GAO

United States General Accounting Office

Testimony

Before the Committee on International Relations, House of 

Representatives

For Release on Delivery

Expected at

10:00 a.m., EDT

Wednesday, 

October 27, 1999

FOREIGN ASSISTANCE

North Korean Constraints 

Limit Food Aid Monitoring 

Statement of Benjamin F. Nelson, Director, International 

Relations and Trade Issues, National Security and 

International Affairs Division

GAO/T-NSIAD-00-47

Page 1 GAO/T-NSIAD-00-47

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our recently completed 

assessment of the World Food Program procedures to monitor and report 

on U.S. government-donated food aid to North Korea. The United States is 

one of the largest donors of emergency food to North Korea, with 

cumulative donations since 1996 valued at about $365 million. Most of this 

food aid is channeled through the United Nation’s World Food Program 

and, as of June 1999, U.S. donations accounted for approximately 

88 percent of the World Food Program’s distributions to North Korea. 

According to the Department of State and the World Food Program, this 

food aid is being provided to address the widespread food shortage in 

North Korea. The Department of State also believes that these food 

donations may improve the climate of the bilateral relationship with North 

Korea on a host of issues, including negotiations regarding North Korea’s 

development of nuclear weapons and the maintenance of peace on the 

Korean peninsula. You had expressed concerns, Mr. Chairman, as to 

whether the World Food Program can adequately account for U.S. 

government-donated food aid to North Korea and prevent possible 

diversions of food aid to the military and ruling elite. My statement today is 

based on our recent report for the Committee on this topic.1

 Our objective 

was to examine the procedures the World Food Program has established 

and implemented to monitor and report on U.S. government-donated food 

aid provided to North Korea.

I want to emphasize at the outset that we recognize that food aid 

distributed by the World Food Program has played an important role in 

helping to alleviate hunger and saving lives around the world, and, as noted 

in our report, the World Food Program is performing a difficult role in 

North Korea.

Summary U.S. policy is that no food aid will be provided to North Korea if it cannot 

be adequately monitored. The World Food Program has established 

procedures to track and monitor food aid deliveries in North Korea. 

However, the North Korean government has not allowed the World Food 

Program to fully implement its procedures and, as a result, it cannot be 

sure that the food aid is being shipped, stored, or used as planned. 

1 Foreign Assistance: North Korea Restricts Food Aid Monitoring (GAO/NSIAD-00-35,

Oct. 8, 1999).
Page 2 GAO/T-NSIAD-00-47

Specifically, the North Korean government, which controls food 

distribution, has denied the World Food Program full access to the food 

distribution chain and has not provided required reports on food use. 

Consequently, the World Food Program cannot be sure it is accurately 

reporting on where U.S. government-donated food aid is being distributed 

in North Korea.

Mr. Chairman, I would like to now discuss the findings and 

recommendations of our report in more detail and the responses we 

received from the World Food Program, State, and the U.S. Agency for 

International Development.

North Korea Limits 

Ability of WFP to 

Assure Accountability

World Food Program (WFP) and State Department officials told us that 

there is no evidence of significant diversions of food aid to the military or 

governing elite in North Korea and that they have confidence in WFP’s 

ability to account for food aid in North Korea. However, while the WFP and 

U.S. government agencies believe that the bulk of the food reaches the 

needy, these organizations cannot provide assurance that food aid is being 

managed according to plan and is reaching the intended beneficiaries 

because North Korea controls distribution of the food aid and restricts 

WFP’s ability to monitor how the food is used. The North Korean 

government has imposed constraints on WFP monitors, who do not have 

random access to all stages of the food distribution process. U.S. private 

voluntary organizations, State, the U.S. Agency for International 

Development (USAID), and others have reported that North Korea has 

prevented effective monitoring of a significant portion of food donations, 

making it impossible to verify whether food has reached the target 

beneficiaries.

WFP Food Aid 

Accountability Standards

WFP donations generally become the property of the recipient government 

once they arrive in-country and, in most countries in which it operates, 

including North Korea, WFP is not directly responsible for food aid 

distribution. Food distribution is the responsibility of the recipient 

government. Nevertheless, WFP has a responsibility to its donors to ensure 

that donations are responsibly managed and reach targeted beneficiaries. 

