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

statements and were also reported in subsequent audits. In FY 2019, the Department’s internal control structure continued to exhibit several deficiencies that negatively affected the Department’s ability to account for real and personal property in a complete, accurate, and timely manner. Also, in FY 2019, the Department’s internal control structure was not sufficient to ensure that revenue relating to transactions with other Federal agencies were recorded accurately and in a timely manner. 46 Additionally, an OIG audit found that internal control issues were at the root of the Department’s difficulty in reforming its Special Needs Education Allowance (SNEA), an allowance granted to overseas employees with children who would fall under the Individuals with Disabilities Education Improvement Act. Our audit found that although the Department had taken steps to reform SNEA, two internal control components required attention: the Department needed to publish policies and procedures regarding medical clearances and the appeals process and implement a centralized voucher process. Without such controls, deficiencies with the administration of SNEA could go unnoticed and uncorrected. 47 Inadequate acquisition planning was identified as a deficiency at the Bureau of Western Hemisphere Affairs, which did not have management controls in place for the procurement of IT equipment. This resulted in unnecessary purchases and, in one example, the purchase of 300 computer monitors that were incompatible with existing IT equipment. Only officers overseeing general services and financial management functions could approve procurements in the Department's procurement system, leaving the bureau’s Information Management staff with no official role in or oversight of the purchase. 48 46 OIG, Independent Auditor’s Report on the U.S. Department of State FY 2019 and FY 2018 Consolidated Financial Statements (AUD-FM-20-18, January 2020). 47 OIG, Audit of Selected Internal Controls for the Special Needs Education Allowance (AUD-FM-20-33, June 2020). 48 OIG, Inspection of the Bureau of Western Hemisphere Affairs (ISP-I-20-05, November 2019); ISP-I-20-04, November 2019. 49 OIG, Inspection of Embassy Helsinki, Finland (ISP-I-20-08, December 2019); ISP-I-20-22, May 2020, ISP-I-20-21, May 2020; ISP-I-20-20, May 2020; ISP-I-20-07, February 2020; ISP-I-20-02, November 2019. 50 ISP-I-20-08, December 2019. 51 OIG, Compliance Follow-Up Audit of Bureau of Diplomatic Security Property Management Procedures for Protective Personnel Equipment (AUD-SI-20-30, July 2020). 52 ISP-I-20-04, November 2019. 53 ISP-I-20-02, November 2019. Warehouse, inventory, and property transfer controls were also a challenge for several overseas posts. 49 In Finland, 33 percent of the embassy’s property was stored in a warehouse for an average of 2 years and had a value of more than $1.3 million. 50 Domestically, a compliance follow-up review revealed that, although the Bureau of Diplomatic Security had taken steps to develop and implement a process to manage accountable property, the bureau nonetheless did not in many instances properly document the “charge out” of personal protective equipment included in high-threat kits. OIG highlighted that the items provided are sensitive equipment and must be safeguarded. 51 As in previous years, internal control issues related to the management of bulk fuel and the Department’s motor vehicle fleet persists. For example, in Mauritania the receiving clerk was not present for fuel deliveries, as required; fuel pump meters were not calibrated, as required; and embassy staff did not test fuel tanks for water before and after delivery, in accordance with the Department’s Motor Pool Procedures Overseas guide. 52 In Chad, OIG found inconsistencies in information about mileage and fuel consumption that was entered into the Fleet Management Information System, which increases the risk of mismanagement of vehicles and fuel. 53 5 O perating in C ontingency and C ritical E nvironments Programs and posts operating in contingency and critical environments must adapt to constant change, pervasive security concerns, dramatic swings in personnel and funding, and widespread reliance on contractors and grantees. In addition to the overall challenge of protecting its people and facilities, the 2020 A gency F inanci al R eport U ni ted S tates D epartment of S tate | 125 INSPECTOR GENERAL’S STATEMENT ON THE DEPARTMENT’S MAJOR MANAGEMENT AND PERFORMANCE CHALLENGES | OTHER INFORMATION