State Department
Key Transformation Practices Could Have Helped in Restructuring Arms Control and Nonproliferation Bureaus Gao ID: GAO-09-738 July 15, 2009In 2004, the Department of State (State) Inspector General (IG) concluded that State's three-bureau structure for conducting arms control and nonproliferation policy did not adequately address post-September 11 challenges, including possible terrorist use of weapons of mass destruction. The IG also noted that State had yet to formalize the responsibilities of the three bureaus in its Foreign Affairs Manual (FAM), which sets out agency organization and functions. Between late 2005 and early 2006, State created a new two-bureau structure to better address these issues and improve efficiency GAO was asked to assess the extent to which State addressed (1) the objectives of its 2005-2006 reorganization and (2) key transformation practices. For this effort, GAO reviewed State documents pertaining to the reorganization and staffing data for the affected bureaus in the periods before and after the reorganization and interviewed former and current State officials in Washington, D.C.
State cannot demonstrate that the 2005-2006 restructuring of its Nonproliferation, Arms Control, and Verification and Compliance bureaus achieved all of its objectives because it did not clearly define the objectives and lacked metrics to assess them. State's objectives were to enable it to better focus on post -September 11 challenges; reduce bureaucratic inefficiencies and top-heavy management; and eliminate overlap. State sought to achieve its first objective by creating new offices and roles to address terrorism and counterproliferation issues. To meet its second objective, State merged three bureaus having 30 offices and functions into two bureaus having 26 offices and functions and freed up staff slots for these new roles, but problems with workload mismatches persisted after the reorganization as State employees noted it left some offices overworked and some offices underworked. State cannot demonstrate that it met its third objective, reducing top-heavy management, as its goals were undefined. Although it reduced the number of senior executives from 27 to 20 and reduced office directorships, the overall number of higher-ranking employees increased from 91 to 100 and executive office staff increased from 44 to 50. Moreover, concerns about mission overlap persist, in part because bureau roles remain undefined in the FAM. State's reorganization addressed few of the key practices for organizational mergers and transformations that GAO developed in 2002. These practices are found to be at the center of successful mergers and transformations. As illustrated below, State generally addressed one key practice, partially addressed two, and did not address the remaining five. For example, State did not address establishing coherent mission and strategic goals because it did not define an end state with measurable goals, nor did it devise a means to gauge progress toward such goals or assess the results of actions taken. As a result, State lacks reasonable assurance that the reorganization achieved its objectives or that it can identify any lessons learned.
RecommendationsOur 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.
Director: Team: Phone:GAO-09-738, State Department: Key Transformation Practices Could Have Helped in Restructuring Arms Control and Nonproliferation Bureaus
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Report to the Subcommittee on Oversight of Government Management, the
Federal Workforce and the District of Columbia, Committee on Homeland
Security and Governmental Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
July 2009:
State Department:
Key Transformation Practices Could Have Helped in Restructuring Arms
Control and Nonproliferation Bureaus:
GAO-09-738:
GAO Highlights:
Highlights of GAO-09-738, a report to the Subcommittee on Oversight of
Government Management, the Federal Workforce and the District of
Columbia, Committee on Homeland Security and Governmental Affairs, U.S.
Senate.
Why GAO Did This Study:
In 2004, the Department of State (State) Inspector General (IG)
concluded that State‘s three-bureau structure for conducting arms
control and nonproliferation policy did not adequately address post-
September 11 challenges, including possible terrorist use of weapons of
mass destruction. The IG also noted that State had yet to formalize the
responsibilities of the three bureaus in its Foreign Affairs Manual
(FAM), which sets out agency organization and functions. Between late
2005 and early 2006, State created a new two-bureau structure to better
address these issues and improve efficiency
GAO was asked to assess the extent to which State addressed (1) the
objectives of its 2005-2006 reorganization and (2) key transformation
practices. For this effort, GAO reviewed State documents pertaining to
the reorganization and staffing data for the affected bureaus in the
periods before and after the reorganization and interviewed former and
current State officials in Washington, D.C.
What GAO Found:
State cannot demonstrate that the 2005-2006 restructuring of its
Nonproliferation, Arms Control, and Verification and Compliance bureaus
achieved all of its objectives because it did not clearly define the
objectives and lacked metrics to assess them. State‘s objectives were
to enable it to better focus on post -September 11 challenges; reduce
bureaucratic inefficiencies and top-heavy management; and eliminate
overlap. State sought to achieve its first objective by creating new
offices and roles to address terrorism and counterproliferation issues.
To meet its second objective, State merged three bureaus having 30
offices and functions into two bureaus having 26 offices and functions
and freed up staff slots for these new roles, but problems with
workload mismatches persisted after the reorganization as State
employees noted it left some offices overworked and some offices
underworked. State cannot demonstrate that it met its third objective,
reducing top-heavy management, as its goals were undefined. Although it
reduced the number of senior executives from 27 to 20 and reduced
office directorships, the overall number of higher-ranking employees
increased from 91 to 100 and executive office staff increased from 44
to 50. Moreover, concerns about mission overlap persist, in part
because bureau roles remain undefined in the FAM.
State‘s reorganization addressed few of the key practices for
organizational mergers and transformations that GAO developed in 2002.
These practices are found to be at the center of successful mergers and
transformations. As illustrated below, State generally addressed one
key practice, partially addressed two, and did not address the
remaining five. For example, State did not address establishing
coherent mission and strategic goals because it did not define an end
state with measurable goals, nor did it devise a means to gauge
progress toward such goals or assess the results of actions taken. As a
result, State lacks reasonable assurance that the reorganization
achieved its objectives or that it can identify any lessons learned.
Figure: Extent to Which State‘s 2005-2006 Bureau Reorganization
Addressed Key Practices for Organizational Transformations and Mergers:
[Refer to PDF for image: illustrated table]
Practice: Ensure top leadership drives the transformation;
Addressed: Generally addressed.
Practice: Dedicate an implementation team to manage the transformation
process;
Addressed: Partially addressed.
Practice: Establish a communications strategy to create shared
expectations and report progress;
Addressed: Partially addressed.
Practice: Involve employees to gain their ideas, as well as ownership
over the transformation;
Addressed: Not addressed.
Practice: Focus on a set of key principles and priorities at the outset
of the transformation.
Addressed: Not addressed.
Practice: Set implementation goals and a time to build momentum and
show progress from day one;
Addressed: Not addressed.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation;
Addressed: Not addressed.
Practice: Use the performance management system to define
responsibility and assure accountability for change;
Addressed: Not addressed.
Source: GAO.
[End of figure]
What GAO Recommends:
GAO recommends that State (1) formally delineate in the FAM the roles
of the two new bureaus and (2) direct that key transformation practices
and steps be incorporated into the FAM. State agreed with our
conclusions and recommendations and the Undersecretary for Management
has directed that GAO‘s key practices be adopted by State when
undertaking organizational changes.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/products/GAO-09-738]. For more
information, contact Joseph Christoff, at 202-512-8979 or
christoffj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
State Cannot Demonstrate That It Achieved the Objectives of Its 2005-
2006 Reorganization:
State Lacks Reasonable Assurance That It Achieved Its Reorganization
Objectives because State Addressed Few Key Transformation Practices:
Conclusion:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Staffing Profiles of the Affected Bureaus before and after
the Reorganization:
Appendix III: GAO's Key Practices and Implementation Steps for
Organizational Transformations and Mergers:
Appendix IV: GAO Reports Assessing Organizational Transformations Using
Mergers and Transformation Criteria:
Appendix V: Comments from the Department of State:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Staffing Profiles of the Affected Bureaus before and after the
Reorganization: All Staff:
Table 2: Staffing Profiles of the Affected Bureaus before and after the
Reorganization: Staff with A Rank of FO-1 and Above In the Foreign
Service and GS-15 and Above In the Civil Service:
Figures:
Figure 1: State's T Bureaus before and after the Reorganization:
Figure 2: Affected T Bureaus' Staff Positions by Service and Bureau,
before and after the 2005-2006 Reorganization:
Figure 3: Affected T Bureaus' Higher Staff Positions by Grade, before
and after the 2005 Reorganization:
Figure 4: Foreign Service FTE Positions in the Affected T Bureaus
before and after the 2005-2006 Reorganization:
Figure 5: Assessment of the Extent to Which State's 2005-2006
Reorganization of the T Bureaus Addressed Key Practices for
Organizational Transformations and Mergers:
Figure 6: GAO's Key Practices and Associated Implementation Steps:
Abbreviations:
AC: Bureau of Arms Control:
ACDA: Arms Control and Disarmament Agency:
AFSA: American Foreign Service Association:
CBW: chemical and biological weapons:
DAS: Deputy Assistant Secretary of State:
FAM: Foreign Affairs Manual:
FSO: Foreign Service Officer:
FO: Foreign Officer:
GS: General Schedule:
FTE: full-time equivalent:
HR: Bureau of Human Resources:
NP: Bureau of Nonproliferation:
IG: Office of Inspector General:
ISN: Bureau of International Security and Nonproliferation:
PDAS: Principal Deputy Assistant Secretary of State:
PSI: Proliferation Security Initiative:
SMP: Senior Management Panel:
SES: Senior Executive Service:
T: designation of the bureaus reporting to the Undersecretary of State
for Arms Control and International Security (T):
WMD: weapons of mass destruction:
VC: Bureau of Verification and Compliance:
VCI: Bureau of Verification, Compliance and Implementation:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
July 15, 2009:
The Honorable Daniel K. Akaka:
Chairman:
The Honorable George V. Voinovich:
Ranking Member:
Subcommittee of Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The United States has negotiated numerous arms control and
nonproliferation treaties and agreements over the past 40 years, with
the Department of State (State) playing a major role in the process. In
December 2004, State's Office of Inspector General (IG) reported that
the April 1999 integration of the Arms Control and Disarmament Agency
(ACDA) into State had produced a three-bureau structure--the bureaus of
Arms Control (AC), Nonproliferation (NP), and Verification and
Compliance (VC)--to deter the spread of weapons of mass destruction
(WMD) and further U.S. arms control objectives. According to the IG,
however, this arrangement did not meet post-September 11, 2001,
challenges, and unclear lines of authority, uneven workload, and
unproductive competition impeded the three bureaus.[Footnote 1] Among
other things, the IG recommended merging the bureaus of Arms Control
and Nonproliferation. Between July 2005 and March 2006, State undertook
the reorganization of its arms control bureaucracy to address both IG
concerns and a number of security challenges and priorities that had
risen after the September 11 terrorist attack. The Secretary of State
merged the Arms Control and Nonproliferation Bureaus into the new
Bureau of International Security and Nonproliferation (ISN) and
expanded the functions of the Verification and Compliance Bureau,
renaming it the Bureau of Verification, Compliance and Implementation
(VCI). The former Undersecretary of State for Arms Control and
International Security characterized the reorganization as an effort to
refocus the bureaus on contemporary nonproliferation threats, rather
than on past threats such as nuclear confrontation with the former
Soviet Union. In January 2009, the Secretary of State announced at her
nomination hearing that the new administration placed high importance
on the missions of these bureaus and intended to review their
organizational and staffing requirements before making a decision to
reorganize further.
In this requested report, we examine the extent to which State
addressed (1) the objectives of its 2005-2006 reorganization and (2)
key transformation practices GAO has developed for organizational
transformations and mergers.[Footnote 2] To address these objectives,
we reviewed State IG reports that recommended the reorganization and
examined relevant State personnel standards, applicable policies, and
other documents related to the planning, implementation, and review of
this reorganization. We met with directors of the current arms control
bureaus and with past and present State officials involved in the
reorganization, including all of the officials assigned to the senior
management panel that designed and implemented the reorganization. We
also met with officials from State's Human Resources and Management
bureaus and examined State workforce allocations, staffing patterns,
and promotion and attrition data for the affected bureaus from periods
before and after the reorganization. We applied GAO's criteria for key
organizational transformation and merger practices to assess how State
addressed them in the reorganization. Furthermore, we reviewed various
State documents--including draft descriptions of bureau missions and
functions, memorandums, and e-mails--with guidance on the restructuring
process and criticisms of it, and a study of the new bureaus' workforce
conducted shortly after the reorganization.
