Administrative Expenses
| FY 2021 Enacted | FY 2022 Annualized Continuing Resolution | FY 2023 President’s Budget | |
|---|---|---|---|
| Total Appropriation/Request | 912.0 | 912.0 | 930.0 |
| Total Administrative Expenses | 112.0 | 112.0 | 130.0 |
| Human Capital | 67.5 | 69.5 | 72.0 |
| Training | 1.2 | 1.2 | 1.4 |
| Overseas Operations | 11.3 | 10.0 | 14.4 |
| Contracted Services | 9.1 | 7.4 | 12.5 |
| Information Technology | 15.0 | 14.0 | 16.4 |
| Rent, Leasehold & Improvements | 6.9 | 6.9 | 7.2 |
| Travel | 1.0 | 3.0 | 6.0 |
| Other Administrative Expenses | - | - | 0.1 |
Administrative expenses cover a host of critical mission-support functions across MCC’s portfolio and mission. Functions covered in this budget include administration, operations and financial management; program oversight and technical expertise; performance management and economic analysis; in-country civic engagement and communications; monitoring of country eligibility and selection; monitoring, evaluation and evidence reporting; domestic and international security; overseas administrative and contract support; information technology (IT) and cybersecurity; risk assessments, management and audit compliance; and travel, facilities management and rent.
MCC requests $130 million for administrative expenses to fully fund these necessary administrative functions in support of agency baseline operations and to deliver on MCC’s planned program development and implementation milestones; enhance and support climate and B3W programming; begin new investments in cybersecurity; foster an environment and a workforce that is more diverse, equitable and inclusive; and oversee more than $7 billion in taxpayer dollars.
The FY 2023 administrative expense request adjusts for years of absorbing inflationary increases from prior-year balances and fully reflects MCC’s current administrative needs. This request would allow MCC to execute the total amount of programming under management, accelerate compact development to obligate funding sooner, and achieve greater impacts on climate resilience and inclusive economic growth. Given the nature of MCC’s funding and programming cycles, in any given year MCC’s limited staff manages billions of dollars of compact and threshold program grants in various stages of development, implementation or post-implementation evaluation—well in excess of MCC’s annual appropriation. MCC has also steadily increased its focus on policy and institutional reform to achieve systems-level impact—risky work, as the world’s democracies are facing great challenges. MCC requires additional human capital resources and greater coordination with other development partners in order to operate in a world with greater uncertainty and risks such as COVID-19 and political instability. In addition to better reflecting the true cost of MCC’s increasingly complex work, this budget would also include modest increases to more fully support administration priorities such as climate and B3W, to implement its equity action plan, and to take steps toward combatting cybersecurity risks.
Human Capital
Investing in people is at the cornerstone of MCC’s mission and work. Human capital funding supports the agency personnel who enable MCC to successfully carry out its mission to reduce poverty through economic growth. MCC must continue to attract, retain and reward a talented and high-performing workforce with the specialized skills needed to carry out the mission.
The request includes $72 million toward human capital expenses, just 1 percent of the total funds under management in MCC’s $7 billion program portfolio in FY 2023. These expenses include administrative, management, oversight and technical support functions, and would maintain MCC’s pay-for-performance framework, which incorporates pay raises based on performance metrics against established criteria for each position. Similar to the General Schedule pay scale, which is assumed to increase by 4.6% in FY 2023, MCC also includes modest increases to the established pay bands. Both adjustments are in line with standard inflationary increases for full-time equivalent (FTE) civil servants.
The request would enable MCC to fund increased overseas staff to support compacts and threshold programs signing or implementing in FY 2023. It also would allow MCC to support implementation of MCC’s climate and B3W strategy across this portfolio. As part of MCC’s strategic work on MCC@20, the agency is examining its human capital model, and this budget would begin to address some needs related to promoting DEIA and accelerating compact development to obligate funds and achieve impacts earlier.
Overseas Operations
In FY 2023, MCC requests $14.4 million to support overseas administrative operations, including local-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. MCC also contributes its cost share of the International Cooperative Administrative Support Services (ICASS) and Capital Security Cost Sharing Program administered by the Department of State. Although MCC continuously reviews the costs related to overseas operations in order to maximize the use of funding while providing adequate support toward a small overseas presence (typically two FTEs per country), MCC has seen disproportionate growth in these costs in the past few years, and the costs are expected to increase again in FY 2023. The cost increases stem partly from the size of MCC’s portfolio, particularly with the extension of five compacts, but also the increased cost of the ICASS platform itself. MCC has included an increase of $1.6 million above the FY 2022 budget request for this line item.
MCC anticipates the need for enhanced security in support of MCC’s portfolio of countries, particularly for the agency to successfully invest and build its partnerships in West Africa. To help manage security challenges, MCC is introducing a new regional security specialist position in the Sahel region to provide comprehensive security and is adding in-country staff at the local organizations implementing the countries’ MCC compacts to assist with security analysis, coordination, planning, training and assessments.
Information Technology
MCC’s request includes $16.4 million in FY 2023 for IT resources. These funds would support core ongoing IT functions and services as well as enable MCC to deliver enhanced IT tools and solutions in support of MCC’s mission; bolster cybersecurity; and assist with implementation of MCC’s strategic priorities, notably MCC’s Climate Strategy and efforts to reduce the compact development timelines.
In addition to protecting the agency’s assets from cyberthreats, IT has played an integral role in allowing MCC staff to continue to support the agency mission amid the pandemic, even while in-office presence and travel have been curtailed. IT has also supported investment in agency-wide initiatives such as process automation, communication and cloud-based collaboration tools, internal data and analytical tools, and ongoing improvements in reporting grant disbursements to MCC’s partner countries. MCC continues to upgrade its infrastructure and systems through incremental deployments and uses a multiyear approach to address its technology backlog. Demand for digital services remains high, and these services play a central role in supporting MCC’s mission-focused systems. The increased funding requested would further ensure that efficiency and effectiveness of service delivery can be accomplished through secure, reliable applications and systems without stagnation in technology relevancy.
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 mobile access, online collaboration and virtual training. Cybersecurity threats are constantly 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 Modernization Act audits conducted by the USAID Office of Inspector General (OIG) and reports to Congress and the Office of Management and Budget (OMB) on the findings and recommendations. MCC is also evaluating additional improvements to its systems consistent with the implementation of zero-trust principles and in alignment with executive orders and guidance from OMB and the Cybersecurity and Infrastructure Security Agency (CISA). MCC remains committed to developing capabilities with the Department of Homeland Security Continuous Diagnostics and Mitigation Program and has joined and is participating in CISA’s Vulnerability Disclosure Program.
MCC has designated a chief data officer, in accordance with requirements under the Foundations for Evidence-Based Policymaking Act (2019), and will continue investing in leveraging data as a strategic asset and participating in open data and transparency initiatives. MCC is migrating historical and current records to a cloud-based repository that will have controls compliant with National Archives and Records Administration policies and guidance. The agency completed its migration to Enterprise Infrastructure Services in March 2021.
Rent
The FY 2023 budget request includes $7.2 million for rent, which reflects the contracted percentage increase within the occupancy agreement for office space at MCC’s headquarters. MCC will continue to evaluate the use of its headquarters space, proactively using space planning technology for seat management and conference and meeting space requirements, in the effort to maintain a relatively small footprint.