Report to the Chairman, Subcommittee 

on National Security, Emerging 

Threats, and International Relations, 

Committee on Government Reform, 

House of Representatives 

United States General Accounting Office 

GAO 

April 2003 EMBASSY 

CONSTRUCTION 

Process for 

Determining Staffing 

Requirements Needs 

Improvement 

GAO-03-411 
U.S. agencies’ staffing projections for new embassy compounds are 

developed without a systematic approach or comprehensive rightsizing 

analyses. State’s headquarters gave embassies little guidance on factors to 

consider in developing projections, and thus U.S. agencies did not take a 

consistent or systematic approach to determining long-term staffing needs. 

Officials from each of the 14 posts GAO contacted reported that their 

headquarters bureaus had not provided specific, formal guidance on 

important factors to consider when developing staffing projections. The 

process was further complicated by the frequent turnover of embassy 

personnel who did not maintain documentation on projection exercises. 

Finally, staffing projections were not consistently vetted with all other 

agencies’ headquarters. Because of these deficiencies, the government could 

construct wrong-sized buildings. In fact, officials at two embassies GAO 

visited said that due to poor projections, their sites may be inadequate 

almost immediately after staff move onto the new compound. 

State has proposed a cost-sharing plan that would require federal agencies to 

help fund new embassy construction. The Office of Management and Budget 

(OMB) is leading an interagency committee to develop a cost-sharing 

mechanism that would provide more discipline when determining overseas 

staffing needs and encourage agencies to think more carefully before posting 

personnel overseas. Numerous issues will need to be resolved for such a 

program to be successful, including how to structure the program and how 

payments will be made. 

Map of New Embassy CompoundConstruction Projects, Fiscal Years 1999 through 2004 

Funding 

a

Indicates projects for which State has requested funding in fiscal year 2004. 

EMBASSY CONSTRUCTION 

Process for Determining Staffing 

Requirements Needs Improvement 

www.gao.gov/cgi-bin/getrpt?GAO-03-411.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Jess T. Ford at 

(202) 512-4128 or fordj@gao.gov. 

Highlights of GAO-03-411, a report to the 

Chairman, Subcommittee on National 

Security, Emerging Threats, and 

International Relations, House Committee 

on Government Reform 

April 2003 

The 1998 terrorist attacks on two 

U.S. embassies in Africa 

highlighted security deficiencies in 

diplomatic facilities, leading the 

Department of State to embark on 

an estimated $16 billion embassy 

construction program. The 

program’s key objective is to 

provide safe, secure, and costeffective buildings for employees 

overseas. Given that the size and 

cost of new facilities are directly 

related to agencies’ anticipated 

staffing needs, it is imperative that 

future requirements be projected as 

accurately as possible. 

GAO was asked to (1) assess 

whether State and other federal 

agencies have adopted a 

disciplined process for determining 

future staffing requirements and (2) 

review cost-sharing proposals for 

agencies with overseas staff. 

GAO recommends that the 

Department of State (1) develop 

standard and comprehensive 

guidance for projecting staffing 

requirements, (2) require the 

retention of documentation on how 

embassies determined these 

requirements, and (3) ensure that 

all staffing projections have been 

validated. 

We received comments from State, 

OMB, and the U.S. Agency for 

International Development, all of 

which generally agreed with our 

conclusions and recommendations. 
Page i GAO-03-411 Linking Staffing Needs to Embassy Construction 

Letter 1

Results in Brief 2

Background 4

Systematic Effort to Project Staffing Needs for New Embassies Is 

Lacking 12

Government Aims to Distribute Costs of Overseas Facilities among 

Users 20

Conclusions 25

Recommendations for Executive Action 25

Agency Comments and Our Evaluation 26

Scope and Methodology 27

Appendix I Standard Embassy Compound Design 30 

Appendix II Comments from the Department of State 31 

Appendix III Comments from the U.S. Agency for International 

Development 34 

Appendix IV GAO Contact and Staff Acknowledgments 37 

GAO Contact 37

Staff Acknowledgments 37

Table 

Table 1: Notional Distribution of Costs under State’s Capital 

Security Cost-sharing Proposal Based on a May 2001 

Overseas Personnel Survey 22

Figures 

Figure 1: Map of New Embassy Compound Construction Projects, 

Fiscal Years 1999 through 2004 Funding 6

Figure 2: Major Milestones in Planning for a New Embassy 

Compound Scheduled for Fiscal Year 2007 Funding 9

Contents 
Page ii GAO-03-411 Linking Staffing Needs to Embassy Construction 

Figure 3: Components of OBO’s Staffing Projection Process 11

Figure 4: Standard Design for New Embassy Compounds 30

Abbreviations 

ICASS International Cooperative Administrative Support Services 

OBO Bureau of Overseas Buildings Operations 

OMB Office of Management and Budget 

OPAP Overseas Presence Advisory Panel 

USAID U.S. Agency for International Development 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-03-411 Linking Staffing Needs to Embassy Construction 

April 7, 2003 

The Honorable Christopher Shays 

Chairman, Subcommittee on National Security, 

 Emerging Threats, and International Relations 

Committee on Government Reform 

House of Representatives 

Dear Mr. Chairman: 

As a result of the 1998 terrorist attacks on two U.S. embassies in Africa, 

which highlighted the security deficiencies in U.S. diplomatic facilities, the 

Department of State has embarked on an estimated $16 billion embassy 

construction program, the largest program of its kind in the department’s 

history. The program’s key objective is to provide safe, secure, and costeffective buildings for employees working overseas. Given that the size 

and cost of new facilities are directly related to anticipated staffing 

requirements for these posts, it is imperative that future staffing needs be 

projected as accurately as possible. 

In August 2001, the President identified rightsizing1

 of embassies and 

consulates as one of his management priorities.2

 One of the goals of this 

initiative is to develop accurate staffing projections for new overseas 

construction. In July 2002, we developed a framework for assessing 

embassy staff levels to help support rightsizing initiatives for existing 

facilities.3

 However, developing staffing requirements for a new embassy is 

much more difficult than for an existing facility because it requires 

managers to project staffing needs 5 to 7 years in the future. 

In response to your concerns, we assessed whether State and other federal 

agencies have adopted a disciplined process for determining staffing 

 1

We define rightsizing as aligning the number and location of staff at U.S. embassies and 

consulates with foreign policy goals. See U.S. General Accounting Office, Overseas 

Presence: Framework for Assessing Embassy Staff Levels Can Support Rightsizing 

Initiatives, GAO-02-780 (Washington, D.C.: July 26, 2002). 

2

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

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

3

GAO-02-780. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-411 Linking Staffing Needs to Embassy Construction 

requirements for new embassies and consulates. We also reviewed costsharing proposals for agencies with overseas staff. To meet these 

objectives, we collected documentation from and conducted interviews 

with executive branch agencies in Washington, D.C., including the 

Departments of State, Defense, Justice, and others, regarding future 

staffing requirements, the projection process, and the extent to which cost 

considerations were factored into the decision-making process. To assess 

agencies’ actions in developing staffing requirements, we visited seven 

U.S. posts and contacted seven additional embassies in a range of 

geographic regions, all of which are slated for new compounds. These 

posts represent about 16 percent of the new embassy compound projects 

in State’s construction plan for fiscal years 2002 through 2007, and 23 

percent of these projects are expected to be funded by fiscal year 2005. 

