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[Senate Report 111-122]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 268

111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-122

======================================================================

 
    FOREIGN ASSISTANCE REVITALIZATION AND ACCOUNTABILITY ACT OF 2009

                                _______
                                

                February 2, 2010.--Ordered to be printed

          Mr. Kerry, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                         [To accompany S. 1524]

    The Committee on Foreign Relations, having had under 
consideration the bill (S. 1524), to strengthen the capacity, 
transparency, and accountability of United States foreign 
assistance programs to effectively adapt and respond to new 
challenges of the 21st century, and for other purposes, reports 
favorably thereon, with an amendment in the nature of a 
substitute, and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................2
 IV. Cost Estimate...................................................19
  V. Evaluation of Regulatory Impact.................................23
 VI. Changes in Existing Law.........................................23

                               I. PURPOSE

    The purpose of S. 1524 is to strengthen the capacity, 
transparency, and accountability of United States foreign 
assistance programs to effectively adapt and respond to new 
challenges of the 21st century.

                          II. COMMITTEE ACTION

    S. 1524 was introduced by Senators Kerry, Lugar, Menendez, 
Corker, Cardin and Risch on July 28, 2009. It is cosponsored by 
Senators Shaheen, Casey, Merkley, Johnson, McCaskill, Kaufman, 
Gillibrand, Lautenberg, Hagan, Feinstein, Dodd, Durbin, 
Schumer, Cantwell, Snowe, Bond, Johanns, and Collins. On 
November 17, 2009, the committee ordered the bill to be 
reported favorably, with an amendment in the nature of a 
substitute, by roll call vote of 15 in favor and 3 opposed.

                            III. DISCUSSION

    The Foreign Assistance Revitalization and Accountability 
Act (S. 1524--FARAA) of 2009 authorizes legislation to 
strengthen U.S. foreign assistance efforts in three areas: 
rebuilding policy and strategic planning capacity at the U.S. 
Agency for International Development (USAID); increasing 
accountability and transparency of U.S. foreign assistance 
programs across all government departments and agencies; and 
strengthening personnel and human resources at USAID.
    Over the course of two years, beginning in the 110th 
Congress and continuing through the 111th Congress, the 
committee has undertaken an in-depth examination of U.S. 
foreign assistance and development efforts. This has entailed 
significant staff research, consultations and deliberations 
with country missions, country team officials, senior 
government officials, key NGO, civil society, private sector, 
academic and think-tank stakeholders, and numerous fora, 
discussion groups, and roundtables.
    One of the first analyses undertaken by the committee was 
to examine key trends and assumptions that will affect U.S. 
foreign policy in the next 10-15 years. The committee notes the 
following:

   Emergence of multi-polar system.  A continuing process of 
        depolarization and fragmentation of power in the 
        international system is taking place. A global multi-
        polar system is emerging that now includes China, India 
        and others, underlying an unprecedented transfer of 
        wealth roughly from West to East. The relative power of 
        non-state actors is also increasing, concurrent with 
        the decreasing influence of state power in certain 
        areas.

   Transformation of global economy.  Emergence of a multi-
        polar global economy in which developing countries' 
        growth and stability matters, especially, but not only, 
        to Asia, to the U.S. economy and to U.S. national 
        security. The global economy is far more interconnected 
        and interdependent than many Americans realize.

   Non-state actors.  The behavior of non-state actors (from 
        drug and criminality across borders to terrorism) puts 
        U.S. security at risk and tends to operate in more than 
        50 weak or fragile states: this includes not just 
        Somalia and Afghanistan, but also Colombia, Mexico, 
        Pakistan, the Philippines and other stronger states. In 
        certain areas, state monopoly is declining and has 
        resulted in greater insecurity.

   Environmental trends.  The world is facing catastrophic 
        environmental trends and key systems are under 
        pressure: deforestation is being driven by demands for 
        food for an increasing world population, our oceans 
        face increasing dead zones and are being damaged by 
        overfishing, and all of these environmental pressures 
        are exacerbated by global warming. Human activity has 
        disrupted three major biological cycles: the nitrogen 
        cycle, the hydrologic cycle and the carbon cycle. The 
        effect has been to decimate oceans (2.5 billion people 
        depend on fish for nutrition and sustenance), cause 
        severe water scarcity (1.8 billion people at-risk), and 
        rapidly increase carbon in the atmosphere to 
        unsustainable levels.

   Scenarios for 2025. As stated in the National Intelligence 
        Council's "Global Trends 2025: A Transformed World" 
        report, four possible scenarios are likely to develop 
        by 2025: 1) consortium of power shared between 
        collaborating nations; 2) fragmentation of power; 3) 
        rise and supremacy of non-state actors; or 4) return to 
        a polarized international system led by 2-4 
        superpowers.

    The committee examined the state of U.S. foreign assistance 
and development programs and identified the following 
constraints:

   Lack of high-level visibility and resources for 
        development.  It is becoming an article of faith in the 
        foreign policy community that development is a third 
        pillar of U.S. national security, but in resources and 
        stature, our assistance programs are poor cousins to 
        diplomacy and defense. Senior U.S. policymakers, 
        including the President, have not had direct access to 
        an international development voice with a long-term 
        perspective when considering foreign policy issues. At 
        Cabinet meetings, at senior OMB budget meetings, at 
        senior National Security Council meetings, the 
        development focus has been missing. The absence of 
        senior USAID officials from the current White House 
        discussion on Afghanistan policy is the latest 
        manifestation of this arrangement. In particular, many 
        note that the Administrator's relevance in the 
        interagency is contingent on participation in three 
        areas: (1) attendance at Cabinet meetings; (2) direct 
        access to OMB for USAID budget matters; and, (3) 
        attendance at all relevant NSC Principals and Deputies 
        meetings. Even at the country team level, the committee 
        notes with concern new structural models in Iraq, 
        Afghanistan and Pakistan where the USAID mission 
        director reports to the Chief of Mission through a 
        special Ambassador for assistance, and informal reports 
        of alternate structural models in larger embassies 
        where the mission director reports to the Chief of 
        Mission through a regular State Department officer for 
        assistance. The committee firmly believes that the 
        USAID mission director should be the senior officer in 
        the field overseeing all U.S. development and 
        humanitarian efforts and that modifying this role is 
        leading to confusion and potentially undermining U.S. 
        development and foreign assistance objectives. To 
        clarify this situation, S. 1524 includes a provision 
        that mandates the USAID mission director as responsible 
        for coordinating all U.S. development and humanitarian 
        assistance efforts in a given country, under the 
        guidance of the Chief of Mission.

   Role confusion between short-term priorities and long-term 
        objectives.  The U.S. needs to strike a better balance 
        between the respective objectives of the State 
        Department and USAID--including how best to reconcile 
        State's shorter-term diplomatic priorities with USAID's 
        longer-term development goals. It is also important to 
        consider whether USAID's growing national security 
        mission is compatible with its development aims. For 
        example, can USAID participate effectively in 
        counterinsurgency and stabilization operations while 
        maintaining a credible humanitarian presence, or do 
        these functions demand a new approach altogether? There 
        is justification for aid programs that have both short-
        term strategic value and long-term development 
        objectives, but the line between these two goals is 
        often blurred. At a minimum, foreign aid accounts need 
        to be rationalized so that they support U.S. priorities 
        and the missions of the agencies in which they are 
        located.

   Fragmented and diffuse programming--lack of coordination in 
        Washington and in the field.  U.S. foreign aid programs 
        have become fragmented, spread out among numerous 
        agencies, and lack a coherent strategy. USAID--the 
        leading U.S. Government development agency--has been 
        weakened through a slow erosion of manpower, resources, 
        and authorities. In the past, the administration has 
        responded to this problem not by strengthening USAID, 
        but by weakening it further by creating new programs 
        and operating entities in other departments. The 
        current administration is actively promoting the 
        concept of ``whole-of-government.'' The committee 
        cautions that a whole-of-government approach runs the 
        risk of further contributing to fragmentation in the 
        aid structure. A viable whole-of-government approach 
        demands a lead actor who is able to tap into a wide 
        range of capabilities and expertise, but ultimately has 
        the authority to make final decision about programs, 
        resources, and implementation objectives. The committee 
        believes a more optimal way to ensure whole-of-
        government expertise while providing for proper 
        coherence and coordination is to consider a ``centers 
        of excellence'' approach, which would house specialized 
        capabilities and resources focused on a discrete set of 
        objectives in a specific institution.

