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IdentifierCreatedClassificationOrigin
04TEGUCIGALPA239 2004-02-02 17:14:00 UNCLASSIFIED Embassy Tegucigalpa
Cable title:  

USAID/HONDURAS' RECOMMENDED PL 480, TITLE II

Tags:   EAID 
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021714Z Feb 04
					  UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000239 

SIPDIS

AIDAC

DEPT FOR AID/W, PASS COPY TO FREDERICK RUDOLPH VIGIL

E.O. 12958: N/A
TAGS: EAID
SUBJECT: USAID/HONDURAS' RECOMMENDED PL 480, TITLE II
FUNDING LEVELS FOR FY 2005.




1. Concurrence. As requested in DCHA/FFP's PL 480
Title II guidelines for Cooperating Sponsor Results
Reports and Resource Requests (CSR4), this is to
provide recommended funding levels, Bellmon
certification, certification of financial capabilities
of the cooperating sponsor, and environmental
compliance certification for CARE Honduras' FY 2005
Development Activity Program (DAP).



2. Annual Implementation Plan. CARE's FY 2005
Resource Request includes all the elements required in
DCHA/FFP guidelines for CSR4 reports. A Detailed
implementation Plan (DIP) for each program component
has been included in the CSR4. The annual estimate of
requirements (AER) was checked for completeness and
accuracy.



3. Funding Levels Recommendation. USAID/Honduras
recommends that the FY 2001-2005 CARE Title II DAP be
funded in FY 2005 as follows (tonnage and section
202(E) levels):

Commodities are in metric tons as requested in lines 8
and 17 of the FY 2005 Annual Estimate of Requirements
(AER).

COMMODITY Line 8 Line
17

Small Red Beans Dry Edible 1,064
1,060
Non Parboiled Milled Rice 1,764
1,760
Vegetable Oil 4Lt. Tin 340
340
Corn Soy Blend (CSB) 1,012
1,010
Cornmeal 363
363
Wheat NS 12,500
12,500

Total Metric Tons 17,043
17,030

Section 202(E) level recommended for FY 2005: US DOLS.
185,000.



4. Financial capabilities of CARE/H to manage
monetization proceeds. Based on audits of CARE's
financial and management systems conducted by U.S.
affiliated CPA firms, USAID/H states that: A) CARE/H
has in place a financial accounting system and internal
control structure that comply with generally accepted
accounting principles and USAID regulations and
financial requirements for grantees, B) the accounting
system reviewed can adequately control, account for and
report on the use of funds generated under the Title II
Monetization Program; and C) CARE/H has in place an
internal control structure that reasonably ensures
proper financial management of activities funded by
monetization proceeds. CARE's procedure manuals cover
all major aspects of operations, are distributed to all
relevant parties and are periodically reviewed for
improvement in light of changes in the organization and
its operating environment.



5. Bellmon Certification. The Mission Director has
determined that there will be adequate storage and
transportation available in Honduras at the time of
arrival of Title II commodities to prevent their
spoilage or waste. The Mission Director has also
determined that the distribution or sale of commodities
will not result in a substantial disincentive to, or
interfere with, domestic production or marketing.

CARE Honduras has its main warehouse in San Pedro Sula,
with a storage capacity of 6,500 MT, and it can
accommodate up to as 85 containers in its yard. The
warehouse has adequate ventilation, forklifts,
fumigation capabilities and other equipment for the
safe handling and storing of Title II commodities. The
12,500 MT of wheat to be monetized will be sold C.I.F.
Puerto Cortes, based on a previously signed contract ad
do not present any storage problems to CARE.

CARE targets the food aid to the poorest rural areas of
western Honduras where production is very low and
access to food at commercial prices is very limited.
Furthermore, the recent droughts and coffee crisis
affecting the region have negatively impacted the
income of these poor families and further undermined
their food security. Beneficiaries often do not have
the resources to procure food, and the Title II food
aid will not adversely impact local markets. Regarding
commodities for monetization, wheat is not produced
locally.



6. Environmental Review. The environmental status
report has been reviewed and approved by the Mission's
Environmental Officer.



7. Host Country Food for Peace Agreement. The Honduras
Food for Peace Agreement, signed on March 21, 2001,
incorporates by reference AID regulation 11, in clause
7.1. A copy of this document has been provided to
DCHA/FFP/DP.
Please advise if further information is required.

PALMER