Congressional Budget Justification (CBJ): Congressional Budget Justification, FY 2018 | May 2017

Administrative Expenses

(in millions of $) FY 2016
Enacted
FY 2017
Enacted
FY 2018
Request
Total Appropriation/Request 901.0 905.0 800.0
Total Administrative Expenses 105.0 105.0 102.4
Human Capital 54.3 54.4 54.7
Training 0.7 1.4 1.0
Overseas Operations 11.3 10.0 8.5
Contracted Services 12.5 11.2 10.9
Information Technology 14.3 14.5 13.6
Rent, Leasehold & Improvements 4.5 3.8 6.0
Travel 6.8 9.0 7.4
Other Administrative Expenses 0.6 0.7 0.5

MCC is projecting up to $102.4 million in FY 2018 administrative expenses to support its agency operations and lean workforce of just over 300 Full Time Employees (FTE). Learning from experience is engrained in MCC’s culture, and as such, the agency continually assesses the efficiency and effectiveness of not only its program funding but also its administrative expenses.

In this spirit, and in alignment with MCC’s strategic goals, MCC launched an effort in FY 2016 to enhance the efficiency and productivity of the agency and its workforce. Focused on enabling productive and efficient decision-making and executing strong workforce planning and performance management, the effort has MCC well-positioned to meet the Administration’s desire for a lean, accountable, and more efficient government. In FY 2017 and FY 2018, MCC will implement major efficiency efforts and make related investments to improve knowledge management and performance management systems and practices, while continuing to seek cost-savings through strategic IT and related investments.

Human Capital

MCC is budgeting $55 million for human capital expenditures, a modest increase above the FY 2017 level to account for the government-wide civilian pay raise, while projecting a small decrease in the agency’s planned FTE count. MCC looks across its entire human capital and contracted services portfolio (FTEs, personal service contractors, and service contractors) with the intent to right-size the human capital budget while utilizing the most appropriate hiring authorities to maximize efficiencies.

MCC also continues to make strategic investments to better manage these human capital resources. MCC’s implementation of a new performance management system in FY 2017 to support evaluation of FTEs is one example of the steps taken to maximize employee performance and accountability. As a complement to this effort, in FY 2018 MCC plans to roll out a new workforce planning and management system to inform strategic staffing decisions and ensure human capital resources are consistently directed to highest-priority needs. MCC is also undertaking an effort to refine its knowledge management system and business processes, which will allow the agency to strengthen program quality and impact, expedite problem solving through efficient access to needed knowledge, enhance onboarding practices, institutionalize agency learning, and develop programs faster, all of which will help to decrease costs and increase efficiency.

Overseas Operations

MCC is budgeting $8.5 million to support its overseas administrative operations. This budget will support an overall in-country presence for 20 compacts and threshold programs during FYs 2017 and 2018. Overseas operations costs for each country include salaries and benefits, rent, residential allowance, relocation expenses, travel, shipping, office and residential furniture, IT equipment, official vehicles, and International Cooperative Administrative Support Services (ICASS) costs for a small in-country footprint of U.S. and locally employed personnel. Although the agency plans to manage direct overseas support costs at a lower level, MCC may continue to face upward pressure associated with ICASS and Capital Security Cost-Sharing (CSCS) as changes in country mission sizes, as well as other initiatives the Department of State requires to maintain and operate embassy compounds and therefore force greater burden sharing.

Operational Efficiencies

As a small, independent agency, MCC continually looks for opportunities to save resources and time by leveraging shared systems and services offered by other federal agencies or other providers—like procurement, financial management and accounting systems. For example, in FY 2017 and FY 2018, MCC is integrating a new contract management system, Contract Lifecycle Management System (CLMS), into its financial management system through the agency’s partnership with the Department of the Interior. This integration will save employees time, and the agency will reduce the risk of errors when transferring contract data. Over the next 10 years, it is anticipated that the CLMS investment will save the agency approximately $2 million in comparison to procuring or building a standalone system, while also ensuring MCC satisfies outstanding audit concerns. Similarly, in FY 2017, MCC migrated its IT server infrastructure to a cloud service provider, which is anticipated to save the agency $6 million over the next 10 years. MCC continues to use these savings to fund additional capital investments in software systems to automate core agency business processes (e.g. annual selection database, quarterly compact reporting system, compact performance data analytics, employee performance planning and evaluation).

Rent

As part of reducing MCC’s footprint, the agency successfully moved headquarters staff into a new property in FY 2016 and, as part of the negotiated lease, experienced the benefit of no lease payments for a portion of FY 2016 and 2017. However, MCC is expected to pay for a full year rent obligation of $6 million at the new headquarters location for the first time during FY 2018.