   Ensuring an appropriate distinction and separation between 
        diplomacy and development.  While it is critical that 
        U.S. development programs are closely connected to 
        foreign policy priorities established by the Secretary 
        of State, there must be an element of independence for 
        development programs. We are encouraged by the 
        administration's dual efforts represented by the 
        Presidential Study Directive (PSD) on Global 
        Development Policy and the Quadrennial Diplomacy and 
        Development Review (QDDR) to review all assistance 
        programs in the government, and we urge the 
        administration to consider consolidating as many 
        programs as feasible under the guidance and 
        coordination of a single development agency. The 
        committee hopes these studies will include reviewing 
        development programs that have migrated over to the 
        Department of Defense, as well as offices and programs 
        such as the Bureau of Population, Refugees and 
        Migration, Office of the Coordinator for Stabilization 
        and Reconstruction, and programs in the Departments of 
        Agriculture, Health and Human Services, Justice, Labor, 
        etc.

   Improving the policy, evaluation and human resources 
        capacity of USAID.  While broader reform questions are 
        deliberated, the committee believes there is a strong 
        consensus and imperative to rebuild the agency's 
        policy, strategic planning, evaluation and human 
        resources capacity. This is discussed in greater detail 
        below and is a primary focus of S. 1524. It is the 
        committee's belief that the agency should bring policy 
        formulation, program implementation and budgetary 
        authority under one roof.

   Ensuring we are reforming and shaping institutions to 
        future priorities not just current crises.  The 
        committee believes there is a tendency to reshape 
        institutions according to the needs of the immediate, 
        rather than providing due consideration for the 
        likelihood of similar interventions in the future. The 
        committee notes that providing an appropriate level of 
        civilian expeditionary capacity, ensuring proper 
        coordination between civilian and military elements, 
        and ensuring baseline capacity to plan and undertake 
        rebuilding efforts in conflict and post-conflict 
        societies are issues the U.S. will likely face and 
        capabilities that the U.S. will likely require in the 
        future. As several experts have noted, Afghanistan 
        represents in little more than a decade the seventh 
        occasion that the U.S. has undertaken a military 
        intervention in a state and then tried to rebuild it, 
        starting with Kuwait in 1991, and followed by Somalia, 
        Haiti, Bosnia, Kosovo, Afghanistan, and finally Iraq. 
        If recent history holds, this represents an area in 
        which the U.S. will continue to engage in the future.

    The committee believes it is important to begin creating a 
legislative framework for foreign aid reform, that would divide 
in two parts: 1) more immediate, shorter-term reforms designed 
to address existing deficiencies, and 2) broader, structural 
reforms intended to bring about more fundamental change to U.S. 
foreign assistance and development programs. S. 1524 is the 
culmination of the first effort and represents a bipartisan 
attempt to construct and pass legislation to respond to core 
deficiencies in our approach and programs.
    The committee recommends the following reform principles 
for consideration:

   New legislative framework for foreign assistance that 
        incorporates clear goals, objectives and priorities.  
        Many have called for a complete rewrite of the Foreign 
        Assistance Act of 1961. The committee believes this is 
        one of several options that both the executive and 
        legislative branches should strongly consider as a 
        cornerstone of foreign aid reform. There are too many 
        objectives representing diffuse priorities--currently, 
        the FAA contains 414 legislative directives. 
        Streamlining, flexibility and prioritization are 
        essential so that agencies know where to focus 
        resources and efforts. The committee believes that 
        streamlining procurement rules, earmarks, and 
        restrictions is equally important in order to allow 
        greater discretion and authority for civilian agency 
        leaders. We recommend that the administration 
        comprehensively assess the multitude of foreign aid 
        programs that exist in agencies throughout the USG and 
        consolidate many of them under a strengthened 
        development agency. The administration should 
        eventually undertake a regular international 
        development strategy to reflect new challenges around 
        the world, and to provide strategic guidance for U.S. 
        engagement.

   Renewed emphasis on country-level.  As current 
        deliberations regarding U.S. strategy for Afghanistan 
        clearly demonstrate, focusing on empowering local 
        actors, country ownership and supporting local 
        institutions, capacity and processes is the sine qua 
        non for stability and sustainable development. As a 
        first order priority, the U.S. Government must reverse 
        a trend of centralization and Washington-based 
        decision-making initiated in 2006 reforms and 
        epitomized by the ``F process.'' Country teams should 
        have a much greater role in determining programmatic 
        and funding priorities in partnership with local 
        actors. Legislation can support this shift by allowing 
        for greater funding flexibility at the country level, 
        including a larger amount of discretionary funds 
        overseen by the Chief of Mission and the USAID Mission 
        Director.

   Country Development Strategies.  The committee strongly 
        supports the development of longer-term country 
        development strategies to guide U.S. assistance 
        efforts. The committee believes these strategies should 
        emphasize a longer-term (3-5 year) timeframe and should 
        encompass all USG actors providing assistance in a 
        given country, not just State and USAID. It is critical 
        the strategy builds off existing national development 
        strategies (including but not limited to Poverty 
        Reduction Strategy Papers) and is closely coordinated 
        with other international donor efforts to ensure 
        effective leveraging of all development resources in a 
        particular country. The U.S. has done a poor job in the 
        past of harmonizing its assistance efforts with the 
        efforts of other bilateral and multilateral donors as 
        well as with the private sector and non-governmental 
        partners. The country strategies should be developed in 
        partnership with host country governments and in 
        consultation with appropriate congressional committees. 
        The committee also believes that U.S. foreign 
        assistance needs to better incorporate and integrate 
        regional perspectives to its assistance programs. In an 
        increasingly integrated economic, political and 
        security context, it is important that the U.S. does 
        not overlook regional linkages. The committee urges the 
        Secretary of State and Administrator of USAID to 
        consider developing regional assistance strategies, 
        similar to country-level strategies, that would also 
        incorporate 3-5 year timeframes and establish a broader 
        planning and development framework. The committee 
        recognizes that developing these strategies will 
        require a significant investment of time and manpower 
        and notes that these strategies should be a substitute 
        for the multitude of mission planning processes and 
        strategic documents that are compiled every year. The 
        committee believes that a single, unified country 
        development strategy over a longer-term period will 
        provide greater predictability of funding for 
        countries, will more accurately encompass the full 
        range of USG activities, and will streamline separate 
        planning processes into a single framework.

   Increasing flexibility and reducing directives.  The 
        committee recognizes the burden caused by the 
        proliferation of legislative directives and sector set-
        asides that have reduced necessary flexibility and 
        minimized the responsiveness of U.S. foreign assistance 
        and development programs. The committee strongly feels 
        that it is essential to revisit this issue and begin 
        considering a new framework, where the Congress 
        considers reducing legislative directives in exchange 
        for broader assurances on accountability by the 
        administration and greater input on country development 
        strategies.

   Enhanced voice for development.  Development requires 
        better coherence, stronger interagency coordination and 
        improved rationalization to determine which agencies 
        will undertake different foreign aid programs. The U.S. 
        needs to provide a unified development voice to 
        demonstrate our commitment to development issues, 
        fighting poverty and hunger and engaging with the 
        world. While it is critical for development to retain 
        an independent voice and to be housed in an independent 
        agency, the committee also believes that development 
        should remain aligned with the State Department and 
        foreign policy priorities. In an era where policymakers 
        recognize the national security imperative of foreign 
        assistance, and where ``smart power'' principles have 
        risen to the forefront, it is important that the 
        administration carefully and consistently coordinate 
        development work with broader foreign policy 
        objectives. The committee believes that the 
        administration should be open to considering creative 
        structural options, including providing the 
        Administrator of USAID with a broader coordination 
        mandate that would elevate the Administrator as 
        ``Director of Development'' with coordination authority 
        and budget oversight for all development and 
        humanitarian agencies, bureaus, offices, initiatives, 
        corporations, programs and activities across the U.S. 
        Government, with a direct report to the Secretary of 
        State.

