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Section Table of Contents

  • Inspector General’s Statement on the Department’s Major Management and Performance Challenges
  • Management’s Response to Inspector General
  • Summary of Financial Statement Audit and Management Assurances
  • Payment Integrity and Other Laws and Regulations
  • Resource Management Systems Summary
  • Heritage Assets
  • Real Property

Inspector General's Statement on the Department's Major Management and Performance Challenges

Introduction

Photo showing Acting Inspector General, Matthew S. Klimow.

This report is provided in accordance with the Reports Consolidation Act of 2000.1 Each year, the Office of Inspector General (OIG) for the Department of State (Department) identifies the most significant management and performance challenges facing the Department and provides a brief assessment of the Department’s progress in addressing those challenges.

We assess progress primarily through our compliance process, which relates to individual and often targeted recommendations. Our oversight work often provides a unique window into topical and emergent issues. Throughout much of FY 2020, the nation has been faced with the effects of the Coronavirus (COVID-19) pandemic, which was first identified in China in December 2019. OIG has had to adapt its work to ensure our critical functions continue. OIG’s travel schedule for audits and inspections has been affected and other processes have had to be altered to meet study objectives. Nonetheless, we issued 72 reports in FY 2020, and based on a thorough review of that work and past work, we identify the following major management and performance challenges the Department faced in FY 2020:

  1. Protection of people and facilities
  2. Management and oversight of contracts, grants, and foreign assistance
  3. Information security and management
  4. Financial and property management
  5. Operating in contingency and critical environments
  6. Workforce management
  7. Promoting accountability through internal coordination and clear lines of authority

We have included within this document examples of reports and findings that are particularly illustrative or noteworthy on certain points. In addition to publicly available work, OIG issues a number of Sensitive But Unclassified and Classified reports throughout the year. Many of the findings in those reports reinforce our assessment of these management challenges, particularly as they relate to protection of people and facilities and information security and management.

Continued attention to the management challenges identified will improve the Department’s capacity to fulfill its mission while exhibiting good stewardship of public resources. OIG encourages the Department to consider ways that specific recommendations might be applied broadly to make systemic improvements that will result in meaningful and permanent change.

It is worth noting that one of the most significant challenges facing the Department has been and will continue to be the global outbreak of COVID-19. Although OIG has not yet completed any work specific to the pandemic, we anticipate that much of OIG’s future work will focus on evaluating the impact of the pandemic on the Department’s people, programs, and operations. In so doing, OIG looks forward to assisting the Department in its efforts to improve the efficiency and effectiveness of its programs and operations.

Executive Summary

Each of the management challenges described in this report have an effect on the Department’s ability to perform its mission and to safeguard taxpayer resources while doing so. As such, each challenge independently warrants ongoing attention. It is equally important for the Department to consider how all of the challenges listed interact and how it can address them systemically. We continue to be committed to assisting the Department as it strives to improve the effectiveness of its programs and operations.

Protection of People and Facilities

With natural disasters, environmental hazards, crime, conflict, and humanitarian crises posing a risk to the health and safety of Department personnel and the security of Department property overseas, protecting people and facilities continues to be a top management challenge. OIG also found that the Department’s efforts to construct and maintain safe and secure diplomatic facilities have been impacted by construction delays and design flaws due in part to contract management deficiencies that resulted in significant financial costs and security implications for the Department. OIG’s work has also found deficiencies in residential security, the operation of official vehicles, and emergency preparedness that put Department personnel and their families at risk. For instance, we found that Department personnel continue to occupy residences abroad that do not meet Department safety standards and several overseas posts have failed to keep up with post-specific emergency planning.

Management and Oversight of Contracts, Grants, and Foreign Assistance

Department entities domestically and abroad did not consistently and adequately monitor contractor performance, conduct thorough invoice reviews, and oversee grants and foreign assistance programs. A growing body of OIG work also illustrates the difficulty the Department faces in managing large, long-term construction contracts, particularly in contingency environments. These issues directly affect the protection of people and facilities and present unique challenges in the realm of workforce management. Inexperienced and untrained personnel charged with oversight lead to problems with monitoring and ensuring compliance with requirements, as well as with the routine review and approval of expenditures. Finally, OIG’s work highlights inadequate Contracting Officer’s Representative technical knowledge that continues to result in issues with contract oversight.

Information Security and Management

OIG has acknowledged steps the Department has taken to improve its information security program; however, challenges persist. For example, we found that numerous control weaknesses affected program effectiveness and increased the chance of cyberattacks and threats to the Department. Also, pervasive Information Systems Security Officer concerns that were first identified in 2017 still exist today. The failure to record information system audits, complete account reviews, or monitor the dedicated internet network can leave the Department vulnerable to potential unauthorized access and malicious activity. Issues with developing, testing, and training on contingency plans also affects the challenge of protecting the Department’s staff and facilities.

Financial and Property Management

Internal control deficiencies identified in an independent audit negatively affected the Department’s ability to account for real and personal property in a complete, accurate, and timely manner. Inadequate acquisition planning; improper warehouse, inventory, and property transfer controls; and mismanagement of bulk fuel and the Department’s motor vehicle fleet contributed to this challenge. OIG notes that a significant aspect of addressing this challenge relates to the Department’s ability to identify internal control weaknesses in the first place and its subsequent compliance with relevant standards. This issue affects management of both the Department’s financial resources and its property. As with oversight of contracts and grants, attention to this challenge is particularly important to ensure that the Department appropriately oversees and uses public resources.

Operating in Contingency and Critical Environments

In some cases, the Department must operate in “critical” environments, or areas that experience various threats in the form of conflict, instability, disease, or natural disasters. These pose their own set of problems and contribute to existing challenges. OIG’s work has identified contracts and other foreign assistance that is susceptible to inadequate oversight, with the absence of clear guidance and limited staff contributing to such weaknesses. Staff reductions in Afghanistan and Iraq have contributed to expedited staffing reviews, while OIG also identified the lack of a centralized database for the special immigrant visa program in Afghanistan. This contributed to delays and increases the Department’s risk for fraud and threats to national security.

Workforce Management

Although the Department has experienced periods of transition in the past fiscal year, it continues to strive to be flexible and meet its resource needs, to include providing adequate compensation in challenging areas. Nevertheless, OIG continued to identify staffing gaps, frequent turnover, poor leadership, and inexperienced and undertrained staff that contribute to challenges in workforce management. The issue of underqualified staff intersects with the challenge of contract oversight. Although OIG’s inspection work frequently highlights strong embassy leadership, we did identify areas where trust in leadership is lacking. For example, in one report the detail of a career employee was ended after discussion about that employee’s perceived political views. As a result, OIG recommended training on the Department’ merit-based personnel rules for political appointees.

Promoting Accountability Through Internal Coordination and Clear Lines of Authority

Clear lines of authority are necessary for ensuring that the Department is able to hold decision makers accountable. However, OIG finds that poor coordination and vague or dispersed authority are at the root of some of the Department’s other deficiencies. As noted in our summary, OIG found that the Department lacks coordination and guidance on the investigative and disciplinary processes for its handling of sexual harassment reports. An absence of joint guidance for offices and poor coordination and unclear goals have contributed to such lapses. It’s important that the Department eliminate conflicting lines of authority to ensure accountability.

1. Protection of People and Facilities

The Department’s global presence and the continued threat of physical violence directed toward U.S. diplomats makes the protection of people and facilities an ongoing top management challenge. Although the Department prioritizes the safety and security of its personnel and facilities, all U.S. diplomatic facilities face some level of risk. Additionally, natural disasters, environmental hazards, and ordinary crime continually pose risks to the health and safety of Department personnel and their families serving abroad.

Constructing and Maintaining Safe and Secure Diplomatic Facilities

Constructing and maintaining safe and secure diplomatic facilities has been an ongoing challenge, which is compounded in regions affected by conflict and humanitarian crises. OIG continues to recommend steps the Department can take to improve adherence to its own policies and procedures.

In one particular review, OIG found that work on a new embassy compound in Ashgabat, Turkmenistan, had been significantly delayed because the Bureau of Overseas Buildings Operations (OBO) had allowed construction on one building to begin in a physical location that violated the city’s standards.2 Although the crux of our review related to contract management deficiencies and the significant financial cost to the Department to address the situation, we also noted that there were security implications. For example, as a result of the delays, embassy operations continued to be conducted from multiple locations and in facilities that did not meet the Department’s security requirements, including appropriate setback and standards for seismic activity.

A major construction project in London illustrated this challenge as well. OIG found that inadequate attention to major systems design and local building requirements led to design flaws in a semicircular pond that serves partly as a security barrier. Additionally, defects related to security, fire safety, and elevators were noted by OBO after the facility had been declared substantially complete.3

In 2004, OBO established a lessons learned program to update design criteria, guidance, and processes in support of the planning, design, construction, operation, and maintenance of OBO facilities overseas. However, a recent OIG report found that the current program does not capture broader best practices or lessons learned that are critical to OBO’s construction work, including strengthening collaboration among stakeholders, facilitating building maintenance, and improving program and construction management. These important activities have been overlooked in the lessons learned process because OBO has devoted attention and resources solely to collecting and addressing technical design challenges encountered during its construction projects. Additionally, in examining OBO’s internal reporting for construction projects in Amman, Kabul, Ashgabat, and London, OIG found errors and inconsistencies in 33 percent of 125 reports produced between 2013 and 2019 addressing those projects.4

Beyond ensuring the initial construction of safe and secure facilities, the Department is also responsible for comprehensive preventative and routine maintenance of its existing facilities. Our FY 2020 inspection work continued to identify problems related to facilities maintenance at several overseas posts. For example, in Lesotho, two emergency exit doors in a building on the embassy compound lacked the required electrical locks with emergency override and panic devices. Without these safety devices, an alarm does not sound if the doors are opened, and embassy security is not notified if there is an emergency.5

Ensuring the Health and Safety of Personnel Abroad

Our inspection work consistently finds that embassy leadership is engaged on health and safety issues. The Department frequently takes action to address these challenges when identified. For example, in Sweden, embassy staff identified a life safety issue with a large purchase of lamps. Proactive efforts by the embassy resulted in a worldwide safety alert and the vendor’s replacement of the lamps at no additional cost.6 Nonetheless, we also continue to identify instances where a lack of management oversight and failure to follow Department standards create risks for Department personnel and their families. As in previous years, we note the following three areas for improvement: residential security, operation of official vehicles, and emergency preparedness.

Residential Security

Our inspection report findings show that many Department employees and their families continue to occupy residences abroad that do not or cannot be demonstrated to meet Department safety standards.7 To take one example, in Cameroon, OIG found the Post Occupational Safety and Health Officer (POSHO) did not enter into the appropriate system certifications for 41 residential properties listed in the real property database, making it impossible to determine whether residences met standards. In addition, half of the 10 property lease files OIG reviewed lacked POSHO certifications, while another 3 had expired POSHO certifications. Failure to conduct and document safety certifications and maintain housing lease files could lead to employees under chief of mission authority living in unsafe residences.8 Additionally, OIG found several deficiencies at mission residences throughout posts in South Africa that included a lack of smoke detectors, interior and balcony railings that did not meet safety standards, and gates around pools that did not self-close or locks that did not meet the safe height requirement to prevent children from gaining access.9

Operation of Official Vehicles Overseas

As in previous years, several FY 2020 inspection reports identified a lack of compliance with motor vehicle safety standards in the operation of official vehicles overseas.10 OIG found lapses in medical clearances for drivers, outdated or absent safety training for operators of armored vehicles or other official vehicles, and drivers working excessive hours, a practice that increases the risk of motor vehicle accidents caused by driver fatigue. Among several such examples, OIG found that nearly 50 drivers of armored vehicles at the embassy in Mauritania lacked required armored vehicle training. Likewise, a number of drivers had not received standard driver safety training or required retraining, and many held expired medical certifications or never received medical certifications before driving official vehicles.11

Emergency Preparedness

Department guidelines require Department bureaus and U.S. embassies to maintain bureau- or post-specific emergency action plans to respond to situations such as bombs, fires, civil disorder, or natural disasters. Although we frequently find substantial compliance with emergency planning standards, we continue to highlight those deficiencies that could result in significant life and safety issues.

OIG’s FY 2020 work demonstrated that the Bureau of Counterterrorism (CT) and several embassies did not meet Department standards in this area.12 For example, CT did not have a completed bureau emergency action plan, as required. Bureaus are required to develop bureau emergency action plans to identify, prioritize, and perform functions when adverse events affect operations.13 In Eswatini, we found that the embassy’s radio program, which included high frequency radio and the emergency and evacuation radio network, did not provide effective emergency communications. At the time of the inspection, the high frequency radio had been inoperable for approximately 18 months.14

2. Management and Oversight of Contracts, Grants, and Foreign Assistance

The oversight of contracts, grants, and foreign assistance continues to be a significant challenge for the Department. Domestically and abroad, Department entities did not consistently and adequately ensure that foreign assistance programs achieved intended objectives and policy goals, monitor and document contractor performance, conduct thorough invoice reviews, and properly oversee construction contracts.

