Overseas Presence
Systematic Processes Needed to Rightsize Posts and Guide Embassy Construction Gao ID: GAO-03-582T April 7, 2003More than 60,000 Americans and foreign nationals work at about 260 diplomatic posts worldwide. Since the mid-1990s, GAO has highlighted the need for State and other federal agencies to establish a systematic process for determining their overseas staffing levels, particularly after the 1998 bombings of two U.S. embassies in Africa. GAO was asked to discuss three reports, including two being issued today, on rightsizing--that is, realigning the number and location of staff--at U.S. embassies and consulates: (1) the rightsizing framework GAO developed last year, (2) follow-on work to further test the framework, and (3) the processes to project staffing levels for new embassy construction and the proposals to share construction costs among U.S. agencies.
In July 2002, GAO presented a rightsizing framework outlining a systematic approach for assessing overseas workforce size that considers security, mission, and cost. GAO recommended that the Office of Management and Budget (OMB) use the framework as part of the administration's rightsizing initiative, and OMB is now using it to review posts in Europe and Eurasia. After initially applying the framework at the U.S. Embassy in Paris, GAO further tested it at other U.S. embassies in three developing countries in West Africa to address concerns about whether the framework could be applied uniformly at all posts. GAO's analysis indicates that the rightsizing framework can be applied at U.S. embassies in developing countries. GAO also found that U.S. agencies' staffing projections for new embassy compounds are developed without a systematic approach or comprehensive rightsizing analyses. Moreover, State provides little formal guidance on factors to consider when projecting staffing needs. Further, there is a lack of documentation on projection exercises and factors staff considered when developing projections. Finally, staffing projections are not consistently vetted with all other agencies' headquarters. These and other deficiencies could lead the government to build wrong-sized buildings. OMB is leading an interagency committee to develop a cost-sharing mechanism that would provide more discipline when determining overseas staffing needs and encourage agencies to think more carefully before posting staff overseas. Numerous issues will need to be resolved for such a program to be successful, including how to structure the program and how payments will be made.
GAO-03-582T, Overseas Presence: Systematic Processes Needed to Rightsize Posts and Guide Embassy Construction
This is the accessible text file for GAO report number GAO-03-582T
entitled 'Overseas Presence: Systematic Processes Needed to Rightsize
Posts and Guide Embassy Construction' which was released on April 07,
2003.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products‘ accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
Testimony:
Before the Subcommittee on National Security, Emerging Threats, and
International Relations, Committee on Government Reform,
House of Representatives:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 1 p.m., EST:
Monday, April 7, 2003:
Overseas Presence:
Systematic Processes Needed to Rightsize Posts and Guide Embassy
Construction:
Statement of Jess T. Ford, Director
International Affairs and Trade:
GAO-03-582T:
GAO Highlights:
Highlights of GAO-03-582T, testimony before the Subcommittee on
National Security, Emerging Threats, and International Relations, House
Committee on Government Reform
Why GAO Did This Study:
More than 60,000 Americans and foreign nationals work at about 260
diplomatic posts worldwide. Since the mid-1990s, GAO has highlighted
the need for State and other federal agencies to establish a systematic
process for determining their overseas staffing levels, particularly
after the 1998 bombings of two U.S. embassies in Africa. GAO was asked
to discuss three reports, including two being issued today, on
rightsizing....that is, realigning the number and location of
staff...
at U.S. embassies and consulates: (1) the rightsizing framework GAO
developed last year, (2) follow-on work to further test the framework,
and (3) the processes to project staffing levels for new embassy
construction and the proposals to share construction costs among U.S.
agencies.
What GAO Found:
In July 2002, GAO presented a rightsizing framework outlining a
systematic approach for assessing overseas workforce size that
considers security, mission, and cost. GAO recommended that the Office
of Management and Budget (OMB) use the framework as part of the
administration‘s rightsizing initiative, and OMB is now using it to
review posts in Europe and Eurasia.
After initially applying the framework at the U.S. Embassy in Paris,
GAO further tested it at other U.S. embassies in three developing
countries in West Africa to address concerns about whether the
framework could be applied uniformly at all posts. GAO‘s analysis
indicates that the rightsizing framework can be applied at U.S.
embassies in developing countries.
GAO also found that U.S. agencies‘ staffing projections for new embassy
compounds are developed without a systematic approach or comprehensive
rightsizing analyses. Moreover, State provides little formal guidance
on factors to consider when projecting staffing needs. Further, there
is a lack of documentation on projection exercises and factors staff
considered when developing projections. Finally, staffing projections
are not consistently vetted with all other agencies‘ headquarters.
These and other deficiencies could lead the government to build
wrong-sized buildings.
OMB is leading an interagency committee to develop a cost-sharing
mechanism that would provide more discipline when determining overseas
staffing needs and encourage agencies to think more carefully before
posting staff overseas. Numerous issues will need to be resolved for
such a program to be successful, including how to structure the program
and how payments will be made.
What GAO Recommends:
GAO recommends that OMB expand the use of our rightsizing framework and
that State adopt additional measures to ensure that U.S. agencies take
a systematic approach to assessing workforce size that considers
security, mission, and cost factors. GAO also recommends that State
develop guidance on a systematic approach for developing and vetting
staffing projections for new diplomatic compounds.