   Continue investing in the operational capabilities of U.S. 
        foreign aid agencies, which currently have a 
        significant readiness and expertise deficit. This means 
        at least doubling the current overseas staffing levels 
        of USAID and ensuring that additional staff receives 
        cross-agency training and experience. Streamline the 
        organizational structure and improve organizational 
        capacity by rebuilding human resource capacity and by 
        strengthening technical, monitoring and evaluation 
        capabilities. This new platform must work with and be 
        responsive to the new international system--this means 
        effectively responding to the rise of non-state actors 
        and collaborating with non-governmental organizations, 
        foundations and the private sector.

   Review all foreign assistance accounts. There should be a 
        review of all aid programs that exist throughout the 
        government to consolidate and rationalize their 
        operations, including what agency should be managing 
        them. There is justification for aid programs that have 
        both short-term strategic value and long-term 
        development objectives, but the line between the two 
        should be clarified. Aid accounts need to be 
        rationalized so that they support U.S. priorities and 
        the missions of the agencies in which they are located. 
        In particular, the administration should consider 
        returning Economic Support Funds (ESF) to their 
        original mission as support for countries of strategic 
        interest to the United States, while assistance of a 
        development nature should be funded from the 
        Development Assistance (DA) account. The committee 
        believes there is a spectrum of assistance efforts that 
        encompasses ESF activities in support of foreign policy 
        priorities on one end, with transition activities (TI 
        account) existing more in the middle, through 
        activities supported on the other end of the spectrum 
        by DA funds and related development and humanitarian 
        accounts.

   Strengthen U.S. capacity to support fragile states and for 
        conflict prevention and response.  Development efforts 
        should focus on strengthening state capacity and 
        governance in order to preserve a degree of stability 
        in volatile and emerging countries. It is from failed 
        states where the greatest threats to U.S. security have 
        emerged. The civilian capacity of the U.S. Government 
        to undertake conflict and post-conflict operations and 
        programs is beset by fragmentation, coordination 
        problems and a lack of clear lines of authority or 
        clear delineations of responsibility. The Office of the 
        Coordinator for Reconstruction and Stabilization (S/
        CRS) was established to bring coherence to this area, 
        but the committee does not believe it is currently 
        fulfilling its mandate. S/CRS has been hampered by 
        inconsistent resources and hesitant political support 
        from the administration, undermining its role and 
        purpose. The committee believes that restructuring this 
        capacity and rationalizing functions between S/CRS, 
        USAID and other entities is essential. Foreign policy 
        priorities from Afghanistan and Pakistan, to Yemen, 
        Sudan, and the Democratic Republic of Congo demand a 
        more systematic, consistent and organized response. The 
        committee believes the administration should carefully 
        weigh and consider a range of options, including 
        granting primary responsibility for operational policy 
        formulation to S/CRS, ensuring that USAID is 
        responsible for program execution, and perhaps 
        assigning a greater role to the NSC to foster 
        interagency coordination on key conflict prevention, 
        response and stabilization priorities. The committee 
        also notes the proposal by the Secretary of Defense to 
        create three sets of pooled funds related to security 
        capacity, stabilization and conflict prevention 
        priorities. The committee welcomes greater interagency 
        cooperation and integrated civilian-military approaches 
        towards key priorities, but also cautions that greater 
        cooperation should not be a proxy for changing the 
        balance between civilian and military entities and 
        reducing the role of civilians in areas where civilians 
        have traditionally taken the lead.

   New emphasis on multilateralism.  The committee applauds 
        the steps the administration has taken to increase the 
        role and standing of the U.S. in different multilateral 
        fora, including the United Nations and G-20. It is 
        increasingly important for the U.S. to leverage the 
        resources of other states towards mutual priorities, to 
        ensure appropriate burden-sharing, and to obtain a 
        broader consensus from a wider range of actors. 
        Multilateralism is a valuable approach in an 
        interdependent, multi-polar system.

   Strengthening humanitarian assistance. Many agree that U.S. 
        humanitarian assistance generally works well and is 
        beset by fewer effectiveness or coordination problems 
        than other areas. Nonetheless, there are several 
        aspects that would benefit from a closer examination 
        and subsequent reform. First, while the U.S. provides 
        well over $3 billion per year in humanitarian 
        assistance worldwide, this assistance is divided 
        between State and USAID in a way that doesn't take full 
        advantage of the comparative advantages of each 
        organization This reduces the overall effectiveness of 
        USG-supported humanitarian programs. Second, some argue 
        that our humanitarian programs do not include enough of 
        a prevention aspect. Third, there continues to be a gap 
        between relief and development--insufficient attention 
        and resources are devoted to addressing and planning 
        post-conflict or post-disaster transitions to 
        development contexts. Fourth, there is lingering 
        confusion and overlap between the roles of civilians 
        and the military in humanitarian operations. Fifth, 
        improved coordination between U.S. efforts and 
        international efforts--both multilateral and bilateral, 
        as well as better coordination with non-state actors 
        (PVOs, private sector) is necessary. The committee 
        urges the administration to consider the following:

                   Improving coherence in the USG program for 
                humanitarian response. Agency efforts as they 
                relate to humanitarian crises should be 
                complementary and coordinated. The 
                administration should strongly consider better 
                integrating the humanitarian functions now at 
                the State Department and USAID under more 
                coordinated leadership responsible for the U.S. 
                Government's civilian response to humanitarian 
                crises that draws on comparative advantages of 
                each organization. The current USG response to 
                IDPs and refugees mirrors the lack of coherence 
                in the international community.

                   Ensuring civilian leadership and effective 
                civil-military cooperation.  The committee 
                believes the administration should establish 
                and articulate a policy that substantially 
                strengthens civilian humanitarian response 
                capabilities, while limiting the use of 
                military assets for humanitarian response to 
                those situations that require the military's 
                unique comparative advantages, such as speed 
                and magnitude of response, or the ability to 
                operate in conflict environments. The 
                inappropriate use of military assets in 
                humanitarian crises can undermine the 
                effectiveness of the USG's humanitarian efforts 
                by jeopardizing relationships with impartial 
                NGOs and calling into question the non-
                political character of humanitarian action. 
                Moreover, despite valuable and unique 
                capabilities in the area of humanitarian 
                response, the military is not well-equipped to 
                be the main provider of humanitarian 
                assistance. The committee strongly believes 
                that U.S. civil-military policy in humanitarian 
                affairs must place civilians firmly in the lead 
                of humanitarian response, with military units 
                playing a supporting role in limited 
                circumstances.

                   Transitioning from relief to development.  
                This area has been critically under-resourced 
                both within the USG and in other bilaterals and 
                multilaterals. The committee finds that our 
                post-conflict or post-disaster activities lack 
                a coordinated plan; often once the immediate 
                crisis passes, donors withdraw from the 
                affected area, instead of engaging in sustained 
                rebuilding and technical assistance to bridge 
                the gap to a more stable development 
                environment. As a result, the risk of relapse 
                is high and many vulnerable communities are not 
                given a sufficient opportunity to transition 
                out of crisis. This must become a higher 
                priority in the humanitarian assistance and 
                development communities.

                   Partnerships with other donors, 
                international organizations & civil society.  
                The committee acknowledges that a range of 
                effective international organizations, from 
                UNHCR and OCHA to WFP, play a crucial role in 
                ensuring unity of effort in world-wide 
                humanitarian response and promoting burden-
                sharing. Ensuring strong partnerships and 
                leveraging resources across different 
                organizations must remain key principles in our 
                humanitarian approach. At the same time, the 
                international humanitarian landscape is also 
                plagued by fragmentation, lack of coordination, 
                and overlapping roles and mandates. The 
                committee urges the U.S. to push a reform 
                agenda in the United Nations, World Bank system 
                and related international organizations and 
                multilateral institutions that will lead to 
                greater rationalization and more effective 
                leveraging of resources and comparative 
                capabilities.

    The sections below describe specific provisions in S. 1524 
to strengthen U.S. foreign assistance efforts in three areas: 
rebuilding policy and strategic planning capacity at USAID; 
increasing accountability and transparency of U.S. foreign 
assistance programs across all departments and agencies; and 
strengthening personnel and human resources at USAID. The 
Committee notes that S. 1524 is not meant to prejudge the 
outcomes of either the QDDR or the PSD. The committee does not 
believe we can afford to delay critical initial reforms to 
rebuild USAID's capacity. The committee intends for S. 1524 to 
complement the broader recommendations to be outlined in the 
QDDR and PSD.

