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Frequently Asked Questions Applicable to Food for
Progress
| - Budget - Indirect Cost Recovery - Cash Advances - Amendments - Other Issues - Compliance: Review, Financial Statements, Audits and Closure - Multi-year and Regional Proposals - Commodity & Shipping Issues |
Q: Where does the money come from to pay
transportation and administrative costs?
A: CCC has a
legislated funding cap of $15 million to Cooperating Sponsors (CS) to provide assistance
in the administration, sales, and monitoring or food assistance programs, and
to provide technical assistance for monetization programs to strengthen private
sector agriculture in recipient countries.
Likewise, CCC may not spend more than $40 million on non-commodity costs
such as ocean freight and internal transportation, storage and handling (ITSH)
for donated commodities.
Q: What is ITSH?
A:
"ITSH" refers to costs associated with the internal transportation,
storage, and handling of donated commodities. These costs begin at the point
where CCC delivers the commodities in country and generally include inland rail
or truck transportation from the endpoint of the bill of lading to the
distribution sites, warehouse rent (at one or various warehouses), and handling
(i.e. laborers, repackaging supplies, etc.).
The point where CCC delivers the
commodities for countries with seaport facilities would be the port specified
in the agreement between CCC and the CS.
For landlocked countries, that point would be the initial storage site,
or in the case of bulk commodities, the point of initial discharge, as
specified in the agreement between CCC and the CS.
CCC does not provide dollars to
pay ITSH, except in countries with urgent and extraordinary relief
requirements. CCC does allow CSs to use
monetized funds to cover ITSH costs in countries that do not meet the urgent
and extraordinary requirements.
Q: Why must applicants use CCC’s standardized
administrative budget spreadsheet?
A: CCC created
the standardized budget spreadsheet as a link between the CSs documentation and
CCC’s Food Aid Database System (FADS) so that it could include administrative
costs as a detailed component of the negotiated agreement. The data collected in the standardized
budget spreadsheet is used in the FADS to generate the Attachment C. In order for this to work, all budgets must
ultimately be in the same format and we depend on the CSs to work with us on
providing that information. Submission
of the administrative budget in the standardized format accelerates the
negotiation process, leading to faster cash advances and final reimbursements.
Q: What should applicants do if they need to account
for a cost that does not appear in CCC’s standardized budget
spreadsheet?
A: Select
the line item that most closely resembles the cost and write a
short explanation of exactly what is being requested in the “comments” column
of the budget spreadsheet.
Q: May a CS move funds between the Admin and ITSH
categories?
A: Only
monetized proceeds may be moved from one category to the other, subject to the
limitations described in the agreement.
Because the funding authority for these two categories is different, the
transfer of CCC funds between them is prohibited.
Q: May a CS shift funds between direct cost items?
A: When
necessary to cover unforeseen circumstances, a CS may make adjustments between
the "Direct Costs" items identified in Attachment C of up to 20
percent of the "Total Direct Costs" approved or $50,000, whichever is
less, without any further approval provided, however, that the Cooperating
Sponsor may not make any adjustment to the dollar amounts provided by the CCC
for items designated "Activities" or "Internal
Transportation, Storage and Handling (ITSH)," if any.
Any adjustments beyond these
limits must be specifically approved by the General Sales Manager through the amendment
process. This applies to all costs, even those
not used in the original budget.
Q:
What is ICR?
A:
"ICR" stands for "Indirect Cost Recovery." ICR is a
mechanism that allows a CS to recover costs associated with running an
organization that cannot be directly linked and billed to a specific project.
Q:
What is NICRA?
A:
"NICRA" stands for "Negotiated Indirect Cost Recovery
Agreement." This is an agreement that determines the rate and the base of
application for which a CS can recover indirect costs. The cognizant U.S.
government agency takes the lead on negotiating these agreements. CCC will
accept a NICRA rate negotiated by USAID or another U.S. Government agency.
