THE WHITE HOUSE
Office of the Press Secretary
Accompanying Report of the
National Performance Review
Office of the Vice President
Washington, DC
September 1993
The National Performance Review has developed a range of reinvention initiatives related to the department of State and the United States Information Agency--some innovative and some merely common sense. This report proposes that these agencies; expand the authority of chiefs of overseas missions, reduce mission operating costs, provide leadership in the department's information management and improve the collection of receivables.
Recommendations and Actions
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DOS01: Expand the Authority of Chiefs
of Mission Overseas 5
DOS02: Integrate the Foreign Affairs Resource Management Process 11
DOS03: Improve State Department Efforts to Promote U.S. Business Overseas 15
DOS04: Provide Leadership in the Department's Information Management 21
DOS05: Reduce Mission Operating Costs 25
DOS06: Consolidate U.S. Nonmilitary
International Broadcasting 31
DOS07: Relocate the Mexico City Regional Administrative Management Center 35
DOS08: Improve the Collection of Receivables 39
DOS09: Change UN Administrative and
Assessment Procedures 43
Agency Reinvention Activities 49
Summary of Fiscal Impact 53
Appendix
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Accompanying Reports of the
National Performance Review 57
Abbreviations
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AID Agency for International Development
ASG Assistant Secretary General
BIB Board for International Broadcasting
CIPA Contributions for International Peacekeeping Activities
CFMS Central Financial Management System
COM Chief of Mission
DCM Deputy Chief of Mission
DS Bureau of Diplomatic Security
DSO Designated Senior Official
FAAS Foreign Affairs Administrative Support
FCS Foreign Commercial Service
FMFIA Federal Managers' Financial Integrity Act
FMP Bureau of Finance and Management Policy
FSN Foreign Service National
FSO Foreign Service Officer
FTE Full-time Equivalent
GAO General Accounting Office
IBB International Broadcasting Bureau USIA
IFMS Integrated Financial Management System
IO International Organization
MSG Marine Security Guard
NEC National Economic Council
NPR National Performance Review
NSDD National Security Decision Directive
NTDB National Trade Data Bank
OECD Organization for Economic Cooperation and Development
OFMS Overseas Financial Management System
OIG Office of Inspector General
OMB Office of Management and Budget
RAMC Regional Administrative Management Center
SEP Special Embassy Program
TPCC Trade Promotion Coordinating Committee
UN United Nations
USIA United States Information Agency
The Department of State is the senior Cabinet department, created in 1789 by the first Congress. It employs approximately 26,500 people, including Foreign Service personnel, civil servants, and Foreign Service National employees. An estimated 16,000 of its employees are located overseas. The Department of State has primary responsibility for the formulation, implementation, and articulation of the foreign policy of the United States. It operates pursuant to Presidential guidance and congressional legislation, and in coordination with the National Security Council, the National Economic Council, and other executive branch agencies.
Both the United States Information Agency (USIA), which is charged with the conduct of public diplomacy, and the State Department face three principal challenges that make reinvention a timely imperative: the end of the Cold War and the advent of new global concerns and security priorities; the rising cost of conducting foreign affairs at a time when available resources are diminishing; and the increasingly complex inter-agency coordination requirements both in Washington, D.C., and in the field. With continued demands for U.S. involvement in world affairs, lessened resources, and a more complex range of participants in international affairs, it is clear that the stakes have never been higher for the effective integration of people, resources, and policy objectives in the foreign affairs arena.
As a result, the National Performance Review (NPR) has developed a range of initiatives related to the Department of State and the United States Information Agency--some innovative and some merely common sense. These recommendations focus on defining the State Department's mission, improving its performance, and modernizing the management systems and infrastructure that support the conduct of U.S. foreign policy. Implementation of these recommendations will enable the department to address these challenges while most effectively using constrained resources. Similar consideration was given to USIA programs and operations.
This report proposes the adoption of new internal management mechanisms at the State Department that will enable it to face the challenges of the 21st century head-on.
The Secretary of State should be given the clear authority to coordinate and integrate the entire international affairs budget of the United States to ensure its consistency with the President's foreign policy objectives. Similarly, it is recommended that Chiefs of Mission (often the ambassadors) exercise fiscal and management control over all overseas resources within their areas of responsibility--a major divergence from current practice.
Logistical and administrative support associated with managing more than 275 diplomatic posts abroad has become increasingly complex and inefficient, and creates a growing strain on resources. It is imperative that both the State Department and USIA look for efficiencies and economies that result from the elimination of redundant programs, duplicative functions, and excess capacity in the infrastructure that supports the conduct of foreign affairs.
Consolidation of international broadcasting resources should be achieved, and this report also urges more subtle adjustments such as greater concentration on what increasingly appears to be the communications medium of the future--television. It is clear that the United States cannot afford to reach every possible foreign audience, so the nation's message abroad must target those audiences with the greatest return.
Furthermore, the department must reinvent its internal business processes. For example, managers are not currently motivated to spend time and resources collecting debts. If the department injected market dynamics into its daily operations, it would be strongly motivated to collect receivables as a matter of survival.
Through the creation of three reinvention laboratories--Consular Affairs, Business Facilitation, and Diplomatic Security--the State Department has begun to implement reinvention principles in some of its operations. In addition, recommendations generated by the department's three cluster groups--People and Empowerment, Organization Management, and Financial Management--will ensure that the process of change will be continuous. Likewise, USIA has embarked on a number of internal reinvention efforts.
Taken together, the nine issues covered in this report would save more than $100 million over six years. They would also result in savings of approximately 100 full-time equivalent positions.
The seminal shift in foreign affairs in the wake of the Cold War demands reconsideration of how U.S. overseas missions are staffed and managed--a fundamental reassessment of what their role should be. At the height of the Cold War, the United States was compelled to maintain a presence at least equal to that of the Soviet Union. Ironically, the fall of the Soviet empire has led the United States to expand, not contract, its overseas presence. As more countries join the roster of independent nations, the demand for U.S. official presence will continue to grow. The United States must project its presence abroad to protect its national interests and maintain its leadership role in the world community. But what should be the composition of that presence? How should the new emphasis on trade and economics--as opposed to defense--manifest itself in our presence overseas? And are the mechanisms in place to effect the required changes?
Not only must the current composition of U.S. missions overseas be examined, but also the costs associated with operating them, as well as the process by which increasingly scarce U.S. budgetary resources are allocated. While the demand for overseas presence may be increasing, the resources available to meet that demand are decreasing. With international affairs budgets unlikely to rise dramatically in the next several years, it is imperative that the United States maximize the benefit of each dollar spent. The United States must be flexible in its administration of and organization for foreign affairs. This process involves Congress and all executive branch agencies with overseas interests.
Over the past decade, the staffing levels at overseas missions by agencies other than the State Department have grown at an unprecedented rate. The Department of State, which is the principal agency responsible for conducting foreign affairs, typically comprises less than one-third of the total staff at an overseas mission. The remaining two-thirds represent the institutional interests of more than 30 federal agencies. These staffing levels do not include Foreign Service National employees, part-time employees, contractors, or government employees on long-term temporary duty at overseas posts.
This situation has caused a diffusion of responsibility, authority, and operational prerogatives among the diverse organizations with overseas interests, making coordination difficult. In the field, for example, defense and intelligence have their own channels of communication to Washington. In many diplomatic missions, such channels are used without control of the ambassador, and sometimes even without the ambassador's knowledge as to policy recommendations going to Washington via such channels. This is a situation that can easily lead to different departments in Washington receiving divergent recommendations from their officers overseas, recommendations that have been reached without any effective effort at coordination with the ambassador and officers of other agencies and departments.(2) Maintaining the redundant communications facilities that enable these separate channels to Washington is also costly, given physical protection standards.
In addition, fragmented management of program and staff resources from Washington, D.C., is less efficient than if the resources were managed in the field. With control of personnel and fiscal resources from numerous agencies currently centered in Washington, the COM is denied the ability to shift resources to respond to changing requirements and evolving U.S. foreign policy objectives. Furthermore, the centralized management systems of the Department of State and other agencies are more expensive than if decisionmaking and priority setting were done locally or on a regional basis.
Chiefs of Mission are already vested with authority to manage their missions as a result of Section 207 of the Foreign Service Act; the President's letter they receive upon their commissioning; and National Security Decision Directive (NSDD)-38. However, the NSDD's appellate procedures and strong Washington control in many cases make the COM's authority more theoretical than real. According to former Ambassador John W. Tuthill:
The ambassador should be prepared to take on the unpleasant, timeconsuming problem of resisting unnecessary personnel; sending some ineffective personnel home; refusing to waste time answering foolish inquiries from Washington; and, in effect, taking on a large part of the Washington establishment. Without . . . [a] willingness to take on time-consuming and difficult tasks, and hard support from the White House, the job will simply not be done.(3)
The same is true in making difficult tradeoffs between programs and agencies operating in similar regional areas. Ambassadors should have the ability to decide which programs best fulfill U.S. objectives and which are most cost-effective.
Strengthening the COM's role is particularly crucial at a time when the authority of other agencies operating overseas would appear to be growing.(4) In short, the COMs, who derive their authority directly from the President but report through the Secretary of State, must become true corporate leaders of their country teams. There must be a sense of jointness as well as positive but prudent management leadership in the operation of any overseas mission.(5)
The COMs should have direct control of all resources--fiscal, human, and material--within specified broad guidelines, as currently provided in the letters of instruction of the Secretary of State, which are based on U.S. policies and goals.(6) This control would give them the clear authority to make critical management decisions and the ability to fashion an appropriate country team with a staff capable of addressing the most important foreign policy objectives. Chiefs of Mission should determine what department and agency presence is required--and at what levels. It also means that program objectives and resources would fall under the direct control of the COMs. Ambassadors should receive the President's guidance and then mold a team and a program to best achieve those objectives, with regional and global tradeoffs worked out in Washington. These ideas represent significant departures from current practice.
Cooperation among the various executive agencies with conflicting overseas interests can best be realized if the full authority of the President is behind the country team concept. Former Ambassador Tuthill indicated that his well-known Operation Topsy, which was successful in reducing the overall size of U.S. presence in Brazil by 30 percent in 1968, was possible only because it had the full backing of President Johnson.(7) Section 207 of the Foreign Service Act, the President's letter of instructions to Chiefs of Mission and NSDD-38, which currently gives the COMs their authority within a country, is not strong enough in concept or practice to allow COMs to exercise meaningful control. A new document clearly placing the COM in charge of the country team and its resources must be promulgated. The most radical step would be the eventual surrendering of personnel and program dollars to the control of the COMs.
