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Performance and Accountability Series:



January 2003:



Major Management Challenges and Program Risks:



U.S. Agency for International Development:



GAO-03-111:



A Glance at the Agency Covered in This Report



The U.S. Agency for International Development (USAID), an independent 

federal government agency, is charged with implementing foreign 

economic and humanitarian assistance programs.  USAID manages a 

budget of about $7.5 billion annually and advances U.S. foreign 

policy objectives through three programmatic areas:



* economic growth, agriculture, and trade;

* global health, including HIV/AIDS and other infectious diseases; and

* democracy, conflict prevention, and humanitarian assistance.  



The agency works with a wide array of public and private partners to 

implement its programs.  USAID operates in more than 100 countries, 

with resident staff in approximately 75 countries in four regions of 

the world:  sub-Saharan Africa, Asia and the Near East, Latin America 

and the Caribbean, and Europe and Eurasia.  Its staff often operate 

in difficult environments and under evolving program demands.  



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[End of figure]



This Series:

This report is part of a special GAO series, first issued in 1999 and 

updated in 2001, entitled the Performance and Accountability Series:  

Major Management Challenges and Program Risks.  The 2003 Performance 

and Accountability Series contains separate reports covering each 

cabinet 

department, most major independent agencies, and the U.S. Postal 

Service.  

The series also includes a governmentwide perspective on transforming 

the 

way the government does business in order to meet 21st century 

challenges 

and address long-term fiscal needs.  The companion 2003 High-Risk 

Update 

identifies areas at high risk due to either their greater 

vulnerabilities 

to waste, fraud, abuse, and mismanagement or major challenges 

associated 

with their economy, efficiency, or effectiveness.  A list of 

all of the 

reports in this series is included at the end of this report.



[End of section]



GAO Highlights:



Highlights of GAO-03-111, a report to Congress included as part 

of GAOís 

Performance and Accountability Series



Why GAO Did This Report:



In its 2001 performance and accountability report on the U.S. 

Agency for 

International Development (USAID), GAO identified important 

management 

issues facing the agency.  The information GAO presents in this 

report 

is intended to help sustain congressional and agency attention 

on 

continuing to make progress in addressing these challenges and 

ultimately 

overcoming them.  This report is part of a special series of 

reports on 

governmentwide and agency-specific issues.



What GAO Found:



USAID faces a number of performance and accountability 

challenges that 

affect its ability to implement its foreign economic and 

humanitarian 

assistance programs.  USAID has recognized that it needs to 

address these 

problems and has made some progress, but further action is 

needed as 

follows:  



* Since the early 1990s, GAO has reported that USAID has made 

limited 

progress in addressing its human capital management challenges. 

Some 

progress has been made, such as implementing annual foreign 

service 

recruitment plans.  However, the agency has not established 

and integrated 

a comprehensive workforce plan with its strategic goals and 

objectives.  

Developing such a plan is critical due to a reduction in the 

agencyís 

workforce during the 1990s.  



* USAID faces difficulties in identifying and collecting data 

that would 

enable it to develop reliable performance measures and 

accurately report 

the results of its programs.  USAID has taken several steps 

to try to 

overcome these difficulties, such as holding training seminars 

in field 

missions.  However, although USAID has made a serious effort to 

develop 

improved performance measures, it continues to report numerical 

outputs 

that do not measure the impact of its programs. 



* USAIDís ability to become a high-performing organization is 

also 

affected by its information technology and financial 

management 

challenges.  USAID has recognized these challenges and has 

demonstrated 

a commitment to address them, such as establishing a 

structure for the 

acquisition information technology and improving its computer 

security 

deficiencies.  However, USAIDís agency managers continue to 

lack 

complete, reliable, and timely information needed to make 

sound, 

cost-effective decisions.  In addition, the agency has had 

long-standing 

financial management weaknesses and has been unable to 

provide its 

managers with reliable financial information.





What Remains to Be Done:



GAO believes that USAID should:

* complete a workforce strategy for its civil service 

employees and align 

its staff to systematically support the agencyís mission, 

goals, and 

objectives;



* improve its ability to develop reliable performance 

measures that 

accurately report program outcomes; and



* make further improvements in its information 

technology systems, 

and ensure that its financial management systems 

comply with federal 

requirements. 



www.gao.gov/cgi-bin/getrpt?GAO-03-111.



To view the full report, click on the link above.

