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State Department: Overseas Staffing Process Not Linked to Policy Priorities

(Letter Report, 09/20/94, GAO/NSIAD-94-228)


In staffing its overseas posts, the State Department does not use an
objective, quantifiable methodology that ranks posts on the basis of
U.S. foreign policy priorities. Several internal State Department
studies since 1988 have expressed concern about this situation. Senior
State officials have acknowledged that the current personnel resources
planning and allocation processes fail to adequately link personnel
resources with policy priorities. This report discusses State's efforts
to improve this process and the process State used to identify the 17
posts to close in 1993 and 1994.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-228
     TITLE:  State Department: Overseas Staffing Process Not Linked to 
             Policy Priorities
      DATE:  09/20/94
   SUBJECT:  Americans employed abroad
             Personnel management
             International relations
             Diplomats
             Foreign policies
             Human resources utilization
             Agency missions
             Labor force
             Productivity
IDENTIFIER:  National Performance Review
             
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Cover
================================================================ COVER


Report to the Chairman, Legislation and National Security
Subcommittee, Committee on Government Operations, House of
Representatives

September 1994

STATE DEPARTMENT - OVERSEAS
STAFFING PROCESS NOT LINKED TO
POLICY PRIORITIES

GAO/NSIAD-94-228

State Department


Abbreviations
=============================================================== ABBREV


Letter
=============================================================== LETTER


B-257742

September 20, 1994

The Honorable John Conyers, Jr.
Chairman, Legislation and National
 Security Subcommittee
Committee on Government Operations
House of Representatives

Dear Mr.  Chairman: 

In response to your request, we are reviewing the Department of
State's staffing of its overseas posts.  As agreed with your office,
this report discusses our evaluation of (1) the process used by State
to determine how many of its U.S.  diplomatic personnel are needed at
each location, (2) State's efforts to improve this process, and (3)
the process State used to identify the 17 posts to close in 1993 and
1994.  We are reporting separately on the costs and numbers of
personnel from all agencies at overseas diplomatic posts and the
overall management weaknesses associated with overseas staffing. 


   BACKGROUND
------------------------------------------------------------ Letter :1

State has approximately 7,200 U.S.  diplomatic personnel overseas,
which is about 38 percent of U.S.  diplomatic presence overseas.\1 In
fiscal year 1993, State's cost of overseas operations was estimated
at $1.5 billion for salaries and associated overseas costs.  The
number of State's U.S.  direct hire personnel at each post can range
from 1 or 2 in small posts such as Apia, Western Samoa, and Belfast,
United Kingdom, to over 100 in large posts such as Paris, France;
Tokyo, Japan; and Bangkok, Thailand.  Staffing levels are determined
through annual budgeting and program planning processes that are
heavily influenced by geographic bureau priorities, with input from
the embassies.  State stations personnel in almost every country with
which the United States has diplomatic relations.  In 1992, to help
finance the opening of 16 posts in the former Soviet Union, State
embarked on a process to identify some posts that could be closed. 


--------------------
\1 This report discusses only U.S.  direct hire staff overseas who
come under Chief of Mission authority.  These figures do not include
foreign service national and contract personnel. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

State does not use an objective, quantifiable methodology that ranks
posts based on U.S.  foreign policy priorities for determining the
number of personnel needed at overseas posts.  Several internal State
Department studies since 1988 have indicated concerns that personnel
resources were not being allocated on the basis of policy priorities. 
In October 1993, State's Office of the Inspector General reported
that "personnel and resources are sometimes assigned to areas of
little or no importance to U.S.  policy, while posts in countries
critical to U.S.  interests go begging." Using a rank ordering of
posts based on an assessment of U.S.  foreign policy objectives could
ensure that lower ranked posts do not have more staff than posts that
rank higher, unless there is reasonable justification. 

Senior State officials have acknowledged that the current personnel
resources planning and allocation processes fail to adequately link
personnel resources with policy priorities.  In mid-1994, the Under
Secretary for Management began conducting periodic meetings with all
the under secretaries, acting as a "corporate board," to develop a
resource management strategy to meet the highest priority goals for
State operations.  According to State officials, these meetings are
being held in an effort to better link resources to policy
priorities.  However, no time frames for implementing the strategy
have been established. 

Since 1991, State has been developing a methodology to establish
staffing level benchmarks in a country based on that country's
importance to U.S.  interests.  Although the methodology would need
to be revised to reflect current policy priorities, including
consideration for administrative support provided to non-State
agencies, it would provide a reasonable basis for staffing decisions. 
However, State has no plans to incorporate such a methodology into
its personnel resource management process. 