Q:
What should a CS do if it does not have a NICRA?
A: The CS should inform the Office of the Director of the Programming Division (PD) in writing that they do not have a NICRA and USDA will arrange to be the cognizant U.S. government agency to negotiate the rate. The CS should notify USDA as soon as possible, as the negotiation process can be lengthy. A rate of 0% will be used as the default until the NICRA is negotiated.
Q:
On what may a CS apply ICR?
A: The CS
may apply ICR on allowable items in accordance with their agreement, i.e. NICRA.
Q:
Can a CS request and receive additional funds for ICR if actual rates
associated with its NICRA replace any provisional rates in effect when the
agreement was signed?
A: A CS can
request additional funds from monetization proceeds due to ICR rate increases;
however, CCC's response will rely on the CS's ability to show that removing
project funds will not adversly affect the projects. Due to fiscal year program
constraints, CCC/USDA funds are not available for increases in indirect costs.
Q:
If the actual ICR rate associated with a CS’ NICRA decreases, does the CS have
to recalculate its ICR application and return overpayments to CCC?
A: In the
case of dollar funding from CCC, if the rate in the NICRA declines and all of
the dollars are not expended, CCC would subtract the remaining dollars from the
final cash disbursement. Note that ICR is applied at the time of actual
expenditure.
In the case of funding from
monetization, CCC requires that any excess funding derived from a decreased
ICR rate be put into the approved projects.
This change must be approved by the General Sales Manager through the
amendment process.
Q: When may a CS request its first cash advance?
A: The first
cash advance may be requested at the time the agreement is signed. Subsequent advances (continuing until 85% of
the total budget has been disbursed) may be requested 60 days after the date of
the previous advance. Note that a CS
has 180 days to expend each cash advance.
CCC normally advances the funds
through a wire transfer.
Q: How large may the CS’ first cash advance be?
A: CSs may
request an advance of up to 85 percent of the total approved CCC funds. The request must not exceed the amount that
will be spent within 180 days of receipt.
CSs that have not implemented a program previously under Food for
Progress are limited to a 50 percent cash advance.
Q: When may a CS request its final reimbursement?
A: The final
reimbursement may be requested once the CS has expended budgeted funds (the 85%
that was advanced from CCC, plus up to an additional 15% for which the CS is to
be reimbursed). The reimbursement will
be processed only if all reports have been submitted and CCC determines that
the agreement can be closed.
Q: How does interest earned on CCC funds affect the
CS’ final reimbursement?
A: Interest earned will be subtracted from the final
reimbursement amount requested.
Q: When does an agreement need to be amended?
A: Food for
Progress agreements set forth the rights and obligations of both the CCC and
the CS. As such, an
agreement must be amended when the CS wants to do something that is different
from what is stated in the agreement, usually as a result of some change in the
situation after the agreement has been signed.
For example, there might have been a significant change in the proceeds
or a CS might want to use a smaller amount of the monetization proceeds for one
activity and a larger amount for another activity than was stated in the agreement.
IMPORTANT: The agreement must be
amended BEFORE the CS takes an action that is different from what is specified
in the agreement. If the CS proceeds
before an amendment is signed, this is a violation of the agreement. The regulations provide that, if a CS uses
the donated commodities or sales proceeds for a purpose not permitted by the
agreement, CCC will require the CS to compensate it for the value of the
commodity misused and freight charges.
Q: How is the amendment process initiated?
A: Requests
for amendments
must be in writing. They cannot be done orally or by e-mail. CSs are encouraged to discuss the proposed
amendment with staff before submitting. All amendment requests must be signed by
a person who has the legal authority to bind the CS.
The CS initiates the process by
sending a letter to the Director, PD, specifying EXACTLY what the CS wants
to change in the agreement. Before
doing so, the CS should carefully read the entire agreement (including
Attachment A) and identify all sections that would have to be changed if its
request were approved. If the changes
in Attachment A would be extensive, the CS should include a suggested revision
of Attachment A that incorporates its changes.
