Overseas Allowances and Benefits

The overseas allowances and benefits system has grown dramatically since World War II, reflecting an increased U.S. presence overseas. Civilian employees are authorized benefits and allowances either to reimburse them for extraordinary living costs abroad and/or to recruit and retain them for service overseas. In 1974 and 1975, GAO reported that different statutory and regulatary authorities have created a fragmented system resulting in inequities, inefficiencies, and low employee morale. GAO evaluated actions taken on the prior recommendations to make the overseas allowances and benefits system more uniform and equitable.

The review of the overseas benefits and allowances system reveals that system problems identified by GAO in 1974 and 1975 still exist. As a result, the system continues to be inefficient and does not promote equitable treatment of civilian employees stationed overseas. The Interagency Committee on Overseas Allowances and Benefits for U.S. Employees (IAC) was not the independent policymaking body GAO envisioned to conduct an objective and thorough review of the benefits and allowances system. IAC failed to adequately respond to system weaknesses because it stressed system uniformity at any cost. GAO believes uniformity is important, but the work of IAC should have also focused on the type of benefit and allowance required to meet specific overseas location needs at the lowest cost. System problems identified in 1974 and 1975 that still remain include: (1) legislative differences exist; (2) individual benefits and allowances are not specifically related to an identified purpose; and (3) cost and program data are not available to facilitate decisionmaking or to explain system differences to employees. Moreover, a ceiling on overseas holidays has not been established as recommended. GAO still believes that a more systematic approach is desirable for an equitable overseas benefits and allowances system.