U.S. International Food Assistance: An Overview

Summary: The United States has played a leading role in global efforts to alleviate hunger and improve food security. U.S. international food assistance programs provide support through two distinct methods: (1) in-kind aid, which ships U.S. commodities to regions in need, and (2) cash-based assistance, which provides recipients with vouchers, direct cash transfers, or locally procured foods.

Summary: The current suite of international food assistance programs began with the Food for Peace Act (P.L. 83-480), commonly referred to as "P.L. 480," which established the Food for Peace program (FFP). Congress authorizes most food assistance programs in periodic farm bills. However, Congress authorized the Emergency Food Security Program (EFSP)—a newer, cash-based food assistance program—in the Global Food Security Act of 2016 (P.L. 114-195). Congress funds international food assistance programs through annual agriculture appropriations and state and foreign operations (SFOPS) appropriations bills. Since 2007, annual international food assistance outlays averaged $2.6 billion. In FY2016, FFP Title II and EFSP accounted for 87% of total international food assistance outlays. The U.S. Agency for International Development (USAID) and the U.S. Department of Agriculture (USDA) administer U.S. international food assistance programs.

Summary: Historically, the United States provided international food assistance exclusively through in-kind aid. Since the mid-1980s, FFP Title II, which provides in-kind donations, has been the dominant U.S. food aid program. (The name "FFP Title II" refers to Title II of the Food for Peace Act, in which Congress first authorized the program.) In the late 2000s, U.S. international food assistance began to shift toward a combination of in-kind and cash-based assistance. This is largely due to the Obama Administration creating the cash-based EFSP in 2010 to complement FFP Title II emergency aid. EFSP is used in conditions when in-kind aid cannot arrive soon enough or could potentially disrupt local markets or when it is unsafe to operate in conflict zones.

Summary: Despite the growth in cash-based assistance, U.S. international food assistance still relies predominantly on in-kind aid. Many other countries with international food assistance programs have converted primarily to cash-based assistance. U.S. reliance on in-kind aid has become controversial due to its potential to disrupt local markets and cost more than procuring food locally. At the same time, lack of reliable suppliers and poor infrastructure in recipient countries may limit the efficacy and efficiency of cash-based assistance. Also, in poorly controlled settings, cash transfers or food vouchers could be stolen or used by recipients to purchase nonfood items. Agricultural cargo preference (ACP)—the requirement that 50% of all in-kind aid be shipped on U.S.-flag ships—has also become controversial due to findings that it can lead to higher transportation costs and longer delivery times. Higher costs may be partially due to higher wages and better working conditions on U.S.-flag vessels compared to foreign-flag vessels. ACP may also contribute to maintaining a U.S.-flag merchant marine to provide sealift capacity during wartime or national emergencies.

Summary: The Trump Administration and certain Members of Congress have proposed changes to the structure and intent of international food assistance programs. Some Members of Congress proposed changes in the House and Senate 2018 farm bills (H.R. 2). These proposed changes include amending requirements for some international food assistance programs and expanding flexibility to use cash-based assistance. Other proposed legislation would address ACP, expand flexibility to use cash-based assistance, and consolidate and alter funding for most international food assistance programs.

The United States has played a leading role in global efforts to alleviate hunger and improve food security. Current food assistance programs originated in 1954 with the passage of what is now named the Food for Peace Act (FFPA, P.L. 83-480). This legislation, commonly referred to as "P.L. 480," established the Food for Peace program (FFP). Originally, FFP had multiple aims: (1) to provide food to undernourished people abroad, (2) to reduce U.S. stocks of surplus grains that had accumulated under U.S. Department of Agriculture (USDA) commodity support programs, and (3) to expand potential markets for U.S. food commodities. Since the end of the Cold War, U.S. food assistance goals have shifted away from the latter two aims and more toward emergency response and supporting recipient country agriculture markets.

For example, in 2018 the United States provided food assistance to food-insecure people in Ethiopia. This food assistance targeted those affected by flooding in spring 2018 as well as refugees who had fled to Ethiopia from neighboring countries, such as South Sudan.

For most of its existence, U.S. international food assistance provided exclusively i n-kind aid —commodities sourced in the United States and shipped to recipient countries. In recent decades, U.S. food assistance programs have shifted from exclusively in-kind to a combination of in-kind and cash-based assistance, such as locally procured food, cash transfers, or vouchers. More recently, Feed the Future (FTF), a government-wide initiative that coordinates U.S. agriculture and food assistance, has increasingly aligned non-emergency food assistance with other food-security-related programs such as agricultural development and global health programs.

U.S. law requires federal international food assistance to be provided primarily through in-kind aid. Opinions among policymakers and interested parties differ over whether such requirements make food assistance programs less efficient or whether they have substantive benefits, such as lowering the risk of recipients using assistance for unintended purposes and preserving the coalition of nonprofit organizations, farmers, and shippers who support these programs.

This report provides an overview of U.S. international food assistance programs, including authorizing legislation, historical funding trends, and common program features and requirements. It also discusses issues for congressional consideration and recent legislative proposals. This report focuses on international food assistance programs that currently receive funding from Congress.

Two main legislative tracks authorize international food assistance programs, each with different authorizing histories and congressional committees responsible for funding. First, the FFPA authorizes traditional food assistance programs based primarily on in-kind aid. These programs (explained later in this section) include FFP Title II, FFP Title V, the McGovern-Dole International Food for Education and Child Nutrition Program, the Bill Emerson Humanitarian Trust, and Food for Progress. Congress has reauthorized the FFPA through periodic farm bills, most recently the 2014 farm bill ( P.L. 113-79 ). These programs are under the jurisdiction of the House and Senate Agriculture Committees. Second, Congress permanently authorized the Emergency Food Security Program (EFSP) as part of the Foreign Assistance Act of 1961 (FAA, P.L. 87-195 ) in the Global Food Security Act of 2016 (GFSA, P.L. 114-195 ). EFSP is under the jurisdiction of the House Foreign Affairs and Senate Foreign Relations Committees. The U.S. Department of Agriculture (USDA) and the U.S. Agency for International Development (USAID) implement international food assistance programs. USDA procures commodities for all food assistance programs, regardless of which agency implements the program. Table 1 lists each active food assistance program along with its primary delivery method, statutory authority, source of funding, and implementing agency.

Other key participants in delivering international food assistance are:

Non governmental or intergovernmental organizations (NGOs or IOs) : An NGO is a private organization that provides services or advocates on public policy issues, such as an organization that works to solve development problems at the local level. An IO is a multilateral institution such as the U.N. World Food Program. NGOs and IOs implement food assistance projects in countries of need, with oversight and program funding from USAID or USDA. The Commodity Credit Corporation (CCC) : The CCC is a government-owned financial institution, overseen by USDA, which procures commodities, processes financial transactions, and finances domestic and international programs to support U.S. agriculture.

The U.S. government provides food assistance through two distinct methods:

1. In-kind contributions are commodities produced in the United States and shipped to the target region. Some shelf-stable (i.e., not easily spoiled) U.S. commodities can be prepositioned in storage facilities in the United States and abroad to enable quicker response to emergencies. Monetization is a form of in-kind aid in which the entity sells U.S. commodities on local markets in developing countries and uses the proceeds to fund development projects. 2. Cash-based assistance provides direct cash transfers or food vouchers to beneficiaries. Under local and regional procurement (LRP), NGOs or IOs purchase food in the country or region where it is to be distributed to beneficiaries rather than in the United States.

The Obama Administration created Feed the Future (FTF) in 2010. FTF is a government-wide initiative that aims to improve U.S. international food security efforts by uniting all food-security related programs under common goals and evaluation criteria. Because FTF focuses on long-term food security, it does not coordinate emergency food assistance activities. However, non-emergency food assistance activities—such as McGovern-Dole, Food for Progress, Farmer-to-Farmer, and non-emergency assistance provided under FFP Title II—are part of FTF. Under FTF, non-emergency food assistance programs coordinate activities with other food security efforts, such as global health and agricultural development programs. Non-emergency food assistance programs also submit data to collaborative FTF evaluations.

Under FFP Title II, the federal government donates U.S.-sourced commodities to a qualifying IO or NGO to be distributed directly to beneficiaries or monetized to fund development projects. Congress provides funding for Title II annually through agriculture appropriations bills. The majority of Title II funds are used for emergency assistance, such as responding to conflicts or natural disasters. In FY2017, 76% of Title II funds supported emergency assistance, and the remaining 24% supported non-emergency assistance.

