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None   FOREIGNFOODAIDDONATIONPROGRAM  ^  I.  PROGRAMOBJECTIVES   \ E.` hp x (#X(#ETheUnitedStatesAgencyforInternationalDevelopment(_USAID_)donatesagricultural   commoditiestoforeigncountriesunderTitleIIoftheAgriculturalTradeDevelopmentand   AssistanceActof1954(Pub.L.480,TitleII)(7_USC_Ԁ1722).Thisprogramincludesdonated   commodities,monetizationfromthesaleofcommodities,andpaymentsreferredtoasSection l  202(e)grants(7_USC_Ԁ1722(e)). R  B+ ` hp x (#X(#B II.  PROGRAMPROCEDURES  P  E.` hp x (#X(#E GeneralOverview    Astheprimaryconduitofhumanitarianassistancefor_USAID_,theBureauofHumanitarian \  Response(_BHR_)ischargedwiththeoverallresponsibilityfor_USAID_sresponseto B  humanitariancrises,bothnaturalandcomplex.TheOfficeofFoodForPeace(_FFP_)manages (x  Pub.L.480,TitleII(TitleII)provisionsforagriculturalcommoditiesfoodassistancethatis ^  channeledtoforeigncountries.FoodassistanceisalsoauthorizedanddeliveredunderTitlesI D andIIIofPub.L.480,aswellasunderotherlegislation.ThisSupplementcoversonlyfood * assistancedeliveredunderTitleII.  _USAID_Ԁmaytransferagriculturalcommoditiestoaddressfamineorotherurgentorextraordinary n reliefrequirements;combatmalnutrition,especiallyinchildrenandmothers;carryoutactivities T thatattempttoalleviatethecausesofhunger,mortalityandmorbidity;promoteeconomicand : communitydevelopment;promotesoundenvironmentalpractices;andcarryoutfeeding  p programs.Agriculturalcommoditiesmaybeprovidedtomeetemergencyfoodneedsthrough V foreigngovernmentsandprivateorpublicorganizations,includingintergovernmental < organizations.Agriculturalcommoditiesalsomaybeprovidedfornonemergencyassistance " throughprivatevoluntaryorganizationsorcooperativeswhichare,totheextentpracticable,  registeredwith_USAID_,andthroughintergovernmentalorganizations.    CooperatingSponsoristhetermusedtodefinetheorganizationenteringintoanagreement L" with_USAID_Ԁfortheuseofagriculturalcommoditiesorfunds.NongovernmentalCooperating 2# Sponsorsincludeprivatevoluntaryorganizations,cooperatives,orpublicagencies.TitleII $h assistanceisprovidedtoU.S.basedCooperatingSponsorsfor(a)developmentprograms,and $N  (b)emergencyprograms.Activitiesunderdevelopmentprogramsincludepilotprogramsfor %4! smallholderagriculture,supportingmarketliberalizationthroughpolicychange,nutritionand &" otherchildsurvivalprograms,communitydevelopment,suchaswaterandsanitationand '#  environmentalrestoration,orsmallscaleinfrastructuredevelopment.AportionofTitleII (#! commoditiescanbemonetizedbyCooperatingSponsorstofundcomplementarydevelopment |)$" interventionstoenhancetheimpactoffoodprogramsandcontributetofoodsecurity. b*%# Emergencyprogramsincludedirectfeedingactivitiestorespondtoshortterm,unanticipated H+&$ foodshortages.Monetizationoffoodaidunderemergencyprogramsoccurstofund .,~'% complementaryactivitiessuchasdistribution,repackaging,andwetfeedinginrefugeecamps. -d(&  ProgramOperation   General ^ EachCooperatingSponsorisrequiredtosubmitto_USAID_ԀforapprovalanOperationalPlan  \ whichincludesadescriptionofeachoftheprogramsitsponsorsorproposestosponsor.This B planincludesprogrampurposesandgoals;criteriaformeasuringprogrameffectiveness;a  ( descriptionoftheactivitiesforwhichcommodities,monetizedproceeds,orprogramincomewill   beprovidedorused;andotherspecificprovisionsasrequiredby_USAID_.IfaCooperating   SponsorsubmitsamultiyearOperationalPlanthatisapprovedby_USAID_,theOperationalPlan   providedwithanAnnualEstimateofRequirements(_AER_)eachsubsequentyearwillonlycover p  thosecomponentswhichrequireupdatingortheCooperatingSponsorproposestochange. V  OperationalPlansarerequiredforallnongovernmentalCooperatingSponsorsemergency <  programsalongwiththe_AER_;however,emergencysituationsmaynotpermitthesamedegree "r  ofdetailandcertaintyofanalysisthatisexpectedinplanningTitleIIdevelopmentprograms(22 X  _CFR_Ԁsection211.5). >  _USAID_ԀusesTransferAuthorizationtomakeanawardforcommoditiesandsupportingcosts.  RecipientAgencies J ACooperatingSponsormayenterintoagreementswithRecipientAgencies(e.g.,schools, H institutions,welfareagencies,disasterrelieforganizations,andpublicorprivateagencies)forthe . deliveryofprogramservices.Suchanagreementmustbeinplacepriortothetransferofany  commodities,monetizedproceeds,orprogramincometotherecipientagency.Theagreement  mustrequiretherecipientagencytocompensatetheCooperatingSponsorforanyassets  generatedbytheforegoingsourcesthatarenotusedforpurposesexpresslyprovidedforinthe v agreement,orthatarelost,damaged,ormisusedastheresultoftherecipientagencysfailureto \ exercisereasonablecare(22_CFR_Ԁsections211.2(s)and211.3(c)). B Monetization @ Monetization(thesellingofagriculturalcommoditiestoobtainforeigncurrencyforuseinU.S.   assistanceprograms)isacriticalresourceforCooperatingSponsors.TheCooperatingSponsor ! remainsresponsibleforthecommodities,monetizedproceeds,andprogramincomein j" accordancewiththeOperationalPlanorTransferAuthorization(22_CFR_Ԁsection211.3(c)(3)). P#  OtherResources  $N  Inadditiontocommodities(includingoceanandinlandfreightcosts)andmonetizationproceeds, &! cashgrantsaremadeavailabletoCooperatingSponsorsforestablishingnewprogramsand '" meetingthespecificadministrative,management,personnel,andInternalTransportation, x(#  StorageandHandling(_ITSH_)costsoftheprogram.Thesecostsarecommonlyreferredtoas ^)$!  Section202(e)grants(7_USC_Ԁ1722(e)). D*%" & 6  SourceofGoverningRequirements   ThisprogramisauthorizedunderTitleIIoftheAgriculturalTradeDevelopmentandAssistance ^ Actof1954(Pub.L.480,TitleII)(7_USC_Ԁ1722).Implementingregulationsarefoundat22 D _CFR_Ԁpart211. *z  AvailabilityofOtherProgramInformation   ( _USAID_ԀmaintainsontheInternetapagetitled FoodforPeace   (4` cO  5  +  http://www.usaid.gov/our_work/hu% a manitarian_assistance/ffp/+$d  6}$c$d  7 6$)whichprovidesprogramlaws, l  regulations,andothergeneralinformation. R  B+ ` hp x (#X(#B III.  COMPLIANCEREQUIREMENTS '6 #" P  E.` hp x (#X(#E IndevelopingtheauditprocedurestotestcompliancewiththerequirementsforaFederal   program,theauditorshouldfirstlooktoPart2,MatrixofComplianceRequirements,to   identifywhichofthe14typesofcompliancerequirementsdescribedinPart3are z  applicableandthenlooktoParts3and4forthedetailsoftherequirements. `  B+ ` hp x (#X(#B&  A.  ActivitiesAllowedorUnallowed  ^    B+` ` hp x (#X(#B1. ` UseofFunds    ?