Overseas Presence: Cost Analyses and Performance Measures Are	 
Needed to Demonstrate the Full Potential of Providing Embassy	 
Support Remotely (02-MAY-06, GAO-06-479).			 
                                                                 
The President has emphasized the importance of safety,		 
efficiency, and accountability in U.S. government staffing	 
overseas by designating the achievement of a rightsized overseas 
presence as a part of the President's Management Agenda. One of  
the elements of rightsizing involves relocating certain 	 
administrative support functions from overseas posts to the	 
United States or regional centers overseas, which can provide	 
cheaper, safer, or more effective support. This report (1)	 
reviews State's efforts in providing administrative support from 
remote locations, (2) identifies the challenges it faces in doing
so, and (3) outlines the potential advantages and concerns	 
associated with providing support remotely.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-479 					        
    ACCNO:   A52980						        
  TITLE:     Overseas Presence: Cost Analyses and Performance Measures
Are Needed to Demonstrate the Full Potential of Providing Embassy
Support Remotely						 
     DATE:   05/02/2006 
  SUBJECT:   Accountability					 
	     Americans employed abroad				 
	     Consulates 					 
	     Cost control					 
	     Embassies						 
	     Labor force					 
	     Personnel management				 
	     Staff utilization					 
	     Strategic planning 				 
	     Support services					 
	     President's Management Agenda			 

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GAO-06-479

     

     * Report to the Chairman, Subcommittee on National Security, Emerging
       Threats, and International Relations, Committee on Government Reform,
       House of Representatives
          * May 2006
     * OVERSEAS PRESENCE
          * Cost Analyses and Performance Measures Are Needed to Demonstrate
            the Full Potential of Providing Embassy Support Remotely
     * Contents
          * Results in Brief
          * Background
          * A Number of State Bureaus Provide Embassy Support Remotely, with
            More Efforts Planned
               * State's Regional Bureaus Offer Remote Support in a Variety
                 of Ways
                    * Two Regional Bureaus Have Regional Service Centers
                    * Some Regional Bureaus Use Other Methods of Remote
                      Support
               * State's Functional Bureaus Also Provide Remote Support
               * State Developed an Operational Plan for Rightsizing
          * State Department Faces Challenges in Its Plans to Increase
            Embassy Support from Remote Locations
               * Limits on Non-American Staff Responsibilities Might Hinder
                 Remote Support
               * Existing Regulation Could Hinder Use of Technologies in
                 Providing Remote Support
               * Funding Structures Complicate Remote Support Efforts
               * Reluctance to Change Hampers Remote Support Efforts
          * Providing Support Remotely Offers Potential Advantages, but Cost
            Analyses and Performance Measures Are Needed
               * Support Provided from Remote Locations Could Offer
                 Advantages in Mission, Cost, and Security
                    * Providing Support from the United States
                    * Providing Support from an Overseas Regional Center
                    * Providing Support Using Non- American Staff Rather than
                      Americans
                    * In Addition to Advantages of Remote Support, Several
                      Concerns Exist
               * Cost Analyses and Performance Measures Are Needed
                    * Cost Analysis Would Be Useful in Determining Whether to
                      Provide Support Remotely
                    * Performance Measures and Feedback Mechanisms Needed
                    * Lack of Awareness of Remote Support Opportunities
                      Limits Their Use
          * Conclusions
          * Recommendations for Executive Action
          * Agency Comments and Our Evaluation
     * Scope and Methodology
     * Comments from the Department of State
          * GAO Comments
     * GAO Contact and Staff Acknowledgments
     * PDF6-Ordering Information.pdf
          * Order by Mail or Phone

Report to the Chairman, Subcommittee on National Security, Emerging
Threats, and International Relations, Committee on Government Reform,
House of Representatives

May 2006

OVERSEAS PRESENCE

Cost Analyses and Performance Measures Are Needed to Demonstrate the Full
Potential of Providing Embassy Support Remotely

Contents

Tables

Figure

May 2, 2006Letter

The Honorable Christopher Shays Chairman Subcommittee on National
Security, Emerging Threats,   and International Relations Committee on
Government Reform House of Representatives

Dear Mr. Chairman:

The Department of State (State) operates more than 260 embassies,
consulates, and other posts in about 180 countries and employs more than
11,000 Foreign Service officers and over 35,000 Foreign Service nationals.
Operating under a decades-old management model, most of these posts are
still directly responsible for carrying out the majority of the
administrative functions, such as processing vouchers for payment,
necessary for their day-to-day operations. The President has emphasized
the importance of safety, efficiency, and accountability in U.S.
government staffing overseas by designating the achievement of a
rightsized overseas presence as part of the President's Management
Agenda.1 One of the elements of rightsizing is to relocate certain
administrative support functions from overseas posts to the United States
or to regional service centers overseas, which can reduce costs, improve
services, and lessen the overall U.S. government footprint.

On January 18, 2006, the Secretary of State announced her vision for the
future of the Department of State, including plans for the global
repositioning of the United States' official overseas presence. These
plans, which include moving hundreds of positions to critical posts in
regions such as Africa, South and East Asia, and the Middle East, call for
new thinking on how State conducts its overseas operations. In particular,
State intends to increasingly provide support functions remotely, as is
presently done through regional service centers in Frankfurt, Germany, and
Fort Lauderdale, Florida, which provide management support to overseas
posts in areas such as human resources and financial management.

Over the past several years, we have provided the Subcommittee with
reports and testimonies to assist in the oversight of staffing and
operations at U.S. posts overseas. In order to ensure that the U.S.
government's goals in rightsizing its overseas presence are being met, you
requested that we review actions to expand the use of support from remote
locations; the progress that the U.S. government is making on rightsizing,
including activities of the Office of Rightsizing within State; and the
implementation of measures to reduce the duplication of support functions
between State and the U.S. Agency for International Development (USAID).
This report (1) reviews State's efforts to provide administrative support
from remote locations, (2) identifies the challenges it faces in doing so,
and (3) outlines the potential advantages and concerns associated with
providing support remotely. Later in 2006, we will report on the
activities of the Office of Rightsizing and the implementation of measures
to consolidate State and USAID support activities at overseas posts.

To address our objectives, we reviewed State's documents on its
initiatives to provide support remotely and the foreign affairs
regulations for carrying out administrative functions overseas. We spoke
with officials at State's regional and functional bureaus in Washington,
D.C., and met with senior management and regional staff at the Florida
Regional Center in Fort Lauderdale, Florida, and the Financial Services
Center in Charleston, South Carolina. We also met with senior management,
regional staff, and locally employed staff that provide remote support
from the Regional Support Center in Frankfurt, Germany. We met with
ambassadors, deputy chiefs of mission, management officers, and other U.S.
embassy staff, including locally employed staff, at four posts that
receive remote support. We chose the posts located at Belize City, Belize;
Helsinki, Finland; Nassau, Bahamas; and Valetta, Malta, because they
represent a sample of both small and medium-sized posts that receive
remote support. We also visited Mexico City to talk with embassy officials
about how the U.S. mission to Mexico has been rightsized and how the
embassy provides support to consulates throughout the country. In
addition, we met with officials in Paris, France, to discuss the financial
support that locally employed staff provide to posts in Africa. Also, we
conducted telephone interviews with management staff at 20 overseas posts
regarding their reporting on rightsizing efforts to Washington and, when
applicable, regarding remote support they receive. Lastly, we reviewed
post profiles and cost data associated with the placement of American
personnel overseas. We performed our work from June 2005 until April 2006
in accordance with generally accepted government auditing standards. (For
a detailed discussion of our scope and methodology, see app. I.)