The CS should also include a
detailed explanation of why it is requesting the amendment.
Q: Who signs an amendment?
A: The
amendment must be signed by a person who is authorized to do so.
In the case of the CS, it must be
a person who has the legal authority to bind the CS. This will generally be the same person who signed the original
Agreement or the person who now holds the same position. If it is a person in a different position,
that person must have the legal authority to bind the CS.
In the case of CCC, this is the
General Sales Manager or another officer of the CCC.
Q: Does the Fly America Act apply to CCC programs?
A: The Fly
America Act applies to airline tickets purchased with dollars from CCC. Airline tickets purchased in a foreign
country with monetization proceeds are not bound by the Fly America Act.
Q: Does the Buy America Act apply to CCC programs?
A: No, this
is not a requirement within our regulations.
Q: What role do Agricultural Attaches/Counselors play in the proposal approval process?
A: CCC encourages CSs to consult with Agricultural
Attaches and Counselors regarding program ideas and to obtain their input. However, proposals must be submitted to PD
and not to the Attaches/Counselors.
PD will share the proposals with Posts during the evaluation process. Posts should agree that the commodity and
program make sense. CCC will consult
with other offices in the U.S. Embassy when an agricultural attaché is not
assigned.
Q:
What regulations, circulars, policies and procedures apply to each USDA
administered food assistance program?
A:
The following table illustrates the regulations, circulars, policies and
procedures that currently apply to each USDA administered food assistance
program. (N/A stands for 'Not Applicable’).
Please note that 7 CFR 3019 and 7 CRF 3015 will be combined into 7 CFR
3020 very shortly. Once this
happens, this table will be revised to reflect this change.
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SECTION
416(B) (CCC
Authority*) |
FOOD FOR PROGRESS (CCC
Authority*) |
MCGOVERN-DOLE (USDA
Authority*) |
|
7 CFR 1499** |
Applies |
Applies |
N/A |
|
7 CFR 1599** |
N/A |
N/A |
Applies |
|
7 CFR 3019 |
N/A |
N/A |
Applies |
|
7 CFR 3015 (Specific
Parts only – currently only 3015.205) |
N/A |
N/A |
Applies |
|
7 CFR 3052 |
N/A |
N/A |
Applies |
|
OMB A-133 |
Applies as indicated in CFR 1499 |
Applies as indicated in CFR 1499 |
Applies |
|
OMB-A-122 |
N/A |
N/A |
Applies as incorporated in CFR 3019 |
|
OMB-A-110 |
N/A |
N/A |
Applies as incorporated in CFR 3019 |
|
Award Terms &
Conditions (spelled out in each signed Agreement) |
Applies |
Applies |
Applies |
|
Fly America Act |
Applies |
Applies |
Applies |
|
Buy America Act |
N/A |
N/A |
N/A |
* Section 416(b) and FFP are conducted under Commodity Credit Corporation regulations while McGovern-Dole is conducted under USDA/FAS regulations. The administrating authority directly impacts the applicability of regulations.
** Title 7 of the Code of Federal Regulations (CFR) is dedicated to Agriculture. Within Title 7, the 1400 series of the CFR is earmarked for Commodity Credit Corporation program regulations and the 1500 series is for Foreign Agricultural Service program regulations.
COMPLIANCE: REVIEWS, REPORTS, FINANCIAL STATEMENTS, AUDITS AND CLOSURE
Q: How long should the CS retain records?
