Overseas Rightsizing: State Has Improved the Consistency of Its Approach, but Does Not Follow Up on Its Recommendations
Published: 2012-07-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: After the 1998 bombings of two U.S. embassies, a U.S. government panel determined that staffing levels had not been adjusted to reflect changing missions, requirements, and security concerns. In 2004, Congress mandated the establishment of the Office of Rightsizing within the Department of State. The office reviews levels of overseas staffing for all U.S. government agencies at every post every 5 years, projects future staffing levels it determines are appropriate to meet mission needs, and recommends ways to improve efficiency. Rightsizing is intended to align the number and location of staff with foreign policy priorities, security, and other constraints.
GAO examined (1) the consistency of States approach to conducting rightsizing reviews and how its projections compare to actual staffing levels; (2) the focus of States rightsizing recommendations; and (3) the extent to which State uses its rightsizing reviews and monitors implementation of recommendations. GAO reviewed 181 rightsizing reviews, compared projections in reviews with current actual staffing data, and interviewed officials from State and other agencies in Washington, D.C., and at overseas posts.
section_title: What GAO Found
paragraphs: The Department of State (State) has improved the consistency of its rightsizing approach across overseas posts. However, differences between future staffing levels it projects are appropriate to meet mission needs and actual staffing levels still exist due to unanticipated events and other factors. GAO reported in 2006 that States Office of Management Policy, Rightsizing and Innovation (M/PRI) had not been conducting its rightsizing reviews consistently. Some reviews discussed various rightsizing elements, such as outsourcing, while others did not. State has since improved the consistency of its reviews by developing a variety of methodological tools and a standard template which it applies to each post. GAO found that over half of the 144 rightsizing projections analyzed were within 10 percent of actual staffing levels as of December 2011. In contrast, over 40 percent of the posts have staffing level differences of over 10 percent. Unanticipated events and other factors, such as changes in policies, contributed to these differences. For example, according to the management officer in Mozambique, M/PRI projected staffing increases as a result of the Presidents program to combat AIDS, but the actual funding level for the program was much higher than anticipated. This resulted in higher actual staffing levels for both U.S. direct-hire and locally-employed staff positions.
Rightsizing reviews contain recommendations to improve post operations and eliminate duplicative services and positions. To develop its recommendations, M/PRI reviews the levels of all staff at posts and seeks input from State and non-State agencies. M/PRI relies on non-State agencies to determine independently their own staffing needs. Many of States recommendations for a specific post focus on the level of States administrative or management staff, rather than States programmatic staff or staff from other agencies. Some State officials stated that the activities of administrative and management staff are better suited to quantitative measurement while the qualitative nature of programmatic staff activities, such as discussing policy issues with foreign diplomatic counterparts, is more difficult to measure.
States use of rightsizing reviews varies, and State does not follow up on review recommendations. States Bureau of Overseas Buildings Operations uses the staffing projections in rightsizing reviews to plan the size of new embassy compounds. Further, M/PRI uses rightsizing reviews when it assesses requests by State or other agencies to add staff to overseas posts, although the final decision is made by the respective Chief of Mission. In addition, Bureau of Diplomatic Security officials said that they incorporate rightsizing reviews into their annual staffing planning exercise, and some post officials said that they refer to rightsizing reviews to support staffing changes. Some U.S. officials stated that undertaking the rightsizing process acts as a check on growth in overseas staffing levels. However, some State regional bureau officials said that they do not actively use the reviews except as a historical overview of staffing, and some post officials said that they do not use the reviews at all. State often uses documents other than rightsizing reviews for decisions in areas including staffing levels. Finally, State does not monitor the implementation of rightsizing review recommendations and has not designated an office with responsibility for their implementation. State issues an annual report to Congress in which it lists the rightsizing reviews it has completed, number of positions recommended for elimination, and potential cost savings; the report does not address whether recommendations have been implemented. Because State does not track or report on the implementation of recommendations, State cannot determine if rightsizing reviews are achieving their purpose of aligning overseas staffing levels with U.S. priorities.
section_title: What GAO Recommends
paragraphs: GAO recommends that the Secretary of State designate the appropriate entities to ensure that rightsizing recommendations are addressed and to track and report the actions taken to implement the recommendations. State described a number of actions it intends to take that could address GAOs recommendations.

section_title: Letter
paragraphs: After the 1998 terrorist bombings of U.S. embassies in Dar es Salaam,  Tanzania, and Nairobi, Kenya, a U.S. government panel convened to  conduct an assessment of overseas presence determined that the  staffing levels at embassies and consulates worldwide had not been  adjusted to reflect changing missions, requirements, and security  concerns. In 2004, Congress mandated the establishment of the Office of  Rightsizing within the Department of State (State). This office, now part  of the Office of Management Policy, Rightsizing and Innovation (M/PRI),  reviews staffing levels for all U.S. government agencies at every overseas  mission once every 5 years and before undertaking all capital  construction projects. The office also projects future staffing levels that it  determines are appropriate to meet the missions’ needs and recommends  ways to improve efficiency. Since 2002, we have conducted several  reviews related to U.S. government staffing overseas. In these reviews,  we examined the rightsizing process and issues related to the  construction of new facilities overseas, among other things. In 2006, we  found that the information presented within rightsizing reviews varied from  post to post, and the rightsizing elements that the posts evaluated and  reported were not consistent.
In response to your request, we examined (1) the consistency of State’s  approach to conducting rightsizing reviews and how its projections  compare to actual staffing levels; (2) the focus of State’s rightsizing  recommendations; and (3) the extent to which State uses its rightsizing  reviews and monitors implementation of recommendations.
