Input:
	Background

State is authorized to designate acceptance facilities—in addition to its  own passport offices—to provide passport execution services to the  American public. The majority of passport applications are submitted at  acceptance facilities nationwide; these include post offices; federal, state,  and probate courts; some public libraries and public universities; and a  variety of other county, township, and municipal offices. Agents at these  facilities are responsible for, among other things, verifying that the  applicant’s identification documents (driver’s license, for example) and  photo are authentic and match the person standing before the agent.  Acceptance facilities retain the execution fee for this service. Figure 1  depicts the execution process.
State reported that there were 8,583 active acceptance facilities  nationwide as of September 30, 2006 (see table 1)—post offices comprised  almost two-thirds of all active facilities. According to consular officials,  for fiscal year 2006, post offices executed about 72 percent of applications  for minors and for adults applying for the first time; nonpostal facilities  executed about 25 percent. The remainder (3 percent) were executed by  14 of State’s passport offices. In recent years, State has expanded its  network of acceptance facilities to accommodate increasing passport  demand. We reported previously that there were approximately 7,000  acceptance facilities as of March 2005. In fiscal year 2006, State added 753  new locations to its network of acceptance facilities, of which 636 are post  offices, and 117 are nonpostal facilities.
State requires that acceptance agents be U.S. citizens, permanent  employees, 18 years or older, and have successfully completed a training  program. We reported in July 2007 that State has taken a number of  measures to ensure the security and quality of passports, including  establishing internal control standards and quality assurance measures  and training of acceptance agents. However, we found that State lacks a  program for oversight of passport acceptance facilities and made a  number of recommendations to improve this oversight. State indicated  that it has begun to take actions that would address our recommendations.

		State Sets Passport Fees; USPS Provides Information for State’s Consideration

The Secretary of State prescribes fees for passport services that State  provides and has some discretion in setting and collecting passport fees.  The Chief Financial Officers Act of 1990 requires, and Office of  Management and Budget (OMB) guidance in Circular A-25 advises, that  agencies review the fees for their programs biennially. According to OMB  A-25 guidance, fees should be sufficient to recover the full cost to the  federal government of providing the service, resource, or good. “Full cost”  includes all direct and indirect costs to the federal government, such as  direct and indirect personnel costs, including salaries and fringe benefits  such as medical insurance and retirement; physical overhead, material,  and supply costs; rents; and management and supervisory costs.
In addition, State and USPS signed a formal, interagency agreement in  2000, which sets forth the terms and conditions of the execution services  that USPS provides on State’s behalf. The agreement states, among other  things, that State will consider the results of any USPS analyses of  passport execution costs and, that before changes in the execution fee are  finalized, State and USPS will mutually agree upon the new amount.  Further, the agreement states that this partnership is voluntary—if, at any  time, State and USPS do not mutually agree to the new fee, either party is  free to consider other options, including ending their partnership.

		State Is Developing Alternative Document to Meet WHTI Requirements

Based on recommendations from the 9/11 Commission, Congress, in 2004,  mandated the development and implementation of a plan that requires  U.S. citizens to have a passport or other document that demonstrates their  identity and citizenship when entering the United States from any foreign  country or territory. Prior to this legislation, U.S. citizens did not need a  passport to enter the United States if they were traveling from Canada,  Mexico, the Caribbean, or Bermuda. DHS and State implemented this  requirement for airports on January 23, 2007, and are to implement the  requirement for land and sea ports before June 1, 2009 (see fig. 2 for key  dates in WHTI implementation). The departments have indicated that  they will begin to phase in the requirement for land and sea ports in 2008.
The current passport book fee is $97 for first time, adult applicants (16  years and older). State reported that there are circumstances where, due  to reasons of both cost and ease of use, the traditional book-style U.S.  passport may not be the optimal solution for international travelers along  the northern and southern land borders of the United States, or  international sea travel between the United States and Canada, Mexico,  the Caribbean, and Bermuda. Thus, in October 2006, State announced  plans to produce a passport card as a lower cost means of establishing  citizenship and identity for U.S. citizens. For the passport card, State has  proposed to charge $45, which includes a $25 execution fee. The current  execution fee is $30 for passport books. The proposed reduction of $5  applies to the execution fee for both passport documents because  acceptance agents will follow the same procedures regardless of the type  of document. Table 2 shows the current passport book fees, as well as the  proposed fees for the passport book and card.
According to State, passport cards, like passport books, would be issued  for a 10-year validity period for U.S. citizens 16 years and older and for a   5-year validity period for U.S. citizens under 16 years of age.

	State Proposes Reduced Execution Fee Based on Commitment to Congress and Other Factors

State considered several factors, including congressional interest in having  a low-cost travel document and its own estimated execution costs, when  setting the proposed execution fee. Based on an interagency agreement,  State also reviewed information from USPS on its estimated passport  execution costs.

		State’s Cost Estimates One of Several Factors the Department Considered When Lowering the Execution Fee

According to State, the information from its cost of service study  supported the fee-setting process in 2006, but the proposal to reduce the  execution fee was not based solely on full cost recovery considerations.  Consular officials told us that they considered several factors when setting  the proposed execution fee. These include:    Commitment to Congress to issue a low-cost document. According to  consular officials, the department made a commitment to issue an  alternative document to meet WHTI requirements that would be, at most,  one-half the cost of the passport book, which currently costs $97.
State’s estimates of its passport execution costs. State, through an  independent contractor, conducts cost studies for its consular services,  including passport execution, to determine the full costs for providing  these services. Consular officials stated that the department’s policy is to  review these fees on a periodic basis, rather than biennially, due to the  length of time it takes to complete the cost of service studies. State’s  most recent cost of service study estimated the full costs for execution  services to the department for fiscal years 2004 and 2005 to be $24.36.  Because OMB guidance states that subject to exceptions, user charges will  be sufficient to recover the full cost to the federal government, consular  officials told us that the department decided to not lower the execution  fee below the amount estimated in the most recent cost of service study.
Maintaining State’s network of acceptance facilities. According to  consular officials, State wanted to ensure that, while the cost of the  passport card was lower than the cost for the current passport book, that  its execution fee was not so low that it jeopardized State’s relationship  with its network of acceptance facilities, on which the department  depends to provide passport services to U.S. citizens. State has seen an  increase in passport demand from a base level of 7 million passports  issued in 2003 to an expected more than 17 million issuances in fiscal year  2007. Based, in part, on these data, consular officials concluded that,  even with the reduced execution fee, the department and its acceptance  facilities could continue to expect additional funds from passport services.
Figure 3 shows that, historically, passport execution fees have been higher  than State’s estimated costs. For example, in 2002, State set the execution  fee at $30 based on a cost estimate of $16.20. Consular officials told us  that, based on policy considerations, there are certain services for which  State does not charge a fee or the fee covers only a portion of the cost of  the service. For example, State may not charge a passport fee from certain  relatives of a deceased member of the Armed Forces proceeding abroad to  visit the grave or to attend a funeral or memorial service for that member.  Consular officials stated that their general management practice has been  to round cost estimates for some services up to cover the cost of those  services for which the public is not charged.
In 2005, State kept the passport execution fee at $30 based on the $24.36  cost of service study estimate. For the passport card, State only rounded  up its cost estimate to the nearest dollar to help reduce the total cost of  the card.

