oversight

Foreign Affairs: Effective Stewardship of Resources Essential to Efficient Operations at State Department, USAID

Published by the Government Accountability Office on 2003-09-04.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                              United States General Accounting Office

GAO                           Testimony
                              Before the House Committee on
                              International Relations


For Release on Delivery
Expected at 10:30 a.m. EST
Thursday, September 4, 2003   FOREIGN AFFAIRS
                              Effective Stewardship of
                              Resources Essential to
                              Efficient Operations at State
                              Department, USAID
                              Statement of Jess T. Ford, Director
                              International Affairs and Trade




GAO-03-1009T
                                                September 4, 2003


                                                FOREIGN AFFAIRS

                                                Effective Stewardship of Resources
Highlights of GAO-03-1009T, testimony           Essential to Efficient Operations at State
before the House Committee on
International Relations                         Department, USAID



In recent years, funding for the                Overall, State has increased its attention to managing resources, and its
Department of State has increased               efforts are starting to show results, including potential cost savings and
dramatically, particularly for                  improved operational effectiveness and efficiency. For example,
security upgrades at overseas
facilities and a major hiring                   •   In 1996, GAO criticized State’s performance in disposing of its overseas
program. The U.S. Agency for
International Development
                                                    property. Between fiscal years 1997 through 2002, State sold 129
(USAID) has also received more                      properties for more than $459 million with plans to sell additional
funds, especially for programs in                   properties between fiscal years 2003 through 2008 for approximately
Afghanistan and Iraq and HIV/AIDS                   $300 million. Additional sales would help offset costs of replacing about
relief. Both State and USAID face                   160 unsecure and deteriorating embassies.
significant management challenges
in carrying out their respective                •   State is now taking a more businesslike approach with its embassy
missions, particularly in areas such                construction program, which is estimated to cost an additional $17
as human capital management,                        billion beginning in fiscal year 2004. Cost-cutting efforts allowed State to
performance measurement, and                        achieve $150 million in potential cost savings during fiscal year 2002.
information technology                              State should continue its reforms as it determines requirements for,
management. Despite increased
funding, resources are not
                                                    designs, and builds new embassies.
unlimited. Thus, State, USAID, and
all government agencies have an                 •   The costs of maintaining staff overseas are generally very high. In
obligation to ensure that taxpayer                  response to management weaknesses GAO identified, State has begun
resources are managed wisely.                       addressing workforce planning issues to ensure that the government has
Long-lasting improvements in                        the right people in the right places at the right times. State should
performance will require continual                  continue this work and adopt industry best practices that could reduce
vigilance and the identification of                 costs and streamline services overseas.
widespread opportunities to
improve the economy, efficiency,                •   GAO and others have highlighted deficiencies in State’s information
and effectiveness of State’s and                    technology. State invested $236 million in fiscal year 2002 on
USAID’s existing goals and
programs.
                                                    modernization initiatives overseas and plans to spend $262 million over
                                                    fiscal years 2003 and 2004. Ongoing oversight of this investment will be
GAO was asked to summarize its                      necessary to minimize the risks of spending large sums of money on
findings from reports on State’s and                systems that do not produce commensurate value.
USAID’s management of resources,
actions taken in response to our                •   State has improved its strategic planning to better link staffing and
reports, and recommendations to                     budgetary requirements with policy priorities. Setting clear objectives
promote cost savings and more                       and tying resources to them will make operations more efficient.
efficient and effective operations at
the department and agency.                      GAO and others have also identified some management weaknesses at
                                                USAID, mainly in human capital management and workforce planning,
                                                program evaluation and performance measurement, information technology,
                                                and financial management. While USAID is taking corrective actions, better
                                                management of critical systems is essential to safeguard the agency’s funds.
www.gao.gov/cgi-bin/getrpt?GAO-03-1009T.
                                                Given the added resources State and USAID must manage, current budget
To view the full product, including the scope   deficits, and new requirements since Sept. 11, 2001, oversight is needed to
and methodology, click on the link above.       ensure continued progress toward effective management practices. This
For more information, contact Jess Ford at
(202) 512-4128 or fordj@gao.gov.
                                                focus could result in cost savings or other efficiencies.
Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss the Department of State’s and the
U.S. Agency for International Development’s (USAID) stewardship of their
resources and areas within their budgets where applying strong
management practices has the potential to produce efficiencies that could
result in cost savings. To put this in perspective, in fiscal year 2003, State
was appropriated about $6 billion for the administration of foreign affairs
and USAID received approximately $12 billion in total program funding.

In carrying out its mission of forming, representing, and implementing U.S.
foreign policy, State faces complex challenges, some of which have
intensified since the terrorist attacks of September 11, 2001, including the
provision of secure facilities overseas. Over the last several years, funding
for State’s operations has increased, particularly for security upgrades at
embassies and consulates around the world and for a major hiring
program to meet U.S. foreign policy needs. USAID has also received
significant funding increases for foreign assistance programs, in
Afghanistan and Iraq in particular, as well as for HIV/AIDS relief programs.
However, resources are not unlimited, and sound management practices
can affect the utilization of large sums of money.

Over the years, GAO, State’s Office of the Inspector General (OIG), and
various commissions and studies have identified numerous management
weaknesses at State. In addition, GAO and others have identified
management challenges and operational deficiencies at USAID that affect
the agency’s ability to implement its programs. Ongoing attention to
resource management issues at both State and USAID will be needed to
ensure that the department and the agency take advantage of
opportunities for more efficient operations and achieve budget savings
wherever possible.

My statement today is based on our work at State and USAID over the last
several years. I will focus on our observations regarding State’s
management in the following five areas: (1) unneeded1 real estate; (2)
embassy construction; (3) overseas presence and staffing, including
rightsizing;2 (4) information technology; and (5) strategic planning. I will


1
 We use the term “unneeded” property to encompass the terms “excess, underutilized, and
obsolete” property used by the State Department.
2
 We define rightsizing as aligning the number and location of staff assigned overseas with
foreign policy priorities and security and other constraints.


Page 1                                                                      GAO-03-1009T
              also discuss key areas where USAID has faced challenges, including (1)
              human capital management and workforce planning, (2) program
              evaluation and performance measurement, (3) information technology,
              and (4) financial management. A list of relevant GAO reports is attached
              to the end of my statement (see app. I).