USAID administers FFP Title II. NGOs and IOs apply to USAID to implement a project under FFP Title II. Once USAID approves a Title II project, the implementing organization requests commodities. USDA procures U.S.-produced commodities on the open market. The implementing organization works with USAID to arrange shipment of commodities by ocean freight in accordance with agricultural cargo preference laws discussed in the " Common Features and Requirements " section.

Farmer-to-Farmer (Food for Peace Title V)

Congress established the John Ogonowski and Doug Bereuter Farmer-to-Farmer program in the 1966 FFPA reauthorization (P.L. 89-808). Congress first funded the program in 1985, when it established minimum required funding in the 1985 farm bill ( P.L. 99-198 ). This minimum funding was 0.1% of the annual funds appropriated for Food for Peace programs. The Farmer-to-Farmer program's funding is discretionary and tied to annual total funding for Food for Peace programs. Congress has periodically updated minimum required funding levels in the farm bill. The 2014 farm bill ( P.L. 113-79 ) authorized minimum funding of the greater of $15 million or 0.6% of the funds appropriated for Food for Peace programs. From FY2014 to FY2017, Congress provided $15 million per year in funding for the program.

USAID administers the Farmer-to-Farmer program, which finances short-term (typically two- to four-week) volunteer placements in developing countries to provide technical assistance to farmers. Volunteers are U.S. citizens drawn from farming, agribusiness, universities, and nonprofit organizations. USAID selects eligible NGOs to coordinate volunteer placements. Potential volunteers apply directly to the coordinating NGOs and are selected based on the needs of the individual or organization in the developing country. The Farmer-to-Farmer program does not provide in-kind or cash-based food assistance. It is included in this discussion because it is part of the suite of programs the FFPA authorizes and receives funding through appropriations for Food for Peace programs.

McGovern-Dole International Food for Education and Child Nutrition

Congress established the McGovern-Dole International Food for Education and Child Nutrition Program in the 2002 farm bill ( P.L. 107-171 ). USDA administers the McGovern-Dole program, and Congress funds the program through annual agriculture appropriations bills. The McGovern-Dole program aims to advance food security, nutrition, and education for children—especially girls—by providing school meals. The program also focuses on improving children's health before they enter school by providing food to pregnant and nursing mothers, infants, and children under school age. In addition to providing food, the program encourages governments in recipient countries to establish national school feeding programs and provides technical assistance to help them do so.

USDA chooses priority countries for McGovern-Dole projects each year based on criteria including per-capita income, literacy, and malnutrition rates. The program primarily uses in-kind aid, but in recent years it was authorized to use LRP. In FY2016 and FY2017, Congress authorized that up to $5 million of the funds appropriated to the McGovern-Dole program may be used for LRP activities within existing McGovern-Dole projects. In FY2018, Congress authorized that up to $10 million of the funds appropriated to the McGovern-Dole program may be used for LRP activities.

Congress first authorized the Bill Emerson Humanitarian Trust (BEHT) in its current form in the Africa: Seeds of Hope Act of 1998 ( P.L. 105-385 ). USDA administers the BEHT. It is a reserve of U.S. commodities or funds held by the CCC. These commodities or funds can supplement FFP Title II, especially when FFP Title II funds alone cannot meet emergency food needs in developing countries. Congress reimburses the CCC for the value of any commodities released from the BEHT through either FFPA appropriations or direct appropriations to the CCC. The CCC may either use these reimbursement funds to replenish the released commodities or hold the funds for BEHT against future need to purchase U.S. commodities for emergency assistance. In 2008 USDA sold the BEHT's remaining commodities—about 915,000 metric tons (mt) of wheat—and currently the BEHT holds only funds. BEHT funds were used in FY2014 to purchase 189,970 mt of U.S. agricultural commodities to supply FFP Title II projects in South Sudan.

Under the Food for Progress program, USDA donates U.S. agricultural commodities to partner IOs, NGOs, foreign governments, or private entities, which then monetize the commodities by selling them locally to raise funds for development projects. Food for Progress projects focus on improving agricultural productivity through agricultural, economic, or infrastructure development. Recipient country governments must make commitments to introduce or expand free enterprise elements in their agricultural economies. In FY2017, USDA funded seven Food for Progress projects in nine different countries.

Congress first authorized the Food for Progress program in the 1985 farm bill ( P.L. 99-198 ). It may receive funding through either Food for Peace Title I appropriations or CCC financing. Congress has not appropriated Title I program funds since FY2006. Food for Progress now relies entirely on CCC financing. Statute requires that the program provide a minimum of 400,000 mt of commodities each fiscal year. However, this minimum has not been met in recent years, with actual totals averaging 255,418 mt per year between FY2007 and FY2016 and ranging from as little as 160,120 mt in FY2013 to as much as 341,820 mt in FY2015. Statute limits the program to pay no more than $40 million annually for freight costs, which limits the amount of shipped commodities, particularly in years with high shipping costs.

Unlike FFP Title II, EFSP is a cash-based program. It can complement Title II when significant barriers exist to providing in-kind aid—for example, when in-kind food would not arrive soon enough or could potentially disrupt local markets or when it is unsafe to operate in zones of civil conflict. For example, from FY2013 to FY2015, more than half of EFSP outlays were used to respond to the conflict in Syria. This includes assistance provided to internally displaced persons and refugees who fled to neighboring countries such as Jordan, Lebanon, and Turkey.

USAID administers EFSP. USAID first employed EFSP in FY2010 based on authority in the FAA to provide disaster assistance. In 2016, Congress permanently authorized EFSP in the GFSA. Congress funds EFSP through the International Disaster Assistance (IDA) account within State and Foreign Operations appropriations bills.

U.S. international food assistance outlays for these and other related programs have fluctuated over the past 10 years, rising in FY2008 and FY2009 partly in response to the global food price crisis of 2007-2008 and subsequently declining in the years following FY2009 ( Figure 1 ). Outlays increased again between FY2013 and FY2016 partly in response to conflicts in Syria and Yemen and the Ebola epidemic in West Africa. While FFP Title II has comprised the bulk of food assistance outlays since the mid-1980s, cash-based EFSP assistance has grown from approximately 10% of total international food assistance in FY2010 to 30% in FY2016. During that same period, the share of Title II food assistance outlays decreased from 75% to 57%.

U.S. international food assistance programs share a number of common features and requirements, including agricultural cargo preference restrictions, commodity sourcing requirements, and labeling of commodity donations. Statutory requirements also mandate analyses to ensure that adequate storage facilities are available in recipient countries, assistance does not disrupt local markets in recipient countries, and assistance does not compete with U.S. agricultural exports. FFP Title II assistance also has specific requirements in addition to the requirements that apply to all international food assistance programs. These features and requirements are detailed below.

In accordance with the Cargo Preference Act of 1954 (P.L. 83-644) and Section 901 of the Merchant Marine Act of 1936 (P.L. 74-835), both as amended, at least 50% of the gross tonnage of U.S. agricultural commodities provided under U.S. food aid programs must ship via U.S.-flag commercial vessels. This requirement is known as "agricultural cargo preference" (ACP). ACP is part of broader cargo preference requirements that apply to other government cargo, such as Department of Defense cargo. According to the Department of Transportation's Maritime Administration (MARAD), the main purpose of cargo preference laws is to sustain a privately owned, U.S.-flag merchant marine to provide sealift capability in wartime and national emergencies and to protect U.S. ocean commerce from foreign control. Under ACP, qualifying U.S.-flag ships must be privately owned and employ a crew consisting of at least 75% U.S. citizens. ACP applies to all in-kind aid provided under international food aid programs. It does not apply to LRP or other cash-based assistance.

Statute requires all agricultural commodities distributed under food assistance programs authorized in the FFPA to be produced in the United States. However, there are some exceptions to this requirement. The requirement does not apply to food assistance provided under the LRP program authorized in the FFPA. It also does not apply to EFSP or other food assistance provided through authority in the FAA. Lastly, FFPA Section 202(e) allows a portion of FFP Title II funds to be used for storage, transportation, and administrative costs. The 2014 farm bill expanded eligible uses of these funds—referred to as 202 ( e ) funds —to include "enhancing" FFP Title II projects, including through the use of cash-based assistance. Since 2014, 202(e) funds can be used to fund cash-based assistance that enhances existing FFP Title II in-kind assistance.

