Financial Highlights

Bureau of Resource Management
April 21, 2011

The Department of State and USAID Agency Financial Reports (AFR) 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 footnotes, 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 2010. Following the highlights are tables containing key financial information on each agency’s assets, liabilities, and net position in a 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 2010. For the USAID AFR, see the Fiscal Year 2010 Agency Financial Report.

Department of State: The scale and complexity of the Department’s activities and corresponding financial resources and requirements continued to grow. Financial staff operates in more than 270 locations, 172 countries, and in over 150 currencies and foreign languages, often in the most challenging environments. For FY 2010, the Department worked with unity of purpose to meet the demands and paces of the financial statement audit process to validate the strong financial management work that is conducted on a daily basis throughout the world. As a result, the Department received an unqualified (clean) opinion from the Independent Auditor on its FY 2010 Financial Statements, and no material weaknesses in internal controls were reported.

For FY 2010, based on considerable work conducted in collaboration with the Independent Auditor and the Department’s Office of Inspector General, material weaknesses previously identified by the Independent Auditor in financial reporting and accounting for property were downgraded to significant deficiencies. In addition to these two items, the Independent Auditor identified four other significant deficiencies that the Department will work to correct in FY 2012.

The Department maintains a robust system of internal controls overseen by senior leadership. For FY 2010, the Secretary provided an overall unqualified statement of assurance regarding the Department’s internal controls in accordance with the Federal Managers’ Financial Integrity Act, as well as an unqualified statement of assurance for internal controls over financial reporting.

USAID: The Agency received an unqualified opinion on its FY 2010 Financial Statements for the eighth consecutive year from the Office of the Inspector General. This affirms that USAID’s financial statements for the year that ended on September 30, 2010 were presented fairly in all material aspects and prepared in conformance with Generally Accepted Accounting Principles. The Independent Auditor’s Report, which is included in the FY 2010 AFR, identified one material weakness related to unreconciled differences between the Agency’s Fund Balance and its cash balance reported by the U.S. Treasury, and three significant deficiencies. Notable progress was made in resolving these findings during FY 2010, and corrective action plans are in place to resolve these issues and related audit recommendations by September 30, 2011.

The following summarized financial statement information is based on the same underlying data presented in the FY 2010 AFRs. This condensed information provides a high level analysis of each agency’s financial performance and should not be viewed as a substitute for the financial statements and notes contained in the AFR. In addition, intra-agency (i.e., within the Department of State or USAID) balances have been eliminated from the amounts presented for each agency in the Balance Sheet and Net Cost of Operations Summary. Any balances for transactions between the Department of State and USAID have not been eliminated from the amounts presented.