Department of State: Human Capital Strategy Does Not Recognize Foreign Assistance Responsibilities
Published: 2007-09-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Secretary of State has made foreign assistance a pillar of the department's Transformational Diplomacy Initiative and has sought better policy coordination, planning, and oversight by establishing a Director of Foreign Assistance (F Bureau). Even though the U.S. Agency for International Development has been the principal agency for development and humanitarian aid, the Department of State (State) has had a significant role delivering this type of assistance. Thus, it is essential that State have the right staff, with the right skills, in the right places to carry out its foreign assistance management responsibilities and ensure that U.S. funds are well spent. As requested, this report (1) describes the size and scope of development and humanitarian foreign assistance programs managed by State, (2) describes State's approaches to managing and monitoring such programs, and (3) evaluates State's processes for determining its human capital requirements for managing these programs.
section_title: What GAO Found
paragraphs: In fiscal year 2006, State had about $4.7 billion available for development and humanitarian assistance activities, nearly double the amount it was responsible for managing in 2000. This funding supported, for example, programs aimed at alleviating poverty and the suffering of refugees, as well as funding international drug interdiction efforts. State primarily uses grants and cooperative agreements to deliver this type of assistance. State manages its development and humanitarian assistance programs centrally, obligating about 80 percent of the funds and making awards from headquarters. State uses a variety of oversight approaches. Grants officers and grants officer representatives have formal oversight responsibilities, but other staff also carry out functions informally. A mix of headquarters and overseas staff monitor program implementation. State's strategic workforce planning does not reflect its foreign assistance activities. A key principle of strategic workforce planning is to define the critical skills and competencies that will be needed to achieve current and future programmatic goals. State has not defined its staff needs to manage and monitor its foreign assistance programs and has not collected critical information on current staff with these responsibilities. Moreover, GAO found inconsistent training and skills requirements for staff involved in foreign assistance oversight. For example, grants officers--who are responsible for the legal aspects of entering into, amending, and terminating awards--must meet educational and training requirements, while grants officer representatives--who are delegated some monitoring responsibilities--do not. Further, a recent State survey suggests that Foreign Service officers overseas recognize that there is a gap in their foreign assistance management skills. Various State officials have concerns about the department's ability to effectively manage its development and humanitarian assistance. Finally, State has not used strategic workforce planning to align F Bureau budget reforms with staffing and skill requirements.

section_title: Letter
paragraphs: The Secretary of State has designated foreign assistance as a pillar of the  The Secretary of State has designated foreign assistance as a pillar of the  Transformational Diplomacy Initiative, which aims to integrate U.S.  Transformational Diplomacy Initiative, which aims to integrate U.S.  foreign assistance activities into overall diplomatic efforts. Accordingly, in  foreign assistance activities into overall diplomatic efforts. Accordingly, in  January 2006, the Secretary established the Office of the Director of U.S.  January 2006, the Secretary established the Office of the Director of U.S.  Foreign Assistance (F Bureau) to serve as an umbrella leadership  Foreign Assistance (F Bureau) to serve as an umbrella leadership  structure for aligning foreign assistance policy, planning, and oversight.  structure for aligning foreign assistance policy, planning, and oversight.  According to the Director of the F Bureau, foreign assistance is a  According to the Director of the F Bureau, foreign assistance is a  mainstream commitment of the U.S. government, because—in addition to  mainstream commitment of the U.S. government, because—in addition to  its traditional objectives—it has been elevated to a national priority as a  its traditional objectives—it has been elevated to a national priority as a  core part of U.S. national security strategy.  core part of U.S. national security strategy.
The U.S. Agency for International Development (USAID) has been and  The U.S. Agency for International Development (USAID) has been and  remains the principal U.S. agency for delivering development and  remains the principal U.S. agency for delivering development and  humanitarian assistance, such as democracy and refugee programs, which  humanitarian assistance, such as democracy and refugee programs, which  fall under the U.S. government’s broad foreign assistance efforts.   fall under the U.S. government’s broad foreign assistance efforts.   Nonetheless, the Department of State (State) has a significant role in  Nonetheless, the Department of State (State) has a significant role in  providing this type of assistance. State received about $23 billion from  providing this type of assistance. State received about $23 billion from  fiscal years 2000 through 2006 for delivering such assistance, and annually  fiscal years 2000 through 2006 for delivering such assistance, and annually  it has been responsible for managing between 7 and 11 percent of total  it has been responsible for managing between 7 and 11 percent of total  U.S. government developmental and humanitarian assistance over this  U.S. government developmental and humanitarian assistance over this  time period. Due to this higher profile for foreign assistance in State, it is  time period. Due to this higher profile for foreign assistance in State, it is  essential that State have the right staff, with the right skills, in the right  essential that State have the right staff, with the right skills, in the right  places to implement its foreign assistance management responsibilities  places to implement its foreign assistance management responsibilities  and ensure that U.S. funds are well spent.  and ensure that U.S. funds are well spent.
As you requested, this report (1) describes the size and scope of  As you requested, this report (1) describes the size and scope of  development and humanitarian foreign assistance programs managed by  development and humanitarian foreign assistance programs managed by  State; (2) describes State’s approaches, including types of staff involved, to  State; (2) describes State’s approaches, including types of staff involved, to  managing and monitoring international development and humanitarian  managing and monitoring international development and humanitarian  assistance programs; and (3) evaluates State’s processes for determining  assistance programs; and (3) evaluates State’s processes for determining  its human capital requirements for managing foreign assistance programs.  its human capital requirements for managing foreign assistance programs.
