Quickie: USAID as a “check-writing agency?”

Image by DavidDMuir via Flickr

Ken Dilanian of USA Today has an interesting piece on the CEO compensations of American aid groups. (h/t to RL for the tip). These aid groups are for-profit companies and tax-exempt groups paid by USG to deliver foreign assistance programs.

USA TODAY reports that it “examined total CEO compensation of the 10 largest recipients of foreign aid grants and contracts that also derive at least 70% of their revenue from U.S. taxpayers. Each one receives a 501(c)3 charitable exemption from federal taxes.”

Number #1 in the USA TODAY list is American Institutes for Research (AIR); its president was paid $1.1 million in 2007, the highest in the group.

Number #2 is the Academy for Educational Development; its president was paid $879,530 in total compensation in 2007, tax records show, a figure that includes "catch-up retirement restoration payments."

Number #3 is the Research Triangle International whose 2007 chief executive compensation was $658,844.

The report quoted Sen. Patrick Leahy, D-Vt., who chairs the subcommittee that funds foreign aid: "It conflicts with most people's notion of what a non-profit organization is about when they're paying themselves salaries that are several times higher than what a U.S. Cabinet secretary would earn." This leads the senator to conclude that “an understaffed USAID has become “a check-writing agency."

To put this in context salary-wise, I’d like to note that the President of the United States earns $400,000 a year. The vice president's annual salary is $221,100. Secretary of State Clinton earns $186,600. So the top aid CEO’s salary is almost three times that of President Obama; almost five times Vice President Biden’s salary and almost six times that of Secretary Clinton. I don’t know at what level the USAID Administrator is paid, but the top level of the executive schedule in 2009 is paid $196,700 a year.

What might be the compensation of a president of a third world country where these aid groups operate? Philippine President Gloria Arroyo earns about $1,333.33 a month or approximately $16,000 a year. Robert Mugabe of Zimbabwe’s salary was reportedly pegged at US$20,800 for 2009. Oh, wait -- I’m not sure it’s wise to mention Fruitcake Bob, given that he has a fondness for expensive parties; remember that $1.2 million birthday bash and his shindig earlier this year? [Oh, frack! too late now!]

Read the whole thing here.

Top Most Expensive Places to Live in the Foreign Service

The cost-of-living allowances are those allowances that are designed to reimburse employees for certain excess costs that they incur as a result of their employment overseas where the cost of living, exclusive of quarters costs, is substantially higher than in Washington, D.C.

Below are the top most expensive places to live for Foreign Service personnel; alphabetic list based on government COLA rates as of June 2009:

#1. SWITZERLAND [90%]

Geneva, Bern, Other

#2. JAPAN [80%]

Akashi, Nagoya, Sapporo, Osaka-Kobe, Kyoto, Komaki

#3. DENMARK [70%]

Copenhagen, Other

#4. FRANCE [70%]

Garches, Lyon, Marseille, Montpellier, Paris, Sevres, Suresnes, Versailles

#5. ITALY [70%]

Florence, Milan, Turin

#6. NORWAY [70%]

Oslo

#7. ZIMBABWE [70%]

Harare, Other

#8. BERMUDA [60%]

Bermuda

#9. GABON [60%]

Libreville, Other

#10. FRANCE [60%]

Other

#11. HOLY SEE [60%]

Holy See

#12. ITALY [60%]

Rome

#13. JAPAN [60%]

Tokyo

#14. SPAIN [60%]

Barcelona

Post (Cost of Living) Allowance FAQ (Also see DSSR Chapter 220). You can check out the full list of Post Cost of Living rates here.