WFP carries out its responsibility for accountability in part by negotiating 

implementation agreements with recipient governments—as in the case of 

North Korea—and nongovernmental organizations that distribute its food 

aid, and then monitoring and reporting on actual food use. WFP’s policy 

manual provides standard language for agreements between WFP and 
Page 3 GAO/T-NSIAD-00-47

recipient governments that stipulates basic accountability, monitoring, and 

reporting requirements to help achieve these accountability objectives.

Food aid monitoring, according to WFP’s policy manual, includes “frequent 

visits to [distribution] centers to inspect records and actual stocks” and 

“spot-checking actual [distributions] and observing distribution 

procedures.” WFP’s standard agreement language on monitoring further 

specifies that the recipient government “will facilitate travel within the 

country of WFP officers and consultants and their access to all ports, 

stores, transshipment and distribution points where WFP-supplied 

commodities are received, stored, handled and distributed, in order to 

observe the handling, distribution and use of the commodities and any 

other inputs provided by WFP, and to observe operations at all stages.” 

WFP agreements with North Korea incorporate this standard WFP 

language on monitoring and reporting. For example, North Korea agreed to 

facilitate WFP’s access to all distribution points and to allow WFP to 

observe the use of their food donations.

WFP Accountability for 

Food Aid Largely Depends 

on North Korean 

Government

WFP officials told us their operations in North Korea are essentially a 

North Korean government program, in which WFP’s role is to help North 

Korean authorities implement the program by providing advice, 

establishing internal control systems, monitoring to see if systems work, 

and training government officials in food management. One of the primary 

accountability mechanisms WFP relies upon in North Korea is the extreme 

degree of order imposed by the government on all facets of society. We 

were also told that diversions of food were unlikely because (1) the army 

and party elite have preferential access to national agricultural production 

(which is mainly rice and more desirable than WFP’s wheat donations);

(2) China and other countries provide food aid that can be used by the 

military and elite; (3) the army has its own agricultural production; 

(4) there is a culture of respect for state authority; and (5) intense 

regimentation of all sectors of society precludes theft. This “cultural 

element,” we were told, is a natural safeguard in WFP’s operations in North 

Korea because it minimizes the risk of diversions due to larceny and petty 

corruption.
Page 4 GAO/T-NSIAD-00-47

WFP’s Tracking System in 

North Korea Does Not 

Adequately Track Food 

From Time of Arrival to 

Distribution to Final 

Beneficiaries

WFP and the North Korean government established a food tracking system 

in 1997 to collect information from the government about its distribution of 

WFP food. WFP attempts to track food aid trucked from the ports to 

county warehouses using this system, which is administered by North 

Korean authorities. WFP and North Korean government authorities 

co-develop and co-sign food distribution plans and then use waybills to 

verify that the distribution to warehouses took place as agreed.

However, we found several weaknesses in this food tracking system. For 

example, North Korean authorities transport and store the food, complete 

the paperwork, manage the warehouses, and do not allow WFP to conduct 

unrestricted spot checks along the transportation route or storage sites. 

North Korean control of the tracking system and the access constraints 

they impose on WFP prevent WFP from independently verifying at each 

step of the process that the North Korean authorities have in fact delivered 

the food to agreed-upon warehouses.

In addition, the tracking system does not track all the donations. According 

to WFP officials in Rome and North Korea, the tracking system in North 

Korea was designed primarily to track food aid transported by trucks from 

the seaport to county warehouses. The system does not track the 

transportation of some food while it is on trains or barges before it is 

transferred to trucks for delivery to warehouses. Nor does the system track 

food during the period when it is transported from the warehouse to the 

estimated 43,000 institutions where the food is actually distributed to 

individual beneficiaries.

North Korea Precludes 

Effective Food Monitoring

According to WFP officials, North Korea has not allowed WFP 

independent, unrestricted access to monitor the food distribution process. 

WFP officials told us that North Korean authorities 

• do not allow WFP monitors to act independently and conduct random 

monitoring visits; 

• have not given WFP monitors complete information about the numbers, 

names, and location of institutions and the numbers of beneficiaries at 

locations receiving its food; and

• have rarely allowed WFP monitors to select the institutions they wish to 

visit.

WFP estimates that 90 percent of the 43,000 North Korean institutions 

receiving food aid have not received monitoring visits, and WFP monitors 
Page 5 GAO/T-NSIAD-00-47

have rarely been allowed to observe the actual distribution of food to 

beneficiaries. WFP officials told us that even with complete access, WFP 

would not attempt to monitor 100 percent of the institutions receiving its 

food but would instead monitor a smaller, randomly selected set of 

representative institutions. According to WFP officials in Rome, WFP has 

determined that a 10-percent sampling rate for monitoring is adequate. 

