The Peace Corps

Performance and Accountability Report

Fiscal Year 2008

A PDF version of this report is available at www.peacecorps.gov/docs. Send feedback to the Peace Corps at the mailing address, or at www.peacecorps.gov/contactus.

The Peace Corps

Performance and Accountability Report

F i sca l Ye ar 2008

Paul D. Coverdell Peace Corps Headquarters | 1111 20th Street NW | Washington, DC 20526
Business Volunteer, Kyrgyz Republic
Contents

Message from the Director

Management’s Discussion and Analysis 1

Mission and Organizational Structure 2

Key Performance Measures 4

Analysis of Financial Statements 7

Analysis of Systems, Controls, and Legal Compliance 9

Management Assurances

Core Issues 11

Actions to Address Agency-Identified Prior Year Challenges 14

Agency-Identified Future Challenges 16

President’s Management Agenda Summary 18

Performance Section 24

Annual Performance Report 25

Financial Section 40

Message from the Chief Financial Officer 41

Financial Statements 43

Notes to the Financial Statements 47

Inspector General’s Audit Transmittal Letter 60

Auditor’s Report 63

Other Accompanying Information 76

The Inspector General’s Statement on the Peace Corps’ 

Management and Performance Challenges 77

Agency Response to the Inspector General’s Statement

on the Peace Corps’ Management and Performance Challenges 79

Summary of Financial Statement Audit and 

Management Assurances Tables 81

Appendices 84

Appendix 1: Summary of Audit Findings 85

Appendix 2: Glossary of Acronyms 86
Current and Former Peace Corps Countries Current Peace Corps Countries

Former Peace Corps Countries

AlbaniaArmeniaAzerbaijanBelizeBeninBoliviaBotswanaBulgariaBurkina FasoCambodiaCameroonCape VerdeChinaCosta RicaDominican Republic

Eastern Caribbean:

Antigua/BarbudaDominicaGrenada/CarriacouSt.Kitts/NevisSt.LuciaSt.Vincent/Grenadines

EcuadorEl SalvadorEthiopiaFederated States ofMicronesia, and PalauFijiThe GambiaGeorgiaGhana

GuatemalaGuineaGuyanaHondurasJamaicaJordanKazakhstanKenyaKiribati

Kyrgyz RepublicLiberiaLesothoMacedoniaMadagascarMalawiMaliMauritaniaMexicoMoldovaMongoliaMoroccoMozambiqueNamibiaNicaraguaNiger

PanamaParaguayPeruPhilippinesRomaniaRwandaSamoaSenegalSolomom IslandsSouth AfricaSurinameSwaziland 

TanzaniaThailandTogoTongaTurkmenistanUgandaUkraineVanuatuZambia

Current Peace Corps Countries
On behalf of the Volunteers and staff serving in the Peace Corps around the world, I am pleased to present 

the Peace Corps’ Performance and Accountability Report for fiscal year (FY) 2008. The financial and performance results of the Peace Corps are outlined in this report so the President, Congress, and the American 

people can assess the agency’s operations and accomplishments for this fiscal year.

Since 1961, this agency has partnered with 139 countries around the globe, and more than 195,000 Americans 

have served overseas promoting the agency’s mission of world peace and friendship. 

Peace Corps Volunteers share their time and talents in their communities by serving as teachers, business 

advisors, youth counselors, agriculture and environmental specialists, and health and HIV/AIDS educators, 

carrying out the agency’s three goals:

1. To help the people of interested countries in meeting their need for trained men and women

2. To help promote a better understanding of Americans on the part of the peoples served

3. To help promote a better understanding of other people on the part of Americans

These goals have not changed since 1961 when then-Senator John F. Kennedy inspired Americans to serve 

their country in the cause of peace by living and working in developing countries. 

At the end of FY 2008, 7,876 Americans were serving as Peace Corps Volunteers at 70 posts representing 76 

countries encouraging sustainable development and cross-cultural understanding at the grassroots level1

. It 

may be difficult for the Peace Corps to continue its existing number of Volunteers absent funding levels requested in the President’s FY 2009 Budget. During FY 2008, the agency made a historic return to Liberia and 

Rwanda, however, because of anticipated budget constraints, no new country assessments were conducted in 

FY 2008. Additionally, the agency does not plan to enter or re-enter any new countries in FY 2009, given the 

current funding level. 

In response to the ongoing food security crisis, the agency drew on the experience of our Volunteers and overseas staff to provide short-term and long-term assistance to those countries in the greatest need. A worldwide 

food security task force was established in April to exchange information among posts and harness agency 

resources. A strategic plan was also developed outlining the role Peace Corps Volunteers can play in education, 

agricultural development, income generation, and nutrition. 

Other initiatives launched during FY 2008 include our efforts to recruit more “baby boomers” into the Peace 

Corps and to promote volunteerism in the countries where we serve. I am happy to report that applications 

from Americans over the age of 50 were up 44 percent in FY 2008 over FY 2007. To promote volunteerism, we 

developed a toolkit for our posts and Volunteers to use in encouraging community service among host country 

nationals. The toolkits will begin arriving at posts around the world next month.

In addition, the ever-developing communications network of the Peace Corps allows the sharing of ideas immediately from the headquarters to the most distant communities around the world where our Volunteers 

serve. Our two new information technology programs, Guru and PeaceWiki, offer staff and Volunteers a forum 

for sharing ideas.

1

 The on board count for all Peace Corps Volunteers and trainees, and Peace Corps Response Volunteers, from all funding 

sources serving under the Peace Corps as of September 30, 2008, is 7,876. This number includes 254 Volunteers funded 

by the President’s Emergency Plan for AIDS Relief. Some posts cover more than one country. The on board count includes posts in which the Peace Corps is active or suspended, but not closed. 

THE DIRECTOR OF THE PEACE CORPS

WASHINGTON, D.C.
Volunteer safety and security remains the agency’s highest priority among our continuing initiatives and the 

Peace Corps continues to contribute significantly to the global fight against HIV/AIDS.

The agency achieved an unqualified (clean) audit opinion from the external auditors on the Peace Corps’ financial statements for the second consecutive year. No material weaknesses were identified by the auditors or 

otherwise within the agency. The dedicated people working in financial management across the agency, our 

operating internal control program, and our fully certified and accredited financial system are credited with 

this continuing financial success.

The Peace Corps saw an overall performance improvement during FY 2008, exceeding its performance targets in five of eight performance goals and meeting or exceeding targets in 82 percent of the agency’s 33 performance indicators. The results speak of the continued emphasis on performance management. With the 

FY 2008 performance report, the agency closes out its initial six-year strategic plan and is ready to transition 

to the newly developed strategic plan and performance indicators for 2009 through 2014. Nearly a year was 

spent developing the goals and indicators, incorporating contributions and feedback from every department 

within the Peace Corps. The new plan consists of five strategic goals and 38 indicators, representing the direction and focus for the agency for the next six years.

As we look ahead, the agency is facing challenges in the next fiscal year. We must deal prudently and effectively 

with U.S. taxpayer money in these difficult financial times. Information technology systems development efforts will be impacted by delays and may even face curtailment in some instances. Strategic cost-cutting measures are, however, being implemented at headquarters and at our posts around the world.

The accompanying financial statements in this Performance and Accountability Report submission were prepared from the Peace Corps’ financial system and processes using the most reliable and complete data available. The agency’s total assets dropped from $165.6 million as of September 30, 2007 to the current level of 

$158 million as of September 30, 2008. Budgetary resources available from all years and all sources for use by 

the agency totaled $356.2 million this fiscal year and $345 million in fiscal year 2007. The appropriated funds 

from Congress totaled $330.8 million, net of rescission, this fiscal year and $319.7 million in fiscal year 2007.

The agency’s financial and performance data for this fiscal year are both reliable and complete.

Financial improvements achieved this fiscal year and those planned for the future are addressed in the Message from the Chief Financial Officer that follows later in this report. 

I salute the hardworking, dedicated employees of the Peace Corps for everything they do to support our Volunteers. Our Volunteers represent the very best of America in continually serving the needs of others these 

last 47 years.

Ron Tschetter, Director

November 17, 2008
manag e m e nt ’ s d i scuss i o n and ana l ys i s

Business Volunteer, Benin
2 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

Mission and Organizational Structure

0

The mission of the Peace Corps is to promote world 

peace and friendship. While much has changed in 

the world since the Peace Corps’ founding in 1961, its 

mission has not. The Peace Corps’ three core goals 

are as relevant today as they were 47 years ago:

1) To help the people of interested countries in 

meeting their need for trained men and women

2) To help promote a better understanding of 

Americans on the part of the peoples served

3) To help promote a better understanding of 

other peoples on the part of Americans

The Peace Corps carries out its mission and goals 

by assisting interested countries with their development needs, by providing an effective and satisfying 

Volunteer experience for a diverse group of Americans in a safe and secure environment, and by building an operational infrastructure that efficiently 

and effectively supports Peace Corps Volunteers in 

the 21st century. 

Since the program’s inception, more than 195,000 

Americans have served as Peace Corps Volunteers 

in 139 countries throughout the world. These Volunteers foster positive relationships with host country nationals, dispel myths about Americans, and 

promote sustainable development. Upon their return, Volunteers bring messages back to the American people about life overseas, the people they have 

served, and the cultures they have experienced. The 

men and women who serve as Peace Corps Volunteers reflect the rich diversity of the United States 

and represent some of the finest characteristics of 

the American people: a generosity of spirit, a strong 

work ethic, a commitment to service, and an approach to problems that is both optimistic and pragmatic. Our Volunteers are afforded no special privileges and often live in remote, isolated communities 

where they speak local languages and learn the cultures and customs of the people they serve. During 

this process, Volunteers share and represent the 

culture and values of the American people and, in 

doing so, earn respect and admiration for the United States among people who may have never met an 

American. 

Offices throughout the agency deliver services ranging from recruitment and selection of Volunteers to 

providing training and support of Volunteers in the 

field to carrying out essential financial, technical, 

and administrative functions. Developing nations 

face significant challenges in agriculture, education, 

business development, health and HIV/AIDS, the 

environment, and youth development. The Peace 

Corps, in partnership with interested countries, 

provides skilled Americans who work to transfer 

their knowledge about these areas and build greater 

understanding between cultures. Thus, the Peace 

Corps provides practical assistance to developing countries by sharing America’s most precious 

resource—its people. The Peace Corps combines 

development with strong people-to-people relationships that Volunteers forge with host country colleagues and communities, providing a crucial foundation for peace and friendship for years to come. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 3

Management’s Discussion and Analysis

Executive

Secretariat

Office of American 

Diversity/EEO

Office of the

General Counsel

Director

Deputy Director

Overseas Posts

Office of 

Safety and Security

Office of

Volunteer Recruitment

and Selection

Office of the Chief

 Financial Officer*

Office of 

Volunteer Support

The Center for 

Field Assistance &

Applied Research

Office of the Chief

 Information Officer*

Peace Corps 

Response

Domestic 

Programs

Overseas Posts

Inter-America and 

the Pacific Region Africa Region

Overseas Posts

Europe,

Mediterranean, and 

Asia Region

Office of

Inspector General

Chief of Staff

Deputy Chief of Staff

Office of Acquisitions

and Contract

 Management*

Office of 

Management

Office of 

Private Sector

Initiatives

Office of Strategic 

Information, Research 

and Planning 

Office of

Congressional

Relations

Office of

AIDS Relief

Office of 

Communications

Office of 

Press Relations Chief Compliance

Officer

Director of 

Special Initiatives

* In their functions as Chief Financial Officer and Chief Information Officer, the incumbents 

report directly to the Director. The Office of Acquisitions and Contract Management reports 

to the Chief of Staff with a dotted line report to the Director.

Peace Corps Organization
4 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

0

Key Performance Measures

Performance Goals and Results Summary

Fiscal year 2008 marks the final year of the current strategic plan (which was revised for 2006-

2008 to better align the plan with the Peace Corps’ 

three goals and internal processes). The FY 2009 

Congressional Budget Justification includes the appropriate strategic and performance plans for this 

performance report and is available to the public 

on the agency’s website, www.peacecorps.gov/docs. 

The key strategic goals outlined in the agency’s revised strategic plan focus on:

•	 Delivering a trained and diverse group of Volunteers to interested countries to transfer tangible skills and promote cross-cultural understanding

•	 Ensuring Volunteers have an effective experience by providing relevant health, safety, and 

programmatic support

•	 Increasing the exposure of Americans to other cultures by sharing Volunteer experiences 

through a variety of avenues 

•	 Meeting the needs of applicants andVolunteers

with efficient and effective support

Thus, FY 2008 is the third and final year for the 

agency to report on its current set of performance 

goals and indicator targets outlined in the existing 

strategic plan. In FY 2008, the agency exceeded 

its target for five of its eight performance goals and 

approximately 82 percent of its 33 performance 

indicators.

Performance Goals and Status

At the end of FY 2008, 7,876 Americans were serving in 76 countries through 70 posts (posts in the 

Eastern Caribbean and Micronesia provide support 

to eight island nations) as Peace Corps Volunteers, 

promoting sustainable development and cross-cultural understanding at the grassroots level. It may 

be difficult for the Peace Corps to continue its existing number of Volunteers absent funding levels 

requested in the President’s FY 2009 Budget. The 

agency was proud to return to Rwanda with a program focusing on HIV/AIDS prevention and health 

and to re-open a program in Liberia with Peace 

Corps Response Volunteers focusing on education. 

The agency was slightly below its goal on the number of Peace Corps applicants representing diverse 

ethnicities, but great success was shown in the increase of applicants age 50 and over. The agency 

continues to seek new ways to reach the diversity 

of Americans with its recruitment and marketing 

efforts. Continuing to advertise in national print 

and electronic media added significantly to the exposure of the Peace Corps. Outreach efforts have 

resulted in establishing relationships with professional and academic associations and federal 

government agencies. These efforts have proven 

to be very successful with graduating students, 

mid-career professionals and retired employees. 

The diversity efforts resulted in more than 25 separate national and 88 regional diversity outreach 

events in collaboration with the regional recruiting 

offices.

Media outreach efforts are strong, and the agency 

again exceeded its goals for press coverage of diverse Volunteers and diverse audiences. Likewise, 

goals were exceeded for placement of public service 

announcements in minority- and diversity-geared 

media. Strong success has been shown in this area 

for the past few years.
The Peace Corps :: performance and accountability report :: fiscal year 2008 5

Management’s Discussion and Analysis

The Peace Corps uses various survey instruments 

to capture Volunteer feedback on key indicators of 

the agency’s effectiveness in delivering Volunteer 

support. The biennial Peace Corps Volunteer survey provides an important snapshot of Volunteer 

satisfaction during the same period of time worldwide. The close-of-service survey, which is given 

when Volunteers complete their service overseas, 

provides the agency with ongoing feedback from 

the field. 

There are numerous steps in the application process to become a Peace Corps Volunteer. This enables the agency to recruit and thoroughly evaluate 

applicants for specific skills and medical and suitability issues prior to approving and inviting them 

to serve as Volunteers. The application process has 

been broken down into various stages to allow the 

Peace Corps to best analyze its efficiencies. The 

agency is pleased to have exceeded its FY 2008 goal 

of response time to applicants and remains committed to streamlining the processes that enable 

Americans to obtain information, apply, join, and 

complete service as Volunteers. The agency took 

steps during FY 2008 to improve both the processes involved in addition to the data collection and 

operational monitoring of this area.

Coverdell World Wise Schools reached an unprecedented high in website hits, while the World Wise 

Windows e-newsletter boasted more than 14,500 

subscribers. The matching of Volunteers with 

school children and other correspondents (correspondence match) reached a 10-year high among 

educators and current Volunteers that are pursuing Master degrees under the Master International 

program also reached an unparalleled peak with 

218 currently serving overseas. Peace Corps Week 

2008 was a great success as well. Returned Peace 

Corps Volunteers (RPCVs) reported having conducted over 3,500 presentations, while 43 classrooms (the highest number to date) from 24 states 

participated in international phone calls with Peace 

Corps Volunteers in 30 countries. The agency continued to use a more objective and verifiable method in calculating these results. RPCV outreach activities helped carry the message of understanding 

of other cultures as they shared their stories and 

experiences with schools, community groups, and 

other organizations across the country.

Performance Reporting Procedures

The agency continued to institutionalize its performance planning and reporting processes throughout FY 2008. The Office of Strategic Information, 

Research, and Planning, created during FY 2007, 

furthered its work in ensuring greater continuity 

and reliability in reporting performance data. 

The agency also continued the practice of reviewing performance results during the mid-year budPerformance Goals Exceeded

Not met, but 

improved over 

prior year

Not Met

1.1.1 Number of Volunteers serving

1.2.1 Transfer skills and knowledge

1.3.1 Represent American diversity

2.1.1 Volunteer health care

2.2.1 Volunteer safety

3.1.1 Interactions with Americans to build cross-cultural understanding

4.1.1 Reduce response time to applicants

4.2.1 Volunteer resignation rate

Total Performance Goals 5 1 2

Performance Goals Summary
6 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

get reviews, which further reinforced the efforts 

toward aligning performance with budgeting. This 

integrated mid-year assessment allowed for the redirection of agency resources in light of challenges 

encountered or successes achieved.

The Peace Corps’ FY 2008 performance results are 

based on reliable, actual data that are complete as of 

the production of the results at the end of the fiscal 

year. Overall, the Peace Corps has made great progress in institutionalizing its performance reporting 

procedures and processes, and is well-positioned to 

provide solid results on its performance measures 

moving forward.

Education Volunteer, Moldova
The Peace Corps :: performance and accountability report :: fiscal year 2008 7

Management’s Discussion and Analysis

0

Analysis of Financial Statements

Overview

This fiscal year the external auditor again awarded 

an unqualified (clean) audit opinion on the agency’s 

financial statements that were generated from our 

certified and accredited financial system. The increase in Congressional appropriation from $319.7 

million in FY 2007 to $330.8 million, net of rescission, in FY 2008 was offset by a corresponding 

increase in costs and inflation for the agency. The 

areas of most significant change this fiscal year 

were the Fund Balance with Treasury reduction 

which generated an overall $7.6 million asset reduction and a $14.7 million increase in the agency’s 

liabilities.

Analysis of Financial Condition

The balance sheet indicates total agency assets of 

$158 million at the end of fiscal year 2008. This 

represents an overall decrease of $7.6 million over 

FY 2007 total assets of $165.6 million. The $7.7 

million decrease in the Fund Balance with Treasury was primarily due to continued strengthening 

of fund balance reconciliations. Offsetting this decrease were increases in the amount of prepaid rent 

overseas and increases to the Prepaid Volunteer 

Living Allowances because of the increased cost of 

living for the Volunteers at posts around the world 

where, in some instances, those allowances increased 35 percent. Though online “how-to” Property, Plant and Equipment (PP&E) user documentation was developed this year, and the semiannual 

verifications were continued with the posts to augment the Oracle fixed asset module that tracks and 

depreciates PP&E, continuing unresolved PP&E issues will require further management efforts during FY 2009. 

The Peace Corps assets reflected in the Balance 

Sheet are summarized in the following table (dollars in thousands):

2008 2007

Fund Balance 

with Treasury $ 117,964 $125,652

Property, Plant and 

Equipment 32,458 32,657

Prepaid Volunteer 

Living Allowances 4,304 3,984

Other Assets 3,242 3,263

Total Assets $ 157,968 $ 165,556

FY 2008 Assets by Type

Fund Balance with Treasury: 75%

Prepaid 

Volunteer Living 

Allowances: 3%

Other Assets: 2%

Property, 

Plant and 

Equipment: 

20%
8 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

The Peace Corps had total liabilities of $216.7 million at the end of fiscal year 2008 as reported on 

the balance sheet and summarized in the following 

table (dollars in thousands):

The increase in liabilities of $14.7 million from the 

FY 2007 level was primarily due to a $6.8 million 

increase in Other Employment Related Liability 

for unfunded severance liabilities, a $3.1 million increase in the Accounts Payable balance, and a $2.9 

million increase in Employee Benefits as calculated 

by the Department of Labor.

Limitations of the Principal Financial 

Statements

The principal financial statements have been prepared to report the financial position and results 

of operations of the Peace Corps, pursuant to the 

requirements of 31 U.S.C.3515 (b). While the statements have been prepared from the books and records of the entity in accordance with generally acceptable accounting principles for Federal entities 

and the formats prescribed by the Office of Management and Budget (OMB), the statements are, in addition to the financial reports, used to monitor and 

control budgetary resources which are prepared 

from the same books and records.

The statements should be read with the realization 

that they are for a component of the U.S. Government, a sovereign entity.

