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Performance and Accountability Series:

January 2003:

Major Management Challenges and Program Risks:

Department of State:


A Glance at the Agency Covered in This Report

To carry out U.S. foreign policy, the Department of State

* formulates U.S. policy on numerous international issues and 

influences other

countries to adopt policies and practices consistent with U.S. 


* conducts negotiations and concludes international agreements and 


* leads interagency coordination and supports the international 

activities of other

U.S. agencies;

* issues passports and visas and provides services to U.S. citizens 

living and

traveling abroad;

* operates and provides security for embassy and consular facilities; 


* provides funding for international organizations and peacekeeping 


the Andean counterdrug initiative, international narcotics control 

and law

enforcement, and migration and refugee assistance.

The Department of State’s Budgetary and Staff Resources:

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[A] Budgetary resources include new budget authority (BA) and 

unobligated balances 

of previous BA.

[B] Budget and staff resources are actuals for FY 1998-2001. 

FY 2002 are estimates 

from the FY 2003 budget, which are the latest publicly available 

figures on a 

consistent basis as of January 2003. Actuals for FY 2002 will be 

contained in the 

President’s FY 2004 budget to be released in February 2003.

[C] U.S. foreign service national employees are included.

[End of Figure]

This Series

This report is part of a special GAO series, first issued 

in 1999 and updated in

2001, entitled the Performance and Accountability Series: 

Major Management

Challenges and Program Risks. The 2003 Performance and 

Accountability Series

contains separate reports covering each cabinet department, 

most major

independent agencies, and the U.S. Postal Service. The 

series also includes a

governmentwide perspective on transforming the way the 

government does

business in order to meet 21st century challenges and 

address long-term fiscal

needs. The companion 2003 High-Risk Series: An Update 

identifies areas at high risk

due to either their greater vulnerabilities to waste, 

fraud, abuse, and

mismanagement or major challenges associated with their 

economy, efficiency, or

effectiveness. A list of all of the reports in this 

series is included at the end of

this report.

GAO Highlights:

Highlights of GAO-03-107, a report to

Congress included as part of GAO’s

Performance and Accountability Series


Department of State

Why GAO Did This Study:

In its 2001 performance and accountability report on 

the Department of State, GAO 

identified important issues concerning the security 

of U.S. facilities and personnel 

overseas, visa issuance, illicit drugs entering the 

United States, information 

security, and other issues facing the department. 

The information GAO presents in 

this report is intended to sustain congressional 

attention and a departmental focus 

on continuing to make progress in addressing these 

challenges and ultimately 

overcoming them. This report is part of a special 

series of reports on governmentwide 

and agency-specific issues.

What GAO Found:

In carrying out its missions of forming, 

representing, and implementing U.S.

foreign policy, the State Department faces complex 

challenges, some of

which have intensified since the terrorist attacks 

on September 11, 2001.

State has made progress in addressing its 

management challenges over the

last 2 years, but further improvements are needed 

in the following areas:

• Improving the security and maintenance of U.S. 


overseas. State has enhanced security at 

existing facilities but needs to

continue to replace many embassies and consulates 

that are not set back

far enough from busy city streets and/or are 

not sufficiently blast


• Strengthening the visa process as an 

antiterrorism tool. Visa

policy and procedures are inconsistent among 

overseas consular posts,

and staff at many posts are inadequately 

trained. Eliminating the Visa

Waiver Program could require increased overseas 

staffing and facilities.

• Continuing to rightsize embassy staffing 

levels. Assessing staffing

needs is essential for State to ensure the 

security and effectiveness of

overseas missions and determine the 

appropriate size and cost of new

facilities. To help achieve a rightsized 

overseas presence, State and the

Office of Management and Budget are using 

a framework proposed by

GAO that addresses the mission, security, 

and costs of overseas posts as

well as staffing alternatives.

• Better managing human capital. Although 

State has made progress in

recruiting new hires, providing leadership 

and management skills

training, planning its workforce needs, 

correcting foreign language

shortfalls, and staffing hardship posts, 

further improvements are needed.

• Help to reduce illegal drugs entering 

the United States.

Despite arrests of drug traffickers and 

seizures of large amounts of

drugs, the availability of illicit drugs 

in the United States has not been

materially reduced.

• Addressing additional challenges to 

building a highperforming

organization. State has worked to enhance 


technology and security, strengthen 

financial management, and improve

performance planning. However, challenges 


What Remains to Be Done:

GAO believes that State should

• continue to improve security

at overseas posts, primarily by

replacing about 180 facilities

where security is inadequate;

• strengthen the visa process by,

among other things, developing

clear guidance and policy;

• address staffing shortages at

hardship posts; and

• continue to work on other

challenges involving rightsizing

the U.S. presence overseas, U.S.

drug eradication assistance,

financial management,

information technology and

performance planning.

To view the full report, click on the link above.

For more information, contact Jess T. Ford at

(202) 512-4268 or


Transmittal Letter:

Major Performance and Accountability Challenges:

GAO Contacts:

Related GAO Products:

Performance and Accountability and High-Risk Series:

This is a work of the U.S. Government and is not 

subject to copyright 

protection in the United States. It may be 

reproduced and distributed 

in its entirety without further permission from GAO. 

It may contain 

copyrighted graphics, images or other materials. 

Permission from the 

copyright holder may be necessary should you wish 

to reproduce 

copyrighted materials separately from GAO’s product.

