Foreign Aid Reform
Comprehensive Strategy, Interagency Coordination, and Operational Improvements Would Bolster Current Efforts Gao ID: GAO-09-192 April 17, 2009In January 2006, to better align foreign assistance programs with U.S. foreign policy goals, the Secretary of State appointed the Administrator of the U.S. Agency for International Development (USAID) to serve concurrently as Director of Foreign Assistance (DFA) and gave the DFA authority over all Department of State and USAID foreign assistance funding and programs. The Office of the Director of Foreign Assistance (State/F) was given responsibility for reforming foreign assistance by, among other things, consolidating State and USAID foreign assistance processes. GAO was asked to (1) examine State/F's key efforts to consolidate State and USAID foreign assistance processes and (2) identify any key challenges that affect State/F's reform of foreign assistance. GAO evaluated budget, planning, and other documents and interviewed agency officials in Washington, D.C.; Ethiopia; Haiti; Jordan; Kenya; Peru; and Ukraine.
Since June 2006, in its efforts to consolidate State and USAID foreign assistance processes, State/F has implemented certain key practices that are characteristic of successful organizational transformations--for example, developing a mission statement and involving employees. In addition, State/F has taken several steps to consolidate State and USAID planning and budgeting processes--for example, instituting common program definitions for the use of foreign assistance funds to collect, track, and report on data related to program funding and results. State/F also began developing annual operational plans, based on the common program definitions, to serve as annual expenditure plans, performance plans, and performance reports for State and USAID foreign assistance projects worldwide and to provide descriptive information about other U.S. government agencies' foreign assistance programs. Moreover, State/F initiated a pilot program for developing a 5-year country assistance strategy (CAS) intended to provide a comprehensive view of all U.S. foreign assistance activities in every country in which U.S. resources are targeted. Further, beginning with fiscal year 2008, State/F implemented a joint State-USAID foreign assistance budget process to bring needed coherence of program activities and accountability for resources. Finally, State/F established an integrated State-USAID workforce to direct the consolidation of State and USAID foreign assistance operations. Despite this progress, State/F faces challenges that could constrain its efforts to reform foreign assistance. For example, State/F lacks time frames for developing a comprehensive U.S. foreign assistance strategy--one of its assigned responsibilities--and fully implementing the 5-year CAS. As a result, State/F has limited capacity to demonstrate progress in these key reform efforts. State/F also lacks a clear, consistent strategy for communicating with USAID and State employees about its efforts, leading to confusion among staff and hindering management-staff relations; although State/F has devised an initial plan to address this challenge, it has not yet carried out this plan. In addition, State/F's operational plans do not adequately describe some of USAID's regional foreign assistance activities, and consequently senior management may lack a holistic overview of foreign assistance resources needed to make informed trade-offs among various priorities. Further, the goals and measures in State/F's country operational plans sometimes do not align with those of other agencies providing foreign assistance in the country, limiting State/F's assurance that all U.S. foreign assistance funds in the country are strategically tied to broader U.S. foreign policy goals in the country. Finally, both a 2008 State/F internal review and GAO found that State/F had not yet clearly defined the roles of some of its employees and organizational units and had not matched all employees' skills with their positions. State/F has taken initial steps in response to the internal report's findings, including defining the roles and responsibilities of various executive and managerial positions and organizational units, but has not yet done so for all State/F staff, and has not developed a long-term workforce management plan to address workforce planning challenges.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-192, Foreign Aid Reform: Comprehensive Strategy, Interagency Coordination, and Operational Improvements Would Bolster Current Efforts
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
April 2009:
Foreign Aid Reform:
Comprehensive Strategy, Interagency Coordination, and Operational
Improvements Would Bolster Current Efforts:
GAO-09-192:
GAO Highlights:
Highlights of GAO-09-192, a report to congressional requesters.
Why GAO Did This Study:
In January 2006, to better align foreign assistance programs with U.S.
foreign policy goals, the Secretary of State appointed the
Administrator of the U.S. Agency for International Development (USAID)
to serve concurrently as Director of Foreign Assistance (DFA) and gave
the DFA authority over all Department of State and USAID foreign
assistance funding and programs. The Office of the Director of Foreign
Assistance (State/F) was given responsibility for reforming foreign
assistance by, among other things, consolidating State and USAID
foreign assistance processes. GAO was asked to (1) examine State/F‘s
key efforts to consolidate State and USAID foreign assistance processes
and (2) identify any key challenges that affect State/F‘s reform of
foreign assistance. GAO evaluated budget, planning, and other documents
and interviewed agency officials in Washington, D.C.; Ethiopia; Haiti;
Jordan; Kenya; Peru; and Ukraine.
What GAO Found:
Since June 2006, in its efforts to consolidate State and USAID foreign
assistance processes, State/F has implemented certain key practices
that are characteristic of successful organizational transformations”
for example, developing a mission statement and involving employees. In
addition, State/F has taken several steps to consolidate State and
USAID planning and budgeting processes”for example, instituting common
program definitions for the use of foreign assistance funds to collect,
track, and report on data related to program funding and results.
State/F also began developing annual operational plans, based on the
common program definitions, to serve as annual expenditure plans,
performance plans, and performance reports for State and USAID foreign
assistance projects worldwide and to provide descriptive information
about other U.S. government agencies‘ foreign assistance programs.
Moreover, State/F initiated a pilot program for developing a 5-year
country assistance strategy (CAS) intended to provide a comprehensive
view of all U.S. foreign assistance activities in every country in
which U.S. resources are targeted. Further, beginning with fiscal year
2008, State/F implemented a joint State-USAID foreign assistance budget
process to bring needed coherence of program activities and
accountability for resources. Finally, State/F established an
integrated State-USAID workforce to direct the consolidation of State
and USAID foreign assistance operations.
Despite this progress, State/F faces challenges that could constrain
its efforts to reform foreign assistance. For example, State/F lacks
time frames for developing a comprehensive U.S. foreign assistance
strategy”one of its assigned responsibilities”and fully implementing
the 5-year CAS. As a result, State/F has limited capacity to
demonstrate progress in these key reform efforts. State/F also lacks a
clear, consistent strategy for communicating with USAID and State
employees about its efforts, leading to confusion among staff and
hindering management-staff relations; although State/F has devised an
initial plan to address this challenge, it has not yet carried out this
plan. In addition, State/F‘s operational plans do not adequately
describe some of USAID‘s regional foreign assistance activities, and
consequently senior management may lack a holistic overview of foreign
assistance resources needed to make informed trade-offs among various
priorities. Further, the goals and measures in State/F‘s country
operational plans sometimes do not align with those of other agencies
providing foreign assistance in the country, limiting State/F‘s
assurance that all U.S. foreign assistance funds in the country are
strategically tied to broader U.S. foreign policy goals in the country.
Finally, both a 2008 State/F internal review and GAO found that State/F
had not yet clearly defined the roles of some of its employees and
organizational units and had not matched all employees‘ skills with
their positions. State/F has taken initial steps in response to the
internal report‘s findings, including defining the roles and
responsibilities of various executive and managerial positions and
organizational units, but has not yet done so for all State/F staff,
and has not developed a long-term workforce management plan to address
workforce planning challenges.
What GAO Recommends:
GAO is making seven recommendations to enhance State-USAID
organizational transformation, interagency coordination and
collaboration, planning processes, and workforce management. State and
USAID generally acknowledged or agreed to consider six of the seven
recommendations but asserted they had met the one related to regional
planning. GAO maintains this recommendation is valid; it is important
that an agency clearly capture all relevant programs and activities in
its planning processes.
View [hyperlink, http://www.gao.gov/products/GAO-09-192] or key
components. For more information, contact Denise Fantone at (202) 512-
4997 or fantoned@gao.gov; or David Gootnick at (202) 512-3149 or
gootnickd@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
State and USAID Have Taken Steps to Support Organizational
Transformation, Develop Consolidated Foreign Assistance Planning and
Budgeting Processes, and Establish State/F Workforce:
State/F Faces Implementation Challenges Related to Organizational
Transformation, Planning and Budgeting, and Workforce:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: U.S. Departments, Agencies, and Other Entities That
Provide Foreign Assistance:
Appendix III: State/F Information Systems:
Appendix IV: Foreign Assistance Framework:
Appendix V: Comments from the Department of State:
Appendix VI: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Budget Accounts and Authority under State/F Budget and
Planning Approval Processes, Fiscal Year 2008:
Table 2: Key Foreign Assistance Planning and Reporting Documents:
Table 3: Key Practices and Implementation Steps For Mergers And
Organizational Transformations:
Figures:
Figure 1: FACTS and FACTS Info Data Flow Chart:
Figure 2: Excerpt of State/F's Standardized Program Structure:
Abbreviations:
CAS: country assistance strategy:
COO: Chief Operating Officer:
CT: counterterrorism:
DFA: Director of Foreign Assistance:
DOD: Department of Defense:
FACTS: Foreign Assistance Coordination and Tracking System:
foreign assistance framework: Framework for U.S. Foreign Assistance:
GHAI: Global HIV/AIDS Initiative:
MCC: Millennium Challenge Corporation:
State: Department of State:
State/F: Office of the Director for Foreign Assistance:
USAID: U.S. Agency for International Development:
WMD: weapons of mass destruction:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 17, 2009:
The Honorable Robert Menendez:
Chairman:
Subcommittee on International Development and Foreign Assistance,
Economic Affairs, and International Environmental Protection:
Committee on Foreign Relations:
United States Senate:
The Honorable Daniel K. Akaka:
Chairman:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Homeland Security and Government Affairs:
United States Senate:
The Honorable Howard L. Berman:
Chairman:
Committee on Foreign Affairs:
House of Representatives:
In January 2006, the Secretary of State announced a major
transformation in the U.S. government's procedures for directing and
managing foreign assistance programs. The Secretary noted that U.S.
foreign assistance programs were fragmented among multiple Department
of State (State) bureaus and offices and between State and the U.S.
Agency for International Development (USAID). The Secretary observed
that this fragmentation made it more difficult to plan coherently and
risked conflicting or redundant efforts and wasted resources. To better
align U.S. foreign assistance with broader foreign policy goals, the
Secretary created the position of Director of Foreign Assistance
(DFA),[Footnote 1] reporting to the Secretary of State at a level
equivalent to the rank of Deputy Secretary of State. The Secretary gave
the DFA authority over all State and USAID foreign assistance funding
and programs and charged the DFA with providing overall leadership to
foreign assistance delivered through other entities.[Footnote 2]
In June 2006, State's Office of the Director of Foreign Assistance
(State/F) was created to carry out the DFA's responsibilities and focus
the use of foreign assistance on achieving the Secretary's
transformational diplomacy goal: "to help build and sustain democratic,
well-governed states that will respond to the needs of their people,
reduce widespread poverty, and conduct themselves responsibly in the
international system."[Footnote 3] State/F was given responsibility for
developing, among other things,
* a coherent, coordinated U.S. government foreign assistance strategy;
* multiyear country-specific assistance strategies and annual country-
specific operational plans;
* consolidated policy, planning, budget, and implementation mechanisms
and staff functions required to provide leadership to USAID and State
foreign assistance; and:
* guidance for foreign assistance delivered through other U.S.
government agencies.
In this context, you asked us to (1) examine key actions that State/F
has taken to reform and consolidate State and USAID foreign assistance
processes and (2) identify any key challenges that affect State/F's
reform of foreign assistance. At your request, in October 2008 we
issued a legal opinion on the delegation of authorities to the DFA.
[Footnote 4] Additionally, in November 2008, we issued a correspondence
on State/F's foreign aid information systems recommending that the
Secretary of State direct the DFA to use best practices for risk
management procedures for two information systems currently managed by
State/F.[Footnote 5] (See app. III for details on State/F's information
systems and the status of our recommendations.)
In preparing this report, we examined and analyzed budget, planning,
management, and workforce plans and documents. We also interviewed
officials at State and USAID headquarters in Washington, D.C., and at
six U.S. embassies and USAID missions in Ethiopia, Haiti, Jordan,
Kenya, Peru, and Ukraine; the USAID missions in Kenya, Peru, and
Ukraine have responsibilities for activities in several countries
throughout their respective regions. We conducted this performance
audit from May 2008 to April 2009 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Appendix I contains a more detailed description of our scope and
methodology.
Results in Brief:
State/F has taken a number of actions to reform and consolidate State
and USAID foreign assistance processes. These actions have included
undertaking an organizational transformation, developing consolidated
planning and budgeting processes, and creating an integrated State-
USAID workforce to manage the foreign assistance reforms.
* Organizational transformation. In consolidating State and USAID
foreign assistance processes, State/F has taken steps that are
consistent with key practices that we have found to support successful
organizational transformations. These practices include developing
mission and vision statements and, to involve employees in the
transformation, creating employee review teams and conducting "after-
action reviews" to obtain employee feedback.
* Consolidated planning and budgeting processes. First, State/F
instituted common definitions for requesting and reporting on foreign
assistance funds--known as the standardized program structure--based on
a framework that reflects the transformational diplomacy goal's five
strategic objectives, to collect, track, and report on standardized
data on program funding and results achieved with that funding. Second,
in 2006, State began developing annual operational plans, based on the
standardized program structure, that were intended to serve as annual
spending plans, performance plans, and performance reports and thus
strengthen the linkage between resources, activities, and results for
State and USAID foreign assistance programs.[Footnote 6] The
operational plans, which State/F has modified over time, reflect
funding information for State and USAID foreign assistance projects
worldwide; they also aim to provide information about other U.S.
government agencies' foreign assistance activities and resources.
