American diplomats are living too high on the hog, renting living quarters abroad that are too big and too expensive, according to a recent General Accounting Office report.

As a way of saving money, the watchdog agency recommended that the U.S. purchase or build suitable housing for its overseas employes in a number of countries.

The State Department's Officer of Foreign Buildings is responsible for about $3 billion worth of U.S.-owned and leased property in 21 cities and 135 countries. The GAO found that management was fragmented among many offices. As a result it said overseas construction programs were ineffective, that both owned and leased property was not property maintained, leading to cost overruns or devaluation of property.

Among the recommendations were the development of country-by-country real estate plans, full congressional funding to cover construction, sound maintenance criteria, and centralization in the foreign buildings office's overseas operations.

The GAO found that the State Department's rent bill has been increasing by 20 to 25 percent annually for the past three or four years. The U.S. is paying about $29 million a year to house its diplomats overseas, GAO said. Each embassy establishes its own residential and office policy so there are no central criteria for determining the amount of space a diplomat can rent, the agency said.

Comparing rented accommodations with standards for U.S.-built quarters, the GAO found that one-third of the diplomats' residences in Brussels were larger than State Department housing standards based on rank and/or family size. Two of the three ambassdorial mansions were bigger than necessary, while a fifth of the staff quarters were, GAO said.