```

[Senate Hearing 114-272]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-272

 IMPROVING THE EFFICIENCY AND EFFECTIVENESS OF THE DEPARTMENT OF STATE

=======================================================================

                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON STATE DEPARTMENT AND
                    USAID MANAGEMENT, INTERNATIONAL
                       OPERATIONS, AND BILATERAL
                       INTERNATIONAL DEVELOPMENT

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 21, 2015

                               __________

       Printed for the use of the Committee on Foreign Relations

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Available via the World Wide Web: http://www.gpo.gov/fdsys/
                                       

                         U.S. GOVERNMENT PUBLISHING OFFICE 

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                          Washington, DC 20402-0001

                COMMITTEE ON FOREIGN RELATIONS         

                BOB CORKER, TENNESSEE, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 BARBARA BOXER, California
RON JOHNSON, Wisconsin               ROBERT MENENDEZ, New Jersey
JEFF FLAKE, Arizona                  JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia                TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  TIM KAINE, Virginia
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts
              Lester E. Munson III, Staff Director        
           Jodi B. Herman, Democratic Staff Director        

                         ------------          

           SUBCOMMITTEE ON STATE DEPARTMENT AND USAID        
           MANAGEMENT, INTERNATIONAL OPERATIONS, AND        
              BILATERAL INTERNATIONAL DEVELOPMENT        

                DAVID PERDUE, Georgia, Chairman        

JAMES E. RISCH, Idaho                TIM KAINE, Virginia
JOHNNY ISAKSON, Georgia              BARBARA BOXER, California
RON JOHNSON, Wisconsin               CHRISTOPHER A. COONS, Delaware
RAND PAUL, Kentucky                  CHRISTOPHER MURPHY, Connecticut

                              (ii)        

  

                            C O N T E N T S

                              ----------                              
                                                                   Page

Hon. David Perdue, U.S. Senator From Georgia.....................     1
Hon. Tim Kaine, U.S. Senator From Virginia.......................     2
Hon. Steve A. Linick, Inspector General, U.S. Department of 
  State, 
  Washington, DC.................................................     2
    Prepared statement...........................................     4

              Additional Material Submitted for the Record

Responses to questions submitted for the record by Senator Perdue    25

                                 (iii)
 
 IMPROVING THE EFFICIENCY AND EFFECTIVENESS OF THE DEPARTMENT OF STATE

                              ----------                              

                        TUESDAY, APRIL 21, 2015

        U.S. Senate, Subcommittee on State Department and 
            USAID Management, International Operations, and 
            Bilateral International Development, Committee 
            on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:06 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. David Perdue 
(chairman of the subcommittee) presiding.
    Present: Senator Perdue, Johnson, Kaine, and Murphy.

            OPENING STATEMENT OF HON. DAVID PERDUE, 
                   U.S. SENATOR FROM GEORGIA

    Senator Perdue. Both of us are in order, so we will 
proceed. [Laughter.]
    Senator Perdue. This hearing of the Subcommittee on State 
Department and USAID Management, International Operations, and 
Bilateral International Development is entitled ``Improving the 
Effectiveness of the State Department.''
    I would like to begin by welcoming our witness, Inspector 
General of the State Department and Broadcasting Board of 
Governors, Steve Linick.
    Steve, thank you for being here today. I understand you 
changed your schedule to be here today, and we very much 
appreciate that and look forward to your testimony.
    The OIG is dedicated to assessing the State Department's 
programs and operations, and making recommendations to 
strengthen its integrity, effectiveness, and accountability. As 
such, the OIG is dedicated to detecting and preventing waste, 
fraud, abuse, and mismanagement.
    Today's hearing will be an important opportunity to examine 
the State OIG's mission and oversight efforts, your new 
initiatives, and to hear about any challenges you face in 
carrying out your mission. It has come to our attention, Mr. 
Linick, that there are a number of things that we, in Congress, 
can do to help you in your job. I look forward to discussing 
those with you this morning and to get your insights.
    As you may know, Chairman Corker is leading the effort to 
draft and pass into law the first State Department 
reauthorization bill in 13 years. We certainly welcome your 
suggestions.
    With that, I would like to thank and recognize our ranking 
member, Senator Kaine. I look forward to working with you on 
these important issues.
    Senator Kaine.

             OPENING STATEMENT OF HON. TIM KAINE, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Kaine. Thank you, Mr. Chair.
    And thanks to our witness, Steve Linick.
    We do begin this hearing as part of a set of hearings about 
State Department authorization. As Chairman Perdue mentioned, 
we have not done this in over a decade, so it is very important 
that we get to this work, and today's hearing is part of that 
effort.
    Thank you for the testimony today and testimony before 
other Senate committees recently. I also want to highlight your 
service as assistant U.S. attorney in Virginia from 1999 to 
2006. You have a long and distinguished track record as a 
public servant.
    OIGs serve an essential and critical role in holding 
government agencies and officials accountable to citizens. 
There is a trend toward use of OIGs not just in the Federal 
Government, but in State and local governments as well, which 
is very positive. One of the newest State IG offices was 
created in Virginia in 2011.
    And I look forward to your assessment of your office's 
strengths, challenges, and priorities based upon your 19 months 
in service to the Department of State.
    I know that you have highlighted a couple issues in your 
testimony. I am particularly interested in ongoing coordination 
of OCO accounts used in Iraq, Afghanistan, and elsewhere. I 
also want to make sure that we can discuss what we can do 
together to ensure that the Department of State is more quickly 
complying with and implementing important OIG recommendations.
    But thanks again for your service and your testimony today. 
I believe this can be a helpful exchange as we work toward the 
broader issue of both the effectiveness of your office and the 
State Department reauthorization.
    Thanks, Mr. Chairman.
    Senator Perdue. Thank you.
    Now we are going to hear from our witness, Inspector 
General Steve Linick.
    Mr. Linick.

  STATEMENT OF HON. STEVE A. LINICK, INSPECTOR GENERAL, U.S. 
              DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Linick. Chairman Perdue, Ranking Member Kaine, members 
of the subcommittee, thank you for inviting me to testify 
regarding the work of the Office of Inspector General for the 
Department of State and the Broadcasting Board of Governors, 
the BBG.
    Today, I will be addressing four topics. First, I am going 
to start by giving you an overview of OIG's missions and 
priorities. Second, I am going to describe some new initiatives 
my staff and I have put into place since I was sworn in almost 
19 months ago. Next, I am going to discuss some of the most 
significant challenges facing OIG specifically and the 
Department as a whole. And finally, I am going to talk about 
the impact of OIG's work.
    Let me start with an overview. Because OIG's focus is on 
the operations and work of the State Department and the BBG, 
its inspectors, auditors, investigators, and evaluators focus 
on U.S. Government operations worldwide, involving more than 
72,000 employees and 280 overseas missions, along with 
oversight of the Department's and BBG's significant domestic 
operations. But our office is unique from others because OIG 
has historically, as is required by law, served as the 
Department of State's inspection arm.
    Let me turn to my priorities. First, protecting the people 
who work in the Department is our top priority. OIG has 
inspected physical security at overseas posts for years. 
However, since the September 2012 attacks on U.S. diplomatic 
facilities and personnel in Benghazi, Libya, OIG has stepped up 
its oversight efforts related to security. There is no doubt 
the Department. has made progress in improving overseas 
security. Nonetheless, challenges still remain. Through our 
inspection and audit work, we continue to find notable security 
deficiencies placing at risk our posts and personnel.
    Second, OIG has enhanced its efforts to oversee the 
Department.'s management of contracts and grants, which totaled 
approximately $10 billion in 2014. Contract and grant 
management deficiencies, including lack of training, weak 
oversight, and inadequate monitoring, have come to light 
repeatedly in OIG audits, inspections, and investigations over 
the years.
    Lastly, we continue to be very concerned about the 
Department's management of IT security. OIG's assessments of 
the Department's efforts to secure its IT infrastructure have 
found significant recurring weaknesses, including inadequate 
controls around who may access and manipulate systems.
    I now turn to new OIG initiatives. Since joining the OIG, 
my staff and I have implemented a number of new practices 
intended to enhance the effectiveness of our work. We have 
adopted the practice of issuing management alerts and 
management assistance reports in order to flag high-risk issues 
requiring immediate attention.
    Another new initiative has been our creation of a new 
office in OIG, the Office of Evaluations and Special Projects, 
also known as ESP. This office complements the work of the 
OIG's other offices by focusing on high-risk special projects 
and evaluations of pressing concern to the Department, the 
Congress, and to the American people.
    We also have enhanced our efforts to identify and refer 
appropriate cases to the Department for suspension and 
debarment.
    Next, I would like to address two significant challenges 
facing OIG that I believe impede the OIG's ability to conduct 
effective oversight.
    First, although the Inspector General Act requires OIG to 
be independent, my IT infrastructure lacks independence because 
it is largely controlled by the Department. While we have no 
evidence that our data has been compromised, the fact that the 
contents of our network may be accessed by numbers of 
Department administrators puts us at unnecessary risk and does 
not reflect best practices on IT independence within the IG 
community.
    Second, unlike other IGs, my office is not always afforded 
the opportunity to investigate allegations of criminal or 
serious administrative misconduct by Department employees. 
Department components, including the Bureau of Diplomatic 
Security, are not required to notify OIG of such allegations 
that come to their attention. If we are not notified, we have 
no opportunity to investigate.
    This arrangement is inconsistent with the Inspector General 
Act and appears to be unique to the Department. The Departments 
of Defense, Justice, Homeland Security, the Treasury and the 
IRS, Agriculture, and Interior defer to their IGs for the 
investigation of criminal or serious misconduct by their 
employees. Their IGs have the right to decide whether to 
conduct investigations themselves or refer them back to the 
agency components.
    Particularly where senior officials are involved, the 
failure to refer allegations of misconduct to an independent 
entity like the OIG necessarily creates a perception of 
unfairness, as management is seen as to be investigating 
itself.
    Finally, I would like to close by talking about the impact 
of our work. In my written testimony, I quantified some 
financial metrics demonstrating our positive return on 
investment to taxpayers. But financial statistics do not 
adequately reflect some of our most significant impacts, the 
safety and security of people, and the integrity of the 
Department's operations and reputation. Those are key 
motivators for our employees, many of whom are on the road for 
long periods of time or who serve for extended periods at 
dangerous posts. I am honored to serve alongside and lead them.
    In conclusion, Chairman Perdue, Ranking Member Kaine, 
members of the subcommittee, thank you again for the 
opportunity to testify before you today. I take seriously my 
statutory requirement to keep the Congress fully and currently 
informed, and I look forward to your questions.
    [The prepared statement of Mr. Linick follows:] [

                 Prepared Statement of Steve A. Linick

    Chairman Perdue, Ranking Member Kaine, and members of the 
subcommittee, thank you for inviting me to testify today regarding the 
work of the Office of Inspector General (OIG) for the Department of 
State (Department) and the Broadcasting Board of Governors (BBG). In my 
testimony, I will highlight some of our recent oversight work, our new 
initiatives, and the challenges we face in performing our oversight. I 
will also address the results and impact of OIG work.
              i. state oig's mission and oversight efforts
    It is my honor to have led the State OIG for the past 19 months--
since the end of September 2013. OIG's mandate is broad and 
comprehensive, involving oversight of the full scope of Department and 
BBG programs and operations, including more than 72,000 employees and 
280 overseas missions and domestic entities, as well as the U.S. 
Section of the International Boundary and Water Commission. These 
agencies are funded through combined annual appropriations of 
approximately $15 billion and nearly $7 billion in consular fees and 
other income. OIG also is responsible for full or partial oversight of 
an additional $17 billion in Department-managed foreign assistance. In 
total, OIG is responsible for overseeing approximately $40 billion.
    State OIG differs from most OIGs in that it has a mandated 
inspection function. We are statutorily required to periodically 
inspect and audit every domestic and overseas operating unit around the 
world. Since the beginning of my tenure, we have redoubled our efforts 
to address some of the top challenges of the Department, including the 
protection of people and facilities, the management of contracts and 
grants, and the security of sensitive information around the world. I 
will elaborate on each of these.
Improving Security
    Protecting the people who work for the Department is a top priority 
for the Department and for OIG. OIG has inspected physical security at 
overseas posts for years; however, since the September 2012 attacks on 
U.S. diplomatic facilities and personnel in Benghazi, Libya, OIG has 
significantly stepped up its oversight efforts related to security, 
including targeted audits and evaluations. We help safeguard the lives 
of people who work in or visit our posts abroad by performing 
independent oversight to help the Department improve its security 
posture. Unlike our other oversight activities, as well as more 
traditional governmentwide work conducted by the Inspector General (IG) 
community, we cannot attach a dollar-value metric to our efforts 
related to improving physical security, which often involve costs 
related to improving security rather than saving money. Achievement in 
this area is not reflected in our monetary ``return on investment'' 
statistics. However, our security contributions are a great source of 
pride because people are the Department's most valuable asset. OIG will 
continue to highlight security deficiencies to the Department and 
Congress and will continue to provide value-added recommendations to 
address vulnerabilities.