The organizational approach outlined here makes the most sense when it allows the COMs to reduce and realign resources according to specified goals and strategies. For example, in countries where trade and business promotion are the principal U.S. interests, the COM will have the authority to align the mission's resources accordingly, thereby strengthening its ability to achieve critical U.S. foreign policy objectives, such as enhanced economic competitiveness.
The unification of plans, programs, budgets, personnel, operations, and reporting under the Chief of Mission should also produce cost savings. A primary goal should be the eventual operation of the mission and its programs on a decreased budget, achieved through management efficiencies, economies of scale, and the rigorous alignment of resources with articulated U.S. foreign policy objectives.
The President should issue a directive to establish a three-year pilot program at ten overseas missions to expand the authority of Chiefs of Mission over the allocation of all fiscal and staffing resources. The increased COM management and fiscal authority will be exercised within overall policy and legal control of the President and the Department, to ensure that U.S. international policy and legal obligations are met. While the ideas outlined here have tremendous potential for strengthening the ability of the United States to achieve foreign policy objectives and cut costs simultaneously, they are a radical departure from current practice. With such a divergence from standard operating procedures, a pilot test of the process--rather than worldwide implementation--would be prudent. Therefore, the pilot test should be initiated immediately and concluded during the current administration. A special provision in appropriations legislation should be sought, if necessary, to conduct the pilot program.
Recommendations on potential pilot test countries, generated by a distinguished panel of experts, include Egypt, Thailand, the United Kingdom, and Philippines.8 Additional missions recommended by the State Department include Senegal, Argentina, Saudi Arabia, and Austria, where several international organizations and regional operations are found. Selection criteria for the pilot missions should include geography, size, political and economic diversity, and the range of interagency players operating there. The decision on the ten overseas missions for the pilot test should be left to the Secretary of State, in close coordination with Congress and other Cabinet officials.
Specific training will be required to prepare both COMs and Deputy Chiefs of Mission (DCMs), as well as administrative and budget officers, for their enhanced roles under the pilot project. Special consideration must be given to the role of the DCM, because every DCM must be prepared to serve as the chief operating officer of the mission. They must be charged with the day-to-day administration of what amounts to a corporation with several diverse subsidiaries. The DCMs must be skilled in financial and operational management, having received management training or experience at all levels of their careers.
2. Pilot missions should achieve a 20 percent cumulative reduction in overall spending during the span of the project.
Each pilot mission should receive a defined countrywide congressional appropriation, reflecting a 20 percent cumulative reduction in overall spending over the three years of the project. At present, each agency has its own budget within a country. Under this proposal, each agency budget would be reconfigured and arrayed to reflect a unitary country budget. Given administrative and other staff consolidations through improved workload management, the country budget would be reduced by an appropriate amount (20 percent cumulative total over three years is suggested here) from the aggregate country budget. This approach would force the COMs to set program priorities and find efficiencies and economies in operations. The COMs should not be told what programs or areas to cut over the life of the pilot project, but to do the most possible toward achieving key U.S. foreign policy objectives within the resources allocated.
To achieve the reduction, the COM would have the authority and responsibility to prioritize spending; initiate the closure or realignment of elements of the mission (Agency for International Development missions, intelligence facilities, or administrative support services, for example); and reduce or augment key components of his or her staff (such as adding more trade specialists), within the prescribed fiscal and legal guidelines. In addition, communications facilities should be combined into the Diplomatic Telecommunications Service Program Office.
3. Pilot COMs should develop and submit recommendations for reapportioning resources within 120 days.
Within 90 days after issuance of the directive and selection of the pilot countries, each pilot country ambassador should submit recommendations to the Secretary of State for reapportioning the countrywide budget and staffing levels for the following fiscal year. Concurrently, each pilot country ambassador should develop and submit a three-year strategic management plan, based on a thorough zerobased review of all current and programmed assets in-country. This three-year strategic plan should clearly articulate staffing requirements as well as goals, objectives, and corresponding performance measurements for each of the fiscal years covered by the pilot program. An accompanying implementation strategy should highlight the fiscal and staffing requirements for implementation of the plan, noting where these diverge from currently programmed resources. The Secretary of State or his designee would chair a senior-level interagency committee to consider and approve those plans.
4. Pilot COMs should encourage the full participation of members of the country team in the development of resource reapportionment recommendations.
As part of the pilot project, Chiefs of Mission should encourage open exchanges of views on policy and resource matters within appropriate channels.
5. Upon completion of the pilot test, the President's original directive detailing the test should become the basis for a revised NSDD-38.
This new directive would include lessons learned during the pilot test and set goals for savings at other missions. The intent of the revised NSDD-38 would be to strengthen the role of the COMs, give them clear authority to allocate all resources in-country, and promote jointness in the conduct of U.S. foreign policy.
Rigorous implementation of the above-described pilot program will ultimately provide the selected COMs with the authority to align mission resources with defined goals and objectives. More importantly, the proposed program will establish a means to assess growth by federal agencies at overseas missions. The proposed pilot test will provide an important benchmark for assessing how the department, and the U.S. diplomatic community, should operate into the 21st century. Full achievement of these objectives, however, will depend upon congressional cooperation in crossing appropriations lines.
There will undoubtedly be widespread opposition to granting COMs such wide authority and responsibility, even under the guidance of the Secretary of State. Additionally, there may be bureaucratic resistance to waiving established rules, regulations, and procedures to implement the pilot program. However, granting the COMs the authority and responsibility both to allocate the fiscal resources of their missions toward established objectives--which lies at the heart of effective Mission Program Planning--and to align staffing levels to accomplish these goals will:
The pilot test should achieve a 20 percent cumulative reduction in total costs in the selected countries by fiscal year 1997. These will have to be calculated on a country-by-country basis once the five pilot missions have been designated.
The foreign affairs community is seeking to redefine its mission and priorities in light of the end of the Cold War. This process of redefinition raises several important questions. What should be the Department of State's role? How should it relate to other players in the foreign affairs community? A rapidly changing world and a climate of fiscal constraints requires that the department provide strong interagency leadership to implement an integrated foreign policy program and resource management process for all international affairs programs as well as for its own operations. New planning and management structures are needed for this integration to occur, thereby allowing the U.S. government to address new foreign policy requirements and meet future challenges.
Interagency Coordination. To maximize the use of international affairs resources, a strategic management process should directly link foreign affairs priorities to resource allocation. The current interagency process falls short in that regard. In theory, the Secretary of State is responsible for coordinating the final presentation of the International Affairs Budget (Function 150), the source of funding for more than a dozen federal agencies. In fiscal year 1993, the Function 150 account amounted to $21.6 billion in budget authority. In practice, however, the Department of State has limited authority over other cabinet agencies. The budget coordination problem is further compounded by the fact that more and more resources traditionally classified as part of the domestic or defense budgets (non-150 accounts) are being devoted to international programs. These resources include the international budgets of the Drug Enforcement Agency, the Environmental Protection Agency, the Department of Defense, and the Department of Commerce, among others.(1) These resources are beyond the authority of the Department of State.
What is needed now is a comprehensive, integrated strategic resource management process for agencies with foreign affairs activities--a process that flows directly from the policy priorities and objectives articulated by the President. This process should result in better integration at the country level as well. To date, there has never been an effective institutionalized interagency process.
State Department Coordination. Likewise, within the Department of State, integrated policy and resource management has never been fully institutionalized. The department's current program planning system, initiated in 1990, has been developed as a management tool for clarifying the department's goals and objectives and for matching priorities with resources. Although this year's mission and bureau program plans will be an important element in formulating the fiscal year 1994 financial plan and the fiscal year 1995 budget request decisions, program planning is not yet as fully integrated with all resource management (budget, financial plans, and personnel allocations) as it should be.
The State Department today is a conglomeration of programs, systems, and ways of doing business held together by an extremely broad overall strategy. There is an uneven consensus, both inside and outside the foreign affairs community, regarding who the customer is, or should be. Managing from crisis to crisis has been the standard operating procedure. A new strategic management system that integrates the department's policy, programs, and resources and that establishes execution oversight and accountability for results is needed to address the full spectrum of the department's operations.
When resources were more plentiful relative to demand, the department's leadership could afford to focus on urgent foreign policy developments and pay relatively little attention to resource management. The Under Secretary for Management was the senior policymaker relegated with the responsibility for integrating departmental operations and resource allocation decisions.
Over the next few years, however, the fiscal environment will remain constrained even as new and costly demands continue to emerge. The current policy and resource management process is simply not adequate for addressing the challenges ahead. Both better federal government coordination of international programs under the State Department's leadership and a more integrated process internal to the State Department are needed.
The interagency foreign policy resource management process should be reformed to allow for more effective integration across agency lines, including the formulation of tradeoffs and the articulation of priorities.2 As a first step, the Secretary, in consultation with the National Security Council and the Office of Management and Budget (OMB), and in coordination with his counterparts in the other Function 150-funded agencies, should charter an effort to reform the foreign policy resource management process.
2. The President should issue a directive to strengthen the authority of the Secretary of State in the Function 150 interagency resource management process.
The President should issue a directive to strengthen and clarify the authority of the Secretary of State to integrate foreign policy management and international affairs spending. The Secretary should actively exercise his expanded authority through the dissemination of annual planning guidance within the department and to other Function 150 agencies at the same time OMB issues its fiscal guidance. The Secretary should work with the National Security Council to promote the periodic review and identification of clear overriding priorities, addressing both policy and regional/country emphasis within a worldwide context. These reviews will help form the basis for the planning guidance, which should also address funding priorities.
The Function 150-funded agencies should send their prioritized submissions to the Department of State in a common format that would demonstrate how they intend to allocate their Function 150 resources against the foreign policy objectives articulated by the President. This process should serve to identify funding gaps, areas of duplication, and potential opportunities for increased cooperation across agency lines. It should also address likely impacts of reduced funding.
The Secretary's final submission to OMB should represent an authoritative statement on the Function 150 foreign affairs budget priorities. While most interagency disagreements should be settled in the field or at the major program level in Washington, some will require the active involvement of more senior officials. OMB would then recommend overall funding levels to the President, consistent with the foreign policy priorities set forth by the Secretary.
3. The Secretary of State should extend the new integrated process to the field.
To ensure policy and resource coordination at the country level and more effective execution oversight, Chiefs of Mission should be required to use their Mission Program Planning submissions as a vehicle for achieving this integration. This practice will provide the Secretary of State and other agency heads with a single snapshot of the total resource expenditures in a given country. It will also serve as a means for assessing how well the sum of individual programs addresses overall U.S. foreign policy objectives.