To address these objectives, we reviewed rightsizing guidance, related  legislation, 181 rightsizing reviews State undertook from 2005 through  2011, and previous GAO reports related to U.S. government staffing  levels overseas. We reviewed 14 rightsizing reviews in greater depth, to  obtain additional information about the rightsizing process, the differences  between projected and actual staffing levels, and post officials’ use of the  reviews. We conducted site visits at 3 of the posts: Prague, the Czech  Republic; Sarajevo, Bosnia-Herzegovina; and Kuwait City, Kuwait. We  communicated via teleconference and other means with the additional  posts. To compare projected staffing levels in rightsizing reviews with  actual staffing levels as of December 2011, we compared staffing data  from State’s personnel database as of December 2011 with the staffing  projections of 144 rightsizing reviews State conducted from 2006 through  2011. We did not include all of the rightsizing reviews in the comparison  between the actual and projected staffing levels for various  methodological reasons, such as data reliability concerns and review time  frames that were outside the scope of our analysis. To assess the  reasons for the differences between the projection and the actual staffing  levels, we constructed a composite index for each country taking into  account the differences in staffing levels for various personnel categories.  We then sent questions to the management officers in 10 countries with  the highest indices: 5 for reviews that had projected staff levels that were  higher than actual levels and 5 for those that had projected levels that  were lower than actual levels. In addition, we discussed rightsizing with  State officials in Washington, D.C., from M/PRI, State’s regional bureaus,  the Bureau of Overseas Buildings Operations (OBO), the Bureau of  Diplomatic Security, and the Bureau of Consular Affairs. We also  discussed rightsizing with officials from non-State agencies based in  Washington, D.C. or overseas, including the Departments of Defense  (DOD); Commerce; Health and Human Services; Homeland Security; and  Justice; and the U.S. Agency for International Development (USAID).  Appendix I provides more information on our scope and methodology.
We conducted this performance audit from July 2011 to July 2012 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The U.S. government maintains more than 270 diplomatic posts,  including embassies, consulates, and other diplomatic offices, in about  180 countries worldwide. More than 80,000 U.S. government employees  work overseas, including both U.S. direct hires and locally-employed staff  under chief of mission authority, representing more than 30 agencies  and government entities. Agencies represented overseas include the  Departments of Agriculture, Commerce, Defense, Homeland Security,  Justice, State, the Treasury, and USAID.
In the aftermath of the August 1998 bombings of two U.S. embassies in  Africa, State formed the Overseas Presence Advisory Panel to conduct  an assessment of overseas presence. The panel determined that  overseas staffing levels had not been adjusted to reflect changing  missions, requirements, and security concerns. Some missions were  overstaffed, while others were understaffed. In 2002, we outlined a   In 2003, we found that  framework for assessing overseas staff levels. U.S. agencies’ staffing projections for new embassy compounds were  developed without a systematic approach or comprehensive rightsizing  analysis.
In 2004, Congress mandated the establishment of the Office of  Rightsizing within State. The Office of Rightsizing was combined with two  other offices in 2007 to create M/PRI. The House Foreign Affairs  Committee directed the office to lead State’s efforts to develop internal  and interagency mechanisms to coordinate, rationalize, and manage the  deployment of U.S. government staff overseas. This legislation was  intended to result in the reallocation of resources to achieve a leaner,  streamlined, more agile and secure U.S. government presence abroad.  The conference report accompanying the legislation establishing the  Office of Rightsizing stated that a proper rightsizing plan should include a  systematic analysis to bring about a reconfiguration of overseas staffing  to the number necessary to achieve U.S. foreign policy needs, and noted  that rationalizing staffing and operations abroad had the potential for  significant budgetary savings. The office was directed by the Senate  Foreign Relations Committee to review all U.S. government staffing  overseas, including all American and foreign national personnel, in all  employment categories. The House Foreign Affairs Committee also  directed OBO to work closely with M/PRI to ensure that projected staffing  levels for new embassy compounds were prepared in a disciplined and  realistic manner, and that these estimates become a basis for  determining the size, configuration, and budget of new embassy  construction projects.
M/PRI conducts rightsizing reviews before each construction project and  on each mission every 5 years, among other responsibilities. M/PRI  focuses on streamlining staffing levels by, for example, consolidating or  outsourcing administrative functions. M/PRI also looks for opportunities to  substitute less expensive, locally-employed staff for more expensive U.S.  direct-hire employees. According to the guidance M/PRI provides to  overseas missions, a rightsizing analysis may lead to the reallocation of  resources from one mission goal to another and to enhancing operational  efficiency through regionalization and centralization. M/PRI uses GAO’s  definition of rightsizing: aligning the number and location of staff assigned  overseas with foreign policy priorities, security concerns, and other  constraints. Rightsizing may result in the addition or reduction of staff, or  a change in the mix of staff at a given embassy or consulate. M/PRI’s  guidance stresses that all sections and agencies of an overseas mission  should be included in a rightsizing analysis.
In the first step of the rightsizing process, overseas missions, generally  led by the mission’s management officer, prepare a report for M/PRI  outlining their strategic goals, current staffing data for all agencies, and  projected staffing levels 5 years into the future. State and non-State  agencies present at an overseas mission provide their staffing data to be  included in the mission’s submission to M/PRI. M/PRI officials stated that,  under their current process, an M/PRI analyst usually visits the mission to  assist in preparing the rightsizing report. After a mission completes its  rightsizing report, the relevant regional bureau approves the submission  before sending it to M/PRI. Next, M/PRI conducts its analysis of staffing at  the mission, coordinating with the headquarters of non-State agencies to  confirm the numbers provided at the mission for those agencies. When  M/PRI completes a draft rightsizing review, other State bureaus and  agencies have the opportunity to review and discuss it. According to  officials from State bureaus, they frequently engage in a dialogue with  M/PRI to negotiate the staffing projections to be published in the  rightsizing review and in a majority of cases, differences in projected  staffing numbers are resolved through these discussions. Once all  bureaus and agencies have reviewed the rightsizing review document,  M/PRI finalizes and publishes it on an internal State website. Since its  creation in 2004, State’s rightsizing office has conducted 224 reviews. According to M/PRI officials, all overseas missions have undergone the  process once, and a second round of reviews is now under way.
M/PRI provided us with 181 rightsizing reviews within the time frame of our analysis.  Since that time, M/PRI has completed additional reviews.
