GAO says State Department’s overseas housing standards outdated, risking overspend

GAO’s latest review criticizes the State Department for relying on housing standards based on the Washington, D.C., market of 1991 to set overseas accommodation limits for its more than 9,000 foreign-service employees. In fiscal 2025 the department spent close to $500 million on overseas leases, with the majority of units rented. Allowances vary by rank, family size and assignment difficulty, yet the maximum square-footage caps have not been revised for 35 years, even as D.C. homes have become smaller and more expensive relative to salaries.

The report also highlights inconsistencies in how space is measured, noting that the State system excludes hallways and closets that domestic appraisers count. GAO recommends aligning overseas space caps with current D.C. conditions and revising measurement practices. Department officials pledged to implement both suggestions and plan to launch an integrated housing-data system by year-end to replace three separate platforms that currently cause data errors and delays.