Third, in 2008, State/F initiated a pilot program for developing a 5-
year country assistance strategy (CAS) document designed to provide a
comprehensive view of all U.S. agencies' foreign assistance programs in
each country, including strategic approach, top priorities, and
resource assumptions. State/F guidance encourages State and USAID to
obtain input from other U.S. government agencies in developing the CAS.
Fourth, beginning with fiscal year 2008, State/F implemented a joint
State-USAID foreign assistance budget process, refining the process
annually based on its after-action reviews.
* Integrated workforce. In early 2006, to support the consolidated
budget, planning, and reporting processes for State and USAID foreign
assistance programs, State/F established 88 employee positions to staff
the new office. Sixty-five positions were to be filled by USAID
personnel and 23 positions were to be filled by State personnel. In
commenting on a draft of this report, State/F noted that, as of October
2008, it had created job descriptions for all of these new positions.
Despite its progress in reforming State and USAID foreign assistance,
State/F lacks implementation time frames, goals, and benchmarks for
aspects of its foreign assistance reforms; does not have a clear,
consistent communication strategy; and faces a number of challenges
related to annual and multiyear planning, budgeting processes, and
workforce management.
* Lack of time frames, goals, and benchmarks. Time frames for
developing and implementing a comprehensive, integrated U.S. foreign
assistance strategy have not been established. According to State/F
officials, State/F is awaiting direction and guidance on U.S. foreign
assistance reforms from the new administration. In addition, State/F
has not yet developed time frames for the full implementation of the
CAS because it has not completed the pilot phase for implementing the
CAS. We have previously reported that, without time frames for key
transformation initiatives, agencies miss opportunities to determine--
and focus attention on--critical phases of their transformation efforts
and the essential activities that need to be completed.[Footnote 7]
Moreover, without both a comprehensive, integrated U.S. foreign
assistance strategy and guidance for other U.S. entities' foreign
assistance, State/F lacks assurance that U.S. foreign assistance
programs are strategically tied to overarching U.S. goals. Also, as of
February 2009, State/F had not determined how it will measure the
anticipated efficiency gains to be realized from developing its
consolidated program management systems, the Foreign Assistance
Coordination and Tracking System (FACTS) and FACTS Info.[Footnote 8]
* Unclear communication strategy. State/F lacks a clear, consistent
strategy for communicating about its planning and budgeting reforms.
Communicating information early and often helps, among its other
benefits, to build an understanding of the purpose of planned changes
and build trust among employees and stakeholders. According to many
officials in headquarters and in the six countries we visited, poor
communication about the fiscal year 2007 operational planning process-
-for example, State/F's failure to clarify contradictory guidance--led
to confusion among staff. In November 2008, State/F said that it would
create a Communications Manager position to develop and implement more
effective communications processes. As of April 2009, State/F had
created but not yet filled this position.
* Annual planning challenges. First, State/F's operational plan, as
designed, does not clearly capture all of the foreign assistance
programs and services implemented by USAID's regional offices. As a
result, senior State/F managers may lack the overview of foreign
assistance resources that they need to make informed decisions. Second,
State/F faces challenges in coordinating and collaborating with
officials in other U.S. government agencies to obtain funding and
performance information about these agencies' foreign assistance
programs. For example, Department of Defense (DOD) staff responsible
for implementing certain foreign assistance programs told us that the
goals and measures in State/F's operational plans do not always align
with the goals and measures articulated in DOD plans and strategies.
Third, foreign assistance program definitions and categories used in
State/F's operational plan sometimes overlap and do not always
adequately describe program achievements. Fourth, although State/F
encourages the use of customized, outcome-oriented indicators to
measure program impact, its guidance does not describe how State/F will
use this information. State/F uses the quantitative, output-oriented
information from its standard output indicators to inform its resource
requests and report to Congress and the American people. Fifth, State/
F's planning process excludes State's and USAID's operating and
administrative expenses for foreign assistance programs, constraining
State/F's ability to ensure needed levels of administrative support for
their foreign assistance programs.[Footnote 9]
* Multiyear planning challenges. The 5-year CAS currently being piloted
may not adequately replace USAID long-term country strategies as a day-
to-day management tool for USAID country missions. According to some
USAID and State officials, the CAS is a high-level document that
includes overall objectives for the country but--unlike USAID's
previous multiyear country strategies--lacks substantive content and
details on how USAID is to achieve its objectives. Furthermore, the
initial suspension of the development of USAID country strategies
during the CAS pilot led to planning challenges at some USAID missions,
particularly during 2006 and 2007--the first 2 years of State/F's
existence. According to some USAID officials, until USAID issued its
guidance for developing interim country strategies, uncertainty about
USAID's long-term goals and strategies for the country hampered their
ability to plan and manage project activities and reach long-term
agreements with host country governments. In September 2008, USAID took
a step to address USAID missions' concerns by issuing interim guidance
for missions that had not yet developed a CAS, permitting them to
extend and update their country strategies, if needed. The DFA also
issued guidance in October 2008 outlining three strategic planning
options regarding the development of interim country strategies.
However, until State/F finalizes the CAS document and USAID fully
develops and implements its new multiyear country strategies, the
development of USAID country-specific strategic plans will remain an
interim process.
* Budget process challenges. First, although State/F intended the
consolidated budget process in part to bring needed coherence and
accountability to State and USAID foreign assistance programs, as of
March 2009 the process included only about half of the funds
appropriated to or administered by State and USAID for international
affairs programs.[Footnote 10] Second, although there are benefits and
drawbacks that must be considered and balanced in any budgeting system,
aspects of State/F budget reforms may affect missions' ability to
respond to unexpected events in a timely manner. State/F's budget
process requires that all funds be committed in advance and at a finer
level of detail than in the past. State and USAID officials in
headquarters and the field described the process to approve changes in
committed resources as lengthy and complex and expressed concern that
these requirements could have the unintended effect of limiting
missions' ability to respond to time-critical conditions, such as those
caused by riots or natural disasters.
* State/F workforce management challenges. First, State/F has not yet
clearly defined the roles of some of its employees and organizational
units and, second, it has not fully ensured that all of its employees
have the skills needed to carry out their responsibilities--that is, to
support and manage the consolidated budget, planning, and reporting
processes for USAID and State foreign assistance programs. An October
2008 State/F internal management review noted, among other issues, that
the roles of some State/F employees and organizational units were not
well defined or understood and that employees' skills were not always
well matched with their positions. Moreover, State and USAID officials
in Washington, D.C., and the field told us that some State/F employees
lacked experience with, and knowledge of, countries' foreign assistance
needs. State/F has taken some steps in response to the internal
report's findings, including defining the roles and responsibilities of
its various executive and managerial positions and its organizational
units. However, as of April 2009, State/F had not defined roles and
responsibilities for some of its staff and had not developed a long-
term workforce management plan for periodically reassessing its
workforce capacity to carry out assigned responsibilities.
We are making seven recommendations to enhance State-USAID
organizational transformation, interagency coordination and
collaboration, planning processes, and workforce management. In
commenting on a draft of this report, State and USAID generally
acknowledged, or agreed to consider, six of the seven recommendations
but asserted that they had met our recommendation related to regional
planning. We maintain that the operational plan structure does not
adequately define regional activities and note that it is important
that an agency clearly capture all relevant programs and activities in
its planning processes.
Background:
In January 2006, the Secretary of State stated that America's current
foreign assistance structure risks incoherent policies, ineffective
programs, and wasted resources when spending is not strategically tied
to overarching U.S. goals and foreign assistance is fragmented across
numerous bureaus and agencies.[Footnote 11] At that time, the Secretary
created the position of DFA to lead State/F's implementation of State
and USAID's consolidated planning, budgeting, and reporting processes
and also to serve concurrently as the Administrator of USAID, with both
of these positions reporting directly to the Secretary. In addition,
within the federal government and among interest groups, scholars, and
others, an ongoing debate about how to improve the efficiency and
effectiveness of U.S. foreign assistance has led to several proposals
to reform U.S. foreign aid, ranging from, among others, elevating USAID
to a cabinet-level agency to merging USAID with State.
In January 2009, the new Secretary of State observed that the incoming
administration is committed to reviewing ways to improve the
distribution of U.S. foreign assistance. She stated that the
administration should build on initiatives that had proven successful
while determining whether poorly performing initiatives could be
improved. The Secretary also noted that the incoming administration has
emphasized, among other things, the need to coordinate and consolidate
foreign assistance programs housed throughout executive agencies.
Meanwhile, modernizing foreign assistance is a stated priority of the
Chairman of the House Committee on Foreign Affairs.
Foreign Assistance Framework:
In 2006, to help align foreign assistance programs with the
transformational diplomacy goal, State/F developed the framework for
U.S. foreign assistance (foreign assistance framework). The framework
ties this goal to five strategic objectives--peace and security,
governing justly and democratically, investing in people, economic
growth, and humanitarian assistance--to various category-country types,
in an effort to move recipient countries to the next level. (See app.
IV for a detailed description of the foreign assistance framework,
including descriptions of the country categories.)
International Affairs Funding and State/F's Budget and Planning
Processes:
Funding for international affairs, which includes funding for foreign
assistance, is provided through annual appropriations and an account
structure reflected in reports of the appropriations committees.
[Footnote 12] Of the $42.5 billion appropriated for programs classified
as international affairs in fiscal year 2008, almost $36.6 billion was
appropriated to accounts administered by State or USAID; the remaining
$5.9 billion went to other departments, agencies, and organizations.
[Footnote 13] For example, programs are implemented by the Departments
of Defense (e.g., education and training); Agriculture (e.g., P.L. 480
food aid); and Treasury (e.g., technical assistance and debt
restructuring). In addition to these agencies implementing programs
classified as international affairs, a number of other federal entities
are involved in providing foreign assistance (see app. II). Of the
$36.6 billion appropriated to or administered by State and USAID,
approximately half went through the new State-USAID consolidated
budget, planning, and reporting processes in fiscal year 2008 (see
table 1).[Footnote 14]
Table 1: Budget Accounts and Authority under State/F Budget and
Planning Approval Processes, Fiscal Year 2008:
Account name: Andean Counterdrug Initiative;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $325.
Account name: Assistance for Eastern Europe and the Baltic States
(formerly Support for Eastern European Democracy);
Estimated fiscal year 2008 budget authority (current dollars in
millions): $294.
Account name: Assistance for the Independent States of the Former
Soviet Union;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $397.
Account name: Child Survival and Health Programs;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $1,829[A].
Account name: Conflict Response Fund;
Estimated fiscal year 2008 budget authority (current dollars in
millions): n/a.
Account name: Democracy Fund;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $239[B].
Account name: Development Assistance;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $1,624.
Account name: Development Credit Authority;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $8.
Account name: Economic Support Fund;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $5,323[B].
Account name: Foreign Military Financing;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $4,689[B].
Account name: International Disaster/Famine Assistance;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $650[B].
Account name: International Military Education and Training;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $85.
Account name: International Narcotics Control and Law Enforcement;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $944[B].
Account name: International Organizations and Programs;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $317.
Account name: Migration and Refugee Assistance;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $1,338[B].
Account name: Nonproliferation, Anti-Terrorism, Demining and Related
Programs;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $497[B].
Account name: Peacekeeping Operations;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $261.
Account name: U.S. Emergency Refugee and Migration Assistance;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $76[B].
Account name: USAID Office of Transition Initiatives;
Estimated fiscal year 2008 budget authority (current dollars in
millions): $45.
Total:
Estimated fiscal year 2008 budget authority (current dollars in
millions): $18,941.
Sources: State Department and Congressional Research Service.
Notes:
In addition to having approval authority over these accounts, the DFA
has authority to coordinate with, but not approve, State's Global HIV/
AIDS Initiative account (approximately $4.7 billion in fiscal year
2008) and the Millennium Challenge Corporation (approximately $1.5
billion in fiscal year 2008). Public Law 480 Food Aid (approximately
$2.1 billion in fiscal year 2008) is appropriated to the Department of
Agriculture and its Title II programs (Food For Peace) is administered
by the USAID Administrator, not the DFA (in the past, these positions
were held by the same individual).
In some cases, foreign assistance funds administered by State or USAID
support programs are implemented by other agencies. For example, State
administers funding appropriated for Foreign Military Financing and
International Military Education and Training programs that are
implemented by DOD. In administering these appropriations, State shares
accountability for the proper use of these funds.
GAO did not independently verify funding information provided by the
Congressional Research Service.
[A] This is an approximation of the portion of the Global Health and
Child Survival appropriation apportioned to USAID.
[B] The amounts for these accounts include funding provided in
Supplemental Appropriations Act, Pub. L. No. 110-252, 122 Stat. 2323
(2008), and in the case of the Economic Support Fund, Disaster Relief
and Recovery Supplemental Appropriations Act, Pub. L. No. 110-329, 22
Stat. 3585 (2008) as well. GAO has not independently verified amounts
appropriated in these two acts.
[End of table]
State and USAID use several planning and budget documents in the
consolidated planning and budget processes for State and USAID foreign
assistance. Some were created by State/F, some predate State/F, and
some are governmentwide documents (see table 2).
Table 2: Key Foreign Assistance Planning and Reporting Documents:
Key State/F planning and reporting documents:
Document: State/F annual operational plan, performance plan, and
performance report;
Description: In each country receiving U.S. assistance, an operating
unit (i.e., country program, regional office, or Washington-based
bureau) led by the U.S. Ambassador compiles an annual operational plan,
performance plan, and performance report in an effort to ensure that
the activities of all U.S. agencies providing assistance in the country
are coordinated and appropriately linked to foreign policy objectives.
These documents are intended to provide a comprehensive presentation of
all foreign assistance resources planned for implementation in country;
to strengthen the link between funding, activities, and results; and to
collect standardized data about foreign assistance programs;
Primary purpose: Annual planning; budgeting;
Key dates: Operating units began developing operational plans in
October 2006.