Results in Brief

State has a number of regional and domestic offices that provide some
management support remotely to overseas posts in areas such as financial
management and human resources, and it plans to increase the use of remote
administrative support provided to overseas posts. For example, State's
Bureau of Western Hemisphere Affairs provides direct support to 16 small
posts in its region through routine visits by staff based in a domestic
regional service center in Fort Lauderdale, Florida, while State's Bureau
of European and Eurasian Affairs provides consultative support through
occasional post visits from staff on an as-needed basis from an overseas
regional center in Frankfurt, Germany. Moreover, the Bureau of Resource
Management provides a number of financial services, from its location in
Charleston, South Carolina, to posts worldwide. Additionally, in late
2005, State announced that it would identify and remove functions that do
not need to be performed at post and could instead be performed by
personnel based in the United States or at regional offices overseas from
seven posts in dangerous locations, where it is crucial to have as few
personnel as possible due to security concerns. State also plans to
eventually remove such functions from other overseas posts.

State faces several challenges in trying to expand its use of remote
support. In particular, restrictions on what management functions
non-American staff can perform might limit the extent to which services
can be provided remotely, as could a regulation that requires original
invoices for payment. In addition, current funding arrangements for the
various regional bureaus and posts might limit opportunities for remote
support to be offered from one region to another, while a reluctance to
change further constrains opportunities to expand remote support. State is
currently assessing whether or not certain regulations could be waived or
changed and how institutional challenges might be overcome.

There are several potential advantages to providing administrative support
to posts from remote locations-including cost savings, enhanced security
for American personnel, and improved quality of administrative support-as
well as several outstanding concerns, according to officials whom we spoke
with both in Washington and overseas. For example, one officer located in
the United States currently provides financial management support to
multiple posts in the Western Hemisphere, thereby eliminating the need for
an American financial management officer at each individual post served.
Officials said that eliminating the need for American officers overseas
could result in cost savings. In addition, according to State officials,
potential cost benefits and other efficiencies might result from making
greater use of regional service centers overseas and by empowering locally
employed staff to perform support functions traditionally carried out by
U.S. officers overseas. Officials at the posts we visited said they were
generally satisfied with the level of support and customer service
received from a regional or domestic service center. However, they
expressed some concerns relating to the quality of remote support,
particularly regarding the timeliness of regional officers' responses to
post issues. State has not conducted analyses of the potential cost
savings associated with providing remote support and has not used
systematic performance measures and customer feedback mechanisms to assess
the quality of support provided. In addition, many officials both in
Washington and overseas are unaware of the full breadth of support offered
by regional service centers and said they would be more willing to use
them if the cost and quality of available services was documented. State
officials in Washington agreed that tools, such as customer service
feedback, would be useful in marketing remote support; and, during the
course of our work, one regional bureau has begun to develop them.

As State implements its plan for expanding remote support, it would be
useful for State to concurrently assess the advantages and address the
concerns of providing embassy support from remote locations, including the
potential impacts on cost, service delivery, and security for American
personnel. Therefore, we recommend that the Secretary of State take the
following three actions:

o Identify and analyze the various costs associated with providing support
at individual posts versus at regional service centers in the United
States or overseas;

o Develop systematic performance measures and feedback mechanisms to
measure the quality and customer satisfaction of support services provided
remotely; and

o Use the cost analyses and feedback on quality and customer satisfaction
to

o inform post management of which services could be offered remotely, the
various costs involved, and the quality of services offered;

o consider ways to improve the quality of remote support, when necessary;
and

o determine whether additional posts, including posts that are requesting
new U.S. officer positions in management functions, might be logical
candidates for receiving remote support.

We also encourage State to continue reviewing challenges to providing
support remotely and finding ways to overcome them.

We provided a draft of this report to the Department of State for comment.
State generally concurred with the report's substance and findings and
indicated that it is taking steps to implement all of our recommendations.
State also provided technical comments, which have been incorporated
throughout the report, where appropriate.

Background

Following the 1998 embassy bombings in Nairobi, Kenya, and Dar es Salaam,
Tanzania, a number of reviews called for the reassessment of overseas
staffing levels and suggested a series of actions to adjust the overseas
presence, including relocating some functions to the United States and to
regional centers, where feasible.2 The White House, Congress, the Office
of Management and Budget (OMB), and GAO have emphasized rightsizing as
vital to ensuring that the overseas presence is at an optimal and
efficient level to carry out foreign policy objectives.3 GAO's rightsizing
framework, which has been adopted by OMB and State, consists of three
factors-mission, security, and cost-that should be weighed when making
rightsizing decisions. In addition, the President's Management Agenda
(PMA) has identified rightsizing as one of the administration's
priorities. One way to provide efficient administrative support to
overseas posts is by consolidating and centralizing service delivery
within a geographic area through regional service centers located overseas
and within the United States.4 Two objectives of regional service centers,
which address the three factors of the rightsizing framework, are to
improve administrative support to overseas posts (mission) and to reduce
staffing overseas whenever possible (cost and security).

Within the State Department a number of bureaus and offices are
responsible for the administration and oversight of regional operations
overseas. The Under Secretary for Management is responsible for
implementing the PMA initiatives and, in particular, working with the
White House and OMB on the initiative focused on rightsizing the U.S.
government's overseas presence. The congressionally mandated Office of
Rightsizing5 leads State's efforts to develop mechanisms to better
coordinate, rationalize, and manage the deployment of U.S. government
personnel overseas. In addition, the Office of Global Support Services and
Innovation in the Bureau of Administration coordinates State's efforts to
improve the delivery of support services to all overseas posts.  This
office partners with service providers at posts and State's various
regional6 and functional bureaus to move support work to safer and
lower-cost regional and central locations.

The operation of U.S. embassies and consulates overseas requires basic
administrative support services for overseas personnel, such as financial
management and personnel services. At the post level, the management
section, which is normally headed by a management counselor or management
officer, is responsible for carrying out the administrative functions at a
post. The typical management section of an embassy consists of several
U.S. Foreign Service officers who are in charge of financial management,
human resources, information management, and general services. They are
assisted by locally employed staff7 who serve as voucher examiners,
cashiers, and financial and personnel assistants and specialists. Smaller
posts have not historically had full management sections with trained,
experienced U.S. citizen officers filling each of the management
positions, such as a financial management officer or human resources
officer.8 Therefore, many times these posts rely on remote support from
the United States or a regional service center to obtain administrative
support.

A Number of State Bureaus Provide Embassy Support Remotely, with More
Efforts Planned

State has a number of overseas regional bureaus that provide management
support remotely in a variety of ways. State's functional bureaus also
provide remote support. As a part of its rightsizing efforts, State
developed plans to regionalize support by identifying all
nonlocation-specific functions9 and removing them from overseas posts,
starting with critical danger posts, where it is crucial to have as few
personnel as possible due to security concerns.

State's Regional Bureaus Offer Remote Support in a Variety of Ways

Two regional bureaus provide remote support from a regional service center
staffed with a cadre of management staff assigned to various posts. Other
regional bureaus assign management staff at larger posts to assist
neighboring posts that lack the management staff necessary to carry out
all of the post's administrative functions.

