Overseas Presence: Framework for Assessing Embassy Staff Levels Can Support Rightsizing Initiatives
Released: 2002-07-26T00:00:00

Letter

Background

The U.S. government maintains more than 250 diplomatic posts overseas (embassies, consulates, and other diplomatic offices) with approximately 60,000 personnel representing more than 50 government agencies and subagencies. The departments of Defense and State together comprise more than two-thirds of American personnel overseas under chiefs of mission authority—36 percent and 35 percent, respectively. The costs of maintaining staff overseas vary by agency but in general, as OMB has reported, they are high. The Deputy Director of OMB recently testified that the average annual cost of having one full-time direct-hire American family of four in a U.S. embassy is $339,100.

Following the 1998 embassy bombings, two high-level independent groups called for the reassessment of overseas staffing levels. The Accountability Review Boards that sent two teams to the region to investigate the bombings concluded that the United States should consider adjusting the size of its overseas presence to reduce security vulnerabilities. Following the Accountability Review Boards’ report, OPAP concluded that some embassies were disproportionately sized and needed staff adjustments to adapt to new foreign policy priorities and reduce security vulnerabilities. The panel recommended creating a permanent interagency committee to develop a methodology to determine the appropriate size and locations of the U.S. overseas presence. OPAP also suggested a series of actions to adjust overseas presence, including relocating some functions to the United States and to regional centers where feasible. However, the State- led interagency committee that was established to respond to OPAP’s recommendations did not produce a standard rightsizing methodology. As we previously reported, the committee did not spend sufficient time at overseas locations to fully assess workload issues or consider alternative ways of doing business. To move the issue forward, in August 2001, the President’s Management Agenda identified rightsizing as one of the administration’s priorities. In addition, the President’s fiscal year 2003 international affairs budget (1) highlighted the importance of making staffing decisions on the basis of mission priorities and costs and (2) directed OMB to analyze agencies’ overseas staffing and operating costs (see app. I for a summary of previous rightsizing initiatives).

Development of a Rightsizing Framework

Although there is general agreement on the need for rightsizing the U.S. overseas presence, there is no consensus on how to do it. As a first step, we developed a framework that includes a set of questions to guide decisions on overseas staffing (see app. II for the set of questions). We identified three critical elements that should be systematically evaluated as part of this framework: (1) physical/technical security of facilities and employees, (2) mission priorities and requirements, and (3) cost of operations. If the evaluation shows problems, such as security risks, decision makers should then consider the feasibility of rightsizing options, including relocating staff or downsizing. On the other hand, evaluations of agencies’ priorities may indicate a need for additional staff at embassies or greater external support from other locations. Figure 1 illustrates the framework’s elements and options.

State and other agencies in Washington, D.C., including OMB, could use this framework as a guide for making overseas staffing decisions. For example, ambassadors could use this framework to ensure that embassy staffing is in line with security concerns, mission priorities and requirements, and cost of operations. At the governmentwide level, State and other agencies could apply the framework to free up resources at oversized posts, reallocate limited staffing resources worldwide, and introduce greater accountability into the staffing process.

The following sections describe in more detail the three elements of our framework, examples of key questions to consider for each element, and potential rightsizing options. We also include examples of how the questions in the framework were useful for examining rightsizing issues at the U.S. embassy in Paris.

Physical/Technical Security of Facilities and Employees

The substantial loss of life caused by the bombings of the U.S. embassies in Africa and the ongoing threats against U.S. diplomatic buildings have heightened concern about the safety of our overseas personnel. State has determined that about 80 percent of embassy and consulate buildings do not fully meet security standards. Although State has a multibillion-dollar plan under way to address security deficiencies around the world, security enhancements cannot bring most existing facilities in line with the desired setback—the distance from public thoroughfares—and related blast protection requirements. Recurring threats to embassies and consulates highlight the importance of rightsizing as a tool to minimize the number of embassy employees at risk.

What Is the Threat and Security Profile of the Embassy?

