oversight

Overseas Rightsizing: State Has Improved the Consistency of Its Approach, but Does Not Follow Up on Its Recommendations

Published by the Government Accountability Office on 2012-07-25.

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

             United States Government Accountability Office

GAO          Report to the Committee on Foreign
             Relations, U.S. Senate



July 2012
             OVERSEAS
             RIGHTSIZING
             State Has Improved
             the Consistency of Its
             Approach, but Does
             Not Follow Up on Its
             Recommendations




GAO-12-799
                                                 July 2012

                                                 OVERSEAS RIGHTSIZING
                                                 State Has Improved the Consistency of Its Approach,
                                                 but Does Not Follow Up on Its Recommendations
Highlights of GAO-12-799, a report to the
Committee on Foreign Relations, U.S. Senate




Why GAO Did This Study                           What GAO Found
After the 1998 bombings of two U.S.              The Department of State (State) has improved the consistency of its rightsizing
embassies, a U.S. government panel               approach across overseas posts. However, differences between future staffing levels
determined that staffing levels had not          it projects are appropriate to meet mission needs and actual staffing levels still exist
been adjusted to reflect changing                due to unanticipated events and other factors. GAO reported in 2006 that State’s
missions, requirements, and security             Office of Management Policy, Rightsizing and Innovation (M/PRI) had not been
concerns. In 2004, Congress                      conducting its rightsizing reviews consistently. Some reviews discussed various
mandated the establishment of the                rightsizing elements, such as outsourcing, while others did not. State has since
Office of Rightsizing within the                 improved the consistency of its reviews by developing a variety of methodological
Department of State. The office                  tools and a standard template which it applies to each post. GAO found that over half
reviews levels of overseas staffing for          of the 144 rightsizing projections analyzed were within 10 percent of actual staffing
all U.S. government agencies at every            levels as of December 2011. In contrast, over 40 percent of the posts have staffing
post every 5 years, projects future              level differences of over 10 percent. Unanticipated events and other factors, such as
staffing levels it determines are                changes in policies, contributed to these differences. For example, according to the
appropriate to meet mission needs,               management officer in Mozambique, M/PRI projected staffing increases as a result of
and recommends ways to improve                   the President’s program to combat AIDS, but the actual funding level for the program
efficiency. Rightsizing is intended to           was much higher than anticipated. This resulted in higher actual staffing levels for
align the number and location of staff           both U.S. direct-hire and locally-employed staff positions.
with foreign policy priorities, security,
                                                 Rightsizing reviews contain recommendations to improve post operations and
and other constraints.
                                                 eliminate duplicative services and positions. To develop its recommendations, M/PRI
GAO examined (1) the consistency of              reviews the levels of all staff at posts and seeks input from State and non-State
State’s approach to conducting                   agencies. M/PRI relies on non-State agencies to determine independently their own
rightsizing reviews and how its                  staffing needs. Many of State’s recommendations for a specific post focus on the
projections compare to actual staffing           level of State’s administrative or management staff, rather than State’s programmatic
levels; (2) the focus of State’s                 staff or staff from other agencies. Some State officials stated that the activities of
rightsizing recommendations; and                 administrative and management staff are better suited to quantitative measurement
(3) the extent to which State uses its           while the qualitative nature of programmatic staff activities, such as discussing policy
rightsizing reviews and monitors                 issues with foreign diplomatic counterparts, is more difficult to measure.
implementation of recommendations.
                                                 State’s use of rightsizing reviews varies, and State does not follow up on review
GAO reviewed 181 rightsizing reviews,
                                                 recommendations. State’s Bureau of Overseas Buildings Operations uses the staffing
compared projections in reviews with
                                                 projections in rightsizing reviews to plan the size of new embassy compounds.
current actual staffing data, and
                                                 Further, M/PRI uses rightsizing reviews when it assesses requests by State or other
interviewed officials from State and
                                                 agencies to add staff to overseas posts, although the final decision is made by the
other agencies in Washington, D.C.,
                                                 respective Chief of Mission. In addition, Bureau of Diplomatic Security officials said
and at overseas posts.
                                                 that they incorporate rightsizing reviews into their annual staffing planning exercise,
What GAO Recommends                              and some post officials said that they refer to rightsizing reviews to support staffing
                                                 changes. Some U.S. officials stated that undertaking the rightsizing process acts as a
GAO recommends that the Secretary                check on growth in overseas staffing levels. However, some State regional bureau
of State designate the appropriate               officials said that they do not actively use the reviews except as a historical overview
entities to ensure that rightsizing              of staffing, and some post officials said that they do not use the reviews at all. State
recommendations are addressed and                often uses documents other than rightsizing reviews for decisions in areas including
to track and report the actions taken to         staffing levels. Finally, State does not monitor the implementation of rightsizing
implement the recommendations. State             review recommendations and has not designated an office with responsibility for their
described a number of actions it                 implementation. State issues an annual report to Congress in which it lists the
intends to take that could address               rightsizing reviews it has completed, number of positions recommended for
GAO’s recommendations.                           elimination, and potential cost savings; the report does not address whether
                                                 recommendations have been implemented. Because State does not track or report
View GAO-12-799. For more information,           on the implementation of recommendations, State cannot determine if rightsizing
contact Michael J. Courts at (202) 512-8980 or   reviews are achieving their purpose of aligning overseas staffing levels with U.S.
courtsm@gao.gov.
                                                 priorities.
                                                                                            United States Government Accountability Office
Contents


Letter                                                                                     1
               Background                                                                  3
               State Has Improved the Consistency of Its Approach, but
                 Unanticipated Events and Other Factors Contribute to
                 Differences between Actual and Projected Staff Levels                     6
               Rightsizing Recommendations Focus on State Administrative and
                 Management Staff, and State Relies on Non-State Agencies to
                 Determine Their Own Staffing Needs                                      15
               State Offices Vary in Their Use of Rightsizing Reviews, and State
                 Does Not Monitor Implementation of Rightsizing
                 Recommendations                                                         19
               Conclusions                                                               25
               Recommendations for Executive Action                                      26
               Agency Comments and Our Evaluation                                        26

Appendix I     Scope and Methodology                                                     28



Appendix II    Comments from the Department of State                                     32



Appendix III   GAO Contacts and Staff Acknowledgments                                    36



Tables
               Table 1: Summary of Required Elements of Rightsizing Reviews                8
               Table 2: Countries with the Largest Differences between December
                        2011 Staffing Levels and Rightsizing Review Projections          13


Figure
               Figure 1: Percentage of Rightsizing Reviews with December 2011
                        Staffing Levels Over and Under Rightsizing Projections           11




               Page i                                         GAO-12-799 Overseas Rightsizing
Abbreviations

DOD               Department of Defense
ICASS             International Cooperative Administrative Support Services
M/PRI             Office of Management Policy, Rightsizing and Innovation
MSRP              Mission Strategic Resource Plan
NSDD-38           National Security Decision Directive 38
OBO               Bureau of Overseas Buildings Operations
OIG               Office of Inspector General
PEPFAR            President’s Emergency Plan for AIDS Relief
State             Department of State
USAID             U.S. Agency for International Development



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Page ii                                                  GAO-12-799 Overseas Rightsizing
United States Government Accountability Office
Washington, DC 20548




                                   July 25, 2012

                                   The Honorable John F. Kerry
                                   Chairman
                                   The Honorable Richard G. Lugar
                                   Ranking Member
                                   Committee on Foreign Relations
                                   United States Senate

                                   After the 1998 terrorist bombings of U.S. embassies in Dar es Salaam,
                                   Tanzania, and Nairobi, Kenya, a U.S. government panel convened to
                                   conduct an assessment of overseas presence determined that the
                                   staffing levels at embassies and consulates worldwide had not been
                                   adjusted to reflect changing missions, requirements, and security
                                   concerns. In 2004, Congress mandated the establishment of the Office of
                                   Rightsizing within the Department of State (State). 1 This office, now part
                                   of the Office of Management Policy, Rightsizing and Innovation (M/PRI),
                                   reviews staffing levels for all U.S. government agencies at every overseas
                                   mission 2 once every 5 years and before undertaking all capital
                                   construction projects. The office also projects future staffing levels that it
                                   determines are appropriate to meet the missions’ needs and recommends
                                   ways to improve efficiency. Since 2002, we have conducted several
                                   reviews related to U.S. government staffing overseas. 3 In these reviews,
                                   we examined the rightsizing process and issues related to the
                                   construction of new facilities overseas, among other things. In 2006, we
                                   found that the information presented within rightsizing reviews varied from



                                   1
                                       Pub. L. No. 108-199, Div. B, Title IV; 118 Stat. 80.
                                   2
                                    U.S. overseas missions can encompass multiple locations, or posts, within a country. For
                                   example, the U.S. mission to Germany comprises six posts, including an embassy in
                                   Berlin, and consulates in Dusseldorf, Frankfurt, Hamburg, Leipzig, and Munich.
                                   3
                                    See GAO, Overseas Presence: Framework for Assessing Embassy Staff Levels Can
                                   Support Rightsizing Initiatives, GAO-02-780 (Washington, D.C.: Jul. 26, 2002); GAO,
                                   Embassy Construction: Process for Determining Staffing Requirements Needs
                                   Improvement, GAO-03-411 (Washington, D.C.: Apr. 7, 2003); GAO, Overseas Staffing:
                                   Rightsizing Approaches Slowly Taking Hold but More Action Needed to Coordinate and
                                   Carry Out Efforts, GAO-06-737 (Washington, D.C.: Jun. 30, 2006); and GAO, New
                                   Embassy Compounds: State Faces Challenges in Sizing Facilities and Providing for
                                   Operations and Maintenance Requirements, GAO-10-689 (Washington, D.C.: Jul. 20,
                                   2010).