For more information, contact Jess T. Ford, Director, 

International 

Affairs and Trade, at (202) 512-4268 or fordJ@gao.gov.



Transmittal Letter:



Major Performance and Accountability Challenges:



GAO Contacts:



Related GAO Products:



Performance and Accountability and High-Risk Series:



This is a work of the U.S. Government and is not 

subject to copyright 

protection in the United States. It may be reproduced 

and distributed 

in its entirety without further permission from GAO.

It may contain 

copyrighted graphics, images or other materials. 

Permission from the 

copyright holder may be necessary should you wish 

to reproduce 

copyrighted materials separately from GAOís 

product.



Transmittal Letter January 2003:



The President of the Senate

The Speaker of the House of Representatives:



This report addresses the major management challenges and program risks 

facing the U.S. Agency for International Development (USAID) as it 

works to carry out its foreign economic and humanitarian assistance 

programs. The report discusses the actions that USAID has taken and 

that are under way to address the challenges GAO identified in its 

Performance and Accountability Series 2 years ago, and major events 

that have occurred that significantly influence the environment in 

which the agency carries out its mission. Also, GAO summarizes the 

challenges that remain and further actions that GAO believes are 

needed.



This analysis should help the new Congress and the administration carry 

out their responsibilities and improve government for the benefit of 

the American people. For additional information about this report, 

please contact Jess T. Ford, Director, International Affairs and Trade, 

at (202) 512-4268 or fordj@gao.gov.



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[End of figure]



David M. Walker

Comptroller General 

of the United States:



Signed by David M. Walker



[End of section]



Major Performance and Accountability Challenges:



In our January 2001 management challenges report, we reported that the 

U.S. Agency for International Development (USAID) faced a number of 

performance and accountability issues that affected the efficiency and 

effectiveness of its programs.[Footnote 1] We reported that USAIDís 

human capital challenges affected its ability to effectively carry out 

its foreign assistance mission. In addition, we noted that USAID faced 

difficulties in identifying and collecting data that would enable it to 

develop reliable performance measures and accurately report the results 

of its programs. We also reported that USAID had not implemented an 

integrated information management system or improved its financial 

management systems to ensure that it has adequate internal controls.



Since our 2001 report, USAID has continued to take the following steps 

to address these issues:



* USAID developed a workforce analysis in June 2001 that highlighted 

several human capital challenges facing the agency, including the 

agencyís aging workforce and the resulting expected high rate of 

attrition due to retirement. The workforce analysis was submitted to 

the Office of Management and Budget as the first step in implementing 

the Presidentís initiative for agencies to restructure their 

workforces. Although some improvements have been made, workforce 

planning is not yet integrated into USAIDís strategic plans.



* USAID has taken several steps to try to overcome its difficulties in 

developing reliable performance measures that accurately report program 

outcomes. For example, the agency is holding training seminars in field 

missions and has reported that more than 1,200 people have been trained 

either in programming or in performance management. However, USAID 

continues to have problems with the timeliness and reliability of 

performance measures.



* USAIDís ability to become a high-performing organization continues to 

be affected by challenges in information technology and financial 

management. The agency has recognized that it needs to address its 

problems and has made some progress, but further action is needed. 

USAIDís information technology systems do not provide managers with 

accurate information, its processes for procurement of information 

technology have not followed established guidelines, and its computer 

systems need better security controls. Until USAID can fully resolve 

its information technology issues, it will not be able to routinely 

provide agency managers with the complete, reliable, and timely 

information they need to make sound, cost-effective decisions. In 

addition, USAID needs to continue to make improvements to ensure that 

its financial systems comply with federal requirements and that the 

systems provide reliable financial information.



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Better Manage Human Capital:



Since the early 1990s, we have reported that USAID has made limited 

progress in addressing its human capital management issues. In 2001, we 

reported that these issues could affect its ability to deliver 

assistance efficiently, specifically in postemergency humanitarian 

situations. A major concern is USAIDís inability to establish and 

integrate a comprehensive workforce plan with its strategic goals and 

objectives. Developing such a plan is critical due to a reduction in 

the agencyís workforce during the 1990s and an expected high continuing 

attrition. For example, as of September 30, 2002, 31 percent of USAIDís 

civil service workforce and 54 percent of its U.S. foreign service 

employees were eligible to retire immediately or by September 30, 2007. 

USAID has acknowledged that workforce planning remains a challenge for 

the agency, especially since downsizing and budgetary constraints 

during the 1990s took precedence over strategic workforce planning.