The Accountability Review Boards recommended that the Secretary of State review the security of embassies and consider security in making staffing decisions. We agree that the ability to protect personnel should be a key factor in determining embassy staffing levels. State has prepared a threat assessment and security profile for each embassy, which can be used when assessing staff levels. While chiefs of mission and State have primary responsibility for assessing overseas security needs and allocating security resources, all agencies should consider the risks associated with maintaining staff overseas. The Paris embassy, our case study, illustrates the importance of facility security in determining staffing levels. As at many posts, the facilities in Paris predate current security standards. The Department of State continues to mitigate security limitations by using a variety of physical and technical security countermeasures. That said, none of the embassy’s office buildings meets current standards.

Mission Priorities and Requirements

The placement and composition of staff overseas must reflect the highest priority goals of U.S. foreign policy. Moreover, the President’s Management Agenda states that U.S. interests are best served by ensuring that the federal government has the right number of people at the right locations overseas.

What Are the Embassy’s Priorities?

Currently, there is no clear basis on which to evaluate an embassy’s mission and priorities relative to U.S. foreign policy goals. State’s fiscal year 2000-2002 Mission Performance Plan (MPP) process does not require embassies to differentiate among the relative importance of U.S. strategic goals. The Chairman of OPAP testified in May 2002 that no adequate system exists to match the size and composition of the U.S. presence in a given country to the embassy’s priorities. Currently it is difficult to assess whether 700 people are needed at the Paris embassy. For example, the fiscal year 2000-2002 MPP includes 15 of State’s 16 strategic goals, and overall priorities are neither identified nor systematically linked to resources. In recent months, State has revised the MPP process to require each embassy to set five top priorities and link staffing and budgetary requirements to fulfilling these priorities. A successful delineation of mission priorities will complement our rightsizing framework and support future rightsizing efforts to adjust the composition of embassy staff.

Are Workload Requirements Validated and Prioritized?

Embassy workload requirements include influencing policy of other governments, assisting Americans abroad, articulating U.S. policy, handling official visitors, and providing input for various reports and requests from Washington. In 2000, on the basis of a review of six different U.S. embassies, the State-led interagency committee found the perception that Washington’s requirements for reports and other information requests were not prioritized and placed unrealistic demands on staff. We also found this same perception among some offices in Paris. Scrutiny of workload requirements could potentially identify work of low priority such as reporting that has outlived its usefulness. Currently, State monitors and sends incoming requests for reports and inquiries to embassies and consulates, but it rarely refuses requests and leaves the prioritization of workload to the respective embassies and consulates. Washington’s demands on an embassy need to be evaluated in light of how they affect other work requirements and the number of staff needed to meet these requirements. For example, the economics section in Paris reported that Washington-generated requests resulted in missed opportunities for assessing how U.S. private and government interests are affected by the many ongoing changes in the European banking system.

How Do Agencies Determine Staffing Levels?

The President’s Management Agenda states that there is no mechanism to assess the overall rationale for and effectiveness of where and how many U.S. employees are deployed overseas. Each agency in Washington has its own criteria for assigning staff to U.S. embassies. Some agencies have more flexibility than others in placing staff overseas, and Congress mandates the presence of others. Thorough staffing criteria are useful for determining and reassessing staffing levels and would allow agencies to better justify the number of overseas staff. We found that the criteria to locate staff in Paris vary significantly by agency. Some agencies use detailed staffing models, but most do not. Furthermore, they do not fully consider embassy priorities or the overall workload requirements on the embassy in determining where and how many staff are necessary.

Could an Agency’s Mission Be Pursued in Other Ways?

Some agencies are entirely focused on the host country, while others have regional responsibilities or function almost entirely outside the country in which they are located. Some agencies have constant interaction with the public, while others require interaction with their government counterparts. Some agencies collaborate with other agencies to support the embassy’s mission, while others act more independently and report directly to Washington. Analyzing where and how agencies conduct their business overseas may lead to possible rightsizing options. For example, the mission of the National Science Foundation involves interaction with persons throughout Europe and Eurasia and therefore raises the question of whether it needs Paris-based staff.

Cost of Operations

The President’s Management Agenda noted that the full costs of sending staff overseas are unknown. The Deputy Director of OMB testified that there is a wide disparity among agencies’ reported costs for a new position overseas. Without comprehensive cost data, decision makers cannot determine the correlation between costs and the work being performed, nor can they assess the short- and long-term costs associated with feasible business alternatives.