To determine the size and scope of State’s development and humanitarian  assistance, we first reviewed U.S. budget documents and used State  allotment reports to capture the fiscal accounts that were available to  State for obligation between fiscal years 2000 and 2006. For the purposes  of this review, we defined foreign assistance management as obligating  funds, selecting grantees, making assistance awards, and monitoring the  implementation of development and humanitarian assistance programs. To  identify State’s approaches to managing programs, we reviewed program  information and interviewed agency officials. To assess foreign assistance  human capital requirements, we reviewed staffing, workload, and  workforce planning data, and interviewed agency officials. We focused on  the portion of the International Affairs budget defined by the Office of  Management and Budget (OMB) as development and humanitarian  assistance, which includes funding for Migration and Refugee Assistance,  International Narcotic Control and Law Enforcement (INCLE), and other  fiscal accounts. We met with five functional bureaus/offices that manage  development and humanitarian assistance programs and all six regional  bureaus. We also met with officials of F Bureau, Bureau of Administration,  Office of the Procurement Executive; Bureau of Human Resources;  Bureau of Resource Management; the Foreign Service Institute (FSI);  State’s Office of the Inspector General; and USAID. We determined that  the budget and obligations data we used were sufficiently reliable for the  purposes of this report, based on our review of the reasonableness and  consistency of methodology and discussions with knowledgeable officials.  We conducted our review between August 2006 and August 2007 in  accordance with generally accepted government auditing standards. A  detailed description of our scope and methodology is included in appendix  I of this report.
subsections: section_title: Background
paragraphs: Development and humanitarian assistance is one of five parts of the  International Affairs (function 150) budget that support U.S. government  foreign assistance efforts. Development and humanitarian assistance  includes State and USAID assistance activities, the Millennium Challenge  Corporation, the Peace Corps, Treasury contributions, and, from fiscal  year 2003 through 2006, spending for the relief and reconstruction of Iraq.  In fiscal year 2006, development and humanitarian assistance made up $44  billion, or just over one-half of the total $84 billion of International Affairs  (function 150) budget funds available to support foreign assistance (see  fig. 1).
The four other types of funding in the International Affairs (function 150)  budget that support foreign assistance activities include the following:  International security assistance, to finance and train foreign militaries,  promote nonproliferation activities, and support international  peacekeeping operations;    The conduct of foreign affairs, which fund the salaries, information  technology, housing, and security for State staff, including those with  responsibilities to administer and monitor foreign assistance activities;    Foreign information and exchange activities, which include fiscal  accounts supporting education, cultural exchange activities, and U.S.  broadcasts overseas; and  International financial programs, which primarily support the  International Monetary Fund and the Export-Import Bank of the United  States.  (See app. II for a break down of budget amounts available from each part  of the International Affairs (function 150) budget in recent years.)
Of the total $44 billion of development and humanitarian assistance  available in fiscal year 2006, State received about $5 billion, or 11 percent.  Other agencies received more of these funds, including USAID, which  received about $15 billion, or 34 percent, and the Department of Treasury,  which received about $13 billion, or about 30 percent.
In January 2006, the Secretary of State established F Bureau to serve as an  umbrella leadership structure for coordinating all foreign assistance  policy, planning, and oversight. The purpose of this reorganization was to    ensure that foreign assistance is used as effectively as possible to meet  broad foreign policy objectives,    more fully align the foreign assistance activities carried out by the  Department of State and USAID, and    demonstrate responsible stewardship of taxpayer dollars.
In announcing these changes, the Secretary noted that “the current  structure of America’s foreign assistance risks incoherent policies and  ineffective programs and perhaps even wasted resources.”
The director of U.S. Foreign Assistance serves concurrently as the USAID  Administrator, and has authority over all State and USAID foreign  assistance funding and programs. According to State, the F Bureau  provides coordination and guidance to all foreign assistance delivered  through other agencies and entities of the U.S. government.
Specifically, the director was given authority over program planning,  implementation, and oversight of the various bureaus and offices within  State and USAID, to    develop a coordinated U.S. government foreign assistance strategy,  including developing 5-year country specific assistance strategies and  annual country-specific assistance operational plans;    create and direct consolidated policy, planning, budget and  implementation mechanisms and staff functions required to provide  umbrella leadership to foreign assistance;    provide guidance to foreign assistance delivered through other  agencies and government entities, including the Millennium Challenge  Corporation and the Office of the Global AIDS Coordinator; and    direct the required transformation of the government’s approach to  foreign assistance in order to achieve the President’s Transformational  Development Goals.
section_title: State’s Amount of International Development and Humanitarian Assistance Has Increased Significantly in Recent Years
paragraphs: State’s funding available for international development and humanitarian  assistance, such as democracy promotion, drug interdiction, and refugee  assistance, nearly doubled between fiscal years 2000 and 2006. State uses  certain fiscal budget accounts to fund its development and humanitarian  assistance programs, with accounts related to refugees and international  narcotics control providing the most funding.
subsections: section_title: Funding Available for State’s International Development and Humanitarian Assistance Doubled between 2000 and 2006
paragraphs: State’s funding for international development and humanitarian assistance  nearly doubled from $2.4 billion in fiscal year 2000 to $4.7 billion in fiscal  year 2006. This increase in the funds available each year for obligation  meant more management responsibilities for State. This funding consisted  primarily of annual congressional appropriations and unused portions  from previous fiscal years, but it excluded money that State allocated to  other agencies to obligate. After decreasing slightly in fiscal year 2001, the  available funding increased steadily through fiscal year 2006, with the  sharpest increases coming after fiscal year 2003 (see fig 2).
These increased amounts varied by assistance areas (see table 1). About a  quarter of the overall increase in funding available to State was from (1)  fiscal accounts annually appropriated to the President, such as the  economic support fund account, and (2) the assistance for Eastern Europe  and the Baltic States account—which fund assistance in areas such as  economic support, democracy promotion, and efforts to combat human  trafficking. However, most of the increase was from migration and refugee  assistance, Global HIV/AIDS assistance, INCLE, and drug interdiction  accounts that are annually appropriated to State.
The amounts appropriated by Congress to particular areas do not always  match the amounts available to State each year because appropriated  funds may be available for obligation for more than a year or transferred  to other agencies. For example, according to State officials, State  allocates most of the funding that it is appropriated from the Global  HIV/AIDS Initiative account to other agencies, which then obligate the  funds. For instance, in fiscal year 2006, State allocated over 90 percent of  the nearly $2 billion Global HIV/AIDS Initiative appropriation to USAID,  the departments of Health and Human Services and Labor, and others.  State also received funding from the supplemental appropriation for Iraq  Reconstruction. (See app. III for a breakdown of State’s funding from  development and humanitarian assistance fiscal accounts for fiscal years  2000 through 2006).
section_title: Many State Bureaus Manage Certain Types of Development and Humanitarian Assistance
paragraphs: Many State bureaus are responsible for managing at least some types of  development and humanitarian assistance funds. Fifteen State functional  bureaus and all six regional bureaus have received development and  humanitarian assistance funds to some degree since fiscal year 2000. The  primary users of this funding among the bureaus include the following:    Bureau of Democracy, Human Rights, and Labor (DRL);   The Office to Monitor and Combat Trafficking in Persons (G/TIP);    Bureau of Population, Refugees, and Migration (PRM);   The Office of the U.S. Global HIV/AIDS Coordinator;   Bureau of International Narcotics and Law Enforcement Affairs (INL)
Bureau of European and Eurasian Affairs; and   Bureau of Near Eastern Affairs.