Lack of Comprehensive Workforce Plan Affects USAIDís Human Capital 

Management:



USAID has not integrated a comprehensive workforce plan with its 

strategic goals and objectives. As its U.S. direct-hire staff levels 

have declined, USAID has had to evolve from an agency that directly 

implements projects to one that plans and monitors them. Mission 

directors have become increasingly reliant on other types of employees, 

such as personal service contractors, to manage mission projects 

implemented by third parties. For example, as of September 2002, 

foreign personal service contractors made up approximately 60 percent 

of USAIDís workforce and U.S. direct hires made up about 26 percent of 

its workforce.[Footnote 2] (See fig. 1.) USAIDís workforce includes 

several other employment categories, such as U.S. personal service 

contractors and foreign national direct hires.



Figure 1: USAID Workforce Profile, as of September 2002:



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[End of figure]



Notes:



ďOtherĒ includes fellows and those employed under participating agency 

service agreements and resource support service agreements.



This figure excludes the Office of the Inspector General.



Also, as figure 2 shows, USAID has had to adapt to a significant 

decrease in the number of its U.S. direct-hire employees over the past 

12 years while continuing to take on new responsibilities. For example, 

as funding levels remained relatively stable, the number of U.S. direct 

hires decreased from 3,262 in fiscal year 1990 to 1,947 in fiscal year 

2000. In fiscal year 2001, the agency saw its first increase in U.S. 

direct hires in more than a decade, and current employment of U.S. 

direct hires is close to the agencyís target level of approximately 

2,000. In addition, USAID reported that employment targets for fiscal 

year 2002 were not met because of a late start in recruiting, a lack of 

medical or security clearances for new hires, and insufficient 

qualified candidates.



Figure 2: USAID U.S. Direct-Hire Workforce Trends, Fiscal Years 1990 

through 2002, and Program Funding Levels, Fiscal Years 1990 through 

2002:



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[End of figure]



Notes:



Workforce data exclude the Office of the Inspector General.



Program funding information is in constant fiscal year 2002 dollars.



Program funding includes money appropriated to the U.S. Department of 

Agriculture for Title II, and Title III food programs administered by 

USAID. Fiscal year 1990 also includes Title I funding, but after 

January 1, 1991, the funds were administered by the U.S. Department of 

Agriculture.



Program funding also includes supplementals.



Program funding does not include operating expenses and is not adjusted 

for deobligations/reobligations, rescissions, transfers, or 

miscellaneous trust funds.



Developing a comprehensive workforce plan is critical for USAID given 

the reductions in personnel during the 1990s and the high number of 

employees eligible to retire. According to the Inspector General, the 

steady decline in the number of foreign service and civil service 

employees with specialized technical expertise resulted in an 

insufficient number of personnel with needed skills and 

experience.[Footnote 3] Further, the Inspector General also reported 

that less experienced personnel are managing increasingly complex 

overseas programs. In addition, these issues affect USAIDís ability to 

effectively carry out its programs. For example, we reported in July 

2002 that insufficient numbers of contract officers initially affected 

USAIDís ability to deliver reconstruction assistance in Central America 

and the Caribbean.[Footnote 4]



Corrective Actions Under Way:



Recognizing these problems, USAID started implementing annual foreign 

service recruitment plans that enable the agency to replace the number 

of employees who are departing through attrition or retirement. In June 

2001, USAID also submitted to the Office of Management and Budget a 

workforce analysis that addressed issues such as the agencyís aging 

workforce and the expected high rate of attrition due to retirement. In 

addition, the agency began hiring junior foreign service officers and 

recruiting civil service professionals in key skill areas, such as 

information technology, financial management, and contracting. USAID 

also increased external training for senior managers and developed 

internal training programs in leadership, operations management, 

supervisory skills, and performance management.



USAID is addressing its lack of flexibility in reassigning staff and 

hiring personal service contractors in postemergency situations. In 

mid-2000, USAIDís Bureau for Latin America and the Caribbean drafted a 

ďlessons learnedĒ analysis of the disaster recovery programís start-up 

and offered recommendations for changes needed for a similar response 

in the future. The USAID Administrator subsequently formed the 

Emergency Response Council to conduct an agencywide review of its 

experiences with international emergencies. In December 2001, the 

council proposed several program and procedural reforms to provide more 

flexibility in planning and implementing activities in postcrisis or 

postemergency situations. In May 2002, the USAID Administrator approved 

the councilís recommendations in the areas of strategic planning and 

programming, funding alternatives, and staffing.