The staffing levels of a mission are determined by the chief of mission  through the National Security Decision Directive 38 (NSDD-38) process,  which provides authority for the chief of mission to determine the size,  composition, or mandate of personnel operating at the mission. To add or  abolish U.S. direct-hire positions at a mission, agencies electronically  submit an NSDD-38 request for the chief of mission to either approve or  deny. Requests may only include one agency in one country, but may  include requests for multiple positions. Formal submission is generally  preceded by informal discussions about the requested positions,  according to officials.
section_title: State Has Improved the Consistency of Its Approach, but Unanticipated Events and Other Factors Contribute to Differences between Actual and Projected Staff Levels
paragraphs: State has improved the consistency of its analyses across overseas  missions, but differences between actual and projected staffing levels still  exist due to unanticipated events and other factors. We reported in 2006  that the Office of Management Policy, Rightsizing, and Innovation (M/PRI)  had not been conducting its rightsizing reviews in a consistent manner.State has since improved the consistency of its reviews by developing a  variety of methodological tools and a standard template that it applies to  each mission. These tools include ratios and formulas that compare  missions similar in size and foreign policy priority to help M/PRI project  what the office determines is the appropriate level of staffing at each  mission. We found that although actual staffing levels as of December  2011 were within 10 percent of projected staffing levels in over half of the  reviews we analyzed, over 40 percent of the missions have staffing level  differences over 10 percent. Unanticipated events and other factors, such  as changes in policies and priorities, contributed to the differences  between actual and projected staffing levels.
subsections: section_title: State Has Improved the Consistency of Its Rightsizing Reviews Since 2006
paragraphs: With its current approach to rightsizing, State has improved the  consistency of its analysis across overseas missions. In 2006, we  reported that the information presented in rightsizing reviews varied from  mission to mission and the rightsizing elements that missions evaluated  and reported were not consistent. Some missions provided narratives  discussing various rightsizing elements, such as outsourcing and post  security, while others did not. The reviews ranged in length from less than  5 pages to over 20 pages.
According to current M/PRI officials, the methodology used in the  rightsizing process has evolved since the office was created. M/PRI  officials stated that their reviews are now more standardized than in the  past. The reviews now contain the same types of information in a similar  format and have a more uniform level of detail. The required elements of  a rightsizing review include detailed analysis of current and projected staff  for each section of an overseas mission, as shown in table 1. M/PRI has  also refined its methodology for analyzing administrative, management,  and program staff. M/PRI has developed uniform guidance for staff at  overseas missions to use in preparing rightsizing submissions. The  majority of State officials at posts we visited that had participated in a  rightsizing review said that the M/PRI guidance was helpful for the post in  completing its submission.
M/PRI has developed standard methodological tools to examine overseas  staffing on a mission-by-mission basis. These tools are ratios and  formulas that compare missions considered similar in size, foreign policy  priority, and management and administrative requirements, and help  M/PRI to determine what it believes to be appropriate staffing levels in  each section of an overseas post. The total management ratio, for  example, is the number of customer units divided by the number of U.S.  direct-hire management positions. Further, the level of program staff is  analyzed using two tools—the Four Factor Index and diplomatic density.  The Four Factor Index is an attempt to measure a country’s theoretical  foreign policy importance to the United States using a combination of  factors such as population, gross domestic product, trade volume with the  United States, and U.S. foreign assistance. Diplomatic density is an effort  to quantify the size of the U.S. diplomatic presence in a country with  respect to U.S. interests in that particular country. It is calculated by  dividing the number of diplomatic direct-hire positions present in a given  country by the Four Factor Index. According to M/PRI officials, diplomatic  density tends to be relatively low in developed countries with which the  United States has close relations, such as Canada, Japan, and Germany,  or where our interests are limited or primarily humanitarian. Diplomatic  density may be higher where the United States has or has recently had  difficult relations or where vital security interests are at stake, such as in  Russia and many of the countries in the Middle East.
Many post officials we spoke with considered M/PRI’s standardized  analysis appropriate but emphasized the need for flexibility to account for  varying circumstances at each post. Some officials noted that M/PRI’s  comparative analysis among posts was particularly helpful in providing  context for staffing decisions. For example, one management officer  stated that the rightsizing review found that locally-employed staff at post  had heavier workloads than their counterparts at similar posts. The post  used this analysis as justification for requesting more locally-employed  staff positions.
According to non-State officials, M/PRI generally coordinates with other  agencies in preparing rightsizing reviews of U.S. government staffing  overseas. In 2006, we reported that coordination with other agencies in  the rightsizing process was initially limited. Non-State agencies had  voiced a number of concerns regarding their interaction with the Office of  Rightsizing, including their desire for greater participation in the rightsizing  process. We recommended that the Office of Rightsizing increase its  outreach activities with non-State agencies so that all relevant agencies  with an overseas presence could discuss rightsizing initiatives on a  regular and continuous basis. During our current review, non-State  officials stated that M/PRI’s current coordination efforts had improved.
section_title: Over Half of Staffing Projections Were within 10 Percent of Actual Staffing Levels as of December 2011, but Some Posts Have Larger Differences
paragraphs: For more than half of the 144 staffing projections based on rightsizing  reviews that we analyzed, actual staffing levels as of December 2011  were within 10 percent of review staffing projections, either higher or  lower. However, over 40 percent of the projections based on the  reviews had differences of greater than 10 percent. About 30 percent of  these had more staff than projected and 13 percent had fewer (see fig. 1).  In a few cases, the actual staffing levels as of December 2011 were much  higher or lower than the projected levels. For example, the actual number  of U.S. direct-hire desk positions (81) in Bolivia as of 2011 was less than  half of the projected number of U.S. direct-hire desk positions (164). On  the other hand, the actual number of U.S. direct-hire desk positions in  Algeria (56) was nearly 20 percent higher than the projected level (45).  See appendix I for more information about our methodology.
Numerous factors contribute to differences between projected and current  staffing levels, such as unanticipated U.S. and foreign government policy  changes. Officials from ten missions we identified as having the largest  differences between December 2011 staffing levels and the rightsizing  projected staffing levels, either higher or lower, identified such factors.  Table 2 shows the percentage differences between December 2011  actual staffing levels and projected total staffing levels based on the  rightsizing reviews for these missions.
Unanticipated changes in U.S. government policies and priorities  contribute to differences between actual and projected staffing levels at  overseas posts. Programs such as the President’s Emergency Plan for  AIDS Relief (PEPFAR) and USAID and State hiring initiatives, including   have added additional staff to overseas posts, while  Diplomacy 3.0,other changes in U.S. foreign policy have led to lower-than-projected  staffing levels.