These bureaus and offices that manage development and humanitarian  assistance rely on funding from particular assistance accounts. DRL and  G/TIP primarily receive funds from the economic support fund to manage  their respective programs. In addition, G/TIP receives some funds from  the INCLE fiscal account. PRM manages money from the migration and  refugee assistance and emergency refugee migration assistance accounts,  and the Office of the Global AIDS Coordinator manages money from  State’s Global HIV/AIDS initiative fiscal account. INL manages most of  State’s funding from the INCLE account, and it manages all of State’s  funding from the Andean counterdrug initiative account. The Bureau for  European and Eurasian Affairs manages assistance for Eastern Europe  and Baltic States and the assistance for the independent states of the  former Soviet Union accounts. Finally, the Bureau of Near Eastern Affairs  uses funds from the economic support fund to manage its Middle East  Partnership Initiative (MEPI) democracy promotion programs.
State does not always obligate all of its available funds each year. State’s  authority to commit unobligated funds for spending can be carried over to  the following year or may expire, depending on how long Congress makes  the appropriated funding available. State obligates funds on particular  foreign assistance activities as it awards grants, enters into contracts, and  enters into cooperative agreements.
State primarily uses grants and cooperative agreements to fund  development and humanitarian assistance activities. State defines a grant  as assistance used to support a public purpose, but for which no  substantial involvement by government is anticipated. A cooperative  agreement is a type of grant that State uses if it anticipates substantial  government involvement during the course of the agreement. There are  exceptions to State’s reliance on grants and cooperative agreements for  delivering foreign assistance. PRM primarily uses voluntary contributions  to deliver foreign assistance through international organizations.  According to PRM officials, voluntary contributions do not have the same  terms or conditions required for grants or cooperative agreements, but  PRM contribution letters require international organizations to maintain  financial reports and accounting records, provide documentation for  payment requests, and submit published program and financial reports to  PRM in accordance with each international organizations’ policies and  procedures. According to State, INL mainly delivers its assistance through  bilateral agreements with foreign governments.
section_title: State Uses a Variety of Approaches to Manage and Monitor Development and Humanitarian Assistance Programs
paragraphs: State primarily manages its development assistance and humanitarian  programs centrally, obligating the majority of the funds and making the  assistance awards from State headquarters in Washington, D.C. Grants  officers and grants officer representatives have formal oversight  responsibilities, though other staff also carry out such functions  informally. A mix of headquarters and overseas staff monitor the  implementation of program activities, and only a few bureaus have staff  overseas specifically assigned to their programs.
subsections: section_title: Most Programs are Centrally Managed
paragraphs: State generally carries out its program planning, solicitation of proposals,  selection of grantees, and approval of the release of funds for overseas  programs from its headquarters in Washington, D.C. The major bureaus  and offices that are responsible for development and humanitarian  assistance made assistance awards and obligated the majority of their  funds—about 77 percent of the $2.6 billion in total obligations in 2006— from their headquarters in Washington. Three bureaus and one office— PRM, DRL, the Bureau of South and Central Asian Affairs and the Office of  the Global HIV/AIDS Coordinator—obligated all of their funds from  headquarters during fiscal year 2006. An exception was the Bureau of East  Asian and Pacific Affairs, for which overseas posts obligated 86 percent of  the funds. Generally, funds were obligated for assistance awards to U.S.- based nongovernmental organizations with ties to overseas organizations.  The bureaus and offices in our scope awarded over 7,000 grants and  cooperative agreements totaling about $1.2 billion in fiscal year 2006.  Table 2 shows funds obligated in Washington and overseas during fiscal  year 2006 for these bureaus and offices.
Assistance awards and funds obligated by overseas posts were small in  comparison with those obligated at headquarters. For example, in fiscal  year 2006 the overseas posts, under the jurisdiction of the Bureau of Near  Eastern Affairs, obligated about $4 million in MEPI funds, compared with  over $50 million obligated at headquarters. The bureau’s regional office in  Tunis obligated and disbursed the bulk of the $4 million to be used for  small grants of no more than $100,000 (the grants were generally $25,000  or less). In addition, some bureaus allot small amounts of funds to  overseas posts for grants up to $20,000. For example, PRM administers the  Ambassador’s Fund for Refugees, which generally supports small projects,  such as digging a well in a refugee camp. PRM allotted $578,000 to U.S.  embassies, primarily in Africa, for such activities in fiscal year 2006. G/TIP  administers a similar program, the Ambassador’s Fund for Anti-Trafficking  in Persons Initiative, typically in Africa, for public awareness campaigns.  In 2006 G/TIP had 54 active grants totaling about $4.9 million. Twenty-nine  of the 54 grants were for small grants of $20,000.
section_title: Grants Officers and Grants Officer Representatives Have Formal Oversight Responsibilities
paragraphs: Grants officers are responsible for the legal aspects of entering into,  amending, and terminating awards. Such actions include the following:    approving the initial determination by the program office of the  appropriate assistance instrument to be utilized;   determining a potential recipient’s responsibility and management  competence in carrying out a planned activity;    preparing the award with the departmentwide standard award form;   preparing and executing amendments to awards such as adjustments to  the scope, budget, and period of performance; and    carrying out all other responsibilities, as required, to ensure prudent  award and administration of assistance for State within the scope of all  applicable State policies, OMB circulars, and federal regulations.
