Overseas Presence: More Work Needed on Embassy Rightsizing	 
(27-NOV-01, GAO-02-143).					 
								 
The Department of State is leading an interagency assessment of  
staffing needs in  U.S. embassies and consulates to improve	 
mission effectiveness and reduce security vulnerabilities and	 
costs by relocating staff. This process, called "rightsizing,"	 
was initiated in response to the recommendations of the Overseas 
Presence Advisory Panel (OPAP). In the aftermath of the August	 
1998 bombings of U.S. embassies in Africa, OPAP determined that  
overseas staffing levels had not been adjusted to reflect	 
changing missions and requirements; thus, some embassies and	 
consulates were overstaffed, and some understaffed. OPAP	 
recommended a rightsizing strategy to improve security by	 
reducing the number of embassy staff at risk. In addition, OPAP  
recommended the establishment of a permanent committee to	 
regularly adjust the U.S. presence, and the adoption of explicit 
criteria to guide decisions on the size and location of posts.	 
The State led interagency committee conducted pilot studies at	 
six embassies in 2000 to (1) develop a methodology for assessing 
staffing at embassies and consulates over the next 5 years, and  
(2) recommend necessary adjustments to staffing levels at the	 
embassies studied. The interagency committee formed teams  that  
visited six U.S. embassies in Amman, Jordan; Bangkok, Thailand;  
Mexico City, Mexico; New Delhi, India; Paris, France; and	 
Tbilisi, Georgia. However, the	pilot studies did not result in a
staffing methodology at all embassies and consulates, as had been
anticipated. The interagency committee said it was not practical 
to develop explicit criteria for staffing levels at all posts	 
because each post has unique characteristics and requirements.	 
Contrary to OPAP's recommendations, the committee's report also  
questioned the need for rightsizing and establishing a permanent 
committee to adjust U.S. presence. The report did recommend the  
relocation of the regional finance centers in France and	 
Thailand, and it identified instances where additional study was 
needed. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-143 					        
    ACCNO:   A02488						        
  TITLE:     Overseas Presence: More Work Needed on Embassy	      
Rightsizing							 
     DATE:   11/27/2001 
  SUBJECT:   Agency missions					 
	     Embassies						 
	     Facility security					 
	     Interagency relations				 
	     Personnel management				 
	     Consulates 					 
	     Labor force					 
	     Bangkok (Thailand) 				 
	     Mexico City (Mexico)				 
	     New Delhi (India)					 
	     Paris (France)					 
	     Tbilisi (Georgia)					 
	     Amman (Jordan)					 

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GAO-02-143
     
Report to the Ranking Minority Member, Committee on Foreign Relations, U. S.
Senate

United States General Accounting Office

GAO

November 2001 OVERSEAS PRESENCE

More Work Needed on Embassy Rightsizing

GAO- 02- 143

Page 1 GAO- 02- 143 Embassy Rightsizing

November 27, 2001 The Honorable Jesse Helms Ranking Minority Member
Committee on Foreign Relations United States Senate

Dear Senator Helms: During 2000, an interagency effort led by the Department
of State began to assess staffing of U. S. embassies and consulates to
determine whether there were opportunities to improve mission effectiveness
and reduce security vulnerabilities and costs by relocating staff. This
process, called ?rightsizing,? was initiated in response to the November
1999 recommendations of the Overseas Presence Advisory Panel (OPAP). 1 In
the aftermath of the August 1998 bombings of U. S. embassies in Africa, OPAP
determined that overseas staffing levels had not been adjusted to reflect
changing missions and requirements; thus, some embassies and consulates were
overstaffed, and some were understaffed. OPAP viewed the rightsizing of
overseas posts as an essential component of an overall program to upgrade
capabilities of embassies and consulates, and it recommended that
rightsizing be a key strategy to improve security by reducing the number of
embassy staff at risk. In addition, OPAP recommended the establishment of a
permanent committee to regularly adjust the U. S. presence to U. S. goals
and interests, and the adoption of explicit criteria to guide decisions on
the size and location of posts. The September 11 terrorist attacks and
subsequent reports of planned attacks against U. S. embassies have further
highlighted the importance of rightsizing as a tool to lessen security
vulnerabilities.

