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U.S. Department of State

Diplomacy in Action

Management Challenges Response


Bureau of the Comptroller and Global Financial Services
Report
November 16, 2012

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In FY 2012, the Department of State's Office of Inspector General (OIG) identified challenges in the areas of: protection of people and facilities; contract and procurement management; information security and information management; financial management; military to civilian-led transitions in Iraq and Afghanistan; foreign assistance coordination and oversight; diplomacy with fewer resources; public diplomacy; effective embassy leadership; and consular operations. The Department promptly takes corrective actions in response to OIG findings and recommendations. Highlights are summarized below.

Protection of People and Facilities
Challenge Regional Security Officer (RSO) Management and Leadership Training: The Department has recognized the benefit of enhancing RSO management skills and remains a proponent of mandated leadership training for all of its supervisors and managers. OIG is also focusing more on management and oversight of security programs to include Deputy Chief of Mission oversight of RSOs.
Actions Taken The Bureau of Diplomatic Security (DS) uses the Post Security Program Review (PSPR) as a management oversight tool to ensure Regional Security Offices are carrying out security program responsibilities with full mission support and participation. An important component of the PSPR is RSO Leadership, Outreach, and Liaison. Regional Directors in DS International Programs were asked to pay particular attention to the relationship between the RSO and DCM and Principal Officer during the PSPR.

In August 2012, DS distributed 10 Leadership Tenets to all personnel critical to DS's success in providing a safe and secure environment for the conduct of U.S. foreign policy. The tenets have been defined as expectations at every level within the Bureau. Office Directors, Field Office Special Agents-in-Charge (SACs), and Regional Security Officers (RSOs) are directed to engage their employees to formally introduce, discuss, and garner feedback about the tenets. DS has also expanded use of SharePoint technology to create and manage policy and reporting documents. Included is the requirement for the Deputy Chief of Mission (DCM) to formally register clearance/approval of these documents. To meet this requirement, the DCM or other appropriate post manager is provided access to the DS SharePoint system.
Actions Remaining DS will solicit feedback from personnel to refine the leadership tenets and incorporate them into the DS Training Center training courses and curriculum codifying and reinforcing them at every level of the organization. Additional steps to institutionalize the tenets will follow.
Challenge Protecting People, Facilities, and Information in Conflict Zones: Protecting people, facilities, and information in areas of armed conflict and at missions rated critical for terrorist threats is a particular challenge. For example, some host governments sponsored or turned a blind eye to the harassment and intimidation of mission personnel; slowed visa issuance to security personnel to a trickle; and interfered with incoming classified and unclassified diplomatic pouches. The Department is challenged to foster better cooperation with the host nation and effectively manage its security programs under these conditions.
Actions Taken Missions experiencing such issues engage regularly with the host government at all levels and use the visits of senior U.S. Government officials to emphasize the need for better cooperation. Embassy Sanaa coordinated outreach within the mission to obtain customs clearance and registration for numerous armored vehicles, some of which had been in the port for months. In addition, post and the Diplomatic Courier Service have coordinated the use of a variety of transportation options for the delivery of classified pouches, but challenges remain. The Department also works closely through its Office of Foreign Missions (OFM) to leverage post-specific reciprocity issues whenever possible. Also, issues of harassment of U.S. Government employees are regularly addressed at all levels in the Department and most recently by the Secretary on September 21, 2012.
Actions Remaining The Department will continue to provide high level Departmental support to address this issue.
Challenge Funding for Physical Security Standards for the Department's Domestic Facilities: DS established physical security standards for the Department's domestic facilities a few years ago. In recent domestic inspections, the OIG found required upgrades have not occurred because of a lack of domestic bureau funding. DS is responsible for compliance with security standards and designs security features for upgrades.
Actions Taken DS works with Department bureaus to ensure new construction and major renovations are in compliance with DS Physical Standards for Department of State Domestic Occupied Space. Where deficiencies are found through the Physical Security Survey process, funding for corrections and mitigation are the responsibility of the other bureaus which can be challenging in the current budget environment. DS works with other bureaus to leverage cost efficiencies for compliance and recommends mitigations to achieve the same level of protection. After deficiencies are identified through the survey process, DS reviews the corrections to ensure compliance with standards to the maximum extent feasible.
Actions Remaining DS will continue to work with domestic bureaus to leverage cost efficiencies for compliance or recommend mitigation to achieve the same level of protection.
Contract and Procurement Management
Challenge Managing Contracts and Procurements: The Department continues to face challenges managing contracts and procurements, including grants and cooperative agreements. Although Departmental contracting activities have significantly increased, the Department has not met this considerable growth with a corresponding increase in contracting personnel to handle the workload. The Department's primary acquisition organization, the Bureau of Administration's Office of Acquisitions Management (AQM), has experienced an increase in the number of procurement transactions processed and an increase in the dollar value of procurement actions issued without a corresponding increase in contracting personnel to handle the workload. During fiscal year 2011, AQM completed 27,133 contract actions valued at $8.6 billion, $955 million more than in the previous year, an increase of 12 percent.
Actions Taken AQM hired over 76 direct-hire employees and 41 contract staff since 2008 in contract officer/procurement-related positions. In FY 2012 AQM has requested to add 40 direct hire employees to assist with the workload. In addition to staffing, the Bureau of Administration's Office of Logistics Management (A/LM) has successfully integrated and deployed the Integrated Logistics Management System (ILMS). ILMS is the Department's platform for global logistics, integrating post logistics operations with Washington headquarters and Regional Centers. Now fully deployed domestically and overseas at 260+ posts, ILMS is critical to ensuring diplomatic personnel around the world can provide the goods and services that are essential to support the Department's mission.