Section 5. Policy and Strategic Planning

    The committee believes that in recent years there has been 
too little emphasis in developing the capacity of USAID to 
formulate international development policy, integrate important 
policy initiatives and innovative concepts into Agency programs 
and activities, or to ensure USAID leadership has proper 
control and authority over resource allocations and budget 
decisions.
    Many of the current problems were exacerbated by reforms in 
2006 that created a new position at the State Department, 
Director of Foreign Assistance (DFA) that was held concurrently 
by the USAID Administrator. A new bureau based in the State 
Department--the ``F bureau''--was established to support the 
DFA. It was given authority over most foreign assistance 
programs managed by USAID and the State Department. As a 
result, USAID's policy-making bureau and control over its 
budget were absorbed by the Department, and program decisions, 
formerly decentralized through USAID country missions, were re-
centralized at State. Scores of USAID employees who formerly 
handled policy and budgeting matters for the Agency were 
detailed out to the State Department and the F Bureau--many of 
these employees are still funded out of USAID's operating 
expense budget even though physically separate and distinct 
from the Agency. The essential bargain that underlined the 2006 
reform--that certain core functions would move to the State 
Department but that the Administrator of USAID would retain 
control of them as the dual-hatted Director of Foreign 
Assistance--seems to be undergoing some rethinking. Thus far, 
responsibilities for overseeing the F bureau have shifted to 
the Deputy Secretary of State for Management and Resources. 
Whether this shift remains temporary or becomes permanent is a 
key challenge facing the new USAID Administrator. The committee 
strongly feels that this function was created to bring greater 
coherence to USAID, not to lead to broader fragmentation. If 
the administration remains committed to USAID operating in an 
independent manner, then it should strongly consider putting 
control and authority over the F bureau and over USAID's 
budgetary functions under the direction of the USAID 
Administrator, in coordination with the Secretary of State.
    In addition, the committee also believes that additional 
steps are needed to bolster the standing and authority of the 
USAID Administrator in the interagency environment and to 
provide a credible development voice in the administration. To 
that end, the committee urges the President to consider 
allowing the Administrator to regularly attend and participate 
in Cabinet meetings, to provide direct access to the White 
House Office of Management and Budget for USAID budget matters, 
and for the Administrator to attend all relevant National 
Security Council Principals and Deputies meetings.
    The provisions authorized in S. 1524 under section 5 will 
not, by themselves, lead to significant changes without a 
concurrent commitment from the administration to elevate the 
policy and budgetary stature of USAID. But the committee feels 
these provisions are important to express Congressional intent 
in this area, as well as to lay an initial foundation that will 
help the agency restore lost policy, strategic planning and 
budgeting expertise. S. 1524 establishes a bureau for policy 
and strategic planning at USAID in order to begin restoring 
strategic decision-making and policy innovation to the agency. 
The bill authorizes an Assistant Administrator to oversee the 
bureau. It also authorizes a second deputy Administrator to 
oversee management and operations.
    As part of the newly established policy and strategic 
planning bureau, S. 1524 also establishes an Office of 
Leadership, Evaluation and Analysis in Development (OLEAD), 
meant to rebuild USAID's internal capacity to monitor, evaluate 
and improve the design of its programs and activities. OLEAD is 
intended to improve the design of assistance programs and 
ensure that projects include the collection of relevant data 
required to measure outcomes and impacts. The committee 
believes that a culture and practice of high quality evaluation 
should be revitalized at agencies managing foreign assistance 
programs, and that this requires incorporating concepts of 
evaluation and analysis that are used to inform policy and 
programmatic decisions, including training aid professionals in 
evaluation design. The committee also believes that OLEAD 
should establish strong partnership links with the academic 
community, implementing partners, and national and 
international institutions that have expertise in evaluation 
and analysis. OLEAD is authorized to be appropriated $5,000,000 
in FY10, and such sums as necessary for FY11.

Section 6. Council on Research and Evaluation of Foreign Assistance

    As we commit a greater level of resources to U.S. foreign 
assistance and development programs and look to fulfill 
President Obama's commitment to double our foreign aid 
investment by 2015, it is increasingly important that we have 
the means to evaluate and measure cases of development 
successes and failures, and to better understand what programs 
work, which do not, and what are the conditions that determine 
effectiveness.
    S. 1524 establishes an independent Council on Research and 
Evaluation (CORE) to assist in this vital task. The evaluation 
council is based in the executive branch, but it operates 
independently under the auspices of an interagency board. Its 
mandate is to objectively evaluate the impact of U.S. foreign 
assistance programs and their contribution to policies, 
strategies, projects, program goals, and priorities undertaken 
by the United States in support of foreign policy objectives. 
CORE will also cultivate an integrated research and development 
program to incorporate best practices from evaluation studies 
and analyses and foster and promote innovative programs to 
improve the effectiveness of U.S. foreign assistance.
    The committee finds that most development programs have a 
built in evaluation component that tracks results and outputs 
based on pre-determined benchmarks and inputs. In addition, 
institutions such as the Government Accountability Office (GAO) 
and the Office of the Inspector General (OIG) provide varying 
levels of accountability and oversight. However, there are 
several critical gaps in the way U.S. programs are analyzed, 
assessed and evaluated:

   GAO and OIG mandates do not fully address evaluation needs. 
         GAO does not currently have enough specialized 
        expertise to consistently evaluate development 
        programs, and because most of its studies and 
        investigations are congressionally driven, it is 
        sometimes unable to conduct methodical and recurring 
        evaluations and its resources are used primarily on the 
        most pressing issues of the congressional agenda. The 
        mandate of the OIG is to conduct audits and 
        investigations focused on detecting and preventing 
        fraud, waste, abuse and violations of law. This is a 
        crucial task, but this serves a different role than 
        conducting evaluations as a means to build programmatic 
        best practices for U.S. foreign aid programs.

   Current monitoring and evaluation efforts lack independence 
        and can suffer from institutional bias.  Because those 
        undertaking the evaluations are often linked to those 
        implementing the programs, it is sometimes difficult to 
        obtain an objective separation from implementer to 
        overseer as a basis for assessing results. In addition, 
        such evaluations are rarely questioned for their 
        research methodology or data gathering practices and 
        their results are often not incorporated back into the 
        design of new programs.

   Current evaluations focus more on measuring outputs rather 
        than outcomes or overall impact.  When implementers 
        assess the success of a school building project, for 
        example, often they measure how many schools were 
        built, instead of focusing on how the project affected 
        the overall quality of education in the community over 
        a period of years. Instead, the evaluation of education 
        outcomes would consider changes in literacy rates, 
        changes in graduation rates, changes in girls' 
        enrollment, improvements in math skills, or the number 
        of graduates who were placed in productive employment. 
        Evaluation information should come together to provide 
        a body of knowledge that can be drawn upon by future 
        project designers and incorporated into the design of 
        future programs.

   Existing evaluations are often not comparable across 
        government agencies, across donor countries, or across 
        country, sector, or approach.  Individual agencies may 
        conduct evaluations of their own projects or programs 
        but do not compare them to those of other agencies 
        doing similar work. There has been little comparative 
        or systematic analysis of the approaches between USAID 
        and USDA, or State and DoD, for example. Those making 
        policy decisions can benefit from analysis that asks 
        what types of sector programs have a greater impact on 
        poverty alleviation and which USG agencies have shown 
        to implement the most effective programs.

    The committee finds that a final gap is that the U.S. 
Government often fails to link lessons learned from 
evaluations, studies and assessment to innovative program 
design. There is a sharp disconnect between evaluations that 
have been undertaken and the design of new development projects 
and activities. Finding a way to better integrate evaluation 
with innovation and program design would improve the 
effectiveness, impact, scope and creativity of our development 
efforts.
    In light of the evaluation deficiencies discussed above, S. 
1524 establishes an independent evaluation council with a dual 
purpose:

   Regularly and objectively evaluate the relevance, impact 
        and results of development and foreign assistance 
        programs, strategies, projects, programs, and corporate 
        activities undertaken by the U.S. Government;

   Cultivate an integrated research and development program 
        that will incorporate best practices from evaluation 
        studies and analyses and foster and promote innovative 
        programs to improve the effectiveness of U.S. foreign 
        assistance.