According to the management officer in Mozambique, the increase in  the number of U.S. direct-hire and locally-employed staff positions as  a result of PEPFAR’s initiation was greater than anticipated.
The introduction of the Visa Waiver Program for Korea reduced the  need for consular officers to conduct visa interviews and led to lower- than-projected staffing levels, according to the management officer in  Korea.
Ghana became a USAID priority country and the beneficiary of the  Global Health Initiative, Feed the Future, and Partnership for Growth,  which led to increased staffing levels, according to the management  officer in Ghana.
USAID’s and State’s hiring initiatives added a human resource officer,  a political officer, and a general service officer, positions not  anticipated at the time of the rightsizing review, according to the  management officer in Mozambique.
According to the management officer in Pakistan, increased funding to  address development and security projects has led to higher staffing  levels than the rightsizing review projected.
The closure of an Arabic language school for State employees in  Tunisia resulted in staffing levels below rightsizing projections,  according to the management officer.
Unanticipated changes in foreign government priorities and political  environment can contribute to differences between actual and projected  staffing levels. A foreign government’s decision to eliminate program  funding or request the closure of a U.S. program usually leads to lower  staffing levels, as in the following examples.
According to the Deputy Chief of Mission in Kuwait, the decrease in  Kuwaiti government funding for the Office of Military Cooperation- Kuwait caused the post to reduce staffing levels beginning in 2009.  In 2008, the Bolivian government ordered the U.S. Drug Enforcement  Agency to leave Bolivia, leading to an unexpected reduction in staff,  according to the management officer in Bolivia.
According to the management officer in Libya, staff levels decreased  after the evacuation and destruction of the U.S. embassy in February  2011.
Additionally, some posts reported that they were unable to carry out the  relatively large reductions in staffing levels projected in the rightsizing  reviews, usually for locally-employed staff positions. M/PRI projected  sizeable reductions in locally-employed staffing levels for posts through  outsourcing or contracting. However, some posts reported that a lack of  viable service options in the local economy made it unfeasible to  outsource or contract services. For example,  In Mozambique, outsourcing services such as the motor pool,  customs shipping, travel services, and warehousing are not feasible  due to the country’s poor infrastructure, according to a management  officer in the country.  In Bangladesh, according to a management officer in the country, the  post does not contract custodial services, warehouse services, or car  repair as recommended by the rightsizing review because no local  contracting options exist.  In Burkina Faso, the embassy did not contract guard services  because no major contractors exist in the capital, Ouagadougou, and  local companies cannot provide the level of quality and service  required by the post, according to the embassy’s management officer.
section_title: Rightsizing Recommendations Focus on State Administrative and Management Staff, and State Relies on Non-State Agencies to Determine Their Own Staffing Needs
paragraphs: Rightsizing recommendations often focus on administrative or  management positions, where efficiencies are considered likely to be  achieved. M/PRI typically does not make recommendations to non-State  agencies and generally relies on non-State agencies, as well as certain  State bureaus, to determine their own staffing needs.
subsections: section_title: State’s Recommendations Generally Focus on State Administrative and Management Staff at a Specific Post to Improve Efficiency
paragraphs: Rightsizing reviews contain recommendations to improve post operations  and eliminate duplicative services and positions; these  recommendations often focus on State’s administrative and management  staff. To develop its recommendations, M/PRI reviews the levels of all  staff at missions and seeks input from both State and non-State agencies.  Many of M/PRI’s recommendations that we analyzed focused on State  administrative and management staff rather than programmatic staff or  staff from other agencies. Officials stated that administrative and  management functions are where greater efficiencies are considered  likely to be achieved. M/PRI recommendations may include outsourcing  or regionalization of administrative functions such as voucher processing  or warehousing. These changes affect administrative staff responsible for  those functions, at times addressing dozens of positions filled by locally-  employed staff. In Albania, for example, the rightsizing review  recommended a reduction of over half of the locally-employed staff non- desk positions, from 216 to 93, mainly through outsourcing of guard  services. In Bangladesh, the rightsizing review recommended eliminating  27 locally-employed non-desk staff positions out of a total of 192 to  improve the efficiency of administrative functions, such as building,  gardening, and custodial services. The review found that the number of  square meters maintained per service provider for both residential and  non-residential buildings in Bangladesh was lower than the worldwide  median. For example, the review found that the area a service provider  maintained in Bangladesh was less than half that in other posts for non- residential buildings and thus deemed the service to be inefficient. It  recommended eliminating a sufficient number of positions to bring the  ratio of square meters per service provider on par with other posts.
According to State officials, the focus on management services is  appropriate because that is where duplication of effort is most likely to  occur. State officials said that it is easier to apply M/PRI’s quantitative  tools to administrative and management staff activities than to  programmatic activities. According to State officials, administrative or  management work is better suited to measurements that can be  compared across posts. For example, voucher examiners can record the  volume of vouchers handled in a given time and the length of time they  take to process. M/PRI has developed tools to assess the level of  administrative support needed at posts of different sizes and has used  those tools to compare posts of similar size. By comparing the efficiency  of administrative services across similar posts, M/PRI has developed  targets that posts should meet and uses these targets to identify posts  that may be under- or overstaffed in administrative functions. For  example, the rightsizing review for Paraguay recommended that the  embassy cut one U.S. direct-hire position in administrative services  support, a general services officer. This recommendation was based on  comparing the workload of Paraguay’s service providers with workloads  of service providers at similar posts—Uruguay, Croatia, and Cyprus.  Rightsizing reviews also evaluate whether posts can utilize locally-  employed staff in a position rather than a more costly U.S. direct hire. For  example, the 2010 rightsizing review for Kenya recommended that the  post use appointment-eligible family members to serve in office  management positions instead of U.S. direct hires. According to M/PRI,  the cost of employing these appointment-eligible family members is only a  fraction of U.S. direct-hire employees and helps minimize the American  footprint in dangerous overseas environments. In addition, M/PRI  recommended that appointment-eligible family members be considered  for employment if host country nationals are unavailable or present an  unacceptable risk.
