Foreign Aid Reform:
Comprehensive Strategy, Interagency Coordination, and Operational Improvements Would Bolster Current Efforts
GAO-09-192, Apr 17, 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.
Status Legend:
- Review Pending
- Open
- Closed - implemented
- Closed - not implemented
Recommendations for Executive Action
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
Status: Open
Comments: In response to the GAO report, the State Department said it believes it has met this recommendation because regional activities can be captured in the operational plans, and that regional units produce their own 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 are therefore keeping this recommendation open in the hopes that State will address these concerns. Further, we are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: In response to the GAO report, the State Department notes that when the F process was implemented it did not have in place an optimal communications apparatus. It said that it has strengthened its means for two-way communication over time, and that it has established a special assistant position which will act a a communications manager. In December 2009, the Department said that it believes that there is now an appropriate communications structure in place for foreign assistance issues -- one that the Director's Office constantly seeks to improve. We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: In response to the GAO report, the State Department said that it was completing its country assistance strategy (CAS) pilot and would brief the Administration on the results. Based on the new administration's guidance, it said it would consider the future of CAS or a recommended successor strategy, including realistic timeframes. In December 2009, the State Department said that the CAS was complete and that it would provide recommendations to the Deputy Secretary for Resources and Management "in the near future." We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: In response to the GAO report, the State Department noted that if it continues with the F Process reforms, it makes sense to consider having timeframes and benchmarks in place. In December 2009, the State Department said that timeframes and benchmark would be addressed in the context of its Quadrennial Diplomacy and Development Review (QDDR) which is intended to "provide a comprehensive assessment for organizational reform and improvements to policy, strategy and planning." We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: State Department officials said that the F Process reforms, including the standardized program structure and the refined FACTS database, provide a strong foundation for the development and use f governmentwide compatible goals and measures for foreign assistance programs. In December 2009, the State Department noted that the Secretary's FY 2011 budget guidance directs Department and USAID bureaus and offices to clearly articulate goals and objectives, in consultation with all relevant U.S. government stakeholders, and to articulate a strategy for achieving those goals, including a discussion of how such strategy aligns with other U.S. government efforts already underway. Bureaus and offices are likewise directed to identify metrics and performance measures that will be used to assess outcomes and achievements. We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: State Department officials said that given the new Administration and three years of learning associated with the NSC's governmentwide national security strategy and USAID's White Paper on development, it makes sense to revisit their initial decision not to pursue development of a governmentwide foreign assistance strategy. In December 2009, the State Department announced the launch of the Quadrennial Diplomacy and Development Review (QDDR) which is intended to "provide a comprehensive assessment for organizational reform and improvements to policy, strategy and planning." State said that based on lessons learned in the review it would make decisions about how best to coordinate foreign assistance resources. It further noted that these decisions are expected to reflect a broader, whole of government perspective and will emphasize goals and measures to inform budgeting. We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.
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
Status: Open
Comments: In response to the GAO report, the State Department said that it agreed with the idea of further improving employee skill sets and would work to encourage and implement further training and enhancement. In December 2009, the State Department said that the Director's Office intends to take a fresh look at its training program with an eye toward better supporting new and tenured staff. We are reviewing information recently provided by the State Department on the status of this recommendation and will update our information as soon as practical.