State Department

As the lead agency for the conduct of foreign affairs, the State Department has enormous responsibilities as it works to shape a more secure, prosperous, and democratic world. A substantial part of State's nearly $2.7 billion annual budget for the conduct of foreign affairs goes for business functions. For example, State has a worldwide network of operations to maintain its headquarters and overseas posts as well as provide support for about 35 other U.S. agencies that operate overseas. State also provides security for thousands of U.S. personnel and facilities abroad. This testimony, which is based largely on GAO's performance and accountability series (GAO/OCG-99-12, Jan. 1999), focuses on the challenges facing State on the business side of its operations.

GAO noted that: (1) the major management challenges facing State are not simple; (2) they cover a wide spectrum of State's operations and responsibilities around the world; (3) if these challenges are not met, they could seriously undermine its ability to function effectively in the 21st century; (4) these challenges include: (a) enhancing the security of U.S. personnel and facilities overseas; (b) improving the quality and capability of information and financial management systems; (c) successfully integrating other foreign affairs agencies into State; (d) effectively managing the visa process to reduce the risk of fraud and abuse; and (e) modernizing its approach to relocating and housing employees overseas; (5) State has recognized these challenges and has put in place over the last two years a new leadership team to address them; (6) State has devoted resources toward formulating a strategy and establishing priorities for enhancing overseas security; (7) the Department has also embarked on an aggressive approach to addressing its long-standing information and financial management issues; (8) however, much more needs to be done to create an effective and efficient platform to facilitate the conduct of foreign affairs and to protect U.S. employees overseas; (9) the Department has been reluctant to fundamentally change the way it does business; (10) the adoption of cost-based decision-making and use of best practices are critical to the State's dealing with these challenges; and (11) furthermore, the 1993 Government Performance and Results Act can serve as an important tool to help State overcome some of the challenges it faces.