    Although the Department has made significant improvements on 
overseas security, challenges remain. Through our inspection and audit 
work, OIG continues to find security deficiencies that put our people 
at risk. Those deficiencies include failing to observe set-back and 
perimeter requirements and to identify and neutralize weapons of 
opportunity. Our teams also identified posts that use inadequately 
secured warehouse space and other substandard facilities for 
offices.\1\ Our audit of the Local Guard Program found that firms 
providing security services for embassy compounds were not fully 
performing all vetting requirements contained in the contract, placing 
our posts and personnel at risk. The audit also found that regional 
security officers at posts could not demonstrate that they vetted and 
approved the local guards employed to protect their posts.\2\ In other 
reports, we found that the Bureau of Diplomatic Security (DS) 
(responsible for carrying out ongoing security functions and for 
setting security standards) and the Bureau of Overseas Buildings 
Operations (responsible for constructing facilities to meet those 
standards) often do not coordinate adequately to address important 
security needs in a timely manner.\3\ In accordance with OIG 
recommendations, those Bureaus have taken steps to improve their 
communication and coordination. OIG will, through its compliance 
process, closely monitor whether these steps actually sustain improved 
joint performance to mitigate security vulnerabilities.
    OIG also has examined the Department's reviews of, and lessons 
learned from, significant security incidents that result in the death 
of U.S. Government personnel and may require the appointment of an 
Accountability Review Board (ARB). For example, in September 2013, OIG 
published a report on its special review of the ARB Process.\4\ The 
Secretary of State convenes an ARB when serious injury, loss of life, 
or significant destruction of property occurred at or related to a U.S. 
Government mission abroad. The most recent ARB was convened following 
the 2012 attacks in Benghazi.
    OIG's special review examined the process by which the Department's 
ARBs are established, staffed, supported, and conducted as well as the 
manner in which the Department tracks the implementation of ARB 
recommendations. We found that follow-through on long-term security 
program improvements involving physical security, training, and 
intelligence-sharing lacked sustained oversight by the Department's 
most senior leaders. Over time, implementation of recommended 
improvements slows. The lack of follow-through explains, in part, why a 
number of Benghazi ARB recommendations mirror previous ARB 
recommendations. This underscores the need for a sustained commitment 
by the Department's most senior leaders to ensure that ARB 
recommendations are timely and effectively carried out.
    OIG continues to increase its focus on security issues. OIG 
currently is following up on the Department's compliance with OIG 
recommendations in the ARB special review. OIG also is reviewing the 
Department's reported compliance with the 29 recommendations in the 
Benghazi ARB report. In addition, FY 2015 security audits (planned or 
ongoing) include an audit of compliance with vetting requirements for 
locally employed staff and foreign contractors, an audit of emergency 
action plans for U.S. missions in the Sahel region of Africa, and an 
audit of the Vital Presence Validation Process (VP2). VP2 is the 
Department's formal process for assessing the risks and costs of 
maintaining its presence in dangerous locations around the world. 
Finally, our inspection of DS' International Programs Directorate will 
underscore and support our ongoing priority focus on security.
Improving Oversight of Contracts and Grants
    Contracts and grants have become increasingly critical to the 
Department's mission as it takes on additional responsibilities that 
require the services of contractors to manage. The Department's 
obligations in FY 2014 included approximately $9 billion for contracted 
services and $1.5 billion in grants.\5\ However, the Department faces 
continuing challenges managing its contracts, grants, and cooperative 
agreements because of systemic weaknesses that have not been 
effectively addressed. These challenges have come to light repeatedly 
in OIG audits, inspections, and investigations over the years. They 
also were highlighted in two recent OIG Management Alerts provided to 
senior Department officials.
    In FY 2014, more than 50 percent of post or bureau inspections 
contained formal recommendations to strengthen controls and improve the 
administration of grants. In our March 2014 Management Alert focusing 
on contract management deficiencies, we reported that, over the past 6 
years, files relating to Department contracts with a total value of 
more than $6 billion were either incomplete or could not be located at 
all.\6\ In a September 2014 Management Alert on grant management 
deficiencies, we highlighted weaknesses in oversight, insufficient 
training of grant officials, and inadequate documentation and closeout 
of grant activities.\7\ In FY 2012 alone, the Department obligated more 
than $1.6 billion for approximately 14,000 grants and cooperative 
agreements worldwide.\8\ This is a significant outlay of taxpayer 
funds, which makes oversight and accountability even more critical. 
Grants and cooperative agreements present special oversight challenges 
because, unlike contracts, they imply a hands-off style of 
``management'' and do not generally require the recipient to deliver 
specific goods or services that can be measured easily. To better 
utilize grant and cooperative agreement dollars, the Department must 
determine what can be measured to document the achievement of 
objectives, including tracking and measuring outcomes.
    The Department has agreed to adopt most of the recommendations in 
OIG's Management Alerts. OIG will continue to monitor the Department's 
compliance with OIG recommendations and seek additional improvements in 
this important area.
Enhancing Information Security
    Another top management challenge concerns information security. The 
Department is entrusted with sensitive information, both classified and 
unclassified, which continuously is targeted by entities, including 
terrorist and criminal organizations across the globe. OIG's 
assessments of the Department's cybersecurity programs found recurring 
weaknesses and noncompliance with the Federal Information Security 
Management Act (FISMA) with respect to its unclassified systems. For 
example, we found: (1) that the Department's unclassified systems 
lacked adequate controls, allowing unauthorized individuals to access 
and manipulate systems; (2) ineffective security scanning; and (3) 
weaknesses in cybersecurity management, including the absence of a 
strategic plan. In a November 2013 Management Alert,\9\ I raised these 
concerns with senior Department officials, recommending, among other 
things, that independent penetration testing be conducted to assess the 
system's vulnerabilities to cyber attack. This effort has been 
completed.
                        ii. new oig initiatives
    Since joining OIG, I have implemented a number of new initiatives 
to enhance the effectiveness and efficiency of OIG's independent 
oversight of the Department's programs and operations.
Management Alerts and Management Assistance Reports
    Soon after my arrival, we began to issue Management Alerts \10\ and 
Management Assistance Reports.\11\ They alert senior Department 
leadership to significant issues that require immediate corrective 
action. For example, we issued two Management Assistance Reports 
recommending that the Department take immediate action against grantees 
who misused grant funds.\12\ The Department's response to these 
products has been favorable, and it has concurred with most of our 
recommendations.
    Moreover, Congress also recognized their value. The explanatory 
statement to the FY 2015 Omnibus Appropriations bill included language 
directing the Secretary of State to submit to Congress a report 
detailing the status of each of the recommendations included in OIG's 
FY 2014 Management Alerts. The Department responded to this directive 
last month indicating concurrence and resolution of most of OIG's 
recommendations.
Office of Evaluations and Special Projects
    The Office of Evaluations and Special Projects (ESP) was 
established in 2014 to enhance OIG's oversight of the Department and 
BBG. In particular, ESP undertakes special evaluations and projects and 
complements the work of OIG's other offices by further developing the 
capacity to focus on broader, systemic issues. For example, in October 
2014, ESP published a review of selected internal investigations 
conducted by DS,\13\ which addressed allegations of undue influence by 
Department management. Currently, ESP is undertaking a joint review 
with the Department of Justice OIG of a number of shooting incidents in 
Honduras in 2012, which involved Drug Enforcement Administration (DEA) 
and Department of State personnel.
Emphasis on Whistleblower Protections
    OIG is also using ESP to improve OIG's capabilities to meet 
statutory requirements of the Whistleblower Protection Enhancement Act 
of 2012 and other whistleblower statutes and policies. Department 
employees, employees of contractors and grantees, and others have been 
encouraged to report fraud, waste, abuse, and misconduct. Such 
reporting must take place without fear of retaliation. We designated an 
ombudsman (a senior ESP attorney) for these purposes. We also produced 
an educational video and published a guide regarding whistleblower 
protections, both of which are available on our Web site.\14\
Oversight of Overseas Contingency Operations
    Through a 2014 amendment to the Inspector General Act of 1978 (IG 
Act), Congress tasked the IG community with the important 
responsibility of providing oversight for our Nation's overseas 
contingency operations (OCOs). Three OCOs have been established in 
recent months: Operation Inherent Resolve (OIR), to degrade and defeat 
the forces of the Islamic State in Iraq and the Levant (ISIL); 
Operation United Assistance (OUA), to support international efforts to 
fight the Ebola outbreak in Africa; and Operation Freedom's Sentinel 
(OFS), to partner with Afghan forces to combat terrorism and continue 
assisting the Afghan Government to build its capacity and self-
sufficiency.
    The amendment specified that the three OIGs for the Departments of 
Defense (DOD) and State and the U.S. Agency for International 
Development (USAID) share this responsibility jointly. Each of the 
respective OIGs has dedicated staff to these important projects.
    Jon T. Rymer, DOD's IG, was designated Lead Inspector General (LIG) 
for each of the three current OCOs. On December 18, 2014, Mr. Rymer 
appointed me as his Associate IG for OIR. He tasked me to develop joint 
investigative capabilities among the IG personnel and external partner 
agencies dedicated to the effort. For each of the three OCOs, we are 
working jointly on: (1) strategic planning, to provide comprehensive 
oversight of all programs and operations in support of the OCOs; (2) 
program management, to track, monitor, and update information provided 
by our agencies in support of the OCOs; and (3) communications, to 
collect information and prepare periodic reports for Congress on 
projects related to the OCOs.\15\ On March 31, 2015, we issued our FY 
2015 ``Joint Strategic Oversight Plan for OIR.''
Data and Technology
    OIG is developing an automated evidence tracking system to enhance 
evidence processing accuracy and efficiency and employee computer-
forensics and data-processing. Further, we are building the capacity of 
our new data analytics group and developing a fusion cell consisting of 
special agents, forensic auditors, criminal analysts, and computer 
specialists. This group of specialists will enable all of our divisions 
to proactively analyze financial and other data to identify potential 
vulnerabilities in Department programs and processes and to perform 
fraud risk assessments.
Suspension and Debarment
    We have enhanced our efforts to identify and refer appropriate 
cases to the Department for suspension and debarment. Our Office of 
Investigations and Office of Audits prepare detailed suspension and 
debarment recommendation packages, in consultation with our Office of 
General Counsel. These recommendation packages include referral 
memoranda summarizing all relevant facts and setting forth the specific 
grounds for suspension or debarment and are submitted to the 
Department's Suspension and Debarment Officials (SDOs) for action. 
Between FY 2011 and FY 2014, OIG referred more than 100 cases to the 
Department for action.
New Locations
    To further enhance our oversight efficiency and to have ``boots on 
the ground'' at key financial locations, OIG placed staff in 
Charleston, South Carolina, where the Department's Global Financial 
Services Center is located, and soon OIG staff will reside in 
Frankfurt, Germany, the site of one of the Department's regional 
procurement centers.\16\ Both locations are responsible for billions of 
U.S. taxpayer dollars.
Investigation and Prosecution of Cases
    OIG has a program to place one or more Special Assistant U.S. 
Attorneys (SAUSAs) in appropriate positions in the Department of 
Justice in order to prosecute more quickly and effectively cases 
involving fraud against the Department of State. For example, an OIG 
attorney-investigator now works as a full-time SAUSA in the U.S. 
Attorney's Office for the Eastern District of Virginia.
           iii. challenges oig faces in performing oversight
    Next, I want to address two challenges that impede OIG's ability to 
conduct effective oversight and are generally inconsistent with 
practices in the IG community.
OIG Network Vulnerabilities
    Vulnerabilities in the Department's unclassified network directly 
affect OIG's IT infrastructure, which is part of the same network. We 
noted in our November 2013 Management Alert on information security 
that there are thousands of administrators who have access to the 
Department's computer network. That access runs freely throughout OIG's 
IT infrastructure and increases risk to OIG operations. For example, a 
large number of Department administrators have the ability to read, 
modify, or delete any information on OIG's network including sensitive 
investigative information and email traffic, without OIG's 
knowledge.\17\ OIG has no evidence that administrators have compromised 
OIG's network. At the same time, had OIG's network been compromised, we 
likely would not know. The fact that the contents of our unclassified 
network may be easily accessed and potentially compromised places our 
independence at unnecessary risk and does not reflect best practices 
within the IG community. OIG seeks to transition to an independently 
managed information system, which will require the Department's 
cooperation \18\ and support from Congress.