2008 2007

Employee Benefits $ 119,302 $ 116,450

Non-Entity Funds 31,947 32,597

Unfunded FECA 

Liability 25,582 24,236

Other Employment 

Related 14,436 7,590

Accounts Payable 12,393 9,337

Unfunded Annual 

Leave 7,600 7,310

Other Liabilities 5,418 4,432

Total Liabilities $ 216,678 $ 201,952

FY 2008 Liabilities by Type

Employee 

Benefits: 55%

Non-Entity 

Funds: 15%

Other 

Employment 

Related: 7%

Unfunded 

Annual Leave: 3%

Accounts 

Payable: 6%

Other Liabilities: 2%

Unfunded FECA

Liability: 12%
The Peace Corps :: performance and accountability report :: fiscal year 2008 9

Management’s Discussion and Analysis

0

Analysis of Systems, Controls, and Legal Compliance

Management Assurances

Federal Managers’ Financial Integrity Act

The Federal Managers’ Financial Integrity Act of 

1982 (FMFIA) requires agencies to establish accounting and administrative controls to include 

program, operational and administrative areas, in 

addition to accounting and financial management. 

The implementation of internal accounting and administrative controls must provide reasonable assurance that (i) obligations and costs are in compliance with applicable law; (ii) funds, property, and 

other assets are safeguarded against waste, loss, 

unauthorized use, or misappropriation; and (iii) 

revenues and expenditures applicable to agency 

operations are properly recorded and accounted for 

to permit the preparation of accounts and reliable 

financial and statistical reports and to maintain 

accountability over the assets. The FMFIA establishes overall requirements for internal control and 

requires that the agency head evaluate and report 

annually on the control and financial systems that 

protect the integrity of Federal programs (Section 

2 and Section 4 of FMFIA, respectively). OMB Circular A-123, Management’s Responsibility for Internal Control, implements the FMFIA and defines 

management’s responsibility for internal control 

in Federal agencies. OMB Circular A-127, Financial 

Management Systems, prescribes policies and standards for agencies to follow in developing, operating, evaluating, and reporting on financial management systems. 

Internal Control within the Peace Corps

The senior assessment team established during 

FY 2006 and led by the Chief Financial Officer 

continues to conduct oversight of the Peace Corps’ 

internal control program. Senior assessment team 

meetings, conducted at least quarterly, monitored 

progress toward completion of the past fiscal 

year audit recommendations for the agency’s 

significant deficiencies. Again in FY 2008, offices 

throughout the agency conducted risk assessments 

for their business areas and identified no material 

FY 2008 Annual FMFIA Assurance Statement

The Peace Corps assessed the effectiveness of the 

internal controls to support effective and efficient 

operations, reliable financial reporting, and 

compliance with applicable laws and regulations in 

accordance with the Federal Managers’ Financial 

Integrity Act of 1982 (FMFIA) Section 2 and 

OMB Circular A-123. Based on this assessment, 

the Peace Corps can provide reasonable assurance 

for FY 2008 that its internal control over the 

effectiveness and efficiency of operations, financial 

reporting, and compliance with applicable laws 

and regulations was operating effectively and no 

material weaknesses were found in the design or 

operation of the internal controls.

The Peace Corps conducted its assessment of 

whether the financial management systems conform to government-wide financial systems requirements in accordance with FMFIA Section 4 

and OMB Circular A-127, Financial Management 

Systems. Based on this assessment, the Peace Corps 

can provide reasonable assurance that its financial 

management systems are in compliance with the 

applicable provisions of the FMFIA Section 4 and 

OMB Circular A-127 for FY 2008.

Ron Tschetter, Director

November 17, 2008

Thomas Bellamy

Acting Chief Financial Officer

November 17, 2008
10 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

weaknesses. Further, managers throughout the 

agency prepared annual assurance statements 

attesting to the adequacy of internal controls and 

identified no material weaknesses within their 

areas. The assurance statements were based 

on the managers’ personal knowledge of dayto-day operations, existing controls, and other 

related management reviews and evaluations. 

During this fiscal year, the Office of the Inspector 

General conducted reviews, audits, inspections, 

and investigations. Internal control testing 

conducted this fiscal year focused on the accuracy 

of the accounts payable unbilled accruals to further 

support the agency’s financial statement balances 

and potential testing areas across the agency were 

expanded. 

Summary

The Peace Corps is proud to have received an unqualified (clean) financial audit opinion on its financial statements for FY 2008 as in the past fiscal 

year. The agency’s internal controls and financial 

management systems meet FMFIA and other regulatory objectives and the agency is pleased to submit its annual assurance statement on compliance. 

Environment Volunteer, Guatemala
The Peace Corps :: performance and accountability report :: fiscal year 2008 11

Management’s Discussion and Analysis

The Peace Corps provides technical assistance to 

developing countries by sharing America’s most 

precious resource—its people. The close interaction between Peace Corps Volunteers and local individuals has allowed the Peace Corps to establish 

a record of service that is admired and recognized 

around the world.

At the end of FY 2008, 7,876 Americans were serving as Peace Corps Volunteers at 70 posts in 76 

countries (posts in the Eastern Caribbean and 

Micronesia provide support to eight island nations) and fostering sustainable development and 

cross-cultural understanding at the grassroots 

level. Currently, about 20 percent of the Volunteers 

are serving in nations with predominantly Muslim populations. Volunteers work in the areas of 

agriculture, business, education, the environment, 

health and HIV/AIDS, and youth development, incorporating cross-cutting themes such as information and communications technology and the role 

of women into their work. In addition to transferring skills to host country nationals and promoting 

cross-cultural understanding between Americans 

and other peoples, service in the Peace Corps also 

provides Americans overseas experience. Returned Peace Corps Volunteers also contribute to 

America’s legacy of service by offering their time 

and skills to community volunteer programs or organizations around the country and through Peace 

Corps programs such as Peace Corps Response, 

Fellows/USA, and other outreach activities. 

In FY 2007, the Peace Corps embarked on three strategic initiatives: Recruitment and Outreach; Measuring Success and Impact; and Volunteerism at Home 

and Abroad. Those initiatives continued through FY 

2008, with successes realized in all three.

Recruitment and Outreach

The agency rolled out a number of efforts in the 

area of strategic recruitment and outreach. The 

50+ population represents a strategic growth opportunity for the Peace Corps. Individuals in this 

population already volunteer in society at high rates 

and have a desire to share their expertise and skills. 

The Peace Corps established strong relationships 

among other federal agencies where approximately 

18 percent of the workforce are expected to retire in 

the next two years (this represents nearly 300,000 

highly-qualified individuals). Within six months, 

this initiative attracted over 4,000 interested parties to our web pages and created a national outreach plan through Volunteer match. The national 

outreach plan has attracted more than 90,000 

viewers in this cohort to our web pages with almost 

1 percent starting an application. A strong relationship continues with AARP. Additionally, the agency 

attracted significant numbers of mid-career professionals and retirement-transitioning individuals through associations, conventions, tradeshows 

and various professional journals. We realized a 44 

percent increase (1197 versus 833) in 50+ applications over FY 2007. 

The Peace Corps will continue to be strategic and 

creative in increasing recruitment efforts at small 

colleges and universities. Using acquired research 

has allowed the agency to nurture working agreements with campus organizations to increase our 

on-campus presence and attract greater numbers 

of qualified prospects to informational sessions. Relationships with groups like the Historically Black 

Colleges and Universities and the American Association of Community Colleges help with these efforts 

and have lead to initiatives such as the Peace Corps 

Baccalaureate and Peace Corps Prep programs.

Measuring Our Success and Impact

During FY 2008, the Peace Corps placed significant emphasis on evaluating the impact of the work 

0

Core Issues

The Peace Corps was again recognized 

by Business Week magazine as one of the 

top 50 best places to launch a career.
12 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

of the Volunteers. Pilot field evaluation programs 

were initiated in Mali, Armenia and the Dominican Republic to obtain feedback from host country 

nationals relative to their understanding of Americans (Core Goal 2) and the outcomes achieved in 

three program specific areas: Education, Business 

and Health and HIV/AIDS (Core Goal 1).

The results of these pilot field evaluations, as reported on page 14, were used to refine future field 

evaluation efforts scheduled to take place during 

FY 2009, 2010, and 2011. These results will be reported in the corresponding performance and accountability reports in subsequent years.

The work the agency has done to measure its success and impact largely influenced the development 

of the Peace Corps’ FY 2009 to FY 2014 Strategic Plan. Development of the plan required nearly 

11 months of work, with contributions from nine 

separate teams of staff, managers, and stakeholders (totaling over 100 individuals). The plan will be 

the guiding force for the agency over the next six 

years as it works to communicate its outcomes and 

impacts.

Volunteerism at Home and Abroad 

Many Peace Corps Volunteers are already involved 

in promoting volunteerism and some are teaching 

young people in their towns and villages about the 

importance of community involvement through a 

service learning approach. This essentially ensures 

that clear learning goals, a planning structure and 

feedback loop that reflects on the volunteer activities is carried out. To assist posts in deepening efforts on volunteerism and service learning, in FY 

2008 the agency created a Volunteerism Action 

Guide. The guide covers, for example, everything 

from training Volunteers to identifying project 

and learning objectives to creating action plans. 

Through intentional planning and use of a service 

learning approach where appropriate, Peace Corps 

Volunteers can leave a greater legacy of communities organizing themselves to meet local needs.

In addition to the three initiative areas introduced by 

the Director in FY 2007, other core issues include:

Volunteer Safety and Security

Balancing the need to keep Volunteers as safe as 

possible while maintaining the effectiveness of the 

Volunteer experience is one of the greatest challenges facing the Peace Corps. The Office of Safety and 

Security works diligently with the overseas posts 

to integrate safety and security training into every 

stage of the Volunteer’s service. From application 

to close of service, Volunteers receive the best information available about safety risks and how they 

can minimize those risks. While Volunteer service 

is not without risks and Volunteers take on much 

of the responsibility for their own safety, the Peace 

Corps does have an extensive, well-established 

support system geared toward Volunteer safety and 

security. 

HIV/AIDS Initiative

The Peace Corps continues to contribute significantly to the global fight against HIV/AIDS. Peace 

Corps Volunteers, by living and working at the 

grassroots level in communities and speaking the 

local language, are uniquely suited to reach populations most in need of HIV/AIDS prevention and 

care services. The Office of AIDS Relief continues 

to provide agency-level policy guidance; overall 

leadership; and general supervision, direction, and 

coordination of Peace Corps’ HIV/AIDS activities, 

including the agency’s participation in the President’s Emergency Plan for AIDS Relief (PEPFAR). 

The Peace Corps continues to be a valuable participant in the PEPFAR program, with 254 PEPFARfunded Volunteers serving in 11 of PEPFAR’s 15 

focus countries. In addition to posts in the focus 

countries, 15 other Peace Corps posts implemented 

PEPFAR funded activities in FY 2008. 

Food Security

In response to the ongoing food security crisis, the 

agency is drawing on the experience of our Volunteers and overseas staff to offer short-term and 

long-term assistance to those countries most great-
The Peace Corps :: performance and accountability report :: fiscal year 2008 13

Management’s Discussion and Analysis

ly impacted. A worldwide food security task force 

was established in the spring 2008 to exchange information and harness agency resources. A strategic plan was also developed outlining the role Peace 

Corps Volunteers can play in education, agricultural development, income generation, and nutrition. 

In mid-October the agency held a food security 

summit with representatives from the private sector, other federal agencies, nongovernmental organizations and foundations to seek better methods 

of collaboration. 

Overall

The Peace Corps’ mission and efforts around the 

world continue to be as important now as they were 

47 years ago. The agency will continue to strive to 

operate at its optimum level to ensure Americans 

are given the opportunity to serve as Peace Corps 

Volunteers to carry out the agency’s mission of 

world peace and friendship.

Peace Corps received Equal Employment 

Best Practices Recognition on August 

27, 2008, at the Examining Conflicts in 

Employment Law Conference in Chicago, 

Illinois, for substantive best practices 

in both Special Emphasis Programs and 

Compliant Process Implementation

Youth Volunteer, Micronesia
14 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

Institutionalizing Performance 

Management, Evaluation and Measurement, 

and Strategic Management of Information

Performance Management

In 2008, the agency named its first Performance 

Improvement Officer in response to OMB guidelines, and instituted quarterly reviews of performance. 

During FY 2008, the Office of Strategic Information, Research, and Planning (OSIRP) kicked off 

the development of the 2009–2014 Strategic Plan 

including the finalization of a Peace Corps Logic 

Model delineating how the use of agency resources 

leads to the formulation of activities and how these 

lead to the outcomes necessary to fulfill the agency 

mission. In addition, through the involvement of 

the complete organization, future performance indicators were strengthened and the strategic plan 

was completed for submittal early in FY 2009. 

Evaluation and Measurement

Several steps were taken during FY 2008 to further 

evaluate and measure the reach and impact of the 

Peace Corps. The agency’s biennial Volunteer survey included two new questions to measure Volunteers’ impact in the area of Core Goals 2 and 3. 

The agency also formulated evaluation plans to 

measure the impact of the agency’s work in the 

transfer of skills to host country individuals, communities, and organizations (Core Goal 1) and the 

impact of our Core Goal 2 activities relative to promoting a better understanding of Americans on the 

part of the people we serve.

Pilot evaluation studies were implemented at Peace 

Corps posts in Armenia, the Dominican Republic, 

and Mali to expand our measurement of the impact 

on Core Goals 1 and 2. OSIRP worked with these 

three posts to pilot structured interview protocols 

in combination with analysis of existing performance data collected by posts and through the biennial Volunteer survey. 

Although the collection of data from host country 

nationals (HCN) is ongoing, responses to date are 

very positive. Data from 153 HCN individuals received as of October 30, 2008, indicates that 72 percent of host family members and 85 percent of HCN 

counterparts reported after living and working with 

Peace Corps Volunteers, that their views about people from the United States were more positive. In 

addition, 96 percent of HCN counterparts were satisfied—58 percent being very satisfied—with changes in their community or organization that resulted 

from their work with the Peace Corps. 

Also in FY 2008, Peace Corps conducted a case 

study of Peace Corps Volunteers currently serving 

in Jamaica. This case study found that 100 percent 

of the Volunteers in the study actively carried out 

Core Goal 3 activities during their Peace Corps 

service. In addition, the vast majority of American friends and family (over 80 percent) who have 

stayed in touch with, or who have visited Jamaica 

Volunteers, reported they have significantly increased their own knowledge of Jamaicans and Jamaican culture.

Strategic Information Management

The agency developed new policies and processes 

to better manage its data and information. Agencywide working groups collaborated to develop 

common definitions and glossaries. Care was taken 

during the strategic plan development process to 

ensure proper data and information sources and 

methods were documented and communicated 

throughout the organizations. OSIRP and the Office of the Chief Information Officer worked closely 

together on several projects designed to better access, report, and manage data and information.

0

Actions to Address Agency-Identified Prior Year Challenges
The Peace Corps :: performance and accountability report :: fiscal year 2008 15

Management’s Discussion and Analysis

New Strategic Plan 

The strategic plan for FY 2009–2014 presents five 

strategic goals the Peace Corps seeks to achieve. 

All of the goals link back to the agency’s focus on 

achieving its three core goals and carrying out the 

Peace Corps’ mission, with special emphasis on areas the previous plan did not fully address. 

The agency’s development of its new strategic plan 

for FY 2009–2014 was a very inclusive effort that 

reached out for input from hundreds of staff members at headquarters and all posts throughout the 

world. The agency created a steering committee 

and various working committees to formulate 

the specific goals and identify appropriate performance indicators. Agency managers and staff participated directly with the formulation and vetting 

of the strategic plan, resulting in a document that 

is inclusive and representative of the entire Peace 

Corps organization. 

Moreover, the agency consulted numerous stakeholders for feedback on the strategic direction and 

goals of the Peace Corps, including members of 

Congress, OMB, and other U.S. government agencies. Select nongovernmental organizations who 

partner with the Peace Corps also provided their 

perspectives. 

The 2009–2014 Strategic Plan provides more emphasis on the programming and training needed to 

successfully implement grass roots development at 

the community level in the countries where Peace 

Corps serves. The plan also places emphasis on 

measuring how the Peace Corps promotes a better understanding of Americans on the part of the 

people we serve by obtaining feedback from host 

country nationals via field evaluation of their perspectives.

Volunteer Delivery System Modernization

The agency continued to work on specific areas 

through the Volunteer Delivery System (VDS) 

Steering Committee. Topics studied and addressed 

include strategic recruitment issues (such as the 

50+ group) and aligning expectations of applicants, 

posts, staff, and host countries.

In addition, two teams were created to work under 

the strategic direction of the VDS Steering Committee. One team was charged with holistic analysis and recommendations to improve the VDS processes and the other team was tasked with bringing 

together key staff to resolve tactical issues quickly.
16 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

Positioning the Peace Corps for Growth and 

Impact in the 21st Century

Implementation of the agency’s new 2009–2014 

Strategic Plan will present a multitude of challenges as described below. The themes within the 

agency’s new strategic plan center around creating 

the proper environment for the Peace Corps to best 

grow and enhance the worldwide impact through 

the work of the Volunteers. The process in which 

the plan was developed focused on including input 

from all organizations within the agency, as well as 

building upon the work done over the past few years 

in agency strategic planning. Key areas that guided 

the creation of the five strategic goals include:

•	 Continued Sustainable Implementation of

Peace Corps Goals and Programs

•	 Strategic Recruitment, Selection and Placement of Volunteers (including the outreach to 

experienced and diverse Volunteers)

•	 Comprehensive and Responsive Support to

Volunteers (safety and security, health care, 

technical and other support to foster Volunteer 

effectiveness)

•	 Effective Domestic and Overseas Post Leadership and Management 

•	 Institutionalizing Performance and Impact

Assessment 

Impact Evaluation 

The Peace Corps will be implementing field evaluation studies at nine posts during FY 2009 to continue the efforts to assess the impact of our work on 

the transfer of skills to host country individuals, 

communities, and organizations and the promotion 

of a better understanding of Americans on the part 

of the people that we serve. Implementation of this 

work in a consistent and valid manner will be challenging in the multicultural environments where 

we serve.

The Office of AIDS Relief also developed an evaluation study, planned for FY 2009, to focus on the impact of the life skills HIV/AIDs prevention activities of Peace Corps Volunteers.

Evaluation of the impacts of our Core Goal 3 activities will be examined through the implementation 

of Returned Peace Corps Volunteer focus groups 

and survey in FY 2009.

Integrating Organizational Performance 

Management 

The Peace Corps will continue to integrate the performance of all of its organizations in order to meet 

the targets that have been established as part of the 

new strategic plan. The implementation of periodic 

reviews that integrate budget and performance at 

an organizational level will be imperative to ensure continuous improvement and continuity of 

efforts in strengthening the organization for future 

growth.

Growth in the Number of Volunteers

The call for more Volunteers is a common theme 

and the agency has worked hard to position the 

Peace Corps for future growth. At the same time, it 

is also important to recognize the need to maintain 

the effectiveness of the Volunteers. Thus, the agency 

is looking at what staffing and infrastructure need 

to be in place to handle any increases in the number 

of Volunteers that (given proper funding levels) the 

agency may undertake. 

The agency received over 13,000 applications during FY 2008, and there still exists a great demand 

among developing countries for trained men and 

women. The Peace Corps continues to assess its 

recruitment, placement, training, and post management activities in order to meet the needs of 

requesting host countries, provide optimal impact 

in the communities it serves, as well as prepare for 

possible future growth.

0

Agency-Identified Future Challenges
The Peace Corps :: performance and accountability report :: fiscal year 2008 17

Management’s Discussion and Analysis

Our 2009-2014 Strategic Plan calls for the Peace 

Corps to grow to 8,500 Volunteers at the end of 

FY 2010 and to 10,000 Volunteers by the end of FY 

2011. This growth must be accomplished in a manner such that the level of support provided to our 

Volunteers results in highly effective service for our 

host country partners. 

Our challenge is to fortify our total Volunteer Delivery System with an added emphasis and focus 

on strengthening training and programming field 

staffs, training materials and tools, and any necessary infrastructure such as the preparation of sites 

and host families, so the work of the Peace Corps 

continues to fulfill the needs of our host countries 

in a high quality manner and provides high value to 

the Volunteers and the people they serve. 

Financial Challenge

The Peace Corps will experience a major financial 

challenge if worldwide inflation rises and the U.S. 

dollar depreciates against major currencies compared to what the Peace Corps has planned for 

FY 2009. Overseas costs, from salaries to utilities 

to office rents, continued to escalate throughout FY 

2008, while currency exchange losses compared 

to initial planning estimates totaled as much as 

$9 million. 

The agency continually seeks more effective and 

less costly ways to prepare country directors and 

other personnel for their assignments at posts 

around the world. 

