State Department

The U.S. embassy in Mexico City lacks sufficient management controls to ensure full compliance with regulations and reduce its vulnerability to waste, fraud, and abuse. In less than two years, the embassy lost property, including office equipment and household furnishings, valued at $120,000. Essentially, the problem was "swept under the rug" because the embassy's records were so poor that it could not identify how the items had been lost and if employees should be held responsible. The embassy did not report its missing property to the State Department, though this was required. In addition, weaknesses in controls over cashiering have affected mission operations since the mid-1980s. Moreover, the embassy has not established a formal competition advocacy program to ensure that contracts are fully competed. Other problems at the embassy include a lack of compliance with the State Department's new residential housing standards, weaknesses in the personnel system, and a lack of effective budget controls. Although the embassy plans to correct many of these problems, GAO believes that a formal program of management improvement is needed to (1) focus senior management attention on problems and issues and (2) provide a basis for continuity as foreign service officers rotate to their next assignments and are replaced by new officers having management responsibilities in critical control areas.

GAO found that: (1) the U.S. Embassy in Mexico City does not have sufficient management controls to ensure full compliance with applicable regulations and minimize vulnerability to fraud, waste, and abuse; (2) the Embassy lost personal property valued at $120,000 in less than 2 years; (3) the Embassy could not identify how items were lost or whether employees should have been held accountable; (4) weaknesses in controls over cashiering operations have affected mission operations since the mid-1980s; (5) specific cashiering problems included failure to ensure that cashier supervisors completed training, the lack of systematic visits to consulates to ensure compliance, and inadequate control over consular collections; and (6) the Embassy has not established a formal competition advocacy program to ensure that contracts are fully competed.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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