Report to the Ranking Minority

Member, Committee on Foreign

Relations, U.S. Senate

United States General Accounting Office

GAO

November 2001 OVERSEAS

PRESENCE

More Work Needed

on Embassy

Rightsizing

GAO-02-143
Page 1 GAO-02-143 Embassy Rightsizing

November 27, 2001

The Honorable Jesse Helms

Ranking Minority Member

Committee on Foreign Relations

United States Senate

Dear Senator Helms:

During 2000, an interagency effort led by the Department of State began to

assess staffing of U.S. embassies and consulates to determine whether

there were opportunities to improve mission effectiveness and reduce

security vulnerabilities and costs by relocating staff. This process, called

“rightsizing,” was initiated in response to the November 1999

recommendations of the Overseas Presence Advisory Panel (OPAP).1

 In

the aftermath of the August 1998 bombings of U.S. embassies in Africa,

OPAP determined that overseas staffing levels had not been adjusted to

reflect changing missions and requirements; thus, some embassies and

consulates were overstaffed, and some were understaffed. OPAP viewed

the rightsizing of overseas posts as an essential component of an overall

program to upgrade capabilities of embassies and consulates, and it

recommended that rightsizing be a key strategy to improve security by

reducing the number of embassy staff at risk. In addition, OPAP

recommended the establishment of a permanent committee to regularly

adjust the U.S. presence to U.S. goals and interests, and the adoption of

explicit criteria to guide decisions on the size and location of posts. The

September 11 terrorist attacks and subsequent reports of planned attacks

against U.S. embassies have further highlighted the importance of

rightsizing as a tool to lessen security vulnerabilities.

To move the rightsizing process forward, an interagency committee led by

the Department of State conducted pilot studies at six embassies in 2000

to (1) develop a methodology for assessing staffing at all other embassies

and consulates over the next 5 years, and (2) recommend adjustments, if

necessary, to staffing levels at the pilot study embassies. In response to

 1 America’s Overseas Presence in the 21st Century, Report of the Overseas Presence

Advisory Panel (U.S. Department of State, Nov. 1999). OPAP was established by the

Secretary of State following the 1998 embassy bombings in Nairobi, Kenya, and Dar es

Salaam, Tanzania, to consider the organization of U.S. embassies and consulates.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-143 Embassy Rightsizing

your request, we are providing information on the scope of work and

results of the pilot studies.

The interagency committee formed teams comprising representatives from

about 10 agencies that visited U.S. embassies in Amman, Jordan; Bangkok,

Thailand; Mexico City, Mexico; New Delhi, India; Paris, France; and

Tbilisi, Georgia, between March and May 2000. These diplomatic posts

were selected because of their size, complexity, and broad geographical

coverage. The interagency teams did not have written guidelines, and

according to agency representatives, the teams did not systematically

assess staffing at the pilot posts. The teams focused on obtaining the views

of the ambassador and agency officials at each post regarding the need for

rightsizing, and on obtaining information concerning what each agency

does at the post, how each agency coordinates its programs, and how its

staff are used. The teams spent 2 to 5 days at each location—too little

time, according to study participants, to fully assess workload issues or to

consider alternative ways of doing business.

The six pilot studies did not result in a methodology for assessing staffing

levels at all embassies and consulates, as had been anticipated. In a June

2000 report to the Department of State’s Under Secretary for Management,

the interagency committee said it was not practical to develop a

methodology with explicit criteria for determining overseas staffing levels

at all posts because each post has unique characteristics and

requirements. Contrary to the recommendations of the Overseas Presence

Advisory Panel, the committee’s report also questioned the need for

rightsizing and establishing a permanent committee to adjust U.S.

presence as OPAP had recommended. The report did recommend the

relocation of the regional financial centers in Paris, France, and Bangkok,

Thailand. In addition, it identified instances where additional study was

needed to determine whether staff levels should be adjusted. If it is

feasible to reduce staff levels at some embassies, for example by

relocating some activities to the United States or regional centers, we

believe it may be possible to reduce security vulnerabilities. In early

August 2001, the Department of State issued its Final Report on

Implementing the Recommendations of the Overseas Presence Advisory

Panel.2

 State’s report said that the interagency committee did not produce

 2

 Report pursuant to the Conference Report accompanying the Departments of Commerce,

Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2001, as enacted

in PL 106-553.