To move the rightsizing process forward, an interagency committee led by the
Department of State conducted pilot studies at six embassies in 2000 to (1)
develop a methodology for assessing staffing at all other embassies and
consulates over the next 5 years, and (2) recommend adjustments, if
necessary, to staffing levels at the pilot study embassies. In response to

1 America?s Overseas Presence in the 21st Century, Report of the Overseas
Presence Advisory Panel (U. S. Department of State, Nov. 1999). OPAP was
established by the Secretary of State following the 1998 embassy bombings in
Nairobi, Kenya, and Dar es Salaam, Tanzania, to consider the organization of
U. S. embassies and consulates.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 02- 143 Embassy Rightsizing

your request, we are providing information on the scope of work and results
of the pilot studies.

The interagency committee formed teams comprising representatives from about
10 agencies that visited U. S. embassies in Amman, Jordan; Bangkok,
Thailand; Mexico City, Mexico; New Delhi, India; Paris, France; and Tbilisi,
Georgia, between March and May 2000. These diplomatic posts were selected
because of their size, complexity, and broad geographical coverage. The
interagency teams did not have written guidelines, and according to agency
representatives, the teams did not systematically assess staffing at the
pilot posts. The teams focused on obtaining the views of the ambassador and
agency officials at each post regarding the need for rightsizing, and on
obtaining information concerning what each agency does at the post, how each
agency coordinates its programs, and how its staff are used. The teams spent
2 to 5 days at each location- too little time, according to study
participants, to fully assess workload issues or to consider alternative
ways of doing business.

The six pilot studies did not result in a methodology for assessing staffing
levels at all embassies and consulates, as had been anticipated. In a June
2000 report to the Department of State?s Under Secretary for Management, the
interagency committee said it was not practical to develop a methodology
with explicit criteria for determining overseas staffing levels at all posts
because each post has unique characteristics and requirements. Contrary to
the recommendations of the Overseas Presence Advisory Panel, the committee?s
report also questioned the need for rightsizing and establishing a permanent
committee to adjust U. S. presence as OPAP had recommended. The report did
recommend the relocation of the regional financial centers in Paris, France,
and Bangkok, Thailand. In addition, it identified instances where additional
study was needed to determine whether staff levels should be adjusted. If it
is feasible to reduce staff levels at some embassies, for example by
relocating some activities to the United States or regional centers, we
believe it may be possible to reduce security vulnerabilities. In early
August 2001, the Department of State issued its Final Report on Implementing
the Recommendations of the Overseas Presence Advisory Panel. 2 State?s
report said that the interagency committee did not produce

2 Report pursuant to the Conference Report accompanying the Departments of
Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 2001, as enacted in PL 106- 553. Results in Brief

Page 3 GAO- 02- 143 Embassy Rightsizing

major recommendations for change, except for the relocation of the regional
financial center in Paris. The report did not comment on other conclusions
or recommendations made by the study teams concerning the pilot study
embassies. But it stated that the administration will make rightsizing a
priority goal. On August 25, 2001, the President announced that the
rightsizing of embassies and consulates would be one of 14 initiatives in
the President?s Management Agenda. 3 The Office of Management and Budget is
currently formulating a strategy for leading this initiative. In view of
ongoing terrorist threats, the rightsizing of embassies and consulates has
become a critical issue for the U. S. government.

OPAP was established by the Secretary of State following the August 1998
bombings of U. S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania.
The panel was formed to consider the future of U. S. overseas
representation, to appraise its condition, and to develop practical
recommendations on how best to organize and manage embassies and consulates.
Citing weaknesses in security, infrastructure, technology, human capital,
and management, OPAP concluded that the U. S. overseas presence was
?perilously close to the point of system failure.? OPAP made recommendations
in eight areas, 4 including that of creating the right size and location for
U. S. overseas presence. A key OPAP theme stressed that a rightsizing
process should consider the relationship between embassy size and security.
Specifically, OPAP recommended that rightsizing be used to reduce the number
of people at risk overseas. 5

OPAP made five additional recommendations regarding the size and location of
overseas posts:

 Rightsize the U. S. overseas presence; reduce the size of some posts,
close others, reallocate staff and resources, and establish new posts where

3 This agenda is the President?s strategy for improving the management and
performance of the federal government, announced on August 25, 2001. 4 The
eight areas are security, size and location of posts, management of overseas
buildings, human capital, technology, consular services, administrative
services, and the role of the ambassador.

