I am pleased to present the Office of Inspector General's (OIG) FY 2005 Performance Report. OIG's results for the past year—both quantitatively and qualitatively—are among the best OIG has ever achieved, despite the daunting challenge of meeting exponentially increasing demands for our expertise and oversight within the continuing constraints of limited resources and rapidly rising costs. During the past year, OIG has provided significant value and a substantial return on investment in terms of cost savings to the government and in improvements to the effectiveness, efficiency, economy, and integrity of Department of State (Department) and Broadcasting Board of Governors (BBG) operations and the safety, quality of life, and accountability of their personnel.

Since taking up my responsibilities as Inspector General in May 2005, I have been impressed by the scope of OIG's oversight mandate and the opportunity it offers to make a positive impact in strengthening the management of the Department and the BBG. OIG was created to prevent and detect waste, fraud, abuse, and mismanagement, and to support the Department and BBG in achieving their missions. We do this primarily through audits, inspections, and investigations that provide independent, objective, and professional assessments of their operations and activities and recommend ways to strengthen and improve them. Our focus is on issuing reports, not report cards, that help the Department and BBG work better. As appropriate, we also provide consultative services and participate in committees, task forces, training, and other efforts to prevent problems and vulnerabilities from occurring, rather than just identifying ways to fix them as they are detected.

As shown in the pages that follow, FY 2005 was a very successful and cost-effective year for OIG, in part because of a supplemental appropriation that enabled OIG to perform valuable services related to Iraq. We met or exceeded 68% of our performance targets, the highest percentage achieved in our seven-year history of performance reporting. We issued almost 150 audit and inspection reports. More important—and of even greater benefit to the government and the public—were the outcomes resulting from our work, which included:

• Actual recoveries and savings of almost $8.6 million and identified potential savings of $29 million more in questioned costs and funds put to better use;
• The Secretary's merger and reorganization of the Bureaus of Arms Control and Nonproliferation, and changes to the Bureau of Verification and Compliance;
• The Interagency Assessment of the Iraq Police Training Program;
• The resignation of the commissioner of a U.S. Commission following a critical OIG inspection; and
• Establishment, in coordination with other Department bureaus, of an initiative to strengthen border security by targeting individuals using identity theft to obtain U.S. passports.

Although we are proud of our results, we recognize the opportunity and the need for improvement, as well as the significant resource constraints we face. These results represent not only accomplishments of the past year, but a benchmark to build upon. We continue to review and reengineer our organization and internal processes as we strive to become more effective and efficient and to improve the services that we provide. We remain committed and confident that, through continued management innovation, the dedication and professionalism of our employees, and adequate investment by the administration and Congress, we will continue to expand our results and the benefits they provide to the Department, the BBG, the Congress, and the American people.

Howard J. Krongard    Inspector General

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