Actions Remaining AQM will continue to assess its workforce, training, and tools. The OIG conducted an entrance conference with A Bureau offices in July 2012, to specifically address the Department's application of the Working Capital Fund (WCF) to achieve key Procurement Shared Services goals, including workforce capacity. AQM will continue to adjust staffing to meet the Department's procurement needs.
Challenge Construction of New Overseas Facilities and Selection of Contractors: The anticipated cost of the Department's multi-year plan to upgrade or build new overseas facilities is over $1 billion annually, and the Department must ensure that contractors are properly chosen, work is properly conducted and monitored, and costs are effectively contained.
Actions Taken The Department ensures every contractor selection is done in accordance with Federal Acquisition Regulations (FAR), Department of State Acquisition Regulations (DOSAR) and Foreign Affairs Manual (FAM) acquisitions regulations and procedures, and applicable law. Work performance is monitored by the Contracting Officer and the Contracting Officer's Representative assigned in the field. Furthermore, the Bureau of Overseas Buildings Operations (OBO) minimizes duration and cost growth allowing OBO to accomplish its key goal of strengthening consular and management capabilities by moving more people into secure, safer, and functional facilities quickly and efficiently. This is done through a robust data collection and monthly reporting process. Project managers and supervisors use these data to identify concerns on individual projects and mitigate the risk of budget and schedule overruns. In FY 2012, OBO effectively achieved an average cost growth for capital construction projects of 2.8 percent.
Actions Remaining The Department will continue to ensure that contractors are properly chosen, work is properly conducted and monitored, and costs are effectively contained.
Challenge Contract Monitoring in Iraq and Pakistan: In addition to increased expenditures, the Department has undertaken unprecedented responsibilities in the Middle East and has relied heavily on contractors and Department of Defense procurement support for some critical goods and services. In Iraq and Pakistan, the OIG identified instances in which poor contract monitoring resulted in increased costs and poor performance. In Iraq, the OIG determined that the contracting officer's representatives for Embassy Baghdad's operations and maintenance contract had not verified contractor invoices against appropriate supporting documentation or the contract terms and conditions, resulting in erroneous payments to the contractor.
Actions Taken The OIG inspected the Operation and Maintenance contract for the Embassy Compound in Baghdad and found that even though the contract required that items shipped to Iraq should be at the Contractor's expense, the Contractor was reimbursed for its transportation costs. The Department views this as a mistake in drafting the contract, as it was never the intent of the parties to require the Contractor to pay for transportation; such costs were very unpredictable in wartime Iraq and could not have been reasonably included in the price offered by the Contractor.
Actions Remaining The Contractor and the Government are now in negotiations to resolve the issue. Contract oversight is a special focus of AQM in all existing and upcoming contracts in Iraq to assure that contract terms are properly set and enforced. The Department will work to ensure that the applicable contracts have been suitably amended to ensure a fair method of identifying and paying appropriately for transportation costs is included in the applicable contract.
Challenge Providing Proper Oversight of Interagency Agreements: Proper oversight and accountability of grants, contracts, and cooperative and interagency agreements are also ongoing challenges. During inspections of the Bureau of Counterterrorism (CT) and the Bureau of Diplomatic Security's (DS) Office of Antiterrorism Assistance, which jointly manage antiterrorism assistance totaling about $200 million, the OIG cited the need for improved monitoring procedures of contractor performance, and the timely review and processing of invoices.
Actions Taken On June 8, 2012, DS issued Office Policy Directive 07-FY 2012, which provides guidance on required coordination between DS program managers and regional security offices to ensure adequate oversight of contractual services in the deliverance of training conducted abroad. This will facilitate a prompt review of all related invoices and supporting documentation. To address program managers' lack of program monitoring and evaluation training, CT required CT program implementers to attend the Overview of Federal Assistance Management course (PP425). As of September 27, 2012 three employees out of 35 have completed the course and two others are registered.
Actions Remaining CT will ensure that all 35 employees complete the training.
Challenge Managing Grants and Cooperative Agreements: In Beirut, the mission did not document the results of site visits to grantee locations, creating uncertainty on whether $3.9 million in grants and cooperative agreements were fulfilling intended purposes. The Bureau of Near Eastern Affairs (NEA) had difficulty determining the origin and progress of some of its grants for capacity-building because of insufficient training, pressure to award grants quickly, and turnover in the Bureau and at Embassy Baghdad.
Actions Taken NEA clarified with Embassy Beirut that this OIG recommendation was specific to the Embassy Small Grants Program. Post's Middle East Partnership Initiative (MEPI) staff remains in full compliance with all MEPI regulations based on the last MEPI grant review conducted by visiting Tunis MEPI Director in May 2012. Embassy Beirut established a standard procedure for the project officers who monitor the Embassy Beirut Small Grants Program to include: 1) project officer training as a requirement; 2) supervisors will add narrative on grants management duties to project officers' work requirements against which they will be rated ; and 3) project officers will use the site visit reporting forms in post's Standard Operating Procedure.
Actions Remaining NEA and Embassy Beirut will implement additional corrective action as needed.
Challenge Management and Monitoring of Grantees: In Iraq, one grantee received eight grants, totaling about $130 million, to carry out local democracy-building programs. These eight grants exceeded their respective award budgets by a total of approximately $4.6 million because the Department did not adequately monitor program performance and did not detect questionable charges. For example, security costs were not competed, and, as a result, the $64.3 million in security costs exceeded the $49.5 million in direct costs to carry out the Iraqi democracy-building programs. Additionally, the grants officer did not provide prior approval to purchase vehicles valued at $700,000.
