Despite some progress in addressing staffing shortfalls since 2006, State’s diplomatic readiness remains at risk for two reasons: persistent staffing vacancies and experience gaps at key hardship posts that are often on the forefront of U.S. policy interests. First, as of September 2008, State had a 17 percent average vacancy rate at the posts of greatest hardship (which are posts where staff receive the highest possible hardship pay). Posts in this category include such places as Peshawar, Pakistan, and Shenyang, China. This 17 percent vacancy rate was nearly double the average vacancy rate of 9 percent at posts with no hardship differentials. Second, many key hardship posts 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 such above-grade assignments—15 percentage points higher than the rate for comparable positions at posts with no or low differentials. 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 assignments above grade, including several employees working in positions two grades above their own. Further, to fill positions in Iraq and Afghanistan, State has frequently assigned officers to positions above their grade. As of September 2008, over 40 percent of officers in Iraq and Afghanistan were serving in above-grade assignments. Several factors contribute to gaps at hardship posts. First, State continues to have fewer officers than positions, a shortage compounded by the personnel demands of Iraq and Afghanistan, which have resulted in staff cutting their tours short to serve in these countries. As of April 2009, State had about 1,650 vacant Foreign Service positions in total. Second, State faces a persistent mid-level staffing deficit that is exacerbated by continued low bidding on hardship posts. Third, although State’s assignment system has prioritized the staffing of hardship posts, it does not explicitly address the continuing experience gap at such posts, many of which are strategically important, yet are often staffed with less experienced officers. Staffing and experience gaps can diminish diplomatic readiness in several ways, according to State officials. For example, gaps can lead to decreased reporting coverage and loss of institutional knowledge. In addition, gaps can lead to increased supervisory requirements for senior staff, detracting from other critical diplomatic responsibilities. During the course of our review we found a number of examples of the effect of these staffing gaps on diplomatic readiness, including the following. The economic officer position in Lagos, whose responsibility is solely focused on energy, oil, and natural gas, was not filled in the 2009 cycle. The incumbent explained that, following his departure, his reporting responsibilities will be split up between officers in Abuja and Lagos. He said this division of responsibilities would diminish the position’s focus on the oil industry and potentially lead to the loss of important contacts within both the government ministries and the oil industry. An official told us that a political/military officer position in Russia was vacant because of the departure of the incumbent for a tour in Afghanistan, and the position’s portfolio of responsibilities was divided among other officers in the embassy. According to the official, this vacancy slowed negotiation of an agreement with Russia regarding military transit to Afghanistan. The consular chief in Shenyang, China, told us he spends too much time helping entry-level officers adjudicate visas and, therefore, less time managing the section. The ambassador to Nigeria told us spending time helping officers working above grade is a burden and interferes with policy planning and implementation. A 2008 OIG inspection of N’Djamena, Chad, reported that the entire front office was involved in mentoring entry-level officers, which was an unfair burden on the ambassador and deputy chief of mission, given the challenging nature of the post. State uses a range of incentives to staff hardship posts at a cost of millions of dollars a year, but their effectiveness remains unclear due to a lack of evaluation. Incentives to serve in hardship posts range from monetary benefits to changes in service and bidding requirements, such as reduced tour lengths at posts where dangerous conditions prevent some family members from accompanying officers. In a 2006 report on staffing gaps, GAO recommended that State evaluate the effectiveness of its incentive programs for hardship post assignments. In response, State added a question about hardship incentives to a recent employee survey. However, the survey does not fully meet GAO’s recommendation for several reasons, including that State did not include several incentives in the survey and did not establish specific indicators of progress against which to measure the survey responses over time. State also did not comply with a 2005 legal requirement to assess and report to Congress on the effectiveness of increasing hardship and danger pay from 25 percent to 35 percent in filling “hard to fill” positions. The lack of an assessment of the effectiveness of the danger and hardship pay increases in filling positions at these posts, coupled with the continuing staffing challenges in these locations, make it difficult to determine whether these resources are properly targeted. Recent legislation increasing Foreign Service officers’ basic pay will increase the