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USAID Support Budget

USAID continues to press ahead with the management reforms aimed at strengthening program and support systems, as it faces the triple challenge of:

These challenges are complicated by more and more complex political situations that require USAID’s Civil Servants and Foreign Service Officers (FSOs) to upgrade their skills in languages, negotiations, and management at a time when the human and intellectual knowledge capital are quickly being depleted. In conjunction with the Department of State’s Diplomatic Readiness Initiative, the Agency is focusing on several closely linked efforts (see Management Improvement Section) to strengthen its current and future readiness to transition into more complex arenas of development to support U.S. foreign policy. Key to this effort is putting in place reforms that will establish innovative and streamlined business models capable of responding to increasingly complex and challenging foreign policy demands.

Agency Staffing in Crisis

• Within the next five years, 40% of the total workforce will be eligible to retire. In 2002 alone, 150 Civil Service and Foreign Service staff retired;
• The trend of a 7-12% annual retirement rate is expected to continue;
• Given this trend, more than 80% of staff turnover will occur in less than a decade;
• Recently hired staff will need several years of experience and training before they are ready for broader program and management responsibilities.

The FY 2004 request is critical in building diplomatic readiness for future years. This request:

• Supports the programs that will advance the country's national security and foreign policy objectives, and
• Enhances accountability of programs implemented in increasingly complex settings.

This budget will promote the following objectives:

• strengthen the new missions in Afghanistan and Pakistan
• hire additional U.S. direct hire HIV/AIDS specialists
• provide increased security for USAID personnel overseas
• initiate the implementation of a Human Capital Strategy Plan developed in FY 2003 that includes recruiting and training of up to 50 new Foreign Service Officers in addition to creating new training, mentoring, and coaching opportunities for new senior and mid-level managers as they take on broader responsibilities
• build the Agency's financial management capabilities, both in Washington and the field
• provide certification training programs to retool our current and future staff
• enable foreign service national staff who work in countries without a viable social security system to participate in a global retirement fund, and
• fund increases for the International Cooperative Administrative Support Services (ICASS) system, which provide administrative support to all agencies with overseas

The requested OE budget authority of $604.1 million, combined with $49.7 million from local currency trust funds and other funding sources, will provide a total of $653.8 million to cover the Agency’s projected operating expenses. This will fund:

• Salaries and Benefits
• Training
• On-going Support of current IT systems
• Security
• Other administrative costs associated with programs worldwide, including those managed by USAID and financed through International Disaster Assistance, the Economic Support Fund, the Support for East European Democracy Act, the FREEDOM Support Act, and P.L. 480 Title II Food for Peace Programs.

Direct costs of the Agency’s overseas presence, including U.S. salaries and benefits, represent over 50% of the OE costs. The Agency’s overseas presence is indispensable to the effective management of the Agency’s programs, the delivery of U.S. foreign assistance, improved situational awareness, and increased programmatic and financial oversight. It is the core of diplomatic readiness: strengthening the U.S. Government’s knowledge base and providing alternative and valuable perspectives to U.S. policymakers.

The Agency is requesting $146 million for its Capital Investment Fund (CIF) for FY 2004. This fund uses no-year authority to provide USAID with greater flexibility to manage investments in technology and facility construction. With the CIF, USAID will:

• fund Information Technology to support major systems and infrastructure improvement that have substantial impact on agency operations and results.
• develop enterprise architecture in collaboration with the Department of State, and extend its integrated core accounting system to field operations, and
• fund new office facilities co-located on embassy compounds where State will have begun construction by the end of FY 2003.

For a printable version of this section, that includes the charts and graphs from the Congressional Budget Justification FY 2004, please click here. (Note: This file is in pdf format.)

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