State is the lead agency responsible for implementing American foreign policy and representing the United States abroad. It staffs approximately 268 embassies, consulates, and other posts with over 8,000 Foreign Service positions overseas. Roughly two-thirds of these posts are in locations that qualify for a special salary differential to compensate officers for the harsh living conditions experienced there. The differential ranges from 5 to 35 percent of basic pay and is determined by a number of factors including extraordinarily difficult living conditions, excessive physical hardship, or notably unhealthy conditions affecting at least a majority of employees stationed at such a post. Figure 1 shows the distribution of overseas posts and positions by hardship differential. In general, tours of duty are two years in the United States and at 20 percent and 25 percent hardship posts. Tours at other posts are generally three years, although a number of posts in locations too dangerous for some family members to accompany an officer carry 1-year tours. FSOs serving abroad fall into two broad categories: generalists and specialists. FSO generalists help formulate and implement the foreign policy of the United States and are grouped into five career tracks: management, consular, economic, political, and public diplomacy. FSO specialists provide support services at overseas posts worldwide or in Washington, D.C., and are grouped into seven major categories: administration, construction engineering, information technology, international information and English language programs, medical and health, office management, and security. State requires its FSOs to be available for service anywhere in the world, and reserves the ability to direct officers to any of its posts overseas or to its Washington headquarters. However, directed assignments are rare. The process of assigning FSOs to their positions typically begins when the staff receive a list of upcoming vacancies for which they may compete. Staff then submit a list of positions for which they want to be considered, or “bids,” to the Office of Career Development and Assignments (HR/CDA) and consult with their career development officer. The process varies depending on an officer’s grade and functional specialty: Entry-level officers’ assignments are directed by the En of HR/CDA with little input from the posts or bureaus. Mid-level officers consult with bureaus and overseas posts to market themselves for their desired position panels to finalize the assignments. s. Subsequently, HR/CDA convenes Senior-level officers are selected for their positions by the Director General, following approval of policy-level positions by a special committee. As with mid-level officers, HR/CDA convenes a panel to finalize the assignments. In recent years, State has taken a series of measures to address gaps and reallocate staff to emerging priority nations. In 2002, State implemented the Diplomatic Readiness Initiative (DRI) to address staffing and training gaps that, according to the department, endangered U.S. diplomatic readiness. Through the DRI—a 3-year, $197 million program—State hired 1,069 new foreign and civil service employees above attrition. However, as we previously reported, most of this increase was absorbed by the demand for personnel in Iraq and Afghanistan. In 2006, State introduced the Global Repositioning Program, which reallocated existing positions to emerging high-priority countries in the Middle East, Asia, and Africa. The primary focus of this program was to move political, economic, and public diplomacy officers from places like Washington and Europe to countries of increasing strategic importance such as China and India. Despite some progress since we last reported in 2006, State has continued to face staffing and experience gaps at hardship posts that may compromise its diplomatic readiness. Several factors contribute to gaps at hardship posts, including State’s overall staff shortage, which is compounded by the significant personnel demands of Iraq and Afghanistan, and a mid-level staffing deficit that has been reduced, but not eliminated. Moreover, State continues to experience difficulty in attracting officers to hardship posts and its assignment system does not explicitly address the experience gap at these posts. Staffing and experience gaps at hardship posts can diminish diplomatic readiness in a variety of ways, according to current and former State officials, including by reducing reporting coverage, weakening institutional knowledge, and increasing the supervisory burden on senior staff. State continues to face staffing and experience gaps at hardship posts, including many of significant strategic importance to the United States. First, State has faced difficulty in filling critical positions at hardship posts. In its FY 2007 Annual Performance Report, State identified staffing of critical positions—designated positions at the posts of greatest hardship (those with hardship differentials of at least 25 percent)—as a key priority, noting that such positions are often on the forefront of U.S. policy interests. As such, State established a target for fiscal year 2007 of filling 90 percent of such critical positions with qualified