Report on Pay and Benefits of Deployed Civilians in War Zones

The Government Accountability Office (GAO) recently released its report on compensation and medical benefits extended to Federal civilians during deployment in the war zones. Selected excerpts reprinted below:

Summary:

The Department of Defense (DOD) and other executive agencies increasingly deploy civilians in support of contingency operations in Iraq and Afghanistan. Prior GAO reports show that the use of deployed civilians has raised questions about the potential for differences in policies on compensation and medical benefits. GAO was asked to compare agency policies and to identify any issues in policy or implementation regarding (1) compensation, (2) medical benefits, and (3) identification and tracking of deployed civilians. GAO reviewed laws and agency policies; interviewed officials responsible for governmentwide guidance at the Office of Personnel Management (OPM) and for policy at six selected agencies, including DOD and State; reviewed all workers' compensation claims filed by deployed civilians from January 1, 2006 through April 30, 2008 at the Department of Labor; and conducted a generalizeable survey of civilians deployed from the six agencies during this same period.

Although policies concerning compensation for deployed civilians are generally comparable across agencies, GAO found some issues that affect the amount of compensation--depending on such things as the agency's pay system or the employee's grade/band--and the accuracy, timeliness, and completeness of this compensation. For example, two civilian supervisors with comparable salaries who deploy under different pay systems receive different overtime pay because the overtime rate is determined by the employee's pay system and grade/band level. While a congressional subcommittee asked OPM to develop a benefits package for all deployed civilians to war zones and to recommend enabling legislation, OPM has not yet developed such a package or provided legislation. Also, implementation of some policies may not always be accurate or timely. For example, GAO estimates that approximately 40 percent of the deployed civilians in its survey reported experiencing problems with compensation--including not receiving danger pay--in part because they did not know where to go for assistance. Moreover, in January 2008, Congress gave agency heads discretion to apply the death gratuity provision retroactively for deaths connected with operations in Iraq or Afghanistan on or after October 7, 2001. At the time of GAO's review, agencies had not yet issued formal policy to implement this benefit.

Although agency policies on medical benefits are similar, GAO found some issues with medical care following deployment, workers' compensation, and post deployment medical screenings that affect the benefits of deployed civilians. Specifically, while DOD allows its treatment facilities to care for "non-DOD" civilians following deployment in some cases, the circumstances are not clearly identified in guidance and some agencies were unaware of DOD's policy. Civilians who deploy also may be eligible for medical benefits through worker's compensation. GAO's analysis of 188 such claims filed with Labor revealed some significant processing delays resulting in part from lack of clarity about the documentation required to support claims. Without clear information on what documents to submit to support a claim, applicants may continue to experience delays. Further, while DOD requires medical screening before and following deployment for civilians, State requires medical screenings only before deployment. Prior GAO work found that documenting the medical condition of deployed personnel before and following deployment was critical to identifying conditions that may have resulted from deployment. Each agency provided GAO with a list of deployed civilians, but none had fully implemented policies to identify and track these civilians. DOD, for example, had procedures to identify and track deployed civilians but concluded that its guidance was not consistently implemented. While the other agencies had some ability to identify and track civilians, some had to manually search their systems. Thus, agencies may lack critical information on the location and movement of personnel, which may hamper their ability to intervene promptly to address emerging health issues, as GAO has previously reported.

Death Gratuity:

In addition, Congress provided for a death gratuity under FECA of up to $100,000 to be paid to the survivor of a deployed civilian whose death resulted from injuries incurred while deployed in support of a contingency operation. This statute also provided agency heads with the discretion to apply the death gratuity provision retroactively for survivors of civilians who died, on or after October 7, 2001, from injuries incurred in connection with their service with an armed service in the theater of operations during either Operation Iraqi Freedom or Operation Enduring Freedom. This provision became law on January 28, 2008. However, Labor, which is responsible for implementing regulations under FECA, has yet to issue formal implementing policy—although Labor officials told us that they have been working to finalize a policy for over a year. Further, while some agencies have issued memoranda or conducted briefings concerning the death gratuity, according to officials at the agencies included in our review, none has issued formal policy that incorporates these provisions—including the retroactive provision—because they are waiting for implementing guidance from Labor.