State has 39 grants officers, including 10 that work directly for the Office  of Acquisitions Management of State’s Bureau of Administration. Five of  the Administrative Bureau grants officers are responsible for awarding  grants for DRL, G/TIP, and all of the regional bureaus as well as nine other  bureaus. The Procurement Executive within the Bureau of Administration  provides overall leadership of the procurement and grants functions for  the Department of State and issues procurement and grants policy,  provides quality assurance and statistical reporting, and appoints grants  officers. Four of the seven primary bureaus delivering development and  humanitarian assistance have grants officers assigned to their programs:  PRM and the Bureau of Near Eastern Affairs each have five grants officers,  INL has two, and the Bureau of East Asian and Pacific Affairs has one. The  Administrative Bureau grants officers serve as a resource to overseas  posts as well as to program and regional bureaus that have their own  grants officers.
Some of the grants officers’ duties are delegated to other staff. State Policy  Directive 16 authorizes grants officers to designate technically qualified  personnel as grants officer representatives to assist in grants management.  The directive is mandatory for domestic grant activities, which according  to State’s Office of the Procurement Executive means awards granted by a  U.S-based grants officer, and is recommended for overseas grant activities.  Grants officer representatives are responsible for ensuring that State  exercises prudent management and oversight of the award. The  representatives receive an official designation letter when they are  appointed that describes their authorities and responsibilities. Some of the  grants officer representatives’ authorities and responsibilities include the  following:    coordinating and consulting with the grantee on all programmatic,  scientific, and/or technical matters that may arise in the administration  of the grant;    evaluating project performance to ensure compliance with the grant    assisting the grantee in problem identification and resolution;   promptly notifying the grants officers in writing of any noncompliance  or deviation in performance or failure to make progress;    visiting the grantee’s place of performance to evaluate progress or  problems, with prior approval from the grants officers;    promptly submitting findings to the grants officers through a trip report  after visiting the grantee’s location of performance;  receiving and reviewing required grantee reports (progress, financial,  or other) on behalf of the government to ensure they are timely and  complete; and    preparing a statement of satisfactory performance, or a statement of  any deviations, shortcomings, shortages, or deficiencies upon  completion of the grant.
The grants officer representative designation letter also describes the  limitations to the grants officer representative’s authority. For example,  the grants officer representative does not have the authority to modify or  alter the grant or any of its terms and conditions.
However, not all staff responsible for monitoring the implementation of  foreign assistance activities receive formal appointments as grants officer  representatives. For example, PRM grant officials told us that PRM does  not designate its staff as grants officer representatives. State’s  Procurement Executive officials could not tell us the extent to which staff  from the six regional bureaus and the overseas posts were officially  designated as grants officer representatives. PRM officials said the primary  responsibility for monitoring PRM program activities rests with its refugee  coordinators, and that these staff are aware of their oversight  responsibilities although they do not receive a formal designation letter.  Further, the officials said each PRM grant and cooperative agreement  formally designates grant monitoring responsibilities. In addition, the PRM  officials said that the bureau sends the refugee coordinators instructions  on monitoring and evaluating the grants when it notifies them of grant  awards.
section_title: State Uses Headquarters and Overseas Staff to Monitor Assistance Activities
paragraphs: A variety of headquarters and overseas staff—regardless of whether they  are officially assigned to a program or formally appointed as grants officer  representatives—are responsible for monitoring foreign assistance  activities. Monitoring is an important control to ensure that grantees  comply with applicable rules and regulations. Federal monitoring  requirements are detailed in the Code of Federal Regulations and OMB  circulars such as OMB Circular A110, which, in part, states that federal  agencies prescribe the frequency of performance reports, obtain financial  information from grantees, and make site visits as needed. The grants  officer determines the monitoring activities that will be required to ensure  that a recipient is in adherence with department, bureau, and program  requirements. State includes its monitoring requirements in the individual  grant or cooperative agreement—which commits the department to  exercise federal stewardship responsibility, including, but not limited to  performing site visits; reviewing and responding to performance,  technical, or subject matter, and financial reporting and audits—to ensure  that the objectives, terms, and conditions of the award are accomplished.
The bureaus in our scope that obligated the greatest amount of  development and humanitarian assistance funds—PRM and INL—have  overseas staff specifically assigned to manage and monitor their programs.  PRM has about 22 full-time Foreign Service officers serving as refugee  coordinators at 18 overseas posts to oversee refugee programs. Many of  the coordinators have regional responsibility over a number of countries,  and are assisted by Foreign Service nationals. PRM processed 481 grant,  cooperative agreement, and contribution funding actions in fiscal year  2006. INL, which primarily provides foreign assistance through bilateral  agreements with foreign governments, uses about 35 Foreign Service  officers and 428 Foreign Service nationals overseas who are assigned to  manage its programs in about 47 locations overseas.
DRL and G/TIP rely mainly on headquarters staff to monitor their  programs. DRL—which obligated considerably more funds than the  remaining bureaus—uses its 36 headquarters policy analysts and program  officers to monitor program implementation, including the overseas  activities of the grantees. DRL staff monitor grant activities, as follows:    maintaining contact with grantees, often through e-mail and meetings  in Washington, D.C.;  reading grantee quarterly reports to assess how well grantees are  meeting their goals and objectives; and    holding semiannual, internal review panels to determine whether each  grant requires follow-up.
DRL staff may also make monitoring trips to the projects in order to assess  the grant. G/TIP, which receives a comparatively small amount of funds,  uses a similar process for monitoring its centrally managed programs from  headquarters. Although these bureaus use headquarters staff for  monitoring, they also request assistance from the overseas posts. For  example, DRL encourages the overseas posts to review proposals, attend  events that grantees hosts in their country, send feedback to DRL, visit  grantees regularly, and meet with DRL staff during their visits. G/’TIP also  encourages overseas staff to visit its centrally managed grants. However,  DRL officials stated that they cannot directly task overseas staff to  monitor their programs, because any help overseas staff provide to DRL is  beyond the overseas staffs’ assigned duties.
