Detailed Information on the
US Agency for International Development Administration and Capital Investment Assessment

Continue to develop and operationalize meaningful performance measures and utilize them in the management of agency operations. This will include ensuring that operating units and their managers are held accountable for results through regular reviews and performance reporting, and that the use of performance data becomes a routine part of making resource allocation decisions.

Focus reform efforts on increasing the effectiveness and efficiency of agency operations, including continuing to develop the capability to take advantage of further regionalization, centralization, cross-servicing, or other alternative approaches to the bi-lateral model of program delivery.

Implement comprehensive analysis-based workforce planning process encompassing USDH and non-USDH positions funded by trust, program or OE. Use results from the performance management plan to make key human capital program decisions and to drive improvements.

Measure: Average margin of positive responses over negative responses ("Margin of Victory") on Customer Service Survey for Management Offices

Explanation:This indicator captures the degree to which USAID meets the goal of customer oriented management services. The "Margin of Victory" is the percentage of positive customer evaluations on how well management services meet their needs minus the percent of negative responses.

Measure: Percent of missions not collocated with State receiving targeted physical security enhancements within a given year.

Explanation:USAID is committed to protection of its workforce and will harden the defenses of the missions for which it is responsible for physical security. This measure will capture USAID's success in completing ongoing physical security enhancements. In particular, it will indicate success for two key phases -- perimeter security (2005-2006) and building exterior and interior equipment upgrades (2007-2009).

Measure: Percent of missions not collocated with State receiving emergency communication upgrades and lifecycle replacement of systems within a given year. (The first figure indicates the target for upgrades within that year and the second figure indicates the target for lifecycle replacement in that year.)

Explanation:USAID is measuring the degree to which its planned, regularly scheduled upgrade and replacement of emergency communication systems remains on track. These efforts are critical to maintain the quality of the emergency communications system the agency relies on to increase the safety of staff worldwide.

Measure: Number of information security vulnerabilities per information technology hardware item (e.g. printer, computer)

Explanation:This measure provide an indicator how well USAID information stored on and processed through its IT systems is protected. USAIDs goal is to continually reduce vulnerabilities through FY 2009.

Measure: Percentage of information technology systems certified and accredited

Explanation:This indicator reflects the degree to which USAID systems meets generally accepted standards for security in support of our goal of keeping information safe from compromise.

Measure: Percentage of Cognizant Technical Officers who are certified

Explanation:This measure is an indicator of success achieving a well-trained workforce. CTOs, the people that are responsible for technical oversight of grants and contracts, are critical in ensuring that USAID's development and humanitarian assistance dollars are well spent. Having certification means that CTOs are well-trained according to established standards. USAID aims to meet the long-term goal in FY 2009 and has set an interim goal for FY 2005.

Measure: Percentage of employees with performance appraisal plans that link to agency mission, goals and outcomes.

Explanation:This measure will provide an indicator of the degree to which the performance appraisal system can be used to ensure that staff are assigned to tasks that directly support the agency mission. This will enable managers to hold employee accountable for results appropriate to their responsibility level, with consequences based on performance.

Measure: Percentage of Agency-wide recruitment goals met

Explanation:Success in recruitment is critical for USAID as a significant proportion of the workforce will be eligible for retirement over the next few years. This measure will show how successful USAID is in filling positions that have been vacated through attrition or created to fully meet staffing requirements.

Measure: Total # of Federal Managers' Financial Integrity Act (FMFIA) and auditor-identified material weaknesses identified

Explanation:Given government-wide audit requirements, this measure reflects the degree to which USAID has effective financial management and demonstrated financial accountability for the program resources we manage.

Measure: Average number of calendar days between announcement close and offer

Explanation:This indicator measures the time it takes to complete the key segment of the recruitment process. Since recruitment is critical for USAID, reducing the time it takes will improve overall staffing by reducing the duration of gaps created by attrition.

Measure: Percentage of Contract Review Board Reviewed Contracts that Adhere to Guidance

Explanation:The use of strong procurement practices is critical for the success of USAID's development and humanitarian assistance programs. This measure will serve as a proxy for the quality of contracts by evaluating whether they meet established standards.

