Report No.: GAO/OCG-93-26TR Date: December 1992
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Author: United States General Accounting Office
Office of the Comptroller General
Addressee: Transition Series
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CONTENTS
Foreign Affairs Issues
Adjusting to Post-Cold War Diplomacy
Addressing the Future of International Broadcasting
Correcting State Department Management Deficiencies
U.S. Participation in the United Nations
- Payment of U.S. Arrearages
- Peacekeeping Operations
- Need for Central Audit and Evaluation Authority
Improving the Effectiveness of International Narcotics Control Programs
Increasing Emphasis on Refugee Issues
Related GAO Products
Transition Series
- Economics
- Management
- Program Areas
Office of the Comptroller General
Washington, DC 20548
December 1992
The Speaker of the House of Representatives
The Majority Leader of the Senate
In response to your request, this report discusses major foreign affairs
policy, management, and program issues we have identified through our
evaluations of several key State Department and U.S. Information Agency
activities. The issues discussed in this report include (1) adjusting to
post-Cold War diplomacy, (2) addressing the future of international
broadcasting, (3) implementing management improvements, (4) improving U.S.
participation in United Nations organizations, (5) improving the effectiveness
of international narcotics control programs, and (6) improving the
administration of refugee programs.
As part of our high-risk series on program areas vulnerable to waste, fraud,
abuse, and mismanagement, we are issuing a related report, _Management of
Overseas Real Property_ (GAO/HR-93-15, Dec. 1992).
The GAO products upon which this transition series report is based are listed
at the end of the report.
We are also sending this report to the President-elect, the Republican
leadership of the Congress, the appropriate congressional committees, and the
designated heads of the appropriate agencies.
To cope with the management challenges posed by the end of the Cold War and
the demise of the Soviet Union, the Congress and the new administration need
to consider how the State Department and other foreign affairs agencies will
be able to operate more efficiently with declining resources and how these
agencies and their programs will effectively interact or coordinate their
expanding overseas activities. Traditional Cold War institutions, like the
Voice of America and Radio Free Europe, and the planned billions of dollars in
costs to operate and modernize them need reevaluation. Two other key foreign
policy issues, foreign economic assistance and security assistance, are
addressed in separate reports in this transition series, _Foreign Economic
Assistance Issues_ (GAO-93-25TR) and _National Security Issues_ (GAO-93-9TR).
In our 1988 transition series, we reported that the State Department needed to
improve its management and more effectively support activities in
international organizations, international counternarcotics programs, and
refugee relief programs. Effective policies, management, and programs directed
to these issues remain as priorities today. While there has been some progress
in addressing management problems the State Department has experienced in
managing over $8 billion of overseas real property, a continued commitment to
addressing management concerns of this and other Department programs is needed
from the Congress and the new administration. The increased volatility of a
post-Cold War world with pressing economic problems has increased the
criticality of the U.S. role with international organizations, the
international war against drugs, and the increasing tide of refugees.
ADJUSTING TO POST-COLD WAR DIPLOMACY
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With the end of the Cold War and the demise of the Soviet Union, the United
States faces a challenge in adjusting its foreign policy and diplomatic
activities to fit a new era. The biggest challenge will involve moving from a
primary concern with a monolithic threat to a more global foreign policy that
promotes broader U.S. interests. Fostering democratic institutions, especially
in the former Soviet Union and Warsaw Pact countries, and enhancing U.S.
economic competitiveness throughout the world are two examples of the emerging
agenda.
Our recent work shows that the State Department has begun the process of
expanding U.S. involvement in Eastern Europe and the former Soviet republics
by opening 14 new embassies. However, the opportunities to help that region
make the transition to market economies and democratic institutions may be
lessened by limited staff and resources.
State is beginning to focus more attention on economic issues. In 1989 and
1991, the Deputy Secretary of State called on embassies to assist U.S.
businesses in finding markets and investment opportunities. This is a new
emphasis for the Department, which in the past was reluctant to have its
officials become involved with individual businesses. To be effective in this
new role, State will have to adequately train its people and coordinate its
activities with other agencies, such as the Departments of Commerce and
Agriculture, that provide similar services. Our recent work shows that State
has increased staff and improved interagency coordination to address
international economic issues in Japan and Korea. Similar efforts will be
needed in other countries for the United States to be competitive
internationally. For further information on international trade and finance
issues, see the transition series report _International Trade Issues_
(GAO/OCG-93-11TR, Dec. 1992).