Designing/Ensuring Foreign Affairs Programs That Achieve Intended Objectives and Policy Goals

The Department continues to face challenges in designing foreign assistance programs that it can ensure will achieve desired program results.15 For example, an audit of oversight of the President’s Emergency Plan for AIDS Relief (PEPFAR) examined, in part, whether the Office of the U.S. Global AIDS Coordinator and Health Diplomacy had overseen selected missions’ performance toward achieving PEPFAR goals. OIG found that across the missions examined, PEPFAR teams expressed concerns regarding performance targets and the Country Operational Plan development process. PEPFAR teams consistently expressed the belief that their input was not considered during the Country Operational Plan development process, especially regarding the attainability of performance targets. OIG noted that the lack of effective communication may affect PEPFAR program implementation efforts.16

One report found that the Bureau of European and Eurasian Affairs, Office of the Coordinator of U.S. Assistance to Europe and Eurasia, could not perform evidence-based analysis of U.S. Government foreign assistance being provided to the region and effectively coordinate funding for policies and programs among all U.S. Government agencies. This could not be done because the Office of the Coordinator of U.S. Assistance to Europe and Eurasia did not have a tool to analyze and maintain the monitoring and evaluation data from its implementing partners to determine whether U.S. policy goals in the region were being achieved.17

In another example, OIG reported that deficient performance work statements as a result of inadequate Contracting Officer’s Representative (COR) technical knowledge led the Bureau of African Affairs (AF) to fund several poorly designed projects that ultimately resulted in wasted funds. For example, one project in Cameroon called for the construction of a barrier wall, but the performance work statement did not require the contractor to conduct a site survey prior to submitting a proposal, which, in part, led to a section of the wall collapsing as a result of excessive rain. AF had to expend an additional $3.3 million for modifications and repairs. Another project in Niger resulted in the construction of an aircraft hangar that was not large enough for the relevant aircraft. Several costly contract modifications were required to address the deficiency, which we found was attributable to inadequacies in the performance work statement.18

In addressing previous challenges, AF successfully updated its Federal assistance risk assessments to better measure terrorist financing risk. As a result of prior OIG recommendations, the bureau also took steps to reduce duplicative and fragmented functions and developed some of the guidance and procedural documents necessary to manage and administer its foreign assistance programs.19 Furthermore, in Mauritania, we reported that the embassy promoted a “whole of government” approach to foreign assistance programming that maximized the effect of foreign assistance resources, minimized redundancies, and ensured consistency with the mission’s priorities.20

Monitoring and Documenting Contractor and Grantee Performance

The Department continues to face challenges in properly overseeing contractor performance. Personnel responsible for contractor oversight must monitor and document performance, confirm that work has been conducted in accordance with the terms of a contract, hold contractors accountable for nonperformance, and ensure that costs are effectively contained. Our FY 2020 work found several examples of deficiencies in the performance of these duties.

In a recent report, OIG selected four task orders associated with four different Facilities Management Services contracts that had a combined value of more than $151 million. Findings revealed that the CORs’ monitoring of contractor performance for three of the four task orders reviewed was inconsistent and not well documented. CORs stated that most performance monitoring occurred through daily interaction and undocumented inspections. However, documentation such as daily and monthly inspection reports, logs and check sheets, and inspection and acceptance reports of completed reimbursable work authorizations are needed to confirm that such performance monitoring actually occurred. The CORs involved with these three task orders did not provide such documentation.21

An audit reviewing 72 reports OIG issued from FY 2017 through FY 2019 showed that 63 (88 percent) of those reports contained findings related to inadequate contract oversight. Thirty-one (49 percent) of those reports cited issues with the training provided to and the experience of CORs and other contract oversight personnel.22 For example, during one project,23 three of seven CORs and alternate CORs interviewed stated that, in their opinions, they did not have the necessary experience to oversee the large and complex contracts to which they were assigned. In addition, four of the seven CORs and alternate CORs interviewed stated that this was their first contract oversight assignment. In another report, OIG identified 13 of 15 Government Technical Monitors who were monitoring 25 contractors and had not performed required oversight such as monitoring the number of hours worked by the contractor.24

OIG identified different reasons for the deficiencies identified in its reports, with most related to weaknesses in the Department’s controls over its oversight of award recipients.25 These controls did not ensure effective monitoring, compliance with requirements, or routine review of expenditures. As a result of improper actions by award recipients identified in 22 reports, OIG identified approximately $41 million in potential monetary benefits.26

Another report noted that AF and CT did not (a) establish standard operating procedures or document controls for managing risks, (b) document reviews of performance reports to demonstrate adherence with award terms, or (c) require documentation to be maintained in official award files. Without a documented process to identify and mitigate risks, AF and CT are at an increased risk for waste, fraud, and mismanagement, and both will have limited assurance that their awards comply with Department requirements and achieve their intended purposes.27

OIG also found that AF had not implemented internal controls to improve grants oversight, as recommended in an earlier report. OIG reviewed 10 award files and found that none contained all required Grants Officer Representative (GOR) evaluation reports, and 5 of 10 award files did not include any GOR reports. Until AF implements controls to ensure required evaluation reports are completed, the bureau faces program and financial management risks because of a lack of oversight.28

Also, an inspection of CT revealed that third-party contractors performed inherently governmental functions, which did not fully comply with Department standards. These included preparing and submitting GOR reports and authorizing an extension for a performance deliverable. These and similar functions should have been performed by a GOR. Without appropriate controls and oversight of third-party contractors, the bureau faced additional risks associated with the loss of Government control and accountability for policy and program decisions.29

Another report noted that the Global Engagement Center (GEC) did not consistently manage and monitor awards in accordance with Federal requirements, Department policies and guidance, and award terms and conditions. OIG found that 9 of 10 of the monitoring and evaluation plans reviewed did not include all monitoring and evaluation plan elements and did not demonstrate a direct link to the proposed scope of work, as required by the Federal Assistance Directive. Until such deficiencies are fully remediated, GEC will not be in a position to ensure award recipients are using funds as intended or be able to fully demonstrate that the awards being implemented are fulfilling GEC’s statutory mandate to coordinate efforts in countering propaganda and disinformation efforts aimed at undermining U.S. national security interests.30

Ensuring Proper Invoice Review and Approval Processes

Proper invoice review and approval processes help the Department ensure that it receives the benefit of its contracts and that it can take appropriate steps if contractors are not performing in accordance with the terms of a contract. Issues with maintaining records of invoice reviews and verifying that invoices include all required information persist.31 For example, in one report OIG selected four task orders associated with four different contracts for facilities management services that had a combined value of more than $151 million. OIG found limited supporting documentation for the 35 invoices selected for review. In addition, OIG could not verify that some invoices were processed properly because the CORs for three of the four task orders reviewed did not maintain records of their invoice reviews. Furthermore, the CORs could not clearly explain how they reviewed invoices, and 10 out of 35 invoices reviewed did not show a COR approval stamp. As a result, OIG made several recommendations, including to develop and implement procedures to monitor and verify the completeness, accessibility, retention, and review of COR files.32

Other OIG work found that oversight officials at Mission Turkey and Embassy Beirut did not verify that invoices involving fuel included all of the required information to make them proper or certify them for payment and verify that prices complied with contract terms. As a result, OIG identified $3.4 million in questioned costs and concluded that the Department should implement fuel receiving procedures in accordance with the Federal Acquisition Regulation requirements that require Contracting Officers (COs) or CORs to accept fuel on behalf of the Government.33

Overseeing Construction Contracts

The Department continues to experience problems with the oversight of construction contracts, which are often long-term, complex, and of high value.34 In addition to the financial consequences resulting from inadequate management and oversight of these contracts, insufficient oversight of the building process can lead to the construction of substandard facilities, which occasionally has implications for the safety and security of personnel.

An inspection of a new embassy compound (NEC) in Turkmenistan highlighted issues that arise when personnel fail to communicate properly with local government officials and follow internal procedures. In July 2016, the Government of Turkmenistan halted construction on a new building on the embassy compound because it was being constructed in a location that violated one of the city’s architectural standards. This error occurred, in part, because OBO personnel failed to properly file and share the Legal Assessment prepared in 2011. The Legal Assessment is a document that describes the building permit approval process and local building codes prepared by a local firm contracted by an embassy or post on behalf of OBO. An architecture firm hired by OBO never submitted a final Project Development Survey to OBO, as contractually required, and OIG could find no evidence that the initial OBO project manager or the OBO project manager who replaced him had attempted to enforce this contract requirement. OBO estimates that it will cost the Department between $90 million and $125 million to rebuild the new building in an approved location, which is approximately twice what was originally budgeted to construct the building.35

In a recent report, OIG found that, when executing award modifications for a construction contract in Amman, Jordan, the CO did not include the estimated total time necessary to accomplish the required work. This deviation is contrary to guidance and occurred, in part, to expedite the issuance of the contract modifications. However, this practice makes it difficult for OBO to hold the contractor accountable for completing the project on time.36

At NECs London and The Hague, OBO personnel did not ensure that major systems were commissioned prior to declaring the projects substantially complete, as required. In addition, when the projects were declared substantially complete, OBO personnel did not provide the construction contractor with a consolidated list of all remaining work to be performed, completed, or corrected before final acceptance. As of April 2020, the contractor had not completed all work required for final acceptance of NEC London, and the Project Director at NEC The Hague had not recommended to the CO final acceptance of this project. For both projects, it has been more than 2 years since substantial completion was declared.37

3. Information Security and Management

The Department depends on information systems to function, and the security of these systems is vital to protecting national and economic security, public safety, and the flow of commerce. The Department acknowledges that its information systems and networks are subject to serious threats that can exploit and compromise sensitive information, and it has taken some steps to address these concerns. However, notwithstanding the expenditure of substantial resources by the Department, OIG continues to identify significant issues that put Department information at risk.

Strengthening Cybersecurity

Although the Department has taken steps to improve its information security program, as in prior years, OIG’s annual assessment of the Department’s information security program identified numerous control weaknesses that affected program effectiveness and increased the Department’s vulnerability to cyberattacks and threats. Specifically, an FY 2020 audit found that the Department lacked a fully implemented organization-wide information security program based on evidence of security weaknesses identified in all eight areas of focus, including risk management, continuous monitoring, and contingency planning.38

We first identified pervasive Information Systems Security Officer (ISSO) concerns in 2017, and OIG’s FY 2020 work reveals this to be a continuing problem. Specifically, weaknesses in the performance of ISSO duties is a persistent problem, as identified in several reports.39 For example, in Bangladesh, the ISSO did not record information system audits or complete account reviews included in the Department’s ISSO checklist, as required.40 In Geneva, the mission’s unclassified and classified ISSOs did not perform all information systems security duties as required. For example, they did not scan user emails and folders and section folders or monitor the dedicated internet network. OIG determined mission ISSOs audited only 16 of the 265 workstations from August 2018 to July 2019.41 Failure to perform required ISSO responsibilities leaves Department networks vulnerable to potential unauthorized access and malicious activity. Also, without a systematic approach to monitoring networks and recording findings, Department networks could be breached, and information security compromised.

Deficiencies related to developing, testing, and training on contingency plans were also found to be persistent in several embassies, which failed to complete or annually test unclassified and classified IT contingency plans.42 Department standards require management to develop and test IT contingency plans annually for effectiveness and to determine the embassy’s readiness to execute them during unplanned system outages or disruptions.

Another cybersecurity issue identified in OIG FY 2020 work pertains to user access controls. As part of its open connection approach and contrary to Department guidance, OIG found that the Foreign Service Institute (FSI) grants wireless internet access to any on-campus user who simply accepts the Terms and Use Agreement on its opening login page. Therefore, FSI cannot determine who made any particular connection because its access controls do not require users to take steps to identify themselves prior to the start of a wireless session. The failure to capture such information makes it more difficult to identify individuals who misuse the network, such as a former FSI employee who inappropriately used the FSI guest wireless network and relied upon its open connection to the internet to engage in criminal activity.43

Overseeing Records Management in Accordance With Standards

Finally, we found records management deficiencies throughout FY 2020. For example, CT did not establish a records management program to institute controls over records creation, maintenance, and disposition. In addition, OIG found the bureau had never retired official records. Department standards require that all Department employees preserve documentary materials meeting the definition of a record under the Federal Records Act. In another example, Embassy Vilnius, Lithuania, had not retired political, economic, and public diplomacy program files since 2013.44 The lack of an effective records management program could result in the loss of important data for historical insight into policy analysis, decision-making, and archival research.

4. Financial and Property Management

Management of its financial resources and property remains a challenge for the Department. This is due, in large part, to overall internal control issues—namely, the Department’s ability to identify internal control weaknesses and comply with relevant standards. As with oversight of contracts and grants, attention to this challenge is particularly important to ensure that the Department appropriately uses and oversees public resources.

Since an FY 2017 report on the Digital Accountability and Transparency Act of 2014 (DATA Act), the Department has taken steps to improve procedures, quality control, and oversight. However, additional action is needed, according to an external audit firm acting on behalf of OIG. The quality of data must be improved to fulfill the intent of the DATA Act.45

Internal Control Deficiencies

An independent audit of the Department’s FY 2019 consolidated financial statements identified certain matters that were considered significant. Weaknesses in property and equipment management were initially reported in the audit of the Department’s FY 2005 consolidated financial statements and were also reported in subsequent audits. In FY 2019, the Department’s internal control structure continued to exhibit several deficiencies that negatively affected the Department’s ability to account for real and personal property in a complete, accurate, and timely manner. Also, in FY 2019, the Department’s internal control structure was not sufficient to ensure that revenue relating to transactions with other Federal agencies were recorded accurately and in a timely manner.46

Additionally, an OIG audit found that internal control issues were at the root of the Department’s difficulty in reforming its Special Needs Education Allowance (SNEA), an allowance granted to overseas employees with children who would fall under the Individuals with Disabilities Education Improvement Act. Our audit found that although the Department had taken steps to reform SNEA, two internal control components required attention: the Department needed to publish policies and procedures regarding medical clearances and the appeals process and implement a centralized voucher process. Without such controls, deficiencies with the administration of SNEA could go unnoticed and uncorrected.47

Inadequate acquisition planning was identified as a deficiency at the Bureau of Western Hemisphere Affairs, which did not have management controls in place for the procurement of IT equipment. This resulted in unnecessary purchases and, in one example, the purchase of 300 computer monitors that were incompatible with existing IT equipment. Only officers overseeing general services and financial management functions could approve procurements in the Department’s procurement system, leaving the bureau’s Information Management staff with no official role in or oversight of the purchase.48

Warehouse, inventory, and property transfer controls were also a challenge for several overseas posts.49 In Finland, 33 percent of the embassy’s property was stored in a warehouse for an average of 2 years and had a value of more than $1.3 million.50 Domestically, a compliance follow-up review revealed that, although the Bureau of Diplomatic Security had taken steps to develop and implement a process to manage accountable property, the bureau nonetheless did not in many instances properly document the “charge out” of personal protective equipment included in high-threat kits. OIG highlighted that the items provided are sensitive equipment and must be safeguarded.51

As in previous years, internal control issues related to the management of bulk fuel and the Department’s motor vehicle fleet persists. For example, in Mauritania the receiving clerk was not present for fuel deliveries, as required; fuel pump meters were not calibrated, as required; and embassy staff did not test fuel tanks for water before and after delivery, in accordance with the Department’s Motor Pool Procedures Overseas guide.52 In Chad, OIG found inconsistencies in information about mileage and fuel consumption that was entered into the Fleet Management Information System, which increases the risk of mismanagement of vehicles and fuel.53

5. Operating in Contingency and Critical Environments

Programs and posts operating in contingency and critical environments must adapt to constant change, pervasive security concerns, dramatic swings in personnel and funding, and widespread reliance on contractors and grantees. In addition to the overall challenge of protecting its people and facilities, the Department faces a much more specific challenge in managing contracts and foreign assistance programs in these locations.