		State Considered Information from USPS

Based on a 2000 interagency agreement, consular officials consider cost  information from USPS in setting passport execution fees. In a fiscal year  2001 internal cost study, USPS estimated that its costs were about $13 per  passport. In April 2006, using this study as a baseline, USPS notified  Congress that its projected costs for fiscal year 2005 had increased to  about $19 per passport. According to consular officials, over the next  several months, State and USPS met to discuss the Service’s estimated  passport execution costs. Then, in early August 2006, USPS sent a letter to  State to notify the department that its initial estimate of $19 did not  include a contribution to institutional costs that USPS applies to postal  and nonpostal products and services. According to USPS, its average  contribution to institutional costs was approximately 76 percent of  directly attributed costs. Using this average, USPS told State that its full  costs for passport execution for fiscal year 2005 would total about $33 per  execution (see table 3)—about $19 for costs directly attributable to  passport execution and $14 for institutional cost coverage. USPS’s 2001  study did not address institutional costs. Consular officials stated that  State did not receive more detailed information about USPS’s internal cost  study or how the cost estimates were developed.
A number of factors affecting costs may have changed since USPS’s 2001  cost study, and USPS did not take these changes into account when  projecting passport execution costs for fiscal year 2005. For example, the  estimates that USPS provided to Congress and State did not account for  the projected increase in passport application volume or the growth in  active postal acceptance facilities. As a result, it is unclear whether USPS’s  estimate accurately reflects its costs.
In late August 2006, State notified USPS that it had decided to propose a  $25 execution fee, which was higher than the directly attributable costs for  passport execution services that USPS reported to Congress in April 2006  (see fig. 4 for a time line of communication involving State and USPS on  this issue). Regarding the additional contribution to institutional overhead,  USPS officials told us that they have some flexibility in the percentage of  institutional costs that the Service assigns to each of its products, in  general, including the percentage used to calculate the passport execution  cost estimate provided to State, specifically. For example, in fiscal year  2006, USPS charged an additional 14 percent of its direct and indirect  costs for insured services to cover the institutional cost assigned to this  service, and 197 percent for presorted, first class letter mail. As of August  2007, USPS officials stated that they have agreed, in principle, to State’s  proposed $25 execution fee.
State notified its network of acceptance facilities in early 2006 that the  department would be proposing a lower execution fee. However, State did  not seek cost information from nonpostal acceptance facilities. According  to State officials, nonpostal acceptance facilities are not organized in a  way that would make systematic data collection feasible. Thus, State  relied on information that these facilities provided to the department  through the public comment period following the publication of the  proposed passport card rule in the Federal Register.

	Lack of Transparency in State’s Most Recent Passport Execution Cost Estimate

We found that State’s most recent cost of service study, which the  department considered when establishing the reduced passport execution  fee, lacked documentation of several of the contractor’s key decisions.  State is in the initial stages of a new study of fiscal year 2007 costs.
We have previously reported that cost estimates are well documented  when they can be easily repeated or updated and can be traced to original  sources through auditing. Rigorous documentation increases the  credibility of an estimate and helps support an organization’s decision- making process. In particular, the documentation should explicitly identify  the primary methods, calculations, results, rationales or assumptions, and  sources of the data used to generate each cost element. Regarding the  passport execution fee, State considered execution cost estimates from its  2004 cost of service study as part of the fee-setting process for the  passport card. We found that this study lacked documentation to justify  key decisions the contractor made when estimating passport execution  costs. We found the following examples:    Estimates of the resources associated with passport execution (both  direct and indirect costs) were integral to the contractor’s calculation of  State’s cost of providing this service. At the time of the 2004 cost of  service study, however, State’s financial systems and processes did not  provide managerial cost information for its activities, such as the full cost  of the department’s passport activities. Thus, State was not able to obtain  necessary cost information directly from the department’s financial system  and made numerous assumptions to estimate the aggregate cost of  consular activities, including the passport execution costs. State’s  contractor used baseline obligations data from fiscal year 2002 to estimate  passport execution costs for fiscal years 2004 and 2005 ($24.36). The  contractor’s final report, however, did not indicate that there may be  limitations in using this information as opposed to actual expenditure  data.
The estimated time associated with passport execution was another  important component of the contractor’s methodology. To determine how  much time was spent on passport services and develop a time estimate,  the contractor conducted surveys of State’s consular staff . We requested  documentation from State on the contractor’s sampling plan and survey  results, but officials were not able to provide additional details about the  survey’s sample design, results by office, or how the data was used to  arrive at the final estimated time State officials spend on passport  execution.
In the study’s survey of State’s domestic passport agencies, the tasks for  executing and adjudicating a passport were combined into one activity.  Therefore, to estimate the time generally associated with execution  services that State provides, the contractor visited several post offices in  the Washington, D.C., area, and performed time in motion studies at these  facilities. Using the time estimates gathered at the post offices as a proxy,  the contractor concluded that it took State an average of 7.63 minutes for  each passport execution. However, State could not provide documentation  regarding the number, type, and location of post offices visited or detailed  results of the contractor’s time in motion studies. This methodology  supported the specific costs allocated to the passport execution.
State is beginning a new cost of service study, according to consular  officials, which will estimate fiscal year 2007 costs for all consular  services, including passport book and card execution.

	Conclusion

State considered several factors in proposing to reduce the execution fee  by $5, most notably its commitment to Congress to create a lower cost  document for U.S. citizens that would comply with WHTI documentation  requirements; State’s proposal achieves this commitment. State’s passport  execution cost estimates, while not the sole factor that the department  considered when setting this fee, are important data, as OMB guidance  encourages agencies to recover the full costs of the services they provide.  However, State did not ensure adequate documentation of key aspects of  the study’s assumptions, methodology, and limitations. In addition, USPS  did not provide detailed information regarding its estimated passport  execution costs, which were based on a fiscal year 2001 study. Better  documentation would increase the credibility of State’s estimate and help  support its fee-setting process. Given the potential impact on a significant  number of U.S. citizens, it is imperative that State have a transparent  process for setting the passport execution fee to ensure that passport  execution cost estimates can be used as a reliable basis for decisions.

