Report to the Chairman, Subcommittee

on National Security, Veterans Affairs,

and International Relations, Committee

on Government Reform, House of

Representatives

United States General Accounting Office

GAO

July 2002 OVERSEAS

PRESENCE

Framework for

Assessing Embassy

Staff Levels Can

Support Rightsizing

Initiatives

GAO-02-780
Page i GAO-02-780 Overseas Presence

Letter 1

Results in Brief 2

Background 3

Development of a Rightsizing Framework 4

Rightsizing Framework Complements OMB Initiatives 12

Conclusion 13

Recommendation for Executive Action 13

Agency Comments and Our Evaluation 13

Scope and Methodology 14

Appendix I Timeline of Rightsizing Initiatives since the

1998 Embassy Bombings 16

Appendix II Rightsizing Framework and Corresponding

Questions 17

Appendix III Comments from the Office of Management and

Budget 18

Appendix IV Comments from the Department of State 20

GAO’s Comments 26

Appendix V GAO Contact and Staff Acknowledgments 27

GAO Contact 27

Staff Acknowledgments 27

Figure

Figure 1: Framework for Embassy Rightsizing 5

Contents
Page ii GAO-02-780 Overseas Presence

Abbreviations

OMB Office of Management and Budget

OPAP Overseas Presence Advisory Panel

MPP Mission Performance Plan
Page 1 GAO-02-780 Overseas Presence

July 26, 2002

The Honorable Christopher Shays

Chairman, Subcommittee on National Security,

 Veterans Affairs, and International Relations

Committee on Government Reform

House of Representatives

Dear Mr. Chairman:

Following the 1998 terrorist bombings of two U.S. embassies in Africa that

resulted in more than 220 deaths and 4,000 injuries, there have been

recurring calls to evaluate and realign—or rightsize—the number and

location of staff at U.S. embassies and consulates and to consider staff

reductions where practical to reduce security vulnerabilities.1 The

administration showed its support for rightsizing in the President’s

Management Agenda2

 by directing all agencies operating overseas to

rightsize their presence. The Office of Management and Budget (OMB) is

implementing this rightsizing initiative by analyzing the U.S. overseas

presence and reviewing the staffing allocation process. Given the high

costs of maintaining more than 60,000 Americans and foreign nationals

overseas and the events of September 11, 2001, that highlighted the

security vulnerability of Americans worldwide, the administration’s

rightsizing initiative aims to reconfigure U.S. government overseas staff to

the minimum number necessary to meet U.S. foreign policy goals.

In May 2002, we presented testimony on a framework for determining the

appropriate number of staff to be assigned to a U.S. embassy.3 As you

requested, this report presents the framework discussed in our testimony

that outlines the key criteria for evaluating the U.S. overseas presence,

 1

Throughout this report, we refer to rightsizing issues at embassies. However, the

rightsizing process is also applicable to diplomatic offices that are located outside the

capital cities. For our purposes, we define rightsizing as aligning the number and location

of staff assigned overseas with foreign policy priorities and security and other constraints.

Rightsizing may result in the addition or reduction of staff, or a change in the mix of staff at

a given embassy or consulate.

2

Office of Management and Budget, The President’s Management Agenda, Fiscal Year

2002 (Washington, D.C.: August 2001).

3

U.S. General Accounting Office, Overseas Presence: Observations on a Rightsizing

Framework, GAO-02-659T (Washington, D.C.: May 1, 2002).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-780 Overseas Presence

along with examples of key questions that may be useful in making

rightsizing decisions. We developed the framework by reviewing previous

reports on rightsizing and overseas staffing issues, such as the Overseas

Presence Advisory Panel (OPAP) report,4

 and interviewing officials from

the Department of State, other U.S. agencies operating overseas, and OMB.

We tested the framework during our fieldwork at the U.S. embassy in

Paris. In each section of this report, we include observations in applying

the framework at that embassy. We plan additional work later this year to

refine the framework and demonstrate how it can be used in other regions

and environments.

Our framework provides a systematic approach for assessing overseas

workforce size and identifying options for rightsizing, both at the embassy

level and for making related decisions worldwide. The framework links

staffing levels to three critical elements of overseas diplomatic operations:

(1) physical/technical security of facilities and employees, (2) mission

priorities and requirements, and (3) cost of operations. The first element

includes analyzing the security of embassy buildings, the use of existing

secure space, and the vulnerabilities of staff to terrorist attack. The second

element focuses on assessing embassy priorities and the staff’s workload

requirements. The third element involves developing and consolidating

cost information from all agencies at a particular embassy to permit costbased decision making. Unlike an analysis that considers the elements in

isolation, the rightsizing framework encourages consideration of a full

range of options, along with the security, mission, and cost trade-offs. With

this information, decision makers would then be in a position to determine

whether rightsizing actions are needed either to add staff, reduce staff, or

change the staff mix at an embassy. Options for reducing staff could

include relocating functions to the United States or to regional centers and

outsourcing functions. Our analysis of the U.S. embassy in Paris

demonstrated the framework’s viability—for example, by highlighting

security concerns that may warrant staff reductions and by identifying

options for relocating some staff—for example, to the United States and

other locations in Europe.

