Overseas Presence: Cost Analyses and Performance Measures Are Needed to Demonstrate the Full Potential of Providing Embassy Support Remotely
Published: 2006-05-02T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The President has emphasized the importance of safety, efficiency, and accountability in U.S. government staffing overseas by designating the achievement of a rightsized overseas presence as a part of the President's Management Agenda. One of the elements of rightsizing involves relocating certain administrative support functions from overseas posts to the United States or regional centers overseas, which can provide cheaper, safer, or more effective support. This report (1) reviews State's efforts in providing administrative support from remote locations, (2) identifies the challenges it faces in doing so, and (3) outlines the potential advantages and concerns associated with providing support remotely.
section_title: What GAO Found
paragraphs: State has a number of regional and domestic offices that provide some management support remotely to overseas posts in areas such as financial management and human resources. For example, State's Bureau of Western Hemisphere Affairs provides support to posts in its region through staff based in Florida. State announced in October 2005 it would identify and remove additional functions that do not need to be performed at post and could instead be performed domestically or at regional centers overseas. State faces several challenges in trying to expand its use of remote support. For example, restrictions on what management functions non-American staff can perform might limit the extent to which services can be provided remotely. In addition, current funding arrangements for various regional bureaus and posts might limit opportunities for remote support to be offered from one region to another, while posts' reluctance to change is a further constraint. State is assessing whether certain regulations could be waived or changed and how institutional challenges might be overcome. There are several potential advantages to providing administrative support to posts from remote locations, and several concerns. For example, one U.S.-based officer provides financial management support to multiple overseas posts, eliminating the need for an American financial management officer at each post served, which, according to State, could result in cost savings. Officials at posts we visited reported they were generally satisfied with the level of support and customer service at a regional or domestic service center, though some noted concerns. However, at the time of our review, State had neither analyzed the potential cost savings associated with providing remote support nor systematically assessed the quality of support provided. In addition, many officials in Washington and overseas were unaware of the full breadth of support offered by regional service centers.

section_title: Letter
paragraphs: The Department of State (State) operates more than 260 embassies,  consulates, and other posts in about 180 countries and employs more than  11,000 Foreign Service officers and over 35,000 Foreign Service nationals.  Operating under a decades-old management model, most of these posts are  still directly responsible for carrying out the majority of the administrative  functions, such as processing vouchers for payment, necessary for their  day-to-day operations. The President has emphasized the importance of  safety, efficiency, and accountability in U.S. government staffing overseas  by designating the achievement of a rightsized overseas presence as part of  the President’s Management Agenda. One of the elements of rightsizing is  to relocate certain administrative support functions from overseas posts to  the United States or to regional service centers overseas, which can reduce  costs, improve services, and lessen the overall U.S. government footprint.
On January 18, 2006, the Secretary of State announced her vision for the  future of the Department of State, including plans for the global  repositioning of the United States’ official overseas presence. These plans,  which include moving hundreds of positions to critical posts in regions  such as Africa, South and East Asia, and the Middle East, call for new  thinking on how State conducts its overseas operations. In particular, State  intends to increasingly provide support functions remotely, as is presently  done through regional service centers in Frankfurt, Germany, and Fort  Lauderdale, Florida, which provide management support to overseas posts  in areas such as human resources and financial management.
Over the past several years, we have provided the Subcommittee with  reports and testimonies to assist in the oversight of staffing and operations  at U.S. posts overseas. In order to ensure that the U.S. government’s goals  in rightsizing its overseas presence are being met, you requested that we  review actions to expand the use of support from remote locations; the  progress that the U.S. government is making on rightsizing, including  activities of the Office of Rightsizing within State; and the implementation  of measures to reduce the duplication of support functions between State  and the U.S. Agency for International Development (USAID). This report  (1) reviews State’s efforts to provide administrative support from remote  locations, (2) identifies the challenges it faces in doing so, and (3) outlines  the potential advantages and concerns associated with providing support  remotely. Later in 2006, we will report on the activities of the Office of  Rightsizing and the implementation of measures to consolidate State and  USAID support activities at overseas posts.
To address our objectives, we reviewed State’s documents on its initiatives  to provide support remotely and the foreign affairs regulations for carrying  out administrative functions overseas. We spoke with officials at State’s  regional and functional bureaus in Washington, D.C., and met with senior  management and regional staff at the Florida Regional Center in Fort  Lauderdale, Florida, and the Financial Services Center in Charleston, South  Carolina. We also met with senior management, regional staff, and locally  employed staff that provide remote support from the Regional Support  Center in Frankfurt, Germany. We met with ambassadors, deputy chiefs of  mission, management officers, and other U.S. embassy staff, including  locally employed staff, at four posts that receive remote support. We chose  the posts located at Belize City, Belize; Helsinki, Finland; Nassau, Bahamas;  and Valetta, Malta, because they represent a sample of both small and  medium-sized posts that receive remote support. We also visited Mexico  City to talk with embassy officials about how the U.S. mission to Mexico  has been rightsized and how the embassy provides support to consulates  throughout the country. In addition, we met with officials in Paris, France,  to discuss the financial support that locally employed staff provide to posts  in Africa. Also, we conducted telephone interviews with management staff  at 20 overseas posts regarding their reporting on rightsizing efforts to  Washington and, when applicable, regarding remote support they receive.  Lastly, we reviewed post profiles and cost data associated with the  placement of American personnel overseas. We performed our work from  June 2005 until April 2006 in accordance with generally accepted  government auditing standards. (For a detailed discussion of our scope and  methodology, see app. I.)
subsections: section_title: Background
paragraphs: Following the 1998 embassy bombings in Nairobi, Kenya, and Dar es  Salaam, Tanzania, a number of reviews called for the reassessment of  overseas staffing levels and suggested a series of actions to adjust the  overseas presence, including relocating some functions to the United  States and to regional centers, where feasible. The White House, Congress,  the Office of Management and Budget (OMB), and GAO have emphasized  rightsizing as vital to ensuring that the overseas presence is at an optimal  and efficient level to carry out foreign policy objectives. GAO’s rightsizing  framework, which has been adopted by OMB and State, consists of three  factors—mission, security, and cost—that should be weighed when making  rightsizing decisions. In addition, the President’s Management Agenda  (PMA) has identified rightsizing as one of the administration’s priorities.  One way to provide efficient administrative support to overseas posts is by  consolidating and centralizing service delivery within a geographic area  through regional service centers located overseas and within the United  States. Two objectives of regional service centers, which address the three  factors of the rightsizing framework, are to improve administrative support  to overseas posts (mission) and to reduce staffing overseas whenever  possible (cost and security).
