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

Protecting America’s Security at Home and Abroad: Protecting Americans at home and abroad remains this Administration’s highest priority. We remain committed to the complete dismantling of the ISIS threat and the ongoing fight against radical Islamic terrorism. We continue to be vigilant against security threats emanating from our own hemisphere, some of which are concentrated near our southern border. Protecting America’s security also continues to demand clear-eyed, skillful engagement on Iran’s outlaw behavior; on North Korean weapons of mass destruction programs; and on Chinese and Russian aggression in military, economic, information, and cyber domains, among others. Renewing America’s Competitive Advantage for Sustained Economic Growth and Job Creation: Other Department leaders and I, whether advancing U.S. interests in Asia, Europe, or elsewhere in the world, consistently champion the formula that helps nations achieve prosperity: property rights, the rule of law, lower taxes, and an overall lighter touch from government regulation. We will pursue American prosperity by advocating for robust, reciprocal, free, and fair international trade and economic cooperation. Our teams will continue to help open new markets abroad for American businesses. We will reinforce our commitment to partnerships that serve both the United States and our friends, in contrast to other nations, such as China, that adopt a predatory economic posture toward other nations. Promoting American Leadership through Balanced Engagement: We aim to defend American sovereignty and values and help our partners and allies do the same for themselves. We aspire to shape a free and open international order that reflects and upholds democratic values and human rights. I am proud that we helped do this for the second year in a row by hosting more than 100 nations for the Ministerial to Advance Religious Freedom, the largest human-rights conference ever held at the Department of State. We will strive to ensure that international organizations are agile, respectful of national sovereignty, committed to delivering on their stated missions, and dedicated to creating value for those nations that comprise and contribute to them. Ensuring Effectiveness and Accountability to the American Taxpayer: In the past year, we have taken several important steps to honor the confidence that the American people place in the Department of State. You will see throughout this year’s AFR references to our Department Ethos, a defining and guiding statement for all members of the Department of State team. By unifying our efforts, we expect to achieve even greater success on behalf of the American people. In addition, we have instituted regular investment and strategic performance reviews, which enable our senior leaders to ensure that our efforts and resources are aligned with our most important strategic goals. This AFR is not merely a key accountability document; it is our principal publication and report to the President, Congress, and the American people on our leadership in financial management and our stewardship of the public funds entrusted to us. To ensure this AFR is complete and reliable, the Department of State maintains a robust system of management controls. The Department conducted its assessment of the effectiveness of internal controls over financial reporting in accordance with Appendix A of OMB Circular A-123. Based on the results of this assessment and the results of the independent audit, the Department can provide reasonable assurance that the FY 2019 Financial Statements are complete and reliable. The “Message from the Comptroller” in this AFR underscores our improvements in FY 2019 and includes the results of the independent audit of our FY 2019 Financial Statements. The Department of State, in concert with our interagency partners, will continue to meet the complex challenges that our country faces today and in the future – in every corner of the world. We will continue to be a force for good. Michael R. Pompeo Secretary of State January 17, 2020 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 5 MESSAGE FROM THE SECRETARY