U.S. Department of State Fiscal Year 2019 Agency Financial Report

Air services became significantly underused. Ultimately, our audit concluded that when the Department set ticket fees, it did not use a documented methodology for doing so. Moreover, there was a lack of routine review and adjustment to align the frequency of Embassy Air flights and the number of aircraft in-country with demand. As a result, the Department continued to pay the significant costs associated with underused aviation operations over the course of several years. Embassy Bogota also serves as an example of such shortcomings. During our inspection, we learned of a persistent shortfall in nonimmigrant visa application fees since at least 2014. The shortfall was determined to be approximately $1.6 million, and, according to the Bureau of Consular Affairs, Embassy Bogota is the only mission in the world with a shortfall. Despite an expert review of the issue, the bureau could not determine its cause, and we recommended a review of fee collections and reconciliations to identify the cause and correct the issue. 58  5  O perating in C ontingency and C ritical E nvironments Programs and posts operating in contingency and critical environments must adapt to constant change, pervasive security concerns, dramatic swings in personnel and funding, and widespread reliance on contractors and grantees. In addition to the overall challenge of protecting its people and facilities, the Department faces a much more specific challenge in managing contracts and foreign assistance programs in these locations. We found the Department needs a process to prioritize and expedite procurement related to urgent physical security construction projects at high-threat posts. Our reports on construction projects at Embassy Kabul, Afghanistan, offer several illustrative examples. At the outset of 58 ISP-I-19-14, April 2019. 59 OIG, Management Assistance Report: Noncompliance with Federal and Department Procurement Policy at U.S. Embassy Kabul, Afghanistan, Needs Attention (AUD-MERO-19-25, April 2019). 60 ESP-19-04, July 2019. 61 AUD-MERO-19-19, April 2019. construction projects in this location, the Department has experienced acquisition delays for physical security upgrades because of the absence of an adequate contract mechanism for procuring construction services. Specifically, we recommended Embassy Kabul establish a procurement mechanism such as an indefinite delivery, indefinite quantity contract. This is a type of contract that could improve security vetting and streamline the acquisition process by awarding task orders among preselected contractors. 59 Indeed, the need to start work quickly was a factor in the Department’s decision to have the Bureau of Diplomatic Security manage the Camp Eggers project, a large- scale construction contract in Afghanistan. As noted previously, despite a lack of construction experience on the part of DS and the contractor, a sense of urgency led the Department to move forward with a project that ultimately cost more than $100 million and resulted in no discernible benefit. 60 Contingency environments also affect Department operations in the area of invoice review. We found that the type of contract used was one factor that prolonged invoice review in bureaus that relied on contracted support to conduct their missions in Iraq and Afghanistan. Specifically, to account for price volatility in unstable environments, the Department is more likely to use cost-reimbursable contracts in contingency environments as opposed to firm-fixed- price contracts. We found these contracts result in complex and lengthy invoices, which had a significant effect on the workload of reviewers and increased the risk of error or delay in the process. 61 More generally, in our inspection of Mission Somalia, we found that the country’s restrictive operating environment, dual locations in Nairobi and Mogadishu, and difficulties in staffing the mission impeded diplomatic activities, foreign assistance management, and internal controls. We made recommendations targeting these specific issues, and we also noted that, despite security constraints, the mission conducted useful reporting and media outreach. 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 121 INSPECTOR GENERAL’S STATEMENT ON THE DEPARTMENT’S MAJOR MANAGEMENT AND PERFORMANCE CHALLENGES | OTHER INFORMATION