Major Management Challenges and Program Risks
U.S. Agency for International Development Gao ID: GAO-03-111 January 1, 2003In its 2001 performance and accountability report on the U.S. Agency for International Development (USAID), GAO identified important management issues facing the agency. The information GAO presents in this report is intended to help sustain congressional and agency attention on continuing to make progress in addressing these challenges and ultimately overcoming them. This report is part of a special series of 23 reports on governmentwide and agency-specific issues.
USAID faces a number of performance and accountability challenges that affect its ability to implement its foreign economic and humanitarian assistance programs. USAID has recognized that it needs to address these problems and has made some progress, but further action is needed as follows: Since the early 1990s, GAO has reported that USAID has made limited progress in addressing its human capital management challenges. Some progress has been made, such as implementing annual foreign service recruitment plans. However, the agency has not established and integrated a comprehensive workforce plan with its strategic goals and objectives. Developing such a plan is critical due to a reduction in the agency's workforce during the 1990s. USAID faces difficulties in identifying and collecting data that would enable it to develop reliable performance measures and accurately report the results of its programs. USAID has taken several steps to try to overcome these difficulties, such as holding training seminars in field missions. However, although USAID has made a serious effort to develop improved performance measures, it continues to report numerical outputs that do not measure the impact of its programs. USAID's ability to become a high-performing organization is also affected by its information technology and financial management challenges. USAID has recognized these challenges and has demonstrated a commitment to address them, such as establishing a structure for the acquisition of information technology and improving its computer security deficiencies. However, USAID's agency managers continue to lack complete, reliable, and timely information needed to make sound, cost-effective decisions. In addition, the agency has had long-standing financial management weaknesses and has been unable to provide its managers with reliable financial information.
GAO-03-111, Major Management Challenges and Program Risks: U.S. Agency for International Development
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Performance and Accountability Series:
January 2003:
Major Management Challenges and Program Risks:
U.S. Agency for International Development:
GAO-03-111:
A Glance at the Agency Covered in This Report
The U.S. Agency for International Development (USAID), an independent
federal government agency, is charged with implementing foreign
economic and humanitarian assistance programs. USAID manages a
budget of about $7.5 billion annually and advances U.S. foreign
policy objectives through three programmatic areas:
* economic growth, agriculture, and trade;
* global health, including HIV/AIDS and other infectious diseases; and
* democracy, conflict prevention, and humanitarian assistance.
The agency works with a wide array of public and private partners to
implement its programs. USAID operates in more than 100 countries,
with resident staff in approximately 75 countries in four regions of
the world: sub-Saharan Africa, Asia and the Near East, Latin America
and the Caribbean, and Europe and Eurasia. Its staff often operate
in difficult environments and under evolving program demands.
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This Series:
This report is part of a special GAO series, first issued in 1999 and
updated in 2001, entitled the Performance and Accountability Series:
Major Management Challenges and Program Risks. The 2003 Performance
and Accountability Series contains separate reports covering each
cabinet
department, most major independent agencies, and the U.S. Postal
Service.
The series also includes a governmentwide perspective on transforming
the
way the government does business in order to meet 21st century
challenges
and address long-term fiscal needs. The companion 2003 High-Risk
Update
identifies areas at high risk due to either their greater
vulnerabilities
to waste, fraud, abuse, and mismanagement or major challenges
associated
with their economy, efficiency, or effectiveness. A list of
all of the
reports in this series is included at the end of this report.
[End of section]
GAO Highlights:
Highlights of GAO-03-111, a report to Congress included as part
of GAO‘s
Performance and Accountability Series
Why GAO Did This Report:
In its 2001 performance and accountability report on the U.S.
Agency for
International Development (USAID), GAO identified important
management
issues facing the agency. The information GAO presents in this
report
is intended to help sustain congressional and agency attention
on
continuing to make progress in addressing these challenges and
ultimately
overcoming them. This report is part of a special series of
reports on
governmentwide and agency-specific issues.
What GAO Found:
USAID faces a number of performance and accountability
challenges that
affect its ability to implement its foreign economic and
humanitarian
assistance programs. USAID has recognized that it needs to
address these
problems and has made some progress, but further action is
needed as
follows:
* Since the early 1990s, GAO has reported that USAID has made
limited
progress in addressing its human capital management challenges.
