“What matters most is performance and results. · “What matters most is performance and...

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“What matters most is performance and results.In the long term, there are few items more urgentthan ensuring that the federal government is wellrun and results-oriented.This Administration isdedicated to ensuring that the resources entrust-ed to the federal government are well managedand wisely used.We owe that to the Americanpeople.”

President George W. Bush

“I’m a great believer in team efforts.That’s why wehave a State/USAID Joint Strategic Plan.That’s whywe have a Joint Management Council.The JointStrategic Plan lays out our foreign policy and devel-opment assistance priorities in the coming yearsand by doing so, it promotes an organizationalculture in both agencies that values effectivenessand accountability”

Colin PowellSecretary of State

Since the Marshall Plan, we've helped to transform economies and societies all over the world.

Now, we are transforming our Agency.

Revitalizing our workforce by attracting new talent, increasing training and providing performance incentives

People

Modernizing business systems to accelerate program delivery and results

Technology

Investing in successful programs Results

Capturing and generatingUSAID development knowledge

Ideas

USAID accelerates the development of countries and their people.

USAID at a Glance

• Authorities: Foreign Assistance Act of 1961. Statutory Agency

• Budget $14.2 Billion in FY 2004 appropriations

• Workforce: 1,970 U.S. Direct Hire; Total 7,600 (Including Foreign Service Nationals and Personal Services Contractor)*

• Location: HQ-Washington, D.C.; Overseas Missions in over seventy-five countries within four regions - Sub-Saharan Africa; Asia and Near East; Latin America & Caribbean; and Europe & Eurasia

• Major Strategic Goal Areas: Democracy and Human Rights; Economic Prosperity and Security; Social and Environmental Issues; Humanitarian Response; and Management and Organizational Excellence.

* As of March 31, 2004

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When I assumed leadership of USAID in May 2001, I pledged to make the Agency’s modernization one of my highest priorities. Today’s challenges demand a faster, more agile USAID with a sharper focus on the results of our investments of American taxpayer dollars overseas.

The context of foreign assistance has changed dramatically since USAID’s origin in the Marshall Plan and establishment as an independent agency in 1961. Rapid technological change, the end of the Cold War, the growing menace of global terrorism, and the surge of HIV/AIDS and other life-threatening diseases have combined to alter radically the 21st century landscape. The security of the United States now depends on freedom and opportunity beyond the nation’s borders. President Bush has recognized foreign assistance as a vital cornerstone of national security. The President’s September 2002 National Security Strategy—issued shortly after the 9/11 attacks on the United States—emphasizes development as one of the three essential components of American foreign policy alongside defense and diplomacy.

Building on the National Security Strategy, USAID and the State Department have created a Joint Strategic Plan, a Joint Policy Council and a Joint Management Council to strengthen our collaboration when and where it makes sense. We are working together to review our policies, programs and administrative services and continuously improve coordination, eliminate redundancies and ensure intended results.

This year we published a White Paper listing five major foreign assistance goals: promoting transformation or sustainable development; strengthening fragile states; providing humanitarian relief; promoting U.S. geostrategic interests; and mitigating global and transnational ills. Our Business Transformation plan is helping USAID achieve these core missions.

We are proud of the early successes described in this report. We are beginning to see tangible benefits to Agency employees and American citizens alike.

We’ve shown consistently improving scores on my annual Agency-wide survey of employee satisfaction with management services.

We’ve demonstrated financial accountability. USAIDreceived its first unqualified (“clean”) audit opinion from the Office of the Inspector General for our FY 2003 annual financial statements.

We’ve launched the Development Readiness Initiative to recruit and train the Agency’s 21st century workforce in the skillsneeded to meet future challenges. Our streamlined employee performance evaluation process promises to boost employee morale and motivation, and we have launched an automated HRtool to simplify and quicken USAID’s job recruitment procedures.

A Message from the Administrator

2001

2002

2003

USAID Customer Service Satisfaction

-0.1

0

10

20

30

40

50

60

70

80

Increaseof 3.4

Increaseof 25.2

Increaseof 40.3

Increaseof 22.7

Increaseof 37.9

AdministrativeServices *

HumanResources

InformationServices

FinancialManagement

ProcurementServices

* Administrative Services not surveyed in 2001

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We’ve laid the groundwork for an Enterprise Architecture (an information technology blueprint) and developed a new Capital Planning and Investment Control (CPIC) process that arehelping us get the most value out of our IT investments, and have been recognized as among the best in the federal government.

We have established a Program Management Office (PMO) to apply best practices in IT project management and risk mitigation to our IT and e-Government initiatives, and to make sure new systemswork and are delivered on time and within budget.

We have implemented knowledge management tools to bring development professionals together “virtually” to share experiencesand best practices for improved program performance.

We have developed a strategic budgeting model to enable us to link performance and resource allocation more efficiently.

We are additionally making good progress in modernizing our financial and procurement systems to enable greater speed,transparency, and accountability in our business transactions.

We are also showing steadily improving scores in all five initiatives of the President’s Management Agenda: StrategicManagement of Human Capital; Improved Financial Management;Expanded e-Government; Competitive Sourcing; and Budget and Performance Integration.

Our next steps will include overseas implementation of our newfinancial system, Phoenix, along with new procurement software that will integrate with State’s financial platform. These systems will standardize and web-enable our core business processes to reducecosts, make systems easier to use and enhance our ability to respond to emerging program needs. We will also begin to implement reformsof USAID’s new overseas business model, and we will continue to expand and “mainstream” the highly successful Global Development Alliance into the Agency’s day-to-day business activities.

Enormous challenges remain as we move towards our vision. This plan is helping us get there. Your support of our efforts is sincerelyappreciated.

Administrator Natsios’ Management Reform Principles

1. Simplify and standardize business systems and processes to reduce costs, simplify use, and enable the Agency to respond with speed and agility to changing program needs.

2. Establish a customer service culture making the Agency’s own business systems as cost effective and user friendly as possible.

3. Increase efficiency by reducing overhead expenses so that costs of doing business are transparent, aggressively managed,and compare favorably with peer organizations.

4. Promote partner inclusiveness in all business relationships to better meet the needs of internal and external customers and to ensure that small businesses are well-represented.

5. Increase transparency in program and businessdecision-making, assuring that decisions are fast,results-driven, and clearly understandable to large and small partners.

6. Ensure accountability and compliance with the letter and spirit of all applicable laws and regulations to achieve a clean audit opinion, deter legal disputes and acquire a sterling reputation for sound management.

7. Deliver programs smarter, faster, better, and cheaper,continuously improving USAID's performance as a global “thought leader” and as the world's most effective delivery organization of economic and humanitarian assistance.

"The most fundamental changes in national security policy since the beginning of the Cold War are occuring. And President Bush has been emphatic that development will play a central role. This is,then, a turning point for USAID as it is for the country as a whole. To remain effective, the Agency must enhance its business systems and processes. I have made management reform one of my highest priorities so that this Agency can meet the challenges of the new era."

Administrator Andrew S. Natsios

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A Message from Administrator Andrew S. Natsios ............................................................................................................................................................................4Forward by Deputy Administrator Frederick W. Schieck..................................................................................................................................................................9 Introduction by John Marshall, Assistant Administrator for Management & Chief Information Officer ............................................................................11

People: Strategic Management of Human Capital ...........................................................................................................................................................................13The Challenge ........................................................................................................................................................................................................................................14 The Response ........................................................................................................................................................................................................................................15 Achievements.........................................................................................................................................................................................................................................15

1.A High Performing Workforce Achieved ................................................................................................................................................................................15- Development Readiness - Filling Critical Talent Gaps.................................................................................................................................................15- Performance Management Reforms................................................................................................................................................................................15- Training - Sharpening Skills & Developing New Leaders ............................................................................................................................................15

2. Staff Strategically Aligned with Agency Priorities ................................................................................................................................................................17- Workforce Analysis and Planning .....................................................................................................................................................................................17- Right-Sizing the Overseas Presence ................................................................................................................................................................................17

3.A More Flexible Workforce Established ................................................................................................................................................................................17- Non-Career Limited Term Foreign Service Appointments........................................................................................................................................17

4. Creating a Diverse Workforce ................................................................................................................................................................................................175. Increasing HR Capacity to Support USAID's Mission .......................................................................................................................................................18

Human Capital Project Milestones Chart ......................................................................................................................................................................................18Human Capital Summary Chart w/Employee and Taxpayer Benefits.......................................................................................................................................19Next Steps .............................................................................................................................................................................................................................................18

Technology: Business Systems Modernization................................................................................................................................................................................21The Challenge & The Response.........................................................................................................................................................................................................22

Phoenix Accounting System - Enabling Fast,Transparent and Accountable Transactions ...............................................................................................23Joint Acquisition and Assistance Management System - Enabling Accurate Procurement Data, Anytime,Anywhere.............................................24Program Management Office - Providing Project Management Support ...........................................................................................................................25e-Government Initiatives - Enabling Citizen-Centered Services ..........................................................................................................................................25

Achievements .......................................................................................................................................................................................................................................27 New Core Accounting System Successfully Implemented at Headquarters .....................................................................................................................27First Ever Clean Audit Opinion....................................................................................................................................................................................................27Enterprise Architecture - A Blueprint for Modernizing Business Processes and IT Systems .......................................................................................27Capital Planning and Investment Control - Accountability for IT Investments ................................................................................................................27

BSM Project Milestones Chart..........................................................................................................................................................................................................28BSM Summary Chart w/ Employee and Taxpayer Benefits.........................................................................................................................................................28Next Steps .............................................................................................................................................................................................................................................28

Ideas: Knowledge for Development (KfD) .......................................................................................................................................................................................31The Challenge ........................................................................................................................................................................................................................................32The Response ........................................................................................................................................................................................................................................32Achievements .......................................................................................................................................................................................................................................33

KfD Strategy - A Roadmap to Preserving Knowledge & Tapping Innovation....................................................................................................................33 Communities of Practice: Sharing Ideas, Methods & Best Practices ..................................................................................................................................33Knowledge Management Inventory - An Internet Accessible Reference Tool ..................................................................................................................33

KfD Summary Chart w/ Employee and Taxpayer Benefits .........................................................................................................................................................34Next Steps .............................................................................................................................................................................................................................................34Innovative Ideas: Global Development Alliance: Promoting Public Private Partnerships.....................................................................................................35

Results: Strategic Budgeting .................................................................................................................................................................................................................37The Challenge ........................................................................................................................................................................................................................................38The Response ........................................................................................................................................................................................................................................38Achievements.........................................................................................................................................................................................................................................38

Joint State/USAID Strategic Plan - The First of Its Kind........................................................................................................................................................38Performance and Budget Integration - Results Driven by Better Performance...............................................................................................................38

Strategic Budgeting Model....................................................................................................................................................................................................38Program Assessment Rating Tool - Strategically Assessing Program Performance................................................................................................39 Overseas Staffing Template - Strategically Placing USAID's Foreign Service Officers............................................................................................39

Strategic Budgeting Summary Chart w/Employee and Taxpayer Benefits...............................................................................................................................40Strategic Budgeting Project Milestones Chart...............................................................................................................................................................................40Next Steps .............................................................................................................................................................................................................................................40

Appendices..............................................................................................................................................................................................................................................45Appendix 1: USAID PMA Scorecard Summary as of June 30, 2004 ........................................................................................................................................41Appendix 2: Summary of State/USAID Joint Management Council Activities .....................................................................................................................42Appendix 3: BTEC Actions FY 2002 - FY 2004............................................................................................................................................................................43Appendix 4: Summary Tables of USAID Business Transformation Initiatives ........................................................................................................................45

Human Capital ........................................................................................................................................................................................................................45Business Systems Modernization ........................................................................................................................................................................................46Knowledge for Development ..............................................................................................................................................................................................47Strategic Budgeting.................................................................................................................................................................................................................48

Table of Contents

Forward

In December 2003 USAID completed Phase One of the construction of the road from Kabul to Kandahar in Afghanistan.

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Managing a comprehensive business transformation across an agency as large and decentralized as USAID is an enormous challenge. From the start, the Administrator recognized that establishing an effective governance structure would be one of the most important keys to our success. And certainly another such key is enlisting the support of our employees, in Washington and the field, in the success of our reform initiaitves. In my role as Chairman of USAID’s Business Transformation Executive Committee(BTEC), I have guided the process for achieving these objectives.

The Administrator created the BTEC to unite the most senior career executives across the Agency in a partnership to reform the Agency's management systems and improveorganizational performance. The BTEC is based on the recognized "best practice" that successful, large-scaletransformation requires active collaboration, shared ownership and accountability across an organization's entire top leadership team.

The BTEC meets monthly to review progress, set priorities and make decisions. It serves as the Agency's capital investment review board to ensure that investments address USAID’s highest priorities and meet employees' needs. The BTEC puts the business needs of the Agency in the driver’s seat, with individual employees, managers and USAID technicians headed toward the same destination. This is a vehicle for USAID executive leadership which blends needed results, resource decisions and supporting technology. Over

the past two years, the BTEC has developed the major components of our business transformation plan. The plan has been designed to address the President's Management Agenda (PMA), the Administrator's Management Reform Principles, and the management strategic objectives of the Joint State-USAID Strategic Plan.