                                   Page 1                                                     GAO-12-799 Overseas Rightsizing
post to post, and the rightsizing elements that the posts evaluated and
reported were not consistent.

In response to your request, we examined (1) the consistency of State’s
approach to conducting rightsizing reviews and how its projections
compare to actual staffing levels; (2) the focus of State’s rightsizing
recommendations; and (3) the extent to which State uses its rightsizing
reviews and monitors implementation of recommendations.

To address these objectives, we reviewed rightsizing guidance, related
legislation, 181 rightsizing reviews State undertook from 2005 through
2011, and previous GAO reports related to U.S. government staffing
levels overseas. We reviewed 14 rightsizing reviews in greater depth, to
obtain additional information about the rightsizing process, the differences
between projected and actual staffing levels, and post officials’ use of the
reviews. We conducted site visits at 3 of the posts: Prague, the Czech
Republic; Sarajevo, Bosnia-Herzegovina; and Kuwait City, Kuwait. We
communicated via teleconference and other means with the additional
posts. To compare projected staffing levels in rightsizing reviews with
actual staffing levels as of December 2011, we compared staffing data
from State’s personnel database as of December 2011 with the staffing
projections of 144 rightsizing reviews State conducted from 2006 through
2011. We did not include all of the rightsizing reviews in the comparison
between the actual and projected staffing levels for various
methodological reasons, such as data reliability concerns and review time
frames that were outside the scope of our analysis. To assess the
reasons for the differences between the projection and the actual staffing
levels, we constructed a composite index for each country taking into
account the differences in staffing levels for various personnel categories.
We then sent questions to the management officers in 10 countries with
the highest indices: 5 for reviews that had projected staff levels that were
higher than actual levels and 5 for those that had projected levels that
were lower than actual levels. In addition, we discussed rightsizing with
State officials in Washington, D.C., from M/PRI, State’s regional bureaus,
the Bureau of Overseas Buildings Operations (OBO), the Bureau of
Diplomatic Security, and the Bureau of Consular Affairs. We also
discussed rightsizing with officials from non-State agencies based in
Washington, D.C. or overseas, including the Departments of Defense
(DOD); Commerce; Health and Human Services; Homeland Security; and
Justice; and the U.S. Agency for International Development (USAID).
Appendix I provides more information on our scope and methodology.




Page 2                                          GAO-12-799 Overseas Rightsizing
             We conducted this performance audit from July 2011 to July 2012 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.


             The U.S. government maintains more than 270 diplomatic posts,
Background   including embassies, consulates, and other diplomatic offices, in about
             180 countries worldwide. More than 80,000 U.S. government employees
             work overseas, including both U.S. direct hires and locally-employed staff
             under chief of mission 4 authority, representing more than 30 agencies
             and government entities. Agencies represented overseas include the
             Departments of Agriculture, Commerce, Defense, Homeland Security,
             Justice, State, the Treasury, and USAID.

             In the aftermath of the August 1998 bombings of two U.S. embassies in
             Africa, State formed the Overseas Presence Advisory Panel to conduct
             an assessment of overseas presence. The panel determined that
             overseas staffing levels had not been adjusted to reflect changing
             missions, requirements, and security concerns. Some missions were
             overstaffed, while others were understaffed. In 2002, we outlined a
             framework for assessing overseas staff levels. 5 In 2003, we found that
             U.S. agencies’ staffing projections for new embassy compounds were
             developed without a systematic approach or comprehensive rightsizing
             analysis. 6

             In 2004, Congress mandated the establishment of the Office of
             Rightsizing within State. The Office of Rightsizing was combined with two
             other offices in 2007 to create M/PRI. The House Foreign Affairs



             4
              A chief of mission is the principal officer, usually the Ambassador, in charge of a U.S.
             diplomatic mission abroad, and has full responsibility for the direction, coordination, and
             supervision of all U.S. government executive branch employees in that country (except for
             Voice of America correspondents on official assignment and employees under the
             command of a U.S. area military commander). See 22 U.S.C. 3927.
             5
             GAO-02-780.
             6
             GAO-03-411.




             Page 3                                                    GAO-12-799 Overseas Rightsizing
Committee directed the office to lead State’s efforts to develop internal
and interagency mechanisms to coordinate, rationalize, and manage the
deployment of U.S. government staff overseas. This legislation was
intended to result in the reallocation of resources to achieve a leaner,
streamlined, more agile and secure U.S. government presence abroad.
The conference report accompanying the legislation establishing the
Office of Rightsizing stated that a proper rightsizing plan should include a
systematic analysis to bring about a reconfiguration of overseas staffing
to the number necessary to achieve U.S. foreign policy needs, and noted
that rationalizing staffing and operations abroad had the potential for
significant budgetary savings. The office was directed by the Senate
Foreign Relations Committee to review all U.S. government staffing
overseas, including all American and foreign national personnel, in all
employment categories. The House Foreign Affairs Committee also
directed OBO to work closely with M/PRI to ensure that projected staffing
levels for new embassy compounds were prepared in a disciplined and
realistic manner, and that these estimates become a basis for
determining the size, configuration, and budget of new embassy
construction projects.

M/PRI conducts rightsizing reviews before each construction project and
on each mission every 5 years, among other responsibilities. 7 M/PRI
focuses on streamlining staffing levels by, for example, consolidating or
outsourcing administrative functions. M/PRI also looks for opportunities to
substitute less expensive, locally-employed staff for more expensive U.S.
direct-hire employees. 8 According to the guidance M/PRI provides to


7
 The legislation establishing the Office of Rightsizing also directed the Secretary of State
to require chiefs of mission to review, not less than once every 5 years, every staff
element under their authority, including staff from other departments or agencies of the
United States, and recommend approval or disapproval of each staff element. Pub. L. No.
108-447, Div. B. sec. 409(a). M/PRI coordinates this process and provides analysis of
chief of mission submissions.
8
 U.S. overseas missions are staffed by both U.S. direct-hire and locally-employed staff, all
of whom are considered during the rightsizing process. U.S. direct-hire staff work directly
for a U.S. government agency (i.e., are not contractors); individuals who are hired locally
to work at U.S. missions overseas are referred to as locally-employed staff. U.S. direct-
hire staff salaries are paid for by budgets in Washington, D.C., while locally-employed staff
salaries and benefits are paid for out of a specific post’s budget. M/PRI estimates that the
average cost to maintain a U.S. direct-hire position overseas is approximately $530,000
annually, which includes housing and other benefits and allowances. Costs for locally-
employed staff, who do not receive the same benefits and allowances as U.S. direct-hire
staff, are often significantly less.




Page 4                                                     GAO-12-799 Overseas Rightsizing
overseas missions, a rightsizing analysis may lead to the reallocation of
resources from one mission goal to another and to enhancing operational
efficiency through regionalization 9 and centralization. M/PRI uses GAO’s
definition of rightsizing: aligning the number and location of staff assigned
overseas with foreign policy priorities, security concerns, and other
constraints. Rightsizing may result in the addition or reduction of staff, or
a change in the mix of staff at a given embassy or consulate. M/PRI’s
guidance stresses that all sections and agencies of an overseas mission
should be included in a rightsizing analysis.