	Recommendation for Executive Action

To improve the transparency of the passport execution fee-setting process,  we are recommending that the Secretary of State instruct the department’s  contractor to provide additional documentation in its forthcoming fee  study to support key methodologies, assumptions, and limitations. Such  documentation should clarify survey and other work performed, disclose  all sources of cost information being used, and identify potential  limitations and uncertainties associated with the cost figures and other  data. The study should also document the extent to which State’s  contractor incorporated estimated passport execution costs from USPS  and other acceptance facilities.

	Agency Comments and Our Evaluation

We received written comments from State, which we have reprinted in  appendix III. State agreed with our recommendation and stated that the  department is working with its contractor for State’s new cost of service  study to ensure that the final report identifies primary methods,  calculations, and rationales for any assumptions made. State and USPS  also provided technical comments, which we have incorporated into the  report, as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to the Secretary  of State and the Postmaster General and other interested Members of  Congress. We also will make copies available to others upon request. In  addition, the report will be available at no charge on the GAO Web site 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 IV.

Appendix I: Scope and Methodology

To determine the process by which the Department of State (State) set the  proposed passport execution fee, we reviewed current laws and  regulations that authorize the setting of fees, as well as guidance to  agencies on the fee-setting process from the Office of Management and  Budget, and State’s procedures as outlined in the Foreign Affairs Manual.  We also collected and analyzed documentation and interviewed officials  from State’s Bureau of Consular Affairs, which is responsible for  determining the passport card fees, to determine the factors that State  considered.
To determine how the execution cost data that State considered was  developed, we reviewed data on State’s estimated execution costs as  outlined in the bureau’s June 2004 consular cost of service study and  interviewed consular officials regarding the study’s scope and  methodology. We also reviewed State’s audited consolidated financial  statements of net costs for the fiscal years 2006, 2005, 2002, and 2001. In  addition, we analyzed data on the U.S. Postal Service’s (USPS) estimated  passport execution costs and interviewed USPS officials responsible for  cost analysis and pricing to determine the process USPS uses to estimate  passport execution costs. In particular, we reviewed USPS’s September  2001 passport execution cost study report, as well as information on its  costs and revenue. We also examined USPS’s audited consolidated  financial statements of net costs for the fiscal years 2006 and 2001. We did  not evaluate the validity of State and USPS’s cost estimates.
We conducted our work between May and August 2007 in accordance with  generally accepted government auditing standards.

Appendix II: Passport Adjudication and Issuance Process

Under U.S. law, the Secretary of State has the authority to issue passports.  Once a passport application has been received by one of the 17 domestic  passport-issuing offices, a passport examiner must examine each  application to determine, through a process called adjudication, whether  the applicant should be issued a passport. Adjudication requires the  examiner to scrutinize identification and citizenship documents presented  by applicants to verify their identity and U.S. citizenship. Once the  passport examiner has determined that an applicant is eligible for a  passport, State personalizes the passport with the applicant’s information  and delivers it to the applicant (see fig. 5). According to State’s proposed  notice on the passport card in the Federal Register, the basis of the  passport card application fee is to be the direct costs of producing  passport cards, the card stock, technology, adjudicating the application,  printing the biographic information on the card, and priority mail return of  the card.

Appendix III: Comments from the Department of State

Appendix IV: GAO Contact and Staff Acknowledgments

	Staff Acknowledgments

In addition to the individual named above, John Brummet, Assistant  Director; Robert Owens, Assistant Director; Kathryn H. Bernet; Richard  Cambosos; Joseph Carney; Esther Cha; Peter B. Grinnell; Jeffrey Isaacs;  and Grace Lui made key contributions to this report.

Output:
Why GAO Did This Study

As early as January 31, 2008, U.S. citizens will be required to present a passport or other approved document to enter the United States at all ports of entry. The Department of State (State) is developing a "passport card" as a means of establishing U.S. citizenship for individuals crossing U.S. land borders or arriving by sea from Canada, Mexico, the Caribbean, or Bermuda. State proposes to charge $45 for the card, which would include a $25 execution fee. Acceptance facilities, including State's passport offices, as well as post offices and state courts, execute passport applications on State's behalf, and retain this fee. GAO was asked to examine (1) the factors State considered when setting the proposed fee and (2) how execution cost data were developed. GAO reviewed current laws that authorize the setting of fees and met with State officials to determine how they set the execution fee. GAO also met with officials from State and the U.S. Postal Service (USPS) to discuss acceptance facility execution costs and how these costs were estimated.

What GAO Found

State considered several factors, including congressional interest in having a low-cost travel document, when setting the proposed passport execution fee. State has proposed to reduce the current execution fee from $30 to $25, which would help the department to issue a lower cost passport card that meets the new documentation requirements. Consular officials told GAO that State made a commitment to Congress to issue a document that would be, at most, one-half the price of the current passport book, which costs $97 for first time, adult applicants. To do this, State needed to reduce its fees, including the execution fee. Consular officials stated that State did not want to reduce the execution fee below $25 because it wanted to recover its costs, which it estimated at $24.36 per execution. In addition, the fee needed to be high enough to avoid jeopardizing State's relationship with acceptance facilities, on which State depends to provide passport services. State concluded that $25 would compensate acceptance facilities based, in part, on data from USPS that initially indicated its passport execution costs were about $19, as well as a projected increase in application volume. USPS later told State that the $19 figure did not include additional indirect costs. GAO found that State's most recent cost of service study, which estimated passport execution costs, lacked documentation of key decisions. Rigorous documentation increases an estimate's credibility and helps support an organization's decision-making process. Documentation of cost estimates should explicitly identify the primary methods, calculations, results, and rationales or assumptions. State was not able to provide documentation of critical components of the study's methodology. For example, consular officials could not provide details of its survey used to estimate the time it takes to execute a passport, including how the data was used to arrive at the final time estimate. State has begun a new cost study that will provide updated estimates of execution costs.


Input:
	Background

USAID is headquartered in Washington, D.C., and has field locations in  approximately 90 countries to provide economic, development, and  humanitarian assistance worldwide in support of U.S. foreign policy  goals. Its activities include technical assistance, research, policy advice,  and infrastructure assistance.