U.S. agencies’ staffing projections for new embassy compounds are 

developed without a systematic approach or comprehensive rightsizing 

analyses. Officials at the embassies we visited approached the process in 

different ways. For example, some embassies solicited input from all 

agencies and held several meetings to discuss future needs, while others 

developed requirements without serious effort or review. Although 

embassies play a key role in the projection process, State Department 

headquarters officials provide chiefs of mission4

 with little formal guidance 

on factors to consider when setting requirements, nor do they stress the 

importance of accurate projections. Moreover, at each of the seven posts 

we visited, we found little or no documentation to show that staff had 

completed a comprehensive assessment of the number and types of people 

they would need in the year that their embassy would be completed. In 

fact, a failure to account for recent growth in current staffing levels at one 

embassy we visited led to final projections that were too low and may 

result in significant overcrowding in the new facility. In addition, State’s 

 4

According 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). 

Results in Brief 
Page 3 GAO-03-411 Linking Staffing Needs to Embassy Construction 

geographic bureaus5 are not consistently reviewing and validating 

projections to ensure that they accurately reflect future requirements. 

Finally, additional factors complicate the projection process, including the 

frequent turnover of embassy personnel and other breakdowns in 

communication among multiple agencies with differing requirements on 

new embassy compounds. Building secure and modern facilities for U.S. 

government employees working overseas is extremely important and will 

require a significant investment. However, without a systematic process, 

the U.S. government risks building wrong-sized facilities, which could lead 

to security concerns, additional costs, and other work inefficiencies. 

The State Department has proposed the Capital Security Cost-sharing Plan 

that would require federal agencies to help fund its embassy construction 

program. Currently, other U.S. agencies are not required to fund capital 

improvements to overseas facilities. The Office of Management and 

Budget (OMB) is working with State and other agencies through an 

interagency committee to develop a cost-sharing mechanism that would 

provide more discipline when determining U.S. government overseas 

staffing needs. The administration has committed to implementing greater 

cost sharing among agencies that use overseas facilities because it 

believes that if agencies are required to pay a greater share of the costs 

associated with their overseas presence, they will weigh cost 

considerations more carefully before posting personnel overseas. The 

interagency committee will consider State’s and others’ proposals when 

developing a new cost-sharing mechanism. There are numerous issues that 

will need to be resolved for a cost-sharing program to be successful, such 

as how best to structure the program, how charges will be determined, 

and how payments will be made. 

This report contains recommendations to the Secretary of State that the 

department (1) develop standard and comprehensive guidance for 

projecting staffing requirements for new embassy compounds, (2) require 

the retention of documentation on how agencies and embassies 

determined these requirements and the rationales for the decisions, and 

 5

There are six geographically defined bureaus that report to the Undersecretary of State for 

Political Affairs—bureaus for Africa, East Asia and the Pacific, Europe and Eurasia, the 

Near East, South Asia, and the Western Hemisphere. The Assistant Secretaries of the 

geographic bureaus advise the Undersecretary and guide the operation of the U.S. 

diplomatic missions within their regional jurisdiction. They are assisted by Deputy 

Assistant Secretaries, office directors, post management officers, and country desk 

officers. These officials work closely with U.S. embassies and consulates and with foreign 

embassies in Washington, D.C. 
Page 4 GAO-03-411 Linking Staffing Needs to Embassy Construction 

(3) ensure chiefs of mission and State’s geographic bureaus certify that the 

projections have been reviewed and vetted before they are submitted to 

State’s Bureau of Overseas Buildings Operations (OBO). 

We received written comments from State and the U.S. Agency for 

International Development (USAID), which we have reprinted in 

appendixes II and III. We also received oral comments from OMB, which 

we have summarized at the end of this report. All three agencies agreed 

with our findings, conclusions, and recommendations. 

The 1998 terrorist bombings of the U.S. embassies in Kenya and Tanzania 

highlighted the compelling need for safe and secure overseas facilities. 

Following the bombings, two high-level independent groups cited 

problems at U.S. overseas facilities. In January 1999, the chairman of the 

Accountability Review Boards,6

 formed to investigate the bombings, 

reported that unless security vulnerabilities associated with U.S. overseas 

facilities were addressed, “U.S. Government employees and the public in 

many of our facilities abroad” would be at continued risk from further 

terrorist bombings.7

 Later that year, the Overseas Presence Advisory Panel 

(OPAP)8

 concluded that many U.S. overseas facilities are unsafe, 

overcrowded, deteriorating, and “shockingly shabby” and recommended 

major capital improvements and more accountability for security. In 

addition, the panel recommended that the United States consider 

rightsizing its overseas presence to reduce security vulnerabilities. In 

January 2001, we recommended that State develop a long-term capital 

construction plan to guide the multibillion dollar program to build new 

secure facilities.9

 We also reported in July 2002 on a rightsizing framework 

 6

Secretary of State Madeline Albright appointed the Accountability Review Boards to 

investigate the facts and circumstances surrounding the 1998 embassy bombings. 

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

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

7

Admiral William J. Crowe, Press Briefing on the Report of the Accountability Review 

Boards on the Embassy Bombings in Nairobi and Dar Es Salaam (Washington, D.C.: Jan. 

8, 1999). 

8

Secretary of State Albright established the Overseas Presence Advisory Panel following 

the 1998 embassy bombings in Africa to consider the organization and condition of U.S. 

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

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

9

U.S. General Accounting Office, Embassy Construction: Long-Term Planning Will 

Enhance Program Decision-making, GAO-01-11 (Washington, D.C.: Jan. 22, 2001). 

Background 
Page 5 GAO-03-411 Linking Staffing Needs to Embassy Construction 

we developed to facilitate the use of a common set of criteria for making 

staff assessments and adjustments at overseas posts, which included 

consideration of security, mission priorities and requirements, and costs. 

We recommended that OMB use the framework as a basis for assessing 

staffing levels at existing overseas posts.10

Figure 1 illustrates the locations worldwide for which State has received 

funding for new embassy compound construction in fiscal years 1999 

through 2003 and for which it has requested funding for projects in fiscal 

year 2004. 

 10GAO-02-780. 
Page 6 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Figure 1: Map of New Embassy Compound Construction Projects, Fiscal Years 1999 through 2004 Funding 

Note: The facilities in Cape Town, Istanbul, and Surabaya are U.S. consulates. We did not include 

other projects, such as the construction of new annex buildings on existing compounds, for which 

State has received or requested funding during this period. 

a

Indicates projects for which State has requested funding in fiscal year 2004. 
Page 7 GAO-03-411 Linking Staffing Needs to Embassy Construction 

In July 2001, State published its first Long-Range Overseas Building Plan, a 

planning document that outlines the U.S. government’s overseas facilities 

requirements and guides implementation of State’s expansive and 

unprecedented overseas construction program. This program aims to 

provide safe, secure, and cost-effective buildings for the thousands of U.S. 

employees working overseas. State identified the projects with the most 

compelling case for replacement and ranked them in the plan, which OBO 

plans to update annually as compounds are completed and new projects 

are added to the priority list.11 The current long-range plan describes 

building new embassy compounds at more than 70 locations during fiscal 

years 2002 through 2007.12 State estimates this will cost more than $6.2 

billion.13 Additional funding will be needed after this time to continue the 

program. 