 4

Secretary of State Madeline Albright established OPAP following the 1998 embassy

bombings in Africa to consider the organization of U.S. embassies and consulates.

Department of State, America’s Overseas Presence in the 21st Century, The Report of the

Overseas Presence Advisory Panel (Washington, D.C.: November 1999).

Results in Brief
Page 3 GAO-02-780 Overseas Presence

In this report, we are recommending that the Director of OMB ensure that

our framework is used in the administration’s rightsizing initiative, starting

with its assessments of staffing levels and rightsizing options in U.S.

embassies in Europe and Eurasia. OMB, in commenting on a draft of our

report, agreed with the framework’s elements and options and said that it

plans to build upon the framework in examining all posts within the

European and Eurasia Bureau. The Department of State said that it

welcomed our work on developing a framework as a commonsense

approach for considering staffing issues.

The U.S. government maintains more than 250 diplomatic posts overseas

(embassies, consulates, and other diplomatic offices) with approximately

60,000 personnel representing more than 50 government agencies and

subagencies. The departments of Defense and State together comprise

more than two-thirds of American personnel overseas under chiefs of

mission authority—36 percent and 35 percent, respectively.5 The costs of

maintaining staff overseas vary by agency but in general, as OMB has

reported, they are high. The Deputy Director of OMB recently testified that

the average annual cost of having one full-time direct-hire American family

of four in a U.S. embassy is $339,100.6

Following the 1998 embassy bombings, two high-level independent groups

called for the reassessment of overseas staffing levels. The Accountability

Review Boards that sent two teams to the region to investigate the

bombings concluded that the United States should consider adjusting the

size of its overseas presence to reduce security vulnerabilities.7

 Following

the Accountability Review Boards’ report, OPAP concluded that some

embassies were disproportionately sized and needed staff adjustments to

adapt to new foreign policy priorities and reduce security vulnerabilities.

The panel recommended creating a permanent interagency committee to

develop a methodology to determine the appropriate size and locations of

 5

U.S. Department of State, Trends in American (US) Full-Time Permanent (FTP) DirectHire (USDH) World Wide Positions FY 1985 – FY 2001 (Washington, D.C.: June 2001).

6

Testimony of Nancy Dorn, Deputy Director of the Office of Management and Budget,

before the Subcommittee on National Security, Veterans Affairs, and International

Relations, House Committee on Government Reform, on May 1, 2002.

7

Secretary of State Albright appointed the Accountability Review Boards to investigate the

facts and circumstances surrounding the 1998 embassy bombings in East Africa.

Department of State, Report of the Accountability Review Boards on the Embassy

Bombings in Nairobi and Dar Es Salaam (Washington, D.C.: January 1999).

Background
Page 4 GAO-02-780 Overseas Presence

the U.S. overseas presence. OPAP also suggested a series of actions to

adjust overseas presence, including relocating some functions to the

United States and to regional centers where feasible. However, the Stateled interagency committee that was established to respond to OPAP’s

recommendations did not produce a standard rightsizing methodology. As

we previously reported,8

 the committee did not spend sufficient time at

overseas locations to fully assess workload issues or consider alternative

ways of doing business. To move the issue forward, in August 2001, the

President’s Management Agenda identified rightsizing as one of the

administration’s priorities. In addition, the President’s fiscal year 2003

international affairs budget9

 (1) highlighted the importance of making

staffing decisions on the basis of mission priorities and costs and (2)

directed OMB to analyze agencies’ overseas staffing and operating costs

(see app. I for a summary of previous rightsizing initiatives).

Although there is general agreement on the need for rightsizing the U.S.

overseas presence, there is no consensus on how to do it. As a first step,

we developed a framework that includes a set of questions to guide

decisions on overseas staffing (see app. II for the set of questions). We

identified three critical elements that should be systematically evaluated

as part of this framework: (1) physical/technical security of facilities and

employees, (2) mission priorities and requirements, and (3) cost of

operations. If the evaluation shows problems, such as security risks,

decision makers should then consider the feasibility of rightsizing options,

including relocating staff or downsizing. On the other hand, evaluations of

agencies’ priorities may indicate a need for additional staff at embassies or

greater external support from other locations. Figure 1 illustrates the

framework’s elements and options.

 8

U.S. General Accounting Office, Overseas Presence: More Work Needed on Embassy

Rightsizing, GAO-02-143 (Washington, D.C.: Nov. 27, 2001).