Both OMB and State agreed with GAO‘s recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-582T.
To view the full report, including the scope and methodology, click on
the link above. For more information, contact Jess Ford at (202)
512-4128 or fordj@gao.gov.
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here to discuss GAO‘s work on rightsizing the U.S.
overseas presence--that is, deciding the number and types of personnel
that should be assigned to our embassies and consulates. The U.S.
overseas presence is significant--more than 60,000 Americans and
foreign nationals representing approximately 40 U.S. departments and
agencies overseas work at about 260 diplomatic posts worldwide. Since
the mid-1990s, we have highlighted the need for the Department of State
and other federal agencies to establish a systematic process for
determining their overseas staffing levels. The administration, through
the President‘s Management Agenda,[Footnote 1] has directed all
agencies operating overseas to rightsize their presence. The
administration‘s initiative aims to put the right people in the right
places overseasæand to station the minimum number necessaryæto meet
U.S. foreign policy goals. Because of the security threats facing many
of our embassies, which are heightened by the current war in Iraq, as
well as changes in foreign policy missions and priorities and the high
costs of maintaining our significant presence, this effort is vitally
important.
Today I will discuss the three reports we have issued on rightsizing
issues since I testified before this subcommittee almost a year
ago,[Footnote 2] two of which are being released today.[Footnote 3]
These reports describe (1) the rightsizing framework we developed last
year, (2) the results of applying the framework in developing
countries, and (3) the processes used to project staffing levels for
new embassy construction and proposals to share construction costs
among U.S. agencies.
Summary:
Because the U.S. government does not have a sound process for
determining overseas staffing requirements, in July 2002 we presented a
rightsizing framework[Footnote 4] that provides a systematic approach.
The framework is a set of questions designed to link staffing levels to
three critical elements of overseas diplomatic operations: (1)
physical/technical security of facilities and employees, (2) mission
priorities and requirements, and (3) cost of operations. This is the
same framework that I described in testimony before this subcommittee
in May 2002. Our framework provides guidance for assessing overseas
workforce size and identifying options for rightsizing by using a set
of standard criteria to help ensure greater accountability and
transparency. Therefore, we recommended that the Office of Management
and Budget (OMB) use it as a basis for assessing staffing levels as
part of the administration‘s rightsizing initiative. OMB is using our
framework in its ongoing review of staffing at embassies and consulates
in Europe and Eurasia. (See app. 1 for our rightsizing framework.):
Following our July report and in response to your request, we examined
whether our framework could be applied at other U.S. embassies in
developing countries. We are issuing a report on this work
today.[Footnote 5] Our analysis of three embassies we visited in West
Africa indicates that the rightsizing framework can be applied at U.S.
embassies in developing countries. Officials in State‘s Bureau of
African Affairs and other geographic bureaus agreed that broad
application of the framework and its corresponding questions would
provide a logical and commonsense approach to systematically
considering rightsizing issues in both developed and developing
countries. We are recommending that the Director of OMB, in
coordination with the Secretary of State, expand the use of our
framework in assessing staffing levels at all U.S. embassies and
consulates. We are also recommending that the Secretary of State
include the framework as part of State‘s mission performance planning
process.[Footnote 6] In response to a draft of our report, State has
agreed to incorporate elements of the framework into its future
planning processes.
Today we are also issuing a report that discusses how the lack of a
systematic process for determining staffing requirements can have
serious repercussions.[Footnote 7] State has embarked on a multiyear,
multibillion-dollar facility replacement program. The size and cost of
these facilities depend on the staffing projections developed by U.S.
agencies. We found that staffing projections for new embassy compounds
are developed without a consistent, systematic approach or
comprehensive rightsizing analyses. Moreover, State headquarters
provides little formal guidance to embassy teams--those who develop the
projections--on factors to consider when projecting staffing needs, nor
does it stress the importance of accurate projections. Further
complicating the process is the frequent turnover of embassy personnel
responsible for developing projections, combined with posts‘ failure to
document how projections were developed or the underlying support for
staffing decisions. Finally, staffing projections are not consistently
vetted with all other agencies‘ headquarters. To help ensure that the
U.S. government builds rightsized facilities, we are recommending
adoption of a more disciplined and systematic process for projecting
staffing requirements. In comments on a draft of our report, State
agreed to implement our recommendations.
The report also discusses the administration‘s plan to require agencies
to pay a greater share of the costs associated with their overseas
presence, which could include the costs of embassy construction.
Currently, most agencies are not required to pay for new embassy
construction. The administration believes that implementing such a plan
could encourage all agencies to weigh cost considerations more
carefully before posting personnel overseas. OMB is leading an
interagency effort aimed at creating a cost-sharing mechanism. It may
be reasonable to expect agencies to share the costs of new embassy
construction, but there are many factors and questions to consider
before an effective and equitable cost-sharing program can be
implemented.