Within the State Department a number of bureaus and offices are  responsible for the administration and oversight of regional operations  overseas. The Under Secretary for Management is responsible for  implementing the PMA initiatives and, in particular, working with the White  House and OMB on the initiative focused on rightsizing the U.S.  government’s overseas presence. The congressionally mandated Office of  Rightsizing leads State’s efforts to develop mechanisms to better  coordinate, rationalize, and manage the deployment of U.S. government  personnel overseas. In addition, the Office of Global Support Services and  Innovation in the Bureau of Administration coordinates State’s efforts to  improve the delivery of support services to all overseas posts.  This office  partners with service providers at posts and State’s various regional and  functional bureaus to move support work to safer and lower-cost regional  and central locations.
The operation of U.S. embassies and consulates overseas requires basic  administrative support services for overseas personnel, such as financial  management and personnel services. At the post level, the management  section, which is normally headed by a management counselor or  management officer, is responsible for carrying out the administrative  functions at a post. The typical management section of an embassy consists  of several U.S. Foreign Service officers who are in charge of financial  management, human resources, information management, and general  services. They are assisted by locally employed staff who serve as voucher  examiners, cashiers, and financial and personnel assistants and specialists.  Smaller posts have not historically had full management sections with  trained, experienced U.S. citizen officers filling each of the management  positions, such as a financial management officer or human resources  officer. Therefore, many times these posts rely on remote support from the  United States or a regional service center to obtain administrative support.
section_title: A Number of State Bureaus Provide Embassy Support Remotely, with More Efforts Planned
paragraphs: State has a number of overseas regional bureaus that provide management  support remotely in a variety of ways. State’s functional bureaus also  provide remote support. As a part of its rightsizing efforts, State developed  plans to regionalize support by identifying all nonlocation-specific  functions and removing them from overseas posts, starting with critical  danger posts, where it is crucial to have as few personnel as possible due to  security concerns.
subsections: section_title: State’s Regional Bureaus Offer Remote Support in a Variety of Ways
paragraphs: Two regional bureaus provide remote support from a regional service  center staffed with a cadre of management staff assigned to various posts.  Other regional bureaus assign management staff at larger posts to assist  neighboring posts that lack the management staff necessary to carry out all  of the post’s administrative functions.
subsections: section_title: Two Regional Bureaus Have Regional Service Centers
paragraphs: State’s Bureau of Western Hemisphere Affairs and the Bureau of European  and Eurasian Affairs offer a variety of personnel and other administrative  support services remotely to their posts through regional service centers.  Both regional service centers—the Florida Regional Center in Fort  Lauderdale, Florida, and the Regional Support Center in Frankfurt,  Germany—have a director who oversees operations and reports to the  executive director of each respective regional bureau in Washington, D.C.  Both centers’ buildings also house various other regional support activities  that are managed by the respective functional bureaus, such as a regional  procurement office that provides purchasing and contracting services to  posts.
The Florida Regional Center provides financial management and human  resources support to about 16 posts located in Latin America and the  Caribbean. The posts that receive remote support in these functions do  not have a full-time, American financial management officer or human  resources officer; rather, the U.S. post management officer at these  posts serves multiple roles and spends a certain percentage of his or  her time on various management activities, including the certification of  vouchers and some personnel functions, with assistance from locally  employed staff. However, the management officers might not be able to  provide enough personnel or financial support due to their lack of  experience or training in the function as well as time constraints,  according to officials at the posts we visited. To compensate for these  limitations, a regional human resources or financial management  officer, based in Fort Lauderdale, visits each post for which he or she is  responsible on an agreed schedule that is outlined in a memorandum of  agreement between the post and the Florida center. For example, during  a typical visit, a regional human resources officer ensures that the post  is in compliance with local labor laws and regulations, evaluates post  personnel operations and practices, addresses employee morale issues,  conducts salary and benefits surveys, provides guidance on post training  needs, and performs a host of other higher level human resources  duties, as necessary. A regional financial management officer’s  responsibilities include reviewing post management practices to  prevent waste, fraud, and mismanagement; conducting spot reviews of  vouchers, purchase orders, and petty cash transactions; and providing  assistance in post budget and financial plans. The Florida center also  has one regional information management officer involved in a pilot  program to provide support to two posts that do not have a permanent  information management officers assigned, as well as three information  management specialists and two office management specialists that  provide additional support to posts throughout the region, when  necessary.
The Regional Support Center in Frankfurt, Germany, provides  management assistance in financial management and human resources  to about 40 posts throughout Europe and Eurasia; however, it does this  on a more consultative, as-needed basis than the Florida center. The  Frankfurt center’s focus is to promote self-reliance in the full range of  financial and personnel activities at European and Eurasian posts. It  provides management oversight to posts and assists staff in developing  various managerial skills through oversight visits and training. Many of  the posts the center serves do not have full-time human resources  officers or financial management officers, and a number of them are  staffed by junior or first-tour management officers who need occasional  assistance or training in core management functions. Regional support  is provided through occasional post visits from regional officers and  senior, locally employed staff located at the Frankfurt office, as well as  through training provided at the Frankfurt center.
Table 1 provides a breakdown of the number of regional management staff,  the number of posts they cover, and the types of support they provide from  Fort Lauderdale and Frankfurt.
Table 2 provides data on the four posts that we visited that receive financial  and personnel support from a regional service center in Fort Lauderdale or  Frankfurt and the various characteristics of those posts, including the total  number of staff, the number of local staff that carry out financial and  personnel functions, the posts’ budgets, and the number of annual visits  received from a regional manager. Fort Lauderdale and Frankfurt currently  provide administrative support remotely to small and medium-sized posts,  which in some instances removes the need for an American officer to carry  out those support functions at post.