State’s construction program of the late 1980s encountered lengthy delays 

and cost overruns in part because of a lack of coordinated planning of post 

requirements prior to approval and budgeting for construction projects. As 

we reported in 1991, meaningful planning began only after project budgets 

had been authorized and funded. As real needs were determined, changes 

in scope and increases in costs followed.14 OBO now requires that all 

staffing projections for new embassy compounds be finalized prior to 

submitting funding requests, which are sent to the Congress as part of 

State’s annual budget request each February. To accomplish this task, 

OBO requires that final staffing projections be submitted the previous 

spring. Figure 2 outlines the major milestones and highlights key dates in 

the planning and construction process for a new embassy compound 

scheduled for 2007 funding. As Figure 2 depicts, OBO will receive final 

staffing projections for fiscal year 2007 projects in spring 2005. Between 

spring 2005 and February 2006, OBO will develop more firm cost estimates 

 11Pursuant to the Secure Embassy Construction and Counterterrorism Act of 1999 (P.L. 

106-113), the State Department is required to identify embassies for replacement or major 

security enhancements. The first report was due to the Congress by February 1, 2000, as is 

each subsequent update through 2004. 

12According to State officials, OBO expects to issue an updated building plan for fiscal 

years 2003 through 2008 in late April 2003. 

13In total, there are about 260 diplomatic posts worldwide, including embassies, consulates, 

and other special missions and offices, such as the U.S. Mission to the European Union and 

the U.S. Office of the High Commissioner in Bosnia-Herzegovina. 

14U.S. General Accounting Office, State Department: Management Weaknesses in the 

Security Construction Program, GAO/NSIAD-92-2 (Washington, D.C.: Nov. 29, 1991). 
Page 8 GAO-03-411 Linking Staffing Needs to Embassy Construction 

for the project, vet the resulting funding requirements through OMB, and 

submit the funding request to the Congress. Appropriations for these fiscal 

year 2007 projects will not be secured until at least October 2006—18 

months after final projections are submitted—and construction may not 

begin for another 6 months. In total, OBO estimates that, in some cases, it 

could take 2 to 3 years from the time projections are finalized to actually 

begin construction of a new compound, which could take another 2 to 3 

years to complete. 
Page 9 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Figure 2: Major Milestones in Planning for a New Embassy Compound Scheduled 

for Fiscal Year 2007 Funding 

To ensure that projects in the long-range plan proceed on schedule and at 

cost, OBO will not request additional funding to accommodate changes 

made after funding requests are submitted to the Congress. Once OBO 

receives appropriations for construction projects, it moves immediately to 

complete the design of a new compound and secure a contracting firm for 

the project. Changes to staffing projections after this point may result in 
Page 10 GAO-03-411 Linking Staffing Needs to Embassy Construction 

redesign and could lead to lengthy delays and additional costs, according 

to an OBO official. For example, large changes generally require that 

materials already purchased for the project be replaced with new 

materials. According to OBO, there is little room for flexibility after the 

budget is submitted given budgetary and construction time frames. 

However, OBO does include a margin of error in the designs for all new 

embassy compounds, which typically allows for a 5-10 percent increase in 

building size to accommodate some additional growth. 

A key component of the planning process outlined in figure 2 is the 

development of staffing projections for new embassy compounds. Staffing 

projections present the number of staff likely to work in the facility and 

the type of work they will perform. These are the two primary drivers of 

the size and cost of new facilities. Individual embassies and consulates, in 

consultation with headquarters bureaus and offices, are responsible for 

developing the staffing projections, which OBO then uses to design the 

new compounds and prepare funding requests. As the government’s 

overseas real property manager, OBO must rely on the other bureaus in 

the State Department and other U.S. agencies for policy and staffing 

decisions. OBO is not in a position to independently validate the 

projections once the geographic bureaus have given their approval. 

To help ensure that new compounds are designed as accurately as 

possible, OBO designed a system for collecting future staffing 

requirements, as shown in figure 3, that encourages the active 

participation of embassy personnel, officials in State’s geographic bureaus, 

and officials from all other relevant federal agencies.15 This process also 

calls upon embassy management and geographic bureaus to review and 

validate all projections before submitting them to OBO. OBO generally 

gives embassies and geographic bureaus the opportunity to submit staffing 

projections several times before they are finalized. 

 15As the Overseas Presence Advisory Panel (OPAP) reported in 1999, there are more than 

30 federal departments or agencies operating overseas, including the Departments of State 

and Defense, as well as agencies such as the Federal Bureau of Investigation, the U.S. 

Commercial Service, and the Foreign Agricultural Service. 
Page 11 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Figure 3: Components of OBO’s Staffing Projection Process 

Finally, it should be noted that while OBO takes the lead in designing and 

constructing all buildings on new embassy compounds, OBO is not always 

responsible for securing funding for all compound buildings. Pursuant to 

an informal agreement between OBO and USAID, USAID will secure 

funding for a separate annex in a compound when it requires desk space 

for 50 or more employees. However, if USAID projects it will need fewer 

than 50 desks, its offices will be in the chancery building in the compound, 

which State would fund, as it would for all U.S. government agencies in 
Page 12 GAO-03-411 Linking Staffing Needs to Embassy Construction 

the chancery. According to OBO and USAID headquarters officials, there is 

some flexibility in the maximum number of USAID desk spaces allowed in 

a chancery, and this issue is handled on a case-by-case basis. 

Although OBO has designed a reasonable approach to developing staffing 

projections, we found that it was not adopted uniformly across all of the 

embassies and geographic bureaus that we studied. While some of the 

embassies we examined have conducted relatively thorough analyses of 

their future needs, in other cases the process has been managed poorly, 

both in the field and at headquarters offices, thus raising concerns about 

the validity of the projected requirements. For example, with few 

exceptions, officials at the posts we visited did not appreciate the 

seriousness of the staffing projection process as it relates to the size and 

cost of new diplomatic facilities. Moreover, none of the embassies we 

contacted received formal, detailed guidance on how to develop 

projections. In addition, they had no systematic approach, such as the one 

presented in our framework, to conducting rightsizing analyses that would 

ensure that projected needs are the minimum necessary to support U.S. 

national security interests. In general, for the embassies we contacted, 

rightsizing exercises were largely limited to predictions of future 

workload, priorities, and funding levels, and did not include analyses of 

other factors, such as operational costs. Moreover, none of the embassies 

we contacted conducted a rightsizing analysis of existing staffing levels 

prior to projecting future requirements. We also found that posts did not 

maintain documentation of the assessments they conducted when 

completing staffing projections, and that State’s geographic bureaus did 

not consistently vet posts’ projections prior to submitting them to OBO. 

Finally, the process was further complicated by other factors, such as 

frequent personnel turnover and breakdowns in communication among 

multiple agencies. 

We found that staffing projection exercises were not consistent across all 

of the embassies we contacted, and, indeed, State officials acknowledged 

that efforts to develop and validate projections were informal and 

undisciplined. Some embassy management teams were more engaged in 

the projection process than others. For instance, at several of the U.S. 

embassies we contacted, chiefs of mission or deputy chiefs of mission led 

interagency, or country team, meetings to discuss the embassy’s long-term 

priorities and the staffing implications. In addition, management followed 

up with agency representatives in one-on-one meetings to discuss each 

agency’s projected requirements. However, management teams at other 

Systematic Effort to 

Project Staffing Needs 

for New Embassies Is 

Lacking 

Efforts to Develop Staffing 

Projections Vary 

Significantly across 

Embassies and Geographic 

Bureaus 
Page 13 GAO-03-411 Linking Staffing Needs to Embassy Construction 

embassies we contacted, such as the U.S. embassies in Belgrade, Serbia 

and Montenegro, and Tbilisi, Georgia, were less engaged and had relied 

mainly on administrative officers to collect information from each agency 

informally. In Belgrade, officials acknowledged that the projection 

exercise was not taken seriously and that projections were not developed 

using a disciplined approach. In Tbilisi, a failure to document recent 

growth in current staffing levels led to final projections that were too low. 