We conducted this performance audit from September 2008 to July 2009 in
accordance with generally accepted government auditing standards. These
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives. Appendix I provides a more
detailed description of our scope and methodology.
Results in Brief:
State cannot demonstrate that the 2005-2006 restructuring of its
Nonproliferation, Arms Control, and Verification and Compliance bureaus
achieved all of its objectives because State did not clearly define the
objectives and lacked metrics to assess them. State's objectives, as
notified to Congress, were to restructure these bureaus to (1) focus on
emerging challenges in the post-September 11 world, (2) combine related
offices to reduce bureaucratic inefficiencies, (3) reduce top-heavy
management, and (4) eliminate overlap among the bureaus. State sought
to achieve its first objective by merging the Arms Control and
Nonproliferation Bureaus into the new International Security and
Nonproliferation Bureau and by creating new offices and roles within
that bureau, thus highlighting new or priority security threats. For
example, State designated a Principal Deputy Assistant Secretary (PDAS)
for Counterproliferation Issues in ISN and created new offices to
address WMD terrorism and missile proliferation. To address its second
objective, State reduced the number of offices and functions by
combining 30 offices and functions of the 3-bureau structure into 26
offices and functions under the 2 new bureaus. However, it cannot
demonstrate whether the reductions resolved the bureaucratic
inefficiencies cited as one justification for the reorganization
because it had not established goals or identified specific
inefficiencies. For example, State employees claimed that the workload
mismatches identified as inefficiencies in the 2004 State IG report
persisted after the reorganization as it left some former NP offices
overworked and some former AC offices under worked. To address its
third objective, State reduced the number of management positions at
the office director level and reduced the number of senior executive
positions from 27 to 20 by 2008, but it cannot demonstrate whether this
reduced the overall number of management and administrative personnel
in the absence of a goal that identified the ranks or positions to be
eliminated. For example, State increased the number of Foreign Service
officers and some of the civil servants with ranks just below the
senior level--but who fill some of the same management positions as
senior executives--from 64 to 80 by 2008, and did not reduce the size
of the offices providing administrative support for the ISN and VCI
bureaus[Footnote 3]. Further, State's restructuring does not appear to
have addressed its fourth objective of eliminating overlap among the
bureaus' missions and issues. According to a May 2006 study, employees
cited numerous instances of mission overlap between the two new bureaus
immediately after the reorganization, some similar to those they had
noted among the three bureaus before the reorganization[Footnote 4]. In
April 2009, several State officials from the ISN and VCI bureaus told
us that concerns about overlap remain. The State Inspector General had
noted in 2004 that State's failure to clearly delineate the roles and
responsibilities of the three bureaus in the Foreign Affairs Manual
[Footnote 5] (FAM) may have contributed to overlap and confusion about
roles and responsibilities before the reorganization.[Footnote 6]
Although State notified Congress in June 2008 that these omissions
would be rectified, it has not yet modified the manual.[Footnote 7]
When it reorganized its Nonproliferation, Arms Control, and
Verification and Compliance bureaus in 2005 and 2006, State addressed
few of the key practices that we have identified for transforming
organizations. If State had addressed more of these key practices, it
might have avoided some of the problems cited above. State's approach
to the 2005-2006 reorganization generally addressed one key practice,
partially addressed two additional practices, but did not address five
others. Key practices include (1) ensuring that top leadership drives
the reorganization, (2) dedicating an implementation team to manage the
process, (3) involving employees from the beginning, and (4) focusing
on and establishing a coherent mission and integrated strategic goals.
[Footnote 8] For instance, State generally addressed the practice
calling for leadership to drive the process because two successive
Secretaries of State signed memos authorizing the merger of the two
bureaus. State partially addressed the practice of dedicating an
implementation team to manage the process by establishing a senior
management panel to manage the reorganization. However, none of the
panel's members had any experience or knowledge of the many complex
tasks associated with such reorganizations. State did not address the
practice of involving employees in the process; for example, the senior
management panel did not include career officials. Only in response to
employee concerns was a career official appointed to the panel. State
also did not address the practice of establishing coherent mission and
strategic goals because it did not establish a strategic plan or
results-oriented reporting framework that defined an end state with
clear and measurable goals, nor did it devise a means to gauge progress
toward such goals or assess the results of actions taken. State's
approach to the reorganization was unsystematic and State's FAM does
not address the use of these practices. As a result, State lacks
reasonable assurance that the reorganization achieved its objectives or
that it can identify any lessons learned.
We are recommending that the Secretary of State address the overlapping
and unclear roles and responsibilities in the Bureau of International
Security and Nonproliferation and the Bureau of Verification,
Compliance, and Implementation--and fulfill a pledge made to Congress-
-by formally delineating the roles and responsibilities of each bureau
in the Foreign Affairs Manual. We also are recommending that the
Secretary of State issue written guidance to direct that the key
practices and steps associated with successful organizational mergers
and transformations are incorporated into the FAM.
In written comments on a draft of this report, State agreed with our
conclusions and recommendations. State indicated it will delineate the
roles and responsibilities for the ISN and VCI bureaus and add them to
the FAM. Moreover, the Undersecretary for Management has directed that
GAO's key practices be adopted by State when undertaking organizational
changes. State's comments are included in appendix V.
Background:
State assumed direct responsibility for arms control, nonproliferation,
and disarmament issues when the Foreign Affairs Reform and
Restructuring Act of 1998 abolished ACDA and transferred its functions
to the Department of State, which in turn established two new State
bureaus--the bureaus of Arms Control and Nonproliferation--headed by a
new Undersecretary for Arms Control and International Security (the
Undersecretary).[Footnote 9] Once these bureaus were established in
April 1999, they were combined with State's existing Bureau of
Political-Military Affairs to form a new "T family" of bureaus.
Subsequently in 2000, due to congressional concerns regarding effective
verification of and compliance with arms control agreements, part of
the Bureau of Arms Control became a separate Bureau of Verification and
Compliance.[Footnote 10]
In 2004, the State IG began reviews of the three new bureaus to examine
the effectiveness of ACDA's incorporation into State and the
performance and interaction of the T bureaus.[Footnote 11] The IG found
that the organizational structure did not meet current needs and was
marked by unclear lines of authority, unproductive competition among
offices, and uneven workloads. The IG also found that the management
structure of the three bureaus was top-heavy, resulting in poor
promotion prospects for junior civil service staff and the difficulty
of attracting Foreign Service Officers (FSOs). The IG noted that State
had yet to agree upon language formalizing the responsibilities of the
three bureaus in its FAM 5 years after the merger. The IG recommended
that the Secretary of State, in coordination with the Undersecretaries
for the Management and T bureaus (1) form a task force to oversee the
merger of AC and NP into a single bureau to improve the policymaking
process; and (2) restructure the VC bureau into a smaller specialized
entity better able to focus on its core mission.
In response, State established a task force in August 2004 to evaluate
the T bureaus' organizational structure, recommend changes if
necessary, and prepare a strategy for implementing structural changes.
However, according to a senior State official, the task force disbanded
without agreeing on a course of action. Nevertheless, the outgoing
Secretary of State approved the merger in December 2004. He deferred
the implementation of the merger until his successor could review the
matter. The new Secretary reaffirmed the decision in February 2005 but
deferred the matter until the Senate confirmed a new Undersecretary of
State for Arms Control and International Security in May 2005.
On July 29, 2005, State presented a proposed structure to Congress
showing how the Arms Control and Nonproliferation bureaus would be
merged into a new international security and nonproliferation bureau.
The proposed new structure was put together by the new Undersecretary.
It shifted significant responsibilities for implementing arms control
agreements to the newly expanded and renamed Bureau of Verification,
Compliance and Implementation. On September 12, 2005, the
Undersecretary announced the establishment of the new International
Security and Nonproliferation Bureau and the creation of a Senior
Management Panel (SMP) to implement the merger, consisting of the three
principal deputy assistant secretaries from the Arms Control,
Nonproliferation, and Verification and Compliance bureaus, plus the
U.S. Representative to the Conference on Disarmament, based in Geneva,
Switzerland.[Footnote 12]
On September 28, 2005, the SMP sent an e-mail and memo to staff
summarizing the reorganization procedures and designating acting office
directors to lead the new bureau. From October through December 2005,
the SMP carried out other actions, including the preparation of final
position and mission descriptions and the final placement or
"crosswalk" of AC and NP bureau staff to their new positions in the ISN
bureau in November 2005. The SMP was disbanded by January 2006 but only
after the reorganization had substantively ended. The reorganization of
the VCI bureau was finalized by March 2006. The reorganization affected
440 employees distributed among 30 offices and functions in 3 bureaus.
[Footnote 13]
State Cannot Demonstrate That It Achieved the Objectives of Its 2005-
2006 Reorganization:
Although State restructured the bureaus to better focus on post-
September 11 challenges and priorities and combined related offices to
streamline staff, it cannot demonstrate that it reduced inefficiencies
and top-heavy management or that it eliminated mission overlap among
the offices. Moreover, the reorganization failed to accomplish other
goals that State officials said they hoped to achieve. Figure 1 shows
how State organized its T bureaus before and after the reorganization,
where it moved or combined old offices, and where it created new
offices.
Figure 1: State's T Bureaus before and after the Reorganization:
[Refer to PDF for image: illustration]
Before:
Nonproliferation[D]: October 6, 2004:
Fissile Material Negotiator and Senior Cut-off Coordinator:
* DAS for Nuclear Nonproliferation:
- Multilateral Nuclear Affairs;
- Public Policy and Congressional Relations;
- Proliferation Threat Reduction;
- Nuclear Energy Affairs;
- Regional Affairs.
Senior Coordinator for Nuclear Safety:
* DAS for Nonproliferation Controls;
* Export Control and Conventional Arms Proliferation Policy;
* Chemical, Biological, & Missile Nonproliferation;
* Nonproliferation and Disarmament Fund;
* Export Control Cooperation.
Arms Control[C]: October 1, 2004:
* Senior Negotiator for Chem/Bio Weapons;
* Standing Consultative Commission;
* Joint Consultative Group/Open Skies Commission;
* Conference on Disarmament/Special Rep. for Nuclear NP;
* Organization for Prohibition of Chemical Weapons;
* Comprehensive Test Ban Preparation Commission;
* Commission on Special Verification/Joint Compliance with Moscow
Treaty.
Associated with the above are:
* PDAS for Arms Control Policy;
- International Security Negotiations;
- Regional and Strategic Security;
- Strategic and Theater Defenses;
* DAS for Arms Control Implementation:
- Conventional Arms Control;
- Chemical & Biological Weapons Conventions;
- Strategic Negotiations and Implementation.
Verification and Compliance: October 1, 2004:
* PDAS for Compliance Policy:
- Conventional and CBW Affairs;
- Nuclear Affairs;
- Verification and Operations.
* DAS for Verification Policy:
- Nuclear Risk Reduction Center;
- Technology and Assessments;
- Strategic & Missile Affairs.
After:
International Security and Nonproliferation[E]:
DAS for Nuclear Nonproliferation Policy and Negotiations[E]:
* Multilateral Nuclear and Security Affairs[E];
* Nuclear Energy, Safety and Security Affairs[D];
* Cooperative Threat Reduction[D];
* Nonproliferation and Disarmament Fund[D].
DAS for Threat Reductions, Export Controls and Negotiations[E]:
* Chemical & Biological Weapons Threat Reduction[E];
* Missile Threat Reduction[E];
* Conventional Arms Threat Reduction[D];
* Missile Defense and Space Policy[C];
* Export Controls Cooperation[D].
PDAS for Counterproliferation[B]:
* Office of Weapons of Mass Destruction Terrorism[B];
* Regional Affairs[E];
* Counterproliferation Initiatives[B];
* Strategic Planning and Outreach[B].
Associated with the above under International Security and
Nonproliferation:
* United States Representative for Conference on Disarmament[A];
* United States Representative for Prohibition of Chemical Weapons[A];
* IAEA-UNVIE[A];
* Comprehensive Test-Ban Treaty Preparatory Commission[A].
