Overview:
China is the world's most populous country. It has a continuous culture stretching back nearly 4,000 years and originated many of the foundations of the modern world. The People's Republic of China was founded in 1949 after the Communist Party defeated the nationalist Kuomintang, who retreated to Taiwan, creating two rival Chinese states - the People's Republic on the mainland and the Republic of China based on Taiwan. After stagnating for decades under the rigid totalitarian socialism of founder Mao Zedong, China reformed its economy along partly capitalist lines to make it one of the world's fastest-growing, as well its leading exporter. China is now a major overseas investor and is pursuing an increasingly assertive foreign and defense policy. But economic change has not been matched by political reform, and the Communist Party retains a tight grip on political life and much of wider society. Xi Jinping came to power in 2012-3 as the hand-picked heir of predecessor Hu Jintao and is expected to lead China for the next decade. Since taking over, he has concentrated power in his hands, in a move seen as a turning away from the traditional system of collective leadership and has sought to present a modern face to China and the world. His position as the most powerful Chinese leader since Mao Zedong was cemented in 2017 when his name and political philosophy was written into the Communist Party constitution by the National Congress. In early 2018 the party also moved to allow him to remain in office indefinitely by abolishing the conventional two-term presidential limit. The main themes of his leadership have been economic reform to boost market forces, as well as an anti-corruption campaign. Xi rejects Western ideas of constitutional democracy and human rights as models for China, and his government moved to silence voices critical of one-party rule, especially on social media.
Source: BBC Country Profile
OIG Team:
In addition to inspecting embassy Beijing, the team was also inspecting the U.S. Consulate in Hong Kong. Douglas A. Hartwick was the Team Leader and Lisa Piascik, Deputy Team
Leader following on the the inspection of Islamabad. Richard Behrend (POL), Paul Cantrell (CONS), Robert David (SY), Martha Fikru (IT), Todd Fontaine (SY), Thomas Furey (CONS), Daniel Gershator (PA), Hanane Grini (MGMT), Sarah Hall (MGMT), Paul Houge (PA), Richard Kaminski (ECON) Tanya Manglona (IT) James Norton (IT) John Philibin (Deputy) Charles Rowcliffe (SY). I spent the week of March 30 at the OIG office in Rosslyn, Virginia for consultations with Department staff and for team meetings. Upon return the following week I volunteered at the Volvo Car Open Tennis Tournament , an annual WTA event held on Daniel Island. Sarah Hall, lead management inspector, was in Athens the same time as me but I never met her. She was part of a tandem, her husband being a POL or ECON officer, she had taken an extended maternity leave. Not all team members, including myself, went on to Hong Kong, which was fine with me. Doris and I ended up spending a week in Bangkok after leaving Beijing in route back to the states.
We all initially stayed at the Marriott but, after a few weeks. several team members moved over to the Four Seasons while Doris, who arrived May 13, and we moved to the Hilton. All were within easy walking distance to the embassy. The Chinese government was holding a Belt and Road conference while we were there so the hotel was crowded with visitors from mostly developing countries.
During the inspection OIG rolled out the new TeamTec software program to submit our individual Time and Attendance (T&A) which took getting used to since we had to allocate our hours between the inspection/s we were working on and other hours for administration and training. This was also the time when OIG established its own OIGNet so we were separated from the Department of State network. We still maintained our Department email address and accessed OpenNet but we had our own OIGNet address and internal network.
American Embassy Beijing:
The inspection took place in Beijing between April 19 to May 22, 2017. In the absence of an ambassador, the Chargé d’Affaires was David Rank and the Acting Deputy
Chief of Mission was Julie L. Kavanagh. The acting Management Counselor was James Forbes. The Regional Security Officer was Gregary Levin who I served with in Amman during his first tour as Site Security Manager for the construction of the new embassy compound back in 1987. Greg had done quite well rising to Senior Foreign Service. Greg retired and is now back as a Retired Annuitant (REA) working with DS/International Programs in D.C. The FMO was Bob Wert, an old-time experienced FMO, who stood about 6'7" and had been around forever. He ended up in Paris for his last tour. Bob had a deputy, Mark Turner, who was actually a management generalist who is now S/GSO in Mexico City. The assistant or number two FMO was Phil Cunliffe who is now FMO in Tbilisi. The FMO had three LE Staff Certifying Officers given the volume of work. Steve Carroll, who I had met in 2007 when he was an A/FMO in Beijing, was back as an assistant HRO. Coincidentally, I had left my packet of DVDs, of mostly WWII videos, in the hotel and thanks to Steve he was able to recover them and forward them on to me via APO. Steve ended up retiring to Tampa, Florida and is now a Retired Employed Annuitant (REA) and was most recently on a TDY to Bujumbura. Another former connection with an FMO colleague, Don Simmons, was meeting his daughter-in-law Monica who was an Assistant HRO in Beijing and is now working with Global Talent Management (GTM)/EX. I never understood why the Department changed HR to GTM. Jeff Scarce, who I inspected in Islamabad, is now the FMO in Beijing.