OBO has had to meet immediate additional requirements by using all of 

the growth space it built into the original compound design and reducing 

the amount of common space, such as conference rooms, to accommodate 

additional offices. Therefore, the new facility may be overcrowded upon 

opening, embassy officials said. If embassy or headquarters officials 

communicated earlier to OBO the likelihood of large staffing increases by 

the time construction was completed, OBO might have been able to better 

accommodate these needs in its plans. 

In addition to inconsistencies in the field, we found that officials in the 

geographic bureaus in Washington, D.C., whose staff are responsible for 

working most closely with embassies and consulates, also have varied 

levels of involvement in the projection process. Officials with whom we 

spoke in State’s geographic bureaus acknowledged that there is no 

mechanism to ensure the full participation of all relevant parties. When 

these officials were more involved, we have more confidence in the 

accuracy of the projections submitted to OBO. For example, officials from 

the U.S. Embassy in Beijing, China, said that representatives from their 

geographic bureau in Washington, D.C., have been very involved in 

developing their projections. They reported that the geographic bureau 

contacted all federal agencies that might be tenants at the new embassy—

even agencies that currently have no staff in the country—to determine 

their projected staffing needs. Conversely, officials at Embassy Belgrade 

said State’s geographic bureau did not request any justifications for or 

provide any input into the final projections submitted to OBO. Officials in 

the geographic bureau acknowledged that the bureau does not require 

formal justification for embassies’ projected staffing requirements for new 

compounds. Given the weaknesses in how staffing projections were 

developed in Embassy Belgrade, State has little assurance that the planned 

compound will be the right size. 
Page 14 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Our analysis indicates that the State Department is not providing 

embassies with sufficient formal guidance on important time lines in the 

projection process or factors to consider when developing staffing 

projections for new embassy compounds. Officials from each of the 14 

posts we contacted reported that their headquarters bureaus had not 

provided specific, formal guidance on important factors to consider when 

developing staffing projections. One geographic bureau provided its 

embassies with a brief primer on the process by which State determines 

priorities for new embassy compounds that broadly described the 

projection process and OBO’s long-range plan. However, we found that 

State generally did not advise embassies to consider factors such as (1) 

anticipated changes in funding levels, (2) the likelihood that policy 

changes could result in additional or fewer work requirements, (3) 

linkages between agencies’ annual operating costs and the achievement of 

embassy goals, (4) costs associated with their presence in a new facility, 

or (5) alternative ways to consolidate certain positions among neighboring 

embassies, among others. Absent such guidance from Washington, D.C., 

we found that factors that embassy officials considered when developing 

projections varied on a case-by-case basis. Officials at Embassy Sarajevo, 

for example, conducted a relatively thorough analysis of their future 

needs, including consulting World Bank indicators for Bosnia-Herzegovina 

to determine the likelihood of increased U.S. investment in the region and 

link future staffing needs accordingly. In addition, a consular affairs 

officer analyzed the likelihood that new security requirements for consular 

sections, which may allow only American consular officers to screen visa 

applicants, would boost that section’s staffing requirements. 

Other embassies we contacted conducted less thorough analyses of future 

needs. For example, officials from several of the other embassies we 

contacted reported that they largely relied on information from annual 

Mission Performance Plans16 to justify future staffing needs in a new 

compound. Although the performance plan links staffing to budgets and 

performance, and may include goals related to improving diplomatic 

facilities, it is a near-term tool. For example, performance plans for fiscal 

year 2004 identify goals and strategies only for that fiscal year. For a 

project scheduled for 2004 funding, an embassy may go through two or 

three additional performance planning cycles before embassy staff move 

 16Mission Performance Plans are annual embassy plans that link performance goals and 

objectives to staffing and budgetary resources needed to accomplish them in the given 

fiscal year. 

Embassies Do Not Receive 

Consistent, Formal 

Guidance on Staffing 

Projection Process and 

Importance of Rightsizing 
Page 15 GAO-03-411 Linking Staffing Needs to Embassy Construction 

onto a new compound. The performance plan, while a reasonable starting 

point, is not directly linked to long-term staffing requirements and by itself 

is not sufficient to justify staffing decisions for new compounds. 

Indeed, an official from one geographic bureau said that while the bureau 

works with the embassies in developing staffing projections, it generally 

does not send out additional or separate formal guidance to all relevant 

embassies. Although OBO informed the geographic bureaus that final 

projections for fiscal year 2004 funding would be due in spring 2002, 

officials at some of the embassies we examined were unaware of this 

deadline. For example, officials at the U.S. Embassy in Harare, Zimbabwe, 

said they lacked information on the major time frames in the funding 

process for their new compound. Officials at the Embassy Belgrade said 

they were unaware that the projections they submitted to OBO in spring 

2002 would be their final chance to project future staffing needs, and that 

the results would be used as the basis for the new compound’s design. In 

other words, they did not know that additional requirements they might 

submit would not result in a larger-sized building. 

According to OBO, individual embassies should have conducted 

rightsizing exercises before submitting the staffing projections used to 

develop the July 2001 version of the long-range plan. In addition, in 

January 2002, OBO advised all geographic bureaus that staffing projections 

should incorporate formalized rightsizing initiatives early in the process so 

that building designs would accurately reflect the embassies’ needs. 

However, OBO is not in a position to know what processes the geographic 

bureaus use when developing staffing projections. Indeed, OBO officials 

stated that they cannot hold the geographic bureaus accountable for 

policy-related decisions and can only assume that rightsizing exercises 

have been incorporated into the projection process. 

The degree to which each geographic bureau stressed the importance of 

rightsizing staffing projections differed across the embassies we studied. 

We found that agencies at the posts we examined were not consistently 

considering the three critical elements of diplomatic operations outlined in 

our rightsizing frameworkphysical security of facilities, mission 

priorities and responsibilities, and operational costs—when determining 

future staffing requirements. In general, for these posts, rightsizing 

exercises were largely limited to predictions of future funding levels and 

likely workloads. For example, officials at each of the seven posts we 

visited reported that staffing projections were, in large part, linked to 

anticipated funding levels. In Skopje, for example, USAID officials 

estimated that funding levels for some programs, such as the democracy 

Use of Rightsizing Exercises
Page 16 GAO-03-411 Linking Staffing Needs to Embassy Construction 

and governance program, could decline significantly over the next 5 years 

and could result in a reduction in staff assigned to these areas. 

