Inspectors General:

Activities of the Department of State Office of Inspector General

GAO-07-138: Published: Mar 23, 2007. Publicly Released: Apr 23, 2007.

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GAO was asked to review the Department of State Office of Inspector General (State IG) including its (1) organization, budget levels, and accomplishments; (2) audit and inspection coverage of the department; (3) role of inspections in the oversight of the department; (4) quality assurance process including assurance of independence; and (5) coordination of State IG investigations with the State Department's Bureau of Diplomatic Security. GAO obtained information from State IG reports, interviews, and documentation for a sample of inspections.

The State IG provides oversight of the State Department, the Broadcasting Board of Governors, and the foreign affairs community, including the approximately 260 bureaus and posts around the world, through financial and performance audits, inspections, and investigations. Over fiscal years 2001 through 2005, in terms of constant dollars, the State IG's budget has increased by 1 percent while the State Department's overall budget has increased by 50 percent. This represents a relative decrease when comparing State IG with other agencies' ratios of IG budget to total agency budget. The State IG provides oversight coverage of the areas designated as high-risk by GAO and management challenges identified by the IG, with a heavy emphasis on inspections. The State IG covers the high-risk areas of human resources, counterterrorism, public diplomacy, and information security, almost exclusively through inspections. In fiscal year 2005, the State IG's ratio of inspections to audits was over two to one, while the federal statutory IGs had a combined ratio of one inspection to every ten audits. There are fundamental differences between inspections and audits. By design, audits performed under Government Auditing Standards are subject to more in-depth requirements for the levels of evidence and the documentation supporting the findings than are inspections performed under inspection standards. Due to the significance of the high-risk areas covered largely by inspections, the State IG would benefit by reassessing the mix of audit and inspection coverage of those areas. The State IG's audit and investigative functions both had recent peer reviews of quality assurance that resulted in "clean opinions." There is no requirement for a peer review of inspections; however, during our audit the State IG began an internal quality review process for inspections but did not include reviews of information technology inspections. Independence is critical to the quality and credibility of all the work of the State IG. Two areas of continuing concern that we have with the independence of the State IG involve (1) the temporary appointment of State Department management personnel to head the State IG office in an acting IG capacity and who subsequently return to management positions, and (2) the rotation of Foreign Service staff to lead IG inspections, including many who, along with other IG staff, move to positions in department management offices. Such staffing arrangements represent potential impairments to independence and the appearance of independence under professional standards applicable to the IGs. Both the State IG and the State Department's Bureau of Diplomatic Security pursue allegations of fraud by department employees. There is no functional written agreement in place to help ensure the independence of internal departmental investigations and preclude the duplication of efforts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO recommended that the State Department IG provide appropriate oversight of high-risk areas and management challenges by reassessing the proper mix of audit and inspection coverage with input from key stakeholders in the department and the Congress and an analysis of the appropriate level of resources. The State IG addressed this recommendation through their Fiscal Years 2016 and 2017 Work Plan for specific audits and inspections. Input to the work plan was provided by members of Congress and agency officials. The planned audits were determined based on the department's management challenges and other risk factors. In addition, the Sate IG has considered resources by increasing the audit staff from 61 at the time of our review to a current level of 100. These actions address our recommendation.

    Recommendation: To help ensure that the State IG provides the appropriate breadth and depth of oversight of the State Department's high-risk areas and management challenges, the State IG should reassess the proper mix of audit and inspection coverage for those areas. This reassessment should include input from key stakeholders in the State Department and the Congress and also entail an analysis of an appropriate level of resources needed to provide adequate IG coverage of high-risk and other areas in light of the increasing level of funding provided to the State Department.

    Agency Affected: Department of State: Office of the Inspector General

  2. Status: Closed - Implemented

    Comments: In June 2008, the State OIG's Office of Information Technology was integrated into the Office of Inspections (ISP). As a result, all information technology and information security inspections are now included in ISP's internal quality review process.

    Recommendation: To provide for more complete internal quality reviews of inspections the State IG should include inspections performed by the State IG's Office of Information Technology in its internal quality review process.

    Agency Affected: Department of State: Office of the Inspector General

  3. Status: Closed - Implemented

    Comments: Effective May 4, 2011, Section 1 FAM 052.2 "Deputy Inspector General" of the Foreign Affairs Manual (FAM) provides for one Deputy IG and the position must be a civil service employee. This change to the State's policy should ensure that any Deputy IG serving as the acting State IG will not be a foreign service officer. This change is consistent with the IG Act regarding State IG appointments and helps enhance independent audit coverage in the event there are any delays in appointing an IG for the State Department.

    Recommendation: To help ensure the independence of the IG office, the State IG should work with the Secretary of State to develop a succession planning policy for the appointment of individuals to head the State IG office in an acting IG capacity that is consistent with the IG Act regarding State IG appointment and provides for independent coverage in the event of delays between IG appointments. The policy should prohibit career Foreign Service officers from heading the State IG office in an acting IG capacity and specify within the IG's own succession order that acting IG vacancies are to be filled by eligible personnel without State Department management careers.

    Agency Affected: Department of State: Office of the Inspector General

  4. Status: Closed - Implemented

    Comments: GAO recommended that to help ensure the independence of the State Department Office of Inspector General (IG), the IG should develop options to help ensure inspections are not led by career Foreign Service officials or other staff who rotate to assignments within the department. The State IG addressed our recommendation through changes to the Inspectors Handbook dated December 2015. The handbook specifies that active duty Foreign Service Officers do not serve as the inspection team leaders. Instead civil service and retired staff are to serve as team leaders. In addition, all inspection team members must certify their independence on the IG's Independence Declaration and Mitigations form which considers and addresses any members lack of independence. These action fully address the report recommendation.

    Recommendation: To help ensure the independence of the IG office, the State IG should work with the Secretary of State to develop options to ensure that State IG inspections are not led by career Foreign Service officials or other staff who rotate to assignments within State Department management. Approaches could range from the State IG limiting its inspection activities to a level that is supportable without reliance on staff who routinely rotate to management offices, to permanently transferring or hiring additional staff, or full-time-equivalents, along with associated resources for the State IG office to eliminate the need to rely on Foreign Service and other rotational staff to lead inspections.

    Agency Affected: Department of State: Office of the Inspector General

  5. Status: Closed - Implemented

    Comments: On December 23, 2010 a Memorandum of Understanding (MOU) was signed by the State OIG and the Bureau of Diplomatic Security, Diplomatic Security Service (DSS). The MOU establishes investigative responsibilities and procedural guidelines for the OIG's Investigative Office and the DSS regarding investigations of the State Department's offices and programs, and the handling of criminal allegations relating to alleged misconduct of State employees. The MOU clarifies the areas of investigative responsibility between the OIG and DSS and establishes guiding principles for the accomplishment of that work. The goals of the MOU are to avoid duplication of work, ensure the safety of each organization's employees, and provide prompt and effective work products to the agency. The MOU formally acknowledges mutual assistance and cooperation and establishes formal procedures to facilitate communication, investigative coordination, and sharing of information between the OIG and DSS

    Recommendation: In order to provide for independent investigations of State Department management and to prevent duplicative investigations, the State IG should work with the Bureau of Diplomatic Security, the Office of Management, and the Secretary of State to develop a formal written agreement that delineates the areas of responsibility for State Department investigations. Such an agreement would, for example, address the coordination of investigative activities to help ensure the independence of internal departmental investigations and preclude the duplication of efforts.

    Agency Affected: Department of State: Office of the Inspector General

 

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