Some
progress has been made, such as implementing annual foreign
service
recruitment plans. However, the agency has not established
and integrated
a comprehensive workforce plan with its strategic goals and
objectives.
Developing such a plan is critical due to a reduction in the
agency‘s
workforce during the 1990s.
* USAID faces difficulties in identifying and collecting data
that would
enable it to develop reliable performance measures and
accurately report
the results of its programs. USAID has taken several steps
to try to
overcome these difficulties, such as holding training seminars
in field
missions. However, although USAID has made a serious effort to
develop
improved performance measures, it continues to report numerical
outputs
that do not measure the impact of its programs.
* USAID‘s ability to become a high-performing organization is
also
affected by its information technology and financial
management
challenges. USAID has recognized these challenges and has
demonstrated
a commitment to address them, such as establishing a
structure for the
acquisition information technology and improving its computer
security
deficiencies. However, USAID‘s agency managers continue to
lack
complete, reliable, and timely information needed to make
sound,
cost-effective decisions. In addition, the agency has had
long-standing
financial management weaknesses and has been unable to
provide its
managers with reliable financial information.
What Remains to Be Done:
GAO believes that USAID should:
* complete a workforce strategy for its civil service
employees and align
its staff to systematically support the agency‘s mission,
goals, and
objectives;
* improve its ability to develop reliable performance
measures that
accurately report program outcomes; and
* make further improvements in its information
technology systems,
and ensure that its financial management systems
comply with federal
requirements.
www.gao.gov/cgi-bin/getrpt?GAO-03-111.
To view the full report, click on the link above.
For more information, contact Jess T. Ford, Director,
International
Affairs and Trade, at (202) 512-4268 or fordJ@gao.gov.
Transmittal Letter:
Major Performance and Accountability Challenges:
GAO Contacts:
Related GAO Products:
Performance and Accountability and High-Risk Series:
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Transmittal Letter January 2003:
The President of the Senate
The Speaker of the House of Representatives:
This report addresses the major management challenges and program risks
facing the U.S. Agency for International Development (USAID) as it
works to carry out its foreign economic and humanitarian assistance
programs. The report discusses the actions that USAID has taken and
that are under way to address the challenges GAO identified in its
Performance and Accountability Series 2 years ago, and major events
that have occurred that significantly influence the environment in
which the agency carries out its mission. Also, GAO summarizes the
challenges that remain and further actions that GAO believes are
needed.
This analysis should help the new Congress and the administration carry
out their responsibilities and improve government for the benefit of
the American people. For additional information about this report,
please contact Jess T. Ford, Director, International Affairs and Trade,
at (202) 512-4268 or fordj@gao.gov.
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David M. Walker
Comptroller General
of the United States:
Signed by David M. Walker
[End of section]
Major Performance and Accountability Challenges:
In our January 2001 management challenges report, we reported that the
U.S. Agency for International Development (USAID) faced a number of
performance and accountability issues that affected the efficiency and
effectiveness of its programs.[Footnote 1] We reported that USAID‘s
human capital challenges affected its ability to effectively carry out
its foreign assistance mission. In addition, we noted that USAID faced
difficulties in identifying and collecting data that would enable it to
develop reliable performance measures and accurately report the results
of its programs. We also reported that USAID had not implemented an
integrated information management system or improved its financial
management systems to ensure that it has adequate internal controls.
Since our 2001 report, USAID has continued to take the following steps
to address these issues:
* USAID developed a workforce analysis in June 2001 that highlighted
several human capital challenges facing the agency, including the
agency‘s aging workforce and the resulting expected high rate of
attrition due to retirement. The workforce analysis was submitted to
the Office of Management and Budget as the first step in implementing
the President‘s initiative for agencies to restructure their
workforces. Although some improvements have been made, workforce
planning is not yet integrated into USAID‘s strategic plans.
* USAID has taken several steps to try to overcome its difficulties in
developing reliable performance measures that accurately report program
outcomes. For example, the agency is holding training seminars in field
missions and has reported that more than 1,200 people have been trained
either in programming or in performance management. However, USAID
continues to have problems with the timeliness and reliability of
performance measures.
* USAID‘s ability to become a high-performing organization continues to
be affected by challenges in information technology and financial
management. The agency has recognized that it needs to address its
problems and has made some progress, but further action is needed.