Background:
Following the 1998 terrorist bombings of two U.S. embassies in Africa
that resulted in more than 220 deaths and 4,000 injuries, a series of
high-level and independent studies called for the reassessment of
staffing levels at U.S embassies and consulates.[Footnote 8] In August
2001, the President‘s Management Agenda directed all agencies to
rightsize their overseas presence to the minimum personnel necessary to
meet U.S. policy goals.
In May 2002, we testified before this subcommittee on a rightsizing
framework we developed to guide decisions on the appropriate number of
staff to be assigned to a U.S. embassy.[Footnote 9] The framework
includes questions about (1) the security of embassy buildings, use of
existing space, and vulnerability of staff to terrorist attack; (2)
justification of agency staffing levels relative to embassy priorities
and the extent to which it is necessary for each agency to maintain or
change its presence in a country; and (3) development and consolidation
of cost information from all agencies at a particular embassy to fully
document operational costs and permit cost-based decision making. Our
framework also includes questions that assess the feasibility of
rightsizing options, such as reassigning staff to the United States or
to regional centers and competitive sourcing.[Footnote 10]
In addition to recommending that agencies rightsize their overseas
presence, one group of experts recommended major capital improvements
to U.S. overseas facilities. In response, State initiated a major
building program to provide new facilities at about 185 locations
worldwide. This is a large-scale program that will cost an estimated
$16 billion to complete. State received close to $2.6 billion for new
embassy compound construction in fiscal years 1999 through 2003 and has
requested approximately $760 million for projects in fiscal year 2004.
Figure 1 shows the locations where State plans to build new compounds
with these funds.
Figure 1: Map of New Embassy Compound Construction Projects, Fiscal
Years 1999 through 2004 Funding:
[See PDF for image]
Note: The facilities in Cape Town, Istanbul, and Surabaya are U.S.
consulates. We did not include other projects, such as the construction
of new annex buildings on existing compounds, for which State has
received or requested funding during this period.
[A] Indicates new compound projects for which State has requested
funding in fiscal year 2004.
[End of figure]
GAO‘s Rightsizing Framework and Its Use:
As a follow-up to our testimony on developing a rightsizing framework,
in July 2002 we issued a report that presented the framework in more
detail.[Footnote 11] We recommended that OMB use the framework as a
basis for assessing staffing levels as part of the administration‘s
rightsizing initiative, starting with its planned assessments of
staffing levels and rightsizing options at U.S. embassies in Europe and
Eurasia. OMB adopted the basic elements of our framework in its ongoing
assessment of staffing at these posts. OMB adapted the framework into a
questionnaire, which it sent to all U.S. agencies at all posts in this
region. It expects to finish analyzing responses to the questionnaire
later this year. More recently, OMB has convened an interagency
rightsizing committee comprising agency staff from throughout the
federal government to 1) reach agreement on a common set of criteria to
be applied when assessing staffing at posts worldwide, and 2) develop
standard accounting procedures for assessing embassies‘ operating
costs.
In addition, Mr. Chairman, other agencies have taken rightsizing
initiatives that are consistent with our framework. For example,
State‘s Bureau of European and Eurasian Affairs has urged chiefs of
mission[Footnote 12] to review all current and future staffing requests
filed under National Security Decision Directive number 38 (NSDD-38)
’through the optic of rightsizing and regionalization.“[Footnote 13] In
addition, the Department of the Treasury now requires that all
proposals for adding staff positions overseas be accompanied by an
analysis of the costs associated with that position. For the first
time, the U.S. Agency for International Development is pursuing a
strategic human capital initiative, and has sought GAO‘s advice on how
to use our framework to align its staffing overseas. We have also
briefed others on the framework at their request, including geographic
bureaus at State, the OMB-led interagency rightsizing task force, and
congressional staff. In addition, State‘s Office of the Inspector
General has incorporated a standard set of rightsizing questions in its
methodology for conducting post inspections. These questions
incorporate the basic elements of, and include some of the same
questions as, our rightsizing framework. Finally, State recently
purchased a former military hospital in Frankfurt, Germany, in part as
a rightsizing effort to provide a secure facility for personnel who
furnish diplomatic, programmatic, and administrative services to
embassies throughout Europe, the Middle East, and Africa. At your
request, we are currently reviewing State‘s plans for this facility,
which we will report on later this year.
State has expressed concerns about the relative importance assigned to
security, mission, and cost in our framework. State believes the most
important question for decision makers is whether the United States has
a compelling reason to assign staff to a particular location, noting
that it may be necessary to station staff in certain locations despite
security concerns and high costs. We agree that in some circumstances,
the mission benefits of stationing staff in a certain location may
carry more weight than either security or cost considerations. However,
there may be other circumstances where security or cost carry more
weight. For example, in testimony last month before the Senate Foreign
Relations Committee, we reported that there are serious security
concerns at many embassy and consulate facilities around the world and
that thousands of employees may be at risk.[Footnote 14] At one post we
visited, staff are assigned to a building that does not meet all of
State‘s key security standards. This building is very vulnerable to
terrorists because it is bordered on three sides by public streets and
on one side by a public gas station (see fig. 2). Decision makers need
to carefully consider the security risks to staff stationed in this
building. Our framework encourages decision makers to analyze security,
mission, and cost collectively in deciding whether they are willing to
accept the risk and pay the cost of stationing personnel overseas to
meet mission requirements.