Transmittal Letter January 2003:

The President of the Senate

The Speaker of the House of Representatives:

This report addresses the major management challenges and program risks 

facing the Department of State as it works to carry out its multiple 

and highly diverse missions. The report discusses the actions State has 

taken and that are under way to address the challenges GAO identified 

in its Performance and Accountability Series 2 years ago, and major 

events that have occurred that significantly influence the environment 

in which the department carries out its mission. Also, GAO summarizes 

the challenges that remain and further actions that GAO believes are 


This analysis should help the new Congress and the administration carry 

out their responsibilities and improve government for the benefit of 

the American people. For additional information about this report, 

please contact Jess T. Ford, Director, International Affairs and Trade, 


(202) 512-4268 or

David M. Walker

Comptroller General 

of the United States:

Signed by David M. Walker:

[End of section]

Major Performance and Accountability Challenges:

In our January 2001 report,[Footnote 1] we reported that the Department 

of State faced three major performance and accountability challenges: 

(1) enhancing embassy security, (2) providing expeditious visa 

processing while preventing the entry of those who threaten U.S. 

security or who are likely to remain in the United States illegally, 

and (3) helping reduce the flow of illegal drugs into the United 

States. We also reported that State was facing a number of additional 

challenges that hamper its ability to become a high-performing 

organization. Specifically, State needed to better use the Government 

Performance and Results Act (Results Act) process to help fulfill the 

agency’s overall mission, policy, and operational objectives; enhance 

its communications and information technology and computer systems 

security; improve financial management capabilities; address human 

capital issues such as workforce planning; and determine the optimal 

size and composition of overseas posts (a process known as 


Since our January 2001 report, one major event occurred--the September 

11, 2001, terrorist attacks--that affected the conduct of State’s 

multiple functions and activities. The September 11 attacks and the 

subsequent attacks and threats against U.S. facilities overseas have 

had an impact on such areas as the visa issuance process, the security 

provided to U.S. facilities and personnel overseas, and the language 

training offered State Department officials. Because all 19 of the 

September 11 terrorist hijackers had been issued visas, State and other 

agencies have introduced changes to strengthen the visa process, 

including adding to its name-check system more names and information on 

persons who should not receive a visa. State also has increased its 

worldwide efforts to keep its facilities and personnel safe from 

terrorist attack and has increased efforts to improve staff skills in 

languages such as Arabic.

Furthermore, since our January 2001 report, State has taken other steps 

to address some of the specific performance and management challenges 

that we previously reported. For example, State has developed a long-

range overseas building plan to guide its effort to replace about 180 

facilities overseas that have inadequate security. State also has 

begun, in conjunction with the Office of Management and Budget (OMB), a 

process to rightsize the U.S. presence overseas, particularly at its 

new facilities. While this report does not include new management 

challenges, it does address important major issues with the challenges 

we previously identified. Specifically, the performance and 

accountability challenges that State continues to face are as follows:

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Improve the Security and Maintenance of U.S. Facilities Overseas:

Protecting U.S. embassies and consulates, especially the employees and 

their families, from terrorist attacks continues to be a critical 

management issue; as we reported in 2001, it may be the most important 

management issue that State faces. The August 1998 bombings of the U.S. 

embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, followed by 

the September 11 attacks and subsequent threats to U.S. interests 

overseas, have brought into focus the seriousness of this continuing 

security challenge. Shortly after the 1998 embassy bombings, State 

determined that it needed not only to enhance security at all existing 

facilities but, in the long term, that it needed to replace more than 

180 embassies and consulates to improve security, a program it has 

begun. State also has better identified its facility maintenance 

requirements and has begun to address these needs.

Security Enhancements:

State has continued its efforts, begun immediately after the 1998 

embassy bombings, to upgrade security at U.S. embassies and consulates 

around the world. Actions to improve security have included additional 

guards, hostile surveillance detection programs, the use of bomb 

detection equipment and metal detectors, enhanced camera surveillance, 

fully armored vehicles, improved computer technology, and in-country 

security training. In addition, a number of perimeter security 

enhancements have been installed, including antiram exterior walls that 

are designed to prevent vehicle penetration, compound access and public 

access control facilities at the perimeter wall and building entrance, 

bollards, shatter-resistant window film, forced-entry doors and 

windows, and exterior lighting. Figure 1 shows perimeter security 

enhancements built since the 1998 bombings at the U.S. Embassy in the 

Republic of Djibouti. The entrance building, where visitors are 

admitted; the vehicle gate; and the concrete barriers were all added as 

part of this program.

Figure 1: Security Enhancements at the Front Entrance to the U.S. 

Embassy in the Republic of Djibouti:

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Although State has made these improvements and is continually seeking 

new ways to enhance security, fundamental challenges remain. The major 

challenge is that many diplomatic facilities do not provide sufficient 

setback from busy city streets and/or are not sufficiently blast-

resistant. Therefore, they do not meet U.S. government security 

standards. State’s Inspector General has determined that at most of the 

overseas embassies it has inspected since September 11, security could 

easily become a problem. In many cases, the only option for providing 

adequate security is to replace the facilities. This will require 

significant additional resources and successful implementation of key 

management initiatives.

Embassy and Consulate Construction:

Since the 1998 embassy bombings, State has embarked on the largest 

overseas embassy construction program in its history. State estimated 

that $16 billion or more might eventually be needed for facility 

replacement projects.

To guide decision-making and implementation of this building program, 

State prepared a long-range overseas building plan in mid-2001 and 

issued an updated plan in 2002 that covers the first part of this 

replacement program.[Footnote 2] State is using the plan, which covers 

fiscal years 2002-07, as a tool to inform those involved in the budget 

decision-making process. According to State, the plan provides the 

department’s most comprehensive listing of the U.S. government’s most 

urgent overseas diplomatic and consular facility needs. The plan 

encompasses more than 70 security capital projects, valued at more than 

$6.2 billion, and other regular capital, rehabilitation, and 

maintenance and repair needs totaling more than $2.5 billion. Each year 

the plan will be rolled forward to reflect changes in requirements.

State further noted that it has instituted fundamental reforms and 

operational changes in its construction program, including cutting 

costs of planned construction projects, using standard designs, and 

reducing construction duration through a “fast track” process. For 

example, State’s cost-cutting efforts in 4 of its initial projects 

allowed it to avoid about $90 million in costs. In addition, State has 

established an industry advisory panel to assist in planning and 

designing new diplomatic facilities. Industries represented on the 

panel include construction, architecture and engineering, facilities 

operations and maintenance, and environmental management.