Right of First Refusal To Investigate Allegations of Criminal or Other 
        Serious Misconduct
    Unlike other OIGs, my office is not always afforded the opportunity 
to investigate allegations of criminal or serious administrative 
misconduct by Department employees. Department components, including 
DS, are not required to notify OIG of such allegations that come to 
their attention. For example, current Department rules provide that 
certain allegations against chiefs of mission shall be referred for 
investigation to OIG or DS. However, that guidance further states that 
``[in] exceptional circumstances, the Under Secretary for Management 
may designate an individual or individuals to conduct the 
investigation.'' \19\ Thus, DS or the Under Secretary may initiate an 
investigation without notifying us or giving us the opportunity to 
evaluate the matter independently and become involved, if appropriate. 
Accordingly, OIG cannot undertake effective, independent assessments 
and investigations of these matters as envisioned by the IG Act.\20\
    The directives establishing this arrangement appear to be unique to 
the Department. By contrast, the Departments of Defense, Justice, 
Homeland Security, the Treasury (and the IRS), and Agriculture, all of 
which had within them significant law enforcement entities prior to the 
establishment of their respective offices of Inspector General (OIG), 
defer to their OIGs for the investigation of criminal or serious 
administrative misconduct by their employees or with respect to their 
programs. Notice must be provided by all agency components to their 
respective OIGs of, at a minimum, allegations of misconduct by senior 
employees. In some agencies, notice must be provided of such 
allegations with respect to all employees. The respective OIGs have the 
right to decide whether to conduct investigations themselves or refer 
matters back to the relevant agency component for investigation or 
other action. However, in some cases, when requested by OIG to do so, 
the relevant agency component to which the OIG referred back the matter 
must report to the OIGs on the progress or the outcome of 
investigations.\21\
    Particularly where senior officials are involved, the failure to 
refer allegations of misconduct to an independent entity like OIG 
necessarily creates a perception of unfairness, as management is seen 
to be, as the U.S. Government Accountability Office (GAO) notes, 
``investigating itself.'' \22\
    This risks undermining confidence in the integrity of the 
Department. Moreover, this arrangement prevents OIG from carrying out 
its clear statutory duty, set forth in the IG Act, ``to provide policy 
direction for and to conduct, supervise, and coordinate . . . 
investigations relating to the programs and operations'' of the 
Department.
    Accordingly, we are seeking legislative support--similar to that 
provided to other OIGs--for early notification to OIG of allegations of 
certain types of misconduct. In addition, OIG is seeking legislative 
clarification of its right to investigate such allegations.\23\ Current 
Department directives are a barrier to achieving accountable and 
transparent government operations.
                         iv. impact of oig work
    Through our audits, evaluations, inspections, and investigations, 
OIG returns significant value to U.S. taxpayers. In FY 2014, we issued 
77 reports, which included audits of annual financial statements, 
procurement activities, and funds management. During this period, we 
identified $43.3 million in taxpayer funds that could be put to better 
use by the Department. Additionally, our criminal, civil, and 
administrative investigations resulted in the imposition or 
identification of $75 million in fines, restitution, recoveries, and 
other monetary results last fiscal year. This was in addition to the $1 
billion in financial results from audit- or inspection-related findings 
\24\ and more than $40 million in investigative-related financial 
results that OIG identified in the previous 5 fiscal years.
    However, these financial statistics do not adequately take into 
account our most significant impact--our oversight efforts and 
recommendations to improve the safety of people and facilities, our 
investigations that help ensure that Department employees conduct 
themselves appropriately, and our work to strengthen the integrity of 
the programs, operations, and resources that are at the foundation of 
the Department's ability to help preserve our national security. 
Indeed, the work of our talented staff in reviewing security and 
leadership at our overseas and domestic posts has significant and 
positive effects on the lives and well-being of employees throughout 
the Department. That is what motivates our employees, many of whom are 
on the road for long periods of time or who serve for extended periods 
at high-threat posts.
    In conclusion, I want to thank Chairman Perdue, Ranking Member 
Kaine, and the other members here today for the opportunity to testify. 
I take my statutory requirement to keep the Congress fully and 
currently informed seriously, and I appreciate your interest in our 
work and for providing me the opportunity to articulate the challenges 
faced by my office. I look forward to your questions.

----------------
End Notes

    \1\ ``Review of Overseas Security Policy Board Exceptions and 
Secure Embassy Construction and Counterterrorism Act of 1999 Waivers'' 
(ISP-I-13-06, January 2013).
    \2\ ``Audit of Contractor Compliance With and Department of State 
Oversight of the Process Required for Vetting Local Guards'' (AUD-HCI-
14-24, June 2014).
    \3\ ``Inspection of the Bureau of Diplomatic Security, High Threat 
Programs Directorate'' (ISP-I-14-23, September 2014); ``Compliance 
Follow-up Review of the Bureau of Overseas Buildings Operations'' (ISP-
C-11-26, May 2011); ``Audit of the Process To Request and Prioritize 
Physical Security-Related Activities at Overseas Posts'' (AUD-FM-14-17, 
March 2014).
    \4\ ``Special Review of the Accountability Review Board Process'' 
(ISP-I-13-44A, September 2013).
    \5\ USASpending, , accessed on February 19, 
2015.
    \6\ ``Management Alert: Contract File Management Deficiencies'' 
(MA-A-0002, March 20, 2014).
    \7\ ``Management Alert: Grants Management Deficiencies'' (MA-14-03, 
September 26, 2014).
    \8\ U.S. Government Accountability Office, STATE DEPARTMENT, 
Implementation of Grants Policies Needs Better Oversight (GAO-14-635, 
July 2014).
    \9\ ``Management Alert: OIG Findings of Significant and Recurring 
Weaknesses in the Department of State Information System Security 
Program'' (MA-A-0001, November 12, 2013).
    \10\ Ibid; ``Management Alert: Contract File Management 
Deficiencies'' (MA-A-0002, March 2014); ``Management Alert: Grants 
Management Deficiencies'' (MA-14-03, September 2014).
    \11\ ``Management Assistance Report: Department Financial Systems 
Are Insufficient To Track and Report on Foreign Assistance Funds'' 
(ISP-I-15-14, February 26, 2015); Management Assistance Report: 
Military Liaison Elements (ISP-S-15-12, February 11, 2015); 
``Management Assistance Report: Grant Improprieties by Nour 
International Relief Aid'' (AUD-CG-15-19, January 15, 
2015);``Management Assistance Report: Importance of Securing Fire 
Accelerants and Similar Weapons of Opportunity'' (ISP-S-15-06, January 
13, 2015); ``Management Assistance Report: Concerns with the Oversight 
of Medical Support Service Iraq Contract No. SAQMMA11D0073'' (AUD-MERO-
15-20, December 23, 2014); ``Management Assistance Report: Termination 
of Construction Grants to Omran Holding Group'' (AUD-CG-14-37, 
September 18, 2014).
    \12\ As a result, the Department took action to address each of 
these reports. For one, the Department disallowed certain costs; for 
the other, the Department requested certain information from the 
grantee to determine whether costs are allowable.
    \13\ ``Review of Selected Internal Investigations Conducted by the 
Bureau of Diplomatic Security'' (October 2014, ESP-15-01).
    \14\ OIG, Whistleblower Protection, /oig.state.gov/hotline/
whistleblower>.
    \15\ Oversight of three OCOs has proven to be a significant 
challenge for OIG. OIG did not receive additional funding for OCO 
oversight in 2015. In 2016, OIG received a total budget increase of $9 
million, which the Office of Management and Budget passback stated is 
intended ``to address any expanded oversight requirements resulting 
from the FY 2015 counter-ISIL OCO budget amendment and the 
Counterterrorism Partnership Fund (CTPF), if enacted.'' Until the scope 
of the OIR response is fully developed, OIG can neither predict the 
resources needed for effective oversight nor the resources needed for 
the other two OCO established recently. Presently, OIG's oversight of 
all three OCOs is being funded through its existing resources, a 
situation that necessarily reduces oversight for our other mission-
critical priorities and operational needs.
    \16\ OIG currently has staff located in Afghanistan and Pakistan.
    \17\ Recently, DS and the Bureau of Information Resource Management 
agreed to notify and receive confirmation from OIG prior to accessing 
OIG systems in most circumstances.
    \18\ Secretary Kerry and Deputy Secretary Higginbottom are aware of 
this issue.
    \19\ As outlined in the Foreign Affairs Manual (FAM), 3 FAM 4322.2, 
``Chiefs of Mission,'' states, ``Incidents or allegations which could 
serve as grounds for disciplinary action and/or criminal prosecution 
against a chief of mission (or official in a position of comparable 
importance) will immediately be referred to the Office of Inspector 
General (OIG) or the Bureau of Diplomatic Security (DS), or comparable 
offices in other foreign affairs agencies. In exceptional 
circumstances, the Under Secretary for Management for State . . . may 
designate an individual or individuals to conduct the investigation.''
    \20\ Of course, if OIG receives a referral in the first instance, 
it can effectively undertake an independent assessment of the matter.
    \21\ Defense: (DoD Directive 5505.06 ``Investigations of 
Allegations Against Senior DoD Officials,'' June 2013) (reissuing 
similar 2006 Directive), IG Act, sections 4(a), 6(a), 7, 8; 28 CFR 
45.11; Justice: (Reporting Violations to the Office of the Inspector 
General and the Office of Professional Responsibility; Delegations of 
Authority, September 2006); IG Act, sections 4(a), 6(a), 7, 8E(b) and 
(d)); Homeland Security (DHS Management Directive System MD 0810.1 - 
The Office of Inspector General, June 2004; IG Act, sections 4(a), 
6(a), 7, 8I(c) and (e)); Treasury/IRS: (Memorandum of Understanding 
Between the Internal Revenue Service Criminal Investigation Division 
and Treasury Inspector General for Tax Administration, Office of 
Investigations Regarding Investigative Responsibility, December 2008; 
IG Act, sections 4(a), 6(a), 7, 8D; Agriculture: IG Act, sections 4(a), 
6(a), 7; Interior: IG Act, sections 4(a), 6(a), 7; Department Manual 
355 DM 2. It should be noted that the existence of a special provision 
(e.g., IG Act section 8E (d)) ``relate only to the establishment 
mentioned . . . and no inference shall be drawn from the presence or 
absence of a provision . . . with respect to an establishment not named 
. . . .'' IG Act section 8J.
    \22\ See, e.g., GAO, Inspectors General: Activities of the 
Department of State Office of Inspector General at 25-26. (GAO-07-138, 
March 2007) ([B]ecause DS reports to the State Department's Under 
Secretary [sic] for Management, DS investigations of Department. 
employees, especially when management officials are the subjects of the 
allegations, can result in management investigating itself.); see also 
OIG's Review of Selected Internal Investigations Conducted by the 
Bureau of Diplomatic Security (ESP-15-01, October 2014) (Department 
policies and procedures appear to have significant implications and 
created an appearance of undue influence and favoritism, which 
undermines public confidence in the integrity of the Department and its 
leaders).
    \23\ We also have requested that the Department revise its policies 
to require notification to OIG of, and the right to investigate, such 
allegations.
    \24\ Financial results from audit- or inspection-related findings 
include the value of questioned costs and funds put to better use from 
OIG recommendations.

    Senator Perdue. Thank you, Mr. Linick. I appreciate your 
comments.
    I will begin the questioning today. We will have 7 minutes. 
Senator Kaine and I are the two members here. As other members 
join us, we will have them engage as well.
    My first question follows some testimony that you gave 
about 2012 and the attacks there on U.S. diplomatic personnel 
in Benghazi. The OIG since then has stepped up its oversight 
efforts, as you testified.
    Can you describe what those efforts are to improve the 
physical security? And also, how do you go about evaluating the 
security of other embassies around the world?
    Mr. Linick. Senator, we actually assess security in two 
ways. First of all, we have looked at security from a systemic 
point of view. In a 2013 report on the Accountability Review 
Board process, we looked at how the Department implements 
Accountability Review Board recommendations across the board. 
The Accountability Review Board, as you know, is convened by 
the Secretary where there is loss of life, substantial injury, 
et cetera.
    We found, in that report, that after reviewing 126 
recommendations from 12 different ARBs, between Dar es Salaam 
and Benghazi, 40 percent of the recommendations were repeat 
recommendations pertaining to security, intelligence-gathering, 
and training. And we found the reason why that occurred is 
because of a lack of sustained commitment over the years by 
Department principles in making sure recommendations were 
implemented.
    In fact, we found many of the recommendations in the 
Accountability Review Board for Benghazi to be the same 
recommendations.
    Senator Perdue. I am sorry, would that go back years, that 
practice of having recommendations like that, the past decade 
or so?
    Mr. Linick. Yes, sir. We looked at 14 years' worth of 
recommendations over 12 Accountability Review Boards. We found 
that, in order to properly implement those recommendations, 
accountability had to be at the highest levels of the 
Department. We have made recommendations to that effect.