To overcome staffing constraints in postemergency situations, a USAID 

working group identified several existing mechanisms that could make 

human resources more readily available for design, implementation, and 

oversight. For example, in June 2002, USAID reported that the working 

group identified two existing contracting mechanisms for procuring 

short-term services and staff. In addition, to facilitate the 

availability of USAID staff for reconstruction activities, the agency 

has contracted with a firm to establish a skills database of all agency 

personnel that would be available on short notice for deployment to the 

field.



USAID has taken several steps to improve its human capital management, 

but according to the Office of Management and Budget, much remains to 

be done. For example, the agency has to complete a workforce strategy 

for its civil service employees and align its staff to systematically 

support the agencyís mission, goals, and objectives. To help assist 

USAID with its human capital concerns, the Inspector General is 

conducting audits of the agencyís human capital management. In 

addition, we are currently conducting a comprehensive review of USAIDís 

workforce planning and management.



Develop Better Performance Data to Assess Its Programs:



USAID continues to face difficulties in identifying and collecting the 

data that will enable it to develop reliable performance measures and 

accurately report the results of its programs. Our work, and that of 

the USAID Inspector General, has identified a number of problems with 

the annual results data that USAIDís operating units have been 

reporting. USAID has acknowledged these concerns and has undertaken 

several initiatives to correct them. Although USAID has made a serious 

effort to develop improved performance measures, it continues to report 

numerical outputs that do not measure the impact of its programs.



The Government Performance and Results Act of 1993[Footnote 5] requires 

federal agencies to prepare performance plans that set program goals, 

measure program performance against those goals, and report on 

programsí progress. In 1995, USAID developed a performance reporting 

system that monitored the progress of a program, process, or activity 

toward its objective over time. USAIDís performance monitoring system 

required managers to (1) establish performance indicators, (2) prepare 

performance monitoring plans, (3) set performance baselines, (4) 

collect performance data, and (5) periodically assess data quality. As 

reported by the Inspector General in April 2002, however, USAID 

continues to struggle to develop performance measurement and reporting 

systems that meet internal and external reporting 

requirements.[Footnote 6]



Recent Inspector General reports have noted inadequacies in the quality 

of the data reported as well as areas for improvement in the 

performance monitoring plans of individual operating units. For 

example, a 2001 Inspector General report concluded that all seven of 

the units audited needed to improve their performance monitoring plans; 

in one case, a unitís plan had not been updated since 1995.[Footnote 7] 

In addition, USAIDís data for performance management reports are not 

current, covering the previous year rather than the year under review. 

For example, in reviewing USAIDís fiscal 2001 consolidated financial 

statements, the Inspector General reported that program results related 

to years prior to fiscal 2001, not to fiscal year 2001 itself. 

Although, the reported results were based on the operating unitsí self-

assessments of programs meeting certain strategic objectives, USAID did 

not disclose which or how many strategic objectives were not reported 

or assessed.



Without accurate and reliable performance data, USAID has little 

assurance that its programs achieve their program objectives and 

related targets. In July 1999, we commented on USAIDís fiscal year 2000 

performance plan and noted that because USAID is dependent on 

international organizations and thousands of partner institutions for 

data, it does not have full control over how data are collected, 

reported, or verified. Further, in April 2002, we reported that USAID 

had conducted few evaluations of its experience in using various 

funding mechanisms and types of organizations to achieve its objectives 

around the world.[Footnote 8] Some of the essential information that 

USAID would need to conduct such evaluations, such as data on the types 

of implementing organizations, funding mechanisms, and objectives in 

its various program areas and bureaus, is not complete or sufficiently 

detailed. We concluded that with better data on these aspects of the 

agencyís operations, USAID managers and congressional overseers would 

be better equipped to analyze whether USAIDís mix of approaches takes 

full advantage of nongovernmental organizations to achieve the agencyís 

objectives.



