oversight

The Use of a Decentralized Audit Operation for Performing Reviews of United States Activities Overseas

Published by the Government Accountability Office on 1977-04-22.

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

                         DCCUBENT   ESURE
01921 -   A1192181]

[The Use of a Decentralized Audit Cperatinn for Performing
Reviews of United States Activities Overseau]. 1D-77-35;
B-188834. April 22, 1977. 3 pp.

Report to Rep. Clement J. Zablocki, Chairman, House Committee on
International Relations; by Elmer E. Staats, Comptroller
General.
Issue Area: Internal Auditing Sisterms (200).
Contact: International Div.
Budget Function: Miscellaneous: Financial Management and
    Information Systems (1002); International Affairs (130).
Congressional Relevance: House Committee on International
    Relations.

         The advantages and disadvantages of the use of a
decentralized audit operation for performing reviews of U.S.
activities overseas ere investigated.   Findings/Conclusions:
The General Accounting Office presently has three branches at
overseas locations: the European Branch, with 45 professional
and 5 support personnel; the Far East Branch, with 40
professional and 6 support personnel; and the Latin American
Branch, with 15 professional and 2 support personnel. The
permanent staffs overseas are periodically supplemented, when
required by c&alcad, with temporary duty erscnnel from the
U.S. Temporary duty personnel join project teams hi-' are
composed principally of the experienced overseas staff. The
ability to recruit and ffectively perform the necessary
overseas assignments us.nq temporary duty perscnnel would be an
almost impossible task. ILe additional cost of maintaining the
modest overseas staffs are more than overcome by the producing
of audits that are acre efficient, effective, and timely than
could be expected with a temporary duty approach. The
decentralized crganizaticn provides quicker and better service
on high-priority tasks that have close deadlines; better
relations with associate organizations and goverament officials
in the areas covered; improved professional expertise gained
from firsthand and continuous experience; and the maintenance of
higher employee morale than would be possible operating on a
centralized basis. There have been few, if any, disadvantages to
maintaining the small overseas staffs. (SC)
                 COMPTROLLER GECNERAL OF THE UNItTE STATES
                            WASHINN D.C. W.S.




O   B-188834
                                                       April 22, 1977


    The Honorable Clement J. Zablocki
    Chairman, Committee on
     International Relations
    Bouse of Representatives
    Dear Mr. Chairman:
         This is in response to your letter of March 22, 1977,
    regarding the use of a decentralized audit operation for
    performing reviews of U.S. activities overseas. You stated
    that, since GAO uses a decentralized audit operation in
    performing its reviews and evaluations of U.S. activities
    overseas, yoc would like to have our views on the advantages
    and'disadvantages of this type of operation.
         GAO presently has three branches at cverseas loc-ations--
    the European Franuh with 45 professional and 5 support
    personnel is headquartered in Frankfurt, Germany, and covers
    audits in Europe, Africa, and the Near East to the eastern
    border of Iran.   The Far East Branch with 40 professional
    and 6 support personnel is headquartered in Honolulu with
    a s3uboffice n.Bangkok, Thailand and covers audits of U.S.
    activities throuqghout he Pacific Ocean and Asia to the
    western borders of Afqhanistan and Pakistan. The Latin
    Amierica Branch with 15 pofessional and 2 support personnel
    is headquartered in Panama City, Panama, and i responsible
    for audits in Cent:al and South America, the West Indies
    and Mexico.

         The permanent sffs overseas are eriodically
    supplemented, when required by the workload, witth temporary
    duty personnel selected from our headquarters and rgional
    offices. Cn the average, we find that as much as 25 staff
    years of assistance are necessary on a temporary duty basis.
    The personnel selected for temporary duty juin project teams
    which are composed principally of our experienced overseas
    staffs in order to maintain the fundamental advantages
    inherent in resident staffs.




                                                             ID-77-35
B-188834




     In fiscal year 1976, the 100 professional staff
members and the temporary duty supplements erformed about
135 different assignments for the International, Logistic3
and Communications, Procurement and Systems Acquisition,
and Federal Personnel and Compensation Divisions. The ability
to recruit and effectively perform these assignments overseas
using temporary duty personnel only would have, in our opinion,
been an almost impossible task. The existence f offices
overseas st.uffed with auditors who have made a personal commit-
ment to live in a foreign climate results in a competence and
capability not otherwise obtainable. The permanent staffs
overseas are committed to becoming familiar wit   the customs,
language, protocol, and complexities of United States and
host-country functions involved in U.S. programs subject
to audit. This essential capability would be very difficult
to imbue in stateside staffs recruited to perform on a temporary
duty basis in an overseas environment.

     Further, having staffs available in key locations
overseas faci3itater; the efficient performance of the many
assignments. In the absence of overseas offices, it would
be necessary to Individually recruit and create over 100
individual teams of 2 to 10 auditors to perform the work
tt   is now assigr.ed to the overseas branches. Staffs
committed for tours overseas also provide us with necessary
insight into local conditions, which enhances the ability.
of the General Accounting Office to maintain continuous
oversight over the many activities conducted overseas.

      Our experien e hs been that there he    been few, if
arty, disadvantages to maintaining modest staffs overseas to
perform essential assignments. It is a fact that overseas
operations are more expensive than performing the assignments
on a temporary duty basis with stateside personnel. We
firmly believe, however; that tis cost is more than over-
come with audits that are more efficient, effective, and
timely than could be expected from a temporary duty approach.

     To summarize, we believe that a decentralized organization
provides quicker and better service on high-priority tasks
that have close deadlines; better relations with associate
organizations and government officials in the areas covered;
improved professional expertise gained from firsthand and



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B-188834


continuous experience; and the maintenance of higher employee
morale than would be possible operating on a centralized
basis.

     We would be pleased to discuss in greater detail some
of the more general matters discussed above.

                                     'y'ou

                             Comptroller General
                             of the United States




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