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Diplomacy in Action

Message from the Comptroller


Bureau of the Comptroller and Global Financial Services
Report
December 16, 2013

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Photo of James L. Millette, Department of State Comptroller. James L. Millette

I am pleased to present the Fiscal Year (FY) 2013 financial statements on behalf of the Department of State. The Department is firmly committed to delivering the highest standard of financial accountability and reporting in support of our critical foreign affairs mission. This Agency Financial Report (AFR) and the financial statements in the following pages represent the rigor and resolve to transparently communicate and demonstrate our effective management over the Department's finite financial resources. It is an informative and useful snapshot in time. More importantly, it embodies and reflects the immense work, drive for continuous improvement, and dedication displayed every day by our financial and management professionals in more than 270 locations and 180 countries around the globe.

As highlighted in the Secretary's AFR message, the United States is faced with a broad range of foreign policy challenges that demand our attention: whether it's bringing stability to the Middle East and North Africa, deepening the rebalance to Asia, completing the transition in Afghanistan, tackling climate change, or promoting good governance and human rights. The scale and complexity of Department activities and corresponding financial management requirements are immense. Secretary Kerry has challenged us to improve our efficiency and effectiveness in tackling these and other challenges as we work to make the smart foreign policy investments now that increase America's prosperity and help avoid much costlier burdens down the road.

In support of these efforts, the Bureau of the Comptroller and Global Financial Services continues to prudently prioritize, manage, and implement vital investments in modern resource management systems that facilitate smart and standardized enterprise-wide financial business processes and accurate and timely financial data. We have emphasized our commitment to meet our day-to-day global financial services in disbursing, accounting, and compensation for the Department and other customer agencies by our commitment to ISO-9001 certified operations and the Capability Maturity Model Integration (CMMI) standard for financial systems development. At the same time, we strive to balance and meet the growing audit and compliance requirements driven by OMB, Treasury, and the Congress. In doing so, we have worked to strengthen our ability to work with partners across the Department's global platform to ensure an environment of sound internal controls and strong performance on the annual external audit process and financial statements.

To that end, I am pleased to report that the Department has received an unmodified ("clean") audit opinion on its FY 2013 and 2012 Financial Statements, and with no material weaknesses identified by the Independent Auditor. As noted by the Independent Auditor, improvements were made in financial reporting and accounting for Foreign Service National after-employment benefits. At the same time, we remain committed to strong corporate governance and internal controls. The Department maintains a robust system of internal controls that are validated by senior leadership and administered by the Bureau of the Comptroller and Global Financial Services. For FY 2013, no material weaknesses in internal control were identified by senior leadership. A prior material weakness regarding the effective oversight of the Summer Work Travel Program for Student traveling to the United States for temporary and seasonal employment was downgraded to a significant deficiency given additional oversight and outreach steps taken by the Department over the last two years. In addition, no material weaknesses in internal control over financial reporting were identified by the Senior Assessment Team, the Management Control Steering Committee or senior leadership. As a result, the Secretary was able to provide reasonable assurance over the effectiveness of the Department's overall internal control and the internal control over financial reporting in accordance with the Federal Managers' Financial Integrity Act.

I would like to express my sincere thanks and appreciation to the Department's financial management professionals, whose consistent efforts to plan, execute, and account for the Department's resources, often in the most challenging global environments, is the foundation for any success and financial stewardship. It has been a concerted and dedicated effort by all stakeholders involved, including the Department's Office of Inspector General and the Independent Auditor, Kearney & Company. The Department fully recognizes that there are a number of items noted in the AFR that will require our continued attention, diligence, and improvement. We are committed to addressing them. Given the global and complex nature of our financial operations, there will always be new concerns and opportunities for improvement. We are up to the task and resolved to continue to be efficient and effective stewards of the Department's resources in support of our vital foreign affairs mission and programs.

Sincerely,

Signature of James L. Millette.

James L. Millette
Comptroller
December 16, 2013

 




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