9

Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 2003

(Washington, D.C.: Feb. 4, 2002).

Development of a

Rightsizing

Framework
Page 5 GAO-02-780 Overseas Presence

Figure 1: Framework for Embassy Rightsizing

Source: GAO.

State and other agencies in Washington, D.C., including OMB, could use

this framework as a guide for making overseas staffing decisions. For

example, ambassadors could use this framework to ensure that embassy

staffing is in line with security concerns, mission priorities and

requirements, and cost of operations. At the governmentwide level, State

and other agencies could apply the framework to free up resources at

oversized posts, reallocate limited staffing resources worldwide, and

introduce greater accountability into the staffing process.

The following sections describe in more detail the three elements of our

framework, examples of key questions to consider for each element, and

potential rightsizing options. We also include examples of how the

questions in the framework were useful for examining rightsizing issues at

the U.S. embassy in Paris.
Page 6 GAO-02-780 Overseas Presence

The substantial loss of life caused by the bombings of the U.S. embassies

in Africa and the ongoing threats against U.S. diplomatic buildings have

heightened concern about the safety of our overseas personnel. State has

determined that about 80 percent of embassy and consulate buildings do

not fully meet security standards. Although State has a multibillion-dollar

plan under way to address security deficiencies around the world, security

enhancements cannot bring most existing facilities in line with the desired

setback—the distance from public thoroughfares—and related blast

protection requirements. Recurring threats to embassies and consulates

highlight the importance of rightsizing as a tool to minimize the number of

embassy employees at risk.

The Accountability Review Boards recommended that the Secretary of

State review the security of embassies and consider security in making

staffing decisions. We agree that the ability to protect personnel should be

a key factor in determining embassy staffing levels. State has prepared a

threat assessment and security profile for each embassy, which can be

used when assessing staff levels. While chiefs of mission10 and State have

primary responsibility for assessing overseas security needs and allocating

security resources, all agencies should consider the risks associated with

maintaining staff overseas. The Paris embassy, our case study, illustrates

the importance of facility security in determining staffing levels. As at

many posts, the facilities in Paris predate current security standards. The

Department of State continues to mitigate security limitations by using a

variety of physical and technical security countermeasures. That said,

none of the embassy’s office buildings meets current standards.

The placement and composition of staff overseas must reflect the highest

priority goals of U.S. foreign policy. Moreover, the President’s

Management Agenda states that U.S. interests are best served by ensuring

that the federal government has the right number of people at the right

locations overseas.

Currently, there is no clear basis on which to evaluate an embassy’s

mission and priorities relative to U.S. foreign policy goals. State’s fiscal

 10According to the Foreign Service Act of 1980 (P.L. 96-465), as amended, “chiefs of

mission” are principal officers in charge of diplomatic missions of the United States or of a

U.S. office abroad, such as U.S. ambassadors, who are responsible for the direction,

coordination, and supervision of all government executive branch employees in a given

foreign country (except employees under a military commander).

Physical/Technical

Security of Facilities and

Employees

What Is the Threat and Security

Profile of the Embassy?

Mission Priorities and

Requirements

What Are the Embassy’s

Priorities?
Page 7 GAO-02-780 Overseas Presence

year 2000-2002 Mission Performance Plan (MPP)11 process does not

require embassies to differentiate among the relative importance of U.S.

strategic goals. The Chairman of OPAP testified in May 2002 that no

adequate system exists to match the size and composition of the U.S.

presence in a given country to the embassy’s priorities.12 Currently it is

difficult to assess whether 700 people are needed at the Paris embassy.

For example, the fiscal year 2000-2002 MPP includes 15 of State’s 16

strategic goals, and overall priorities are neither identified nor

systematically linked to resources. In recent months, State has revised the

MPP process to require each embassy to set five top priorities and link

staffing and budgetary requirements to fulfilling these priorities. A

successful delineation of mission priorities will complement our

rightsizing framework and support future rightsizing efforts to adjust the

composition of embassy staff.

Embassy workload requirements include influencing policy of other

governments, assisting Americans abroad, articulating U.S. policy,

handling official visitors, and providing input for various reports and

requests from Washington. In 2000, on the basis of a review of six different

U.S. embassies, the State-led interagency committee found the perception

that Washington’s requirements for reports and other information requests

were not prioritized and placed unrealistic demands on staff. We also

found this same perception among some offices in Paris. Scrutiny of

workload requirements could potentially identify work of low priority

such as reporting that has outlived its usefulness. Currently, State

monitors and sends incoming requests for reports and inquiries to

embassies and consulates, but it rarely refuses requests and leaves the

prioritization of workload to the respective embassies and consulates.

Washington’s demands on an embassy need to be evaluated in light of how

they affect other work requirements and the number of staff needed to

meet these requirements. For example, the economics section in Paris

reported that Washington-generated requests resulted in missed

opportunities for assessing how U.S. private and government interests are

affected by the many ongoing changes in the European banking system.

 11Mission Performance Plans are annual embassy plans describing performance goals and

objectives.

12Testimony of Lewis B. Kaden, chairman of the Overseas Presence Advisory Panel, before

the Subcommittee on National Security, Veterans Affairs, and International Relations,

House Committee on Government Reform, on May 1, 2002.

Are Workload Requirements

Validated and Prioritized?
Page 8 GAO-02-780 Overseas Presence

The President’s Management Agenda states that there is no mechanism to

assess the overall rationale for and effectiveness of where and how many

U.S. employees are deployed overseas. Each agency in Washington has its

own criteria for assigning staff to U.S. embassies. Some agencies have

more flexibility than others in placing staff overseas, and Congress

mandates the presence of others. Thorough staffing criteria are useful for

determining and reassessing staffing levels and would allow agencies to

better justify the number of overseas staff. We found that the criteria to

locate staff in Paris vary significantly by agency. Some agencies use

detailed staffing models, but most do not. Furthermore, they do not fully

consider embassy priorities or the overall workload requirements on the

embassy in determining where and how many staff are necessary.

Some agencies are entirely focused on the host country, while others have

regional responsibilities or function almost entirely outside the country in

which they are located. Some agencies have constant interaction with the

public, while others require interaction with their government

counterparts. Some agencies collaborate with other agencies to support

the embassy’s mission, while others act more independently and report

directly to Washington. Analyzing where and how agencies conduct their

business overseas may lead to possible rightsizing options. For example,

the mission of the National Science Foundation involves interaction with

persons throughout Europe and Eurasia and therefore raises the question

of whether it needs Paris-based staff.

The President’s Management Agenda noted that the full costs of sending

staff overseas are unknown. The Deputy Director of OMB testified that

there is a wide disparity among agencies’ reported costs for a new position

overseas.13 Without comprehensive cost data, decision makers cannot

determine the correlation between costs and the work being performed,

nor can they assess the short- and long-term costs associated with feasible

business alternatives.

We agree with the President’s Management Agenda that staffing decisions

need to include a full range of factors affecting the value of U.S. presence

in a particular country, including the costs of operating the embassy.

However, we found no mechanism to provide the ambassador and other

decision makers with comprehensive data on all agencies’ costs of

 13Dorn, May 1, 2002.

How Do Agencies Determine

Staffing Levels?

Could an Agency’s Mission Be

Pursued in Other Ways?

Cost of Operations

What Are an Embassy’s

Operating Costs?
Page 9 GAO-02-780 Overseas Presence

operations at an embassy. This lack of consolidated cost data for

individual embassies makes linking costs to staffing levels, embassy

priorities, and desired outcomes impossible. This is a long-standing

management weakness that, according to the President, needs to be

corrected. Our work in Paris demonstrates that this embassy is operating

without fundamental knowledge and use of comprehensive cost data.

State officials concurred that it is difficult to fully record the cost of all

agencies overseas because of inconsistent accounting and budgeting

systems. Nevertheless, we were able to document an estimated total cost

for all agencies operating in France in fiscal year 2001 at more than $100

million. To do this, we developed a template in consultation with State and

OMB to capture different categories of operating costs, such as salaries

and benefits, and applied the template to each agency at the embassy.

Once costs are known, it is important to relate them to the embassy’s

performance. This will allow decision makers to (1) assess the relative

cost-effectiveness of various program and support functions and (2) make

cost-based decisions when setting mission priorities and staffing levels

and determining the feasibility of alternative business approaches. With

comprehensive data, State and other agencies could make cost-based

decisions at the embassy level as well as on a global basis.

Analyses of security, mission, and cost may suggest the need for more or

fewer staff at an embassy or an adjustment to the overall staff mix.

Independent analysis of each element can lead to changes. However, all

three elements of the framework need to be considered together to make

reasonable decisions regarding staff size. For example, if the security

element is considered in isolation and existing facilities are deemed highly

vulnerable, managers may first consider adding security enhancements to

existing buildings; working with host country law enforcement agencies to

increase embassy protection; reconfiguring existing space to

accommodate more people in secure space; and leasing, purchasing, or

constructing new buildings. However, consideration of all elements of the

framework may suggest additional means for reducing security

vulnerabilities, such as reducing the total number of staff. Our framework

encourages consideration of a full range of options along with the security,

mission, and cost trade-offs.

Our framework is consistent with the views of rightsizing experts who

have recommended that embassies consider alternative means of fulfilling

mission requirements. For example, OPAP concluded that staff reductions

should be considered as a means of improving security, and the Chairman

Are Costs Commensurate with

Expected Outcomes?