To identify the posts to be closed in 1993 and 1994, State did not
base its decisions on agencywide policy priorities, but rather on
geographic bureau objectives and priorities.  The Under Secretary for
Management provided general and informal guidance to bureaus and
asked for recommendations as to which posts could be closed.  Then
each geographic bureau used different criteria to identify posts that
it considered to be a lower priority in its region.  However, State
did not systematically compare on a worldwide basis the relative
importance of posts to U.S.  interests overseas. 


   PRIOR STUDIES RECOMMEND LINKING
   PERSONNEL RESOURCES TO POLICY
   PRIORITIES
------------------------------------------------------------ Letter :3

Several studies since 1988 have indicated that State did not have an
effective system for deciding how many diplomatic personnel are
needed at overseas locations.  While State officials have, at some
level, acknowledged the need to improve the way the agency matches
personnel resources with policy priorities, it has not implemented a
system to accomplish this. 

In 1988, a report prepared for the Deputy Secretary's Steering Group,
known as the Grove Report,\2 identified the lack of an effective
mechanism to link foreign policy priorities to resources.  The report
recommended that top management set explicit policy and management
objectives and ensure that managers at all levels link the allocation
of resources to those objectives. 

A legislatively mandated study, conducted by a panel known as the
Thomas Commission, also stressed the need for a mechanism to link the
agency's missions to personnel resources as a key element in
effective human resources management.\3 Then in 1991, the Under
Secretary for Management tasked the Director General of the Foreign
Service with reviewing the civil service personnel component of
State's work force.  To implement the directive, the Director General
established a commission that subsequently concluded State needed to
strengthen its long-range workforce planning.\4 In 1992, State
established a task force to analyze the future foreign affairs policy
and operating environment and propose appropriate changes to the
agency's organization and management.  The task force identified the
need for an integrated policy and resource allocation process to
facilitate the shift of resources to the highest priorities.\5 In
addition, the Commission on State Department Personnel recommended in
its 1992 report\6 that State establish a comprehensive, strategic
planning system that emphasizes human resource requirements.  The
report noted State's lack of progress in implementing the Thomas
Commission recommendation for long-range workforce planning. 

In 1993, the State Team for Reinventing Government, in response to
the National Performance Review (Vice President's Task Force)
initiative, examined ways to improve work force planning and
management in State and integrate foreign policy, program, and
resource management processes.\7 It recommended establishing an
integrated strategic management system that (1) ensures State's
limited personnel resources are allocated in a way that addresses the
U.S.  government's most important foreign policy objectives, (2)
establishes accountability for results, and (3) provides flexibility
to make mid-course corrections as required to address the full
spectrum of State's foreign policy responsibilities. 


--------------------
\2 U.S.  Department of State, Administrative Functions for the
1990's, June 1988. 

\3 U.S.  Department of State, Report of the Commission on the Foreign
Service Personnel System, June 1989. 

\4 U.S.  Department of State, Report of the Director General's
Commission on Civil Service Improvements, December 1991. 

\5 U.S.  Department of State, State 2000:  A New Model for Managing
Foreign Affairs, Report of the U.S.  Department of State Management
Task Force, December 1992. 

\6 U.S.  Department of State, The "State Team" for the Future, Report
of the Commission on State Department Personnel, October 1992. 

\7 U.S.  Department of State, "Reinventing Government" Change at
State, September 1993. 


   STATE LACKS AN OBJECTIVE,
   QUANTIFIABLE METHODOLOGY FOR
   DETERMINING APPROPRIATE
   STAFFING LEVELS
------------------------------------------------------------ Letter :4

In spite of various studies calling for a better match of personnel
resources to mission and policy priorities, State's personnel
resource planning and allocation processes have not changed
significantly.  Historically, State has not determined the types and
number of personnel to deploy to each location based on an objective,
quantifiable methodology.  In response to budgetary constraints,
personnel reductions overseas have been accomplished largely by
across-the-board cuts. 

In response to reports criticizing State's personnel system, the
Director General of the Foreign Service initiated a baseline staffing
study in 1990 with the objective of developing a methodology for
determining the optimal number of staff positions necessary to
sustain operations at posts of comparable working environments and
importance.  The methodology includes ranking each country on the
basis of its importance to U.S.  foreign policy objectives and the
degree to which a host country is considered a world leader and
therefore in a position of importance to U.S.  interests overseas. 
The study also recorded and compared staffing levels in the political
section of posts that were generally thought to be staffed adequately
to support U.S.  interests in order to approximate an optimal
staffing or benchmark level. 