Document: State/F 5-year country assistance strategy (CAS);
Description: State/F is developing 5-year, country-specific strategies
that aim to bring together all U.S. agencies' foreign assistance
activities in a country regardless of funding source. The CAS document
will be a maximum of 15 pages long, and will be developed separately
from USAID's country-specific long-term strategies, which are currently
being revised;
Primary purpose: Strategic planning;
Key dates: In 2008, State/F began a pilot project in 10 countries to
develop the CAS. State/F began an after-action review in early 2009, to
inform CAS development and implementation going forward.
Key pre-existing State and USAID foreign assistance planning and
reporting documents:
Document: USAID multiyear country strategy;
Description: Prior to the creation of State/F, USAID missions routinely
developed multiyear country strategies, which identified USAID goals
and strategic objectives and included detailed information on expected
results and how progress toward results would be measured;
Primary purpose: Strategic planning;
Key dates: In June 2006, State/F suspended the development of new
country strategies. In September 2008, USAID issued guidance for
developing interim strategies at missions where a CAS had not yet been
developed. USAID plans to further develop final country strategy
guidance after the CAS roll-out is complete.
Document: Mission strategic plan (MSP);
Description: Annually, all U.S. overseas posts, whether they receive
U.S. foreign assistance funding or not, are required to submit a 3-year
MSP. The MSP is intended to enable posts to track progress toward
mission-specific, high-level diplomatic and management goals. It
includes a post's annual budget request for all State and USAID foreign
assistance funding by program area, and for the investing in people
strategic objective, by program element.
Primary purpose: Strategic planning; budgeting;
Key dates: This document was revised in 2007 to include a section on
State/USAID foreign assistance.
Key governmentwide planning and reporting documents:
Document: Congressional Budget Justification (CBJ);
Description: Agencies submit CBJs to the appropriations committees in
support of their annual budget requests. State/F's CBJ is linked to the
foreign assistance framework and consistent with the long-term
considerations of the joint State-USAID strategic plan;
Primary purpose: Budgeting;
Key dates: Beginning with the CBJ for fiscal year 2008, State/F
integrated foreign assistance resources into one joint document and
submitted it in February 2007.
Document: Performance and Accountability Report (PAR);
Description: Called for by Office of Management Budget (OMB) guidance,
the PAR combines the annual performance report required by the
Government Performance and Results Act of 1993[A] with an agency's
financial statements and accountability report. The PAR provides
information on an agency's actual performance and progress toward
achieving the goals in its strategic plan and performance budget. The
majority of performance information for results achieved with State and
USAID foreign assistance resources are extracted from the performance
reporting information in State/F's FACTS database;
Primary purpose: Performance reporting;
Key dates: Agencies were to transmit various aspects of their fiscal
year 2008 PARs to the President, Congress, and OMB between December
2008 and January 2009.
Sources: USAID, State, and OMB.
[A] Pub. L. No. 103-62, § 4, 107 Stat. 285, 299-89 (1993).
[End of table]
The budget process for State and USAID's foreign assistance funds
follows the traditional federal budget and appropriation process, with
one important distinction: after Congress appropriates funds to
programs authorized under the Foreign Assistance Act, USAID and State
undergo a congressional notification process known as the 653(a)
consultation process.[Footnote 15] In compliance with notification
procedures established by law State/F notifies Congress of the type of
assistance and level of funding to be provided to individual countries
and international organizations. In practice, State and USAID foreign
assistance funds generally are not made available for obligation until
the reporting requirements are finalized.
State/F Information Systems:
In conjunction with USAID, State/F developed the FACTS I database to
collect foreign assistance planning and reporting data, including plans
for implementing current-year funds and performance planning and
reporting data. According to numerous FACTS I users as well as our
previous review, FACTS I was slow and unreliable during the first 2
years of the foreign assistance budget, planning, and reporting
processes.[Footnote 16] State/F developed FACTS II to address these
issues. State/F also created FACTS Info, a system that allows State/F
to aggregate, analyze, and report data on many U.S. foreign assistance
programs. During its pilot phase (September 2007-February 2009), FACTS
Info was accessible to a limited number of users within State and
USAID; State/F began to expand usage to additional State/F and USAID
users in early 2009. Figure 1 depicts the data flow for both systems.
Figure 1: FACTS and FACTS Info Data Flow Chart:
[Refer to PDF for image: illustration]
Input: State and USAID operating units:
State/F uses FACTS to collect foreign assistance planning and reporting
data from operating units;
Outputs:
* Reports on individual operating units;
* 1-year operational plans and performance reports.
Input: State/F;
State/F uploads the final operational plan and performance report data
into FACTS Info;
State/F uploads budget data from mission strategic plans and HIV/AIDS
country operational plans, as well as demographic data, into FACTS
Info;
Outputs:
* Aggregated data: State/F aggregates operational plan data in FACTS
Info;
* Analyzed data: State/F analyzes data in FACTS Info;
* Reports to Congress: State/F uses FACTS Info to create reports for
OMB, Congress, and others in State and USAID.
Sources: GAO analysis of Department of State data; Nova Development
(clip art).
Notes:
FACTS = Foreign Assistance Coordination and Tracking System:
OMB = Office of Management and Budget:
State = Department of State:
State/F = Office of the Director of Foreign Assistance:
USAID = U.S. Agency for International Development:
[End of figure]
Key Practices for Agency Transformation:
Implementing a large-scale change management initiative such as the
State-USAID foreign assistance organizational transformation is a
complex endeavor that requires the concentrated efforts of both
leadership and employees to accomplish new organizational goals.
Experience shows that failure to adequately address--or, often, to
consider--organizational culture is at the heart of unsuccessful
mergers and transformations. We have reported on a number of key
practices that have consistently been found in successful mergers,
acquisitions, and transformations (see table 3).[Footnote 17]
Table 3: Key Practices and Implementation Steps for Mergers and
Organizational Transformations:
Key practice: 1. Ensure that top leadership drives the transformation;
Implementation step:
* Define and articulate a succinct and compelling reason for change; *
Balance continued delivery of services with merger and transformation
activities.
Key practice: 2. Establish a coherent mission and integrated strategic
goals to guide the transformation;
Implementation step: Adopt leading practices for results-oriented;
strategic planning and reporting.
Key practice: 3. Focus on a key set of principles and priorities at the
outset of the transformation;
Implementation step: Embed core values in every aspect of the
organization to reinforce the new culture.
Key practice: 4. Set implementation goals and a timeline to build
momentum and show progress from day one;
Implementation step:
* Make public implementation goals and timeline;
* Seek and monitor employee attitudes and take appropriate follow-up
actions;
* Identify cultural features of merging organizations to increase
understanding of former work environments;
* Attract and retain key talent;
* Establish an organization-wide knowledge and skills inventory to
exchange knowledge among merging organizations.
Key practice: 5. Dedicate an implementation team to manage the
transformation process;
Implementation step:
* Establish networks to support implementation team;
* Select high-performing team members.
Key practice: 6. Use the performance management system to define
responsibility and assure accountability for change;
Implementation step: Adopt leading practices to implement effective
performance management systems with adequate safeguards.
Key practice: 7. Establish a communication strategy to create shared
expectations and report related progress;
Implementation step:
* Communicate early and often to build trust;
* Ensure consistency of message.; Encourage two-way communication;
* Provide information to meet specific needs of employees.
Key practice: 8. Involve employees to obtain their ideas and gain their
ownership for the transformation;
Implementation step:
* Use employee teams;
* Involve employees in planning and sharing performance information;
* Incorporate employee feedback into new policies and procedures;
* Delegate authority to appropriate organizational levels.
Key practice: 9. Build a world-class organization;
Implementation step: Adopt leading practices in acquisition management,
financial management, human capital and information technology to build
a world class organization.
Source: GAO.
Note: We compared State and USAID efforts related to seven of the nine
key practices developed in our past work on organizational mergers and
transformations. These seven practices are shown in boldface type.
Because of the evolving nature of State/F's organization and workforce,
we did not review State and USAID efforts related to key practice 6
("using the performance management system to define responsibility and
assure accountability for change" ) or 9 ("building a world-class
organization" because of the evolving nature of State/F's organization
and workforce).
[End of table]
Interagency Coordination and Collaboration:
Successful planning and implementation of multi-agency efforts such as
foreign assistance reform is a challenge that requires interagency
coordination and collaboration. We have previously reported on a range
of barriers that agencies face when they attempt to
collaborate.[Footnote 18] For example, agencies sometimes have missions
and goals that may conflict, making reaching a consensus on strategies
and priorities difficult. Also, interagency collaboration is often
hindered by incompatible procedures, processes, data, and computer
systems. As we have also previously reported,[Footnote 19] the
following practices can help agencies sustain and enhance interagency
collaboration:
* Define and articulate a common outcome.
* Establish mutually reinforcing or joint strategies.
* Identify and address needs by leveraging resources.
* Agree on roles and responsibilities.
* Establish compatible policies, procedures, and other means to operate
across agency boundaries.
* Develop mechanisms to monitor, evaluate, and report on results.
* Reinforce agency accountability for collaborative efforts through
agency plans and reports.
* Reinforce individual accountability for collaborative efforts through
performance management systems.
State and USAID Have Taken Steps to Support Organizational
Transformation, Develop Consolidated Foreign Assistance Planning and
Budgeting Processes, and Establish State/F Workforce:
In consolidating their foreign assistance operations, State and USAID
took several steps that our previous work has shown to support such an
organizational transformation.[Footnote 20] State/F also took steps to
develop consolidated State-USAID foreign assistance planning and
budgeting processes. In addition, State/F took steps to establish an
integrated State-USAID workforce.
Key State and USAID Efforts Supported Organizational Transformation:
Consistent with key practices that we have previously found in
successful mergers and organizational transformations, State and USAID
efforts to establish State/F have included (1) ensuring top
leadership's involvement in the transformation, (2) establishing a
mission statement, (3) developing key operating principles, (4)
establishing key implementation goals and timelines, and (5) involving
employees in the transformation.
Top Leadership Involvement:
Top leadership at State and USAID articulated reasons for, and drove,
the organizational transformation of State's and USAID's foreign
assistance, beginning with the Secretary of State's 2006 announcement
creating the DFA position. In April 2006, 2 months before State/F was
officially established, the DFA appointed a Chief Operating Officer
(COO), who was responsible for helping formulate the transformed
organizational structure as well as developing and implementing State/
F's reformed planning and budgeting processes. We have previously
reported that appointing a COO or Chief Management Officer is one way
to elevate attention on management issues and transformational change,
integrate various initiatives, and institutionalize accountability for
addressing them.[Footnote 21]
Mission Statement:
State/F's top leadership and key staff established mission and vision
statements to guide the organization's transformation. This effort
began about 2 years after State/F was created, in response to findings
from an April 2008 outside review of its organization and processes.
According to the statement, State/F's mission, on behalf of the
Secretary of State and the DFA, is to:
* provide leadership, coordination, and strategic direction within the
U.S. government and with external stakeholders to enhance foreign
assistance effectiveness and integrate foreign assistance planning and
resource management across State and USAID;
* lead strategic, operational, and performance planning of U.S. foreign
assistance with a focus on aligning resources with policy priorities;
* develop and defend foreign assistance budget requests and allocate
State and USAID foreign assistance funding to meet urgent needs and new
opportunities and to ensure long-term sustainable investments; and:
* promote good stewardship of foreign assistance funds by strengthening
oversight, accountability, and transparency.
Key Operating Principles:
In addition to establishing mission and vision statements, State/F
senior leaders and staff developed a key set of operating principles.
These principles include:
* being accountable to the American people for ensuring the effective
use of foreign assistance resources,
* being constructive and cooperative partners with stakeholders, and:
* valuing State/F's employees as its most important resource.
We have previously reported that operating principles articulating the
core values of a new organization can, like the mission statement,
serve as an anchor that remains valid and enduring while organizations,
personnel, programs, and processes may change.[Footnote 22]
Implementation Goals and Timelines:
State/F set and met certain implementation goals and timelines for key
aspects of its consolidated budget and planning processes. For example,
State/F exceeded its goal of implementing country-specific operational
plans--a key annual budget and planning document for the reformed
performance budgeting process--to 67 pilot countries in its first year.
In addition to those pilot countries, each USAID country mission,
regional office, and Washington, D.C.-based bureau--collectively known
as operating units--produced an operational plan for fiscal year 2007.
[Footnote 23] All operating units produced operational plans for fiscal
year 2008. State/F's COO told us that another key goal was submitting a
joint State-USAID foreign assistance budget request based on the new
foreign assistance framework. State/F accomplished this goal even
though the office was established after the fiscal year 2008 budget
formulation process had begun.
Employee Involvement:
State and USAID involved their employees in the transformation by using
employee teams and by obtaining employees' ideas about the
transformation. According to its COO, State/F created implementation
teams at State/F's inception to focus on two key areas: (1) overseeing
the organizational and administrative changes needed to create the new
office and (2) developing and implementing the reformed planning and
budgeting processes. Each year since its creation in 2006, State/F has
conducted after-action reviews to seek employee feedback on how to
improve various processes. For example, employee teams are currently
reviewing State/F's core processes and identifying suggested
improvements for each. According to State and USAID bureau and field
staff with whom we met, State/F implemented several employee
suggestions from these reviews. We have previously reported that
employee involvement, such as State/F's use of employee teams and after-
action reviews, strengthens the transformation process by including
frontline perspectives and experiences.[Footnote 24]
State/F Developed Consolidated State-USAID Foreign Assistance Planning
and Budgeting Processes:
State/F developed a program configuration, known as the Standardized
Program Structure and Definitions (standardized program structure), to
provide a consistent way to categorize and account for State-USAID
foreign assistance. State/F also began developing annual operational
plans, performance plans and performance report based on the
standardized program structure, to strengthen the link between foreign
assistance funding, activities, and results.[Footnote 25] In addition,
State/F initiated a pilot program for multiyear, country-specific
foreign assistance strategies, intended to take a comprehensive
approach in describing overall U.S. strategic approaches and
priorities, goals, and resource assumptions. Moreover, State/F
implemented a consolidated budget process for State and USAID foreign
assistance programs, beginning with the fiscal year 2008 budget
request.