What Are an Embassy’s Operating Costs?

We agree with the President’s Management Agenda that staffing decisions need to include a full range of factors affecting the value of U.S. presence in a particular country, including the costs of operating the embassy. However, we found no mechanism to provide the ambassador and other decision makers with comprehensive data on all agencies’ costs of operations at an embassy. This lack of consolidated cost data for individual embassies makes linking costs to staffing levels, embassy priorities, and desired outcomes impossible. This is a long-standing management weakness that, according to the President, needs to be corrected. Our work in Paris demonstrates that this embassy is operating without fundamental knowledge and use of comprehensive cost data. State officials concurred that it is difficult to fully record the cost of all agencies overseas because of inconsistent accounting and budgeting systems. Nevertheless, we were able to document an estimated total cost for all agencies operating in France in fiscal year 2001 at more than $100 million. To do this, we developed a template in consultation with State and OMB to capture different categories of operating costs, such as salaries and benefits, and applied the template to each agency at the embassy.

Are Costs Commensurate with Expected Outcomes?

Once costs are known, it is important to relate them to the embassy’s performance. This will allow decision makers to (1) assess the relative cost-effectiveness of various program and support functions and (2) make cost-based decisions when setting mission priorities and staffing levels and determining the feasibility of alternative business approaches. With comprehensive data, State and other agencies could make cost-based decisions at the embassy level as well as on a global basis.

Rightsizing Options

Analyses of security, mission, and cost may suggest the need for more or fewer staff at an embassy or an adjustment to the overall staff mix. Independent analysis of each element can lead to changes. However, all three elements of the framework need to be considered together to make reasonable decisions regarding staff size. For example, if the security element is considered in isolation and existing facilities are deemed highly vulnerable, managers may first consider adding security enhancements to existing buildings; working with host country law enforcement agencies to increase embassy protection; reconfiguring existing space to accommodate more people in secure space; and leasing, purchasing, or constructing new buildings. However, consideration of all elements of the framework may suggest additional means for reducing security vulnerabilities, such as reducing the total number of staff. Our framework encourages consideration of a full range of options along with the security, mission, and cost trade-offs.

Our framework is consistent with the views of rightsizing experts who have recommended that embassies consider alternative means of fulfilling mission requirements. For example, OPAP concluded that staff reductions should be considered as a means of improving security, and the Chairman of OPAP, in May 2002 testimony, supported elimination of some functions or performing functions from regional centers or the United States.Moreover, President Bush has told U.S. ambassadors that “functions that can be performed by personnel in the U.S. or at regional offices overseas should not be performed at a post.” Our analysis highlights five possible rightsizing options to carry out these goals, but this list is not exhaustive. These suggested options include 1. relocating functions to the United States, 2. relocating functions to regional centers, 3. relocating functions to other locations under chief of mission authority where relocation back to the United States or to regional centers is not practical, 4. purchasing services from the private sector, and 5. changing business practices.

Our case study at the Paris embassy illustrates the applicability of these options, which have the potential to reduce the number of vulnerable staff in the embassy buildings. These options may be applicable to as many as 210 positions in Paris. The work of about 120 staff could be relocated to the United States—State already plans to relocate the work of more than 100 of these employees. In addition, the work of about 40 other positions could be handled from other locations in Europe, while more than 50 other positions are commercial in nature and provide services that are available in the private sector. For example: Some functions at the Paris embassy could be relocated to the United States. State is planning to relocate more than 100 budget and finance positions from the Financial Services Center in Paris to State’s financial center in Charleston, South Carolina, by September 2003. In addition, we identified other agencies that perform similar financial functions and could probably be relocated. For example, four Voice of America staff provide payroll services to correspondent bureaus and freelance reporters around the world and would benefit from collocation with State’s Financial Services Center.

