This program aims to  provide safe, secure, and cost-effective buildings for the thousands of U.S.  employees working overseas. State estimates this will cost more than $6.2  billion. Additional funding will be needed after this time to continue the  program. Finally, the process was further complicated by other factors, such as  frequent personnel turnover and breakdowns in communication among  multiple agencies. In Belgrade, officials acknowledged that the projection  exercise was not taken seriously and that projections were not developed  using a disciplined approach. Officials from each of the 14  posts we contacted reported that their headquarters bureaus had not  provided specific, formal guidance on important factors to consider when  developing staffing projections. In addition, we found that  most agencies with staff overseas are not consistently considering  operational costs when developing their staffing projections. In addition, we found little evidence to show that staffing  projections were consistently vetted with all other agencies’ headquarters  to ensure that the projections were as accurate as possible. Government Aims to Distribute Costs of Overseas Facilities among Users

The State Department, which historically has been responsible for funding  the construction and maintenance of U.S. embassies and consulates,  recently proposed a capital security cost-sharing plan that would require  federal agencies to help fund its embassy construction program. OMB is examining State’s and other cost-sharing proposals  designed to create more discipline in the process for determining overseas  staffing requirements. Therefore, as OMB and the interagency committee work to  develop a new cost-sharing mechanism, they also need to develop  consensus on many issues, including    how the cost-sharing mechanism would be structured—for example, as  capital reimbursement for new embassy compounds, or as a rent  surcharge applied to all embassy occupants worldwide or just those at  new embassy compounds;  the basis for fees—such as full reimbursement of capital costs in a year or  amortized over time, or rent based on local market rates, an average of  market rates within a region, or one flat rate applied worldwide;    how charges would be assessed—based on the amount of space an agency  uses or on its per capita presence—and whether charges would be applied  on a worldwide level, at the post level, or just for posts receiving new  facilities;    whether different rates would be applied to staff requiring controlled  access rather than noncontrolled access space;    whether agencies would be charged for staff not located within facilities  operated by the State Department—for example, USAID staff working in  USAID-owned facilities outside an embassy compound or staff who work  in office space at host country ministries and departments;  if and how costs associated with staff providing shared services would be  offset, and whether costs associated with Marine and other security  services would be covered;    how fees would be paid and who would collect the payments—whether  through an interagency transfer of funds or through an existing structure  such as ICASS; and    whether potential legal barriers exist and, if so, what legislation would be  necessary to eliminate them. Given that the size and cost of new facilities are  directly related to anticipated staffing requirements for these posts, it is  imperative that future staffing needs be projected as accurately as  possible. USAID also agreed that U.S. agencies do not take a consistent approach to  determining long-term staffing needs for new embassy compounds.
Why GAO Did This Study

The 1998 terrorist attacks on two U.S. embassies in Africa highlighted security deficiencies in diplomatic facilities, leading the Department of State to embark on an estimated $16 billion embassy construction program. The program's key objective is to provide safe, secure, and cost-effective buildings for employees overseas. Given that the size and cost of new facilities are directly related to agencies' anticipated staffing needs, it is imperative that future requirements be projected as accurately as possible. GAO was asked to (1) assess whether State and other federal agencies have adopted a disciplined process for determining future staffing requirements and (2) review cost-sharing proposals for agencies with overseas staff.

What GAO Found

U.S. agencies' staffing projections for new embassy compounds are developed without a systematic approach or comprehensive rightsizing analyses. State's headquarters gave embassies little guidance on factors to consider in developing projections, and thus U.S. agencies did not take a consistent or systematic approach to determining long-term staffing needs. Officials from each of the 14 posts GAO contacted reported that their headquarters bureaus had not provided specific, formal guidance on important factors to consider when developing staffing projections. The process was further complicated by the frequent turnover of embassy personnel who did not maintain documentation on projection exercises. Finally, staffing projections were not consistently vetted with all other agencies' headquarters. Because of these deficiencies, the government could construct wrong-sized buildings. In fact, officials at two embassies GAO visited said that due to poor projections, their sites may be inadequate almost immediately after staff move onto the new compound. State has proposed a cost-sharing plan that would require federal agencies to help fund new embassy construction. The Office of Management and Budget (OMB) is leading an interagency committee to develop a cost-sharing mechanism that would provide more discipline when determining overseas staffing needs and encourage agencies to think more carefully before posting personnel overseas. Numerous issues will need to be resolved for such a program to be successful, including how to structure the program and how payments will be made.