Verification, Compliance, and Implementation[F]: November 1, 2008:
* PDAS for Compliance and Implementation[F];
- Strategic Issues[C];
- Verification and Operations[F];
- Technology and Assessments[F];
- Nuclear Affairs[F].
* DAS for Verification and Implementation[F]:
- Biological Weapons Affairs[F];
- Nuclear Risk Reduction Center[F];
- Chemical and Conventional Weapons Affairs[C].
Associated with the above under Verification, Compliance, and
Implementation:
* Representation and Special Advisors for VCI[A].
Source: GAO.
Notes: The figure excludes the four offices associated with the
administrative functions for the T bureaus as a whole (the Executive
Office and the Offices for Personnel [renamed the Office of Human
Resources], Budget General Services, and Resource Management). These
offices were in the NP bureau in 2004 and in the ISN bureau as of 2008.
CBW: conventional and biological weapons.
IAEA-UNVIE: International Atomic Energy-United States Mission to
International Organizations in Vienna.
The VCI chart excludes the Office of Missile Defense and Space Policy,
which was transferred to ISN in June 2007.
[A]: Special representatives and ambassadors.
[B]: New organization.
[C]: Transferred from Arms Control Bureau.
[D]: Transferred from Nonproliferation Bureau.
[E]: Combines offices from two or more bureaus.
[F]: Transferred from Verification and Compliance Bureau.
[End of figure]
State Restructured Bureaus to Focus on Post-September 11 Challenges:
State restructured key AC and NP offices and created new offices to
better focus State's efforts on post-September 11 challenges, such as
interdicting illicit shipments of weapons of mass destruction (WMD)
technology and increasing attention on WMD terrorism and threat
reduction programs. For example, State designated a Principal Deputy
Assistant Secretary (PDAS) for Counterproliferation Issues in ISN and
created three new offices:
* The Office of Counterproliferation Initiatives was to take the lead
in developing, implementing, and improving Proliferation Security
Initiative (PSI)[Footnote 14] and other efforts to interdict or deny
shipments of WMD and their delivery systems.
* The Office of Weapons of Mass Destruction Terrorism was to develop
policy guidance and a diplomatic strategy. State officials noted that
this office was created to address as an emerging challenge the need to
counter the efforts of terrorists actively seeking weapons of mass
destruction. In February 2006, the Undersecretary testified that this
office would help bridge a gap between the government's traditional
state-focused WMD counterproliferation efforts and the focus of its
antiterrorist intelligence efforts on individuals and groups. The PDAS
of ISN stated in 2008 that this office also helped create the Global
Initiative to Combat Nuclear Terrorism, which works to develop
counterproliferation and interdiction capabilities in other
governments.
* The Office of Strategic Planning and Outreach, in part, was to
address a perceived gap in the ability of the T bureaus to innovatively
address future threats, identify emerging proliferation threats, and
develop a coordinated and strategic counterproliferation response. For
example, the Undersecretary described the need to develop new ways to
assess and counter the proliferation challenges posed by black markets,
front companies, and global terrorist networks.
In addition, State merged existing offices to reflect the greater
priority it placed on these post-September 11 challenges, according to
State's July 2005 notification to Congress. For example, State merged
offices from two bureaus to form the Office of Chemical and Biological
Weapons Threat Reduction, which would lead new ISN efforts to prevent
states or other entities from pursuing, using, or proliferating WMD
weapons and their technology. State similarly merged two existing
offices to form the Office of Missile Threat Reduction to take the lead
in implementing policies and programs to counter the proliferation of
ballistic and cruise missiles capable of delivering weapons of mass
destruction and better coordinate these efforts with overall
counterproliferation efforts.
Combining Related Offices May Not Have Reduced Bureaucratic
Inefficiencies:
State reduced the number of offices and functions assigned to the
affected bureaus, but cannot demonstrate how the merger reduced
bureaucratic inefficiencies or redressed uneven workloads. Combining
functionally compatible offices to streamline staff and reduce
bureaucratic inefficiencies was the second objective of the
reorganization. State documents and officials noted that State expected
this reorganization would streamline and refocus these offices, make
them operationally more effective, free up personnel resources, and
make them available for higher priority missions.
State Reduced the Overall Number of Offices and Functions Assigned to
the Reorganized Bureaus but Did Not Reduce Overall Staff Levels:
Overall, State combined 30 offices and functions present in the three-
bureau structure into 26 offices and functions present under the new
two-bureau structure. In particular, the merger of the AC and NP
bureaus into the new ISN bureau resulted in an organization with fewer
offices, functions, and staff. The reorganization consolidated 24 issue-
related offices and functions present in the two old bureaus into 17
issue-related offices and functions in the new bureau. State also
succeeded in slightly reducing its overall personnel positions in these
bureaus. In October 2004, the AC, NP, and VC bureaus had a total of 440
staff positions; by November 2008, the ISN and VCI bureaus had a total
of 434 staff positions. The reorganization affected four types of
personnel positions: (1) civil service full-time equivalents (FTEs),
which are positions funded by the bureau in which they are located; (2)
Foreign Service FTEs; (3) other government staff (that is, personnel
not directly funded by the bureaus such as detailees from other State
bureaus, other government agencies, the armed services, and interns);
and (4) contracted employees.
In 2004, the AC and NP bureaus had a total of 314 staff positions. By
2008, after they had merged to form the new ISN bureau, that total had
decreased to 291 staff positions. As depicted in figure 2, the new
total reflects changes in the numbers and composition of the staff
positions available to ISN, with declines in the number of civil
service FTEs, Foreign Service FTEs, and other government staff, but a
slight increase in the number of contracted employees.[Footnote 15]
Figure 2: Affected T Bureaus' Staff Positions by Service and Bureau,
before and after the 2005-2006 Reorganization:
[Refer to PDF for image: stacked vertical bar graph]
AC & NP (2004)[A]:
Civil service FTEs: 236;
Foreign Service FTEs: 41;
Other government staff: 29;
Contracted consultants: 7;
Total staff positions: 314[C].
ISN (2008)[B]:
Civil service FTEs: 215;
Foreign Service FTEs: 32;
Other government staff: 33;
Contracted consultants: 11;
Total staff positions: 291.
VC (2004):
Civil service FTEs: 76;
Foreign Service FTEs: 7;
Other government staff: 19;
Contracted consultants: 23;
Total staff positions: 126.
VCI (2008):
Civil service FTEs: 93;
Foreign Service FTEs: 11;
Other government staff: 10;
Contracted consultants: 29;
Total staff positions: 143.
Source: GAO analysis of State staffing profiles.
Note: Other government staff are personnel not directly funded by the
bureau to which they are presently assigned. This category includes
detailees from other State bureaus and agencies, military personnel,
and interns. With the exception of staff from the Political-Military
Affairs Bureau, directly funded employees from one T bureau on detail
with another T bureau are excluded from this category to avoid double-
counting.
[A] The 2004 AC & NP total includes 44 staff for AC/NP/VC executive
office functions.
[B] The 2008 ISN total includes 50 staff for ISN/VCI executive office
functions.
[C] The 2004 total includes one vacant FTE position that State had yet
to determine to fill with a Foreign Service or civil service employee
at the time the staffing profile was compiled.
[End of figure]
The reductions resulting from the merger of the AC and NP bureaus into
the ISN bureau were largely offset by the augmented roles and increased
staff given to the old VC bureau. According to State officials,
Congress had made its acceptance of the new two-bureau structure
conditional upon the transfer of some offices and duties to the newly
expanded and renamed Bureau of Verification, Compliance and
Implementation.
The VC Bureau's PDAS for Compliance Policy was re-designated as PDAS
for Compliance and Implementation; moreover, the VC bureau's Deputy
Assistant Secretary (DAS) of State for Verification Policy was re-
designated the DAS for Verification and Implementation. The number of
offices and functions reporting to these officials initially rose from
six to nine. This was in part due to State's decision to shift
responsibility for implementing strategic arms control agreements with
the former Soviet Union, such as the Conventional Forces in Europe
treaty and the Strategic Arms Reduction Talks, to VCI. According to a
State announcement, the expanded VCI bureau enhanced State's ability to
verify and ensure full compliance with arms control and
nonproliferation commitments. As part of this shift, VCI incorporated
four additional offices and functions from the AC bureau to create the
VCI Office of Chemical and Conventional Weapons Affairs, the Office of
Strategic Issues, and the Office of Missile Defense and Space Policy.
The latter office was transferred to ISN in June 2007, and the total
number of VCI offices and functions dropped from nine to eight.
As a result of these changes, total staff positions increased from 126
under the old VC bureau to 143 under the new VCI bureau. As depicted in
figure 2 above, the new total reflects changes in the numbers and
composition of the staff positions available to VCI, with increases in
the number of civil service and Foreign Service FTE positions, and in
contracted consultant positions, and decreases in the number of other
government staff positions. See appendix II for additional details on T
Bureau staffing profiles before and after the reorganization.
State Cannot Demonstrate That It Reduced Bureaucratic Inefficiencies as
Problems Persisted after the Reorganization:
While State achieved a reduction in the number of offices and
functions, it cannot demonstrate that these reductions resolved the
bureaucratic inefficiencies cited as one justification for the
reorganization. State did not define what constituted bureaucratic
inefficiencies, nor did it determine how reductions in the number of
offices or personnel would improve efficiency[Footnote 16]. Moreover,
State did not establish targets or goals by which progress toward
achieving reductions in inefficiencies could be measured. In contrast,
State officials and documents show that some inefficiencies identified
before the reorganization, such as mismatched or uneven workloads,
persisted afterward and may have grown worse.
Some State officials contend that the reorganization addressed
bureaucratic inefficiencies. A senior official involved in the
reorganization stated that the merger reduced issue overlap, clarified
office missions, and streamlined staffing. He noted that the
reorganization (1) reduced the number of offices focused on furthering
strategic arms limitations talks with the Russians from 3 offices with
22 personnel to 1 office with 4 personnel, and (2) consolidated
responsibilities for multilateral arms control issues into one office
and reduced the number of staff dedicated to these issues from 28 to
18.
Nevertheless, workload mismatches persisted after the reorganization.
For example, the 2004 IG reports noted that NP staff were overworked,
the VC bureau believed it needed more staff, and some in the AC bureau
were embarrassed at their light workload. A post-reorganization review
conducted for State in 2006 by two consultants found three former NP
offices with continuing heavy workloads.[Footnote 17] Moreover, the
review noted that many staff believed the AC offices transferred to VCI
remained underworked. According to some SMP officials and employees
interviewed after the reorganization, transferring these AC offices to
VCI did not relieve the heavy workloads of some of the NP offices
transferred to ISN. Instead, the reductions in staff available to ISN
to address the undiminished workloads of preexisting missions, combined
with the new workloads imposed by the new counterproliferation
missions, and the reprogramming of resources increased the workload
burden on ISN staff, according to the review and State officials.
Absent Clearly Defined Goals, State Cannot Demonstrate That It Achieved
Its Objective of Making Management Less Top-heavy:
In its July 2005 notification to Congress, State noted as its third
objective that the merger would reduce top-heavy management. For
example, the plan envisioned trimming the AC and NP bureaus' front
offices and limiting the ISN bureau to two Deputy Assistant Secretaries
and one PDAS. Our analysis of State staffing profiles shows that State
succeeded in reducing the number of PDAS and DAS positions from 4 to 3,
and the number of office director positions and special representatives
from 24 in AC and NP in 2004 to 17 in ISN in 2008. However, in the
absence of (1) a definition of what constituted top-heavy management,
and (2) measurable goals that identified the number and ranks of the
positions to be reduced or eliminated, State cannot demonstrate whether
these actions achieved this objective.
