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Section Table of Contents

  • 2018 Highlights
  • About This Report
  • How This Report is Organized
  • Message from the Secretary
  • Section I: Management’s Discussion and Analysis
  • Section II: Financial Section
  • Section III: Other Information
  • Acknowledgements and Contact Information
  • Collection of Sidebars
  • Appendix A: Abbreviations and Acronyms
  • Appendix B: Department of State Locations

2018 Highlights

20181 Highlights
(dollars in billions)
  Percent Change
2018 over 2017
2018 2017 2016 2015
Balance Sheet Totals as of
September 30
         
Total Assets +5% $105.6 $100.6 $93.8 $90.6
Total Liabilities +12% 29.9 26.8 25.7 25.4
Total Net Position +3% 75.7 73.8 68.1 65.2
Results of Operations for the
Year Ended September 30
         
Total Net Cost of Operations +8% $28.7 $26.5 $27.4 $25.6
Budgetary Resources for the
Year Ended September 30
         
Total Budgetary Resources +2% $72.3 $71.0 $69.3 $65.9
Visas Issued at Foreign Posts   9.0 million 9.7 million 10.4 million 10.9 million

1 Throughout this report all use of year indicates fiscal year. (back to text)

Bar chart summarizing the total net cost of operations for fiscal years 2015 to 2018. Values are as follows: FY 2015: $25.6 billion. FY 2016: $27.4 billion. FY 2017: $26.5 billion. FY 2018: $28.7 billion.
Bar chart of State employees for 2015-2018 broken down by Foreign Service (FS), Civil Service (CS), Eligible Family Members(EFMs) (see Note 1) and Locally Employed Staff (LE Staff) (see Note 2). In thousands: FY 2015: FS: 14; CS: 11; EFMs: 2; LE Staff: 48. FY 2016: FS: 14; CS: 11; EFMs: 2; LE Staff: 50. FY 2017: FS: 14; CS: 11; EFMs: 2; LE Staff: 50. FY 2018: FS: 14; CS: 10; EFMs: 2; LE Staff: 50. Notes: 1. Eligible Family Members include State only eligible family members and do not include the inactive reserves. 2. Locally Employed Staff includes Foreign Service Nationals and Personal Services Agreements.

Bar chart summarizing the number of passports issued including books and cards for fiscal years 2015 to 2018. Values are as follows: FY 2015: 15.6 million. FY 2016: 18.7 million. FY 2017: 21.4 million. FY 2018: 21.1 million.
 

About This Report

The U.S. Department of State’s Agency Financial Report (AFR) for Fiscal Year (FY) 2018 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 (www.state.gov/s/d/rm/rls/perfrpt/2018/index.htm) 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 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,
  • Improper Payments Information Act of 2002,
  • GPRA Modernization Act of 2010, and
  • Grants Oversight and New Efficiency Act of 2016.

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 2018; and (2) an agency Annual Performance Plan and Annual Performance Report. These reports will be available online at http://www.state.gov/s/d/rm/c6113.htm.

Note: Throughout this report all use of year indicates fiscal year.


About The Cover

Photo showing the U.S. Department of State Fiscal Year 2018 Agency Financial Report cover.

The cover is a montage that presents the Department’s commitment in advancing and executing American’s interests and values. The images include: (top left) Secretary Pompeo meets first and second tour officers from Embassy Tel Aviv in Tel Aviv, Israel, April 29, 2018; (middle left) Secretary Pompeo greets embassy personnel and their families at the U.S. Embassy Beijing in Beijing, China, June 14, 2018; (middle right) Secretary Pompeo and NATO Secretary General Jens Stoltenberg host a meeting with the foreign ministers of select members of the Coalition to Defeat ISIS at the NATO summit in Brussels, Belgium, July 12, 2018; and (bottom left) Secretary Pompeo participates in joint press conference with Ambassador Nikki Haley at the 73rd Session of the United Nations General Assembly in New York City, New York, September 24, 2018.



Certificate of Excellence in Accountability Reporting

Photo showing the U.S. Department of State Fiscal Year 2017 Agency Financial Report cover, the Certificate of Excellence in Accountability Reporting award presented to the Department of State for its Fiscal Year 2017 Agency Financial Report, and the League of American Communications Professionals Competition Winner seal presented to the Department of State for that report.

In May 2018, 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 2017 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 eleventh time the Department has won the CEAR award. In addition, the Department’s AFR was awarded the Gold Award by the League of American Communications Professionals (LACP) for excellence within its industry. The LACP also ranked the AFR in their Top 100 Reports Worldwide (ranking at 99th overall from more than 6,000 entries).


How This Report is Organized

Photo showing Secretary Pompeo participating in a press conference with President Trump during the NATO Foreign Ministerial in Brussels, Belgium, July 12, 2018. [Department of State]

The State Department’s Fiscal Year 2018 Agency Financial Report (AFR) provides financial and performance information for the fiscal year beginning October 1, 2017, and ending on September 30, 2018, 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 goal areas, 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 efforts, resource management systems, a summary of the Department’s heritage assets, and the status of OMB’s Reduce the Footprint policy.