Two Regional Bureaus Have Regional Service Centers

State's Bureau of Western Hemisphere Affairs and the Bureau of European
and Eurasian Affairs offer a variety of personnel and other administrative
support services remotely to their posts through regional service centers.
Both regional service centers-the Florida Regional Center in Fort
Lauderdale, Florida, and the Regional Support Center in Frankfurt,
Germany-have a director who oversees operations and reports to the
executive director of each respective regional bureau in Washington, D.C.
Both centers' buildings also house various other regional support
activities that are managed by the respective functional bureaus, such as
a regional procurement office that provides purchasing and contracting
services to posts.

o The Florida Regional Center provides financial management and human
resources support to about 16 posts located in Latin America and the
Caribbean. The posts that receive remote support in these functions do not
have a full-time, American financial management officer or human resources
officer; rather, the U.S. post management officer at these posts serves
multiple roles10 and spends a certain percentage of his or her time on
various management activities, including the certification of vouchers and
some personnel functions, with assistance from locally employed staff.
However, the management officers might not be able to provide enough
personnel or financial support due to their lack of experience or training
in the function as well as time constraints, according to officials at the
posts we visited. To compensate for these limitations, a regional human
resources or financial management officer, based in Fort Lauderdale,
visits each post for which he or she is responsible on an agreed schedule
that is outlined in a memorandum of agreement between the post and the
Florida center. For example, during a typical visit, a regional human
resources officer ensures that the post is in compliance with local labor
laws and regulations, evaluates post personnel operations and practices,
addresses employee morale issues, conducts salary and benefits surveys,
provides guidance on post training needs, and performs a host of other
higher level human resources duties, as necessary. A regional financial
management officer's responsibilities include reviewing post management
practices to prevent waste, fraud, and mismanagement; conducting spot
reviews of vouchers, purchase orders, and petty cash transactions; and
providing assistance in post budget and financial plans. The Florida
center also has one regional information management officer involved in a
pilot program to provide support to two posts that do not have a permanent
information management officers assigned, as well as three information
management specialists and two office management specialists that provide
additional support to posts throughout the region, when necessary.

o The Regional Support Center in Frankfurt, Germany, provides management
assistance in financial management and human resources to about 40 posts
throughout Europe and Eurasia; however, it does this on a more
consultative, as-needed basis than the Florida center. The Frankfurt
center's focus is to promote self-reliance in the full range of financial
and personnel activities at European and Eurasian posts. It provides
management oversight to posts and assists staff in developing various
managerial skills through oversight visits and training. Many of the posts
the center serves do not have full-time human resources officers or
financial management officers, and a number of them are staffed by junior
or first-tour management officers who need occasional assistance or
training in core management functions. Regional support is provided
through occasional post visits from regional officers and senior, locally
employed staff located at the Frankfurt office, as well as through
training provided at the Frankfurt center.

Table 1 provides a breakdown of the number of regional management staff,
the number of posts they cover, and the types of support they provide from
Fort Lauderdale and Frankfurt.

Table 1: Support Offered by Regional Service Centers

                                        

Type of support provided    Florida Regional     Regional Support Center,  
     by regional managers        Center, Fort          Frankfurt, Germany     
                                  Lauderdale       
                            Primary service        Consultative support,      
                            provider for the       training, guidance, and    
                            function at post; post oversight; post visits     
                            visits six times per   once or twice per year     
                            year.                  depending on post needs.   
Number of regional                              
officers/Number of posts                        
supported by function                           
Financial management     Two officers/6 Posts   Six officersa/30 Posts     
Human resources          Four officers/16 Posts Three officersb/32 Posts   
Information management   One officer/2 Posts    Zero officers/0 Posts      

Source: Department of State.

aThree American direct hire and three locally employed staff.

bTwo American direct hire and one locally employed staff.

Table 2 provides data on the four posts that we visited that receive
financial and personnel support from a regional service center in Fort
Lauderdale or Frankfurt and the various characteristics of those posts,
including the total number of staff, the number of local staff that carry
out financial and personnel functions, the posts' budgets, and the number
of annual visits received from a regional manager. Fort Lauderdale and
Frankfurt currently provide administrative support remotely to small and
medium-sized posts, which in some instances removes the need for an
American officer to carry out those support functions at post.

Table 2: Characteristics of Posts Receiving Remote Support

                                        

       Overseas post       Belize City, Nassau,           Helsinki, Valletta, 
                                 Belize Bahamas             Finland     Malta 
Staffing at post       
Total staff at post              121     236                 134        99 
(all agencies)                                                   
Americans                         33     177                  58        32 
Locals, Non-Americans             88      59                  76        67 
American officers in                                             
functions at posts                                               
Human resources                    0       0                   0         0 
Financial management               0       0                   0         0 
Locally employed staff                                           
at functions in posts                                            
Human resources                    2       2                   2         1 
Financial management               4       6                   4         3 
Post administration                                              
Total budget size of    $3.7 million   $16.4                $9.3      $3.8 
post, 2006                           million             million   million 
Number of vouchers             3,200   4,305               5,000     1,550 
processed, 2005                                                  
Regional support                                                 
Regional service            Fort             Frankfurt 
center                   Lauderdale                    
Visits in financial                6       6                   1         1 
management/year                                                  
Visits in human                    6       6                   1         1 
resources/year                                                   

Source: Department of State, as of March 2006.

Some Regional Bureaus Use Other Methods of Remote Support

State's other regional bureaus use mechanisms other than regional centers
to support posts' administrative needs remotely. In particular, the
Bureaus of African Affairs, East Asian and Pacific Affairs, Near Eastern
Affairs, Western Hemisphere Affairs, and South and Central Asian Affairs
use partnering arrangements to provide remote support from larger posts or
embassies to small or medium-sized posts that do not have resident
American human resources or financial management officers. For example,
because Embassy Phnom Penh does not have a resident human resources
officer, the management staff at Embassy Bangkok provides support by
reviewing human resources operations and providing ad hoc advisory
assistance at least twice per year. In Mexico, the Embassy in Mexico City
provides financial management support to about nine consulates throughout
the country that do not have resident financial management officers. In
addition, the Bureau of African Affairs employs staff in Paris to provide
financial support to posts in Africa. Some posts have a support agreement
that outlines how many visits will be made and what functions will be
carried out under such partnering arrangements.

Officials from the Bureau of East Asian and Pacific Affairs in Washington
said that posts in Asia use partnering because geographic distances and
language and cultural differences between posts in some areas make it
difficult to devise a regional service center that, like those in
Frankfurt and Fort Lauderdale, meets all posts needs. Furthermore,
officials said the regional bureau currently lacks the funding to
establish a regional service center with a new building and additional
management staff. See figure 1 for a map of several remote support
partnerships in East Asia and the Pacific.

Figure 1: Several Remote Support Partnerships in East Asia and the Pacific

In addition, the Bureau of Near Eastern Affairs has embarked on an effort
to make extensive use of remote support provided from the United States
due to the extreme security threat faced at new embassies, particularly in

Baghdad, Iraq.11 For example, an official from the Bureau of Near Eastern
Affairs told us that State plans to provide increased financial management
support to the embassy in Baghdad from centralized operations in
Charleston, South Carolina, rather than performing all financial
management operations at post. However, he pointed out that it would take
significant time and money before the bureau could remove all
nonlocation-specific functions from critical danger posts, as outlined in
State's 2006 operational plan.

State's Functional Bureaus Also Provide Remote Support

Several functional bureaus within State provide remote support in
financial management, information management, procurement, security,
courier, medical, and other functions. Some of these operations are
offered centrally from locations within the United States and others at
overseas locations such as the regional center in Frankfurt. One example
of a domestic support operation is the Global Financial Services Center
within the Bureau of Resource Management, which has a central location in
Charleston, South Carolina, and receives support from offices in Bangkok,
Thailand, and Paris, France. The center is responsible for disbursement,
payroll, accounting, cashier monitoring and training, customer support,
and other financial management support for posts around the world.
Additional examples of remote support from functional bureaus include the
following:

o The Bureau for Information and Resource Management sponsors Regional
Information Management Centers, which provide telecommunications, network,
systems, engineering, installation, and maintenance support to overseas
posts from a number of locations.

o The Bureau of Administration operates the Regional Procurement Support
Office, which provides contract and procurement services and provides
goods and services to posts throughout the world, for a certain fee.

o State's Bureau of Diplomatic Security provides regional engineering
support and diplomatic courier operations to posts overseas.

o State also has various regional medical offices throughout the world
that are administered by the Office of Medical Services.