As of December 2002, State had completed 3 embassy security 

construction projects. Two more, in Nairobi, Kenya, and Dar es Salaam, 

Tanzania, which were the targets of the 1998 bombings, are scheduled to 

be opened in January 2003 with one additional embassy and one consulate 

scheduled to open in April 2003. State’s Bureau of Overseas Buildings 

Operations (OBO) has awarded design/build contracts for 14 additional 

projects. Figure 2 shows the new embassy in Doha, Qatar. Figure 3 shows 

the embassy, in Tunis, Tunisia, which was opened in November 2002, and 

figure 4 shows the consulate building in Istanbul, Turkey, which is 

under construction.

Figure 2: New U.S. Embassy Building in Doha, Qatar:

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Figure 3: Recently Completed Embassy Building in Tunis, Tunisia:

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Figure 4: Consulate Building under Construction in Istanbul, Turkey:

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State will face three continuing challenges throughout the life of this 

construction program. These challenges are determining the appropriate 

size of each new facility, meeting construction schedules within 

estimated costs, and ensuring that State has the internal capacity to 

manage a large number of projects.

Facility Maintenance:

Our work, as well as that of State’s Inspector General, has shown that 

facility maintenance has presented a long-standing infrastructure 

challenge for the department. In the early 1990s, we put State’s 

management of overseas real property on the high-risk list, partly 

because facilities had not been sufficiently maintained. The principal 

causes of these problems were lack of funding, lack of professional 

attention to maintenance needs at the post level, and lack of programs 

for maintenance and repair. We removed this function from the high-risk 

list in 1995 because State had surveyed maintenance conditions overseas 

and made some improvements. The Inspector General had stated in 1999 

that funding was part of the problem, but it also reported that the 

department needed to do more to address its maintenance and repair 

problems as a management concern.

OBO has made a concerted effort over the last 2 years to identify and 

reduce the maintenance backlog. To identify its maintenance 

requirements, State is performing global condition surveys (conducted 

about every 5 years); annual facility inspections conducted by each 

post; and fire safety, roof, environmental health and safety, and other 

specialized inspections as well as considering recommendations made by 

the posts. In addition, State is using a computerized database that 

tracks maintenance requirements by post, the type of work needed, and 

projected funding.

As of May 2002, OBO had identified a backlog of more than $735 million 

in maintenance and repair requirements. OBO has begun funding more than 

$184 million in projects to reduce this backlog (the projects included 

electrical upgrades, roof replacements, and fire safety improvements 

such as sprinkler installation and fire alarm system installation), 

leaving more than $550 million in unfunded requirements. About 55 

percent of the backlog is for general maintenance and repair 

requirements, and 35 percent is for fire prevention and safety 

requirements; the remainder is for energy retrofitting, installing 

generators and providing uninterrupted power sources, and other 

projects. Given the deteriorated condition of many of its facilities, 

reducing the maintenance backlog will be a continuing challenge. OBO 

hopes to receive sufficient funding over the next several years to 

eliminate the backlog.

Strengthen the Visa Process as an Antiterrorism Tool:

Because all 19 of the September 11, 2001, terrorist hijackers were 

issued visas, strengthening the visa function as an antiterrorism tool 

has taken on great significance. In deciding who should and should not 

receive a visa,[Footnote 3] State must balance the need to facilitate 

legitimate travel with the need to protect the United States against 

potential terrorists and to deter others whose entry is considered 

likely to threaten U.S. national interests.[Footnote 4] Prior to the 

terrorist attacks of September 11, State’s visa operations focused 

primarily on screening applicants to determine whether they intended to 

work or reside illegally in the United States. Consular officers were 

encouraged to facilitate legitimate travel and, at some posts, faced 

pressures to issue visas. State acknowledges the need to strengthen the 

visa process.

Since the September 11 attacks, the U.S. government has introduced some 

changes to strengthen the visa process. For example, State has, with 

the help of other agencies, almost doubled the names and information on 

persons in the lookout system.[Footnote 5] In addition, State began 

seeking new or additional interagency clearances on selected applicants 

to screen out terrorists, although checks were not always being 

completed in a thorough or timely manner. Although these actions have 

strengthened the visa process, opinions and practices among and within 

overseas posts continue to diverge regarding the authority of consular 

officers to deny questionable applicants a visa and the role of the 

visa process in ensuring national security. Similarly, opinions and 

practices differ regarding the appropriate changes to individual posts’ 

visa policies and procedures that need to be made given the need for 

heightened border security. Figure 5 shows an example of a U.S. visa.

Figure 5: Example of a U.S. Visa:

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[End of figure] - graphic text:

Although we recognize in our October 2002 report[Footnote 6] that the 

establishment of the proposed Department of Homeland Security could 

affect the roles and responsibilities of various entities involved in 

visa processing, we recommended that State take actions to strengthen 

this process because it is currently responsible for visa operations. 

These recommendations focus on urgent and fundamental operational 

issues. We recommended that the Secretary (1) develop a clear policy on 

the priority attached to addressing national security concerns 

connected with the visa process, (2) develop more comprehensive 

guidance on how posts should use the visa process to screen against 

potential terrorists, (3) assess staffing requirements for visa 

operations, and (4) expand consular training. To address visa issues 

requiring coordination and actions across several agencies, we also 

recommended that the Assistant to the President for Homeland Security 

coordinate with State and other appropriate agencies to (1) establish a 

governmentwide policy on the level of evidence needed to deny a visa on 

terrorism grounds, (2) reassess the various agency security checks on 

visa applicants performed at their headquarters to verify that all are 

necessary and are carried out promptly, (3) reexamine visa operations 

on a regular basis to ensure that the operations are effectively 

contributing to the overall national strategy for homeland security, 

(4) ensure that intelligence and law enforcement agencies share 

information with State on persons who should not receive visas, and (5) 

consider reassessing previously issued visas for selected categories of 

applicants who may pose security risks. State indicated that it would 

use our recommendations as a roadmap for improvement within the Bureau 

of Consular Affairs as well as in consular sections around the world. 