A recent study on rightsizing found that staffing reviews in Afghanistan and Iraq were conducted in an expedited manner because the missions were directed to immediately reduce staff. However, the foreign policy priorities and strategic diplomatic objectives for each mission were not changed to reflect staffing adjustments. For example, preventing the recurrence of a terrorist threat emanating from Afghanistan and countering malign influence in Iraq remained stated policy objectives even though personnel who advanced these objectives were significantly reduced. Just as the short time frame and limited resources affected staffing decisions overall, these same factors precluded either mission from fully assessing and adjusting its strategic objectives to align with the staff reductions prescribed.54

Contracts and other foreign assistance in contingency environments can also be susceptible to less oversight, as identified in several reports.55 For example, a recent report noted that AF was not ensuring that the assistance provided to certain host countries was being used to build counterterrorism capacity. AF officials stated that the absence of clear guidance and limited staff to oversee the contracts contributed to these weaknesses. Because of these weaknesses, OIG reported $201.6 million spent on six contracts as potential wasteful spending due to mismanagement and inadequate oversight.56

In Somalia, OIG noted that oversight officials did not designate four foreign assistance awards as high risk even though they were implemented in a country where travel is restricted due to political instability and terrorism. When risk assessments are not accurate and kept current, bureaus operating in high-threat environments may not fully develop mitigation plans tailored to address foreseeable risks that may impede program implementation.57

Also, a review of the Afghan special immigrant visa (SIV) program revealed that the lack of a centralized database contributed to delays in processing visa applicants, and weaknesses in current practices for verifying Afghan SIV applicants increase the Department’s risk for fraud and threats to national security.58 OIG found that outside the workplace, U.S. Government protection for SIV applicants did not extend beyond the specific terms of their employment. We recommended the Department examine whether and how protection could be provided for those SIV applicants experiencing “imminent danger” as they await processing of their applications for immigration to the United States.

Finally, the Department continues to experience health and welfare concerns for antiterrorism assistance explosive detection canines that were first raised in a September 2019 report.59 An FY 2020 report confirmed that additional canines beyond those described in the initial evaluation had died from non-natural (that is, preventable) causes in Jordan in 2019 after OIG concluded its fieldwork. The death of two canines from non-natural causes—namely, hyperthermia and poisoning—since June 2019 raises serious questions about the Department’s contention that it has taken adequate steps to protect their health and safety. OIG is particularly concerned that the deaths of the two additional Jordanian dogs occurred while four Department-funded personnel were in-country to monitor the care of the dogs.60

6. Workforce Management

The Bureau of Global Talent Management identifies people as the Department’s greatest asset. The Department accordingly expends substantial resources on recruiting, training, and retaining a diverse, talented workforce capable of carrying out the Department’s foreign policy goals and priorities. However, OIG’s work finds that staffing gaps, frequent turnover, poor leadership, and inexperienced and undertrained staff frequently contribute to the Department’s other management challenges. Workforce management issues are pervasive, affecting programs and operations domestically and overseas and across functional areas and geographic regions.

Maintaining Adequate Staffing Levels to Meet Operational Needs

OIG continues to encounter domestic offices and overseas posts that experience difficulty maintaining staffing levels.61 Embassy Dhaka, Bangladesh, was among those posts that faced difficulty in filling mid-level positions. Many managerial positions had long staffing gaps that exacerbated workload pressures on the remaining staff. Meanwhile, Consular Section staff routinely worked long hours in an effort to manage a growing backlog of immigrant visa work.62

Shortages of consular workers have also compounded the difficult situation for the Afghan SIV program mentioned above. A review of that program showed that staffing levels across various offices that process SIVs have generally remained constant since 2016 and are insufficient to reduce the SIV applicant backlog. Additionally, staffing levels during the interagency and security check process contributed to delays in processing the SIVs, and the Senior Coordinating Official position, which is intended to oversee and direct the Afghan SIV program, had been vacant since January 2017.63

Providing Appropriate Training/Ensuring Staff Are Appropriately Qualified

Underqualified staff is an issue that frequently intersects with the Department’s difficulties in managing and overseeing contracts.64 For example, as outlined earlier, CORs in AF, who lacked the requisite technical knowledge, developed deficient performance work statements that led to multiple poorly designed projects and millions of dollars in wasted funds.65 Similar deficiencies were found in the CT bureau, where OIG found the bureau had assigned an employee without substantive program knowledge to serve as the COR for the technical support contract to prepare the statistical annex to the Country Reports on Terrorism.66

GEC also suffered from a lack of experienced personnel to issue, manage, and monitor its cooperative agreements. During an OIG audit, GEC hired additional staff members and planned to adopt internal policies, processes, and procedures. OIG noted that without adequate contract management staff, GEC will not be in a position to ensure award recipients are using funds as intended or be able to fully demonstrate that the awards being implemented are fulfilling GEC’s statutory mandate to coordinate efforts in countering propaganda and disinformation efforts aimed at undermining U.S. national security interests.67

A report on remote missions found that, although the Department encourages locally employed (LE) staff to take courses and training to improve their ability to perform official duties, the Department does not offer guidance to supervisors on how to overcome some of the unique challenges LE staff face in accessing training opportunities. For instance, current and former Yemen Affairs Unit staff explained that while there are occasional opportunities for LE staff to attend training and conferences in other countries, it is difficult for them to obtain visas and passports for travel and to safely travel in and out of Sana’a.68

Our FY 2020 work also found that First- and Second-Tour (FAST) programs at overseas posts that are meant to provide professional development training and opportunities for FAST officers did not always benefit from a formal, structured program. At Helsinki, Finland, OIG found the officers were not receiving regular, structured professional development, mentoring, training, and opportunities.69 In Australia, FAST employees at the embassy and Consulate General Sydney told OIG there were few activities or opportunities in which they could gain additional experience.70

Holding Leadership Accountable to Department Principles

Effective leadership remains a paradigm of the Department’s success, but FY 2020 witnessed some incidents that hindered some employees’ trust in that leadership. In one report, OIG found that Department officials ended the detail of a career employee after significant discussion concerning the employee’s perceived political views, association with former administrations, and perceived national origin, which are non-merit factors that may not be considered in assigning career personnel under the Department’s policies. OIG recommended the Department institute training on the Department’s merit-based personnel rules for political appointees.71

At Embassy London, OIG learned through employee questionnaires and interviews that the Ambassador sometimes made inappropriate or insensitive comments on topics generally considered sensitive, such as religion, sex, or color. According to Department policy, offensive or derogatory comments based on such categories can create an offensive working environment and could potentially rise to a violation of Equal Employment Opportunity laws.72

In Nepal, Consular Section managers’ failure to adequately address improper conduct by two officers had a negative effect on locally employed staff morale. Several months before the inspection, staff complained to consular managers about the officers’ conduct, which involved the use of abrasive language and tone with visa applicants and frequent pressure on locally employed staff to translate the rude comments. Although consular managers attempted to address the officers’ conduct and had kept the Deputy Chief of Mission fully informed, the officers’ conduct continued to be a problem even after the inspection. After OIG questioned their handling of the situation, consular managers worked with the Front Office and the Human Resources Officer to take further action.73

We note that there are counterexamples within the Department, and our inspection work frequently highlights embassy leadership that strives to set the appropriate tone at the top.74 Additionally, in a compliance follow-up review to a 2018 report that found long-standing and widespread leadership and management deficiencies at the National Passport Center, OIG found that the Bureau of Consular Affairs had undertaken various initiatives to implement OIG recommendations.75

7. Promoting Accountability Through Internal Coordination and Clear Lines of Authority

Promoting accountability through careful internal coordination and clear, well-defined lines of authority is still a challenge for the Department. OIG finds that poor coordination and vague or dispersed authority are at the root of some of the Department’s other deficiencies. This is a concern that affects a wide range of Department functions: it is often implicated in problems particular to certain Department programs or projects, and it is likewise relevant to some of the Department’s more long-standing and systemic difficulties, including ensuring physical and information security.

In a recent evaluation concerning the Department’s handling of sexual harassment reports, OIG found that the Department lacks coordination and guidance on the investigative and disciplinary processes for these reports. The Department does not have joint guidance that coordinates the Department’s Office of Civil Rights (OCR), the Bureau of Diplomatic Security Office of Special Investigations (OSI), and the Bureau of Global Talent Management Office’s Conduct, Suitability, and Discipline (CSD) Division activities throughout the investigation and disciplinary review of sexual harassment cases and has not updated other relevant guidance. OCR, OSI, and CSD have internal policies for their roles in the investigative and disciplinary processes for sexual harassment cases, but the policies do not discuss coordination with all relevant bureaus and offices.76

In one audit, OIG reported that participants involved in a Department-wide organizational reform effort described the effort as a “missed opportunity” that floundered as a result of poor coordination and unclear goals. The Department had used a three-phased approach to develop and implement its organizational reform efforts. However, OIG could not establish the extent to which responses from survey participants in Phase I directly influenced recommendations offered in Phase II or the extent to which efforts described in Phase II were carried out in Phase III. Participants in the organizational reform effort told OIG that leadership deficiencies hampered the reform effort. Specifically, leaders changed frequently, and executive-level direction was minimal.77 OIG emphasized that leadership, communication, and coordination of a coherent mission with integrated strategic goals are paramount to achieving agency efficiencies, effectiveness, and accountability.

One follow-up audit illustrated how this challenge contributes to the Department’s existing difficulties managing its foreign assistance programs. OIG found that two bureaus—the Bureau of Diplomatic Security and CT—with responsibilities related to the Department’s Antiterrorism Assistance (ATA) program consistently failed to coordinate in ways that hampered monitoring and evaluation and the sustainability of the program. OIG noted that the Bureau of Diplomatic Security and CT have not clearly delegated oversight duties related to ATA projects, which makes it difficult for the bureaus to fully measure ATA program performance or demonstrate that intended ATA country program goals and objectives are being achieved.78

Finally, accountability is sometimes blurred within the Department due to conflicting lines of authority. For example, multiple unclear and conflicting lines of authority within the Bureau of Western Hemisphere Affairs (WHA) complicated the execution of Venezuela policy. For example, Department officials told OIG the division of labor between the Special Representative for Venezuela and WHA was not well delineated, and they stated that, at times, the leaders of these offices issued conflicting policy guidance.79

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Footnotes


1 The Reports Consolidation Act of 2000, § 3, Pub. L. 106-531 (amending 31 U.S.C. § 3516). (back to text)

2 OIG, Review of Delays Encountered Constructing the New Embassy Compound in Ashgabat, Turkmenistan (AUD-MERO-20-20, February 2020). (back to text)

3 OIG, Management Assistance Report: Execution of the New Embassy Compound London Construction Project Offers Multiple Lessons (AUD-CGI-20-36, July 2020). (back to text)

4 OIG, Audit of Bureau of Overseas Buildings Operations Process To Identify and Apply Best Practices and Lessons Learned to Future Construction Projects (AUD-MERO-20-39, September 2020). (back to text)

5 OIG, Inspection of Embassy Maseru, Lesotho (ISP-I-20-01, October 2019). (back to text)

6 OIG, Inspection of Embassy Stockholm, Sweden (ISP-I-20-06, December 2019). (back to text)

7 OIG, Inspection of Embassy Yaoundé, Cameroon (ISP-I-20-20, May 2020); OIG, Inspection of Embassy Canberra and Constituent Posts, Australia (ISP-I-20-07, February 2020); OIG, Inspection of Embassy Pretoria and Constituent Posts, South Africa (ISP-I-20-09, January 2020); Inspection of Embassy N’Djamena, Chad (ISP-I-20-02, November 2019). (back to text)

8 ISP-I-20-20, May 2020. (back to text)

9 ISP-I-20-09, January 2020. (back to text)

10 OIG, Inspection of Embassy Dhaka, Bangladesh (ISP-I-20-17, June 2020); OIG, Inspection of Embassy Kathmandu, Nepal (ISP-I-20-22, May 2020); OIG, Inspection of Embassy Bern, Switzerland (ISP-I-20-21, May 2020); OIG, Inspection of Embassy Nouakchott, Mauritania (ISP-I-20-04, November 2019); ISP-I-20-20, May 2020; ISP-I-20-07, February 2020; ISP-I-20-09, January 2020; ISP-I-20-02, November 2019. (back to text)

11 ISP-I-20-04, November 2019. (back to text)

12 OIG, Inspection of the Bureau of Counterterrorism (ISP-I-20-13, May 2020); OIG, Inspection of Embassy Mbabane, Eswatini (ISP-I-20-03, October 2019); ISP-I-20-09, January 2020; ISP-I-20-04, November 2019; ISP-I-20-02, November 2019. (back to text)

13 ISP-I-20-13, May 2020. (back to text)

14 ISP-I-20-03, October 2019. (back to text)

15 OIG, Follow-Up Audit of Department of State Efforts To Measure, Evaluate, and Sustain Antiterrorism Assistance Objectives in the Bureau of East Asian and Pacific Affairs (AUD-MERO-20-32, May 2020); OIG, Management Assistance Report: The Bureau of African Affairs Should Improve Performance Work Statements and Increase Subject Matter Expertise for Trans-Sahara Counterterrorism Partnership Projects (AUD-MERO-20-29, April 2020); OIG, Audit of the Office of the Coordinator for Assistance to Europe and Eurasia’s Oversight of Foreign Assistance Funds Transferred to Implementing Partners (AUD-CGI-20-12, March 2020); OIG, Audit of the Department of State’s Coordination and Oversight of the U.S. President’s Emergency Plan for AIDS Relief (AUD-SI-20-17, February 2020). (back to text)

16 AUD-SI-20-17, February 2020. (back to text)

17 AUD-CGI-20-12, March 2020. (back to text)

18 AUD-MERO-20-29, April 2020. (back to text)

19 OIG, Compliance Follow-Up Review: Bureau of African Affairs’ Foreign Assistance Program Management (ISP-C-20-23, May 2020). (back to text)

20 ISP-I-20-04, November 2019. (back to text)

21 OIG, Audit of Selected Bureau of Administration, Office of Operations, Office of Facilities Management Services, Contracts (AUD-CGI-20-21, March 2020). (back to text)