5 The Report of the Accountability Review Boards on the Embassy Bombings in
Nairobi and Dar Es Salaam (Department of State, Jan. 1999) also concluded
that the United States should consider reductions in the size and number of
its embassies as a means of reducing security vulnerabilities. Background

Page 4 GAO- 02- 143 Embassy Rightsizing

needed to enhance the American presence where the bilateral relationship has
become more important.  Form a new Interagency Overseas Presence Committee-
a permanent

committee to regularly adjust U. S. presence to U. S. goals and interests. 
Adopt explicit criteria to guide size and location decisions.  Support the
concept of small posts.  Encourage ambassadors to initiate rightsizing.

OPAP also recommended that some administrative services be performed at
regional centers or in the United States- actions that would lessen the need
for administrative staff at some posts, thereby reducing security
vulnerabilities.

In February 2000, President Clinton directed the Secretary of State to lead
an interagency effort to implement OPAP?s recommendations. In a March 2000
report to the Congress, 6 the Department of State said that the interagency
committee planned to complete pilot studies by June 2000 to assess staffing
levels, to recommend necessary changes at the study posts, and to develop
decision criteria applicable to subsequent rightsizing reviews to be
conducted at all overseas posts over a 5- year period. 7 State anticipated
that reviews at half the posts (about 130 posts) would be completed within 2
years.

In early 2000, State organized an interagency rightsizing committee
representing key agencies, including the Departments of Agriculture,
Commerce, Defense, Transportation, Energy, Justice, the Treasury, and State;
the intelligence community; and the U. S. Agency for International
Development (USAID). Pilot studies were conducted at six embassies- Amman,
Jordan; Bangkok, Thailand; Mexico City, Mexico; New Delhi, India; Paris,
France; and Tbilisi, Georgia, from March to May 2000. Teams with
representatives from State, the intelligence community, Defense, Justice,
USAID, and the Treasury visited all six posts; officials from other agencies
made some of the trips. These embassies were selected because

6 Report on Overseas Presence (Department of State, Mar. 2000) pursuant to
section 607 of the Admiral James W. Nance and Meg Donovan Foreign Relations
Authorization Act, Fiscal Years 2000 and 2001, as enacted in the
Consolidated Appropriations Act for Fiscal Year 2000 (Public Law 106- 113).

7 State maintains a worldwide network of operations at about 260 overseas
posts and supports the activities of about 30 other U. S. agencies. Scope of
Work for the

Pilot Studies

Page 5 GAO- 02- 143 Embassy Rightsizing

of the complexity of their missions and because they represented broad
geographical and agency coverage.

The Department of State told us that the interagency teams did not have
written guidelines. Moreover, according to agency representatives who
participated in the studies, the teams did not systematically assess
staffing at the pilot posts. According to the former interagency committee
leader, the teams attempted to use the criteria that OPAP suggested for
making staffing decisions, but found that the criteria were too broad to
guide determinations on specific post size. 8 Prior to travel, the teams
reviewed each embassy?s Mission Performance Plan describing objectives and
priorities. In addition, the Department of State directed the teams to draft
a list of general questions that linked staffing to the goals and objectives
laid out in each embassy?s Mission Performance Plan, as a discussion guide.
9 At each embassy, the teams received a briefing from the ambassador and
then concentrated on interviewing key agency representatives, to obtain
information and opinions on agencies? staffing levels and workload.