Measure: Procurement Cost-effectiveness Ratio (millions of contract and grant dollars awarded per procurement employee)

Explanation:This measure helps the agency track efficiency in procurement, an area of significant management concern for the provision of development/humanitarian assistance. Although the FY 2005 target reflects a decrease in the dollars managed by each employee, it reflects ambitious cost control given the improved contract quality targeted above.

Measure: Extent of critical staffing needs met

Explanation:This new measure, to be operationalized during FY 2005, will address the Agency's ability to identify critical staffing needs and meet them.

Is the program purpose clear?

Explanation: The Operating Expenses (OE) and Capital Investment Fund (CIF) pay most of the operating expenses of the United States Agency for International Development (USAID) so that it can administer the foreign assistance programs authorized by the Foreign Assistance Act of 1961. OE and CIF ensure a high quality workforce supported by modern and secure infrastructure and operational capabilities. Specifically, OE pays the salaries, benefits and training for U.S. Direct Hire (USDH) employees, maintenance of existing Information Technology (IT) and security systems, and rent and maintenance of facilities; CIF provides funding for investments in new IT and building construction. Based on fiscal year 2005 budget request data, OE pays for 63% of total operating expenses, with the remainder paid for from other sources, including program funds. CIF funds for IT are used exclusively for modernization and enhancement purposes. Maintenance of existing IT is paid for with OE funds and a small amount of program.

Evidence: The Foreign Assistance Act of 1961, as amended, establish the legislative authority for OE and CIF. Annual Foreign Operations Acts appropriate funding for OE and CIF, which include the costs of capital investments, and also underscore the purpose OE and CIF. Further, the State-USAID Joint Strategic Plan FY 2004-09 elaborates the specific priorities for which this funding is applied.

Does the program address a specific and existing problem, interest or need?

Explanation: OE/CIF directly addresses the need to provide management, administrative, and information technology support to the development and humanitarian assistance programs USAID must execute under its legislative authorities and appropriations acts. OE funds overhead activities that are core business functions, including inherently governmental activities. Funds for capital investments related to buildings and information technology (IT) were split into a separate account, CIF, in the fiscal year 2003 appropriations act to prevent general operating requirements from crowding out necessary long-term investments. Absent OE/CIF, USAID would require other means of funding its non-program-specific operations.

Evidence: The State-USAID Joint Strategic Plan (fiscal years 2004-09) and the Congressional Budget Justification (CBJ) elaborate the needs addressed by OE and CIF and identify the spending priorities. These needs are also mentioned in the Foreign Assistance Act of 1961, as amended, and the annual Foreign Operations appropriations acts.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: In addition to OE and CIF, the Agency also uses program funds to meet certain of its operating costs. To ensure that no expenditure is redundant, USAID has developed specific cost allocation policies to identify which expenses are to be covered by OE funds and which are to covered by program funds. In fiscal year 2004, OE appropriations funded approximately 65% of AID's operating expenses and non-OE appropriations funded approximately 35%. CIF funds only investments to modernize and enhance IT (e.g., a new enterprise architecture system). Approximately 14% of OE funds, combined with a small amount of program funds (<5% of total IT spend) go to maintaining existing IT. At some missions, funds for operating expenses are augmented by the local government, which may provide contributions to support USAID operations. These are not redundant, but rather used in coordination with OE and CIF and considered part of the overall administrative budget for the agency. No other entities provide support to USAID operations.

Evidence: The Administrative Directive System (ADS) (Chapter 601 - Funding Source Policy) outlines which operating activities may be covered by program funds and which must be funded by OE. The USAID OE Funding Sources and Uses table identifies which sources (e.g., including trust funds), in addition to the OE account, constitute OE's total funds.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There is no strong evidence that another approach or mechanism would be more efficient or effective in achieving the intended purpose. The "design" of OE/CIF relates to the separate appropriations accounts, as well as congressional provisions related to uses of the funds appropriated annually. The authority provided by Congress gives the agency significant leeway to manage the program. Agency policy and procedures concerning the appropriate use of the funds ensure that the program is run effectively and efficiently. Although the current structure allows the agency sufficient flexibility, the agency is exploring whether an alternate funding mechanism that ties more closely to the program funding of the agency would better serve this program.