		USAID’s Organizational Structure for Designing and Managing Its Assistance Activities

In headquarters, USAID is organized into three functional and five  geographic bureaus. The functional bureaus are aligned with the agency’s  three strategic goals—(1) economic growth and trade, (2) democracy and  governance, and (3) global health. The bureaus design and manage  activities that support their specific strategic goal. However, each activity  is typically implemented in multiple countries around the world. The five  geographic bureaus are responsible for oversight of overseas missions that  design and manage activities that support USAID’s strategic goals.
Overseas, USAID designs and manages its foreign assistance activities and  A&A instruments at several types of missions. These include    bilateral missions that design and manage assistance activities and A&A  instruments in the countries in which they are located, such as the mission  in Indonesia;  regional missions that design and manage assistance activities and A&A  instruments in the countries in which they are located and also for other  countries in the region, such as the mission in Kazakhstan; and  regional missions that provide administrative support, such as acquisition  and assistance, legal and financial, to missions in their region, such as the  mission in Thailand.
USAID’s Office of Acquisition and Assistance (OAA) has overall  responsibility for the administration of A&A instruments in headquarters.  Its A&A staff provide professional advisory and technical support to  USAID’s functional and geographic bureaus for developing and managing  A&A instruments. OAA also provides periodic guidance to A&A staff at  overseas missions. OAA is located within USAID’s Management Bureau,  and its director reports to the Deputy Assistant Administrator of the  Management Bureau.
USAID A&A staff at overseas missions provide advice and support to  mission staff who design and manage assistance activities; they also have  overall responsibility for the administration of A&A instruments at  overseas missions. A&A offices are typically headed by a contracting  officer (CO) who reports to the mission director or deputy mission  director. At most bilateral missions, COs are co-located with A&A  specialists and CTOs. However, under USAID’s regional mission structure,  COs often provide A&A support to more than one mission and are not  necessarily co-located with either the CTOs or all of the A&A specialists  who assist them. Some missions with no on-site CO may instead have on- site A&A specialists who provide A&A support to CTOs. Appendix II lists  missions with authorized on-site COs as of July 2008, as reported by OAA.

		A&A Workload Trends for Fiscal Years 2002 through 2007

USAID’s total obligations for A&A instruments doubled from about $5  billion to about $10 billion from fiscal year 2002 through fiscal year 2007.  While total A&A obligations and number of A&A instruments increased  only slightly at headquarters over this time period, A&A obligations  overseas increased by nearly 600 percent, from about $1 billion in fiscal  year 2002 to about $6 billion in fiscal year 2007. In fiscal year 2007, A&A  obligations managed by overseas missions made up the majority—nearly  60 percent—of total A&A obligations. Figure 1 illustrates the A&A  obligations managed by OAA headquarters and overseas missions for  fiscal years 2002 through 2007.
USAID’s total number of A&A instruments from fiscal years 2002 through  2007 also increased substantially, from about 6,000 to about 11,000. In  fiscal year 2007, around 71 percent of the total number of A&A  instruments was managed by overseas missions.

	USAID Lacks Human Capital Data Needed for a Strategic A&A Workforce Plan That Could Help Address Its Overseas Workload Imbalances

USAID lacks the capacity to develop and implement a strategic A&A  workforce plan because it lacks two key elements: (1) sufficiently reliable  and up-to-date overseas A&A staff level data and (2) comprehensive  information on the competencies of its overseas A&A specialists, who play  a critical role in assisting COs and CTOs in overseas missions. During our  fieldwork, we found that the numbers of A&A staff with the necessary  competencies did not match A&A workload. Although various USAID has  launched some ad hoc attempts to address the agency’s A&A workforce  issues, these efforts lack critical elements of a strategic A&A workforce  plan, particularly comprehensive information on its A&A specialists  overseas.

		USAID Lacks Sufficiently Reliable and Up-to-Date Data on A&A Staff Levels

Although USAID’s Office of Human Resources (OHR) systematically  collects data on A&A specialists’ staff levels, these data are not sufficiently  reliable. OHR officials acknowledged they had concerns about the  reliability and accuracy of the overseas A&A staff level data, particularly  with regard to the number of overseas A&A specialists. These officials  stated that they receive staffing data from missions but do not know  whether mission staff validate the data. In addition, they told us that  mission staff who prepare these data may not receive adequate guidance  for classification of different overseas staff positions, and as a result,  misclassification and inaccurate reporting of A&A staff levels may occur.
Furthermore, OHR officials do not validate or confirm the data they collect  from missions, according to these officials.
The Office of Acquisition and Assistance (OAA) does not systematically  track the number of overseas A&A specialists, and its data on overseas  A&A staff levels are out of date. According to OAA officials, the office’s  most recent data on the agency’s entire A&A workforce are the result of a  fiscal year 2005 survey of all overseas missions to analyze workload and  staffing within OAA. While OAA’s data are not current, the Office of  Human Resources (OHR) officials told us that OAA’s data may still be  more accurate than the data collected by OHR in fiscal year 2005.
Our analysis of OAA’s and OHR’s separately collected data on overseas  A&A staff levels for the end of fiscal year 2005 (the most current data  made available to us by OAA) revealed substantial discrepancies. For  example, comparing the two sets of data showed that OAA’s reported total  overseas A&A staff levels for that year were more than 78 percent higher  than those reported by OHR—OAA reported 264 overseas A&A staff, and  OHR reported 148. In addition, we found that, at certain missions, OHR’s  data showed no A&A specialists, whereas OAA’s data indicated several  A&A specialists.
Although ready access to the Office of Human Resources’ databases would  allow other USAID offices to identify and resolve discrepancies in their  staffing data, the offices lack such access. To date, according to OHR  officials, OAA has not specifically requested OHR staffing data in order to  compare them to its own.

		USAID Lacks Comprehensive Information on A&A Staff Competencies

Although A&A obligations have increased significantly at overseas  missions, USAID has not collected comprehensive information on the  competencies, including knowledge, skills, abilities, and experience levels,  of its overseas A&A staff. According to the principles of effective  workforce planning, an agency should determine the critical skills and  competencies needed to achieve current and future programmatic results.  In May 2008, the Office of Acquisition and Assistance (OAA) and the Office  of Human Resources (OHR) jointly conducted competency assessments  for A&A staff in headquarters and COs in overseas missions as part of an  effort to implement the President’s Management Agenda. However, these  assessments did not include A&A specialists at overseas locations. For  staff included in this effort, OAA and OHR conducted a capability  assessment that identified key A&A staff competencies, such as decision  making and written communication skills; assessed competency levels;  identified competency gaps; and established strategies to reduce staff  vacancies and skill gaps through recruitment, retention, and training.  According to OHR officials, USAID expects to implement a similar  assessment for A&A specialists overseas but will likely not begin  implementation until fiscal year 2011 at the earliest. Without sufficiently  reliable data on its entire A&A workforce—including A&A specialists  overseas—USAID cannot collect comprehensive competency information,  identify gaps in the numbers, skills, and competencies of its A&A  workforce, and develop strategies to address them.