4. The Secretary of State should play a role in the resource allocation process for non-Function 150 international expenditures.
The Secretary of State, in consultation with the National Security Council, the National Economic Council, and the Office of Management and Budget, should also make recommendations for integrating the international affairs components of the non-Function 150 budgets to ensure their consistency with overall foreign policy objectives.(3)
5. The Department of State should develop a more strategic approach to its internal management.
The Department of State excels at crisis management. However, it must give equal consideration to a strategic, mission-driven approach to managing its own programs, operations, and resources. Steps taken to implement such an integrated strategic management process within the department should include the following:
Integrating the Department of State's policy, program, and resource management processes will ensure that its increasingly limited budget resources are allocated in a manner consistent with the President's foreign policy objectives. Similarly, prioritizing international activities and programs across federal agencies will enable policymakers at all levels--at headquarters and in the field--to make rational decisions on how to reshape shrinking international affairs spending to reflect changing U.S priorities.
The primary fiscal impact would be the more effective use of funds expended to meet U.S. foreign policy objectives. The specific savings cannot be estimated at this time.
The State Department is one of numerous government agencies involved in promoting U.S. exports. The Department of Commerce, the U.S. Trade Representative, the Export-Import Bank, the Department of Agriculture, and the Department of Defense are among several agencies that participate in some aspect of U.S. business promotion. In recent years, Congress has authorized increased funding for this function in 10 different federal agencies. However, the State Department has no line item in its budget for export promotion, and currently receives no additional funding, even though global competitiveness is a foreign policy priority.
Coordination among these agencies is good in many overseas posts where ambassadors have forged a cooperative effort to assist U.S. businesses. However, in Washington, agencies tend to work independently, thereby increasing the risk of duplicative government efforts in some areas and a lack of services in other areas. This fragmented approach to promotional activities makes it very difficult for businesses to determine which government agency is best suited to meet their overseas business development needs and complicates U.S. efforts to represent its economic interests abroad.(1)
Policy Coordination. Not only is the implementation of promotion programs fragmented, but the policymaking structure is similarly uncoordinated. This lack of coordination is being addressed, however, by the newly formed Trade Promotion Coordinating Committee (TPCC)-- which represents 19 federal agencies including the State Department. The Committee will submit a proposed federal trade promotion strategy to Congress by September 30, 1993.(2) Regardless of the specific provisions of the TPCC strategy, it is clear that each of the affected federal agencies will have to improve its day-to-day coordination and refine the scope of its activities in order to meet the TPCC objectives. Furthermore, the finite resources available to these agencies make it imperative that they work together to avoid duplication of effort and to ensure that their respective export promotion services are value-added and targeted to meet the needs of the private sector. The Department of Commerce should be the lead agency in export promotion policy.
The State Department's Role. Before 1980, the Department of State had primary responsibility for the implementation of nonagricultural export promotion programs and activities overseas. In 1979, Congress required the President to reorganize executive branch trade functions to improve the effectiveness of federal business promotion programs. In response, the President implemented a plan that transferred the State Department's commercial positions (roughly 162 officers in 65 countries) to the Department of Commerce.(3)
To facilitate a smooth transition, the Departments of Commerce and State negotiated a memorandum of understanding that created a framework for operating a Foreign Commercial Service (FCS) at Commerce after the reorganization. Among other things, the memorandum stipulated that the State Department's economic officers would take the lead in business promotion activities at non-strategic posts (where Commerce FCS officers were not present), but that the Department of Commerce would administer their workload together with that of its own FCS officers.(4) This arrangement is still in effect. Today, the State Department's economic officers take the lead in commercial affairs in over 100 countries, while the Department of Commerce FCS officers take the lead on commercial issues in roughly 130 posts in 69 countries.
The emphasis of U.S. foreign policy is shifting from defense to economic interests. In an effort to improve the State Department's overseas network for export promotion purposes, Congress included language in the Foreign Affairs Authorization Act of 1986 and 1987 requiring increased participation of U.S. embassies in the promotion of U.S. business interests.(5)
The State Department has always provided some useful services to U.S. businesses--services that are not duplicated by other agencies or even private sector organizations. For example, many U.S. ambassadors and State Department officers have played a pivotal role in helping U.S. businesses establish contacts with foreign governments and negotiate the removal of barriers to U.S. foreign trade. In other cases, the department's relationships with foreign governments, international associations, and many large U.S. and foreign businesses overseas have helped U.S. companies out of difficult situations. It should be noted, however, that although the level of commitment on the part of ambassadors and other agencies represented at the mission has improved recently, it has varied from year to year and post to post.
The State Department shares political information, in verbal or written form, with businesses upon request. This information, which has been declassified from State Department reports, can be helpful to businesses because it provides information on issues such as political stability and intergovernmental relations within countries where U.S. businesses are seeking to operate.
The Department of State also provides a variety of economic and commercial reports (such as the "Economic Trends" reports) to Congress and the business community. Much of this information is included in the National Trade Data Bank (NTDB), the automated information retrieval system managed by the Department of Commerce. Though the NTDB is inexpensive to operate and its products are widely available nationwide, many U.S. companies are unaware of it, or find that the information is not timely or only partially helpful. Since the inception of the NTDB a few years ago, the Department of State has been engaged in efforts to increase the amount of its reporting placed in the NTDB. Critics have noted, however, that State's economic reporting must first be refocused to increase its usefulness to the business community, and then more of it should be made available to the public.
Part of the problem is that economic officers often lack the appropriate understanding of business issues or trade practices to provide the most relevant information for trade promotion. Another part of the problem is priorities. State economic and political sections devote most of their time to reporting on bilateral and multilateral problems and negotiations, as well as responding to the requests for information and action from numerous government agencies. This reduces the amount of time spent on reporting business-related issues.
To improve this situation, the State Department must expand the focus of its economic reporting to meet the needs of the business community, train reporting officers to be more effective in responding to these needs, and work with Commerce and other agencies to improve the private sector's awareness of and accessibility to commercial related reporting.
Additionally, the State Department's own export promotion activities have been hampered by a lack of coordination and communication among key bureaus in the department. The extent of this problem has been identified by the department itself and proposals have been made to improve communications and coordination within bureaus, among key bureaus, and at the interagency level. The department has identified key areas of knowledge such as commercial skills, and is revamping training programs under Secretary Christopher's Diplomacy for Global Competitiveness initiative.(6) The Secretary has given business promotion high priority and instructed all ambassadors to assume personal leadership of a concerted and integrated effort to involve all agencies represented in the embassies. The Secretary has also created the position of Coordinator for Business Affairs to marshall the department's resources in support of U.S. business.
As a part of an internal reinvention effort, the department is drawing up plans to increase the involvement of all posts in business promotion. This increased involvement will be supported by a Business Facilitation Laboratory. It will, among other things, provide for the creation of a Business Facilitation Incentive Fund Program. The department proposes to set aside funding for this program to encourage and accelerate business facilitation activities at all posts and geographic bureaus.
The State Department should improve coordination at all levels with the Department of Commerce and other agencies on the Trade Promotion Coordinating Committee to share trade information and implement an export promotion strategy. A state-of-the-art interagency electronic mail capability would improve communications.
2. The State Department should define the scope of its business facilitation activities.
The department should provide a value-added effort to the promotional activities of the Department of Commerce and other agencies. The State Department should maintain some current business promotion activities while enhancing others. These should include:
Such rotations could be part of the State Department's new training program or its tours of duty for senior officers.While an agreement exists between the Departments of Commerce and State to set provisions for the exchange of economic officers, few officers take advantage of this opportunity. In fact, only one economic officer has been on detail to the Commerce Department in the last five years.
While certain obstacles to rotations do exist, such as workload arrangements and the ability of the departments to arrange rotations related to the officers' assignments, the President's increased emphasis on business promotion activities should spur the State Department to explore new and creative ways to increase rotational opportunities. This experience would dramatically enhance officers' understanding of Commerce's role in export promotion.
4. The State Department should improve coordination between various internal bureaus to facilitate the exchange of vital trade information.
Communication should occur at all levels of the organization to facilitate the exchange of trade information and raise the awareness of all bureaus to business-related activities within the agency. Commercial coordinators in each of the bureaus would be the focus for this effort.
5. The State Department should provide greater authority and resources to ambassadors to improve the promotion of U.S. business interests.
The increased authority should be given to ambassadors at posts where the United States has strategic economic interests. Among their duties should be the establishment of standards for measuring progress in business promotion efforts and a strategy for conducting these activities.
The above recommendations will facilitate increased cooperation between the State Department and other federal agencies involved in trade promotion activities. Their implementation will also improve the accuracy, quality, and timeliness of each agency's products and services provided to the business community. Additionally, it will serve to clarify the roles and responsibilities of the almost 20 agencies involved in such activities.
Significant efficiencies could be achieved in the form of improved service to the business sector. While the above proposals can reasonably be expected to produce some savings, there will be costs associated with additional training for State Department personnel and new equipment. Neither the savings nor the costs can be specifically estimated at this time.
The State Department's information systems are currently in a state of crisis. The Office of Management and Budget (OMB) has identified the department's information management systems as a high-risk area, noting that "worldwide systems could suffer from significant downtime and even failure."(1) According to a State Department official, the department has determined that a total of 63 posts around the world are operating on obsolete hardware. The maintenance costs for this old, closed-system hardware are increasing, and new mainframes must be procured to meet minimum backup requirements. Many bureaus within the department operate on hardware and software that is incompatible with that used in other bureaus. Often, the hardware and software do not meet day-to-day needs.
The department is now planning for a migration from the existing closed system to an open system. The first step in this migration plan is to set standards for the department's administrative, financial management, and consular affairs functions. However, the fragmented budgeting and decision making processes of the department, addressed elsewhere in this report, are hampering progress toward a new system. OMB has expressed concern over the department's piecemeal approach to its information systems problem and has questioned the department's ability to implement the migration plans effectively.(2)
The modernization process at the State Department is complicated by the following three major factors:
Lack of Authority. Although the State Department has an information management office, this office lacks the authority and stature to set departmentwide policy and standards. This problem is not unusual. Typically, information management officers in various organizations lack the corporate standing to be effective partners with other highlevel executives in setting information management policies and managing resources. The State Department is no exception. Without the backing of the most senior-level officials in the department, the State Department's Designated Senior Official (DSO) for information management will continue to be unable to set departmentwide policy.
Stovepipe Systems. The second major problem faced by the State Department is the unique computer systems purchased in the late 1970s through the mid-1980s. The department invested approximately $500 million in proprietary hardware and software.(3) It slowly acquired various generations of minicomputers, workstations, and personal computers, which are now deployed worldwide. Each systems development effort focused on specific operational requirements, resulting in stovepipe systems that neither meet overall department needs nor allow communication across organizations. Sharing information within the department is difficult and virtually impossible with external systems. Re-entry of data into multiple systems is a common practice.