Summary

The Peace Corps’ mission and its core values are as 

vital today as they were in 1961 and, while our challenges will continue to evolve, the agency is well positioned to adapt and meet these challenges as we 

position the agency for continued growth and impact in the years to come. 

Education Volunteer, Armenia
18 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

The Peace Corps continually strives to improve its 

management and performance and assess its management and performance within the context of the 

President’s Management Agenda (PMA). The PMA 

initiatives pave the way for improvements within 

the agency and facilitate the adoption of best practices from other agencies. The dedicated work of 

the Peace Corps’ financial management and performance staff strives to meet or exceed the PMA goals 

and standards and the agency’s own management 

initiatives. Presented here are the areas where the 

most progress was made during this fiscal year for 

each PMA initiative.

Strategic Management of Human Capital

The Peace Corps uniquely operates under a termlimiting hiring authority where staff members are 

limited to five years of regular employment, generally through two consecutive 30-month appointments, with an additional 30 months available for 

up to 15 percent of the staff (generally referred to 

as “third tours”). The Peace Corps Director has authority to grant an additional one-year extension. 

Under these circumstances, the maximum possible term of employment is 8.5 years. The agency 

continually strives to improve its human resource 

management (HRM) within this operating context 

consistent with PMA goals. 

The ongoing implementation of an automated human capital management system introduced as 

a pilot program in FY 2006 remains vital to this 

agency. Many of the HRM functions were earlier 

automated and streamlined, reducing repetitive reporting tasks, reducing our operating costs, and allowing information to be shared more quickly and 

efficiently between offices. Other enhancements 

include specialized orientation training for automated system users, conducting surveys to determine efficiency of the automated system, conducting town hall events to explain functioning of the 

automated system and to answer questions and receive feedback, developing a management communication plan to get support and market the systems 

capabilities to the staff, and maintaining a personnel database of former Peace Corps employees to 

facilitate future reemployment. Additionally, this 

system provides the applicant intake tool for the 

Leadership Development Academy for potential 

future leaders launched in FY 2006 and now in its 

third year of successful operation.

During FY 2008, HRM introduced another automated human capital management system module, 

the performance optimization module, which was 

piloted in two Peace Corps offices. This module 

allows supervisors and employees to review current position descriptions, automates the creation 

and acceptance of online performance plans, and 

automates the feedback of accomplishments between managers and subordinates with improved 

accountability. 

The agency continuously incorporates improvements to maximize HRM performance and to provide the very best customer support. 

Commercial Services Management

The Peace Corps strives to continually improve 

operations and has outsourced many functions to 

private firms and to other government agencies in 

past years. Past outsourcing initiatives resulted in 

a 2:1 ratio of outsourced positions to Peace Corps 

employees. The agency currently operates effectively with a full-time staff of approximately 1,000 

employees at the headquarters, regional recruiting 

offices and at posts in the 76 countries in which our 

Volunteers serve. This full-time staffing is augmented by approximately 2,000 contractors working domestically and overseas. Annually renewable 

personal service contracts are in effect for most 

overseas staff functions. 

During FY 2008, several major internal business 

process improvement efforts were initiated. The 

most notable effort is the Peace Corps Medical 

0

President’s Management Agenda Summary
The Peace Corps :: performance and accountability report :: fiscal year 2008 19

Management’s Discussion and Analysis

Supply Improvement Initiative. This effort will 

improve the acquisition process for pharmaceuticals and medical supply items and features a more 

decentralized approach using regional suppliers. 

This initiative is expected to reduce the cost of 

pharmaceuticals as well as the acquisition process 

cost. This effort will continue through the middle 

of 2009. Other business process improvement efforts include a new training delivery approach for 

overseas staff using computer-based technologies, 

a new acquisition process for overseas short-term 

assistance contracts, and a paperless contracting 

environment for domestic operations. These efforts 

will also continue into FY 2009. 

Improved Financial Performance

For the second consecutive year, an unqualified 

(clean) audit opinion was earned by the Peace Corps 

during the FY 2008 financial statement audit. Dedicated, concentrated efforts by all those who work in 

financial management at the posts and within the 

headquarters over this past fiscal year sustained 

this audit opinion and further increased the level of 

financial management performance throughout the 

agency. No material weaknesses were identified by 

the financial audit or otherwise identified within the 

agency. 

Direct financial management improvement efforts 

for the posts this fiscal year include the implementation of OdyWeb and WebEx (Internet-based communications service to share information) training for the post cashiers and cashier supervisors. 

OdyWeb is an application for posts to enter personal service contract nonrecurring bonuses and 

adjustment payments that increases the speed and 

accuracy of payments to overseas contractors and 

eliminates redundant data entry. The on-site post 

cashier training that began during FY 2007 was 

redesigned as WebEx training this fiscal year, and 

phase two of the overseas cashier supervisors training is currently under development. The obligation 

funds documentation matrix developed last fiscal 

year was revised to benefit the posts and a newsletter was implemented. Increased use of electronic 

funds transfer (EFT) has been the focus of both 

overseas and domestic operations and 81 percent 

of the posts are receiving vendor payments by EFT. 

Allowance payments were converted to EFT for 64 

percent of all eligible posts and third party (consolidated) payments were converted to individual 

EFT payments. The posts now have the capability 

to generate an EFT confirmation report to provide 

documentation to the vendor or recipient bank. 

Those posts where the agency’s 50+ age Volunteers 

are working will benefit from new expertise in the 

headquarters with knowledge of Medicare-related 

questions and problems.

Other important financial performance improvements instituted this year include providing online 

“how-to” Property, Plant and Equipment (PP&E) 

user documentation, and continuing to conduct 

semiannual PP&E verifications with the posts 

(continuing unresolved PP&E issues, however, will 

require further management efforts during FY 

2009); improving the reconciliation of the State 

Department transactions to further strengthen the 

accounts payable; and further improvement of the 

Funds Balance with Treasury reconciliation procedures. Through the open obligation reviews, we 

identified $5.3 million by closing or adjusting open 

obligations in current and prior years (expired) 

funds and worked more closely with the contracting staff to deobligate funds as quickly as possible. 

A formal receiving process was implemented across 

the agency, which validates the receipt of items 

and identifies where processing bottlenecks occur. 

More stringent processing protocols now require 

that payments be processed within five days of receipt and reduced the time required to credit posts 

for check cancellations/credits from 30 days to less 

than 10 days and the time required to record payments processed by the embassy from 30 days to 

less than five days. There was a reduction in errors 

on the purchase card and travel card payments and 

Certifying Officer responsibilities for the purchase 

cards were enhanced by conducting monthly sampling and identifying certain high risk offices where 
20 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

100 percent reviews are performed monthly. We 

converted 41 years of official service descriptions 

for the Returned Peace Corps Volunteers (RPCVs) 

from microfiche and paper to a text searchable 

digital format to expand data search opportunities and respond more quickly to requests from 

RPCVs. This year’s tax discrepancy percentage was 

less than .0001 percent, which is a major improvement over past years and many of the other Federal 

agencies. 

Internal control testing conducted this fiscal year 

focused on the accuracy of the accounts payable 

unbilled accruals to further support the financial 

statement balances and expanding the potential 

testing areas across the agency. Internal control 

testing from the past fiscal year to strengthen the 

reliability of personal service contract payment 

processing was reinforced this year by a full review 

of all personal service contract payments. Payment 

processing for personal service contracts was further strengthened through the use of a new contract 

template that captures more payment related information and standardizes information submitted 

from all the posts.

Ongoing efforts to improve financial policy and dissemination continued this fiscal year, as well as the 

maintenance and revision of the Peace Corps manual and handbooks and documentation for functions and processes. Other training efforts over the 

past fiscal year contributed to the improvement in 

financial performance through online provision of 

undelivered orders/accounts payable correction 

and reversal entry training, formal presentation of 

appropriation law training, and training in contract 

management and procurement processes. 

Expanded E-Government

The Peace Corps continues to integrate electronic 

government principles to foster a citizen-centered 

government with a greater volume of service at 

a lower cost. Our constant challenge is to ensure 

that investments in information technology (IT) 

are addressing the right agency needs while providing for system security, scalability (workload 

increases/expansion), and integrity. This is critical 

since agency funds are limited and best used for the 

Peace Corps overseas programs. Our e-government 

initiatives are geared toward increasing productivity and efficiency, performing better accounting of 

our resources, and creating a technical infrastructure allowing the agency to change and grow without significant investments in technology. Progress 

in systems maturation has driven the agency from a 

technology-challenged operating environment to a 

high-tech enabled, collaborative agency.

Consistent with current governmentwide management reforms, the Peace Corps will increase its use 

of IT and e-government services to strengthen the 

quality, efficiency, and timeliness of recruiting, assessing, and selecting prospective Volunteers. We 

will also utilize our IT assets to effect a better outcome overseas, while more effectively managing 

our assets, increasing our safety and security, and 

strengthening our programming and training. The 

Magellan program was launched in 2008 to provide 

a more robust and connected global IT infrastructure, worldwide information search capability, a 

data warehouse for better decision making, and an 

enterprise content management solution for better 

oversight of our digital assets. The Magellan Global 

Infrastructure effort began in 2008 with the technology refresh and re-architecture of the agency’s 

Inter-American and Pacific region. Due to funding 

constraints, the project will extend into 2009. The 

Europe, Mediterranean and Asia region, then Africa, will be refreshed one year at a time over the next 

two years. 

The Volunteer Delivery System (VDS) provides a 

continuous cycle of Volunteer recruitment, screening, and placement that allows the Peace Corps 

to deliver the best suited Volunteers for a host 

country’s needs. The Peace Corps has strategically aligned its VDS with the agency’s mission, 

modernizing its processes to speed up the delivery 

process and to reach different diverse groups more 
The Peace Corps :: performance and accountability report :: fiscal year 2008 21

Management’s Discussion and Analysis

effectively. Beginning with the modifications required for the agency’s 50+ Initiative (recruitment 

of Americans to serve in the Peace Corps who are 

50 years of age and older), the VDS redesign will 

include improvement of processes for recruiting, 

staging (initial volunteer training), medical clearance, and effectively managing expectations of applicants and Volunteers. 

Development of PropManII, the agency’s new 

Property, Plant and Equipment system was delayed from 2008 to 2009 to allow for developing 

the Peace Corps Volunteer Reporting Tool. The 

agency’s IT Investment Review Board determined 

that the Peace Corps Volunteer Reporting Tool 

produced greater savings and impact for the agency 

than PropManII.

The latest Volunteer Information Database Application version allows headquarters staff and posts 

to better manage their Volunteer information using 

a standard system deployed in 2008. This system 

includes enhancements to mobility and operates on 

a laptop, tablet, or personal digital assistant.

The Peace Corps completed the upgrade of the 

Crime Incident Reporting System (CIRS) that provides a secure, timely, standard electronic solution 

for posts to report specific crimes against Volunteers to all necessary offices. This system saves time, 

enhances safety and security, and provides accurate 

and consistent information. CIRS allows headquarters and posts’ staff to input, update, query, and 

retrieve data from one central set of data; provides 

protection of Volunteer identifying information and 

maintains confidentiality of information; allows 

frequent synchronization between the posts and the 

headquarters; provides an email alert process that 

communicates the receipt of new crime reports; 

and provides the Crime Statistics and Analysis Unit 

with the ability to download the most current data 

in the headquarters’ centralized data system. 

In late 2007 and 2008, the Peace Corps released 

four solutions for collaboration. GURU is the agency’s expert-to-expert system that facilitates the best 

practice sharing of information for staff around the 

world. PeaceWiki is the agency’s collective web site 

for Volunteers to share experiences, ideas, and best 

practices. Web Conferencing was implemented to 

enhance and reduce the cost of global training and 

collaboration. Post Based Websites were implemented to allow the overseas posts to create their 

own websites, based on a standard template, using 

local language with post specific messages. Also, an 

electronic discovery solution was implemented for 

the General Counsel during FY 2008.

Budget and Performance Integration

The Integrated Planning and Budget System is the 

primary budget and performance tool for the Peace 

Corps. This system is consistent with the planning 

process defined by the Government Performance 

and Results Act and is tied to the PMA. The system 

aligns the Congressional planning and budget cycle with the major business life cycles of the Peace 

Corps (i.e., the field project designs of the posts and 

the Volunteer recruitment and delivery cycles of 

the agency). The Peace Corps continues to reap the 

benefits of the system reengineering efforts conducted during FY 2006 such as the enhanced planning features, the internal monthly budget execution reviews, and the quarterly execution reviews. 

The Office of Strategic Information, Research, and 

Planning (OSIRP), created during FY 2007, continues to be a driver toward improving budget and 

performance integration for the agency. OSIRP led 

the development of the strategic plan for FY 2009-

2014, a process that began with the development 

and utilization of a logic model. By linking resources to activities, outputs and outcomes, the agency 

took steps down the path to better link its performance with its resources. Recently, a joint exploration effort of the OSIRP and the Chief Financial 

Office has been proposed to continue the process of 

formally correlating costs to the agency strategic 

goals and capturing costs by program areas. Weighing the costs of system reengineering to accommo-
22 The Peace Corps :: performance and accountability report :: fiscal year 2008

Management’s Discussion and Analysis

date these major changes versus the benefits to be 

gained from the venture is a prime consideration 

for this potential effort.

The agency remains committed to the improvement of performance, the validity of budget information and justification, and to managing within 

the framework of the President’s Management 

Agenda. Performance throughout the agency will 

be further enhanced as our systems efforts continue to mature. We constantly seek new ways to 

make our programs more effective and efficient and 

keep the focus clearly on the vital mission of the 

Peace Corps.

Health Volunteer, Benin
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P e rf o rmanc e s e ct i o n

Health Volunteer, Uganda
The Peace Corps :: performance and accountability report :: fiscal year 2008 25

Performance Section

Annual Performance Report

0

The Peace Corps’ mission of promoting world peace 

and friendship is accomplished through the work 

of its Volunteers as they transfer skills and build 

cross-cultural understanding in partner countries 

throughout the world. The agency operates in host 

countries that have invited the Peace Corps to assist in meeting their development needs. Through 

their work, Peace Corps Volunteers build bridges of 

understanding between Americans and host country nationals. 

The Peace Corps uses performance goals and measures that focus on providing skilled Volunteers to 

meet host country needs, supporting the health and 

safety of the Volunteers, and ensuring that Volunteers reflect the face of America to host countries. 

The measures also look at the efficiency and effectiveness of efforts to recruit, train, and support 

Volunteers as they carry out their work, as well as 

the exposure of Americans to other cultures due to 

the Peace Corps. These goals and measures provide 

a clear picture of the agency’s most important performance results.

In FY 2008, the Peace Corps continued to make 

significant strides in institutionalizing its performance reporting process through the efforts of 

the Office of Strategic Information, Reporting and 

Planning (OSIRP), which was created in FY 2007. 

This year also marks the final year under the current strategic plan, and OSIRP led the agency’s efforts in the development of the new plan, which is in 

place for FY 2009 to FY 2014.

Office of Inspector General Audits 

and Evaluations

The Peace Corps’ Office of the Inspector General 

(OIG) regularly conducts audits and evaluations 

concerning the effectiveness of programs that support Peace Corps Volunteers. Auditors focus on 

fiscal accountability and effectiveness of internal 

controls over Peace Corps resources. Evaluators 

analyze the program operations of the Peace Corps 

at both overseas posts and domestic offices. These 

audits and evaluations analyze compliance with 

laws, regulations, and Peace Corps policies, in addition to identifying internal control weaknesses and 

best practices. 

During FY 2008, the OIG issued 13 audit reports 

and three program evaluation reports concerning 

14 countries. The audit reports related to administrative and financial operations at overseas posts. 

Other audits performed included the annual audits 

of the agency’s financial statements and a Federal 

Information Security Act review of selected agency 

information systems.

The evaluations conducted included a program 

evaluation in Albania, an evaluation on the safety 

and security of Volunteers, and an evaluation on 

the medical clearance system for Volunteers. Research for these two comprehensive evaluations 

involved travel to 17 countries worldwide. Reports 

from these audits and evaluations are submitted to 

Management, which then takes appropriate action 

to address any concerns that have been identified. 

Internal Management Assessments

In an effort to focus on the efficiency and effectiveness of Peace Corps operations, the agency continued its program of Internal Management Assessments (IMA) begun in FY 2007. The goal of the 

IMA program is to partner with offices and posts 

to strengthen and improve management and post 

operations. In FY 2008, IMAs were conducted in 

South Africa, Namibia, Samoa and the headquarters 

Center for Field Support and Applied Research. 

Performance Reporting Process

FY 2008 saw the agency reap the benefits of previous years work in institutionalizing the performance reporting process. Written documentation 

and procedures put in place during FY 2007 ensured that the agency was able to deal with any staff 
26 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

turnover and report consistent results.

The Peace Corps’ FY 2008 performance results are 

based on reliable, actual data that are complete as 

of the production of the results at the close of the 

fiscal year. Overall, the Peace Corps has made great 

progress in institutionalizing its performance reporting process and is well-positioned to provide 

solid results on performance measures.

Performance Summary

FY 2008 is the third and final year for the agency 

to report on the current set of performance goals 

and indicator targets outlined in the strategic plan. 

In FY 2008, the agency met or exceeded targets for 

five of the eight performance goals and approximately 82 percent of the 33 performance indicators. 

In some cases results were better than anticipated; 

in other areas results fell short of the goal. A caseby-case analysis is included in the Annual Performance Results section. The agency will continue to 

work to achieve its strategic goals and to serve the 

Volunteers, host country nationals, and the American people.

Performance Goal and Brief Description

Performance Goal

Against Target

Performance Indicators Against Target 

Exceeded Met Not Met

1.1.1 Number of Volunteers serving Not Met 1 2 1

1.2.1 Transfer skills and knowledge Exceeded 3 – 1

1.3.1 Represent American diversity Not Met 4 – 1

2.1.1 Volunteer health care Exceeded 3 – –

2.2.1 Volunteer safety Not Met 2 – 1

3.1.1 Interactions with Americans to build

cross-cultural understanding Exceeded 3 1 1

4.1.1 Reduce response time to applicants Exceeded 5 – –

4.2.1 Volunteer resignation rate Exceeded 2 1 1

Total Performance Goals = 8 5 Exceeded

3 Not Met

23 4 6 Total: 

33

Performance Indicators Summary

Education Volunteer, Botswana
The Peace Corps :: performance and accountability report :: fiscal year 2008 27

Performance Section

The Peace Corps has four strategic goals that align with the agency’s three core goals (as set forth in the Peace 

Corps Act). Although many of the agency’s activities cut across all of the three core goals, there are close 

relationships between specific core goals and certain strategic goals. The following table shows these 

relationships.

Core Goals

Goal 1) To help the people of interested countries in meeting their need for trained men and women

Goal 2) To help promote a better understanding of Americans on the part of the peoples served

Goal 3) To help promote a better understanding of other peoples on the part of Americans 

Correlation of Peace Corps Goals and Strategic Goals

0

Core Goals

Strategic 

Goals

Performance 

Goals Correlation

Goal 1 1, 2, 4 1.1.1

1.2.1

More Volunteers in the field provide more opportunities to assist interested countries 

and broaden the impact of the agency.

2.1.1

2.2.1

The effectiveness of Volunteers to assist communities overseas is enhanced when they 

are safe and healthy.

4.1.1

4.2.1

Getting Volunteers to the field and having them serve their full term enhances the 

opportunities for positive impact.

Goal 2 1, 2, 4 1.1.1

1.3.1

By increasing the number of Volunteers overseas, and having a diverse representation of 

America, a better understanding of Americans by the people they serve is expanded.

2.1.1

2.2.1

The effectiveness of Volunteers to accomplish Goal 2 is enhanced when

they are safe and healthy.

4.1.1

4.2.1

Getting Volunteers to the field and having them serve their full term enhances the ability 

to fulfill Goal 2.

Goal 3 3 1.1.1

1.3.1

By increasing the number of Volunteers serving overseas, the base of persons who will 

promote a better understanding of other peoples to Americans is expanded.

3.1.1 Helping promote a better understanding of other peoples on the part of Americans is 

achieved by sharing Volunteer experiences and stories in a variety of venues.

Correlation of Peace Corps Core and Strategic Goals
28 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Strategic Goal 1

Assist interested countries with their identified needs by gradually expanding the number of trained Volunteers serving overseas; broadening the impact on the lives of men and women in their host communities 

by transferring tangible skills; and helping to promote an understanding of Americans, including representing American diversity, at a rate consistent with annual funding. 

Outcome Goals:

1.1 Assist interested countries with their identified needs by gradually expanding the number of trained Volunteers serving overseas from 7,733 in FY 2004 to 8,000 in FY 2008, at a rate consistent with annual 

funding.

