Balance Sheet: Overview of Financial Position

Bureau of the Comptroller and Global Financial Services
Report
November 15, 2016


 

 

 



The Balance Sheet provides a snapshot of the Department’s financial position. It displays, as of a specific time, amounts of future economic benefits owned or managed by the reporting entity (Assets), amounts owed (Liabilities), and amounts which comprise the difference (Net Position) at the end of the fiscal year.

Pie chart summarizing assets by type at September 30, 2016. Values are as follows:

Investments, Net: $18.4 billion, 20%.
Fund Balance with Treasury: $50.7 billion, 54%.
Property and Equipment, Net: $21.8 billion, 23%.
Other Assets: $2.9 billion, 3%.

Total Assets: $93.8 billion.

Assets. The Department’s total assets were $93.8 billion at September 30, 2016, an increase of $3.2 billion (4 percent) over the 2015 total. Property and Equipment increased by $1.6 billion (8 percent) from September 30, 2015. New buildings, structures and improvements accounted for $1.4 billion of this increase with the top eight New Embassy Compound projects and two annex projects accounting for $899 million of the increase (see “Real Property Projects – 2016 Cost Activity” table). Additionally, as part of the Property and Equipment increase, land increased by $197 million due to two acquisitions in Mexico City, Mexico for $120 million and Tegucigalpa, Honduras for $51 million.

Real Property Projects – 2016 Cost Activity
(dollars in millions)
Project Name Amount
London, United Kingdom $176
Islamabad, Pakistan 123
Kabul, Afghanistan (New Annex Facility and Housing) 113
Ndjamena, Chad 89
Jakarta, Indonesia 81
Moscow, Russia (New Annex Facility) 80
Jeddah, Saudi Arabia 61
Harare, Zimbabwe 62
Taipei, Taiwan 58
Ashgabat, Turkmenistan 56
Total $899

Other assets increased $910 million (58 percent) as a result of an increase in reimbursable agreements with USAID, Department of Energy, and other Federal agencies. In addition, the increases in Other Assets are driven by voluntary contributions for relief of refugees, real property rent, and advances on behalf of USAID. Fund Balance with Treasury increased $606 million (1 percent) as a result of increased balances in the Embassy Security, Construction, and Maintenance appropriation. Investments increased $204 million (1 percent) because contributions and appropriations received to support the Foreign Service Retirement and Disability Fund (FSRDF) were greater than benefit payments.

Fund Balance with Treasury, Investments, and Property and Equipment comprise 97 percent and 98 percent of total assets for 2016 and 2015, respectively.

Bar chart summarizing the trend in total assets for fiscal years 2011 to 2016. Values are as follows: 

FY 2011: $73.6 billion.
FY 2012: $79.6 billion.
FY 2013: $84.8 billion.
FY 2014: $86.8 billion.
FY 2015: $90.6 billion.
FY 2016: $93.8 billion.

The six-year trend in the Department’s total assets is presented in the “Trend in Total Assets” bar chart. Total assets have increased an overall $20.2 billion (27 percent) since 2011. This upward trend resulted primarily from a $10 billion increase in Fund Balance with Treasury, a $7 billion increase in Property and Equipment, and a $2 billion increase in Investments.

Many Heritage Assets, including art, historic American furnishings, rare books and cultural objects, are not reflected as assets on the Department’s Balance Sheet. Federal accounting standards attempt to match costs to accomplishments in operating performance, and have deemed that the allocation of historical cost through depreciation of a national treasure or other priceless item intended to be preserved forever as part of our American heritage would not contribute to performance cost measurement. Thus the acquisition cost of heritage assets is expensed not capitalized. The maintenance costs of these heritage assets are expensed as incurred, since it is part of the government’s role to maintain them in good condition. All of the embassies and other properties on the Secretary of State’s Register of Culturally Significant Property, however, do appear as assets on the Balance Sheet, since they are used in the day-to-day operations of the Department.

 
Pie chart summarizing liabilities by type at September 30, 2016. Values are as follows:

After-Employment Benefit Liability: $20.0 billion, 78%.
International Organizations Liability: $1.6 billion, 6%.
Accounts Payable: $2.3 billion, 9%.
Other Liabilities: $1.8 billion, 7%.

Total Liabilities: $25.7 billion.
Bar chart summarizing the trend in total liabilities for fiscal years 2011 to 2016. Values are as follows: 

FY 2011: $24.1 billion.
FY 2012: $25.4 billion.
FY 2013: $26.4 billion.
FY 2014: $25.1 billion.
FY 2015: $25.4 billion.
FY 2016: $25.7 billion.

Liabilities. The Department’s total liabilities were $25.7 billion at September 30, 2016, an increase of $309 million (1 percent) between 2015 and 2016. Other liabilities increased by $247 million (15 percent) primarily due to increased Federal assistance liabilities reported in our Global Health Programs carried out by Health and Human Services and offset by a decrease in funded payroll, annual leave, and environmental liabilities. After-Employment Benefit Liability comprises 78 percent of total liabilities and increased $22 million (0 percent) from 2015.

The six-year trend in the Department’s total liabilities from 2011 through 2016 is presented in the “Trend in Total Liabilities” bar chart. Over this period, total liabilities increased by $1.6 billion (7 percent). This change is principally due to the increase in the After-Employment Benefit Liability, a $1.4 billion increase. The increase is due to a higher number of Foreign Service employees enrolled in the plan and changes in the key economic indicators underlying the actuarial computation over time.

Ending Net Position. The Department’s net position, comprised of Unexpended Appropriations and the Cumulative Results of Operations, increased $2.9 billion (4 percent) between 2015 and 2016. Cumulative Results of Operations increased $1.9 billion and Unexpended Appropriations were up $1.0 billion due in part to the budgetary financing sources used to purchase property and equipment.