    We also look at security on a more targeted basis. As you 
know, we conduct inspections of posts around the world. Every 
single inspection we do of an embassy involves a security 
inspection. We have highly qualified security inspectors who 
look at everything from whether or not the walls are high 
enough, to whether or not there is a proper setback, to whether 
their emergency action plans are properly in order. We do that 
across the board. We do continue to find deficiencies when we 
go to various locations.
    The other way we do it is through our audits. We do audits 
of various programs. For example, we reviewed the local guard 
force that protects our embassies, whether or not they are 
properly vetted by security contractors who hire the guards and 
whether they are properly overseen by our regional security 
officers who have responsibility for making sure that they are 
doing their job.
    So those are the ways in which we conduct our inspections.
    Senator Perdue. How often do you do those inspections?
    Mr. Linick. Well, let us say every 8 years we are able to 
perform a domestic inspection and every 11 years an overseas 
inspection. We try to get to as many locations as possible. But 
really, we use a risk-based approach, so we do a survey and we 
find out if there are problems at any particular post. We also 
look at a post and assess whether it is receiving a large 
amount of money for foreign assistance. If it is a high-threat 
post, we will take that into consideration as to whether or not 
to go to a particular facility.
    Now that we have responsibility for joint oversight of the 
Operation Inherent Resolve, we look at posts that play a role 
in that effort.
    Senator Perdue. Well, I just returned from a trip out 
there, and I can tell you that State Department people are an 
amazing group, dedicating their careers to multiple assignments 
around the world, changing every few years. I was very 
impressed with their morale and their effectiveness out there. 
I am encouraged by your testimony.
    I did have one question. You testified that you are having 
trouble with the 5-year inspection requirement. Help me 
understand what is involved in that, as well.
    Mr. Linick. So the Foreign Service Act requires our office 
to conduct inspections once every 5 years. And I just want to 
step back and make one observation about that.
    We are unique among the IG community, in that we have a 
statutory requirement to conduct these inspections, because we 
are also doing audits and investigations, so that obviously 
reduces our ability to do some of the other work.
    But on the 5-year inspections, we are not able to meet that 
requirement. We simply do not have the staff. But I really 
think that a better approach, frankly, is to do it on a risk-
based approach, like we are doing it now.
    We try to get out to posts where there are truly issues, 
whether we think they are financial issues or some of the other 
issues I just mentioned. But we are not able to get out every 5 
years. It would take an extraordinary increase in staff and 
resources in order to be able to do that.
    Senator Perdue. All right, let me change gears just a 
minute.
    As we work on this reauthorization bill in the full 
committee, what opportunities for increased ineffectiveness do 
you see? And if this is a long-winded answer, I will have time 
to come back. I have about a minute left, so if you will just 
give me quite the highlights here.
    In terms of improving effectiveness of the State 
Department, if you had the top two or three priorities, what 
would you recommend, based on all the work you have been doing?
    Mr. Linick. In terms of items that would help the IG 
perform its job?
    Senator Perdue. Right.
    Mr. Linick. So I would say there are two issues that come 
to mind. Number one is our ability to get early notification of 
misconduct involving serious or criminal activity, and our 
ability to investigate that, at least decide whether or not we 
are going investigate that or turn it back to the Department. 
So that is sort of the number one.
    The second issue is what I mentioned in my oral testimony, 
IT independence. We really need to be independent from the 
Department.. We have a lot of sensitive information on our 
network.
    So I would say those two things would be on the top of my 
list.
    Senator Perdue. Okay, well, thank you, Mr. Linick.
    My time is up. I will yield to Senator Kaine. Thank you.
    Senator Kaine. Thank you, Mr. Chair.
    I think my questions are going to go significantly more 
than 7, so I will just do 7, and then we will probably have a 
second round.
    Mr. Linick, I will take them in the order that you did. I 
am going to go missions and priorities, sort of new missions, 
and then challenges.
    On the missions and priorities, I am glad that your first 
one is protecting embassy personnel. Like Chairman Perdue, I 
have been so proud of the people I have met. When you go to any 
of the facilities that we have around the world, you really are 
proud of our people.
    I went to the U.S. Embassy in Beirut, and when you see the 
memorial there to all the folks with the State Department who 
lost their lives in the 1980s and 1990s, it is very sobering.
    The sacrifices are sometimes more mundane than that, but 
they are sacrifices of being away from family and serving in 
tough places. So that has to be number one.
    Your written testimony suggests that you think that the 
focus on security improvements has not been one that I guess 
has been subject to sustained oversight from the State 
Department leadership. I think that is the word that you used, 
in particular with respect to ARB recommendations following in 
Benghazi. But I think more generally, when there are 
recommendations about security improvements, it sounds as if 
what you are testifying is that there is sort of really sharp 
focus on it, but then maybe wavering attention because of other 
priorities.
    Could you elaborate on that a little bit, because that 
should be all of our concern?
    Mr. Linick. Let me say this, I think the Department has 
taken significant steps in addressing our security 
recommendations.
    In fact, we are currently reviewing the Department's 
compliance with the Benghazi ARB recommendations. There 29 of 
them. So I am encouraged by the steps they are taking.
    Senator Kaine. Is that the kind of thing where you will 
issue a report that we have reviewed compliance with the 
Benghazi ARB recommendations and here is our assessment? Is 
that foreseen? And when might that happen?
    Mr. Linick. Yes, sir. We are actually in progress with that 
report. We should be issuing something probably in the next 
couple months on that.
    But in terms of implementation of recommendations, I think 
you got it right when you said, what happens is, if they are 
not implemented from the top, they tend to be delegated out to 
the bureaus, and there is a dispersion of authority.
    So implementation, the responsibility is delegated down the 
chain. With the changes of administration, institutional shift, 
there tends not to be the followthrough that you would want to 
see, especially with the ARB recommendations over the years. 
There has not been a loop back to the principles, the Deputy 
Secretary, the Secretary, on the progress of implementation of 
those recommendations.
    So what we are trying to do is say, look, accountability 
for those recommendations needs to be at the Deputy Secretary 
level. And I know the Department is working on that, and we are 
assessing that right now.
    Senator Kaine. One of the areas that I was very concerned 
about in reading the ARB report, and you may just want to 
highlight this briefly, because if you are going to report 
this, we will get the report later, is the use of private 
contract security at some of the embassies and consular 
facilities, whether there is sufficient vetting when private 
contract security is used.
    I know in Benghazi, some of the private contract security 
was local folks. They were on sort of a work stoppage because 
of debates about pay that could have led them to be, frankly, 
less than focused on doing the job, because of some dispute 
with the State Department over that.
    How is your review going on this question of do we 
appropriately vet local security when we hire them abroad?
    Mr. Linick. So that is an area of concern to me, because 
all it takes is one bad actor who is guarding our embassy for 
something to happen. We did do some work on vetting security 
guards. We looked at six of them at various posts around the 
world, including some high-threat posts. We found that all of 
them were not thoroughly vetting security guards.
    Again, you have to make sure that these guards do not have 
criminal histories. There is a whole panoply of qualities that 
you need to check.
    So not only do the companies who hire these guards have 
responsibilities but also the Department does, in making sure 
they know who is guarding their embassies. So we found problems 
with that.
    And this is an issue that we are pursuing. We are currently 
looking at the employment, how vetting is going with the 
locally employed folks at our embassies as well.
    So this is a constant issue that I think deserves a lot of 
attention because, as I said, all it takes is one bad actor.
    Senator Kaine. Is the responsibility for doing the vetting 
of local security fully on the State Department shoulders? Or 
do the Marine security guard units that are assigned to 
diplomatic posts have any responsibility over that role?
    Mr. Linick. No, the responsibility is really on both the 
contractors who are hired, but ultimately it is the regional 
security officer who needs to make sure that he is satisfied 
with the guards that are selected.
    Senator Kaine. It segues nicely into your second mission, 
which is managing contracts and grants. I mean, security 
contracts are just a kind of contract. I am on the Armed 
Services Committee. We have a Readiness Committee hearing this 
afternoon where acquisition reform and managing contracts and 
grants is going to be the topic. So I think this is a big 
picture issue.
    I noticed that the next mission and priority you have of 
your three is a maintaining IT security. I would suspect that 
that may also tie into managing contracts and grants, because I 
would imagine that some of that within the State Department is 
done by outside contractors. Am I right about that?
    Mr. Linick. I think that is right, yes.
    Senator Kaine. I have often heard it said in the Northern 
Virginia contracting community, which is pretty big, there is a 
lot of general concern about sort of the acquisition and grant 
management workforce. So to what extent, to the extent that you 
have an opinion about this, in managing contracts and grants, 
or maintaining IT security, to the extent that it is contracted 
out, are there issues kind of on the personnel side about the 
size, the qualifications, the numbers or qualifications of our 
acquisition workforce that manage these contracts and grants?
    Mr. Linick. Well, I guess there are two issues here. We 
have definitely identified issues with the folks who are 
supposed to be managing the contracts at the Department. There 
are not enough of them. And we are doing one audit right now 
where we found that a contractor was submitting invoices, but 
the invoices, there were not enough contracting personnel 
within the State Department to oversee those invoices, so they 
were just basically signing off without validating them or 
double-checking them. So there is that issue.
    There is an issue of lack of training, as well. We need 
contracting officers, grant officers, who understand all the 
rules and so forth.
    We have a problem with the rotation. Our RSOs, regional 
security officers at post, are also responsible for overseeing 
contracts and grants, and they are rotating in and out, so 
there is a lack of continuity there.
    Another significant issue is the maintenance of our 
contract files. We recently did a report where we looked at 
contracts over the last 6 years and found that there was 6 
billion dollars' worth of contracts that were either incomplete 
or missing. Now since then, the Department has found some of 
those contracts.
    But if you do not have the contract files, if you are a 
contracting officer, how do you ensure that the government is 
getting the goods that it has bargained for?
    Senator Kaine. I am over time, but I am going to come back 
to this. I am going to pick up right there when I come back, 
Mr. Chair.
    Senator Perdue. Thank you, Ranking Member.
    Senator Johnson, you are up.
    Senator Johnson. Thank you, Mr. Chairman.
    Inspector General Linick, in your testimony, you are 
talking about a review that your office has conducted. Was that 
under your guidance, on the ARB with Benghazi?
    Mr. Linick. No, the Benghazi ARB was completed right before 
I got there.
    Senator Johnson. But you have reviewed the process of that 
ARB? Is that correct?
    Mr. Linick. Well, since I arrived, we have undertaken work 
to see how the Department is complying with the Benghazi ARB 
recommendations. On the 29, how are they doing? What progress 
have they made?
    Senator Johnson. Okay, that is what I gleaned from your 
testimony.
    Do you have any plans whatsoever to still try to get some 
answers to a number of unanswered questions in terms of who 
knew what when? Whatever happened to security requests? Where 
were those security requests denied? Where were the decisions 
made that security should be ramped down in Benghazi?
    Are you thinking about taking a look at that? The ARB did 
not answer those questions. We have had several probes. I know 
there is a special committee in the House trying to get to 
those answers, but we are very frustrated. This is 2\1/2\ years 
since the tragedy in Benghazi, and we still do not know some 
very basic answers to some very basic questions.
    Mr. Linick. Well, there have been a lot of probes, as you 
mentioned, on this topic. We have been forward-looking. We have 
taken our resources and tried to figure out whether or not the 
Department is currently complying with security guidelines and 
so forth, and whether they are implementing the ARB 
recommendations. That is the direction we have been going.
    Senator Johnson. Which is important. Obviously, we have to 
look forward. We need to make sure that these tragedies do not 
occur in the future.
    But from my standpoint, one of the primary functions of the 
Inspector General's office is not only making recommendations 
that are forward-looking, but also looking back and being able 
to hold people accountable.
    I am not aware that the primary actors in the Benghazi 
incident have been held accountable. Do you believe so?
    Mr. Linick. You know we did not look at that. Obviously, 
the Benghazi Accountability Review Board made a number of 
conclusions on that. Again, there have been a lot of reports, a 
lot of probes on that.
    I am happy to work with the committee, if you think I 
should be looking at something in particular. As I said, I have 
been trying to take our limited resources and at least try to 
make sure that we do not have another tragedy again, through 
our inspections and so forth.
    Obviously, we will never be able to stop them completely, 
but that is----
    Senator Johnson. We had Deputy Secretary Kennedy in front 
of our Homeland Security subcommittee in the last Congress. 
Because he refused the invitation to testify before this 
committee on the same day, I took that opportunity to ask him a 
series of questions to which I did not get very forthright 
answers. Then we submitted those questions for the record; we 
have not gotten any reply whatsoever.
