	Introduction

The U.S. Information Agency’s (USIA) missions are to explain and advocate U.S. policy, provide information about the United States, build lasting relationships and mutual understanding among the peoples of the world, and advise U.S. decisionmakers on foreign public opinion and its implications for the United States. Objectives, Scope, and Methodology

The Chairman of the House Committee on the Budget asked us to examine USIA’s reform and cost-cutting efforts and identify options that could enable USIA to adjust to reduced budgets. Reducing the Number of Countries in Which USIA Operates Is an Option to Reduce Costs

USIA’s philosophy has been to maintain a public diplomacy presence where a State Department mission is located. USIA has closed some posts. Individual posts may be losing one or more positions based on a 1993 USIA system that ranks countries by importance and other characteristics, such as population and size, and USIA’s potential to affect U.S. interests there. For example, one USIA official stated that USIA management recognizes that the post in Germany will be too large even after downsizing, as it reflects the structure established after World War II. A more comprehensive approach would be required if there were a major funding reduction. Expanding Innovative Management Approaches May Permit USIA to Absorb Additional Reductions

If after assessing the impact of its overseas programs USIA believes they remain critical to U.S. foreign policy goals, USIA would still be in a position to reduce costs. Reducing Concentration of Exchanges in Certain Countries Is an Option to Reduce Costs

Some officials believe USIA could decrease funding for exchanges with western industrialized countries. Both the U.S. Increased Foreign Government Support for Exchanges Could Reduce Costs

USIA could reduce its costs by requiring more support from partner foreign governments. Additionally, USIA stated that (1) it continues to curtail or eliminate programs that must be sacrificed to address foreign policy priorities; (2) it has moved resources from Central America to Eastern Europe and the newly independent states of the former Soviet Union; and (3) it encourages host government and private sector cost-sharing of academic exchange programs and has been able to raise the level of funding from partner countries. U.S. international broadcasting has undergone significant downsizing and restructuring. Eliminating Language Services Would Reduce Costs but Require Clear Broadcasting Strategy

Eliminating a language service or broadcast hours offers an immediate reduction in costs. The BBG is developing a plan to extensively review all language services and broadcast entities to determine their continued need and effectiveness.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the U.S. Information Agency's (USIA) reform and cost-cutting efforts and options that could enable USIA to adjust to reduced budgets.

What GAO Found

GAO found that: (1) USIA believes that reaching out to foreign publics and telling America's story remains critical to U.S. foreign policy goals, and agency officials believe that further significant reductions could greatly hamper USIA's mission; (2) USIA believes it has undergone an extensive reorganization and downsizing, responsive to both U.S. foreign policy priorities and needs, as well as budget constraints; (3) new fiscal realities may force USIA to make additional choices about resource priorities and eliminate certain programs or locations of activities; (4) GAO believes that USIA could take steps to further reduce its costs, while continuing to protect U.S. interests, if fiscal conditions require; (5) to sustain a major reduction, USIA may have to consider closing more posts than it presently plans in countries where USIA has determined that the United States has limited public diplomacy goals; (6) another option would be to reconfigure USIA's overseas presence, which is currently based on a structure established after World War II; (7) Congress has already scaled back funding for some exchanges, but eliminating one or more exchanges, which would require Congress' approval, is also an option to reduce costs; (8) USIA exchanges permit the U.S. government to target potential leaders overseas, and consideration should be given to the potential impact that cutting exchanges would have on bilateral relationships with foreign countries; (9) soliciting increased foreign government and private-sector support is also an option to lessen USIA's costs; (10) Congress has reduced funding for all nonmilitary international broadcasting activities and mandated their consolidation; (11) modest economies are possible by eliminating overlap among broadcasters; and (12) any substantial funding cuts, however, would require major changes to the number of language services and broadcast hours, and past experience has shown that eliminating even one language is a difficult process, requiring concurrence from a wide range of interest groups and members of Congress.