In the first step of the rightsizing process, overseas missions, generally
led by the mission’s management officer, prepare a report for M/PRI
outlining their strategic goals, current staffing data for all agencies, and
projected staffing levels 5 years into the future. State and non-State
agencies present at an overseas mission provide their staffing data to be
included in the mission’s submission to M/PRI. M/PRI officials stated that,
under their current process, an M/PRI analyst usually visits the mission to
assist in preparing the rightsizing report. After a mission completes its
rightsizing report, the relevant regional bureau approves the submission
before sending it to M/PRI. Next, M/PRI conducts its analysis of staffing at
the mission, coordinating with the headquarters of non-State agencies to
confirm the numbers provided at the mission for those agencies. When
M/PRI completes a draft rightsizing review, other State bureaus and
agencies have the opportunity to review and discuss it. According to
officials from State bureaus, they frequently engage in a dialogue with
M/PRI to negotiate the staffing projections to be published in the
rightsizing review and in a majority of cases, differences in projected
staffing numbers are resolved through these discussions. Once all
bureaus and agencies have reviewed the rightsizing review document,
M/PRI finalizes and publishes it on an internal State website. Since its
creation in 2004, State’s rightsizing office has conducted 224 reviews. 10
According to M/PRI officials, all overseas missions have undergone the
process once, and a second round of reviews is now under way.




9
 Regionalization could include outsourcing certain activities, such as voucher examining,
from a post to a regional center or U.S. office.
10
  M/PRI provided us with 181 rightsizing reviews within the time frame of our analysis.
Since that time, M/PRI has completed additional reviews.




Page 5                                                   GAO-12-799 Overseas Rightsizing
                         The staffing levels of a mission are determined by the chief of mission
                         through the National Security Decision Directive 38 (NSDD-38) 11 process,
                         which provides authority for the chief of mission to determine the size,
                         composition, or mandate of personnel operating at the mission. To add or
                         abolish U.S. direct-hire positions at a mission, agencies electronically
                         submit an NSDD-38 request for the chief of mission to either approve or
                         deny. Requests may only include one agency in one country, but may
                         include requests for multiple positions. Formal submission is generally
                         preceded by informal discussions about the requested positions,
                         according to officials.


                         State has improved the consistency of its analyses across overseas
State Has Improved       missions, but differences between actual and projected staffing levels still
the Consistency of Its   exist due to unanticipated events and other factors. We reported in 2006
                         that the Office of Management Policy, Rightsizing, and Innovation (M/PRI)
Approach, but            had not been conducting its rightsizing reviews in a consistent manner. 12
Unanticipated Events     State has since improved the consistency of its reviews by developing a
and Other Factors        variety of methodological tools and a standard template that it applies to
                         each mission. These tools include ratios and formulas that compare
Contribute to            missions similar in size and foreign policy priority to help M/PRI project
Differences between      what the office determines is the appropriate level of staffing at each
                         mission. We found that although actual staffing levels as of December
Actual and Projected     2011 were within 10 percent of projected staffing levels in over half of the
Staff Levels             reviews we analyzed, over 40 percent of the missions have staffing level
                         differences over 10 percent. Unanticipated events and other factors, such
                         as changes in policies and priorities, contributed to the differences
                         between actual and projected staffing levels.




                         11
                           NSDD-38 states that agencies with staff under chief of mission authority will ensure that
                         approval from the chief of mission is sought, in coordination with State, before making any
                         proposed changes to the size, composition, or mandate of the agencies’ staffing elements
                         at the post.
                         12
                              GAO-06-737.




                         Page 6                                                    GAO-12-799 Overseas Rightsizing
State Has Improved the      With its current approach to rightsizing, State has improved the
Consistency of Its          consistency of its analysis across overseas missions. In 2006, we
Rightsizing Reviews Since   reported that the information presented in rightsizing reviews varied from
                            mission to mission and the rightsizing elements that missions evaluated
2006                        and reported were not consistent. 13 Some missions provided narratives
                            discussing various rightsizing elements, such as outsourcing and post
                            security, while others did not. The reviews ranged in length from less than
                            5 pages to over 20 pages.

                            According to current M/PRI officials, the methodology used in the
                            rightsizing process has evolved since the office was created. M/PRI
                            officials stated that their reviews are now more standardized than in the
                            past. The reviews now contain the same types of information in a similar
                            format and have a more uniform level of detail. The required elements of
                            a rightsizing review include detailed analysis of current and projected staff
                            for each section of an overseas mission, as shown in table 1. M/PRI has
                            also refined its methodology for analyzing administrative, management,
                            and program staff. M/PRI has developed uniform guidance for staff at
                            overseas missions to use in preparing rightsizing submissions. The
                            majority of State officials at posts we visited that had participated in a
                            rightsizing review said that the M/PRI guidance was helpful for the post in
                            completing its submission.




                            13
                                 GAO-06-737.




                            Page 7                                           GAO-12-799 Overseas Rightsizing
Table 1: Summary of Required Elements of Rightsizing Reviews

Element                                Description
Mission goals and objectives           For each mission goal, identify the resources currently supporting that goal, and analyze the
                                       post’s specific achievements in meeting the objectives.
Current and projected staffing         Analyze current and projected staffing in each section of an overseas post and for each agency,
                                       using comparative indicators. Complete the summary staffing table, including all sections and/or
                                       agencies, showing current staffing levels, projected staffing levels, and the net change.
Duplicative activities                 Assess areas of duplication, activities that are no longer required or may require adjustment of
                                       resource levels, and identify activities that require increased resources to achieve their
                                       objectives.
Competitive sourcing                   Identify services that are or could be outsourced, including services contracted by the embassy
                                       such as local guard services, vehicle maintenance, janitor services, gardening services, etc.
Regionalized services                  Identify activities that are or could be performed by regional or U.S.-based government
                                       personnel such as financial management and human resources services.
Substitution of locally-employed       Identify U.S. direct-hire or eligible family member positions for which locally-employed staff may
staff for U.S. direct-hire positions   be substituted.
       a
ICASS workload count                   Compare the productivity of locally-employed staff in the different management service functions
                                       to worldwide average productivity and to the productivity of staff at other posts of approximately
                                       the same size and operating environment.
                                              Source: GAO and M/PRI.
                                              a
                                               The International Cooperative Administrative Support Services (ICASS) system provides more than
                                              30 services—including financial management, human resources, and travel services, among others—
                                              with costs of the services divided among the agencies and sub-agencies with staff at the post, based
                                              on the level of ICASS services used.


                                              M/PRI has developed standard methodological tools to examine overseas
                                              staffing on a mission-by-mission basis. These tools are ratios and
                                              formulas that compare missions considered similar in size, foreign policy
                                              priority, and management and administrative requirements, and help
                                              M/PRI to determine what it believes to be appropriate staffing levels in
                                              each section of an overseas post. The total management ratio, for
                                              example, is the number of customer units divided by the number of U.S.
                                              direct-hire management positions. 14 Further, the level of program staff 15 is
                                              analyzed using two tools—the Four Factor Index and diplomatic density.
                                              The Four Factor Index is an attempt to measure a country’s theoretical


                                              14
                                                The total management ratio is a way to quantify the workload of service providers in the
                                              management section by measuring the amount of customer units served. Customer units
                                              represent the different customers served by the management section, including U.S.
                                              direct-hire staff, their family members, and locally-employed staff.
                                              15
                                                Program staff include State Department staff in the offices of the chief of mission,
                                              political affairs, economic affairs, and public diplomacy.




                                              Page 8                                                         GAO-12-799 Overseas Rightsizing
foreign policy importance to the United States using a combination of
factors such as population, gross domestic product, trade volume with the
United States, and U.S. foreign assistance. Diplomatic density is an effort
to quantify the size of the U.S. diplomatic presence in a country with
respect to U.S. interests in that particular country. It is calculated by
dividing the number of diplomatic direct-hire positions present in a given
country by the Four Factor Index. According to M/PRI officials, diplomatic
density tends to be relatively low in developed countries with which the
United States has close relations, such as Canada, Japan, and Germany,
or where our interests are limited or primarily humanitarian. Diplomatic
density may be higher where the United States has or has recently had
difficult relations or where vital security interests are at stake, such as in
Russia and many of the countries in the Middle East.

Many post officials we spoke with considered M/PRI’s standardized
analysis appropriate but emphasized the need for flexibility to account for
varying circumstances at each post. Some officials noted that M/PRI’s
comparative analysis among posts was particularly helpful in providing
context for staffing decisions. For example, one management officer
stated that the rightsizing review found that locally-employed staff at post
had heavier workloads than their counterparts at similar posts. The post
used this analysis as justification for requesting more locally-employed
staff positions.

According to non-State officials, M/PRI generally coordinates with other
agencies in preparing rightsizing reviews of U.S. government staffing
overseas. In 2006, we reported that coordination with other agencies in
the rightsizing process was initially limited. 16 Non-State agencies had
voiced a number of concerns regarding their interaction with the Office of
Rightsizing, including their desire for greater participation in the rightsizing
process. We recommended that the Office of Rightsizing increase its
outreach activities with non-State agencies so that all relevant agencies
with an overseas presence could discuss rightsizing initiatives on a
regular and continuous basis. During our current review, non-State
officials stated that M/PRI’s current coordination efforts had improved.




