1. United States Foreign Assistance NOT FOR DISTRIBUTION 1 Introduction to Foreign Assistance Reform Fall 2007

2. United States Foreign Assistance NOT FOR DISTRIBUTION 2 Introduction to Foreign Assistance Reform  Learning Objectives  Understand origin and purpose of USG foreign assistance  Know objectives of the reforms  Relate Operational Plan and Performance Report to the reforms  Understand the planning and reporting timeline 1a – INTRODUCTION TO FA REFORM

3. United States Foreign Assistance NOT FOR DISTRIBUTION 3 U.S. Foreign Assistance Origins  Marshall Plan aligned aid with foreign policy objectives and American values  1961 Foreign Assistance Act  Serves as authorizing legislation for foreign assistance  Consolidated existing agencies/programs  Separated military from non-military aid  1998 Foreign Affairs Reform & Restructuring Act  Created USAID as a permanent executive agency  2002 National Security Strategy – The “3 D’s”  Identified development, diplomacy and defense as instruments to advance U.S. national security interests 1a – INTRODUCTION TO FA REFORM

4. United States Foreign Assistance NOT FOR DISTRIBUTION 4 Foreign Ops Accounts (FY2008 Request)  Approximately 35 different funding accounts within the “150 Account” (Section 150 of 1961 F.A. Act)  Appropriated through regional (e.g., FSA, SEED) and functional/global accounts (e.g., Child Survival and Health, Peace-Keeping Operations)  Approximately $25.5 billion total – less than 1% of total annual U.S. appropriations 1a – INTRODUCTION TO FA REFORM

5. United States Foreign Assistance NOT FOR DISTRIBUTION 5 Examples within FY2008 Request  Child Survival & Health (CSH) - $1.56b  Development Assistance (DA) - $1.04b  Economic Support Funds (ESF) - $3.32b  Foreign Military Financing (FMF) - $4.54b  Global HIV/AIDS Initiative (GHAI) - $4.15b  International Narcotics Control & Law Enforcement (INCLE) - $634m  Migration & Refugee Asst. (MRA) - $773m 1a – INTRODUCTION TO FA REFORM

6. United States Foreign Assistance NOT FOR DISTRIBUTION 6 Facts and Figures  Of 190 Operating Units (field and HQ offices that receive FA funds) the top 10 receive 65% of the budget (excluding GHAI)  Of the 154 countries receiving FA funds, the top 10 receive 73% of the FA budget (excluding GHAI)  1/3 of budget went to Stabilization Operations and Security Sector Reform  1/3 went to Humanitarian Assistance, Health, and Counter Narcotics  1/3 went to 20 Program Areas including Democracy and Economic Growth 1a – INTRODUCTION TO FA REFORM

7. United States Foreign Assistance NOT FOR DISTRIBUTION 7 US Total Resource Flows to the Developing World in 2005: $158 BN U.S. Government Official Development Assistance 10% Iraq and Afghanistan 8% Private Capital Flows (FDI and Net Cap Markets) 44% Remittances 26% Foundations 2% Corporate Foundations 1% NGO Grants 3% Religious Organizations 5% Universities and Colleges 1% 1a – INTRODUCTION TO FA REFORM

8. United States Foreign Assistance NOT FOR DISTRIBUTION 8 Weaknesses of Previous System  Strategically Impaired  Limited mechanisms to apply overall prioritization; outside of EUR/ACE, MEPI, OGAC, Afghan Coordinator, no central coordinating bodies  Dispersed Authority over Budgets  Numerous accounts, created ad hoc in response to a series of “emergencies,” led to stove-piping and poor coordination  Disparate Performance Measurement Systems  No shared metrics to measure impact of USG-funded programs  Inadequate Imperatives to “Graduate” Countries  Except for FSA, SEED and MCA, no defined threshold 1a – INTRODUCTION TO FA REFORM

9. United States Foreign Assistance NOT FOR DISTRIBUTION 9 Objectives of Foreign Assistance Reform  Foreign Assistance Reform builds on best practices across the USG to improve:  Strategic Direction  Performance Accountability  Transparency in the use of funds  Information Systems  Integrate State/USAID planning, budgeting and reporting on foreign assistance 1a – INTRODUCTION TO FA REFORM

10. United States Foreign Assistance NOT FOR DISTRIBUTION 10 Why Coordinate Foreign Assistance?  Unify efforts to achieve results and advance U.S. interests  Improve information-sharing, planning and implementation across USG agencies that program FA Funds  Increase ability to aggregate information and report results 1a – INTRODUCTION TO FA REFORM

