[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





                 STRATEGIC WORKFORCE PLANNING AT USAID

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                   EMERGING THREATS AND INTERNATIONAL
                               RELATIONS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 23, 2003

                               __________

                           Serial No. 108-113

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota                 ------
MARSHA BLACKBURN, Tennessee          BERNARD SANDERS, Vermont 
                                         (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director

 Subcommittee on National Security, Emerging Threats and International 
                               Relations

                CHRISTOPHER SHAYS, Connecticut, Chairman

MICHAEL R. TURNER, Ohio
DAN BURTON, Indiana                  DENNIS J. KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio           TOM LANTOS, California
RON LEWIS, Kentucky                  BERNARD SANDERS, Vermont
TODD RUSSELL PLATTS, Pennsylvania    STEPHEN F. LYNCH, Massachusetts
ADAM H. PUTNAM, Florida              CAROLYN B. MALONEY, New York
EDWARD L. SCHROCK, Virginia          LINDA T. SANCHEZ, California
JOHN J. DUNCAN, Jr., Tennessee       C.A. ``DUTCH'' RUPPERSBERGER, 
TIM MURPHY, Pennsylvania                 Maryland
WILLIAM J. JANKLOW, South Dakota     CHRIS BELL, Texas
                                     JOHN F. TIERNEY, Massachusetts

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
            Lawrence J. Halloran, Staff Director and Counsel
                Thomas Costa, Professional Staff Member
                        Robert A. Briggs, Clerk
                    David Rapallo, Minority Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 23, 2003...............................     1
Statement of:
    Marshall, John, Assistant Administrator for Management, U.S. 
      Agency for International Development, accompanied by Rose 
      Marie Depp, Director, Office of Management of Human 
      Resources, U.S. Agency for International Development, and 
      Barbara Turner, Deputy Assistant Administrator, Bureau for 
      Policy and Program Coordination; and Jess T. Ford, 
      Director, International Affairs and Trade Division, U.S. 
      General Accounting Office, accompanied by Albert 
      Huntington, Assistant Director, and Audrey Solis, Project 
      Manager....................................................     5
Letters, statements, etc., submitted for the record by:
    Ford, Jess T., Director, International Affairs and Trade 
      Division, U.S. General Accounting Office, prepared 
      statement of...............................................    18
    Marshall, John, Assistant Administrator for Management, U.S. 
      Agency for International Development, prepared statement of     8
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut, prepared statement of............     3
    Turner, Barbara, Deputy Assistant Administrator, Bureau for 
      Policy and Program Coordination:
        Information concerning general talking points............    53
        Letter dated October 20, 2003............................    50

 
                 STRATEGIC WORKFORCE PLANNING AT USAID

                              ----------                              


                      TUESDAY, SEPTEMBER 23, 2003

                  House of Representatives,
Subcommittee on National Security, Emerging Threats 
                       and International Relations,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:08 a.m., in 
room 2247, Rayburn House Office Building, Hon. Christopher 
Shays (chairman of the subcommittee) presiding.
    Present: Representatives Shays and Turner.
    Staff present: Lawrence Halloran, staff director and 
counsel; Thomas Costa, professional staff member; Robert A. 
Briggs, clerk; Chris Skaluba, intern; David Rapallo, minority 
counsel; and Jean Gosa, minority assistant clerk.
    Mr. Shays. The Subcommittee on National Security, Emerging 
Threats and International Relations hearing entitled, 
``Strategic Workforce Planning at USAID'' is called to order.
    According to the President's management agenda, in most 
agencies, human resource planning is weak. Workforce 
deficiencies will be exacerbated by the upcoming retirement 
wave of the baby boom generation. Approximately 71 percent of 
the government's current permanent employees will be eligible 
for either regular or early retirement by 2010, and then 40 
percent of those employees are expected to retire.
    Without proper planning, the skilled mix of Federal work 
force will not reflect tomorrow's changing missions. This 
strategic human capital time bomb described by the 
administration has been ticking at the U.S. Agency for 
International Development [USAID], for some time. For the 
better part of the last decade, both the General Accounting 
Office [GAO], and the USAID Inspector General have reported a 
failure of USAID to plan for the impacts of downsizing, 
employee demographics and the changing needs of a more 
dangerous world.
    Today GAO updates those earlier findings and answers our 
questions about the impact of work force planning lapses on the 
ability of USAID to perform critical missions in places like 
Afghanistan and Iraq.
    At USAID, the mission has changed. The manpower has not. 
New laws, regulations, policies and host-nation expectations 
have not prompted corresponding reforms of USAID personnel 
practices.
    For a variety of long evident reasons, the core function of 
USAID has evolved from that of direct aid provider to one of 
contract or management. Skilled and dedicated veterans at USAID 
have done their best to adapt, but the lack of a clear plan to 
identify and deploy the skilled sets demanded by a fast-
changing world leaves the agency hard pressed to meet current 
missions and ill-equipped to face a demanding future.
    The GAO report released today notes 47 of 77 USAID 
positions in Kabul remain vacant. The agency is also finding it 
difficult to place Foreign Service Officers in Iraq where 
unaccompanied tours and harsh living conditions do not attract 
many takers from among a predominantly married, over 40 talent 
pool.
    According to GAO, efforts to address strategic human 
capital management weaknesses at USAID have had limited impact. 
To meet its important mission in places like Afghanistan, Iraq 
and other development frontiers, the agency needs a 
comprehensive work force planning system and similarly expanded 
method of calculating the true cost of doing business.
    [The prepared statement of Hon. Christopher Shays follows:]

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    Mr. Shays. We welcome our panel of witnesses from the 
General Accounting Office and the Agency for International 
Development this morning, and we look forward to their 
testimony.
    At this time, the Chair will welcome our two panelists. We 
have Mr. John Marshall, Assistant Administrator for Management, 
U.S. Agency for International Development. We also have Mr. 
Jess T. Ford, Director, International Affairs and Trade 
Division, U.S. General Accounting Office.
    Is there anyone else, gentlemen, that may respond to some 
questions that we should swear in when we swear you in? Anyone 
that you might call on that might respond? If so, I'd like them 
to stand as well.
    Mr. Marshall. If needed, our Chief Human Capital Office, 
Rose Marie Depp, from the Agency as well as our Assistant 
Administrator for Planning Budget and Policy Coordination, 
Barbara Turner.
    Mr. Shays. Great. Why don't you both stand as I swear you 
in, and then we may call on you. We may not.
    Mr. Ford. I'm going to have my two staffers be sworn in as 
well. Albert Huntington, Assistant Director for this project. 
Audrey Solis, Project Manager.
    Mr. Shays. Thank you. That helps us out. Raising your right 
hands.
    [Witnesses sworn.]
    Mr. Shays. Note for the record our two witnesses and 
potential witnesses have responded in the affirmative.
    Mr. Marshall, thank you. We will have another Member join 
us, and then I will go through the household requirements of 
asking unanimous consent that your statement may be part of the 
record even if you don't actually give all of it in your 
testimony.
    At this time Mr. Marshall, thank you, and you may begin.
    You know what? Just do me a favor. Tap that mic and see if 
it actually--yes. It's pretty delicate. You're going to have to 
have it pretty close to you, I'm afraid. Bring it a little 
closer if you would.
    Mr. Marshall. My voice carries pretty well.
    Mr. Shays. It does. Here's what I'd like, though. You will 
not offend me if in the back row you do not hear, if you raise 
your hand, I'd like to make sure you can hear in this room. So 
if you can't hear and I don't see any hands, that is your 
fault.
    OK. Mr. Marshall.