              Overall, our work at the Department of State shows that it has paid more
Summary       attention to managing resources, and this effort is starting to show
              results—including the potential for cost savings and improved operational
              effectiveness and efficiency. For example,

          •   In 1996, GAO was critical of State’s disposal of unneeded facilities. We
              reported that State did not have an effective process for identifying and
              selling unneeded real estate, and that decisions concerning the sale of
              some properties valued at hundreds of millions of dollars had been
              delayed for years. In recent years, State has brought a more businesslike
              approach to managing its overseas real estate portfolio—valued at
              approximately $12 billion—and has accelerated the sale of unneeded
              property and generated revenue that can be used to replace unsafe,
              deteriorating facilities worldwide. In total, between fiscal years 1997
              through 2002, State sold properties for more than $459 million. The
              proceeds from these sales will be used to construct new facilities in
              Germany, Angola, and other locations worldwide. State estimates
              proceeds from additional property sales valued at $300 million between
              fiscal years 2003 through 2008 that could be used for other priorities. If
              State continues to streamline its operations and dispose of additional
              facilities over the next several years, it can potentially avoid having to
              request additional funding from the Congress for other real property
              needs.

          •   In the past, we reported that State’s embassy construction projects took
              longer and cost more than budgeted. Due to delays in State’s construction
              program of the late 1980s, and subsequent funding cutbacks, facilities
              lacked adequate security and remained vulnerable to terrorist attack.
              State has also begun taking a more businesslike approach with its embassy
              construction program, which it expects will cost an additional $17 billion
              beginning in fiscal year 2004. For example, State has instituted reforms,
              such as using standard building designs and “fast-track” contracting, that
              could lower the cost of embassy construction and lessen the chances of
              cost overruns and schedule delays. We reported in January 2003 that cost-
              cutting efforts allowed State to achieve about $150 million in potential cost
              savings during fiscal year 2002. State should continue to promote a
              streamlined approach as it determines requirements for, designs, and


              Page 2                                                         GAO-03-1009T
    constructs new embassies in an effort to find other opportunities to cut
    costs while continuing to provide safe and secure facilities.

•   We have also reported that State and most other foreign affairs agencies
    lacked a systematic process for determining appropriate overseas staffing
    levels. As a result, there was no assurance that personnel stationed
    abroad represented the right number of people with the right skills. Since
    2001, State has directed significant effort to improving the management of
    its overseas presence in an effort to address workforce planning and
    staffing issues. In response to management weaknesses that we have
    previously identified, State has begun addressing rightsizing options and
    staffing shortages at hardship posts. For example, the department has
    indicated that it is pursuing regionalization in Europe, as well as
    opportunities to relocate positions from overseas back to the United
    States, which should result in lower operating costs. State should
    continue to review its workforce planning policies to ensure that the U.S.
    government has the right people in the right places at the right times to
    support U.S. foreign policy goals. Moreover, in determining overseas
    staffing levels, State should adopt industry best practices, such as
    competitive sourcing of administrative and support functions, which could
    result in cost reductions and streamlined services overseas.

•   Previous GAO and State’s Office of Inspector General (OIG) reports cited
    weaknesses in the information technology system, including State’s
    inability to collaborate with other foreign affairs agencies, as significant
    challenges for the department. State officials have recognized deficiencies
    in the department’s management of information technology programs.
    The Secretary of State has made a major commitment to modernizing
    information technology and plans to spend $262 million over fiscal years
    2003 and 2004 on information technology modernization initiatives
    overseas. For example, State is now working to replace its antiquated
    cable system with a new integrated messaging and retrieval system.
    According to State, its information technology is now in the best shape it
    has ever been, including improved Internet access and upgraded computer
    equipment. Due to the level of investment the department is making in
    information technology, continued oversight will be necessary to minimize
    the risks of spending large sums of money on systems that do not produce
    commensurate value.

•   From 1998 through 2000, we found major weaknesses in State’s strategic
    planning processes. The department had not developed overall priorities
    for achieving its strategic goals, and consequently, had no overall basis for
    allocating resources to priorities. Since 2001, State has made
    improvements both at headquarters and overseas that are intended to link


    Page 3                                                          GAO-03-1009T
             staffing and budgetary requirements with policy priorities. State is now
             working to forge a stronger link between resources and performance,
             strategic plans, annual performance plans, and annual performance
             reports. This effort will enable State to show what is being accomplished
             with the money it is spending. Improvements in strategic planning will
             also ensure that State is setting clear objectives, tying resources to these
             objectives, and monitoring its progress in achieving them—all of which are
             key to efficient operations.

             Our work at the U.S. Agency for International Development (USAID)
             indicates that the agency has begun taking corrective actions in areas that,
             over the years, GAO and others have identified as having weak
             management and operational deficiencies. These areas include human
             capital management and workforce planning, program evaluation and
             performance measurement, information technology, and financial
             management. Improved management of these critical systems is essential
             if USAID is to ensure that its foreign assistance objectives are being met
             and its funds and resources are effectively safeguarded. Our recent work
             on USAID’s democracy and rule of law programs also revealed certain
             management weaknesses that, if corrected, would help ensure that these
             programs can be sustained in difficult overseas environments, are better
             coordinated with other U.S. agencies and international donors to
             maximize resources, and achieve their intended results.

             Mr. Chairman, State, USAID, and all government agencies have an
             obligation to ensure that taxpayer resources are managed wisely. The
             programs and activities that I am covering today have benefited and will
             continue to benefit from sound management practices that could result in
             more savings and efficiencies.


             Approximately 4 percent of discretionary spending in the United States’
Background   federal budget is appropriated for the conduct of foreign affairs activities.
             This includes funding for bilateral and multilateral assistance, military
             assistance, and State Department activities. Spending for State, taken
             from the “150 Account,” makes up the largest share of foreign affairs
             spending. Funding for State’s Diplomatic and Consular Programs—State’s
             chief operating account, which supports the department’s diplomatic
             activities and programs, including salaries and benefits—comprises the
             largest portion of its appropriations. Embassy security, construction, and
             maintenance funding comprises another large portion of State’s
             appropriation. Funding for the administration of foreign affairs has risen
             dramatically in recent fiscal years, due, in part, to enhanced funding for


             Page 4                                                          GAO-03-1009T
                      security-related improvements worldwide, including personnel,
                      construction, and equipment following the bombings of two U.S.
                      embassies in 1998 and the events of September 11, 2001. For example,
                      State received about $2.8 billion in fiscal year 1998, but by fiscal year 2003,
                      State’s appropriation was approximately $6 billion. For fiscal year 2004,
                      State is seeking approximately $6.4 billion, which includes $4 billion for
                      diplomatic and consular affairs and $1.5 billion for embassy security,
                      construction, and maintenance. In addition, State plans to spend $262
                      million over fiscal years 2003 and 2004 on information technology
                      modernization initiatives overseas.

                      Humanitarian and economic development assistance is an integral part of
                      U.S. global security strategy, particularly as the United States seeks to
                      diminish the underlying conditions of poverty and corruption that may be
                      linked to instability and terrorism. USAID is charged with overseeing U.S.
                      foreign economic and humanitarian assistance programs. In fiscal year
                      2003, Congress appropriated about $12 billion—including supplemental
                      funding—to USAID, and the agency managed programs in about 160
                      countries, including 71 overseas missions with USAID direct-hire
                      presence. Fiscal year 2004 foreign aid spending is expected to increase
                      due, in part, to substantial increases in HIV/AIDS funding and security-
                      related economic aid.


