Sad Sad Situation for Peace Corps...

To: PCRO Community
From: Ken
Date: September 23, 2008
Re: Update on Agency Budget Crisis and Impacts on PCRO

As you are aware, the Peace Corps finds itself in a significant budget crisis brought about by the following:
1. dollar devaluation
2. rising costs of goods and services
3. the impact of the presidential election on the agency's appropriations

The Friday, September 19th, St. Petersburg Times stated, "the Peace Corps is facing its toughest financial crisis ever", an assertion that puts the current situation in perspective for an agency with our 48 year history.
Projections for Agency's losses for Fiscal Year 2008 (October 1, 2007 through September 30, 2008) due to dollar devaluation now stand at $9.2 million, with an additional $9.2 million projected to be lost in Fiscal Year 2009 (October 1, 2008 through September 30, 2009).

As a result of the upcoming presidential election, the agency will not have an approved appropriation from Congress until the spring of 2009 at the earliest, and may go the entire fiscal year without a full appropriation. In this scenario, the Peace Corps operates under what is called a "continuing resolution", essentially small checks from Congress that keeps the agency operating for weeks at a time. The challenge is that the "continuing resolution" funding levels are set based on the 2008 budget, meaning the money provided doesn't recognize dollar devaluation or the rising costs of goods and services worldwide.

As a result of this crisis, the agency has undertaken significant cuts and reductions at all levels of operations.
* In the United States, the Peace Corps has closed two regional offices (Denver and Minneapolis), eliminated HQ staff positions, eliminated and/or reduced staff travel and cut Staging to a single day event.
* To impact both U.S. and overseas costs, at least 400 less Trainees will be invited into service compared to last year.
* At the post level, cuts are being made differently by each of the 3 regions. For our region (EMA), all posts were provided a series of mandatory cuts, and then tasked to determine additional cuts necessary for each post to achieve its "budget mark" - an amount of cash the agency allocated for each post. No post can exceed its budget mark.

2009 Impact
As you will recall from my July 18th memo (attached), the number of new trainees allocated by the agency for Romania in 2009 is 39, with a programmatic focus on English Education in underserved and rural communities. Our budget mark was set at $2.54 million (compared to $2.84 million in FY 2008). Given the dollar's devaluation and inflation in Romania, essentially post is faced with the challenge of eliminating approximately a half million dollars from our budget.
In order to meet our budget mark, PCRO will be making the mandatory cuts and reductions in staff, PST, ISTs (IST, MSC, COS) and will have to make further cuts in items such as supplies, staff travel, lodging, photocopying, etc.
The 39 Trainees for 2009 will come in 3 sectors: 25 in TEFL, 7 in ENV and 7 in ID. There will be no CED Trainees.

Impact in 2010 and Beyond
Projecting ahead through this current crisis, PC/Washington advised PCRO that the Trainee Intake number for 2010 will remain at 39, resulting in a downsizing of the program by 50% over the next two years. While we have 151 PCVs on board as of today, on September 23, 2010 we anticipate having between 70-75. Downsizing will occur in other EMA posts as well.
The 39 Trainees arriving to Romania in 2010 will be in TEFL only, as post advances the evolution towards a focus on English Education in underserved and rural communities. In 2010 there will not be new trainees in ID, Environment or CED.
As you can imagine, much of this process has lead to specultation about the long-term future of PC in Romania. Unless notified otherwise, the future of PC activities in Romania beyond 2010 will be decided by the next administration of PC leadership in Washington (the Director, Chief of Staff and EMA Regional Director).
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As someone who believes strongly in the Peace Corps, in what each of you bring to the PCRO program, and that Volunteers are the single best investment an American taxpayer gets for their dollar, I greatly regret having to inform you of these developments.
I fully recognize that the implementation of the agency's budget cuts and the downsizing of the PCRO program over the next two years will come with significant challenges to all of us.
That said, I can assure you that when you ask the question, "How will this impact me and my service?", the answer we're commited to providing will be, "as little as possible."
We will do everything we can to provide each current and future Volunteer with the best support and opportunity to serve in Romania.

If you have any questions regarding this memo, the background info or the situation the agency finds itself in, please do not hesitate to contact me directly.

Thank you for your service,
kg

A sampling of articles regarding the agency's situation can be found at the following locations:
*http://www.tampabay.com/opinion/editorials/article817288.ece
*http://www.courant.com/news/nationworld/hc-peacecorps0915.artsep15,0,6267599.story
*http://www.nj.com/opinion/jjournal/editorials/index.ssf?/base/editorials-1/122042311391370.xml&coll=3
*http://www.mercurynews.com/ci_10383667?source=most_emailed