Many experts believe that fundamental organizational and operational changes
are needed at State. The Department recently drafted a report on the kinds of
changes necessary to meet the foreign affairs challenges of the 1990s. Some of
the key proposals, which seem to have merit, involve
-- merging domestic and international priorities into a single foreign policy;
-- streamlining the organization and policy process; and
-- focusing on key policy and management issues such as global programs
involving human rights, democracy, and narcotics; economic and
environmental issues; international security; and regional and
multinational affairs.
The Congress and the new administration should focus on how well the
Department is managing its resources and implementing changes in its
operations to meet the domestic and foreign policy challenges of the 1990s.
ADDRESSING THE FUTURE OF INTERNATIONAL BROADCASTING
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Technology and world events are changing the outlook for U.S. international
broadcasting. Currently costing over $500 million annually, U.S. radio
broadcasts by the Voice of America and Radio Free Europe/Radio Liberty are
seen by some in the Congress and the administration as a relic of the Cold
War. In Eastern Europe and the former Soviet Union, governments that
previously denied their own populations access to reliable news and
information have, to various degrees, allowed the liberalization of their
domestic media sources. These governments have terminated efforts to block
external broadcasts, as was done by the Soviet jamming of U.S. radio
broadcasts.
This opening to a freer flow of information has prompted calls for the
termination of broadcasts by Radio Free Europe to Eastern Europe and by Radio
Liberty to the former Soviet Union. Such a move could save the $200 million a
year spent on these radio broadcasts and the additional costs of building or
upgrading transmitters now aimed at the former Soviet Union.
A 1991 presidential task force on U.S. government international broadcasting
reported its belief that Radio Free Europe/Radio Liberty broadcasts should
continue at least through the end of the decade. We believe that even if such
broadcasts are considered to be necessary, serious consideration should be
given to eliminating the potential duplication in U.S. broadcasting
organizations and to achieving operating economies. Both the Voice of America
and Radio Free Europe/Radio Liberty have recognized that there is increasing
pressure to reduce U.S. broadcast costs. They are sharing facilities and other
resources such as audience research. Absent the elimination of Radio Free
Europe/Radio Liberty or the reduction of spending on new shortwave facilities,
such sharing appears to have the greatest near-term potential for minimizing
the costs of U.S. international broadcasts.
Currently, the Voice of America's radio broadcasts are one of the few sources
of objective news and information to the people of China, Laos, Cambodia, and
Vietnam. This situation has prompted calls for increasing U.S. broadcasts to
this part of the world. Similar demands for direct broadcasts to Cuba prompted
the establishment of Radio and TV Marti. However, these broadcasts have been
criticized for not having a means to ensure that they adhere to the Voice of
America's standards for objective coverage of news and information. While free
access to broadcasts is still an issue in these parts of the world, declining
resources still warrant careful consideration of the additional costs of
starting up a "Radio for Free Asia" as well as the cost-effectiveness of
continuing TV Marti.
Shortwave signals are the primary medium used by international radio
broadcasters. The quality of these signals is poor, and increasing competition
from higher-quality indigenous media, both television and radio, may be making
inroads on shortwave radio listening.
The traditional U.S. reliance on shortwave as an international broadcast
medium should be reviewed. The Voice of America is currently spending over
$100 million annually to upgrade and replace its aging shortwave facilities.
In 1991, the Voice of America proposed a plan to build new, and refurbish
existing, facilities at a cost of $1.5 billion. Prior modernization plans to
be accomplished from 1983 through 1991 were less than successful. Only 4 of 16
planned facilities were built or were under construction at a cost of about
$580 million. This prior experience, changing world events, and impending
technological advances in other broadcast media, such as satellite broadcasts,
raise serious questions about whether substantial investments in shortwave
types of facilities make sense.
CORRECTING STATE DEPARTMENT MANAGEMENT DEFICIENCIES
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The State Department is responsible for conducting U.S. foreign policy,
managing embassies and other real property overseas, and providing support
services to over 50 other federal agencies with overseas offices.