The teams spent a few days at each post. For example, a team was in Tbilisi
for 2 days, Paris for about 3 days, and Mexico City for 5 days. Some team
members and representatives of the interagency rightsizing committee told us
that 2 to 5 days at an embassy was too little time to permit detailed
analysis of workload or to fully explore alternative ways of conducting
business, such as regionalizing operations or outsourcing administrative
functions. 10 This is partly attributable to the size and complexity of
embassy operations at the posts visited. Four of the embassies- Bangkok,
Mexico City, New Delhi, and Paris- are among the largest and most complex in
the world. 11 Though smaller, the remaining two embassies both have
substantial numbers of U. S. and foreign national employees, from multiple
agencies. The ambassador who led three of the pilot studies told us that a
comprehensive review of staff levels would take

8 OPAP provided suggested criteria dealing with issues in five areas: U. S.
strategic goals, overriding interests, threat factors, host- country
environment, and adjustment factors. 9 The Department of State was unable to
locate the list of questions used at each pilot study post. 10 OPAP
recommended the increased use of regional operations for administrative
functions, to reduce posts? staffing requirements and to save money. 11 The
embassy in Paris, for example, reported about 700 employees on board as of
September 30, 2000, including about 300 U. S. and 400 foreign national
employees.

Page 6 GAO- 02- 143 Embassy Rightsizing

much longer than the 2 to 5 days the teams spent at the embassies, and that
the pilot studies were not designed for that purpose. However, he believed
that the length of visit was sufficient to identify potential functions that
warranted additional study to determine if staffing levels should be
adjusted.

The interagency committee?s June 2000 report to the Under Secretary of State
summarizing results of the pilot studies concluded that it was impractical
to develop a staffing methodology that would be applicable to all posts, as
OPAP had recommended, because no two posts are sufficiently similar. In
addition, the report questioned the need for additional rightsizing of
overseas posts, stating that agencies had adjusted staff levels during the
1990s in response to budget constraints to ensure that only the most
essential overseas functions were performed. As a result, the report
concluded that agencies had already performed rightsizing.

The report also concluded that planned rightsizing reviews of additional
posts over 5 years should not be conducted, as the benefits of rightsizing
may not outweigh the costs of conducting the reviews. Regarding OPAP?s
recommendation to establish an interagency board to review staff levels at
overseas posts, the committee?s report concluded that an interagency
advisory board could be helpful as a forum to discuss programmatic issues
with major overseas staffing implications and to provide informal and
nonbinding advice to agencies and ambassadors. However, some agencies
opposed the establishment of an interagency board, even on an advisory
basis, because they believed it was unnecessary and would limit agency
independence in making staffing decisions.

Although the interagency committee did not recommend major changes in staff
levels as a general theme in its June 2000 report, it did recommend that the
regional financial service centers in Bangkok and Paris be relocated to the
United States, 12 and that several other potential opportunities for staff
level reductions be explored. In addition, the report raised concerns about
heavy embassy staff workloads, an issue not

12 Discussion regarding the need to consolidate the Department of State?s
financial service centers dates back to the early 1990s. In October 1999,
prior to the pilot studies, the Congress directed State to determine whether
some or all of the functions of the Paris Center could be transferred to
State?s Financial Service Center in Charleston, South Carolina. In December
2000, State decided to relocate most of the functions of the Paris center
and certain functions of the Bangkok center to Charleston. Results of the
Pilot

Studies

Page 7 GAO- 02- 143 Embassy Rightsizing

specifically addressed by OPAP. According to the committee?s report, an
expanded American role in promoting and protecting U. S. interests overseas
has imposed a dramatic and often overwhelming burden of work and
responsibility on embassy staff. The committee found a common perception at
each post that ?Washington?s demands for reports, demarches, and other
initiatives are numerous, un- prioritized, unrealistic, and insatiable.? The
report also noted concerns about the ambassador?s ability to manage embassy
staff and resources, noting that several ambassadors had indicated
reluctance to challenge staffing levels of nonState agencies.

The summary report also endorsed the initiation of separate interagency law
enforcement pilot studies that the Attorney General had recommended in April
2000. These studies were intended to determine a methodology for deciding
the appropriate type and number of law enforcement personnel to be assigned
overseas, and to review the law enforcement policy role and staffing
requirements at U. S. diplomatic missions. As part of this pilot, the law
enforcement working group visited Mexico City, Bangkok, and Paris. State
officials are unclear as to how the results of the working group will
eventually affect staffing levels or rightsizing efforts. 13 They noted,
however, that law enforcement agencies have significantly increased their
presence at a number of overseas posts in recent years.

Table 1 summarizes the observations and conclusions for each post contained
in the summary report on the pilot studies.