1.2 Broaden the impact of Volunteers on the lives of men and women in their host communities by transferring tangible skills, as measured by increasing Volunteers reporting in the Peace Corps’ close-of-service 

survey that they were “adequately” to “exceptionally” effective in transferring knowledge and skills to 

members of their host community, from 80 percent in FY 2006 to 82 percent by FY 2008. 

 1.3 Represent American diversity in Peace Corps host communities by increasing numbers of Peace Corps 

applicants representing diverse ethnicities and people 50 and over by 4 percent, from FY 2005 level of 24 

percent to 28 percent by FY 2008. 

Performance Goal 1.1.1. 

Increase the number of Peace Corps 

Volunteers to 8,000 by FY 2008.

Results and Analysis:

At the end of FY 2008, 7,876 Americans were serving in 76 countries through 70 posts as Peace Corps Volunteers encouraging sustainable development and cross-cultural understanding at the grassroots level. Challenged by inflationary costs overseas and continued currency losses, the agency found it difficult to maintain 

its goal Volunteer levels. Furthermore, specific events and infrastructure in some countries (Kiribati, Georgia 

and Bolivia) created conditions where the Peace Corps chose to suspend operations to ensure the safety of 

the Volunteers. The agency has, in addition, broadened its international reach with the arrival of Volunteers 

beginning duties in Ethiopia which opened in FY 2007, and the historic return of the Peace Corps to Rwanda 

and Liberia. 

0

FY 2008 Goal FY 2008 Actual

8,000 7,876

Results

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

7,533 7,733 7,810 7,749 8,079

Performance Indicators 1.1 FY 2008 Target FY 2008 Results

i. Number of new country entries 2 2

ii. Percentage of Peace Corps focus countries participating in

the President’s Emergency Plan for AIDS Relief (PEPFAR) 100% 100%

iii. Number of Peace Corps Response Volunteers (all funding sources) 100 56

iv. Overall visits to website 8.8 million 10.7 million

Annual Performance Results
The Peace Corps :: performance and accountability report :: fiscal year 2008 29

Performance Section

Results and Analysis:

In accomplishing the agency ’s goals for modest expansion, the Peace Corps continues to respond to the numerous countries requesting a Peace Corps presence by opening new programs that focus on meeting the unique 

needs of the host country. In FY 2008, the Peace Corps placed Volunteers in Ethiopia. Peace Corps returned 

to Liberia and Rwanda as well. 

The Peace Corps continues to be a valuable participant in the President’s Emergency Plan for AIDS Relief 

(PEPFAR) with all 11 Peace Corps posts of the 15 PEPFAR focus countries receiving PEPFAR funds. 2 During 

the 2008 fiscal year, Peace Corps received PEPFAR funding to cover 216 Volunteers, including Peace Corps 

Response Volunteers. This year Peace Corps also reopened its program in one of the focus countries, Rwanda. 

The 35 trainees arriving in Rwanda in January 2009 will be assigned to an HIV/AIDS project; 20 of these 

eventual Volunteers will be funded by PEPFAR. In addition to posts in the focus countries, 15 other Peace 

Corps posts implemented PEPFAR-funded activities in FY 2008. 3

Peace Corps Response sends Returned Peace Corps Volunteers (RPCV) on short-term assignments to assist 

with critical needs such as the HIV/AIDS global pandemic as well as strategic efforts in disaster preparedness and mitigation in countries which are consistently prone to natural disasters. In FY 2008, Peace Corps 

Response Volunteers served in nine countries: Eastern Caribbean (which comprises St Lucia, St Kitts, St Vincent, Dominica, Grenada and Antigua/Barbuda), El Salvador, Guyana, Malawi, Namibia, Panama, the Philippines, Uganda and Zambia. Of the total of 56 Volunteers who served, 21 supported HIV/AIDS programs in six 

countries. Peace Corps Response also provided funding for the deployment of 28 Peace Corps Volunteers in 

Peru to an earthquake-affected region for a two-week disaster response project. 

The agency continues to innovate and expand online tools in order to communicate and share with the American public. New content is continuously added to the website to engage potential applicants. Some areas bringing in new visitors during FY 2008 include the new “teens” site, RSS (really simple syndication) feeds, and online marketing efforts. In addition, the Office of Communications and the Office of Volunteer Recruitment and 

Selection have developed unique content to provide more information to applicants on unique and in-demand 

scarce areas (such as certain areas of agriculture, health care, and advanced education). Finally, the agency’s 

50+ content has also been drawing more visitors.

2

 PEPFAR has identified 15 focus countries. The Peace Corps has posts in 11 of these focus countries—

Botswana, Ethiopia, Guyana, Kenya, Mozambique, Namibia, Rwanda, South Africa, Tanzania, Uganda, and 

Zambia

3

 Other Peace Corps posts implementing PEPFAR-funded activities include: Belize, Cameroon, Dominican Republic, Eastern Caribbean, El Salvador, Ghana, Honduras, Jamaica, Lesotho, Madagascar, Malawi, 

Nicaragua, Peru, Swaziland, and Ukraine

0
30 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Performance Goal 1.2.1.

Incrementally increase the percentage of respondents to the Peace Corps close-of-service survey 

reporting the effectiveness of transferring 

knowledge and skills to members of their host 

community as “adequately” to “exceptionally” 

to 82 percent by FY 2008. 

Results and Analysis:

One of the Peace Corps’ main objectives is for Volunteers to transfer skills to members of the communities in 

which they live and work in order to make a meaningful and sustainable difference in the lives of those they 

serve. Volunteers are instructed on methods to build the capacity of the host country nationals with whom they 

work and to help teach solutions that will be sustainable within the community. According to the Volunteers 

surveyed upon completion of their service, the percent of Volunteers stating they have effectively transferred 

knowledge and skills to members of their host community increased to 89 percent.

Performance Indicators 1.2 FY 2008 Target FY 2008 Results

i. Number of individuals assisted by Volunteers (e.g. students, farmers, 

community members, as reported via the prior year’s project status 

report annual review 2,196,000 2,111,037

ii. Number of service providers trained by Volunteers, e.g. teachers, health 

clinic workers, agriculture extension agents, as reported via the prior 

year’s project status report annual review 115,400 159,402

iii. Number of community-initiated, Volunteer-led, Partnership Program projects 505 596

iv. Increase the extent Volunteers report that they have helped host country 

nationals gain a better understanding of the United States and its people, as 

reported by the Peace Corps close-of-service survey

92% 97%

Results and Analysis:

The Center for Field Assistance and Applied Research, through its annual project status review process, compiles annual data and reviews observations related to programming and training as submitted by the field. The 

Peace Corps accomplishes its goal of transferring skills to people of interested countries by working to build 

the capacity of men, women, girls, and boys so they can manage their own development in a sustainable manner. Volunteers help build capacity by increasing the knowledge, improving the skills, and promoting behavior 

change of individuals and families in the countries they serve. Capacity-building efforts are targeted toward 

individuals, service providers, and organizations, who can, in turn, teach fellow community members. While 

falling short of its target for the numbers of individuals assisted, the target for the number of service providers 

trained by Volunteers was reached. FY 2008 also saw the development of new tools to better collect and report 

data related to Volunteers reach and impact.

In Fiscal Year 2008, the Office of Private Sector Initiatives (OPSI) exceeded targets for its performance indictors. Through innovative marketing and leveraging the use of online technologies, OPSI continues to bring 

in private sector support that directly assists the work of Volunteers overseas.

FY 2008 Goal FY 2008 Actual

82% 89%

Results

FY 2006 FY 2007

83% 86%
The Peace Corps :: performance and accountability report :: fiscal year 2008 31

Performance Section

Performance Goal 1.3.1.

Incrementally increase the number of 

Peace Corps applicants representing diverse 

ethnicities and people 50 and over by 

4 percent from an FY 2005 level of 24 percent 

to 28 percent by FY 2008.

Results and Analysis:

Although the overall target was not met, the agency significantly increased recruitment performance over the 

last fiscal year. Overall applications increased 16 percent in FY 2008 over the same period last year. This is the 

highest number of applications this period since 2004. The number of 50+ applications also increased in this 

period, an incredible 44 percent, from 833 to 1197. Additionally, applications from ethnic minority populations increased 21 percent relative to the performance in FY 2007.

Performance Indicators 1.3 FY 2008 Target FY 2008 Results

i. Percentage of applicants over the age of 50 8.0% 9.2%

ii. Percentage of applicants of diverse ethnicities 21% 18.1%

iii. Total visitors to website who access minority recruitment pages 

and/or scarce skills, family pages 450,000 593,782

iv. Number of articles placed in newspapers and other media that 

focus on diverse Volunteers and/or target diverse audiences 185 196

v. Total number of public service announcements placed in minority 

and diversity geared media 4,000 8,509

Results and Analysis:

Recruitment and outreach was a major initiative by the agency during FY 2008. Applications increased overall, as well as in the key areas of minorities and 50+ groups. Increased applications among the 50+ population 

can be attributed to new national outreach initiatives to associations and federal agencies as well as targeted 

media placements. In addition, 50+ recruiters in the regional offices held information sessions specifically to 

attract this audience.

Despite an increase in national and regional efforts (25 and 88 events respectively) and a 1 percent increase 

from FY 2007, the percentage of applicants from diverse ethnicities is short of its goal by 2.9 percent. While 

targeted national events attract large diverse populations, the regional events do not enjoy similar attraction. 

Another hindrance is limited funding for national diverse media advertising support. 

FY 2008 Goal FY 2008 Actual

28% 27%

Results

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

25.9% 26.1% 24.5% 24% 24%
32 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Strategic Goal 2

Ensure a quality Volunteer experience by increasing the quality of health care and managing the safety and 

security risk factors in each of the communities where the Volunteers live. 

Outcome Goals:

2.1 Increase the percentage of Volunteers indicating feeling “adequately” to “exceptionally” satisfied with 

their in-country health care from FY 2002 level of 75 percent to 82 percent by FY 2008.

2.2 Increase the percentage of Volunteer Survey respondents indicating they feel safe most of the time (“usually safe” to “very safe”) where they live from FY 2002 level of 86 percent to 88 percent by FY 2008.

Performance Goal 2.1.1.

Incrementally increase the percentage of 

respondents to the biennial Peace Corps Volunteer survey indicating feeling “adequately” 

to “exceptionally” satisfied with their incountry health care from the FY 2002 level 

of 75 percent to 82 percent by FY 2008.

Results and Analysis:

The health, safety, and security of each Volunteer is the Peace Corps’ highest priority and is reflected as such 

in the agency’s planning. The FY 2008 close-of-service Volunteer survey results demonstrate that the vast 

majority of Volunteers continue to be satisfied with the health care they receive while they live and work in 

their communities around the world.

Performance Indicators 2.1 FY 2008 Target FY 2008 Results

 i. Percent of Volunteers medically evacuated to Washington, D.C., 

reporting they are satisfied with their medical evacuation care as 

measured by the medevac survey

90% 98%

 ii. Percent of Volunteer respondents reporting feeling “adequately” to 

“exceptionally” prepared, both physically and mentally, to meet the 

challenges of Peace Corps service as measured by the Peace Corps 

close-of-service survey

90% 93%

 iii. Incidence of falciparum malaria in Africa region 

(measure is in cases per 100 Volunteer/trainee years) <6.0 <2.2

Results and Analysis:

Peace Corps Volunteers serve in challenging environments throughout the world, and the health of Volunteers 

is one of the agency’s top priorities. In extreme circumstances, a Volunteer may need to be medically evacuated to Washington, D.C., and the satisfaction of these Volunteers with the care they receive continues to be 

a focus of the agency. During FY 2008, 117 Volunteers were brought to headquarters to receive this care. The 

data from the medevac survey given by medevaced Volunteers reported that the agency exceeded its goal by 

achieving a 98 percent satisfaction rate. This performance is indicative of the effort the medical field support 

unit provides to the Volunteers on medevac status. Accommodations for Volunteers are arranged by the mediFY 2008 Goal FY 2008 Actual

82% 92%

Results

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

NA 87% NA 92% NA
The Peace Corps :: performance and accountability report :: fiscal year 2008 33

Performance Section

cal field support team and shuttle bus service is provided to and from Peace Corps headquarters each weekday, 

as well as transportation to grocery stores and pharmacies throughout the week. In addition, a lounge with 

Internet access and telephone service is provided for their use. 

The Peace Corps focuses on equipping Volunteers so they have the tools they need to deal with the changes they 

will face in their communities. This training on physical and emotional health is a focus of pre-service training 

and is reinforced throughout a Volunteer’s term of service. The close-of-service survey results from FY 2008 

report that the vast majority of Volunteers are satisfied with the preparation they receive during training to 

meet the mental and physical challenges of Peace Corps service. Furthermore, Volunteers in malaria-prone 

areas are thoroughly trained on the proper protocols and the importance of taking their malaria prophylaxis, 

which accounts for an incidence rate that is well below the target level.

Performance Goal 2.2.1.

Incrementally increase the percentage of respondents to the biennial Peace Corps Volunteer survey indicating that Volunteers feel safe 

most of the time (“usually safe” to “very safe”) 

where they live by 2 percent from FY 2002 level of 86 percent to 88 percent by FY 2008.

Results and Analysis:

The safety and security of the Volunteer is the agency’s highest priority. Safety and security information is incorporated into all aspects of Volunteer recruitment, training, and service. Although the survey response indicator missed the target, the Office of Safety and Security, as well as the regional and post staff, continue to emphasis this area in training and support. General security events can impact an individual’s perceptions about 

one’s own safety and on several occasions during FY 2008 Peace Corps had to take extraordinary measures 

to proactively deal with Volunteer safety. Events that occur in distant locations such as evacuations, attacks, 

or natural disasters can influence the perception of safety even when the individual is not at any greater risk. 

According to our incident data, Volunteers experienced a slight decline in incidence rates from 2006 to 2007, 

but data for 2008 would indicate an increase in crime incidence rates for Volunteers. This increase seems to be 

across all countries and in several crime categories, especially theft. This could be a reflection of a deteriorating international economic climate coupled with issues related to food insecurity among other factors. 

Moving forward in FY 2009–2011, the Office of Safety and Security has proposed a new model to monitor 

progress. Beginning in 2009, the Office will be gathering baseline data on areas where Volunteer action would 

likely impact patterns of victimization. Throughout 2010 and 2011, training programs and interventions will 

focus on the elements identified in the baseline data for an overall goal of reducing reported crime rates in targeted areas by 5 percent over 5 years.

FY 2008 Goal FY 2008 Actual

88% 85%

Results

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

NA 88% NA 88% NA
34 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Performance Indicators 2.2 FY 2008 Target FY 2008 Results

 i. Percentage of posts receiving safety and security report 

recommendations annually 85% 66%

 ii. Percent of Volunteer respondents reporting the safety and security 

portion of their pre-service training as “adequate,” “effective” or 

“very effective” as measured by the biennial Volunteer survey

85% 96%

 iii. Percent of Volunteer respondents reporting they were “somewhat,” 

“considerably” or “completely” satisfied with support provided by 

Peace Corps staff for safety and security, as measured by the biennial 

Volunteer survey

85% 91%

Results and Analysis: 

Balancing the need to keep Volunteers as safe as possible while maintaining the integrity of the Volunteer 

experience is one of the greatest challenges facing the Office of Safety and Security. The Office of Safety and 

Security works hard to integrate safety and security training into every stage of the Volunteer’s service. From 

application to close-of-service, Volunteers receive the best information available about safety risks and how 

they can minimize those risks. While Volunteer service is not without risks and Volunteers must take on much 

of the responsibility for their own safety, the Peace Corps does have an extensive, well-established support 

system geared toward Volunteer safety and security. 

The agency’s goal was to have Peace Corps Safety and Security Officers (PCSSO) provide safety and security 

reports and recommendations to 85 percent of all posts in 2008. This goal was not met as PCSSOs carried out 

51 visits to 45 posts, representing approximately 66 percent of Peace Corps posts. Several factors hampered 

PCSSOs’ ability to reach all of their posts—staffing, scheduling, and travel all presented challenges during 

FY 2008.

The Peace Corps captures data on the biennial Volunteer survey related to success in areas of safety and security. Three of the goals related to Volunteer safety and security are dependent on Volunteer respondents. 

Environment Volunteer, Panama
The Peace Corps :: performance and accountability report :: fiscal year 2008 35

Performance Section

Strategic Goal 3

Increase the exposure of Americans to other cultures by sharing Volunteer experiences and stories in numerous venues, including the classroom, special events, community visits, and through electronic means, 

as well as engaging those who have completed their service in ongoing Peace Corps-supported Volunteer 

opportunities.

Outcome Goal:

3.1 Increase the number of interactions with Americans to further the Peace Corps’ goals through Peace 

Corps supported activities to 25,844 (aggregate of indicators i. through iv.) by FY 2008.

Performance Goal 3.1.1.

Increase the number of interactions with 

Americans to further the Peace Corps’ goals 

through Peace Corps supported activities 

to 22,606 in FY 2008.

Results and Analysis:

This indicator is a composite of the regional recruiting offices’ RPCV participation number and the Peace 

Corps Week participation number and, the goal was exceeded for FY 2008. Coverdell World Wise Schools has 

reached an unprecedented high in website hits, while World Wise Windows e-newsletter is boasting more than 

14,500 subscribers. The matching of Volunteers with school children and other correspondents (correspondence match program) has reached a 10-year high in educators; current Volunteers that are pursuing Master 

degrees under the Master International program are also at an unparalleled peak, with 218 currently serving 

overseas, and 200 on campuses prior to their overseas service. Peace Corps Week 2008 was a great success 

as well. RPCVs reported over 3,500 presentations while 43 classrooms (the highest number to date) from 24 

states participated in international phone calls with Peace Corps Volunteers (PCVs) in 30 countries.

Performance Indicators 3.1 FY 2008 Target FY 2008 Results

i. RPCV interactions with the American pubic in communities and 

on campuses nationwide during Peace Corps Week and throughout 

the year through activities supported by the Peace Corps 11,050 11,171

ii. Donors supporting Peace Corps Volunteer projects through 

private sector contributions 6,200 8,915

iii. U.S. educators connecting with Peace Corps Volunteers through the Peace 

Corps’ Coverdell World Wise Schools correspondence match program 5,000 4,900

iv. Fellows/USA participants serving in communities nationwide 356 417

v. Visits per year to the Peace Corps’ Coverdell World Wise School website 

that contains lesson plans, Volunteer stories, and other educational 

resources for use in the classroom and beyond

1.45 Million 2.4 Million

FY 2008 Goal FY 2008 Actual

22,606 25,403

Results

FY 2006 FY 2007

21,377 21,748
36 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Results and Analysis:

Coverdell World Wise Schools reached an unprecedented high in website hits, while the World Wise Windows 

e-newsletter boasted more than 14,500 subscribers. The matching of Volunteers with school children and other correspondents (correspondence match program) reached a 10-year high in educators; current Volunteers 

that are pursuing Master degrees under the Master International program are also at an unparalleled peak 

with 218 currently serving overseas, and 200 on campuses prior to their overseas service. Peace Corps Week 

2008 was a great success. RPCVs reported over 3,500 presentations while 43 classrooms (the highest number 

to date) from 24 states participated in international phone calls with PCVs in 30 countries.

The correspondence match program continued to accomplish its goal of enrolling an increasing number of 

educators during FY 2008. Targeted marketing to educators in middle and high schools, world language classrooms, and in community education groups expanded the program’s reach. Pre-service matching of nominees 

and invitees to teachers continued to add to this year’s increase by facilitating greater connections between 

the Volunteer and domestic teachers.

For Fellows/USA participants serving in communities, 117 percent of the target was achieved. This accomplishment was attained through improved marketing/awareness of available programs and new programs. 

This upward trend will likely continue.

Podcasts of language lessons and weekly audio stories continue to drive traffic to the website. Fresh content, 

such as new slide shows and lesson plans, advertised through monthly e-newsletters, keep the educator and 

lesson plans pages on the top 10 pages visited on the World Wise Windows website.

Business Volunteer, Mexico
The Peace Corps :: performance and accountability report :: fiscal year 2008 37

Performance Section

Strategic Goal 4

Increase the retention level of Americans interested in the Peace Corps by better facilitating the process of 

obtaining information, applying, joining, and completing their Volunteer service.

Outcome Goals:

4.1 Improve the responsiveness of the Volunteer application process by streamlining the application process 

and decreasing the Peace Corps’ response time to applicants by 7 percent from 156 days (aggregate of 

below indicators of timeliness) in FY 2005 to 146 days in FY 2008.

4.2 Maintain the overall 12-month Volunteer’s resignation rate (with resignation officially defined as a decision made by a Volunteer/trainee that he/she no longer wishes to continue in Peace Corps service) at 10 

percent or less.