The FFPA requires foreign governments, NGOs, or IOs receiving U.S. commodities to widely publicize, to the extent possible, "that such commodities are being provided through the friendship of the American people as food for peace." In particular, governments and organizations must label FFP Title II commodities, "in the language of the locality in which such commodities are distributed, as being furnished by the people of the United States of America."

Through the International Development and Food Assistance Act of 1977 ( P.L. 95-88 ), Congress amended the FFPA to prohibit use of U.S. commodities for international food assistance if (1) the recipient country lacks adequate storage facilities to prevent spoilage or waste of commodities or (2) distribution of U.S. commodities in the recipient country would result in substantial disincentive to, or interference with, domestic production or marketing of agricultural commodities in that country. Cooperating organizations providing international food assistance must now conduct a "Bellmon analysis"—named for Senator Henry Bellmon, who sponsored the amendment to the FFPA. The analysis assesses whether the recipient country has adequate storage facilities and whether assistance would interfere with the recipient country's agricultural economy.

An amendment to the Urgent Supplemental Appropriations Act, 1986 ( P.L. 99-349 , §209), offered by Senator Dale Bumpers, prohibited the use of U.S. foreign assistance funds for any activities that would encourage the export of agricultural commodities from developing countries that might compete with U.S. agricultural products on international markets. Exceptions to the Bumpers amendment include food-security-related activities, research activities that directly benefit U.S. producers, and activities in a country that the President determines is recovering from a widespread conflict, humanitarian crisis, or complex emergency.

In addition to the requirements listed above, FFP Title II assistance has specific requirements identified in Table 2 .

Historically, the United States provided international food aid exclusively via in-kind commodities. The United States remains one of the few major donor countries that relies primarily on in-kind aid. Many other donors—such as Canada, the European Union, and the United Kingdom—have switched to primarily cash-based assistance. U.S. use of cash-based assistance has increased in recent years under EFSP and to support the use of LRP in the McGovern-Dole program.

Proponents of in-kind aid emphasize that it supports American jobs. Providing U.S.-grown commodities supports the agricultural sector, and shipping those commodities on U.S.-flag ships supports the transportation sector. In-kind aid also supports American companies that produce ready-to-use therapeutic and supplementary foods, foods that are specially formulated to address malnutrition. Proponents also maintain that the visibility of in-kind food with U.S labels fosters good will between the United States and recipient countries.

In-kind aid may be especially appropriate when local food availability is scarce. For example, in 2012 during a severe drought in the Sahel region of Africa, USAID provided in-kind aid to recipients during the "lean season" when markets were not well stocked. According to USAID, in-kind aid allowed local farmers to plant and tend to crops instead of having to migrate in search of food. Prepositioning food at warehouses in the United States and abroad allows aid to reach recipients sooner than traditional in-kind aid in emergency situations. In 2014, the U.S. Government Accountability Office (GAO) found that prepositioning shortened delivery time frames for in-kind aid by one to two months compared to standard delivery methods.

Critics of in-kind aid emphasize that it takes longer to reach recipients than cash-based assistance. Although prepositioning in-kind aid shortens delivery times, GAO found that it can involve additional costs due to storage costs and additional shipping costs. Prepositioned commodities can also cost more than traditional in-kind commodities due to a limited supply of commodities available for domestic prepositioning.

In 2011, GAO found that in-kind aid may not provide adequate nutrition to recipients during long-term emergencies. In some instances, lack of adequate nutrition led to micronutrient deficiencies. USAID and USDA can use specialized, nutrient-dense food products to supplement traditional commodities, but these products are costly and may be difficult to direct to intended recipients. GAO's analysis also found vulnerabilities in quality control of the food aid supply chain. In some instances, these vulnerabilities led to contamination of food aid commodities.

Critics also contend that in-kind aid can be difficult to deliver in situations with geographic and security challenges. In multiple instances, food aid has reportedly been stolen from warehouses near conflict zones in South Sudan. In 2015, Dina Esposito, former director of USAID's Office of Food for Peace, testified that many Syrian refugees who had fled to neighboring countries to escape conflict were widely dispersed rather than congregated in refugee camps. According to Esposito, without the use of cash-based assistance, USAID "would not be able to feed people inside Syria and would have great difficulty feeding those displaced within the region, particularly where refugees are dispersed within host communities." Critics of in-kind aid also assert that in-kind commodities can disrupt local markets and cause price distortions.

Cash-based assistance can take the form of direct cash transfers, food vouchers, or LRP. Proponents of cash-based assistance emphasize that it allows for quicker response times than shipping in-kind aid via ocean freight. This response time may be especially relevant to emergencies, when food needs are immediate. Research shows that LRP can arrive 14-16 weeks sooner than in-kind aid. Proponents also contend that cash-based assistance is less costly than in-kind aid, allowing donors to reach more people in need with less funding. The cost savings of cash-based assistance can vary widely based on target destination and current commodity prices. According to GAO, USDA and USAID recover 58%-76% of every dollar spent on monetizing in-kind aid. GAO also concluded that LRP costs 25% less, on average, than in-kind aid.

Some research also found that cash-based assistance can better meet local dietary preferences and can support local agricultural markets and producers, both of which may be fragile in the wake of conflict or disaster. According to USAID, cash-based assistance is appropriate in situations in which people are physically spread out or highly mobile or when there are security concerns about transporting in-kind aid.

Cash-based assistance may have policy or implementation challenges. Cost differences between LRP and in-kind aid can vary based on the specific commodity involved. For example, one study found that while LRP was less costly than in-kind aid when purchasing bulk cereals and beans, it was more expensive for processed foods such as vegetable oils or corn-soy blends. In addition, using LRP in food-deficit regions or underdeveloped markets could cause local or regional price spikes or provide insufficient access to food due to local unavailability. Lack of reliable suppliers and poor infrastructure can also limit the efficiency of LRP.

Critics of cash-based assistance contend that in poorly controlled settings, cash transfers or food vouchers could be stolen or used to purchase nonfood items. In 2015, GAO found instances of fraud and theft in EFSP projects. GAO also determined that USAID risk assessments for EFSP projects did not fully address risks specific to cash-based food assistance. Additionally, in cases of particularly acute malnutrition, local foods may not offer adequate nutritional quality for therapeutic treatment and rehabilitation, especially for highly vulnerable populations such as children and pregnant or lactating women. Under these circumstances, providing fortified or specialized in-kind foods may be preferable. Critics of cash-based assistance also argue that it could undermine the coalition of commodity groups, NGOs, and shippers that advocate for food aid funding, potentially resulting in reductions in total U.S. food assistance funding.

The Cargo Preference Act of 1954 (P.L. 83-164), as amended, mandates that at least 50% of U.S. food aid commodities must ship on U.S.-flag vessels. MARAD monitors and enforces ACP. Congress increased the share of food aid commodities required to ship on U.S.-flag vessels from 50% to 75% in the 1985 farm bill ( P.L. 99-198 ) and subsequently lowered it to 50% in a 2012 surface transportation reauthorization act ( P.L. 112-141 ).

According to MARAD, the main purpose of cargo preference laws is to sustain a privately owned, U.S.-flag merchant marine to provide sealift capability in wartime and national emergencies and to protect U.S. ocean commerce from foreign control. USA Maritime—an organization representing shipper and maritime unions—asserts that maintaining a U.S.-flag fleet and supply of U.S. mariners through cargo preference is a cost-effective alternative to the U.S. government building ships and hiring employees to maintain sealift capacity.

MARAD contends that cargo preference is critical to the financial viability of U.S.-flag vessels and maintaining the supply of qualified U.S. mariners. According to a 2017 report by MARAD's Maritime Workforce Working Group, the current supply of qualified U.S. mariners is sufficient to crew the fleet of government and privately owned U.S.-flag ships necessary during an initial activation (for example, during wartime or a national emergency). However, there are not enough U.S. mariners to support a sustained activation of this fleet for a period longer than 180 days.

Shipping on U.S.-flag vessels typically costs more than on foreign-flag vessels. A 2011 study by MARAD found that average daily operating costs for U.S.-flag vessels were 2.7 times higher than for foreign-flag vessels. USA Maritime maintains that a primary reason for the higher cost is that U.S.-flag ships have better working conditions and pay higher wages than foreign-flag ships. Ship owners surveyed by MARAD noted that "the standard of living in the U.S. and the social benefits provided to mariners contribute to U.S.-flag wages being significantly higher than foreign-flag wages."