    Specifically, the Council would be responsible for the 
following:

   Provide an objective basis for assessing results and 
        accountability to achieve development objectives and 
        develop a clearinghouse capacity to make available 
        knowledge and lessons learned to development 
        professionals, implementing partners, the international 
        aid community, and aid recipient governments;

   Design and conduct significant development research and 
        evaluation on development and aid effectiveness;

   Strengthen evaluation and research for foreign assistance 
        and development programs;

   Utilize rigorous methodologies, choosing from among a wide 
        variety of qualitative and quantitative methods common 
        in the field of social scientific inquiry;

   Partner with the academic community, implementing partners, 
        and national and international institutions that have 
        expertise in evaluation, research and analysis;

   Establish an integrated research and development program 
        that will foster and promote cutting edge and 
        innovative programs related to foreign aid and 
        development;

   Advise on research trends relating to development and 
        foreign assistance and the measures necessary to assure 
        continued and increasing progress;

   Recommend measures of coordination of research and 
        development among development and foreign assistance 
        departments, and allocate responsibilities for specific 
        programs of mutual interest;

   Recommend approaches through which the U.S. Government can 
        support development of evaluation capacity in 
        developing countries, and recommend strategies to 
        encourage use of evaluation findings among different 
        levels of decision-makers and implementers.

    To complement and serve as an interface between the Council 
and the U.S. Government agencies, the legislation establishes 
the Office of Leadership, Evaluation and Analysis in 
Development (OLEAD), based in USAID. Essentially, OLEAD will 
serve as an internal advisory resource for USAID in the design 
of programs and projects, and provide an authoritative voice 
linking evaluation and research results to strategic planning 
and policy options. It will serve as another interface between 
U.S. Government agencies and Council.
    The committee authorizes the Council as an independent U.S. 
Government institution based out of the Executive Branch that 
will work in coordination with the Secretary of State. In order 
to maintain programmatic and political independence, similar to 
the Office of the Inspector General, the legislation 
establishes a Board to oversee the Council. The Board is 
designed to be a mixture of U.S. Government agencies (State, 
Treasury, USAID, MCC, USDA, DoD, HHS), and outside of 
government representatives with a rotating chairperson. The 
Director of the Council reports directly to the Board, not to a 
particular agency or department. The Council has the authority 
to carry out any and all evaluations and research programs (via 
in-house expertise and contracted out as needed) on any and all 
activities they choose, limited only by budget and resources. 
The Council's mandate covers all foreign assistance programs. 
The legislation retains requirements that USAID and other 
agencies maintain current project-per-project monitoring of 
their programs and grantees--the Council is an additional tool 
to serve, in part, to ``evaluate the evaluations.'' The Council 
does not cover all programs and activities--it decides which 
programs and projects to analyze in a given year.
    The staff of the Council should be highly skilled and have 
broad authority across all civilian foreign assistance programs 
funded in whole or in part by the U.S. Government--including 
programs funded via the Department of State, Department of 
Defense, USAID, Overseas Private Investment Corporation, 
Millennium Challenge Corporation, U.S. Trade and Development 
Agency, U.S. Department of Justice, U.S. Department of 
Agriculture, Department of Health and Human Services, and 
others. The staff will be comprised of a mixture of detailees 
from other U.S. Government agencies, as well as outside 
secondments from related international organizations, bilateral 
agencies, academic institutions, think-tanks, non-profit 
organizations, and the private sector.

Section 7. Comprehensive Workforce and Human Resources Strategy for 
        USAID

    The committee has expressed strong concerns about the 
strength, direction and management of personnel and human 
resources at USAID. The strength of USAID lies with its 
people--officers who are developing the strategies and policies 
with host country governments on developing mature and capable 
institutions of governance that will be responsible for 
providing services to their population over the long-term. 
Unfortunately, the capacity and flexibility of USAID's foreign 
service corps has diminished considerably in recent decades. S. 
1524 intends to initiate a methodical and deliberate rebuilding 
process by, first and foremost, mandating a comprehensive 
review of all aspects of human resources and directing USAID to 
develop a comprehensive human resources strategy that will 
include the following elements:

   Determine long-term USAID personnel priorities, including 
        priorities over 5- and 10-year time periods;

   Identify career professional development programs for all 
        personnel, including training, language, and education, 
        interagency and intergovernmental rotations, and 
        assignment opportunities outside the United States 
        Government;

   Include an assessment of future development and foreign 
        policy priorities and the implications of such 
        priorities for technical and policy expertise, 
        including how to meet future unanticipated demands 
        brought about by manmade and natural disasters;

   Include an overseas facilities and security assessment 
        examining the implications of such facilities and 
        security for personnel increases;

   Include the appropriateness of regional platforms to 
        perform necessary USAID functions and to provide 
        services to other donors and organizations;

   Consider structural reform options to professionalize the 
        human resource capacity of USAID, including options to 
        outsource the entirety of the human resource capacity 
        of USAID; and

   Address the means to enable USAID to access cutting-edge 
        technical and managerial expertise.

    In developing the strategy, the Administrator shall 
consider, among other things:

   The objectives USAID is mandated to fulfill, and assess 
        whether its current workforce model effectively 
        supports the goals of USAID;

   The evolution of USAID's workforce and identify the 
        additional program demands that have been placed on the 
        workforce in the past 10 years;

   Different personnel and workforce management models from 
        other United States Government agencies, international 
        organizations, and the private sector and determine the 
        comparative advantages the models might offer and 
        whether they would allow USAID to better structure its 
        workforce to carry out its responsibilities and meet 
        the challenges of a changing environment;

   Different bureaucratic and legislative constraints facing 
        USAID in implementing a comprehensive workforce 
        planning and management system and how these 
        constraints can be addressed, including which 
        limitations, if any, currently exist that prevent USAID 
        from hiring the right people for the right positions in 
        a timely manner, including mid-level hires and reentry 
        of mid-level professionals into USAID, and how this 
        compares with other organizations, such as the 
        Department of State and the Millennium Challenge 
        Corporation (MCC), and how USAID compares to the 
        Department of State and the MCC in its ability to 
        attract and retain high caliber professionals;

   The advantages and disadvantages of USAID's use of 
        contractors in the last 10 years to carry out its core 
        mission and management responsibilities, through an 
        evaluation of the cost, efficiency, and availability of 
        qualified personnel and the effect of such use of 
        contractor expertise within the Federal Government;

   The scope and effectiveness of training, including the 
        availability of language training for USAID personnel 
        and the extent to which available trainings support 
        carrying out USAID objectives; and

   A cost analysis for using a contracting model versus a 
        direct hire model and determine the cost savings and 
        consequences that could result from the elimination of 
        institutional contractors and the hiring of the same 
        professionals as personal services contractors.

    To assist with this review, S. 1524 establishes a high-
level task force made up of senior government officials as well 
as outside experts and professionals that will participate in 
the development of the workforce and human resources strategy 
and will consult with, and provide information and advice to, 
senior management of USAID on matters and issues related to 
workforce planning, human resource recruitment and training, 
and other personnel issues as USAID develops the workforce and 
human resources strategy. S. 1524 also directs the Government 
Accountability Office to assess the new personnel strategy and 
ensure it is developed in a rigorous, accountable and strategic 
manner.
    Understanding that USAID may not currently possess 
sufficient in-house human resources expertise to undertake such 
a technically rigorous review, the bill directs the 
Administrator to contract with an independent organization to 
help USAID assess current human resource capacity, review how 
its human resource capacity matches up against USAID mandates 
and policy priorities, compare USAID's current human resource 
system and practices with best practices of other 
organizations, public and private, provide a set of 
recommendations to facilitate structural reform to USAID's 
human resources bureau; and assist with other issues related to 
supporting the development of the workforce and human resources 
strategy.
    Several other issues related to human resources have also 
come to the committee's attention. The committee understands 
that USAID's 5-year FY2009-2013 workforce plan does not cover 
all staff (in particular, non-direct hire staff), and lacks 
specific information as to the number, location, and skills of 
staff needed to meet USAID's program goals and needs. The 
committee believes it is crucial that USAID cover all staff 
when developing its FY2009-13 workforce plan and directs USAID 
to address this gap. The committee also understands that the 
current workforce plan does not directly address USAID's lack 
of reliable and up-to-date agency-wide staffing data. This is a 
high priority for the committee--it is essential that USAID 
provide consistent and reliable staffing data. The committee 
understands that USAID is undertaking some key human capital 
initiatives without a clear long-term vision and transparent 
process for establishing and communicating the agency's needs. 
This is impeding overseas missions' ability to effectively 
manage and contribute to these initiatives and is an issue that 
should be addressed promptly.
    Finally, there are concerns that USAID's Development 
Leadership Initiative (DLI) is not being implemented in a 
strategic manner, and that the consistency of training and 
mentorship of DLI participants varies depending on post. In 
general, the committee is concerned that DLI is rolling out in 
an ad hoc manner, with little regard for how the program can 
maximize USAID needs and retain, cultivate and develop DLI 
personnel. As a necessary starting point, the committee directs 
the Administrator to assign a senior officer to evaluate the 
current progress of DLI and to oversee its implementation as a 
central point of contact. The committee directs the 
Administrator to provide a report to the Senate Committee on 
Foreign Relations and the House Committee on Foreign Affairs no 
later than six months after the enactment of this Act on the 
status of DLI and progress made to address the above concerns.