A: To meet requirements of 7 CFR Part 1499.16, Foreign
Donation of Agricultural Commodities, the CS will maintain records and
documents for a period of three (3) years from the date of export of the
commodities in a manner which will accurately reflect all transactions
pertaining to the receipt, transportation, storage, and distribution of the
commodities, and to the receipt and disbursement of currency generated from any
sales. The Government of the United
States will be allowed access to inspect projects, records, procedures, and
methods pertaining to the generation of sales proceeds and disbursements to
ensure accountability. Furthermore, the
CS or PVO will allow and facilitate access to all sites of commodity handling
and storage and to all commodity records related to this agreement by
representatives of the Government of the United States, including contract
monitoring and financial analysis staff.
Q: When does a CS submit reports?
A: The CS will
submit a report semiannually to PD and to the USDA Foreign Agricultural
Services staff or the designated representative at the U.S. Mission in the
recipient country. Reports may be
submitted by mail or through email.
The due dates for these required reports (Form CCC-620 and
where applicable, CCC-621) are indicated in the agreement. The date the agreement was signed by CCC
determines the dates that various reports are due to PD. Reviews verify that impact and expenditures
are in accordance with terms of the agreement.
Late or incomplete reports can mean delay in processing cash advances
and affect future programming.
Q: Will the CS’ quarterly financial reports be
reviewed?
A: PD reviews quarterly financial reports to ensure
administrative budgets, whether CCC-funded or monetized, are used for intended
purposes and within specified time frames.
Q: What about audits?
A: In order to comply with 7 CFR Part 1499.17, all Food
for Progress agreements signed after December 31, 1997, require annual audits
which must be undertaken in accordance with OMB Circular A-133. The audits must meet CCC standards. Funds to cover annual audits must be
included in the proposed project budget.
USDA requires that copies of annual audits be submitted to PD’s Office
of the Director.
Q: What is involved in closing out an
agreement?
A: The CCC has delegated PD the fiduciary responsibility to monitor, evaluate, and
close all USDA foreign food donation program agreements.
The final review and closure of agreements is an integral
part of the foreign food donation process.
To close an agreement, PD must agree that:
(1)
all required reports, including annual audits, have been
submitted and deemed acceptable;
(2)
there has been a request for final reimbursement;
(3)
claims against the final reimbursement have been submitted;
and
(4)
all terms and conditions of the signed agreement must have
been met.
Once all of the above have been met, the CS will receive an
agreement closure letter.
MULTI-YEAR AND REGIONAL PROPOSALS
Q: Are multi-year, regional proposals acceptable?
A: Yes. It is
possible to receive approval for both multi-year and regional proposals.
In a multi-year proposal, all commodities may be delivered
in the first year or commodities may be shipped during each year of the proposal. PD will review the performance of CS’s
during the agreement and can suspend additional shipments if the performance is
not adequate. Commodities obligated to
a multi-year proposal will count against the fiscal year in which the
deliveries occur.
Q: How should multi-year proposals
be presented?
A: CSs should present the information for the entire program.
All
deliveries of the commodities and requested timeframes must be included.
Q: Will CCC label food assistance packages with
"Best Used by Dates?
A: CCC will not provide "Best Used by Dates"
unless they are required in accordance with specific country regulations.
Q: Who should pay duty on monetized commodities?
A: The CS should include clauses in the sales contracts to state which party will pay duties or taxes.
Q:
What transportation costs will USDA pay for?
A: Non-landlocked Countries: USDA will pay for ocean transportation to the designated discharge port. If the commodities are being shipped bulk and the country does not have a port that can accommodate bulk commodities, USDA will pay for ocean transportation to the nearest port that can receive bulk commodities and pay for overland or inland waterway transport of the bulk commodity to a point of initial discharge within the destination country.
Landlocked Countries: USDA will pay for ocean transportation to a designated discharge port and inland transportation to the point of initial discharge within the recipient country.
CONSORTIA SUBMISSIONS
Q: How should a consortium present
its proposal?
A:
Each consortium member must
submit a proposal. The lead member must
request the commodities and include descriptions of any sales process and
assurances that the sales will not affect local production or commercial
sales. For other members, they may
indicate “Not applicable” for sections that only apply to the lead member.
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