State Developed an Operational Plan for Rightsizing

State's fiscal year 2006 operational plan, Organizing for Transformational
Diplomacy: Rightsizing and Regionalization,12 identifies post functions
that can be performed remotely. The plan focuses on first removing
nonlocation-specific functions-or functions that could potentially be
removed from posts and carried out either from the U.S. or a regional
center-from critical danger missions,13 where State officials said it is
crucial to have as few personnel at posts as possible due to security
concerns. The plan envisions eventually removing those functions from all
overseas posts. Officials from the Office of Global Support Services and
Innovation identified 78 nonlocation-specific functions and, in December
2005, State selected 16 of these functions that it planned to provide to
critical danger posts from remote locations, according to officials. For a
list of some of the nonlocation-specific functions that can be provided
remotely, see table 3.

Table 3: Select Functions that Can Be Provided Remotely

                                        

      Nonlocation-specific function                   Activity                
Human resources management services Orientation and in-processing          
                                       Local staff job evaluations            
Training                            Distance learning applications         
Procurement services                Purchase order processing              
                                       Contracting                            
Financial management services       Voucher examination and certification  
                                       Budget submissions and report          
                                       preparation                            
Travel Services                     Travel request processing              
                                       Travel order preparation               

Source: Department of State.

State's operational plan includes goals and timelines for action. As of
April 2006, State indicated that a number of initiatives to remove
nonlocation-specific functions were under way in a number of posts;
however, it is too early to asses State's progress in implementing the
plan.

In December 2005, State's Office of the Inspector General (IG) recognized
State's operational plan as a good start and recommended that the Under
Secretary for Management produce a Departmentwide master plan for formally
accrediting regional centers. This recommended plan would include
long-term capital construction requirements for housing and office space,
standardized service expectations, and management structures that ensure
accountability to serviced bureaus and posts.14 As of March 2006,
officials from the Office of Rightsizing and the Bureau of Administration
said they were beginning to address the IG's findings.

While officials from the executive offices of some of the regional bureaus
told us that State's operational plan is on the right track, they
cautioned that the implementation of the plan must take into consideration
the various realities faced by posts in different regions of the world.
For example, an official of the Bureau of African Affairs told us that
many posts in Africa lack the technological capabilities to be able to
utilize remote support, which requires more processes to be done
electronically. He cautioned that certain posts would need to obtain
better bandwidth connectivity to handle online financial management
transactions. In addition, officials from the bureau did not believe that
the three African posts identified as critical danger posts would meet the
strategy's March 2006 timeline to receive nonlocation-specific services
remotely. Officials from the Bureaus of Near Eastern Affairs, South and
Central Asian Affairs, Western Hemisphere Affairs, and East Asia and
Pacific Affairs agreed that there is not a one-size-fits-all approach to
providing support remotely. An official from the Bureau of Western
Hemisphere Affairs added that if more nonlocation-specific functions are
moved from posts to remote locations, regional bureaus would have to
release or shift many local staff that currently carry out those functions
at posts and hire additional Americans in the United States or staff at
regional service centers overseas.

Officials in the Bureau of Western Hemisphere Affairs also pointed out
that the various administrative bureaus within State, to which the
workload related to remote support might be assigned, may not yet have the
capacity to handle the additional work. For example, they said that the
Bureau of Resource Management had not yet reported that it is ready to
provide additional remote support in the area of financial management.
However, according to the officials, the Bureau of Information Resource
Management is an example of a functional bureau that is committed to
maximizing the way in which it provides information technology services to
overseas posts and it is standardizing its regional information management
centers.

State Department Faces Challenges in Its Plans to Increase Embassy Support
from Remote Locations

State is currently looking to move forward with its fiscal year 2006
operational plan for remote support; however, it faces several challenges
that could hinder its further expansion of remote support services. In
particular, limits on what management functions non-American staff perform
might limit the extent to which services can be provided remotely. In
addition, one regulation requires original invoices for payment, which
could hinder additional remote support provided electronically. Also,
current funding arrangements for the various regional bureaus and posts
might limit opportunities for remote support to be offered from one region
to another. Finally, a reluctance to change further constrains
opportunities to expand remote support.

Limits on Non-American Staff Responsibilities Might Hinder Remote Support

Officials at the posts we visited told us that empowering local staff
could play a significant role in expanding remote support; however, such
staff are limited in the types of support that they may provide. For
example, while several officials stressed that there are certain tasks
that, for reasons of national security, must be carried out overseas by
security-cleared American citizens, some tasks, such as certifying
vouchers, may be done by non-American staff. In fact, according to the
Foreign Affairs Handbook (FAH), direct-hire, locally employed staff
members who meet certain professional qualification criteria and have
proven records of integrity and consistent superior performance may be
designated to certify vouchers as Alternate Certifying Officers.15 Several
officials at the Florida center said that allowing such staff to certify
with oversight from a regional officer could remove the need for American
officers at some posts. However, we found a lack of clarity regarding this
issue at several posts. In particular, several officials whom we spoke
with in Washington and overseas either were unaware that non-American
staff could certify vouchers or said there were limitations on which types
of vouchers or what maximum monetary value those staff may be designated
to certify.

Additionally, State officials told us that other tasks, such as
procurement, could also be carried out by non-American staff with
oversight from an American regional officer if current regulations
limiting their authority were changed.16 State is exploring this issue
through a pilot program at Embassy Brussels to implement contracting
authority for locally engaged staff. If successful and expanded, the
program could free up American officers for essential operational and
management controls activities, or potentially eliminate some American
positions at posts, according to officials in Washington. Officials in
Washington and at posts we visited said that State should reexamine its
policies and determine, based on a risk-benefit analysis, what additional
powers or responsibilities could be given to local, non-American staff,
and then communicate that to posts.

Existing Regulation Could Hinder Use of Technologies in Providing Remote
Support

State officials noted that, with the right technological applications,
some administrative functions, such as the entire payment process, could
be performed from a remote location with minimal involvement from posts.
However, State faces challenges in making this transition due to a
regulation that requires original invoices in processing payments.17 State
recognizes that leveraging today's Web-based technologies and global
business practices is essential to carrying out administrative functions
remotely, and it reports that it is working aggressively with embassies
and agencies to use technology and improved management methods to
eliminate the nonessential U.S. government presence overseas.18 In
addition, the Under Secretary for Management asked posts to move ahead
with efforts to provide additional support remotely and to identify any
legal or regulatory barriers, according to State officials. For example,
State has waived the regulation requiring an original invoice in order to
allow a pilot post being served by the regional center in Frankfurt to
e-mail or fax vouchers, invoices, and other supporting documentation to
Frankfurt for certification of payment and submission to the Global
Financial Services Center for disbursement. However, this pilot is not yet
under way due to resistance from officials who believe that there should
be a financial management officer at every post, according to State
officials in Washington. In addition, the pilot post-Nicosia,
Cyprus-lacked the bandwidth capabilities necessary for the electronic
transactions at the time of our study, according to officials.

