U.S. Department of State Fiscal Year 2020 Agency Financial Report

for each property use code recorded in its Real Property Application. The Department multiplies these unit rates by the size of each property to determine replacement values. Deferred Maintenance & Repairs are based on the FCI. An FCI score of 100 percent indicates a facility that is in a condition substantially equivalent to the originally intended and designed capacity, efficiency, or capability. Statements of Federal Financial Accounting Standards (SFFAS) No. 42 defines maintenance and repairs as activities directed toward keeping fixed assets in an “acceptable condition” and specifies management should determine which methods to apply and what condition standards are acceptable. Applying these definitions, the Department’s management has determined that an FCI score of 70 percent indicates “acceptable condition”. While the Department’s average FCI for its worldwide asset inventory is 80 percent, the large number of new facilities constructed over the past 20 years greatly influences this result. The proportion of properties with an FCI score below 70 percent increases for those that are older. The Department’s DM&R is the total repair need to bring all owned and capital leased properties up to an acceptable FCI score of 70 percent. Factors Considered in Determining Acceptable Condition The Department’s PP&E mission is to provide secure, safe, functional, and sustainable facilities that represent the U.S. Government and provide the physical platform for U.S. Government employees at our embassies, consulates and domestic locations as they work to achieve U.S. foreign policy objectives. The facility management of U.S. diplomatic and consular properties overseas is complex, which impacts the success and failure of properties and infrastructure on human life, welfare, morale, safety, and the provision of essential operations and services. Facility management also has a large impact on the environment and on budgets, requiring a resilient approach that results in buildings and infrastructure that are efficient, reliable, cost effective, and sustainable over their life cycle. This occurs at properties of varying age, configuration, and construction quality in every climate and culture in the world. Some posts have the task of keeping an aging or historic property in good working order; while others must operate a complex new building that may be the most technologically advanced in the country. The beginning and ending balances in the “Deferred Maintenance and Repairs” table were calculated using the new FCI methodology. Deferred Maintenance and Repairs (dollars in millions) Asset Category 2020 Ending Balance DM&R 2020 Beginning Balance DM&R Other IBWC Other IBWC General PP&E $ 2,712 $ 5 $ 3,236 $ 6 Heritage Assets (Secretary of State’s Register of Culturally Significant Property) 318 2 526 1 Total $ 3,030 $ 7 $ 3,762 $ 7 112 | U ni ted S tates D epartment of S tate 2020 A gency F inanci al R eport FINANCIAL SECTION | REQUIRED SUPPLEMENTARY INFORMATION