When shipping costs on U.S.-flag ships are higher than foreign-flag ships, ACP can increase food aid costs. This could potentially reduce the volume of food aid provided and, therefore, the number of people aided. According to GAO, "USAID officials stated that for each $40 million increase in shipping costs, its food aid reaches one million fewer recipients each year." USAID officials also noted that in some instances the agency has had to ship food aid on types of vessels that are not meant to carry bulk food cargo and are not compatible with equipment typically used to load and unload bulk grains. They asserted that this has resulted in increased costs and delays. USAID officials also expressed concerns about the appearance and health of bulk food transported on vessels that typically carry cargo such as oil or other fuels.

Some opponents of ACP question its contributions to U.S. sealift capacity. They assert that few U.S.-flag ships depend on food aid shipments, and only some of those ships are capable of carrying military cargo. They also argue that ACP often benefits U.S. subsidiaries of foreign shipping companies rather than U.S. shipping companies. A 2010 study asserted that ACP increased food aid costs and contributed little to national security because 70% of ACP vessels did not meet the criteria that would deem them militarily useful.

In 2015, GAO found that from April 2011 through July 2014, ACP increased the overall cost of shipping food aid by an average of 23%, or $107 million in total. GAO also concluded that ACP contributions to Department of Defense sealift capacity were uncertain, because in the preceding 13 years, including during conflicts in Iraq and Afghanistan, the entire reserve sealift fleet was not activated. Additionally, MARAD had not fully assessed the potential availability of U.S. mariners needed for a full and prolonged activation. In 2018, GAO analyzed the assessment of U.S. mariner availability in the above-mentioned Maritime Workforce Working Group report. GAO found that although "the working group concluded that there is a shortage of mariners for sustained operations, its report also details data limitations that cause some uncertainty regarding the actual number of existing qualified mariners and, thus, the extent of this shortage."

Administrative Proposals and Legislation

The Trump Administration and some Members of Congress proposed changes to the structure and intent of U.S. international food assistance programs during the 115 th Congress. The Administration proposed changes through its FY2018 and FY2019 budget requests. Some Members of Congress proposed changes in the House and Senate 2018 farm bills ( H.R. 2 ). Members also proposed changes in the Global Food Security Reauthorization Act of 2017 ( P.L. 115-266 ), which became law in October 2018, and the Food for Peace Modernization Act ( S. 2551 / H.R. 5276 ). These administrative and legislative proposals are detailed below.

The Trump Administration's FY2018 budget request proposed a major reorganization of international food assistance funding. The request would have eliminated funding for the McGovern-Dole program and FFP Title II. Instead, it would have funded all international food assistance through the IDA subaccount within the state and foreign operations appropriations. The Trump Administration requested $2.5 billion for IDA, of which $1.1 billion would be allocated for emergency food assistance. Compared to FY2017 appropriated levels, the request would have reduced total IDA funding by 39% and total emergency food assistance funding by 38%. Congress did not enact any of the Administration's proposed changes but instead increased funding for McGovern-Dole, FFP Title II, and IDA.

In its FY2019 budget request, the Trump Administration repeated its proposals from FY2018 to eliminate McGovern-Dole and FFP Title II funding and instead to fund all food assistance through the IDA subaccount. The request would decrease the IDA subaccount by 17% from FY2018-enacted levels. The House FY2019 agriculture appropriations bill ( H.R. 5961 ) was reported by the House Appropriations Committee in May 2018. It would decrease FFP funding by $100 million and maintain McGovern-Dole funding at FY2018-enacted levels. The Senate approved an agricultural appropriations bill for FY2019 ( H.R. 6147 ) in August 2018. The Senate-passed bill would maintain FFP funding at FY2018-enacted levels and increase McGovern-Dole funding by $2.6 million, or 1%. In September 2018, President Trump signed a continuing resolution ( P.L. 115-245 ) funding agriculture-related programs through December 7, 2018.

The House and Senate 2018 Farm Bills (H.R. 2)

On June 21, 2018, the House passed the Agriculture and Nutrition Act of 2018 ( H.R. 2 ). The Senate subsequently passed its version of H.R. 2 , the Agriculture Improvement Act of 2018, on June 28, 2018. Both the House and Senate farm bills would make changes to U.S. international food assistance programs. Both bills would amend FFP Title II by removing the requirement to monetize a minimum of 15% of Title II non-emergency commodities. The bills would also increase the minimum annual funding allocation for FFP Title II non-emergency assistance from $350 million to $365 million of the annual funds appropriated for FFP Title II. Both bills would include outlays for food security activities authorized by the FAA as part of the minimum non-emergency allocation. The Senate bill would also include Farmer-to-Farmer outlays as part of the minimum non-emergency allocation.

The House and Senate farm bills would amend the McGovern-Dole program by directing the Secretary of Agriculture to ensure, to the extent practicable, that assistance coincides with the beginning of the school year and other relevant times during the school year. The Senate bill would authorize USDA to provide locally and regionally procured foods under the McGovern-Dole program in addition to U.S.-sourced foods. It would authorize up to 10% of funds appropriated to the McGovern-Dole program to be used for LRP activities. The Senate bill would also amend the Food for Progress program by designating the Secretary of Agriculture, rather than the President, as having program authority. The bill would authorize a portion of Food for Progress funds to directly fund food security projects in recipient countries rather than monetization proceeds funding all food security projects.

Both the House and Senate bills would also amend reporting requirements to allow USAID and USDA to submit annual reports on international food assistance activities either jointly or separately. Current law requires the two agencies to jointly prepare and submit an annual report.

The House bill would extend the labeling requirement—that all food aid be labeled as provided by the United States—to apply to food procured outside the United States. The House bill would also amend the requirement that food aid not interfere with markets in recipient countries to apply to all forms of food assistance, including cash-based assistance. The Senate bill does not contain such provisions.

The Senate bill would create a new initiative—International Food Security Technical Assistance—that would provide technical assistance to NGOs, IOs, foreign governments, or U.S. government agencies to implement projects to improve international food security. The initiative would prioritize projects related to developing food and nutrition safety net systems in food-insecure countries. The Senate bill authorizes $1 million in annual funding for this initiative. The House bill does not contain such provisions.

The Global Food Security Reauthorization Act of 2017

In October 2018, President Trump signed the Global Food Security Reauthorization Act of 2017 ( P.L. 115-266 ) into law. The bill reauthorizes the GFSA—and therefore EFSP and the Feed the Future initiative—through 2023. The bill authorizes appropriations of $2.8 billion per year for EFSP and $1.0 billion per year for the Department of State and USAID to carry out the Global Food Security Strategy (GFSS). The Obama Administration created the GFSS in 2016 in response to the passage of the original GFSA.

The Food for Peace Modernization Act (S. 2551/H.R. 5276)

In March 2018, S. 2551 / H.R. 5276 , the Food for Peace Modernization Act, was introduced. Both bills would change FFPA requirements by reducing the share of aid that must be U.S. commodities from 100% to 25%. The remaining 75% could be in the form of U.S. commodities or cash-based assistance. The bills would also eliminate the requirement that 15% of food aid be monetized, replacing this required minimum with the option to monetize up to 15% of food aid. S. 2551 and H.R. 5276 would also add the Senate Foreign Relations Committee and the House and Senate Appropriations Committees as committees receiving reports on international food assistance activities from USAID and USDA. Lastly, the bills would remove references in statute to using abundant U.S. agricultural productivity to deliver aid, emphasizing instead the goals of promoting agricultural-led growth in developing countries and reducing long-term reliance on U.S. foreign assistance. S. 2551 was referred to the Senate Foreign Relations Committee, and H.R. 5276 was referred to the House Agriculture Committee.

Appendix. U.S. International Food Assistance Programs

Question: What are the roots of the current international food assistance programs?

Answer: The current suite of international food assistance programs began with the Food for Peace Act (P.L. 83-480), commonly referred to as "P.L. 480," which established the Food for Peace program (FFP).

Question: How was the EFSP authorization atypical?

Answer: Congress authorizes most food assistance programs in periodic farm bills. However, Congress authorized the Emergency Food Security Program (EFSP)—a newer, cash-based food assistance program—in the Global Food Security Act of 2016 (P.L. 114-195).

Question: How are international food assistance programs funded?