The Paris embassy could potentially relocate some functions to the regional logistics center in Antwerp, Belgium, and the planned 23-acre secure regional facility in Frankfurt, Germany, which has the capacity for approximately 1,000 people. The Antwerp facility could handle part of the embassy’s extensive warehouse operation, which is currently supported by about 25 people. In addition, some administrative operations at the embassy, such as procurement, could potentially be handled out of the Frankfurt facility. Furthermore, staff at agencies with regional missions could also be moved to Frankfurt. These staff include a National Science Foundation representative who spent approximately 40 percent of his time in 2001 outside of France; four staff who provide budget and finance support to embassies in Africa; and some Secret Service agents who cover eastern Europe, central Asia, and parts of Africa.

There are additional positions in Paris that may not need to be in the primary embassy buildings where secure space is at a premium. The primary function of the National Aeronautics and Space Administration representative is to act as a liaison to European space partners. Accomplishing this work may not require retaining office space at the embassy. In fact, the American Battle Monuments Commission has already established a precedent for this, housing about 25 staff in separate office space in a suburb of Paris. In addition, a Department of Justice official works in an office at the French Ministry of Justice. However, dispersing staff raises additional security issues that need to be considered.

Given Paris’s modern transportation and communication links and large private-sector service industry, the embassy may be able to purchase services from the private sector, which would reduce the number of full- time staff at risk at the embassy if the services can be performed from another location. We identified as many as 50 positions at the embassy that officials in Washington and Paris agreed are commercial in nature, including painters, electricians, plumbers, and supply clerks.

Reengineering business functions could help reduce the size of the Paris embassy. Consolidating inventories at the warehouse could decrease staff workload. For instance, household appliances and furniture are maintained separately by agency with different warehouse staff responsible for different inventories. Purchasing furniture locally for embassies such as Paris could also reduce staffing and other support requirements.

Advances in technology, increased use of the Internet, and more flights from the United States may reduce the need for certain full-time permanent staff overseas. Moreover, we have identified opportunities to streamline or reengineer embassy functions to improve State’s operations and reduce administrative staffing requirements, particularly in western Europe, through measures that would reduce residential housing and furniture costs. We reported in March 2001 that State has a number of outmoded and inefficient business processes. Our cost analyses of the U.S. embassy’s housing office in Brussels and the housing support function at the U.S. embassy in London illustrated how reengineering could potentially result in significant savings.

Rightsizing Framework Complements OMB Initiatives

To implement the President’s Management Agenda, OMB and State have indicated that they plan to assess staffing requirements, costs, and options at embassies in Europe and Eurasia. As part of this effort, they are attempting to identify staff who could be relocated to the planned regional facility in Frankfurt. Applying our framework in this effort would provide a systematic means of assessing staff levels and considering embassy costs and relocation and other rightsizing options. Furthermore, OMB and State have other initiatives under way that will make it easier to use the framework in the future. For example, to make it easier to consider the costs of the U.S. overseas presence, OMB is gathering data on overseas costs for each agency and the costs of establishing new positions, and is assessing the process by which agencies request funding to assign additional staff overseas. To help assess mission priorities and workload, OMB and State are reviewing how embassies have implemented the revised MPPs, which are designed to more clearly set priorities, and how these plans could be used to determine allocation of embassy resources. We plan to monitor OMB’s progress in implementing the rightsizing initiative and work with it to incorporate comprehensive cost data into the overseas staffing process.

Conclusion

Our rightsizing framework was designed to allow decision makers to systematically link embassy staffing levels and requirements to three critical elements of embassy operations—physical security, mission priorities and requirements, and cost. Using our framework’s common set of criteria for making staffing assessments and adjustments would be an important step toward establishing greater accountability and transparency in the overseas staffing process. The key questions of the framework will help decision makers identify the most important factors affecting an embassy’s staffing levels and consider rightsizing options to either add or reduce staff or adjust the staff mix. Rightsizing experts told us that the framework appears applicable to all embassies. Although we have tested it only at the U.S. embassy in Paris and are in the process of refining it, we too believe that the framework can provide guidance for executive branch rightsizing exercises at other embassies.

Recommendation for Executive Action

To facilitate the use of a common set of criteria for making staff assessments and adjustments at overseas posts and encourage decision makers to consider security, mission priorities and requirements, and costs, we recommend that the Director of the Office of Management and Budget ensure that our framework is used as a basis for assessing staffing levels in the administration’s rightsizing initiative, starting with its assessments of staffing levels and rightsizing options at U.S. embassies in Europe and Eurasia.