Figure 2: Public Gas Station behind an Embassy Annex Building Poses
Security Concern:
[See PDF for image]
[End of figure]
GAO Rightsizing Framework Can Be Applied at Posts Worldwide:
Our work at three embassies in West Africa illustrates that our
framework could be used to address the importance of facility security
in making decisions to change staffing levels. It could also be used to
identify and exercise rightsizing actions and options, such as
adjusting staffing requirements, competitively sourcing certain
commercial goods and services, and streamlining warehousing operations.
For example, if the U.S. embassy in Dakar, Senegal, used our framework
to complete a full and comprehensive analysis of the services it
provides or could provide to other embassies in the region, in
conjunction with analyses of mission priorities and requirements of
other embassies in West Africa, then staffing levels could be adjusted
at some of the region‘s posts. One rightsizing option suggests
assessing the feasibility of competitively sourcing the work of
painters, upholsterers, electricians, and others currently employed by
the embassy to yield cost savings and reduce staff requirements. This
could have a particularly significant impact at Embassy Dakar, which
employs more than 70 staff working in these types of
positions.[Footnote 15] Applying elements of the rightsizing framework
and the corresponding questions collectively can lead decision makers
to rightsizing actions and other options. Figure 3 illustrates the
application of the framework at Embassy Dakar.
Figure 3: Applying Rightsizing Framework and Corresponding Questions at
U.S. Embassy Dakar, Senegal:
[See PDF for image]
[End of figure]
In our report released today, we are recommending that OMB, in
coordination with State, ensure that application of our framework be
expanded as a basis for assessing staffing levels at embassies and
consulates worldwide. In comments on a draft of our report, OMB agreed.
In addition, in light of State‘s predominant role in conducting foreign
policy and the responsibilities of chiefs of missions at overseas
posts, it is critical that State strengthen its management planning
processes by systematically addressing rightsizing issues. Therefore we
are recommending that State adopt the framework as part of its mission
performance planning process. State generally agreed with our
recommendation.
Systematic Effort to Project Staffing Needs for New Embassies Is
Lacking:
Planning for the construction of new embassies illustrates the
importance of having a systematic process for determining staffing
levels. The size and cost of new facilities are driven by the number of
staff and the type of work they do. Therefore, it is imperative that
staffing levels be projected as accurately as possible. This is
difficult because it requires managers to project staffing needs 5 to 7
years in the future. State‘s Bureau of Overseas Buildings Operations
(OBO) has designed a reasonable process for developing staffing
projections needed to design buildings that are the right size, but we
found this process was not adopted uniformly across all of the posts
and geographic bureaus that we studied.[Footnote 16] In addition, State
is not providing embassies with sufficient guidance on factors to
consider in developing staffing projections. Agencies at the posts we
contacted lacked a systematic approach, such as our framework, to
conduct rightsizing analyses. Moreover, none of the posts we contacted
conducted a rightsizing analysis of existing staffing levels prior to
projecting future requirements. Such an analysis would help identify
options for adjusting staffing levels for new embassies. We also found
little evidence that staffing projections were consistently vetted with
all other agencies‘ headquarters. Finally, the process was further
complicated by the frequent turnover of embassy personnel who did not
maintain documentation on the projection process, as well as breakdowns
in communication among multiple agencies.
Before I discuss our findings in more detail, let me explain the
process OBO designed to help ensure that new compounds are designed as
accurately as possible. Developing staffing projections is a key
component of the planning process for new embassy compounds. OBO‘s
projection process encourages the active participation of embassy
personnel, officials in State‘s geographic bureaus,[Footnote 17] and
officials from all other relevant federal agencies (see fig. 4 for
OBO‘s staffing projection process). It also calls on embassy management
and geographic bureaus to review and validate all projections before
submitting them to OBO. Embassies and geographic bureaus generally have
the opportunity to submit staffing projections several times before
they are finalized. However, OBO will not accept changes after the
projections are final because this could result in construction delays
and additional costs.
Figure 4: Components of OBO‘s Staffing Projection Process:
[See PDF for image]
[End of figure]
Efforts to Develop Staffing Projections Vary Significantly across
Embassies and Geographic Bureaus:
Staffing projection exercises were not consistent across the posts we
contacted, and indeed, State officials acknowledged that efforts to
develop and validate projections were informal and undisciplined. Some
management teams (the chiefs of mission, deputy chiefs of mission, and
administrative officers) were more engaged in the projection process
than others. For instance, at several posts we contacted, chiefs of
mission or deputy chiefs of mission led interagency--or country team--
meetings to discuss the post‘s long-term priorities and the staffing
implications. However, management teams at other posts we contacted
were less engaged. At the U.S. embassy in Tbilisi, Georgia, management
did not document recent growth in staffing levels, which led to final
projections that were too low. Therefore, the new facility may be
overcrowded upon opening, according to embassy officials. If embassy
and geographic bureau officials communicated earlier to OBO the
likelihood of large staffing increases by the time construction was
completed, OBO might have been able to better accommodate these needs
in its plans.
