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

I ntroduction This report is provided in accordance with the Reports Consolidation Act of 2000. 1 Each year, the Office of Inspector General (OIG) for the Department of State (Department) identifies the most significant management and performance challenges facing the Department and provides a brief assessment of the Department’s progress in addressing those challenges. We assess progress primarily through our compliance process, which relates to individual and often targeted recommendations. Our oversight work often provides a unique window into topical and emergent issues. Throughout much of FY 2020, the nation has been faced with the effects of the Coronavirus (COVID-19) pandemic, which was first identified in China in December 2019. OIG has had to adapt its work to ensure our critical functions continue. OIG’s travel schedule for audits and inspections has been affected and other processes have had to be altered to meet study objectives. Nonetheless, we issued 72 reports in FY 2020, and based on a thorough review of that work and past work, we identify the following major management and performance challenges the Department faced in FY 2020: 1 The Reports Consolidation Act of 2000, § 3, Pub. L. 106-531 (amending 31 U.S.C. § 3516). 1 Protection of people and facilities 2 Management and oversight of contracts, grants, and foreign assistance 3 Information security and management 4 Financial and property management 5 Operating in contingency and critical environments 6 Workforce management 7 Promoting accountability through internal coordination and clear lines of authority We have included within this document examples of reports and findings that are particularly illustrative or noteworthy on certain points. In addition to publicly available work, OIG issues a number of Sensitive But Unclassified and Classified reports throughout the year. Many of the findings in those reports reinforce our assessment of these management challenges, particularly as they relate to protection of people and facilities and information security and management. Continued attention to the management challenges identified will improve the Department’s capacity to fulfill its mission while exhibiting good stewardship of public resources. OIG encourages the Department to consider ways that specific recommendations might be applied broadly to make systemic improvements that will result in meaningful and permanent change. Inspector General’s Statement on the Department’s Major Management and Performance Challenges Acting Inspector General, Matthew S. Klimow PRINCIPAL FINANCIAL STATEMENTS | FINANCIAL SECTION 2020 A gency F inanci al R eport U ni ted S tates D epartment of S tate | 115 Other Information SECTION III: