational risks in terms of donor 
confidence.[Footnote 109] However, according to WFP, since the 
External Auditor published its 2006 report, no external entity has 
evaluated WFP's food assistance losses. As an example of a detailed 
evaluation of food assistance losses, in 2004, the International Food 
Policy Research Institute estimated that the highest food assistance 
loss rates by humanitarian organizations in Bangladesh occurred during 
the distribution to the beneficiaries and represented up to 8 percent 
of the total handled for the last quarter of 2002, with most of these 
losses resulting from short rationing during distribution to 
beneficiaries.[Footnote 110] In contrast, WFP reported food assistance 
losses of 0.02 percent--$9,700 in losses of $39.3 million handled--in 
Bangladesh for all of 2002. 

Conclusions: 

WFP's commitment to operate in some of the most challenging and 
dangerous areas of the world presents inherent risks to its ability to 
assure the delivery of food assistance to intended beneficiaries. 
Given this context, a strong system of internal control is needed to 
identify the principal risks to the achievement of WFP's objectives, 
to evaluate the nature and extent of those risks, and to manage them 
effectively. The design of WFP's internal controls related to 
delivering and monitoring food assistance generally reflects COSO 
principles for internal control, but weaknesses in some of these 
controls affect WFP's ability to manage the risks inherent to WFP 
operations. For example, to the extent that it has not fully utilized 
the WFP Audit Committee, the Executive Board lacks the committee's 
assistance in overseeing internal controls and risk management 
throughout the organization. In addition, staff lack instructions on 
operationalizing elements of risk management in areas most vulnerable 
to fraud, waste, and abuse. Further, without a written policy stating 
that monitoring should be based on risk, as recommended by WFP's 
External Auditor, WFP country offices may not focus their limited 
staff resources to ensure regular monitoring of all high-risk 
distribution sites, increasing the possibility of the diversion of 
food from intended beneficiaries. 

In the areas of Ethiopia, Kenya, and Somalia that we selected for our 
review, WFP has implemented procedures for tracking food delivery and 
has made efforts to improve monitoring of food distribution in 
Somalia. However, weaknesses in its tracking of food assistance in 
implementing partners' custody, as well as UN security restrictions on 
WFP monitoring staff's access to high-risk areas such as Mogadishu, 
Somalia, limit its ability to verify that implementing partners 
distribute food assistance to intended beneficiaries and to accurately 
report any food assistance losses. Without reliable data on food 
assistance distributions and losses, WFP has limited ability to 
provide accurate reporting on its operations and to avoid reputational 
risks that could affect its credibility with its stakeholders and 
donors and compromise its humanitarian mission of providing food 
assistance to those who depend on it. 

Recommendations for Executive Action: 

To strengthen WFP's ability to manage the risks inherent to operating 
in high-risk areas such as Somalia, we are making the following five 
recommendations. 

We recommend that the Secretary of State work with WFP's Executive 
Board to: 

* develop a plan for more fully utilizing the WFP Audit Committee to 
assist the board in monitoring the effectiveness of WFP's risk 
management and internal control processes. 

We also recommend that the Secretary of State work through WFP's 
Executive Board to ensure that WFP management: 

* provides comprehensive risk management guidance addressing key 
elements of the risk management process, such as identifying, 
assessing, and responding to risks; 

* revises WFP's monitoring guidance to specify that field monitoring 
activities should be risk based; 

* provides organization-wide guidance for addressing monitoring 
deficiencies in areas inaccessible to WFP monitors because of security 
restrictions; and: 

* requires periodic external evaluations to assess and improve the 
reliability of data on food assistance losses. 

Agency Comments and Our Evaluation: 

We requested and received comments on a draft of this report from WFP 
and the Secretary of State. Both WFP and State--responding for itself, 
USAID, and the Department of Agriculture--provided written comments, 
which are reproduced in appendixes IV and V, respectively. In 
addition, State, WFP, USAID, and the U.S. Mission to the UN Agencies 
in Rome provided technical comments, which we incorporated in the 
report as appropriate. 

In their written comments, both WFP and State agreed with our 
recommendations. WFP noted that strengthening its overall internal 
control framework and enterprise risk management will remain a 
priority. WFP also noted that it is currently addressing a number of 
the points raised in our report, as part of the overall organization-
strengthening effort it launched in April. According to WFP, this 
effort includes a set of improvements to organization-wide monitoring 
and reporting, with an emphasis on putting in place a system that is 
succinct, resourced, and implementable at field level. WFP further 
noted that it will continue to consult with its member states, through 
its Executive Board, as it pursues further actions to ensure that its 
food assistance reaches intended beneficiaries in both high-risk and 
non-high-risk environments. In its written comments, State said that 
it will endeavor, through appropriate mechanisms--including the WFP 
Executive Board, bilaterally with WFP, and with partners--to implement 
all of our recommendations. State noted that USAID and USDA also agree 
with all of our recommendations and are prepared to support State as 
needed. 

We are sending copies of this report to appropriate congressional 
offices, the Secretary of State and the Administrator of USAID, and 
relevant agency heads. The report is also available at no charge on 
the GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-9601 or melitot@gao.gov. Contact points for 
our Office of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix VI. 

Signed by: 

Thomas Melito: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to examine the extent to which (1) the design of 
the World Food Program's (WFP) internal controls related to the 
delivery and monitoring of food assistance reflects the Committee of 
Sponsoring Organization of the Treadway Commission's (COSO) principles 
and (2) WFP has implemented as designed certain controls related to 
the delivery and monitoring of food assistance in selected high-risk 
areas. We focused our review primarily on WFP's food assistance 
management from delivery at port-of-entry to distribution to intended 
recipients, because of WFP's vulnerability to risks such as the 
alleged food diversion in Somalia during these stages of food 
assistance management. We did not review other processes, such as 
procurement, finance, and budget. 

Objective 1: Examine the Extent to Which the Design of WFP's Internal 
Controls Related to Delivery and Monitoring of Food Assistance 
Reflects COSO Principles: 

To address our first objective, we reviewed COSO's Internal Control--
Integrated Framework; Enterprise Risk Management--Integrated 
Framework; Internal Control--Integrated Framework: Evaluation Tools; 
Enterprise Risk Management--Integrated Framework: Application 
Techniques; and Guidance on Monitoring Internal Control Systems. 
[Footnote 111] We also reviewed other related international principles 
and guidelines, including the International Organization for 
Standardization's (ISO) ISO 31000--Risk Management Principles and 
Guidelines[Footnote 112] and the UN Joint Inspection Unit's (JIU) 
"Review of Enterprise Risk Management in the UN System--Benchmarking 
Framework."[Footnote 113] In addition, we reviewed WFP's internal 
control framework, relevant WFP policies and procedures, relevant 
documents, and data related to internal controls. 

In choosing COSO criteria, or "points of focus," for our analysis, we 
followed guidance in COSO's Internal Control--Integrated Framework: 
Evaluation Tools, which suggests that evaluators tailor points of 
focus for each component of the framework to fit the entity's facts 
and circumstances.[Footnote 114] We selected points of focus that are 
relevant to our scope. Further, we took into consideration any points 
of focus in WFP's internal control framework that are not included in 
COSO's framework. Where possible or appropriate, we identified 
documents, such as policy manuals, guidance, and circulars, that WFP 
has developed to address particular points of focus. Our analysis was 
not intended to conclude whether WFP's internal control system overall 
is effective. 

For each of WFP's internal control components, we examined information 
in the following documents, comparing it with criteria or points of 
focus in COSO's Internal Control--Integrated Framework and Internal 
Control--Integrated Framework: Evaluation Tools to determine whether 
the design of WFP internal controls related to the delivery and 
monitoring of food assistance reflects COSO principles. 

* Control environment. We reviewed a number of WFP documents 
including, but not limited to, sections of WFP's Financial Resource 
Management Manual;[Footnote 115] internal control framework;[Footnote 
116] strategic plan for 2008 through 2013;[Footnote 117] annual 
reports for 2010 and 2011;[Footnote 118] General Regulations, General 
Rules, Financial Regulations, Rules of Procedures of the Executive 
Board;[Footnote 119] Accountability Guide for Managers;[Footnote 120] 
Manager's Guide to Internal Control;[Footnote 121] Internal Control 
Self-Assessment Checklists;[Footnote 122] and Oversight Framework and 
Reports Disclosure Policy.[Footnote 123] To identify any findings 
related to the WFP control environment, we also reviewed WFP's annual 
audited accounts for 2008 through 2011,[Footnote 124] the WFP Audit 
Committee's annual reports for 2011 and 2012,[Footnote 125] the WFP 
Office of the Inspector General's annual reports for 2011 and 2012, 
[Footnote 126] and the Food and Agriculture Organization of the United 
Nations (FAO) Finance Committee's 2012 report.[Footnote 127] To 
identify points of integrity and ethical values, we reviewed the Code 
of Ethics for United Nations (UN) Personnel, WFP's Anti-Fraud and Anti-
Corruption Policy,[Footnote 128] and the UN Joint Inspection Unit's 
(JIU) Ethics in the United Nations System.[Footnote 129] To review for 
best practices in examining the WFP Statement of Internal Control, we 
reviewed the World Bank's annual report for 2011[Footnote 130] and the 
Inter-American Development Bank's annual report for 2011.[Footnote 
131] We also reviewed our 2007 report on UN oversight and 
accountability for historical information regarding the WFP Executive 
Board and Audit Committee.[Footnote 132] In September 2011, we 
interviewed nine members of WFP's 36-member Executive Board--
representatives of Cameroon, Canada, Guatemala, France, Germany, 
Netherlands, Sweden, United Kingdom, and the United States to the UN 
Food Agencies in Rome. We did not select the Executive Board members 
with whom we spoke; we requested a meeting with all available board 
members and met with those members who agreed to meet with us. In 
addition, we interviewed a director of the Comptroller and Auditor 
General of India--WFP's External Auditor--as well as the current 
Chairman of the WFP Audit Committee. 

* Risk management. We reviewed a number of WFP documents, including, 
but not limited to, WFP's Enterprise Risk Management Policy; Financial 
Resource Management Manual, which includes WFP's risk management 
framework; Risk Management Guide;[Footnote 133] internal control 
framework;[Footnote 134] WFP Strategic Plan, 2008-2013; annual 
performance reports for 2010 and 2011; Accountability Guide for 
Managers;[Footnote 135] Manager's Guide to Internal Control;[Footnote 
136] and Executive Board approval documents for protracted relief and 
recovery operations and emergency operations. We also reviewed WFP's 
annual audited accounts for 2008 through 2011, the WFP Audit 
Committee's annual reports for 2011 and 2012, and the Office of the 
Inspector General's annual report for 2011 and 2012 to identify any 
findings related to the WFP risk management. In addition, we reviewed 
ISO's ISO 31000--Risk Management Principles and Guidelines; JIU's 
Review of Enterprise Risk Management in the United Nations System--
Benchmarking Framework; and a Humanitarian Policy Group-commissioned 
paper, "Risk in Humanitarian Action: Towards a Common Approach?" 
[Footnote 137] In addition, we interviewed WFP personnel regarding the 
risk management process. Further, we reviewed emergency and protracted 
relief and recovery operations documents for Ethiopia, Kenya, and 
Somalia to determine how risk management was covered. 