For some activities, developing performance indicators and assessing 

results are inherently difficult. According to the Office of Management 

and Budget, numerical output does not indicate the quality of the 

program, and USAID needs to improve its ability to use this information 

for decision-making. In 2001, we reported that, historically, USAID has 

not spent much effort on assessing the results of its democracy and 

governance programs, including its subsectors, such as rule of law 

programs.[Footnote 9] For example, in April 2001, we reported that the 

results of USAIDís rule of law projects in the new independent states 

of the former Soviet Union were not always apparent.[Footnote 10] Most 

of the USAID projects we reviewed were reported in terms of project 

outputs instead of results and sustainability. For 6 of the 11 major 

projects we reviewed in Russia and Ukraine, available documentation 

indicated that implementers reported project results almost exclusively 

in terms of outputs. These outputs included the number of USAID-

sponsored conferences or training courses held, the number and types of 

publications produced with project funding, or the amount of computer 

and other equipment provided to courts. Short-term measures and 

indicators alone do not enable USAID to monitor and evaluate the 

sustainability and overall impact of the projects.



Corrective Actions Under Way:



USAID has taken a number of steps to correct the problems with its 

reporting of performance results. In fiscal 2000, USAID revised its 

automated directives system by rewriting policy guidance on strategic 

planning, program implementation, and performance management and 

reporting. In June 2000, we reported that USAID had made progress in 

establishing outcome-oriented goals and developing indicators and 

targets that help measure overall results.[Footnote 11] In January 

2001, we reported that USAIDís corrective actions included (1) 

developing and disseminating lists of indicators that can be used by 

its overseas offices seeking appropriate tools to measure performance, 

(2) sending annual reporting guidance cables to operating units on the 

types of data needed and the documentation required, (3) expanding the 

publication of supplementary guidance to missions on managing data for 

maximum quality and utility, and (4) holding training seminars for 

field officers on managing for results. USAID continues to implement 

these solutions. For example, USAID reported that in fiscal year 2001, 

750 personnel were trained in the overview course on USAID programming 

policies and nearly 500 had received performance management training.



The Office of Management and Budget also reported in fiscal year 2002 

that USAID made progress in developing a systematic approach to 

performance measurement; however, challenges remain. The structure, 

included in the agencyís annual performance plan, includes agency-level 

indicators of general performance, such as increased economic growth, 

reduced rates of HIV/AIDS, free and fair elections, and lower mortality 

rates in disasters. In addition to monitoring performance related to 

these higher level outcomes, USAID missions track ďintermediate 

resultsĒ that are more directly linked to its programs. Examples 

include the number of small businesses receiving USAID-supported loans 

or the number of people receiving emergency food relief. However, these 

numerical outputs do not measure how well a program functions.



In 2001, USAIDís Bureau for Policy and Program Coordination worked 

closely with the Office of the Inspector General to develop an 

appropriate performance management audit methodology for providing 

guidance on needed improvements. However, USAID continues to struggle 

with developing performance measurements and accurately reporting the 

results of its programs. For example, in fiscal years 2001 and 2002, 

the Inspector General conducted eight performance audits of selected 

HIV/AIDS programs and in all instances found weaknesses at the mission 

level.



Address Additional Challenges to Building a High-Performing 

Organization:



USAID faces other agencywide challenges that hamper its ability to 

become a high-performing organization. These challenges are to (1) 

improve its information technology systems and (2) provide managers 

with reliable financial information. USAID has recognized these 

challenges and has demonstrated a commitment to address them.



Enhance Information Technology Systems:



USAIDís information systems do not provide managers with the accurate 

information they need to make sound and cost-effective decisions. The 

USAID Inspector General has reported that its processes for procuring 

information technology have not followed established guidelines, which 

require executive agencies to implement a process that maximizes the 

value and assesses the risks of information technology investments. In 

addition, USAIDís computer systems are vulnerable and need better 

security controls. USAID management has acknowledged these weaknesses 

and the agency is making efforts to correct them.



The information systems at USAID do not fully support its planning and 

reporting requirements. According to the Inspector General, USAID 

managers have had difficulty in consistently obtaining timely, 

reliable, and complete financial and performance data. In 2001, we 

reported that USAID did not have an integrated information management 

system to effectively manage its programs.[Footnote 12] To correct this 

weakness, the agency has deployed a new financial management and 

accounting system at its headquarters. However, the Inspector General 

reported that system users were not always able to readily obtain data 

to manage operations because USAID focused its limited resources 

primarily on implementation and operations rather than on reporting. To 

address this concern, the agency has begun to implement a user-friendly 

reporting tool and plans to focus more on reporting.



