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FM USMISSION UN ROME
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RUCNDT/USMISSION USUN NEW YORK PRIORITY 0337
RHEHAAA/NSC WASHINGTON DC
RUEHRN/USMISSION UN ROME 1186

UNCLAS SECTION 01 OF 07 UN ROME 000043 
 
SIPDIS 
 
USAID FOR DCHA, FFP, OFDA, GH, AFRICA BUREAU AND ODP; STATE FOR 
IO/EDA, PRM/MCE; EB/IFD/ODA; USDA FAS FOR PHILBROOK, SHEIKH, 
GAINOR, AND FRIEDENBERG 
 
E.O. 12958: N/A 
TAGS: WFP AORC EAID PREF EAGR EFIN UN
SUBJECT: WORLD FOOD PROGRAM EXECUTIVE BOARD 2009 ANNUAL SESSION: THE 
FOUR F'S - FINANCIAL FRAMEWORK, FLEXIBLE FUNDING 
 
UN ROME 00000043  001.2 OF 007 
 
 
-------------------------------- 
 
Summary 
 
-------------------------------- 
 
 
 
¶1.  The 2009 Annual Session of the World Food Program (WFP) 
Executive Board was held in Rome from June 8-12.  The primary 
discussion and recurring theme centered on a review of WFP's 
financial framework aimed at better aligning it to the 2008-2011 
Strategic Plan.  The Board also took note of a record level 
 
$11.8 billion 2008-2009 biennial program of work.  Other key 
policy documents included approval of: the 2008 Annual 
Performance Report, which highlighted a number of improved 
accountability measures undertaken as well as weaknesses in 
setting measurable targets; and an extension of the current 
Strategic Plan to 2013.  Among financial and oversight matters, 
the Board approved the first set of International Public Sector 
Accounting Standards (IPSAS)-compliant audited annual accounts 
(a first for any UN agency)and considered the first annual Audit 
Committee Report directed to the Board.  The Board also approved 
one protracted relief and recovery operation (PRRO) for Kenya 
valued at $178.6 million and two budget increases:  $139.1 
million for the Ethiopia PRRO and $22.1 million for the 
Madagascar country program.  Lastly, two guest speakers, WHO 
Director-General Dr. Margaret Chan and UN High Level Task Force 
on the Global Food Crisis (HLTF) Coordinator Dr. David Nabarro, 
highlighted themes of UN inter-agency collaboration in the 
fields of nutrition, food security, and pandemic preparedness. 
End summary. 
 
 
 
--------------------------------------------- - 
 
Opening Session: Oversight Achievements 
 
--------------------------------------------- - 
 
 
 
¶2. In her opening remarks, WFP Executive Director Josette 
Sheeran conveyed the growing challenges WFP is facing, from the 
impact of the global financial crisis, which pushed an estimated 
100 million more people into hunger, to escalating emergencies 
around the globe, in particular the sudden scale-up in Pakistan, 
which has been the largest since the Rwandan crisis in 1994. 
Turning the focus on internal measures to improve governance and 
accountability, she highlighted a dozen major achievements, such 
as: WFP becoming the first UN agency to implement IPSAS and 
receive a clean opinion on its first audited accounts; the 
launch of the second generation of the WFP Information Network 
Global System (WINGS II); the formation of a Strategic Resources 
Allocation Committee to ensure alignment of donor resources and 
priority needs; the filling of key management positions; 
specialized training for Country Directors; and enhanced audit 
and internal communications.  (For full text: 
http://documents.wfp.org/stellent/groups/publ ic/documents/n 
ewsroom/wfp203424.pdf) 
 
 
 
¶3.  In his opening intervention, USDA Deputy Undersecretary 
(DUS)Burnham John (`Bud') Philbrook, focused on President 
Obama's theme of providing "people the tools they need to lift 
themselves out of poverty" by highlighting the tools the U.S. is 
using or developing to mount a rapid and effective response to 
enhance food security.  For example, using cash to purchase 
commodities locally and regionally provides flexibility and 
promotes opportunities for small-holder farmers to build and 
partake in markets.  The U.S. is also pursuing innovative and 
effective tools that expand response options, such as the 
development of emergency food products aimed at preventing 
rather than treating malnutrition, and the predictability of 
multi-year funding similar to the Mc-Govern Dole School Feeding 
 
