C’nited States General Accounting Office J Report to the Chairman, Subcommittee ‘- on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives EXPORT PROMOTION Personnel Management r*.. 29 ‘$Issues in the U.S. and q Foreign Commercial .g” &mice ,,, ” ” ;A0 United States General Accounting Office Washington, D.C. 20548 National Security and International Affairs Division B-208993 March 16, 1990 The Honorable #JohnD. Dingell Chairman, Subcommittee on Oversight and Investigations Committee on Energy and Commerce House of Representatives Dear Mr. Chairman: This report responds to your request that we (1) update our 1987 review of personnel management issues in the U.S. and Foreign Com- mercial Service’ (UZGWX),the export arm of the International Trade Administration; and (2) identify any new personnel management issues affecting the provision of service to the U. S. business community. Since our 1987 review, the USMCS has taken several steps to improve the Results in Brief administration of its personnel system. Assignment, selection, and appraisal policies have been clarified or revised, and more documenta- tion is now being required to support personnel decisions. We did not find evidence of widespread morale problems as was the case in our 1987 review. In addition, senior officials we interviewed were optimistic about the prospects for further improvements in the management of the personnel system under the current Director General, who assumed her position in June 1989. However, some assignment and selection practices are questionable and continue to diminish the credibility of the U%WCSpersonnel manage- ment system. In addition, the commercial staff levels in Taiwan are not in compliance with the requirements of the Omnibus Trade and Compet- itiveness Act of 1988. Improvements made to the us&~& time-in-class and commissioning and tenure policy, and efforts to improve its performance appraisal process are addressed in appendix I. The Foreign Commercial Service was created in April 1980 to revitalize Background the U.S. trade promotion program in order to help U.S. firms meet ’ PersonnelManagementIs.wesm the ForeignCommercialService(GAO/T-NSL4DR7- I 1 H.u I I 1987). Page 1 GAO/NSIADI)(Ml Export Pnwwtion 5208993 Increasing competition in world markets. In 1982, the Foreign Corn! cial Service was combined with Commerce Department district offif form the LXFCS. The foreign operation, the subject of this report, h; about 150 commercial officers in 123 foreign posts in ti5 countries. Officers are typically assigned to 3- or 4-year tours of duty at foreit: posts. The officer corps is augmented by about 460 foreign service nationals. The US&FCSis headed by an Assistant Secretary level Director Gene!. The foreign service component of the USWZS,along with the foreign vices of seven other executive agencies and departments, is governe the Foreign Service Act of 1980, as amended. The US&FCSis a career . vice, similar to the Department of State’s Foreign Service and, under specific conditions, non-career limited appointments can be made to certain positions. In 1987, we found that e agency practices were not always followed in choosing people for OL.~ seas assignments; l selection decisions involving the use of limited appointees ivere not ac quately documented; l irregularities in the performance appraisal process occurred; and l potential problems in the management of the “up or out” or so-called time-in-class system existed. We concluded that, in aggregate, these problems had given the impre? sion of a breakdown in the management of the personnel system. low ered the morale of the officer corps, and diverted energy and attentio, away from the goal of assisting U.S. businesses to expand exports. We further concluded that the problems stemmed, in large measure, from the concentration of authority in the office of the Director Gener# rather than in a personnel system with real checks and balances. and from the lack of departmental oversight. In response to our findings, the Under Secretary for International Tra(: in an October 9, 1987, letter, provided a list of actions that had been taken to make U~&FCSpersonnel policies more transparent. consistent. and effective. In this report, we assess the impact of these changes on the US&FCSpersonnel management practices. . Page 2 GAO/NSLUMO-51 Expm Prom B2oS9s3 During our 198i review we received many complaints and allegations ,omeQuestionable regarding abusive assignment practices at the US&FCS.In examining assignmentPractices these complaints and allegations. we identified questionable practices. pound such as accepting bids from officers for new assignments scheduled to begin before their current tours were completed, routinely assigning officers to posts above and below their personal rank, and filling vacan- cies without advertising them. We also found evidence that some assign- ments may have been punitive in nature and were made outside of the