   STATEMENTS OF JOHN MARSHALL, ASSISTANT ADMINISTRATOR FOR 
    MANAGEMENT, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, 
ACCOMPANIED BY ROSE MARIE DEPP, DIRECTOR, OFFICE OF MANAGEMENT 
OF HUMAN RESOURCES, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, 
AND BARBARA TURNER, DEPUTY ASSISTANT ADMINISTRATOR, BUREAU FOR 
 POLICY AND PROGRAM COORDINATION; AND JESS T. FORD, DIRECTOR, 
    INTERNATIONAL AFFAIRS AND TRADE DIVISION, U.S. GENERAL 
ACCOUNTING OFFICE, ACCOMPANIED BY ALBERT HUNTINGTON, ASSISTANT 
          DIRECTOR, AND AUDREY SOLIS, PROJECT MANAGER

    Mr. Marshall. Mr. Chairman, thank you for the opportunity 
to testify to USAID's efforts to reshape its work force to 
better meet new and evolving global challenges. With increasing 
responsibilities overseas, the need for effective work force 
planning is more critical than ever. When Administrator Andrew 
Natsios arrived at USAID in 2001, he found all of the Agency's 
management systems in a state of disrepair. He directed me to 
develop plans to overhaul and modernize all five of the basic 
systems of the management bureau; human resources, financial 
management, procurement, information technology services and 
administrative services.
    Reforms in each of these areas are well underway. Most have 
been integrated with the President's management agenda, and 
many are being coordinated with similar efforts in the State 
Department. Like many Federal agencies, USAID is experiencing 
serious human capital challenges. As a result of new program 
demands around the world, deep staffing cuts and decisions to 
effectively shut down recruiting and training in the 1990's, 
our work force is stretched thin, rapidly graying and lacking 
in critical skills.
    Our work force planning challenges are complicated by a 
unique approach to planning and budgeting for the agency's 
administrative requirements. According to GAO, USAID is the 
only agency in the government with an operating expense account 
that funds most but not all of the Agency's administrative 
needs. This account has been tightly controlled. So the Agency, 
with the consent of OMB and Congress, has had to use program 
funds to meet administrative needs directly associated with the 
actual delivery of foreign assistance.
    For example, we make use of over a dozen different hiring 
authorities to meet our work force needs. Some of which use 
program funds. This has complicated our work force planning 
enormously, because each of these work force components has 
different competencies, cultures and administrative 
requirements. Therefore, our HR staff must understand not just 
one but multiple HR systems, and our leaders must blend them 
into a single uniform foreign assistance delivery system.
    Our work force challenges are also compounded by new and 
growing challenges to respond to the war on terrorism and the 
continuing threat that hunger, poverty and the HIV AIDS 
epidemic pose to our national security.
    President Bush's national security strategy acknowledges 
these threats and places the strategic importance of foreign 
assistance alongside that of the other two essential pillars of 
U.S. foreign policy, defense and diplomacy.
    To address these challenges, USAID is taking aggressive 
steps to strategically manage our human capital by adopting 
best practices from the private sector including those endorsed 
by GAO in the President's management agenda. Workforce planning 
is an area where we have much room for improvement. Past 
efforts have been segmented by type of employment category and 
have not examined the entire work force in the context of 
agency wide strategic planning.
    USAID is now initiating the first ever comprehensive 
competency-based work force analysis focusing on three major 
organizations as pilots; our human resources organization, 
procurement and global health.
    The Agency has recently completed an overseas staffing 
assessment to rationalize the deployment of approximately 700 
Foreign Service Officers in overseas missions. This is the 
first step in an overall right-sizing effort designed to 
establish necessary skills and staffing levels and appropriate 
headquarters to field ratios.
    The next steps will be to determine whether some of the 
functions should be managed regionally and to apply in a 
systematic way the right-sizing framework developed by the 
General Accounting Office. This framework is designed to link 
staffing levels to three critical elements of overseas 
operations. One, physical security and real estate; two, 
mission priorities and requirements; and third, operational 
costs.
    We are simultaneously ramping up recruitment efforts to 
create a 21st century Foreign Service corps. The centerpiece of 
this effort is our so-called development readiness initiative 
that parallels the Department of State's diplomatic readiness 
initiative. We are successfully recruiting at the mid levels 
through our New Entry Professional [NEP] program and have 
reinstituted recruitment of junior officers as International 
Development Interns [IDIs].
    Since the inception of the net program in 1999, we've 
recruited over 260 mid-level Foreign Service Officers.
    Establishing a surge capacity to meet emerging needs is 
essential to USAID success. The development readiness 
initiative was created to address this need. Without this 
capacity, USAID has few ways of responding rapidly. For 
example, we're stuck with reassigning staff from existing 
missions and hiring contractors as two of our best responses.
    We are also improvising other ways of addressing urgent 
needs, including developing rosters of personal service 
contractors with past experience and security clearances who 
are available for short-term deployments--excuse me, 
deployments on short notice. And we're cross-training direct-
hire employees and making greater use of limited non-career 
appointments.
    While shortfalls in our operating expense account have 
presented enormous challenges in managing our human resources, 
much progress has been achieved this year through our efforts 
to identify the full cost of doing business and to present them 
in more transparent ways, and through our efforts to seek a 
better means of financing these costs in the future.
    As part of our human capital initiative, we have partnered 
with the Office of Personnel Management to more effectively 
analyze our human capital strategies and address gaps in our 
critical competencies. We expect to have a comprehensive human 
capital strategy in place by the end of the first quarter of 
2004, and it will be adapted based on our experience--ongoing 
experience with work force planning analysis as we move into 
the future.
    We are also working diligently to incorporate suggestions 
from GAO, OPM and other experts and to institutionalize our 
strategy to rebuild our work force. Thank you for the 
opportunity to appear today, Mr. Chairman. I'd be happy to 
answer any questions.
    Mr. Shays. Thank the gentleman.
    [The prepared statement of Mr. Marshall follows:]

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    Mr. Shays. We've been joined by Mr. Turner. At this time 
I'd ask unanimous consent that all members of the subcommittee 
be permitted to place an opening statement in the record and 
the record remain open for 3 days for that purpose. Without 
objection, so ordered.
    I ask further unanimous consent that all witnesses be 
permitted to include their written statements in the record, 
and without objection, so ordered.
    Mr. Ford.
    Mr. Ford. Thank you, Mr. Chairman, members of the 
subcommittee. I'm pleased to be here today to discuss our 
report on USAID's work force planning----
    Mr. Shays. If you'd turn the mic at an angle so at least it 
will get--exactly.
    Mr. Ford. OK.
    Mr. Shays. Even more so. Thank you.
    Mr. Ford. Today I'm going to talk about our report that 
we're issuing today on work force planning that we conducted 
for this subcommittee, and I'm going to highlight the 
preliminary findings from another report that we hope to issue 
in the next couple of days on USAID's operating expense 
account.
    The work force report, as I mentioned, has been released 
today, and I'm going to briefly summarize some of our main 
points.
    Humanitarian and economic development assistance is an 
integral part of U.S. global security strategy, particularly as 
the United States seeks to diminish the underlying conditions 
of poverty and corruption that may be linked to instability and 
terrorism.
    In fiscal year 2003, USAID expects to obligate about $13 
billion to manage programs in about 160 countries. Agency staff 
often work under difficult environments and under evolving 
program demands. More will be demanded of USAID staff as they 
implement large-scale relief and reconstruction programs in 
Afghanistan and Iraq while continuing to administer their 
traditional long-term development assistance programs.
    As a result, it is essential that USAID develop a strategic 
approach to its work force planning so that it can identify and 
attain the essential skills it needs to accomplish its goals. 
It is also important that USAID identify and report accurate 
costs on administrating its foreign aid programs.
    I'm going to summarize briefly points on both. First, I 
will focus most of my statement on USAID's work force planning. 
I will discuss some of USAID's human capital challenges, 
including its recent efforts to staff missions in Afghanistan 
and Iraq and the status of its efforts to develop a strategic 
work force planning system.
    Regarding USAID's operating expense account, I will also 
discuss how the Agency's reporting of operating expenses does 
not always capture the full cost of administering foreign 
assistance.
    USAID's work force has undergone many changes over the 
years. For example, as noted on our chart that we--over on my 
right, in the past decade, USAID has had a reduction in their 
U.S. direct-hire work force of approximately 37 percent from 
about 3100 to almost 2,000 direct-hire employees. At the same 
time, USAID has been involved in operating in more countries 
overseas, and most recently, its program funding levels have 
increased significantly as much as 78 percent in the last 2 
years.
    Moreover, the Agency has increasingly relied on personal 
service contractors and institutional contractors which account 
for over two-thirds of USAID's work force to implement its 
humanitarian and development assistance projects and manage the 
day-to-day activities of its overseas missions.
    At the same time, program funding levels have grown 
significantly over the last 2 years. However, as we reported in 
1993 and still find today, USAID has not fully developed the 
comprehensive strategic work force planning system that would 
help it manage these changes. As a result, the Agency faces a 
number of human capital challenges, such as difficulties in 
filling overseas positions, a lack of mentoring and training 
opportunities for new staff, a lack of a surge capacity to 
quickly respond to post-emergency and disaster situations.
    Over 50 percent of USAID's Foreign Service staff are 
eligible to retire in the next 5 years. With fewer and less 
experienced staff managing more programs in more countries, 
USAID's ability to oversee the delivery of foreign assistance 
is becoming increasingly difficult. These vulnerabilities are 
reflected in the Agency's difficulties and staffing missions in 
Afghanistan and Iraq.
    As of early September, in both places USAID has had 
vacancies in Foreign Service staff and foreign national staff. 
Recently and particularly in response to the President's 
management agenda, USAID has taken a number of preliminary 
steps to determine the work force it needs now and in the 
future and is now devising strategies to achieve these goals.
    However, in comparing USAID's efforts to the proven 
principles of strategic work force planning, more work needs to 
be done. Accordingly, we are recommending in our report that 
USAID develop a comprehensive strategic work force planning 
system and institutionalize that system to help it manage the 
changes in its work force.
    With regard to the issue of USAID's operating expenses, 
which is currently a separate line item appropriation intended 
to clearly identify the Agency's cost of doing business, we 
will be reporting that the current operating expenses do not 
always reflect all the costs associated with managing its 
foreign aid program, primarily because missions sometimes pay 
contractors performing administrative or oversight duties with 
program funds.
    Distinguishing between funds spent on operating expenses 
and funds benefiting foreign recipients is not always clear, 
and as a result, the amount spent on program funds may be 
overstated.
    Mr. Chairman, this concludes my summary. I'd be happy to 
answer any questions you may have.
    Mr. Shays. Thank you very much.
    [The prepared statement of Mr. Ford follows:]

