Key Issues Concerning Department of State's New Financial Management Centers

Testimony was given concerning the Department of State's efforts to introduce additional financial management capabilities at some overseas posts. GAO noted that: (1) State expects that financial management centers will produce more timely financial information because reports will be generated locally; and (2) posts with financial centers will also be able to process their own accounting transactions and standardize information now maintained in nonstandard form. GAO found that the new approach to opening financial centers introduced the system at more locations faster but multiplied corrective actions needed at a number of posts. GAO also found that: (1) the creation of financial management centers had a major impact on regional center operations, especially concerning staffing reassignments; (2) the total cost of opening financial management centers is not being tracked; (3) special training for staff lagged behind the openings of the financial centers; and (4) there was a need to determine whether the local disbursing capability is needed and cost-effective at all the designated centers.