Evidence: The Foreign Assistance Act of 1961, as amended, and annual appropriations acts outline the flexibility afforded the OE and CIF programs. The Administrative Directive System (ADS) clarifies which operating activities may be covered by program funds and which must be funded by OE.

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: OE and CIF benefit 100% of their targeted beneficiaries: the Agency employees in the field missions and Washington offices who are charged with program planning and implementation. Activities funded by OE and CIF are essential to AID's mission and would not occur without the program since no other entities provide resources for agency operations. Resources are allocated for fixed costs and variable costs for operating units according to Agency priorities, unit resource needs, and Congressional directives related to the use of funds. Further, resources that reach other beneficiaries, such as U.S. Government employees from other agencies who share office space with Agency employees, are accounted for by the International Cooperative Administrative Supprt System (ICASS). ICASS allocates these costs to the other beneficiaries, thereby compensating the OE and CIF programs.

Evidence: The Congressional Budget Justification identifies the specific uses of OE funds, such as for salaries, facilities, security, etc. The ADS (Chapter 601 - Funding Source Policy) clarifies which AID operating activities must be funded by OE and which must be funded by non-OE, program money.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: USAID has commited to a number of long-term performance goals linked to the management objective of the State/USAID joint strategic plan. These will be published in the agency's annual performance budget for FY 2006 and provide indicators of progress in such vital OE/CIF functions as security, human resource management, and financial management. Given the administrative nature of this program, output oriented measures are used as proxies for the desired outcomes. In addition, USAID's performance of significant agency management functions, the area most strongly supported by OE/CIF resources, is assessed using the Office of Management and Budget's (OMB) scorecard criteria developed under the President's Management Agenda (PMA). For overseas buildings, USAID funds investments through the State Department which maintains these metrics.

Evidence: Please see the Measures tab for core performance measures for this program. In addition, USAID has long-term goals to meet the criteria established for good management ("green" ratings) under the President's Management Agenda.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: USAID's long-term performance goals are geared toward significantly improving USAID management and can only be accomplished by ambitious reengineering of the agency over a short time horizon. For example, in order to eliminate all material weaknesses (financial management), USAID must roll out an integrated accounting system to all field missions, adopt the required process changes, and provide adequate oversight through a strengthened CPIC process. To reach the quality improvement goal for procurement, USAID needs to review its procedures and aggressively implement an improved training program for contract staff.

Evidence: Please see Measures tab for baseline and target data.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: AID and OMB have selected a limited number of performance measures, including annual targets that track AID's progress in the wide range of activities and investments supported by OE and CIF. All of these measures are discrete, quantifiable and measurable. Many of these measures have been tracked by AID for years and some originate from more recent management improvement efforts, such as the Human Capital Strategy. USAID publishes annual targets in the Annual Performance Budget (APB). In addition, for the information technology (IT) portion of OE/CIF, annual performance measures are developed for each IT investment as part of the capital planning process.

Evidence: The annual performance measures have been drawn from: PMA Scorecards; USAID FY2005 Annual Performance Budget, Measures to be included in FY 2006 Annual Performance Budget, OMB Circular A-11 Exhibit 300s, Department of State/USAID JMC Business Plan for Management Collaboration, Human Capital Strategy

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Baselines and targets have been established for most of the annual performance measures. Some measures have baselines and target goals that are under development. In the FY 2005 Annual Performance Budget, USAID committed to ambitious improvements in a number of management areas including financial management, procurement, and IT. Improved measures, including baselines and targets are proposed for the FY 2006 Annual Performance Budget. All management bureau offices have developed customer service standards and measure success in achieving those standards monthly. In addition, for IT investments, baselines and targets are established for each measures proposed in the business case.