It stated it has taken steps to implement a number of these 

recommendations, including the first two addressed to the Secretary of 

State, and plans to work closely with the Department of Homeland 

Security, once established, and other security agencies to implement 

other recommendations. For example, State is preparing new guidance for 

visa processing that the department believes will provide greater 

worldwide uniformity in the visa process. In addition, State said it 

added new consular positions in fiscal year 2002 and has improved its 

consular officer training by adding components on counter-terrorism 

trends and visa fraud and malfeasance.

As part of its efforts to strengthen the visa process, the 

administration is reviewing the use of the Visa Waiver Program[Footnote 

7] because some have expressed concern that terrorists or other 

criminals may exploit it to enter the United States. If countries are 

removed from this program or if it is terminated, State would face a 

number of management challenges concerning how to handle the increased 

visa processing workload. State estimated that if the program were 

eliminated, it could take 2 to 4 years to put the necessary people in 

place to handle the increased workload. We estimated that the initial 

costs of this effort would likely range between $739 million and $1.28 

billion, depending on the percentage of the visa applicants 

interviewed.[Footnote 8] Furthermore, the decision to eliminate the 

program could negatively effect U.S. relations with participating 

countries and U.S. tourism and business.

Continue and Enhance the Process of Rightsizing Embassy Staffing 


Since the 1998 terrorist bombings of two U.S. embassies in Africa, 

which resulted in more than 220 deaths and 4,000 injuries, there have 

been recurring calls to rightsize the number and location of staff at 

U.S. diplomatic facilities. The administration showed its support for 

such efforts in the August 2001 President’s Management Agenda by 

directing all agencies overseas to rightsize their presence. OMB and 

State, in coordination with other U.S. agencies operating overseas, are 

working to develop a process for the rightsizing of U.S. embassies. 

Given the high costs of maintaining more than 60,000 Americans and 

foreign nationals overseas and the continuing security vulnerabilities 

of Americans worldwide, the administration’s rightsizing initiatives 

aim to reconfigure U.S. overseas staff to the minimum number necessary 

to meet U.S. foreign policy goals.

In July 2002, we issued a report[Footnote 9] recommending the adoption 

of a general framework for rightsizing that addresses security, agency 

mission, and cost considerations, and we have recommended that this 

framework be used in formulating the government’s approach to 

rightsizing (see fig. 6). Our framework provides a systematic approach 

for assessing overseas workforce size and identifying rightsizing 

options at the embassy level and for making related decisions 

worldwide. By systematically developing information on security, agency 

mission, and cost factors at embassies and consulates, decision-makers 

could then better determine if rightsizing actions are needed either to 

add or reduce staff or to change the staff mix at an embassy or 


Figure 6: Framework for Embassy Rightsizing:

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Options for reducing staff overseas could include relocating functions 

to the United States or to regional centers and outsourcing functions. 

Our analysis of the U.S. embassy in Paris demonstrated the framework’s 

viability by highlighting security concerns that may warrant staff 

reductions and by identifying options for relocating some staff to the 

United States and other locations in Europe.

Rightsizing is directly related to embassy security and construction. 

If there are opportunities to reduce the number of people stationed 

overseas in vulnerable facilities, the number of people at risk can be 

reduced. Rightsizing also affects the size and cost of new, secure 

diplomatic facilities to be constructed. Therefore, it is critical that 

State and other agencies comprehensively consider rightsizing elements 

and options in determining overseas staffing requirements.

State and OMB testified in May 2002 that they support the development 

of a rightsizing framework, and they outlined their plans to proceed 

with the rightsizing initiative. Both agencies are working together to 

establish a rightsized, regional presence in Frankfurt. In addition, 

the agencies are undertaking an examination of overseas posts in Europe 

and Eurasia. To aid both efforts, OMB, in coordination with State, 

recently sent questionnaires to all chiefs of mission and agency heads 

at posts within this bureau to obtain information on each post’s 

mission priorities and requirements, operational costs, mission 

security, and real estate. OMB’s questionnaire reflects the use of our 


Better Manage Human Capital:

In January 2001, we designated strategic human capital management as a 

governmentwide high-risk area. We stated that this area needs urgent 

attention to ensure that our national government functions in the most 

economical, efficient, and effective manner possible to ensure maximum 

performance and accountability for the benefit of the American public. 

Since January 2001, State has directed significant attention to 

managing its human capital in an effort to address the workforce and 

staffing issues that have been noted in numerous reports and studies. 

State’s human capital efforts have focused on three main areas: 

recruitment, training in leadership and management skills, and 

workforce planning. In addition, in response to management challenges 

that we and State’s Inspector General identified, State has begun to 

address the staffing shortages at hardship posts and correct foreign 

language shortfalls. However, State’s objective to effectively manage 

its human capital remains a significant challenge.

In June 2002, we reported[Footnote 10] that because State is 

understaffed relative to its permanent positions, it is difficult for 

the department to ensure that it has the right people in the right 

place at the right time. Moreover, State’s assignment system is not 

effectively meeting the staffing needs of hardship posts, including 

some of strategic importance to the United States. Because few 

employees bid on positions at some hardship posts, State has difficulty 

filling these positions. As a result, diplomatic programs and 

management controls at hardship posts could be vulnerable and posts’ 

ability to carry out U.S. foreign policy objectives effectively could 

be weakened. We recommended that the Secretary of State improve State’s 

human resources data, determine staffing priorities, consider a 

targeted hiring strategy, and develop incentives and implement actions 

to steer Foreign Service employees toward serving in hardship posts. 