16
     GAO-06-737.




Page 9                                            GAO-12-799 Overseas Rightsizing
Over Half of Staffing        For more than half of the 144 staffing projections based on rightsizing
Projections Were within 10   reviews that we analyzed, actual staffing levels as of December 2011
Percent of Actual Staffing   were within 10 percent of review staffing projections, either higher or
                             lower. 17 However, over 40 percent of the projections based on the
Levels as of December
                             reviews had differences of greater than 10 percent. About 30 percent of
2011, but Some Posts Have    these had more staff than projected and 13 percent had fewer (see fig. 1).
Larger Differences           In a few cases, the actual staffing levels as of December 2011 were much
                             higher or lower than the projected levels. For example, the actual number
                             of U.S. direct-hire desk positions (81) in Bolivia as of 2011 was less than
                             half of the projected number of U.S. direct-hire desk positions (164). On
                             the other hand, the actual number of U.S. direct-hire desk positions in
                             Algeria (56) was nearly 20 percent higher than the projected level (45).
                             See appendix I for more information about our methodology.




                             17
                               Rightsizing reviews usually project staffing levels 4 to 5 years into the future based on
                             the existing levels at the time of the review. For actual staffing levels, we used data as of
                             December 2011 from State’s post personnel database, which includes overseas staff
                             numbers for all agencies. For the projected staffing levels, we used the rightsizing reviews’
                             numbers if the projection year was 2011 and we extrapolated the staffing levels if the
                             projection year was beyond 2011. We did not include all of the rightsizing reviews in the
                             comparison between the actual and projected staffing levels for various methodological
                             reasons, such as data reliability concerns and review time frames that were outside the
                             scope of our analysis. See appendix I for more information about our methodology.




                             Page 10                                                    GAO-12-799 Overseas Rightsizing
Figure 1: Percentage of Rightsizing Reviews with December 2011 Staffing Levels
Over and Under Rightsizing Projections




Notes:
1. The projected staffing levels were from the rightsizing reviews if the projection year was 2011 and
were extrapolated if the projection year was beyond 2011. The actual staffing levels refer to the levels
from the State post personnel database as of December 2011. The database includes overseas staff
from State and non-State agencies.
2. Our comparison included 144 rightsizing reviews. We excluded reviews for a variety of reasons,
including the following: (1) the projection year was before 2011; (2) the actual staffing level as of
December 2011 was deemed unreliable; (3) the review was for an individual post, not for all posts in
a country; and (4) the review had no projected staffing level.




Page 11                                                           GAO-12-799 Overseas Rightsizing
Unanticipated Events and   Numerous factors contribute to differences between projected and current
Other Factors Contribute   staffing levels, such as unanticipated U.S. and foreign government policy
to Differences between     changes. Officials from ten missions we identified as having the largest
                           differences between December 2011 staffing levels and the rightsizing
Projected and Current      projected staffing levels, either higher or lower, identified such factors. 18
Staffing Levels            Table 2 shows the percentage differences between December 2011
                           actual staffing levels and projected total staffing levels based on the
                           rightsizing reviews for these missions.




                           18
                             To understand the factors that could explain the differences between the actual and
                           projected staffing levels, we identified posts with relatively large differences by generating
                           a composite index for each country. Based on the composite index, we identified the top 5
                           countries with projected staff levels that were higher than actual levels and the top 5
                           countries with projected staff levels that were lower than the actual level. We sent
                           questions to the management officers in each of the 10 countries asking for their views on
                           causes for the differences, and received responses from all of them. The following section
                           summarizes responses from the management officers in these countries, as well as
                           Kuwait, a country we visited.




                           Page 12                                                     GAO-12-799 Overseas Rightsizing
Table 2: Countries with the Largest Differences between December 2011 Staffing
Levels and Rightsizing Review Projections

                                                             Percentage Differences between
                                                         December 2011 Total Staffing Levels
    Country                                               and Rightsizing Review Projections
    December 2011 Staffing Level Below Rightsizing Projection
    Libya                                                                                         -39
                  a
    Philippines                                                                                   -32
    Korea                                                                                         -30
    Bolivia                                                                                       -28
    Tunisia                                                                                       -24
    December 2011 Staffing Level Above Rightsizing Projection
    Burkina Faso                                                                                   30
    Mozambique                                                                                     25
    Bangladesh                                                                                     22
    Pakistan                                                                                       21
    Ghana                                                                                          20
Source: GAO.

Notes:
Because size of missions varies greatly, similar differences in percentages represent a higher number
of staff in a larger mission than in a smaller mission.
a
 The management officer in the Philippines explained that the large difference between the projected
and the actual staffing levels was because rightsizing projections included certain contractor
positions, such as local guards, janitors, gardeners and cafeteria workers that were not included in
State’s post personnel database, which was the basis for the actual staffing level. After taking out
these positions from the projection, the total actual staffing level was close to the projected level.
This post was the only location we interviewed where staffing level differences were identified as a
result of data differences, rather than other factors related to U.S. operations in the country.


Unanticipated changes in U.S. government policies and priorities
contribute to differences between actual and projected staffing levels at
overseas posts. 19 Programs such as the President’s Emergency Plan for
AIDS Relief (PEPFAR) 20 and USAID and State hiring initiatives, including




19
  Multiple factors can contribute to the differences between actual and projected staffing
levels. The data we have are not at a level of specificity that would allow us to isolate the
effect of each of the factors.
20
 PEPFAR is a U.S. government initiative which began in 2008 with the goal to combat
HIV/AIDS around the world.




Page 13                                                          GAO-12-799 Overseas Rightsizing
Diplomacy 3.0, 21 have added additional staff to overseas posts, while
other changes in U.S. foreign policy have led to lower-than-projected
staffing levels.

•    According to the management officer in Mozambique, the increase in
     the number of U.S. direct-hire and locally-employed staff positions as
     a result of PEPFAR’s initiation was greater than anticipated.
•    The introduction of the Visa Waiver Program for Korea reduced the
     need for consular officers to conduct visa interviews and led to lower-
     than-projected staffing levels, according to the management officer in
     Korea.
•    Ghana became a USAID priority country and the beneficiary of the
     Global Health Initiative, Feed the Future, and Partnership for Growth,
     which led to increased staffing levels, according to the management
     officer in Ghana.
•    USAID’s and State’s hiring initiatives added a human resource officer,
     a political officer, and a general service officer, positions not
     anticipated at the time of the rightsizing review, according to the
     management officer in Mozambique.
•    According to the management officer in Pakistan, increased funding to
     address development and security projects has led to higher staffing
     levels than the rightsizing review projected.
•    The closure of an Arabic language school for State employees in
     Tunisia resulted in staffing levels below rightsizing projections,
     according to the management officer.
Unanticipated changes in foreign government priorities and political
environment can contribute to differences between actual and projected
staffing levels. A foreign government’s decision to eliminate program
funding or request the closure of a U.S. program usually leads to lower
staffing levels, as in the following examples.

•    According to the Deputy Chief of Mission in Kuwait, the decrease in
     Kuwaiti government funding for the Office of Military Cooperation-
     Kuwait caused the post to reduce staffing levels beginning in 2009.
•    In 2008, the Bolivian government ordered the U.S. Drug Enforcement
     Agency to leave Bolivia, leading to an unexpected reduction in staff,
     according to the management officer in Bolivia.



21
 Diplomacy 3.0 is State’s multi-year hiring program to increase its Foreign Service and
Civil Service personnel.




Page 14                                                  GAO-12-799 Overseas Rightsizing
                        •   According to the management officer in Libya, staff levels decreased
                            after the evacuation and destruction of the U.S. embassy in February
                            2011.

                        Additionally, some posts reported that they were unable to carry out the
                        relatively large reductions in staffing levels projected in the rightsizing
                        reviews, usually for locally-employed staff positions. M/PRI projected
                        sizeable reductions in locally-employed staffing levels for posts through
                        outsourcing or contracting. However, some posts reported that a lack of
                        viable service options in the local economy made it unfeasible to
                        outsource or contract services. For example,

                        •   In Mozambique, outsourcing services such as the motor pool,
                            customs shipping, travel services, and warehousing are not feasible
                            due to the country’s poor infrastructure, according to a management
                            officer in the country.
                        •   In Bangladesh, according to a management officer in the country, the
                            post does not contract custodial services, warehouse services, or car
                            repair as recommended by the rightsizing review because no local
                            contracting options exist.
                        •   In Burkina Faso, the embassy did not contract guard services
                            because no major contractors exist in the capital, Ouagadougou, and
                            local companies cannot provide the level of quality and service
                            required by the post, according to the embassy’s management officer.