Our results-oriented reforms are already benefiting our employees and U.S. taxpayers. Our plans and early successes are a tribute to the leadership of the President and our Administrator, and the responsive efforts by USAID’s dedicated workforce. But our first steps are only a start in a multi-step, multi-year plan.

We are confident that our business transformation plan and the BTEC are making a difference in improving our capabilities to meet the challenges of the 21st century.

See appendix 3 for a listing of BTEC actions

USAID Business Transformation

BTEC

ManagementReformDrivers

Business Transformation

Initiatives

Management Reform Drivers Business Transformation Initiatives

■ Administrator's Management Principles

■ State-USAID Joint Strategic Plan

■ President's Management Agenda

■ Strategic Management of Human Capital■ Knowledge for Development■ Business Systems Modernization■ Strategic Budgeting

Deputy Administrator Frederick W. Schieck Chairman, USAID's Business Transformation

Executive Committee

"Effective governance is the single most important predictor of [success in] gettingbusiness value from information and technology."

Center for Information Systems Research,Massachusetts Institute of Technology

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Introduction

2004 marks the 50th anniversary of the Food for Peace program.

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I am pleased to introduce USAID's Business Transformation Plan.This report has been prepared to inform USAID employees, members of Congress, our business partners, and other American citizens about our ambitious plans that will help maintain the status of this Agency as one of the world’s premier foreign assistance organizations.

The past three years have been momentous ones for USAID due to our business transformation activities. Never in the Agency’s history have management issues received so much attention.

A new Administrator arrived in 2001, found the Agency's management systems broken, and launched a comprehensive reform effort. A few months later, the President's Management Agenda was announced and expectations rose even higher.

USAID has faced many formidable challenges in its 43 year history. It has launched some of the boldest development initiatives around the world such as the Marshall Plan in post-war Europe. It has celebrated major successes, including the Green Revolution in south Asia and the recent 50th Anniversary of the Food for Peace Program. It has weathered criticism and survived major cutbacks.

Today's global challenges are different. Numerous public, private and non-profit organizations are actively participating in this dynamic environment. To maintain USAID's position of leadership, we need to focus more sharply on our results in the field and demonstrate our value.

USAID's business transformation plan is an integrated and coordinated plan with mutually reinforcing performance goals organized around four focus areas that describe how we are applying the Agency's most important assets - our People, our Ideas and our Technology - to improve our Results in development and humanitarian initiatives around the world.

Keeping our focus on these important resources and the vital roles they play in achieving our results-oriented objective will ensure that we achieve the Administrator's vision for USAID and meet the complex challenges of today's world.

Our Strategic Management of Human Capital reforms address the People dimension and are presented in our comprehensive Human Capital Strategic Plan.

Our Business Systems Modernization (BSM) initiatives addresse the Technology dimension and includes modernizing the way we select and manage information technology (IT) investments.

Our Knowledge for Development (KfD) initiative addresses the Ideas dimension and includes a strategy to capture USAID's vast reservoir of development knowledge and generate new ideas.

Our overarching Strategic Budgeting initiative addresses the Results dimension and includes reforms to improve the Agency's strategic planning and resource allocation.

The sections that follow summarize our reform efforts in each of these focus areas and include:

• A description of the challenge• Our response to the challenge• The results that have occurred• The "next steps" in this forward movement

Please read ahead and see for yourself the achievements of our business transformation activities. Thanks for your interest and support as we proceed with these critical efforts.

John Marshall Assistant Administrator for Management

and Chief Information Officer

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Revitalizing our workforce by attracting new talent,increasing training and providing performance incentives

People

Hired new employees with mission critical skills through theDevelopment Readiness Initiative to align workforce skillsto business requirements

Saved $836,000 in taxpayer funds through on-line trainingenabling employees to complete nearly 2000 web-based coursesto enhance job performance

Trained nearly 1000 employees on Executive and Senior Leadershipto enhance career development opportunities

Streamlining employee performance evaluations and linking rewards to results to boost staff morale, motivation, andperformance

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People: Strategic Management of Human Capital

The Challenge

The decade of the 1990's was marked by aggressivedownsizing and cost-cutting in administrative functionsacross the federal government. From 1992 to 2000,USAID's direct hire workforce was cut by nearly 40 per-cent.The administrative support functions of procurementand human resources management were particularly hardhit.At the same time, world events produced newdemands for foreign assistance in the former SovietUnion, Eastern Europe, and other areas. USAID's programbudgets grew to respond to new challenges, but theAgency did not receive additional operating expense (OE)funds to pay for the extra administrative costs associatedwith these emerging priorities. To meet new demands, theAgency rationed its OE shortages by reassigning employ-ees and shifting OE funds from less critical activities tomore urgent ones. Human resources functions like staffingand training were eliminated or significantly cut back.

The USAID inherited by Administrator Natsios in early2001 was faced with serious resource shortages. Since 9/11,new demands of rebuilding Afghanistan and Iraq and fightingthe global war on HIV/AIDS have compounded USAID'schallenges. From fiscal year 2001 to 2003, the Agency's pro-

grammatic responsibilities and spending nearly doubled,while its direct hire workforce and OE budget haveremained essentially flat.As a consequence, USAID todayfaces growing human capital gaps, as identified by the BTECand the Administrator's annual all-employee survey, including:

• A lack of surge capacity to meet emerging needs• A workforce that is rapidly aging, has a void in the mid-management ranks, and is losing skills and "institutionalmemory"

The number of USAID Direct Hires fellthrough the 1990s through high attrition

and low recruitment

1990 1992 1994 1996 19980

500

1000

1500

2000

2500

3000

3500

2000

Civil Service Foreign Service

USAID Direct-Hire Workforce

Strategic Goal:Getting the Right People in the Right Place, Doing the Right Work, at the Right Time

to Pursue U.S. National Interests

USAID Human Capital Strategic Action Plan

• Surge Capacity Established

• Workforce Flexibility Enabled by Agency Policies

• Use of Statutory and Regulatory Authorities Maximized

• Leadership Commitment to Diversity Demonstrated

• Personnel Policies and Systems that Promote Inclusiveness and Equity Established

• Diverse Workforce Recruited

• Diverse Workforce Retained

• Leadership Developed

• Employee Training and Certification Programs Established

• Systems that Support and Reward Performance Established

• High Quality Work Force Recruited

• Integrated Workforce Planning

Capability Established

• Agency Recruitment and Deployment Targets

Achieved

• Agency "Right-Size" Attained

• HR Staff Competencies Demonstrated

• HR Processes Improved

• HR Resources Effectively Utilized

SO1A High Performing

Workforce Achieved

SO2Staff Strategically Aligned

w/ Agency Priorities

SO3A More Flexible

Workforce Established

SO4A Diverse Workforce

Created

SO5Increased HR Capacity to Support USAID's

Mission

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• Chronically vacant or under-staffed positions and accu-mulating backlogs of work

• A bureaucratic and cumbersome performance appraisalprocess that is perceived to lack fairness, honesty, trans-parency, and linkages between results and rewards

• Morale and "burn out" problems and perceptions thatUSAID is not an employee-friendly work environment

• Perceived barriers to equal employment opportunity• Insufficient capacity in human resources (HR) functions torecruit and develop an effective 21st century workforce

The Response

To address the Agency's most critical workforce and com-petency gaps, the BTEC led the development of a five yearUSAID Human Capital (HC) Strategic Plan.The plandescribes the human resources capabilities necessary toimplement the overall Joint State Department-USAIDStrategic Plan, while directly addressing the human capitalgoals of the President's Management Agenda (PMA). Theplan addresses five strategic objectives:

• A high-performing workforce achieved;• Staff strategically aligned with Agency priorities;• A more flexible workforce established;• A diverse workforce created; and• Increased human resources capacity to supportUSAID's mission

Achievements

Activities for each of the Agency's human capital strategicobjectives are highlighted below.

1.A High Performing Workforce Achieved

Development Readiness - Filling Critical Talent Gaps

The Development Readiness Initiative (DRI), modeled afterthe Department of State's successful Diplomatic ReadinessInitiative, was launched by Administrator Natsios in fiscalyear 2004.The DRI is the most aggressive recruitmenteffort to rebuild and revitalize the Agency's workforce inmore than a decade. This initiative, the cornerstone of theAgency’s succession planning efforts, provides surge capaci-ty to respond quickly to emerging program priorities. Overthe next three years, the Agency plans to hire a total of250 additional employees through DRI budget authorities,thereby increasing the direct hire workforce from 2,000 infiscal year 2004 to 2,250 by fiscal year 2006 (assuming fullfunding). These new employees are being recruitedthrough several hiring mechanisms. Entry-level Foreign

Service officers are being recruited and trained throughthe International Development Intern (IDI) program.TheAgency is reinstating a Contract Specialist intern program(CSIP) and expanding the use of Presidential ManagementFellows (PMFs) to fill critical skill gaps in its procurementstaff and other Washington-based Civil Service positions.The additional human resources provided by DRI enableUSAID to:

• Immediately fill important, longstanding vacant positions • Increase the levels of oversight and accountability of

organizations receiving taxpayer funds by US direct hireemployees

• Allow more employees to attend training without creat-ing coverage gaps

• Respond to new and emerging program requirements with-out reassigning employees from other Agency programs

The Agency is hiring approximately 50 new employeesthrough the DRI in FY ‘04. 20 Foreign Service Officershave already been hired and the remaining balance is beingmet by hiring 10 PMFs, 2 HR interns, and 20 CSIP internsin the Civil Service.

Performance Management Reforms - Creating a HighPerformance Workforce

New performance management policies approved by theBTEC will streamline the cumbersome annual employeeevaluation process. The new procedures will reduce theamount of paperwork previously required. Greateremphasis will be placed on meaningful inter-personal com-munications about organizational goals, expectations, per-formance, results, and career development needs. Therevised process will provide clearer connections betweenperformance ratings, results and rewards, and therebyprovide a stronger incentive for employees to improvejob performance and achieve expected results.

Training-Sharpening Skills and Developing New Leaders

Administrator Natsios has made a strong commitment torebuilding the Agency's depleted training capacity to makesure that employees' skills match the challenges of theirjobs. The training curriculum has been overhauled to cre-

57 new Foreign Service Officers have entered theagency in 2004 as of June 30th including 15 International Development Interns and 39 New Entry Professionals. 20 of these FSOs were hired under the DRI authority. One additional 2004 FSO class will join the Agency by October.

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ate a career progression of courses for employees atentry, mid-level and senior levels, and significant fundinglevels have been requested. This approach envisions atraining pyramid for Agency employees that includes lead-ership, management, technical and job skills training avail-able to employees during the course of their careers.

Entry and mid-career training will focus on improving tech-nical and job skills. Project andcontract management traininghave been identified as skillsrequiring particular emphasis.The Agency's CognizantTechnical Officer (CTO)Certification Program isexpanding to meet the needfor highly trained project man-agers of large, complex projects.This program teachesemployees how to select the appropriate assistance oracquisition instrument (i.e., contract, grant or cooperativeagreement) and manage the project from award throughadministration, monitoring, evaluation and close-out.

An aggressive leadership development program has been

developed. The Agency reviewed leadership skills at theSenior Foreign Service and Senior Executive Service levelsto determine appropriate curricula. As part of this pro-gram USAID has expanded the training partnership withthe Federal Executive Institute to include mentoring andcoaching courses.

A large number of courses are now available to employeesthrough the Agency's "e-Learning

Institute," launched in 2002.Accounting, marketing, manage-ment, communications, and othersubjects are taught through textpresentations, simulations, andchat rooms.The self-paced, self-taught courses are a cost effi-cient alternative to more

expensive instructor-led courses and have resulted in a sig-nificant cost-savings for USAID. These savings will continueto grow rapidly as more advanced level Agency coursesrequire distance learning courses as prerequisites, and asmore and more employees learn to access this relativelynew training medium.

An Emerging Leadership course for mid-career employees uses a "blended" training approach that includes traditional instructor-led classroom training and self-taught training through access to online courses on the Internet.Courses are tailored to topics of leadership and management identified by the student and his or her mentor, a senior manager who has been assigned as a coach.

The pyramid shows the types of training an employee will take over the courseof a career at USAID

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2. Staff Strategically Aligned with Agency Priorities

Workforce Analysis and Planning

A key part of the Human Capital Strategy is the establish-ment of a modern workforce planning capability that inte-grates with the Agency’s overall strategic planning and budg-eting processes. USAID is currently conducting the firstcomprehensive workforce analysis in the Agency's history.This analysis will help to determine staffing levels needed tomeet program demands, identify gaps in skills and staffinglevels, and create a plan to close the gaps. Initial workforceanalysis efforts focused on USAID's growing Global Healthprograms and the administrative functions of procurementand human resources management to determine the appro-priate methodology to use Agency wide. USAID plans toimplement a workforce planning system in the 2nd quarterof FY 2005.

