Congressional Budget Justification (CBJ): Congressional Budget Justification, FY 2016 | January 2015

Administrative Expenses

(in $ millions) FY 2014 Enacted FY 2015 Enacted FY 2016 Request
Total Appropriation 898.2 899.5 1,250.0
Total Admin Budget 105.0 105.0 108.4
     Human Capital 54.2 55.3 56.3
     Training 1.2 1.2 1.2
     Overseas Operations 14.1 16.7 16.5
     Contracted Services 8.6 9.8 9.6
     Information Technology 12.8 12.7 14.8
     Rent, Leasehold and Improvements** 6.6 1.1 2.2
     Travel 6.3 6.9 6.9
     Other Admin*** 1.2 1.3 0.9

** Please note that the rent costs above differ from new lease justification materials previously submitted to Congress due to the timing of the payments for each year. Clarification is provided in the “Rent” section herein.

*** Other Admin includes funding for translation services, printing, MCC board expenses, representation funds, and other minor administrative expenses.

MCC requests $108.4 million for administrative expenses, a 3.2 percent increase and the first administrative expense increase in four years. This increase will enable MCC to address inflationary pressures that have been building since FY 2012 (heightened by the impact of the FY 2013 sequester), deploy necessary in-country staff for new compacts, and ensure the efficient and effective management of agency operations.

Human Capital

MCC plans to use $56.3 million in FY 2016 for human capital, a 2.9 percent increase from FY 2015. Approximately $0.9 million is due to a net increase in overseas staffing of six full-time equivalents (FTE) as more compacts are signed than completed to maintain a lean in-country footprint of a resident country director and a deputy resident country director.

FTE FY 2014 Current Headcount* FY 2015 FTE Estimate** FY 2016 FTE Estimate**
Washington, D.C. Headquarters 300 300 300
Overseas 21 23 29
Total 321 323 329

* Current headcount provided to indicate the staff being brought on board and funded in FY 2015, including vacancies.

** During FY 2015 and FY 2016, MCC estimates that 6 percent of positions will be vacant at any given time due to attrition with an average staffing level of 282 FTE.

MCC is a performance-based organization, and MCC employees do not receive automatic pay raises when the General Schedule for pay overseen by the Office of Personnel Management is increased, or step increases based on years of service. Employees must work at MCC at least 90 days before the end of the fiscal year to be eligible to receive performance merit increases based solely on the prior year’s performance.

Additionally, MCC provides a standard package of benefits that is commensurate with other U.S. Government entities. Based on prior years’ actuals, total benefits for FY 2016 are expected to cost an average of 27 percent of salary.

Overseas Operations

Overseas Operations ($M) FY 2014 Estimate FY 2015 Estimate FY 2016 Request
Overseas Operations 12.6 14.1 16.5
     Country Allotments 6.6 8.7 10.5
     ICASS 3.8 3.4 3.5
     Other Overseas Costs 2.2 2.0 2.5

While MCC continues to maintain a very small in-country footprint of only two U.S. direct hire staff and three locally engaged staff, the cost of maintaining this staff continues to face upward pressure.

MCC plans to use $16.5 million for overseas operations in FY 2016. While MCC maintains a small in-country footprint of only two U.S. direct hire staff and three locally engaged staff (LES) for compacts, the cost of maintaining this staff continues to face upward pressure.

International Cooperative Administrative Support Services (ICASS) and Capital Security Cost-Sharing (CSCS) costs to support overseas staff are expected to face upward pressure, in part due to the Department of State’s need to maintain and operate newer embassy compounds. Also, starting in FY 2015, the Department of State will implement its new Furniture and Appliance Pool Policy. Participation in overseas posts’ furniture pools will result in significantly higher furniture buy-in costs and subsequently higher ICASS charges for MCC. However, MCC has successfully argued to-date for an exemption of the annual assessment fee because of its short-term (less than seven years) presence in-country.