Appropriations totaled $3.8 billion for an estimated 22,000 positions in
fiscal year 1992. State's overseas real property is valued in excess of $8
billion. In 1988, we identified key management control weaknesses that reduce
the efficiency of State's operations and increase the agency's vulnerability
to fraud, waste, and abuse. State has taken some steps to strengthen its
management capability. Nevertheless, the following significant deficiencies
remain:
-- State's financial operations are weak and have been for many years. They
continue to be hampered by inexperienced and inadequately trained staff; to
operate with incompatible domestic and overseas systems that are unable to
meet cost, performance measurement, and other information needs; and to
fail to provide managers with necessary data on overseas real estate.
-- Personnel management problems continue to affect operations. These include
staffing gaps at embassies, inadequately trained staff in management areas
requiring specialized skills, and inadequate integration of civil service
and other personnel.
-- Although State has initiated reforms to correct long-standing management
weaknesses in overseas real property and construction programs, some
reforms will take years to implement, and continued commitment to reform is
essential. A fuller discussion on this issue is contained in our high-risk
series report.
-- Major problems continue in the Foreign Affairs Administrative Support
System, which is supposed to provide reasonably priced overseas support
services to other agencies. These problems include difficulties in
recovering costs reimbursable from other agencies, poor record-keeping and
inaccurate data, and outdated regulations and procedures.
-- Serious internal control deficiencies of cashiering operations and the
management of personal property continue, including weak oversight and
controls over consular collections and property inventories.
In a period of tight budgets and limited resources, State managers must
continue to make sustained efforts to improve the management of the agency's
global operations and to identify opportunities to optimize resources. In the
past, we have reported that in preparing its real estate plans, State should
consider the disposal of some of its overseas property. For example, the sale
of just a few high-value properties could generate billions of dollars that
could be used to offset the cost of future property acquisitions around the
world.
U.S. PARTICIPATION IN THE UNITED NATIONS
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Until recently, the United States viewed the United Nations as an
inefficiently managed organization that could not act decisively on matters of
international importance. To prompt the United Nations to fulfill its mission
more effectively, the United States withheld a portion of its assessed
contribution--nearly $292 million as of August 1992--throughout the 1980s.
The United Nations has begun a number of management reforms, and in February
1992, the Secretary-General announced a major restructuring of the Secretariat
to improve the efficiency of administrative and financial functions.
Management reforms are continuing, and although these actions are encouraging,
it is too soon to assess their success.
More important than the management reforms, the emergence of an era of
cooperation among former Cold War adversaries has created an historic
opportunity for the United Nations to fulfill its primary mission of
maintaining international peace and security. However, fulfillment of this
mission carries a high price tag at a time of severely constrained national
budgets. The Secretary-General noted that the convergence of these events has
created a serious financial crisis at the United Nations. As of October 1992,
only 18 member countries had paid their assessments in full. The remaining
owed about $1.2 billion--more than $550 million for the regular budget and
$605 million for peacekeeping operations.
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PAYMENT OF U.S. ARREARAGES
In September 1988, the administration announced that it would seek full
funding for its assessed contributions to the United Nations and explore the
feasibility of paying U.S. assessments in arrears. In our November 1988
transition series report, we noted that the Department of State needed to
develop, in partnership with the Congress, a clear program that would
institutionalize the management improvements achieved from its withholdings
and allocate arrearage payments to specific useful purposes. The amounts owed
were originally assessed primarily for activities that were budgeted and
programmed for in prior fiscal years. U.S. officials said that, in principal,
the money was no longer needed if those activities were rescheduled in later
fiscal years because they would be included in the more recent budgets. Thus,
it was important that any arrearage payments be made in a way that would avoid
unplanned cost growth.
The United States planned to pay its arrearages over a 5-year period starting
in fiscal year 1991, disbursing about 20 percent of the total arrearages each
year through fiscal year 1995. [ Footnote 1: The United States does not plan
to pay about $89 million in arrearages that represent its contribution for
activities the Congress and the executive branch do not approve of. These
activities include programs benefiting the Palestine Liberation Organization
and the South West Africa People's Liberation Organization; construction of a
conference center in Addis Ababa, Ethiopia; cost-of-living increases for
United Nations employees in New York; and alleged kickbacks from some United
Nations employees to their home governments. ] According to the Department of
State, $115.6 million was paid in 1992 for assessments made prior to December
31, 1991--$40.6 million for the regular budget and $75 million for
peacekeeping accounts--and about $44 million was proposed for arrearage
payments for 1993.