		USAID Has Not Matched A&A Staff to Workload at Missions We Visited

At the USAID missions we visited, we found that the numbers and  competencies of A&A staff did not match A&A workload. While at some  missions the numbers of A&A staff with the necessary competencies were  considerably less than adequate, at other missions they were more than  adequate, according to mission officials.
Officials at five missions we visited—Thailand, Cambodia, Kazakhstan, the  Kyrgyz Republic, and Mali—told us that their A&A staff at times could not  provide adequate and timely support, such as providing guidance to CTOs  and approving A&A documents, primarily because the numbers of A&A  staff with the necessary competencies to manage their workloads were  insufficient. We found several such examples, including the following:    A CO at the regional mission in Thailand—where three COs manage A&A  activities in 12 countries—stated that she sometimes could not address  some missions’ needs in a timely manner because of competing workload  demands. Staff at one of the missions for which the regional mission  provides A&A support—Cambodia—told us that while their A&A  workload has increased, they have at times not received adequate A&A  support. These staff attributed this lack of support to a decline in A&A  specialist staff levels from three in 2007 to one at the time of our visit, as  well as the inexperience of the mission’s one remaining on-site A&A  specialist. This A&A specialist only works on A&A activities part-time  because she has other responsibilities. The mission director told us that as  a result, she has had to perform tasks that are normally considered among  A&A staff’s responsibilities, such as revising A&A documents.
The mission director and A&A staff in Kazakhstan—a regional mission  responsible for A&A activities at missions in Kazakhstan and four other  Central Asian countries that do not have on-site A&A specialists—told us  that they could not adequately support A&A activities at the four missions  that do not have on-site A&A specialists. Staff at one such mission, in the  Kyrgyz Republic, noted that when they needed A&A staff on site to provide  more guidance to their less experienced CTOs, the A&A staff were not  available. Officials noted that without such guidance from A&A staff, CTOs  may be more likely to incorrectly manage A&A instruments. A&A staff in  Kazakhstan told us their ability to visit and support A&A activities at such  missions was hindered by a heavy workload and competing demands from  the other missions in the region.
Officials at the mission in Mali, which had two on-site A&A specialists and  received A&A support from COs at the regional mission in Ghana, told us  that these remotely located COs were sometimes not available to assist  them in meeting their activities’ goals. For example, they said they had  delayed time-sensitive seasonal agricultural projects because the CO was  not available when needed to approve contracts.
In contrast, officials at the other two missions we visited—Peru and  Indonesia—told us they had more than adequate numbers of A&A staff  with the necessary competencies to manage their workload. Some staff  even indicated that these missions may not need all of their assigned COs  to adequately manage their A&A work. For example, one CO who will  soon be leaving the mission in Indonesia may not need to be replaced,  according to some A&A mission staff. A CO at the mission in Peru told us  that because the mission had so many experienced or competent A&A  staff, the A&A workload was more easily managed, and staff even had  sufficient time to volunteer the mission as a location for USAID to pilot a  new system through which USAID A&A instruments will be awarded.
Our survey of A&A staff overseas generally supported these findings from  our fieldwork. For example, about 70 percent of A&A respondents  overseas reported that it was somewhat or very difficult to alter staffing  patterns to meet the demands of changing workloads. Most notably, one  respondent reported a disparity between the workload, numbers and  competencies of A&A staff levels at the missions to which she was  previously and currently assigned. While the respondent found the  workload to be less manageable at her prior mission with inexperienced  A&A staff, she found the workload at her current mission more easily  manageable because it had more experienced A&A staff.

		USAID’s Recent Planning Efforts Do Not Comprehensively Address Its Strategic A&A Workforce Planning Needs

In recent years, USAID has launched some ad hoc attempts to address the  agency’s A&A workforce issues. However, as the following indicates, these  efforts lack critical elements of a strategic A&A workforce plan,  particularly comprehensive information on its A&A specialists overseas:    Proposal to increase OAA staff levels. In May 2008, OAA officials proposed  to the Management Bureau an increase in staff from 133 to 218 in OAA  headquarters. According to Management Bureau officials, OAA has been  approved for 154 positions for fiscal year 2008. This proposal only  addresses A&A staff levels in headquarters, however, and does not  consider A&A staff levels overseas.
Development Leadership Initiative. This agencywide, multiyear effort is  intended to recruit U.S. staff to be placed overseas. Under this initiative,  USAID plans to hire 120 staff, including 15 COs, in fiscal year 2008.  However, this initiative only seeks to increase the levels of overseas COs,  not the levels of A&A specialists.
A&A Workforce Capability Assessment. As mentioned earlier, this was a  May 2008 effort to identify and assess the competencies of all COs, as well  as A&A specialists in headquarters. Competency assessments of A&A  specialists overseas are not expected to begin until fiscal year 2011 at the  earliest.
Workforce planning model. This agencywide management tool projects  the number, type, and location of staff needed to accomplish the agency’s  mission, based on expectations for future program funds as well as the  size and location of overseas missions. The model does not, however,  incorporate data on either the current A&A staffing levels or the  competencies of existing A&A staff.
Taken together, these efforts do not constitute a strategic A&A workforce  plan that takes into account the entire A&A workforce. USAID has yet to  take an integrated approach to developing and implementing such a  workforce plan.

	USAID Has Not Implemented the Evaluation Mechanism of Its A&A Function

USAID has not implemented an evaluation mechanism to provide  oversight of its A&A function. OAA’s Evaluation Division is responsible for  providing this oversight to ensure that A&A operations follow USAID  policies, primarily by assessing the agency’s A&A operations worldwide. In  2006, USAID’s OIG found that the division had not met its previously set  target of conducting on-site evaluations of A&A operations at all missions  within a 3-year period, due to resource constraints within the division.  The division has since developed a new evaluation mechanism, the  scorecard evaluation, that relies on COs’ annual self-assessments of A&A  operations and is followed by on-site reviews at selected missions,  conducted by division staff. However, the division has yet to implement  this evaluation mechanism.

		OAA’s Evaluation Division Is Responsible for Evaluating the A&A Function but Did Not Meet Its Previous Target for A&A Evaluations