Answer: Congress funds international food assistance programs through annual agriculture appropriations and state and foreign operations (SFOPS) appropriations bills.

Question: How much do annual international food assistant outlays average?

Answer: Since 2007, annual international food assistance outlays averaged $2.6 billion.

Question: What agencies administer U.S. international food assistance programs?

Answer: The U.S. Agency for International Development (USAID) and the U.S. Department of Agriculture (USDA) administer U.S. international food assistance programs.

McGovern-Dole International Food for Education and Child Nutrition

International Food Assistance Programs5
Food Assistance Funding

Question: How has the United States historically provided international food assistance?

Answer: Historically, the United States provided international food assistance exclusively through in-kind aid. Since the mid-1980s, FFP Title II, which provides in-kind donations, has been the dominant U.S. food aid program.

Question: What does the name "FFP Title II" refer to?

Answer: (The name "FFP Title II" refers to Title II of the Food for Peace Act, in which Congress first authorized the program.)

Question: How is U.S. international food assistance beginning to change?

Answer: In the late 2000s, U.S. international food assistance began to shift toward a combination of in-kind and cash-based assistance.

Question: Why has this shift occured?

Answer: This is largely due to the Obama Administration creating the cash-based EFSP in 2010 to complement FFP Title II emergency aid.

Question: When is EFSP used?

Answer: EFSP is used in conditions when in-kind aid cannot arrive soon enough or could potentially disrupt local markets or when it is unsafe to operate in conflict zones.

International Food Assistance Programs5
Food for Peace Title II

International Food Assistance Programs5
Emergency Food Security Program

Issues for Congress
In-Kind vs. Cash-Based Food Assistance

Question: How does U.S. international food assistance compare to that of other countries?

Answer: Despite the growth in cash-based assistance, U.S. international food assistance still relies predominantly on in-kind aid. Many other countries with international food assistance programs have converted primarily to cash-based assistance.

Question: Why is U.S. in-kind aid controversial?

Answer: U.S. reliance on in-kind aid has become controversial due to its potential to disrupt local markets and cost more than procuring food locally.

Question: What limits the efficiency of cash-based assistance?

Answer: At the same time, lack of reliable suppliers and poor infrastructure in recipient countries may limit the efficacy and efficiency of cash-based assistance. Also, in poorly controlled settings, cash transfers or food vouchers could be stolen or used by recipients to purchase nonfood items.

Question: Why is ACP controversial?

Answer: Agricultural cargo preference (ACP)—the requirement that 50% of all in-kind aid be shipped on U.S.-flag ships—has also become controversial due to findings that it can lead to higher transportation costs and longer delivery times. Higher costs may be partially due to higher wages and better working conditions on U.S.-flag vessels compared to foreign-flag vessels.

Question: How might ACP help the U.S. in times of national emergencies?

Answer: ACP may also contribute to maintaining a U.S.-flag merchant marine to provide sealift capacity during wartime or national emergencies.

International Food Assistance Programs5
Common Features and Requirements
Agricultural Cargo Preference

Issues for Congress
Agricultural Cargo Preference

Question: What did the Trump Administration and Members of Congress propose regarding international food assistance?

Answer: The Trump Administration and certain Members of Congress have proposed changes to the structure and intent of international food assistance programs. Members of Congress proposed changes in the House and Senate 2018 farm bills (H.R. 2).

Question: What are the changes being proposed?

Answer: These proposed changes include amending requirements for some international food assistance programs and expanding flexibility to use cash-based assistance.

Question: How could other legislation change the structure and intent of these programs?

Answer: Other proposed legislation would address ACP, expand flexibility to use cash-based assistance, and consolidate and alter funding for most international food assistance programs.

Administrative Proposals and Legislation


Public Transit: Information on Job Access and Reverse Commute Activities after 2012 Statutory Changes

Established in 1998, the JARC program, which was administered by FTA, provided grants to states and localities for improving the mobility of low-income individuals to and from jobs and employment-related activities. In 2005, statute changed JARC into a formula program with dedicated funds apportioned by FTA. Then in 2012, MAP-21 repealed and consolidated the JARC program. However, activities previously funded through the JARC program are still eligible for funding through other programs administered by FTA.

The Fixing America's Surface Transportation Act included a provision for GAO to examine the impact of changes that MAP-21 had on public transportation. This report examines: (1) how FTA communicated the 2012 statutory changes to JARC activities to transit providers and (2) whether and how selected states and transit providers have continued to fund and provide JARC activities since the 2012 statutory changes. GAO reviewed FTA program guidance. GAO interviewed FTA officials and 34 selected recipients of JARC funding, including transportation officials and transit providers, from six states (Arizona, Michigan, Mississippi, Oregon, Texas, and Virginia). GAO judgmentally selected these JARC recipients for interviews to represent diverse geographic locations, including large-urban, small-urban, and rural funding areas within each state, among other factors.

GAO provided a draft of this report to DOT for comment. DOT had no comment on this report.

The Federal Transit Administration (FTA) communicated changes that Moving Ahead for Progress in the 21st Century Act (MAP-21) made to public transportation programs, including the Job Access and Reverse Commute (JARC) program, to designated recipients through program guidance and outreach. For example, in an October 2012 Federal Register notice, FTA addressed the consolidation of the JARC program and its eligible activities (JARC activities) into the existing Urbanized Area Formula Program (urban transit program) and the Formula Grants for Rural Areas Program (rural transit program). Additionally, in 2014, FTA issued final guidance on JARC activities allowed under the urban and rural transit programs. In addition to written guidance, FTA officials offered webinars and made staff available via in-person meetings, calls, and e-mail messages to answer any questions or concerns about the 2012 program change. Of the 34 selected JARC recipients (selected recipients) GAO interviewed, most (22) stated that they found the guidance provided to them, either by FTA directly or by other means, to be sufficient and effective in communicating program changes.

Most of the selected recipients we interviewed (30 of 34) said that they have continued to provide some level of JARC activities after the 2012 statutory changes. Selected recipients cited several reasons why they continue—or plan to continue—providing JARC activities, including:

recipients still have remaining dedicated JARC funds,

overall federal transit formula amounts were unchanged, and

JARC activities have already been integrated into existing transit services.

The 34 selected recipients GAO interviewed also identified an array of challenges in continuing their JARC activities. All but one of the selected recipients specified funding challenges related to MAP-21 changes. In particular, 21 selected recipients reported JARC activities had difficulty competing against other public services, including transit services, for funds, and 17 reported year-to-year funding allocations for continued JARC activities could change. In addition, 25 selected recipients specified service challenges linked to the location of low-income housing and employment centers. GAO found that it is too soon to determine the full impact of the statutory changes on JARC activities. This finding is in part due to the number of grant recipients and subrecipients still spending dedicated funds apportioned before the 2012 statutory changes. Half of the 34 selected recipients GAO interviewed reported that they were still spending dedicated JARC funds, and recent FTA data indicate that as of February 2017, there were approximately 265 active program grants funding JARC activities. Officials from 7 of the 17 selected recipients that have already expended all of their JARC program funding stated that they are uncertain whether or not they will be able to obtain long-term funding to continue to support JARC activities into future years.

Access to transportation is critical for enabling low-income individuals to  find and retain employment and attend to other life needs. To help  provide this access, Congress established the Job Access and Reverse  Commute (JARC) program in 1998. Administered by the U.S.  Department of Transportation’s (DOT) Federal Transit Administration  (FTA), the JARC program provided grants to states and localities to fill  gaps in transportation services for low-income individuals needing access  to jobs and related services, such as child care and training. JARC funds  could also be used for public transportation activities designed to  transport residents in both urbanized and rural areas to suburban  employment opportunities regardless of income. In 2012, the Moving  Ahead for Progress in the 21st Century Act (MAP-21) made a number of  changes to public transportation programs, including repealing and  consolidating the JARC program. However, activities previously funded  through the JARC program are still eligible for funding through other  programs administered by FTA. Since this change, questions have been  raised about the impacts of the program’s consolidation on funding  recipients, and any effects it has had on transit services targeting low- income users.

The Fixing America’s Surface Transportation Act (FAST Act) included a  provision for us to analyze and evaluate possible impacts of changes  made to public transportation activities under MAP-21 on low-income  riders. This report examines (1) how FTA communicated the 2012  statutory changes to JARC activities to transit providers and (2) whether  and how selected states and transit providers have continued to fund and  provide JARC activities since the 2012 statutory changes.