In fact, officials from State and USAID said that they cannot move forward on these provisions until Labor issues its guidance. Labor officials told us that because of the recent change in administration, they could not provide us with an anticipated issue date for the final policy; Labor officials stated that the draft policy is currently being reviewed for approval by the Office of Management and Budget. Despite the lack of formal policy, officials at Labor and DOD stated that, at the time of our review, this $100,000 death gratuity had been paid in one instance Civilians’ Eligibility to Receive Care at DOD Medical Facilities Following Deployment Is Not Clear or Conveyed to Other Agencies Despite DOD’s policy to allow “non-DOD” civilians to receive treatment in DOD facilities following deployment, confusion exists within other agencies and DOD regarding non-DOD civilians’ eligibility for this care. For example, officials at several agencies, including State, USAID, and Justice, were unaware that deployed civilians were eligible for care at DOD facilities following deployment, in part because these agencies did not receive the September 2007 memorandum from DOD. Additionally, confusion exists within DOD regarding non-DOD civilians’ eligibility.


Response from the Department of State:

In its written comments in response to a draft of our report, the Department of State concurred with our three recommendations. Specifically, with respect to our recommendation that it develop post-deployment medical screening requirements, State committed to implementing mandatory medical clearance exams for civilian employees upon completion of their assignment in a combat zone, beginning in 2010. With respect to our recommendation that it establish an ombudsman program to help ensure that deployed civilians receive the compensation and medical benefits to which they are entitled, State committed to designating a formal ombudsman to replace its informal existing mechanisms. Finally, with respect to our recommendation that it establish policies and procedures to identify and track deployed civilians, State committed to consulting and coordinating with DOD and other executive agencies to determine the best way to establish policies and procedures to accurately identify and track standardized information on deployed civilians. If properly designed and implemented, these actions should meet the intent of our recommendations.


Response from United States Agency for International Development:


In its written comments in response to a draft of our report, the U.S. Agency for International Development (USAID) generally agreed with our conclusions but did not agree with our recommendations. With respect to our recommendation that USAID establish an ombudsman to help ensure that its deployed civilians receive the compensation and medical benefits to which they are entitled, USAID officials pointed out that the agency already has an ombudsman to support its Critical Priority Countries, including Iraq and Afghanistan. According to USAID, this ombudsman, among other things, helps Foreign Service employees deployed to these countries with a variety of issues, including compensation and medical benefits. We contacted the individual who USAID identified as the ombudsman and asked for documentation related to this position and its origin and responsibilities. This official stated that the position was established in 2006 to assist deployed civilians in obtaining the compensation and medical benefits to which they are entitled, but this official did not provide any supporting documentation. In the absence of documentation, it is unclear to us how USAID's ombudsman ensures that deployed civilians receive the full compensation and benefits to which they are entitled. Accordingly, we continue to believe our recommendation has merit. With respect to our recommendation to establish policies and procedures to accurately identify and track standardized information on deployed civilians, USAID commented that it believed its current systems to be adequate and additional policies and procedures to be unnecessary at this juncture. We disagree; for example, when asked to develop a list of civilians the agency had deployed to Iraq and Afghanistan, USAID officials stated that they had no agencywide system that would provide this information. They relied in part on a manual search of personnel records.

Furthermore, we note that USAID was unable to provide a list of civilians who had deployed for less than 180 days--in part because doing so would have been extremely labor intensive. As we have noted in this report and in prior work, agencies must be able to capture and subsequently retrieve location-specific information on employees, to identify possible exposures to environmental or industrial contaminants during deployment. Such information includes movement within theater and medical treatments while deployed. Without this capability, an agency may be unable to intervene promptly to address any future health problems that employees may develop as a result of deployment in support of contingency operations. USAID's current capability, which relies in part on manual searches and may require labor intensive efforts to retrieve this information, does not represent a system that meets the intent of our recommendation. Should any deployment-related medical concerns develop in the future, such a system may fail to identify all individuals who may be affected. As a result, we continue to believe that our recommendation is appropriate.