formal paneling process. We concluded that changes in the assignments process were needed to improve officer morale and add credibility to this process. In response to our criticisms, the U~MCSissued a detailed assignments policy in December 1987 to help all officers better understand the over- seas assignment process. The CT= also established a system for appealing assignments. These steps were aimed at making the assign- ment process more systematic and transparent. However, these actions did not address one of the specific assignment practices that we had previously questioned-the acceptance of bids from officers for assignments scheduled to begin before their current tours were completed. This practice has resulted in tour curtailments and, coupled with the practice of granting tour extensions, continues to diminish the credibility of the assignment process. Some USkFcS officers told us that these two practices are used to manipulate the assignment process. Questionable Tour The ustwcs operations manual explicitly states that tour curtailments are not conducive to efficient management. In addition, in its written Curtailments comments to the House Government Operations Committee concerning our 1987 review, Commerce stated that curtailments are rarely given, and when they are, the reasons are required to be fully documented in the assignment panel minutes. USSYYS officials also told us that curtail- ments are mostly given to officers for medical or compassionate reasons, or for language training in advance of their arrival at new assignments. We found that tours had been curtailed in 25 of the 193 assignments that took place between April 1987 and July 1989, the period covered by our review. Eleven of the curtailments were made for documented medical or language training reasons and 10, as a USMCSofficial explained, although undocumented, were made for the “needs of the service.” Pqc 3 GAO/NSLUMO-61 Export fhmotion R-208993 However. 4 of these 25 curtailments did not appear to meet the start requirements because they were neither (1) granted for medical or ( passionate reasons. nor (2) justified in the assignment panel mmute< the official record for these decisions. In addition, other officers of equivalent rank were available to fill the new positions. Two of the four curtailed assignments were made in 1988 and invo[L the highly visible curtailments of 1 year for Senior Foreign Service officers in New Delhi, India, and Seoul, Korea, to enable them to ass\, senior commercial officer positions in Paris, France. and Ottawa, Cat ada, respectively. The records indicated that the officer in Sew Delh submitted his bid for a new post within weeks of his arrival in Seu Delhi for a 3-year assignment. The other two cases involved l-year curtailments of an Fo- 1 (GS- 15 equivalent) and an Fe2 (GS-14 equivalent) officer assigned to Stock- holm, Sweden, and Montreal, Canada, respectively, to fill positions 111 IMoscow, U.S.S.R., and Rome, Italy, respectively. Although there was no justification for these curtailments In the assig ment panel minutes, in subsequent discussions with CS&FCSofficials N were told that three of the four curtailments were made because of the officers’ unique language skills. We were offered no explanation for t h reassignment of the commercial officer from New Delhi to Pans. Although these curtailments could be a consequence of the small size I the service and the critical role played by language qualifications. the use of unjustified curtailments raises questions among other career officers about their possible misuse. In response to employee complaints about assignment practices. the CI: rent Director General sent a memo on August 1, 1989. to members of tl assignment panel stating that she was disturbed to hear reports that some assignments had already been “promised” to certain indlLVlduals prior to their consideration and decision by the assignment panel. She reminded assignment panel members to avoid any appearance that son assignments are predetermined. Questionable Tour A lack of consistency in implementing the assignment process c-an be demonstrated by the decision to extend the tour of the Semor (‘I jmmer- Extension cial Officer in Bonn to 9 years. At the time of this extension ’ ( )c.rober 1988), USB~FCS policy on tour lengths stated that the maximum r( )llr-s ar Page 4 GAO/NSLAD9&51 Expm Promr 8208993 overseas posts would be .5 years, except in “rare” cases. While the regu- lations recognize that on occasion tours may need to be extended. the granting of a fixed 4-year extension was unprecedented. Some officers told us that this extension was an example of how the assignments pro- cess is sometimes manipulated. Based on our review of pertinent documentation concerning the Bonn assignment, we question the reasons cited in granting this extension. The minutes of the assignment panel meeting justifying this decision stated that the officer was given a 4-year