According to the Inspector General, USAIDís processes for procuring 

information technology have not followed established federal 

guidelines.[Footnote 13] In addition, in 2001, we reported that USAID 

did not have a process for prioritizing information technology 

investments. Without such a process, the agency is at risk of 

allocating resources for projects that do not minimize risk and 

maximize return on investment. To assist in correcting this weakness, 

the agency established a structure for the acquisition of information 

technology. USAIDís Business Transformation Executive Committee, 

staffed with senior management members, is tasked with recommending, 

coordinating, and overseeing agencywide investments in information 

technology. The committee also is tasked with ensuring that the agency 

has reliable systems that provide the information its management needs 

to make informed decisions and facilitate compliance with legislative 

requirements. The Inspector General continues to monitor USAIDís 

progress, but more work is needed. For example, the Inspector General 

conducted a review of software development practices and recommended 

that USAIDís overseas missions (1) develop policies and procedures for 

controlling the installation of software, (2) develop a process to 

maintain a current inventory list, and (3) conduct an inventory of 

locally developed software and submit it to headquarters.[Footnote 14]



USAID does not have adequate computer security controls in place to 

mitigate the risks to its critical information systems. In 2002, the 

Office of the Inspector General reported that computer security 

deficiencies expose USAID resources and data to loss, theft, 

alterations, or destruction.[Footnote 15] To improve its computer 

security, the agency has taken steps that include updating security 

policies and expanding security training. However, more work is needed 

to ensure effective security.



Improve Financial Management Capabilities:



Although USAID has improved some areas of its financial management, it 

needs to make additional improvements to produce timely and accurate 

financial information for use by USAID managers in carrying out the 

agencyís programs around the world.



Fiscal year 2001 marked the first time that the USAID Inspector General 

was able to express an opinion on three of USAIDís financial 

statements--the Balance Sheet, Statement of Changes in Net Position, 

and Statement of Budgetary Resources. However, the opinions were 

qualified and achieved only through extensive efforts to overcome 

material internal control weaknesses. Thus, the progress made is not 

necessarily sustainable. Further, the Inspector General remained unable 

to express an opinion on USAIDís Statement of Net Cost and Statement of 

Financing, because the agencyís financial management systems could not 

produce accurate, complete, reliable, timely, and consistent financial 

statement and performance information. USAIDís inadequate accounting 

systems make it difficult for the agency to accurately account for 

activity costs and measure its program results.



In 2002, the Inspector General continued to report that USAIDís 

financial management systems do not meet federal financial system 

requirements.[Footnote 16] Currently, USAID uses a variety of 

nonintegrated systems that require data reentry, supplementary 

accounting records, and lengthy and burdensome reconciliation 

processes. In an attempt to mitigate this long-standing problem, USAID 

recently deployed an off-the-shelf accounting system as a component of 

its financial management system. However, USAID still lacks a fully 

integrated financial management system and places a greater reliance on 

manual processes, such as reconciliations, because data for the same 

transactions are entered into multiple systems.



The Inspector General also reported in 2002 that while USAID had made 

improvements in its processes and procedures, it still has several 

material weaknesses and reportable conditions concerning internal 

controls that impair the integrity of its financial information. 

Specifically, the Inspector General reported that USAIDís material 

weaknesses include:



* financial systems that did not meet federal financial systems 

requirements, applicable federal accounting standards, and standard 

general ledger requirements at the transaction level;



* internal controls that did not provide reasonable assurance that the 

Fund Balance with Treasury accounts were accurate and reliable; and:



* advances to grantees that were not properly controlled.



The Inspector General also reported that the agency needs to improve 

its process for recognizing and reporting accounts receivable and its 

internal controls over the processing of accounts payable at overseas 

missions.



Effective financial systems and controls are necessary to ensure that 

USAID management has timely and reliable information to make effective, 

informed decisions and that assets are safeguarded. USAID has made 

progress in correcting some of its systems and internal control 

deficiencies and is in the process of revising its plan to remedy 

financial management weaknesses as required by the Federal Financial 

Management Improvement Act of 1996.[Footnote 17] To obtain its goal, 

however, USAID needs to continue its efforts to resolve its internal 

control weaknesses and to ensure that the planned upgrades to its 

financial systems are in compliance with federal financial system 

requirements.



[End of section]



GAO Contacts:



Subject covered in this report: Better manage human capital; ; Develop 

better performance data to assess

its programs; Contact person: Jess T. Ford, Director; International 

Affairs and Trade; (202) 512-4268; fordj@gao.gov.