Evidence: The baselines have been drawn from: PMA Scorecards; Management Bureau Office Quality Service Plans, Management Bureau Office Performance Review Reports, USAID FY2005 Annual Performance Budget; Measures to be included in FY 2006 Annual Performance Budget, OMB Circular A-11 Exhibit 300s

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: USAID program managers strive to ensure that partners support the overall goals of the program and measure and report on their performance as it relates to accomplishing those goals. USAID and its main U.S. government partner, the Department of State, now jointly develop their strategic and performance goals. With its large number of contractors, USAID requires reporting for contracts exceeding $100,000 and is beginnning to employ other performance-based award mechanisms more extensively. While its current use of performance-based contracting is in the early stages, USAID has engaged external assistance to support efforts to expand its use, beginning with three pilots to be executed within the next few months.

Evidence: The JMC Business Plan for Management Collaboration illustrates AID's and the Department of State's commitment to cooperating on setting common long-term and annual goals. The State-USAID Joint Strategic Plan (fiscal years 2004-09) identifies the performance goals that AID and State pursue. ADS Chapter 302.5.9 ("Evaluation of Contractor Performance") stipulates that all contracts exceeding $100,000 must be evaluated annually and at the completion of activities. The PRIME 2.2 Award Plan and Service Level Agreements (SLAs) provides an example of how one contractor's goals and objectives are aligned with those of AID, linking compensation directly with results such as overall customer satisfaction; however, this document also states that "SLAs and performance metrics are not heavily used by" the contracting department at AID.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: A number of independent, objective and high-quality evaluations are regularly conducted to examine how well OE and CIF are accomplishing their mission and meeting their long-term goals. These evaluations have covered the wide array of activities relevant for OE and CIF, including financial management (USAID's Office of the Inspector General (OIG), Presidential Management Agenda scorecards (PMA)), (OIG, General Accounting Office (GAO), PMA). These evaluation satisfy the requirements of independence (both IG and GAO are external parties), quality (they are in-depth and cover relevant areas) and scope (they assess the extent to which AID's operations achieve their goals and provide actionable recommendations). AID augments these independent, comprehensive evaluations with contractors that conduct independent evaluations in specific areas such as network security.

Evidence: Three GAO reports from 2001 to 2003 identify AID's areas requiring improvement and report on AID's attempts to improve its human resources, financial and other management practices. Similarly, the Independent Auditor's Report on USAID's Consolidated Financial Statements, Internal Controls, and Compliance for Fiscal Years 2003 and 2002; OIG Semi-Annual Reports; OIG Standards for Success Accomplishment Report; PMA Scorecards; "Independent Reviews of USAID Network"; Sample IV&V Web Privacy Reports; Report on Compliance with Federal Privacy Policy; Analysis of Alternatives with Regard to the USAID New Management System (NMS) all cover areas relevant to OE and CIF.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Although USAID is unable to meet the criteria for a 'yes' in this category, the agency has made significant progress and recently upgraded its rating in the PMA scorecard for Budgeting and Performance Integration to yellow (as of March 31, 2004). USAID already prepares an annual performance budget that ties resource requests to annual performance goals. Specifically, the FY 2006 management bureau budget request is tied to USAID's annual and long-term performance goals for agency support functions as defined in the State/USAID joint strategic plan. USAID also has developed tools to improve its approach to budgeting, including a staffing template to budget for and target direct hire personnel to field missions based on programmatic needs. Although further refinement in relating administrative requests to program requirements is required, USAID collects and analyzes information on all administrative funds from operating units, including program and trust funds, that are used to cover administrative costs as part of the internal budget process.

Evidence: Presidential Management Agenda scorecard for USAID (March 31, 2004); FY 2005 Annual Performance Budget; FY 2006 Management Bureau budget request; U.S. Direct Hire Staff Allocation Template

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The steps USAID has taken to correct strategic planning deficiencies include better coordination with State through development of a joint strategic plan, establishment of a Business Transformation Executive Committee (BTEC), data collection/reporting, adoption of a comprehensive human capital strategy, better IT planning through an updated enterprise architecture (EA) and Capital Planning and Investment Control (CPIC) process, and ongoing budget and performance integration efforts to help the agency directly tie OE/CIF resources to the accomplishment of agency goals. (For example, USAID completed a study of program support costs and developed an interim cost accounting database.) OMB has awarded USAID green progress ratings on budget/performance integration in the PMA scorecard for the past 6 quarters and improved its status to yellow. The OIG has reported on USAID's improvements in strategic planning against established standards for success, and the agency is exploring alternate methods for funding administrative costs that would tie more closely to the program accounts.