    I am not quite sure how we can hold an administration 
accountable, how we can hold those officials who were at the 
heart of the matter, those who made the key decisions, those 
who I think were really derelict in their duty, resulting in 
the death of four Americans, if we do not know who made the 
decisions. How do we actually hold people accountable?
    Mr. Linick. Look, accountability is obviously part of our 
job, and we try to hold people accountable in the Department 
through a variety of mechanisms, through investigations, our 
inspections, audits. There are three areas, which I think 
pertain to accountability. One is accountability for 
implementing ARB recommendations over time, and that is 
something that we have been focusing on heavily. The other is 
accountability for making sure our contracts and grants are 
overseen properly and our contracting offices are held 
accountable. And the other area is making sure that there is 
accountability for the IT network, which has huge 
vulnerabilities.
    Senator Johnson. As you are aware, I am certainly highly 
supportive of strengthening the Office of Inspector General, 
especially in your ability to access information. I would like 
to be able to strengthen Congress' ability to actually get 
information from this administration.
    One of the things I will do is submit a letter to you 
asking those exact same questions, and maybe you can have 
greater success in your role within that Department as the 
independent auditor, the Office of Inspector General. Maybe you 
can get answers to some of these questions that not only I 
think you should be asking, not only that I think the 
administration should be asking, not only that I think this 
Congress should be asking, but that I think are questions to 
answers that the American people deserve.
    The American people deserve to know the truth. They have 
not gotten it yet.
    I will submit that letter to your office, and I would 
appreciate the help of your office in trying to get those 
answers for the American people.
    Mr. Linick. Yes, sir.
    Senator Johnson. Thank you, Mr. Linick.
    Thank you, Mr. Chairman.
    Senator Perdue. Thank you.
    Mr. Linick, we are going to start a second round. I know 
the ranking member has other questions. I have a few here.
    I would like to change direction and talk about the IT 
point that you brought up in your testimony this morning. You 
mentioned that there have been attacks on the State 
Department's network and that that compromises the IG's work 
relative to being on the same network.
    Can you talk about that in a little more detail, and talk 
about what you are doing to protect your independence and 
whether you need to be totally independent on a separate 
network? What is your recommendation there? What are you doing 
to protect the IG's independence?
    Mr. Linick. I think that your point is well taken. To the 
extent that the Department suffers from attacks, we suffer from 
attacks because we are on the same network.
    We have taken a number of steps since I have been in 
office. First of all, we have asked the Department to agree not 
to come onto our system without asking permission. We finally 
have gotten that agreement from the Department.
    But we need more than that, because right now, we are sort 
of in a gated community, if you will, where we rent. We rent 
our IT system, and the IT folks at the Department have the keys 
to our IT system.
    So they really have access, unfettered access, to the 
system. If they wanted to, they could read, modify, delete any 
of our work. We have sensitive grand jury materials. We have 
law----
    Senator Perdue. I am sorry to interrupt. How far down in 
the State Department organization is that access provided? Is 
that throughout the organization?
    Mr. Linick. Well, the State Department administrators have 
access to our system, as well as any other----
    Senator Perdue. So during an investigation, your files are 
open to the hierarchy of the State Department?
    Mr. Linick. Well, they are not open, but if an 
administrated wanted to--and again, we do not have evidence of 
this. If an administrator wanted to, he or she could come onto 
our system with their access.
    That is the problem. They come onto our system as it is 
with security patching, for legitimate reasons.
    Senator Perdue. So how is that done in other Departments?
    Mr. Linick. Well, at the very basic level, Departments 
differ in the way they handle it. Generally, there is a 
firewall or some sort or form of protection against that type 
of intrusion, because an IG just cannot protect confidentiality 
of witnesses and information, if there is a possibility.
    Now the other way some IGs do it, and this is the way I did 
it when I was Inspector General at the Federal Housing Finance 
Agency, I had a completely separate system and network with my 
own email address. I was completely off the Department's grid.
    Senator Perdue. What keeps you from doing that here?
    Mr. Linick. Well, I need money, and I need the Department's 
cooperation. I would like to be completely separate from the 
Department, to ensure the integrity of our system. But I also 
need the Department to give us access to the same systems that 
we have now. I have actually broached this topic with the 
Secretary last Friday and Deputy Secretary Higginbottom.
    Senator Perdue. Do you have evidence that State Department 
network has been attacked? And does that affect you guys?
    Mr. Linick. There is evidence it has been attacked, and it 
has affected us. I cannot really go into details, because of 
the nature of information.
    Senator Perdue. I understand that completely.
    So what are you doing to protect the independence? And how 
can you--short of separating yourself on a separate network, 
which takes money, and you said--protect the independence of 
your investigations?
    Mr. Linick. Well, we have taken the first step, in getting 
the Department to agree to not come onto our system. But the 
next step is developing a firewall around our network. Again, 
this really depends on the Department's willingness to do this 
quickly with us.
    The other thing we are trying to do, we have published four 
FISMA reports over the last 4 years where we found recurring 
weaknesses in the Department. system. That has given us a lot 
of pause, because I am not so sure, if we have problems in the 
Department. system, that obviously leads to vulnerability in 
our own system.
    Senator Perdue. So just let me be clear. Do not let me put 
words in your mouth. Are you getting cooperation from the 
organization, the State Department organization, with regard to 
this particular IT issue, relative to independence? I think 
independence is critical, if you are going to be objective in 
your evaluations. You have to have access, but you also have to 
be protected in terms of the information and confidentiality, 
as you just said.
    Is it a cooperative attitude that you are seeing? Is this 
something that is moving forward? Can we bank on the fact that 
this is going to be taking care of? Or do we need to talk to 
the other members of leadership in the State Department?
    Mr. Linick. Well, I know that Deputy Secretary Higginbottom 
is looking into this issue. She has been very receptive and 
helpful to us, in general.
    I will say the process has been very slow. It took us 
months just to get the Bureau of Diplomatic Security to sign an 
agreement not to come onto our system without approval. And 
that is only in limited circumstances.
    So it is a slow process. It is a big bureaucracy. So I am 
cautiously optimistic.
    Senator Perdue. Well, good. I am going to yield the rest of 
my time and ask Senator Murphy to have his questions now, at 
this point. Thank you.
    Senator Murphy. Thank you very much, Mr. Chairman.
    Thank you for being here today. I note that your official 
title is Inspector General for the U.S. Department of State and 
the Broadcasting Board of Governors. So I wanted to ask you 
just a few questions as to the second appendage on your title.
    The work of the BBG is perhaps more important now than 
ever, as we are fighting very sophisticated propaganda 
campaigns from nonstate actors like ISIS or Boko Haram, but 
also very complicated propaganda efforts from state actors, 
like Russia and their efforts to try to essentially buy up 
press outlets all around their periphery.
    Having an efficiently run Broadcasting Board of Governors 
and all of their constituent entities is critical to the work 
that we do abroad. And yet, the previous reports on both the 
work culture and the efficiency of the operation have been 
damning, to say the least.
    I mean, you very rarely get IG reports that are as 
straightforward as at least the 2012 report was about the work 
culture at the BBG. And you had a much older report, I think 
from 2004, 2005, that talked about tremendous levels of 
redundancy and duplication within the organization.
    So I guess my question is open-ended. I would just be 
interested to hear any updates that you have on what followup 
there has been at the Broadcasting Board of Governors following 
that 2012 report, whether you have information that suggests 
that the kind of inefficiencies that were identified in earlier 
reports still exist, and whether that is going to be subject to 
further introspection or examination for your office moving 
forward?
    Mr. Linick. Well, thank you for that question. The BBG, I 
would say, is a work in progress. As you noted, we did issue 
some damning reports within the last couple years, primarily 
focused on leadership.
    It is a part-time board. There are conflicts of interest.
    They did not have a CEO. We recommended that the hire a 
CEO. There has been a new CEO, but apparently, he has left. So 
it is without a CEO again. There were morale problems.
    I must say, in the contracting and grant area, there is 
room for improvement. We issued a report recently on their 
acquisitions, and we found violations of the Antideficiency 
Act, conflicts of interest, problems with their grants.
    So it continues to be a problem. I know that the new folks 
who are over there are trying to address these issues, and we 
are working with them on following through. We actually issued 
some recommendations on contract and grant management 
pertaining to the BBG, and they are actually required by the 
Appropriations Committee to respond to some of those 
recommendations.
    So this is a work in progress. We are on it. And we will 
keep the committee briefed on this issue.
    Senator Murphy. Again, I sort of read it as two different 
sets of problems. You have a leadership vacuum there that 
continues, and leadership deficiencies. Then you have 
identified structural issues with respect to how they contract. 
Also again, an older IG report talked about tremendous 
redundancies and duplication.
    You referenced it as a work in progress, which is often a 
way of talking about something that is slowly getting better, 
but far too slowly.
    If you identify those two problems as distinct, is one 
getting better at a rate that is faster than the other? Is one 
a more lingering and festering problem than the other?
    Mr. Linick. I would say, I think the leadership issue is 
probably getting better at a faster rate. There is a new board 
member since we issued our report and so forth. I think they 
are really trying to address those issues.
    I think the contracting issue is not so much a structural 
problem but just complying with the rules, the Federal 
Acquisition Regulations, just doing it right. So I know they 
are working on that as well.
    Since we have a more recent report on that, I would say 
that is probably the more pressing issue at the moment.
    Senator Murphy. There is a bipartisan group of us in the 
House and the Senate working on a BBG reform package. We would 
be hopeful to work with you and the folks who have worked this 
book of business, as we move forward.
    Thank you very much, Mr. Chairman.
    Senator Perdue. Thank you.
    I think the ranking member has a few more questions.
    Senator Kaine. Great. Thank you.
    Mr. Linick, I wanted to just pick right up where I left 
off. We were talking about the management of contracts and 
maybe some IT contracts. You were talking about, in some 
instances, it does not seem like there are enough contract 
management personnel.
    Do you reach a conclusion about that? Is there any degree 
to which that is because of sequester? Is it because choices 
have been made internally to hire more of one staff and less 
contract acquisition folks? What is your conclusion about that?
    Mr. Linick. We do not have any work to support an opinion 
one way or another on whether they are having problems hiring 
folks. From the work we have done, I would say it is really a 
cultural issue, because contracts and grants have skyrocketed 
in the Department over the last 5 to 10 years. The Department, 
I think, is having problems keeping up with it. They are trying 
to do a better job, and there have been improvements, and they 
have accepted many of our recommendations in this area. So I 
think it is an issue of priorities, and where they want to put 
the resources.
    I think it is a cultural issue. Contract and grant 
management is not like diplomacy.
    Senator Kaine. Yes, that is not why anybody signed up, why 
they want to go to the State Department.
    Mr. Linick. Right.
    Senator Kaine. I had the same issue when I was Governor 
with my Department of Transportation. They used to do a lot of 
projects. And over time, they migrated to an organization that 
managed a lot of projects. But they did not necessarily migrate 
their skill set from project engineers to contract managers, so 
then there was kind of a mismatch. Maybe there is some of that 
going on.
    On your new mission, you talked about the use of management 
alerts, and these management assessment reports that you do. 
Has that been well-received, as you have been doing that within 
the Department of State? Are folks responsive and respond 
positively to the alerts and reports that you give them?
    Mr. Linick. I think they responded very positively. The 
majority of our recommendations in our management alerts have 
been accepted and the Department has been working on them.
    The purpose of them is really twofold. One is to stop the 
bleeding. If we are in the middle of an audit, we do not want 
to wait until the end of an audit to tell the Department, hey, 
you have a problem because somebody is cheating you, so let us 
try to stop the bleeding before it happens.
    Then the second thing we have been trying to do is, to the 
extent that we find issues and recommendations unimplemented 
over the years, the point of the management alert is to try to 
repackage it and aim it at leadership, a different set of 
leadership, maybe a higher set of leaders, and then also 
repackage the recommendations so they can be more broadly 
applied across the Department..
    So, for example, on the contract management, we asked the 
Department to do a sampling of their contract files to make 
sure the files are in order across the board, to consider 
putting more resources into it, to consider looking at how a 
work plan for personnel can be developed so they have enough 
grant officers and contracting officers.
    So it has been well-received. And in fact, the 
Appropriations Committee, in their joint explanatory statement, 
picked up on our recommendations and asked the Department to 
respond to those recommendations, which they have. So that 
really helped us out, having Congress' endorsement behind the 
recommendations and support with complying with them.
    Senator Kaine. You did not flag this in your oral testimony 
in the new challenge category, but as I read your written 
testimony, I would call OCO a new challenge because it was kind 
of handed to you in 2014, along with the DOD and what is the 
other agency?
    Mr. Linick. USAID.
    Senator Kaine. USAID. So talk a little bit about the work 
you guys are doing together to get a handle on the way we 
manage OCO expenditures.
    Mr. Linick. So we have three OCOs, which have developed in 
the last 4 months, which is quite a stretch for our resources. 