Five of the six regional bureaus generally use their headquarters’ desk  officers and varying levels of assistance from the overseas posts to  monitor their programs. The Bureau of Near Eastern Affairs—which  obligated a small amount of funds compared with PRM and INL—has full- time coordinators for MEPI. All of these staff are locally engaged, and are  located at five overseas posts in Oman, Bahrain, Lebanon, Egypt, and  Morocco. In addition, overseas posts are responsible for monitoring the  implementation of the small grants they award. Table 3 shows the primary  location of staff primarily responsible for monitoring the implementation  of the foreign assistance activities of the bureaus and offices within the  scope of our review.
section_title: State Does Not Use Strategic Workforce Planning to Support Its Foreign Assistance Efforts
paragraphs: A key principle of strategic workforce planning is to define the critical  skills and competencies that will be needed to achieve current and future  programmatic goals. However, State does not have an accurate picture of  the number and type of staff responsible for overseeing and monitoring  foreign assistance responsibilities. Without this critical information, State  cannot develop strategies, such as training, to address any gaps in the  number, skills, and competencies of its workforce—another key strategic  workforce planning principle. Internal control standards also require that  all personnel possess and maintain a level of competence that allows them  to accomplish their assigned duties. We found that State has inconsistent  training and skills requirements for staff involved in foreign assistance  oversight. For example, grants officers—who are responsible for the legal  aspects of entering into, amending, and terminating awards—must meet  educational and training requirements, while grants officer representatives  in some State Bureaus—who are delegated some of these monitoring  responsibilities—do not have to meet such requirements. In addition,  grants officers responsible for awarding grants for several of the bureaus  within the scope or our work and other officials whom we met with in  State’s Bureau of Administration expressed concern about their ability to  handle their grant monitoring responsibilities because of workload,  staffing, and training issues. Finally, State has not used strategic  workforce planning to align the efforts of its recently established Office of  the Director of Foreign Assistance to reform the foreign assistance budget  with staffing and skill requirements.
subsections: section_title: State Has Not Determined Foreign Assistance Skills Requirements
paragraphs: We have developed a model of strategic human capital planning to help  agency leaders effectively use their personnel, or human capital, and  determine how well they integrate human capital considerations into daily  decisionmaking and planning for the program results they seek to achieve.  Our human capital model is consistent with similar efforts by OMB and the  Office of Personnel Management (OPM) to develop federal human capital  standards. Under the principles of effective workforce planning an  agency should determine the critical skills and competencies that will be  needed to achieve current and future programmatic results. State needs  people with foreign assistance management skills and competencies to  achieve its development and humanitarian goals and objectives. Agencies  can take a range of approaches to identifying current and future skills  requirements, but they should be based on the collection of fact-based  information. State has not taken such action for staff with foreign  assistance management responsibilities. For example, there is no specific  foreign assistance grant management skill set for Foreign Service officers,  according to a senior Human Resources official. Moreover, State has never  specifically examined foreign assistance workload indicators to identify  resulting workforce needs, according to its workforce planners. Further,  although the delivery of development and humanitarian assistance is a  critical component of three of State’s seven strategic goals it is not part of  the official State mission as communicated by the current workforce plan.
section_title: State Has Not Collected Critical Information on Current Staff with Foreign Assistance Management Responsibilities
paragraphs: The collection of information on critical skills and competencies needed  to perform an agency’s mission is one step in determining current and  future human capital needs. Such information includes the number, type,  and skills of staff involved in the oversight and monitoring of foreign  assistance activities. However, State does not have complete and accurate  information on staff that manage and monitor foreign assistance programs.  We asked the bureaus and officers in our scope of work to provide  information on the number and type of staff in headquarters and overseas  posts that work on their development and humanitarian assistance  programs and the amount of time they spend on those programs. Only 3 of  the 10 bureaus could provide detailed information on overseas staff  devoted to their programs. INL and PRM—the two program bureaus with  overseas staff assigned to their programs—were able to provide the  number of headquarters and overseas staff devoted to their programs,  while the Bureau of Near Eastern Affairs was also able to provide data on  the number, type of staff, and percentage of time devoted to MEPI  programs in 15 countries. However, the other bureaus could provide only  estimates of overseas staff devoted to foreign assistance activities. A few  bureaus, such as South and Central Asian Affairs, Western Hemisphere  Affairs, and African Affairs, referred to the information they provided as  best guesses. East Asian and Pacific Affairs Bureau officials said they had  to query their overseas posts to obtain the staffing information they  provided.
State officials attributed the difficulty in identifying current staff devoted  to foreign assistance activities to a variety of factors. For one, State’s  primary role has traditionally been to implement U.S. foreign policy. State  bureaus and offices manage foreign assistance programs in support of  their foreign policy objectives, and some staff in policy positions may also  work on foreign assistance programs. Therefore, it is difficult to separate  the foreign assistance activities from State’s diplomatic functions,  according to State resource managers. Moreover, State’s mission planning  process only tracks staff time by strategic objective and cannot identify  staffing devoted to a specific program.
State workforce planners said they do not have a systematic way of  identifying personnel working on foreign assistance unless it is obvious  from their job title. In response to our request for information, the  workforce planners were able to identify about 300 foreign assistance- related full-time positions in headquarters functional bureaus. They said  State’s most recent domestic staffing model does not contain the critical  information necessary to identify foreign assistance-related functions in  the regional bureaus.
Furthermore, State does not have a systematic way of identifying all staff  officially designated as grants officer representatives, because State does  not maintain a comprehensive list of these designees. Grants officers  stated that the letters designating the grants officer representatives are  included in the grants file; however, State’s current grants database  management system does not capture information on grants officer  representatives, according to Administrative Bureau procurement officials.  Thus there is no systematic workforce information on staff to whom  foreign assistance responsibilities are delegated. Moreover, it is not clear  whether staff with grants management responsibility who are not officially  appointed as grants officer representatives are bound by the same  responsibilities, authorities, and limitations described in the designation  letter.
section_title: State Does Not Have Consistent Training Requirements for Staff Managing Foreign Assistance Activities
paragraphs: In accordance with internal control standards all personnel should possess  and maintain a level of competence that allows them to accomplish their  assigned duties, as well as understand the importance of developing and  implementing good internal control. This includes identifying appropriate  knowledge and skills as well as providing needed training. However, as  State does not have complete data that would allow it to identify any gaps  in the numbers, skills, and competencies it needs to manage foreign  assistance programs and develop strategies—such as providing training— to address those gaps, State cannot assure itself that all employees who  manage and monitor foreign assistance activities have the necessary skills.