USAID‘s information technology systems do not provide managers with
accurate information, its processes for procurement of information
technology have not followed established guidelines, and its computer
systems need better security controls. Until USAID can fully resolve
its information technology issues, it will not be able to routinely
provide agency managers with the complete, reliable, and timely
information they need to make sound, cost-effective decisions. In
addition, USAID needs to continue to make improvements to ensure that
its financial systems comply with federal requirements and that the
systems provide reliable financial information.
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Better Manage Human Capital:
Since the early 1990s, we have reported that USAID has made limited
progress in addressing its human capital management issues. In 2001, we
reported that these issues could affect its ability to deliver
assistance efficiently, specifically in postemergency humanitarian
situations. A major concern is USAID‘s inability to establish and
integrate a comprehensive workforce plan with its strategic goals and
objectives. Developing such a plan is critical due to a reduction in
the agency‘s workforce during the 1990s and an expected high continuing
attrition. For example, as of September 30, 2002, 31 percent of USAID‘s
civil service workforce and 54 percent of its U.S. foreign service
employees were eligible to retire immediately or by September 30, 2007.
USAID has acknowledged that workforce planning remains a challenge for
the agency, especially since downsizing and budgetary constraints
during the 1990s took precedence over strategic workforce planning.
Lack of Comprehensive Workforce Plan Affects USAID‘s Human Capital
Management:
USAID has not integrated a comprehensive workforce plan with its
strategic goals and objectives. As its U.S. direct-hire staff levels
have declined, USAID has had to evolve from an agency that directly
implements projects to one that plans and monitors them. Mission
directors have become increasingly reliant on other types of employees,
such as personal service contractors, to manage mission projects
implemented by third parties. For example, as of September 2002,
foreign personal service contractors made up approximately 60 percent
of USAID‘s workforce and U.S. direct hires made up about 26 percent of
its workforce.[Footnote 2] (See fig. 1.) USAID‘s workforce includes
several other employment categories, such as U.S. personal service
contractors and foreign national direct hires.
Figure 1: USAID Workforce Profile, as of September 2002:
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[End of figure]
Notes:
’Other“ includes fellows and those employed under participating agency
service agreements and resource support service agreements.
This figure excludes the Office of the Inspector General.
Also, as figure 2 shows, USAID has had to adapt to a significant
decrease in the number of its U.S. direct-hire employees over the past
12 years while continuing to take on new responsibilities. For example,
as funding levels remained relatively stable, the number of U.S. direct
hires decreased from 3,262 in fiscal year 1990 to 1,947 in fiscal year
2000. In fiscal year 2001, the agency saw its first increase in U.S.
direct hires in more than a decade, and current employment of U.S.
direct hires is close to the agency‘s target level of approximately
2,000. In addition, USAID reported that employment targets for fiscal
year 2002 were not met because of a late start in recruiting, a lack of
medical or security clearances for new hires, and insufficient
qualified candidates.
Figure 2: USAID U.S. Direct-Hire Workforce Trends, Fiscal Years 1990
through 2002, and Program Funding Levels, Fiscal Years 1990 through
2002:
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Notes:
Workforce data exclude the Office of the Inspector General.
Program funding information is in constant fiscal year 2002 dollars.
Program funding includes money appropriated to the U.S. Department of
Agriculture for Title II, and Title III food programs administered by
USAID. Fiscal year 1990 also includes Title I funding, but after
January 1, 1991, the funds were administered by the U.S. Department of
Agriculture.
Program funding also includes supplementals.
Program funding does not include operating expenses and is not adjusted
for deobligations/reobligations, rescissions, transfers, or
miscellaneous trust funds.
Developing a comprehensive workforce plan is critical for USAID given
the reductions in personnel during the 1990s and the high number of
employees eligible to retire. According to the Inspector General, the
steady decline in the number of foreign service and civil service
employees with specialized technical expertise resulted in an
insufficient number of personnel with needed skills and
experience.[Footnote 3] Further, the Inspector General also reported
that less experienced personnel are managing increasingly complex
overseas programs. In addition, these issues affect USAID‘s ability to
effectively carry out its programs. For example, we reported in July
2002 that insufficient numbers of contract officers initially affected
USAID‘s ability to deliver reconstruction assistance in Central America
and the Caribbean.[Footnote 4]
Corrective Actions Under Way:
Recognizing these problems, USAID started implementing annual foreign
service recruitment plans that enable the agency to replace the number
of employees who are departing through attrition or retirement. In June
2001, USAID also submitted to the Office of Management and Budget a
workforce analysis that addressed issues such as the agency‘s aging
workforce and the expected high rate of attrition due to retirement. In
addition, the agency began hiring junior foreign service officers and
recruiting civil service professionals in key skill areas, such as
information technology, financial management, and contracting. USAID
also increased external training for senior managers and developed
internal training programs in leadership, operations management,
supervisory skills, and performance management.