State’s other regional bureaus use mechanisms other than regional centers  to support posts’ administrative needs remotely. In particular, the Bureaus  of African Affairs, East Asian and Pacific Affairs, Near Eastern Affairs,  Western Hemisphere Affairs, and South and Central Asian Affairs use  partnering arrangements to provide remote support from larger posts or  embassies to small or medium-sized posts that do not have resident  American human resources or financial management officers. For example,  because Embassy Phnom Penh does not have a resident human resources  officer, the management staff at Embassy Bangkok provides support by  reviewing human resources operations and providing ad hoc advisory  assistance at least twice per year. In Mexico, the Embassy in Mexico City  provides financial management support to about nine consulates  throughout the country that do not have resident financial management  officers. In addition, the Bureau of African Affairs employs staff in Paris to  provide financial support to posts in Africa. Some posts have a support  agreement that outlines how many visits will be made and what functions  will be carried out under such partnering arrangements.
Officials from the Bureau of East Asian and Pacific Affairs in Washington  said that posts in Asia use partnering because geographic distances and  language and cultural differences between posts in some areas make it  difficult to devise a regional service center that, like those in Frankfurt and  Fort Lauderdale, meets all posts needs. Furthermore, officials said the  regional bureau currently lacks the funding to establish a regional service  center with a new building and additional management staff. See figure 1  for a map of several remote support partnerships in East Asia and the  Pacific.
In addition, the Bureau of Near Eastern Affairs has embarked on an effort  to make extensive use of remote support provided from the United States  due to the extreme security threat faced at new embassies, particularly in  Baghdad, Iraq. For example, an official from the Bureau of Near Eastern  Affairs told us that State plans to provide increased financial management  support to the embassy in Baghdad from centralized operations in  Charleston, South Carolina, rather than performing all financial  management operations at post. However, he pointed out that it would take  significant time and money before the bureau could remove all  nonlocation-specific functions from critical danger posts, as outlined in  State’s 2006 operational plan.
section_title: State’s Functional Bureaus Also Provide Remote Support
paragraphs: Several functional bureaus within State provide remote support in financial  management, information management, procurement, security, courier,  medical, and other functions. Some of these operations are offered  centrally from locations within the United States and others at overseas  locations such as the regional center in Frankfurt. One example of a  domestic support operation is the Global Financial Services Center within  the Bureau of Resource Management, which has a central location in  Charleston, South Carolina, and receives support from offices in Bangkok,  Thailand, and Paris, France. The center is responsible for disbursement,  payroll, accounting, cashier monitoring and training, customer support,  and other financial management support for posts around the world.  Additional examples of remote support from functional bureaus include  the following:  The Bureau for Information and Resource Management sponsors  Regional Information Management Centers, which provide  telecommunications, network, systems, engineering, installation, and  maintenance support to overseas posts from a number of locations.
The Bureau of Administration operates the Regional Procurement  Support Office, which provides contract and procurement services and  provides goods and services to posts throughout the world, for a certain  fee.
State’s Bureau of Diplomatic Security provides regional engineering  support and diplomatic courier operations to posts overseas.
State also has various regional medical offices throughout the world  that are administered by the Office of Medical Services.
section_title: State Developed an Operational Plan for Rightsizing
paragraphs: State’s fiscal year 2006 operational plan, Organizing for Transformational  Diplomacy: Rightsizing and Regionalization, identifies post functions  that can be performed remotely. The plan focuses on first removing  nonlocation-specific functions—or functions that could potentially be  removed from posts and carried out either from the U.S. or a regional  center—from critical danger missions, where State officials said it is  crucial to have as few personnel at posts as possible due to security  concerns. The plan envisions eventually removing those functions from all  overseas posts. Officials from the Office of Global Support Services and  Innovation identified 78 nonlocation-specific functions and, in December  2005, State selected 16 of these functions that it planned to provide to  critical danger posts from remote locations, according to officials. For a list  of some of the nonlocation-specific functions that can be provided  remotely, see table 3.
State’s operational plan includes goals and timelines for action. As of April  2006, State indicated that a number of initiatives to remove nonlocation- specific functions were under way in a number of posts; however, it is too  early to asses State’s progress in implementing the plan.
In December 2005, State’s Office of the Inspector General (IG) recognized  State’s operational plan as a good start and recommended that the Under  Secretary for Management produce a Departmentwide master plan for  formally accrediting regional centers. This recommended plan would  include long-term capital construction requirements for housing and office  space, standardized service expectations, and management structures that  ensure accountability to serviced bureaus and posts. As of March 2006,  officials from the Office of Rightsizing and the Bureau of Administration  said they were beginning to address the IG’s findings.
While officials from the executive offices of some of the regional bureaus  told us that State’s operational plan is on the right track, they cautioned  that the implementation of the plan must take into consideration the  various realities faced by posts in different regions of the world. For  example, an official of the Bureau of African Affairs told us that many posts  in Africa lack the technological capabilities to be able to utilize remote  support, which requires more processes to be done electronically. He  cautioned that certain posts would need to obtain better bandwidth  connectivity to handle online financial management transactions. In  addition, officials from the bureau did not believe that the three African  posts identified as critical danger posts would meet the strategy’s March  2006 timeline to receive nonlocation-specific services remotely. Officials  from the Bureaus of Near Eastern Affairs, South and Central Asian Affairs,  Western Hemisphere Affairs, and East Asia and Pacific Affairs agreed that  there is not a one-size-fits-all approach to providing support remotely. An  official from the Bureau of Western Hemisphere Affairs added that if more  nonlocation-specific functions are moved from posts to remote locations,  regional bureaus would have to release or shift many local staff that  currently carry out those functions at posts and hire additional Americans  in the United States or staff at regional service centers overseas.
