U.S. Department of State

The Reports Consolidation Act of 2000 requires that the Department's Performance and Accountability Report include a statement by the Inspector General that summarizes the most serious management and performance challenges facing the Department and briefly assesses its progress in addressing those challenges. I am pleased to present this year's statement, reflecting the Department's progress in addressing its current challenges of protecting its people and facilities, strengthening its information security, managing its financial and human resources, combating terrorism and ensuring border security, improving understanding through public diplomacy, and supporting post-conflict reconstruction and stabilization.

I am proud of the contribution OIG makes to helping the Department address its management and performance challenges. The scope of our oversight mandate and the opportunity it offers to make a positive impact in strengthening the management of the Department continue to expand rapidly. During FY 2006, OIG expanded its oversight to encompass new Department initiatives in transformational diplomacy, global repositioning, and public diplomacy, as well as substantial increases in programs for Iraq and Afghanistan, counternarcotics, counterterrorism, embassy construction, and information technology. Significant growth in the number of programs and grants with mandated OIG oversight, congressional and management requests for special reviews and investigations, and opportunities for joint activities with other departments, agencies, and OIGs further enhance both the challenges and the benefits of our work.

The expansive scope of these activities has resulted in substantial benefits to the U.S. Government and the American taxpayer. OIG accomplishments in FY 2006 have supported the Department's strategic goals as well as OIG's vision of promoting effective management, accountability, and positive change in the Department of State and the Broadcasting Board of Governors (BBG). During FY 2006, OIG activities resulted in actual recoveries and identified savings of more than $31.3 million, as well as issuance of nearly 100 reports with recommendations to improve Department and BBG programs and operations. Other substantive outcomes of our work included:

• Actions toward a strategic plan for Embassy Baghdad's rule-of-law programs, which will strengthen the embassy's coordinating role and increase Iraqi participation in project development;
• Improvements to strengthen Iraqi anticorruption programs by increasing the effectiveness of Embassy Baghdad's interagency working group, establishing a strategy for U.S. advisors and trainers to bridge gaps between Iraqi anticorruption institutions, and supporting a training facility for Iraqi anticorruption personnel;
• Strengthened internal management controls at the Global Financial Services Center in Charleston;
• Immediate security improvements and potential cost avoidances for the new embassy construction project in Beijing, China; and
• Corrective actions to improve border security and reduce vulnerabilities from terrorists.

OIG has accomplished a lot this year, but like the Department, we have much to do to meet the management and performance challenges we have set for ourselves. I am committed to restoring OIG's capabilities to provide the oversight and advisory assistance necessary to assure the Department, Congress, and the American taxpayer that the programs and operations we review are as effective, efficient, economical, and accountable as possible.

   Howard J. Krongard
   Inspector General

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