Actions Taken In FY 2011, the NEA/Iraq Grant Team carried out the following activities: 1) provided Grant Officer Representative (GOR) Training for approximately 30 personnel involved in grants management; 2) worked with a third party contractor on an assessment of two major programs: the Quick Response Fund and the Targeted Development Fund ; and 3) contracted for technical support to assist GORs with regular monitoring and evaluation of all NEA/Iraq grants by the Monitoring and Evaluation Team (M&E Team). This contract is an Indefinite Delivery, Indefinite Quantity (IDIQ) and is open for use through individual Task Orders for other bureaus and sections with programs in Iraq.

In FY 2012, the NEA/Iraq Grant Team carried out the following activities: 1) conducted GOR training in Baghdad for approximately 35 grants management personnel; 2) conducted in-depth training for the new M&E Team in Iraq; and 3) worked with post to establish Standard Operating Procedures to manage the Ambassador's Funds.
Actions Remaining In October 2012, NEA will hold the first of regularly scheduled annual GOR training sessions in Baghdad for approximately 40 Embassy personnel. The training will include aspects of pre-award competition in addition to the post-award management curriculum. In December 2012, Embassy Baghdad will hold the first of regularly scheduled annual M&E training sessions at post.
Challenge Managing and Monitoring Climate Change Grants and Interagency Agreements: The Department needs to abide by policy guidance on managing and monitoring over $200 million in climate change grants and interagency acquisition agreements. In one instance, the Department cannot account for $600,000 in related Economic Supports Funds transferred to another Federal agency.
Actions Taken Funding was transferred to USAID via an interagency agreement and programmed for a Development Credit Authority guarantee of a commercial loan in India. The Bureau of Oceans and International Environmental and Scientific Affairs (OES) considers the activity attempted in good faith and pursuant to the terms of the agreement, though the loan fell through at the end of the fiscal year and the funding expired (these funds then reverted back to the U.S. Treasury). To date, OES and the Office of U.S. Foreign Assistance Resources worked to properly account for the $600,000 in Economic Support Funds transferred to USAID, including issuance of a formal inquiry to USAID. This requires USAID to reconcile their internal accounts, an ongoing process that has been the source of the current delay.
Actions Remaining Actions remaining include follow-up with USAID before a determination of any further actions can be made. More broadly, the audit process has assisted OES in its pursuit to continually strengthen operating procedures and programmatic oversight, and has prompted the Bureau of Administration to develop a new Departmental policy on interagency agreements, a process in which OES has been actively engaged.
Information Security and Information Management
Challenge Implementing a Fully Effective Information Security Management Program: The Department needs to effectively implement the National Institute for Standards and Technology (NIST) guidance for account management and remote access and Office of Management and Budget (OMB) requirements for a Plan of Actions and Milestones (POA&M) process.
Actions Taken The Department has implemented an effective and cost efficient risk management-based information security program. Necessary improvements have brought POA&M processes in compliance with requirements and applicable guidance. Remote administrative access is appropriately evaluated, granted and monitored.
Actions Remaining The Department will address other user account management issues, e.g., unused and "stale" accounts will be monitored and scored in iPost.
Challenge Implementation of Effective Logical Access Controls for Major Applications: The OIG reported that logical access processes and procedures around major applications pertaining to account authorization, periodic account revalidation, concept of least privilege, separation of duties, audit log monitoring, and database vulnerability assessments were deficient.
Actions Taken The Department works with bureaus to bring about adherence to certification and accreditation procedures, including implementing scanning and vulnerability database assessments, as appropriate. For example, recently the Bureau of Diplomatic Security has begun the process of evaluating and selecting appropriate scanning tools for its systems.
Actions Remaining The Department will continue to work with bureaus to achieve compliance with logical access processes and procedures around major applications, and will promulgate audit log management procedures for account processes and procedures.
Challenge Lack of Security Training for Information Systems Staff: The OIG report that Information Systems staff often lack appropriate security training. At a number of posts, Information Systems Security Officers are not performing required duties primarily because of competing priorities, inadequate guidance, or a lack of planning.
Actions Taken The Department has developed and implemented a role-based Information Assurance (IA) training program that meets the Federal requirements and guidance associated with the Federal Information Security Management Act of 2002 (FISMA) and Office of Personnel Management (OPM) regulations. Information Systems Security Officers (ISSO) receives appropriate guidance and training within one year of appointment. The ISSO course is a 40 hour instructor-led training course.
Actions Remaining IRM will continue to work with DS to develop role based training for IT professionals who have elevated account (administrative) privileges. This training program is expected to be completed this calendar year.
Challenge IT Contingency Planning Requirements: The Department needs to put in place a tracking methodology to ensure bureaus and posts comply with information technology contingency planning requirements.
Actions Taken Local conditions vary so markedly that contingency planning at each mission is necessarily unique to post and to local civil and environmental conditions. Post's IT contingency plan is required to be incorporated into its emergency action plan. As noted by 12 FAH-1 H-231 the emergency action committee (EAC), as designated by the chief of mission is responsible for full mission participation in the completion of emergency preparedness activities and the Department looks to the EAC to rate effectiveness of local contingency strategies as measured against the context of local conditions. The Department is working on additions to 12 FAH-1, Emergency Planning Handbook that will allow IT contingency planning to be incorporated into the overall emergency action planning and automated tracking process.
Actions Remaining Action will be completed after additions to 12 FAH-1 that will allow IT contingency planning to be incorporated into the overall emergency action planning and automated tracking process.
Challenge Implementation of Cloud Computing: The challenge is to implement the cloud strategy in a way that provides genuine operational and customer benefits across the Department. Transitioning existing, traditionally acquired, infrastructure to the cloud is a lengthy and complex process that involves policy, security, performance, budget, acquisition, and human resources. To achieve lasting benefits, it requires an incremental approach, establishing an internal private IaaS (Infrastructure as a Service) cloud offering consistent with NIST guidelines.
