State Department and USAID FY 2024 Budget Outlook

The Office of Management and Budget (OMB) released its fiscal year (FY) 2024 budget request last month and the Department of State (DoS) and the U.S. Agency for International Development (USAID) together rank among the top five highest-funded civilian departments.

Total Discretionary Funding and Priorities

The FY 2024 budget continues to place the State Department and USAID on an upswing at the topline discretionary level, requesting $63.1B in aggregate discretionary funding, a nearly 9% increase from the FY 2023 enacted level.

Funding highlights include:

• Contains $10.4B for Diplomatic Programs, a $884M increase from FY 2023. The total includes $6.4B to support daily operations at U.S. embassies, consulates and diplomatic missions around the world and $4.1B for Worldwide Security Protection (WSP).
• Provides $10.9B for global health programs, a $370M increase above the FY 2023 enacted level. This includes more than $1.2B for infectious disease outbreak prepare, prevent, detect and respond activities, of which $500M is for the Pandemic Fund to improve global health security and pandemic preparedness.
• Request more than $3.0B for the PREPARE program, which would include a $1.6B contribution to the Green Climate Fund and a $1.2B loan to the Clean Technology Fund.
• Proposes more than $395M for U.S. global cyber and digital development initiatives, including State’s Bureau of Cyberspace and Digital Policy, USAID’s Digital Strategy, Partnership for Global Infrastructure and Investment (PGII) digital connectivity efforts and regional initiatives such as Digital Transformation with Africa.

Information Technology Budgets

Details of State’s and USAID’s IT budget are published on OMB’s IT Dashboard, giving insight into their planned IT investments, initiatives and priorities. The State Department’s FY 2024 IT budget request is over $3.5B, which would be a $151M (+4.5%) increase from the FY 2023 enacted level and $218M (6.6%) above the FY 2022 final level. USAID’s FY 2024 IT budget request comes in at $376M, placing it $26M (+7.5%) more than FY 2023 and almost $52M (+15.8%) more than the final FY 2022 level.  

Both State and USAID, like other federal agencies, allocate a portion of their total IT budgets for new development spending, known as Development, Modernization and Enhancement (DME). For FY 2024 State allocates $657M for DME, which is $99M below FY 2023 and $28M below FY 2022, decreases of 13% and 4% respectively. By contrast, USAID proposes an 18% increase in DME for FY 2024 to reach $123M. Taken together, State and USAID represent $781M in combined DME funding. (See table below.)

Noteworthy IT Programs

The details of the State Department’s and USAID’s IT investment priorities and initiatives provide some perspective on where they are planning to invest in FY 2024. These are the six largest IT initiatives across the State Department for FY 2024, including observations about budget growth and their proportion of new development spending.

• Bureau IT Support: This set of investments encompass centrally provided shared IT support services such as desktop services; telecomm, wireless & data services; peripherals; software; and any other IT infrastructure costs incurred by the various DoS bureaus. It receives an aggregate $641M for FY 2024, which is 0.9% below FY 2023 and is made up of 14% DME. Historically, Bureau IT Support had been listed as a single large initiative, but beginning with the FY 2020 budget Bureau IT Support was broken out by 33 bureaus, offices, etc. offering the same IT infrastructure support to each. It is re-aggregated here to show the comparative size and influence of these efforts on the State Department’s IT landscape.
• Consular Enterprise Infrastructure & Operations: This program maintains Consular Affairs (CA) IT infrastructure and provides technical services to support CA’s systems across 300+ locations world-wide, supporting over 45,000 servers and 4 petabytes of data. The program provides infrastructure improvements and upgrades to test environments. Funding of $524M for FY 2024 would be a $2M (+0.4%) increase from FY 2023, consisting of 24% DME funding.
• Deployment, Maintenance, and Refresh Services: Ensures domestic and overseas IT equipment is routinely updated, relocated, and/or replaced. Service includes procuring, deploying, and maintaining upgraded workstation/software packages, server, telecommunications, radio, and video collaboration. This initiative receives $330M for FY 2024, a $11M increase over FY 2023 and is categorized entirely as O&M.
• Enterprise Network and Bandwidth Services: ENBS designs, operates, maintains, secures, and modernizes the DoS IT network infrastructure and systems, enabling collaboration and information sharing across DoS and its foreign affairs partners. It receives $317M for FY 2024, an increase of $34M (+12%). This initiative is 100% Operations and Maintenance (O&M) funding.
• Information Technology Acquisitions: This initiative applies a comprehensive approach to the creation, curation and lifecycle DOS IT agreements. FY 2024 funding of $150M is a $2M increase from FY 2023. This investment is 100% DME funding.
• AIS Security Infrastructure Support Program: The AIS Security Infrastructure Support Program is the Department’s front-line defense against all form of cyber threats and ensures a safe digital environment for accomplishing the Department’s diplomacy mission.  It leverages the Directorate of Cyber and Technology Security’s program matrix to detect, react, and respond to malicious cyber activity and deliver actionable threat intelligence and vulnerability analysis to support the Department’s risk management process and IT innovation agenda. The program receives $148M for FY 2024, which is $250K (+0.2%) above FY 2023 and is 100% O&M spending.

These largest six budget line items account for more than $2.1B (54%) of State’s total requested IT budget for FY 2024. The types of work covered by these programs reveal that infrastructure and operational requirements continue to dominate State Department priorities, which is consistent with federal government-wide trends. However, there are elements of new development and overall budget growth within several of these programs, and other smaller programs, that indicate ongoing IT modernization efforts to support essential mission objectives. State’s IT programs will continue to depend upon contracted support services and commercial products to achieve these IT modernization objectives.