Given the ambiguous nature of this objective, the results of the
reorganization can be interpreted differently. For example, while the
number of Foreign Service and civil service senior executives in the
affected bureaus decreased from 27 in 2004 to 20 in 2008, the number of
Foreign Service positions and civil servant positions with ranks just
below the senior level increased from 64 in 2004 to 80 in
2008.[Footnote 18] These officials, Foreign Service Officer (FO)-1s in
the Foreign Service and General Schedule (GS)-15s in the civil service,
fill some of the same management positions held by the senior
executives. Overall, the total number of staff with a rank of FO-1 and
above in the Foreign Service and GS-15 and above in the civil service
increased from 91 in 2004 to 100 by 2008. While not all GS-15s and FO-
1s hold management or supervisory positions in the bureaus affected by
the reorganization, State cannot demonstrate whether the changes in the
number and positions of the employees holding these ranks helped it
reduce top-heavy management. Figure 3 depicts how the total number of
staff with a rank of FO-1 and above in the Foreign Service and GS-15
and above in the civil service increased from 91 in 2004 to 100 by
2008.
Figure 3: Affected T Bureaus' Higher Staff Positions by Grade, before
and after the 2005 Reorganization:
[Refer to PDF for image: stacked vertical bar graph]
AC/NP/VC (2004):
GS-15/FO-1 staff: 64;
Senior executives: 27;
Total staff positions: 91.
ISN/VCI (2008):
GS-15/FO-1 staff: 80;
Senior executives: 20;
Total staff positions: 100.
Source: GAO analysis of State staffing profiles.
[End of figure]
Moreover, while State reduced the number of front office staff working
directly for the assistant secretaries, deputy assistant secretaries
and principal deputy assistant secretaries from 49 in AC, NP, and VC in
2004 to 37 in ISN and VCI by 2008, State officials involved in the 2005-
2006 reorganization did not define the front office positions to be
trimmed by the reorganization. The 2004 State IG reports also called
the front offices for the AP, NP, and VC bureaus top-heavy, but did not
identify which positions to eliminate.[Footnote 19]
State Reduced the Number of Issue-Related Offices, but Concerns about
Mission Overlap among Offices Persist:
State's fourth objective was to eliminate overlap.[Footnote 20] In
2004, before the reorganization, the State IG reports identified a
number of areas of overlap between the AC, NP, and VC bureaus,
including multiple bureau reporting channels for some U.S.
international conference representatives and treaty negotiators, and
unclear and conflicting demarcation of responsibilities between AC and
NP for their South Asia and North Korea issues.[Footnote 21] State
officials noted that the reorganization had addressed some
organizational redundancies. However, a May 2006 study on workforce
allocation conducted by two State contracted employees in the T bureaus
conducted after the reorganization found that mission redundancies
persisted for chemical weapons, missile defense and space policy,
nuclear nonproliferation, and bioterrorism issues among 14 VCI and ISN
offices and functions. Moreover, the study noted that further staff
adjustments between the two bureaus were under way 2 months after the
formation of the VCI bureau in March 2006.[Footnote 22]
The ongoing lack of clear guidance in the FAM contributes to the
persistent overlap problem. The State IG first noted in 2004 that
State's failure to clearly delineate the roles and responsibilities of
the three bureaus in the FAM may have contributed to problems before
the reorganization.[Footnote 23] The section of the manual detailing
the roles and responsibilities of these bureaus has never been drafted
and approved since the 1999 incorporation of ACDA into State and the
creation of the AC, NP, and VC bureaus. Furthermore, one member of the
SMP noted that the panel's deliberations about assigning roles and
missions to the new ISN/VCI structure were hindered by the lack of an
up-to-date FAM for these bureaus.
Although State assured Congress in June 2008 that these omissions in
the FAM would be rectified, it had not modified the manual as of July
2009.[Footnote 24] Some former State officials noted in testimony that
the missions of the PM, ISN, and VCI bureaus are also encapsulated in
their Bureau Strategic Plans and internal planning documents that
outline the bureau's goals and resource needs for future years.
Nevertheless, some current State T bureau officials told us in April
2009 that the concerns about overlap remain and that updating the FAM
could help address this condition.
State Cannot Demonstrate That It Met Goals to Retain Experienced Staff,
Increase Career Advancement Opportunities, and Increase Foreign Service
Participation Rates:
In addition to the four objectives for the reorganization presented to
Congress in July 2005, the Undersecretary and State officials
responsible for implementing the reorganization cannot demonstrate that
State achieved some additional internal goals, such as retaining
experienced staff, increasing career advancement opportunities for
individuals, and increasing Foreign Service participation in the new
bureaus. In contrast, civil service and Foreign Service staffing data,
promotion rates, and attrition rates indicate the reorganization may
have made it more difficult to achieve these goals.
State cannot determine whether it met its objective of retaining
experienced staff because State officials involved in the
reorganization noted that they had established no measurable goals for
retention of experienced staff.[Footnote 25] While our analysis of
staffing profiles notes that some experienced senior staff were
retained as employees or contracted employees after the reorganization,
some senior State officials concluded that expertise in some affected
offices was significantly reduced. For example, one official singled
out the offices of Multilateral Nuclear and Security Affairs, Regional
Affairs, and Cooperative Threat Reduction as experiencing particularly
significant loss in staff expertise. Additionally, we reported in March
2009 that State officials noted that the reorganization resulted in the
loss of 9 of the 14 staff in the office responsible for overseeing the
International Atomic Energy Agency and the Nonproliferation Treaty,
limiting its ability to effectively monitor Technical Cooperation
program developments.[Footnote 26]
Similarly, State officials did not establish goals for improved career
advancement opportunities. In contrast, available evidence indicates
that post-reorganization opportunities have declined. For example, the
FSO promotion rate within the NP bureau was about 12 percent in 2004
and 2005 before it merged into the ISN bureau--compared with an average
annual promotion rate of 40 percent for FSOs in the regional bureaus in
the same period. The rates then declined precipitously after the
reorganization; only two FSOs were promoted in ISN between 2006 and
2008.
Furthermore, State officials involved in the reorganization also noted
that State did not succeed in increasing FSO participation in the
affected T bureaus as the SMP had intended. As figure 4 indicates, the
number of FSO positions declined from 48 FTEs to 43 FTEs between 2004
and 2008. This represents a decline of 10 percent. The number of higher
ranking FSO positions dropped from 14 (including 2 vacant positions) to
12, and the number of overall vacancies increased from 17 percent of
the total (8 positions) to 28 percent (12 positions). Comparable civil
service FTE vacancy rates in 2004 and 2008 were 10 percent and 17
percent, respectively.
Figure 4: Foreign Service FTE Positions in the Affected T Bureaus
before and after the 2005-2006 Reorganization:
[Refer to PDF for image: stacked vertical bar graph]
AC/NP/VC bureaus (2004):
Vacancies: 8;
Filled Senior Foreign Service and FO-1 positions: 12;
Other filled FSO positions: 28;
Total staff positions: 48.
ISN/VCI bureaus (2008):
Vacancies: 12;
Filled Senior Foreign Service and FO-1 positions: 12;
Other filled FSO positions: 19;
Total staff positions: 43.
Source: GAO analysis of State staffing profiles.
Note: The 2004 vacancies include two Senior Foreign Service and no
Foreign Officer 1 (FO-1) positions. All Senior Foreign Service and FO-
1 positions were filled as of October 2008.
[End of figure]
State officials indicated that the need to contribute some FSO
positions to help meet State's priority to fully staff Iraq and
Afghanistan positions at the expense of other assignments contributed
to this decline. However, a more persistent cause is the ongoing FSO
perception that assignments to ISN or VCI are not as attractive as
assignments to other bureaus. According to the head of the task force
that conducted a survey of FSOs in the T bureaus in 2006, service in
these bureaus is not attractive for several reasons, including (1) a
regional bureau preference to reward regional rather than functional
expertise, (2) career FSOs' lack of understanding of the missions and
roles of the T bureaus, and (3) limited opportunities and incentives to
acquire technical experience needed for leadership in these bureaus.
State formed a task force in April 2006 to determine why FSOs are
underrepresented in T bureaus and suggest ways of making T bureaus more
attractive to FSOs. As of March 2009, State officials noted that the
group's more comprehensive proposals had yet to be addressed, such as
requiring FSOs to obtain functional bureau experience to qualify for
promotion to the Senior Foreign Service.[Footnote 27]
State Lacks Reasonable Assurance That It Achieved Its Reorganization
Objectives because State Addressed Few Key Transformation Practices:
To better assist federal agencies implementing mergers and
transformations, we have identified eight practices fundamental to the
success of organizations undergoing transformations or mergers.
[Footnote 28] State's approach to the 2005-2006 reorganization
generally addressed only one of these practices, partially addressed
two, and did not address the remaining five. As a result, State lacks
reasonable assurance that the reorganization achieved its objectives or
that it can identify any lessons learned. Rather State's reorganization
was unsystematic, which contributed to staff and employee group
criticisms of the process and contributed to the ISN bureau's higher
than average civil service attrition rates immediately after the
reorganization. State did not substantively modify its approach in
response to employee criticisms, which may have adversely affected
staff morale. State's FAM states that bureaus considering changes to
their organizational structure should consult during the planning
process with staff from the Undersecretary for Management with regard
to general management policy and planning issues, but does not describe
or require the use of key practices for reorganizing, merging, or
transforming organizations.
Key Practices That Leading Organizations Use to Guide Organizational
Transformations and Mergers and Inform Reorganization Goals:
We have reported that organizations that fail to adequately address or
consider a wide variety of people and cultural issues are more likely
than others to have unsuccessful mergers and transformations. To better
assist federal agencies implementing mergers and other organizational
transformations, we have identified eight key practices for
successfully merging and transforming organizations. Drawn from the
experiences of successful major private and public sector mergers and
organizational transformations, GAO developed these practices as part
of a September 2002 forum of industry and government leaders to guide
the formation of the newly created Department of Homeland Security.
[Footnote 29] The practices emphasize, among other things, planning,
transparency, and accountability and are designed to address the wide
variety of people and cultural issues that determine the success or
failure of a merger or reorganization. These practices can also help
managers balance the need to move quickly to implement the
reorganization, while addressing key challenges, including short-term
losses of productivity, effectiveness, and employee morale that can
often occur after an organizational transformation or merger. The
practices also incorporate broader workforce planning strategies that
we have identified as good practices that leading organizations follow.
These are designed to enable agencies and organizations to (1) align
their human capital programs with current and emerging missions and (2)
develop long-term strategies for acquiring, developing, and retaining
staff to achieve programmatic goals.[Footnote 30] Appendix III lists
the implementation steps associated with each key practice and provides
a broader discussion of the key challenges to successfully managing
change. Appendix IV lists selected GAO reports assessing organizational
transformations.
State's Implementation of the Reorganization Addressed Few of the Eight
Key Practices for Successfully Restructuring and Merging Organizations:
According to State officials, to guide the reorganization process,
State prepared a nine-page methodology paper that the SMP used as its
informal implementation guide that, in effect, became its plan for
implementing the reorganization and placing employees in their new
positions. The guide devoted one page to the procedures for
implementing the reorganization and eight pages to describing how staff
would be placed in their positions and who would conduct the selection
process. Based on our identified key practices for implementing
organizational transformations and mergers, we found that State
generally addressed one key practice, partially addressed two
practices, and did not address the remaining five. Figure 5 shows the
results of our analysis, which compares State's actions with the key
practices, while also taking into account the experience that we have
had assessing other agencies' actions to merge and reorganize.
Figure 5: Assessment of the Extent to Which State's 2005-2006
Reorganization of the T Bureaus Addressed Key Practices for
Organizational Transformations and Mergers:
[Refer to PDF for image: illustrated table]
Practice: Ensure top leadership drives the transformation;
Addressed: Generally addressed: State addressed most of the
implementation steps associated with this practice;
Summary of findings:
* Two successive Secretaries of State set the direction and tone of the
reorganization by signing memos authorizing the merger of the Arms
Control and Nonproliferation bureaus.
* State‘s July 2005 notification letter defined and articulated a
succinct and compelling reason for the change, among them the need to
address post September 11, 2001 emerging challenges; reduce
bureaucratic inefficiencies; and increase Foreign Service officer
participation in the new bureaus.
Practice: Dedicate an implementation team to manage the transformation
process;
Addressed: Partially addressed: State addressed some of the
implementation steps associated with this practice;
Summary of findings:
* The Undersecretary for Arms Control and International Security
established a Senior Management Panel (SMP) in September 2005 to
implement the reorganization. The SMP initially consisted of four
political appointees, including the deputy assistant secretaries of the
3 bureaus that were undergoing reorganization.
* However, the SMP initially did not include any career officials. The
SMP also initially did not include any representatives of other State
bureaus and offices with knowledge or expertise dealing with personnel
issues, such as the Bureau of Human Resources, and change management
principles.
Practice: Establish a communications strategy to create shared
expectations and report progress;
Addressed: Partially addressed: State addressed some of the
implementation steps associated with this practice;
Summary of findings:
* State communicated with staff through meetings, memos and e-mails,
but the informal implementation paper it developed to guide the
reorganization did not contain an overall communications strategy.
* The messages communicated were not consistent and did not always meet
the specific needs of employees
Practice: Involve employees to gain their ideas, as well as ownership
over the transformation;
Addressed: Not addressed: State did not substantively address many of
the steps associated with this practice;
Summary of findings:
* The SMP directed the reorganization in a top-down fashion, excluding
career officials in deciding who the acting office directors would be.
Only in response to employee concerns was a career official appointed
to the SMP in October 2005.
* The American Foreign Service Association (AFSA), which represents
Foreign Service officers, also expressed concern that agency officials
were not sufficiently making an effort to engage it in the
reorganization process.
Practice: Focus on a set of key principles and priorities at the outset
of the transformation.
Addressed: Not addressed: State did not substantively address many of
the steps associated with this practice;
Summary of findings:
* State‘s informal implementation paper to guide the reorganization
process never explicitly identified a set of principles to guide
internal decision making.
* A senior T bureau official criticized the SMP for focusing only on
the most basic legal or regulatory aspects of the personnel placement
process and not adhering to sound personnel management principles.
Practice: Set implementation goals and a time to build momentum and
show progress from day one;
Addressed: Not addressed: State did not substantively address many of
the steps associated with this practice;
Summary of findings:
* State‘s implementation paper to guide the reorganization process
never set goals or a timeline.
* State did not craft the reorganization with reference to its larger
workforce planning goals in mind; it did not make use of a baseline
workforce allocation study completed in September 2004 by the Bureau of
Human Resources.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation;
Addressed: Not addressed: State did not substantively address many of
the steps associated with this practice;
Summary of findings:
* State‘s informal implementation paper to guide the reorganization
process was never formalized and did not set forth a results-oriented
reporting framework that defined an end state with clear and measurable
goals.
Practice: Use the performance management system to define
responsibility and assure accountability for change;
Addressed: Not addressed: State did not substantively address many of
the steps associated with this practice;
Summary of findings:
* The fiscal year 2006 AC, NP, and VC bureau performance plans and
fiscal years 2007 and 2008 VCI and ISN plans make no reference to the
reorganization.
Source: GAO.
[End of figure]
State Generally Addressed One Key Practice:
We found that State generally addressed the key practice of ensuring
that top leadership drives the transformation. Leadership must set the
direction, pace, and tone, and define and articulate a succinct and
compelling reason for change. During State's merger of the NP and AC
bureaus, two successive Secretaries of State drove the process by
signing memos approving the reorganization. In addition, State's July
2005 notification to Congress also described reasons to justify merging
the two bureaus, including the need to address post-September 11
challenges and combine related offices to reduce bureaucratic
inefficiencies.
State Partially Addressed Two Practices:
State's 2005-2006 reorganization partially addressed two practices: (1)
dedicating an implementation team to manage the transformation process
and (2) establishing a communication strategy to create shared
expectations and report related progress.
State dedicated an implementation team, the SMP, to manage the
transformation process, but initially the team did not contain any
career officials when it selected acting office directors non-
competitively. The composition of an implementation team is important
because it sends a clear signal regarding the components of a merger
and whether the new organization is a merger of equals. In the latter
case, the team should consist of a balance of employees from the
various components. In addition, according to State officials, the
qualifications of implementation team members are also a visible sign
that top leadership is serious and committed to the merger or
transformation. For instance, the implementation team can include
personnel with knowledge or expertise on personnel issues, change
management principles, and perform other complex tasks associated with
such reorganizations. While the SMP functioned as an implementation
team to help manage the process, it initially lacked balance because it
contained neither career officials nor employees with the knowledge of
how to conduct necessary reorganization steps, such as preparing
implementation plans; and establishing target personnel ceilings,
position descriptions, and grade levels. Staff were not permanently
placed, and position descriptions and office mission statements were
not formalized until after the start of the reorganization. T human
resource officials told us this should have been done before the
reorganization started.[Footnote 31] Moreover, the chair of the SMP
stated that its members did not have any knowledge of the eight key
practices that are critical to the success of any merger or
transformation. In fact, Bureau of Human Resources (HR) and T human
resource officials originally envisioned the SMP would serve as a
recommending body, with HR and T human resource officials in charge of
implementing the reorganization.
State communicated with staff through meetings, memos, and e-mails, but
its informal implementation guide did not contain an overall
communications strategy. Moreover, the messages communicated were not
consistent and did not always meet the specific needs of employees. As
we noted in our 2003 report, communication is most effective when done
early, clearly, often, and in multiple directions. It also needs to be
consistent in tone and content to alleviate the uncertainties generated
during the transformation effort. We found that the SMP's
communications were not consistent. While the SMP's September 28, 2005,
announcement designating acting office directors stated that HR had
approved the SMP's decisions, HR did not agree with all of them.
Moreover, SMP officials told us that the panel's deliberations were
conducted in near secrecy, without HR participation or written criteria
to justify decision-making. In addition, the information provided did
not always meet the specific needs of employees. For instance,
employees stated that they were being required to make work choices
without key information, such as final mission and position statements
corresponding to the new organization. According to T human resource
officials, these statements should have been developed prior to
requiring staff to submit their work preferences.
State Did Not Address Five Practices:
State's 2005-2006 reorganization did not address five practices. It did
not (1) involve employees to obtain their ideas and gain ownership for
the process, (2) focus on a key set of principles and priorities at the
outset of the transformation, (3) set implementation goals and a
timeline to build momentum and show progress from day one, (4)
establish a coherent mission and integrated strategic goals to guide
the transformation, and (5) use the performance management system to
define responsibility and assure accountability for change.
* State did not involve employees to obtain their ideas and conducted
the reorganization in a top-down fashion. Organizations undergoing
mergers and other organizational transformations must involve employees
from the beginning to achieve their ownership for the changes that are
occurring in the organization. This can be done in several ways. For
instance, the U.S. Citizenship and Immigration Service involves its
employees through focus groups, project teams, and meetings with union
representatives. Information gathered from focus groups will be used to
create feedback surveys. We found that State did not effectively
involve employees in the process and directed the reorganization in a
top-down fashion. For example, it excluded career officials in deciding
who the acting office directors would be. Only in response to employee
concerns was a career official appointed to the panel. In addition,
according to American Foreign Service Association (AFSA) officials,
State did not effectively engage AFSA, the union that represents FSOs.
* State did not focus on key principles and priorities from the outset
of the merger, such as adherence to sound personnel management
principles. For example, the new organization must have a clear set of
core values and priorities that serve as a framework to assist in the
creation of a new culture and to define the attributes that are
intrinsically important to the new organization. Aside from stating
that the placement process would be done fairly and in accordance with
personnel laws and regulations, State's informal implementation guide
never explicitly identified a set of principles to guide internal
decision making. In addition, a senior T bureaus official criticized
the SMP for focusing on only the most basic legal or regulatory aspects
of the personnel placement process and not adhering to sound personnel
management principles. According to this official, this included not
finalizing office mission and position descriptions and not extensively
involving career and other officials, such as ones from HR, from the
beginning of the reorganization.
* State did not set implementation goals and a timeline to build
momentum and show progress from day one. At a minimum, successful
mergers and acquisitions have careful and thorough 30-, 60-, and 90-day
plans in place well before the effective implementation date, as well
as a timeline for achieving their goals.[Footnote 32] This can help an
organization track its progress toward intermediate and long-range
goals, show progress, help pinpoint performance shortfalls and gaps,
and suggest midcourse corrections. However, the SMP's informal
implementation guide did not set goals or a timeline. SMP officials
said that they did not set a timeline for the reorganization because
they wanted to complete the reorganization quickly and did not know how
long it would take. In addition, State did not craft the reorganization
with reference to its larger workforce planning goals in mind.
Moreover, it did not make use of a September 2004 baseline workforce
allocation study performed by the HR bureau in anticipation of the
reorganization, which was based on data from State's Domestic Staffing
Model.[Footnote 33] According to State officials, this study was made
available to the task force formed to respond to the State IG's
recommendations, but was not provided to the SMP. As a result,
potential workload imbalances or staffing gaps identified in the report
were not addressed. According to SMP officials, the Undersecretary did
not use data from the staffing model because the reorganization would
not add staff positions and would eliminate positions with long-
standing vacancies.
* State did not establish a coherent mission and integrated goals to
guide the transformation. This includes setting performance goals,
measuring progress, and determining strategies and resources to
effectively accomplish the goals. It also includes using performance
measures to make the programmatic decisions necessary to improve
performance and formally communicate results in performance reports.
The SMP's informal implementation guide was never formalized and did
not contain a results-oriented reporting framework, including
performance measures that defined an end state with clear and
measurable goals.[Footnote 34]
* State did not use its performance management system to define
responsibility and ensure accountability for change. A new
organization's performance management system should create a "line of
sight" showing how team, unit, and individual performance can
contribute to overall organizational results.[Footnote 35] We have
identified specific measures that can be taken to accomplish this, such
as (1) aligning individual performance expectations with organizational
goals, (2) providing and routinely using performance information to
track organizational priorities, and (3) linking pay to individual and
organizational performance.[Footnote 36] While State's fiscal year 2006
AC, NP, and VC bureau performance plans and fiscal years 2007 and 2008
VCI and ISN plans use performance ratings to track progress toward
organizational goals and objectives, the plans do not mention the
reorganization.[Footnote 37]
State's Unsystematic Approach Contributed to Staff and Employee Group
Concerns:
Instead of using the above practices to plan, implement, and assess the
results of the restructuring, State reorganized the bureaus
unsystematically, contributing to staff and employee group criticisms
of the process and suspicions that some staff decisions had been
politically motivated. State officials told us that they spent most of
their time in the months before September 2005 developing the
organizational structure for the new bureau and little time planning to
implement the reorganization. In the wake of the reorganization, some
ISN staff stated they perceived morale within their bureau to be lower.
According to State data, attrition rates rose to levels higher than the
average for State's civil service as a whole.
To implement the reorganization, the T human resource office furnished
an informal implementation guide to the SMP at the panel's request.
This paper envisioned a reorganization directed by the Bureau of Human
Resources and the T bureaus' human resource office, while the SMP would
serve as an advisory body that would recommend specific actions, such
as decisions on acting directors, staffing levels, and other details
for the new ISN offices. Instead, according to a senior T official, the
SMP made its own implementing decisions and reduced HR's and the T
bureaus' human resource office's roles to ensuring that State followed
all applicable legal and regulatory requirements.
State officials and employees expressed concerns about the SMP's
direction and conduct of the reorganization even before the panel made
its first public announcement about the reorganization on September 28,
2005. While the Office of the Legal Advisor and HR stated that the SMP
could direct the reorganization, some officials in HR and the T
bureaus' human resource office disagreed with this decision.[Footnote
38] According to T bureau officials, they were concerned that the
panel's members were not sufficiently knowledgeable about change and
personnel management principles. On September 29, 2005--the day after
the SMP sent out its summary of the reorganization procedures--a senior
T bureaus' official with human resource responsibilities sent an e-mail
to the SMP stating that it was not following sound personnel management
principles.[Footnote 39] The email also stated that the SMP had ignored
or misinterpreted her office's recommendations, advice, and suggestions
to the extent that the office had been unable to contribute
meaningfully to the reorganization process.