According to State officials, it is more difficult to quantify the workload of  program staff such as political officers than that of administrative and  management staff. M/PRI has developed methodological tools to  measure a post’s diplomatic density and foreign policy priority for  comparison with similar posts. However, State officials said that it is  difficult to assess the efficiency of program staff due to the qualitative  nature of their activities, such as discussing policy issues with their  diplomatic counterparts or drafting briefing documents for visiting officials.  Nevertheless, M/PRI makes recommendations regarding programmatic  staff where possible. In Kuwait, for example, the 2010 rightsizing review  recommended the periodic reevaluation of the political and economic  sections to assess the possibility of combining them. In some cases,  M/PRI has made broader recommendations for posts to review levels of  staff across an entire region. For example, M/PRI recommended that the  Bureau of European and Eurasian Affairs reevaluate an appropriate  presence in former Warsaw Pact country posts, given that the political  and economic environment in these countries has shifted dramatically  during the past 2 decades.
section_title: State Does Not Often Make Recommendations Directed at Other U.S. Government Agencies and Relies on These Agencies to Determine Their Own Staffing Needs Overseas
paragraphs: M/PRI reviews all U.S. government staffing overseas and incorporates  staffing data and projections from non-State agencies with a presence  overseas. While chiefs of mission have final decision-making authority  on staffing changes at their missions, M/PRI officials stated that their  office does not have the authority to direct non-State agencies’ overseas  staffing decisions. M/PRI generally does not analyze staffing numbers of  other U.S. agencies overseas or make recommendations affecting these  staff. Instead, M/PRI officials stated that they rely on these agencies to  conduct their own rightsizing assessments and determine independently  what their staffing needs will be for each post. M/PRI infrequently makes  recommendations to other agencies, such as USAID. For example, M/PRI  recommended that USAID evaluate the distribution of its staff in Central  America, questioning the sustainability and cost-effectiveness of high  USAID staffing levels in El Salvador and suggesting that USAID’s  development resources could be better utilized elsewhere in Central  America. However, such broader recommendations are an exception in  rightsizing reviews and not a common occurrence, according to M/PRI  officials.
According to some bureau officials, non-State agencies that are relatively  new to operating overseas have been slow to acclimate to the rightsizing  process. State officials noted that non-State agency officials in  Washington might have a different view of long-range overseas staffing  needs than their agency officials at post. Several officials from different  regional bureaus said that agencies prefer to conduct their own strategic  planning and staffing exercises and view rightsizing as an activity internal  to State. Officials from several non-State agencies confirmed that they  conduct their own internal staffing analyses. For example, officials from  the Department of Homeland Security noted that they review overseas  staffing on an ongoing basis, since current events dictate the  department’s operational needs. Similarly, officials from the Centers for  Disease Control and Prevention stated that they evaluate overseas  staffing through annual updates to their strategic staffing plan and look for  opportunities to reduce U.S. direct hires by empowering locally-employed  staff to serve in senior management and leadership positions. The  Defense Intelligence Agency coordinates the DOD’s rightsizing efforts at  U.S. posts; DOD components reevaluate positions worldwide as  requirements change to ensure that staff are best positioned to achieve  the department’s mission, according to an agency official.
section_title: State Offices Vary in Their Use of Rightsizing Reviews, and State Does Not Monitor Implementation of Rightsizing Recommendations
paragraphs: State uses rightsizing reviews to plan facilities construction and for certain  staffing considerations, but some U.S. officials said that use of the  reviews is limited, and State officials do not monitor whether  recommendations are implemented. State’s Bureau of Overseas  Buildings Operations (OBO) uses the staffing projections in rightsizing  reviews to plan the size and estimate the initial costs of new embassy and  consulate compounds. Further, M/PRI uses rightsizing reviews when it  assesses requests from State or other agencies to add staff to overseas  posts, although the respective chief of mission makes the final decision  for his or her mission. However, some regional bureau officials said that  they do not actively use the reviews except as a historical overview of  staffing, and some post officials said that they do not use the reviews at  all. In addition, State often uses documents other than rightsizing reviews  to inform decisions in areas such as determining staffing levels and  regionalization. Finally, State does not monitor the implementation of  rightsizing review recommendations and has not designated an office with  that responsibility, making it difficult to know the extent to which  rightsizing reviews are having an impact.
subsections: section_title: Some State Officials Use Rightsizing Reviews to Plan Construction and for Certain Staffing Considerations
paragraphs: State uses rightsizing reviews for various purposes, according to U.S.  officials. These officials use reviews to, among other things, plan new  construction, assess requests to add staff to a post, and sometimes, in  conjunction with other information, allocate resources. In addition, some  State officials stated that rightsizing is the only comprehensive process to  verify the number of overseas positions and the personnel occupying  them.
The reviews that precede the construction of a new diplomatic compound  have the most impact, according to M/PRI’s fiscal year 2010 report to  Congress, because OBO uses the rightsizing projections to plan the size  and estimate the preliminary costs of such projects. OBO officials told us  that using rightsizing reviews to plan new construction is a significant  improvement over the process previously used, which was informal and  not systematic. Rightsizing reviews must accompany any proposal for  new construction that is sent to the Office of Management and Budget  and to Congress. While OBO bases its construction plans on M/PRI’s  rightsizing review, OBO officials stated that they also verify the staffing  numbers in the rightsizing reviews with the staffing numbers in personnel  databases and with agency and post officials. If post staffing levels  increase by more than 10 percent (the amount of growth space OBO  builds in) after a project has started, OBO asks M/PRI to do a rightsizing  revision to obtain more accurate numbers and improve construction  planning, according to OBO officials. Regional bureau officials stated  that they and post officials pay particularly close attention to rightsizing  reviews that are conducted in preparation for construction because they  want to ensure that OBO plans enough space for the new diplomatic  compounds.