Standardized Program Structure:
To collect and track standardized data on program funding and results
achieved with that funding, State/F instituted the standardized program
structure. This structure provides common definitions for the use of
foreign assistance funds and flows from the foreign assistance
framework, using the framework's five program objectives plus one
administrative objective. For each objective, State/F developed a
common configuration of goals linked to implementing mechanisms. This
program structure is the foundation of the annual operational plan and
the performance report as well as the FACTS data system. (Fig. 2 shows
an excerpt of the configuration of goals for the governing justly and
democratically program objective.) State/F also developed standard
definitions and sets of indicators related to these goals. For example,
State/F defines the human rights program element as "advancing the
protection of international human rights, including labor rights, by
supporting governmental and nongovernmental organizations created to
protect, promote, and enforce human rights." One indicator related to
this program element is "the number of public advocacy campaigns on
human rights supported by the U.S. government."
Figure 2: Excerpt of State/F's Standardized Program Structure:
[Refer to PDF for image: illustration]
Program objective 2: Governing justly and democratically;
Program area 2.1: Rule of law and human rights;
Program element 2.1.1: Constitutions and laws;
Program element 2.1.2: Judicial independence;
Program element 2.1.3: Justice system;
Program element 2.1.4: Human rights;
Subelement 2.1.4.1: Advocacy; Implementing mechanism (e.g., grantee);
Subelement 2.1.4.2: Systems and policies; Implementing mechanism (e.g.,
nongovernmental organization);
Subelement 2.1.4.3: Education and training; Implementing
mechanism(e.g., contractor).
Program area 2.2: Good governance.
Source: State/F.
[End of figure]
Annual Country-Specific Operational Plans:
According to State/F's operational plan guidance, State/F's annual
operational plans are intended to show how all U.S. government
agencies' foreign assistance resources--including resources provided by
U.S. agencies[Footnote 26] other than State and USAID--are being used
to support the goals and objectives outlined in the foreign assistance
framework. The operational plans, which operating units began
developing in October 2006, were originally multifunctional, serving as
annual spending plans, performance plans, and performance reports.
According to State/F guidance, the plans were intended to strengthen
the link between funding, activities, and results for joint State-USAID
foreign assistance programs. State/F guidance notes that operational
plans differ from other State and USAID planning and reporting
requirements in that they provide detail about the specific uses of all
available funds for the given fiscal year. State/F piloted the
operational plan in 67 "fast track" operating units in fiscal year 2007
and required all 190 operating units, including country missions and
regional and functional bureaus in State and USAID, to complete an
operational plan in fiscal year 2008.
Using the standardized program structure, the operational plan reflects
funding information for individual State and USAID foreign assistance
projects (i.e., at the implementing mechanism level).[Footnote 27] For
each project, the operational plan shows the entities and individuals
receiving funding, the amounts received, the activities being funded,
and the expected results. We have previously reported that pursuing a
closer alignment between performance planning and budgeting--much like
State/F is attempting to do with its operational plans and standardized
program structure--is essential in supporting the transition to a more
results-oriented and accountable federal government.[Footnote 28]
Developing a link between requested funding and expected performance
goals is a critical first step in defining the performance consequences
of budgetary decisions. By structuring the operational plan around the
program configuration, State/F is able to collect standard funding and
performance data on individual programs worldwide through FACTS and
report on foreign assistance in the aggregate--something that was not
possible prior to State/F's reforms. Although State and USAID are the
only U.S. agencies currently entering data into and receiving reports
from the FACTS and FACTS Info systems, State/F originally expected the
systems to eventually include data from the more than 25 other U.S.
entities involved in foreign assistance.[Footnote 29] State/F
recognizes that doing so will be difficult because, among other
reasons, different agencies use different procedures, processes, and
systems to formulate budget requests, allocate resources, and measure
results.
In addition, the operational plans are intended to provide information
about how all U.S. government agencies are coordinating and
collaborating in each country to achieve short-term and long-term
foreign assistance goals as well as information on other agencies'
foreign assistance resources. State/F's operational plan guidance
requires State and USAID staff to describe how the programs of all
other U.S. government agencies in the country are helping address, at
the program area level, the goals in State/F's foreign assistance
framework.[Footnote 30] To obtain this information, State and USAID
staff must work with other agencies. According to some USAID and State
staff at field missions, the annual operational plan process has
improved transparency among the various U.S. government agencies
involved in U.S. foreign assistance activities in the country. For
example, State officials in Ukraine stated that, because of going
through the operational plan process with other U.S. agencies, State
has a much better view of all U.S. agencies' programs in Ukraine,
including some details about what activities other agencies' programs
include. Also, USAID officials in both Haiti and Peru said that
interacting and collaborating with other agencies that are implementing
foreign assistance activities in the country during the operational
plan process raised their own awareness of other agencies' program
activities and goals. As a result, they said that they were able to
make better-informed decisions for State/F's planning and budgeting
processes.
State/F has made several changes to the operational plan process. In
response to findings in the 2007 after-action review, the process was
split into two phases beginning in fiscal year 2008. The purpose of
this two-part structure was to more evenly distribute the workload for
State and USAID over time and to permit State and USAID project data to
be provided later in the fiscal year, after each operating unit
receives its allocations and has had the opportunity to plan their
projects. According to State/F officials, after fiscal year 2008,
State/F discontinued the two-phased approach and instead separated the
operational plans from the performance plans and reports. The
operational plans serve as annual spending plans and discuss planned
activities and expected results from the current year appropriation;
annual performance plans and reports capture fiscal year performance
planning and performance reporting.
State/F also made a number of changes to the information contained in
the operational plans, based on feedback from the after-action reviews.
For example, State/F eliminated the requirement for operating units to
provide narrative information at the subelement level and made this
information optional at the implementing mechanism level. It also
eliminated performance indicators at the implementing mechanism level.
These changes were in direct response to staff concerns that State/F
was collecting detailed information that was not being used in decision
making. Also, State/F now prepopulates certain data fields in the FACTS
database with prior-year information; staff must re-enter prior-year
information only if it has changed. According to USAID and State
officials, these changes have reduced the workload burden for staff
working on the operational plans, especially in field locations that
experienced slow connections with the FACTS database. Finally, State/F
adjusted some of the standard indicators to better fit programs and
permits the use of custom indicators at the program element level to
highlight the unique circumstances of a particular program or country
in addition to the standard indicators.
5-Year Country-Specific Foreign Assistance Strategies:
In June 2006, State/F directed USAID to suspend any planned updates to
its multiyear country strategies. State/F did so because it planned to
replace the USAID-only country strategies with a joint State-USAID
country assistance strategy (CAS). In August 2007, the DFA established
a joint USAID-State task force to develop an approach for these
strategies. The task force completed its efforts and, since February
2008, the DFA approved plans for new 5-year CAS that would take a
comprehensive approach by including the efforts of all U.S. agencies
providing foreign assistance in the country. According to State/F's
guidance for developing a CAS document, each CAS should include, among
other things, an overall strategic approach and priorities, a
discussion of up to five priority goals, and resource assumptions.
[Footnote 31] The guidance states that the CAS is meant to:
* identify and describe U.S. foreign assistance goals in specific
countries and provide a sense of prioritization among these goals;
* improve strategic and programmatic coordination, collaboration, and
transparency within the U.S. government; and:
* provide a comprehensive statement of overall U.S. foreign assistance
priorities in a given country, regardless of funding source.
To achieve these goals, USAID and State are to consult with the host-
country government, nongovernment and private sector organizations in
the country, and other international donors. State/F guidance also
encourages input from other U.S. government agencies.
During 2008, State/F piloted the CAS in 10 countries.[Footnote 32]
According to the pilot selection criteria, the countries chosen:
* are broadly representative of the diversity of U.S. foreign
assistance;
* are enthusiastic about participating in the pilot;
* have large, medium, and small programs; and:
* receive funds through a large variety of accounts, including the
Millennium Challenge Account Compact and Threshold Programs and the
President's Emergency Plan for AIDS Relief.
In the meantime, some USAID officials in Washington, D.C., and at field
missions expressed concern that some USAID country strategies had
become outdated and did not reflect the current political and
developmental environment, creating a gap between country-level
guidance for planning, programming, and budgeting and a longer-term
view of a country's needs and strategies for meeting them. In September
2008, USAID issued guidance permitting field missions to develop
interim country strategies until the CAS is fully developed and
implemented.
As of January 2009, all 10 pilot countries had submitted a draft CAS to
State/F; as of April 2009, State/F had approved four of them and the
remaining six were under review. According to State/F, when all 10
pilot CAS documents are approved, State/F plans to conduct an after-
action review to determine best practices and lessons learned and then
may consider initiating a subsequent follow-on pilot project. State/F
has not established time frames for implementing the CAS worldwide.
[Footnote 33]
Consolidated Budget Process for State and USAID Foreign Assistance
Programs:
State/F implemented a joint State-USAID foreign assistance budget
process, beginning with the fiscal year 2008 budget request, and made
subsequent changes to the process based on its experiences and feedback
from after-action reviews. Initially, it focused on foreign assistance
planned for individual countries based on a categorization of their
development using the foreign assistance framework.[Footnote 34] State/
F created country core teams for each country receiving foreign
assistance and gave them the responsibility of recommending funding
requests for each country, based on State/F's five strategic objectives
and using the standardized program structure. These initial core teams
consisted of a team leader from State/F, representatives from relevant
regional and functional bureaus, a State/F Resources and Appropriations
staff member, and other stakeholder U.S. government agencies. Because
this process began after embassies and USAID missions submitted their
funding requests for fiscal year 2008, embassy and mission staff were
not initially assigned to country core teams.
State/F's joint budget process increased the visibility of foreign
assistance resources within State and USAID. According to State/F and
USAID officials with whom we met, the new process had a positive effect
on how foreign assistance budgets were presented and defended during
the Secretary's review. Under this new process, comparable USAID and
State bureaus present their foreign assistance budget proposals to the
Secretary in a joint session. In the past, because the USAID
Administrator also served as the DFA,[Footnote 35] the Administrator
had an opportunity to participate in each session along with the
Secretary, the Deputy Secretary of State, or the Under Secretary of
State for Political Affairs. According to State/F officials, this
process resulted in a better understanding of foreign assistance
programs and priorities between State and USAID and provided the
Secretary of State with a comprehensive overview of planned foreign
assistance resource allocation.
State/F responded to employee feedback from after-action reviews and
made several changes to the fiscal year 2009 and 2010 budget processes.
For fiscal year 2009, to better reflect the bureau structures of State
and USAID, State/F replaced the country core teams, which focused on
individual countries, with assistance working groups, which were
composed of regional and functional bureau representatives and had
greater knowledge of particular countries and programs. In addition to
establishing the regional assistance working groups, State/F held a
roundtable for each of the five strategic objectives. This allowed
functional bureaus to incorporate cross-cutting and global priorities
into country-focused funding proposals for the fiscal year 2009 budget
request.
For fiscal year 2010, the process was pared down further and regional
bureaus were given primary responsibility for creating budget
proposals, which reduced the time State/F officials had to spend
reconciling regional and functional bureaus budget requests. State/F
also created an intranet site to which it posted budget proposals,
allowing regional and functional bureaus to comment on each other's
budget proposal. The effect of this change remains to be seen.
State/F Integrated Workforce:
State/F took several steps to establish its organizational structure
and develop its human resource capabilities. In early 2006, State/F
began to staff its new office. State reassigned 23 employee positions
to State/F, and USAID assigned 65 employee positions to State/F.
[Footnote 36] The 23 State positions were reassigned from various
bureaus and units within State. The 65 USAID positions were reassigned
from several USAID offices, including many from the Bureau for Policy
and Program Coordination.[Footnote 37] USAID and State reached an
agreement on the employee reassignments on June 1, 2006.
By the end of March 2007, State/F had created new job descriptions and
defined the skills and competencies needed for 16 of the 23 positions
reassigned from State; State/F made minor or no changes to the rest of
the existing position descriptions. New job descriptions for the 65
positions reassigned from USAID were approved in September 2007, 16
months after State/F began operations. In commenting on a draft of this
report, State/F told us that, as of October 2008, it had created job
descriptions for all of the new positions.
State/F Faces Implementation Challenges Related to Organizational
Transformation, Planning and Budgeting, and Workforce:
Despite progress in its organizational transformation, developing
consolidated planning and budgeting processes, and establishing an
integrated State-USAID workforce, State/F faces implementation
challenges related to these efforts. Specifically, State/F (1) lacks
implementation time frames, as well as goals and benchmarks, for
several aspects of its foreign assistance reform efforts; (2) lacks a
clear and consistent strategy for communicating with staff and
stakeholders about its transformation and reform efforts; (3) faces
several challenges related to its annual planning processes; (4) faces
challenges in developing and implementing its multiyear planning
process; (5) faces challenges in its consolidated budget process; and
(6) has not fully addressed concerns regarding management of its
workforce.