Performance Goal 4.1.1.

Decrease the Peace Corps’ response time 

to applicants by 2 percent from 154 days 

in FY 2005 to 146 days in FY 2008.

Results and Analysis:

There are numerous steps in the application process to become a Peace Corps Volunteer. This enables the 

agency to recruit and thoroughly screen applicants for skills and medical and suitability issues prior to approving and inviting them to serve as Volunteers. This application process was broken down into the various stages 

for which the Peace Corps has processing responsibilities to best analyze its efficiencies. The agency is pleased 

to have exceeded the FY 2008 goal of response time to applicants by approximately 30 days. The agency remains committed to streamlining the processes that enable Americans to obtain information, apply, join, and 

complete service as Peace Corps Volunteers.

Performance Indicators 4.1 FY 2008 Target FY 2008 Results

i. Number of days from receipt of application to nomination 64 56

ii. Number of days from nominee’s completed health status review 

to medical kit sent 7 3

iii. Number of days from receipt of completed medical kit to 

medical qualification 30 18

iv. Number of days from medical qualification to invitation 45 40

v. Percentage of applicants who submit their Volunteer applications 

over the Internet 86% 96%

FY 2008 Goal FY 2008 Actual

146 days or less 117

Results

FY 2006 FY 2007

138 130
38 The Peace Corps :: performance and accountability report :: fiscal year 2008

Performance Section

Results and Analysis:

The agency continuously examines and seeks to improve its ability to efficiently process applicants. Improvements in content of the Peace Corps’ web site, for example, have better prepared potential applicants for expectations during both the application process and service. This contributed to the decreasing length of time 

from application to nomination. The agency looked hard at its processes in an effort to reduce the time needed 

to process invitations. These adjustments include improved communication, including the use of WebEx, between the headquarters, posts, and applicants.

Performance Goal 4.2.1.

Maintain the overall 12-month Volunteer’s 

resignation rate at 10 percent or less 

in FY 2008.

Results and Analysis:

Retaining Volunteers is an area the Peace Corps has examined and analyzed carefully. The agency’s target to 

keep resignations for FY 2008 below 10 percent was achieved. Offices throughout the agency benefited from 

being updated quarterly. The agency continues to monitor early terminations and to use both quantitative and 

qualitative data to assist in improving recruiting, training, programming, and all other aspects of the Volunteer experience. 

Performance Indicators 4.2 FY 2008 Target FY 2008 Results

i. Percentage of sites described “very well,” “well,” or 

“adequately” prepared in the biennial Volunteer survey 80% 79%

ii. Percent of Volunteer respondents reporting their pre-service training 

to manage cultural differences as “adequate,” “effective” or 

“very effective” as measured by the biennial Volunteer survey

91% 94%

iii. Percentage of Peace Corps project and training programs reviewed annually 

to provide feedback for improvement to posts as reported via the prior 

year’s project status report/training status report review process

97% 97%

iv. Percent of Peace Corps Volunteer respondents reporting their pre-service 

training as “adequate”, “effective,” or “very effective” in preparing them 

to maintain their mental/emotional health, as measured by the biennial 

Volunteer survey

85% 89%

FY 2008 Goal FY 2008 Actual

<10% 8.6%

Results

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

9.0% 8.0% 9.0% 8.9% 8.7%
The Peace Corps :: performance and accountability report :: fiscal year 2008 39

Performance Section

Results and Analysis:

The Peace Corps strives to retain Volunteers throughout their term of Peace Corps service by managing a 

quality program. However, life circumstances, such as family emergencies, sometimes cause Volunteers to resign early. These performance indicators were chosen in light of the difficulties Volunteers face that can lead 

to resignation, including challenges in adapting to the local culture, dealing with emotional or mental health 

issues, and struggling with the work environment. 

The Peace Corps met its goal on training Volunteers to manage cultural differences. The most safe and secure 

Volunteers are those who are well-integrated into their communities. The Peace Corps provides extensive 

training on cross-cultural awareness, enabling Volunteers to learn to function well in their new communities. 

Additionally, the agency provides Volunteers with extensive language training to help them adapt to their new 

environment and communicate with their host country community members.

The Center for Field Assistance and Applied Research monitors the production and quality of programming 

and training (including the quality of materials provided to posts) with the regions through the annual project 

status report review process. These evaluations provide feedback to posts on overall possible project improvements. Cohesive projects enable Volunteers to have well-defined work at their sites, which fits into a larger 

project goal addressing the identified needs of the host country. The agency is proud to have completed the 

review of 97 percent of the project plans in FY 2008, meeting its target. 

The agency met its goal on preparing Volunteers to meet their mental/emotional health needs during their 

service. In FY 2008, the agency continued the training efforts of staff and Volunteers that are essential to 

maintain mental health and Volunteer resiliency. 

Health Volunteer, South Africa
f i nanc i a l s e ct i o n

Health Volunteer, Botswana
The Peace Corps :: performance and accountability report :: fiscal year 2008 41

Financial Section

Message from the Chief Financial Officer

0

The Peace Corps again earned an unqualified (clean) audit opinion during the FY 2008 financial statement 

audit. For the second consecutive year, no material weaknesses or federal system noncompliances were identified by the financial audit or otherwise identified within the agency. This achievement can be attributed to 

the dedicated, concentrated efforts by all those who work in financial management at the posts and within the 

headquarters. Along with this opinion, the Peace Corps received the prestigious Association of Government 

Accountants’ Certificate of Excellence in Accountability Reporting for quality reporting in the FY 2007 Performance and Accountability Report. The culmination of past agency efforts that produced sound financial 

processes, a certified and accredited financial system, and strong operational management are the pillars upon 

which the Peace Corps’ built this fiscal year. The process for producing our financial statements continues to 

be refined and grows stronger each fiscal year.

While the agency aggressively worked this year through the corrective action plan to mitigate the significant 

deficiencies identified by the FY 2007 financial audit, a number of those deficiencies remain open, subject to 

further corrective actions. Though no material weaknesses were identified during the FY 2008 financial audit, 

other significant deficiencies were identified in our internal controls for the accounting business process and 

the information system security controls. Significant deficiencies in internal control for the agency are shown 

in Appendix 1, Summary of Audit Findings, with an estimated completion date for corrective actions.

Our worldwide posts can now take advantage of the recently developed Ody Web to input personal service 

contract nonrecurring bonuses and adjustment payments thereby eliminating redundant data entry and ensuring that payments to the overseas contractors are faster and more accurate; receive cashier training on-site 

through WebEx an Internet-based communications service with phase two of the overseas cashier supervisors training currently under development; and better utilize the many electronic funds transfer enhanced 

capabilities implemented this fiscal year. Those posts where the agency’s 50+ age Volunteers are working will 

benefit from new expertise in the headquarters with knowledge of Medicare-related questions and problems.

Other important financial improvements instituted this year include providing online “how-to” Property, 

Plant and Equipment (PP&E) user documentation and continuing to conduct semiannual PP&E verifications 

with the posts (continuing unresolved PP&E issues, however, will require further management efforts during FY 2009); improving the reconciliation of the State Department transactions to further strengthen the 

accounts payable; and further improving the Funds Balance with Treasury reconciliation procedures. By 

closing or adjusting open obligations, $5.3 million was indentified in current and prior years (expired) funds. 

Prompt Payment Act interest paid was less than .001 percent. A recent formal receiving process validates 

the receipt of items and identifies where processing bottlenecks occur. More stringent processing protocols 

now require that payments be processed within five days of receipt and reduced the time required to credit 

posts for check cancellations/credits from 30 days to less than 10 days and the time required to record payments processed by the embassy from 30 days to less than five days. Outstanding errors on the purchase card 

and travel card payments were reduced and Certifying Officer responsibilities for the purchase cards were 

enhanced by conducting monthly sampling with 100 percent reviews of high risk areas. This year’s tax discrepancy percentage was less than .0001 percent which is a major improvement over past years and many of 

the other Federal agencies. 

Internal control testing this fiscal year focused on the accuracy of the accounts payable unbilled accruals to 

further support the financial statement balances and expanding the potential testing areas across the agency. 

Last year’s internal control testing efforts were reinforced by a full review of all personal service contract pay-
42 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

ments. This fiscal year the financial management performance metrics implemented last year were carefully 

monitored for the critical activities that evaluate the agency’s financial health. 

The most significant issue looming for the coming fiscal year is the fact that the agency’s funding is being drawn 

down by the drop in the value of the American dollar overseas and the continual increase in utilities and other 

costs being experienced by headquarters and the posts around the world. Both the headquarters and the posts 

are facing reductions in staff and services as the purchasing power of the dollar continues to weaken. 

Within that context, this next fiscal year should see the automation of the weekly cash reconciliation statements for the posts, implementing invoice sampling for domestic travel vouchers, full implementation of an automated conversion process where paper checks are scanned and automatically transmitted to the Treasury, 

and increasing payment processing interaction with the Department of State. 

My staff and I remain fully committed to fostering financial management improvements and sustaining all 

agency efforts to secure future unqualified opinions on the agency’s financial statements.

The Peace Corps’ financial statements that follow were prepared in accordance with generally accepted accounting principles for federal government entities and by subjecting the statements to an independent audit. 

The financial statements were prepared from our financial systems and processes using the most reliable and 

complete data available.

Thomas Bellamy

Acting Chief Financial Officer

November 17, 2008
The Peace Corps :: performance and accountability report :: fiscal year 2008 43

Financial Section

Peace Corps

Balance Sheet

As of September 30, 2008 and 2007

(In Thousands)

2008 2007

Assets

 Intragovernmental

 Fund Balance With Treasury (Note 2 and 3) 117,964$ 125,652$ 

 Accounts Receivable (Note 5) 635 630 

 Total Intragovernmental 118,599 126,282 

 Cash and Other Monetary Assets (Note 4) 40 65 

 Accounts Receivable, Net (Note 5) 26 58 

 General Property, Plant, and Equipment, Net (Note 6) 32,458 32,657 

 Other

 Prepaid Volunteer Living Allowances (Note 7) 4,304 3,984 

 Other Assets (Note 8) 2,541 2,510 

 Subtotal Other 6,845 6,494 

Total Assets 157,968$ 165,556$ 

Liabilities

 Intragovernmental 

 Accounts Payable 997$ 1,024$ 

 Other

 Unfunded FECA Liability (Note 9) 25,582 24,236 

 Other Liabilities (Note 10) 2 2 

 Subtotal Other 25,584 24,238 

 Total Intragovernmental 26,581 25,262 

 Accounts Payable 11,396 8,313 

 Federal Employee and Veterans Benefits (Note 9) 119,302 116,450 

 Other

 Other Employment Related Liability (Note 9) 14,436 7,590 

 Non-Entity Funds (Note 2) 31,947 32,597 

 Accrued Funded Payroll and Leave 4,252 3,680 

 Unfunded Annual Leave (Note 9) 7,600 7,310 

 Other Liability (Note 10) 1,164 750 

 Subtotal Other 59,399 51,927 

 Total Liabilities 201,952 216,678

Commitments and Contingencies (Note 12)

Net Position

 Unexpended Appropriations - Other Funds 68,276 81,586 

 Cumulative Results of Operations - Other Funds (126,986) (117,982) 

Total Net Position (58,710)$ (36,396)$ 

Total Liabilities and Net Position 157,968$ 165,556$ 

The accompanying notes are an integral part of these statements
44 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Peace Corps

Statement of Net Cost

For the Periods Ended September 30, 2008 and 2007

(In Thousands)

2008 2007

Program Costs:

 Gross Costs 361,036$ 335,688$ 

 Less: Earned Revenue (Note 14) 2,897 3,158 

Net Cost of Operations 358,139$ 332,530$ 

The accompanying notes are an integral part of these statements
The Peace Corps :: performance and accountability report :: fiscal year 2008 45

Financial Section

Peace Corps

Statement of Changes in Net Position

For the Periods Ended September 30, 2008 and 2007

(In Thousands)

Cumulative Results of Operations

Beginning Balance $ (117,982) $ (120,348)

Adjustments

 Corrections of Errors (Note 11) 460 (511)

Beginning Balances, As Adjusted (117,522) (120,859)

Budgetary Financing Sources:

 Appropriations Used 342,815 330,685 

Other Financing Sources (Non-Exchange):

 Transfers-In/Out Reimbursement 1,398 (102)

 Imputed Financing (Note 13) 4,462 4,824 

Total Financing Sources 348,675 335,407 

Net Cost of Operations (358,139) (332,530)

Net Change (9,464) 2,877 

Cumulative Results of Operations: (126,986) (117,982)

Unexpended Appropriations:

Beginning Balance 81,586 92,863 

Adjustments

 Corrections of Errors (Note 11) (135) (2) 

Beginning Balance, As Adjusted 81,584 92,728 

Budgetary Financing Sources:

 Appropriations Received 333,500 319,700 

 Other Adjustments (3,992) (157)

 Appropriations Used (342,816) (330,685)

 Total Budgetary Financing Sources (13,308) (11,142)

Total Unexpended Appropriations 68,276 81,586 

Net Position $ (58,710) $ (36,396)

2008 2007

The accompanying notes are an integral part of these statements
46 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Peace Corps

 Statement of Budgetary Resources

For the Years Ended September 30, 2008 and 2007

(In Thousands)

2008 2007

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 21,501$ 21,148$ 

Budgetary Authority

 Appropriation 333,500 319,700 

 Spending Authority From Offsetting Collections (Gross)

 Earned

 Collected 5,415 4,789 

 Change in Receivables from Federal Sources (14) (334) 

 Change in Unfilled Customer Orders

 Without Advance from Federal Sources 901 (150) 

 Subtotal 339,802 324,005 

Permanently Not Available 5,098 158 

Total Budgetary Resources 356,205$ 344,995$ 

Status of Budgetary Resources:

Obligations Incurred:

 Direct 329,072$ 320,848$ 

 Reimbursable 2,212 2,646 

 Subtotal 331,284 323,494 

Unobligated Balance:

 Apportioned 13,127 10,648 

Unobligated Balance Not Available 11,794 10,853 

Total Status of Budgetary Resources 356,205$ 344,995$ 

Change in Obligated Balance:

Obligated Balance, Net

 Unpaid Obligations, Brought Forward, October 1 72,947$ 87,860$ 

 Uncollected Customer Payments from Federal Sources, Brought Forward, October 1 (46) 438 

 Total Unpaid Obligated Balance, net 72,993 87,422 

Obligations Incurred, net 331,284 323,494 

Gross Outlays 341,835 338,407 

Change in Uncollected Customer Payments from Federal Sources 886 (484) 

Obligated Balance, Net, End of Period

 Unpaid Obligations 62,396 72,947 

 Uncollected Customer Payments from Federal Sources 840 (46) 

 Total Unpaid Obligated Balance, Net, End of Period 61,556$ 72,993$ 

 Net Outlays:

 Gross Outlays 341,835$ 338,407$ 

 Offsetting Collections 5,415 4,789 

 Net Outlays 336,420$ 333,618$ 

The accompanying notes are an integral part of these statements
The Peace Corps :: performance and accountability report :: fiscal year 2008 47

Financial Section

Note 1 Significant Accounting Policies 

a) Reporting Entity 

The Peace Corps was initially established by President John F. Kennedy pursuant to Executive Order 10924 on 

March 1, 1961, and was subsequently formalized by the Peace Corps Act of 1961. The Peace Corps is an independent agency within the executive branch of the United States government. 

The core mission of the Peace Corps is to promote world peace and friendship by making available to interested, less developed countries men and women of the United States qualified for service abroad and willing 

to serve, even under conditions of hardship if necessary. The Peace Corps’ goals are to help the people of interested countries in meeting their need for trained men and women; to help promote a better understanding of 

Americans on the part of the peoples served; and to help promote a better understanding of other peoples on 

the part of Americans. 

b) Basis of Presentation 

The financial statements present the financial position, the net cost of operations, and changes in net position 

along with budgetary resources activities of the agency pursuant to the requirements of 31 U.S.C. 3515 (b). 

They have been prepared using Peace Corps’ books and records in accordance with agency accounting policies, the most significant of which are summarized in this note. The statements are in addition to the financial 

reports used to monitor and control budgetary resources, which are prepared from the same books and records. 

The statements are presented in accordance with the applicable form and content requirements of the OMB 

Circular A-136, “Financial Reporting Requirements,” issued June 2008. The statements should be read with 

the realization that they are for a component of the U.S. government, a sovereign entity. 

The Peace Corps’ accounting policies follow Federal Accounting Standards Advisory Board principles and 

other generally accepted accounting principles for the United States federal government. 

The financial statements are subdivided in two categories: intragovernmental and public. The intragovernmental balances, revenues, and costs reflect financial transactions between the Peace Corps and other federal 

agencies. Public activities are those with non-governmental customers, including Volunteers, contributors, 

employees, contractors, and vendors. 

Federal Financial Statements 

Statement Federal Objective 

Balance Sheet Reflects the agency’s financial position as of the statement date. The assets are the amount of future economic 

benefits owned or managed by the agency. The liabilities are amounts owed by the agency. The net position is 

the difference between the assets and liabilities. 

Statement of 

Net Cost 

Shows separately the components of the net cost of the agency’s operations for the period. Net cost is equal to 

the gross cost incurred by the agency less any exchange revenue earned from its activities. 

Statement of 

Changes in 

Net Position 

Explains how the net cost for the agency’s operations was funded, and reports other changes in equity that are 

not included in the Statement of Net Cost. It reflects the changes in both the proprietary and the budgetary activities through the respective components: Cumulative Results of Operations and Unexpended Appropriations. 

Statement of 

Budgetary 

Resources 

Provides information about how budgetary resources were made available as well as their status at the end of 

the period. It is the only financial statement exclusively derived from the agency’s budgetary general ledger in 

accordance with budgetary accounting rules. 

c) Basis of Accounting 

Accounting principles encompass both accrual and budgetary transactions. Under the accrual method, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to 

receipt or payment of cash. Under the budgetary basis, however, fund availability is recorded based upon legal 

considerations and constraints. The agency receives financing sources through direct appropriations from the 

general fund of the U.S. Treasury to support its operations. This financing source—appropriations used—is 

recognized to the extent that appropriation authority has been applied against received goods and services. 
48 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

d) Fund Accounting Structure 

The agency’s financial activities are accounted for by U. S. Treasury Appropriation Fund Symbol. They include accounts for appropriated funds and other fund groups described below for which the Peace Corps maintains financial records. 

General Funds—These funds consist of the receipts and expenditures by the government that are not earmarked by law for a specific purpose and used to fund agency operations and capital expenditures. 

Special or Trust Funds—These funds consist of receipts and expenditures by the government for carrying out 

specific purposes and programs in accordance with terms of the statute that designates the fund as a special 

fund or trust fund. The balances in the agency’s trust funds are non-entity assets and are included in the financial statements. 

Deposit Funds—These funds consist of monies held temporarily by the Peace Corps as an agent for others. 

These include allowance and allotment accounts for employees and Volunteers. The balances in these funds 

are non-entity assets and are included in the financial statements.

General Fund Receipt Accounts—These funds consist of monies collected by the Peace Corps that are returned to the U.S. Treasury and not available for Peace Corps’ use. 

e) Budget Authority 

Congress annually passes multi-year appropriations that provide the agency with authority to obligate funds 

over a two-year period for necessary expenses to carry out operations. After the right to create new obligations 

has expired, this two-year budget authority is available for five additional years to complete the liquidation of 

open obligations, advances, and receivables. After the five-year period, all open transactions for the respective 

fiscal year will be cancelled and funds will be returned to the U.S. Treasury. Any valid claims associated with 

these funds after closure must be processed against current year funds. 

In addition, Congress enacts no year appropriations that are available until expended. All appropriations are 

subject to OMB apportionment as well as Congressional restrictions. The agency places internal restrictions 

to ensure the efficient and proper use of all funds. 

f) Revenues and Other Financing Sources 

Peace Corps operations are financed through appropriations, proceeds from the sale of property, and interagency agreements. For financial statement purposes, appropriations are recorded as a financing source and 

reported on the Statement of Changes in Net Position at the time they are recognized as expenditures. 

g) Fund Balance with the U.S. Treasury 

The fund balance with the U. S. Treasury consists of appropriated funds that are available to pay current liabilities and finance authorized purchase commitments, and special funds that periodically are direct-financing 

reimbursements to the appropriated funds. 

The agency does not maintain cash in commercial bank accounts for the funds reported in the balance sheet. 

All cash receipts and disbursements are processed by the U.S. Treasury or the U.S. Department of State 

(DOS). 