In addition to the embassy there were Consulates in Shanghai, Guangzhou, Chengdu, Shenyang and Wuhan. The inspectors split up into functional specific teams to cover each of the Consulates. I ended up only going to Shanghai for three days (May 1-3) which was fine with me to at least get a chance to get out of Beijing.
Findings:
The OIG report cited a challenging work environment
for management operations. Upgrades to
facilities included a $20 million lease fit-out at Consulate General Shanghai,
a $17 million expansion at Consulate General (CG) Shenyang, and a new $29
million office space for Consulate General Wuhan. CG Chengdu was working on an electrical upgrade
and CG Guangzhou building faced ongoing structural challenges since 2013. Embassy
Beijing supported an on-compound $17 million renovation project. The
Chinese Government’s limitations on incoming shipments and restrictive policies
on taxes and tariffs made these facility-based challenges more complex. The Facilities Manager did
not conduct residential seismic surveys as required in high-seismic areas, such
as Beijing, which require seismic assessments using an approved structural
engineer. It was also recommended that all designated
post occupational safety and health officers receive required training. There was also the ocntinual peoblem of air pollution and the need for air quality management.
In the General Services Office (GSO) there were
examples of non-rental costs, some personal, being paid by the wrong
appropriation. These included the cost
of condo fees, service charges, maintenance of common spaces, property taxes
and even personal services. These costs were referred to Building Operating
Expenses (BOE) and should be paid separately from rent. It was estimated that as much as 50% of the
rental cost was BOE. OIG recommended that
the embassy and respective CGs separate the accounting charges between base
rent and non-rent costs between OBO, the bureaus, and agencies. Also, any personal services provided to employees
like shuttle, maid services, telephone or internet should be paid by the
employee. It was amazing some of the perks received by employees at no cost.
The embassy had $4.9 million in funds for furnishings
and appliances plus another $1.7 million to be collected from agencies in but
there was only $880,000 in assets due for replacement. Regulations required that the GSO conduct an
annual assessment of the furniture and appliance pool program, including
replacement cycle and spending plan.
In CG Shenyang the contracting officer processed $1.4
Million in contracts from 2015 through April 2017 without a contracting warrant
resulting in unauthorized commitments. This
resulted in unauthorized commitments totaling $1.4 million during that period.
Although the Bureau of Administration’s Office of the Procurement Executive
informed the contracting officer of this issue in June 2015, the officer did
not address the deficiency until February 2017.
OIG found that some Contracting Officer’s Representatives failed to
adequately perform their duties while others did not receive the required
training. We recommended the embassy require all contracting officer
representatives and government technical monitors be properly trained and
administer their contracts in accordance with Department standards.
There were issues with security and access controls at
the embassy offsite warehouse that needed to be addressed. Lastly, not all of the embassy motor pool drivers
were properly trained and medically cleared drivers to operate official vehicles.
The Department’s hiring-freeze caused gaps in staffing
at the embassy and especially the Consulates, particularly in management positions
typically held by eligible family members (EFM). Security clearances took for ever as 17 EFMs were pending and seven were pending classification. OIG found inconsistent Embassy Human Resources (HR) support for
Consulates General. None of the
consulates general had U.S. direct hire human resources officers, and instead
depended on the embassy’s four human resources officers for support. I know from my experience in Shanghai that an EFM was sorely needed in the HR office to oversee that operation. Also, the embassy did not have a documented
agreement describing its human resources responsibilities for the consulates
general, including support visits. OIG recommended that the embassy implement
procedures outlining the human resource support services provided and the
frequency of visits at each of the five constituent posts. CG Wuhan did not base its cost of living
allowance on Wuhan but Beijing and also their Post Differential on the rate
used by CG Shenyang. Justifications for Consumable Allowances for CG Chengdu
and Wuhan had not been submitted every two year as required. OIG questioned if the consumables allowance
was even still justified.
In the area of financial management OIG found that the
Embassy and CGs paid Official Residence staff their monthly salaries
directly through electronic fund transfer as opposed to the Ambassador, DCM or
Principal Officer paying directly as personal staff.
Unliquidated obligations (ULOs) included $497,000 in
the FY 2012 International Cooperative Administrative Support Services (ICASS)
allotment; $45,093 in FY 2012-13 diplomatic and consular program allotments for
secure procurement of computer equipment and accessories; and $39,541 in public
diplomacy grant funding. The embassy ended up de-obligating $581,634 so that the
funds could be put to better use.
Supervisors of sub cashiers at Consulates in Chengdu and
Shenyang failed to conduct required Quarterly Unannounced Cash Verifications as
required. Embassy Beijing issued a
management instruction stressing the importance of supervisor cash verifications
as an important internal control.
Highlights:
See our blog of photos from our visit.
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| Chaoyang District |
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| Paul and I enjoyed a brew at the Great Leap Brewery |
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| Hiking the Great Wall at Gubeikou |
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On the train to Xian with John Philibin
and Tom Furey
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| Terra Cotta Warriors of Xian |