UN ROME 00000043  002.2 OF 007 
 
 
program.  Philbrook noted that the words "flexible, effective 
and predictable" form a common thematic thread which links to 
everything that WFP is seeking in its ongoing review of WFP's 
financial framework.  The framework, he stressed, should ensure 
resource prioritization to the greatest needs as, 
notwithstanding high-level USG commitment to WFP, the U.S. could 
not presently guarantee its 2008 WFP funding levels ($2.071 
billion).  (For full text: 
http://usunrome.usmission.gov/viewer/article. aspidSite=1&ar 
ticle=/File2009_06/alia/a9060803.htm) 
 
 
 
--------------------------------------------- --------------- 
 
Special Guests:  WHO Director-General and HLTF Coordinator 
 
--------------------------------------------- --------------- 
 
 
 
¶4.  WHO Director-General Dr. Margaret Chan structured her 
remarks around the complementarities of work between WFP and 
WHO, touching on the areas of common vision, common ground and 
common challenges.  Both organizations must aim to prevent, as 
well as treat and cure, and foster self-reliance in government 
partners; operationally, both depend on rapid response and have 
synergies in health and nutrition programming; and both must 
work to address `health out of balance' in the face of 
increasing costs and diminishing global resources.  On the H1N1 
virus, Chan warned that although impact is likely to be moderate 
in wealthier countries, a bleaker picture should be anticipated 
for the developing world, and the UN will look to WFP's 
leadership in logistics and food delivery.  (For full text: 
http://www.who.int/dg/speeches/2009/wfp_execu tive_board_200 
90608/en/index.html) 
 
 
 
¶5. HLTF Coordinator Nabarro said the main goals of the HLTF are 
to increase production, access, and utilization of food in 
developing countries through the coordination of 22 UN agencies, 
the WTO, and Bretton Woods institutions as well as track 
investments for food security.  The HLTF's Comprehensive 
Framework for Action (CFA) presents the case for increasing the 
level of investment in agriculture, the need to get civil 
society involved, and developing stronger partnerships with the 
private sector.  Nabarro noted that WFP has a significant role 
to play vis-`-vis the HLTF through its vulnerability assessment 
mapping and its ability to provide technical assistance in the 
establishment of social safety nets. 
 
 
 
--------------------------------------------- ------------------ 
 
Annual Reports and Policy Issues: 2008 Annual Performance Report 
and Extension of 2008-2011 Strategic Plan 
 
--------------------------------------------- ------------------ 
 
 
 
¶6.  Despite being faced with unprecedented high food and fuel 
costs, in 2008 WFP received a record $5 billion in resources, 
allowing it to assist in a record number of ways:  feeding 102 
million beneficiaries (19 percent increase over 2007) with 3.9 
million metric tons of food (30 percent more than in the 
previous highest year 2004).  Although vulnerability analysis 
and mapping assessments increased by 80 percent and more project 
documents are meeting RBM guidelines, the U.S. expressed concern 
about the low number of projects actually setting measurable 
targets, and encouraged WFP to follow through on improving 
indicator definitions in order to report against the Strategic 
Results Framework. 
 
 
 
 
UN ROME 00000043  003.2 OF 007 
 
 
¶7. UN General Assembly Resolution 63/232 adopted on March 17, 
2009, urged UN Funds and Programs and Specialized Agencies to 
align operational planning from a triennial to a quadrennial 
cycle under the Quadrennial Comprehensive Policy Review (QCPR) 
"in order to provide better policy guidance to" these UN 
agencies.  To adjust to the new QCPR cycle, agencies are 
adopting language to extend strategic plans by two years and 
implement mid-term reviews.  The Board approved extending WFP's 
2008-2011 Strategic Plan until the end of 2013.  The U.S. 
stressed that, in the interim, WFP must aim to align the 
financial framework with the current Strategic Plan to ensure 
that donor contributions continue to target the greatest needs. 
 