Rightsizing Options
Page 10 GAO-02-780 Overseas Presence

of OPAP, in May 2002 testimony, supported elimination of some functions

or performing functions from regional centers or the United States.14

Moreover, President Bush has told U.S. ambassadors that “functions that

can be performed by personnel in the U.S. or at regional offices overseas

should not be performed at a post.” Our analysis highlights five possible

rightsizing options to carry out these goals, but this list is not exhaustive.

These suggested options include

1. relocating functions to the United States,

2. relocating functions to regional centers,

3. relocating functions to other locations under chief of mission authority

where relocation back to the United States or to regional centers is not

practical,

4. purchasing services from the private sector, and

5. changing business practices.

Our case study at the Paris embassy illustrates the applicability of these

options, which have the potential to reduce the number of vulnerable staff

in the embassy buildings. These options may be applicable to as many as

210 positions in Paris. The work of about 120 staff could be relocated to

the United States—State already plans to relocate the work of more than

100 of these employees. In addition, the work of about 40 other positions

could be handled from other locations in Europe, while more than 50 other

positions are commercial in nature and provide services that are available

in the private sector. For example:

• Some functions at the Paris embassy could be relocated to the United

States. State is planning to relocate more than 100 budget and finance

positions from the Financial Services Center in Paris to State’s financial

center in Charleston, South Carolina, by September 2003. In addition, we

identified other agencies that perform similar financial functions and

could probably be relocated. For example, four Voice of America staff

provide payroll services to correspondent bureaus and freelance reporters

around the world and would benefit from collocation with State’s

Financial Services Center.

 14Kaden, May 1, 2002.
Page 11 GAO-02-780 Overseas Presence

• The Paris embassy could potentially relocate some functions to the

regional logistics center in Antwerp, Belgium, and the planned 23-acre

secure regional facility in Frankfurt, Germany, which has the capacity for

approximately 1,000 people. The Antwerp facility could handle part of the

embassy’s extensive warehouse operation, which is currently supported

by about 25 people. In addition, some administrative operations at the

embassy, such as procurement, could potentially be handled out of the

Frankfurt facility. Furthermore, staff at agencies with regional missions

could also be moved to Frankfurt. These staff include a National Science

Foundation representative who spent approximately 40 percent of his time

in 2001 outside of France; four staff who provide budget and finance

support to embassies in Africa; and some Secret Service agents who cover

eastern Europe, central Asia, and parts of Africa.

• There are additional positions in Paris that may not need to be in the

primary embassy buildings where secure space is at a premium. The

primary function of the National Aeronautics and Space Administration

representative is to act as a liaison to European space partners.

Accomplishing this work may not require retaining office space at the

embassy. In fact, the American Battle Monuments Commission has already

established a precedent for this, housing about 25 staff in separate office

space in a suburb of Paris. In addition, a Department of Justice official

works in an office at the French Ministry of Justice. However, dispersing

staff raises additional security issues that need to be considered.15

• Given Paris’s modern transportation and communication links and large

private-sector service industry, the embassy may be able to purchase

services from the private sector, which would reduce the number of fulltime staff at risk at the embassy if the services can be performed from

another location.16 We identified as many as 50 positions at the embassy

 15Following the 1998 embassy bombings, a provision was passed into law, codified at 22

U.S.C. § 4865, that requires the Secretary of State, in selecting a site for any new U.S.

diplomatic facilities abroad, to ensure that all U.S. personnel under chiefs of mission

authority be located on the site. However, the Secretary of State may waive this

requirement, if the Secretary, together with the heads of those agencies with personnel

who would be located off site, determine that security considerations permit it and that it is

in the U.S. national interests.

16With enactment of the Federal Activities Inventory Reform Act of 1998 (P.L. 105-270),

Congress mandated that U.S. government agencies identify activities within each office that

are not “inherently governmental,” that is, commercial activities. Competitive sourcing

involves using competition to determine whether a commercial activity should be

performed by government personnel or contractors. The President’s Management Agenda

states that competition historically has resulted in a 20- to 50-percent cost savings for the

government.
Page 12 GAO-02-780 Overseas Presence

that officials in Washington and Paris agreed are commercial in nature,

including painters, electricians, plumbers, and supply clerks.

• Reengineering business functions could help reduce the size of the Paris

embassy. Consolidating inventories at the warehouse could decrease staff

workload. For instance, household appliances and furniture are

maintained separately by agency with different warehouse staff

responsible for different inventories. Purchasing furniture locally17 for

embassies such as Paris could also reduce staffing and other support

requirements.