The study is not yet complete, and has experienced a number of
delays.  As of July 1994, State estimates that over $500,000 was
spent in staff and contractor costs over the last 4 years, but
according to the Director General, sufficient resources were not
allocated to have done the study more quickly.  Some progress has
been reported in identifying the optimal staffing levels for
political/economic/labor/science positions and work is ongoing on the
administrative and consular positions.  State has not established
time frames for completion of the methodology.  But more importantly,
as of July 1994, State had not decided if it would ever use the
methodology to guide its personnel allocation decisions. 

The Director General and the Director of Management Planning\8 told
us they believed such a methodology could be useful as a management
tool.  However, these officials indicated that while some of the
methodology's results may be used informally by agency managers,
State had no plans to incorporate the study's methodology into the
personnel resource allocation process. 

There is some resistance to making resource allocation decisions
based on a rank ordering of posts because of the difficulties and
political sensitivities associated with explicitly identifying one
country as more important than another.  Furthermore, being held to a
ranking methodology premised on policy-based criteria was viewed by
some State officials as too rigid and unrealistic.  We noted,
however, that three of State's geographic bureaus have already
developed explicit country ranking systems, which they said they have
found useful in dealing with budget constraints.  (However, these
bureaus did not apply criteria that considers overall agency policy
priorities in developing these rankings.)

It is important to note that as currently structured, State's
baseline methodology is based on policy priorities established in
1992, which have changed somewhat.  Further, it does not include
State's mission of providing administrative support to other agencies
as a consideration in a post's ranking, even though this support is a
primary activity of many posts.  Therefore, State would have to
assess posts based on the new policy priorities and incorporate
administrative activities into the ranking before implementing the
methodology. 


--------------------
\8 This office, in the Office of the Under Secretary for Management,
is responsible for overseeing implementation of State's program
planning process. 


      PROBLEMS IN STAFFING
      ALLOCATIONS
---------------------------------------------------------- Letter :4.1

The Inspector General has reported numerous examples that demonstrate
allocation disparities.  In October 1993, the Inspector General
reported that staffing levels at some posts may be higher or lower
than appropriate and not commensurate with U.S interests.  For
example, the U.S.  Embassy in Malabo, Equatorial Guinea, and the
consulate in Shenyang, China, were staffed with approximately the
same number of personnel, yet U.S.  interests and objectives in
Equatorial Guinea are much less than in the region served by U.S. 
Consulate, Shenyang.  The embassy in Malabo, staffed with 5 U.S. 
direct hires, serves a country with less than 400,000 people, fewer
than 50 resident Americans and very limited strategic, political, and
economic interests.  In contrast, the consulate in Shenyang, China,
with 7 U.S.  direct hires, serves a region with more than 100 million
people and offers a vast and growing market for U.S.  exports in
addition to other U.S.  strategic and political interests. 

Between 1991 and 1994, the Inspector General criticized staffing
levels in many individual locations.\9 For example, the Inspector
General reported that: 

  The embassy in Antigua and Barbuda was roughly twice what was
     appropriate considering its mission.  (State decided to close
     the embassy in June 1994.)

  The embassy in Cairo, Egypt--one of the largest posts in the
     world--had generous staffing and resources, and a review of
     staffing and resources was needed to "bring services in line
     with the reality of government-wide budget limitations."

  The seven U.S.  posts in Germany had generous staffing levels and a
     zero-based staffing review was needed. 

  At the embassy in Zaire, staff complained that U.S.  presence was
     too large and obtrusive, but the embassy had not determined how
     many personnel were needed to attain U.S.  objectives. 

  At the embassy in Peru, there were too many staff considering the
     high security threat. 

  The embassy in Botswana had not implemented staffing reductions,
     although U.S.  interests had diminished. 

  The embassy in the Seychelles was overstaffed given its limited
     mission. 

Congressional committees have also expressed concern regarding
staffing levels overseas.  For example, during fiscal year 1994
budget hearings, the Chairman, Senate Committee on Appropriations,
Subcommittee on Commerce, Justice, State, and the Judiciary
identified posts in countries such as Germany and the Philippines,
where U.S.  interests had dramatically changed, as candidates for
reduction.  Echoing this sentiment, the Senate Committee on
Appropriations, in its fiscal year 1994 appropriations report, cited
generous staffing levels in Germany and recommended that State reduce
staffing levels there.  Moreover, the House Committee on
Appropriations recently registered concern that the staffing of the
U.S.  mission to China was insufficient to monitor human rights
issues.  The Committee recommended that State consider reallocating
funds and personnel to the U.S.  mission in China in order to address
this matter. 