Among other responsibilities, OAA’s Evaluation Division is to conduct  evaluations of worldwide A&A operations to ensure USAID’s compliance  with an executive order and certify the effectiveness of USAID’s A&A  function. GAO’s internal control standards state that evaluations— whether in the form of self-assessments or other means—are necessary to  ensure an agency’s operational effectiveness and compliance with  applicable policies. Furthermore, the President’s fiscal year 1995  Executive Order on Federal Procurement Reform included a requirement  that every U.S. agency evaluates its A&A function against the agency’s  approved criteria. To comply with the order, OAA developed an evaluation  program to assess USAID’s A&A function. This evaluation program was  also designed to enable USAID’s Management Bureau to annually certify  the adequacy and effectiveness of management controls for the A&A  function, as required by USAID directives.
Prior to fiscal year 2007, the evaluation program required Evaluation  Division staff to make on-site visits to assess A&A operations at OAA  offices in headquarters and missions. Evaluations were designed to be  performed at each mission by teams of two Evaluation Division staff over  a period of about 2 or 3 weeks. After each team had completed its  fieldwork, the OAA director reported to the mission director on  deficiencies that the team had identified in the mission’s A&A operations  and provided recommendations to address those deficiencies.
In fiscal year 2006, the OIG found that OAA’s Evaluation Division had not  met its target of conducting evaluations of all A&A operations to ensure  that the agency had responded to the executive order on federal  procurement reform. Although the division had set a goal of conducting  evaluations at all of the approximately 85 missions every 3 years, the OIG  found that for fiscal years 2003 through 2005, the division had evaluated  A&A operations at only 9 missions—about 11 percent of the number of  missions at the time. The OIG report noted that a staffing shortage, as well  as a significant increase in USAID’s A&A operations in Iraq and  Afghanistan, had adversely impacted the division’s ability to meet its target  during that time frame. OAA’s Evaluation Division was unable to certify to  the Management Bureau the overall adequacy and effectiveness of  management controls at the missions on the basis of such a small number  of completed evaluations. The division also could not provide reasonable  assurance that USAID was effectively implementing the executive order.  As a result, the OIG recommended in 2006 that the director of OAA  develop a plan for verifying and ensuring that the agency was effectively  implementing the executive order.

		New Evaluation Mechanism Relies on COs’ Self-Assessment of A&A Operations

In fiscal year 2007, in view of the resource constraints that had hampered  its ability to meet its prior evaluation targets, OAA’s Evaluation Division  developed a Web-based self-reporting mechanism for evaluating the A&A  function, referred to as the scorecard evaluation. According to Evaluation  Division officials, the division previously lacked a mechanism to review all  locations every year for systemic problems in A&A operations. With the  scorecard evaluation, all USAID COs who manage A&A offices are to  assess their own operations and thereby assist OAA in identifying areas of  vulnerability in headquarters and missions each year. The scorecard  methodology follows GAO’s Standards of Internal Control to achieve  effectiveness and efficiency of acquisition operations; ensure fiscal  integrity of the agency’s acquisition system; and ensure that applicable  acquisition laws, regulations, guidance, and principles are being followed.  Areas identified in the scorecard are to include COs’ reporting of staffing  patterns, assessment of the A&A operations’ management systems, and the  extent to which A&A award solicitations, negotiations, and administration  comply with USAID guidelines.
The Evaluation Division is expected to follow up on the scorecard  evaluations with on-site reviews of a risk-based selection of offices and  missions, followed by evaluation reports that make recommendations for  mitigating risks associated with A&A operations at these locations. After  reviewing the COs’ submitted scorecards—certified by the appropriate  mission director or other management official—the Evaluation Division is  to determine the risk levels associated with all A&A activities in the COs’  self-reported scorecard evaluation responses. Next, the division expects to  select certain missions for on-site visits, using a risk-based approach based  on the scorecard evaluation results and informal, internally generated  criteria, such as COs’ reliance upon less-experienced COs, number of years  lapsed since the last evaluation at the location, high funding levels, and  country-specific issues that might raise concerns in the division about  A&A operations. During the on-site visits, which are expected to last  approximately 1 week, the Evaluation Division staff will conduct a hands- on review of mission documents—including the CO’s work products and  all supporting documents in the A&A file—hold discussions with mission  staff to verify the submitted scorecard responses, and follow up on any  issues mentioned in the scorecards. Finally, on the basis of its findings  from the scorecards and the on-site reviews, OAA is expected to develop  an evaluation report with recommendations on the missions’ A&A  operations that missions are required to address prior to the following  year.
As of August 2008, the Evaluation Division had completed pilot scorecard  evaluations—including on-site visits—at four locations with USAID A&A  operations: the East Africa regional mission and missions in Kenya, Peru,  and Sudan. In its evaluation reports for these pilot locations, the  evaluation team assigned risk levels based on the COs’ self-assessments of  A&A areas. For example, at various locations, the evaluation team  identified the following high-risk issues or weaknesses in A&A operations:    a mission lacked resources to monitor contractor performance, and the  CO could not ensure that contractor performance reports were prepared,  as required by USAID policy;    a regional structure was providing insufficient mentoring and oversight of  junior contract officers; and   a regional mission had experienced a sixfold workload increase in the past  3 years, despite resource constraints.

		Evaluation Division Has Not Implemented New Evaluation Mechanism

Although the Evaluation Division has developed the new scorecard  evaluation, it has yet to implement it. Approximately 40 percent of the  A&A staff who responded to our survey reported that there is insufficient  oversight to ensure the quality of the A&A process. According to  Evaluation Division staff, in fiscal year 2007 the division set a goal of  ensuring a scorecard review of all A&A operations in headquarters offices  and all of the approximately 80 missions within a 2-year period, and at  least one on-site visit of a mission in each of the five regions of the world.  However, agency officials informed us that the Evaluation Division  currently lacks the staff level and systems needed to implement the  scorecard evaluation to meet its goal. According to Evaluation Division  officials, the number of procurement analysts in the division has declined  from 12 in fiscal year 1992 to 4 in fiscal year 2008. However, according to  these officials, the division needs at least 8 procurement analysts to make  the appropriate number of on-site evaluation visits to missions per year. As  of August 2008, the Evaluation Division was authorized to hire 3 additional  procurement analysts. However, the division has not yet finalized plans for  full implementation of the scorecard evaluations based on this increase in  staff.
In addition, according to Evaluation Division staff, USAID headquarters  and missions lack an electronic A&A data system that would facilitate the  evaluation process. Currently, the Evaluation Division reviews the  available A&A documents provided by COs worldwide; while some A&A  units utilize an electronic filing system, A&A operations in many missions  continue to maintain hard-copy A&A documents. Evaluation Division staff  told us they would ideally be able to access a digital repository of A&A  documents remotely while reviewing COs’ completed scorecard  evaluations. Such access would allow the Evaluation Division staff to  review A&A documents in headquarters and reduce their need to conduct  on-site visits, thereby saving resources and time. As of July 2008, USAID  was analyzing information technology options for the OAA Evaluation  Division to achieve its needs, including the implementation of the Global  Acquisition and Assistance System (GLAAS), a new globally accessible  system intended to standardize and automate USAID’s management of  A&A instruments. However, GLAAS has not yet been implemented at all  missions, and the Evaluation Division continues to lack the technology to  access all A&A files electronically in order to conduct scorecard reviews  remotely.