                        Rightsizing recommendations often focus on administrative or
Rightsizing             management positions, where efficiencies are considered likely to be
Recommendations         achieved. M/PRI typically does not make recommendations to non-State
                        agencies and generally relies on non-State agencies, as well as certain
Focus on State          State bureaus, to determine their own staffing needs.
Administrative and
Management Staff,
and State Relies on
Non-State Agencies to
Determine Their Own
Staffing Needs




                        Page 15                                          GAO-12-799 Overseas Rightsizing
State’s Recommendations    Rightsizing reviews contain recommendations to improve post operations
Generally Focus on State   and eliminate duplicative services and positions; 22 these
Administrative and         recommendations often focus on State’s administrative and management
                           staff. To develop its recommendations, M/PRI reviews the levels of all
Management Staff at a
                           staff at missions and seeks input from both State and non-State agencies.
Specific Post to Improve   Many of M/PRI’s recommendations that we analyzed focused on State
Efficiency                 administrative and management staff rather than programmatic staff or
                           staff from other agencies. Officials stated that administrative and
                           management functions are where greater efficiencies are considered
                           likely to be achieved. M/PRI recommendations may include outsourcing
                           or regionalization of administrative functions such as voucher processing
                           or warehousing. These changes affect administrative staff responsible for
                           those functions, at times addressing dozens of positions filled by locally-
                           employed staff. In Albania, for example, the rightsizing review
                           recommended a reduction of over half of the locally-employed staff non-
                           desk 23 positions, from 216 to 93, mainly through outsourcing of guard
                           services. In Bangladesh, the rightsizing review recommended eliminating
                           27 locally-employed non-desk staff positions out of a total of 192 to
                           improve the efficiency of administrative functions, such as building,
                           gardening, and custodial services. The review found that the number of
                           square meters maintained per service provider for both residential and
                           non-residential buildings in Bangladesh was lower than the worldwide
                           median. For example, the review found that the area a service provider
                           maintained in Bangladesh was less than half that in other posts for non-
                           residential buildings and thus deemed the service to be inefficient. It
                           recommended eliminating a sufficient number of positions to bring the
                           ratio of square meters per service provider on par with other posts.

                           According to State officials, the focus on management services is
                           appropriate because that is where duplication of effort is most likely to
                           occur. State officials said that it is easier to apply M/PRI’s quantitative
                           tools to administrative and management staff activities than to
                           programmatic activities. According to State officials, administrative or
                           management work is better suited to measurements that can be


                           22
                             M/PRI officials stated that their recommendations can make posts’ administrative
                           services platform more efficient, which can lower costs for all agencies at a post.
                           23
                             Desk positions are those that require the use of designated office and desk space, while
                           those that do not need an office, such as guards and garden and custodial staff, are
                           considered non-desk positions. These designations help OBO determine how much space
                           is needed when planning construction of an embassy or consulate.




                           Page 16                                                  GAO-12-799 Overseas Rightsizing
compared across posts. For example, voucher examiners can record the
volume of vouchers handled in a given time and the length of time they
take to process. M/PRI has developed tools to assess the level of
administrative support needed at posts of different sizes and has used
those tools to compare posts of similar size. By comparing the efficiency
of administrative services across similar posts, M/PRI has developed
targets that posts should meet and uses these targets to identify posts
that may be under- or overstaffed in administrative functions. For
example, the rightsizing review for Paraguay recommended that the
embassy cut one U.S. direct-hire position in administrative services
support, a general services officer. This recommendation was based on
comparing the workload of Paraguay’s service providers with workloads
of service providers at similar posts—Uruguay, Croatia, and Cyprus.
Rightsizing reviews also evaluate whether posts can utilize locally-
employed staff in a position rather than a more costly U.S. direct hire. For
example, the 2010 rightsizing review for Kenya recommended that the
post use appointment-eligible family members 24 to serve in office
management positions instead of U.S. direct hires. According to M/PRI,
the cost of employing these appointment-eligible family members is only a
fraction of U.S. direct-hire employees and helps minimize the American
footprint in dangerous overseas environments. In addition, M/PRI
recommended that appointment-eligible family members be considered
for employment if host country nationals are unavailable or present an
unacceptable risk.

According to State officials, it is more difficult to quantify the workload of
program staff such as political officers than that of administrative and
management staff. M/PRI has developed methodological tools to
measure a post’s diplomatic density and foreign policy priority for
comparison with similar posts. However, State officials said that it is
difficult to assess the efficiency of program staff due to the qualitative
nature of their activities, such as discussing policy issues with their
diplomatic counterparts or drafting briefing documents for visiting officials.
Nevertheless, M/PRI makes recommendations regarding programmatic
staff where possible. In Kuwait, for example, the 2010 rightsizing review



24
  An appointment-eligible family member is a U.S. citizen spouse or domestic partner, or
                                                         st
U.S. citizen child who is at least 18 and up to their 21 birthday, and who is included on
the travel orders of a foreign service or civil service employee or uniformed service
member permanently assigned to an overseas post under chief of mission authority. The
appointment-eligible family member must be a resident at the employee’s overseas post.




Page 17                                                  GAO-12-799 Overseas Rightsizing
                            recommended the periodic reevaluation of the political and economic
                            sections to assess the possibility of combining them. In some cases,
                            M/PRI has made broader recommendations for posts to review levels of
                            staff across an entire region. For example, M/PRI recommended that the
                            Bureau of European and Eurasian Affairs reevaluate an appropriate
                            presence in former Warsaw Pact country posts, given that the political
                            and economic environment in these countries has shifted dramatically
                            during the past 2 decades.


State Does Not Often Make   M/PRI reviews all U.S. government staffing overseas and incorporates
Recommendations             staffing data and projections from non-State agencies with a presence
Directed at Other U.S.      overseas. 25 While chiefs of mission have final decision-making authority
                            on staffing changes at their missions, M/PRI officials stated that their
Government Agencies and
                            office does not have the authority to direct non-State agencies’ overseas
Relies on These Agencies    staffing decisions. M/PRI generally does not analyze staffing numbers of
to Determine Their Own      other U.S. agencies overseas or make recommendations affecting these
Staffing Needs Overseas     staff. Instead, M/PRI officials stated that they rely on these agencies to
                            conduct their own rightsizing assessments and determine independently
                            what their staffing needs will be for each post. M/PRI infrequently makes
                            recommendations to other agencies, such as USAID. For example, M/PRI
                            recommended that USAID evaluate the distribution of its staff in Central
                            America, questioning the sustainability and cost-effectiveness of high
                            USAID staffing levels in El Salvador and suggesting that USAID’s
                            development resources could be better utilized elsewhere in Central
                            America. However, such broader recommendations are an exception in
                            rightsizing reviews and not a common occurrence, according to M/PRI
                            officials.

                            According to some bureau officials, non-State agencies that are relatively
                            new to operating overseas have been slow to acclimate to the rightsizing
                            process. State officials noted that non-State agency officials in
                            Washington might have a different view of long-range overseas staffing
                            needs than their agency officials at post. Several officials from different
                            regional bureaus said that agencies prefer to conduct their own strategic
                            planning and staffing exercises and view rightsizing as an activity internal
                            to State. Officials from several non-State agencies confirmed that they



                            25
                             State’s Bureau of Consular Affairs and Bureau of Diplomatic Security also have
                            methodologies for determining staffing levels.




                            Page 18                                                GAO-12-799 Overseas Rightsizing
                            conduct their own internal staffing analyses. For example, officials from
                            the Department of Homeland Security noted that they review overseas
                            staffing on an ongoing basis, since current events dictate the
                            department’s operational needs. Similarly, officials from the Centers for
                            Disease Control and Prevention stated that they evaluate overseas
                            staffing through annual updates to their strategic staffing plan and look for
                            opportunities to reduce U.S. direct hires by empowering locally-employed
                            staff to serve in senior management and leadership positions. The
                            Defense Intelligence Agency coordinates the DOD’s rightsizing efforts at
                            U.S. posts; DOD components reevaluate positions worldwide as
                            requirements change to ensure that staff are best positioned to achieve
                            the department’s mission, according to an agency official.


                            State uses rightsizing reviews to plan facilities construction and for certain
State Offices Vary in       staffing considerations, but some U.S. officials said that use of the
Their Use of                reviews is limited, and State officials do not monitor whether
                            recommendations are implemented. State’s Bureau of Overseas
Rightsizing Reviews,        Buildings Operations (OBO) uses the staffing projections in rightsizing
and State Does Not          reviews to plan the size and estimate the initial costs of new embassy and
Monitor                     consulate compounds. Further, M/PRI uses rightsizing reviews when it
                            assesses requests from State or other agencies to add staff to overseas
Implementation of           posts, although the respective chief of mission makes the final decision
Rightsizing                 for his or her mission. However, some regional bureau officials said that
                            they do not actively use the reviews except as a historical overview of
Recommendations             staffing, and some post officials said that they do not use the reviews at
                            all. In addition, State often uses documents other than rightsizing reviews
                            to inform decisions in areas such as determining staffing levels and
                            regionalization. Finally, State does not monitor the implementation of
                            rightsizing review recommendations and has not designated an office with
                            that responsibility, making it difficult to know the extent to which
                            rightsizing reviews are having an impact.