Further, M/PRI and post officials stated that they use rightsizing reviews  when assessing requests by State or other agencies through the NSDD- 38 process to add staff to overseas posts, although the final decision on  requests is made by the chief of mission. An M/PRI official stated that  rightsizing reviews are intended to be used by the chief of mission to  inform decisions on staffing, including those made through the NSDD-38  process. A few post management officers told us that the rightsizing  process had prompted posts to review staffing requests more carefully.  One management officer said that the rightsizing process also prompted  a more substantial justification for NSDD-38 requests, adding  organization and structure to the decision-making process. Another  management officer said that rightsizing prompted the post to launch a  new internal mechanism to control growth. The post instituted an internal  pre-NSDD-38 vetting process requiring each office or agency to justify the  need for a requested position via internal memorandum and explain how  it would be funded and address other logistical needs (such as available  office space).
In addition, some officials from State bureaus and posts told us that they  use rightsizing reviews in a variety of other ways. Bureau of Diplomatic  Security officials said that they use rightsizing reviews in conjunction with  Office of Inspector General (OIG) reports, annual Mission Strategic   and other information to make resource  Resource Plans (MSRP),allocation decisions in their annual staffing planning exercise. In addition,  an official in Kuwait said that she read the rightsizing review when she  arrived at post because it gave a more concise summary of conditions at  post than other documents, such as the MSRP. Further, a regional  bureau official stated that the primary value of rightsizing was that it  forces missions to systematically collect information and plan for future  staffing. Several officials stated that undertaking the rightsizing process  acts as a check on growth in overseas staffing levels. For example,  M/PRI’s fiscal year 2011 report to Congress states that M/PRI projected  42 fewer U.S. direct-hire positions than missions had projected.
Some post officials, particularly those in management functions, said that  they refer to rightsizing reviews to support staffing changes. For example,  the management officer in Paraguay stated that the post concurred with  the rightsizing recommendation to eliminate an assistant general services  officer position; post officials are now in the process of abolishing the  position. The financial management officer in Sarajevo said that she had  already considered outsourcing cashiering, but a rightsizing  recommendation to do so gave her more incentive to take action. Further,  according to M/PRI officials, M/PRI’s 2007 review on Uruguay  recommended adding a second U.S. direct-hire public diplomacy position,  and the post has since implemented that recommendation.
According to State officials, M/PRI provides a broader perspective in  analyzing overseas staffing, providing information on where posts are  overstaffed or understaffed, and recommending potential ways to achieve  greater efficiencies. OBO officials stated that rightsizing is an independent  process that provides staffing projections. According to regional bureau  officials, the rightsizing review is currently the only tool that provides a  comprehensive process to verify the number of overseas positions and  the personnel occupying them. Officials from several regional bureaus  said that M/PRI’s broader perspective in analyzing post operations was a  benefit to rightsizing, as posts tend to have a narrower, more parochial  perspective on what staffing levels are necessary.
section_title: Some U.S. Officials Use Rightsizing Reviews Less Often than Other Documents that Are More Timely and More Widely Known
paragraphs: Several U.S. officials stated that they do not actively use rightsizing  reviews; they view other documents and tools as more timely and useful  for planning and staffing decisions. For example, officials from a regional  bureau said that they do not actively use the reviews except as a  historical overview of staffing. Officials from one regional bureau said that  the 5-year reviews do not have as clear a use as those done specifically  for construction. Some State post officials, especially in non-management  functions, said that the rightsizing reviews were of little or no use to them.
Several U.S. officials stated that that they use MSRPs and OIG reports  more frequently than rightsizing reviews to make staffing and resource  allocation decisions. These officials said that they were more aware of the  annual MSRPs, which are more current than 5-year rightsizing reviews,  and OIG reports and recommendations, which require follow-up until they  are closed. Officials said that rightsizing reviews, done every 5 years,  quickly become outdated as the situation at a post changes. Officials from  the Centers for Disease Control and Prevention said that, while the  rightsizing review is a long-term planning document, the more immediate  time frame of the annual MSRP is more actionable, given the short-term  program-driven nature of the agency’s work. Further, some State officials  told us that because the rightsizing process is still relatively new and done  at each post only once every 5 years, many post management officers  have not yet gone through a rightsizing review and may be unfamiliar with  it. As a result, some post officials may be resisting the rightsizing process  rather than viewing it as a tool, according to M/PRI officials.
In addition, some officials said that the final rightsizing reviews are not  widely disseminated, or that they do not know how to find the reviews.  Department of Homeland Security officials said that this is the first year  State has given them access to the final rightsizing review on State’s  intranet. Previously, while they provided comments on drafts, they were  not given access to the final document. In addition, a human resources  officer at one of the posts we visited stated that the training State  provides to new human resources officers does not mention the  rightsizing review. Several officials at the posts we visited said that they  first learned about their post’s rightsizing review in an announcement of  our visit to discuss rightsizing.
section_title: State Does Not Monitor Implementation of Rightsizing Recommendations and Has Not Clearly Designated an Office Responsible for Following Up on Recommendations
paragraphs: State has not clearly designated an office with responsibility for pursuing  implementation of rightsizing recommendations and does not track  recommendation status after completing a rightsizing review, making it   The legislation that established the  difficult for M/PRI to assess impact.rightsizing process states that the Secretary of State shall take actions to  carry out the recommendations made in each rightsizing review.
State officials have differing opinions about who should be responsible for  implementing recommendations. M/PRI’s 2010 report to Congress states  that rightsizing decisions are implemented through the NSDD-38 process,  with the final decision resting with the chief of mission. However, one post  official stated that regional bureaus should have responsibility for taking  action on rightsizing recommendations because they make resource  allocations across posts. Other post and regional bureau officials, in  contrast, stated that individual posts have responsibility to take action on  rightsizing recommendations because the recommendations are  generally directed at the posts, not the bureau. Still other officials stated  that the posts and regional bureaus should share responsibility for  implementing the recommendations. Officials from one regional bureau  said that M/PRI’s recent rightsizing recommendations were often  developed in concert with the regional bureaus, which could prompt the  bureau to follow up and encourage the post to implement the  recommendations. M/PRI began requiring posts to provide  recommendation implementation action plans in 2007 in response to one  of our previous recommendations. However, officials said that they  stopped doing the plans after about a year. The time horizon for  implementing the rightsizing recommendations varied to such an extent  that frequent reevaluation of progress would have been required to  ensure compliance, which was impractical given M/PRI’s resource  constraints, according to M/PRI officials. Officials from both M/PRI and  the regional bureaus have noted that M/PRI does not have the authority  to compel implementation of rightsizing recommendations.