Advances in technology, increased use of the Internet, and more flights

from the United States may reduce the need for certain full-time

permanent staff overseas. Moreover, we have identified opportunities to

streamline or reengineer embassy functions to improve State’s operations

and reduce administrative staffing requirements, particularly in western

Europe, through measures that would reduce residential housing and

furniture costs.18 We reported in March 200119 that State has a number of

outmoded and inefficient business processes. Our cost analyses of the U.S.

embassy’s housing office in Brussels and the housing support function at

the U.S. embassy in London illustrated how reengineering could

potentially result in significant savings.

To implement the President’s Management Agenda, OMB and State have

indicated that they plan to assess staffing requirements, costs, and options

at embassies in Europe and Eurasia. As part of this effort, they are

attempting to identify staff who could be relocated to the planned regional

facility in Frankfurt. Applying our framework in this effort would provide

a systematic means of assessing staff levels and considering embassy costs

and relocation and other rightsizing options. Furthermore, OMB and State

have other initiatives under way that will make it easier to use the

framework in the future. For example, to make it easier to consider the

 17State currently has a central contract requiring that all overseas posts purchase furniture

from the United States and not from local sources. Logistics management officials at State

said that the contract is currently under renegotiation and that the revised agreement will

include local procurement allowances for pilot posts.

18U.S. General Accounting Office, State Department: Options for Reducing Overseas

Housing and Furniture Costs, GAO/NSIAD-98-128 (Washington, D.C.: July 31, 1998).

19U.S. General Accounting Office, Supporting Congressional Oversight: Framework for

Considering Budgetary Implications of Selected GAO Work, GAO-01-447 (Washington,

D.C.: May 9, 2001).

Rightsizing

Framework

Complements OMB

Initiatives
Page 13 GAO-02-780 Overseas Presence

costs of the U.S. overseas presence, OMB is gathering data on overseas

costs for each agency and the costs of establishing new positions, and is

assessing the process by which agencies request funding to assign

additional staff overseas. To help assess mission priorities and workload,

OMB and State are reviewing how embassies have implemented the

revised MPPs, which are designed to more clearly set priorities, and how

these plans could be used to determine allocation of embassy resources.

We plan to monitor OMB’s progress in implementing the rightsizing

initiative and work with it to incorporate comprehensive cost data into the

overseas staffing process.

Our rightsizing framework was designed to allow decision makers to

systematically link embassy staffing levels and requirements to three

critical elements of embassy operations—physical security, mission

priorities and requirements, and cost. Using our framework’s common set

of criteria for making staffing assessments and adjustments would be an

important step toward establishing greater accountability and

transparency in the overseas staffing process. The key questions of the

framework will help decision makers identify the most important factors

affecting an embassy’s staffing levels and consider rightsizing options to

either add or reduce staff or adjust the staff mix. Rightsizing experts told

us that the framework appears applicable to all embassies. Although we

have tested it only at the U.S. embassy in Paris and are in the process of

refining it, we too believe that the framework can provide guidance for

executive branch rightsizing exercises at other embassies.

To facilitate the use of a common set of criteria for making staff

assessments and adjustments at overseas posts and encourage decision

makers to consider security, mission priorities and requirements, and

costs, we recommend that the Director of the Office of Management and

Budget ensure that our framework is used as a basis for assessing staffing

levels in the administration’s rightsizing initiative, starting with its

assessments of staffing levels and rightsizing options at U.S. embassies in

Europe and Eurasia.

OMB and State provided written comments on a draft of this report (see

apps. III and IV). OMB said that it appreciated our efforts to develop a

rightsizing framework. OMB agreed with the framework’s key elements

and options and plans to build upon the framework in examining staffing

at all posts within the European and Eurasia Bureau. However, OMB

Conclusion

Recommendation for

Executive Action

Agency Comments

and Our Evaluation
Page 14 GAO-02-780 Overseas Presence

expressed concern regarding whether the GAO methodology can be

uniformly applied at all posts worldwide. Nonetheless, OMB noted that it

looks forward to working with us and the State Department in using the

framework as a starting point to develop a broader methodology that can

be applied worldwide.

State said that it welcomed our work in developing a framework for

rightsizing. State noted the difficulties of previous efforts to develop a

methodology, including attempts by the Overseas Presence Advisory Panel

and a State-led interagency rightsizing committee. It stated that it has

taken steps to regionalize responsibilities in the United States and

overseas where appropriate. In addition, State provided technical

comments that we have incorporated into this report, as appropriate.

To develop the elements of the rightsizing framework and corresponding

checklist of suggested questions, we analyzed previous reports on

overseas staffing issues, including those of the Accountability Review

Boards, OPAP, and the State-led interagency rightsizing committee. We

interviewed officials from OMB to discuss the administration’s current

rightsizing initiatives in relation to the President’s Management Agenda.