This situation has led to the emergence of separate support teams within the department's organizational structure and at overseas posts. As the aging base of computer equipment has required more maintenance, technical support responsibilities have been assumed by individual bureaus. Consequently, the Information Management Office has been further isolated from effective policy development, planning, budgeting, and day-to-day management.
Program and hardware restrictions also hamper the efficient use and presentation of information. This is exemplified by the case of the department's financial management system, which has been targeted for replacement. The State Department is unable to provide useful and detailed budget data on many of its operational programs due to the inability to run certain types of programs on the current hardware. This problem has been identified as one of numerous systemic problems, exposing the department to the risk of fraud, waste, and abuse.(4)
Reorganization Effort. Finally, the information management processes are affected by the State Department's current reorganization initiative. Specifically, before new systems can be installed, the department must first identify its information management requirements and priorities. Independent of how the department finally reorganizes, the critical data groups--i.e., the categories of data to be collected and stored--must be identified. Only then can the department determine the architecture of its system.
Each of the above factors must be considered if the department is to remove barriers to effective, efficient, and customer-oriented information management. It is important that the department move rapidly to open-systems hardware in order to prevent systems failure and achieve lower maintenance costs (which the State Department estimates will total $33.4 million from 1993 to 1996, if there is no improvement in the current systems).(5) However, this goal must be balanced against the departmentwide need for a long-term, systematic approach to information management.
Successful migrations to better information systems have frequently been implemented in the private sector through a two-phase process. In the first phase, management establishes control over the information management infrastructure by determining how information is collected and managed. Strategic planning is a critical part of this first phase. When analyzing infrastructure requirements, the future demands for information services must be identified and studied. Implementation procedures and processes then may be clearly defined based on these requirements and measurable objectives. Another important step driving this phase is the immediate realignment of resources to construct a more centrally managed information management infrastructure.
The second phase focuses on improving the overall effectiveness and efficiency of the new infrastructure. A central office sets information management policy for the entire organization while the daily operations of each division are conducted by local operators. This is the best approach to systems migration, and the State Department should pursue this general strategy. It is important to note that success depends heavily on the order in which the above steps are implemented.
The President's fiscal year 1994 budget request to Congress included a program increase of $10 million for the department's computer migration effort and $4 million for financial systems redesign. The department is currently refining a cost estimate and implementation plan, which could show a need for an additional $155 million for this project. In order for the department to modernize its mainframes, and its domestic and overseas computer networks and to provide extensive training to its work force on the newer systems, the Department of State may have to invest as much $500 million over the next 7 to 10 years.
The individual selected to fill this position would be appointed as the DSO for information management and report directly to the Under Secretary for Management. The DSO's sole responsibility would be to develop and oversee the implementation of a coherent departmentwide information management policy. Elevating these issues to the Under Secretary level should give the DSO the stature, visibility, and influence to integrate policy and standards across geographic and functional bureaus. In addition to setting policy, the DSO should lead migration planning and execution. The DSO's office would be responsible for promoting departmental and interagency coordination on information management issues; responsibility for day-to-day maintenance and operations would remain with the information technology officers in the individual bureaus.
2. The State Department should use private and/or public sector expertise in developing a departmentwide strategic plan for migrating to open systems.
These experts would be charged with assisting the department to identify the information and programs to be converted before migrating to new systems. The strategic plan should describe organizational impacts, schedules for training all affected personnel, and investment costs and savings. The plan should also create a process for the continued modernization of information systems in the future.
By implementing the above approach, the department will address the turf wars that have prevented significant progress in the past. The migration effort itself, which is unavoidable, will involve considerable cost, and may cause significant job dislocation. Without a single, high-level manager empowered to coordinate migration policy and to oversee and control the process, chances for success are limited. Furthermore, the effective management of information resources is threatened.
The above recommendations pertain only to streamlining and improving information management. They do not address the acquisition of a new system. The costs associated with creating a new DSO office are minimal and can be met with current resources. The increased longterm efficiencies to be realized from minimized redundancy in the system, improved coordination, and easier exchange of information will not only produce significant long-term savings, but improve the department's capacity to carry out its mission. The specific fiscal impact cannot be estimated at this time.
A first step toward these new models is to bring closer together some basic logistical functions of overseas posts--namely, the provision of administrative support services. Most of these services are used by U.S. and foreign nationals working at the posts, but missions also provide some limited services for host countries and travellers. Many of the administrative support services used by mission employees should be reexamined for consolidation or possible elimination. The goal should be to enable the posts to move toward a new, leaner model of representation. In addition, missions should reexamine the need for certain services they provide to host country nationals, particularly library and research services.
Administrative Support Services. Administrative support services include storage, transportation, housing, security, and the fulfillment of many other similar needs for those working at overseas posts. The Department of State provides many of these services both for its own employees and for employees of other agencies working at the post. These agencies then reimburse the department for the administrative support services received through the Foreign Affairs Administrative Support (FAAS) system, which bills other agencies for their share of the total costs.
Over the years, numerous agencies have complained that the State Department's provision of support services has been inadequate, inefficient, and/or inequitable to other agencies. They cite inefficiencies in the department's FAAS system and claim they do not receive fair value for their contributions. Although most agencies (especially those with small overseas representation) continue to acquire services from the State Department, some others--notably the Agency for International Development (AID)--routinely acquire their own services separately.
The result, of course, is duplication of services. According to a 1988 General Accounting Office (GAO) report, for example, four of seven agencies visited by GAO representatives in Bangkok duplicated State Department services. All seven operated their own motor pools.(2) Recently, officials at the Cairo embassy told the State Department's Office of Inspector General that the embassy operated inadequate warehousing facilities. However, instead of resolving the warehousing problem for the embassy as a whole, the State Department and AID were obtaining new facilities separately.(3) Similar examples of service duplication abound at diplomatic posts worldwide.
Some consolidation of service provision could be achieved in order to reduce support expenditures. While maintaining customer options and avoiding an overseas monopoly, agencies should decide on a post-bypost basis how to administer services most efficiently. They should then implement standardized support service provision. This practice could reduce paperwork and staffing, eliminate excess capacity, and save money. Customers should find that the services are more uniform and equitable across agencies, and--if they are properly administered--there should be no reduction in service quality.
Security Provision. One service currently provided by the posts that deserves specific consideration is security. Two areas of security are particularly in need of reform: the Marine Security Guard (MSG) program and current local guard contracting requirements. According to the State Department's Bureau of Diplomatic Security, 136 U.S. posts (about 51 percent of the total) have Marine detachments of at least six and as many as 30 MSGs. Under the terms of the joint State Department-U.S. Marine Corps Memorandum of Agreement on this issue, these Marines provide information security for all levels of classified material and equipment and certain physical security services for the posts.(4) About 1,225 Marines now serve in these MSG detachments worldwide at a cost of about $27 million to the State Department.(5)
State Department policy requires 24-hour cleared physical presence at posts where Top Secret (TS) material is stored. But some posts house only small numbers of TS documents, which could be easily transferred to other missions. Furthermore, the physical security provided by the MSGs can sometimes be provided at lower cost by upgrading the physical security system itself or by investigating other alternatives where appropriate. Deactivating MSG detachments, where possible, would save money and free up these guards for posts where they are more urgently needed.
In a 1992 study, the Bureau of Diplomatic Security identified 11 posts whose MSG detachments could be deactivated over the next several years. One post on this list (Casablanca) has already deactivated its detachment. Another post on the list (Alexandria) is scheduled for closure in September 1993. The bureau faces stiff resistance from some ambassadors and officials from other federal agencies who want to keep their posts' Marine detachments. Therefore, deactivating the remaining nine detachments--and setting up regular review procedures to validate the need for such detachments at all posts--requires a specific mandate from the Secretary of State. It will also require recognition that deactivating these detachments will necessitate some spending on security enhancements to make up for the MSGs.
The second security issue is related to Congress' local guard contracting requirements. The Foreign Relations Authorization Act requires the Secretary of State to give preference to U.S. contractors in fulfilling local security guard needs overseas.(6) This preference increases security costs because U.S. firms normally propose higher prices due to higher overhead costs than the local firms. Proposed language in the State Department's 1994-95 authorization would institute an even greater preference for U.S. contractors by altering the point system on which proposals are evaluated and contracts are awarded. Allowing posts to contract based solely on price and ability to meet security standards would clearly save money.
Information Services. In addition to providing services to U.S. personnel overseas, these posts provide certain services to host countries. Library and research services are one prominent example. Taxpayers finance the operating costs for in-country libraries and reference centers, which are managed by the overseas arm of the U.S. Information Agency (USIA). According to USIA, these libraries support U.S. foreign policy interests by providing host country government officials, scholars, and opinion makers with information about the United States; information to which, USIA contends, these countries would otherwise not have access.
These arguments make sense in developing nations, in the Newly Independent States, and in certain other areas where information about the United States may be limited and the need to promote U.S. interests is clear. In these places, there is a need for such libraries. In other countries the need is much less apparent. Furthermore, many libraries are actually closed to the general public. Few people are actually allowed to walk into these libraries, and most business is conducted by phone or mail.(7)
Although USIA has cut $2 million from library operations in its fiscal year 1994 budget, further cost-saving measures in this regard can be applied while continuing to ensure access to information. Inquiries by phone or mail can be answered from the United States.
The collections housed in the libraries--mostly reference books, works of American scholarship, and current periodicals--can be transferred, at host country expense, to host country libraries and other institutions (including the many major research universities found in these countries). Finally, with data increasingly available over electronic highways, information not transferred to host country institutions can be acquired directly from the United States.
Standards and Accountability. Consolidation of administrative and service support functions will require that the service provider meet high standards of quality and customer service. Clear performance standards for the goods and services delivered must be set and the supplier must be held accountable. In the past, a lack of customer satisfaction drove many agencies to develop their own channels for support. Consolidated services will work only when recipients of those services are convinced they are receiving the best possible service.
A standard set of agency requirements and regulations governing all personnel receiving support services overseas should be developed. The end result should be standardized requirements for all support functions (e.g., personnel, budget and fiscal matters, procurement, communications, and data processing); this will make service consolidation a more feasible alternative. Posts should consolidate those functions where a centralized operation can best meet customer requirements, given fiscal constraints. Budgeting for support costs should be unified to the maximum extent possible. Since individual agencies and congressional committees will still want to monitor support costs by agency, a reporting function similar to the present FAAS accounting system should be maintained, including submission of an annual report to Congress and all participating agencies breaking down the costs by agency.