--------------------
\9 Since the time of inspection, State may have adjusted staffing
levels in response to Inspector General recommendations. 


      CHIEFS OF MISSION LACK TOOLS
      AND CRITERIA TO MAKE
      STAFFING DECISIONS
---------------------------------------------------------- Letter :4.2

Most Chiefs of Mission that we contacted said they did not
periodically review staffing levels in relationship to U.S. 
interests.  They lacked criteria to determine what levels would be
considered adequate or appropriate given U.S.  interests in that
country.  Some relied upon inspections conducted by the Inspector
General to determine whether staffing levels should be changed to
better reflect mission objectives. 


      OTHER AGENCIES USE RANKING
      SYSTEMS
---------------------------------------------------------- Letter :4.3

Compared with State, several other federal agencies with significant
numbers of personnel overseas have more systematic processes for
allocating personnel.  The majority of agencies reviewed--the U.S. 
Agency for International Development, Defense Intelligence Agency,
Foreign Agricultural Service, U.S.  and Foreign Commercial Service,
and U.S.  Information Agency--provided evidence that they rank their
posts by policy priorities and allocate personnel resources
accordingly.\10 Some also take workload, cost, and performance
factors into consideration when staffing their overseas offices. 
According to agency officials, budget constraints were a primary
motivating factor for ranking overseas locations based on their value
in meeting stated agency mission and policy objectives. 

Officials from these agencies stressed the importance of applying an
objective, quantifiable methodology for allocating personnel
resources.  They said this is particularly important when resources
are constrained because it introduces discipline to the process and
minimizes subjective judgments.  These officials acknowledged that
such a methodology can be difficult to develop.  However, once
established, we believe it has been a more effective way of
allocating scarce resources. 

Following are examples of other agencies' staffing processes: 

  The U.S.  and Foreign Commercial Service bases staffing decisions
     in large measure on a ranking of countries' market potential for
     U.S.  exports and other factors of importance to U.S.  business. 
     Ranking is determined by a mathematical model that uses weighted
     criteria, including microeconomic, macroeconomic, and workload
     factors. 

  The U.S.  Agency for International Development, in making staffing
     decisions, uses a model that divides countries into four
     categories:  (1) development programs, (2) political and
     security programs, (3) advanced developing country programs, and
     (4) emergency relief programs.  The agency also considers
     assistance levels and the availability/competence of foreign
     national staff.  The agency recently used a similar model to
     help identify 21 missions to close. 

  The Defense Intelligence Agency identifies posts where staff
     reductions could be made using a ranking methodology that places
     each country into one of four categories.  The agency ranks a
     country's relative importance for (1) reporting of military
     information, (2) representational activities, (3) advising the
     Chief of Mission on military matters, and (4) administration of
     a security assistance program. 

None of these agencies rely entirely upon these systematic processes
to determine the number of personnel needed worldwide and where to
post them.  For example, the Foreign Agricultural Service proposed
closing its post in London due to the high operating costs, even
though this post ranks as 1 of the top 10 posts.  Service officials
explained that the activities handled by this post can be effectively
managed through another European post.  The U.S.  and Foreign
Commercial Service has higher staffing levels in the Philippines and
Cote d'Ivoire than justified by its staffing model because of
activities associated with multilateral banks in these countries. 

Nevertheless, agency officials told us that having a systematic,
quantifiable process helps provide an objective basis for allocating
personnel resources and making tough decisions in a resource
constrained environment.  When deviations from the optimal staffing
levels occur, they had to be justified.  The objective basis imposes
discipline on the budgeting and staffing process thereby minimizing
subjective judgments that may otherwise result in staffing decisions
that are not commensurate with U.S.  foreign policy objectives. 

At these agencies, we found the positive attributes of an objective,
quantifiable process included (1) prioritizing or ranking of
countries based on agency mission/U.S.  foreign policy objectives;
(2) an ability to obtain and use accurate operating costs; and (3) an
analysis of workload to determine the optimal staffing level needed
to accomplish specific activities.  For example, the U.S.  Agency for
International Development, the U.S.  and Foreign Commercial Service,
and the Defense Intelligence Agency employ staffing methodologies
that include all three factors.  The U.S.  Information Agency ranks
countries and considers operating costs but does not apply workload
factors. 


--------------------
\10 As explained in the Scope and Methodology, we did not
independently validate the staffing decisions made using these
processes. 