Some State Officials Use    State uses rightsizing reviews for various purposes, according to U.S.
Rightsizing Reviews to      officials. These officials use reviews to, among other things, plan new
Plan Construction and for   construction, assess requests to add staff to a post, and sometimes, in
                            conjunction with other information, allocate resources. In addition, some
Certain Staffing            State officials stated that rightsizing is the only comprehensive process to
Considerations              verify the number of overseas positions and the personnel occupying
                            them.




                            Page 19                                          GAO-12-799 Overseas Rightsizing
The reviews that precede the construction of a new diplomatic compound
have the most impact, according to M/PRI’s fiscal year 2010 report to
Congress, because OBO uses the rightsizing projections to plan the size
and estimate the preliminary costs of such projects. OBO officials told us
that using rightsizing reviews to plan new construction is a significant
improvement over the process previously used, which was informal and
not systematic. 26 Rightsizing reviews must accompany any proposal for
new construction that is sent to the Office of Management and Budget
and to Congress. While OBO bases its construction plans on M/PRI’s
rightsizing review, OBO officials stated that they also verify the staffing
numbers in the rightsizing reviews with the staffing numbers in personnel
databases and with agency and post officials. If post staffing levels
increase by more than 10 percent (the amount of growth space OBO
builds in) after a project has started, OBO asks M/PRI to do a rightsizing
revision to obtain more accurate numbers and improve construction
planning, according to OBO officials. 27 Regional bureau officials stated
that they and post officials pay particularly close attention to rightsizing
reviews that are conducted in preparation for construction because they
want to ensure that OBO plans enough space for the new diplomatic
compounds. 28

Further, M/PRI and post officials stated that they use rightsizing reviews
when assessing requests by State or other agencies through the NSDD-
38 process to add staff to overseas posts, although the final decision on
requests is made by the chief of mission. An M/PRI official stated that
rightsizing reviews are intended to be used by the chief of mission to
inform decisions on staffing, including those made through the NSDD-38
process. A few post management officers told us that the rightsizing


26
  In 2003, prior to the establishment of M/PRI, we reported that U.S. agencies’ staffing
projections for new embassy compounds were developed without a systematic approach
or comprehensive rightsizing analyses. See GAO-03-411.
27
  While many of the new U.S. facilities were planned or built prior to the start of the current
rightsizing process, which began in 2004, some were planned using current rightsizing
reviews. M/PRI identified 21 rightsizing reviews that were used to plan construction. OBO
officials said that most of the new facilities OBO has built have had more staff move in
than originally planned. In a 2010 report on new embassy compounds completed between
2001 and 2009, we found that actual staffing levels exceeded the originally-built office
space by more than 10 percent at almost half of the new buildings that we analyzed. See
GAO-10-689.
28
  According to officials, OBO’s planning process typically incorporates a 10 percent future
growth allowance to accommodate future unanticipated growth.




Page 20                                                     GAO-12-799 Overseas Rightsizing
process had prompted posts to review staffing requests more carefully.
One management officer said that the rightsizing process also prompted
a more substantial justification for NSDD-38 requests, adding
organization and structure to the decision-making process. Another
management officer said that rightsizing prompted the post to launch a
new internal mechanism to control growth. The post instituted an internal
pre-NSDD-38 vetting process requiring each office or agency to justify the
need for a requested position via internal memorandum and explain how
it would be funded and address other logistical needs (such as available
office space).

In addition, some officials from State bureaus and posts told us that they
use rightsizing reviews in a variety of other ways. Bureau of Diplomatic
Security officials said that they use rightsizing reviews in conjunction with
Office of Inspector General (OIG) reports, annual Mission Strategic
Resource Plans (MSRP), 29 and other information to make resource
allocation decisions in their annual staffing planning exercise. In addition,
an official in Kuwait said that she read the rightsizing review when she
arrived at post because it gave a more concise summary of conditions at
post than other documents, such as the MSRP. Further, a regional
bureau official stated that the primary value of rightsizing was that it
forces missions to systematically collect information and plan for future
staffing. Several officials stated that undertaking the rightsizing process
acts as a check on growth in overseas staffing levels. For example,
M/PRI’s fiscal year 2011 report to Congress states that M/PRI projected
42 fewer U.S. direct-hire positions than missions had projected.

Some post officials, particularly those in management functions, said that
they refer to rightsizing reviews to support staffing changes. For example,
the management officer in Paraguay stated that the post concurred with
the rightsizing recommendation to eliminate an assistant general services
officer position; post officials are now in the process of abolishing the
position. The financial management officer in Sarajevo said that she had
already considered outsourcing cashiering, but a rightsizing
recommendation to do so gave her more incentive to take action. Further,
according to M/PRI officials, M/PRI’s 2007 review on Uruguay


29
  Posts articulate country goals and make budget requests to support those goals through
the MSRP. The MSRP serves as the programmatic planning tool for all U.S. government
agencies with programming in that country. State is currently in the process of
transitioning to a new planning system to replace the MSRP.




Page 21                                                 GAO-12-799 Overseas Rightsizing
                           recommended adding a second U.S. direct-hire public diplomacy position,
                           and the post has since implemented that recommendation.

                           According to State officials, M/PRI provides a broader perspective in
                           analyzing overseas staffing, providing information on where posts are
                           overstaffed or understaffed, and recommending potential ways to achieve
                           greater efficiencies. OBO officials stated that rightsizing is an independent
                           process that provides staffing projections. According to regional bureau
                           officials, the rightsizing review is currently the only tool that provides a
                           comprehensive process to verify the number of overseas positions and
                           the personnel occupying them. Officials from several regional bureaus
                           said that M/PRI’s broader perspective in analyzing post operations was a
                           benefit to rightsizing, as posts tend to have a narrower, more parochial
                           perspective on what staffing levels are necessary.


Some U.S. Officials Use    Several U.S. officials stated that they do not actively use rightsizing
Rightsizing Reviews Less   reviews; they view other documents and tools as more timely and useful
Often than Other           for planning and staffing decisions. For example, officials from a regional
                           bureau said that they do not actively use the reviews except as a
Documents that Are More    historical overview of staffing. Officials from one regional bureau said that
Timely and More Widely     the 5-year reviews do not have as clear a use as those done specifically
Known                      for construction. Some State post officials, especially in non-management
                           functions, said that the rightsizing reviews were of little or no use to them.

                           Several U.S. officials stated that that they use MSRPs and OIG reports
                           more frequently than rightsizing reviews to make staffing and resource
                           allocation decisions. These officials said that they were more aware of the
                           annual MSRPs, which are more current than 5-year rightsizing reviews,
                           and OIG reports and recommendations, which require follow-up until they
                           are closed. Officials said that rightsizing reviews, done every 5 years,
                           quickly become outdated as the situation at a post changes. Officials from
                           the Centers for Disease Control and Prevention said that, while the
                           rightsizing review is a long-term planning document, the more immediate
                           time frame of the annual MSRP is more actionable, given the short-term
                           program-driven nature of the agency’s work. Further, some State officials
                           told us that because the rightsizing process is still relatively new and done
                           at each post only once every 5 years, many post management officers
                           have not yet gone through a rightsizing review and may be unfamiliar with
                           it. As a result, some post officials may be resisting the rightsizing process
                           rather than viewing it as a tool, according to M/PRI officials.




                           Page 22                                          GAO-12-799 Overseas Rightsizing
                            In addition, some officials said that the final rightsizing reviews are not
                            widely disseminated, or that they do not know how to find the reviews.
                            Department of Homeland Security officials said that this is the first year
                            State has given them access to the final rightsizing review on State’s
                            intranet. Previously, while they provided comments on drafts, they were
                            not given access to the final document. In addition, a human resources
                            officer at one of the posts we visited stated that the training State
                            provides to new human resources officers does not mention the
                            rightsizing review. Several officials at the posts we visited said that they
                            first learned about their post’s rightsizing review in an announcement of
                            our visit to discuss rightsizing.


