U.S. Department of State Fiscal Year 2019 Agency Financial Report

Table of Contents 2 Introduction 2 About This Report 3 How This Report is Organized 4 Message from the Secretary 7 Section I: Management’s Discussion and Analysis 7 About The Department 13 Strategic Goals and Government- wide Management Initiatives 17 Performance Summary and Highlights 24 Financial Summary and Highlights 34 Management Assurances and Other Financial Compliances 42 Section II: Financial Section 42 Message from the Comptroller 44 OIG Transmittal and Independent Auditor’s Report 62 Comptroller Response to the OIG 63 Principal Financial Statements 64 Consolidated Balance Sheet 65 Consolidated Statement of Net Cost 66 Consolidated Statement of Changes in Net Position 67 Combined Statement of Budgetary Resources 68 Notes to the Principal Financial Statements 107 Required Supplementary Information 111 Section III: Other Information 111 Inspector General’s Statement on the Department’s Major Management and Performance Challenges 126 Management’s Response to Inspector General 136 Summary of Financial Statement Audit and Management Assurances 137 Payment Integrity and Other Laws and Regulations 143 Federal Civil Penalties Inflation Adjustment Act 144 Fraud Reduction Report 147 Resource Management Systems Summary 152 Heritage Assets 155 Reduce the Footprint 159 Appendices 159 A: Abbreviations and Acronyms 162 B: Department of State Locations Vice President Pence, Secretary Pompeo, and former Secretary of Homeland Security Kirstjen M. Nielsen pose with leaders from Mexico, Honduras, Guatemala, and El Salvador at the Conference on Prosperity and Security in Central America in Washington, D.C., October 11, 2018. Department of State