Since 1948, the United Nations has established 25 peacekeeping operations,
including 8 that were established during 1991 and 1992. Through 1991, the
total cost of these operations was about $8.3 billion. However, the cost of
peacekeeping operations has grown dramatically, particularly since the advent
of peacekeeping missions to Yugoslavia (estimated to cost $293 million through
February 1993), Cambodia (estimated to cost $1.6 billion through July 1993),
and Somalia (estimated to cost $124 million through April 1993, not including
Department of Defense costs for Operation Restore Hope).
Since 1973, nearly all peacekeeping operations have been funded by a special
scale of assessments whereby the United States pays 30.4 percent of total
costs. With the growing number and cost of peacekeeping operations, this
assessment scale places a significant financial burden on the United States at
a time when other countries may have a greater capacity to share in
peacekeeping costs. Accordingly, we recommended that State seek a
reexamination of the United Nations' special assessment scale for peacekeeping
operations.
The United Nations' financial oversight of peacekeeping operations could be
strengthened. The United Nations' Board of Auditors has been requested to
expand its coverage of peacekeeping operations, and beginning in 1992 the
Board will provide separate reports on its peacekeeping reviews. In addition,
concerns have been raised about the adequacy of the General Assembly's budget
reviews and the lack of information available to member countries on internal
audits of peacekeeping operations. Finally, the Department of State has not
monitored peacekeeping operations in the field to ensure that they are
functioning efficiently and thus minimizing the cost to the U.S. government.
During our visits to peacekeeping missions, we saw indications of duplicate
peacekeeping roles and overstaffing and potential opportunities to reduce
costs and improve efficiency.
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NEED FOR CENTRAL AUDIT AND EVALUATION AUTHORITY
The United Nations' internal and external audit and evaluation structures do
not ensure program accountability or provide member states with adequate
oversight of the United Nations' finances and operations. The United Nations
has improved its audit and evaluation standards and procedures, but
significant problems remain. These include
-- fragmented audit and evaluation functions that at times either duplicate
efforts or produce gaps in coverage;
-- internal audit and evaluation units that lack independence;
-- external audit and evaluation mechanisms that are not fully effective
because of frequent staff turnover and an inability to routinely perform
systems-based audits;
-- internal control mechanisms that are inadequate; and
-- weak reporting and follow-up systems.
If the existing internal and external audit and evaluation structures were
centralized under an independent, central audit and evaluation authority, the
United Nations could resolve many of these problems. This suggestion is not
new. It was proposed over 30 years ago by a former Secretary-General, in 1979
by Canadian consultants to the Auditor General of Canada, throughout the 1970s
and 1980s by us, and in 1991 by the U.S. permanent representative to the
United Nations.
As envisioned, a central audit and evaluation authority would be responsible
for conducting and supervising audits, evaluations, inspections, and
investigations. The office would (1) promote the implementation of the common
auditing standards adopted by the International Organization of Supreme Audit
Institutions and internal control standards throughout the United Nations, (2)
strengthen follow-up mechanisms to ensure responsiveness to recommendations in
audits and evaluations, and (3) prescribe standardized accounting principles
and standards and ensure that United Nations' bodies use them.
IMPROVING THE EFFECTIVENESS OF INTERNATIONAL NARCOTICS CONTROL PROGRAMS
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Since the adoption of a national drug strategy in 1989, which included a key
goal of stopping illegal drugs from entering the country, the U.S. government
has greatly expanded its overseas counternarcotics programs to cut drug
production in, and shipment from, source countries. The expanded programs have
not yet shown that they can slow the production of drugs and the flow of them
to the United States. Many obstacles to effective overseas counternarcotics
programs, such as insufficient source country cooperation and capabilities,
cannot be easily overcome, and experts acknowledge that, at best, progress in
the overseas drug war will take many years. Nevertheless, our reviews indicate
that more can be done to improve the management and accountability of the U.S.
programs.
