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

$1.0 billion (3 percent) from 2018. This increase of net costs was mainly due to increases in spending for international organizations as a result of timing differences in assessments received from the international organizations and increases in spending for humanitarian efforts and security. These increases were offset by a decrease in actuarial costs in the FSRDF due to actuarial assumption changes. The six-year trend in the Department’s net cost of operations is presented in the “Trend in Net Cost of Operations” bar chart. There is an increase from 2014 to 2019 of $4.7 billion. Increases from 2014 generally reflect costs associated with new program areas related to countering security threats and sustaining stable states, as well as the higher cost of day-to-day operations such as inflation and increased global presence. The “Net Cost of Operations by Major Program” pie chart illustrates the results of operations by major program, as reported on the Statement of Net Cost. As shown, net costs associated with two of the major programs (Health, Education, and Social Services) and (Diplomatic and Consular Programs) represents the largest net costs in 2019 – a combined $17.2 billion (58 percent). The largest increase was in Diplomatic and Consular Programs. This program increased by $639 million as a result of increases in global security. In the International Organizations and Commissions program, net costs increased by $612 million as a result of timing differences in assessments received from the international organizations. There were more assessments received in 2019. Earned Revenues Earned revenues occur when the Department provides goods or services to another Federal entity or the public. The Department reports earned revenues regardless of whether it is permitted to retain the revenue or remit it to Treasury. Revenue from other Federal agencies must be established and billed based on actual costs, without profit. Revenue from the public, in the form of fees for service (e.g., visa issuance), is also without profit. Consular fees are established on a cost recovery basis and determined by periodic cost studies. Certain fees, such as the machine readable Border Crossing Cards, are determined statutorily. Revenue from reimbursable agreements is received to perform services overseas for other Federal agencies. The FSRDF receives revenue from employee/employer contributions, a U.S. Government contribution, and investment interest. Other revenues come from ICASS billings and Working Capital Fund earnings. 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 27 FINANCIAL SUMMARY AND HIGHLIGHTS | MANAGEMENT’S DISCUSSION AND ANALYSIS