22 OIG, Information Report: Systemic Weaknesses Related to the Administration and Oversight of Department of State Contracts and Federal Assistance From FY 2017 to FY 2019 (AUD-CGI-20-44, September 2020). (back to text)

23 OIG, Audit of the Oversight of Fuel Acquisition and Related Services Supporting Department of State Operations in Iraq (AUD-MERO-17-16, December 2016). (back to text)

24 AUD-CGI-20-44, September 2020. (back to text)

25 OIG, Inspection of the Bureau of Counterterrorism’s Foreign Assistance Program Management (ISP-I-20-14, June 2020); OIG, Audit of Global Engagement Center Federal Assistance Award Management and Monitoring (AUD-MERO-20-26, April 2020); ISP-I-20-07, February 2020; ISP-I-20-09, January 2020; ISP-I-20-02, November 2019. (back to text)

26 AUD-CGI-20-44, September 2020. (back to text)

27 OIG, Audit of Department of State Foreign Assistance Grants and Cooperative Agreements in Somalia (AUD-MERO-20-45, September 2020). (back to text)

28 ISP-C-20-23, May 2020. (back to text)

29 ISP-I-20-14, June 2020. (back to text)

30 AUD-MERO-20-26, April 2020. (back to text)

31 OIG, Audit of Mission Turkey and Embassy Beirut Fuel Oversight and Payment Process (AUD-MERO-20-19, January 2020); ISP-I-20-21, May 2020; AUD-CGI-20-21, March 2020; ISP-I-20-09, January 2020. (back to text)

32 AUD-CGI-20-21, March 2020. (back to text)

33 AUD-MERO-20-19, January 2020. (back to text)

34 OIG, Audit of the Bureau of Overseas Buildings Operations Process To Execute Construction Closeout Procedures for Selected Capital Construction Projects (AUD-CGI-20-43, September 2020); AUD-MERO-20-39, September 2020; AUD-MERO-20-20, February 2020. (back to text)

35 AUD-MERO-20-20, February 2020. (back to text)

36 AUD-MERO-20-39, September 2020. (back to text)

37 AUD-CGI-20-43, September 2020. (back to text)

38 OIG, Audit of the Department of State Information Security Program (AUD-IT-20-04, October 2019). (back to text)

39 OIG, Inspection of the U.S. Mission to the United Nations and Other International Organizations in Geneva, Switzerland (ISP-I-20-16, June 2020); OIG, Inspection of Embassy Vilnius, Lithuania (ISP-I-20-29, April 2020); ISP-I-20-17, June 2020; ISP-I-20-22, May 2020; ISP-I-20-21, May 2020; ISP-I-20-20, May 2020; ISP-I-20-07, February 2020; ISP-I-20-09, January 2020; ISP-I-20-04, November 2019; ISP-I-20-01, October 2019. (back to text)

40 ISP-I-20-17, June 2020. (back to text)

41 ISP-I-20-16, June 2020. (back to text)

42 ISP-I-20-17, June 2020; ISP-I-20-16, June 2020; ISP-I-20-22, May 2020; ISP-I-20-21, May 2020; ISP-I-20-13, May 2020; ISP-I-20-09, January 2020. (back to text)

43 OIG, Management Assistance Report: Foreign Service Institute Wireless User Access Controls (ESP-20-03, March 2020). (back to text)

44 ISP-I-20-29, April 2020. (back to text)

45 OIG, Audit of the Department of State’s FY 2019 Implementation of the Digital Accountability and Transparency Act of 2014 (AUD-FM-20-05, November 2019). (back to text)

46 OIG, Independent Auditor’s Report on the U.S. Department of State FY 2019 and FY 2018 Consolidated Financial Statements (AUD-FM-20-18, January 2020). (back to text)

47 OIG, Audit of Selected Internal Controls for the Special Needs Education Allowance (AUD-FM-20-33, June 2020). (back to text)

48 OIG, Inspection of the Bureau of Western Hemisphere Affairs (ISP-I-20-05, November 2019); ISP-I-20-04, November 2019. (back to text)

49 OIG, Inspection of Embassy Helsinki, Finland (ISP-I-20-08, December 2019); ISP-I-20-22, May 2020, ISP-I-20-21, May 2020; ISP-I-20-20, May 2020; ISP-I-20-07, February 2020; ISP-I-20-02, November 2019. (back to text)

50 ISP-I-20-08, December 2019. (back to text)

51 OIG, Compliance Follow-Up Audit of Bureau of Diplomatic Security Property Management Procedures for Protective Personnel Equipment (AUD-SI-20-30, July 2020). (back to text)

52 ISP-I-20-04, November 2019. (back to text)

53 ISP-I-20-02, November 2019. (back to text)

54 OIG, Audit of the Department of State’s Approach To Adjust the Size and Composition of U.S. Missions Afghanistan and Iraq (AUD-MERO-20-38, August 2020). (back to text)

55 AUD-MERO-20-45, September 2020; AUD-MERO-20-42, September 2020; AUD-MERO-20-38, August 2020; ISP-I-20-14, June 2020; ISP-C-20-23, May 2020; AUD-MERO-20-29, April 2020. (back to text)

56 AUD-MERO-20-42, September 2020. (back to text)

57 AUD-MERO-20-45, September 2020. (back to text)

58 OIG, Review of the Afghan Special Immigrant Visa Program (AUD-MERO-20-35, June 2020). (back to text)

59 OIG, Evaluation of the Antiterrorism Assistance Explosive Detection Canine Program – Health and Welfare (ESP-19-06, September 2019). (back to text)

60 OIG, Management Assistance Report: Continued Health and Welfare Concerns for Antiterrorism Assistance Explosive Detection Canines (ESP-20-02, December 2019). (back to text)

61 AUD-MERO-20-35, June 2020; ISP-I-20-17, June 2020; AUD-MERO-20-26, April 2020; ISP-I-20-07, February 2020. (back to text)

62 ISP-I-20-17, June 2020. (back to text)

63 AUD-MERO-20-35, June 2020. (back to text)

64 ISP-I-20-13, May 2020; AUD-MERO-20-29, April 2020; ISP-I-20-07, February 2020; ISP-I-20-08, December 2019; ISP-I-20-05, November 2019. (back to text)

65 AUD-MERO-20-29, April 2020. (back to text)

66 ISP-I-20-13, May 2020. (back to text)

67 AUD-MERO-20-26, April 2020. (back to text)

68 OIG, Additional Guidance Needed to Improve the Oversight and Management of Locally Employed Staff Serving at Remote Missions (AUD-MERO-20-40, September 2020). (back to text)

69 ISP-I-20-08, December 2019. (back to text)

70 ISP-I-20-07, February 2020. (back to text)

71 OIG, Review of Allegations of Politicized and Other Improper Personnel Practices Involving the Office of the Secretary (ESP-20-01, November 2019). (back to text)

72 OIG, Inspection of Embassy London and Constituent Posts, United Kingdom (ISP-I-20-12, August 2020). (back to text)

73 ISP-I-20-22, May 2020. (back to text)

74 ISP-I-20-12, August 2020; ISP-I-20-22, May 2020. (back to text)

75 OIG, Compliance Follow-Up Review: Targeted Review of Leadership and Management at the National Passport Center (ISP-C-20-27, June 2020). (back to text)

76 OIG, Evaluation of the Department’s Handling of Sexual Harassment Reports (ESP-20-06, July 2020). (back to text)

77 OIG, Review of the Department of State’s Organizational Reform Effort (AUD-MERO-20-09, November 2019). (back to text)

78 AUD-MERO-20-32, May 2020. (back to text)

79 ISP-I-20-05, November 2019. (back to text)

Management's Response to Inspector General

Fiscal Year 2020 was a unique year for the Department of State – one that showed our employees’ resilience, fortitude, and exceptional teamwork as we supported our worldwide platform and American citizens abroad. The Department responded early to COVID-19, preparing for dispersed operations and maximizing telework through an effort called “Diplomacy Strong.” Diplomacy Strong is the Department’s framework for a phased approach to adjusting to COVID-19 operations. Information Technology (IT) and communication infrastructure improvements were implemented swiftly. For social distancing purposes and maintaining continuity of operations, the Department dispersed operations for many critical elements providing intelligence, communications, and situational awareness. The Department also formed a Coronavirus Global Response Coordination Unit. This unit facilitated the Department’s response to COVID-19, as well as assisted in tracking Diplomacy Strong efforts.

The Bureau of Medical Services (MED) through its over 250 deployed medical specialists provided the expert guidance needed to keep Department personnel safe and informed. MED deployed advanced COVID-19 testing worldwide and in Washington, D.C. where it otherwise would not have been available. MED’s existing Health Alert and Response Team quickly established a call-in center and set up pre-departure COVID-19 testing for employees deploying to new assignments abroad and for critical travelers. MED has fielded over 60,000 emails and 8,000 phone calls, and performed over 8,000 COVID-19 tests.

The Department established three task forces dedicated to supporting Americans caught overseas due to COVID-19, the largest one being the Repatriation Task Force. These task forces helped the Department provide a consistent level of service and support to our overseas missions and private American citizens. In total, the Department coordinated the repatriation of more than 102,000 Americans on 1,163 flights from 139 countries from January 27 – June 10, 2020. Due to social distancing and other medical guidelines, the Repatriation Task Force largely operated virtually except for a small number of staff who provided in-person support while following social distancing and other guidelines from MED. Our enhanced IT infrastructure and collaborative tools allowed the Repatriation Task Force to smoothly operate and provide uninterrupted support to the Secretary, other senior principals, and posts around the world.

Still, even in this new operating environment, the Department’s usual work continued. In 2020, the Department of State’s Office of Inspector General (OIG) identified management and performance challenges in the areas of: protection of people and facilities; management and oversight of contracts, grants, and foreign assistance; information security and management; financial and property management; operating in contingency and critical environments; workforce management; and promoting accountability through internal coordination and clear lines of authority.

The Department acknowledges the deficiencies identified by the OIG, and will continue to enhance and advance operations to provide an efficient, strong worldwide management platform. Throughout COVID-19, the principles that drive our work remain familiar: prioritizing the safety and health of our colleagues and mitigating risk, while balancing our operations to achieve our strategic mission.

The Department employs several collaborative groups to address systemic challenges identified by the OIG.

Throughout 2020, the Department continued establishing the Enterprise Governance Board (EGB), a senior group that meets monthly to discuss strategic issues and provide input into enterprise-level decisions. This enhances transparency, agility, and efficient alignment of resources for priorities. The EGB reviews enterprise-level matters, such as recommendations to the Secretary for the Department’s annual budget request; Department legislative priorities; Enterprise Risk Management issues; policies with enterprise-wide implications (such as major multi-region U.S. policy initiatives, cybersecurity, and realignment of the Department’s global staffing presence); and other topics as determined by the Board.

The Under Secretary for Management (M) also continued working across M family bureaus to advance his “High Five” priorities: Talent; Security & Infrastructure; Excellence & Innovation; Data & Analytics; and Technology. He continued to work through action plans and key tasks of the “High Five,” and monitored associated metrics.

COVID-19 has changed the way the Department operates. Working through this challenging time has shown that the Department is capable of operating in new, exciting ways to advance Foreign Policy. To capitalize on the lessons learned from COVID-19, the Department created the Reimagine Task Force, a group charged with developing ways to provide our workforce with the tools and flexibility to engage in activities that move our missions forward most effectively – no matter where we are.

The Enterprise Governance Board and the M High Five together with the M “Field First” focus that centers on responsiveness to post needs, provides a framework to plan strategically and promptly and efficiently take corrective actions in response to OIG findings and recommendations. Highlights are summarized below.

1. Protection of People and Facilities

The protection of people and facilities remains of utmost importance for the Department, exemplified by the High Five priority of Security & Infrastructure. The Bureau of Overseas Buildings Operations (OBO), for example, remains committed to enhancing the security, safety, functionality, and resiliency of facilities and residences for overseas personnel through the Embassy After Next, the Diplomatic Residential Initiative, and the Facilities Maintenance and Upkeep strategic priorities.

Below is additional information about specific issues raised by the OIG and improvements the Department has made in its systems for protecting people and facilities.

Constructing and Maintaining Safe and Secure Diplomatic Facilities

The OIG highlighted problems related to constructing and maintaining safe and secure diplomatic facilities during their routine inspections of overseas posts. The Department is continuing to build more secure facilities completing three projects and moving nearly 800 people to safer facilities in 2020.

OBO’s Embassy After Next strategic priority is focused on:

  • Improving project management and oversight during design and construction;
  • Increasing innovation and leveraging OBO (and industry) standards to reduce costs, shorten schedules, and increase quality; and
  • Leveraging technology to increase efficiency and effectiveness throughout the planning, design, and construction processes.

Through the Diplomatic Residential Initiative strategic priority, OBO is focused on improving the quality of life for American diplomats and their families and evaluating the housing portfolio’s compliance with life-safety and security codes and standards.

The Facility Maintenance & Upkeep strategic priority promotes a full life-cycle approach to managing the Department’s global facility portfolio through a holistic and regionalized approach to maintenance and repair strategies that protect and preserve our world-wide assets.

OBO made significant progress all three strategic priorities in 2020, despite challenges related to COVID-19.

Ensuring the Health and Safety of Personnel Abroad

The Department’s emphasis on fostering and sustaining a healthy, resilient, and engaged global workforce for optimal performance is incorporated into M’s High Five action plan. The Department is expanding resilience support and training activities through ongoing outreach and other efforts, and is now establishing these activities virtually. For example, M spearheaded the TalentCare initiative, a collaborative effort that brings together access to information and programs for employees that focus on processes and policies that promote well-being, family, safety, and flexibility.

Residential Safety

The Department recognizes the need to increase the safety, security, functionality and resiliency of the Department’s overseas housing pool. As part of the Diplomatic Residential Initiative, a key task within the M High Five’s Security & Infrastructure priority, OBO developed and released the Quality of Life Survey to assess posts’ satisfaction with the quality of housing and evaluate compliance with life-safety and security codes and standards. The results lay the groundwork for post-level analytics reports, and allow OBO to identify non-compliant housing and prioritize the Department’s housing needs, either through acquisition of new or modernizing existing diplomatic housing.

2. Management and Oversight of Contracts, Grants, and Foreign Assistance

In response to the OIG recommendations, the Department took a number of actions to improve oversight of contracts and grants, including those that appear below. The Department will continue to take steps to address OIG’s recommendations.