( ` hp x (#` X(#?a. General󀄀TheOperationalPlanandTransferAuthorizationsetforththe j descriptionoftheactivitiesforwhichcommodities,monetizedproceeds, P orprogramincomeshallbeused.') 6 b. Section202(e)Grants󀄀Fundsprovidedby_USAID_Ԁunderthisprovisionof 4 TitleIImaybeusedforactivitiesincluding:(1)directprogramcostsofa  TitleIIprogram"administrative,management,distribution,andother  programimplementationcosts;(2)improvingtheimpactoffood  aid"baselinestudiesandtechnicalassistance;and(3)costsof | implementingauditandevaluationrecommendations. b  c. InternalTransportation,StorageandHandling󀄀Emergencyprogramsto "` cover_ITSH_Ԁcosts(7_USC_Ԁ1736). "F  E.` ` hp x (# ` X(#E2. ` UseofCommoditiesandMonetizationProceeds $  E. ` hp x (#` X(#Ea. Exceptas_USAID_Ԁmayotherwiseagreeinwriting,agricultural R&! commoditiesdonatedby_USAID_Ԁshallnotbedistributed,handled,or 8'" allocatedbyanymilitaryforces(22_CFR_Ԁsection211.5(e)). (n# b. Withinthelimitsofthetotalamountofcommodities,monetizedproceeds, )% andprogramincomeasapprovedby_USAID_ԀintheOperationalPlanor *& TransferAuthorization,theCooperatingSponsormayincreaseordecrease +&   bynottoexceed10percenttheamountofcommodities,monetized ~,'! proceeds,orprogramincomeallocatedtoapprovedprogramcategoriesor  componentsoftheOperationalPlan(22_CFR_Ԁsection211.5(a)).   c. ACooperatingSponsorisrequiredtoprovideproperstorage,care,and D handlingofcommodities.Indeterminingwhethertherewasaproper *z exerciseoftheCooperatingSponsorsresponsibility,_USAID_Ԁconsiders  ` normalcommercialpracticesinthecountryofdistributionandthe  F problemsassociatedwithcarryingoutprogramsindevelopingcountries  , (22_CFR_Ԁsection211.9(d)).   d. CooperatingSponsorsarenotrequiredtomonitor,manage,reporton,or p  accountforthedistributionoruseofcommoditiesaftertitletothe V  commoditieshaspassedtobuyersorotherthirdpartiespursuanttoasale <  underamonetizationprogramandallsalesproceedshavebeenfully "r  depositedinthespecialinterestbearingaccountestablishedbythe X  CooperatingSponsorformonetizedproceeds(22_CFR_Ԁsection211.5(j)). >  e. Monetizedproceedsmaynotbeusedtopayfortheperformanceof  abortionsasamethodoffamilyplanningortomotivateorcoerceany  persontopracticeabortions(22_CFR_Ԁsection211.5(k)(4)). h   B+ ` hp x (# X(#B J.  ProgramIncome  f  XE.` hp x (#X(#EProgramincomemeansgrossincomeearnedbytheCooperatingSponsorfromactivities  supportedundertheapprovedprogramduringtheprogramperiod,including,butnot  limitedto,interestearnedondepositsofmonetizedproceeds,revenuefromincome  generatingactivities,fundsaccruingfromthesaleofcontainersandnominalvoluntary v contributionsbyrecipientsmadeonthebasisofabilitytopay.Monetizedproceedsare \ notconsideredprogramincome(22_CFR_Ԁsections211.2(o)and211.2(s)). B ProgramincomemaybeusedbyCooperatingSponsorsforactivitiesspecifiedin22_CFR_ @ section211.5(k),includingthetransportanddistributionofthedonatedcommodities; & implementingincomegeneratingcommunitydevelopment,health,nutrition,andother   developmentalactivities;makinginvestmentswith_USAID_Ԁapproval;andimprovingtheir ! financialandothermanagementsystems(22_CFR_Ԁsection211.5(k)). " Programincomemaynotbeusedtopayfortheperformanceofabortionsasamethodof 6$ familyplanningortomotivateorcoerceanypersontopracticeabortions(22_CFR_ %l  section211.5(k)(4)). &R!  