13 The law enforcement working group identified several factors that should
be considered in determining the size and composition of law enforcement
staff at overseas posts. These included transnational crime threat, non-
crime control policy interests, host- nation law enforcement capability,
host- nation commitment, geographic area of coverage, the role of U. S. law
enforcement at post, the constraints of resources and security, and
overlapping missions. In March 2001, State cabled posts having significant
narcotics or crime control programs, or those whose countries posed
significant narcotics or crime threats to the United States, asking them to
produce comprehensive law enforcement coordination plans covering 3 years.
These plans were to be developed in line with post mission plans, an
approach to rightsizing endorsed in State?s August 2001 response to OPAP.

Page 8 GAO- 02- 143 Embassy Rightsizing

Table 1: Key Observations and Conclusions for Each Embassy Visited U. S.
Embassy Observations and Conclusions

Amman, Jordan The post does not offer any reasonable opportunity for staff
reductions, and an expansion of law enforcement and military assistance
staff levels may be needed. USAID?s ability to manage a vastly expanded
program with no increase in U. S. direct hire staff may be a model for other
posts. Bangkok, Thailand In the interests of decreasing overseas presence,
the regional financial service center,

employing 8 U. S. direct hires, 4 contractors, and 103 foreign service
national staff, should be relocated to the United States. The Department of
Defense has a substantial presence at the embassy (more than 300 U. S. and
foreign national staff), and a senior Defense official intends to review the
staffing of certain components to identify potential opportunities for
consolidation. A separate rightsizing study of law enforcement agency
representation should be considered. Mexico City, Mexico All mission
staffing should be reviewed, particularly administrative functions, to
determine if it

would be appropriate to convert some American positions to local national
personnel. Development of a personnel classification system should be
expedited to abolish or reprogram some foreign national positions. Also, a
separate study of law enforcement agency staffing and activities should be
conducted. New Delhi, India Modest growth in staffing levels is expected.
The post would be a good choice for a separate

project on improving information technology. Paris, France The ambassador
believes that embassy staffing could be cut. The regional financial service

center, employing about 120 personnel, should be relocated to the United
States. The post should prepare a plan to implement its suggestion to
centralize processing for all euro currency- based vouchers in the region.
This project should result in the savings of several administrative staff
positions within European posts. Tbilisi, Georgia Although workload is high,
staff levels are reasonable, given the limitations posed by an

already overcrowded embassy building, security concerns, and weak logistical
support. Post size tripled between 1998 and 2000.

Source: GAO analysis of the pilot studies? summary report.

Regarding staffing in Paris, the interagency committee?s report noted that
the ambassador had testified to the Congress that staff could be
significantly reduced, but had not recommended which specific positions
should be eliminated. 14 The report recommended that the ambassador identify
specific positions for elimination by September 2000. In addition, an
informal ?lessons learned? paper, prepared by the study team, suggested that
staffing in Paris should be the subject of urgent, interagency review with a
view toward reducing work demands, privatizing some administrative
positions, and moving some functions to the United States. The ambassador
who led the pilot study team said that reduction of work demands could be
achieved if the White House, through the Office of Management and Budget,
established relative policy priorities

14 Testimony of the Honorable Felix G. Rohatyn, U. S. Ambassador to France,
before the House Committee on Appropriations, Subcommittee on Commerce,
Justice, State, and Judiciary, on April 12, 2000.

Page 9 GAO- 02- 143 Embassy Rightsizing

and questioned, and perhaps overrode, staffing decisions made by individual
agencies. The study team also cited examples of work that may not need to be
performed in Paris, or that could be privatized, including some translation
services and reporting on information available in public sources. In
addition, the team noted that there may be ways to reduce the amount of
embassy staff time spent in supporting the large number of official
visitors.

After the pilot studies were completed, the ambassador at the U. S. Embassy
in Paris asked headquarters agencies to review workload requirements, with a
view toward reducing workload so that rightsizing could take place. In
October 2000, State provided guidance to the ambassador on work requirements
and priorities for the embassy. In November 2000, the ambassador said that
this guidance would not permit him to reduce staff, as it would not be fair
to cut staff and ask the remaining staff to take on an undiminished
workload. Although the ambassador expressed disappointment in this effort to
identify potential workload and staff reductions, he reiterated his position
that staff reductions were needed in view of security concerns at the post,
and in the interest of achieving operational efficiencies. The concern
regarding embassy security in Paris was attributable to the absence of
?setback? from public streets, making the embassy highly vulnerable to
terrorist attack.