USAID is addressing its lack of flexibility in reassigning staff and
hiring personal service contractors in postemergency situations. In
mid-2000, USAID‘s Bureau for Latin America and the Caribbean drafted a
’lessons learned“ analysis of the disaster recovery program‘s start-up
and offered recommendations for changes needed for a similar response
in the future. The USAID Administrator subsequently formed the
Emergency Response Council to conduct an agencywide review of its
experiences with international emergencies. In December 2001, the
council proposed several program and procedural reforms to provide more
flexibility in planning and implementing activities in postcrisis or
postemergency situations. In May 2002, the USAID Administrator approved
the council‘s recommendations in the areas of strategic planning and
programming, funding alternatives, and staffing.
To overcome staffing constraints in postemergency situations, a USAID
working group identified several existing mechanisms that could make
human resources more readily available for design, implementation, and
oversight. For example, in June 2002, USAID reported that the working
group identified two existing contracting mechanisms for procuring
short-term services and staff. In addition, to facilitate the
availability of USAID staff for reconstruction activities, the agency
has contracted with a firm to establish a skills database of all agency
personnel that would be available on short notice for deployment to the
field.
USAID has taken several steps to improve its human capital management,
but according to the Office of Management and Budget, much remains to
be done. For example, the agency has to complete a workforce strategy
for its civil service employees and align its staff to systematically
support the agency‘s mission, goals, and objectives. To help assist
USAID with its human capital concerns, the Inspector General is
conducting audits of the agency‘s human capital management. In
addition, we are currently conducting a comprehensive review of USAID‘s
workforce planning and management.
Develop Better Performance Data to Assess Its Programs:
USAID continues to face difficulties in identifying and collecting the
data that will enable it to develop reliable performance measures and
accurately report the results of its programs. Our work, and that of
the USAID Inspector General, has identified a number of problems with
the annual results data that USAID‘s operating units have been
reporting. USAID has acknowledged these concerns and has undertaken
several initiatives to correct them. Although USAID has made a serious
effort to develop improved performance measures, it continues to report
numerical outputs that do not measure the impact of its programs.
The Government Performance and Results Act of 1993[Footnote 5] requires
federal agencies to prepare performance plans that set program goals,
measure program performance against those goals, and report on
programs‘ progress. In 1995, USAID developed a performance reporting
system that monitored the progress of a program, process, or activity
toward its objective over time. USAID‘s performance monitoring system
required managers to (1) establish performance indicators, (2) prepare
performance monitoring plans, (3) set performance baselines, (4)
collect performance data, and (5) periodically assess data quality. As
reported by the Inspector General in April 2002, however, USAID
continues to struggle to develop performance measurement and reporting
systems that meet internal and external reporting
requirements.[Footnote 6]
Recent Inspector General reports have noted inadequacies in the quality
of the data reported as well as areas for improvement in the
performance monitoring plans of individual operating units. For
example, a 2001 Inspector General report concluded that all seven of
the units audited needed to improve their performance monitoring plans;
in one case, a unit‘s plan had not been updated since 1995.[Footnote 7]
In addition, USAID‘s data for performance management reports are not
current, covering the previous year rather than the year under review.
For example, in reviewing USAID‘s fiscal 2001 consolidated financial
statements, the Inspector General reported that program results related
to years prior to fiscal 2001, not to fiscal year 2001 itself.
Although, the reported results were based on the operating units‘ self-
assessments of programs meeting certain strategic objectives, USAID did
not disclose which or how many strategic objectives were not reported
or assessed.