We found that State has inconsistent training and skills requirements for  its staff involved in foreign assistance oversight. For example, grants  officers must meet a number of requirements under State Grant Policy  Directive 1 to obtain a Grants Officer Warrant to award federal assistance.  This directive establishes State’s policy that grants officers possess the  minimum qualifications necessary to ensure that federal assistance  agreements issued by State are sound and in compliance with laws and  regulations. The directive requires domestic applicants to meet specific  education and training qualifications to obtain a grants warrant—such as  completion of a 56-hour course in grants management training and 4-year  course of study leading to a bachelor’s degree. The warrant limits the  dollar amount of awards the officers can make. In contrast, State does not  have agencywide training requirements for grants officer representatives  who are often delegated some of the grants officers’ oversight  responsibilities. For example, State Policy Directive 16 states that  education and special training may be considered when designating grants  officer representatives, but it does not provide specifics on what training  and education to consider. Further, grants officers do not have control  over whether or not the grants officer representatives are qualified,  because the bureau for which the assistance award is made generally  appoints the grants officer representative when it submits the award  package to the grants officer for final processing. For example, Near  Eastern Affairs Bureau and INL grants officers stated that program staff  with subject area knowledge are designated as grants officer  representatives and that these staff do not have to meet any specific  training requirements.
Overseas staff with foreign assistance management responsibilities also do  not always have to meet foreign assistance management specific training  or experience requirements. For example, INL officials said that Foreign  Service officers applying for their bureau’s overseas positions did not have  to meet any specialized management skill requirements. INL human  resources officials added that INL has difficulty matching staff with the  assignments because there is no guidance on skills requirements. Further,  some DRL and G/TIP officials stated that overseas staff generally lacked  the training to monitor their grants. Moreover, State’s Inspector General  reported that Foreign Service officers overseas with MEPI responsibilities  lacked grants related training. The Inspector General further reported that  political and economic officers supporting small bilateral MEPI grants and  larger regional initiatives did not have grants training and showed an  uncertain grasp of their oversight responsibilities and of MEPI  expectations. Lack of properly trained staff could negatively impact  State’s ability to effectively deliver foreign assistance, and would be an  internal control weakness that puts grants at risk.
Several of the Administration Bureau and Near Eastern Affairs Bureau  grants officers we interviewed recommended that all grants officer  representatives receive training, such as the grants management courses  offered by FSI: “Introduction to Grants and Cooperative Agreements for  Federal Personnel” and “Monitoring Grants and Cooperative Agreements.”  The former course is required for Public Diplomacy officers substantially  involved in pre and postaward assistance processes overseas. Any Federal  personnel responsible for overseeing administrative, financial, or program  performance of grant recipients would benefit from the latter class,  according to the FSI course catalog.
Although State does not have agencywide training requirements, some  individual bureaus do. For example, DRL has internal training  requirements for bureau staff who serve as grants officer representatives,  requiring them to complete the two FSI classes on grants management,  according to DRL officials. In addition, PRM officials stated that the  bureau—which does not designate grants officer representatives— requires its headquarters and overseas staff to take the FSI’s Population,  Refugee and Migration Officers Monitoring and Evaluation Workshop. FSI  also offers a week-long introductory orientation for staff who work on  refugee issues led by PRM officials.
Moreover, an FSI survey in response to employee requests for grants  management training suggests that Foreign Service officers overseas  recognize that there is a gap in their foreign assistance management skills.  FSI officials stated that the Institute conducted a needs assessment,  including a survey, in response to anecdotal information about the need  for the training. The officials said that based on the survey responses, FSI  created a new training course—Managing Foreign Assistance Awards  Overseas. According to FSI, the new training was designed to meet the  changing needs of Foreign Service officers under the Diplomatic  Readiness and Transformational Diplomacy Initiatives. The 3-day elective  course is geared toward economic and political officers who need to learn  the fundamentals of assistance awards management and who will have  project management or oversight responsibilities. According to FSI, the  course targets officers who will design, develop, and oversee assistance  programs at post in support of mission performance plan goals, and is not  geared toward officers providing assistance on activities managed from  headquarters. FSI began offering the course in April 2007. The FSI officials  said they were not aware of any additional training needs or proposed  training related to foreign assistance management.
section_title: State Officials Concerned About Department’s Ability to Effectively Manage Grants
paragraphs: Grants officers and other officials whom we met with expressed concern  about their ability to handle their grant management responsibilities to  ensure that federal funds are being spent as intended. For example, we  interviewed all five Administrative Bureau grants officers responsible for  awarding grants for some of the bureaus and offices in our scope. We also  interviewed Bureau of Near Eastern Affairs and INL grants officers. The  Administrative Bureau grants officers who are responsible for much of  State’s development and humanitarian assistance awards stated that they  did not have sufficient time to fully oversee the implementation of the  grants, including pre and postaward activities. Preaward activities include  determining the level of competition, soliciting the proposal, and selecting  the grantee. Postaward activities include the monitoring required to  ensure a recipient is in adherence with State, bureau, and program  requirements.
Various officials with whom we spoke expressed concerns about  preaward management activities. Two of the Administrative Bureau grants  officers told us they were concerned about whether program and regional  bureau staff were sufficiently knowledgeable to solicit proposals and  competitively select grantees. These grants officers stated they generally  are not involved in the process for soliciting proposals and selecting the  grantee because of their workload. Instead, the program bureau is  responsible for the review and selection of assistance recipients prior to  the award. The grants officers said that, as a result, they did not know  whether the solicitations complied with relevant laws and regulations. For  example, one of the grants officers did not believe a program bureau  selecting grantees had sufficiently advertised its grant solicitations to  reach the most potential grantees possible. Other State officials with  whom we met raised this same issue. Moreover, in June 2006, State’s  Inspector General raised concerns about the lack of competition for some  foreign assistance awards, reporting that PRM had not consistently  followed State or U.S. government policies that require applications for  federal assistance to be solicited in a manner that provides for  competition. In response, PRM established policies and procedures that  require that all awards are advertised and that relevant State regulations to  justify noncompetitive awards are complied with, according to PRM  officials.
The Administrative Bureau grants officers and other officials with whom  we spoke also discussed postaward activities. For example, three of the  grants officers told us they were concerned about the lack of time they  had to devote to the grants after funds are obligated. They said they  receive a number of program and financial reports from the grantees at the  same time and consequently do not have enough time to thoroughly  review them. They said that they rely on the grants officer representatives,  who are not subject to agencywide training requirements, to review the  reports and notify them of problems. The grants officers further stated that  their workload did not permit them to close out the grants and that they  had to rely on what the grantee reported.