* Control activities. We reviewed WFP's Transport Manual, Warehouse 
Management Handbook, and Program Guidance Manual for guidance that WFP 
has designed related to controls over handling of food assistance at 
the port-of-entry, during transportation, in WFP warehouses, during 
WFP distributions to beneficiaries, and in the custody of implementing 
partners. We also reviewed the WFP' External Auditor's report related 
to controls observed for WFP's COMPAS system. 

* Information and communication. We reviewed WFP documents related to 
emergency operations and protracted relief and recovery operations for 
2008 through 2015 for our case study countries--Ethiopia, Kenya, and 
Somalia. We also reviewed the corresponding standard project reports 
that inform stakeholders about the use of resources for a given 
project and the results that WFP obtained during the reporting year. 
In addition, we reviewed WFP updates on the Horn of Africa and 
separate monthly updates on WFP operations in Somalia, which it 
distributes to its member states and partner organizations, including 
those within the UN system. Further, we reviewed WFP documents showing 
WFP's risk management escalation process and procedures for managing 
potential diversion or wrong-doing of cooperating partners or 
transporters, which guides staff on what steps to take and whom to 
inform about a suspected case of diversion or wrongdoing. Last, we 
reviewed WFP's Transport Manual for guidance on developing food 
assistance loss reports, which quantify WFP losses during internal 
transport arranged by country offices or regional bureaus and during 
storage, arranged and paid for by WFP. We also interviewed some 
members of WFP's Executive Board. 

* Monitoring. We reviewed and analyzed WFP manuals and guidance 
related to field monitoring of WFP food assistance, including WFP's 
Monitoring and Evaluation Guidelines and Program Guidance Manual. We 
focused on guidance related to distribution monitoring and post-
distribution monitoring, not on performance monitoring or evaluations. 
We compared WFP's guidance and manuals with monitoring criteria in 
COSO's Internal Control--Integrated Framework; Internal Control--
Integrated Framework: Evaluation Tools; and Guidance on Monitoring 
Internal Control Systems. We also interviewed WFP staff in Rome, 
Ethiopia, Kenya, and Somalia to discuss how they develop their 
monitoring plans and goals. We reviewed internal and external 
oversight reports as well as WFP documents and reports related to the 
design of field monitoring. 

Objective 2: Examine the Extent to Which WFP Has Implemented as 
Designed Certain Controls Related to Delivery and Monitoring of Food 
Assistance in Selected High-Risk Areas: 

To address our second objective, we reviewed WFP procedures to verify 
the implementation of WFP policies and guidelines at the 
organizational level and at the country level for our three case study 
countries--Ethiopia, Kenya, and Somalia. We selected these countries 
on the basis of a range of criteria, including the amount of U.S. 
contributions, the total amount of food assistance received, high-risk 
and non-high-risk environments, and logistics and budget constraints. 
Because WFP operates in more than 70 countries and implements many 
different activities in each country, our case studies are not 
intended for generalization to all WFP countries and operations. We 
focused our review on emergency operations and protracted relief and 
recovery operations, which represent about 80 percent of WFP's 
operations, and on general food distribution activities within these 
programs. We focused primarily on general food distribution activities 
because it is generally the largest program under our case study 
countries' operations. 

For each country, we reviewed numerous documents that reflect some of 
the controls that WFP has implemented in selected areas. We also 
reviewed numerous documents for the three countries that show, for 
each country, the movement of a selected food commodity shipment from 
port-of-entry to distribution sites during the period January to June 
2011. We selected these shipments after discussion with WFP. 

We conducted fieldwork in Ethiopia and Kenya, selecting sites in each 
country after discussion with WFP; based on the shipment data we 
reviewed; and according to available time, logistical constraints, and 
security concerns. We also selected the sites to reflect a range of UN 
Department of Safety and Security (UNDSS) security levels, in order to 
examine any similarities or differences in WFP's operations at the 
various security levels. We did not conduct fieldwork in Somalia, 
owing to logistical constraints and security concerns. 

For the purposes of this report, we use the term "selected areas" to 
include the sites we visited in our case study countries, the areas 
covered in the documents we reviewed, the areas covered in interviews 
we conducted in our selected countries, and other reviews related to 
internal controls in our case study countries that we determined were 
appropriate for our researchable objectives. The areas we selected for 
review, like the countries we visited, are not generalizable to all 
areas in the selected countries or to the broader universe of WFP 
programs and operations. 

* Control activities. To assess WFP's implementation of its policies 
and guidelines related to control activities, we reviewed supporting 
documents showing the movement of the selected shipments in each case-
study country: 13,970 metric tons of wheat for Ethiopia; 2,880 metric 
tons of vegetable oil for Kenya; and 45 metric tons of split peas for 
Somalia. According to the supporting documents, all of the noted 
shipments were delivered to the respective countries between January 
and June 2011. In the field, we interviewed WFP East and Central 
Africa Regional Bureau staff, country staff, implementing partners, 
and transporters in Ethiopia and Kenya.[Footnote 138] In addition, we 
visited WFP warehouses and an implementing partner warehouse in each 
country, and we visited one food distribution site in Ethiopia and two 
in Kenya, where we interviewed the beneficiaries. We also observed an 
implementing partner's use of controls during a food distribution at 
one of the sites in Kenya. We interviewed staff from the U.S. Agency 
for International Development (USAID) and Department of State (State) 
in Ethiopia and Kenya, as well as staff from the UN High Commissioner 
for Refugees (UNHCR) and the UN Office for the Coordination of 
Humanitarian Affairs in Ethiopia, to obtain their insights on WFP 
operations in the country. We also reviewed the following WFP 
documents: Protracted Relief and Recovery Operation--Ethiopia 200365, 
[Footnote 139] Summary Report of the Joint UNHCR/WFP Impact Evaluation 
on the Contribution of Food Assistance to Durable Solutions in 
Protracted Refugee Situations--Ethiopia;[Footnote 140] a February 2012 
biweekly report on Ethiopia;[Footnote 141] WFP Management Response to 
the Report of the External Auditor on WFP Operations in Somalia; 
[Footnote 142] standard operating procedures for Somalia, dated April 
2010; Summary Evaluation Report--Kenya Country Portfolio;[Footnote 
143] Audited Annual Accounts, 2011;[Footnote 144] and Report on the 
Implementation of the External Auditor Recommendations.[Footnote 145] 

* Monitoring. To assess WFP's implementation of, and challenges 
related to, distribution and post-distribution monitoring in Ethiopia, 
Kenya, and Somalia and the extent to which monitoring helps assure the 
delivery of food assistance to intended beneficiaries in selected high-
risk environments, we reviewed numerous WFP program and monitoring 
documents related to WFP operations in Ethiopia, Kenya, and Somalia. 
Some of these documents included WFP's country monitoring plans, 
monitoring reports, and written responses to our questions. We also 
reviewed internal and external oversight and program reports for 
information on implementing field monitoring and related challenges. 
We also reviewed WFP's evaluations published from 2010 through 2012 
for findings related to field monitoring. Further, we conducted 
interviews in Ethiopia and Kenya with WFP staff and monitors, 
implementing partners, USAID, UNHCR, the UN Office for the 
Coordination of Humanitarian Affairs, and WFP beneficiaries. We were 
not able to assess the data on monitoring that WFP staff provided to 
us, because we did not have full access to information about the 
data's sources. Therefore, we present a few examples of WFP-reported 
monitoring data in our report that we attribute to WFP and, for 
additional context, two tables of WFP's reported data in appendix III. 

* Food assistance losses. To assess the reliability of WFP's data on 
losses of food assistance after arrival at ports-of-entry, we reviewed 
WFP's policies and procedures and other documents on food assistance 
losses; a 2004 International Food Policy Research Institute report on 
food assistance losses;[Footnote 146] The WFP External Auditor's 2006 
report on food assistance losses;[Footnote 147] WFP's Office of 
Investigations and Inspections' December 2009 report on Somalia; 
[Footnote 148] the UN Monitoring Group on Somalia's March 2010 and 
July 2012 reports;[Footnote 149] and the WFP External Auditor's 
January 2011 report on Somalia and 2012 annual report.[Footnote 150] 
We compared our case study countries' loss rates with the global loss 
rate and compared Somalia's loss rate in 2009 with other accounts of 
losses in Somalia for 2009. To calculate WFP's global food assistance 
loss rates, the food assistance loss rates for Kenya, Ethiopia, and 
Somalia, and the top reasons reported for losses for 2007 through 
2011, we analyzed data compiled from WFP's annual reports on food 
assistance losses for 2007 through 2011.[Footnote 151] We also 
assessed these food assistance loss reports for consistency across 
years. We examined WFP's data collection process via WFP's policies 
and procedures, such as WFP's Transport Manual[Footnote 152] and 
COMPAS user guide,[Footnote 153] and other WFP documents, such as 
WFP's 2008 information note on the development and qualification of 
sampling methodology and statistical analysis for measuring food 
assistance losses.[Footnote 154] We interviewed cognizant WFP 
officials in Washington, D.C.; Rome, Italy; Kenya; Ethiopia; and 
Somalia regarding COMPAS data. We also interviewed representatives of 
the International Food Policy Research Institute regarding its report 
on food assistance losses.[Footnote 155] As a result of our 
assessment, we determined, for reasons that we discuss in our report, 
that WFP's data on food assistance losses were not sufficiently 
reliable for the purpose of accurately reporting losses for all 
countries. 

For both objectives, we met with WFP officials in Rome, Italy, and in 
Washington, D.C. In addition, we conducted site visits in Ethiopia and 
Kenya and met with WFP country officials for Ethiopia, Kenya, and 
Somalia and officials from WFP's East and Central Africa Regional 
Bureau in Nairobi. During our site visits, we also met with 
representatives of UNHCR and the UN Office for the Coordination of 
Humanitarian Affairs, WFP's partners in some food assistance 
activities. In addition, in Rome, we met with the U.S. Mission to the 
UN Agencies in Rome; FAO; some of WFP's donor and recipient country 
representatives who are members of WFP's Executive Board; a member of 
WFP's Audit Committee; and a senior official of the Comptroller and 
Auditor General of India, which is WFP's External Auditor. We also met 
with officials from State, USAID, and the U.S. Department of 
Agriculture in Washington, D.C., and during site visits. 

We conducted our work from July 2011 to September 2012 in accordance 
with generally accepted government auditing standards. Those standards 
require that we plan and perform our work to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
and conclusions based on our objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our objectives. 

[End of section] 

Appendix II: World Food Program Governance, Oversight, and Management 
Structure: 

WFP's General Regulations establish the governance and oversight 
structure for WFP with clear distinctions among (1) governing bodies 
that involve member states,[Footnote 156] including WFP's Executive 
Board; (2) independent external oversight bodies; and (3) independent 
internal oversight bodies. WFP's management is headed by an Executive 
Director and includes functional offices, regional bureaus, and 
country offices. 

WFP Governance and Oversight Bodies: 

Several external and internal WFP governance and oversight bodies are 
responsible for providing oversight and helping to manage WFP risks. 

* UN governing bodies. Several UN entities, comprising representatives 
of the UN's 193 member states, provide governance to WFP. These 
entities include the UN General Assembly, the FAO Conference, the UN 
Economic and Social Council, the FAO Council, the UN Advisory 
Committee on Administrative and Budgetary Questions, and the FAO 
Finance Committee. 

