|
Dollars in Thousands
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| 479,950 |
518,960 |
531,827 |
549,000 |
For FY 2002, USAID is requesting $549 million in Operating Expenses (OE). These funds, combined with other funding sources, such as local currency trust funds, will provide a total of $613.4 million to cover operating costs of the agency for FY 2002, compared to $612.5 million in FY 2001. These funds are required to enable the Agency to maintain the staff necessary to carry out the important national security and foreign policy activities of which the development, economic, and humanitarian programs USAID manages are a part.
Sources of Funding for Operating Expense Costs. The operating costs of USAID are financed through several sources, including new budget authority, local currency trust funds, reimbursements for services provided to others, recoveries of prior year obligations, and unobligated balances carried forward from prior year availabilities, as shown below.
Local currency trust funds available have leveled off for FY 2002, after several years of decline, with anticipated funds available of $26.6 million in FY 2002 compared to $25.6 million in FY 2001. However, after two years of intensive reviews and de-obligation of unliquidated prior year obligations, recoveries of prior year funds are anticipated to begin dropping back to historic levels. Estimated recoveries during FY 2001, available for use in FY 2002, are anticipated at a level of $19.5 million, compared to $26.1 million in FY 2000. These two major sources of non-appropriated funds are thus anticipated to drop by a net of $5.5 million from FY 2001 to FY 2002, making it critical that the full request for Operating Expenses be provided to meet expected requirements.
Funding Sources for Operating Expenses
($ thousands)
| Category |
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| Appropriated Operating Expenses |
479,950 |
520,000 |
533,000 |
549,000 |
| Rescission |
0 |
-1,040 |
-1,173 |
0 |
| Availability - New Budget Authority OE |
479,950 |
518,960 |
531,827 |
549,000 |
| Appropriation Transfers |
22,842 |
3,974 |
-134 |
0 |
| Unobligated Balance |
-280 |
-304 |
0 |
0 |
| Obligations - New Budget Authority OE |
502,512 |
522,630 |
531,693 |
549,000 |
| DA funds used for Environmental Travel |
312 |
314 |
320 |
320 |
| CSD funds used for Child Survival Travel |
0 |
0 |
125 |
125 |
| IDA funds used for southern Africa |
0 |
0 |
4,989 |
0 |
| SEED funds used for OE 1,450 |
50 |
0 |
0 |
0 |
| Local Currency Trust Funds (Recurring) |
39,144 |
30,245 |
25,553 |
26,636 |
| Local Currency Trust Funds (Real Property) |
17,878 |
3,280 |
0 |
0 |
| Reimbursements |
4,200 |
7,823 |
5,600 |
5,600 |
| Unobligated Balance - Start of Year |
20,419 |
31,257 |
56,520 |
31,739 |
| Rescission of prior year funds |
-2,402 |
0 |
0 |
0 |
| Recovery of Prior Year Obligations |
21,739 |
26,117 |
19,500 |
16,500 |
| Ending Balance - Current Year Recoveries |
-21,739 |
-26,117 |
-19,500 |
-16,500 |
| Ending Balance - Other Funds |
-9,788 |
-30,403 |
-12,239 |
0 |
| Obligations - Other Funding Sources |
71,213 |
42,566 |
80,868 |
64,420 |
| Total Obligations |
573,725 |
565,196 |
612,561 |
613,420 |
Use of Operating Expenses. The OE budget can be described most easily in terms of the 7 major uses of the funds:
- U.S. Direct Hire Salaries and Benefits
- Allocations to Field Missions and Washington Offices and Bureaus
- Field Mission Facility Relocations
- Information Technology
- Washington Rent, Utilities and Support Costs
- Staff Training
- Other Agency Costs
Shown below are the funding levels from FY 1999 through FY 2002, together with U.S. direct hire workforce levels, followed by a brief description of each category and explanation of the FY 2002 funding requirement.