Monitoring and Documenting Contractor and Grantee Performance

As a result of the recent OIG audit, the Global Engagement Center (GEC) took significant steps to enhance management and oversight of its grants. To begin, the GEC onboarded its required complement of Grants Officers and is in the continuing process of hiring additional Grants Officer Representatives as funding becomes available. GEC reviewed and updated its Grants Policy and Procedure Manual, conducted focused staff training sessions, and updated work templates and job aids to ensure that grants staff properly apply the relevant policies. GEC reviewed and revised performance standards and commitments for multiple employees and developed new policies, processes, and procedures recommended by the OIG to maximize the effectiveness of the awards and grants. Finally, the GEC completed a staffing needs assessment, as well as a strategic personnel review that strategically prioritizes the hiring of additional Government managers and monitoring and evaluation specialists, prior to expanding its programming efforts. This comprehensive approach ensures the GEC can proficiently execute its statutory mandate to lead and coordinate Federal Government efforts to recognize, understand, expose, and counter foreign state and non-state propaganda and disinformation aimed at undermining or influencing the policies, security, or stability of the United States and our allies and partner nations.

Overseeing Construction Contracts

OBO values the careful review and constructive feedback the OIG provides related to the oversight of construction contracts. As part of the Under Secretary’s High Five priorities of Excellence & Innovation and Security & Infrastructure, OBO’s Embassy After Next strategic priority created standardized building typologies and prototypes, developed an Integrated Master Schedule for all Capital Projects, and established metrics to focus on cost and schedule performance. In addition, OBO is taking steps to harness information through data standardization and centralization to make informed, data-driven decisions.

As part of M High Five priority of Excellence & Innovation, OBO aims to utilize technology to enhance capabilities across all phases of a facility’s lifecycle. OBO is piloting software currently utilized in the private sector to reduce the use of hard-copy commissioning documents. OBO has invited external experts to review capabilities, compatibility with other platforms, and technical security requirements. OBO also is updating the commissioning task order statement of work template to include language about routinely uploading hard-copy commissioning performance tests and related documentation. Furthermore, OBO’s new Data Requirements and Standards, developed under the Embassy After Next initiative, and training have improved the quality of data, with which OBO makes project-related decisions.

Monitoring Contractor Performance

The OIG also identified oversight of non-OBO contracts as a persistent management challenge. The Bureau of Administration’s Office of the Procurement Executive (A/OPE) and, with respect to Facilities Management Services, the Office of Operations (A/OPR) are working closely with the OIG, Contracting Officers Representatives (COR), and the regional and functional bureaus to address this matter.

A/OPE engaged the Foreign Service Institute to recalibrate training for Contracting Officers, COR, Grants Officers, and Grants Officer Representatives (GOR) to emphasize the need for carrying out fiduciary and oversight responsibilities. A/OPE is also working to modernize its IT systems to provide the Department acquisition and Federal assistance community with improved capability to collaborate, educate, and react to dynamic events in a manner consistent with both expectations and obligations. Nearly 400 CORs have registered for a November 2020 COR workshop, with another session planned for Spring 2021 to accommodate the immense interest among CORs in enhancing their ability to provide contract oversight.

A/OPR has developed a standard operation procedure for COR electronic filing required for new contracts. A/OPR established a Quality Assurance Surveillance Plan and oversight-related mandated training, created a Financial Management position in its front office, hired a Contracts Management Specialist, and named the A/OPR Managing Director as supervisor for the Facilities Management Services’ budget division.

3. Information Security and Management

When the Bureau of Information Resource Management (IRM) set its goal to establish a plan to continuously define and maintain a baseline of enabling technologies at overseas posts, it had no idea that the COVID-19 pandemic would accelerate the need to work remotely. IRM has been analyzing results from its recent telework survey to highlight any capability gaps.

Enabling mission success for the end user continues to be the dominant influence in our technology decision making activities, and these efforts have come into even sharper focus with the shift to remote work. The Department’s Field First initiative to align technology to conduct diplomacy on the foreign affairs frontlines continues, with a new Chief Architect now in place. Under the Field First initiative, the Department is identifying existing IT gaps, costs to close them, and establishing post-specific roadmaps for implementation. Preliminary analysis shows that our greatest needs overseas are bandwidth, collaboration tools, and new equipment. IRM has been working with the Bureau of Administration to deploy an IT Service Management portal in myServices that will manage employee requests for IT solutions.

The OIG found that numerous control weaknesses affected program effectiveness and increased the chance of cyberattacks and threats to the Department. In 2020, the Department has expanded upon its cyber risk framework. For example, the Foreign Service Institute (FSI) is working with IRM to implement additional Wi-Fi security access protocols in order to mitigate potential misuse of the FSI network. The EGB has also met to discuss cybersecurity at the enterprise level, to ensure the Department is doing everything it can to counter adversaries in the cyber realm.

The Department continues to deliver analytics products for assessing Department challenges and are enhancing data and analytics capacity, fostering a culture of data governance, and modernizing our technical infrastructure to support data and analytics. The Department’s need for an agile Center for Analytics was demonstrated in second quarter with the creation of the COVID-19 Data Analytics Team (CDAT). The CDAT is working to develop a framework for constructing a data inventory, and coordinated and prepared data to enable successful tracking, analysis, and reporting on a variety of critical issues, including repatriations, Authorized and Ordered Departures, and other global and regional data on a near real-time basis.

4. Financial and Property Management

The Department operates in a complex and challenging global environment and, as a result, manages one of the U.S. Government’s most complex financial operations. Operating around the clock in over 270 locations and 180 countries, the Department conducts business in over 138 currencies, accounts for $100 billion in assets, maintains 236 bank accounts around the world, executes over 6,100 annual foreign currency purchases and sales valued at over $6 billion, and manages real and personal property capital assets with historical costs of more than $34 billion.

As part of the High Five theme of Excellence and Innovation, the Bureau of the Comptroller and Global Financial Services (CGFS) is updating the Department’s resource management processes and systems, including a new version of the Global Financial Management System. This will streamline and expedite processing financial transactions. CGFS is also working to automate and streamline financial operations through process enhancements and technology innovations, including the increased use of Robotic Process Automation, or "bots." For 2020, CGFS implemented 12 new bot processes for a total of 20 bots in financial services operations. Bots to create vendor records and receivables have supported the timely billing of more than 22,000 U.S. citizens repatriated on Department-funded COVID-19 evacuation flights.

As part of the High Five theme of Security and Infrastructure, the Bureau of Administration is working to optimize the management of the Department’s domestic real property assets.

Internal Control Deficiencies

In December 2019, MED and CGFS announced plans to implement a new process that will provide for consistent processing of Special Needs Education Allowance (SNEA) reimbursements for employees at post. Furthermore, under the guidance and direction of the Under Secretary for Management, MED is working with other bureaus to make the necessary updates to the Foreign Affairs Manual. MED is also implementing new internal controls, including a reimbursement system using a local E-2 component to route requests directly back to the child and family program where the people who write the cables detailing the allowable expenses are the first examiners of the reimbursement requests. Expenses are then authorized for payment, denied, or questioned for further detail. Like all of the other internal controls associated with SNEA (and all of MED’s financial and risk management), these processes will be integrated into the annual Statement of Assurance produced under the internal control program administered under the authority of the Federal Managers’ Financial Integrity Act.

5.  Operating in Contingency and Critical Environments

In some cases, the Department must operate in “critical” environments, or areas that experience various challenges in the form of conflict, instability, disease, or natural disasters. These pose their own set of problems and contribute to existing challenges.

The OIG wrote that “staff reductions in Afghanistan and Iraq have contributed to expedited staffing reviews, while OIG also identified the lack of a centralized database for the special immigrant visa program in Afghanistan. This contributed to delays and increases the Department’s risk for fraud and threats to national security.” The Department notes the Secretary had determined that the security situations in Iraq and Afghanistan necessitated we reduce the size of these posts as expeditiously as possible. Missions and involved bureaus worked expeditiously to determine how best to implement the Secretary’s directives to reduce staff, while still maintaining enough personnel to meet the highest strategic priorities in both Afghanistan and Iraq.

6. Workforce Management

The Secretary’s Professional Ethos provides a common foundation for the Department’s broad mission, one that cannot be accomplished without its workforce. Similarly, despite employing different categories of staff – Foreign Service (FS), Civil Service (CS), locally employed staff, contractors, and political appointees – the Secretary has emphasized the need for One Team, One Mission Ethos to achieve success.

The High Five Talent priority elucidates how the Department is striving to be the employer of choice and care for its people. To combat workforce management challenges, some of which the OIG describes in its report, the Under Secretary for Management is focusing on:

  • Accelerating onboarding and hiring to fill critical Civil Service vacancies;
  • Leadership development and succession planning;
  • Improving employee engagement and workforce flexibilities;
  • Enhancing the resiliency and well-being of employees; and
  • Promoting an inclusive and diverse workforce.

The Bureau of Global Talent Management (GTM) quickly adapted to new needs in light of COVID-19 and took significant strides to improve customer service. GTM made additional human resources applications available remotely and released other innovations such as Virtual Performance Boards, virtual oaths/onboarding for Foreign Service and Civil Service, and ongoing virtual Foreign Service Oral Assessments.

The Department also continued to prioritize and advance its Diversity and Inclusion (D&I) efforts in 2020, with the goal of catalyzing a cultural shift toward shared responsibility for practicing inclusion and mitigating bias. GTM further matured its D&I architecture by supporting the establishment of additional D&I Bureau Councils and Mission Councils, providing resources and guidance to bureaus establishing new diversity and inclusion advisor positions, and finalizing the 2020-2022 D&I Strategic Plan for release before the end of calendar year 2020.

The Department successfully converted Foreign Service orientation classes to the virtual environment. Leadership Training and Professional Development also progressed. Despite new challenges in conducting in-person training, the Department quickly adapted to virtually offer mandatory leadership training, so our workforce can develop the skills and knowledge necessary to lead with integrity, promote inclusion, and protect America’s interests at home and abroad.

Maintaining Adequate Staffing Levels to Meet Operational Needs

The OIG notes that domestic offices and overseas posts experience difficulty maintaining staffing levels. The Department agrees that it is critically important to reach and maintain adequate staffing levels and has continued to make progress in 2020, though efforts have been hampered by COVID-19. Among FS Specialists, GTM continued its recruitment for critical specialties, and developed and implemented a pilot virtual assessment to mitigate intake and process disruptions caused by COVID-19. Despite this challenging environment, FS Specialist hiring exceeded 2020 targets and reached the highest level since 2014. Although, unlike the FS, CS hiring occurs on a case-by-case basis, the Department has made considerable strides to increase CS staffing. During 2020, GTM cleared the CS hiring backlog and brought on approximately 470 CS hires, representing 12 consecutive months of growth.

The Department is also taking steps to improve efficiency in processing security clearances. Expediting security clearances will allow us to speed up overall hiring timelines. The Bureau of Diplomatic Security is developing a new security clearance case management system that will combine and modernize three antiquated legacy systems. In addition to improved functionality, the new system will provide greater transparency to employees and GTM colleagues. This improvement will enhance security-related customer service and allow for the tracking of a security clearance status in real-time.

The Department takes the impact of vacancies on staff morale very seriously, and remains committed to pursuing innovative strategies to attract and retain a highly-qualified workforce and expedite recruitment. At the same time, the Department is actively fostering a culture that is family-friendly and conducive to self-care by helping employees juggle the demands of work and family, including aging parents, childcare, and medical emergencies.

Holding Leadership Accountable to Department Principles

The primary goals of the Department’s discipline process include accountability, fairness, and affirmation of core values for all employees, including those in leadership positions. The Department acknowledges that combatting a toxic workplace starts at the top; holding leadership accountable is key to maintaining a productive and mission-focused workplace. The Secretary’s One Team, One Mission Ethos for the Department promotes a culture of accountability at all levels. The Conduct, Suitability, and Discipline (CSD) division of the Office of Employee Relations manages the Department’s discipline program with the goal that employees throughout the ranks understand and adhere to the highest standards of conduct and professionalism.

To advance these goals, CSD continues to manage an average of 350 cases for possible action per year from investigative offices and bureaus. CSD works closely with the Bureau of Diplomatic Security, Office of Civil Rights, Office of the Inspector General, Office of the Legal Adviser’s Office of Employment Law, bureau executive offices, other GTM offices, and the Drug Free Workplace administrator, in the management of the discipline program. The Manager Support Unit of the Office of Employee Relations also works to educate and support managers and employees in preventing or addressing misconduct at all levels before it affects the efficiency of the Service, and to ensure that employees are free from harassment in the workplace.

7. Promoting Accountability Through Internal Coordination and Clear Lines of Authority

The Department acknowledges that clear lines of authority are necessary for ensuring that the Department is able to hold decision-makers accountable. It also recognizes that an organization as diffuse and diverse in mission as the Department requires a great deal of coordination between internal and external partners. Through the Enterprise Governance Board process, the Department is breaking down siloes and raising cross-cutting issues to the Department’s highest levels.

Photo showing Secretary Pompeo participating in the launch of the U.S.-Austria Friendship Tram with Vienna Mayor Michael Ludwig and United States Ambassador to the Republic of Austria Trevor D. Traina, Vienna, Austria, August 14, 2020. [Department of State]

Summary of Financial Statement Audit and Management Assurances

As described in this report’s section called Departmental Governance, the Department tracks audit material weaknesses as well as other requirements of the Federal Manager’s Financial Integrity Act of 1982 (FMFIA). Below is management’s summary of these matters as required by OMB Circular A-136, Financial Reporting Requirements, revised.