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    Mr. Shays. I believe that Congressman Platt's subcommittee 
is going to be looking at the financial side of this tomorrow. 
So I intend to focus primarily on the personnel side.
    I found it close to shocking to think that we have only 
filled 47 of 77 USAID positions in Kabul, and I need to have 
that in some detail, explained to me. And by the way, this 
isn't lobbing stones here. We're just trying to understand what 
is going on, and I'm going to say to you part of my concern has 
been that when we were in Iraq just very recently, we learned 
that in the northern province, that Mr. Bremer's staff person 
there was supposed to have 75 and he only had 15. He needed 60 
and when the Marines left, he said he needed another 60. And 
it's kind of in the same issue of concern.
    These are extraordinarily important positions. So sorry for 
the long explanation, but walk me through that.
    Mr. Marshall. We share your concern, Congressman. We need 
to get staffed up. We have work to do. We have unmet needs. The 
problem in Afghanistan, I can give you the breakdown. I shared 
some of this with your counsel a few minutes ago. On the 
direct-hire side, we have 7 out of 10 individuals in place.
    Mr. Shays. Slow down just a little bit; 7 out of 10 where?
    Mr. Marshall. Of direct-hires, of U.S. direct-hire 
positions that have been authorized, 7 out of 10 are in place. 
And this, again, alludes back to the different categories of 
our work force; 7 out of 10 direct-hire authorized positions 
are filled. We have personal services contractors, USPSCs; 13 
out of 17 of those positions are filled. The gap occurs on the 
Foreign Service National side. Much of our work force, as you 
know, is comprised of residents of the countries we do business 
in. Only 10 out of 50 authorized FSN positions have been 
filled. The gap there is 40 positions. The reason those haven't 
been filled is we have a very complex, very tight interagency 
security process to do the background clearances, 
investigations on those individuals before they're placed.
    We also have physical--very limited physical space, again, 
due to the security requirements and working with the 
interagency--the other agencies involved to provide adequate 
space and secure space. Because of those limitations we just 
haven't had the room and we haven't had the clearances process 
rapidly enough to fill those positions, but it is a big 
concern.
    Mr. Shays. How long have we been in Kabul? I'm just losing 
track given our focus on Iran.
    Mr. Marshall. Two years.
    Mr. Shays. How long? I'm sorry.
    Mr. Marshall. We've been in Afghanistan for a couple of 
years. The positions--all these positions have not been 
authorized for 2 years.
    Mr. Shays. Walk me through what that means, and then I want 
to know the impact of not filling these positions. What do you 
mean they haven't been authorized?
    Mr. Marshall. Well, some of the positions were authorized 
in previous budget years and----
    Mr. Shays. You mean not authorized by Congress?
    Mr. Marshall. That's correct.
    Mr. Shays. Wait. I can't have two--why don't you step--pull 
your chair up, ma'am. And then if you would state your name and 
title and leave your card with the reporter.
    Ms. Turner. Barbara Turner. I'm the Deputy Assistant 
Administrator for the Bureau for Policy and Program 
Coordination at USAID. For our in-country presence, our 
positions need to be authorized by the Ambassador. We make a 
case each year for the number of positions we need, because 
we're required, especially in Afghanistan, to be within the 
Embassy compound. The Ambassador makes those sets of decisions 
for the number of people. So we do that on an annual basis.
    When we first went into Kabul about 2 years ago, we had a 
much smaller number of people authorized. In particular, there 
was a question about the local-hire Foreign Service Nationals 
that would be permitted in the Embassy at all, and so those 50 
were not authorized at that time. I think there might have been 
only two or three. I don't have the exact number with me today. 
I can find that.
    Only in the last year have these additional numbers been 
approved as a part of the fiscal 2003 budget and as a part of 
the fiscal 2003 discussion with the Embassy for approval.
    Mr. Shays. Stay there just a second.
    Mr. Marshall, 7 out of 10 direct-hires, I assume these are 
folks that are in the primary administrative functions, are the 
top administrators of the program.
    Mr. Marshall. These would be career Foreign Service 
Officers.
    Mr. Shays. How many were authorized last year?
    Ms. Turner. Six were authorized last year.
    Mr. Shays. And how many of those were filled?
    Ms. Turner. They're all filled at the present time. I don't 
know the dates they were exactly filled. We can find that for 
the record.
    Mr. Shays. Walk me through, if you would, either one of 
you, the challenge you've had with the foreign nationals, and 
then I want to know the consequence of being three short in 
direct-hires, four short in--and the other one is--the 13 out 
of 17, what are those hires?
    Mr. Marshall. U.S. personal service contractors.
    Mr. Shays. So these are contractors?
    Mr. Marshall. That's right.
    Mr. Shays. The impact of that and then the 10 only out of 
50. Walk me through first the 10 out of 50, why we're so short 
there, and then the consequences of not having full complements 
in each of these three areas.
    Mr. Marshall. Sure. In the first case, it's finding the 
right skills, individuals in those countries, foreign nationals 
who are residents of Afghanistan who have the sets of skills we 
need. These are people with economic development, humanitarian 
assistance, the full scope of our programmatic expertise.
    In addition to having limited supply of those skill-sets, 
there's a security requirement, and they have to pass muster to 
make sure they are the kind of people we'd want to hire.
    We also have limitations on building space, office space, 
where we can set up work stations in safe areas for these 
individuals, and that whole security requirement is something 
that's worked through an interagency process with ourselves and 
the State Department and the other agencies, the part of the 
reconstruction team. And we don't always have control over 
that, but we do our best to articulate our needs and work 
through the interagency process to accommodate our needs. Those 
are constraints, though, that are not always under our direct 
control.
    Mr. Shays. So now tell me the consequences.
    Mr. Marshall. We're understaffed.
    Mr. Shays. I know that. Tell me the consequences of being 
understaffed.
    Mr. Marshall. Well, our program objectives aren't being 
fulfilled to the degree that they would be if we were fully 
staffed and fully operational.
    Mr. Shays. As a Peace Corps volunteer, I'm struck by the 
fact that--well, let me back up a second. How many of the seven 
speak the native tongue in Afghanistan?
    Mr. Marshall. I don't have that information.
    Mr. Shays. Do you know?
    Ms. Turner. I don't know.
    Mr. Shays. You don't know on any of them?
    Mr. Marshall. We could find that out for you.
    Mr. Shays. Why don't you have someone call up now and 
report so we can know during this hearing how many speak it. 
OK?
    Mr. Ford, tell me what you think the consequences are. Tell 
me what you think these numbers, 7 out of 10, 13 out of 17, 10 
out of 50. Does this relate to your report directly, and then 
tell me the consequences.
    Mr. Ford. Well, first of all, I want to acknowledge that we 
did not include either Iraq or Afghanistan in any depth in the 
report that we just released. We visited 6 countries, but 
neither of those----
    Mr. Shays. Would you identify those countries.
    Mr. Ford. We went to Egypt, Mali, Senegal, Ecuador, Peru 
and the Dominican Republic.
    So, you know, I don't know the circumstances there. I think 
my concerns would be from an oversight point of view 
particularly with the shortage in Foreign Service Nationals who 
can speak the language. I'd be concerned whether they--we can 
effectively oversee what's going on there, but I don't have any 
direct knowledge over the particular programs at this point.
    Mr. Shays. All right. I'm happy to give you time, Mr. 
Turner.
    Mr. Turner. In reviewing the terms that we have, one of my 
concerns has been in the area of the foreign personal service 
contractors that USAID is employing. If you look at the reports 
that we've received concerning the work force shaping, the lack 
of necessary skills at USAID for managing contractors for 
outsourcing work and then you compound that with the fact that 
60 percent of your work force currently are foreign personal 
service contractors, you really get to the heart of whether or 
not USAID is going to be able to achieve its goals. And the 
goal specifically that I'm concerned about is that there is a 
nexus in your operations between the U.S. relationship within 
countries, with individuals and with those countries that's 
separate from just a programmatic goal of democracy or any 
other issues. I mean, we can put a very impressive list of the 
benevolent goals of USAID to achieve in other countries, but if 
that does not have a direct nexus or connection between 
promoting relationships with the United States, the goals are 
hollow. They don't achieve the obvious reason why those 
programs are funded.
    A greater reliance upon foreign personal service 
contractors, specifically where they're not being appropriately 
managed, means that the communication of the message of the 
U.S. support for these programs can be lost. In other words, in 
some areas, you may be empowering individuals where the receipt 
of their services are acknowledged only at the foreign personal 
service contractor level and not at the U.S. level, that the 
relationship would not be enhanced between the United States 
and the host country in which you are conducting activities.
    I served as a mayor for two terms and my city participated 
in USAID programs. We were a recipient of exchange personnel. 
The Dayton Peace Accords occurred in the city of Dayton, those 
negotiations. So the USAID and their efforts in Bosnia brought 
some Sarajevo police to meet with our police to learn on crime 
homicide detecting, things like that, crime solving, crime 
fighting.
    So I certainly support the overall goals that you're trying 
to achieve, but I see this as a glaring hole that I'd like you 
to comment on, because I think this diminishes what we 
obviously need in promoting relationships with the United 
States.
    Mr. Marshall. You're really getting at the impact of our 
message and our branding, to what effect are we making contact 
with the--with foreign countries on the man-on-the-street 
level, and that's something we're very concerned about. We have 
efforts in our--through our communications team to develop a 
more effective branding strategy and to communicate that these 
are gifts indeed, that the people of the United States care and 
to communicate at the grassroots level in these countries. So 
that's something we're very concerned about and trying to 
address as best we can.
    Mr. Turner. Because just beyond communication, though, it 
goes to the heart of--I mean, it's not just having a 
communication plan. It is something that needs to be managed 
from inception through implementation, and I see in the 
materials that we have here that's something that you currently 
don't have the ability to do.
    Ms. Turner. I wonder if I might just comment a little bit 
further on that, because there's been a dramatic change at 
USAID since September 11, 2001. Afghanistan is exactly the 
perfect microcosm of that. In Afghanistan prior to 2001, we had 
no U.S. Government presence. We actually had no Embassy. We had 
no USAID at all there. After September 11th you'll recall we 
went into Afghanistan, both with troops and with USAID.
    We had to build up a Foreign Service National Corps from 
zero, which is difficult, but around the world--we usually have 
a strong Foreign Service National Corps and build that up. What 
we are suffering from after September 11th, however, is an 
incredibly heightened security situation. Obviously we're 
benefiting from that as Americans in our Embassies, but in many 
countries, including in the past in Afghanistan when we were 
there many years ago, we were not physically located in the 
U.S. Embassy. We were outside of the Embassy, so we were 
allowed to have lower levels of security clearances. We had a 
lower security presence. Of course we had USAIDs employees 
targeted because of that and we've now had to move into Embassy 
compounds wherever possible and especially in places like 
Afghanistan where security threat is high.
    That means that it's much harder to hire Foreign Service 
Nationals in the number that we need and as rapidly as we need 
in Afghanistan. So to go from zero to 50 in really less than 2 
years where you have to get security clearances, training--and 
you have to find space within a packed Embassy. It's really 
made it very difficult for us, and we're really concerned 
ourselves looking at that situation as to how we still build on 
those fabulous local employees who do work very closely with 
us, who are an important part of our understanding both 
culturally, politically, but also from an oversight 