Actions Taken As a key Departmental strategic priority goal, the Department has implemented a tailored cloud computing program, which calls for a hybrid approach to cloud computing. This approach has two primary elements. The first, is the use of the public cloud for low security risk "open" systems; to date, five systems have been migrated to the public cloud. The second, is the transition from traditionally acquired infrastructure to a cloud computing model, which is a longer term and more complex transition process. In addition, the Department has established the Cloud Computing Clearinghouse to coordinate cloud initiative across the Department and to leverage best practices across industry and government.
Actions Remaining The Department will continue to transition existing infrastructure toward an internal private IaaS cloud model leveraging the Working Capital Fund (WCF) and developing capabilities consistent with NIST guidelines.
Challenge Systems Development: Collection and interpretation of customer requirements is a key factor to the success of application development when following the System Development Life Cycle (SDLC) process, and in some cases, this is not working. Collection of requirements should also include determining if another solution already exists.
Actions Taken Project planning training and certification is available for SDLC including requirements. The Managing State Projects (MSP) course is required for all project managers, and OMB requires that major projects be managed by government managers who are Project Management Professional (PMP) certified. Under Project One Voice, the applications working group identified one finding for systems developers, particularly those developing systems where Post are primary users, to engage the user community to gather and help validate requirements. In addition, a working group was established to define best practices for systems analysis and collection of customer requirements, which will be published in an update to MSP methodology focusing on IT projects (MSP-IT) that includes gate reviews by Enterprise Architecture (EA) to mitigate duplicative initiatives.
Actions Remaining IRM will finalize the MSP-IT methodology, which will include gate reviews prior to any systems development, Bureaus should consult with the eGov PMO (including EA) to determine if a similar system is in development, or has been developed.
Financial Management
Challenge Improving Internal Controls over Financial Management: During the audit of the FY 2011 financial statements, an independent auditor identified potentially material amounts related to after-employment benefits provided to locally employed overseas staff that had not been previously reported on the Department's financial statements, which impacted the FY 2011 and 2010 financial statements. The independent auditor (IA) also identified significant internal control deficiencies related to financial reporting, property and equipment, budgetary accounting, unliquidated obligations, accounts payable accruals, and information technology.
Actions Taken For the four FY 2011 principal financial statements, the Department received an unqualified ("clean") opinion for the Statement of Budgetary Resources and the Consolidated Statement of Net Cost. However, late in FY 2011, the independent auditor (IA) identified issues with the Department's reporting of after-employment (i.e., retirement) benefits for the Foreign Service Nationals (FSNs) employed around the world. Consequently, the IA issued a qualified opinion for the Consolidated Balance Sheet and Statement of Changes in Net Position. The Department has put in considerable effort this year to address the priority concerns highlighted in the FY 2011 Report of Independent Auditors. In particular, the Department worked methodically with the IA and others to: (1) establish a comprehensive inventory of after-employment benefits; (2) determine the correct accounting standards to use for reporting FSN after-employment benefits'; and (3) establish the methods to calculate the projected liabilities for these after-employment benefits. In addition, the Bureau of the Comptroller and Global Financial Services (CGFS) continues to work with all Bureaus and posts to make improvements in other areas identified as significant deficiencies, such as our management of property and equipment, unliquidated obligations and the accounts payable accruals process.
Actions Remaining CGFS is in the final stages of completing the methods for calculating the projected liabilities for the after-employment benefits in order to address this deficiency for the FY 2012 Financial Statements. In FY 2013, the Department will establish a new global defined contributions after-employment plan for posts to participate in that will provide a uniform and standard after-employment benefit option.
Challenge Recovery of Improper Payments: The OIG reported that the Department had taken steps to comply with the Improper Payments Information Act of 2002, which had been amended in 2010 by the Improper Payments Elimination and Recovery Act (IPERA). However, the Department's improper payments risk assessment methodology was insufficient, recapture audit activities were not performed for all types of improper payments or all payments, and some improper payment disclosures required to be included in the Agency Financial Report were omitted or were inaccurate.
Actions Taken The Bureau of the Comptroller and Global Financial Services (CGFS) concurred with many of the IPERA audit review findings. Specifically, we agreed that stronger policies and procedures for our risk assessment activities, recapturing activities, and reporting activities should be developed and documented, but did not agree that the risk assessment methodology was insufficient. During FY 2012, we have documented Standard Operating Procedures, and prepared updates to the FAM and FAH for the impact of IPERA. We have also worked to bolster our IPERA risk assessment process where appropriate and developed a multi-year transition plan. As required by Public Law No. 111-204, Improper Payments Elimination and Recovery Act of 2010, agencies are required to review programs and activities to identify those that may be susceptible to significant improper payments in the year after enactment (i.e., 2011) and at least once every three fiscal years thereafter for programs deemed not risk susceptible. For FY 2011, based on a risk assessment performed in FY 2011, the Department reported that it did not have any programs deemed susceptible to significant improper payments. As such, the Department is not required to perform the next full risk assessment of programs and activities until FY 2014. During FY 2012 and FY 2013, we will conduct a full risk assessment for any programs or activities that experience a significant change in legislation or significant funding increase. Also, in FY 2013, we will begin our efforts to perform a full risk assessment that would incorporate those changes made to bolster our process (e.g., including changes and results of our Do Not Pay efforts) with the objective of completing the full risk assessment required by mid-FY 2014.