Section 8. Personnel and Human Resources

    The committee strongly believes the Administrator should 
augment and expand external training, language training, and 
educational opportunities for Foreign Service and Civil Service 
personnel and expand opportunities for work assignments to 
entities outside the United States Government. A strong 
development agency should have a knowledgeable and capable 
workforce that is familiar with and has access to cutting edge 
development practices, methodologies, ideas, work experience, 
and programs. The Administrator should ensure that personnel of 
USAID have opportunities during their careers to obtain a range 
of knowledge-building work experiences and advanced education 
and training in academic and other relevant institutions in the 
United States and abroad to increase the capacity of USAID to 
fulfill its mission. It is imperative that USAID Foreign 
Service Officers receive adequate and appropriate language 
training before receiving assignments to overseas posts, 
especially to critical priority posts, and that such language 
training should be equivalent to the language training provided 
to Department of State Foreign Service Officers.
    S. 1524 directs USAID to allow personnel to undertake 
interagency and international rotations to bring a cross-
disciplinary focus to USAID. The bill emphasizes the importance 
of language training and seeks to ensure that all foreign 
service officers assigned to overseas posts, especially to 
critical priority posts in Iraq, Afghanistan and Pakistan, 
receive appropriate language training equivalent to that 
received by counterpart foreign service officers at the State 
Department.

Section 9. Strengthening Development Coordination in the Field

    The committee finds that the number of United States 
Government agencies carrying out foreign assistance activities 
and programs has proliferated in recent years. Global 
development policies and programs of the United States 
Government are generally scattered across 12 different Federal 
departments, 25 different Federal agencies, and nearly 60 
Federal Government offices. The expansion of Federal 
departments and agencies undertaking foreign assistance 
programming has led to fragmentation and coordination 
difficulties in the field. In order to best achieve foreign 
assistance objectives, maximize the resources of the United 
States Government, ensure programming coherence, avoid 
duplication and fragmentation, and enhance an effective whole-
of-government approach, direct responsibility for coordinating 
all development and humanitarian efforts of the United States 
Government in a country shall reside with the USAID mission 
director, under the overall direction of the chief of mission. 
S. 1524 mandates the USAID mission as responsible for 
coordinating all U.S. development and humanitarian assistance 
efforts in a given country, under the guidance of the Chief of 
Mission. The legislation also urges USAID to fundamentally 
reconsider the roles, responsibilities, structure and function 
of USAID missions in the 21st century, specifically:

   Whether missions are staffed and well suited for current 
        and emerging roles and responsibilities;

   Whether the management and organizational structure provide 
        the required flexibility while providing effective 
        oversight of programs;

   Whether the level of centralized versus decentralized 
        decisionmaking is appropriate for the current and 
        emerging context in which the mission is working;

   Whether there is sufficient flexibility in terms of 
        personnel to address fluctuations in funding for 
        programs, and if not, what type of flexibility would be 
        helpful;

   Whether up-to-date technical expertise and lessons from 
        prior projects are being systematically incorporated 
        into new program design;

   Whether missions of USAID are appropriately focused on 
        bilateral and multilateral donor coordination and 
        whether this is a priority for USAID personnel;

   What the appropriate relationship and balance are between 
        USAID missions and the broader United States mission in 
        a country;

   How effectively USAID is able to coordinate with the 
        Department of Defense, especially as the Department of 
        Defense implements an increasing number of development 
        and humanitarian programs;

   Whether the existing structure of the United States foreign 
        assistance system allows for proper coordination 
        between different Federal departments and agencies 
        implementing foreign assistance and development 
        programs to avoid duplication of effort; and

   What obstacles exist to more effective coordination, 
        including what structural or organizational 
        improvements would assist with more effective 
        coordination.

    It should be noted that nothing in this bill or in this 
section is intended to affect the independence of the Peace 
Corps. To fulfill its responsibilities successfully and to 
retain its unique people-to-people character, the Peace Corps 
must remain substantially separate from the day- to-day conduct 
and concerns of our foreign policy. The Peace Corps' role and 
its need for separation from the day-to-day activities of the 
mission are not comparable to those of other U.S. Government 
agencies with foreign assistance programs.
    Consequently, Peace Corps programs are not considered 
development and humanitarian activities subject to the 
authority of the chief of each special mission in section 9(a) 
of the bill. In addition, because of its unique status, the 
Peace Corps is not represented on the Council on Research and 
Evaluation of Foreign Assistance or the Advisory Board (section 
6) and Peace Corps involvement, if any, in the activities of 
the Council and Board will be limited to providing information.

Section 10. Transparency of United States Foreign Assistance

    S. 1524 establishes important transparency standards, 
including establishing recommendations for a uniform set of 
reporting standards and guidelines to be followed by all 
Federal departments and agencies so that taxpayers have a 
clearer understanding of what programs and activities are being 
funded and what outcomes are resulting. The committee strongly 
feels that U.S. citizens and recipients of U.S. foreign 
assistance should, to the maximum extent practicable, have full 
access to information on U.S. foreign assistance and 
development programs.

Section 11. Operating Expenses

    The committee understands that rigid funding streams have 
prevented some needed infrastructure, training and human 
resources reforms from occurring--S. 1524 provides additional 
flexibilities in the agency's operating expenses account to 
address immediate priorities and concerns.

                           IV. COST ESTIMATE

    In accordance with Rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides this 
estimate of the costs of this legislation prepared by the 
Congressional Budget Office.

                            United States Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 20, 2010.

Hon. John F. Kerry.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1524, the Foreign 
Assistance Revitalization and Accountability Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John Chin.
          Sincerely,
                                      Douglas W. Elmendorf.

                                ------                                

               Congressional Budget Office Cost Estimate

                                                  January 20, 2010.

                                S. 1524

                 Foreign Assistance Revitalization and 
                       Accountability Act of 2010

  AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON 
                           NOVEMBER 17, 2009

SUMMARY

    S. 1524 would establish the Council on Research and 
Evaluation of Foreign Assistance (CORE) to evaluate the impact 
of foreign assistance programs and would establish or expand 
several programs at the U.S. Agency for International 
Development (USAID).
    CBO estimates that implementing S. 1524 would cost $198 
million over the 2010-2014 period, assuming appropriation of 
the authorized and estimated amounts. Enacting the bill would 
not have a significant effect on direct spending or revenues.
    S. 1524 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of S. 1524 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                                       Changes in Spending Due to S. 1524
                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                            2010     2011     2012     2013     2014   2010-2014
----------------------------------------------------------------------------------------------------------------
                                CHANGES IN SPENDING SUBJECT TO APPROPRIATION \1\
Council on Research and Evaluation for Foreign
 Assistance
    Authorization Level.................................       0       30       35       40       45        150
    Estimated Outlays...................................       0       22       32       38       44        136
USAID Bureau of Policy and Strategic Planning
    Estimated Authorization Level.......................       9        9        5        5        5         33
    Estimated Outlays...................................       7        9        6        5        5         32
USAID Personnel Training
    Estimated Authorization Level.......................       6        6        6        6        6         30
    Estimated Outlays...................................       4        6        6        6        6         28
USAID Workforce and Human Resources Strategy
    Estimated Authorization Level.......................       1        1        *        *        *          2
    Estimated Outlays...................................       1        1        *        *        *          2
  Total Changes
    Estimated Authorization Level.......................      16       46       46       51       56        215
    Estimated Outlays...................................      12       38       44       49       55        198
----------------------------------------------------------------------------------------------------------------
Note:  USAID = U.S. Agency for International Development;
* = less than $500,000.
\1\Enacting the legislation also could have an insignificant effect on direct spending.

