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U.S. Department of State

Diplomacy in Action

Net Cost Summary


Bureau of Resource Management
Report
May 10, 2010

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The charts below show each agency’s net cost; that is, gross costs less earned revenue, invested in each joint strategic goal. These goals, or objectives, are consistent with the State-USAID Strategic Planning Framework. Operating Unit Management and Executive Direction are costs that cannot be directly traced or reasonably allocated to strategic goals; however, these costs are captured and included in the total net cost of operations. In addition, total net cost includes intra-agency eliminations, but does not include eliminations between State and USAID.

Department of State. Total Net Cost of $21.6 billion is an increase of 22% or $3.9 billion, over 2008. The goal of Investing in People and Executive Direction and Other Costs account for most of the increase. Executive Direction Costs include the $1.5 billion increase in actuarial liability for the Foreign Service Retirement and Disability Fund. Costs in furtherance of the Investing in People goal increased $1.8 billion due to initiatives and additional appropriations received and expended this year by the fund established in 2008 for Global Health and Child Survival. The goal of Achieving Peace and Security represented the largest category of costs, at 27%, for FY 2009.

USAID. The Statement of Net Cost shows the amounts spent on meeting the Agency’s six objectives. These objectives are consistent with the State-USAID Strategic Planning Framework. The Economic Growth objective is the largest investment at 33%. The spending levels increased due to budget changes to align with the normal course of USAID’s operations. The 23% increase in net cost of operations is a result of changes in the Economic Growth, Investing in People and Humanitarian Assistance objectives. The Economic Growth objective shows the highest variance with an increase in spending under Macroeconomic, Financial sector, Infrastructure, and Agriculture program areas. The Investing in People variance is due to an increase in revenues for the Health program area. Complete details are provided in the AFR http://www.usaid.gov/policy/afr09/USAIDFY2009AFR.pdf, page 18. The table below documents the net cost of operations by strategic goal.

NET COST OF OPERATIONS
For the Year Ended September 30, 2009
($ in thousands)
Strategic Goal
STATE USAID
Net Cost Percent
of Total Net Cost
Net Cost Percent
of Total Net Cost
Achieving Peace and Security $5,738,945 26% $979,638 9%
Governing Justly and Democratically 753,657 3% 1,753,766 16%
Investing in People 5,088,936 24% 3,058,013 28%
Promoting Economic Growth and Prosperity 1,231,801 6% 3,624,505 33%
Providing Humanitarian Assistance 1,695,233 8% 1,455,654 13%
Promoting International Understanding 2,084,423 10% N/A N/A
Strengthening Consular and Management Capabilities 1,222,896 6% N/A N/A
Other Cost Category
Operating Unit Management N/A N/A 144,175 1%
Executive Direction and Other Costs Not Assigned 3,796,943 17% N/A N/A
Total Net Cost of Operations $21,612,834 100% $11,015,751 100%
Pie chart summarizing Net Cost of Operations for the Department of State. Values are ($ in thousands): Strategic Goal 1: $5,738,945. Strategic Goal 2: $753,657. Strategic Goal 3: $5,088,936. Strategic Goal 4: $1,231,801. Strategic Goal 5: $1,695,233. Strategic Goal 6: $2,084,423. Strategic Goal 7: $1,222,896. Other Cost Category values are: Executive Direction and Other Costs Not Assigned: $3,796,943. Total Net Cost of Operations: $21,612,834. Pie chart summarizing Net Cost of Operations for USAID. Values are ($ in thousands): Strategic Goal 1: $979,638. Strategic Goal 2: $1,753,766. Strategic Goal 3: $3,058,013. Strategic Goal 4: $3,624,505. Strategic Goal 5: $1,455,654. Other Cost Category values are: Operating Unit Management: $144,175. Total Net Cost of Operations: $11,015,751.

 




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