cost of existing incentives, thereby heightening the importance that State evaluate its incentives for hardship post assignments to ensure resources are effectively targeted and not wasted. Although State plans to address staffing gaps by hiring more officers, the department acknowledges it will take years for these new employees to gain the experience they need to be effective mid-level officers. In the meantime, this experience gap will persist, since State’s staffing system does not explicitly prioritize the assignment of at-grade officers to hardship posts. Moreover, despite State’s continued difficulty attracting qualified staff to hardship posts, the department has not systematically evaluated the effectiveness of its incentives for hardship service. Without a full evaluation of State’s hardship incentives, the department cannot obtain valuable insights that could help guide resource decisions to ensure it is most efficiently and effectively addressing gaps at these important posts. State continues to have notable gaps in its foreign language capabilities, which could hinder U.S. overseas operations. As of October 31, 2008, 31 percent of officers in all worldwide language-designated positions did not meet both the foreign language speaking and reading proficiency requirements for their positions, up slightly from 29 percent in 2005. In particular, State continues to face foreign language shortfalls in areas of strategic interest—such as the Near East and South and Central Asia, where about 40 percent of officers in language-designated positions did not meet requirements. Gaps were notably high in Afghanistan, where 33 of 45 officers in language-designated positions (73 percent) did not meet the requirement, and in Iraq, with 8 of 14 officers (57 percent) lacking sufficient language skills. State has defined its need for staff proficient in some languages as “supercritical” or “critical,” based on criteria such as the difficulty of the language and the number of language-designated positions in that language, particularly at hard-to-staff posts. Shortfalls in supercritical needs languages, such as Arabic and Chinese, remain at 39 percent, despite efforts to recruit individuals with proficiency in these languages (see figure 1). In addition, more than half of the 739 Foreign Service specialists—staff who perform security, technical, and other support functions—in language-designated positions do not meet the requirements. For example, 53 percent of regional security officers do not speak and read at the level required by their positions. When a post fills a position with an officer who does not meet the requirements, it must request a language waiver for the position. In 2008, the department granted 282 such waivers, covering about 8 percent of all language- designated positions. Past reports by GAO, State’s Office of the Inspector General, the Department of Defense, and various think tanks have concluded that foreign language shortfalls could be negatively affecting U.S. national security, diplomacy, law enforcement, and intelligence-gathering efforts. Foreign Service officers we spoke to provided a number of examples of the effects of not having the required language skills, including the following. Consular officers at a post we visited said that because of a lack of language skills, they make adjudication decisions based on what they “hope” they heard in visa interviews. A security officer in Cairo said that without language skills, officers do not have any “juice”—that is, the ability to influence people they are trying to elicit information from. According to another regional security officer, the lack of foreign language skills may hinder intelligence gathering because local informants are reluctant to speak through locally hired interpreters. One ambassador we spoke to said that without language proficiency— which helps officers gain insight into a country—the officers are not invited to certain events and cannot reach out to broader, deeper audiences. A public affairs officer at another post said that the local media does not always translate embassy statements accurately, complicating efforts to communicate with audiences in the host country. For example, he said the local press translated a statement by the ambassador in a more pejorative sense than was intended, which damaged the ambassador’s reputation and took several weeks to correct. State’s current approach for meeting its foreign language proficiency requirements involves an annual review process to determine language- designated positions, training, recruitment, and incentives; however, the department faces several challenges to these efforts, particularly staffing shortages. State’s annual language designation process results in a list of positions requiring language skills. However, the views expressed by the headquarters and overseas officials we met with suggest State’s designated language proficiency requirements do not necessarily reflect the actual language needs of the posts. For example, because of budgetary and staffing issues, some overseas posts tend to request only the positions they think they will receive rather than the positions they actually need. Moreover, officers at the posts we visited questioned the validity of the relatively low proficiency level required for certain positions, citing the need for a higher proficiency level.