BASIS OF ESTIMATE

    For this estimate, CBO assumes that S. 1524 will be enacted 
by the middle of calendar year 2010 and that spending will 
follow historical patterns for existing and similar programs.

Spending Subject to Appropriation

    The bill would establish CORE and establish or expand 
several programs at USAID. In total, CBO estimates that 
establishing and expanding those programs would cost $198 
million over the 2010-2014 period, assuming appropriation of 
the authorized and estimated amounts.Council on Research and 
Evaluation for Foreign Assistance. Section 6 would establish 
CORE and authorize the appropriation of $255 million over the 
2011-2016 period for that purpose. Of those amounts, $150 
million would be authorized to be appropriated over the 2011-
2014 period. CORE, which would be a wholly owned government 
corporation in the executive branch, would be authorized to 
conduct research, analysis, and evaluations of the design, 
implementation, evaluation, and effectiveness of bilateral and 
multilateral foreign assistance programs. CBO estimates that 
implementing those research and evaluation programs would cost 
$136 million over the 2010-2014 period. The full $255 million 
authorized to be appropriated would be spent by 2019.
    USAID Bureau of Policy and Strategic Planning (PSP). 
Section 5 would establish a new PSP Bureau within USAID, which 
CBO expects would in large part resemble the Bureau for Policy 
and Program Coordination (PPC) that had existed at USAID prior 
to a series of reforms of the foreign assistance budget process 
initiated in 2006. Prior to being disbanded, the PPC Bureau had 
a total staff of 95 and operated with an annual budget of about 
$10 million. Following the 2006 reforms, approximately half of 
the PPC staff joined a new Bureau of Foreign Assistance (F 
Bureau) at the State Department, with the remaining staff 
reassigned to several other offices at USAID. CBO assumes that 
most of the USAID staff that are currently located in the State 
Department's F Bureau would return to USAID to staff the new 
PSP Bureau, and that many of the PPC staff who moved to other 
USAID offices would return to the new PSP Bureau. In addition, 
based on information from USAID, CBO expects that USAID would 
need to hire about 25 new staff members to carry out additional 
functions related to policy planning. Thus, CBO estimates that 
establishing a new PSP Bureau would cost $24 million over the 
2010-2014 period.
    Section 5 also would authorize the appropriation of $5 
million in 2010 and such sums as may be necessary in 2011 to 
establish an Office for Learning, Evaluation, and Analysis in 
Development within the new PSP Bureau. CBO assumes that this 
office would replace USAID's central evaluations office, which 
was recently established in the Management Bureau and received 
about $1 million in appropriations in 2009. CBO estimates that 
establishing the new office would cost an additional $8 million 
over the 2010-2011 period.
    USAID Personnel Training. Section 8 would direct the 
Administrator of USAID to augment and expand external training, 
language training, and educational opportunities for Foreign 
Service officers and Civil Service personnel. USAID spent 
almost $13 million on staff training in 2009. Based on 
information from USAID, CBO estimates that providing additional 
training and education would cost $28 million over the 2010-
2014 period.
    USAID Workforce and Human Resources Strategy. Section 7 
would establish a workforce and human resources task force and 
require the USAID Administrator to consult with the task force 
and hire an outside contractor to help develop a comprehensive 
workforce and human resources strategy. Based on information 
from USAID, CBO estimates that developing that strategy would 
cost $2 million over the 2010-2014 period.

Direct Spending

    Section 6 of S. 1524 would authorize CORE to accept gifts 
and donations from non-U.S. government sources (which are 
recorded as offsetting receipts, a credit against direct 
spending). Such gifts and donations, which CBO estimates would 
total less than $500,000 a year, could not be spent without 
further appropriation.

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    S. 1524 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

ESTIMATE PREPARED BY:

    Federal Costs: John Chin
    Impact on State, Local, and Tribal Governments: Marin 
Randall
    Impact on the Private Sector: Burke Doherty

ESTIMATE APPROVED BY:

    Theresa Gullo, Deputy Assistant Director for Budget 
Analysis

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to Rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. CHANGES IN EXISTING LAW

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman).

                     Foreign Assistance Act of 1961

SEC. 624. STATUTORY OFFICERS.

    (a)* * *

           *       *       *       *       *       *       *

    (d) Deputy Administrators.--There shall be in the United 
States Agency for International Development, among the 
statutory officers authorized by subsection (a), not more than 
2 Deputy Administrators, who shall assist the Administrator in 
all matters.
    (e) * * *
    (f) Assistant Administrator for Policy and Strategic 
Planning.--There shall be in the United States Agency for 
International Development, among the statutory officers 
authorized by subsection (a), an Assistant Administrator for 
Policy and Strategic Planning, who shall assist the 
Administrator and Deputy Administrators in matters related to 
policy planning, strategic planning, program design, research, 
evaluation, budget allocation and management, and in other 
matters.

SEC. 624A. BUREAU FOR POLICY AND STRATEGIC PLANNING.

    (a) Establishment.--There is established in the United 
States Agency for International Development a Bureau for Policy 
and Strategic Planning (referred to in this section as the 
``Bureau'').
    (b) Duties.--The primary duties of the Bureau shall include 
the following:
          (1) Developing and formulating United States 
        Government policy on development issues in support of 
        United States policy objectives.
          (2) Ensuring long-term strategic planning and 
        direction for overall development policy and programs, 
        as well as across regions and sectors.
          (3) Designing and conducting significant research and 
        evaluation on development and aid effectiveness.
          (4) Establishing resource and workforce allocation 
        criteria.
          (5) Guiding overall budget decisions and reviewing 
        bureau-specific resource allocations, workforce 
        allocations, operational planning, and program 
        decisions.
          (6) Integrating monitoring and evaluation into 
        overall decisionmaking and strategic planning.

SEC. 624B. OFFICE FOR LEARNING, EVALUATION, AND ANALYSIS IN 
                    DEVELOPMENT.