In addition to inconsistencies in the field, we found that officials in
the geographic bureaus in Washington, D.C., whose staff are responsible
for working most closely with embassies and consulates, have varied
levels of involvement in the projection process. For example, officials
from the U.S. embassy in Beijing, China, said that representatives from
their geographic bureau in Washington, D.C., were very involved in
developing their projections. Conversely, officials at Embassy Belgrade
said State‘s geographic bureau did not request justifications for or
provide input into the final projections submitted to OBO. Based on our
review, the more these officials were involved in the process, the more
confidence we had that their projections were accurate.
Embassies Do Not Receive Consistent, Formal Guidance on Staffing
Projection Process and Importance of Rightsizing:
Our analysis indicates that State is not providing embassies with
sufficient formal guidance on important timelines in the projection
process or factors to consider when developing staffing projections for
new embassy compounds. Officials from each of the 14 posts we contacted
said their headquarters bureaus had not provided specific, formal
guidance on key factors to consider when developing staffing
projections. Although OBO informed the geographic bureaus that final
projections for fiscal year 2004 funding were due in spring 2002,
officials at some of the posts we examined did not realize that
additional requirements they might submit at a later date would not
result in a larger-sized building.
According to OBO, individual embassies should have conducted
rightsizing exercises before submitting the staffing projections used
to develop and update the Long-Range Overseas Buildings Plan, a
planning document that outlines the U.S. government‘s overseas
facilities requirements and guides implementation of State‘s expansive
and unprecedented overseas construction program.[Footnote 18] In
addition, in January 2002, OBO advised all geographic bureaus that
staffing projections should incorporate formalized rightsizing
initiatives early in the process so that building designs would
accurately reflect embassy needs. However, OBO‘s mandate is to manage
property, and it is not in a position to know what processes the
geographic bureaus use when developing staffing projections. Indeed,
OBO officials stated that they cannot hold the geographic bureaus
accountable for policy-related decisions and can only assume the
bureaus have incorporated rightsizing exercises into the projection
process.
We found that agencies at the posts we examined did not conduct
comprehensive rightsizing analyses when determining future staffing
requirements. Decision makers did not analyze existing positions before
projecting future requirements and did not consider rightsizing
options, such as competitive sourcing or relocating certain positions
to the United States or regional centers. In addition, we found that
most agencies with staff overseas did not consistently consider
operational costs when developing staffing projections. In general, for
these posts, rightsizing exercises were largely limited to predictions
of future funding levels and workloads.
Little Evidence of Long-term Staffing Assessments:
At each of the seven posts we visited, we found little or no
documentation that staff conducted comprehensive assessments of the
number and types of people they would need in the year that their new
facility would open. Officials from several of these posts told us they
had considered factors such as operating costs or the potential to
streamline administrative functionsæyet they did not consistently
document their analyses or the rationales for their decisions.
Moreover, we found little or no documentation explaining how previous
projections were developed or the justifications for these decisions.
As a result, future management teams will not have accurate information
on how or why previous decisions were made when they update and
finalize staffing projections.
Geographic Bureaus Do Not Consistently Vet Staffing Projections:
According to OBO, the relevant geographic bureaus are expected to
review and verify individual embassies‘ staffing projections and
confirm these numbers with other agencies‘ headquarters before they are
submitted to OBO. However, we found that the degree to which staffing
projections were reviewed varied. In addition, we found little evidence
that staffing projections were consistently vetted with all other
agencies‘ headquarters to ensure that the projections were as accurate
as possible. Indeed, State officials acknowledged that (1) State and
other agencies‘ headquarters offices are not required to conduct formal
vetting exercises once embassies submit their projections; (2) there is
no formal vetting process; and (3) geographic bureaus expect that
officials in the field consult with all relevant agencies and therefore
the bureaus rarely contact agency headquarters officials.
Additional Factors Complicate Staffing Projection Process:
We found additional factors that complicate the staffing projection
process. First, frequent turnover of embassy personnel responsible for
developing staffing projections disrupts continuity in the projection
process. Embassy staff may be assigned to a location for only 2 years,
and at some locations, the assignment may be shorter. Given that
personnel responsible for developing the projections could change from
year to year and that posts may go through several updates before the
numbers are finalized, the projection process lacks continuity. Staff
turnover combined with little formal documentation may prevent
subsequent embassy personnel from building upon the work of their
predecessors.
Second, we found that coordinating the projected needs of all agencies
could be problematic. Following the 1998 embassy bombings, a law was
passed requiring that all U.S. agencies working at posts slated for new
construction be located in the new compounds unless they are granted a
special co-location waiver.[Footnote 19] However, agencies are not
required to submit these waiver requests prior to submitting their
final staffing projections to OBO. To ensure that OBO has the most
accurate projections, waiver requests must be incorporated early in the
staffing projection process so that OBO is not designing and funding
buildings that are too large or too small. Post officials acknowledged
that these decisions must be made before the staffing projections are
finalized. In Yerevan, for example, the Department of Agriculture
office projected the need for 26 desks in the new chancery, yet
Agriculture officials in Yerevan plan to use only 13 of these desks and
to locate the remaining personnel in their current office space.