Grants officers and other officials also discussed issues related to site  visits to monitor the grantees. For example, Administrative Bureau grants  officers expressed concerns over their lack of opportunity to make site  visits. They said that the program bureaus responsible for the grants would  have to set aside travel funds for them to travel, but that this is rarely  done. Most of the grants officers we interviewed said that they have not  traveled overseas for monitoring visits and that they rely on the grants  officer representatives to perform this duty. However, some of the  Administrative and Near Eastern Affairs Bureau grants officers said the  grants officer representatives do not consistently inform them of  upcoming site visit. Grants Policy Directive 16 requires the grants officer  representatives to obtain prior approval from the grants officer before  visiting the grantee’s place of performance to evaluate progress or  performance. For example, one of the grants officer said the grants officer  representative does not consult with her on whether there are financial  issues to be addressed, and another stated that the grants officer  representatives focus more on programmatic rather than management or  financial issues. Both stated that they do not receive any reports after site  visits.
We also met with about 20 DRL program and policy officers who serve as  grants officer representatives, and they generally indicated that grant  oversight would be improved by more frequent site visits to monitor  grantee activity. The DRL grants officer representatives said they make  site visits as workload, travel funds, and conditions in the country permit.  A G/TIP grants officer representative expressed similar concerns, stating  that G/TIP does not have the time or the budget to visit every grantee.  State’s Inspector General has found the lack of monitoring to be an issue  in the past, and reported in 2005 that G/TIP did not adequately monitor its  grantee activities. The report found that the grants officer for G/TIP relied  on a G/TIP grants officer representative who in turn relied on overseas  posts to monitor grantee activity. The Inspector General found very few  embassy evaluations verifying monitoring had been occurring and  recommended that G/TIP improve its recordkeeping.
section_title: State Has Not Yet Integrated Workforce Planning into Foreign Assistance Reform Efforts
paragraphs: State is implementing foreign assistance budgetary reforms without  considering the potential impact of these reforms on its staffing and skills  requirements, which does not conform to strategic workforce principles.  One such principle is that an agency’s management lead the effort to align  its human capital program with current and emerging mission and  programmatic goals. The Secretary of State recently established the F  Bureau within State to serve as an umbrella leadership structure for  aligning and coordinating all foreign assistance, policy, planning, and  oversight. Since its establishment, the F Bureau has developed a strategic  framework for foreign assistance and established new priority objectives.  The budget reforms could result in some countries and programs receiving  more funding, while others receive less. Such changes could shift where  staff with foreign assistance responsibilities are needed from one bureau  to another or from headquarters to overseas missions. For example, the  fiscal year 2008 budget request includes INCLE funds for many countries  that had no such funding in previous years. However, as of July 2007, State  had not begun to align human capital resources with the reforms,  according to a senior F Bureau official. The official said that the F Bureau  would eventually address human capital requirements, but he did not  provide a time frame. Further, State’s Human Resources Bureau officials  told us they had not attended meetings in which foreign assistance budget  decisions were made that could potentially impact human capital  requirements. Moreover, the Human Resources Bureau had not taken any  workforce planning actions related to F Bureau reform efforts, and its  future role had not been determined. Consequently, the impact of the F  Bureau reforms on foreign assistance staffing and skills requirements is  not clear to State officials.
section_title: Conclusions
paragraphs: Strategic workforce planning focuses on developing long-term strategies  for acquiring, developing, and retaining an organization’s total workforce  to meet the needs of the future. A key principle of strategic workforce  planning is to define the critical skills and competencies that will be  needed to achieve current and future programmatic goals. However,  despite its increasing role in development and humanitarian assistance,  State has limited data to determine whether department staff responsible  for managing and monitoring the programs have sufficient skills to ensure  that applicable U.S. laws and regulations are being complied with and U.S.  dollars are being spent as intended. Moreover, bureaus and offices that  manage development and humanitarian assistance programs could not  readily provide data on staffing devoted to foreign assistance activities,  particularly overseas staffing. In accordance with human capital principles  and internal control standards, agencies should have individuals with  specialized knowledge, skills, and abilities necessary to perform complex  and technical administrative responsibilities—such as managing grants— effectively. However, we found that State does not have departmentwide  skills and training requirements for all staff who are formally or informally  delegated some of the oversight and monitoring responsibilities of grants  officers, who have formal responsibility for overseeing grants.
section_title: Recommendations
paragraphs: We recommend that the Secretary of State (1) take steps to define the  skills and competencies the department’s employees need to manage  foreign assistance responsibilities, including developing information on  the number and type of staff who are currently managing foreign  assistance programs, their roles and responsibilities, workload,  experience, and training and (2) develop a strategy to address any gaps it  identifies.
section_title: Agency Comments and Our Evaluation
paragraphs: The Department of State provided written comments on a draft of this  report. These comments and our response are reprinted in appendix IV.  State also provided technical comments, which we have incorporated into  this report as appropriate.
In commenting on a draft of this report, the Department of State generally  concurred with the report’s findings, conclusions, and recommendations.  To address the recommendations State plans to (1) define critical skills  and competencies needed by all department employees managing foreign  assistance, (2) align workforce planning strategies with the management  of foreign assistance programs departmentwide, (3) review the overseas  staffing and domestic staffing models to determine if refinements are  required to the components that address foreign assistance programs, (4)  review the workforce plan to determine where enhancements to include  aspects of foreign assistance functions are warranted, and (5) consider  further training of personnel with grants management responsibilities.
Although State agreed with our recommendations, the letter expressed  concern that the draft report did not adequately reflect the department’s  current oversight of its foreign assistance programs. State provided a  detailed description of how PRM monitors and evaluates its programs as  an example. We noted State’s concerns in the results in brief section of  this report and have included additional details on PRM’s monitoring  efforts as appropriate.
We are sending this report to other interested Members of Congress and to  the Secretary of State. We will also make copies available to others upon  request. In addition, the report will be available at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-4128 or fordj@gao.gov. Contact points for our offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix V.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the size and scope of the Department of State’s (State)  development and humanitarian assistance, we first reviewed U.S. budget  documents to identify funding supporting U.S. foreign assistance, as well  as State’s part in supporting these overall efforts. We then reviewed the  portion of the U.S. budget that funded development and humanitarian  assistance and used State allotment reports to capture the fiscal accounts  that were available to State for obligation between fiscal years 2000 and  2006.