Agency Comments and Our Evaluation

OMB and State provided written comments on a draft of this report (see apps. III and IV). OMB said that it appreciated our efforts to develop a rightsizing framework. OMB agreed with the framework’s key elements and options and plans to build upon the framework in examining staffing at all posts within the European and Eurasia Bureau. However, OMB expressed concern regarding whether the GAO methodology can be uniformly applied at all posts worldwide. Nonetheless, OMB noted that it looks forward to working with us and the State Department in using the framework as a starting point to develop a broader methodology that can be applied worldwide.

State said that it welcomed our work in developing a framework for rightsizing. State noted the difficulties of previous efforts to develop a methodology, including attempts by the Overseas Presence Advisory Panel and a State-led interagency rightsizing committee. It stated that it has taken steps to regionalize responsibilities in the United States and overseas where appropriate. In addition, State provided technical comments that we have incorporated into this report, as appropriate.

Scope and Methodology

To develop the elements of the rightsizing framework and corresponding checklist of suggested questions, we analyzed previous reports on overseas staffing issues, including those of the Accountability Review Boards, OPAP, and the State-led interagency rightsizing committee. We interviewed officials from OMB to discuss the administration’s current rightsizing initiatives in relation to the President’s Management Agenda. We discussed embassy staffing with rightsizing experts, including the Chairman of OPAP and the current and former Undersecretary of State for Management. We also interviewed officials from the Departments of State, Defense, the Treasury, Commerce, Justice, and Agriculture as well as officials from other agencies with personnel in France.

To further develop and test the framework, we conducted a case study at the U.S. embassy in Paris. To assess embassy security, we reviewed security reports, interviewed security experts, and made direct observations. To assess missions’ priorities and requirements, we interviewed and collected data from the U.S. Ambassador to France, the Deputy Chief of Mission, and other high-ranking embassy officials as well as officials from more than 35 sections at the Paris embassy. We also interviewed agency officials in Washington, D.C., and in Paris to determine the criteria used by agencies to set staffing levels at the Paris embassy. To assess costs, we interviewed budget and financial management officials from State and collected data on the different categories of operating costs, such as salaries and benefits, from each agency with staff assigned to the Paris embassy. To determine the feasibility of rightsizing actions, we collected and analyzed data associated with (1) relocating certain functions to the United States, regional centers in Europe, or other locations in France and (2) outsourcing or streamlining some functions.

We visited State’s regional logistics and procurement offices in Antwerp, Belgium, and Frankfurt, Germany, which have been considered as options for expanded regional operations in Europe. To determine if opportunities exist to outsource functions, we collected and analyzed data on the business and staffing practices of Paris-based businesses, other U.S. embassies in western Europe, and other bilateral diplomatic missions in Paris.

We conducted our work between September 2001 and May 2002 in accordance with generally accepted government auditing standards.

We are sending copies of this report to other interested Members of Congress. We are also sending copies of this report to the Director of OMB and the Secretary of State. Copies will be made 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 me on (202) 512-4128. Another GAO contact and staff acknowledgments are listed in appendix V.

Appendix I: Timeline of Rightsizing Initiatives since the 1998 Embassy Bombings

Initiative Following the bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, that killed more than 220, including 12 Americans, and injured more than 4,000, the Accountability Review Boards recommended that the Department of State look into decreasing the size and number of embassies and consulates to reduce employees’ vulnerability to attack. The Overseas Presence Advisory Panel (OPAP) reported that overseas staffing levels had not been adjusted to reflect changing missions and requirements; thus, some embassies were too large and some were too small. OPAP said rightsizing was an essential component of an overall program to upgrade embassy and consulate capabilities, and it recommended that this be a key strategy to improve security by reducing the number of staff at risk. OPAP also viewed rightsizing as a way to decrease operating costs by as much as $380 million annually if a 10 percent worldwide staffing reduction could be achieved. President Clinton directed the Secretary of State to lead an interagency effort to (1) develop a methodology for assessing embassy staffing and (2) recommend adjustments, if necessary, to staffing levels at six pilot study embassies. We reported that the interagency committee was not successful in developing such a methodology. Although the committee concluded that it was impractical to develop a standard approach because of differences among embassies, we reported that the pilot studies had limited value because they were conducted without focused, written guidelines, and committee members did not spend enough time at each embassy for a thorough evaluation. The President’s Management Agenda identified rightsizing as one of the administration’s management priorities. President Bush directed the Office of Management and Budget (OMB) to collect, analyze, and review overall U.S. government staffing to help reconfigure overseas staff allocation to the minimum number necessary to achieve U.S. foreign policy goals. The President’s fiscal year 2003 international affairs budget highlighted the importance of making staffing decisions on the basis of mission priorities and costs and directed OMB to analyze agencies’ overseas staffing and operating costs.