Summary of Financial Statement Audit

SUMMARY OF FINANCIAL STATEMENT AUDIT
Audit Opinion: Unmodified
Restatement: No
MATERIAL WEAKNESSES BEGINNING
BALANCE
NEW RESOLVED CONSOLIDATED ENDING
BALANCE
Total Material Weaknesses 0 0 0 0 0

Summary of Management Assurances

EFFECTIVENESS OF INTERNAL CONTROL OVER FINANCIAL REPORTING (FMFIA § 2)
Statement of Assurance:  
MATERIAL WEAKNESSES BEGINNING
BALANCE
NEW RESOLVED CONSOLIDATED REASSESSED ENDING
BALANCE
Total Material Weaknesses 0 0 0 0 0 0
EFFECTIVENESS OF INTERNAL CONTROL OVER OPERATIONS (FMFIA § 2)
Statement of Assurance:  
MATERIAL WEAKNESSES BEGINNING
BALANCE
NEW RESOLVED CONSOLIDATED REASSESSED ENDING
BALANCE
Total Material Weaknesses 0 0 0 0 0 0
COMPLIANCE WITH FEDERAL FINANCIAL MANAGEMENT SYSTEM REQUIREMENTS (FMFIA § 4)
Statement of Assurance:  
MATERIAL WEAKNESSES BEGINNING
BALANCE
NEW RESOLVED CONSOLIDATED REASSESSED ENDING
BALANCE
Total Non-conformances 0 0 0 0 0 0
COMPLIANCE WITH SECTION 803(a) OF THE FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT ACT (FFMIA)
  AGENCY AUDITOR
1. Federal Financial Management System Requirements Compliance noted Lack of compliance noted
2. Applicable Federal Accounting Standards Compliance noted Compliance noted
3. USSGL at Transaction Level Compliance noted Compliance noted

DEFINITION OF TERMS

Beginning Balance: The beginning balance must agree with the ending balance from the prior year.

New: The total number of material weaknesses/non-conformances identified during the current year.

Resolved: The total number of material weaknesses/non-conformances that dropped below the level of materiality in the current year.

Consolidated: The combining of two or more findings.

Reassessed: The removal of any finding not attributable to corrective actions (e.g., management has re-evaluated and determined that a finding does not meet the criteria for materiality or is redefined as more correctly classified under another heading).

Ending Balance: The year-end balance that will be the beginning balance next year.

Payment Integrity and Other Laws and Regulations

Payment Integrity Information Act

Over the past decade, laws and regulations governing the identification and recovery of improper payments have evolved to strengthen improvements in payment accuracy and raise public confidence in Federal programs. The Improper Payments Information Act of 2002 (IPIA), as amended and expanded by other related laws, collectively required agencies to periodically review all programs and activities to identify those susceptible to significant improper payments, to conduct payment recapture audits, and to leverage Government-wide Do Not Pay initiatives. The IPIA regulations also required extensive reporting requirements. In recent years, OMB transformed the improper payment compliance framework to create a more unified, comprehensive, and less burdensome set of requirements. IPIA was repealed and replaced by the Payment Integrity Information Act of 2019 (PIIA), which was passed on March 2, 2020. The PIIA modified and restructured existing improper payments laws to help agencies better identify and reduce any money wasted as a result of improper government payments. Not all improper payments are fraud, and not all improper payments represent a loss to the government. Generally, an improper payment is any payment that should not have been made or that was made in an incorrect amount under a statutory, contractual, and administrative or other legally applicable requirement.

The Department defines its programs and activities in alignment with the manner of funding received through appropriations, as further subdivided into funding for operations carried out around the world. Risk assessments over all programs are done every three years. In the interim years, risk assessments evaluating programs that experience any significant legislative changes and/or significant increase in funding will be done to determine if the Department continues to be at low risk for making significant improper payments at or above the threshold levels set by OMB. The Department conducted a risk assessment of all programs and activities in 2019. During 2020, the Department conducted risk assessments of the following programs: Voluntary Contributions; Assessed Contributions; Diplomatic and Support Programs; Security in Afghanistan and Pakistan; International Security; Embassy Operations; and Construction. After performing risk assessments for these programs, the Department determined that none of its programs in 2020 were risk-susceptible for making significant improper payments at or above the threshold levels set by OMB.

Annually, the Department submits data to OMB that is collected and presented on https://paymentaccuracy.gov/ by individual agency or on a Government-wide consolidated basis. This website contains current and historical information about improper payments made under Federal programs, as well as extensive information about how improper payments are defined and tracked. Please refer to the https://paymentaccuracy.gov/ website for detailed results from the Department’s efforts in 2020 to comply with PIIA.

Fraud Reduction Report

Government leaders are under increasing pressure, with limited resources and more public scrutiny, to reduce or eliminate fraud, waste, abuse, misconduct, and improper payments in Federal programs and operations. Fraud in the Federal Government is a serious problem that wastes taxpayer dollars, prevents Federal programs from carrying out their intended purpose and serving target populations, and creates potential national security risks. Congress and Federal agencies have been working to combat fraud and reduce improper payments by creating policies and legislation that will give agencies the tools that they need to target and prevent fraud.

PIIA incorporated section 3(a) of the Fraud Reduction and Data Analytics Act (FRDAA) of 2015 and officially repealed FRDAA. Therefore, under PIIA agencies are required to report on their progress to implement financial and administrative controls in compliance with the OMB guidelines, GAO’s Standards for Internal Control in the Federal Government (Green Book), and the OMB Circular A-123.

To help managers combat fraud and preserve integrity in government agencies and programs, GAO identified leading practices for managing fraud risks and organized them into the Framework for Managing Fraud Risk in Federal Programs. This framework, and other leading practice materials, provided a foundation for the Department’s fraud risk program.

Progress in Implementing Financial and Administrative Controls

The Department has a strong management controls program in place, and performs extensive work to provide value beyond complying with the myriad of laws and regulations applicable to the Department. Below are examples and highlights from a few of our accomplishments in 2020.

Consular: The Department’s Bureau of Consular Affairs (CA) has historically analyzed financial and adjudicatory data pertaining to specific visa categories and passport applications to determine possible fraud trends or detect internal malfeasance. CA operates an advanced fraud analytics program to identify, combat, and prevent potential fraud through fraud prevention units (FPUs) located at 220 embassies and consulates abroad, as well as 29 domestic passport agencies and centers. FPUs use the results of this analysis in combination with their knowledge of local conditions to train consular adjudicators to identify potentially fraudulent applicants. Visa and passport adjudicators are trained to identify counterfeit and fraudulently issued documents, as well as impostors, during their adjudicatory training and in advanced fraud prevention training at technologically equipped facilities. Additionally, CA’s Office of the Comptroller trains Fees Accountable Consular Officers and consular managers on how to spot the signs of potential financial fraud.

Other factors that serve to deter fraud include the requirement of applicants for consular services to pay a fee prior to receipt of service and undergo biometric verification of identity, whether facial recognition (visas and passports) and/or fingerprinting (visas). To proactively prevent fraud, CA provides external training to consular personnel on fraud trends, techniques and counter measures during adjudicative training and in advanced fraud prevention training throughout their careers. CA adjudicators have access to online databases that assist with verification of genuine identity and travel documents and to detect counterfeit and altered documents. CA’s Counterfeit Deterrence Laboratory contributes to the design and development of secure U.S. travel documents by sharing analysis and expertise with the interagency group.

Property: Embassy Vienna implemented new internal controls for all personnel using vehicle fuel cards that increased its capacity to prevent the unauthorized use of vehicles and fuel theft.

Beneficiary Payments: The Department identified an individual who committed bank fraud to steal annuity payments from 20 retired annuitants. The individual exploited the Annuity Express (companion to OPM’s Employee Express) system and changed email addresses and bank account information to redirect beneficiary payments. The Department remedied this vulnerability by requiring new procedures involving two-factor identification to change banking information. OPM and Treasury were fully briefed and improved controls at their agencies to help deter elder fraud.

Progress in Implementing the Fraud Risk Principle in the Green Book

The Department conducts an annual entity-level control assessment to comply with the GAO’s Green Book. The assessment includes Principle #8, which requires management to consider the potential for fraud when identifying, analyzing, and responding to risks. Overall, the Department’s assessment of fraud included tests of operating effectiveness and utilized other existing fraud programs conducted within our bureaus. Other programs that identified fraud were considered including the Statement of Assurance process, as well as work performed by external auditors such as the OIG, GAO, and the Special Inspector General for Afghanistan Reconstruction.

Progress in Implementing Best Practices for Managing Fraud Risk

In 2020, CGFS invested significant resources to develop Department-wide fraud risk identification programs, as well as various data analytic techniques to identify and prevent fraud. The Department engaged industry experts to provide guidance in designing a new fraud risk exposure analysis methodology that comparatively scores bureaus throughout the Department, to effectively assist the Department in making informed fraud risk management decisions. Additionally, CGFS engaged with management from all Bureaus in the Department and documented fraud risks, controls in place to mitigate the fraud risk, and a residual risk analysis. This effort was coordinated with the Department’s Enterprise Risk Management program in compliance with OMB Circular A-123.


DID YOU KNOW?

Elihu B. Washburne, the 25th Secretary of State, served only 11 days in 1869. His term remains the shortest of any Secretary of State.

Learn More

More information on former Secretaries can be found at: https://history.state.gov/departmenthistory/people/secretaries


Progress in Identifying Risks and Vulnerabilities

Many Department managers have robust fraud preventive and detective measures, and fraud analytics programs that have operated for many years, while some areas have recently developed fraud prevention activities. Below are examples and highlights from a few of our accomplishments in 2020.

Consular: CA liaised with management and consular adjudicators worldwide to refine their fraud prevention strategies and tactics to combat new and evolving threats. CA disseminated anti-fraud information to a wide variety of clients via a broad range of avenues, including formal fraud prevention training, the CA/FPP website, the Fraud Digest, webinars, and other publications. CA also liaised with the Bureau of Diplomatic Security (DS), the Department of Homeland Security (DHS) and other Federal agencies and organizations concerned with immigration fraud, alien smuggling, and identity theft linked to consular products. In addition, CA supported 51 investigations involving allegations of internal malfeasance, resulting in the termination or resignation of 13 consular staff. CA provided assistance to DS in visa and passport fraud investigations, with special focus on those that involve employee malfeasance.

Procurement: An Analytics team identified multiple cases of split purchases (where each transaction was below the micro-purchase threshold) which allowed posts to avoid the competitive bid process.

Beneficiary Payments: The use of Treasury’s Secure Payment System continues to assist with successful identification and prevention of fraudulent payments to beneficiaries. In 2020, 201,195 annuitant payments totaling $999 million were reviewed against the Death Master File and 65 payments totaling $284,208 were stopped due to this initiative.

Travel Card Program: In 2019, 110,226 transactions totaling more than $18 million were inspected by the Department’s automated Misuse tool, which reviews all credit card transactions and compares the data to travel orders to determine if the card was used in compliance with government mandates. 646 transactions were confirmed as misuse totaling $89,741. Annual 2020 results are not yet compiled.

Payroll: The COVID-19 pandemic resulted in a dramatic volume of authorized departures from Posts all over the world for personnel and their families to return to domestic safe havens. A component of how payroll is calculated includes location allowances earned while living abroad. Because personnel who relocated to the United States were no longer eligible for location allowances, this created a vulnerability to expend improper payments. The Department developed analytic reconciliation techniques to identify personnel who were granted safe passage payments and those who were still receiving location allowances, and as a result identified approximately 300 individuals who were required to return the overpaid allowances.

Progress on Establishing Strategies, Procedures, and Other Steps to Curb Fraud

Instances of potential and actual fraud are investigated by the Office of Inspector General. Some fraud investigations are also coordinated with the Criminal Fraud Investigations office in DS. In addition, posts routinely report the occurrences of fraud on an annual basis in the Statement of Assurance. Department-wide, all personnel are encouraged to anonymously report suspicious activity through the OIG hotline, which is prominently displayed on the Department’s intranet website in an easy to use reporting tool.

Fraud risk management is an important aspect of the Department’s strategy to achieve its mission and goals. During 2020, Bureaus collaborated with each other to advance an organizational culture to combat fraud across components, programs, and levels. The Department will continue to dedicate resources to this important initiative in 2021.

Debt Management

Outstanding debt from non-Federal sources (net of allowance) increased from $59.7 million at September 30, 2019 to $79.3 million at September 30, 2020. Direct Loans, IBWC, and Administrative Loans increased by $22.4 million while Civil Monetary Penalties and Passport non-sufficient funds decreased by $2.8 million at September 30, 2020, resulting in an increase overall to the non-Federal source figures.

Non-Federal receivables consist of debts owed to the International Boundary and Water Commission, Civil Monetary Fund, and amounts owed for repatriation loans, medical costs, travel advances, and other miscellaneous receivables.

The Department uses installment agreements, salary offset, and restrictions on passports as tools to collect its receivables. It also receives collections through its cross-servicing agreement with the Department of the Treasury (Treasury). In 1998, the Department entered into a cross-servicing agreement with Treasury for collections of delinquent receivables. In accordance with the agreement and the Debt Collection Improvement Act of 1996 (Public Law No. 104-134), the Department referred $3.8 million to Treasury for cross-servicing in 2020. Of the current and past debts referred to Treasury, $1.9 million was collected in 2020.

Receivables Referred to the Department of the Treasury for Cross-Servicing
  2020 2019 2018
Number of Accounts 2,512 2,823 1,377
Amounts Referred (dollars in millions) $3.8 $2.7 $4.3
Amounts Collected (dollars in millions) $1.9 $1.6 $1.6

Electronic Payments

For 2020, the Department disbursed over 4 million payments and 99.3 percent of them were processed through Electronic Funds Transfer (EFT). For overseas operations, the EFT percentage increased from a 2019 percentage of 99.01 percent to a 2020 percentage of 99.36 which is a major accomplishment given the complexities of banking operations in some foreign countries. Domestic operations EFT percentage remained constant at 99.3 percent from 2019 to 2020.

Photo showing Secretary Pompeo meeting with the Taliban Delegation in Doha, Qatar, September 12, 2020. [Department of State]

Grants Programs

The Department understands the importance of timely closeout of grants and cooperative agreements to promote the financial accountability of grants programs. The Department continues to strengthen enforcement of the closeout requirements across domestic bureaus and overseas posts. Use of a standardized Federal assistance management system (State Assistance Management System (SAMS)), coupled with updates to Department Federal assistance policies, has enabled the Department to better monitor, analyze, and report on the closeout of awards.

However, the Department still faces challenges in efficiently closing awards in a timely manner. While data passes electronically between SAMS, the Department’s financial systems, and the Health and Human Services Payment Management System (PMS), some critical closeout tasks remain a manual process in the payment system. The manual steps required to reconcile differences between systems can be labor-intensive, especially in PMS, and the Department has taken numerous steps to mitigate and resolve these issues. SAMS requires the use of a standardized closeout checklist and offers reporting capabilities to help identify awards awaiting closeout. Additionally, the Department utilizes the Department of the Interior to negotiate indirect cost rates, which facilitates timelier award closeout. The Department’s publication of a Federal assistance Human Capital Plan has resulted in increased training and guidance on Federal assistance management, including closeout requirements and procedures.

