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Financial Highlights


Bureau of the Comptroller and Global Financial Services
Report
February 15, 2013

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The Agency Financial Reports (AFRs) of the Department of State and USAID disclose the agencies' financial status and provide transparency and accountability to the American people, Congress, and the President-including both successes and challenges. The reports provide a snapshot in time of the immense financial work undertaken by each agency's financial personnel to exercise good stewardship and management of public funds. The AFRs present each agency's audited financial statements and notes, Management's Discussion and Analysis, and performance and other required information.

Below are summary highlights of the AFRs for both the Department of State and USAID for FY 2012. Following the highlights are tables containing key financial information on each agency's assets, liabilities, and net position in the Balance Sheet Summary; information on each agency's net cost of operations in a Net Cost of Operations Summary; and available resources in a Budgetary Resources Summary. Both agencies' AFRs are posted online. For a complete Department of State AFR, see the Agency Financial Report for Fiscal Year 2012. For the USAID AFR, see the Fiscal Year 2012 Agency Financial Report.

Department of State: The scale and complexity of the Department's activities and corresponding financial management requirements continue to grow in the face of a wide range of global and regional issues. Financial staff operates in more than 270 locations, 180 countries, and in over 135 currencies and foreign languages, often in the most challenging environments. Despite these complexities, the Department is steadfast in its financial responsibilities to the American people in the pursuit of an efficient, accountable, and transparent financial management platform that enhances the Department's foreign affairs mission.

The external financial statement audit is now a year-round process and focus for the Department as we work to deliver meaningful financial statements by November 15 and demonstrate the Department's strong financial management practices. The Department received an unqualified or "clean" opinion from the Independent Auditor for FY 2012.

The Federal Managers' Financial Integrity Act (FMFIA) requires that agencies establish effective internal controls. The Department remains committed to strong corporate governance and internal controls, and maintains a robust system of internal controls overseen and validated by senior leadership. At the close of FY 2011, the Department reported material weaknesses in internal controls related to the accounting for FSN after-employment benefits and the Educational and Cultural Affairs (ECA) Summer Work Travel (SWT) program. In FY 2012, Department staff worked diligently and resolved the material weakness regarding the complex task of accounting for FSN After-Employment Benefits around the world. As a result, the Department reported an unqualified statement of assurance as of September 30 for the internal control over financial reporting. The SWT Program was first identified during FY 2011 due to insufficient oversight to ensure the health, safety, and welfare of the SWT participants. Throughout FY 2012, the Department took unprecedented action to address the weaknesses in the SWT program. While great strides have been made to strengthen the oversight of the program, there is more to do, including the verification that the improvements made are working as intended. For this reason, the Department elected to continue to report the matter as a material weakness for FY 2012.

USAID: During FY 2012, the Agency made significant progress toward resolving the complex and long-standing unexplained cash balance differences between our general ledger and the U.S. Treasury. This amount was reduced by approximately 90 percent between September 30, 2011 and September 30, 2012. The Agency also made great strides towards improving the efficiency of operations and accuracy and reliability of financial data during FY 2012, including but not limited to the migration of the global missions cash reconciliation tool to a Web-based platform, and reducing aged suspense account items by 56 percent as of September 30, 2012. However, the Agency received a qualified opinion on its FY 2012 financial statements for the first time in nine years. This was primarily due to auditor concerns that "unsupported adjustments" during the cash remediation process resulted in a material weakness.

USAID can provide reasonable assurance that its financial systems substantially comply with financial system requirements and applicable provisions of FFMIA as of September 30, 2012. The Agency will continue its efforts to satisfactorily resolve all known weaknesses or deficiencies, and maintain its current excellent standards of service to global missions.

 




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