Some ISN employees and AFSA officials also criticized the SMP's
decisions after it publicly announced its reorganization procedures and
named acting office directors in September 2005. Eleven ISN employees
wrote a memorandum to the Undersecretary for Management and the
Director General of the Foreign Service in October 2005, stating that
morale was poor within the new ISN bureau.[Footnote 40] Moreover, these
employees stated that the SMP's selections for acting office directors
(which resulted in passing over several experienced officials for these
positions) reinforced their doubts about the impartiality of the
process, as did the lack of career officials or representatives from
the T bureaus' human resource office, HR, and the Office of the Legal
Advisor. They also expressed concern about other aspects of the
process, such as the requirement to express workforce preferences
without first having concrete position and office mission descriptions,
position grades, or the names of permanent office directors or
deputies. The employees asked the Undersecretary for Management and the
Director General of the Foreign Service to suspend the reorganization
until a comprehensive staffing plan had been developed and add career
civil service or FSOs and HR staff to the SMP, among other actions.
AFSA expressed similar concerns in a November 2005 letter to the
Secretary of State and noted that the reorganization could result in
the potential downgrade or elimination of Foreign Service-designated
positions. It also requested, among other things, that State form an
independent panel to review all proposed reorganization decisions
related to Equal Employment Opportunity concerns and allegations of
prohibited personnel practices. In response to these concerns, State
named a career official to the SMP, and included representatives of the
HR bureau and the Office of the Legal Advisor in the SMP's discussions,
and agreed to have HR review the position descriptions of the acting
office directors and prepare new position descriptions where necessary.
The lack of confidence in the reorganization may have adversely
affected staff morale and may have contributed to increased ISN civil
service attrition rates that immediately followed the reorganization,
according to current and former State officials and documents. Twelve
percent of ISN's full-time civil service employees retired or otherwise
left the bureau in fiscal 2006, the highest level for the bureau and
its predecessors from fiscal year 2004 to fiscal year 2008. In
contrast, State's overall civil service attrition rate during the same
period averaged about 8 percent.[Footnote 41]
State's Foreign Affairs Manual Does Not Address Use of Key Practices
for Merging, Transforming, or Reorganizing Bureaus:
State's FAM does not address the use of key practices in merging,
transforming, and reorganizing bureaus, offices, and other
organizations. Volume 1 of the FAM provides broad guidance and
principles for structuring bureaus and offices within the Department.
[Footnote 42] It also states that bureaus considering changes to their
organizational structures should consult with staff from the
Undersecretary for Management with regard to general management policy
and planning issues, since the Undersecretary can overturn any changes
that violate these broad organizational policies. However, the FAM does
not discuss or document any procedures for reorganizing, merging, or
transforming an organization, including the use of key practices.
Conclusion:
State cannot demonstrate that it achieved all of the stated objectives
for the 2005-2006 reorganization of its arms control and
nonproliferation functions. For example, State intended to address the
previously identified deficiency of overlapping and uncertain roles and
responsibilities among the arms control, nonproliferation, and
verification bureaus. However, concerns about this deficiency persist,
in part because State has yet to clearly delineate the roles and
responsibilities of the three bureaus in the FAM, despite having
notified Congress in June 2008 that these omissions would be rectified.
In addition, the reorganization appears to have been conducted in an
unsystematic fashion with little effort to address key transformation
practices, such as involving employees from the beginning or
establishing a coherent mission and strategic goals. By not addressing
these key practices, State undermined its ability to implement an
effective and credible reorganization, achieve its stated goals, and
correct documented deficiencies. As a result, the reorganization
appeared to lose credibility among staff, may have contributed to
reduced employee morale, and created negative perceptions among staff
that continue to the present. Any future efforts to restructure State's
arms control and nonproliferation bureaucracy need to address these key
transformation practices. In particular, by establishing a results-
oriented reporting framework with a defined end state with clear and
measurable goals, State would be better able to gauge progress toward
its goals and assess the results of restructuring.
Recommendations for Executive Action:
We recommend the Secretary of State take the following two actions:
* To better clarify the roles and responsibilities of the two new
bureaus created in this restructuring, the Bureau of International
Security and Nonproliferation and the Bureau of Verification,
Compliance, and Implementation--and to fulfill a pledge made to
Congress--the Secretary of State should formally delineate the roles
and responsibilities of each bureau in the FAM.
* To better achieve stated goals and to implement effective and
credible organizational mergers or transformations, the Secretary of
State should modify the FAM to direct that the key practices and steps
associated with successful organizational mergers and transformations
are incorporated into subsequent bureau reorganizations.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, State concurred with our
conclusions and recommendations. State indicated it will delineate the
roles and responsibilities for the ISN and VCI bureaus and add them to
the FAM. Moreover, State's Undersecretary for Management has directed
that GAO's key practices for organizational transformations and mergers
be adopted by State when undertaking organizational transformations and
mergers. It noted that these principles will be incorporated in the
Foreign Affairs Handbook and FAM as appropriate. State's comments are
included in their entirety in Appendix V.
We are sending copies of the report to the Secretary of State and other
interested parties or interested congressional committees. In addition,
the report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have questions about this report, please contact
me at (202) 512-4128 or at christoffj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix VI.
Sincerely,
Signed by:
Joseph A. Christoff:
Director, International Affairs and Trade:
[End of section]
Appendix I: Scope and Methodology:
To assess the extent to which the Department of State's (State) 2005-
2006 reorganization achieved its objectives, we examined State
Department Inspector General's 2004 reports to determine its findings
and recommendations. We also reviewed various documents, including
State's July 2005 congressional notification letter; the 2002 U.S.
National Strategy to Combat Weapons of Mass Destruction, and the T
bureaus' strategic and performance plans before and after the
reorganization, as well as mission statements. These and other
documents enabled us to determine the goals and achievements of the
reorganization and construct the before and after organizational charts
found in the report.
To better understand what State did and did not achieve, we examined
State's workforce allocations, staffing patterns, Foreign Service
Officer (FSO) promotion rates and civil service and FSO attrition data
for the affected bureaus before and after the reorganization, as well
as a study of the Bureau of International Security and
Nonproliferation's (ISN) workforce conducted in May 2006. We met with
officials from State's ISN and Bureau of Verification, Compliance, and
Implementation (VCI), as well as the Human Resources and Management
bureaus. We determined that the staffing data provided by State are
sufficiently reliable for our purposes by verifying that the personnel
information for each employee named in the 2004 and 2008 staffing
profiles had a corresponding position description and grade listed on
the employees' profiles. To determine the reliability of the staffing
data, we randomly selected at least 10 percent of the staff listed in
both the 2004 roster and the 2008 roster and only found minor
discrepancies that did not impact the total number of FTEs in our
sample.
State did not provide consistent before and after promotion rate data
for civil service and Foreign Service staff in the bureaus affected by
the reorganization. State said that providing data to enable us to
compare T bureau promotion rates with State-wide averages or regional
bureau averages would be misleading because promotion in the civil
service and the Foreign Service is based on performance over a 5-year
period and for that reason cannot be attributed solely to service in
the T bureaus. Instead, we have used data State previously provided to
the Congress after the 2008 congressional hearings. Similarly, we asked
State to provide consistent before and after attrition rate data for
civil service staff in the bureaus affected by the reorganization and
for State as a whole between fiscal years 2002 and 2008. State did
provide bureau-specific civil service attrition rate data for the
requested years and provided the department-wide data between fiscal
years 2004 and 2008. Finally, we examined State's Foreign Affairs
Manual to determine that, as of June 2009, the manual still does not
define the organization and roles of the ISN and VCI bureaus.
To assess the extent to which State's 2005-2006 reorganization
addressed eight key transformation practices, we obtained and analyzed
State's methodology for implementing the reorganization, as well as e-
mail, memos, and letters describing the decision-making process and
concerns about the manner in which State implemented the
reorganization. While previous GAO reports had noted ninth practice,
that of building a world class organization, we determined that its
associated implementation steps were too broad to apply to the limited
reorganization of State's arms control and nonproliferation
bureaucracy. We assessed this evidence to determine whether it
demonstrated that State had generally addressed, partially addressed,
or had not addressed the objective. We determined that State's
reorganization had generally addressed a practice if State addressed
most of the implementation steps associated with this practice. We
determined that it had partially addressed a practice if the evidence
demonstrated State had addressed some of the implementation steps
associated with this practice but had not addressed others. We
determined that State had not addressed a practice if it had not
substantively addressed any of the steps associated with this practice.
Two analysts independently reviewed and reconciled any differences in
the data, and their results were subject to supervisory review.
We also interviewed all of the principal members of the Senior
Management Panel, as well as other staff knowledgeable about the
process, including staff from the T bureaus' executive office and the
Bureau of Human Resources. We obtained and analyzed transcripts of
congressional hearings in 2006 and 2008 that addressed aspects of the
reorganization. We analyzed and compared the information obtained from
these sources with GAO's key practices, especially as laid out in GAO-
03-293SP and GAO-03-669. We also analyzed and compared State's actions
with our reports documenting reorganizations conducted by other U.S.
government agencies, such as the Small Business Administration and the
U.S. Citizenship and Immigration Services. We examined State's Domestic
Staffing Model for the T bureaus to assess how the reorganization
affected allocations among the broad missions of affected T bureau
workforce resources.
We conducted this performance audit from September 2008 through July
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Staffing Profiles of the Affected Bureaus before and after
the Reorganization:
Overall, State combined 30 offices and functions present in the three-
bureau structure into 26 offices and functions present under the new
two-bureau structure. In particular, the merger of the bureaus of Arms
Control (AC) and Nonproliferation (NP) into the new ISN bureau resulted
in an organization with fewer offices, functions, and staff. The
reorganization consolidated 24 issue-related offices and functions
present in the two old bureaus into 17 issue-related offices and
functions in the new bureau. Also State did succeed in slightly
reducing its overall personnel needs in these bureaus. In October 2004,
the AC, NP, and Verification and Compliance (VC) bureaus had a total of
440 staff positions; by November 2008, the ISN and VCI bureaus had a
total of 434 staff. The reorganization affected four types of personnel
positions: (1) civil service full-time equivalents (FTE), which are
positions funded by the bureau in which they are located; (2) Foreign
Service FTEs; (3) other government staff (that is, personnel not
directly funded by the bureaus such as detailees from other State
bureaus, other government agencies, the armed services, and interns);
and (4) contracted employees.
In 2004, the AC and NP bureaus had a total of 314 staff positions. By
2008, after they had merged to form the new ISN bureau, that total had
decreased to 291 staff positions. As depicted in table 1, the new total
reflects changes in the numbers and composition of the staff positions
available to ISN, with declines in the number of civil service and
Foreign Service FTEs, but an increase in the number of contracted
employees. The number of other government staff positions also
declined.
The reductions resulting from the merger of the AC and NP bureaus into
the ISN bureau were largely offset by the augmented roles and increased
staff given to the old VC bureau. Congress had made its acceptance of
the new two-bureau structure conditional upon the transfer of some
offices and duties to the newly expanded and renamed Bureau of
Verification, Compliance and Implementation. As a result of these
changes, total staff positions increased from 126 under the old VC
bureau to 143 under the new VCI bureau.
Table 1: Staffing Profiles of the Affected Bureaus before and after the
Reorganization: All Staff:
Positions: Principal/Deputy Assistant Secretaries;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004): 4;
Bureaus: Verification and Compliance Bureau (2004): 2;
Bureaus: Total 2004: 6;
Bureaus: International Security and Negotiations Bureau (2008): 3;
Bureaus: Verification, Compliance, and Implementation Bureau (2008): 2;
Bureaus: Total 2008: 5.
Positions: Issue-related offices and functions;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004): 24;
Bureaus: Verification and Compliance Bureau (2004): 6;
Bureaus: Total 2004: 30;
Bureaus: International Security and Negotiations Bureau (2008): 17;
Bureaus: Verification, Compliance, and Implementation Bureau (2008): 8;
Bureaus: Total 2008: 25.
Positions: Total FTEs[A];
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004):
278[A];
Bureaus: Verification and Compliance Bureau (2004): 84;
Bureaus: Total 2004: 362;
Bureaus: International Security and Negotiations Bureau (2008): 247;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
103;
Bureaus: Total 2008: 350.
Positions: Total FTEs-Civil service;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004):
236;
Bureaus: Verification and Compliance Bureau (2004): 77;
Bureaus: Total 2004: 313;
Bureaus: International Security and Negotiations Bureau (2008): 215;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
92;
Bureaus: Total 2008: 307.
