Time for the Pentagon to create a system to better track its spending

Defense Secretary James Mattis is due to testify on the fiscal 2019 budget proposal in the coming weeks. Smart policymakers might rightly ask this question: Is the $9 billion the United States spends annually on overseas security cooperation programs in over 200 countries working?

These programs range from capacity-building in sensitive hotspots like Iraq and Ukraine to National Guard exchange programs in Tonga and the Bahamas. Many of these efforts are highly sensitive, support U.S. military operations, and occasionally put U.S. troops in harm’s way. But if policymakers were to ask if they working and what the return on our investment is, currently, they would get no good answer.

{mosads}The Defense Department has no established capability to evaluate whether its overseas assistance efforts are working, to identify problems or lessons learned, or to inform best practices for future missions. It has, in other words, no assessment, monitoring and evaluation (AM&E) system. That was intended to change when the Pentagon issued its first department-wide AM&E framework in early 2017, but implementation has lagged.

Meanwhile, the White House Office of Management and Budget released guidelines in January that set AM&E standards for all U.S. foreign assistance agencies. The guidance was mandated by the Foreign Aid Transparency and Accountability Act (FATAA), sponsored by Rep. Ted Poe (R-Texas), Rep. Gerry Connolly (D-Va.), Sen. Marco Rubio (R-Fla.) and Sen. Ben Cardin (D-Md.), and signed into law in July 2016.

These new standards represent an important landmark. They establish a mandate for all U.S. agencies providing assistance to foreign recipients to put in place specific policies and procedures for monitoring and evaluation, to apply rigorous AM&E methodologies rooted in international best practices, and to share evaluation outcomes across interagency stakeholders. These requirements were praised by aid effectiveness advocates, including the Modernizing Foreign Assistance Network, and represent a generational leap ahead for most U.S. government providers of foreign assistance.

Where the Office of Management and Budget guidelines fall short coincides with the Pentagon’s biggest implementation hurdle, which is sufficient resourcing of AM&E efforts. The guidelines outline principles for AM&E that include “adequate resources for monitoring and evaluation, including financial and human resources,” but issue no guidance on what constitutes adequate resourcing. International best practices suggest that AM&E should be resourced at 3 percent to 5 percent of overall program costs.

Likewise, the most significant shortfall of the Pentagon’s AM&E policy, which otherwise sets a new standard for the process in this arena, was that it simply directed that the department “will ensure sufficient funds are made available” without defining sufficiency. As the Pentagon seeks to implement its policy, we can see how this shortcoming breeds practical challenges. The department has so far failed to establish an independent office for evaluation, which is an international best practice specifically mandated by the Pentagon’s framework, and one that is essential to ensuring the integrity and credibility of evaluations.

Moreover, the department has failed to erect an AM&E system that brings the requisite funding, manpower or expertise to the challenge. Instead, the Pentagon has issued only small-scale AM&E contracts to traditional department contractors or federally-funded research and development centers, which lack substantial experience and expertise in the AM&E field. Troublingly, the Pentagon’s recent budget proposal allocates only $6 million to AM&E of its security cooperation programs, which is less than 0.02 percent of the total security cooperation budget.

As the FATAA guidelines take effect, both Congress and the Pentagon should refocus attention on the implementation of the department’s AM&E framework. Congress, which included a binding legal requirement for an AM&E framework in the 2017 National Defense Authorization Act, should conduct sustained and targeted oversight of the department’s implementation. Moreover, it should closely scrutinize budget requests to ensure a sufficient funding commitment to AM&E, beginning by intervening to bolster the AM&E allocation in the fiscal 2019 budget.

The Pentagon should prioritize three measures to jumpstart its implementation of a strong AM&E system. First, it should establish an independent evaluation office that can orchestrate department-wide evaluations and ensure the results reach senior policymakers. Second, it must adequately resource the AM&E enterprise, both by funding evaluations and by supporting training on key planning and design concepts in combatant commands, military services and other stakeholders. Third, it should make an institutional commitment to moving beyond its traditional contractors and federally-funded centers to take advantage of the expertise among professional AM&E organizations that have long supported evaluations in the development community.

For many years, the Pentagon has been criticized because it has been unable to conduct a full audit to answer this question: Where is your money going? Yet, as the department progresses toward financial auditability, it remains unable to answer an equally important question: What are we getting for our money? As the concept of working “by, with and through” foreign partners to accomplish military objectives becomes increasingly central to U.S. national security strategy, these results are more consequential than ever.

Taking its cue from the administration’s important new AM&E guidance, Congress and the Pentagon should work together to accelerate the creation of an AM&E system that can guide smarter investments and better outcomes for our national security.

Tommy Ross is a senior associate at the Center for Strategic and International Studies. He served as the first deputy assistant secretary for security cooperation at the U.S. Department of Defense from 2014 to 2017 and in senior positions in Congress overseeing national security policy.