Without accurate and reliable performance data, USAID has little
assurance that its programs achieve their program objectives and
related targets. In July 1999, we commented on USAID‘s fiscal year 2000
performance plan and noted that because USAID is dependent on
international organizations and thousands of partner institutions for
data, it does not have full control over how data are collected,
reported, or verified. Further, in April 2002, we reported that USAID
had conducted few evaluations of its experience in using various
funding mechanisms and types of organizations to achieve its objectives
around the world.[Footnote 8] Some of the essential information that
USAID would need to conduct such evaluations, such as data on the types
of implementing organizations, funding mechanisms, and objectives in
its various program areas and bureaus, is not complete or sufficiently
detailed. We concluded that with better data on these aspects of the
agency‘s operations, USAID managers and congressional overseers would
be better equipped to analyze whether USAID‘s mix of approaches takes
full advantage of nongovernmental organizations to achieve the agency‘s
objectives.
For some activities, developing performance indicators and assessing
results are inherently difficult. According to the Office of Management
and Budget, numerical output does not indicate the quality of the
program, and USAID needs to improve its ability to use this information
for decision-making. In 2001, we reported that, historically, USAID has
not spent much effort on assessing the results of its democracy and
governance programs, including its subsectors, such as rule of law
programs.[Footnote 9] For example, in April 2001, we reported that the
results of USAID‘s rule of law projects in the new independent states
of the former Soviet Union were not always apparent.[Footnote 10] Most
of the USAID projects we reviewed were reported in terms of project
outputs instead of results and sustainability. For 6 of the 11 major
projects we reviewed in Russia and Ukraine, available documentation
indicated that implementers reported project results almost exclusively
in terms of outputs. These outputs included the number of USAID-
sponsored conferences or training courses held, the number and types of
publications produced with project funding, or the amount of computer
and other equipment provided to courts. Short-term measures and
indicators alone do not enable USAID to monitor and evaluate the
sustainability and overall impact of the projects.
Corrective Actions Under Way:
USAID has taken a number of steps to correct the problems with its
reporting of performance results. In fiscal 2000, USAID revised its
automated directives system by rewriting policy guidance on strategic
planning, program implementation, and performance management and
reporting. In June 2000, we reported that USAID had made progress in
establishing outcome-oriented goals and developing indicators and
targets that help measure overall results.[Footnote 11] In January
2001, we reported that USAID‘s corrective actions included (1)
developing and disseminating lists of indicators that can be used by
its overseas offices seeking appropriate tools to measure performance,
(2) sending annual reporting guidance cables to operating units on the
types of data needed and the documentation required, (3) expanding the
publication of supplementary guidance to missions on managing data for
maximum quality and utility, and (4) holding training seminars for
field officers on managing for results. USAID continues to implement
these solutions. For example, USAID reported that in fiscal year 2001,
750 personnel were trained in the overview course on USAID programming
policies and nearly 500 had received performance management training.
The Office of Management and Budget also reported in fiscal year 2002
that USAID made progress in developing a systematic approach to
performance measurement; however, challenges remain. The structure,
included in the agency‘s annual performance plan, includes agency-level
indicators of general performance, such as increased economic growth,
reduced rates of HIV/AIDS, free and fair elections, and lower mortality
rates in disasters. In addition to monitoring performance related to
these higher level outcomes, USAID missions track ’intermediate
results“ that are more directly linked to its programs. Examples
include the number of small businesses receiving USAID-supported loans
or the number of people receiving emergency food relief. However, these
numerical outputs do not measure how well a program functions.
In 2001, USAID‘s Bureau for Policy and Program Coordination worked
closely with the Office of the Inspector General to develop an
appropriate performance management audit methodology for providing
guidance on needed improvements. However, USAID continues to struggle
with developing performance measurements and accurately reporting the
results of its programs. For example, in fiscal years 2001 and 2002,
the Inspector General conducted eight performance audits of selected
HIV/AIDS programs and in all instances found weaknesses at the mission
level.
Address Additional Challenges to Building a High-Performing
Organization:
USAID faces other agencywide challenges that hamper its ability to
become a high-performing organization. These challenges are to (1)
improve its information technology systems and (2) provide managers
with reliable financial information. USAID has recognized these
challenges and has demonstrated a commitment to address them.
Enhance Information Technology Systems:
USAID‘s information systems do not provide managers with the accurate
information they need to make sound and cost-effective decisions. The
USAID Inspector General has reported that its processes for procuring
information technology have not followed established guidelines, which
require executive agencies to implement a process that maximizes the
value and assesses the risks of information technology investments. In
addition, USAID‘s computer systems are vulnerable and need better
security controls. USAID management has acknowledged these weaknesses
and the agency is making efforts to correct them.