	Conclusions

As USAID increasingly relies on nongovernmental organizations to  implement its activities, the agency’s responsibility to effectively manage  the implemented activities gains in importance. Critical to its success in  this area is its management of the A&A function. As the amount of its A&A  obligations and the number of A&A instruments continue to increase,  especially at overseas missions, USAID should work to ensure that the  appropriate number of staff with the requisite competencies and skills are  available to manage A&A operations. Despite a past USAID OIG  recommendation calling for USAID to develop an A&A workforce plan, the  agency has yet to analyze the relation of staffing patterns to existing  workload with the goal of better matching its staff to its workload.  Specifically, the agency currently lacks sufficiently reliable and up-to-date  data on its overseas A&A staff levels and comprehensive information on  the competencies of the A&A staff. With these data, which are key  elements of federal workforce planning models, USAID could better  identify its critical staffing needs and adjust its staffing patterns to meet  those needs.
A critical component of USAID’s oversight of its A&A operations is the  successful implementation of its new evaluation mechanism. The  mechanism is designed to ensure that A&A operations follow USAID  policies, primarily by assessing A&A operations that manage about $10  billion worldwide. Although the agency is in the process of hiring  additional staff for the division, much time has elapsed since USAID’s OIG  noted in 2006 that the division’s resource constraints hampered its ability  to conduct evaluations. Until USAID has the capacity to implement the  evaluation mechanism, the agency lacks the ability to ensure that potential  weaknesses in the A&A process are quickly identified and corrected.

	Recommendations for Executive Action

To improve the agency’s management and oversight of its A&A function,  we are recommending that the Administrator of USAID develop and  implement a strategic A&A workforce plan that matches resources to  priority needs, such as the evaluation of the A&A function. Specifically, we  recommend that the strategic A&A workforce plan includes a process to  collect, analyze, and maintain (1) sufficiently reliable and up-to-date data  on the agency's A&A staff levels and (2) comprehensive information on the  competencies of the A&A staff.

	Agency Comments and Our Evaluation

We requested and received comments on a draft of this report from  USAID.  These comments are reprinted in appendix III, along with our  responses to specific points.  USAID did not specifically comment on our  recommendations but acknowledged that it needs to rebuild core A&A  management capacity in key areas such as workforce planning and  evaluation in order to sustain effective management of A&A functions.   USAID noted several agencywide initiatives such as the development of a  new Human Capital Strategic Plan and Workforce Plan to address the  agency’s staffing requirements from 2009 to 2013, as well as a competency  management system and a Learning Management System to improve staff  competency information.  In addition, USAID stated that enhancements  must be made to the evaluation function that could strengthen the  oversight of its A&A function.  We acknowledge USAID’s agencywide  efforts to enhance workforce planning, but maintain that the agency  currently lacks sufficiently reliable staff-level data and comprehensive  competency information on its overseas A&A specialists, which are key  elements of a strategic workforce plan.  USAID also provided technical  comments, which we incorporated as appropriate.
We are sending copies of this report to interested congressional  committees and the Administrator of the U.S. Agency for International  Development. We will also make copies available to others on request. In  addition, the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-9601 or melitot@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 IV.

Appendix I: Scope and Methodology

To examine the United States Agency for International Development’s  (USAID) capacity to develop and implement a strategic acquisition and  assistance (A&A) workforce plan, we used GAO’s guidance on human  capital management and GAO’s Framework for Assessing the Acquisition  Function at Federal Agencies. We also reviewed prior assessments of  USAID’s workforce planning efforts by GAO and USAID’s Office of  Inspector General (OIG). To determine A&A staff levels, we analyzed and  compared staffing data that USAID’s Office of Acquisition and Assistance  (OAA) and the Office of Human Resources (OHR) made available to us.  We also interviewed OHR officials to determine the reliability of their data.  We obtained and analyzed data on the number of A&A instruments and the  obligated amounts of A&A instruments for fiscal years 2002 through 2007.  We assessed the reliability of these data by reviewing information about  the data and the system that produced them and by interviewing agency  officials knowledgeable about the data. We found USAID’s data  sufficiently reliable for representing the A&A obligations and instruments.  To report on USAID’s efforts in A&A workforce planning, we reviewed  agency documents and interviewed agency officials, as well as evaluated  these efforts according to key principles for strategic workforce planning  identified in our prior work.
To examine the extent to which USAID has implemented a mechanism to  evaluate its A&A function, we analyzed USAID documents and interviewed  relevant USAID agency officials. Documents we examined include the  President’s 1995 Executive Order on Federal Procurement Reform,  applicable agency policies and directives, a past OIG report that audited  USAID’s A&A evaluation program, and documents related to the Global  Acquisition and Assistance System (GLAAS). We also analyzed past A&A  evaluation reports, documents pertaining to the scorecard evaluation  methodology, as well as the scorecard evaluations and on-site evaluation  reports conducted for the piloted locations. In addition, we met with  USAID officials in Washington, D.C., to discuss the A&A evaluation  mechanism.
To assess the A&A function overseas, we conducted fieldwork in the  following seven countries: Cambodia, Indonesia, Kazakhstan, the Kyrgyz  Republic, Mali, Peru, and Thailand. We selected these countries to obtain  geographic diversity and ensure representation of various A&A processes  and organizational structures for the A&A function. In all of these  countries, we met with USAID officials. In some of these countries, we  also met with representatives of nongovernmental organizations (NGO)  that implement A&A activities for USAID under A&A instruments.  Although the findings from our fieldwork in each country are not  generalizable to the population of USAID A&A activities, we determined  that the selection of the countries and activities reviewed was appropriate  for our design and objectives.
To obtain views from USAID staff with key A&A responsibilities, we also  conducted a survey of USAID’s A&A staff between October 2007 and June  2008. The survey was sent to all USAID contracting officers (CO) in  headquarters and missions, as well as all A&A specialists in headquarters.  The survey contained questions related to work experience, staffing,  workload, and the administration of acquisition and assistance  instruments. We pretested the survey with three COs.
Our survey of A&A staff received a 95 percent response rate—150  responded out of 158 surveyed. We compared the responding A&A staff  with the nonresponding A&A staff and found no significant differences  between the two groups on several variables. Based on this analysis and  the 95 percent response rate, we assumed that the nonrespondents were  missing at random and generated statistical estimates of the population of  A&A staff from the 95 percent of respondents. Given the high response  rate and no indications of nonresponse bias, we considered estimates from  this survey to be generalizable to the population surveyed. Because we  treated our respondents as a random sample of A&A staff, our results are  estimates of the population and thus are subject to sampling errors that  are associated with samples of this size and type. Our confidence in the  precision of the results from this sample is expressed in 95 percent  confidence intervals, which are expected to include the actual results in 95  percent of the samples of this type. All percentage estimates in this report  have a margin of error of no more than plus or minus 3 percent.
We conducted this performance audit from February 2007 through  September 2008 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

Appendix II: Overseas Locations with Authorized USAID Contracting Officer Presence as of July 2008

According to USAID’s Office of Acquisition and Assistance (OAA), the  following bilateral and regional missions were authorized to have at least  one on-site contracting officer (CO) present as of July 2008. These  missions do not include locations with on-site acquisition and assistance  specialists who work with a remotely located CO. Countries are grouped  by regions, as determined by OAA.