However, Agriculture has not yet requested a co-location waiver for
these remaining 13 positions. If Agriculture receives a waiver and
proceeds according to current plans, OBO will have designed space and
requested funding for 13 extra desks for Agriculture staff.
Finally, separate funding requirements for USAID annexes could
complicate the projection process. In compounds where USAID is likely
to require desk space for more than 50 employees, USAID attempts to
secure funding in its own appropriations for an annex building on the
compound.[Footnote 20] However, officials from at least two of the
posts we examined had trouble determining where USAID would be located,
which could delay planning and disrupt OBO‘s overall plan for
concurrent construction of the USAID annexes with the rest of the
compounds. For example, at Embassy Yerevan, confusion among USAID
officials in Washington and the field over whether USAID would fund a
separate annex has caused annex construction and funding to fall behind
OBO‘s schedule. Therefore, USAID may be forced to remain at a less
secure facilityæat an additional costæuntil its annex is completed,
unless alternative arrangements can be made. In addition, chancery and
USAID annex construction has not proceeded on the same schedule in some
countries because funding for USAID‘s annexes is behind schedule.
According to USAID officials in Washington, D.C., two-track
construction could lead to security concerns, work inefficiencies, and
additional costs.
To ensure that U.S. agencies are conducting systematic staffing
projection exercises, we are recommending that the Secretary of State
(1) provide embassies with formal, standard, and comprehensive guidance
on developing staffing projections; (2) require chiefs of mission to
maintain documentation on the decision-making process including
justifications for these staffing projections; and (3) require all
chiefs of mission and geographic bureaus to certify that the
projections have been reviewed and vetted before they are submitted to
OBO. In comments on our draft report, State agreed to implement our
recommendations.
Efforts to Implement a Capital Cost-sharing Mechanism:
As part of the President‘s Management Agenda, OMB is leading an effort
to develop a cost-sharing mechanism that could require agencies that
use U.S. overseas facilities to pay a greater share of the costs
associated with their overseas presence. The administration believes
that requiring agencies to pay a greater portion of the costs
associated with their presence could give them an incentive to
scrutinize long-term staffing more thoroughly when assessing their
overseas presence. OMB officials also believe greater cost sharing
could more clearly link the costs of new facilities that result
directly from agencies‘ presence.
State historically has been responsible for funding the construction
and maintenance of U.S. embassies and consulates, while most other U.S.
government agencies traditionally have not been required to help fund
capital improvements to overseas facilities. In 1999, the Overseas
Presence Advisory Panel noted a lack of cost sharing among agencies
that use overseas facilities, particularly for capital improvements. As
a result, the panel proposed the development of cost-sharing
arrangements to help fund construction of new facilities. In summer
2000, an interagency body formed to develop a capital cost-sharing
mechanism recommended that agencies be assessed a surcharge based on
the space they actually use in overseas facilities, but this plan was
never implemented. Recently, State proposed a cost-sharing program that
would require agencies to fund an annual share of the capital
construction program based on their respective proportions of total
U.S. overseas staffing. State believes that, in addition to generating
funds for the construction program, linking the costs of capital
construction to agency staffing levels would provide incentive for all
agencies overseas to initiate rightsizing actions.
The administration is committed to implementing a new cost-sharing
program by fiscal year 2005 that would require agencies to pay a
greater portion of the total costs associated with their overseas
presence, which could include requiring agencies to help fund the cost
of new embassy construction. In January 2003, OMB developed a virtual
budget for how much each agency would be charged in fiscal year 2004
based on State‘s capital cost-sharing proposal.[Footnote 21] During
2003, OMB is requiring agencies to complete a census of the total
overseas staffing. Also during 2003, OMB will lead an interagency
committee to develop a mechanism for capital cost sharing.
Mr. Chairman, it may be reasonable to expect that agencies pay for all
U.S. government costs associated with their presence in overseas
facilities. Moreover, charging agencies a portion of the costs of new
embassy construction may encourage them to fully consider how their
presence affects the government‘s overall costs for new embassies and
consulates. We agree with OMB, State, and the Overseas Presence
Advisory Panel that implementing a new cost-sharing arrangement may add
greater discipline to the staffing projection and rightsizing
processes. However, in deciding how costs will be shared, decision
makers at affected agencies need to develop consensus on the equity of
a new arrangement, while designing a system that is relatively easy to
administer.
Rightsizing is More Relevant than Ever:
The concept of rightsizing is as important today as it was following
the bombings of our embassies in Africa nearly 5 years ago. As figure 5
illustrates, the key elements of our rightsizing framework--security,
mission, cost, and rightsizing options--need to be considered
collectively to determine embassy staffing, and decision makers need to
be looking for alternative ways of conducting business, such as
transferring functions to the United States or to regional centers,
where appropriate. Recent events illustrate the significance of
maintaining a rightsized overseas presence:
* Security concerns continue today and are probably much greater in
view of the September 11, 2001, terrorist attacks and the ongoing war
in Iraq. Security deficiencies at many of our facilities overseas place
personnel at risk. While State‘s new embassy construction program will,
over time, help reduce the security risk, this program will take many
years to complete. In the meantime, thousands of employees will be
assigned to embassies and consulates that do not meet security
standards, placing them at risk.