We have Operation United Assistance for Ebola and Operation 
Freedom's Sentinel for Afghanistan, and, of course, Operation 
Inherent Resolve, which is ISIL.
    On the first one, Operation Inherent Resolve, we have been 
coordinating intensely for many months, and we have 
accomplished a lot. We became official in December. John Rymer, 
the Inspector General for DOD, was appointed the lead IG.
    Since then, we have been coordinating very closely. We have 
a joint strategic plan, which we published on March 31, which 
addresses how we are coordinating together. We are in the 
process of putting together our quarterly report, which is 
going to be published sometime at the end of April.
    And the way we have set it up is Operation Inherent Resolve 
outlined nine lines of effort in the initiative to address 
ISIL, one being governance, another being countermessaging, and 
then there are others. The way we have split up our duties is, 
if the State Department is responsible for some of those lines 
of effort, that would be within my wheelhouse. If some of those 
lines of effort pertain to DOD, then DOD would be doing the 
audits on those. To the extent that there are 
crossjurisdictional issues, then we do them together.
    So we are jointly working on strategy. We are jointly 
working on program analysis and development. And we are jointly 
working on publishing those reports. We meet regularly. I am 
going to be going on a trip to Jordan and Turkey to see how the 
State Department is addressing ISIL issues in those two areas.
    So it has been robust, but difficult, because we are taking 
it out of base. We do not have special resources for those.
    Senator Kaine. We may give DOD OCO, but we have not given 
you an OIG OCO, have we?
    Mr. Linick. No.
    Senator Kaine. Let me switch to the third part of your 
testimony, challenges. The Chair talked to you well about this 
IT independence issue, but I want to focus on two.
    This issue about not being given the same ability as other 
IG offices to investigate wrongdoing, I think that is an 
interesting one. I know you are seeking some assistance from us 
as we do the reauthorization.
    As I looked at a footnote in your testimony: Incidents or 
allegations which could serve as grounds for disciplinary 
action or criminal prosecution will immediately be referred to 
the OIG or the Bureau of Diplomatic Security or comparable 
offices. In exceptional circumstances, the Under Secretary for 
Management for State may designate an individual.
    So there is sort of a requirement that if there is 
wrongdoing that fits in that category, that either Diplomatic 
Security or the OIG or potentially somebody else be notified.
    What would the norm be, like in another agency, in your 
previous work as Inspector General? Is it a dual-reporting 
requirement? You know, report it to Diplomatic Security and 
OIG? How would it in a more normal way be structured?
    Mr. Linick. Well, in those agencies, which have a law 
enforcement component like DS, so in DOD with a law enforcement 
component, DHS, and so forth, their law enforcement components 
are required to notify them about allegations of serious or 
criminal misconduct.
    Senator Kaine. Are required to notify the IG's office?
    Mr. Linick. Correct. They are required either by statute or 
by regulation.
    And then the IG has the discretion to decide whether it 
wants to take those cases or ship them back. That is the norm. 
The reason for that is because there are certain cases that may 
not be appropriately investigated by the host agency.
    Senator Kaine. Right. So your request of us would be, in a 
reauthorization, we try to structure the reporting language to 
the IG somewhat similar to the way DOD would have it?
    Mr. Linick. Exactly. We are asking for what the other IGs 
have, in terms of legislation. We would ask that you track that 
legislation. That would be what we would like.
    Senator Kaine. Mr. Chair, I have two more lines of 
questions.
    Senator Perdue. Go ahead.
    Senator Kaine. Another change that you asked for--actually, 
I am not sure. You had this in your written testimony, but I 
just want to make sure that we understand it.
    The congressional budget justification includes a request 
to change how personnel authorities can be exercised by the OIG 
to expedite reemployment and compensation of retired annuitants 
to support oversight of the OCO operation.
    Could you explain the rationale for that request, so, 
again, as we are working on reauthorization, we understand why 
you are requesting that? We want to be helpful, if we can.
    Mr. Linick. So we have difficulties in our shop of hiring 
the right people with the right skill set to meet the demands 
of our mission. As I mentioned in my testimony, we have a 
unique mission in that we have this inspection requirement. We 
need people who know how embassies run and security. We have 
the three OCOs. And we also have these unanticipated special 
projects, like the special review of the Accountability Review 
Board and numerous other special projects that we have teams of 
people working on.
    So what we are seeking is more flexible hiring authorities 
just generally, so we can hire people who understand embassies 
better, who understand war zone contracting. In terms of 
reemployed annuitants right now, we are only able to hire part-
time reemployed annuitants. Many of them are doing our 
inspections, so our Foreign Service employed annuitants can 
only work a half year, which creates a tremendous lack of 
continuity. And then we have to hire a lot more of them in 
order to get the job done. We would like to be able to hire 
full-time rehired annuitants.
    Similarly, SIGIR, Special Inspector General for Iraq 
Reconstruction, we have a hard time hiring those folks. They 
know a lot about wartime contracting, and so forth. They have 
the skill sets, but they do not have competitive status. So we 
are looking for opportunities to grab them as well.
    Senator Kaine. Well, that will be helpful to us as we 
tackle reauthorization.
    Finally, in the last section of your testimony, and your 
written testimony too, is the impact of your work. I found this 
kind of interesting. The first paragraph you talk about the 
financial savings that you have achieved by implementation of 
reports, but then the second paragraph begins: However, these 
financial statistics do not adequately take into account our 
most significant impact, our oversight efforts and 
recommendations to improve the safety of people and facilities; 
our investigations that help ensure that Department. employees 
conduct themselves appropriately; and our work to strengthen 
the integrity of the programs, operations, and resources that 
are at the foundation of the Department's ability to help 
preserve national security.
    When I read that, I was kind of interested in it because 
when I was Mayor of Richmond, we did not have an OIG. We had an 
auditor, and the auditor kind of looked at just the numbers. 
But I guess the difference between an OIG and an auditor is 
that the OIG is looking at the numbers but also looking at the 
broader mission.
    And as I kind of interpret that testimony, it is that we 
are going to look at the numbers and find savings, but at the 
end of the day, there is a broader mission. And first is 
protecting the security of our personnel, making sure that 
folks do not do things wrong without a consequence, and 
ultimately promoting national security.
    That is really what determines the success of an OIG office 
and what the priorities are. You want to make sure that the 
State Department's priorities are in the right order. Is that a 
fair read of your testimony?
    Mr. Linick. Yes. And in the State Department, obviously, 
the priority is to protect personnel. Department personnel are 
the most important asset in the Department. They really are 
heroes.
    The folks who are at these dangerous posts, Senator Perdue 
said earlier that they do yeoman's work. We do need to protect 
them.
    It is not just about the numbers. We differ from a lot of 
office of inspectors general in that we have the security 
mission, which makes the job so gratifying and great.
    Senator Kaine. And sadly, on the security mission and how 
important it is, since Benghazi, you have had to evacuate in 
calendar year 2014 the Embassy in Libya. And in calendar year 
2015, we had to evacuate our Embassy in Yemen. These are not 
minor matters. When the United States has to evacuate an 
embassy because of security concerns, this is a big, big deal.
    So that demonstrates that, as much as we might wish the 
Benghazi incident was just a complete lightening strike not 
likely to occur again, we have to assume that the security 
challenges, which are first priority, are going to continue to 
be very important to all of us. Correct?
    Mr. Linick. Yes, sir.
    Senator Kaine. Thank you, Mr. Chairman. No other questions.
    Senator Perdue. Very good questions. Great answers.
    Mr. Linick, I just have one quick question here, and we can 
wrap this up.
    I want to talk about your relationship to the line 
management, if you will, of the State Department. One of the 
causes that you have, security, you are looking at misconduct, 
obviously national security, and also the operational 
effectiveness of the State Department itself, because that 
affects all of the above.
    How would you rate the relationship of the IG to the State 
Department, with State Department leadership? Are you getting 
what you need? You mentioned resources twice. Talk to us just a 
little bit, you said IT independence. You also talked about 
getting access to these investigations to help you do a better 
job.
    I am looking at, really, in this line of questioning, what 
have you found operationally inside the State Department that 
we need to be aware of as we look at this reauthorization?
    Mr. Linick. Well, in terms of the relationship with the 
Department, I have a very good working relationship with the 
Deputy Secretary, and I meet with the Secretary periodically as 
well. I just met with him last Friday.
    They are open to oversight. They recognize its importance. 
They recognize it is a unique role of the IG.
    They have been responsive to resource requests. Both of the 
requests that I have in my testimony, they are aware of and the 
Deputy Secretary has been working on. So I think that works 
well.
    We also try to meet regularly with other senior leaders in 
the Department, as well. So I think that relationship is 
important. To be an effective IG, you need to have that kind of 
good working relationship, because we cannot obviously force 
them to comply with recommendations.
    In terms of operationally, I would say that the 
implementation of the recommendations of the ARBs, that is 
something that has been a problem, but the Department is 
working on now. That is something that we are monitoring.
    The contracting and grant, I would say, is one of the 
bigger issues. I really think that they need to step up their 
oversight of contracts and grants. So I would say that is 
probably an extremely important priority.
    And then the IT infrastructure, I mean, after all we have 
heard about hacking in the news and so forth. This is a very 
serious issue. There is a lot of sensitive information on the 
networks, and we need to make sure that information security 
system is protected.
    To me, those are the top priorities.
    Senator Perdue. Well, that is all I have.
    Senator Kaine, do you have any other questions?
    With that, again, thank you for being here today. This has 
been very enlightening. We appreciate your insights, your 
experience, your work, your dedication that went into your 
statements, and also the effectiveness of your work. You do 
hero's work as well, and I want to thank you for that.
    The record is going to remain open until the close of 
business on Thursday, April 23, for any future submissions, if 
you would like. You may receive questions from other members in 
that period of time, as well. I would encourage you to answer 
those in the same manner that you have answered the ones 
heretofore.
    Senator Perdue. And with that, this hearing is adjourned.
    Thank you very much, Mr. Linick.
    [Whereupon, at 11:02 a.m., the hearing was adjourned.]
                              ----------                              

              Additional Material Submitted for the Record

   responses to questions submitted for the record by senator perdue
    Question #1. You testified that since the September 2012 attacks on 
the U.S. diplomatic personnel and facilities in Benghazi, the OIG has 
stepped up its oversight efforts. Can you describe the OIG's efforts to 
improve the physical security of our embassies?

    Answer. OIG helps safeguard the lives of people who work in or 
visit our posts abroad by performing independent oversight to help the 
Department improve its security posture.
    Although the Department has made significant improvements on 
overseas security, challenges remain. Through our inspection and audit 
work, OIG continues to find security deficiencies that put our people 
at risk. Those deficiencies include failing to observe set-back and 
perimeter requirements and to identify and neutralize weapons of 
opportunity. Our teams also identified posts that use inadequately 
secured warehouse space and other substandard facilities for offices. 
Our audit of the Local Guard Program found that firms providing 
security services for embassy compounds were not fully performing all 
vetting requirements contained in the contract, placing our posts and 
personnel at risk. The audit also found that regional security officers 
at posts could not demonstrate that they vetted and approved the local 
guards employed to protect their posts. In other reports, we found that 
the Bureau of Diplomatic Security (DS) (responsible for carrying out 
ongoing security functions and for setting security standards) and the 
Bureau of Overseas Buildings Operations (responsible for constructing 
facilities to meet those standards) often do not coordinate adequately 
to address important security needs in a timely manner. In accordance 
with OIG recommendations, those bureaus have taken steps to improve 
their communication and coordination. OIG will closely monitor whether 
these steps actually sustain improved joint performance to mitigate 
security vulnerabilities.
    OIG also examined the Department's reviews of, and lessons learned 
from, significant security incidents that result in the death of U.S. 
Government personnel and may require the appointment of an 
Accountability Review Board (ARB). For example, in September 2013, OIG 
published a report on its special review of the ARB process. The 
Secretary of State convenes an ARB when serious injury, loss of life, 
or significant destruction of property occurred at or related to a U.S. 
Government mission abroad. The most recent ARB was convened following 
the 2012 attacks in Benghazi.
    OIG's special review examined the process by which the Department's 
ARBs are established, staffed, supported, and conducted as well as the 
manner in which the Department tracks the implementation of ARB 
recommendations. We found that follow-through on long-term security 
program improvements involving physical security, training, and 
intelligence-sharing lacked sustained oversight by the Department's 
most senior leaders. Over time, implementation of recommended 
improvements slows. The lack of follow-through explains, in part, why a 
number of Benghazi ARB recommendations mirror previous ARB 
recommendations. This failure underscores the need for a sustained 
commitment by the Department's most senior leaders to ensure that ARB 
recommendations are timely and effectively carried out.