perspective, the people who really go out and find the problems 
directly because they speak the local language--the culture. I 
just think this is something we're aware of, working on it. 
Afghanistan is one of our most difficult cases at the present 
time.
    Mr. Turner. Mr. Marshall, if you could elaborate a little 
bit more on the need. I mean, obviously, you said we're going 
to work on it, we're going to work on a communications plan. 
This has not been--I mean, this goes to the crux of the heart 
of the purpose of your organization, and the--I guess I would 
like to hear a little bit more from you as to how you see your 
organization and its role in promoting relationships with the 
United States versus just process-wise and functionally 
executing the task set forth in your contracts that you're 
outsourcing.
    Mr. Marshall. Well, as you say, it gets to the crux of the 
program mission. This gets well beyond the human capital 
management challenges of the Agency in staffing and identifying 
skill-sets and effectively delivering foreign assistance 
through people, but of course it's critically important, and 
it's something that we're aware of and addressing as 
effectively as we can.
    Barbara, would you like to take a shot at that? Barbara 
Turner represents the program policy side of the Agency. I 
represent the administrative side of the Agency. The question 
you're getting at is really more of a program policy issue.
    Ms. Turner. There's a variety of things we have underway. 
In fact, we--just as we speak right now, there's a conference 
going on in Eastern Europe with what we call our local public 
affairs officers from Eastern Europe including Bosnia who we've 
been training and working with to try to have in our USAID 
missions better communications, locally in the country, about 
what USAID is doing.
    We have not been a very good PR firm. We're kind of 
operational people who go do things and we've been trying to 
develop within countries the capability to actually communicate 
with the people the----
    Mr. Turner. If we could just stop there for a second. You 
just said we're operationally focused, and that's--and in 
reading these materials, the issue of staffing skill-sets, work 
force shaping, clearly the element that you get is how it 
impacts issues of operations, but it also impacts the issue of 
the overall policy of USAID, and that's why I asked the 
question is because if you answer our questions focusing only 
on how do we get the function of these programs to work through 
work force shaping and work force planning without a large 
component being how does this relate to and what are our work 
force shaping goals need to include to make certain we achieve 
the goal of promoting relationships with the United States, 
we're going to have done a whole lot of good without having any 
of the relationship building that I believe USAID is about.
    Ms. Turner. We agree with that, and we are working both to 
improve our communications locally and to train our own staff 
in better communications. For the first time this year, we've 
developed a joint strategic plan with the State Department. So 
we might look both at how we promote it, as how the State 
Department as well helps us promote what we are doing in the 
country with the leaders and the contacts that the State 
Department has.
    We do, indeed, recognize this is an issue. We are working 
toward that. One of the things that we also are concerned about 
in terms of the number of Americans overseas, they also--the 
technical staff we have do a lot of good in promoting knowledge 
and know-how from the United States to those countries and 
linking cities, universities, NGO's and other groups in the 
United States there. To the extent that our budget doesn't 
accommodate additional staff and the right kind of skills for 
those staffs, we're very concerned about that, and that needs 
to be a significant part of our work force planning.
    Mr. Turner. Mr. Chairman--Mr. Ford, do you have any 
comments on that?
    Mr. Ford. Well, I think we have some concerns. If you look 
at the numbers, the number of U.S. direct-hires overseas has 
declined significantly in the last 10 years. Those are the 
people who are supposed to represent U.S. foreign policy 
interests for AID overseas. They're the ones who provide the 
leadership. They're the ones who provide the institutional 
knowledge, provide the mentoring to staff overseas to make sure 
that they gain experience, and I think our concern is that the 
Agency, through the process they're going through now, needs to 
clearly identify whether they've got the right numbers of 
people there to carry out that function. I can say anecdotally, 
based on years of working on AID projects from GAO's 
perspective, there are many instances where missions overseas 
appear to be understaffed from our direct-hire perspective, 
that people are swamped with administrative tasks. They don't 
get out as often as they would like.
    I've had several personal cases where GAO team would come 
out and we'd be going out to see something and they wanted to 
tag along because they never get a chance to go out very often, 
and it provided a basis for them to say, well, watch the GAO 
guys, but at the same time they get to meet some of the local 
people they're supposed to be interacting with.
    So we have a general concern about it, and we hope that 
their new plan that they're working on now is going to address 
this.
    Mr. Shays. Thank you. We're going to have staff ask some 
questions to make sure that we are covering the areas that we 
need to cover, but I want to walk through a few things.
    GAO has noted that USAID has not integrated strategic goals 
and objectives into a comprehensive work force, and I need to 
know why we don't have a strategic work--first, is it true, and 
second, if it is true, why don't we have a strategic work force 
plan?
    Mr. Marshall. Well, we are approaching the requirements of 
the President's management agenda human capital initiative, 
which includes work force planning as a central component. But 
there's more to it than just that; and the nexus needs to be an 
integration between the Agency's strategic planning process and 
the work force planning process so that the needs of the work 
force are being driven by the programmatic needs of the Agency. 
And as Barbara Turner just described, we are in a new process 
this year of doing a joint strategic plan with the State 
Department. That information is driven down into our work force 
planning needs.
    We have taken a few steps toward doing what's meant by work 
force planning, and that is we're doing some right-sizing 
initiatives. We've developed a template for rationalizing our 
overseas work force, the number of assignments by country, the 
ratio between staff and headquarters. We're now starting to 
look at how we can do business differently from regional 
platforms. We're initiating our development readiness 
initiative.
    We have in place E-world which is an electronic work force 
reporting system that's captured most of the elements of our 
work force; and so these are all tools or pieces of a 
comprehensive work force planning system. There are a couple 
more pieces that are under development we expect to get in 
place within the next year, but from starting from where we 
were, sir, when this became a crucial issue in the last 
couple--when it really became a front and center issue in the 
last couple of years, you know, this isn't something that you 
can put in place overnight.
    We're making the transition from being an agency coming out 
of the 1990's where the focus was on--our HR apparatus was 
focused on downsizing and outplacement of employees to 
completely repositioning into a growth mode where recruitment 
and leadership development and work force planning, training, 
all of these capacities are being almost reinvented from 
scratch.
    We're trying to develop, as we described in the testimony, 
a surge capacity so that we have the bench strength to meet new 
rapidly evolving needs, and a float capacity, and these are, 
again, pieces of the puzzle that we're putting together. But 
we're still several months away from having a comprehensive 
work force planning system in place.
    Mr. Shays. When do you intend to have it? Several months is 
what?
    Mr. Marshall. Within--well, we'll have a couple more pieces 
within the next couple of months, and I would expect by the end 
of the year we will have a pretty complete system in place.
    In the meantime, we are continuing to give priority----
    Mr. Shays. I don't think it hurts to be more specific. You 
know, specifically, when is it going to happen?
    Mr. Marshall. Well, the three pilots that I mentioned on 
global health work force, procurement and human resources will 
be completed by the end of this year. The entire agency, 
though, that's the rest of the puzzle, and it will take several 
years to get a complete work force planning analysis completed 
and all the pieces in place.
    Mr. Shays. Because I don't do that kind of planning, I 
don't know why it would take several years. Explain to me why 
it should take several years.
    Mr. Marshall. Well, there's a lot of analysis that needs to 
be done. You begin by examining your as-is work force. You 
inventory all your employees, and, again, we have multiple 
categories we're looking at and these 13 different 
classifications of employees, and we now have a system in place 
that's captured most of those individual employees, and we 
flesh out the system with information on their skills, the 
requirements of our Agency, this is where the strategic--it 
becomes integrated with strategic planning.
    So we identify what are the emerging needs, what are the 
as-is competencies we have, what are the gaps, and then we 
develop strategies to address the gaps by either recruitment or 
training or tapping one element of our work force, contractors, 
outsource, in-source, a lot of----
    Mr. Shays. If you were to hire the consulting firm 
MacKenzie, would they take 2 years, or what would they take?
    Mr. Marshall. It all depends on funding, Congressman. We 
could accelerate this more rapidly if we had funding to pay for 
it, but you're talking about a multimillion dollar effort with 
a firm like MacKenzie.
    Mr. Shays. So are you doing it in-house?
    Mr. Marshall. A combination of in-house and contractor 
resources.
    Mr. Shays. Because you use a lot of contractors, so it just 
surprises me you wouldn't use a contractor in this case.
    Mr. Marshall. We are using contractors. We don't have these 
competencies in-house. We're using what we can do in-house, but 
there's a skill-set here that's missing, and frankly, this is 
something we need to do a better job of recruiting for and 
institutionalizing in our HR.
    Mr. Shays. Am I getting a feeling that--because you used 
the word you were focused on operations. Am I to get the 
feeling basically your folks just don't have the time because 
they're overworked, so they're not focused on the more long 
term?
    Mr. Marshall. We've had so many staff cuts over the last 10 
years, that our HR office was pretty much stripped to the bone, 
past the bone, and we have so many people that are just focused 
on--just on outgoing operations, that we don't have the 
capacity to step back and do the analysis and the long-term 
strategy that this kind of work requires.
    Mr. Shays. Let me just respond to that. You were cut back, 
but you made decisions that you would cut back in the areas 
that you described. You didn't have Congress necessarily saying 
you had to cut back your personal--your resource areas.
    Mr. Marshall. I wasn't there when those decisions were 
made, sir, but I think that's a fair assumption, yes.
    Mr. Shays. According to you all, the Agency is having 
trouble attracting staff to those posts where the conditions 
are the most difficult, like Afghanistan and Iraq.
    Mr. Marshall. Yes.
    Mr. Shays. And do you have the capability to require staff 
to move to more pressing regions and difficult areas?
    Mr. Marshall. Yes, we do.
    Mr. Shays. And what does that mean? You just tell them?
    Mr. Marshall. We can direct reassignments, yes.
    Mr. Shays. And if they don't want to go, they have to 
leave?
    Mr. Marshall. Yes. They----
    Mr. Shays. Do they have an appeals process, or what do they 
have? Why don't you step up. Maybe you could exchange seats 
there.
    Ms. Depp. Rose Marie Depp, Chief Human Capital Officer. 
Yes. We have, under the Foreign Service Act, the ability to 
direct assignments. As in any government agency, management can 
assign work. All Foreign Service Officers sign an agreement for 
worldwide availability.
    The change in recent years is because of the human capital 
challenge. In the past we were pretty much able to match 
employees' first choices for assignments with receiving 
missions, but as we have more and more challenging assignments, 
we are having to direct employees to non-preferred bidding 
choices. But we do have the ability to do----
    Mr. Shays. How often have you used this power in Iraq and 
Afghanistan?
    Ms. Depp. In Iraq and Afghanistan, we've been very 
fortunate with volunteers. Because it is a 1-year tour, we are 
on a continuous recruitment mode where we continually advertise 
and actually keep a roster of all individuals that have 
expressed willingness or interest. So to my knowledge, I could 