According to Department of State officials, the departure of the ambassador
in late 2000, the November 2000 U. S. elections, and the change in
administrations detracted from follow- up on the potential rightsizing
actions in Paris, as well as on the rightsizing committee?s observations and
conclusions concerning the other pilot posts. However, the current
administration has made the embassy rightsizing process a priority by
including it as one of the President?s management initiatives, and it may
revisit the observations of the pilot studies as a part of this process.

State?s August 2001 Final Report on Implementing the Recommendations of the
Overseas Presence Advisory Panel agreed with the recommendations of OPAP to
rightsize the overseas presence, rather than with the positions taken in the
interagency committee?s report on the pilot studies. State?s final report
also stated that the administration will analyze and review overall U. S.
government presence and will develop a credible and comprehensive overseas
staffing allocation process. However, it did not include a timetable for
implementation or indicate whether more reviews of staffing issues at
specific posts will be conducted. State?s report

Page 10 GAO- 02- 143 Embassy Rightsizing

mentioned only one specific action taken that would directly affect staff
levels at the pilot posts- the relocation of the Paris Regional Financial
Service Center to Charleston, South Carolina, proposed by Congress prior to
the pilot studies. State did not indicate any additional rightsizing actions
taken or planned for the embassy in Paris, nor did it comment on any of the
other five pilot posts.

On August 25, 2001, the President announced that the rightsizing of
embassies and consulates would be one of 14 initiatives in the President?s
Management Agenda. The Office of Management and Budget is currently
formulating a strategy for leading this initiative.

In view of the September 11 terrorist attacks, the rightsizing of embassies
and consulates has become more important than ever. Regrettably, the pilot
studies conducted in 2000 do not provide a strong basis upon which the
administration can pursue rightsizing, as they did not result in a
methodology or blueprint for rightsizing around the world. Nevertheless, the
studies did suggest that there may be opportunities to reduce embassy size,
for example by moving some activities to the United States or to regional
centers. If these suggestions prove feasible, their implementation could
reduce security vulnerabilities at some overseas posts and could potentially
free up resources to meet foreign policy needs elsewhere. We are currently
planning work to further examine the suggestions raised by the pilot
studies, as well as other issues to be considered as the administration
implements the embassy rightsizing initiative.

The Director of the Department of State?s Office of Management Policy and
Planning, which has overall responsibility for rightsizing initiatives in
the department, provided oral comments on a draft of this report. He said
that the department agrees with the report?s conclusion and, on the whole,
agrees with the report?s observations regarding the pilot studies. He said
that the department is working closely with the Office of Management and
Budget on rightsizing activities.

We contacted officials in the Departments of State, Defense, the Treasury,
Justice, and Commerce, and in the USAID, who participated in the interagency
rightsizing committee effort, to discuss how the pilot studies, were carried
out and the studies? observations and results. We also obtained internal
reports on the studies from some of these agencies. We interviewed
Department of State personnel involved in the rightsizing Conclusion

Agency Comments Scope and Methodology

Page 11 GAO- 02- 143 Embassy Rightsizing

studies, including the former Under Secretary of State for Management; the
Director of the Office of Management Policy and Planning, which had
responsibility for the pilot studies; and the former ambassador who led the
pilot studies in Mexico City, Paris, and Tbilisi, and who was a co- chair
for the overall pilot study exercise. We were unable to interview the other
cochair who prepared the June 2000 interagency report summarizing results of
the pilot studies, as she is retired and unavailable. To explore the
relationship between rightsizing and embassy security in OPAP?s report, we
interviewed the Chairman of OPAP. We conducted our review from April to
September 2001, in accordance with generally accepted government auditing
standards.

We are sending copies of this report to interested congressional committees
and to the Secretary of State. We will make copies available to others upon
request. Please contact me at (202) 512- 4128 if you or your staff have any
questions about this report. Major contributors to this report are John
Brummet and Lynn Moore.

Sincerely yours, Jess T. Ford, Director International Affairs and Trade

(320039)

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