extension because of the need to provide continuity in an important market prior to European Commu- nity integration in 1992. However, the records also showed that three other qualified Senior Foreign Service officers were available to fill the position- including one proficient in German and assigned to another European Community post. We found nothing in the files to indicate the assignment panel analyzed the possible implications of this decision and its future impact on the assignment process. Our analysis also indicated that the LS&FCS did not announce that special consideration would be given to officers stationed in Europe. In response to the widespread criticism regarding the extension of the Bonn Senior Commercial Officer’s tour to 9 years, which occurred prior to her tenure, the Director General approved a new policy on tour length in October 1989. The new policy allows extensions of tours of duty that go beyond 5 years only in unusual circumstances and only in l-year increments. Because this new policy does not allow for multiyear exten- sions, the current Director General believes the assignment process is now more predictable. We agree that this revised policy is an improve- ment over the prior policy. Selection Process raise questions about the credibility and transparency of the overall Needs Improvements selection process. Our review showed that (1) established guidelines con- cerning the appointment of non-Foreign Service officers to certain posi- tions were not always followed, (2) no guidelines have been established for an exchange program with other International Trade Administration units, and (3) a questionable selection process was used by a prior Direc- tor General in his last days in office. . Page 5 GAO/NSLUHM361Export Promotion 8208993 C’seof Limited In certain situations. mdividuals who are not career Foreign Senice officers may be appointed to fill a specific position for a limited peric Appointments Does Not of time. These are called non-career limited appointments. The I.S~Y~FC: Always Comply With authorizing legislation restricts the use of non-career limited appoint Guidelines ments to fill Senior Foreign Service positions to situations where no career officer with the necessary qualifications is available and the applicant is uniquely qualified for the position. In addition. Commerc Department guidelines require that career officers and career candid: be given preference over these appointees in filling vacancies. In our 1987 review we found that non-career limited appointees were selectt to fill four of the seven Senior Foreign Service positions for which bot career and non-career appointees had competed. In most cases, there was no documentation explaining why limited non-career individuals were selected in lieu of career officers. In addition, there was one assignment of a non-career appointee to a Senior Foreign Service position for which only his name and no others were submitted to the assignment panel for consideration. Career officers told us that these practices illustrate how the personnel syster was manipulated to fill positions with preselected candidates. In response to our findings, the US&FCSintroduced a new documentation requirement, a “Certificate of Need,” to support the need for and quali fications of each limited appointee. Since our last review, USB~M=Shas substantially reduced its use of non- career limited appointment to fill overseas positions. During our last review, 40 non-career limited appointees were serving overseas. As of September 1989, that number had been reduced to nine. Although most of these non-career appointments and excenswns we examined were made in accordance with existing agency procedures, three appointments and two tour extensions were not. In one appoint- ment, w&FCS records indicated that other career officers or career candi dates were available to fill the positions without the curtailment of prio assignments. In a second case, no certificate of need was completed to document the reasons for hiring the limited appointee. In the third case. the appointee did not meet the minimum language requirement for the position. In addition, we also noted that two non-career limited appointrus were extended even though the records indicated that qualified c.artr*r Page 6 GAO/NSlAD-W-61 Expwt Promo 0208993 officers at equivalent rank were available and had bid to fill the positions. Jidelines Needed for The primary source of limited appointees for u%Fcs positions is the Internatio Trade Administration-c’sm Exchange Program. Fourteen rcgram Used to Hire of the 33 Liibkcs non-career limited appointees employed during the time .mited Appointees From frame covered b-y our review were selected from the exchange program ther ITA Units between US&FCSand domestic ITA units. According to L’WFCSofficials, this program was designed to allow civil service employees of ITA domes- tic offices to work in U%FCSoverseas assignments and to allow US&FCS .. Foreign Service officers to work in assignments within the United .