Figure 7 identifies the countries for which the most and fewest 

employees bid on assignments.

Figure 7: Countries with the Most and Fewest Bids on Assignments:

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Note: GAO analysis of State Department data.

State believes that the Diplomatic Readiness Initiative--a plan to hire 

1,158 people above attrition over 3 years, which is a major thrust of 

State’s human capital efforts--will address the department’s staffing 

shortfalls. Underpinning the 3-year initiative is a workforce planning 

system that estimates State’s staffing requirements.[Footnote 11] In 

the first year of the initiative, the department met its hiring goals, 

doubling the number of junior officers that it had hired the previous 

year. Handling the influx of newly hired Foreign Service officers could 

pose assignment, training, and mentoring challenges as State seeks to 

offer these employees challenging, rewarding careers while meeting 

critical service needs. State also has placed increased emphasis on 

developing the leadership and management skills of its workforce, 

producing a comprehensive curriculum to develop these skills throughout 

a typical career.

In addition, State has begun to take actions--along the lines that we 

recommended in our June 2002 report--that focus on meeting the staffing 

needs of hardship posts. These actions include revising its assignment 

system in an effort to ensure adequate staffing at hardship posts. The 

revised system will assign employees to hardship posts first, 

effectively prioritizing those posts by ensuring that most nonhardship 

posts and domestic offices will not be able to compete with hardship 

posts for employees. Moreover, the department continues to see positive 

results from its Service Need Differential Program, which provides a 

financial incentive for longer tours of service at hardship posts. More 

than half of the eligible positions are filled with employees who 

signed up for a 3-year tour, rather than the minimum 2-year tour. The 

department also is exploring other incentives to entice more employees 

to bid on assignments at hardship posts.

In a January 2002 report,[Footnote 12] we described State’s need to 

better address current and projected shortages in foreign language 

skills. To address its foreign language shortfalls, State plans to 

provide more opportunities for language training as it hires more 

people. According to State, language training hours rose about 12 

percent, reflecting efforts since the terrorist attacks on September 

11, 2001, to develop staff language skills, particularly in Arabic, 

Pashtu, Farsi, and Urdu. Currently, more than 400 employees receive 

language incentive pay through a program designed to encourage 

employees to acquire, maintain, and use language skills that are in 

short supply. In previous reports, we noted that State had difficulty 

generating a consistent global aggregate measure of its actual language 

shortfalls because of inadequate departmentwide data on the number of 

positions filled with qualified staff. State is in the process of 

correcting this deficiency.

Help to Reduce Illegal Drugs Entering the United States:

Illicit drugs, primarily cocaine and heroin, continue to threaten the 

health and well-being of American citizens. The principal source of 

cocaine and heroin entering the United States is South America--

especially Colombia. In 1993, the United States developed a policy 

designed to reduce the production of illicit drugs in South America and 

stem the flow of drugs through Central America and the Caribbean before 

they reach the United States. Our work has shown that the billions of 

dollars invested by the United States and foreign countries to carry 

out this policy have resulted in the arrest of major drug traffickers 

and the seizure of large amounts of drugs. However, the availability of 

drugs in the United States has not been materially reduced.

To continue to attack this problem, in July 2000, the United States 

agreed to provide about $860 million to Colombia for fiscal years 2000-

01. This amount includes more than $640 million, largely administered 

by the State Department, for helicopters and other equipment and for 

training Colombia’s military and national police. Figure 8 shows one of 

the helicopters operating in Colombia that was provided by the U.S. 


Figure 8: Helicopter provided to Colombia by the U.S. Government:

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State’s Office of Aviation oversees the department’s contract to 

provide support services for State’s counternarcotics program in the 

Andean region. Although the Office of Aviation ensured that its 

contractor-run aviation program operates safely and is physically 

secure, we reported that it can do more.[Footnote 13] We noted several 

matters of concern that had not been resolved, including forward 

operating locations in Colombia do not have emergency vehicles; manuals 

for certain eradication aircraft do not reflect modifications to the 

aircraft; and the airfield at one forward operating location and the 

Office of Aviation’s headquarters office in Colombia were not secure. 

To improve the safety and security of its aviation program, we 

recommended that the Secretary of State ensure that the Bureau for 

International Narcotics and Law Enforcement Affairs follows up on the 

concerns identified in recent reviews and either complete action to 

address them or document why it should not.

In a closely allied effort, the U.S. Agency for International 

Development (USAID) has provided assistance to help growers of illicit 

crops find legal means of earning a living. In recent years, these 

activities--termed alternative development--together with U.S.-

supported interdiction and eradication programs greatly reduced the 

amount of coca grown in Bolivia and Peru. Meanwhile, coca cultivation 

and cocaine production increased substantially in Colombia, making it 

the world’s leader in both areas. USAID began targeting Colombia’s 

poppy-growing areas in 2000 and expanded its program to include coca-

growing areas in 2001. However, we reported that USAID faced serious 

obstacles to achieving progress in Colombia, and the experiences in 

Bolivia and Peru strongly suggested that alternative development in 

Colombia would not succeed unless the obstacles are overcome.[Footnote 

14] Among them, the Colombian government does not control many coca-

growing areas, it has limited capacity to carry out sustained 

interdiction operations, and its ability to effectively coordinate 

eradication and alternative development activities remains uncertain. 

Because of these serious obstacles, we recommended that the 

Administrator, USAID, update USAID’s alternative development project 

plans and spending proposals for Colombia to take into the account the 

extreme difficulty of gaining access to the coca-growing regions. Since 

then, USAID has revamped its alternative development in coordination 

with State, the Bogotá Embassy, and the Colombian government to focus 

its efforts on smaller communities and areas of the country that are 

more accessible.

