Establish a simple, transparent, and equitable cost-distribution  system. ICASS Has Not Eliminated Duplicative Administrative Support Structures or Streamlined Operations

ICASS has not resulted in efficient delivery of administrative support  services or achieved economies of scale because it has neither eliminated  costly duplication of administrative support services nor led to systematic  cost-containment measures and the streamlining of operations. While agencies cited affordability concerns,  programmatic needs, and control issues as reasons for not subscribing to  ICASS services, we found that they seldom provided detailed business  cases that justified decisions to self-provide support services. In addition,  neither service providers nor customer agencies have made systematic  efforts to contain costs by consolidating or streamlining services. However, we found  that few systematic efforts to consolidate duplicative administrative  structures or streamline administrative processes have occurred at either  the postwide or worldwide level. ICASS Is Generally Effective in Providing Quality Services Based on Its Stated Goals, but Impediments Still Hinder Its Success

Based on the system’s primary goals, ICASS is generally effective in  providing quality administrative support services, although not to the  extent that it could be if certain impediments were addressed. We found that  ICASS is simple and transparent enough for customers to understand the  basic structures that govern service provision at post. Other obstacles to maximizing the  system’s effectiveness include limits to overseas staffs’ decision-making  authority, which can weaken ICASS’s goal of “local empowerment.” Finally,  we found that available training and informational resources that could  enhance participants’ knowledge and implementation of ICASS are  underutilized. Customers agreed that the system was more equitable than its predecessor,  the FAAS system. Moreover, annual reviews of progress toward  achieving ICASS strategic goals have not been conducted. ICASS was designed, in part, to the contain costs  of overseas administrative services. The U.S. Scope and Methodology

To respond to both objectives of our review—whether the International  Cooperative Administrative Support Services (ICASS) system has led to  efficient delivery of administrative services and whether ICASS is an  effective mechanism for providing quality services—we conducted  fieldwork and reviewed documentation in Washington, D.C., and at eight  posts worldwide. For our case study posts, we collected data and documentation from and  conducted interviews with embassy personnel involved in ICASS, including  Ambassadors and Charges d’Affaires, Deputy Chiefs of Mission, State  management officers, ICASS staff, and customer agency managers and staff  who work with ICASS, on  the role of the ICASS Council and its decision-making process;   mechanisms for ensuring quality services, including evaluating service  provider performance and customer satisfaction;   the degree to which customers understand ICASS goals and structures,  and whether they agree that service quality matches ICASS costs;   the level of ICASS training among council members and service  providers, including foreign nationals;   the management burden associated with ICASS, and the pros and cons   the effect of the changing nature of agencies’ staffing (including State’s)  on ICASS costs and quality of service;  the effect of temporary duty personnel and regional staffing on ICASS   whether agencies pay the full costs associated with their presence at   the cost centers to which each customer agency subscribes;  the cost centers to which each agency does not subscribe, the basis for  not subscribing to those services, and how agencies provide for  administrative support services to which they do not subscribe under  ICASS;  the effect that opting out of services has on other agencies; and  the degree to which the ICASS Council has considered new approaches  to providing ICASS services, including streamlining processes and  adopting best practices developed by agencies at posts or by other posts  in the region. Overall, ICASS is implemented in one of two manners. GAO Comments

1. GAO Comments

1. 2.
Why GAO Did This Study

Costs for overseas posts' administrative support services have risen nearly 30 percent since fiscal year 2001, reaching about $1 billion in 2003. These costs are distributed among 50 agencies through the International Cooperative Administrative Support Services (ICASS) system, which was designed to reduce costs and provide quality services in a simple, transparent, and equitable manner. Since ICASS was implemented in 1998, its performance has not been systematically reviewed. GAO was asked to examine (1) whether ICASS has led to efficient delivery of administrative services and (2) whether ICASS is an effective mechanism for providing quality services.

What GAO Found

ICASS has not resulted in more efficient delivery of administrative support services because it has neither eliminated duplication nor led to efforts to contain costs by systematically streamlining operations. GAO found that agencies often decide not to use ICASS services and self-provide support services--citing reasons of cost, programmatic needs, and greater control--which can lead to duplicative structures and a higher overall cost to the U.S. government. Although some agencies' reasons for self-providing services may be supportable, GAO found that agencies rarely made business cases for why they chose not to take ICASS services initially or withdrew from services later. In addition, service providers and customer agencies have undertaken few systematic efforts to consolidate services or contain costs by streamlining administrative support structures. Furthermore, GAO found that deterrents to consolidating and streamlining administrative structures largely outweigh the incentives. However, there are efforts, both internal and external to ICASS, that may address some of the obstacles that prevent ICASS from operating more efficiently. Based on the system's primary goals, ICASS is generally effective in providing quality administrative support services in an equitable manner, although not to the extent that it could be if certain impediments were addressed. GAO found that ICASS is simple and transparent enough for customers to understand its basic principles. Furthermore, most personnel agree that ICASS is more equitable than its predecessor. However, ICASS strategic goals lack indicators to gauge progress toward achieving them, and progress toward achieving posts' performance standards is not annually reviewed or updated. Other obstacles to maximizing ICASS include limits to overseas staffs' decision-making authority, which can diminish ICASS's goal of "local empowerment." Finally, GAO found that training and information resources, which could enhance participants' knowledge and implementation of ICASS, are underutilized.