Subject covered in this report: Enhance information technology systems; 

Contact person: Joel C. Willemssen, Managing Director; Information 

Technology; (202) 512-6408; willemssenj@gao.gov; ; Robert F. Dacey, 

Director; Information Security Issues; Information Technology; (202) 

512-3317; daceyr@gao.gov.



Subject covered in this report: Improve financial management 

capabilities; Contact person: Gregory D. Kutz, Director; Financial 

Management and Assurance; (202) 512-9095; kutzg@gao.gov.



[End of section]



Related GAO Products:



Performance and Accountability:



U.S. Agency for International Development: Status of Achieving Key 

Outcomes and Addressing Major Management Challenges. GAO-01-721. 

Washington, D.C.: August 17, 2001.



Major Management Challenges and Program Risks: U.S. Agency for 

International Development. GAO-01-256. Washington, D.C.: January 2001.



Observations on the U.S. Agency for International Developmentís Fiscal 

Year 1999 Performance Report and Fiscal Years 2000 and 2001 Performance 

Plans. GAO/NSIAD-00-195R. Washington, D.C.: June 30, 2000.



Observations on the U.S. Agency for International Developmentís Fiscal 

Year 2000 Performance Plan. GAO/NSIAD-99-188R. Washington, D.C.: July 

20, 1999.



Major Management Challenges and Program Risks: U.S. Agency for 

International Development. GAO/OCG-99-16. Washington, D.C.: January 

1999:



AID Management: Strategic Management Can Help AID Face Current and 

Future Challenges. GAO/NSIAD-92-100. Washington, D.C.: March 6, 1992.



Foreign Assistance:



Foreign Assistance: Disaster Recovery Program Addressed Intended 

Purposes, but USAID Needs Greater Flexibility to Improve Its Response 

Capability. GAO-02-787. Washington, D.C.: July 24, 2002.



Foreign Assistance: USAID Relies Heavily on Nongovernmental 

Organizations, but Better Data Needed to Evaluate Approaches. GAO-02-

471. Washington, D.C.: April 25, 2002.



Former Soviet Union: U.S. Rule of Law Assistance Has Had Limited 

Impact. GAO-01-354. Washington, D.C.: April 17, 2001.



Foreign Assistance: Any Further Aid to Haitian Justice System Should Be 

Linked to Performance-Related Conditions. GAO-01-24. Washington, D.C.: 

October 17, 2000.



Foreign Assistance: Status of USAIDís Reforms. GAO/NSIAD-96-241BR. 

Washington, D.C.: September 24, 1996.



Foreign Assistance: AID Strategic Direction and Continued Management 

Improvements Needed. GAO/NSIAD-93-106. Washington, D.C.: June 11, 1993.



Information Technology:



Critical Infrastructure Protection: Significant Challenges Need to Be 

Addressed. GAO-02-961T. Washington, D.C.: July 24, 2002.



Information Security: Additional Actions Needed to Implement Reform 

Legislation. GAO-02-470T. Washington, D.C.: March 6, 2002.



Information Technology: Enterprise Architecture Use Across the Federal 

Government Can Be Improved. GAO-02-6. Washington, D.C.: February 19, 

2002.



Computer Security: Improvements Needed to Reduce Risk to Critical 

Federal Operations and Assets. GAO-02-231T. Washington, D.C.: November 

9, 2001.



Information Resources Management: Initial Steps Taken but More 

Improvements Needed in AIDís IRM Program. GAO/IMTEC-92-64. Washington, 

D.C.: September 29, 1992.



[End of section]



Performance and Accountability and High-Risk Series:



Major Management Challenges and Program Risks: A Governmentwide 

Perspective. GAO-03-95.



Major Management Challenges and Program Risks: Department of 

Agriculture. GAO-03-96.



Major Management Challenges and Program Risks: Department of Commerce. 

GAO-03-97.



Major Management Challenges and Program Risks: Department of Defense. 

GAO-03-98.



Major Management Challenges and Program Risks: Department of Education. 

GAO-03-99.



Major Management Challenges and Program Risks: Department of Energy. 

GAO-03-100.



Major Management Challenges and Program Risks: Department of Health and 

Human Services. GAO-03-101.



Major Management Challenges and Program Risks: Department of Homeland 

Security. GAO-03-102.



Major Management Challenges and Program Risks: Department of Housing 

and Urban Development. GAO-03-103.



Major Management Challenges and Program Risks: Department of the 

Interior. GAO-03-104.



