Agencies say GAO overlooked key issues in embassy construction audit

Program would assess fees to departments using space abroad, but complaints say agencies would have no say in embassy building.

A new Government Accountability Office report on a State Department-designed plan to spread the cost of new embassy construction to other agencies with personnel overseas has sparked harsh criticism by several of the affected agencies. In letters to GAO, representatives from the Agriculture, Commerce, Health and Human Services, Homeland Security, and Justice departments, as well as the Library of Congress, said that the report posed too few critical questions of State's plan and the impact it would have on the agencies' missions.

The report (GAO-05-32) does not make recommendations on State's proposal to create the Capital Security Cost-Sharing Program, but accepts State's view that the program would accelerates much-needed embassy construction, while encouraging agencies to "right-size" their overseas staffing levels.

The Office of Management Budget believes this right-sizing process could generate substantial cost-savings since agencies spend as much as $650,000 a year to keep an employee overseas. At the same time, State Department officials say that they often budget for more workspace than is needed because agencies overestimate their space needs.

The program would impose fees on agencies based on how many staffers they send to embassies abroad. But the agencies complained that they would have no oversight over the embassy construction they'd be paying for. Otto Wolff, chief financial officer for the Commerce Department, noted in his letter to GAO that Commerce would not have any input into which embassies would be built, the order in which they'd be constructed, and what space Commerce employees would occupy within them.

At the same time, the agencies noted that if congressional appropriations did not cover the cost of agency contributions, the program would drain money from the worthwhile initiatives that they oversee. "The term 'rightsizing' implies that agencies have assigned wrong or unnecessarily large numbers of employees overseas," wrote Library of Congress Chief Financial Officer John Webster. But in reality, Webster wrote, "the number of Library staff overseas cannot be reduced without damaging the mission of our offices."

The State Department, by contrast, argues that all agencies using overseas embassies should help pay for them, and that the program is necessary because many embassies are overcrowded, antiquated, and do not meet current safety standards. Congressional appropriators are considering legislation that would authorize the plan for launch next year.

The impetus for the program was the 1998 terrorist bombings of U.S. embassies in Kenya and Tanzania that killed more than 200 people and wounded more than 4,000. The goal since then has been to move federal employees overseas "from really substandard space into facilities appropriate for the diplomatic and consular work of the 21st century…There is a clear and present danger, and this [cost-sharing] is the program to fix it," said Terrence Wilmer, an official in State's Overseas Buildings Operations division.

Without cost-sharing, State estimates it will take 26 years to complete the 150 facilities slated for replacement; with the program, it will take 14. About 60,000 federal employees from 28 agencies work overseas in U.S. embassies and consulates.

Agencies do shoulder much of the burden for deploying personnel abroad. They pay for the cost of housing and travel, for example, and split with the State Department the costs associated with embassy utilities, maintenance and support staff. They have not, in the past, paid for new construction.

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