   STATE IS NOT POSITIONED TO
   SHIFT RESOURCES IN RESPONSE TO
   CHANGING PRIORITIES AND BUDGET
   CONSTRAINTS
------------------------------------------------------------ Letter :5

State faces constrained budgets and shifting objectives in the
post-Cold War era.  State officials recognize that emerging foreign
policy objectives, competing priorities, and diminishing resources
may force reductions in staff or even the closure of some overseas
posts in the future.  The process the Department used in 1992
demonstrates the difficulties State has had in shifting resources due
to changing policy priorities. 

According to senior State officials, in 1992, the Secretary of State,
under the previous administration, directed that the costs of opening
posts in the former Soviet Union be covered without seeking
supplemental appropriations.  State decided to help finance the new
posts by closing posts in other geographic regions.  To select posts
for closure, the Under Secretary for Management directed the
geographic bureaus to identify lower priority posts, which he defined
as posts where reporting is less critical and where U.S.  citizens
can be served from a nearby post.  The Under Secretary did not,
however, provide criteria that would permit the bureaus to consider
an assessment of agencywide priorities in their decision-making. 

Because State did not have an objective, quantifiable methodology
that ranked overseas posts based on policy priorities or establish
policy-based criteria on which to base staffing decisions, each
geographic bureau used a different method for identifying posts to
close.  For example, State officials told us: 

  The Bureau of South Asian Affairs was reluctant to close posts,
     arguing that State recently created the Bureau in response to
     congressional interest in the region and closing posts would run
     contrary to congressional intent. 

  Initially, the Bureau of African Affairs refused to propose that
     posts be closed because it wanted to retain at least some
     presence in all countries.  The Bureau did not want to close
     embassies and argued that it had few consulates to close.  The
     Under Secretary for Management rejected this proposal and
     identified four African posts to close. 

  The Bureau of Inter-American Affairs used mission program plans,
     prepared by the posts, to analyze staffing requirements.  On the
     basis of this analysis, the Bureau ranked posts according to its
     priorities and identified several for closure. 

  The Bureau of European and Canadian Affairs (recently renamed the
     Bureau of European and European Community Affairs) also
     identified several posts for closure.  Bureau officials could
     not provide documentation of the decision criteria.  However,
     they said they had used a matrix that ranked its posts based on
     several factors, including trade and commercial interests,
     political interest and strategic significance, military
     presence, and other factors. 

In January 1993, the State Department proposed closing 20 posts in
fiscal years 1993 and 1994.  When the new administration took office,
State officials held consultations with Congress on these proposed
closures.  In May 1993, State announced that 19 of the 20 posts would
close.  However, as of August 1994, State had decided to retain
several of these posts, and is now planning to close a total of 17
posts by the end of fiscal year 1994.  (App.  I provides information
on the status of these closures.)


   STATE HAS ACKNOWLEDGED NEED TO
   IMPROVE RESOURCE ALLOCATION
------------------------------------------------------------ Letter :6

Senior State officials have acknowledged that the Department needs to
do a better job of aligning its personnel resources with policy
priorities.  The Secretary of State, in presenting the Department's
fiscal year 1995 budget to Congress, noted that the Department is
"redeploying resources and personnel to meet the challenges of the
post-Cold War world." The Deputy Secretary of State, in a March 1994
meeting with senior policy and resource managers at the State
Department, said he was "increasingly worried about the mismatch
between what we want to do and the resources available to work with."
He discussed the need to better link personnel resources to policy
priorities and measure performance against agency goals.  He also
noted that "the inadequacy of concentrating only, or primarily, on . 
.  .  the policy process is so self-evident as to be a truism, one
unfortunately, that all too often is ignored in this building."

State has taken recent actions associated with its resource
allocation process.  According to the Under Secretary for Management,
State has changed its resource allocation in two main ways--it has
revised its program planning process and established the Office of
Resources, Plans, and Policy in February 1994.  The program planning
process is State's vehicle for setting priorities and allocating
resources used in preparing for the annual budget and financial
plans.  As part of this process, in mid-1994, the Under Secretary
established a "corporate board" forum in which the under secretaries
meet periodically to discuss resource allocation issues on a program
basis and develop a resource management strategy.  According to State
officials, bringing senior policymakers together to make corporate
decisions regarding policy and resources represents the Secretary's
commitment to better linking resources to policy priorities. 
However, no time frames have been established for implementing the
strategy.  The Office of Resources, Plans, and Policy was created and
tasked with ensuring that all foreign affairs programs and resources
are better matched to meet U.S.  foreign policy objectives.\11

Recently, the Office of Resources, Plans, and Policy began to work
with senior agency officials in assessing the relative priority of
each of the administration's six foreign policy objectives. 