We discussed embassy staffing with rightsizing experts, including the

Chairman of OPAP and the current and former Undersecretary of State for

Management. We also interviewed officials from the Departments of State,

Defense, the Treasury, Commerce, Justice, and Agriculture as well as

officials from other agencies with personnel in France.

To further develop and test the framework, we conducted a case study at

the U.S. embassy in Paris. To assess embassy security, we reviewed

security reports, interviewed security experts, and made direct

observations. To assess missions’ priorities and requirements, we

interviewed and collected data from the U.S. Ambassador to France, the

Deputy Chief of Mission, and other high-ranking embassy officials as well

as officials from more than 35 sections at the Paris embassy. We also

interviewed agency officials in Washington, D.C., and in Paris to determine

the criteria used by agencies to set staffing levels at the Paris embassy. To

assess costs, we interviewed budget and financial management officials

from State and collected data on the different categories of operating

costs, such as salaries and benefits, from each agency with staff assigned

to the Paris embassy. To determine the feasibility of rightsizing actions, we

collected and analyzed data associated with (1) relocating certain

functions to the United States, regional centers in Europe, or other

locations in France and (2) outsourcing or streamlining some functions.

Scope and

Methodology
Page 15 GAO-02-780 Overseas Presence

We visited State’s regional logistics and procurement offices in Antwerp,

Belgium, and Frankfurt, Germany, which have been considered as options

for expanded regional operations in Europe. To determine if opportunities

exist to outsource functions, we collected and analyzed data on the

business and staffing practices of Paris-based businesses, other U.S.

embassies in western Europe, and other bilateral diplomatic missions in

Paris.

We conducted our work between September 2001 and May 2002 in

accordance with generally accepted government auditing standards.

We are sending copies of this report to other interested Members of

Congress. We are also sending copies of this report to the Director of OMB

and the Secretary of State. Copies will be made 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 me

on (202) 512-4128. Another GAO contact and staff acknowledgments are

listed in appendix V.

Sincerely yours,

Jess T. Ford

Director, International Affairs and Trade
Appendix I: Timeline of Rightsizing Initiatives

since the 1998 Embassy Bombings

Page 16 GAO-02-780 Overseas Presence

Time frame Initiative

January 1999 Following the bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, that

killed more than 220, including 12 Americans, and injured more than 4,000, the Accountability Review

Boards recommended that the Department of State look into decreasing the size and number of

embassies and consulates to reduce employees’ vulnerability to attack.

November 1999 The Overseas Presence Advisory Panel (OPAP) reported that overseas staffing levels had not been

adjusted to reflect changing missions and requirements; thus, some embassies were too large and

some were too small. OPAP said rightsizing was an essential component of an overall program to

upgrade embassy and consulate capabilities, and it recommended that this be a key strategy to improve

security by reducing the number of staff at risk. OPAP also viewed rightsizing as a way to decrease

operating costs by as much as $380 million annually if a 10 percent worldwide staffing reduction could

be achieved.

February 2000 President Clinton directed the Secretary of State to lead an interagency effort to (1) develop a

methodology for assessing embassy staffing and (2) recommend adjustments, if necessary, to staffing

levels at six pilot study embassies. We reported that the interagency committee was not successful in

developing such a methodology. Although the committee concluded that it was impractical to develop a

standard approach because of differences among embassies, we reported that the pilot studies had

limited value because they were conducted without focused, written guidelines, and committee members

did not spend enough time at each embassy for a thorough evaluation.

August 2001 The President’s Management Agenda identified rightsizing as one of the administration’s management

priorities. President Bush directed the Office of Management and Budget (OMB) to collect, analyze, and

review overall U.S. government staffing to help reconfigure overseas staff allocation to the minimum

number necessary to achieve U.S. foreign policy goals.

February 2002 The President’s fiscal year 2003 international affairs budget highlighted the importance of making

staffing decisions on the basis of mission priorities and costs and directed OMB to analyze agencies’

overseas staffing and operating costs.

Sources: GAO analysis of the reports of the Accountability Review Boards, OPAP, and the

Interagency Committee and of the President’s Management Agenda and the fiscal year 2003

international affairs budget.

Appendix I: Timeline of Rightsizing Initiatives

since the 1998 Embassy Bombings
Appendix II: Rightsizing Framework and

Corresponding Questions

Page 17 GAO-02-780 Overseas Presence

Physical/technical security of facilities and employees

What is the threat and security profile of the embassy?

Has the ability to protect personnel been a factor in determining staffing levels at the embassy?

To what extent are existing office buildings secure?

Is existing space being optimally utilized?

Have all practical options for improving the security of facilities been considered?

Do issues involving facility security put the staff at an unacceptable level of risk or limit mission accomplishment?

Do security vulnerabilities suggest the need to reduce or relocate staff?