Actions Remaining Incorporating these new efforts will be a multi-phased process. As noted above, the Department does not intend to perform the next full risk assessment of programs and activities until FY 2014. For FY 2013, the Department will determine whether any programs or activities experience a significant change in legislation or significant funding increase, and conduct a full risk assessment for any programs or activities that meet those criteria. If any programs are determined to be high risk, the Department will also pilot additional recapture auditing activities to explore the inclusion of additional payment types, audit activities for higher-risk programs, analytics, and a documented cost-benefit analysis into our current recapture audit process. These specific requirements will be evaluated and implemented to the extent they are cost-effective and a beneficial use of government funds.
Challenge Border Security Program: Currently, the Department's Border Security Program (BSP), which supports activities related to consular relations, security, information resource management, and training, relies on funding from certain consular-related fees and surcharges. However, a number of clarifications are needed to the existing guidance on the use of the funds and for monitoring Border Security Program expenditures.
Actions Taken The Bureau of Consular Affairs (CA) is in the process of updating 1 FAM 250 to formalize its authority as the overall program management office for the Border Security Program. In addition, CA is developing Service Level Agreements (SLAs) with Department bureaus that receive consularfee funding, in order to formalize the roles and responsibilities for all parties involved in the BSP. CA will continue to use the annual budget formulation process, along with the new SLAs, to formalize the process for prioritizing BSP funding requests.
Actions Remaining CA intends to work with its BSP-partner bureaus to design a process for developing goals, indicators, and performance measurements, and to use that process to develop an overarching goal and performance management structure for the BSP. As part of the new SLAs, CA will monitor the use of BSP funds by performing quarterly reviews of Bureau expenditures. In addition, CA plans to evaluate whether overseas posts are spending border security funds in accordance with Department guidelines, as part of the Bureau-wide internal review program.
Military to Civilian-Led Presence: Iraq
Challenge Sustainment of Transition and Achieving Foreign Policy Goals in Iraq: On January 1, 2012, the Department became solely responsible for the U.S. Mission-Iraq (USM-I). Although the United States has completed the transition from a military-led to a civilian-led presence with some measures of success, attaining the goals of aiming to orient the Government of Iraq (GOI) and the Iraqi economy towards self-sustainability and a strengthened democracy remains unclear amidst environmental and political uncertainty and lack of precedent for such a mission. The sustainment of the transition includes efforts to: establish a long-term diplomatic presence leading to normalizing the bilateral relationship in economics, culture, diplomacy, and security; the internal stability of Iraq; and increased stability in the region; and provide the infrastructure necessary for the Department's long-term diplomatic mission including staffing, building, and supporting sites throughout Iraq.
Actions Taken Efforts to promote Iraq's democratic development include strengthening Iraq's democratic institutions, specifically provincial elections in 2013 and national elections in 2014. Staff at the Embassy meets regularly with President Talabani, Prime Minister Maliki, cabinet ministers, parliamentarians, and civil society leaders throughout Iraq. Our civilian presence as planned will continue to permit significant engagement and outreach activities fully supported by our Regional Security Office.

In the past year, Iraq has made strides to improve relations with regional and international actors. It hosted a successful Arab League Summit with twenty-one delegations, including nine heads of state/government. Iraq also hosted the P5+1 talks on Iran's nuclear enrichment program. Iraq faces challenges addressing the crisis in Syria, and aspects of its relations with Turkey and GCC countries, but there is open dialog and signs of movement, including complex relations with Kuwait. The Department is providing substantial diplomatic support to Iraq's efforts to re-establish itself in the Arab world through strong, responsible relations with its neighbors, and with the international community.

Under the Strategic Framework Agreement, the Governments of Iraq and the United States continue to work together at the most senior levels on a wide range of issues through eight Joint Coordination Committees (JCC), including defense and security, education and cultural affairs, energy, law enforcement and judicial cooperation, politics and diplomacy, services, and trade and finance. In recent months, we have hosted Iraq's Education and Defense Ministers, Deputy Prime Minister Shahristani, Deputy National Security Advisor, and Chief Justice of the Supreme Court Medhat for the latest round of JCC meetings on education, defense, energy, and judicial issues.

The Department of State has assumed lead for logistic operations in Iraq in January 2012. The principal vehicle remains the Logistic Civil Augmentation Program (LOGCAP) contract, which State oversees, with assistance from personnel by the Defense Contract Management Agency (DCMA), the Defense Contract Audit Agency (DCAA), and the Defense Logistics Agency (DLA). State has awarded a new contract for facilities maintenance which will replace similar LOGCAP functions at State sites on a rolling basis throughout Iraq in FY 2013.
Actions Remaining State's own logistic contract, the Baghdad Life Support Service (BLiSS), will be competed in FY 2013 and is scheduled to replace remaining LOGCAP functions at this site by 2014. The Department is enhancing its contract oversight capacities in Iraq; whether further assistance will be requested by the Department of Defense contract oversight organizations in FY 2014 is not yet decided. State Department work on infrastructure construction will concentrate on work require for further facility consolidation, with a permanent New Consulate Compound (NCC) in Erbil slated for completion in 2017. The Department's Bureau of International Narcotics and Law Enforcement Affairs (INL) operates Embassy Air Iraq, with a fixed and rotary wing fleet, which will be phased out as reliable, safe commercial alternatives become available.
Challenge Rightsizing: In February 2012, the Department announced a formal effort to rightsize the U.S. mission in Iraq as it evaluates both the achievement of its policy goals and the political and security environment. A number of facility changes are planned, including transferring the Baghdad Police College Annex to the Iraqis by the end of 2012 and moving the Office of Security Cooperation-Iraq from the Embassy Military Attaché and Security Assistance Annex onto the embassy complex by mid-2013, reducing or potentially ending its presence at another Baghdad site, Embassy Annex (EMASAA) Prosperity. Such closures and reductions will likely have significant impacts on the staffing levels of other agencies involved in the mission and have implications on the overall mission infrastructure and security requirements. As the Department continues the effort to rightsize its operations in Iraq, it is important that mission priorities, security, and cost considerations are synchronized.