Officials in the Bureau of Western Hemisphere Affairs also pointed out that  the various administrative bureaus within State, to which the workload  related to remote support might be assigned, may not yet have the capacity  to handle the additional work. For example, they said that the Bureau of  Resource Management had not yet reported that it is ready to provide  additional remote support in the area of financial management. However,  according to the officials, the Bureau of Information Resource  Management is an example of a functional bureau that is committed to  maximizing the way in which it provides information technology services  to overseas posts and it is standardizing its regional information  management centers.
section_title: State Department Faces Challenges in Its Plans to Increase Embassy Support from Remote Locations
paragraphs: State is currently looking to move forward with its fiscal year 2006  operational plan for remote support; however, it faces several challenges  that could hinder its further expansion of remote support services. In  particular, limits on what management functions non-American staff  perform might limit the extent to which services can be provided remotely.  In addition, one regulation requires original invoices for payment, which  could hinder additional remote support provided electronically. Also,  current funding arrangements for the various regional bureaus and posts  might limit opportunities for remote support to be offered from one region  to another. Finally, a reluctance to change further constrains opportunities  to expand remote support.
subsections: section_title: Limits on Non-American Staff Responsibilities Might Hinder Remote Support
paragraphs: Officials at the posts we visited told us that empowering local staff could  play a significant role in expanding remote support; however, such staff are  limited in the types of support that they may provide. For example, while  several officials stressed that there are certain tasks that, for reasons of  national security, must be carried out overseas by security-cleared  American citizens, some tasks, such as certifying vouchers, may be done by  non-American staff. In fact, according to the Foreign Affairs Handbook  (FAH), direct-hire, locally employed staff members who meet certain  professional qualification criteria and have proven records of integrity and  consistent superior performance may be designated to certify vouchers as  Alternate Certifying Officers. Several officials at the Florida center said  that allowing such staff to certify with oversight from a regional officer  could remove the need for American officers at some posts. However, we  found a lack of clarity regarding this issue at several posts. In particular,  several officials whom we spoke with in Washington and overseas either  were unaware that non-American staff could certify vouchers or said there  were limitations on which types of vouchers or what maximum monetary  value those staff may be designated to certify.
Additionally, State officials told us that other tasks, such as procurement,  could also be carried out by non-American staff with oversight from an  American regional officer if current regulations limiting their authority  were changed. State is exploring this issue through a pilot program at  Embassy Brussels to implement contracting authority for locally engaged  staff. If successful and expanded, the program could free up American  officers for essential operational and management controls activities, or  potentially eliminate some American positions at posts, according to  officials in Washington. Officials in Washington and at posts we visited said  that State should reexamine its policies and determine, based on a risk- benefit analysis, what additional powers or responsibilities could be given  to local, non-American staff, and then communicate that to posts.
section_title: Existing Regulation Could Hinder Use of Technologies in Providing Remote Support
paragraphs: State officials noted that, with the right technological applications, some  administrative functions, such as the entire payment process, could be  performed from a remote location with minimal involvement from posts.  However, State faces challenges in making this transition due to a  regulation that requires original invoices in processing payments. State  recognizes that leveraging today’s Web-based technologies and global  business practices is essential to carrying out administrative functions  remotely, and it reports that it is working aggressively with embassies and  agencies to use technology and improved management methods to  eliminate the nonessential U.S. government presence overseas. In  addition, the Under Secretary for Management asked posts to move ahead  with efforts to provide additional support remotely and to identify any legal  or regulatory barriers, according to State officials. For example, State has  waived the regulation requiring an original invoice in order to allow a pilot  post being served by the regional center in Frankfurt to e-mail or fax  vouchers, invoices, and other supporting documentation to Frankfurt for  certification of payment and submission to the Global Financial Services  Center for disbursement. However, this pilot is not yet under way due to  resistance from officials who believe that there should be a financial  management officer at every post, according to State officials in  Washington. In addition, the pilot post—Nicosia, Cyprus—lacked the  bandwidth capabilities necessary for the electronic transactions at the time  of our study, according to officials.
section_title: Funding Structures Complicate Remote Support Efforts
paragraphs: Current State bureau funding structures might limit the application of  remote services. Since regional centers are currently funded primarily by  their respective regional bureaus, it is commonly believed that it is difficult  for posts to cross bureau lines to obtain regional services, according to  officials from the regional bureaus in Washington. This makes it difficult,  for example, for the Florida Regional Center to provide services to a post  not covered by the Bureau of Western Hemisphere Affairs. Another  example is the Bureau of African Affairs’ employment of staff in Paris to  provide financial support to posts in Africa. The bureau believes these  employees are ideally suited for this work because of their financial  management expertise, their French-speaking skills that are necessary to  serve many African posts, and their access to transportation links to Africa.  We asked if these staff could also serve some North African posts, which  are even closer geographically to Paris and where French is also widely  spoken. But we were told that this is not currently possible, largely because  the posts in North Africa are not within the Africa Bureau, and funding  structures to cross regional bureaus have not yet been established. State’s  IG recently pointed out that a Departmentwide plan clarifying the  resources and funding structures for regional centers would add needed  coherence to State’s rightsizing efforts.
Several examples demonstrate that State is trying to address the issues  involved with financing remote support. For example, the International  Cooperative Administrative Support Services (ICASS) Executive Board  approved a proposal to initiate the charging of customer agencies for  regional services and to enable posts to utilize regional center services  outside their regional bureau. Furthermore, remote services are already  beginning to cross regional boundaries. For example, the Florida Regional  Center recently added to its portfolio Hamilton, Bermuda, a post that  belongs to the Bureau of European and Eurasian Affairs, because the  Florida center is geographically closer to Hamilton than is the Regional  Support Center in Frankfurt. This arrangement currently entails the Bureau  of European and Eurasian Affairs paying for the travel of the regional  manager to post.
section_title: Reluctance to Change Hampers Remote Support Efforts
paragraphs: State officials pointed out that management officials at overseas posts  might be reluctant to accept support remotely rather than having an  American at post to provide the support. For example, officials at the  Florida Regional Center have made two proposals to expand the center’s  support in financial management and human resources and have identified  posts, with similar characteristics to those currently receiving support (see  table 2), that would benefit from remote support. One proposal, which calls  for the empowerment of locally employed staff, backed by oversight from a  regional manager at the Florida center to certify vouchers, would free up  the need for a full-time American financial management officer at post.
However, officials in Washington and at some posts we visited overseas  told us that most posts are reluctant or unwilling to give up their American  management officers because they prefer to have direct access to them.  Officials told us that post receptivity to such remote support proposals  depends on management’s willingness to relinquish some of its current  positions, as well as the assurance from the regional bureaus in  Washington, D.C., that the regional service centers would have the  resources to provide additional support. For example, Haiti was recently  identified as a post that could utilize financial management support from  the Florida center but, according to officials from the Bureau of Western  Hemisphere Affairs, senior management at the post would not relinquish  the American staff position.