To identify overall funding supporting U.S. government foreign assistance  activities, we reviewed the U.S. budget general fund to identify  International Affairs (function 150) budget accounts. Function 150 budget  accounts are classified by the Office of Management and Budget (OMB) as  those related to  international development and humanitarian assistance (function 151),   international security assistance (152),   the conduct of foreign affairs (153),   foreign information and exchange activities (154), and  international financial programs (155).
We focused on the general fund because it contains the fiscal accounts  that are funded from regular congressional appropriations, as opposed to  accounts that are nonbudgetary or receive appropriations from other  general fund accounts, or trust funds that hold foreign government  payments, gifts, or contributions. To capture funds available for obligation,  including the congressional appropriation as well as funds carried over  from the previous year, we used the amounts shown on line 23.90 (total  budgetary resources available for obligation) of the program and financing  table of the Department of State and Other International Programs budget  appendix for fiscal years 2002 through 2008. We used the budgets for  these years because they have final (actual) amounts for fiscal years 2000  through 2006. If line 23.90 was not applicable for a certain account, such  as when no unobligated funds were being carried over, we used line 22.00  (new budget authority). For accounts that had not received new funds, we  used line 21.40 (unobligated balance brought forward from the previous  year).
To identify the 150 budget accounts from which State received funding, we  used Treasury budget identification codes as well as assistance account  information obtained from State’s office of the director of foreign  assistance. We also referred to Treasury Financial Management Service’s  combined statement on appropriations and outlays to identify accounts  from which State received 150 funds and accounts State sent to other  agencies, such as the Global HIV/AIDS Initiative account. From the  function 150 fiscal accounts we separated out development and  humanitarian budget lines (function 151) as well as the economic support  fund. While the economic support fund is not a function 151 account, we  included it in our scope of development and humanitarian assistance fiscal  accounts because it was a primary account that State used for funding this  type of assistance.
To identify State’s share of the 151 account, we used allotment reports  provided by State’s resource management office that reported how much  development and humanitarian assistance State received annually, by  fiscal account. These allotment amounts included funds carried over from  the previous year, and so represented funds available to State for  obligation. We used transfer data from State’s resource management office  to identify transfers of the economic support fund and other fiscal  accounts to the International Narcotics Control and Law Enforcement  account (INCLE) and the Andean Counterdrug Initiative. We determined  State’s allotment and transfer information was sufficiently reliable for our  purposes, through (1) discussions with State resource management  officials and (2) cross-checks with the U.S. budget appendix, the Treasury  Financial Management Service’s combined statement, and publicly  available information from the U.S. Agency for International Development  (USAID).
To identify State’s approaches to managing programs, we reviewed  program information, including obligations data, monitoring plans, trip  report templates, grant policy directives, and grants data. For the purposes  of this review, we defined foreign assistance management as obligating  funds, selecting grantees, making assistance awards, and monitoring the  implementation of development and humanitarian assistance programs.
The sources of the obligations data were excel spreadsheets used to track  transactions, including obligations and State’s central financial  management system. We reviewed the data for reasonableness and  consistency of methodology and discussed the accuracy of the data with  knowledgeable officials at the bureaus and offices that provided the data.  Based on our analysis and discussions with the officials, we determined  that these data are sufficiently reliable for our purposes. We also obtained  information on the number of grants from State’s grants management  database, but, as mentioned in this report, we determined this information  was not reliable; and therefore, we did not use these data as support of our  findings.
To assess foreign assistance human capital requirements, we reviewed  staffing, workload, workforce planning documents, and data from State’s  Workforce Plan. We also reviewed our reports on human capital  management and strategic workforce planning and consulted with GAO  experts on these issues. We also assessed the extent to which certain  management functions related to determining skills and training  requirements met internal control standards for the federal government.  We interviewed agency officials at the Bureau of Human Resources,  Bureau of Resource Management, the Foreign Service Institute, and the  State’s Office of the Inspector General. We also discussed staffing and  skills requirements with all of the program and regional bureaus in our  scope.
The bureaus and offices in our scope included the Bureaus of Democracy,  Human Rights, and Labor; International Narcotics and Law Enforcement  Affairs; Population, Refugees, and Migration; the Office of the U.S. Global  AIDS Coordinator, the Office to Monitor and Combat Trafficking in  Persons, and all of the regional bureaus: African Affairs; East Asian and  Pacific Affairs; European and Eurasian Affairs; Near Eastern Affairs; South  and Central Asian Affairs; and Western Hemisphere Affairs. We also met  with officials of the Office of the Director of Foreign Assistance; Bureau of  Administration, Office of the Procurement Executive; and USAID. We  interviewed a non-statistical sample of 11 grants officers that included 5  officers from the bureau responsible for awarding grants for all of the  bureaus we examined. We also interviewed another non-statistical sample  of 21 program and policy officers that serve as grant officer  representatives. We selected these individuals to ensure that we covered  the range of actual grant officers as well as the program and policy officers  that serve as grant officers. We reviewed State’s fiscal year 2005  Performance and Accountability Report, publicly available assistance  account obligation information, and the foreign assistance framework  developed by the Office of the Director of Foreign Assistance to identify  State program bureaus with comparable assistance activities to USAID.  We excluded bureaus that managed military, antiterrorism, and cultural  and educational exchange programs. With the exception of the regional  bureaus, we also excluded some bureaus and offices managing  developmental and humanitarian assistance programs obligating less than  $20 million.
section_title: Appendix II: Amounts Available from Each Part of the International Affairs (function 150) Budget, Fiscal Years 2000 through 2006
section_title: Appendix III: State’s Available Funding from Development and Humanitarian Assistance Fiscal Accounts for Fiscal Years 2000 through 2006
subsections: section_title: International disaster and famine assistance
section_title: Appendix IV: Comments from the Department of State
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Adam Cowles (Assistant  Director); Donald Morrison, and La Verne Tharpes made key contributions  to this report. The team benefited from the expert advice and assistance of  Martin de Alteriis, Joe Carney, William Doherty, Clarette Kim, Grace Lui,  Jeremy Sebest, and Mona Sehgal.