However, WFP said that, because of North Korean restrictions, it is unable 

to randomly select the institutions it monitors. As a result, WFP (1) cannot 

generalize its findings from those institutions to which it has been granted 

access by the government and (2) cannot randomly visit institutions about 

which it may have particular concerns.

Nevertheless, according to officials of the State Department, the U.S. 

Agency for International Development, the U.S. Department of Agriculture, 

and U.S. nonprofit organizations, WFP is doing a good job under difficult 

circumstances and they believe the food is getting to the beneficiaries. As 

evidence, WFP referred to the observations of WFP monitors and the 

Executive Director, based on her August review of WFP operations in 

North Korea, that (1) attendance at institutions receiving food aid—such as 

kindergartens and schools—has increased and (2) the condition of the 

children to whom the bulk of WFP food is supposed to go to has apparently 

improved.

Food Shipped to Counties 

Later Closed to WFP 

Monitors by North Korean 

Military

WFP’s agreements with North Korea stipulate that WFP shall have access 

to monitor wherever WFP food is distributed. These agreements are 

consistent with the frequently stated position of the Department of State—

that no U.S.-donated food shall be distributed that cannot be adequately 

monitored. WFP told us, however, that in 1998 North Korean authorities 

distributed at least 14,738 metric tons of WFP food to counties that they 

had previously agreed would be open to WFP monitors, but that after 

distribution the North Korean military blocked WFP from monitoring how 

the food was used. The ultimate disposition of the food remains unknown. 

WFP did not report food aid shipped to the subsequently closed counties as 

lost or stolen.

As a result of these North Korean actions, WFP stated that in May 1998 

WFP introduced a policy of “no access-no food.” WFP told us that the 

delivery of food to counties where WFP had no access was stopped, and 

the corresponding amount of food aid was deducted from the totals 

planned for the overall operation.
Page 6 GAO/T-NSIAD-00-47

WFP Subsidizes North 

Korean Deliveries of its 

Donations

To promote North Korean compliance with the agreed-upon distribution 

plans, and because WFP relies on the fuel-poor government to transport its 

food, WFP pays a fuel subsidy to the North Korean government of 

$8 for every ton of food transported by truck, which WFP told us is 

comparatively inexpensive. WFP reported that as of August 1999 it had 

paid North Korea over $5 million in fuel subsidies to help pay for 

transportation services and that it is due to pay $2.6 million more for food 

transported earlier in the year. If WFP learns, through its waybill system, 

that North Korean authorities have transported food to counties where 

monitoring is forbidden, WFP reduces the total fuel subsidy by an amount 

equal to the subsidy that would have been paid for transporting that food. 

For example, as a result of the 14,738 metric tons of food shipped to closed 

counties in 1998, WFP told us that in late 1998 it withheld $117,901 in fuel 

subsidies.

WFP Not Meeting 

Reporting 

Requirements, and 

Loss Rates May Not Be 

Accurate

WFP guidelines require that it report to donors on food use upon the 

completion of an emergency operation, and host governments are required 

to provide an audit report at the end of each emergency operation. We 

found that North Korea has not provided any audit reports to WFP as 

required by its agreements. This has affected WFP’s ability to accurately 

report back to its donors. Given North Korean constraints on WFP 

accountability procedures, WFP cannot be sure of the accuracy of its 

reports to donors on food use because it cannot independently verify 

where food aid has been provided.

WFP policy requires it, upon the completion of an emergency operation, to 

provide reports to donors on the use of food, including losses. WFP 

officials in Rome told us that it has distributed reports to donors on North 

Korea operations for 1995, 1996, and 1997 but that WFP’s project report for 

1997, though distributed, is incomplete. Its report for 1998 is late in part 

because North Korea has not provided food use information to WFP. 