Results in Brief
Page 3 GAO-02-143 Embassy Rightsizing

major recommendations for change, except for the relocation of the

regional financial center in Paris. The report did not comment on other

conclusions or recommendations made by the study teams concerning the

pilot study embassies. But it stated that the administration will make

rightsizing a priority goal. On August 25, 2001, the President announced

that the rightsizing of embassies and consulates would be one of 14

initiatives in the President’s Management Agenda.3

 The Office of

Management and Budget is currently formulating a strategy for leading this

initiative. In view of ongoing terrorist threats, the rightsizing of embassies

and consulates has become a critical issue for the U.S. government.

OPAP was established by the Secretary of State following the August 1998

bombings of U.S. embassies in Nairobi, Kenya, and Dar es Salaam,

Tanzania. The panel was formed to consider the future of U.S. overseas

representation, to appraise its condition, and to develop practical

recommendations on how best to organize and manage embassies and

consulates. Citing weaknesses in security, infrastructure, technology,

human capital, and management, OPAP concluded that the U.S. overseas

presence was “perilously close to the point of system failure.” OPAP made

recommendations in eight areas,4

 including that of creating the right size

and location for U.S. overseas presence. A key OPAP theme stressed that a

rightsizing process should consider the relationship between embassy size

and security. Specifically, OPAP recommended that rightsizing be used to

reduce the number of people at risk overseas.5

OPAP made five additional recommendations regarding the size and

location of overseas posts:

• Rightsize the U.S. overseas presence; reduce the size of some posts, close

others, reallocate staff and resources, and establish new posts where

 3

 This agenda is the President’s strategy for improving the management and performance of

the federal government, announced on August 25, 2001.

4

 The eight areas are security, size and location of posts, management of overseas

buildings, human capital, technology, consular services, administrative services, and the

role of the ambassador.

5

 The Report of the Accountability Review Boards on the Embassy Bombings in Nairobi

and Dar Es Salaam (Department of State, Jan. 1999) also concluded that the United States

should consider reductions in the size and number of its embassies as a means of reducing

security vulnerabilities.

Background
Page 4 GAO-02-143 Embassy Rightsizing

needed to enhance the American presence where the bilateral relationship

has become more important.

• Form a new Interagency Overseas Presence Committee—a permanent

committee to regularly adjust U.S. presence to U.S. goals and interests.

• Adopt explicit criteria to guide size and location decisions.

• Support the concept of small posts.

• Encourage ambassadors to initiate rightsizing.

OPAP also recommended that some administrative services be performed

at regional centers or in the United States—actions that would lessen the

need for administrative staff at some posts, thereby reducing security

vulnerabilities.

In February 2000, President Clinton directed the Secretary of State to lead

an interagency effort to implement OPAP’s recommendations. In a March

2000 report to the Congress,6

 the Department of State said that the

interagency committee planned to complete pilot studies by June 2000 to

assess staffing levels, to recommend necessary changes at the study posts,

and to develop decision criteria applicable to subsequent rightsizing

reviews to be conducted at all overseas posts over a 5-year period.7

 State

anticipated that reviews at half the posts (about 130 posts) would be

completed within 2 years.

In early 2000, State organized an interagency rightsizing committee

representing key agencies, including the Departments of Agriculture,

Commerce, Defense, Transportation, Energy, Justice, the Treasury, and

State; the intelligence community; and the U.S. Agency for International

Development (USAID). Pilot studies were conducted at six embassies—

Amman, Jordan; Bangkok, Thailand; Mexico City, Mexico; New Delhi,

India; Paris, France; and Tbilisi, Georgia, from March to May 2000. Teams

with representatives from State, the intelligence community, Defense,

Justice, USAID, and the Treasury visited all six posts; officials from other

agencies made some of the trips. These embassies were selected because

 6

 Report on Overseas Presence (Department of State, Mar. 2000) pursuant to section 607 of

the Admiral James W. Nance and Meg Donovan Foreign Relations Authorization Act, Fiscal

Years 2000 and 2001, as enacted in the Consolidated Appropriations Act for Fiscal Year

2000 (Public Law 106-113).

7

 State maintains a worldwide network of operations at about 260 overseas posts and

supports the activities of about 30 other U.S. agencies.

Scope of Work for the

Pilot Studies
Page 5 GAO-02-143 Embassy Rightsizing

of the complexity of their missions and because they represented broad

geographical and agency coverage.