To determine how FTA communicated the MAP-21 changes to the JARC  program we reviewed FTA program guidance, including a federal register  publication and applicable program circulars. We also interviewed FTA  officials and representatives of relevant stakeholder groups, such as the  Community Transportation Association of America, American Association  of State Highway and Transportation Officials, and the National Rural  Transit Assistance Program. To determine the current status of JARC  program activities that started before the 2012 statutory changes, we  reviewed fiscal year 2009 through 2012 funding information on program  apportionments, and FTA program information about ongoing JARC  activities as of February 2017.

To answer both objectives, we interviewed a total of 34 entities from six  states (Arizona, Michigan, Mississippi, Oregon, Texas, and Virginia).  This population included officials from the 6 selected state transportation  agencies, as well as 13 selected large-urban JARC program’s designated  recipients and 15 subrecipients, which consisted of local transit agencies  and nonprofit organizations, among others. We selected states and  JARC recipient agencies to interview to include a range of geographic  locations, states that received large amounts of JARC program funds, as  well as states that received smaller JARC funding amounts. We also  reviewed a list provided by FTA of ongoing JARC program activities  funded prior to the MAP-21 statutory changes to assist in our selection.  All selected recipients we interviewed had received dedicated JARC  program funds and were either actively administering, or had recently  completed, their eligible JARC grant activities. We developed interview  question sets to use with designated recipients and subrecipients. We  then analyzed responses from our interview question set with the 34  selected JARC recipients (selected recipients). To conduct this analysis,  we established high-level categories of responses, and reviewed the  recipients’ answers to interview questions to determine any common  themes in selected recipient responses, and quantify those responses.  One analyst conducted the categorization of responses, and a second  analyst reviewed this analysis. Results of this analysis are not  generalizable.

We conducted this performance audit from April 2016 to May 2017 in  accordance with the generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Public transportation provides many groups with wide-ranging benefits.  Those served include transportation disadvantaged populations, such as  “low-income individuals”. Congress created the JARC program in the  1998 Transportation Equity Act for the 21st Century (TEA-21) to support  national welfare-reform goals, including helping adults meet new work  requirements to receive federal assistance. A purpose of the program  was to improve low-income individuals’ ability to access jobs and job- related needs by providing grants to states and localities for the provision  of additional or expanded transportation services. Under TEA-21, JARC  was a discretionary program, with projects selected by FTA for funding  through a competitive process or congressionally designated for funding.  Figure 1 provides a timeline of subsequent surface transportation  authorizations that affected the program.

In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity  Act —A Legacy for Users (SAFETEA-LU) changed JARC into a formula  program. FTA apportioned dedicated program funds to states for  projects in small urbanized and rural areas, and to large urbanized areas,  based on a statutory formula. State transportation agencies were required  to be JARC designated recipients for small urbanized and rural areas.  Designated recipients for large urbanized areas include major transit  agencies and metropolitan planning organizations. SAFETEA-LU also  required that designated recipients develop and conduct a competitive  selection process for their projects, and competitively allocate funds to  subrecipients. After projects were selected, designated recipients had to  apply to FTA to fund the projects. FTA awarded grants to designated  recipients and funds were obligated at the time of award. Figure 2 below  provides an overview of the JARC grants process under SAFETEA-LU.  Program-eligible activities included, among others: late-night and  weekend transit service, expansion of fixed-route public transit routes  (e.g., bus routes), ride-sharing activities, local car loan programs, or  capital expenditures such as vehicle purchases to support a transit  service. In fiscal year 2012, the last year before the program was  consolidated, FTA apportioned approximately $176.5 million to urbanized  and rural areas. Funds were available for obligation for 3 years from the  time of apportionment. JARC funds remain subject to the program  requirements that were in place at the time the funds were apportioned.

In 2012, the JARC program was one of several FTA grant programs that  MAP-21 changed or did not renew. Specifically, the statute consolidated  eligible JARC activities into the existing Urbanized Area Formula Program  (urban transit program) and Formula Grants for Rural Areas Program  (rural transit program). Eligible activities of the consolidated urban and  rural transit programs are as follows.

Urban transit program: In addition to providing funds for eligible  JARC activities in urbanized areas, this program provides funds for  activities including: (1) planning, certain operating costs, engineering,  design, and evaluation of transit projects and other technical  transportation-related studies; (2) capital investments in bus and bus- related activities; and (3) capital investments in new and existing  fixed-guideway systems including, but not limited to, rolling stock,  overhauling and rebuilding of vehicles, and communications.

Rural transit program: In addition to providing funds for eligible  JARC activities in rural areas, this program provides funds for  activities including: (1) planning; (2) capital expenses for the  acquisition of buses and vans or other paratransit vehicles; (3)  preventive maintenance, vehicle rehabilitation, remanufacture, or  overhaul; and (4) operating expenses directly related to system  operations  We have previously noted that consolidation was seen as a means of  continuing the goals of the program while offering greater efficiency and  flexibility, including decreasing administrative burdens, to recipients.

FTA Issued Guidance and Conducted Outreach to Communicate That JARC Activities Remain Eligible for Federal Funding

FTA communicated changes that MAP-21 made to public transportation  programs, including the JARC program, to designated recipients through  program guidance and outreach. Initially, FTA issued a Federal Register  notice regarding FTA transit program changes in October 2012. The  notice provided interim guidance and emphasized that under MAP-21,  activities that were funded through the former JARC program are eligible  under the urban transit program and the rural transit program. The notice  also stated that there is no set-aside or spending cap on JARC activities.

After the 2012 consolidation, DOT applied all of the JARC eligibility  requirements and existing activities in the urban transit program and rural  transit program. For example, FTA officials explained that they  incorporated a unique aspect of grantee eligibility under the JARC  program—the eligibility of private nonprofit organizations as sub- recipients—in the urban transit program. FTA issued circulars with the  final MAP-21 program guidance in 2014. The circulars reiterated that  there is no limit to the amount of allocated and unobligated formula funds  that can be used for JARC activities until Congress rescinds or redirects  the funds to other programs, and outlined the eligibility requirements for  these activities.

As part of its outreach to funding recipients, FTA held webinars  highlighting new and consolidated programs under MAP-21, and the  JARC program was among the programs covered. Additionally, FTA  officials stated that headquarters and regional FTA officials made  themselves available through conferences, or other means such as  telephone calls or e-mail, to answer questions or concerns regarding the  consolidation and its potential impacts on JARC activities. Selected  recipients we spoke with said they found out about changes to the JARC  program through FTA webinars or designated JARC recipients.

Of the 19 selected designated recipients we interviewed, a majority  (12 of 19) said they found out about the JARC consolidation primarily  through webinars and FTA’s summer 2012 conference. Some also  reported they viewed their contact with FTA officials as a useful  resource as they navigated the program changes. For example, an  official with the Texas Department of Transportation said he found  FTA staff to be the most important resource during program changes,  because the staff was available for questions and feedback.  Furthermore, this official told us that his agency had meetings twice a  year with subrecipients, and FTA staff joined those meetings to assist  in answering a range of questions or concerns, including those on  JARC activities, from subrecipients.

Of the 15 selected subrecipients we interviewed, about half (7)  reported finding out about the JARC program changes through their  state’s transportation agency or other designated recipient. For  example, an official with a Mississippi subrecipient said it found out  about the JARC consolidation and its implications at the annual  workshop held by the Mississippi Department of Transportation to  assist agencies with grant applications. In Arizona, an official with a  selected subrecipient said he learned about the JARC program  changes through its metropolitan planning organization’s committee  meeting.

Of the 34 total selected recipients we interviewed, 22 stated they found  the guidance provided to them, either from FTA directly or through their  respective designated recipients, to be sufficient and effective in  communicating program changes. For example, an official from a  designated recipient in Mississippi who characterized FTA’s  communications as effective noted that the information was readily  available, but that it was primarily up to recipients to read the guidance  and follow up with FTA on any questions or concerns. An official from a  selected subrecipient in Virginia said that the state’s communication  regarding the MAP-21 program changes was good and that FTA’s written  resources also provided useful details on the changes.