Funding Structures Complicate Remote Support Efforts

Current State bureau funding structures might limit the application of
remote services. Since regional centers are currently funded primarily by
their respective regional bureaus, it is commonly believed that it is
difficult for posts to cross bureau lines to obtain regional services,
according to officials from the regional bureaus in Washington. This makes
it difficult, for example, for the Florida Regional Center to provide
services to a post not covered by the Bureau of Western Hemisphere
Affairs. Another example is the Bureau of African Affairs' employment of
staff in Paris to provide financial support to posts in Africa. The bureau
believes these employees are ideally suited for this work because of their
financial management expertise, their French-speaking skills that are
necessary to serve many African posts, and their access to transportation
links to Africa. We asked if these staff could also serve some North
African posts, which are even closer geographically to Paris and where
French is also widely spoken. But we were told that this is not currently
possible, largely because the posts in North Africa are not within the
Africa Bureau, and funding structures to cross regional bureaus have not
yet been established. State's IG recently pointed out that a
Departmentwide plan clarifying the resources and funding structures for
regional centers would add needed coherence to State's rightsizing
efforts.19

Several examples demonstrate that State is trying to address the issues
involved with financing remote support. For example, the International
Cooperative Administrative Support Services (ICASS)20 Executive Board
approved a proposal to initiate the charging of customer agencies for
regional services and to enable posts to utilize regional center services
outside their regional bureau. Furthermore, remote services are already
beginning to cross regional boundaries. For example, the Florida Regional
Center recently added to its portfolio Hamilton, Bermuda, a post that
belongs to the Bureau of European and Eurasian Affairs, because the
Florida center is geographically closer to Hamilton than is the Regional
Support Center in Frankfurt. This arrangement currently entails the Bureau
of European and Eurasian Affairs paying for the travel of the regional
manager to post.

Reluctance to Change Hampers Remote Support Efforts

State officials pointed out that management officials at overseas posts
might be reluctant to accept support remotely rather than having an
American at post to provide the support. For example, officials at the
Florida Regional Center have made two proposals to expand the center's
support in financial management and human resources and have identified
posts, with similar characteristics to those currently receiving support
(see table 2), that would benefit from remote support. One proposal, which
calls for the empowerment of locally employed staff, backed by oversight
from a regional manager at the Florida center to certify vouchers, would
free up the need for a full-time American financial management officer at
post. However, officials in Washington and at some posts we visited
overseas told us that most posts are reluctant or unwilling to give up
their American management officers because they prefer to have direct
access to them. Officials told us that post receptivity to such remote
support proposals depends on management's willingness to relinquish some
of its current positions, as well as the assurance from the regional
bureaus in Washington, D.C., that the regional service centers would have
the resources to provide additional support. For example, Haiti was
recently identified as a post that could utilize financial management
support from the Florida center but, according to officials from the
Bureau of Western Hemisphere Affairs, senior management at the post would
not relinquish the American staff position.

In addition, State reports resistance to change from a number of its
bureaus. For example, officials from the Bureau of Resource Management (as
well as some officials overseas) believe that having fewer management
staff at posts overseas could increase internal control vulnerabilities
and that there should be an American financial management officer at all
overseas posts. Additionally, in its technical comments on this draft, the
Office of Global Support Services and Innovation said that, while
developing the pilot programs to remove nonlocation-specific functions
from critical danger posts, such as Haiti, the regional bureaus were
reluctant to impose this experiment on posts already under such stress.
This reluctance, along with State's desire to expand remote support to the
largest possible number of posts, has led State to consider all posts, not
just critical danger posts, for implementation of such pilot programs,
according to the office.

Providing Support Remotely Offers Potential Advantages, but Cost Analyses
and Performance Measures Are Needed

According to State officials, there are several potential advantages to
providing administrative support to posts from remote locations rather
than at individual posts, including potential cost savings, enhanced
security for American personnel, and improved quality of administrative
support. However, at the time of our review, State had not conducted
analyses of the cost advantages associated with providing administrative
support remotely rather than at posts and had no systematic performance
measures and feedback mechanisms in place to assess the quality of support
provided.

Support Provided from Remote Locations Could Offer Advantages in Mission,
Cost, and Security

We have identified several examples to demonstrate the potential
advantages, in terms of financial benefits, enhanced security for American
personnel, and improved quality of administrative support, of posts
receiving support remotely. The first example demonstrates the advantages
of providing remote support from a regional service center located in the
United States. The second example depicts the advantages associated with
providing support from a regional service center located overseas.
Finally, the third example illustrates the advantages associated with
locally employed staff providing remote support to posts. There are also
several issues of concern relating to remote support, namely the quality
of services, though these issues require further analysis.

Providing Support from the United States

According to officials at the Florida center, assigning certain duties to
regional officers based in the United States is one way to save money
while retaining the expertise of a foreign service officer. Officials told
us there are cost savings associated with having one regional officer
perform the duties of several officers who would otherwise be assigned to
posts. Officials told us that eliminating the need for American officers
overseas could result in cost savings after factoring in offsetting costs,
such as costs for travel and technology enhancements, to accommodate the
change. For example, each overseas position costs approximately $400,000,
according to an average computed by State's Bureau of Resource Management
for fiscal year 2007. This amount includes salary, benefits, and support
costs plus a number of costs that apply only to officials overseas, such
as housing allowances; educational allowances for their children; and
additional pay, such as danger pay, depending on which region of the world
the officer is located. It also includes costs for providing a secure
building for the officers to work in overseas. By assigning regional
officers in the United States, State could avoid such costs, which do not
apply to personnel stationed domestically. Although officials have not
conducted a formal cost comparison to assess the size of the potential
savings, they believe the potential savings could be in the millions of
dollars.

For example, in 2002, the U.S. Embassy in Nassau, Bahamas, requested a
full-time American financial management officer at post to handle its
financial management workload, according to the post management officer.
To avoid the additional costs associated with posting a financial
management officer in Nassau, officials from the Bureau of Western
Hemisphere Affairs said the bureau instead assigned a regional officer
from the Florida Regional Center to assist the Nassau post management
officer who handles a variety of financial management responsibilities,
such as certifying vouchers. The total cost for the Florida-based regional
officer would be his salary and benefits plus travel costs of about
$60,000, according to the center's officials, which includes travel to
Nassau and three other posts also served by that officer.

In addition to cost efficiencies, officials said the Florida Regional
Center's model of support would enhance security, while the quality of
support would not suffer from the change. Officials told us that U.S.
officials, in general, are much safer living and working in the United
State than at overseas posts. In addition, staff at both posts we visited
said that the support the posts received from the Florida Regional Center
was generally satisfactory and meeting post needs. One management officer
said that the regional managers were highly experienced and competent in
their functional areas, which led to a high level of quality support.

Officials at the Florida Regional Center added that, in cases where a
regional center is located within the United States, civil servants or
retired employees could also be used as a cost-effective way of providing
remote support, when feasible. Another potential advantage of assigning
civil service or retired employees to provide remote support would be
continuity, as they would not be required to transfer every 2 to 3 years
as foreign service officers do.