WFP agreements with North Korea also specify that North Korea should 

provide an audit report upon the completion of an operation. These audit 

reports are intended to give WFP information about the beneficiaries, the 

quantity and condition of the food received, the locations where it was 

distributed, any losses, the government’s use of WFP subsidies, the 

nutritional impact on beneficiaries of WFP food donations, and lessons 

learned. North Korea has not provided any of the audit reports that are due 

to WFP for operations it has already completed.
Page 7 GAO/T-NSIAD-00-47

WFP policy further requires WFP monitors to observe distribution of food 

aid to verify government reports on food use, which together provide the 

basis for the Executive Director’s reports to donors. In North Korea, 

however, WFP cannot provide the independent check to ensure the 

accuracy of government reporting. WFP officials told us that the issue of 

North Korean reporting delays “has consistently been raised with the 

government.”

WFP, State, and USAID 

Responses to Our 

Recommendations

In our report, we made recommendations aimed at (1) improving 

accountability over food distributions that are intended to help ensure that 

the food is reaching the intended beneficiaries and (2) improving reporting 

by WFP on its work in North Korea. For example, we recommended that 

the Secretary of State, acting through the U.S. Representative at the U.S. 

Mission to the U.N. Agencies for Food and Agriculture in Rome, Italy, 

emphasize to the North Korean representative the importance of meeting 

North Korea’s commitments agreed to in its agreements with the World 

Food Program, including granting World Food Program staff improved 

access to track and monitor World Food Program food donations and 

providing required audit reports in a timely fashion.

To improve WFP’s reporting, we recommended that the Secretary of 

State—again, acting through the U.S. Representative at the U.S. Mission to 

the U.N. Agencies for Food and Agriculture in Rome, Italy—request that 

the World Food Program’s Executive Director provide the U.S. government 

comprehensive and timely reports on the use of U.S.-donated food in North 

Korea, including information on (1) North Korea’s monitoring restrictions; 

(2) the impact of these monitoring restrictions on the World Food 

Program’s ability to provide independent, accurate reports on food use; 

(3) the World Food Program’s efforts to persuade North Korean authorities 

to allow the World Food Program to perform independent monitoring; 

(4) North Korean responses to the World Food Program’s suggested 

improvements; and (5) the use by the World Food Program’s Executive 

Director of her authority to withhold food aid and fuel subsidies as one 

method of responding to North Korean-imposed constraints to effective 

accountability.

In their comments, the World Food Program generally agreed with our 

report findings, detailed its efforts to improve monitoring, noted strong 

congressional and administration support for the program, and stated that 

despite the difficulties of operating in North Korea, the humanitarian needs 

in North Korea were the primary consideration of the program. Both State 
Page 8 GAO/T-NSIAD-00-47

and USAID stated that they will work with the World Food Program and the 

North Koreans to implement our recommendations aimed at improving 

accountability over U.S. donations through improvements in monitoring 

and reporting. 

State and USAID also made some additional observations. For example, 

they believe the report relied on the most negative examples available and 

was overly critical of the World Food Program’s ability to provide 

accountability. In addition, USAID stated that famine conditions persist in 

North Korea and were concerned that our report could leave the 

impression that the food shortage in North Korea is over.

In our report, we pointed out that we were not overly critical of the World 

Food Program’s ability to account for food aid in the difficult environment 

of North Korea. Our assessment was based on information obtained from 

World Food Program officials in Rome and North Korea and the published 

reports of the U.S. government-funded consortium of private voluntary 

groups that have used WFP procedures to assist WFP in its monitoring of 

U.S. food aid in North Korea since 1997. WFP and the USAID- and 

USDA-funded Consortium are the most authoritative sources on the 

current conditions affecting WFP’s ability to account for U.S. 

government-donated food aid to North Korea.

In response to USAID’s comment that our report could leave the 

impression that the food shortage in North Korea is over, our report makes 

it clear that we did not assess the impact of the food shortage or North 

Korea’s food aid needs. As the report points out, our objective was to 

examine the procedures the World Food Program has established and 

implemented to monitor and report on U.S. government-donated food aid 

provided to North Korea. We did note, though, that there is not a consensus 

on either of these issues, which we feel is part of the fundamental challenge 

to accountability in North Korea. We have addressed these and other 

comments by WFP, State, and USAID in our report.
Page 9 GAO/T-NSIAD-00-47

Mr. Chairman, that completes my prepared statement. I will be pleased to 

respond to any questions you may have.

Contact and Acknowledgments

For future contacts regarding this testimony, please call Benjamin F. Nelson 

at (202) 512-4128. Key contributors to this testimony included Harold 

Johnson, Phillip Thomas, Ned George, and Christian Hougen.

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