Mission priorities and requirements

What are the staffing levels and mission of each agency?

How do agencies determine embassy staffing levels?

Is there an adequate justification for the number of employees at each agency compared with the agency’s mission?

Is there adequate justification for the number of direct hire personnel devoted to support and administrative operations?

What are the priorities of the embassy?a

Does each agency’s mission reinforce embassy priorities?

To what extent are mission priorities not being sufficiently addressed due to staffing limitations or other impediments?

To what extent are workload requirements validated and prioritized and is the embassy able to balance them with core functions?

Do the activities of any agencies overlap?

Given embassy priorities and the staffing profile, are increases in the number of existing staff or additional agency representation

needed?

To what extent is it necessary for each agency to maintain its current presence in country, given the scope of its responsibilities

and its mission?

- Could an agency’s mission be pursued in other ways?

- Does an agency have regional responsibilities or is its mission entirely focused on the host country?

Cost of operations

What is the embassy’s total annual operating cost?

What are the operating costs for each agency at the embassy?

To what extent are agencies considering the full cost of operations in making staffing decisions?

To what extent are costs commensurate with overall embassy strategic importance, with agency programs, and with specific

products and services?

Consideration of rightsizing options

What are the security, mission, and cost implications of relocating certain functions to the United States, regional centers, or to

other locations, such as commercial space or host country counterpart agencies?

To what extent could agency program and/or routine administrative functions (procurement, logistics, and financial management

functions) be handled from a regional center or other locations?

Do new technologies and transportation links offer greater opportunities for operational support from other locations?

Do the host country and regional environments suggest there are options for doing business differently, that is, are there adequate

transportation and communications links and a vibrant private sector?

To what extent is it practical to purchase embassy services from the private sector?

Does the ratio of support staff to program staff at the embassy suggest opportunities for streamlining?

Can functions be reengineered to provide greater efficiencies and reduce requirements for personnel?

Are there best practices of other bilateral embassies or private corporations that could be adapted by the U.S. embassy?

To what extent are there U.S. or host country legal, policy, or procedural obstacles that may impact the feasibility of rightsizing

options?

a

Embassy priorities are the U.S. government priorities in that country.

Source: GAO.

Appendix II: Rightsizing Framework and

Corresponding Questions
Appendix III: Comments from the Office of

Management and Budget

Page 18 GAO-02-780 Overseas Presence

Appendix III: Comments from the Office of

Management and Budget
Appendix III: Comments from the Office of

Management and Budget

Page 19 GAO-02-780 Overseas Presence
Appendix IV: Comments from the Department

of State

Page 20 GAO-02-780 Overseas Presence

Appendix IV: Comments from the

Department of State

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.
Appendix IV: Comments from the Department

of State

Page 21 GAO-02-780 Overseas Presence
Appendix IV: Comments from the Department

of State

Page 22 GAO-02-780 Overseas Presence
Appendix IV: Comments from the Department

of State

Page 23 GAO-02-780 Overseas Presence

See comment 1.
Appendix IV: Comments from the Department

of State

Page 24 GAO-02-780 Overseas Presence
Appendix IV: Comments from the Department

of State

Page 25 GAO-02-780 Overseas Presence

See comment 2.
Appendix IV: Comments from the Department

of State

Page 26 GAO-02-780 Overseas Presence

The following are GAO’s comments on the Department of State’s letter

dated July 9, 2002.

1. We did not set priorities for the elements in the framework that appear

in this report. As we state on page 9, decision makers need to consider

all three elements of the framework together to make reasonable

decisions regarding staff size.

2. In the mission priorities and requirements section, the framework

includes the question, “To what extent is it necessary for each agency

to maintain its current presence in country?” The amount of time that

officials spend in country is a key factor needed to answer the question

and in this case the location of the National Science Foundation’s

representative in Paris warranted further analysis as a possible

candidate for rightsizing. The mandate of the National Science

Foundation representative is to communicate with bilateral and

multilateral counterpart agencies in more than 35 countries in Europe

and Eurasia. The representative stated that he could do his job from

any location in Europe, as long as he has high-speed internet

connectivity. Given security limitations at facilities in Paris and the

availability, in the near future, of secure space in Frankfurt, Germany,

decision makers should consider these types of positions for

relocation.

GAO’s Comments
Appendix V: GAO Contact and Staff

Acknowledgments

Page 27 GAO-02-780 Overseas Presence

John Brummet (202) 512-5260

In addition to the person named above, David G. Bernet, Janey Cohen,

Chris Hall, Katie Hartsburg, Lynn Moore, and Melissa Pickworth made key

contributions to this report.

Appendix V: GAO Contact and Staff

Acknowledgments

GAO Contact

Staff

Acknowledgments

(320123)
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