Selected Recipients Continue to Provide JARC Activities, but the Full Impact of Statutory Changes Is Unclear

Almost all (30 of 34) selected recipients reported that they have continued  providing JARC activities, such as transportation services, that were  started prior to the 2012 MAP-21 consolidation. About two-thirds (22) of  the selected recipients we interviewed have maintained all such activities.  Officials from half of the selected recipients (17) reported that they still are  expending dedicated JARC program funds received prior to the 2012  statutory changes to support their ongoing JARC activities, and that they  plan to continue using those funds until they are depleted. Further, all  selected recipients reported that they have had to address, or anticipate  having to address, service or funding challenges in order to continue their  JARC activities. Despite reported challenges, all selected recipients  except one reported they are working to maintain their JARC activities,  including service hour expansions and commuter bus routes. Some  selected recipients reported that it is too soon to tell whether they will  need to make additional adjustments to their JARC activities in the future  because of possible year-to-year funding challenges.

Selected Recipients Stated That to Date, They Have Continued Funding and Providing JARC Activities

Of the 34 selected recipients we interviewed, 30 had continued JARC  activities, such as ongoing transit service, started prior to the MAP-21  changes. These selected recipients reported that they have maintained  some level of JARC activities using a number of funding sources,  including urban or rural transit program funds and remaining JARC  program funds. Specifically, about two-thirds of selected recipients (22 of  34) reported continuing all of their previous JARC activities to date, and  just under one-quarter (8 of 34) said they continue to provide downsized  or redesigned JARC activities. The remaining 4 selected recipients had  used their JARC program funds to complete short-term activities, such as  capital expenditures for vehicles or pilot transit programs, which were not  affected by the MAP-21 changes.

Through analysis of our interviews with selected recipients, we identified  a number of reasons recipients have been able to continue JARC  activities after the MAP-21 program changes. These reasons include the  following:

Remaining dedicated JARC funds: Seventeen of the 34 recipients  reported that they have not yet expended all of their dedicated funds  and continue to use them to fund JARC activities. Officials from 5  selected recipients reported that when MAP-21 was implemented in  2012, they started planning their expenditure of remaining dedicated  funds to sustain existing JARC activities into future years. For  example, officials at Texas Department of Transportation, a selected  designated recipient, reported redistributing dedicated funds that their  subrecipients had not expended in a timely manner to other eligible  subrecipients’ ongoing JARC activities. Those funds were fully  expended in August 2016. Additionally, in Oregon, officials from Tri- County Metropolitan Transportation District of Oregon (TriMet), a  selected designated recipient, said they distributed remaining  dedicated JARC funds to subrecipients, which used this funding in  combination with local funds to maintain their transit services  connecting residential neighborhoods and employment centers to  longer or more heavily used transit routes. The officials said they  expect to close out their final dedicated program grant in June 2017.

Overall federal transit formula funding amounts were  unchanged: None of the 19 selected designated recipients we  interviewed reported a significant overall change to their annual FTA  formula funding allocations attributable to the statutory changes. In  addition, five of those designated recipients noted that the changes  led to overall benefits, including reduced administrative burden and  increased spending flexibility of federal funds. For example, officials  from Maricopa Association of Governments, a selected designated  recipient in Arizona, explained that they were able to re-evaluate  ongoing service and capital needs and reallocate some unused funds  (in this case, urban transit program funds that they had initially chosen  to set aside for JARC activities) to undertake bus stop capital  upgrades. According to the officials, the reallocation had no impact on  their subrecipients’ JARC activities, and the added funding flexibility  was beneficial to the region’s transit system as a whole.

JARC activities integrated into existing transit services: Half of  selected recipients (17 of 34) reported that their JARC program  funded activities fulfilled a variety of citizens’ transportation needs,  encouraging the providers to continue those JARC activities using  alternate funding sources after the 2012 statutory changes. For  example, officials with Ride Connection, a selected Oregon  subrecipient, stated that their ongoing JARC transit service has  become an important transportation option serving the broader  community with trips to schools and grocery stores, in addition to job  centers. A dedicated program grant currently funds this service, but  officials we spoke with said they are actively seeking alternate funds  to maintain it. Additionally, officials with Blue Water Area Transit, a  selected Michigan subrecipient, told us that late-night bus service  initially funded under the JARC program has become popular with a  wider population, helping increase ridership on their other transit  services. Due to the ridership increase, officials reported that the  agency is able to cover a greater portion of operating expenses using  revenue from fares, providing an overall benefit to the system. Four of  the recipients we selected provide transit service in university  communities. Those transit officials said that students, faculty, and  other campus employees make up a large portion of transit riders in  their jurisdictions. This customer base creates demand for expanded  transit service hours, like extended weekday hours of operation and  weekend service, which JARC program grants had previously funded.  These selected recipients all reported that they now receive dedicated  local transit funding from the university or surrounding jurisdiction to  maintain these services.

Importance of JARC activities to the community: Officials from just  over one-third of selected recipients we interviewed (12 of 34) stated  that transportation for low-income workers is a high priority in their  communities, and they are willing to seek out additional funds in order  to sustain JARC activities. For example, TriMet reported receiving  political support from its regional business community for transit  access to low-wage employment centers, particularly during off-peak  hours such as evenings and weekends when transit service can be  limited. TriMet officials explained that their transit system attracts  relatively high interest from employers because their main local  funding source is a payroll tax. Additionally, officials with Flint Mass  Transportation Authority, a selected Michigan designated recipient,  reported that limited job availability in their metropolitan area creates a  high demand for JARC commuter bus routes that service employment  centers in other jurisdictions. According to the officials, the funding  needs of their commuter service limit the amount of funding available  for other needs such as capital purchases.

Officials from the eight selected recipients said they continue to provide  downsized or redesigned JARC activities, service modifications or other  changes that have enabled them to maintain a level of JARC activities to  help meet low-income riders’ needs. Reported adjustments fell into three  categories:

Realigning service and funding: Two selected recipients reported  redesigning their JARC activities. Lower Rio Grande Valley  Development Council, a selected designated recipient in Texas,  reported realigning one 50-mile long JARC funded route into three  separate routes to more efficiently meet rider needs. These bus  routes serve affordable housing projects in rural areas—locations that,  according to officials, had limited transit options before the service  began—and job centers in urban areas such as industrial parks and  universities. Additionally, officials with Suburban Mobility Authority for  Regional Transportation, a selected Michigan designated recipient,  reported that one of their subrecipients, a nonprofit transit provider,  adjusted service on a JARC funded demand response bus service to  better align it with community needs and funding sources. The  officials said the service primarily served elderly and disabled riders;  after fully expending dedicated JARC funds, the officials have used  funds from FTA’s Enhanced Mobility of Seniors and Persons with  Disabilities program to maintain the service. However, they also said  that as a result of this funding change, the service’s target ridership  now focuses exclusively on seniors and persons with disabilities in  order to comply with program requirements.

Adjusting service hours or frequencies: Two selected recipients  informed us that they were unable to sustain all activities started with  JARC program grants, but have adjusted service hours and  frequencies to allow them to continue some such activities after the  program changes. Officials with the Oregon Department of  Transportation, a selected designated recipient, reported that a  number of their subrecipients that provide transit service used  dedicated JARC program grants to fund enhancements such as  expanded service hours, more extensive service areas, and increased  bus frequencies. After the statutory changes, some of Oregon  Department of Transportation’s subrecipients had to partially cut back  their transit service enhancements, but aspects of the enhancements  remain. More specifically, officials said that one of their subrecipients  maintained 2 of the 4 hours of enhanced bus service, but eliminated  the 8 p.m. to 10 p.m. window after the JARC funds ran out.  Blacksburg Transit, a selected Virginia subrecipient, reported reducing  service on a JARC commuter bus route from two round trips per day  to one daily round trip, which it said allowed them to fulfill a  community need while reducing the cost of the service.

Discontinuing select low-ridership JARC activities: Officials with 4  selected recipients explained that they discontinued some JARC  activities with limited ridership. According to these recipients, they  have found ways to provide alternate services for transportation- disadvantaged individuals, including those commuting to low-wage  jobs. For example, officials with Detroit Department of Transportation,  a selected designated recipient in Michigan, reported discontinuing a  demand response service after their dedicated JARC funding was  expended. The officials explained that they used city resources to  assist individuals that used the demand response service in finding  more transit-accessible workplaces, and utilized federal and local  funds to enhance existing fixed route bus service. Additionally,  officials with Brownsville Metro, a selected subrecipient transit agency  in Texas, reported that they discontinued one of their JARC bus  routes when a local university that directly benefited from the service  could no longer provide the required matching funds to maintain the  route. However, a different JARC route funded through a partnership  with a neighboring county continues operation.

