U.S. Department of State Fiscal Year 2020 Agency Financial Report

It is worth noting that one of the most significant challenges facing the Department has been and will continue to be the global outbreak of COVID-19. Although OIG has not yet completed any work specific to the pandemic, we anticipate that much of OIG’s future work will focus on evaluating the impact of the pandemic on the Department’s people, programs, and operations. In so doing, OIG looks forward to assisting the Department in its efforts to improve the efficiency and effectiveness of its programs and operations. E xecutive S ummary Each of the management challenges described in this report have an effect on the Department’s ability to perform its mission and to safeguard taxpayer resources while doing so. As such, each challenge independently warrants ongoing attention. It is equally important for the Department to consider how all of the challenges listed interact and how it can address them systemically. We continue to be committed to assisting the Department as it strives to improve the effectiveness of its programs and operations. Protection of People and Facilities With natural disasters, environmental hazards, crime, conflict, and humanitarian crises posing a risk to the health and safety of Department personnel and the security of Department property overseas, protecting people and facilities continues to be a top management challenge. OIG also found that the Department’s efforts to construct and maintain safe and secure diplomatic facilities have been impacted by construction delays and design flaws due in part to contract management deficiencies that resulted in significant financial costs and security implications for the Department. OIG’s work has also found deficiencies in residential security, the operation of official vehicles, and emergency preparedness that put Department personnel and their families at risk. For instance, we found that Department personnel continue to occupy residences abroad that do not meet Department safety standards and several overseas posts have failed to keep up with post-specific emergency planning. Management and Oversight of Contracts, Grants, and Foreign Assistance Department entities domestically and abroad did not consistently and adequately monitor contractor performance, conduct thorough invoice reviews, and oversee grants and foreign assistance programs. A growing body of OIG work also illustrates the difficulty the Department faces in managing large, long-term construction contracts, particularly in contingency environments. These issues directly affect the protection of people and facilities and present unique challenges in the realm of workforce management. Inexperienced and untrained personnel charged with oversight lead to problems with monitoring and ensuring compliance with requirements, as well as with the routine review and approval of expenditures. Finally, OIG’s work highlights inadequate Contracting Officer’s Representative technical knowledge that continues to result in issues with contract oversight. Information Security and Management OIG has acknowledged steps the Department has taken to improve its information security program; however, challenges persist. For example, we found that numerous control weaknesses affected program effectiveness and increased the chance of cyberattacks and threats to the Department. Also, pervasive Information Systems Security Officer concerns that were first identified in 2017 still exist today. The failure to record information system audits, complete account reviews, or monitor the dedicated internet network can leave the Department vulnerable to potential unauthorized access and malicious activity. Issues with developing, testing, and training on contingency plans also affects the challenge of protecting the Department’s staff and facilities. Financial and Property Management Internal control deficiencies identified in an independent audit negatively affected the Department’s ability to account for real and personal property in a complete, accurate, and timely manner. Inadequate acquisition planning; improper warehouse, inventory, and property transfer controls; and mismanagement of bulk fuel and the Department’s motor 116 | U ni ted S tates D epartment of S tate 2020 A gency F inanci al R eport OTHER INFORMATION | INSPECTOR GENERAL’S STATEMENT ON THE DEPARTMENT’S MAJOR MANAGEMENT AND PERFORMANCE CHALLENGES