 
 
--------------------------------------------- ------------------- 
 
Financial and Governance Matters: Financial Framework Review, 
Increasing Program of Work, and Unqualified Audit Opinion 
 
--------------------------------------------- ------------------- 
 
 
 
¶8. Financial Framework Review:  In the most charged session of 
the week, the Board considered a roadmap to ensure that WFP 
funding mechanisms appropriately support the full implementation 
of the 2008-2011 Strategic Plan under three areas of consensus: 
a) ensuring predictability and stability of funding; b) 
achieving a higher level of flexibility and effectiveness in 
resource usage; and c) reinforcing transparency in the 
allocation of resources.  During his intervention, USAID 
Democracy, Conflict and Humanitarian Assistance (DCHA) Deputy 
Assistant Administrator (DAA) Jon Brause stressed that improved 
definitional clarity and consistency in the use of WFP program 
categories is the first priority for the U.S.  He also cautioned 
that WFP must remain a voluntarily-funded organization, 
respecting the wishes of donors as to how the funds are used.  A 
move by the Netherlands to revise the draft decision to 
fast-track the roadmap toward a formal decision by November 2009 
was met with much reservation by WFP, which indicated the 
physical impossibility to comply, and by the rest of the Board. 
After an additional intercession by Brause about the need for a 
proper discussion the original consultation roadmap was accepted. 
 
 
 
¶9.  Update to 2008-2009 Biennial Management Plan:  The 2008-2009 
WFP Biennial Management Plan was approved in October 2007 with a 
Program of Work (PoW) of $5.41 billion.  In the fifth update 
issued at this session, WFP reported a 103 percent increase to 
$11.8 billion, excluding unforeseen emergencies.  Although food 
prices have stabilized since 2008, they remain substantially 
higher than the previous two biennia and the impact of the 
global financial crisis has increased the number or level of new 
or existing operational requirements in WFP's PoW.  WFP 
anticipates a funding level of $8.4 billion (or 71 percent of 
the PoW) for the remainder of 2009, having received over $5 
billion in 2008.   The U.S. appreciated WFP's efforts to 
continue foreign exchange hedging for euro expenditures. 
 
 
 
¶10.  Audited Annual Accounts:  In its first attempt at audited 
annual accounts under IPSAS, WFP received an unqualified opinion 
on 2008 statements.  WFP's adoption of IPSAS integrated with new 
WINGS II IT system puts WFP a projected three years ahead of any 
other UN agency, providing management and the Board with the 
tools to strengthen results-based management and risk assessment 
capabilities organization-wide.  Under IPSAS, WFP is for the 
first time using entirely accrual accounting and incorporating 
financial reporting of inventory levels such as commodities. 
With WINGS II in place, WFP will be expected to produce 2009 
financial statements without heretofore costly workarounds. 
Based on a couple outstanding audit recommendations, the U.S. 
reiterated its request that WFP produce a cost-benefit analysis 
and a costed timetable for deferred IPSAS implementation 
processes under WINGS II.  WFP pledged to continue to accord the 
 
UN ROME 00000043  004.2 OF 007 
 
 
highest attention to these areas. 
 
 
 
¶11.  Audit Committee Matters:  Following the adoption of new 
Audit Committee (AC) Terms of Reference (ToRs) in February 2009, 
the Board for the first time evaluated and summarily approved 
two AC candidates recommended by the Executive Director.  Under 
the new ToRs, the AC presented also for the first time its 
annual report directly to the Board.  The AC Chair, while highly 
complimentary of WFP on IPSAS, was equally critical on WFP's 
enterprise risk management (ERM), saying it had been "left to 
flounder" due to the lack of a robust control policy and 
internal control framework.  The U.S. contributed to a 14-member 
joint statement requesting management feedback on specific AC 
recommendations.  Management assured members that WFP would 
address the risk management gaps.  [In other oversight matters, 
the U.S. expressed strong support for a policy document on 
disclosure of internal audit reports.] 
 
 
 
----------------------------------- 
 
Evaluation Reports 
 
----------------------------------- 
 
 
 
¶12.  The Board reviewed the 2008 Annual Report of WFP's Office 
of Evaluation, which presented a synthesis of findings from 
seven evaluations (three strategic and four of WFP operations. 
It also included 12 decentralized evaluations carried out by 
regional bureaus and country offices.  Based on some of the 
issues arising out of a consultation in May, the U.S. 
contributed to and delivered a joint statement with Canada, 
France, Norway and the United Kingdom, which highlighted the 
need for policy prioritization, a corporate monitoring system, 
and budget mainstreaming of the evaluation function. 
 