* WFP's Executive Board is a governing body that includes 36 of the 
UN's 193 member states. According to WFP regulations, the board is 
responsible for providing intergovernmental support and specific 
policy direction to, and supervision of, WFP's activities in 
accordance with the overall policy guidance of the General Assembly of 
the UN, the FAO Conference, the Economic and Social Council, and the 
Council of FAO. The board is also responsible for intergovernmental 
supervision and direction of WFP's management. In addition, the 
Executive Board exercises an oversight function over WFP's Office of 
Evaluation by providing strategic guidance, reviewing and approving 
the work plan and budget, and reviewing the independence of the 
evaluation function. 

* WFP's Office of Evaluation and Oversight Office provide independent 
internal oversight. Both offices are independent from WFP's 
management, and they conduct audits, investigations, and inspections 
on the systems, processes, operations, and activities WFP undertakes. 
The Director of the Office of Evaluation is responsible for 
implementing the evaluation policy, in particular for making 
institutional arrangements for independent evaluations and ensuring 
adherence to the evaluators' code of conduct. The Director of the 
Office of Evaluation is also accountable for ensuring the quality, 
credibility, and utility of evaluations. The Director of the Oversight 
Office, with the combined roles of inspector general and chief audit 
executive, has the responsibility for ensuring the integrity, 
efficiency, and effectiveness of WFP's management, administration, and 
operations. The Director of the Office of Oversight is also 
responsible for preparing an annual report on the office's activities, 
including a summary of significant oversight findings and the 
implementation status of recommendations, and for submitting this 
report to the Executive Director and the Executive Board. 

* Independent external oversight bodies include the WFP External 
Auditor, the WFP Audit Committee, and JIU. 

- The WFP External Auditor is appointed by, and reports to, the 
Executive Board. According to WFP regulations, the External Auditor is 
responsible for auditing WFP's accounts, including all trust funds and 
special accounts, as deemed necessary to ensure that internal 
controls, including the internal audit, are adequate in light of the 
extent to which they are relied upon. The board may request the 
External Auditor to perform specific examinations and issue separate 
reports thereon. 

- The WFP Audit Committee serves in an expert advisory capacity to 
assist the Executive Board and the Executive Director in exercising 
their governance responsibilities for the financial reporting, 
internal control arrangements, risk management processes, and other 
audit-related matters. The board approves the Audit Committee's terms 
of reference. The committee's mandate includes reviewing and advising 
on policies significantly affecting accounting and financial reporting 
issues and the effectiveness of WFP's internal controls, internal 
audit function, and operational procedures; providing a forum to 
discuss internal control and risk management issues, operational 
procedures, and matters raised by internal and external audits; and 
providing comments on the work plans of the internal and external 
audit functions. 

- JIU is an independent external oversight body of the UN system, 
mandated to conduct evaluations, inspections, and investigations 
system-wide. Its reports are submitted to the UN General Assembly and 
the governing bodies of participating specialized agencies, funds, and 
programs of the UN. The WFP Executive Board reviews JIU's 
recommendations on a regular basis and also reviews reports by the WFP 
secretariat on the implementation of these recommendations. 

- The FAO Finance Committee assists the FAO Council in exercising 
control over the financial administration of WFP. The committee's 
functions include reviewing reports submitted by the WFP Secretariat 
and providing advice to the Executive Board. 

WFP Management Structure: 

WFP's management is headed by an Executive Director who is responsible 
and accountable to the board for the administration of WFP and the 
implementation of WFP programs, projects, and other activities. The 
Executive Director is also responsible for establishing effective 
internal controls in management and an effective system of independent 
internal oversight through the Office of Evaluation and the Oversight 
Office. 

WFP has a three-tier organizational structure, including headquarters 
in Rome, Italy; seven regional bureaus; and 77 country offices. WFP's 
headquarters is in charge of governance, strategic planning, policy 
making, and macro-level monitoring. The regional bureaus provide 
technical assistance to the country offices and perform oversight over 
the country offices on adherence to corporate guidelines, practices, 
and procedures. Figure 8 reflects WFP's management structure. 

Figure 8: WFP Management Structure: 

[Refer to PDF for image: organizational chart] 

Top level: 
Executive Director: 
* Office of Hunger Solutions; 
* Office of the Executive Director. 

Second level, reporting to Executive Director: 
* Communications, Public Policy and Private Partnerships; 
* Policy, Planning and Strategy; 
* Human Resources; 
* Legal Office; 
* Office of the Ombudsman; 
* Ethics Office; 
* Inspector General and Oversight; 
* Office of Evaluation; 
* Resource Management and Accountability Department; 
* Operations Department; 
* External Relations Department. 

Third level, reporting to Resource Management and Accountability 
Department: 
* Budget and Programming; 
* Finance and Treasury; 
* Performance and Accountability Management. 

Third level, reporting to Operations Department: 
* Director of Emergencies; 
* Director of Operations. 

Third level, reporting to External Relations Department: 
* Multilateral and NGO Relations; 
* Government Donor Relations; 
* Executive Board Secretariat. 

Fourth level, reporting to Operations Department: 
* Program; 
* Logistics; 
* Procurement; 
* IT and Management
* Dubai Support Office            
* Regional Bureau: 
- Bangkok; 
- Cairo; 
- Dakar; 
- Johannesburg; 
- Khartoum; 
- Nairobi; 
- Panama City. 
- Country offices. 

Source: GAO analysis of UN data. 

[End of figure] 

[End of section] 

Appendix III: Information on Case Study Countries--Ethiopia, Kenya, 
and Somalia: 

In examining whether the World Food Program (WFP) has implemented as 
designed certain controls related to delivering and monitoring food 
assistance in selected high-risk environments--our second objective--
we focused our review on three countries: Ethiopia, Kenya, and 
Somalia. (App. I provides a description of our methodology for 
choosing these three as our case study countries.) The following 
provides background information on each country, including the UN 
Development Program's (UNDP) Human Development index ranking, UNDSS 
security levels, statistics on food insecurity and malnutrition, 
percentage of the population requiring emergency food assistance, and 
WFP's direct expenses.[Footnote 157] In addition, we present a 
timeline of security and humanitarian events in Somalia as well as 
investigations into allegations of control weaknesses in WFP 
operations in Somalia, including food diversion. Further, we include 
beneficiary and monitoring data for the three countries, including the 
areas where we conducted site visits, including number of monitors, 
number of distribution sites, and security levels. 

Ethiopia: 

State estimates that Ethiopia has a total population of about 84 
million. Ethiopia is one of the world's poorest countries, ranking 174 
out of 187 countries on the 2011 UNDP Human Development Index, with 23 
million people living below the national poverty line. UNDSS has 
assessed security threats in the regions of Ethiopia at levels ranging 
from 1 (minimal) to 4 (substantial). 

WFP reports that malnutrition and food insecurity are significant 
problems in Ethiopia and that undernutrition contributes to 57 percent 
of deaths of children younger than 5 years. WFP also reported that 
from the end of 2010 to the end of 2011, the food security situation 
deteriorated in Ethiopia, with 4.5 million people requiring emergency 
food assistance. In addition, UNHCR reports that, as of January 2012, 
Ethiopia was hosting more than 288,000 refugees from neighboring 
countries, such as Eritrea and Somalia. 

In 2011, WFP's direct expenses in Ethiopia totaled about $392 million, 
most of which was used to support the implementation of protracted 
relief and recovery operations (PRROs), as shown in table 1. One of 
the PRROs addresses acute food insecurity through relief, safety nets, 
supplementary feeding, and HIV programs, while the other provides food 
assistance to refugees in Ethiopia. WFP Ethiopia's guiding principle 
is to support government programs in addressing hunger by using food 
assistance where it adds value. WFP further assists the Ethiopian 
government through capacity building projects, such as Purchase for 
Progress (P4P), a food management improvement project, and 
vulnerability and assessment mapping. WFP is also a major contributor 
to supporting disaster risk management capacity in Ethiopia. 

Table 1: WFP Direct Expenses for Ethiopia, 2007-2011: 

Relief[A]; 
2007: $148,862,000; 
2008: $261,831,000; 
2009: $354,215,000; 
2010: $416,298,000; 
2011: $339,050,000. 

Development[B]; 
2007: $17,836,000; 
2008: $19,658,000; 
2009: $26,414,000; 
2010: $26,247,000; 
2011: $27,029,000. 

Special operations[C]; 
2007: $164,000; 
2008: $2,578,000; 
2009: $4,041,000; 
2010: $3,125,000; 
2011: $3,837,000. 

Bilateral trust funds and others[D]; 
2007: $2,040,000; 
2008: $3,337,000; 
2009: $15,178,000; 
2010: $32,859,000; 
2011: $21,981,000. 

Total; 
2007: $168,902,000; 
2008: $287,404,000; 
2009: $399,847,000; 
2010: $478,529,000; 
2011: $391,897,000. 

Source: WFP's 2011 Annual Performance Report, May 14, 2012. 

Note: Expenses do not include program support and administrative costs. 

[A] Includes activities under protracted relief and recovery programs, 
such as relief activities for both Ethiopians and refugees residing in 
Ethiopia, according to WFP. 

[B] Development activities are intended to temporarily free the poor 
from the need to provide food for their families and to develop assets 
such as better houses and new agricultural skills, according to WFP. 

[C] Special operations typically involve short-term logistics and 
infrastructure work, according to WFP. 

[D] Includes all expenses for WFP's bilateral trust funds, General 
Fund, and Special Accounts. 

[End of table] 

Kenya: 

State estimates that Kenya had a population of approximately 39 
million people in 2010. In the UNDP Human Development 2011 Index, 
Kenya ranked 143 out of 187 countries. UNDSS has assessed security 
threats in the regions of Kenya at levels ranging from 2 (low) to 4 
(substantial). 

In 2011, a complex crisis unfolded as severe drought affected the Horn 
of Africa and deepened into famine in parts of Somalia. WFP reported 
that in mid-2011, tens of thousands of Somalis arrived in Kenya's 
Dadaab refugee camps each month, fleeing famine conditions and 
insecurity in southern Somalia. In addition, according to UNHCR, in 
September 2011 the Kakuma refugee camp was home to more than 80,000 
refugees and asylum-seekers, over half of them from Somalia, and the 
Dadaab and Kakuma camps had a combined population of more than half a 
million, predominantly Somalis. Further, WFP reports that the drought 
made about 4 million Kenyans acutely food insecure. 

In 2011, WFP's direct expenses in Kenya totaled about $252 million, 
with most of this money used to support relief programs, including 
PRROs, as shown in table 2. WFP reported that, through one of the 
PRROs, it provided food assistance to refugees living in Dadaab and 
Kakuma camps and their host communities. The second PRRO supported 
families most affected by drought and rising food prices in the arid 
or semi-arid land, according to WFP. Both PRROs implemented general 
food distributions, nutrition support programs, and projects that paid 
in food for beneficiaries to build productive assets, such as those 
focused on harvesting and managing rainwater and conserving soil. In 
addition, where market conditions allowed, WFP delivered assistance 
through conditional and unconditional cash transfers. 

Table 2: WFP Direct Expenses for Kenya, 2007-2011: 

Relief[A]; 
2007: $153,561,000; 
2008: $136,528,000; 
2009: $222,834,000; 
2010: $191,706,000; 
2011: $228,590,000. 

Development[B]; 
2007: $28,532,000; 
2008: $25,022,000; 
2009: $23,722,000; 
2010: $21,655,000; 
2011: $21,702,000. 