Right-Sizing the Overseas Presence – Two New Models

USAID has developed an Overseas Staffing Template,a consistent, transparent method for allocating overseasstaff that is integrated with the Agency's strategic planningand budgeting process.Applying this template,Agencymanagement is repositioning the overseas Foreign Serviceworkforce –700 full-time staff–to address critical staffinggaps in the Asia and Near East region. Annual reviews ofthe overseas staffing template will be conducted based onnew mandates and priorities as well as new workforceplanning levels.

A study of the Agency’s Overseas Business Model wascompleted in the 3rd quarter of 2004.The findings contain

recommendations to the Administrator for consolidatingadministrative functions in regional service centers to fur-ther rationalize staffing and to streamline overseas opera-tions. Plans for implementing decisions are in develop-ment.

The Agency's comprehensive workforce planning effort,when completed, together with the findings from theAgency's Overseas Business Model study, will establish astrategic process for the overseas staffing of both U.S.direct hires and non-U.S. direct hires.

3.A More Flexible Workforce Established

Non-Career Limited Term Foreign Service Appointments–RapidPlacement of Staff to Respond to Emerging Program Priorities

In the 2003 legislative session, Congress provided USAIDwith a new flexible hiring authority that permits hiring of upto 85 new limited-term Foreign Service employees per yearfor three years (fiscal years 2004 through 2006) for over-seas assignments. This new authority will help fill theapproximately 40 overseas positions that typically remainunfilled at the end of each Foreign Service assignment cycledue to a lack of human resources.The new authority willalso assist in providing a surge capacity to respond to globalemergencies and new strategic priorities, such as thoseassociated with recently opened or re-opened missions inPakistan,Thailand,Afghanistan, Iraq, Sudan and Djibouti. 52candidates have accepted offers for non career ForeignService limited appointments as of July 2004.

4. Creating a Diverse WorkforceTo promote and sustain a diverse and efficient workforce,

USPSCs, 8%

Fellow, PASA/RASA4%

Foreign Service, 13%

Civil Service,13%

FSNs (DH and PSC),62%

USAID Workforce Profile

DH= Direct Hire

USPSC= U.S. Personal Services Contractor

FSN= Foreign Service National

PASA= Participating Agency ServiceAgreement employee

RASA= Resources Services SupportAgreement employee

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Next Steps

USAID has developed a human resources accountabilitysystem that includes performance metrics to monitor,evaluate, and track achievement of priorities and goals inUSAID’s Human Capital Strategy. Plans to implement thesystem are currently being developed.

The Agency is exploring plans to develop an automatedHR information management system (HRIMS). An HRIMSwill provide quick and easy access to centralized informa-tion such as an internal skills database that will assist man-agers in identifying needed staff when making key deci-sions related to unexpected international crises and globalemergencies. In parallel to these efforts, USAID is partici-pating in the cross-agency OPM HR Line of Business e-Government initiative.This initiative envisions improvingthe delivery of HR services through consolidation of com-mon HR functions that are shared throughout the federalgovernment.

An Example of How Human Capital InitiativesWill Help USAID Respond Quickly to Urgent Program Needs

Result

Qualified staff is located from USAID's Surge Capacity reservesof former USAID officers, career and limited Foreign Service Officers. The staff is assembled for immediate deployment.

Action

Mission researches a list of potential candidates by using the automated HR information management system.

Need

The Mission Director in Afghanistan urgently requires staff augmentation to support a new grant program aimed at removing land mines.

USAID is conducting a study of workforce diversity issuesand developing an action plan that will incorporate mean-ingful affirmative employment goals into recruitment andtraining strategies. Current recruitment outreach activitiesinclude participation in national job fairs and visits to col-lege campuses. USAID recruiters also coordinate with theDepartment of State Diplomats in Residence (DIR) toattract a diverse pool of applicants for the Agency’sForeign Service. Many DIRs are located at minority serv-ing institutions.

5. Increasing HR Capacity to Support USAID's Mission

Based on comments from the Administrator's annualEmployee Survey, the Agency is developing a strategy toimprove personnel services and streamline HR processes. Toenhance services, an automated recruitment tool,Avue, wasintroduced to accelerate processing of HR transactions.Avue reduces the amount of time required to fill vacancies,streamlines the job application process, and provides timelyinformation to applicants. As a result, the internal recruit-ment cycle has been reduced from 229 days to less than 45days from job announcement to employee selection in con-formance with OPM standards. An internal study revealedthat Avue has saved the Agency the equivalent of 7 full timepositions due to the streamlining of processes as a result ofthe web-based and automated features.These features enablefilling out and submitting applications on-line, notifying appli-cants of the status of their application by email and automat-ing the rating and ranking process. These increased efficien-cies enable the Agency’s human resources professionals todevote more time to serving as consultants to their cus-tomers.

Human Capital Milestones

Hire 50 employees under DRI. 4th Quarter FY 2004

Appoint 85 non-career FS to fill vacan-cies overseas.

4th Quarter FY 2004

Construct initial staffing models basedon workforce data collection and initi-ate recruitment and assignment actionsto address staffing gaps.

1st Quarter FY 2005

HR accountability system with metricsinitiated.

2nd Quarter FY 2005

Implement final workforce planning sys-tem to address Agency skills/staffing gaps.

2nd Quarter FY 2005

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Initiatives USAID Employee Benefits U.S.Taxpayer Benefits

Development Readiness Initiative (DRI) Allow more employees to attend trainingwithout creating job coverage gaps

New talent is in place for current and futuresuccession to ensure continuity of Agencyprogram operations.

FY '04 legislation authorizes USAID to hire85 Foreign Service Limited positions per yearthrough FY 2006.

Respond to new and emerging programrequirements without reassigning employeesfrom other Agency programs.

USAID is able to quickly respond to highprofile, often politically sensitive, and quickresponse situations that can be critical tonational security.

In the past three years, USAID's training hasdoubled from the levels of the 1990s.

New certification training programs for tech-nical staff to address skills gaps and to devel-op new skills.

E-Learning Institute launched.

Nearly 1000 employees have received execu-tive and senior leadership training;

Over 500 employees have received supervi-sory training;

Over 900 employees have received CTO cer-tification training;

Improves employee morale in critical, butunder-staffed functions, such as procurement;

Employees have completed nearly 2000courses on-line with reduced disruptions towork responsibilities due to time away fromoffice. (May '03 - July '04).

Enhanced employee performance results intaxpayer funded Agency programs being car-ried out as effectively as possible.

USAID's distance learning courses have savedapprox. $836K for the Agency for the period5/03 - 6/04 when compared to traditionalinstructor led training. In addition, enormoussavings are achieved due to lack of travel,hotel and per diem.

New performance management policiesapproved by the BTEC will streamline annualevaluation procedures, training, awards andaccountability.

Reduces the amount of time supervisorsspend preparing annual evaluation forms;places more emphasis on counseling, careerdevelopment and results.

Improves employee performance andachievement of results through better per-formance incentives.

Summary of Human Capital Achievements & Benefits

Modernizing business systems to accelerateprogram delivery and results

Technology

Received first ever clean audit opinion on Agency financialstatements that demonstrates transparent and accountable financial practices

Deploying a new financial management system and new procurement software overseas to enhance decision-makingand enable fast and accountable transactions

Saving over $5 million in taxpayers funds through jointlicensing agreements as a result of the Joint Financial Management System collaboration with State Department

Reduced late payment penalties to vendors by $127 thousandas a result of financial management improvements

Launched an on-line recruitment tool that simplifies thehiring process, enables applicants to apply for jobs over theInternet, and provides better services to citizens

21

22

The Challenge

USAID has a proud tradition of innovation and autonomyin designing development programs and managing its mis-sions overseas. The Agency has also been highly creativein applying information technology in its missions and atits headquarters in Washington, DC. However, the lack oftelecommunications capacity in many countries combinedwith an organizational culture that prefers decentralized,non-standard solutions have presented challenges. Untilrecently this situation prevented the Agency from realizingefficiencies and other benefits of a common worldwidetechnology platform connecting headquarters and mis-sion-based systems.Widespread use of personal comput-ers, e-mail and office automation without a standard glob-al strategy for business applications has led to disconnect-ed "islands of automation" throughout USAID. This hasresulted in extensive use of unique, informal and un-audit-ed data and systems for reporting at each mission and athigh cost. In addition, timely, accurate and reliable stan-dardized management reports are often not able to beproduced.

In the 1990's, USAID recognized the need to modernize,standardize and integrate its business processes into a sin-gle global business platform. Unfortunately, an ambitiousmodernization effort failed and led to perceptions ofUSAID as a poorly-managed organization. TheAdministrator's assessment of the Agency's service deliv-ery capabilities when he arrived in 2001 indicated thatUSAID's business systems remained slow, cumbersome,based on obsolete business practices and technology, andout of compliance with federal standards.The challengesof the 21st century require that USAID develop manage-ment systems that provide:

• Faster, more cost-effective processing of transactionsand delivery of foreign assistance overseas

• Improved surge capacity for emergencies and unantici-pated workload spikes

• Elimination of paper-processing, freeing employees toperform higher-value work

• Comprehensive, consistent, and timely information to

Agency managers worldwide, enabling them to monitor,direct, and report on program performance

• Systems that work together seamlessly to merge finan-cial management, procurement, and management report-ing into one easy-to-use system

• State-of-the-art internal controls to prevent and detectunauthorized activities

The Response

In recognition of these challenges, the BTEC developed aBusiness Systems Modernization (BSM) plan to establish aworldwide business platform capable of supporting higherlevels of performance.The goal of the BSM initiative is toenhance the delivery of Agency services and programsthrough Internet-enabled, globally deployed systems andstandardized processes and practices. The BSM initiative isincorporating the lessons learned from past Agency effortsand is designed to focus on customer and employee needs.

Three main points make the BSM differ-ent from past modernization efforts:

• The Agency program leadership assures USAID busi-ness needs come first when making investment deci-sions about information technology systems. USAID'sBusiness Transformation Executive Committee (BTEC),a governance structure of senior leaders from acrossthe Agency, is responsible for using the EnterpriseArchitecture and Capital Planning and InvestmentControl processes to set priorities and make criticaldecisions on BSM investments. BTEC’s oversightensures that transformation initiatives remain focusedon the Agency’s mission requirements and strategicobjectives.• Improved project management capabilities are in place.USAID has established a Program Management Office(PMO) that is being staffed by certified IT project man-agers to ensure application of "best practices" in riskmitigation, change management, life cycle system devel-opment and portfolio management to BSM initiatives.• BSM is using proven commercial software products.Rather than developing a custom, home grown, or "bigbang" solution, BSM is using commercial off-the-shelf(COTS) software modules that have been designed towork together.These software products have been rig-orously tested and proven to meet federal standards,and have been used successfully by numerous agencies,including the Department of State.

Technology: Business Systems Modernization

23

immediately to the general ledger accounts. Missionemployees in financial management offices will benefit byaccomplishing their tasks more efficiently.

Phoenix provides the following benefits to USAIDemployees and U.S. taxpayers:

• Accountability: Phoenix will allow rigorous compli-ance with federal audit requirements.The Agency will beable to routinely produce detailed federal financial state-ments directly from the financial system that will providean accurate accounting of funds for employees and U.S.taxpayers.

• Improved Decision Making and Planning: Phoenixwill enable USAID managers to quickly access financialmanagement data, answer important day-to-day businessquestions, and make strategic decisions based on up-to-the-minute data.

• Efficiency and Effectiveness: Phoenix will enableclose collaboration among administrative and programstaff throughout financial, procurement, and budget lifecycles, while enforcing appropriate separation of duties.As a result, financial management activities will enhancemission delivery.

Over the past several years, USAID has made significantprogress in modernizing its business systems by: imple-menting a new core accounting system, Phoenix, inWashington, DC; planning for the integration of Phoenixwith the State Department’s accounting system throughthe Joint Financial Management System (JFMS) project;planning to deploy Phoenix overseas along with a newState-USAID Joint Acquisition and Assistance ManagementSystem (JAAMS); and by participating in numerous cross-agency e-Government initiatives through the President’sManagement Agenda.

Phoenix Accounting System - Enabling Fast,Transparent andAccountable Transactions

Deployment of Phoenix overseas will extend the headquar-ters core accounting system to USAID's world-wide mis-sions and when fully implemented will be the central com-ponent of the Agency's global business platform.The over-seas deployment of a Web-based, financial management sys-tem will provide an affordable and standardized agency-wide system for budget execution, accounting, and financialmanagement. Phoenix will replace the current MissionAccounting and Control System (MACS) system with onethat is compliant with federal regulations. A key benefit isthat financial transactions entered in the field will post

An online notice for the services requested is placed in FedBizOpps.gov.Electronic copies of the proposals are received and evaluated, and a contract is awarded. The CTO is pleased to know that the procurement process is streamlined, transparent and fiscally accountable.

The electronic request containing the necessary financial and procurement information is sent to the regional contracting officer for review and approval.

