Pursuant to a congressional request, GAO discussed the major management challenges and program risks facing the Department of State.

GAO noted that: (1) the major management challenges facing State are not simple; (2) they cover a wide spectrum of State's operations and responsibilities around the world; (3) if these challenges are not met, they could seriously undermine its ability to function effectively in the 21st century; (4) these challenges include: (a) enhancing the security of U.S. personnel and facilities overseas; (b) improving the quality and capability of information and financial management systems; (c) successfully integrating other foreign affairs agencies into State; (d) effectively managing the visa process to reduce the risk of fraud and abuse; and (e) modernizing its approach to relocating and housing employees overseas; (5) State has recognized these challenges and has put in place over the last two years a new leadership team to address them; (6) State has devoted resources toward formulating a strategy and establishing priorities for enhancing overseas security; (7) the Department has also embarked on an aggressive approach to addressing its long-standing information and financial management issues; (8) however, much more needs to be done to create an effective and efficient platform to facilitate the conduct of foreign affairs and to protect U.S. employees overseas; (9) the Department has been reluctant to fundamentally change the way it does business; (10) the adoption of cost-based decision-making and use of best practices are critical to the State's dealing with these challenges; and (11) furthermore, the 1993 Government Performance and Results Act can serve as an important tool to help State overcome some of the challenges it faces.