In March 2020, the Office of Inspector General (OIG) conducted the risk assessment of the agency’s grant closeout process and concluded the risk associated with the Department’s grant closeout process is “low” in the OIG’s Information Report: Risk Assessment of the Department of State Grant and Cooperative Agreement Closeout Process (AUD-CGI-20-25).

The “Expired Federal Grants and Cooperative Agreements Summary“ table shows the 878 awards totaling $45,073,045 for which closeout has not yet occurred, but for which the period of performance has elapsed by two years or more prior to September 30, 2020.

Expired Federal Grants and Cooperative Agreements Summary
Category 2-3 Years 3-5 Years More than
5 Years
Number of Grants/Cooperative Agreements
with Zero Dollar Balances
154 209 22
Number of Grants/Cooperative Agreements
with Undisbursed Balances
264 200 29
Total Amount of Undisbursed Balances $19,937,926 $22,641,474 $2,493,645

Federal Civil Penalties Inflation Adjustment Act

The Federal Civil Penalties Inflation Adjustment Act of 1990 established annual reporting requirements for civil monetary penalties assessed and collected by Federal agencies. The Department assesses civil fines and penalties on individuals for such infractions as violating the terms of munitions licenses, exporting unauthorized defense articles and services, and valuation of manufacturing license agreements. In 2020, the Department assessed $11 million in penalties against two companies, and collected $7.8 million of outstanding penalties from five companies. The balance outstanding as of September 30, 2020 was $12.3 million. The “Federal Civil Penalties Inflation Adjustments” table lists the current penalty level for infractions governed by the Department.

Federal Civil Penalties Inflation Adjustments
Statutory Authority Penalty Year Enacted Latest
Year of
Adjustment
Current Penalty Level ($ Amount or Range) Location for Penalty Update Details
Arms Export Control Act of 1976, 22 U.S.C. 2778(e) International Traffic in Arms Regulations Violations – Export of Defense Articles and Defense Service 1985 2020 $1,183,736 85 FR 2020-2022
(January 14, 2020)
Arms Export Control Act of 1976, 22 U.S.C. 2779a International Traffic in Arms Regulations Violations – Prohibition on Incentive Payments 1994 2020 $860,683 85 FR 2020-2022
(January 14, 2020)
Arms Export Control Act of 1976, 22 U.S.C. 2780 International Traffic in Arms Regulations Violations – Transactions with Countries Supporting Acts of International Terrorism 1989 2020 $1,024,457 85 FR 2020-2022
(January 14, 2020)
False Claims Act of 1986, 31 U.S.C. 3729-3733 Penalty imposed on persons and companies who defraud governmental programs 1986 2020 $11,665 – $349,969 85 FR 2020-2022
(January 14, 2020)
Chemical Weapons Convention Act of 1998, 22 U.S.C. 6761(a)(1)(A) Prohibited acts relating to inspections 1998 2020 $39,229 85 FR 2020-2022
(January 14, 2020)
Chemical Weapons Convention Act of 1998, 22 U.S.C. 6761(a)(1)(B) Recordkeeping violations 1998 2020 $7,846 85 FR 2020-2022
(January 14, 2020)
31 U.S.C. 1352 – Limitation on use of appropriated funds Penalties for both improper expenditures and failure to disclose. First time offenders 1989 2020 $20,158 85 FR 2020-2022
(January 14, 2020)
31 U.S.C. 1352 – Limitation on use of appropriated funds Penalties for both improper expenditures and failure to disclose. Other offenders 1989 2020 $20,489 – $204,892 85 FR 2020-2022
(January 14, 2020)

Resource Management Systems Summary

Introduction

The financial activities of the Department of State (the Department or DOS) occur in approximately 270 locations in 180 countries. We conduct business transactions in over 135 currencies and even more languages and cultures. Hundreds of financial and management professionals around the globe allocate, disburse, and account for billions of dollars in annual appropriations, revenues, and assets. The Department is at the forefront of Federal Government efforts to achieve cost savings by engaging in shared services. Indeed, the Department’s financial management customers include 45 U.S. Government agencies in every corner of the world, served 24 hours a day, seven days a week. Another illustration of the Department’s commitment to shared services is its hosting at its Charleston, S.C. financial center of USAID’s core financial system. This system, known as Phoenix, makes use of the same commercial off-the-shelf (COTS) software as the Department’s core system, thereby promoting smooth interaction between the two agencies.

The Department’s financial management efforts are guided by three overarching goals: delivering world-class financial services and systems to our customers effectively and efficiently; establishing and administering an accountable, transparent, and prudent rigorous internal control, compliance and financial reporting environment; and facilitating interagency coordination and liaison activities that support Department operations.

The nonprofit independent firm that conducts the Department’s annual survey of overseas users of financial operations and systems is one of the leading proponents of benchmarking and best practices in business research. The firm noted that the Department’s Bureau of the Comptroller and Global Financial Services (CGFS) set its overall performance target for customer satisfaction at 80 percent for all services, a goal considerably higher than what many Government agencies and private sector financial institutions achieve. Not only has CGFS set such high goals, it has consistently surpassed these marks for overall satisfaction and satisfaction with the majority of its individual systems. In our most recent survey, for the first time all nine financial systems received a satisfaction rating of 80 or higher from overseas users. Such scores exceed benchmark averages from financial services customers of 64 for Federal Government agencies and 75 for private sector providers. CGFS viewed this improvement as particularly meaningful as it was driven by an increase in both the response rate and average satisfaction scores provided by financial management officers.

Continued standardization and consolidation of financial activities and leveraging investments in financial systems to improve our financial business processes will lead to greater efficiencies and effectiveness. This change is not always easy with the decentralized post-level financial services model that exists for the Department’s worldwide operations. In addition, over the next several years, we will need to leverage upgrades in our core financial system software, locally employed (LE) staff and American payroll and time and attendance (T&A) deployments, and integration with other Department corporate systems to improve our processes in ways that better support financial operations. Besides seeking greater linkages within our systems, we also are seeking additional opportunities to improve our shared service efficiencies in ways that help us serve our customer agencies and lower overall costs to the U.S. Government.

We have made significant progress in modernizing and consolidating Department resource management systems. In response to cybersecurity concerns, our development efforts in all lines of business increasingly emphasize the need to reduce vulnerabilities within systems and to be mindful of potential threats to unauthorized access and to the integrity of data within our systems. This focus seeks to protect both the Department and its employees. CGFS’ financial systems development activities are now operated under Capability Maturity Model Integration (CMMI) industry standards.

We continue to make use of proven COTS software in delivering resource management systems to the Department and our serviced customers. We have pushed to consolidate these systems to the CGFS platform with the goals of meeting user requirements, sharing a common platform and architecture, reflecting rationalized standard business processes, and ensuring secure and compliant systems. A COTS solution is the platform for our Global Foreign Affairs Compensation Systems (GFACS). By managing the process in this manner, we can deliver products that are compliant, controlled, and secure. OMB continues its initiative to standardize Government-wide business processes to address the Federal Government’s long-term need to improve financial management. Also, over the next several years, several new Federal accounting and information technology standards, many driven by the Department of the Treasury, will become effective. These include Government-wide projects to standardize business requirements and processes, establish and implement a Government-wide accounting classification, and support the replacement of financial statement and budgetary reporting. The Department’s implementation of new standards and Government-wide reporting will strengthen both our financial and information technology management practices.

The Department uses financial management systems that are critical to effective agency-wide financial management, financial reporting, and financial control. These systems are included in various programs. An overview of these programs follows.

Financial Systems Program

The financial systems program includes the Global Financial Management System (GFMS), the Regional Financial Management System (RFMS), RFMS Overseas Acquisition Integration, and the Consolidated Overseas Accountability Support Toolbox (COAST).

The Global Financial Management System. GFMS centrally accounts for billions of dollars recorded through over 5 million transactions annually, by more than 1,000 users and over 25 “handshakes” with other internal and external systems. GFMS is critical to the Department’s day-to-day operations. It supports the execution of the Department’s mission by effectively accounting for business activities and recording the associated financial information, including obligations and costs, performance, financial assets, and other data. GFMS supports the Department’s domestic offices and serves as the agency’s repository of corporate data. GFMS was upgraded from Momentum 7.0.1 to 7.6.0.1 this year.

During 2020, the Department continued the rollout of the OMB mandated Invoice Processing Platform (IPP). IPP is a shared service provided by the Department of the Treasury. Use of this service allows DOS to streamline domestic invoice processing. The Department and vendors will have access to the IPP platform to exchange data on orders, invoices, and payments. Internal controls will ensure that invoices are reviewed and approved in IPP by using configurable standard workflows. During 2020, implementation was completed in 24 Department bureaus and implementation activities were underway in all remaining bureaus. Over 13,000 orders have been converted to the IPP and nearly 20,000 vendor payments have been processed in IPP to date. Full deployment will be completed in 2021.

DOS continued efforts to improve methods to track Buyer-side Interagency Agreements (IAAs) in GFMS, including providing the ability to create 7600A and 7600B forms directly from GFMS. Signed IAAs must be attached to the GFMS Agreement and Order documents, providing for a central repository for all IAAs. During 2020, training was provided for all Department bureaus and the new business process was implemented for seven bureaus. Over 200 IAA transactions were processed in GFMS using the new process in 2019. Subsequently in 2020, all bureaus were required to use the new process, and bureaus processed over 2,100 transactions. The Department completed the development and system configuration of a new accounting model for the buyer-side IAA Advance Pay process. In 2020, the Department implemented the Advance Pay process across all bureaus. This IAA implementation in GFMS introduces critical business process changes that will facilitate adoption of the Government-wide G-Invoicing platform by 2023.

The Regional Financial Management System. RFMS is the global accounting and payment system that has been implemented for posts around the world. RFMS includes a common accounting system for funds management and transaction processing. To improve the accuracy of the Department’s residential and operational leases, posts started using RFMS/M Property related Obligation and Payment (PrOPP) functionality. PrOPP provides an automated tool to set up recurring profiles for obligations and payments related to leases and other recurring payments and includes reports and queries for managing future lease transactions. There are 103 posts that are currently live on PrOPP. An analysis on integrating the Real Property Application and RFMS was conducted as stated in 2019, and this analysis continues as the Department is exploring options.

RFMS Overseas Acquisition Integration. During 2020, in an effort to improve government efficiency, the Department selected Momentum to be the Department-wide solution for contract writing purposes. Momentum is already in use domestically and the overseas user community will adopt the same model for its usage. The current method of procuring goods and services overseas is unable to meet legislative reporting requirements for procurement data whereas domestic procurement meets its necessary mandates. DOS was unable to certify their overseas procurement data as specified by the Digital Accountability and Transparency (DATA) Act, a major deficiency in their quarterly submissions to Treasury. OMB memorandum M-19-16 requires agencies to centralize mission support functions. Aligning domestic and overseas procurement models allows DOS to comply with this directive and meet its necessary DATA Act reporting requirements for overseas procurement data. The Department is required to certify its overseas procurement data and failing to meet this requirement represents an audit finding. Inability to resolve this major deficiency could result in lower funding and/or full-time equivalent levels for the agency. At the end of this project, a single, unified procurement approach eliminates the need to support two different applications for domestic and overseas use. It places DOS on a defined path to standardize procurement procedures and overall policy globally while increasing data accuracy, auditability and transparency for data reporting compliance (DATA Act, Federal Procurement Data System-Next Generation, OIG). Simultaneously, it prepares the Department to implement future Foreign Assistance Data Review (FADR) and Technology Business Management reporting requirements. A cohesive procurement model also streamlines the DOS training footprint for procurement staff and the overall user support network while also consolidating procurement data within a single data warehousing solution over the long term.

The Consolidated Overseas Accountability Support Toolbox. COAST is an application suite deployed to more than 180 posts around the world as well as to Department of State and other agency headquarters offices domestically. COAST captures and maintains accurate, meaningful financial information, and provides it to decision makers in a timely fashion. The current COAST suite consists of COAST Cashiering, COAST Reporting, and COAST Payroll Reporting. In 2020, the Department deployed COAST release 3.5.0.1 to update reports to comply with the Transport Layer Security 1.2 configuration. The implementation of COAST 3.5.0.1 started in April and is expected to be completed in November 2020. In 2020, the Department continued with the RFMS/Cashiering (RFMS/C) project to replace COAST Cashiering with a centralized, web-based cashiering application installed in a single location. With RFMS/C, transactions will be able to integrate with RFMS/M in real time. This will replace the existing COAST Cashiering process of sending transactions to RFMS/M through a batch file. RFMS/C was successfully implemented for Thailand in February 2020 as the initial pilot. Belgium has been identified as the second pilot location for December 2020, with additional pilots being planned for rollout in 2021. In addition to pilot implementations, RFMS/C version 1.0.1.0 was implemented in September 2020 and added functional enhancements to the software. The RFMS/C 1.0.2.0 release to support FADR was successfully implemented in October 2020. Version 1.0.2.1T is scheduled for December 2020 to support the upgrade of the RFMS/C database to Oracle 19. COAST Reporting and COAST Payroll Reporting capabilities will be discussed in more detail under the Business Intelligence Program.

Planning and Budget Systems Program

In 2020, the Budget System Modernization (BSM) project completed the fourth significant milestone to standardize, consolidate, and simplify the budgeting systems within the Department with completion of the new releases of the Integrated Budget Intelligence System (IBIS) and Global Business Intelligence (BI) features to provide foreign currency projections and proposed adjustments to manage overseas budget impacts for the current year. This completes the transition of all functions of the legacy Central Resource Management System (CRMS) to IBIS. In addition, IBIS budgetary data has been made available within the Global BI reporting platform to support an expanded planned versus actual and other budgetary reporting previously unavailable to the agency in a central location.

In 2020, the BSM project also completed three of the six major milestones of the IBIS overseas initiative, which when completed, will produce a unified budgeting system, encompassing domestic and overseas budgeting processes. The first milestone introduced regional bureau capabilities to communicate and report budget targets with posts as well as standardize the post target reports. The second IBIS overseas milestone introduced a layered global security platform to allow for all posts, overseas organization support divisions, and domestic users to utilize one centralized system. The third milestone completed in 2020 allows for submission and approval of unfunded priority requests, and other data calls by posts to regional bureaus. The latter functionality was introduced into the platform late in the fiscal year and will be rolled out to the user community in 2021.

