Audit of Department of State Procedures To Establish Program Fees for the Furniture and Appliance Pool Program

AUD-FM-23-22
    Report Contents
    Unclassified
    Unclassified

    What OIG Audited
    The Department of State (Department) administers the Furniture and Appliance Pool (FAP) program to consolidate the purchase, replacement, refurbishment, maintenance, inventory control, warehousing, pick-up, delivery, and disposal of non-expendable residential furniture, furnishings, appliances, and equipment (FFA&E) at overseas posts.

    The Office of Inspector General (OIG) conducted this audit to determine whether the Department established fees for participation in the FAP program in accordance with Department policies and procedures. OIG performed detailed testing at four overseas posts: U.S. Embassy Bujumbura, Burundi; U.S. Embassy Rangoon, Burma; U.S. Embassy Stockholm, Sweden; and U.S. Embassy Georgetown, Guyana.

    What OIG Recommends
    OIG made 11 recommendations to improve the FAP program. On the basis of the Department’s responses to a draft of this report, OIG considers all 11 recommendations resolved, pending further action. A synopsis of management’s response to the recommendations offered and OIG’s reply follow each recommendation in the Audit Results section of this report. Responses received from the Bureau of the Comptroller and Global Financial Services and the Bureau of Administration are included in their entirety in Appendices B and C, respectively.

    What OIG Found
    The Department did not always establish FAP program participation fees in accordance with policies and procedures. Specifically, the selected posts did not always maintain and use reliable FAP inventory and financial data to (1) calculate FAP fees, (2) capture costs for a complete and accurate listing of authorized FFA&E within FAP fee calculations, or (3) manage FAP assets in accordance with Department policies and procedures. These deficiencies impacted FAP fee determinations. In addition, the Department did not always maintain FAP fee calculation documentation to support efforts to reassess fee determinations and make changes to FAP fee amounts.

    The deficiencies identified occurred for various reasons that require attention. For example, the Department did not have sufficient oversight, training, guidance, or Integrated Logistics Management System (ILMS) controls in place to ensure posts complied with FAP data requirements. In addition, selected posts did not capture appropriate FFA&E costs because personnel did not reconcile the calculations with the posts’ FAP program policies or did not ensure the posts’ FAP program policies were updated and consistent with Department policies and procedures. Furthermore, the Department did not have sufficient guidance to ensure personnel knew how and where to retain this documentation.

    Without quality FAP data, proper FAP asset management practices, and key FAP documentation, Department personnel cannot reliably or effectively determine current and future FAP program financial needs. The lack of information on FAP program needs also hinders posts’ ability to establish FAP fees that will provide the appropriate level of funding to cover costs without accumulating excess funds.

     

     

    Recommendation Number
    1
    Open Resolved

    OIG recommends that the Bureau of Administration develop and implement a process to improve oversight of posts’ Furniture and Appliance Pool program management activities. The process should include oversight controls that address Furniture and Appliance Pool data issues.

    Recommendation Number
    2
    Open Resolved

    OIG recommends that the Bureau of Administration, in coordination with the Bureau of the Comptroller and Global Financial Services, develop and implement oversight controls to prevent overseas posts from maintaining Furniture and Appliance Pool program assets in ineligible locations. The oversight controls should include a plan of action to consult with the Bureau of Overseas Buildings Operations when necessary.

    Recommendation Number
    3
    Open Resolved

    OIG recommends that the Bureau of Administration, in coordination with the Bureau of the Comptroller and Global Financial Services and the Foreign Service Institute, enhance current Furniture and Appliance Pool program training to provide detailed guidance on asset classification; asset lifecycles; asset replacement dates; spending plans; furniture and appliance pool eligible and ineligible assets; maintenance of the furniture, furnishings, appliances, and equipment listing; and data, asset, and financial management.

    Recommendation Number
    4
    Open Resolved

    OIG recommends that the Bureau of Administration, in coordination with the Bureau of the Comptroller and Global Financial Services and the Foreign Service Institute, annually disseminate information to all personnel with Furniture and Appliance Pool program responsibilities at overseas posts regarding the availability of and expectation to complete furniture and appliance pool-specific training developed in response to Recommendation 3.

    Recommendation Number
    5
    Open Resolved

    OIG recommends that the Bureau of Administration, in coordination with the Bureau of the Comptroller and Global Financial Services, reevaluate existing policy requirements for furniture and appliance pool asset lifecycles and update policies and procedures with clarifying language related to adjusting furniture and appliance pool asset lifecycles from the standards specified.

    Recommendation Number
    6
    Open Resolved

    OIG recommends that the Bureau of Administration, in coordination with the Bureau of the Comptroller and Global Financial Services, develop and disseminate guidance that instructs overseas posts to periodically review and update the furniture, furnishings, appliances, and equipment listing in posts’ Furniture and Appliance Pool program policies.

    Recommendation Number
    7
    Open Resolved

    OIG recommends that the Bureau of the Comptroller and Global Financial Services revise Furniture and Appliance Pool (FAP) program policy to clarify the requirement for overseas posts to maintain multi-year FAP program spending plans.

    Recommendation Number
    8
    Open Resolved

    OIG recommends that the Bureau of the Comptroller and Global Financial Services update policies and procedures for retaining overseas posts’ Furniture and Appliance Pool program fee-related records so the information is readily available and accessible upon request for a period of time specified in the guidance.

    Recommendation Number
    9
    Open Resolved

    OIG recommends that the Bureau of Administration develop and implement controls within the Integrated Logistics Management System that require the use of mandated, minimum replacement standards for furniture and appliance pool asset lifecycles.

    Recommendation Number
    10
    Open Resolved

    OIG recommends that the Bureau of Administration implement controls within the Integrated Logistics Management System that ensure periodic updates to the replacement dates for furniture and appliance pool assets.

    Recommendation Number
    11
    Open Resolved

    OIG recommends that the Bureau of the Comptroller and Global Financial Services develop and annually distribute to overseas posts guidance related to reconciling Furniture and Appliance Pool (FAP) program fee calculation worksheets to the furniture, furnishings, appliances, and equipment listings in posts’ FAP program policies and to the Foreign Affairs Handbook prior to submitting requests to change FAP program fees.