The Cognizant Technical Officer (CTO) in USAID's mission in Madagascar has a need for technical advisory services to support HIV/AIDS initiatives for the Government of Madagascar. He logs into the integrated financial and procurement system to initiate a procurement request.

ResultActionNeed

An Example of How BSM Will Help USAID Operate

24

Phoenix has been successfully implemented in Washingtonand now supports Washington-based accounting transac-tions. The Agency ran pilot programs of the system in fiveoverseas missions during the summer of 2004 and willfully replace the MACS system with Phoenix in up to 40overseas missions by December 2005.

USAID is coordinating the implementation of Phoenixoverseas with the State Department through a projectreferred to as the Joint Financial Management System(JFMS). This project began in 2002 when it was recog-nized that State and USAID were independently imple-menting the same financial software package, and theycould achieve savings by working together to produce asingle system to serve both agencies. Plans call for USAIDand State to converge onto a single system running onthe same platform serving both agencies at the end of cal-endar year 2005. Savings of over $5 million in softwarelicense fees are expected to accrue through fiscal year

2007 as a result of leveraging the combined purchasingpower of the two agencies.

Joint Acquisition and Assistance Management System - EnablingAccurate Procurement Data Anytime & Anywhere

The Joint Acquisition and Assistance Management System(JAAMS) is the other core building block of USAID's glob-al business platform. Similar to the collaboration effort onfinancial systems under JFMS, USAID is coordinating theimplementation of a new procurement system with State.Because over 60% of USAID's budget funds are obligatedthrough contracts and grants, the acquisition and assis-tance (A&A) process is the primary means by whichUSAID implements its international development andhumanitarian assistance programs. More than half of theAgency's procurement transactions are conducted over-seas. Modernizing A&A processes and integrating A&Atransactions with Phoenix is critical to USAID's ability toreduce transaction cycle time, accelerate the delivery offoreign assistance where it is needed, and produce moretimely and accurate business information.

The proposed software for JAAMS is in the same family ofsoftware products as Phoenix.This means the Agency willhave a procurement system that is fully integrated world-wide with the financial system. This will prevent duplicateentries; eliminate the cumbersome interface between the

Joint Acquisition and Assistance ManagementProject Milestones

Complete requirements analysisand project planning

1st Quarter Fiscal Year2005

Implement joint USAID and Stateprocurement solution inWashington, and integrate withrespective financial managementsystems

During Fiscal Year 2005

Complete pilot project at aUSAID mission

3rd Quarter Fiscal Year2005

Complete full deployment of JAAMS


Phoenix Overseas Deployment Project Milestones

Complete pilot projects at Peru,Egypt, Ghana and Nigeria over-seas missions

4th Quarter Fiscal Year2004

Deployment of Phoenix to newoverseas missions

During FY 2005

Re-host Phoenix to StateDepartment's CharlestonFinancial Services Center as partof the Joint Financial ManagementSystem Project

1st Quarter FY 2006

Complete deployment of thePhoenix Financial ManagementSystem to all USAID overseasaccounting centers


"We are very excited.We think Phoenix willwork.The two main advantages of Phoenix arethat data is entered only once, and that theWashington office will be able to run financialreports independently of missions."

Chief Accountant Sherif Zohdi, USAID Egypt Mission.

25

two legacy systems, enable easily accessible informationon program commitments, obligations and expenditures.The new system will be rolled out to both theWashington, D.C. offices and to the overseas missions in2005. At the same time JAAMS will also be integratedwith Phoenix and USAID's e-Grants activities. Once thisintegration has been successfully completed, the combinedsystem will be merged with State's systems to create anintegrated global business platform.

Program Management Office - Providing Project ManagementSupport

A Program Management Office (PMO) has been estab-lished to provide project and portfolio management sup-port to the Agency's major IT capital investments includ-ing those comprising the BSM initiative. The PMO willimplement centralized and structured coordination ofthese major initiatives; oversee and monitor project per-formance; and measure project results. A key responsibili-ty of the PMO is to assure that the Agency, in partnershipwith State, develops an Enterprise Architecture that

informs the rational investment of IT resources in supportof the Agency business goals.

E-Government Initiatives - Enabling Citizen-Centered Services

The Agency is an enthusiastic participant along with otherfederal agencies in the President's "Quicksilver" e-Government initiatives. These initiatives were selected byan interagency task force in 2001 to simplify and unifycommon functions across the federal government. Thepurpose of these projects is to expand the use of theInternet and computer resources in order to deliver gov-ernment services that are citizen-centered, results-orient-ed, and market-based.

USAID actively participates in the development of sevene-Government initiatives: e-Travel, e-Records, e-Clearance,e-Training, Grants.gov, e-Records Management, andIntegrated Acquisition Environment (IAE). IAE is designedto ensure that federal agencies follow the same procure-ment processes and buy from the same suppliers. USAIDalso participated in the e-Recruitment and e-Payroll initia-tives that are now fully operational.

USAIDCurrent Islands of Automation

USAIDFuture Integrated Global Business Platform

Disparate systems require extensive manual processing; data are inconsistent in format and content.

Systems work together seamlessly to merge with an Executive Information System (EIS) - an automated reporting system that enables managers to extract information from Agency data bases to make informed decisions and track program performance.

ROUGH SEAS

EIS

CORE

ACCOUNTING

STANDARD MISSION SYSTEMS

CORE

ACCOUNTING

ARCHIPELAGO OF MISSION SYSTEMS

PROCUREMENT

STANDARD HEADQUARTERS SYSTEMS

ARCHIPELAGO OF HEADQUARTERS SYSTEMS

PROCUREMENT

26

eGov Description Benefits to U.S.Taxpayers

Benefits to USAIDEmployees

Next Steps

Grants.gov (formerly E-Grants)

Lead Agency:Health & HumanServices

Builds a common point forall organizations seekingFederal grant funds to find,apply and ultimately managegrants on-line.

Increases competition forand simplifies administra-tion of grants, allowingmore Agency funds to bespent on real services. Thisleads to more efficient andeffective grant programs.

Streamlines award of grantsand potentially increasesand strengthens the pool ofgrant applicants, ultimatelyimproving delivery of pro-gram benefits.

Will be piloted in FY ’04,rolled out in FY ’05 andintegrated with theJoint Acquisition andAssistance ManagementSystem by FY ‘06.

Integrated AcquisitionEnvironment

Lead Agency:General ServicesAdministration

Creates an electronic serv-ice to assist agencies pur-chase goods and servicesefficiently and securely.

Reduces both the adminis-trative expenses and theactual costs of goods andservices by allowing agen-cies to join together in pur-chases.

Reduces the time and coststo obtain a range of goodsand services.

USAID will produce a datamigration plan in combina-tion with eGrants by theend of the Fiscal Year 2004.

E-Travel


Provides travelers with aworld-class travel manage-ment system, allowing aperson to perform eachstep of the travel process-from planning and ticketingthrough filing for reim-bursement.

Increased use of self-servic-ing will provide significantsavings through reducedadministrative costs andbetter use of travel servicesleading to cost-savings suchas volume discounts.

Employees will be able touse an internet accessibletool similar to those avail-able to the general publicto make travel reservationson-line in a paperless, fastand efficient manner.

USAID will select fromthree potential vendors andperform a pilot test of theE-Travel web-based applica-tion in two USAID loca-tions by the end of FiscalYear 2004.

E-Records Management

Lead Agency:National Archives andRecords Administration

Helps agencies to bettermanage their electronicrecords and use informa-tion to improve their oper-ations and the quality ofservices they provide totheir customers.

Improves services fromagencies because they willbe able to access the infor-mation they need to maketimely and correct deci-sions while maintainingaccountability.

Improves USAID manage-ment of its correspondenceand maintenance of recordsassociated with its opera-tions. Faster response toinquiries.

USAID will produce a datamigration plan by the endof the Fiscal Year 05.

E-ClearanceLead Agency:National Archives andRecords Administration

Provides an electronicmeans of providing informa-tion needed to process anew or updated securityclearance, streamlining andimproving the clearanceprocess.

Lower cost of performingsecurity background investi-gations. Speeds up process,reducing time to staff classi-fied positions. Will facilitateperiodic reinvestigations.

Easier for new applicantsand current employees toapply for and maintain theirsecurity clearances.Reduces cost of clearance.

Pilots will be conducted inFY '04.

Implementation will occurin FY '05, including thebuilding of interfaces withAgency HR and OPM sys-tems.

E-Payroll

Lead Agency:Office of PersonnelManagement

Consolidates 22 payroll sys-tems, simplifying and stan-dardizing Federal humanresources management andpayroll policies and prac-tices. This will allow betterintegration of payroll,human resources, and finan-cial management functionsand systems, reducing costsand improving service.

Consolidation of federalpayroll systems and centersreduces costs and duplica-tive capabilities.

USAID lowered the admin-istrative costs associatedwith its payroll processingas well as enhancing servic-es to its employees.

Next Steps notapplicable–in 2003, USAIDsuccessfully implementedthe U.S. Department ofAgriculture's NationalFinance Center payrollsystem.

E-Training


Creates a premier systemoffering simple, one-stop,electronic access to a widevariety of high-quality train-ing materials and servicesthat support the develop-ment of the Federal work-force.

Better trained federalemployees will help agen-cies accomplish their mis-sions. Travel expensesrelated to training arereduced.

Allows federal employeesto pursue career develop-ment and professionaltraining at locations andtimes of their choosing,without disrupting their jobperformance, increasingskills and job satisfaction.

USAID's e-learning initiativeprovides a range of cours-es, including Web-basedproject management certifi-cation and other courses,to mission staffs world-wide. USAID plans toexpand the course offer-ings.

E-Recruitment


Provides the USAJOBSFederal EmploymentInformation System on-linerecruiting service to jobseekers, allowing them touse a range of advancedfeatures including intuitivejob searching, electronicresume submission, and on-line determination of statusand eligibility.

Makes it easier for thoseinterested in federalemployment to identify andapply for USAID positions.Electronic processing sim-plifies and speeds up hiringprocess.

Simplifies the process forcreating and advertisingUSAID position vacancyannouncements.

Next Steps notapplicable–in FY 2002USAID's vacancy announce-ments successfully linked toUSA JOBS. In addition, theAgency has implementedAVUE, an online recruit-ment tool that allows appli-cants to post, view andapply for open positions.

USAID Participation in E-Government Initiatives

27

Achievements

New Core Accounting System Successfully Implemented

at USAID’s Headquarters

The successful implementation of Phoenix in Washington, DC has

resulted in highly efficient payment operations.

Phoenix provides accurate financial information to Agency man-

agers to ensure that programs are being carried out in the most

cost-efficient and cost effective manner.

First Ever Clean Audit Opinion

For FY 2003, USAID received it first clean, unqualified audit. This

represents a major milestone for USAID. In previous years, the

Office of Inspector General was unable to audit any of the

Agency’s financial statements due to internal system and data

deficiencies.This achievement was greatly facilitated by the effi-

ciencies provided by Phoenix headquarters operations.

Enterprise Architecture -- A Blueprint for Modernizing

Business Processes and IT Systems

USAID began developing its Enterprise Architecture, an IT and

business process modernization blueprint, in 2003 in close collab-

oration with State. USAID focused its initial efforts on defining

the architecture supporting a single business segment. The

HIV/AIDS program in the Global Health Bureau was selected for

the first EA segment and it was successfully completed in March

2004. The Agency's EA efforts have had a number of positive

results such as identifying opportunities to strengthen the man-

agement of HIV/AIDS programs. It also provides the foundation

for developing the HIV/AIDS executive information system (EIS)

prototype for the Bureau of Global Health to support the

President's HIV/AIDS reporting requirements.

The Agency developed its EA through extensive interaction

between the IT staff and the business managers in the Global

Health Bureau who will be its end users and primary beneficiar-

ies.This collaborative process has ensured that end users under-

stand and accept the EA as their management tool, rather than

as one developed and imposed on them by the IT staff.This high-

ly successful approach and the resulting EA have been recognized

as a best practice, and nine other federal agencies have been

referred to USAID for briefings and demonstrations. In addition,

USAID and State are currently working together to consolidate

both agencies' enterprise architectures, building from a base in

large part established at USAID.

Capital Planning and Investment Control -

Accountability for IT Investments

USAID established new Capital Planning and Investment Control

(CPIC) procedures that are streamlined and compliant with fed-

eral regulations. The new procedures were designed to imple-

ment investment practices required by The Clinger-Cohen Act of

1996.This legislation requires major IT investments be supported

by comprehensive business cases, evaluation and control mecha-

nisms, and be approved by a high level executive body represent-

ing agency-wide business interests.The BTEC serves as the CPIC

authority for USAID.To ensure approved projects are meeting

the objectives described in business cases, quarterly progress

reports are required.

In FY 2003 USAID achieved its first clean, unqualified audit — a clear indicator that the BSM program and on-going financial management improvements are beginning to show positive results.

An EA will be used by Agency managers to identify, analyze, and improve processes, systems and investments to better achieve USAID's mission.