Although these embassies had considered mission requirements as part of 

the projection process, they did not consistently consider other factors 

that are mentioned above, such as options for relocating certain positions 

to regional centers or consolidating other positions among neighboring 

embassies. Moreover, decision makers at these embassies used current 

staffing levels as the basis for projecting future requirements. None of the 

posts we contacted conducted a rightsizing analysis of existing staffing 

levels prior to projecting future requirements. In addition, we found that 

most agencies with staff overseas are not consistently considering 

operational costs when developing their staffing projections. The 

President’s rightsizing initiative has emphasized cost as a critical factor in 

determining overseas staffing levels. However, during our fieldwork, only 

USAID officials consistently reported that they considered the 

implications of anticipated program funding on staffing levels and the 

resulting operational costs. Furthermore, we found only one instance 

where an agency, the U.S. Commercial Service, reported that as part of its 

overseas staffing process, it compares operating costs of field offices with 

the performance of those offices. 

At each of the seven posts we visited, we found little or no documentation 

to show that staff had completed a comprehensive assessment of the 

number and types of people they would need in the year that their new 

embassy would be completed. As part of our prior work on rightsizing, we 

developed examples of key questions that may be useful for embassy 

managers in making staffing decisions. These include, but are not limited 

to the following questions: 

• Is there adequate justification for the number of employees from each 

agency compared to the agency’s mission? 

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

• 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? 

However, we did not find evidence of these types of analyses at the posts 

we visited. Officials from several embassies told us they had considered 

these factors; yet, they did not consistently document their analyses or the 

rationales for their decisions. Although officials at the embassies we 

visited said that these types of considerations are included as part of their 

Little Documentation of 

Comprehensive 

Assessments of Long-term 

Staffing Needs 
Page 17 GAO-03-411 Linking Staffing Needs to Embassy Construction 

annual Mission Performance Plan process, there was little evidence of 

analyses of long-term needs. Moreover, we found little or no 

documentation explaining how previous projections were developed or 

the justifications for these decisions. For example, by the time the new 

embassy compound is completed in Yerevan, Armenia, the embassy will be 

four administrative officers removed from the person who developed the 

original staffing requirements, and current embassy officials had no 

documentation on previous projection exercises or the decision-making 

processes. Thus, there was generally no institutional memory of and 

accountability for previous iterations of staffing projections. As a result, 

future management teams will not have accurate information on how or 

why previous decisions were made when they embark on efforts to update 

and finalize staffing projections. 

According to OBO, the relevant geographic bureaus are expected to 

review and verify the staffing projections developed by individual 

embassies and confirm these numbers with other agencies’ headquarters 

before they are submitted to OBO. However, we found that the degree to 

which the staffing projections were reviewed varied. For example, officials 

at Embassy Belgrade reported that their geographic bureau was not an 

active participant in projection exercises. But officials at Embassy 

Sarajevo reported that officials from the same geographic bureau were 

involved in the projection process and often requested justifications for 

some decisions. In addition, we found little evidence to show that staffing 

projections were consistently vetted with all other agencies’ headquarters 

to ensure that the projections were as accurate as possible. Indeed, State 

officials acknowledged that (1) State and other agencies’ headquarters 

offices are not held accountable for conducting formal vetting exercises 

once projections are received from the embassies; (2) there is no formal 

vetting process; and, (3) the geographic bureaus expect that officials in the 

field consult with all relevant agencies; therefore, the bureaus rarely 

contact agency headquarters officials. 

We found additional factors that further complicate the staffing projection 

process. First, frequent turnover of embassy personnel responsible for 

developing staffing projections results in a lack of continuity in the 

projection process. This turnover and the lack of formal documentation 

may prevent subsequent embassy personnel from building upon the work 

of their predecessors. Second, we found that coordinating the projected 

needs of all agencies could be problematic. For example, some agencies 

may decide not to be located in the new compound, while others, such as 

Staffing Projections Are 

Not Vetted Consistently by 

Geographic Bureaus 

Additional Factors 

Complicate Staffing 

Projection Process 
Page 18 GAO-03-411 Linking Staffing Needs to Embassy Construction 

USAID, may have different requirements in the new compound. However, 

we found that these issues were not always communicated to embassy 

management in a timely fashion, early in the projection process. 

Frequent turnover in embassy personnel can contribute to problems 

obtaining accurate staffing projections. Embassy staff may be assigned to 

a location for only 2 years, and at some locations, the assignment may be 

shorter. For instance, the U.S. Office in Pristina, Kosovo, and the U.S. 

Embassy in Beirut, Lebanon, have only a 1-year assignment requirement. 

Given that personnel responsible for developing the projections could 

change from year to year, and that posts may go through several updates 

before the numbers are finalized, the continuity of the projection process 

is disrupted each year as knowledgeable staff are transferred to new 

assignments. Officials in Kosovo reported that the frequent turnover of 

administrative personnel has forced incoming staff to rebuild institutional 

knowledge of the projection process each year. 

Part of the complexity of the projection process is the difficulty in 

coordinating staffing requirements for multiple agencies in a given 

location. Agencies’ space needs in the main office building may differfor 

instance, some may require classified space, which is more expensive to 

construct and thus has different implications for the design and cost of a 

new building than unclassified space. However, agencies requesting office 

space may not currently be situated in the country in question and, thus, 

communication between them and embassy managers is difficult. For 

example, embassy management in Yerevan, Armenia, stated that one 

agency without personnel currently in Armenia did not notify the 

ambassador that it planned to request controlled access space in the new 

embassy. Embassy officials stated they learned of this only when floor 

plans for the new chancery were first delivered. These kinds of issues 

should be communicated to embassy managers in the early stages of the 

projection process so that the final projections are based on the most 

accurate information available. Embassy officials in Rangoon, Burma, for 

example, reported that close interaction among agencies at post and OBO 

during the staff projection process, under the leadership of the deputy 

chief of mission and the administrative officer, kept OBO apprised of 

changes to requirements early enough in the process that it was before the 

budget proposal was submitted to the Congress and the projections were 

locked. 

Following the 1998 embassy bombings, a law was passed requiring that all 

U.S. agencies working at posts slated for new construction be located on 

the new embassy compounds unless they are granted a special co-location 

Lack of Continuity in 

Projection Process 

Breakdowns in Communication 

among Multiple Agencies 

Failure to Provide Timely

Requests for Co-location 

Waivers 
Page 19 GAO-03-411 Linking Staffing Needs to Embassy Construction 

waiver.17 However, agencies are not required to submit these waiver 

requests prior to submitting their final staffing projections to OBO. To 

ensure that OBO has the most accurate projections, it is imperative that 

waiver requests be incorporated early in the staffing projection process so 

that OBO is not designing and funding buildings that are too large or too 

small. In Yerevan, for example, the Department of Agriculture office 

projected the need for 26 desks in the new chancery, yet officials in 

Yerevan plan to use only 13 of these desks and to house the remaining 

personnel in their current office space. However, Agriculture has not yet 

requested a waiver. If Agriculture receives a waiver and proceeds 

according to current plans, OBO will have designed space and requested 

funding for 13 extra desks for Agriculture staff. We found other instances 

where agencies had not requested a waiver before submitting final 

projections. In Sarajevo, for example, the Departments of the Defense, 

Treasury, and Justice have staff in host country ministries they advise. 

However, officials at Embassy Sarajevo, including the regional security 

officer, were uncertain about which agencies would be requesting a waiver 

for the new compound. Embassy officials acknowledged that these 

decisions must be made before the staffing projections are finalized. 

