Management's Response to Inspector General

Bureau of the Comptroller and Global Financial Services
Report
November 17, 2014




In 2014, the Department of State's Office of Inspector General (OIG) identified management and performance challenges in the areas of: protection of people and facilities; managing contracts, acquisition, and grants; information security and management; financial management; managing posts in conflict areas; rightsizing; foreign assistance coordination and oversight; consular operations; leadership; and public diplomacy. The Department promptly takes corrective actions in response to OIG findings and recommendations. Highlights are summarized below.

1. Protection of People and Facilities
Challenge Summary Protecting overseas personnel and facilities continues to be a management challenge. Since the September 2012 Benghazi attacks, the Department has taken steps to protect against or prevent future attacks.
Actions Taken The Department has created and funded 14 new Threat Analyst positions. Eight analysts will be deployed overseas, which will be the first time analysts are assigned to work for regional security officers abroad. Six analysts will be embedded in the Diplomatic Security Command Center to better evaluate incoming threat information on a 24/7 basis, in concert with our interagency partners.
Actions Remaining The 14 Threat Analyst positions that have been created and advertised are scheduled to be filled during the current assignment cycle. Employees are expected to serve in these positions by summer 2015. The overseas analysts will complete one year of training domestically before deploying to their overseas posts by the summer of 2016.
2. Managing Contracts, Acquisition, and Grants
Challenge Summary The Department continues to face challenges managing contracts and grants, including cooperative agreements.
Actions Taken A memorandum was issued in April 2014 from the Procurement Executive to all warranted contracting officers and Federal Acquisition Certification-Contracting Officer's Representative (FAC-COR) Program certified individuals reminding them of their responsibility to maintain adequate records of contract administration actions. The Department designated a contract file audit coordinator to manage the new file audit efforts. Desk Officers performed a contract file review at Baku, Yerevan, and Tbilisi to initiate the file audit program. In May 2014, the Department issued Procurement Information Bulletin No. 2014-10, Contract Files, to create new contract file audit requirements.
Actions Remaining Contracting officers will be provided information on COR contract file deficiencies. This information may be used by contracting officers to determine the competency of CORs for appointment on their contracts. The Department will track significant failure of contracting officers and CORs to perform contract file duties and will use this information to determine appropriate remedies which may include additional oversight of the individual, remedial training, reduction of warrant level, suspension of warrant, or suspension of COR certification.
3. Information Security and Management
Challenge Summary The Department continues to face difficulties meeting the requirements of the Federal Information Security Management Act of 2002.
Actions Taken The Department's information security program has benefited by a significant increase in funding and the recent addition of positions to address identified weaknesses. In response to an OIG request, the Department developed an information security Corrective Action Plan for 2014 with four goals aligned with six major goals. Substantial progress has been made in each area that not only includes improvements but also builds a foundation for additional gains in 2015. For example, during 2014, the Department's Sensitive but Unclassified and Secret general support systems, OpenNet and Classnet, completed assessment and were authorized to operate on March 31 and September 30, 2014, respectively.
Actions Remaining The Department will leverage the investments and organizational changes to implement improvements in the Department's information security program, to include completion of ComplyVision (management software) integration for managing both Plans of Actions and Milestones and Systems Authorizations. Future efforts also include implementation of an enhanced component of ComplyVision to introduce scan results of network components gathered electronically.
4. Financial Management
Challenge Summary Financial management continues to be a significant management challenge for the Department.
Actions Taken The Department received a clean ("unmodified") opinion from the external Independent Auditor on our 2013 Department-wide financial statements (in December 2013), including no reported material weaknesses in internal controls. In 2014, the Department sustained efforts to address and reduce weaknesses in financial reporting, property and equipment, budgetary accounting, unliquidated obligations, and information technology. For example, Bureaus are taking significant efforts to manage unliquidated obligations and we have reduced the extent of manual processes in our preparation of financial statements. The weakness related to retirement fund data was closed for 2014, and the Independent Auditor continues to provide an unmodified or "clean" opinion on our financial statements, clear of any material weaknesses. The Department conducted its assessment of internal controls over financial reporting in accordance with OMB Circular A-123 Appendix A and found them to be operating effectively resulting in an unqualified statement of assurance. We continue to bolster the Department's improper payments and recapture audit program, and in their 2013 annual assessment, the OIG found the Department's improper payments program to be in substantial compliance with IPIA.
Actions Remaining The Department will continue efforts to address weaknesses in financial reporting, property and equipment, budgetary accounting, unliquidated obligations, and information technology.
5. Managing Posts in Conflict Areas
Challenge Summary Managing the civilian presences in Iraq and Afghanistan remains a major challenge for the Department.
