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Management Challenges
This section identifies those major management challenges and high risk areas cited by USAID's Office of Inspector General (OIG) and the continuing efforts by USAID to address them.
Financial Management
| Challenge |
Estimating Accrued Expenditures |
| Findings |
USAID's FY 2004 accrued expenditures and accounts payable recorded in the core accounting system contained inaccuracies because of the large number of Cognizant Technical Officers (CTO) responsible for estimating accrued expenditures – an effort for which many had not been adequately trained. Consequently, the OIG proposed, and USAID made, $254 million of adjustments to more accurately present accrued expenditures and accounts payable reported on USAID's financial statements. |
| Actions Taken |
Accruals training has been updated in both classroom and computer-based venues. In addition, an accruals
calculator tool has been developed to assist CTOs in calculating accruals. |
| Challenge |
Managing for Results |
| Findings |
Federal laws, such as the Government Performance and Results Act (GPRA) of 1993, require that agencies develop performance measurement and reporting systems that establish strategic and annual plans, set annual targets, track progress, and measure results. In addition, government-wide initiatives, such as the President's Management Agenda (PMA), require that agencies link their performance results to budget and human capital requirements.
A significant element of USAID's performance management system is the Annual Report (AR) prepared by each of its operating units. These reports provide information on the results attained with USAID resources, request additional resources, and explain the use of, and results expected from, these additional resources. Information in these unit-level ARs is consolidated to present a USAID-wide picture of achievements in USAID's Performance and Accountability Report (PAR).
OIG continues to monitor USAID's progress in improving its performance management system. While USAID has made notable improvements, more remains to be done. For example, last year OIG reported that certain information included in USAID's FY 2004 PAR did not contain a clear picture of USAID's planned and actual performance for that year. Moreover, the primary performance information included was based on results achieved in FY 2003 rather than FY 2004. |
| Actions Taken |
USAID continues to refine its process for collecting timely and accurate performance information. The most significant improvement is in the area of the performance information collected at the Mission level through the AR application, which will be collected on a semi-annual (as opposed to annual) basis. Twice-yearly reporting will permit operating units to project data for the full current year based on actual data halfway through the current year. These projections, based on first half actual data, will be included in the draft PAR, which is submitted to OIG in October each year. This data, along with the inclusion of the Congressionally-mandated Online Presidential Initiatives Network (OPIN) data provides real-time performance data. Performance information will then be updated when final AR data are available, and will be included in the PAR Addendum published each Spring. |
| Challenge |
Acquisition and Assistance Management |
| Findings |
Because of the innate complexities associated with acquisition and assistance—numerous laws, regulations, policies, procedures, definitions, etc.—USAID faces challenges in its acquisition of supplies and services. Compounding this situation is the fact that many of USAID's development results are achieved through intermediaries such as contractors, grantees, and recipients of cooperative agreements. In such an environment, promoting operational efficiency and effectiveness is critical in ensuring that intended results are achieved. |
| Actions Taken |
USAID is collaborating with the Department of State and other federal agencies, the Small Business Administration, and the Office of Management and Budget (OMB) on how best to support small business programs in contracts involving overseas performance. The Agency has also issued a policy directive to reinforce adherence to existing policies on U.S. Personal Service Contracts (PSC) related to contract extensions and renewals. |
| Challenge |
Human Capital Management |
| Findings |
The PMA identifies the strategic management of human capital as one of five government-wide areas that needs improvement. In response to the PMA, and to address its own human capital challenges, USAID has undertaken a major effort to improve and restructure its human capital management. For example, in August 2004, USAID issued its first comprehensive Human Capital Strategic Plan, which covered FY 2004 to FY 2008. As of June 30, 2005, OMB gave USAID a "yellow" rating for its overall status in the area of human capital management, an upgrade from an unsatisfactory rating of "red." USAID needs to continue efforts to implement its workforce planning to close skill gaps through recruitment, retention, training, succession planning, and other strategies. |
| Actions Taken |
The Agency has created a permanent workforce planning process, demonstrated a workforce analysis model, and obtained management approval of the workforce analysis and planning process. This process identifies skill and competency gaps and presents strategies to close gaps. USAID has also completed a diversity study and established an Executive Diversity Council. It continues to close mission-critical gaps, meeting all of its hiring targets for FY 2005. The Agency also continued to adjust headquarters and field organizational structures using redeployment and de-layering. As a result of a number of initiatives, USAID has moved up in the rankings of the best places to work and has experienced a decline in civil service attrition. |
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