* The changing needs of U.S. foreign policy will continue to affect
rightsizing initiatives. Ensuring that the U.S. government has the
right people in the right places to support U.S. goals and objectives
may require reallocation of staff among posts. Furthermore, creation of
the Department of Homeland Security, the war on terrorism, and post-war
engagement with Iraq will affect foreign policy missions and priorities
and may also require staffing adjustments.
* Maintaining a large overseas presence is an enormous expense,
particularly with current budget deficits. For example, State estimates
that it costs roughly $300,000 annually to station an employee
overseas. Moreover, plans for a multibillion-dollar, multiyear embassy
construction program highlight the importance of linking staff size to
the size and cost of new embassies and consulates.
Figure 5: Assessing Overseas Workforce Size Using GAO‘s Rightsizing
Framework:
[See PDF for image]
[End of figure]
In conclusion, our work in the past year has further demonstrated the
feasibility of achieving a systematic and comprehensive approach to
rightsizing the U.S. overseas presence. Such an approach can have
substantial payoffs if OMB, State, and other agencies operating
overseas support it. I believe we all recognize that, to be successful,
rightsizing will be a long-term effort requiring the commitment of all
agencies operating overseas. I am encouraged that the momentum for
developing a meaningful approach to rightsizing continues. Both State
and OMB have endorsed our rightsizing framework and are working
together and with other agencies to improve the process for determining
overseas staffing levels. However, to support this process, we are
recommending in our reports additional steps that agencies should take
to adopt a systematic approach that considers security, mission, and
cost factors in assessing overseas workforce size and to improve the
staffing projection processes for new embassies and consulates.
Mr. Chairman, this concludes my prepared statement. I will be happy to
respond to any questions you or other members may have.
Contacts and Acknowledgments:
For future contacts regarding this testimony, please call Jess Ford or
John Brummet at (202) 512-4128. Individuals making key contributions to
this testimony included David G. Bernet, Janey Cohen, Kathryn
Hartsburg, Lynn Moore, Ann Ulrich, and Joseph Zamoyta.
[End of section]
Appendix I: Rightsizing Framework and Corresponding Questions:
Table 1: :
Physical/technical security of facilities and employees.
* What is the threat and security profile of the embassy?.
* Has the ability to protect personnel been a factor in determining
staffing levels at the embassy?.
* To what extent are existing office buildings secure?.
* Is existing space being optimally utilized?.
* Have all practical options for improving the security of facilities
been considered?.
* Do issues involving facility security put the staff at an
unacceptable level of risk or limit mission accomplishment?.
* What is the capacity level of the host country police, military, and
intelligence services?.
* Do security vulnerabilities suggest the need to reduce or relocate
staff?.
* Do health conditions in the host country pose personal security
concerns that limit the number of employees that should be assigned to
the post?.
Mission priorities and requirements.
* What are the staffing levels and mission of each agency?.
* How do agencies determine embassy staffing levels?.
* Is there an adequate justification for the number of employees at
each agency compared with the agency‘s mission?.
* Is there adequate justification for the number of direct hire
personnel devoted to support and administrative operations?.
* What are the priorities of the embassy?[A].
* Does each agency‘s mission reinforce embassy priorities?.
* To what extent are mission priorities not being sufficiently
addressed due to staffing limitations or other impediments?.
* To what extent are workload requirements validated and prioritized
and is the embassy able to balance them with core functions?.
* Do the activities of any agencies overlap?.
* Given embassy priorities and the staffing profile, are increases in
the number of existing staff or additional agency representation
needed?.
* To what extent is it necessary for each agency to maintain its
current presence in country, given the scope of its responsibilities
and its mission?.
-Could an agency‘s mission be pursued in other ways?.
-Does an agency have regional responsibilities or is its mission
entirely focused on the host country?.
Cost of operations.
* What is the embassy‘s total annual operating cost?.
* What are the operating costs for each agency at the embassy?.
* To what extent are agencies considering the full cost of operations
in making staffing decisions?.
* To what extent are costs commensurate with overall embassy strategic
importance, with agency programs, and with specific products and
services?.
Consideration of rightsizing options.
* What are the security, mission, and cost implications of relocating
certain functions to the United States, regional centers, or to other
locations, such as commercial space or host country counterpart
agencies?.
* To what extent could agency program and/or routine administrative
functions (procurement, logistics, and financial management functions)
be handled from a regional center or other locations?.
* Do new technologies and transportation links offer greater
opportunities for operational support from other locations?.
* Do the host country and regional environments suggest there are
options for doing business differently, that is, are there adequate
transportation and communications links and a vibrant private sector?.
* To what extent is it practical to purchase embassy services from the
private sector?.
* Does the ratio of support staff to program staff at the embassy
suggest opportunities for streamlining?.
* Can functions be reengineered to provide greater efficiencies and
reduce requirements for personnel?.
* Are there best practices of other bilateral embassies or private
corporations that could be adapted by the U.S. embassy?.