Although most of this assistance has been delivered, illicit narcotics 

production and trafficking continue largely unabated. In addition, 

insurgents and paramilitary groups continue to control large parts of 

Colombia. In fiscal year 2002, it received more than $380 million in 

U.S. assistance for counternarcotics. For fiscal year 2003, the 

administration has requested from Congress more than $530 million in 

additional assistance--which State will continue to oversee--to address 

many of these same purposes. In recent years, we have reported that 

State has had difficulty effectively managing this assistance and 

demonstrating measurable progress in reducing illicit drug activities 

in Colombia. We also have continued to note that a sustained long-term 

commitment will be necessary to notably reduce the level of illicit 

drugs entering the United States.

Address Additional Challenges to Building a High-Performing 


Because State’s management functions provide the foundation of support 

for U.S. government operations around the world, it is incumbent on the 

department to strive to become a high-performing organization. To do 

so, it needs to choose the best strategies for integrating its 

organizational components, activities, core processes, and resources to 

support mission priorities. In response to concerns that we and the 

Inspector General have raised over the years, State has taken steps to 

(1) enhance its communications and information technology and security, 

including developing a common communications and knowledge-sharing 

system; (2) improve its financial management systems; and (3) better 

utilize its performance planning and reporting in accordance with the 

Results Act.

Enhance Overseas Communication, Information Technology, and 

Information Systems Security:

While State continues to upgrade its information technology 

infrastructure and improve its system capabilities, it lacks the 

ability to share information among agencies at overseas locations. 

Adding to this challenge are computer security concerns identified by 

us and by the independent auditor who reviewed State’s financial 


To improve communications and knowledge management[Footnote 15] and 

sharing among agencies overseas, State has developed a long-term plan 

to acquire and deploy a common knowledge management system that is 

intended to get the right information to the right people at the right 

time. As part of the early phase of this program, State deployed a 

pilot interagency collaboration system to all U.S. diplomatic posts in 

Mexico. It has completed pilot testing this system and will now 

evaluate the results to determine how well the system supports day-to-

day operations and to identify needed modifications. State expects to 

begin acquiring, deploying, and implementing an operational system 

worldwide when additional funding is available.

In November 2001, we reported[Footnote 16] that State’s informal 

management controls would not be sufficient for acquiring and deploying 

the operational system that will perform mission-critical functions. We 

therefore recommended that State establish more rigorous management 

controls, such as a multiagency process for acquiring and deploying the 

operational system. State has not yet implemented our recommendations, 

but it indicated that it plans to do so after completing the pilot and 

before acquiring and deploying the system worldwide. Such controls are 

necessary to ensure that the operational system will deliver needed 

capabilities on time and within budget.

We reported departmentwide computer security as a management challenge 

in 2001[Footnote 17] because information systems security problems that 

we identified in 1998, including access control and security program 

management weaknesses, persisted and posed significant challenges for 

the department. State’s fiscal year 2001 independent auditor’s 

report,[Footnote 18] completed in early 2002, stated that information 

systems security was a material weakness that could be exploited, 

possibly compromising the information State uses to prepare its 

financial statements. The auditor’s report identified significant 

information system security weaknesses that made the department’s 

systems networks for domestic operations vulnerable to unauthorized 

access. It added that although State had implemented the 

recommendations we made in 1998 in fiscal year 2000, this did not 

demonstrate that the material weakness in this area had necessarily 

been corrected.

State subsequently performed additional access control tests that also 

identified significant weaknesses. State also has initiated a program 

to assess its information systems security on a comprehensive basis. 

However, the independent auditor noted in its fiscal year 2001 report 

that State had not tested the systems access control sufficiently 

before completing its work to ensure that this weakness no longer 

existed. Given the auditor’s opinion and the weaknesses that State 

identified, we continue to regard information systems security as a 

management challenge that State must continue to address.

Improve Financial Management Capabilities:

State continued to make progress toward resolving its long-standing 

problems caused by the absence of an effective financial management 

system that can assist managers in making “cost-based” decisions. Since 

fiscal year 1997, State has received unqualified opinions on its 

financial statements. State has steadily improved the timeliness of its 

reporting and, starting with the fiscal year 2000 statements, has met 

the mandated deadlines for submitting its annual financial statements. 

Having also resolved a number of its internal control weaknesses, State 

is proceeding with planned efforts to improve the systems and processes 

it needs to protect its assets and routinely produce timely and 

reliable financial information.

State needs to continue to bring its systems into full compliance with 

federal financial systems requirements. To enhance the ability of its 

officials to make sound decisions that promote effective and efficient 

use of federal funds, State also needs to resolve internal control 

weaknesses to ensure the availability of timely and reliable financial 

information. According to the independent auditor’s report attached to 

State’s Accountability Report for fiscal year 2001, State’s financial 

management systems do not comply with certain laws and regulations, 

including the Chief Financial Officers Act of 1990. The act requires 

the development and maintenance of an integrated accounting and 

financial management system. According to the act, the system should 

provide complete, reliable, and timely information that meets the 

financial information needs of an agency’s management, and it should 

provide a systematic measurement of performance.

Better Utilize Performance Planning and Reporting:

The Results Act provides a framework for resolving management 

challenges and for providing greater accountability of State’s programs 

and operations. As required by the Results Act, State has clearly 

articulated its strategic and diplomatic readiness goals of regional 

security, economic growth, and more. Our review of State’s performance 

plan for 2002 showed a significant improvement over its plan for the 

previous fiscal year. However, State’s annual performance report for 

fiscal year 2000 showed many of the weaknesses that we noted in our 

review of State’s 1999 performance report, particularly a failure to 

show clear progress toward accomplishing performance goals.

State’s fiscal year 2002 performance plan was a significant improvement 

over previous Results Act products. For the 2002 plan, State developed 

a unified, agencywide approach to replace the regional focus it had 

used in the previous year’s plan. This approach resulted in more 

clarity and the elimination of redundant material, and the report more 

clearly linked the various desired outcomes, performance goals, 

strategies, and performance indicators. However, some weaknesses 

remain, such as the output (rather than outcome) orientation of many 

indicators, vague performance targets, and a lack of clear descriptions 

of how State’s efforts relate to the efforts of other agencies and of 

where interagency activity is taking place. State Department officials 

commented that they are making further improvements to the performance 

planning process, including making the performance indicators more 

outcome-oriented and the targets more explicit and outlining the 

resources the department anticipates spending on each strategic goal. 