Special operations[C]; 
2007: $8,205,000; 
2008: $681,000; 
2009: 0; 
2010: 0; 
2011: 0. 

Bilateral trust funds and others[D]; 
2007: 0; 
2008: $61,000; 
2009: $449,000; 
2010: $1,264,000; 
2011: $1,373,000. 

Total; 
2007: $190,298,000; 
2008: $162,293,000; 
2009: $247,005,000; 
2010: $214,625,000; 
2011: $251,665,000. 

Source: WFP's 2011 Annual Performance Report, May 14, 2012. 

Note: Expenses do not include program support and administrative costs. 

[A] Includes activities under protracted relief and recovery programs, 
such as general food distribution for both Kenyans and refugees 
residing in Kenya, according to WFP. 

[B] Development activities are intended to temporarily free the poor 
from the need to provide food for their families and to develop assets 
such as better houses and new agricultural skills, according to WFP. 

[C] Special operations typically involve short-term logistics and 
infrastructure work, according to WFP. 

[D] Includes all expenses for WFP's bilateral trust funds, General 
Fund, and Special Accounts. 

[End of table] 

Somalia: 

State estimates that Somalia had a population of approximately 9.9 
million people in 2011. Due to a lack of data on Somalia, the UNDP's 
Human Development Index does not include Somalia in its ranking. WFP 
reports that Somalia has been affected by conflict and without a 
functioning government for more than two decades. UNDSS has assessed 
security threats in the regions of Somalia at levels ranging from 3 
(moderate) to over 5 (high). 

According to WFP, Somalia is classified as among the poorest and most 
food-insecure countries in the world. Six regions of southern Somalia 
were declared as famine zones by the Food Security and Nutrition 
Analysis Unit in 2011. Three of these regions were still classified as 
famine zones at the end of 2011. In many regions of Somalia, the 
global acute malnutrition rate remains near or above famine levels, 
and death rates remain high, especially for children, mainly because 
of continued outbreaks of measles, cholera, and malaria. WFP reports 
that current levels of malnutrition and mortality remain two to four 
times higher than typical levels in Somalia for this time of the year 
and six times the typical level for Sub-Saharan Africa. 

In 2011, WFP's direct expenses in Somalia totaled about $137 million, 
with most of this money used to support relief programs, including 
emergency operations, as reflected in table 3. WFP supported 
vulnerable Somalis through an emergency operation and three special 
operations. The main pillars of WFP's emergency operations are general 
food distribution and nutrition programs to provide support to 
families living in emergencies and ensuring their adequate food 
consumption. An emergency school meals program provides a daily meal 
while increasing access to education of vulnerable children. Early 
recovery activities, including institutional feeding, and Food for 
Assets projects, including training, support the reestablishment of 
basic livelihoods of targeted households. 

Table 3: WFP Direct Expenses for Somalia, 2007-2011: 

Relief[A]; 
2007: $64,508,000; 
2008: $168,086,000; 
2009: $247,236,000; 
2010: $104,916,000; 
2011: $116,098,000. 

Development[B]; 
2007: 0; 
2008: 0; 
2009: 0; 
2010: 0; 
2011: 0. 

Special operations[C]; 
2007: $3,169,000; 
2008: $10,696,000; 
2009: $20,057,000; 
2010: $13,362,000; 
2011: $20,657,000. 

Bilateral trust funds and others[D]; 
2007: 0; 
2008: 0; 
2009: $596,000; 
2010: $1,611,000; 
2011: $728,000. 

Total; 
2007: $67,678,000; 
2008: $178,781; 
2009: $267,889; 
2010: $119,889,000; 
2011: $137,483,000. 

Source: WFP's 2011 Annual Performance Report, May 14, 2012. 

Note: Expenses do not include program support and administrative costs. 

[A] Includes activities under emergency operations, such as general 
food distribution for Somalis, according to WFP. 

[B] Development activities are intended to temporarily free the poor 
from the need to provide food for their families and to develop assets 
such as better houses and new agricultural skills, according to WFP. 

[C] Special operations typically involve short-term logistics and 
infrastructure work, according to WFP. 

[D] Includes all expenses for WFP's bilateral trust funds, General 
Fund, and Special Accounts. 

[End of table] 

In June 2009, the United Kingdom-based Channel 4 News reported on 
allegations that WFP food assistance in Somalia had been diverted from 
intended beneficiaries. Since that time, the UN Monitoring Group on 
Somalia, WFP's Office of Inspections and Investigations, and WFP's 
External Auditor have conducted audits and investigations of these 
allegations and related control weaknesses. The allegations of food 
diversion and ensuing investigations added to the challenges WFP faced 
in Somalia due to drought, famine, and increased security risks and 
conflict related to the al-Shabaab terrorist group. Increased security 
risks in Somalia led many nongovernmental organizations, including 
WFP, to suspend their operations in some parts of Somalia in 2010. In 
2011, WFP began providing assistance to some of the areas in Somalia 
it had exited in early 2010. Figure 9 shows a timeline of security and 
humanitarian events in Somalia as well as internal and external 
investigations into allegations of control weaknesses in WFP's 
operations there, including food diversion. 

Figure 9: Timeline of Security and Humanitarian Events and 
Investigations into WFP Control Weaknesses in Somalia: 

[Refer to PDF for image: timeline] 

Security incidents in Somalia:  

In April 2008, fighting between Somalia government and Ethiopian 
troops and Islamic militants in Mogadishu left 81 civilians dead.  

In January 2010, WFP suspended activities in many parts of southern 
Somalia due to the imposition of "unacceptable conditions" by al-
Shabaab.  

In mid 2010, many nongovernmental organizations pulled out of southern 
Somalia due to security risks.  

Until early 2011, al-Shabaab had controlled much of south-central 
Somalia and parts of Mogadishu.  

In December 2011, two WFP staff were killed in Somalia.  

In January 2012, a number of international humanitarian agencies 
suspended operations in some regions of Somalia following repeated
blockades and security risks. 

Since January 2012, WFP has been unable to deliver food to nearly 
2,000 beneficiaries in Buhoodle, Somaliland, due to the security 
situation in the area. 

In April 2012, 12 people died and 30 more were injured after an 
explosion rocked a market in the city of Baidoa. 

Humanitarian emergencies:  

In June 2008, the International Committee of the Red Cross  
reported that Somalia is facing life-threatening food and water 
shortages, leaving millions at risk.  

Beginning in spring 2011, Somalia and the greater Horn of Africa 
experienced one of the worst droughts in 60 years. 

In July 2011, the UN declared famine in two regions in Somalia.  

Reports and investigations into control weaknesses in Somalia: 

In June 2009, United Kingdom-based Channel 4 News reported allegations 
that food assistance provided in Somalia by WFP had been diverted from 
intended beneficiaries.  

In December 2009, WFP's Office of Inspections and Investigations 
investigated and then issued a report on the food diversion 
allegations.  

In March 2010, the UN Monitoring Group on Somalia released a report 
that found control weaknesses in WFP's operations in Somalia.  

In June 2010, WFP's Executive Board requested that its incoming 
external auditor undertake an audit of WFP's Somalia operations and 
provide recommendations to enhance WFP's internal controls. 

In January 2011, WFP's External Auditor issued its report on WFP's 
operations in Somalia. Also in January 2011, WFP issued its initial 
response to the External Auditor's recommendations.  

In July 2012, the UN Monitoring Group on Somalia released a report 
stating that large-scale diversion of humanitarian assistance
occurs in parts of Somalia but that WFP is taking all possible  
measures to investigate and address allegations of theft. 

Improvement in security or humanitarian situation in parts of Somalia: 
  
In July 2011, WFP resumed operations in some border areas in southern 
Somalia which had been recently liberated from al-Shabaab.  

In August 2011, al-Shabaab largely pulled out of Mogadishu. 

As of February 2012, the UN declared that Somalia was no longer in 
famine. 

Source: GAO summary based on our review of WFP and USAID documents. 

[End of figure] 

Monitoring Data Reported by WFP: 

WFP country offices in Ethiopia, Kenya, and Somalia set their own 
monitoring goals and monitoring plans. Tables 4 and 5 provide 
monitoring data reported by WFP, such as planned numbers of 
beneficiaries, UNDSS security levels, numbers of distribution sites, 
and numbers of monitors, for Ethiopia, Kenya, and Somalia as well as 
for selected fieldwork sites in Ethiopia and Kenya and high-risk areas 
in all three countries. 

Table 4: Monitoring Data Reported by WFP for Ethiopia, Kenya, and 
Somalia: 

Ethiopia; 
Number of planned beneficiaries: 3,033,000; 
UNDSS security level: 1 (minimal) to 4 (substantial); 
Number of distribution sites: 3,053 sites and 16 refugee camps for all 
relief and recovery programs; 
Number of monitors for all program: 81; 
Monthly distribution monitoring coverage goal: 100 percent of all 
refugee camps[A]; 
Monthly post-distribution monitoring coverage goal: 100 percent of all 
refugee camps[A]. 

Kenya; 
Number of planned beneficiaries: 2,780,000; 
UNDSS security level: 2 (low) to 4 (substantial); 
Number of distribution sites: 2,668 sites for General Food 
Distribution and Food for Assets activities within relief and recovery 
programs; 
Number of monitors for all program: 49; 
Monthly distribution monitoring coverage goal: For nonrefugee general 
food distribution activities within relief and recovery programs - 10 
percent of all sites[A]; 
Monthly post-distribution monitoring coverage goal: 120 households for 
each distribution site for non-refugee general food distribution 
activities within relief and recovery programs[A]. 

Somalia; 
Number of planned beneficiaries: 1,900,000; 
UNDSS security level: 3 (moderate) to over 5 (high); 
Number of distribution sites: 1,241 sites for all programs; 
Number of monitors for all program: 64 (39 WFP and 25 third-party); 
Monthly distribution monitoring coverage goal: 40 percent; 
30 percent for areas covered by third-party monitoring[B]; 
Monthly post-distribution monitoring coverage goal: 40 percent; 
30 percent for areas covered by third-party monitoring. 

Source: WFP. 

Note: Data shown under "Number of planned beneficiaries" are as of May 
2012. All other data shown are as of August 2012. 

[A] The WFP country offices in Ethiopia and Kenya have established 
different monitoring goals for the various programs operating in their 
respective countries (e.g., relief and recovery, refugees, school 
feeding, HIV/AIDS). We show the monitoring goals for the programs that 
we focused on and the sites that we visited during our fieldwork. 

[B] According to WFP, WFP area offices in Somalia were also required 
to monitor each distribution site once every 3 months in 2011. 

[End of table] 

Table 5: Monitoring Data Reported by WFP for Selected GAO Fieldwork 
Sites and High-Risk Areas in Ethiopia, Kenya, and Somalia: 

Tigray, Ethiopia; 
UNDSS security level: 1 (minimal) to 3 (moderate); 
Number of distribution sites: 332 distributions sites and 3 refugee 
camps; 
Number of beneficiaries: 386,529; 
Number of monitors: 4. 

Somali, Ethiopia; 
UNDSS security level: 3 (moderate) to 4 (substantial); 
Number of distribution sites: 869 distribution sites and 5 refugee 
camps; 
Number of beneficiaries: 2,374,374; 
Number of monitors: 40. 

Garissa, Kenya (includes Mwingi); 
UNDSS security level: 2 (low) to 4 (substantial); 
Number of distribution sites: 764[A]; 
Number of beneficiaries: 694,832; 
Number of monitors: 6. 