State Does Not Monitor      State has not clearly designated an office with responsibility for pursuing
Implementation of           implementation of rightsizing recommendations and does not track
Rightsizing                 recommendation status after completing a rightsizing review, making it
                            difficult for M/PRI to assess impact. 30 The legislation that established the
Recommendations and
                            rightsizing process states that the Secretary of State shall take actions to
Has Not Clearly             carry out the recommendations made in each rightsizing review.
Designated an Office
Responsible for Following   State officials have differing opinions about who should be responsible for
Up on Recommendations       implementing recommendations. M/PRI’s 2010 report to Congress states
                            that rightsizing decisions are implemented through the NSDD-38 process,
                            with the final decision resting with the chief of mission. However, one post
                            official stated that regional bureaus should have responsibility for taking
                            action on rightsizing recommendations because they make resource
                            allocations across posts. Other post and regional bureau officials, in
                            contrast, stated that individual posts have responsibility to take action on
                            rightsizing recommendations because the recommendations are
                            generally directed at the posts, not the bureau. Still other officials stated
                            that the posts and regional bureaus should share responsibility for
                            implementing the recommendations. Officials from one regional bureau
                            said that M/PRI’s recent rightsizing recommendations were often
                            developed in concert with the regional bureaus, which could prompt the


                            30
                               According to GAO’s standards for internal control in the federal government,
                            management should assess the quality of performance over time and ensure that the
                            findings of audits and other reviews are promptly resolved. Resolution could be through
                            correcting identified deficiencies, producing improvements, or demonstrating that the
                            findings and recommendations do not warrant management action. GAO, Standards for
                            Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.:
                            November 1999).




                            Page 23                                                  GAO-12-799 Overseas Rightsizing
bureau to follow up and encourage the post to implement the
recommendations. M/PRI began requiring posts to provide
recommendation implementation action plans in 2007 in response to one
of our previous recommendations. 31 However, officials said that they
stopped doing the plans after about a year. The time horizon for
implementing the rightsizing recommendations varied to such an extent
that frequent reevaluation of progress would have been required to
ensure compliance, which was impractical given M/PRI’s resource
constraints, according to M/PRI officials. Officials from both M/PRI and
the regional bureaus have noted that M/PRI does not have the authority
to compel implementation of rightsizing recommendations.

Some post officials noted that there is little incentive to implement
recommendations, particularly if the recommendations are to decrease
the workforce size. While posts may agree with rightsizing
recommendations in concept, the tendency is for posts to protect their
staffing levels and look for increases if possible. For example, an official
in Prague agreed with a rightsizing recommendation to conduct a
strategic regional review of staffing in former Warsaw Pact countries to
determine whether the number of positions could be reduced. He noted,
however, that it would be difficult to accomplish in practice because posts
lack incentive to cut positions. The post’s budget provides salaries and
other compensation for locally-employed staff, while State’s headquarters
budget provides U.S. direct-hire staff salaries. 32 As a result, posts lack
incentive to reduce U.S. direct-hire staff even though they are more costly
than locally-employed staff. In addition, the chief of mission in a particular
country has final authority over staffing decisions and may have priorities
that extend beyond rightsizing considerations.

Because it is unclear which entity is responsible for addressing
recommendations, and State does not monitor actions taken in response
to rightsizing reviews, State’s ability to report to Congress on the results
of the reviews is limited. No entity within State monitors implementation of
rightsizing recommendations. Some regional bureau officials have stated
that, since M/PRI makes the recommendations, it should be M/PRI’s
responsibility to track their implementation. M/PRI issues an annual report



31
 GAO-06-737.
32
     The post budget also provides some benefits to U.S. direct-hire staff.




Page 24                                                      GAO-12-799 Overseas Rightsizing
              to Congress 33 in which it lists the rightsizing reviews it has completed, the
              number of staff positions recommended for elimination, potential cost
              savings, and information on NSDD-38 decisions to add or abolish
              positions overseas. M/PRI’s fiscal year 2010 report to Congress stated
              that rightsizing is a tool in reallocating existing personnel resources and
              related costs and ensuring that requests for new resources are the
              minimum required to meet national goals and objectives. The report
              asserted that rightsizing had resulted in 838 fewer U.S. direct-hire
              positions between 2005 and 2010, decreasing future costs by an
              estimated $503 million per year for these positions. However, these
              numbers were simply an accounting of what M/PRI recommended, not
              what actually occurred. The report did not indicate whether rightsizing
              review recommendations had been implemented. M/PRI did not review
              those positions to determine if they were in fact eliminated, and, if so,
              whether they were reinstated later. In addition, the eliminated positions
              would not necessarily result in a net cost savings to the government. For
              example, although some U.S. direct-hire positions might be cut at one
              post, the persons occupying those positions could then be assigned to a
              position at a different post. M/PRI officials noted that they no longer
              calculate decreases in future costs because these numbers are
              problematic. M/PRI’s fiscal year 2011 report to Congress does not include
              these estimates.


              Rightsizing reviews play a crucial role in planning construction of new
Conclusions   diplomatic facilities overseas, can inform bureau and post decisions on
              staffing, and have prompted some posts to reassess staffing increases.
              M/PRI has improved the consistency of its rightsizing approach over the
              past several years. In addition, undertaking the rightsizing process can
              act as a check on growth in overseas staffing. A valuable component of
              the reviews is the recommendations made to improve post operations.

              The legislation that established the rightsizing process requires the
              Secretary of State to ensure that rightsizing recommendations are
              addressed; however, State officials have not developed a clear approach
              or designated an office to address, track, and report on such
              recommendations. No State office has responsibility for following up on


              33
               Congress requires State to submit an annual report on the rightsizing reviews that
              occurred during the previous 12 months, trends in overseas staffing, and the Secretary of
              State’s recommendations regarding such reviews.




              Page 25                                                  GAO-12-799 Overseas Rightsizing
                      recommendations, and posts or bureaus have limited incentive to
                      undertake an examination of recommendations and implement them if
                      they prove to have value. Further, any actions post officials take to
                      implement recommendations may not be known or documented outside
                      the post, which contributes to a substantial loss of information for State
                      officials. Although the reviews have certain limitations, including
                      competing priorities at posts, State has not yet realized the full potential of
                      its rightsizing reviews. To strengthen the impact of future rightsizing
                      reviews, State needs a process by which it can capture this information to
                      inform future decisions about the optimal number and mix of staff at posts
                      overseas to maximize the use of limited resources. Such a process would
                      also strengthen State’s ability to report to Congress on the
                      accomplishments of its rightsizing process.


                      To strengthen the effectiveness of the rightsizing effort, we recommend
Recommendations for   that the Secretary of State designate the appropriate entity or entities to
Executive Action      take the following two actions:

                      1. ensure that rightsizing recommendations are addressed, including
                         time frames for their evaluation and implementation, and

                      2. track and report on the actions taken to implement the
                         recommendations.


                      We provided a draft of this report to State for comment. In its written
Agency Comments       comments, reproduced in appendix II, State emphasized that correctly
and Our Evaluation    aligning staffing with foreign policy goals and ensuring the maximum
                      safety and efficiency of overseas operations remain top department
                      priorities. State also noted that, given the critical role rightsizing reviews
                      play in determining staffing levels in preparation for the construction of
                      diplomatic facilities overseas and informing bureau and post decisions on
                      future staffing needs, it is important that the rightsizing function be carried
                      out optimally and that rightsizing data and analysis be shared widely.

                      State indicated that it would carefully consider our recommendations, and
                      it described a number of actions it intends to take that could address
                      them. State noted that M/PRI will take the lead with regard to tracking
                      implementation of rightsizing review recommendations. For rightsizing
                      reviews initiated after August 1, 2012, as part of the ongoing second cycle
                      of reviews, M/PRI analysts will outline the extent to which specific
                      recommendations M/PRI provided in the previous rightsizing cycle have


                      Page 26                                           GAO-12-799 Overseas Rightsizing
been implemented, as appropriate. State proposed that this information
on progress related to implementation of M/PRI’s recommendations for
overseas posts be included in the yearly rightsizing report to Congress
beginning in December 2012. In addition, beginning in calendar year
2013, M/PRI will survey each mission 1 year after the completion of a
rightsizing review to assess progress with regard to the implementation of
recommendations. Posts will be asked to report on measures taken to
comply with recommendations, provide a time frame for doing so, or
explain changing conditions or policies that make compliance unfeasible.
State proposed to then include this additional information in the yearly
rightsizing report to Congress beginning in December 2013. Further,
State reported ongoing efforts to refine analytical tools used in the
rightsizing analysis and cited an intention to expand the number of
outreach sessions and training on rightsizing to classes at its Foreign
Service Institute.

State also provided technical comments that were incorporated, as
appropriate. We provided the Departments of Defense; Health and
Human Services; Homeland Security; and Justice; and the U.S. Agency
for International Development with relevant excerpts of the report and
requested technical comments, but none were provided.


We are sending copies of this report to interested congressional
committees. We are also sending copies of this report to the Secretary of
State. In addition, this report is available at no charge on the GAO
website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202) 512-8980 or courtsm@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 reported
are listed in appendix III.




Michael J. Courts
Acting Director, International Affairs and Trade




Page 27                                            GAO-12-799 Overseas Rightsizing
Appendix I: Scope and Methodology
             Appendix I: Scope and Methodology




             The objectives of this report were to examine (1) the consistency of the
             Department of State’s (State) approach to conducting rightsizing reviews
             and how its projections compare to actual staffing levels; (2) the focus of
             State’s rightsizing recommendations; and (3) the extent to which State
             uses its rightsizing reviews and monitors implementation of
             recommendations.

