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U.S. Department of State

Diplomacy in Action

Message from the Secretary

FY 2008 Financial Report
Bureau of Resource Management
December 2008

Photo showing Secretary Rice greeting the embassy community in Addis Ababa, Ethiopia. The Secretary attended a meeting there with leaders from the African Great Lakes states (Burundi, the Democratic Republic of the Congo, Rwanda, and Uganda) to discuss issues of regional peace and security on December 5, 2007.

I am pleased to present the U.S. Department of State’s Agency Financial Report for Fiscal Year 2008. The Agency Financial Report provides crucial financial and performance information for Congress and the American people, and highlights our efforts to manage taxpayer dollars responsibly in support of our mission to build democratic and well-governed states that reflect their people’s aspirations for freedom, security, and prosperity for all.

In today’s world, it is impossible to draw clear lines between our security interests, our development efforts, and our democratic ideals. To meet this challenge, we are more closely aligning the programs of the Department of State and USAID. More than ever before, our organizations work hand-in-hand with each other and with other U.S. Government partners to advance our foreign policy objectives. Our strategic goals, priorities and ideals lie at the core of the Department’s and USAID’s shared mission and vision that are rooted in partnership, not paternalism – in doing things with other people, not for them.

Our global agenda in public diplomacy, humanitarian assistance, and peace and security is providing the foundation for sustainable economic growth and human development, reinforcing effective democratic governance, and encouraging states to engage responsibly in the international system.

Supporting the President’s commitment to enhance the effectiveness of American diplomacy, we have examined staffing and resource needs and taken steps to realign overseas positions to better reflect current and emerging foreign policy priorities. We need to meet the challenges implicit in assigning our diplomats to Iraq, Afghanistan and other dangerous places in the world. I remain dedicated to rebuilding our civilian capacity to engage in diplomacy and to manage programs, including the elimination of shortages of essential skills within our diplomatic corps, particularly in the areas of critical languages and reconstruction and stabilization expertise.

Throughout the year we have worked aggressively to resolve significant management controls issues. We are strengthening controls over access to our Passport Information Electronic Records System to improve prevention, detection and responsiveness. We continue to bolster controls over private security contractors by implementing recommendations of a special panel to improve accountability and control, working closely with our colleagues at the Department of Defense. We completed a number of New Embassy Compounds overseas in Beijing, Berlin and Baghdad, among others, and our overseas construction program has allowed over 19,000 people to move into more secure facilities. We improved the executive attention and controls over the management of undelivered orders to address this previously reported material weakness. As a result of our efforts, I am pleased to provide an unqualified statement of assurance regarding the Department’s management controls. The financial and summary performance data presented herein are complete and reliable in accordance with the guidance from the Office of Management and Budget.

Since 2002, the State Department has submitted to Congress and the American public an annual Performance and Accountability Report. Last year and again this year, the Department is participating in a pilot program under the auspices of the Office of Management and Budget to streamline and clarify the relationships among performance, budget and financial reporting. Additional performance information will be included in the December 2008 Department’s Snapshot report and incorporated in the Annual Performance Report and Citizens' Report in January 2009. The Department’s Annual Performance Report also will be incorporated into the FY 2010 Congressional Budget Justification, which will be available in the early spring timeframe and posted at

I am proud to represent the Department of State’s 30,000 American and Foreign Service National employees at more that 260 posts worldwide. These men and women are doing vital work for the American people, advancing America’s values and interests across the globe as they help people everywhere build a better world.

Signature of Condoleezza Rice

Condoleezza Rice
Secretary of State
November 17, 2008


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