                      I would like to discuss State’s performance in managing its overseas real
Department of State   estate, overseeing major embassy construction projects, managing its
                      overseas presence and staffing, modernizing its information technology,
                      and developing and implementing strategic plans.


Management of Real    State manages an overseas real property portfolio valued at approximately
Property              $12 billion. The management of real property is an area where State could
                      achieve major cost savings and other operational efficiencies. In the past,
                      we have been critical of State’s management of its overseas property,
                      including its slow disposal of unneeded facilities. Recently, officials at
                      State’s Bureau of Overseas Buildings Operations (OBO), which manages
                      the government’s real property overseas, have taken a more systematic
                      approach to identifying unneeded properties and have significantly
                      increased the sale of these properties. For example, in 2002, OBO
                      completed sales of 26 properties totaling $64 million, with contracts in
                      place for another $40 million in sales. But State needs to dispose of more
                      facilities in the coming years as it embarks on an expensive plan to replace



                      Page 5                                                            GAO-03-1009T
                    embassies and consulates that do not meet State’s security requirements
                    and/or are in poor condition.

Unneeded Property   Unneeded property and deteriorating facilities present a real problem—
                    but also an opportunity to improve U.S. operations abroad and achieve
                    savings. We have reported that the management of overseas real estate has
                    been a continuing challenge for State, although the department has made
                    improvements in recent years. One of the key weaknesses we found was
                    the lack of a systematic process to identify unneeded properties and to
                    dispose of them in a timely manner. In 1996, we identified properties
                    worth hundreds of millions of dollars potentially excess to State’s needs or
                    of questionable value and expensive to maintain that the department had
                    not previously identified for potential sale.3 As a result of State’s inability
                    to resolve internal disputes and sell excess property in an expeditious
                    manner, we recommended that the Secretary of State appoint an
                    independent panel to decide which properties should be sold. The
                    Secretary of State created this panel in 1997. As of April 2002, the Real
                    Property Advisory Board had reviewed 41 disputed properties and
                    recommended that 26 be sold. By that time, State had disposed of seven of
                    these properties for about $21 million.

                    In 2002, we again reviewed State’s processes for identifying and selling
                    unneeded overseas real estate and found that it had taken steps to
                    implement a more systematic approach that included asking posts to
                    annually identify properties for disposal and increasing efforts by OBO
                    and officials from State’s OIG to identify such properties when they visit
                    posts.4 For example, the director of OBO took steps to resolve disputes
                    with posts that have delayed the sale of valuable property. OBO has also
                    instituted monthly Project Performance Reviews to review all aspects of
                    real estate management, such as the status of acquisitions and disposal of
                    overseas property. However, we found that the department’s ability to
                    monitor property use and identify potentially unneeded properties was
                    hampered by errors and omissions in its property inventory. Inaccurate
                    inventory information can result in unneeded properties not being



                    3
                     U.S. General Accounting Office, Overseas Real Estate: Millions of Dollars Could Be
                    Generated by Selling Unneeded Real Estate, GAO/NSIAD-96-36 (Washington, D.C.: Apr. 23,
                    1996).
                    4
                     U.S. General Accounting Office, State Department: Sale of Unneeded Property Has
                    Increased, but Further Improvements Are Necessary, GAO-02-590 (Washington, D.C.: June
                    11, 2002).



                    Page 6                                                                 GAO-03-1009T
                       identified for potential sale. Therefore, we recommended that the
                       department improve the accuracy of its real property inventory. In
                       commenting on our report, OBO said that it had already taken action to
                       improve its data collection. For example, State sent a cable to all overseas
                       posts reminding them of their responsibilities to maintain accurate real
                       estate records.

                       State has significantly improved its performance in selling unneeded
                       property. In total, between fiscal years 1997 through 2002, State sold 129
                       properties for more than $459 million. Funds generated from property
                       sales are being used to help offset embassy construction costs in Berlin,
                       Germany; Luanda, Angola; and elsewhere. State estimates it will sell
                       additional properties between fiscal years 2003 and 2008 valued at
                       approximately $300 million. More recently, State has taken action to sell
                       two properties (a 0.4 acre parking lot and an office building) in Paris
                       identified in a GAO report as potentially unneeded.5 After initially resisting
                       the sale of the parking lot, the department reversed its decision and sold
                       both properties in June 2003 for a total of $63.1 million—a substantial
                       benefit to the government. The parking lot alone was sold conditionally
                       for $20.7 million.6 Although this may be a unique case, it demonstrates
                       how scrutiny of the property inventory could result in potential savings.
                       The department should continue to look closely at property holdings to
                       see if other opportunities exist. If State continues to streamline its
                       operations and dispose of additional facilities over the next several years,
                       it can use those funds to help offset the cost of replacing about 160
                       embassies and consulates for security reasons in the coming years.


Embassy Construction   In the past, State has had difficulties ensuring that major embassy
                       construction projects were completed on time and within budget. For
                       example, in 1991 we reported that State’s previous construction program
                       suffered from delays and cost increases due to, among other things, poor
                       program planning and inadequate contractor performance. In 1998, State
                       embarked on the largest overseas embassy construction program in its
                       history in response to the bombings of U.S. embassies in Africa. From
                       fiscal years 1999 through 2003, State received approximately $2.7 billion


                       5
                        U.S. General Accounting Office, State Department: Decision to Retain Embassy Parking
                       Lot in Paris, France, Should Be Revisited, GAO-01-477 (Washington, D.C.: Apr. 13, 2001).
                       6
                        The parking lot was sold on the condition that the purchasers could obtain within the next
                       2 years the zoning permits necessary to build on the property.



                       Page 7                                                                      GAO-03-1009T
                                      for its new construction program and began replacing 25 of 185 posts
                                      identified as vulnerable by State. To better manage this program, OBO has
                                      undertaken several initiatives aimed at improving State’s stewardship of
                                      its funds for embassy buildings, including cutting costs of planned
                                      construction projects, using standard designs, and reducing construction
                                      duration through a “fast track” process. Moreover, State hopes that
                                      additional management tools aimed at ensuring that new facilities are built
                                      in the most cost-effective manner, including improvements in how
                                      agencies determine requirements for new embassies, will help move the
                                      program forward. State is also pursuing a cost-sharing plan that would
                                      charge other federal agencies for the cost of their overall overseas
                                      presence and provide additional funds to help accelerate the embassy
                                      construction program.

