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U.N.'s World Food Program Cried Poverty While Sitting on Cash Stockpile of More Than $1.22 Billion

Just weeks before it announced the onset of a global food crisis and the urgent need for donors to provide at least $775 million in additional funding, the World Food Program was sitting on a cash and near-cash stockpile of more than $1.22 billion.

The startling figure is contained in the latest audited statements of the WFP, which were endorsed by the WFP’s executive director, Josette Sheeran, on March 31, just a month before Sheeran announced at an international aid conference on April 22 that a "silent tsunami" in rising food prices demanded the huge infusion of cash for the WFP’s latest budget.

In a May 1 International Herald Tribune op-ed, U.N. Secretary-General Ban Ki-moon further declared that the WFP had just "$18 million cash in hand" in the wake of its appeal for emergency funding.

The audited statements are due to be presented to the annual Rome meeting of the WFP’s supervisory executive board in June.

Click here to see the audited financial statements.

The $1.22 billion figure, tallied as of Dec. 31, represents an increase of nearly $400 million over the WFP’s cash reserves a year earlier, as laid out in a report to the WFP’s governing executive board in June 2007.

Click here to see the investment performance report.

The cash stockpile was in addition to pledges for an additional $1.33 billion, all of which left the organization with more than $2 billion in anticipated cash and reserves just before it made its most recent urgent appeal.

In all, the auditors declared, the WFP had added an additional $91 million in cash assets over the 12-month period, leaving the U.N.’s emergency food supplier with roughly the same reserve assets it held in 2005.

Ever since the WFP announced the looming crisis of food aid for the world’s poorest people — based largely on dramatic international hikes in food costs — the World Food Program and other U.N. spokesmen, including Ban, have been steadily ratcheting up the tab required to top off the WFP’s budget to meet 2008 needs.

Initially, Sheeran announced that some $500 million was needed, though she added that would not fully fund such things as school food programs for some 20 million hungry youngsters. By the time of the aid conference, attended largely by U.N. agencies and World Bank representatives, the needed funding had risen to $775 million.

By the time the conference ended, Ban had put the shortfall at roughly $1 billion.

Ban also announced that a U.N. task force dealing with the food crisis would need as much as $1.6 billion in additional funding for seed programs and other means of expanding the global food supply.

On Thursday, President George W. Bush called on Congress to add $770 million in new international food aid to some $350 million in new aid he disclosed after the WFP announced the "silent tsunami" crisis.

Update:

Hours after FOX News’ publication of this story, WFP acknowledged the $1.22 billion in cash reserves, which it said “represents between three and four months of WFP's annual operating revenue.

"Of that $1.22 billion, more than 90 percent is either committed to ongoing food needs, or comprises mandatory reserve requirements necessary for prudent financial management of an organization of its size (i.e. unfunded liabilities for pensions),” Brenda Barton, WFP’s deputy director of communications and public policy strategy e-mailed FOX News.

“This system of cash management is akin to that of a family who has $2,000 in the bank, of which the majority is committed for mortgage, car payment and groceries," she wrote.

Barton also declared that the $800 million figure cited by FOX News is incorrect. "At the end of 2006 the equivalent cash and short term investment fund was $1.12 billion.” The cash reserve currently stands at $1.115 billion, WFP said.

Interest on the reserves, Barton said, are “plowed back” into WFP projects. She emphasized that the reserves, “ which allow for cash flow in critical situations, have been approved by donor governments.”