 
 
¶13.  An evaluation examining the effectiveness of WFP livelihood 
recovery interventions concluded that WFP interventions were 
more effective in preventing asset loss than actually rebuilding 
livelihoods, on account of lack of funding and time.  In its 
statement, the U.S. recommended further development of WFP 
analysis in household economy, timing, exit strategy, role of 
the market, and overall strategy.  WFP is planning to select one 
country in each region to focus on improving all aspects of 
program design.  This issue exemplifies the ongoing debate on 
how to bring life-saving relief and livelihoods together and 
will need to be included in the financial framework review 
discussion on program categories. 
 
 
 
¶14. Evaluation summary reports were also considered for three 
projects: for the Mozambique Country Program, the U.S. was 
pleased to see the handover of the school feeding program on 
track; for the Burkina Faso PRRO, the U.S. commended WFP's work 
to combat under-nutrition and asked for additional information 
on its collaboration in the National Nutrition Policy; and for 
the Liberia PRRO, the U.S. encouraged WFP to focus on monitoring 
and evaluation and transition issues. 
 
 
 
--------------------------------------------- --------- 
 
Highlights from Regional Presentations and Programs 
 
--------------------------------------------- --------- 
 
 
 
¶15. Regional and Country Directors highlighted issues and 
 
UN ROME 00000043  005.2 OF 007 
 
 
presented updates as follows: 
 
 
 
A) In Eastern and Southern Africa, a multitude of factors have 
combined to create very complex hunger equations.  In the Horn 
of Africa, 18 million will need relief assistance in 2009; an 
upsurge in violence in Somalia is creating large numbers of 
displaced/refugees in the country and in neighboring Kenya. 
Other regional challenges include 142,000 IDPs in the Democratic 
Republic of Congo, and floods in Southern Africa have affected 
over 1 million people.  The global financial crisis continues to 
impact critical sectors such as mining, tourism, exports, and 
remittances in the already vulnerable context of HIV/AIDS.  An 
estimated $648 million is needed to cover immediate 
requirements; WFP is seeking innovative solutions like 
pre-positioning, local procurement, Purchase for Progress, 
cash/vouchers, hand-over, and capacity building to meet needs. 
 
 
 
B) In Sudan, WFP is refocusing assistance toward recovery.  Some 
expelled NGOs may have the possibility to return under new 
registration.  A Special Operation to create hubs in the deep 
field for longer-term WFP/NGO use will allow for better-tailored 
assistance.  The 2009 program, totaling $800 million, is 
currently funded at 59 percent. 
 
 
 
C) In West Africa, although there are increasing needs, with 
food prices higher in some areas than the same time last year, 
opportunities such as cash and voucher programs are also 
emerging, for example in Burkina Faso.  The WFP Country Director 
explained the rationale, targeting and design of the 
intervention, particularly its synergy with health programming 
(i.e., the draw to health clinics created by on-site voucher 
distribution), and the sense of dignity offered to beneficiaries 
(resulting from the ability to go to the store and shop rather 
than receive a hand-out).  Some Board members registered 
concerns over funding shortfalls and future outlook given the 
perceived difficulty for scale-up and hand-over. 
 
 
 
D) In Asia, increased needs and costs in Pakistan and high 
security risks across the region were highlighted (all countries 
except Laos and Cambodia are in a security phase).  Sixty-two 
percent of the world's under-nourished are in this region which, 
with 34 million, also has the highest number of children out of 
school.  Innovative activities to combat high food prices 
include advance procurement of rice and use of blended, 
fortified food.  Pakistan was also the subject of two subsequent 
Board sessions:  during the annual security report, WFP briefed 
the Board on the June 10 bombing of the UN-designated hotel in 
Peshawar where one WFP Security Officer was injured; during the 
closing session, the Deputy Regional Director was joined via 
telcon by Logistics Officers in Islamabad for a planning update. 
 
 
 
 
E) In the Middle East, Eastern Europe and Central Asia, 
challenges to food security include reduced remittances caused 
by the financial crisis, conflict and civil unrest, natural 
disasters and climate change.  Added activities include 
expansion of cash and voucher programs, capacity support to 
governments, climate change study and adaptation, and 
partnerships in public and private sectors. 
 