Positions: Total FTEs-Foreign Service;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004): 41;
Bureaus: Verification and Compliance Bureau (2004): 7;
Bureaus: Total 2004: 48;
Bureaus: International Security and Negotiations Bureau (2008): 32;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
11;
Bureaus: Total 2008: 43.
Positions: Other government staff[B];
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004): 29;
Bureaus: Verification and Compliance Bureau (2004): 19;
Bureaus: Total 2004: 48;
Bureaus: International Security and Negotiations Bureau (2008): 33;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
11;
Bureaus: Total 2008: 44.
Positions: Contracted Employees;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004): 7;
Bureaus: Verification and Compliance Bureau (2004): 23;
Bureaus: Total 2004: 30;
Bureaus: International Security and Negotiations Bureau (2008): 11;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
29;
Bureaus: Total 2008: 40.
Positions: Total staff slots;
Bureaus: Arms Control and Nonproliferation Bureaus Combined (2004):
314;
Bureaus: Verification and Compliance Bureau (2004): 126;
Bureaus: Total 2004: 440;
Bureaus: International Security and Negotiations Bureau (2008): 291;
Bureaus: Verification, Compliance, and Implementation Bureau (2008):
143;
Bureaus: Total 2008: 434.
Source; GAO analysis of State Department data.
[A] Total includes one FTE position of an undetermined service or grade
at the time the 2004 staffing profile was produced.
[B] Other government staff are personnel not directly funded by the
bureau to which they are presently assigned. This category includes
detailees from other State bureaus and agencies, military personnel,
and interns:
[End of table]
Table 2: Staffing Profiles of the Affected Bureaus before and after the
Reorganization: Staff with A Rank of FO-1 and Above In the Foreign
Service and GS-15 and Above In the Civil Service:
Category: Total Foreign Service positions;
Arms Control and Nonproliferation Bureaus Combined (2004): 14;
Verification and Compliance Bureau (2004): 0;
Total 2004: 14;
International Security and Negotiations Bureau (2008): 10;
Verification, Compliance, and Implementation Bureau (2008): 2;
Total 2008: 12.
Category: Total Foreign Service positions; Senior Foreign Service;
Arms Control and Nonproliferation Bureaus Combined (2004): 6;
Verification and Compliance Bureau (2004): 0;
Total 2004: 6;
International Security and Negotiations Bureau (2008): 6;
Verification, Compliance, and Implementation Bureau (2008): 1;
Total 2008: 7.
Category: Total Foreign Service positions; FO-1s;
Arms Control and Nonproliferation Bureaus Combined (2004): 8;
Verification and Compliance Bureau (2004): 0;
Total 2004: 8;
International Security and Negotiations Bureau (2008): 4;
Verification, Compliance, and Implementation Bureau (2008): 1;
Total 2008: 5.
Category: Total civil service positions;
Arms Control and Nonproliferation Bureaus Combined (2004): 56;
Verification and Compliance Bureau (2004): 21;
Total 2004: 77;
International Security and Negotiations Bureau (2008): 58;
Verification, Compliance, and Implementation Bureau (2008): 30;
Total 2008: 88.
Category: Total civil service positions; SES;
Arms Control and Nonproliferation Bureaus Combined (2004): 16;
Verification and Compliance Bureau (2004): 5;
Total 2004: 21;
International Security and Negotiations Bureau (2008): 8;
Verification, Compliance, and Implementation Bureau (2008): 5;
Total 2008: 13.
Category: Total civil service positions; GS-15s;
Arms Control and Nonproliferation Bureaus Combined (2004): 40;
Verification and Compliance Bureau (2004): 16;
Total 2004: 56;
International Security and Negotiations Bureau (2008): 50;
Verification, Compliance, and Implementation Bureau (2008): 25;
Total 2008: 75.
Category: Totals;
Arms Control and Nonproliferation Bureaus Combined (2004): 70;
Verification and Compliance Bureau (2004): 21; Total 2004: 91;
International Security and Negotiations Bureau (2008): 68;
Verification, Compliance, and Implementation Bureau (2008): 32;
Total 2008: 100.
Source; GAO analysis of State Department data.
[End of table]
[End of section]
Appendix III: GAO's Key Practices and Implementation Steps for
Organizational Transformations and Mergers:
Figure 6: GAO's Key Practices and Associated Implementation Steps:
[Refer to PDF for image: illustrated table]
Practice: Ensure top leadership drives the transformation;
Implementation Step:
* Define and articulate a succinct and compelling reason for change;
* Balance continued delivery of services with merger and transformation
activities.
Practice: Dedicate an implementation team to manage the transformation
process;
Implementation Step:
* Establish networks to support implementation team;
* Select high-performing members.
Practice: Establish a communications strategy to create shared
expectations and report related progress;
Implementation Step:
* Communicate early and often to build trust;
* Ensure consistency of message;
* Encourage two-way communication;
* Provide information to meet specific needs of employees.
Practice: Involve employees to obtain their ideas and gain ownership
for the transformation;
Implementation Step:
* Use employee teams;
* Involve employees in planning and sharing performance information;
* Incorporate employee feedback into new policies and procedures;
* Delegate authority to appropriate organizational levels.
Practice: Focus on a set of key principles and priorities at the outset
of the transformation;
Implementation Step:
* Embed core values in every aspect of the organization to reinforce
the new culture.
Practice: Set implementation goals and a timeline to build momentum and
show progress from day one;
Implementation Step:
* Make public implementation goals and timeline;
* Seek and monitor employee attitudes and take appropriate follow-on
actions;
* Attract and retain key talent;
* Establish an organizationwide knowledge and skills inventory to
exchange knowledge among merging organizations;
* Identify cultural features of merging organizations to increase
understanding of former work environments.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation;
Implementation Step:
* Adopt leading practices for results-oriented strategic planning and
reporting.
Practice: Use the performance management system to define
responsibility and assure accountability for change.
Implementation Step:
* Adopt leading practices to implement effective performance management
systems with adequate safeguards.
Source: GAO.
[End of figure]
Following the key practices and implementation steps outlined in figure
6 above can reduce the chances that major problems could surface and
minimize the duration and significance of reduced productivity and
effectiveness. However, it does not mean that problems will not emerge.
This methodology recognizes that mergers and reorganizations can
ultimately create a new organization that is more than "the sum of its
parts" over the longer term. It also acknowledges that transformation
can be difficult and disruptive to implement in the shorter term,
particularly in the public sector, since public sector reorganizations
must contend with more stakeholders and power centers, less management
flexibility, and greater transparency than in the private sector. To be
successful, managers must understand and reconcile some contradictions
while implementing change. These contradictions include the following:
* The need to move quickly, achieve early successes, and build momentum
while acknowledging that successful mergers and organizational
transformation can often take years to accomplish, and the pace cannot
be forced. The experiences of major change initiatives in large public
and private sector organizations suggest that it can take 5 to 7 years
before such initiatives are fully implemented.
* Productivity and effectiveness normally decline in the period
immediately following the merger. This is because employees are often
preoccupied with how their jobs will be affected, what their rights and
protections will be, or how their responsibilities might change with
the new organization.
* Attrition can increase as a result of the reorganization, requiring
the new organization to identify and re-recruit its key staff; however,
it can also result in opportunities to recruit "new blood." While some
turnover is to be expected and appropriate, the new organization must
"re-recruit" its key talent to limit the loss of needed individuals who
leave because they do not see their place in the new organization.
* While it is important to involve employees in the transformation
process, day-to-day operations, service quality, and mission
accomplishments must continue to take first priority. Organizations and
their employees must guard against being so involved in implementing
their transformation initiatives that they lose sight of the
fundamental reason for their transformation--improved results.
[End of section]
Appendix IV: GAO Reports Assessing Organizational Transformations Using
Mergers and Transformation Criteria:
Since 2002, we have evaluated the implementation of several
governmental organizational transformations using some or all of the
key practices and implementation steps. The following is a list of
selected products that have fully or partially applied the key
practices and implementation steps identified in Results-Oriented
Cultures: Implementation Steps to Assist Mergers and Organizational
Transformations [hyperlink, http://www.gao.gov/products/GAO-03-669] and
used them to make recommendations to Congress.
Homeland Security: Management Challenges Remain in Transforming
Immigration Programs, [hyperlink,
http://www.gao.gov/products/GAO-05-81] (Washington, D.C.: Oct. 2004).
Military Transformation: Clear Leadership, Accountability, and
Management Tools Are Needed to Enhance DOD's Efforts to Transform
Military Capabilities, [hyperlink,
http://www.gao.gov/products/GAO-05-70] (Washington, D.C.: Dec. 17,
2004).
Department of Homeland Security: A Comprehensive and Sustained Approach
Needed to Achieve Management Integration, [hyperlink,
http://www.gao.gov/products/GAO-05-139] (Washington, D.C.: Mar. 16,
2005).
Human Capital: DOD's National Security Personnel System Design
Generally Reflects Key Transformation Practices, but Faces
Implementation Challenges, [hyperlink,
http://www.gao.gov/products/GAO-05-730] July 15, 2005.
Military Transformation: Additional Actions Needed by U.S. Strategic
Command to Strengthen Implementation of Its Many Missions and New
Organization, [hyperlink, http://www.gao.gov/products/GAO-06-847]
(Washington, D.C.: Sept. 8, 2006).
Force Structure: Joint Seabasing Would Benefit from a Comprehensive
Management Approach and Rigorous Experimentation before Services Spend
Billions on New Capabilities, [hyperlink,
http://www.gao.gov/products/GAO-07-211] (Washington, D.C.: Jan. 26,
2007).
Military Base Closures: Management Strategy Needed to Mitigate
Challenges and Improve Communication to Help Ensure Timely
Implementation of Air National Guard Recommendations, [hyperlink,
http://www.gao.gov/products/GAO-07-641] (Washington, D.C.: May 16,
2007).
USCIS Transformation: Improvements to Performance, Human Capital, and
Information Technology Management Needed as Modernization Proceeds,
[hyperlink, http://www.gao.gov/products/GAO-07-1013R] (Washington,
D.C.: July 17, 2007).
Defense Business Transformation: Achieving Success Requires a Chief
Management Officer to Provide Focus and Sustained Leadership,
[hyperlink, http://www.gao.gov/products/GAO-07-1072] (Washington, D.C.:
Sept. 5, 2007):
[End of section]
Appendix V: Comments from the Department of State:
United States Department of State:
Washington, D.C. 20520:
July 13, 2009:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "State
Department: Key Transformation Practices Could Have Helped
Restructuring of Arms Control and Nonproliferation Bureaus," GAO Job
Code 320640.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact Jim
LaFemina, Deputy Director, International Security and Nonproliferation
at (202) 647-9501 and Susan Curley, Senior Analyst, Office of
Management Policy, Rightsizing, and Innovation at (202) 647-0550.
Sincerely,
Signed by:
James L. Millette:
cc:
GAO - Jeff Phillips:
ISN - Eliot Kang (Acting):
M/PRI - Marguerite Coffey:
State/OIG - Mark Duda:
[End of letter]
Department of State Comments on Draft GAO Report:
Key Transformation Practices Could Have Helped Restructuring of Arms
Control and Nonproliferation Bureaus (GAO-09-738):
Thank you for allowing the Department of State the opportunity to
comment on the recommendations included in the draft report, "State
Department: Key Transformation Practices Could Have Helped
Restructuring of Arms Control and Nonproliferation Bureaus."
Recommendation: To better clarify the roles and responsibilities of the
two new bureaus created in this restructuring, the Bureau of
International Security and Nonproliferation (ISN) and the Bureau of
Verification, Compliance, and Implementation (VCI) - and to fulfill a
pledge made to Congress - the Secretary of State should formally
delineate the roles and responsibilities of each bureau in the Foreign
Affairs Manual.
Response: We concur with the recommendation. The Department will
delineate the roles and responsibilities for the ISN and VCI bureaus
and add them to the Foreign Affairs Manual.