Some of these improvements are reflected in a recently issued 

performance plan for fiscal year 2003. State said it would be making 

additional improvements in a performance plan and report to be issued 

in early 2003.

From our analysis of State’s fiscal year 2000 performance report, it 

was difficult to determine the level of progress toward accomplishing 

performance goals. Because of a lack of linkages between activity-based 

performance indicators and desired outcomes, the 2000 performance 

report did not always clearly describe what State sought to accomplish. 

Also, as in past years, it failed to report on many indicators 

prescribed by the performance plan for 2000. However, the department 

stated that in the 2002 performance report it would report on every 

indicator. Furthermore, the report did not adequately explain why it 

did not address certain indicators, why expectations were not met on 

others, and what strategies would be used to achieve the unmet and 

unreported targets. As a result, we recommended[Footnote 19] that in 

future years, State report on all performance goals and indicators 

outlined in corresponding performance plans, explain clearly and 

specifically why it did not achieve goals and targets, and discuss 

actions that it will take to achieve the unmet goals.

State agreed with our assessment and has since made strides in 

addressing our recommendation. For its 2001 performance report, State 

made a greater effort to report on all indicators for the performance 

goals outlined in its 2001 performance plan. In addition, State made a 

greater effort to discuss the reasons why it did not meet some 

performance targets and the strategies it would use to reach these 

goals. Probably because of the vague performance goals and targets set 

in the performance plan for 2001, the information that State reported 

for some targets is still insufficient to assess its progress toward 

achieving its goals.

[End of section]

GAO Contacts:

Subject(s) covered in this report: Improve the security and maintenance 

of U.S. facilities overseas; ; Strengthen the visa process as an 

antiterrorism tool; ; Continue and enhance the process of rightsizing 

embassy staffing levels; ; Better manage human capital; ; Help reduce 

illegal drugs entering the United States; ; Better utilize performance 

planning and reporting; Contact person: Jess T. Ford, Director; 

International Affairs and Trade; (202) 512-4268;

Subject(s) covered in this report: Enhance overseas communication and 

information technology; Contact person: Joel C. Willemssen, Managing 

Director; Information Technology; (202) 512-6408;

Subject(s) covered in this report: Enhance information systems 

security; Contact person: Robert F. Dacey, Director; Information 

Technology; (202) 512-3317;

Subject(s) covered in this report: Improve financial management 

capabilities; Contact person: Gregory D. Kutz, Director; Financial 

Management and Assurance; (202) 512-9095;

[End of section]

Related GAO Products:

Overseas Security, Presence, and Facilities:

Overseas Presence: Framework for Assessing Embassy Staff Levels Can 

Support Rightsizing Initiatives. GAO-02-780. Washington, D.C.: July 26, 


Current Law Limits the State Department’s Authority to Manage Certain 

Overseas Properties Cost Effectively. GAO-02-790R. Washington, D.C.: 

July 11, 2002.

State Department: Sale of Unneeded Overseas Property Has Increased, but 

Further Improvements Are Necessary. GAO-02-590. Washington, D.C.: June 

11, 2002.

Overseas Presence: Observations on a Rightsizing Framework.

GAO-02-659T. Washington, D.C.: May 1, 2002.

Overseas Presence: More Work Needed on Embassy Rightsizing.

GAO-02-143. Washington, D.C.: November 27, 2001.

State Department: Decision to Retain Embassy Parking Lot in Paris, 

France, Should Be Revisited. GAO-01-477. Washington, D.C.: April 13, 


Embassy Construction: Better Long-Term Planning Will Enhance Program 

Decision-making. GAO-01-11. Washington, D.C.: January 22, 2001.

State Department: Overseas Emergency Security Program Progressing, but 

Costs Are Increasing. GAO/NSIAD-00-83. Washington, D.C.: March 8, 2000.

Visa Issuance:

Border Security: Implications of Eliminating the Visa Waiver Program. 

GAO-03-38. Washington, D.C.: November 22, 2002.

Border Security: Visa Process Should Be Strengthened as an 

Antiterrorism Tool. GAO-03-132NI. Washington, D.C.: October 21, 2002.

Visa Issuance: Observations on the Issuance of Visas for Religious 

Workers. GAO/T-NSIAD-00-207. Washington, D.C.: June 29, 2000.

Drug Control:

Drug Control: Efforts to Develop Alternatives to Cultivating Illicit 

Crops in Colombia Have Made Little Progress and Face Serious Obstacles.

GAO-02-291. Washington, D.C.: February 8, 2002.

Drug Control: State Department Provides Required Aviation Program 

Oversight, but Safety and Security Should Be Enhanced. GAO-01-1021. 

Washington, D.C.: September 14, 2001.

Drug Control: U.S. Assistance to Colombia Will Take Years to Produce 

Results. GAO-01-26. Washington, D.C.: October 17, 2000.

Drug Control: Challenges in Implementing Plan Colombia. GAO-01-76T. 

Washington, D.C.: October 12, 2000.

Drug Control: U.S. Efforts in Latin America and the Caribbean. GAO/

NSIAD-00-90R. Washington, D.C.: February 18, 2000.

Human Capital Management:

State Department: Staffing Shortfalls and Ineffective Assignment System 

Compromise Diplomatic Readiness at Hardship Posts. GAO-02-626. 

Washington, D.C.: June 18, 2002.

Foreign Languages: Human Capital Approach Needed to Correct Staffing 

and Proficiency Shortfalls. GAO-02-375. Washington, D.C.: January 31, 


Information Management:

Information Technology: State Department Led Overseas Modernization 

Program Faces Management Challenges. GAO-02-41. Washington, D.C.: 

November 16, 2001.