stand to be corrected on this, to my knowledge, we have not had 
to direct any assignments.
    Mr. Shays. Mr. Turner, do you have any questions you want 
to ask?
    Mr. Turner. It's almost asking the same thing over again. 
It just strikes me, Mr. Marshall, that when you say that 
because of the pressing nature of the work that you have to do, 
you don't have the ability to put in place the proper 
procedures for planning. It seems to me that basically what 
you're saying is, is we're going to continue to provide 
services that don't meet our overall goals, because we're not 
going to take the time to do that.
    It just seems as if it's not a priority, and I think the 
thing that's being missed here, which is why it's so important 
for this hearing, is that your organization is not going to be 
effective in delivering the services or the goals of the United 
States if its view is we don't have time to strategically plan 
to make certain that we achieve or function in the best way. 
It's like saying, well, 75 percent is OK as long as I complete 
the test, and the opportunities lost, both to your agencies and 
to this country, is huge; and when we are dealing in an 
environment where every day the question comes up how is the 
United States perceived in foreign countries, the concept that 
your answer would be we're too busy to plan to be effective is, 
I think, you know, shocking and disturbing.
    Mr. Marshall. I appreciate your concerns.
    Mr. Shays. Would you talk through the mic. I'm sorry, Mr. 
Marshall.
    Mr. Marshall. I appreciate your concerns, Congressman, but 
it's not--I would take issue with the conclusion that we don't 
take this planning seriously. We take it very seriously. We 
take all of our requirements around the world seriously. We 
take Iraq and Afghanistan extremely seriously. We take the HIV 
AIDS epidemic extremely seriously. We take disaster recovery 
efforts very seriously. This is an agency that has a limited 
capacity of human capital.
    Mr. Turner. Let's pause right there. Your budget in fiscal 
year 2002 was $10 billion. Correct?
    Mr. Marshall. Roughly.
    Mr. Turner. All right. So when the answer is yes and I hear 
that we don't have enough human capital, that we don't have 
enough ability to plan, and then you list for me operationally 
a bunch of tasks that need to be done and diminish the 
importance of planning, I believe that we have a huge miss in 
the overall foreign policy goals of the United States. If 
you're telling me HIV AIDS is important and therefore you have 
to get on that, but you don't have time to plan so the overall 
goals of the United States are achieved, I question whether or 
not your agency is taking the adequate role in serving--as we 
have discussed and you have knowledged, its core function.
    Mr. Marshall. Let me try and answer that, Congressman. We 
take the planning extremely seriously. When Mr. Natsios arrived 
in 2001, he found the systems to be completely eroded and 
dysfunctional. When I arrived in December 2001, there was no HR 
Director. There was no HR Deputy Director in place. It took 6 
months to recruit an HR Director. It took another 9 months or a 
number of months to recruit an HR Deputy Director. That's the 
leadership on our HR----
    Mr. Shays. Are those political appointees?
    Mr. Marshall. No, sir. Those are career appointments. And 
the staff that was running the HR organization was dedicated. 
They were answering the mail, keeping the gears of the process 
going, but there was no in that HR office leadership at the top 
level in place to redirect and prioritize and do the work force 
planning that's required. That's in place now. We're giving it 
all the emphasis we can. We're bringing in contractors. We're 
recruiting for the expertise that we lost.
    But Rome wasn't built in a day, sir, and a turnaround of an 
organization in a state of dysfunction that USAID was and has 
been doesn't happen overnight either. This is a 4 or 5-year 
project to turn around an agency at this----
    Mr. Turner. And why would that be? Why would it be? You 
know, and I hate to keep citing the fact that I was a mayor, 
but I can tell you that you can go to any city or any other 
organization that has significant do-it-now goals to achieve 
and nobody is going to tell you it's 4 or 5 years, because, you 
know, the world changes in 4 or 5 years. In 4 or 5 years, any 
planning that you're going to be doing is going to be, all 
right, let's start this process again.
    Why would it possibly, with $10 billion, take 4 or 5 years 
to accomplish something that goes to the crux of whether or not 
you're going to be successful? Because, let's see, 4 or 5 
years, we're talking 40 to $50 billion more that would be spent 
while you're beginning the process to plan to be effective.
    Mr. Shays. If the gentleman would yield.
    The one thing I can't do and maybe Congressman Turner would 
agree, I know that looking to the future and planning has to be 
one of the most difficult things and I know sometimes in my own 
staff we know that we're putting out fires and we're not 
planning ahead, so, Mr. Marshall, I don't think we're lobbing 
bombs here.
    We're trying to understand something, but what I think you 
may not realize from what we've heard you say is that you are 
so overworked, this is what I am basically hearing, that office 
was in a disastrous state. That's kind of what your testimony 
is that I'm getting, that many people contributed to that, 
maybe even Congress. You've been off since December 2001, and I 
get the feeling like you're trying to keep your head above 
water so you don't drown, and yet you know conceptually the 
importance of planning, but you are basically saying it's going 
to be sometime way off in the future that it's going to be 
done. That's the feeling I'm getting, and I can understand why 
that could be the case in one sense, but in the other sense, if 
it's $40 billion being spent and particularly given Iraq and 
Kuwait, and I know, Mr. Ford, you haven't looked at these two 
countries, but I would have thought we would have been 
oversubscribed, not undersubscribed.
    Given the importance of the work that we're doing there, I 
mean, this is where someone said to me just recently it must be 
an extraordinary time to be in Congress because the stakes are 
so high. I think the stakes are extraordinarily high in Kabul 
and in Iraq, and so I think that's why you're here and, Mr. 
Ford, as you hear this, what do you think the solution is?
    Mr. Ford. I don't work for AID.
    Mr. Shays. No, no. That's not an answer at all. I just want 
to interrupt. This is why we hire you, not just to be critical 
but to say how you walk your way out and let me say something 
because I know you want to say something. This is not uncommon 
with other government agencies, but where have the successes 
been in the past, how do we help Mr. Marshall and others move 
along more quickly?
    Mr. Ford. Well, I think, first of all, the first point is 
you have to have leadership and you got to make it a priority 
and you got to put the resources in to get the job done. I 
don't know if that takes 3 or 4 years or not. You know, we made 
the same recommendation that we're making in this report 10 
years ago to AID.
    Now, they went through a difficult time for the last 10 
years, but I find it hard to believe that they couldn't set 
aside some time during that timeframe to have undertaken the 
kind of----
    Mr. Shays. Well, they didn't.
    Mr. Ford [continuing]. They should have done. I don't think 
it should take another 10 years to do that.
    Mr. Shays. Come on, let's be precise here. They're not 
saying it's taking 10 years.
    Now, really, I want you to be a little more precise and 
we're not talking about the last 10 years because we know it 
happened and Mr. Marshall wasn't there 10 years ago. He's 
there, now, though, so it's on his shoulder.
    What would you be recommending they do? First off, should 
it take even a year?
    Mr. Ford. You know, I would--I'm not an expert in 
personnel. I think they could do it in a year, yeah. What they 
need to do is they need to identify the core competencies for 
all of their work force. They got a pilot on the way where 
they're looking at three functions in AID. I don't know why 
they couldn't expand that effort to include a wider range of 
the people that they work for, so I think--you know, I don't 
think it should take that long, certainly 4 or 5 years, to do 
the whole analysis that they need to do. I think they got all 
the right steps in place, I think they've got the right 
concepts in place, based on the models at OPM and looking at 
the government as a whole, but they've got to implement the 
analysis and they've got to move on with it.
    Mr. Shays. Mr. Marshall, what can we do to help speed up 
the process?
    Mr. Marshall. Well, we have discussions under way within 
the administration, to--regarding the OE requirements that it 
takes to get this work done. We have in our HR shop presently--
--
    Mr. Shays. Are you saying the budgetary requirements?
    Mr. Marshall. Our operating expenses.
    Mr. Shays. Right.
    Mr. Marshall. That's the constraint we're under.
    Mr. Shays. I'm sorry to interrupt, but so I'm understanding 
you, is OE funding consulting services, is that----
    Mr. Marshall. For managing consulting services of this 
type, yes, that would come out of operating expenses, yes. 
That's a very constrained resource in our environment, and it 
funds our outside expertise, our IT, our administrative 
personnel. We have one work force planner on the staff now. 
We're just acquiring the tool. We have procurement under way, a 
work force planning tool, we have allocated some money for 
consulting expertise. If we had more, we could move faster.
    Mr. Shays. OK. What I would like to think is that when you 
go before the Appropriations Committee, you basically say we 
have an agency that was in meltdown, we had a chair report in 
the early 1990's that said we have this problem, we still have 
this problem, and then I blame Congress, frankly and fully, and 
if I were running the organization, I would be trying to take 
money out of the account and pressing the envelope because I 
would feel it is so important.
    Mr. Marshall. I understand. We have so many mandates and so 
little funds. We're always robbing Peter to pay Paul to address 
priorities. You, too, Congressman. It's a matter of priorities. 
In our Federal agency, everything is urgent, and everything is 
a priority.
    Mr. Shays. I think that's a fair comment and I think what 
we're going to do is get together with you privately. We're 
going to have a candid conversation with you about how you sort 
that out, because I do think everything is a priority right 
now. I do think that's fair.
    I think that you are--but I also think this: I think it's 
one of the most exciting jobs you can have in government, 
frankly.
    Mr. Marshall. It is. Yes, indeed.
    Mr. Shays. And I know as a former Peace Corps volunteer, 
there are a lot of Peace Corps volunteers who would love to be 
doing this work, and if we're not able to hire younger folks 
along the way and we've got a work force--gosh, given that I'm 
in higher ranks than that, we have very competent staff at 
USAID, but we need some younger folks as well, and I'd like to 
see how we resolve that. Should I go to staff or do you have 
another comment? So at this time I will go to our professional 
staff.
    Mr. Costa. Thank you, Mr. Chairman.
    First question for both of you, if I could.
    What, exactly, are you doing to identify core competencies? 
What's the importance of that, and how do you ensure that 
you're hiring people with the skills you need now? Why don't we 
go with Mr. Ford first and then Mr. Marshall?
    Mr. Ford. I think that the key is you got to go through a 
process and I think Mr. Marshall's already described it well. 
You have to know what kind of skills you need first, so you 
have to identify what your requirements are. You have to know 
what you already have in place, so you have to do an analysis 
of what you already have. Then you got to see what the gap is 
and then you got to find a development strategy to develop that 
gap. Then you have to have a system after you hire the people. 
So you make adjustments as you go along. So as you find some of 
those skills are not necessary, you make adjustments. That's 
basically the process that I believe AID is now trying to get 
to.
    Mr. Marshall. That's right, and we're beginning to baseline 
those existing skill sets and identify the gaps, and the 
initial organizations we're piloting are: Global Health Bureau, 
again taking into consideration the sensitivity, the urgency of 
the HIV/AIDS response, we're looking at procurement; and we're 
looking at HR. Because, again, getting back to Congressman 
Turner's concerns, do we have an organization, the capacity 
within our human resources organization, the capacity to 
conduct work force planning in a systematic way. And on the 
implementation side, our procurement organization, are we 
providing contract administration oversight, and is our 
contract process working or are our business systems and 
procurement as responsive to our needs in the field as 
possible?
    Mr. Costa. And what are you doing now to handle skill gaps 
in the existing work force? Is there a training program under 
way? State has a little more capacity now that they're building 
on what USAID does not have yet.
