Congressional Budget Justification (CBJ): Congressional Budget Justification, FY 2024 | March 2023
|(in millions of $)||FY 2022||FY 2023||FY 2024|
|Total Administrative Expenses||115.0||130.0||143.0|
|Rent, Leasehold & Improvements||6.9||7.2||8.5|
|Other Administrative Expenses||–||0.1||0.1|
MCC is requesting $143 million in administrative expenses in FY 2024 for critical mission support functions such as financial management and oversight, domestic and international security, human resource and overseas administrative support, contracts and grants acquisition, travel support, information technology and cybersecurity, risk management, internal controls, audit compliance, and facilities management and rent.
With an increase of $13 million over the FY 2023 President’s Budget, MCC will be able to carry out necessary preparations in support of a pipeline of newly selected countries and to effectively oversee 26 programs valued at over $6.1 billion in development and implementation throughout FY 2024, especially those continuing to be impacted by COVID, supply chain issues and broader economic trends. The request also funds critical pieces of digital advancement and maintenance, including an enhanced cyber security posture as required under the Administration’s zero trust cybersecurity policy. Lastly, this request helps offset annual increases and inflationary increases for payroll, contracted services, and overseas operations. Following several years of travel and overseas work being stifled by the pandemic, MCC achieved a historic high point in its program development, signing 6 programs in 2022. As those programs, coupled with 3 other programs, reach the point of implementation in FY 2024, MCC requires the necessary administrative expenses to support the travel, contracted support and overseas operational budgets.
The administrative expenses budget covers MCC’s workforce, enabling the agency to successfully carry out MCC’s mission to reduce poverty through economic growth. It is critical that the agency continues to recruit, retain, and reward the talented and high-performing workforce with specialized skills needed to carry out the mission.
The FY 2024 budget request includes $77 million toward human capital expenses, including maintaining MCC’s merit pay, and pay-for-performance framework which incorporates pay raises based on performance metrics against established criteria at each pay band level for positions. Much like the General Schedule pay scale, MCC also includes moderate increases to the established pay bands. These adjustments are in line with standard federal inflationary increases for full-time equivalent (FTE) civil servants. For FY 2024, MCC anticipates adding new overseas positions in support of the projected program portfolio, including seven new compacts entering into force during FY 2024, and the annualized costs for FTE of positions onboarded in FY 2023. Additional support positions are required to provide sufficient audit, legal and financial oversight, technical and project management, and programmatic and strategic direction, particularly aligned with projects that promote inclusive growth, adopt climate adaptation, resilience, and mitigation measures, and deliver sustainable infrastructure.
As part of MCC’s strategic work on MCC@20, during FY 2023 MCC began a comprehensive human capital strategy (HCS) development project with the goal of implementing a plan to ensure the corporation is appropriately staffed to achieve its mission, strategic priorities, and operations support. Through the HCS, including an examination of its human capital model, MCC will identify core, leadership, and role-based technical competencies, determine the workforce necessary to achieve the mission and strategic priorities, and build a strategy to address differences between current workforce composition and staff competencies as well as forecasting the workforce or competency needs. The completion of the HCS and implementation plan is expected in FY 2024.
MCC requests $15.4 million to continue supporting overseas administrative operations, including locally engaged staff salaries and benefits and resident country management team costs, including rent, residential allowances, relocation expenses, travel, shipping, office and residential furniture, IT equipment, and official vehicles. With FY 2022 signings with six new countries and six more anticipated in FY 2023, we anticipate a large increase in MCC’s share of the International Cooperative Administrative Support Services (ICASS) and Capital Security Cost Sharing (CSCS) expenses continuing into FY 2024 when compared to prior years. With a larger country portfolio, MCC will have a larger overseas staff presence to directly support within this budget. This request also helps offset the global inflationary increases that are stretching the base budgets too thin. Although MCC continuously reviews the costs related to overseas operations to maximize the use of funding while providing adequate support toward our relatively small overseas presence (typically only two FTE per country), we continue to see an upward trajectory in year over year ICASS and CSCS costs and anticipate potential necessity for enhanced security in support of MCC’s portfolio of countries.
Information Technology (IT)
MCC is planning $18 million for information technology (IT) support within the in-guide request for FY 2024.
IT has an integral role in supporting agency-wide initiatives, including providing process automation, delivering services for the publication of program data, enhancing analytical services, delivering communication and cloud-based collaboration tools, and providing ongoing improvements for reporting grant disbursements for MCC’s country partners. MCC continues to upgrade infrastructure and systems through incremental deployments and uses a multi-year approach to address its technology backlog. Demand for digital services remains high, playing a central role in supporting MCC’s mission-focused systems and the increased funding requested would further ensure that efficiency and effectiveness can be delivered through secure, reliable applications and systems without stagnation in technology relevancy. Improving our IT systems and services can also support MCC’s hybrid work environment and help ensure that MCC staff are able to use their time more efficiently. During FY 2024, MCC is planning for a hardware refresh for its entire user population and a potential network infrastructure refresh.
MCC controls equipment support costs by maintaining standardization across the enterprise. MCC has increased the use of shared services and FedRAMP-based solutions for supporting commodity-based IT requirements. IT plays an increasingly important role in supporting MCC’s mission through mobility, online collaboration, and virtual training. Cybersecurity threats keep evolving, and overall risk remains high. MCC continues to enhance its monitoring and behavior analytics capabilities and is integrating them with its Security Operations Center. MCC participates in annual Federal Information Security Management Act audits conducted by the USAID Office of Inspector General, and reports to Congress and OMB on the findings and recommendations. MCC continues to implement capabilities in partnership with the Department of Homeland Security Continuous Diagnostic Monitoring Program and publishes its cybersecurity metrics through the government-wide dashboard. Throughout FY 2023 and continuing into FY 2024, MCC will focus on implementing modernizations to its technology infrastructure consistent with the zero-trust principles outlined in Executive Order 14028 on Improving the Nation’s Cybersecurity and subsequent guidance on zero-trust from the Cybersecurity & Infrastructure Security Agency, and OMB memo M-22-09. In addition to modernizing policies and the IT architecture toward zero trust principles, MCC’s focus for FY 2023 through FY 2024 will include security enhancements to its software supply chain and software development practices by incorporating the practices outlined in OMB M-22-18.
MCC continues to demonstrate its commitment to open data and will continue investing in leveraging data as a strategic asset and participating in open data and transparency initiatives. In July of 2022, MCC was recognized by the Aid Transparency Index as the highest performing US agency, and the highest performing bilateral agency worldwide. Additionally, MCC continues to add data and analysis to the MCC Evidence Platform that encourages the use of MCC’s evidence as global public goods to support mutual accountability for the agency and its country partners, and to encourage learning from measured results.
The FY 2024 budget request reflects our continuing rent costs for office space at MCC’s headquarters, with inflationary increases built into our lease agreement with our landlord. MCC’s existing lease agreement is due to expire in December 2024 (Q1 of FY 2025) and the agency has begun to explore options of either remaining in the existing space by extending or renegotiating the lease or pursuing new office space and the associated costs. Accordingly, MCC administrative expenses in the FY 2024 budget may also need to either cover some additional expenses associated with the ending lease, e.g. costs associated with either upgrading the existing facility or restoring it to its original condition, and/or moving and fitting out a new facility. In all scenarios, MCC will continue to evaluate the most efficient use of its headquarters space, proactively using space planning technology for seat management as well as conference and meeting space requirements, maintaining a relatively small footprint.