Providing Support from an Overseas Regional Center

According to officials in Washington and overseas, potential advantages
also could arise from providing support remotely from a regional service
center overseas. For example, approximately 20 posts in Europe and Eurasia
have requests in their Mission Performance Plans21 for an American
financial management officer at post, according to the Deputy Assistant
Secretary for Global Financial Services. To eventually avoid assigning
such new staff to posts overseas, State is piloting a project to determine
whether it can remotely certify vouchers in Frankfurt by using scanned
rather than original documents. Center officials said that there would be
a savings in cost and space and gains in security at those posts where
this concept of remote certification removes the need for an American
financial management officer position overseas. For example, while some
posts in Europe and Eurasia do not have facilities that meet security
standards, the Regional Support Center in Frankfurt is located in a safe
facility that meets security standards, including 100-foot setback between
office facilities and uncontrolled areas, and controlled access at the
perimeter of the compound. Also, officials said that posts could receive
highly skilled and experienced financial oversight from the center.
Officials acknowledged that it is costly to operate from the Frankfurt
facility because of local wage rates and the cost of living allowance for
U.S. staff. However, they believe that high operating costs would likely
be outweighed by a combination of factors, including the potential
efficiencies achieved at posts served by the regional facility and the
eventual reduction in staff needed at posts overseas due to the remote
support offered from Frankfurt. However, center officials said they had
not performed cost analyses to demonstrate if servicing posts from
Frankfurt was cost effective, and they agree that such analysis would be
useful.

Providing Support Using Non-American Staff Rather than Americans

State officials told us that using non-American staff to provide remote
support offers several advantages. For example, State uses these staff in
the Foreign Service National Executive Corps and Paris Rovers Programs.

o The Foreign Service National Executive Corps, one method of providing
remote support, is used by the Bureau of European and Eurasian Affairs to
leverage in-house resources to benefit smaller missions throughout the
world, according to officials at the Frankfurt center. Corps members are
locally employed staff, from a variety of posts throughout the various
regional bureaus, who are highly experienced in various administrative
functions and can assist, train, and mentor staff at posts in areas such
as facilities maintenance, financial management, general services (such as
procurement), human resources, and information management. State officials
told us that, by using the corps members to provide remote support, State
has avoided the assignment of additional American officers overseas.

o  The Paris Rovers Program, another means of providing remote support by
using non-American staff, is cost-efficient and effective, according to
officials from the Bureau of African Affairs. The program operates with
six locally employed staff-five of whom are based in Paris-serving as
financial management experts for about 44 posts in Africa, many of which
either have first-tour financial management officers or no full-time
American financial management officers. The rovers are experts in post
budget needs and cashier problems and spend much of their time providing
on-the-job training to staff at posts, as well as occasionally filling
post staffing gaps. According to bureau officials, by educating first-tour
officers in the use and management of appropriated funds and reviewing
financial management reports, the Paris rovers provide needed financial
management internal control oversight, which likely reduces financial
losses to the bureau.

In addition, bureau officials said they are committed to not sending an
American to post when there is no need to do so, due to the security risk
levels of many posts in Africa. Recently, several posts in Africa,
including Bangui in the Central African Republic, have requested American
financial management officers, according to an official from the Bureau
for African Affairs. To avoid hiring a financial management officer for
Bangui, the bureau added Embassy Bangui to the Paris Rovers Program.

Although the bureau has not determined the full potential of the program,
its initial data demonstrate that the operation is cost-effective.
According to bureau officials, the total cost of the six employee rover
program in 2005 was about $934,000, including employee salaries and travel
costs. The Bureau of African Affairs prepared an estimate, at our request,
of what it would cost to provide financial services without the
Paris-based rover operation. The bureau estimated that it would have to
spend over one million dollars to fund three additional U.S. officer
positions and three part-time employees, slightly more than the cost of
the Paris operation. Officials agreed that a more detailed cost analysis
could demonstrate if the program is clearly cost-effective and therefore
should be expanded to cover additional posts.

In Addition to Advantages of Remote Support, Several Concerns Exist

Despite overall satisfaction with regional support, management officers
and locally employed staff at the posts we visited mentioned a few issues
of concern relating to the quality of remote support, including timeliness
and the distribution of assistance. One management officer said that it
once took 4 weeks for his regional financial management officer to respond
to him on a certain issue, by which time the issue was no longer relevant.
Another management officer agreed that posts are subject to regional
officers' availability, and when an officer is not at a post, an issue may
take too long to resolve. Officials at regional centers told us that the
quality of partnering support was not as good as the service provided by a
regional center. One management officer told us that an officer with
regional responsibilities who is located at a post will likely prioritize
the home post's issues over the needs of other supported posts. In
addition, State's recent IG inspections found substandard regional support
at smaller posts in Africa where partnering is used, and often recommended
updating the memorandum of understanding to delineate regional support
expectations.22 However, at the time of our review, State did not have
performance data for remote support. An official from the Bureau of
European and Eurasian Affairs told us that, absent performance measures
and feedback tools to ensure costumer satisfaction, accountability, and
adequate internal controls, customer service could decrease when a service
provider is located outside of the post.

In addition, an official from the Global Financial Services Center in
Charleston and other officials overseas reported concerns that fewer
on-the-ground American management staff could increase internal control
vulnerabilities. For example, some officials believe that there needs to
be an American financial management officer at every overseas post to
prevent fraud, waste, and mismanagement of funds. According to GAO's
Internal Control Management Evaluation Tool,23 government agencies should
formulate an approach for risk management and decide upon the internal
control activities required to mitigate risks that could impede the
efficient and effective achievement of objectives. The approach should be
modified to fit the circumstances, conditions, and risks relevant to the
situation of each agency and should also consider the type of mission
being performed and the cost/benefit aspect of a particular control item.
In this example, State would weigh the potential internal control risks of
allowing non-American staff to certify vouchers and carry out other
financial management activities against the costs of having an American at
every post to carry out such functions.

Cost Analyses and Performance Measures Are Needed

At the time of our review, State had not conducted analyses of the costs
associated with providing administrative support at posts versus providing
it remotely. In addition, State lacked systematic performance measures and
feedback mechanisms to assess the quality of support provided. Further,
officials whom we interviewed from several posts were not aware of the
types of remote support that could be made available to them and said they
would be more willing to use it if the cost and quality of available
services was documented.

Cost Analysis Would Be Useful in Determining Whether to Provide Support
Remotely

At the time of our review, State had not conducted cost analyses to show
potential cost efficiencies, such as those outlined in the examples
described earlier, of providing support to overseas posts remotely.
Officials we talked to in Washington, at the regional centers, and at some
posts we visited said that cost analyses would be useful in deciding how
to provide support remotely. For example, the Deputy Director of the
Florida Regional Center told us that there had been no analysis on how
much money has been saved by serving posts from the Florida center rather
than having management officials at the posts, and he said that such a
study would be useful, not only for the Bureau of Western Hemisphere
Affairs, but also for other regional bureaus when they consider using
regional centers to provide remote support.

Cost analyses were not incorporated into State's 2006 operational plan for
rightsizing.24 The plan recognizes that additional resources, such as
facilities and staff, would be needed to implement the plan. However, it
does not address any of the cost savings or efficiencies that could be
achieved by providing remote support from regional centers or the United
States and whether the savings would exceed the cost of additional
resources.

A cost analysis would include the various costs and alternatives
associated with providing remote support through regional service centers
in the United States or overseas. Such cost components would include the
various direct and other personnel and support costs associated with
providing support at a post. It would weigh these costs against costs
required to facilitate remote support, such as travel expenses; costs for
technology enhancements, such as improved bandwidth connectivity; costs
for new or expanded facilities and other related expenses to accommodate
increased staff at existing or new regional centers; costs for changes in
local staffing or staffing in the United States; and other costs.