    Mr. Marshall. They do. Our training budget has been cut to 
the bone, was cut to the bone. We requested significant plus-
ups in the past couple of years. We'd like to double it in the 
next couple of years to get to the level we think we need.
    We are recruiting through our new entry professional, our 
mid-career entry, we are looking for the skill sets that we 
need in the most critical areas, and we're instituting our IDI 
program to get young talent in at the entry levels, and so 
we're doing as best we can, work force planning, again in kind 
of an ad hoc way, focused on the needs that we're most aware 
of, but the systematic process that we're putting in place, 
piece by piece, is over the next year or so.
    Mr. Costa. Talk a little bit about surge capacity. I was 
struck by both your testimony and GAO's testimony. One of the 
things that struck me is that you say that it has merged more 
with the State Department.
    Has there been any discussion in making assistant 
management, contract management, into a cone in the State 
Department, and so staff from State and USAID can travel freely 
between both organizations. Do you think that would help at all 
with creating the surge capacity for USAID? Is there a 
discussion of that and what are both of your thoughts on how 
that would work, if it would work, and what problems might----
    Mr. Marshall. Those discussions with the State Department 
are just beginning, and that's a good example that we need to 
look at. If you're talking about procurement expertise, it's 
possible that we could work with each other, although our 
procurement requirements for development assistance, 
humanitarian assistance are pretty different from theirs. So I 
think that could be a long term fix. Cross-training and other, 
you know, cross-agency and training initiatives would have to 
be done to make sure that would work, but it's a possibility.
    Mr. Shays. Let me just interrupt here to have you react. 
When I've gone out in the field, and I get out in the field a 
lot, I am struck by the fact that the USAID folks want to tell 
me that they're not part of the State Department. The company 
culture must be very different and they don't like the thought 
that they are viewed as an instrument of our diplomatic corps.
    Maybe I didn't say it's an instrument, but they want me to 
know that they are very definitely separate but the only 
difference is that they come up with the unified budget--excuse 
me, not unified budget, but they are basically under the 
auspices of the State Department.
    Can you react to that?
    Mr. Marshall. Well, there is that, too. Yes, the cultures 
are different and they had a history of some cultural 
differences, you might say, and conflicts, but I think that 
varies too from post to post. I think at a lot of locations 
they work very collegially together, although they do have 
distinct competencies and programmatic missions.
    Mr. Shays. Go on.
    Mr. Marshall. That's the point. They do have their 
differences, but I think they do, in most cases, work pretty 
well together.
    Mr. Shays. Is USAID under the Gramm-Rudman Act?
    Mr. Marshall. Yes.
    Mr. Shays. So when I am told that they are 60 short in the 
Northern Province, they only have 15 instead of 75, are some of 
those 60 short viewed as USAID folks?
    Mr. Marshall. I don't know what those numbers are, sir, and 
I don't know how he's counting.
    Mr. Shays. Probably, not likely. That may be separate. I'll 
find out that.
    Are we getting the number that I asked for?
    Mr. Marshall. Yes, sir, we're asking for that and we'll 
provide that for the record. One piece of information we have 
for you though is that Afghanistan is a non-language country, 
where speaking a native language is not a requirement.
    English works there, so we have some of our employees there 
who do speak English.
    Mr. Shays. English works everywhere, but with all due 
respect, it does, but----
    Mr. Marshall. We understand that several of the local PSCs 
do have the native language.
    Mr. Shays. I mean, given USAID is in the field interacting 
a lot with Afghans and Iraqis in both countries, the ability to 
speak the language is huge, and as it relates to Afghanistan 
there are so many Peace Corps volunteers I run into who have 
wanted to go back to their country it does surprise me we're 
having a hard time filling these positions.
    Anyway, we'll go back to you.
    Mr. Costa. Mr. Ford, if you could talk a little bit about 
integration with the State Department and what that might mean?
    Mr. Ford. Well, first of all, I'm not aware of any formal 
discussions of whether or not that's actually being considered. 
I think the State department, the type of activities that 
they're involved in are--for the most part, are not typical of 
what USAID is involved in, so the skill sets for creating a 
cone I think you'd have to take a hard look at, because I'm not 
sure the Department does a lot of hands-on implementation of 
programs. They have a few programs that I'm aware of where 
they're involved, but for the most part they're not involved on 
the ground, programmatic oversight, as AID employees are.
    Mr. Costa. Thank you. Mr. Marshall, what's the current 
status of E-World? I know it's supposed to be growing out in 
two phases, and the information is supposed to be all done at 
the end of this month; is that correct?
    Mr. Marshall. It is a Web based system. It is up and 
running. We have about 7,700 employees captured in there and 
all elements of our work force, with the exception of 
institutional contractors.
    Mr. Costa. OK. Just for the record, could you just say a 
little bit about what E-World is?
    Mr. Marshall. It's a work force tool that captures the 
numbers, head counts of individuals, of employees, by work 
force element, by country and mission worldwide, organizational 
elements, yes.
    Mr. Costa. And is it up and running now? Are you still 
experiencing problems?
    Mr. Marshall. Yes, it is. There have been some startup 
issues along the way, but it's up and running.
    Mr. Costa. I know you had mentioned moving from other 
locations to staff Iraq and Afghanistan. What's the 
implications for doing that in the countries where those folks 
have come from?
    Mr. Marshall. That's a very good question. Unfortunately, 
too often we're robbing Peter to pay Paul. Unfortunately, it's 
a fact of life for the agency. We do our best, of course, to 
backfill and regroup, and so forth, but it takes a while.
    Mr. Costa. Thank you, Mr. Chairman.
    Mr. Shays. Thank you.
    Go to minority counsel.
    Mr. Rapallo. Mr. Marshall and maybe also Miss Turner. In 
terms of planning for your work force, it would help to know 
the amount and types of funding that AID is delivering.
    In the latest supplemental budget request for Iraq, did you 
at AID headquarters prepare any sort of estimate or analysis or 
proposal for the funding that would be delivered and also how 
the work force would be set up to deliver that?
    Ms. Turner. Yes. For Iraq, specifically, the supplemental 
that just came up last week from the President has $40 million 
in it for what we call the operating expenses of USAID. That 
includes physical infrastructure in the country to house the 
employees, etc., as well as their salaries, and the number of 
the employees, I don't have with me the work force plan, but we 
can provide that for the record. We have put together the work 
force plan for Iraq, which is done in consultation with State 
and OMB for the implementing of that supplemental corporation, 
but it is a pretty good example of the problems that we face. 
Our funding for operating expenses and the salaries that we pay 
are not a part of the $10 billion program. We have a separate 
account that pays for our salaries and occasionally we use--dip 
into the program fund to provide contractor salaries, but we're 
not allowed by law to pay any of our American direct hire 
salaries out of the programs. It's all out of the operating 
expense budget. That budget has been relatively static for 
quite a number of years. We did request in fiscal 2004 an 
increase in the budget in order to allow us to hire at least 50 
additional overseas officers, but that did not anticipate the 
increase in Iraq at that time.
    What has happened over the years is, as there is a 
supplemental for HIV/AIDS, for Hurricane Mitch several years 
ago, for Afghanistan, for Iraq, a one-time only amount of money 
is put in to transfer from program to operating expenses to 
allow us to cover those salaries for that year, but it really 
is a negative incentive to work force planning because it's 
one-time only. You don't know how many years you'll have it, so 
looking ahead, it makes it impossible to estimate the budgets 
that you're going to have available.
    For fiscal 2005, we have submitted to the Secretary of 
State and the Secretary of State has transmitted to OMB a 
significant 25 percent increase in our operating expense 
account, almost entirely dedicated toward additional staff that 
we need to bring in. It is not yet through OMB and presented to 
Congress, but it is the only major increase with the exception 
of HIV/AIDS outside the supplemental that we have requested, 
and it was the only 25 percent increase that the Secretary of 
State sent forward to OMB as a part of the entire State 
Department foreign operations budget. So we have recognized it 
as an absolutely critical priority that needs to be ratcheted 
up, ratcheted up significantly, and every time there's a 
supplemental, last year's supplemental for Afghanistan and 
Iraq, we had that in the HIV supplemental, we had money in for 
that for obvious reasons.
    Mr. Rapallo. Let me just ask a little about the process for 
the supplemental. Prior to the supplemental coming to Congress, 
did AID itself, headquarters, work up a sort of analysis 
proposal on the amount of funding AID believed would be 
necessary in Iraq?
    Ms. Turner. Yes, we did.
    Mr. Rapallo. And did you submit that to OMB?
    Ms. Turner. Yes, we did.
    Mr. Rapallo. And what happened to that?
    Ms. Turner. It was reduced by about 50 percent as to what 
we sent forward.
    Mr. Rapallo. Why was it reduced or what reasons were given?
    Ms. Turner. The reasons were that they didn't think we 
would be able to, for a variety of reasons, put that many staff 
in country and hire as many local staff as we got.
    Mr. Rapallo. So currently the supplemental, is it $1.5 
billion that would be delivered through AID?
    Ms. Turner. It's not fully decided. There's $21 billion for 
reconstruction efforts. We estimate at least $1.5 to $2 billion 
will come through AID but the full decisions are not made on 
who will implement each one of those pieces and a complete 
decision between infrastructure, which more likely would be 
done by Defense, and the more software side of the training and 
education that would be done through USAID.
    Mr. Rapallo. So where did that number come from, $1.5, that 
amount? Is it an AID number?
    Ms. Turner. That is an AID number, roughly what we would 
estimate as being under the current arrangement.
    Mr. Shays. Let me just followup and I know you have another 
question, but so we're understaffed in both Iraq and 
Afghanistan. But in addition, given what your request was, 
we're even more underfunded.
    Now, I realize that agencies, we'll always ask what we 
think they need and it's also up to Congress to say what we can 
afford to do, but your testimony basically as it relates to--
which was it, Afghanistan or Iraq?
    Ms. Turner. Actually both, a combination, but it was mostly 
Iraq.
    Mr. Shays. Basically you were looking to do twice as much 
as you are doing or 50 percent more?
    Ms. Turner. We were looking to do approximately, spend 
approximately twice as much, as to what the supplemental came 
up with.
    Mr. Shays. But not just in the supplemental. I think the 
question also related to the original.
    Just so you understand where I'm coming from, I'm wrestling 
as a Member of Congress with the fact that we haven't asked--
and I'm vice chairman of the Budget Committee--we haven't asked 
for a full accounting of the budget expenses in Afghanistan and 
Iraq both in the short term and the long term, and I was 
thinking that if it was the previous administration I would be 
more persistent, so I'm having to candidly look at myself and 
say am I doing my job. So having said that, what I'm realizing 
of course is that you would have to submit what your requests 
are.
    Did you submit both a 1-year request and a long-term 
request for both countries?
    Ms. Turner. No, we did not. We submitted a 1-year request 
for the life of the supplemental. Actually, I think the 
supplemental is proposing 2 years.
    Mr. Shays. Are we talking about the first supplemental or 
the second?
    Ms. Turner. The current supplemental. The first 
supplemental was only a 6-month supplemental, and we were only 
permitted to submit for that what we thought it would take in 
the first 6 months.
    Mr. Shays. The 6-month supplemental.
    Can you tell me did you get 50 percent of what you 
requested?
    Ms. Turner. For the first supplemental we got 100 percent 
of what we requested.
    Mr. Shays. What I'd like is if you would submit the 
original proposal for USAID, if you would provide it for this 
committee.
    Ms. Turner. OK.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] T2392.025
    