Replacing Vulnerable Facilities       While State has begun replacing many facilities, OBO officials estimated
                                      that beginning in fiscal year 2004, it will cost an additional $17 billion to
                                      replace facilities at remaining posts. As of February 2003, State had begun
                                      replacing 25 of 185 posts identified by State as vulnerable after the 1998
                                      embassy bombings. To avoid the problems that weakened the previous
                                      embassy construction program, we recommended that State develop a
                                      long-term capital construction plan that identifies (1) proposed
                                      construction projects’ cost estimates and schedules and (2) estimated
                                      annual funding requirements for the overall program.7 Although State
                                      initially resisted implementing our recommendation, OBO’s new
                                      leadership reconsidered this recommendation and has since produced two
                                      annual planning documents titled the “Long-Range Overseas Building
                                      Plan.” According to OBO, the long-range plan is the roadmap by which
                                      State, other departments and agencies, the Office of Management and
                                      Budget (OMB), the Congress, and others can focus on defining and
                                      resolving the needs of overseas facilities.

                                      In addition to the long-range plan, OBO has undertaken several initiatives
                                      aimed at improving State’s stewardship of its embassy construction funds.
                                      These measures have the potential to result in significant cost savings and
                                      other efficiencies. For example, OBO has

                                  •   developed Standard Embassy Designs (SED) for use in most embassy
                                      construction projects. SEDs provide OBO with the ability to contract for



                                      7
                                      U.S. General Accounting Office, Embassy Construction: Long-Term Planning Will
                                      Enhance Program Decision-making, GAO-01-11 (Washington, D.C.: Jan. 22, 2001).



                                      Page 8                                                               GAO-03-1009T
                                    shortened design and construction periods and control costs through
                                    standardization;

                                •   shifted from “design-bid-build” contracting toward “design-build”
                                    contracts, which have the potential to reduce project costs and
                                    construction time frames;

                                •   developed and implemented procedures to enforce cost planning during
                                    the design phase and ensure that the final designs are within budget; and

                                •   increased the number of contractors eligible to bid for construction
                                    projects, thereby increasing competition for contracts, which could
                                    potentially result in lower bids.

                                    OBO has set a goal of a 2-year design and construction period for its mid-
                                    sized, standard embassy design buildings, which, if met, could reduce the
                                    amount of time spent in design and construction by almost one year. We
                                    reported in January 2003 that these cost-cutting efforts allowed OBO to
                                    achieve $150 million in potential cost savings during fiscal year 2002.
                                    These savings, according to OBO, resulted from the application of the
                                    SEDs and increased competition for the design and construction of these
                                    projects.

                                    Despite these gains, State will face continuing hurdles throughout the life
                                    of the embassy construction program. These hurdles include meeting
                                    construction schedules within the estimated costs and ensuring that State
                                    has the capacity to manage a large number of projects simultaneously.
                                    Because of the high costs associated with this program and the
                                    importance of providing secure facilities overseas, we believe this program
                                    merits continuous oversight by State, GAO, and the Congress.

Staffing Requirements for New       In addition to ensuring that individual construction projects meet cost and
Embassy Compounds                   performance schedules, State must also ensure that new embassies are
                                    appropriately sized. Given that the size and cost of new facilities are
                                    directly related to agencies’ anticipated staffing needs, it is imperative that
                                    future requirements be predicted as accurately as possible. Embassy
                                    buildings that are designed too small may require additional construction
                                    and funding in the future; buildings that are too large may have unused
                                    space—a waste of government funds. State’s construction program in the
                                    late 1980s encountered lengthy delays and cost overruns in part because it
                                    lacked coordinated planning of post requirements prior to approval and
                                    budgeting for construction projects. As real needs were determined,
                                    changes in scope and increases in costs followed. OBO now requires that


                                    Page 9                                                            GAO-03-1009T
                                all staffing projections for new embassy compounds be finalized prior to
                                submitting funding requests, which are sent to Congress as part of State’s
                                annual budget request each February.

                                In April 2003, we reported that U.S. agencies operating overseas, including
                                State, were developing staffing projections without a systematic
                                approach.8 We found that State’s headquarters gave embassies little
                                guidance on factors to consider when developing projections, and thus
                                U.S. agencies did not take a consistent or systematic approach to
                                determining long-term staffing needs. Based on our recommendations,
                                State in May 2003 issued a “Guide to Developing Staffing Projections for
                                New Embassy and Consulate Compound Construction,” which requires a
                                more serious, disciplined approach to developing staffing projections.
                                When fully implemented, this approach should ensure that overseas
                                staffing projections are more accurate and minimize the financial risks
                                associated with building facilities that are designed for the wrong number
                                of people.

Capital Security Cost Sharing   Historically, State has paid all costs associated with the construction of
                                overseas facilities.9 Following the embassy bombings, the Overseas
                                Presence Advisory Panel (OPAP)10 noted a lack of cost sharing among
                                agencies that use overseas facilities. As a result, OPAP recommended that
                                agencies be required to pay rent in government-owned buildings in foreign
                                countries to cover operating and maintenance costs. In 2001, an
                                interagency group put forth a proposal that would require agencies to pay
                                rent based on the space they occupy in overseas facilities, but the plan was
                                not enacted. In 2002, OMB began an effort to develop a mechanism that
                                would require users of overseas facilities to share the construction costs
                                associated with those facilities. The administration believes that if
                                agencies were required to pay a greater portion of the total costs
                                associated with operating overseas facilities, they would think more


                                8
                                 U.S. General Accounting Office, Embassy Construction: Process for Determining
                                Staffing Requirements Needs Improvement, GAO-03-411 (Washington, D.C.: Apr. 7, 2003).
                                9
                                 Agencies contribute funding to support the International Cooperative Administrative
                                Support Services system, which funds common administrative support functions, such as
                                travel, mail and messenger, vouchering, and telephone services, that all agencies at a post
                                may use.
                                10
                                 Secretary of State Madeline Albright established OPAP following the 1998 embassy
                                bombings in Africa to consider the organization of U.S. embassies and consulates.
                                Department of State, America’s Overseas Presence in the 21st Century, The Report of the
                                Overseas Presence Advisory Panel (Washington, D.C.: Nov. 1999).



                                Page 10                                                                      GAO-03-1009T
                        carefully before posting personnel overseas. As part of this effort, State
                        has presented a capital security cost-sharing plan that would require
                        agencies to help fund its capital construction program. State’s proposal
                        calls for each agency to fund a proportion of the total construction
                        program cost based on its respective proportion of total overseas staffing.
                        OBO has reported that its proposed cost-sharing program could result in
                        additional funds, thereby reducing the duration of the overall program.


