US embassy cable - 04TEGUCIGALPA461

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000461 
 
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