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Dear Board of Directors,

Much going on this week (outside of Russia and email headlines) and I wanted to share a few items.

1. BUDGET UPDATE. The House State-Foreign Operations released their bill this week with a mark-up this afternoon. While the funding levels were much better than the Administration, it was still far short of the $60b current funding level. Given the shortfall, here is our statement<http://www.usglc.org/2017/07/10/house-proposal-falls-short-of-protecting-american-interests-around-the-world/> - raising our concerns and calling on the Senate for a higher allocation.

* Chairman Roger's proposal provides $47.5 billion for SFOPS, including $12 billion for OCO - a roughly 10% cut from FY17 numbers (and 17% down when including the ISIS emergency funds from last year).
* While we were certainly hoping to see more from the House Appropriators, we hear there were those who felt Congress "took care" of these programs last year (with the additional money for famines and countering ISIS) and the long-standing view that "the Senate will come in at a higher number."
* Our full attention now turns to the Senate. In addition to advocating for a higher 302(b) allocation, we are watching the discussions around a budget resolution and the possibility of cutting amendments from Senator Rand Paul. Needless to say, we will be ready to mobilize.

2. USAID NOMINATION MOVEMENT. As expected, the Senate Foreign Relations Committee unanimously approved Mark Green's nomination-something that doesn't happen very often these days. We are working to ensure he gets a vote in the full Senate as early as next week but partisanship over health care and a number of other hot button issues could slow the vote down. Given the conversations happening now on USAID's reorganization, it is critical that he has a seat at the table as quickly as possible.

3. STATE DEPARTMENT & USAID EMPLOYEE SURVEY IS OUT. As part of the State Department and USAID's "redesign," Secretary Tillerson had sent out a survey to all 75,000 employees.

* Attached please see the full "Listening Report" results released this week. What struck me is the clarity of mission among USAID employees versus State Department employees and not surprising, the overwhelming concern about budget cuts.
* Below we have provided a summary of our own analysis. Worth a quick look.

A few of us met today with the new Chief of Staff at USAID and lead staffer handling the "redesign" in an effort to set up a process for USGLC leadership to participate in the discussions. I will keep you posted on that effort. We also had a meeting with one of the President's senior political advisors who was impressed with the breadth of the coalition and offered to make sure a "wider array of the right voices would be heard when these budget decisions were being made." Frankly, I think he was surprised to see the wide political support displayed.

Watch for a full Budget Update from Lindsay tomorrow on the details from today's mark-up.

Best,

Liz
Liz Schrayer, USGLC

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Highlights from the State Department's Employee "Listening Report"

This report on an employee survey was commissioned by Secretary Tillerson in April to guide the Department's response to the Executive Order on reorganizing the Executive Branch. More than 35,000 State and USAID employees responded to the survey, which was conducted by the private consulting firm Insigniam.

After launching the survey, Tillerson announced that Deputy Secretary John Sullivan will lead a working group focused on five areas: overseas operations, foreign-assistance programs, technology, staffing, and administration. The working group's findings will be added to the final report to OMB by September 15th. We reviewed the document ahead of its formal release and here are a few highlights from the report:

1. Cuts Create Uncertainty. The potential cuts are "casting a shadow" over State and USAID, making it harder for people to perform at their highest level amid uncertainty and concerns about whether or not they'll "be next." The report recommended that the transitional period when cuts will be decided be as short as possible.

2. Clear Mission at USAID. Employees of USAID have clarity about the agency's mission and believe in it deeply. As a result, USAID employees are very concerned about a proposed reorganization that could result in losing the agency's current autonomy.

3. Uncertainty in State's Mission. While people at State are fiercely proud of their work, there is less clarity about their mission. This is in part the result of the Department's "inability to say no" when activities might be better performed by other departments or agencies.

4. Inefficient Decision-Making. Longer-standing problems created by dispersed authorities and a proliferation of special envoys makes it hard "to get things done," and creates incentives for "workarounds" rather than efficiencies, potentially reducing accountability. However, the report cautions that eliminating programs without thoughtful consideration could greatly reduce effectiveness.

5. Focus on The Field. The most effective work by USAID and State is done overseas, and the report recommends more time, personnel, and resources be devoted to the frontlines at both organizations. The report also found potential for efficiencies at scale by providing support for smaller missions from regional hubs.

6. Burden of Compliance and Earmarks. State and USAID are "good stewards of the taxpayers' money," but a disproportionate amount of work is devoted to compliance management. The report also found complaints about constraints from earmarks and recommends greater flexibility and communication with Congress.

7. Reform Workforce and Technology Policies. There is broad consensus that the most important asset at both USAID and State are its people, but, due to "chronic poor management," personnel management is also a large source of frustration. Technology and hiring practices at both agencies are not built for a 21st century workforce, and the report recommends extending the duration of assignments