    OIG continues to increase its focus on security issues. OIG 
currently is following up on the Department's compliance with OIG 
recommendations in the ARB special review. OIG also is reviewing the 
Department's reported compliance with the 29 recommendations in the 
Benghazi ARB report. In addition, FY 2015 security audits (planned or 
ongoing) include an audit of compliance with vetting requirements for 
locally employed staff and foreign contractors, an audit of emergency 
action plans for U.S. missions in the Sahel region of Africa, and an 
audit of the Vital Presence Validation Process (VP2). VP2 is the 
Department's formal process for assessing the risks and costs of 
maintaining its presence in dangerous locations around the world. 
Finally, our inspection of DS' International Programs Directorate will 
underscore and support our ongoing priority focus on security.

    Question #2. You testified that the OIG is not meeting its 5 year 
inspection requirements. How often are posts abroad actually being 
inspected?

    Answer. At current staffing levels, it takes us roughly 8 years to 
inspect all overseas missions. We apply a risk-based approach in 
selecting the posts to be inspected and in determining how often they 
are inspected.

    Question #3. What resources do you need to meet your goals?

    Answer. OIG is unique in the oversight community in its mandate to 
inspect all domestic entities and overseas posts at least once every 5 
years. Meeting the 5-year inspection mandate would require 
approximately 46 additional staff (36 inspectors and 10 support staff) 
at a cost of approximately $10 million. In order to meet the 5-year 
mandate, OIG's Office of Inspections (ISP) would need to use a 
streamlined approach to conducting inspections, which would assume 
smaller teams; a more limited inspections scope; and shorter, more 
targeted reports. In addition, the new approach would require a 
significant change to ISP's planning, operations, and products to 
realize economies of scale and improved organizational efficiencies.

    Question #4. Does the 5-year mandate work? Is there a better way to 
handle inspections?

    Answer. The 5-year mandate is not feasible at the present time 
because OIG does not have the staff necessary to inspect every domestic 
and overseas operating unit once every 5 years. In addition, complying 
with the mandate does not allow OIG to provide sufficient focus on the 
highest risk posts and bureaus in the Department. We propose that 
Congress eliminate the 5-year mandate and require that OIG periodically 
inspect every operating unit using a risk-based approach that takes 
into consideration factors such as reports of problematic leadership 
and management, the size and threat level of the unit; survey results 
completed by the unit; and the value of grants, contracts, and foreign 
assistance administered or monitored by the unit. We would be pleased 
to work with you and your staff on drafting legislative language to 
accomplish this.

    Question #5. You also mentioned that recommendations from 
Accountability Review Boards (ARB) that are appointed for significant 
security incidents have not been followed through. This has been most 
recently and tragically evidenced by the attack on Benghazi in 
September 2012. You testified that a number of Benghazi ARB 
recommendations mirrored previous these recommendations into practice?

    Answer. OIG currently is following up on the Department's 
compliance with OIG recommendations in its ARB special review. OIG also 
is reviewing the Department's reported compliance with the 29 
recommendations in the Benghazi ARB report. We would be pleased to 
brief the committee once the review is completed.

    Question #6. IG Linick: As you mentioned in your testimony, 
vulnerabilities in the State Department's network directly affect OIG's 
IT infrastructure, which is part of the same network. What steps is the 
OIG taking to become more independent?

    Answer. OIG has worked with the Department's Bureaus of Information 
Resource Management (IRM) and Diplomatic Security (DS) to ensure that 
OIG's information is protected from unauthorized access by Department 
employees or outsiders. OIG determined that, in the absence of an 
independent IT network, a formal agreement with IRM and DS concerning 
control of, and access to, OIG's information by their staffs was an 
interim, but necessary, first step. We have been working with outside 
experts to determine the cost and feasibility of several approaches to 
achieving enhanced independence of our unclassified network, while also 
retaining our needed read-only access to Department systems to support 
our investigative, audit, inspection, and evaluation work. We are 
seeking the Department's cooperation and congressional assistance 
toward achieving enhanced IT independence.

    Question #7. Has the State Department been cooperative?

    Answer. Since March 2014, we have discussed with the Department the 
need for firewalls to protect OIG's IT network from unauthorized access 
by Department employees and outsiders. As a first step, we entered into 
formal agreements with IRM and DS concerning control of, and access to, 
OIG's information by their staffs. We currently are seeking the 
Department's cooperation in assisting us in developing an independent 
unclassified IT network. To date, we have not received a commitment 
from the Department achieving this objective.

    Question #8. Could you tell us a little more about your agreement 
with the Department not to enter your files?

    Answer. The agreement provides that IRM and DS will:

   Maintain a list of all employees and contractors who have 
        authorized access to OIG systems. This list is provided to OIG 
        quarterly, and shall include the names and functional titles of 
        the employees that use those accounts and have authorized 
        access;
   Request, in advance of any attempts to access OIG systems, 
        written access, and receive OIG's written approval, to access 
        OIG's systems, except when conducting investigations involving 
        the Foreign Intelligence Surveillance Act (FISA), or in the 
        event of a critical vulnerability or security incident that 
        requires immediate action;
   Alert OIG when information is accessed, intercepted, viewed, 
        modified, altered, or deleted without OIG's consent; and
   Provide real or near real-time audit log access to systems 
        in the OIG.state.gov Active Directory domain and sites to the 
        OIG Information System Security Officer.

    Question #9. How much would it cost to become fully independent on 
IT?

    Answer. Based on an analysis conducted by an outside expert, we 
have determined that it would initially cost approximately $5 million 
to separate from the Department's IT infrastructure and approximately 
$3 million annually to maintain an independent IT network thereafter. 
These costs are to separate from the Department's unclassified network 
only. OIG would remain on the Department's classified network for the 
foreseeable future.

    Question #10. Discuss recent invasions of State IT systems by 
foreign nations and malicious actors--how does this impact the IG?

    Answer. We are unable to provide information about recent invasions 
of State IT systems in an unclassified environment. However, we would 
be happy to discuss this matter with you or your staff in a secure 
environment.

    Question # 11. How can we help you protect against this problem?

    Answer. Vulnerabilities in the Department's unclassified network 
directly affect OIG's IT infrastructure, which is part of the same 
network. OIG believes that the best approach to protecting OIG 
information from unauthorized access is to create, with the cooperation 
of the Department, a separate and independent IT network.

    Question #12. Looking to the lack of parity of the State Department 
IG compared to other OIGs across the executive branch. IG Linick, you 
testified that your office is not always given the opportunity to 
investigate allegations of criminal or serious administrative 
misconduct by State Department employees. Can you elaborate on how this 
does not reflect best practices in the IG community? Why is this 
important?

    Answer. See response to Question No. 18.

    Question #13. Can you note any examples of the appearance of undue 
influence?

    Answer. In 2012, during the course of an inspection of DS, OIG 
inspectors learned of allegations of undue influence and favoritism 
related to the handling of a number of internal investigations by the 
DS internal investigations unit. The allegations initially related to 
eight, high-profile, internal investigations.
    OIG undertook a significant review of those eight cases and found, 
in a report issued in October 2014, that in three of the eight cases, a 
combination of factors in each case created an appearance of undue 
influence and favoritism by Department management. Two examples cited 
in OIG's report are discussed below.
U.S. Ambassador
    In May 2011, DS was alerted to suspicions by the security staff at 
a U.S. embassy that the U.S. Ambassador solicited a prostitute in a 
public park near the embassy. DS assigned an agent from its internal 
investigations unit to conduct a preliminary inquiry. However, 2 days 
later, the agent was directed to stop further inquiry because of a 
decision by senior Department officials to treat the matter as a 
``management issue.'' The Ambassador was recalled to Washington and, in 
June 2011, met with the Under Secretary of State for Management and the 
then-Chief of Staff and Counselor to the Secretary of State. At the 
meeting, the Ambassador denied the allegations and was then permitted 
to return to post. The Department took no further action affecting the 
Ambassador.
    OIG found that, based on the limited evidence collected by DS, the 
suspected misconduct by the Ambassador was not substantiated. DS 
management told OIG, in 2013, that the preliminary inquiry was 
appropriately halted because no further investigation was possible. OIG 
concluded, however, that additional evidence confirming or refuting the 
suspected misconduct could have been collected. For example, before the 
preliminary inquiry was halted, only one of multiple potential 
witnesses on the embassy's security staff had been interviewed. 
Additionally, DS never interviewed the Ambassador and did not follow 
its usual investigative protocol of assigning an investigative case 
number to the matter or opening and keeping the investigative case 
files.
    The Under Secretary of State for Management told OIG that he 
decided to handle the suspected incident as a ``management issue'' 
based on a disciplinary provision in the FAM that he had employed on 
prior occasions to address allegations of misconduct by chiefs of 
mission. The provision, applicable to chiefs of mission and other 
senior officials, states that when ``exceptional circumstances'' exist, 
the Under Secretary need not refer the suspected misconduct to OIG or 
DS for further investigation (as is otherwise required). In this 
instance, the Under Secretary cited as ``exceptional circumstances'' 
the fact that the Ambassador worked overseas. OIG concluded that the 
Under Secretary's application of the ``exceptional circumstances'' 
provision to remove matters from DS and OIG review could impair OIG's 
independence and unduly limit DS's and OIG's abilities to investigate 
alleged misconduct by chiefs of mission and other senior Department 
officials. OIG also concluded that these circumstances created an 
appearance of undue influence and favoritism.
DS Manager
    Another DS internal investigation in which OIG found an appearance 
of undue influence and favoritism concerned a DS Regional Security 
Officer (RSO) posted overseas, who, in 2011, allegedly engaged in 
sexual misconduct and harassment. DS commenced an internal 
investigation of those allegations in September 2011. However, at the 
time the investigation began, the RSO already had a long history of 
similar misconduct allegations dating back 10 years at seven other 
posts where he worked. A 2006 DS investigation involving similar 
alleged misconduct led to the RSO's suspension for 5 days.
    OIG found that there was undue delay within the Department in 
adequately addressing the 2011 misconduct allegations and that the 
alleged incidents of similar misconduct prior to 2011 were not timely 
reported to appropriate Department officials. OIG also found that, 
notwithstanding the serious nature of the alleged misconduct, the 
Department never attempted to remove the RSO from Department work 
environments where the RSO could potentially harm other employees, an 
option under the FAM. Notably, the DS agent investigating the 2011 
allegations reported to DS management, in October 2011, that they had 
gathered ``overwhelming evidence'' of the RSO's culpability.
    The agents also encountered resistance from senior Department and 
DS managers as they continued to investigate the RSO's suspected 
misconduct in 2011. OIG found that the managers in question had 
personal relationships with RSO. For instance, the agents were directed 
to interview another DS manager who was a friend of the RSO and who was 
the official responsible for selecting the agents' work assignments. 
During the interview, the manager acted in a manner the agents believed 
was meant to intimidate them. OIG also found that Department and DS 
managers had described the agents' investigation as a ``witch hunt,'' 
unfairly focused on the RSO. Even though OIG did not find evidence of 
actual retaliation against the investigating agents, OIG concluded that 
these circumstances, including the undue delay, created an appearance 
of undue influence and favoritism concerning DS's investigation and the 
Department's handling of the matter.

    Question #14. Does the OIG have sufficient resources (funding and 
staff) to carry out its FY 2015 work plan?

    Answer. Although our appropriation has increased in recent years, 
we still face significant challenges, given the growth of Department 
funding compared to our own. In 1996, when our mission was expanded to 
absorb the U.S. Information Agency, OIG's budget represented 0.70 
percent of the Department's appropriation. Over the following decade, 
OIG's budget was largely flat.
    Through the support of Congress and the administration, OIG's 
funding has more than doubled in the last few years. By comparison, 
however, the Department's funding nearly quadrupled (more than 380 
percent) between 1996 and 2014, accompanied by significant increases in 
foreign assistance for which OIG also provides oversight. As a result, 
even with the increase included in the 2015 budget and the President's 
FY 2016 request, OIG still represents less than one-third of one 
percent of the Department's operating budget. This percentage drops to 
less than one-quarter of one percent when Department-managed foreign 
assistance is included.
    In addition to the substantial number of programs and dollars for 
which we have oversight, another challenge that we face now is the new 
requirement that OIG conduct joint oversight of Operation Inherent 
Resolve (OIR) to defeat the Islamic State of Iraq and the Levant. Since 
we are still in the process of defining the scope of our OIR oversight 
commitments, long-term impacts on mission priorities are difficult to 
predict. Currently, we are funding these responsibilities out of 
existing resources, a situation that necessarily reduces oversight 
resources for our other mission-critical priorities and operational 
needs.

    Question #15. What efforts do you take to be more effective, to do 
more with less?

    Answer. Since joining OIG, I have implemented a number of new 
initiatives to enhance the effectiveness and efficiency of OIG's 
independent oversight of the Department's programs and operations.