State/F Lacks Implementation Time Frames for Comprehensive Foreign
Assistance Reforms and Developing a Foreign Assistance Strategy and
Country-Specific Strategies:
Although State/F has established time frames for certain key elements
of foreign assistance reform, it has not established time frames for
developing and implementing a comprehensive, integrated U.S. foreign
assistance strategy covering all agencies involved in delivering U.S.
foreign assistance, or for developing guidance for foreign assistance
delivered through other U.S. government entities. According to State/F
officials, State/F was awaiting direction and guidance from the
incoming administration regarding its goals and priorities for U.S.
foreign assistance reforms. In addition, because it has not completed
the pilot phase for the 5-year CAS, State/F has not yet developed time
frames for fully implementing the CAS. As our previous work suggests,
[Footnote 38] without time frames for implementing the comprehensive
and country-specific strategies, State/F lacks target dates needed as
an objective means to track and report its progress. Moreover, until it
develops and implements a comprehensive, integrated U.S. foreign
assistance strategy, as well as guidance for other U.S. agencies'
foreign assistance, State/F lacks assurance that State's, USAID's, and
other agencies' programs are strategically tied to overarching U.S.
goals.
State/F Lacks Goals and Benchmarks for Measuring Progress for Certain
Reform Processes:
State/F has not defined goals for certain aspects of foreign assistance
reform or developed benchmarks to gauge whether the reforms are
successful. Without these key aspects of successful mergers and
transformations, State/F is unable to pinpoint performance shortfalls
and gaps and suggest midcourse corrections, and will not know what
success looks like. For example, State/F's COO told us that State/F did
not define what it wanted to achieve from restructuring and
streamlining State and USAID mission and bureau plans and reports or
determine how it would gauge progress toward those goals and define
success. Without a clear picture of the results to be achieved, it is
difficult to ensure that reforms are implemented in a way that achieves
the desired results.
Also, as of January 2009, State/F had not determined how it will
measure the anticipated efficiency gains to be realized from developing
consolidated program management systems. As a result, some State and
USAID employees in Washington, D.C., and in the six countries we
visited did not understand how their work was contributing to State/F's
desired results and could not determine whether the reforms were
helping State/F achieve its goals. For instance, according to State/F,
one of the results expected from FACTS and FACTS Info was a substantial
decline in ad hoc requests to embassies and missions for budget and
performance information. However, USAID officials in all six countries
we visited told us they have no way of knowing whether the data they
enter into FACTS is being used because State/F does not disseminate
information about the use of FACTS data. They also said that the number
of USAID headquarters and State/F requests for information--known as
taskers--had declined only slightly or not at all. On the other hand,
State/F told us that although it does not track and communicate to the
field the number of inquiries it handles at headquarters using FACTS or
FACTS Info, its reliance on embassy-and mission-provided data has
declined. State/F's Congressional Relations Specialist said that she
frequently uses FACTS and FACTS Info to respond to information requests
from congressional committees and rarely sends taskers to the field for
information. She hypothesized that the taskers to the field may be from
State and USAID bureau officials and that these requests would decline
over time as FACTS and FACTS Info become more widely accessed and well
known.
State/F Lacks a Clear and Consistent Communication Strategy:
State/F lacks a clear, consistent strategy for communicating about its
organizational transformation and planning and budgeting reforms.
Communicating information early and often helps to build an
understanding of the purpose of planned changes, builds trust among
employees and stakeholders, cultivates a strong relationship with
management, and helps gain employee ownership for a merger or
transformation.
According to officials in headquarters and in the six countries we
visited, poor communication about the fiscal year 2007 operational
planning process led to a great deal of confusion. For example, a USAID
official in Jordan said that State/F repeatedly changed its guidance
over a short period of time; at times, the updated guidance
contradicted, instead of built on, previous guidance and staff were
unsure which guidance to follow. In addition, many staff told us that
when seeking clarification on the conflicting guidance, they had
received either no response or an untimely response from State/F. Also,
State/F officials told us that, in hindsight, it appeared that State/F
could have benefited from fuller and earlier communication about its
planning and budgeting reforms with Congress and other stakeholders,
such as contractors and nonprofit organizations involved with program
implementation. To address these challenges, in November 2008, State/F
said that it would create a Communications Manager position to develop
and implement more effective communications processes; as of March
2009, this position had been created but not yet filled.
State/F Faces Challenges in Its Annual Operational Planning Processes:
As with any planning structure, State/F's operational plans have
several strengths but also present challenges. First, although regional
missions complete operational plans, they do not clearly capture all of
the foreign assistance programs and services implemented by USAID's
regional offices. As a result, senior management may lack the holistic
overview of foreign assistance resources needed to make informed
decisions about trade-offs among various priorities. According to
leading practices in federal strategic planning, an agency's strategic
goals and objectives should cover its major functions and operations,
and its annual performance plan should cover each program activity set
forth in its budget.[Footnote 39] Like its country-specific, or
bilateral, missions, USAID's regional offices provide foreign
assistance programs, although these programs tend to operate across
borders. Regional offices also implement and manage programs in limited
presence countries[Footnote 40] and provide technical assistance and
support to bilateral missions and programs. However, according to
regional officials with whom we met, it is difficult to categorize and
capture technical assistance in the operational plan. In addition, they
stated that because the operational plan has a bilateral mission focus
and distinguishes between programs in different sectors, it does not
adequately describe regional offices' programs and services in multiple
sectors for multiple limited presence countries. Senior leaders in
State/F acknowledged that the operational plan's bilateral mission
focus is problematic in this regard. In commenting on a draft of this
report, State/F stated that regional activities can be and are captured
in operational plans, noting that regional operating units produce
operational plans. Based on our work, we maintain that the operational
plan structure does not adequately capture regional activities.
Second, State/F faces challenges in coordinating and collaborating with
officials in other U.S. government agencies to obtain funding and
performance information, at the program element level, about these
agencies' foreign assistance programs. Officials from these agencies
told us that State/F did not coordinate well with their agencies in
planning for programs that these agencies implement with State or USAID
funding. For example, DOD staff who implement Foreign Military
Financing and International Military Training and Education programs
told us during our site visits that State/F's goals and measures--as
reflected by the standardized program structure in the operational
plans--did not always align with the broader goals and measures
articulated in DOD's own planning documents and strategies for its own
programs. Moreover, officials from other U.S. government agencies
implementing their own foreign assistance programs told us of
challenges they face in providing information to State and USAID
officials for inclusion in the operational plan. As a result, State/F
cannot be sure, through its operational plan process, that
governmentwide foreign assistance funds are strategically tied to
overarching policy goals. At some field missions, officials from the
Departments of Commerce, Energy, Health and Human Services, and the
Treasury told us that providing support for State/F processes, such as
the operational plan, creates an additional workload that is neither
recognized by their agencies nor a factor in their performance ratings.
We have previously reported that federal programs contributing to the
same or similar results should collaborate to ensure that goals are
consistent and, as appropriate, program efforts are mutually
reinforcing.[Footnote 41] In addition, as a key collaboration practice,
agencies can reinforce individual accountability for collaborative
efforts through their performance management systems.
Third, although the standardized program structure is generally a
useful tool to categorize foreign assistance programs, its program
structure categories sometimes overlap and in some cases, its
performance indicators do not always adequately describe program
achievements. State/F guidance does not discuss how to categorize
programs within the standardized program structure, except to say that
it is critical that funds be identified by what is being done, rather
than why it is being done.
* Standardized program structure categories are not mutually exclusive.
Staff from State and USAID told us that it is not always clear to them
how to categorize program activities, which could result in similar
programs' being coded differently. For example, a USAID official in the
East Africa Regional Office, describing a civilian program similar to
neighborhood watches, said that the subelement that best describes the
program falls under the "Stabilization Operations and Security Sector
Reform" program area, which generally involves military programs. The
official ultimately sought legal counsel to determine whether it was
appropriate to code the program in this subelement or whether it should
be coded in a subelement under a civilian program area. State/F
officials told us that the standardized program structure was developed
by interagency experts in each of the program areas and that it would
continue to rely on individuals who know and understand the programs
and are best positioned to categorize them.
* Standard indicators do not always capture program performance. Staff
from State and USAID told us that they sometimes cannot find
standardized performance indicators to describe State/F programs and
therefore choose "the next best thing." As a result, State/F cannot
ensure that its programs and projects are reported accurately and
consistently. For example, a State official in Ethiopia told us that he
and USAID officials whom he consulted were unable to find a performance
indicator that accurately described training provided to Ethiopian
police units for defusing bombs. Eventually, the State and USAID
officials selected one indicator from several that related generally to
police training, even though none accurately described the type of
assistance being provided. In commenting on a draft of this report,
State/F officials told us they have been working for the past year on a
comprehensive review of the standardized program structure in order to
clarify and update program definitions but that they would also review
the standard indicators:
These design weaknesses in the standardized program structure could
compromise accuracy and data reliability in the operational plans,
performance reports, FACTS, and FACTS Info, all of which are grounded
in the standardized program structure.
Fourth, as State/F itself recognizes, its required standard indicators
are generally output oriented and therefore provide little information
about program impact. State/F chose to use output measures, in part, to
aggregate and report, at the agency level, quantitative information
common to foreign assistance programs across countries. USAID staff at
the six overseas missions we visited told us they saw this shift as a
step backward from the progress some USAID missions had made over the
years toward using more outcome-oriented measures to obtain information
on program impact. State and USAID officials in headquarters and the
field recognized the value of being able to aggregate information
across countries at the agency level but questioned the usefulness of
the output-oriented information collected with State/F's standard
indicators. For example, a USAID official in Haiti told us that the
USAID mission and its implementing partners have shifted their focus
away from impact measures toward measures that provide less information
on actual progress. In addition, USAID officials in Kenya expressed
concerns that the quality and availability of the qualitative
information needed to manage program activities had declined, reducing
the mission's ability to measure, and respond to inquiries about,
program impact. State/F's guidance encourages the use of custom
indicators to establish targets and monitor the progress and impacts of
their projects but it does not describe how State/F will use this
information. Some State and USAID officials noted that although
information related to program impact is important for managing
programs and understanding the programs' effects, they were not sure
how, or if, State/F uses such information. These officials observed
that, in contrast, State/F's guidance says that the quantitative,
output-oriented information collected with the standard indicators is
used to inform its resource requests and report to Congress and the
American people.
Fifth, State/F's planning process excludes certain of State's and
USAID's operating and administrative expenses for foreign assistance
programs, constraining State/F's ability to ensure needed levels of
administrative support for their foreign assistance programs.[Footnote
42] Although State/F plans and budgets for foreign assistance program
funds, State's Resource Management Bureau and USAID's Management Bureau
plan and request funds for operating and administrative expenses. As a
result, senior management lacks a comprehensive view of the total
resources needed to support their program activities.
State/F Faces Challenges in Developing and Implementing Its Multiyear
Planning Process:
State/F faces two key challenges related to its development of the 5-
year CAS. First, the CAS may not adequately replace USAID's country
strategies, as State/F initially planned. According to some USAID and
State officials in Washington, D.C., and in the countries we visited,
the CAS is a high-level document that includes overall objectives for
the country but--unlike USAID's country strategies--lacks substantive
content and details on how USAID is to achieve its objectives. For
example, the CAS' content is limited to high-level information on (1)
the country program and the overall U.S. strategic approach and
priorities, (2) up to five priority goals, and (3) resource
assumptions. In contrast, the 2002-2006 USAID country strategy for
Peru, for example, includes, for each of Peru's seven objectives, a
detailed discussion of the objective, the development challenge,
performance measures, critical assumptions, commitment and capacity of
other development organizations, and sustainability issues.
To address USAID missions' concerns, in October 2008 the DFA issued an
executive message that outlined three strategic planning options
regarding the development of interim country strategies. The message
stated that a USAID mission could (1) continue to use an existing
country strategy; (2) develop an interagency CAS; or (3) develop an
updated, USAID-specific country strategy if the existing strategy is no
longer relevant and a CAS is not likely to be in place in fiscal year
2009. According to this guidance, these options would be available
while the CAS is being piloted. As of March 2009, State/F officials
told us that it had not yet completed an assessment of the CAS pilot.
Second, State/F's suspension of the development of USAID country
strategies led to planning challenges at some USAID missions,
particularly during the first 2 years of State/F's existence. According
to some USAID officials, until October 2008--when USAID issued guidance
for developing interim country strategies--the absence of a long-term
country strategy hampered their ability to plan and manage project
activities. For example, in June 2008, USAID officials in Ethiopia told
us that before their country strategy had expired, USAID and the
Ethiopian government routinely agreed on program activities that USAID
planned to carry out over the next several years, pending availability
of funds. However, absent a current multiyear strategy, and because of
the resulting uncertainty about USAID's long-term goals and strategies
for the country, USAID officials were reluctant to reach preliminary
agreements with various Ethiopian government ministries. In Ukraine,
USAID officials told us that in June 2006, State/F suspended the
mission's efforts to update its 2003-2007 country strategy. As a
result, the officials said, USAID's strategy for Ukraine became
outdated and did not reflect the current political, economic, and
developmental environment in Ukraine, which had changed dramatically.
They, too, were reluctant to execute agreements with the Ukrainian
government without a clear understanding of how these projects link to
a long-term strategy for the country. In contrast, USAID officials in
Haiti told us that State/F's suspending development of new country
strategies had not adversely affected them because a 3-year country
strategy for 2007-2009 had been approved and implemented in August
2006. Although the guidance issued by USAID in September 2008 is a step
forward in addressing USAID missions' concerns, the development of
USAID country-specific strategic plans will remain an interim process
until the CAS is finalized and USAID country strategies are fully
developed and implemented.
