State Department

The State Department's track record in managing its overseas operations has not been good; a host of internal control problems continue to plague U.S. embassies, including shortcomings in property oversight, financial management, contracting and procurement, training, and staffing. In this report, GAO notes that U.S. embassy officials in Panama, Barbados, and Grenada sometimes failed to follow State Department guidance and procedures for property, cashiering, procurement, and other management functions. In other cases, responsible officials were unaware of the management control requirements. Sometimes inadequate controls were blamed on former embassy officials. Inaccurate embassy reporting on internal control systems has perpetuated the management oversight problems. GAO agrees with embassy officials that staffing gaps, combined with limited resources for training, have affected management controls. Although several efforts are under way to improve management controls, the embassies have no plans for a formal program of management improvement and cost control.

GAO found that: (1) problems in personal property management at the embassies have included lack of documentation that inventory verifications and property utilization surveys had taken place, inadequate separation of duties, and failure to fully document and follow property management procedures; (2) financial control problems and issues have included inadequate control over cashier receipt forms, inadequate documentation of consular collections, and system weaknesses to ensure timely collection of accounts receivable and liquidation of obligated funds; (3) each embassy has weaknesses in its procurement systems; (4) the amount of formal training provided foreign service national employees at the embassies in Panama and Barbados was insufficient in several functional areas and contributed to weaknesses in post management systems; and (5) inaccurate reporting by the embassies on their internal control and management systems has perpetuated some management problems.

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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