|(in millions of $)
|FY 2017 Enacted
|FY 2018 CR Rate Annualized
|FY 2019 Request
|Total Administrative Expenses
|Rent, Leasehold & Improvements
|Other Administrative Expenses
MCC has managed a flat-line administrative budget for the last 6 years and has relied on managing inflation through the efficient and effective use of limited funding. In FY 2019, the agency will undergo increased funding pressure largely from inflationary increases in rent and existing personnel costs, which may impede MCC’s ability to continue streamlining business tools and processes.
Some of the initiatives which have helped MCC manage inflationary pressures within the current budget levels include:
- Negotiated lease savings — In FY 2016, MCC moved the headquarters to the current location. As part of the successful lease negotiations, the agreement included a year and half of no lease payments. FY 2018 will be the first period in which MCC will incur rent costs for the full year.
- Less expensive information technology (IT) architecture — In FY 2016, MCC migrated the agency’s IT infrastructure to a cloud service provider. This strategic move is anticipated to save the agency $6 million over the next 10 years and is being utilized to fund additional capital investments in software systems to automate core business processes, including some systems identified in MCC’s Agency Reform Plan.
- System integration — MCC has transitioned to a new Contract Lifecycle Management System (CLMS) beginning in the first quarter of FY 2018. CLMS is integrated with the current financial management system, which MCC sources through the Department of Interior, and shortens the amount of employee time taken on procurement actions as well as improving data accuracy. This new system is anticipated to save the agency $2 million over the next 10 years in comparison to purchasing a standalone system.
- Best-in-class solutions — MCC has identified projected spending of approximately $16.7 million in FY 2017 that utilizes existing contract solutions via federal supply schedules, government-wide acquisition contracts, and multi-agency contracts and procurement instruments. This is roughly 40 percent of non-human capital/rent spending, and is an example of MCC’s strategic effort to leverage the vast buying power of the federal government to deliver maximum value on our limited resources. MCC will continue to review current operations and new initiatives, optimizing the use of best-in-class solutions when applicable.
- Knowledge Management — MCC is undertaking a knowledge management initiative to better capture and use accumulated knowledge to develop and implement country programs more efficiently and for greater impact. In addition, this initiative will allow the agency to strengthen program quality and impact, expedite problem solving through efficient access to needed knowledge, enhance onboarding practices, and institutionalize agency learning. In FY 2017, MCC focused on defining critical organizational needs and assessing existing vs. needed knowledge assets. Most recently, MCC began implementation of a knowledge management action plan, including staff-driven near-term priorities/work streams, IT infrastructure and processes to drive behavioral changes.
- Star Reports — In FY 2017, MCC launched the Star Report to better communicate the full spectrum of results for a given program at its conclusion. The business process of the Star Report ensures MCC will collect, validate, and memorialize critical information for every compact and threshold program at key decisional points in program development and at each quarter of implementation, while also decreasing overall internal reporting burdens. Star Reports and their associated comprehensive data will provide contextualized results and program learning for both internal and external audiences.
- Streamlining Compact Development — In Q4 of FY 2017, MCC launched a "challenge" calling on staff to submit ideas for decreasing the average 36 months it takes for compact development while maintaining the high quality that comes with MCC’s investments. Twenty-six teams provided diverse, creative solutions aimed to address time savings, feasibility, and adherence to MCC’s values. Selected ideas will be implemented in in FY 2018.
- Workforce and Learning Management Systems — MCC will implement a system to integrate the agency’s systems and processes in tracking, identifying and documenting the lifecycle of an employee or contractor. In addition, this system will aim to inform strategic staffing decisions and ensure human capital resources are consistently directed to the highest-priority needs. MCC currently employs multiple systems, processes and staff to complete this process, which is disjointed and requires significant manual entry of data. MCC will also implement a learning management system, a shared, cloud-based system for integrated learning management, including external training. The current processing system is costly and inefficient and does not provide the data required for robust talent development practices and information-driven decision-making. Projected cost savings are estimated to be approximately $100,000 per year in staff time and effort.
- Organizational Development Assessment and Workforce Demand Model — MCC will undertake an objective assessment of its organizational structure, operational roles and responsibilities, position structures, and workloads. The Organizational Development Assessment (ODA) will allow MCC to determine whether the organizational structure is optimized to fulfill MCC’s mission with the fewest management layers needed for appropriate risk management and accountability. ODA efforts are designed to maximize returns on organizational reform, increase organizational health, increase retention of top performing staff, and improve operational effectiveness/efficiency. MCC will also pilot new workforce planning tools that will allow MCC to better tie workforce decisions to business needs. This will enable the agency to better anticipate recruitment and staffing needs, avoid disruptive vacancies, and inform appropriate hiring authorities for positions.
- Performance Management System — To maximize employee performance and accountability, MCC implemented a new performance management system in FY 2017 to improve performance target setting, evaluation, feedback, and consequence management. As a complement to this effort, in FY 2018 MCC plans to roll out a new rewards and recognition strategy to improve the transparency, timeliness, and perceived equity of the performance management process.