($ thousands)
| Category |
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| U.S. Direct Hire Salaries and Benefits |
203,498 |
207,254 |
208,310 |
222,975 |
| Field Missions & Hq. Bureaus & Offices |
240,183 |
231,680 |
266,665 |
254,342 |
| Field Mission Facility Relocations |
23,730 |
18,498 |
7,871 |
8,000 |
| Information Technology |
54,910 |
58,042 |
72,140 |
68,000 |
| Washington Rent, Utilities, Support Costs |
35,432 |
33,771 |
39,727 |
41,737 |
| Staff Training |
4,329 |
5,800 |
6,211 |
6,331 |
| Other Agency Costs |
11,643 |
10,151 |
11,637 |
12,035 |
| Total Obligations |
573,725 |
565,196 |
612,561 |
613,420 |
| U.S. Direct Hire Workforce (Workforce levels) |
| End-of-Year On-Board Levels |
2,042 |
1,930 |
1,995 |
2,025 |
| Estimated Full-Time Equivalent Workyears |
2,083 |
1,952 |
1,941 |
2,010 |
U.S. Direct Hire Salaries and Benefits. About 36% of the OE budget goes to fund salaries and benefits of U.S. direct hire employees. Costs under this category include salaries and the Agency share of benefits, such as retirement, thrift plan, social security, and health and life insurance, for all U.S. direct hire personnel. The major reasons for the $14.7 million increase in costs over FY 2001 are:
- Full year funding of the January 2001 Federal pay raise (only 9 months funding in FY 2000);
- The impact of an anticipated January 2002 Federal pay raise;
- Higher average on-board levels projected for FY 2002 (full-time equivalent workyears);
- Implementation by the Department of State of the "hard to fill differential", which is estimated to cost USAID between $1 million and $2 million in FY 2002; and
- The fact that a larger share of the Agency's total workforce is now under the new retirement systems, which are more expensive to the Agency
Decisions as to the actual distribution of workforce and operating expenses by organization will be made after the new Agency management team is in place, at which time the information will be provided to Congress.
Allocations to Field Missions and Washington Offices and Bureaus. This category, representing the cost of maintaining field missions, plus travel, administrative supplies, and contract support for Washington offices and bureaus, comprises 41% of total OE funding in FY 2002. The major categories of costs are:
- Salaries and benefits for foreign service national (FSN) direct hire and personal service contractors (PSCs) and U.S. PSCs. For FY 2002, mission-funded salary and benefit costs will be about $94.1 million, or 37% of total funding made available to offices, bureaus and missions. Other than a small amount for OE-funded PSCs (less than $1 million) in Washington under the expanded PSC authority enacted in FY 2001, all of these costs are associated with field missions.
- Residential and office rents, utilities, security guard costs, and communications. The Agency will require about $55.3 million in FY 2002 to fund these costs, 22% of total allocations to organizational units. As with mission-funded salaries and benefits, these costs are mandatory over the short term and with given workforce levels.
- International Cooperative Administrative Support Services (ICASS), the cost of administrative support provided to missions by other U.S. Government agencies (generally the Department of State), and support provided by other agencies will cost an estimated $23.5 million in FY 2002.
- Operational and training travel. Essential travel to visit development sites, work with host country officials, and other travel of an operational nature, including travel to respond to disasters, combined with travel to obtain training, will cost $21.2 million in FY 2002.
- Supplies, materials, and equipment. This category includes the cost of replacing worn out office and residential equipment, official vehicles, information technology hardware and software, and general office and residential supplies and materials, together with the purchase of armored vehicles and other security related equipment. It is estimated that $18.8 million will be required in FY 2002 for these requirements.
- Mandatory travel and transportation costs, such as post assignment, home leave, rest and recuperation, and shipment of furniture and equipment, will cost $15.2 million.
- Contractual support, such as for voucher examiners, data entry assistance, and other administrative support provided through contracts, will cost about $10.4 million in FY 2002.
- Operation and maintenance of facilities and equipment. In FY 2002, $7.7 million is required to fund the cost of operating and maintaining facilities and equipment at overseas missions.
Field Mission Facility Relocation Costs. In addition to recurring support requirements, OE funds were used in FY 1999 through FY 2001 for field mission facility relocations - the cost of moving into new office facilities and the purchase or construction of new office facilities. The estimate for FY 2002 includes $8 million for office relocations and related security enhancements at priority security threat posts where the USAID mission is not collocated with the U.S. Embassy. (In addition, the budget request of the Foreign Buildings Operations office of the Department of State includes $50 million for new office construction of priority USAID missions where the mission will be collocated with the U.S. Embassy.)