Actions Taken Embassy rightsizing is not driven by facility closures; facility closures occur as mission-driven rightsizing steps are taken, along with whatever security and support downsizing as permitted by increased normalization of conditions in Iraq. The goal is the most effective Mission structure to achieve our highest priority strategic goals, while keeping our people safe and supported. The closure of Baghdad Police College Annex (BPAX), for example, did not prompt the design of the new Police Development Program (PDP), but reflected decisions by INL made about PDP, in consultations with the Government of Iraq on the evolving requirements of the program. The closure of Office of Security Cooperation (OSC)-I base Kirkuk reflected the decision to shift specific Foreign Military Sales (FMS) cases to other locations; State programs in Kirkuk continue from a temporary location in Erbil, but no final decision has been made about whether to reopen Consulate Kirkuk at a later time. That decision will be made based on mission, security, and cost-effectiveness. Similarly, the projected closure of EMASAA and Embassy Annex Prosperity by the end of calendar year 2013 were based on decisions about the structure of OSC-I and the projected support requirements of the Chancery, respectively, and were made in full consultation with affected agency and by the Chief of Mission, in accordance with responsibilities laid out in National Security Decision Directive (NSDD)-38 and the President's Letter of Instruction.
Actions Remaining The Department will continue to rightsize operations in Iraq as increased normalization conditions in Iraq permit. Mission priorities, security and cost considerations will continue to be taken into consideration as the effort proceeds.
Military to Civilian-Led Presence: Afghanistan
Challenge Supporting and Sustaining the Civilian Presence in Afghanistan: The Department continues to face challenges in supporting and sustaining the civilian presence in Afghanistan as the U.S. military withdraws. Because the foreign policy goals are similar to those in Iraq, there are many opportunities for lessons learned in the planning, execution, and sustainment of Afghanistan transition efforts. U.S. officials have emphasized that Afghanistan has a much greater dependence upon foreign assistance because it has limited revenue-generating resources, more widespread energy infrastructure challenges, and a high illiteracy rate.
Actions Taken The Department recognizes that environmental and historical factors coupled with the internal security threat continues to challenge U.S., ISAF, and Afghan abilities to maintain adequate security while developing and training the Afghan security forces. Alongside these security efforts, our mission has worked hard to overcome Afghan governance and development issues, execute counternarcotics programs, and implement rule of law and anti-corruption initiatives in order to strengthen the Afghan state and ensure stability.
Actions Remaining The Department will continue to work with its allies and Afghanistan to sustain both short and long-term objectives in the areas critical to achieving Department, U.S., and Afghan strategic goals central to the transition.
Challenge Increased Civilian Presence in Afghanistan: In September 2011 and May 2012, OIG and the Special Inspector General for Afghanistan Reconstruction (SIGAR) reported on challenges the Department faced in conjunction with an increased civilian presence in Afghanistan related to the accounting, management, and reporting of costs. These challenges included increased costs associated with the assumption of Department of Defense security duties, costs of opening new consulates, and need for housing and office space for the increased civilian personnel.
Actions Taken As our civilian presence consolidates from our presence in over 80 plus military platforms into our enduring presence posts, the Department will continue to minimize operating costs whenever possible, to create an enduring and normalized presence that is consistent with global priorities.
Actions Remaining The Department will continue to use a "Whole of Government" approach to leverage capabilities across agencies and avoid redundancies. Review of staffing and funding projections will continue with an aim to scale the U.S. enduring presence appropriately in Afghanistan post-2014.
Challenge Security: OIG and SIGAR have also reported that security remains a primary challenge in Afghanistan. Low literacy levels and the lack of basic vocational skills have hindered the training and development of the Afghan National Security Forces (ANSF).
Actions Taken This challenge falls largely under the purview of the Department of Defense (DoD). According to DoD, literacy training for the ANSF is a major part of a national transformation in human capital development. So far, more than 150,000 ANA and 118,000 ANP members have received some level of literacy training since November 2009. An average of 5,200 ANA and 4,500 ANP receive training on any given month. Literacy training enables ANSF service members to learn required skills at vocational schools, enhances instruction on human rights and the rule of law, and promotes the long-term sustainability of the force as well as post-service economic opportunity. As focus has shifted from force growth to force development, literacy training efforts have likewise begun shifting to increasing the number of ANSF personnel at the international standard for functional literacy (Level 3). Level 3 literacy is also required for ANSF personnel to attend professional military and branch schools, as it enables students to learn technical information and skills. Increasing the number of ANSF personnel at Level 3 literacy will have a significant positive impact on basic vocational capacity of the ANSF. As members return to civilian life from the ANSF, those benefits spread across the country to society as a whole.
Actions Remaining The Department of Defense continues to pursue literacy and vocational training within ANSF and civilian institutions. What, how, and if this training will continue post-2014 will largely depend on the enduring presence military footprint.
Foreign Assistance Coordination and Oversight
Challenge Foreign Assistance Coordination and Oversight: The Department must establish a project management expertise to manage, monitor and evaluate foreign assistance programs.
Actions Taken On February 22, 2012, the Deputy Secretary for Management and Resources distributed a revised Department policy on program evaluation. This policy applies to the Department's diplomatic and development programs, projects, and activities and calls for the establishment of a Bureau evaluation plan and coordinator. Evaluation Guidance was released in Spring 2012 outlining planning for evaluations, data collection methods, and roles and responsibilities, and briefings offered to the bureau evaluation coordinators. In addition, the Department awarded a contract for use by the bureaus to obtain contractual support in evaluating diplomatic and development efforts and embarked on high-level data driven reviews of cross-cutting initiatives, such as Economic Statecraft, Global Health, and Global Climate Change.