Overseas Presence and   State maintains a network of approximately 260 diplomatic posts in about
Staffing                170 countries worldwide and employs a direct-hire workforce of about
                        30,000 employees, about 60 percent of those overseas. The costs of
                        maintaining staff overseas vary by agency but in general are extremely
                        high. In 2002, the average annual cost of placing one full-time direct-hire
                        American family of four in a U.S. embassy was approximately $339,000.11
                        These costs make it critical that the U.S. overseas presence is sized
                        appropriately to conduct its work. We have reported that State and most
                        other federal agencies overseas have historically lacked a systematic
                        process for determining the right number of personnel needed overseas—
                        otherwise known as rightsizing.12 Moreover, in June 2002,13 we reported
                        that State faces serious staffing shortfalls at hardship posts14—in both the
                        number of staff assigned to these posts and their experience, skills, and/or
                        language proficiency. Thus, State has been unable to ensure that it has
                        “the right people in the right place at the right time with the right skills to
                        carry out America’s foreign policy”—its definition of diplomatic
                        readiness.15 However, since 2001, State has directed significant attention
                        to improving weaknesses in the management of its workforce planning



                        11
                         Testimony of Nancy Dorn, deputy director of the Office of Management and Budget,
                        before the House Subcommittee on National Security, Veterans Affairs, and International
                        Relations, House Committee on Government Reform, May 1, 2002.
                        12
                         U.S. General Accounting Office, Overseas Presence: More Work Needed on Embassy
                        Rightsizing, GAO-02-143 (Washington, D.C.: Nov. 27, 2001).
                        13
                         U.S. General Accounting Office, State Department: Staffing Shortfalls and Ineffective
                        Assignment System Compromise Diplomatic Readiness at Hardship Posts, GAO-02-626
                        (Washington, D.C.: June 18, 2002).
                        14
                          Hardship posts are locations where the U.S. government offers additional pay incentives
                        to compensate Foreign Service employees for adverse living and environmental conditions,
                        such as poor schools, inadequate medical facilities, high levels of crime, and severe
                        climates.
                        15
                         GAO-02-626.



                        Page 11                                                                   GAO-03-1009T
                    and staffing issues that we and others have noted.16 Because personnel
                    salaries and benefits consume a huge portion of State’s operating budget,
                    it is important that the department exercise good stewardship of its human
                    capital resources.

Overseas Staffing   Around the time GAO designated strategic human capital management as a
                    governmentwide high-risk area in 2001, State, as part of its Diplomatic
                    Readiness Initiative (DRI), began directing significant attention to
                    addressing its human capital needs, adding 1,158 employees over a 3-year
                    period (fiscal years 2002 through 2004). In fiscal year 2002, Congress
                    allocated nearly $107 million for the DRI. State requested nearly $100
                    million annually in fiscal years 2003 and 2004 to hire approximately 400
                    new staff each year.

                    The DRI has enabled the department to boost recruitment. However, State
                    has historically lacked a systematic approach to determine the appropriate
                    size and location of its overseas staff. To move the rightsizing process
                    forward, the August 2001 President’s Management Agenda identified it as
                    one of the administration’s priorities. Given the high costs of maintaining
                    the U.S. overseas presence, the administration has instructed U.S. agencies
                    to reconfigure the number of overseas staff to the minimum necessary to
                    meet U.S. foreign policy goals. This OMB-led initiative aims to develop
                    cost-saving tools or models, such as increasing the use of regional centers,
                    revising the Mission Performance Planning (MPP) process,17 increasing
                    overseas administrative efficiency, and relocating functions to the United
                    States.18 According to the OPAP, although the magnitude of savings from
                    rightsizing the overseas presence cannot be known in advance, “significant
                    savings” are achievable. For example, it said that reducing all agencies’
                    staffing by 10 percent could yield governmentwide savings of almost $380
                    million a year.19




                    16
                     U.S. General Accounting Office, Performance and Accountability Series, Major
                    Management Challenges and Program Risks, Department of State, GAO-03-107
                    (Washington, D.C.: Jan. 2003).
                    17
                     MPPs are annual plans that describe the performance goals and objectives for a given
                    embassy.
                    18
                     Office of Management and Budget, The President’s Management Agenda, Fiscal Year
                    2002 (Washington, D.C.: Aug. 2001).
                    19
                     U.S. Department of State, America’s Overseas Presence in the 21st Century, The Report
                    of the Overseas Presence Advisory Panel (Washington, D.C.: Nov. 1999).



                    Page 12                                                                   GAO-03-1009T
GAO’s Rightsizing Framework

In May 2002, we testified on our development of a rightsizing framework.20
The framework is a series of questions linking staffing levels to three
critical elements of overseas diplomatic operations: security of facilities,
mission priorities and requirements, and cost of operations. It also
addresses consideration of rightsizing options, such as relocating
functions back to the United States or to regional centers, competitively
sourcing functions, and streamlining operations. Rightsizing analyses
could lead decision makers to increase, decrease, or change the mix of
staff at a given post. For example, based on our work at the U.S. embassy
in Paris, we identified positions that could potentially be relocated to
regional centers or back to the United States. On the other hand,
rightsizing analyses may indicate the need for increased staffing,
particularly at hardship posts. In a follow-up report to our testimony,21 we
recommended that the director of OMB ensure that our framework is used
as a basis for assessing staffing levels in the administration’s rightsizing
initiative.22

In commenting on our rightsizing reports, State endorsed our framework
and said it plans to incorporate elements of our rightsizing questions into
its future planning processes, including its MPPs. State also has begun to
take further actions in managing its overseas presence—along the lines
that we recommended in our June 2002 report on hardship posts—
including revising its assignment system to improve staffing of hardship
posts and addressing language shortfalls by providing more opportunities
for language training. 23 In addition, State has already taken some




20
 U.S. General Accounting Office, Overseas Presence: Observations on a Rightsizing
Framework, GAO-02-659T (Washington, D.C.: May 1, 2002).
21
 U.S. General Accounting Office, Overseas Presence: Framework for Assessing Embassy
Staff Levels Can Support Rightsizing Initiatives, GAO-02-780 (Washington, D.C.: July
2002).
22
 GAO subsequently applied the framework to developing countries and found that it was
applicable. See U.S. General Accounting Office, Overseas Presence: Rightsizing
Framework Can Be Applied at U.S. Diplomatic Posts in Developing Countries,
GAO-03-396 (Washington, D.C.: Apr. 2003).
23
 GAO-03-107.



Page 13                                                                 GAO-03-1009T
    rightsizing actions to improve the cost effectiveness of its overseas
    operating practices. 24 For example, State

•   plans to spend at least $80 million to purchase and renovate a 23-acre,
    multi-building facility in Frankfurt, Germany—slated to open in mid-
    2005—for use as a regional hub to conduct and support diplomatic
    operations;25

•   has relocated more than 100 positions from the Paris embassy to the
    regional Financial Services Center in Charleston, South Carolina; and

•   is working with OMB on a cost-sharing mechanism, as previously
    mentioned, that will give all U.S. agencies an incentive to weigh the high
    costs to taxpayers associated with assigning staff overseas.

    In addition to these rightsizing actions, there are other areas where the
    adoption of industry best practices could lead to cost reductions and
    streamlined services.26 For example, in 1997, we reported that State could
    significantly streamline its employee transfer and housing relocation
    processes. We also reported in 1998 that State’s overseas posts could
    potentially save millions of dollars by implementing best practices such as
    competitive sourcing.