__,. q%ik States. However, no policy or guidelines have been developed to define .<’ the purpose, scope, or eligibility requirements for the rr~-us&m $f Exchange Program, even though it isused as a major avenue of entry of limited appointments into the Foreign Commercial Service. We believe the Fisk of guidelines for the exchange program has contrib- uted to questions being raised other career officers about the vali&ty of the selection process. lieve a written policy would enhance the credibility of this program. &estionable Selection g the selection of Qp individuals serving ere about to expire raises questions about Process **; ihty of t$ selection process. G-3+& I) tor General to career~t&e status at the FP- 1 res. In mid-1988, the ts for an unspecified process, seven candidates were. considered qualified for the positions. The two candidates hired were%nked third and%xth among the seven candidates competing for the positions. The rankings are based on a comprehensive assessment of applicant qualifications given by the us&~cs testing center. Selections are usually based on rank order. On April 4, 1988, before hiring the two candidates, the Director of the USB~FCS’ personnel office sent a letter to all qualified candidates compet- ing for the positions. The letter encouraged them to compete for lower FP-2 (GS-14 equivalent) positions, and said that budget constraints made it.?unlikely that U%FCSwould hire career candidates at the FP- 1 Page7 I GAO/NSUKMM1Export Promotion 5208993 level in the foreseeable future.” The letter further stated that “It C;LI be guaranteed that even the highest-ranking FP- 1 level candidates would receive an offer of appointment.” Four candidates accepted this advice and agreed to eliminate themstl. from competition at the higher level. After these four ranked candid< removed themselves from competition, FP-1 jobs were offered to the lower-ranked candidates who were serving limited appointments. Th, two candidates accepted offers at the FP-1 level. Another candidate ~3 was also offered a position at this level declined the offer. In response to our inquiries about these selection procedures, I'SC(IFC-c: officials involved in the selection process told us that there was no SIL nificant change in the LBLWCSstaffing situation during the entire pro- cess-from applicant assessment to final selection-that could justif, the need to use these procedures. They also said that, to their knowl- edge, this was the first time that these procedures had been used in tIIf selection process. The Omnibus Trade and Competitiveness Act of 1988 directs the .\mer Level of Commercial can Institute of Taiwan (AIT), the unofficial organization that promotes Staff in Taiwan Does U.S. interests in Taiwan, to employ a number of commercial personnel Not Comply With commensurate with the number of LJSWISpersonnel permanently assigned to the U.S. diplomatic mission in South Korea. AIT has only Requirements of Law three full-time professionals performing commercial duties. The I--..$. Embassy in South Korea, by comparison, has six. Because of this staffing shortfall, AIT reported that it is unable to ade- quately service the large number of requests for assistance it receives from the U.S. business community and to monitor important trade dev,e opments in Taiwan, the United State’s fifth largest trading partner. Commercial staff levels in Taiwan are not funded nor determmed by tht u.%Fcs but by AIT, which receives a separate appropriation from Con- gress to fund its operations. LJSLW~Scommercial officers are separated from the service before filling MT positions. An official from the AIT tol(l us that the Institute does not presently have the resources to hlre any additional commercial staff and that Congress or the Department of Commerce needs to give more money to the Institute for this purpose. Page 8 GAO/NSIAtHO-$1 Expm Fromc, 8208993 To safeguard the integrity of the Foreign Commercial Service and main- mclusion tain a highly motivated officer corps, the CS&FCS needs more consistency in its personnel management system. Substantial progress has been made since our last review. However, exceptions to stated policies and the lack of clear policies in some areas continue to detract from the per- sonnel management system. The L'S&FCScan take additional steps to make the assignment and selection processes more transparent and pre- dictable. In addition, the staffing shortfall at AIT has not been ade- quately addressed. To improve the administration of the US&M=S personnel management sys- :ecommendations tem, we recommend that the Secretary of Commerce direct the Cnder Secretary of the International Trade Administration to: l revise cs&FcS assignment policies on curtailments to require a written justification that explains why it is in the best interests of the service to curtail an officer’s assignment