Appendix III: Comments from the U.S. Agency for International Development

The following are GAO’s comments on the U.S. Agency for International  Development’s letter dated September 16, 2008.

	GAO Comments

1.  USAID noted that our final reporting objectives differed from the  original objectives we provided to the agency when we commenced  our review in early 2007.  In its comments, the agency misinterpreted  our reporting only on certain aspects of the A&A function as an  indication that other aspects of the A&A function are largely in sound  condition.  During the course of GAO engagements, the final reporting  objectives and the scope of the review are sometimes refined based  upon information obtained during the planning and design phase.  For  example, we did not report on the proper organizational alignment of  USAID’s A&A function because USAID officials were unable to  adequately demonstrate significant impediments as a result of its  placement within USAID’s Management Bureau.  2.  USAID stated that the agency does not possess the authority to simply  transfer locally engaged staff to other missions to meet the demands of  missions with greater workloads.  It also noted that overseas programs  and funding fluctuate and mission management can be hesitant to  make abrupt hiring or staff reduction decisions in the short term.  We  recognize that mission management determines how to allocate  resources within missions and some of the staffing decisions  pertaining to overseas A&A specialists are made outside of OAA.  Our  report emphasized that key elements of an agency’s strategic  workforce plan include determining the critical skills and  competencies of its staff, addressing gaps in staff numbers and  deployment, and aligning human capital approaches regardless of  location.  A past OIG report also recommended the development of an  A&A workforce plan that includes a mechanism for collecting and  analyzing A&A data to allow managers to compare current staffing  patterns to developing trends, match staff to workloads, and adjust  quickly when unbalanced workloads develop.  We maintain that  without accurately identifying the number of overseas A&A staff, the  agency can neither determine the appropriate levels of staff with  requisite competencies to manage missions’ A&A workloads, nor  explore ways of making necessary adjustments to gaps in mission A&A  staff levels and competencies as well as imbalances in workloads.  3.  USAID commented that when requested by missions, OAA provides  routine assistance such as temporary duty staff for end-of-fiscal-year  surges.  In our report, we cite several instances of USAID not  addressing staffing imbalances at its overseas missions.  We maintain  that OAA’s approach of providing temporary assistance is not a  substitute for strategic workforce planning that includes key elements  such as reliable and up-to-date data on the number and competencies  of its overseas A&A workforce.  Without this information, USAID  cannot systematically address its critical staffing needs and adjust its  staffing patterns to meet those needs.   4.  USAID commented that it had already begun to enhance the evaluation  function by establishing the Contract Review Board, which reviews all  procurements of $10 million or more at the solicitation, competitive  range, and award stages.  Although we agree that this mechanism is an  important oversight mechanism during the early phases of the A&A  process, our review focused on the oversight of the A&A function at  the administration stage, which commences after the awarding of the  A&A instrument and entails USAID’s monitoring of contractor  performance for the A&A instruments.

Appendix IV: GAO Contact and Staff Acknowledgments

	Staff Acknowledgments

In addition to the contact named above, Zina Merritt (Assistant Director),  James Ashley, Debbie Chung, Mark Dowling, Joel Grossman, Tracy  Guerrero, Clarette Kim, John Krump, Victoria Lin, James Strus, and  William Woods made key contributions to this report.

Output:
Why GAO Did This Study

The U.S. Agency for International Development (USAID) over the years has shifted from conducting its own activities to managing acquisition and assistance (A&A) instruments--contracts, grants, and cooperative agreements--awarded to and implemented by mainly nongovernmental entities. For fiscal years 2002 through 2007, USAID's A&A obligations doubled from about $5 billion to $10 billion. A&A staff--contracting officers (CO) and A&A specialists--are primarily responsible for managing A&A instruments. GAO was asked to examine (1) USAID's capacity to develop and implement a strategic A&A workforce plan and (2) the extent to which USAID has implemented a mechanism to evaluate its A&A function. GAO analyzed USAID documents and data, interviewed officials, visited missions in seven countries, and administered a survey to A&A staff.

What GAO Found

USAID lacks the capacity to develop and implement a strategic A&A workforce plan because it is missing two key elements: (1) sufficiently reliable and up-to-date data on its overseas A&A staff levels and (2) comprehensive information on the competencies of its overseas A&A staff. Data on the number of overseas A&A specialists collected by two USAID offices--the Office of Acquisition and Assistance (OAA) and the Office of Human Resources (OHR)--are unreliable or out of date. GAO found significant discrepancies between these offices' data sets, and officials acknowledged that their A&A staff level data are neither reliable nor up-to-date. In addition, USAID has not collected comprehensive competency information on its overseas A&A specialists. GAO's model of strategic human capital planning notes the importance of these data in developing a strategic A&A workforce plan that could enable the agency to better match staff levels to changing workloads. At the missions GAO visited, GAO found that the numbers and competencies of A&A staff did not match A&A workloads. The number of A&A staff with the necessary competencies was less than adequate at some missions, while at others it was more than adequate, according to agency officials. For example, officials at the mission in Mali said they have delayed time-sensitive projects because key A&A staff were not available when needed to approve contracts, while officials at the mission in Indonesia said the current number of A&A staff may be more than adequate. Most of the A&A survey respondents overseas also reported difficulty in altering staffing patterns to meet A&A workload demands. Although USAID has made some efforts to address its A&A workforce issues, these efforts do not constitute a strategic A&A workforce plan that takes into account the entire A&A workforce. Without accurate and reliable A&A staff data, USAID does not have adequate information to address current workload imbalances. USAID has not implemented an evaluation mechanism to provide oversight of its A&A function. OAA's Evaluation Division is responsible for providing oversight to ensure that A&A operations follow USAID policies, primarily by assessing the agency's A&A operations worldwide. However, for fiscal years 2003 through 2005, it conducted on-site evaluations at only 9 of its targeted 85 missions. In fiscal year 2007, the Evaluation Division developed a new evaluation mechanism that is expected to use scorecard evaluations, in which COs self-assess their A&A operations, and a risk-based approach to determine locations for further on-site visits. The division has completed piloting these scorecard evaluations at four missions and identified weaknesses in A&A operations. For example, the division found that 1 mission lacked resources to adequately monitor contractor performance. The division's goal is to implement this evaluation mechanism, including on-site visits to at least 5 missions, within 2 years. However, agency officials informed GAO that the Evaluation Division currently does not have the staff level needed to fully implement this evaluation mechanism. Without implementing the evaluation mechanism, USAID cannot certify the overall adequacy and effectiveness of management controls for the A&A function.