    In light of competing priorities as new needs emerge, particularly in Iraq
    and Afghanistan, State must be prepared to make difficult strategic
    decisions on which posts and positions it will fill and which positions it
    could remove, relocate, or regionalize. State will need to marshal and
    manage its human capital to facilitate the most efficient, effective
    allocation of these significant resources.


    24
      We will report further on State’s recruitment of new Foreign Service officers in a report
    for the House Government Reform Committee’s Subcommittee on National Security,
    Emerging Threats, and International Relations that we expect to issue this fall.
    25
      This facility, called Creekbed, will be the largest U.S. diplomatic facility overseas. In July
    2002, Creekbed was officially transferred from the German government to the State
    Department for $30.3 million. The design and renovation cost for the facility is estimated as
    $49.8 million, bringing total projected costs to $80.1 million. See U.S. General Accounting
    Office, Overseas Presence: Rightsizing Is Key to Considering Relocation of Regional Staff
    to New Frankfurt Center, GAO-03-1061 (Washington, D.C.: Sept. 2, 2003).
    26
     U.S. General Accounting Office, State Department: Using Best Practices to Relocate
    Employees Could Reduce Costs and Improve Service, GAO/NSIAD-98-19 (Washington,
    D.C.: Oct. 17, 1997); and State Department: Options for Reducing Overseas Housing and
    Furniture Costs, GAO/NSIAD-98-128 (Washington, D.C.: July 31, 1998).



    Page 14                                                                        GAO-03-1009T
Information Technology   Up-to-date information technology, along with adequate and modern office
                         facilities, is an important part of diplomatic readiness. We have reported
                         that State has long been plagued by poor information technology at its
                         overseas posts, as well as weaknesses in its ability to manage information
                         technology modernization programs.27 State’s information technology
                         capabilities provide the foundation of support for U.S. government
                         operations around the world, yet many overseas posts have been equipped
                         with obsolete information technology systems that prevented effective
                         interagency information sharing.

                         The Secretary of State has made a major commitment to modernizing the
                         department’s information technology. In March 2003, we testified that the
                         department invested $236 million in fiscal year 2002 on key modernization
                         initiatives for overseas posts and plans to spend $262 million over fiscal
                         years 2003 and 2004.28 State reports that its information technology is now
                         in the best shape it has ever been, including improved Internet access and
                         upgraded computer equipment. The department is now working to
                         replace its antiquated cable system with a new integrated messaging and
                         retrieval system, which it acknowledges is an ambitious effort.

                         State’s OIG and GAO have raised a number of concerns regarding the
                         department’s management of information technology programs. For
                         example, in 2001,29 we reported that State was not following proven system
                         acquisition and investment practices in attempting to deploy a common
                         overseas knowledge management system. This system was intended to
                         provide functionality ranging from basic Internet access and e-mail to
                         mission-critical policy formulation and crisis management support. We
                         recommended that State limit its investment in this system until it had
                         secured stakeholder involvement and buy-in. State has since discontinued
                         the project due to a lack of interagency buy-in and commitment, thereby
                         avoiding additional costs of more than $200 million.




                         27
                          U.S. General Accounting Office, Information Technology: State Department-Led
                         Overseas Modernization Program Faces Management Challenges, GAO-02-41
                         (Washington, D.C.: Nov. 16, 2001), and Foreign Affairs: Effort to Upgrade Information
                         Technology Overseas Faces Formidable Challenges, GAO-T-AIMD/NSIAD-00-214
                         (Washington, D.C.: June 22, 2000).
                         28
                          U.S. General Accounting Office, Overseas Presence: Conditions of Overseas Diplomatic
                         Facilities, GAO-03-557T (Washington, D.C.: Mar. 20, 2003).
                         29
                          GAO-02-41 and GAO-T-AIMD/NSIAD-00-214.



                         Page 15                                                                   GAO-03-1009T
                     Recognizing that interagency information sharing and collaboration can
                     pay off in terms of greater efficiency and effectiveness of overseas
                     operations, State’s OIG reported that the department recently decided to
                     merge some of the objectives associated with the interagency knowledge
                     management system into its new messaging system. We believe that the
                     department should try to eliminate the barriers that prevented
                     implementation of this system. As State continues to modernize
                     information technology at overseas posts, it is important that the
                     department employ rigorous and disciplined management processes on
                     each of its projects to minimize the risks that the department will spend
                     large sums of money on systems that do not produce commensurate value.


Strategic Planning   Linking performance and financial information is a key feature of sound
                     management—reinforcing the connection between resources consumed
                     and results achieved—and an important element in giving the public a
                     useful and informative perspective on federal spending. A well-defined
                     mission and clear, well understood strategic goals are essential in helping
                     agencies make intelligent trade-offs among short- and long-term priorities
                     and ensure that program and resource commitments are sustainable. In
                     recent years, State has made improvements to its strategic planning
                     process both at headquarters and overseas that are intended to link
                     staffing and budgetary requirements with policy priorities. For instance,
                     State has developed a new strategic plan for fiscal years 2004 through
                     2009, which, unlike previous strategic plans, was developed in conjunction
                     with USAID and aligns diplomatic and development efforts. At the field
                     level, State revised the MPP process so that posts are now required to
                     identify key goals for a given fiscal year, and link staffing and budgetary
                     requirements to fulfilling these priorities.

                     State’s compliance with the Government Performance and Results Act of
                     1993 (GPRA),30 which requires federal agencies to prepare annual
                     performance plans covering the program activities set out in their budgets,




                     30
                      P.L. 103-62, 107 Stat. 285, as amended.


                     Page 16                                                       GAO-03-1009T
                  has been mixed.31 While State’s performance plans fell short of GPRA
                  requirements from 1998 through 2000, the department has recently made
                  strides in its planning and reporting processes. For example, in its
                  performance plan for 2002, State took a major step toward implementing
                  GPRA requirements, and it has continued to make improvements in its
                  subsequent plans.32

                  As we have previously reported,33 although connections between specific
                  performance and funding levels can be difficult to make, efforts to infuse
                  performance information into budget deliberations have the potential to
                  change the terms of debate from simple outputs to outcomes. Continued
                  improvements to strategic and performance planning will ensure that State
                  is setting clear objectives, tying resources to these objectives, and
                  monitoring its progress in achieving them—all of which are essential to
                  efficient operations.


                  Now I would like to discuss some of the challenges USAID faces in
U.S. Agency for   managing its human capital, evaluating its programs and measuring their
International     performance, and managing its information technology and financial
                  systems. I will also outline GAO’s findings from our reviews of USAID’s
Development       democracy and rule of law programs in Latin America and the former
                  Soviet Union.