The Department of State told us that the interagency teams did not have

written guidelines. Moreover, according to agency representatives who

participated in the studies, the teams did not systematically assess staffing

at the pilot posts. According to the former interagency committee leader,

the teams attempted to use the criteria that OPAP suggested for making

staffing decisions, but found that the criteria were too broad to guide

determinations on specific post size.8

 Prior to travel, the teams reviewed

each embassy’s Mission Performance Plan describing objectives and

priorities. In addition, the Department of State directed the teams to draft

a list of general questions that linked staffing to the goals and objectives

laid out in each embassy’s Mission Performance Plan, as a discussion

guide.9

 At each embassy, the teams received a briefing from the

ambassador and then concentrated on interviewing key agency

representatives, to obtain information and opinions on agencies’ staffing

levels and workload.

The teams spent a few days at each post. For example, a team was in

Tbilisi for 2 days, Paris for about 3 days, and Mexico City for 5 days. Some

team members and representatives of the interagency rightsizing

committee told us that 2 to 5 days at an embassy was too little time to

permit detailed analysis of workload or to fully explore alternative ways of

conducting business, such as regionalizing operations or outsourcing

administrative functions.10 This is partly attributable to the size and

complexity of embassy operations at the posts visited. Four of the

embassies—Bangkok, Mexico City, New Delhi, and Paris—are among the

largest and most complex in the world.11 Though smaller, the remaining

two embassies both have substantial numbers of U.S. and foreign national

employees, from multiple agencies. The ambassador who led three of the

pilot studies told us that a comprehensive review of staff levels would take

 8

 OPAP provided suggested criteria dealing with issues in five areas: U.S. strategic goals,

overriding interests, threat factors, host-country environment, and adjustment factors.

9

 The Department of State was unable to locate the list of questions used at each pilot study

post.

10 OPAP recommended the increased use of regional operations for administrative

functions, to reduce posts’ staffing requirements and to save money.

11 The embassy in Paris, for example, reported about 700 employees on board as of

September 30, 2000, including about 300 U.S. and 400 foreign national employees.
Page 6 GAO-02-143 Embassy Rightsizing

much longer than the 2 to 5 days the teams spent at the embassies, and

that the pilot studies were not designed for that purpose. However, he

believed that the length of visit was sufficient to identify potential

functions that warranted additional study to determine if staffing levels

should be adjusted.

The interagency committee’s June 2000 report to the Under Secretary of

State summarizing results of the pilot studies concluded that it was

impractical to develop a staffing methodology that would be applicable to

all posts, as OPAP had recommended, because no two posts are

sufficiently similar. In addition, the report questioned the need for

additional rightsizing of overseas posts, stating that agencies had adjusted

staff levels during the 1990s in response to budget constraints to ensure

that only the most essential overseas functions were performed. As a

result, the report concluded that agencies had already performed

rightsizing.

The report also concluded that planned rightsizing reviews of additional

posts over 5 years should not be conducted, as the benefits of rightsizing

may not outweigh the costs of conducting the reviews. Regarding OPAP’s

recommendation to establish an interagency board to review staff levels at

overseas posts, the committee’s report concluded that an interagency

advisory board could be helpful as a forum to discuss programmatic issues

with major overseas staffing implications and to provide informal and

nonbinding advice to agencies and ambassadors. However, some agencies

opposed the establishment of an interagency board, even on an advisory

basis, because they believed it was unnecessary and would limit agency

independence in making staffing decisions.

Although the interagency committee did not recommend major changes in

staff levels as a general theme in its June 2000 report, it did recommend

that the regional financial service centers in Bangkok and Paris be

relocated to the United States,12 and that several other potential

opportunities for staff level reductions be explored. In addition, the report

raised concerns about heavy embassy staff workloads, an issue not

 12 Discussion regarding the need to consolidate the Department of State’s financial service

centers dates back to the early 1990s. In October 1999, prior to the pilot studies, the

Congress directed State to determine whether some or all of the functions of the Paris

Center could be transferred to State’s Financial Service Center in Charleston, South

Carolina. In December 2000, State decided to relocate most of the functions of the Paris

center and certain functions of the Bangkok center to Charleston.

Results of the Pilot

Studies
Page 7 GAO-02-143 Embassy Rightsizing

specifically addressed by OPAP. According to the committee’s report, an

expanded American role in promoting and protecting U.S. interests

overseas has imposed a dramatic and often overwhelming burden of work

and responsibility on embassy staff. The committee found a common

perception at each post that “Washington’s demands for reports,

demarches, and other initiatives are numerous, un-prioritized, unrealistic,

and insatiable.” The report also noted concerns about the ambassador’s

ability to manage embassy staff and resources, noting that several

ambassadors had indicated reluctance to challenge staffing levels of nonState agencies.