The State Department has the lead responsibility for directing the U.S.
overseas counternarcotics programs. The international portion of the U.S.
National Drug Control Program budget has grown from $209 million in 1988 to
about $768 million for fiscal year 1993. State's fiscal year 1992 program of
narcotics-related aid totaled $171 million. State, particularly in South
America, has challenges not only in effectively managing its programs, but in
coordinating regional and country programs with (1) the international
intelligence-gathering, technical assistance, and law enforcement activities
of the Drug Enforcement Administration; (2) security assistance provided by
the Defense Department to foreign military and law enforcement agencies and
its drug shipment monitoring and detection activities; and (3) the economic
development assistance programs of the Agency for International Development
and other international entities.
The Department must improve its management of activities that support both
State's and other agencies' overseas counternarcotics activities. We and
State's Inspector General have reported numerous problems with overseas
programs, including inadequate policy implementation; reliance on
unqualified/untrained staff and other resource management weaknesses; unclear
functional responsibilities; and inadequate procurement, budgeting,
accounting, and evaluation practices. The State Department has taken some
steps to correct these deficiencies, and some of the overall general
management improvements for State we have discussed earlier in this report
will also improve program management for the agency's counternarcotics
responsibilities. However, our ongoing work indicates that serious problems
remain.
The Congress and the new administration, as they consider the future U.S. drug
control strategy and the national security objective of preventing unchecked
narcotics dealers from destabilizing other nations' governments, will have to
determine the appropriate levels of U.S. resources to be allocated to direct
U.S. international counternarcotics efforts and to coordinate with other
foreign governments. The steps needed to streamline State's counternarcotics
programming and management system--designing and using better review and
evaluation procedures and promoting more international cooperation and
support--will require a long-term commitment to be successfully implemented.
INCREASING EMPHASIS ON REFUGEE ISSUES
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In the last 4 years, refugee populations have increased (from 13 million to 17
million), and their plight has worsened. Violent and dangerous events
throughout the world continue to force people from their homelands, creating
an insistent demand for international actions to provide relief and safety for
these refugees. Even when temporary refuge is obtained, the world is faced
with millions of displaced people needing support in temporary camps, and when
some resolution of the homeland crisis is reached, continuing conflicts have
delayed the refugees' repatriation.
While the worldwide refugee problem will require coordinated international
efforts from the public and private sectors, the United States has, and will
continue to have, a major role to play in the international refugee relief
programs. The U.S. Refugee Coordinator (who is responsible for coordinating
U.S. policy and programs for refugees), the State Department, and other
agencies dealing with refugee problems will be faced with the question of the
extent to which the United States should place more emphasis on forging
international solutions. For example, the new administration and the Congress
will have to consider the levels of U.S. diplomatic efforts and support needed
to facilitate and coordinate international and/or direct U.S. efforts to deal
with emerging refugee crises and repatriations.
The United States also has policies and programs to (1) determine the numbers
of refugees allowed annually to resettle in the United States, (2) verify
their refugee status, and (3) cover some of their transportation and
resettlement costs. The number of refugees entering the United States has
increased from 107,000 in fiscal year 1989 to an estimated 131,000 in fiscal
year 1992, but federal funding for the resettlement costs has not kept pace.
Although the Immigration and Nationality Act, as amended, authorizes the
federal government to pay for 100 percent of eligible refugees' needs for up
to 36 months, subject to available appropriations, assistance has been reduced
to cover needs for 12 months because of federal budget constraints. As a
result, a significant proportion of the refugee assistance burden has shifted
to state and local governments. These governments are complaining about this
additional burden on their already strained social welfare and assistance
programs.
Changes after the end of the Cold War may also require the United States to
review how its allocation of the numbers of refugees from different regions of
the world is determined. U.S. legislation and presidential executive orders
have afforded special consideration to prospective refugees from the former
Soviet Union and Vietnam, contributing to their large proportion of
admissions--about 83 percent of all admissions into the United States over the
last 4 years. The prospect for continual pressure to accept refugees from
other parts of the world means that the administration and the Congress will
have to reconsider both the financial impacts of increasing admissions on the
states and the apportioning of numbers of admissions to different refugee
populations.