ICASS, CSCS and other fixed overseas expenses result in an average annual cost of approximately $500,000 to maintain an MCC employee overseas at a U.S. Embassy. Such costs include office space, housing, support services, locally engaged staff, educational allowances and other family costs, home leave, in-country travel, consultation travel, medical evacuations, information technology support, relocation, storage of household effects, and security.

Toward the end of FY 2015 and the beginning of FY 2016, MCC will initiate compact presences in three countries (Liberia, Morocco and Tanzania), entailing costs for relocation travel, shipping, office furniture and equipment, residential furniture, official vehicles, and transfer allowances. Later in FY 2016, MCC will begin to stand up compact presences for four additional countries (Benin, Niger, Lesotho, and Sierra Leone). While seven new presences will be supported, only two compacts (Moldova and Senegal) will be closing their overseas presences during FY 2016 after the compacts are completed in September 2015. Those closings will also entail certain one-time costs, such as relocation charges for travel and shipping, during and immediately after the closeout period.

Other Administrative Investments and Cost Controls

Although human capital and overseas operations comprise 67.2 percent of the administrative budget, MCC is making sound investments and controlling costs in other administrative areas, including information technology (IT) and rent.

Information Technology

MCC plans to use $14.8 million to maintain and invest in IT for FY 2016. The request will support a variety of activities including, but not limited to, the following: 

  • Continuation of steady-state operations and maintenance support, including contract support for all MCC network services, telecommunications, video teleconferencing, end-user support, voice services support, and security operations as well as infrastructure support for mission critical MCC applications, such as the MCC Management Information Systems (MIS), which provides transactional and decision support for innovative outcome-focused grant designs and development of evidence that can be used to improve existing programs.
  • Continuation of software licensing for the MCC Microsoft enterprise agreement and other software required to operate MCC business.
  • Software support services to provide funding for continued applications development and maintenance, to include MCC MIS, MCC Intranet Web, collaboration and reporting leveraging of SharePoint, SQL server systems development as well as a few stand-alone MS Access databases. MCC requires the extensive data available from compact evaluations, compact finances, and MCC financial, contracting, and grant data to analyze and answer important questions about MCC policy and program activities housed in these systems and to harness data to improve overall agency results.
  • Services to support a combined open data, transparency, and knowledge management initiative that makes MCC data accessible and machine readable for both internal and external consumption and strengthens the agency’s capacity to use and learn from evidence.
  • Funding the continuation of MCC program management and project management that will ensure high-quality, low-cost evaluations and rapid iterative delivery or experimentation. This funding includes support for enterprise architecture and capital planning and investment control, another agency-specific need that will significantly improve MCC’s capacity to use or build evidence to achieve better results or increase cost-effectiveness in high-priority programs. This funding includes support for continued publication of MCC data in the International Aid Transparency Index (IATI) in collaboration with other U.S. Government agencies.
  • By the end of FY 2015, MCC expects to consolidate into a single headquarters building with a reduced footprint. New IT approaches to critical services will integrate with the new space plans and will permit MCC to improve services to the business while supporting remote work locations, increased telework and potentially hoteling options. Funding for mobile devices and data supports MCC’s mobility initiative in alignment with the agency’s planned move.
  • Overall IT enhancements will support federal IT goals of fewer devices, more use of cloud approaches and sustainability goals for a reduced carbon footprint.

Rent

(in $ millions) FY 2014 Estimate FY 2015 Estimate FY 2016 Request
Rent, Leasehold and Improvements 6.2 5.2 2.2

As a result of a thorough space needs analysis and a competitive bidding process, MCC will lower its headquarters rent cost by $30 million over the course of its new ten-year lease, which was signed in February 2014, and is anticipated to begin in May 2015. Delays in relocating existing GSA tenants may impact MCC’s anticipated move-in date.

MCC estimates beginning rent payments for the Franklin Court property in the amount of $2.2 million in FY 2016. The full-year rent payments are estimated to reach approximately $5.0 million in FY 2017.