Evidence: The State/USAID Joint Strategic Plan, JMC Business Plan for Management Collaboration, JMC Charter, and Joint Policy Council (JPC) Charter list the improvement opportunities that AID has identified, e.g., its Development Readiness Initiative. The Human Capital Strategy, in particular, highlights a human resources challenge that AID has identified, evaluated and planned to overcome. Additional efforts at identifying improvement opportunities and solutions include: PMA Scorecards, BTEC charter; ADS Chapter 577, Capital Planning and Investment Control (CPIC); Enterprise Architecture, Interim Cost Accounting Database, Study of Operating Expenses: Cost Reporting and Utilization for Management, OIG Standards for Success Accomplishment Report.

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals and used the results to guide the resulting activity?

Explanation: In compliance with OMB Circular A-11, USAID conducts alternative analysis for all major IT investments. USAID's Capital Planning and Investment Control (CPIC) process requires project sponsors to justify and defend proposals and ensures that IT capital investments are prioritized according to agency-wide business requirements. Once investments are approved by the agency, OMB reviews and scores the business case before the investment can move forward. To date, alternative analyses have been prepared for the following: financial management system (field & headquarters), procurement system, e-recruitment, and the agency IT infrastructure

Evidence: AID provided seven OMB Circular A-11 Exhibit 300s, across different IT investments funded by both OE and CIF, which illustrate extensive analyses of alternative investments. ADS Chapter 577 (Capital Planning and Investment Control (CPIC)) outlines the policies and procedures for planning and budgeting for AID's IT assets.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: USAID reports annually on the agency's success in achieving annual management goals in the performance and accountability report. USAID implements much of the management program through private sector contractors. The agency ensures good performance through annual reports that are used to evaluate contractor performance and make decisions on future awards. USAID has also initiated three pilots for performance based contracting, building on the contract for IT infrastructure support and services. In addition, central management offices collect and evaluate performance data several times per year and target resources to improving operations where necessary. For example, poor results in recruitment led to reforms that achieved a 41% reduction in the average time from vacancy announcement closing to job offer. In procurement, processing time was reduced by reallocating staff based on an analysis of workload/complexity of actions. Customer feedback is used in managing the program against established customer service standards.

Evidence: The Evaluation of Contractor Performance (ADS Chapter 302.5.9) provides guidelines for assessing contractor service delivery. Management Bureau Office Performance Review Reports illustrate how AID tracks data relevant to OE and CIF. USAID's FY 2003 Annual Performance and Accountability Report documents how AID is increasing its use of performance-based sourcing. The Administrator's Survey of Employee Morale and sample statistics maintained by human resources (HR) illustrate how AID also collects data relevant for HR activities and how it informs management decisions.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: OE/CIF affect all AID managers, and each manager is rated against pre-determined work objectives/performance measures on an annual basis. The ratings are the basis for awards and, for foreign service managers, tenure and promotion decisions. Negative ratings adversely impact an employee's opportunity for award and career advancement. For foreign service employees, failure to earn promotion can mean removal from service. For the Senior Executive Service (SES), mandatory performance requirements include: performance management, cost control, and audit resolution (where applicable). Unsatisfactory performance by an SES member can result in ineligibility for awards, a reduction in pay, or other disciplinary action including removal from the SES. The Management ("M") Bureau holds primary responsibility for executing OE and CIF activities. Private sector partners are held accountable through required performance standards and reporting on all contracts. USAID specifically requires past contractor performance to be considered in awards of $100,000 or more.