Human Capital     Since the early 1990s, we have reported that USAID has made limited
Management        progress in addressing its human capital management issues and managing
                  the changes in its overseas workforce. A major concern is that USAID has



                  31
                   See U.S. General Accounting Office, The Results Act: Observations on the Department of
                  State’s Fiscal Year 1999 Annual Performance Plan, GAO/NSIAD-98-210R (Washington,
                  D.C.: June 17, 1998); Observations on the Department of State’s Fiscal Year 2000
                  Performance Plan, GAO/NSIAD-99-183R (Washington, D.C.: July 20, 1999); Major
                  Management Challenges and Program Risks: Implementation Status of Open
                  Recommendations, GAO/OCG-99-28 (Washington, D.C.: July 30, 1999); Observations on the
                  Department of State’s Fiscal Year 1999 Performance Report and Fiscal Year 2001
                  Performance Plan, GAO/NSIAD-00-189R (Washington, D.C.: June 30, 2000); and
                  Department of State: Status of Achieving Key Outcomes and Addressing Major
                  Management Challenges, GAO-02-42 (Washington, D.C.: Dec. 7, 2001).
                  32
                   GAO-02-42.
                  33
                   U.S. General Accounting Office, Results-Oriented Budget Practices in Federal Agencies,
                  GAO-01-1084SP (Washington, D.C.: Aug. 2001).



                  Page 17                                                                  GAO-03-1009T
                          not established a comprehensive workforce plan that is integrated with
                          the agency’s strategic objectives and ensures that the agency has skills and
                          competencies necessary to meet its emerging foreign assistance
                          challenges. Developing such a plan is critical due to a reduction in the
                          agency’s workforce during the 1990s and continuing attrition—more than
                          half of the agency’s foreign service officers are eligible to retire by 2007.
                          According to USAID’s OIG, the steady decline in the number of foreign
                          service and civil service employees with specialized technical expertise
                          has resulted in insufficient staff with needed skills and experience and less
                          experienced personnel managing increasingly complex programs.34
                          Meanwhile, USAID’s program budget has increased from $7.3 billion in
                          2001 to about $12 billion in fiscal year 2003, due primarily to significant
                          increases in HIV/AIDS funding and supplemental funding for emerging
                          programs in Iraq and Afghanistan. The combination of continued attrition
                          of experienced foreign service officers, increased program funding, and
                          emerging foreign policy priorities raises concerns regarding USAID’s
                          ability to maintain effective oversight of its foreign assistance programs.

                          USAID’s lack of progress in institutionalizing a workforce planning system
                          has led to certain vulnerabilities. For example, as we reported in July
                          2002, USAID lacks a “surge capacity” that enables it to quickly hire the
                          staff needed to respond to emerging demands and post-conflict or post-
                          emergency reconstruction situations.35 We also reported that insufficient
                          numbers of contract officers affected the agency’s ability to deliver
                          hurricane reconstruction assistance in Latin America in the program’s
                          early phases.

                          USAID is aware of its human capital management and workforce planning
                          shortcomings and is now beginning to address some of them with targeted
                          hiring and other actions.


Program Evaluation and    USAID continues to face difficulties in identifying and collecting the data it
Performance Measurement   needs to develop reliable performance measures and accurately report the
                          results of its programs. Our work and that of USAID’s OIG have identified



                          34
                            USAID Office of the Inspector General, Semiannual Report to Congress (Washington,
                          D.C.: Oct. 31, 2001).
                          35
                           U.S. General Accounting Office, Foreign Assistance: Disaster Recovery Program
                          Addressed Intended Purposes, but USAID Needs Greater Flexibility to Improve Its
                          Response Capability, GAO-02-787 (Washington, D.C.: July 24, 2002).



                          Page 18                                                                 GAO-03-1009T
                           a number of problems with the annual results data that USAID’s operating
                           units have been reporting. USAID has acknowledged these concerns and
                           has undertaken several initiatives to correct them. Although the agency
                           has made a serious effort to develop improved performance measures, it
                           continues to report numerical outputs that do not gauge the impact of its
                           programs.

                           Without accurate and reliable performance data, USAID has little
                           assurance that its programs achieve their objectives and related targets. In
                           July 1999, we commented on USAID’s fiscal year 2000 performance plan
                           and noted that because the agency depends on international organizations
                           and thousands of partner institutions for data, it does not have full control
                           over how data are collected, reported, or verified. In April 2002, we
                           reported that USAID had evaluated few of its experiences in using various
                           funding mechanisms and different types of organizations to achieve its
                           objectives.36 We concluded that with better data on these aspects of the
                           agency’s operations, USAID managers and congressional overseers would
                           be better equipped to analyze whether the agency’s mix of approaches
                           takes full advantage of nongovernmental organizations to achieve the
                           agency’s purposes.


Information Technology     USAID’s information systems do not provide managers with the accurate
and Financial Management   information they need to make sound and cost-effective decisions.
                           USAID’s OIG has reported that the agency’s processes for procuring
                           information technology have not followed established guidelines, which
                           require executive agencies to implement a process that maximizes the
                           value and assesses the risks of information technology investments. In
                           addition, USAID’s computer systems are vulnerable and need better
                           security controls. USAID management has acknowledged these
                           weaknesses and the agency is making efforts to correct them.

                           Effective financial systems and controls are necessary to ensure that
                           USAID management has timely and reliable information to make effective,
                           informed decisions and that assets are safeguarded. USAID has made
                           progress in correcting some of its systems and internal control
                           deficiencies and is in the process of revising its plan to remedy financial



                           36
                            U.S. General Accounting Office, Foreign Assistance: USAID Relies Heavily on
                           Nongovernmental Organizations, but Better Data Needed to Evaluate Approaches,
                           GAO-02-471 (Washington, D.C.: Apr. 25, 2002).



                           Page 19                                                              GAO-03-1009T
                        management weaknesses as required by the Federal Financial
                        Management Improvement Act of 1996.37 To obtain its goal, however,
                        USAID needs to continue efforts to resolve its internal control weaknesses
                        and ensure that planned upgrades to its financial systems are in
                        compliance with federal financial system requirements.


Democracy and Rule of   Our reviews of democracy and rule of law programs in Latin America and
Law Programs            the former Soviet Union38 demonstrate that these programs have had
                        limited results and suggest areas for improving the efficiency and impact
                        of these efforts.39

                        In Latin America, we found that U.S. assistance has helped bring about
                        important criminal justice reforms in five countries. This assistance has
                        also help improve transparency and accountability of some government
                        functions, increase attention to human rights, and support elections that
                        observation groups have considered free and fair. In several countries of
                        the former Soviet Union, U.S. agencies have helped support a variety of
                        legal system reforms and introduced some innovative legal concepts and
                        practices in the areas of legislative and judicial reform, legal education,
                        law enforcement, and civil society. In both regions, however,
                        sustainability of these programs is questionable. Establishing democracy
                        and rule of law in these countries is a complex undertaking that requires
                        long-term host government commitment and consensus to succeed.
                        However, host governments have not always provided the political
                        support and financial and human capital needed to sustain these reforms.
                        In other cases, U.S.-supported programs were limited, and countries did
                        not adopt the reforms and programs on a national scale.