In compounds where USAID is likely to require desk space for more than 

50 employees, it is required to secure funding in its own appropriations for 

an annex building on the compound. However, officials from at least two 

of the embassies we examined had trouble determining where USAID 

would be located, and this kind of problem could delay planning and 

disrupt OBO’s overall plan for concurrent construction of the USAID 

annex with the rest of the compound. For example, at Embassy Yerevan, 

confusion among USAID officials in Washington and the field over 

whether USAID would fund a separate annex has caused construction and 

funding on the annex to fall behind schedule. Therefore, USAID staff will 

not move to the new site concurrent with the rest of the embassy’s staff. 

Rather, USAID may be forced to remain at the current, insecure 

facilityat an additional costuntil completion of its annex, unless 

alternative arrangements can be made. 

 1722 U.S.C. § 4865 requires the Secretary of State, in selecting sites for new U.S. diplomatic 

facilities abroad, to ensure that all U.S. personnel under chief 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, determines that security considerations permit off site location and that it is in the 

U.S. national interests. 

Separate Funding for USAID 

Annexes Could Complicate the 

Projection Process 
Page 20 GAO-03-411 Linking Staffing Needs to Embassy Construction 

We also found a related problem in Sarajevo, Bosnia-Herzegovina, where 

USAID officials were concerned about having to build a separate annex. 

Current staffing levels and projections exceed the 50-desk level, which will 

require USAID to fund the construction of an annex on the compound. 

However, the assistance program may be declining significantly soon after 

the completion of the new compound and, as a result, the office may need 

far fewer staff. Thus, USAID may be constructing an annex that is 

oversized or unnecessary by the time construction is completed or soon 

after. USAID officials in Sarajevo acknowledged they would need to 

coordinate with embassy management and their headquarters offices 

regarding the decision to build a separate annex so that OBO has the most 

accurate projections possible. 

The issue of USAID annex construction is further complicated by difficulty 

coordinating funding schedules. One of the key assumptions of the longrange plan is that where USAID requires a separate annex, construction 

will coincide with the State-funded construction projects. However, 

annual funding levels for USAID construction have been insufficient to 

keep chancery and USAID annex construction on the same track in some 

countries. In Tbilisi, Georgia, for example, funding for the USAID annex 

has fallen behind State Department funding by 2 to 3 fiscal years. 

According to USAID officials in Washington, D.C., two-track construction 

could lead to security concerns, work inefficiencies, and additional costs. 

Because USAID is required to secure funding for its annexes separate from 

State’s funding for new compounds, it is imperative that decisions 

regarding the future location of USAID personnel be made early in the 

staffing projection process to avoid additional security or financial risks. 

The State Department, which historically has been responsible for funding 

the construction and maintenance of U.S. embassies and consulates, 

recently proposed a capital security cost-sharing plan that would require 

federal agencies to help fund its embassy construction program. 

Traditionally, U.S. government agencies other than State have not been 

required to help fund capital improvements of U.S. embassies and 

consulates. OMB is examining State’s and other cost-sharing proposals 

designed to create more discipline in the process for determining overseas 

staffing requirements. The administration believes that if agencies were 

required to pay a greater portion of the total costs associated with 

operating overseas facilities, they would think more carefully before 

posting personnel overseas. In spring 2003, OMB will lead an interagency 

committee to develop a cost-sharing mechanism that would be 

implemented in fiscal year 2005. This new mechanism could require 

Government Aims to 

Distribute Costs of 

Overseas Facilities 

among Users 
Page 21 GAO-03-411 Linking Staffing Needs to Embassy Construction 

agencies to help fund the construction of new embassies and consulates. 

While it may be reasonable to expect that agencies should pay full costs 

associated with their overseas presence, many factors and questions must 

be addressed prior to implementing an effective and equitable cost-sharing 

mechanism. 

The State Department has presented a capital security cost-sharing plan to 

OMB that would require agencies to help fund State’s capital construction 

program. State’s proposal calls for each agency to pay a proportion of the 

total construction program costs based on its total overseas staffing 

levels.18 Agencies would be charged different costs based on whether their 

staff are located in classified or nonclassified access areas.19 Agencies 

would be assessed a fee each year, which would be updated annually, until 

the building program is completed. An added benefit of such a program, 

State believes, is it would provide incentive for agencies to place greater 

consideration of the total costs associated with their presence abroad, 

which in turn, would lead to greater efforts to rightsize overseas presence. 

Table 1 shows an estimated distribution of costs for each agency once the 

program is fully implemented, based on State’s May 2001 survey data. 

 18Each agency’s proportion was based on a May 2001 State Department survey of U.S. 

government employees working overseas under the authority of chiefs of mission. 

19Based on data from State’s May 2001 survey, the total construction costs for controlled 

access, or classified, areas are about 40 percent per desk more than the total costs for 

construction of noncontrolled access, or unclassified, areas. 

State’s Proposed Capital 

Security Cost-sharing Plan 
Page 22 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Table 1: Notional Distribution of Costs under State’s Capital Security Cost-sharing 

Proposal Based on a May 2001 Overseas Personnel Survey 

Agency Annual cost

Percentage

 of costa

Department of State $775,324,345 55.38

United States Agency for International Development 187,627,814 13.40

Department of Defense 183,889,473 13.13

Department of Justice 77,458,156 5.53

Department of Commerce 48,000,356 3.43

Department of the Treasury 26,956,128 1.93

Department of Agriculture 24,016,819 1.72

International Broadcasting Bureau 19,156,184 1.37

Department of Health and Human Services 13,383,305 0.96

Foreign Broadcast Information Service 8,914,998 0.64

Library of Congress 8,008,619 0.57

North Atlantic Treaty Organization 7,274,495 0.52

Department of Veterans Affairs 5,973,095 0.43

Department of Transportation 5,579,943 0.40

American Battle Monuments Commission 4,004,309 0.29

National Aeronautics and Space Administration 1,148,350 0.08

United States Trade Representative 1,023,823 0.07

Department of Energy 795,083 0.06

Department of the Interior 667,385 0.05

National Science Foundation 241,601 0.02

Environmental Protection Agency 166,846 0.01

Federal Emergency Management Agency 141,493 0.01

General Services Administration 100,108 0.01

Department of Labor 80,534 0.01

Department of Housing and Urban Development 66,738 0.00

Total $1,400,000,000 100.00

Source: Department of State. 

a

The percentage of cost reflects the proportion of all overseas employees from a particular agency 

and the type of space occupied by its staff. Space for State Department personnel associated with 

the International Cooperative Administrative Support Services (ICASS) system and for Marine 

Security Guards would not be charged to State or to the Marine Corps. Rather, these costs would be 

distributed among all agencies at post because all agencies benefit from the services provided by 

ICASS and the Marines. 

As part of the President’s Management Agenda, OMB is leading an effort 

to develop a cost-sharing mechanism that would require users of U.S. 

overseas facilities to share the costs associated with those facilities to a 

Efforts by OMB to Develop 

a Cost-sharing Mechanism 
Page 23 GAO-03-411 Linking Staffing Needs to Embassy Construction 

greater extent than currently required.20 OMB and the administration 

believe that such a requirement would provide agencies with an incentive 

to scrutinize long-term staffing more thoroughly when assessing their 

overseas presence. OMB officials also believe greater cost sharing could 

provide a clear linkage between the costs of new facilities that result 

directly from agencies’ presence. 

