State Department

GAO reviewed efforts by the State Department to improve internal controls over its overseas procurement system. Two recent reports by the Department have cited serious weaknesses with this system. This report summarizes the (1) procurement weaknesses cited by the reports and (2) actions taken to correct them.

GAO found that: (1) various units in the State overseas procurement system lacked established organizational roles to ensure compliance with procurement regulations and procedures and needed to be better integrated with domestic procurement operations; (2) State lacked an automated data system to provide information on contracts and contract modifications and to meet mandatory reporting requirements; (3) in January 1990, State decided that it would develop an automated system designed to meet minimum legal requirements, provide periodic reports, and establish reporting criteria; (4) some U.S. and foreign national personnel were not always qualified or adequately trained to make procurement decisions at overseas posts; (5) State's development of a name warrant system in accordance with federal regulations should lessen the vulnerability of overseas procurements to fraud, waste, and abuse; (6) instances of unauthorized purchases and exclusive sole-source buying, unauthorized personnel entering into contracts, and improper practices to retain funds past their expiration date, indicated that personnel at overseas posts frequently did not comply with procurement laws and regulations; (7) overseas posts used improper procurement and fiscal practices to retain funds past their expiration date and failed to fully record obligations for fixed-priced contracts; and (8) State's overseas procurement system will remain at risk for fraud, waste, and abuse for some time, since steps for improving internal controls are in early stages of implementation and will not completed until fiscal year 1992 or later.