The IG noted that State had yet to agree upon language  formalizing the responsibilities of the three bureaus in its FAM 5 years  after the merger. State Cannot Demonstrate That It Achieved the Objectives of Its 2005- 2006 Reorganization

Although State restructured the bureaus to better focus on post-September  11 challenges and priorities and combined related offices to streamline  staff, it cannot demonstrate that it reduced inefficiencies and top-heavy  management or that it eliminated mission overlap among the offices. The Office of Weapons of Mass Destruction Terrorism was to develop  policy guidance and a diplomatic strategy. State Reduced the Overall Number of Offices and Functions Assigned to the Reorganized Bureaus but Did Not Reduce Overall Staff Levels

Overall, State combined 30 offices and functions present in the three- bureau structure into 26 offices and functions present under the new two- bureau structure. State did not  define what constituted bureaucratic inefficiencies, nor did it determine  how reductions in the number of offices or personnel would improve  efficiency. Nevertheless, workload mismatches persisted after the reorganization. Absent Clearly Defined Goals, State Cannot Demonstrate That It Achieved Its Objective of Making Management Less Top-heavy

In its July 2005 notification to Congress, State noted as its third objective  that the merger would reduce top-heavy management. As a result, State lacks reasonable assurance that the reorganization  achieved its objectives or that it can identify any lessons learned. Based on our identified key  practices for implementing organizational transformations and mergers,  we found that State generally addressed one key practice, partially  addressed two practices, and did not address the remaining five. In addition, State’s July 2005  notification to Congress also described reasons to justify merging the two  bureaus, including the need to address post-September 11 challenges and  combine related offices to reduce bureaucratic inefficiencies. State did not establish a coherent mission and integrated goals to guide  the transformation. Conclusion

State cannot demonstrate that it achieved all of the stated objectives for  the 2005-2006 reorganization of its arms control and nonproliferation  functions. For example, State intended to address the previously identified  deficiency of overlapping and uncertain roles and responsibilities among  the arms control, nonproliferation, and verification bureaus. In particular, by establishing a results-oriented reporting  framework with a defined end state with clear and measurable goals, State  would be better able to gauge progress toward its goals and assess the  results of restructuring. To better understand what State did and did not achieve, we examined  State’s workforce allocations, staffing patterns, aForeign Service Officer  (FSO) promotion rates and civil service and FSO attrition data for the  affected bureaus before and after the reorganization, as well as a study of  the Bureau of International Security and Nonproliferation’s (ISN)  workforce conducted in May 2006. To assess the extent to which State’s 2005-2006 reorganization addressed  eight key transformation practices, we obtained and analyzed State’s  methodology for implementing the reorganization, as well as e-mail,  memos, and letters describing the decision-making process and concerns  about the manner in which State implemented the reorganization.
Why GAO Did This Study

In 2004, the Department of State (State) Inspector General (IG) concluded that State's three-bureau structure for conducting arms control and nonproliferation policy did not adequately address post-September 11 challenges, including possible terrorist use of weapons of mass destruction. The IG also noted that State had yet to formalize the responsibilities of the three bureaus in its Foreign Affairs Manual (FAM), which sets out agency organization and functions. Between late 2005 and early 2006, State created a new two-bureau structure to better address these issues and improve efficiency GAO was asked to assess the extent to which State addressed (1) the objectives of its 2005-2006 reorganization and (2) key transformation practices. For this effort, GAO reviewed State documents pertaining to the reorganization and staffing data for the affected bureaus in the periods before and after the reorganization and interviewed former and current State officials in Washington, D.C.

What GAO Found

State cannot demonstrate that the 2005-2006 restructuring of its Nonproliferation, Arms Control, and Verification and Compliance bureaus achieved all of its objectives because it did not clearly define the objectives and lacked metrics to assess them. State's objectives were to enable it to better focus on post -September 11 challenges; reduce bureaucratic inefficiencies and top-heavy management; and eliminate overlap. State sought to achieve its first objective by creating new offices and roles to address terrorism and counterproliferation issues. To meet its second objective, State merged three bureaus having 30 offices and functions into two bureaus having 26 offices and functions and freed up staff slots for these new roles, but problems with workload mismatches persisted after the reorganization as State employees noted it left some offices overworked and some offices underworked. State cannot demonstrate that it met its third objective, reducing top-heavy management, as its goals were undefined. Although it reduced the number of senior executives from 27 to 20 and reduced office directorships, the overall number of higher-ranking employees increased from 91 to 100 and executive office staff increased from 44 to 50. Moreover, concerns about mission overlap persist, in part because bureau roles remain undefined in the FAM. State's reorganization addressed few of the key practices for organizational mergers and transformations that GAO developed in 2002. These practices are found to be at the center of successful mergers and transformations. As illustrated below, State generally addressed one key practice, partially addressed two, and did not address the remaining five. For example, State did not address establishing coherent mission and strategic goals because it did not define an end state with measurable goals, nor did it devise a means to gauge progress toward such goals or assess the results of actions taken. As a result, State lacks reasonable assurance that the reorganization achieved its objectives or that it can identify any lessons learned.