Read the whole thing here including the GAO's 10-point recommendations.

Related Item:
GAO: Human Capital - Actions Needed to Better Track and Provide Timely and Accurate Compensation and Medical Benefits to Deployed Federal Civilians GAO-09-562 | June 2009 (pdf)

Quickie: Emolument Clause and the Saxbe-fix in the Sauce

Some folks have been talking about HRC’s ineligibility to serve as SoS due to that obscure thingy in the Constitution called the “emolument clause” which says that a member of Congress may not be appointed to a government position if the compensation rate for that position was increased during his or her term.

For those who still harbor any doubts that Congress can actually get something done when it wants to, here is proof in the sauce. Apparently late on Wednesday, Congress cut the pay for the Secretary of State by about $4,700 (about 6 Ferragamo shoes, btw).





In 2006, the salary for cabinet posts was increased from $186,600 to $191,300. So what Congress did this week was Saxbe-fixed this matter; they simply rolled back the SoS salary to $186K, the cabinet pay before HRC’s most recent election.





Harry Reid introduced the joint resolution (S.J. Res. 46); which was read twice, considered, read the third time, and passed. (Big wow! Please, can we do this with the overseas pay gap, too?). This joint resolution shall take effect at 12:00 p.m. on January 20, 2009.

And that my friends is what I’d call excellent timing!

Quickie: The Overseas Pay Gap Once More

The Foreign Service Overseas Pay Gap is the topic of Joe Davidson’s column yesterday (Federal Diary, Nov. 19).

AFSA’s president John Naland is quoted in the report. Davidson writes:

“He does quarrel, however, with Coburn's (R-Oklahoma) notion that foreign service officers are seeking huge raises on top of other big benefits. It's true that diplomats get a housing allowance and, in some cases, dangerous duty or hardship duty pay. But that doesn't negate the need to close the gap, especially for lower-level diplomats. […] Senior foreign service officers get those same benefits, but their pay is not reduced by the locality amount when they go abroad. That cut applies to only the junior and mid-level diplomats."

FSO Michael Keller and his wife, Sonja are also highlighted in the report:

And foreign service officers don't have the option of staying in D.C. They spend most of their careers outside the country.

The issue is compounded when a diplomat takes his family abroad because the family often loses the spouse's income, too. Sonja Keller had a growing career as a journalist and public relations officer when Michael was sent to the Central African Republic.

"The financial impact was significant," she said.

Her income was greater than his, but the family had to give that up.

"Once I left my job, my career basically stopped," she said.

She worked in embassies where her husband was posted, but it was "generally nominal stuff," she said.

I know what she means; and that's a pretty familiar spouse story. For FS spouses, the "good" jobs are paid normally about $12-13/hour; about how much you get paid as a nanny in London. I knew somebody who was paid $20/hour once and her boss thought that was way too much money. At one post, another FS spouse, the commissary manager who took care of our tiny store had an advanced degree in dance therapy. I'm quite sure she was not an exception. But there really are "good jobs" out there, as long as you don't complain that you, too, have brains. I knew somebody who left a 100K job in DC and eventually took a 36K job in some blissful country - with free housing, of course (some expensive free housing, huh?).

There are way too many somebodies with the same story ... And onebody says its greedy for folks to asked for the closure of this pay gap? Go tickle yourself silly!





Update: Read here for Digger's (Life After Jerusalem) take on how much harder it is for Members of Household on the career/employment front.

Related Post:

The Overseas Pay Gap – Not Quite on Life-Support But …

The Overseas Pay Gap – Not Quite on Life-Support But …

Proponents of revisions in the Foreign Service compensation system point out that as increasing numbers of Foreign Service personnel are going to posts of increased hardship and danger, Foreign Service personnel serving abroad receive 20.89% less than their colleagues who are posted in Washington, D.C. due to the loss of locality pay when serving abroad. Both the 109th and 110th Congresses have considered proposals to eliminate this pay difference. The “Foreign Service Overseas Pay Equity Act of 2008,” H.R. 3202, as amended, would eliminate the pay differences over three years.