Evidence: The following documents outline how individual performance evaluations are to link employee performance to certain work objectives and performance goals: SES Performance Appraisal Report Template and Instructions, ADS Chapter 423 - Personnel Operations: Senior Executive Service, ADS Chapter 462 - Employee Evaluation Program, ADS Chapter 463 - Foreign Service Boards, Senior Executive Performance Management System (SESPMS) approved by OPM., Meeting notes from the May 2002 session of the Business Transformation Enterprise Council (BTEC) illustrate AID's progress in holding itself accountable for improving its operations. The Evaluation of Contractor Performance (ADS Chapter 302.5.9) outlines how contractors are to be assessed and held accountable.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: OE is appropriated on a one-year basis, requiring timely obligation. The agency obligates over 99 percent of funds within the period of availability. CIF also obligates in a timely manner though unlike the OE account, funds larger infrastructure projects that require multi-year obligations. To this end, the CIF account was created with no-year availability. Internal controls, including ADS requirements, within the agency require OE/CIF to be spent only for authorized purposes and the OIG audit showed no findings related to OE/CIF spending. CIF funds are obligated according to detailed capital investment plans that include targets requiring adherence to deadlines for procurement actions.

Evidence: Funding Source Policy (ADS Chapter 601) details for which activities OE funds, versus program funds should be allocated. SF133s/FACTS II reporting from the fourth quarter of 2003 illustrates AID's obligations and outlays. ADS Chapter 634 (Administrative Control of Funds) outlines the procedures and penalties involved in controlling exenditures. Several OMB Circular A-11 Exhibit 300s provide rationale for various OE and CIF expenditures.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: USAID support functions have been extensively outsourced. The contracts for these functions are re-bid on a regular basis to take advantage of cost savings from private sector competition. In addition, USAID has a committee performing preliminary planning for competitive sourcing to expand the scope of private sector competition to select in-house functions. Extensive cost/benefit analysis is performed for all new IT investments to ensure that the selection of technology solutions results in an efficient use of limited resources. USAID's Program Management Office (PMO) and CPIC reviews provide quarterly evaluations of IT investment effectiveness against improvement goals, including efficiency and cost effectiveness goals. The management bureau has established performance standards for each office, including efficiency standards, that are reported against monthly. To better inform efforts to improve efficiency, the agency is establishing a new metrics function within the management bureau which will be operational in late FY 2004/early FY 2005.

Evidence: The Management Bureau Office Quality Service Plans provide benchmarks for the various Management Bureau divisions for performance and effectiveness. ADS Chapter 104.3.3.d (Performance of Commercial Activities within USAID: Cost Comparison) prescribes procedures for ensuring that the most cost-effective bid is selected. PMO Quality Control Plan identifies business processes to enhance quality.

Does the program collaborate and coordinate effectively with related programs?

Explanation: Within the agency, OE/CIF activities are coordinated with programs implemented through the regional bureaus, missions, and central programs. Individual program bureaus/missions execute much of the OE/CIF budget to ensure coordination with program objectives. OE/CIF requests are based on submissions from individual bureau/missions that evaluate their needs based on program requirements. The BTEC approves major resource reallocation withint the OE/CIF accounts and ensures that senior managers from the program bureaus provide input into major management decisions. USAID coordinates closely with the major federal partner, State, through joint management efforts. USAID and State are investigating opportunities for improved program outcomes through collaboration in management areas ranging from human resources to facilities management. As a result, the agencies are capitalizing on identified opportunities by preparing a joint enterprise architecture, investing in joint financial management and procurement systems, and synchronizing budget processes.

Evidence: JMC Business Plan for Management Collaboration lays-out the ways that AID and State will coordinate. The State/USAID Joint Strategic Plan is a manifestation of this plan. The Guidance for the Bureau Program and Budget Submissions provides guidance on how AID and State are to jointly allocate resources and the OMB Circular A-11 Exhibit 300s for joint investments provide concrete evidence of resource allocation for common purposes. Further evidence of joint planning includes: BTEC Charter, JMC Charter, JPC Charter.

Does the program use strong financial management practices?