State has articulated changes to its program planning process that if
properly implemented could better link resource decisions to policy
priorities.  It appears that leadership for this reform is coming
from the highest levels of the Department.  Furthermore, State has
begun to develop key tools--the baseline staffing methodology and
assessing the relative priority of foreign policy objectives--which
we believe would help improve the staffing allocation process.  It is
too early to determine, however, whether State's actions will result
in actual improvements.  The Director General of the Foreign Service
likewise noted that because State has traditionally emphasized
policy, not management, these proposals represent a cultural shift
for the Department and it may be difficult for policymakers to
implement the proposals effectively. 

We have also identified several specific weaknesses in the proposed
changes that may limit the actual improvements to the process. 
Specifically, State had not decided to use an objective, quantifiable
methodology, like the baseline staffing methodology, to make staffing
decisions and reallocate personnel resources among the geographic
bureaus.  As other agencies have indicated, using such a methodology
provides a more disciplined process for reallocating resources in
relationship to U.S.  interests overseas. 

In May 1994, the Under Secretary for Management, charged with
responsibility for overall resource allocation decisions, established
reduction targets for every substantive functional and geographic
bureau to be implemented by 1998.  However, it is unclear whether the
Under Secretary has sufficient authority to exercise control over
personnel allocations, in particular, reallocations among substantive
and geographic bureaus based on overall agency priorities.  According
to the Director of the Management Planning Office, State currently
envisages reallocation decisions being made jointly by the Under
Secretary for Management and the under secretaries for each of the
bureaus. 

State's ability to measure progress toward goals and objectives is
limited because no performance or workload measures have been
incorporated into the process.  State is taking initial action to
develop such measures, but recognizes that this will be difficult. 
Many agencies are struggling with developing workload and performance
measures as a means of evaluating whether resources are achieving
stated goals.  Most of the agencies we reviewed had not yet
incorporated workload or performance measurements into their staffing
systems.  However, the Government Performance and Results Act of 1993
requires agencies to establish performance measures by 1997. 


--------------------
\11 In addition, this office is responsible for ensuring the
International Affairs budget, which includes U.S.  foreign affairs
programs and resources, is consistent with the administration's six
foreign policy objectives.  These objectives include (1) promoting
U.S.  prosperity through trade, investment, and employment; (2)
building democracy; (3) promoting sustainable development; (4)
promoting peace; (5) providing humanitarian assistance; and (6)
advancing diplomacy. 


   AN UPDATED BASELINE STAFFING
   METHODOLOGY COULD BE A
   REASONABLE BASIS FOR STAFFING
   DECISIONS
------------------------------------------------------------ Letter :7

Having an objective, quantifiable methodology, such as an updated
version of State's baseline staffing methodology, could provide a
basic structure for allocating staffing resources based on policy
priorities.  Such a methodology could minimize subjective judgments
that may otherwise result in staffing decisions that do not provide
optimal support of U.S.  interests overseas.  Furthermore, according
to the Assistant Inspector General for Inspections, the methodology
could provide criteria, based on an overall assessment of foreign
policy objectives, for workforce planning and staffing decisions. 
The availability of this methodology could enhance the effectiveness
of Inspector General inspections of overseas posts. 

Because of the serious fiscal constraints it faces, State may have to
reduce the number and size of overseas posts.  This methodology would
also provide State with an objective, policy-based rationale for
identifying those posts where personnel reductions or post closure
would have the least adverse impact on U.S.  interests overseas. 
State officials need not rely exclusively on this methodology to
determine the number of personnel at each overseas post.  In some
cases, political considerations and other factors will have to be
incorporated into staffing decisions. 

The following is the logical flow of how an objective, quantifiable
methodology could be implemented. 

(1) State would complete its analyses to establish benchmark staffing
levels that prescribe the optimal number of officers needed at an
average post of varying degrees of importance for each section of the
post (i.e., consular, economic, political, and administrative). 

(2) State would update its analyses to determine the relative
importance of each of its overseas posts in supporting U.S. 
interests as expressed in the administration's six policy objectives. 
Factors to be considered in making this determination could include
the country's regional significance, population, and
strategic/economic importance. 