Other USAID E-Government Projects

eGov Project Description Benefits toTaxpayers

Benefits to USAIDEmployees

Next Steps

Central ContractorRegistry (CCR)


Creates an electronicprocess for potential ven-dors and contractors tomeet the registrationrequirements necessary todo business with the federalgovernment.

Will allow more contractors,including small businesses, togain access to informationon the over $4 billion incontracts that USAID awardsannually, improving USAID'smission performance.

Together with the IntegratedAcquisition Environment,Phoenix and JAAMS willincrease competition forawards, thus reducing costsand improving program serv-ice delivery.

Phoenix will link with theCCR to populate USAID’svendor database and will beused by the USAID procure-ment system.

28

Summary of Business System Modernization Achievements and Benefits

Next Steps

Executive Information System

USAID is developing an Executive Information System (EIS) -- an

agency-wide automated reporting system that integrates pro-

gram performance, budget, accounting, and procurement informa-

tion. This information system facilitates data analysis and report-

ing to meet the needs of Congress, OMB, the Administrator,

headquarters employees and overseas mission staff. An EIS will

Initiative USAID Employee Benefits Taxpayer Benefits

Implemented Phoenix accounting system atUSAID headquarters. Phoenix is a standard,commercial off the shelf (COTS) system thatis regulatory compliant.

Timely, accurate, reliable reports enableimproved business decision-making andreporting.

First clean audit opinion in FY '03 assurestaxpayers that Agency can manage andaccount for its funds.

Significantly reduced late payment penaltiesfor vendor payments. Interest of $18,000 waspaid in FY '03, only 14% of the amount paidin 2001. In FY '04, only $1,132 in late pay-ment interest was paid to vendors duringfirst six months - projected annual savings of$127K less than 2001.

New CPIC policies and proceduresapproved and implemented.

Clarifies for employees the requirements tojustify and manage an IT project for seniormanagement approval.

Ensures that IT investments are focused onefficient and cost effective use of funds tosupport the agency mission.

Developed HIV/AIDs EA as first section ofAgency EA that serves as foundation for aprototype for a Global Health Bureau EIS.

As the Agency EIS develops, USAID willincrease its capacity to acquire performancedata at a more detailed and comprehensivelevel within and across bureaus.This benefitsAgency decision makers.

Increases USAID's access and application ofperformance data to better monitor the dis-tribution of resources in order to maximizetax payers' investment in Agency services.

State/USAID Joint Financial ManagementSystem collaboration.

Improved employee customer service due tostreamlined and standardized services, forexample, single point of contact for help deskand system upgrades.

$5 million cost savings through FY ‘07 due tojoint licensing agreements for financial systems services provided by a common vendor.

enable managers to obtain information from Agency data bases

to make informed decisions and to track program performance.

USAID began developing a prototype of the EIS in 2004 and

expects to have the system linked to Agency information

sources –including Phoenix, field support information systems,

and emerging specialized systems–by 2006.

USAID will also:

• Complete a joint Enterprise Architecture with the Department

of State by its institutionalization as a strategic management

tool.

• Continue to integrate systems, networks, and IT infrastructure

with State.

• Collaborate with the State Department on the messaging man-

agement initiative called State Messaging and Archival Retrieval

Toolset (SMART) which will replace current diplomatic cable

distribution systems.

• Continue participation on the cross-agency e-Gov initiatives.

Executive Information System (EIS)Project Milestones

Key elements of EIS installed 4th Quarter Fiscal Year2005

Complete EIS During Fiscal Year 2006

Capturing and generatingUSAID development knowledge

Ideas

Ideas/KfD

Enhancing knowledge management systems and methodsto capture and share development expertise and new ideas

Providing instant access to knowledge assets throughon-line “yellow pages”

31

32

The Challenge

For more than four decades USAID has been providingforeign assistance and humanitarian relief to the develop-ing world. Throughout this period, the Agency has devel-oped innovative ideas to assist a world in need.As a resultof these efforts, USAID is a recognized leader in develop-ment knowledge.

USAID collects, organizes, and maintains online records ofmore than 117,500 current reports, analyses, and technicaland program documents, as well as more than 7.6 millionpages of additional materials in microfiche format. This"explicit" knowledge (mission and bureau databases,strategies, evaluations, reports, communications, and email)is an invaluable Agency information resource. It is criticalthat the Agency gather and share this knowledge withinternal and external partners by the most effective meansavailable.

By 2007, nearly 60% of the Agency's Foreign ServiceOfficers and 30% percent of its Civil Service employeeswill be eligible for retirement. USAID anticipates that itwill undergo continuing high levels of retirement over thenext five years—particularly among the most senior,experienced, and hard to replace employees. Those retir-ing are taking much of USAID's institutional memory withthem. Much of what USAID employees learn over theircareers, including ways of operating, negotiating, and solv-ing problems, is tacit knowledge learned on the job.Codifying and retaining both tacit and explicit knowledgerequires innovative "knowledge management" strategiesand capabilities.

USAID's vast reservoir of knowledge stretches across notonly the Agency itself but also across USAID's "extendedenterprise," which includes its federal partners, interna-tional donors, contractors and grantees, recipient coun-tries, development organizations, non-governmental organ-izations (NGOs), private voluntary organizations (PVOs),and even its retirees. Ensuring that the Agency and itsextended enterprise benefit from this information meansthat USAID must create systems, processes, and an insti-tutional culture that advances knowledge sharing.

The Response

USAID's knowledge is a valuable resource that informs howdevelopment goals are accomplished, maintained and pre-served for use by future generations. USAID has createdthe Knowledge for Development transformation initiative(called "KfD") to improve knowledge sharing and collabora-tion within the Agency and among its business partners.KfD seeks to synthesize knowledge sharing activities andresources already in use, provide easier access to thisknowledge, and allow Agency staff and partners to betteruse relevant knowledge and generate new ideas.The KfDinitiative draws on USAID's knowledge of the foreign aidenvironment to empower employees overseas and inWashington, DC to make informed decisions and advancethe National Security Strategy in the implementation ofdevelopment assistance policies and programs.

The Strategic Management of Human Capital initiativeunder the President's Management Agenda identifies effec-tive knowledge management systems as this is a key part ofUSAID’s strategy to generate, capture, and disseminateknowledge and information that is relevant to USAID's mis-sion. USAID designed KfD as a systematic approach toaccess, use to full advantage, and learn from the Agency'syears of knowledge and experience.This approach will:

• Develop mechanisms for preserving institutional knowl-edge to compensate for rapid staff turn-over and to ori-ent new staff in the conduct of USAID's business (e.g.,designing, implementing, managing, and evaluating devel-opment programs)

• Offer a "one-stop shop" for Agency staff to obtain mostof the relevant knowledge needed to do their jobs;

• Accelerate the application of innovative ideas for Agencydecision-making, learning, and partnering to achieveUSAID objectives and goals

• Promote linkages between knowledge sharing communi-ties in Washington, D.C. and the field and provide linksto other external knowledge sources relevant toUSAID's international development business

These outcomes will enhance USAID's broad-based andeffective sharing of expertise, lessons learned, best prac-tices, on-the-ground experience, and other institutionalknowledge.The KfD initiative will achieve the goal of ensur-ing that the Agency's information and knowledge resources

Ideas: Knowledge for Development

33

support superior development and decision-making at alllevels and meet the needs of business partners.

Achievements

KfD Strategy - A Roadmap to Preserving Knowledgeand Tapping Innovation

USAID has designed a multi-faceted KfD strategy thataddresses the different requirements and goals of knowledgesharing for staff in the field, staff developing long-term strate-gies, and staff providing vital support to USAID’s daily opera-tions. This strategy - approved by the BTEC in Spring 2004- will continue through FY 2008. The KfD strategy providesthe framework for implementation of "knowledge manage-ment" tools, techniques, and methodologies such as commu-nities of practice, collaborative software, expertise directo-ries, and on-line repositories for lessons learned.

Communities of Practice - Sharing Ideas, Methods& Best Practices

Under KfD, a series of communities of practice pilots werelaunched to support knowledge sharing throughout theAgency. Communities of Practice are groups of professionalswho come together around a topic or "domain of knowl-edge"- either virtually or in person-to share ideas, insightsand information, help each other solve problems, and advise

each other. A series of best practices, lessons learned, andrecommendations for integrating communities of practiceinto the KfD strategy resulted from these pilot activities.

In addition, a Youth Community of Practice (YCoP), hosted bythe Bureau for Economic Growth, Agriculture and Trade(EGAT), continues to grow. The YCoP brings together morethan 180 Agency staff from 15 overseas missions and theWashington-based program bureaus, as well as youth practi-tioners and youth-serving organizations worldwide. Membersof the community shares ideas, program models, principles ofbest practice, and web site resources. Expertise is shared onyouth thematic areas such as livelihoods, civic engagement,alternative education and youth participation.The purpose ofthis forum is to create more effective, youth-centered pro-gram activities.The community benefits USAID employees bybringing together a wide range of expertise from differentregions of the world that previously would not have had thesystematic means to collaborate. It has created a mechanismthat allows for the development of new tools for programdesign, implementation, management and monitoring for useby Agency field missions and bureaus.

Knowledge Management Inventory - An InternetAccessible Reference Tool

A Knowledge Management Inventory of USAID programactivities has been developed for on-line collaboration and

The new program, based on proven techniques, is implemented more efficiently and results are realized sooner.

USAID’s Expertise Locator,accessed world-wide via a portal, identifies internal experts, allows for information sharing on similar implemented programs, and taps existing resources from within and across USAID’s extended enterprise.

Newly assigned employee needs to know how to best implement a program in a mission.

ResultActionNeed

An Example of How KfD Will Help USAID Operate

34


BTEC approved KfD strategy that estab-lishes roadmap for an integrated knowledgemanagement system to gather developmentinformation and experience and share itwith internal employees and external busi-ness partners.

USAID Knowledge Fairs held in 2002 and2003.

Mission Knowledge Coordinator trainingdeveloped and piloted with southernAfrican missions at Regional Center forSouthern Africa in 2004 (to be expanded).

Standardized methods and tools for knowl-edge capture, classification, retrieval andsharing.

Reduces time spent searching for correctinformation.

Improves identification and acquisition ofknowledge needed to perform effectively.

Improves ability to collaborate with devel-opment colleagues/innovate and solveproblems more quickly.

Increases sharing of knowledge leveragingof solutions across Missions.

More efficient Agency operations.

More re-use of knowledge/less redundancyof knowledge.

Increases responsiveness to constituentneeds.

Communities of Practice launched. Easier access to knowledge and expertiseneeded for Agency operations.


Increases responsiveness to constituentneeds.

Knowledge Inventory established.

Pilot Knowledge "Yellow Pages".

(under development)

Enhances awareness and access to existingAgency knowledge assets.


More re-use of knowledge/less redundancyof knowledge.

Summary of Knowledge For Development Achievements & Benefits

knowledge sharing.This online catalogue of developmentdatabases, communities of practice, training resources andother knowledge assets, has links to over 200 differentknowledge sharing activities throughout the Agency.

Next Steps

A key component of the KfD initiative is collaborationthroughout the USAID extended enterprise - a particularlycomplex task given the diversity within the extended enter-prise and the intricacy of a global organization. Faced withthe integration of geographically and globally dispersedteams and colleagues, USAID is in the process of reviewingcollaboration tools for use Agency-wide. Collaboration soft-ware provides a set of web-based functions that support the'virtual' meeting places where ideas and documents can beshared.

As USAID conducts future pilots and rolls out new tools tosupport the KfD efforts, the Agency will rely on employeesin the field and in Washington to help with implementation.A Knowledge Coordinator (KC) will be established in each

USAID overseas mission to identify and catalogue existingknowledge sharing capabilities, document knowledge sharingneeds that have not been met, and deploy KfD solutions tomeet those needs.

Expanding upon the on-line cataloguing activities of theKnowledge Management Inventory, a comprehensive"Knowledge for Development Yellow Pages" is currently indevelopment that will provide an on-line listings of subjectmatter experts and knowledge sharing tools throughout theAgency.

USAID and State are coordinating to identify jointKnowledge Management initiatives to advance the goals ofboth the USAID KfD initiative and State's KnowledgeLeadership program. A pilot project that will provide accessto economic databases between agencies is in its earlystages and will be coupled with the trial use of an improvedsearch engine capability for both agencies. As new activitiesare identified and implemented, milestone accomplishmentswill be reported to the State/USAID Joint ManagementCouncil.

35

Innovative Ideas

Global Development Alliance - Promoting Public-Private Partnerships

In 2001 USAID created the Global Development Alliance(GDA) to foster public-private partnerships that combine theAgency’s international development expertise with theresources and innovations of the private sector. A principalAgency business model, the GDA is a central element ofUSAID’s strategic assessment, planning and programmingefforts. The underlying premise of the business model is thatUSAID and private partners collaborate to bring their greatestassets to the table to work together to encourage economicgrowth, develop businesses and workforces, address health andenvironmental problems and expand access to education andtechnology.Through such partnerships, USAID has leveraged anadditional four dollars from the private sector for every onedollar it invests toward international development.