The funds that make up post cashiers’ imprest funds belong to the U.S. Treasury through DOS’s accountability. These funds are routinely used to pay for small-value purchases of goods and services and are also used to 

make an occasional emergency payment. Per agreement with the DOS, the Peace Corps is responsible to pay 

for any losses incurred by the cashiers that would normally fall on the account holder. All international payments made by DOS on behalf of the Peace Corps are charged to the Peace Corps and reduce the applicable 

Peace Corps appropriation unexpended balance in U.S. Treasury records. As of September 30, 2008, cashier 

imprest funds represented by cash on hand, checks on hand, interim advances, and cashier checking account 

balances totaled approximately $1.6 million in U. S. dollar equivalents. 

At any point in time, the posts have U. S. dollar equivalents and local currency checks in their possession that 
The Peace Corps :: performance and accountability report :: fiscal year 2008 49

Financial Section

are awaiting delivery to the payees. These checks were recorded as disbursements on Peace Corps and U.S. 

Treasury records in the month the checks were issued. As of September 30, 2008, these checks totaled approximately $6.6 million in U. S. dollar equivalents. 

Fund balance with Treasury is carried forward until such time as goods or services are received and payment 

is made, or until the funds are returned to the U.S. Treasury.

h) Foreign Currency 

Accounting records for the agency are maintained in U.S. dollars, while a significant amount of the overseas 

expenditures are in foreign currencies. For accounting purposes, overseas obligations and disbursements are 

recorded in U.S. dollar equivalents based on the budgeted rate of exchange as of the date of the transaction. 

Foreign currency payments are made by the U.S. disbursing officers located at the U.S. Department of State 

Financial Service Centers in Charleston, South Carolina; and Bangkok, Thailand. 

i) Accounts Receivable 

Accounts receivable includes amounts due from other federal entities and from current and former employees 

and Volunteers. Annually, a determination of the amount of the Allowance for Doubtful Accounts will be established for material amounts of nonfederal (public) debt exceeding $30,000. The agency recognizes an Allowance for Doubtful Accounts when it is determined that the amounts are more likely than not to be totally 

uncollected. An exception to this write-off policy will be for accounts with approved payment plans in place 

and for which the debtor is meeting the terms of the plan.

j) Advances and Prepayments 

Payments in advance of the receipt of goods and services are recorded as advances and recognized as expenses 

when the related goods and services are received. Advances are made principally to agency employees for official travel and prepayments to Volunteers for living allowances. 

Pursuant to Section 5(b) of the Peace Corps Act, Peace Corps Volunteers are entitled to a living allowance in 

order that they may serve effectively and safely overseas. Living allowances are paid to Volunteers to provide 

support while in their country of assignment. Allowances, which are based on local living standards and costs, 

include food, clothing, household items, rent, utilities, and local transportation. 

k) Property, Plant, and Equipment (PP&E) 

The agency capitalizes property, plant, and equipment, with the exception of general property, plant, and 

equipment and vehicles, that has an acquisition cost of $25,000 or greater, a useful life of two years or more, 

are not intended for sale in the ordinary course of business, and are intended to be used or available for use by 

the entity. For general property, plant, and equipment, purchases are capitalized at $25,000 or greater for individual items and $500,000 or greater for aggregate purchases. Vehicles in the amount of $10,000 and over are 

capitalized. Acquisitions that do not meet these criteria are recorded as operating expenses. Assets are capitalized at historical cost and depreciated using the straight-line method. The agency has established a policy that 

uses an estimated salvage value of 40 percent for the agency’s vehicles based on their resale value in recent 

years. 

The agency does not own any real property. Nonexpendable personal property is depreciated over 3 to 15 

years. The agency operates land, buildings, and equipment that are provided by the General Services Administration. Rent for this property is expensed. Deferred maintenance amounts are immaterial with respect to the 

financial statements. Software purchased for $25,000 or developed for internal use at a cost of $25,000 or 

greater is capitalized and amortized over its expected life (currently 3 to 9 years).

l) Accounts Payable and Other Liabilities 

Liabilities represent the amount of monies or other resources that are likely to be paid as the result of a transaction or event that has already occurred. Liabilities classified as not covered by budgetary resources are liabilities for which appropriations have not been enacted. 
50 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

m) Employee Benefits 

I. Federal Employees Compensation Act (FECA) Accrued Claims—The agency records the direct dollar costs 

of compensation and medical benefits paid on its behalf by the U.S. Department of Labor for employees under the agency’s jurisdiction. 

II. Future Workers Compensation Benefits—FECA provides income and medical costs protection to federal employees injured on the job or who have incurred a work-related occupational disease, and to beneficiaries of 

employees whose death is attributable to job-related injury or occupational disease. The U.S. Department of 

Labor administers the FECA program and initially pays valid claims and bills the agency on an annual basis. 

III. Accrued Leave—A liability for annual leave is accrued as leave is earned and paid when leave is taken or 

employment terminates. Accrued annual leave is paid from future funding sources and is reflected as a liability not covered by budgetary resources. Sick and other leave is expensed as taken. 

IV. Employee Health Benefits and Life Insurance—The agency’s employees are eligible to participate in the contributory Federal Employees Health Benefit Program and the Federal Employees Group Life Insurance Program. The agency contributes to each program to pay for current benefits. 

V. Post-Retirement Health Benefits and Life Insurance—Agency employees who may be eligible to participate 

in the Federal Employees Health Benefit Program and the Federal Employees Group Life Insurance Program 

could continue to do so during retirement. The Office of Personnel Management (OPM) has provided the 

agency with cost factors that estimate the true cost of providing the post-retirement benefit to current employees. The agency recognizes a current cost for these and other retirement benefits at the time of employment 

with the agency. The other retirement benefit expense is financed by OPM and offset by the agency through 

the recognition of an imputed financing source on the Statement of Changes in Net Position. 

VI. Employee Retirement Benefits—Peace Corps direct hire employees participate in one of four retirement systems: Civil Service Retirement System, Federal Employees’ Retirement System, or the Foreign Service Retirement and Disability System. Foreign Service National (FSN) employees at overseas posts who were hired 

prior to January 1, 1984, are covered under the Civil Service Retirement System. FSNs hired after that date 

are covered under a variety of local government plans in compliance with the host country’s local laws and 

regulations. 

The Peace Corps recognizes its share of the cost of providing future pension benefits to eligible employees 

throughout their period of employment. The pension expense not covered by budgetary resources is calculated using actuarial factors provided by OPM and is considered imputed cost to the agency. 

VII. Valuation of Host Country Resident Personal Service Contractor Severance and Retirement Liability—The 

Peace Corps is generally liable for separation or retirement payments to eligible host country resident personal 

service contractors (PSCs) in countries that require payments under local labor laws. Until systems are in place 

to track this liability in a timely manner, the estimate of the current and future costs of the severance and retirement liability is determined annually. 

n) Commitments and Contingencies 

The agency is involved in various administrative proceedings, legal actions, and claims arising in the ordinary 

course of business. Contingencies are recognized as a liability when a future outflow or other sacrifice of resources is probable and measurable. 

o) Use of Estimates 

The preparation of financial statements required management to make some estimates and assumptions that affect the reported amount of assets and liabilities, as well as the disclosure of contingent liabilities at the date of 

the financial statements and the amount of revenues and costs reported during the period. Actual results could 

differ from those estimates. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 51

Financial Section

p) Interest on Late Payments 

Occasionally, the agency incurs interest penalties on late payments. Such interest penalties are paid to the respective vendor in accordance with the guidelines mandated by the Prompt Payment Act, P.L. 97–177, as 

amended. 

q) Intragovernmental Net Costs 

The Statement of Net Cost is consolidated for the agency using a budget functional classification code. These 

codes are used to classify budget resources presented in the budget of the United States government per OMB. 

The agency is categorized under BFC code number 150—International Affairs. Gross cost and earned revenues from other intragovernmental agencies (reimbursable agreements) fall under this code. 

r) Adjustments to Maintain Inherent Account Relationship Integrity 

In order to correct the relationships between the proprietary and budgetary accounts, a high-level analysis was 

performed. Cash balances were adjusted to align with the U.S. Treasury fund balance to permit the agency to 

pass edit checks and submit FACTS II reports to Treasury. All of the adjustments for fiscal year 2008 were 

immaterial. 

s) Allocation Transfer

The Peace Corps (child) is a party to allocation transfers with the Department of State as a receiving entity. 

Allocation transfers are legal delegation by one agency of its authority to obligate budget authority and outlay 

funds to another agency. A separate fund account (allocation account) is created In the U. S. Treasury as a 

subset of the parent fund account for tracking and reporting purposes. All allocation transfers of balances are 

credited to this account, and subsequent obligations and outlays incurred by the child entity are charged to this 

allocation account as they execute the delegated activity on behalf of the parent entity. All financial activity 

related to these allocation transfers (e.g., budget authority, obligations, outlays) is reported in the financial 

statements of the parent entity, from which the underlying legislative authority, appropriations, and budget apportionments are derived. 

Note 2 Non-Entity Assets 

Non-entity assets are composed of trust and deposit funds. These funds are not available for Peace Corps’ use 

and not part of Peace Corps resources. The Peace Corps has a fiduciary responsibility to monitor collections, 

status, and distribution. Below, as information, are the U.S. Treasury fund balances of non-entity, fiduciary assets. All the non-entity assets are non-governmental. 

Non-Entity Assets 

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Trust Fund 

 FSN Separation Liability Trust Fund $ 7,349 $ 7,849 

Special Fund 

 Host Country Residents Contractors Separation 

 Liability Fund 5,658 5,157 

Deposit Funds 

 Volunteer Readjustment Allowance 18,417 17,978 

 Volunteer Payroll Allotment Account (Payroll Savings 

 Bond Account) 

 14 17 

Clearing Accounts 509 1,596 

 Total Non-Entity Assets 31,947 32,597 

 Total Entity Assets per Balance Sheet 126,021 132,959 

 Total Assets $ 157,968 $ 165,556 

Trust Fund—The FSN Separation Liability Trust fund represents the estimated accrued liability for separation 

pay (based on local labor law) of the FSN employees. 
52 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Special Fund— Host Country Residents Contractor Separation Liability fund represents the estimated accrued 

liability for separation pay (based on local labor law) of the personal service contractors. 

Deposit Funds—The Volunteer readjustment allowance is an allowance earned by Volunteers for each month 

of satisfactory service and payable upon their return to the United States. The Volunteer payroll allotment account reflects the value of held U. S. government bonds purchased by the Volunteers through allotments from 

the readjustment allowance. The bonds allow the Volunteers to earn interest on their earnings while in service 

overseas. 

Clearing Accounts—The proceeds of sales funds represent cash received from the sale of assets, primarily vehicles, and available to be reinvested in a like-kind replacement purchase (e.g., proceeds from vehicle sales 

used to purchase replacement vehicles). 

Note 3 Fund Balance with Treasury 

Fund Balances 

September 30, 2008 

(in thousands) 

September 30, 2007 

(in thousands) 

Appropriated Funds $ 86,017 $ 93,055 

Total Non-Entity Assets (Note 2) 31,947 32,597 

 Total $ 117,964 $ 125,652 

Status of Fund Balance with Treasury 

September 30, 2008 

(in thousands) 

September 30, 2007 

(in thousands) 

(1) Unobligated Balance 

 (a) Available $ 13,127 $ 10,648 

 (b) Unavailable 11,794 10,853 

(2) Obligated Balance Not Yet Disbursed 93,043 104,151 

 Total $ 117,964 $ 125,652 

The Fund Balance with Treasury is equal to the unobligated balance of funds plus the obligated balance not yet 

disbursed. 

Available Unobligated Balance—Composed of apportionments available for allotment plus allotments available for obligation or commitment. 

Unavailable Unobligated Balance—Composed of unapportioned authority plus unobligated appropriation authority from prior years that is no longer available for new obligations. This latter authority is only available for 

adjustments to existing obligations. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 53

Financial Section

Note 4 Cash and Other Monetary Assets 

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Total Cash and Other Monetary Assets $ 40 $ 65 

The cash balances represent imprest funds at headquarters held in U.S. currency. 

Note 5 Accounts Receivable, Net

Accounts Receivable as of 

September 30, 2008

(in thousands)

Accounts 

Receivable, 

Gross 

Allowance 

for 

Doubtful 

Accounts 

Accounts 

Receivable, 

Net 

Intragovernmental $ 635 $ - $ 635 

Other 65 39 26 

Total $ 700 $ 39 $ 661 

Accounts Receivable as of 

 September 30, 2007

(in thousands)

Accounts 

Receivable, 

Gross 

Allowance 

for 

Doubtful 

Accounts 

Accounts 

Receivable, 

Net 

Intragovernmental $ 630 $ - $ 630 

Other 58 - 58 

Total $ 688 $ - $ 688 

Intragovernmental receivables are due from other federal agencies for services provided per reimbursable 

agreements. 

Other accounts receivable are due from nonfederal entities, consisting primarily of receivables from employees. 

Annually, a determination of the amount of the Allowance for Doubtful Accounts will be established for material amounts exceeding $30,000. The agency recognizes an Allowance for Doubtful Accounts when it is determined that the amounts nonfederal (public) debts are more likely than not to be totally uncollected. An allowance was established as of September 30, 2008. 
54 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Note 6 General Property, Plant, and Equipment (PP&E), Net

Components of Fixed Assets as of 

September 30, 2008: 

(in thousands)

Useful Life in 

Years 

Cost Accumulated 

Depreciation 

Net Book Value 

General Property, Plant, and Equipment 5–10 $ 2,983 $ 2,656 $ 327 

Vehicles 5 17,857 5,847 12,010 

IT Hardware 3–15 11,565 6,145 5,420 

Leasehold Improvements 10 402 100 302 

Internal-Use Software 3–9 29,366 14,967 14,399 

Total $ 62,173 $ 29,715 $ 32,458 

Components of Fixed Assets as of 

September 30, 2007: 

(in thousands)

Useful Life in 

Years Cost Accumulated Depreciation Net Book Value 

General Property, Plant, and Equipment 5–10 $ 2,949 $ 2,404 $ 545 

Vehicles 5 15,625 5,715 9,910 

IT Hardware 3–15 9,580 3,871 5,709 

Leasehold Improvements 10 402 60 342 

Internal-Use Software 3–9 27,684 11,533 16,151 

Total $ 56,240 $ 23,583 $ 32,657 

For the quarter ending September 30, 2008, Peace Corps fixed assets include internally developed software and 

those assets that are reflected as active in the property management databases. These assets are located at headquarters in Washington, D.C., the eleven regional offices, and the overseas posts. 

Values for all assets other than internally developed software were obtained from data extracted from the databases. 

Values for internally developed software were derived from the most reliable available data for each system. There 

are no restrictions on the use or convertibility of General Property, Plant and Equipment owned by the Peace Corps. 

Note 7 Prepaid Volunteer Living Allowances

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Prepaid Volunteer Living Allowances $ 4,304 $ 3,984 

Prepaid Volunteer Living Allowances—Payments of Volunteer living allowances are made prior to the entitlement 

month so the posts can ensure timely payments of the allowances to the Volunteers. These payments are prepositioned so that Volunteers will not incur a financial burden for their living costs.
The Peace Corps :: performance and accountability report :: fiscal year 2008 55

Financial Section

Note 8 Other Assets

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Travel Advances to Employees $ 82 $ 97 

Relocation Advances to Employees 30 40 

Prepaid Property, Plant and Equipment 94 555 

Prepaid Rent 2,335 1,818 

 Total Other Assets $ 2,541 $ 2,510 

Relocation Advances to Employees—Direct-hire employees are provided a relocation advance when appropriate. 

Travel Advances to Employees—Travel advances are provided to employees when appropriate. Advances remain in 

the financial records until they are offset against travel entitlements or collected.

Note 9 Liabilities Not Covered by Budgetary Resources

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Intragovernmental Liabilities 

Unfunded FECA Liability $ 25,582 $ 24,236 

Liabilities 

Unfunded Annual Leave 7,600 7,310 

Unfunded Employment Related Liability 14,436 7,590 

Federal Employee and Veterans Benefits 119,302 116,450 

Total Liabilities Not Covered by Budgetary Resources $ 166,920 $ 155,586 

Unfunded FECA Liability—A liability for the direct dollar costs of compensation and medical benefits paid on 

the agency’s behalf by the U.S. Department of Labor. Since the agency is dependent on annual appropriation, 

it will include the amount billed for the direct costs in its budget request two years later. 

Unfunded Annual Leave—A liability for annual leave is accrued as leave is earned and paid when leave is 

taken or when the individual terminates. The balance represents the estimated value of annual leave for U.S.-

hired employees earned but not used on September 30, 2008. Payments are charged to the appropriation current at the time of payment. The valuation of the accrued annual leave for foreign service national employees 

and the foreign national PSCs has been estimated for this financial statement. There are approximately 200 

foreign service nationals and a range of 1,500 to 2,000 foreign national PSCs working for the Peace Corps at 

fiscal year end. Annual leave earned is based on local labor law requirements. Annual leave is paid out of current appropriations when taken. 

Unfunded Employment Related Liability—A liability for the foreign national PSCs’ estimated severance. 

Lump-sum payments are generally made to eligible international long-term personal service contractors based 

on local labor law requirements for separation. These payments are made when the individual terminates in 

accordance with local laws. During FY 2008, the accrual methodology was changed to include the liability 

for the posts’ replacement local social security plans. 

Federal Employee and Veterans Benefits—Liability for the actuarial value of future payments for FECA as estimated by the U.S. Department of Labor for the agency. 
56 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Note 10 Other Liabilities

Advances from Others—The balance of amounts advanced by other federal entities for goods and services to 

be furnished (e.g., money advance for small project assistance grants). 

Contingent Liability—See Note 12.

Note 11 Adjustments to the Financial Statements

Adjustments were entered for property, plant and equipment additions that were not previously recorded in the 

proper period of accountability. These adjustments are reflected on the Statement of Changes in Net Position. 

Note 12 Commitments and Contingencies

In the opinion of the management and legal counsel, the agency is liable for contingent liabilities related to 

administrative proceedings, legal actions, or claims that are probable and measurable in the amount of 

$1,164,000 as of September 30, 2008. 

Disclosure is required if there is a reasonable possibility that a loss may be incurred. The likelihood of a reasonable possibility of a loss related to administrative proceedings, legal actions, or claims is estimated to be 

$330,000 as of September 30, 2008. 

Note 13 Imputed Financing

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands)

Federal Employees Health Benefit Program $ 3,478 $ 3,811 

Federal Employees Group Life Insurance Program 12 12 

Civil Service Retirement System 846 811 

Federal Employees Retirement System (6) (4) 

Foreign Service Retirement and Disability System 132 194 

Total Imputed Costs $ 4,462 $ 4,824 

Imputed financing recognizes actual costs of future benefits which include the Federal Employees Health 

Benefit Program, Federal Employees Group Life Insurance Program, and pension benefits that are paid by 

other federal entities. The agency is not required to reimburse other entities for these costs. 