The information systems at USAID do not fully support its planning and
reporting requirements. According to the Inspector General, USAID
managers have had difficulty in consistently obtaining timely,
reliable, and complete financial and performance data. In 2001, we
reported that USAID did not have an integrated information management
system to effectively manage its programs.[Footnote 12] To correct this
weakness, the agency has deployed a new financial management and
accounting system at its headquarters. However, the Inspector General
reported that system users were not always able to readily obtain data
to manage operations because USAID focused its limited resources
primarily on implementation and operations rather than on reporting. To
address this concern, the agency has begun to implement a user-friendly
reporting tool and plans to focus more on reporting.
According to the Inspector General, USAID‘s processes for procuring
information technology have not followed established federal
guidelines.[Footnote 13] In addition, in 2001, we reported that USAID
did not have a process for prioritizing information technology
investments. Without such a process, the agency is at risk of
allocating resources for projects that do not minimize risk and
maximize return on investment. To assist in correcting this weakness,
the agency established a structure for the acquisition of information
technology. USAID‘s Business Transformation Executive Committee,
staffed with senior management members, is tasked with recommending,
coordinating, and overseeing agencywide investments in information
technology. The committee also is tasked with ensuring that the agency
has reliable systems that provide the information its management needs
to make informed decisions and facilitate compliance with legislative
requirements. The Inspector General continues to monitor USAID‘s
progress, but more work is needed. For example, the Inspector General
conducted a review of software development practices and recommended
that USAID‘s overseas missions (1) develop policies and procedures for
controlling the installation of software, (2) develop a process to
maintain a current inventory list, and (3) conduct an inventory of
locally developed software and submit it to headquarters.[Footnote 14]
USAID does not have adequate computer security controls in place to
mitigate the risks to its critical information systems. In 2002, the
Office of the Inspector General reported that computer security
deficiencies expose USAID resources and data to loss, theft,
alterations, or destruction.[Footnote 15] To improve its computer
security, the agency has taken steps that include updating security
policies and expanding security training. However, more work is needed
to ensure effective security.
Improve Financial Management Capabilities:
Although USAID has improved some areas of its financial management, it
needs to make additional improvements to produce timely and accurate
financial information for use by USAID managers in carrying out the
agency‘s programs around the world.
Fiscal year 2001 marked the first time that the USAID Inspector General
was able to express an opinion on three of USAID‘s financial
statements--the Balance Sheet, Statement of Changes in Net Position,
and Statement of Budgetary Resources. However, the opinions were
qualified and achieved only through extensive efforts to overcome
material internal control weaknesses. Thus, the progress made is not
necessarily sustainable. Further, the Inspector General remained unable
to express an opinion on USAID‘s Statement of Net Cost and Statement of
Financing, because the agency‘s financial management systems could not
produce accurate, complete, reliable, timely, and consistent financial
statement and performance information. USAID‘s inadequate accounting
systems make it difficult for the agency to accurately account for
activity costs and measure its program results.
In 2002, the Inspector General continued to report that USAID‘s
financial management systems do not meet federal financial system
requirements.[Footnote 16] Currently, USAID uses a variety of
nonintegrated systems that require data reentry, supplementary
accounting records, and lengthy and burdensome reconciliation
processes. In an attempt to mitigate this long-standing problem, USAID
recently deployed an off-the-shelf accounting system as a component of
its financial management system. However, USAID still lacks a fully
integrated financial management system and places a greater reliance on
manual processes, such as reconciliations, because data for the same
transactions are entered into multiple systems.
The Inspector General also reported in 2002 that while USAID had made
improvements in its processes and procedures, it still has several
material weaknesses and reportable conditions concerning internal
controls that impair the integrity of its financial information.
Specifically, the Inspector General reported that USAID‘s material
weaknesses include:
* financial systems that did not meet federal financial systems
requirements, applicable federal accounting standards, and standard
general ledger requirements at the transaction level;
* internal controls that did not provide reasonable assurance that the
Fund Balance with Treasury accounts were accurate and reliable; and:
* advances to grantees that were not properly controlled.
The Inspector General also reported that the agency needs to improve
its process for recognizing and reporting accounts receivable and its
internal controls over the processing of accounts payable at overseas
missions.