Performance Measures and Feedback Mechanisms Needed

The concerns with remote support described earlier-particularly relating
to quality of services-underscore what officials indicated at both
regional centers and all four serviced posts that we visited, which is,
that performance measures and customer feedback processes would be useful
and beneficial in rating the current level of customer support and
oversight.25 Officials also said that performance measures and customer
feedback processes would be essential for making decisions about expanding
remote support. Officials from State's Office of Rightsizing said that,
before agreeing to any change, posts would first want proof that remote
support provides the same level of customer service as support provided at
posts. For example, the Executive Director of the Bureau of Near Eastern
Affairs said that the bureau would be willing to use remote support from
regional centers, such as the Regional Support Center in Frankfurt, if the
cost was reasonable and the quality and reliability of service was
demonstrated to be high. He said that, to convince decision-makers about
the quality of remote support, all regional centers need to have standards
of performance with metrics and data to demonstrate that offering services
regionally or centrally, rather than at individual posts, results in
adequate service and internal controls. An official from the Bureau of
European and Eurasian Affairs said one performance metric could be the
amount of time it takes for a voucher to be processed. One post management
officer suggested that a performance measure, such as a required weekly
telephone call to a serviced post by the regional officer, would be
another way support could potentially be improved from the Florida center.

State has recognized the need for performance measures and customer
feedback mechanisms in its operational plan, but has not yet developed
them. However, during our review, one regional bureau developed a customer
service survey. Six months after our visit in June 2005, the Florida
Regional Center sent customer satisfaction surveys to the posts it
provides with regional financial management and human resources support.
The survey asked management officers at posts to note the frequency and
duration of visits by a regional officer to a post, as well as the
frequency of communication between the officer and posts, and to rate the
level of guidance and supervision provided by the officer to the local
staff. At the time of our review, the Florida center had not yet completed
an analysis of the results of the surveys; however, according to officials
at the center, the respondents had favorable views of the center's
services.

Lack of Awareness of Remote Support Opportunities Limits Their Use

Various initiatives to provide support remotely are occurring within the
multiple regional bureaus; however, how they are integrated and
communicated at a Statewide level is not clear. Several management staff
at the posts we visited and those we interviewed by telephone were not
fully aware of all the services they could utilize from a remote location.
For example, management officers stationed in Asia and Africa said they
lack information on what types of support could be provided remotely and
how to access that support. Some officials indicated that it would be
helpful for them to know the full extent of remote support available, and
whether it results in cost efficiencies and effective service, in order to
make an informed decision about whether to utilize it.

In addition, we found that regional centers were not always fully
communicating the types of services and support available to posts, either
within their region or across regional bureaus. The Executive Director of
the Bureau of Near Eastern Affairs said he would consider using regional
support from Frankfurt if he knew the full range of services that were
offered there, the quality of customer service, and the potential costs of
services. State officials at the Regional Support Center in Frankfurt
agreed that while they do talk to post officials, particularly at
management conferences, about the regional services that Frankfurt offers,
they could do a more comprehensive job of documenting and marketing the
full range of services and expertise provided by regional support center.

State officials in Washington and overseas told us that communication is
the key to ensuring that efforts to expand remote support are maximized,
and that a dialogue has recently begun. In particular, the Office of
Global Support Services and Innovation and the Office of Rightsizing have
set up a Regional Initiatives Council to discuss ongoing efforts to
provide remote support in each regional bureau. According to State
officials, recent discussions at such meetings have centered on whether or
not to set up consolidated administrative service centers, called Centers
of Excellence, within the regional bureaus to provide certain
management-related functions, such as human resources or travel
administration, for posts around the world. For example, a dialogue
already has begun regarding how to use existing resources to provide
additional remote support from Bangkok for posts in East Asia and the
Pacific.

Conclusions

By providing administrative support remotely, State has the potential to
reduce costs and improve customer service. However, State has not
conducted cost analyses nor established systematic performance measures
and feedback mechanisms to demonstrate the full potential of providing
support remotely. Without data depicting the range of
implications-relating to cost, efficiency, security, and quality of
services-involved with providing and receiving support remotely,
decision-makers lack the tools to make informed decisions about investing
staff and resources at individual posts or at regional centers overseas
and in the United States.

Recommendations for Executive Action

As State moves forward with its plan for expanding remote support and
attempts to overcome institutional resistance to this process, it would be
useful to concurrently assess and promote the potential full advantages in
providing embassy support from remote locations, including potential cost
reductions, improved services, or enhanced security for foreign service
officers. Therefore, we recommend that the Secretary of State take the
following three actions:

o Identify and analyze the various costs associated with providing support
at individual posts versus at regional service centers in the United
States or overseas;

o Develop systematic performance measures and feedback mechanisms to
measure the quality and customer satisfaction of support services provided
remotely; and

o Use the cost analyses and feedback on quality and customer satisfaction
to

o inform post management of which services could be offered remotely, the
various costs involved, and the quality of services offered;

o consider ways to improve the quality of remote support, when necessary;
and

o determine whether additional posts, including posts that are requesting
new U.S. officer positions in management functions, might be logical
candidates for receiving remote support.

We also encourage State to continue reviewing challenges to providing
support remotely and finding ways to overcome them.

Agency Comments and Our Evaluation

We provided a draft of this report to the Department of State for comment.
State's comments, along with our responses to them, can be found in
appendix II.

State generally concurred with the report's substance and findings and
indicated that it is taking steps to implement all of our recommendations.
State agreed that a more systematic and rigorous costing model would be
beneficial in determining whether or not providing support from regional
centers is cost-effective. State also agreed that systematic performance
measures and feedback mechanisms are needed to measure the quality of and
satisfaction with remote support, and State plans to strengthen its
efforts in this area as part of its plans for providing support remotely.
State added that the Office of Rightsizing would coordinate the
development of a customer-focused service standard for regional centers.
Lastly, State said that it plans to use more consistent and accurate data
in making decisions to improve its remote support services.

The department also provided a number of technical comments, which have
been incorporated throughout the report, where appropriate.

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the date of this letter. At that time, we will send copies of this report
to other interested Members of Congress, the Library of Congress, and the
Secretary of State. We will also make copies available to others upon
request. In addition, this report will be available at no charge on the
GAO Web site at http://www.gao.gov .

If you or your staff have any questions about this report, please contact
Jess Ford at (202) 512-4268. Other GAO contacts and staff acknowledgments
are listed in appendix III.

Sincerely yours,

Jess T. Ford Director, International Affairs and Trade

Appendix I  Scope and Methodology

To describe the Department of State's (State) progress in providing
administrative support from remote locations, we reviewed documents from
the Office of Rightsizing and the Office of Global Support Services and
Innovation, including its operational plan for rightsizing and
regionalization. We spoke with officials at State's various regional and
functional bureaus in Washington, D.C., to discuss the efforts each bureau
has taken to provide administrative support to overseas posts, whether
from regional service centers overseas, from the United States, or from
other posts through partnering. To assess regional support provided from
the United States to overseas posts, we met with senior management and
regional staff at the Florida Regional Center in Fort Lauderdale, Florida,
and the Global Financial Services Center in Charleston, South Carolina. We
also met with senior management, regional staff, and locally employed
staff at the overseas Regional Support Center in Frankfurt, Germany, to
review remote support provided from an overseas regional service center.
We focused our efforts on evaluating the various ways in which financial
and personnel support are provided by the various regional bureaus. We did
not perform an evaluative audit of the regional support provided by
functional bureaus, consular affairs, or the Model for Overseas Management
initiative because those operations either have been recently inspected by
the Office of the Inspector General or did not fit into the scope of our
work.

To assess some of the regulatory challenges that State faces in expanding
regional support, we reviewed foreign affairs regulations for carrying out
administrative functions overseas. This included a review of regulations
on what functions locally employed staff can carry out in the areas of
procurement and payments. We also reviewed the regulations pertaining to
the use of original documentation in processing payments and State's
proposal to waive that regulation.