In 2021, the BSM project will work towards completing the final three milestones of the IBIS overseas rollout as well as incorporating other budgetary functionality from existing legacy systems such as Web Resource Allocation and Budget Integration Tool (WebRABIT). WebRABIT is an application used by regional and some functional bureaus for tracking modifications of execution year budgets to their posts. WebRABIT is currently in an operations and maintenance mode, with resources being aligned at a lower level of activity. The BSM project is part of the long-term strategy to provide a unified budgetary Department-wide solution for the Department.

Web International Cooperative Administrative Support Services (WebICASS) is the principal means by which the U.S. Government shares the cost of common administrative support at its more than 270 diplomatic and consular posts overseas. The Department has statutory authority to serve as the primary overseas shared service provider to other agencies.

Travel Systems Program

In 2016, the Department successfully transitioned to the next generation of the E-Government Travel Services (ETS2) contract with Carlson Wagonlit Travel. In 2016, the Department also implemented the Local Travel module allowing for the submission of local travel claims for expenses incurred in and around the vicinity of a duty station. The Department expanded the use of the Local Travel feature to also accommodate non-travel employee claims previously submitted through an OF-1164. In the Local Travel module, approvers will electronically approve claims and provide reimbursement to the employee’s bank account via EFT. The Department has completed this implementation for 180 posts overseas.

The Department continues to work with our bureaus and posts to identify improvements that can be made to the travel system. The Department also participates with other agencies to prioritize travel system enhancements across the Federal Government landscape. The Department worked with Carlson Wagonlit Travel to enhance the functionality for reservation retrievals within amendments to reflect updated ticket costs more accurately without manual manipulation. The Department continues to work with Carlson Wagonlit Travel on enhancements to support integration improvements with our financial systems. The Department also continues to work with Carlson Wagonlit Travel on enhancements to support the implementation of split disbursements for direct payments of individually billed account charges, the Local Payments module domestically, and initiated work to implement an integrated reporting solution to identify cost savings associated with travel.

Compensation Systems Program

The Department serves as one of five payroll shared service providers on behalf of Federal agencies. Shared service providers process payroll annually for some 2.3 million employees worldwide, or about 99 percent of the Federal civilian workforce.

The Department continued to execute a phased deployment strategy, replacing six legacy payroll systems with a single, COTS-based solution to address the widely diverse payroll requirements of the Foreign Service, Civil Service, LE staff, and retirees of the Department and the other 45 civilian agencies serviced. The “Compensation System Vision and Concept” diagram highlights how past and future changes involve simplifying and consolidating our systems. The Global Foreign Affairs Compensation System (GFACS) will leverage a rules-based, table-driven architecture to promote compliance with the complex statutes found across the Foreign and Civil Service Acts and local laws and practices applicable to all the countries in which civilian agencies operate.

Diagram depicting the Compensation System vision and concept.

The last pay module to be implemented in GFACS is American payroll. It is currently in final testing prior to full implementation. The web-based global time and attendance product, based on the same technology as GFACS, will follow the American payroll implementation. This product has the capability of remote accessibility, electronic routing and approval, and self-service features. As a result, it will bring a more efficient and modern process to the Department’s workforce.

Business Intelligence Program

The Department’s Business Intelligence program consists of the COAST Reporting, COAST Payroll Reporting, and the Global BI Reporting. Global BI enables users to access financial information from standard, prepared reports or customized queries. It also provides, on a daily basis, critical financial information to the Department’s enterprise data warehouse. During 2020, the GFMS data warehouse (DW) was retired and a migration of all reporting content into the Global BI reporting tool was completed. The GFMS DW was officially retired on October 1, 2020.

In 2017, the Department implemented the Global BI application, building on the infrastructure being used for the DW, and adding an in-memory appliance and a new data analytics tool. In 2018, the Global BI application continued to be used to import, reconcile, and export data that meets the requirements of the DATA Act and FADR. The Global BI application was updated to complete the full suite of financial reports for overseas posts as well as a second set of analytics information spaces for posts to drill into their overseas transactional data. The Department continued through an agile-like process utilizing a collection of overseas posts, a regional bureau, and accounting support staff in Charleston, S.C. to finalize overseas report and information space requirements and report functionality. For the suite of Overseas Analytics, training has been formally conducted for about 80 posts in all regions. Several domestic bureaus have also been trained. In 2020, improvements and new functionality was added to Global BI’s external reporting module to improve the Department’s foreign assistance reporting process, support the tracking and reporting of CARES Act and COVID supplemental funding, as well as reporting for the DATA Act to meet new Treasury requirements. In 2020, new reports were added to support and improve year-end financial reporting for the Department.

In 2021, the Global BI application will be updated to include versions of the Payroll reports from COAST. Engaging with the overseas user community, new reports and functionality will be added to the overseas analytics suite as well as releasing required updates for the RFMS Update, E-Invoicing, and Overseas Acquisitions programs. Global BI’s Business Objects infrastructure will also be updated in 2021 to support the implementation of a new Lumira reporting tool which will provide the Global BI user community with a new dash boarding and data exploration toolkit. Data loading frequency to Global BI will continue to be a focus with the goal of loading data four times a day for the overseas community and twice a day for the domestic community. Lastly, new GFMS and RFMS combined reporting and dashboards will be a focus as Global BI will look to provide combined global financial reporting to assist bureaus in reaching a more detailed comprehensive view of their spending.


DID YOU KNOW?

Cordell Hull, the 47th Secretary of State, served 4,289 days (11 years and 271 days) from 1933 to 1944. He was the longest serving Secretary in U.S. history.

Learn More

More information on former Secretaries can be found at: https://history.state.gov/departmenthistory/people/secretaries


Photo showing Secretary Pompeo meeting with Chinese dissidents and members of the diaspora in Yorba Linda, California, July 23, 2020. [Department of State]

Heritage Assets

The Department has collections of art objects, furnishings, books, and buildings that are considered heritage or multi-use heritage assets. These collections are housed in the Diplomatic Reception Rooms, senior staff offices in the Secretary’s suite, offices, reception areas, conference rooms, the cafeteria and related areas, and embassies throughout the world. The items have been acquired as donations, are on loan from the owners, or were purchased using gift and appropriated funds. The assets are classified into nine categories: the Diplomatic Reception Rooms Collection, the Art Bank Program, the Library Rare & Special Book Collection, the Cultural Heritage Collection, the Secretary of State’s Register of Culturally Significant Property, the National Museum of American Diplomacy, the Art in Embassies Program, the International Boundary and Water Commission, and the Blair House. Items in the Register of Culturally Significant Property category are classified as multi-use heritage assets due to their use in general government operations.

Diplomatic Reception Rooms Collection

In 1961, the State Department’s Office of Fine Arts began the privately-funded Americana Project to remodel and redecorate the 42 Diplomatic Reception Rooms – including the offices of the Secretary of State – on the seventh and eighth floors of the Harry S Truman Building. The Secretary of State, the President, and Senior Government Officials use the rooms for official functions promoting American values through diplomacy. The rooms reflect American art and architecture from the time of our country’s founding and its formative years, 1740 – 1840. The rooms also contain one of the most important collections of early Americana in the nation, with over 5,000 objects, including museum-quality furniture, rugs, paintings, and silver. These items have been acquired through donations or purchases funded through gifts from private citizens, foundations, and corporations. No tax dollars have been used to acquire or maintain the collection. There are three public tours each day.

Photo showing the Seoul Old American Legation, built in 1883 and now used as a guest house, is an exceptionally well-preserved example of traditional Korean residential architecture that illustrates the long history of Korean-American friendship. [Department of State/OBO]

Art Bank Program

Photo showing the program folder from President Ronald Reagan’s June 1987 visit to Berlin. [Department of State]

The Art Bank Program was established in 1984 to acquire artworks that could be displayed throughout the Department’s offices and annexes. The works of art are displayed in staff offices, reception areas, conference rooms, the cafeteria, and related public areas. The collection consists of original works on paper (watercolors and pastels) as well as limited edition prints, such as lithographs, woodcuts, intaglios, and silk-screens. These items are acquired through purchases funded by contributions from each participating bureau.

Rare & Special Book Collection

In recent years, the Ralph J. Bunche Library has identified books that require special care or preservation. Many of these publications have been placed in the Rare Books and Special Collections Room, which is located adjacent to the Reading Room. Among the treasures is a copy of the Nuremberg Chronicles, which was printed in 1493; volumes signed by Thomas Jefferson; and books written by Foreign Service authors.

Cultural Heritage Collection

The Cultural Heritage Collection, which is managed by the Bureau of Overseas Buildings Operations, Office of Residential Design and Cultural Heritage, is responsible for identifying and maintaining cultural objects owned by the Department in its properties abroad. The collections are identified based upon their historic importance, antiquity, or intrinsic value.

Secretary of State’s Register of Culturally Significant Property

The Secretary of State’s Register of Culturally Significant Property was established in January 2001 to recognize the Department’s owned properties overseas that have historical, architectural, or cultural significance. Properties in this category include chanceries, consulates, and residences. All of these properties are used predominantly in general government operations and are thus classified as multi-use heritage assets. Financial information for multi-use heritage assets is presented in the principal statements. The register is managed by the Bureau of Overseas Buildings Operations, Office of Residential Design and Cultural Heritage.

National Museum of American Diplomacy

The National Museum of American Diplomacy is a unique education and exhibition venue at the Department of State that tells the story of the history, practice, and challenges of American diplomacy. It is a place that fosters a greater understanding of the role of American diplomacy, past, present, and future, and is an educational resource for students and teachers in the United States and around the globe. Exhibitions and programs inspire visitors to make diplomacy a part of their lives. The National Museum of American Diplomacy actively collects artifacts for exhibitions.

Art in Embassies Program

The Art in Embassies Program was established in 1964 to promote national pride and the distinct cultural identity of America’s arts and its artists. The program, which is managed by the Bureau of Overseas Buildings Operations, provides original U.S. works of art for the representational rooms of United States ambassadorial residences worldwide. The works of art were purchased or are on loan from individuals, organizations, or museums.

International Boundary and Water Commission

One of the IBWC’s primary mission requirements is the demarcation and preservation of the international boundary between the United States and Mexico (see Reporting Entity in Note 1.A). Roughly 1,300 miles of this border are demarcated by the Rio Grande and the Colorado River, and the other 700 miles of border are demarcated by 276 monuments along the land boundary, which extends from the Pacific Ocean to the Rio Grande. These monuments are jointly owned and maintained by the United States and Mexico. The United States is responsible for 138 monuments and considers them heritage assets. In addition, the IBWC is responsible for the Falcon International Storage Dam and Hydroelectric Power Plant. These were constructed jointly by the United States and Mexico pursuant to Water Treaty of 1944 for the mission purposes of flood control, water conservation, and hydroelectric power generation. Both were dedicated by U.S. President Dwight D. Eisenhower and President Adolfo Ruiz Cortines, of Mexico to the residents of both countries. Falcon is located about 75 miles downstream (southeast) of Laredo, Texas and about 150 miles above the mouth of the Rio Grande. They are considered multi-use heritage assets.

Blair House

Composed of four historic landmark buildings owned by GSA, Blair House, the President’s Guest House, operates under the stewardship of the Department of State’s Office of the Chief of Protocol and has accommodated official guests of the President of the United States since 1942. In 2012, these buildings were added to the Secretary’s Register of Culturally Significant Property for their important role in U.S. history and the conduct of diplomacy over time. Its many elegant rooms are furnished with collections of predominantly American and English fine and decorative arts, historical artifacts, other cultural objects, rare books, and archival materials documenting the Blair family and buildings history from 1824 to the present. Objects are acquired via purchase, donation or transfer through the private non-profit Blair House Restoration Fund; transfers may also be received through the State Department’s Office of Fine Arts and Office of the Chief of Protocol. Collections are managed by the Office of the Curator at Blair House, which operates under the Office of Fine Arts.

Photo showing Under Secretary of State Keith J. Krach participating in the U.S. International Development Finance Corporation board meeting in Washington, D.C., March 11, 2020. [Department of State]

Real Property

The Department of State maintains a real estate portfolio domestically to support its global mission. This mission is multi-facetted and includes such responsibilities as: the issuance of passports to American citizens, the protection of embassies and American personnel, the development of technological solutions to convey and protect information domestically and overseas, and the management of logistical services to provide supplies and goods to overseas posts. As this mission evolves, the domestic real estate portfolio must evolve with it.

In 2019, the last year for which data is available, Performance.gov reports that the Department’s real estate portfolio had grown by 3.15 percent. The link to view that information can be found at: https://www.performance.gov/real-property-metrics/. The factors described below have influenced the reported growth.

The Department and the GSA omitted inclusion of a roughly 300,000 square foot D.C. campus in the 2015 baseline but reported it every subsequent year in the Department’s portfolio. This artificially inflates the Department’s growth by approximately 2.5 percent. GSA has committed to correcting this inaccuracy in the 2020 Reduce the Footprint publication, by increasing the Department’s 2015 baseline to include this campus. However, this disparity remained in effect for 2019 reporting.

The Department’s footprint has grown due to the evolving nature of its mission. The increasing percentage of Americans traveling abroad from 2009 to 2019 required additional mission space to support passport issuance. Similarly, as security and protection of information and people faces greater challenges at home and overseas, additional laboratory, office, and storage space has been acquired. For example, supplementary passport agency space was added in Houston, Atlanta, and Boston, in response to municipal government requests to reduce crowding outside of agencies. Additionally, the childcare center at the National Foreign Affairs Training Center was expanded to increase the maximum number of employees served by the facility. Also, a Bureau of Medical Services outpost was added in Rosslyn, Virginia to provide front line services to employees, which was a critical asset in light of COVID-19. In all three examples, these locations previously did not have space that could be utilized for each project’s specific needs. Overall, these examples and the other additions represent about one percent portfolio growth.

Photo showing Secretary Pompeo departing Warsaw, Poland, August 15, 2020. [Department of State]

The Department continuously looks for methods of improving the utilization of its real estate portfolio while meeting mission needs. In the COVID-19 environment, the Department is further re-evaluating its requirement for space to support a more mobile, agile workforce while also maintaining social distancing protocols for public-facing spaces. In October 2020, the Department launched a real property capital planning initiative, parallel to the implementation of an integrated workplace management system which will work together to track the overall usage of the Department’s portfolio and plan for the optimization of the portfolio over the next ten years

U.S. Department of State

The Lessons of 1989: Freedom and Our Future