    Mr. Shays. This is for the second supplemental, OK?
    Ms. Turner. Yes, sir.
    Mr. Shays. And if that's a problem you need to tell us 
right away; otherwise we'll assume that won't be a problem.
    Ms. Turner. Yes, sir.
    Mr. Shays. Do you have a question?
    Mr. Costa. Yes, one quick question, I think.
    Mr. Ford, you talked a little bit about the operating 
expense account and how originally it was intended to cover the 
cost of doing business, but over time and because of budget 
constraints you say it has essentially started putting things 
that probably should be in the operating expense account into 
the program funds.
    Could you talk a little bit more about that and, Mr. 
Marshall, if you could talk a little bit about what you say you 
plan to do in response to the GAO report? I know the GAO report 
is not quite finished yet, I don't know if you had an 
opportunity to see it, and it's my understanding that both OMB 
and you all agree with the crux of it. If you could talk a 
little bit more about that.
    Mr. Ford.
    Mr. Ford. Yeah, basically, you summarized what our report 
is going to say, which is essentially that in the mid-1970's 
Congress passed some laws which in effect created the operating 
expense account, and the intent back then was that AID try to 
separate out its administrative costs versus its program 
delivery so there would be a clear distinction between what 
we'll call, let's say, overhead versus the actual program being 
delivered.
    Over time what's happened is because it is a separate 
appropriation AID has struggled to try to pay for the 
administrative costs, which it's required by law to pay, which 
is direct higher salaries, rents, utilities, things of that 
nature. They've struggled to have enough money to do that, so 
they've used program funds to help pay those types of costs, 
and over time it's become the--I guess I'll call it a confused 
state in terms of how much money is actually being spent for 
administrative expenses. So what we're going to be recommending 
to AID is essentially to try to clarify that and come up with a 
better, clearer system of identifying those costs.
    Mr. Costa. Thank you, Mr. Ford.
    Mr. Marshall.
    Mr. Marshall. Your question was what are we doing about 
that.
    Mr. Shays. The mic.
    Mr. Marshall. Yes, we read the GAO report and we think it 
was a contribution to the ongoing dialog that we're having 
within the agency and State Department and OMB on the subject 
and we're actively considering alternatives for dealing with 
this issue.
    Now, in the short-term we're working very hard to be fully 
transparent, report all of our costs through OE as well as 
administrative costs that are program-funded, be very up front 
and transparent about that and we're getting the facts on the 
record and considering options and ways of handling it, but 
we're not prepared to endorse any particular proposal at this 
point.
    Mr. Costa. Thank you, Mr. Ford, Mr. Marshall.
    Mr. Chairman.
    Mr. Rapallo. Maybe just one clarifying: In your original 
request, what was the amount that you requested?
    Ms. Turner. The Iraq request?
    Mr. Rapallo. Yes.
    Ms. Turner. I'm sorry, I don't have that with me. I'm 
sorry, for the second supplemental?
    Mr. Rapallo. Yes.
    Ms. Turner. I'm sorry. I need to check that, double-check 
that number, and I'll be happy to provide that.
    [The information referred to follows:]

