Embassy Contracting: State Department Efforts To Terminate Employee Association Contracts
NSIAD-88-85
Published: Feb 16, 1988. Publicly Released: Mar 17, 1988.
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Highlights
In response to a congressional request, GAO reviewed the Department of State's efforts to convert service contracts between U.S. embassies and their employee associations to commercial or U.S. embassy personal service contracts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of State | The Secretary of State should direct State and post officials to recover and return to the U.S. Treasury all appropriated funds the associations received to cover the contingent severance liability for those who were subsequently converted to U.S. embassy personal service contracts. |
State believes: (1) appropriated funds used to establish severance reserves can only be used to liquidate severance liabilities as they become payable in the future; and (2) any local reserves found to be in excess of amounts actually needed to fund all outstanding severance liabilities must be returned to the U.S. Treasury. Posts have been advised and directed to collect excess reserves.
|
| Department of State | The Secretary of State should direct State and post officials to enforce State regulations that require employee associations to establish contingent liability reserves to cover severance benefits. |
Under newly adopted procedures, State is now requiring employee associations to submit their operating procedures to the Department for approval. The procedures call for the associations to meet a number of specific criteria. The procedures are now in place to enforce Department regulations that require associations to establish liability reserves to cover severance benefits, according to State.
|
| Department of State | The Secretary of State should direct State and post officials to obtain from the four involved associations formal commitments to repay the $229,000 provided by State's Diplomatic Security Bureau. |
State lacks a legal basis for recovering funds, since funding for creating the reserves was not specifically provided by USG during the course of the contract.
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Topics
Americans employed abroadCost analysisEmbassiesEmployee dismissalFunds managementService contractsSeverance payEmbassiesAppropriated fundsProcurement