A Message from the USAID Administrator
I am pleased to present our Performance and Accountability Report (PAR) for Fiscal Year (FY) 2005 on behalf of the U.S. Agency for International Development (USAID). This year's report highlights our efforts to support President Bush's National Security Strategy, which recognized development as a cornerstone of U.S. foreign policy, along with defense and diplomacy.
As USAID's Administrator, I am proud of the work we have accomplished meeting the challenges of an expanding foreign assistance agenda. Our new framework has given the Agency a more coherent approach, helping us identify core operational goals, better align resources with goals, and improve our overall management.
The results of these new efficiencies could be seen in our response to the catastrophic tsunami of December 26, 2004. As the lead agency for the U.S. government, we immediately sent a special Disaster Assistance Response Team (DART) to the region along with 100 others to assess the damage. Working in close partnership with the U.S. military, we provided critically needed food, water, medical care, and shelter. The speed with which we acted saved many lives and mitigated much suffering. In Washington, we set up a Tsunami Task Force to oversee and analyze efforts. In another first, we used funds from our disaster account to begin reconstruction in short order. At every stage, we focused on both short-term needs and long-term objectives: initiating microcredit programs; assisting displaced people; offering cash-for-work; restoring fisheries and farms; rebuilding essential infrastructure; developing early warning systems; and rehabilitating and rebuilding schools, health clinics, and public utilities.
 USAID Administrator Natsios with head engineer Askar in Muftie, Rodat (Nangarhar), Afghanistan. Building gabion walls and removing 25 years of built-up silt from the canals will significantly increase the flow of water to the affected area, enabling farmers to grow crops needing multiple floodings.
Photo: USAID/Michelle Parker
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USAID has employees in more than 100 countries who stand ready to meet any ensuing wave of development. Whether it be the Tsunami that affected dozens of countries and hundreds of thousands of people across Southeast Asia on one fated morning, or the silent tsunamis of poverty, instability, illiteracy, inequality, hunger, pollution, disease, and corruption that affect more than half the world population every day.
We also continued vital humanitarian assistance to Sudan this year, particularly in Darfur, where conditions remain acute. USAID was by far the largest donor of food assistance to Darfur during FY 2005, providing more than 376,000 metric tons, enough for approximately two million people. In addition to our extensive efforts in the South, which contributed to the accord between the North and South and the new interim Constitution, the Agency redirected some 8,450 metric tons of food already on the high seas in a quick response to a worsening food shortage in several regions of the country. Along with our immunization, sanitation, and security programs, the food helped sustain life in the country's many refugee camps and improved conditions in surrounding villages.
In accordance with President Bush's National Security Strategy, USAID has given heightened attention to weak and fragile states. Addressing these problems in their infancy are critical for international stability and American security, as about a third of the world lives in zones of conflict and recurrent instability. Consequently, we developed a new Fragile States Strategy this year to guide our efforts to reverse state decline and advance recovery to a point where transformational development can take place.
Iraq is our biggest program and largest challenge. In January, the country's first democratic elections in half a century were held, with 60 percent of the eligible voters participating despite widespread threats from insurgents. USAID devoted $86 million to this effort, funding voter registration, education, and monitoring. We also worked closely with women leaders to ensure their participation in reconstruction programs. With our encouragement, the Governing Council adopted equal rights legislation so that women can contribute to the country's social, political, and economic life with full legal and human rights. USAID has also promoted the status of women in Afghanistan, providing more than $50 million to support women's issues since the fall of the Taliban through programs ranging from education to business ventures.
Part of USAID's work is to promote far-reaching, fundamental changes in governance and institutions so that countries can make needed economic and social reforms. Consequently, we have encouraged programs to fuel local economies and train officials. Encouraging partnerships within poor countries not only engages local businesses, but enables governments and communities to rely more on their own resources and be less dependent on foreign aid.
USAID also provides significant assistance in areas such as disease control and forest management in support of several presidential initiatives. One of the most prominent is PEPFAR, the President's Emergency Plan for AIDS Relief, for which we provide 60 percent of the overall funding. Fighting HIV/AIDS is one of the Administration's top priorities, and we are actively working in each of the priority countries. We are taking particular steps to alleviate the suffering of women and children who bear the brunt of the disease, as they are victims of both the pandemic and HIV/AIDS discrimination.
In order to support President Bush's new initiative to fight malaria, USAID increased its funding budget, targeted at 21 African countries with the highest level of transmission, to $89 million this fiscal year. In collaboration with other donors, we have relied on a comprehensive strategy that unites prevention and treatment approaches, including interventions to reduce malaria among pregnant women. Approximately 10 percent of our malaria budget is devoted to research on malaria vaccine, new and improved anti-malarial drugs, and improving prevention and treatment options.
To make USAID operations more efficient and transparent, our Business Transformation Initiative is standardizing and streamlining administrative systems and management tools, as well as implementing reforms in human resources, knowledge management, and strategic budgeting. These initiatives support USAID programs worldwide and strengthen the Agency's ability to manage and account for taxpayers' funds. We have now established an Executive Information System which facilitates reporting, and have substantially completed the worldwide rollout of Phoenix, a unified financial management system, which will be complete in early 2006.
Implementing the Joint State-USAID Strategic Plan has increased our administrative and policy coherence through the Joint Management and Joint Policy Councils. We have also created an Office of Military Affairs to improve our coordination with the Department of Defense, a fact that was crucial in our tsunami response and has reaped many benefits in Iraq and Afghanistan.
 USAID Administrator Natsios discussing development plans with Cofan indigenous people in Ecuador.
Photo: USAID/Michelle Parker
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Ultimately, our success has been a direct result of the efforts of the foreign service officers, civil servants, and foreign service nationals (FSN), many of whom work on the front lines of foreign policy. Recognizing the need to improve our human resources department, we are offering new training and new opportunities for career development, especially for our FSNs. We have also begun training specialists who can be quickly mobilized during crises and hired new foreign service officers to deal with fragile states.
Last year USAID launched a branding campaign to credit U.S. taxpayers for the foreign assistance they finance. We developed a new standard graphic identity that clearly communicates the message that our aid is "From the American People." It is being used consistently on all programs, projects, activities, public communications, and commodities. Beginning in January 2006, all non-governmental organizations (NGO) and contractors will be required to use the new marking.
The roll-out of the new branding policy corresponded with the Agency's remarkable response to the Asian tsunami and together they produced a powerful and positive impact. Prior to the disaster, only 37 percent of the population had a favorable opinion of the United States. Afterwards, favorable opinions shot up to 66 percent. As Secretary of State Rice has said, USAID "is America's best public diplomacy."
In summary, I hereby certify that as of September 30, 2005, the management accountability and control systems of USAID provide reasonable assurance that the objectives of the Federal Managers' Financial Integrity Act (FMFIA) were achieved. This statement is based on the results of an Agency-wide management control assessment and input from senior officials. In addition, I certify that the financial and performance data in the FY 2005 PAR are reliable and complete. A detailed discussion of material inadequacies and actions that USAID is taking to resolve them is provided in this report.
Finally, this Performance and Accountability Report contains the Agency's performance information as required by the Government Performance and Results Act (GPRA); our audited consolidated financial statements as required by the Chief Financial Officers Act and the Government Management Reform Act (GMRA); a report on management decisions and actions in response to audit reports issued by the Agency's Inspector General as required by the Inspector General Act; and a report on our management controls as required by the FMFIA.
Andrew S. Natsios
Administrator
U.S. Agency for International Development
November 15, 2005
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