 September 30, 2008

(in thousands)

September 30, 2007 

(in thousands)

 Intragovernmental 

 Advances from Others $ 2 $ 2 

Other Liabilities 

 Contingent Liability 1,164 750 

 Total Other Liabilities $ 1,166 $ 752 
The Peace Corps :: performance and accountability report :: fiscal year 2008 57

Financial Section

Note 14 Exchange Revenues

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands) 

Intragovernmental Earned Revenues $ 2,426 $ 2,784 

Earned Revenues from the Public 471 374 

Total Exchange Revenues $ 2,897 $ 3,158 

Exchange revenues represent revenue from services provided. This includes reimbursable agreements from 

other government agencies such as U.S. Agency for International Development sponsored HIV/AIDS education, prevention, and mitigation activities; and umbrella programs covering environment, health, youth, microenterprise and Small Project Assistance technical assistance. 
58 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Note 15 Reconciliation of Net Cost of Operations to Budgetary Obligations 

FY 2008 Direct Reimbursable Total 

Net Obligations Incurred $ (329,072) $ (2,212) $ (331,284) 

 Less: Undelivered Orders 13,779 214 13,993 

Total Expended Obligation Authority (342,851) (2,426) (345,277) 

Financing Sources Used (342,832) (2,426) (345,258) 

Obligations Not Resourced (19) 0 (19) 

Adjustments Reconciling Obligations To Costs Included in 

Obligations Not in Costs 

 Acquisition of Assets 8,361 - 8,361 

 Subtotal 8,361 - 8,361 

 Included in Costs Not in Obligations 

 Future Funded Expenses 7,429 - 7,429 

 Depreciation, Amortization, and Depletion 7,871 - 7,871 

 Employer Contributions to Employee Benefit Programs 1,468 - 1,468 

 Changes in Actuarial Liability 2,852 - 2,852 

 Offsetting Revenues - (2,416) (2,416) 

 Imputed Financing 4,462 - 4,462 

 Net Transfers Without Reimbursement (1,398) - (1,398) 

 Nonfederal Receivables (17) - (17) 

 Net Change on Dispositions (230) - (230) 

 Other Financing Sources 1,212 (10) 1,202 

 Subtotal 23,649 (2,426) 21,223 

Adjusted Expended Obligation Authority (358,139) (0) (358,139) 

Statement of Net Costs 358,139 (0) 358,139 

 Unexplained Differences $ - $ - $ - 

FY 2007 Direct Reimbursable Total 

Net Obligations Incurred $ (333,548) $ (1,989) $ (335,537) 

 Less: Undelivered Orders 144 190 334 

Total Expended Obligation Authority (333,692) (2,179) (335,871) 

Financing Sources Used (341,597) (2,145) (343,742) 

Obligations Not Resourced 7,905 (34) 7,871 

Adjustments Reconciling Obligations To Costs Included in 

Obligations Not in Costs 

 Acquisition of Assets 8,688 - 8,688 

 Subtotal 8,688 - 8,688 

 Included in Costs Not in Obligations 

 Future Funded Expenses (1,363) - (1,363) 

 Depreciation, Amortization, and Depletion 7,063 - 7,063 

 Employer Contributions to Employee Benefit Programs 78 - 78 

 Offsetting Revenues 3,773 (2,143) 1,630 

 Imputed Financing 4,824 - 4,824 

 Net Transfers Without Reimbursement (141) - (141) 

 Nonfederal Receivables 94 - 94 

 Net Change on Dispositions (104) - (104) 

 Other Financing Sources 14,933 (1) 14,932 

 Subtotal 29,157 (2,144) 27,013 

Adjusted Expended Obligation Authority (354,161) (35) (354,196) 

Statement of Net Costs 354,161 35 354,196 

 Unexplained Differences $ - $ - $ - 
The Peace Corps :: performance and accountability report :: fiscal year 2008 59

Financial Section

Note 16 Disclosure on Contributions to the Peace Corps

1. Media Contributions Received—The agency received $10.2 million in print, radio, and television media 

contributions through public service announcements in the first 11 months of FY 2008. 

2. Host Country Contributions—The agency received cash and in-kind contributions from host countries. Inkind contributions estimated at $5.4 million in fair market value were received at posts through the end of FY 

2008 for services, supplies, equipment, and facilities. The end of FY 2008 host country cash balance is 

$579,668. 

Note 17 Apportionment Categories of Obligations Incurred: Direct vs. 

Reimbursable Obligations 

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands) 

Direct Reimbursable Direct Reimbursable 

Category A $ 329,072 $ 2,212 $ 320,848 $ 2,646 

Category B 0 0 0 0 

Category C 0 0 0 0 

Total Obligations Incurred $ 329,072 $ 2,212 $ 320,848 $ 2,646 

All obligations incurred are Category A. US Peace Corps does not have any Category B or C apportionments. 

Note 18 Undelivered Orders at the End of the Period 

September 30, 2008 

(in thousands)

September 30, 2007 

(in thousands) 

Undelivered Orders – End of Period $ 52,468 $ 66,462 

The undelivered orders are budgetary obligations with and without advances/prepayments placed against federal budget authority where no goods or services have been received. 
60 The Peace Corps :: performance and accountability report :: fiscal year 2008

Financial Section

Since 1961.

To: Ron Tschetter, Director

From: Kathy A. Buller, Inspector General

Date: November 13, 2008

Subject: Audit of Peace Corps’ Fiscal Year 2008 Financial Statements

This letter transmits the reports of Urbach Kahn and Werlin LLP (UKW) on its financial statement audit of 

the Peace Corps’ Fiscal Year (FY) 2008 Financial Statements. As required by the Accountability of Tax Dollars Act of 2002, the Peace Corps prepared financial statements in accordance with Office of Management and 

Budget (OMB) Circular No. A-136, Financial Reporting Requirements, and subjected them to audit. 

Audit Reports on Financial Statements, Internal Control, and Compliance with Laws and Regulations

We contracted with UKW, an independent certified public accounting firm, to audit the financial statements 

as of September 30, 2008 and 2007. The contract required that the audit be done in accordance with generally 

accepted government auditing standards; the OMB’s Bulletin 07-04, Audit Requirements for Federal Financial 

Statements; and the Government Accountability Office/President’s Council on Integrity and Efficiency Financial Audit Manual. 

UKW’s audit report for FY 2008 includes: (1) an opinion on the financial statements, (2) a report on internal control, and (3) a report on compliance with laws and regulations. In the audit of the Peace Corps, UKW 

found:

•	 The financial statements were fairly presented, in all material respects, in conformity with generally accepted accounting principles for the year-ended September 30, 2008.

•	 There were no material weaknesses in the internal controls. OMB Bulletin 07-04 defines a material weakness as a significant deficiency, or combination of significant deficiencies, that results in a more than remote 

likelihood that a material misstatement of the financial statements will not be prevented or detected.

•	 UKW’s report on internal control did identify some significant deficiencies:

■ Certain controls associated with property, plant, and equipment require improvement.

■ Peace Corps, Office of Chief Financial Officer policy on reporting Host Country Contributions 

(HCC) in the financial statements is not consistent with generally accepted accounting principles. Additionally, internal control over receipting and recording HCC cash donations needs 

strengthening. 

■ Recording of recoveries is not consistent with U.S. Standard General Ledger guidance.
The Peace Corps :: performance and accountability report :: fiscal year 2008 61

Financial Section

■ Full certification and accreditation of all of Peace Corps’ information systems has not been achieved.

■ Contingency planning related to the information system environment is deficient requiring certain 

measures for improving the process.

■ Access control, application software development, and change control weaknesses related to the financial reporting system need to be remedied.

OMB Bulletin 07-04 defines a significant deficiency as a deficiency in internal control, or a combination of deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood 

that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or 

detected. 

•	 UKW found no instances of reportable noncompliance with laws and regulations it tested. 

OIG Evaluation of UKW’s Audit Performance

In connection with the contract, we reviewed UKW’s report and related documentation and inquired of its representatives. Our review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, opinions on Peace Corps’ financial statements or internal control or conclusions on compliance with laws and regulations. UKW is responsible 

for the attached auditor’s reports dated November 12, 2008 and the conclusions expressed in the reports. However, 

our review disclosed no instances where UKW did not comply, in all material respects, with U.S. generally accepted 

government auditing standards.

We would like to extend our thanks to the Peace Corps staff involved in issuing the financial statements prior to the 

November 17 OMB due date. Their professionalism, courtesy, and cooperation allowed us to overcome the many 

challenges associated with performance of the audit and our oversight of the audit process. If you or a member of 

the Peace Corps staff has any questions about UKW’s audit or our oversight, please contact me or Gerald Montoya, 

Assistant Inspector General for Audit, at 202-692-2907.

Attachments

cc: Jody Olsen, Deputy Director

David Liner, Chief of Staff

Thomas Bellamy, Acting Chief Financial Officer
This page was intentionally left blank.
The Peace Corps :: performance and accountability report :: fiscal year 2008 63

Independent Auditor’s Report

To the Director and Inspector General, 

 Peace Corps 

We have audited the accompanying Balance Sheets of Peace Corps as of September 30, 2008 

and 2007 and the related statements of Net Cost, Changes in Net Position and Budgetary 

Resources for the years then ended. These financial statements are the responsibility of Peace 

Corps’ management. Our responsibility is to express an opinion on these financial statements 

based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the 

United States of America; the standards applicable to financial audits contained in Government 

Auditing Standards issued by the Comptroller General of the United States; and Office of 

Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial 

Statements, as amended. Those standards require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. 

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures 

in the financial statements. An audit also includes assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial statement 

presentation. We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the financial position of Peace Corps as of September 30, 2008 and 2007 and its net cost, 

changes in net position, and budgetary resources for the years then ended in conformity with 

accounting principles generally accepted in the United States of America. 

In accordance with Government Auditing Standards, we have also issued our reports dated 

November 12, 2008, on our consideration of Peace Corps’ internal control over financial 

reporting and on our tests of Peace Corps’ compliance with certain provisions of laws and 

regulations and other matters. The purpose of those reports is to describe the scope of our 

testing of internal control over financial reporting and compliance and the results of that testing 

and not to provide an opinion on internal control over financial reporting or compliance. Those 

reports are an integral part of our audit performed in accordance with Government Auditing 

Standards and should be considered in assessing the results of our audit. 

The Management’s Discussion and Analysis (MD&A) is not a required part of the financial 

statements but is supplementary information required by accounting principles generally 

accepted in the United States of America. We have applied certain limited procedures, which 

consisted principally of inquiries of management regarding the methods of measurement and 

presentation of the required supplementary information. However, we did not audit the 

information and express no opinion on it. 
64 The Peace Corps :: performance and accountability report :: fiscal year 2008

The Message from the Director, Performance Section, Other Accompanying Information and 

Appendixes listed in the table of contents are presented for additional analysis and are not a 

required part of the financial statements. Such information has not been subjected to the 

auditing procedures applied in the audit of the financial statements and, accordingly, we express 

no opinion on them. 

Arlington, Virginia 

November 12, 2008 
The Peace Corps :: performance and accountability report :: fiscal year 2008 65

Independent Auditor’s Report on Internal Control

To the Director and Inspector General, 

 Peace Corps 

We have audited the financial statements of Peace Corps as of and for the year ended 

September 30, 2008 and have issued our report thereon dated November 12, 2008. We 

conducted our audit in accordance with the auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government 

Auditing Standards, issued by the Comptroller General of the United States; and Office of 

Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial 

Statements, as amended. 

In planning and performing our audit, we considered Peace Corps’ internal control over financial 

reporting as a basis for designing our auditing procedures, we obtained an understanding of 

design effectiveness of internal controls, determined whether they have been placed in 

operation, assessed control risk, and performed tests of Peace Corps’ controls for the purpose 

of expressing our opinion on the financial statements and to comply with OMB Bulletin No. 07-

04, but not for the purpose of expressing an opinion on the effectiveness of internal control over 

financial reporting. We did not test all internal controls relevant to operating objectives as 

broadly defined by the Federal Managers’ Financial Integrity Act (FMFIA) (31 U.S.C. 3512), 

such as those controls relevant to ensuring efficient operations. The objective of our audit was 

not to provide assurance on internal control. Accordingly, we do not express an opinion on the 

effectiveness of Peace Corps’ internal control over financial reporting. 

Our consideration of internal control over financial reporting was for the limited purpose 

described in the preceding paragraph and would not necessarily identify all deficiencies in 

internal control over financial reporting that might be significant deficiencies or material 

weaknesses. However, as discussed below, we identified certain deficiencies in internal control 

over financial reporting that we consider to be significant deficiencies. 

A control deficiency exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to 

prevent or detect misstatements on a timely basis. A significant deficiency is a control 

deficiency, or combination of control deficiencies, that adversely affects Peace Corps’ ability to 

initiate, authorize, record, process, or report financial data reliably in accordance with generally 

accepted accounting principles such that there is more than a remote likelihood that a 

misstatement of Peace Corps’ financial statements that is more than inconsequential will not be 

prevented or detected by the Peace Corps’ internal control. We consider the deficiencies 

described below to be significant deficiencies in internal control over financial reporting. 
66 The Peace Corps :: performance and accountability report :: fiscal year 2008

A material weakness is a significant deficiency, or combination of significant deficiencies, that 

results in more than a remote likelihood that a material misstatement of the financial statements 

will not be prevented or detected by the Peace Corps’ internal control. 

Our consideration of the internal control over financial reporting was for the limited purpose 

described in the second paragraph of this section and would not necessarily identify all 

deficiencies in the internal control that might be significant deficiencies or material weaknesses; 

however, we do not believe that the significant deficiencies described below are material 

weaknesses. 

Significant Deficiencies

These control deficiencies, detailed on the following pages, are summarized as follows: 

1. Accounting business processes need enhancement 

2. Information systems security controls need improvement 

In addition to the significant deficiencies described above, we noted certain matters involving 

internal control and its operation that we reported to the management of Peace Corps in a 

separate letter dated November 12, 2008. 

This report is intended solely for the information and use of the management of Peace Corps, 

the Peace Corps Office of Inspector General, OMB, the Government Accountability Office and 

Congress, and is not intended to be and should not be used by anyone other than these 

specified parties. 

Arlington, Virginia 

November 12, 2008 
The Peace Corps :: performance and accountability report :: fiscal year 2008 67

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

SIGNIFICANT DEFICIENCY 1 

ACCOUNTING BUSINESS PROCESSES NEED ENHANCEMENT 

Property Plant & Equipment 

Peace Corps continued to make improvements during FY 2008 in accounting for its capitalized 

assets. Several changes were made to the module program codes to generate more accurate 

reports. However, UKW identified the following issues through our FY 2008 internal control and 

substantive testing. 

Additions: 

• There was no clear audit trail to verify software developers’ hours spent for software 

development. Records were not properly maintained because management was not able to 

support the original calculation of the capitalized labor cost related to the software. 

Immaterial adjustments were subsequently made to the recorded balance of capitalized 

software costs as a result of audit testing. 

Disposals: 

• Capitalized travel and authorization costs could not be verified for several IT personnel. In 

addition, disposal dates could not be verified on a few assets disposed of in the current 

year. 

• Sufficient supporting documentation for initial capitalized balances could not be provided for 

one sample item disposed of in the current year. 

Physical Observation: 

• There was one instance where an asset observed during physical observation was listed 

twice in the asset listing. In addition, there were several instances where assets observed 

during physical observation could not be located in the asset listing. Peace Corps 

determined that these assets may not have been capitalized and therefore, would not be on 

the listing. However, supporting documentation was not provided to show that they should 

not be capitalized. 

• There were instances where assets from the asset listing could not be physically identified 

because they did not have identification numbers. 

Recommendations 

We recommend the Peace Corps Director: 

1a. Enforce current policies designed to ensure a detailed and clear audit trail for calculations of 

capitalized software developers’ labor costs, and ensure that relevant documentation is 

maintained and readily available. 

1b. Enforce policies outlining the roles and responsibilities of the property accounting and 

financial reporting personnel for performing accuracy, verification and completeness checks 

on the capitalized property listings. 
68 The Peace Corps :: performance and accountability report :: fiscal year 2008

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

 

Host Country Contributions 

Posts receive two types of Host Country Contributions (HCC): in-kind and cash. In-kind 

contributions are any non-cash items such as housing for volunteers, utilities, and donated 

supplies. Cash HCCs are used for payment to local contractors, allowances for volunteers and 

Peace Corps programs. Currently, about ten to twelve Posts have cash contributions balances 

in local currency as of September 30, 2008, for which the donor country may or may not have 

restricted the funds for specific purposes. Cash donations are recorded in FOR Post and 

recognized as an HCC receipt. Posts are required to deposit HCC receipts and submit a deposit 

slip to Headquarters. 

In fiscal year 2007 Peace Corps began working with legal counsel to determine the nature of the 

cash contributions and whether the cash received from host countries meet the definition of gifts 

or donations and whether the balance should be reported by Peace Corps on its principal 

financial statements in addition to footnote disclosure. The current guidance published in CFO 

Policy Statement 07-01, Accounting for Funds and Miscellaneous Items, was prepared, 

reviewed, approved and disseminated in accordance with the agency’s authority to provide 

definitive guidance where policy does not specifically cover a gray area in the law. This authority 

was issued to describe the procedures for accounting and reporting of HCC funds based on the 

determination that these funds were fiduciary resources, essentially the property of the donating 

country. 

Under the above guidance the HCC In-kind and cash contributions are disclosed in a footnote to 

the financial statements. This is inconsistent with generally accepted accounting principles, 

which require all assets held by a government agency to be reported and disclosed in the 

financial statements as entity or non-entity assets, other financing sources, and non-exchange 

revenues. 

In addition, the HCC Funds are currently controlled and reported at the Post level. In fiscal year 

2008, UKW was informed by the Office of Inspector General (OIG) about a suspected fraud in 

excess of $50,000 related to HCC Funds at one of the Posts. Improved controls are needed 

over access, dual authorization and handling of cash and other forms of HCC Funds. 

Recommendations 

We recommend the Peace Corps Director: 

1c. Reexamine its current CFO Policy 07-01 regarding HCCs to ensure that recognition, 

recording, monitoring and reporting its HCCs is consistent with generally accepted 

accounting principles for Federal entities, and modify the policy accordingly, which should 

include references to applicable standards. 

1d. Continue to work with legal counsel to determine the nature of these assets and any 

restrictions that may impact their reporting or classification. Peace Corps management 

should ensure the policy is updated to reflect the legal counsel and Peace Corps’ 

determination on how to report these assets. Further, they should implement the updated 

policy to address the proper reporting of HCC in the financial statements in accordance with 

the generally accepted accounting principles. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 69

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

1e. Set up strict guidelines for improving internal control over access, dual authorization and 

handling of cash and other forms of host country contributions to prevent embezzlement of 

such funds. 

Upward and Downward Adjustments 

Peace Corps management does not have formal policies and procedures for recording Upward 

and Downward adjustments (Recoveries). Upward and downward adjustments are not recorded 

in the Standard General Ledger (SGL) accounts 4871 and 4971. Peace Corps is currently 

recording upward and downward adjustments to account 7400 for a prior funding year and 

accounts 4801 or 6100 for a current funding year. We were unable to determine the total 

amount of such entries recorded in SGL. 

The effect of not recording Recoveries consistent with SGL guidance is the potential 

misstatement of the balances for Recoveries and Obligated Balances in the Statement of 

Budgetary Resources. 

Recommendations 

We recommend the Peace Corps Director: 

1f. Develop formalized policies and procedures for recording recoveries and upward 

adjustments of prior year obligations at the detailed level. Peace Corps management should 

provide oversight and guidance to ensure that the written policy and procedures are in 

accordance with its expectation and are properly implemented. A written acknowledgement 

by Peace Corps should accompany the formalized document. 

1g. Record the transactions for upward and downward activities at that transaction level for each 

entry. 

1h. Employ more care in the preparation and supervisory review of the Peace Corps financial 

statements. A more thorough analytical review of the statements should be performed by 

someone other the preparer of the financial statements. 

1i. Develop analytical procedures such as fluctuation analysis to include developing 

expectations that are directly attributed to financial and/or operational trends for obligations 

and recoveries and other material balances. The analysis should include trends based on 

dollar value and/or percentage changes over a period of time. Each expectation that is not 

met should be researched and results supported. Analytical tools that could be used are 

ratio analysis and trend analysis 

SIGNIFICANT DEFICIENCY 2 

INFORMATION SYSTEM SECURITY CONTROLS NEED IMPROVEMENT 

Peace Corps made improvements to its information systems control environment during FY 

2008. However, we found that certain internal control weaknesses related to the Financial 

Management System, Odyssey and Peace Corps’ overall Information Technology (IT) 

environment continued to exist at September 30, 2008. 
70 The Peace Corps :: performance and accountability report :: fiscal year 2008

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

Control Weaknesses 

Security Planning and Management 

 As reported under the Fiscal Year 2008 Federal Information Security Management Act 

(FISMA) Audit, Peace Corps has not certified and accredited all of the agency’s 

information systems. Specifically, the Domestic and International General Support 

Systems which support the financial management systems have not been certified and 

accredited. Without completing the certification and accreditation process, senior level 

agency officials will not have taken the appropriate steps to mitigate or accept risk for 

their information systems as required by OMB. In addition, without a complete 

certification and accreditation package (i.e. security plans, risk assessments, 

contingency plans) proper security may not be administered over the data within the 

agencies information systems. 

 Peace Corps policies regarding employee terminations are out of date and not properly 

documented. The Peace Corps termination policies are part of MS 671: Termination 

Process for Peace Corps Staff. The policies have not been updated since 1983. The 

lack of a concise, documented termination policy could prohibit the necessary 

completion of all actions required when an employee is separated/terminated from the 

agency. 

Service Continuity 

During the Fiscal Year 2008 FISMA Audit, we noted the following regarding Peace Corps’ 

controls surrounding contingency planning for agency’s information system environment: 

 The Peace Corps agency-wide Business Impact Analysis had not been updated to 

reflect the agency’s current system environment and address the weaknesses identified 

during the fiscal year 2007 disaster recovery test. 

 Although a tabletop exercise was performed during the current year, the test plan did not 

include recovery or testing of all Peace Corps information systems. 

 Personnel with disaster recovery responsibilities had not received appropriate 

contingency training. 

 Peace Corps was unable to provide evidence of backup testing and there were no 

records of contingency plan testing to determine if the organization includes a full 

recovery and reconstitution of Peace Corps systems.

 The Odyssey contingency plan was tested during October 2008 however; the plan was 

not tested during fiscal year 2008. 