State/F Faces Challenges in Its Consolidated Budget Processes:
We identified two key concerns with State/F's consolidated budget
processes. First, although State/F's consolidated budget process was in
part intended to bring needed coherence and accountability to
governmentwide foreign assistance programs, the process excludes
billions of dollars both within and outside State and USAID's
jurisdiction. For example, of the $36.6 billion appropriated to, or
administered by, State and USAID, only about half went through the new
State-USAID consolidated budget, planning, and reporting processes in
fiscal year 2008. Further, according to State/F guidance, State/F
coordinates with, but does not approve budget requests and resource
allocations for, the Global HIV/AIDS Initiative (GHAI) or the
Millennium Challenge Corporation (MCC); the appropriations act for
fiscal year 2008 included $1.8 billion and $1.6 billion, for GHAI and
MCC, respectively. State/F's process also does not include Pub. L. 480
Title II grants,[Footnote 43] for which almost $1.7 billion was
appropriated in fiscal year 2008.
Second, State/F's budget process reforms may affect a mission's ability
to respond to unexpected events in a timely manner. Under State/F's
operational plan process, funds are allowed and committed at lower
levels--the element and subelement levels respectively--than they were
with previous processes. This change allows State/F to report a finer
level of detail regarding how funds are used. However, State and USAID
officials, both in headquarters and the field, expressed concern that
this change could have unintended impacts on a mission's ability to
respond effectively to changing conditions, possibly hampering its
ability to address time-critical issues such as riots or disasters. For
example, officials in State's Bureau of Western Hemisphere Affairs,
describing their efforts to identify funding for a new, multiyear
administration initiative, said that before State/F was created, the
bureau was able to quickly and easily reallocate funds to respond to
unexpected events. Now, to address such an event, the bureau must
request and receive approval to reallocate funds in the operational
plan, because State/F requires all funds to be committed in advance.
The officials said that they have found this to be a complex and
lengthy process, requiring multiple levels of approval--often up to the
DFA[Footnote 44]--for a variety of funding changes. State/F has taken
some steps to reduce the burden of its reallocation process. For
example, it delegated authority to USAID mission directors to approve
reallocation requests in certain instances. In addition, State/F
decreased the number of reallocation requests that need to be approved
by the DFA. In another example, USAID officials in the field described
their efforts to respond to unexpected parliamentary elections in
Ukraine while their operational plan was under review by State/F.
According to these officials, the mission requested that State/F
release some funds prior to approving the plan, so that the mission
could develop and implement programs related to the Ukraine's upcoming
elections. According to State/F's reprogramming guidance for fiscal
years 2007 and 2008, this request required the signatures of 10 USAID
and State officials (outside State/F) and 4 State/F officials,
including the DFA. USAID officials said the approval took 6 weeks and
that this limited their ability to develop and implement their
programs.
State/F Faces Challenges in Workforce Management Issues:
Although State/F has taken some steps to establish a workforce and
organizational structure, including beginning to define the roles and
responsibilities of its employees, our work and an October 2008 State/
F internal management review found that State/F faces key challenges in
managing its workforce. For example, the State/F internal management
review found that (1) State/F had not yet clearly defined the roles of
some of its employees and organizational units and (2) State/F had not
ensured that its employees have the skills and competencies needed to
manage foreign assistance programs. According to State/F officials, in
an effort to demonstrate an impact on U.S. foreign assistance programs,
State/F initially gave precedence to creating and deploying
consolidated budget, planning, and reporting processes rather than to
examining the workforce composition, defining roles and
responsibilities, and ensuring needed skills and competencies. Although
it is important for leaders to be decisive and deliver early successes,
we have previously found that success in an organizational
transformation or merger is more likely when positions are filled based
on the competencies needed for the new organization.[Footnote 45]
* Roles and responsibilities. The October 2008 internal management
review noted that the roles of some State/F employees and
organizational units were not well defined or understood; that the
responsibilities of some offices overlapped; and that there was
confusion about when, during the planning and budgeting processes,
certain employees should be involved in various issues. Similarly,
State and USAID officials in Washington, D.C., and most of the six
countries we visited told us that State/F employees sometimes were
unable to answer questions about operational plan guidance, FACTS, and
FACTS Info and were unsure where in State/F to direct such questions so
as to ensure timely, accurate answers.
* Skills and competencies. State/F's internal management review noted
concerns about whether some State/F employee skills are well matched
with State/F's core functions. The review found that although State/F
staff had strong skills, they either were not placed in positions where
they could leverage these skills or their skills did not match the
capabilities that State/F required. During our work, some State and
USAID officials in Washington, D.C., and in the field echoed these
concerns.
Although State/F has taken some actions in response to its October 2008
internal review, it has not developed a long-term workforce management
plan for addressing these challenges. During our review, State/F
officials told us that they had initiated several corrective actions in
response to recommendations in the internal review, such as defining
roles and responsibilities for its various executive and managerial
positions and its organizational units; developing plans to ensure that
the current workforce is aligned to meet these needs; and improving
training and professional development offered to its employees.
However, State/F has not clearly defined roles and responsibilities for
some of its employees. In addition, State/F has not developed a long-
term workforce management plan to periodically reassess its workforce
capacity to carry out assigned responsibilities, such as supporting and
managing the consolidated budget, planning, and reporting processes for
State and USAID foreign assistance programs. Our previous work has
shown that many aspects of workforce planning and management require
long-term strategies, to ensure that the agency's human capital program
capitalizes on its workforce's strengths and addresses related
challenges in a manner that is clearly linked to achieving the agency's
mission and goals.[Footnote 46]
Further, although State/F has defined its core functions and is
"translating them down to its various offices," State/F officials told
us that these definitions are considered an internal management tool
and therefore have not been, and will not be, shared with State and
USAID employees outside State/F. We have previously reported that
having an effective and ongoing internal and external communication
strategy is essential to making transformation happen;[Footnote 47]
communicating with stakeholders should be a top priority and is central
to forming the partnerships that are needed to develop and implement
the organization's strategies. Moreover, we have observed that such
communication is especially crucial in public sector organizational
transformations, such as State and USAID's reform of foreign
assistance. Policymaking and program management demand transparency,
and stakeholders and interested parties are concerned not only about
the results to be achieved but also about the processes to be used in
achieving those results.
Conclusions:
State/F has taken important recent steps to align State and USAID
foreign assistance activities with broader foreign policy goals.
Several aspects of State/F's establishment--such as involving top
leadership, developing a mission statement and operating principles,
employing a Chief Operating Officer, and involving employees in the
transformation process--are consistent with leading practices that we
have previously found to increase the likelihood of success in such a
large-scale transformation. Moreover, State/F's actions to consolidate
and reform State and USAID planning and budgeting could help address
program fragmentation; strengthen accountability; and tighten the link
among strategic objectives, resource allocation, and program
implementation. For example, by basing its annual operational plans and
5-year CAS on its standardized program structure, State/F is attempting
to tie its planning and budgeting to strategic foreign policy
objectives. Further, the CAS process has the potential to further
transparency and enhance interagency coordination and collaboration by
including the activities of all U.S. agencies providing foreign
assistance in the country. If effectively implemented, the CAS could
also be a first step in creating a comprehensive governmentwide
strategy for U.S. foreign assistance.
In other respects, State/F's initiatives are not well aligned with key
practices that we have previously found in successful transformations
and mergers. Without time frames, goals, and measures for defining
success for all aspects of its foreign assistance reforms--including
developing and implementing a comprehensive U.S. foreign assistance
strategy, developing guidance for other U.S. entities' foreign
assistance, and fully implementing its stated goal of multiyear
comprehensive country assistance strategies--State/F's capacity to
build momentum and demonstrate progress in these key reform efforts is
limited. Lacking a comprehensive U.S. strategy, federal agencies risk
implementing a fragmented patchwork of programs that could limit the
overall effectiveness of the federal effort while failing to address
the highest priorities. In addition, absent a clear, consistent
strategy for communicating with staff about planning and budget
reforms, State/F's communications with staff in Washington, D.C., and
in the field may--despite initial steps to develop and implement more-
effective communications processes--continue to cause confusion,
constraining its ability to build management-staff relations and
staff's sense of ownership for the reforms.
Among the planning and budgeting challenges discussed in this report,
it is particularly important to clearly capture all relevant programs
and activities in an agency's planning process. Because State/F's
operational plan does not clearly articulate the programs and services
implemented by USAID's regional offices, senior management may lack a
holistic picture of foreign assistance resources and may therefore lack
important information needed to make informed decisions among competing
priorities. Additionally, unless State/F ensures that the goals and
measures in its operational plans are compatible with those articulated
in the related plans and strategies of other U.S. entities delivering
foreign assistance, it may continue to face challenges in obtaining
information about these agencies' activities and, in the long term, may
face challenges in collaborating with these agencies to develop a
comprehensive governmentwide foreign assistance strategy.
Finally, without a long-term workforce management plan for periodically
assessing its workforce capacity to manage foreign assistance,
including implementing strategies to fill any identified gaps in skills
and competencies, State/F cannot ensure that its staff are prepared to
meet the demands of reforming and consolidating foreign assistance
processes.
Recommendations for Executive Action:
We are making the following seven recommendations to the Secretary of
State to further the reform of U.S. foreign assistance.
Once the incoming administration has defined its overarching goals for
foreign assistance, we recommend that the Secretary of State work with
all U.S. government entities involved in the delivery of foreign
assistance to take the following steps:
* Develop and implement a comprehensive, governmentwide foreign
assistance strategy, complete with time frames and measures for
successful implementation. Involving other agencies in this effort
could include adopting key practices that we have found to sustain and
enhance interagency coordination and collaboration in addressing common
goals.
* Develop and use compatible goals and measures to inform their
planning, budgeting, and reporting for their respective foreign
assistance programs.
If the administration decides to continue foreign assistance reform
efforts consistent with the State/F reforms announced in January 2006,
we recommend that the Secretary direct the DFA to:
* establish a time frame for fully implementing all aspects of these
reforms as well as benchmarks and goals to measure progress and define
success;
* establish a time frame for developing and implementing multiyear,
country-specific, foreign assistance strategies in all countries where
U.S. departments, agencies, or organizations provide assistance;
* ensure that State/F's communication strategy encourages substantive,
timely, two-way information exchanges between State/F and USAID and
State employees;
* consider an operational plan structure that clearly portrays and
accurately captures the functions and activities of regional programs
and activities; and:
* develop a long-term workforce management plan to periodically assess
State/F's workforce capacity to manage foreign assistance.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Secretary of State and the
USAID Administrator for review. State provided consolidated, written
comments on behalf of both State and USAID that are reprinted in
appendix V. In addition, State and USAID provided technical corrections
and additional comments for our consideration, which we incorporated as
appropriate.
While State and USAID generally acknowledged or agreed to consider six
of our seven recommendations, State and USAID officials said that they
believed they had already met our recommendation to consider an
operational plan structure that clearly portrays and accurately
captures the functions and activities of regional programs and
activities.
In response to this comment, we clarified in our report that regional
missions do in fact complete operational plans. However, as we note in
our report, regional officials told us that it is difficult to
categorize and capture key regional activities in the plan.
Specifically, they said that because the operational plan has a
bilateral mission focus and distinguishes between programs in different
sectors, it does not adequately describe regional offices' programs and
services in multiple sectors for multiple limited presence countries.
Further, we note in our report that senior leaders in State/F
acknowledged that the operational plan's bilateral mission focus is
problematic in this regard. We believe that it is important to clearly
capture all relevant programs and activities in an agency's planning
process so that senior management has a holistic picture of foreign
assistance resources--important information needed to make informed
decisions among competing priorities. We therefore maintain that this
recommendation remains valid.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to interested congressional committees, the Secretary of State, the
Acting Administrator of USAID, and the Director of the Office of
Management and Budget. We will also make copies available to others
upon request. In addition, this report will be available at no charge
on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact Denise M. Fantone at (202) 512-4997 or fantoned@gao.gov; or
David Gootnick at (202) 512-3149 or gootnickd@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Individuals who made key
contributions to this report are listed in appendix VI.
Signed by:
Denise M. Fantone:
Director, Strategic Issues:
Signed by:
David Gootnick:
Director, International Affairs and Trade:
[End of section]
Appendix I: Scope and Methodology:
The objectives of this study were to (1) examine key actions that the
Office of the Director of Foreign Assistance (State/F) has taken to
reform foreign assistance by consolidating the foreign assistance
operations of the Department of State (State) and the U.S. Agency for
International Development (USAID) and (2) identify any key challenges
that affect State/F's implementation of these reforms.
To accomplish both of these objectives, we obtained and analyzed
various agency documents describing the creation of State/F and its
workforce, including organizational charts, staffing charts, position
descriptions, and changes in work responsibilities. We also obtained
and analyzed various State/F documents describing its reformed
planning, budgeting, and reporting processes, guidance for implementing
these processes, and examples of the documents produced by these
processes (e.g., Operational plans and Congressional Budget
Justifications). We also obtained and reviewed the fiscal years 2007
and 2008 "after-action reviews" of the State/F's planning and budgeting
processes conducted by State/F, as well as documents that describe
changes to the processes based on these reviews.
We conducted more than 40 interviews with State and USAID officials in
Washington, D.C., involved in State/F's reforms, including officials in
various State/F offices and in various State and USAID regional and
functional bureaus. To gain an understanding of the field's involvement
in and perspectives on State/F's reforms, we also conducted site visits
at U.S. Embassies and USAID missions in six countries: Ethiopia, Haiti,
Jordan, Kenya, Peru, and Ukraine. We selected these locations on the
basis of the following factors:
* Funding levels. Each country's program was among the top recipients
of U.S. funding in its geographic region.
* Regional responsibilities. USAID missions in three of the six
countries--Kenya, Peru, and Ukraine--are also responsible for managing
regional programs or programs in neighboring countries.