FY 2002 Information Technology
($68.0 million - $4.1 million less than FY 2001)
($ thousands)
| |
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| Telecommunications |
3,481 |
3,133 |
7,046 |
6,873 |
| Systems Maintenance |
7,353 |
8,150 |
12,166 |
11,390 |
| Technical Support |
21,166 |
16,003 |
17,930 |
12,688 |
| Equipment Ops./Maint. |
10,230 |
11,720 |
13,234 |
12,845 |
| Info Technology Purchases |
4,618 |
3,281 |
8,000 |
11,700 |
| Other IT |
4,062 |
2,224 |
3,471 |
3,394 |
| Subtotal |
50,910 |
44,511 |
61,847 |
58,890 |
| Systems Development |
4,000 |
13,531 |
10,293 |
9,110 |
| Total IT Budget |
54,910 |
58,042 |
72,140 |
68,000 |
The USAID Information Technology (IT) budget for FY 2002 continues the modernization strategy outlined by the Agency's strategic plan and refined during the budget planning process. That strategy calls for: (1) operational support for agency staff at a level that is adequate to accomplish their work, and (2) continued emphasis on pursuing the key modernization objectives of upgrading the field network operating systems, upgrading the Agency's telecommunication networks to support vital communications, acquiring a modern procurement system, and completing implementation of the new core accounting system.
The FY 2002 USAID IT budget represents a reduction of $4 million from the FY 2001 level (from $72 million to $68 million). The FY 2002 level will permit continued implementation of the Agency's modernization efforts. In order to permit this continued implementation, funding for selected ongoing operations will be reduced. The allocation of funds between modernization and ongoing operations may require adjustment based on further review of risks to ongoing operations.
- Telecommunications. Includes ongoing costs to support bandwidth needs, the Department of State's communications system (DTS-PO) charges, and other telephone service charges.
- Systems Maintenance. Includes costs to maintain and enhance financial, procurement, human resources and other legacy computer systems. Also includes costs for maintenance of the new core accounting system which became operational in early FY 2001, as well as FY 2001 and FY 2002 residual costs for maintenance of the acquisition subsystem of the legacy new management systems (NMS). These residual costs will be incurred until the procurement system improvement project replaces the acquisition system with a modernized procurement system. This replacement is now scheduled for FY 2003 in Washington. The accounting component of the NMS system has been replaced by the new core accounting system.
- Technical Support. Includes the direct support given to Agency staff to ensure client base computer processors and applications are functioning properly and end users are supplied with assistance to ensure their effective use of those tools. This category also includes funds used to support enterprise architecture development, the IT security program for the Agency, the validation and verification program for project oversight, and the systems integration contractor management team.
- Equipment Operations and Maintenance. This category includes all costs associated with the operations and maintenance of the processing infrastructure. This includes server operations, network management services, mainframe operations, cable room operations, the network monitoring system, and maintenance costs for equipment and software.
- Information Technology Purchases. This category includes the costs for the network modernization project and the mission network operating system upgrade project. Costs for the network modernization project will allow for the upgrading of telecommunications services at 21 missions in FY 2001, and 30 in FY 2002. The mission network operating system upgrade project is slated to upgrade approximately 25 missions in FY 2001 and 45 missions in FY 2002 with a new network operating system. This effort will eliminate the risk of running an outdated, minimally commercially supported operating system. Requested funding levels will sustain the current mix of network services at missions overseas, taking into account greater bandwidth necessary to operate a replacement e-mail system, growth in internet usage for electronic government, and projected demand for web-based corporate applications at 60% of USAID missions.
- All Other Information Technology. This category includes all costs associated with use of the General Services Administration's FEDSIM to assist in technology acquisition management, and costs for space to house the technical contractor staff.