In addition, State reports resistance to change from a number of its  bureaus. For example, officials from the Bureau of Resource Management  (as well as some officials overseas) believe that having fewer management  staff at posts overseas could increase internal control vulnerabilities and  that there should be an American financial management officer at all  overseas posts. Additionally, in its technical comments on this draft, the  Office of Global Support Services and Innovation said that, while  developing the pilot programs to remove nonlocation-specific functions  from critical danger posts, such as Haiti, the regional bureaus were  reluctant to impose this experiment on posts already under such stress.  This reluctance, along with State’s desire to expand remote support to the  largest possible number of posts, has led State to consider all posts, not just  critical danger posts, for implementation of such pilot programs, according  to the office.
section_title: Providing Support Remotely Offers Potential Advantages, but Cost Analyses and Performance Measures Are Needed
paragraphs: According to State officials, there are several potential advantages to  providing administrative support to posts from remote locations rather  than at individual posts, including potential cost savings, enhanced security  for American personnel, and improved quality of administrative support.  However, at the time of our review, State had not conducted analyses of the  cost advantages associated with providing administrative support remotely  rather than at posts and had no systematic performance measures and  feedback mechanisms in place to assess the quality of support provided.
subsections: section_title: Support Provided from Remote Locations Could Offer Advantages in Mission, Cost, and Security
paragraphs: We have identified several examples to demonstrate the potential  advantages, in terms of financial benefits, enhanced security for American  personnel, and improved quality of administrative support, of posts  receiving support remotely. The first example demonstrates the advantages  of providing remote support from a regional service center located in the  United States. The second example depicts the advantages associated with  providing support from a regional service center located overseas. Finally,  the third example illustrates the advantages associated with locally  employed staff providing remote support to posts. There are also several  issues of concern relating to remote support, namely the quality of services,  though these issues require further analysis.
subsections: section_title: Providing Support from the United States
paragraphs: According to officials at the Florida center, assigning certain duties to  regional officers based in the United States is one way to save money while  retaining the expertise of a foreign service officer. Officials told us there  are cost savings associated with having one regional officer perform the  duties of several officers who would otherwise be assigned to posts.  Officials told us that eliminating the need for American officers overseas  could result in cost savings after factoring in offsetting costs, such as costs  for travel and technology enhancements, to accommodate the change. For  example, each overseas position costs approximately $400,000, according  to an average computed by State’s Bureau of Resource Management for  fiscal year 2007. This amount includes salary, benefits, and support costs  plus a number of costs that apply only to officials overseas, such as housing  allowances; educational allowances for their children; and additional pay,  such as danger pay, depending on which region of the world the officer is  located. It also includes costs for providing a secure building for the  officers to work in overseas. By assigning regional officers in the United  States, State could avoid such costs, which do not apply to personnel  stationed domestically. Although officials have not conducted a formal cost  comparison to assess the size of the potential savings, they believe the  potential savings could be in the millions of dollars.
For example, in 2002, the U.S. Embassy in Nassau, Bahamas, requested a  full-time American financial management officer at post to handle its  financial management workload, according to the post management  officer. To avoid the additional costs associated with posting a financial  management officer in Nassau, officials from the Bureau of Western  Hemisphere Affairs said the bureau instead assigned a regional officer from  the Florida Regional Center to assist the Nassau post management officer  who handles a variety of financial management responsibilities, such as  certifying vouchers. The total cost for the Florida-based regional officer  would be his salary and benefits plus travel costs of about $60,000,  according to the center’s officials, which includes travel to Nassau and  three other posts also served by that officer.
In addition to cost efficiencies, officials said the Florida Regional Center’s  model of support would enhance security, while the quality of support  would not suffer from the change. Officials told us that U.S. officials, in  general, are much safer living and working in the United State than at  overseas posts. In addition, staff at both posts we visited said that the  support the posts received from the Florida Regional Center was generally  satisfactory and meeting post needs. One management officer said that the  regional managers were highly experienced and competent in their  functional areas, which led to a high level of quality support.
Officials at the Florida Regional Center added that, in cases where a  regional center is located within the United States, civil servants or retired  employees could also be used as a cost-effective way of providing remote  support, when feasible. Another potential advantage of assigning civil  service or retired employees to provide remote support would be  continuity, as they would not be required to transfer every 2 to 3 years as  foreign service officers do.
section_title: Providing Support from an Overseas Regional Center
paragraphs: According to officials in Washington and overseas, potential advantages  also could arise from providing support remotely from a regional service  center overseas. For example, approximately 20 posts in Europe and  Eurasia have requests in their Mission Performance Plans for an  American financial management officer at post, according to the Deputy  Assistant Secretary for Global Financial Services. To eventually avoid  assigning such new staff to posts overseas, State is piloting a project to  determine whether it can remotely certify vouchers in Frankfurt by using  scanned rather than original documents. Center officials said that there  would be a savings in cost and space and gains in security at those posts  where this concept of remote certification removes the need for an  American financial management officer position overseas. For example,  while some posts in Europe and Eurasia do not have facilities that meet  security standards, the Regional Support Center in Frankfurt is located in a  safe facility that meets security standards, including 100-foot setback  between office facilities and uncontrolled areas, and controlled access at  the perimeter of the compound. Also, officials said that posts could receive  highly skilled and experienced financial oversight from the center. Officials  acknowledged that it is costly to operate from the Frankfurt facility  because of local wage rates and the cost of living allowance for U.S. staff.  However, they believe that high operating costs would likely be outweighed  by a combination of factors, including the potential efficiencies achieved at  posts served by the regional facility and the eventual reduction in staff  needed at posts overseas due to the remote support offered from  Frankfurt. However, center officials said they had not performed cost  analyses to demonstrate if servicing posts from Frankfurt was cost  effective, and they agree that such analysis would be useful.
section_title: Providing Support Using Non- American Staff Rather than Americans
paragraphs: State officials told us that using non-American staff to provide remote  support offers several advantages. For example, State uses these staff in  the Foreign Service National Executive Corps and Paris Rovers Programs.
