The Agency Financial Report for Fiscal Year (FY) 2020 provides an overview of the Department’s financial and performance data to help Congress, the President, and the public assess our stewardship over the resources entrusted to us.
The U.S. Department of State’s Agency Financial Report (AFR) for Fiscal Year (FY) 2020 provides an overview of the Department’s financial and performance data to help Congress, the President, and the public assess our stewardship over the resources entrusted to us. This report is available at the Department’s website (2017-2021.state.gov/plans-performance-budget/agency-financial-reports) and includes sidebars, links, and information that satisfies the reporting requirements contained in the following legislation:
Federal Managers’ Financial Integrity Act of 1982,
Chief Financial Officers (CFO) Act of 1990,
Government Performance and Results Act (GPRA) of 1993,
Government Management Reform Act of 1994,
Federal Financial Management Improvement Act of 1996,
Reports Consolidation Act of 2000,
Payment Integrity Information Act of 2019, and
GPRA Modernization Act of 2010.
The AFR is the first of a series of two annual financial and performance reports the Department will issue. The reports include: (1) an Agency Financial Report issued in November 2020; and (2) an agency Annual Performance Plan and Annual Performance Report. These reports will be available online at 2017-2021.state.gov/plans-performance-budget.
Note: Throughout this report all use of year indicates fiscal year.
About the Covers
The covers (wrapped front to back), selected in support of this year’s AFR theme Safeguarding Unalienable Rights, features a portion of John Trumbull’s Declaration of Independence, one of the artist’s four murals in the U.S. Capitol Rotunda. Thomas Jefferson (red vest) and his fellow drafters are shown presenting their work to John Hancock (seated), President of the Continental Congress on June 28, 1776.
Certificate of Excellence in Accountability Reporting
In August 2020, the U.S. Department of State received the Certificate of Excellence in Accountability Reporting (CEAR) from the Association of Government Accountants (AGA) for its Fiscal Year 2019 Agency Financial Report. The CEAR is the highest form of recognition in Federal Government management reporting. The CEAR Program was established by the AGA, in conjunction with the Chief Financial Officers Council, to further performance and accountability reporting. This represents the thirteenth time the Department has won the CEAR award.
How This Report is Organized
The State Department’s Fiscal Year 2020 Agency Financial Report (AFR) provides financial and performance information for the fiscal year beginning October 1, 2019, and ending on September 30, 2020, with comparative prior year data, where appropriate. The AFR demonstrates the agency’s commitment to its mission and accountability to Congress and the American people. This report presents the Department’s operations, accomplishments, and challenges. The AFR begins with a message from the Secretary of State, Michael R. Pompeo. This introduction is followed by three main sections and appendices. In addition, a series of “In Focus” sidebars are interspersed to present useful information on the Department.
Section I: Management’s Discussion and Analysis
Section I provides an overview of the Department’s performance and financial information. It introduces the vision and mission of the Department, includes a brief history, and describes the agency’s organizational structure. This section briefly highlights the Department’s goals, its focus on developing priorities, and provides an overview of major program areas. The section also highlights the agency’s financial results, and provides management’s assurances on the Department’s internal controls.
Section II: Financial Section
Section II begins with a message from the Comptroller. This section details the Department’s financial status and includes the audit transmittal letter from the Inspector General, the independent auditor’s reports, and the audited financial statements and notes. The Required Supplementary Information included in this section provides a combining statement of budgetary resources, the condition of heritage asset collections, and a report on the Department’s year-end deferred maintenance and repairs.
Section III: Other Information
Section III begins with the Inspector General’s statement on the agency’s management and performance challenges followed by management’s responses. The section also includes a summary of the results of the Department’s financial statement audit and management assurances and describes the Department’s financial legal requirements, as well as payment integrity, information on real property and grants programs, resource management systems, and a summary of the Department’s heritage assets.
The appendices include data that supports the main sections of the AFR. This includes a glossary of abbreviations and acronyms used in the report and a map of the Department of State’s locations across the globe.