XB+ ` hp x (#X(#B& B L.  Reporting  '#   X?( ` hp x (#X(#? 1. ` FinancialReporting  ^)$!   XE. ` hp x (#` X(#Ea. SF269,FinancialStatusReport󀄀Applicable'B'7@  +\&" b. SF270,RequestforAdvanceorReimbursement󀄀Applicable , (# c. SF271,OutlayReportandRequestforReimbursementforConstruction  ProgramsNotApplicable  d. SF272,FederalCashTransactionsReport󀄀Applicable D  E.` ` hp x (# X(#E 2. ` PerformanceReporting 󀄀NotApplicable B  3. ` SpecialReporting 󀄀NotApplicable     B+ ` hp x (#` X(#B&  N.  SpecialTestsandProvisions N   X?( ` hp x (#X(#?1. ` RecipientAgencies   L  E.` hp x (#` X(#E ComplianceRequirement 󀄀CooperatingSponsorsareresponsiblefordeterminingthat   RecipientAgenciestowhomtheydistributecommoditiesareeligibleinaccordancewith   theOperationalPlanorTransferAuthorizationand22_CFR_Ԁsection211.'N mD v  Priortothetransferofcommodities,monetizedproceedsorprogramincometoa $t  RecipientAgency,theCooperatingSponsorisrequiredtoenterintoawrittenagreement  Z  that(a)describestheapprovedusesofresourcesprovided,(b)requirestheRecipient @  AgencytopaytheCooperatingSponsorthevalueofanyresourcesthatareusedfor &  purposesnotpermittedundertheagreementorthatarelost,damagedormisusedasa   resultoftheRecipientAgencysfailuretoexercisereasonablecareoftransferred  resources,and(c)incorporatebyreferenceorotherwisethetermsandconditionsset  forthin22_CFR_Ԁpart211(22_CFR_Ԁsection211.3(c)). n InenteringintoagreementswithRecipientAgenciesforthetransferofcommodities, l monetizedproceeds,orprogramincome,theCooperatingSponsorremainsresponsible R forsuchresourcestransferredinaccordancewiththeOperationalPlanorTransfer 8 Authorizationand22_CFR_Ԁpart211(22_CFR_Ԁsection211.3(c)(3)).Inmonitoring  RecipientAgencies,theCooperatingSponsorisrequiredtoprovideadequatesupervisory  personnelfortheefficientoperationoftheprogram,includingpersonnelto(a)plan,  organize,implement,control,andevaluateprogramsinvolvingdistributionof   commoditiesoruseofmonetizedproceedsandprogramincome;(b)makewarehouse f! inspections,physicalinventories,andendusechecksoffoodorfunds,and(c)review L" booksandrecordsmaintainedbyRecipientAgenciesthatreceivemonetizedproceeds 2# and/orprogramincome(22_CFR_Ԁsection211.5(b)). $h  AuditObjective 󀄀Determinewhether:(1)theCooperatingSponsorenteredintowritten %! agreementswiththeRecipientAgencies;(2)theuseoftheRecipientAgencieswas &! consistentwiththeOperationalPlanandTransferAuthorization;and(3)theCooperating '" SponsormonitoredtheactivitiesofRecipientAgenciestoensureproperperformanceof x(#   assignedactivitiesanduseofcommodities,monetizedproceeds,andprogramincome. ^)$! & (  SuggestedAuditProcedures     XE.` ` hp x (#X(#ESelectasampleofRecipientAgenciesandascertainif: ^  E. ` hp x (#` X(#Ea. TheCooperatingSponsorenteredintoawrittenagreementwiththe  \ RecipientAgency.'(#Q B b. TheCooperatingSponsorsuseoftheRecipientAgencywasconsistent   withtheOperationalPlanandTransferAuthorization.   c. TheCooperatingSponsorappropriatelymonitoredtheactivitiesofthe 4  RecipientAgencytoensureproperperformanceofassignedactivitiesand j  useofcommodities,monetizedproceeds,andprogramincome. P    E.` hp x (# X(#E