The Foreign Service National Executive Corps, one method of providing  remote support, is used by the Bureau of European and Eurasian Affairs  to leverage in-house resources to benefit smaller missions throughout  the world, according to officials at the Frankfurt center. Corps members  are locally employed staff, from a variety of posts throughout the  various regional bureaus, who are highly experienced in various  administrative functions and can assist, train, and mentor staff at posts  in areas such as facilities maintenance, financial management, general  services (such as procurement), human resources, and information  management. State officials told us that, by using the corps members to  provide remote support, State has avoided the assignment of additional  American officers overseas.
The Paris Rovers Program, another means of providing remote support  by using non-American staff, is cost-efficient and effective, according to  officials from the Bureau of African Affairs. The program operates with  six locally employed staff—five of whom are based in Paris—serving as  financial management experts for about 44 posts in Africa, many of  which either have first-tour financial management officers or no full- time American financial management officers. The rovers are experts in  post budget needs and cashier problems and spend much of their time  providing on-the-job training to staff at posts, as well as occasionally  filling post staffing gaps. According to bureau officials, by educating  first-tour officers in the use and management of appropriated funds and  reviewing financial management reports, the Paris rovers provide  needed financial management internal control oversight, which likely  reduces financial losses to the bureau.
In addition, bureau officials said they are committed to not sending an  American to post when there is no need to do so, due to the security risk  levels of many posts in Africa. Recently, several posts in Africa, including  Bangui in the Central African Republic, have requested American financial  management officers, according to an official from the Bureau for African  Affairs. To avoid hiring a financial management officer for Bangui, the  bureau added Embassy Bangui to the Paris Rovers Program.
Although the bureau has not determined the full potential of the program,  its initial data demonstrate that the operation is cost-effective. According  to bureau officials, the total cost of the six employee rover program in 2005  was about $934,000, including employee salaries and travel costs. The  Bureau of African Affairs prepared an estimate, at our request, of what it  would cost to provide financial services without the Paris-based rover  operation. The bureau estimated that it would have to spend over one  million dollars to fund three additional U.S. officer positions and three part- time employees, slightly more than the cost of the Paris operation. Officials  agreed that a more detailed cost analysis could demonstrate if the program  is clearly cost-effective and therefore should be expanded to cover  additional posts.
section_title: In Addition to Advantages of Remote Support, Several Concerns Exist
paragraphs: Despite overall satisfaction with regional support, management officers  and locally employed staff at the posts we visited mentioned a few issues of  concern relating to the quality of remote support, including timeliness and  the distribution of assistance. One management officer said that it once  took 4 weeks for his regional financial management officer to respond to  him on a certain issue, by which time the issue was no longer relevant.  Another management officer agreed that posts are subject to regional  officers’ availability, and when an officer is not at a post, an issue may take  too long to resolve. Officials at regional centers told us that the quality of  partnering support was not as good as the service provided by a regional  center. One management officer told us that an officer with regional  responsibilities who is located at a post will likely prioritize the home post’s  issues over the needs of other supported posts. In addition, State’s recent  IG inspections found substandard regional support at smaller posts in  Africa where partnering is used, and often recommended updating the  memorandum of understanding to delineate regional support  expectations. However, at the time of our review, State did not have  performance data for remote support. An official from the Bureau of  European and Eurasian Affairs told us that, absent performance measures  and feedback tools to ensure costumer satisfaction, accountability, and  adequate internal controls, customer service could decrease when a  service provider is located outside of the post.
In addition, an official from the Global Financial Services Center in  Charleston and other officials overseas reported concerns that fewer on- the-ground American management staff could increase internal control  vulnerabilities. For example, some officials believe that there needs to be  an American financial management officer at every overseas post to  prevent fraud, waste, and mismanagement of funds. According to GAO’s  Internal Control Management Evaluation Tool, government agencies  should formulate an approach for risk management and decide upon the  internal control activities required to mitigate risks that could impede the  efficient and effective achievement of objectives. The approach should be  modified to fit the circumstances, conditions, and risks relevant to the  situation of each agency and should also consider the type of mission being  performed and the cost/benefit aspect of a particular control item. In this  example, State would weigh the potential internal control risks of allowing  non-American staff to certify vouchers and carry out other financial  management activities against the costs of having an American at every  post to carry out such functions.
section_title: Cost Analyses and Performance Measures Are Needed
paragraphs: At the time of our review, State had not conducted analyses of the costs  associated with providing administrative support at posts versus providing  it remotely. In addition, State lacked systematic performance measures and  feedback mechanisms to assess the quality of support provided. Further,  officials whom we interviewed from several posts were not aware of the  types of remote support that could be made available to them and said they  would be more willing to use it if the cost and quality of available services  was documented.
subsections: section_title: Cost Analysis Would Be Useful in Determining Whether to Provide Support Remotely
paragraphs: At the time of our review, State had not conducted cost analyses to show  potential cost efficiencies, such as those outlined in the examples  described earlier, of providing support to overseas posts remotely. Officials  we talked to in Washington, at the regional centers, and at some posts we  visited said that cost analyses would be useful in deciding how to provide  support remotely. For example, the Deputy Director of the Florida Regional  Center told us that there had been no analysis on how much money has  been saved by serving posts from the Florida center rather than having  management officials at the posts, and he said that such a study would be  useful, not only for the Bureau of Western Hemisphere Affairs, but also for  other regional bureaus when they consider using regional centers to  provide remote support.
Cost analyses were not incorporated into State’s 2006 operational plan for  rightsizing. The plan recognizes that additional resources, such as  facilities and staff, would be needed to implement the plan. However, it  does not address any of the cost savings or efficiencies that could be  achieved by providing remote support from regional centers or the United  States and whether the savings would exceed the cost of additional  resources.