(3) The Office of Resources, Plans, and Policy would finalize its
assessment of the relative importance of the six overall foreign
policy objectives.  For example, how does the importance of promoting
democratic institutions compare to the importance of advancing
diplomacy--which includes State's mission of providing administrative
support to other agencies overseas.  The importance of the
administrative support mission has increased over the past 10 years
as the size and scope of non-State agencies overseas has
significantly increased. 

(4) Using the information developed in steps 2 and 3, State would
calculate the relative importance of each post in addressing U.S. 
interests overseas. 

(5) For each State section of the post, State would calculate the
optimal number of officers needed based on the benchmark staffing
levels developed in step 1 and the relative importance of each post
as developed in step 4. 

(6) After considering specific working environment conditions, State
would then make adjustments to the optimal number of officers for
each section at each post.  Factors to be considered could include
workload data, quality of foreign national staff, staffing levels of
other agencies performing related functions at post, and hardship
conditions.  For example, an administrative section in a country with
poor infrastructure (i.e., roads, communication systems) and a local
workforce with limited capability would probably be allocated more
U.S.  officers than a post of similar importance in a country with a
good infrastructure and a capable workforce. 

(7) State would then compare the actual staffing levels of its posts
to the target levels to identify any discrepancies and make
adjustments as necessary. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :8

We recommend that the Secretary of State fully integrate an
objective, quantifiable staffing methodology into State's overseas
personnel resource planning and allocation processes to help ensure a
sound basis for allocating personnel resources in line with U.S. 
interests overseas.  A revised version of the baseline staffing
methodology, which State has been developing for the past 4 years,
could be used. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

As requested, we did not obtain written agency comments.  We
discussed a draft of the report with senior representatives from the
Office of the Under Secretary for Management, the Office of the
Director General of the Foreign Service, and the Bureau of Finance
and Management Policy.  These officials generally agreed that the
Department needs to better link personnel resources with policy
priorities, and believe recent actions to improve the program
planning process represent significant progress in achieving this
objective.  However, several officials expressed apprehension in
implementing the baseline staffing methodology until after the under
secretaries have developed a resource management strategy, as they
believe this strategy may include changes to the number and types of
positions needed overseas.  At this time, however, State officials
cannot provide details on the resource management strategy or a
timetable for its implementation. 

The Director, Office of Resource Management and Organization Analysis
told us the baseline staffing methodology provides a conceptual
framework for workforce planning and as such, can be adjusted to
reflect changes to (1) the U.S.  foreign policy objectives, (2) the
relative priority of these objectives, and (3) the composition and
classification of the overseas workforce.  Therefore, the methodology
can be adjusted to incorporate any changes that may result from
ongoing management initiatives. 


   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10

To obtain information on State's current staffing allocation process
and its baseline staffing study, we interviewed officials and
reviewed documents from the Bureau of Personnel, Office of Resource
Management and Organization Analysis.  We also discussed the study
and other personnel resource management issues with the Director
General of the Foreign Service and the Deputy Assistant Secretary for
Personnel.  We also interviewed the Director, Management Planning
Office, who is responsible for overseeing implementation of the
proposed changes to the program planning process; the Director,
Office of Resources, Plans, and Policy; and officials from the Bureau
of Finance and Management Policy. 

To obtain information on the process used by State to identify posts
to close, we interviewed State officials from the European and
European Community Affairs, African Affairs, East Asian and Pacific
Affairs, Inter-American Affairs, Near Eastern Affairs, and South
Asian Affairs bureaus, as well as the former Executive Assistant to
the Under Secretary for Management who in 1992 played a major role in
determining what posts to close. 

To obtain information on agencies' staffing allocation systems, we
performed work at a number of agency headquarters in Washington,
D.C., including the Department of State (including geographic
bureaus); the Defense Security Assistance Agency; the Defense
Intelligence Agency; U.S.  and Foreign Commercial Service; U.S. 
Information Agency; U.S.  Agency for International Development;
Foreign Agricultural Service; Drug Enforcement Agency; Federal Bureau
of Investigation; and Immigration and Naturalization Service. 

We also conducted work at diplomatic posts in Benin, Costa Rica, Cote
d'Ivoire, Denmark, Guyana, France, Morocco, Nepal, the Philippines,
Spain, Sweden, Switzerland, Thailand, and Tunisia.  Based on our
analysis of the data collected overseas and at headquarters, we
compared agency staffing processes to identify the common elements
that agencies used to allocate personnel resources overseas, and in
many cases open and close activities in different locations.  We did
not assess and validate agencies' final staffing allocation
decisions.  Our work was limited to compiling and analyzing
information about agencies staffing processes to identify those
elements that most agencies said were necessary to ensure that
resources were allocated in a rational manner, in support of
important U.S.  interests overseas. 