when other career officers are available to fill the position, and l develop guidelines outlining the purpose, scope, and selection require- ments for the ITA Exchange Program. In addition, the Executive Director of the American Institute of Taiwan needs to: l either seek through appropriate channels additional resources from Congress to ensure that commercial staff levels at the American Insti- tute of Taiwan are equal with those in South Korea, as required by the Omnibus Trade and Competitiveness Act of 1988, or seek legislative relief from this requirement. As requested, we did not obtain formal agency comments on this report; however, we discussed our findings with appropriate Commerce Depart- ment and American Institute of Taiwan officials and incorporated t heu- comments where appropriate. As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from the date it is issued. At that time, we will send copies to the Secretary of Commerce and appropriate congressional committees and make copies available to other interested parties upon request. Page 9 GAO/NSlAIMO-61 Export Pwmotion 5208993 This report was prepared under the direction of Man I. Slendelowitz Director. International Trade and Finance Issues, (202) Yi5-4812. Thl principal GAO staff members responsible for this review were Benjam Nelson. Assistant Director, Stephen Lord, Evaluator-in-Charge. and t: bara Wooten, Evaluator. Sincerely yours, Frank C. Conahan Assistant Comptroller General Page 10 GAO/NSL4MO-6I Expan f’romc: Page 11 GAO/NSLUMO4l Expm -ion ChangesMade in Time-In-ClassPolicy One of the unique features that distinguishes the Foreign Service frc its Civil Service counterpart is the “up or out” principle. Its obJectKc to ensure continued high quality staffing in U.S. missions overseas. I tally, an officer must be promoted through merit selection m a certa length of time or else be involuntarily separated from the Foreign St, vice, or as commonly referred to, “TICed out,” with TIC representing “time-in-class.” In our last review, we said the C‘S&FCS could lose a large number of gc, experienced officers over a short period of time under its existing tin in-class policy, which is the most stringent of the Foreign Sewice agts ties. We concluded that the number of people hired at the upper le\,e: had limited the promotion opportunities for officers who began their career in entry- or mid-level positions, and the impact of such hiring practices would be most acute at the ~3-2 level. We also noted that LV~ could find no justification for the us&M=s’TIC policy, and that LS&FCS management should thoroughly review this policy. Such a review. in response to changing needs, is envisioned in the Foreign Serv3ce Act. which allows for changes in time-in-class limits. US&KS officials agree to review the policy and make changes, if needed. Reviews of the L&U time-in-class policy were completed in June 1988 and October 1989. The June 1988 review noted that several of the most senior and expe- rienced Senior Foreign Service officers may be TICed out before reach ing mandatory retirement age. All officers at the Minister-Counselor level were promoted to this level after serving only three of the eight years allowed in the Counselor position (the rank just below Minister- Counselor). When promoted, they in effect “lost” 5 years of TIC that they would have had if they had remained at the Counselor level. Thu these officers’ TICS will expire before they gain the minimum years of service needed to earn immediate retirement benefits. The October 1989 review also noted that in the years 1994 through 1996, the US&KS will lose 27 officers due to the expiration of their timt in class. Of these, 22-or approximately one-third of the entire class- are projected to be from the ~3-2 level. Also, substantial additional loss+ are likely to occur in succeeding years. The review concluded that thest losses will be of significant concern to management because a large per centage of experienced, relatively senior US&FCS officers ~111be lost within a period of a few years, and many of these officers w11Inot be eligible for retirement when they are TICed out. . Page12 GAO/NSIADSOSI Expm Prom Appendix I Changes Made ln TlmelnClaa.9 Policy The policy was revised in ,January 1990 to correct the weaknesses iden- tified in the studies. Table I. 1 shows the new time-in-class guidelines used by the CSWCS. ble 1.1: Maximum time-In-Class Limits Maximum Lenqth of Service Under Personal Rank Former Policy New Policy Career Mlntster 4 Mlnlster-Counselor z 13 years’ combined experience at Mlnlster- Counselor 8 Counselor and Counselor level with no more than 8 In Counselor level FS-1 and FS-2 15 years with no more 20 years’ expenence In FS-1 through FS-4 than 8 years at the levels, with no more than 15 years in any FS-2 level class FS.3 5 FS-4 5 USMIS career candidates serve an apprenticeship period in the Foreign ChangesMade in Service to demonstrate their suitability