* Variety of foreign assistance activities. In all of the countries, a
variety of foreign assistance activities are provided by State and
USAID as well as by other federal agencies, including the Departments
of Agriculture, Commerce, Defense, Energy, Health and Human Services,
and the Treasury.
At each embassy and mission, we met with officials involved in State/
F's planning and budgeting processes. While most of these officials
were from State and USAID, we also met with officials from other
agencies that implement programs on their behalf or that coordinate
with them, including the Departments of Agriculture and Defense.
Finally, our review was informed by our past work. We reviewed our past
reports related to State and USAID, as well as reports on strategic
planning, performance budgeting, performance reporting, and interagency
collaboration and coordination. We also selected seven of the nine key
practices from our past work on organizational mergers and
transformations to review State and USAID efforts to establish State/F.
Our review did not include the practices of using the performance
management system to define responsibility and assure accountability
for change or building a world-class organization because of the
evolving nature of State/F's organization and workforce.
[End of section]
Appendix II: U.S. Departments, Agencies, and Other Entities That
Provide Foreign Assistance:
* African Development Foundation:
* Centers for Disease Control and Prevention:
* Department of Agriculture:
* Department of Commerce:
* Department of Defense:
* Department of Energy:
* Department of Health and Human Services:
* Department of the Interior:
* Department of Justice:
* Department of Labor:
* Department of State:
* Department of the Treasury:
* Environmental Protection Agency:
* Export-Import Bank:
* Inter-American Development Foundation:
* Millennium Challenge Corporation:
* National Institute of Standards and Technology:
* National Oceanic and Atmospheric Administration:
* National Science Foundation:
* Overseas Private Investment Corporation:
* Peace Corps:
* USAID:
* U.S. Fish and Wildlife Service:
* U.S. Forest Service:
* U.S. Institute of Peace:
* U.S. Patent and Trademark Office:
* U.S. Trade and Development Agency:
Note: Congressional Research Service presentation of Organization for
Economic Co-operation and Development (OECD) data.
[End of section]
Appendix III: State/F Information Systems:
To support State and USAID planning, budgeting, and reporting of
foreign assistance under these reforms, State/F developed two new data
information systems, the Foreign Assistance Coordination and Tracking
System (FACTS) and FACTS Info.[Footnote 48] FACTS, which State/F began
to develop in mid-2006, is a database used to collect foreign
assistance planning and reporting data, including plans for
implementing current-year appropriated budgets and performance planning
and reporting data. FACTS Info, which State/F created in 2007, is a
system used to aggregate, analyze, and report data on U.S. foreign
assistance programs under the authority of the DFA. Although State and
USAID are the only U.S. agencies currently using both systems, State/F
expects the systems to eventually include data from other agencies
involved in foreign assistance, including, among others, the Millennium
Challenge Corporation and the Department of Treasury.
In November 2008, in connection with our body of work addressing the
management of State/F and at your request, we reported on (1) the
creation and development of FACTS and FACTS Info and (2) whether State/
F is following best practices for configuration management--the process
of establishing and maintaining control over changes made to a system-
-and risk management of FACTS and FACTS Info.[Footnote 49] In
conducting this work, we reviewed FACTS and FACTS Info system
procurement, contract, development, performance, and assessment
documents from State and USAID. We also reviewed State/F's
configuration management and risk management procedures for consistency
with industry best practices.
FACTS has been developed in two phases, known as FACTS I and FACTS II.
In conjunction with USAID, State/F developed FACTS I in December 2006
as a database to collect foreign assistance planning and reporting
data, including plans for implementing current-year appropriated
budgets and performance planning and reporting data for State, USAID,
and the more than 25 other U.S. departments and agencies involved in
providing foreign assistance.[Footnote 50] According to a State/F
survey of over 100 State and USAID users in 2007, as well as our
interviews with State and USAID officials in Washington, D.C., and the
six countries we visited, FACTS I was slow and unreliable during the
first 2 years of the new foreign assistance funding process. To remedy
these problems, in February 2008, State/F hired a contractor to develop
FACTS II, which was deployed worldwide in October 2008. State/F created
FACTS Info to aggregate, analyze, and report data on U.S. foreign
assistance programs under the authority of the DFA. During the initial
pilot phase, which began in September 2007, FACTS Info was accessible
to a limited number of State and USAID users. FACTS Info was expanded
to include additional State/F and USAID users when the pilot phase
ended in February 2009.
FACTS II and the ongoing pilot of FACTS Info have recently implemented
new configuration management processes, but both lack adequate risk
management procedures, such as formalized procedures to plan for
foreseeable risks. State/F has taken steps to address these challenges,
such as updating the project management plan and implementing change
tracking software to address certain weaknesses, particularly to both
systems' configuration management. However, as of October 2008, State/
F had not fully implemented improvements to the systems' risk
management; State officials noted that they plan to complete these
improvements by December 2008. Because both FACTS II and FACTS Info
lack formal processes for risk management, State/F cannot ensure that
risks are identified, analyzed, tracked, and mitigated, increasing the
likelihood that potential problems become actual problems. Moreover,
State/F was unable to mitigate a key risk that led to problems with the
development of FACTS II. Without improved risk management processes,
risks may not be effectively managed.
In our November 2008 report, we recommended that, to help ensure that
FACTS II and FACTS Info are implemented successfully and perform as
designed, the Secretary of State direct the DFA to better utilize best
practices for risk management procedures to both systems.[Footnote 51]
In particular, we recommended that the DFA (1) identify and develop a
comprehensive list of system development risks for FACTS II and FACTS
Info; and (2) fully develop risk mitigation plans for FACTS II and
FACTS Info. State has taken some actions in response to these
recommendations. Specifically, State/F issued a risk registry that
includes 27 systems development risks for both FACTS II and FACTS Info
and how it had either already addressed or planned to address the
risks. Also, State/F developed a draft of a combined risk management
plan for both FACTS II and FACTS Info and, in February 2009, a State/F
official told us that they expected the plan to be approved by the end
of that month. However, as of April 2009, the plan had not yet been
approved.
[End of section]
Appendix IV: Foreign Assistance Framework:
Goal: To help build and sustain democratic, well-governed states that
respond to the needs of their people, reduce widespread poverty and
conduct themselves responsibly in the international system.
Country category and definition: Rebuilding countries; States in, or
emerging from and rebuilding after, internal or external conflict;
Strategic objectives: Peace and security: Prevent or mitigate state
failure and/or violent conflict;
Strategic objectives: Governing justly and democratically: Assist in
creating and/or stabilizing a legitimate and democratic government and
a supportive environment for civil society and media;
Strategic objectives: Investing in people: Start or restart the
delivery of critical social services, including health and educational
facilities, and begin building or rebuilding institutional capacity;
Strategic objectives: Economic growth: Assist in the construction or
reconstruction of key internal infrastructure and market mechanisms to
stabilize the economy;
Strategic objectives: Humanitarian assistance: Address immediate needs
of refugee, displaced, and other affected groups;
End goal of U.S. foreign assistance: Stable environment for good
governance, increased availability of essential social services, and
initial progress in creating policies and institutions on which future
progress will rest;
Graduation trajectory: Advance to "developing countries" or
"transforming countries" category.
Country category and definition: Developing countries; States with low
or lower-middle income, not yet meeting MCC performance and political
rights criteria;
Strategic objectives: Peace and security: Address key remaining
challenges to security and law enforcement;
Strategic objectives: Governing justly and democratically: Support
policies and programs that accelerate and strengthen public
institutions and the creation of a more vibrant local government, civil
society and media;
Strategic objectives: Investing in people: Encourage social policies
that deepen the ability of institutions to establish appropriate roles
for the public and private sector in service delivery;
Strategic objectives: Economic growth: Encourage economic policies and
strengthen institutional capacity to promote broad-based growth;
Strategic objectives: Humanitarian assistance: Encourage reduced need
for future HA by introducing prevention and mitigation strategies,
while continuing to address emergency needs;
End goal of U.S. foreign assistance: Continued progress in expanding
and deepening democracy, strengthening public and private institutions,
and supporting policies that promote economic growth and poverty
reduction;
Graduation trajectory: Advance to "transforming countries" category.
Country category and definition: Transforming countries; States with
low or lower-middle income, meeting MCC performance and political
rights criteria;
Strategic objectives: Peace and security: Nurture progress toward
partnerships on security and law enforcement;
Strategic objectives: Governing justly and democratically: Provide
limited resources and technical assistance to reinforce democratic
institutions;
Strategic objectives: Investing in people: Provide financial resources
and limited technical assistance to sustain improved livelihoods;
Strategic objectives: Economic growth: Provide financial resources and
technical assistance to promote broad-based growth;
Strategic objectives: Humanitarian assistance: Address emergency needs
on a short-term basis, as necessary;
End goal of U.S. foreign assistance: Government, civil society, and
private sector institutions capable of sustaining development progress;
Graduation trajectory: Advance to "sustaining partnership" category or
graduate from foreign assistance.
Country category and definition: Sustaining partnership countries;
States with upper-middle income or greater for which U.S. support is
provided to sustain partnerships, progress, and peace;
Strategic objectives: Peace and security: Support strategic
partnerships addressing security, CT, WMD, and counter-narcotics;
Strategic objectives: Governing justly and democratically: Address
issues of mutual interest;
Strategic objectives: Investing in people: Address issues of mutual
interest;
Strategic objectives: Economic growth: Create and promote sustained
partnerships on trade and investment;
Strategic objectives: Humanitarian assistance: Address emergency needs
on a short-term basis, as necessary;
End goal of U.S. foreign assistance: Continued partnership as
strategically appropriate where U.S. support is necessary to maintain
progress and peace;
Graduation trajectory: Continue partnership or graduate from foreign
assistance.
Country category and definition: Restrictive countries; States of
concern where there are significant governance issues;
Strategic objectives: Peace and security: Prevent the acquisition and
proliferation of WMD and support CT and counter-narcotics;
Strategic objectives: Governing justly and democratically: Foster
effective democracy and responsible sovereignty. Create local capacity
for fortification of civil society and path to democratic governance;
Strategic objectives: Investing in people: Address humanitarian needs;
Strategic objectives: Economic growth: Promote a market-based economy;
Strategic objectives: Humanitarian assistance: Address emergency needs
on a short-term basis, as necessary;
End goal of U.S. foreign assistance: Civil society empowered to demand
more effective democracies and states respectful of human dignity,
accountable to their citizens, and responsible towards their neighbors;
Graduation trajectory: Advance to other relevant foreign assistance
category.
Country category and definition: Global or regional;
Strategic objectives: Activities that advance the five objectives,
transcend a single country's borders, and are addressed outside a
country strategy;
End goal of U.S. foreign assistance: Achievement of foreign assistance
goal and objectives;
Graduation trajectory: Determined based on criteria specific to the
global or regional objective.
Source: Department of State.
Notes:
CT = counterterrorism:
MCC = Millennium Challenge Corporation:
WMD = weapons of mass destruction:
[End of table]
[End of section]
Appendix V: Comments from the Department of State:
United States Department of State:
Assistant Secretary for Resource Management and Chief Financial
Officer:
Washington, D.C. 20520:
Ms. Jacquelyn Williams-Bridgers:
Managing Director International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "Foreign Aid
Reform: Comprehensive Strategy, Interagency Coordination, and
Operational Improvements Would Bolster Current Efforts" GAO Job Code
450676.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Peggy Hoyle, Senior Advisor, Office of the Director of U.S. Foreign
Assistance at (202) 647-2624.
Sincerely,
Signed by:
James L. Millette:
cc:
GAO - Jackie Nowicki:
F - Richard Greene (Acting):
State/OIG - Mark Duda:
[End of letter]
Department of State Comments on GAO Draft Report:
Foreign Aid Reform: Comprehensive Strategy, Interagency
Coordination, and Operational Improvements Would Bolster Current
Efforts:
(GAO Report GAO-09-192, GAO Code 450676)
Thank you for allowing the Department of State the opportunity to
comment on the draft report, Foreign Aid Reform: Comprehensive
Strategy, Interagency Coordination, and Operational Improvements Would
Bolster Current Efforts." We appreciate the recommendations offered by
the GAO.
As the GAO found, State/F has implemented certain key practices and
programs characteristic of successful organizations and has launched
processes to coordinate State/USAID planning, budgeting, reporting, and
strategizing. The driving purpose behind this effort was and continues
to be greater coherence, transparency and accountability for U.S.
foreign assistance. As the Secretary of State indicated at the time
that the reforms were launched, we must get our own house in order
first. What she meant was that step one of the reforms would be to
obtain coherence over the assistance under her direct approval
authority, that is, State and USAID appropriations. Having accomplished
that, we recognize, as does GAO, that it is appropriate to consider
taking additional steps toward greater coherence over all USG foreign
assistance, and we view the GAO's recommendations in that light.
Recommendation: Develop and implement a comprehensive, government-wide
foreign assistance strategy. At the time the reforms were launched in
2006, F gave serious consideration to undertaking a government-wide
foreign assistance strategy. With the NSC having developed the
government-wide National Security Strategy and USAID having recently
completed its White Paper on development, we had a unique appreciation
of how much time, effort and political capital are expended in these
endeavors. We also believed that these existing products, taken
together, offered useful, appropriate and far-reaching guidance for
foreign assistance. Based on the forgoing and other cost/benefit
factors, F deferred initiating a government-wide foreign assistance
strategy. With a new Administration and three years of learning
associated with the reforms, it makes sense to revisit this issue. We
appreciate this recommendation and take it under advisement.
