MFAN Welcomes Aid Effectiveness Proposals in Administration’s FY22 International Affairs Budget Request

June 4, 2021 (Washington) — this statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by co-chairs Tessie San Martin, Les Munson and Larry Nowels

The Modernizing Foreign Assistance Network (MFAN) welcomes the Biden administration’s FY22 International Affairs budget request as a major step in renewing the United States’ commitment to its role as a global humanitarian leader. Unlike executive proposals submitted over the past four years that sought deep and dangerous cuts to resources necessary to advancing America’s national interests, the blueprint submitted to Congress on Friday, May 28th is a serious recommendation that addresses significant global challenges —pandemic response, humanitarian crises, global health security, climate change, irregular migration, equitable economic growth, and gender inequality — while directly contributing to U.S. national security.

 

MFAN is especially pleased to see several elements in the request that advance the effectiveness of U.S. foreign assistance, leading to greater impact and more effective utilization of appropriated resources. The budget proposes $1.53 billion for USAID operating expenses, an 11% increase over FY21 which will enable the agency to maintain adequate staffing levels in order to effectively manage program funds and increase capacity for monitoring and evaluation of agency programs. This will include hiring an additional 70 Foreign Service and Civil Service positions to manage the billions of dollars provided in FY21 to address COVID-19 emergency requirements around the world.  Other portions of the $150 million increase will allow the Agency to continue to re-build its broader workforce that was targeted by a hiring freeze during the last Administration.

 

MFAN further supports the creation of a USAID’s Working Capital Fund for Acquisitions and Assistance, as recommended in the FY22 submission. MFAN for many years has advocated for the establishment of such a Working Capital Fund, a move that would allow the agency a flexible means to balance its workforce to match emerging priorities, including the means to better respond to humanitarian crises and challenges arising in fragile states, places where surge capacity plays a crucial role in advancing American interests.

 

As another step towards providing additional funding flexibility for USAID managers, the budget recommends allowing resources directed for basic education programs to be repurposed for other development priorities when they exceed the absorptive capacity of recipient countries. MFAN supports this provision and encourages Congress and the administration to consider applying this principle in other cases where project pipelines may exceed absorptive capacity and funds could be better utilized elsewhere.

 

MFAN has long advocated for local ownership of development and building the capacity of locally-led organizations to partner with USAID to implement programs in their own countries. We are pleased to see suggested changes to appropriations language regarding Local Competition that would ease restrictions on USAID’s local procurement practices. Such procurements provide local organizations the opportunity to work directly with USAID, helping to broaden USAID’s partner base, tapping local expertise, and advancing sustainable impact.

 

MFAN is pleased with USAID’s continued focus on the accountability of its programs through its compliance with the Foreign Aid Transparency and Accountability Act (FATAA), a law which MFAN strongly supported. MFAN commends the agency on its efforts to strengthen its focus on evidence-based decision-making, including its established monitoring and evaluation guidance and its new agency-wide learning agenda. MFAN is disappointed, however, that the President’s budget proposes to delete a $10 million directive to fund ex-post evaluations. Ex-post evaluations are not only essential to understanding the effectiveness of development programs but also to learning how sustainable these activities are after U.S. funding has ended. We would encourage Congress to maintain the allocation for ex-post evaluations.

 

Regarding the Development Finance Corporation (DFC), MFAN applauds the request to increase DFC administrative expenses by 24%, an action that will help the Corporation advance its development mandate. The administration, however, appears not to have changed the scorekeeping methodology for DFC equity investments and is seeking dollar-for-dollar appropriations. We continue to call on the Office of Management and Budget (OMB) and Congress to establish a fair-market value scoring process for equity, something that would allow greater use of this important investment tool by the DFC while also not squeezing other programs funded within the International Affairs budget.

 

The $63.68 billion International Affairs request represents a nearly 11% increase over the FY21 enacted amounts, excluding emergency COVID-19 supplemental funding. However, funding increases alone do not create more effective assistance. What makes this request a positive step for aid effectiveness is the emphasis it places on improving agency operations so it is able to meet the considerable challenges of our time.

 

“Although it is a bit late in the legislative calendar, this is a welcome and serious budget proposal,” said Lester Munson, MFAN co-chair. “International assistance is a critical component for U.S. global leadership and the administration has done well to advance sensible reforms and increased budgets for timely programs.”

 

MFAN co-chair Larry Nowels observed that “President Biden has offered a thoughtful and constructive blueprint for advancing American global interests, re-engaging with key partners, and strengthening the institutional capacity that will lead to better development outcomes.”

 

“This budget will help restore USAID’s role as a leader in international development and integrate development as an essential piece of U.S. foreign assistance,” said Tessie San Martin, MFAN co-chair and President and CEO of Plan International USA. “It recognizes that COVID has led to enormous increases in poverty around the world and that a more effective USAID will play a key role in the global recovery.”

 

 

 

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