H.R.3202 - Foreign Service Overseas Pay Equity Act of 2008 was introduced to amend the Foreign Service Act of 1980 to extend comparability pay adjustments to members of the Foreign Service assigned to posts abroad, and to amend the provision relating to the death gratuity payable to surviving dependents of Foreign Service employees who die as a result of injuries sustained in the performance of duty abroad. You can read the full text of the bill here (PDF).

Status: Latest Major Action: Was placed on the Union Calendar, Calendar No. 571 on 9/24/2008. According to AFSA, the office of Senator Tom Coburn (R-OK) has also confirmed that he had placed a hold on H.R. 3202. AFSA’s John Naland has more on this here.

Cost Estimate: CBO estimates that implementing H.R. 3202 would cost $1.3 billion over the 2009-2013 period, assuming appropriation of the necessary amounts. That’s $5.00 per American over the 2009-2013 period as computed by govtrack.us. Full text of the cost estimate for the bill as ordered reported by the House Committee on Foreign Affairs on July 16, 2008 is available from the Congressional Budget Office here (PDF).

The Congressional Research Service (CRS) has also written a report on the “Proposals for a New Foreign Service Compensation System in the 110th Congress.” You can read the entire text here (PDF).

Online Resources:

Hints for Communicating with Congress

Write Your Representative

Zip+4 United States Postal Service Lookup

Congress Merge:

Online Congressional Directory to Contact Your Reps

Contact Senator Tom Coburn (R-Oklahoma)

Beijing Blues

In the May issue of the Foreign Service Journal (FS Voice, see page 9), Donna Scaramastra Gorman, a freelance writer and FS spouse in Beijing pens “Thanks for Your Service ..Now, Here’s Your Pay Cut,” in response to the hardship pay reduction in Beijing. The FSJ editors’ note appended to the article states that a letter signed by a majority of Foreign Service members at Embassy Beijing — 98 employees — was also sent to the Director General to express concern about the decrease in the differential.

Ms. Gorman’s Foreign Service family was described as “second worlders,” in her words, they go to “middle-of-the-road places: hard, but not to the point that we can’t take the kids. Our current post, Beijing, is our fourth hardship post (15-25 percent) in a row.” This was after their assignments in Moscow (15), Yerevan (25) and Almaty (25). You can find the long list of Post Hardship Differential here. But before FS critics jump up and down on this, and accuse FS folks of “whining,” again, I’d like to highlight a couple of significant health consequences of this specific hardship assignment for the Gormans:

“In October, my previously healthy husband developed severe breathing troubles. A lifelong runner, he began wheezing as he climbed the stairs; at night, it sounded like he was drowning in his sleep. He was initially diagnosed with reactive airway disease and then a severe sinus infection. After an inhaler, steroid and some four to five courses of antibiotics, his condition improved. But only after a trip to Hong Kong, where the air is cleaner, did his symptoms subside.

“[…] I caught a mysterious virus that caused me to go deaf in one ear. The doctors in Beijing weren’t equipped to handle the emergency, so I was medevaced to Hong Kong. There, doctors tried to restore my hearing, though warned that the odds were against me, given how much time had elapsed. Back home in the States, or at a post that was more medically advanced, I would have been able to get treatment at the ER within hours, improving my odds. Here, not so. I’m now permanently deaf in one ear. Then again, as a colleague pointed out, “I suppose that’s one of the reasons you get hardship pay over there.”

We pick hardship assignments (at least, I think most of us do) not to toughen our kids or to test if our spouses and partners love us enough to put up with the highs and lows of life overseas. We pick hardship assignments fully expecting, well, hardships, and the additional compensation of 5-35 percent over basic compensation to make up for those hardships. Why? Because like you and your neighbors, we are regular people with mortgage and bills to pay, kids to send to college, and retirements to plan for life after the Service. Perhaps the independently wealthy would not be too concerned with things like these, but there is not a whole lot of them in this Foreign Service.