Turkana, Kenya; 
UNDSS security level: 4 (substantial); 
Number of distribution sites: 273; 
Number of beneficiaries: 427,400; 
Number of monitors: 5. 

Mogadishu, Somalia; 
UNDSS security level: 5 (high); 
Number of distribution sites: 93; 
Number of beneficiaries: 433,664; 
Number of monitors: 13 (4 WFP monitors and 9 third-party monitors). 

Puntland, Somalia; 
UNDSS security level: 4 (substantial); 
Number of distribution sites: 312; 
Number of beneficiaries: 337,346; 
Number of monitors: 11 (all WFP monitors). 

Source: WFP. 

Note: Data shown are as of August 2012. 

[A] According to WFP, although the WFP Garissa field office oversees 
764 distribution sites, only 148 of these sites are monitored by WFP 
Garissa staff. 

[End of table] 

[End of section] 

Appendix IV: Comments from the World Food Program: 

World Food Programme: 
The Executive Director: 
Via Cesare Giulio Viola, sops 00145 Rome, Italy: 
Tel: +39 06 6513 3030 Fax: +39 06 6513 2534: 

August 2012: 

Mr. Thomas Melito: 
Director, International Affairs and Trade: 
Government Accountability Office: 
Washington, DC: USA: 

Dear Mr. Melito, 

Re: Draft Report of the United States Government Accountability Office 
on World Food Program: Stronger Controls Needed in High-Risk Areas 
(GAO-12-790): 

Thank you for the opportunity to review the draft GAO report on WFP's 
internal controls and to provide our comments prior to its publication. 

We agree with the overall conclusions of the report that WFP has 
designed and implemented internal controls for the delivery and 
monitoring of its food assistance that reflect COSO principles but 
that further actions are needed in some areas. We believe the GAO 
report is an accurate assessment of the status of our internal 
controls and risk management related to the areas reviewed and that it 
provides constructive recommendations. 

As you acknowledge in the report, WFP often operates in the most 
difficult environments in the world. Over time, we have put in place a 
number of controls aimed at protecting our staff and ensuring that our 
food assistance reaches its intended beneficiaries in these high-risk 
contexts. For the most part these controls have been effective, as you 
also acknowledge. At the same time, we agree that more can and should 
be done. 

As we move forward, strengthening our overall internal control 
framework and enterprise risk management will remain a priority for 
WFP. A number of the points raised in your report are already being 
addressed as part of the overall organization strengthening effort 
launched in April. This includes a set of improvements to corporate 
monitoring and reporting, with an emphasis on putting in place a 
system that is succinct, resourced and implementable at field level. 
We will continue to consult with our Member States, through the WFP 
Executive Board, as we pursue further actions to ensure WFP food 
assistance reaches its intended beneficiaries in both high-risk and non
high-risk environments. Your recommendations will be useful in this 
regard. 

We appreciate the efforts and professionalism of the GAO team involved 
in this review and believe that WFP's actions and views on the areas 
addressed by the review have been fairly reflected in the report. 

Sincerely, 

Signed by: 

Ertharin Cousin: 

cc: Ambassador David Lane, US Representative to the United Nations
Food and Agriculture Agencies in Rome. 

[End of section] 

Appendix V: Comments from the U.S. Department of State: 

United States Department of State: 
Comptroller: 
1969 Dyess Avenue: 
Charleston, SC 29405: 

August 24, 2012: 

Dr. Loren Yager: 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

Dear Dr. Yager: 

We appreciate the opportunity to review your draft report,
"World Food Program: Stronger Controls Needed in High-Risk
Areas" GAO Job Code 320845. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact
Kourtney Maher, Foreign Affairs Officer, Bureau of International
Organization Affairs at (202) 736-7787. 

Sincerely, 

Signed by: 

James L. Millette: 

cc: GAO — Thomas Melito: 
I0 — Esther D. Brimmer: 
State/OIG - Evelyn Klemstine: 

[End of letter] 

Department of State Comments on GAO Draft Report: 

World Food Program, Stronger Controls Needed in High-Risk Areas
(GAO-12-790; GAO Code 320845): 

The Department of State, along with the United States Agency for
International Development and the United States Department of 
Agriculture, has reviewed the GAO's draft report entitled "World Food 
Program: Stronger Controls Needed in High-Risk Areas." We appreciate 
the opportunity to comment. The report provides timely and useful 
information for continuing the work already begun by the WFP to 
establish improved systems of internal control and risk management. 
There are several areas of this GAO report that will be of great 
assistance in reinforcing those positions the United States has 
already presented in the WFP Executive Board and independently on 
internal controls, risk management and monitoring at the WFP. The 
report will also serve to inform future U.S. Government positions on 
WFP matters related to these topics. 

We would like to acknowledge that WFP has developed risk management 
policies and guidance as recommended. These are solid steps; however, 
we would encourage WFP to finalize their efforts to establish these 
systems as GAO's report recommended. In particular, WFP must ensure 
that an understanding of the systems and procedures it institutes at 
headquarters are shared widely throughout the organization, especially 
country offices. WFP should provide concrete and proper guidelines, as 
the GAO report states, on the implementation of its risk management 
plan. Detailed guidance is needed to instruct staff in addressing 
risks, especially at the country level where WFP is most vulnerable. 
At the same time, we recognize that in high-risk conflict areas, where 
WFP's food assistance remains vital, these systems and procedures take 
time to implement and can depend largely on the capacity of 
implementing partners to track food in their custody. In some cases, 
this capacity is lacking. 

We welcome the GAO's recognition of the work WFP has already carried 
out in implementing an internal control framework. USUN Rome has 
consistently emphasized to the WFP Secretariat the importance of its 
implementation following the Audit Committee's recommendation in their 
2009 annual report; the first report under new terms of reference 
adopted in that year which was presented to the Board. This 
recommendation had been made to WFP in previous Audit Committee 
reports, which were not presented to the Executive Board. 

The Department of State agrees with GAO's conclusions and with its 
five recommendations. We will endeavor, through appropriate 
mechanisms, including the WFP Executive Board, bilaterally with WFP, 
and with partners, to implement all of the recommendations. USAID and 
USDA agree with all recommendations and are prepared to support the 
Department of State as needed. However, the U.S., on its own, is not 
in a position to direct either the Executive Board or WFP management 
to take specific actions. We believe a more accurate phrasing of the 
recommendations below would be "To work within the WFP Executive Board 
would then encourage WFP management... " 

* Recommendation 1: Direct WFP's Executive Board to develop a plan to 
more fully utilize the audit committee to assist the board in 
monitoring the effectiveness of WFP's risk management and internal 
control processes. 

* Recommendation 2: Direct WFP management to provide comprehensive 
risk management guidance addressing key elements of the risk 
management process, such as identifying, assessing and responding to 
risks. 

* Recommendation 3: Direct WFP management to provide comprehensive 
risk management guidance to specify that field monitoring activities 
should be risk based. 

* Recommendation 4: Direct WFP management to provide organization-wide 
guidance for addressing monitoring deficiencies in areas inaccessible 
to WFP monitors because of security restrictions. 

* Recommendation 5: Require periodic external evaluations to assess 
and improve the reliability of data on food assistance losses. 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Thomas Melito, (202) 512-9601 or melitot@gao.gov. 

Staff Acknowledgments: 

In addition to the individual named above, Phillip Thomas (Assistant 
Director), Barbara Shields (Analyst-in-Charge), Martin De Alteriis, 
Mark Dowling, Etana Finkler, Fang He, Teresa Heger, Sabur Ibrahim, 
Jeffrey Isaacs, Reid Lowe, and Kimberly McGatlin made key 
contributions to this report. Other contributors include Ming Chen, 
Joy Labez, Armetha Liles, and Jeremy Sebest. 

[End of section] 

Related GAO Products: 

Farm Bill: Issues to Consider for Reauthorization. [hyperlink, 
http://www.gao.gov/products/GAO-12-338SP]. Washington, D.C.: April 24, 
2012. 

International Food Assistance: Funding Development Projects through 
the Purchase, Shipment, and Sale of U.S. Commodities Is Inefficient 
and Can Cause Adverse Market Impacts. [hyperlink, 
http://www.gao.gov/products/GAO-11-636]. Washington, D.C: June 23, 
2011. 

International School Feeding: USDA's Oversight of the McGovern-Dole 
Food for Education Program Needs Improvement. [hyperlink, 
http://www.gao.gov/products/GAO-11-544]. Washington, D.C: May 19, 2011. 

International Food Assistance: Better Nutrition and Quality Control 
Can Further Improve U.S. Food Aid. [hyperlink, 
http://www.gao.gov/products/GAO-11-491]. Washington, D.C: May 12, 2011. 

Global Food Security: U.S. Agencies Progressing on Governmentwide 
Strategy, but Approach Faces Several Vulnerabilities. [hyperlink, 
http://www.gao.gov/products/GAO-10-352]. Washington, D.C.: March 11, 
2010. 

International Food Assistance: USAID Is Taking Actions to Improve 
Monitoring and Evaluation of Nonemergency Food Aid, but Weaknesses in 
Planning Could Impede Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-09-980]. Washington, D.C.: September 
28, 2009. 

Somalia: Several Challenges Limit U.S. International Stabilization, 
Humanitarian, and Development Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-08-351]. Washington, D.C.: February 
19, 2008. 

United Nations Organizations: Oversight and Accountability Could Be 
Strengthened by Further Instituting International Best Practices. 
[hyperlink, http://www.gao.gov/products/GAO-07-597]. Washington, D.C.: 
June 18, 2007. 

Foreign Assistance: Various Challenges Impede the Efficiency and 
Effectiveness of U.S. Food Aid. [hyperlink, 
http://www.gao.gov/products/GAO-07-560]. Washington, D.C.: April 13, 
2007. 

Darfur Crisis: Progress in Aid and Peace Monitoring Threatened by 
Ongoing Violence and Operational Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-07-9]. Washington, D.C.: November 9, 
2006. 

United Nations: Lessons Learned from Oil for Food Program Indicate the 
Need to Strengthen UN Internal Controls and Oversight Activities. 
[hyperlink, http://www.gao.gov/products/GAO-06-330]. Washington, D.C.: 
April 25, 2006. 

Foreign Assistance: U.S. Food Aid Program to Russia Had Weak Internal 
Controls. [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD/AIMD-00-175]. Washington, D.C.: 
September 29, 2000. 

Foreign Assistance: U.S. Bilateral Food Assistance to North Korea Had 
Mixed Results. NSIAD-00-175. Washington, D.C: June 15, 2000. 

World Bank: Management Controls Stronger, but Challenges in Fighting 
Corruption Remain. [hyperlink, http://www.gao.gov/products/GAO-00-73]. 
Washington, D.C.: April 6, 2000. 

Foreign Assistance: North Korea Restricts Food Aid Monitoring. NSIAD-
00-35. Washington, D.C: October 8, 1999. 

[End of section] 

Footnotes: 

[1] Unless otherwise indicated, "WFP" refers to WFP management, 
including management at WFP headquarters, regional bureaus, and 
country offices. 

[2] World Food Program, Office of Inspections and Investigations, 
Investigations of Allegations of Food Diversions in Somalia, OSDlI51/ 
09-I 29/09 (2009); UN Security Council, Report of the Monitoring Group 
on Somalia pursuant to Security Council Resolution 1853 (2008), 
S/2010/91 (Geneva, Switzerland: 2010); Comptroller and Auditor General 
of India, External Audit Report: World Food Program's Somalia 
Operations, WFP/EB.1/2011/5-B/1 (2011). 