2. The State Department should review all Marine Security Guard detachments and deactivate them where possible.
Wherever Marine Guards are not truly needed, they should be returned to the Marine Corps or reassigned to posts that do require their services. The Department of State should begin by deactivating the remaining nine security detachments. Priority should be given to those detachments identified in the 1992 Bureau of Diplomatic Security report. They are as follows: Bangui, Bujumbura, Luxembourg, Nouakchott, Ouagadougou, Port Louis, Reykjavik, the Vatican, and Wellington.
3. Legislation should be enacted to amend the Foreign Relations Authorization Act to reduce costs of local security provision.
Posts should base contract awards for overseas guard services on cost and ability to meet security standards. Technical elements and cost should be more equitably weighted in bid evaluation.
4. USIA should take steps to close selected USIA library and reference centers.
In countries that have the capacity to store the library collections in their own facilities, and where other U.S. interests are not compromised, the United States should not fund separate reference centers. The Director of USIA should designate the facilities for closure.
5. The State Department should explore alternative models of representation abroad.
The State Department should explore alternatives, including regional embassies, multiple accreditation, and the Special Embassy Program (SEP), as a means of further reducing the cost of operations abroad. Consolidating support services and streamlinig overseas operations generally are the first steps in helping make these ideas feasible. Once agencies have brought together their administrative support, shifting to regional embassies or expanding the SEP program may become easier.
Standardizing procedural requirements across the different agencies functioning abroad would allow for increased consolidation--in data processing, communications, budget and fiscal services, leasing office and housing space, and other support services.
Reassigning Marine Security Guards from posts where they are not needed would require minimal effort and free up resources for other areas (such as the former Soviet Union, the Balkans, and others) where their presence is essential. Deactivating Marine detachments would, however, require that posts upgrade their physical security (including alarms and vaults) to compensate for the lost protection services of the guards; the posts would then be granted so called lock-and-leave status.
Refining security contract requirements should allow posts to acquire security directly at a lower cost. This, of course, should not be done by sacrificing post security.
Finally, closing libraries and reference centers would save money without making U.S. government and cultural materials totally inaccessible. Those materials would be transferred to local libraries, and the users of the USIA libraries could be directed either to the proper host country institutions or given instructions for telephone retrieval.
Eventually, taking these steps could move the U.S. foreign policy community closer to new models for U.S. foreign policy operations overseas. Closing some posts and consolidating others should be considered, although obviously resources alone should not determine where posts are located. At a basic level, the United States needs to articulate the mission to be performed by its posts abroad--and how these objectives can be achieved most efficiently. Standardizing all agencies' requirements for their overseas employees, consolidating support services, and eliminating unnecessary services are all steps that will result in more effective overseas operations and will make new models possible in the future.
The consolidation of support services and the other efficiency measures recommended above are closely tied to the Chief of Mission's (COM's) authority. As detailed in an earlier section of this report, the authority of the COM should be strengthened so that the country team can be structured in the most effective and efficient manner. If the COM is given the fiscal and management authority and responsibility to allocate all assets in a given country, consolidation of support services will be a much easier process.
The shortcomings of the FAAS system make an accurate estimate of the savings associated with consolidating support services impossible. However, a great deal could be saved by consolidation. Specific savings from deactivating the nine remaining MSG detachments identified by the Bureau of Diplomatic Security can be gauged. A net savings of $6.3 million is predicted over a five-year period, and those savings would continue in later years. The savings connected with security contract changes must be calculated on a contract-bycontract basis. Although significant savings are probable, specific amounts are not claimed below. The savings from closing USIA libraries and reference centers includes both dollars and full-time equivalent positions. After some initial closing costs, annual savings are estimated at $9.1 million annually. Combined savings, shown by year and agency, are as follows:
Budget Authority (BA) and Outlays (Dollars in Millions)
Fiscal Year
1994 1995 1996 1997 1998 1999 Tot.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA
(State) -0.6 -0.9 -1.2 -1.2 -1.2 -1.2 -6.3
Outlays
(State) -0.6 -0.9 -1.2 -1.2 -1.2 -1.2 -6.3
Change
in FTEs
(State) 0 0 0 0 0 0 0
BA
(USIA) -6.0 -9.1 -9.1 -9.1 -9.1 -9.1 -51.5
Outlays
(USIA) -5.0 -8.5 -9.1 -9.1 -9.1 -9.1 -49.9
Change
in
FTEs
(USIA) -100 -100 -100 -100 -100 -100 -100
Krys, Assistant Secretary for Diplomatic Security, and H.C. Stackpole III, Lieutenant General, USMC, Deputy Chief of Staff for Plans, Policies, and Operations; November 25, 1991, pp. 8-10.
5. According to Special Agent George W. Goodrich, Chief of the MSG Branch at the Bureau of Diplomatic Security, each Marine guard costs the Department of State an average of $22,000 per year in travel costs, clothing allowances, and post expenditures, which include lease costs, Basic Allowance for Subsistence, Cost of Living Allowance, and other expenses. (Under the terms of the joint State Department-U.S. Marine Corps Memorandum of Agreement on this issue, the Corps finances the other costs, including salaries and training.) The $27 million figure comes from multiplying the total number of MSGs (1,225) by $22,000.
6. Section 136(e), Public Law 101-256.
7. U.S. Congress, House, Representative Fortney Pete Stark speaking for an amendment to USIA Salaries and Expenses authorization, 102nd Cong., 2nd sess., July 30, 1992, Congressional Record, p. H7034. Rep. Stark reported, for example, that in fiscal year 1991, libraries in Canada drew only 568 walk-in visitors.
Accompanying Report of the
National Performance Review
Office of the Vice President
Washington, DC
September 1993
Government-funded international broadcasting has been the subject of recent intense public debate. While many believe that international broadcasting is one of the strongest and most important instruments of American foreign policy, others criticize it as a Cold War relic that should be dramatically downscaled or even eliminated.(1)
U.S. nonmilitary overseas broadcasting is currently provided by several entities. Among the most prominent are the television and radio services of the United States Information Agency's (USIA's) Bureau of Broadcasting, which accounts for about a third of USIA's entire $1.2 billion budget. The bureau's key components include the Worldnet Television and Film Service, the Voice of America's worldwide radio programming, and the television and radio broadcasting services to Cuba (Radio/TV Marti). The administration's request for USIA's fiscal year 1994 budget also included funds for the creation of a new Asian Democracy Radio service, designed to provide surrogate broadcasting to China and other closed countries in Asia.
USIA has not been the only player in this broadcasting arena. There are also two major surrogate radio broadcasting entities--Radio Free Europe and Radio Liberty--which have been overseen by the congressionally mandated independent Board for International Broadcasting. Headquartered in Munich, Germany, Radio Free Europe and Radio Liberty operate with a budget of approximately $220 million a year.
Post-Cold War foreign policy alone dictates a fundamental reassessment of the need to maintain separate broadcasting services. Resource constraints further underscore the importance of this reassessment. Significant savings are to be realized from the consolidation of these broadcast services within USIA. The savings would be generated primarily from reducing the amount of international broadcast programming; eliminating duplicative administrative functions and their associated costs; and optimizing the use of global technical assets, including facilities, transmitters, and frequencies. President Clinton has already approved such a consolidation and reorganization of U.S. international broadcasting, but this approach has not yet been enacted into law as of this date.
Within the framework of this consolidation, USIA should continue to assess the allocation of its broadcasting resources in light of the revolutionary changes in the international security arena and the effect that television has had on international affairs worldwide. The importance of the following trends in the current communications environment should be recognized:
Despite these dramatic changes in the international communications environment, U.S. government non-military broadcasters continue to spend $18 on radio for every dollar they spend on television.(4)
Congress should enact the Administration's consolidation plan. The Director of USIA, in conjunction with the Chairman of the Board for International Broadcasting (BIB), should aggressively implement the plan to consolidate U.S. international broadcasting under USIA. Under the plan, Radio Free Europe and Radio Liberty will be administered by USIA's new International Broadcasting Bureau (IBB). In addition, the BIB will be abolished and replaced by an independent bipartisan Broadcasting Board of Governors within USIA. This board will provide guidance and oversight to USIA's IBB, and be responsible for "assessing the quality, effectiveness, and professional integrity of U.S. surrogate broadcasting."(5)
2. USIA and the Broadcasting Board of Governors should continue to identify other broadcasting consolidation or elimination opportunities.
The director of USIA and the new Broadcasting Board of Governors should continuously assess the requirements for surrogate broadcasting and identify other consolidation opportunities, including the potential addition or deletion of language services. Working with Congress, they should establish language priorities based on U.S. interests, available resources, media research, and alternative technologies.(6) This is particularly important since past efforts to reduce the Voice of America's language services in order to maintain quality within resource constraints have been only minimally successful.
Furthermore, the director and the board should continue to assess, on a regional basis, the media mix that will be most effective in reaching its audience, with a particular emphasis on increasing television usage. They should also increase the bureau's media and audience research activities. Programming and signal delivery decisions should be thoroughly grounded in this type of research.
3. USIA should reallocate broadcasting resources from radio to television.
The International Broadcasting Bureau should continue--and accelerate--its efforts to reprogram resources to those technologies and methods of broadcasting that deliver maximum impact. The bureau director should work with the Broadcasting Board of Governors to develop a strategic plan for the use of U.S. nonmilitary international broadcasting resources. The plan should include a mission and vision for the bureau and lay out a roadmap for international broadcasting in the 21st century. It should take into account current and anticipated technological trends and advances, including the increasing global proliferation of direct satellite capabilities and the potential obsolescence of shortwave radio in all but the remotest locations. The plan must address the allocation of resources between radio and television and should emphasize those areas in which USIA has a qualitative edge over commercially available programming. The integration of the agency's radio and television services, including language staffs, editorial staffs, technicians, and worldwide correspondents, should also be addressed as part of the strategic plan.
While diplomacy was once defined as official state-to-state relations, it has become increasingly important to influence and communicate directly with foreign peoples. Clearly, international broadcasting--and particularly television--will continue to be one of the most effective means of accomplishing and communicating U.S. foreign policy goals and objectives.
Consolidation will bring about significant savings from the current baseline budget. In addition, significant personnel savings will accrue. However, these savings will occur largely from Radio Free Europe/Radio Liberty; since they are an independent grantee organization, their employees are not considered full-time equivalent positions.