In Angola, USAID partnered with ChevronTexaco to revitalizethe agriculture industry in a country torn by 27 years of civilwar. The program is designed to help refugees and former sol-diers return to their villages and resume their farming occupa-tion along with developing a diverse economic base for Angola.Under the alliance five projects have been launched including amicro-credit bank and the rehabilitation of an agricultural voca-tional school.

The Enterprise Development Alliance is just one of many initia-tives supported through the GDA. Partners range from host-country ministries and small businesses to foundations andlarge corporations.Through these alliances USAID has beenable to bring critical, new assets and innovative approaches todevelopment challenges.

"The Enterprise Development Alliance takes advantage ofUSAID's and Chevron Texaco's collective strengths to make animportant contribution to the economic recovery of Angola."David O'Reilly Chairman ChevronTexaco

The GDA provides benefits to both Agencyemployees and U.S. taxpayers. USAID staff ben-efit by collaborating with development col-leagues to innovate and solve problems morequickly. U.S. taxpayers benefit by providingmore development assistance with fewer for-eign assistance dollars. In fiscal years 2002 and2003, approximately 200 alliances have beencreated with approximately $500 million inUSAID funds, leveraging over $2.9 billion inpartner resources. In addition, more economicgrowth and prosperity in developing countriestranslates into greater security for Americans.

Investing in successful programs

Results

Results

Strategically allocating program funds to countries with themost need and the highest commitment

Better aligning staff with foreign policy priorities with a newOverseas Staffing Template–21 positions moving to Asia and Near East programs

Re-allocated $30 million to higher performing, higher need programs

37

38

Results: Strategic Budgeting

The Challenge

USAID manages program funds from a number of foreignaffairs accounts directed at addressing a broad array ofinternational issues facing the United States. These rangefrom fighting the HIV/AIDS pandemic and sustaining keycountries supporting the war on terrorism to bolsteringdemocracy, the rule of law, and good governance in coun-tries important to U.S. national security. Approximately 80%of USAID programs are implemented through field officesoverseas.

The Agency's portfolio of funds in FY 2004 is nearly $14 bil-lion, double the amount of FY 2001. These increases werenecessary to support U.S. foreign aid objectives to addressthe instability and insecurity that arise from terrorism,transnational crime, failing states, and global diseases.

The growing global complexities underscore the need to useU.S. foreign assistance resources effectively. USAID's chal-lenge is to move from allocating resources based on incre-mental adjustments to the annual budget to a strategic budg-eting approach that informs resource allocation decisions tobetter align foreign aid and U.S. foreign policy objectives.

The Response

Building on the President's Management Agenda, which man-dates improved integration of budget and performance,USAID launched a strategic budgeting transformation initia-tive. A new USAID/State strategic plan provides the per-formance goals to drive this initiative.

The Agency developed a statistical budgeting model thatassesses the allocation of program resources to improve thelinkage between strategic and program priorities.The Officeof Management and Budget (OMB) Program AssessmentRating Tool (PART), a standardized and systematic templatefor rating program performance, is used to help the Agencyimprove the effectiveness of its programs. The PART pro-vides OMB with feedback on how well federal programs areperforming and achieving their goals. The Agency alsodesigned an Overseas Staffing Template to determine theappropriate allocation of Foreign Service officers to USAIDmissions.Together, these three strategic planning tools con-verge to improve the Agency's effective use of its resources.

Achievements

Joint State/USAID Strategic Plan - The First of Its Kind

The first Joint State/USAID Strategic Plan, which was final-ized in FY 2003, directly supports the U.S. National SecurityStrategy. The five year plan guides the Agency in planningand prioritizing programs and in the delivery of develop-ment and humanitarian assistance.The Joint Strategic Planlays the framework for the development of performancemeasures and targets against which the Agency's programperformance will be measured and reported. To ensureconsistency in the application of the plan, USAID andDepartment of State synchronized their budget and planningcycles in FY 2004.

Performance and Budget Integration - ResultsDriven by Better Performance

USAID has instituted a performance-based system of plan-ning, managing, and measuring outcomes and results of pro-grams based on the strategic budgeting initiative. This sys-tem has been integrated into a framework for the strategicallocation of resource requests for the annual budget sub-mission to the Office of Management and Budget (OMB)and the Congressional Budget Justification. The system isinformed by the Agency's new Strategic Budgeting Model aswell as from information obtained form PART reviews. Theperformance based budget system enables OMB andCongress to make better-informed authorization decisionsand makes more evidence-based spending decisions thatachieve positive results for the American taxpayer.

Strategic Budgeting Model

The Agency developed a formal strategic budgeting modelto help decide how to allocate resources to bilateral coun-try programs.The model is based on the following criteria:development need, country commitment, foreign policyimportance and program performance.The Agency firstapplied this model to the formulation of its FY 2004 budgetrequest, which resulted in reallocation of some funds fromlower performing to higher performing programs.Themodel was expanded during the formulation of the FY 2005budget to categorize countries based on MillenniumChallenge Account (MCA) criteria of commitment to eco-nomic freedom, governing justly, and investing in people.

39

The countries were divided into four categories:

• Top Performers (based on MCA criteria),• Good Performers (including near misses and other

high performers who do not meet the per capitaincome threshold for MCA consideration),

• Fragile or Failing States, and• Other Foreign Policy Priority Countries (those which

are rated low on country commitment, as measuredby MCA criteria, or which are important for U.S.foreign policy reasons).

This more sophisticated model was used to inform thebudget allocations to USAID country programs across thefour categories.The Agency has several appropriationaccounts that finance country programs around the world.The Economic Support Fund (ESF) is primarily for financingimportant foreign policy programs in countries such as Israeland Egypt; Child Survival and Health (CSH) focuses on sec-tor programs that affect maternal and child health,HIV/AIDS, other infectious diseases, and family planning andreproductive health; and Development Assistance (DA) ismainly for financing economic development, agriculture,democracy and governance, environment and education pro-grams. DA and CSH are generally allocated to programs incountries that are considered top or good performers.

The Agency analyzed the proposed budget request for FY2005 to determine how well the fund allocations alignedwith the country categories.The graphic below shows thatDA and CSH are the primary funding sources for top andgood performers and ESF is primarily the funding source forfragile and failing states and foreign policy important coun-tries.This allocation is consistent with U.S. foreign policy

objectives and represents a strategic alignment of theseappropriation accounts.

The Strategic Budgeting Model will be further differentiatedto take account of how to allocate program resources intransformational development countries; fragile, failing andrecovering states; and in countries of geo-strategic impor-tance to U.S. foreign policy.

Program Assessment Rating Tool (PART) - Strategically Assessing Program Performance

The PART reviews at USAID began in FY 2002 when thefollowing Agency sector program areas were evaluated:Population - funded through the CSH account; GlobalClimate Change; and Food Aid. These initial evaluations con-tributed to the FY 2004 budget process. In FY 2003, USAIDmoved from a sector focus to a geographic focus andapplied the PART to the Latin American and Caribbean(LAC) region programs in Child Survival and Health andDevelopment Assistance as well as to programs in TransitionInitiatives. In FY 2004, USAID completed a program per-formance assessment of its Operating Expense funded man-agement services. The Agency received a good evaluationfrom OMB on this PART review due to recently implement-ed management reforms such as: use of performance infor-mation to make process improvements; and use of informa-tion technology capital planning and investment controlprocesses to improve the selection and oversight of ITinvestments. By the close of FY 2004, USAID will haveassessed fully 60 percent of its programs.

The PART results help the Agency to improve programeffectiveness and resource allocation decisions. The PARTassessment of USAID’s Population program, for example, ledthe USAID to allocate funds more strategically by takingaccount of country-level needs (measured in terms ofpopulation density, fertility, and unmet needs for familyplanning). As a result, USAID reassigned over $30 millionof the FY 2002 Population/CSH allocation from lowerneed countries to higher need countries.

The PART reviews provide performance assessments ofAgency programs that managers need to make informedresource allocation decisions. This information is the basisfor providing evidence-based funding requests aimed atachieving specific, positive results.

Foreign PolicyFragile or FailingStates

Good PerformersTop Performers

16%22%

58%

97%

ESF

CSH

DA

1%2%

15%

27%

40%

38%

39%

45%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

FY 2005 Request by Account within Country Category

40

Overseas Staffing Template - Strategically Placing USAID ForeignService Officers

USAID’s Overseas Staffing Template was developed to deter-mine the appropriate allocation of U.S. Direct Hire (USDH)mission staff based on a variety of factors including programsize, foreign policy priorities and MCA criteria. This wasdone to better align staff with Agency strategic objectives.In FY 2004, USAID began to reallocate its existing 700 over-seas staff positions based on this model. As a result, 21 posi-tions are being reassigned to the Asia and the Near Eastregion. The template will be applied every two years toensure staff is allocated in line with program and U.S. foreignpolicy initiatives.

Strategic Budgeting Milestones

Complete PART assessments for60% of Agency programs.


Integrate State/USAID AnnualPerformance Plans; Finalize jointperformance indicators.

2nd Quarter Fiscal Year2005

Implement the Agency's newbusiness model.


Begin mission program manage-ment evaluations.

During FY 2005


State/USAID Joint Strategic Plan Performance Goals provide meaning toemployees' work contributions to the mis-sion of their organization.

Programs and resources better aligned inthe two organizations.Joint performance standards and targets fordevelopment and diplomacy result in moreefficient use of taxpayer dollars.

Strategic Budgeting Model Transparent method for employees tounderstand the factors that determine theprogram resources their missions receive.

Better performance-based, results orienteddecision-making produces more US bene-fits per dollar.Higher taxpayer confidence in financialintegrity.

PART Reviews Disciplined approach to assessing programperformance.Consensus-based, high-quality performancemeasures and targets enable managers andprogram staff to make informed fundingdecisions.

Resources appropriately allocated to pro-grams that make a measurable and substan-tial contribution to U.S. foreign policyobjectives.

Overseas Workforce Template Ensures mission staff is assigned whereneeded to effectively accomplish missionprogram delivery functions.

More efficient use of human resources.Ratio of staff to program dollars deliveredimproving.

Summary of Strategic Budgeting Achievements & Benefits

Next Steps

A recently completed Business Model Study will help theAgency to continue to "right-size" and "regionalize" programdelivery, as appropriate, and provide linkage to StrategicBudgeting efforts to improve the efficiency and effectivenessof central, regional and bilateral program operations.

The business model review looked at how well USAID is setup to carry out its development, humanitarian, and othermissions; how quickly it can respond to new challenges; andhow safely and effectively it operates in dangerous places.The study’s recommendations call for improving cross-agency strategies. Missions will choose from a limited list ofprogram objectives and use a standard set of performanceindicators to measure progress. Streamlining the strategicplanning process, will reduce the time and resourcesexpending on planning efforts. The study also recommendsre-introducing mission management assessments every threeto four years, to review how mission programs are staffed,structured and managed. Interim guidance for thesereforms will be issued during the 4th quarter of FY 2004.

USAID's strategic budgeting initiative will continue to evolveas the Agency begins implementation of the joint strategicplan. The results of this effort will institutionalize a set ofprocesses and tools that integrate performance informationinto the budget decision-making process.

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Appendix 1

USAID PMA Scorecard Summary as of 3rd Quarter of Fiscal Year 2004

Initiative

Human Capital Status n Progress n

The Agency's progress score remains "Green" for the thirdconsecutive quarter as it continues to successfully implementactivities to meet the core criteria for this PMA initiative. Afive year Human Capital Strategic Plan has been finalized thatlays out plans to address workforce issues in the comingyears. Good progress has been made on training and recruit-ment initiatives. In the area of performance management theAgency has finalized new rules for promotion into the SeniorForeign Service that place significantly greater emphasis onleadership competencies. The Agency will maintain a "Red"status score until the following initiatives, currently in devel-opment, are completed and implemented: a comprehensiveworkforce and skills gap analysis; succession planning strate-gies; under-representation strategies to sustain a diverseworkforce; and implementation of an HR accountability sys-tem to make informed decisions about human capital.

Competitive Sourcing Status n Progress n

USAID remained "Red" on status and "Yellow" on progress.The Agency is in the process of reviewing the 2004 FAIR ActInventory for possible candidates for competition. In themeantime, USAID is implementing related Business ProcessImprovement (BPI) studies.The Agency's personnel recruit-ment process was selected and approved by USAID's BTECas the first BPI review. An internal working group has beenformed to provide both short-term and long-term recom-mended improvements. In addition, a recently completedoverseas business model study recommends the use of localoutsourcing for appropriate functions. The Agency's futurecompetitive sourcing competitions will determine if it meetsthe core criteria for this PMA initiative.

