International Food Aid:

Better Agency Collaboration Needed to Assess and Improve Emergency Food Aid Procurement System

GAO-14-22: Published: Mar 26, 2014. Publicly Released: Mar 26, 2014.

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What GAO Found

Although the U.S. Department of Agriculture (USDA) and U.S. Agency for International Development (USAID) jointly manage international emergency food aid procurement, the agencies disagree about the usefulness of the Web Based Supply Chain Management system (WBSCM) to manage the entire process. WBSCM had significant deficiencies when it was implemented in April 2011, which led USAID to discontinue using it to procure ocean freight for bulk commodities, manage prepositioned or stockpiled commodity inventory, and track food aid shipments. For example, WBSCM was slow and time consuming to use and its process to procure ocean freight for bulk commodities was not compatible with USAID's process to negotiate contracts with ocean freight vendors. USDA currently uses WBSCM to procure food aid commodities, while USAID procures ocean freight using other systems not connected to WBSCM. Since March 2012, USDA has made changes to WBSCM, and USDA officials assert that these changes address some of the problems that led to USAID's decision to discontinue use of the system.

Since USAID uses systems outside of WBSCM, USAID and USDA lack information on individual food aid shipments, which, in turn, hinders USDA's ability to use WBSCM to prepare reports and efficiently file claims against ocean carriers to recover U.S. government funds. GAO's Standards for Internal Control in the Federal Government state that information should be accurately recorded and communicated to those who need it and in a form that enables them to carry out their internal control and other responsibilities. USAID relies on freight forwarders to track and periodically provide information on shipments. In GAO's work for a recent report, we found that freight forwarders did not collect complete or consistent information on emergency food aid shipments. Without accurate information from its freight forwarders, USAID is limited in its ability to generate accurate information on food aid shipments. In addition, GAO found that USAID and its warehouse contractors did not always accurately record all prepositioned commodity inventory transactions. USAID provides this potentially inaccurate information to USDA officials who enter this information into WBSCM to generate quarterly financial statements. Moreover, USAID's data collection outside WBSCM makes it more difficult for USDA to file claims efficiently against ocean freight vendors and recover U.S. funds because USDA officials must manually enter USAID information. According to USDA officials, USDA filed 131 such claims in fiscal year 2012 valued at $1.2 million.

USDA and USAID are not collaborating effectively to resolve their disagreement on the usefulness of WBSCM. In prior work, GAO identified key elements of effective collaboration that can enhance and sustain collaboration among federal agencies. Although USDA and USAID's collaborative efforts have incorporated some of these elements to develop WBSCM, they have not incorporated others. Specifically, USDA and USAID do not agree on the roles and responsibilities of key participants in the process, do not share a defined outcome for their collaboration, and do not have a written agreement stating how the agencies will collaborate. An upcoming functional upgrade of WBSCM offers an opportunity to make substantial changes that are mutually agreeable.

Why GAO Did This Study

USDA and USAID spent about $9.2 billion to provide international emergency food aid during fiscal years 2007-2012. USDA developed WBSCM with USAID's input to manage domestic and international food aid procurements. USDA spent about $187 million to develop and implement the system. GAO was asked to examine the international emergency food aid procurement process.

This report examines (1) the extent to which agencies agree to use WBSCM to manage the process, (2) how the agencies' use of WBSCM and other systems affects USDA's ability to have accurate information, and (3) the extent to which the agencies are collaborating on how to use WBSCM. GAO reviewed the procurement process and observed WBSCM in use. We analyzed inventory spreadsheets used to compile USDA's financial reports. We compared agencies' efforts to collaborate against key elements for effective interagency collaboration.

What GAO Recommends

GAO recommended the agencies work together to ensure USDA receives accurate prepositioned inventory data, improve WBSCM's functionality by testing modified functions, and develop a written agreement that clearly outlines outcomes and roles and responsibilities for using WBSCM. USAID noted its view that prepositioned commodities move off USDA's books and onto those of USAID but agreed in general with our other two recommendations. USDA agreed with our recommendations and stated that the Commodity Credit Corporation retains ownership of prepositioned commodities.

For more information, contact Thomas Melito at (202) 512-9601 or melitot@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: According to USDA officials, USAID continues to provide USDA with data on prepositioning inventories on a quarterly basis, but to date USDA has not been able to independently verify the data that USAID provides.

    Recommendation: To improve the efficiency and accountability of the emergency food aid procurement process, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to improve USDA's ability to account for U.S. government funds by ensuring that USAID provides USDA with accurate prepositioned commodity inventory data that USDA can independently verify.

    Agency Affected: Department of Agriculture

  2. Status: Open

    Comments: USAID officials state that they continue to provide quarterly prepositioning data to USDA and make corrections to the data at USDA officials' request.

    Recommendation: To improve the efficiency and accountability of the emergency food aid procurement process, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to improve USDA's ability to account for U.S. government funds by ensuring that USAID provides USDA with accurate prepositioned commodity inventory data that USDA can independently verify.

    Agency Affected: United States Agency for International Development

  3. Status: Open

    Comments: In July 2015, USDA officials organized a demonstration for USAID officials of a module in WBSCM that USAID could potentially use to effectively track and manage inventory in USAID's prepositioning warehouses. According to USDA officials, this was the first time they were able to demonstrate the functionality of WBSCM's inventory tracking module to USAID officials since the module was introduced.

    Recommendation: To improve the efficiency and accountability of the emergency food aid procurement process, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to assess WBSCM's functionality by testing the international procurement functions that have been modified since April 2011 and documenting the results.

    Agency Affected: Department of Agriculture

  4. Status: Open

    Comments: USAID officials stated they met with USDA officials in July 2015 and observed a demonstration of WBSCM's functions for tracking preposition inventory. USAID officials said they provided feedback on the system's capabilities and recommended modifications. In March 2016, USAID officials stated they are actively participating in meetings with USDA's WBSCM contractor.

    Recommendation: To improve the efficiency and accountability of the emergency food aid procurement process, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to assess WBSCM's functionality by testing the international procurement functions that have been modified since April 2011 and documenting the results.

    Agency Affected: United States Agency for International Development

  5. Status: Open

    Comments: USDA contracted with a third party vendor to assist in the review of the entire food aid supply chain, known as the USDA Business Management Improvement (BMI) project. As processes are reviewed and changed, a USDA official said that USDA and USAID will develop a memorandum of understanding that clearly outlines the roles and responsibility of WBSCM users.

    Recommendation: In preparation for WBSCM's functional upgrade, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to develop a written agreement signed by both agencies that clearly outlines the desired outcomes of their collaboration and the roles and responsibilities of participants, such as freight forwarders.

    Agency Affected: Department of Agriculture

  6. Status: Open

    Comments: USAID officials stated they are actively participating in USDA's Business Management Improvement (BMI) working group, with the aim of identifying and resolving weaknesses and inefficiencies in the procurement process, including those associated with WBSCM.

    Recommendation: In preparation for WBSCM's functional upgrade, the Secretary of Agriculture and Administrator of USAID should direct their staffs to work together to take steps to develop a written agreement signed by both agencies that clearly outlines the desired outcomes of their collaboration and the roles and responsibilities of participants, such as freight forwarders.

    Agency Affected: United States Agency for International Development

 

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