 
 
F) In Latin America and the Caribbean, the focus was on the 
impact of the global economic crisis on the nutritional status 
of the most vulnerable populations due to, e.g., increasing 
unemployment and decreasing remittances.  Natural disasters 
continue to challenge food security.  WFP is working closely 
with governments to fill critical gaps and find opportunities 
 
UN ROME 00000043  006.2 OF 007 
 
 
within safety nets, to promote South-South cooperation, and to 
support purchase from smallholders for school feeding programs 
(e.g., in Brazil).  The funding shortfall stands at about $125 
million, or two-thirds of total needs. 
 
 
 
¶16.  Project Approvals:  A PRRO was approved for Kenya (195,000 
metric tons for 474,000 beneficiaries valued at $178.6 million). 
 Two budget increases were also approved: for the Madagascar 
Country Program, a $22 million increase to cover a two-year 
extension in time; and for the Ethiopia PRRO, a $139.1 million 
increase to address increased vulnerability (the U.S. believes 
this vulnerability is underreported).  A draft Country Program 
for Uganda was reviewed and should be approved in November. 
 
 
 
--------------------------------- 
 
Staff Movements 
 
--------------------------------- 
 
 
 
¶17. At the closing session, key staff movements were announced: 
 
 
 
-- Amer Daoudi will become Sudan Regional Director while Martin 
Ohlsen will replace Daoudi as Director, Transport and Logistics; 
 
-- Pedro Medrano, currently Regional Director for Latin America/ 
Caribbean, will become WFP/New York Director; 
 
-- Kenro Oshidari, currently Sudan Regional Director, will 
become Asia Bureau Regional Director; 
 
-- Nicole Menage is Director, Procurement Division; and 
 
-- Sean O'Brien is Deputy CFO. 
 
 
 
----------------------------------- 
 
USDEL Side Meetings 
 
----------------------------------- 
 
 
 
¶18. USDEL members included: for USDA,  DUS Burnham John (`Bud') 
Philbrook, Pat Sheikh and Babette Gainor; for USAID, DCHA DAA 
Jon Brause, Food for Peace Director Jeff Borns,  Dale Skoric, 
Mary Beth Brennan, and Patterson Brown (Brussels); and for State 
Katherine Perkins (PRM) and  John Tuminaro (IO).  The USDEL held 
various side meetings with senior WFP staff on, among others: 
 
 
 
A) Funding:  The U.S. concurred with WFP that financial 
framework discussions should focus on clarifying program 
categories without drastically altering the current framework. 
 
 
 
B) Horn of Africa:  Monitoring and reporting, assessment 
validity and port congestion were discussed with WFP/Ethiopia 
Directors and the Ethiopian Minister for Disaster and Food 
Security.  Having taken over the CARE caseload, WFP now has 
3.4-3.5 million beneficiaries in Somalia, where keeping capacity 
in place to treat malnutrition, for example, in Hiran, remains 
difficult.  Erratic rains, urban food insecurity and the level 
of the grain reserve in Kenya also remain key areas of concern. 
 
 
 
UN ROME 00000043  007.2 OF 007 
 
 
 
C) Asia:  In Sri Lanka, access is improving.  In Burma, the UN 
Country Team is deciding whether or not to wait until after 
elections next spring to redesign the program.  In the 
Philippines, the deteriorating situation of large IDP 
populations was also highlighted. 
 
 
 
D) Communications: Ways of enhancing public visibility of U.S. 
contributions were the main focus, with the U.S. encouraging WFP 
to tap into current interest in the area of food security. 
 
 
 
¶19. USUN Rome Comment: USUN Rome thanks all field and Washington 
staff who contributed with comments and key input on project and 
evaluation documents, providing depth to U.S. interventions.  As 
the toll of the world's economic downturn is still being 
evaluated, the U.S. will continue to monitor closely WFP's PoW 
for 2009, working with other concerned Board members to ensure 
that resources are directed to priority needs and that WFP 
maintains its expertise in delivering emergency food aid.  To 
this end, the U.S. will also use financial framework 
consultations with WFP to target improvements in the application 
of program categories.  Given the Obama Administration's 
priority on addressing poverty and hunger, WFP remains a strong 
partner to help achieve U.S. objectives in the evolving USG 
strategy to enhance global food security. 
 
 
 
¶20. Minimize considered. 
BRUDVIG