Because of continuing accounting and disbursing irregularities, the Office of Management and Budget has identified the State Department's accounting and financial management as a high-risk area. Included in this area is the operation of regional administrative management centers (RAMCs). The Department of State currently operates three RAMCs, in Bangkok, Mexico City, and Paris. Using both the Overseas Financial Management System (OFMS) and the RAMC Paris Accounting System, the RAMCs serve as regional accounting and disbursing centers. They maintain numerous accounts and issue checks, such as local payrolls, for posts within their region. They account for, control, and report on the use of appropriated funds, and provide summary financial information for departmentwide use.(1)
However, the overseas systems are not standardized among the three RAMCs and do not operate on-line with the State Department's Central Financial Management System (CFMS) in the United States. Moreover, an earlier examination found that after 10 years of development, OFMS is obsolete. It described the system as "labor-intensive, difficult to use, and time-consuming."(2)
Over the years, the State Department has addressed system shortcomings by reducing the overseas system variations from four (one standard version and three local versions) to two. Also, longterm plans call for a worldwide standardized accounting system--the Integrated Financial Management System (IFMS)--by 1999.
The Department of State has also conducted a study that addresses all aspects of financial management. As part of an overall support strategy, the State Department has been analyzing what functions must be performed overseas. Many functions that have traditionally been performed overseas can, with new technologies, be done just as effectively and efficiently in the United States. The department's own State 2000 report refers to an acid test of whether support can "equally, effectively and more cheaply be provided from the United States."(3) Along these lines, the State Department has preliminary plans to relocate the Mexico City RAMC to the continental United States in the 1995-97 timeframe. Relocation costs are estimated at about $4 million with a five-year payback period.
RAMC locations will be of less importance when the IFMS and supporting communication systems are fully deployed. All the software used will be compatible, and information will be transferred electronically. As communication and transportation methods continue to improve, the quality of RAMC service will be less dependent on their location. However, consolidation of the three RAMCs at a single location in the United States is not specifically planned by the Department of State at this time.
Nonetheless, a consolidation project should be initiated immediately, beginning with the relocation of the Mexico City RAMC. The department should develop thorough plans and selection criteria for a future single administrative management center in the United States and relocate the Mexico City center to that site. Site selection for the single center and relocation of the Mexico City operation should be accelerated. Planning for the eventual move of functions from the Paris and Bangkok centers that can be effectively performed at the relocated center should also begin.
Consolidation of certain RAMC functions is a logical step given the movement toward a single integrated financial system. With electronic data transfer and rapid transportation services such as worldwide overnight express, some functions currently performed at geographically dispersed administrative centers can be performed in the U.S. Understanding that it is dependent upon an effective hardware, software, and communications structure, planning for these relocations should be made a priority.
Moving the Mexico City RAMC to a site in the United States would save money. The Department of State estimates that overseas support costs for each U.S. employee range from $50,000 to $150,000 per year, in addition to basic salary and benefits. The relocation of the Mexico City RAMC to the United States would produce savings each year on such avoided overseas support costs.
There may be some increased salary costs in consolidating the RAMCs. In some locations, a foreign national work force is cheaper than using all U.S. employees. Bangkok, with approximately 60 Foreign Service Nationals, is an example of an inexpensive, but very effective, foreign work force. However, Paris--with over 100 foreign national employees--is much more expensive. It is very difficult to judge the fiscal impact of replacing foreign nationals with U.S. employees because of the variations in pay scales, currency exchange rates, benefits, and other factors. However, any increased costs are offset to some degree by the return of jobs to the U.S. economy, a smaller overall work force, and the increased tax base created by a U.S. national payroll replacing a foreign national payroll.
In addition to the Mexico City operations, the following should also be performed by the new U.S. RAMC: all overseas American payroll operations currently performed at the three RAMCs; foreign service national payroll, accounting and disbursing services for the Western Hemisphere posts currently serviced by RAMC Paris; and information system security technical analysis and rule-writing functions currently performed at the three RAMCs. The site selected should be suitable for the absorption of many other RAMC functions and appropriate as the potential location of a consolidated center.
2. The State Department should begin planning for the timely relocation of those Bangkok and Paris RAMC functions that can be performed effectively at the new U.S. RAMC.
The planning for the transfer of functions should begin immediately so that the move can be made when implementation of IFMS removes some of the current impediments. Exploration of further consolidation should continue.
The cost of relocating the Mexico City RAMC should be recouped in five years. Additional savings, based on economies of scale, may be realized as other RAMCs' functions are transferred.
Full-time equivalent positions will not be reduced as a result of moving the Mexico City RAMC; in fact, total positions will be increased by 15 for approximately one year when parallel operation of the Mexico City RAMC and the new center will be required. The total costs of relocating the Mexico City center are estimated at $4 million. Payback is projected in five years. Savings would continue to grow after that time.
Budget Authority (BA) and Outlays (Dollars in Millions)
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA n/a 2.6 0.5 -0.7 -1.1 -1.4 -0.1
Outlays n/a 2.6 0.5 -0.7 -1.1 -1.4 -0.1
Change
in FTEs n/a 15 0 -15 0 0 0
The Department of State has experienced significant problems in its departmental accounting and financial management. The serious deficiencies in the Department of State's financial system have led the Office of Management and Budget (OMB) to designate it as a highrisk area. The target date for correction reported by the Department of State is 1999.
One deficiency in the current financial systems that should be addressed immediately is the recovery of receivables owed to the U.S. government by State Department employees and other parties. The root cause of the department's current poor recovery rate is the lack of accurate accounting information. The Department of State does not have a financial accounting system that tells managers, in a timely manner, who owes how much and what action has been taken to collect. The department itself acknowledged that it has "a great deal of work ahead before fully implementing the requirements of the Standard General Ledger."(1) The General Accounting Office (GAO) reports that this failure to implement a general ledger capability has left the department with no control or accounting of accounts receivable.(2) An outside auditor states, "The possibility exists that revenue/receivables which should be recorded are never reported."(3) Collection is difficult and spotty without proper accounting procedures and records.
As a goal, the standard for recovery should be 100 percent of the receivables due. To fulfill its obligation to taxpayers to use federal funds effectively and efficiently, every public organization must seek to maximize its recovery of receivables. This approach is common sense for most commercial enterprises, and is certainly the proper approach for government. Internal control standards, set by the Federal Managers' Financial Integrity Act of 1982 and the Comptroller General, require "that all transactions and other significant events . . . be clearly and promptly documented and the documentation be readily available for examination."(4) If these internal control standards for documentation were met, the Department of State could identify its receivables. With this information and aggressive collection, recoveries could be made even with the lack of a fully deployed and integrated general ledger system. Based on the latest data available, State Department annual collections barely keep pace with the new receivables accrued each year. In fiscal year 1992, collections totaled about $17 million, while new receivables were $16 million. This means the outstanding receivables of approximately $20 million were reduced by only $1 million.
Recovery of overseas medical expenses is a good example of the department's need to track and aggressively collect receivables. Most Department of State employees serving overseas have private or federally sponsored medical insurance. These employees "are responsible for filing claims with their insurer to recover allowable medical expenses the government has paid and for remitting the insurance payments to the government."(5) GAO estimates that approximately $1.7 million in reimbursement of medical expenses could have been recovered in fiscal year 1991.(6) However, it appears that very little, if any, of this potential revenue was recovered.(7)
Examples of other State Department receivables include repatriation loans, emergency medical loans, medical air evacuation, nonstate travel, unearned pay, travel advances, and passport fees. The Department of State's accounting system does not provide the detail necessary to calculate the total amount due; however, it is clear that a significant number of debts with a substantial dollar value go uncollected.
Minimum information to be tracked and reported by each overseas post should include:
Procedures should be established at all overseas posts to record and track all obligations that are due from both businesses and individuals, such as prepaid leases, other prepaid expenses, personal use of government vehicles, and unofficial telephone calls.
3. The State Department should actively collect all accounts receivable.
To improve collection of receivables from employees, the Department of State should increase its use of payroll deduction where appropriate. The department currently uses IRS offset and collection agencies, but follow-up is poor and should be improved. For all receivables, the Department of State should set a goal of increasing its rate of recovery by 3 percent per year for the next five years.
The limitations of the current financial system notwithstanding, the recommended actions should increase the number and amount of accounts receivable collected. By accurately documenting, recording, and reporting debts, the Department of State would not only be able to track its accounts receivable more accurately, but also have the proof necessary to effect collection. Although more must be done to record and report all receivables rapidly, the known receivables provide an opportunity for improvement. Recent receivables normally have the best chance for recovery. At the end of fiscal year 1992, the Department of State reported $6 million in receivables less than 90 days old, with total receivables amounting to approximately $20 million. In other words, there are ample known receivables for the department to target.
Aggressive debt collection would also serve notice to the department that a higher standard for accounting and collection practices has been established--one that requires greater diligence on the part of staffs. Increased accountability should encourage both financial officers and individuals to examine carefully transactions that result in receivables such as travel advances, personal use of government services and equipment, and prepaid expenses. These transactions should be limited in number and amounts as much as possible. Discretion in requesting and approving these actions should be exercised.
The recommended actions regarding overseas medical expenses alone could recover well over a million dollars annually. The potential collections from other areas would be dependent upon the recovery rate achieved, new receivables incurred, and other factors, but are calculated below based on conservative estimates and a modest annual improvement rate of three percent. Collection of any portion of these receivables represents funds that would otherwise be lost to the government.
Budget Authority (BA) and Outlays (Dollars in Millions)
Fiscal Year
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA -1.3 -1.7 -1.8 -1.7 -1.6 -1.7 -9.8
Outlays -1.3 -1.7 -1.8 -1.7 -1.6 -1.7 -9.8
Change
in FTEs 0 0 0 0 0 0 0
report No. 1-FM-034 (Washington, D.C., August 1991), p. I-1.
4. U.S. General Accounting Office, Need to Ensure Recovery of Overseas Medical Expenses, NSIAD-92-277 (Washington, D.C.: GAO, August 1992), p. 3.
5. Ibid., p. 2.
6. Ibid., p. 4.
7. The estimate of the recoverable amount is based upon overseas medical expenses reported by Department of State's Office of Medical Services in fiscal 1991.
The end of the Cold War has produced a changed international system-- a system in which the United Nations (UN) plays a central role. For example, regional security issues have replaced the former Soviet threat, and multilateral diplomacy--as practiced through the UN-- takes on new importance. Additionally, transnational issues such as the environment and illegal narcotics trafficking require global solutions, and the UN plays a prominent role in framing a global approach.