We knock on wood, and we keep fingers crossed because we realized that picking a hardship assignment is always a roll of a dice. Dr. John Kellogg says that “health is wealth is a trite maxim, the truth of which everyone (only) appreciates best after having suffered a disease.” After contracting various illnesses and collecting worldwide available parasites, I think we all certainly learn to appreciate the "health is wealth" maxim but we also often bet that we’d come out at least even, with all our loved ones’ appendages and parts still working, as we survive another hardship assignment. Would anyone of us willingly go to a place if we know that we’re going to get permanent deafness in exchange for it? How much does an ear cost, that is, if you still have it but it's no longer functional? I don't think there is a "numerical weight" for this, most especially for the unemployed trailing partner.

Environment conditions overseas can differ substantially from conditions of environment in the United States. These conditions can include lack of comparable medical facilities, high crime rates and/or political violence – some bad things, we can avoid by becoming mindful of where we go when we are in our host countries, but some, like environmental conditions and lack of medical facilities become part of the whole shebang. We can’t stop breathing just because the air is bad, can we?

The reasons cited for the reduction of the Beijing post hardship differential apparently were
1) improved quality of locally provided health care, and 2) improved air quality. Ms. Gorman writes: “I could relate numerous examples why this simply doesn’t ring true, and so could many other family members here in Beijing. Many of us have a story of some health problem we’ve developed since arriving at post. As to the air quality, she writes: “We spouses all had a good laugh at that one. At the time, our kids were having an indoor playdate, because the air that day was so bad that they couldn’t go outside. In fact, two days after Christmas the air pollution index was 433 in downtown Beijing, 500 in the suburbs where we live. To put things into perspective, on an unhealthy pollution day in a major U.S. city the API is between 40 and 60.”

Here is one blog that's dedicated to Beijing air and is worth reading. It asks: "How wise is it to live in Beijing, if you have other options? Can you raise your kids in this city without affecting their chances of a healthy life? China doesn’t have a good reputation for its environment, but as far as I can see, Beijing has the worst air pollution index of all 84 reported cities nearly every day according to the official agency SEPA, so there is reason to worry. Is the situation improving or is it actually getting worse with the 1000-1200 new cars that hit the Beijing roads every day?"

You can also click here to see a view of Redlands, California and of Beijing, China from Atlantic’s James Fallows’ "My Two Home Towns." Or you can flip below my Beijing Blues, put together to commiserate with our friends there.

At the end of her piece, Ms. Gorman writes: "It isn't right to take it from us, and from families like ours, who came here in good faith, believing they would be compensated for the risk they chose to take. If State needs to reduce hardship pay, for financial or other reasons, they ought to grandfather in the policy."

As much as I hope that this would get resolved favorably before long, I am mindful that State is not known for dealing with issues beyond the lines of the regs. If grandfathering in is not clearly stated in the regs, then it could not possibly be done. We do have a new, well respected person at "M," and I'd like to think that he will be sensitive to this issue and can move things in the right direction.

It might also be instructive to listen to what Jean Martin, the executive director of the Corporate Leadership Council says in the January issue of T+D: Martin admits that the turmoil surrounding organizational change during the last five years has force employees "to do more with less," and that mandate is forcing many employees to "check out." She's not talking about public sector employees here but since "doing more with less" now seems to be the mantra at State, one cannot simply ignore this. "Our data has proven, year after year, that the emotional side of engagement is actually four times more powerful than the rational side when it comes to driving the business impacts we care about, which are essentially employees who want to stay .... and employee productivity." And this one: "Engagement is all about creating a culture where people do not feel misused, overused, underused or abused ... if they feel any of those things, they can jump ship and that will cause a lot of angst for the ship left behind."

Food for thought - given that employee engagement in the FS is not a singular but a family affair.