[3] UN Security Council, Report of the Monitoring Group on Somalia 
Pursuant to Security Council Resolution 1853 (2008), S/2010/91 (2010). 

[4] UN Security Council, Report of the Monitoring Group on Somalia and 
Eritrea Pursuant to Security Council Resolution 2002 (2011), 
S/2012/544 (2012). 

[5] Committee of Sponsoring Organizations of the Treadway Commission, 
Internal Control--Integrated Framework (1992). COSO was formed in 1985 
to sponsor the National Commission on Fraudulent Financial Reporting, 
an independent, private-sector initiative that studied the causal 
factors that can lead to fraudulent financial reporting and developed 
recommendations for public companies and their independent auditors; 
the U.S. Securities and Exchange Commission and other regulators; and 
educational institutions. In 1992, COSO issued "Internal Control--
Integrated Framework" to help businesses and other entities assess and 
enhance their internal control. Since that time, COSO's internal 
control framework has been recognized by regulatory standards setters 
and others as a comprehensive framework for evaluating internal 
control, including internal control over financial reporting. 

[6] Committee of Sponsoring Organizations of the Treadway Commission, 
Internal Control--Integrated Framework. According to COSO, an internal 
control system, no matter how well conceived and operated, can provide 
only reasonable--not absolute--assurance regarding achievement of an 
entity's objectives. The likelihood of achievement is affected by 
limitations inherent in all internal control systems, such as faulty 
decision-making and resource constraints. 

[7] World Food Program, Audited Annual Accounts, 2011, WFP/EB.A/2012/6-
A/1 (2012). The former WFP Executive Director served from April 2007 
to April 2012, when Ertharin Cousin began her tenure. 

[8] Our current work on international food assistance includes a 
review, forthcoming in September 2012, of USAID's targeting of 
international food assistance. 

[9] Throughout this report, "beneficiaries" refers to recipients of 
WFP food assistance. 

[10] Committee of Sponsoring Organizations of the Treadway Commission, 
"Enterprise Risk Management--Integrated Framework (2004). According to 
COSO, a key objective of this framework is to help managements of 
businesses and other entities better deal with risk in achieving an 
entity's objectives. 

[11] International Organization for Standardization, ISO 31000 Risk 
Management--Principles and Guidelines (2009). ISO is intended to be a 
family of standards relating to risk management codified by the 
International Organization for Standardization. The purpose of "ISO 
31000 Risk Management--Principles and Guidelines" is to provide 
principles and generic guidelines on risk management. ISO 31000 seeks 
to provide a universally recognized paradigm for practitioners and 
companies employing risk management processes to replace the myriad of 
existing standards, methodologies and paradigms that differed between 
industries, subject matters and regions. 

[12] WFP refers to losses of food commodities after arrival at the 
port-of-entry as post-delivery losses. Throughout this report, we 
refer to such losses as food assistance losses. 

[13] WFP's security philosophy acknowledges that risk is an inevitable 
part of operations and aims to (1) enhance the security of personnel 
and (2) manage, rather than avoid, security risks as one of the 
challenges that WFP faces in implementing its programs. 

[14] WFP's designations of high-risk countries are not directly 
related to the UNDSS security ratings for geographic areas in the 
countries. WFP uses the following criteria to determine whether a 
country should be classified as high risk: volatile/insecure operating 
environment; implementation of humanitarian operations; level/volume 
of the operations (the higher the volume, the greater the need to 
assess/mitigate risks); and absence of a risk register (i.e., a 
document recording identified risks, their severity, actions to be 
taken to mitigate the risks, and individuals responsible for the 
mitigating actions). 

[15] EMOPs are implemented in urgent situations and typically include 
food distribution or projects such as food aid in exchange for 
reconstruction work. PRROs are intended to help sustain disaster-hit 
communities as they reestablish livelihoods and stabilize food 
security. 

[16] Private land transporters are usually truckers who may be 
contracted by WFP or by its implementing partners. 

[17] WFP refers to third parties who help distribute its food to WFP 
beneficiaries as implementing or cooperating partners. Throughout this 
report, we refer to these third parties as implementing partners. 

[18] In its 2011 annual performance report, WFP reported that it spent 
almost $3.8 billion on food assistance. Of this amount, about $2.4 
billion, or 65 percent, supported EMOP and PRRO projects in the 23 
high-risk countries, including about $1.5 billion in the 10 high-risk 
countries in Sub-Saharan Africa. See World Food Program, Annual 
Performance Report for 2011, WFP/EB.A/2012/4 (2012). 

[19] U.S. officials conduct field monitoring visits of U.S.-funded WFP 
operations to observe and assess WFP programs, including the programs' 
activities and challenges. These monitoring visits are generally 
summarized in a monitoring report or cable that is shared with the 
relevant program office or embassy and other U.S. officials who work 
on WFP programs. In addition, if in the interest of U.S. government 
foreign assistance objectives, U.S. officials might visit non-U.S. 
funded WFP operations. 

[20] The five components of WFP's internal control framework are 
similar to those of the COSO internal control framework: control 
environment, risk assessment, control activities, information and 
communication, and monitoring. 

[21] WFP bases "internal environment," the first component of its 
internal control framework, on elements of the "control environment" 
component of COSO's internal control framework as well as on elements 
of COSO's enterprise risk management framework. 

[22] WFP bases the second component of its internal control framework 
on COSO's internal control component "risk assessment," COSO's 
enterprise risk management framework, and principles and guidelines of 
other international organizations. WFP defines "risk tolerance" as 
representing an acceptable level of variation relative to the 
achievement of a particular objective. Risk tolerance seeks to provide 
measurable indicators of the level of risk tolerated in achieving a 
specific objective. 

[23] According to COSO, control activities include a range of 
activities as diverse as approvals, authorizations, verifications, 
reconciliations, and reviews of operating performance and security of 
assets. 

[24] The current chairman of the WFP Audit Committee was elected in 
December 2011, and his appointment was renewed in July 2012 for a 3-
year term. 

[25] WFP, Audited Annual Accounts, 2011, WFP/EB.A/2012/6-A/1 (2012). 

[26] The External Auditor did not perform an audit of WFP's 
management's assessment of the effectiveness of internal controls over 
financial reporting for 2011 as part of its annual audit, contrary to 
current best practices of multilateral organizations such as the World 
Bank and the Inter-American Development Bank. WFP management informed 
us that an audit of management's assessments of the effectiveness of 
internal control, like management's statements on internal control, is 
considered voluntary. 

[27] WFP's Executive Board consists of 36 members of the UN member 
state representatives. In September 2011, we met with 9 of the board 
members. See appendixes I and II for more information on the Executive 
Board. 

[28] In technical comments on a draft of this report, WFP noted that 
there is a fundamental difference between a company's board of 
directors, which would typically include executive directors, and 
WFP's Executive Board, which comprises representatives of sovereign 
states. 

[29] GAO, United Nations Organizations: Oversight and Accountability 
Could Be Strengthened by Further Instituting International Best 
Practices, [hyperlink, http://www.gao.gov/products/GAO-07-597] 
(Washington, D.C. June 18, 2007). 

[30] In its technical comments on a draft of this report, WFP noted 
that in industry, where an audit committee is usually a committee of 
the board of directors, the committee's communication and interaction 
with the board is fundamentally different than in WFP, where the Audit 
Committee members are technical oversight experts and the Executive 
Board comprises representatives of sovereign states. 

[31] In 2007, WFP's Audit Committee comprised both internal and 
external members and was accountable only to the Executive Director. 
See [hyperlink, http://www.gao.gov/products/GAO-07-597]. The current 
Audit Committee comprises five members who are appointed for a 3-year 
term, renewable for a second and final 3-year term. 

[32] According to the current Audit Committee's terms of reference, 
the Executive Director is involved in the recruitment and selection 
process of Audit Committee members. The Executive Board considers 
candidates recommended by the Executive Director, and an appointment 
to the Audit Committee may only be revoked by the Executive Board 
after consulting the Executive Director. However, according to 
international best practices, the Audit Committee should report, and 
be accountable, to the governing body. 

[33] World Food Program, WFP Audited Annual Accounts, 2009, WFP/EB.A/ 
2010/6-A/1 (2010). 

[34] The Audit Committee meets quarterly with the Executive Board 
Bureau, which consists of five board members who are responsible for 
strategic planning of the board's work, the preparation and 
organization of board meetings, and promotion of dialogue. See World 
Food Program, Annual Report of the Audit Committee, WFP/EB.A/2012/6-D/ 
1 (2012). 

[35] World Food Program, Annual Report of the Audit Committee, WFP/ 
EB.A/2011/6-C/1 (2011); Annual Report of the Audit Committee (2012). 
As of April 2012, the Audit Committee submits its annual report to the 
Executive Board; previously, the committee submitted its annual report 
to the Executive Director for the board's consideration. 

[36] The FAO Finance Committee exercises control over the financial 
administration of WFP. See appendix II for additional information 
regarding its role. 

[37] WFP bases the "risk management" component of its internal control 
framework on principles included in the "risk assessment" component of 
COSO's internal control framework as well as on principles included in 
COSO's enterprise risk management framework. 

[38] A risk profile describes the characteristics of a risk, mapping 
the change in the likelihood and impact of the risk to which an 
organization is exposed. 

[39] COSO defines risk tolerance as the acceptable levels of variation 
relative to the achievement of an objective. 

[40] According to principles and benchmarks established by ISO and the 
UN Joint Inspection Unit, a formal risk management system includes a 
formal risk management policy, framework, and risk management process. 
See International Organization for Standardization, ISO 31000 Risk 
Management--Principles and Guidelines; and UN Joint Inspection Unit, 
Review of Enterprise Risk Management in the United Nations System: 
Benchmarking Framework, (Geneva, Switzerland: 2010). 

[41] See Victoria Metcalfe, Ellen Martin, and Sara Pantuliano, "Risk 
in Humanitarian Action: Towards a Common Approach?" a report 
commissioned by the Humanitarian Policy Group (London, UK: Overseas 
Development Institute, 2011). In this report, the Overseas Development 
Institute's Humanitarian Policy Group--a team of independent 
researchers and information professionals working on humanitarian 
issues--states that its research indicates that while there is growing 
awareness of the nature of risk in the humanitarian sector, there is 
very little structured or agreed understanding of the range of risks 
prevalent in the sector, possibly with the exception of security 
risks. The report adds that the humanitarian community has much to 
learn from other sectors in assessing, for example, risk appetite and 
risk tolerance and in managing the many risks it faces. Neither WFP's 
internal control framework nor its risk management framework mentions 
these risk categories. 

[42] World Food Program, "Facilitator's Guide: Preparing a Country 
Office Risk Register" (draft). 

[43] WFP's 2006 guidance describes a five-step process: (1) clarify 
expected results and critical stakeholders, (2) identify risks that 
can impact expected results, (3) prioritize risks' importance (impact 
and likelihood), (4) act on risks and decide how to proceed with 
activities, and (5) review and communicate risks. World Food Program, 
"Risk Management Guide" (2006). 

[44] World Food Program, "Facilitator's Guide: Preparing a Country 
Office Risk Register" (draft). 

[45] According to ISO principles and guidelines, the risk management 
process is the systematic application of management policies, 
procedures and practices to activities such as identifying, analyzing, 
evaluating, responding, monitoring, and reviewing risk. 