In its November 1999 report, the Overseas Presence Advisory Panel 

(OPAP) noted a lack of cost sharing among agencies that use overseas 

facilities, particularly as it related to capital improvements and 

maintenance of sites. As a result, OPAP recommended that agencies be 

required to pay rent in government-owned buildings in foreign countries to 

cover current operating and maintenance costs. In effect, agencies would 

pay for space in overseas facilities just as they would for domestic office 

space operated by the General Services Administration. In response to the 

OPAP recommendation, a working group consisting of staff from the 

Departments of Commerce, Defense, Justice, State, and Transportation; 

the Central Intelligence Agency; OMB; and USAID was created to develop 

a mechanism by which agencies would be charged for the use of overseas 

facilities. In summer 2000, the working group recommended to the 

Interagency Subcommittee on Overseas Facilities that agencies be 

assessed a surcharge based on the space they actually use in overseas 

facilities.21 Like State’s more recent proposal, the working group’s plan 

was designed to help fund construction of new embassy compounds, but 

the plan was not implemented. 

In January 2003, OMB notified each federal agency with overseas staff how 

State’s capital cost-sharing proposal would affect the agencies’ respective 

budgets in fiscal year 2004. Because the State proposal and OMB 

assessment were completed after the budget submission deadline, OMB 

told agencies that they would not be charged in 2004; however, OMB did 

say that a capital construction surcharge would be phased in over 5 years 

beginning in 2005. In addition, agencies were invited to participate in an 

interagency working group charged with developing an equitable costsharing program this year. Also during 2003, OMB is requiring that 

 20Agencies contribute funding to support the ICASS system, which funds common 

administrative support functions, such as travel, mail and messenger, vouchering, and 

telephone services, that all agencies at a post may use. 

21This subcommittee was part of the Interagency Overseas Presence Board, which was 

formed to implement OPAP’s recommendations. 
Page 24 GAO-03-411 Linking Staffing Needs to Embassy Construction 

agencies complete a census of all current overseas positions and an 

assessment of agencies’ future staffing plans as part of their budget 

requests for 2005. The results of this census will become the baseline for 

how future cost-sharing charges are determined. 

The impact of agencies’ staffing levels on the costs associated with 

maintaining and improving the physical infrastructure of overseas facilities 

is an important factor agencies should consider when placing staff 

overseas. However, agency personnel in Washington and in the field, and 

embassy management teams with whom we spoke, expressed concerns 

over many factors involved in implementing a new cost-sharing 

arrangement. Therefore, as OMB and the interagency committee work to 

develop a new cost-sharing mechanism, they also need to develop 

consensus on many issues, including 

• how the cost-sharing mechanism would be structured—for example, as 

capital reimbursement for new embassy compounds, or as a rent 

surcharge applied to all embassy occupants worldwide or just those at 

new embassy compounds; 

• the basis for fees—such as full reimbursement of capital costs in a year or 

amortized over time, or rent based on local market rates, an average of 

market rates within a region, or one flat rate applied worldwide; 

• how charges would be assessed—based on the amount of space an agency 

uses or on its per capita presence—and whether charges would be applied 

on a worldwide level, at the post level, or just for posts receiving new 

facilities; 

• whether different rates would be applied to staff requiring controlled 

access rather than noncontrolled access space; 

• whether agencies would be charged for staff not located within facilities 

operated by the State Department—for example, USAID staff working in 

USAID-owned facilities outside an embassy compound or staff who work 

in office space at host country ministries and departments; 

• if and how costs associated with staff providing shared services would be 

offset, and whether costs associated with Marine and other security 

services would be covered; 

• how fees would be paid and who would collect the payments—whether 

through an interagency transfer of funds or through an existing structure 

such as ICASS; and 

• whether potential legal barriers exist and, if so, what legislation would be 

necessary to eliminate them. 

In addition, the interagency committee must develop consensus on the 

underlying purpose of capital cost sharing, demonstrate how such a 

Factors to Consider When 

Developing a Capital Costsharing Mechanism 
Page 25 GAO-03-411 Linking Staffing Needs to Embassy Construction 

mechanism would benefit users of overseas facilities, and determine how 

the mechanism can be implemented with the greatest fairness and equity. 

Finally, the committee must figure out how to minimize the management 

burden of whatever mechanism it develops. 

The State Department has embarked on an expansive capital construction 

program designed to provide safe, secure, and cost-effective buildings for 

employees working overseas. This program will require a substantial 

investment of resources. Given that the size and cost of new facilities are 

directly related to anticipated staffing requirements for these posts, it is 

imperative that future staffing needs be projected as accurately as 

possible. Developing staffing projections is a difficult exercise that 

requires a serious effort by all U.S. agencies to determine their 

requirements 5 to 7 years in the future. However, we found that efforts to 

develop these projections at the embassies we studied were undisciplined 

and did not follow a systematic approach. Therefore, the U.S. government 

risks building new facilities that are designed for the wrong number of 

staff. We believe that additional, formal guidance and the consistent 

involvement of the geographic bureaus would help mitigate the cost and 

security risks associated with wrong-sized embassies. Although any 

staffing requirements could be affected by changing world events and 

circumstances, we believe a systematic process would help ensure that the 

construction of new embassies is based on the best projections possible 

and most accurate information. 

Costs associated with the physical infrastructure of facilities are important 

factors that agencies need to consider when deciding whether to assign 

staff to overseas locations. Recent proposals to implement a new costsharing mechanism may help add greater discipline to the staffing 

projection and rightsizing processes. However, in deciding how costs will 

be shared, decision makers will need to address issues such as fairness 

and equity, while designing a system that is relatively easy to administer. 

To ensure that U.S. agencies are conducting systematic staffing projection 

exercises, we recommend that the Secretary of State provide embassies 

with formal, standard, and comprehensive guidance on developing staffing 

projections for new embassy compounds. This guidance should address 

factors to consider when developing projections, encourage embassywide 

discussions, present potential options for rightsizing, and identify 

important deadlines in the projection process, including planning, funding, 

and construction time lines. To ensure continuity in the process, we also 

Conclusions 

Recommendations for 

Executive Action 
Page 26 GAO-03-411 Linking Staffing Needs to Embassy Construction 

recommend that the Secretary of State require that chiefs of mission 

maintain documentation on the decision-making process including 

justifications for these staffing projections. Finally, we recommend that 

the Secretary require all chiefs of mission and geographic bureaus to 

certify that the projections have been reviewed and vetted before they are 

submitted to OBO. 

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

apps. II and III). OMB provided oral comments. State agreed with our 

conclusion that it is essential that staffing projections for new embassy 

compounds be as accurate as possible. State also said it plans to 

implement our recommendations fully by creating a standard and 

comprehensive guide for developing staffing projections, which it 

anticipates completing by late April 2003. State said this guide would 

provide posts and geographic bureaus with a complete set of required 

steps, the timelines involved, and the factors to consider when developing 

staffing projections. Moreover, State agreed with our recommendations 

that posts should retain documentation on the processes they used to 

develop staffing projections, and that chiefs of mission and geographic 

bureaus should certify staffing projections. State provided technical 

comments related to our cost-sharing discussion, which were incorporated 

into the text, where appropriate. 

USAID also agreed that U.S. agencies do not take a consistent approach to 

determining long-term staffing needs for new embassy compounds. 