Message from the Secretary
I pleased to present the Department of State’s Agency Financial Report (AFR) for Fiscal Year (FY) 2020. At the core of the AFR is trust. Continuing to earn the trust of the American people will aid the Department in advancing our country’s long-term interests at a time of complex threats and important opportunities. To that end, this report illustrates our determination to spend and invest American taxpayer funds carefully and effectively.
The State Department continues to focus its efforts on four key national priorities as outlined in the Department’s Joint Strategic Plan.
Protecting America’s Security at Home and Abroad
Renewing America’s Competitive Advantage for Sustained Economic Growth and Job Creation
Promoting American Leadership through Balanced Engagement
Ensuring Effectiveness and Accountability to the American Taxpayer
Protecting America’s Security at Home and Abroad. Protecting Americans at home and abroad remains this Administration’s highest priority. We continue to find guidance in principles of our nation’s founders: realism, restraint, and respect. In the Middle East, the Trump Administration has mitigated threats posed by the Islamic Republic of Iran to the American people by restoring credible deterrence and strengthening ties with our Gulf allies and partners. And we continue to counter radical Islamist terrorism in all of its forms, including the threat of ISIS and other non-state actors. The Trump Administration has also recognized the Chinese Communist Party (CCP) as a sustained threat to American security. That’s why we’ve refused to legally recognize the CCP’s claims regarding the South China Sea, and worked with our allies and partners to get more than forty countries on board the Clean Network – countries committed to keeping untrusted 5G vendors like Huwaei out of their telecommunications networks.
Renewing America’s Competitive Advantage for Sustained Economic Growth and Job Creation. Robust international trade is in America’s economic interest. We continue to work with key partners throughout the world to ensure that the rules that govern commerce between nations are fair and reciprocal. We’ve also made the case to American companies for their role in American security. Our companies shouldn’t do deals that strengthen the military capability of competitors such as China. So too must we ensure that American partnerships and technological exports do not contribute to the CCP’s oppression of its own people.
We also know that the private sector is an essential force for bringing sustainable prosperity to the developing world, and to that end have worked in concert with the revamped U.S. Development Finance Corporation to help American companies make new inroads around the world.
Promoting American Leadership through Balanced Engagement. This year’s AFR is built around the theme of Safeguarding Unalienable Rights. Unalienable rights are at the core of the American experiment and American foreign policy. I established the Commission on Unalienable Rights to help re-ground American diplomacy in a commitment to our founding principles. By doing so, we will uphold the best American traditions of defending freedom and human rights worldwide, and remain a powerful moral witness to the world.
Ensuring Effectiveness and Accountability to the American Taxpayer. The State Department’s professionals, like all Americans, have been challenged to adapt to the conditions brought by the COVID-19 pandemic. I’m proud of the resilience our team has shown in continuing to fulfill its mission. Rallying under the banner of Diplomacy Strong, our workforce has deployed new technology and demonstrated creativity to ensure that the work of American diplomacy has moved forward. We also have implemented new ways to coordinate our efforts, for example, holding quarterly strategic reviews through virtual formats to ensure that financial management, information systems, human resources, and other key organizational elements are aligned.
This AFR is our principal report to the President, Congress, and the American people on our leadership in managing and stewarding well the public funds entrusted to us. To ensure this AFR is complete and reliable, the Department maintains a robust system of management controls. The Department conducted its assessment of the effectiveness of internal controls over financial reporting in accordance with Appendix A of OMB Circular A-123. Based on the results of this assessment and the results of the independent audit, the Department can provide reasonable assurance that the FY 2020 Financial Statements are complete and reliable. Similarly, the reliable reports on performance and additional financial information in the AFR should further bolster confidence in the Department’s management. The Message from the Comptroller in this AFR underscores our improvements in FY 2020 and includes the results of the independent audit of our FY 2020 Financial Statements.
The Department of State, in concert with our interagency partners, will continue to meet the complex challenges that our country faces today and in the future in every corner of the world. We will continue to be a force for good.