And these efforts are already producing results, with MCC seeing the largest gains among all federal agencies for which data is available in the Partnership for Public Service’s 2017 Best Places to Work in the Federal Government rankings — a jump of 13.8 points.
Human CapitalMCC is planning $55 million for personnel expenditures to properly oversee and manage MCC’s programs. In FY 2019, MCC’s country portfolio is projected to include 16 countries in compact and threshold program implementation, ten countries in compact and threshold program development, and five countries undergoing initial post-closure evaluations. Such a portfolio with varying complexities, risks, and investment sizes requires stable cross-functional country teams applying rigor for establishing strong country-partner relationships, instilling country ownership, and ensuring program sustainability. MCC strives to maintain a steady state of human capital in support of these efforts, matching personnel skills and experience to the needs and risks of MCC’s investment portfolio by reviewing human capital and contracted services [full-time equivalent (FTE), personal service contractors, and service contractors] to ensure maximum efficiency and effectiveness based on workload support. As such, MCC continuously optimizes staff skillsets by utilizing a resource on more than one country program to achieve economies of scale.
To highlight one key set of human capital requirements, MCC’s authorizing statute requires MCC to develop compacts with partner countries that include specific objectives and benchmarks for measuring progress and to report annually on progress toward those objectives. Answering these questions requires monitoring and evaluations of MCC investments. MCC is committed to making its evaluations rigorous and feasible in order to understand the causal effects of its programs on expected outcomes, to assess the cost effectiveness of its interventions, and to inform decisions about current and future program design and implementation. The number of compacts and threshold programs that require monitoring and evaluation (M&E) increases each year, as more countries are selected compared to the number of countries for which MCC finalizes all evaluations. MCC’s M&E staff work on a compact and threshold program throughout its entire lifecycle (development, implementation, closeout, and post-compact evaluation) to create M&E plans, monitor program performance, and evaluate program effectiveness. In addition, compacts and threshold programs with lower-capacity countries and those with significant policy and institutional reforms require substantial MCC staff assistance with project identification, program logic, data collection, and implementation support.
In alignment with FY 2018 OMB guidance, MCC also aims to reduce the agency’s planned workforce from 330 to 320 at the Washington D.C. headquarters in FY 2018 and FY 2019. When coupled with increased workforce optimization initiatives outlined here and in MCC’s Agency Reform Plan, this staffing level will enable MCC to continue meeting the agency mission based on anticipated compacts and threshold programs in development and implementation. In FY 2018, MCC will establish a systematic workforce planning process to inform strategic staffing decisions for mission critical positions. The process will be supported by parallel work streams. The first work stream on centralized FTE management, is driven by hiring to attrition and controls the growth of the existing workforce through a rigorous vacancy review, prioritization, and approval process. The second work stream on organizational development assessment, aims to ensure MCC’s positions and organizational structure are aligned to deliver high-quality, timely, and effective compact and threshold programs. Through the assessment, MCC will review position descriptions for mission critical occupations and compare that information against work performed. Additionally, MCC will assess whether the nature of the work is structured appropriately by reviewing, analyzing, and validating the data used to assess workload and analyzing it against data reported and captured within MCC’s financial system and human resources system.
Overseas OperationsMCC is planning $9 million to support overseas administrative operations in at least 20 compact and threshold countries in FY 2019. 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. MCC may continue to face upward pressure associated with ICASS and Capital Security Cost-Sharing (CSCS) based on burden sharing and cost arrangements established by the Department of State to maintain and operate embassy compounds. As part of the IPBE implementation, MCC reviewed previous funding allotted to the Department of State in support of overseas operations and has included a budget to match past disbursement trends in order to maximize the use of funding while providing adequate support towards our relatively small overseas presence.
Information Technology (IT)MCC is planning $15 million for information and technology (IT) support in FY 2019.
MCC’s Office of the Chief Information Officer (OCIO) has actively worked to leverage new technologies and to automate IT processes to reduce costs and improve productivity on its operational teams without degrading service quality or increasing cybersecurity risks. These initiatives include:
- The FY 2016 migration of IT servers from a co-located data center to a cloud service provider remains on track to save the agency $6 million over 10 years.
- MCC will be consolidating two, large IT service contracts for production infrastructure operations and help-desk end-user support. Today, these two contracts cost MCC approximately $6 million annually—a consolidated contract will reduce administrative overhead and increase efficiencies to result in significant savings in FY 2019 and beyond.
- OCIO has worked with departments across MCC to reduce the number of software packages supported, where possible, in order to increase standardization with tools included within the Microsoft’s Office 365 productivity suite.
- The automation of critical cybersecurity processes, e.g., software patch management, will reduce contractor hours spent on this currently labor-intensive requirement.
- increased modern, cloud-based platforms for staff collaboration and knowledge management;
- a solution for more effective workforce management for employees and contractors;
- streamlined processes for Millennium Challenge Account (MCA) reporting and overall grant management for country teams;
- more effective customer relationship management tools for greater private-sector engagement on compacts; and
- improved analytical tools for impact assessment and open data publishing outside of MCC.