Specifically, USAID supported the recommendation calling for standard 

and comprehensive guidance to assist posts when developing staffing 

projections. USAID also expressed deep concerns about the security and 

cost implications that result from delayed funding for their facilities on 

new embassy compounds. Indeed, USAID acknowledged that its 

employees will continue to work in facilities at two overseas locations that 

do not meet minimal physical security standards even though other 

agencies have been moved to new embassy compounds. USAID said that 

the lack of funding has prevented USAID and State from coordinating the 

construction of new facilities. 

In oral comments, OMB said it agrees with our conclusions regarding both 

the staffing projection process and cost sharing, and with our three 

recommendations to the Secretary of State. In addition, OMB suggested it 

would be useful to have an independent body review the vetted staffing 

projections prior to their submission to OBO, to augment the guidance 

developed by State, and ensure that agencies and embassy management 

Agency Comments 

and Our Evaluation 
Page 27 GAO-03-411 Linking Staffing Needs to Embassy Construction 

examine rightsizing options. OMB intends to address this issue with the 

interagency cost-sharing committee. OMB also stated it is concerned 

about the security and cost implications that can result from funding 

delays for USAID annexes, and it is studying ways to overcome this 

problem. OMB also provided technical comments, which we addressed in 

the text, as appropriate. 

To determine how U.S. agencies are developing staffing projections for 

new embassy compounds, we analyzed the State Department’s LongRange Overseas Buildings Plan and interviewed State Department officials 

from OBO, the Office of Management Policy, and the six geographic 

bureaus. We also interviewed headquarters officials from agencies with 

overseas personnel, including officials from the Departments of 

Agriculture, Commerce, Defense, Justice, and the Treasury, and officials 

from USAID and the Peace Corps. In addition, we reviewed reports on 

embassy security and overseas staffing issues, including those of the 

Accountability Review Boards and OPAP, and we met with officials from 

OMB to discuss how they are implementing the overseas presence 

initiatives in the President’s Management Agenda. 

To further assess agencies’ efforts to develop long-term staffing 

projections and the extent to which agencies were conducting rightsizing 

exercises as part of the projection process, we visited seven posts in 

State’s Bureau of European and Eurasian Affairs—Yerevan, Armenia; 

Baku, Azerbaijan; Sarajevo, Bosnia-Herzegovina; Tbilisi, Georgia; Pristina, 

Kosovo; Skopje, Macedonia; and Belgrade, Serbia and Montenegro—where 

State is planning to construct new compounds from fiscal years 2002 

through 2007. We selected these two groups of neighboring posts—the 

Balkans and Caucasus posts—because State is planning to complete a 

significant number of construction projects in these subregions. By 

focusing on these subregions within Europe and Eurasia, we were able to 

assess the extent to which these posts considered combining services or 

positions when developing staffing projections for their new compounds. 

At each post, we interviewed management teams (ambassadors/chiefs of 

mission, deputy chiefs of mission, and administrative officers), 

representatives of U.S. agencies, and other personnel who participated in 

the staffing projection process. To examine the staffing projection process 

at embassies in other geographic bureaus, we also conducted structured 

telephone interviews with administrative officers or deputy chiefs of 

mission from seven other embassies slated for new compounds—

Rangoon, Burma; Beijing, China; Quito, Ecuador; Accra, Ghana; Beirut, 

Lebanon; Panama City, Panama; and Harare, Zimbabwe. These embassies 

Scope and 

Methodology 
Page 28 GAO-03-411 Linking Staffing Needs to Embassy Construction 

would have just recently completed or were about to complete their 

staffing projection process. In all, the posts we contacted represent about 

16 percent of the new embassy compound construction projects in OBO’s 

Long-Range Overseas Buildings Plan for 2002 through 2007, and 23 percent 

of those construction projects in the plan expected to be funded by fiscal 

year 2005.22 We also reviewed planning documents, staffing patterns, 

staffing projections for the new building, and other documentation 

provided by the posts. 

To examine the issue of capital cost sharing for construction of new 

diplomatic facilities, we solicited the views of agency headquarters staff 

and the management teams of our case study posts to determine the 

extent to which cost considerations were factored into the decisionmaking process. We also solicited the views of agency headquarters staff 

and the management teams of our case study posts to determine the 

potential advantages and disadvantages of different capital cost-sharing 

programs. In particular, we interviewed OBO officials and reviewed 

documentation supporting its capital security cost-sharing proposal. We 

also held discussions with OMB officials on their plans for developing and 

implementing an equitable cost-sharing program and on potential issues 

for the planned interagency working group. Finally, we attended meetings 

of OBO’s Industry Advisory Panel where cost sharing was discussed by 

private sector and industry professionals. We also interviewed staff from 

the International Facility Management Association on how cost sharing is 

implemented within the private sector. 

We conducted our work between May 2002 and February 2003 in 

accordance with generally accepted government auditing standards. 

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

Congress. We are also providing copies of this report to the Secretary of 

State and the Director of the Office of Management and Budget. 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. 

 22Includes new embassy compounds in the security capital and regular capital programs 

outlined in the long-range buildings plan and excludes construction of annexes on existing 

compounds. The U.S. embassies in Yerevan, Armenia, and Accra, Ghana, are also excluded. 

Embassy Yerevan was funded in fiscal year 2001 and, thus, was not in the long-range plan 

for 2002 through 2007. Embassy Accra was not initially in the long-range plan, but was 

subsequently added. 
Page 29 GAO-03-411 Linking Staffing Needs to Embassy Construction 

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 IV. 

Sincerely yours, 

Jess T. Ford 

Director, International Affairs and Trade 
Appendix I: Standard Embassy Compound 

Design 

Page 30 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Figure 4 depicts the elements of a new embassy compound. State’s Bureau 

of Overseas Buildings Operations is purchasing parcels of land large 

enough to accommodate these elements and the department’s security 

standards, which include the placement of all buildings at least 30 meters 

from a perimeter wall. 

Figure 4: Standard Design for New Embassy Compounds 

Appendix I: Standard Embassy Compound 

Design 
Appendix II: Comments from the Department 

of State 

Page 31 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Appendix II: Comments from the Department 

of State 
Appendix II: Comments from the Department 

of State 

Page 32 GAO-03-411 Linking Staffing Needs to Embassy Construction 
Appendix II: Comments from the Department 

of State 

Page 33 GAO-03-411 Linking Staffing Needs to Embassy Construction 
Appendix III: Comments from the U.S. Agency for International Development 

Page 34 GAO-03-411 Linking Staffing Needs to Embassy Construction 

Appendix III: Comments from the U.S. 

Agency for International Development 
Appendix III: Comments from the U.S. Agency for International Development 

Page 35 GAO-03-411 Linking Staffing Needs to Embassy Construction 
Appendix III: Comments from the U.S. Agency for International Development 

Page 36 GAO-03-411 Linking Staffing Needs to Embassy Construction 
Appendix IV: GAO Contact and Staff 

Acknowledgments 

Page 37 GAO-03-411 Linking Staffing Needs to Embassy Construction 

John Brummet (202) 512-5260 

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

Martin de Alteriis, David Dornisch, Kathryn Hartsburg, Edward Kennedy, 

and James Strus made key contributions to this report. 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(320124) 
The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal 

government for the American people. GAO examines the use of public funds; 

evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail 

this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily 

E-mail alert for newly released products” under the GAO Reports heading. 

The first copy of each printed report is free. Additional copies are $2 each. A 

check or money order should be made out to the Superintendent of Documents. 

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a 

single address are discounted 25 percent. Orders should be sent to: 

U.S. General Accounting Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Public Affairs