We conducted our work between May 1993 and August 1994 in accordance
with generally accepted government auditing standards. 


--------------------------------------------------------- Letter :10.1

Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days after its issue date.  At
that time, we will send copies to appropriate congressional
committees, the Secretary of State, and other interested parties. 

I can be reached on (202) 512-4128 if you or your staff have any
questions on this report.  The major contributors to this report were
John Brummet, Assistant Director; Suzanne Nagy, Evaluator-in-Charge;
Janine Cantin, Evaluator; and Luisa Joy Labez, Evaluator. 

Sincerely yours,

Joseph E.  Kelley
Director-in-Charge
International Affairs Issues


STATUS OF POST CLOSINGS
=========================================================== Appendix I

As of August 1994, 16 of the 20 posts that State originally proposed
for closing had been closed.  (In March 1994, State proposed closing
the U.S.  Embassy in Grenada but, in view of congressional concerns,
the Department decided to keep the post open.) An additional post is
expected to close shortly--thus bringing the number of closings,
between 1993 and 1994, to a total of 17 posts.  Three of the 20 posts
will remain open.  According to geographic bureau officials, the
following is a summary of the status of State's post closing plans: 



                                    Table I.1
                     
                     Status of State Department Post Closing
                                      Plans

Type of post/location                 Status
------------------------------------  ------------------------------------------
Embassy in Moroni, Comoros            Closed in September 1993, 8 years after it
                                      was opened. The embassy in Mauritius has
                                      assumed post duties.

Embassy in St. Johns, Antigua and     Closed in June 1994. The embassy in
Barbuda                               Barbados has assumed post duties.

Embassy in Honiara, Solomon Islands   Converted from a consulate to an embassy
                                      in 1988, this post was closed in July
                                      1993. The embassy in Papua New Guinea has
                                      assumed post duties.

Embassy in Apia, Western Samoa        Based on congressional concerns, this
                                      embassy will remain open.

Embassy in St. George's, Grenada      Based on congressional concerns, this
                                      embassy will remain open.

Consulate in Douala, Cameroon         Closed in September 1993. The embassy in
                                      Yaoande has assumed post duties.

Consulate in Mombasa, Kenya           Closed in June 1993. The embassy in
                                      Nairobi has assumed post duties.

Consulate in Kaduna, Nigeria          Scheduled to close in September 1994. The
                                      Branch Office in Abuja, Nigeria, will
                                      assume post duties.

Consulate in Fort-de-France,          Closed in July 1993. The embassy in
Martinique                            Barbados and a locally hired consular
                                      agent have assumed post duties.

Consulate in Mazatlan, Mexico         Closed in June 1993. The consulate general
                                      in Guadalajara has assumed post duties.

Consulate in Curacao, Netherlands     State decided to retain this post, staffed
Antilles                              by one officer.

Consulate in Maracaibo, Venezuela     Closed in December 1993. The embassy in
                                      Caracas has assumed post duties.

Liaison Office in Koror, Palau        State decided to retain the post and plans
                                      to upgrade it to an embassy in October
                                      1994. However, there will be no resident
                                      ambassador.

Consulate in Songkhla, Thailand       Closed in July 1993. The embassy in
                                      Bangkok has assumed post duties.

Consulate in Salzburg, Austria        Closed in September 1993, after being
                                      considered for closing for years. The
                                      embassy in Vienna has assumed post duties.

Consulate in Genoa, Italy             Closed in June 1993. The embassy in Rome
                                      and locally hired consular agents have
                                      assumed post duties.

Consulate in Palermo, Italy           Closed in January 1994, after being
                                      considered for closing for years. The
                                      consulate general in Naples and locally
                                      hired consular agents have assumed post
                                      duties.

Branch Office in Geneva, Switzerland  Closed in July 1993.

Consulate in Izmir, Turkey            Closed in June 1993. The embassy in Ankara
                                      and the consulate general in Istanbul have
                                      assumed post duties.

Consulate in Oran, Algeria            All U.S. staff left the post in 1992, and
                                      the post was officially closed in June
                                      1993. The embassy in Algiers has assumed
                                      post duties.

Consulate in Alexandria, Egypt        Post closed in September 1993, but at
                                      least three other agencies continue to
                                      maintain presence. State has retained
                                      about 15 locally hired staff to provide
                                      essential administrative and maintenance
                                      services. The embassy in Cairo has assumed
                                      post duties.
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