Actions Remaining The Office of U.S. Foreign Assistance Resources (F) and the Bureau of Budget and Planning (BP) will continue to collaborate with the Foreign Service Institute to refine and develop specific evaluation and performance management-related modules and training throughout their current course curriculum. F and BP also will continue to advocate for allocating funding specifically to support program evaluations and provide evaluation expertise and knowledge to bureaus and offices.
Diplomacy with Fewer Resources
Challenge Rightsizing: The Department is working closely through the Office of Rightsizing and regional bureaus to ensure that staffing at overseas missions and domestic bureaus is appropriate, given the high cost of maintaining U.S. staff overseas.
Actions Taken The Department takes seriously the mandate to rightsize the U.S. Government presence overseas. All overseas posts are now subject to "rightsizing reviews" approximately every 5 years to monitor staffing changes and develop staffing projections for out-years. As the Department expands to meet global challenges, this process assists the Department and USAID in appropriately allocating positions, adding and decreasing staff to meet changing needs.
Actions Remaining Chief of Missions, who have clear authority via National Security Decision Directive 38 (NSDD-38) to control staffing levels at posts overseas, will continue to consult with the Department's regional bureaus and the agencies comprising their missions in making decisions about staffing levels.
Challenge Regionalization of Administrative Services: The Department should expand regionalization of administrative services to achieve economies of scale in administrative support and reduce the average operating costs for posts.
Actions Taken Regionalization of support services, voucher processing and six other management initiatives make up the "Top 8" target areas for cost reductions identified by the Regional Initiatives Council and spearheaded by M/PRI. The other six include warehousing, expendable supplies, furniture pools, utilities, local transportation and TDY cost containment.
Actions Remaining The Department will continue to capitalize on opportunities to consolidate administrative support services to better serve medium and small-sized posts.
Challenge Redundant Management Services: The Department has achieved limited success in eliminating redundant management platforms and services. Despite progress at many posts, redundancies remain in basic service areas, e.g. furniture and furnishings, motor transportation, administrative procurement, and locally employed staff recruiting. The QDDR underscores the Department's commitment to continue consolidating Department and USAID administrative platforms. While the Department focuses on duplicative services maintained by USAID, OIG recommends it also review other sources of redundancy, particularly at posts with Narcotics Affairs sections and Center for Disease Control offices.
Actions Taken In summer 2012, the Department advised all posts with a USAID presence that the State Department and USAID must combine furniture pools. Posts were further advised to establish a furniture pool, if one did not already exist, to encourage other agencies to join and reduce redundancies.
Actions Remaining In FY 2013, The Department will calculate for all interested agencies an assessment of other agency furniture and the estimated one-time and on-going annual assessment cost for that agency to join each post's furniture pool. Posts must also continue to encourage wider participation.
Public Diplomacy
Challenge Oversight of Exchange Visitor Program: The Department must improve oversight of exchange visitor programs, and the Department's Management Control Steering Committee identified Summer Work Travel program as a "material weakness" with a need to develop a corrective action plan to monitor reforms.
Actions Taken The Summer Work Travel (SWT) Program is currently in the midst of the most significant series of reforms in its nearly 50-year history. Beginning with an Interim Final Rule in July 2011, followed by a cap on the SWT program size, a moratorium on new sponsors, a second Interim Final Rule in May 2012, and a major restructuring of the Office of Private Sector Exchange, which includes the creation of a third office, the Department is now poised to publish a final set of reforms in 2013. Additionally, ECA completed an unprecedented SWT national monitoring program during the summer of 2012, visiting 650 work and housing sites in 31 states.
Actions Remaining ECA believes that the continued rulemaking in early 2013 combined with the 2013 OIG compliance follow-up review and internal administrative reform will address this weakness.
Challenge Strategic Framework for Public Diplomacy: With tighter budgets, the Department needs to think more strategically about how best to improve the impact of public diplomacy and to use resources to engage, inform and influence foreign publics in support of U.S. strategic objectives.
Actions Taken The Department has undertaken a number of initiatives to better deploy resources in line with current priorities and to improve strategic planning and reporting for public diplomacy. There have been significant shifts of Public Diplomacy resources within bureaus to bring funding levels in line with current priorities, and we have shifted funds among bureaus as needed.
Actions Remaining FSI's Public Diplomacy Training Division will continue to emphasize and expand strategic planning courses, including the recent launch of an online course which will allow a baseline level of knowledge across the public diplomacy spectrum. The Public Diplomacy Implementation Plan template will be finalized by the end of FY 2013 for piloting in FY 2014. Improvements to the Mission Activity Tracker will continue throughout FY 2013.
Challenge Security Issues: Security considerations have increasingly restricted public access to U.S. embassies and consulates. Finding the right balance between legitimate security concerns and the need to proactively engage foreign publics is a challenge in the execution of effective public diplomacy.
Actions Taken The Department created a specific office under the Bureau of International Information Programs (IIP) to oversee planning, standards, management and evaluation of American spaces. Clear standards have been developed, which will ensure that the appropriate public diplomacy platform is used for each environment and that sustainability, as well as evaluation metrics, are an integral component. In addition, a pilot program that will allow a public diplomacy section to "go on the road" with their outreach, is being deployed to the field.
Actions Remaining The Department continues to explore innovative ways to ensure public diplomacy is engaging critical audiences where they are, rather than relying on the audience to seek out U.S. personnel. The Department is attuned to possible impact on participant levels when a Public Affairs Section moves from an off-embassy/consulate location into a more secure embassy/consulate compound. As a pilot project, the Consulate General in Guangzhou is collecting data to observe the effect of increased security on public diplomacy engagement at the new consulate building opening in Spring 2013.