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    Mr. Shays. I'm going to try to summarize what I've gotten 
from this hearing, and then I want your reaction, and then you 
can make any other comments you want, and then we'll adjourn.
    What I basically think I've learned from this hearing and 
from the report is that USAID has been a troubled agency for a 
long time. In terms of understanding--in terms of having 
resources, in terms of allocating resources in a way that's 
clear, that it has lacked a long term planning, that it has a 
very--a personnel highly qualified but getting older, that a 
large number potentially could retire, up to 70, as we think 40 
may of the 70, and that Congress and others are saying you need 
to have a strategic plan on what your needs are, not just now 
but in the future, and that it is going to take longer than we 
would like because--not because it has to take longer in terms 
of capability, but in terms of resources to--in terms of the 
financial resources to hire internal staff and external 
consulting, to get it done as quickly as it could be done. And 
what I have learned from listening to Mr. Turner is if you're 
going to be spending $10 billion a year and if it's going to 
take 3 or 4 years to do, we are simply not going to be 
allocating resources in an optimal way.
    And what I was thinking as well is that each year we may be 
losing our ability to hire some capable young people that we 
should have hired 3 or 4 years ago, that would now be in the 
stream and learn from these skilled workers. And it explains 
what has been a shocking thing for me to learn, is that what I 
believe is the most important thing in Afghanistan and Iraq--I 
realize, Mr. Ford, this wasn't your focus, but it's where I've 
kind of headed, given that I know Mr. Bremer is understaffed 
significantly. That whether USAID is under Bremer, and they're 
calling that part understaffed, we may even have a bigger 
problem because USAID may not be getting the people in the 
field that they need to. And that, for me, it's calling out 
that this committee needs to be weighing in as fairly quickly 
as possible with the administration that we've got to speed up 
this process and provide the resources. So one thing I intend 
to do is have a conversation with Mr. Kolbe, who's head of the 
funding--of approps--see if he agrees that these resources have 
been requested and are needed and I'll go from there. But our 
committee may also issue some kind of report as well.
    Respond to what I've said, Mr. Marshall, if you will.
    Mr. Marshall. I think that's a fair take there, 
Congressman.
    Mr. Shays. Mr. Ford.
    Mr. Ford. I agree with everything you said and the quicker 
it can be done, the better.
    Mr. Shays. OK. You think the quicker it can be done, the 
better?
    Mr. Marshall. I agree with that, yes, sir.
    Mr. Shays. Well, let's see how we can all work together and 
help you all out and work in the same direction.
    Is there any other comment, question?
    Mr. Costa. No, sir.
    Mr. Shays. Any comments you want to end up with, just to 
put on the record?
    Mr. Marshall.
    Mr. Marshall. No, sir.
    Mr. Shays. Well, we'll close here and adjourn.
    Thank you very much.
    [Note.--The GAO report entitled, ``Foreign Assistance, 
Strategic Workforce Planning Can Help USAID Address Current and 
Future Challenges,'' may be found in subcommittee files.]
    [Whereupon, at 11:33 a.m., the subcommittee was adjourned.]
    [Additional information sumitted for the hearing record 
follows:]

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