Recommendation: To better achieve stated goals and to implement
effective and credible organizational mergers or transformations, the
Secretary of State should issue written guidance to direct that the key
practices and steps associated with successful organizational mergers
and transformations are incorporated into subsequent bureau
reorganizations.
Response: We concur with the recommendation. The Under Secretary for
Management has directed that GAO's Key Practices for Organizational
Transformations and Mergers be adopted by the Department when
undertaking organizational transformations and mergers. Those key
principles will be incorporated into the Foreign Affairs Handbook and
Manual as appropriate.
We also appreciate the thorough review of this process provided by GAO,
and will certainly refer to the conclusions and recommendations found
in this report going forward.
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Joseph A. Christoff, (202) 512-4128 or christoffj@gao.gov:
Staff Acknowledgments:
In addition to the individual contact named above, Jeff Phillips,
Assistant Director; B. Patrick Hickey; José M. Peña III; Katherine
Bernet; Lynn Cothern; and Joseph Carney made key contributions to this
report. Technical assistance was provided by Martin De Alteriis, Mark
Dowling, Etana Finkler, and Sarah E. Veale.
[End of section]
Footnotes:
[1] Together with the Bureau of Political-Military Affairs, these
bureaus are collectively referred to as the T bureaus as they all
report to the Under Secretary of State for Arms Control and
International Security, whose office designation is T.
[2] See GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2,
2003).
[3] T bureau office directorships and other management positions are
usually filled by Foreign Officer (FO)-1s and above in the Foreign
Service, or by General Schedule (GS)-15s and above in the civil
service. However, not all FO-1s and GS-15s hold management positions in
the T bureaus.
[4] James Michel and William I. Bacchus, Workforce Allocation and
Career Development in the Bureaus Reporting to the Under Secretary of
State for Arms Control and International Security (Washington, D.C: May
31, 2006).
[5] State's FAM defines the organization and function of bureaus in the
department but makes no reference to the roles and responsibilities of
the Bureaus of International Security and Nonproliferation and
Verification, Compliance and Implementation. The State IG noted in 2004
that updating the FAM to include the Arms Control, Nonproliferation,
and Verification, Compliance and Implementation bureaus was important
as the FAM serves as the ultimate arbiter of the roles and
responsibilities of each bureau and office.
[6] U.S. Department of State and the Broadcasting Board of Governors,
Office of Inspector General, Report of Inspection, The Bureau of Arms
Control, Report Number ISP-I-05-49 (Washington, D.C.: Dec. 2004).
[7] Response to Question for the Record Submitted to Principal Deputy
Assistant Secretary Patricia McNerney and Deputy Assistant Secretary
Linda Taglialatela by Senator Carl Levin (#1), Senate Committee on
Homeland Security and Governmental Affairs, June 6, 2008 (Senate
Hearing 110-679). See [hyperlink, http://www.gpo.gov].
[8] Other key practices are establishing coherent mission and
integrated strategic goals, dedicating an implementation team to manage
the process, using the performance management system to define
managers' responsibility and accountability, and establishing a
comprehensive strategy to ensure good communication between management
and employees. For more detail on these key practices, see Results-
Oriented Cultures: Implementation Steps to Assist Mergers and
Organizational Transformations, [hyperlink,
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2,
2003).
[9] This Act also resulted in the State's incorporation of the U.S.
Information Agency. Public Law 105-277, sections 1211, 1212 (codified
at 22 U.S.C. 6511, 6512).
[10] See Div. B, sec.1112 of the Admiral James W. Nance and Meg Donovan
Foreign Relations Authorizations Act, FYs 2000, d 2001, incorporated as
Appendix G to P.L. 106-113, the Consolidated Appropriations Act, 2000.
[11] The three reports detailing the IG's findings were completed and
submitted to State for comment in August 2004, but were not published
until December 2004. In the fall of 2004, the IG also conducted a
review of the Bureau of Political-Military Affairs; however, this
review did not result in a recommendation to alter the bureau's
structure. U.S. Department of State and the Broadcasting Board of
Governors, Office of Inspector General, Report of Inspection, Bureau of
Political-Military Affairs, Report Number ISP-I-05-03 (Washington,
D.C.: Mar. 2005).
[12] State's Foreign Affairs Manual states that Assistant Secretaries
are usually in charge of leading bureaus; however, at the time of the
reorganization, only the Bureau of Political-Military Affairs had an
Assistant Secretary. The SMP was assisted by a small support staff.
[13] A fourth T bureau, Political-Military Affairs, transferred a small
number of positions as part of the reorganization. In return, State
transferred some AC and NP positions to the Political-Military Affairs
bureau.
[14] GAO issued a report on the Proliferation Security Initiative,
launched by the President in 2003 to enhance U.S. efforts to prevent
the spread of weapons of mass destruction. The report noted that the
administration has yet to direct U.S. agencies to take actions to
strengthen PSI activities, establish clear PSI structures, submit a
required budget report to Congress, or take other steps to specify how
it has addressed or will address previous GAO recommendations, such as
calling for better performance measures consistent with internal
controls, or other provisions called for in the law. See GAO,
Nonproliferation: U.S. Agencies Have Taken Some Steps, but More Effort
Is Needed to Strengthen and Expand the Proliferation Security
Initiative, [hyperlink, http://www.gao.gov/products/GAO-09-43]
(Washington, D.C.: Nov. 10, 2008).
[15] Staffing profiles for 2008 identify 7 of the 14 ISN consultants as
issue area specialists; it lists the other seven as administrative or
human resource consultants in the ISN executive office
[16] The notification did assert that the proposed merger of the NP
Nuclear Energy Office and the NP Office of the Senior Coordinator for
Nuclear Safety into the ISN Office of Nuclear Energy, Safety, and
Security was one example of how the reorganization would reduce
inefficiencies.
[17] These are the offices of Conventional Arms and Threat Reduction,
Export Controls Cooperation, and Nonproliferation and Disarmament Fund.
[18] T bureau office directorships and other management positions are
usually filled on a permanent basis by FO-1s or Senior Foreign Service
officials in the Foreign Service and by GS-15s or Senior Executive
Service officials in the civil service
[19] Although the IG made a recommendation regarding the roles of a
specific employee in the AC front office, it did not establish an ideal
size or role for these offices. The IG report on the NP bureau stated
that a blueprint for the reorganization of the front offices in the
event of a merger was best left to a multi-bureau reorganization task
force under the auspices of the Undersecretary of Management. State
formed such a task force in August 2004, but it disbanded without
agreeing on a course of action.
[20] While the notification did not define explicitly what it meant by
overlap, a 2008 State document asserted the reorganization eliminated
redundancies in office missions, as illustrated by the merger of the NP
bureau office working on chemical and biological weapons proliferation
issues with an AC bureau office working on chemical and biological
issues. See "Questions for the Record Submitted to Principal Deputy
Assistant Secretary Patricia A. McNerney and Deputy Assistant Secretary
Linda Taglialatela by Senator Daniel K. Akaka," (#14a), Senate
Committee on Homeland Security and Government Affairs, June 6, 2008.
[21] U.S. Department of State and the Broadcasting Board of Governors,
Office of Inspector General, Report of Inspection, The Bureau of Arms
Control, Report Number ISP-I-05-49 (Washington, D.C.: Dec. 2004);
Report of Inspection, The Bureau of Nonproliferation, Report Number ISP-
I-05-50 (Washington, D.C.: Dec. 2004); and Report of Inspection, The
Bureau of Verification and Compliance, Report Number ISP-I-05-50
(Washington, D.C.: December 2004)
[22] Michel and Bacchus.
[23] State's FAM defines the organization and function of bureaus in
the department but makes no reference to the roles and responsibilities
of the Bureaus of International Security and Nonproliferation and
Verification, Compliance and Implementation. The State IG noted that
updating the FAM to include the Arms Control, Nonproliferation, and
Verification, Compliance and Implementation bureaus was important as
the FAM serves as the ultimate arbiter of the roles and
responsibilities of each bureau and office. See U.S. Department of
State and the Broadcasting Board of Governors, Office of Inspector
General Report Number ISP-I-05-50.
[24] Question for the Record Submitted to Principal Deputy Assistant
Secretary Patricia McNerney and Deputy Assistant Secretary Linda
Taglialatela by Senator Carl Levin (#1), Senate Committee on Homeland
Security and Governmental Affairs, June 6, 2008.
[25] As of October 2008, 5 of 24 AC/NP office directors and special
representatives were still in the T bureaus; and 7 of 38 contracted
employees in the ISN and VCI bureaus as of 2008 had been AC, NP, or VC
employees in 2004.
[26] GAO, Nuclear Nonproliferation: Strengthened Oversight Needed to
Address Proliferation and Management Challenges in IAEA's Technical
Cooperation Program, GAO-09-275 (Washington, D.C.: Mar. 5, 2009).
[27] Other recommendations waiting action include establishing and
funding a limited number of overseas FSO positions to advise senior
embassy officials on arms control and nonproliferation issues, or allow
T bureau representatives take part in the selection of senior embassy
officials.
[28] See GAO, Highlights of a GAO Forum: Mergers and Transformation:
Lessons Learned for a Department of Homeland Security and Other Federal
Agencies, [hyperlink, http://www.gao.gov/products/GAO-03-293SP]
(Washington, D.C.: Nov.14, 2002). This report identified a ninth
practice, building a world-class organization. We did not include it in
this review because its associated steps were too broad to apply to
this reorganization.
[29] See [hyperlink, http://www.gao.gov/products/GAO-03-293SP].
[30] For a discussion of the broader workforce planning strategies that
leading organizations follow, see GAO, Human Capital: Key Principles
for Effective Strategic Workforce Planning, GAO-04-39 (Washington,
D.C.: Dec. 11, 2003). Our strategic workforce planning model is
consistent with similar efforts by the Office of Management and Budget
and the Office of Personnel Management to develop federal human capital
standards.
[31] T human resource officials belong to the T executive office, which
provides administrative support for the T bureaus.
[32] See [hyperlink, http://www.gao.gov/products/GAO-03-293SP].
[33] State uses the Domestic Staffing Model to establish human resource
demands for its domestic workforce. The Domestic Staffing Model
quantifies current demand, estimates future demand based on workload
trends, and documents current and projected workforce requirements for
use in resource planning over a 5-year planning horizon.
[34] We have developed a body of work that agencies can use to help
them become more results oriented. See GAO, Agency Performance Plans:
Examples of Practices That Can Improve Usefulness to Decisionmakers,
[hyperlink, http://www.gao.gov/products/GAO/GGD/AIMD-99-69]
(Washington, D.C.: Feb. 26, 1999).
[35] See [hyperlink, http://www.gao.gov/products/GAO-03-293SP].
[36] For additional information about using performance management
measures as part of an organization's transformation process, see
[hyperlink, http://www.gao.gov/products/GAO-03-669].
[37] We focused on the 2006 AC, NP, and VC bureau performance plans
because these outlined the bureaus' priorities for fiscal year 2006,
which started on October 1, 2005. We also focused on the 2007 VCI
performance plan and the 2008 ISN performance plan because these were
prepared right before or after the reorganization. According to State
officials, ISN did not prepare a fiscal year 2007 bureau performance
plan.
[38] HR's and the Office of the Legal Advisor's roles were to review
the SMP's decisions to prevent the SMP from taking steps that were
unlawful or violated applicable regulations or personnel practices.
[39] The HR bureau also criticized the SMP's selection of some acting
office directors but eventually agreed that the SMP did not need its
approval for this process.
[40] The Undersecretary for Management is the head of State's M family
of bureaus, which includes the Bureau of Human Resources. The Director
General of the Foreign Service's full title is Director General of the
Foreign Service and Director of Human Resources. The Director General
oversees the Bureau of Human Resources, which handles recruitment,
assignment evaluation, promotion, discipline, career development, and
retirement policies and programs for both State's Foreign Service and
Civil Service employees.
[41] Attrition rates are based on the number of career full-time
employees, and include retirements, non-retirement separations, and
conversions. Conversions include employees who converted to an
employment status that is not a full-time civil service career
position.
[42] For example, the FAM requires organizational entities and
subcomponents to have a minimum of eight employees and suggests that
like functions should be grouped together in an organization.
[End of section]
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