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

W. Fiduciary Activities Fiduciary activities are the collection or receipt, and the management, protection, accounting, investment, and disposition by the Federal Government of cash or other assets in which non-Federal individuals or entities have an ownership interest that the Federal Government must uphold. The Department’s fiduciary activities are not recognized on the principal financial statements, but are reported on schedules as a note to the financial statements. The Department’s fiduciary activities include receiving contributions from donors for the purpose of providing compensation for certain claims within the scope of an established agreement, investment of contributions into Treasury securities, and disbursement of contributions received within the scope of the established agreement. See Note 18. X. Change in Accounting Estimate The Foreign Service Retirement Plans Actuarial Experience Study 2012 – 2017 , mentioned earlier in this note, resulted in significant demographic actuarial assumptions changes. These changes to the assumptions as well as changes required by SFFAS No. 33 used to project the valuation of the FSRDF actuarial liability resulted in an overall actuarial loss in 2018 as noted on the Statement of Net Cost. For a further description and itemization, see Note 9. Y. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, and exercise judgment that affects the reported amounts of assets, liabilities, net position, and disclosure of contingent liabilities as of the date of the financial statements, and the reported amounts of revenues, financing sources, expenses, and obligations incurred during the reporting period. These estimates are based on management’s best knowledge of current events, historical experience, actions the Department may take in the future, and various other assumptions that are believed to be reasonable under the circumstances. Due to the size and complexity of many of the Department’s programs, the estimates are subject to a wide range of variables, including assumptions on future economic and financial events. Accordingly, actual results could differ from those estimates. Z. Comparative Data Certain 2018 amounts have been reclassified to conform to the 2019 presentation. The new U.S. Consulate General Matamoros, Mexico is situated on a 7.6-acre compound. The project was dedicated in May 2019. Department of State/OBO 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 77 NOTES TO THE PRINCIPAL FINANCIAL STATEMENTS | FINANCIAL SECTION