The summary report also endorsed the initiation of separate interagency

law enforcement pilot studies that the Attorney General had

recommended in April 2000. These studies were intended to determine a

methodology for deciding the appropriate type and number of law

enforcement personnel to be assigned overseas, and to review the law

enforcement policy role and staffing requirements at U.S. diplomatic

missions. As part of this pilot, the law enforcement working group visited

Mexico City, Bangkok, and Paris. State officials are unclear as to how the

results of the working group will eventually affect staffing levels or

rightsizing efforts.13 They noted, however, that law enforcement agencies

have significantly increased their presence at a number of overseas posts

in recent years.

Table 1 summarizes the observations and conclusions for each post

contained in the summary report on the pilot studies.

 13 The law enforcement working group identified several factors that should be considered

in determining the size and composition of law enforcement staff at overseas posts. These

included transnational crime threat, non-crime control policy interests, host-nation law

enforcement capability, host-nation commitment, geographic area of coverage, the role of

U.S. law enforcement at post, the constraints of resources and security, and overlapping

missions. In March 2001, State cabled posts having significant narcotics or crime control

programs, or those whose countries posed significant narcotics or crime threats to the

United States, asking them to produce comprehensive law enforcement coordination plans

covering 3 years. These plans were to be developed in line with post mission plans, an

approach to rightsizing endorsed in State’s August 2001 response to OPAP.
Page 8 GAO-02-143 Embassy Rightsizing

Table 1: Key Observations and Conclusions for Each Embassy Visited

U.S. Embassy Observations and Conclusions

Amman, Jordan The post does not offer any reasonable opportunity for staff reductions, and an expansion of

law enforcement and military assistance staff levels may be needed. USAID’s ability to

manage a vastly expanded program with no increase in U.S. direct hire staff may be a model

for other posts.

Bangkok, Thailand In the interests of decreasing overseas presence, the regional financial service center,

employing 8 U.S. direct hires, 4 contractors, and 103 foreign service national staff, should be

relocated to the United States. The Department of Defense has a substantial presence at the

embassy (more than 300 U.S. and foreign national staff), and a senior Defense official

intends to review the staffing of certain components to identify potential opportunities for

consolidation. A separate rightsizing study of law enforcement agency representation should

be considered.

Mexico City, Mexico All mission staffing should be reviewed, particularly administrative functions, to determine if it

would be appropriate to convert some American positions to local national personnel.

Development of a personnel classification system should be expedited to abolish or

reprogram some foreign national positions. Also, a separate study of law enforcement

agency staffing and activities should be conducted.

New Delhi, India Modest growth in staffing levels is expected. The post would be a good choice for a separate

project on improving information technology.

Paris, France The ambassador believes that embassy staffing could be cut. The regional financial service

center, employing about 120 personnel, should be relocated to the United States. The post

should prepare a plan to implement its suggestion to centralize processing for all euro

currency-based vouchers in the region. This project should result in the savings of several

administrative staff positions within European posts.

Tbilisi, Georgia Although workload is high, staff levels are reasonable, given the limitations posed by an

already overcrowded embassy building, security concerns, and weak logistical support. Post

size tripled between 1998 and 2000.

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

Regarding staffing in Paris, the interagency committee’s report noted that

the ambassador had testified to the Congress that staff could be

significantly reduced, but had not recommended which specific positions

should be eliminated.14 The report recommended that the ambassador

identify specific positions for elimination by September 2000. In addition,

an informal “lessons learned” paper, prepared by the study team,

suggested that staffing in Paris should be the subject of urgent,

interagency review with a view toward reducing work demands,

privatizing some administrative positions, and moving some functions to

the United States. The ambassador who led the pilot study team said that

reduction of work demands could be achieved if the White House, through

the Office of Management and Budget, established relative policy priorities

 14 Testimony of the Honorable Felix G. Rohatyn, U.S. Ambassador to France, before the

House Committee on Appropriations, Subcommittee on Commerce, Justice, State, and

Judiciary, on April 12, 2000.
Page 9 GAO-02-143 Embassy Rightsizing

and questioned, and perhaps overrode, staffing decisions made by

individual agencies. The study team also cited examples of work that may

not need to be performed in Paris, or that could be privatized, including

some translation services and reporting on information available in public

sources. In addition, the team noted that there may be ways to reduce the

amount of embassy staff time spent in supporting the large number of

official visitors.

After the pilot studies were completed, the ambassador at the U.S.