To identify the potential advantages of providing support remotely, we met
with ambassadors, deputy chiefs of mission, management officers, and other
U.S. embassy staff, including locally employed staff at various posts that
receive remote support from either the Florida Regional Center or the
Frankfurt Regional Support Center. We chose Belize City, Belize, because
it is a small post supported by the Florida center and Nassau, Bahamas,
because it is the largest post supported by the center, pertaining to the
number of staff and size of budget, according to an official at the
Florida center. We chose Valetta, Malta, because it is a small post
support by the Frankfurt center, and it recently conducted a rightsizing
review, which addressed remote support issues. We chose Helsinki, Finland,
because it represents a medium-sized post supported by the Frankfurt
center and because it was originally the post chosen for the pilot project
to certify vouchers remotely, according to officials in the Bureau of
European and Eurasian Affairs. We also visited Mexico City to talk to
embassy officials about how the U.S. mission to Mexico has been rightsized
and how the embassy provides support to consulates throughout the country.
Lastly, in order to explore the advantages of using locally employed staff
in providing remote support, we met with officials in Paris, France, to
discuss the financial support that locally employed staff provides to
posts in Africa. Because our interviews were limited to only a few posts
that received regional support, we did not generalize the results of our
interviews to the universe of posts receiving regional support. We
reviewed the post profiles of the four posts we visited to demonstrate the
staffing and other characteristics of posts currently using regional
support and verified the data with the post management officers.

We also reviewed cost data from the Bureau of Resource Management and the
various regional bureaus to estimate the average cost of placing one
foreign service officer at an overseas post, including personnel and
support costs, and costs that apply only to officers located overseas. For
reporting purposes, we rounded the bureau's estimate of $393,000 to
$400,000 for the cost of an American officer overseas. We conducted (1) a
data reliability assessment of the data using sample cost data from the
posts we visited; (2) interviews with officials from the regional bureaus
and the Bureau of Resource Management; and (3) discussions with the Office
of Rightsizing at State and the Office of Management and Budget, and we
determined the data to be sufficiently reliable for the purposes of this
engagement.

In addition, we developed a structured interview instrument and conducted
telephone interviews with management staff at overseas posts that have
recently conducted a rightsizing report, which is required by Congress.1
We administered structured interviews between February and March 2006 by
telephone. We primarily spoke with management counselors or management
officers at overseas posts. In one case, we spoke with a deputy chief of
mission at the post. We conducted interviews with 20 of 22 posts that were
tasked to complete the rightsizing review in the fall 2005 cycle:
Asuncion, Baku, Bandar Seri Begawan, Bucharest, Bujumbura, Colombo,
Harare, Jakarta, Karachi, Kiev, Krakow, Maputo, N'djamena, Pretoria,
Reykjavik, Rome, Santo Domingo, St. Petersburg, Taipei, and Tunis.

The structured interview contained open- and closed-ended questions about
guidance, timing, the review process, rightsizing considerations,
headquarters' involvement and feedback, and the impact of the review on
the post. The interview instrument included questions regarding whether or
not post management staff were both aware of and using regional support
services. We developed the interview questions based on our review of
rightsizing documentation and discussions with post officials during field
work in Mexico City and Valletta. We provided an early version of the
questions to State's Office of Rightsizing and Office of Global Support
Services and Innovation for their review and comment, and we also
pretested the interview with three current management officers to ensure
that the questions were clear and could be answered. We modified the
interview questions on the basis of the pretest results and an internal
expert technical review. We provided the management officers and deputy
chief of mission with the interview questions in advance to allow them
time to gather any data or information necessary for the interview. We
also conducted follow-up discussions with posts as needed. The responses
of the structured interviews are not intended to be representative of all
posts.

We performed our work from June 2005 until April 2006 in accordance with
generally accepted government auditing standards.

Appendix II  Comments from the Department of State

The following are GAO's comments on the Department of State's letter dated
April 13, 2006.

GAO Comments

1.We are conducting a separate review of the consolidation of State and
USAID support activities at overseas posts. We plan to issue a report on
our findings later in 2006.

2.We recognized the efforts of the Florida Regional Center to measure
customer service satisfaction with a survey and state this in our final
report. We also acknowledged that State has recognized the need for
performance measures and customer feedback mechanisms in its operational
plan but has not yet developed them. We encourage State to develop
performance measures and customer feedback mechanisms in its operational
plan for all posts providing and receiving remote support, and not only
for selected posts, such as those that receive support from the Florida
Regional Center. We encourage State to use tools such as the ICASS Service
Center annual survey to compare local support with remote support and
identify areas where remote support could be improved.

3.We agree that the support the embassy in Mexico City provides to nine
consulates throughout Mexico is a good example of providing support
remotely, and we added this example in our final report.

Appendix III  GAO Contact and Staff Acknowledgments

John Brummet (202) 512-5260

In addition to the person named above, Joseph Carney, Lyric Clark, Martin
De Alteriis, Ernie Jackson, Andrea Miller, Deborah Owolabi, Jose M. Pena
III, and Michelle Richman made key contributions to this report.

(320409)

www.gao.gov/cgi-bin/getrpt? GAO-06-479 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Jess Ford at (202) 512-4268 or
[email protected].

Highlights of GAO-06-479 , a report to the Chairman, Subcommittee on
National Security, Emerging Threats, and International Relations,
Committee on Government Reform, House of Representatives

May 2006

OVERSEAS PRESENCE

Cost Analyses and Performance Measures Are Needed to Demonstrate the Full
Potential of Providing Embassy Support Remotely

The President has emphasized the importance of safety, efficiency, and
accountability in U.S. government staffing overseas by designating the
achievement of a rightsized overseas presence as a part of the President's
Management Agenda. One of the elements of rightsizing involves relocating
certain administrative support functions from overseas posts to the United
States or regional centers overseas, which can provide cheaper, safer, or
more effective support. This report (1) reviews State's efforts in
providing administrative support from remote locations, (2) identifies the
challenges it faces in doing so, and (3) outlines the potential advantages
and concerns associated with providing support remotely.

What GAO Recommends

We recommend that the Secretary of State (1) identify and analyze the
various costs associated with providing support remotely, (2) develop
systematic performance measures and formal feedback mechanisms to measure
the quality and customer satisfaction of support services provided
remotely, and (3) use the cost analyses and feedback to make decisions on
supporting embassy operations. State generally concurred with our report
and indicated that it is taking steps to implement all of our
recommendations.

State has a number of regional and domestic offices that provide some
management support remotely to overseas posts in areas such as financial
management and human resources. For example, State's Bureau of Western
Hemisphere Affairs provides support to posts in its region through staff
based in Florida. State announced in October 2005 it would identify and
remove additional functions that do not need to be performed at post and
could instead be performed domestically or at regional centers overseas.

State faces several challenges in trying to expand its use of remote
support. For example, restrictions on what management functions
non-American staff can perform might limit the extent to which services
can be provided remotely. In addition, current funding arrangements for
various regional bureaus and posts might limit opportunities for remote
support to be offered from one region to another, while posts' reluctance
to change is a further constraint. State is assessing whether certain
regulations could be waived or changed and how institutional challenges
might be overcome.

There are several potential advantages to providing administrative support
to posts from remote locations, and several concerns. For example, one
U.S.-based officer provides financial management support to multiple
overseas posts, eliminating the need for an American financial management
officer at each post served, which, according to State, could result in
cost savings. Officials at posts we visited reported they were generally
satisfied with the level of support and customer service at a regional or
domestic service center, though some noted concerns. However, at the time
of our review, State had neither analyzed the potential cost savings
associated with providing remote support nor systematically assessed the
quality of support provided. In addition, many officials in Washington and
overseas were unaware of the full breadth of support offered by regional
service centers.

The Regional Service Center in Florida and Supported Posts

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