Electronic Signature: Sanction of the Department of State’s System. 

GAO/AIMD-00-227R. Washington, D.C.: July 10, 2000.

Foreign Affairs: Effort to Upgrade Information Technology Overseas 

Faces Formidable Challenges. GAO/T-AIMD/NSIAD-00-214. Washington, 

D.C.: June 22, 2000.

Strategic and Performance Planning and Foreign Affairs Management:

Department of State: Status of Achieving Key Outcomes and Addressing 

Major Management Challenges. GAO-02-42. Washington, D.C.: December 7, 


Performance and Accountability Series: Major Management Challenges and 

Program Risks, Department of State. GAO-01-252. Washington, D.C.: 

January 2001.

Observations on the Department of State’s Fiscal Year 1999 Performance 

Report and Fiscal Year 2001 Performance Plan. GAO/NSIAD-00-189R. 

Washington, D.C.: June 30, 2000.

[End of section]

Performance and Accountability and High-Risk Series:

Major Management Challenges and Program Risks: A Governmentwide 

Perspective. GAO-03-95.

Major Management Challenges and Program Risks: Department of 

Agriculture. GAO-03-96.

Major Management Challenges and Program Risks: Department of Commerce. 


Major Management Challenges and Program Risks: Department of Defense. 


Major Management Challenges and Program Risks: Department of Education. 


Major Management Challenges and Program Risks: Department of Energy. 


Major Management Challenges and Program Risks: Department of Health and 

Human Services. GAO-03-101.

Major Management Challenges and Program Risks: Department of Homeland 

Security. GAO-03-102.

Major Management Challenges and Program Risks: Department of Housing 

and Urban Development. GAO-03-103.

Major Management Challenges and Program Risks: Department of the 

Interior. GAO-03-104.

Major Management Challenges and Program Risks: Department of Justice. 


Major Management Challenges and Program Risks: Department of Labor. 


Major Management Challenges and Program Risks: Department of State. 


Major Management Challenges and Program Risks: Department of 

Transportation. GAO-03-108.

Major Management Challenges and Program Risks: Department of the 

Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of Veterans 

Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for 

International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental Protection 

Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency 

Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National Aeronautics and 

Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel 

Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business 

Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security 

Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service. 


High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the Federal 

Government and the Nation’s Critical Infrastructures. GAO-03-121.

High-Risk Series: Federal Real Property. GAO-03-122.


[1] U.S. General Accounting Office, Major Management Challenges and 

Program Risks: Department of State, GAO-01-252 (Washington, D.C.: 

January 2001).

[2] State expects to release the next updated plan in February 2003.

[3] State issued 7.6 million nonimmigrant visas in fiscal year 2001; 

another 1.1 million people were granted immigrant status. In addition, 

during each of the last 3 fiscal years, there were more than 16 million 

admissions (this figure does not include Canada) into the United States 

of citizens from visa waiver countries for which a visa was not 


[4] A primary role of the Immigration and Naturalization Service is to 

determine at the port of entry whether the visa holder is to be 

admitted to the United States and, if so, how long he or she may remain 

in the country.

[5] In deciding who should receive a visa, State relies on its consular 

“lookout” system, a name-check system that incorporates information 

from many agencies, as the primary basis for identifying potential 


[6] U.S. General Accounting Office, Border Security: Visa Process 

Should Be Strengthened as an Antiterrorism Tool, GAO-03-132NI 

(Washington, D.C.: Oct. 21, 2002).

[7] Under the Visa Waiver Program, citizens of 28 countries are not 

required to obtain a visa to enter the United States for visits of less 

than 90 days.

[8] U.S. General Accounting Office, Border Security: Implications of 

Eliminating the Visa Waiver Program, GAO-03-38 (Washington, D.C.: Nov. 

22, 2002).

[9] U.S. General Accounting Office, Overseas Presence: Framework for 

Assessing Embassy Staff Levels Can Support Rightsizing Initiatives, 

GAO-02-780 (Washington, D.C.: July 26, 2002).

[10] U.S. General Accounting Office, State Department: Staffing 

Shortfalls and Ineffective Assignment System Compromise Diplomatic 

Readiness at Hardship Posts, GAO-02-626 (Washington, D.C.: June 18, 


[11] This workforce planning system, developed by State, includes an 

overseas staffing model (already in use) to predict post staffing 

requirements and a domestic staffing model that is nearing completion.

[12] U.S. General Accounting Office, Foreign Languages: Human Capital 

Approach Needed to Correct Staffing and Proficiency Shortfalls, GAO-02-

375 (Washington, D.C.: Jan. 31, 2002).

[13] U.S. General Accounting Office, Drug Control: State Department 

Provides Required Aviation Program Oversight, but Safety and Security 

Should Be Enhanced, GAO-01-1021 (Washington, D.C.: Sept. 14, 2001).

[14] U.S. General Accounting Office, Drug Control: Efforts to Develop 

Alternatives to Cultivating Illicit Crops in Colombia Have Made Little 

Progress and Face Serious Challenges, GAO-02-291 (Washington, D.C.: 

Feb. 8, 2002).

[15] Knowledge management involves the use of business processes and 

intellectual and technological assets to promote and provide for 

collaboration and information exchange.

[16] U.S. General Accounting Office, Information Technology: State 

Department Led Overseas Modernization Program Faces Management 

Challenges, GAO-02-41 (Washington, D.C.: Nov. 16, 2001).

[17] GAO-01-252.

[18] U.S. Department of State, Accountability Report Fiscal Year 2001 

(Washington, D.C.: February 2002). The independent auditor’s report is 

included in State’s Accountability Report.

[19] U.S. General Accounting Office, Department of State: Status of 

Achieving Key Outcomes and Addressing Major Management Challenges, GAO-

02-42 (Washington, D.C.: Dec. 7, 2001).

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