Some post officials noted that there is little incentive to implement  recommendations, particularly if the recommendations are to decrease  the workforce size. While posts may agree with rightsizing  recommendations in concept, the tendency is for posts to protect their  staffing levels and look for increases if possible. For example, an official  in Prague agreed with a rightsizing recommendation to conduct a  strategic regional review of staffing in former Warsaw Pact countries to  determine whether the number of positions could be reduced. He noted,  however, that it would be difficult to accomplish in practice because posts  lack incentive to cut positions. The post’s budget provides salaries and  other compensation for locally-employed staff, while State’s headquarters  budget provides U.S. direct-hire staff salaries. incentive to reduce U.S. direct-hire staff even though they are more costly  than locally-employed staff. In addition, the chief of mission in a particular  country has final authority over staffing decisions and may have priorities  that extend beyond rightsizing considerations.
The post budget also provides some benefits to U.S. direct-hire staff.
section_title: Conclusions
paragraphs: Rightsizing reviews play a crucial role in planning construction of new  diplomatic facilities overseas, can inform bureau and post decisions on  staffing, and have prompted some posts to reassess staffing increases.  M/PRI has improved the consistency of its rightsizing approach over the  past several years. In addition, undertaking the rightsizing process can  act as a check on growth in overseas staffing. A valuable component of  the reviews is the recommendations made to improve post operations.
The legislation that established the rightsizing process requires the  Secretary of State to ensure that rightsizing recommendations are  addressed; however, State officials have not developed a clear approach  or designated an office to address, track, and report on such  recommendations. No State office has responsibility for following up on  recommendations, and posts or bureaus have limited incentive to  undertake an examination of recommendations and implement them if  they prove to have value. Further, any actions post officials take to  implement recommendations may not be known or documented outside  the post, which contributes to a substantial loss of information for State  officials. Although the reviews have certain limitations, including  competing priorities at posts, State has not yet realized the full potential of  its rightsizing reviews. To strengthen the impact of future rightsizing  reviews, State needs a process by which it can capture this information to  inform future decisions about the optimal number and mix of staff at posts  overseas to maximize the use of limited resources. Such a process would  also strengthen State’s ability to report to Congress on the  accomplishments of its rightsizing process.
section_title: Recommendations for Executive Action
paragraphs: To strengthen the effectiveness of the rightsizing effort, we recommend  that the Secretary of State designate the appropriate entity or entities to  take the following two actions:  1.  ensure that rightsizing recommendations are addressed, including  time frames for their evaluation and implementation, and 2.  track and report on the actions taken to implement the  recommendations.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to State for comment.  In its written  comments, reproduced in appendix II, State emphasized that correctly  aligning staffing with foreign policy goals and ensuring the maximum  safety and efficiency of overseas operations remain top department  priorities. State also noted that, given the critical role rightsizing reviews  play in determining staffing levels in preparation for the construction of  diplomatic facilities overseas and informing bureau and post decisions on  future staffing needs, it is important that the rightsizing function be carried  out optimally and that rightsizing data and analysis be shared widely.
State indicated that it would carefully consider our recommendations, and  it described a number of actions it intends to take that could address  them.  State noted that M/PRI will take the lead with regard to tracking  implementation of rightsizing review recommendations.  For rightsizing  reviews initiated after August 1, 2012, as part of the ongoing second cycle  of reviews, M/PRI analysts will outline the extent to which specific  recommendations M/PRI provided in the previous rightsizing cycle have  been implemented, as appropriate. State proposed that this information  on progress related to implementation of M/PRI’s recommendations for  overseas posts be included in the yearly rightsizing report to Congress  beginning in December 2012.  In addition, beginning in calendar year  2013, M/PRI will survey each mission 1 year after the completion of a  rightsizing review to assess progress with regard to the implementation of  recommendations. Posts will be asked to report on measures taken to  comply with recommendations, provide a time frame for doing so, or  explain changing conditions or policies that make compliance unfeasible.   State proposed to then include this additional information in the yearly  rightsizing report to Congress beginning in December 2013.  Further,  State reported ongoing efforts to refine analytical tools used in the  rightsizing analysis and cited an intention to expand the number of  outreach sessions and training on rightsizing to classes at its Foreign  Service Institute.
State also provided technical comments that were incorporated, as  appropriate. We provided the Departments of Defense; Health and  Human Services; Homeland Security; and Justice; and the U.S. Agency  for International Development with relevant excerpts of the report and  requested technical comments, but none were provided.
We are sending copies of this report to interested congressional  committees. We are also sending copies of this report to the Secretary of  State. In addition, this report is available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-8980 or courtsm@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this reported  are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: The objectives of this report were to examine (1) the consistency of the  Department of State’s (State) approach to conducting rightsizing reviews  and how its projections compare to actual staffing levels; (2) the focus of  State’s rightsizing recommendations; and (3) the extent to which State  uses its rightsizing reviews and monitors implementation of  recommendations.
Our scope included the 181 rightsizing reviews that State’s Office of  Management Policy, Rightsizing and Innovation (M/PRI) completed  between 2005 and 2011 that were provided within the time frame of our  review. Each U.S. overseas mission has undergone at least one  rightsizing review, according to M/PRI; a few have undergone two  reviews.
To obtain information on the consistency of State’s approach to  conducting rightsizing reviews, the focus of rightsizing recommendations,  and the extent to which State uses its rightsizing reviews and monitors  implementation of recommendations, we reviewed agency documents— including M/PRI’s annual reports to Congress, and Office of Inspector  General (OIG) reports—and interviewed officials from State and non- State agencies, both in Washington, D.C., and at overseas posts.  Specifically, we discussed rightsizing with State officials in Washington  from M/PRI, regional bureaus, the Bureau of Overseas Buildings  Operations; the Bureau of Diplomatic Security; the Bureau of Consular  Affairs; and the OIG. We also spoke with officials from non-State  agencies in the United States and overseas, including the Departments of  Commerce, Defense, Health and Human Services, Homeland Security,  and Justice, and the U.S. Agency for International Development.
