Summary

The State Department--the lead agency for advancing and protecting U.S. interests abroad--maintains a worldwide network of operations at more than 250 locations overseas to support its mission and those of 35 other U.S. agencies. A substantial share of the Department's $3-billion annual budget goes to support these operations, which range from providing security for more than 50,000 State Department and other U.S. agency personnel to finding suitable housing for American employees and their families. This testimony focuses on the management challenges that State faces in improving its operations in the following four areas: improving the security of U.S. personnel and facilities overseas in a cost-effective and timely manner, determining the right size and location of the U.S. overseas presence to improve the efficiency of operations, upgrading information and financial management systems to further strengthen communications and accountability, and improving performance planning to better achieve mission objectives.

GAO noted that: (1) State faces several wide-ranging and complex challenges in managing its vast overseas operations; (2) these challenges include: (a) improving the security of U.S. personnel and facilities overseas in a cost-effective and timely manner; (b) determining the right size and location of the U.S. overseas presence to improve the efficiency of operations; (c) upgrading information and financial management systems to further improve communications and accountability; and (d) improving performance planning to better achieve mission objectives; (3) State has recognized these challenges and has devoted substantial resources toward addressing them; (4) following up on a recommendation of the Crowe reports, State also convened an Overseas Presence Advisory Panel, which issued a report in November 1999 to the Secretary of State, calling for substantial changes in the size, composition, and management of the U.S. overseas presence; (5) it concluded that the U.S. presence has not adequately adjusted to the new economic, political, and technical landscape; (6) in GAO's report issued March 8, GAO concluded that State has made progress in implementing certain emergency security upgrades, but cost estimates to complete major upgrades could exceed the Department's initial estimates by about $800 million, and will not be completed as quickly as it had hoped, due to increasing security requirements; (7) State also faces continuing challenges in working with U.S. agencies operating overseas to standardize information technology capabilities and in correcting its longstanding weaknesses in financial management systems; (8) investing in compatible technologies could reduce costs, and improve the productivity and effectiveness of overseas staff; (9) regarding financial management, the Department's Office of Inspector General reported in September 1999 that State's financial systems did not comply with certain requirements, including some provisions of the Federal Financial Management Improvement Act of 1996; (10) in GAO's view, State needs to continue to make improvements in its financial management systems to provide managers with information they need to operate in a more business-like fashion and make better cost-based decisions; and (11) moreover, while State has made some progress in implementing requirements under the Government Performance and Results Act, its FY 2000 annual performance plan did not provide a complete picture of the agency's intended performance relating to some of its strategic goals.