* To what extent are there U.S. or host country legal, policy, or
procedural obstacles that may impact the feasibility of rightsizing
options?.
Source: GAO.
[A] Embassy priorities are the U.S. government priorities in that
country.
[End of table]
FOOTNOTES
[1] Office of Management and Budget, The President‘s Management Agenda,
Fiscal Year 2002 (Washington, D.C.: Aug. 2001).
[2] U.S. General Accounting Office, Overseas Presence: Observations on
a Rightsizing Framework, GAO-02-659T (Washington, D.C.: May 1, 2002).
[3] U.S. General Accounting Office, Overseas Presence: Rightsizing
Framework Can Be Applied at U.S. Diplomatic Posts in Developing
Countries, GAO-03-396 (Washington, D.C.: Apr. 7, 2003), and U.S.
General Accounting Office, Embassy Construction: Process for
Determining Staffing Requirements Needs Improvement, GAO-03-411
(Washington, D.C.: Apr. 7, 2003).
[4] U.S. General Accounting Office, Overseas Presence: Framework for
Assessing Embassy Staff Levels Can Support Rightsizing Initiatives,
GAO-02-780 (Washington, D.C.: July 26, 2002).
[5] GAO-03-396.
[6] Mission Performance Plans (MPP) are annual embassy plans that link
performance goals and objectives to staffing and budgetary resources
needed to accomplish them in a given fiscal year.
[7] GAO-03-411.
[8] Former Secretary of State Madeleine Albright appointed
Accountability Review Boards to investigate the facts and circumstances
surrounding the 1998 embassy bombings. Department of State, Report of
the Accountability Review Boards on the Embassy Bombings in Nairobi and
Dar Es Salaam (Washington, D.C.: Jan. 1999). Secretary Albright also
established the Overseas Presence Advisory Panel to consider the
organization and condition of U.S. embassies. Department of State,
America‘s Overseas Presence in the 21st Century, The Report of the
Overseas Presence Advisory Panel (Washington, D.C.: Nov. 1999).
[9] GAO-02-659T.
[10] With enactment of the Federal Activities Inventory Reform Act of
1998 (P.L. 105-270), Congress mandated that U.S. government agencies
identify activities within each office that are not ’inherently
governmental,“ that is, commercial activities. Competitive sourcing
involves using competition to determine whether a commercial activity
should be performed by government personnel or contractors. The
President‘s Management Agenda states that competition historically has
resulted in a 20-to 50-percent cost savings for the government.
[11] GAO-02-780.
[12] According to the Foreign Service Act of 1980 (P.L. 96-465), as
amended, ’chiefs of mission“ are principal officers in charge of
diplomatic missions of the United States or of a U.S. office abroad,
such as U.S. ambassadors, who are responsible for the direction,
coordination, and supervision of all government executive branch
employees in a given foreign country (except employees under a military
commander).
[13] NSDD-38, ’Staffing At Diplomatic Missions and Their Overseas
Constituent Posts,“ signed June 2, 1982, requires all agencies with
staffs operating under the authority of chiefs of mission to seek the
chief of mission‘s approval on any proposed changes in size,
composition, or mandate of any staff elements at an overseas facility.
[14] U.S. General Accounting Office, Overseas Presence: Conditions of
Overseas Diplomatic Facilities, GAO-03-557T (Washington, D.C.: Mar. 20,
2003).
[15] During our work at the embassy in Paris, we identified as many as
50 positions at the post that are commercial in nature and responsible
for providing services or goods that have the potential to be
competitively sourced to the private sector or performed at another
location.
[16] We visited seven posts in Europe and Eurasia and contacted seven
additional embassies worldwide, which represent about one-quarter of
the new compounds OBO plans to fund between fiscal years 2002 and 2005.
[17] There are six geographically defined bureaus that report to the
Undersecretary of State for Political Affairs--bureaus for Africa, East
Asia and the Pacific, Europe and Eurasia, the Near East, South Asia,
and the Western Hemisphere.
[18] The current version of the Long-Range Overseas Buildings Plan
covers fiscal years 2002 through 2007. State plans to publish an
updated version of the plan covering fiscal years 2003 through 2008 by
late April 2003.
[19] 22 U.S.C. § 4865 requires the Secretary of State, in selecting a
site for any new U.S. diplomatic facilities abroad, to ensure that all
U.S. personnel under chief of mission authority be located on the site.
However, this requirement may be waived if the Secretary, together with
the heads of those agencies with personnel who would be located off
site, determines that security considerations permit off site location
and that it is in the U.S. national interest.
[20] Pursuant to an informal agreement between OBO and USAID, USAID is
required to pay for a separate annex in a compound when it requires
desk space for 50 or more employees. However, if USAID projects it will
need fewer than 50 desks, its offices will be in the chancery building
in the compound, which State would fund, as it would for all U.S.
government agencies in the chancery. According to OBO and USAID
headquarters officials, there is some flexibility in the maximum number
of USAID desk spaces allowed in a chancery, and this issue is handled
on a case-by-case basis.
[21] Because the State proposal and OMB assessment were completed after
the budget submission deadline, OMB told agencies that they would not
actually be charged in 2004.