The United States bears a disproportionate share of UN costs. Increases in these costs and--more importantly--what is accomplished with United States contributions are of special interest to the American people and Congress. They need assurance that the UN is using its resources efficiently, effectively, and as intended. Domestic constraints also require that the United States find ways to encourage other nations to share the UN's financial burden more equitably. While the United States is in the process of presenting a series of reform proposals to the UN, the United States should also try to simplify and streamline some of its own administrative procedures with respect to the UN.
The United States should seek to ensure that an effective oversight mechanism is established in the UN that would provide improved accountability and the means to guarantee that UN programs are accomplishing their approved intent and properly using resources assessed from members. The announced establishment by the Secretary General of an Office of Assistant Secretary General (ASG) for Inspections and Investigations is an excellent start. Part of this improved accountability should be the requirement that UN managers report frequently on the organization's financial performance.
The immediate creation of a UN Office of Inspector General (OIG) or similar office would be an effective follow-up to the Office for Inspections and Investigations in addressing the oversight and accountability question. Establishing such an office will ensure that an independent evaluation of operational and management practices is conducted on a regular basis. The UN does have a Joint Inspection Unit with 11 inspectors plus staff. However, this unit does not function as an effective OIG. There are not a sufficient number of inspectors to cover the far-flung operations of the UN, nor are inspectors allowed access to all the information they need to complete a thorough inspection or audit. Currently, UN managers do not allow personnel from the Joint Inspection Unit to see financial records and accounts. Without the ability to review this information, it is impossible for the inspectors to perform a bona fide OIG role.
In addition to ensuring--through increased reporting and the creation of an oversight office--that member states are getting value for their UN payment of assessments, the UN's procedures for computing the assessment scales should be reexamined. The cost to the U.S. government of supporting the UN falls into two categories--the UN regular budget and the UN peacekeeping budget. These assessments are made separately and have grown considerably over the years, with the most significant increases in the peacekeeping budget. For example, the U.S.-assessed requirements under the regular budget rose from $259 million to $291 million--a 12 percent increase--between fiscal years 1992 and 1994. The basic peacekeeping budget requirement, as reflected in the State Department Contributions for International Peacekeeping Activities (CIPA) account, rose 43 percent during that period, from $419 million to $598 million.(1)
The rise in peacekeeping costs is a matter of genuine concern. The 43 percent increase cited is a conservative estimate of the true growth rate. It covers only one portion of overall costs--the State Department CIPA contribution. The total 1994 UN peacekeeping budget, which will be shared by UN members, is approximately $3.8 billion. The U.S. government has recently undertaken a separate study of how best to structure executive branch support for UN peacekeeping and to ensure regular payment of the U.S. share of growing UN peacekeeping expenses.
The assessment scales determine what portion of the regular and peacekeeping budgets each member country must pay. Under current procedures, the United States pays the ceiling rate of 25 percent of the UN regular budget and more than 30 percent of peacekeeping costs.(2) Capacity to pay is the fundamental criterion in setting the scale of assessments for the UN.(3) However, the peacekeeping scale is not equitable in all cases. A 1992 General Accounting Office report notes that 15 countries have sufficiently high per-capita gross national products that indicate they could assume a greater share of the UN budgets. Additionally, 20 countries are upper- middle- and high-income economies that should bear more of the burden of peacekeeping.(4)
Changes cannot be made without the support of other UN members. The United States must build a consensus for proposed changes, such as establishing an inspections office and reexamining the basis for, and equity of, UN assessment scales. As a first step in generating member support, the United States should determine how other countries, particularly Security Council members, monitor their UN payments and what their level of customer satisfaction is regarding current UN management practices.
Two related items, which are entirely under United States control, should also be addressed. First, the Foreign Assistance Act of 1961 has a reporting requirement, commonly called the Bonker report, which requires the President to submit semiannual reports to Congress on voluntary contributions to international organizations (IOs). This reporting requirement should be eliminated. Second, the tax treatment of salaries of U.S. personnel working for the UN and other IOs should be changed.
The Bonker report is a complex summary of all the voluntary contributions to IOs by federal agencies. The report involves transferring data from various agencies through OMB, to the State Department, and finally to Congress. There is no evidence the information in the Bonker report is used for any purpose.
The tax issue arises from the fact that U.S. nationals working for the UN or for any one of at least 26 other IOs must pay U.S. income tax on their IO earnings, even though these organizations establish pay levels on the basis that pay will not be taxed. For example, the Convention on Privileges and Immunities of the United Nations states that salaries and emoluments are tax-exempt, but the United States has specifically reserved the right to tax its nationals.(5) In order not to penalize U.S. personnel working for IOs, a mechanism has been established whereby the United States taxes IO salaries, the IO refunds the taxes paid by U.S. employees, and the United States reimburses the IO for such amounts through bilateral tax reimbursement agreements and tax equalization funds.
The failure to make IO salaries tax-exempt necessitates this complex process and produces no net gain for the United States. Any tax collected from U.S. nationals is offset by payments made to the IOs under tax reimbursement agreements or through tax equalization funds. The payments to IOs at times exceed the amount reimbursed to U.S. personnel. In fact, the United States was overassessed in its payments to the UN tax equalization fund as evidenced by the current $32.2 million surplus in this account.(6) Additionally, there are administrative costs involved in monitoring and reviewing the reimbursement claims and in reimbursing the IOs. There is also the opportunity for fraud and abuse through devices such as amended tax returns. These difficulties are apparently incurred solely for the appearance of taxing U.S. citizens working for IOs.
The UN Secretary General has announced that the new position of ASG for Inspections and Investigations is the first step toward the establishment of a higher post with broader audit, evaluation, and investigation authority. Endorsement of this appointment and the Secretary General's commitment to a full Office of Inspector General will be sought in the General Assembly. The United States should fully support approval. Increased reporting by UN managers on their financial performance and program effectiveness is essential. An oversight mechanism is an effective way to achieve this end. Any oversight entity must have full access to all financial and operational records.
2. The President should seek UN member support for a thorough reexamination of UN assessment procedures and practices.
Emphasis must be placed on the peacekeeping scale, and the objective should be to ensure a more equitable scale for the United States.
3. Legislation should be enacted to amend the Foreign Assistance Act of 1961 to eliminate the reporting requirement on voluntary contributions to international organizations.
The requirement for reporting on voluntary contributions to international organizations should be eliminated by deleting subsections 306(b)(1), (2) and (3) of 22 U.S.C. 2226. This will end an obviously unnecessary reporting requirement levied on all federal agencies that might choose to make a voluntary contribution to an international organization.
4. Legislation should be enacted to eliminate the collection and reimbursement of income taxes on international organization pay.
Congress should amend Section 893(a) of the federal tax code to include U.S. citizens under the rule for exclusion of wages, fees, or salary of employees of international organizations. This modification would make U.S. personnel salaries received from IOs tax-free and eliminate the need for the complicated taxing and reimbursement procedures currently used.
Emphasis on UN budgeting practices, financial reporting, and accountability will help ensure that burgeoning UN expenditures are contained. No specific savings can be associated with these management procedures, but some basic controls are critical to checking rising UN costs. An active inspector general or similar official can make immediate and lasting contributions to the UN in the form of improved management practices. Overlapping and duplicative functions and programs within the UN can be eliminated and greater financial stability achieved. Elimination of the Bonker report is mandated by common sense. Unnecessary reporting should, by definition, be stopped.
Taxing IO income and then reimbursing the taxpayer is also unnecessary reporting at its worst. The current tax procedures involve not only reporting in the sense of filing returns and claims but necessitate the transfer of funds. Additionally, an unnecessary opportunity for fraud and abuse in claiming reimbursements will be eliminated when the taxing of IO income, and its concomitant reimbursement process, is eliminated.
A reexamination of assessment practices should result in reduced costs to the United States for UN support.
Elimination of the Bonker report would save the considerable indirect costs currently expended to produce a report of no demonstrated value.
There are also savings from the avoidance of overpayment to tax equalization funds and to tax reimbursement agreement accounts. The accumulated overpayments in the UN tax equalization fund were $32.2 million as of 1993. This represents funds that were not available to the U.S. government. The overpayments were unnecessary expenditures. While the funds may be recovered, the United States loses the use of this money while the UN draws interest on it.
In May 1993, the Secretary of State informed the UN that "the United
States will credit $32.2 million toward its calendar year 1993
assessment."(7) This represents a one-time savings of that amount in
fiscal year 1994 outlays because the payment for the United States'
1993 calendar year assessment will be reduced by that amount. The
overpayments vary from year to year and cannot be predicted
accurately. However, a conservative estimate of annual savings of
$0.8 million appears justified.(8)
)
Indirect savings will also be realized by not claiming and processing
reimbursements and transferring funds to IOs. The State Department
estimates that over 400 annual work hours with an approximate value
of $17,000 are lost monitoring tax reimbursements.
Budget Authority (BA) and Outlays (Dollars in Millions)
Fiscal Year
1994 1995 1996 1997 1998 1999 Total
BA -32.2* -0.8 -0.8 -0.8 -0.8 -0.8 -36.2
Outlay -32.2* -0.8 -0.8 -0.8 -0.8 -0.8 -36.2
Change
in FTEs 0 0 0 0 0 0 0
Even before the National Performance Review (NPR) initiative began, Secretary Warren Christopher and Deputy Secretary Clifton Wharton announced sweeping changes in the Department of State's policy implementation process, drawing on recommendations contained in the State 2000 report, which was completed in January 1993. In February, they announced a reorganization to reduce management layering, devolve greater responsibility to line units and officers, and eliminate many ad hoc offices that had been created over the years. The changes also gave new organizational structure to global issue priorities such as the environment, peacekeeping, and support for democracy.
Following the President's March announcement of NPR and the April 1 letter from the Vice President to the department secretaries, Secretary Christopher established a State Department Team for Reinventing Government on April 5. Top department leadership wanted this to be a grass-roots effort to the greatest extent possible. A small coordinating office was established and volunteers were chosen to head cluster groups in each of six areas--consular affairs, business facilitation, diplomatic security, people and empowerment, financial management, and organization management. The cluster groups' job was to come up with ideas and realistic recommendations to improve service to the public, save money, and enable State Department employees to do their jobs better.
Each cluster group leader, in turn, recruited other volunteers to participate in the effort. In all, some 100 State Department employees, from all ranks and both the Civil Service and Foreign Service, played an active role in developing proposals. Many times that number contributed ideas in writing or participated in group meetings. Some of the cluster groups also conducted extensive interviews in other agencies and the private sector.
The coordinating office sent a questionnaire to the department's 275 overseas posts and offices throughout the United States and domestic bureaus to solicit individual or unit suggestions on how the department could do its work better. To date, more than 400 replies have been received.