             Our scope included the 181 rightsizing reviews that State’s Office of
             Management Policy, Rightsizing and Innovation (M/PRI) completed
             between 2005 and 2011 that were provided within the time frame of our
             review. Each U.S. overseas mission has undergone at least one
             rightsizing review, according to M/PRI; a few have undergone two
             reviews.

             To obtain information on the consistency of State’s approach to
             conducting rightsizing reviews, the focus of rightsizing recommendations,
             and the extent to which State uses its rightsizing reviews and monitors
             implementation of recommendations, we reviewed agency documents—
             including M/PRI’s annual reports to Congress, and Office of Inspector
             General (OIG) reports—and interviewed officials from State and non-
             State agencies, both in Washington, D.C., and at overseas posts.
             Specifically, we discussed rightsizing with State officials in Washington
             from M/PRI, regional bureaus, the Bureau of Overseas Buildings
             Operations; the Bureau of Diplomatic Security; the Bureau of Consular
             Affairs; and the OIG. We also spoke with officials from non-State
             agencies in the United States and overseas, including the Departments of
             Commerce, Defense, Health and Human Services, Homeland Security,
             and Justice, and the U.S. Agency for International Development.

             To obtain more detailed information on the consistency of State’s
             approach to conducting rightsizing reviews, how projections compare to
             actual staffing levels, the focus of rightsizing recommendations, and how
             State uses and monitors implementation, we selected 14 reviews to
             analyze in greater depth, traveling to 3 of the posts and contacting the
             other 11 by telephone or email. We based our selections on interviews
             with M/PRI and State’s regional bureaus, the content of the rightsizing
             reviews, and the political and security conditions at post to ensure that we
             analyzed a range of experiences. In selecting posts, we considered the
             date the rightsizing review was completed, whether other U.S. agencies
             were present at post, geographic diversity and whether a post was
             located in a new embassy compound. We traveled to Prague, the Czech
             Republic; Sarajevo, Bosnia and Herzegovina; and Kuwait City, Kuwait to
             discuss their respective rightsizing reviews with post officials. While at


             Page 28                                         GAO-12-799 Overseas Rightsizing
Appendix I: Scope and Methodology




post, we interviewed officials in each embassy section, including the
office of the chief of mission, management, human resources, financial
management, facilities management, the regional security office, political
affairs, public affairs, and consular affairs, among others. We also met
with officials from other U.S. government agencies present at post. We
also communicated with management officers at the following 11
missions: Bangladesh, Bolivia, Burkina Faso, Ghana, Korea, Libya,
Mozambique, Pakistan, Paraguay, the Philippines, and Tunisia.

To obtain additional information on the consistency of State’s approach to
conducting rightsizing reviews, we reviewed agency documents—
including M/PRI’s annual reports to Congress, M/PRI’s guidance to posts,
and M/PRI’s guide to rightsizing for its analysts—and interviewed officials
from State and non-State agencies, both in Washington, D.C., and at
overseas posts. During our overseas site visits to the Czech Republic,
Bosnia and Herzegovina, and Kuwait, we discussed the rightsizing
process with the embassy section heads. To examine M/PRI’s
coordination with other U.S. government agencies, we spoke with officials
from non-State agencies in the United States and overseas. We also
discussed their process for allocating overseas staff with these officials. In
addition, we reviewed legislation related to the establishment of the Office
of Rightsizing within State and the intent of rightsizing. To examine how
M/PRI’s methodology has evolved in recent years, we reviewed 181
rightsizing reviews completed by M/PRI between 2005 and 2011. We
reviewed information papers on M/PRI’s methodological tools for
assessing both administrative staff and program staff, including the total
management ratio and diplomatic density.

To assess the extent to which State’s staffing projections compare with
actual staffing levels, we relied on two main sources of data: (1) the
staffing projections in the rightsizing reviews, which we manually entered
into a spreadsheet and (2) the actual staffing levels State extracted from
the Post Personnel database for us. To assess the reliability of the data,
we conducted a data consistency check and interviewed knowledgeable
State officials on how the data were collected and maintained, as well as
how the data were extracted for our use. We sent the staffing projection
data we manually entered to State for verification. We determined that the
data were sufficiently reliable for our purpose of comparing staffing
projections with actual staff levels as of December 2011. We obtained
181 rightsizing reviews from the Office of Rightsizing. We took the
following steps to reduce the number of reviews to 144 for the
comparison analysis:



Page 29                                          GAO-12-799 Overseas Rightsizing
Appendix I: Scope and Methodology




•   deleted entries with projection years prior to 2011;
•   deleted entries based on an older review if there were multiple
    reviews;
•   deleted entries with unreliable data. For example, State told us that
    Afghanistan personnel numbers were not reliable;
•   consolidated projections for bilateral and multilateral missions in the
    same country. For example, we combined projections for the U.S.
    missions to Belgium, the European Union, and the North Atlantic
    Treaty Organization into one entry;
•   consolidated projections for multiple posts in one country into one
    entry. For example, we consolidated projections for posts in Russia
    and posts in Poland; and
•   deleted entries with no projections.

To compare rightsizing projections to the actual staffing levels of 2011,
which is the year for which State provided personnel data, we
extrapolated 2011 staffing levels based on rightsizing review projections.
We assumed linear growth or decline in staffing levels. For example, if the
base year was 2008 and the projection year was 2013, we divided the
change in staffing levels by 5 (5 years between the projection year and
the base year) to get the annual change in staffing levels. We added the
changes for 3 years (3 years between the base year and 2011) to the
base-year staffing level. We then identified the number of reviews in each
category of differences between the actual and the projection: within 10
percent, 10 to 50 percent overprojection, 10 to 50 percent
underprojection, more than 50 percent overprojection, and more than 50
percent underprojection. Missions with overprojections had fewer staff
than projected, while those with underprojections had more.

To understand the factors that could lead to differences between the
actual and projected staffing levels, we identified posts with relatively
large differences by generating a composite index for each country,
taking into consideration the differences in absolute numbers and
percentages for the following three categories: (a) U.S. direct-hire desk
positions, which have the most significant impact on the physical space at
a post; (b) locally-employed staff, which comprise the majority of the
personnel overseas; and (c) country total, which captures all personnel at
a post . Based on the composite index, we identified five countries for
overprojection—Tunisia, Libya, Bolivia, Korea, and the Philippines—and
five countries for underprojection—Pakistan, Bangladesh, Ghana,
Mozambique, and Burkina Faso. The differences between projected and
actual total staffing levels as of December 2011 were over 10 percent for
all 10 countries. We then sent questions to the management officers in



Page 30                                          GAO-12-799 Overseas Rightsizing
Appendix I: Scope and Methodology




each country asking them the reasons for the differences. We
summarized their responses in the report.

To obtain information on the focus of recommendations made by State’s
rightsizing office, we reviewed 181 rightsizing reviews completed by
M/PRI between 2005 and 2011. During our overseas site visits to the
Czech Republic, Bosnia and Herzegovina, and Kuwait, we discussed the
rightsizing recommendations with the relevant section heads at each
post. We also discussed rightsizing recommendations with the
management officers in the other 11 missions that we selected for more
in-depth review.

To assess the extent to which State uses its rightsizing reviews and
tracks implementation of recommendations, we reviewed agency
documents, including M/PRI’s annual report to Congress, and interviewed
officials from State and non-State agencies, both in Washington, D.C.,
and at overseas posts to obtain information on how officials use the
reviews and monitor implementation. In addition, we reviewed our prior
work on rightsizing, embassy construction, and guidance on internal
controls.




Page 31                                      GAO-12-799 Overseas Rightsizing
Appendix II: Comments from the Department
             Appendix II: Comments from the Department
             of State



of State




             Page 32                                     GAO-12-799 Overseas Rightsizing
Appendix II: Comments from the Department
of State




Page 33                                     GAO-12-799 Overseas Rightsizing
Appendix II: Comments from the Department
of State




Page 34                                     GAO-12-799 Overseas Rightsizing
Appendix II: Comments from the Department
of State




Page 35                                     GAO-12-799 Overseas Rightsizing
Appendix III: GAO Contacts and Staff
                  Appendix III: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Michael J. Courts, (202) 512-8980 or courtsm@gao.gov
GAO Contact
                  In addition to the individual named above, Ming Chen, Debbie Chung,
Staff             Lynn Cothern, Martin de Alteriis, Mark Dowling, Etana Finkler, Leslie
Acknowledgments   Holen (Assistant Director), Heather Latta, Lisa Reijula, and Christina
                  Werth made key contributions to this report.




(320854)
                  Page 36                                        GAO-12-799 Overseas Rightsizing
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