    Soon after my arrival, we began to issue management alerts and 
management assistance reports. They alert senior Department leadership 
to significant issues that require immediate corrective action. For 
example, we issued two management assistance reports recommending that 
the Department take immediate action against grantees who misused grant 
funds. The Department's response to these products has been favorable, 
and it has concurred with most of our recommendations.
    The Office of Evaluations and Special Projects (ESP) was 
established in 2014 to enhance OIG's oversight of the Department and 
BBG. In particular, ESP undertakes special evaluations and projects and 
complements the work of OIG's other offices by further developing the 
capacity to focus on broader, systemic issues. For example, in October 
2014, ESP published a review of selected internal investigations 
conducted by DS, which addressed allegations of undue influence by 
Department management. Currently, ESP is undertaking a joint review 
with the Department of Justice OIG of a number of shooting incidents in 
Honduras in 2012, which involved Drug Enforcement Administration and 
Department of State personnel.
    OIG is also using ESP to improve OIG's capabilities to meet 
statutory requirements of the Whistleblower Protection Enhancement Act 
of 2012 and other whistleblower statutes and policies. Department 
employees, employees of contractors and grantees, and others have been 
encouraged to report fraud, waste, abuse, and misconduct. Such 
reporting must take place without fear of retaliation. We designated an 
ombudsman (a senior ESP attorney) for these purposes. We also produced 
an educational video and published a guide regarding whistleblower 
protections, both of which are available on our Web site.
    OIG is developing an automated evidence tracking system to enhance 
evidence processing accuracy and efficiency and employee computer-
forensics and data-processing. Further, we are building the capacity of 
our new data analytics group and developing a fusion cell consisting of 
special agents, forensic auditors and analysts, and computer 
specialists. This group of specialists will enable all of our divisions 
to proactively analyze financial and other data to identify potential 
vulnerabilities in Department programs and processes and to perform 
fraud risk assessments.
    We have enhanced our efforts to identify and refer appropriate 
cases to the Department for suspension and debarment. Our Office of 
Investigations and Office of Audits prepare detailed suspension and 
debarment recommendation packages, in consultation with our Office of 
General Counsel. These recommendation packages include referral 
memoranda summarizing all relevant facts and setting forth the specific 
grounds for suspension or debarment and are submitted to the 
Department's Suspension and Debarment Officials (SDOs) for action. 
Between FY 2011 and FY 2014, OIG referred more than 100 cases to the 
Department for action.
    To further enhance our oversight efficiency and to have ``boots on 
the ground'' at key financial locations, OIG placed staff in 
Charleston, SC, where the Department's Global Financial Services Center 
is located, and soon OIG staff will reside in Frankfurt, Germany, the 
site of one of the Department's regional procurement centers. Both 
locations are responsible for billions of U.S. taxpayer dollars.

    Question #16. As we work on a new State Department Authorization 
bill in the full committee, what opportunities for increased 
effectiveness do you see from a broader, operational perspective?

    Answer. See response to Question No. 17.

    Question #17. What are your top priorities, particularly in terms 
of cost effectiveness?

    Answer. In terms of cost effectiveness, OIG's top priorities 
include management of contracts and grants, financial management, 
foreign assistance coordination and oversight, and rightsizing.
Contract and Grants
    The Department faces challenges managing contracts and grants, 
including cooperative agreements. The challenges have been reported in 
OIG audits, inspections, and investigations and were highlighted in two 
management alerts for senior Department management. For example, in FY 
2014, more than 50 percent of the inspections carried out in overseas 
posts and domestic bureaus contained formal recommendations to 
strengthen controls and improve administration of contracts and grants. 
In a number of sites inspected during FY 2014, inspectors recommended 
increased training for grant officer representatives (GOR).
    In one management alert, OIG reported that, over the past 6 years, 
OIG had identified Department contracts with a total value of more than 
$6 billion in which contract files were incomplete or could not be 
located at all. The alert stated that failure to maintain contract 
files creates significant financial risk, demonstrates a lack of 
internal control over the Department's contract actions, creates 
conditions conducive to fraud, impairs the ability of the Department to 
take effective and timely action to protect its interests, and limits 
the ability of the Government to punish and deter criminal behavior.
    In another management alert, OIG highlighted deficiencies with 
overall grants management caused by too few staff managing too many 
grants, including weaknesses in oversight; insufficient training of 
grant officials; and inadequate documentation and closeout of grant 
activities. The alert stated that failure to maintain appropriate 
oversight of grants results in a lack of internal control and exposes 
the Department to significant financial risk. These conditions could 
lead to the misuse or misappropriation of grant funds, failure to meet 
grant program objectives, and inability to utilize unused grant funds 
that have expired. Both management alerts made recommendations to 
senior Department officials to mitigate the highlighted 
vulnerabilities.
Financial Management
    Financial management remains a significant management challenge for 
the Department. During the audit of the FY 2014 financial statements, 
an independent auditor identified significant internal control 
deficiencies related to financial reporting, property and equipment, 
budgetary accounting, unliquidated obligations, and information 
technology. In another audit report, OIG found that although the 
Department had generally used most of its available funds within the 
periods of availability, there were opportunities to improve fund 
management. OIG identified two issues that had negatively affected fund 
management and that could be improved: insufficient oversight of 
unliquidated obligations and delays in the contract closeout process. 
Because of limitations in funds management in these two areas, the 
Department lost the use of approximately $153 million in funds. Based 
on information provided during the compliance process, bureaus have 
taken action to improve their efforts to oversee unliquidated 
obligations in response to this audit.
Foreign Assistance
    Foreign assistance resources managed by the Department and the U.S. 
Agency for International Development (USAID) under the direction of the 
Secretary of State have grown substantially over the last 10 years. 
Coordinating foreign assistance programs among agencies, Department 
bureaus, and missions is a continuing challenge as is the proper design 
and oversight of Department-managed assistance programs.
    Coordination problems plague domestic bureaus. For example, during 
the inspection of the Bureau of Conflict Stabilization and 
Stabilization Operations (CSO), OIG noted that the bureau's mission 
overlapped with other U.S. Government entities, including USAID's 
Office of Transition Initiatives and the Bureau of Democracy, Human 
Rights, and Labor; the Bureau of International Narcotics and Law 
Enforcement Affairs; and the Bureau of Near Eastern Affairs' Middle 
East Partnership Initiative. This overlap appeared to extend into CSO's 
programs; OIG found that although CSO had not received appropriated 
foreign assistance funds, it had competed to obtain these funds from 
other entities.
    In addition to problems with program coordination, the Department 
also struggles to track the status of its foreign assistance funds. 
Neither the domestic Global Financial Management System and its data 
repository, nor the Overseas Regional Financial Management System and 
its data repository, can easily collect and analyze funding and 
expenditures by program, project, or country.
    At the same time, the Department has made some progress in 
facilitating transparency and coordination. It recently posted some, 
but not all, foreign assistance information by country to 
www.foreignassistance.gov. The Department also started posting 
completed mission and bureau program evaluations on the Internet. 
Additionally, the Department required that work commitments of 
contracting officer representatives (CORs) spending more than 25 
percent of their time on COR duties, reflect those duties; however, the 
requirement did not extend to GORs.
Rightsizing
    During inspections, OIG frequently questions the Department's 
rationale for maintaining embassies, consulates, and other diplomatic 
facilities in certain locations considering the costs versus the 
benefits and the security and safety concerns. Establishing optimal 
staffing levels also presents an ongoing management challenge. For 
example, OIG recommended that the Department clarify mission staffing 
projections during four inspections in 2014. The cost of assigning an 
employee overseas is almost triple that of basing an employee 
domestically ($601,139/year vs. $228,282/year). OIG continues to find 
unneeded positions overseas, which also place employees and their 
families at unnecessary security risk. At the same time, more employees 
are needed in other locations.

    Question #18. What challenges is the State Department OIG facing 
that are impeding it being a catalyst for effective management and 
efficient use of taxpayer dollars in conducting U.S. diplomacy and aid?

    Answer. OIG faces several challenges, identified below, that impede 
its ability to conduct effective oversight.
OIG Network Vulnerabilities
    Vulnerabilities in the Department's unclassified network directly 
affect OIG's IT infrastructure, which is part of the same network. We 
noted in our November 2013 management alert on information security 
that there are thousands of administrators who have access to the 
Department's computer network. That access runs freely throughout OIG's 
IT infrastructure and increases risk to OIG operations. For example, a 
large number of Department administrators have the ability to read, 
modify, or delete any information on OIG's network including sensitive 
investigative information and email traffic, without OIG's knowledge. 
OIG has no evidence that administrators have compromised OIG's network. 
At the same time, had OIG's network been compromised, we likely would 
not know. The fact that the contents of our unclassified network may be 
easily accessed and potentially compromised places our independence at 
unnecessary risk and does not reflect best practices within the IG 
community. OIG seeks to transition to an independently managed 
information system, which will require the Department's cooperation and 
support from Congress.
Right of First Refusal to Investigate Allegations of Criminal or Other 
        Serious Misconduct
    Unlike other OIGs, my office is not always afforded the opportunity 
to investigate allegations of criminal or serious administrative 
misconduct by Department employees. Department components, including 
DS, are not required to notify OIG of such allegations that come to 
their attention. For example, current Department rules provide that 
certain allegations against chiefs of mission shall be referred for 
investigation to OIG or DS. However, that guidance further states that 
``[in] exceptional circumstances, the Under Secretary for Management 
may designate an individual or individuals to conduct the 
investigation.'' Thus, DS or the Under Secretary may initiate an 
investigation without notifying us or giving us the opportunity to 
evaluate the matter independently and become involved, if appropriate. 
Accordingly, OIG cannot undertake effective, independent assessments 
and investigations of these matters as envisioned by the IG Act.
    The directives establishing this arrangement appear to be unique to 
the Department. By contrast, the Departments of Defense, Justice, 
Homeland Security, the Treasury (and the IRS), and Agriculture, all of 
which had within them significant law enforcement entities prior to the 
establishment of their respective offices of inspector general, defer 
to their OIGs for the investigation of criminal or serious 
administrative misconduct by their employees or with respect to their 
programs. Notice must be provided by all agency components to their 
respective OIGs of, at a minimum, allegations of misconduct by senior 
employees. In some agencies, notice must be provided of such 
allegations with respect to all employees. The respective OIGs have the 
right to decide whether to conduct investigations themselves or refer 
matters back to the relevant agency component for investigation or 
other action. However, in some cases, when requested by OIG to do so, 
the relevant agency component to which the OIG referred back the matter 
must report to the OIGs on the progress or the outcome of 
investigations.
    Particularly where senior officials are involved, the failure to 
refer allegations of misconduct to an independent entity like OIG 
necessarily creates a perception of unfairness, as management is seen 
to be, as the U.S. Government Accountability Office (GAO) notes, 
``investigating itself.'' \1\ This risks undermining confidence in the 
integrity of the Department. Moreover, this arrangement prevents OIG 
from carrying out its clear statutory duty, set forth in the IG Act, 
``to provide policy direction for and to conduct, supervise, and 
coordinate . . . investigations relating to the programs and 
operations'' of the Department.
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    \1\ See, e.g., GAO, Inspectors General: Activities of the 
Department of State Office of Inspector General at 25-26. (GAO-07-138, 
March 2007) ([B]ecause DS reports to the State Department's 
Undersecretary [sic] for Management, DS investigations of department 
employees, especially when management officials are the subjects of the 
allegations, can result in management investigating itself.''); see 
also OIG's Review of Selected Internal Investigations Conducted by the 
Bureau of Diplomatic Security (ESP-15-01, October 2014) (Department 
policies and procedures appear to have significant implications and 
created an appearance of undue influence and favoritism, which 
undermines public confidence in the integrity of the Department and its 
leaders).
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    Accordingly, we are seeking legislative support--similar to that 
provided to other OIGs--for early notification to OIG of allegations of 
certain types of misconduct. In addition, OIG is seeking legislative 
clarification of its right to investigate such allegations. Current 
Department directives are a barrier to achieving accountable and 
transparent government operations.
Hiring Authorities
    State OIG is unique in several respects. Much of its oversight 
involves programs and operations overseas. Moreover, OIG is statutorily 
required to inspect every domestic and overseas operating unit around 
the world. In addition, as mentioned above, OIG now has shared 
statutory responsibility to oversee current and future overseas 
contingency operations. OIG also frequently faces unanticipated 
``special projects,'' such as the special review of the ARB process, as 
a result of global security incidents and congressional requests.
    OIG needs the ability to quickly hire additional highly skilled and 
experienced individuals (such as those who can do a security inspection 
in a high-threat post and/or who know how to investigate contract fraud 
in a war zone) and to quickly release them when their services are no 
longer needed.
    We would be pleased to work with the committee and discuss various 
options for enhancing our hiring authorities.

                                  [all]
```