Actions Taken The Department agrees that operating in high threat, high risk (HTHR) environments is dangerous, and that the Department must employ a separate check to ensure it is safe for employees to work in these locations. The Vital Presence Validation Process (VP2) was designed to support strategic decision-making regarding the overarching diplomatic presence in HTHR locations. For each HTHR post, we conduct a policy analysis outlining core national interests, risks, risk mitigation options, and resource constraints in order to determine whether it is in the United States' best interest to continue or restart operations. Through a VP2 analysis, we work to ensure the U.S. diplomatic presence at a HTHR post, at a strategic level, has a defined, attainable, and prioritized mission; a clear-eyed assessment of the risks and costs; a commitment of resources to mitigate risks; an explicit acceptance of un-mitigable costs/risks; and an awareness of when to leave and enable diplomacy from a distance.
Actions Remaining The Department has completed VP2 analyses for five HTHR posts. An additional two analyses are in clearance at the highest levels of the Department, and analyses for another eight posts are currently underway. We expect to complete analyses on all 30 HTHR posts by April 2015. This will be an annual process, so VP2 analyses must be conducted on all HTHR posts every year. This process has been codified in the Foreign Affairs Manual.
6. Rightsizing
Challenge Summary During a number of inspections, OIG questioned the Department's rationale for maintaining embassies, consulates, and other diplomatic facilities in certain locations considering the cost-benefits and the security concerns.
Actions Taken The Department's rightsizing personnel work closely with Missions that exceed their own staffing projections over a five-year period of time, accounting for employed staff already in place. While rightsizing personnel constantly advocate for sensible and sustainable staffing growth at overseas missions, Chiefs of Mission hold ultimate responsibility for mission staffing levels.
Actions Remaining The Department plans to begin work with Mission Kabul in late 2014 in expectation of submission of a rightsizing report by early 2015. This is being driven in part by the VP2 process and in part by recognition that there was little possibility of rightsizing Afghanistan in the uncertainty of troop levels and staffing. The Department is committed to producing a rightsizing review promptly.
7. Foreign Assistance Coordination and Oversight
Challenge Summary Coordinating foreign assistance programs among agencies, Department bureaus, and missions is a continuing challenge as is the proper design and oversight of Department-managed assistance programs.
Actions Taken The Department has coordinated a Foreign Assistance Data Review working group through the Enterprise Data Quality Initiative to clarify the needs of key stakeholders, develop a concept of operations for a data environment that meets those needs, and then define system requirements or changes as needed to achieve stated objectives.
Actions Remaining The Foreign Assistance Data Review working group will clarify the needs of key stakeholders. The group will develop a concept of operations for a data environment and develop system requirements or changes as needed to achieve stated objectives.
8. Consular Operations
Challenge Summary Planning and preparing for continued growth in demand for consular services from both groups remains a challenge for the Department.
Actions Taken The protection of U.S. citizens abroad, national security, and the facilitation of legitimate travel to further U.S. economic prosperity remain high priorities. The Department's 1CA leadership and management initiative has empowered consular professionals worldwide to collaborate, share information, and develop solutions to operational challenges. For this reason, 1CA has transitioned from a temporary initiative and has been established as a permanent office. Hundreds of consular professionals have received classroom 1CA training on the Bureau's management framework and tools. In addition, over 3,000 individuals have been introduced to leadership, management, and innovation resources through a variety of mediums.
Actions Remaining The Consular Consolidated Database (CCD) is a critical component of our operating capability and we are modernizing to improve system availability for the long term. The Department will upgrade the CCD to a newer version of the Oracle commercial database software by the second quarter of FY 2015. In conjunction with that software upgrade, we are installing new infrastructure and are building a robust redundancy to ensure the CCD's continuing functionality. This will protect against any issues with the primary system, as well as enable patching and other regular maintenance activities without system downtime.
9. Leadership
Challenge Summary In FY 2014, inspectors identified leadership problems overseas and domestically.
Actions Taken The Department followed-up the 2013 pilot implementation of the Chief of Mission (COM) Survey with a worldwide distribution to 120 posts. Posts with COMs with less than six months of tenure in their positions were not surveyed. The instructions requested all direct hire American employees at post, including those from other agencies, to respond to the anonymous questionnaire. The Department achieved a 52 percent response rate. Aggregate and individual results have been accumulated. The Acting Director General has met with all Regional Bureau Assistant Secretaries to provide summary and individual results. The Department is examining developing a "resource" sheet for COMs who may wish to improve any areas of shortcoming.
Actions Remaining The Department is developing a confidential electronic file for each subject COM, along with an overview letter, results explanation, and a resource sheet. The packages will be provided to each Regional Bureau Assistant Secretary to distribute in the manner they feel is most appropriate.
10. Public Diplomacy
Challenge Summary The biggest challenge for public diplomacy is how to link programming to policy priorities.
Actions Taken The Department issued a comprehensive report in 2014 on Public Diplomacy and Strategic Communications. This report provides the strategic vision that will allow for enhanced links between programming and policy priorities. The Department has also begun a review utilizing a management consulting firm, already under contract within the Department, to provide an expert analysis and overview of the strategic Public Diplomacy agenda.
Actions Remaining The Department will continue to enhance the role of program evaluations. Enhanced pre- and post- program evaluation will ensure resource allocation not only meet strategic needs but also help to measure effectiveness and viability of various programs and initiatives. In addition to an ongoing standardized data collection project, the Department as a whole will continue to update the Strategic Planning tools already being utilized domestically and overseas. These tools focus on strategic planning, program accountability, and resource tracking and reporting.