According to  the statement, State/F’s mission, on behalf of the Secretary of State and  the DFA, is to    provide leadership, coordination, and strategic direction within the U.S.  government and with external stakeholders to enhance foreign assistance  effectiveness and integrate foreign assistance planning and resource  management across State and USAID;  lead strategic, operational, and performance planning of U.S. foreign  assistance with a focus on aligning resources with policy priorities;    develop and defend foreign assistance budget requests and allocate State  and USAID foreign assistance funding to meet urgent needs and new  opportunities and to ensure long-term sustainable investments; and    promote good stewardship of foreign assistance funds by strengthening  oversight, accountability, and transparency. State/F Developed Consolidated State-USAID Foreign Assistance Planning and Budgeting Processes

State/F developed a program configuration, known as the Standardized  Program Structure and Definitions (standardized program structure), to  provide a consistent way to categorize and account for State-USAID  foreign assistance. State/F also began developing annual operational plans,  performance plans and performance report based on the standardized  program structure, to strengthen the link between foreign assistance  funding, activities, and results. Moreover, State/F implemented a consolidated budget process for State  and USAID foreign assistance programs, beginning with the fiscal year  2008 budget request. State/F’s operational plan guidance requires State  and USAID staff to describe how the programs of all other U.S.  government agencies in the country are helping address, at the program  area level, the goals in State/F’s foreign assistance framework. State/F Lacks Implementation Time Frames for Comprehensive Foreign Assistance Reforms and Developing a Foreign Assistance Strategy and Country- Specific Strategies

Although State/F has established time frames for certain key elements of  foreign assistance reform, it has not established time frames for  developing and implementing a comprehensive, integrated U.S. foreign  assistance strategy covering all agencies involved in delivering U.S. foreign  assistance, or for developing guidance for foreign assistance delivered  through other U.S. government entities. In addition, because it has not completed the pilot phase for the  5-year CAS, State/F has not yet developed time frames for fully  implementing the CAS. As a result, senior management may lack the holistic overview of  foreign assistance resources needed to make informed decisions about  trade-offs among various priorities. First, the CAS may not adequately replace USAID’s country  strategies, as State/F initially planned. State/F Faces Challenges in Workforce Management Issues

Although State/F has taken some steps to establish a workforce and  organizational structure, including beginning to define the roles and  responsibilities of its employees, our work and an October 2008 State/F  internal management review found that State/F faces key challenges in  managing its workforce. For example, the State/F internal management  review found that (1) State/F had not yet clearly defined the roles of some  of its employees and organizational units and (2) State/F had not ensured  that its employees have the skills and competencies needed to manage  foreign assistance programs. During our work, some State and USAID officials in  Washington, D.C., and in the field echoed these concerns. In  addition, State/F has not developed a long-term workforce management  plan to periodically reassess its workforce capacity to carry out assigned  responsibilities, such as supporting and managing the consolidated  budget, planning, and reporting processes for State and USAID foreign  assistance programs. If the administration decides to continue foreign assistance reform efforts  consistent with the State/F reforms announced in January 2006, we  recommend that the Secretary direct the DFA to    establish a time frame for fully implementing all aspects of these reforms  as well as benchmarks and goals to measure progress and define success;    establish a time frame for developing and implementing multiyear,  country-specific, foreign assistance strategies in all countries where U.S.  departments, agencies, or organizations provide assistance;    ensure that State/F’s communication strategy encourages substantive,  timely, two-way information exchanges between State/F and USAID and  State employees;    consider an operational plan structure that clearly portrays and accurately  captures the functions and activities of regional programs and activities; and    develop a long-term workforce management plan to periodically assess  State/F’s workforce capacity to manage foreign assistance. Appendix I: Scope and Methodology

The objectives of this study were to (1) examine key actions that the  Office of the Director of Foreign Assistance (State/F) has taken to reform  foreign assistance by consolidating the foreign assistance operations of  the Department of State (State) and the U.S. Agency for International  Development (USAID) and (2) identify any key challenges that affect  State/F’s implementation of these reforms. USAID missions in three of the six countries— Kenya, Peru, and Ukraine—are also responsible for managing regional  programs or programs in neighboring countries.
Why GAO Did This Study

In January 2006, to better align foreign assistance programs with U.S. foreign policy goals, the Secretary of State appointed the Administrator of the U.S. Agency for International Development (USAID) to serve concurrently as Director of Foreign Assistance (DFA) and gave the DFA authority over all Department of State and USAID foreign assistance funding and programs. The Office of the Director of Foreign Assistance (State/F) was given responsibility for reforming foreign assistance by, among other things, consolidating State and USAID foreign assistance processes. GAO was asked to (1) examine State/F's key efforts to consolidate State and USAID foreign assistance processes and (2) identify any key challenges that affect State/F's reform of foreign assistance. GAO evaluated budget, planning, and other documents and interviewed agency officials in Washington, D.C.; Ethiopia; Haiti; Jordan; Kenya; Peru; and Ukraine.

What GAO Found

Since June 2006, in its efforts to consolidate State and USAID foreign assistance processes, State/F has implemented certain key practices that are characteristic of successful organizational transformations--for example, developing a mission statement and involving employees. In addition, State/F has taken several steps to consolidate State and USAID planning and budgeting processes--for example, instituting common program definitions for the use of foreign assistance funds to collect, track, and report on data related to program funding and results. State/F also began developing annual operational plans, based on the common program definitions, to serve as annual expenditure plans, performance plans, and performance reports for State and USAID foreign assistance projects worldwide and to provide descriptive information about other U.S. government agencies' foreign assistance programs. Moreover, State/F initiated a pilot program for developing a 5-year country assistance strategy (CAS) intended to provide a comprehensive view of all U.S. foreign assistance activities in every country in which U.S. resources are targeted. Further, beginning with fiscal year 2008, State/F implemented a joint State-USAID foreign assistance budget process to bring needed coherence of program activities and accountability for resources. Finally, State/F established an integrated State-USAID workforce to direct the consolidation of State and USAID foreign assistance operations. Despite this progress, State/F faces challenges that could constrain its efforts to reform foreign assistance. For example, State/F lacks time frames for developing a comprehensive U.S. foreign assistance strategy--one of its assigned responsibilities--and fully implementing the 5-year CAS. As a result, State/F has limited capacity to demonstrate progress in these key reform efforts. State/F also lacks a clear, consistent strategy for communicating with USAID and State employees about its efforts, leading to confusion among staff and hindering management-staff relations; although State/F has devised an initial plan to address this challenge, it has not yet carried out this plan. In addition, State/F's operational plans do not adequately describe some of USAID's regional foreign assistance activities, and consequently senior management may lack a holistic overview of foreign assistance resources needed to make informed trade-offs among various priorities. Further, the goals and measures in State/F's country operational plans sometimes do not align with those of other agencies providing foreign assistance in the country, limiting State/F's assurance that all U.S. foreign assistance funds in the country are strategically tied to broader U.S. foreign policy goals in the country. Finally, both a 2008 State/F internal review and GAO found that State/F had not yet clearly defined the roles of some of its employees and organizational units and had not matched all employees' skills with their positions. State/F has taken initial steps in response to the internal report's findings, including defining the roles and responsibilities of various executive and managerial positions and organizational units, but has not yet done so for all State/F staff, and has not developed a long-term workforce management plan to address workforce planning challenges.