                        In both of our reviews, we found that several management issues shared
                        by USAID and the other agencies have affected implementation of these
                        programs. Poor coordination among the key U.S. agencies has been a
                        long-standing management problem, and cooperation with other foreign



                        37
                         31 U.S.C. 3512 note.
                        38
                         USAID is not the only U.S. actor promoting democratic institutions overseas; the
                        Departments of Justice, State, and the Treasury also play significant roles.
                        39
                         U.S. General Accounting Office, Foreign Assistance: U.S. Democracy Programs in Six
                        Latin American Countries Have Yielded Modest Results, GAO-03-358 (Washington, D.C.:
                        Mar. 18, 2003); and Former Soviet Union: U.S. Rule of Law Assistance Has Had Limited
                        Impact, GAO-01-354 (Washington, D.C.: Apr. 17, 2001).



                        Page 20                                                                    GAO-03-1009T
                  donors has been limited. U.S. agencies’ strategic plans do not outline how
                  these agencies will overcome coordination problems and cooperate with
                  other foreign donors on program planning and implementation to
                  maximize scarce resources. Also, U.S. agencies, including USAID, have
                  not consistently evaluated program results and have tended to stress
                  output measures, such as the numbers of people trained, over indicators
                  that measure program outcomes and results, such as reforming law
                  enforcement practices. Further, U.S. agencies have not consistently
                  shared lessons learned from completed projects, thus missing
                  opportunities to enhance the outcomes of their programs.

                  Mr. Chairman, this completes my prepared statement. I would be happy to
                  respond to any questions you or other members of the committee may
                  have at this time.


                  For future contacts regarding this testimony, please call Jess Ford or John
Contacts and      Brummet at (202) 512-4128. Individuals making key contributions to this
Acknowledgments   testimony include Heather Barker, David Bernet, Janey Cohen, Diana
                  Glod, Kathryn Hartsburg, Edward Kennedy, Joy Labez, Jessica Lundberg,
                  and Audrey Solis.




                  Page 21                                                       GAO-03-1009T
Appendix I: GAO Reports on Resource
Management


Department of State
Overseas Security,         Overseas Presence: Conditions of Overseas Diplomatic Facilities. GAO-
Presence, and Facilities   03-557T. Washington, D.C.: March 20, 2003.

                           Overseas Presence: Rightsizing Framework Can Be Applied at U.S.
                           Diplomatic Posts in Developing Countries. GAO-03-396. Washington,
                           D.C.: April 7, 2003.

                           Embassy Construction: Process for Determining Staffing Requirements
                           Needs Improvement. GAO-03-411. Washington, D.C.: April 7, 2003.

                           Overseas Presence: Framework for Assessing Embassy Staff Levels Can
                           Support Rightsizing Initiatives. GAO-02-780. Washington, D.C.: July 26,
                           2002.

                           State Department: Sale of Unneeded Property Has Increased, but Further
                           Improvements Are Necessary. GAO-02-590. Washington, D.C.: June 11,
                           2002.

                           Embassy Construction: Long-Term Planning Will Enhance Program
                           Decision-making. GAO-01-11. Washington, D.C.: January 22, 2001.

                           State Department: Decision to Retain Embassy Parking Lot in Paris,
                           France, Should Be Revisited. GAO-01-477. Washington, D.C.: April 13,
                           2001.


Staffing and Workforce     State Department: Staffing Shortfalls and Ineffective Assignment System
Planning                   Compromise Diplomatic Readiness at Hardship Posts. GAO-02-626.
                           Washington, D.C.: June 18, 2002.

                           Foreign Languages: Human Capital Approach Needed to Correct
                           Staffing and Proficiency Shortfalls. GAO-02-375. Washington, D.C.:
                           January 31, 2002.


Information Management     Information Technology: State Department-Led Overseas Modernization
                           Program Faces Management Challenges. GAO-02-41. Washington, D.C.:
                           November 16, 2001.




                           Page 22                                                     GAO-03-1009T
                            Foreign Affairs: Effort to Upgrade Information Technology Overseas
                            Faces Formidable Challenges. GAO-T-AIMD/NSIAD-00-214. Washington,
                            D.C.: June 22, 2000.

                            Electronic Signature: Sanction of the Department of State’s System.
                            GAO/AIMD-00-227R. Washington, D.C.: July 10, 2000.


Strategic and Performance   Major Management Challenges and Program Risks: Department of State.
Planning and Foreign        GAO-03-107. Washington, D.C.: January 2003.
Affairs Management
                            Department of State: Status of Achieving Key Outcomes and Addressing
                            Major Management Challenges. GAO-02-42. Washington, D.C.: December
                            7, 2001.

                            Observations on the Department of State’s Fiscal Year 1999 Performance
                            Report and Fiscal Year 2001 Performance Plan. GAO/NSIAD-00-189R.
                            Washington, D.C.: June 30, 2000.

                            Major Management Challenges and Program Risks: Department of State.
                            GAO-01-252. Washington, D.C.: January 2001.

                            U.S. Agency for International Development: Status of Achieving Key
                            Outcomes and Addressing Major Management Challenges. GAO-01-721.
                            Washington, D.C.: August 17, 2001.

                            Observations on the Department of State’s Fiscal Year 2000 Performance
                            Plan. GAO/NSIAD-99-183R. Washington, D.C.: July 20, 1999.

                            Major Management Challenges and Program Risks: Implementation
                            Status of Open Recommendations. GAO/OCG-99-28. Washington, D.C.:
                            July 30, 1999.

                            The Results Act: Observations on the Department of State’s Fiscal Year
                            1999 Annual Performance Plan. GAO/NSIAD-98-210R. Washington, D.C.:
                            June 17, 1998.


U.S. Agency for             Major Management Challenges and Program Risks: U.S. Agency for
International Development   International Development. GAO-03-111. Washington, D.C.: January 2003.




                            Page 23                                                     GAO-03-1009T
           Foreign Assistance: Disaster Recovery Program Addressed Intended
           Purposes, but USAID Needs Greater Flexibility to Improve Its Response
           Capability. GAO-02-787. Washington, D.C.: July 24, 2002.

           Foreign Assistance: USAID Relies Heavily on Nongovernmental
           Organizations, but Better Data Needed to Evaluate Approaches. GAO-02-
           471. Washington, D.C.: April 25, 2002.

           Major Management Challenges and Program Risks: U.S. Agency for
           International Development. GAO-01-256. Washington, D.C.: January 2001.




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           Page 24                                                    GAO-03-1009T
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