Key Issues Concerning Department of State's New Financial Management Centers

NSIAD-85-97: Published: Jun 5, 1985. Publicly Released: Jun 21, 1985.

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Pursuant to a congressional request, GAO reviewed the Department of State's efforts to establish financial management centers (FMC) overseas, including: (1) the adequacy of transition plans for integrating the new centers with the existing regional centers; (2) the effect of personnel and equipment problems on establishing the new centers; and (3) the costs associated with establishing the new centers.

GAO found that: (1) the plans to implement the new financial management system did not address how currency buying will be carried out and how staffing reassignments will be handled; (2) overall costs to open FMC have been understated; and (3) State has not yet decided which overseas posts FMC will service and which posts regional administrative management centers (RAMC) will service. GAO also found that: (1) State increased its efforts to recruit and train sufficient personnel to staff new FMC; (2) the lack of availability of repair parts and service personnel for computer equipment affected operations; and (3) cost-benefit analyses performed early in the program may not be valid because the system's design has been changed numerous times.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: State established which posts RAMC and FMC will service. State determined how the smaller posts will receive maximum benefits. State is currently designing a system for use by smaller posts. The system will assist posts serviced by a financial center in the preparation, submission, retention, and analysis of financial management data relevant to the post.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to resolve which posts FMC will service and which posts RAMC will service and determine how the smaller posts will receive maximum benefits.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: State developed a transition plan for RAMC, which takes into account enhancing support to State's overseas automated operations, the new role of RAMC, staffing, and other considerations.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to ensure that RAMC transition plans are prepared which consider the impact FMC will have on RAMC.

    Agency Affected: Department of State

  3. Status: Closed - Not Implemented

    Comments: State changed a couple of currency buying arrangements and plans to review others on a case-by-case basis, as time and resources permit. However, State remains adamant that currency purchases and FMC are unrelated. Therefore, this recommendation should be withdrawn, since State plans no action.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to resolve the issue of how currency buying will be performed so that the impact on RAMC and FMC can be taken into consideration.

    Agency Affected: Department of State

  4. Status: Closed - Not Implemented

    Comments: State anticipates RAMC will assume a vastly different role. Thus, the work-load information collected on current activities may prove of little value as State projects future staffing needs for RAMC to carry out its new functions.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to require that data be collected to measure work load so that RAMC can assess staff levels.

    Agency Affected: Department of State

  5. Status: Closed - Implemented

    Comments: State developed a transition plan for RAMC, which describes its future role.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to ensure that actions are begun immediately to resolve the issue of the future long-term role of RAMC.

    Agency Affected: Department of State

  6. Status: Closed - Implemented

    Comments: State initiated a special recruitment effort to hire qualified financial management specialists. State currently has enough people on board to staff essential positions. By December 1988, a register of eligibles will be available from which to select candidates to fill positions when they become vacant. A Budget and Financial Management course and a Disbursing Officers course are now required.

    Recommendation: To ensure that FMC will have the necessary resources and operational capabilities, the Secretary of State should direct the Under Secretary for Management to quantify the need for and availability of qualified budget and fiscal officers, relate shortfalls to recruiting and training plans, and take appropriate action where needed.

    Agency Affected: Department of State

  7. Status: Closed - Implemented

    Comments: The classification standards have been revised, approved effective March 15, 1988, and sent to FMC.

    Recommendation: To ensure that FMC will have the necessary resources and operational capabilities, the Secretary of State should direct the Under Secretary for Management to update foreign service national classification standards to reflect work performed at FMC.

    Agency Affected: Department of State

  8. Status: Closed - Implemented

    Comments: A program is now available to overseas system managers that enable them to monitor system usage.

    Recommendation: To ensure that FMC will have the necessary resources and operational capabilities, the Secretary of State should direct the Under Secretary for Management to require post systems managers to start collecting data on use of post computer resources.

    Agency Affected: Department of State

  9. Status: Closed - Implemented

    Comments: There are no indications that the computer system maintenance contractor is not currently performing in such a way as to minimize operational problems. The contract was amended to require improved service.

    Recommendation: To ensure that FMC will have the necessary resources and operational capabilities, the Secretary of State should direct the Under Secretary for Management to ensure that the Department initiatives to resolve its computer maintenance problems are pursued to minimize potential adverse impact on FMC operations.

    Agency Affected: Department of State

  10. Status: Closed - Implemented

    Comments: State now tracks the costs of FMC development.

    Recommendation: The Secretary of State should identify and track the total costs of FMC development.

    Agency Affected: Department of State

  11. Status: Closed - Implemented

    Comments: State is performing this reevaluation.

    Recommendation: The Secretary of State should reevaluate the costs and benefits of FMC as implementation progresses.

    Agency Affected: Department of State

  12. Status: Closed - Implemented

    Comments: State's office responsible for opening FMC is in frequent contact with operating FMC, as well as those posts scheduled to be FMC. State modified the schedule for opening FMC somewhat in response to Gramm-Rudman-Hollings cuts.

    Recommendation: The Secretary of State should direct the Under Secretary of Management to closely monitor the schedule for establishing FMC and to modify it if problems arise.

    Agency Affected: Department of State

  13. Status: Closed - Implemented

    Comments: While State has determined that it is necessary to keep the disbursing and accounting functions together, it is pursuing various initiatives to reduce disbursing costs. These include reduction of disbursing data entry costs through installation of the FMC vouchering module and development of automated interfaces to produce payments and reconcile bank accounts.

    Recommendation: The Secretary of State should determine whether the local disbursing capability is needed and cost-effective at all 20 designated FMC.

    Agency Affected: Department of State

 

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