Is the United States prepared to respond to the international assistance needs of today and tomorrow? This blog is part of MFAN's new series, "Moving Us Closer to Operational Readiness: Critical Needs for U.S. International Assistance." This series draws on the expertise of MFAN's members to explore the specific core functions needed at the State Department to manage effective development and foreign assistance programs.
Over the course of 2025, the U.S. foreign assistance system was dramatically upended. The U.S. Agency for International Development (USAID) was dismantled, thousands of active agreements were canceled or put on hold, and some surviving development functions were transferred to the Department of State. The staff and organizational changes have had major impacts on the U.S. government’s development and humanitarian expertise. Fortunately, Congress has continued to appropriate foreign assistance funding, and U.S. leaders have affirmed a commitment to maintaining a role as an international assistance donor. The State Department has since launched a new America First Global Health strategy and begun committing billions of dollars to country health compacts.
In this context, the key question is how the State Department can address its critical lack of development and humanitarian expertise in order to effectively manage and implement foreign assistance programs?
Status of USAID functions at the Department of State
As described in the State Department’s Congressional Notification of March 28, 2025, the USAID’s regional bureaus were folded into State’s regional bureau structure. Food and agricultural assistance programs were merged into State’s Office of Global Food Security, and USAID’s global health programs were placed in State’s Bureau of Global Health Security and Diplomacy. USAID’s contracting, administrative, and management functions were integrated into State’s Management Bureau, while most other USAID bureaus and offices were abolished.
Thus, within a short period of time, the Department of State took over responsibility for a major expansion of its functions. As explained in the USAID 2024 Agency Financial Report, USAID was the largest aid agency in the world, with a wide array of technical programs operating in 127 countries with an annual budget of over $40 billion and more than 10,000 staff. USAID and its partners implemented thousands of programs; each agreed to and codified in Country Development Cooperation Strategies, across complex technical areas.
There are serious questions about State’s ability to carry out these functions effectively (even in scaled-back form), from the perspective of both the number and type of staff. USAID’s 10,000 personnel were responsible for a broad array of actions to plan, design, and oversee foreign assistance. State initially retained only around 300 USAID staff to absorb these additional functions, although media reports indicate that some additional staff are now being rehired. However, at the same time that State took on these additional international development responsibilities last year, it reorganized and laid off over 1,300 of its own staff, including significant cuts in staff responsible for global talent management.
Key Management Challenges at State with Absorbing USAID Functions
For the State Department to succeed in running effective foreign assistance programs, the agency must address its management and personnel challenges. A May 2025 Office of Inspector General (OIG) report evaluated the Department of State’s approach to realigning USAID functions within State. This report identified a series of concerning issues that do not bode well for State’s management of foreign assistance programs. Specifically, the report notes that “OIG has previously identified Department deficiencies related to its ability to track foreign assistance funds, establish measurable goals for foreign assistance funding, perform risk assessments, and monitor foreign assistance funds.”
The report also notes issues with strategic workforce planning, inadequate oversight of contracts and grants, identifies monitoring and evaluation as a key challenge for the Department, and raises concerns regarding State’s internal controls over property and financial management. All of these are areas that are “important considering the significant impact that the realignment of USAID functions may have on the Department,” and areas where USAID had strong expertise that has now been largely eliminated. Equally concerning, in response to OIG’s recommendation that State develop a strategic workforce plan for its reform efforts, State management indicated that it “will ensure that staffing is appropriately aligned,” without providing any details or committing to developing such a plan.
Technical Expertise in Development and Humanitarian Response
The Department of State’s capabilities are focused on its core mandate of diplomatic representation. While State manages a range of staff –– both a civil and foreign service staff and local national staff abroad –– the structure of State’s foreign service, called cones, is instructive. State Foreign Service Officers (FSOs) are assigned to one of five cones: Management; Consular; Economic; Political; and Public Diplomacy. The two cones that overlap most closely with former USAID’s responsibilities are Economic and Political, but both of these are focused principally on information gathering, analysis, and reporting to inform U.S. foreign policy. They have no responsibility or training on project design, budgeting, logistics or contract and grant management for international development and humanitarian affairs. And, as State Economic and Political officers report on a wide range of areas within their fields, they must be generalists and, therefore, do not have extensive technical knowledge in the various sectors of development. Put simply, State’s foreign service does not recruit for, train for, or manage for expertise in development assistance.
The State Department must now cultivate this staff expertise to design and implement international development programs. USAID expertise was built over decades, both in its people and in its rich library of project design documents, project reports, and “what works” evaluations. USAID recognized that development is not a single function but an ecosystem of complex, interrelated capabilities. The agency’s staff capabilities included strategic planning and policy, budgeting, technical design of projects in democracy and governance, food security, nutrition, health, education, energy, water/sanitation, environment, responding to natural and manmade disasters, procurement and logistics, monitoring and evaluation, and maintaining relations with host governments and international organizations on development issues. As with all areas of expertise, these are fields where training and institutional knowledge matter. USAID staff capabilities included strategic planning and policy, budgeting, technical design of projects in democracy and governance, food security, nutrition, health, education, energy, water/sanitation, environment, responding to natural and manmade disasters, procurement and logistics, monitoring and evaluation, and maintaining relations with host governments and international organizations on development issues.
The Way Forward
While responsibility for international development and humanitarian response moved from USAID to State overnight, expertise did not. The result is a dramatic mismatch between responsibility and capacity. Designing and managing programs that track emerging pathogens, eradicate diseases, improve educational outcomes, increase economic opportunities for communities likely to migrate or susceptible to radical influence, provide early warning of humanitarian crises, or respond to increasingly volatile weather patterns, require deep expertise in the relevant subject matter. The staff must understand the science around the challenge and the evidence of what works.
Addressing difficult challenges in highly complex environments has always been tough, without any promise of success. USAID notched major achievements during its 60-year history, including contributing to smallpox eradication, fueling the green revolution, developing oral rehydration therapy, developing new trading partners, and saving millions of lives through humanitarian response. While certainly not all of its efforts were similarly successful, USAID’s successes were possible, as I’ve noted previously, because it learned over time to employ “the best lessons of modern management: evidence-based programs focused on key priorities, applying context appropriate technologies and building ownership among a broad range of stakeholders to achieve sustainability.” Such accomplishments are possible only when they are built on a foundation of technical expertise, a culture of continuous learning, and adequate workforce planning.
The State Department is reportedly moving in the direction of disbursing foreign assistance funding through more transfers to public international organizations (e.g., World Bank, UN agencies), and direct government-to-government assistance, rather than utilizing the network of contractors and grantees (termed implementing partners) long associated with USAID programs. This change in modalities, well within the Administration’s right, does not obviate the need for substantive, technical expertise. For those in State to be able to negotiate meaningful agreements likely to succeed, they need to understand the scientific, technical, and social challenges they’re trying to address, assess the political will and technical capacity of their counterparts to move in the right direction, identify measures of success and track progress, and account for funds. And, they’ll have to answer to the U.S. Congress for how they spent the funding. Writing checks without these capabilities is not “government efficiency,” –– it increases the risk of failure and fraud, making it harder to justify and defend foreign assistance to the Congress and American people.
The Department of State should develop a comprehensive strategic workforce plan that ascertains the competencies and staffing levels needed to carry out its new foreign assistance mandate, assesses current staff levels and capabilities, and lays out an approach, required resources and time frame to fill any identified gap. State should seriously consider expanding its Foreign Service Office cadre to include a new cone covering the specific capabilities needed for successfully advancing its new foreign assistance mandate.
Only with the right staff in place can State credibly chart a course for modernizing foreign assistance.