On May 26, the Vice President held a town meeting at the State Department for employees of the Department of State, the Agency for International Development, the Arms Control and Disarmament Agency, and the United States Information Agency. Nine hundred employees attended the meeting, which was also broadcast live to offices throughout the building and to 160 overseas posts and relayed by satellite to 73 more.
These initiatives quickly demonstrated not only that State Department personnel had a great many ideas for improving performance and efficiency, but also that there was a tremendous reservoir of popular support for the basic ideas of government reinvention. Employees were eager to participate, often on their own time after completing their normal workdays.
The State Department reinvention team worked closely with its NPR task force counterparts, but--because over 200 proposals were made-- began planning early for a separate State Department report on reinventing government. That report complements the present one by addressing over 80 issues and recommendations on internal State Department activities.
The Consular Affairs Laboratory was one of the first to be announced by any agency. State Department officials had been considering ways to reinvent the department's consular operations well before the President's announcement of the reinventing government initiative. The Vice President's letter of April 1 provided a broader platform for that effort.
At the core of the consular lab is the establishment of five minilabs at overseas posts, and the use of surveys to conduct both external (customer) and internal (organizational) assessments. Other reinvention initiatives in the consular area include:
The second State Department laboratory is directed at supporting U.S. businesses abroad--the Business Facilitation Laboratory. One of the many activities to be supported by this lab is the Business Facilitation Incentive Fund Program. Under this program, the department's geographic posts and bureaus will be selected to receive additional funding based on their proposals to improve business promotion programs. The continued funding of these activities will depend on a review of their performance. The department intends to continue this program as long as it proves viable. If it proves successful, the State Department will seek authority to collect and retain fees for its commercial services.
Other elements of the Business Facilitation Laboratory include significantly expanding training of State Department personnel in commercial work and increasing the department's outreach to the domestic American business community--for example, by having the Secretary periodically address major U.S. business conferences or conventions.
The third State Department laboratory is the Bureau of Diplomatic Security. The security function, here and abroad, for U.S. government personnel as well as for foreign officials in the United States, has gone through 20 years of rapid--not always coordinated--expansion. One of the most significant improvements would be a move to a multilevel security environment in which Secret (not Top Secret) is the normal security level for classified information. This change, in turn, would smooth the way for much speedier and less expensive background investigations. Other savings and efficiencies could be realized if the various foreign affairs and national security agencies standardized their clearance procedures. Other proposals relate to eliminating duplication or inefficiencies in providing security services here and abroad.
The People and Empowerment Cluster Group held three group process meetings with employees representing regional and functional bureaus, the Bureau of Personnel, and the Foreign Service Institute. The stated focus of this cluster group attracted a great deal of attention from many State Department employees who were eager to provide input on how they perform their jobs and how the personnel system treats them. The State Department, like other foreign affairs agencies, has special personnel problems because of the mix of two personnel systems--the Civil Service and the Foreign Service.
Employees would like to see more mobility between the two services, a revamping of the department's awards program, more and better training, and solutions to the problems of promotion bottlenecks or too many employees in some specialties and not enough in others. Many employees noted the need for the department to adapt its practices to a changed workforce, whose members cannot work the traditional eighthour day. Another focus was the evolving nature of the secretarial profession, and what changes are needed to provide rewarding, successful secretarial careers. Still other recommendations emphasize the need for better customer service.
The Financial Management Cluster Group generated more than 20 welldocumented, wide-ranging proposals based on numerous town meetings with key policymakers and financial managers in the department. Altogether, more than 150 department employees participated in these cluster groups, more than 120 cables were received from overseas posts providing suggestions, and officials from two foreign government embassies shared information and ideas. The proposals have the potential to save significant amounts of money, reduce red tape, and streamline operations. For example, one proposal suggests that if the full-time equivalent ceiling were lifted, the department could realize as much as $20 million in annual savings by replacing contract hires with direct hires. Allowing the department to move to lease-purchase arrangements for foreign properties would save comparable or greater sums over time. The State Department report proposes a mini-laboratory to test simplified travel vouchering procedures. Other recommendations address how to reduce procurement red tape, improve the method for determining Foreign Service National employee wage rates, and reduce the net cost to the department of medical programs.
Central to overall budget problems is how well the department can match resources to priorities. Both the State Department cluster group and the NPR task force made complementary recommendations on this subject. (See DOS02--Integrate the Foreign Affairs Resource Management Process.)
Among other subjects, the Organization Management Cluster Group looked at how to improve efficiency by consolidating administrative support functions in Washington, proposed strengthening the authority of ambassadors to control overseas staffing (see prior section of this report), recommended expanded use of regional support centers, and urged expeditious action to improve the integrity of the department's personnel database.
Secretary Christopher will send the State Department report to the Vice President in September 1993. He intends to use the report as the basis for an ongoing process of institutional reform and renewal. Many of the recommendations are already being implemented. Others require action by Congress or by other offices of the executive branch; some require further study.
Creativity cannot be compelled. But the State Department intends to do as much as possible to encourage it, by listening to employees and to the public and by putting good ideas into practice.
The United States Information Agency (USIA) has undertaken a major reinvention project: the consolidation of international broadcasting. (See prior section of this report on consolidation of U.S. nonmilitary international broadcasting.) Director Dr. Joseph Duffey negotiated proposed legislation providing for the integration of all nonmilitary U.S. government international broadcasting. As a result, legislation is now pending in Congress that will bring about a consolidation of Radio Free Europe and Radio Liberty under a new Board of Governors that provides for both a continuing relationship with USIA and a large measure of day-to-day editorial independence. This will result in considerable savings, without diminishing the ability of U.S.- sponsored international broadcasters to fill traditional roles.
The committee began by reviewing existing documents that analyze agency activities, including advisory commission reports and ad hoc reports such as the one resulting from a Georgetown University study completed in March. The announcement of the creation of the group generated input, written and verbal, from individual employees, providing a measurer concerns and their enthusiasm for change.
In response to early expressions of concern by minority and women's groups, Director Duffey created the Just and Fair Workplace Task Force to examine the perceptions of injustice and unfairness in the hiring, promotion, and treatment of minority and female employees.
Most specifically, the USIA coordinating group focused on existing divisions of the agency that have already implemented Total Quality principles. Two years ago, the Engineering Division of the Voice of America retained the consulting services of the Maryland Center for Quality and Productivity to help it organize the process. Since its inception, it has improved its central function dramatically. Improvements in travel order processing, performance evaluation, idea processing, and recognition programs have all developed from this process.
In the short tenure of the coordinating group, other areas, some cross-agency, have emerged as strong candidates for laboratory status. In the field of personnel, agency employees are concerned with promotion opportunities, illogical organization, performance evaluation, and personal bias.
Specific functions, such as the processing of J-visa issuing authority, are also potential candidates. The entire area of exchanges is complicated by the conflicting requirements of regulation and congressional earmarks.
Change in Budget Authority by Fiscal Year (Dollars in Millions)
1994 1995 1996 1997 1998 1999 Total Change
in FTEs
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
DOS01: cbe cbe cbe cbe cbe cbe cbe cbe
DOS02: n/a n/a n/a n/a n/a n/a n/a n/a
DOS03: cbe cbe cbe cbe cbe cbe cbe cbe
DOS04: cbe cbe cbe cbe cbe cbe cbe cbe
DOS05: -0.6 -0.9 -1.2 -1.2 -1.2 -1.2 -6.3 0
(USIA) -6.0 -9.1 -9.1 -9.1 -9.1 -9.1 -51.5 -100
DOS06: n/a n/a n/a n/a n/a n/a n/a n/a
DOS07: n/a 2.6 0.5 -0.7 -1.1 -1.4 -0.1 0
DOS08: -1.3 -1.7 -1.8 -1.7 -1.6 -1.7 -9.8 0
DOS09: -32.2 -0.8 -0.8 -0.8 -0.8 -0.8 -36.0 0
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total
State/USIA -40.1 -9.9 -12.4 -13.5 -13.8 -14.2 -103.9 -100
cbe = Cannot be estimated (due to data limitations or uncertainties about implementation timelines).
n/a = Not applicable (recommendation improves efficiency or redirects resources but does not directly reduce budget authority).
Recommendation
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
DOS01: cbe cbe cbe cbe cbe cbe cbe
DOS02: n/a n/a n/a n/a n/a n/a n/a
DOS03: cbe cbe cbe cbe cbe cbe cbe
DOS04: cbe cbe cbe cbe cbe cbe cbe
DOS05: -0.6 -0.9 -1.2 -1.2 -1.2 -1.2 -6.3
(USIA) -5.0 -8.5 -9.1 -9.1 -9.1 -9.1 -49.9
DOS06: n/a n/a n/a n/a n/a n/a n/a
DOS07: n/a 2.6 0.5 -0.7 -1.1 -1.4 -0.1
DOS08: -1.3 -1.7 -1.8 -1.7 -1.6 -1.7 -9.8
DOS09: -32.2 -0.8 -0.8 -0.8 -0.8 -0.8 -36.2
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total
State
/USIA -39.1 -9.3 -12.4 -13.5 -13.8 -14.2 -102.3
cbe = Cannot be estimated (due to data limitations or uncertainties about implementation timelines).
n/a = Not applicable (recommendation improves efficiency or redirects resources but does not directly reduce outlays).
Governmental Systems
Changing Internal Culture Abbr. ************************* **** Creating Quality Leadership and Management QUAL Streamlining Management Control SMC Transforming Organizational Structures ORG Improving Customer Service ICS
Mission-Driven, Results-Oriented Budgeting BGT
Improving Financial Management FM
Reinventing Human Resource Management HRM
Reinventing Federal Procurement PROC
Reinventing Support Services SUP
Reengineering Through Information Technology IT
Rethinking Program Design DES
Strengthening the Partnership in
Intergovernmental Service Delivery FSL
Reinventing Environmental Management ENV
Improving Regulatory Systems REG
Agencies and Departments Abbr. ************************ ***** Agency for International Development AID Department of Agriculture USDA Department of Commerce DOC Department of Defense DOD Department of Education ED Department of Energy DOE Environmental Protection Agency EPA Executive Office of the President EOP Federal Emergency Management Agency FEMA General Services Administration GSA Department of Health and Human Services HHS Department of Housing and Urban Development HUD Intelligence Community INTEL Department of the Interior DOI Department of Justice DOJ Department of Labor DOL National Aeronautics and Space Administration NASA
National Science Foundation/Office
of Science and Technology Policy NSF
Office of Personnel Management OPM
Small Business Administration SBA
Department of State/ U.S. Information Agency DOS
Department of Transportation DOT
Department of the Treasury/
Resolution Trust Corporation TRE
Department of Veterans Affairs DVA