for career status as commis- 2ommissioning and sioned Foreign Sewice Officers. The UEMXSCommissioning and Tenure renure Policy Board determines whether these officers have performed at a satisfac- tory level and demonstrated the required level of competence and growth potential. Under the former policy, which was changed in October 1989 in response to concerns we expressed to U~MCSmanagement, the key crite- rion for favorable judgment by the Board was the demonstrated poten- tial to perform effectively as a Foreign Service Officer in a normal range of assignments up through the FS-1level. There was, however, a conflict with this criterion: Board members were also directed not to disadvan- tage applicants for commission and tenure who served in “nontradi- tional” positions and thus were not able to demonstrate a full range of traditional duties in overseas posts. The conflicting guidance thus poten- tially allowed candidates with little or no export promotion experience to be commissioned and tenured as a Foreign Service Officer before dem- onstrating the potential to perform effectively in a normal range of usgr~csassignments. We note that the Foreign Commercial Service was created in 1980 because Congress was not satisfied with the State Department’s overseas trade promotion efforts. Specifically, a 1977 investigation by the House Committee on Government Operations stated that the State Department had failed to recruit employees with strong commercial backgrounds to perform commercial functions. Page 13 GAO/NSIAD90-51 Export Pmnotion Appendix I ChangesMade in lImeIn- Policy In October 1989, the L’SUTS commissioning and tenure policy was revised. Under the new policy, the Board may determine that a cart candidate has demonstrated the required potential while serving m nontraditional position. Thus, the candidate is not assured that serl in a “nontraditional” position is sufficient for tenure review, as wa.. case under the previous policy. Furthermore, the Director General 3, that US&FCSmanagement is now notifying tenure candidates in nont tional positions that they should seek opportunities to demonstrate export promotion capabilities in traditional positions before facing I ure determinations. In our earlier review, we found irregularities in the performance Changes Made in the appraisal process and noted that the USMYS’instructions in this are;! Performance were inadequate in that they did not spell out the duties and respon< Appraisal Process ities of rating and reviewing officials and the procedures to be folloJf Accordingly, we suggested that the LJ~ adopt new appraisal proct dures. CS$FCSofficials agreed with our assessment. They have develc new appraisal guidelines for members of Commerce’s Foreign Servict better clarify and identify individual accountability in the rating pro- cess. This policy guidance was issued on April 1989. Page 14 GAO/NSL4D9O-SIExpm Prnc pendix II bbjectives,Scope,and Methodology Our observations on the CS&FCS' overseas assignment process are based on our review and analysis of the results of the 33 LBFCS assignment panels held between April 1987 and July 1989. Over this time period, the panel made about 180 assignments. Assignment panel membership generally includes: (1) the Director General as Chair, (2) the Assistant Secretary for Trade Development, (3) the Assistant Secretary for Inter- national Economic Policy, (4) the Deputy Assistant Secretary, Office of Foreign Operations, and (5) the Assignments Officer, Office of Foreign Service Personnel. We also examined Office of Foreign Service Personnel records, reports, and memoranda. Most of the personnel actions we ana- lyzed for this review predate the tenure of the current Director General. In addition, to obtain information and perspective about how the CS&FCS' personnel management system operates, we interviewed various us&Fcs officials, including senior career officers and staff in the Office of For- eign Service Personnel and the Office of Foreign Operations. We also interviewed officials from the International Trade Administration’s office of Trade Development and International Economic Policy and offi- cials from the American Institute in Taiwan, the U.S.’ representational office in Taiwan. ITA'S possible overobligation of fiscal year 1987 funds, which you also requested GAO to examine, is being reviewed by our General Counsel and will be addressed in a separate report if significant deficiencies are found. Our review was conducted in accordance with generally accepted gov- ernment auditing standards from May 1989 to October 1989. . (463626) Page16 GAO/NSLAD9@6lExponRomotion c Requests for copies of GAO rqxmts shamtd bu: 4~12 to: U.S. General Accounting Office . $, . :
Export Promotion: Personnel Management Issues in the U.S. and Foreign Commercial Service
Published by the Government Accountability Office on 1990-03-16.
Below is a raw (and likely hideous) rendition of the original report. (PDF)