Financial Management Status n Progress n

While USAID maintained a "Red" status score for FinancialManagement, the Agency maintained its "Green" progressscore for the 6th straight quarter by continuing to meet itstarget activities to address the core criteria for this PMA ini-tiative. For the first time, the Agency received an unqualifiedaudit opinion on its FY 2003 financial statements and expectsto maintain this position in FY '04. The roll out of thePhoenix accounting system to USAID's overseas missions willaddress the remaining compliance issues that have kept theAgency's status rating at "Red" (i.e., material weaknesses andnoncompliance with federal laws or regulations). Green sta-tus is achievable when the Phoenix accounting system is suc-cessfully implemented and provides accurate and timely datathat is actively used by managers to answer critical businessand management questions (estimated December 2005).

E-Government Status n Progress n

As a result of USAID's activities to establish an EnterpriseArchitecture, the Agency's status score moved from "Red" to"Yellow" in the 2nd quarter of FY ‘04 and remained yellow atthe end of the 3rd quarter. The Agency maintained its“Green” progress score for the 6th straight quarter. USAIDEA efforts identified HIV/AIDS new technology and policyinitiatives for the Bureau of Global Health and provided thefoundation for developing an executive information system(EIS) prototype to support reporting requirements under thePresident's Emergency Plan for AIDS Relief (PEPFAR).TheAgency is making good progress in its participation on sevencross-agency e-Government initiatives. The next importantmilestone is completion of the first joint component of theEnterprise Architecture with Department of State. Toachieve a Green status score USAID must also fully meet thefollowing core criteria: acceptable business cases for all majorsystems; operational IT systems are verified as 90% secure bythe Inspector General (currently 80% of the Agency's opera-tions IT systems have been verified as secure by the OIG),and costs/schedule/performance overruns and shortfalls areless than 10% (currently USAID is at less than 30%).

Budget and Performance Integration Status n Progress n

USAID moved from "Red" to "Yellow" in status in the 2ndquarter of FY ‘04 and maintained the Yellow rating at the endof the 3rd quarter. USAID has maintained “Green” progressratings for 8 consecutive quarters. USAID earned an upgradeto Yellow based on meeting the Human Capital milestoneassociated with the requirement for performance appraisalplans to link, differentiate, and provide consequences for mem-bers of the Senior Executive Service, Senior Foreign Service,and managers. USAID also developed efficiency measures forall of the programs that underwent the Program AssessmentRating Tool (PART). A new budget planning schedule synchro-nizes USAID budget reviews with Department of State andwill lead to a joint USAID/State Annual Performance Budgetfor 2006.To achieve green status, USAID needs to: completePART ratings for all programs; systematically use performancemeasures by policy makers; accurately (+/- 10%) report the fullcost of achieving USAID performance goals in budget and per-formance documents and accurately estimate (+/-) the margin-al cost of changing performance goals; use PART evaluations todirect program improvements; and consistently use PART rat-ings to justify funding requests, management actions and legisla-tive proposals.

KEY TO “STATUS” SCORES

n Indicates that the agency has met all of OMB's core criteria for the initiative.

n Indicates achievement of some but not all of OMB's core criteria for theinitiative and agency has no "red" conditions.

n Indicates that at least one of the conditions identified by OMB for thatinitiative is in need of correction.

42

Appendix 2

USAID/Department of State Joint Strategic Plan

Joint Strategic Plan

The Department of State-USAID Joint Strategic Plan outlines thetwo organizations shared mission, core values, goals and priori-ties in both policy and management areas.The joint managementstrategic objectives are closely linked to the goals of thePresident's Management Agenda (PMA). In accordance with theJoint Strategic Plan, a State-USAID Joint Management Councilwas established in the fall of 2003 to oversee and implementcollaborative management activities. Eight working groups col-laborate on joint activities in the following areas: ResourceManagement; Management Processes and Systems; ManagementServices & Planning; Information & Communications Technology;e-Government; Facilities; Security and Human Capital.The JMCactivities have already produced cost savings for the U.S. taxpay-er and improved services for employees in both agencies.

Joint Management Council Achievements

Human Capital: Developed a pilot exchange program of domes-tic and foreign assignment opportunities for mid-level ForeignService Officers from both State and USAID.The exchange pro-gram serves to increase understanding in the two agencies ofeach other's role in the foreign affairs process and helps fillrespective program needs with trained officers.Information and Communications Technology. Established directconnections between State's and USAID's intranets, making bothnetworks available to domestic and overseas staff from eachagency. Real-time and secure communications are vital for Stateand USAID to work together, and this joint access will make iteasier for employees of both agencies to share information.Resource Management: Aligned both agencies budget and plan-ning cycles to ensure policy and program decisions are madewith full input from both State and USAID.Security: Updated a Memorandum of Understanding betweenthe two agencies to improve joint security responsibilities over-seas.

USAID and State continue to make progress in the followingareas.Management Systems & Processes: Collaborating on a JointFinancial Management System (JFMS). This on-going initiative isproducing significant cost savings through joint licensing agree-ments.E-Government: Developing a joint Enterprise Architecture tosupport major business and technology requirements in accor-dance with the PMA e-Government initiative.Management Service & Planning: Implementing shared servicespilots at four overseas posts. A joint review of select administra-tive services at these posts identified opportunities to improveservices and eliminate wasteful and/or unnecessary duplication.Streamlining administrative functions overseas has the potentialto enhance services, decrease costs, and reduce overseas staffingnot only for State and USAID but also for the U.S. governmentas a whole.Facilities: Improving ways to provide safe, secure, comfortableand cost efficient housing to overseas staff in both organizations.

StrategicObjective

Strengthen Diplomatic and ProgramCapabilities.

StrategicGoals

Management and Organizational Excellence.

Ensure a high quality workforce supported bymodern and secure infrastructure and opera-tional capabilities.

PerformanceGoals

• A high performing, well-trained, and diverseworkforce aligned with mission require-ments.

• Modernized, secure, and high quality informa-tion technology management and infrastruc-ture that meet critical business requirements.

• Personnel are safe from physical harm andnational security information is safe fromcompromise.

• Secure, safe, and functional facilities servingdomestic and overseas staff.

• Integrated budgeting, planning, and perform-ance management; effective financial manage-ment; and demonstrated financial accounta-bility.

• Customer-oriented, innovative delivery ofadministrative and information services,acquisitions, and assistance.

Joint Management Strategic Objectives & Goals

43

Appendix 3

BTEC ACTIONS FY 2002 - FY 2004

TransformationArea

Initiative PMA GoalsSupported

USAIDEmployeeBenefits

U.S.TaxpayerBenefits

ManagementPerformanceGoals (JointStrategic Plan)

BUSINESS SYSTEMS MODERNIZATION(Technology)

FinancialManagementSystem - Approved the deploy-ment of the Agency'sfinancial system("Phoenix") to overseasmissions

Improved FinancialPerformance

An integrated systemwill provide more time-ly, reliable and usefulinformation for deci-sion-making.

Integrated system willfacilitate more timelyand accurate reportingon USAID's financialposition.

Integrated budgeting,planning and perform-ance management;effective financial man-agement; and demon-strated financialaccountability.

ObligationManagement - Launched an all-outeffort to review andbetter manage obliga-tions.

Improved FinancialPerformance

Residual funds fromexpired awards arequickly reprogrammedfor current needs andemployees have accessto improved policiesand procedures formanaging obligations.

Improves accountabilityfor Agency funds.


SimplifiedContracting -Approved reduction inthe number of formatsfor Indefinite Quantitycontracts, a frequentlyused contracting mech-anism

Reduces the amount oftime contracting offi-cers spend to createand award the con-tracts.

By streamlining andconsolidating the num-ber of IQC formats, amore efficient processresults and costs sav-ings are achieved.

Customer-oriented,innovative delivery ofadministrative andinformation services,acquisitions and assis-tance.

Cognizant TechnicalOfficer Training(CTO) - launched the develop-ment of on-line cours-es.

Strategic Managementof Human Capital

Provides flexibility toobtain immediate train-ing on contract andgrant management.

Better trained staffimproves contractmanagement andaccountability forappropriated funds.

A high performing,well-trained anddiverse workforcealigned with missionrequirements.

E-PurchasingSoftware - Approved the use ofARIBA Buyer softwarefor IT purchases

Expanded ElectronicGovernment

Reduces the amount oftime procurement offi-cial spends on IT pur-chases and improvesdelivery time to cus-tomer.

Facilitates interactionand negotiation withpotential vendors.

Modernized, secure andhigh quality informationtechnology manage-ment and infrastructurethat meet critical busi-ness requirements.

Enterprise Architecture - Approved USAID'senterprise architectureprogram plan.


Provides the informa-tion necessary to makesound decisions onnew technology.

Better planned andmanaged IT invest-ments will ultimatelyreduce costs.


Capital Planning - Approved policies gov-erning the Agency'scapital planning andinvestment control


Provides clear guidancefor assessing cost, ben-efits and risks of capitalinvestments.

Establishes manage-ment controls toensure that capitalinvestment decisionsare sound and cost-effective.


44

TransformationArea

Initiative PMA GoalsSupported

USAIDEmployeeBenefits

U.S. TaxpayerBenefits


HUMAN CAPITAL(People)

Recruitment - Approved an automat-ed recruitment tooland initiated businessprocess improvementsfor overall recruitmentprocess.



Reduces the amount oftime required to fillvacancies and improvescommunication withmanagers.

Streamlines applicationprocess and providestimely information toapplicants.

A high performing,well-trained and diverseworkforce aligned withmission requirements.

PerformanceManagement - Approved reforms tothe performance man-agement programimpacting annual evalu-ation procedures, train-ing, awards andaccountability.


Will reduce theamount of time super-visors spend preparingannual evaluation formsand place more empha-sis on counseling,career development,and achievement ofresults.

Improves employeeperformance andachievement of results.


ComprehensiveStaffingInformation- Launched the develop-ment of an Agencyweb-based staffing pat-tern system.


Reduces the time mis-sions and Washingtonbureaus spend collect-ing staffing data andprovides comprehen-sive information forworkforce planning andanalysis.

Improves accuracy andtimeliness of reportingon Agency staffing.


Human CapitalStrategy - Approved the Agency'sHuman Capital Strategyand identified short-term priorities.


Accelerated actions tofill mission critical for-eign service and CivilService positions,rationalize overseasstaffing and addressother short-term needs.

Improves the Agency'sability to build, sustainand effectively deploy ahigh-performing work-force and ultimatelyachieve programresults.


CompetitiveSourcing - Approved criteria and aprocess for consideringAgency commercialactivities for public-pri-vate competition andcompetitive sourcingpolicy that includesbusiness processimprovements.

Competitive Sourcing Business processimprovements willstreamline proceduresfor selected manage-ment functions.

Streamlines businessprocesses and providesbest value to U.S. tax-payers.


KNOWLEDGE FORDEVELOPMENT(Ideas)

Knowledge forDevelopmentStrategy - Approved the directionfor the knowledge fordevelopment strategyand action plan.


Providesmechanisms/tools forstaff to preserve andshare knowledge ondevelopment assistanceprograms.

Provides the knowledgeand information neededto improve programresults.


STRATEGIC BUDGETING(Results)

Strategic BudgetingModel - Supported the develop-ment of a strategicbudgeting model.

Strategic Budgeting Provides a frameworkfor making budget deci-sions.

Provides for bettercontrol over resourcesused and accountabilityfor results by programmanagers.


Operating ExpensePriorities - Approved operatingexpense priorities andtrade-offs.

Strategic Budgeting Ensures that operatingexpense resources areallocated to highest pri-ority requirements.

Ensures most effectiveand efficient use ofoperating expenseresources.


OTHER Customer ServiceStandards - Approved customerservice standards forWashington bureausproviding managementservices and technicalsupport to field missions.

Improves customerservice to employees inWashington offices andfield missions.

Gains measured andrealized.

Ensures that missionsand Washington officeshave the administrativeand technical supportneeded to achieve pro-gram results.

Customer-oriented,innovative delivery ofadministrative and infor-mation services, acquisi-tions and assistance.

CustomerRelationshipManagement - Approved the use of anautomated customerservice tool.

Improves customerservice through timelyfeedback mechanism.Ensures that missionsand Washington officesreceive timely and qual-ity support services.

Provides efficient andeffective use ofresources.

Customer-oriented,innovative delivery ofadministrative and infor-mation services, acquisi-tions and assistance.

45

Appendix 4-USAID Business Transformation Initiatives-Summary Charts

Challenge Response USAIDEmployeeBenefits


Relationship toPMA HumanCapital Goals


Lack of Agency humancapital plan to address:mission critical skillsgaps; workforce plan-ning and analysis; andlooming wave ofimpending retirements

Developed a compre-hensive human capitalstrategic plan to coverfiscal years 2004 - 2008approved by the BTECthat when institutional-ized and fully opera-tional will have a per-formance metricsaccountability systemto monitor effective-ness of Agency actionplan mapped to thegoals of the PMA.

Human Capital Planaddresses employeeneeds both short termand longer term thatfocuses on training;closing mission criticalskill gaps; enhancingperformance manage-ment and employeeincentives.

Ensures mission criticalskills are recruited forfaster delivery of assis-tance where needed =more lives saved, fastereconomic improvementHigher taxpayer confi-dence in USAID to fulfillits mission effectively.

Goal: Develop, analyzeand use a comprehen-sive human capital plan.