Explanation: Agency material weaknesses prevent a "yes", but USAID is on track to resolve remaining issues by FY 2006. USAID has an aggressive program to review management controls, identify risks and deficiencies, and establish corrective action plans in accordance with the Federal Managers Financial Integrity Act (FMFIA). USAID's audit management program monitors and responds to audit recommendations. USAID received a clean audit opinion on its financial statements in FY 2003. Two of the three FMFIA material internal control weaknesses are targeted for resolution in FY 2004. Worldwide rollout of the core accounting system in FY 2005 will close the third and result in compliance with the Federal Financial Management Improvement Act (FFMIA). Key accomplishments in the area of financial management include: the first clean opinion on the Agency's financial statements, the elimination of four auditor-reported material internal control weaknesses, improved reporting, and acceleration of financial reporting one year ahead of legal requirements.

Evidence: AID financial management weaknesses were identified and acknowledged in: Independent Auditor's Report of USAID's Consolidated Financial Statements, Internal Controls, and Compliance for Fiscal Years 2003 and 2002; the fiscal year 2003 Performance and Accountability Report (PAR); and in the PMA Scorecards. Methods for identifying weaknesses are explained in the following documents: ADS Chapter 595 - Audit Management Plan, ADS Chapter 596 - Management Accountability and Control, MCRC Charter, ADS Chapter 620 - Financial Management Principles and Standards.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: USAID set up the BTEC to bring all senior managers together to identify and address management deficiencies. A strengthened CPIC process linked to the BTEC has resulted in better IT planning that is geared toward addressing specific management deficiencies such as in procurement and financial management. Through financial management improvement efforts, USAID received a clean audit for the first time. The new Human Capital Strategic plan addresses deficiencies related to workforce planning. Beginning with FY 2005 budget, USAID used a strategic budgeting approach to develop the budget submission and has completed a study of program support costs. USAID continues to refine the strategic budgeting model to ensure consistency across bureaus and to account for sector specific performance factors. For the future, USAID is exploring the possibility of proposing an alternate method for funding administrative costs that would tie more closely to the program accounts.

Evidence: AID acknowledges that its financial weaknesses present improvement opportunities in the fiscal year 2003 Performance and Accountability Report (PAR). These findings were also presented in the Independent Auditor's Report on USAID's Consolidated Financial Statements, Internal Controls, and Compliance for Fiscal Years 2003 and 2002. The OIG Report "Standards for Success Accomplishment Report Fiscal Year 2003" illustrates AID's progress. Further AID procedures for improvement are presented in the following documents: ADS Chapter 577 - Capital Planning and Investment Control (CPIC), BTEC Charter, Human Capital Strategic Plan, Study of Operating Expenses: Cost Reporting and Utilization for Management, Guidance for the Bureau Program and Budget Submissions (2005 and 2006)

Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?

Explanation: In compliance with OMB Circular A-11, USAID has clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals for IT capital investments. Performance is tracked through monthly Earned Value Management Reports and status reports for each project. The results will be used in the CPIC process to make management decisions through quarterly reviews of major IT investments begun in May 2004. The details of the investments are documented and presented to OMB annually for review in the OMB Circular A-11 300 exhibits. For our overseas building investments, these metrics are maintained by the State Department.

Evidence: The OMB Circular A-11 300 exhibits and Long-Range Overseas Building Plan/Performance Measures for Capital Security Construction Program establish expectations for major investments. Progress is tracked through Monthly Earned Value Management Reports and Monthly Project Status Reporting. Accounting guidelines are listed in ADS Chapter 577 - Capital Planning and Investment Control (CPIC).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: USAID made progress in achieving its long-term OE/CIF performance goals as stated in the management objective of the joint strategic plan. In financial management, the agency received its first unqualified audit opinion and closed four auditor identified material weaknesses. The Information Resource Management Office (IRM) has achieved high customer service marks from employee surveys and overhauled the CPIC process, including strengthening the business cases for IT investments. The USAID Employee Survey shows consistent improvement in employee morale. Progress ratings on the PMA scorecard have steadily improved over time with green ratings in all but competitive sourcing for the last two quarters and the OIG has evaluated the agency as making progress against standards for success.

Evidence: Evidence includes IRM Employee Survey Results and the Administrator's Annual Survey of Employee Morale. PMA Scorecards, Independent Auditor's Report on USAID's Financial Statements, Internal Controls, and Compliance, Fiscal Years 2002 and 2003, OIG Standards for Success Accomplishment Report, FY 2003 Performance and Accountability Report

Does the program (including program partners) achieve its annual performance goals?