    (a) Sense of Congress on Analysis and Evaluation.--It is 
the sense of Congress that--
          (1) achieving United States foreign policy objectives 
        requires the consistent and systematic evaluation of 
        the impact of United States foreign assistance programs 
        and analysis on what programs work and why, when, and 
        where they work;
          (2) the design of assistance programs and projects 
        should include the collection of relevant data required 
        to measure outcomes and impacts;
          (3) the design of assistance programs and projects 
        should reflect the knowledge gained from evaluation and 
        analysis;
          (4) a culture and practice of high quality evaluation 
        should be revitalized at agencies managing foreign 
        assistance programs, which requires that the concepts 
        of evaluation and analysis are used to inform policy 
        and programmatic decisions, including the training of 
        aid professionals in evaluation design and 
        implementation;
          (5) the effective and efficient use of funds cannot 
        be achieved without an understanding of how lessons 
        learned are applicable in various environments, and 
        under similar or different conditions; and
          (6) project evaluations should be used as sources of 
        data when running broader analyses of development 
        outcomes and impacts.
    (b) Establishment.--There is established in the Bureau for 
Policy and Strategic Planning an Office for Learning, 
Evaluation, and Analysis in Development (referred to in this 
section as the ``Office''), which shall be under the management 
of the Assistant Administrator for Policy and Strategic 
Planning.
    (c) Duties.--The duties of the Office shall be to--
          (1) develop, design, coordinate, guide, and conduct 
        the complete range of activities relating to the 
        monitoring of resources, the evaluation of projects, 
        the evaluation of program impacts, and analysis that is 
        necessary for the identification of findings, 
        generalizations that can be derived from those 
        findings, and their applicability to proposed project 
        and program design;
          (2) serve as a resource to the United States Agency 
        for International Development, other government 
        entities, implementing partners, the academic 
        community, the donor community, and host governments in 
        the design of programs and projects;
          (3) serve as an authoritative voice in linking 
        evaluation and research results to strategic planning 
        and policy options;
          (4) design a strategy for strengthening evaluation 
        and research for foreign assistance programs managed by 
        the United States Agency International Development;
          (5) develop the scope and guidelines for evaluation 
        and research that are multidisciplinary in nature;
          (6) establish annual evaluation and research agendas 
        and objectives that are responsive to policy and 
        programmatic priorities;
          (7) guide the use of rigorous methodologies, choosing 
        from among a wide variety of qualitative and 
        quantitative methods common in the field of social 
        scientific inquiry;
          (8) coordinate the evaluation processes of bureaus 
        and missions of the United States Agency for 
        International Development;
          (9) develop and implement a training plan on 
        evaluation and research for aid personnel;
          (10) make recommendations to the Assistant 
        Administrator for Policy and Strategic Planning on 
        linking evaluation and research findings to policy and 
        strategic planning options;
          (11) develop a clearinghouse capacity for the 
        dissemination of knowledge and lessons learned to USAID 
        professionals, implementing partners, the international 
        aid community, and aid recipient governments, and as a 
        repository of knowledge on lessons learned;
          (12) distribute evaluation and research reports 
        internally and make this material available online to 
        the public; and
          (13) partner with the academic community, 
        implementing partners, and national and international 
        institutions that have expertise in evaluation and 
        analysis when such partnerships will provide needed 
        expertise or will significantly improve the evaluation 
        and analysis.
    (d) Subordinate Units.--The Administrator may create such 
subordinate units as may be necessary for the performance of 
duties described in paragraphs (9) and (11) of subsection (c).
    (e) Technical Expertise.--If the Assistant Administrator 
determines that the Office requires expertise that is of a 
technical nature and is outside the expertise of the Agency for 
International Development, such expertise may be accessed 
through existing contracting authorities.
    (f) Monitoring.--Evaluation and analysis activities of the 
Office shall be in addition to, but not duplicative of, 
existing monitoring activities as provided under existing law.
    (g) Coordination.--
    The Office should closely coordinate and consult with the 
Council on Research and Evaluation of Foreign Assistance to 
ensure consistency of approach toward evaluation, research, 
analysis, and related activities.
    (h) Annual Reports to Congress.--
          (1) In general.--Not later than 1 year after the date 
        of the enactment of this Act, and not later than 
        December 31 of each year thereafter, the Administrator 
        shall submit to the appropriate congressional 
        committees a report on the work of the Office.
          (2) Content.--The report required under paragraph (1) 
        shall include--
                  (A) a copy of the annual evaluation and 
                research agenda for the preceding year;
                  (B) a description of the evaluation 
                activities conducted in the preceding year;
                  (C) a description of training activities 
                conducted in the preceding year;
                  (D) a forecast of evaluation and research 
                planned for the following year; and
                  (E) a description of the ways in which the 
                results of evaluations have informed the design 
                and operation of agency policies and programs 
                during the year.
    (i) Authorization of Appropriations.--There are authorized 
to be appropriated to the United States Agency for 
International Development $5,000,000 for fiscal year 2010 and 
such sums as may be necessary for fiscal year 2011.
    (j) Definitions.--In this section:
          (1) Analysis.--The term ``analysis'' means the 
        comparative study of evaluations conducted over a 
        period of time, in varying locations, and under varying 
        conditions that produces generalized findings and 
        explanations of outcomes and assesses their 
        applicability to proposed project and program design.
          (2) Evaluation.--The term ``evaluation'' means the 
        full range of activities designed to assess the 
        efficiency and effectiveness of inputs and processes on 
        outputs, results, and outcomes of various projects, 
        programs, and activities.
          (3) Outcome.--The term ``outcome'' means any change 
        occurring during the course of a project, program, or 
        activity, including changes that cannot be attributed 
        directly to the project, program, or activity.
          (4) Outputs.--The term ``output'' means the products, 
        capital, goods, and services that result from a 
        project, program, or activity.

           *       *       *       *       *       *       *

SEC. 630. TERMS OF DETAIL OR ASSIGNMENT.

           *       *       *       *       *       *       *

SEC. 630A. INTERAGENCY AND INTERNATIONAL ORGANIZATION ROTATIONS.

    (a) Rotations.--
          (1) Career guidelines.--The Administrator shall 
        establish career guidelines for Foreign Service 
        officers and civil service officers that incorporate 
        interagency, intergovernmental, or international 
        organization rotational assignments. The guidelines 
        established under this paragraph shall include--
                  (A) selection;
                  (B) professional education and training;
                  (C) types of relevant interagency, 
                intergovernmental, and international 
                organization assignments; and
                  (D) such other matters as the Administrator 
                considers appropriate.
          (2) Promotions to senior ranks.--Not later than 2 
        years after the date of the enactment of this Act, the 
        Administrator shall establish additional guidelines 
        that consider participation by relevant officers in at 
        least 1 interagency, intergovernmental, or 
        international organizational rotational assignment of 
        at least 6 months as a factor for promotion into the 
        ranks of the Senior Foreign Service or Senior Executive 
        Service.
          (3) Promotion policy objectives for assignments to 
        interagency, intergovernmental, and international 
        organizations--
                  (A) Qualifications.--The Administrator shall 
                ensure that promotion precepts and promotion 
                panels do not penalize officers who have been 
                assigned to interagency, intergovernmental or 
                international organizations.
                  (B) Report.--The Administrator shall provide 
                an annual report to the appropriate 
                congressional committees that--
                          (i) specifies the aggregate number of 
                        officers and the promotion rates of 
                        officers who are serving in, or have 
                        served in, interagency, 
                        intergovernmental, or international 
                        organization rotational assignments; 
                        and
                          (ii) details efforts to meet the 
                        objectives described in paragraph (1).
    (b) External Training and Educational Opportunities.--It is 
the sense of Congress that--
          (1) the Administrator of the United States Agency for 
        International Development should augment and expand 
        external training and educational opportunities for 
        Foreign Service and civil service personnel and expand 
        opportunities for work assignments to entities outside 
        the United States Government;
          (2) a strong development agency should have a 
        knowledgeable and capable workforce that is familiar 
        with and has access to cutting edge development 
        practices, methodologies, ideas, work experience, and 
        programs; and
          (3) the Administrator of the United States Agency for 
        International Development should ensure that personnel 
        of the Agency have opportunities during their careers 
        to obtain a range of knowledge-building work 
        experiences and advanced education and training in 
        academic and other relevant institutions in the United 
        States and abroad to increase the capacity of the 
        Agency to fulfill its mission.

SEC. 631.--

           *       *       *       *       *       *       *

    [(d) Wherever practicable, especially in the case of the 
smaller programs, assistance under part I of this Act shall be 
administered under the direction of the Chief of the United 
States Diplomatic Mission by the principal economic officer of 
the mission.]
    (d) Coordination of Development Assistance Activities.--
Under the overall direction of the chief of the United States 
diplomatic mission, the chief of each special mission carrying 
out the purposes of part I in a country shall be responsible 
for the coordination of all development and humanitarian 
efforts of the United States Government in such country. Such 
activities shall include all development and humanitarian 
activities from funds made available to carry out the 
provisions of this or any other Act.

           *       *       *       *       *       *       *

                           United States Code

TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *

SEC. 5314. POSITIONS AT LEVEL III

    Level III of the Executive Schedule applies to the 
following positions, for which the annual rate of basic pay 
shall be the rate determined with respect to such level under 
chapter 11 of title 2, as adjusted by section 5318 of this 
title:
          Solicitor General of the United States.
          Under Secretary of Commerce, Under Secretary of 
        Commerce for Economic Affairs, Under Secretary of 
        Commerce for Export Administration, and Under Secretary 
        of Commerce for Travel and Tourism.

           *       *       *       *       *       *       *

          Director, Council on Research and Evaluation of 
        Foreign Assistance.

           *       *       *       *       *       *       *

TITLE 31--MONEY AND FINANCE

           *       *       *       *       *       *       *

SEC. 9101. DEFINITIONS

    In this chapter -
          (1) ``Government corporation'' means a mixed-
        ownership Government corporation and a wholly owned 
        Government corporation.

           *       *       *       *       *       *       *

          (3) ``wholly owned Government corporation'' means--
                  (A) the Commodity Credit Corporation.
                  (B) the Community Development Financial 
                Institutions Fund.

           *       *       *       *       *       *       *

                  (R) the International Clean Energy 
                Foundation.
                  (S) the Council on Research and Evaluation of 
                Foreign Assistance.

                                  
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