[46] Risk appetite is the amount of risk, on a broad level, that an 
organization is willing to accept in pursuit of its objectives. 

[47] Superintendents are independent cargo surveyors, employed by WFP 
to inspect WFP shipments at the time of delivery and ascertain their 
quantity and condition on delivery. 

[48] Stack cards provide information on shipping instructions, batch 
numbers, type of commodity, date of arrival, quantity originally 
stacked, quantity out, and the balance, all which is signed for on the 
card itself. 

[49] World Food Program, Report of the External Auditor on WFP 
Operations in Somalia, WFP/EB.1/2011/5-B/1 (2011). 

[50] World Food Program, WFP Management Response to the Report of the 
External Auditor on WFP Operations in Somalia, WFP/EB.1/2011/5-B/1/ 
Add.1 (2011). 

[51 World Food Program, Report of the External Auditor on WFP 
Operations in Somalia. 

[52] The External Auditor stated that, according to WFP management, 
COMPAS was developed as a data entry tool and separate applications, 
based on Microsoft Access and Oracle Discoverer, were subsequently 
developed for generating reports. 

[53] World Food Program, WFP Management Response to the Report of the 
External Auditor on WFP Operations in Somalia. 

[54] According to WFP, stakeholders may include implementing partners, 
host governments, nongovernmental organizations, UN agencies, 
contractors, and suppliers. Other stakeholders may include the media, 
beneficiaries, and internal entities, such as a WFP regional bureau, a 
headquarters division, or a neighboring country office. 

[55] The Executive Director has the authority to approve protracted 
relief and recovery operations with food values of $20 million or less 
and must inform the Executive Board of the approval. The board must 
approve protracted relief and recovery operations with food values in 
excess of $20 million. 

[56] Standard project reports are prepared for emergency operations, 
protracted relief and recovery operations, development operations, and 
special operations but are not prepared for bilateral projects. WFP 
considers a contribution to be bilateral if the donor directs that it 
be used to support a project or operation that is not initiated by WFP. 

[57] The Horn of Africa updates cover Djibouti, Ethiopia, Kenya, 
Somalia, and Uganda. 

[58] World Food Program, Update on the Implementation of the External 
Auditor Recommendations on WFP's Operations in Somalia, WFP/EB.A/2011/ 
6-I (Rome, Italy: 2011). 

[59] WFP's Monitoring and Evaluation Guidelines states that the main 
components of a monitoring and evaluation strategy are (1) a logical 
framework; (2) a monitoring and evaluation plan for data collection 
and analysis; (3) reporting flows and formats; (4) a feedback and 
review plan; (5) a capacity building design; (6) an implementation 
schedule; and (7) a budget. 

[60] WFP officials told us that they also consider including risk, 
context of operations, capacities of implementing partners, 
geographical spread, and resources when determining the level of 
monitoring. 

[61] United Kingdom National Audit Office, World Food Programme: 
Review of the Arrangements for Reporting Post Delivery Food Losses to 
the Executive Board, WFP/EB.1/2006/6-B/1 (2006). 

[62] WFP's guidance for monitoring the performance of its programs 
also instructs staff and monitors to document the type of risks that 
could affect the achievement of a program's goals and outcomes. 

[63] We reviewed various documents for Ethiopia, Kenya, and Somalia 
that reflect controls that WFP has implemented while tracking the food 
commodity from these countries' ports of entry to the intended 
beneficiaries for the period of January to June 2011. In this report, 
we use the term "selected areas" to include the sites we visited in 
our case study countries, the areas covered in the documents we 
reviewed, the areas covered in interviews we conducted in our selected 
countries, and other reviews related to internal controls in our case 
study countries that we determined were appropriate for our 
researchable objectives. The areas we selected for review, like the 
countries we visited, are not generalizable to all areas in the 
selected countries or to the broader universe of WFP programs and 
operations. 

[64] Because of logistical issues and security concerns, we were not 
able to visit sites in Somalia. 

[65] The shipping instruction number identifies a consignment and is 
one of the keys to tracking and pipeline management. 

[66] Instead of using food release notes, WFP Ethiopia uses document 
request forms to submit food requests. According to WFP, food release 
notes and document requests serve the same purpose. 

[67] We observed the reconciliation of physical inventory counts 
against data in COMPAS only in Ethiopia. 

[68] We did not visit sites where WFP distributed the food directly to 
the beneficiaries. 

[69] According to a UNHCR representative, ration cards identify 
refugees and family members eligible to receive rations. Ration cards 
are marked at the time of food distribution, allowing implementing 
partners to verify that cardholders received their rations for the 
distribution cycle. 

[70] According to a 2012 WFP report, in Ethiopia, UNHCR's chief 
responsibilities include supporting the Ethiopian government with 
financial resources for the determination of refugee status and 
registration processes and providing refugees with non-food items, 
such as cooking utensils, blankets and soap, and complementary foods, 
to improve the usability of the main food commodities that WFP 
provides. World Food Program, Summary Report of the Joint UNHCR/WFP 
Impact Evaluation on the Contribution of Food Assistance to Durable 
Solutions in Protracted Refugee Situations--Ethiopia, WFP/EB.1/2012/6-
E (2012). 

[71 WFP has made efforts to strengthen the Ethiopian government's 
capacity in food commodity management through training and the 
development of a separate commodity tracking database. 

[72] World Food Program Office of Evaluation, Summary Evaluation 
Report-Kenya Country Portfolio, WFP/EB.2/2011/6-D (2011). 

[73] According to WFP, in January 2012 UNDSS classified a 7TH district 
in the Somali region of Ethiopia as inaccessible to WFP and other UN 
staff. 

[74] World Food Program, Audited Annual Accounts, 2011, WFP/EB.A/2012/ 
6-A/1 (2012). 

[75] World Food Program, Report on the Implementation of the External 
Auditor Recommendations, WFP/EB.A/2012/6-H/1 (2012). 

[76] World Food Program's Inspector General Office, Office of 
Inspections and Investigations, Investigations of Allegations of Food 
Diversions in Somalia; UN Monitoring Group on Somalia, Report of the 
Monitoring Group on Somalia Pursuant to Security Council Resolution 
1853; Comptroller and Auditor General of India, External Audit Report: 
World Food Programme's Somalia Operations. 

[77] Third-party monitors are generally local staff hired by private 
firms rather than by WFP, the recipient government, or implementing 
partners. According to WFP, its third-party monitors must have the 
same qualifications and receive the same training as WFP monitors. 
Because WFP began using third-party monitors relatively recently and 
provided limited documentation on its use of third party monitors, we 
were unable to assess the effectiveness and qualifications of these 
monitors or to verify the type of training they received. 

[78] WFP has also used third-party monitors in Afghanistan since 2007 
and in Pakistan since 2009. 

[79] Comptroller and Auditor General of India, External Audit Report: 
World Food Programme's Somalia Operations, WFP/EB.1/2011/5-B/1 (2011). 

[80] WFP has also established a beneficiary hotline for operations in 
Afghanistan and Pakistan. 

[81] Comptroller and Auditor General of India, External Audit Report: 
World Food Programme's Somalia Operations, WFP/EB.1/2011/5-B/1 (2011). 

[82] Because WFP provided us with a single Somalia monitoring and 
evaluation report, from March 2011, we were able to verify the content 
of only that report. 

[83] WFP Somalia has also created standard operating procedures to 
determine how the results of monitoring should be used, as recommended 
by WFP's External Auditor in its 2011 report on Somalia. 

[84] UNDSS classified an additional district in this region as 
inaccessible in January 2012. 

[85] USAID conducts monitoring visits of U.S.-funded WFP operations 
and summarizes these findings in a narrative document. 

[86] World Food Program, United Nations High Commissioner for 
Refugees, and Ethiopian Government Administration for Refugee and 
Returnee Affairs, Ethiopia 2010, Joint Assessment Mission: Major 
Findings and Recommendations (2010). 

[87] World Food Program, Horn of Africa Crisis, No. 33. (2012). 

[88] Although WFP did not provide monitoring data for Mogadishu for 
October 2011, WFP officials in Somalia told us that limited monitoring 
was conducted in Mogadishu during that month. 

[89] The data on monitoring coverage, beneficiaries and metric tons 
are provided in the Somalia monthly updates that WFP sends to 
stakeholders. The most recent data on beneficiaries and metric tons 
provided, from the reports that we saw for Mogadishu, are for February 
2012. The reports did not provide these data for December 2011 or 
January 2012. 

[90] Only general food distributions and food-for-assets distributions 
take place at these sites in Kenya. 

[91] UN Security Council, Report of the Monitoring Group on Somalia 
Pursuant to Security Council Resolution 2002 (2011), S/2012/544 (2012). 

[92] According to WFP, WFP monitors' access to some sites in Ethiopia 
and Kenya is limited by UNDSS security restrictions. Using its 6-point 
scale, UNDSS has rated the area where the Shimelba Refugee Camp is 
located at security level 3; Turkana, Kenya, at security level 4; and 
Mwingi, Kenya, at security level 2. In Turkana, we witnessed a general 
food distribution that occurred 2 weeks later than scheduled owing to 
land transport issues, according to WFP. Because of U.S. government 
security restrictions, we were unable to conduct any fieldwork in 
Somalia. 

[93] Three of the 18 evaluations covered Ethiopia and Kenya. 

[94] United Kingdom National Audit Office, World Food Programme: 
Review of the Arrangements for Reporting Post Delivery Food Losses to 
the Executive Board, WFP/EB.1/2006/6-B/1 (Rome, Italy: 2006). 

[95] We compiled data on WFP's food assistance losses from its 2007-
2011 annual reports on food assistance losses and used these data to 
calculate summary statistics. 

[96] World Food Program, Report on Post-Delivery Losses for the Period 
1 January-31 December 2009, WFP/EB.A/2010/13-A/Rev.2 (2010). 

[97] See Jonathan Rugman, "U.N. Probe after Aid Stolen from Somalia 
Refugees." Channel 4 News (UK), June 15, 2009, accessed July 24, 2012, 
[hyperlink, http://www.channel4.com/news]. 

[98] World Food Program, Office of Inspections and Investigations, 
Investigation of Allegations of Food Diversions in Somalia, OSDI/51/09 
-I 29/09 (2009). 

[99] UN Security Council, Report of the Monitoring Group on Somalia 
Pursuant to Security Council Resolution 1853 (2008), S/2010/91 (2010). 

[100] The UN Monitoring Group on Somalia's 2012 report found that 
large-scale diversions of food assistance have continued in Somalia. 
According to the report, WFP has taken measures to investigate and 
address allegations of diversion, including through the use of third-
party monitoring and independent audit firms. UN Security Council, 
Report of the Monitoring Group on Somalia Pursuant to Security Council 
Resolution 2002 (2011), S/2012/544 (2012). 

[101] Comptroller and Auditor General of India, External Audit Report: 
World Food Programme's Somalia Operations, WFP/EB.1/2011/5-B/1 (2011). 

[102] WFP's annual report on food assistance losses includes analysis 
of losses in a country if (a) the country registered food assistance 
losses of a single food type that represent at least two percent of 
the tonnage handled of that food and that have an absolute value of at 
least $20,000 and (b) the country registered losses of a single food 
type that have an absolute value greater than $100,000. In addition, 
the report describes measures to minimize losses, reviews factors 
contributing to losses in specific context and the preventive actions 
taken, and provides updates on issues outstanding from previous 
reports. For example, see World Food Program, Report on Post-Delivery 
Losses for the Period 1 January-31 December 2011. 