Selected JARC Recipients Identified Some Ongoing Funding and Service Challenges, as well as Possible Methods for Addressing Challenges

Selected recipients reported facing service and funding challenges in  continuing JARC activities after the statutory changes in 2012. FTA  officials explained that low-income transit users may live or work in areas  that are not adjacent to heavily-serviced transit areas, a situation that can  make JARC activities more expensive to provide than other transit  service. A majority of our selected recipients (25 of 34) reported service  challenges due to factors such as location of housing or employment  characteristics of low income individuals (e.g., working late-night hours or  weekends). Additionally, officials with almost all selected recipients (33 of  34) reported facing challenges pertaining to funding. For example, many  noted that they have had difficulty competing for funds against other  public services. Table 1 below highlights some of the service and funding  challenges our selected recipients identified, as well as examples of  methods some selected recipients used to address these challenges.

It Is Too Soon to Determine the Full Impact of Statutory Changes on JARC Activities

A substantial amount of dedicated JARC funds apportioned in 2012 and  earlier under SAFETEA-LU remains unspent. According to FTA data, as  of February 2017, there are approximately 265 federally funded JARC  program grants accounting for about $147.9 million still open with funds to  expend. As noted earlier, half of our selected recipients reported that they  have not yet expended all of their dedicated federal JARC funds. For  those with dedicated funding still available, they may not yet have faced  the decision of whether to continue to fund—or at what level to fund— eligible JARC activities under the urban or rural transit program, whether  to fund other eligible activities under those programs, or whether to seek  additional nonfederal funds to continue their eligible JARC activities.

Officials with nine of the selected recipients with dedicated funds  remaining said they have not yet finalized plans for continuing their  current JARC activities after the funds are expended and that they were  not sure if the activities would be maintained as-is or be adjusted. For  example, Sun Metro Mass Transit Department, a selected designated  recipient in Texas, reported that it plans to re-evaluate eligibility  requirements for its JARC activities and analyze its regional transit  priorities before making a final future funding decision. Also, officials with  RADAR Transit, a selected Virginia subrecipient, reported that they are  working to educate regional government officials about the benefits of the  current JARC activities in advance of dedicated funds being expended,  but officials are not sure whether they will be able to obtain local funds to  replace their expended monies. However, the remaining eight of the 17  selected recipients with dedicated funds remaining have developed plans  to continue their JARC activities after spending all of the funds.

Officials from 7 of the 17 selected recipients that have already expended  all of their dedicated funds stated that they are uncertain whether they will  be able to obtain long-term funding to continue to support JARC activities  into future years. For example, a selected subrecipient transit agency in  Michigan reported that to date the state has provided funding in the  annual budget to sustain its JARC activities. However, that funding is not  guaranteed to continue beyond year to year. Officials with a selected  Mississippi subrecipient nonprofit transportation provider explained that  the funding amounts they receive from local jurisdictions for their rural  JARC transit service can be inconsistent, making it challenging for them  to cover the local portion of their operating expenditures. Also, officials  with Charlottesville Area Transit, a selected Virginia subrecipient,  explained that the level of local and state funding, which they currently  use to help sustain expanded transit service hours started with a JARC  program grant, could change in the future. According to the officials, at  any time their jurisdiction could redirect municipal funds to non-transit  activities such as the city’s fire or police departments. Furthermore, these  officials reported that Virginia’s state gas tax, which provides transit  operating funds, is scheduled to sunset in 2019 and might not be  renewed. However, all seven selected recipients that have expended their  dedicated funds and face such uncertainty indicated that they are seeking  sustained, long-term funding sources to help them continue JARC  activities in the future.

We provided a draft of this report to DOT for comment. DOT had no  comments on this report.

We are sending copies of this report to the appropriate congressional  committees, the Administrator of FTA, the Secretary of the Department of  Transportation, and interested congressional committees. In addition, the  report is available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at 202-512-2834 or GoldsteinM@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found at the  last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: Selected Job Access and Reverse Commute (JARC) Designated Recipient and Subrecipient Interviews

Appendix II: GAO Contact and Staff Acknowledgements

In addition to the individual named above, the following individuals made  important contributions to this report: Heather MacLeod (Assistant  Director), Betsey Ward-Jenks (Analyst-in-Charge), Dwayne Curry,  Andrew Furillo, Delwen Jones, Elizabeth Wood, Rachel Frisk, Cheryl  Peterson, and Max Sawicky.

Question: How did the FTA communicate the MAP-21 changes?

Answer: The Federal Transit Administration (FTA) communicated changes that Moving Ahead for Progress in the 21st Century Act (MAP-21) made to public transportation programs, including the Job Access and Reverse Commute (JARC) program, to designated recipients through program guidance and outreach.

Question: What is an example of how the FTA communicated the changes?

Answer: For example, in an October 2012 Federal Register notice, FTA addressed the consolidation of the JARC program and its eligible activities (JARC activities) into the existing Urbanized Area Formula Program (urban transit program) and the Formula Grants for Rural Areas Program (rural transit program). Additionally, in 2014, FTA issued final guidance on JARC activities allowed under the urban and rural transit programs.

Question: What kinds of guidance did the FTA provide regarding the changes?

Answer: In addition to written guidance, FTA officials offered webinars and made staff available via in-person meetings, calls, and e-mail messages to answer any questions or concerns about the 2012 program change.

Question: To what extent did the JARC recipients find the FTA guidance to be sufficient?

Answer: Of the 34 selected JARC recipients (selected recipients) GAO interviewed, most (22) stated that they found the guidance provided to them, either by FTA directly or by other means, to be sufficient and effective in communicating program changes.

Question: To what extent did the MAP-21 changes affect funding?

Answer: The 34 selected recipients GAO interviewed also identified an array of challenges in continuing their JARC activities. All but one of the selected recipients specified funding challenges related to MAP-21 changes. In particular, 21 selected recipients reported JARC activities had difficulty competing against other public services, including transit services, for funds, and 17 reported year-to-year funding allocations for continued JARC activities could change. In addition, 25 selected recipients specified service challenges linked to the location of low-income housing and employment centers.

Question: What did GAO conclude as to the impact of the changes?

Answer: GAO found that it is too soon to determine the full impact of the statutory changes on JARC activities.

Question: Why is it too soon to determine the impact of the changes to JARC activities?

Answer: This finding is in part due to the number of grant recipients and subrecipients still spending dedicated funds apportioned before the 2012 statutory changes. Half of the 34 selected recipients GAO interviewed reported that they were still spending dedicated JARC funds, and recent FTA data indicate that as of February 2017, there were approximately 265 active program grants funding JARC activities.

Question: To what extent will the recipients be able to obtain long-term funding for JARC activities?

Answer: Officials from 7 of the 17 selected recipients that have already expended all of their JARC program funding stated that they are uncertain whether or not they will be able to obtain long-term funding to continue to support JARC activities into future years.

Question: What does the JARC program do?

Answer: Established in 1998, the JARC program, which was administered by FTA, provided grants to states and localities for improving the mobility of low-income individuals to and from jobs and employment-related activities.

Question: How was JARC changed in 2005?

Answer: In 2005, statute changed JARC into a formula program with dedicated funds apportioned by FTA.

Question: How did MAP-21 change the JARC program?

Answer: Then in 2012, MAP-21 repealed and consolidated the JARC program.

Question: How did this affect activities previously under the JARC program?

Answer: However, activities previously funded through the JARC program are still eligible for funding through other programs administered by FTA.

Question: Why did GAO examine the impact of MAP-21 changes?

Answer: The Fixing America's Surface Transportation Act included a provision for GAO to examine the impact of changes that MAP-21 had on public transportation.

Question: What does this report examine?

Answer: This report examines: (1) how FTA communicated the 2012 statutory changes to JARC activities to transit providers and (2) whether and how selected states and transit providers have continued to fund and provide JARC activities since the 2012 statutory changes.

Question: How did GAO source their data for this report?

Answer: GAO reviewed FTA program guidance. GAO interviewed FTA officials and 34 selected recipients of JARC funding, including transportation officials and transit providers, from six states (Arizona, Michigan, Mississippi, Oregon, Texas, and Virginia).

Question: How did GAO select the JARC recipients examined?

Answer: GAO judgmentally selected these JARC recipients for interviews to represent diverse geographic locations, including large-urban, small-urban, and rural funding areas within each state, among other factors.