11. United States Foreign Assistance NOT FOR DISTRIBUTION 11 Office of the Director of U.S. Foreign Assistance (F) Created in 2006 to:  Ensure effective foreign assistance programs that meet broad foreign policy objectives  More fully align foreign assistance activities carried out by State and USAID  Convey through common language and definitions foreign assistance activities, budgets and performance  Demonstrate responsible stewardship of taxpayer dollars 1a – INTRODUCTION TO FA REFORM

12. United States Foreign Assistance NOT FOR DISTRIBUTION 12 Office of the Director of U.S. Foreign Assistance (F)  Has authority over State and USAID foreign assistance funding and programs  Directs consolidated policy, planning, budget and implementation mechanisms  Provides guidance on foreign assistance delivered through other USG entities, such as Millennium Challenge Corporation (MCC) and the Office of the U.S. Global AIDS Coordinator (OGAC) 1a – INTRODUCTION TO FA REFORM

13. United States Foreign Assistance NOT FOR DISTRIBUTION 13 Strategy and Tactics  Foreign Assistance Framework sets overall goal and priority objectives  Washington takes lead in developing strategic priorities; field input is vital.  Field determines best implementation tactics based on in-country presence and knowledge.  Washington and field work closely together to: build the annual budget request, write country and regional assistance strategies; review implementation plans. 1a – INTRODUCTION TO FA REFORM

14. United States Foreign Assistance NOT FOR DISTRIBUTION 14 Transformational Diplomacy  Foreign assistance is an essential tool to achieve the transformational diplomacy goal: “Helping to build and sustain democratic, well-governed states that will respond to the needs of their people, reduce widespread poverty, and conduct themselves responsibly in the international system.” 1a – INTRODUCTION TO FA REFORM

15. United States Foreign Assistance NOT FOR DISTRIBUTION 15 1a – INTRODUCTION TO FA REFORM

16. United States Foreign Assistance NOT FOR DISTRIBUTION 16 Strategic Direction: New Foreign Assistance Standardized Program Structure Functional Objectives Program Areas Program Elements Program Sub-Elements 1a – INTRODUCTION TO FA REFORM

17. United States Foreign Assistance NOT FOR DISTRIBUTION 17 The Role of the Operational Plan  Captures Tactical Implementation of New Strategic Direction  Detailed proposal for activities and partners to be funded and results to be achieved  Instrument for collecting standardized data about foreign assistance programs 1a – INTRODUCTION TO FA REFORM

18. United States Foreign Assistance NOT FOR DISTRIBUTION 18 Operational Plan: How it will be used  To more fully align State and USAID foreign assistance activities  To convey foreign assistance activities, budgets and performance through common language and definitions  To collect standardized data -- both budgetary and performance -- on planned activities The Operation Plan is NOT a financial management tool, accounting system, MIS, Strategy Document, etc. 1a – INTRODUCTION TO FA REFORM

19. United States Foreign Assistance NOT FOR DISTRIBUTION 19 Operational Plan – Who prepares it?  FY 2007: Pilot Year  67 “fast-track” countries  All of USAID  128 total Operational Plans  FY 2008: Full Implementation  All Operating Units that implement FA programs with funds from the 150 account  192 Operating Units – 156 countries, 12 regional platforms, 24 State and USAID headquarters bureaus/offices 1a – INTRODUCTION TO FA REFORM

20. United States Foreign Assistance NOT FOR DISTRIBUTION 20 Performance Accountability  Headquarters level  Annual reporting to Congress and the public  Country level  Country performance  USG program performance  F reviews annually to adjust country budgets  Partner level  Planned funding linked to specific targets  Operating Units review performance annually  Partners submit regular progress reports to Project Managers  Project Managers visit field to assess progress & verify reports  Findings feed into annual review of partner performance 1a – INTRODUCTION TO FA REFORM

21. United States Foreign Assistance NOT FOR DISTRIBUTION 21 Information Systems  Foreign Assistance Coordination & Tracking System (FACTS)  Technology allows centralized data analysis and management within decentralized agencies  Data are collected centrally and provide more detail than in the past  USG can respond quickly to questions from stakeholders 1a – INTRODUCTION TO FA REFORM

22. United States Foreign Assistance NOT FOR DISTRIBUTION 22 Questions?  For information on Foreign Assistance Reform and Operational Plans and Performance Reports, please visit:  www.state.gov/f (public website): available to non-USG partners www.state.gov/f  http://f.state.gov (State Intranet) or http://inside.usaid.gov/A/F (USAID Intranet): contains USG-only materials and Operational Plan and Performance Report Guidance http://f.state.gov http://inside.usaid.gov/A/F  www.foreignassistance.net – learning resource site www.foreignassistance.net 1a – INTRODUCTION TO FA REFORM