A cost analysis would include the various costs and alternatives associated  with providing remote support through regional service centers in the  United States or overseas. Such cost components would include the  various direct and other personnel and support costs associated with  providing support at a post. It would weigh these costs against costs  required to facilitate remote support, such as travel expenses; costs for  technology enhancements, such as improved bandwidth connectivity; costs  for new or expanded facilities and other related expenses to accommodate  increased staff at existing or new regional centers; costs for changes in  local staffing or staffing in the United States; and other costs.
section_title: Performance Measures and Feedback Mechanisms Needed
paragraphs: The concerns with remote support described earlier—particularly relating  to quality of services—underscore what officials indicated at both regional  centers and all four serviced posts that we visited, which is, that  performance measures and customer feedback processes would be useful  and beneficial in rating the current level of customer support and  oversight. Officials also said that performance measures and customer  feedback processes would be essential for making decisions about  expanding remote support. Officials from State’s Office of Rightsizing said  that, before agreeing to any change, posts would first want proof that  remote support provides the same level of customer service as support  provided at posts. For example, the Executive Director of the Bureau of  Near Eastern Affairs said that the bureau would be willing to use remote  support from regional centers, such as the Regional Support Center in  Frankfurt, if the cost was reasonable and the quality and reliability of  service was demonstrated to be high. He said that, to convince decision- makers about the quality of remote support, all regional centers need to  have standards of performance with metrics and data to demonstrate that  offering services regionally or centrally, rather than at individual posts,  results in adequate service and internal controls. An official from the  Bureau of European and Eurasian Affairs said one performance metric  could be the amount of time it takes for a voucher to be processed. One  post management officer suggested that a performance measure, such as a  required weekly telephone call to a serviced post by the regional officer,  would be another way support could potentially be improved from the  Florida center.
State has recognized the need for performance measures and customer  feedback mechanisms in its operational plan, but has not yet developed  them. However, during our review, one regional bureau developed a  customer service survey. Six months after our visit in June 2005, the Florida  Regional Center sent customer satisfaction surveys to the posts it provides  with regional financial management and human resources support. The  survey asked management officers at posts to note the frequency and  duration of visits by a regional officer to a post, as well as the frequency of  communication between the officer and posts, and to rate the level of  guidance and supervision provided by the officer to the local staff. At the  time of our review, the Florida center had not yet completed an analysis of  the results of the surveys; however, according to officials at the center, the  respondents had favorable views of the center’s services.
section_title: Lack of Awareness of Remote Support Opportunities Limits Their Use
paragraphs: Various initiatives to provide support remotely are occurring within the  multiple regional bureaus; however, how they are integrated and  communicated at a Statewide level is not clear. Several management staff  at the posts we visited and those we interviewed by telephone were not  fully aware of all the services they could utilize from a remote location. For  example, management officers stationed in Asia and Africa said they lack  information on what types of support could be provided remotely and how  to access that support. Some officials indicated that it would be helpful for  them to know the full extent of remote support available, and whether it  results in cost efficiencies and effective service, in order to make an  informed decision about whether to utilize it.
In addition, we found that regional centers were not always fully  communicating the types of services and support available to posts, either  within their region or across regional bureaus. The Executive Director of  the Bureau of Near Eastern Affairs said he would consider using regional  support from Frankfurt if he knew the full range of services that were  offered there, the quality of customer service, and the potential costs of  services. State officials at the Regional Support Center in Frankfurt agreed  that while they do talk to post officials, particularly at management  conferences, about the regional services that Frankfurt offers, they could  do a more comprehensive job of documenting and marketing the full range  of services and expertise provided by regional support center.
State officials in Washington and overseas told us that communication is  the key to ensuring that efforts to expand remote support are maximized,  and that a dialogue has recently begun. In particular, the Office of Global  Support Services and Innovation and the Office of Rightsizing have set up a  Regional Initiatives Council to discuss ongoing efforts to provide remote  support in each regional bureau. According to State officials, recent  discussions at such meetings have centered on whether or not to set up  consolidated administrative service centers, called Centers of Excellence,  within the regional bureaus to provide certain management-related  functions, such as human resources or travel administration, for posts  around the world. For example, a dialogue already has begun regarding  how to use existing resources to provide additional remote support from  Bangkok for posts in East Asia and the Pacific.
section_title: Conclusions
paragraphs: By providing administrative support remotely, State has the potential to  reduce costs and improve customer service. However, State has not  conducted cost analyses nor established systematic performance measures  and feedback mechanisms to demonstrate the full potential of providing  support remotely. Without data depicting the range of implications— relating to cost, efficiency, security, and quality of services—involved with  providing and receiving support remotely, decision-makers lack the tools to  make informed decisions about investing staff and resources at individual  posts or at regional centers overseas and in the United States.
section_title: Recommendations for Executive Action
paragraphs: As State moves forward with its plan for expanding remote support and  attempts to overcome institutional resistance to this process, it would be  useful to concurrently assess and promote the potential full advantages in  providing embassy support from remote locations, including potential cost  reductions, improved services, or enhanced security for foreign service  officers. Therefore, we recommend that the Secretary of State take the  following three actions:   Identify and analyze the various costs associated with providing support  at individual posts versus at regional service centers in the United States  or overseas;  Develop systematic performance measures and feedback mechanisms  to measure the quality and customer satisfaction of support services  provided remotely; and  Use the cost analyses and feedback on quality and customer satisfaction   inform post management of which services could be offered  remotely, the various costs involved, and the quality of services  offered;  consider ways to improve the quality of remote support, when   determine whether additional posts, including posts that are  requesting new U.S. officer positions in management functions,  might be logical candidates for receiving remote support.
We also encourage State to continue reviewing challenges to providing  support remotely and finding ways to overcome them.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of State for comment.  State’s comments, along with our responses to them, can be found in  appendix II.
State generally concurred with the report’s substance and findings and  indicated that it is taking steps to implement all of our recommendations.  State agreed that a more systematic and rigorous costing model would be  beneficial in determining whether or not providing support from regional  centers is cost-effective. State also agreed that systematic performance  measures and feedback mechanisms are needed to measure the quality of  and satisfaction with remote support, and State plans to strengthen its  efforts in this area as part of its plans for providing support remotely. State  added that the Office of Rightsizing would coordinate the development of a  customer-focused service standard for regional centers. Lastly, State said  that it plans to use more consistent and accurate data in making decisions  to improve its remote support services.