bidders by the end of the assignments cycle. However, State reported filling 75 percent of its critical positions, thereby missing its target. State further noted that it would be unable to fill more than 75 percent of critical positions until its resource needs were met. Subsequently, the department lowered its target to 75 percent for fiscal year 2008, which it reported it met. In addition to staffing gaps specific to critical positions, State faces its highest rate of vacancies at the posts of greatest hardship. As of September 2008, State had a 17 percent average vacancy rate at the posts of greatest hardship—nearly double the average rate of 9 percent at posts with no hardship differentials. Vacancies at posts we visited during our review included a mid-level public affairs position in Jeddah, Saudi Arabia, that was vacant as of September 2008 and, at the time of our March 2009 visit, was not expected to be filled until June 2009. Similarly, a section chief in Lagos, Nigeria, stated that prior to his arrival at post in August 2008, his position had been vacant for nearly a year. Although there were few vacancies in Shenyang, China, at the time of our visit, nearly one-quarter of the staffed positions had been vacant for 4 months or more before their current incumbents arrived. Beyond higher position vacancy rates, posts of greatest hardship face experience gaps due to a higher rate of staff filling positions above their own grades (see table 1). As of September 2008, about 34 percent of mid- level generalist positions at posts of greatest hardship were filled by officers in upstretch assignments—15 percentage points higher than the upstretch rate for comparable positions at posts with no or low differentials. Furthermore, as of the same date, 25 of 34 (over 70 percent) of all overseas generalists working two grades above their rank were located at hardship posts. At posts we visited during our review, we observed numerous officers working in positions above their rank. For example, in Abuja, Nigeria, more than 4 in every 10 positions were staffed by officers in upstretch assignments, including several employees working in positions two grades above their own. We also found multiple officers in upstretch assignments in Shenyang, including one mid-level consular position that officials stated has never been filled at grade. A number of factors lead to gaps at hardship posts, including: State’s overall staff shortage, which is compounded by the significant personnel demands of Iraq and Afghanistan; a persistent mid-level staffing deficit exacerbated by continued low bidding on hardship posts; and an assignment system that does not explicitly address the continuing experience gap at hardship posts. As of April 2009, State had about 1,650 vacant Foreign Service positions in total. Approximately 270 of these vacancies were due to State not having enough employees to fill all of its positions—a shortfall that has grown since our last report. Officers attending training or rotating from post to post without replacements to fill their positions accounted for most of the remaining 1,380 vacancies. As we reported in 2006, State implemented DRI with the intention of hiring enough new employees above attrition to allow staff time for critical job training—also referred to as a “training float”—and to respond to emerging crises. However, as we previously reported, this goal became quickly outdated largely due to staffing demands for Iraq and Afghanistan. In particular, due to the overall shortage of FSOs and the high priority of meeting Iraq and Afghanistan’s staffing needs, bureaus have had to identify nearly 670 positions to leave unfilled, or “frozen,” since 2005. As a result, State has generally been able to find candidates to fill positions in Iraq and Afghanistan—its top priority posts—but doing so has created gaps elsewhere, including at other hardship posts. For instance, positions that bureaus decided not to fill in the 2009 assignments cycle included several positions at hardship posts, such as an economic officer in Lagos, a management officer in Shenyang, and three or more positions each in Riyadh, Saudi Arabia; Mexico City, Mexico; and Moscow, Russia. State officials also noted that the pressing need to staff Iraq and Afghanistan has led officers serving elsewhere to interrupt or cancel their current tours and volunteer for service in those two countries, thereby leaving other posts with unexpected gaps. For example, a senior official stated that a key political/military officer position in Russia was vacant due to the incumbent volunteering for a year of service in Afghanistan. The senior official further stated that he anticipated it would be difficult to find a temporary replacement for the unexpected vacancy. Similarly, officials in the Bureau of East Asian and Pacific Affairs told us an officer who received nearly a year of language training in Vietnamese cancelled her tour in Vietnam to serve in Iraq. Although State recently received a significant increase in resources and has requested more, the extent to which this influx will allow the department to eliminate vacancies is unclear. State received funding for about 140 additional Foreign Service positions in fiscal year 2008.