Effective financial systems and controls are necessary to ensure that
USAID management has timely and reliable information to make effective,
informed decisions and that assets are safeguarded. USAID has made
progress in correcting some of its systems and internal control
deficiencies and is in the process of revising its plan to remedy
financial management weaknesses as required by the Federal Financial
Management Improvement Act of 1996.[Footnote 17] To obtain its goal,
however, USAID needs to continue its efforts to resolve its internal
control weaknesses and to ensure that the planned upgrades to its
financial systems are in compliance with federal financial system
requirements.
[End of section]
GAO Contacts:
Subject covered in this report: Better manage human capital; ; Develop
better performance data to assess
its programs; Contact person: Jess T. Ford, Director; International
Affairs and Trade; (202) 512-4268; fordj@gao.gov.
Subject covered in this report: Enhance information technology systems;
Contact person: Joel C. Willemssen, Managing Director; Information
Technology; (202) 512-6408; willemssenj@gao.gov; ; Robert F. Dacey,
Director; Information Security Issues; Information Technology; (202)
512-3317; daceyr@gao.gov.
Subject covered in this report: Improve financial management
capabilities; Contact person: Gregory D. Kutz, Director; Financial
Management and Assurance; (202) 512-9095; kutzg@gao.gov.
[End of section]
Related GAO Products:
Performance and Accountability:
U.S. Agency for International Development: Status of Achieving Key
Outcomes and Addressing Major Management Challenges. GAO-01-721.
Washington, D.C.: August 17, 2001.
Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-01-256. Washington, D.C.: January 2001.
Observations on the U.S. Agency for International Development‘s Fiscal
Year 1999 Performance Report and Fiscal Years 2000 and 2001 Performance
Plans. GAO/NSIAD-00-195R. Washington, D.C.: June 30, 2000.
Observations on the U.S. Agency for International Development‘s Fiscal
Year 2000 Performance Plan. GAO/NSIAD-99-188R. Washington, D.C.: July
20, 1999.
Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO/OCG-99-16. Washington, D.C.: January
1999:
AID Management: Strategic Management Can Help AID Face Current and
Future Challenges. GAO/NSIAD-92-100. Washington, D.C.: March 6, 1992.
Foreign Assistance:
Foreign Assistance: Disaster Recovery Program Addressed Intended
Purposes, but USAID Needs Greater Flexibility to Improve Its Response
Capability. GAO-02-787. Washington, D.C.: July 24, 2002.
Foreign Assistance: USAID Relies Heavily on Nongovernmental
Organizations, but Better Data Needed to Evaluate Approaches. GAO-02-
471. Washington, D.C.: April 25, 2002.
Former Soviet Union: U.S. Rule of Law Assistance Has Had Limited
Impact. GAO-01-354. Washington, D.C.: April 17, 2001.
Foreign Assistance: Any Further Aid to Haitian Justice System Should Be
Linked to Performance-Related Conditions. GAO-01-24. Washington, D.C.:
October 17, 2000.
Foreign Assistance: Status of USAID‘s Reforms. GAO/NSIAD-96-241BR.
Washington, D.C.: September 24, 1996.
Foreign Assistance: AID Strategic Direction and Continued Management
Improvements Needed. GAO/NSIAD-93-106. Washington, D.C.: June 11, 1993.
Information Technology:
Critical Infrastructure Protection: Significant Challenges Need to Be
Addressed. GAO-02-961T. Washington, D.C.: July 24, 2002.
Information Security: Additional Actions Needed to Implement Reform
Legislation. GAO-02-470T. Washington, D.C.: March 6, 2002.
Information Technology: Enterprise Architecture Use Across the Federal
Government Can Be Improved. GAO-02-6. Washington, D.C.: February 19,
2002.
Computer Security: Improvements Needed to Reduce Risk to Critical
Federal Operations and Assets. GAO-02-231T. Washington, D.C.: November
9, 2001.
Information Resources Management: Initial Steps Taken but More
Improvements Needed in AID‘s IRM Program. GAO/IMTEC-92-64. Washington,
D.C.: September 29, 1992.
[End of section]
Performance and Accountability and High-Risk Series:
Major Management Challenges and Program Risks: A Governmentwide
Perspective. GAO-03-95.
Major Management Challenges and Program Risks: Department of
Agriculture. GAO-03-96.
Major Management Challenges and Program Risks: Department of Commerce.
GAO-03-97.