Embassy in Paris asked headquarters agencies to review workload

requirements, with a view toward reducing workload so that rightsizing

could take place. In October 2000, State provided guidance to the

ambassador on work requirements and priorities for the embassy. In

November 2000, the ambassador said that this guidance would not permit

him to reduce staff, as it would not be fair to cut staff and ask the

remaining staff to take on an undiminished workload. Although the

ambassador expressed disappointment in this effort to identify potential

workload and staff reductions, he reiterated his position that staff

reductions were needed in view of security concerns at the post, and in

the interest of achieving operational efficiencies. The concern regarding

embassy security in Paris was attributable to the absence of “setback”

from public streets, making the embassy highly vulnerable to terrorist

attack.

According to Department of State officials, the departure of the

ambassador in late 2000, the November 2000 U.S. elections, and the

change in administrations detracted from follow-up on the potential

rightsizing actions in Paris, as well as on the rightsizing committee’s

observations and conclusions concerning the other pilot posts. However,

the current administration has made the embassy rightsizing process a

priority by including it as one of the President’s management initiatives,

and it may revisit the observations of the pilot studies as a part of this

process.

State’s August 2001 Final Report on Implementing the Recommendations

of the Overseas Presence Advisory Panel agreed with the

recommendations of OPAP to rightsize the overseas presence, rather than

with the positions taken in the interagency committee’s report on the pilot

studies. State’s final report also stated that the administration will analyze

and review overall U.S. government presence and will develop a credible

and comprehensive overseas staffing allocation process. However, it did

not include a timetable for implementation or indicate whether more

reviews of staffing issues at specific posts will be conducted. State’s report
Page 10 GAO-02-143 Embassy Rightsizing

mentioned only one specific action taken that would directly affect staff

levels at the pilot posts—the relocation of the Paris Regional Financial

Service Center to Charleston, South Carolina, proposed by Congress prior

to the pilot studies. State did not indicate any additional rightsizing actions

taken or planned for the embassy in Paris, nor did it comment on any of

the other five pilot posts.

On August 25, 2001, the President announced that the rightsizing of

embassies and consulates would be one of 14 initiatives in the President’s

Management Agenda. The Office of Management and Budget is currently

formulating a strategy for leading this initiative.

In view of the September 11 terrorist attacks, the rightsizing of embassies

and consulates has become more important than ever. Regrettably, the

pilot studies conducted in 2000 do not provide a strong basis upon which

the administration can pursue rightsizing, as they did not result in a

methodology or blueprint for rightsizing around the world. Nevertheless,

the studies did suggest that there may be opportunities to reduce embassy

size, for example by moving some activities to the United States or to

regional centers. If these suggestions prove feasible, their implementation

could reduce security vulnerabilities at some overseas posts and could

potentially free up resources to meet foreign policy needs elsewhere. We

are currently planning work to further examine the suggestions raised by

the pilot studies, as well as other issues to be considered as the

administration implements the embassy rightsizing initiative.

The Director of the Department of State’s Office of Management Policy

and Planning, which has overall responsibility for rightsizing initiatives in

the department, provided oral comments on a draft of this report. He said

that the department agrees with the report’s conclusion and, on the whole,

agrees with the report’s observations regarding the pilot studies. He said

that the department is working closely with the Office of Management and

Budget on rightsizing activities.

We contacted officials in the Departments of State, Defense, the Treasury,

Justice, and Commerce, and in the USAID, who participated in the

interagency rightsizing committee effort, to discuss how the pilot studies,

were carried out and the studies’ observations and results. We also

obtained internal reports on the studies from some of these agencies. We

interviewed Department of State personnel involved in the rightsizing

Conclusion

Agency Comments

Scope and

Methodology
Page 11 GAO-02-143 Embassy Rightsizing

studies, including the former Under Secretary of State for Management;

the Director of the Office of Management Policy and Planning, which had

responsibility for the pilot studies; and the former ambassador who led the

pilot studies in Mexico City, Paris, and Tbilisi, and who was a co-chair for

the overall pilot study exercise. We were unable to interview the other cochair who prepared the June 2000 interagency report summarizing results

of the pilot studies, as she is retired and unavailable. To explore the

relationship between rightsizing and embassy security in OPAP’s report,

we interviewed the Chairman of OPAP. We conducted our review from

April to September 2001, in accordance with generally accepted

government auditing standards.

We are sending copies of this report to interested congressional

committees and to the Secretary of State. We will make copies available to

others upon request. Please contact me at (202) 512-4128 if you or your

staff have any questions about this report. Major contributors to this

report are John Brummet and Lynn Moore.

Sincerely yours,

Jess T. Ford, Director

International Affairs and Trade

(320039)

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