The lack of an up to date Business Impact Analysis creates a deficiency in the contingency 

planning process. A deficiency in this process means that key impacts or threats could be 

overlooked leading to the ineffective or delayed recovery of agency systems. The lack of 

Contingency Plan testing for Peace Corps systems increases the likelihood that agency 

systems will not be effectively recovered following a major disruption of service. In addition, the 

lack of Contingency Training may lead to individuals not understanding their roles during an 

emergency situation. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 71

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

Access Controls 

 We noted weaknesses relating to the Odyssey UNIX environment. Managementapproved access request forms were not on file for all individuals with access to the 

production environment servers. In addition, individuals with access to the servers 

retained access which did not match access granted on the access forms. Without 

management-approved access request forms, management can not track who has been 

given access to the system and management does not know if the appropriate personnel 

are accessing the system. 

Application software development and change control

 Peace Corps has improved controls surrounding the Odyssey change management 

procedures. However, Peace Corps had not developed adequate test plan standards 

and expectations for test results for all levels of testing related to Odyssey system 

changes. The proper development of standardized test plans for each level of testing 

(i.e., unit test, module test, integration test, alpha test, and regression test) helps ensure 

all the general controls and necessary application processing requirements of the 

system have been successfully tested. Management can not ensure the reliability of its 

system processes without adequately documented change and configuration test plans. 

 Developers for the FOR HQ application had access to the production environment of the 

FOR HQ application. In addition, multiple accounts for the same individuals were present 

in the production environment. Inadequate segregation between development and 

production environments increases the risk of inadvertent or intentional unauthorized 

software modifications being placed in the production environment. Unauthorized 

software modifications, or modifications that have not been independently reviewed, may 

go undetected. As a result, the ability to investigate and address any identified issues in 

a timely manner is diminished. Multiple unnecessary accounts for the same individuals 

also increase the risk that an account may be used improperly. 

As required by OMB Circular A-130, Management of Federal Information Resources, 

Appendix III security accreditation provides a quality control and challenges managers and 

technical staff at all levels to implement the most effective security controls possible in an 

information system. 

 

National Institute of Standards and Technology (NIST) Special Publication 800-37, Guide for 

the Security Certification and Accreditation of Federal Information Systems, states “It is 

essential that agency officials have the most complete, accurate, and trustworthy 

information possible on the security status of their information systems in order to make 

timely, credible, risk-based decisions on whether to authorize operation of those systems. 

The information and supporting evidence needed for security accreditation is developed 

during a detailed security review of an information system, typically referred to as security 

certification. Security certification is a comprehensive assessment of the management, 

operational, and technical security controls in an information system, made in support of 

security accreditation, to determine the extent to which the controls are implemented 

correctly, operating as intended, and producing the desired outcome with respect to meeting 

the security requirements for the system. The results of a security certification are used to 

reassess the risks and update the system security plan, thus providing the factual basis for 

an authorizing official to render a security accreditation decision.” 
72 The Peace Corps :: performance and accountability report :: fiscal year 2008

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

NIST Special Publication 800-53, Revision 2 Recommended Security Controls for Federal 

Information Systems Control CP-4 Contingency Plan Testing and Exercises states: “The 

organization: (i) tests and/or exercises the contingency plan for the information system at 

least annually using tests and/or exercises to determine the plan’s effectiveness and the 

organization’s readiness to execute the plan; and (ii) reviews the contingency plan 

test/exercise results and initiates corrective actions. The organization coordinates 

contingency plan testing and/or exercises with organizational elements responsible for 

related plans.” 

NIST Special Publication 800-53, Security Control CP-10 Information System Recovery and 

Reconstitution states: “The organization employs mechanisms with supporting procedures 

to allow the information system to be recovered and reconstituted to a known secure state 

after a disruption or failure.” 

NIST Special Publication 800-53 Revision 2, Security Control CM-3, states the following 

regarding configuration management policy and procedures, “The organization authorizes, 

documents, and controls changes to the information system. The organization manages 

configuration changes to the information system using an organizationally approved process 

(e.g., a chartered Configuration Control Board). 

NIST Special Publication 800-53 Revision 2, Security Control CM-5, states the following 

regarding access restrictions for change, “The organization: (i) approves individual access 

privileges and enforces physical and logical access restrictions associated with changes to 

the information system; and (ii) generates, retains, and reviews records reflecting all such 

changes.” 

OMB Circular A-130, Management of Federal Information Resources, Appendix III, requires 

the practice of least privilege to be used to restrict a user’s access (to data files, to 

processing capability, or to peripherals) or type of access (read, write, execute, delete) to 

the minimum necessary to perform his or her job. 

Recommendations

We recommend the Peace Corps Director ensure that: 

2a. Full certification and accreditation is completed for the Domestic and International 

Infrastructures that support the financial management system in accordance with Peace 

Corps policy and OMB Circular A-130 guidance. 

2b. Agency’s termination policies are updated to reflect the current termination procedures. 

2c. The Business Impact Analysis is reevaluated and updated to accurately represent the 

current Peace Corps environment and address the deficiencies noted in the fiscal year 2007 

disaster recovery test. 

2d. A full Disaster Recovery test is conducted that will ensure all system Contingency Plans are 

included, as well as testing of system backups to determine if procedures for reconstitution 

and recovery of the systems are adequate. In addition, ensure training is provided to 

personnel with disaster recovery responsibilities. 
The Peace Corps :: performance and accountability report :: fiscal year 2008 73

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL, CONTINUED 

2e. Procedures are developed and implemented for periodically reviewing the Odyssey UNIX 

user accounts. In addition, ensure that user access request forms are completed and kept 

updated according to individual system access rights for each individual with system access. 

2f. Odyssey systems changes developed and tested outside of the standard development and 

test environments are adequately documented. In addition, ensure that functional leads 

testing and approval of component changes prior to migration to the production environment 

are documented. Standardize change testing documentation requirements and ensure that 

test plans and results are reviewed prior to migration to the production environment. 

2g. Logical access controls are implemented to restrict a developer from having access to the 

production environment of the FOR HQ application. If resources prohibit complete 

segregation of access, then compensating controls should be implemented to reduce the 

risk associated with access that is not segregated among environments. Compensating 

controls such as updating the FOR HQ change control procedures to include reviews of 

privileged user activity and management approvals of all changes prior to migration should 

be implemented. 

2h. System administrator access to the FOR HQ SQL Server is reviewed periodically and 

unused and unnecessary accounts are removed.
74 The Peace Corps :: performance and accountability report :: fiscal year 2008

Independent Auditor’s Report on Compliance and Other Matters 

To the Director and Inspector General, 

 Peace Corps 

We have audited the financial statements of Peace Corps as of, and for the year ended 

September 30, 2008, and have issued our report thereon dated November 12, 2008. We 

conducted our audit in accordance with the auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government 

Auditing Standards, issued by the Comptroller General of the United States; and Office of 

Management and Budget (OMB) Bulletin 07-04, Audit Requirements for Federal Financial 

Statements.

The management of Peace Corps is responsible for complying with laws and regulations 

applicable to Peace Corps. As part of obtaining reasonable assurance about whether Peace 

Corps’ financial statements are free of material misstatements, we performed tests of Peace 

Corps’ compliance with certain provisions of laws and regulations, non-compliance with which 

could have a direct and material effect on the determination of financial statement amounts and 

certain other laws and regulations specified in OMB Bulletin 07-04. We limited our tests of 

compliance to these provisions and we did not test compliance with all laws and regulations 

applicable to Peace Corps. Providing an opinion on compliance with certain provisions of laws 

and regulations was not an objective of our audit, and, accordingly, we do not express such an 

opinion. 

The results of our tests of compliance with laws and regulations described in the preceding 

paragraph disclosed no instances of reportable noncompliance or other matters that are 

required to be reported under Government Auditing Standards or OMB guidance. 

This report is intended solely for the information and use of the management of Peace Corps, 

the Peace Corps Office of Inspector General, GAO, OMB and Congress, and is not intended to 

be and should not be used by anyone other than these specified parties. 

Arlington, Virginia 

November 12, 2008 
This page was intentionally left blank.
o th e r acc o mpany i ng i nf o rmat i o n

Agriculture Volunteer, Niger
The Peace Corps :: performance and accountability report :: fiscal year 2008 77

Other Accompanying Information

As required by the Reports Consolidation Act of 2000 and Office of Management and Budget guidance, I am 

pleased to submit the following summarizing what I consider to be the most serious management challenges facing 

the Peace Corps. This statement has been compiled based on Office of Inspector General (OIG) audits, investigations, evaluations and the general knowledge of the agency’s operations.

Sincerely,

Kathy A. Buller, Inspector General

September 30, 2008

Challenge Post Imprest Fund Management and Other Cashier Operations

Peace Corps manages cash accounts maintained as imprest funds at 68 posts in the countries served. The total 

value of funds flowing through the imprest funds is projected to be approximately $19.1 million for FY 2008. 

The fund’s purpose is to manage the numerous day-to-day business activities carried on at Peace Corps posts. 

In FY 2007, we reported that the Peace Corps incurred over $85,000 in losses due to embezzlement and theft 

of funds managed at posts. Incidence of imprest fund-related embezzlement and theft leading to cash losses 

continues to be a management challenge. We investigated and confirmed that an embezzlement in excess of 

$55,000 occurred at a post in Africa. The embezzlement resulted from failing to follow policy and circumventing internal controls related to separation of duties. Also, routine Inspector General post audits during 

this fiscal year continue to disclose problems involving management of the imprest fund and other cashier 

operations. For example, at a post in Central America our audit disclosed a total breakdown in internal control 

over the billings and collections processes resulting in unaccounted funds amounting to nearly $7,000. These 

losses have resulted from ineffective oversight and a lack of internal control over the imprest fund and other 

cashier operations. The Agency recently revised and strengthened its policies related to imprest fund management. However, many of the problems stem from post staff failing to follow policies and a lack of effective 

supervisory oversight. 

Challenge Information Technology Management

Management has made improvements in strengthening the Peace Corps’ information technology architecture 

and security management. However, there are some issues related to information security and risk management of system architecture that remain a management challenge. The most significant issues follow:

•	 Eight of twelve of the agency’s information systems have not received final certifications and

accreditations indicating that they are acceptable to use.

•	 Processes for systems configuration management have not been fully or consistently implemented.

•	 Eleven of the twelve Peace Corps systems’ contingency plans have not been tested in accordance with

National Institute of Standards and Technology policy to ensure full recovery following a major disruption of service.

0

The Inspector General’s Statement on 

the Peace Corps’ Management and Performance Challenges
78 The Peace Corps :: performance and accountability report :: fiscal year 2008

Other Accompanying Information

Challenge Budget Shortfall

Peace Corps’ overall FY 2008 budget derived from appropriated funds is $330.8 million. Approximately 80 

percent of the budget is used to directly fund Volunteer operations at the overseas posts with the balance of 

the budgetary resources funding support services. This year’s budget shortfall is estimated to be about $18 

million. The combination of a weak U.S. Dollar and higher energy costs have resulted in significant increases 

in operating costs abroad. A large percentage of the overall annual expenditure to operate 68 overseas Peace 

Corps posts is made using local currencies. Losses attributed to foreign currency exchange alone are anticipated at almost $9 million. Peace Corps managers have been asked to make significant cuts in their budgets to 

cover the shortfall and to place a hold on many planned projects slated to enhance performance in anticipation 

that the Agency could be operating at the current budget level well into FY 2009 as a result of a continuing resolution. Increased inflationary pressures and foreign currency losses will continue to impact the Peace Corps’ 

operating budget. As a result, we believe it will be a management challenge for the Peace Corps to sustain its 

operations at current levels.
The Peace Corps :: performance and accountability report :: fiscal year 2008 79

Other Accompanying Information

To: Kathy A. Buller, Inspector General

From: Ron Tschetter, Director

Date: October 10, 2008

Subject: Agency Response to the Inspector General’s Statement on 

Management and Performance Challenges

Thank you for your statement of September 30, addressing the management and performance challenges faced 

by the Peace Corps, as required by the Reports Consolidation Act of 2000 and OMB guidance.

As the Office of the Inspector General (OIG) carries out its work through audits, investigations, and evaluations in order to prevent and detect fraud, waste, abuse, and mismanagement, and promote economy, effectiveness, and efficiency in government, the agency is pleased to support that work.

I would like to address the areas of challenge identified in your statement. The agency continues to strive for 

constant improvement as it carries out its worldwide mission. 

Post Imprest Fund Management and Other Cashier Operations 

During FY 2008, Peace Corps management instituted several policies and procedures to strengthen internal 

controls relative to post imprest fund management and operations. In order to mitigate imprest fund management risk, we issued a CFO Bulletin pertaining to cash management at post to clarify roles and responsibilities of cashiers, Administrative Officers, and Country Directors to prevent cashier irregularities and added a 

new reporting requirement for cash verification submitted to Headquarters. Also, we developed and deployed 

a self-paced training module for the Administrative Officers and Country Directors covering imprest fund 

controls and an understanding of actions necessary to mitigate risk. To further improve cash management 

controls in other cashier operations, the Office of the Chief Financial Officer will develop and issue additional 

policy regarding internal controls in billings and collections processes.

During this fiscal year, the agency continued to reduce the amount of dollars held in overseas imprest funds by 

15 percent. This reduction was the result of:

•	 Automated electronic funds transfer replenishments for post imprest funds

•	 Continued issuance of updated financial policy via CFO bulletins and updated Manual Sections

•	 Increased FOR Post controls and on-site/web based FOR Post training at posts

These efforts will continue during the upcoming fiscal year along with the Office of the Chief Financial Officer 

providing cashier training and cashier supervisors training to further improve the post knowledge and understanding of cashiering and the associated internal controls. 

0

Agency Response to the Inspector General’s Statement on 

the Peace Corps’ Management and Performance Challenges
80 The Peace Corps :: performance and accountability report :: fiscal year 2008

Other Accompanying Information

Information Technology Management

The current plan for the agency, based on a reduced budget and the availability of information technology 

resources, is to certify and accredit four systems per year, up from three systems per year. In FY 2009 and FY 

2010 we will certify and accredit the remaining eight systems, bringing our total of certified and accredited 

systems to 12. We will then continue the process of certifying and accrediting four systems per year for all new 

systems in FY 2011 and beyond. 

All agency systems developed by the Office of the Chief Information Officer are standard configuration management systems and are governed by a standard configuration management process. We are in the process of 

implementing Federal Desktop Core Configuration, the current OMB mandate, and this will be completed in 

FY 2009. 

Working with our partners, in FY 2007, we executed a full Disaster Recovery test at our offsite facility in Philadelphia, PA. There were several problems noted by the agency with last year’s Disaster Recovery test, and in 

light of those problems, changes made to existing systems and the implementation of new systems, and funding issues faced by the agency, the decision was made not to conduct a full Disaster Recovery test for fiscal 

year 2008. The Peace Corps Business Impact Assessment was scheduled to be reevaluated every two years; 

however, the update was put on hold due to a data center study being performed this year. Pending the availability of funds and the completion of a data center study, a full Disaster Recovery test is planned for FY 2009 

which will fulfill the agency’s recovery needs. Each of the agency’s current individual systems’ contingency 

plans will be tested per National Institute of Standards and Technology norms in the scheduled certification 

and accreditation process above during FY 2009 and FY 2010.

Budget Shortfall

We agree that the decrease in purchasing power due to rapidly rising inflation and foreign currency losses will 

affect the level of operations at the Peace Corps, most notably the total number of Volunteers in the field. 

Throughout FY 2008, Peace Corps leadership closely monitored the affects of inflation and foreign currency 

losses and made decisions that enabled the agency to operate soundly in FY 2008. Furthermore, the Peace 

Corps has prepared an FY 2009 operating plan which will allow us to run an effective program. It is hoped that 

in FY 2009 Congress will at least meet the appropriation level requested by the President of $343.5 million, 

which will allow the Peace Corps to increase Volunteer numbers, and continue to invest in operational activities that will enhance the Peace Corps’ overall performance.

0
The Peace Corps :: performance and accountability report :: fiscal year 2008 81

Other Accompanying Information

Summary of Financial Statement Audit and Management Assurances Tables

0

Summary of Financial Statement Audit

Audit Opinion Unqualified

Restatement No

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

Total Material Weaknesses 0 0 0 0 0
82 The Peace Corps :: performance and accountability report :: fiscal year 2008

Other Accompanying Information

Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses 0 0 0 0 0 0 

Conformance with Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Systems conform to financial management system requirements

Non-Conformances Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

Total Non-Conformances 0 0 0 0 0 0
The Peace Corps :: performance and accountability report :: fiscal year 2008 83

Other Accompanying Information

Improper Payments Information Act (IPIA)

No improper payments were identified this fiscal year internally or by the external auditors that would reach 

the defined Improper Payments Information Act (IPIA) of 2002 annual threshold of 2.5 percent and $10 million. The Peace Corps has no programs and activities that are risk susceptible to such significant improper 

payments. The Peace Corps is not identified in Appendix C, OMB Circular No. A-123 (formerly Section 57, 

“Programs for which Erroneous Payments Information is Requested,” in OMB Circular No. A-11). 
app e nd i c e s

Business Volunteer, Tonga
The Peace Corps :: performance and accountability report :: fiscal year 2008 85

Appendices

Appendix 1

Summary of Audit Findings

Appendices 0

Appendix 1

Summary of Audit Findings 

Significant Deficiency 1 - Accounting Business Processes Need Enhancement 

Estimated 

Audit Recommendations Completion

Improve controls associated with Property, Plant and Equipment (PP&E), calculating software 2nd Qtr FY 09 

developers’ labor costs and verifying property accounting. 

Strengthen internal controls over receipting and recording Host Country Contributions. 3rd Qtr FY 09 

Record upward and downward adjustments (recoveries) of prior year obligations consistent 1st Qtr FY 09 

with U.S. General Ledger guidance. 

Significant Deficiency 2 – Information System Security Controls Need Improvement 

Estimated 

Audit Recommendations Completion

Complete full certification and accreditation for the domestic and international infrastructures that 2nd Qtr FY 10 

support the financial management system Odyssey. 

Update the agency’s employee termination policies. 2nd Qtr FY 09 

Reevaluate and update the Business Impact Analysis to reflect the agency’s current system 3rd Qtr FY 09 

environment and address deficiencies noted in the FY 2007 Disaster Recovery test. 

Conduct a full Disaster Recovery test to ensure all system contingency plans function; Test 3rd Qtr FY 09 

system backups and provide disaster recovery training to personnel. 

Review the Odyssey UNIX server user accounts and maintain user access requests. 3rd Qtr FY 09 

Document all Odyssey system changes; Standardize change testing documentation and review 2nd Qtr FY 09 

test plans and results prior to migration to the production environment. 

Implement controls to restrict developer access to the FOR Headquarters application production 2nd Qtr FY 09 

environment and perform management review of all changes prior to migration to the production 

environment. 

Periodically review system administrator access to the FOR Headquarters server and remove 2nd Qtr FY 09 

unused accounts. 
86 The Peace Corps :: performance and accountability report :: fiscal year 2008

Appendices

Appendix 2

Glossary of Acronyms 

BFC Budget Functional Classification

CFO Chief Financial Office

CIRS Crime Incident Reporting System

DOS Department of State

EFT Electronic Funds Transfer

FECA Federal Employees 

Compensation Act

FISMA Federal Information Security

Management Act

FMFIA Federal Managers’ 

Financial Integrity Act

FSN Foreign Service National

FY Fiscal Year

GAO U.S. Government Accountability

Office

HCC Host Country Contributions

HCN Host Country National

HRM Human Resource Management

HQ Headquarters

IMA Internal Management 

Assessment

IPIA Improper Payments 

Information Act

IT Information Technology

MD&A Management’s Discussion and

Analysis

NIST National Institute of Standards

and Technology

OIG Office of the Inspector General

OMB Office of Management 

and Budget

OPM Office of Personnel Management

OPSI Office of Private Sector Initiatives

OSIRP Office of Strategic Information,

Research, and Planning

PCSSO Peace Corps Safety 

and Security Officer

PCV Peace Corps Volunteer

PEPFAR President’s Emergency Plan 

for AIDS Relief

PMA President’s Management Agenda

PP&E Property, Plant and Equipment

PSC Personal Service Contractor

RPCV Returned Peace Corps Volunteer

SGL Standard General Ledger

UKW Urbach Kahn and Werlin LLP

VDS Volunteer Delivery System

Produced by the Peace Corps

Paul D. Coverdell Peace Corps Headquarters

1111 20th Street NW | Washington, DC 20526

A PDF version of this report is available at www.peacecorps.gov/docs. 

Send feedback to the Peace Corps at the mailing address, or at www.peacecorps.gov/contactus.