Foreign Aid Reform:

Comprehensive Strategy, Interagency Coordination, and Operational Improvements Would Bolster Current Efforts

GAO-09-192: Published: Apr 17, 2009. Publicly Released: Apr 23, 2009.

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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.

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.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to information provided by the Department of State (State) in August 2013, the Office of U.S. Foreign Assistance (State/F) has been improving reporting for central and regional programs since the fiscal year 2011 operational plan. Central and regional funds can now be designated as contributing to a particular bilateral or regional program, non-presence country, or limited presence country in operational plans, which more accurately reflects the functions and activities of central and regional programs.

    Recommendation: If the administration decides to continue foreign assistance reform efforts consistent with the State/F reforms announced in January 2006, the Secretary of State should direct the DFA to consider an operational plan structure that clearly portrays and accurately captures the functions and activities of regional programs and activities.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: According to information provided by the Department of State (State) in August 2013, State's Office of U.S. Foreign Assistance Resources (State/F) has taken a number of actions to encourage substantive, timely, two-way communication. State/F established a governance committee to manage revisions to planning, budgeting, monitoring and evaluation processes, which provides a unified approach for communicating about major foreign assistance processes. Each process is managed by a core support team that provides assistance to mission and bureau staff, including answering questions and providing training. For each process, State/F established a centralized email account to create a central point for communication to and from missions and bureaus and the State/F technical support teams to facilitate timely and consistent two-way communication. Additionally, State/F conducts in-person and virtual training sessions annually in advance of the launch of each major planning, budgeting, and performance reporting process, which allows State/F to respond to questions from missions and bureaus and clarify expectations at the outset. State/F established standardized methods for collecting and consolidating input from both State and USAID bureaus on mission planning and performance reporting products to ensure transparency among all involved. State/F conducts after action reviews for its various processes, which are documented and made available to missions and bureaus. State/F also created an intranet "Diplopedia" site that is accessible to all State and USAID employees, providing a "one-stop shop" for all information on the planning, budgeting, and monitoring and evaluation processes, including guidance, templates, and timelines, as well as major communications products.

    Recommendation: If the administration decides to continue foreign assistance reform efforts consistent with the State/F reforms announced in January 2006, the Secretary of State should direct the DFA to ensure that State/F's communication strategy encourages substantive, timely, two-way information exchanges between State/F and USAID and State employees.

    Agency Affected: Department of State

  3. Status: Closed - Implemented

    Comments: According to information provided by the Department of State (State) in August 2013, the Integrated Country Strategy (ICS) serves as a "single multi-year overarching strategy that encapsulates U.S. government policy priorities, objectives, and the means by which diplomatic engagement, foreign assistance, and other tools will be used to achieve them." The ICS is a 3-year plan that sets mission goals and objectives through a coordinated and collaborative planning effort among State, the U.S. Agency International Development, and other U.S. government agencies operating overseas under Chief of Mission authority. Each ICS also identifies (1) detailed action plans that identify new and on-going critical activities and interventions; (2) lead agencies for each effort as well as agencies contributing to a single mission objective; (3) time frames for carrying out each activity; and (4) plans for gauging progress. As of August 2013, there are 83 complete ICSs from Europe and Eurasia, the Western Hemisphere, and international organization missions. The missions in Africa and East Asia Pacific will complete their ICSs by February 2014, and the remaining missions in the Near East and South and Central Asia will complete their ICSs by early 2015. The missions in each region will regularly update and revise their ICS every 3 years, although there are provisions for making changes to the strategy due to major changes within the country.

    Recommendation: If the administration decides to continue foreign assistance reform efforts consistent with the State/F reforms announced in January 2006, the Secretary of State should direct the DFA to 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.

    Agency Affected: Department of State

  4. Status: Closed - Not Implemented

    Comments: In the first Quadrennial Diplomacy and Development Review (QDDR), released on December 15, 2010, the Department of State (State) and the U.S. Agency for International Development (USAID) established a new series of reforms and recommendations to, in part, elevate and transform foreign assistance efforts to deliver results. However, the QDDR does not consistently provide time frames for implementing these reforms or benchmarks and goals for measuring progress.

    Recommendation: If the administration decides to continue foreign assistance reform efforts consistent with the State/F reforms announced in January 2006, the Secretary of State should 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.

    Agency Affected: Department of State

  5. Status: Closed - Not Implemented

    Comments: According to information provided by the Department of State (State) in August 2013, a joint State-U.S. Agency for International Development (USAID) team undertook efforts in 2011 to review and revise existing foreign assistance performance indicators to provide a more complete picture of the results of State and USAID foreign assistance. The indicators are used in mission strategic planning processes and are tracked and reported on annual in the Performance Plan and Report. However, State and USAID have yet to take a comprehensive, governmentwide approach to performance planning at the federal level. Therefore, they lack assurance that all U.S. government entities are using compatible goals and measures in their planning, budgeting, and reporting processes.

    Recommendation: Once the incoming administration has defined its overarching goals for foreign assistance, the Secretary of State should work with all U.S. government entities involved in the delivery of foreign assistance to develop and use compatible goals and measures to inform their planning, budgeting, and reporting for their respective foreign assistance programs.

    Agency Affected: Department of State

  6. Status: Closed - Not Implemented

    Comments: According to information provided by the Department of State (State) in August 2013, the Quadrennial Diplomacy and Development Review (QDDR), released on December 15, 2010, identifies strengthening the role of the State Department in leading and coordinating U.S. foreign affairs. While other U.S. government entities that deliver foreign assistance were involved in the QDDR process, the review primarily assesses how State and the U.S. Agency for International Development (USAID) can become more efficient, accountable, and effective. The QDDR does not provide a comprehensive, governmentwide approach to foreign assistance delivery. According to State, a comprehensive approach is most relevant at the mission (country) level. While GAO noted in its report that a country-level approach has the potential to enhance interagency coordination and collaboration, without a comprehensive federal-level strategy, agencies continue to risk implementing a fragmented patchwork of programs that could limit the overall effectiveness of the federal effort.

    Recommendation: Once the incoming administration has defined its overarching goals for foreign assistance, the Secretary of State should work with all U.S. government entities involved in the delivery of foreign assistance to 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.

    Agency Affected: Department of State

  7. Status: Closed - Implemented

    Comments: Although the Department of State's Office of U.S. Foreign Assistance (State/F) has not developed a long-term workforce management plan, it has taken steps to address the underlying issue that led to GAO's recommendation: periodically reassessing its workforce capacity to carry out assigned responsibilities. According to information provided by State in August 2013, State/F was structurally realigned to group together like functions, and match resources with workloads and staff skills with organizational functions after GAO's 2009 review. State/F's senior leadership meets regularly to address workforce planning issues, and reviews the organizational structure and resource allocations and recommends adjustments to the Director. State/F provides its staff with a range of training opportunities--within State/F, in State or the U.S. Agency for International Development, or external to the agencies--and uses individual development plans to help manage staff professional growth.

    Recommendation: If the administration decides to continue foreign assistance reform efforts consistent with the State/F reforms announced in January 2006, the Secretary of State should direct the DFA to develop a long-term workforce management plan to periodically assess State/F's workforce capacity to manage foreign assistance.

    Agency Affected: Department of State

 

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