Major Management Challenges and Program Risks: Department of Defense.
GAO-03-98.
Major Management Challenges and Program Risks: Department of Education.
GAO-03-99.
Major Management Challenges and Program Risks: Department of Energy.
GAO-03-100.
Major Management Challenges and Program Risks: Department of Health and
Human Services. GAO-03-101.
Major Management Challenges and Program Risks: Department of Homeland
Security. GAO-03-102.
Major Management Challenges and Program Risks: Department of Housing
and Urban Development. GAO-03-103.
Major Management Challenges and Program Risks: Department of the
Interior. GAO-03-104.
Major Management Challenges and Program Risks: Department of Justice.
GAO-03-105.
Major Management Challenges and Program Risks: Department of Labor.
GAO-03-106.
Major Management Challenges and Program Risks: Department of State.
GAO-03-107.
Major Management Challenges and Program Risks: Department of
Transportation. GAO-03-108.
Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.
Major Management Challenges and Program Risks: Department of Veterans
Affairs. GAO-03-110.
Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.
Major Management Challenges and Program Risks: Environmental Protection
Agency. GAO-03-112.
Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.
Major Management Challenges and Program Risks: National Aeronautics and
Space Administration. GAO-03-114.
Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.
Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.
Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.
Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.
High-Risk Series: An Update. GAO-03-119.
High-Risk Series: Strategic Human Capital Management. GAO-03-120.
High-Risk Series: Protecting Information Systems Supporting the Federal
Government and the Nation‘s Critical Infrastructures. GAO-03-121.
High-Risk Series: Federal Real Property. GAO-03-122.
FOOTNOTES
[1] U.S. General Accounting Office, Major Management Challenges and
Program Risks: U.S. Agency for International Development, GAO-01-256
(Washington, D.C.: January 2001).
[2] Foreign personal service contractors are non-U.S. citizens
contracted by the U.S. government. U.S. direct hires are U.S. citizens
employed under the civil or foreign service personnel systems.
[3] USAID Office of the Inspector General, Semiannual Report to
Congress (Washington, D.C.: Oct. 31, 2001).
[4] U.S. General Accounting Office, Foreign Assistance: Disaster
Recovery Program Addressed Intended Purposes, but USAID Needs Greater
Flexibility to Improve Its Response Capability, GAO-02-787 (Washington,
D.C.: July 24, 2002).
[5] P.L. 103-62.
[6] In fiscal 2002, USAID changed its reporting requirements and a new
annual report replaced the Results Review and Resource Request reports
that had been a significant part of USAID‘s performance management
system. According to USAID, the new report is supposed to provide a
simplified reporting format for other required agency reports,
including a streamlined Congressional Budget Justification. Since this
is a recent reporting change, we cannot determine whether it is an
improvement.
[7] USAID Office of the Inspector General, Audit of Performance
Monitoring for Indicators Appearing in Selected USAID Operating Units‘
Results Review and Resources Request Reports, 9-000-01-005-P
(Washington, D.C.: Sept. 27, 2001).
[8] U.S. General Accounting Office, Foreign Assistance: USAID Relies
Heavily on Nongovernmental Organizations, but Better Data Needed to
Evaluate Approaches,
GAO-02-471 (Washington, D.C.: Apr. 25, 2002).
[9] GAO-01-256.
[10] U.S. General Accounting Office, Former Soviet Union: U.S. Rule of
Law Assistance Has Had Limited Impact, GAO-01-354 (Washington, D.C.:
Apr. 17, 2001).
[11] U.S. General Accounting Office, Observations on the U.S. Agency
for International Development‘s Fiscal Year 1999 Performance Report and
Fiscal Years 2000 and 2001 Performance Plans, GAO/NSIAD-00-195R
(Washington, D.C.: June 30, 2000).
[12] GAO-01-256.
[13] The Clinger-Cohen Act of 1996 requires executive agencies to
implement a process that maximizes the value and assesses management
risks involved in information technology investments.
[14] USAID Office of the Inspector General, Semiannual Report to
Congress (Washington, D.C.: Oct. 31, 2002).
[15] See footnote 14.
[16] USAID Office of Inspector General, Report on USAID‘s Consolidated
Financial Statements, Internal Controls and Compliance for Fiscal Year
2001, No. 0-000-02-006-F (Washington, D.C.: Feb. 25, 2002).
[17] P.L. 104-208.
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