Physical/technical security of facilities and employees What is the threat and security profile of the embassy? Has the ability to protect personnel been a factor in determining staffing levels at the embassy? To what extent are existing office buildings secure? Is existing space being optimally utilized? Have all practical options for improving the security of facilities been considered? Do issues involving facility security put the staff at an unacceptable level of risk or limit mission accomplishment? Do security vulnerabilities suggest the need to reduce or relocate staff?

What are the staffing levels and mission of each agency? How do agencies determine embassy staffing levels? Is there an adequate justification for the number of employees at each agency compared with the agency’s mission? Is there adequate justification for the number of direct hire personnel devoted to support and administrative operations? What are the priorities of the embassy?Does each agency’s mission reinforce embassy priorities? To what extent are mission priorities not being sufficiently addressed due to staffing limitations or other impediments? To what extent are workload requirements validated and prioritized and is the embassy able to balance them with core functions? Do the activities of any agencies overlap? Given embassy priorities and the staffing profile, are increases in the number of existing staff or additional agency representation needed? To what extent is it necessary for each agency to maintain its current presence in country, given the scope of its responsibilities and its mission? - Could an agency’s mission be pursued in other ways? - Does an agency have regional responsibilities or is its mission entirely focused on the host country?

What is the embassy’s total annual operating cost? What are the operating costs for each agency at the embassy? To what extent are agencies considering the full cost of operations in making staffing decisions? To what extent are costs commensurate with overall embassy strategic importance, with agency programs, and with specific products and services?

What are the security, mission, and cost implications of relocating certain functions to the United States, regional centers, or to other locations, such as commercial space or host country counterpart agencies? To what extent could agency program and/or routine administrative functions (procurement, logistics, and financial management functions) be handled from a regional center or other locations? Do new technologies and transportation links offer greater opportunities for operational support from other locations? Do the host country and regional environments suggest there are options for doing business differently, that is, are there adequate transportation and communications links and a vibrant private sector? To what extent is it practical to purchase embassy services from the private sector? Does the ratio of support staff to program staff at the embassy suggest opportunities for streamlining? Can functions be reengineered to provide greater efficiencies and reduce requirements for personnel? Are there best practices of other bilateral embassies or private corporations that could be adapted by the U.S. embassy? To what extent are there U.S. or host country legal, policy, or procedural obstacles that may impact the feasibility of rightsizing options?

Appendix IV: Comments from the Department of State

The following are GAO’s comments on the Department of State’s letter dated July 9, 2002.

GAO’s Comments

1. We did not set priorities for the elements in the framework that appear in this report. As we state on page 9, decision makers need to consider all three elements of the framework together to make reasonable decisions regarding staff size. 2. In the mission priorities and requirements section, the framework includes the question, “To what extent is it necessary for each agency to maintain its current presence in country?” The amount of time that officials spend in country is a key factor needed to answer the question and in this case the location of the National Science Foundation’s representative in Paris warranted further analysis as a possible candidate for rightsizing. The mandate of the National Science Foundation representative is to communicate with bilateral and multilateral counterpart agencies in more than 35 countries in Europe and Eurasia. The representative stated that he could do his job from any location in Europe, as long as he has high-speed internet connectivity. Given security limitations at facilities in Paris and the availability, in the near future, of secure space in Frankfurt, Germany, decision makers should consider these types of positions for relocation.

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the person named above, David G. Bernet, Janey Cohen, Chris Hall, Katie Hartsburg, Lynn Moore, and Melissa Pickworth made key contributions to this report.