The department also provided a number of technical comments, which  have been incorporated throughout the report, where appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  date of this letter. At that time, we will send copies of this report to other  interested Members of Congress, the Library of Congress, and the  Secretary of State. We will also make copies available to others upon  request. In addition, this report will be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Jess Ford at (202) 512-4268. Other GAO contacts and staff  acknowledgments are listed in appendix III.
section_title: Scope and Methodology
paragraphs: To describe the Department of State’s (State) progress in providing  administrative support from remote locations, we reviewed documents  from the Office of Rightsizing and the Office of Global Support Services  and Innovation, including its operational plan for rightsizing and  regionalization. We spoke with officials at State’s various regional and  functional bureaus in Washington, D.C., to discuss the efforts each bureau  has taken to provide administrative support to overseas posts, whether  from regional service centers overseas, from the United States, or from  other posts through partnering. To assess regional support provided from  the United States to overseas posts, we met with senior management and  regional staff at the Florida Regional Center in Fort Lauderdale, Florida,  and the Global Financial Services Center in Charleston, South Carolina. We  also met with senior management, regional staff, and locally employed staff  at the overseas Regional Support Center in Frankfurt, Germany, to review  remote support provided from an overseas regional service center. We  focused our efforts on evaluating the various ways in which financial and  personnel support are provided by the various regional bureaus. We did not  perform an evaluative audit of the regional support provided by functional  bureaus, consular affairs, or the Model for Overseas Management initiative  because those operations either have been recently inspected by the Office  of the Inspector General or did not fit into the scope of our work.
To assess some of the regulatory challenges that State faces in expanding  regional support, we reviewed foreign affairs regulations for carrying out  administrative functions overseas. This included a review of regulations on  what functions locally employed staff can carry out in the areas of  procurement and payments. We also reviewed the regulations pertaining to  the use of original documentation in processing payments and State’s  proposal to waive that regulation.
To identify the potential advantages of providing support remotely, we met  with ambassadors, deputy chiefs of mission, management officers, and  other U.S. embassy staff, including locally employed staff at various posts  that receive remote support from either the Florida Regional Center or the  Frankfurt Regional Support Center. We chose Belize City, Belize, because it  is a small post supported by the Florida center and Nassau, Bahamas,  because it is the largest post supported by the center, pertaining to the  number of staff and size of budget, according to an official at the Florida  center. We chose Valetta, Malta, because it is a small post support by the  Frankfurt center, and it recently conducted a rightsizing review, which  addressed remote support issues. We chose Helsinki, Finland, because it  represents a medium-sized post supported by the Frankfurt center and  because it was originally the post chosen for the pilot project to certify  vouchers remotely, according to officials in the Bureau of European and  Eurasian Affairs. We also visited Mexico City to talk to embassy officials  about how the U.S. mission to Mexico has been rightsized and how the  embassy provides support to consulates throughout the country. Lastly, in  order to explore the advantages of using locally employed staff in providing  remote support, we met with officials in Paris, France, to discuss the  financial support that locally employed staff provides to posts in Africa.  Because our interviews were limited to only a few posts that received  regional support, we did not generalize the results of our interviews to the  universe of posts receiving regional support. We reviewed the post profiles  of the four posts we visited to demonstrate the staffing and other  characteristics of posts currently using regional support and verified the  data with the post management officers.
We also reviewed cost data from the Bureau of Resource Management and  the various regional bureaus to estimate the average cost of placing one  foreign service officer at an overseas post, including personnel and support  costs, and costs that apply only to officers located overseas. For reporting  purposes, we rounded the bureau’s estimate of $393,000 to $400,000 for the  cost of an American officer overseas. We conducted (1) a data reliability  assessment of the data using sample cost data from the posts we visited;  (2) interviews with officials from the regional bureaus and the Bureau of  Resource Management; and (3) discussions with the Office of Rightsizing at  State and the Office of Management and Budget, and we determined the  data to be sufficiently reliable for the purposes of this engagement.
In addition, we developed a structured interview instrument and conducted  telephone interviews with management staff at overseas posts that have  recently conducted a rightsizing report, which is required by Congress. We  administered structured interviews between February and March 2006 by  telephone. We primarily spoke with management counselors or  management officers at overseas posts. In one case, we spoke with a  deputy chief of mission at the post. We conducted interviews with 20 of 22  posts that were tasked to complete the rightsizing review in the fall 2005  cycle: Asuncion, Baku, Bandar Seri Begawan, Bucharest, Bujumbura,  Colombo, Harare, Jakarta, Karachi, Kiev, Krakow, Maputo, N’djamena,  Pretoria, Reykjavik, Rome, Santo Domingo, St. Petersburg, Taipei, and  Tunis.
The structured interview contained open- and closed-ended questions  about guidance, timing, the review process, rightsizing considerations,  headquarters’ involvement and feedback, and the impact of the review on  the post. The interview instrument included questions regarding whether  or not post management staff were both aware of and using regional  support services. We developed the interview questions based on our  review of rightsizing documentation and discussions with post officials  during field work in Mexico City and Valletta. We provided an early version  of the questions to State’s Office of Rightsizing and Office of Global  Support Services and Innovation for their review and comment, and we  also pretested the interview with three current management officers to  ensure that the questions were clear and could be answered. We modified  the interview questions on the basis of the pretest results and an internal  expert technical review. We provided the management officers and deputy  chief of mission with the interview questions in advance to allow them time  to gather any data or information necessary for the interview. We also  conducted follow-up discussions with posts as needed. The responses of  the structured interviews are not intended to be representative of all posts.
We performed our work from June 2005 until April 2006 in accordance with  generally accepted government auditing standards.
section_title: Comments from the Department of State
paragraphs: The following are GAO’s comments on the Department of State’s letter  dated April 13, 2006.
subsections: section_title: GAO Comments
paragraphs: 1. We are conducting a separate review of the consolidation of State and  USAID support activities at overseas posts. We plan to issue a report on  our findings later in 2006. 2. We recognized the efforts of the Florida Regional Center to measure  customer service satisfaction with a survey and state this in our final  report. We also acknowledged that State has recognized the need for  performance measures and customer feedback mechanisms in its  operational plan but has not yet developed them. We encourage State to  develop performance measures and customer feedback mechanisms in  its operational plan for all posts providing and receiving remote  support, and not only for selected posts, such as those that receive  support from the Florida Regional Center. We encourage State to use  tools such as the ICASS Service Center annual survey to compare local  support with remote support and identify areas where remote support  could be improved.   3. We agree that the support the embassy in Mexico City provides to nine  consulates throughout Mexico is a good example of providing support  remotely, and we added this example in our final report.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the person named above, Joseph Carney, Lyric Clark, Martin  De Alteriis, Ernie Jackson, Andrea Miller, Deborah Owolabi, José M. Peña  III, and Michelle Richman made key contributions to this report.