Major Management Challenges and Program Risks: Department of Justice. 

GAO-03-105.



Major Management Challenges and Program Risks: Department of Labor. 

GAO-03-106.



Major Management Challenges and Program Risks: Department of State. 

GAO-03-107.



Major Management Challenges and Program Risks: Department of 

Transportation. GAO-03-108.



Major Management Challenges and Program Risks: Department of the 

Treasury. GAO-03-109.



Major Management Challenges and Program Risks: Department of Veterans 

Affairs. GAO-03-110.



Major Management Challenges and Program Risks: U.S. Agency for 

International Development. GAO-03-111.



Major Management Challenges and Program Risks: Environmental Protection 

Agency. GAO-03-112.



Major Management Challenges and Program Risks: Federal Emergency 

Management Agency. GAO-03-113.



Major Management Challenges and Program Risks: National Aeronautics and 

Space Administration. GAO-03-114.



Major Management Challenges and Program Risks: Office of Personnel 

Management. GAO-03-115.



Major Management Challenges and Program Risks: Small Business 

Administration. GAO-03-116.



Major Management Challenges and Program Risks: Social Security 

Administration. GAO-03-117.



Major Management Challenges and Program Risks: U.S. Postal Service. 

GAO-03-118.



High-Risk Series: An Update. GAO-03-119.



High-Risk Series: Strategic Human Capital Management. GAO-03-120.



High-Risk Series: Protecting Information Systems Supporting the Federal 

Government and the Nationís Critical Infrastructures. GAO-03-121.



High-Risk Series: Federal Real Property. GAO-03-122.



FOOTNOTES



[1] U.S. General Accounting Office, Major Management Challenges and 

Program Risks: U.S. Agency for International Development, GAO-01-256 

(Washington, D.C.: January 2001).



[2] Foreign personal service contractors are non-U.S. citizens 

contracted by the U.S. government. U.S. direct hires are U.S. citizens 

employed under the civil or foreign service personnel systems.



[3] USAID Office of the Inspector General, Semiannual Report to 

Congress (Washington, D.C.: Oct. 31, 2001).



[4] U.S. General Accounting Office, Foreign Assistance: Disaster 

Recovery Program Addressed Intended Purposes, but USAID Needs Greater 

Flexibility to Improve Its Response Capability, GAO-02-787 (Washington, 

D.C.: July 24, 2002).



[5] P.L. 103-62.



[6] In fiscal 2002, USAID changed its reporting requirements and a new 

annual report replaced the Results Review and Resource Request reports 

that had been a significant part of USAIDís performance management 

system. According to USAID, the new report is supposed to provide a 

simplified reporting format for other required agency reports, 

including a streamlined Congressional Budget Justification. Since this 

is a recent reporting change, we cannot determine whether it is an 

improvement.



[7] USAID Office of the Inspector General, Audit of Performance 

Monitoring for Indicators Appearing in Selected USAID Operating Unitsí 

Results Review and Resources Request Reports, 9-000-01-005-P 

(Washington, D.C.: Sept. 27, 2001).



[8] U.S. General Accounting Office, Foreign Assistance: USAID Relies 

Heavily on Nongovernmental Organizations, but Better Data Needed to 

Evaluate Approaches,

GAO-02-471 (Washington, D.C.: Apr. 25, 2002).



[9] GAO-01-256.



[10] U.S. General Accounting Office, Former Soviet Union: U.S. Rule of 

Law Assistance Has Had Limited Impact, GAO-01-354 (Washington, D.C.: 

Apr. 17, 2001).



[11] U.S. General Accounting Office, Observations on the U.S. Agency 

for International Developmentís Fiscal Year 1999 Performance Report and 

Fiscal Years 2000 and 2001 Performance Plans, GAO/NSIAD-00-195R 

(Washington, D.C.: June 30, 2000).



[12] GAO-01-256.



[13] The Clinger-Cohen Act of 1996 requires executive agencies to 

implement a process that maximizes the value and assesses management 

risks involved in information technology investments.



[14] USAID Office of the Inspector General, Semiannual Report to 

Congress (Washington, D.C.: Oct. 31, 2002).



[15] See footnote 14.



[16] USAID Office of Inspector General, Report on USAIDís Consolidated 

Financial Statements, Internal Controls and Compliance for Fiscal Year 

2001, No. 0-000-02-006-F (Washington, D.C.: Feb. 25, 2002).



[17] P.L. 104-208.



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