Due to downsizing ofthe 1990's, lack ofentry level staff toensure succession plan-ning and to rapidlyrespond to new pro-gram priorities

DevelopmentReadiness Initiativeestablished to hire new,Civil Service andForeign Serviceemployees above attri-tion for entry level andintern positions.

Allow more employeesto attend training with-out creating job cover-age gaps.

New talent is in placefor current and futuresuccession to ensurecontinuity of Agencyprogram operations.

Goal: Managers assurethat a continuouslyupdated talent pool isin place for current andfuture succession.


Lack of workforce torapidly respond toglobal emergencies andnew program priorities

FY '04 legislation:Foreign Service Limitedpositions are beingrecruited for rapiddeployment to missionsin need of developmentassistance.

Respond to new andemerging programrequirements withoutreassigning employeesfrom other Agency pro-grams.

Appropriate staff is inplace to effectivelycarry out the tax-payerfunded programs ofUSAID.

Goal: Sustain a signifi-cant reduction in mis-sion critical skill gaps.


Lack of training due tobudget cuts in the1990s

New training programsfor entry, mid-level andsenior levels to addressskills gaps and to devel-op new skills.

Boosts employeemorale.

Increased trainingenhances and improvesemployees' skills andcontributes to moreeffective and efficientachievement of agencystrategic objectives andperformance goals.

Goal: Assure that acontinuously updatedtalent pool is in place.


Lack of effective andefficient performancemanagement systemand employee incen-tives

New performancemanagement policiesapproved by the BTECwill streamline annualevaluation procedures.

Reduces the amount oftime supervisors spendpreparing annual evalu-ation forms; placesmore emphasis oncounseling, careerdevelopment andresults.

Employees more moti-vated to perform welland achieve results.

Goal: Performanceappraisal plans link, dif-ferentiate and provideconsequences.


Lack of monitoring &tracking system withperformance metrics todetermine success ofstrategic objectives ofHuman Capital Plan

Human ResourceAccountability systemestablished with per-formance metricsbased onAdministrator's AnnualSurvey and FederalHuman Capital Survey.Implementation plansare in development.

Enhances USAID’scapability to attract ahigh quality, diverseworkforce.

Systematic evaluationof Agency humanresources managementensures effective andefficient utilization oftaxpayer funds.

Goal: Develop and usean accountability sys-tem to make informedhuman capital deci-sions.


Gray Boxes: Completed White Boxes: On-going

Human Capital

46


U.S. TaxpayerBenefits

Relationship toPMA


"As-is" business envi-ronment of numerousantiquated, fragmented,non-standard systemsand data bases.Lack of timely, reliablebusiness information.Inability to link spend-ing decisions withfinancial results.Financial records inac-curate not auditable.Labor-intensive, paper-based systems.High cost of processingtransactions.

Replace dysfunctional"islands of automation"to achieve goal of amodern, modular, seam-lessly integrated globalbusiness platform.

Timely, accurate, reli-able reports enablesimproved businessdecision-making andreporting.

Reduces low-valuework, increases highervalue jobs for employ-ees.

Higher employee jobsatisfaction.

Better results-based deci-sion-making producesmore US benefits perdollar.Reduces paperworkresulting in labor savings.Faster transactions =faster delivery of assis-tance where needed =more lives saved andfaster economic improve-mentReduces cost of transac-tions.Higher taxpayer confi-dence in financial integrity.

Improved FinancialManagementPerformance.

Expanded e-Gov.

Modernized, secure,and high quality infor-mation technologymanagement and infra-structure that meetcritical businessrequirements

Customer-orientedinnovative delivery ofadministrative andinformation services,acquisitions, and assis-tance

State Department andUSAID have separatefinancial systems caus-ing wasteful duplicationand impeding collabora-tion envisioned byState-USAID StrategicPlan.

State/USAID JointFinancial ManagementSystem collaboration.

Improves employeecustomer service e.g.,single point of contactfor help desk and sys-tem upgrades.

On-going cost savingsachieved due to elimina-tion of redundantefforts and duplicativesystem upgrades.

$5 million cost savingsthrough FY ‘07 due touse of a common ven-dor for financial man-agement services.

Improved FinancialPerformance.

Expanded e-Gov.

Modernized, secure,and high quality infor-mation technologymanagement and infra-structure that meetcritical businessrequirements.

Slow, fragmented, nonregulatory compliant,custom designedaccounting system thatis costly to maintainand obscures decisionmaking.

IG unable to render anopinion on Agency'sfinancial statements dueto inconclusive financialdata from legacyaccounting system.

Implemented Phoenixaccounting system atheadquarters. Phoenixis a standard, commer-cial off the shelf(COTS) system that isregulatory compliant.

Timely, accurate, reli-able reports enableimproved businessdecision-making andreporting.

First Ever Clean AuditOpinion in FY '03assures taxpayers thatAgency can manage andaccount for its funds.

Significantly reducedlate payment penaltiesfor vendor payments.Interest of $18,000 waspaid in FY '03, only 14%of the amount paid in2001. In FY '04, only$1,132 in late paymentinterest was paid tovendors during first sixmonths - projectedannual savings of $127Kless than 2001.

Improved FinancialManagementPerformance

Goals:

- FFMIA compliantaccounting systems

- Agency financialreporting deadlines met

- Audit opinion onannual statements areclean

Effective financial man-agement; and demon-strated financialaccountability.

Lack of policies onmission-oriented man-agement of IT projectsand use of funds toavoid losses associatedwith failed IT projects.

New CPIC policiesand proceduresapproved and imple-mented.

Clarifies for employeesthe requirements tojustify and manage anIT project for seniormanagement approval.Provides guidance forsenior management, toselect and oversee ITinvestments.

Ensures that IT invest-ments are focused onefficient and cost effec-tive use of funds tosupport the agencymission.

E-Government

Goal: Costs, schedule,performance overruns& shortfalls < 10%

Effective financial man-agement; and demon-strated financialaccountability.

The Agency has anincreasing need toassess data in a com-mon format acrossbureaus and systems.

Developed HIV/AIDsEA as first section ofAgency EA that servesas prototype for GlobalHealth Bureau EIS.

As the Agency EISdevelops, USAID willincrease its capacity toacquire performancedata at a more detailedand comprehensivelevel within and acrossbureaus.

Increases USAID'saccess and applicationof performance data tobetter monitor the dis-tribution of resourcesin order to maximizetax payers' investmentin agency services.

Expanded e-Government

Goal: Modernizationblueprint in place.

Modernized, secure,and high quality infor-mation technologymanagement and infra-structure that meetcritical businessrequirements.

Customer-orientedinnovative delivery ofadministrative andinformation services,acquisitions, and assis-tance.


Business Systems Modernization

47

Knowledge for Development



Relationship toPMA


Improve ability to gath-er and share existingdevelopment informa-tion - to simplify accessto information- toreduce redundancy - tosupport decision-mak-ing.

Improve ability toretain knowledge fromretirees (by 2007, overhalf of all the Agency'sForeign ServiceOfficers and one-thirdof its Civil Servants willbe eligible for retire-ment.

Improve ability to sharedevelopment informa-tion and knowledgewith USAID "extendedenterprise" - other fed-eral agencies, interna-tional donors, contrac-tors and grantees,recipient countries,NGOs and PVOs.

BTEC approved KfDstrategy that establish-es roadmap for an inte-grated knowledge man-agement system togather developmentinformation and experi-ence and share it withinternal employees andexternal business part-ners.

USAID KnowledgeFairs held in 2002 and2003.

Mission KnowledgeCoordinator trainingdeveloped and pilotedwith southern Africanmissions at RegionalCenter for SouthernAfrica in 2004.

Standardized methodsand tools for knowl-edge capture, classifica-tion, retrieval and shar-ing.

Reduces time spentsearching for correctinformation.

Improves identificationand acquisition ofknowledge needed toperform effectively.

Improves ability to col-laborate with develop-ment colleagues/inno-vate and solve prob-lems more quickly.

Increases sharing ofknowledge/leveragingof solutions acrossMissions.

More efficient Agencyoperations

More re-use of knowl-edge/less redundancyof knowledge.

Increases responsive-ness to constituentneeds.

Strategic Managementof Human Capital.


Improve networkingacross formal organiza-tional boundaries.

Improve mentoring andtraining.

Improved access toexpertise and knowl-edge of employees.

Communities ofPractice launched:

–Youth CoP

–Land Markets

AdvisoryGroup

–Strategic PlanningCoP

–GIS forDevelopment CoP

–Muslim WorldOutreach CoP

–EvalWeb

–Women in

Development CoP

Easier access to knowl-edge and expertiseneeded for Agencyoperations.

More efficient Agencyoperations.

Increases responsive-ness to constituentneeds.

Same A high performing,well-trained anddiverse workforcealigned with missionrequirements.

Improve identificationof / access to existingknowledge assets andactivities.

Knowledge Inventoryestablished - an onlinecatalogue of Agencyprovided / supporteddevelopment databases,communities of prac-tice, training resourcesand other knowledgeassets.

Pilot Knowledge"Yellow Pages" -enhance facility forgathering and maintain-ing comprehensiveinventory of USAIDknowledge assets, activ-ities and expertise(under development).

Enhances awarenessand access to existingAgency knowledgeassets.

More efficient Agencyoperations.

More re-use of knowl-edge/less redundancyof knowledge.

Same A high performing,well-trained anddiverse workforcealigned with missionrequirements.


48



Relationship tothe PMA -Budget &PerformanceIntegration


Lack of systematicframework that pro-vides strategic objec-tives for developmentand diplomatic pro-gram and managementfunctions.

State /USAID JointStrategic Plan.

Performance goals inthe plan providemeaning to Agencyemployees' work con-tributions to the mis-sion of their organiza-tion.

Programs andresources betteraligned in the twoorganizations.

Joint performancestandards and targetsfor development anddiplomacy result inmore efficient use oftaxpayer dollars.

Goal:Strategic plans containlimited number ofgoals; measures usedare PARTed measures.

Integrated budgeting,planning, and perform-ance management;effective financial man-agement; and demon-strated financialaccountability.

Growing global com-plexities bring with ita concomitant need touse U.S. foreign assis-tance resources effec-tively to achieve U.S.foreign policy objec-tives.

Resource allocationdecisions need to bet-ter align developmentassistance and foreignpolicy objectives.

Strategic BudgetingModel developed thatprovides a transparentframework for theallocation of funds tocountries.

Transparent methodfor employees to seethe factors that influ-ence the resourcestheir country-of-inter-est receives.

Better performance-based, results orienteddecision-making pro-duces more US bene-fits per dollar.

Higher taxpayer confi-dence in financialintegrity.

Goal:– Senior managersmeet regularly, usingperformance informa-tion to make decisions

– Agency canshow full cost ofachieving its perform-ance goals and canaccurately estimatethe marginal cost ofdifferent levels of per-formance

Integrated budgeting,planning, and perform-ance management;effective financial man-agement; and demon-strated financialaccountability.

Lack of systematicmethods, proceduresand metrics to assessthe performance ofAgency programs.

PART reviews success-fully completed thataccurately demon-strate the relevanceand performance ofUSAID programs. Bythe end of FY ‘04, 60%of USAID’s programswill be assessed.

Disciplined approachto assessing programperformance.

Consensus-based,high-quality perform-ance measures andtargets enable man-agers and programstaff to make informedfunding decisions.

Taxpayer funds appro-priately allocated toprograms that make ameasurable and sub-stantial contributionto U.S. foreign policyobjectives.

Goal: Agency uses thePART to direct pro-gram improvementsand justify fundingrequests; less than10% receive ratings ofResults NotDemonstrated.

Efficiency measuresfor all Agency pro-grams are established.

Same

Lack of systematicmethod to determineappropriate allocationof staff to overseasmissions.

Overseas WorkforceTemplate developed.

Ensures mission staffis assigned whereneeded to effectivelyaccomplish missionprogram delivery func-tions.

More efficient use ofhuman resources.Ratio of staff to pro-gram dollars deliveredimproving.

Strategic Managementof Human Capital &Budget & PerformanceIntegration.

Same


Strategic Budgeting

Chief Financial Officer

Chief Information

Officer

Bureau for Global Health

Bureau for Africa

(AFR)

Bureau for Asia and the Near East

(ANE)

Bureau for Latin America and the

Caribbean(LAC)

Bureau for Europe

and Eurasia(E&E)

Bureau for Democracy, Conflict,

& Humanitarian Assistance(DCHA)

Bureau for Economic

Growth, Agriculture and Trade

Office of the Administrator

AFRField Missions

ANEField Missions

LACField Missions

E&EField Missions

DCHAField Offices

Global Development

Alliance SecretariatOffice of the Inspector General

Office of Equal Opportunity

Programs

Office of Small & Disadvantaged

Business Utilization

Office of Security

Bureau for Policy & Planning

Coordination

Bureau for Management

Office of the General Counsel

Bureau for Legislative and Public Affairs

Center for Faith Based and Community

Initiatives

USAID Organization Chart

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