- Systems Development. This category includes the capital improvement costs associated with the two systems related modernization initiatives currently underway, namely the accounting system upgrade and procurement system upgrade, and costs for other small systems in FY 2001. The allocation of funds between systems is as follows:
| |
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| Accounting Systems |
4,000 |
12,532 |
8,100 |
2,400 |
| Procurement Systems |
0 |
999 |
700 |
6,710 |
| Total, Systems Development |
4,000 |
13,531 |
10,293 |
9,110 |
At the above funding levels the agency will be able to:
- Operate a secure core financial system and multiple feeder systems in Washington
- Address all required project milestones, and acquire a modernized procurement system with Washington implementation to begin in FY 2003; and
- Upgrade the missions' network operating systems.
FY 2001 and FY 2002 funding for the accounting system upgrade will allow for: implementing the system in Washington with interfaces constructed to feeder systems; implementing improved system security controls on the existing mission accounting systems to allow for secure transaction data; and enhancing capability for Agency-wide reporting by strategic objective.
The procurement system improvement project will be conducting requirement analysis and development of acquisition materials in FY 2001 and FY 2002. Proposal evaluation and acquisition of the new procurement system will take place in FY 2002.
Washington Rent, Utilities, and Support Costs. In FY 2002, payments for office rent, utilities, and guard services for public areas in the Ronald Reagan Building and warehouse space in the metropolitan area will cost about $34.1 million, 82% of this budget category. The remainder is also relatively fixed, being required for building and equipment maintenance and operations costs, postal fees, bulk supplies, and other general support costs for headquarters personnel. The increase reflects the higher costs from the General Services Administration for rent and security services ($1.6 million) and the impact of inflation on the cost of supplies, maintenance, and operations costs.
Staff Training. At roughly the same level as in FY 2001, centrally funded training, primarily language and leadership training, is included here. In addition, this budget funds technical training, both for program and administrative personnel, and training in automation and other Agency required skills.
About 48% of the training budget is relatively fixed. For example, language training is required for foreign service officers. Certification training for procurement officers is a requirement before warrants can be issued to contracting officers. Contract managers are required to take the contracting skills course. All of these training programs have travel requirements, which are funded from the training budget. Finally, computer training is a critical requirement, becoming ever more important as systems change and hardware and software upgrades are installed.
The balance of the training budget is used to:
- Design and implement new training programs, such as leadership training;
- Provide technical and professional training to specialists in the Agency in areas such as environment, health and population, economic growth, and human resources;
- Provide funds for relative short courses offered by local vendors (including other Government agencies) to meet specific specialized office/employee needs; and
- Cover the basic costs of operating the Agency training facilities, such as the purchase of training supplies and materials.
Other Agency Costs. This category is primarily for mandatory costs, the largest being payments to the Department of State for administrative support and dispatch agent fees, and the Department of Labor for employee medical and compensation claims relating to job related injury or death. Personnel support includes mandatory costs such as retirement travel for foreign service officers retiring from Washington, costs associated with the foreign service panels, and costs associated with retirement processing for foreign service officers.
Legislative and public affairs support includes the costs of publications such as Front Lines, support for Operation Days Work and Lessons Without Borders (LWOB), and costs associated with the Agency web site. The apparent reduction in FY 2000 was due to funding the web site through the information technology budget and deferring the LWOB program. Funding for medical, property, and tort claims has remained relatively constant, with the exception of a large payment made in FY 1999. The category "all other" is primarily for litigation support and the cost of business-related taxi fares in Washington.
Shown below are FY 1999 through FY 2002 funding requirements associated with the major categories included under other Agency costs.
($ thousands)
| Category |
FY 1999
Actual |
FY 2000
Actual |
FY 2001
Estimate |
FY 2002
Request |
| Payments to the Department of State |
4,292 |
4,622 |
4,787 |
4,935 |
| Payments to the Department of Labor |
3,195 |
3,038 |
3,191 |
3,593 |
| Personnel Support |
1,098 |
1,260 |
1,347 |
1,310 |
| Legislative and Public Affairs Support |
836 |
277 |
1,119 |
1,108 |
| Medical/Property/Tort Claims |
1,523 |
534 |
550 |
550 |
| Home Service Transfer Allowances |
412 |
271 |
400 |
350 |
| All Other |
287 |
149 |
243 |
189 |
| Total |
11,643 |
10,151 |
11,637 |
12,035 |
|