Challenge Use of Social Media: Posts and domestic bureaus are making very effective use of social media at posts, including Facebook, Twitter, and popular local platforms. Social media efforts are loosely coordinated across the Department, with each bureau and mission largely determining for themselves how to apply these new communications technologies to advance their strategic goals. This approach has proved successful thus far, with the Department being widely recognized as a leader in this area amongst other U.S. Government agencies and ministries of foreign affairs. One challenge that the Department faces is ensuring diplomacy keeps pace with non-state actors' use of technological innovations such as new mobile devices and applications, while at the same time ensuring the new devices and applications are adequately supported and do not pose security risks.
Actions Taken The Office of the Under Secretary for Public Diplomacy and Public Affairs has led efforts across the R-family of bureaus to respond to recommendations made by the OIG in ISP-1-11-10 "Review of the Use of Social Media by the Department of State." As part of this response, the Office of Policy, Planning, and Resources for Public Diplomacy (R/PPR) organized a three-day cross-Department working group (October 1-3, 2012) chaired by R and the Senior Advisor for Innovation on integrating social media as a core function of the Department's external communications. Key stakeholders from across the Department and from overseas missions participated. The working group focused on assessing the current state of social media use at the Department, describing desired future capabilities, and generating actionable recommendations for advancing efforts across the organization. In addition, the Bureau of Public Affairs is in the process of updating the Foreign Affairs Manual (FAM) to provide guidelines for the use of social media by Department personnel, in both their professional and personal capacities.
Actions Remaining Recommendations made by the Social Media Working Group will be considered by leadership for action, including but not limited to the establishment of appropriate decision-making mechanisms at leadership levels across stakeholder bureaus to address common needs in a strategic, holistic fashion where appropriate and empowering posts and bureaus to continue to innovate and experiment to advance the Department's mission. The Department will find ways for posts within and across regional bureaus to access and utilize innovation at other posts such as sharing app development and social media technical expertise. The Bureau of Public Affairs will finalize the FAM updates via the eFAM process.
Effective Embassy Leadership
Challenge Effective Embassy Leadership: Ensuring that leaders and managers with appropriate skills lead our missions.
Actions Taken The Department has identified effective leadership of our missions abroad as a priority under the QDDR. Leadership training for Chiefs of Mission (COM) and Deputy Chiefs of Mission (DCM) has been enhanced with attention to leadership of multiagency missions abroad. Performance management training has been developed and instituted for managers at all levels. Interagency leadership experience has been emphasized in the Department's selection processes for COMs and DCMs.
Actions Remaining The Department will continue to implement OIG recommendations on leadership skills and training and work toward the priorities of the QDDR, contacting other Federal agencies as well as soliciting input internally. The Department is developing a model for worldwide assessment of mission leadership performance based on leadership components identified by the Office of the Inspector General. The assessment will include, as the OIG has recommended, "provision for the appropriate Assistant Secretary to follow up with corrective action where necessary." We expect to vet the model in the coming months in preparation for a possible pilot run in 2013.
Consular Operations
Challenge Consular Operations: Consular officers are the first line of defense in border security, and technology is at the core of their operations. The Department's refocused technology platform, ConsularOne, is being designed to help posts efficiently maintain security and manage large consular workloads. In the meantime, existing infrastructure and software do not always keep up with demands. On several recent inspections, including those in Caracas and Singapore, the OIG found that inadequate bandwidth and other systems' problems slowed down visa processing times to unacceptable levels. Reducing visa processing times is a priority of the Department and the Administration, given the positive impact international visitors have on our travel and tourism industries.
Actions Taken In FY 2012, the Bureau of Consular Affairs (CA), Office of Consular Systems and Technology (CA/CST) implemented aspects of a service oriented architecture that serve as the foundation to ConsularOne user-interface development. Meanwhile, this architecture can be leveraged for enhancing legacy systems by sharing common data sets, thus improving overall systems performance.
Actions Remaining CA/CST is also in the midst of procuring and implementing an enterprise queuing system. This system will provide statistics which will enable CA, over time, to help to identify inefficiencies in the visa process, streamline operations, and ultimately reduce travelers' wait times. CA/CST will continue to work with the Bureau of Information Management (IRM) in optimizing bandwidth in this region.
Challenge Physical Facilities for Consular Operations: Physical facilities for consular operations present particular challenges, including the difficulty in projecting consular workload 10 years into the future, lengthy timelines for new construction, and mandates for secure facilities. At several missions, including Caracas and Port-au-Prince, OIG found consular section design did not meet requirements regarding space, security, privacy, and accessibility. The Bureau of Overseas Buildings Operations (OBO) and the Bureau of Consular Affairs (CA) have developed adequate designs.
Actions Taken CA and OBO have worked together in the last year on a coordinated approach to consular section physical facilities. CA and OBO meet regularly in working group meetings to discuss the design of consular sections. CA and OBO have begun close collaboration on conducting studies of flow through consular sections to maximize the efficiency of waiting rooms and internal processing. CA and OBO met with the consular chief from Caracas in June 2012 to discuss the current space limitations of the consular section and come up with options to better use their space. CA has been funding reconstruction and expansion projects in China and Brazil and has worked closely with OBO in creating and opening new consulates in Porto Alegre, Belo Horizonte, and Wuhan. In August 2012, CA funded non-construction level renovations to sections around the world to improve physical facilities and increase workflow and efficiencies. CA plans additional funding in FY 2013 for construction level projects, which will require OBO review.
Actions Remaining CA and OBO will continue to coordinate on ways to develop adequate designs for consular workspace. CA will work with OBO to establish a permanent position within CA/EX to serve as the liaison and help facilitate cooperation between the two bureaus.

 

 




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