Explanation: USAID met or exceeded just over half (56%) of the ambitious annual management goals for FY 2003 as reported in the performance report. The agency improved compliance with procurement policies, upgraded telecommunications equipment at 21 missions, and finalized plans for deployment of a world-wide accounting system. Although USAID failed to meet a number of targets, significant steps have been taken to improve performance and the agency stands poised to improve in this area in the future. Although USAID failed to meet its goals related to the certification of contract staff, the agency stepped up recruiting at the entry level and developed a comprehensive training program to ensure that as senior contracting officers leave, junior officers will be certified to assume higher level authorities. Several goals were missed in the IT area as the agency focused on strengthening the CPIC process to ensure better performance in the future. For example, the agency delayed mission deployment of agency-wide systems to improve planning, thereby better assuring success of the project.

Evidence: FY 2003 Performance and Accountability Report, PMA Scorecards

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The efficiency measure to which AID and OMB agreed has baseline data beginning only in 2004 and, therefore, efficiency can not be demonstrated. Although USAID has improved agency management, the performance measurement framework has only recently come to incorporate efficiency measures. With efficiency measures other than the one included in this PART, the agency can validate improved effectiveness and efficiency to a small extent. For example, the Office of Human Resources (HR) reduced the average time from vacancy announcement closing to job offer by 41% from 60 to 35 workdays between May 2003 - May 2004, beating the OPM standard of 45 workdays. In addition, HR reduced the average time to post a vacancy announcement after receipt of recruitment request by 45%, from 26 to 14 work days since November 2003. Through reform in procurement methods and by necessity, USAID has increased the amount of grant and contract dollars managed per procurement employee from $23.5 million in 1992 to $115.7million in 2004, a 491% increase.

Evidence: Statistics Maintained by HR and the office of procurement illustrate efficiency gains in areas other than the one tracked solely by the efficiency measure in this PART.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Although programs with similar goals and purposes do exist in other areas of foreign development and assistance, there is currently no reliable basis for comparing the effectiveness of USAID OE/CIF to such programs. No current studies, analyses, or evaluations have attempted to make such comparisons, and in the absence of reliable comparisons between these programs further analysis would be arbitrary, as well as inherently difficult. Despite this, AID should seek opportunities to evaluate its overall level of OE and CIF spending (considering also funds from other AID sources, such as program funds) and, for example, benchmark it to other organizations with similar structures and missions.

Evidence:  

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Independent evaluations do not capture USAIDs major management reforms, underway since 2001, because they are so recent. GAO reported that USAID has an IT investment process that aligns proposed IT investments with the Agency's mission, meets users' needs, and demonstrates economic benefit. The OIG has found: significant improvements in human capital management; substantial progress against nine standards for success in financial management; a clean audit opinion on USAID's FY 2003 financial statements; improved computer security; and progress in IT investment planning and e-government efforts. As further evidence that OE/CIF program improvements are effective, OMB scores of USAID's Exhibit 300 business cases submitted for FY 2005 were consistently higher than those submitted for FY 2004 as a result of implementation of policies and procedures by the Capital Planning and Investment Control (CPIC) Subcommittee for the selection of IT investments.

Evidence: Independent evaluations of OE- and CIF-relevant activity areas include: GAO Report - Information Technology Management: Government-wide Strategic Planning, Performance Measurement, and Investment Management Can Be Further Improved (2004); OIG Standards for Success Accomplishment Report, OMB Scores of USAID's Circular A-11 300 Exhibits

Were program goals achieved within budgeted costs and established schedules?

Explanation: Program goals were achieved within established cost and schedule parameters. The performance variances, costs and schedules for the program goals set for the Phoenix Overseas Deployment, Enterprise Architectures, and Procurement System Improvement Projects through April 2004 can be considered within the cost performance index and the schedule performance index for each of the project's current phase in this reporting period.

Evidence: Examples of achieving program goals within cost and on-schedule are illustrated in: Monthly Earned Value Management Reports, Microsoft Project Plan, Monthly Project Status Reporting.