To obtain more detailed information on the consistency of State’s  approach to conducting rightsizing reviews, how projections compare to  actual staffing levels, the focus of rightsizing recommendations, and how  State uses and monitors implementation, we selected 14 reviews to  analyze in greater depth, traveling to 3 of the posts and contacting the  other 11 by telephone or email. We based our selections on interviews  with M/PRI and State’s regional bureaus, the content of the rightsizing  reviews, and the political and security conditions at post to ensure that we  analyzed a range of experiences. In selecting posts, we considered the  date the rightsizing review was completed, whether other U.S. agencies  were present at post, geographic diversity and whether a post was  located in a new embassy compound. We traveled to Prague, the Czech  Republic; Sarajevo, Bosnia and Herzegovina; and Kuwait City, Kuwait to  discuss their respective rightsizing reviews with post officials. While at  post, we interviewed officials in each embassy section, including the  office of the chief of mission, management, human resources, financial  management, facilities management, the regional security office, political  affairs, public affairs, and consular affairs, among others. We also met  with officials from other U.S. government agencies present at post. We  also communicated with management officers at the following 11  missions: Bangladesh, Bolivia, Burkina Faso, Ghana, Korea, Libya,  Mozambique, Pakistan, Paraguay, the Philippines, and Tunisia.
To obtain additional information on the consistency of State’s approach to  conducting rightsizing reviews, we reviewed agency documents— including M/PRI’s annual reports to Congress, M/PRI’s guidance to posts,  and M/PRI’s guide to rightsizing for its analysts—and interviewed officials  from State and non-State agencies, both in Washington, D.C., and at  overseas posts. During our overseas site visits to the Czech Republic,  Bosnia and Herzegovina, and Kuwait, we discussed the rightsizing  process with the embassy section heads. To examine M/PRI’s  coordination with other U.S. government agencies, we spoke with officials  from non-State agencies in the United States and overseas. We also  discussed their process for allocating overseas staff with these officials. In  addition, we reviewed legislation related to the establishment of the Office  of Rightsizing within State and the intent of rightsizing. To examine how  M/PRI’s methodology has evolved in recent years, we reviewed 181  rightsizing reviews completed by M/PRI between 2005 and 2011. We  reviewed information papers on M/PRI’s methodological tools for  assessing both administrative staff and program staff, including the total  management ratio and diplomatic density.
To assess the extent to which State’s staffing projections compare with  actual staffing levels, we relied on two main sources of data: (1) the  staffing projections in the rightsizing reviews, which we manually entered  into a spreadsheet and (2) the actual staffing levels State extracted from  the Post Personnel database for us. To assess the reliability of the data,  we conducted a data consistency check and interviewed knowledgeable  State officials on how the data were collected and maintained, as well as  how the data were extracted for our use. We sent the staffing projection  data we manually entered to State for verification. We determined that the  data were sufficiently reliable for our purpose of comparing staffing  projections with actual staff levels as of December 2011. We obtained  181 rightsizing reviews from the Office of Rightsizing. We took the  following steps to reduce the number of reviews to 144 for the  comparison analysis: deleted entries with projection years prior to 2011; deleted entries based on an older review if there were multiple deleted entries with unreliable data. For example, State told us that  Afghanistan personnel numbers were not reliable;  consolidated projections for bilateral and multilateral missions in the  same country. For example, we combined projections for the U.S.  missions to Belgium, the European Union, and the North Atlantic  Treaty Organization into one entry;  consolidated projections for multiple posts in one country into one  entry. For example, we consolidated projections for posts in Russia  and posts in Poland; and deleted entries with no projections.
To compare rightsizing projections to the actual staffing levels of 2011,  which is the year for which State provided personnel data, we  extrapolated 2011 staffing levels based on rightsizing review projections.  We assumed linear growth or decline in staffing levels. For example, if the  base year was 2008 and the projection year was 2013, we divided the  change in staffing levels by 5 (5 years between the projection year and  the base year) to get the annual change in staffing levels. We added the  changes for 3 years (3 years between the base year and 2011) to the  base-year staffing level. We then identified the number of reviews in each  category of differences between the actual and the projection: within 10  percent, 10 to 50 percent overprojection, 10 to 50 percent  underprojection, more than 50 percent overprojection, and more than 50  percent underprojection. Missions with overprojections had fewer staff  than projected, while those with underprojections had more.
To understand the factors that could lead to differences between the  actual and projected staffing levels, we identified posts with relatively  large differences by generating a composite index for each country,  taking into consideration the differences in absolute numbers and  percentages for the following three categories: (a) U.S. direct-hire desk  positions, which have the most significant impact on the physical space at  a post; (b) locally-employed staff, which comprise the majority of the  personnel overseas; and (c) country total, which captures all personnel at  a post . Based on the composite index, we identified five countries for  overprojection—Tunisia, Libya, Bolivia, Korea, and the Philippines—and  five countries for underprojection—Pakistan, Bangladesh, Ghana,  Mozambique, and Burkina Faso. The differences between projected and  actual total staffing levels as of December 2011 were over 10 percent for  all 10 countries. We then sent questions to the management officers in  each country asking them the reasons for the differences. We  summarized their responses in the report.
To obtain information on the focus of recommendations made by State’s  rightsizing office, we reviewed 181 rightsizing reviews completed by  M/PRI between 2005 and 2011. During our overseas site visits to the  Czech Republic, Bosnia and Herzegovina, and Kuwait, we discussed the  rightsizing recommendations with the relevant section heads at each  post. We also discussed rightsizing recommendations with the  management officers in the other 11 missions that we selected for more  in-depth review.
To assess the extent to which State uses its rightsizing reviews and  tracks implementation of recommendations, we reviewed agency  documents, including M/PRI’s annual report to Congress, and interviewed  officials from State and non-State agencies, both in Washington, D.C.,  and at overseas posts to obtain information on how officials use the  reviews and monitor implementation. In addition, we reviewed our prior  work on rightsizing, embassy construction, and guidance on internal  controls.
section_title: Appendix II: Comments from the Department of State
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Ming Chen, Debbie Chung,  Lynn Cothern, Martin de Alteriis, Mark Dowling, Etana Finkler, Leslie  Holen (Assistant Director), Heather Latta, Lisa Reijula, and Christina  Werth made key contributions to this report.