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

Management Challenges: Providing an Independent Statement of the Agency In the 2019 annual statement, the Department’s Office of Inspector General (OIG) identified the most serious management and performance challenges for the Department. These challenges were identified in the areas of: protection of people and facilities; oversight of contracts, grants, and foreign assistance; information security and management; financial and property management; operating in contingency and critical environments; workforce management; and promoting accountability through internal coordination and clear lines of authority. The OIG statement may be found in the Other Information (OI) section of this report (see pages 111-125). In response to the OIG’s recommendations, the Department took a number of corrective actions. Information on management’s assessment of the challenge and a summary of actions taken may also be found in the OI section. The Public Diplomacy (PD) learning agenda guides public diplomacy research. Forty research questions are linked to 10 theories of change covering Public Diplomacy and Public Affairs activities. Over the last two years, PD has undertaken a number of evaluations aimed at addressing questions in the learning agenda. For example, the Youth Ambassadors program in France examines whether the youth leadership program affects people in the social networks around the program participants. This “multiplier” effect is a central concept in numerous PD programs. In 2019, PD is also concluding a major evaluation of the Young Transatlantic Innovation Leaders Initiative (YTILI), which examines whether participating in the Fellowship promotes economic prosperity in Europe, increases the entrepreneurial knowledge of Fellows, and strengthens the relationship between the YTILI Fellows and the United States. Public Diplomacy will continue to conduct evaluations that test the 10 theories of change contained in the learning agenda. The Department also initiates studies to respond to pressing questions or needs in foreign assistance policy. In developing the agenda for this work, stakeholders from State, USAID, the non-governmental organization and the academic communities are invited to provide feedback. For 2018-2019, this process yielded three pressing questions: 1) how can the United States promote financial burden-sharing for foreign assistance with other countries; 2) can coordination with U.S. agencies and institutions be enhanced by creating a one-stop shop for economic assistance resources, connecting relevant experts, and training economic officers on coordinating overseas development assistance in the economic arena; and 3) to what extent has past U.S. and international donor foreign assistance prioritized and reduced future risks of violent conflict and instability, in line with established international principles for conflict prevention. The results of the first phase of the Strategic Prevention Project are available at https://www.state. gov/wp-content/uploads/2019/07/Strategic-Prevention-Project.pdf . The Department is continuing to review the process by which it updates its learning agenda in order to ensure it is meeting all facets of the requirements as detailed in the Evidence Act. M ore information on the Department’s Program a nd Project Design, Monitoring, and Evaluation P olicy can be found at: https://fam.state.gov/ f am/18fam/18fam030104.html Elihu Root served as the 38th Secretary of State (1905-1909). He created the first Foreign Service Exam and later awarded the Nobel Peace Prize in 1912 for his work on international arbitration. Did You Know? M ore information on former Secretaries can be f ound at: https://history.state.gov/departmenthistory/ p eople/secretaries 22 | U nited S tates D epartment of S tate 2019 A gency F inancial R eport MANAGEMENT’S DISCUSSION AND ANALYSIS | PERFORMANCE SUMMARY AND HIGHLIGHTS