[103] The Associated Press conducted an analysis of the results of 
WFP's announced and unannounced monitoring visits, as part of a 
broader examination of WFP's activities in Somalia. See Katharine 
Houreld, "AP Exclusive: How Somalia Famine Aid Went Astray," 
Associated Press, March 17, 2012. 

[104] United Kingdom National Audit Office, World Food Programme: 
Review of the Arrangements for Reporting Post Delivery Food Losses to 
the Executive Board, WFP/EB.1/2006/6-B/1 (Rome, Italy: 2006). 

[105] In 2006, WFP reported having distributed a total of 4,245,359 
metric tons in 2005. WFP estimated that implementing partners had not 
submitted reports for 37,537 metric tons--0.9 percent, with an 
estimated value of $10.7 million--of this amount. COMPAS includes an 
option for marking a distribution quantity as an estimate for the last 
3 months of the year if the implementing partners' reports have not 
yet been received. 

[106] Comptroller General and Auditor General of India, Report of the 
External Auditor on the Financial Statements: World Food Programme for 
the Year Ended December 2011, WFP/EB.A/2012/6-A/1 (2012). 

[107] World Food Program, Information Note on the Development and 
Qualification of Sampling Methodology and Statistical Analysis for 
Measuring Post-Delivery Losses, WFP/EB.A/2008/INF/6 (2008). 

[108] According to the 2008 WFP document, the methodology should be 
applied to country offices where there is a need to reduce 
distribution losses and where staffing levels are adequate. The 
document states that good accountability along the logistics chain, up 
to the final delivery warehouses, is a precondition for introducing 
the methodology in a country office. The document further notes that 
stable food supplies to each project site and a steady project 
environment are also necessary to obtaining statistically relevant 
data. See World Food Program, Information Note on the Development and 
Qualification of Sampling Methodology and Statistical Analysis for 
Measuring Post-Delivery Losses. 

[109] United Kingdom National Audit Office, World Food Programme: 
Review of the Arrangements for Reporting Post Delivery Food Losses to 
the Executive Board. 

[110] The report, which the International Food Policy Research 
Institute produced under contract with WFP, also included a detailed 
description of the food distribution system in Bangladesh, identified 
problems throughout the system, and made recommendations on how to 
solve these problems and minimize food assistance losses. See Akhter 
U. Ahmed, Shahidur Rashid, Manohar Sharma, and Sajjad Zohir, Food Aid 
Distribution in Bangladesh: Leakage and Operational Performance, FCND 
Discussion Paper No. 173 (Washington, D.C.: International Food Policy 
Research Institute, 2004). 

[111] Committee of Sponsoring Organizations of the Treadway 
Commission, Internal Control--Integrated Framework (1992); Enterprise 
Risk Management--Integrated Framework (2004); Internal Control--
Integrated Framework: Evaluation Tools (1992); Enterprise Risk 
Management--Integrated Framework: Application Techniques (2004); 
Guidance on Monitoring Internal Control Systems (2009). 

[112] International Organization for Standardization, ISO 31000 Risk 
Management--Principles and Guidelines (2009). 

[113] Cihan Terzi and Istvan Posta, Review of Enterprise Risk 
Management in the United Nations System: Benchmarking Framework, JIU/ 
REP/2010/4 (Geneva, Switzerland: United Nations Joint Inspection Unit, 
2010). 

[114] The five components of WFP's internal control framework are 
similar to the five components of COSO's internal control framework. 
According to COSO's Internal Control--Integrated Framework: Evaluation 
Tools, each element has substantive "points of focus" that represent 
some of the more important issues relevant to the component; not all 
points of focus are relevant to every entity, and additional issues 
will be relevant to some entities. 

[115] We reviewed the following sections of WFP's March 2012 Financial 
Resource Management Manual: section 2, "Governance"; section 3, 
"Internal Control"; section 4, "WFP Oversight; and section 5, 
"Responsibilities and Authorities." 

[116] World Food Program, "Executive Director's Circular EDD2011--
Internal Control Framework" (2011). 

[117] World Food Program, Division of Communications and Public Policy 
Strategy, WFP Strategic Plan, 2008-2013. 

[118] World Food Program, Annual Report 2010 (2011); The Year in 
Review, 2011 (2012). 

[119] World Food Program, General Regulations, General Rules, 
Financial Regulations, Rules of Procedures of the Executive Board 
(2012). 

[120] World Food Program, Resource Management and Accountability 
Department, Accountability Guide for Managers: A Quick Reference Guide 
for Managers on the Responsibilities and Accountabilities within Key 
WFP Processes, v. 1.0 (2011). 

[121] World Food Program, Resource Management and Accountability 
Department, Manager's Guide to Internal Control: WFP's Guide to 
Internal Control for Managers (2011). 

[122] World Food Program, Resource Management and Accountability 
Department, Internal Control Self-Assessment Checklists: A tool to 
help managers control their business better, v. 1.0 (2011). 

[123] World Food Program, Oversight Framework and Reports Disclosure 
Policy, WFP/EB.A/2011/5-C/1 (2011). 

[124] World Food Program, Audited Annual Accounts, 2008, 
WFP/EB.A/2009/6"A/1 (2009); Audited Annual Accounts, 2009, 
WFP/EB.A/2010/6-A/1 (2010); Audited Annual Accounts, 2010, 
WFP/EB.A/2011/6-A/1 (2011); Audited Annual Accounts, 2011, 
(WFP/EB.A/2012/6-A/1 (2012). 

[125] World Food Program, Annual Report of the Audit Committee, WFP/ 
EB.A/2011/6-C/1 (2011); Annual Report of the Audit Committee, 
WFP/EB.A/2012/6-D/1 (2012). 

[126] World Food Program, Finance Committee, WFP Report of the 
Inspector General, FC 139/10 (2011); Annual Report of the Inspector 
General, WFP/EB.A/2012/6-E/1 (2012). 

[127] United Nations Food and Agriculture Organization, Report of the 
144th Session of the Finance Committee, Rome, 11-15 June 2012 (2012). 

[128] World Food Program, WFP Anti-Fraud and Anti-Corruption Policy, 
WFP/EB.2/2010/4-C/1 (2010). 

[129] United Nations Joint Inspection Unit, Ethics in the United 
Nations System (Geneva, Switzerland: 2010). 

[130] World Bank, The World Bank Annual Report 2011: Year in Review 
(2011). 

[131] Inter-American Development Bank, Annual Report 2011: The Year in 
Review (2012). 

[132] GAO, United Nations Organizations: Oversight and Accountability 
Could Be Strengthened by Further Instituting International Best 
Practices, [hyperlink, http://www.gao.gov/products/GAO-07-597] 
(Washington, D.C.: June 18, 2007). 

[133] World Food Program, "Risk Management Guide" (2006). 

[134] World Food Program, "Executive Director's Circular EDD2011--
Internal Control Framework" (2011). 

[135] World Food Program, Resource Management and Accountability 
Department, Accountability Guide for Managers. 

[136] World Food Program, Resource Management and Accountability 
Department, Manager's Guide to Internal Control. 

[137] Victoria Metcalfe, Ellen Martin, and Sara Pantuliano, Risk in 
Humanitarian Action: Towards a Common Approach?, a report commissioned 
by the Overseas Development Institute's Humanitarian Policy Group, 
2011. 

[138] We visited the WFP Somalia country office located in Nairobi, 
Kenya. 

[139] World Food Program, Protracted Relief and Recovery Operation: 
Ethiopia 200365, WFP/EB.1/2012/8/3 (2012). 

[140] World Food Program, Summary Report of the Joint UNHCR/WFP Impact 
Evaluation on the Contribution of Food Assistance to Durable Solutions 
in Protracted Refugee Situations--Ethiopia, WFP/EB.1/2012/6-E (2012). 

[141] World Food Program, Ethiopia Biweekly Report No. 3 (10 February 
2012). 

[142] World Food Program, Summary Evaluation Report--Kenya Country 
Portfolio, WFP/EB.2/2011/6-D. 

[143] World Food Program, Audited Annual Accounts, 2011, 
WFP/EB.A/2012/6-A/1 (2012). 

[144] World Food Program, Report on the Implementation of the External 
Auditor Recommendations, WFP/EB.A/2012/6-H/1 (2012). 

[145] Akhter U. Ahmed, Shahidur Rashid, Manohar Sharma, and Sajjad 
Zohir, Food Aid Distribution in Bangladesh: Leakage and Operational 
Performance, FCND Discussion Paper No. 173 (Washington, D.C.: 
International Food Policy Research Institute: 2004). 

[146] United Kingdom National Audit Office, World Food Programme: 
Review of the Arrangements for Reporting Post Delivery Food Losses to 
the Executive Board, WFP/EB.1/2006/6-B/1 (Rome, Italy: 2006). 

[147] World Food Program, Office of Inspections and Investigations, 
Investigation of Allegations of Food Diversions in Somalia, OSDI/51/09-
I 29/09 (2009). 

[148] UN Security Council, Report of the Monitoring Group on Somalia 
Pursuant to Security Council Resolution 1853 (2008) S/2010/91 (2010); 
Report of the Monitoring Group on Somalia and Eritrea Pursuant to 
Security Council Resolution 2002, S/2012/544 (2012). 

[149] Comptroller and Auditor General of India, External Audit 
Reports: World Food Programme's Somalia Operations, WFP/EB.1/2011/5-
B/1 (2011); Report of the External Auditor on the Financial 
Statements: World Food Programme for the Year Ended December 2011, 
WFP/EB.A/2012/6-A/1 (2012). 

[150] World Food Program, Report on Post-Delivery Losses for the 
Period 1 January-31 December 2007, WFP/EB.A/2008/13-A (2008); World 
Food Program, Report on Post-Delivery Losses for the Period 1 January-
31 December 2008, WFP/EB.A/2009/13-A (2009); World Food Program, 
Report on Post-Delivery Losses for the Period 1 January-31 December 
2009, WFP/EB.A/2009/13-A/Rev.2 (2010); World Food Program, Report on 
Post-Delivery Losses for the Period 1 January-31 December 2010, 
WFP/EB.A/2010/13-A (2011); World Food Program, Report on Post-Delivery 
Losses for the Period 1 January-31 December 2011, WFP/EB.A/2012/13-A 
(2012). 

[151] World Food Program, Transport Manual (2011). 

[152] World Food Program, Commodity Movement Processing and Analysis 
System: User Guide (2004). 

[153] World Food Program, Information Note on the Development and 
Qualification of Sampling Methodology and Statistical Analysis for 
Measuring Post-Delivery Losses, WFP/EB.A/2008/INF/6 (2008). 

[154] Ahmed, Rashid, Sharma, and Zohir, Food Aid Distribution in 
Bangladesh: Leakage and Operational Performance. 

[155] Member states are involved in WFP's governance and oversight 
through various bodies and at different levels. 

[156] We are providing the data on WFP expenses for background 
purposes only and therefore did not assess their reliability. 

[157] To support the provision of emergency humanitarian food 
assistance, WFP implemented three special operations in Somalia: (1) 
emergency rehabilitation of logistics and infrastructure, (2) 
humanitarian air service, and (3) logistics and emergency 
telecommunications. 

[End of section] 

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