Appendices

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

Photo showing Secretary Pompeo delivering remarks on the release of the 2017 International Religious Freedom Report in Washington, D.C., May 29, 2018. [Department of State]

I am pleased to present the Department of State’s Agency Financial Report (AFR) for Fiscal Year (FY) 2018. This report represents our commitment to American taxpayers that their money is being invested carefully and responsibly. Their investment, and the trust that comes along with it, ensures that the United States can maintain its stature in the world and continue to advance our country’s long-term interests in an age of rapidly evolving security threats and unprecedented technological and societal change.

Positioned in every corner of the world, the men and women of the State Department are advancing America’s interests on a daily basis. We remain focused on promoting democratic values and fostering a freer, more peaceful, and more prosperous world on behalf of the American people. Within the context of today’s challenging global environment, this work is never easy and is often dangerous. Traditional state actors and non-state actors alike are increasingly applying unconventional measures with the explicit purpose of eroding our enduring national security and economic interests and, ultimately, threatening our way of life. Regardless of the forms these threats take or the methods they use, the dedicated men and women of the State Department continue to work together, day-by-day, to protect American citizens and secure our economic and security interests.

To support the President’s “America First” vision in the foreign policy realm, the State Department focuses 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. Although the U.S.-led Global Coalition to Defeat the Islamic State of Iraq and Syria (ISIS) has liberated nearly all of the territory ISIS once controlled in Iraq and Syria, ISIS continues to exploit local insurgencies around the world and seeks to connect them to its global network of foreign terrorist fighters, money, and ideology to create additional safe havens. Just as al-Qa’ida has survived and transformed itself despite unrelenting pressure from the United States and its allies, ISIS and other transnational terrorist groups continue to pose a significant threat to Americans abroad and to our way of life at home. Likewise, we should not lose sight of the ongoing threat that regimes, including North Korea and Iran, pose to our long-term security interests.

Renewing America’s Competitive Advantage for Sustained Economic Growth and Job Creation. In every way we can, the Department seeks to level the playing field for American workers and businesses. Our diplomatic missions abroad help American businesses gain access to emerging markets by promoting the rule of law, enforcing accountability and economic transparency, and promoting private-sector partnerships. In 2018, the State Department worked to bring balance and reciprocity into our trade relationships so that American workers and businesses are able to compete fairly and have better opportunities to succeed in foreign markets.

Promoting American Leadership through Balanced Engagement. The Department is reinvigorating American leadership abroad for the benefit of the American people, while also encouraging every country to shoulder its share of the burden for global security and stability. We are leading with the message that every nation has the right – and the responsibility – to defend its sovereignty and promote its national interests. We have spoken up in support of mutually beneficial international partnerships and alliances, and we have stood against lopsided security and economic arrangements that exploit American good will. As a result of high-level messaging from the President and persistent diplomatic discussions on defense burden-sharing carried out by our American diplomats, our NATO Allies have increased defense spending by more than $40 billion over the past two years. The long-term outlook has also improved, with 26 NATO Allies now expected to invest 20 percent or more of their defense budgets on major capabilities by 2024, in keeping with their commitments under the Wales Pledge.

Ensuring Effectiveness and Accountability to the U.S. Taxpayer. I consider as sacred the trust that Americans inherently give to the Department. We must do everything we can to honor and protect that trust. We erode that trust when we do not seek out ways to streamline our operations or eliminate programs that have outlived their utility or are not delivering what they promise. In 2018, the Department’s workforce continued to adjust to a rightsizing initiative started in 2017 under broader agency reform efforts. While rightsizing an organization as large as the Department of State is a continuous process, I’ve directed my staff to reexamine ways we are attracting and managing human capital with an eye toward preserving both the depth and long-term health of our diplomatic corps – our most critical foreign-policy strategic asset.

This AFR, a key accountability document, is our principal publication and report to the President, Congress, and the American people on our leadership in financial management and our stewardship of the public funds entrusted to us. To ensure this AFR is complete and reliable, we worked with an Independent Auditor on the financial data and with our bureaus and missions on the summary performance data. The Message from the Comptroller in this AFR underscores our improvements in FY 2018 and includes the results of the independent audit of our FY 2018 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.

Signature of Michael R. Pompeo.

Michael R. Pompeo
Secretary of State
November 15, 2018

Section I: Management's Discussion and Analysis

View the full Section I: Management’s Discussion and Analysis.

Section II: Financial Section

View the full Section II: Financial Section.

Section III: Other Information

View the full Section III: Other Information.

Acknowledgements and Contact Information

View the full Acknowledgements and Contact Information

Collection of Sidebars

View the full Collection of Sidebars

U.S. Department of State

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