Recommendation: Develop and use compatible government-wide goals and
measures for planning, budgeting and reporting. We believe that the
reforms in place represent a strong foundation for the government-wide
endeavor recommended. With the standardized program structure, offering
a common language for all programming, and the refined FACTS database,
the tools are in place for government-wide planning and reporting of
foreign assistance programs. For annual planning, the Operational Plan,
which is grounded in the program structure, can be expanded beyond
State and USAID planning in a more robust way. On the longer-term
planning horizon, the country assistance strategy pilot is already
government-wide and can serve as the basis for planning for all foreign
assistance programs over five or more years. Common indicators and
measures have been developed by interagency experts and, linked to the
common definitions, serve as the lynchpin of across the board,
consistent reporting. With respect to the budget, there is now
interagency budgeting for State and USAID, the first time all of the
appropriations under the Secretary have been comprehensively considered
and requested. While we recognize that significant steps would need to
be taken to have joint budgeting across all relevant agencies, e.g.
DOD, as above, we appreciate this recommendation and take it under
advisement.
Recommendation: Establish a timeframe and benchmarks for full
implementation of the reforms. If the Administration decides to
continue and build upon the reforms, it makes sense to consider having
timeframes and benchmarks in place.
Recommendation: Establish a timeframe for country assistance
strategies. At this time, F is completing the Country Assistance
Strategy (CAS) Pilot Project assessment and will brief the new
Administration on the results of the pilot project. Based on the new
Administration's guidance, we will consider the future of the CAS or
any recommended successor as well as realistic timeframes.
Recommendation: Ensure that there is a communication strategy with
timely two-way information exchanges: From the GAO findings, we
understand that the basis for this recommendation is purported
communication issues with the 2007 Operational Plan process. The 2007
Operational Plan process was carried out in 2006, three years ago when
the F office was but a few months old. At that time, an optimal
communications apparatus admittedly did not exist. However, in the
three years since, F has developed a strong and consistent
communications apparatus. There is well-vetted, timely guidance
associated with all F processes. Our Deputy COO acts as communications
manager and sends out a weekly written update with developments in
foreign assistance in general and the F processes specifically. F
senior staff regularly attend USAID senior staff meetings as well as
all State Department bureau planner meetings to provide verbal and
written updates. These updates are reinforced in the weekly updates. F
senior staff confer with regional and functional colleagues on a
regular basis to exchange specific information regarding their
respective areas. As appropriate, they also visit the field to
understand better field concerns and to respond to any questions about
F processes. F staff participate in training for incoming State foreign
service classes at FSI as well as incoming USAID DLI classes. Finally,
as noted below, F has established a special assistant position which
will act as communications manager. Good communication is critical and
there is always room for improvement. In that vein, we think it is
important to consider this recommendation.
Recommendation: Consider an operational plan structure that captures
regional activities. We believe we have met this recommendation.
Regional activities can be and are captured in the Operational Plans.
In fact, regional units produce their own Operational Plans.
Recommendation: Develop strategies to fill gaps in employee skills and
competencies. Enhancing employee capacity and understanding has been a
focus of the Office of the Director of US Foreign Assistance as it has
matured. We concur with the idea of further improving employee skill
sets and will work to encourage and implement further training and
enhancement.
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Denise M. Fantone, (202) 512-4997 or fantoned@gao.gov; and David
Gootnick, (202) 512-3149 or gootnickd@gao.gov.
Staff Acknowledgments:
In addition to the contacts named above, Jacqueline M. Nowicki
(Assistant Director), Thomas Costa, Benjamin T. Licht, Reid Lowe,
Sheila Rajabiun, and George Taylor made key contributions to this
report. David Dornisch and Grace Liu provided technical support.
[End of section]
Footnotes:
[1] In the past, the DFA has served concurrently as USAID
Administrator, a position that also reports to the Secretary of State.
[2] More than 25 U.S. government entities are involved in providing
foreign assistance. See appendix II.
[3] Strategic Plan Fiscal Years 2007-2012: Transformational Diplomacy,
U.S. Department of State and U.S. Agency for International Development,
revised May 7, 2007. The five strategic objectives of transformational
diplomacy are achieving peace and security, governing justly and
democratically, investing in people, promoting economic growth and
prosperity, and providing humanitarian assistance.
[4] We concluded that, with respect to functions originally conferred
by statute either upon the Secretary or the President, the subsequent
redelegation by the Secretary of these functions was authorized by law.
See GAO, Delegation of Authorities to the Director of Foreign
Assistance, GAO B-316655 (Washington, D.C.: Oct. 29, 2008).
[5] GAO, Foreign Assistance: State Department Foreign Aid Information
Systems Have Improved Change Management Practices but Do Not Follow
Risk Management Best Practices, [hyperlink,
http://www.gao.gov/products/GAO-09-52R] (Washington, D.C.: Nov. 21,
2008).
[6] After fiscal year 2008, the performance plan and performance report
were removed from the operational plans; they are now a separate
document.
[7] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2,
2003).
[8] FACTS, which State/F began developing in mid-2006, is used to
collect foreign assistance planning and reporting data, including plans
for implementing current-year appropriated budgets and performance
planning and reporting data. FACTS Info, which State/F created in 2007,
is used to aggregate, analyze, and report data on U.S. foreign
assistance programs under the authority of the DFA.
[9] In this report, references to operating and administrative expenses
include amounts derived from State's Diplomatic and Consular Protection
account and USAID's Operating Expense account but do not include
program funds used to support administrative costs.
[10] The process also excludes billions of dollars of foreign
assistance funds for programs outside State and USAID's jurisdiction.
[11] USAID, "Remarks by Condoleezza Rice, U.S. Secretary of State: New
Direction for Foreign Assistance, January 19, 2006, U.S. Department of
State, Washington, D.C.," [hyperlink,
http://www.usaid.gov/press/speeches/2006/sp060119.html] (accessed Apr.
2, 2009).
[12] Each appropriation account is also assigned to a budget function
and subfunction used by the budget committees to develop an overall
fiscal plan--a system to classify budget authority outlays, receipts
and expenditures according to the national needs being addressed.
Function 150, International Affairs, includes maintaining peaceful
relations, commerce, and travel between the United States and the rest
of the world and promoting international security and economic
development abroad.
[13] Congressional Research Service. GAO did not independently verify
this funding information.
[14] Accounts at State and USAID that are not reflected in State/F's
budget and planning processes for fiscal year 2008 include State's
Diplomatic and Consular Program ($6.8 billion), Contributions to
International Organizations ($1.4 billion) and International
Peacekeeping ($2 billion) accounts, and USAID's Operating Expense
account ($801 million).
[15] This process is named after Section 653(a) of the Foreign
Assistance Act of 1961, now codified at 22 U.S.C, §2413(a). This
section states that not later than 30 days after the enactment of a law
appropriating funds to carry out a provision of this act (other than
section 451 or 637 of the Arms Export Control Act), the President shall
notify Congress of each foreign country and international organization
to which the U.S. government intends to provide any portion of the
funds under such law and the amount of funds under that law, by
category of assistance, that the U.S. government intends to provide to
each.
[16] [hyperlink, http://www.gao.gov/products/GAO-09-52R].
[17] [hyperlink, http://www.gao.gov/products/GAO-03-669].
[18] GAO, Managing for Results: Barriers to Interagency Coordination,
[hyperlink, http://www.gao.gov/products/GAO/GGD-00-106] (Washington,
D.C.: Mar. 29, 2000).
[19] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, [hyperlink,
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21,
2005).
[20] [hyperlink, http://www.gao.gov/products/GAO-03-669].
[21] GAO, Organizational Transformation: Implementing Chief Operating
Officer/Chief Management Officer Positions in Federal Agencies,
[hyperlink, http://www.gao.gov/products/GAO-08-34] (Washington, D.C.:
Nov. 1, 2007).
[22] [hyperlink, http://www.gao.gov/products/GAO-03-669].
[23] Although State/F uses the term "country-specific operational
plan," operating units other than countries submit operational plans.
For example, in fiscal year 2008, State/F listed 190 operating units--
155 countries, 11 USAID regional offices, and 24 State and USAID
regional and functional bureaus based in Washington, D.C.--that were
required to submit operational plans. State/F defines an operating unit
as the organizational unit responsible for implementing a foreign
assistance program for one or more elements of the foreign assistance
framework.
[24] [hyperlink, http://www.gao.gov/products/GAO-03-669].
[25] Prior to fiscal year 2008, the operational plan included the
performance plan and performance report; these are now published as a
separate document.
[26] See appendix II for a list of the more than 25 U.S. departments,
agencies, and other entities involved in providing foreign assistance.
[27] State/F's guidance for operational plans defines an implementing
mechanism as a binding relationship established between a U.S.
Government agency and an outside party to carry out U.S. Government-
funded programs, by authorizing the use of U.S. Government funds for
(1) acquisition of services or commodities; (2) the provision of
assistance (a grant); or (3) to fulfill specific agreements such as
cash transfers to host-country governments. For the purposes of this
report, we refer to implementing mechanisms as projects.
[28] GAO, Managing for Results: Agency Progress in Linking Performance
Plans with Budgets and Financial Statements, [hyperlink,
http://www.gao.gov/products/GAO-02-236] (Washington, D.C.: Jan. 4,
2002).
[29] We acknowledged in November 2008 [hyperlink,
http://www.gao.gov/products/GAO-09-52R] that FACTS does not include
information from agencies other than State and USAID; however, we also
noted that contractual documents for FACTS I and FACTS II state that
one of the purposes of FACTS is to combine all U.S. government planning
and reporting on foreign assistance activities into one central data
system.
[30] Prior to fiscal year 2008, this information was required at the
program element level, which includes a finer level of detail than the
program area level.
[31] State/F guidance states that each CAS will be a maximum of 15
pages in length and consist of four major sections: (1) introduction
(1.5 pages); (2) overall strategic approach and priorities (2 pages);
(3) discussion of up to five priority goals 2-3 pages per goal); and
(4) resource assumptions (1-2 pages). Each CAS will also include two
appendixes: (1) a bibliography of relevant technical analyses and (2)
country analyses requirements.
[32] The countries are Armenia, Bosnia and Herzegovina, Democratic
Republic of the Congo, Honduras, Jamaica, Morocco, Mozambique, Nepal,
the Philippines, and Tanzania.
[33] Some countries, including Afghanistan and Iraq, will be exempt
from producing a CAS based on the size of their programs and other
factors.
[34] The five country categories are rebuilding countries, developing
countries, transforming countries, sustaining partnership countries,
and restrictive countries. A sixth category, global or regional,
captures activities that cross a single country's borders.
[35] Two USAID Administrators have served as DFA, from June 2006 to
April 2007 and from November 2007 to January 2009, respectively.
[36] In September 2007, State/F established additional positions, for a
total of 97. An additional position was added in January 2008,
resulting in a total of 98. As of February 2009, 15 of the 98 positions
were vacant.
[37] The Bureau for Policy and Program Coordination, which was
abolished in 2006, included several offices that were responsible for
allocation of resources, strategic planning, and related functions.
[38] [hyperlink, http://www.gao.gov/products/GAO-03-669].
[39] Although the Government Performance and Results Act requires these
practices at the department/agency level, we have previously reported
that they can serve as leading practices for planning within lower
levels within federal agencies. For example, see GAO, Pipeline Safety:
Management of the Office of Pipeline Safety's Enforcement Program Needs
Further Strengthening, [hyperlink,
http://www.gao.gov/products/GAO-04-801] (Washington, D.C.: July 23,
2004).
[40] A limited presence country is one in which USAID has limited or no
official presence but to which a regional office provides some foreign
assistance.
[41] [hyperlink, http://www.gao.gov/products/GAO-06-15].
[42] In this report, references to operating and administrative
expenses include amounts derived from State's Diplomatic and Consular
Protection account and USAID's Operating Expense account. Program funds
used to support administrative costs are included in the operational
plan process.
[43] Title II of the Agricultural Trade Development and Assistance Act
of 1954 (a.k.a. Public Law 480) ch. 469, 68 Stat. 454 (1954), codified
as amended at 7 U.S.C. § 1691a, provides U.S. food assistance in
response to emergencies and disasters around the world, and provides
development-oriented resources to help improve long-term food security.
Title II funding is appropriated to the Department of Agriculture and
administered by USAID.
[44] State/F's guidance states that the DFA must approve changes to (1)
the overall funding amount for an operating unit; (2) the amount of
funding for any account within an operating unit; (3) the overall
funding amount for an objective; and (4) funding related to "protected"
program areas, program elements, implementing mechanisms, and other
items such as congressional directives and administration priorities.
[45] GAO, Highlights of a GAO Forum: Mergers and Transformation:
Lessons Learned for a Department of Homeland Security and Other Federal
Agencies, [hyperlink, http://www.gao.gov/products/GAO-03-293SP]
(Washington, D.C.: Nov. 14, 2002).
[46] GAO, Human Capital: Key Principles for Effective Strategic
Workforce Planning, [hyperlink, http://www.gao.gov/products/GAO-04-39]
(Washington, D.C.: Dec. 11, 2003).
[47] [hyperlink, http://www.gao.gov/products/GAO-03-293SP].
[48] Neither FACTS nor FACTS Info is intended to serve as an accounting
or financial tracking system. Both State and USAID have separate
systems for these purposes.
[49] GAO, Foreign Assistance: State Department Foreign Aid Information
Systems Have Improved Change Management Practices but Do Not Follow
Risk Management Practices, [hyperlink,
http://www.gao.gov/products/GAO-09-52R] (Washington, D.C.: Nov. 21,
2008).
[50] Only programs under the authority of the DFA are currently
detailed in FACTS.
[51] [hyperlink, http://www.gao.gov/products/GAO-09-52R].
[End of section]
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